Wireless Industry: We’re running out of spectrum!
Wireless Industry: We’ve got plenty to room for unlimited ESPN!

America is on the verge of a wireless traffic data jam so bad, it could bring America to its knees.

Or not.

Stop the Cap! notices with some interest that while wireless carriers continue to sound the alarm about a spectrum crisis so serious it necessitates further compressing the UHF television dial and forces other spectrum users to become closer neighbors, the same giant phone companies warning of impending doom are negotiating with online video producers to offer customers “toll-free,” all-you-cat-eat streaming video of major sports events that won’t count against your usage allowance.

ESPN is in talks with at least one major carrier (AT&T or Verizon Wireless) to subsidize some of the costs of its streamed video content so that customers can watch as much as they want without running into a provider’s usage limit. Both Verizon and AT&T have signaled their interest in allowing content producers to pay for subscribers’ data usage. In fact, they don’t seem to care who pays for the enormous bandwidth consumed by streaming video, so long as someone does.

At a recent investment bank conference Verizon Wireless chief executive Dan Mead explained the next chapter in monetizing data usage will allow the company to rake in more revenue from third parties instead of customers already struggling with high wireless bills.

“We are actively exploring those opportunities and looking at every way to bring value to our customers,” said Mead.

Content producers are increasingly frustrated with the stingy caps on offer at AT&T and Verizon Wireless because customers stop accessing that content once they near their monthly usage limit. One large provider admitted to ESPN that “significant numbers” of customers are already reaching their cap before the end of their billing cycle, after which their online usage plummets to limit the sting of overlimit charges.

Offering “toll-free” data could dramatically increase the use of high bandwidth applications and increase profits at wireless providers based on new fees they could collect from content producers. Customers would still be subject to usage limits for all non-preferred content, a clear violation of Net Neutrality principles.

The buffet is open.

But in case you forgot, wireless carriers won exemption from Net Neutrality, arguing their networks lack the capacity to sustain a Net Neutral Internet experience. These same companies claim without more frequencies to handle the massive, potentially unsustainable amount of wireless traffic, the wireless data apocalypse could be at hand in just a few years. It was also the most-cited reason AT&T and Verizon discontinued their unlimited use data plans.

But unlimiting ESPN video? No problem.

In January 2010, Verizon Wireless was singing a very different tune to the FCC about the need to control and manage high bandwidth applications like the “toll-free” streaming video service ESPN proposes (underlining ours):

Wireless broadband services face technological and operational constraints arising from the need to manage spectrum sharing by a dynamically varying number of mobile users at any time. Thus, unlike, for example, cable broadband networks, where a known and relatively fixed number of subscribers share capacity in a given area, the capacity demand at any given cell site is much more variable as the number and mix of subscribers constantly change in sometimes highly unpredictable ways.

Are wireless carriers now part of the problem?

For example, as a subscriber using a high-bandwidth application such as streaming video moves from range of one cell site to another, the network must immediately provide the needed capacity for that subscriber, while not disrupting other subscribers using that same cell site. Of course, the problem is magnified many times over as multiple subscribers can be moving in and out of range of a cell site at any given moment. Moreover, the available bandwidth can fluctuate due to variations in radio frequency signal strength and quality, which can be affected by changing factors such as weather, traffic, speed, and the nearby presence of interfering devices (e.g., wireless microphones).

These problems compound those resulting from limited spectrum. As the Commission has repeatedly recognized in proclaiming an upcoming spectrum crisis, “as wireless is increasingly used as a platform for broadband communications services, the demand for spectrum bandwidth will likely continue to increase significantly, and spectrum availability may become critical to ensuring further innovation.”

A wireless carrier cannot readily increase capacity once it has exhausted its spectrum capacity. Thus, wireless broadband providers are left to acquire additional spectrum (to the extent available) or take measures that use their existing spectrum as efficiently as possible, which they do through a combination of investing in additional cell sites and network management practices that optimize network usage and address congestion so as to provide consumers with the quality of service they expect.

Regulators need to ask why wireless companies are telling the FCC there is a bandwidth crisis of epic proportions that requires the Commission to exempt them from important Net Neutrality principles while telling investment banks, shareholders and content producers the more traffic the merrier, as long as someone pays. Customers also might ask why their unlimited use data plans were discontinued while carriers seek deals to allow unlimited viewing with their preferred content partners.

What is the real motivation? The Wall Street Journal suggests one:

“Creating a second revenue stream for mobile broadband is the holy grail for wireless operators but collecting fees from content companies would probably make the FCC take a close look into the policy implications,” said Paul Gallant, managing director at Guggenheim Securities. An FCC spokesman declined to comment.

The Wall Street Journal takes a closer look at a plan to manage an end run around Net Neutrality by allowing preferred content partners to offer streaming video services exempt from your usage cap. (4 minutes)

Other stories of interest:

1. What Spectrum Crisis: Verizon Wireless Tries to Monetize Video Usage With New App
2. Bulldozing Wireless Net Neutrality: Carriers Want “Toll-Free” Data for Their Partners
3. Proof Verizon’s Banishment of ‘Unlimited Data’ is a Money Grab, Not a Capacity Concern
4. AT&T’s Internet Overcharging Merry-go-Round — Billing App Makers for Your ‘Overusage’
5. AT&T’s ‘Data Tsunami’: Upselling Customers for Higher Profits During Spectrum ‘Crisis’

Verizon Communications has filed a formal tariff obtained by Stop the Cap! with the New York State Public Service Commission (PSC) that would establish conditions under which it can abandon its wired network in favor of wireless-only service.

If approved, Verizon will be able to drop wired landline and broadband service in any area of the state if the company can:

• certify that a substantial portion of its facilities in an area are destroyed, rendered unusable, or beyond reasonable repair, or,
• demonstrates that the use of wireless to serve specified customers, or groups of customers, is otherwise reasonable in light of the geographic location, the availability of competitive facilities to serve those customers or groups of customers, or in light of other criteria acceptable to the PSC.

Verizon is using the case of Fire Island, N.Y., to attempt a rewrite of New York’s communications tariffs. Although eastern Fire Island suffered some damage from Hurricane Sandy, a considerable amount of Verizon’s infrastructure further west did not survive the storm. Verizon wants to abandon that wired infrastructure, avoid spending money to upgrade the island to fiber optic service, and switch customers to a voice-only, wireless service called Voice Link that would leave Verizon’s DSL customers without broadband.

Although Verizon has currently only applied to drop wired service to the “western portion of Fire Island,” the tariff would set conditions under which Verizon could abandon its landline network for financial reasons in other portions of the state. For example, Verizon could argue that its declining number of rural landline customers are no longer financially viable to serve because of wired network upkeep and upgrade expenses. Verizon’s application would also allow it to abandon older facilities where competitive services (wireless or wired) are available, and allow Verizon’s wireless products to be considered a suitable alternative to meet universal service requirements.

Verizon says it will offer the same basic calling packages that landline customers can get at the same or lower prices. The company also promises to adhere voluntarily to PSC regulations on customer protection, customer complaints, service quality, safety and reliability.

But Verizon does not promise to offer a functionally equivalent wireless replacement for the landline.

For example, Verizon only promises to support voice calls, access local and toll calling, emergency services with E911 capability, assistance services, telecommunications relay services, and directory listings, including the option of non-published service.

Data services are not supported. Current Verizon DSL customers with unlimited use plans will be forwarded to Verizon Wireless to sign up for the same limited use wireless broadband plans already available in the rest of the country (the ones that charge $50 for up to a handful of gigabytes of monthly usage, depending on the plan). Business customers will need to buy new equipment and sign new contracts with Verizon Wireless (or other wireless carriers) to process credit card transactions. Although some voice calling features are supported, an exact list remains unavailable.

In the event of a power failure, a built-in backup battery will provide up to two hours of talk time, after which the line will stay out of service until commercial power is restored.

Verizon Voice Link: The company’s landline replacement, works over Verizon Wireless. (Asbury Park Press)

Because Verizon Wireless’ existing cellular network serving Fire Island is inadequate, the company has agreed to upgrade and improve service to the island.

Verizon argues its wireless solution is the only answer that makes sense.

“The cost of replacing facilities is very high, and if hurricanes or other severe storms occur in the future, there is a significant risk that the newly installed outside plant would again be damaged or destroyed,” argues Verizon’s Manuel Sampedro, who is overseeing Verizon’s service restoration effort on Fire Island. ”Wireless service is already the predominant mode of voice communication on the island.”

But in the event of another major storm, Verizon’s wireless facilities could also be knocked out of service, potentially for weeks, as happened during Hurricane Sandy.

In the nearby coastal city of Long Beach, N.Y., every cell tower in the area failed because of the storm . City Manager Jack Schnirman told the FCC at a recent hearing wireless proved no more robust than any other technology, and described a frustrating experience attempting to reach representatives from major cell phone carriers about when exactly service could be restored.

“Long Beach reached out to one of the carrier’s customer support departments, explained the devastation and inquired about the carrier deploying a cell on wheels,” Schnirman said. “The customer service rep replied, ‘you might want to look that up on the Internet, I don’t know what that is.’ Well obviously, ironically, we had no Internet at that time.”

Customers did not fare any better.

“There was one woman in particular who passed away, of natural causes, an elderly woman,” Schnirman said. “And her daughter had to walk literally a mile and a half from her home to police headquarters just to say, ‘Listen, my mom has passed, and I thought I should tell somebody.’ ”

Wireless carriers are not obligated to provide backup service in the event of a power failure. An FCC effort to set minimal standards for backup cell service was met with legal threats by the wireless industry and the FCC backed down.

Verizon is in a hurry to win approval of its tariff change, requesting its filing be approved and take effort on less than 30 days’ notice with a waiver of the requirement that it publish a public notice about the change in area newspapers.

Reporter David Cay Johnston says Verizon and AT&T’s efforts to abandon the landline are no accident. They are part of a larger lobbying effort to abandon company obligations under the “carrier of last resort” policies that guarantee every American access to quality landline telephone service. Wireless phone service is unregulated. Johnston isn’t the only one reporting on this story. Stop the Cap! has covered it repeatedly since early 2010. (2 minutes)

Other stories of interest:

1. Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
2. Verizon’s Long Term Plan to Abandon Wired Landlines/Broadband in Non-FiOS Areas Begins
3. Six Months After Sandy, Verizon Abandoning Wired Network in Mantoloking, N.J.
4. Verizon Will Cease Selling Standalone DSL Service May 6th; Voice With DSL Only, Please
5. AT&T Will Invest $14 Billion to Expand Wired/Wireless Broadband, Abandon Traditional Landlines

Giant telecommunications companies and their lobbyist friends are gushing their approval for President Obama’s latest pick — Tom Wheeler — to head the Federal Communications Commission. What do they know that consumers don’t?

AT&T

I’ve known Tom Wheeler for many years, and he is an inspired pick to lead the FCC.  Mr. Wheeler’s combination of high intelligence, broad experience, and in-depth knowledge of the industry may, in fact, make him one of the most qualified people ever named to run the agency.

Mr. Wheeler will face daunting challenges at the FCC.  Already the pace of technological change is clashing with outdated laws, antiquated rules, and approaches more rooted in the past than the present.  The dedicated career staff at the FCC are grappling with these challenges now.  If the pace of change is to continue, along with the investment and job creation that fuel it, the mission of the FCC in the 21st Century must be re-examined, and its rules and methods modernized.  In this situation, I can think of no nominee more talented or whose leadership skills are more needed. Moreover, Mr. Wheeler will be joining a complement of fellow commissioners who are equally formidable and well suited for this important moment in the FCC’s history.

On behalf of AT&T, I’d like to congratulate Tom Wheeler on his nomination. We look forward to working with him once he is confirmed by the Senate. I also want to congratulate Mignon Clyburn, who will take over as interim-chair of the FCC. She’s an experienced and independent policymaker, passionate about public service, who will lead the agency over the coming months with a steady hand.

– Jim Cicconi, Senior Executive Vice President

National Cable & Telecommunications Association (NCTA) — America’s largest cable industry lobbyist

We congratulate Tom Wheeler on his nomination as Chairman of the Federal Communications Commission. With his significant experience in both the private and public sector, Tom is an exceptional choice to lead the Commission during a time when the telecommunications marketplace is experiencing significant innovation and incredible change. We welcome the appointment of Mignon Clyburn as interim chairman as she is a distinguished and able public servant. We will continue working closely with the entire Commission as they tackle important issues facing America’s dynamic media, technology and telecommunications landscape.

– Michael Powell, NCTA President & CEO and Former FCC Chairman

Comcast/NBC

We congratulate Tom Wheeler on his nomination as Chairman of the Federal Communications Commission.  His vast knowledge of the communications industry, as well as his proven leadership, will be invaluable as the Commission sets its course for our nation’s digital future.  We applaud President Obama’s nomination and we look forward to working with the Commission under Tom’s leadership.

Further, we commend the President’s appointment of Mignon Clyburn as Acting Chair of the FCC.  She has distinguished herself in her service as a Commissioner over the past three and a half years, and has demonstrated that she is well-suited to lead the agency.  She works passionately and tirelessly to ensure that the best interests of all Americans are given serious consideration in each matter before her.  We congratulate Chairwoman Clyburn on her well-deserved appointment as the first female chair of the FCC and look forward to continuing to work with the FCC under her leadership.

As current FCC Chairman Genachowski departs, we wish him the best and thank him for his very successful Chairmanship that has ensured the US remains the leader in the global communications marketplace.

– Comcast CEO Brian Roberts

Telecommunications Industry Association

He has the proven ability to transcend a broad range of industry perspectives to reach balanced outcomes.

– Grant Seiffert, president

CTIA – The Wireless Association — America’s top wireless industry lobbyist

Tom has a deep understanding of communications issues, a passion for hard work and creative thinking, a diverse background that spans the realm of the Internet world and a keen understanding of how mobile wireless broadband can drive our economy and innovation.

I can attest to Tom’s commitment to harness the power of communications technology to improve people’s lives, to drive our global competitiveness, and to advance the public interest,” Genachowski said. “The FCC’s role has never been more essential, and with Tom’s deep policy expertise and his first-hand experience as a technology investor, he is a superb choice to advance the FCC’s mission of promoting innovation, investment, competition, and consumer protection.

Other stories of interest:

1. Change We Can Believe In? Cable/Wireless Industry Lobbyist Will Now Head FCC
2. FCC Commissioner Mignon Clyburn Calls North Carolina’s H.129 A “Broadband Barrier”
3. “Future FCC Chairman” Tom Wheeler’s Fruit Doesn’t Fall Far from Big Telecom’s Tree
4. Former Head of Cable Lobby Could Be Romney’s Pick for FCC Chairman
5. FCC Chairman Opens Wireless Industry Convention Mouthing AT&T Talking Points

Wheeler

Tom Wheeler has a blog.

The presumptive leading candidate for America’s next chairman of the Federal Communications Commission also has a major conflict of interest problem, with at least 30 years of working directly for the business interests of the cable and telephone companies he may soon be asked to oversee in the public interest. Wheeler is the former president of the National Cable & Telecommunications Association (NCTA) — the nation’s largest cable industry lobbying group and past CEO of the Cellular Telecommunications & Internet Association (CTIA) — the AT&T and Verizon-dominated wireless trade association. Today Wheeler serves as a managing director at Core Capital Partners, a Washington, D.C.-based venture capital firm that invests in these and other industries.

In more than 60 articles in the last six years, Wheeler has written of his trials and tribulations with federal regulators who simply refuse to see telecom industry wisdom on spectrum management, the legacy telephone network, obstinate broadcasters, outdated regulations, mergers and acquisitions, and the amazing story of private Wall Street investment and its wisdom to naturally shape America’s telecommunications landscape by “letting the marketplace work” unfettered by oversight and consumer protection laws.

Almost entirely absent in Wheeler’s writings is any interest in the plight of ordinary consumers that do business, often unhappily, with the companies Wheeler used to represent. America’s love of many-things Apple and Google, two runaway success stories heavily invested in the digital economy and well-regarded by more than a few consumers, are scorned by Wheeler as part of the “Silicon Valley mafia.”

Wheeler is the consummate Washington beltway insider, a lifelong lobbyist well-positioned to walk through the perpetually revolving door between the public and private sector. Even worse, he has maintained warm regards for not one, but two telecom industry lobbying giants — the cable and wireless industry trade associations that have daily business before the FCC. Whether Wheeler can stand up to his former best friends is open for debate. Wheeler wrote in one blog entry he remains in awe of AT&T’s chief lobbyist, Jim Ciccioni, who he called “one of the smartest and shrewdest policy mavens in the capital.”

Wheeler’s blog makes it clear he would have supported the 2011 attempted merger between AT&T and T-Mobile, with a few temporary token pre-conditions. He heaped scorn on antitrust regulators for missing an opportunity the merger approval could have had on reshaping the American wireless marketplace. Less is more in Wheeler World.

D.C.’s perpetually revolving door keeps on spinning.

Like outgoing FCC chairman Julius Genachowski, Wheeler is a longtime Obama loyalist and was involved in Obama’s 2008 election campaign.

Wheeler relays to C-SPAN’s Brian Lamb in a 2009 interview that who you know in Washington can mean a lot. After Obama entered the 2008 race, Wheeler connected to Obama through a friend — Peter Rouse, who had recently accepted the position of Obama’s chief of staff.

“I picked up the phone one day and there was a message from Barack Obama that he wanted to talk about some issues related to technology,” Wheeler described. “Things began to develop. We got really interested in the potential of this person and the opportunity that he represented for a transformational moment in American history, and we decided that Iowa was the place.”

Wheeler and his wife Carol (employed by the National Association of Broadcasters, itself a lobbying group) had the financial resources in place to put their D.C. jobs on hold and spend six weeks in the Region 2 Obama election office in Ames, Iowa.

After Obama won the election, Lamb predicted Wheeler might find himself at the FCC. Instead, Obama’s college friend and money-bundler Julius Genachowski won the position.

Wheeler’s chances of succeeding Genachowski improved dramatically in mid-April after receiving the written support of several public policy advocates. One of them was Susan Crawford, whose recent book, Captive Audience: The Telecom Industry and Monopoly in the New Guilded Age, railed against many of the policies supported by the largest telecommunications companies Wheeler professionally represented in his roles at the NCTA and CTIA. Some consumer groups wrote President Obama directly, strongly recommended a change from the ‘business as usual’ revolving door:

During his election campaign, President Obama pledged “to tell the corporate lobbyists that their days of setting the agenda in Washington are over.” Yet the president is reportedly considering a candidate for the next FCC chair who was the head of not one but two major industry lobbying groups. After decades of industry-backed chairmen, we need a strong consumer advocate and public interest representative at the helm. It’s time to end regulatory capture at the FCC and restore balance to government oversight.

Those consumer groups have plenty to worry about if Tom Wheeler becomes the next head of the FCC. Stop the Cap! has found several quotes from his blog which paint a picture of a potential FCC chairman devoted to industry interests:

Close Wireless Retail Stores to Save Money and Kill Jobs: “Sprint announced plans to close eight percent of its over 1,500 company-owned retail outlets. Why stop there? Why does it make sense for wireless carriers to operate more stores than Sears and Macy’s combined?”

Wireless network redundancy is a waste of money — an interesting sentiment in light of major wireless network failures during Hurricane Sandy and insufficient capacity during the terrorist attack on the Boston Marathon last week: “The history of the U.S. wireless industry is a network-centric history that wasted untold billions of dollars building duplicative networks and advertising ‘mine is better than yours.’”

The failed merger of AT&T and T-Mobile represented a missed opportunity in Wheeler’s view.

WiMAX is King of the World?: “Back in the mid-1990s new digital technology called Personal Communications Service (PCS) was forecast to be the death knell of the cellular industry. It seemed all anyone could talk about was the “smaller, cheaper, lighter” handsets that would perform feats beyond the capabilities of analog cellular. Now in the mid-2000s the differentiator is speed and throughput and WiMAX is the new hot technology.”

Who needs free over the air television when only 10-15 percent of the country watches?: “What is the purpose of continuing the local TV broadcasting model when between 85 and 90 percent of American homes are connected to cable or satellite services?”

AT&T and Verizon will save us from the Great Recession, except for the fact they laid off “redundant” workers: “In the midst of the first shrinking of global economic growth in almost 70 years, the wireless industry represents what must be the largest non-governmental stimulus program in the world. Wireless is an economic recovery triple play.”

Those mooching broadcasters got their spectrum for free when Verizon and AT&T had to pay real money: “The setting for these theatrics is the digital conversion for which broadcasters lobbied so hard for. Yes, they won new spectrum – which they got for free while all other were paying billions – but getting what they asked for also brought something no one ever imagined. Broadcasting ceased to be broadcasting. Going digital meant that what used to be about moving atoms is now about moving bits.”

We need to verify broadcasters use their spectrum the way we define it or we might take it away: “But threatening a shootout at the OK Corral in order to ‘hang on to every last hertz of spectrum’ is an invitation to irrelevance and proof that the spectrum needs to be assigned to parties that think digitally and see themselves as a part of the solution to the spectrum crisis. Opportunity is knocking for the broadcasters; we’ll see if anyone is at home.”

Cicconi

Reduced quality of service is worth it, even if it means shutting down wired telephone service or increasing interference for wireless users: “It is time to abandon the concept of perfection in spectrum allocation. The rules for 21st century spectrum allocation need to evolve from the avoidance of interference to interference tolerance. We’ve seen this evolution in the wired network; it’s now time to bring the chaotic efficiency of Internet Protocol to wireless spectrum policy. What the FCC’s TAC is proposing is that we officially wean ourselves from the old wireline switched circuit world to embrace the reality of IP and its benefits. It’s time to start down the same road with spectrum allocation.“

Did you know your mobile bill is lower than ever and sending data wirelessly costs next to nothing? How much is your limited data plan costing you again?: “As wireless rates have plunged for both voice and data such regulation has less impact than it did in the wireline era anyway. When each connection required an analog circuit, the cost of such a connection, and the return on that investment was a more logical nexus than today’s digital networks where the incremental cost of a packet of information approaches zero.”

AT&T’s propaganda supporting its attempted merger with T-Mobile was brilliant. Those pesky consumer groups and their meddling, truth-telling agenda ruined everything. When Americans think of rural wireless broadband, the first company that comes to mind is T-Mobile, right?: “The most important times in any merger approval process are the first two weeks when the acquiring company gets to define the discussion and the last four weeks when the concerns raised by others and the analysis by the government congeals to define the issues to be negotiated in the final outcome. AT&T shot out of the blocks brilliantly, framing their action in terms of the spectrum shortage and President Obama’s desire to provide wireless broadband to rural areas. Over the coming months those who were caught by surprise, as well as those who would use the review process to gain their own advantages, will have organized to present their messages.”

Wheeler sends a Hallmark card to AT&T’s most powerful lobbyist: “AT&T’s recent negotiations with the FCC on the Net Neutrality/Open Internet issue provide an insight into how the company deals with such a complex issue. Jim Cicconi, AT&T’s Senior Executive Vice President, is one of the smartest and shrewdest policy mavens in the capital.”

What do they know about it?

AT&T’s Jim Cicconi is the go-to-guy for determining future wireless policy, not the FCC: “Randall Stephenson may be channeling Theodore Vail, but Jim Cicconi sits astride a process that could determine the future of wireless policy, first for AT&T and then by extension for everyone else. Quite possibly the result of this merger decision will be far wider than the merger itself. At the end of the day we may be talking about a new era of wireless policy based on the Cicconi Commitment.”

The Justice Department just proved it does not understand regulatory concepts governing relentless corporate telecom mergers because it decided Americans should have at least four wireless companies to choose from, not three: “Thus, the long-term impact of the Justice Department’s decision would appear to be the growing irrelevance of traditional telecommunications regulatory concepts on mobile broadband providers.”

Wheeler lacks the realization wireless providers are moving to usage pricing for fun and profit, not because of spectrum shortages: “Having walked away from taking the easy money, will the Congress remain as committed as they were to selling spectrum? What will be the light at the end of the tunnel for wireless carriers who see their spectrum capacity being consumed by huge increases in demand? Will the resulting shortage mean that usage based mobile pricing becomes a demand dampening and profit increasing tool?“

We don’t need free over the air television. Just tell free viewers to subscribe to cable like everyone else: “I’ve been mystified why broadcasters have declared jihad against the voluntary spectrum auction. Getting big dollars for an asset for which you paid nothing while still being able to run your traditional business over cable (the vast majority of its reach anyway) and maintain a broadcast signal at another point on the dial seems a pretty good business proposition – unless you really are serious about providing new and innovative services and need all that spectrum.”

You don’t deserve free Internet access either, because it hurts the corporate business plans of other providers: “Competition among networks for customers has put the consumer in the enviable position of being told they won’t have to pay for access to Internet services. “Free It,” the advertisements of British network operator “3″ proclaim to promote their unlimited data plan, for instance. The policies that created wireless network competition have trapped operators between holding market share and giving away capacity for ever-increasing data demands. So long as there is one carrier willing to offer its capacity at a low price (or for free), the other carriers must play along thus bringing those who run networks to loggerheads with those who use the networks.”

(Image courtesy: FCC.com)

Google and Apple are privacy invaders that collect your personal data as part of a great Silicon Valley mafia: “If wireless carriers are truly going to become “operators” participating in the broader ecosystem their focus needs to shift from running networks to managing the information created by the 21^st Century’s digital networks. The Silicon Valley mafia hijacked that information, but they could quite possibly be in the process of blowing their escape with the goods by exposing what they were really up to.”

We need a “voluntary” auction of the public airwaves with a subjective standard for what represents their “best use” (ie. the way the wireless industry defines it): “For almost four decades I have listened to businesspeople tell government policy makers to “let the marketplace work.” There is no more effective marketplace than a voluntary auction where everyone is free to decide whether to sell, how much to sell, and at what price to sell. The marketplace for wireless spectrum has spoken through its explosion; now it’s time for the marketplace to be able to decide the best use of spectrum. There is no doubt that some broadcasters will opt to use their spectrum in innovative ways [my firm, Core Capital Partners, has invested in such a belief]. Bully for the broadcast entrepreneurs! The FCC should be encouraging and rewarding of entrepreneurial initiative. Just as clearly, however, some broadcasters will choose other options. It is essential that we get on with offering that option quickly so we can nip the spectrum crunch in the bud, spur innovation, stimulate investment, create jobs, and continue American leadership in wireless services.”

Coming Clean: Wheeler ran astroturf operations that pretended to represent the interests of consumers but actually were little more than corporate sock-puppetry: “In the early days of cable television a cabal of Hollywood and broadcast interests combined to convince the Federal government to deny cable its competitive advantage of more channel choices for consumers. Corporate lobbyists told Congressmen and Senators how cable would mean the end of “free TV” unless it was stopped or controlled. Then these same groups recruited real people – the so-called “grassroots” – to back up their claims. Such lobbyist-organized grassroots efforts were the Standard Operating Procedure (SOP) of political organizing – I know because I used to do it.”

The alliance between Verizon and a cabal of cable companies selling each others’ products is pro-competition: “A TV subscription service like the one Apple is proposing is the heart of what cable is all about. And whatever Google is doing, they aren’t in every TV just for the heck of it. The Mongols of Silicon Valley have been behaving just like their 13^th and 14^th century predecessors. Using new technology to their advantage, the Mongols of the Middle Ages sent invasions in every direction. Soon they had the largest contiguous empire the world has ever seen.  Sound familiar? It may be a case of “my enemy’s enemy is my friend,” but a cable-wireless alliance is an exceedingly logical response to the impending attack. Cable operators have program distribution rights (or leveraged access to them) and Verizon has the high-speed wireless network to deliver to the growing number of mobile devices. Both these players can help each other confront the coming onslaught.”

Other stories of interest:

1. FCC Chairman Julius Genachowski’s Roadshow: Now He’ll Headline the Cable Industry’s Big Splash
2. FCC Chairman Mouths Telecom Industry Talking Points on Usage Pricing, “Innovation”
3. FCC Chairman Opens Wireless Industry Convention Mouthing AT&T Talking Points
4. The Wall Street Journal’s Revisionist History: AT&T Isn’t the Problem, the Government Is?
5. The Fat Lady Sings: What Happens Next Now That AT&T-Mobile Merger Deal is Dead

Scored first place again this year.

Consumer Reports has released its 2013 ratings for broadband service providers, showing independently owned cable companies and fiber optic broadband services from companies large and small deliver the best bang for the buck.

WOW, a small cable operator serving limited areas of the country yet again achieved first place in the ratings, appearing in the May issue. Verizon and Frontier’s FiOS fiber networks rated #2 and #5 respectively. (Frontier acquired its fiber to the home network from Verizon in 2009.)

In general, cable broadband service scored considerably better than telephone company DSL. Wireless broadband did more poorly, with Verizon’s 4G LTE network in 23rd place. Satellite scored worst, with both ViaSat and Hughes among the bottom three.

Verizon’s ongoing speed boosts assure the company of high ratings for its FiOS fiber network.

Mediacom once again took honors as America’s worst cable company. This year, it managed to score even worse than ViaSat, formerly WildBlue. Other bottom dwellers: FairPoint DSL, AT&T DSL, Frontier DSL, Charter Cable and Comcast Cable.

Compared with last year, few companies saw dramatic improvements or declines, despite glowing press releases touting improvements and investment.

Time Warner Cable, which scored 19th last year dropped to 20th place this year.

TDS, an independent phone company, managed a surprising 5th place score last year, despite only giving most of its customers DSL service. This year it is in eighth place.

Cablevision, which faced criticism for an overburdened broadband network last year managed almost no change in ratings this year, despite a measurable improvement in service.

Consumer Reports’ ratings are largely based on customer perceptions shared with the magazine in its annual questionnaire. CenturyLink may have delivered an improved experience for its customers between 2012 and 2013. Last year the phone company was in 18th place. This year it improved to 11th place.

Other stories of interest:

1. Consumer Reports Releases 2012 Top-Rated Telecom Providers, Quotes Stop the Cap!
2. Netflix January ISP Ratings: Google Fiber Tops, Verizon/AT&T DSL At Bottom
3. AT&T Scores Last (Again) in Consumer Reports’ Ratings; Oddly AT&T Reseller Scores Highest
4. A Look at Broadband Numbers in the United States: DSL Hurting Phone Companies
5. Customers Flee Frontier FiOS: Company Loses A Stunning 10,000 Customers in 3rd Quarter

Pulling the wool over your eyes.

As the Federal Communications Commission continues to consider AT&T’s proposal to abandon its wired infrastructure in rural service areas, hundreds of comments are arriving at the federal agency both for and against the idea. Between the submissions from large telecom companies and state regulators, a curious mix of professionally prepared comments favoring AT&T’s proposal have also arrived, many from organizations that simply do not have a direct interest in the outcome.

These Friends of AT&T include a range of non-profit, minority, and civil rights groups that have little interest in rural telecommunications policy but every interest in pleasing a company that lends executives to serve on advisory boards or writes big checks.

Even worse, some of the constituencies these groups purport to represent are among the most vulnerable. The rural poor, elderly, and economically disadvantaged are precisely those that cannot afford to lose budget-friendly phone and broadband service in favor of the expensive wireless solutions AT&T proposes as replacements.

Not all groups favoring AT&T are simply trolling for corporate contributions. Some seem to have been hoodwinked by the AT&T’s lobbyists, believing that abandoning rural wired infrastructure is an evolutionary step towards better service. They do not understand AT&T will offer exceptionally expensive broadband and voice calling over a wireless network notorious for dropped calls, poor rural reception, and stingy data caps in its place.

Stop the Cap! is here to help. Over the coming weeks, we will be running a special series calling out a range of groups that either take AT&T money and advocate for their cause or seem misinformed about the future rural reality AT&T has in store for rural America. We encourage readers to contact these groups and let them know they are hurting themselves — and you — spending precious resources advocating for a multibillion dollar telecommunications company that honestly does not need their help and does not have their interests at heart.

Ask these groups to carefully consider the comments from organizations that live and breathe rural broadband, consumer protection, and oversight:

A million-five can buy a lot of advocacy.

RURAL BROADBAND POLICY GROUP: “[We are] alarmed at the request AT&T has presented before the Commission, and believes that approving this petition will inflict negative consequences on rural communities and consumers including loss of affordable and reliable basic telephone service, which is the only form of communication many remote communities can access; eliminate consumer protections that have made it possible for rural people to access telecommunications services; reverse our commitment to Universal Service; endanger our national public safety; and fuel a divest-from-Rural-trend that will disadvantage our national economy and global competency. We simply cannot allow that to happen.”

FREE PRESS: “For the typical consumer, the grant of AT&T’s wishes would mean no protections from price gouging, no accountability for service outages, no consumer protections from cramming and slamming, and no reliable access to emergency services. For millions of consumers and businesses, it would mean no access at all, as AT&T would be free to stop providing service. And because there would no longer be any obligation for interconnection, Americans should expect to see rolling localized Internet blackouts as intercarrier disputes pop up, which will be “resolved” by higher prices paid to dominant carriers like AT&T.”

MICHIGAN PUBLIC SERVICE COMMISSION: “The MPSC recognizes that the transition to an IP-based network is already underway. The MPSC supports the transition from TDM to IP-based or other next generation networks and services, and the deployment of affordable, open, and high-capacity broadband by all broadband providers. However, it is imperative to recognize that great care must be taken to ensure the continuation of the competitive marketplace, universal service, and consumer protections. AT&T’s Petition proposes sweeping deregulation of the incumbent providers, which would allow them to withdraw service unilaterally. There cannot be a reduction in competition, thus leaving customers subject to prices and/or rates that are not just, reasonable, and affordable, with little or no competitive recourse.”

Coming Up: The National Farmers Union: Hoodwinked by AT&T’s Lobbyists

Other stories of interest:

1. AT&T’s Broadband Answer for Rural America: Sell Rural DSL Operations To Someone Else
2. Analyzing AT&T’s Plan to Expand Service: Transformation or Bait & Switch for Rural America?
3. Kansas House of Representatives Votes 118-1 in Favor of AT&T Bill to Abandon Rural Kansas
4. Telephone Companies Bilking Consumers for Fatter Revenue Is as Simple as “ABC”
5. Dark Money: Inside the Internet Innovation Alliance’s Guide to Total Deregulation, Abandoning Rural America

New York Governor Andrew M. Cuomo announced this week New York State will award $25 million in funding to expand high-speed Internet access in rural upstate and underserved urban areas of New York through the Connect NY Broadband Grant Program. This award brings the total amount of funding awarded for broadband projects during Governor Cuomo’s administration to more than $56 million, the largest statewide broadband funding commitment in the nation.

Unlike many broadband grant programs, New York is primarily targeting last-mile projects that make all the difference for New Yorkers that cannot get broadband service at any price. The federal government and some states have focused instead on funding institutional or “middle-mile” networks that ordinary consumers and businesses cannot access. The Connect NY Broadband Project specifically sought projects that will get residents broadband service as quickly as possible.

Pat Pryor is chair of the Tompkins County Legislature’s Special Committee on Broadband, which is fighting for better service in the Southern Tier of New York. Pryor says the grant will make a real difference because Verizon and Time Warner Cable have refused to expand service where they consider it unprofitable. She told the Innovation Trail the funding will help a wireless ISP in her county that specializes in serving rural areas bypassed by cable and DSL.  (1 minute)
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“Through the Connect NY program, we are bringing high-speed Internet access to all corners of New York State,” Cuomo said. “The projects receiving these grants represent the very best proposals with the most potential to benefit statewide economic and community development efforts. These funds will strengthen New York’s broadband capacity and encourage sustainable adoption of broadband service in unserved and underserved communities, counties and regions across the state.”

Cuomo

Altogether, about 6,000 square miles of new infrastructure will offer high-speed Internet service to 153,000 New York households, 8,000 businesses, and 400 community anchor institutions – many without any means to access the Internet. The projects will also create 1,400 new jobs.

The funding comes as a relief to New York residents who have gone without service for years, denied access to earlier grants in part because incumbent providers inaccurately claimed, through national broadband maps, they already offered full broadband coverage in many New York counties that actually don’t have service.

Tompkins County is a case in point. Verizon and Time Warner Cable, the dominant providers, volunteered incorrectly that almost the entire county was well-served with broadband. That proved frustrating to county legislator Pat Pryor.

“It matters, because a lot of times [the maps are] what grant funding is predicated on,” Pryor told the Innovation Trail. “[Funders say] If you don’t have any unserved areas, why would you need a grant? We’re almost 100 percent covered, why would we need any money?”

Claire Perez has spent more than a year fighting for broadband for her neighborhood in West Dryden, which is just over 1/2-mile from the nearest Time Warner Cable customer. She talked with the Innovation Trail last March about her plight. Despite endless rounds of petitioning the cable operator to extend service, the company would only quote “go-away” prices ranging from $23,000-54,000 to wire her neighborhood and home. Perez, and others like her, may be among the biggest beneficiaries of the broadband expansion program if they are near a Time Warner Cable service area. (3 minutes)
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The specifics:

$24,010 The Smithville Project
This project with Haefele TV Inc. will serve the Southern Tier region. The Smithville project will build fiber optic cable utilizing existing infrastructure. The network will pass 350 homes and provide broadband service with speeds of 7 Mbps download and 1.5 Mbps upload to approximately 100 new subscribers.

$114,015 Ovid and Romulus Broadband Project
This project with Trumansburg Telephone Company will serve the Finger Lakes region. The Ovid and Romulus Broadband Project will provide broadband to unserved areas in company territory in the towns of Ovid and Romulus. This project will enable 110 customers in this area that have no availability to any type of broadband services to obtain high-speed Internet service. The project will also offer discounts on subscription fees, free training and email addresses.

$200,000 Connect Thurman White Space Project
This project with Warren County Economic Development Corporation will serve the Capital District region. Through a public/private partnership, the Thurman White Space project will provide broadband access to 89 households in the northeast area of the Town of Thurman. The Town of Thurman will also offer economically disadvantaged residents access to public computers and enhanced digital literacy training.

$557,000 Essex County Broadband Service Expansion
This project will serve the North Country region. The Essex County Broadband Service Expansion project will provide high-speed broadband service to households that do not have access within the Towns of Jay and Wilmington, passing 1,900 households. The project will also provide digital video services and potentially a competitive telephone service.

$558,940 Otsego County Wireless Network
This project with the County of Otsego IDA will serve the Mohawk Valley region. The Otsego County Wireless Network will partner with a last-mile provider to leverage a county-wide, open access fiber backbone to deploy last-mile, wireless broadband to 24 towns, 9 villages and 1 city in Otsego County, serving approximately 28,000 households, 4,500 businesses and 300 community anchor institution locations. The wireless network will also be made available to any viable organization or service provider that wishes to use it.

$572,000 Hamilton and Herkimer Counties Broadband
The Broadband 1 project with Newport Telephone Company is a multi-region project serving the North Country and Mohawk Valley regions. The project will leverage existing infrastructure to provide broadband service to 230 residents, businesses and community anchor institutions in Hamilton and Herkimer Counties. The project will also enhance emergency services for both counties.

$672,452 Southern Tier Broadband
This project with the Southern Tier West Development Foundation will serve the Western region. The project will expand access to broadband service and increase broadband speeds through a WiMAX (Worldwide Interoperability for Microwave Access) system to towns and villages in the counties of Chautauqua, Allegany, Cattaraugus, and Erie County, passing more than 41,000 households. The project will also partner with local medical clinics to enhance electronic medical records and upgrade hardware and software at libraries in Chautauqua, Cattaraugus, Allegany, Steuben, and Chemung Counties.

$800,000 Allegany County Broadband
This project with Allegany County will serve the Western New York region. The Allegany County Broadband project will create a county-wide platform for providing access to an existing network, delivering broadband to 28 local communities and 17,440 households in Allegany County that are currently without broadband service.

$976,426 Lyon Mountain Broadband
This project with Slic Network Solutions will serve the North Country region. The Lyon Mountain Broadband Project will provide high-speed, low-cost broadband service in the Community of Lyon Mountain to 527 households, utilizing fiber-to-the-home technology. In addition this network will also deliver telephone service, IPTV service, and advance business services over the fiber.

$1,012,366 Bellmont North Next Generation Broadband
This project with Slic Network Solutions will serve the North Country region. The Bellmont North Next Generation Broadband project will provide high-speed, low-cost broadband service in the Adirondack Park to the northern end of the Town of Bellmont. This service will be delivered utilizing 25.3 miles of fiber to the home and wireless technology to connect 124 households. The network will also allow for the delivery of telephone service, IPTV service, and advance business services over the fiber.

$1,636,346 Connect NYC
This project with the New York City Economic Development Corporation will serve the New York City region. By conducting a competition to fund fiber build out to small and medium businesses and in collaboration with private sector Internet Service Providers, the Connect NYC Project will be used to extend the fiber infrastructure available to commercial and industrial businesses in New York City.

$1,800,000 MTC Broadband Buildout
The MARK Project Inc. will serve municipalities in the Capital District, Mohawk Valley and the Southern Tier. The project will deliver telecommunications services, including broadband, voice and video services, to 900 residents, businesses, and anchor institutions within the unserved areas of the towns of Conesville, Gilboa, Halcott, Middletown, and Roxbury. The project will also offer broadband connectivity to community anchor institutions within the service area free of charge.

$1,999,584 Parish Broadband
This project with New Visions Communications will serve the Central New York region. The project will utilize existing infrastructure to provide high-speed internet, VoIP and cable television to the Town of Parish, where 72% of the population does not have access to broadband, VoIP or landline cable television. The project will also create 20 construction jobs and 6 permanent jobs.

$2,042,177 Connecting the Capital Region
Hudson Valley Wireless will provide high-speed fixed wireless broadband access to nearly 40,000 households and 2,000 businesses that currently do not have access in Washington and Rensselaer Counties. In addition, the network will enhance public safety operations in the region by enabling redundancy of public safety communications and by allowing municipalities to use a portion of the bandwidth at no cost.

$2,162,656 Schroon Lake Next Generation Broadband
This project with Slic Network Solutions will serve the North Country region. Slic Networks Solutions will provide high-speed, low-cost broadband service to 457 households in the unserved areas of the Town of Schroon and the Town of North Hudson. This service will be delivered utilizing fiber to the home technology. Slic will also provide wireless hot spots for frequently visited public locations including the public beach in Schroon Lake.

$2,216,000 Tompkins and Cayuga Counties Last Mile Coverage
This project with Clarity Connect Inc. is a multi-region project serving the Central New York and Southern Tier regions. This project leverages existing tower infrastructure to provide broadband services to the unserved portions of the Towns of Ulysses, Enfield, Newfield, Danby, Groton, Lansing, Ledyard, Genoa, Venice, Scipio, Niles, Sempronius, and Summerhill in Cayuga and Tompkins County. The project will also upgrade DSL services increasing existing speeds.

$2,407,049 Yates County Open Access Fiber Network
This project with Yates County will serve the Finger Lakes region. The Open Access Fiber Network will build and operate a fiber-optic ring with spurs to remote areas within the County of Yates. This network will serve as a backbone foundation for the development of community-based broadband initiatives. The open access fiber network will be 68 miles long, passing 10,400 households and available for use within each town it routes through.

$5,266,979 Statewide Broadband Expansion
The Statewide Broadband Expansion Project is a statewide project serving 9 regions. Time Warner Cable will deploy robust high-speed Internet service to 4,114 households in the Capital, Central, Finger Lakes, Mid-Hudson, Mohawk Valley, NYC, North Country, Southern Tier and Western regions of New York State. The project will also provide residents with access to digital TV, telephone services and security services.

Other stories of interest:

1. Senator Schumer Promotes Western NY Fiber Project: “Fiber Optic Broadband is the Erie Canal of the 21st Century”
2. Washington County, NY Considers Spending $40,000 On Broadband Study – Rural Broadband Revisited
3. Northern Fla. Broadband Network ‘Wasted’ $6.8 Million of $30 Million Grant With No Resulting Service
4. Retired Verizon Employee Tells Rural Upstate New York “Fiber Optics is Old School”
5. Fact Check: Time Warner Cable’s $25 Million Fiber Upgrade: For Business Use Only

AT&T’s WiMAX Internet service in Alaska will be switched off Jan. 31, forcing rural Alaskan customers to find an alternative for inexpensive wireless service in areas where DSL or cable broadband is unavailable.

The company stopped signing up new customers last March and has been repeatedly notifying existing customers they will need to find an alternative service soon.

AT&T is shutting off the aging WiMAX network, which delivered up to 2Mbps service at prices starting at around $20 a month, in favor of newer wireless broadband services, including AT&T’s LTE 4G service and Wi-Fi hot spots.

AT&T is recommending customers switch to one of its mobile broadband plans. But WiMAX customers are likely to experience sticker shock when they see the difference in price.

AT&T charges $40 a month for just 1GB of usage plus an additional $20 a month device fee on its Mobile Share Device Data Plan.

Other stories of interest:

1. Rogers Abandoning Portable Internet Service: Internet Overcharging 3G in Rural Canada’s Future
2. Clearwire Consolidates: Company Pushing $50 4G Mobile Broadband With Throttling Plan
3. AT&T Faces Net Neutrality Complaint from Public Interest Groups Over FaceTime Blocking
4. Triad Region: Time Warner Cable Introduces Road Runner Mobile WiMax on December 1st
5. Think Twice Before Switching to AT&T Cell Phone Service

Mountain Cablevision was owned by Shaw Communications but has been purchased by Rogers.

Rogers Communications, already Canada’s largest mobile-phone company, will grow even larger with the acquisition of Shaw Communications’ unused wireless spectrum and a Shaw-owned cable company making inroads in Rogers’ backyard in southwestern Ontario.

Rogers has agreed to pay $300 million for the spectrum and $400 million for Hamilton, Ont.-based Mountain Cablevision, Ltd. In return, Shaw will acquire a one-third interest in Rogers’ TVtropolis network.

Shaw is getting a premium price for the wireless spectrum it acquired in 2008 for $190 million. Shaw, like many American cable companies, originally planned to launch competing mobile phone service but aborted the effort in 2011, deciding to invest in its broadband service and construct a Wi-Fi network in western Canada instead.

Rogers CEO Nadir Mohamed told Bloomberg News the spectrum is needed to meet growing demands from Canadian wireless broadband customers.

“The wireless business is defined by what I would describe as an explosion in terms of usage,” Mohamed said. The new spectrum “will help us meet that demand in terms of capacity and speed.”

Rogers is by no means finished acquiring spectrum. The company plans to borrow as much as $800 million to purchase more at the next Canadian spectrum auction later this year.

Other stories of interest:

1. What Spectrum Crunch? Rogers Caps Your Data Usage But Plans Unlimited LTE Video-on-Demand
2. Shaw Invades Ontario With Approval of Mountain Cablevision Acquisition, Becomes Canada’s Largest Cable Operator
3. HissyFitWatch: Shaw & Rogers Non-Compete Agreement Tossed, Allowing Shaw Acquisition of Mountain Cablevision
4. Bell: If You Don’t Sell Us the Frequencies, We’ll See That Rural Canada Gets Nothing
5. Rogers Launches Astroturf Campaign to Recruit Customers to Lobby For Spectrum… for Rogers

How accurate is the map?

The biggest story you know nothing about is taking place at the Federal Communications Commission in Washington, where regulators are trying to figure out what to do with $185 million in leftover broadband expansion funds Internet Service Providers either could not qualify for or did not want. The FCC is on the verge of making a decision, one that will rely on broadband map data that service providers are now calling grossly inaccurate.

During the first phase of the Connect America program to fund broadband expansion in rural areas, the Commission offered up to $300 million to providers willing to wire consumers and businesses deemed too unprofitable to serve.

The rules largely favored phone companies, and although some including Frontier Communications gratefully accepted the funding to expand their DSL service, both of America’s largest phone companies expressed little interest. Many others, including CenturyLink and Windstream, petitioned to change the rules.

In the end, less than half of the available funding — $115 million — was actually spent, none in areas served by AT&T and Verizon.

The initial guidelines for participation were not exactly a high bar to cross. Under the program’s original rules, providers are required to deploy broadband within three years to certain locations that receive less than 768kbps downstream and 200kbps upstream (or no service at all). That “means test” set the bar far below the minimum speed providers can even call “broadband” under the FCC’s own current definition: 4/1Mbps.

Anyone served by 1-3Mbps DSL “broadband” was instantly ineligible because the FCC effectively deemed those speeds ‘good enough for now.’ The FCC argued it wanted to first target funds to those without any service at all, not those who had inadequate service.

Participating carriers receive compensation up to $775 per home to defray connection costs, bringing expenses closer to the Return on Investment-test that decides whether your rural home will have broadband service or not. Large phone companies complained the subsidy was not nearly enough and did not bother applying. Some others said even with the subsidy, it was still too unprofitable to wire rural homes in their service areas.

This not-so-auspicious start of the Connect America project has driven the FCC to propose modifying the rules to increase participation by disinterested providers. In an opaque “Further Notice of Proposed Rulemaking,” the Commission proposes new rules that will “further accelerate the deployment of broadband facilities to consumers who lack access to robust broadband.”

Under the new guidelines, providers could be able to apply for funding if the areas they propose to serve are not already getting at least 4/1Mbps service. But in a surprising footnote, the FCC announced they will “use 3Mbps downstream and 768kbps upstream as a proxy for 4/1Mbps service.” In other words, the FCC is ignoring its own standard definition of broadband and settling for something less. That will leave customers waiting for something better than 3Mbps service up the creek, excluded from Connect America funding.

The U.S. Telecom Association is a lobbying group dominated by AT&T, Verizon and other phone companies.

The U.S. Telecom Association (USTA), which represents phone companies, was appalled, suggesting this footnote will block funding from approximately one million rural households that receive what most of us would consider substandard broadband.

“This is particularly true for rural areas served by DSL which in most cases has been engineered to provide an upstream speed of 768 Kbps,” the USTA wrote in comments to the FCC. “In such cases, significant and costly network upgrades would be necessary to provide broadband service meeting the 4/1Mbps  benchmark. Therefore, rather than relying on evidence of 3/768 service to exclude areas from eligibility, the Commission should use the next speed tier—6/1.5Mbps as a proxy for 4/1 service.”

Windstream, in its own comments, was reduced to educating the FCC about the basic technical facts of DSL:

One Mbps upload speeds are not necessarily available to all customers served by standard ADSL 2+ architecture over a 24 AWG copper pair of 12,000 feet. Rather, delivery of reliable upload speeds of 1 Mbps would require an upgrade, such as two-pair bonded ADSL 2+. Two-pair bonded ADSL2+ essentially doubles last mile deployment cost since the end user modem is two to three times the cost of a normal single pair modem, two cable pairs are used instead of one, and two ADSL2+ ports are required at the DSLAM. Moreover, to achieve 1 Mbps of customer payload throughput would require an upload connection speed of more than 1.2 Mbps, while an upload connection speed of 1 Mbps would produce an actual throughput of about 820 Kbps.

Even where the loop length from the DSLAM to the customer is less than 12,000 feet, a service provider can only deliver service meeting the 4/1 requirement—or more precisely, service at speeds of 6/1.5Mbps, the next-fastest standard service tier—if the DSLAM is ADSL2+ capable and fiber-fed.

Windstream provides a primer on DSL to the FCC.

The resource that will determine who qualifies for broadband funding and who does not is the National Broadband Map, which seeks to describe the broadband options available at hundreds of millions of American addresses. If the map shows an area unserved, it qualifies for funding. If the map shows there is no broadband inadequacy, no funding will be offered.

Unsurprisingly, providers of all kinds are hurrying in comments that declare often considerable inaccuracies in the FCC’s map. This is ironic since much of the collected data on which the map is based was voluntarily supplied by those providers.

In various submissions filed with the FCC, several ISPs suggest the national map is not to be trusted. Some complain the updated service areas they earlier submitted have never been incorporated into the map, others are discovering inaccuracies for the first time because they can make the difference between winning or not qualifying for rural broadband funding (either for themselves or a competitor). Among other complaints: providers are overestimating their coverage and fibbing about actual speeds, the map’s census tract granularity ends up declaring an area served if even one household manages to get DSL service while others cannot, and providers only serving business customers are treated as if they serve everyone.

Mississippi Gov. Phil Bryant is asking the FCC to clean up the inaccuracies in the Mississippi portion of the National Broadband Map.

The state of Mississippi is the poster child for inaccuracies in the National Broadband Map. All that was required to disqualify most of the state from rural broadband funding was a boastful and inaccurate submission from one cable broadband reseller that claimed they served virtually all of Mississippi. Nobody bothered to question the veracity of their submission or verify it. Now the governor’s office is involved in efforts to scrub the inaccurate broadband map they consider more a fantasy than reality on the ground.

With the FCC preparing to launch the second phase of the Connect America Fund with up to $1.8 billion of available funding per year over five years, the money sharks are in the water circling one another.

Cable operators and wireless ISPs are asking the FCC not to hand out money to their competitors and phone companies are returning fire claiming those providers are lying about their coverage areas and have restrictions on service.

Companies ranging from Comcast to small, independent cable operators working with the American Cable Association are filing objections to the existing map. Wireless ISPs, often family-owned, are even more worried what will happen if phone companies like Windstream get federal dollars to upgrade their DSL service while unsubsidized WISPs are left to compete on their own.

In fact, the Competitive Carriers Association argues wireless providers are best positioned to make use of the unspent funds to deploy rural wireless broadband immediately.

“Wireless carriers offer the best opportunity to bring much needed broadband services to unserved and underserved areas, and it only makes sense for the FCC to consider proposals from wireless carriers,” said CCA president Steven K. Berry. “Many of our members are ready and willing to build out these networks, but depend on [financial] support in order to do so.  Wireless remains underfunded, and this could be an opportunity for the FCC to provide significant support for the services consumers want most.”

Not if the USTA and Windstream have anything to say about it. Both are on the attack in comments filed with the FCC:

WISPs: “Coverage should be independently verified before such areas are considered ineligible for Connect America funding. Like satellite providers, WISPs often have capacity caps and service quality issues, including unpredictable degradation from third-party interference from common devices such as cordless phones, garage door openers and microwave ovens when WISPs use unlicensed spectrum. The sustained speeds WISPs offer, particularly during busy times, also tend to be slower than those offered by [phone company broadband], and certainly slower than the 4Mbps downstream standard required of future recipients of federal funding.” — U.S. Telecom Association

The USTA also attacks WISPs for their usage caps, which they claim should disqualify them from serious consideration because their networks are technically and realistically inadequate to service today’s broadband consumer.

Cable “Competitors”: Windstream claims the bare existence of a cable operator alone should not disqualify the phone company from funding. Windstream suggests cable companies in its service areas may only serve one or two customers in a census tract, not really offer service at all, or provide sub-standard broadband that is so bad, nobody will do business with them.

Windstream proposes its own competition test: “In many areas [...] with an alleged presence of an unsubsidized competitor, Windstream has received no requests in the past two years from customers for telephone number ports that are accompanied by cancellation of the customer’s Windstream broadband service. In other words, despite the alleged presence of a competitor providing service at speeds of at least 3/768 in areas where Windstream itself does not provide service exceeding 3/768, Windstream has not received a single request in two years in an entire area to port a phone number to a competitor and cancel the associated Windstream broadband service. Windstream submits that the lack of such porting requests throughout an entire area over a reasonable historical period is strong evidence that there is no competitor providing 3/768 or better service in that area.”

The independent phone company proposes that alleged unsubsidized competitors offer proof they are actually providing service before the FCC excludes an area from funding consideration.

“Here is our view.” — Phillip Dampier

Consumers are free to share their own views with the FCC on these matters by filing their own comments here. The Proceeding Number you will need is 10-90. It is generally easier to create a .PDF, standard .txt file, or Microsoft Word document and attach it to the submission form. Your comments will be publicly visible and posted to the FCC website.

Stop the Cap! feels the FCC should not renege on its commitment to fund rural providers that will guarantee customers will receive at least 4/1Mbps service. This barely adequate minimum will require phone companies to upgrade their facilities to next generation DSL technology that can support future speed upgrades. Compromising on lower speeds gives phone companies the option to deploy outdated early generation DSL that cannot be upgraded easily. In a positive development, many phone companies seem willing to commit to these upgrades with some financial assistance.

Funding should also be available to the provider that can deliver the best broadband service at the lowest cost. As urban and suburban customers have learned, that service often does not come from the phone company. Cable operators willing to commit to rural broadband upgrades should not be disqualified from funding, nor should community-owned providers who want to build their own networks.

We have also repeatedly complained about broadband mapping that lacks a formal mechanism to clearly verify coverage and speeds independent of the ISP supplying the data. Providers have an incentive to artificially boost or reduce coverage, particularly if it means the difference between qualifying for federal broadband expansion funding or disqualifying a competitor because the provider can falsely claim they already offer the service.

Our thanks to Cassandra Heyne, who dubbed the current situation an FCC ‘maptastrophe.’

Other stories of interest:

1. A Look at Broadband Numbers in the United States: DSL Hurting Phone Companies
2. AT&T Hints Wireless Will Be AT&T’s Rural Broadband Solution; ‘Customers Will Pay More’
3. Telephone Companies Bilking Consumers for Fatter Revenue Is as Simple as “ABC”
4. Universal Service Reform Proposal from Big Telcos Would Rocket Phone Bills Higher
5. Telco’s Ethernet Over Copper Can Deliver Faster Speeds, If You Can Afford It