For those who tried to watch the live stream from this past Monday’s Internet Town Hall from Toronto, it was a process that demonstrated the limitations of broadband service in Canada.  Evidently the hotel broadband connection was inadequate for the task, and the stream suffered ongoing video and audio problems for the duration.

An audio podcast version has now become available and is included below.  Because the event runs nearly two hours, you may wish to download the audio and listen on the go.  If you want to listen here, remember that the audio player will only work as long as you remain on this page.

Internet Town Hall On Canadian Broadband/Net Neutrality Issues – Toronto, June 8, 2009 (1 Hour 50 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Comcast apparently doesn’t like Verizon invading its home turf.  The Philadelphia-based cable company and the New York-based telephone company are engaged in an all-out ad war in southeastern Pennsylvania, and Verizon is calling “foul.”

Comcast replies turnabout is fair play, telling the Philadelphia Business Journal:

“Verizon’s been running a negative campaign against Comcast for years and its response to our campaign shows that they can dish it out but they can’t take it. As might be expected, the better the advertising and the more traction that it gains with consumers, the louder the competitor will object,” said Jennifer Khoury, Comcast spokeswoman.

So what ad put Verizon over the edge? Apparently it wasn’t the Verizon sales-stalker who invades people’s cars, front lawns, and demands credit card numbers of women at their doorstep.  No, it was the fact that Comcast depicted a typical Verizon FiOS installation as resembling a chaotic home lawn invasion, complete with heavy ‘yard wrecking’ equipment, life-threatening recklessness, and a monthly bill so prolific in pages, it requires a forklift to deliver.

That did it.

“These ads have people ripping up property, putting lives in danger and suggesting that this is typical of FiOS installations,” Eric Rabe, Verizon’s senior vice president for media relations, said. “That is an outrageous characterization and it has to stop.”

Rabe wasn’t sure if Verizon would sue if Comcast doesn’t knock it off.  The two companies are “having conversations,” according to Rabe.

While they talk, let’s explore the offending ad, plus several others from both sides.  It must be nice to live in a heavily competitive market.  Too many of us do not.  Comcast limits monthly usage to 250GB.  Verizon FiOS has no limit.

[flv width=”640″ height=”360″]http://www.phillipdampier.com/video/Comcast FiOS Bashing Ad 1.flv[/flv]

More video follows below…

… Continue Reading

Robert Cyran, writing for BreakingViews, is concerned about the profit capacity of telephone and cable companies in the coming years.

Noting that wired, high speed services often account for more than half the revenue of providers, anything that challenges those margins could provoke hostile reaction from Wall Street, dissatisfied with diminishing returns.

Cyran specifically calls out Frontier Communications, FairPoint Communications, and Qwest for not having wireless (mobile phone) divisions and for their high level of debt.

He’s also been absorbing Sanford Bernstein’s views on the telecommunications industry, which typically guarantees Verizon fiber-to-the-home cost bashing.  And yes, it’s in there:

True, in urban areas where Verizon and AT&T are laying optical fibre, their fixed-line businesses are doing relatively well. Customers like super-fast internet connections, and the companies can pump bundles of services such as voice and television through it. But in rural areas, fibre is prohibitively expensive to lay, and customers without high-speed service options have more reason to rely solely on a mobile phone.

Verizon and AT&T won’t escape unharmed. Verizon is spending about $4,000 per customer to lay fibre.

Verizon is spending money on fiber service that customers like and are generating healthy revenues, but the fiber optics “harms” Verizon.  At least the bashing is consistent.

Cyran claims cable’s biggest problem is that margins for their broadband divisions have been slowly dropping.  Should customers defect en masse to competitors, things could get bad fast:

And when businesses like these with high fixed costs see customers defect, margins can contract quickly and even go negative.

One way to guarantee mass defections is to try to gouge consumers with Internet Overcharging schemes.  In markets where equivalent levels of service are available, customers have the option of leaving the Overcharger behind for a more customer-friendly option.  Unfortunately, not every market has equivalent competitors.

Cyran’s predictions for the future?  Big troubles for Frontier, FairPoint, and Qwest who he predicts will see ongoing declines in their cash flow and increasing difficulty in paying back their debts.  The companies will also struggle with the limitations of aging copper infrastructure to provide advanced class services (high speed broadband, video, and telephone) customers increasingly expect.  In larger communities, many customers will leave for competitors who can provide those services (in these cases that means the cable company).  In rural communities, customers will increasingly rely on cell phones as their only telephone line.

Fairpoint’s stock has fallen about 70% over the last 12 months and Hawaiian Telecom, which Carlyle bought in 2005, filed for bankruptcy at the end of last year. Yet Quest and Frontier’s stocks both still trade at more than 10 times estimated 2010 earnings. Since there’s little chance customer defections from wired telecom businesses such as theirs will stop, their stocks could have much further to fall.

The United Kingdom is the latest country to face the downside of arrogant Internet service providers throwing hissyfits when people actually use their broadband connections.  When broadband service providers entice investors with promises of fat returns, assuming most people won’t actually use those high speed connections for anything except web page browsing and e-mail, they get mighty upset when they catch their users watching online video instead.

One of the benefits of broadband is that it provides fast speeds to let people do more than what they used to with dial-up access.  That happens to also be one of the major selling points to get customers to part with a significant sum of money each month for the service.

They just don’t want you to use it.

British Telecom (BT) is the latest ISP to complain that the BBC’s iPlayer, which allows British residents to stream TV and radio programming on demand, and YouTube are using their broadband pipelines, but not paying them anything to do so.

That conveniently ignores the fact that their customers throughout the UK are paying them to deliver that connectivity, providing them with a handsome return.

Internet Service Providers not content with earning money from one side, now increasingly want a piece of the action on the other.  It’s the equivalent of making a long distance call, but asking both the person calling -and- the person called to pay a fee.

Since the companies providing the content consider the payment demands ridiculous, ISPs have started singling out certain types of traffic on their network and slowing it down, ruining picture quality and annoying their customers trying to access the content.

BT implemented a “Fair Use” policy for one of their broadband packages which lets them cut the speed of online video from the normal 8Mbps down to 896kbps between 5pm-12am each day.  BT claims that’s enough to watch online videos, but that very claim would negate any benefit from slowing down the connection.  How many TV shows do people stream at the same time on the same connection?

In fact, BT’s policy does impact on the quality of the video streamed to the viewer.  The iPlayer is capable of sensing your broadband speed and reducing the quality of the stream to match the speed you have available.

Of course, should the BBC agree to pay BT some sort of transport fee, they might find their way clear to take the speed bumps out of their way.

A founding principle of Net Neutrality is to treat online content equally when transporting it.  Your stream from the BBC should not be hampered while a stream from someone else is not, just because they paid extra.  Are bandwidth costs increasing?  No, they are decreasing.  There is no compelling argument to prevent providers from keeping up with demand.  If they want to earn money from content, they can produce their own and provide it to subscribers on equal terms.

FairPoint customers pay $25 fee to stop automatic payment withdrawals FairPoint failed to make, causing accounts to fall past due

By late March, those customers who had dial tones from their FairPoint lines began to grow concerned about the newest nightmare from the company that took over telephone service across three New England states.  Billing problems began immediately after FairPoint converted to its own billing systems, and customers noticed.

The company explained it had a “loss of data” when their own billing system went online, and information from Verizon’s old billing system never made it to the new FairPoint system.

The result was loss of confidence in FairPoint, as customers grew increasingly concerned about inaccurate bills, lost payments, and as one New Hampshire couple discovered, the company’s inability to process “automatic payments” from customers on time, generating past due bills.  Concerned about the impact late notices will have on their credit rating, they spend $25 to get their bank to stop automatic payments that FairPoint failed to make on time.  WMUR reports:

[flv width=”480″ height=”360″]http://www.phillipdampier.com/video/WMUR Manchester Fairpoint Customers Report Problems With Phone Service 3-30-09.flv[/flv]

In Vermont, customers frustrated with bills that never arrived wanted out.  As one customer working in Saint Johnsbury discovered, there was no way to reach the company to tell them to cancel service.  Vermont state regulators finally grew tired of FairPoint’s Public Relations excuses.  They demanded evidence service was improving.  WCAX reports:

… Continue Reading