Virgin Media is doubling customer broadband speeds... for free.

Great Britain is leapfrogging ahead in the global broadband speed race with two announcements this morning that represent major advances in British broadband.

First, Virgin Media is announcing it will double the broadband speeds for four million of its customers starting next month, for free.

The company says it will be the first residential provider in the United Kingdom offering 120Mbps broadband — a 20Mbps speed increase for their existing 100Mbps clients.  Customers on Virgin’s 10, 30, and 50Mbps tiers will soon receive free upgrades to 20, 60, and 100Mbps, respectively.  Those on the company’s popular 20Mbps plan will have their speeds tripled to 60Mbps.

That’s a major advancement for British broadband, where dominant BT-provided DSL runs at speeds averaging just over 6Mbps.

The new speeds were made possible by “modest investments” in Virgin’s fiber network, according to Virgin Media CEO Neil Berkett.

Berkett said the new speeds would help meet growing demand for faster access to support the proliferation of new digital devices.  Because Virgin invested primarily in fiber and cable broadband, speed upgrades on their existing infrastructure come “at a fraction of the cost of other network operators.”

That understanding was not lost on Sky Broadband, a growing competitor in the United Kingdom.  Sky this morning announced it has launched a newly-upgraded 100Gbps optical network to support its 3 million broadband customers.  The company is spending several hundred million British pounds on updating its network to position itself to become Britain’s largest Internet Service Provider.

Sky’s new network is based on the latest Alcatel-Lucent fiber technology, capable of supporting 100Gbps speeds on each of the individual 88 wavelengths on a single optical fiber.  Sky deployed the new dense wavelength division multiplexing technology on its existing optical fiber backbone network, demonstrating the infinite upgrade possibilities fiber optic technology offers.

Sky pitches its network capacity to consumers as a key benefit of its service, noting it is free of “traffic management” policies that reduce speeds for customers of other Internet providers.

The upgrade arrives just in time to handle the expected explosion of online traffic with this week’s introduction of Netflix streaming across Great Britain.

Customers of some of the largest cable, phone, and satellite companies will pay an average of 3-6 percent more for service in a series of rate increases taking effect between now and the end of February.

AT&T U-verse

If your introductory offer has expired, expect to pay more for just about everything as of Feb. 9.

Cable TV:

• U-family will increase from $54 to $57,
• U100 will increase for some from $54 to $59 and for others from $59 to $64,
• U200 will increase from $69 to $72/U200 Latino will increase from $79 to $82,
• U300 will increase from $84 to $87/U300 Latino will increase from $94 to $97,
• U400 will increase from $109 to $114,
• U450 will increase from $117 to $119/U450 Latino will increase from $127 to $129.

For high speed Internet customers who ordered their current speed before June 12, 2011, effective with the February 2012 billing statement, the monthly price for Basic will increase from $19.95 to $25, Express will increase from $30 to $33, Pro will increase from $35 to $38, Elite will increase from $40 to $43, and Max will increase from $45 to $48. If you are paying a monthly high speed Internet equipment fee for the Residential Gateway, the amount will increase from $4 to $6.

For Voice Unlimited, effective on February 1, 2012, the monthly price will increase from $33 to $35.

AT&T blames increased programming costs and “the cost of doing business” for the rate increases.  AT&T is increasing broadband pricing despite enjoying further cost reductions from their Internet Overcharging scheme implemented in 2011.

Comcast

Comcast implements rate increases at different times of the year throughout its national service area.  But a preview of what is forthcoming can be seen in south Florida and Minnesota, where Comcast’s new rates for 2012 have increased an average of 5.8 percent.  That comes after a 2 percent rate hike last year.  It’s a bitter pill for many customers to swallow, because Comcast has also been moving popular cable channels like Turner Classic Movies into the more expensive Digital Preferred package.  The price of that full basic package will now run just short of $85 a month. Customers in Minneapolis are staring down these new rates:

• Basic 1: no change in most franchise areas.
• Digital Economy: increases from $29.95 a month to $34.95 a month, or 16.7 percent.
• Digital Starter: increases from $62.99 a month to $66.49 a month, or 5.6 percent.
• Digital Preferred: increases from $80.99 a month to $84.49 a month, or 4.3 percent.

Comcast blames increased programming costs and upgrade expenses associated with its now completed DOCSIS 3 project.  Comcast also has converted many of its service areas to all-digital service, which has opened up additional room to sell more expensive broadband packages, add additional HD channels, and make room for new product lines relating to home automation and security.

Cox Cable

Broadband Reports readers are sharing anecdotal evidence Cox has begun its own 2012 rate increase campaign.  In Florida, cable TV rates are up yet again:

Prices for Cox TV and Cox Advanced TV will be as follows:

• Cox TV Starter will change from $19.55 to $22.85/mo.
• Advanced TV will change from $5.50 to $4.20/mo.
• Advanced TV Standard Definition receivers will change from $5.55 to $6.99/mo.
• Advanced TV High Definition, High Definition/DVR & DVR receivers will change from $7.45 to $7.99/mo.

Advanced TV Paks will change:

• Any 1 Pak (excluding Variety Pak) from $4.00 to $4.25/mo.
• Any 2 Paks (excluding Variety Pak) from $8.05 to $8.50/mo.
• Any 3 Paks from $12.00 to $12.50/mo.
• Variety Pak will be $4.00/mo.

Premium pricing will change:

• 1 premium channel from $13.99 to $14.99/mo;
• 2 premium channels from $23.99 to $24.99/mo;
• 3 premium channels from $30.99 to $34.99/mo;
• 4 premium channels from $36.99 to $44.99/mo.
• (Pricing for the 3rd and 4th Premium channels will be grandfathered at the current price for existing customers.)

Cox’s Preferred Internet tier is increasing from $49.99 to $53.99 a month.  Basic phone service increases from $11.75 to $13.18, and popular calling features like Caller ID are also increasing (from $5.95 to $9.00 per month).

Rates vary in different franchise areas.

DirecTV

The satellite TV provider will raise rates on Feb. 9 by 4 percent on average. Its costs are going up by more than that, the company said on its website: “The programming costs we pay to owners of TV channels will increase by about 10 percent.”

DirecTV defends its rate increase, noting it will introduce new features in 2012 that include more than 170 HD channels and the most 3D viewing options of any television provider.  The full breakdown is provided from DirecTV:

Consumer Tips

1. Customers who subscribe to bundled services will see the fewest rate increases.  The more services you bundle, the lower the typical cost of each component within the bundle.  It rarely pays to have one company as a TV provider and another delivering your broadband because standalone service pricing is increasingly the most expensive option.
2. Ask for an extension of your introductory or promotional rate.  Request pricing from the competition and be prepared to summarize it with your current provider when arguing for a lower rate.  If your current provider thinks you are serious about jumping to another provider, they may lower your rates to keep your business.
3. Be prepared to switch.  Cable companies base their retention offers on several factors: what the competition offers, how long you have been a customer (2+ years guarantees a better retention deal) and how you pay your bill.  If you are a late payer, expect a much more difficult time negotiating a lower rate.  You may encounter a brick wall if you are labeled a “flipper” that jumps between providers’ introductory pricing offers.  But even these customers will be welcomed back, with lower rates, when they inevitably return.  They just won’t get their promotional offer renewed.
4. Some companies reserve their most aggressive pricing for customers who actually schedule a disconnect or turn in their equipment.  Cable companies have gotten wise to empty threats from negotiating customers.  If you schedule a complete service disconnection two weeks in advance, some companies will take you seriously and call you with the most aggressive “win back” offers available, especially if you turned in your cable equipment.
5. Dump extras overboard.  Premium channel pricing has skyrocketed recently after remaining relatively stable for nearly two decades.  HBO is now at or above $15 a month in many areas.  As customers try to economize, premium movie channels are usually the first to go, and many cable operators are starting to lose preferred wholesale volume pricing discounts.  They are passing along new, higher prices to the dwindling number of premium customers left.  Scrutinize your cable bill carefully for potential savings.  Look for mini-pay tiers of HD channels you never watch, consider downgrading your “digital phone” package to local-only calling if you rarely make long distance calls, and consider tossing “Turbo” broadband speed packages that only incrementally increase download speed.  Many customers originally signed up to obtain higher upload speeds, but as cable companies boost speeds for all of their customers, the extra boost may no longer be worth the money.

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)

Wall Street is encouraging Verizon Communications to sell off its landline telephone operations to clear a path for a potentially-profitable merger with British mobile phone company Vodafone Group Plc.

Analysts at Goldman Sachs Group are behind the research report, which suggests Verizon’s recent non-aggression treaty with Comcast and Time Warner Cable makes the sale of Verizon’s landline phone and FiOS fiber to the home network more likely. Verizon will earn a percentage of every cable TV/phone/broadband subscription sold, effectively making Verizon’s own wired network redundant. Potential buyers could include Frontier Communications, CenturyLink, or Windstream, which all have business plans that depend on landline networks fewer Americans are using.

Should Verizon clear away its legacy landline and FiOS networks, Goldman Sachs suggests, a merger with Vodafone would be a “clear fit” for the two companies.

“The remaining wireless and enterprise businesses would have faster growth and a clear fit with Vodafone’s assets and strategy, making it a more attractive merger partner,” Bloomberg News quotes from the report.

“Given that it no longer faces the threat of integrated cable competitors, Verizon could potentially spin off its remaining [landline] assets,” along with “large” pension and benefit liabilities, the Goldman analysts added.

Verizon would also eliminate its ongoing dispute with the two largest unions representing its landline workers — Communications Workers of America and the International Brotherhood of Electrical Workers.  Both unions are still trying to negotiate a new contract with Verizon after a brief, but contentious, summer strike. Verizon Wireless is almost entirely non-unionized.

Vodafone’s share price has been rising recently, perhaps anticipating a potential merger that would give Vodafone a stronger hand in the U.S. marketplace.

Verizon’s investment in its landline network, along with interest in expanding its well-regarded FiOS fiber to the home service, has remained stalled for the past few years.  Recently, the company indicated an interest in moving away from fiber optics to serve broadband customers, and rely on its wireless LTE 4G network instead.

Verizon’s new CEO Lowell McAdam comes from Verizon’s wireless division, and has not shared his predecessor’s enthusiasm for fiber upgrades.

Merger Partner?

While the prospect of an all-wireless future for Verizon may seem good for shareholders, consumers are likely to pay the price:

1. The Justice Department is reviewing the antitrust implications of the non-aggression treaty between Verizon and its cable competitors;
2. The sale of Verizon’s landline network to an independent provider could doom the company’s fiber optic network and limit rural Verizon customers to 1-3Mbps DSL;
3. Verizon Wireless’ prices reflect its market share and lack of strong competition.  The company’s LTE wireless network, although fast, has suffered from reliability problems and is heavily usage-limited.  It may prove unsuitable as a home broadband replacement for rural customers;
4. Reduced competition for telephone, video, and broadband will likely result in higher prices for existing cable subscribers, too.

Verizon is hardly the first phone company to ponder getting out of the phone business.  AT&T has been lobbying to rescind rural universal service requirements for years.  If successful, AT&T could abandon its rural landline network and provide customers with higher-priced cell phone service instead.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CWA Parody of Verizon Video.flv[/flv]

Verizon’s unionized workers are still fighting for a new contract, and released this parody video in response to a company-produced DVD mailed to union workers’ homes.  (3 minutes)

Argentine President Cristina Fernández de Kirchner

The Argentine government has a solution to stop the skyrocketing of cable television rates in the country: it regulates them.  Now the country’s Secretary of Commerce Guillermo Moreno has ordered Cablevision SA, one of the country’s largest media companies, to freeze basic cable rates at 116 Argentine pesos ($27US) for 2012.

The cable company won a 7 pesos rate hike last September, but there were indications further rate hikes were forthcoming.  Argentine President Cristina Kirchner has engaged in a long-running feud with several large Argentine conglomerates over what she feels is their abuse of market power.

Kirchner has specifically targeted super-sized Grupo Clarín, Cablevision’s parent company, for its relentless rate hikes.  The conglomerate now earns close to two-thirds of its revenue from selling cable TV and broadband Internet.

Kirchner considers corporate monopoly control of broadband to be especially dangerous for the Argentine economy, and her administration is seeking to force Grupo Clarín to divest itself of its broadband business with the passage of several media laws.

Cablevision defends its rate increases, noting Argentina’s inflation rate is currently as high as 25%.  But government officials have the power to suspend or rollback rate increases it determines are unfair or come as a result of Cablevision’s market power.

The $27 a month Cablevision subscribers currently pay for basic cable buys a comparably-sized cable package that North Americans pay more than double that amount to receive: