[Update: July 14/12:27am — Our sharp eyed readers contested the accuracy of the speed chart shown below almost immediately after publication.  Eric, who pens for Photography Bay we linked to below, replied to my inquiry about the data.  His reply:  “The speed estimates come from Verizon. I was more concerned with the upload figures; however, now that you mention it, it looks like Verizon may have the 80% calculation on the wrong side of their equation for the download portion of the chart. The upload chart looks right with FiOS at 10x faster than cable; however, the download chart shows a 20% speed increase when it should show a 5x speed increase. Nice catch.” I suppose we should let Verizon know. Thanks to our readers who caught the math error.  Hopefully their billing is more accurate.]

With the announcement by Rogers that their particular implementation of DOCSIS 3 would bring speeds of 25-50Mbps for downloads, it was curious that the company elected to only make incremental increases in upload speed.  Maxing out at just 2Mbps for uploading, Rogers continues the mindset that broadband subscribers don’t care about upload speed — just download speed.

That may have been true in the past, but today’s broadband consumer is woefully underserved with slow upload speeds, which hamper uploading pictures, home movies, and other content to share with friends, family members, or like we do here, the rest of the connected world as a whole.

In Rochester and many other Time Warner Cable cities, upload speed has remain unchanged for standard service customers for more than a decade — just 384kbps.  Paying $10 more for Turbo service, if only to get 1Mbps (which isn’t exactly “blazing fast” these days either), is the only alternative.

Fiber to the home services like Verizon FiOS and some municipally run fiber systems are changing the paradigm for upload speeds, providing customers with substantially faster service — typically far more than telephone company DSL or broadband service from the local cable operator.  A “speed test” from New York from a FiOS customer illustrates the capability:

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For photographers, among many other net users, upload speed is critically important in managing their photograph collections.

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The Photography Bay blog compiled a chart illustrating the dramatic differences upload speeds can have on your time and patience:

I got word on the heels of tomorrow’s Public Utilities Committee meeting that S1004 has been gutted and changed in the Senate!  So again we can scream Victory!

The low-down on what exactly happened goes something like this:

The North Carolina Senate has a very odd procedural rule that allows it to gut a bill and replace it with a completely different bill.  They can do this as long as the bill number and title remain the same.  In S1004’s case they kept the name and title and are changing the text of the bill to allow Progress Energy to change some of its coal fired plants to natural gas.

Be aware that HB1252 is still the bill we have been fighting and I am tracking it continuously.  We are half way there on defeating big cable’s sleeper hold on competition.  As long as we all keep the fight up, we won’t be saying goodnight to Irene any time soon!

The quest for fiber-based broadband service from consumers has reached the point where many have decided to accept or decline offers to purchase property in new housing developments based on whether they’ll have access to fiber or not.  Those were the findings in a study from the Fiber to the Home Council, which surveyed more than 600 existing fiber-to-the-home (FTTH) customers and 600 other broadband customers nationwide.

The results clearly show consumers love fiber optic broadband, far more than cable modems or DSL service from the phone company.

For example, 67% of FTTH users were very satisfied with their broadband speed compared to 58% of cable modem users and 46% of DSL users. A total of 70% of FTTH users were very satisfied with their Internet service up time compared to 64% of cable modem users and 55% of DSL users.

Consumers also reported that FTTH service was faster… much faster than competing technologies.  The median tested download speed from FTTH users was 10.4Mbps. FTTH tested download speed was 51% higher than cable modem service and 593% higher than DSL (DSL has abandoned the speed war, having lost that race to competing technologies, and now prevails only on price and where other alternatives are not available).

Upload speeds offered by FTTH users blew away the competition.  The average subscriber had 2.4Mbps of upload speed, which is 380% higher than cable modem users and 500% faster than DSL.

The survey also showed that robust competition, with at least one provider bringing true fiber to the home service to consumers, meant an average of six percent lower broadband bills.

Some cable and telephone industry executives downplay the lust for speed by consumers, claiming that most don’t understand the differences in speed, and don’t utilize services where speed matters most.  But the FTTH survey found entirely different results.  Not only are FTTH customers extremely loyal and happy with their service, they are reluctant to move to places that don’t offer it.

When asked to imagine purchasing a new home and given a list of five real estate development amenities, both current and non FTTH broadband users rated “Very high speed Internet from a direct fiber line” more important than other amenities such as green space/walking trails, 24 hour neighborhood patrol, a community pool, and a fitness center/club house. 69% of non FTTH users and 82% of current FTTH users said “Very high speed Internet” would be an important factor in buying a new home.

Even in this difficult economy, 49% of FTTH users said their broadband service would be the “last thing” they would give up.  Only 11% said it would be among the first things to go.

The demand is there, but the competition is not in many American communities.  Unless consumers reside in an area where an aggressive provider such as Verizon is willing to deploy fiber to the home, the chances of service arriving anytime in the near future is dismally low.  Few telephone companies are interested in deploying widespread fiber networks to consumers, and most cable operators believe their existing hybrid fiber/coaxial cable networks are “good enough” for consumers.  Only when a third player arrives in town, be it a private competitor or a municipally-owned fiber network, do telephone and cable providers get interested in performing their own fiber upgrades.

AT&T believes in its own copper-wire-based U-verse technology.  Smaller independent telephone companies are doing only limited experiments with fiber deployment, primarily to multiple dwelling units like apartment buildings and condos, and other uniform, expansive new housing developments.

Until prevailing attitudes among providers change, consumers hungering for fiber may simply have to pack up and relocate to the lucky communities that already have it, or will soon.

In the last two installments I covered the North Carolina legislators that had a hand in HB1252/S1004, legislation that would have severely curtailed municipal broadband projects in this state, and how they were involved in bringing the bills to the floor. I am now going to focus on some powerful, long term state senators, who have a very influential vote on the Senate floor.

R.C. Soles (D-Brunswick, Pender & Columbus Counties) has served for 17 terms. Soles, as he is not a co-sponsor or sponsor, does carry great influence in the Senate and can gather votes. Soles took a lot of money from the cable/telecom industry in 2008, $7500 in total. From Embarq he took $2000, Time Warner $1000, AT&T PAC $4000, and from the Sprint/Nextel PAC he took $500.

Senator Tom Apodaca (R-Buncombe, Henderson and Polk Counties) is a four term senator who also took a bundle of money from the cable/telecom industry in 2008. In total he received $12500 in contributions. Embarq gave $3000, Time Warner $2500, AT&T PAC $4000, Sprint/Nextel PAC $1000, and AT&T Mobility Employees PAC $2000. There was also a suspicious contribution from one “Jasie Barringer.” Barringer is listed as a housewife and self employed, but in reality she is more likely the chairman of RH Barringer Beverage Distributors (Anheuser-Busch), which is well known to me as it’s here in Greensboro. They also appear to have used a business address for the contribution, which is illegal in North Carolina. I will be filing a complaint with the State Board of Elections.

Senator Dan Clodfelter (D-Mecklenburg County/City of Charlotte), is the six term senator who sits with with Sen. Hoyle of the Revenue Laws Joint Sub-Committee, where they are trying to direct HB1252/S1004. Clodfelter also took a lot of money from the cable/telecom industry, $10250 in total. Embarq contributed $1500, Time Warner $2250, AT&T $2000, NC Cable PAC $2500, Sprint/Nextel PAC $500, NC Association of Broadcasters $500 and NC Broadcast PAC gave $1000.

There are a few other influential legislators in the House and Senate, but they are a little harder to track because of their positions of power. Speaker of the House, Rep. Joe Hackney and President Pro Tempore of the Senate Marc Basnight hold a considerable amount of power and influence, and receive a lot of money from everyone. This makes it a little harder to track. Basnight received $18500 in contributions from the cable/telecom industry and Speaker Hackney received $21000 in contributions.  While this is a lot of industry money, it’s not out of proportion from what they receive from every industry PAC that contributes to their campaign coffers.

If you have not read the first two installments here at Stop the Cap!, they can be found here and here. I will follow up when the first quarter reports become available for 2009.

It’s important to note that in all three articles, acceptance of political contributions in no way implies criminal activity.  It does imply that money from big donors can create a climate of influence with legislators.  This is the culture of politics, whether it is in North Carolina, Washington, or your local city council. Until we can remove the influence of industry PAC money on elected officials, the lobbies for these industries can continue to have the upper hand on the common citizen and what is good for us, unless we stand up and make our voices heard.

The information gleaned from here in North Carolina underlines this point, and I encourage you to review campaign finance reports to investigate why an elected official would be so insistent on standing against consumer and constituent interests.  Not every legislator that accepts contributions automatically means they will not stand with their constituents.  Many will.  But for those who do not, this can help explain why.  Should you require assistance locating, searching, or investigating the tricks of the campaign finance trade, feel free to contact me.

Monticello, Minnesota

A Minnesota Appeals Court panel ruled this week that Internet access is a “utility,” comparable to gas, electric, and telephone service, and not merely a convenience.  In a 2-1 decision, the Court ruled in favor of the city of Monticello, which proposed constructing an all-fiber broadband platform reaching every resident, financed by city-issued bonds.

The legislature has granted municipalities the express authority to own and operate telephone exchanges within their borders, as well as to operate public-cable communications systems. Minn. Stat. §§ 237.19, 238.08, subd. 3 (2008). Municipalities are not granted a similar authorization with regard to Internet service; however, the legislature has stated that it is a goal to “encourage economically efficient deployment of infrastructure for higher speed telecommunication services and greater capacity for voice, video, and data transmission.” Minn. Stat. § 237.011 (2008).

Bridgewater concedes that telephone services are utilities and that television services are a gray area, but steadfastly denies that Internet services qualify as a utility. Therefore, according to Bridgewater, the project in its entirety lacks statutory authority to be funded by revenue bonds because Monticello intends to provide Internet service. Based on the aforementioned statute, there appears to be minimal dispute that telephone and cable television are utilities. The crux of the issue is whether broadband Internet service is like a utility.

The definition of municipal public utilities appears broad enough to contemplate Internet service. Internet service could arguably be considered a utility under telecommunications related services. Bridgewater argues that related services means services related to providing cable television, such as on-demand movies.  However, cable-television companies often provide Internet services. Therefore, on-demand movies, digital video recorders, and Internet service could also be considered related services under the statute. Furthermore, Merriam Webster dictionary defines telecommunication as “communication at a distance (as by telephone).” Internet service seems to meet this definition. E-mail, instant messaging, and talking via web-cam are all ways to communicate at a distance utilizing Internet service. Based on the foregoing definition, the Fiber Project is arguably a utility.

Bridgewater argues that Internet service cannot be considered a utility because it does not have the near universal usage common to a utility. This argument is flawed. As noted by Monticello, ―[i]t would be absurd to conclude that the Minnesota Legislature [would allow revenue bonds] to be used only to fund the creation of systems that provide services that already are in universal or near-universal use. Rather, it seems that the reasoning behind allowing municipalities to issue these bonds is to provide utility-like services to people who otherwise would not be able to enjoy the benefits of the services offered. It is illogical to conclude that something is or is not a utility based on the number of people who have access to it.

Providing an entire community of people with access to telephone services, cable television, and high-speed Internet seems to qualify as a benefit to the public under the changing conditions of modern life. Thus, the Fiber Project is a public convenience that also serves a public purpose.

The Fiber Project qualifies as a public convenience, and therefore revenue bonds can be issued to finance its creation. Although Monticello cannot use the bond money to pay current expenses, the district court did not err in dismissing Bridgewater‘s complaint.

The Municipal-Owned Network

Monticello elected to construct the network after being repeatedly bypassed by private providers for state-of-the-art broadband access.  Stuck in a broadband backwater, the community of 11,000 decided to construct an advanced fiber network to reach every resident, and allow any company access to the network.  Bridgewater Telephone, the local telephone company owned by TDS, had steadfastly refused requests from city officials to move towards fiber on their own, and after 74% of local voters thought a municipal fiber network was their only hope of getting fiber into their community, the phone company sued to stop it.

TDS claimed the Internet was not a utility and, although the project does not rely on taxpayer funds, still involved a local municipality competing against a private business.

Since the lawsuit, and the threat of competition from Fibernet Monticello, the phone company announced it, too, would construct a fiber network.  Meanwhile, while it uses legal maneuvers to keep the municipal network at bay, the costs for the municipality mount.  The legal finding noted:

Monticello is losing a substantial amount of money each day that litigation delays installation of the Fiber Network. One estimate is $2,730,268 lost for an 11-month elay. Moreover, placing the bond proceeds in escrow required that the city pay the bond purchasers interest on the bonds until the escrow is released. As a result, Monticello will be required to pay the bondholders approximately $85,000 for every month the lawsuit continues.

Bridgewater’s current broadband DSL service is slow and expensive, after the promotions expire:

Up to 768kbps  $29.95
Up to 1.5Mbps $39.95
Up to 4Mbps $49.95
Up to 10Mbps $59.95

Now that the phone company is installing fiber, they are marketing a 25Mbps service for $69.95 a month, with a one year commitment.

Fibernet Monticello’s network has been stalled by the lawsuit, but the municipality suggests it will market residential broadband service at 10 to 100Mbps symmetrical speeds, as well as video and telephone service bundles, with no contract commitment at highly competitive prices.  No caps either.

TDS lamented the decision.  Drew Petersen, director of legislative affairs and corporate communications released a statement:

“TDS is a job-producing, tax-paying company with millions of dollars invested in the state of Minnesota and the community of Monticello. The Appeals Court decision sends a chilling message to the private business community operating in the state of Minnesota.  The decision will likely discourage other private enterprises from doing or expanding their business in Minnesota. Further, the decision endangers the appropriate relationship between municipalities and private enterprise; it also allows municipalities tax-free financing to enter into competition with tax-paying businesses.

“Throughout the legal debate, TDS has been honest in discussions with city leaders and the public. TDS has also invested millions of dollars and, in less than a year, placed 74 miles of fiber in protective conduit to build a complete fiber network covering the entire city. Every resident in the city can receive TDS’ Internet service, via fiber, at speeds of 25 Mbps at value-based prices. The neighboring townships also enjoy speeds above 10 Mbps.

Petersen called TDS’ broadband products in Monticello “blazing fast,” although whether those speeds would have been achieved without Monticello moving forward on its own fiber project is doubtful.

In the view of Stop the Cap!, Petersen has it entirely backwards.  Without the competitive threat the municipality represented with its own fiber network, TDS would have been content with the network they felt was good enough for the community for years.  TDS repeatedly denied local officials’ requests for fiber, something that we believe only became an option the moment competition was imminent.  In the end, with the reality of fiber looming, TDS was hardly discouraged from investing — they were encouraged, at the risk of losing customers in droves to a superior product offered at what likely would be substantially lower pricing.

Municipal broadband networks are often the only weapon communities have from being dumped into a broadband backwater, where speeds are kept slow, prices high, Cap ‘n Tier common, and infrastructure upgrades rare.  Be it in Minnesota or North Carolina, communities are told “no” to requests to deploy state-of-the-art networks.  That answer frequently changes to “yes” the moment competition threatens to arrive.  That’s why big telecommunications companies see fit to use the courts and legislative system to ban, stall, or limit the potential for municipalities to decide what’s best for their residents, limiting them to what one or two companies provide and claim is “good enough.”

(Thanks to Stop the Cap! reader Greg, who notified us of the court decision.)