At a time when cable operators are more reluctant than ever to overbuild into another operator’s territory, something very strange is going on in central North Carolina.

Time Warner Cable is moving into the neighborhood — one already receiving service from a community-owned cable operator.  That would be like Time Warner moving into one of Comcast’s service areas.  For some reason, those large cable companies completely avoid competing head-to-head, but where community-owned provider MI-Connection has managed to sign up around 15,000 customers for service, Time Warner Cable has also arrived.

As a result, customers north of Charlotte, in communities around Davidson and Mooresville, are getting some amazing prices for cable television, phone, and broadband.  Time Warner will even deliver an offer right to your front door.

Susan Wagner in Mooresville got her deal when she threatened to cancel Time Warner Cable and return to MI-Connection.

“(Time Warner) gave everyone a really good offer when they first came in and then drove up the price after a while,” Wagner told the Charlotte Observer.

When Wagner called to cancel, Time Warner sent an employee to her door offering to slash her cable bill by $50 a month, enough to keep her business.

Other residents in nearby Cornelius are also getting prices substantially lower than residents in cities like Charlotte, where many residents have one choice for cable: Time Warner.  Sam, a Stop the Cap! reader in the Morrison Plantation neighborhood, noted they skipped the last few rate increases from the cable company.

“You just call and tell them the rate is too high and as soon as they find out you have MI-Connection as an alternative, they lower the price,” he said. “My niece in Charlotte can’t get the same deal even when we gave her the details — it’s only good in areas where MI-Connection operates.”

That leaves Charlotte residents paying $35-50 more a month than savvy customers further north can have for the asking.

“It sounds like predatory pricing to me when the company offers a special low price that people like my niece are probably subsidizing on their higher bill,” Sam suspects.

The Observer reports Time Warner is also laying cable in other neighborhoods, such as Heritage Green, where the cable company is soliciting business from MI-Connection subscribers door-to-door.

MI-Connection’s CEO, David Auger, formerly from Time Warner Cable himself, claims he’s unconcerned about Time Warner’s aggressive overbuild of his service area.

But the state’s largest commercial cable company has been signing up some of MI-Connection’s current customer base and successfully holding its existing customers in place with significant discounts on service.  Since last July, MI-Connection signed up 667 new customers, but also lost 577 others, most likely to Time Warner Cable.

MI-Connection was launched from the ashes of a bankrupt Adelphia Cable system acquired by the communities of Mooresville and Davidson.  After investing in a needed system upgrade, the community owned provider relaunched service nearly identical technically to other cable systems.  Unlike Wilson and Salisbury, where new fiber-to-the-home systems were built, MI-Connection offers a more traditional cable package.

That makes competition with Time Warner Cable more difficult, but the community provider is trying.  Time Warner Cable’s regular pricing in the area runs $68.49 a month for 85 basic channels.  MI-Connection sells 86 channels for $61.99.  But when customers call Time Warner to complain about their higher prices, the cable operator dramatically lowers them to keep the customer’s business.

“The regular price only matters until you call and complain about it,” says Sam.

There have been complaints, but many of them are less about the cable bill and more about politics.  MI-Connection has not come cheap either town, which had to cover some of the costs of a needed system upgrade and service installation, estimated to run about $1,000 for every new customer signed.

Last fall, mayoral challenger Vince Winegardner made local government involvement in broadband a political issue, saying the purchase of the cable system was a mistake.  He lost his bid, but the system’s money needs remain a frequent topic of discussion in all of the communities involved in MI-Connection, and earlier this year the company company asked for $1.1 million from Davidson and Mooresville to ride out the rest of the fiscal year.

Time Warner’s recent interest in invading a fellow cable operator’s service area and slashing prices for those customers has raised the question whether their overbuild is about competition or predatory pricing to drive MI-Connection out of business.

Wagner doesn’t seem to mind either way, telling the Observer it is a “win-win” for her, scoring a lower cable bill with Time Warner.

But Sam isn’t so sure the savings will last.

“It seems pretty clear to me that Time Warner isn’t hurrying to compete with Comcast or Charter — just MI-Connection and that makes me suspicious,” Sam says. “After spending all that money to ban community broadband in the state, they now seem to be trying to drive out of business the handful of companies that were exempted.”

“My niece is probably paying for this right now on her cable bill too, and once MI-Connection is out of the way, those prices will shoot right back up,” Sam concludes.

Schuyler County

The fastest thing in Schuyler County, N.Y., isn’t broadband — it’s the Watkins Glen International speedway.

County officials hope to change that, voting unanimously this month to approve an agreement with the Southern Tier Network to bring a regional fiber optic system into the county.

The not-for-profit local development corporation established to build and manage the regional fiber network doesn’t sit well with some county residents, however, including one retired Verizon employee who dismissed the project.

Odessa resident Karen Radenberg called fiber optics technology “old school” and said no private company will connect to the fiber network to expand broadband service.

Radenberg urged the county to consider that communications companies have now moved on to using 4G wireless technology instead of fiber.

“That’s ridiculous,” countered Legislature Chairman Dennis Fagan (R-Tyrone).

Fagan

Fagan pointed to nearby Ontario County’s fiber middle-mile and institutional network which has signed companies, including Verizon, as customers.  Verizon reportedly uses the Ontario County network to deliver backhaul connectivity to its cell tower network in the area.  Ontario County is served by several different landline companies including Frontier Communications, Verizon, and Windstream.  Time Warner Cable is the dominant cable provider, but large sections of the county are deemed too rural for cable television service.

Fagan said the new fiber network will improve the chances private companies will expand broadband across the county, but also help deliver an important upgrade to the region’s emergency responder communications system.  The extremely hilly terrain across much of the southern tier creates problems because of signal gaps.  The new fiber network will allow the county to build radio repeaters into areas where the existing network of microwave communications towers cannot reach.

Schuyler County currently has no plans to sell Internet connectivity to the public, but hopes existing private cable and phone companies — including Time Warner Cable and Verizon Communications — will consider utilizing the network to expand service.  Neither company has shown much interest expanding service to new areas recently, most likely because expansion costs will not be recouped fast enough.

If the county network reduces the cost to expand service, more homes and businesses may now fall within a “Return on Investment” formula that could mean the difference between broadband and dial-up.

Downtown Leverett (Courtesy: Town of Leverett)

Life in Leverett, Mass. could get a lot faster as the community considers entering the 21st century by bringing high speed gigabit broadband to town.

For years, residents have had three relatively slow choices for Internet access: dial-up, wireless or satellite-delivered service.  Verizon and cable companies like Comcast and Time Warner Cable, which have systems in western Massachusetts, have largely ignored Leverett’s need for speed.

Now the town is considering building its own fiber-to-the-home network to reach every home in Leverett starting in 2014.  The proposed $3.6 million network will also offer residents cable television and phone service — helpful upgrades in the western half of Massachusetts where Verizon has allowed their landline network to degrade to conditions declared intolerable by the state Department of Telecommunications.  Last year, the state agency ordered Verizon to assess and repair its landline network in almost 100 communities in the western half of the state.

Town officials will introduce their plans for the new municipal broadband network at a public meeting April 28.  The community would borrow the money to construct the network, paying it off over 20 years and outsourcing its construction and maintenance to outside companies.

The town originally planned a fiber-to-the-neighborhood network similar to AT&T U-verse, but quickly decided the benefits of a true fiber-to-the-home network were worth the extra investment.

Unlike some other community-owned networks, Leverett will raise taxes on local residents to cover the cost of the service, but Selectman Peter d’Errico says it will save most residents money if they currently pay a satellite provider for broadband service. Research shows the largest majority of Leverett residents get broadband from satellite providers.

“It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will pay less,” d’Errico told the Daily Hampshire Gazette.

d’Errico added the local community is done waiting for private companies to deliver modern telecommunications services in Leverett.  Those companies have repeatedly told town officials there isn’t enough profit or return on investment to justify expanding broadband in rural communities.

Leverett hopes to serve as a template to more than 40 other western Massachusetts communities who belong to WiredWest, a consortium of similarly-situated towns working together to build a regional broadband network.  Leverett’s network would leverage the Massachusetts Broadband Institute’s 1,300 “middle mile” fiber backbone network that is working its way through 123 western and central Massachusetts towns.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WGGB Springfield Internet Connection in Leverett 4-11-12.mp4[/flv]

WGGB in Springfield previews Leverett’s efforts for better broadband. Big commercial providers ignore the community so now they want to provide service themselves.  (2 minutes)

Your Internet Service Provider keeps telling you there is no need for faster broadband speeds, but no matter how many times they say it, you still don’t believe them.

Neither do the folks at LUS Fiber — Lafayette, Louisiana’s publicly-owned fiber to the home broadband network.

In a state dominated by AT&T and cable companies like Cox, Louisiana has never experienced super-fast broadband.  But now they will.  LUS Fiber today announced 1Gbps broadband is now available in the Hub City.

Businesses will now have access to affordable broadband at speeds 20,000 times faster than dial-up.  Residential customers used to getting 1-12Mbps from phone company DSL or up to 50Mbps from Cox can put the slow lane behind them forever.  LUS Fiber can deliver upload and download speeds as fast as 1,000Mbps.

“Gigabit service from LUS Fiber is one of the most robust Internet offerings on the market today,” says Terry Huval, Director of Lafayette Utilities System and LUS Fiber. “We built this community network with a promise to the people of Lafayette that we will work hard to provide them with new opportunities through this unique, state-of-the-art fiber technology, and that’s just what we’ve done.”

That puts Lafayette on the map with Chattanooga, Tenn., as the two fastest operating fiber broadband networks in the country selling to both residential and business customers.  Both are publicly-owned networks private companies like AT&T have lobbied hard to banish.

In fact, Louisiana’s record on broadband outside of Lafayette is decidedly poor.

An $80 million federal grant to fund much-needed improvements to the state’s Internet infrastructure was returned in what one public official called Gov. Bobby Jindal’s special favor to Big Telecom companies like AT&T.

Public Service Commissioner Foster Campbell publicly berated the Republican governor for intentionally interfering with the project until time ran out and the government withdrew its funding.

The cancellation of the project has proved embarrassing because it was the first time a state lost federal broadband grant money.

The state’s Division of Administration eventually scrapped plans for the public broadband network and replaced it with a proposal to use grant dollars to purchase long term institutional broadband contracts from private providers.  AT&T is the dominant local phone company in Louisiana — the same company that has steadfastly refused to provide DSL service across rural Louisiana. The new proposal would have not delivered any broadband access to individual Louisiana homes, only to institutions like schools, libraries, and local government agencies.

AT&T’s ongoing efforts to win deregulation and an end to universal landline service have now reached Colorado, where state lawmakers are reacting favorably to an AT&T-sponsored bill that would strip away rural landline subsidies and deregulate basic phone rates, much to the consternation of incumbent provider CenturyLink.

The long-winded bill,  SB 157 – Concerning the Regulation of Telecommunications Service and, in Connection Therewith, Enacting the “Telecommunications Modernization Act of 2012,” is just the latest in a series of deregulation measures co-authored by AT&T that would let phone companies off the hook for guaranteeing affordable, universal landline service to every American.  Instead, AT&T is happy to sell rural consumers pricey mobile phone service.

Ironically, AT&T’s bill would deliver the worst blows to fellow landline provider CenturyLink, the largest phone company in the state. Consumers pay 2.9 percent of their phone bill toward a rural landline subsidy fund, or 87 cents for a $30 bill. It is no surprise CenturyLink is adamantly opposed to the measure, declaring the loss of rural phone service subsidies a guarantee of future rate hikes and discriminatory pricing, if not the end of basic telephone service in rural Colorado.  The company also receives more than 90 percent of the annual proceeds collected from Colorado ratepayers.

“The bill continues to legislate discrimination of one very large group of consumers. It allows a consumer living on one side of the street in rural Colorado to continue to receive High Cost Fund support while his neighbor on the other side of the street will not, simply because of the logo at the top of their telephone bills” said Jim Campbell, CenturyLink regional vice president for regulatory and legislative affairs. “We continue to be baffled that lawmakers voting in favor of this bill feel it is good public policy to write consumer discrimination into Colorado law.”

As with other AT&T-written deregulation bills, the “sufficient competition” test to prove consumers have plenty of choices for phone service is notoriously easy to meet.  SB 157 defines a market competitive when 90 percent of customers in a geographic area have a choice of at least five providers.  While that sounds like competition, in fact the bill defines just about anything resembling a phone company as “competition.”  That includes traditional landline service, mobile phones, satellite telephony, Voice Over IP providers like Skype, and cable company phone service.

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A provider declaring service to any particular geographic area on a coverage map is sufficient evidence that competition exists, even if that provider does not deliver a consistently suitable signal, charges extraordinarily high prices, or only markets service in selected areas or in a package that includes other services.  In rural Colorado, wireless companies maintaining roaming agreements with other providers would count as multiple competitors, even though they rely on the same infrastructure to handle calls.  Poor reception? That’s your problem.

The bill also allows phone companies to charge whatever they like for traditional phone service, and only requires one day’s notice of pricing changes.  The bill would also strip away the right of regulators to demand justification for the inevitable rate increases and takes away their right to reject, modify or suspend rate hikes they deem unacceptably unfair.

That could force CenturyLink prices way up in rural Colorado, perhaps to a level that makes AT&T cell phone pricing not that bad after all.

CenturyLink: Victim of Friendly Fire from AT&T?

That suits AT&T’s Colorado president William Soards just fine, as AT&T is willing to sell rural Colorado lots of wireless phones.

“There’s plenty of competition out there that will be very excited to take their business, and AT&T will be one of them,” Soards told the Denver Post.

Colorado’s Rural Broadband Fund: The Fix Is In

One of the boldest provisions of SB 157 is the establishment of a rural broadband fund that delivers up to $25 million of ratepayer money to a select group of telecommunications companies to underwrite the costs of building  non-competitive broadband networks in the most distant, unwired corners of the state.  They wrote the rules, so it comes as no surprise they are, by definition, the intended recipients — often the very same companies that have refused to provide service in rural communities in the past.  Among those they’ve made certain are prohibited from accessing the broadband fund:

• Broadcasters experimenting with sub-channel broadband data service;
• Government agencies;
• Local municipalities;
• Public-private partnerships;
• Any organization, including non-profits, controlled in whole or part by a public entity;
• Electric utilities;
• Electric co-ops;
• Non-profit electric companies or associations;
• Every other supplier of electrical energy.

Who can access the broadband fund?  Why, the backers of the bill of course, especially AT&T:

• Wireless companies like AT&T;
• Telephone companies;
• Cable operators;
• Wireless ISPs (meeting certain conditions).

Padgett: Let local communities solve their broadband challenges themselves.

The bill is written to require a minimum level of 4/1Mbps service, which may lock out many rural telephone companies unable to deliver those speeds over traditional DSL as well as congestion and distance-sensitive wireless ISPs.  Cable operators are unlikely to provide any service in the most rural areas qualified to receive broadband funding. CenturyLink’s ongoing opposition to the bill suggests they don’t see much broadband funding in their immediate future either. That leaves just one technology most suitable to receive ratepayer funding: heavily capped and expensive wireless 4G broadband from companies like AT&T.

That may leave rural (but potentially not rural enough) Ouray County up the broadband creek without a paddle.

CenturyLink has shown minimal interest in providing ubiquitous broadband across the area dubbed the “Switzerland of America” for its rugged mountainous topography.  With just 4,450 residents, Ouray County is not the phone company’s highest priority.  But the company serves just enough of the county that it might fail the “unserved area” test — a ludicrous notion for broadband-starved Colona, Eldredge, Dallas, Ridgway, Ouray, Thistledown and Camp Bird.

Long-term residents have been through something like this before.  Some remember having to fight for basic electric service as well.  The San Miguel Power Association, a non-profit, member-owned rural electric cooperative established back in 1938, finally brought electric service to the San Miguel Basin area after residents were denied service for years by Western Colorado Power.  The region ultimately had to fend for itself, and did so successfully.

That same electric co-op may just have the best broadband solution for Ouray County — fiber infrastructure already in place, but prohibited from being funded to completion by AT&T’s corporate welfare bill.

Many rural legislators understand the rural broadband problem and see community-owned co-ops as their best chance of getting broadband service in rural Colorado.  They want to amend the bill to strip out the anti-competitive, anti-public broadband language.

Ouray County Commissioner Lynn Padgett is convinced her county’s broadband problems will never be solved by the Colorado Legislature or AT&T.

“Fundamentally, I believe that we need to let those closest to the areas with the rural broadband challenges, and those most accountable, help their communities,” Padgett said.