The Communications Workers of America released their 2009 Report on Internet Speeds in All 50 States, and the results show the United States continuing to lag well behind other nations in providing citizens with advanced, fast, and affordable connections to the Internet.  Little improvement has been made in the past year, when CWA released its 2008 findings. (Stop the Cap! reader Dave passed along word the report was in.)

The average download speed for the nation was 5.1 megabits per second (mbps) and the average upload speed was 1.1 mbps. This was only a nine-tenths of a megabit per second increase (from 4.2 mbps to 5.1 mbps) since last year. At this rate, it will take the United States 15 years to catch up with current Internet speeds in South Korea. And when compared to the rest of the world, the United States ranks 28th in average Internet connection speeds.

The CWA does have an interest in this fight.  It’s a labor union whose members work for many of the nation’s telecommunications providers.  CWA seeks a national broadband strategy that just happens to fall in line with the interests of consumers — increased speeds, more rural broadband expansion, more affordable access, and Net Neutrality protections.  CWA doesn’t take a formal position on Internet Overcharging schemes like usage caps, at least not yet.

The report measured broadband speed based on more than 400,000 Americans who voluntarily participated in a speed test offered on the Speed Matters website.  The results were collected and covered a significant part of the country, illustrating real world results of ordinary consumers, not simply the speeds touted by broadband providers in marketing materials.

The CWA report calls out the inadequacy of the deregulated free market approach to deliver broadband service consistently to all Americans.  In fact, the disparity of access and the tiny incremental upgrades in speed suggest it will take at least 15 years for the United States to match the speeds enjoyed today in South Korea, which can rightly be called a world leader in broadband even while this country cannot.

South Koreans enjoy an average connection speed of 20.4Mbps (four times faster than the United States).  Japan provides residents with 15.8Mbps, Sweden offers 12.8Mbps, the Netherlands 11Mbps, and 24 others who do a better job at delivering speedy broadband than their American counterparts.

Broadband remains too expensive for the slow service we enjoy today.  That promotes a digital divide between those affluent enough to afford broadband service and those who are struggling to make ends meet (88% of those earning more than $100,000 a year have service in their homes, while just 35% of those earning under $20,000 subscribe).

Another problem highlighted in the report is the ongoing problem of rural broadband access.  While 67% of urban and suburban residents subscribe to broadband, only 46% of rural households do, assuming they can even obtain service.

Rural areas are by far the most likely to encounter slow service, typically 1-3Mbps provided by DSL from the local phone company.

Until 2009, the United States was the only industrialized country in the world without a national broadband plan.  The Federal Communications Commission is expected to release one shortly, but only time will tell whether the plan will primarily benefit consumers or the special interests, including providers seeking to protect their monopoly or duopoly market position, and get taxpayer dollars to finance broadband projects that provide slow and expensive service to consumers.

The CWA has some recommendations:

Governmental action — in partnership with the private sector — is essential to stimulate broadband investment and adoption. Other countries are far ahead of us. It is time for the United States to take action.

• Universality.  Just as government policies helped bring affordable telephone service to everyone, our policies should ensure that every individual, family, business, and community has access to and can use high speed Internet at a price they can afford — regardless of their income or geographic location.
• High Speed.  Speed matters on the Internet. U.S. policies should promote higher Internet speeds and higher capacity networks. The United States should adopt policies to get us to 10 megabits per second upstream and 1 megabit per second downstream by 2010. New benchmarks in succeeding years should expand the number of households capable of sending and receiving multiple channel high-definition video and reach the global standard of 100 mbps.
• Open Internet.  We must protect free speech on the Internet so that people are able to go to the websites they want and download or upload what they want when they want on the Internet. There should be no degradation of service or censoring any lawful content on the Internet. At the same time, reasonable network management is necessary to preserve an effective and open Internet. Most important, building high-capacity networks will ensure that all Americans have fast, open access to all content on the Internet.
• Consumer Protections and Good Jobs.  Public policies should include consumer and worker protections, should support the growth of good, career jobs, and require the public reporting of deployment, actual speed, price, and service.

Below the jump, we’ve assembled a selection of maps and graphics showing where broadband is today in three of states with our largest reader base — New York, Texas, and North Carolina.

… Continue Reading

In just the second quarter of 2009, Comcast doled out nearly $3.3 million dollars of their subscribers’ money lobbying elected officials on a myriad of issues, covering everything from executive compensation to sports channels to unionizing efforts.

Forbes reported last week the nation’s largest cable company has lobbied on:

• the Excessive Pay Capped Deduction Act of 2009, a bill that would stop tax deductions on excessive compensation given to any employee. Excessive pay is defined as any amount above 100 times the average employee’s compensation at the company;
• the Income Equity Act of 2009, which curbs executive pay by limiting tax deductions on pay greater than 25 times that of the lowest paid employee, or $500,000, whichever is greater;
• the Shareholder Bill of Rights Act of 2009, which gives shareholders the right to approve or reject executive compensation packages.  Shareholders have long been in contention with Comcast over the near $25 million annual salary paid to CEO Brian Roberts;
• the right to carry regional sports channels on terms favorable to the cable operator, both in terms of channel/package placement and pricing;
• the nation’s Broadband Stimulus program — how the funds would be allocated, on what terms, and for what types of projects;
• the issue of unionization activity at Comcast;
• limits on Comcast’s ability to increase ownership of additional cable-related assets and systems.

Meanwhile, Brian Dickerson, a columnist at the Detroit Free Press has also been noticing that AT&T, promising to bring competition to Comcast in cities like Detroit, came at the price of a trojan horse called “statewide franchising,” an issue we’ve covered at length on Stop the Cap!

Deregulating the cable TV business in Michigan was supposed to be good news for metro Detroit cable subscribers and bad news for Comcast, long the dominant cable provider in our region.

At least, that’s how area legislators justified a 2006 law that streamlined the franchising process for rival cable operators such as AT&T and stripped pesky local governments of their authority to stand up for aggrieved cable customers.

Dickerson recites a familiar tune to our readers about how AT&T came to the Michigan state legislature in 2006 promising to bring hardcore competition to Comcast, the state’s most prominent cable provider, if only they would permit AT&T to obtain one statewide franchise agreement, allowing them the flexibility to launch U-verse in cities throughout the state without negotiating with each local government first.

The astroturfers turned up right behind AT&T’s open checkbook (the company spent at least $672,000 in 2006 in Michigan on lobbying and political contributions), touting the benefits of AT&T’s “creative solution” to cable competition.  FreedomWorks even invaded one meeting of the Michigan Municipal League and Michigan Townships Association in the spring of that year “to set the record straight.”  That really meant representing AT&T’s position, and offering plenty of empty promises to Michigan communities seeking competition and lower prices for their residents.

FreedomWorks rapidly also devolved the debate into a partisan “conservative” vs. “liberal” sideshow, hoping to pick up conservatives that would reflexively adopt a pro-AT&T position if it meant doing battle with “liberals.”  And in a two-for-one win for AT&T, the conservative action group also helped jettison Net Neutrality protections.

FreedomWorks President Matt Kibbe was quoted in a December 2006 press release: “To the very end, liberal special interests held out for additional regulatory mandates misleadingly labeled “neutral.” On behalf of more than 12,000 citizen activists in Michigan, I applaud the franchise reforms adopted this week while warning against new efforts in the 94th Legislature to deny basic property rights under the banner of “net neutrality.” We are prepared to defend consumer interests and property rights through relentless grassroots education and advocacy.”

FreedomWorks Michigan Director Randall Thompson concluded, “The issue of franchise reform is evidence that the Freedom Movement is deeply rooted in Michigan. Regular citizens made their voices heard, leading free market think tanks and scholars weighed in on the issue and as a result, public officials adopted good policy.”

Freedom Isn’t Free: Prices escalate across Michigan despite “competition.”

Now, three years after AT&T’s champions in the Legislature crowed that Comcast’s reign as the 800-pound. guerrilla of Michigan cable service was over, Comcast remains the state’s dominant provider, maintains a de facto wire-line monopoly in most its franchise areas, charges higher rates for basic cable service, and has far fewer legal obligations to the subscribers and communities it serves.

Indeed, the story is even worse for Michigan consumers, who in effect paid, as part of their monthly cable bills, for the lobbying and astroturf campaign battle launched against their own best interests and wallets.

The promised competition has arrived in some parts of Michigan, but often at pricing even higher than that charged by the dominant cable company in the area.  Many customers enjoy temporary savings as part of promotional new customer offers, that once expired, leave the customer stuck with everyday high pricing.  As seen in Tennessee, AT&T U-verse packages compete more on numbers of channels offered, not on the pricing of monthly basic service.  A-la-carte channel choice remains unavailable.

In fact, the second biggest winner of the Lobbying Money Party from AT&T ironically turned out to be Comcast.  After all, if AT&T was to be granted special provisions for statewide franchising and other deregulatory benefits, why can’t Comcast receive those benefits as well?

It seemed only fair that if legislators were prepared to relieve AT&T of any obligation to negotiate with local governments, Comcast and other cable providers should enjoy the same privilege. But what about the franchise agreements Comcast had already struck in places where AT&T had no immediate plans to compete?

Some legislators suggested that Comcast be required to live up to existing franchise agreements until competitors were offering service to at least 5% of the community’s residents. But when Sen. Nancy Cassis, R-Novi, proposed such a rule, she was defeated by a voice vote — the anonymous roar of Comcast’s many beneficiaries on both sides of the aisle.

As is the case in Tennessee, should a local franchise agreement not be renewed on favorable terms, there is always the possibility of securing that statewide franchise, bypassing local officials, reneging on hard fought agreements on things like:

• Guarantees that cable service would be made available to all residents, from the poorest to richest neighborhoods;
• Cable operators would agree to customer service benchmarks from call answer time to repair call timeframes;
• Provision and funding of local Public, Educational, and Government (PEG) access channels on the basic tier.

And so, three years after the blizzard of cash was long since pocketed, and astroturfers like FreedomWorks moved on to other industry-sponsored causes célèbre, where are the consumers after the “good public policy” applauded by FreedomWorks was adopted?

Absolutely in the exact same place they were before, only worse.

The Michigan Chapter of the National Association of Telecommunications Officers and Advisors says Comcast celebrated the first anniversary of cable deregulation by raising the price of its cheapest cable package by 25% in many communities; rates for other service tiers jumped between 9%-25%.

Brian Brown, spokesman for a consortium of Michigan cable providers led by Comcast, says the price increases reflect the cost of enhanced services subscribers are demanding. “That’s what the market wants,” he says.

Meanwhile, Comcast has shuttered many of the local service locations it was obligated to maintain under franchise agreements, and is waging a federal court fight to move public access programming off the basic cable line-up.

That’s right.  The market wants higher prices, no local service locations, and a parade of formerly analog cable channels being moved into digital tiers, necessitating additional consumer expense to rent digital converter equipment for every cable-connected television in the home.

Those are the same consumers whose interests have routinely been ignored by the politicians and the providers, and distorted by their bought and paid for political astroturf groups that hoodwink consumers into believing this is a “right-left issue.”

As the battle for Net Neutrality protections begins again this summer, and as we vigilantly maintain watch and prepare for opposition to any reintroduction of Internet Overcharging schemes, just remember the tale of Michigan and Tennessee and the real agenda of the astroturf groups sure to raise their well-financed opposition to pro-consumer legislation and activism yet again.

Open Media Boston's creative reinterpretation of Comcast's logo

In August 2008, Comcast formally announced a 250GB monthly usage limit on their residential broadband customers, promising them that despite the fact only “the top 1% of customers would be considered excessive users,” a usage monitoring tool would be made available to customers to make sure they were under the limit imposed by Comcast.

One year later, Open Media Boston notes the usage measurement tool is still not available to customers.

Comcast’s “Excessive Use FAQ” points concerned customers to the McAfee security suite, which includes a bandwidth meter utility, and which Comcast provides for free for subscribers. Unfortunately, the software is only compatible with Windows machines, leaving Linux and Mac users out in the cold. To remedy this, Comcast suggests subscribers do “a search for ‘bandwidth meter,'” and find a meter on their own. This is true, but is akin to asking mobile phone customers to monitor their minutes with a stop watch.

Open Media Boston worries about the accuracy of some of the third party measurement software tools, claiming they are likely to also measure traffic moving between computers within a user’s home (such as backing up files on a network, streaming music on the home network, etc.) making consumers think they’ve already come close to exceeding their monthly limit when such traffic would not be counted by Comcast’s own measurement tool.

The cable company washes its hands of responsibility for third party tools, saying it cannot vouch for any of them.  But they have told Open Media Boston one thing for certain: “Comcast’s determination of each customer account’s data usage is final.”

So where is Comcast’s official tool?  “We have talked about launching a tool. We are committed to launching one. It is in employee testing,” Comcast spokesperson Charlie Douglas told Open Media Boston.

Comcast contacts the most egregious offenders of their 250GB monthly cap by telephone to give them a warning they are way over the limit.  Company officials claim most customers work to reduce their usage after getting such calls.  But should a customer find themselves on Comcast’s bad side a second time within a six month period, their service will be canceled and the company will prevent them from signing up again for service for a one year period.

Broadband Reports this morning revisited Cogeco, the Canadian cable company that engages in Internet Overcharging, but relies on a usage-measurement gauge that customers say can be off from dozens to hundreds of megabytes every day.  Stop the Cap! also reported on this issue in June, with customers outraged that their monthly bill’s accuracy depends on a tool that is very good at making the company extra money, but not so good at fairly measuring actual usage.  The problems continue.

It’s ironic that the electric meter outside of Cogeco headquarters is subject to verification, the gas pump dispensing fuel to Cogeco’s service trucks is audited by Measurement Canada, which also verifies the accuracy of the scale used by the grocery store deli to weigh the meat for the submarine sandwiches purchased by some of their employees.  What isn’t audited, much less independently verified, is Cogeco’s usage measurement tool.

Cogeco customers have resorted to installing their own third party monitoring tools, from built-in traffic measurement in some routers to software applications that they run on their computers.  Thus far, reports of serious discrepancies have caused an indefinite delay before Cogeco actually begins billing overlimit fees and penalties, but many customers are asking why they have to resort to checking up on Cogeco in the first place.

One Toronto resident can’t understand it:  “Since when do customers in this country have to validate a business billing system?   Customers should be assured of fair and accurate billing under the law in Canada. I see a lot of legal challenges coming for this.”

Cogeco customers note the discrepancies will add up — to Internet Overcharges:

“Ever since I slapped Tomato [third party firmware] onto my router and started monitoring my [usage], Cogeco has constantly been anywhere from 20mb to 700mb off every day,” complains one user. “Any discrepancy is unacceptable with their outrageous overage charges,” the user adds. “Twenty five to thirty gigabytes is the difference between paying fifty dollars a month for your Internet or eighty dollars a month,” says another, adding that the problems are “unacceptable.”

As Karl Bode notes in his story, whether the meter works right or not, the customer will still be expected to pay in the end.

Joshua Gans, an economics professor at Melbourne Business School, has a question.

Why are Australians still stuck with usage caps, which Gans notes are virtually non-existent around the rest of the world.

Writing for The Age, Gans notes that had the United States forced users into consumption limits and other usage-based broadband plans, online video sites like YouTube would likely have never started.  Gans called out Australian providers for usage pricing that has to be seen to be believed:

To an outsider, the Australian system seems very strange. Telstra boasts a basic package on its BigPond Cable Extreme network that, for $39.95 a month, gives 200 megabytes in usage. At Telstra’s boasted 30MB a second speeds, that amounts to a minute of high-quality video downloads. After that you pay 15¢ a megabyte. It is hard to imagine that being an option for consumers.

But even its Liberty plan, which costs $69.95 and offers 12GB a month – after which the extreme speed is slowed to the speeds of last century – only allows you 20 hours of video watching a month, provided you do nothing else. That’s about 45 minutes a night.

Gans also zeroes in on another theory why usage caps prevail — to protect incumbent cable and satellite providers’ video business models.  Australia’s largest Internet provider, Telstra, is also the majority stakeholder in Foxtel, Australia’s largest cable/satellite television provider.  Telstra is the equivalent of Bell in Canada or AT&T, before the 1980s “breakup.”  It dominates Australia’s television, mobile phone, wired phone, and broadband needs. It was privatized by the government under former Prime Minister John Howard.

Telstra is well positioned to control much of the Australian playing field competition is expected to compete on.  Competing broadband providers, particularly those using DSL, are confronted with installing their equipment in Telstra-owned phone exchanges, at Telstra pricing.  Telstra’s giant stake in Australia’s broadband also means they play a crucial role in Internet connectivity outside of the country, using undersea fiber cables to connect Australians with the rest of the global Internet.

With these types of ground rules, it’s no surprise Australia’s broadband experience is universally usage capped.  The limitations are so egregious, the Australian government launched a national broadband plan to vastly improve capacity and get the country higher in global broadband rankings.  It will take nearly eight years to complete the project.

For Gans, that’s not good enough.

We are told that the new management of Telstra is more open and ready to meet the challenges brought about by the national broadband network. The NBN will have the capacity to break through usage caps. But why wait eight years?

There is an opportunity for Telstra to demonstrate its new responsiveness and get rid of this anachronism. It could lift its Liberty plan to 100GB and likely face few additional costs if it charged 15¢ a gigabyte. It would send a strong signal to markets.

For North Americans, it’s another illustration that Re-education efforts from domestic providers pointing to Australia as a justification for Internet Overcharging is based on the false premise that customers don’t mind usage caps.  Even in the land down under, consumers want out from under Internet Overcharging’s high prices and limited service.

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A Telstra customer rants about Telstra’s inaccurate “usage meter” that resulted in $2,500 monthly broadband bills for this particular customer, and how the broadband provider holds all of the cards when they measure and bill for usage, all while attempting to hold customers to a two year contract. Viewer Warning: Strong profanity.