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FCC Votes to Enforce Net Neutrality and Overturns Municipal Broadband Bans in N.C., Tenn.

Phillip Dampier February 26, 2015 Net Neutrality, Public Policy & Gov't 4 Comments
Net Neutrality victory. (Mignon Clyburn (L), Thomas Wheeler (C), and Jessica Rosenworcel (R) celebrate their majority vote in favor of Net Neutrality. (Image: Mark Wilson/Getty Images)

Net Neutrality victory. Democratic FCC commissioners Mignon Clyburn (L), Thomas Wheeler (C), and Jessica Rosenworcel (R) celebrate their majority vote in favor of Net Neutrality. (Image: Mark Wilson/Getty Images)

The Federal Communications Commission voted today to regulate broadband service as a telecommunications service and public utility, guaranteeing providers will not be allowed to interfere with Internet traffic.

Three of the five commissioners voted in favor of strong Net Neutrality protections, equally applicable to home wired broadband and wireless service, while two Republican commissioners decried the FCC’s move as a regulatory overreach.

“The Internet is too important to allow broadband providers to be the ones making the rules,” said FCC chairman Tom Wheeler, who reacted emotionally to opposition charges that Net Neutrality would lead to a government takeover of the Internet. Wheeler called many of the critical statements made by Net Neutrality opponents “nonsense.”

“Today is the proudest day of my public policy life,” Wheeler said.

The FCC also voted 3-2 in favor of sweeping away state laws in North Carolina and Tennessee that restrict municipal broadband development. Wheeler called the anti-public broadband initiatives “red tape” and anticompetitive. The change will allow services like Fibrant and Greenlight in North Carolina and EPB in North Carolina to immediately begin planning expansion outside of their current service areas. It could also spark new community network development, if today’s FCC actions survive an anticipated court challenge.

Today’s decision does not overturn community broadband bans in more than a dozen other states, but does open the door for municipal providers to file requests with the FCC to overturn similar laws.

Despite claims by providers the move would saddle providers with 1930s era telephone regulations, the FCC today adopted a broadly whittled down set of principles under Title II of the Communications Act which redefines broadband as a “telecommunications service.” The FCC will not regulate consumer pricing or how services are marketed to the public. It will observe and referee disputes between providers and content creators and guarantee no blocking, no speed throttling, and no paid Internet fast lanes.

Wall Street had little reaction to today’s events with most cable and telco stocks remaining flat or slightly higher this afternoon. Investors appear to be unconcerned by the new broadband regulatory framework.

Google Fiber Headed to Atlanta, Charlotte, Raleigh-Durham, N.C., Nashville; Avoids Verizon FiOS Country

atlanta fiberGoogle has announced it will bring its fiber broadband service to four new cities — Atlanta, Charlotte, N.C., Raleigh-Durham, N.C. and Nashville, Tenn., according to a report on Google’s Fiber blog.

In a familiar pattern, Google recently sent invitations to local news organizations in those four cities to attend events this week, without identifying the subject.

As with earlier similar events, the topic was the local launch of Google Fiber.

The cities were all on Google’s 2014 list for possible expansion. Those left out (for now) include Salt Lake City, San Antonio, Phoenix, Portland, Ore., and San Jose, Calif. Google recently told city officials in those communities it was still contemplating projects, but remain undecided for now.

After the announcements this week, it will take at least one year before Google is ready to light up the first “fiberhoods” in the cities, usually selected based on customer signups.

Google will challenge Comcast and AT&T in Georgia, Time Warner Cable and CenturyLink in North Carolina, and Comcast and AT&T in Nashville. In Atlanta, the fiber build will not only include Atlanta, but also Avondale Estates, Brookhaven, College Park, Decatur, East Point, Hapeville, Sandy Springs and Smyrna.

expansion

Google will offer unlimited gigabit broadband service for an expected $70 a month. AT&T limits U-verse customers to 250GB in Georgia and Tennessee, and Comcast has subjected both Atlanta and Nashville to its compulsory usage cap experiments, setting a monthly usage allowance at 300GB.

Time Warner Cable does not limit broadband customers in North Carolina, but the Republican-dominated state government is also hostile to community-owned broadband, making it unlikely either Raleigh-Durham or Charlotte will see public broadband competition anytime soon.

Fiber-is-comingGoogle officials have also been reportedly sensitive to local government red tape and regulation. In Portland, the Journal reports Google has put any fiber expansion on hold there because Oregon tax-assessment rules would value Google’s property based on the value of their intangible assets, such as brand. That would cause Google’s property taxes in Oregon to soar. Until the Oregon state legislature makes it clear such rules would not apply to Google Fiber, there will be no Google Fiber in Portland.

Google has also once again shown its reluctance to consider any community or region where Verizon FiOS now provides fiber optic service. The entire northeastern United States, largely dominated by Verizon, has been “no-go” territory for Google, with no communities making it to their list for possible future expansion.

Among the collateral damage are Verizon-less communities in northern New England served by FairPoint Communications and Comcast and portions of western New York served by Frontier Communications where Time Warner Cable has overwhelming dominance with 700,000 subscribers out of 875,000 total households in the Buffalo and Rochester markets.

Wall Street continues to grumble about the Google Fiber experiment, concerned about the high cost of fiber infrastructure and the potential it will create profit-killing price wars that will cut prices for consumers but cost every competitor revenue.

http://www.phillipdampier.com/video/WSOC Charlotte Mayor Google Fiber is coming to Charlotte 1-27-15.flv

Charlotte city manager Ron Carlee spoke exclusively to WSOC-TV’s Jenna Deery about how Charlotte won Google over to bring its fiber service to the community. Having a close working relationship between city infrastructure agencies and Google was essential, as was cutting red tape and bureaucracy. (2:10)

Charlotte, N.C. Better Business Bureau Names Its Top Offender for 2014: Time Warner Cable

Phillip Dampier January 15, 2015 Consumer News, Time Warner Cable 2 Comments

twc logoTime Warner Cable was named by the Better Business Bureau’s its biggest overall offender in the Charlotte region, generating 187 complaints last year, according to the group’s annual year-end report, noted by the Charlotte Observer.

The cable company did not generate enough complaints to put cable and satellite provider complaints in the top complaint categories, however. Broadband providers in the region came in third in complaints, behind new car dealers and collection agencies. Auto repair shops and used car dealers did better, coming in fourth and fifth, respectively.

Time Warner Cable could not be reached for comment, but complaints registered with the BBB against the cable company almost always were resolved to the customer’s satisfaction. Most companies forward BBB complaints to “executive level” customer service supervisors that are empowered to do almost whatever it takes to settle a complaint. In Charlotte, 91 percent of complaints were quickly resolved once registered with the organization.

 

President Obama Calls for an End to State Bans on Community Broadband; Public Networks Save $

Obama

President Barack Obama

President Barack Obama will be in Cedar Falls, Iowa today to announce steps his administration plans to take to improve broadband in the United States, including a call to end laws that restrict community broadband development that limits competition.

“Today, too few Americans have affordable and competitive broadband choices, but some communities around the country are choosing to change that dynamic,” says a statement issued by the White House. “As a result – as outlined in a new report being issued today – cities like Lafayette, Chattanooga, and Kansas City, have broadband that is nearly one hundred times faster than the national average, yet still available at a competitive price. By welcoming new competition or building next-generation networks, these communities are pioneers in broadband that works, and today in Cedar Falls, Iowa, the President is highlighting their remarkable success stories and providing municipal leadership and entrepreneurs new tools to help replicate this success across the nation.

The report, produced by the National Economic Council and Council of Economic Advisers, finds no evidence to support industry contentions that community-owned broadband duplicates existing broadband services and wastes taxpayer dollars. It also challenges cable and phone industry-backed groups claiming publicly owned broadband networks are business failures.

It cites the success of Chattanooga’s EPB Fiber service, operated by the local municipal utility. Not only is EPB successful financially, but it has introduced Chattanooga residents to the kind of competition sorely lacking in most cities for telecom services.

cedar falls“EPB’s efforts have encouraged other telecom firms to improve their own service,” states the report. “In 2008, for example, Comcast responded to the threat of EPB’s entrance into the market by investing $15 million in the area to launch the Xfinity service – offering the service in Chattanooga before it was available in Atlanta. More recently, Comcast has started offering low-cost introductory offers and gift cards to consumers to incentivize service switching. Despite these improvements, on an equivalent service basis, EPB’s costs remain significantly lower.”

In Wilson, N.C., Time Warner Cable customers pay significantly less for cable and broadband service than other North Carolina customers because of the presence of Greenlight, the community-owned fiber to the home provider. TWC customers in Wilson pay stabilized prices for service while residents in the nearby Research Triangle pay as much as 52 percent more for basic Internet service, according to the report. Greenlight’s competition has brought gigabit broadband to the community as well as lower prices for customers who decide to remain with Time Warner. The combined savings is estimated at more than $1 million annually for Wilson residents.

EPB is the municipal utility in Chattanooga, Tenn.

EPB is the municipal utility in Chattanooga, Tenn.

Those who believe municipal broadband is a waste of taxpayer dollars should consider the story of Lafayette, La.’s LUS Fiber. In addition to bringing superior broadband service to a city dominated by a cable operator that used to treat the market as an afterthought, the presence of LUS’ fiber to the home network has forced Cox Cable to improve service, offer significant customer retention deals to departing customers and defer rate increases. The investment in community broadband has saved residents an estimated $4 million from rate hikes that went ahead in other Cox cities, with an estimated total savings of between $90 and $100 million for Lafayette-area broadband customers over LUS’ first 10 years of service.

Taxpayer-supported institutions like local government, law enforcement, and schools have also seen dramatic savings by switching to municipal solutions. In Scott County, Minn. the local government’s annual bond payment for constructing their own broadband network is $35,000 less than what the county used to pay private companies for a much slower network. Area schools that formerly paid private sector telecom companies $58 per megabit of Internet speed now pay $6.83 — a savings of nearly 90 percent. Schools also received dramatic speed increases from 100 to 300Mbps. They paid less for more service — from $5,800 a month before to $2,049 a month today. Those payments go straight back to the county government instead of into the hands of out-of-state investment bankers and shareholders. On the state level, Minnesota’s public institutional network is saving taxpayers almost $1 million a year.

With the broadband profit gravy train for big cable and phone companies grinding to a halt in competitive areas, several of these companies have spent millions lobbying state governments to outlaw public broadband services. They have succeeded in 19 states, primarily with the assistance of the corporate-funded American Legislative Exchange Council (ALEC), which appeals to primarily Republican lawmakers with claims government broadband is unfairly competing with the private sector. In fact, private providers have not been driven out of communities where they face municipal competition, but they have been forced to lower prices and improve service for customers.

Today the president will call for a new effort to support local self-determination for broadband by strongly opposing industry-backed, anti-competitive deterrents and bans on community-owned networks. The president will also sign a letter addressed to FCC chairman Thomas Wheeler encouraging him to move forward with a federal ban on state broadband laws that restrict broadband development.

He will also announce additional funding for rural broadband expansion and take steps to bring local leaders together to explore how the development of community broadband initiatives in their cities and towns can make a major difference in the 21st century digital economy. The president recognizes that most Americans lack sufficiently competitive choices for broadband service and often have just one choice — the cable company — for broadband speeds greater than 25Mbps. That means many Americans are seeing their broadband speeds lag while their monthly bills continue to grow.

Community-owned broadband may be the only alternative many cities have for better broadband as would-be competitors are scared off by high construction costs and an inability to secure cable television programming at competitive prices for their customers.

Charlotte Taxpayers, Tourists Will Pay $33.5 Million for Improvements to Time Warner Cable Arena

charlotte-time-warner-cable-arena

Time Warner Cable Arena – Charlotte, N.C.

Taxpayers and tourists in North Carolina will be on the hook for $33.5 million in improvements for the “outdated” 10-year old Time Warner Cable Arena in Charlotte.

The Charlotte Hornets will spend the public’s money over the next ten years renovating restaurants and bathrooms and make several other improvements inside the stadium.

Time Warner Cable won the naming rights for the stadium by cutting a deal with the Hornets (then known as the Bobcats) to allow games to air on satellite and regional cable sports networks, especially Fox Sports Net South. The stadium is largely the financial responsibility of Charlotte-area taxpayers, but a wealthy basketball team and the area’s largest cable operator take most of the credit.

The city is contractually obligated to spend taxpayer dollars on renovations and city officials took credit for reducing the original request for $50 million down to $33.5 million. Deal critics contend taxpayers are footing the bill while the NBA team enjoys a free ride.

The city signed an agreement in 2005 that includes language compelling the city to be concerned with the image of the team and its sponsors. Specifically, the city agreed to maintain the arena as among the NBA’s “most modern” stadiums. Just a decade after opening, the Hornets contend the stadium no longer meets that obligation. Now taxpayers and tourists will pony up millions from a hotel/motel occupancy tax and a car rental tax to cover renovations, including those for tony, corporate-reserved hospitality suites.

Some city council members claimed to feel trapped into voting for the deal, which was approved in a 9-2 vote. The council’s two Republicans voted no.

“If we break a contract, who will believe our word?” at-large council member Claire Fallon, a Democrat, told the Charlotte Observer. “Who will believe us? I have to vote for it.”

But Republican councilman Ed Driggs believes the city has signed a sucker’s deal.

“Many don’t believe public money should be used to subsidize a for-profit business,” Driggs said. “How do we rationalize the terms of this? We pay all capital costs … and receive no proceeds. What kind of partnership is this?”

http://www.phillipdampier.com/video/WBTV Charlotte Charlotte City Council votes to upgrade TWC arena 9-8-14.mp4

Eyebrows were raised when several council members, including the mayor pro tem, voted in favor of the Time Warner Cable Arena deal but against a public works project potentially financed by the federal government to expand the city’s Gold Line streetcar public transit system. WBTV in Charlotte reports. (2:31)

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