AT&T’s Senior Executive Vice President of Legislative Affairs James Cicconi e-mail bombed AT&T employees Monday asking them to express their “deep concern” for Net Neutrality on the FCC’s Net Neutrality website’s comment section.  (Thanks to several Stop the Cap! readers, among them Dave, “Gaff”, “Bones”, “Prevent Caps” and James who sent news tips on this story. The delay in publication came from assembling a response you, as actual consumers, can fire back at the AT&T Propaganda Parade on the FCC website.)

More than 300,000 AT&T employees received the “suggestion” in their e-mail box, complete with ready-made talking points employees can use to parrot AT&T’s anti-Net Neutrality positions.  In a remarkably brave section, Cicconi suggests employees not use their company e-mail accounts when engaged in the “grassroots” push back, as if word of that maneuver would not promptly get leaked to the media.  (By Tuesday morning, it did.)  The FCC shouldn’t know the barrage of anti-consumer, anti-Net Neutrality comments came as a result of a PressureGram from AT&T Corporate.

“We encourage you, your family and friends to join the voices telling the FCC not to regulate the Internet,” Cicconi wrote in his letter.  “Those who seek to impose extreme regulations on the network are flooding the site to influence the FCC; it’s now time for you to voice your opinion.”

(Note: Most of those seeking to “impose extreme regulations” are actual consumers.)

The convenient “talking points” AT&T provided are identical to the comments found on any anti-consumer, telecom-sponsored astroturf group website.  That’s no surprise, considering most of those astroturf groups survive on the checks sent by those large telecommunications companies.

We debunk them for your convenience:

• America’s wireless consumers enjoy the broadest range of innovative services and devices, lowest prices, highest usage levels, and most choices in the world. Why disrupt a market that’s working so well?

That’s demonstrably false.  Consumers Union and other consumer groups independently found a high degree of concentration and obstacles to competition among providers of mobile data and Internet access services, which Net Neutrality rules would cover.  As Stop the Cap! has already reported, competition for wireless broadband is hardly a Battle Royale with virtually every carrier charging around the same amount for 5 gigabytes of maximum mobile web usage per month.  AT&T was charging a ridiculous $480 per gigabyte for those exceeding that limit, according to CU.  Americans pay an average of over $500 a year for wireless access, which hardly represents the lowest prices.  Consumers Union discovered Americans pay “much more than users in most other developed nations.”

Americans also endure restrictive phone plans that give exclusivity to popular handsets, limit certain web applications from wireless usage, and impose often stiff penalties for choosing to end a relationship with a wireless provider before the contract term has ended.

• There is fierce competition for wireless and broadband customers. Competition drives innovation and encourages companies to develop products, services and applications that consumers want. There’s been more innovation in this market than in any since the World Wide Web was introduced. The market is working for consumers. Don’t burden it with unnecessarily harmful regulations.

That’s brazenly false.  The wireless telephone industry has contracted in the last several years due to mergers and acquisitions and a determination by several independent resellers that profits were elusive reselling access to another company’s wireless network.  Alltel is now owned by Verizon Wireless.  Virgin Mobile, which took over Helio, will itself likely soon be owned by Sprint.  Amp’d Mobile, Disney Mobile and ESPN Mobile, among many other resellers, disappeared altogether.

Most rural Americans “enjoy” a monopoly broadband service provided, where available, by their local phone company providing slow speed DSL service.  Most medium sized cities are served by a duopoly — one cable and one phone company.  Innovation in broadband comes to some, such as those served by Verizon FiOS, and skipped for others, such as those suffering with Frontier, FairPoint, and other phone companies that believe standard DSL is “good enough.”  AT&T, among many other providers, now want to experiment with rationing the Internet with Internet Overcharging schemes designed to curb use of their broadband services.

• Network companies have to be able to manage their networks to ensure the most economical and efficient use of bandwidth, and provide affordable broadband services for all users. Network management is essential for consumers to enjoy the benefits of new quality-sensitive applications and services. The FCC rules should not stop the promise of life-changing, cost-saving services such as telemedicine that depend on a managed network.

That’s ludicrously false.  Managing networks, which sounds benign in theory, is often not in practice.  Several providers have recently taken a turn towards limiting access to those networks with usage rationing plans that limit consumers to a pre-determined amount of usage before overlimit fees or service termination kicks in.  AT&T is testing those schemes in Beaumont, Texas and Reno, Nevada this very day.  Stop the Cap! has repeatedly documented providers that admit their connectivity costs are dropping, right along with their investments in those networks to keep up with demand.  For some network companies, throwing hundreds of hours of online video to congest those networks seems to be an okay proposition, telemedicine or not.  Upgrade the networks that earn the American broadband industry billions in profits every year.

• The “net neutrality” rules as reported will jeopardize the very goals supported by the Obama administration that every American have access to high-speed Internet services no matter where they live or their economic circumstance. That goal can’t be met with rules that halt private investment in broadband infrastructure. And the jobs associated with that investment will be lost at a time when the country can least afford it.

That’s infamously false.  AT&T managed to eke out an existence after its merger with BellSouth when it had to live under a Net Neutral regime for two years.  As Tim Karr from Free Press notes, “AT&T is loath to mention that it made considerable network investment when it had to abide by Net Neutrality conditions, and then invested considerably less when it didn’t.”  Somehow, U-verse will survive a Net Neutral world.

Meanwhile, many other broadband providers are in no hurry to expand or build new networks unless their hands are forced by the other competitor in the market threatening to steal their customers away.  AT&T’s U-verse offering is a direct response to the cable television industry swiping their customers with “digital phone” and cable television bundles that include broadband.  Time Warner Cable earns most of its new broadband customers at the phone company’s expense when consumers tire of slow, unreliable DSL service.

For rural communities, a Net Neutral America won’t make much difference either way.  Without Net Neutrality protection, companies like Verizon continue to abandon more rural states, selling off operations to companies like FairPoint and Frontier Communications, which have uninspired broadband programs that bring slow DSL service to areas that will never be wired for Verizon fiber-optic FiOS.  Large phone companies like Verizon continue to layoff employees, especially in the traditional wireline telephone business.

If we wait for private companies to deliver broadband to every American, it will be a very long wait.  But when it does arrive, it would be nice if consumers could actually enjoy their broadband service without network throttles and Internet Overcharging schemes.

• The FCC shouldn’t burden an industry that is bringing jobs and investment to the country, but if it is going to regulate the Internet it should do so fairly. The goal of the FCC should be to maintain a level playing field by treating all competitors the same. Any new rules should apply equally to network providers, search engines and other information services providers.

That’s a laughably false premise.  When is the last time you bought broadband service from Yahoo!, Bing, or Google?  AT&T wants to compare their broadband apples with search engine oranges.  A level playing field would mean an end to the too-cute-by-half cable industry’s unofficial non-compete regime which makes sure no large cable operator intrudes on someone else’s territory.  It would mean an end to exclusive wireless handset provisions and gotcha contract terms designed to hold customers hostage to their wireless provider.  It would guarantee that if a municipality is fed up with the broadband backwater status afforded it by providers convinced what they deliver is “good enough,” that municipality can construct their own advanced broadband network and do the job private providers won’t.

Broadband regulated in the providers’ best interests have resulted in middle-of-the-pack broadband service for Americans, not the world class networks America can use to leverage a leadership role in the digital economy of the future.  The FCC should regulate the Internet to provide free, open access to innovative products and services that will really create new jobs for Americans.  They should definitely not continue a protectionism regime already in place that forces Americans to choose near-identical wireless service plans at high prices, and broadband service from one or two providers with dreams of Internet Overcharging schemes and speed throttles.

John Badal, CEO of Sacred Wind Communications

NBC Universal and American Express today announced Sacred Wind Communications (Albuquerque, N.M.) as the winner and most inspiring small business in the “Shine A Light” program, determined by public vote.

Sacred Wind Communications will receive $50,000 in grant money and $50,000 in marketing support from American Express, and will be featured on MSNBC’s small business show, “Your Business.”

John Badal, described by the Shine A Light Foundation as an entrepreneur, founded Sacred Wind to provide service across the largely ignored Navajo Reservation in New Mexico.  Fewer than 40% of the homes had access to even basic telephone service, provided by Qwest on what the foundation describes as a “dilapidated telephone system.”

Badal, along with a few others, thought Qwest’s turtle-like-speed to provide basic telephone service was not acceptable.

Badal should know — he was the former president of Qwest New Mexico from 2000-2004, overseeing that phone network.

During his involvement with Qwest, the frustration to wire the economically challenged Native American community in his area was daunting.  He told Fierce Broadband Wireless that laying copper cable throughout a rugged, rural desert area to reach a small number of customers who couldn’t afford to pay much for service wasn’t economically feasible for Qwest.

In four years, Qwest only managed to bring phone service to 42 new customers–out of thousands. “It took us two years to get through the rights of way process. Six of those homes had moved by the time the process was completed. It would have taken 45 years to reach 70 percent of the homes in our territory,” Badal said. “We needed a different technology altogether. We needed to go wireless.”

Sacred Wind's service areas (click to enlarge)

Badal decided to build a for-profit telecommunications company with a business plan that would depend on funding from the government.

“The only way any company could hope to provide service to the Navajo Nation is with the help of the Federal Communications Commission’s Universal Services Fund,” Badal told New Mexico Business Weekly in 2005.

“We can make this affordable, where Qwest cannot,” says Badal, who expects half of the cost to be picked up by government funding. “That is a necessary part of this equation. Without that, the Navajo cannot be served.”

Virtually every American pays into the Universal Services Fund through a charge levied on telephone bills.  The funding underwrites the expense of providing rural America with access to basic telecommunications services.

In 2004, the same year Badal left Qwest, the company agreed to sell its telephone business on the Navajo Reservation to Badal’s new company.  Sacred Wind, which the company says “evokes a sense of connection between what we do – to send communications over the air – with a larger-than-life purpose for starting this business,” launched service two years later in 2006.

Sacred Wind uses recently developed wireless technology to provide phone service to 2,700+ customers, using both point-to-point wireless and fixed WiMAX to reach as many customers as possible in the sparsely populated desert region.  It’s a challenging proposition for any company, considering most of their service area has less than one home per square mile.  Even when finished constructing their network, Badal estimates there will only be two or three homes served per square mile.

One third of Sacred Wind’s customers live in Navajo or federal government sponsored public housing, another third live in small clusters of a half dozen homes separated by several miles, and the last third live at least a half mile from the nearest neighbor.  Most are economically disadvantaged and have household incomes below $15,000 a year — 57.9% living below the poverty level.  More than two-thirds of reservation homes have no telephone, with some driving up to 30 miles to reach the nearest pay phone.  Several lack access to electricity, which makes wireless phone service and broadband even more challenging.  Sacred Wind is exploring solar options to serve these unpowered homes.

The benefits achieved from Sacred Wind’s focus on their service area are obvious – they know the landscape, the culture, the economics, and the people.  The company will work on problems that a large multi-state carrier like Qwest would not.  Technicians trying to reach one customer five miles away from the nearest wireless base station could not get service until a technician experimented with bouncing the three gigahertz wireless signal off a granite cliff face to extend coverage, which worked.

A company specializing in providing service to rural Native Americans, that also has a non-profit arm dedicated to computer training, provides scholarships, and e-commerce opportunities for Native Americans, is a natural for recognition, and the public responded, calling Sacred Wind’s mission inspiring.

“It’s a real honor to be voted most inspiring small business in the Shine A Light program,” Badal said. “It’s so exciting and rewarding to start your own business and be able to make an impact on the community. Through the support we will receive from American Express as winner of this program, we will be able to further extend our commitment to serving the Navajo people with advanced technology and educational resources.”

Since August, people across the country have nominated thousands of small businesses for the “Shine A Light” program. Three finalists were ultimately selected with the help of host and entrepreneur Ellen DeGeneres, fashion designer and entrepreneur Diane von Furstenberg and MSNBC’s small business expert and host JJ Ramberg.

[flv width=”480″ height=”320”]http://www.phillipdampier.com/video/sacred wind intro.flv[/flv]

A one minute introduction to Sacred Wind Communications

Sacred Wind Broadband Speed/Pricing

In addition to telephone service, Sacred Wind also provides Internet access to its customers, and here is where the story becomes considerably less inspiring.

Sacred Wind’s “broadband” service for most affordable tiers fails to qualify as “broadband” at all, using the FCC standard of 768kbps.  Pricing is exorbitant and speeds are slow.

It self-describes its dial-up option as “stable, fast, and affordable.”  The “affordable” claim may be true when comparing pricing with the first broadband tier that actually meets the minimum definition of broadband – $49.95 a month for 768kbps service.  Paying $79.95 a month will bring you their maximum speed offering — just 3Mbps.

The company also sells customers annual contracts to avoid the $99 installation and $65 equipment fees.

Still, for those who have never had telephone service, much less Internet access, it’s considered by many residents to be a good beginning.  The company is amenable to the idea of raising those speeds when technically and financially feasible.

[flv width=”480″ height=”320″]http://www.phillipdampier.com/video/Fujitsu Sacred Wind.mp4[/flv]

Fujitsu showcases Sacred Wind Communications and how it approached the technological challenges involved in providing service to the Navajo Reservation [8 minutes]

Unfortunately, like its bigger telephone brethren, Sacred Wind is not entirely free from the telephone industry politics that often lobbies for anti-consumer policies.  A concerning document on Sacred Wind’s website promotes a questionable legislative agenda, including support of legislation that would permit providers to “create fair compensation in network use by identifying traffic on our networks,” which is a Net Neutrality no-no if it applies to their broadband network.  Another mysterious bullet point, not well explained, objects to “video programming and broadcasting practices that make it difficult to provide an affordable product to our customers.” That could apply to wireless frequency allocations or traffic on their broadband network — it’s not well defined.

While the FCC works on its goal of providing broadband access to underserved Americans, actual case studies illustrating “successes” like Sacred Wind that only manage to bring 3Mbps service to rural areas underline the need for Universal Services Fund reform.  Dedicating additional economic assistance to construct considerably more advanced networks to meet the needs of an increasingly high bandwidth Internet is essential to correct the urban-rural digital divide.  The original purpose of the USF to guarantee basic phone service in rural areas was a noble idea a decade ago, but that was then and this is now.

As the pile of money in the USF continues to grow from Voice Over IP and mobile phone surcharges, it was only a matter of time before waste, fraud, and abuse also turned up.  The administrators of the USF have often wasted considerable amounts of that money on questionable projects in decidedly un-rural areas.  Redirecting, reforming, and broadening USF resources to cover broadband deployment in areas like the Navajo Reservation may be one of the only ways to build sustainable and equitable broadband access networks that are scalable and affordable, even for the most financially-challenged communities.  Providing 256kbps service for $30 a month doesn’t come close to cutting it in poverty-stricken communities.

Additional video coverage of Sacred Wind can be found below the jump.

… Continue Reading

Facebook and Twitter have officially signed up for the Net Neutrality battle on the side of consumers demanding a free and open Internet.

Facebook co-founder Mark Zuckerberg and Twitter’s Evan Williams added their signatures to a letter expected to reach Federal Communications Commission Chairman Julius Genachowski this morning. The letter, signed by 24 high profile Internet executives, calls on the FCC to continue efforts to “begin a process to adopt rules that preserve an open Internet.”

Both companies have not been major players in the political debate surrounding Net Neutrality until now.

The correspondence comes after two weeks of sustained attacks on Net Neutrality from several dozen Republicans on Capitol Hill and intense lobbying from telecommunications companies to drop the issue.

One signer, Echostar CEO Charlie Ergen, is no stranger to pro-consumer telecommunications legislation.  Prior to the launch of DISH Network, Ergen sold satellite dish equipment to consumers and was an active participant in the battle to pass the 1992 Cable Act, which mandated fair and open access to cable programming networks making DirecTV and DISH Network possible.  Ergen’s company owns Sling Media, manufacturer of the Slingbox, a device that streams television programming over the Internet for private use.  The Slingbox has been banned from certain wireless mobile networks, a prohibition that would end should Net Neutrality rules take hold.

… Continue Reading

Verizon’s ongoing effort to shed itself of legacy phone operations in smaller communities and states has triggered a wave of worker retirements, contributing to worker shortages in some regions.  In West Virginia in particular, Verizon’s plan to exit the entire state, leaving service in the hands of Frontier Communications, has many employees deciding the time to get out is now.  In August, Verizon was forced to bring in outside contractors to deal with repair work created by a storm-filled summer.  The decision met with strong opposition from the local Communications Workers of America Local 2001 union, which represents the remaining Verizon employees.

Verizon itself has been cost-cutting, and shed 7% of the workforce providing upkeep for the traditional phone network in just the past two years.  Many other employees are taking early retirement offers, or simply deciding to retire with their Verizon pension intact.

After the CWA Local 2001 unit ran an informational picket, the outside contractors were gone by September 19th.  The CWA has been negotiating with Verizon to create a Working Retiree program to provide staff support during difficult periods like those created from storm damage.

The CWA continues its strong opposition to Verizon exiting several states, selling its network to Frontier Communications.  The union believes the transaction will saddle those communities with a lower quality telecommunications future from a provider mired in the debt required to finance the transaction.

[flv width=”320″ height=”240″]http://www.phillipdampier.com/video/WCHS Charleston CWA Protests Verizon Contractors 8-31-09.flv[/flv]

WCHS-TV in Charleston, West Virginia covered the CWA informational picketing in late August. [1 minute]

John Boehner (R-Ohio)

Eighteen Republican senators joined twenty House Republicans in a letter writing campaign to get FCC Chairman Julius Genachowski to drop Net Neutrality from the agenda at the Federal Communications Commission, calling the policy “counterproductive,” and would create a “chilling effect” on broadband investment in the future.

Many GOP members signing the latest round of letters also took issue with Net Neutrality a few years ago when it was a hot topic in Washington.

After Sen. Kay Bailey Hutchison’s aborted attempt to de-fund FCC enforcement of Net Neutrality regulations, the past month has seen a full frontal assault on Net Neutrality by many Republicans.  Minority Leader John Boehner (Ohio) and Republican Whip Eric Cantor (Virginia) co-authored a letter to President Barack Obama suggesting he intervene to drop Net Neutrality policies and instead focus on the national broadband plan.

Any regulations that would prohibit Internet service providers from managing their networks, they said, would discourage those companies from investing the billions of dollars needed to expand broadband access.

“We believe that network neutrality regulations would actually thwart further broadband investment and availability, and that a well-reasoned broadband plan would confirm our view. So to hastily begin the process of adopting network neutrality rules months before issuing such a plan implies that politics are driving the FCC’s decision-making process.”

Ranking Member of the House Communications, Technology & the Internet Subcommittee, Rep. Chris Stearns of Florida fired off a letter to Genachowski echoing the same sentiment:

Sam Brownback (R-Kansas)

“At first glance, net neutrality regulations may appear reasonable and harmless, but, a deeper examination reveals that net neutrality is neither reasonable nor harmless. These mandates would harm consumers, reduce competition, and discourage new investment and innovation at a time of tremendous technological growth.”

“The FCC bears the responsibility to prove a market failure, especially since its 2002, 2005, 2006, and 2007 decisions on cable modem service, digital subscriber line service, broadband over power line service, and wireless broadband service were predicated on the notion that the broadband market nationwide is competitive and that regulation is unwarranted,” Stearns wrote.

Of course, during the years he cites, the Republicans enjoyed a majority on the Commission that made that finding.

Stearns and his colleagues suggest that the FCC could only intervene if substantial evidence existed the broadband marketplace was collapsing.

The Senate Republicans, led by Senator Sam Brownback of Kansas and Chuck Grassley of Iowa, questioned the need to adopt new regulation, suggesting only two abusive incidents have occurred in the last five years that would have been prohibited by the regulations.

“It appears your decision to create new commission rules is outcome-driven. Your promulgating network neutrality rules seems to emanate from a fear that there may be some problems related to openness in ‘the future.’  Our view is that it is harmful for the commission to impose industry-wide rules based upon speculation about what may occur in the future.”

“Such a major policy shift should be contemplated with only all of the FCC Commissioners involved,” they wrote. “To do it with just one party reduces the confidence the public and Congress has in the proposal.”

Pro Net Neutrality groups had none of it:

Gigi Sohn, Public Knowledge:

It is truly unfortunate that the House Republican leadership has put itself in the position of trying to slow down the greatest economic engine for job creativity and innovation ever created. Under the neutral, non-discriminatory Internet, thousands and thousands of new businesses were created and millions of dollars were invested.

The latest House Republican letter asking for the FCC to slow action on preserving an open, non-discriminatory Internet is simply another attempt at a delaying tactic by those who favor big telecom and cable companies over competition and innovation.

The letter also has fatal flaws, such as when it asserts that Net Neutrality would make investment more difficult, or that Net Neutrality would result in lower speeds and higher prices for consumers. Both of those claims are false. Billions of dollars were invested in the Internet ecosystem, not only by carriers, but by companies doing business on the Internet, and by consumers subscribing to Internet services. That is the investment we seek to expand. There is nothing in banning discrimination on the basis of source, ownership or destination of bits would create lower speeds or raise prices. Those are simply distractions.

Net Neutrality is about big telecom, cable and wireless companies (which are often the same) picking winners and losers on the Internet. It has nothing to do with online services, consumer electronics or applications. The FCC should proceed to guarantee the freedom of the Internet that all consumers and businesses deserve.

Markham Erickson, Open Internet Coalition:

This issue has been under debate since 2005 when the Supreme Court issued its Brand X ruling. The previous Republican-led FCC engaged in ad-hoc enforcement in the Comcast case. To suggest this is a radical policy u-turn is simply incorrect.

The Internet existed for more than 25 years under a neutral regime. During that time, a national data network was built out by telcos and cable providers, despite a neutrality requirement. To suggest that a return to that status quo threatens broadband investment is not borne out by experience. In fact, it is critical to investment that this issue be addressed sooner rather than later — further delay in addressing this core policy issue will harm investment flows into new and innovative technologies.

“