[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Engadget Broadband in Europe.flv[/flv]

Rick Karr at Engadget delivers a sweeping indictment of America’s broadband duopoly in a special video presentation that explores Europe’s leapfrog advancements in broadband penetration, speed, and pricing.  It’s all made possible by technology policy.  In Europe, open access is guaranteed.  In the United States, telecommunications companies won the right to keep competitors off their networks.  The result is a staggering decline in America’s broadband ranking, now below Portugal and Italy.  So what happened to let Europe spring ahead of the United States?  Government regulation.

The game-changer in the United Kingdom and the Netherlands has been government regulators who have forced more competition in the market for broadband.

The market in the UK used to be much like ours here in the U.S.: British homes had two options for broadband service: the incumbent telephone company British Telecom (BT), or a cable provider. Prices were high, service was slow, and, as I mentioned above, Britain was falling behind its European neighbors in international rankings of broadband service.

The solution, the British government decided, was more competition: If consumers had more options when it came to broadband service, regulators reasoned, prices would fall and speeds would increase. A duopoly of telephone and cable service wasn’t enough. “You need to find the third lever,” says Peter Black, who was the UK government’s top broadband regulator from 2004 to 2008.

Starting around 2000, the government required BT to allow other broadband providers to use its lines to deliver service. That’s known as “local loop unbundling” — other providers could lease the loops of copper that runs from the telephone company office to homes and back and set up their own servers and routers in BT facilities.

Today, the UK’s broadband marketplace resembles America during dial-up Internet days, when customers could choose from a dozen or more providers and get substantial discounts or service tailored towards specific needs.  Today, that choice isn’t available from cable and phone companies.  There’s typically just one of each, and your practical choices usually end there. Thanks to Stop the Cap! reader Corey for sharing the story with us.

The video lasts 16 minutes.

Courtesy Kelvin Luffs

Several weeks ago, the Netherlands’ former state-owned telephone company — Koninklijke KPN N.V. — thought it would be a fine idea to charge their mobile customers extra subscription fees for accessing popular online services like Skype, YouTube, and Facebook.  KPN’s proposal would have added €3 a month for the privilege of using Skype.  Want to update friends on Facebook?  That will run €0.02 per megabyte.  YouTube?  €0.50 per hour.  Not a single Euro would be passed along to any of these companies, however.  KPN itself would bank the entire amount.

The Dutch Parliament reacted to news of this, and other recent controversy involving the country’s mobile providers, by introducing strong Net Neutrality regulation in Parliament — the second country after Chile to do so:

1. Providers of public electronic communication networks which deliver internet access services and providers of internet access services do not hinder or slow down applications and services on the internet, unless and to the extent that the measure in question with which applications or services are being hindered or slowed down is necessary:

a. to minimise the effects of congestion, whereby equal types of traffic should be treated equally;
b. to preserve the integrity and security of the network and service of the provider in question or the terminal of the enduser;
c. to restrict the transmission to an enduser of unsolicited communication as referred to in Article 11.7, first paragraph, provided that the enduser has given its prior consent;
d. to give effect to a legislative provision or court order.

2. If an infraction on the integrity or security of the network or the service or the terminal of an enduser, referred to in the first paragraph sub b, is being caused by traffic coming from the terminal of an enduser, the provider, prior to the taking of the measure which hinders or slows down the traffic, notifies the enduser in question, in order to allow the enduser to terminate the infraction. Where this, as a result of the required urgency, is not possible prior to the taking of the measure, the provider provides a notification of the measure as soon as possible. Where this concerns an enduser of a different provider, the first sentence does not apply.

3. Providers of internet access services do not make the price of the rates for internet access services dependent on the services and applications which are offered or used via these services.

4. Further regulations with regard to the provisions in the first to the third paragraph may be provided by way of an administrative order. A draft order provided under this paragraph will not be adopted before it is submitted to both chambers of the Parliament.

5. In order to prevent the degradation of service and the hindering or slowing down of traffic over public electronic communication networks, minimum requirements regarding the quality of service of public electronic communication services may be imposed on undertakings providing public communications ­networks.

The new bill, expected to pass the Dutch Senate as early as this week, would ban mobile providers from nickle-and-diming customers for the applications they run on their mobiles.  It’s a far different approach than Net Neutrality policies in the United States, which exempt cell phone companies.

van Dam

KPN’s original announcement that it was introducing extra charges for certain popular mobile applications raised privacy concerns in Parliament over exactly how KPN knew what their customers were doing with their phones.  That’s a question the Netherlands Consumer Authority wanted answers to as well.

KPN was accused of using “deep packet inspection” to monitor the activity of their customers.  In April, KPN discovered many of them were using an alternative messaging service called WhatsApp to bypass paying SMS text message charges.

Labour MP Martijn van Dam was unimpressed with KPN’s defense of its monitoring customer activity.  Although the company said the monitoring practice is widespread, it denied it was violating the privacy of its customers in the process.  van Dam suggested that would be akin to “a postal worker who delivers a letter, looks to see what’s in it, and then claims he hasn’t read it.”

van Dam is a co-author of the Net Neutrality bill that soon followed and is expected to pass over the objections of mobile companies, who claim they will be forced to raise prices in response.

Cerf

Vint Cerf understands the Internet.  Widely recognized as one of the two “fathers” of what eventually grew into today’s Internet, Cerf has watched a network launched by the United States Department of Defense grow into an economic powerhouse driving a knowledge-based economy.

Today, Cerf works as an Internet evangelist for Google, promoting the company’s innovation in the next generation of the broadband experience.  He brings decades of advice to Internet Service Providers the world over: upgrade your networks.  But more importantly, he told attendees of Juniper Network’s Nextwork conference, upgrade exponentially, not incrementally.

Cerf’s remarks Wednesday targeted the conundrum of coping with increasing video traffic on the Internet.  Cerf pointed to his employer’s construction of a gigabit fiber to the home network in Kansas City as the best antidote to traffic congestion.

Simply put, Cerf believes bandwidth must be increased exponentially and not through incremental upgrades that try and stay one step ahead of demand.  Google intends to prove gigabit fiber broadband is cost-effective and within reach of providers.  A side benefit of building next generation networks is the opportunity for innovating new online applications.  Many of tomorrow’s online innovations are simply impossible on a constrained, incrementally upgraded network that often requires accompanying traffic limiting schemes.

“When you are watching video today, streaming is a very common practice. At gigabit speeds, a video file [can be transferred] faster than you can watch it,” Cerf said. “So rather than [receiving] the bits out in a synchronous way, instead you could download the hour’s worth of video in 15 seconds and watch it at your leisure. It actually puts less stress on the network to have the higher speed of operation,” he said. 

Wu

So far, many providers are considering Netflix and other video traffic a threat to their networks, and are attempting to collect tolls to allow Netflix content to reach subscribers (Comcast), or are considering Internet Overcharging schemes that combine usage caps with overlimit fees to discourage customers from watching too much (AT&T, Time Warner Cable).

At another session held Tuesday, Tim Wu, Columbia University law professor noted efforts by several U.S. providers to do away with all-you-can-use broadband.

Wu said phone companies like AT&T are ideally looking towards replicating the cell phone model on broadband — leaving users to guess how much usage they will rack up over a month, knowing most will be wrong.  As the consumer, he noted, you end up buying too much or you face steep overlimit fees for underestimating usage — either way “you are screwed.”  Wu called consumption-oriented pricing “abusive.”

Wu also said wireless carriers in particular are uneasy with the open, “ownerless” concept of the Internet.  Their instinct is to own, control, and manage networks.  Their only success so far is trying to advocate for fast, premium-priced traffic lanes, and slow “free lanes” for everything else — a key reason why many consumers advocate to preserve the open model of the Internet through enforced Net Neutrality.

Wu called these efforts by phone companies to control traffic “dangerous.”

The U.S. Cattlemen’s Association this week took some time out to go all out for AT&T’s proposed merger with T-Mobile.  In addition to successfully navigating the FCC’s arcane comment filing system to submit their comments in favor of the merger, the group also penned a lengthy, favorable guest blog for Washington, D.C. inside-the-beltway-favorite, The Hill newspaper:

The expansion of next-generation wireless broadband envisioned by the T-Mobile and AT&T merger, for example, is critical for the next stage of rural America’s evolution and success. It will allow ranchers, farmers, and all rural residents who have been traditionally underserved to finally gain access to the best that mobile broadband has to offer, including faster and more reliable connections. We strongly encourage the Federal Communications Commission to support these developments as an investment in both the current and future generations of agricultural producers and small communities across rural America.

The cattlemen’s group has had a lot to say about telecommunications issues, especially mergers and acquisitions.  It was cited by Verizon as a supporter of its merger with Alltel in 2008, signed a joint letter in 2008 from industry-connected Connected Nation for a broadband plan compatible with the interests of the nation’s largest cable and phone companies, wrote a letter to the FCC opposing Net Neutrality in 2009, and submitted two pages of comments in May favoring the merger between AT&T and T-Mobile.

Apparently there is plenty of free time on the ranch to ponder billion dollar telecommunications mergers.

The argument from the group is that permitting mergers and blocking open net policies like Net Neutrality will convince carriers to provide enhanced service in rural areas where cattle ranches predominate.  But facts in evidence illustrate how wrong-headed that argument is:

• Verizon’s merger with Alltel has done nothing to bring its LTE network to rural America.  Verizon is focusing LTE upgrades on the markets where it makes the most business sense, and that does not include rural Texas or Oklahoma;
• The National Broadband Plan has directed stimulus funding for rural projects that are most likely to reach their ranch members — wireless ISPs and rural DSL.  The cattlemen’s group has nothing to say about either provider;
• Net Neutrality and the policies of an open and free Internet have no real impact on rural broadband deployment.  The same companies refusing to provide service yesterday are still refusing to provide service today, and that includes completely exempted wireless providers;
• T-Mobile’s urban-suburban focus is a mainstay of its business plan.  T-Mobile has never prioritized rural America as a viable service area, relying on roaming agreements to fill in service gaps.  Combining its urban-focused wireless infrastructure with AT&T will add nothing to the rural wireless experience.

The Washington Post finds financial connections between AT&T and the cattlemen group.

Advocating for a merger with T-Mobile makes about as much sense as the group advocating for a T-Mobile merger with Leap Wireless’ Cricket or MetroPCS.  All have a record of indifference about providing service in rural areas themselves.

So why does the group persist in fronting for AT&T’s public policy agenda?  Cecilia Kang at the Washington Post tweeted the obvious answer — they receive support from AT&T.

The piece for The Hill was penned by Jess Peterson, the cattlemen group’s executive vice president.  But Peterson has a second career: president of Washington, D.C.-based Western Skies Strategies, a lobbying firm that promises “success and profitability to our valued clients every time.”

The concept of dollar-a-holler public advocacy is not new, but AT&T is the Master of the Astroturf Universe.  The Center for Responsive Politics notes that from 1989 to 2010, no single company spent more on campaign contributions than AT&T.  Since 2008, more than $1.25 million has been “donated” to politically-connected charities and those willing to lend their name and reputation to back the company’s public policy agenda.

Facts have a hard time penetrating piles of cash, but here are some anyway:

1. T-Mobile’s combination with AT&T may create additional capacity for the combined company, but almost entirely in urban and suburban areas that will do nothing to help rural wireless.
2. No telecommunications company has a track record of providing service in areas unprofitable to serve or fail return on investment demands.  No merger will change that.
3. Promises for network upgrades already committed in long-range business plans do not sweeten a bitter deal for Americans concerned about competition in the wireless marketplace.
4. T-Mobile’s track record as being the most market-disruptive in pricing and innovation will be eliminated in a merger with America’s lowest rated wireless carrier.
5. Any excitement for rural wireless broadband from AT&T is tempered when would-be customers realize the company enforces a 2GB usage cap with an overlimit fee on their smartphone data plans — an Internet Overcharging scheme more punishing than either Verizon or Sprint.

Vincent, one of our regular Stop the Cap! readers sent along a link to a story about the decrepit state of American broadband: it’s a real mess for those who can’t get it, can’t get enough of it, and compare it against what other people abroad are getting.

Cracked delivers the top five reasons why American broadband sucks.  Be sure and read their take (adult language), but we have some thoughts of our own to share:

#5 Some of Us Just Plain Can’t Get It

Large sections of the prairie states, the mountain states, and the desert states can’t get broadband no matter how much they want it.  That’s because they are a hundred miles or more from the nearest cable system and depend on the phone companies — especially AT&T, Frontier, CenturyLink, and Windstream to deliver basic DSL.  AT&T is trying as hard as possible to win the right to abandon rural America altogether with the elimination of their basic service obligation.  Verizon has sold off some of their most rural territories, including the entire states of Hawaii, New Hampshire, Maine, Vermont, and West Virginia.  CenturyLink has absorbed Qwest in the least populated part of America — the mountain and desert west.

Frontier and Windstream are betting their business models on rural DSL, and while some are grateful to have anything resembling broadband, neither company earns spectacular customer ratings.

So long as rural broadband is not an instant profit winner for the phone companies selling it, rural America will remain dependent on dial-up or [shudder] satellite fraudband.

#4 Often There are No Real Options for Service (and No Competition)

Cracked has discovered the wonderfully inaccurate world of broadband mapping, where the map shows you have plentiful broadband all around, but phone calls to the providers on the list bring nothing but gales of laughter.  As if you are getting service at your house.  Ever.  Stop the Cap! hears regularly from the broadband-deprived, some who have had to be more innovative than the local phone company ever was looking for ways to get service.  Some have paid to bury their own phone cable to get DSL the phone company was reluctant to install, others have created super-powered Wi-Fi networks to share a neighbor’s connection.  The rest live with broadband envy, watching for any glimpse of phone trucks running new wires up and down the road.

Competition is a concept foreign to most Americans confronted with one cable company and one phone company charging around the same price for service.  The most aggressive competition comes when a community broadband provider throws a monkey wrench into the duopoly.  Magically, rate hikes are few and fleeting and speeds are suddenly much better.  Hmmm.

#3 Those Who Have Access Still Lag Behind the Rest of the World

We're #35!

This is an unnerving problem, especially when countries like Lithuania are now kicking the United States into the broadband corner.  You wouldn’t believe we’re that bad off listening to providers, who talk about the innovative and robust broadband economy — the one that is independent of their lousy service.  In fact, the biggest impediment to more innovation may be those same providers.  Some have an insatiable appetite for money — money from you, money from content producers, money from taxpayers, more money from you, and by the way there better be a big fat check from Netflix in the mail this week for using our pipes!

Where is the real innovation?  Community providers like Greenlight, Fibrant, and EPB that deliver their respective communities kick-butt broadband — service other providers would like to shut down at all costs.  Not every commercial provider is an innovation vacuum.  Verizon FiOS and Google’s new Gigabit fiber network in Kansas City represent innovation through investment.  Unfortunately Wall Street doesn’t approve.

Still not convinced?  Visit Japan or Korea and then tell us how American broadband resembles NetZero or AOL dial-up in comparison.

#2 Bad Internet = Shi**y Economy

The demagoguery of corporate-financed dollar-a-holler groups like “FreedomWorks” and “Americans for Prosperity” is without bounds.  Whether it was attacking broadband stimulus funding, community broadband endeavors, or Net Neutrality, these provider shills turned broadband expansion into something as worthwhile as a welfare benefit for Cadillac drivers.  Why are we spending precious tax dollars on Internet access so people can steal movies and download porn they asked.  Why are we letting communities solve their own broadband problems building their own networks when it should be commercial providers being the final arbiter of who deserves access and who does not?  Net Neutrality?  Why that’s a socialist government takeover, it surely is.

It’s like watching railroad robber barons finance protest movements against public road construction.  We can’t have free roads paved by the government unfairly competing with monopoly railway companies, can we?  That’s anti-American!

The cost of inadequate broadband in an economy that has jettisoned manufacturing jobs to Mexico and the Far East is greater than we realize.  Will America sacrifice its leadership in the Internet economy to China the same way we did with our textile, electronics, appliances, furniture, and housewares industries?  China, Japan and Korea are building fiber optic broadband networks for their citizens and businesses.  We’re still trying to figure out how to wire West Virginia for 3Mbps DSL.

#1 At This Point, Internet Access is Kind of a Necessity

The United Nations this week declared the Internet to be a basic human right.  Conservatives scoffed at that, ridiculing the declaration for a variety of reasons ranging from disgust over any body that admits Hugo Chavez, to the lack of a similar declaration for gun ownership, and the usual interpretation of broadband as a high tech play-toy.  Some folks probably thought the same way about the telephone and electricity around 1911.

Yes, the Internet can be frivolous, but then so can a phone call.  Cursed by the U.S. Post Office for destroying their first class mail business, by telephone directory publishers, and those bill payment envelope manufacturers, the Internet does have its detractors.  But should we go back to picking out commemorative stamps at the post office?  Your local phone and cable company sure doesn’t think so.  We don’t either.