AT&T and Time Warner Cable’s Unnecessary Temper Tantrum in Kansas City

Phillip “You Guys Need a Timeout” Dampier

AT&T and Time Warner Cable are complaining they have gotten a raw deal from Kansas City, Mo. and Kansas City, Ks., in comparison to the incentives Google was granted to wire both cities with gigabit fiber broadband.

“It’s time to modernize our industry’s rules and regulations…so all consumers benefit from fair and equal competition,” read a statement from AT&T.

“There are certain portions of the agreement between Google and Kansas City, Kan., that put them at a competitive advantage compared with not just us but also the other competitors in the field,” said Alex Dudley, a Time Warner Cable spokesman. “We’re happy to compete with Google, but we’d just like an even playing field.”

The Wall Street Journal seemed to suggest Google was getting the keys to both cities, with grants of free office space and free power for Google’s equipment, according to the agreement on file with the cities. The company also gets the use of all the cities’ “assets and infrastructure”—including fiber, buildings, land and computer tools, for no charge. Both cities are even providing Google a team of government employees “dedicated to the project,” says the Journal.

The Google Fiber project was so desired that the local governments rolled out the red carpet. In Kansas City, Mo., for instance, the city is allowing Google to construct “fiberhuts,” small buildings that house equipment on city land at no cost, according to a person familiar with the matter.

The cities are discounting other services, as well. For the right to attach its cables to city utility poles, Google is paying Kansas City, Kan., only $10 per pole per year—compared with the $18.95 Time Warner Cable pays. Both cities have also waived permit and inspection fees for Google.

The cities are even helping Google market its fiber build-out. And both are implementing city-managed marketing and education programs about the gigabit network that will, among other things, include direct mailings and community meetings.

Several cable executives complain that the cities also gave Google the unusual right to start its fiber project only in neighborhoods guaranteeing high demand for the service through pre-registrations. Most cable and phone companies were required by franchise agreements with regional governments to build out most of the markets they entered, regardless of demand.

But the Journal missed two key points:

  1. Time Warner Cable has been granted the same concessions given to Google on the Missouri side, and AT&T presumably will also get them when it completes negotiations with city officials on the matter.
  2. Both cable and phone companies have the benefit of incumbency, and the article ignores concessions each had secured when their operations first got started.

The Bell System enjoyed a monopoly on phone service for decades, with concessions on rights-of-way, telephone poles and placement. AT&T was a major beneficiary, and although the AT&T of today is not the same corporation that older Americans once knew, the company continues a century-long tradition of winning the benefit of the doubt in both the state and federal legislature. AT&T has won statewide video franchise agreements that give the company the power to determine where it will roll out its more advanced U-verse platform, and enjoys carefully crafted federal tax policies that helped them not only avoid paying any federal tax in 2011 — the company actually secured a $420 million “refund” subsidized by taxpayers.

Cable operators also won major concessions from local governments under pressure from citizens eager to buy cable television. At the time, cable companies were granted exclusive franchises — a cable monopoly — to operate, an important distinction for investors concerned about the value of their early investments. Local zoning and pole attachment matters were either negotiated or dealt with legislatively to allow cable companies the right to hang their wires on existing utility poles. Franchise agreements permitted the gradual roll-out of cable service in each franchise area, often allowing two, three, or more years to introduce service. It was not uncommon for neighborhoods on one side of town to have cable two years before the other side could sign up. That sounds awfully familiar to AT&T U-verse today.

Google’s proposal to build a revolutionary broadband network delivering 1Gbps deserved and got the same type of treatment then-revolutionary phone and cable service won back in the day.

Time Warner Cable also won much the same treatment Google is now getting, and the cable operator has gotten $27,000 in fees refunded and will avoid another $100,000 in permit fees going forward. Time Warner Cable and Google will both receive free traffic control services during network construction — not that Time Warner Cable plans much of a change for customers in either Missouri or Kansas.

AT&T will likely also receive the same treatment, although it would be hypocritical of them to complain that Google gets to pick and choose where it provides service. Large swaths of Kansas City and suburbs are still waiting for U-verse to arrive, and many areas will never get the service. Cable operators had to wire a little further, but also benefited from years of monopoly status and network construction expenses paid off years ago when there literally was no competition.

Those paragons of virtue at Goldman Sachs are appalled Google has such a good relationship with Kansas City officials more than happy to have the gigabit speeds neither AT&T or Time Warner Cable would even consider providing.

Google’s rights “appear to be significantly more favorable than those cable, Verizon or any other fiber overbuilders achieved when striking deals with local governments in the past,” Goldman Sachs analyst Jason Armstrong told the Journal. “We’re surprised Time Warner Cable hasn’t been more vocal in its opposition.”

But then the cable company has secured most of the same benefits Google has, so why complain at all?

In fact, city officials had to browbeat Time Warner to modernize its network in ways it would have not done otherwise without the new agreement.

Both AT&T and Time Warner have every right to be concerned. Their substandard networks and high prices (along with a lousy history of customer service, according to national surveys) put them at a competitive disadvantage if Google does not make any major mistakes. Neither cable or phone company has made any noise about upgrading service to compete, and should customers begin to leave in droves, then both companies may actually have something to cry about.

The Wall Street Journal’s report on the concessions granted to Google wanders off into the Net Neutrality debate for some reason, and misses several important facts reviewed above.  (3 minutes)

Our Big Fat Telecom Monopoly: “Competition is So ’90s”; Michael Copps vs. Big Telecom

Phillip Dampier October 4, 2012 Astroturf, Competition, Consumer News, Public Policy & Gov't, Wireless Broadband Comments Off on Our Big Fat Telecom Monopoly: “Competition is So ’90s”; Michael Copps vs. Big Telecom

Copps

Americans need to stand up and say “no” to more telecom mergers and lobbying efforts that push for additional deregulation and corporate protectionism in the telecommunications sector. Unfortunately, we are in for a fight, thanks to Washington’s problem disappointing a multi-billion industry that lavishly finances political campaigns, conventions, and vacation outings.

Michael Copps, former commissioner on the Federal Communications Commission from 2001-2011 and acting chairman for the first six months of the Obama Administration ought to know.

“The consolidated world of telecom broadband did not evolve from the hand of God, the mysterious workings of natural law, or the inevitability of market-based dynamics,” Copps wrote in his essay, “Why Give Up on Competition?” “It was enabled by conscious decision-making at the federal level, largely through the abdication of its oversight responsibilities by the Federal Communications Commission over the better part of 30 years.”

In short, it did not have to turn out this way, no matter what the telecom industry and their astroturf friends have to say.

“Go to just about any telecom conference these days, and some industry maven will make the case that restoring competition to the telecom world is so 1990s,” Copps writes. “Why don’t we all just recognize the inevitable, they ask: telecom is a natural monopoly, competition is a chimera, and the sooner we flash a steady green light for more industry consolidation and less government oversight, the better off we’ll all be.”

Provider-backed ALEC advocates for the corporate interests that fund its operations.

Too many in Washington are already true believers, according to Copps, and the result is two companies controlling over 2/3rds of the wireless marketplace and a broadband duopoly for most Americans. This did not happen overnight. Enormous and expensive lobbying campaigns run for over a decade have convinced lawmakers that less is more when it comes to telecom regulation and oversight. Regulators ringing alarm bells about deregulation without sufficient competition have been picked off, says Copps, by the telecom industry-backed American Legislative Exchange Council (ALEC), which has convinced at least 19 state legislatures to wipe away authority from state public service commissions that for years have been trying to protect consumers and preserve competition.

The Telecommunications Act of 1996 was originally designed to open the telecommunications marketplace to increased competition, but also ensure a level playing field for competitors by charging the FCC to implement and enforce strong rules to keep incumbent telecommunications companies from steamrolling new competitors.

No surprises here: Michael Powell was FCC chairman during the deregulation frenzy of the first term of George W. Bush. Today, he’s the president of the National Cable & Telecommunications Association, the largest cable industry lobbying group in the country.

With the arrival of President George W. Bush, the new Republican majority at the FCC promptly began obliterating checks and balances at the behest of some of the nation’s largest phone and cable companies. The results:

  • Reselling rights and wholesale leasing of facilities to competitors were wiped away, guaranteeing monopoly control of already-established networks;
  • Opening up the long distance and local market to Baby Bell competition with their promise they would compete nationwide failed. Like Big Cable, the Baby Bells sold local and long distance only to their own customers, not to those located in another Baby Bell’s service area;
  • Instead of competing, phone companies simply bought each other. “As soon as one transaction was approved, another one came through the door,” Copps reported. “Sometimes it seemed like the merger approval business was our only business.”;
  • ” The FCC voted, over the strenuous objections of Commissioner Jonathan Adelstein and me, to remove advanced telecommunications (broadband) from the purview of Title II of the Telecommunications Act—where consumer protections, competition, privacy, and public safety are clearly mandated—and placed them instead in the nebulous and uncharted land of Title I, where regulatory authority is uncertain, consumer protections are virtually non-existent, and where the huge companies are better positioned to wreak havoc on the promise of competition,” Copps said.

To right the wrongs, Copps wants some major changes to reignite competition and return to telecom innovation, eliminating the stagnation we have from today’s cozy, barely competitive marketplace:

  1. Learn to say “no” to more industry mergers. Consolidation has not brought communications nirvana for consumers, just higher prices and fewer choices, often from a monopoly provider;
  2. Encourage innovative approaches like municipal broadband. Copps: “‘My way or nothing’ may be the mantra of the big guys, but that means no broadband in places they don’t wish to serve.” Copps wants to see the federal government pre-empt state bans on public broadband laws provider-backed ALEC has gotten through legislatures across the country;
  3. Smarter stewardship of wireless spectrum, including unlicensed spectrum use, shared spectrum, smarter technology, and a “use it or lose it” policy that pulls back unused/warehoused spectrum held by some of the nation’s largest wireless carriers.
Copps believes today’s barely competitive marketplace is a direct consequence of the regulatory policies custom-written to meet the needs of the giant corporations whose oligopoly those policies now protect. The anti-competitive marketplace can be broken up in short order if rules are implemented that meet the needs of ordinary Americans, not seven-figure corporate lobbying efforts.

DOCSIS 3.1 In Development: Up to 10/2Gbps Service Possible for Cable Broadband

Phillip Dampier October 4, 2012 Broadband Speed, Consumer News Comments Off on DOCSIS 3.1 In Development: Up to 10/2Gbps Service Possible for Cable Broadband

Even as DOCSIS 3 cable technology continues to roll-out across cable systems now offering faster Internet speeds, the next generation of cable broadband is on the way, reportedly capable of delivering up to 10/2Gbps service.

CableLabs’ DOCSIS 3.1 project will be the subject of a special panel at an upcoming cable engineer conference later this month.

“DOCSIS 3.1 specification development is a significant milestone on the industry’s road map to next-generation services,” said CableLabs chief technology officer Ralph Brown. “Our SCTE Cable-Tec Expo panel will identify the motivations, requirements and key technology building blocks under development with the collaboration of the vendor community.  DOCSIS 3.1 solutions will provide both residential and commercial cable customers with faster data rates — both upstream and downstream — that support increasingly compelling broadband services.”

The DOCSIS 3 standard allows cable operators to bond multiple channels to support faster speeds.

The new standard will incorporate changes in how cable spectrum is utilized for broadband, vastly expanding potential bandwidth. Although the standard can support gigabit broadband speeds, nobody expects cable companies to offer those speeds in the near term.

Instead, providers are more interested in addressing their upstream speed limitations. From the earliest days of cable broadband, the assumption was that customers would care far more about downstream speeds and consider uploading an afterthought. The result was a network that prioritized download speed. But as users continue to upload more multimedia content and embrace cloud storage, slow upload speeds are starting to aggravate customers.

DOCSIS 3.1 is rumored to de-emphasize the current QAM modulation cable operators use for broadband in favor of more robust technologies such as orthogonal frequency-division multiplexing (OFDM), already used by the wireless industry. Unlike interference/noise-prone QAM, OFDM uses much smaller subcarriers that work better in noisy signal conditions. Although coaxial cable is capable of delivering a large amount of spectrum to cable operators, all of it cannot be practically used because of external interference from electrical equipment, broadcast radio and television signals, and other sources. Error-correcting technologies can let operators use more of their available spectrum without reducing the quality of service to customers.

The study group working on DOCSIS 3.1 is also reviewing the incorporation of “low density parity-check” (LDPC) error correction that would efficiently improve noise rejection over today’s Reed-Solomon approach. Combining OFDM and LDPC could improve spectral efficiency up to 25 percent.

The cable industry is pressuring the study group to preserve backwards compatibility with the older DOCSIS 3.0 standard just now coming into widespread use. Some industry insiders predict cable operators will keep today’s QAM modulation for downstream speeds while boosting upstream speeds using OFDM.

Cable operators across the country are gradually moving away from analog service in favor of digital with the ultimate goal of an entirely IP-based network for television, phone, and broadband. The pressure is on for DOCSIS 3.1 to help accelerate that transformation, but most industry experts don’t believe the new standard will be finalized until at least the middle of 2013, with at least 6-12 months before equipment shows up supporting the finalized standard.

Bottom-Ranked Suddenlink Upset About Frontier’s Ad Claims Their DSL is Better

Suddenlink is throwing a hissyfit over Frontier’s aggressive advertising.

Now come on, you are both pretty… slow that is.

Suddenlink Communications is crawling mad that Frontier Communications has been hammering the cable company over their broadband speeds, which PC Magazine this week proclaimed were nothing to write home about. The cable operator successfully challenged some of Frontier’s ads with the National Advertising Division of the Council of Better Business Bureaus.

The group recommended Frontier cease making claims that its DSL service offers “dedicated” lines to the Internet in contrast to Suddenlink, which forces customers to share their connection with the whole neighborhood.

Frontier claims Suddenlink’s network can bog down during peak hours, while Frontier makes sure customers consistently get the speeds they pay for.

Many of the ads targeted customers in West Virginia, who regularly tell Stop the Cap! neither provider competing there offers particularly good service.

“Is Frontier kidding?,” says Shane Foster, a former Frontier customer in West Virginia. “I was supposed to be getting up to 6Mbps service and I was lucky to get 1.5Mbps at 2 am.”

Foster says he believes Frontier oversold its DSL network in his area, with speeds slowing even further during the evening and weekends when everyone got online. While Frontier may not require customers to share a line from their home to the company’s central office, congestion can occur within Frontier’s local exchange or on the connection Frontier maintains with Internet backbone providers.

“The technician sent to my house even privately admitted it,” Foster tells Stop the Cap!

Foster switched to Suddenlink, but he is not exactly a happy customer there either.

“Their usage caps suck, the service is slow, and their measurement tool is always broken,” Foster shares. “West Virginia doesn’t just get the bottom of the barrel, it gets the dirt underneath it.”

Frontier Communications says it has been making improvements in West Virginia and other states where it provides DSL broadband. Some areas can now subscribe to 25Mbps service because of network upgrades. Foster says he would dump Suddenlink and go back to Frontier, if they can deliver speeds the rest of the country gets.

“Sorry, but 1.5Mbps is not broadband and with their prices, tricky fees and contracts it is robbery,” says Foster. “They need to clean up their act and I’ll come back. I hate usage caps with a passion.”

Frontier says it will appeal the NAD’s decision. But Frontier might do better advertising its broadband service as usage cap free — something customers consistently value over those running Internet Overcharging schemes.

80-Year Old Richmond Woman Billed Thousands by Comcast for Porn Movies She Didn’t Order

Phillip Dampier October 3, 2012 Comcast/Xfinity, Consumer News, Video Comments Off on 80-Year Old Richmond Woman Billed Thousands by Comcast for Porn Movies She Didn’t Order

Comcast’s porn charged cable bills run into the hundreds of dollars for one 80-year old customer who claims she never ordered them.

An 80-year-old Richmond, Virginia woman has been billed more than a thousand dollars by Comcast for adult pay per view movies she never ordered.

Shirley Mascaro has been fighting with Comcast for nearly a year over an endless series of $13.99 titles that have regularly appeared on her monthly bill since February.

Mascaro not only says she never watched the movies, she has no idea how to order pay per view programming.

Mascaro refused to pay for the movies she did not order, resulting in one bill for $700. Comcast shut off her service, despite regular complaints and promised service credits for the movies.

One young Comcast employee stood in Mascaro’s living room and doubted her veracity when she claimed she was not watching titles like “Xtsy,” “Pant,” and “Juicy.”

“‘Everybody says they don’t order these moves, but they really do,'” Mascaro recalls the Comcast employee telling her.

Another employee offered that perhaps one of Mascaro’s neighbors was stealing her cable.

“Maybe they are but I don’t know,” Mascaro replied. “You need to find out.”

Mascaro suspects Comcast’s cable box might be the culprit. The charges began right after Comcast installed the box on her new television.

With no end in sight to the porn fees, Mascaro contacted WWBT in Richmond and appealed to their consumer reporter for assistance. That quickly got the attention of Comcast, who called the entire matter “an isolated problem.”

Comcast released a statement to NBC12 apologizing to Mascaro and crediting all disputed charges on her account. But Mascaro, and the TV station, are not so sure the charges will not be back. 12 On Your Side reporter Diane Walker promised to keep watching.

Mascaro also wants Comcast to send her a letter just in case the company tries to ruin her credit over the unpaid porn movies.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WWBT Richmond Elderly woman charged hundreds of dollars by Comcast for porn 10-2-12.mp4[/flv]

An 80-year-old Richmond, Va. woman’s year-long dispute over hundreds of dollars in Comcast pay-per-view-porn she says she never ordered may finally be over. WWBT reports.  (3 minutes)

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