The Denver Post this morning did a major disservice to its readers in a heavily slanted editorial objecting to the reclassification of broadband service to restore the FCC’s traditional oversight authority over Internet providers.

In their piece For Web and Broadband Regulation, Less is More, the editors at the Post delivered less facts and more industry talking points.  It even mislead readers by quoting from two Republican FCC commissioners, completely ignoring the Democratic majority that would likely prevail in a vote on the matter.

The editorial forgets to mention why this debate is taking place.  Readers should have been made aware the broadband industry the Post celebrates as successful under a light touch regulatory philosophy effectively-won total deregulation in a game changing court decision that stripped the FCC’s authority to provide checks and balances over today’s duopoly broadband market.

Ed Whitacre, AT&T

Comcast sued after the FCC punished the company for deliberately interfering with customers’ broadband speeds for certain Internet applications (despite Comcast’s initial denials).  The Post characterizes such behavior on the part of the nation’s largest cable company as “only a couple documented issues, which were quickly resolved.”  How does the Post think these were resolved?  The FCC used the authority it now no longer has to pressure Comcast to stop.  What stops the next “documented issue?”

AT&T’s former chairman and CEO Ed Whitacre gave Americans plenty to worry about in 2005 when the nation’s largest phone company infamously declared that popular web sites should not be expected to use AT&T’s “pipes for free.”  That attitude is still being defended today by millions of dollars in lobbying, fake grassroots astroturf campaigns, and industry bought-and-paid-for “research studies.”  Why spend all that money on a “resolved” issue?

But the most offensive part of the Post‘s piece was a completely dishonest attempt by the editors to imply there is widespread bipartisan opposition to common sense broadband regulation like Net Neutrality.

We had the opportunity Wednesday to talk with two FCC commissioners about the dual proposals for reform. They voiced concerns about an FCC move to redefine broadband networks as highly regulated telecommunications services.

Meredith Attwell Baker, who was nominated to the commission by President Obama, called the reclassification dangerous, adding it was a “brand new model.” FCC Commissioner Robert M. McDowell, nominated by President George W. Bush, worried about the unintended consequences that might come out of an additional layer of regulation.

On the right side of the Commission, the two Republican members Meredith Attwell Baker, a former telecom industry lobbyist and Robert M. McDowell.

How clever of the Denver Post to dangle the implication that Baker, being appointed by Obama, is somehow an ally.  She is not.  The Post only spoke with the two Republican minority commissioners for its editorial.  Atwell was appointed by Obama under long-standing FCC rules which require that only three Commissioners may be members of the same political party.  There is no practical difference between Atwell and McDowell.  Why didn’t the newspaper speak to at least one of the majority Democrats on the Commission, all of which are expected to support Chairman Genachowski?  Because that would have dramatically weakened the provider’s editor’s arguments and talking points.

Of course, there is nothing “brand new” about Title II authority.  It has been used successfully to oversee today’s increasingly deregulated landline marketplace to protect rural Americans who don’t have competitive choices should their phone company provide abysmal service.  What was new was the defective mechanism used by former FCC Chairman Michael Powell, under the Bush Administration, to oversee broadband using what the courts determined was phantom authority.

There is nothing about those regulations “ill-suited” to restoring the FCC’s lost authority, which is the ultimate game plan here.  Providers have fed talking points, which editors at the Denver Post apparently devoured, suggesting everything from unintended consequences to the sky falling down should the FCC be able to implement its National Broadband Plan on its terms.  Providers want the power to control and implement broadband deployment on their terms — the same ones that have left millions without any real broadband options at all, and the rest of us with slow service at high prices.

We hope that process ends with succinct and limited rules that apply to broadband providers, but leave them relatively unfettered so the Internet continues to be a place for entrepreneurs, thinkers and dreamers to pursue their ideas.

These are all noble goals, but they cannot be achieved if a handful of giant broadband providers start extorting fees from content producers and engaging in other abusive behaviors.  The Post seems to think America is a world-leader in broadband, yet we are not.  This country is now handily beaten by several Asian nations and even cities within the former Soviet Union and its east European bloc.  Just this week Ookla released a speed index report that tells the truth about America’s broadband experience:

Here are the top 10 U.S. cities and their corresponding 30-day average speeds:

1. San Jose, Calif. 15.02 Mbps
2. Saint Paul, Minn. 14.53 Mbps
3. Pittsburgh, Pa. 14.18 Mbps
4. Oklahoma City, Okla. 12.12 Mbps
5. Brooklyn, N.Y. 12.10 Mbps
6. Tampa, Fla. 12.05 Mbps
7. Bronx, N.Y. 12.01 Mbps
8. New York, N.Y. 11.85 Mbps
9. Denver, Colo. 11.68 Mbps
10. Sacramento, Calif. 11.34 Mbps

The global top 10:

1. Seoul, South Korea 34.49 Mbps
2. Riga, Latvia 27.88 Mbps
3. Hamburg, Germany 26.85 Mbps
4. Chisinau, Republic of Moldova 24.31 Mbps
5. Helsinki, Finland 20.58 Mbps Mbps
6. Stockholm, Sweden 19.97 Mbps
7. Bucharest, Romania 19.68 Mbps
8. Sofia, Bulgaria 18.99 Mbps
9. Kharkov, Ukraine 18.15 Mbps
10. Kaunas, Lithuania 17.46 Mbps

With evidence like this, the editors at the Post need to get out from behind those telecom talking points and visit today’s real broadband world.

Take the money and run

The Federal Communications Commission’s approval of Frontier’s takeover of 4.8 million Verizon landline customers in 14 states comes a year after the company announced the deal.  Frontier joins three other independent phone companies — FairPoint Communications, Windstream Communications, and CenturyLink zealously trying to grow their companies with additional mergers and acquisitions to avoid being swallowed up themselves.

What is common among all four companies is they rely heavily on dividend payouts to keep their stock price as high as possible.  That was a formula for disaster for FairPoint, the first of the four to end up in bankruptcy after a similar deal with Verizon in northern New England caused the company to falter.  Service and billing deteriorated, customers fled, and promises for better broadband were broken.  Now Frontier is following in FairPoint’s footsteps with more than 4.8 million new customers Frontier hopes they can swallow.

The FCC’s statement approving the merger reads like a press release for all involved, and delighted FCC Chairman Genachowski, who called these meager requirements “robust”:

Coming one week after the final state approval for the transaction, the FCC’s Order holds the applicants, Verizon and Frontier, to enforceable voluntary commitments, including:

• Extend faster broadband to more Americans: Frontier will significantly increase broadband deployment for the lines involved in this transaction, only 62 percent of which are broadband-capable today. Specifically, Frontier will deploy broadband with actual speeds of at least 3 Mbps downstream to at least 85 percent of transferred lines by the end of 2013, and actual speeds of at least 4 Mbps downstream to at least 85 percent of the transferred lines by the end of 2015, with all new broadband deployment offering actual speeds of at least 1 Mbps upstream.

Frontier's Fast One: 3 Mbps DSL Service with a 5GB Monthly Usage Allowance

Frontier’s broadband commitment gives the company a full five years to meet the bare minimum speed considered to constitute broadband in the National Broadband Plan.  One hopes Frontier doesn’t break into a sweat offering a piddly 3 Mbps service to homes using yesterday’s DSL service until then.  While Verizon’s rural castoffs get stuck eventually with 4 Mbps DSL, many of the company’s remaining customers are enjoying 50Mbps service over an all fiber network.  The FCC is accepting an urban-rural divide for broadband which will benefit the phone companies while leaving rural customers in the dirt.

Deploy fiber to libraries, hospitals, and other anchor institutions: Frontier will launch an anchor institution initiative to deploy fiber to libraries, hospitals, and government buildings, particularly in unserved and underserved communities.

Fiber for these locations sure, but no fiber for you or I.  Frontier, like most other telecom companies, loves to promote the benefits of fiber without actually deploying it to homes.

Promote competition: Frontier and Verizon have made a series of commitments to protect wholesale customers, including honoring all obligations under Verizon’s current wholesale arrangements that are in effect at closing.

Since wholesale customers often depend on the same network other customers do, if a company doesn’t deliver robust broadband into a state like West Virginia, there isn’t a robust service to sell to those wholesalers.

Improve data quality and collection: Frontier will make available to the Commission data on its broadband deployment progress at an unprecedented level of detail to enable effective monitoring of Frontier’s compliance with its commitments.

The Commission concluded that the commitments that applicants have offered, coupled with monitoring and enforcement by the Commission, will minimize the risks of harm and ensure that this transaction is in the public interest.

Phillip "Living on the Frontier" Dampier

Considering how weakly the FCC is committing itself to protecting rural customers from being dumped into the broadband backwater Frontier has on offer (complete with the 5GB monthly usage allowance), does collecting statistics help when things go sour?  Regulators collected statistics in New England when FairPoint failed, but that didn’t get service levels back until Maine, New Hampshire, and Vermont threatened to toss FairPoint out.  Now the company is in bankruptcy and regulators are negotiating which of the promises FairPoint made can be let go ‘for the sake of the company.’

That’s why it’s so ironic to read editorials that proclaim the FCC is on some sort of power grab when they seek to restore what meager authority they exercised over broadband before a DC Court effectively excluded broadband oversight from their portfolio.

It will be a good day when federal agencies like the FCC start worrying first and foremost about consumers instead of how to make a parade of overpriced mergers and acquisitions succeed for the companies involved.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WANE Ft Wayne Verizon hanging up on local landlines 5-24-10.flv[/flv]

WANE-TV in Fort Wayne warns viewers their landline company is about to change asVerizon vacates the area by July 1st.  (1 minute)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/CWA Verizon Dont Take the Money and Run in WV.flv[/flv]

Too late.  The Communications Workers of America ran this ad spot asking the West Virginia governor to intervene and stop the sale.  (1 minute)

A classic phone hundreds of thousands of Americans are still paying a monthly equipment fee to lease

Do you or someone you love still have an old looking rotary dial or traditional bell ringer phone mounted to the wall or installed in the bedroom?  Are you sure they still aren’t paying a rental or leasing charge for that phone?  Many customers, particularly the elderly, have no idea they need not continue to pay fees up to $90 a year for a phone manufactured at a time when color television was a novel concept.

A legacy of the old Ma Bell phone monopoly, telephone companies used to own every piece of equipment attached to their lines.  Individual customers would pay a monthly fee to lease telephone equipment that was approved by the phone company to work with their service.  By the early 1980s, nearly every American home had a kitchen wall phone and one or more extensions, usually installed in the living room or bedroom.  Manufactured by companies like ITT, Stromberg-Carlson, AT&T or Comdial, these phones were built to last… and pay for themselves many times over by unaware consumers who don’t realize the days of renting phones are long gone.

After the breakup of AT&T, most phone companies began telemarketing campaigns trying to convince consumers to buy their formerly leased phones.  Those who did now own these classics outright.  Many who didn’t returned them and bought their own new phones.  But more than a million consumers did neither, and continue to pay phone equipment rental fees to this day.  Even as phone companies abandoned the phone rental business, not everyone got the message.

Most phone companies sold off their remaining leased customers to third party companies long ago, including QLT Consumer Lease Services in Miami and Ft. Worth.  QLT has several hundred thousand customers paying quarterly lease fees for telephones often years old.  The company itself admits the majority of its customers are retired, elderly consumers.

QLT markets refurbished bell ringer phones at some surprisingly high prices:

• A traditional desk or wall retro-rotary dial telephone, which many under 30 have never seen before, costs $4.45 per month to rent.
• The glitzy-for-its-day lighted dial Princess phone costs $6.95 a month.
• Big button touchtone phones run $8.85 a month.

Those quarterly fees add up

QLT informs customers they cannot buy the phones at any price — they must lease them.

QLT claims its customers appreciate the familiar phones from an earlier era, and the bell ringers are louder, too.  Customers can exchange a broken phone within a day after the company is notified, if they can figure out how to install the replacement.

But it’s an extraordinarily high price to pay for classic phones, especially when replacements can be purchased outright for less than $20.  But many QLT customers don’t realize they have that option.  While the company also pitches decidedly non-phone-related services like roadside assistance plans and health care discount cards, it doesn’t spend any time or effort informing customers they can buy their own phones.

So next time you visit your older relatives and see a classic phone, perhaps it would not a bad idea to ask if they’re still paying for it.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WBAL Baltimore MD Many Older Residents Still Renting Phones 5-25-10.flv[/flv]

WBAL-TV in Baltimore found one woman still paying $90 a year for a phone that had been attached to her kitchen wall around the time Ronald Reagan was inaugurated president of the United States.  (4 minutes)

Bowman is the public affairs manager for Wilson, N.C.

Brian Bowman reports from Save North Carolina Broadband that S1209, Senator Hoyle’s municipal broadband killer bill, was yanked from yesterday’s meeting, apparently to “study the issue some more.”  Perhaps elected officials are studying the implications of passing this anti-consumer nightmare on their chances in the next election.  Let’s deliver the death blow to S1209 by getting on the phones and e-mail again today!

You need to keep the pressure on with calls and letters to all of these officials, reminding them you are watching this bill very closely and are waiting for them to cast their “no” vote, but will also at least accept a vote that yanks the bill from consideration for the rest of 2010.

Remind them this bill was quickly foisted on the Senate Finance Committee, and its wide-ranging implications are too important to North Carolina’s high tech future to let this bill rush into law.  Tell them the only real assault on your wallet comes from big telecom providers who will stop at nothing to make sure municipal competition never sees the light of day — municipal competition that is the only realistic way many North Carolina towns and cities can deliver 21st century broadband service that will help get them back on track for economic success.

Don’t sit back and think someone else will do the writing and calling for you.  We made a difference last year because everyone called and wrote.  We need that to happen again!

Here is the list:

Rep. Dan Maffei (D-NY)

Rep. Dan Maffei (D-New York) has begun to worry broadband consumers in his western and central New York district.

In April 2009, when Time Warner Cable’s announced Internet Overcharging experiment was upsetting customers in Rochester, Maffei claimed he was concerned about limiting broadband usage for customers in the area.  But when former Rep. Eric Massa introduced legislation to ban unjustified usage caps and consumption billing, Maffei told his constituents he wasn’t interested in Massa’s approach:

Thank you for contacting me regarding H.R. 2902, the Broadband Internet Fairness Act. I appreciate hearing from you and welcome the opportunity to respond. The Broadband Internet Fairness Act was introduced by Representative Eric Massa (NY-29) on June 16, 2009, and was referred to the Committee on Energy and Commerce. The bill would authorize the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) to review volume usage service plans of major broadband internet service providers to ensure that such plans are fairly based on cost.

When Time Warner Cable announced in April that Rochester would be used as a test market for charging Internet users based upon consumption usage, I, along with Representative Massa, opposed this policy. We helped persuade Time Warner to abandon the plan in the area. At that time, Representative Massa also introduced the Broadband Internet Fairness Act.

Other utilities, like water or electricity, charge customers based on usage, but Internet users have traditionally been charged a flat fee for unlimited access to the web. The Broadband Internet Fairness Act would require Internet Service Providers that want to implement usage-based pricing plans to go through several traditional regulatory hurdles. While I share many of the goals of Representative Massa’s legislation, I do not believe passing this stand-alone bill is the right approach at this time.

Of course broadband is nothing like water or electric utilities.  In fact, Maffei’s inclusion of that reference is a classic talking point of the telecom industry.  Notice they, and Maffei, didn’t mention telephone service — the one utility that provides flat rate calling for most Americans.  It also happens to be the utility most comparable to broadband service!

New York's 25th Congressional District

But Maffei made a bad situation worse when he joined 72 other House Democrats co-signing a letter from Rep. Gene Green (D-AT&T), urging FCC Chairman Julius Genachowski not to fight a court decision overturning the agency’s ability to conduct broadband oversight.

The letter represented one giant talking point — the false premise that enforcing a fair, free, and open Internet with Net Neutrality would somehow stifle investment in broadband expansion.  Yet AT&T was required to honor the very same principles when it merged with SBC, and managed to remain a multi-billion dollar powerhouse well positioned to expand broadband service to additional customers in its ever-growing service areas.

The fact the broadband industry is a duopoly for most Americans — one that can threaten to pull back on service if it doesn’t get its way in Washington — is just one more reason the industry requires more oversight, not less.

Yet Rep. Maffei stood alone as the only member of the western New York Congressional delegation to sign his name to the agenda of big cable and phone companies.

Perhaps the congressman has forgotten these facts which trouble broadband consumers across western and central New York:

• Rochester, NY was the only city in the northeast where Time Warner sought to conduct an Internet Overcharging experiment, made possible because of limited competition in the Rochester market;
• Rochester’s other broadband provider, Frontier Communications, insists on a monthly usage allowance of just 5GB per month in its Acceptable Use Policy;
• Verizon FiOS has suspended expansion indefinitely and the service will never be available in most of the 585 area code where Frontier operates, and it will take years for most of the rest of his Syracuse district to see the service reach those areas;
• Time Warner Cable increased its broadband rates in 2010, as did Verizon;

Green’s letter dances around the real issue — telecommunications companies are spending millions to oppose pro-consumer reforms and stop a return of oversight authority the FCC lost after a recent court decision.  Without this authority, the FCC cannot implement the National Broadband Plan’s insistence that American providers not block or impede network traffic.  These Net Neutral policies preserve net freedom.  The FCC cannot even require that providers tell the truth about broadband speeds and include the company’s terms of service in plain English.

Western New York is a hotbed of consumer activism on broadband issues, particularly because we are actual victims of provider abuse.  No one knows more than we how critical 21st century broadband is to the transformation of this region’s perennially challenged economy.

Rep. Maffei needs a reminder this is a hot button issue for consumers from Irondequoit to Manlius.  Perhaps he just doesn’t fully understand what’s at stake here.  You need to remind him.

We’ve included a suggested letter you can use to help write your own.  For maximum effectiveness, include some of your own personal stories, challenges, and frustrations with your local broadband provider.  Feel free to share yours in the Comments section.

Dear Rep. Maffei:

I was extremely disappointed to discover you signed your name on a letter written by Rep. Gene Green urging FCC Chairman Julius Genachowski not to restore oversight authority over broadband.  While Rep. Green’s letter illustrates he’s mostly concerned about the well being of AT&T, Verizon, Time Warner Cable and Comcast, as a consumer I am more concerned about the broadband duopoly that exists in Rochester & Syracuse.

If the FCC does not regain its ability to oversee broadband by reclassifying it under Title II — as a telecommunications service (which it very clearly is), the FCC can effectively do nothing to stop broadband provider abuses, such as Comcast’s notorious speed throttle on customers using certain Internet websites and services. It took an FCC investigation to finally get the cable company to admit the truth — it was interfering with customers’ broadband speeds.  The oversight power the agency had was just what was needed to convince Comcast to stop.

Unfortunately, a DC Circuit Court recently disagreed it had that authority and effectively stripped it away.  Chairman Genachowski is simply seeking a return to the status quo before that court decision was handed down.  He’s not asking to regulate broadband anything like telephone service.  In fact, he’s insisted on a “light touch.”  That’s better than today’s court-imposed total-hands-off reality.

By signing Rep. Green’s letter, you effectively tell us you don’t support Net Neutrality protections that guarantee providers cannot censor or impede web traffic.  You also do nothing to protect consumers from other provider abuses.  Considering what residents of Rochester went through last year fighting a Time Warner Cable scheme that would have tripled broadband prices for the same level of service, I’m shocked you of all people would be a supporter of big telecom’s agenda.

Telecom companies are claiming that if regulations enforcing Net Neutrality are enacted, investment will suffer and broadband expansion will be slowed.  Yet AT&T was required, as part of its merger with SBC, to respect Net Neutrality for several years.  The company flourished, broadband was offered to more customers than ever, and investors liked what they saw.

The record in western New York is clear — Time Warner Cable was willing to limit its customers access to broadband service, Frontier already does in its terms and conditions, and Verizon FiOS deployment has been suspended indefinitely.  For too many of us, there are too few choices.  In fact, the only thing we can be assured of is higher pricing and a strengthened duopoly.

I strongly urge you to remove your signature from Rep. Green’s letter and get on board with consumers like myself in your district who believe deregulation and oversight failures have given us nothing but nightmares — from Wall Street to BP’s oil spill.  Let’s not make another mistake in handing cable and phone companies unfettered permission to abuse their customers.

Please get back in touch with me as soon as possible on this important matter.

Rep. Dan Maffei told constituents he was concerned about Time Warner Cable’s Internet Overcharging scheme proposed in April 2009.  At a town hall meeting in Irondequoit, New York, he admitted Time Warner Cable held near-monopoly power over consumers in Rochester.  What changed his tune when he signed on to Rep. Gene Green’s anti-consumer letter to the FCC? (April 9, 2009 — 2 minutes)

Rep. Dan Maffei’s Contact Information

Washington, D.C. Office
1630 Longworth HOB
Washington, DC 20515
Phone: (202) 225-3701
Fax: (202) 225-4042

Syracuse Office
P.O. Box 7306,
1340 Federal Building
Syracuse, NY 13261
Phone: (315) 423-5657
Fax: (315) 423-5669

Irondequoit/Rochester Office
1280 Titus Avenue
Rochester, NY 14617
Phone: (585) 336-7291
Fax: (585) 336-7274

[Update: 11:30pm EDT: Free Press reports Rep. Maffei accepted $29,000 in contributions from telecom companies, including Verizon, Comcast, and AT&T.]