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Fiber to the Press Release: Atlantic Broadband Announces 1Gbps in Miami… (For 40 Homes)

atlanticMore people will read this story than Atlantic Broadband has current customers for its 1Gbps broadband project in Miami.

“Atlantic Broadband is proud to be the first company to deliver 1 Gigabit Internet service to its customers here in the Miami Beach area,” said David Keefe, Atlantic Broadband’s senior vice president and general manager of the South Florida region. “While other companies are talking about what they will be doing, Atlantic Broadband moved forward and started offering this service in one of its communities. We look forward to extending access to our Gigabit Internet service to other properties and communities within our Miami footprint.”

Although Mr. Keefe isn’t being modest, his company’s gigabit broadband coverage area certainly is.

At present, the company serves just 40 properties with the super high-speed broadband service in high-income Indian Creek Village — the 8th richest community in the United States.

The tiny village of Indian Creek is made up of 40 properties and is the 8th richest community in the U.S.A.

The tiny village of Indian Creek, in the Miami-Dade area, is made up of 40 properties and is the 8th richest community in the U.S.A.

Designed to appeal to residents who can spare no expense, the Atlantic Broadband package also includes more than 350 TV channels powered by TiVo, integrated access to Netflix, and unlimited phone service for up to four lines.

An Atlantic Broadband spokesperson wouldn’t reveal the price of the package, and admitted customers cannot choose standalone broadband-only service.

“The needs of Indian Creek Village were unique so custom service packages were created that include all of Atlantic Broadband’s TV services, Gigabit Internet and four phone lines,” a spokeswoman told Multichannel News. “Currently, there is not a published a standalone price for Gigabit Internet.”

Residents in the wealthy enclave include Victoria’s Secret model Adriana Lima, Spanish singer Julio Iglesias, his son Enrique Iglesias, Robert Diener, co-founder of Hotels.com, Edward Lampert, hedge fund billionaire and owner of what is left of Kmart and Sears, Don Shula, retired football coach, Charles Bartlett Johnson, mutual fund billionaire, billionaire investor Carl Icahn and former Philadelphia Eagles owner and billionaire art collector Norman Braman.

Other famous residents both past and present have included Beyoncé and Jay-Z, pro golfer Raymond Floyd, coach Rick Pitino, U.S. Senator George Smathers, Sheik Mohammed al Fassi, television host Don Francisco, co-founder of Calvin Klein Barry Schwartz, radio magnate Raul Alarcon, coal and oil executive, heiress and philanthropist Suzie Linden, Arthur I. Appleton, President of Appleton Electric Company and founder of the Appleton Museum of Art and Bridlewood Farm, and his wife Martha O’Driscoll a former Hollywood actress.

Atlantic Broadband has not ripped out classic cable infrastructure for its less-well-to-do customers outside of the village in the Miami-Dade area and relies on RF over Glass technology for its network extensions. That allows the company to keep its legacy equipment in place while giving some residents access to fiber and others traditional coaxial cable.

Atlantic serves an island of customers in the Miami Beach area, but most of Miami gets its cable service from Comcast. Competitor AT&T has promised fiber upgrades and gigabit speeds for its own customers in the Hialeah, Hollywood, Homestead, Opa-Locka, and Pompano Beach areas, but no time frame has been announced for the upgrade.

Atlantic Broadband will have one advantage over AT&T U-verse. It does not have usage caps.

Atlantic Broadband serves around 230,000 residential and business subs in western Pennsylvania, Miami Beach, Maryland/Delaware, and Aiken, S.C. It is owned by Cogeco Cable of Canada.

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Cable Is #1 in Profits: 41% Cash Flow Margin Tops TV, Movies, Music, and Publishing Industries

Phillip Dampier September 17, 2014 Competition, Consumer News, Internet Overcharging No Comments

eyCable operators leveraged their near-monopoly on high-speed broadband and commercial business services to lead the entertainment and publishing industry in profitability, according to a report from consultant EY (formerly Ernst & Young.)

Cable companies now earn EBITDA (cash flow) margins of 41%, thanks primarily to their broadband divisions. Cable companies have managed to raise prices for Internet access, charge new fees to lease equipment, and monetize broadband usage with usage caps and usage-based billing while their costs to offer broadband service continue to decline rapidly.

“We are seeing that digital is very much driving profits now, instead of disrupting it,” said EY’s Global Media & Entertainment Leader John Nendick. “Companies are figuring out how to monetize the migration of consumers to a variety of digital platforms, and this insatiable demand for content is fueling growth throughout the industry.”

Just a few years ago, cable operators fretted that cord cutting of cable television packages and increased programming costs could take a major bite out of their profitability. But as telephone company broadband competition has waned, cable companies have been able to leverage their near-monopoly on high-speed broadband service with rate increases and usage-control measures that keep costs down and profits up. Customers have also been choosing higher-speed tiers with greater usage allowances at added costs, further increasing profits. The result is more revenue that more than compensates for the loss of profits from cable television.

According to EY, the cable industry will top everyone else in the 2014 survey of the sector. Cash flow margins for other related businesses: cable networks (37%), interactive media (36%), electronic games (29%), conglomerates (26%), satellite television (26%), publishing and information services (21%),  broadcast and network television (19%), film and television production (12%), and music (11%).

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Bell’s Efforts to Take Bell Aliant Private Will Divert $160 Million in Expansion Funds to Shareholders

Bell-Aliant-FibreOP

Bell Aliant’s FibreOp fiber to the home service may suffer as Bell/BCE redirects upgrade investments into shareholder dividend payouts.

Bell Aliant customers in Atlantic Canada won’t benefit from Bell Canada’s (BCE) efforts to take subsidiary Bell Aliant, Inc. private unless they happen to be shareholders.

In July, Bell Canada Enterprises announced its intention to privatize Bell Aliant, which serves customers in Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Labrador, expecting at least $100 million a year in savings from reduced operating costs and capital investments.

Bell Aliant has operated largely independent of Bell Canada from its headquarters in Halifax, N.S. Bell Aliant customers have received FibreOp fiber to the home upgrades in several Atlantic provinces in recent years, providing more advanced services than Bell’s fiber to the neighborhood platform Fibe in Ontario and Quebec. Bell Aliant customers have also avoided usage caps and usage-based billing, getting access to unlimited use broadband at speeds up to 400/350Mbps.

Politicians in Nova Scotia immediately raised the alarm about the possibility of job cuts. Both Tory and NDP opposition leaders complain the Liberal premier has not done enough to protect jobs.

Bell Canada Enterprises

Bell Canada Enterprises

NDP MLA Dave Wilson said all three parties agreed to work on economic issues for the province. Wilson said he fears if the government isn’t vocal about its support for the jobs, Bell might look to move them elsewhere.

The news is better for those holding stock in the company. Existing public minority shareholders are being offered cash or shares of BCE stock (or a combination of both) in return for selling their Bell Aliant stock.

Bell wants to take Bell Aliant private to get access to its consistent $1 billion in cash revenue earned annually, mostly to satisfy BCE shareholders with a more reliable and consistent dividend payout.

Although Bell promises it will continue to invest in Atlantic Canada, its own financial disclosures show customers in the region will see spending on upgrades and other service improvements cut as a result of Bell’s actions.

Bell has committed to spending an average of $420 million a year across Atlantic Canada, but as an independent, Bell Aliant was investing $578 million annually, primarily on fiber upgrades. Over the next few years $160 million of the investment budget will be diverted to maintain a healthy divided payout for BCE stockholders. As of May 2014, BCE was paying a dividend of $0.6175 per quarter with common shares outstanding of 777.3 million, for a quarterly dividend payout of about $480 million per quarter, or $1.92 billion per year. As Bell Aliant shareholders cash out their holdings or convert them to BCE shares, the growing number of BCE shareholders will require Bell to spend more to satisfy dividend payouts. In fact, BCE may transfer enough money out of Bell Aliant’s operations to raise its dividend for all BCE shareholders to attract new investors.

Reduced spending will mean reduced upgrades for Bell Aliant customers. Bell is not promising significant cost savings from merger-related synergy, so capital spending will likely suffer the most as a result. So will customers.

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Stop the Cap’s Formal Written Submission Opposing Comcast-Time Warner Merger Filed With N.Y. PSC

(Ed. Note: Our formal written submission to the New York Public Service Commission is presented in this series of articles. Please note that any graphics included on Stopthecap.com were not included in the formal filing, but are presented here to make the material more reader-friendly. — PMD)

psctest

STATE OF NEW YORK

PUBLIC SERVICE COMMISSION


Joint Petition of Time Warner Cable Inc. and

Comcast Corporation For Approval of a                                       Case 14-M-0183

Holding Company Level Transfer of Control.


 

 

Statement of Opposition to Joint Petition
Phillip M. Dampier, Director and Founder: Stop the Cap!
Rochester, New York
August 1, 2014

Stop the Cap! is a not-for-profit group founded in Rochester in 2008 to fight against the introduction of artificial limits on broadband usage (usage caps, consumption billing, speed throttling) and for better broadband speeds and service for consumers. Our group does not solicit or accept funding from lobbyists, companies, or others affiliated with the telecommunications industry. We are entirely supported by individual donors who share our views.

telecompromising

Regulators cannot outsmart multi-billion dollar corporate giants with temporary merger mitigation strategies that end up not helping consumers for very long, if it all.

Introduction

Our opposition to the Joint Petition is based on our belief it does not meet the “public interest”  test established in Section 222 of the New York Public Service law, and must therefore be denied.

We are concerned the Commission may attempt a mitigation of Comcast’s failure to demonstrate a public interest benefit for New York residents in its application. The Commission may even attempt to negotiate a monetary public benefit adjustment to afford Comcast the opportunity to pay its way to approval of a merger the overwhelming majority of New Yorkers who have shared their views with the Commission ardently oppose. We submit that the recent change in New York law obligates the applicant alone to demonstrate its proposal is in the public interest. It is not the Commission’s responsibility to propose mitigation formulas that tip the balance in favor of an applicant.

Also lacking in the discussion is a careful analysis and comparison of Time Warner Cable’s existing products and services in contrast with Comcast and, more importantly, the impact of its own upgrade program now underway. It is our contention New York will be better served by retaining Time Warner Cable as the dominant cable provider and rejecting Comcast’s attempt to transfer Time Warner’s franchise agreements to itself. We are not opposed to Comcast independently entering New York and competing head-to-head with Time Warner Cable, although we believe it is unlikely.

Ultimately, we believe Comcast’s executive vice-president David Cohen made one of the strongest arguments why this merger simply does not make sense for New York:

“We are certainly not promising that customer bills will go down or increase less rapidly.”[1]

[1]http://arstechnica.com/tech-policy/2014/02/comcast-no-promise-that-prices-will-go-down-or-even-increase-less-rapidly/
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NY’s Broadband Future Is Better With Time Warner Cable: Comcast’s Coming Usage Caps Kill Innovation

psctest

Broadband will be critically impacted by any merger of Comcast and Time Warner Cable in New York. The two companies could not be more different in their philosophies regarding access, pricing, and speeds.

say noThis merger will have an especially profound impact on broadband service in upstate New York, largely left behind out from getting Verizon’s fiber upgrades. New York’s digital economy critically needs modern, fast, and affordable Internet access to succeed. Verizon has not only ceased expansion of its FiOS fiber to the home network in New York, it has virtually capitulated competing for cable customers in non-FiOS areas by agreeing to sell Time Warner Cable service in its wireless stores.[1]  In cities like Rochester, served by Frontier Communications’ DSL, Time Warner Cable is the only provider in town that can consistently deliver broadband speeds in excess of 10Mbps.

Time Warner Cable has never been the fastest Internet provider and had a history of being slower than others to roll out speed increases. But it is also the only cable provider in the country that experimented with usage caps and consumption billing and shelved both after subscribers bitterly complained in market tests in cities including Rochester.[2]

Then CEO Glenn Britt announced the end of the usage cap trial just two weeks after it became public.[3] Britt would later emphasize that he now believed there should always be an unlimited use plan available for Time Warner Cable customers who do not want their Internet use metered.[4] In study after study, the overwhelming majority of customers have shown intense dislike of limitations on their Internet usage, whether from strict usage caps Comcast maintained for several years or usage allowances that, when exceeded, would result in overlimit fees.[5] Just this month, the Government Accounting Office confirmed these findings in a new study that reported near-universal revulsion for usage caps on home wired broadband service:[6]

In only two groups did any participants report experience with wireline UBP [usage-based pricing].

However, in all eight groups, participants expressed strong negative reactions to UBP, including concerns about:

  • The importance of the Internet in their lives and the potential effects of data allowances.
  • Having to worry about data usage at home, where they are used to having unlimited access.
  • Concerns that ISPs would use UBP as a way of increasing the amount they charge for Internet service.

Time Warner Cable has learned an important lesson regarding consumer perception of usage-based billing and usage caps on Internet service. In 2012, the company introduced optional usage caps for customers interested in a discount on their broadband service. Out of 11 million Time Warner Cable broadband customers, only a few thousand have been convinced in enroll such programs.[7]

Despite results like that, Comcast has not learned that lesson and has twice imposed unilateral, compulsory usage limits on their broadband customers, starting with a nationwide hard usage cap of 250GB per month introduced in 2008. Violators risked having their broadband service terminated by Comcast.[8] Today, for some that would be comparable to losing electricity or telephone service. The threat has profound implications in areas where Comcast is the only broadband provider.

Comcast temporarily rescinded its cap in May 2012, but has gradually reintroduced various forms of usage-related billing and caps with market trials in several Comcast service areas[9]:

Nashville, Tennessee: 300 GB per month with $10/50GB overlimit fee;

Tucson, Arizona: Economy Plus through Performance XFINITY Internet tiers: 300 GB. Blast! Internet tier: 350 GB; Extreme 50 customers: 450 GB; Extreme 105: 600 GB. $10 per 50GB overlimit fee;

Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee and Charleston, South Carolina: 300 GB per month with $10/50GB; XFINITY Internet Economy Plus customers can choose to enroll in the Flexible-Data Option to receive a $5.00 credit on their monthly bill and reduce their data usage plan from 300 GB to 5 GB. If customers choose this option and use more than 5 GB of data in any given month, they will not receive the $5.00 credit and will be charged an additional $1.00 for each gigabyte of data used over the 5 GB included in the Flexible-Data Option;

Fresno, California, Economy Plus customers also have the option of enrolling in the Flexible-Data Option.

courtesy-noticeComcast customers in these areas do not have the option of keeping their unlimited-use broadband accounts. Despite the fact Comcast executive vice president David Cohen refers to these as “data thresholds,” they are in fact de facto limits that carry penalty fees when exceeded.[10]

Cohen predicts these usage limits will be imposed on all Comcast customers nationwide within the next five years.[11] Time Warner Cable has committed not to impose compulsory limits on its broadband customers. Verizon has never attempted to place limits on its home broadband customers. Frontier shelved a usage limit plan of 5GB per month attempted in 2008 and currently provides unlimited service.

Comcast CEO Brian Roberts sat for an interview with CNBC in June in which he implied usage growth was impinging on the viability of its broadband business, justifying usage caps. At the end of the interview, Time Warner Cable ran advertising emphasizing it has no usage caps.[12] Both companies have highly profitable broadband services, as do other providers across the country.[13]

As our group has found, usage caps and consumption billing on cable Internet and DSL are little more than a transparent rate increase and anti-competitive maneuver to restrict the growth of the industry’s biggest potential competitor: online video. If a consumer can stream all of their video programming over a broadband account, there is no reason to retain a cable TV package. Comcast’s usage cap provides a built-in deterrent for customers contemplating such a move.

While a Comcast representative offered (without any independent verification) that the average Comcast broadband user consumes fewer than 20GB of data per month, Sandvine released evidence in its Global Internet Phenomena Report 1H2014 study that cord-cutters in the U.S. – at least those whose usage indicates the use of streaming as a primary form of entertainment – now consume about 212GB of data per month (with 153GB of that going toward “real-time entertainment usage”).[14]

That would put many customers perilously close to Comcast’s current market tested usage allowance.

Approving the transfer of franchises from Time Warner Cable to Comcast has the potential of saddling the majority of New York residents with usage caps and/or consumption billing with little or no savings or benefit to the consumer while introducing a major impediment to potential online video competition to help curtail cable television pricing.

[1]http://www.verizonwireless.com/wcms/consumer/home-services/tv-internet-homephone/twc.html
[2]http://www.reuters.com/article/2009/04/16/us-timewarnercable-idUSTRE53F6EQ20090416
[3]http://stopthecap.com/2009/04/16/we-won-time-warner-killing-usage-caps-in-all-markets/
[4]http://www.twcableuntangled.com/2012/02/launching-an-optional-usage-based-pricing-plan-in-southern-texas-2/
[5]http://www.dailytech.com/Microsoft+Study+Bandwidth+Caps+Change+Internet+Users+Behavior/article24639.htm
[6]http://eshoo.house.gov/uploads/7.29.14%20Preliminary%20GAO%20Report%20Findings%20from%20Data%20Cap%20Study.pdf
[7]http://stopthecap.com/2014/03/13/time-warner-cable-admits-usage-based-pricing-is-a-big-failure-only-thousands-enrolled/
[8]http://arstechnica.com/uncategorized/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1/
[9] http://customer.comcast.com/help-and-support/internet/data-usage-trials-what-are-the-different-plans-launching
[10] http://customer.comcast.com/help-and-support/internet/data-usage-trials-what-are-the-different-plans-launching
[11]http://techcrunch.com/2014/05/14/comcast-wants-to-put-data-caps-on-all-customers-within-5-years/
[12]http://stopthecap.com/wp-content/uploads/2014/04/nocaps.png
[13]http://gigaom.com/2014/02/12/comcast-and-time-warner-cable-forget-tv-it-is-all-about-broadband/
[14]http://www.multichannel.com/news/technology/cord-cutters-gobble-down-bits-sandvine-study/374551#sthash.JYFP7o69.dpuf

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Surprise Bid for T-Mobile USA from Iliad’s Free Mobile Has Wireless Competitors, Wall Street Unnerved

french revolutionThe French Revolution in wireless could be spreading across the United States if Paris-based Iliad is successful in its surprise $15 billion bid to acquire T-Mobile USA (right out from under Sprint and Japan-based Softbank). Wall Street hopes it isn’t true.

If you named one wireless carrier in the world guaranteed to provoke groans, sweat, and Excedrin headaches from powerful wireless industry executives living high on 40%+ annual margins, Iliad and its notorious Free Mobile would be the chief provocateur. Initially dismissed as an irrelevant upstart (much like T-Mobile itself) when it announced service on a less-robust network in 2012, as soon as Free Mobile announced its groundbreaking prices, panic was rife in the boardrooms and executive suites of competitors Orange, SFR and Bouygues Telecom, who couldn’t slash their own prices fast enough.

As one wireless executive in Paris put it, when Free Mobile launched, “the tsunami hit.”

In short order, Free Mobile has taken nearly five million of their competitors’ very profitable customers in France, mostly from its vicious price-cutting that results in rates half that of any other competitor.

Orange and other carriers promptly announced slashed shareholder dividend payouts and implemented cost-saving measures after being forced to cut pricing.

American wireless executives visiting Europe were aghast at the prices charged by the French upstart, suggesting they were reckless and would eliminate necessary investment in upgrades. Although France has been behind the United States in launching 4G service upgrades, French customer satisfaction with their wireless service is higher than in the U.S., and Free Mobile has the lowest customer loss (churn) rate of any carrier in France.

Iliad’s reputation as a nasty competitor is fine with self-made billionaire CEO Xavier Niel, who has become extremely wealthy selling cutting edge, yet affordable, telecommunications products without losing touch of his more modest roots. But he is reviled by most of his competitors for disrupting the comfortable wireless service business models his competitors have maintained for years. Niel has thrown marketing bombs into every sector of the French telecom market, ruthlessly cutting prices for customers while relying on in-house innovations to keep costs low.

http://www.phillipdampier.com/video/Euronews Telecoms turmoil in France 2012.mp4

Euronews reported on the turmoil Iliad caused incumbent wireless carriers when it forced them to respond with major price-cuts to stay competitive. (0:44)

freemobileFree’s customer care center is run on Ubuntu-based, inexpensive notebook and desktop computers. Free’s wired broadband, television, and phone service is powered by set-top boxes and network devices custom-developed inside Iliad to keep costs down. Its creative spirit has been compared to Google, much to the chagrin of its “business by the book” competitors.

“It’s not done like this,” is a common refrain heard when Free Mobile announces more price cuts, an easing of usage caps, or completely free add-ons.

Today, a typical Free Mobile customer pays $26.75US a month for wireless service which includes:

  • Unlimited calls to France and 100 other destinations, including the U.S., Canada, China, and all French overseas departments (eg. Guadeloupe, Tahiti, Mayotte, etc.);
  • Unlimited SMS/text messages;
  • Unlimited MMS messages to French numbers;
  • 20GB of 4G access before the speed throttle kicks in;
  • Unlimited free Wi-Fi on Free’s extensive Wi-Fi network.

A Free Mobile customer that also subscribes to Free’s wired broadband or television service gets an even bigger discount. Their monthly wireless bill for the same features? $21.40US a month.

Niel said the reason he has not brought the Free Mobile brand to the United States is because the wireless industry here is highly anti-competitive. The fact T-Mobile USA is now up for sale represents ‘the opportunity of a lifetime,’ a “one-time opportunity to enter the world’s-largest telecoms market,” a person familiar with the matter said prior to the announcement.

“The competitive landscape in the U.S. is a lot less aggressive than what we are used to in France,” added Niel. “There is enormous potential. It is almost too good to be true.”

A number of Wall Street analysts who prefer the current business model of high cost/high profits are keeping their fingers crossed the Iliad offer is just a pipe dream. Some, including analysts on Bloomberg TV, dismissed Niel as a former pornographer and suggested “for the guppies, it is whale season,” a reference to Iliad’s small size relative to T-Mobile USA.

“To say this is surprising is something of an understatement; it is one of the most bizarre bits of potential M&A we have ever witnessed in the sector,” said analysts from Espirito Santo in a note to investors.

http://www.phillipdampier.com/video/Bloomberg Who Is T-Mobiles New French Suitor 8-1-14.flv

Some on Wall Street are mocking the deal as a guppy hoping to swallow a whale. T-Mobile is considerably larger than Iliad, says CNBC. “It’s preposterous. Who put them up to it?” (6:18)

“Iliad is about a third of the size of T-Mobile US, and we don’t think there would be synergies from the deal,” said Jonathan Chaplin, an analyst at New Street Research, in a note. “It would be tough to finance without Xavier Neil relinquishing control. Sprint and anyone else with synergies should be able to outbid them.”

Should Free Mobile enter the United States, its cutthroat pricing would make CEO John Legere’s “bad wireless boy” campaign to make T-Mobile the “uncarrier” quaint in comparison. Every wireless carrier in the U.S. could be forced to cut rates by one-third or more to stay competitive should Niel adopt a similar business model for Free Mobile in the U.S. market.

Some worry that Softbank’s bid to merge Sprint and T-Mobile together has just become even less likely with the possibility of a new player in the U.S. market, competing against three other carriers, not two as the Softbank deal proposes.

http://www.phillipdampier.com/video/CNBC Sprint Deal with T-Mobile Has Little Chance 8-1-14.flv

CNBC spoke with Nik Stanojevic, equity analyst at Brewin Dolphin, who was surprised Iliad threw in a bid for T-Mobile, but believes Softbank/Sprint’s deal to acquire T-Mobile has very little chance getting by regulators. (2:40)

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New York City Comptroller Unimpressed With Comcast/Time Warner Cable Merger

one mbps

“Hey look, is that the Verizon FiOS truck?”

New York City comptroller Scott Stringer is lukewarm at best about the idea of Comcast taking over for Time Warner Cable. In a letter to the New York Public Service Commission released today, Stringer says the deal needs major changes before it comes close to serving the public interest.

“As New York City residents know all too well, our city is stuck in an Internet stone age, at least when compared to other municipalities across the country and around the world,” Stringer wrote. “According to a study by the Open Technology Institute at the New America Foundation, New Yorkers not only endure slower Internet service than similar cities in other parts of the world, but they also pay higher prices for that substandard service. Tokyo residents enjoy speeds that are eight times faster than New York City’s, for a lower price. And Hong Kong residents enjoy speeds that are 20 times faster, for the equivalent price.”

Stringer should visit upstate New York some time. While the Big Apple is moving to a Verizon FiOS and Time Warner Cable Maxx or Cablevision/Optimum future, upstate New York is, in comparison, Raquel Welch-prehistoric, especially if your only choice is Verizon “No, We Won’t Expand DSL to Your House,” or Frontier “3.1Mbps is Plenty” Communications. If New York City’s speeds are slow, upstate New York speeds are glacial.

“The latest data from the FCC shows that, as of June 30, 2013, over 40 percent of connections in New York State are below 3Mbps,” Springer added.

Come for the Finger Lakes, but don’t stay for the broadband.

Should the merger be approved, Comcast would be obligated to comply with the existing franchise agreement between Time Warner Cable and the City of New York. However, in order for the proposed merger to truly be in the public interest, Comcast must have a more detailed plan to address these ongoing challenges and to further close the digital divide that leaves so many low-income New Yorkers cut off from the information superhighway. To date, Comcast’s efforts to close the digital divide have focused on its “Internet Essentials” program, which was launched in 2012.iii The program offers a 5 megabit/second connection for $9.95/month (plus tax) to families matching all of the following criteria:

• Located within an area where Comcast offers Internet service
• Have at least one child eligible to participate in the National School Lunch Program
• Have not subscribed to Comcast Internet service within the last 90 days
• Does not have an overdue Comcast bill or unreturned equipment

While the aim of the program is laudatory, its slow speed, limited eligibility, and inadequate outreach have kept high-quality connectivity beyond the reach of millions of low-income Americans. Not only are the eligibility rules for Internet Essentials far too narrow, but the company has done a poor job of signing up those who do meet the criteria. In fact, only 300,000 (12 percent) of eligible households nationwide have actually signed up since the program was launched in 2011.

It is critical that the PSC not only press Comcast to significantly expand the reach of Internet Essentials, but also that it engage in appropriate oversight to ensure that the company is meeting its commitments to low-income residents of the Empire State.

Phillip "Comcast isn't the answer to the problem, it's the problem itself" Dampier

Phillip “Comcast isn’t the answer, it’s the problem” Dampier

In fact, the best way New York can protect its low-income residents is to keep Comcast out of the state. Time Warner Cable offers everyday $14.99 Internet access to anyone who wants it as long as they want it. No complicated pre-qualification conditions, annoying forms, or gotcha terms and conditions.

When a representative from the PSC asked a Comcast representative if the company would keep Time Warner’s discount Internet offer, a non-answer answer was the response. That usually means the answer is no.

“We have seen how telecommunications companies will promise to expand access as a condition of a merger, only to shirk their commitments once the merger has been approved,” Springer complained. “For instance, as part of its 2006 purchase of BellSouth, AT&T told Congress that it would work to provide customers ‘greater access and more choices for broadband, no matter where they live or work.’ However, later reports found that the FCC relied on the companies themselves to report their own merger compliance and did not conduct independent audits to verify their claims.”

Big Telecom promises are like getting commitments from a cheating spouse. Never trust… do verify or throw them out. Comcast still has not met all the conditions it promised to meet after its recent merger with NBCUniversal, according to Sen. Al Franken (D-Minn.).

Stringer also blasted Comcast for its Net Neutrality roughhousing:

While the FCC has not declared internet providers to be “common carriers”, state law has effectively done so within the Empire State. Under 16 NYCRR Part 605, a common carrier is defined as “a corporation that holds itself out to provide service to the public for hire to provide conduit services including voice, data, or video by electrical, electronic, electromagnetic or photonic means.”

Importantly, the law requires these carriers to “provide publicly offered conduit services on demand to any similarly situated user on substantially similar terms, subject to the availability of facilities and capacity.”

In recent months, Comcast has shown that it is willing to sacrifice net neutrality in order to squeeze additional payment out of content providers, such as Netflix. As shown in the chart below, Netflix download speeds on the Comcast network deteriorated rapidly prior to an agreement whereby Netflix now pays Comcast for preferential access.

speed changes

concast careConsumers have a legitimate fear that if access to fiber-optic networks is eventually for sale to the highest bidder, then not only will it stifle the entrepreneurial energy unleashed by the democratizing forces of the Internet, but will also potentially lead to higher prices for consumers in accessing content. Under that scenario, consumers are hit twice—first by paying for Internet access to their home and second by paying for certain content providers’ preferred access.

Internet neutrality has been a core principle of the web since its founding and the PSC must examine whether Comcast’s recent deal with Netflix is a sign that the company is eroding this principle in a manner that conflicts with the public interest.

Stringer may not realize Comcast also has an end run around Net Neutrality in the form of usage caps that will deter customers from accessing competitors’ content if it could put them over their monthly usage allowance and subject to penalty rates. Comcast could voluntarily agree to Net Neutrality and still win by slapping usage limits on all of their broadband customers. Either causes great harm for competitors like Netflix.

“I urge the Commission to hold Comcast to that burden and to ensure that the merger is in the best interest of the approximately 2.6 million Time Warner Cable subscribers in New York State and many more for whom quality, affordable Internet access remains unavailable,” Stringer writes. “And I urge Comcast to view this as an opportunity to do the right thing by introducing itself to the New York market as a company that values equitable access and understands that its product—the fourth utility of the modern age—must be available to all New Yorkers.”

If Comcast’s existing enormous customer base has already voted them the Worst Company in America, it is unlikely Comcast will turn on a dime for the benefit of New York.

The best way to ensure quality, affordable Internet access in New York is to keep Comcast out of New York.

No cable company has ever resolved the rural broadband problem. Their for-profit business model depends on a Return on Investment formula that prohibits expanding service into unprofitable service areas.

These rural service problems remain pervasive in Comcast areas as well, and always have since the company took over for AT&T Cable in the early 2000s. Little has changed over the last dozen years and little will change in the next dozen if we depend entirely on companies like Comcast to handle the rural broadband problem.

A more thoughtful solution is encouraging the development of community co-ops and similar broadband enterprises that need not answer to shareholders and strict ROI formulas.

In the meantime, for the good of all New York, let’s keep Comcast south (and north) of the border, thank you very much.

 

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Time Warner Cable Promises Possible 1Gbps Upgrade for Los Angeles by 2016

gigabitAssuming Comcast doesn’t take over Time Warner Cable and change priorities, the city of Los Angeles is getting a commitment Time Warner will “be in a position to offer” gigabit broadband speeds to homes and businesses in the city no later than 2016.

“Over the last four years, Time Warner Cable has invested more than $1.5 billion to enhance our infrastructure and services in Los Angeles. This significant investment coupled with new ‘Gigasphere’ technology positions us to be able to introduce gigabit-per-second speeds in 2016,” said Peter Stern, executive vice president and chief strategy, people and corporate development officer at TWC. “Leveraging our existing network allows us to deliver these speeds faster and with less disruption than any other provider.”

The new gigabit broadband service will be deployable with an upgrade to DOCSIS 3.1 technology, which offers cable operators a more efficient way to deliver broadband over current cable system infrastructure.

“We believe the introduction of consumer gigabit speeds in our near future will facilitate even greater innovations among students, entrepreneurs and many industries powering the Los Angeles economy,” said Dinni Jain, chief operating officer at TWC. “Cable was the first to bring broadband Internet to the masses nearly 20 years ago, and thanks to the dynamic nature of our fiber-rich network, we foresee endless new possibilities as we roll-out gigabit speeds to all of Los Angeles.”

twcmaxThe first Gigasphere pilot test will begin sometime next year. But a Comcast takeover could shift priorities away from offering the kinds of broadband speeds Time Warner is providing under its TWC Maxx upgrade program. Time Warner’s Internet speeds in upgraded areas are now substantially faster and cheaper than what Comcast offers in its service areas. Comcast could decide to retire the broadband upgrade program altogether and settle on offering speeds comparable to what it already sells across much of its national footprint.

Comcast is also readying a return to usage caps and overlimit fees, with no options for unlimited service, in several test markets.

But there are some caveats on Time Warner’s side as well.

Time Warner’s careful language suggests the company may be technologically capable of providing gigabit speeds but isn’t absolutely committing to offer those speeds anytime soon. Time Warner will not complete Maxx upgrades in Los Angeles until the end of this year, and the company has made no announcements about further expanding Maxx upgrades to other cities. No pricing details were available.

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GCI – Alaska’s Outrageous Internet Overcharger; Customers Paying Up to $1,200 in Overlimit Fees

GCI_logoNearly 10 percent of GCI’s revenue is now earned from overlimit fees collected from Alaskan broadband customers who exceed their cable or wireless usage limits.

GCI is Alaska’s largest cable operator and for many it is the only provider able to deliver stable speeds of 10Mbps+, especially to those who live too far away for comparable DSL speeds from ACS, one of GCI’s largest competitors.

The result has given GCI a de facto monopoly on High Speed Internet (10+ Mbps) access, a position that has allowed the company to dramatically raise prices and slap usage limits on broadband users and charge onerous overlimit fees on those who exceed their allowance.

GCI already charges some of the highest broadband service prices in the country and has insisted on imposing usage caps and overlimit fees on even its most expensive plans, creating high profits for them and enormous bills for customers who have no reliable way to consistently track their usage. GCI’s suspect usage meter is often offline and often delivers usage estimates that customers insist are far from accurate. GCI says it has the last word on the accuracy of that meter and has not submitted its meter to independent testing and verification by a local or state regulatory body specializing in measurement accuracy.

GCI also makes it extremely difficult for customers to understand what happens after customers exceed their usage limits. The website only vaguely offers that overlimit fees vary from “$.001 (half penny) to $.03 (three cents) per MB,” which is factually inaccurate: $.001 does not equal a half-penny. It can equal bill shock if a customer happens to be watching a Netflix movie when their allowance runs out.

KC D’Onfro of Bethel subscribes to GCI’s Alaska Extreme Internet plan, which in February cost $100 a month for 4/1Mbps service with a 25GB usage cap. While that allowance is plenty for the countless e-mails GCI promises you can send, any sort of streaming video can chew through that allowance quickly.

Business Insider explains what happened:

One fateful night, she and her roommate decided to watch a movie on Netflix. Both of them fell asleep halfway through, but the movie played ’til the end, eating up two GBs of data too many and consequently doubling their bill for that month. (One hour of HD video on Netflix can use up to 2.3 GB of data.)

“Now, I don’t even consider Netflix until near the very end of the month, and I have to be sure that I’m no more than three-fourths of the way into my total data, at the absolute most,” KC says. (Her provider, a company called GCI, allows subscribers to view their daily usage and sends them a notice when they’ve hit 80%.) “It’s a very serious business – I have to poll people to figure out what that one very special movie should be.”

That left the D’Onfro family with a $200 broadband bill – $100 for the service and an extra $100 overlimit fee for that single Netflix movie. Today, GCI demands $114.99 a month for that same plan (with the same usage allowance) and those not subscribing to their TV service also face a monthly $11.99 “access fee” surcharge for Internet-only service.

expensive

“Many Alaska consumers have brought their GCI broadband bills to ACS for a comparative quote, providing dozens of examples of GCI overage charges,” said Caitlin McDiffett, product manager of Alaska Communications Systems (ACS), the state’s largest landline phone company. “Many of these examples include overage charges of $200 to $600 in a single month. In one instance, a customer was charged $1 ,200 in overage fees.”

GCI also keeps most customers in place with a 24-month contract, making it difficult and costly to switch providers.

McDiffett told the FCC the average Alaskan with a Netflix subscription must pay for at least a 12Mbps connection to get the 60GB usage allowance they will need to watch more than two Netflix movies a week in addition to other typical online activities. GCI makes sure that costs average Alaskans real money.

“A customer purchasing 12Mbps for standalone (non-bundled) Home Internet from GCI pays $59.99 per month plus an $11.99 monthly “access” fee for a total of $71.98 per month with a 60GB usage limit ($0.004/MB overage charge),” reports McDiffett. “Thus, the monthly bill for this service is more typically $76.98, including a $5.00 overage charge. To purchase a service with a usage limit of at least 100GB per month, a GCI customer would have to pay $81.98 per month (the $69.99 standalone rate plus $11.99 monthly access fee), subject to an overage charge of $0.003/MB.”

Rural Alaskans pay even more on GCS' expensive wireless ISP.

Rural Alaskans pay even more when using GCI’s expensive wireless ISP.

Regular Alaskan Stop the Cap! reader Scott reports that no matter what plan you choose from GCI, they are waiting and ready to slap overlimit fees on you as soon as they decide you are over your limit.

Their super-deluxe re:D service — up to 200Mbps, now available in Anchorage, MatSu, Fairbanks, Juneau, Kenai, Ketchikan, Sitka, and Soldotna areas, is not cheap.

“It’s a whopping $209.99 + taxes, and if you don’t have cable TV service bundled, the $11.99 monthly access fee also applies,” Scott says.

For that kind of money, one might expect a respite from the usage meter,  but not with GCI.

“As a top tier service, you’d think they could just offer it as ’unlimited’ at that rate,” Scott says. “Actually, it has a 500GB usage cap and $.50/GB overage fee. Again, we have a metering provider who claims the overages were to penalize bandwidth hogs, yet then offer [faster] service, increasing overall load on their network, instead of just offering a fair amount of bandwidth per customer and eliminating overages by offering unlimited usage.”

One of ACS' strong selling points is no data caps, but DSL isn't available to everyone.

One of ACS’ strong selling points is no data caps, but DSL isn’t available to everyone.

In a filing with the FCC, ACS’ McDiffett suspects usage caps are all about the money.

“GCI reported 2012 Home Internet revenue of $86 million of which $7.9 million (nearly ten percent) was derived from overage charges,” said McDiffett. “On average, about $5 per customer per month can be attributed to GCI overage charges. GCI imposes usage limits or data caps at every level of Home Internet service, from its 10 Mbps service (10GB limit, $0.005/MB overage charge) to its 100 Mbps service (500GB limit, $0.0005/MB overage charge).”

badbillOver time, and after several cases of bill shock, Alaskan Internet customers have become more careful about watching everything they do online, fearing GCI’s penalties. That threatens GCI’s overlimit revenue, and now Stop the Cap! readers report sudden, long-lasting problems with GCI’s usage checker, often followed by substantial bills with steep overlimit penalties they claim just are not accurate.

“I currently pay $184.99 a month for GCI‘s highest offered broadband service. 200/5Mbps, with a 500GB monthly data cap,” shares Stop the Cap! reader Luke Benson. “According to GCI, over the past couple months our usage has increased resulting in overage charges at $1.00 a GB.”

In May, Benson was billed $130 in overlimit fees, but after complaining, the company finally agreed to credit back $100. A month later, they recaptured $60 of that credit from new overlimit fees. This month, Benson would have to unplug his modem halfway through his billing cycle or face another $50 in penalties.

GCI’s bandwidth monitor has proved less than helpful, either because it is offline or reports no usage according to several readers reaching out to us. GCI’s own technical support team notes the meter will not report usage until at least 72 hours after it occurs. GCI itself does not rely on its online usage monitor for customer billing. Customer Internet charges are measured, calculated, and applied by an internal billing system off-limits for public inspection.

“I have reached out to GCI multiple times asking for help, suggestions, resolution,” complains Benson. “All I get told is to turn down the viewing quality of Netflix, don’t allow devices to auto update, etc. They pretty much blamed every service but their own.”

Other customers have unwittingly fallen into GCI’s overlimit fee trap while running popular Internet applications that wouldn’t exist if GCI’s caps and overlimit fees were common across the country. Lifelong Bethel resident and tech consultant John Wallace knows the local horror stories:

  • tollsTwo girls had unwittingly allowed Dropbox to continuously sync to their computers, racking up a $3,500 overcharge in two weeks;
  • One user’s virus protection updater got stuck on and it cost him $600;
  • Wallace has heard people say, “I was gaming and I got a little out of hand and I had to pay $2,800;”
  • Two six-year-old girls ran up $2,000 playing an online preschool game. Mom was totally unaware of what was going on, until she got the bill.

GCI’s own Facebook page was the home of a number of customer complaints until the complaint messages mysteriously disappeared. Stop the Cap! itself discovered it was not allowed to even ask questions on the company’s social media pages, apparently already on their banned list.

While GCI does well for itself and its shareholders, Wallace worries about the impact GCI’s control of the Alaskan Internet High Speed Internet market will have on the economy and Alaskan society.

“It’s about equal access and opportunity,” Wallace told Business Insider. “The Internet was meant to improve the lives of people in rural Alaska, but – because of the data caps and the sky-high overage fees – it ends up costing them huge amounts of money. We have one of the highest unemployment rates in the nation, and some of the highest rates of suicide, sexual assault, and drug abuse. The people who can’t afford it are the ones that are getting victimized.  It was supposed to bring access – true availability of goods and services – but it really just brought a huge bill that many can’t afford.”

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Friday is the Deadline for Net Neutrality Comments With the FCC; Here’s How to Get Yours Submitted

netneutralityFriday is the last day to submit your views on Net Neutrality with the Federal Communications Commission. Although there may be some future opportunities to comment, it’s important to make your voice heard with the FCC today. Almost 650,000 Americans have done so to date, and we need to see this number rise even higher to combat the influence and power of Big Telecom companies looking to turn the Internet into a corporate toll booth.

If you recall, FCC chairman Tom Wheeler is promoting a scheme where big ISPs like Verizon, AT&T and Comcast can divide up the Internet and introduce toll lanes allowing preferred paid traffic to travel on the Internet at faster speeds, usually at the expense of unpaid traffic that will get relegated to an Internet slow lane. It’s pay to play, and customers of these ISPs are already getting a preview of the new corporate road map for the net. Netflix viewers on ISPs that don’t have a paid agreement to handle video traffic suffer from rebuffering and lower quality video. But ISPs collecting tolls from Netflix don’t subject their customers to a degraded online video experience. Of course, before ISPs realized they could make money selling fast lanes, Netflix worked fine on virtually all of these providers.

Wheeler’s proposal would extend the two-tiered Internet to other websites and service providers, allowing big telecom companies to hand-pick winners and losers and discriminate in favor of their own Internet traffic. Comcast does that today with online video on certain game consoles. If that video comes from Comcast, it doesn’t count against any usage caps. If it doesn’t, it could get rough sticking to Comcast’s arbitrary usage allowance.

The FCC is in way over its head, unaware of the creative ways ISPs can find loopholes large enough to drive through any well-intentioned consumer protections. There is only once certain way to keep ISPs honest — reclassify them as what they should have been all along – a telecommunications service subject to common carrier rules. That would guarantee ISPs could not meddle with your Internet service for financial gain, could not artificially slow down “non-preferred” traffic to make room for paid traffic, and would guarantee that Internet applications of the future will succeed or fail on their merits, not on how much money they are willing to spend.

Since the FCC website is jammed today, we recommend e-mailing the Commission by this Friday at: [email protected]

Our friends at Free Press have published some sample comments they are getting, which may help you formulate yours. Here is ours as well:

Dear Chairman Wheeler,

Although we believe your intentions are good, your proposed Net Neutrality rules simply do not afford enough protection to preserve a free and open Internet. Troubling signs are already clear as providers test how much they can get away with meddling with Internet traffic. The wireless experience is replete with examples of selective speed throttling, usage caps, and traffic discrimination that allows some content to escape the usage meter and throttle while competitors cannot.

The Internet is a transformative experience for many Americans because for the first time in a long time, entrepreneurs can build online businesses that are judged on their merit, not on how much money they have to spend to achieve and maintain prominence. Anything that allows an ISP to collect additional funds for a “preferred” traffic lane will come at the detriment of others who have to share the same broadband pipe. This is especially evident in the wireless world, which escaped even the light touch regulatory framework of your predecessor. Providers promptly began creating new schemes to further monetize growing data traffic, bandwidth shortage or not. Almost none of these changes really benefit customers — they are simply new revenue-making schemes.

A foreshadowing of what is likely to happen under your proposal is also apparent with Comcast and Netflix. For several years subscribers had no trouble accessing online video. But when the issue of traffic compensation was reintroduced by Internet Service Providers, the upgrades to manage natural Internet growth largely stopped and the Netflix viewing experience on these ISPs deteriorated. Verizon, AT&T and Comcast all argue that a paid traffic deal would adequately compensate them to enhance the viewing experience customers already pay good money to receive with or without a paid peering arrangement with Netflix.

Money drives these debates. If an ISP properly managed their broadband infrastructure, there would be no incentive for any company to contract for a better online experience on a so-called “fast lane” because existing service would perform more than adequately. When a company cuts back on those upgrades, a market for paid prioritization appears. Customers will ultimately pay the price, primarily to ISPs that already enjoy an enormous margin selling broadband service at inflated prices.

A rising tide floats all boats, so your focus should not be as short-sighted as allowing ISPs to divide up the limited broadband highway. The FCC should instead focus on setting the conditions to hasten new competition and force existing providers to upgrade and maintain their networks for the benefit of all subscribers and content producers. The FCC must also move swiftly to cancel state bans on community broadband networks, eliminate regulations that deter broadband start-ups, and maintain enough oversight to guarantee a level playing field on which all can compete.

There is only one way to effectively accomplish all that. Reclassify broadband service the way it should have been classified all along: as a telecommunications service subject to common carrier regulations. Canada has been very successful requiring ISPs to open their last mile networks to competitors, which have allowed people to avoid compulsory usage caps. Customers have a choice of multiple providers from their local phone or cable company, giving rise to much-needed competition.

With strong Net Neutrality, consumers can reach the websites they want without interference. Ignore nonsense suggesting Net Neutrality is a government takeover or censors the Internet — two provably false assertions. In fact, Net Neutrality is the opposite.

I urge you to move with all speed towards reclassification, if only to prevent the inevitable legal challenges to any future policies built on the shakier ground of the current framework, which has not held up well under court scrutiny. I hope the voices of more than a half-million Americans contacting you on this issue will be more than enough to overcome industry objections. We are not asking for 1950s-style telephone regulations. We just want a legally affirmed platform that allows the Internet of today to continue being successful tomorrow.

Yours very truly,

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