Africa’s international Internet connectivity is primarily provided by underseas fiber cables. (Map: Steve Song)

One of the most common arguments pro-capping telecom companies use is since the rest of the world has already adopted consumption billing for broadband, why can’t North American ISPs follow in their footsteps. But ISPs around the world are actually heading away from capped, throttled, or nickle-and-dime broadband pricing towards flat rate, unlimited service.

The Republic of South Africa is a case in point. Located on the southeastern tip of the African continent, South Africa has faced down a number of broadband challenges. Antiquated infrastructure lacking investment in upgrades, political and economic challenges, and very costly, limited capacity international connectivity have all conspired to leave the country with poor broadband service.

The biggest problem domestically is deteriorating landline infrastructure, leaving most South Africans with slow speed ADSL service. Wireless mobile broadband has proved less costly to deploy, but connectivity costs remain high regardless of how customers obtain service because of international bottlenecks.

South Africa’s problems are similar to those faced in South Pacific nations like Australia and New Zealand. Data caps have been a fact of life for years, primarily because there has never been sufficient capacity on underseas fiber and satellite links to sustain anticipated traffic if the caps were removed. But those problems are starting to ease as new high capacity backbone connections continue to come online.

Heavily capped broadband transforms how people use the Internet. In all three nations, many people do their heaviest web surfing at work over business connections. Some ISPs ease their usage caps or speed throttles during low-demand overnight hours, leaving many to hold off on significant file transfers and software updates until most people have gone to bed.

Regardless of whether you live in Johannesburg, Adelaide, or Wellington, people hate data caps and speed throttles and cannot wait to be rid of them.

That day has come in South Africa. Telkom, the former state-owned telephone company, has announced dramatic price cuts and relaxation of speed throttles for customers choosing its unlimited ADSL offerings. The company has announced a 40% price cut for residential customers and a 35% cut for business customers that took effect Feb. 1. Speed throttles that used to block international traffic when customers were deemed to be “using too much” are also being removed, although Telkom can still reduce speeds for their heaviest users.

Speeds are still very slow compared to what most North Americans can receive, but the average South African can now purchase unlimited 4Mbps ADSL for around $42 a month. A 10Mbps account remains out of reach for many at an unaffordable $157 a month. Some of Telkom’s competitors sell unthrottled and unlimited 1Mbps service for a budget-priced $22 a month.

South African ISPs are managing to achieve speed increases, but the primary bottleneck remains Telkom’s aging copper wire infrastructure. The answer is more fiber links further out in telephone exchanges and reducing the amount of copper customers have between their homes and Telkom’s central exchange offices. Although urban residents in relatively prosperous areas can achieve faster speeds, South Africa’s large expanse of low income areas often rely on prepaid wireless services because wired infrastructure is often sub-standard.

International capacity concerns will continue to ease as new underseas fiber cables are brought online. By 2014, one new underseas fiber cable will be able to carry more Internet traffic than all of the currently operational cables preceding it combined.

FreedomPop, which offers 500MB of free wireless data service a month via Clearwire’s WiMAX service on a range of devices, has a better offer for tablet owners coming in the second half of this year.

The FreedomPop Clip is designed to attach to Wi-Fi only tablets and provides wireless Internet connectivity when away from Wi-Fi. Better still, the service will be free for the first 500MB of usage each month and will support Sprint’s up-and-coming 4G LTE network for faster browsing. The add-on hardware only weighs 2.5 ounces and has its own built-in rechargeable battery estimated to last up to six hours.

Tablets enabled with support for mobile data networks have never sold particularly well because of the added cost and expensive two-year contract required to maintain the service. Instead, some customers tether their tablets or enable an add-on Mobile Hotspot feature on their smartphone, which can cost $30 extra per month. The new FreedomPop Clip does not come with a contract or a monthly fee when users keep browsing to under 500MB each month. The forthcoming device will also support up to eight extra connections, in case you want to share.

Those who want more data, and around 30 percent of FreedomPop’s customers reportedly do, they can buy it on-demand without any contract or commitment. If you bug your friends to also buy the device, you can earn additional free browsing. In fact, FreedomPop will try and encourage sharing by including a new “open Wi-Fi” Internet service on a separate SSID. Those connecting through the open feature will likely get a marketing message encouraging them to get their own FreedomPop device, and their usage won’t count against your allowance.

FreedomPop Clip supports Sprint’s up and coming LTE 4G network.

Stop the Cap! has FreedomPop’s $99 iPod Touch add-on device, which works exclusively on Clearwire’s network. We’ve used it for about five months and can report the device works well whether you actually have an iPod or not. It is simply a portable hotspot shaped to clip to the back of the 4th generation iPod Touch (it won’t fit ours). But even if it cannot clip on, it still delivers excellent signals up to 12 feet away from the MP3 player.

Its biggest weakness is Clearwire’s hit or miss network. Here in suburban Rochester, N.Y., Clearwire provides service through a nearby cell tower about a mile away. At home, the device works with fair reception indoors, but really needs to be near a window to perform reliably. Outdoors, the device works much better. We found more trouble trying to use the device in a nearby restaurant and while in downtown Rochester because Clearwire reception proved spotty. When it does work, it provides an average of 800kbps-1Mbps downstream speeds, which is superior to most 3G networks, but does not come close to what Verizon’s LTE network can deliver. But then, FreedomPop data comes free.

Just remember to keep usage at 400MB or less every month. As you approach 500MB of usage, FreedomPop will “conveniently” bill you for additional usage it anticipates you will use unless you remember to shut this auto top-up feature off on FreedomPop’s website control panel. You must also use at least 5MB a month to keep the device active, so remember to power it up at least once a month and do some browsing.

The FreedomPop LTE-capable Clip will also reportedly work with 3G service, according to Forbes. This is an important consideration because Sprint’s 4G LTE network is still in its infancy and not yet available in most major metropolitan areas. But if it relies on Sprint’s overwhelmed 3G network, expect much slower performance.

The selling price for the device itself has not yet been announced, but we expect it will be available later this year at $99 or slightly higher.

Thanks to Stop the Cap! reader Jerry for sending this news tip.

Zombie bill.

Time Warner Cable has pulled back on their winter promotions for new customers, bundling slower broadband and significant equipment fees into the bottom line price that may cost as much as $20 or more than the cable operator’s advertising suggests.

Several readers contacted Stop the Cap! over the last few weeks about the disparity between Time Warner’s advertised new customer pricing and the out the door price that arrives on the first month’s bill.

Diane, a Stop the Cap! reader in Brockport, N.Y., was attracted to an $89.99 triple play promotion for TV, Internet, and phone service until she learned what did not come with the deal.

“By the time I got off the phone, that $89.99 offer turned into more than $130 a month once adding a DVR, faster broadband service, and a second cable box,” Diane complains. “You really have to read the fine print. They only give you 3Mbps broadband speed on most of their offers now and DVR service is rarely included. In fact, all the equipment turned out to cost extra.”

Stop the Cap! checked out the offer Diane was interested in, and it turns out the $89.99 advertised price only tells half the story.

The wall of text. Time Warner’s rebate offer has hoops customers will consider an Olympic event.

First, Time Warner requires customers on this promotion to pay for at least one cable box, at $8.99 a month. A CableCARD is also available for $2.50 a month for televisions equipped to support that. Most consumers stick with traditional boxes. Diane wanted one DVR box and a second box for a bedroom. DVR Service from Time Warner, which does not include the box itself, has dramatically increased in price over the years. In 2013, the combined rate for the “box” and the “service” is $21.94 a month in western New York. A second cable box for Diane’s bedroom ran another $8.49 a month. The new Internet modem rental fee is also not included, so that adds an additional $3.95 a month.

Diane is also correct about broadband speeds. Time Warner bundles only 3Mbps service in most of its promotional packages. Increasing to Standard speed (15/1Mbps) generally costs an additional $10 per month. Now Diane’s monthly bill is well over $130 a month.

In fact, Diane should have selected a more deluxe package from Time Warner at the outset. Their $104.99 promotion bundles Turbo (20/2Mbps) Internet, free Showtime, and at least covers DVR service (although Diane still has to pay $9 a month for the DVR box). Her out the door price for that package is less than $127 a month.

Customers served by AT&T U-verse or Verizon FiOS stand to come out better if they plan to dump the phone company in favor of Time Warner. The cable operator is throwing in a debit card worth up to a $200, but only for customers switching away from a competitor. Diane just had Frontier phone service, so no $200 reward card for her. Time Warner requires customers to switch from services comparable to those selected from Time Warner to qualify for the maximum rebate.

For those that do quality, the rebate hoop-jumping begins:

• Customers qualifying for the reward card have to write down a promotion code and register their rebate request online within 30 days of starting service.
• Customers must remain active, in good standing and must maintain all services for a minimum of 90 days after installation.
• Customers are required to upload a scanned copy of their last provider’s bill, showing active service within the last 90 days. Card should arrive 4-6 weeks after a 90 day waiting period.
• Comparable services do not include wireless telephone service or online-only video subscriptions.
• Offer is not available to customers with past due balances with Time Warner Cable during the program period or customers who have been disconnected for non-payment during the twelve months preceding this offer.
• The customer’s name and address on file with Time Warner must exactly match the name and address on your former provider’s bill.
• Customers better spend the money quickly. After six months, the issuing bank deducts a $2.50 monthly “service fee” from the debit card until empty, except where prohibited by law.
• If the card is lost or stolen, there is a $5.95 Re-Issuance Fee. If you need to dispute a charge on the card, you are out of luck. The issuing bank will not intervene on your behalf.
• Customers cannot apply the rebate to their Time Warner Cable bill.

Frontier Communications has admitted in a December regulatory filing it lost a combined 60 percent of its residential and business landline customers in Washington over the last decade, with more than 15,000 more departing during the first nine months of 2012.

The company revealed those numbers as part of an effort to win “minimal regulation” in the state of Washington, claiming its cable, wireless, and Voice Over IP competitors have eaten away its customer base. During the period between 2000 and 2011, the number of access lines served by Frontier in Washington declined from 895,435 to 342,869.

Frontier revealed it lost 15,310 more customers from March-September 2012 in cities like Everett (1,302), Marysville (2,009), and Redmond (2,975). Many of those customers took their business to Comcast. Others rely on wireless service Frontier does not provide.

Frontier claims it faces robust competition in Washington and should be entitled to deregulation.

“These alternative providers have captured a significant share of the market for business and residential telecommunications services and additional features,” Frontier’s filing says. “Frontier is no longer the largest or predominant provider of telecommunications service.”

In Washington, companies like Frontier now just hold 19% of the voice telephone business. Wireless providers are now the predominant voice service provider, serving 6.1 million subscribers in Washington.

Frontier admits the competition has been beating the company’s pants off:

“The alternative service providers have clearly been successful in competing with Frontier as evidenced by the persistent and continuing loss of access lines by Frontier,” Frontier’s filing says. “As noted above, Frontier has experienced a 62% reduction in the number of access lines it serves in Washington from 895,435 as of January 1, 2001 to 342,869 as of September 30, 2012. This loss of access lines has been ubiquitous across Frontier’s exchanges in that all but one of Frontier’s 102 exchanges has experienced line losses since 2009.”

Deregulation would allow Frontier to increase prices or change how its markets and bundles certain products. It would also reduce the amount of oversight the company faces from state regulators.

The Washington Utilities and Transportation Commission temporarily set aside Frontier’s request at a meeting held Jan. 31. The regulator wants further time to investigate Frontier’s petition and will schedule future hearings on the matter in the future.

Thanks to Stop the Cap! reader Steve who first noticed the regulatory filing.

A big 40oz can of Hype from the Washington Post.

Conservative bloggers are calling it socialized “Obama-Wi-Fi,” broadband advocates claim it represents salvation from high-priced wireless service plans, and the media echo chamber is amplifying reports that the federal government in on the verge of launching a nationwide free Wi-Fi network.

Sorry folks, it is not to be.

An article in Sunday’s Washington Post originally titled, “FCC Proposes Large Public WiFi Networks” got the ball rolling, and almost 3,000 reader comments later, a full-scale debate about the merits of government-supplied Wi-Fi Internet access is underway.

Cecilia Kang and her headline writer mislead readers with statements like these:

The federal government wants to create super WiFi networks across the nation, so powerful and broad in reach that consumers could use them to make calls or surf the Internet without paying a cellphone bill every month.

[…] If all goes as planned, free access to the Web would be available in just about every metropolitan area and in many rural areas.

There is nothing new about the FCC’s effort to set aside unlicensed spectrum for so-called “white space” Wi-Fi. As the spectrum wars continue, wireless companies like Verizon and AT&T are pushing proposals to further shrink the number of channels on the UHF television band and repurpose them for expanded cellular data networks. That newly available spectrum would be secured through an FCC auction. FCC chairman Julius Genachowski wants to set aside some of that available spectrum for unlicensed use, including the next generation of Wi-Fi, which will greatly extend its range and speed.

There is no proposal on the table for the government to fund or create a free, national Wi-Fi network as an alternative to paid commercial services. At issue is simply how 120MHz of newly-available television spectrum would be made available to new users. Republicans and large wireless companies like Verizon and AT&T are demanding the vast majority of that spectrum be auctioned off. AT&T and Verizon would like to expand their spectrum holdings, and a straight “highest bidder wins” auction guarantees the vast majority of it will be divided by those two companies. Many Democrats and broadband advocates want a portion of that spectrum set aside to sell to AT&T and Verizon’s competitors — current and future — to promote competition. They also support set-asides that make frequencies available for unlicensed uses like Wi-Fi.

Genachowski’s proposal could potentially spur private companies or communities to build community-wide Wi-Fi networks operated on unlicensed frequencies. With more robust signals, such high speed wireless networks could be less costly to construct and serve a much wider geographic area.

The potential for competition from the public or private sector is what bothers companies like AT&T and Verizon. Both argue that since they had to pay for their spectrum, allowing other users access to free spectrum would be unfair, both to themselves and to the government’s effort to earn as much as possible from the auction. AT&T has been the more aggressive of the two companies, repeatedly attempting to insert language into legislation curtailing the FCC’s ability to set aside a significant amount of spectrum for unlicensed use. While AT&T’s lobbyists do not go as far as to advocate banning such networks, the technical conditions they demand would make them untenable. AT&T and others also demand the FCC must close down unlicensed networks if they create “harmful interference,” which is open to interpretation.

Helping the wireless companies in the campaign against the next generation of Wi-Fi are hardware manufacturers like Cisco, which has been trying to deep six the proposal for at least two years. Why? Because Cisco’s vision of wireless networking, and the products it has manufactured to date, are not in sync with the kind of longer distance Wi-Fi networks the FCC envisions. Cisco faces overhauling products that were designed under the premise Wi-Fi would remain a limited-range, mostly indoor service for consumers and businesses.

The threat to incumbent Internet Service Providers is clear enough. If a new version of Wi-Fi launched that could blanket entire neighborhoods, communities, non-profits, or even loosely-knit groups of altruistic individuals could launch free Wi-Fi services sharing their Internet connection with others. If the technology allowed users to seamlessly hand off wireless connections from one free Wi-Fi hotspot to another, much like cell sites do today, customers might downgrade their wireless data plans with big telecom companies. Machine-to-machine networking could also rely on Wi-Fi instead of commercial wireless data plans. It could threaten billions in potential revenue.

Stopping these networks is a priority for corporate interests with profits at stake. But one thing they do not have to worry about, at least for now, is the federal government getting into the wireless Internet business.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Washington Post FCC offers path to free Internet access 2-4-13.flv[/flv]

After the original story ran in the Post, Cecilia Kang participated in this interview which clarified what the FCC is actually proposing. This video explains what spectrum allocation and unlicensed spectrum is all about. Kang clarifies her article, explaining private companies and/or communities will have to decide what to do with the unlicensed spectrum. The federal government is only facilitating the space and has no plans to run a national network itself. (5 minutes)

https://www.washingtonpost.com/business/technology/tech-telecom-giants-take-sides-as-fcc-proposes-large-public-wifi-networks/2013/02/03/eb27d3e0-698b-11e2-ada3-d86a4806d5ee_story.html