When Broadband Service Is Slower Than Carrier Pigeons: Africa Struggles With Capacity Issues

Phillip Dampier September 14, 2009 Broadband Speed, Video 4 Comments

Speedy internet connections have yet to take off in many parts of South Africa because of a shortage in bandwidth.

One leading internet provider says it is not to blame for the slow connection, but frustrations have led one IT group to adopt an unusual method of delivery.

Al Jazeera’s Haru Mutasa reports on the pigeon that beat the internet in Johannesburg.

Service providers across the continent blame the expensive and slow Internet reality for much of Africa on a shortage of connectivity, particularly between Africa and the rest of the world. One African-owned firm, Seacom hopes to change that with the introduction of a new fiber optic cable that went live in July. The new connection enhances service between much of East Africa, including South Africa, Tanzania, Kenya, Uganda and Mozambique. The cable also provides a new path to reach Europe and Asia at speeds superior to what used to be common across Africa.

But while bandwidth may slowly be on the increase, savings are much harder to find. Businesses routinely pay $600 per month for 1Mbps service. But some providers suggest that does represent savings. Satellite service at the same speed is priced at an average of $3,000 per month.

Consumers in South Africa find broadband pricing very high, with most relying on Telkom, the nation’s primary phone company, for DSL service. Usage caps are prevalent across the continent as well, stifling the development of African broadband services and making services like online video all but unaffordable.

Africa's Internet Connectivity

Africa's Internet Connectivity

Thanks to Stop the Cap! readers Jeff, Bones, Terry, and a few others who let us know about this story.

Moving Towards Flat Rate Mobile Phone Calling Helps Deflate “Pay For What You Use” Broadband Pricing Argument

Phillip Dampier September 14, 2009 Competition, Data Caps, Editorial & Site News 6 Comments

All-you-can-eat buffets, steak dinner vs. salad check splitting, electric and water service meters, toll highways with trucks vs. Mini-Coopers….  The justifications for Internet Overcharging representing “fairness” in broadband pricing have involved just about every analogy the broadband industry can come up with, all designed to make you think sticking a bigger bill to someone else down the street will somehow make your broadband bill smaller.

To convince sucker people into “billing fairness” that doesn’t actually reduce your pricing but could dramatically increase it is a tricky proposition.  To make it work, they have to convince you of a broadband boogeyman up the street who is using up all your Internet and making you pay for it.

As the Re-Education effort continues among the astroturfer and industry PR crowd, the one service broadband providers strenuously avoid comparing themselves to is your local telephone or cell phone provider.  That’s ironic, considering telephone companies move your calls around much the same way Internet traffic moves from point to point.  It’s the closest comparative service around, but your Internet provider doesn’t dare use it in their analogies, because the entire argument for Internet Overcharging schemes falls apart when they do.

While some in the broadband industry want to take your flat rate pricing away, the telephone and cell phone industry is working harder and harder to move to flat rate pricing. Many traditional phone companies now peddle their own unlimited nationwide calling phone plan for $20-40 a month.  Even some of the same broadband providers that want to take away your unlimited broadband service continue to mail blizzards of postcards and saturate the airwaves with marketing for their “talk all you want” unlimited phone plans.

In the mobile phone industry, an all-out price and feature war has erupted, as providers offer practically unlimited local and long distance calling.  No more buckets of minutes to count, no more overage penalties, no more worries about putting off calling until the evening or weekends to protect your minute allowance.

In the past week, major providers have fallen all over themselves with new unlimited calling plans.  Let’s take a look at today’s mobile calling landscape:

cing_logoAT&T: Last Wednesday, AT&T launched A-List, primarily in response to Sprint’s new Any Mobile, Anytime (see below).  A-List lets customers add up to five numbers on an individual plan or up to 10 shared numbers on a FamilyTalk plan for unlimited calling to and from any phone number in the United States.  The new feature begins September 20, and customers can change their A-List members at any time.  Since customers often make the vast majority of their calls to a select group of people, it’s easy to get virtually unlimited calling that doesn’t exhaust your minute allowance.

boostmobileBoost Mobile: Back in January, Boost Mobile, the prepaid mobile phone service using the Nextel system (certain areas also provide Boost on Sprint’s network), launched a $50 unlimited calling plan that also includes unlimited handset data use, unlimited text messaging, unlimited walkie-talkie use, no roaming, no hidden fees, no contract and no credit check.

cricketwirelessCricket: Cricket has always had a business plan catering to the prepaid user looking for generous or unlimited calling.  The company heavily emphasizes its package bundles, such as their $45 monthly plan that offers unlimited calling, unlimited text, video and picture messaging, unlimited mobile web browsing, and free 411 service.  The downside is their more limited coverage area, operating primarily for customers in urban and adjacent suburban areas, and providing almost no rural coverage at all.

metropcsMetroPCS: Similar to Cricket, MetroPCS aggressively prices unlimited calling plans and bundles in its more limited service areas.  For $40 a month, customers enjoy unlimited long distance calling, unlimited text and picture messaging, and web access.  That pricing is comparable to many wired phone lines with a package of phone features without unlimited long distance.  MetroPCS operates with a similar approach to Cricket – provide good coverage in the urban and suburban areas they focus service on, but usually ignores rural or more distant suburban areas.

platinumtelPlatinumTel: Operating on the Sprint network, PlatinumTel is another prepaid provider offering unlimited calling, but with some important differences.  For $50 a month, customers enjoy unlimited calling to any domestic phone numbers, unlimited text messaging, etc.  But the service also provides unlimited roaming off their network, so if you get outside of Sprint’s coverage area, but are able to get a signal from another provider, you can still make and receive calls without incurring huge roaming fees.  You also get 100MB of included data (a small additional fee adds more data).

straighttalkStraight Talk (from TracFone): If you’ve been to Walmart, you have probably seen TracFone phones and prepaid top-up cards at their stores.  TracFone is another provider that operates on someone else’s cellular network.  Their Straight Talk service operates on the robust Verizon Wireless network, providing excellent coverage in most areas except most of Kansas, Nebraska, Nevada, Mississippi and western Texas.  A $45 monthly fee brings unlimited minutes and text messages, but only 30 megabytes of data for data-enabled phones.

sprintnextelSprint Nextel: Already offering unlimited calling to other Sprint mobile customers, the third largest national mobile phone company last week introduced Sprint Any Mobile, Anytime. It allows you to call and receive calls from any cell phone on any network in the USA unlimited for free. You’re not limited to just one network or one calling circle. The feature is now automatically added to the Sprint Everything Data plans starting at either the $69.99. The plan also comes with unlimited text messaging and data. The new Any Mobile, Anytime will be especially popular with younger people who have already abandoned traditional landline telephone service and rely exclusively on mobile phones.  You literally cannot exhaust your minute allowance calling these people.  In fact, the only way to burn your minutes under this plan is to roam outside of Sprint’s network or call people on traditional wired phone lines.

tmobileT-Mobile: T-Mobile offers the myFaves Minutes plan, which gives customers unlimited minutes to any five numbers of your choice on any network, mobile or landline (excludes toll-free/900 numbers).  It’s easy to use T-Mobile as an unlimited wireless phone provider assuming the majority of your minutes are spent talking to up to five numbers every month.

Verizon-Wireless-LogoVerizon Wireless: Already offering unlimited free calling to other Verizon Wireless customers (there are a ton of those), the company also introduced Friends & Family in February. With an eligible plan, customers have unlimited calling to a select group of numbers outside their standard mobile-to-mobile calling group, including landlines. This gives single line accounts up to 5 numbers to choose from on plans with 900 or more minutes, and family plan accounts up to 10 numbers to choose from on plans with 1,400 or more minutes.

virgin-mobileVirgin Mobile: Virgin Mobile relies on Sprint’s network, and with Sprint Nextel’s planned purchase of Virgin Mobile, which the company hopes to complete this November, it may soon become Sprint Nextel’s in-house prepaid service.  Virgin Mobile introduced its Totally Unlimited calling plan on April 15.  For $50 a month, customers get unlimited calling.  For an additional fee, unlimited texting is added, along with mobile data options.

It’s difficult, at best, to make the kind of analogy the broadband industry wants to regarding “paying for what you use” when one of their closest cousins is competing hard to give you “all that you want for one price.”

Update: 9/15 — Jayne Wallace, a representative for Sprint Nextel, wrote to clarify “Sprint Nextel has not yet purchased Virgin Mobile…we do expect the deal to close in November. As of now, we are publicly held. Also since you mention broadband, we’ve also applied the pay as you go pricing here with Broadband2Go, the only nationwide prepaid broadband product available.”  The article text under Virgin Mobile has been adjusted to reflect the planned purchase.

Doubletake: Company With 5GB Limit in Acceptable Use Policy Promises “Near-Unlimited Bandwidth Capacity” to West Virginia

bullJust like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them.

This time, Frontier is issuing a self-serving press release touting their investment of some $4 million dollars in its broadband networks in Charles Town and Princeton, West Virginia.  But the best part was the claim the upgrades would “offer customers fast broadband speeds and near-unlimited bandwidth capacity.”

In Princeton, 44 miles of fiber-optic cable will connect all Frontier High-Speed Internet (HSI) equipment to the exchange`s main switch, and 37 additional miles of fiber cable are being installed in the Charles Town exchange. These upgrades will allow Residential HSI speeds of up to 6 Meg and Business HSI speeds of up to 12 Meg. The upgrades will allow provisioning of Metro Ethernet service of up to 100 Meg, resulting in very high data speeds for private networks among multiple business locations.

These upgrades are all well and good, and are perhaps more than urban-focused Verizon was willing to do in the state, but before West Virginians get too excited by the words “fiber cable” and “near-unlimited bandwidth capacity,” it might be wise to consider the implications of transferring an entire state’s telephone business to a company that still insists on defining an “appropriate amount of usage” on that near-unlimited network at a piddly 5GB per month.

The company also promoted their “computer giveaway” program:

Recognizing that the lack of a personal computer is a barrier for many families, since 2006 Frontier has provided more than 10,000 free computers to qualifying customers in West Virginia. A large percentage of the computers went to first time computer households, who also benefited from free on-site installation.

To the uninitiated, that may suggest a benevolent phone company handing out free computers to the needy with no strings attached.  In fact, this was a Frontier customer acquisition promotion.  Customers signing up for a bundle of telephone and broadband and/or satellite service could qualify for a free basic Dell Netbook (valued at under $400), if they are in good standing with the company, agree to a “price protection agreement” holding them to the company for two years (or facing a nasty early termination fee running several hundred dollars), and also pay a handling fee:

Customer pays handling charges and taxes totaling $45. Customers must subscribe to a new package of Frontier residential local service with features, Unlimited Nationwide or Statewide Long Distance voice-calling and qualifying High-Speed Internet service. Requires a two-year Price Protection Plan on Frontier services (excludes satellite TV) with a $300 early termination fee. Offer available while supplies last. Frontier reserves the right to substitute a comparable Mini Laptop. Other offers available for existing High-Speed Internet customers. Applicable taxes and surcharges apply. Electronic or other written contract signature for Frontier services is required. Some Frontier services are subject to availability. Installation charges may apply. Unlimited U.S. Long Distance minutes are for residential voice usage and exclude 900, international, directory assistance and dial-up Internet calls.

For a whole lot of West Virginia, broadband service means one thing – DSL from the phone company.  Satellite broadband is costly, capped, and has terrible customer satisfaction ratings.  Cable television is a dream for significant parts of the mountainous state.  Do West Virginians want to risk their broadband future on a company that insists on an Acceptable Use Policy with a 5GB usage limit in it?

Residents of Rochester, New York know Frontier Communications all too well.  They’ve been our local telephone company since being absorbed by Citizens Communications after the colossal downfall of Global Crossing, which took ownership of the formerly independent Rochester Telephone Corporation.

Don’t let dreams of fiber dance too much in your head.  Frontier routinely installs fiber, but only between their central offices and remote equipment that helps reduce the distance between telephone switch equipment and the copper wiring out on the telephone poles.  It does help provide the potential of speed increases for DSL service by reducing the length of copper wire DSL travels on, but by no means should imply West Virginia will see fiber to the home in their near future.

If Frontier Communications lacks the means and the will to wire New York’s second largest economy and third largest metropolitan area with more than 1,000,000 residents with fiber to the home, don’t think for a moment they’re going to be any hurry to light up the state of West Virginia.

Indeed, for many residents of the Flower City, the bloom is well off Frontier’s rose, trapping this community in a broadband backwater with a telephone company unwilling and/or unable to provide the kind of 21st century broadband service that is presently being provided in several other upstate cities as Verizon installs its FiOS fiber network.  For Rochester, and for too many other cities, the broadband superhighway from the phone company has little more than tumbleweeds blowing across.

This site was founded last year when Frontier introduced its 5GB usage cap, and we coordinated a consumer response which forced the company to pull back from its enforcement.  But the threat still looms over the heads of their customers from coast to coast as long as it remains a part of their Acceptable Use Policy.

The time has come for Frontier to banish the 5GB language from its Acceptable Use Policy once and for all and stop toying with Internet Overcharging schemes altogether, especially as it seeks to bring the threat of those schemes to millions of Americans that may find their only realistic broadband option coming from this provider.  Otherwise, it’s time for consumers to get on the phones and tell their elected officials and public utility commissions how they feel about getting broadband service from a phone company that tells them:

Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period. The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Newsbusters’ Net Neutrality Nonsense – Paranoid Ravings Do Injustice to Conservatives

Phillip Dampier September 11, 2009 Editorial & Site News, Net Neutrality 3 Comments

dampier1I usually don’t spend a whole lot of time debunking the more crazy conspiracy theories about Net Neutrality because I presume most online users are smart enough not to be suckered into sideshow distractions, usually paid for by providers trying to wave shiny keys at consumers to get them to support things exactly opposite their own best interests.  Unfortunately, there are a few shills out there who insist on trying to conjure up bizarre conspiracy theories about Net Neutrality representing some sort of Obama Administration/left wing takeover of the Internet.

When Newsbusters, a conservative media watchdog group, bought into this (and also sprang for the deluxe undercoatings, fabric protection, and deluxe floor mats), it was time to fire up the Debunk-o-matic once again and set the record straight.

What is particularly insulting is the ongoing effort to try and co-opt conservatives into this corporate protection circus, when truth be told, conservatives should absolutely be in favor of Net Neutrality for the same reasons any other person, regardless of where they fall on the political spectrum, should be — it protects their rights to be able to speak out on the issues that concern them the most, judged on the quality of their content, not on how much money they can pay to be sure those views can travel unimpeded to interested readers across the country and beyond.

Put on the rubber boots, because we’re going to splash through some inch deep puddles:

Enter the similarly-misnamed ‘net neutrality’ movement, which advocates total government control of Internet browsing. Net neutrality would forbid Internet service providers from regulating traffic on their networks, and would place that regulatory control in the hands of the FCC.

While the left bemoans restrictions by private companies on their subscribers’ use of the Internet, progressives have few qualms with allowing the federal government a say in what we can or cannot see, do, or say on the Internet.

The centralized control of Internet use by the federal government would provide a powerful tool for the censorship of websites deemed politically unfavorable. The current administration’s labeling of right-wing fringe groups as ‘extremists’ and potentially national security threats, and the labeling of town hall protestors as ‘political terrorists’ suggests that the realm of impermissible internet use could conceivably include groups that espouse intense opposition to federal policies.

I think author Lachlan Markay has been stuck in a parallel universe, like in that Star Trek episode, because he defined Net Neutrality the exact opposite of its reality.

The FCC can’t even get rational limits on cable system ownership to survive court review.  How Markay believes a naked attempt by the FCC to regulate political content on the Internet will pass muster requires something more than simply writing alarmist claims it will happen because he says it will.

The feeble effort to link town hall protesters and Obama conspiracy theories to the issue of Net Neutrality is a transparent effort to co-opt conservatives into a cause that means standing with the providers waiting to throttle their broadband speeds and charge their favorite websites more money.  I don’t believe for a second conservatives trust the local cable or phone company to do the right thing by them, as they continue to be stuck with ever-increasing bills for channels they don’t watch and certainly don’t want to pay for and phone features they don’t want or use, but end up paying for anyway.

Though no elected net neutrality advocate would ever suggest that the movement intends to regulate content, pundits on the left have been far more forthcoming. In March, a blogger at the Huffington Post lauding net neutrality wrote, “We have a very rare opportunity right now to lock in a progressive advantage in Internet communications, information sharing, and Netroots mobilizing.”

Markay attempts to bolster his argument by linking to a Huffington Post blogger that supposedly lets it all hang out in public — conspiracy revealed, case closed.  He assumes his readers won’t bother to click on the link, because if they do, they’ll discover Markay’s source didn’t have to be linked via HuffPost, he could have just turned around to the guy figuratively sitting at the desk behind him and quoted him directly.  Yes folks, he linked to a “Contributing Editor for NewsBusters.org,” the very site Markay writes for.

Seton Motley isn’t the go-to-guy for the quality expose either.  Indeed, Motley himself quoted from Joseph A. Palermo, another HuffPost blogger who penned a piece that proved he didn’t really understand Net Neutrality either.

Palermo instead advocated that progressive causes use broadband to bypass the “media filter” and talk to audiences directly.  Motley saw the words “Net Neutrality” in the headline and figured he’d done his job for the day.

Not so much. Not one of these people appears to understand what Net Neutrality is all about.

Net Neutrality is completely above the partisan divide because it insists, regardless of content, if it’s legal it should not be impeded by a broadband provider and should be allowed to travel unfettered across their wires.  Indeed, it also demands that the Internet be a true democracy of ideas, not one of entrenched interests with lots of money that can buy their way onto the fast lane while others make due with a potentially slower “free lane” that some providers proposed.

There you have it, straight from the horse’s mouth. The left is seeking net neutrality as a means of consolidating control over the Internet, the same way it sought consolidated control over the airwaves with the Fairness Doctrine, and the same way it is now seeking that same objective in the guise of ‘diversity’ and ‘localism.’ Those on the center-right should not be fooled into thinking that ‘localism’ or ‘net neutrality’ promote free enterprise or free speech.

Yes, three people who completely misunderstand the basic premise of Net Neutrality have weighed in and passed judgment on Net Neutrality. Palermo wasn’t writing about Net Neutrality and it should have not been in his headline.  Motley went along for the ride and assumed Palermo knew what Net Neutrality was, and then reflexively attacked just because Palermo plays for the blue team and Motley plays for the red.  Markay just provided the frosting for this big cake of wrong and added even more rhetorical sprinkles on top.  All that’s missing from this recipe for disaster is a provider to come on by and overcharge everyone for a piece.

The true risk of consolidation of control of the Internet isn’t coming from the federal government, it is coming from the providers themselves.  Where Markay has no concrete examples of actual government abuse, I do have real world examples of what happens when Net Neutrality protection is not guaranteed by law.  Providers in Canada, where Net Neutrality does not exist, uniformly throttle the speeds of certain content, and at least one provider directly blocked access to a website because of a political/business dispute the site had with that provider.

What should really scare conservatives is not having Net Neutrality.  These policies guarantee the right for all Americans to speak their minds and share their views, even those polar opposites Glenn Beck and Janeane Garofalo.  Let the best ideas win.

It Begins: Wall Street Analyst Calls for Comcast & Time Warner Cable to Merge

Phillip Dampier September 10, 2009 Comcast/Xfinity, Competition 8 Comments
Bazinet

Bazinet

Citigroup media analyst Jason Bazinet is among the first Wall Street investment analysts to call for the mother of all cable mergers – Comcast snapping up control of Time Warner Cable, respectively the nation’s largest and second largest cable operators.  Comcast reported having nearly 23.9 million customers at the end of June; Time Warner Cable said it had about 13 million customers.

In a research note issued today, Bazinet argued that a merger would result in major cost savings for both operators, including $1.6 billion dollars in savings possible from volume discounts for cable network programming to $1.1 billion in savings from employee layoffs, reduced marketing expenses, technical and customer service support, billing, and combining equipment purchases, among other things.  The total net present value of the synergies would come to around $11 billion to $12 billion. That’s not far from Time Warner Cable’s current market value of about $14 billion, according to The New York Times.

A super-sized Comcast would also be able to leverage lower prices when competitively necessary to keep a price advantage over satellite television and telephone company TV, according to Bazinet.

Both Time Warner Cable and Comcast have not publicly indicated any interest in combining forces.  Aside from the regulatory headaches probable from a more skeptical Obama Administration that might aggressively counter such a merger, Comcast Chief Operating Officer Stephen Burke questioned whether the cost savings were anywhere near as high as Bazinet speculated.

Multichannel News quoted Burke:

“We would like to get bigger if the economics were right,” Burke said. “Its pretty hard for me to see how there would be synergies on the programming side or on the hardware side when you go from 24 million subscribers to 27 [million] or 30 [million].”

Time Warner CEO Glenn Britt refused comment.

Still, Wall Street investors were interested.  Time Warner Cable stock shot up 3.5% this afternoon, while Comcast’s rose just a few cents during afternoon trading.

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