Time Warner Cable is offering mobile phone providers a solution to their clogged wireless networks — clog ours instead!

Business Week notes the cable company has been aggressively pitching its broadband network to cell phone companies in New York City, which can be used to transport cell phone calls and mobile data between cell towers and the providers’ operations centers.  The “backhaul” network cell phone companies rely on to move calls and data between the cell tower nearest you and your provider’s distribution network is often the source of the worst bottlenecks, especially when those networks are connected by standard copper telephone wiring, as many still are.

The more customers sharing a low capacity copper line, the slower your data speeds and greater the chance for dropped calls.  Although some providers have expanded their fiber capacity to reach busy cell towers, many more are still stuck with copper… until now.

Time Warner Cable’s offer to offload clogged cell phone networks onto the cable company’s broadband backbone has become extraordinarily profitable to the nation’s second largest cable operator.

In fact, it has become Time Warner Cable’s fastest-growing business after revenue tripled last year, Craig Collins, senior vice president of business services told Business Week.

We are talking $3.6 billion dollars in revenue in 2012 from wireless carriers alone, according to researcher GeoResults, Inc.

“Backhaul is a growth play that we are pursuing aggressively,” Collins said. “These mobile players want to get the bandwidth they need at a cost-effective price and our structure allows them to get that pretty seamlessly.”

U.S. smartphone use has grown almost 700 percent in four years, according to the U.S. Federal Communications Commission. Mobile-data volume is more than doubling annually as people use devices like the iPhone, BlackBerry and Google Inc.’s new Nexus One to send photos, watch videos and surf the Web. When networks jam, consumers face dropped calls and may find they can’t access Web pages or TV, analysts said.

The coming "exaflood" doesn't seem to worry Time Warner Cable, except when profits from consumers are at stake

Apparently the “exaflood” scare theory that suggests broadband networks are becoming hopelessly clogged does not apply to Time Warner Cable, because the company easily found plenty of free bandwidth in metropolitan New York City to profit from wireless phone traffic.

Not to be outdone, Comcast expects $1 billion from the wireless backhaul gravy train over time, according to its February 3rd conference call with investors.  Comcast is in a unique position to help ease congestion in San Francisco, where the cable operator provides service to some of the same customers who wander the city with Apple iPhones on AT&T’s overclogged Bay Area network.

Time Warner Cable CEO Glenn Britt doesn’t want to limit the potential revenue to just the wireless big boys — he wants to offer service to carriers large and small:

While Time Warner Cable declined to specify if AT&T, the lone U.S. carrier for the iPhone, is a customer, the New York- based cable company says it wants to sign carriers large and small. Chief Executive Officer Glenn Britt alluded to AT&T’s extra iPhone traffic in a December conference call.

“They want to get that into a cable as fast as they can,” Britt said, referring to overloads. His company began leasing backhaul in 2008 and posted $26 million in sales last year, less than 1 percent of the company’s total sales. Collins declined to give a forecast for 2010.

All this, of course, comes ironically to those Time Warner Cable customers who were subjected to Internet Overcharging experiments from Time Warner Cable just about one year ago.  Apparently, the exaflood only applies to consumers who face enormous broadband pricing increases and/or usage limits because of “overburdened” broadband networks.

Not so overburdened that the company can’t make room for billions in new earnings from cell phone companies, of course.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Moffett Says ATT May Need Cable to Ease Network Jams 3-8-10.flv[/flv]

[Video Fixed!] Craig Moffett discusses wireless smartphone data usage trends and Time Warner Cable’s involvement in transporting mobile phone and data across its cable broadband network (5 minutes)

Rep. Eric Massa (D-NY) is expected to resign his seat Monday

Rep. Eric Massa (D-New York), author of the Broadband Internet Fairness Act (HR 2902) — legislation that would ban Internet Overcharging, announced he will resign his office Monday.

In a fast-moving series of events, Massa first announced he would not seek re-election because of health reasons — the congressman faces a renewed battle with cancer, but allegations of ethical violations also surfaced earlier this week which have gotten national news coverage.

Massa is a first term congressman in New York’s 29th Congressional district, which has traditionally elected Republican candidates to office.  But as the national Republican party has trended further to the right, northeastern Republicans have become an endangered species in Congress.  Former Rep. Randy Kuhl only held onto the seat for two terms before being defeated by Massa in 2008.  Kuhl himself replaced retired congressman Amo Houghton, a long-serving moderate Republican whose voting record often split with the national Republican party on major issues.

Massa’s decision not to run for re-election surprised voters in his district, which runs from suburban Rochester to the Pennsylvania border along the southern tier.  Friday’s sudden announcement he’ll also resign his office effective Monday shocked voters and started a scramble for who might assume Massa’s seat upon his resignation.

The loss of Eric Massa to the Stop the Cap! cause is a concern for broadband consumers.  Massa stepped up to protect consumers from an Internet Overcharging experiment proposed last April by Time Warner Cable, which serves most of his district.  Massa immediately blasted the cable company’s plan to test usage-based billing on residential customers in the Rochester area, which is the only major city in New York State not served by Verizon and its expanding fiber to the home FiOS system.

Massa’s proposed legislation would have banned such schemes unless a company could demonstrate a clear financial need to adopt consumption billing and usage limits.

Thankfully, New York senator Chuck Schumer (D-NY) remains in office, and is the only senator to protest Time Warner Cable’s experiment, and helped end it, not just for residents of western New York, but for residents of Texas and North Carolina as well.

As to the swirling of allegations surrounding Massa, I have no interest in expanding on them here.  You can get a detailed review of the congressman’s views on these issues by listening to a 90-minute radio show aired today on a WKPQ-FM in Hornell, New York.  Today’s show will probably break news because Massa expands in great detail what’s behind the allegations and the reasons for his retirement.

Eric Massa’s regular Sunday show on WKPQ-FM Hornell, NY today discussed his decision to resign his office in great detail. (90 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

As for his replacement, a number of Democrats from both the southern tier and Monroe County/Rochester are considering entering the race.  Massa’s already-campaigning Republican opponent, former Corning Mayor Tom Reed remains in the race.  The Republican county supervisor for Monroe County, Maggie Brooks, is also considering a run.  But so is the former Congressman Randy Kuhl.  “Randy the Dandy” would be the worst possible option.  His undistinguished record and contempt for his constituents makes my skin crawl.  In his last term, Kuhl refused to hold open town hall meetings, instead shepherding constituents in for ‘five minutes with Randy’ where someone took notes and another escorted you out when your time was up.  Nobody should have bothered to take notes — his ongoing lack of concern about what voters in his district thought helped him lose his seat in the first place.  His lack-of-listening tour would fit perfectly with certain cable companies who don’t listen to their customers.  Hopefully, voters will not contemplate a return of Randy Kuhl.  Four years was more than enough.

We’ll be looking for other members of Congress to take up where Eric Massa left off.  I would like to thank Congressman Massa for his hard work on behalf of our cause, as well as helping make a difference on so many other matters important to the voters in his district.  I wish him good health and best wishes.

[flv]http://www.phillipdampier.com/video/Eric Massa Resigns Monday 3-6-10.flv[/flv]

Several television stations announced Rep. Massa’s decision to resign his office Friday in “breaking news” headlines.  This clip has three reports from WETM-TV Elmira, WHAM-TV Rochester, and WENY-TV Corning. (6 minutes)

[flv]http://www.phillipdampier.com/video/Eric Massa Reactions 3-6-10.flv[/flv]

Residents in the 29th congressional district react to Rep. Massa’s resignation announcement, and local politicians jockey for position to potentially run for Massa’s seat.  Three reports are included from WHAM-TV Rochester, WROC-TV Rochester, and WENY-TV Corning. (6 minutes)

'Don't worry about our new higher prices.'

AT&T is raising its rates for existing DSL customers.  Stop the Cap! reader Bill writes that his latest bill shows a $3 forthcoming rate hike on his “Elite” DSL service just three months after his one year promotional price expired.

“First, there is nothing ‘elite’ about AT&T DSL.  Their promised 6Mbps speed is really closer to 3Mbps, and worse when the weather is bad,” Bill writes. “Second, I’m going to be paying more than $45 for DSL service that my nearby neighbors pay for 10Mbps cable modem service that actually delivers 10Mbps.”

Bill doesn’t have that option unless he pays $8,000 to his local cable company to install a cable down the street to reach his home.

“I called AT&T and tried to downgrade my service,” Bill adds. “When you call and reach the cancellation department, they’ll offer you all sorts of incentives to stay.”

Bill joined many other AT&T customers who have called the company to complain about the price increase during difficult economic times, and many are getting substantial discounts.

“They gave me another year of service for $24.95, the same promotional price I had before, which saves me $20 a month,” Bill notes.

That’s more meaningful than AT&T’s explanations on customer bills.  Broadband Reports quotes from AT&T: “We’re adjusting our pricing for AT&T High Speed Internet service in an effort to better align our pricing structure across our entire service territory, and to better reflect the value of our broadband service. But don’t worry, even with this adjustment, our pricing is still competitive across the industry.”

Some of our readers are not satisfied with that explanation and have been calling customer service looking for discounts, which they’re finding.  Among the offers:

• Six months of service for $24.95 with a promise of an additional six months at that price if you call and ask at the end of the term;
• Six months of service at $22.95 with a similar six month extension when the first six months are up;
• 12 months of service at $22.95.
• 12 months of service at $19.95 (mostly found in Illinois).

Representatives may first offer to “lower your price” by switching you to a lower speed tier.  Refuse that offer and tell them you simply want a lower price.  Customers who have other competitive options (cable) will find AT&T most amenable to offering a lower price.  Those with no other options may find AT&T less willing to negotiate.  In those cases, some of our readers recommend calling back to speak to a different customer service representative.  If you do not have a standard residential phone line along with your DSL service, getting discounts becomes very difficult.

Trying to negotiate takes less than 30 minutes of your time and often brings you more than $200 in savings over the coming year.  That’s worth the effort.

Rogers Communications Monday began their latest Internet Overcharging scheme on Canadian broadband customers — they’ve doubled the maximum overlimit penalty from $25 to $50 for customers who exceed the cable company’s arbitrary broadband usage allowances.

It’s a fact of life for anyone living with a provider that wants to charge too much for broadband service.  Like the credit card industry, the tricks and traps keep on coming as providers seek to monetize everything they can to extract as much money from customers as possible.

For some providers like Bell, the trick is to gradually reduce your usage allowance, exposing more and more customers to overlimit fees (the company even sells an insurance plan to protect you from their audacious pricing).  For others, the fee trap comes from gradually increasing the maximum overlimit fee until there is no maximum.

Rogers has chosen the latter method, effectively passing through massive rate increases for Canadians that dare to use too much.

Originally, Rogers Extreme service was priced at $60 a month for 10/1 Mbps service with a 95 GB cap.  Customers who traditionally exceeded that paid $1.50 per gigabyte in overlimit fees.  With a $25 maximum penalty, many customers just accepted the fee as their ticket to unlimited broadband.  Now, Rogers has conceded a quarter to customers, lowering the per gigabyte penalty rate to $1.25.  But for customers who still regularly exceed their allowance, the charges really add up.  That $60 a month now balloons to $110 per month for exactly the same unlimited service customers used to enjoy for less.

That forces customers like the Globe & Mail’s Michael Snider to make some choices:

1. Reduce usage — a win for Rogers and broadband rationing for him;
2. Upgrade to a higher tier service plan to get a better allowance — a win for Rogers and a higher bill for Snider.  Extreme Plus has an allowance of 125 GB, just a 30 GB difference, for an additional $10 a month;
3. Grin and bear it — a win for Rogers and a future that guarantees him bigger bills indefinitely.

This is the type of move that may force customers who regularly approach or exceed their cap to seriously consider upgrading their service package.If that’s part of Rogers’ plan, it worked.

I just bumped up my service from Extreme to Extreme Plus (if you do the same, inquire about the promotion that offers $20 off Internet for the first six months if you lock in for a year — that’s upgrading only). So now, I’ll be getting 25-Mb download speeds (still a measly 1-Mb upload, though) and a cap of 125 GB a month and, once the promotion ends, will be paying $14 a month more ($10 for the service and $7 for the modem rather than $3).

Call me a sucker, but twice in the past year I have exceeded my 95 GB cap and paid an extra $25 on my bill — once after backing up several gigs on an online backup service and once after downloading a few movies on my Xbox.

But Snider also faces, by design, the one-two punch of Internet Overcharging schemes.  Not only do they fatten provider profits, they also discourage him from using his broadband service, fearing a higher bill.  Even better, they discourage cord-cutting — relying on your broadband service and dropping your cable-TV package.

I am discovering that I’m actually limiting my consumption of some totally legitimate services because I’ve no desire to pay extra on my Rogers bill at the end of the month.

Take for example Microsoft Xbox’s movie service. After waiting for what seemed eons for some kind of a legit movie download service, I finally have access to one that has a list of movies that I’d actually like to see, but it’s proving too expensive to really enjoy it regularly. Reason is, downloading an HD movie eats up more than 11 GB of my bandwidth — more than 10% of my monthly allotment (before I upgraded) for one freaking movie. That goes for games too. It seems as though distributors are leaning more and more to online delivery, but at 6 or 8 GB per game, again, that eats up a lot of bandwidth.

Being the gatekeeper for broadband distribution and also being a content distributor has its advantages.  If the competition starts getting too hot and heavy, locking down the distribution platform guarantees no competitor will ever get the best of you.

Whatever you do, don't turn off this modem, despite the fact you're paying for traffic it receives 24/7. Unplugging a cable modem could "damage it" according to Rogers.

Rogers claims its all about costs from increased broadband consumption, but one look at their pricing scheme proves that wrong.  Rogers reserves the biggest penalties of all for its lightest-use customers.  Those on Rogers Ultra-Lite tier suffer with barely-broadband speeds of 500/256 kbps with a usage limit of just 2 GB for a ridiculous $27.99 per month.  The penalty rate for customers who can hardly be described as “power users” is a whopping $5 per gigabyte.  They pay more because they impact the network more?  How does that work?

The Canadian Radio-television and Telecommunications Commission (CRTC), the agency responsible for oversight of telecommunications services in Canada is no help.  They’ve become a de facto telecom industry trade association, rubber-stamping approval of whatever providers want.  The result is expensive, usage-limited, speed-throttled broadband service across the country.

What can you do to control your monthly broadband bill Rogers wants to raise?  Their advice is basically to use less of the broadband service you paid good money to get.  Oh, and despite the fact whenever your cable modem is powered on you are bombarded with constant traffic which eats into your allowance, whatever you do, don’t leave it unplugged — it will “damage it.”  From Rogers Internet FAQ:

We STRONGLY recommend that you do not turn off your modem when you are away from home. Your cable modem has been designed to remain powered at all times. Regularly turning it off and on may result in damage to your cable modem.

…and damage to our profits.

Broadband providers love to tout their Internet services as “unlimited, always on access at blazing fast speeds.”  Increasingly, their service isn’t unlimited, it’s not always working, and those blazing fast speeds are doused in a shower of asterisks leading to fine print indicating “speeds are not guaranteed.”

Take Comcast, for example.

The Consumerist‘s reader Matt received a brochure from America’s largest cable operator filled with inaccuracies, falsehoods, and fine print.  In order of appearance, let’s fact check:

Source: The Consumerist

Fiber Fiction: “Comcast High Speed Internet is delivered to your computer through the same fiber-optic network that delivers all those great channels to your television.”

Fiber Fact: Comcast does not operate an all-fiber network.  Their distribution system uses a mix of fiber and standard copper coaxial cable.  The fiber network is only a backbone, which connects to the same coaxial cable companies like Comcast have used since the 1970s.  If you want a true fiber-optic network, you’ll need to sign up with Verizon FiOS or a municipally-run fiber provider.  No national cable operator runs one.  It’s part of their marketing rhetoric to try and capitalize on the benefits of fiber without actually spending the money to actually build a fiber system.

Speed Trap: “Download speeds up to 100 times faster than a 56K phone modem.”

Autobahn: This one has one of those asterisks attached — “actual speeds may vary.”  Comcast doesn’t guarantee speed, and relies on the familiar “up to” disclaimer that phone companies love to use with their DSL service.  If your neighborhood is clogged with users, the websites you visit run slowly, or Comcast has a problem somewhere, your speed will suffer.

Unlimited That Isn’t: “Unlimited usage for a flat, monthly fee.”

Unlimited Reality: Comcast has a usage limit of 250 GB per month.  Exceed it and you potentially will get a call from Comcast lecturing you about your usage.  Ignore them and you may be without your broadband service for a year.

Consumerist reader Matt was a victim of Comcast’s marketing doublespeak when he exceeded the limit and got a phone call from the company.  Instead of being browbeaten by Comcast customer service, he was ready and armed with the brochure the company sent him:

I was told I used more data than they allow (250GB). I do not argue that I used over 250GB, in fact I went quite a bit over. Though I did want to ask for proof that affected their network, I figured it wasn’t the nicest way to start the interaction. I informed them that I used this because it was sold as “Unlimited usage for a flat, monthly rate.” He then told me it said “access.”

I had the brochure right next to me and quoted, “Unlimited usage for a flat, monthly rate.” He told me their website says something different, and my local franchise overstepped its bounds, and their website overrules the “Important Information about our services, Charleston SC” sales brochure sent to me. If I went over again (It goes by calender month, not billing cycle) I would be disconnected for 1 year without giving me a call.

I asked if Comcast had a tool to help me monitor bandwidth. “Not in your market” he told me. “Download something from Google that will do it for you.”

As consumers continue to expand their broadband usage to take advantage of services like online video and file backup, services Comcast itself offers, more and more will run up against Comcast’s monthly usage limit.  Although your Comcast bill increases year after year, their usage limit has not.  It was 250 GB in 2008 and remains the same in 2010. Thanks to Stop the Cap! readers Dave and Michael who sent word our way.