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FCC Chairman Gives Green Light for More Cable Mergers; Calls and Reassures Cable Execs Some Deals Are Okay

Wheeler

Wheeler

Federal Communications Commission chairman Tom Wheeler personally called the chief executives of some of America’s largest cable operators, including Charter Communications and Time Warner Cable, to reassure them that the agency does not object to future cable industry consolidation.

Wheeler said any new merger deal would be assessed on its own merits, and cable executives should not assume the agency is against future cable mergers just because it objected to the Comcast/Time Warner Cable deal.

The Wall Street Journal reports Wheeler sought to “clear the air” in response to industry hand-wringing over whether future buyouts and acquisitions could get passed the FCC. Wheeler reassured executives they were over-reading the commission’s intent.

Wheeler did suggest he would like to see more competition among cable companies, an idea that has been dead on arrival since the cable industry began colluding to agree to stay out of each other’s territories two decades ago. Although Wheeler would like to see competition increased by cable operators competing head to head for customers, it is much more likely the industry will seek further consolidation to reduce the prospect of competition, not increase it.

The larger the cable operator, the greater the economy of scale — especially for cable programming costs. A potential new entrant would likely be discouraged from entering the business, discovering it had no prospect of getting cable programming at prices comparable to what the largest cable operators pay.

85% of Italy Will Get Fiber to the Home Broadband Service Within Six Years

enelItaly’s power utility Enel has offered to help the country build a massive fiber to the home broadband network capable of bringing ultrafast Internet speeds to 85% of the country within six years if it can sort out a potential conflict with Telecom Italia, the country’s largest telecom company.

Enel, still controlled by the Italian government, volunteered its domestic network infrastructure to help install fiber optics more cheaply than Telecom Italia could manage on its own, especially in rural and industrial areas.

The offer is controversial because it could put the new fiber network under public control by using Enel, whereas Telecom Italia is a publicly traded company now majority controlled by Spain’s Telefónica and several Italian banks.

Enel, which is focusing much of its domestic strategy on developing its power distribution grid and smart digital technology, has about 1.2 million kilometers of power lines and 450,000 power distribution cabinets across Italy. Smart grid technology is often dependent on fiber optic communications, so making room for Italy’s Metroweb fiber network seemed easy enough.

Prime Minister Matteo Renzi is backing the $13.35 billion project under the Metroweb brand, a company partly owned by state lender Cassa Depositi e Prestiti (CDP).

telecom italiaSuch a deal could potentially lock out Telecom Italia, which is already upset with the government over ownership issues, technology and its inability to buy into the Metroweb project.

Enel insists their involvement would be “synergistic with what the telecom operators have done and planned,” not in competition with those efforts. But Telecom Italia remains concerned it could be left behind by a project that would likely dominate Italian telecommunications for decades.

This isn’t the first venture into telecommunications Enel has made. The power company earlier launched Wind, the third biggest of Italy’s four mobile network operators, which is today owned by Vimpelcom.

Telecom Italia is widely blamed for Italy’s lagging broadband rankings, having failed to invest in up-to-date network technology because of the company’s high debt and falling revenues. Fewer than 1 percent of Italians with an Internet subscription receive connection speeds of at least 30 megabits per second, according to the Agcom communications authority. That compares with the European average of 21 percent. The Italian government considers anything short of a modern fiber optic network a drag on the country’s competitiveness and wants the network built as fast as possible.

Verizon Buys AOL for $4.4 Billion; Bolsters Verizon’s Mobile Video/Advertising Business

aolVerizon Communications this morning announced it will buy AOL, Inc., in a $4.4 billion cash deal that will provide Verizon with powerful mobile video and advertising platforms.

Originally known for its ubiquitous dial-up Internet access, AOL today is better described as a content and advertising aggregator — putting online video in front of viewers bolstered by AOL’s powerful advertising technology that can match a targeted advertising message to a specific viewer in milliseconds.

AOL’s portfolio also includes the well-known EngadgetTechCrunch and Huffington Post websites, which many analysts expect will not be part of the deal, quickly spun off to a new owner(s) to avoid any political headaches over Verizon’s control of the well-known content sites, some including coverage critical of Verizon.

Verizon-logoAll signs point to the AOL acquisition as more evidence Verizon management is shifting priorities to its mobile business, Verizon Wireless. In 2014, Verizon acquired the assets of Intel Media, which was planning an Internet TV service called OnCue. Verizon’s acquisition will help it develop an alternative television platform and many analysts expect it will primarily reach Verizon Wireless customers.

Complimenting online video with AOL’s ad placement and insertion platform will likely be the best chance Verizon has to monetize that video content.

“Certainly the subscription business and the content businesses are very noteworthy,” confirmed Verizon’s president of operations, John Stratton. “For us, the principal interest was around the ad tech platform.”

http://www.phillipdampier.com/video/Bloomberg Why Verizon Coveted AOLs Ad Technology and Mobile Video 5-12-15.flv

Bloomberg says Verizon’s real interest in AOL is their online advertising platform, which can bolster Verizon Wireless’ mobile video service. (2:39)

Verizon’s $4 billion investment in AOL did not go into expanding its fiber optic platform FiOS.

Verizon Wireless Multicast

Verizon Wireless Multicast

“For the price it’s paying for AOL, Verizon could deploy its FiOS broadband service across the rest of its service area, bringing much-needed services and competition to communities like Baltimore, Boston and Buffalo,” said Free Press research director S. Derek Turner. “Instead, the company is spending a fortune to wade into the advertising and content-production markets. In terms of the latter, Verizon has already shown a willingness to block content and skew news coverage.”

As Stop the Cap! reported last week, that isn’t a surprise to some utility companies that believe all signs point to Verizon’s growing disinterest in its wireline division. Florida Power & Light expects Verizon will become a wireless only company within the next 10 years.

While AT&T explores expanding its wireless service internationally and seeks approval for its acquisition of satellite service DirecTV, Verizon Wireless is moving to monetize increased customer usage of its network with the forthcoming introduction of a video service this summer. The product would offer a mix of ad-supported and paid short video content and may offer live multicast programming that can reach a larger audience without disrupting network capacity.

Increased viewing of high bandwidth video will force Verizon customers to continually upgrade data plans, further monetizing Verizon’s wireless business. AOL’s ad insertion technology will allow Verizon to earn advertising income from viewers, creating a dual revenue stream.

Verizon can also sell advertisers information about its massive customer base of wired and wireless customers, including their browsing habits and demographic profile to deliver “data-driven marketing and addressable advertising.”

http://www.phillipdampier.com/video/Bloomberg Verizon-AOL Deal 1999 All Over Again 5-12-15.flv

Bloomberg News puts together several of Verizon’s puzzling recent acquisitions, which point to a shift of Verizon’s business towards its mobile and content platforms. (5:42)

LTE-Unlicensed: How the Wireless Industry Plans to Conquer Your (and the Cable Industry’s) Home Wi-Fi Hotspot

special reportWith billions of dollars in new revenue and royalties to be made, Qualcomm and some members of the wireless industry are pushing regulators to quickly approve a new version of LTE wireless technology that will share many of the same frequencies used by home and business Wi-Fi networks, creating the potential for speed-killing interference.

Wireless operators believe LTE-Unlicensed (LTE-U) could be used to offload much of the growing wireless data traffic off traditional 4G LTE wireless data networks. With the cost of securing more wireless spectrum from regulators growing, LTE-U technology would allow operators like AT&T, Verizon, Sprint and T-Mobile to use the U-NII-1 (5150-5250MHz) and U-NII-3 (5725-5850MHz) unlicensed bands currently used for Wi-Fi to deliver high-speed wireless broadband traffic to their customers.

Qualcomm and Ericsson, behind the newest iteration of LTE, have a vested interest promoting it as the ideal choice for metrocell, indoor enterprise, and residential small cell applications. Every manufacturer incorporating LTE-U technology into everything from carrier-owned microcells to smartphones will owe royalty payments to both companies. With billions at stake, Qualcomm is doing everything possible to tamp down fears LTE-U signals will create harmful interference to Wi-Fi signals.

qualcomm lte-u

http://www.phillipdampier.com/video/CES2015 Qualcomm Demonstrates LTE-U 1-2015.mp4

At the Consumer Electronics Show in Las Vegas held in January, a Qualcomm representative went as far as suggesting LTE-U will improve home Wi-Fi service. (5:42)

RCRWireless News:

[Qualcomm] set up a screened room with eight pairs of access points occupying the same channel and added Wi-Fi access-point terminals in one room and LTE-U terminals in another. The results show the average throughput of 3.3Mbps with Wi-Fi alone more than doubled to 6.7Mbps when the LTE-U access point was introduced.

In another test to show that LTE-U is a better neighbor to Wi-Fi than Wi-Fi itself, they took eight Wi-Fi nodes and replaced four of them with LTE-U nodes, the result of which showed a 1.9Mbps increase in average Wi-Fi throughput. In almost every test, the LTE-U enhanced network outperformed traditional Wi-Fi.

Burstein

Burstein

Industry observer Dave Burstein is concerned advocates of LTE-U are trying to rush approval of the technology without verifying Qualcomm’s non-interference claims.

“The telcos are considering 40 and 80MHz channels that could easily swallow half of more of the Wi-Fi spectrum,” Burstein writes in response to an EE Times article about the technology. “If Wi-Fi is important, that’s a mistake to allow. Advocates are trying to rush it through even though there is not a single independent test or field trial.”

Qualcomm dismisses the interference complaints pointing to its own research showing the two standards can co-exist adequately. But multi-billion dollar wireless companies with nationwide Wi-Fi networks at stake are far less confident. In fact, LTE-U has already divided the two largest wireless carriers in the United States. Verizon Wireless is an original proponent of LTE-U while AT&T has expressed “concern,” a polite way of saying it isn’t happy. What separates AT&T and Verizon Wireless? AT&T has invested in a nationwide network of more than 34,000 Wi-Fi hotspots. Verizon offers just over 5,000, most for FiOS customers or those in especially high traffic venues.

A Stanford University professor with no ties to Qualcomm or the wireless industry privately shared his belief allowing 5GHz Wi-Fi signals to commingle with LTE-U is going to cause problems.

lte-u-unlicensed-spectrum-v3The development of “Wild West” Wi-Fi has always tracked differently than the licensed cellular/wireless business. Over more than a decade, evolving Wi-Fi standards have come to expect interference from other nearby Wi-Fi signals. In a densely packed city, more than two dozen Wi-Fi signals can easily be found all competing for their own space across the old 2.4GHz and newer 5GHz unlicensed bands.

Wi-Fi proponents credit its robustness to its “politeness protocol.” Before a wireless router or home hotspot fires up its Wi-Fi signal, it performs several tests to check for other users and constantly adjusts performance by backing off when it discovers interference from other signals. That is why a user can receive strong Wi-Fi signals but still endure reduced performance, as the hotspot accommodates nearby hotspots and other traffic.

It works reasonably well, according to Rupert Baines, a consultant at Real Wireless.

“But [Wi-Fi signals] are delicate, and they rely on implicit assumptions that there aren’t other things there (or aren’t too many),” Baines told EE Times. “In effect, they behave as though the unlicensed band were not technology neutral but were Wi-Fi only.”

The intrusion of LTE-U changes everything.

http://www.phillipdampier.com/video/Wireless Week Tuesdays with Roger LTE-Us Gain is Wi-Fis Loss 3-24-15.flv

On the March 24, 2015 episode of Tuesdays with Roger, Recon Analytics’ founder Roger Entner talks with Wireless Week about the questions raised as major carriers, including T-Mobile and Verizon Wireless, plan to launch LTE into unlicensed territory. Concerns abound, particularly for consumers and companies who rely on Wi-Fi and don’t want licensed use in unlicensed bands to interrupt that service. (7:31)

Change in and of itself is not necessarily a bad thing, especially if LTE-U is superior to Wi-Fi, and some proponents suggest it is. Jag Bolaria, an analyst at The Linley Group, argues LTE better manages data/call handoff better than Wi-Fi access points can. LTE is also a more efficient spectrum user than Wi-Fi.

Last week, South Korea’s LG U+ demonstrated LTE-U was capable of 600Mbps speed, eight times faster than traditional LTE. But to accomplish that level of speed, LG U+ had to occupy 60MHz of bandwidth in the 5.8GHz band and allocate an extra 20MHz from its traditional LTE service. The company plans to further expand its use of South Korea’s 5.8GHz unlicensed band by occupying 80MHz of it to further boost speeds to 750Mbps. But the company did not say how the tests affected others sharing the same frequencies.

If LTE-U is superior, then why not gradually move every user towards the technology and away from Wi-Fi?

Aptilo Networks AB CEO Torbjorn Ward answers LTE-U is a solution in search of a problem.

“I think LTE on unlicensed sounds like a good idea if it wasn’t for the fact that there are four billion devices on Wi-Fi out there,” he told Light Reading, noting that 802.11ac can already run at 100Mbps, so there’s little need for the LTE boost. “I think when it comes to unlicensed, you can do a longer range with LTE, but I don’t see the full benefit.”

That does not seem to matter to LTE-U’s developers or cell phone companies that lack robust Wi-Fi networks of their own.

as-is

In the original Qualcomm/Ericsson proposal, both companies promote the fact they could launch LTE-U in the unlicensed Wi-Fi bands “as-is.” That is a big problem for AT&T and other Wi-Fi users because LTE-U evidently employs few, if any protection protocols in its initial specifications for other traffic. Verizon Wireless is reportedly lobbying against the development of interference protection protocols and has publicly asserted its interest in deploying LTE-U regardless of other users.

“In [the] USA, there are no requirements for unlicensed deployment that require changes to LTE air interface,” Verizon stated in its proposal: “New Band for LTE deployment as Supplemental Downlink in unlicensed 5.8GHz in USA.”

LTE-Unlicensed has been characterized as "rude" for not avoiding interference to other users.

LTE-Unlicensed has been characterized as “rude” for not avoiding interference to other users.

Clint W. Brown, business development director of mobility wireless connectivity at Broadcom, and a vice-chairman of the Wi-Fi Alliance counters it is premature to approve LTE-U in the unlicensed Wi-Fi band without more testing and information about its interference protocols.

“We’ve heard about the tests they’ve done, but it’s not factual,” Brown told EE Times. We haven’t seen the data and we don’t know how the tests were set up. First, I’d like to see if [LTE-U] can detect low-level signals. Second, I want to make sure it features a ‘Listen before Talk’ decision process so that LTE-U will wait for an opening rather than barging into the conversation already taking place in the unlicensed spectrum. Third, there should be a back-off mechanism, when it sees a collision. “We aren’t aware of any publicly available documents explicitly stating those attributes.”

The Federal Communications Commission has also now taken an interest and issued a public notice asking stakeholders and consumers to share their thoughts on LTE-U and a companion technology known as Licensed Assisted Access (LAA) that would hand off data sessions between a wireless carrier’s traditional 4G LTE network and LTE-U.

The makes the discussion political as well as technical. The FCC traditionally permits industry groups to define standards, but Republican Commissioner Mike O’Rielly now worries the FCC might butt into that process.

“The decision to jump into this space rather casually causes me great concern,” O’Rielly said. “In particular, any step that could insert the commission into the standards work for LTE-U comes with great risk. I will be vigilant in ensuring that the commission’s involvement does not result in taking sides with various stakeholders, hindering technological innovation, or having any say about what technologies should or should not be deployed.”

monopolyFor the moment, O’Rielly’s concerns about the FCC are premature as long as a division exists over LTE-U among many of the industry players:

  • Companies FOR LTE-U: Verizon, China Mobile, Qualcomm, Ericsson, NTT DoCoMo, T-Mobile USA, Deutsche Telekom, TeliaSonera, and China Unicom.  Equipment manufacturers also in support: Nokia, NSN, Alcatel-Lucent, LG, Huawei, ZTE, Hitachi, Panasonic, and others;
  • Companies AGAINST LTE-U (as now defined): Orange, Telefónica, Vodafone, AT&T, Sprint, SouthernLINC, US Cellular, DISH and a handful of vendors.

Burstein also uncovered evidence the wireless industry may be stacking the deck against increased competition and consumers. He found 11 of the world’s largest wireless companies (including AT&T, T-Mobile, and Sprint) quietly colluding on a proposal that would block anyone other than currently licensed LTE users from being able to use LTE-U on a standalone basis. The opaquely-titled proposal, “Precluding standalone access of LTE on unlicensed carriers,” is at least frank about its reasoning: “Standalone deployment in unlicensed spectrum implies drastically different business models from nowadays and might impact the value chain.”

In other words, if consumers are able to get savings from LTE-U using a new generation of non-traditional providers like Republic Wireless or Cablevision’s Freewheel that do not depend primarily on cellular networks, it could cost those 11 traditional wireless companies billions in lost revenue. To stop that, the companies propose requiring a special LAA “guard signal” to stop standalone access of LTE-U. Since only licensed cell phone companies have access to those frequencies, it automatically locks out new upstarts that lack mobile spectrum of their own.

Sneaky insertions like that may be exactly why the Obama Administration’s FCC is being more activist about monitoring the wireless industry, potentially cutting off anti-competitive proposals before they can become adopted as part of a formal technical standard.

http://www.phillipdampier.com/video/Fairness to Wi-Fi and LTE unlicensed 5-8-2015.mp4

RCRWireless News gets deep into the development of LTE-Unlicensed and how it will impact cellular infrastructure, Wi-Fi and small cells. (25:39)

Western Mass. Voters Stampede for Fiber Optic Broadband in Communities Big Telecom Ignored

WiredWestLogoFeb2015Bypassed in favor of richer opportunities to the east, western Massachusetts residents are empowering their communities to deliver 21st century broadband the big cable and phone companies have neglected to offer.

One of the largest public co-op broadband networks ever attempted is racking up huge wins so far in referendums being held in 32 towns across the region. The vote is needed to secure financing for construction of the last mile of the network in each community, delivering fiber optic service to individual homes and businesses.

Last summer the Massachusetts legislature passed the IT Bond Bill, which included $50 million to support critical last mile network construction efforts in unserved parts of the Commonwealth. But the rest of the money has to come from residents of each unserved community. A two-thirds vote is needed in each town to finance these construction expenses and at least 40% of residents must pre-register for service and pay a refundable deposit of $49, which will be applied to their first month’s bill. So far, more than 4,000 households have done exactly that, showing good faith in a project that won’t begin delivering service for an estimated 2-3 years.

As votes take place across the region, the response has been remarkable, with the warrant article passing overwhelmingly. In one town, it was even unanimous.

The excitement in western Massachusetts rivals a Google Fiber announcement. Reports indicate broadband-supporting crowds well exceeded the capacity of meeting rooms. In Cummington, the overflow left people in the hallways. In Plainfield, they gave up on their designated meeting room and moved everyone to the church across the street. In Shutesbury, even the gym and overflow areas weren’t enough. Some residents ended up on the preschool playground looking for an open spot. Nine communities for better broadband, zero opposed, with many more to go.

In small communities, signing up 40% of residents in advance can be a challenge. In Washington, it was achieved only hours before the approval meeting. In Middlefield, an additional 100 households are needed as that community is only at 14% of their signup goal. Montgomery needs 85 more backers as they sit at 39% of goal, and in Peru — 111 at 33% to goal.

For broadband in western Massachusetts, the vote is nothing less than a referendum on moving forward or getting left behind indefinitely.

ww-2015-1

Wired West’s co-op of communities in western Massachusetts.

But as is the case with every public broadband project we know, there are detractors who don’t like any form of government running anything. Others are frightened because of inflated scare stories about a project’s cost, often spread by interest groups funded by the same big cable and phone companies that are not now providing adequate service and don’t want the competition. Some others mean well, but are underinformed about the realities of delivering broadband in rural communities, always believing a better answer lies elsewhere and is just around the corner. Unfortunately, it always seems to be just out of reach.

Hussain Hamdan of Hawley, has launched a one-man war on public broadband, actively seeking signatures on a petition to pull his community of 347 out of the project, claiming it is too costly. Hamdan argues wireless broadband is a more suitable solution for the town. His petition, signed by at least 36 residents, wants no part of the WiredWest initiative, but he’d go further. Hamdan proposes to outlaw municipal utility services altogether, forbid selectmen or other town boards from appropriating a single penny for any WiredWest project, prohibit spending on postage for any mailings discussing public broadband, and even making sure town officials attending a function on municipal broadband are not reimbursed for their mileage expenses. Coincidentally, another Hamdan petition seeks the right to recall elected officials, ensuring any ousted politician cannot be re-elected to office for at least three years. (Hamdan denies his recall election proposal targets any town official specifically.)

Despite all this, Hamdan claims he is for bringing high-speed Internet access to town, just not through WiredWest. Unfortunately for the 300+ other residents of Hawley that did not sign the petition, Hamdan’s enthusiasm for alternative service has not been matched by a single interested provider seeking to fill Hawley’s broadband chasm.

Because Mr. Hamdan didn’t do his homework, we have, and here are the “alternatives” Hawley residents can actually consider:

Convincing Time Warner Cable to Come to Town

cable3Assuming Time Warner Cable was somehow persuaded to offer service, as they already do in parts of western Massachusetts, they will expect considerable compensation to extend their cable network to a community that fails to meet their Return on Investment requirements. It will be an uphill battle. Next door in upstate New York, Time Warner Cable needed $5.3 million in taxpayer incentives just to expand service to, at most, 5,320 homes or businesses around the state that were already close to existing Time Warner service areas, but had no access to cable before. Conclusion: Time Warner Cable already serves the areas they feel comfortable serving.

Mark Williams, who lives in Lee – Berkshire County, wanted Time Warner Cable service at his home. Lee has franchised Time Warner Cable to provide service throughout the community, so Williams didn’t think twice about ordering service. When the company arrived, it found his driveway was 100 feet too long.

Time Warner has a formula that determines who will pay to install necessary infrastructure. If a certain number of properties are located within a specific radius, they cover the costs. If a community isn’t presently served, if residents live too far apart, or have an unusual property, Time Warner expects the town or resident to cover part of their costs. In Williams’ case, $12,000 was initially quoted to wire his home back in 2010. Because Time Warner had already committed to provide service in the area, the bad publicity that resulted from that installation fee forced Time Warner to back down. But in unserved communities, the costs spiral even higher. Residents on the fringe of a cable coverage area are routinely quoted, $15,000, $20,000, even $35,000 just to get a cable line extended to a single home from a nearby street. We’re not sure how far away Hawley is from the nearest Time Warner Cable service area, but it is a safe bet the company would need enormous taxpayer-funded incentives from local residents to extend universal cable service in the community.

If both Time Warner and WiredWest were providing service side-by-side in Hawley today, residents would pay Time Warner Cable $911/yr for 20Mbps Turbo Internet broadband, including the $8/mo modem lease fee or $588/yr to WiredWest for 25Mbps broadband. WiredWest would save residents $323 a year — and help pay off its infrastructure costs while keeping the money in the community.

Assuming Time Warner Cable is never going to be an option, which we think is likely, the wireless alternatives suggested by Hamdan largely do not exist at this time, are unfeasible, or no longer meet the FCC’s minimum definition of broadband.

White Space Broadband: Can It Work in Western Mass.?

First, let’s consider “white space” broadband – high-speed wireless Internet access delivered over unused TV channels. At the moment, this service is still in the experimental stages in most areas, but as Stop the Cap! previously reported, it has promise for rural communities. Unfortunately, despite Hawley’s small size and rural location, the current database of available free channels to offer white space Internet access in the area is discouraging, based on the address of the community’s town office on Pudding Hollow Drive. There are just six open channels because of an abundance of TV signals in Connecticut, Vermont, Massachusetts, and New York that get precedence. Of these six, there are just four optimal choices – UHF channels 14-17. In our previous story highlighting Thurman, N.Y.’s white space project, there are 17 open channels in that area, none on VHF or reserved for radio astronomy. Feel free to use the database to see how many open channels are available in your local area.

Not much room at the Inn.

Not much room at the inn. White space broadband will be a challenge in signal-dense northeastern states.

But the news may be even worse. The FCC is currently preparing to “repack” the UHF dial around the country by consolidating existing stations on a smaller number of channels. The freed up bandwidth will be auctioned off to cell phone companies to boost their networks. This month, we learned the wireless industry’s largest lobbying group is pushing hard to force other users to vacate “their” spectrum the moment they begin testing on those frequencies. Interference concerns and the dense number of TV signals already operating in the northeastern U.S. means it is very likely communities like Hawley will have even less opportunity to explore white space broadband as an option.

What About Wireless ISPs?

Second, there are traditional Wireless ISPs (WISPs) which do a reasonably good job reaching very sparsely populated areas, as long as customers are willing to sacrifice speed and pay higher costs.

BlazeWIFI advertises service in the rural community of Warwick, Mass (zip code: 01378). But it is anything but a bargain. The least expensive plan is $99.99 a month and that offers the dismally slow speed of 1.5Mbps for downloading and only 512kbps for uploading. It also includes a data cap of 25GB a month. That is slowband and a last resort. It’s more expensive, it’s slower, and it is usage-capped.

Some WISPs offer faster service, but few are equipped to handle the FCC’s definition of 25Mbps as the minimum speed to qualify as broadband. In short, this technology may eventually be replaced by white space broadband where speeds and capacity are higher, as long as suitable unused channel space exists.

wireless neverlandWhat About Wireless Home Internet Plans from AT&T, Verizon Wireless?

Third, there are wireless broadband solutions from the cell phone providers. Only Hawley residents can decide for themselves whether AT&T and Verizon Wireless deliver robust reception inside the community. If they do, both companies offer wireless home Internet service.

The base charge for AT&T’s plan is $20 for unlimited nationwide phone calling + $60/mo for a 10GB Wireless Home Internet Plan. There is a 2-yr contract and a $150 early termination fee. Since the average household now uses between 15-50GB of Internet service per month (lower end for retired couples, 35GB median usage for AT&T DSL customers, but even more for young or large families), you have to upgrade the plan right from the start. A more suitable 20GB plan is $90/month. A 30GB plan runs $120 a month. The overlimit fee is $10/GB if you run over your plan’s limit. You will also be billed “taxes & federal & state universal service charges, Reg. Cost Recovery Charge (up to $1.25), gross receipts surcharge, Admin. Fee & other gov’t assessments which are not gov’t req’d charges.” Verizon’s plan is similar.

You must have robust cell coverage for this service to work and be ready for speeds of 5-20Mbps, getting slower as more customers join a cell tower. The lowest rate available runs about $90 a month after taxes and fees are calculated and you need to switch it off when you approach 10GB of usage to avoid additional fees.

What is the Best Option?

No broadband? No sale.

No broadband? No sale.

As we have seen across the United States, communities offered the possibility of fiber optic Internet are embracing it, some even begging for the technology. There is simply no better future-proof, high-capacity broadband technology available. But installing it has been costly – a fact every provider has dealt with. Most rural providers treat fiber optic technology as an investment in the future because it has very low maintenance costs, is infinitely upgradable, and can offer a foundation on which current and future high-bandwidth online projects can expand.

The fact is, western Massachusetts has been left behind by Comcast and Time Warner Cable, as well as Verizon. Nobody in the private sector is coming to the rescue. Verizon has stopped expanding its FiOS fiber network and all signs point to its growing interest in exiting the landline and wired broadband business altogether in favor of its higher profit Verizon Wireless. Cable operators strictly adhere to a Return on Investment formula and will not expand service areas without major taxpayer support.

In communities in more conservative states like Tennessee and North Carolina, the obvious choice was for local governments and municipal power companies to provide the service other providers won’t. Despite the industry funded scare stories, projects like EPB Fiber in Chattanooga and GreenLight in Wilson, N.C., are doing just fine and attract new businesses and jobs into both regions. They offer far superior service to what the local cable and phone company offer in those areas.

It is unfortunate rural residents have to effectively pay more to get a service urban areas already have, but to go without would be disastrous for school-age children, local entrepreneurs, agribusiness workers, and tele-medicine.

Mr. Hamdan argues Hawley cannot afford WiredWest. But if one looks deeper at the alternatives, it becomes clear Hawley can’t afford not to be a part of a service that is likely to be ubiquitous across the region. Even those not interested in the Internet can ask any realtor how important Internet access is to a homebuyer that considers inadequate broadband a deal-breaker. That could cost much more than the $350/yr Mr. Hamdan theoretically suggests WiredWest will cost Hawley.

Mr. Hamdan offers no real answers for his community about alternatives that are available, affordable, and capable of providing the kind of service WiredWest is proposing. Voters should carefully consider the economic impact of leaving their community in a broadband backwater as the rest of the region advances towards fiber optic broadband. That is the cost that is too high to pay.

http://www.phillipdampier.com/video/Wired West Western Mass broadband woes 1-15.mp4

Wired West project coordinators didn’t have to go far to hear broadband horror stories in western Massachusetts, which has some of the worst Internet access in the world. (17:51)

Cablevision to Loyal Customers: Thanks for Paying Higher Prices for Cable Service When You Didn’t Have To

take the moneyIf you are a long time Optimum customer, the CEO, management, and shareholders of Cablevision would like to thank you for driving average monthly cable revenue per customer 4.8% higher from a year ago to $155.34 a month.

A few years ago, Cablevision developed a Stalinist approach to repeat customer promotions and retentions: nyet.

Despite mounting competition from Verizon FiOS, AT&T U-verse, Comcast and Time Warner Cable, Cablevision has held the line on repeatedly discounting its service for customers who complain their rates are too high.

“Our disciplined approach to pricing, promotional eligibility and customer credit policies has not wavered,” Kristin Dolan, chief operating officer, told investors on a morning conference call.

As a result, the average customer staying with Cablevision paid almost five percent more for service than they did a year earlier — more than $155 a month.

optimum“The main drivers of our increased revenue per customer came from a combination of rate increases, but also lower proportion of subscribers on promotion,” said Brian G. Sweeney, chief financial officer. “We had a number of fixed rate increases January 1 of this year related to cable box fees, an increase in our sports and broadcast TV surcharge, as well as the pass-through of PEG fees to certain customers.”

Cablevision elected to stop competing on price in 2013, telling customers they are entitled to one customer retention deal and that is all. As a result, Cablevision has been losing customers even as it gains revenue. Although it managed to pick up 7,000 net new broadband customers during the quarter, Cablevison lost 6,000 customer relationships, 28,000 video customers — double the number from a year ago, and 14,000 voice customers. That represents 11 consecutive quarters of video subscriber losses.

The customers that remain are meeting Cablevision’s earnings expectations as others leave for better deals elsewhere.

Kristin and James Dolan

Kristin and James Dolan

Cablevision admits many of its subscriber losses come from customers willing to shop around for a better deal. They usually find one. Although Verizon has tightened customer retention deals itself in response to Cablevision’s retention policies, Frontier U-verse in Connecticut continues to compete for new business on price, at least initially as part of new customer promotions.

Kristen Dolan argues Cablevision’s quality of service keeps customers loyal and brings many ex-customers back.

“We do a significant amount of [customer] win-backs every year and we really focus on why people are coming back and it’s not just about price,” Dolan said.

But some customers believe it is more about the price than Cablevision might think.

“The only reason I left Cablevision was because they wouldn’t negotiate and match a better deal Verizon offered me,” said Rob Hastings of Syosset, N.Y., who canceled service in 2013. “When Cablevision wouldn’t cut their price I left.”

Many of the customers coming back to Cablevision this year are, in fact, their old customers dealing with a rate reset from Verizon as promotions expire.

“When my Verizon FiOS rate shot up, I went back to Cablevision as a ‘new customer’ on a promotion,” said Hastings. “When that expires, I’ll bounce back to Verizon. Whoever gives me the best price gets my business as I am sure not going to pay extra to stay a loyal customer.”

cablevision service areaTo further combat promotion-bouncing, Cablevision is embracing its broadband product line and marketing new cord-cutting packages to customers that offer reduced-size cable television packages and free over the air antennas for local stations. The cable company also recently announced it would offer cable customers Hulu subscriptions. Jim Dolan, Cablevision CEO, believes broadband is where the money is and customers are willing to pay higher prices to get Internet access even when video package pricing has its limits.

“You’re seeing the video product begin to lose margin and not just among the little operators like us, but even some of the big operators,” said Dolan. “Our philosophy is we think of video as akin to the eggs and the milk in a convenience store. You have to have it, but you don’t make a lot of money on it. Now connectivity is a whole other basket. It’s more like the soda and chips aisle, and if you provide great connectivity, because it provides great value to the consumer, you can differentiate yourself and you can charge more and the margins are good on it.”

Dolan doesn’t think much of his competitor’s slimmed down cable packages either.

“Verizon’s known to embellish [and] use misleading messaging in their marketing to get the phones to ring,” said Dolan. “I think that’s partially how we view these packages. I can tell you that the packages that we’re offering provide a lot more flexibility.”

To further differentiate it from its competitors, Cablevision continues to emphasize its Wi-Fi network of hotspots across metro New York City. The company also recently became the first major U.S. cable operator to launch a mobile phone service that uses its network of Wi-Fi hot spots. Although not willing to divulge customer numbers, Kristin Dolan did say unique weekly visits increased 16% on average to Cablevision’s website, presumably to explore the Freewheel Wi-Fi calling product.

Cablevision’s highlights for the first three months of 2015:

  • Fiber to the Press Release: Cablevision was the first cable company to introduce 1-gigabyte residential service in the tri-state area. The service launched to a single new multi-tenant building in Weehawken, N.J. No further expansion is planned at this time;
  • Discounted Internet for the Cord Cutter on a Budget: Cablevision expanded the availability of $34.90/mo Internet Basics (5/1Mbps) across its entire service area. It includes an over-the-air antenna.
  • Third Party Set-Top Boxes: Cablevision is interested in providing a less expensive, open standard, set-top box platform in the future to customers that don’t want to pay for a large cable box.

Comcast’s David Cohen Survives Night of the Long Knives Blame Game for Comcast Merger Failure

David "I'm crushing your head" Cohen

David “I’m crushing your head” Cohen

Your boss authorized $32 million on lobbying for a $45 billion dollar merger deal that just went down in flames on your watch and you were the guy the company depended on to push it through. What do you do?

If you are Comcast vice president David Cohen, you pray for a press release signed by the CEO reaffirming trust in you.

Cohen can breathe a little easier because Brian Roberts, CEO of Comcast, did exactly that.

“There is nobody better than David Cohen,” Roberts wrote. “He’s incredible at what he does and we are beyond lucky that he helps passionately lead so many areas at Comcast. He is also a huge supporter of Philadelphia and has done so much for the community. I’m extremely proud to have him on our team.”

It could have been much worse for Cohen, whose contract (and $15 million annual salary) is up at the end of this year. He’s the fourth biggest earner at Comcast, but his stunning arrogance before Congress and the public may have helped nail the coffin shut on a merger worth tens of billions.

Some media outlets have called Cohen myopic, unable to see the building torrent of opposition from consumers, public interest groups, and even regulators.

The NY Post:

“They just lost a big battle. Does the company need a new general to supervise the Washington political strategy?” asked one source.

Comcast is already on the hunt for a new chief financial officer, with Michael Angelakis walking away to begin his own Comcast-backed private-equity fund before the deal imploded.

comcast twcComcast’s claims of “deal benefits” for consumers was perceived to be tissue-thin by legislators like Rep. Tony Cárdenas (D-Calif.), whose district would have seen Time Warner and Charter customers absorbed into the Comcast Dominion.

“[Cohen] was smothering us with attention but he was not answering our questions,” Cárdenas told The New York Times, adding in the early stages of the deal he was open to supporting it if his questions were addressed satisfactorily. “And I could not help but think that this is a $140 billion company with 130 lobbyists — and they are using all of that to the best of their ability to get us to go along.”

Comcast’s swaggering arrogance, condescending editorials, and dismissive attitude towards consumers questioning the deal rubbed a lot of lawmakers the wrong way.

Not only did Comcast offend lawmakers, but their all-important staffers as well. Staffers told the newspaper they felt Comcast was so convinced in the early stages that the deal would be approved that it was dismissing concerns about the transaction, or simply taking the conversation in a different direction when asked about them.

Elected officials associating themselves with Comcast, whose customer service on a good day is considered miserable, was also considered political poison. Few lawmakers were willing to publicly support foisting Comcast on their constituents. Local lawmakers in Time Warner Cable service areas who had no direct experience with Comcast customer service’s special touch of hell often did offer support, especially when a handsome check was sent weeks earlier. But voters with relatives or friends who loathed Comcast (practically everyone in America) were never fooled.

hurricane comcast“They talked a lot about the benefits, and how much they were going to invest in Time Warner Cable and improve the service it provided,” said one senior Senate staff aide, who spoke on the condition of anonymity because he was not authorized to speak publicly. “But every time you talked about industry consolidation and the incentive they would have to leverage their market power to hurt competition, they gave us unsatisfactory answers.”

Politicians asked to publicly support the deal characterized their sentiment as “leery” in polite company.

Rep. Maxine Waters (D-Calif.) was unwilling to victimize her constituents by replacing two bad cable companies – Time Warner Cable and Charter with one horrible alternative – Comcast.

“No amount of public-interest commitments to diversity would remedy the consumer harm a merged Comcast-Time Warner would have caused to millions of Americans across the country,” Ms. Waters said.

Other lawmakers who already understood Comcast as the Hurricane Katrina of cable companies got into storm shelters early.

“There are limits as to how effective even the best advocate can be with a losing case,” said Senator Richard Blumenthal, Democrat of Connecticut, who was critical of the deal from the start, “as this merger would have further enhanced this company’s incentive, its means and its history of abuse of market power.”

Comcast even cynically attempted to color and race match lobbyists with legislators, believing the shared ethnic heritage would be an added incentive.

The New York Times:

Comcast, for example, assigned Juan Otero, a former Department of Homeland Security official who serves on the board of the Congressional Hispanic Caucus Institute and now works as a Comcast lobbyist, to be the point person to work with Mr. Cárdenas.

Meanwhile, Jennifer Stewart, an African-American lobbyist on the Congressional Black Caucus Institute board, was assigned to work with Marc Veasey, Democrat of Texas, who is also black. She personally appealed to Mr. Veasey’s staff, urging that he not sign a letter last August questioning the deal, according to an email obtained by The New York Times, citing the company’s work on behalf of the minority community. (Mr. Veasey still signed a related letter.)

Comcast also asked Jordan Goldstein, a former official at the Federal Communications Commission who is now a Comcast regulatory affairs executive, to work with Mr. Blumenthal’s office. Mr. Goldstein had previously developed a working relationship with Joel Kelsey, a legislative assistant in charge of reviewing the matter for the senator, who is a member of the Senate Commerce Committee.

American Broadband Ripoff: Compare Your Prices With Eight Competing Providers in Bratislava, Slovakia

bratislvaThe largest telecom companies in the United States, their trade associations, and Ajit Pai, one of two Republican commissioners serving at the Federal Communications Commission routinely claim America has the best broadband in the world. From the perspective of providers running to their respective banks to deposit your monthly payment, they might be right. But on virtually every other metric, the United States has some of the most expensive broadband in the world at speeds that would be a gouging embarrassment in other countries.

Slovakia – A Long, Tough History, But Better Broadband than the United States

Bratislava, the capital city of Slovakia, has existed since the year 907. From the 10th century until just after the end of World War 1, the city (then commonly known by its German name of Pressburg) was part of Hungary and the Austro-Hungarian empire. After the “War to End All Wars,” ethnic Czechs and Slovaks jointly formed a democratic Czechoslovak Republic in 1918 which existed peacefully until the Germans arrived in 1938 and renamed part of Czechoslovakia… Germany.

Unfortunately for the Czechs and Slovaks, life didn’t get much easier after the end of World War II. As Stalin sought to create a buffer zone between Germany (and western Europe) and the Soviet Union, Czechoslovakia, along with most of Eastern Europe, faded behind the Iron Curtain into the Soviet sphere of influence.

The city center of Bratislava

The city center of Bratislava

After decades of deterioration under autocratic rule, the Czechoslovak Velvet Revolution of 1989 restored multi-party democracy and Communism was was on its way to being fully extirpated across Europe.

By the time the June 1992 election results were announced, it was clear the country’s constituent Czechs and Slovaks had irreconcilable differences and were headed to national divorce court. On one side, the Czech-oriented Civic Democratic Party, headed by Václav Klaus. On the other, Vladimír Mečiar’s Movement for a Democratic Slovakia, whose aims were obvious based on its party name alone. With the writing on the wall, Klaus and Mečiar managed to work out an agreement on how to divide the country and on Jan. 1, 1993 the Czech Republic and the Slovak Republic were born.

Since the separation, Slovakia has prospered, and is now recognized to have a high-income advanced economy with one of the fastest growth rates in both the European Union and the OECD. It joined the EU in 2004 and adopted the Euro as its currency in 2009. Slovakia had to bring its economy up to date after fifty years of Communism. The country had a functioning telecommunications infrastructure, albeit one highly dependent on dilapidated equipment produced in the German Democratic Republic (the former East Germany) and the Soviet Union.

After the Slovak Republic was born, Slovenské Telekomunikácie maintained a monopoly on Slovak telephone lines and telex circuits under the close watch of the Ministry of Transport, Posts and Telecommunications. It took until the year 2000 for economic reforms to allow for the privatization of telecommunications. As was the case in many other central and eastern European countries, Germany’s Deutsche Telekom (T-Mobile) won a majority ownership in the company, which is today still known as Slovak Telecom.

The Slovak Broadband Marketplace Today

Slovak-TelekomThe Slovak government insisted that telecommunications networks in the country be competitive and it maintains oversight to make sure monopolies do not develop. It rejected claims that total deregulation and competition alone would spur investment. Slovakia welcomes outside investment, but also makes certain monopoly pricing power cannot develop. As a result, most residents of Bratislava have a choice of up to eight different broadband providers — a mix of cable, telephone, wireless, and satellite providers that all fiercely compete in the consumer and business markets.

Many providers are foreign-owned entities. UPC, Slovakia’s cable operator, is owned by John Malone’s Liberty Global. Slovak Telecom is owned by Germany’s T-Mobile/Deutsche Telekom. Tooway is a French company.

300Prices are considerably lower than what American providers charge, although speeds remain somewhat lower than broadband services in Bulgaria, Romania, and the Baltic States. At one address on Kláštorská, a street of modest single family homes (some in disrepair), these companies were ready to install service:

  • RadioLAN offers 18/1.5Mbps unlimited wireless service for $21.85 a month;
  • UPC offers 300/20Mbps unlimited cable broadband for $30.63 a month;
  • Slovanet offers 10/1Mbps DSL with a 240GB usage cap for $18.56 a month;
  • Swan offers 10.2Mbps/512kbps unlimited DSL for $24.70 a month;
  • Slovak Telecom offers 10/1Mbps DSL with a 240GB usage cap for $21.96 a month;
  • Benestra offers 10/1Mbps DSL with a 4GB per day usage cap for $24.24 a month;
  • Satro offers 9Mbps/768kbps unlimited wireless service for $29.32 a month;
  • Tooway offers 22/6Mbps satellite Internet with a 25GB usage cap for $54.79 a month.

In other parts of the country, two providers are installing competing fiber broadband services. Slovak Telecom is slowly discarding its old copper wire infrastructure in favor of fiber optics, and is already providing 300Mbps service to some residents to better compete with UPC Cable. Some areas can get straight fiber service, others get VDSL, an advanced form of DSL offering higher speeds than traditional DSL. Orange, a provider not available in the immediate area of our sampled home, has already installed its own fiber service to over 100,000 fiber customers and is growing.

In comparison, Comcast sells 105Mbps service in Nashville, Tenn. for $114.95/mo (not including modem fee) with a 300GB monthly usage cap. That is one-third the speed of UPC Cable at nearly four times the cost… if you stay within your allowance. Prices only get higher after that.

New Revelations About Comcast’s Role in Killing Hulu Sale Raise Doubts Regulators Can Trust Company

sun valleyDespite a firm commitment with the Justice Department not to be involved in the day-to-day management of Hulu as a condition of approving Comcast’s merger with NBC/Universal, new revelations suggest Comcast not only promoted the online video service to its partners as a nationwide streaming platform for the cable industry, it also convinced them not to sell the service to a Comcast competitor.

Two years ago, at the 2013 Allen & Co., conference held in the resort community of Sun Valley, Idaho, executives from Walt Disney/ABC, 21st Century Fox, and Comcast privately met to discuss the future of Hulu, the online video service. Hulu’s chief executive, Jason Kilar, had already made it clear he was preparing to leave the venture, possibly foreseeing a likely sale because of ongoing differences between two of Hulu’s three owners over the future direction of the service.

Rupert Murdoch’s FOX wanted Hulu to emphasize Hulu+, its subscription option. Disney/ABC believed Hulu worked best as a free, ad-supported service. Comcast was supposed to stay out of it, required by the Justice Department to be a perpetual silent partner after the cable company inherited a 32% stake in Hulu through its merger with NBC/Universal in 2011.

But a Wall Street Journal report late Tuesday suggested Comcast had far more involvement in critical Hulu business decisions than the Justice Department might have tolerated had it known. Earlier reports over the weekend suggested regulators were focusing on Comcast’s involvement in Hulu, concerned Comcast may have ignored a consent decree and interfered with the sale of Hulu to protect itself from increased competition.

At the time Comcast acquired NBC/Universal, the Justice Department was concerned the cable company would inherit NBC’s one-third interest in Hulu, a potential online video competitor that could eventually fuel cord-cutting. Comcast agreed to “relinquish any veto right or other right to influence, control, or participate in the governance or management of Hulu.” It also agreed to license Comcast/NBC-owned content to Comcast’s competitors on fair terms.

Despite Comcast’s commitment, people familiar with the matter told the Journal Comcast “felt hamstrung” by the conditions it agreed to in the consent decree. Although Comcast spokeswoman Sena Fitzmaurice insisted “Comcast has no role in making, evaluating or reconsidering any management decisions at Hulu,” Comcast executives in attendance at the Sun Valley meetup suggested Hulu was an important part of the cable industry’s future. The “silent partner” allegedly told Hulu’s fellow owners if they didn’t sell the venture, Comcast would make Hulu the nationwide streaming video platform for the industry’s “TV Everywhere” project, turning it into a potential major rival of Netflix.

Comcast acquired a 32% ownership interest in Hulu after buying NBC/Universal.

Comcast acquired a 32% ownership interest in Hulu after buying NBC/Universal.

According to sources who had knowledge of the matter, Comcast’s proposal, which would enlarge Hulu significantly almost overnight, influenced Disney and Fox to cancel the sale by the end of the week-long conference. At that point, two of the biggest bidders to acquire Hulu were Comcast rivals DirecTV and AT&T, both seeking to develop online video platforms that could compete with Comcast.

As news spread the Hulu sale was off, a piece in GigaOm made it clear Comcast came away the biggest winner, keeping a potential competing online cable TV video platform at bay:

Buying Hulu would have been more than just a TV Everywhere play for AT&T and DirecTV. It could have been the first step towards an online-based pay-TV subscription, with a solid consumer base, name recognition and proven technology.

Now none of this is going to happen — and Comcast couldn’t be happier about that.

Ultimately, Comcast wasn’t much better fulfilling promises to its Hulu partners than it has managed for its customers. Despite promising to market Hulu to millions of Comcast cable subscribers and integrating the service into Comcast’s own systems, discussions surrounding a formal agreement between the two went nowhere, bogged down by a deal-killing Comcast demand that any viewer accessing Hulu be redirected through Comcast’s own video player and platform, which conveniently provided the cable company with Hulu customer data and gave free exposure to Comcast’s brand. That would make pitching Hulu as an alternative to Comcast next to impossible.

After the threat of a sale was a distant memory, Comcast seemed to lose interest in Hulu, refocusing on its expensive X1 set-top box and XFINITY-branded streaming apps.

To this day, Comcast’s X1 still does not offer subscribers a Hulu app.

Verizon Wireless to Customers Looking for a Better Deal: Goodbye and Good Luck With Competitors’ Inferior Service

Verizon Wireless: The Neiman Marcus of mobile providers

Verizon Wireless: The Neiman Marcus of mobile providers

A customer retention call with Verizon Wireless is short and to the point: enjoy the coverage you get from us now at the prices we charge or cancel and live with inferior cell phone service from one of our competitors.

Verizon chief financial officer Fran Shammo waved goodbye to 138,000 Verizon Wireless customers in the last three months and he could care less.

“If the customer who is just price-sensitive and does not care about the quality of the network—or is sufficient with just paying a lower price—that’s probably the customer we’re not going to be able to keep,” he said in the company’s quarterly earnings call today.

The wireless industry’s price war has not yet inflicted much damage on Verizon, which considers itself above the fray.

Average revenue per customer has started to significantly decline for the first time in wireless industry history, despite efforts to bolster earnings with expensive data plans and bundling services, including unlimited voice calling most cell phone users no longer care about. Both T-Mobile and Sprint are resorting to slashing prices and reducing the fine print to pick up business, with T-Mobile being the more successful of the two pulling it off. But the combined market share of Sprint and T-Mobile remains a fraction of what AT&T and Verizon Wireless have captured.

verizon greedVerizon believes it has a premium product and expects to be paid for it. Like a Neiman Marcus of the wireless industry, customers can expect a superior level of service, if they can afford to pay for it.

To keep customers dazzled, this summer Verizon Wireless is planning a new wireless video service featuring content from the NFL and likely more. Verizon hopes customers without unlimited data plans will be willing to pay several dollars extra for the new streaming service. But perhaps not too many extra dollars. Verizon executives have discovered a loophole in the FCC’s new Net Neutrality regulations allowing video content to be sponsored by Verizon or its advertising partners and exempt from usage allowances or caps.

Known as “zero-rating,” the practice is much more common overseas, where content providers pay for customer’s usage of their applications. Critics call the practice an end run around Net Neutrality. The FCC has continued to avoid the issue of broadband usage caps and usage-based billing, which ISPs have interpreted to mean a green light on the practice. In fact, some earlier comments from the FCC suggest the agency believes subsidized Internet traffic might be beneficial to consumers. Verizon pockets the money in either case.

Tim Berners-Lee, who created of the World Wide Web, called zero-rating “positive discrimination,” giving too much power to Internet providers.

“Zero-rated mobile traffic is blunt anti-competitive price discrimination designed to favor telcos’ own or their partners’ apps while placing competing apps at a disadvantage,” added Antonios Drossos, managing partner of Rewheel. “A zero-rated app is an offer consumers can’t refuse.”

Verizon Wireless has not yet priced its forthcoming video offering, but it could be marketed as a monthly add-on feature or as a pay-per-view option.

http://www.phillipdampier.com/video/Bloomberg Verizon Bids Good Riddance to Customers Leaving for a Cheaper Deal 4-21-15.flv

Bloomberg reporters talk about Verizon’s disinterest in competing with other carriers in the ongoing price war, and is fine with letting price-sensitive customers leave. It won’t be cutting prices anytime soon. (2:01)

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