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UAE Leads With 93.7% of Homes on Fiber Internet; U.S. Lags at 13.1%

Phillip Dampier September 21, 2017 Broadband Speed, Consumer News, Public Policy & Gov't No Comments

The United Arab Emirates now has the highest penetration of fiber optic broadband in the world, according to data from the FTTH Council Europe.

At least 93.7% of UAE homes are now hooked up to fiber-to-the-home internet service, and the country’s largest provider — Etisalat — promises it will spend millions more to further expand fiber connected home broadband and mobile services across the country.

In contrast, the United States has only wired 13.1% of its homes to fiber broadband, 11.8% in Canada. The countries with the highest percentage of fiber connections are the UAE, Qatar, Singapore, South Korea, Hong Kong, and Japan.

According to the World Bank, broadband internet is today seen as critical to the transition to knowledge-intensive economies across the world. Countries in the Middle East and North Africa are accelerating their fiber broadband programs, believing the technology will prove transformational to remake or build their economies in a digital world. As many first world countries’ telecommunications networks are captive to large, for-profit corporate interests that have dragged out broadband expansion to protect profits, the developing world has a chance to leapfrog over countries in North America and Europe and launch new connected technology centers for the digital economy.

For the UAE, fiber optic broadband is a critical part of the country’s Vision 2021 strategy to invest vast sums in infrastructure and development programs to diversify the country’s economy away from its dependence on oil and gas reserves and guarantee future prosperity.

Lifeline Broadband Stalled Despite Evidence Internet Access Improves 93% of Children’s Grades

Comcast claims 93% of families participating in its affordable internet service for the income-challenged report an improvement in their children’s grades at school.

That result is not surprising, according to research cited by FCC Commissioner Jessica Rosenworcel, who told the New York Times last year that one-third of students from kindergarten through 12th grade who live in low-income or rural households either have no access, or cannot afford access to the internet at home.

A 2015 Pew Research report found that with approximately 29 million households in America having children between the ages of 6 and 17, five million households with school-age children do not have high-speed internet service at home. Low-income households – and especially black and Hispanic ones – make up a disproportionate share of that number:

Pew Research analysis of the Census data finds that the lowest-income households have the lowest home broadband subscription rates. Roughly one-third (31.4%) of households whose incomes fall below $50,000 and with children ages 6 to 17 do not have a high-speed internet connection at home. This low-income group makes up about 40% of all families with school-age children in the United States, according to the bureau’s American Community Survey. (The survey asked questions on home internet use for the first time in 2013.)

There are fewer studies measuring how a lack of internet access impacts on academic performance. With ongoing budget constraints now forcing seven out of 10 teachers assigning homework that requires students to set aside outdated textbooks and do research online, a significant number of students from income-disadvantaged or rural homes are struggling to keep up with their richer peers.

Concerns about fraud in the Lifeline program are stalling aggressive efforts to get affordable internet into poor and rural family homes.

In Coachella, Calif., and Huntsville, Ala., school districts report the problem has become so bad, many students are now depending on buses equipped with Wi-Fi to function as mobile study halls, where students sometimes ride for hours frantically trying to complete homework they cannot do at home. Some school buses are now parked in neighborhoods overnight with Wi-Fi service left on continuously where few families can afford a home internet connection at the prices demanded by the local phone and cable companies.

“This is what I call the homework gap, and it is the cruelest part of the digital divide,” said Rosenworcel, a Democratic member of the FCC who has tried to adapt the Lifeline program to include home internet access.

Rosenworcel and others in favor of subsidizing internet access for the poor are up against two powerful groups in Washington — the providers themselves, which have launched a PR blitz designed to promote their own voluntary low-cost internet programs like Comcast’s Internet Essentials and Charter Communications’ Spectrum Internet Assist. The other obstacle comes from a number of Republicans in Congress who frequently demagogue Lifeline as a rat hole of waste, fraud, and abuse and are reticent about expanding it to cover broadband.

In a hearing held this morning by the Senate Commerce Committee, senators questioned a representative of the Government Accountability Office that released a report in May that found “extensive problems” with the Lifeline program. The report targeted 12 phone companies for approving Lifeline applications with fake eligibility information 63% of the time, potentially exposing taxpayers to millions of dollars in losses for non-qualified or deceased applicants.

Attempts to strengthen verification procedures are ongoing, first initiated by former FCC Chairman Thomas Wheeler, who approved a national verifier system for providers to ensure compliance. But for current FCC Chairman Ajit Pai, who voted against Wheeler’s compliance program, complaining that states did a better job of combating fraud, the results of the GAO study confirmed his own skepticism about the Lifeline program. Earlier this year, he blocked the approval of nine companies from joining the program to offer affordable internet access and shows no signs of relenting.

That leaves private telecom companies to continue expanding their own affordable internet programs. Comcast recently reported it had enrolled almost 20,000 families in its program in New Jersey alone. Its Internet Essentials program offers internet access to families qualified for the National School Lunch Program for $9.95 a month and offers a modest computer for $150. Comcast’s program now in its sixth year and recently increased its offered broadband speed to 15/2Mbps and offers 40 free hours a month to XFINITY Wi-Fi hotspots.

American Enterprise Institute’s Shallow Formula for Broadband Nirvana

AEI: If you bought broadband service, that means you like your service and don’t need or want anything better.

The American Enterprise Institute wants the FCC to judge to quality of America’s broadband based on what customers are able to buy today and how much they are willing to pay to get it.

Section 706 of the Telecommunications Act of 1996 requires the FCC to report to Congress whether broadband “is being deployed to all Americans in a reasonable and timely fashion.” As part of that process, the FCC must determine if Americans are getting internet connections capable of providing “advanced telecommunications capability.”

If the FCC reports to Congress that the country’s biggest telecom companies are letting their customers down with inadequate service or no service at all, that can create conditions for the FCC to step in and start insisting on more competition and oversight as well as setting benchmarks for providers to meet. If the report shows that broadband service is adequately provided, the FCC need not regulate, and in some cases such a finding will fuel calls to further deregulate the industry by getting rid of “unnecessary regulation.”

Not surprisingly, findings since 2001 have varied depending on which political party holds the majority on the Commission. Under President George W. Bush, the FCC consistently found broadband service was being adequately deployed to Americans. The FCC also set the bar pretty low on broadband speed, claiming anything at or above 4/1Mbps service constituted “broadband.” That definition comfortably accommodated DSL service from the phone companies.

Wheeler – Argued for better broadband and more competition.

During the Obama Administration, the FCC set the bar higher. With dissent from the Republican minority, the FCC raised the minimum speed that could be defined as broadband to 25/3Mbps, immediately excluding most DSL and wireless connections. In 2015, former FCC Chairman Thomas Wheeler specifically excluded satellite and wireless connections from that formula, despite objections from FCC Commissioner Ajit Pai. Particularly under Wheeler’s watch, the Democratic majority frequently complained about inadequate broadband and competition, and used Section 706 as its authority to override state laws in North Carolina and Tennessee that placed onerous restrictions on municipal broadband networks. Wheeler felt such laws were anti-competitive, but the courts ruled the FCC exceeded its authority and overturned his pre-emption orders.

Under the Trump Administration, FCC Chairman Ajit Pai seems to be headed down a similar path taken during the Bush Administration, which was optimistic about the state of broadband service and, as a result, applied a lot less pressure on the telecommunications industry.

Chairman Pai is seeking to overturn current Net Neutrality regulations and seems ready to support efforts to undermine the broadband speed standard established by his predecessor. That would allow mobile/wireless companies to offer 10/1Mbps speed and have it qualify as broadband service. Even better, ISPs — wired or wireless — would be considered “competitive” in many cases, even if only one provider offered service in the area.

Pai’s proposal was met with serious objections from Democratic Commissioner Mignon Clyburn who claimed even the current 25/3Mbps standard no longer met the definition of “advanced telecommunications capability.”

“The statute defines advanced telecommunications capability as broadband that is capable of ‘originat[ing] and receiv[ing] high-quality voice, data, graphics, and video telecommunications. High-definition video conferencing is squarely within the rubric of ‘originating and receiving high-quality… video telecommunications,’ yet the 25/3Mbps standard we propose would not even allow for a single stream of 1080p video conferencing, much less 4K video conferencing. This does not even consider that multiple devices are likely utilizing a single fixed connection, or the multiple uses of a mobile device.”

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Pai: Wants broadband providers and the competitive marketplace to determine whether broadband is good enough.

AEI dismissed the entire debate, claiming the only people who will respond to the FCC’s request for comments on the subject will be “pundits, special interests, and companies with skin in the game.”

Instead, AEI proposes the FCC rely on watching customers navigate their broadband options — a monopoly for some, duopoly for many others — and only address problems if something unusual emerges. AEI’s test is to see if “a location or demographic is inexplicably different and purchases less than would be expected.”

If something odd does happen in a particular area, AEI argues there could only be two reasons for that:

  • Barriers to competition;
  • Outdated government regulations and policies standing in the way of progress.

Missing from AEI’s list of possibilities is the presence of an abusive monopoly provider, a comfortable duopoly among two providers with no interest from a third competitor to enter the market, or an area served by two lackluster providers that won’t invest in their networks.

AEI’s test depends entirely on gathering data about what internet services are available for sale in any particular area now and then study who is buying what. But this does not measure customer satisfaction or consider whether those speed tiers and prices are adequate.

Under AEI’s test, “if a geographic area does not have broadband, the FCC could use the results of its customer study to determine what customers in the area would likely find valuable. Then, the FCC could do a cost-benefit study and an economic feasibility study — and conduct a reverse auction if a subsidy is potentially needed — to determine what, if any, financial incentive might be appropriate for the area.”

In other words, the same think tank that has been on record for decades opposing government subsidies to private companies now wants to offer telecom companies government funding to build what would become largely unregulated privately-owned broadband networks that would run with little or no oversight.

AEI’s willingness to let “customers express their opinions through their purchases” is hardly an adequate replacement for current broadband policies designed to keep the U.S. competitive with the rest of the world and ensure adequate service and competition. As any cable subscriber knows, you can subscribe to Comcast or Charter/Spectrum and still loathe your options and want something better. AEI doesn’t appear interested in seeing you get those options, much less preserve what little oversight, consumer protection, and broadband benchmarks we have now. Neither does current FCC Chairman Ajit Pai.

Stop the Cap!’s Net Neutrality Comments to FCC

July 17, 2017

Marlene H. Dortch, Secretary
Federal Communications Commission
Office of the Secretary
445 12th Street, SW
Washington, DC 20554

Dear Ms. Dortch,

Stop the Cap! is writing to express our opposition to any modification now under consideration of the 2015 Open Internet Order.

Since 2008, our all-volunteer consumer organization has been fighting against data caps, usage-based billing and for Net Neutrality and better broadband service for consumers and businesses in urban and rural areas across the country.

Providing internet access has become a bigger success story for the providers that earn billions selling the service than it has been for many consumers enduring substandard service at skyrocketing prices.

It is unfortunate that while some have praised Clinton era deregulatory principles governing broadband, they may have forgotten those policies were also supposed to promote true broadband competition, something sorely lacking for many consumers.

As a recent Deloitte study[1] revealed, “only 38 percent of homes have a choice of two providers offering speeds of at least 25Mbps. In rural communities, only 61 percent of people have access to 25Mbps wireline broadband, and when they do, they can pay as much as a 3x premium over suburban customers.”

In upstate New York, most residents have just one significant provider capable of meeting the FCC’s 25Mbps broadband standard – Charter Communications. In the absence of competition, many customers are complaining their cable bills are rising.[2]

Now providers are lobbying to weaken, repeal, or effectively undermine the 2015 Open Internet Order, and we oppose that.

We have heard criticisms that the 2015 Order’s reliance on Title II means it is automatically outdated because it depends on enforcement powers developed in the 1930s for telephone service. Notwithstanding the fact many principles of modern law are based on an even older document – the Bill of Rights, the courts have already informed the FCC that the alternative mechanisms of enforcement authority that some seem motivated to return to are inadequate.

In a 2-1 decision in 2014, the U.S. Court of Appeals for the D.C. circuit ruled:

“Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”[3]

In fact, the only important element of the pre-2015 Open Internet rules that survived that court challenge was a disclosure requirement that insisted providers tell subscribers when their internet service is being throttled or selected websites are intentionally discriminated against.

Unfortunately, mandatory disclosure alone does not incent providers to cease those practices in large sections of the country where consumers have no suitable alternative providers to choose from.

Reclassifying broadband companies as telecommunications services did not and has not required the FCC to engage in rate regulation or other heavy-handed oversight. It did send a clear message to companies about what boundaries were appropriate, and we’ve avoided paid prioritization and other anti-consumer practices that were clearly under consideration at some of the nation’s top internet service providers.

In fact, the evidence the 2015 Open Internet Order is working can be found where providers are attempting to circumvent its objectives. One way still permitted to prioritize or favor selected traffic is zero rating it so use of preferred partner websites does not count against your data allowance.[4] Other providers intentionally throttle some video traffic, offering not to include that traffic in your data allowance or cap.[5] Still others are placing general data caps or allowances on their internet services, while exempting their own content from those caps.[6]

Our organization is especially sensitive to these issues because our members are already paying high internet bills with no evidence of any rate reductions for usage-capped internet service. In fact, many customers pay essentially the same price whether their provider caps their connection or not. It seems unlikely consumers will be the winners in any change of Open Internet policies. Claims that usage caps or paid prioritization policies benefit consumers with lower prices or better service are illusory. One thing is real: the impact of throttled or degraded video content which can be a major deterrent for consumers contemplating disconnecting cable television and relying on cheaper internet-delivered video instead.

Arguments that broadband investment has somehow been harmed as a result of the 2015 Order are suspect, if only because much of this research is done at the behest of the telecom industry who helped underwrite the expense of that research. Remarkably, similar claims have not been made by executives of the companies involved in their reports to investors. Those companies, mostly publicly-traded, have a legal obligation to report materially adverse events to their shareholders, yet there is no evidence the 2015 Order has created a significant or harmful drag on investment.

In a barely regulated broadband duopoly, where no new significant competition is likely to emerge in the next five years (and beyond), FCC oversight and enforcement is often the only thing protecting consumers from the abuses inherent in that non-competitive market. Preserving the existing Open Internet rules without modification is entirely appropriate and warranted, and has not created any significant burdens on providers that continue to make substantial profits selling broadband service to consumers.

Transferring authority to an overburdened Federal Trade Commission, not well versed on telecom issues and with a proven record of taking a substantial amount of time before issuing rulings on its cases, would be completely inappropriate and anti-consumer.

Therefore, Stop the Cap!, on behalf of our members, urges the FCC to retain the 2015 Open Internet Order as-is, leaving intact the Title II enforcement foundation.

Respectfully yours,

Phillip M. Dampier
Founder and Director

Footnotes:

[1] https://www2.deloitte.com/us/en/pages/consulting/articles/communications-infrastructure-upgrade-deep-fiber-imperative.html#1

[2] “Thousands of Time Warner Cable Video Customers Flee Spectrum’s Higher Prices.” (http://bit.ly/2tjHJ8f); “Lexington’s Anger at Spectrum Cable Keeps Rising. What Can We Do?” (http://www.kentucky.com/news/local/news-columns-blogs/tom-eblen/article160754069.html)

[3] http://www.cadc.uscourts.gov/internet/opinions.nsf/3AF8B4D938CDEEA685257C6000532062/$file/11-1355-1474943.pdf

[4] https://cdn3.vox-cdn.com/uploads/chorus_asset/file/7575775/Letter_to_R._Quinn_12.1.16.0.pdf

[5] https://www.t-mobile.com/offer/binge-on-streaming-video.html

[6] http://www.chicagotribune.com/bluesky/technology/ct-data-cap-policies-20151214-story.html

Updated: Arrest Made But Charges Dropped; Vandals Cut Charter’s Fiber Cables in Queens Again

A second fiber cut in two weeks left 30,000 Queens residents with no cable service for hours. (Image: CBS New York)

A second major cable outage in two weeks left 30,000 Queens customers of Charter Communications without phone, TV and internet service Tuesday, after vandals severed the company’s fiber optic cables.

A Long Island man was arrested Wednesday night at his Long Island home for allegedly causing the first outage, which wiped out service in the same area for almost 16 hours on June 26.

The NYPD issued a press release stating Michael Tolve (48) of Wantagh, N.Y. was charged with criminal mischief and is alleged to have cut fiber cables and removed a digital memory card from a nearby surveillance camera to avoid being detected. He was later identified from other surveillance camera footage.

Charter Communications claims Tolve is a member of the International Brotherhood of Electrical Workers Local Union 3, one of the unions that has been involved in a strike against Charter for several months. He worked as a fiber technician for both Charter Communications and its predecessor Time Warner Cable for 14 years. The cable company puts the damage estimate for the first cable cut in June at $67,000. Charter claims it has experienced 106 malicious cable cuts in its New York-area network since unionized cable technicians went on strike on March 28. The company has filed police reports on all of them.

“It’s disappointing that one of our employees would unlawfully sabotage the infrastructure we all work so hard to maintain and inconvenience our customers in this way,” Charter spokesman John Bonomo said in an email. “We intend to support the prosecution of these crimes to the fullest extent of the law, as they put our customers’ well-being in jeopardy, cause local businesses to suffer, and are a general inconvenience for all.”

Both fiber cuts strategically affected the largest possible number of customers with the least amount of effort. Charter officials said they detected the fiber cuts and dispatched repair crews immediately, but restoring service was “a gradual process” that took several hours.

Update (7/17): The Queens district attorney’s office has declined to press charges against Tolve, and all charges against him have been dropped pending an additional investigation.

 

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