Ford, Jr. (D-The Green Room)

Harold Ford, Jr., a former Democratic congressman from Tennessee and John Sununu, former governor of New Hampshire, are unhappy with an Op-Ed piece written by David Cay Johnston in the New York Times that calls out the telecom industry for high prices and and an uncompetitive marketplace.

Ford, who can usually be found in the green room of various cable news networks waiting to deliver his pro-industry messages on behalf of front groups like Broadband for America, says that 93 percent of Americans are happy as can be with their broadband Internet service.

Sununu joined Ford in some less-than-factual arguments about the state of American broadband:

Second, nearly 90 percent of all Americans can choose from two or more wireline competitors and at least three wireless broadband providers, most of whom now provide some of the fastest 4G LTE broadband networks in the world. Meanwhile, new fiber optic, satellite and wireless choices keep emerging.

Third, during the past four years, broadband providers invested $250 billion in the nation’s broadband infrastructure, while other industries sat on their cash.

Fourth, unlike many other consumer products, the monthly prices for broadband Internet have remained relatively constant, while average speeds have increased by 900 percent or more. Free-standing broadband service is now routinely available for $20 to $30 a month.

That is playing fast and loose with the truth. In reality:

• Most Americans have one cable and one phone company to choose from, not “two or more.” Wireless broadband providers offer service with a cap so low, it can almost never provide a suitable replacement for wired broadband service. Although AT&T and Verizon Wireless have growing 4G LTE networks, neither carrier has provided universal access to LTE speeds. T-Mobile and Sprint are only getting started. The fiber optic choices that are emerging these days are primarily from community-owned providers Ford’s industry friends vehemently oppose. AT&T does not offer fiber to the home service and Verizon effectively suspended expansion of its FiOS fiber network several years ago.  Wireless choices are now shrinking because of mergers and acquisitions and satellite broadband remains a painful experience regardless of the provider;
• Most that the investment made in “broadband” is focused on expanding wireless 4G service. That investment allowed both AT&T and Verizon to pay Uncle Sam dramatically lower tax bills — AT&T even collected a refund. Home broadband expansion has been far less expansive;
• Monthly broadband bills have not remained constant — they are rising, and more rapidly than ever. Speeds enjoyed by average customers have not increased by 900 percent, only some top speeds that are priced well out of range for most Americans. The price both quote for free-standing broadband is for “lite” service, often so slow it no longer even qualifies as “broadband.” Often, that budget service also comes with usage caps, sometimes as low as 5GB per month.

Sununu and Ford close:

Fortunately, very few policy makers in either party have endorsed the kind of heavy-handed regulations that Mr. Johnston’s arguments seem to imply — regulations that would only stifle investment and truly put America at risk of falling behind.

America has already fallen behind, and will remain in decline as long as regulators and Congress listen to a handful of telecommunications companies speaking from their sock puppet front groups and handing out campaign contributions to elected officials to keep things exactly as they are today.

Comcast continues to advertise its phone service as offering “unlimited nationwide talk,” when in reality the company will hang up on any customer who consistently spends more than two hours, forty-five minutes a day on the phone.

That may sound like a lot of talking, but for one blind customer in Chambersburg, Pa., it is a raw deal.

“They should tell you right off the bat it’s not unlimited,” said Mindy Hartman. “It’s really something that has to be addressed across the industry. Comcast is not the only company who has done this to people.”

Hartman received a phone call from Comcast Security warning her she exceeded their usage cap of 5,000 minutes per month. That was news to Hartman, who told the Chicago Tribune she specifically asked Comcast about any calling limits before signing up, and company representatives repeatedly told her there were none.

Comcast assured Hartman, ‘Oh, no, you can talk on the phone 24/7 if you want. We have no caps.'”

Comcast Security warned Hartman if she tried, the company will promptly cut her off. In fact, Comcast is ready with the scissors right now if Hartman does not reduce her calling immediately.

Comcast claims its 5,000 minute cap is mentioned in the fine print, effectively rendering the company’s prominent claims of “unlimited calling” moot.

“I’m blind, and most people don’t look at that when they’re told by customer service it’s unlimited,” Hartman told the newspaper. “It was nice they had the courtesy to call me, but I wasn’t very happy when they called.”

Hartman wants Comcast to fully disclose its call limit and provide customers with access to the number of minutes customers have used during each month, so they can manage their calling.

Phillip “It’s hard to trust a group that so spectacularly flip-flopped on Internet policies when its benefactor AT&T changed its tune” Dampier

When Republican FCC Commisioner Ajit Pai turned up last week at a telecom symposium to warn a more activist FCC could ruin broadband providers’ efforts to charge consumers more money for less service, he was speaking to a very friendly audience.

The conservative Phoenix Center, which ran the event, has been spewing out industry-friendly “research reports” for years that attempt to justify the country’s sky-high broadband pricing. It also promotes a “hands-off” mindset on industry oversight, calling it common sense and consumer-friendly.

Unfortunately for the group and its supporting authors, it has a serious credibility problem — exposed as an industry-funded “think tank” operating as a mercenary research arm for AT&T and other phone companies. In fact, the same group that today generates endless research condemning Net Neutrality had a very different position in 2004 when it published an Op-Ed entitled, “Net Neutrality: Now More Than Ever.”

What changed? Its benefactor. In 2004, AT&T was a competing long distance carrier fighting local phone companies. Today it –is– one of those phone companies. With its Baby Bell owners controlling AT&T’s purse-strings starting in 2006, the Phoenix Center dutifully flip-flopped to maintain continuity with the ‘new AT&T,’ strongly opposed to most forms of broadband regulation.

So it comes as no surprise the Phoenix Center continues pumping out cheerleading “research reports” that attempt to bolster credibility to forces opposing Net Neutrality and supporting an Internet Overcharging free-for-all with the help of usage billing and caps.

One particular bit of nonsense that completely ignores marketplace reality came in Phoenix Center Chief Economist Dr. George Ford’s report, “A Most Egregious Act? The Impact on Consumers of Usage-Based Pricing.”

For example, Ford argues:

A prohibition of differential pricing renders a single price that lies between the low price for the restricted service and the high price for the unrestricted service. Therefore, prohibitions against usage based pricing forces some consumers to pay more for services they do not want or use, while others are allowed to pay less for services they do. The prohibition, in effect, results in a transfer of wealth from one group of consumers to another, and profits are also reduced. Overall consumer welfare is diminished, even though some consumers are better off.

We’re number one… in prices, even with the increasing prevalence of usage-based pricing Ford believes benefits consumers. (Image: CRTC)

But Ford completely ignores the current conditions in today’s broadband market that have made it easy for providers to promulgate an unpopular end to flat rate, unlimited broadband in favor of a highly-flawed, usage-based billing policy:

1. Ford ignores the broadband market is essentially a duopoly for most consumers and effectively a monopoly in rural America. That gives providers what they call “pricing power,” the ability to increase prices at will and change pricing models because consumers are dependent on the service and have limited options to take their business elsewhere;
2. The only “transfer of wealth” involved here is from consumers to providers. While profits soar and costs drop, Ford complains that those using the service more are somehow subsidized by lighter users, when it fact providers enjoy a 90-95% gross margin on broadband. As Time Warner Cable CEO Glenn Britt admitted, the most significant cost attributed on the cable company’s balance sheet for broadband comes from its backbone traffic costs, which are minuscule in contrast to the increasing prices the cable company charges for its broadband service;
3. Consumer welfare is reduced primarily from the high costs charged by providers, made possible by scant competition that would otherwise drive prices downwards, not from expenses associated with broadband traffic;
4. Ford is careful not to advocate for a true usage-based billing system that would be a revenue nightmare for his benefactors. In a strict usage-based pricing model, customers would pay a small fee for infrastructure, support, and equipment expenses and a variable charge based on actual usage. But no provider in the United States advocates for this system. Instead, providers force consumers into tiered broadband plans that include different usage allowances the vast majority of customers will either not exhaust or will exceed, which raises profits even higher with usage overlimit penalties. With no unused usage rollover, most customers are in the same position Ford claims will diminish consumer welfare: paying for service they do not want or use;
5. Most consumers favor unlimited, flat use plans even if they could save money with a usage-constrained pricing model. Since keeping customers happy with a more expensive unlimited plan they like instead of a lower priced plan they don’t want would seem to enhance provider profits. But Ford ignores this reality, perhaps understanding providers are actually laying the groundwork to broadly monetize Internet usage. Whether a provider adopts usage-based billing or a strict cap on usage, which is growing in most households, the inevitable result is still the same: more profits, less cost from constrained usage. Inevitably this will force customers into higher-priced, higher-profit upgrades that deliver a higher usage allowance, again something consumers simply do not want. This is already a reality in the wireless marketplace, and is well-acknowledged by both AT&T and Verizon Wireless.

Pai

Republican FCC Commissioner Ajit Pai has warned forthcoming court rulings on Net Neturality could set the stage for more active oversight of Internet Service Providers, including a possible ban on usage-based pricing and data caps.

Speaking at the 2012 Annual U.S. Telecoms Symposium at the Phoenix Center in Washington, D.C. Dec. 6, Pai said 2013 will be an important year for broadband policy.

“The most important action probably will not occur either at the FCC or on Capitol Hill,” Pai said. “Instead, it will take place in the federal courthouse about a mile away on Constitution Avenue.”

The D.C. Court of Appeals is currently weighing a court challenge from Verizon that argues the federal agency has no regulatory authority to implement and oversee the open Internet policies that are the cornerstone of Net Neutrality.

Republicans have traditionally been hostile to the concept of Net Neutrality, because it restricts private providers from using network management concepts that could open up new revenue streams. Without Net Neutrality, providers could artificially reduce the performance of certain websites while enhancing others, usually based on financial agreements.

Many Democrats and consumer advocates want Net Neutrality to guarantee that all websites are treated equally, and that paying customers deserve a service unfettered by artificial obstacles or additional expense imposed by providers.

Even if the court finds in favor of Verizon, Pai fears the FCC’s Democratic majority will respond by emphatically asserting its oversight powers, reclassifying broadband as a “telecommunications service.” Since the Bush Administration, broadband has been regulated as an “information service,” subject to more restricted oversight.

“Should the D.C. Circuit uphold the FCC’s order, I would expect to see revitalized efforts to expand the Commission’s regulation of the Internet,” Pai said. “In particular, I would not be surprised if the FCC looked into whether we should stiffen our oversight of the network management practices of wireless broadband providers and whether we should begin to regulate usage-based pricing.”

“Under no circumstance will I support […] reclassification,” he added. “I am convinced that grafting the creaky, burdensome common carrier regulations onto the Internet would dramatically slow broadband deployment, reduce infrastructure investment, frustrate innovation, hamper job creation and diminish economic growth.”

Current FCC Chairman Julius Genachowski has expressed repeated support for usage-based pricing in the market as an innovation in Internet pricing. With the chairman and his Republican colleagues in agreement, it seems unlikely the agency will consider curtailing the practice. So far, the FCC has not even responded to repeated requests to further investigate usage pricing and data caps.

(Image: Science Blogs)

While perusing the website of the chief telecom regulator in this country this afternoon, Cassandra, a rural independent telecom industry regulatory analyst, encountered into the misguided, the confused, and the tinfoil hat crowd overrunning the agency’s electronic comment submission system regarding proposed changes to the nation’s Emergency Alert System (EAS) and government policy regarding broadband regulation.

Chief among them was a public comment from a woman named Denise claiming she was being abused by her husband.

“Denise, you do realize you are looking for psychological help with your abusive spouse in a government rulemaking docket about broadband, right,” Cassandra tweeted.

That was just a preview. In the aforementioned EAS docket, the FCC website proudly promotes one recent comment from Debra, who has yet to figure out how to type in the big box or how to get that caps lock off (we deleted some personally identifying information, although the FCC website retains it, warning the public in advance “the filing you are making is a public filing. Any information that you submit will be available to the general public.”):

Amidst filings from broadcasters, cable operators, equipment manufacturers, and various special interest groups, the very wide variety of submissions from John Q. Public ranged from sober and thoughtful to… well-down the rabbit hole.

A sampler, left unchanged from the originals, except to remove the names of the innocent and embarrassed:

The Anti-Government Crowd:

I think it is an Orwellian-type demonstration by the Federal Government to impose a nation-wide test of the EBS. A “test” would be at 2am. This is clearly a demonstration by the powers that be that government can and will seize power of all communications whenever they see fit.  In the event of a national disaster, the one voice that I want to hear certainly isn’t the government’s.

Those Who Watched that whole Jack Bauer “24” box-set in one weekend:

It concerms me that this annoucement gives terroists an opportunity to take advantage of the test, since no one will be looking for a real notice.

The “You Are Scaring Me” Corner:

Why in the world wouldn’t there be newspaper articles and cable and network news information regarding FCC/FEMAs “big plan?” Do you purposefully WANT to scare the living daylights out of senior citizens? Why would you warn only federal agencies? I beleive there is something more sinister going on that is related to this plan. I am going to make sure that everybody knows about it and that your offices are saying it will not say it’s a test. How interesting that it’s happening right now. If I don’t start seeing news about it in the paper and on TV/radio, I am going to raise hell. Do something now. So far, I have notified fire departments that had no clue, old age homes, and city hall. You people are crazy if you think I’m going to allow a panic in MY town.

The Guy With a Landlord Problem:

I must worst file million of complaints against U.S. HUD Park Tower Apartments, in Portland OR, that they tampered my Facebook that I posted my comments that I do not felt safely reside in this danger situation. I must go in the court at requests for bringing me in justice requests that Park Tower Apartments in foe issues involved with their Facebook addresses. […] (bad employees) made in huge banana noses and bad people of employees with Park Tower Apartments address report to the court immediateness. Please tell U.S. Homeland Security pulls me out of this evil housing addresses because of they used Facebook issues as their employees’ Facebook accounts. Please tell Facebook about Park Tower Apartments in bad employees addresses as notifies to U.S. Senators at requests. thank you for pulling me out of this dangerous housing immediateness!

A loon

The Man on the Run:

NYPd has informed feds that I’m not on their radar but keep getting stalked from place to place. Last place the fire alarms tripped like today was at 500 pearl, street. nyc aug 3, 2011. depts got caught doing this at 339 west 39th feb 28, 2010 . the eavesdropping device went from the phones to the fdny system because fed attys advised me they botched the police brutlaity case in the fbi . this is in court now

I Copyrighted EAS First and the Feds Violated It So I Am Suing for $87 billion

EAS infringes copyright as asserted in lawsuit: […] The ORDER directs the Clerk to issue summonses and directs the U.S. Marshal to serve the Defendants.

Defendants include twenty-four government agencies, government individuals, including Federal Communications Commission and nine corporations sued in the United States District Court Eastern District of Arkansas. The case cites organized theft of intellectual properties asserting the defendants are responsible for massive piracy of multiple copyrighted works that are generating billions of dollars in illegal proceeds in concert with private enterprises causing more than $87 billion dollars in damages to the legal owners of copyrighted intellectual properties.

[…]This case relates to letters by the Plaintiff requesting the United States Attorney General Eric Holder stop government theft of private intellectual property….

“People: the FCC cannot solve all your problems,” Cassandra tweeted. “They have enough of their own.”