A telecom industry mouthpiece claims candidates lost at the ballot box because of Net Neutrality.

Scott Cleland, a paid mouthpiece for the nation’s Big Telecom companies, claimed last week’s election results were a national referendum on Net Neutrality broadband reform, and Americans ran to the polls to defeat it.

“So the best available national proxy vote gauging political support for [that] vision of net neutrality lost unanimously 95-0,” Cleland said, referring to 95 Democratic candidates who pledged to “protect network neutrality,” all of whom lost.

Cleland, who chairs the cable and phone company-financed “Netcompetition.org” website, thinks Americans hurried to polls to deliver a message against broadband reform policies at a time when the country continues to face nearly 10 percent unemployment, tight credit, poor housing values, concerns about government spending, and a continued sour outlook things will improve anytime soon.

The Net Neutrality pledge came from the Progressive Change Campaign Committee (PCCC), a liberal group trying to elect like-minded legislators to office in a year that saw major losses for Democrats, especially in the House.  The 95 signers were mostly candidates challenging open or Republican seats, often in conservative districts.

Take Ann Kuster, who sought office in New Hampshire’s conservative 2nd district.  Won by Democrat Paul Hodes in the Democratic “wave election” of 2006, Hodes relinquished the long-standing Republican seat to run for Senate (and lost).  His immediate predecessor, Charlie Bass, a “Republican Revolution” victor swept into office in 1994, held the seat for a dozen years.  Bass ran to reclaim his old seat against newcomer Kuster, who faced considerable criticism in the Democratic primary for her lobbyist ties to Big Pharma.  Despite Kuster’s alienation of the Democratic party base because of her prior career lobbying against drug pricing reform, she lost the election last week by just a single point.

One issue definitely not in contention in the 2010 election in New Hampshire’s Second District was… Net Neutrality.  In fact, the last time the issue flared up in a significant way in western New Hampshire was in 2006, when Bass was criticized for his pro-telecom industry views opposing the broadband reform policy.

Charlie Bass recaptures his seat in Congress

Bass did not even make Net Neutrality an issue this year.  Even Kuster gave short shrift to the issue on her campaign website, putting her telecommunications policy views at the bottom of a list that emphasized jobs, the economy, foreign policy, and health care.

PCCC co-founder Adam Green noted Cleland’s political allies, including Bass, kept their mouths shut about the issue during this year’s elections.

“The only significant thing about Net Neutrality in 2010 is that 95 Democratic challengers felt confident enough to actively tell voters they support this pro-consumer position,” Green observed.  “Zero candidates across the country felt confident enough to actively tell voters they opposed Net Neutrality for the obvious reason that opposing the free and open Internet would be a ridiculously stupid political move.”

Net Neutrality is still an obscure topic for many broadband users, unaware of its meaning or the implications of having net protections swept away by broadband providers intent on boosting profits.

One thing is certain — as a result of last week’s elections, Republicans in the House and Senate, who have almost universally opposed against Net Neutrality, will almost certainly be able to block legislative efforts to enact such reforms into law for the next two years.

Telecom-focused Heavyweight Faces Surprising Loss

Boucher

In the House, the surprising loss of Rep. Rick Boucher (D-Va.) in last week’s election will have a major impact on telecommunications policies.  Boucher, first elected in 1982, is a veteran of battles between consumer groups and big cable and phone companies.  Boucher championed home satellite dish-owner rights at a time when major cable companies were attempting to lock down competition from 10-12 foot backyard satellite dishes. Boucher also fought for net privacy regulations, rural telecommunications services, and supported broadband expansion.  His loss means uncertainty for telecommunications policy, as he gives up his leadership of the House Communications, Technology and the Internet Subcommittee.

“I was saddened to learn of the electoral loss of Representative Rick Boucher in the House,” Federal Communications Commission member Michael Copps said in a statement praising Boucher for nearly three decades of public service. “He has been an extraordinary public servant and a great leader across the whole gamut of telecommunications issues.  His dedication to broadband, his leadership to reform Universal Service to make sure the wonders of advanced telecommunications are available to all our citizens, and his uncommon ability to bring contesting parties to the table to forge workable compromises are the stuff of legend.”

Virginia's largely rural 9th District encompasses the western third of the state

Boucher’s loss could have dramatically negative results on rural Americans with respect to telecommunications services.  Boucher advocated heavily for the telecommunications challenges faced in rural areas like his own 9th District, located in western Virginia bordered by West Virginia, Kentucky, North Carolina, and Tennessee.  Inside his district, broadband service has been challenging to provide in many areas.  The city of Bristol decided to build its own broadband service, a fiber to the home network constructed by Bristol Virginia Utilities.  The network has been so successful, the southern half of the city — actually located in Tennessee — is following Virginia’s lead.  Boucher was a strong advocate for such community networks.

Boucher’s replacement is expected to be either Rep. Anna Eshoo (D-Calif.) or Ed Markey (D-Mass.), both of whom serve more urban districts.

But did Boucher go down because of his strong advocacy of Net Neutrality?  Not even close.  The Bristol Herald Courier reports just one issue was almost certainly responsible for Boucher’s loss: Cap and Trade, legislation that would regulate carbon dioxide by capping total emissions and allowing polluters to trade credits among themselves.  Boucher favored the policy, his opponent opposed it.

Back to the Future Under GOP Leadership

Republican tech policy, potentially under the leadership of congressmen like Rep. Cliff Stearns (R-Florida), is expected to be “Back to the Future,” a return to a more hands-off policy advocated under the former Bush Administration.

The result will be a tech agenda legislatively frozen in place.  Republicans will be unable to pass deregulation bills or block any surprise moves by the FCC to flex its regulatory muscles, thanks to Democrats in the White House and Senate.  Democrats will be unable to enact any broadband reform policies because of “majority-rules”-roadblocks in the Republican-controlled House.  The FCC, already frightened by Congressional dissent, may be less willing than ever to declare a firm position… on anything.  That’s particularly likely with issues considered “hot buttons” on Capitol Hill.

Republicans may even seek to end spending on broadband expansion and other publicly funded projects, assuming there are any funds yet to be allocated.  It is much easier to block annual re-authorizations than to cancel funding already appropriated.

New Consumer Champion Emerging in Senate from Connecticut?

Richard Blumenthal: New consumer champion?

One potential piece of good news for pro-consumer forces is the election of Sen. Richard Blumenthal, the former state attorney general.  Blumenthal’s highly aggressive investigations into wrongdoing by technology firms are likely to continue in his new role as Connecticut’s newest Democratic senator.  Blumenthal has taken aim at privacy violations at Google and prostitution advertising on Craigslist in the past, and his interest in telecommunications consumer protection could be a big help.

For issues like Net Neutrality, all eyes are turning back to FCC Chairman Julius Genachowski, perhaps the only man in Washington with the power to deliver a free and open Internet for at least the next two years.  Will he act?

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

Sandman

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

Martin

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

Philippi's fiber optic broadband is not so fast, thanks to a bottleneck between the community and the rest of the Internet

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)

A massive fire raced through 62 apartments at the Galleria apartment home complex in Fargo, N.D., in mid-October leaving two firefighters temporarily trapped and 150 residents with nowhere to stay.

As displaced residents contemplated the loss of their personal possessions, dealt with insurance company red tape in trying to get temporary housing allowances, and coped emotionally through the devastation, Cable One, the complex’s cable operator (owned by the Washington Post), wanted to let fire victims know they were thinking of them… and the hundreds of dollars in cable equipment lost in the fire.

“We’ve been hurt too,” Cable One’s General Manager Scott Geston actually told NBC’s Today show.

Two days after the fire, Cable One started reaching out to some fire victims demanding payment for their lost cable equipment, payable with cash, check (with proper ID of course), or money order… or else.

Cash, check, or money order?

“When may we expect payment?” was the most important question on the cable company’s mind according to several residents infuriated by Cable One’s completely unsympathetic attitude.

In Fargo, local stores, churches, community groups and individuals are donating time, money, and even places to stay for displaced Galleria residents or their pets. Cable One’s disaster recovery plan is to hurry out bills for $1,000 or more for their lost equipment.

“They can… exhale rapidly on me,” writes former Galleria resident Jim who found Stop the Cap! thanks to the Washington Post‘s opposition to Net Neutrality.  “I ‘re-phrased’ that because I am sure your group has readers of all ages, but I think most can put it together.”

Jim said Cable One is trolling around looking for at least $1,000 from him for equipment incinerated in the fire.

“We are staying at a extended-stay motel on an emergency stipend and these bloodsuckers have started demanding money,” he writes. “If only my renter’s insurance agent was as aggressive in handling my claim.”

Other fire victims are reporting similar experiences of unparalleled aggressiveness by the cable operator, literally hours after the fire.

It’s also the talk of Fargo:

Some fire victims say the pain and suffering they endured from the cable company didn’t start with the fire, because Cable One provided bad service all along.  But now that the fire is over, the company’s attitude towards the fire victims shows the true extent of how low this cable company can go.

“It’s all about the money with them — they want their money, and some fellow victims tell me the company has been increasing the dollar amounts demanded,” Jim writes.

When will Jim be paying Cable One?  “When hell freezes over.”

Pets rescued from the fire at the Galleria

That’s an attitude shared by several Galleria residents.

It’s also an attitude expressed by many other cable and satellite companies who would not think of charging fire victims for equipment lost in tragic circumstances like this.  The damage to the company’s reputation would be worth more than the value of the lost equipment.

“If you have a crappy reputation to start with, there is little to lose acting like insensitive thugs in cases like this,” according to Jim.

Many residents have other issues more important than repaying the cable company for cable boxes.  Many Galleria renters with pets are discovering finding a new permanent home may mean giving up their dogs and cats — they are not allowed at most Fargo apartment complexes.

After the local and national media pounced on the story, Cable One retracted their earlier insistence on being paid… slightly.

The Associated Press reported Cable One has now agreed to “eat the cost of damaged equipment for customers with modems, telephones or digital receivers.”

But the company still demands payment for lost DVR boxes, which Geston says are worth $500 new. The company wants residents with renter’s insurance to submit claims. For those without insurance, Geston says Cable One is open to resolving the issue by determining a fair payment plan.

Customer Rick told a Fargo TV station they shouldn’t hold their breath waiting for his check. He won’t be paying them. “No. On principle, I’m not.”

[flv]http://www.phillipdampier.com/video/KVLY Fargo Cable One Wants Their Money 10-17-10.flv[/flv]

KVLY-TV in Fargo shares the story of upset fire victims horrified Cable One is demanding hundreds of dollars to replace lost cable equipment, in some cases just 48 hours after the fire.  (3 minutes)

Charlotte, N.C. Time Warner Cable customers can thank city officials in nearby Salisbury for finally provoking Time Warner Cable into boosting speeds for residents across the region.  Just as community-owned Fibrant was opening its doors for business promoting its new fiber to the home service, the area’s dominant cable company managed to steal some of their thunder.

Time Warner Cable this week announced the entire Charlotte service region, which encompasses Salisbury, is getting a free broadband speed upgrade this week.

“We substantially increased our download speeds and essentially doubled upload speeds for all of our Turbo and Standard Internet service customers,” said Mike Smith, area vice president for Time Warner Cable’s Charlotte operation.

The announcement allows Time Warner Cable to maintain its position as the fastest downstream Internet provider in the Charlotte region because Fibrant’s marketing department decided that 25Mbps service was fast enough.  No, it’s not, and Time Warner Cable showed them up.

Salisbury is located northeast of the city of Charlotte, N.C.

“This service upgrade demonstrates our commitment to deliver enhanced value to our customers. We are satisfying their thirst for more throttle,” said Smith. To access the new speeds, customers need to reboot their cable modem which is easily accomplished by leaving it unplugged for about one minute.

The company is also introducing two speed tiers in Charlotte this week. Customers will have the option of purchasing or upgrading to DOCSIS 3 Wideband Internet or Road Runner Extreme service. Wideband Internet–the fastest residential Internet experience in Charlotte–provides customers with speeds up to 50 Mbps downstream and 5 Mbps upstream for $99.95 per month.

Road Runner Extreme delivers speeds up to 30 Mbps downstream and 5 Mbps upstream for as low as $64.95 per month when bundled with any other Time Warner Cable Service.

As Stop the Cap! has strongly advised all municipal providers — there is not much point in providing fiber to the home service if you are not willing to capitalize on its benefits.  Offering a maximum speed of 25Mbps just is not going to cut it, as Time Warner Cable demonstrates.

Fibrant’s pricing models are also endangered by this week’s developments.  Road Runner Extreme delivers 30Mbps downstream for $65 a month (admittedly a bundled price) while Fibrant offers 25Mbps service for the same price (standalone service).  Fibrant still kills Time Warner on upload speed, but that’s a distinction that could be lost among many potential customers, and is easily solved by boosting download speeds as well.

Fibrant must immediately consider speed upgrades for their existing tiers to assure its value proposition and launch a new super-premium speed tier that can show off fiber to the home’s true capacity to deliver the best possible Internet speeds in the region.

Peer to peer traffic no longer represents the largest single source (by application) of broadband traffic on the Internet.  Cisco’s Visual Networking Study now finds online video streamed from websites like Hulu and Netflix to account for more than one-quarter of all broadband traffic, displacing file swapping from the number one position.

File sharing activity has routinely been used by providers dreaming of Internet Overcharging as an excuse to introduce usage limits and throttled speeds for their broadband customers.  Peer to peer software allows customers to exchange pieces of files back and forth until everyone manages to secure their own copy.  Cable operators, in particular, have complained this network traffic saturates their shared broadband lines because customers upload far more data than they would without this software.  Up to 44 percent of all upstream traffic from residential accounts comes from peer to peer traffic, according to Cisco.

Providers and their friends have started to give up on their scare stories of peer-to-peer “exafloods” and data tsunamis triggered from too many online users engaged in file swapping.  As we’ve argued for two years now, the glory days of growth in peer to peer are behind us for a variety of reasons:

1. Downloading copies of TV shows and movies, always popular on file sharing networks, has declined now that content producers are finally serving the growing market for on-demand video programming;
2. The growing popularity of downstream delivery direct to consumers has reduced wait times for downloading to near nothing — to the point where some users are abandoning peer-to-peer altogether;
3. An increasing amount of fake files filled with viruses and spyware has made peer to peer-sourced files from underground websites more risky;
4. Copyright enforcement and other legal actions have made file trading less palatable for some.

While peer-to-peer traffic is still growing along with other online usage, online video is growing far faster.

Now some want to move the goal post — blaming online video for “forcing their hand” to implement overcharging schemes.

Broadband Traffic by Application Category, 3rd Quarter – 2010

• The marked categories contain video.

Karl Bode at Broadband Reports writes that he found Sanford Bernstein analyst and cable stock fluffer Craig Moffett telling CNET that if customers cut the cord, cable broadband companies will simply turn around and begin metering broadband customers’ bandwidth. In fact, Karl adds, Moffett goes so far as to insist ISPs will have “no choice” in the matter as streaming services like Netflix gain popularity.

Instead of simply raising prices on cable broadband, Moffett said it’s more likely that cable operators would move toward usage-based pricing. That way consumers who use more bandwidth to stream movies and TV shows end up paying more per month for service than people who may be getting their video from the traditional cable TV network. Time Warner has tested usage-based billing, but the company faced a huge backlash from consumers. Still, Moffett said that broadband service providers may have no choice as bandwidth-intensive video streaming services like Netflix become more popular.

CNET’s Marguerite Reardon calls that scenario a “heads we win; tails we win” situation, especially for cable companies.

Would you tell this man you are dropping your Comcast video package to watch everything online for free? (Neil Smit, president - Comcast's cable division)

Last quarter, some companies saw the number of subscribers actually drop for the first time ever.  Now Comcast reports in its latest earnings call the same thing is happening to them — losing 56,000 TV package subscribers during the third quarter.  Comcast surveyed some of their customers calling to fire their cable company.  Most of them are not switching to a pay TV competitor, said Neil Smit, president of Comcast’s cable division.  Comcast characterized them as “going to over the air free TV,” but would you tell your cable company you are dropping their video package to watch everything on their broadband service for free?  For a lot of cable customers, that would be tantamount to calling them up and saying you are now getting free HBO on your TV.

Both companies are still denying online video is cutting into their cable TV package business, but it’s an argument some stock analysts have begun to make as they watch cable profits struggling to hit targets.  Watching extra fat profits bleed away because “broadband piggies are watching all of their TV online for free” just won’t do for folks like Mr. Moffett, who will be among those leading the call to slap limits on broadband usage to protect industry profits.  Why leave good money on the table?

But before Moffett encourages cable companies to install coin slots and credit card readers on cable modems, he has another idea: jack up the prices of broadband higher than ever while cutting video pricing, making it pointless for customers to jump ship:

“Cable’s broadband dominance opens the door for renewed share gains in the adjacent video market,” Moffett said in his report. “Cable companies could simply increase their a la carte broadband prices (since in most markets, households have no other choice for sufficiently fast broadband) and simultaneously drop their video pricing, leaving the price of the bundle unchanged, to recapture video share.”

He pointed to an example of this in Albany, N.Y., where Time Warner Cable raised its broadband price by 10 percent for its Internet-only customers to a rate just $2 below its promotional bundled rate for both services. The Internet-only price increased to $54.95 from $49.95. The 12-month promotional rate for video and data was $56.95.

Of course, Albany has Verizon FiOS breathing down Time Warner’s neck.  In late October, Verizon announced it was launching its video FiOS service in Scotia, just outside of nearby Schenectady. Bethlehem, Colonie, Schenectady and Guilderland already have FiOS phone and Internet services available, so getting a TV franchise to deliver competition to Time Warner Cable isn’t a big leap.

In Rochester (where Frontier Communications idea of video is a satellite dish), a similar promotional package from Time Warner runs $84.90 a month.

Highlights of the Cisco Report

• The average broadband connection generates 14.9 GB of Internet traffic per month, up from 11.4 GB per month last year, an increase of 31 percent;
• “Busy hour” traffic grew at a faster pace than average traffic, growing 41 percent since last year. Peak-hour Internet traffic is 72 percent higher than Internet traffic during an average hour. The ratio of the busy hour to the average hour increased from 1.59 to 1.72, globally;
• Peer-to-peer (P2P) file sharing is now 25 percent of global broadband traffic, down from 38 percent last year, a decrease of 34 percent. While still growing in absolute terms, P2P is growing more slowly than visual networking and other advanced applications;
• Peer-to-peer has been surpassed by online video as the largest category. The subset of video that includes streaming video, flash, and Internet TV represents 26 percent, compared to 25 percent for P2P;
• Over one-third of the top 50 sites by volume are video sites. There is a high degree of diversity among the video sites in the top 50, including video viewed on gaming consoles, Internet TV, short-form user-generated video, commercial video downloads, and video distributed via content delivery networks (CDNs). Video sites appeared more frequently than any other type of site in the top 50.