(The Liberal Party is sponsoring an online town hall meeting this afternoon at 3:30PM EDT on the issue of expanding broadband in rural Canada.  Why not join in and demand that Michael Ignatieff commit to reforming the Canadian Radio-television and Telecommunications Commission, which has landed Canada in a real broadband mess filled with Net Neutrality violations and Internet Overcharging schemes like usage caps and consumption billing.  The CRTC has been so submissive to Canadian telecom, they might as well be their trade association.

Tell him rural broadband expansion doesn’t do much good if the existing providers, which got Canada into this mess, are still in charge of running it.  Real broadband reform requires a government committed to universal broadband that works for Canadians and doesn’t simply profit from them.  Demand Net Neutrality commitments from the Liberal Party and an end to overcharging schemes.  Universal broadband doesn’t mean much to Canada if Canadians can’t use it without fear of overlimit fees and enormous bills at the end of the month. — Phillip Dampier)

Ignatieff announces the Liberals' rural broadband plan at Contact North in Thunder Bay, Ont.

The Liberal Party of Canada has promised rural Canadians they will not be left behind the digital online revolution, unveiling a promise Tuesday to deliver universal broadband access to all Canadians within three years of taking office.

Michael Ignatieff, Liberal leader made the commitment as part of a series of planks the party introduced under its “Rural Canada Matters” platform to attract support from rural Canadians, who tend to vote Conservative.

“Too many rural communities can’t get access to essential services, because we don’t have the digital infrastructure to deliver them,” said Ignatieff. “That’s why I’m committing a future Liberal government to 100 percent high-speed Internet for every rural, remote and Northern community in our country.”

According to Ignatieff, using proceeds from a 2011 wireless spectrum auction, a Liberal government would invest to achieve an interim target of 100 percent high-speed Internet connectivity of at least 1.5 Mbps. A Liberal government would also seek to set a more ambitious goal for 2017, Canada’s 150th anniversary as a country.

The Liberals blasted the incumbent Conservatives for breaking their promise to deliver rural broadband to Canadians.

In 2006, Canada’s Telecommunications Review Panel recommended the federal government achieve 100% high-speed Internet connectivity by 2010. This goal was not achieved under the Conservative government.  According to the CRTC, in 2009 close to 800,000 Canadian households still did could not access high-speed Internet – or 20% of all rural Canadians. At the turn of the century, Canada ranked second in the world in Internet connectivity, but has now fallen to tenth place.

Ignatieff announced the plan in Thunder Bay, Ontario at an Internet access center run by Contact North.  He characterized the current state of broadband in Canada as threatening the country’s economic competitiveness and quality of life for rural residents.

“While railways and highways were the essential infrastructure of the 20th century, fiber optic lines, satellites and wireless towers, are the digital infrastructure needed to connect our communities and strengthen our economy in the 21st century,” said Liberal Rural Caucus Chair Mark Eyking, “In all regions of Canada, families and businesses depend on access to the Internet and mobile phone coverage.”

New Democratic Party (NDP) MP Bruce Hyer (Thunder Bay-Superior North) praised the Liberal plan.

The Liberal Party is trying to capture an increased share of traditional Conservative Party supporters with a rural-focused agenda

“Obviously, country-wide broadband is a good idea,” Hyer told The Chronicle-Journal newspaper in Thunder Bay. “And there should be virtually no community of any size in Canada, and nowhere along the Trans-Canada, for sure, that we don‘t have high-quality mobile phone access and service. The United States has those things, and we should have them, too.”

But NDP MP John Rafferty (Thunder Bay-Rainy River) told the newspaper he’s heard it all before.

“Liberals have been talking about rural broadband access for a decade now,” he said. “The interesting thing is that he says rural Canada matters. But clearly it hasn’t mattered to Liberals for a long time, or else we would’ve had broadband.  They had a chance to do this. What they’re doing is regurgitating old promises.”

Rafferty said the Liberals first brought it up in 2001, and said then it would cost $4 billion.

“I’m not sure where he comes up with ($500 million).”

Another concern for the Liberal Party plan is the fact it relies entirely on private providers to deliver the service, something they have refused to provide many rural Canadians thus far.  In effect, the government would transfer $500 million dollars earned from large telecommunications companies buying additional spectrum and then hand it all back to those same companies to construct slow speed broadband services they can then profit from.

While many Canadian officials blame Canada’s large rural expanse for the digital divide, others blame Canada’s broadband providers who have engaged in usage-limiting schemes, increased prices, and throttled the speeds of certain broadband services.

More evidence arrived this week that Internet Overcharging schemes are becoming a thing of the past for many global broadband users.

Sky has announced it is getting rid of its usage limits and speed throttles for most of its broadband customers.  It’s also giving away a free speed upgrade to up to 20Mbps for its DSL-provisioned broadband service.

“It comes with no usage caps, fair use policies or traffic management, making it ideal for those who want the freedom to download emails, photos, TV programs, movies and games. It’s also ideal for those who want to access live and on-demand TV through Sky Player,” Sky said.

That may be part of the plan.  Sky, a satellite television company serving the United Kingdom, is preparing to launch new video on demand features that will work in conjunction with its broadband service.  Delivering faster access, without limits, could be part of the equation of making their video on demand service a success.

For occasional broadband users who don’t exceed 2 gigabytes of use per month, Sky is giving free usage-limited broadband service to customers who also subscribe to Sky’s telephone service.  For those that don’t, the 2 gigabyte-capped service costs £5 ($7.59US) per month.

For those looking for unlimited service, Sky Unlimited is available for £7.50/$11.38 per month for Sky customers with Sky Talk or £12.50/$18.97 per month for those without.  In the United Kingdom, line charges for the phone line are broken out from broadband pricing and have to be considered towards the total monthly cost for broadband service.  Line rental from BT costs £12.50/$18.97 a month for customers who pay by direct debit and receive paper billing (£11.25/$17.08 with paperless billing).

Sky requires a 12 month service commitment.  These prices and plans take effect June 1st.  New customers can get a promotion offering six months of free broadband service, including line rental, when signing a 12-month service commitment.

New customers can get six months of broadband service for free when signing up

Is there a downside to this offer?  Not as far as usage limits are concerned.  However, the service is dependent on BT-provisioned DSL phone lines, which can create great variability in the maximum actual speeds customers receive.  The further away from a BT exchange office, the slower the maximum speed a customer will achieve.

But for existing Sky satellite customers looking for a discount on bundled service and an end to worries about monthly usage or speed throttles, Sky Broadband is a welcome relief for those tired of Internet Overcharging schemes.

It’s also one fewer example North American providers can point to as an excuse to attempt Internet Overcharging schemes of their own.

Sometimes you have to wonder who telecom front groups hire to push their agenda.  In the Stop the Cap! e-mail box came a news tip last week that a new study proved beyond doubt that passing Net Neutrality would put up to 1.5 million jobs at risk by the year 2020.  Just as bad, the study warns, broadband investment would plummet as a result, causing an investment retreat worth up to $5 billion dollars.  They thought I should know.

All of this ruinous news results from a government that wants to make sure your Internet Service Provider doesn’t block, impede, or censor the traffic of independent websites that don’t  pay a protection fee to keep their content online and accessible.  What’s that I smell?  The easily recognized scent of plastic grass — more astroturfing from a broadband industry intent on keeping broadband regulation as far away from them as possible.

The Employment and Economic Impacts of Network Neutrality Regulation: An Empirical Analysis, by Dr. Coleman Bazelon — working on behalf of something called “The Brattle Group, Inc.,” is a real page-turner.  I tore right through it myself.

Just reading the background of Dr. Bazelon rang all sorts of warning bells:

• Dr. Bazelon consulted and testified on behalf of clients in numerous telecommunications matters;
• Dr. Bazelon frequently advises regulatory and legislative bodies;
• Dr. Bazelon was a vice president with Analysis Group, an economic and strategy consulting firm.

More ordinary folks use a different, less fancy term to cover all this: lobbyist tool.

The key finding for the report:

New network neutrality regulations proposed by the FCC could slow the growth of the broadband sector, potentially affecting as many as 1.5 million jobs, both union and non-union, by the end of the decade.

So how does Bazelon come to this conclusion?

The academic literature on possible effects of network neutrality regulation does not provide a consensus view on whether such regulations should be expected to help or harm the broadband sector, although several economists have concluded that such regulation would be harmful.

I tore right through Bazelon's report.

Many of those economists were paid by the broadband industry to conclude that in their own “reports.”  Many of Bazelon’s footnotes reference himself, telecommunications company executives, or other connected parties who have a financial interest in opposing Net Neutrality or broadband regulations.

At the heart of Bazelon’s theory is that content-related jobs, those involving the development of the websites you like to visit to read, listen, watch, or download from, cost more money to create than broadband “dumb pipe” jobs.  In other words, if you’re developing iTunes content or a network to stream Netflix movies, your job cost more (and probably pays more) than a line splicer at AT&T who is rolling out 3 Mbps DSL service in Rolla, Missouri.

So, if we penalize content developers with Internet Overcharging schemes or speed throttles that discourage your use of iTunes or Netflix, AT&T can use the savings from dramatically lower demand and hire more people to wire up communities for basic DSL service.  That’s okay, because it creates new jobs: “to the extent that the absence of network neutrality regulations leads to a transfer of ‘wealth’ (or sector revenues) from the Internet content sector to the broadband sector, such a transfer would be expected to have a positive impact on employment.”

That’s a great deal for you, right?

Net Neutrality doesn’t impede bigger profits for broadband providers – it just insists that they don’t earn those profits parasitically on the back of someone else’s content.  If your cable or phone company owned Netflix, there wouldn’t be an issue.  They would provide a service and earn from it.  But they don’t, and demand a piece of the pie anyway.

By the way, Bazelon’s myopic report completely misses another fundamental fact.  In today’s non-Net Neutral world, large phone companies like Verizon and AT&T have slashed tens of thousands of jobs just fine without pesky Net Neutrality or other broadband regulations getting in the way.  It’s like telling a New Orleans resident standing in four feet of water during Hurricane Katrina that if we don’t do something about the levees next year, the city could be flooded.

The author also states the obvious:

Broadband open access and net neutrality regulations are both regulatory interventions aimed at restricting a broadband network owner’s ability to exercise market power. The first acts at a structural level to eliminate any potential market power in the provision of the good; the second acts at a behavioral level restricting the broadband provider’s ability to benefit from any such market power.

Sounds like a plan to me and millions of other consumers who see the results of the industry’s market power workout routine… in the form of ever-increasing monthly bills.

Bazelon's vision for the Internet's future

Bazelon is even willing to predict some winners and losers with the FCC’s proposed Net Neutrality regulations:

Under the strict network neutrality regime being considered by the FCC, different Internet content might flourish. In particular, some Internet content is less commercial and generates very little revenue. Content that does not generate much economic value may be advantaged by a network neutrality regime. It is worth noting, however, that such content, by not primarily being engaged in the economy, does not significantly impact employment. Larger commercial sites have the potential of doing better or worse under network neutrality regulations. On the one hand, potentially lower costs of access should benefit them; on the other hand, potentially less developed broadband infrastructure could harm their businesses. With some content winning and some content losing, there is no reason to believe that the total amount of content will be more or less (or more or less valued by Internet users) under one regime or the other. Some business models will do well under one regime, others under the other regime.

In other words, in Bazelon’s world, the formerly level playing field where content is king and website value is decided on its merits is replaced with a corporate-controlled broadband network where only the big, well-financed players will get to play.  If you’re CNN or Amazon.com, you’ll have no problem meeting the protection racket prices providers could demand to guarantee your content isn’t blocked or slowed to a crawl.  But if you’re a poor blogger, a new business start-up, or use the web to argue for and against various causes, get to the back of the line (if you are allowed in the line in the first place.)

The Internet gets reincarnated as Prodigy, for those old enough to remember using that online service.

Ultimately, Bazelon believes only big broadband providers can create economic success stories in our online future.  Making them play by certain rules will kill that success, he argues.

Only one problem – when Bazelon gazes up into the sky, he sees AT&T logos everywhere he looks.  That’s because Mobile Future, the group that paid for the study, is yet another creature of AT&T.  To hide the fact this is yet another AT&T front group, several of AT&T’s usual friends also turn up on the membership roster.  Just a few days after calling out LULAC – the League of United Latin American Citizens for selling out the Latino community to AT&T’s agenda, here they are again — joined at AT&T’s hip as a member of Mobile Future.

A selection of other Mobile Future (brought to you by AT&T) members

Asian Business Association – No national website, which already makes this suspicious, but the San Diego chapter admits AT&T is a corporate sponsor.

Asian Women in Business – AT&T underwrote their website.

Bump.com – The company is self-described on Mobile Future’s website as “the world’s largest purpose-formed safety, communication and marketing network. BUMP uses safe and convenient voice recognition and ALPR (automatic license plate recognition) to provide drivers worldwide with a communication platform that promotes safety on the roads and builds a unique global network.”  They should win an award for puffery.  In fact, this “world’s largest” enterprise doesn’t even have a website.  It claims it was founded in 2009, but its Facebook page just showed up April 15th of this year with a handful of photos showing… license plates.  Why license plates?  Because the group’s real aim is to set up a registry of those willing to receive text messages sent by typing in someone’s license plate and quietly linking it to your cell phone.

The Century Council – Public interest group padding.  Ask yourself what a group fighting underage teen drinking and driving built from and run by distilleries has to do with mobile broadband, Net Neutrality, spectrum demand, and wireless phone taxes — the primary issues Mobile Future seeks to address.

Climate Cartoons – The group’s CEO is a Washington, DC lobbyist specializing in fighting telecommunications issues.  Among Arnold Consulting Group’s “accomplishments:” building a “telecommunications coalition that successfully opposed federal and state ‘Net neutrality’ legislation” and a “cable television coalition that successfully opposed federal, state and local efforts to enact open access broadband regulations.”  Need I say more?

Hispanic Technology and Telecommunications Partnership – Another LULAC — follows AT&T policy initiatives around like a friendly puppy.  HTTP was busted by Ars Technica when asked whether AT&T had any hand in helping the group draft its opposition to Net Neutrality.  HTTP’s Sylvia Aguilera insisted she initiated the drive to oppose Net Neutrality, but was silent on whether AT&T helped draft the letter opposing it.

That’s only halfway down their so-called “coalition” list.  You get the point.  The only name that truly matters among all of Mobile Future’s members is AT&T because they are the ones spreading the money around to pay for it.  At the same time, if AT&T is writing contribution checks to your public interest group, or hiring your consulting/lobbying firm to represent your agenda, those are two compelling reasons for both to hurry on over to sign up for the cause in this, and other astroturf front groups.

On behalf of Climate Cartoons, which purports to “lure people into earth friendly behavior,” please be sure to give all due respect to this latest industry-backed study from Dr. Bazelon by tossing it into the nearest recycling bin.

Last year I participated in an online focus group about wireless broadband pricing.  The subject was consumption billing vs. usage limits — do consumers value unlimited broadband plans with overlimit fees more than strict usage caps that cause speeds to plummet for customers who reach them.  Also under consideration were various usage allowances sold at different price points.  Focus group members could rate the plans’ acceptability from a scale of “extremely interested” to “would not consider this plan.”  It took me mere minutes to work my way through dozens of combinations, rating them all unacceptable.  Participants were next directed into an online forum to discuss the different plans amongst ourselves, with a moderator focusing and encouraging discussions.

Inevitably, I was asked why I rated every plan on offer as not worthy of my consideration.  My short answer was that while I understand wireless was not presently a limitless resource, the plans suggested all included overlimit fees or plan allowances that would-be customers had to choose, many with no insight into what their monthly usage could or would be.  Not on offer was a true consumption plan that charged wireless customers only for what they used during a month.  If they didn’t use it at all, no bill would result.  My bottom line — customers should not have to take a crash course in data consumption to predict their usage or face steep penalties when they guessed wrong.

T-Mobile has found a third way, although Cricket’s wireless broadband service beat them to it well over a year ago.

The company’s new 5GB wireless broadband plan offers a traditional usage cap every mobile broadband customer is familiar with, but imposes no overlimit fees on customers that exceed it.  Instead, they reserve the right to dramatically reduce your speed until the next billing cycle begins.  T-Mobile representatives tell Stop the Cap! the company won’t automatically impose the speed throttle unless customers have a history of regularly exceeding their usage allowance (or dramatically exceed it.)  T-Mobile also may forgive a customer for an occasional breach, dropping the speed throttle for those who contact customer service and ask.

This effectively matches Cricket’s pricing and usage plan, which may cause that carrier to consider increasing usage allowances or reducing the price to compete.

T-Mobile's data plans for mobile broadband and smartphones

Broadband Reports notes that the 200 megabyte plan still requires overlimit fees, but they’ve been cut in half from 20 cents per megabyte to 10 cents.

Larger carriers like AT&T and Verizon still impose overlimit fees on their usage-capped wireless broadband accounts.  Cricket sells a $50 10 gigabyte usage allowance plan through Wal-Mart as well.

Plans by Frontier Communications to clamp down on “excessive usage” of their DSL service and overcharge customers who exceed 100GB of usage per month brought a strong negative reaction from a consumer group, who called Frontier’s limits “divorced from the underlying economics.”

Sources also tell Stop the Cap! the company is actively working on changing language in their Acceptable Use Policy that, as of this morning, is still misleading customers in Minnesota about their service.

A Frontier spokesperson also told an Oregon newspaper Frontier’s acquired FiOS service areas are not guaranteed cap-free service — the company may implement some restrictions there as well.

But first, Frontier Communications’ Acceptable Use Policy no longer matches reality for customers in Mound, Minnesota who are getting notified that their service is at risk of being shut off if they don’t agree to new, dramatically-higher priced service plans.  But such e-mails run contrary to several sections in the company’s own published policies:

Frontier’s Residential Acceptable Use Policy (Last Update: December 23, 2008) (PDF Archived 4/15)

The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Frontier’s Supplementary “5GB” Addendum to their Acceptable Use Policy (PDF Archived 4/15)

Frontier has not implemented tiered usage plans and will continue to evaluate if and when they would be necessary. If and when Frontier implements a tiered usage plan pricing and usage information will be communicated to all High-Speed customers.

Does Frontier plan to limit my use of the Internet?
Frontier is providing (NOT LIMITING) all customers with a minimum of 5GB of usage on a monthly basis. The Company has made no decision at this time to charge for additional usage but wants to start to educate customers about their usage.

If I hit 5GB will my service be interrupted?
No. Your service will not be interrupted at 5Gb. You will continue to use our High Speed Internet service without disruption.

How will I know how many Gigabytes I am using?
Sometime in the future, Frontier will provide to all customers visibility as to what your usage is on a daily, weekly and monthly basis. We will also provide a the ability to estimate bandwidth usage for different types of activities – like streaming video downloads or file sharing. These tools will give our customers the ability to make informed decisions about broadband usage consumption.

Tell that to the customers in Mound who have 14 or fewer days and counting to either pay extortionist broadband pricing, curtail their usage, or go elsewhere for service (if they can).

It’s no surprise some customers in Mound are outraged when receiving the company’s e-mailed notification about paying higher prices for usage because it runs completely contrary to the published policies of Frontier’s broadband service.

That’s just one more mistake in a series of mistakes Frontier has made in marketing its broadband service, especially in areas where consumers can take their business elsewhere and not have to worry about exceeding Frontier’s minuscule usage allowance.

Wendy Davis at MediaPost quotes a statement released by Free Press research director S. Derek Turner: “While there may be a place for discussing reasonable usage-based billing, the scheme Frontier is testing is completely divorced from the underlying economics. Even worse than their price-gouging is Frontier’s assertion that a mere 5 gigabytes per month is a ‘reasonable’ amount of usage when just last month the National Broadband Plan reported that average Internet users with a fixed connection consume 9 gigabytes of data per month.”

Davis also managed to get a Frontier spokesperson on the record about the debacle, telling MediaPost, “the company is only trying to prevent some exceptionally heavy bandwidth users from degrading service for others on the network. She also says that people who received the letters were given an option of decreasing their bandwidth consumption or switching to a different, higher-priced plan.”

Yet the concept of DSL customers degrading the broadband experience of other customers on the network is itself controversial, as DSL providers have always emphasized they do not suffer from slowdowns like shared networks used by cable broadband providers.  While heavy consumption can theoretically congest “middle mile” networks that serve regional areas or connect telephone company switching offices, those congestion issues are not difficult to address when companies use fiber connections to connect them, as Frontier frequently does.  Indeed, Frontier is far more likely to suffer congestion issues when millions of former Verizon customers are piled on Frontier’s network.

Nowhere in Frontier’s e-mail does it tell customers they can reduce usage to retain service.  It only says “if you do not wish to switch to this new rate plan, you can have your service disconnected.”  Mound residents are faced with the prospect of immediately reducing usage from 100GB to just 5GB to stay within Frontier’s terms and conditions.  Under those conditions, they could do better with dial-up.

Meanwhile, those soon-to-be-discarded Verizon customers facing a transition to Frontier Communications may soon find themselves potentially impacted by some sort of usage limit as well, which could also apply to the areas served by FiOS.

Mike Rogoway at The Oregonian talked with Frontier spokesman Steven Crosby about Frontier’s plans:

I talked this afternoon with Frontier spokesman Steven Crosby, who said there won’t be tight bandwidth restrictions after Frontier acquires FiOS — but he indicated that there may be some restrictions.

Currently, Frontier’s user agreement sets a nominal 5 gigabyte cap on monthly bandwidth usage.

“You know, I know and everyone knows that’s a very low number,” Crosby said. “We don’t hold people to that.”

The letters that went out in Minnesota went to a small group of very heavy bandwidth users in one community, Crosby told me. It’s not meant to reflect a broader policy.

As Frontier prepares to take over Verizon’s operations in Oregon and other states — Crosby says the deal is on track and likely to close in late June or early July — Frontier is reviewing its Internet use policies.

I pointed out Comcast’s bandwidth cap, and told Crosby that it seems likely his company will do something similar. He left that possibility open, but said any Internet limits are still under discussion.

“I don’t know what that limit will be,” he said. “The one thing I do know is we don’t want to impact our customers.”

St0p the Cap! responds:

• This is the first time Frontier has hinted that usage limits could eventually apply to the FiOS fiber-to-the-home service it is acquiring from Verizon, a network constructed to manage 21st century broadband traffic Frontier now also seems willing to limit;
• Frontier does hold people to the 5GB usage cap when they are in violation of it, using it as an excuse to expose customers to far-higher-priced service plans or service disconnection.  If Frontier isn’t serious about it, why retain the language in customer agreements?
• If Frontier’s Mound e-mail notifications do not reflect a broader policy, than the only customers who will see a change in the Acceptable Use Policy will be those in the Mound, Minnesota area.  If customers elsewhere see a change, it -does- reflect a broader policy after all.
• As part of Frontier’s “review of Internet use policies,” the company should not defray expenses surrounding the Frontier-Verizon deal by dumping them on broadband customers with outrageously punitive pricing plans.
• As for not wanting to impact customers, our response is “too late.”  Frontier’s original introduction of the 5GB usage allowance in the summer of 2008 impacted customers far and wide, and for its largest service area — Rochester, NY, gave Time Warner Cable happy hunting grounds to experiment with a usage cap of their own.

Wendy Davis at MediaPost offers some food for thought:

Frontier’s letters could well trigger regulatory or judicial scrutiny, especially given the seeming disconnect between the company’s acceptable use policy and its recent actions.

Of course, the underlying problem is the lack of competition. If consumers had more options for broadband providers, a company that threatened to disconnect its customers, or charge $99 or $250 a month for broadband service, might quickly find itself dealing with more pressing problems than public criticism.