[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bill Moyers How Big Telecom Increases Our Digital Divide 2-5-13.mp4[/flv]

Susan Crawford appears this weekend on Moyers & Company (check to see if it airs on a local public television station) to explain the real reason America has a digital divide with broadband have’s and have-not’s. The heart of the problem is America’s largest telecom companies, who are only interested in picking off the low hanging fruit — urban customers they can wire cheaply for service and demand monopoly or duopoly-style high prices. Rural America is being left behind, putting profit ahead of the public interest.

America has seen this before during the era of electrification, when power was denied to small towns and family farms. Then the country decided electric service was a utility and must be provided to all Americans. So it should be with broadband. Only the same ideology that argued rural Americans should pick up and move if they want electric service is back in force with broadband, where some argue companies should not have to spend money to provide universal service when they can sit back and reap enormous profits from the areas they choose to serve.

Check out this preview. (2 minutes)

The Kentucky Resources Council is appealing to Kentucky residents and elected officials to stop AT&T’s plan to abandon rural landline service in the state with the passage of a bill now before Kentucky lawmakers the company effectively wrote itself.

Tom FitzGerald, director of the non-profit group, has been bringing attention to AT&T’s agenda in the Kentucky media and through the organization’s website.

FitzGerald explains AT&T’s long term agenda is deregulation and eventual abdication of its basic responsibility to provide affordable, essential basic telephone service to every resident in the state who wants it.

In 2006, AT&T won deregulation of all services other than basic telephone service. The company promptly raised prices after the deregulation became law. Now the company is back asking the government to walk away from its oversight of basic telephone service. But even more concerning, in FitzGerald’s view, is that AT&T is prepared to walk away from their rural customers in the process:

In requiring that access to basic telephone service continue to be regulated, the General Assembly recognized that stand-alone basic telephone service is, for many Kentuckians, an essential service.

AT&T may believe, as it told the Federal Communications Commission in 2009, that “plain-old telephone service” is a “relic of a bygone era,” yet basic reliable wireline local exchange telephone service remains a lifeline for those who use it to convey medical monitoring information, for smoke and security alarms, and for voice service.

Basic local service is more than just “voice” service — it includes, by state law, reliable unlimited local exchange calling, 911 service, directory and operator assistance, and the ability to connect with other carriers.

AT&T is circulating a proposed bill that would deregulate basic local telephone services in the service areas of AT&T, Windstream and Cincinnati Bell in Kentucky. What would the bill do?

Unless you currently live in a household with fewer than 5,000 housing units in the telephone exchange, you will no longer be guaranteed access to basic local service as a stand-alone option.

For those smaller exchanges, AT&T could immediately cease providing the service if it offers an “alternative voice service.” Or, it could petition the state Public Service Commission to be relieved of the obligation by meeting certain criteria regarding other providers of voice service in the area. No new houses built in the service areas would have a right to a landline offering basic phone services on a stand-alone basis.

There is nothing in the draft bill that would require AT&T to seek PSC approval prior to ending the stand-alone landline phone service in exchanges where it or another provider offers wireless alternative voice service.

In addition, there is no requirement that AT&T demonstrate that the wireless service is of comparable reliability and consistent signal quality.

Deregulating basic local phone service based on the mere existence of a wireless “alternative voice service” provider that can be an affiliate, does not assure access for all customers to voice and other basic exchange services that are functionally equivalent, competitively priced and comparable to the currently regulated landline basic telephone services.

FitzGerald

AT&T’s characterization of its proposed legislation is that it will help shepherd in the transformation of the company’s old telephone network to a new modern network that can deliver broadband, telephone and television service. But AT&T’s network upgrades are reserved for urban areas only. Should AT&T have its way, it can simply abandon wired service in rural areas and tell those customers to purchase AT&T wireless phone service instead, at significantly higher prices and with no guarantee of service quality or reliability.

Customers in rural areas who have cellphones can already share stories about poor reception, dead spots, and garbled phone calls. Should AT&T win approval of its deregulation bill in Kentucky, rural residents may find that cellphone their only link to 911 and the outside world. FitzGerald wonders if that is sufficient for rural Kentucky.

“Before an telephone company is relieved of the obligation to offer reliable stand-alone basic service under regulations that guarantee nondiscriminatory access, the PSC must be empowered to determine whether there is sufficient competition in the provision of the full array of reliable basic phone services from other carriers on a stand-alone basis,” FitzGerald writes.

“It must also ensure that it will remain available to low-and fixed-income Kentuckians and those more costly to serve because of their location. Ending the obligation in Kentucky, without an assurance that comparable services will be available in a deregulated marketplace for those who are most in need of and least able to afford such services, is not in the public’s interest.”

Africa’s international Internet connectivity is primarily provided by underseas fiber cables. (Map: Steve Song)

One of the most common arguments pro-capping telecom companies use is since the rest of the world has already adopted consumption billing for broadband, why can’t North American ISPs follow in their footsteps. But ISPs around the world are actually heading away from capped, throttled, or nickle-and-dime broadband pricing towards flat rate, unlimited service.

The Republic of South Africa is a case in point. Located on the southeastern tip of the African continent, South Africa has faced down a number of broadband challenges. Antiquated infrastructure lacking investment in upgrades, political and economic challenges, and very costly, limited capacity international connectivity have all conspired to leave the country with poor broadband service.

The biggest problem domestically is deteriorating landline infrastructure, leaving most South Africans with slow speed ADSL service. Wireless mobile broadband has proved less costly to deploy, but connectivity costs remain high regardless of how customers obtain service because of international bottlenecks.

South Africa’s problems are similar to those faced in South Pacific nations like Australia and New Zealand. Data caps have been a fact of life for years, primarily because there has never been sufficient capacity on underseas fiber and satellite links to sustain anticipated traffic if the caps were removed. But those problems are starting to ease as new high capacity backbone connections continue to come online.

Heavily capped broadband transforms how people use the Internet. In all three nations, many people do their heaviest web surfing at work over business connections. Some ISPs ease their usage caps or speed throttles during low-demand overnight hours, leaving many to hold off on significant file transfers and software updates until most people have gone to bed.

Regardless of whether you live in Johannesburg, Adelaide, or Wellington, people hate data caps and speed throttles and cannot wait to be rid of them.

That day has come in South Africa. Telkom, the former state-owned telephone company, has announced dramatic price cuts and relaxation of speed throttles for customers choosing its unlimited ADSL offerings. The company has announced a 40% price cut for residential customers and a 35% cut for business customers that took effect Feb. 1. Speed throttles that used to block international traffic when customers were deemed to be “using too much” are also being removed, although Telkom can still reduce speeds for their heaviest users.

Speeds are still very slow compared to what most North Americans can receive, but the average South African can now purchase unlimited 4Mbps ADSL for around $42 a month. A 10Mbps account remains out of reach for many at an unaffordable $157 a month. Some of Telkom’s competitors sell unthrottled and unlimited 1Mbps service for a budget-priced $22 a month.

South African ISPs are managing to achieve speed increases, but the primary bottleneck remains Telkom’s aging copper wire infrastructure. The answer is more fiber links further out in telephone exchanges and reducing the amount of copper customers have between their homes and Telkom’s central exchange offices. Although urban residents in relatively prosperous areas can achieve faster speeds, South Africa’s large expanse of low income areas often rely on prepaid wireless services because wired infrastructure is often sub-standard.

International capacity concerns will continue to ease as new underseas fiber cables are brought online. By 2014, one new underseas fiber cable will be able to carry more Internet traffic than all of the currently operational cables preceding it combined.

FreedomPop, which offers 500MB of free wireless data service a month via Clearwire’s WiMAX service on a range of devices, has a better offer for tablet owners coming in the second half of this year.

The FreedomPop Clip is designed to attach to Wi-Fi only tablets and provides wireless Internet connectivity when away from Wi-Fi. Better still, the service will be free for the first 500MB of usage each month and will support Sprint’s up-and-coming 4G LTE network for faster browsing. The add-on hardware only weighs 2.5 ounces and has its own built-in rechargeable battery estimated to last up to six hours.

Tablets enabled with support for mobile data networks have never sold particularly well because of the added cost and expensive two-year contract required to maintain the service. Instead, some customers tether their tablets or enable an add-on Mobile Hotspot feature on their smartphone, which can cost $30 extra per month. The new FreedomPop Clip does not come with a contract or a monthly fee when users keep browsing to under 500MB each month. The forthcoming device will also support up to eight extra connections, in case you want to share.

Those who want more data, and around 30 percent of FreedomPop’s customers reportedly do, they can buy it on-demand without any contract or commitment. If you bug your friends to also buy the device, you can earn additional free browsing. In fact, FreedomPop will try and encourage sharing by including a new “open Wi-Fi” Internet service on a separate SSID. Those connecting through the open feature will likely get a marketing message encouraging them to get their own FreedomPop device, and their usage won’t count against your allowance.

FreedomPop Clip supports Sprint’s up and coming LTE 4G network.

Stop the Cap! has FreedomPop’s $99 iPod Touch add-on device, which works exclusively on Clearwire’s network. We’ve used it for about five months and can report the device works well whether you actually have an iPod or not. It is simply a portable hotspot shaped to clip to the back of the 4th generation iPod Touch (it won’t fit ours). But even if it cannot clip on, it still delivers excellent signals up to 12 feet away from the MP3 player.

Its biggest weakness is Clearwire’s hit or miss network. Here in suburban Rochester, N.Y., Clearwire provides service through a nearby cell tower about a mile away. At home, the device works with fair reception indoors, but really needs to be near a window to perform reliably. Outdoors, the device works much better. We found more trouble trying to use the device in a nearby restaurant and while in downtown Rochester because Clearwire reception proved spotty. When it does work, it provides an average of 800kbps-1Mbps downstream speeds, which is superior to most 3G networks, but does not come close to what Verizon’s LTE network can deliver. But then, FreedomPop data comes free.

Just remember to keep usage at 400MB or less every month. As you approach 500MB of usage, FreedomPop will “conveniently” bill you for additional usage it anticipates you will use unless you remember to shut this auto top-up feature off on FreedomPop’s website control panel. You must also use at least 5MB a month to keep the device active, so remember to power it up at least once a month and do some browsing.

The FreedomPop LTE-capable Clip will also reportedly work with 3G service, according to Forbes. This is an important consideration because Sprint’s 4G LTE network is still in its infancy and not yet available in most major metropolitan areas. But if it relies on Sprint’s overwhelmed 3G network, expect much slower performance.

The selling price for the device itself has not yet been announced, but we expect it will be available later this year at $99 or slightly higher.

Thanks to Stop the Cap! reader Jerry for sending this news tip.

Zombie bill.

Time Warner Cable has pulled back on their winter promotions for new customers, bundling slower broadband and significant equipment fees into the bottom line price that may cost as much as $20 or more than the cable operator’s advertising suggests.

Several readers contacted Stop the Cap! over the last few weeks about the disparity between Time Warner’s advertised new customer pricing and the out the door price that arrives on the first month’s bill.

Diane, a Stop the Cap! reader in Brockport, N.Y., was attracted to an $89.99 triple play promotion for TV, Internet, and phone service until she learned what did not come with the deal.

“By the time I got off the phone, that $89.99 offer turned into more than $130 a month once adding a DVR, faster broadband service, and a second cable box,” Diane complains. “You really have to read the fine print. They only give you 3Mbps broadband speed on most of their offers now and DVR service is rarely included. In fact, all the equipment turned out to cost extra.”

Stop the Cap! checked out the offer Diane was interested in, and it turns out the $89.99 advertised price only tells half the story.

The wall of text. Time Warner’s rebate offer has hoops customers will consider an Olympic event.

First, Time Warner requires customers on this promotion to pay for at least one cable box, at $8.99 a month. A CableCARD is also available for $2.50 a month for televisions equipped to support that. Most consumers stick with traditional boxes. Diane wanted one DVR box and a second box for a bedroom. DVR Service from Time Warner, which does not include the box itself, has dramatically increased in price over the years. In 2013, the combined rate for the “box” and the “service” is $21.94 a month in western New York. A second cable box for Diane’s bedroom ran another $8.49 a month. The new Internet modem rental fee is also not included, so that adds an additional $3.95 a month.

Diane is also correct about broadband speeds. Time Warner bundles only 3Mbps service in most of its promotional packages. Increasing to Standard speed (15/1Mbps) generally costs an additional $10 per month. Now Diane’s monthly bill is well over $130 a month.

In fact, Diane should have selected a more deluxe package from Time Warner at the outset. Their $104.99 promotion bundles Turbo (20/2Mbps) Internet, free Showtime, and at least covers DVR service (although Diane still has to pay $9 a month for the DVR box). Her out the door price for that package is less than $127 a month.

Customers served by AT&T U-verse or Verizon FiOS stand to come out better if they plan to dump the phone company in favor of Time Warner. The cable operator is throwing in a debit card worth up to a $200, but only for customers switching away from a competitor. Diane just had Frontier phone service, so no $200 reward card for her. Time Warner requires customers to switch from services comparable to those selected from Time Warner to qualify for the maximum rebate.

For those that do quality, the rebate hoop-jumping begins:

• Customers qualifying for the reward card have to write down a promotion code and register their rebate request online within 30 days of starting service.
• Customers must remain active, in good standing and must maintain all services for a minimum of 90 days after installation.
• Customers are required to upload a scanned copy of their last provider’s bill, showing active service within the last 90 days. Card should arrive 4-6 weeks after a 90 day waiting period.
• Comparable services do not include wireless telephone service or online-only video subscriptions.
• Offer is not available to customers with past due balances with Time Warner Cable during the program period or customers who have been disconnected for non-payment during the twelve months preceding this offer.
• The customer’s name and address on file with Time Warner must exactly match the name and address on your former provider’s bill.
• Customers better spend the money quickly. After six months, the issuing bank deducts a $2.50 monthly “service fee” from the debit card until empty, except where prohibited by law.
• If the card is lost or stolen, there is a $5.95 Re-Issuance Fee. If you need to dispute a charge on the card, you are out of luck. The issuing bank will not intervene on your behalf.
• Customers cannot apply the rebate to their Time Warner Cable bill.