Credo Action delivers flowers to the FCC

Over the last two days, the SavetheInternet.com Coalition, their allies and other broadband activists have delivered more than two million signatures from Americans demanding the Federal Communications Commission adopt real Net Neutrality reforms.

FCC Chairman Julius Genachowski is pushing a set of weak regulations that give just about everything to giant phone and cable companies, and leave Internet users with almost nothing.

We still have time to fix this toothless rule before it goes to a vote Dec. 21. Hence, the petitions.

The petition marathon comes as the FCC closes the public comment period on proposed Net Neutrality reforms.  Public interest groups ranging from Free Press, Common Cause, Credo Action, ColorofChange.org, and Public Knowledge, among others were involved in the petition relay.

Credo Action even sent flowers, protesting Genachowski’s apparent retraction on strong Net Neutrality.  Two massive funeral arrangements, one labeled “R.I.P. Net Neutrality” were delivered to the agency on Monday.

“The public will accept nothing less than real Net Neutrality,” said Misty Perez Truedson of Free Press. “No almost Net Neutrality, no half Net Neutrality and no fake Net Neutrality. And we hope that while he is considering his proposed rules, FCC Chairman Julius Genachowski remembers that millions of people are expecting him to keep his promise to protect the open Internet.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/2 Million.flv[/flv]

Watch this compilation of videos from those delivering the petitions to the FCC and learn more about why Net Neutrality is important.  (22 minutes)

HP's Snowjob: The company that brought you the $70 ink cartridge supports an end to flat rate Internet service to "save" you money.

HP’s Joe Weinman argues consumers are behind the drive to abandon flat rate, “all you can eat” broadband pricing.

Weinman, whose company sells products and services to some of America’s largest broadband providers, has taken up their position that flat-rate Internet service is bad for you, claiming many are paying too much for Internet service they use too little.

In an essay posted on GigaOM, Weinman brings back the all-y0u-can-eat buffet metaphor:

For the record, I like unlimited Internet access just as much as anyone else. However, such plans appear to be on their way out, and here’s why. As I’ve explored in ”The Market for Melons” (PDF), pay-per-use is not an evil plot by greedy robber barons, but a natural outcome of independent, rational consumer choice. Consider a town with an all-you-can-eat (flat rate) buffet and an a la carte (pay-per-use) restaurant. Smart shoppers on diets will save money by patronizing the a la carte restaurant, whereas heavy eaters will save money by visiting the buffet. As patrons switch, the average consumption of the buffet will increase, driving price increases for the luncheon special, causing even more users to switch to pay-per-use.

Bottom line: it is not the proprietors driving this dynamic, but the customers themselves acting out of pure, rational self-interest—light users, by deciding not to subsidize the heavy ones, foster the vitality of the pay-per-use model.

Unfortunately for Weinman, most American broadband customers don’t believe a word of this, and even he was forced to admit as much when he noted consumers “often prefer to overpay for flat-rate rather than save money but risk bill shock.”

Karl Bode at Broadband Reports wasn’t suckered for a moment either, noting:

[…]Cable industry lobbyists would like the public to believe that such a shift isn’t about making more money, it’s about helping the poor. Not only is the metered billing push absolutely about making money, it’s about artificially constricting the pipe to protect uncompetitive carriers and TV revenues from Internet video. But instead, there’s a very concerted effort afoot to portray this shift as necessary, inevitable, and even altruistic.

Most consumers prefer the simplicity of flat rate pricing, and understand that ISPs are perfectly profitable under the flat-rate pricing model. They also understand that this is a pipe dream forged by never-satisfied investors, and once implemented ends with ever soaring per gig fees and ever shrinking usage caps.

Weinman’s essay completely ignores the reality his preferred pricing model already delivers to those who live under it in Canada.  Canadian broadband rankings continue to decline as customers there pay higher prices for a lower level of service, with usage caps that actually decline when new competitive threats from online video emerge.

Just what the doctor ordered: HP's Rx for American Broadband

We had to take time out to respond directly to Weinman and his cheerleading friends (see the comments section), some who wrote comments below the piece and couldn’t be bothered to disclose they owe their day jobs to industry-backed dollar-a-holler groups that are committed to delivering on behalf of their provider benefactors:

When Big Telecom comes ringing with promises of savings from metered or capped broadband, hang up immediately.

These plans save almost nobody money and expose dramatic overlimit fees to consumers, creating the kind of bill shock wireless phone users endure.

The OPEC-like Internet price-fixing on offer from big players delivers broadband rationing and sky high prices, while retarding Internet innovations that providers don’t own or control.

Consumers are forced to double check their usage and think twice about everything they do online out of fear of being exposed to huge overlimit fees up to $10 a gigabyte for exceeding an arbitrary limit ranging from 5-250GB.

Americans already pay too much for Internet service and now the providers want more of your money. The rest of the world is moving AWAY from the pricing schemes Weinman would have us embrace. It’s such a serious issue in the South Pacific, the governments of Australia and New Zealand are working to address the problem themselves.

Providers are already earning BILLIONS in profits every quarter from their lucrative broadband businesses. Now the wallet biters are back for more, with the convenient side benefit that limiting consumption is a great way to prevent Internet-delivered TV from causing cord-cutting of cable TV packages.

As far as consumers are concerned, and Weinman admits as much, people are happy with today’s unlimited price models. When Big Telecom complains people are overpaying for broadband, wouldn’t their shareholders be telling them to shut up and take the money? There is more to this story.

Weinman defends the extortion proposition Big Telecom would visit on us: either give us limited use pricing or we’ll raise all of your prices.

But as consumers have already figured out, these providers never reduce prices for anyone. When was the last time your cable bill went down unless you dropped services?

Don’t be a sucker to Big Telecom’s “broadband shortage” or pricing myths. Broadband is not comparable to water, gas, or electric. The closest comparison (and the one they always leave out) is to telephone service, and as we’ve seen, that business is increasingly moving TOWARDS flat race, unlimited pricing.

Want to know what metered pricing does to the wallets of consumers? Just ask Time Warner Cable customers in Rochester, Greensboro, San Antonio, and Austin what they thought about the cable company’s “innovative” pricing experiment that tripled the price for the same level of broadband customers used to get for $50 a month. After the torches and pitchforks were raised over $150 a month broadband service, Time Warner backed down.

Either with or without metered pricing, the cable company raised its prices three times last year alone.

The industry’s meme that “usage-based pricing” in inevitable is only true if consumers allow it to happen.  The parade of Internet Overcharging advocates all share one thing in common — they earn a living from the providers that dream about these pricing schemes.  Always follow the money.  As we’ve exposed repeatedly, the vast majority of defenders of these kinds of pricing schemes are not consumers.  They are:

• The providers themselves;
• Wall Street banks, investors, and the business media catering to them;
• Non-profit groups receiving substantial contributions from providers;
• Industry-funded “think tanks” and research that can carry the industry’s public policy agenda, hoping the media that quotes them are too lazy to follow the money;
• Equipment and service vendors, unions, and other groups who depend on the business or jobs they get from providers.

The Federal Reserve comes to the rescue of Big Telecom

Credit crisis?  What credit crisis?  That’s for little people.

While “challenging economic times” and “a difficult business environment” were among the reasons cited by banks for raising consumer credit interest rates, closing accounts, and slashing credit lines, some of America’s largest corporations received special credit favors from the Federal Reserve — cheap and easy money with little collateral required.

Among the companies that feasted on $3.3 trillion dollars of bailout credit largess — Verizon Communications, which had its $1.5 billion in debt picked up by the Fed — easy credit accessed twice during a major credit crisis.

The Washington Post uncovered Verizon’s Federal Reserve “Platinum Card” while reviewing more than 21,000 recently released loan records, forced into the open by new financial regulatory legislation.

Most of Verizon’s credit came in the form of covering the company’s “short term paper” — temporary debt taken on to fund daily business activities.  Although the Federal Reserve got the loan money back, the fact only major corporations, Wall Street banks, and other inside players got access burns many Americans, especially small business owners forced into hardship or out of business when their credit lines dried up at the height of the credit crisis.

While banks like Advanta, popular with small businesses, shut down all of its credit operations and raised interest rates to 30 percent or more on current balances, large companies like Verizon never had a thing to worry about thanks to the federal government.

“The American people are finally learning the incredible and jaw-dropping details of the Fed’s multitrillion-dollar bailout of Wall Street and corporate America,” said Sen. Bernard Sanders (I-Vt.), a longtime Fed critic whose provision in the Wall Street regulatory overhaul required the new disclosures. “Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Verizon spokesman Robert A. Varettoni said that it was “an extraordinary time,” adding that there was no credit available otherwise at the time.

Ordinary Americans already knew that, of course.  But they didn’t get the same kind of help companies like Verizon received.

As far as Sanders is concerned, banks and large American corporations did splendidly during The Great Recession — some like Goldman Sachs are paying record-busting bonuses for the second year running — all thanks to the special favors given by the federal government during the last months of the Bush Administration.

Sanders told the Post the federal government could have made demands on those accessing easy credit to help ordinary Americans, such as requirements to lend to small businesses, modify mortgages of homeowners, or agree to hire more workers.

“We bailed these guys out, but the requirements placed upon them had very little positive impact on the needs of ordinary Americans,” Sanders said.

While America’s largest cell phone companies battle over map coverage and work towards limiting wireless data usage, one super-regional wireless carrier is willing to pay customers to dump their old carrier and switch.

Privately owned Cellular South, which delivers home coverage over its own network in Memphis, the Florida Panhandle, Rome, Georgia, and parts of Mississippi and Alabama, is offering $100 to hand over your AT&T iPhone and get a brand new Android phone.  The company will even cover up to $200 of any early termination fees charged by AT&T or other carriers.

The company offers smartphone plans starting at $50 a month that includes unlimited mobile web access.  Customers with two or more smartphones on one account can get “unlimited everything” service for $59.99 per line.

Cellular South, virtually unknown outside of its service areas, has gained wider attention in recent days because of its stand against Verizon Wireless’ LTE network policies and an unrelated total meltdown of a Lauderdale County, Mississippi Board of Supervisors meeting that began with a debate about switching away from AT&T.

[flv width=”640″ height=”447″]http://www.phillipdampier.com/video/Cellular South Ad.flv[/flv]

An ad for Cellular South promotes the fact its smartphone data plan delivers unlimited usage.  (1 minute)

The company is planning its own LTE network for its local coverage areas and got into a major dispute with Verizon Wireless, a fellow CDMA carrier, over the LTE standard’s roaming capabilities.  Wireless providers who belong to the Rural Cellular Association are disturbed that without interoperability requirements from the FCC, big national carriers will be able to exclude small players from their networks.  Even worse, companies like Cellular South may have trouble finding affordable wireless equipment that works on the frequency bands they are allocated to use.  What this means for consumers is that equipment purchased for Cellular South’s LTE network may not function while roaming.  The carrier told the FCC:

Lack of interoperability in the 700 MHz band will impose significant costs and burdens upon A Block licensees, which will competitively disadvantage smaller and regional carriers and their consumers. By delaying a decision on interoperability, the FCC is denying rural America access to 4G service. Cellular South paid $192 million dollars for licenses in Auction No. 73 and for months has been prepared to immediately put available capital to work to deploy its 700 MHz network in compliance with the FCC’s build-out requirements and for the benefit of its rural and regional consumers. But, without the certainty of interoperability across the 700 MHz spectrum, Cellular South’s capital will remain on the sidelines – unable to create jobs or increase economic activity within its 700 MHz license area.

Collectively, the rural and regional carriers holding Lower A licenses do not have the scale or scope to attract equipment manufactures making Band Class 17 or Band Class 13 equipment to produce Band Class 12 equipment at reasonable costs. Even where Band 12 equipment can be made available, the costs are unnecessarily inflated by the limited scale resulting from the lack of interoperability across the 700 MHz bands. If such equipment were produced, it would not be technically capable of roaming outside of Band Class 12 deployed networks. Nevertheless, rural and regional carriers like Cellular South may have no choice but to reduce the speed and size of their 700 MHz deployment and pay the unnecessarily inflated costs of Band 12 equipment and devices if it wants to compete with Verizon Wireless and AT&T in the 4G market.

The Rural Cellular Association noted the FCC inquired whether or not rural carriers could simply rely on the good will of Verizon Wireless, which is running its own private interoperability initiative, the Rural American Partnership Program.  Verizon says it will work with rural carriers and sign roaming agreements with participants to help ensure equipment was standardized across multiple carriers.  But the Rural Cellular Association claims Verizon’s offer was akin to a digital Trojan Horse — a gift to rural operators on the outside, but one that benefits Verizon far more than rural carriers on the inside.

“Verizon’s Plan provides a limited number of rural carriers with nominal opportunity to add or extend their 4G coverage in a way that only fills Verizon’s coverage gaps. Additionally, Lower A licensees paid a significant amount of money for their spectrum, more than Verizon paid for the C block per MHz/pop, and have stringent geographic-based build-out requirements,” Rebecca Murphy Thompson, the rural carriers’ general counsel wrote the Commission. “Considering these strict build-out requirements, Cellular South will focus on building its own business, not helping Verizon expand its network.”

The Rural Cellular Association (RCA) also continued its campaign against what it sees as anti-competitive behavior on the part of AT&T and Verizon.

“In addition to interoperability, RCA described how its members have limited options to obtain nationwide data roaming, but their customers still expect nationwide coverage and comparable services to their urban counterparts. Larger carriers are blocking rural and regional carriers from obtaining data roaming with reasonable terms and conditions because there is no regulatory mandate. RCA plans to supplement the record to provide examples of how AT&T and Verizon have blocked rural and regional carriers from negotiating data roaming agreements with reasonable rates. After a year of negotiations, Cellular South now has a data roaming agreement with one of the larger carriers.”

Lauderdale County, Miss.

For rural America, unaccustomed to getting good cellular coverage, the presence of rural carriers specifically targeting underserved communities as their main business function is a welcome change from “extended service” provided by larger carriers, mostly for travelers, as an afterthought.  These smaller carriers also often deliver savings in the communities they serve.

In Lauderdale County, Mississippi, the Board of Supervisors met earlier this week to review potential savings of at least $10,000 a year for the county sheriff’s department, just by ditching AT&T for Cellular South.  While Sheriff Billy Sollie had no objections to that, a follow up discussion about what to do with the savings started an on-camera debate that quickly descended into personal attacks and traded accusations.

District 5 supervisor Ray Boswell and Sheriff Sollie turned the meeting into a spectacle with allegations of drug and alcohol abuse, illegal use of county property, culminating in claims the sheriff was a “crybaby” and “a disgrace.”  A sheriff’s deputy even joined in at one point, yelling at Boswell for making unsubstantiated allegations and suggesting Boswell was arrested on felony charges but had his record expunged.

While other members of the board, including its president, sat stunned into silence, no one bothered to gavel the shouting match out of order.  The resulting 15 minutes of fame has created a sensation, and many area residents are embarrassed and upset.

Cellular South will probably win the county’s business, but heaven help the customer service representative that takes a call from Ray Boswell about a service problem.

[flv]http://www.phillipdampier.com/video/Lauderdale County Meltdown 12-6-10.flv[/flv]

Watch for yourself as a county meeting descends into chaos.  As it goes from bad to worse, nobody bothered to intervene to stop the escalating accusations and counter-accusations that have since become an embarrassment for residents of Lauderdale County, Miss.  (18 minutes)

Copps

Julius Genachowski’s fellow Democratic commissioner Michael Copps is signaling discontent with the FCC chairman over his weak approach at Net Neutrality reform.

During a Thursday speech before the Columbia University School of Journalism in New York, Copps said several aspects of Genachowski’s proposed reforms are non-starters for him.

In particular, he objects to Internet toll-booths, part of the “paid prioritization” argument that would allow preferred content to get traffic priority, presumably in return for money.  Copps sees that as the Internet’s great un-equalizer, allowing deep pocketed content providers to gain a competitive advantage.

Copps calls such arrangements dangerous, insisting they “cannot be allowed to supplant the quality of the public Internet service available to us all.”

Copps also finds it unacceptable that wireless providers gained major concessions that would allow them to treat content unequally.

“Internet Freedom also means guaranteeing openness in the wireless world as well as the wired. As people cut their wired connections, why would we deny them openness, accessibility and consumer protections in the wireless world,” Copps asked.

None of the proposals Genachowski makes may withstand legal challenges, Copps says, if the Commission does not reclassify broadband under Title II of its regulatory authority, declaring the Internet a “telecommunications service.”

“If this requires reclassifying advanced telecommunications as Title II telecommunications — and I continue to believe this is the best way to go — we should just do it and get it over with,” Copps said.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/BBC News The public is crying out for news and information 12-3-10.flv[/flv]

The FCC’s Michael Copps appeared on BBC America’s World News to discuss his concerns about the quality of American broadcast journalism and Internet policies.  (4 minutes)

Mignon Clyburn, the Commission’s newest Democratic member, is being lobbied heavily by public interest groups to join Copps in demanding a better deal for consumers.  But some analysts think she’ll be the easiest vote for Genachowski to get.

Clyburn is a strong proponent of Net Neutrality and has made the issue a centerpiece of several public appearances.

Genachowski may find his proposal ultimately will fail to win a majority vote, because Republicans are strongly opposed to it, and his fellow Democratic commissioners may find voting for what some are calling a capitulation to providers too unpalatable.

Republicans promise to try and derail any Net Neutrality reforms in the House of Representatives when they take control in January.

[flv width=”540″ height=”380″]http://www.phillipdampier.com/video/Mignon Clyburn Open Internet Champion.flv[/flv]

Mignon Clyburn receives thanks from public interest groups for her support of an Open Internet.  (2 minutes)