Back in the days of dial-up Internet access, consumers could choose from a dozen or more independent providers selling service from prices ranging from free (for a limited number of hours per month) to $20-25 a month for unlimited dial-in access.  As long as an ISP maintained a local access number, they could set up shop and sell service at competitive prices in virtually any community in the country.

For awhile it seemed that this competition would continue as the days of broadband DSL arrived.  Phone companies like Qwest opened their network to third party competitors who could lease access to company facilities and lines and market their own DSL service.  In states like Minnesota, Qwest customers could choose from several providers, including Qwest itself, and receive service at competitive pricing.  But in 2005, the Federal Communications Commission announced phone companies no longer had to share their phone network with other providers.

It was the beginning of the end for independent service providers in that state and others.  The Minneapolis Star-Tribune reports that out of 47 independent ISPs that existed in the Twin Cities area alone in 2005, only about a dozen remain today — and many of those can count customers in the hundreds.  In fact, business has dwindled so badly, many providers no longer actively market DSL services to consumers.

The 2005 FCC policy allows phone companies to cut off the independents as network upgrades are completed. What service can be sold by independents in Minnesota is speed restricted as well — only up to 7Mbps. Even at those increasingly uncompetitive speeds, CenturyLink makes sure customers are notified they can no longer buy DSL service from independent companies once their upgrades are finished.

Today, the march forward for incrementally faster DSL broadband speeds at CenturyLink (which acquired Qwest), continues to force more and more competitors out of the broadband business.  Many of the remaining customers are located in rural or suburban exchanges only now seeing network upgrades.  But some companies are not waiting for the last of their customers to depart.  Implex.net saw the writing on the wall and decided to exit the business, telling the newspaper they could not compete with CenturyLink, much less Comcast.

“It was a dying business because we could only sell old technology,” said Stuart DeVaan, CEO of Implex.net in Minneapolis.

US Internet of Minnetonka also realized selling DSL was not going to be a growth business under current FCC rules.

“If you are a traditional Internet service provider from the mid-’90s that relies on someone else’s network, you’re at a serious disadvantage,” said Travis Carter, technology vice president at US Internet.

CenturyLink denies the FCC policy limits competition, pointing to cable operators, Wi-Fi, and wireless mobile broadband as all viable alternative choices for consumers.

But Bill Kalseim, who lives in rural Stillwater, having received notification he is about to be cut off from his ISP — ipHouse — thinks otherwise.

“I had a choice of DSL providers before, and now I don’t.” Kalseim told the newspaper.

Canadian cable, phone, and satellite providers have done a better job stymieing would-be “cord-cutters” than their counterparts further south in the United States.

The Canadian Radio-television and Telecommunications Commission’s (CRTC) annual report on the country’s telecom companies shows all of them remain exceptionally profitable, keeping pay TV customers far more effectively than American providers. Total revenues climbed from $12.5 billion to $13.5 billion in just one year, as price hikes, Internet Overcharging schemes like usage-based billing, and lack of competition continue to takes its toll on Canadian wallets.

The biggest winners were the biggest telecom companies in Canada — Rogers Communications, Bell Canada (BCE), and Shaw Communications, which all saw profits soar 8.2% to $11 billion.  Costs increased about 10.7% in 2011, fueled by network upgrades and rampant hikes in programming costs — an interesting state of affairs considering Rogers and Bell own or control a substantial number of the programmers demanding higher payments.  Most of those increases were passed on to customers in the form of rate hikes.

Although Canadians are increasingly interested in streaming online video, virtually every major Internet Service Provider in the country has effectively prevented customers from dropping cable television service in favor of broadband-only access.  They manage it with usage caps and usage billing on their broadband products.  With streamed video accounting for a substantial drain on customers’ monthly usage allowances, Canadians are unlikely to cancel cable TV in favor of watching all of their favorite shows online.

In fact, the number of Canadian households that subscribed to a cable company’s basic television service actually increased by 2.8% in 2011 to reach 8.5 million.  Experts say the country’s transition to digital over the air television may account for some of that increase, but a few high broadband bills with overlimit fees for “excessive Internet use” can effectively drive online video fans back to traditional cable TV as well.

Satellite television in Canada remained flat,  with a virtually unchanged 2.9 million Canadians relying on Bell and Shaw satellite service for television entertainment.

But everyone is paying more to watch.

In 2011, cable companies paid $2.1 billion in wholesale fees to the pay and specialty services they distribute, an increase of 10.2% over the $1.9 billion paid the previous year. The fees paid by satellite companies rose by 2.8% in one year, going from $894.4 million to $919 million.

That leaves vertically and horizontally-integrated conglomerates like Bell in the perfect position to extract higher programming payments.  Those costs are passed down to Canadian consumers and blamed on “greedy programmers,” despite the fact those programmers are owned in part or outright by Bell.

A Rogers retail rental store

Rogers is also well-suited to remain a part of the Canadian entertainment experience.  The company owns cable systems, wireless phone networks, programmers, and even home video stores. However Stop the Cap! reader Alex notes Rogers has been closing a number of those video stores over the past few months.

“This gives customers one less choice for renting movies, basically forcing them to use Rogers On Demand instead,” writes Alex.

Rogers On Demand comes with a higher price, too.  In-store rentals from Rogers are priced at 2 for $9 or 3 for $15.  A recent look at Rogers’ video on demand website, Rogers Anyplace TV, shows most movie titles priced at $4.99 each.  With Rogers closing 40 percent of their retail rental outlets, movie fans have had fewer competitive choices for movie rentals.

One potential new contender coming to Canada – kiosk video rentals.  Although services like Redbox are now commonplace in the States, they are virtually unknown in the north.  Jim Gormley, former owner of Jumbo Video is back with Planet DVD.  With just 2% of Canadians renting movies from kiosks, Gormley believes there is plenty of room to grow, especially as Rogers scales back its video rental business.

Planet DVD has a pilot project running with supermarket chain Sobeys to place kiosks in front of nine store locations.  The first kiosk was erected in early March in front of a Sobeys store in Mississauga, Ont.

A new release at a Planet DVD kiosk is priced at $3 for a one-day rental.  That’s less than what most video stores charge, but more than double what Americans pay at a Redbox kiosk.

Won 1.1 million new customers in 2011

Comcast and Time Warner Cable collectively picked up more than 1.5 million new customers in 2011, with most of the growth coming from dissatisfied DSL subscribers seeking better broadband speeds.

Leichtman Research Group, Inc. (LRG) found the eighteen largest cable and telephone providers in the US — representing about 93% of the market — acquired 3 million net additional high-speed Internet subscribers in 2011. Annual net broadband additions in 2011 were 88% of the total in 2010.

The top broadband providers now account for 78.6 million subscribers — with cable companies having over 44.3 million broadband subscribers, and telephone companies having over 34.3 million subscribers.

Stalled growth

Despite AT&T’s position as the second largest Internet Service Provider in the country, the company only picked up 117,000 new customers in 2011.  In contrast, Time Warner Cable, with 6 million fewer customers, added almost a half-million new broadband subscriptions last year.

Frontier Communications, which made broadband a primary target for expansion, has not seen considerable growth either.  The company only added just short of 38,000 new broadband customers last year, almost all getting DSL, often at speeds of 1-3Mbps.

Other key findings include:

• The top cable companies netted 75% of the broadband additions in 2011;
• The top cable companies added 2.3 million broadband subscribers in 2011 — 98% of the total net additions for the top cable companies in 2010;
• The top telephone providers added 750,000 broadband subs in 2011 — 68% of the total net additions for the top telephone companies in 2010;
• In the fourth quarter of 2011, cable and telephone providers added 765,000 broadband subscribers — with cable companies accounting for 82% of the broadband additions in the quarter.

Now serving 10.3 million

“Despite a high level of broadband penetration in the US, the top broadband providers added 88% as many subscribers in 2011 as in 2010,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “At the end of 2011, the top broadband providers in the US cumulatively had over 78.6 million subscribers, an increase of nearly 25 million over the past five years.”

Americans are increasingly treating broadband as an essential “utility” service, as fundamental as electricity or clean water.

The majority of consumers who lack the service either consider it irrelevant in their lives (a factor that increases with the age of the surveyed respondent), cannot obtain service from their provider because of their location, or cannot afford the service.

Sources: The Companies and Leichtman Research Group, Inc.
* LRG estimate
** Includes LRG estimates for Bright House Networks, and RCN
^ Totals prior to Time Warner Cable’s acquisition of Insight completed on 2/29/2012
^^ LRG estimate does not include wireless subscribers
Company subscriber counts may not represent solely residential households
Totals reflect pro forma results from system sales and acquisitions
Top cable and telephone companies represent approximately 93% of all subscribers

If you are customer of Charter Cable, chances are you are paying a lot more than $60 a month for a complete package of cable television with a DVR box and 30Mbps broadband, price locked for two years.  But Charter is selling precisely that package to customers in Monticello, Minn.  Why do they get a deal you can’t have?  Because your town probably doesn’t have a community-owned broadband provider delivering competition.

Charter’s website offers new customers a six-month cable/broadband promotion for $64.98 a month, but that does not include a DVR box and delivers half the speed Charter pitches to the chosen few in Monticello.  After six months, the deal ends. A package including what Charter sells in Monticello for $60 a month costs more than twice as much elsewhere — $145 a month for customers in Rochester and Duluth.

"For the BEST prices in town, you must call your 'In-Field' representative," the flyer declares, including the name and number of a local Charter representative.

The cable operator is keeping the two-year special offer quiet as much as possible with the use of door flyers hand-delivered to potential customers. If Charter’s five million customers nationwide find out, they may wonder why they are paying dramatically more for the exact same service.

The city of Monticello already knows why.  The local community decided the incumbent providers — TDS Telecom and Charter Communications — were not giving the city the attention it deserved, so it built its own 21st century fiber to the home system to bring faster broadband to the region.  Now the incumbent commercial operators appear to be stopping at nothing to put FiberNet Monticello out of business.  Charter’s pricing takes fat profits from customers in nearby Minnesota cities and appears to cross-subsidize the heavily discounted service on offer in Monticello.  While that delivers short-term savings to customers in Monticello, other Charter customers are helping cross-subsidize those low rates on their own high cable bills.

If you are a Charter Cable customer, why can’t you have the same deal residents in Monticello are getting?  Why not call Charter at 1-888-438-2427 and ask them?

Noted online petitioner Change.org will be promoting a petition to stop bandwidth capping this week.

Perhaps best known for hosting an appeal which influenced Bank of America to drop their proposed $5 monthly ATM card fee, Change.org will be presenting the ‘no data capping’ petition on various social media sites in an attempt to gain signatures.

The petition’s letter, directed to AT&T, Comcast, the Federal Communications Commission, and all Internet Service Providers (ISPs) who practice data capping, demands that they return to a billing model of unlimited access for a reasonable monthly fee.  Telecommunication providers have a responsibility to improve service, not lower it, the authors argue, particularly in light of the fact that taxpayer-funded broadband pipelines already exist, which the providers are not using.

Petition author David K. Smith argues that data caps contradict the Internet’s inherent purpose.  In the petition page’s linked article, “Why Data Caps Are Censorship,” he states that as the Internet is exponentially growing, one can always access more information than any data cap could allow, resulting in censorship from “the Big Picture.” The article maintains that exclusion from the total amount of information available results in “leashed” users having an incomplete perspective due to restricted access, and that incomplete, fragmentary information is useless.

“Now is a great time to be signing and sharing this petition,” said Smith.  “We have Change.org’s attention, and more and more articles are appearing to protest bandwidth injustices.  I feel this is a critical fight for our freedom to information.”

Change.org online help assets suggest that one of the most effective ways to gain signatures is for advocates to place a link to the petition under appropriate news and technical articles, along with a paragraph describing its relevance to the subject discussed.

[Stop the Cap! encourages readers to sign this (and other) petitions which declare the practice of Internet Overcharging unacceptable.  Whether it's data caps or throttled speeds, customers deserve an unlimited, unthrottled Internet experience they pay good money to receive.  As financial reports show, today's unlimited pricing formula delivers enormous profits to broadband providers, even as their costs to provide the service continue to decline.]

Getting Internet service in rural America can involve a whole lot more than calling the local phone company to check if DSL service is available.  When it is not, satellite broadband is often the only realistic choice to access the Internet.  Unfortunately, navigating through the options, terms and conditions, and restrictions requires the help of a lawyer or rocket scientist.

Kevin Hanssen, a dairy farmer in rural Wisconsin is just one of a dozen Stop the Cap! readers who access us over a satellite Internet connection.  He, along with others, have been writing requesting assistance navigating an increasingly confusing amount of detail about recent upgrades taking place at the parent company of his provider — WildBlue, a service of ViaSat.

As Stop the Cap! recently reported, ViaSat is placing a new satellite into service that will bring improved service for certain customers.  Long time customers like Hanssen have waited more than two years for company-promised upgrades that would bring better speeds and more generous usage policies. Currently, Hanssen faces a tiny usage allowance and “broadband” speeds of well under 1Mbps, especially in the evening.

“As a long term customer, I have lived under a plan that gives me 7.5GB in downloads and 2.3GB in uploads, but my experience with WildBlue may be very different than other customers, because the company has so many legacy and special plans that apply to different customers, so it is very hard to say ‘this is WildBlue’s policy’ because it can vary so much,” Hanssen tells us.

Indeed, over WildBlue’s history, ViaSat has changed its access policies several times, sometimes raising, but often lowering usage allowances accompanied by rate adjustments.  Since 2005, WildBlue customers who originally faced a simple 30-day consumption limit that reset after each billing cycle now face a combination of a usage allowance under the company’s “Fair Access/Data Allowance Policy (FAP),” and an even more confusing rolling speed throttle called the “Quota Management Threshold (QMT).”  Exceeding a monthly usage allowance guarantees broadband speeds of dial-up or less.  Speeds are also curtailed temporarily for customers who run browsing sessions that consume as little as 30MB over a 30 minute period.

WildBlue's Quota Management Threshold starts reducing your speeds after a heavy browsing session.

With the help of Cisco, which created the throttled bandwidth technology, WildBlue’s combined FAP and QMT systems make it impossible for a customer punished just once by speed throttles to completely clear their record as a ‘known bandwidth abuser’ unless they avoid using any bandwidth for a month.  For most customers unequipped to fully grasp the highly technical explanations of both policies, customer service representatives boil it down to something easier to understand: the less service you use, the better the chance you will not face a speed throttle rendering your connection practically unusable.

WildBlue's confusing throttle.

With strict limits in place, WildBlue not surprisingly scores among the lowest of all Internet Service Providers for customer satisfaction, and its nearest competitor Hughes does no better.

“As you have written before, satellite really is ‘take it or leave it broadband’ — heavily rationed, confusing, and very expensive,” Hanssen says.

For Hanssen and other Stop the Cap! readers who rely on satellite Internet, the promise of new capacity and faster speeds were supposed to turn “satellite as a last resort” into something more comparable to 4G wireless in America’s most rural areas.  But as our readers share, there is a big chasm between marketing hype and reality for customers on the ground.

Confusing Brands & Pricing

ViaSat has not been content to offer customers a single brand of satellite broadband service.  In addition to WildBlue itself, ViaSat markets plans under the American Recovery Act (the broadband stimulus program), co-branded service from DirecTV, DISH, AT&T and the National Rural Telecommunications Cooperative (NRTC), and forthcoming service on its newest satellite, ViaSat 1, which the company is marketing as “Exede” Internet. Customers west of the Mississippi who qualify for the American Recovery Act program get free installation and more generous usage allowances of up to 60GB per month.

“For two years, WildBlue has told us better usage allowances and faster service was coming with the new upgraded satellite, which we assumed would service all existing WildBlue customers,” Hanssen shares. “Now it turns out they are leaving existing WildBlue customers behind on the old satellite and creating a brand new service to sell new customers on the new satellite.”

Indeed, for marketing purposes, WildBlue and Exede are two different entities, and WildBlue customers looking for faster speeds from Exede will need to pony up at least $150 for new equipment, sign a new contract, and switch to a new Fair Access Policy that actually delivers many customers a lower usage allowance than their existing service from WildBlue offers.

“It’s total bait and switch, promising us faster service and then reducing the usage allowance that goes with it and adding around an $8/GB over-usage fee on Exede,” Hanssen says.

For customers served by the new ViaSat 1 satellite, Exede sells service based on usage, not speed.  The advertised speed (not independently verified) is 12/3Mbps, which will cost $49.99 for up to 7.5GB per month, $79.99 for 15GB per month, or $129.99 for 25GB per month.

“Highway robbery I call it, because some of those caps are lower than on WildBlue so you are paying for better speed you won’t be able to use unless you agree to pay a lot more for a bigger allowance,” Hanssen says.

New Customers Get Priority Over Old Ones?

Customers eager to switch to the new, faster satellite broadband service report they are encountering roadblocks from ViaSat and their large independent dealer network responsible for sales and service of the satellite reception equipment.  An often-heard accusation is that current customers are taking a back seat to new customers already invited to sign up.

That is a charge ViaSat, through its support forum, has strongly denied.

“We’re not giving preferential treatment to new vs. existing customers,” says WildBlue Forum Administrator Steve. “The dates we’ve quoted to existing customers who call in are approximately April/May, but yes, it could be sooner. It all depends on the number and availability of certified installer technicians in a given area. If someone absolutely wanted it now, we’ll try our best to accommodate that along with the big flood of new orders we’re receiving.”

Steve explains the delays to upgrade existing customers are occurring because new customer installations are currently “through the roof.”

An independent dealer offers new customers a better deal.

But Stop the Cap! has also learned from an independent WildBlue dealer that ViaSat is offering a bonus for dealers who sign new customers, an incentive not paid to upgrade existing ones.  Some new customer promotions also offer free installation and deep discounts until the end of 2012 for 15GB ($49.99) and 25GB ($79.99) service on the new ViaSat 1.  Existing customers do not get the discount pricing and have to pay a $150 installation fee for new equipment required for the new satellite.  Customers within a 2-year initial contract term pay even more: $250.

Customers Revolt

The government-sponsored Broadband Initiative program required WildBlue to provide a more generous usage allowance in return for broadband stimulus money.

Customers learning about the new pricing are unhappy.

Bill Cameron feels let down as a loyal customer by ViaSat’s pricing:

This new Excede 12 plan is an absolute joke. 12Mbps is awesome but the top plan limits you to a up/down total of 25GB and its $129.99 +$9.99 lease fee. So what good is 12Mbps if you really cant use it? Forget Netflix, Hulu or any Video on Demand. I have DirecTV and was hoping to be able to do some streaming but there is no way. If I want to stay at the same $80/mo price point I will loose 7GB of monthly cap since the mid tier plan is 15GB combined up and down. I don’t know what WildBlue is thinking here. Come on, $140/mo in the middle of a recession? Plus there is a $149 setup fee and even customers who have been with them for 7 years, like me, has to pay it. My loyalty is not rewarded one bit. A brand new customer pays the same amount.

A Broadband Reports reader sums up his views about WildBlue’s broken promises:

[...] We have been living with low caps on Wildblue for years, then for several years they -promise- an upgrade that will change everything. Then they up the speed to something most people don’t need, and REDUCE the amount of data available by a LARGE amount, increasing the price as well significantly. It was not what we were lead to believe. This was supposed to be an upgrade, but the speed is useless without quantity, that point has been made over and over.

And it doesn’t take someone sitting all day to go over the caps. It can take a little over an hour every day for one person to go over on the current 512Kbps plan, imagine with more speed how easy the person can go over with about 23% less data available.

Bottom line, it was not an upgrade, period, for many of us. Every neighbor I know is thinking the same thing, some currently drive 30 miles one way to get to a free hotspot to have enough bandwidth for online classes. The offered new plans are not enough for what they do either. Is anyone that understands the limits of satellite asking for anything unreasonable, NO. We were expecting an increase of some sort, any kind, not further insane restrictions after years of being restricted. A downgrade and overcharging is not an upgrade no matter how they try to spin it to us. If so few use what’s available as they say anyway, what would have been the harm of doubling the current caps. PERFECTLY REASONABLE EXPECTATIONS.

Kevin Hanssen wishes he had better options:

At this point, just about anything would be better than WildBlue.  Since AT&T shows no interest in bringing me DSL service, it’s probably going to be wireless broadband or nothing.  We have spotty cell coverage in this part of Wisconsin, but should a provider do something about that, we would still be facing tiny usage allowances in the 2-10GB range.

This is why universal service policies should extend to broadband service, to make certain rural America has reasonable access at reasonable prices.

There is nothing reasonable about satellite or wireless Internet at these speeds, allowances, and prices.  WildBlue wants new customers at all costs, even if they walk over their loyal customers to sign them up. But why shouldn’t they? Their only effective competition is Hughes, and they are actually worse!

Courtesy: WKRC-TV Cincinnati

Frontier Communications’ DSL service to some residents in Sardinia, Ohio has been progressively slowing down to the point Speedtest.net rated one man’s connection an “F-Minus.”

Larry Meeker’s broadband service from Frontier achieved speeds of just 190kbps — about four as fast as traditional dial-up Internet service.  Upload speeds reached just 1kbps.  When Meeker called Frontier Communications to complain about the lousy broadband speeds, he reports Frontier didn’t seem in any hurry to improve his service.

WKRC-TV TroubleShooter Howard Ain reports Frontier had done little for Meeker initially, saying “it will cost a lot of money for the company to upgrade” the broadband facilities in inherited from an acquisition from Verizon Communications.

Frontier changed its mind when Ain indicated the company’s broadband woes were about to be a feature item on WKRC’s 6pm local news.  Meeker also told the station he was preparing to file a complaint with Ohio’s public utility regulator.  Just a few days before the report aired, Frontier called Meeker to tell him improved service was on the way.

Meeker reports it used to take 10-15 seconds to load even basic web pages over Frontier’s DSL service.  But after the company began work on Meeker’s connection, pages are loading much faster, usually after 1-3 seconds.

The Sardinia man noted the best way to get action out of Frontier might be to call the media to get the company to do the right thing.

“I’m very happy that it is so easy to contact Channel 12 news and Howard Ain and know that somebody is at least going to call you and if there is a problem they are going to check it out and investigate it,” Meeker told the station.

A spokesman for Frontier Communications blamed the old owner — Verizon Communications, for inadequate broadband facilities in place to serve Sardinia and surrounding areas. The company says it is spending $90 million on upgrades because people are using the Internet a lot more in the area.  New circuits bringing additional capacity are anticipated to begin service by the second week of February.

WKRC TroubleShooter Howard Ain covers Frontier’s lack of performance in Cincinnati suburb Sardinia, Ohio.  (2 minutes)

Broadband everywhere, except where it isn't.

Comcast is willing to install cable service for a neighborhood in Ashburnham, if six families agree to split the estimated $94,000 installation fee.

Paying more than $10,000 each just to get cable television from the nation’s largest cable operator is not a top priority for those living on Old Pierce Road and Rindge State Road, but getting reliable Internet access is.  Comcast officials have refused all requests to extend cable service to the families, because there are simply too few of them in the company’s eyes to justify the expense.

Families were surprised to find neither Comcast or Verizon interested in serving the neighborhood, because state broadband maps show coverage in Ashburnham from both the dominant cable and phone company.  Comcast suggested the families sign up for satellite Internet service or use a wireless provider instead.  But families complain paying Verizon Wireless or AT&T for mobile broadband is expensive and has resulted in rationed Internet use because of very low data caps.  Even worse, when the weather turns bad, the wireless Internet service effectively turns off.

The affected families want better answers.

“I’m not afraid to spend $400 to get out of a [wireless] contract if I can have Internet when it’s cloudy out,” James LeBlanc of Rindge State Road told the Sentinel & Enterprise. “But I don’t have $10,000 just sitting in my pocket.”

Wireless broadband for rural Massachusetts is simply not a serious solution for most because of the low usage allowances that accompany the service.

“It’s difficult when it’s raining out, and we can’t get online, and I have to tell my kids, sorry, you can’t do your homework tonight,” his wife, Wendy LeBlanc told the newspaper. “My oldest goes to Overlook (Middle School) and I’m going to have to send in notes for any assignments that require Internet research to be done at school.”

“It’s a hardship for our family,” said Brian Belliveau, of Old Pierce Road. “We don’t have enough Internet service. We get into situations where we use all of our data within the first two weeks of the month and have to go without it the rest of the month. Our kids are in school with kids who have service all the time, and they don’t understand why we don’t. It’s hard to explain.”

Comcast’s attitude so far has been ‘tough luck — it’s a money thing.’  Company officials simply won’t front the construction and installation costs because it would take too long to recoup that investment.  That leaves the families with few alternatives.

Although Ashburnham, a community of 6,000 in north-central Massachusetts, is considered “rural,” it is not nearly rural enough to qualify for federal broadband funding.  Besides, according to broadband mapping data supplied by area cable and phone companies, Ashburnham is already “well-served” with broadband.  But don’t tell that to families without Internet access.

Local officials were stunned the multi-billion dollar company wouldn’t assume upfront expenses in return for goodwill and devoted, long-term paying customers.

“I may be sort of old-fashioned, but a company sometimes has to do what is in the best interest of its customers to gain their loyalty,” Selectman Gregory Fagan said. “I’m offended when you say the company can’t afford it. Our schools are giving our children Internet assignments. There’s been discussion of giving tablets to all kindergartners. It’s not like in the ’80s when these things were a luxury. They are must-haves now.”

Virgin Media is doubling customer broadband speeds... for free.

Great Britain is leapfrogging ahead in the global broadband speed race with two announcements this morning that represent major advances in British broadband.

First, Virgin Media is announcing it will double the broadband speeds for four million of its customers starting next month, for free.

The company says it will be the first residential provider in the United Kingdom offering 120Mbps broadband — a 20Mbps speed increase for their existing 100Mbps clients.  Customers on Virgin’s 10, 30, and 50Mbps tiers will soon receive free upgrades to 20, 60, and 100Mbps, respectively.  Those on the company’s popular 20Mbps plan will have their speeds tripled to 60Mbps.

That’s a major advancement for British broadband, where dominant BT-provided DSL runs at speeds averaging just over 6Mbps.

The new speeds were made possible by “modest investments” in Virgin’s fiber network, according to Virgin Media CEO Neil Berkett.

Berkett said the new speeds would help meet growing demand for faster access to support the proliferation of new digital devices.  Because Virgin invested primarily in fiber and cable broadband, speed upgrades on their existing infrastructure come “at a fraction of the cost of other network operators.”

That understanding was not lost on Sky Broadband, a growing competitor in the United Kingdom.  Sky this morning announced it has launched a newly-upgraded 100Gbps optical network to support its 3 million broadband customers.  The company is spending several hundred million British pounds on updating its network to position itself to become Britain’s largest Internet Service Provider.

Sky’s new network is based on the latest Alcatel-Lucent fiber technology, capable of supporting 100Gbps speeds on each of the individual 88 wavelengths on a single optical fiber.  Sky deployed the new dense wavelength division multiplexing technology on its existing optical fiber backbone network, demonstrating the infinite upgrade possibilities fiber optic technology offers.

Sky pitches its network capacity to consumers as a key benefit of its service, noting it is free of “traffic management” policies that reduce speeds for customers of other Internet providers.

The upgrade arrives just in time to handle the expected explosion of online traffic with this week’s introduction of Netflix streaming across Great Britain.

"Hey, we're #19!"

The United States may be a leader in many things, but broadband isn’t one of them. The country has now fallen two more positions — to 19th place, behind South Korea, Sweden, Denmark, the United Kingdom, and even Iceland, since the Berkman Center for Internet and Society released its last rankings in 2009.

In 2004, President George W. Bush complained about the U.S. falling to 10th place, which he declared was “ten spots too low.”

Now eastern Europe and former Soviet Republics in the Baltics threaten to overtake the United States, and countries in southeast Asia already have.  Innovation in the United Kingdom, Australia and New Zealand means deploying fiber to the home service to the vast majority of the population.  Innovation in North America means conjuring up new pricing schemes to raise prices on broadband service and engage in competition-busting mergers and acquisitions.

But a USA Today editorial this week also places much of the blame on corporate influence inside Washington, which has promulgated legislative policies that favor telecommunications companies and throw customers under the bus.

“The simple answer is that other countries have policies that promote competition and innovation,” the editors write. “In contrast, policies here have allowed a few dominant players that control the least interesting parts of the broadband landscape (the cables and the wireless spectrum) to dominate.”

Indeed, a series of telecommunications laws enacted by Congress, combined with short-sighted policies at the Federal Communications Commission, have allowed a handful of super-sized players to own and control broadband service in America, resulting in providers establishing non-competing fiefdoms that avoid head-on competition.

The worst policy of all allowed broadband providers to keep competitors from reaching customers over existing broadband networks.  During the days of dial-up, you could purchase Internet access from the phone company, a large provider like MSN or AOL, or thousands of smaller regional and local service providers.  Simply dial a local access number and you were connected to the provider of your choice.  Now, U.S. law gives broadband network operators the right to restrict these independents from selling service over their networks.  Comcast need not sell anything other than Comcast Internet.  Frontier Communications can make a killing selling its own DSL service, while protecting that revenue from other Internet Service Providers who might sell the service over Frontier’s network for half the price.  Time Warner Cable voluntarily allows Earthlink and a handful of other companies to sell cable broadband service over its infrastructure, but at prices equal to or higher than what Time Warner charges itself.

Broadband providers argue that allowing competitors to sell service on their network would discourage future investment and rob shareholders a return on investments already made.  Today, major cable operators and phone companies are falling all over themselves denying they are in anything but the broadband business.  It has become an enormously lucrative enterprise, more profitable than television or telephone service.

USA Today compares the broadband landscape back home with that in South Korea — perennially the world’s fastest, and considerably less expensive than what North Americans pay for service:

South Korea has made broadband a national priority, mandating deployment and in some cases giving private companies incentives to build out. It has also prevented major players from monopolizing their businesses, encouraging competition and innovation. In South Korea, consumers can get broadband service from a cable or telecom company. But they may also choose among myriad independent providers that are given access to the physical infrastructure. This competition keeps prices down and the quality of service high.

[...] But over time, cable and telecom companies worked the courts and Congress to make sure that this competitive world would never come to be [in the United States]. [...] Wireless is a bit better. But the market has remained a near duopoly, with none of the smaller players emerging as a strong competitor to AT&T and Verizon.

The same open network concept has fought its way forward in Canada (where Bell has worked furiously to sabotage the business plans of independent providers) and in the United Kingdom, Australia and New Zealand where all three governments have decided the best solution would be to scrap the ancient landline network and start fresh with an open-to-all-comers fiber to the home service.

Back home in the States it is business as usual with increasing broadband prices and the looming prospect of usage-limiting schemes designed to cut capital costs, monetize broadband usage, and stop cord-cutting.

The opposing point of view comes courtesy of dollar-a-holler, corporate-backed think tank The Heartland Institute, who is stuck quoting notorious industry-funded studies and think tanks like the Discovery Institute and the Technology Policy Institute:

The idea that European and Asian countries are lapping America in the race for broadband speed and penetration is a fallacy created with statistics comparing “persons” instead of “households.” Once you make that correction, the USA is firmly planted among the top of industrialized nations, as economist Scott Wallsten pointed out when he was a staffer at the Federal Communications Commission in 2009.

And as tech researcher Bret Swanson of Entropy Economics points out, if you measure Internet usage by gigabytes used per month — a better measure of the speed and utility of networks — the USA has nearly lapped Western Europe once and Asia twice.

Heartland Institute: "By not disclosing our donors, we keep the focus on the issue."

If you measure how many mouse clicks customers in New York make on a Thursday afternoon, we could be number one as well!  Gigabytes used per month does not measure the speed or price of service on broadband networks, considerations that actually do impact broadband rankings.

Mr. Wallsten is a familiar favorite go-to-guy for The Heartland Institute.  He’s also the choice of Time Warner Cable, who paid him $20,000 for a 2010 essay: “The Future of Digital Communications Research and Policy.”

There is big money to be made writing corporate-funded research reports.  Bret Swanson knows that very well, having been involved with the Discovery Institute, a “research group” that delivers paid, “credentialed” reports to telecommunications company clients who waive them before Congress to support their positions.  Swanson is also a “Visiting Fellow” at Arts+Labs/Digital Society, which counted as its “partners” AT&T and Verizon.

The gentleman from Heartland also quotes from the misnamed “Progressive Policy Institute,” which counts among its funding partners, AT&T.

It would have been probably easier (but ineffectively transparent) to simply quote from AT&T and Comcast directly.

The Heartland Institute, unsurprisingly, believes letting existing broadband providers deliver service exactly the way they want is the best option:

The digital economy — one of the only vibrant economic sectors left — doesn’t need more government “investment” or regulation. It needs only for government to butt out and let the market work the magic that continues to bring us the marvels of the modern age.

That magic will cost you $50 a month and rising.  If some providers have their way, while the rest of the world abandons usage caps, American providers can’t wait to slap them on, reducing the value of your service even further.