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Cable Operators Told to Get Ready for a Gigabit, But Will Rationed Usage Make It Meaningless?

Phillip Dampier: A cable trade publication is lecturing its readership on better broadband the industry spent years claiming nobody wanted or needed.

Phillip Dampier: A cable trade publication is lecturing its readership on better broadband the industry spent years claiming nobody wanted or needed.

Remember the good old days when cable and phone companies told you there was no demand for faster Internet speeds when 6Mbps from the phone company was all you and your family really needed?

Those days are apparently over.

Multichannel News, the largest trade publication for cable industry executives, warns cable companies gigabit broadband speeds are right around the corner and the technological transformation that will unleash has been constrained for far too long.

Say what?

Proving our theory that those loudest about dismissing the need for faster Internet speeds are the least equipped to deliver them, the forthcoming arrival of DOCSIS 3.1 technology and decreasing costs to deploy fiber optics will allow cable providers to partially meet the gigabit speed challenge, at least on the downstream. Before DOCSIS 3.1, consumers didn’t “need those speeds.” Now companies like Comcast claim it isn’t important what consumers need today — it’s where the world is headed tomorrow.

Comcast 2013:

Comcast executive vice president David L. Cohen writes that the allure of Google Fiber’s gigabit service doesn’t match the needs or capabilities of online Americans.

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access,” Cohen says, in a nod to Google Fiber. “The issue with such speed is really more about demand than supply. Our business customers can already order 10-gig connections. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available to the home.” Essentially, Cohen argues that even if Comcast were to deliver web service as fast as Google Fiber’s 1,000Mbps downloads and uploads, most customers wouldn’t be able to get those speeds because they’ve got the wrong equipment at home.

Comcast 2015:

“We’ve consistently offered the most speeds to the most homes, but with the current pace of tech innovation, sometimes you need to go to where the world is headed and not focus on where it is today.”

“The next great Internet innovation is only an idea away, and we want to help customers push the boundaries of what the Internet can do and do our part to inspire developers to think about what’s possible in a multi-gigabit future.  So, next month we will introduce Gigabit Pro, a new residential Internet service that offers symmetrical, 2-Gigabits-per-second (Gbps) speeds over fiber – at least double what anyone else provides.”

Nelson (Image: Multichannel News)

Nelson (Image: Multichannel News)

Rich Nelson’s guest column in Multichannel News makes it clear American broadband is behind the times. The senior vice president of marketing, broadband & connectivity at Broadcom Corporation says the average U.S. Internet connection of 11.5Mbps “is no longer enough” to support multiple family members streaming over-the-top video content, cloud storage, sharing high-resolution images, interactive online gaming and more.

Nelson credits Google Fiber with lighting a fire under providers to reconsider broadband speeds.

“Google’s Fiber program may have been the spark to light the fuse — Gigabit services have fostered healthy competition among Internet and telecommunications providers, who are now in a position to consider not ‘if’ but ‘when and how’ to deploy Gigabit broadband in order to meet consumer’s perceived ‘need for speed’ and maintain their competitive edge,” Nelson wrote.

But the greatest bottleneck to speed advances is spending money to pay for them. Verizon FiOS was one of the most extravagant network upgrades in years among large American telecom companies and the company was savaged by Wall Street for doing it. Although AT&T got less heat because its U-verse development costs were lower, most analysts still instinctively frown when a company proposes spending billions on network upgrades.

Customer demand for faster broadband is apparent as providers boost Internet speeds.

Customer demand for faster broadband is apparent as providers boost Internet speeds.

The advent of DOCSIS 3.1 — the next generation of cable broadband technology — suggests a win-win-win for Wall Street, cable operators, and consumers. No streets will have to be torn up, no new fiber cables will have to be laid. Most providers will be able to exponentially boost Internet speeds by reallocating bandwidth formerly reserved for analog cable television channels to broadband. The more available bandwidth reserved for broadband, the faster the speeds a company can offer.

Many industry observers predict the cable line will eventually be 100% devoted to broadband, over which telephone, television and Internet access can be delivered just as Verizon does today with FiOS and AT&T manages with its U-verse service.

The benefits of gigabit speeds are not limited to faster Internet browsing however.

Nelson notes communities and municipalities are now using gigabit broadband speeds as a competitive tool selling homes and attracting new businesses to an area. According to a study from the Fiber to the Home (FTTH) Council, communities with widely available gigabit access have experienced a positive impact on economic activity — to the tune of more than $1.4 billion in GDP growth. Those bypassed or stuck in a broadband backwater are now at risk of losing digital economy jobs as businesses and entrepreneurs look elsewhere.

The gigabit broadband gap will increasingly impact the local economies of communities left behind with inadequate Internet speeds as app developers, content producers, and other innovative startups leverage gigabit broadband to market new products and services.

The Pew Research Center envisioned what the next generation of gigabit killer apps might look like. Those communities stuck on the slow lane will likely not have access to an entire generation of applications that simply will never work over DSL.

But before celebrating the fact your local cable company promises to deliver the speed the new apps will need, there is a skunk that threatens to ruin your ultra high speed future: usage-based pricing and caps.

At the same time DOCSIS 3.1 will save the cable industry billions on infrastructure upgrade costs, the price for moving data across the next generation of super high-capacity broadband networks will be lower than ever before. But cable operators are not planning to pass their savings on to you. In fact, broadband prices are rising, along with efforts to apply arbitrary usage limits or charge usage-based pricing. Both are counter-intuitive and unjustified. It would be like charging for a bag of sand in the Sahara Desert or handing a ration book to shoreline residents with coupons allowing them one glass of water each from Lake Ontario.

skunkCox plans to limit its gigabit customers to 2TB of usage a month. AT&T U-verse with GigaPower has a (currently unenforced) limit of 1TB a month, while Suddenlink thinks 550GB is more than enough for its gigabit customers. Comcast is market testing 300GB usage caps in several cities but strangely has no usage cap on its usage-gobbling gigabit plan. Why cap the customers least-equipped to run up usage into the ionosphere while giving gigabit customers a free pass? It doesn’t make much sense.

But then usage caps have never made sense or been justified on wired broadband networks and are questionable on some wireless ones as well.

Stop the Cap! began fighting against usage caps and usage pricing in the summer of 2008 when Frontier Communications proposed to limit its DSL customers to an ‘ample’ 5GB of usage per month. That’s right — 5GB. We predicted then that usage caps would become a growing problem in the United States. With a comfortable duopoly, providers could easily ration Internet access with the flimsiest of excuses to boost profits. Here is what we told the Associated Press seven years ago:

“This isn’t really an issue that’s just going to be about Frontier,” said Phillip Dampier, a Rochester-based technology writer who is campaigning to get Frontier to back off its plans. “Virtually every broadband provider has been suddenly discovering that there’s this so-called ‘bandwidth crisis’ going on in the United States.”

That year, Frontier claimed most of its 559,300 broadband subscribers consumed less than 1.5 gigabytes per month, so 5GB was generous. Frontier CEO Maggie Wilderotter trotted out the same excuses companies like Cox and Suddenlink are still using today to justify these pricing schemes: “The growth of traffic means the company has to invest millions in its network and infrastructure, threatening its profitability.”

Just one year later, Frontier spent $5.3 billion to acquire Verizon landline customers in around two dozen states, so apparently Internet usage growth did not hurt them financially after all. Frankly, usage growth never does. As we told the AP in 2008, the costs of network equipment and connecting to the wider Internet are falling. It still is.

“If they continue to make the necessary investments … there’s no reason they can’t keep up” with increasing customer traffic, we said at the time.

We are happy to report we won our battle with Frontier Communications and today the company even markets the fact their broadband service comes without usage caps. In many of Frontier’s rural service areas, they are the only Internet Service Provider available. Imagine the impact a 5GB usage cap would have had on customers trying to run a home-based business, have kids using the Internet to complete homework assignments, or rely on the Internet for video entertainment.

So why do some providers still try to ration Internet usage? To make more money of course. When the public believes the phony tales of network costs and traffic growth, the duped masses open their wallets and pay even more for what is already overpriced broadband service. Just check this chart produced by the BBC, based on data from the Organization for Economic Co‑operation and Development. Value for money is an alien concept to U.S. providers:

_70717869_countries_with_high_speed_broadband

The usual method of combating pricing excess is robust competition. With a chasm-sized gap between fat profits and the real cost of the service, competitors usually lower the price to attract more customers. But the fewer competitors, the bigger the chance the marketplace will gravitate towards comfort-level pricing and avoid rocking the boat with a ruinous price war. It is one of the first principles of capitalism — charging what the market will bear. We’ve seen how well that works in the past 100+ years. Back in 2010, we found an uncomfortable similarity between broadband prices of today with the railroad pricing schemes of the 1800s. A handful of executives and shareholders reap the rewards of monopolistic pricing and pillage not only consumers but threaten local economies as well.

special reportThe abuses were so bad, Congress finally stepped in and authorized regulators to break up the railroad monopolies and regulate abusive pricing. We may be headed in the same direction with broadband. We do not advocate regulation for the sake of regulation. Competition is a much more efficient way to check abusive business practices. But where an effective monopoly or duopoly exists, competition alone will not help. Without consumer-conscious oversight, the forthcoming gigabit broadband revolution will be stalled by speed bumps and toll booths for the benefit of a few giant telecommunications corporations. That will allow other countries to once again leap ahead of the United States and Canada, just as they have done with Internet speeds, delivering superior service at a lower price.

China now ranks first in the world in terms of the total number of fiber to the home broadband subscribers. So far, it isn’t even close to the fastest broadband country because much of China still gets access to the Internet over DSL. The Chinese government considers that unacceptable. It sees the economic opportunities of widespread fiber broadband and has targeted the scrapping of every DSL Internet connection in favor of fiber optics by the end of 2017. As a result, with more than 200 million likely fiber customers, China will become the global leader in fiber infrastructure, fiber technology, and fiber development. What country will lose the most from that transition? The United States. Today, Corning produces 40% of the world’s optical fiber.

Global optical fiber capacity amounted to 13,000 tons in 2014, mainly concentrated in the United States, Japan and China (totaling as much as 85.2% of the world’s total), of which China already ranked first with a share of 39.8%. Besides a big producer of optical fiber, China is also a large consumer, demanding 6,639 tons in 2014, 60.9% of global demand. The figure is expected to increase to 7,144 tons in 2015. Before 2010, over 70% of China’s optical fiber was imported, primarily from the United States. This year, 72.6% of China’s optical fiber will be produced by Chinese companies, which are also exporting a growing amount of fiber around the world.

John Lively, principal analyst at LightCounting Market Research, predicts China could conquer the fiber market in just a few short years and become a global broadband leader, “exporting their broadband networking expertise and technology, just like it does with its energy and transportation programs.”

Meanwhile in the United States, customers will be arguing with Comcast about the accuracy of their usage meter in light of a 300GB usage cap and Frontier’s DSL customers will still be fighting to get speeds better than the 3-6Mbps they get today.

The Philippines: Free Market Broadband Paradise or Deregulated Duopolistic Hellhole?

special reportFans of the “hands-off” approach to broadband oversight finally have a country where they can see a deregulated free marketplace in action, where consumers theoretically pick the winners and losers and where demand governs the kinds of services consumers and businesses can get from their providers.

That country is the Philippines, which has taken the libertarian free market approach to Internet access in a dramatic leap away from the authoritarian Marcos era of the 1980s.

The Deregulation “Miracle”

Until 1995, the Philippines Long Distance Telephone Company (PLDT) maintained a 60-year plus government-sanctioned monopoly on telecommunications services. Its performance was less than compelling. Establishing landline service took up to 10 years on a lengthy waiting list. Getting a phone line was the first problem, making sure it worked consistently was another. Just over 10 years after the United States formally broke up AT&T and the Bell System, the government in Manila approved RA 7925 – the Public Telecommunications Policy Act of 1995, breaking PLDT’s monopoly and establishing a level playing ground for each of 11 regions across the country and its many islands in which private companies could compete with PLDT for customers.

philippinesTo attract investment and competition, the government declared all value-added services like Internet access deregulated and guaranteed the complete privatization of all government telecom facilities no later than 1998. It also initially limited the number of companies that could compete against PLDT in each region to two new entrants. The government felt that would be necessary to attract competitors that knew they would have to quickly invest millions, if not billions, to build telecom infrastructure in the Philippines. It would be hard to make a case for investment in a region where a half-dozen companies all engaged in a price war fighting for customers while stringing new telephone lines and building cell towers.

To prevent cherry-picking only the wealthiest areas of the country, the government declared its desire for a privately funded nationwide telecom network and used the 11 regions, combining urban and rural areas in each, to get it. Competitors were required to support at least 300,000 landlines and 400,000 cellular lines in each region. That assured new networks could not simply be built in urban areas, bypassing smaller communities. After building their networks, companies largely operated on their own in a mostly-free deregulated market, slightly overseen by the National Telecommunications Commission (NTC) — the Philippines equivalent of the FCC.

The early years of telecom deregulation seemed promising. PLDT, much like AT&T in the United States, kept the lion’s share of customers (67.24%) after deregulation took effect, but new competitors quickly captured one-third of the market. But with lax regulation and oversight, some of the Philippines’ most powerful families, many benefiting under years of the Marcos dictatorship, managed to gain influence in the newly competitive Philippines telecom business. In the United States, telecom competition meant a choice between Sprint, MCI, AT&T or others. In the Philippines, you dealt with one or two of nine powerful family owned conglomerates, each operating with a foreign-owned telecom partner. It would be like choosing between companies owned by the Rockefellers, the Astors, the Carnegies, or the Morgans.

pldtThe NTC remained more “hands-off” than the FCC, avoiding significant involvement in critical interconnection issues — how competing telephone companies handle calls from subscribers of a competing provider. That was last an issue in the United States in the early 1900s, where rare independent competitors to the rapidly consolidating Bell System faced a telecom giant that initially refused to handle calls from customers of other companies. American regulators eventually demanded interconnection policies that guaranteed customers could reach any other telephone customer, regardless of what company handled their service. In the Philippines, the NTC eventually mandated less-demanding access, allowing companies to charge long distance rates to reach customers of other companies. In the 1990s, it was not uncommon to find businesses maintaining at least two telephone lines with different companies to escape long distance expenses and stay accessible to all of their potential customers.

PLDT initially fought the opening of the marketplace but benefited handsomely from it once it took effect. The company got away with setting sky-high interconnection rates to connect calls from other smaller providers to its customers. It also made access to its network a minefield of bureaucracy and often required competitors to sign unfair revenue sharing agreements.

It is Cheaper to Buy Out the Competition Instead of Competing With It

competition-issues-in-philippine-telecommunications-sector-challenges-and-recommendations-3-638

(Image Courtesy: Mary Grace Mirandilla-Santos/LIRNEasia)

The investment community eventually balked at the cost of constructing competing telecommunications networks, especially after the dot.com crash in 2000, and a drumbeat for industry consolidation through mergers and acquisitions quickly grew too loud to ignore. Investors fumed over the amount of money being spent by providers to meet their service obligations in the 11 subdivided regions. Instead of building redundant or competing infrastructure, allowing competitors to merge would cut costs and enhance investor return. The NTC let the marketplace decide, as did the government, and it led to a frenzy of industry consolidation that ran far beyond what the FCC and American Justice Department would ever tolerate.

In 2011, the government backed a colossal merger that brought together the wireless networks of Pilipino Telephone Corporation, PLDT, and Smart under the PLDT brand. The three former competitors became one and controlled 66.3% of the Philippine’s wireless customers. The merger was comparable to allowing Verizon to buy out Sprint.

Additional mergers in response to the super-sized PLDT rapidly reduced the competitiveness of Philippine’s telecommunications marketplace to a duopoly. Just two companies — PLDT, Globe, and their respective house brands — dominate landline, DSL, cable, and wireless telecommunications service in the Philippines. The investment community celebrated the deal’s approval as a lucrative goldmine of future revenue gains from a less competitive market.

Philippine Broadband: Hey, It’s at Least Moderately Better Than Afghanistan

competition-issues-in-philippine-telecommunications-sector-challenges-and-recommendations-8-638

(Image courtesy: Mary Grace Mirandilla-Santos/LIRNEasia)

Broadband performance, under any measure other than financial success, has proved abysmal for Philippine consumers and businesses. The country’s broadband speeds are among the worst in the world, only beating Afghanistan in many speed tests. Look the other wayoversight led to a bribery scandal in 2007 that threatened to bring down the government. Officials exploring the development of a National Broadband Network were accused of soliciting kickbacks from Chinese equipment vendor ZTE, which would have been responsible for supplying equipment for the project. The government canceled the project as the scandal widened and some of the principals left the country or in at least one case were kidnapped.

Eight years later, broadband in the Philippines would be considered a North American nightmare. The free market approach has led to free-flowing profits and a profound lack of marketplace competition, with broadband ripoffs and broken promises rampant across the country.

Although both PLDT and Globe Telecom are spending large sums on infrastructure, much of it benefits their very profitable wireless networks and business customers. Despite the investments, residential customers are stuck with some of the world’s worst broadband speeds and performance.

An independent Quality of Service test revealed the bad news all around:

The findings of the Philippine QoSE tests were expected, but nevertheless still disappointing.

The best performing among the three ISPs delivered only 21% of actual versus advertised speed on average. This same ISP also offered at least 256kbps download speed (generally accepted definition of broadband) only 67% of the whole time it was tested, falling short of the required 80% service reliability.

The Broadband Commission defines the core concepts of broadband as an “always-on service” with high capacity “able to carry lots of data per second.” While there is no official definition of broadband locally, the Philippine Digital Strategy 2011-2016 defines broadband Internet service as 2Mbps download speed.

Finally, like the last nail in the coffin, Philippine ISPs performed the worst in terms of value for money when compared to select providers in South Asia and Southeast Asia. The highest value given by any of the three Philippine ISPs tested was a measly 22kbps per US dollar. This figure is too low when compared to similar mobile broadband ISPs that offer 173kbps per dollar in Jakarta, Indonesia and 445kbps per dollar in Colombo, Sri Lanka.

These results have huge implications on truth in advertising, consumer welfare, and the need for appropriate regulation.

My DSL Service is So Bad I Prefer 3GB Usage-Capped Slow Wireless Instead

senloren

Legarda

Home DSL broadband is so bad that customers have increasingly dropped service in favor of tightly managed wireless service. Companies report DSL customer losses over the past few years, with no end in sight.

The telecom regulator has generally just shrugged its shoulders at the situation, suggesting competition between equally poor providers will somehow resolve the problem. That view is applauded by service providers who claim the Internet is “just a value-added service” not essential to basic living needs. But consumer groups wonder why providers are allowed to make false advertising claims about the speed of their service with no repercussions. A range of position papers appealing to the government to create a meaningful minimum broadband speed have been introduced and some are being pushed by members of the Philippine Senate.

Senator Loren Legarda joined scores of other frustrated customers complaining about unreliable and expensive Internet in the country. In a 2014 hearing Legarda complained she had once again lost her DSL Internet connection in her office and her wireless connection was so slow it was unusable.

“As we speak now, there is no Internet connection in my office,” Legarda said. “I received a message this morning from my staff on my way here because I may be e-mailing, etc. And for someone whose deadline was yesterday, I always want things done fast and I’m sure many of you want that efficiency too to serve our people better.”

http://www.phillipdampier.com/video/ANC Poor Broadband Internet 5-14.flv

ANC aired this story about Sen. Legarda’s broadband problems and how Philippines’ providers oversell their networks back in 2014. (4:56)

We Oversold Our Networks So Sue Us, Except You Can’t

Providers blame the problem on oversold networks that attempt to manage too many paying customers on an inadequate network. In other words, they blame themselves with little fear any regulator will create problems for them.

Wireless service is no panacea either. Customers in the Philippines face draconian “fair use policies” on so-called “unlimited plans” that leave them throttled after 1GB of usage per day or 3GB of usage per month, whichever happens first. Providers suggest the policy is a benefit, promising them a better user experience. Besides, they suggest, even those that run into the speed throttle can still browse the Internet, albeit at as speed resembling dial-up:

Your internet speed will slow down if you use up 1GB of data for the day, or accumulate 3GB of data usage for the month.

If you hit the 1GB/day threshold, you’ll experience slower speed, but no worries because as we mentioned above, you can still surf! You’ll move up to normal speed at midnight. If you hit the 3GB/month threshold, your speed will move up to normal speed on the next calendar month (not based on bill cycle).

With a stifling usage allowance, shouldn't providers in the Philippines be offering better speeds?

With a stifling usage allowance, shouldn’t providers in the Philippines be offering better speeds?

Say Hello to the “Promo Pack” – Your Net Neutrality Nightmare Come True

Remember the scary ads from Net Neutrality proponents promising a future of Internet add-ons that would charge you to surf theme-based websites without facing network slowdowns or stingy usage caps if Net Neutrality protections were not forthcoming? In the Philippines, the nightmare came true. Mobile providers sell added cost “promo packs” that bundle extra throttle-free usage with theme-based apps. A package with Spotify runs about $6.50US a month and includes 1GB of usage. Anyone can buy a Spotify premium membership in the Philippines for around $4.37US without the add-on. But even worse are app-based promo packs that bundle free-to-download-and-use apps in the U.S. with special designated usage allowances.

Want to use Google Maps on your wireless provider? A “promo pack” including it costs around $2.17 a month and includes 300MB of usage. That money doesn’t go to Google — it stays in the pocket of the provider – Globe Networks. Twitter will set you back $4.37US a month and includes 600MB of usage, which seems odd for a short message service when contrasted with an identically-priced promo pack for Facebook, that needs the extra usage allowance more than Twitter likely would. But then they also get you for Facebook Messenger, which costs an extra $2.17US per month and comes with its own usage allowance — 300MB.

"What If" actually "Is" in the Philippines.

“What If” actually “Is” in the Philippines.

Globe-Telecom3While segmenting out popular mobile apps for special treatment, Philippine mobile providers have also taken Verizon and AT&T’s lead, pushing plans like myLIFESTYLE that bundle unlimited text and phone calls with expensive data plans.

Lifestyle Promo Packs:

Lifestyle Bundle

Price (Philippine Peso)

Consumable MBs/GBs

Description

Spotify

299

1GB

Premium membership to Spotify, with 1GB data
Work

299

1GB

Access to Gmail, Yahoo Mail, Evernote, + 10GB Globe Cloud Storage
Explore Bundle

99

300MB

Access to Agoda, Trip Advisor, Cebu Pacific, PAL
Navigation Bundle

99

300MB

Access to Waze, Grab Taxi, Google Maps, MMDA app, Accuweather
Shopping Bundle

299

1GB

Access to Zalora, Amazon, Ebay, OLX, Ayosdito
Facebook

199

600MB

Access to Facebook
Twitter

199

600MB

Access to Twitter
Viber

99

300MB

Access to Viber
FB Messenger

99

300MB

Access to FB Messenger
Chat Bundle

299

1GB

Access to Viber, Whats App, FB Messenger, Kakao Talk, Line, WeChat
Photo Bundle

299

1GB

Access to Instagram, Photogrid, Photorepost, Instasize

Extra Add-ons:

Basic Price Description
Consumable 100 Stackable Amounts of P100 denomination consumables
Unli Duo 299 Unlimited Calls to Landline/duo
Unli Txt All 299 Unlimited Texts to other networks
Unli iSMS 399 Unlimitend International SMS to one intl. number
Unli IDD 999 Unli IDD calls to one intl. number
DUO International 499 Unlimited calls to US landlines

The Philippines Should Regulate Under the American Example vs. The Philippines Should Not Regulate Under the American Example (It’s Obama’s Fault)

Lincoln_MemorialProviders in the Philippines have learned a lot from America’s telecommunications lobbyists. Their advocacy campaigns revolve around the theme that the United States has the best wireless networks in the world, developed under a largely hands-off regulatory philosophy that the Philippine government should follow.

The government and regulators largely acquiesced to that campaign until this year, when that idea came back to haunt providers. Earlier this year, the Obama Administration and the FCC began taking a more hands-on approach to telecom regulation after recognizing the marketplace is not as competitive as providers suggest. Strong Net Neutrality enforcement, limits on mergers and acquisitions and strong signals marketplace abuses would no longer be tolerated are now being pushed in Washington by the White House and the Federal Communications Commission. Providers in the Philippines no longer advocate following the American model, but it may now be too late.

obamaThe NTC is close to issuing new minimum broadband speed and performance standards and is now listening to Filipino consumers that launched Democracy.net.ph to fight usage caps in the Philippines back in 2011. The NTC may soon require providers advertise average speeds and performance, not “up to” speeds nobody actually receives. Those getting poor service would be entitled to refunds or rebates.

That could be the first step towards a more activist NTC that may have learned the lesson that listening to the broken promises of better service through deregulation has resulted in some of the worst broadband performance the world has to offer. The Philippines took the advocacy arguments of the deregulation crowd and doubled down, not only allowing providers to lie and distort in their advertising, but also permitting massive industry consolidation reducing the choice for most Filipinos to just two providers for almost all telecommunications services. The government looked the other way as corruption turned into a scandal and today it is left with two very powerful conglomerates that deliver third world Internet access while pocketing the generous proceeds.

A Better Way to Better Broadband

A deregulated, free market only works where healthy competition exists. Too few players always leads to reduced innovation, poorer service at higher prices, and a corporate fortress deterring would-be competitors that are unlikely to be able to survive in a fair, competitive fight. For the Philippines (and by extension the United States) to fully benefit from healthy competition, large conglomerates must be broken up and further mergers must be prevented above all else. Until sufficient competition can self-regulate the marketplace, strong oversight is necessary to protect consumers from the abuses that always come from monopolies and duopolies. Charging wireless customers for free apps and suggesting 3GB of usage is equal to unlimited broadband are two places to start cracking down, quickly followed by an investigation into where investment dollars are being spent and for whose benefit. It seems like customers are not reaping any rewards in return for high-priced service.

The Philippine government should also continue exploring a National Broadband Network strategy that puts the country’s broadband needs above the profit motivations of the current duopoly. Governments build roads and bridges, airports and railways. Broadband is another infrastructure project that needs to be developed in the public interest. If private companies want to be a part of that effort, that is wonderful. But they should not be dictating the terms or holding the country back from what may be the biggest scandal of all — broadband that barely performs better than what the Taliban can get these days in Helmand province.

Newly Independent Cable One Plans Broadband Makeover With Speed Upgrades

cable oneNewly independent Cable One will reduce its emphasis on cable television and turn its time, attention, and capital towards improving broadband service for its 690,000 largely rural customers in 19 states.

Cable One was spun off from Graham Holdings on July 1 and is not likely to stay independent for long before it is acquired by another cable operator, most likely Patrick Drahi’s Altice, S.A. — which recently acquired Suddenlink. But in the meantime, Cable One is attempting to persuade investors it is remaking itself into a broadband company, de-emphasizing the traditional cable television package in favor of dedicating more bandwidth for faster broadband speeds.

“Our standard broadband offering for our residential customers since 2011 has been a download speed of 50Mbps, which is at the high-end of the range of standard residential offerings even today in our markets,” the company reported in a statement. “Our enhanced broadband offering for our residential customers is currently a download speed of 75Mbps, which we expect to raise to 100Mbps by the end of 2015.”

Cable One primarily serves small cities and towns in the central and northwestern United States.

Cable One primarily serves small cities and towns in the central and northwestern United States.

In several markets, 100Mbps speed is already available and regular pricing has been simplified to $1 per megabit of service: 50Mbps for $50, 75Mbps for $75, or 100Mbps for $100 a month.

To protect its broadband business model, which carries prices traditionally higher than larger operators, Cable One will stay focused on largely uncompetitive markets where it faces token DSL broadband competition from companies like Frontier Communications, CenturyLink, and Windstream. More than 75 percent of its customers are located in Mississippi, Idaho, Oklahoma, Texas and Arizona, many served by these three telephone companies.

Cable One signaled it will hold the line on cable programming costs as well. In April 2014, the company dropped 15 Viacom networks, including MTV, VH1, Comedy Central, Nickelodeon and others over contract renewal prices it claimed were too high. The cable TV package has continued without the Viacom networks for more than a year, resulting in the loss of more than 20% of its cable TV customers. More than 100,000 homes have dropped Cable One video service for another provider, but ironically that actually helped Cable One increase its cash flow by more than 11%, because it no longer has to pay programming fees on behalf of the lost customers.

On the bright side, Cable One executives discovered many of its former TV customers have stayed with Cable One for Internet service because the competition either does not offer broadband or generally provides DSL at speeds under 10Mbps. Company officials have emphasized this point to investors, suggesting broadband is a true money-maker and television can safely take second chair without sabotaging profits.

“We certainly have some sympathy for the notion that a broadband-only cable operator might be more profitable,” wrote analyst Craig Moffett in an investor note this month. “But there are some critical holes in the Cable One story. Does the company truly believe that all costs are variable such that cutting video will bring endless margin expansion? Are Cable One’s new shareholders really better off for having played hardball with Viacom?”

Moffett does not believe so because he is convinced Cable One’s independence will be short-lived.

“We all know the consensus opinion is that someone will buy Cable One,” Moffett wrote. “But the above questions still matter. Any potential acquirer would still place value on a video business, or pay less for the fact that Cable One has less of one.”

But as long as rural telephone companies barely compete for broadband customers, Cable One’s broadband performance will deliver them a de facto broadband monopoly in their largely rural service areas. That gives the cable company, or its next owner, plenty of room for rate hikes.

Windstream Tells Its DSL Customer in South Carolina to Consider Satellite Internet Instead

windstream

On the outside looking in.

Windstream’s DSL service in parts of Inman, S.C. is so bad, the company has recommended some DSL customers consider signing up for a competitor’s satellite-based Internet service instead.

In a remarkable response to a complaint filed with the Federal Communications Commission by a Windstream customer, Mollie Chewning, an executive customer relations representative for Windstream, suggested no broadband upgrades were likely before 2016 and beyond a $10 monthly discount for a year, customers in Inman will just have to live with DSL speeds that are often less than 1Mbps or consider switching to satellite-delivered Internet from another company.

“Windstream acknowledges some Iman [sic], SC have been experiencing high-speed Internet issues,” Chewning wrote Sharon Bowers, the department division chief of the FCC’s Consumer Information Bureau. “This is a result of the tremendous growth in Internet usage over the past few years as well as the challenging economics of serving rural and remote areas with broadband. Unfortunately, our records indicate Mr. [redacted] service address will likely not benefit from any of our scheduled upgrades in 2015. It is possible some upgrades may be explored in 2016 could assist some customers in Inman via Connect America funding, but Windstream is still finalizing upgrade plans for next year.”

Speed test results

Speed test results

James Corley, the victim of Windstream’s poor-performing DSL, launched a blog to get Windstream moving on upgrades or entice area cable operator Charter Communications to wire his neighborhood for service.

Inman, S.C.

Inman, S.C.

“I am a resident of a small subdivision […] and for nearly a decade, we have been forced to rely on Windstream Communications’ disgraceful DSL internet and telephone services,” Corley writes. “The company’s representatives have been promising us for years that we would be upgraded to faster speeds but the promised upgrades have repeatedly failed to materialize and even though I cannot say for sure where Windstream’s priorities lie, it certainly isn’t with their customers.”

Corley is not asking for much. He’s subscribed to a basic 3Mbps service plan. Windstream does not come close to delivering even those speeds, however, with speed test results showing performance ranging usually below 1Mbps all the way down to 40kbps — less than dial-up.

“Given existing high-speed Internet issues, Mr. [redacted] will receive a $10 discount, which will appear on his account monthly through July 2016,” Chewning wrote. “If Mr. [redacted] finds this information unacceptable, he may want to explore alternate service options such as Internet via satellite.”

Corley has elected to pursue Charter Communications instead. It can offer considerably faster speeds than Windstream or satellite providers at a much lower cost. But Charter has thus far refused to wire Corley’s neighborhood for free. Charter wants at least $7,000 to extend service to the subdivision, after which it will start construction and deliver service within 45 days. Charter has no problem spending $55 billion to acquire Time Warner Cable but is unwilling to spend $7,000 to attract most, if not all 16 residents on the customer’s street.

Windstream appears to be more interested waiting for telephone ratepayers across the country to subsidize incremental improvements in its slow speed DSL service through the Connect America Fund, which has a poor record subsidizing cable operators to bring far superior broadband service to customers like those in Inman.

Until the Windstream customer and his neighbors manage to scrape together $7,000, or Charter extends service at no charge in the name of good public relations, residents of Inman (and beyond) are stuck with Windstream broadband that does not come close to broadband.windstream-fcc-response-1

Australia’s Netflix Anxiety Attack Exposes Weakness of Broadband Upgrades on the Cheap

netflix-ausWith video streaming now accounting for at least 64 percent of all Internet traffic, it should have come as no surprise to Australia’s ISPs that as data caps are eased and popular online video services like Netflix arrive, traffic spikes would occur on their networks as well.

It surprised them anyway.

Telecom analyst Paul Budde told the WAToday newspaper “video streaming requires our ISPs to have robust infrastructure, and to use it in more sophisticated ways, and that largely caught Australia off guard. I think it’s fair to say everybody underestimated the effect of Netflix.”

Not everybody.

Australia’s National Broadband Network (NBN) was originally envisioned by the then Labor government as a fiber-to-the-home network capable of enormous capacity and gigabit speed. Prime Minister Kevin Rudd proposed buying out the country’s existing copper phone wire infrastructure from telecom giant Telstra to scrap it. Instead of DSL and a limited number of cable broadband providers, the national fiber to the home network would provide service to the majority of Australians, with exceptionally rural residents served by wireless and/or satellite.

Conservative critics slammed the NBN as a fiscal “white elephant” that would duplicate or overrun private investment and saddle taxpayers with the construction costs. In the run up to the federal election of 2013, critics proposed to scale back the NBN as a provider of last resort that would only offer service where others did not. Others suggested a scaled-down network would be more fiscally responsible. After the votes were counted, a Coalition government was formed, run by the conservative Liberal and National parties. Within weeks, they downsized the NBN and replaced most of its governing board.

Netflix's launch increased traffic passing through Australia's ISPs by 50 percent, from 30 to 50Gbps in just one week, and growing.

Netflix’s launch increased traffic passing through Australia’s ISPs by 50 percent, from 30 to 50Gbps in just one week, and growing.

Plans for a national fiber to the home network similar to Verizon FiOS were dropped, replaced with fiber to the neighborhood technology somewhat comparable to AT&T U-verse or Bell Fibe. Instead of gigabit fiber, Australians would rely on a motley mix of technologies including wireless broadband, DSL, VDSL, cable, and in areas where the work had begun under the earlier government, a limited amount of fiber.

In hindsight, the penny wise-pound foolish approach to broadband upgrades has begun to haunt the conservatives, who have already broken several commitments regarding the promised performance of the downsized network and are likely to break several more, forcing more costly upgrades that would have been unnecessary if the government remained focused on an all-fiber network.

Communications Minister Malcolm Turnbull has admitted the new NBN will not be able to deliver 25Mbps service to all Australians by 2016. Only 43 percent of the country will get that speed, partly because of technical compromises engineers have been forced to make to accommodate the legacy copper network that isn’t going anywhere.

Think Broadband called the fiber to the neighborhood NBN “a farce” that has led to lowest common denominator broadband. A need to co-exist with ADSL2+ technology already offered to Australians has constrained any speed benefits available from offering faster DSL variants like VDSL2. Customers qualified for VDSL2 broadband speeds will be limited to a maximum of 12Mbps to avoid interfering with existing ADSL2+ services already deployed to other customers. Only multi-dwelling units escape this limitation because those buildings typically host their own DSLAM, which provides service to each customer inside the building. In those cases, customers are limited to a maximum of 25Mbps, not exactly broadband nirvana. The NBN is predicting it will take at least a year to take the bandwidth limits off VDSL2.

nbnThe need for further upgrades as a result of traffic growth breaks another firm commitment from the conservative government.

NBN executive chairman Ziggy Switkowski told reporters in 2013 that technology used in the NBN would not need to be upgraded for at least five years after construction.

“The NBN would not need to upgraded sooner than five years of construction of the first access technology,” Switkowski said. “It is economically more efficient to upgrade over time rather than build a future-proof technology in a field where fast-changing technology is the norm.”

Since Switkowski made that statement two years ago, other providers around the world have gravitated towards fiber optics, believing its capacity and upgradability makes it the best future-proof technology available to handle the kind of traffic growth also now being seen in Australia. At the start of 2015, 315,000 Australians were signed up for online video services. Today, more than two million subscribe, with Netflix adding more than a million customers in less than four months after it launched down under.

Many ISPs offer larger data caps or remove them altogether for “preferred partner” streaming services like Netflix. With usage caps in place, some customers would have used up an entire month’s allowance after just one night watching Netflix.

But the online viewing has created problems for several ISPs, especially during peak usage times. iiNet reports up to 25% of all its network traffic now comes from Netflix. As a result iiNet is accelerating network upgrades.

Customers still reliant on the NBN’s partial copper network are also reporting slowdowns, especially in the evening. The NBN will have to upgrade its backbone connection as well as the last mile connection it maintains with customers who often share access through a DSLAM. The more customers use their connections for Netflix, the greater the likelihood of congestion slowdowns until capacity upgrades are completed.

Hackett

Hackett

Optus worries its customers have extended Internet peak time usage by almost 90 minutes each night as they watch online streaming instead of free-to-air TV. Telstra adds it also faces a strain from “well over half” of the traffic on its network now consisting of video content.

This may explain why Internet entrepreneur and NBN co-board director Simon Hackett wishes the fiber to the neighborhood technology would disappear and be replaced by true fiber to the home service.

“It sucks,” Hackett told an audience at the Rewind/Fast Forward event in Sydney in March, referring to the fiber to the neighborhood technology. His mission is to try and make the government’s priority for cheaper broadband infrastructure “as least worse as possible.”

“Fiber-to the-[neighborhood] is the least-exciting part of the current policy, no arguments,” he added. “If I could wave a wand, it’s the bit I’d erase.”

Another cost of the Coalition government’s slimmed-down Internet expansion is already clear.

According to Netflix’s own ISP speed index, which ranks providers on the quality of streaming Netflix on their networks, Australia lags well behind the top speeds of dozens of other developed nations, including Mexico and Argentina.

But even those anemic speeds come at a high cost to ISPs, charged a connectivity virtual circuit charge (CVC) by NBN costing $12.91 per 1Mbps. The fee is designed to help recoup network construction and upgrade costs. But the fee was set before the online video wave reached Australia. iiNet boss David Buckingham worries he will have to charge customers a “Netflix tax” of $19.18 a month for moderate Netflix viewing to recoup enough money to pay the CVC fees. If a viewer wants to watch a 4K video stream, Buckingham predicts ISPs will have to place a surcharge of $44.26 a month on occasional 4K viewing, if customers can even sustain such a video on NBN’s often anemic broadband connections.

Some experts fear costs will continue to rise as the government eventually recognizes its budget-priced NBN is saddled with obsolete technology that will need expensive upgrades sooner than most think.

Instead of staying focused on fiber optics, technology the former Rudd government suggested would offer Australians gigabit speeds almost immediately and would have plenty of capacity for traffic, the conservative, constrained, “more affordable” NBN is leaving many customers with no better than 12Mbps with a future promise to deliver 50Mbps some day. There is little value for money from that.

Thurman, N.Y. White Space Rural Broadband Wins “Most Innovative Project Award”

rural connectOne of the few “white space” wireless broadband projects deployed in the United States to deliver broadband to rural residents has won the “Most Innovative Project” award, presented during the 2015 New York State Broadband Summit.

The collaborative project between the Town of Thurman, Rainmaker Network Services and Frontier Communications to offer high-speed Internet access to around 65 residents is seen as a successful private-public collaboration to address rural broadband issues in sparsely populated areas.

Frontier Communications provided the trunk line for the service and a $200,000 state grant helped acquire the infrastructure to power the wireless network, which works over unoccupied UHF television channels. The 12 currently subscribing households pay $50 a month for broadband, plus a $292 equipment fee when they sign up. Plans to reach more households have been delayed by a handful of town board members opposed to the project and residents who refuse to grant easements to place equipment on private property. The project had to be re-engineered to workaround some of these difficulties.

PrintDespite the delays, there are estimates another 40-50 households will be able to get the service by the end of summer.

Customers love the service, which is faster than traditional Wireless ISP technology, and comes without speed throttling or data caps.

“By implementing an innovative white space network, Thurman found a way to provide Internet service to a rural area without the need for a large amount of costly infrastructure,” said David Salway, executive director of the New York Broadband Program Office. “Where there was once only dial-up and satellite service, Thurman citizens will have reliable high-speed Internet at affordable rates.”

 http://www.phillipdampier.com/video/Carlson Wireless Technologies Rural Connect 3-2015.mp4

Carlson Wireless Technologies explains how next generation white space wireless broadband can be a cost-effective solution to the digital divide. (3:41)

Another Reminder Wireless ISPs are Not a Good Choice if a Fiber Alternative is Possible

Rationing Your Internet Experience: Stick to e-mail and web pages.

Rationing Your Internet Experience: Stick to e-mail and web pages.

This week’s news that the alleged owner of a Wireless ISP serving parts of New England may have fled the country to avoid an investigation by the Securities and Exchange Commission on an unrelated digital currency matter has left about 1,000 Vermont customers of GAW Wireless with no certain future for their Internet Service Provider.

As the “Geniuses At Work” came under pressure from public accusations the company was running a scam on digital currency investors, so went the performance of GAW Wireless. In February, a two-week service outage left many customers without telephone and Internet service. This month, e-mail accounts stopped working for some and nobody appears to be answering the firm’s customer service line. Even Vermont’s Attorney General cannot find the owner.

While Wireless ISPs (WISPs) can be a good option for North America’s unserved rural communities, they are not always the best choice, especially as customers continue to gravitate towards high bandwidth applications like Netflix.

Some rural WISPs have kept up with customer demand and continue to offer good service. Others have educated customers about being a good steward of a limited resource by showing courtesy to other customers by self-limiting heavy traffic applications to off-peak hours.

But other providers have chosen usage-discouraging data caps or usage-based billing to cover up for their inadequate infrastructure investment. In Nova Scotia, Eastlink’s new 15GB monthly usage cap on rural customers is nothing short of Internet rationing, completely ignorant of the fact most customers have moved beyond the Internet applications Eastlink envisioned them using when it built its network in 2006. Nearly a decade later, it is ridiculous to suggest customers should be happy continuing to pay almost $50 a month for a 1.5Mbps connection designed for e-mail, basic web browsing, and occasional dabbling into downloads, music, and video.

Come for the view but don't stay for the broadband.

Come for the view but don’t stay for the wireless broadband.

Some angry customers suspect Eastlink is simply being greedy. We believe it is more likely Eastlink’s existing wireless network is no longer adequate for the needs of Nova Scotians (or practically anybody else in 2015). The evidence that congestion is the real problem was supplied by customers who have noticed the network’s performance has slowed over the last few years. That is a sign the network is either oversold — too many customers trying to share the same bandwidth limited resource — or has become congested because of the growth of Internet traffic generally. It might even be both.

Implementing draconian usage caps only alienates customers and suggests Eastlink wants to collect as much revenue as it can from a resource that should either be vastly upgraded or retired in favor of superior technology. We have not seen anything from Eastlink that suggests major upgrades are on the way. In fact, the only conclusion we can make from Eastlink’s public comments is they think equal access to an inadequate resource is fairer than actually upgrading it.

Eastlink claims nobody could have envisioned Internet traffic growth from the likes of Netflix. In fact, equipment manufacturers like 3Com and Cisco were issuing scare stories about Internet brownouts and future traffic exafloods since December, 1995 — the year before Eastlink planned its Nova Scotia wireless network. Smart network planners have kept up with demand, which has been made easier by technology improvements accompanying the increased traffic. A good ISP recognizes upgrades are continual and essential to keep up with customer needs. A bad ISP introduces a rationing usage cap and claims it is only trying to be fair to every customer.

Phillip "Fiber is Good for You" Dampier

Phillip “Fiber is Good for You” Dampier

Usage caps and usage-based billing have never been about “fairness.” We’ve seen all sorts of usage enforcement schemes imposed on customers since 2008 when Stop the Cap! was founded. In each instance, usage caps were only about the money. Eastlink customers will not see any rate decrease as a result of its rationing plan, giving users less value for their broadband dollar. If an Eastlink customer confines use of their high traffic applications to the overnight hours, when they would cause little or no congestion, they will still eat into their monthly usage allowance.

All the benefits of usage caps accrue to Eastlink, either by reducing traffic on its network and allowing the company to delay necessary upgrades, or by pocketing the inevitable overlimit fees, which may or may not go towards upgrades. In our experience, the case for spending capital on network upgrades has never depended on overlimit fees collected from subscribers squirreled away in a separate bank account.

This is why communities in Vermont, Nova Scotia and beyond should strongly consider investing in fiber optics for broadband delivery and consider wireless only for the least populated areas. A broadband project in rural western Massachusetts can offer a guide to resolving the ongoing problem of unserved or underserved communities ignored by commercial providers. Deprived of upgrades from Verizon and shunned by Comcast and Time Warner Cable, the residents of these towns continue to vote overwhelmingly in favor of fiber optics.

The WiredWest approach is a solid solution. The initiative secures bond authorizations from each participating town in a public vote backed by deposits of $49 per household, held in escrow to be later used to cover the first month of broadband service when the service launches. Each town must have at least a 40% buy-in from residents, providing strong evidence the project has a solid customer base, is financially viable, and can recover construction costs and pay off the bonds estimated at $100-120 million within a reasonable amount of time. The state legislature contributed an additional $40 million dedicated to last mile infrastructure — the cost to wire each home or business. (In contrast, Nova Scotia and the federal government spent $34 million subsidizing the Eastlink wireless network in 2007 that has not aged well. Fiber optics is infinitely upgradable.) By choosing fiber optics, instead of getting rationed, slow speed, or no Internet service, WiredWest towns will be able to subscribe to 25Mbps for $49 a month, 100Mbps service for $79, or 1,000Mbps for $109 a month
.

In comparison, Eastlink charges $46.95 a month for “up to” 1.5Mbps with a 15GB cap and GAW Wireless (when working) charges $39.95/mo for “up to 7Mbps.”

Uproar Over Eastlink’s 15GB Usage Limit Brings Call to Ban Data Caps in Rural Canada

EastlinkLogoA plan to place a 15GB monthly usage cap on Eastlink broadband service in rural Nova Scotia has led to calls to ban data caps, with a NDP Member of the Legislative Assembly of Nova Scotia leading the charge.

NDP MLA Sterling Belliveau is calling on the Liberal government to prohibit Eastlink from placing Internet data caps on rural broadband.

“This newly announced cap really sends us back to the 1990s when it comes to technology,” Belliveau said in a news release Tuesday. “The province paid $20 million to bring this service to rural communities, and as such, the Minister of Business needs to tell Eastlink this can’t stand.”

Belliveau’s office is being flooded with complaints from residents and business owners upset about Eastlink’s data cap, which includes a $2/GB overlimit fee, up to a maximum of $20.

“Only rural customers get penalized for using the Internet,” complained Angel Flanagan on Twitter. “We can’t have Netflix or YouTube. Eastlink, stop this cap and upgrade your services and give us better Internet. We don’t need to use it less.”

“I am so angry about the Internet capping,” said Emma Davis. “Eastlink you are out of your goddamn minds. Rural Nova Scotia is entering the Dark Ages.”

rural connect

Eastlink’s Rural Connect package is a wireless service, delivering speeds up to 1.5Mbps at a cost of $46.95 a month. The service is provided where wired providers are generally not available, including Annapolis, Hants, Digby, Yarmouth, Queens, Lunenburg, Shelburne and Kings counties. Eastlink says its new usage cap was designed to accommodate “intended usage like surfing the web, reading/sending emails, social media, e-commerce, accessing government services, etc. — and NOT video streaming, for which the service was not intended.”

Belliveau

Belliveau

Eastlink’s continued dependence on a low capacity wireless network platform has conflicted with the changing needs of Internet users, who increasingly use high bandwidth applications like streaming video that can quickly clog wireless ISP traffic.

When the service was designed, the popular video streaming service “Netflix was shipping DVDs by mail,” says Eastlink spokesperson Jill Laing.

The cap was implemented to “address Internet traffic, which we believe will help provide equal access to the service and deliver a better overall rural Internet experience for customers,” Laing wrote.

Eastlink says the average customer uses about 12GB of traffic, excluding video streaming. Setting a usage cap at 15GB should not be a problem for customers who stay off Netflix, argues the ISP.

“Those who are using the service as it was intended to be used should not be impacted by monthly usage,” she wrote.

The fact Eastlink labeled some traffic legitimate while video streaming was discouraged did not go over well with customers.

“Who made them Internet Gods when our provincial tax dollars helped finance their Internet project,” asks Al Fournier. “The very fact they would suggest a 15GB cap with a straight face in 2015 should be ringing alarm bells in Ottawa about the rural broadband crisis in Canada.”

nova scotiaFournier suspects Eastlink has not invested enough to keep up with a growing Internet because the service originally advertised itself as a way to listen to online music and watch video. But he also wonders if the data cap is an attempt to force the government to fund additional upgrades to get Eastlink to back down.

“This is why wireless ISPs suck for 21st century Internet,” Fournier argues. “They are incapable of keeping up with growing traffic and bandwidth needs and need to be retired in favor of fiber.”

But at least one wireless provider in Nova Scotia does not understand why Eastlink is making a fuss over data caps.

Cape Breton’s Seaside Wireless Communications offers Internet access in Antigonish, Cape Breton, Colchester, Cumberland, Guysborough, Inverness, Pictou, Richmond and Victoria counties, along with rural parts of Halifax County, and has no data caps.

“It is not even on our radar,” said Loran Tweedie, CEO of Seaside Wireless. “This is a differential we are proud of.”

Some Nova Scotians are also questioning why their Internet service is being capped while rural Eastlink customers in Newfoundland, Labrador and Ontario can continue to use the Internet cap-free, at least for now. Others are suspicious about the future of Eastlink’s maximum cap on overlimit fees, currently $20. Canadian providers have a history of raising the maximum cap, subjecting customers to greater fees.

“It’s hard to speak to what will happen over time. We’ll certainly evaluate where we’re at later in the fall,” said Laing.

Liberal provincial Business Minister Mark Furey said he was aware of Eastlink’s rural broadband data cap but only promised to monitor the situation for now.

Starting next month, Eastlink’s rural Internet packages will be capped at 15 gigabytes of usage per month. CBC Radio Nova Scotia’s “Information Morning” program speaks with Eastlink and Port Royal resident Gary Ewer about the impact the usage cap will have. (10:15)

You must remain on this page to hear the clip, or you can download the clip and listen later.

Approval of AT&T-DirecTV Merger Expected Next Week

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

WASHINGTON (Reuters) – AT&T Inc’s proposed $48.5 billion acquisition of DirecTV is expected to get U.S. regulatory approval as soon as next week, according to people familiar with the matter, a decision that will combine the country’s No. 2 wireless carrier with the largest satellite-TV provider.

The Department of Justice, which assesses whether deals violate antitrust law, has completed its review of the merger and is waiting on the Federal Communications Commission to wrap up its own, according to three people familiar with the matter.

The FCC, which reviews if deals are in public interest, is poised to approve the deal with conditions as early as next week, according to three other people familiar with the matter.

All the sources asked not to be named because they were not authorized to speak with the media. An AT&T spokeswoman and FCC spokesman declined comment. Justice Department representatives were not immediately available for comment.

AT&T’s merger with DirecTV, announced in May 2014, would create the country’s largest pay-TV company, giving DirecTV a broadband product and AT&T new avenues of growth beyond the maturing and increasingly competitive wireless service.

The deal has been expected to pass regulatory muster in contrast with the rival mega-merger between cable and Internet providers Comcast and Time Warner Cable, which was rejected in April largely over the combined companies’ reach into the broadband market.

The FCC and AT&T have been in negotiations over conditions for the merger for several weeks, the people said, adding that none of the conditions are controversial enough to break the deal.

Those conditions are expected to include assurances that both middle-class and low-income Americans have access to affordable high-speed Internet, including an offering of broadband subscriptions as a standalone service without a TV bundle, according to two of the people.

AT&T has earlier committed to expand access to broadband service in rural areas and to offer standalone Internet service at speeds of at least 6 Megabits per second to ensure consumers can access rival video services online, such as Netflix.

FCC officials are also considering ways to ensure that the conditions are properly enforced in the future, possibly through a third-party monitor, according to the two sources.

The FCC is also weighing how to ensure the merged companies abide by the so-called net neutrality rules, which regulate how Internet service providers manage traffic on their networks.

AT&T has promised to abide by net neutrality principles such as no-blocking of traffic, but is challenging in court the FCC’s newest net neutrality regulations that have expanded the agency’s authority over various deals between Internet providers and content companies.

FCC reviewers are weighing what net neutrality-related conditions to apply to the merger and how to address the possibility that the court throws out the latest rules, the two sources said.

Reported by: Alina Selyukh and Diane Bartz

Broadband Excitement Continues in Western Mass.; Big Support for WiredWest

fiber wiredwest

WiredWest is a public co-op seeking to deliver fiber to the home broadband across western Massachusetts.

Despite the dreary drizzle, fog, and unseasonably cold weather that has plagued the northeast since last weekend, 191 residents of New Salem, Mass. crowded into a basement for the town’s annual meeting Monday night, largely with one issue in mind: better broadband.

A reporter from The Recorder noted Moderator Calvin Layton was surprised by the overwhelming vote for fiber broadband — 189 for and only one apparently against.

The town clerk for New Salem typically counts around 60 heads at such meetings, but this night was different because the community was voting to spend $1.5 million to bring broadband to a town completely ignored by Comcast and Verizon. That fact has hurt area property values and has challenged residents and business owners alike. The town is fed up with inaction by the state’s dominant phone and cable company, which has done nothing to expand access in western Massachusetts.

“Our goal is to make this broadband available to every house, not just the places that are easy to wire,” said MaryEllen Kennedy, the chair of the town’s Broadband Committee.

New Salem isn’t alone.

Monterey passed its own bond authorization with a vote of 130 to 19, becoming the 10th consecutive town to vote in favor of bringing 21st century broadband to the region. The community of Beckett followed a day later.

Phillip "There are no broadband magic ponies" Dampier

Phillip “There are no broadband magic ponies” Dampier

Residents in 16 of the 17 towns asked so far to authorize the borrowing necessary to cover their community’s share of the fiber to the home project have usually done so in overwhelming majorities. But it has not been all good news. The town of Montgomery in Hampden County voted down paying its share by just two votes. Supporters claim low voter turnout may have done the project in, at least for the time being. A call for a new vote is underway.

Perhaps the most contentious debate over WiredWest continues in the small community of Hawley, where one activist has organized opposition for the project based on its cost to the community of 347. Hawley is in the difficult position of being a small community spread out across a lot of hills and hollows.  The cost for Hawley to participate in the fiber to the home project would be around $1 million, a figure many residents decided was out of their price range. Participation in WiredWest was shot down in a recent vote and the repercussions continue to this day in the opinion pages of The Recorder as residents fire back and forth at each other, sometimes with strident personal comments.

While easy to vote down participation in WiredWest, finding an alternative for Hawley has proved difficult.

Kirby “Lark” Thwing, a member of both the town finance and communications committees, is trying to find the cheaper broadband solution advocated by Hussain Hamdan, who has led the charge against WiredWest’s fiber to the home service in Hawley.

Thwing has run headfirst into what Stop the Cap! feared he would find — the rosy budget-minded alternatives suggested as tantalizingly within reach simply are not and come at a higher price tag than one might think.

Installing a Wi-Fi tower to bring wireless Internet access to a resort park.

Installing a Wi-Fi tower to bring wireless Internet access to a resort park.

Thwing is looking at a hybrid fiber/wireless solution involving a fiber trunk line run down two well-populated roads that could support fiber service for about half the homes in Hawley and lead to at least two large wireless towers that would reach most of the rest of town. He’s also hoping Hawley would still qualify to receive its $520,000 share of broadband grant money from the Massachusetts Broadband Institute to help cover the alternative project’s costs.

If Hawley can use that money, Thwing predicts it will cover much of the construction cost of the fiber trunk line. After that, each homeowner would be expected to pay to bring fiber from the trunk line to their home, definitely not a do-it-yourself project that will cost at least several hundred dollars, not counting the cost of any inside wiring and a network interface device attached to each participating home. Residents should also expect to spend another $100 on indoor electronics including a receiver and optional router to connect broadband to their home computer and other devices.

But the expenses don’t stop there.

Thwing also has to consider the cost of the wireless towers and provisioning a wireless service to Hawley residents not immediately adjacent to the fiber trunk line. He will be asking residents if they are willing to pay an extra $25-50 a month ($300-600 a year) to pay down the debt service on the town’s two proposed wireless towers. It isn’t known if that fee would include the price of the Internet service or just the infrastructure itself.

As Thwing himself recognizes, if the total cost for the alternative approaches the $1 million the town already rejected spending on fiber to the home service for everyone, it leaves Hawley no better off.

As Stop the Cap! reported last month, we believe Hawley will soon discover the costs of the alternatives Mr. Hamdan has suggested are greater than he suspects and do not include the cost of service, billing and support. Fiber to the home remains the best solution for Hawley and the rest of a region broadband forgot. Other towns that want to believe a cheaper alternative is out there waiting to be discovered should realize if such a solution did exist, private companies would have already jumped in to offer the service. They haven’t.

At the same time, we cannot ignore there are small communities in western Massachusetts that will find it a real burden to pay the infrastructure costs of a fiber network when there are fewer residents across wide distances to share the costs.

That is why it is critical for the Federal Communications Commission to expand rural broadband funding opportunities to subsidize the cost of constructing rural broadband services in communities like Hawley.

At the very least, state officials should consider creative solutions that either spread the cost of network construction out over a longer term or further subsidizing difficult to reach areas.

There is strong evidence voters across western Massachusetts are not looking for a government handout and have more than stepped up to pay their fair share to guarantee their digital future, but some challenges can be insurmountable without the kind of help the FCC already gives to private phone companies that spend the money on delivering dismally slow DSL service. Western Massachusetts has demonstrated it can get a bigger bang for the buck with fiber to the home service — a far better use of Connect America Funds than spending millions to bring 3Mbps DSL to the rural masses.

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  • SmilingBob: Ha ha, one of the best stories of the year here. "The two best ways to protect your pets from exposure to robust cell phone signals: 1) Become a Spri...
  • Zach: What are you guys writing to get the credits back? I'm in Gainesville, GA and with the kids watching Sesame Street and Netflix and my design/photograp...
  • Phillip Dampier: I agree. We successfully fought off usage caps with a concentrated campaign directed at both Frontier Communications and Time Warner Cable. Both compa...
  • Phillip Dampier: Just a side note for information purposes: AT&T only enforces its usage caps on DSL customers. To date, I know of no one actually penalized for exceed...
  • Phillip Dampier: As John said, the Xfinity Wi-Fi service does not count towards your cap when someone else is logged into it. Comcast's Network Gateway puts out mu...
  • Tim: I'm aware it's not supposed to count toward the device owner's cap, but it sometimes counts toward the cap for both the signed-in user AND the device ...
  • Paul: I am also a Comcast customer in the Atlanta area of Lawrenceville, about 25 miles from ATL. These data caps are such a nuisance and we usually get hit...
  • John: The Wifi Home Hotspot doesn't count toward the data usage of the customer renting the equipment, but to that of the guest user (they have to sign in t...
  • Glenn Hull: $299.99 per month for 2GB Speed. Thank goodness there are no data caps! Way to innovate Comcast! #comcastcares...
  • AC: I have basic internet with them. I followed instructions for both twitter and Facebook and no response. That of course is what I suspected would happe...
  • Tim: Hi Kelly, I would like to inform you that Comcast has a promotion called "Xfinity WiFi." Supposedly you can deactivate it on their website but the ...
  • AC: My curiosity would be in Russia's actual FTTH compared to the United States actual figures. Since the oligopolies always use the FTTPR numbers as "FT...

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