Altice’s Suddenlink Communications has announced gigabit service for its customers in Batesville and El Dorado, Ark., Maryville, Mo., and Conroe, Tex.

“Today’s announcement is the next step in Altice USA’s Operation GigaSpeed initiative to provide gigabit broadband service to our Suddenlink customers,” said Hakim Boubazine, co-president and chief operating officer of Altice USA, in a statement.

Altice will continue to use DOCSIS 3.0 technology for most of its Suddenlink customers instead of adopting DOCSIS 3.1 in the near future. Because Suddenlink systems are all-digital, Altice is using a significant amount of its available cable bandwidth for broadband services. Customers who don’t want to pay for 1,000Mbps can also choose from 100 and 200Mbps plans, up from 75 and 100Mbps respectively.

These communities bring the number of GigaSpeed enabled cities in Suddenlink territory to 45. Here are the others, below the break:

… Continue Reading

Like the railroad robber barons of more than a century ago, a handful of phone and cable companies are getting filthy rich from a carefully engineered oligopoly that costs the average American $540 a year more than it should to deliver vital telecommunications services.

That is the conclusion of a new study from the Washington Center for Equitable Growth, authored by two men with decades of experience representing the interests of consumers. They recommend stopping reckless deregulation without strong and clear evidence of robust competition and ending rubber stamped merger approvals by regulators.

The trouble started with the passage of the 1996 Telecommunications Act, a bill heavily influenced by telecom industry lobbyists that, at its core, promoted deregulation without assuring adequate evidence of competition. It was that Act, signed into law by President Clinton, that authors Gene Kimmelman and Mark Cooper claim is partly responsible for today’s “highly concentrated oligopolistic markets that result […] in massive overcharges for consumer and business services.”

“Prices for cable, broadband, wired telecommunications, and wireless services have been inflated, on average, by about 25 percent above what competitive markets should deliver, costing the typical U.S. household more than $45 per month, or $540 per year, for these services,” the report states. “This stranglehold over these essential means of communication by a tight oligopoly on steroids—comprised of AT&T Inc., Verizon Communications Inc., Comcast Corp., and Charter Communications Inc. and built through mergers and acquisitions, not competition—costs consumers in aggregate almost $60 billion per year, or about 25 percent of the total average consumer’s monthly bill.”

The cost of delivering service is plummeting even as your bill keeps rising.

The authors also claim that these four companies earn astronomical profits — between 50 and 90% — on their services, compared with the national average of just under 15% for all industries.

The only check on these profits came from the 2011 rejection of the merger of AT&T and T-Mobile, which started a small price war in the wireless industry, saving customers an average of $5 a month, or $11 billion a year collectively.

But antitrust enforcement alone is inadequate to check the industry’s anti-competitive behavior. Competition was supposed to provide that check, but policymakers too often kowtowed to the interests of telecom industry lobbyists and prematurely removed regulatory oversight and protections that were supposed to remain in place until real competition made those regulations unnecessary.

Attempts to force open closed networks to competitors were allowed in some instances — particularly with local telephone companies, but only for certain legacy services. Newer products, particularly high-speed broadband, were usually not subject to these open network policies. The companies lobbied heavily against such requirements, claiming it would deter investment.

The framers of the ’96 Act also mandated an end to exclusive franchise agreements that barred phone and cable companies from entering each others’ markets. This was intended to allow phone and cable companies to compete head to head, setting up the prospect of consumers having multiple choices for these providers.

Current FCC Chairman Ajit Pai frequently cites the 1996 Communications Act as being “light touch” regulation that promulgated the broadband revolution. But in reality, the Act sparked a massive wave of corporate consolidation in broadcasting, cable, and phone companies at the behest of Wall Street.

“[Cable companies] refused to enter new markets to compete head to head with their sister companies [and] never entered the wireless market,” the authors note. “Telephone companies never overbuilt other telephone companies and were slow to enter the video market. Each chose to extend their geographic reach by buying out their sister companies rather than competing. This means that the potentially strongest competitors—those with expertise and assets that might be used to enter new markets—are few. This reinforces the market power strategy, since the best competitors have followed a noncompete strategy.”

Wall Street sold consolidation on the theory of increased shareholder value from eliminating duplicative costs and workforces, consolidating services, and growing larger to stay competitive with other companies also growing larger through mergers and acquisitions of their own:

• The eight regional Baby Bells created after the breakup of AT&T’s national monopoly in the mid-1980s eventually merged into two huge wireline and wireless companies — AT&T and Verizon. The authors note these companies didn’t just acquire those that were part of the Ma Bell empire. They also bought out independent companies like GTE and long distance companies like MCI. Most of the few remaining independents provide service in rural areas of little interest to AT&T or Verizon.
• The cable industry is still in a consolidation wave combining large players into a handful of giants, including Comcast and Charter Communications, which also have close relationships with content providers. Altice entered the U.S. cable business principally on the prospect of consolidating cable companies under the Altice brand, not overbuilding existing companies with a competing service of its own.

Such consolidation wiped out the very companies the ’96 Act was counting on to disrupt existing markets with new competition. Comcast, Charter, and Verizon even have agreements to cross-market each others’ products or use their infrastructure for emerging “competitive” services like mobile phones and wireless broadband.

“By the standard definitions of antitrust and traditional economic analysis, a tight oligopoly has developed in the digital communications sector,” the report states. “While some markets are slightly more competitive than others, the dominant firms are deeply entrenched and engage in anti-competitive and anti-consumer practices that defend and extend their market power, while allowing them to overcharge consumers and earn excess profits.”

“The impact of this abuse of market power on consumers is clear. According to the most recent Consumer Expenditure Survey by the U.S. Bureau of Labor Statistics, the ‘typical’ middle-income household spends about $2,700 per year on a landline telephone service, two cell phone subscriptions, a broadband connection, and a subscription to a multichannel video service,” the report indicates. “Adjusting for the ‘average’ take rate of services in this middle-income group, consumers spend almost twice as much on these services as they spend on electricity. They spend more on these services than they spend on gasoline. Consumer expenditures on communications services equal about four-fifths of their total spending on groceries.”

The authors point out the Obama Administration, unlike the Bush Administration that preceded it, was the first since the 1996 Act’s passage to begin implementing policies to enhance and protect competition, and also check unfettered market power among the largest incumbent providers:

• It blocked the AT&T/T-Mobile merger, which would have removed an important competitor and affect wireless rates in just about every U.S. city. The Obama Administration’s opposition not only preserved T-Mobile as a competitor, it also made that company review its business plan and rebrand itself as a market disruptor, forcing wireless prices down substantially for the first time and collectively saving all wireless customers in the U.S. billions from rate increases AT&T and Verizon could not carry out.
• It blocked the Comcast/Time Warner Cable merger, which would have given Comcast unprecedented and unequaled control over internet access and content providers in the U.S. It would have immediately made other cable and phone companies potentially untenable because of their lack of market power and ability to achieve similar volume discounts and economy of scale, and would have blocked emerging competitors that could not create credible business plans competing with Comcast.
• It blocked informal Sprint/T-Mobile merger talks that would have combined the third and fourth largest wireless carriers. Antitrust regulators were concerned this would dramatically reduce the disruptive marketing that we still see today from both of these companies.
• It placed restrictions on Comcast’s merger with NBC Universal and Charter’s acquisition of Time Warner Cable. Comcast was required to effectively become a silent partner in Hulu, a vital emerging video competitor. Charter cannot impose data caps on its customers for up to seven years, helping to create a clear record that data caps are both unnecessary and unwarranted and have no impact on the cost of delivering internet services or the profits earned from it.
• Strong support for Net Neutrality, backed with Title II enforcement, has given the content marketplace a sense of certainty and stability, allowing online cable TV competitors to emerge and succeed, giving consumers a chance to save money by cutting the cord on bloated TV packages. If providers were given the authority to discriminate against internet traffic, it would place an unfair burden on competitors and discourage new entrants.

The authors worry the Trump Administration and a FCC led by Chairman Ajit Pai may not be willing to preserve the first gains in broadband and communications competitiveness since mergermania removed a lot of those competitors.

“The key lesson in the communications sector is that vigorous regulation and antitrust enforcement can create the conditions for market success. But balance is the key,” the reports warns. “Technological innovation and convergence are no guarantee against the abuse of market power, but the effort to control the abuse of market power should not stifle innovation. If the Trump administration jettisons the enforcement practices of the past eight years, then the telecommunications sector is likely to see a wave of new consolidation and a dampening of the price cutting and innovative wireless and broadband services that have been slowly emerging.”

Frontier Communications is quickly becoming the Sears and Kmart of phone companies, on a slow march to bankruptcy or outright oblivion.

What started as a small independent phone company in Connecticut has grown through acquiring overpriced or decrepit landline cast-offs, mostly from Verizon, leaving itself with massive amounts of debt and infrastructure it is not willing to upgrade.

Despite rosy prognostications given to customers and shareholders, few are willing to take Frontier’s word that life is good with a company that still relies heavily on copper wire phone and DSL service.

Don’t take out word for it. Just watch the line of customers heading for the exits, canceling service and never looking back. As Frontier continues to lose customers fed up with its bad DSL service, rated even poorer than satellite-delivered broadband by Consumer Reports, its only chance to grow is to acquire more customers through more acquisitions. Unfortunately, after another disastrous transition for former Verizon customers in Florida, California, and Texas, Frontier’s bad reputation is likely to leave regulators and shareholders concerned about Frontier’s ability to manage yet more acquisitions in the future.

The Wall Street Journal reports Frontier bet on making it big with rural and suburban landlines, and lost.

Frontier’s mess has infuriated shareholders who invest in the stock mostly for its dividend payouts. The Norwalk, Conn. company recently announced it slashed its dividend, causing investors to flee the stock. Shares are down 69% so far this year. In a desperate bid to keep its Nasdaq listing, the company announced an unprecedented 1-for-15 reverse stock split just to prop up its share price.

Frontier’s slow hemorrhage of landline customers turned into a flash flood in the spring of 2016 after botching yet another “flash cutover” of customers acquired from Verizon. Verizon’s decision to sell off its landline networks in Florida, California, and Texas (mostly acquired from GTE by Verizon predecessor Bell Atlantic) was good news for Verizon, bad news for Frontier’s newest customers. Frontier hates to spend money to overhaul its copper-based facilities with fiber. It prefers to buy service areas from companies that undertook fiber upgrades on their own dime. Verizon had already upgraded large sections of those three states with its FiOS fiber to the home network. Frontier’s interest was primarily about acquiring that fiber, Frontier finance chief Perley McBride told the Wall Street Journal. Even McBride admitted Frontier failed to do a good job integrating those customers.

Consumer Reports rates Frontier DSL lower than one satellite broadband provider.

That should not be news to McBride or anyone else. Frontier has repeatedly failed every flash cutover it has attempted. The worst recent examples were Frontier’s botched 2010 transition in West Virginia, where the company inherited copper landlines neglected by Verizon for decades. Customers were infuriated by Frontier’s inability to maintain service and billing, and the company was investigated by state officials after many customers lost service, sometimes for weeks. In Connecticut, Frontier messed up a transition of its acquisition of AT&T’s U-verse system, having learned nothing from its mistakes in West Virginia or elsewhere. The company was forced to pay substantial service credits to residential and business customers that were offline for days. Thus it was no surprise yet another hurried transition would lead to disaster last spring. Regulators received thousands of complaints and a significant percentage of longtime Verizon customers left for good.

Frontier CEO Dan McCarthy appears to be even less credible with investors and customers than his predecessor Maggie Wilderotter, who may have retired with an understanding the long term future of Frontier looks pretty bleak. McCarthy has repeatedly put an optimistic face on Frontier’s increasingly poor performance.

John Jureller, Frontier’s last chief financial officer, routinely joined McCarthy in putting a brave face on Frontier’s stark numbers. He repeatedly tried to fuel optimism by telling investors the Verizon landline acquisition would make revenue trends “very positive.”

Jureller is no longer with Frontier. His replacement is the aforementioned McBride, who has a reputation as a “turnaround” expert, usually at the expense of employees. McBride has already helped oversee the permanent departure of at least 1,000 employees, laid off as part of what Frontier is calling “a customer-focused reorganization.” McCarthy prefers to tell Wall Street the layoffs are about reining in costs, despite the company’s profligate spending on acquisitions.

McBride told the Journal he doesn’t expect much revenue growth at Frontier anytime soon in California, Texas, and Florida. McCarthy’s grand turnaround plan isn’t working either. In fact, customer ratings of Frontier are falling about as fast as a rock thrown off a cliff.

There is little evidence Frontier will improve its dismal American Customer Satisfaction Index score in 2017. It finished dead last among internet service providers last year, falling 8% despite taking on new customers and allegedly upgrading others. Frontier’s overall grade was second to last across all categories in the telecom sector. Frontier managed to achieve bottom of the barrel scores despite broad upticks in customer satisfaction among other similar providers last year. Verizon FiOS achieved a 7% improvement to a best-ever customer satisfaction rating. In areas acquired by Frontier, as soon as the service was renamed Frontier FiOS, ratings plunged.

So has Frontier’s revenue, which continues a downward spiral. The company posted a loss of $373 million last year compared to $196 million in losses a year earlier. It has committed to spending $1 billion on its network this year, but customers uniformly report few substantial service improvements, and many wonder where the money is going.

Frontier is also upset that Verizon, in its zeal to make its landline properties in California, Texas, and Florida look as good as possible, stopped collection activity on overdue accounts just before the sale, saddling Frontier with thousands of deadbeat customers Verizon should have written off as uncollectable long ago, but never did.

Yesterday, the western New York office of the Better Business Bureau reported Frontier had achieved an “F” rating, amassed nearly 9,000 complaints, and out of 718 customer reviews, just six were positive:

We find a high volume and pattern of complaints exists concerning prior Verizon consumers who have not had a smooth transition to Frontier Communication since Frontier Communications took over various Verizon customers on April 1, 2016. Consumers have reported that services did not transition properly: many do not have services or are having spotty service with outages; many internet issues, from slow speeds to complete outages, consumers advise they are paying for certain levels of internet speeds but are not receiving those levels. Cable issues including missing networks, movie on demand concerns, issues with purchased subscriptions not carrying over, titles consumers have paid for (purchased licensed for) not being uploaded to their libraries and no solutions are being offered; and inability to access items like DVR boxes at the same time (multiple boxes in households not functioning); the Frontier App is not functioning for consumers; not fulfilling the rewards advertised with new service signups; charging consumers unauthorized third party charges on their telephone bill and not properly applying credits to consumer’s bills or consumers not being able to login to pay their bills.

When consumers call to receive assistance many report to BBB that they are hung up on or calls are disconnected and [are not followed up] by Frontier representatives. Consumers are transferred from representative to representative without receiving any assistance to their concerns many times resulting in a disconnection.

We have also identified a pattern in [Frontier’s] responses to complaints stating:

• Per Tariff, in no event shall Frontier be liable in tort, contract, or otherwise for errors, omissions, interruptions, or delays to any person for personal injury, property damage, death, or economic losses. Frontier shall in no event exceed an amount equivalent to the proportionate charge to the customer for the period of service during which such mistake, omission, interruption, delay, error or defect occurs. Frontier will apply a credit based on the customer’s daily service rate.
• We trust that this information will assist you in closing this complaint.  We regret any inconvenience that ‘consumer name’ may have experienced as a result of the above matter.

The business did not respond to the pattern of complaint correspondence BBB sent.

“Cable companies are beating the pants off Frontier,” Jonathan Chaplin, an analyst for New Street Research, told the newspaper. Heavy targeted marketing of Frontier’s customers, especially those served by Charter Communications in states like New York, Texas, Florida, and California are only accelerating Frontier’s customer cancellations.

Frontier’s cost consciousness and deferred upgrades as a result of its financial condition are only allowing cable companies to steal away more customers than ever, as the value for money gap continues to widen. While Frontier has failed to significantly upgrade many of their DSL customers still stuck with less than 10Mbps service, Charter Communications is gradually boosting their entry-level broadband speed to 100Mbps across its footprint and selling it at an introductory price of $44.99 a month.

Even Verizon sees the writing on the wall for the revenue prospects of landline service, especially in areas where it has not undertaken FiOS upgrades. Verizon DSL is still very common across its northeastern footprint, particularly in states like New York, Pennsylvania, Virginia, and Maryland. Upstate New York is almost entirely DSL territory for Verizon, except for a few suburbs in Buffalo, Syracuse, and the state’s Capitol region. Verizon soured on upgrading its copper facilities in these areas years ago, and has contemplated selling them or moving customers to wireless service instead.

Verizon spokesman Bob Varettoni admitted Verizon’s strategy was to “sharpen our strategic focus on wireless,” which makes Verizon considerably more money than its wireline networks.

“If Verizon’s selling assets, they’re selling them for a reason,” Chaplin said. “Verizon had taken those markets [in California, Florida, and Texas] pretty close to saturation before they sold. That’s the point at which they punted the assets to Frontier.”

Frontier cannot continue to do business this way and expect to survive. Investors have circled 2020 on their calendar — the year $2.4 billion in debt payments are due. Another $2.5 billion is due in 2021 and $2.6 billion in 2022, not including interest charges and other obligations. Refinancing is expected to get tougher at struggling companies and interest rates are rising. The pattern is a familiar one in the telecom industry, where acquirers like FairPoint Communications and Hawaiian Telcom spent heavily on acquiring landline cast-offs from Verizon. Customer departures, a financial inability to upgrade facilities quickly enough, and heavy debts forced both companies into bankruptcy, precisely where Frontier Communications will end up if it does not change its management and business practices.

It’s never too late to start your own policy institute or astroturf-phony consumer group. In reviewing some of the comments against Net Neutrality, I encountered a particularly odious set of organizations and individuals associated with a number of “institutes,” “centers,” and “Americans for This for That.” Most are funded by the Koch Brothers or quietly work with the American Legislative Exchange Council (ALEC) or other conservative and corporate donors that back “consumer-sounding” groups that literally work against the best interests of consumers.

The “groups” touting their unified opposition to Net Neutrality as “Over 65 Groups Against Obama FCC Internet Regulations,” is a major stretch, considering some are run out of UPS Stores or post office boxes, others haven’t updated their websites in years, have no web presence at all, or don’t discuss Net Neutrality (or any internet public policy) on their websites. Many are “asterisked” to reflect the fact the letter signer is expressing their own personal views and not necessarily those of the groups they are affiliated with.

Several signers are with groups operating under different names but share the same parent group or telephone number. Ironically, these birds of a feather often flock together and many of the same people also signed joint letters on a range of disparate public policy campaigns. They always take the side of corporate interests, usually coal, chemical companies, tobacco, oil and gas, and big cable and phone companies.

FCC Chairman Ajit Pai announces his opposition to Net Neutrality at a FreedomWorks and Small Business & Entrepreneur Council-sponsored event at the Newseum in Washington, D.C. Both organizations signed the letter opposing Net Neutrality.

Their joint letter opposing Net Neutrality relies on claims harvested from industry-funded and backed sources and dark money players including Hal Singer, Will Rinehart, and George Ford. Let’s take a closer look at who is signing:

• Grover G. Norquist, Americans for Tax Reform: Everyone knows Grover. He’s been backed by deep pocketed conservative donors for years, usually fighting to keep taxes low for his friends. But now for some reason he is the first signer of this letter to the FCC opposing Net Neutrality.
• Leigh Hixon, Alabama Policy Institute: A member of the Koch Bros./ALEC-backed State Policy Network.
• Phil Kerpen, American Commitment: Kerpen has been affiliated with a lot of different groups. We tangled with him before and when he was working for Americans for Prosperity. Koch money.
• Daniel Schneider, American Conservative Union: Lobbying organization.
• Steve Pociask, American Consumer Institute: The telecom industry’s 100% fake “consumer group” that astroturfs industry talking points.
• Center for Citizen Research: Just another name for the phony American Consumer Institute.
• Lisa Nelson, American Legislative Exchange Council: Corporate funded group that writes its own state legislative bills and finds Republicans willing to call them their own.
• Christine Harbin, Americans for Prosperity: Prosperity for the Koch Bros. (who founded this group) anyway.
• Robert Alt, The Buckeye Institute: Koch money and a history of problems with accuracy.
• Jeffrey Mazzella, Center for Individual Freedom: Hides its donor list, but there are ties to Big Tobacco and Karl Rove.
• Grant Maloy, Center Right Coalition of Orlando: So small, it doesn’t even have a website.
• Chuck Muth, Citizen Outreach: A Nevada blogger and Republican operative. Their bizarre issues agenda suggests possible funding. It includes “free market sugar, ‘contact lens’, and patent trolls.” Nothing about Net Neutrality.
• Michael J. Bowen, Coalition for a Strong America: Funded entirely by the Koch Bros.’ Wisconsin Club for Growth, this group operates out of a UPS Store mailbox in Beaver Dam, Wisc.
• Matthew Kandrach, Consumer Action for a Strong Economy: “The only thing making it possible to call his organization an ‘organization’ is that, along with its vice president, they make an organization of two people.” Amateurish combination of bad links and no spell-checking, a-la their Issues list which includes “Banking & Investmets” (sic).
• Col. Francis X. De Luca USMR (Ret), Civitas Institute: Koch money.
• Katie McAuliffe, Digital Liberty: “Digital Liberty is a project of Americans for Tax Reform,” which means it’s a Grover operation pretending to be more than what it actually is.
• Hance Haney, Discovery Institute: Donor list is kept top secret to “avoid harassment” but this group usually obsesses about promoting “intelligent design” but also loves to lobby on telecom issues, which means industry money is extremely likely.
• Adam Brandon, FreedomWorks Foundation: Its immediate predecessor was founded by the Koch Bros. Washington Post: “wealthy donors [sway] the direction of FreedomWorks and other political groups, which increasingly rely on unlimited contributions from corporations and financiers for their financial livelihood.” A handful of those donors are said to be responsible for the bulk of FreedomWorks’ annual budget.
• Annette Meeks, Freedom Foundation of Minnesota: Conservative group that got the bulk of its funding from DonorsTrust, “the dark-money ATM of the conservative movement.”
• Richard Watson, Florida Center/Right Coalition: See “Center Right Coalition of Orlando.”
• David Barnes, Generation Opportunity: Koch money.
• Ray Chadwick, Granite State Taxpayers: Lists National Taxpayers Union, Americans for Tax Reform, New Hampshire Tea Party Coalition, and Americans for Prosperity as “affiliates,” but also calls itself “non-partisan.”
• Joseph Bast, The Heartland Institute: Close ties to ALEC and now hides its donor list.
• Mike Krause, Local Colorado Project: No website at all, but we believe it is affiliated with the “Independence Institute,” a group closely tied to ALEC.
• Andrew Langer, Institute for Liberty: Started as a one-man operation with a $25k budget until the corporate donors moved in. Now the group refuses to disclose its donor list, but SourceWatch discovered it shared a phone number with the National Taxpayers Union.
• Tom Giovanetti, Institute for Policy Innovation: Ties to Koch Bros. and ALEC.
• Seton Motley, Less Government: Close ties to ALEC and part of the Heartland Institute’s plethora of groups.
• Daniel Garza, The LIBRE Initiative: Astroturf en español. A Koch operation trying to pass itself off as a Latino group.
• Bartlett Cleland, Madery Bridge: It’s a bit hilarious to find a corporate lobbying firm listed as one of the 65 “groups” against Net Neutrality. But at least it’s a case of being honest. Like most of the others, there is a financial incentive to take that position.
• Dee Hodges, Maryland Taxpayers Association, Inc. – Website hasn’t been updated for over a year. Nothing about Net Neutrality. Zombie group?
• Mike Wendy, MediaFreedom: We exposed Mike Wendy’s close ties to the telecom industry back in 2010, and we notice his and several other names listed among the 65 “groups” here were part of the ridiculous Progress & Freedom Foundation (now defunct), which was the final destination of the generously filled money train from some of the biggest telecom companies in the country. MediaFreedom is comprised primarily of Wendy’s blog attacking media reform groups like Free Press. His bio shows an endless journey working for a number of groups quietly funded by the cable and telephone companies.
• Henry Kriegel, Montanans for Tax Reform: Their website has not been updated in years and the rest appears to be little more than a post office box in Bozeman.
• Brent Mead, Montana Policy Institute: Ties to Koch Bros. and ALEC.
• Scott Cleland, NetCompetition: The Payola Pundit. Mr. Cleland doesn’t like to talk about his close ties to ALEC, where he served as co-chair of the Telecommunications and Information Technology Task Force. Members of that committee include Comcast and AT&T.
• Lorenzo Montanari, Property Rights Alliance: Really Americans for Tax Reform under yet another name.
• Don Racheter, Ph.D., Public Interest Institute: Five people on a college campus in Iowa. Ties to ALEC. Claims to be non-partisan but attacked “liberals” all over its website.
• Mike Stenhouse, Rhode Island Center for Freedom & Prosperity: You guessed it. Ties with ALEC and Franklin Center, which funds reporters of all things.
• Paul Gessing, Rio Grande Foundation: Ties to Koch Bros., ALEC, and Franklin Center.
• Tom Struble, R Street Institute: Broken record — ties to Koch Bros. and Franklin Center.
• Karen Kerrigan, Small Business & Entrepreneurship Council: Has unnamed “corporate partners.” Ironic opponent of Net Neutrality, considering it is supposed to represent the interests of small startups, entrepreneurs, and small businesses — exactly the types that would be discriminated against by giant ISPs unconcerned about Net Neutrality.
• James L. Martin, 60 Plus Association: The corporate astroturf version of AARP funded by the Koch Bros. Mr. Martin is a prolific letter-signer when corporate interests are involved. Check out this letter on another issue and notice how many of the groups signing that letter just happen to be involved in this Net Neutrality opposition campaign.
• David Williams, Taxpayers Protection Alliance: The Taxpayers Protection Alliance (TPA) is part of the network of front groups funded by the Koch Bros. and their political network.
• Berin Szoka, TechFreedom: “Sucking on the teat of the phone and cable companies” who donate tens of thousands of dollars to TechFreedom to act as their sock puppet.
• Gerrye Johnston, Women for Democracy in America, Inc.: Very, very odd organization (it’s now MEN and Women for Democracy by the way.) Internet public policy is so far afield from their mission statement, you’d need to book a flight to find it.
• Mary Adams, Maine Center-Right Coalition: See Center Right Coalition of Orlando. We think this group is normally concerned about illegal immigration, but there does not seem to be a formal coordinated web presence.

July 17, 2017

Marlene H. Dortch, Secretary
Federal Communications Commission
Office of the Secretary
445 12th Street, SW
Washington, DC 20554

Dear Ms. Dortch,

Stop the Cap! is writing to express our opposition to any modification now under consideration of the 2015 Open Internet Order.

Since 2008, our all-volunteer consumer organization has been fighting against data caps, usage-based billing and for Net Neutrality and better broadband service for consumers and businesses in urban and rural areas across the country.

Providing internet access has become a bigger success story for the providers that earn billions selling the service than it has been for many consumers enduring substandard service at skyrocketing prices.

It is unfortunate that while some have praised Clinton era deregulatory principles governing broadband, they may have forgotten those policies were also supposed to promote true broadband competition, something sorely lacking for many consumers.

As a recent Deloitte study[1] revealed, “only 38 percent of homes have a choice of two providers offering speeds of at least 25Mbps. In rural communities, only 61 percent of people have access to 25Mbps wireline broadband, and when they do, they can pay as much as a 3x premium over suburban customers.”

In upstate New York, most residents have just one significant provider capable of meeting the FCC’s 25Mbps broadband standard – Charter Communications. In the absence of competition, many customers are complaining their cable bills are rising.[2]

Now providers are lobbying to weaken, repeal, or effectively undermine the 2015 Open Internet Order, and we oppose that.

We have heard criticisms that the 2015 Order’s reliance on Title II means it is automatically outdated because it depends on enforcement powers developed in the 1930s for telephone service. Notwithstanding the fact many principles of modern law are based on an even older document – the Bill of Rights, the courts have already informed the FCC that the alternative mechanisms of enforcement authority that some seem motivated to return to are inadequate.

In a 2-1 decision in 2014, the U.S. Court of Appeals for the D.C. circuit ruled:

“Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”[3]

In fact, the only important element of the pre-2015 Open Internet rules that survived that court challenge was a disclosure requirement that insisted providers tell subscribers when their internet service is being throttled or selected websites are intentionally discriminated against.

Unfortunately, mandatory disclosure alone does not incent providers to cease those practices in large sections of the country where consumers have no suitable alternative providers to choose from.

Reclassifying broadband companies as telecommunications services did not and has not required the FCC to engage in rate regulation or other heavy-handed oversight. It did send a clear message to companies about what boundaries were appropriate, and we’ve avoided paid prioritization and other anti-consumer practices that were clearly under consideration at some of the nation’s top internet service providers.

In fact, the evidence the 2015 Open Internet Order is working can be found where providers are attempting to circumvent its objectives. One way still permitted to prioritize or favor selected traffic is zero rating it so use of preferred partner websites does not count against your data allowance.[4] Other providers intentionally throttle some video traffic, offering not to include that traffic in your data allowance or cap.[5] Still others are placing general data caps or allowances on their internet services, while exempting their own content from those caps.[6]

Our organization is especially sensitive to these issues because our members are already paying high internet bills with no evidence of any rate reductions for usage-capped internet service. In fact, many customers pay essentially the same price whether their provider caps their connection or not. It seems unlikely consumers will be the winners in any change of Open Internet policies. Claims that usage caps or paid prioritization policies benefit consumers with lower prices or better service are illusory. One thing is real: the impact of throttled or degraded video content which can be a major deterrent for consumers contemplating disconnecting cable television and relying on cheaper internet-delivered video instead.

Arguments that broadband investment has somehow been harmed as a result of the 2015 Order are suspect, if only because much of this research is done at the behest of the telecom industry who helped underwrite the expense of that research. Remarkably, similar claims have not been made by executives of the companies involved in their reports to investors. Those companies, mostly publicly-traded, have a legal obligation to report materially adverse events to their shareholders, yet there is no evidence the 2015 Order has created a significant or harmful drag on investment.

In a barely regulated broadband duopoly, where no new significant competition is likely to emerge in the next five years (and beyond), FCC oversight and enforcement is often the only thing protecting consumers from the abuses inherent in that non-competitive market. Preserving the existing Open Internet rules without modification is entirely appropriate and warranted, and has not created any significant burdens on providers that continue to make substantial profits selling broadband service to consumers.

Transferring authority to an overburdened Federal Trade Commission, not well versed on telecom issues and with a proven record of taking a substantial amount of time before issuing rulings on its cases, would be completely inappropriate and anti-consumer.

Therefore, Stop the Cap!, on behalf of our members, urges the FCC to retain the 2015 Open Internet Order as-is, leaving intact the Title II enforcement foundation.

Respectfully yours,

Phillip M. Dampier
Founder and Director

Footnotes:

[1] https://www2.deloitte.com/us/en/pages/consulting/articles/communications-infrastructure-upgrade-deep-fiber-imperative.html#1

[2] “Thousands of Time Warner Cable Video Customers Flee Spectrum’s Higher Prices.” (http://bit.ly/2tjHJ8f); “Lexington’s Anger at Spectrum Cable Keeps Rising. What Can We Do?” (http://www.kentucky.com/news/local/news-columns-blogs/tom-eblen/article160754069.html)

[3] http://www.cadc.uscourts.gov/internet/opinions.nsf/3AF8B4D938CDEEA685257C6000532062/$file/11-1355-1474943.pdf

[4] https://cdn3.vox-cdn.com/uploads/chorus_asset/file/7575775/Letter_to_R._Quinn_12.1.16.0.pdf

[5] https://www.t-mobile.com/offer/binge-on-streaming-video.html

[6] http://www.chicagotribune.com/bluesky/technology/ct-data-cap-policies-20151214-story.html