A handful of Georgia state legislators have introduced a bill to ban community-owned broadband anywhere Internet service is available at speeds of at least 1.5Mbps — so slow it does not even meet the FCC’s new definition of “broadband.”

The so-called “Municipal Broadband Investment Act,” introduced Feb. 8 is just the latest in a series of anti-competition, corporate welfare bills designed to protect existing telecom monopolies and duopolies from facing any additional competition.

Introduced and co-sponsored by Reps. Mark Hamilton (R-Cumming), Don Parsons (R-Marietta), Ron Stephens (R-Savannah), Jay Roberts (R-Ocilla), Ben Harbin (R-Evans), and Jon Burns (R-Newington), H.B. 282 would only allow community providers to offer service where broadband is not available within a census block, a requirement that makes virtually all public broadband efforts untenable because of the patchwork of DSL service throughout the state.

Hamilton

Remarkably, the legislation also includes a penalty clause that will leave community providers liable for damages payable to corporate-owned Internet Service Providers if they dare compete with the state’s largest phone and cable companies. Local communities could even be on the hook for attorney fees paid by companies like Comcast, Windstream, and AT&T to make sure publicly owned ISPs never get off the ground.

Phone companies like Windstream are seeking federal funding from the FCC Connect America Fund that will defray up to $775 per home for new broadband hookups delivering at least 4/1Mbps service. But Georgia’s legislation will set a new standard for minimum broadband at a much slower 1.5Mbps, benefiting telephone companies like AT&T, CenturyLink and Windstream. All can claim their existing 1.5Mbps DSL lines are good enough for Georgia to consider an area “served” by broadband. That certification would make it impossible for a publicly owned provider to establish far faster service.

Stop the Cap! strongly urges Georgia residents to contact their state representative and ask that he or she vote no on H.B. 282, which is nothing more than another corporate-written and backed protectionism bill that will guarantee rural Georgia remains mired in a slow speed broadband swamp. The best way corporate ISPs can guarantee no community will rise up to compete is by providing 21st century broadband speeds and service to local residents.

The proposed bill is scheduled for its first hearing tomorrow afternoon at 4pm.

It’s time to take a look inside Time Warner Cable’s latest quarterly financial report and pick out some interesting developments that will impact customers during the first quarter of 2013.

Time Warner Cable managed 9 percent revenue growth in 2012, primarily from its broadband service, its strongest product. The company added another 500,000 broadband customers over the last year, primarily poached from telephone company DSL service. This growth in subscribers continues despite rate increases and the introduction of a $3.95 monthly modem rental fee introduced last fall.

CEO Glenn Britt noted that Time Warner Cable customers use and love their broadband service.

“The average customer used roughly 40% more capacity last year,” Britt noted.

But Time Warner Cable has plenty of capacity to handle that traffic growth.

Britt plans to leave as CEO of Time Warner Cable by the end of this year.

Irene Esteves, Time Warner’s chief financial officer noted Time Warner Cable continues to decrease its capital spending. Overall, Time Warner spent $3.1 billion on capital expenditures in 2012, or just 14.5% of its revenue. That represents a 40-basis point decrease from 2011. The bulk of that spending was on business services, primarily from the costs of wiring business office parks and buildings for cable. Less than 12% of Time Warner Cable’s spending targeted residential services.

“Overall, we expect capital intensity will continue to decline modestly, with full year capital spending around $3.2 billion in 2013,” Esteves told investors.

Time Warner’s new modem fee is earning the company a major boost in Average Revenue Per User (ARPU). The average Time Warner customer now spends $103.79 a month for service, an increase of 6.3%. Three-quarters of that increase is attributable to the modem fee alone.

Customers are clamoring for higher broadband speeds. At the end of 2012, Turbo, Extreme and Ultimate subscribers comprised over 23% of the company’s residential broadband customer base, up from 19% a year ago and 11% three years ago.

Britt, expected to retire by the end of this year, noted the company’s biggest challenge during his tenure continues to be programming costs. But the company is contributing to that problem itself, spending $110 million in 2012 on its new regional sports networks in southern California, which feature the Los Angeles Lakers and the Los Angeles Dodgers.

“Our programming costs per subscriber has grown 32% in the last four years,” Britt complained. “Over that same period, the Consumer Price Index has risen by 9%. So the math is pretty simple, programming costs have been rising at more than three times the rate of inflation. Our residential video ARPU increased 16% over that same period, so we’ve effectively raised pricing a little faster than inflation but only half as fast as programming costs have risen.”

The rising price of cable service has caused Time Warner to lose a larger number of customers, particularly when promotional pricing deals expire. The company has retrained its retention agents to avoid losing customers to the competition as new customer promotions expire. Time Warner noted some of its strongest competition is coming from AT&T U-verse promotional pricing for double-play offers in Texas and the midwest. In Kansas City, Time Warner continues to dismiss competition from Google Fiber as largely irrelevant, although the company has boosted its maximum broadband speeds to 100Mbps in that city.

Time Warner’s TV Everywhere app.

Other highlights:

♦ TWC completed its DOCSIS 3.0 broadband enhancement rollout in 2012 and began a process of reclaiming bandwidth previously dedicated to the delivery of analog video. These steps will allow the company to continue to devote more network resources to enhancing broadband service, including handling more traffic and selling faster service.

♦ Optional usage-based tiers are available from most Time Warner Cable regions. The offer of a $5 monthly discount for customers keeping their usage under 5GB each month has received almost no interest from subscribers. Sources inside Time Warner tell Stop the Cap! the company never expected much customer interest, but the offer allowed Time Warner to introduce the concept of usage-based pricing without alienating current customers.

♦ Time Warner Cable’s “TV Everywhere” platform continues to expand. Various TWC TV apps now offer as many as 300 streamed video channels on both smartphones and streaming set-top boxes. In December the company expanded its offering to include video on demand, and last week those on-demand programs became available on the desktop. Time Warner expects to grow its on-demand library and introduce local television channels to its streaming apps in 2013.

♦ Time Warner is trying to improve the standing of its residential telephone service with the introduction of a Global Penny plan, which offers international calling to over 40 countries for one cent per minute. This helps the company market its phone service to subscribers choosing its various ethnic and foreign language television packages.

♦ One-hour service windows are now available in most Time Warner Cable areas. In New York City, a 30-minute window is available for the first appointment of the day. The company is also expanding its self-install packages, letting customers do simple equipment installations themselves. The equipment is delivered free of charge by package delivery services and can be returned by mail as well.

♦ Although Time Warner is earning more from its broadband customers, the introduction of a modem rental fee did cause a significant number of customers to disconnect service, presumably in favor of a competitor. But the extra money in the cable company’s pockets more than makes up for the loss.

♦ Time Warner Cable’s forthcoming “hosted navigation product” represents a major change for the company’s set-top boxes. The “gateway” device will include 1TB of storage, can record up to six shows at once, and will automatically transcode video for an IP platform, letting customers view recorded and live programming on set-top boxes or wireless devices like smartphones and tablets inside the home. Expect to see the new device arrive in the second half of this year in many Time Warner cities.

You paid for it, but you can’t access it.

Once again, taxpayers are underwriting expensive state-of-the-art fiber broadband networks that are strictly off-limits to residential and business customers living with substandard broadband on offer from the phone and cable company.

The Obama Administration’s big plans for broadband expansion have proved underwhelming for consumers and businesses clamoring for access across rural America. Local media reports deliver false promises about improved broadband access from new fiber networks under construction. But all too often, these expensive, high-capacity networks go underutilized and offer service only to a select few institutional users.

Case in point: Last week, the expensive Iowa Communications Network (ICN) went up for sale to the highest bidder.

At least $320 million taxpayer dollars have been spent on more than 8,000 miles of fiber connecting government buildings, schools, and healthcare facilities. Your tax dollars paid for this network, but unless your kids go to a school connected to ICN or you happen to work for a government agency, you are not allowed to use it.

One state legislator admitted even at the best of times, ICN never exceeded more than 10 percent of its available capacity. What an incredible waste of a precious resource!

In a recent public-relations effort, ICN has been used by military families videoconferencing with their loved ones serving overseas. But for the rest of Iowa, the network hasn’t done much of anything to improve Internet service in homes or businesses.

The Iowa Communications Network is off-limits to ordinary Iowans.

David Roederer, director of the Iowa Department of Management said the idea was never to let the state serve as an Internet provider, a fact that makes life wonderful for the state’s dominant telecommunications companies. But the decision has left rural Iowa in a broadband ditch.

“The vision was this would be something available in all 99 counties […] It would connect the schools and institutions in places that the private marketplace wasn’t,” Roederer told the Sioux City Journal. “We don’t buy satellite or cable television for everybody.”

But that is like arguing the state should only build roads and bridges for a select handful of government-owned or institutional vehicles, not those driven by the ordinary taxpayers who paid for it.

Too many politicians remain completely out-of-touch with what broadband really represents: critical infrastructure for the 21st century digital economy.

The city of Bettendorf only did marginally better, eventually allowing businesses on their fiber network while keeping local residents away. Capacity is hardly a problem: Bettendorf’s fiber network did little more than help the city manage traffic signals before they admitted a few business customers.

Butch Rebman, president and chief operating officer of Central Scott Telephone told The Quad City Times consumers don’t need fiber broadband speeds.

Apparently someone does. Bettendorf’s fiber network is now being upgraded to provide up to 10Gbps service, but it remains off-limits to local residents, raising questions about the commercial vendor that only sells to area businesses.

City administrator Decker Ploehn claims businesses use more broadband than residential homes (a ‘fact’ not in evidence), and that there were already companies specifically targeting the residential market. Those providers have performed so well that local citizens petitioned to access to the city network instead.

Think about that for a moment. A significant number of Bettendorf residents in red state Iowa preferred buying broadband service from the government, not America’s worst-rated cable operator Mediacom. So much for proclaiming private companies always do it better.

Meanwhile in Illinois, local officials are hurrying to spend $15.6 million in federal taxpayer funds on the Central Illinois Regional Broadband Network — another institutional network designed for the exclusive use of schools, local governments, and hospitals.

…but not people and businesses.

Scott Genung, director of telecommunications and networking at Illinois State University says the network’s leaders never planned to compete or undersell what other broadband servers are providing. Instead, their plan is to deliver high-capacity, high-speed broadband to rural Illinois. But taxpayers who are paying for the network are being bypassed, even when the fiber cable supplying the service hangs on utility poles in their front yards. Apparently, for the rural consumer, DSL from the phone company is plenty good enough.

In the community of Normal local officials admit they, like everyone else, are currently stuck with very slow DSL service. But Normal city manager Mark Peterson is celebrating CIRBN’s potential benefit to 52,000 local residents — which include connecting local fire stations, municipal swimming pools and the local water plant.

While those uses may be beneficial,  none of them are likely to boost the digital economy of Normal. There will be no entrepreneurial development of new online businesses that require a higher speed network than the local phone company will provide. Only the most limited at-home tele-learning courses will be available, and no improvements in broadband are forthcoming for home-based businesses and telecommuters. Local residents will continue to drift along at whatever snail-speed service is on offer from private companies that see more profit investing in larger communities.

Although these networks provide measurable benefits to the institutional users they serve, the fact remains they can be obscenely expensive on a per-user basis. Since our tax dollars fund these networks at a time of budget-busting deficits, would it not make better financial sense to open these networks up for public use? If a local community decides they want to provide better service than the local phone and cable company utilizing these networks, why not let them? If a community does not want to spend the money but a neighborhood agrees to pay for connectivity and wiring, why not allow them?

Restricted-use institutional fiber broadband has too often resulted in vastly oversized networks that go underutilized. It is time taxpayers have the right to use networks that they paid to build, particularly in rural areas where the only alternatives are stonewalling phone and cable operators who charge top dollar for bottom-rated service, if they provide service at all.

Want to increase your home’s value? Advocate for better broadband in your neighborhood.

A British survey out this week echoes results from North America, finding nearly two-thirds of house-hunters are willing to pay up to 3 percent more for a house in a well-wired broadband area, with more than one-fifth willing to pay between 4-10 percent more for areas with faster broadband.

Younger buyers are the most interested in acquiring property in areas with the fastest service. At least 40% of 18-24 year olds consider broadband availability and speeds an important factor when considering a home purchase. More than one-third of men rate bad broadband as a potential deal breaker. For women, just over a quarter say that lousy broadband may force them to move on to other choices.

“We are living in the digital age and as such more people are choosing to work from home,” said Martin Ellis, an economist at Halifax, a British research firm. “But as well as this it’s a part of our everyday lives with web browsing and streaming television commonplace. As a result we find people are increasingly prepared to pay a premium for homes with a good broadband signal, and this is likely to remain a factor when choosing where to live.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bill Moyers Susan Crawford on Why U-S- Internet Access is Slow Costly and Unfair 2-9-13.mp4[/flv]

Susan Crawford, former special assistant to President Obama for science, technology and innovation, and author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, joins Bill to discuss how our government has allowed a few powerful media conglomerates to put profit ahead of the public interest — rigging the rules, raising prices, and stifling competition. As a result, Crawford says, all of us are at the mercy of the biggest business monopoly since Standard Oil in the first Gilded Age a hundred years ago. “The rich are getting gouged, the poor are very often left out, and this means that we’re creating, yet again, two Americas, and deepening inequality through this communications inequality,” Crawford tells Bill. (26 minutes)