The successful launch of ViaSat 1, the new satellite broadband satellite.

ViaSat, the parent company of satellite Internet service provider WildBlue, will introduce new pricing and speed packages Tuesday for its satellite broadband service.

WildBlue has offered satellite-based Internet access for several years, but the speeds and heavily-restricted “fair access policy” have left many customers looking for something better.  But for many satellite Internet customers, DSL or cable broadband is miles away and will be indefinitely, so any improvement in satellite broadband is good news.

“Are the days of satellite fraudband finally over?” asks Stop the Cap! reader Madeline who lives in rural Idaho. “I was a customer of WildBlue and Hughes in the past and both were not worth bear spit.”

Madeline and her family are potato farmers, and have been for three generations.  She remembers when the phone company started selling dial-up Internet access and got hooked on the Internet to get updated weather reports, trade farming information, and stay in touch with relatives.  But as the web has grown more multimedia-oriented, dial-up has progressively become an intolerable way to experience it.

“In the 1990s, web ads and pages were simple and they’d load quick,” she says. “Now it’s all video ads and other things that take five minutes or more to appear, so you become stuck waiting until you give up.”

WildBlue’s new satellite, ViaSat 1, may change the perception of a satellite Internet experience that is only slightly more tolerable than dial-up.  With speeds up to 12Mbps, WildBlue’s new speed packages will finally deliver something more than the 1.5Mbps “Pro” service the company currently sells for $80 with a 17GB usage cap.

“The key words with satellite are ‘up to‘ because you never get the speeds they promise, especially at night when everyone is on,” Madeline says. “If you use what they consider to be ‘too much,’ your speeds are cut further.”

ViaSat 1 has a total capacity of 140Gbps, double that of the company’s other satellite — KA-SAT.  That wireless pipeline will eventually be shared by commercial, government and residential customers.  With several hundred thousand anticipated users, WildBlue will continue to restrict usage even with the new capacity.  No word on what specific limits will be put in place, but it is likely customers will at least enjoy a speed boost from the new satellite.  ViaSat hopes to economize using web compression technology and other traffic management techniques to make efficient use of the satellite’s broadband capacity.

Madeline remains unconvinced, however.

“You don’t choose satellite Internet because you want to, you choose it because you have to,” she says. “My guess is WildBlue will continue the same low caps — especially to make sure we steer well clear of web video — and will still charge us a lot of money for service you can’t use all you want.”

Madeline went back to dial-up and frequently visits some nearby relatives who receive Internet from a Wireless ISP.

“While everyone else in the country is talking about Netflix and making video calls to relatives, we are still sending e-mail and setting egg timers to make sure we don’t stay online too long and get throttled before the month is out.”

WildBlue’s Existing Packages (Company-supplied information)

WildBlue’s Acceptable Use Policy.

*A “threshold” (a/k/a “usage cap”) is the amount of data that you can upload or download in a 30-day period before WildBlue’s Fair Access Policy (speed throttle) applies.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Wildblue Demo.flv[/flv]

WildBlue produced this demonstration to show off web browsing over its new ViaSat 1 satellite.  Keep in mind this browsing session took place before the satellite was available for general customer use and the company avoids mentioning its usage limits, which are extremely small in comparison to wired broadband.  (3 minutes)

While you ponder Verizon Wireless’ latest LTE 4G outage or try to convince yourself Sprint really is selling “4G” service from Clearwire, South Korea’s Sunkyoung Telecom (SK Telecom) is deploying new technology to enormously boost wireless Internet speeds to as high as 100Mbps.

SK Telecom has developed new Heterogeneous Network Integration Solution (HNIS) technology that weds 3G/4G service with any open Wi-Fi network to deliver speeds many times faster than North Americans can get from their wireless providers.  The technology is designed to work without a lot of consumer intervention.  For example, HNIS will automatically provision open Wi-Fi access wherever subscribers travel.  The combination of mobile broadband with Wi-Fi works seamlessly as well.  Currently, smartphones can use Wi-Fi or mobile data, but not both at the same time.  HNIS changes that.

While mobile operators cope with spectrum and capacity issues, HNIS can reduce the load on wireless networks, without creating a hassle for wireless customers who used to register with every Wi-Fi service they encountered.  The theoretical speed of an HNIS-enhanced 3G and Wi-Fi connection in South Korea will be 60Mbps when SK Telecom fully deploys the technology this year.  As SK expands the technology to its 4G networks, theoretical maximum speeds will increase to 100Mbps.

SK is so confident in the technology, it plans to equip all of its smartphones with the new technology starting in 2013.

Byun Jae-Woan, CTO of SK Telecom said, “SK Telecom will provide customers with a data service of much greater speed with Heterogeneous Network Integration Solution, which represents one of the company’s world’s top-level network operation technologies. By realizing the speed of fixed-line services with wireless networks, SK Telecom will allow its customers to experience a new and innovative mobile life.”

Operators like AT&T are installing their own Wi-Fi hotspots in heavy use areas to try and offload data traffic to Wi-Fi.  But customers have to make the connection themselves. HNIS quietly handles this process in the background while staying in touch with SK’s 3G and 4G networks to maintain a consistent data connection.

One of the things we have tried to teach readers over the last few years is how important it is to follow the money trail when encountering a group, politician, or researcher counter-intuitively arguing “up is down” or “right is left.”  So when a business columnist in the Press of Atlantic City slammed rural broadband as a service provided “to a group of people who mostly don’t want it,” we started digging:

The FCC claims this effort will give 7 million rural people reliable access to high-speed Internet connections. So the hundreds of millions of urban and suburban Americans who wish their Internet was faster and more reliable will pay for 2 percent of us to get just that.

Or maybe we’ll be paying for redundant, overpriced telecom work by companies that donate to rural politicians.

Federal stimulus spending in response to the recession already included $7.2 billion for this same purpose. An analysis by Navigant Economics of three big projects under that Broadband Initiatives Program found:

Even “areas in which very high proportions of households were already served by multiple existing broadband providers” were eligible for subsidized broadband work.

The author’s suspicion that money was involved in all this was correct, but he completely missed who was boarding the money train.

Navigant Economics, the “research group” that produced the inflammatory report slamming rural broadband funding, happens to count AT&T as one of its important clients.

The group, a subsidiary of Navigant Consulting, provides economic and financial analysis of legal and business issues to law firms, corporations and government agencies.

In fact, Navigant pitches its services to a range of corporate clients:

Navigant Economics provides economic analysis in litigation and regulatory proceedings involving competition issues. Our experts have provided testimony in proceedings before District Courts, the Department of Justice, the Federal Trade Commission, the Federal Communications Commission, the Federal Energy Regulatory Commission, and numerous state Public Utilities Commissions.

We provide economic analysis and testimony in connection with mergers and acquisitions and antitrust claims of:

• Anticompetitive horizontal agreements (price fixing, bid rigging, potential anticompetitive effects of joint ventures)
• Unilateral conduct (predatory pricing, refusals to deal, monopolization via patent fraud)
• Vertical restraints (exclusive dealing, requirement contracting, tying and bundling)

We also offer economic analysis and testimony on issues of price and rate of return regulation, mandatory access, quality of service, and benefit-cost analysis, with especial expertise in regulatory proceedings involving communications and the Internet (software and hardware sectors, network unbundling and “net neutrality” issues affecting telecom and cable firms, retransmission consent and other content-related issues, and the range of wireless spectrum issues) and all types of energy markets.

Phillip "Making Sense, Not Dollars" Dampier

The result is what critics refer to as “dollar a holler research” — bought-and-paid-for-results that coincidentally fit the framework of a client’s public policy agenda.  In this case, AT&T (among other phone companies) has fretted about broadband stimulus funding ever since the Obama Administration made it clear the industry would not collectively control the program or reward themselves at taxpayer expense.  In addition to criticizing the decision-making process, phone and cable companies have objected to numerous applicants who applied for grants to build networks serving communities those companies have ignored or under-served for years.

To say AT&T has no vested interest in the outcome of rural broadband would be the first major understatement of 2012.

Martyn Roetter with MFR Consulting said Navigant was giving a bad name to researchers.

“Navigant Economics as well as other economists in academia and the consulting profession seem increasingly prepared to support arguments in favor of their clients’ desires and goals regardless of whether they are reasonable or preposterous,” Roetter wrote. “Unfortunately this behavior tends to blur the distinction between (a) respectable advocacy with findings based on evidence and rational arguments and (b) indefensible nonsense, discrediting both academics and consultants.”

Navigant spent much of 2011 trying to convince regulators and the public that T-Mobile actually doesn’t compete with AT&T, so there should be no problem letting the two companies merge.  Readers win no prizes guessing who paid for that stunner of a conclusion.  Thankfully, the Department of Justice quickly dismissed that notion as a whole lot of hooey.

Navigant’s second ludicrous conclusion is that there is no rural broadband availability problem.  Navigant has a love affair with slow speed, spotty DSL (sold by AT&T) and heavily-capped 3G wireless (also sold by AT&T) as the Frankincense and Myrrh of rural Internet life.  With those, you don’t need any broadband expansion (particularly from a third party interloper).

“The notion that a nominal maximum speed in a shared radio access network is comparable to a nominal maximum speed of a fixed broadband line to a location is a striking example of ignorance, wilful or otherwise, of the very different operating characteristics and capabilities of these two transmission media,” Roetter soberly observed.

But he knows better.

Roetter

Kevin Post, columnist for the Press of Atlantic City, bought Navigant’s conclusions hook, line, and sinker and repeated them in the press.  In fact, he upped the ante parroting the time-honored provider argument that rural America doesn’t need 21st century broadband because, well, they just don’t want it:

This costly effort is aimed at bringing broadband to a group of people who mostly don’t want it, according to a 2010 Pew Internet survey.

Half of Americans who don’t use the Internet told Pew that the main reason is they don’t find it relevant to their lives.

Only one in 10 nonusers said they would be interested in starting to use the Internet sometime in the future.

Actually, the Pew Internet survey came well before Navigant’s outlandish conclusions, and didn’t directly address the rural broadband availability problem.  Instead, Pew was looking at broadband adoption rates, primarily in places that already have one or more broadband providers.  Pew found what providers have already realized themselves: broadband growth and adoption is slowing; everyone who wants the service in urban America already has it or wants it.  Those that don’t are typically older and lack computers or are too poor to afford the asking price.

Post’s suggestion that a Pew Study concluded rural America does not want broadband service is an exercise in fixing the facts.

That’s the magic of the Dollar-a-Holler Echo Machine.  Big telecom companies hire public policy consultants and researchers to find their way to “scientific” evidence proving their corporate agenda, and then feeds the “facts” and “research” to receptive reporters, astroturf “consumer groups,” and politicians to bolster their case.  It’s not AT&T suggesting there is no rural broadband problem — it’s Navigant Economics.

As Roetter writes, “A basic knowledge of wireless markets exposes the […] indefensible nature of the positions outlined above. A policy based on ‘tell me what you want to hear, pay me, and I will reproduce it all regardless of its merits’ is a disservice to professionals who try to remain objective and independent, i.e. professional.”

This co-op provides 25Mbps broadband in rural Minnesota.

Parts of rural Minnesota are teaching the nation a lesson or two about how to deliver rural broadband — form a community co-op and provide it yourself, or wait forever for a commercial provider to deem it sufficiently profitable to deliver a reasonable level of service.

Minnesota’s Broadband Task Force indirectly proved the case for community Internet access with their first official report on the state of broadband in the North Star State.

While the populous Twin Cities are well-provided-for by large cable and phone companies, most of rural Minnesota gets far slower (and spottier) access to telephone company DSL, which is increasingly uncompetitive and inadequate for the 21st century knowledge economy.  Commercial providers have repeatedly told rural Minnesota their 1-3Mbps DSL service is plenty fast enough, at least for those who can purchase the service.  City slickers enjoy speeds of 10Mbps or more in Minneapolis and St. Paul.  But as many more rural residents and small businesses will tell you, DSL just cannot get the job done at current speeds, especially for higher bandwidth applications.

Not all of Minnesota is stuck with second-class Internet access.  Two sections of the state where residents were unwilling to accept the broadband status quo now have speeds that rival anything on offer in Minneapolis or St. Paul, because they decided to provide the service themselves.

Farmers Mutual in Madison, Federated Telephone in Morris, and Paul Bunyan Communications in Bemidji have been running fiber optic cables up and down area streets and delivering next generation broadband to some very happy customers.  All are cooperatives — community-owned providers that put their customers (who also happen to be the owners) ahead of Wall Street shareholder profits.  The result: modern and reliable service, instead of “good enough for you” Internet access at sky-high prices from for-profit phone companies.

Farmers Mutual provides service at speeds up to 20/20Mbps, with faster service forthcoming in the future.  They also believe in an open Internet, free from provider interference.  Just outside of their service area, DSL (where available) often runs at speeds of 1Mbps or less.

Federated Telephone offers a unique Ethernet-based broadband service at 20/20Mbps speeds that advertises unlimited usage — a selling point when larger phone companies like AT&T now place limits on Internet access.  Outside of their service area, many rural Minnesotans are stuck using satellite Internet service or dial-up.

Paul Bunyan Communications goes one step further with a network that already delivers 25Mbps broadband in communities like Bemidji and Grand Rapids (Minn.)  Those speeds are simply unavailable from commercial providers in northern Minnesota.

Minnesota’s broadband story is retold across America.  Urban communities have fast speed, but high prices.  Rural communities have inferior DSL at high prices or nothing at all.  Only about 57 percent of Minnesota households now meet the statewide speed goal of 10/6Mbps service.  Cable operators have no problems achieving 10Mbps download speeds, but 6Mbps upload speeds are very uncommon.  Phone companies cannot reliably achieve either with traditional ADSL service.

The state’s broadband goals are aggressive:

By 2015, the state of Minnesota will:

• a. Be in the top five states of the United States for broadband speed universally accessible to residents and businesses; and,
• b. Be in the top five states for broadband access (availability); and,
• c. Be in the top 15 when compared to countries globally for broadband penetration (adoption).

Community owned co-ops are the most likely to help the state achieve their broadband goals. The state is currently ranked 24th in broadband speed.

Ebenezer Scrooge could successfully serve as the CEO of any large telecommunications company these days, and the New York Times knows a Christmas tale of woe when it sees one.  That is why the venerable newspaper printed a Christmas Eve editorial blasting Verizon’s new “non-aggression treaty” with America’s largest cable companies that puts coal in the stocking for any Verizon customer waiting for FiOS fiber-to-the-home service.  The newspaper believes the days of FiOS are numbered:

Verizon — Verizon Wireless’s main shareholder — relieved itself of the need to expand FiOS, its high-speed, fiber optic network, beyond the 18 million homes it set out to reach six years ago, a rollout that cost $23 billion. For the other 114 million homes in the country, it can simply bundle its wireless service with the cable and wireline broadband services of its partners. The agreement between Verizon and the cable carriers includes a joint venture to develop technology to integrate the wireline and wireless platforms.

Verizon’s cable deals squashed hopes that cable carriers’ purchases of wireless spectrum would lead to more competition against the dominant players, AT&T and Verizon Wireless. And it puts in doubt whether FiOS will ever be a serious competitor to cable, reducing the likelihood that video transmitted over broadband could break up cable’s regional oligopolies.

[…] Verizon’s deals suggest a future in which cable carriers will get uncontested control of high-speed broadband into the home while AT&T and Verizon will get uncontested control over wireless. For consumers with expensive wireless plans, pricey bundles of cable channels and costly, slow broadband, this does not look like good news.

Verizon’s economic future lies in the lucrative world of wireless.  Its FiOS network was an expensive gamble to reinvent its antiquated telephone network to drive customers to keep their landlines and spent a hundred dollars more on video entertainment and super fast broadband.  Wall Street hated the price and loathed the potential for costly competition that would force earnings down through aggressive price-cutting.  In some markets, Verizon FiOS has forced Comcast, Cablevision, and Time Warner Cable to be a little more generous with broadband speed and lighten up a little on the annual rate increases.

But convincing cable customers to switch remains a difficult proposition even when Verizon offers the superior service.  Verizon has not achieved the level of penetration it expected in many markets.  In short, people just don’t want to wait around for installers.  Besides, cable companies slash prices for customers threatening to depart.

Verizon’s deal with Time Warner and Comcast delivers Verizon Wireless desirable spectrum.  But the agreement to cross-market and cross-bundle product lines smacks of collusion, and is exactly the kind of turf protection that has kept cable companies from competing head-to-head with each other for more than three decades.  Is it more lucrative for Verizon to build out its FiOS network to compete or simply refer people to Time Warner or Cablevision for cable TV.  So long as cable doesn’t offer a competing wireless product, Verizon seems to think there is little harm done.

But for consumers, the absence of competition brings rate increases, reduced innovation, and declining customer service.

The one thing the telecom marketplace needs less of is the “take it or leave it” attitude that earned the scorn of cable customers everywhere.