While AT&T is in no hurry to expand and upgrade U-verse broadband to its wireline customers in the United States, the Dallas-based company has spent more than $7 billion trying to attract wireless customers in Mexico that so far don’t show much interest in the U.S. company.

AT&T last month reported it is losing big south of the border. After spending $4.4 billion to acquire two competing wireless companies in Mexico and committing another $3 billion to upgrade their networks to 4G service, customers are continuing to abandon the carrier.

The losses AT&T continues to incur improving wireless service in Tabasco, Veracruz, and Baja California has not bothered AT&T to date — in fact the company plans to dump even more money into the Mexican cellular market, despite achieving a market share of only around 8.5 percent, effectively making it about as relevant as Sprint in the United States. Its largest competitors are the gigantic América Móvil, which has nearly 70 percent of the market and Telefónica, which holds a 22 percent share.

So far, AT&T has been forced to support different websites for its two different carriers – Iusacell and Nextel Mexico. The former also maintains the Unefon brand, which targets low income Mexicans with cheap prepaid service.

Part of AT&T’s problem recouping its investment is the fact Mexicans cannot afford the pricing Americans pay for cell service. While AT&T charges $50+ for a low-end cell plan in Texas, just across the Mexican border AT&T offers a $13 basic plan offering 500 calling minutes and 500MB of data.

AT&T’s decision to spend billions in Mexico while it reduces spending on further expansion of its U-verse network has nothing to do with Net Neutrality or Title II enforcement by the Federal Communications Commission. It is all about finding new customers. Wireless penetration has now topped 100 percent in the U.S. (because some families maintain multiple devices, sometimes with different carriers). In Mexico, less than 50% of the population has a cell phone and even fewer own smartphones. AT&T believes that gives it plenty of room to grow. AT&T believes wireless service brings the best potential for profits both inside and outside of the U.S., and the company thinks it can dramatically improve market share in Mexico and charge prices that will bring it a healthy return.

Their customers apparently disagree. In Mexico, for the first nine months of the year, AT&T lost 689,000 wireless subscribers — a decline of almost 8 percent. Even customers attracted to try AT&T for the first time often decide to leave, giving AT&T Mexico a churn rate exceeding 5% — five times worse than what AT&T experiences in the United States.

Some Wall Street analysts are critical of AT&T throwing good money after bad down south. Michael Hodel of Morningstar doesn’t like what he sees. The incumbent Mexican telecom giant América Móvil has kept the lion’s share of the market for years and has vastly more scale than AT&T. Hodel sees losses for AT&T until 2018.

Others wonder how AT&T Mexico will be able to introduce the premium priced services it will depend on to get a return on its investment. The Mexican economy is unlikely to allow customers to pay substantially more for wireless service.

AT&T CEO Randall Stephenson has told investors if AT&T builds a 4G network, customers will come and pay AT&T’s asking price.

“We are convinced that what we experienced in the U.S., we will experience in Mexico,” Stephenson said at an investor conference in May. “So you are going to see the mobile Internet revolution take off in Mexico. We intend to ride that wave.”

Free trade supporters and those who support the deregulation of the Mexican telecom market are trying to use AT&T’s experience as evidence that free markets and trade works.

“AT&T’s moves are the clearest evidence of success in Mexico’s reforms, and it’s hard to overstate the importance,” said Christopher Wilson, deputy director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington.

For customers, it isn’t a matter of free trade. It’s good coverage at a reasonable price that matters most, and AT&T Mexico has not yet achieved that.

Arturo Diaz, originally an Iusacell customer in Mexico City, recently dropped his AT&T Mexico service.

“Their coverage is not very good outside of large cities and AT&T’s reputation is to raise prices, which they seem to do a lot in the U.S.,” Diaz said. “If you can afford a better phone and plan, you switch to América Móvil. With the stronger American dollar, the peso is devalued again, so more people will likely want a budget prepaid plan which they can get from Telcel. I’m not sure what AT&T is doing in Mexico and their plans from two different companies are a mess. I signed up with América Móvil last month.”

The Hilton Convention Center in Anaheim, Calif. Come for the color but don’t stay for the $500 Wi-Fi.

The Federal Communications Commission’s Enforcement Bureau today announced a tentative $25,000 fine against Hilton Worldwide Holdings, Inc., owner of the Hilton Hotel Chain, for allegedly obstructing a FCC investigation into the blocking of consumers’ use of personal Wi-Fi while visiting hotel properties.

“Hotel guests deserve to have their Wi-Fi blocking complaints investigated by the Commission,” said Travis LeBlanc, chief of the FCC Enforcement Bureau. “To permit any company to unilaterally redefine the scope of our investigation would undermine the independent search for the truth and the due administration of the law.”

The regulator accuses Hilton of stonewalling requests for information and documents about how the hotel chain manages Wi-Fi for visitors and guests. In August 2014, the FCC received a consumer complaint accusing Hilton of purposely blocking visitors’ Wi-Fi hot spots on its property in Anaheim, Calif., to compel guests to pay a $500 fee to use Hilton’s own Wi-Fi network. The complaint was followed by others who alleged similar experiences with Hilton hotels elsewhere.

In most cases, fees of that amount are sought from vendors attending conventions and other large events held at Hilton hotels. Wi-Fi services can be a lucrative revenue generator, but not if vendors rely on company or personal cell phone hotspot services to bypass the hotel’s internal Wi-Fi network. Hilton hotels in the area generally offer Wi-Fi in rooms for prices ranging from free to $14.95 a night. The charges evidently vary depending on the promotion in effect when a room is booked. Fees for convention vendors are often dramatically higher, which seems to be the case surrounding this complaint.

In November 2014, the FCC issued Hilton a letter of inquiry seeking information concerning basic company information, relevant corporate policies, and specifics regarding Wi-Fi management practices at Hilton-brand properties in the United States. After nearly one year, the FCC alleges Hilton has effectively ignored the FCC’s request for the vast majority of its properties. Hilton runs hotels under the Hilton, Conrad, DoubleTree, Embassy Suites, and Waldorf Astoria brands.

In the last two years, the FCC has made it clear it will aggressively pursue and fine those intentionally interfering with Wi-Fi signals, especially if a revenue motive is found. In October 2014, the FCC fined Marriott International, Inc. and Marriott Hotel Services, Inc. $600,000 for similar Wi-Fi blocking activities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tenn. In August 2015, the FCC fined Smart City Holdings, LLC $750,000 for similar Wi-Fi blocking at multiple convention centers across the country. The Commission also recently proposed to fine M.C. Dean $718,000 for apparent Wi-Fi blocking at the Baltimore Convention Center.

With one less significant competitor in the marketplace, AT&T feels safe cutting back customer promotions to raise prices and profitability, even if it means losing customers.

AT&T’s original argument for acquiring DirecTV was to negotiate cost savings from cable programmers by qualifying for greater volume discounts available from combining 5.7 million U-verse TV customers with DirecTV’s roughly 20.3 million U.S. subscribers. But AT&T has now made it clear it is keeping those savings for itself.

“We have our target to get to $2.5 billion or more in savings,” said John J. Stephens, AT&T’s chief financial officer, in a conference call with investors. “We already are realizing some of that in our content and supplier relationships. We really like our momentum here, and we are confident we can continue to expand margins and cut costs, even with pressure from our international operations.”

At the same time AT&T is enjoying billions in savings, in recognition of the fact its customers now have fewer competitors with whom they can do business, the time is right to cut back on money-saving promotional plans, effectively raising prices for customers.

“Because of our focus on profitability, we really got away from promotional pricing, and those customers who were cost-sensitive just had a propensity to churn,” Stephens said, referring to an industry term that means customers canceled service either because it got too expensive or they found a better deal elsewhere.

Stephens

Stephens told investors its new pricing strategy, as expected, brought reductions in the number of U-verse video subscribers during the latest quarter. The company is also pushing more customers towards DirecTV and away from U-verse because programming costs are lower on the satellite platform. The new focus on profits means fewer customers are choosing AT&T and many existing DSL customers are resisting efforts to force them on to the U-verse platform.

“Net adds dropped with fewer promotions and shifting our focus to the lower content cost DirecTV platform,” Stephens admitted. “We added 192,000 IP broadband customers in the quarter, as migrations from our DSL base continued to slow. U-verse video losses also put some pressure on broadband numbers due to our high attachment rates.”

Stephens noted the customer growth declines occurred at the same time pressure on AT&T’s costs are dropping significantly. In October, the company signed an agreement with Viacom for its cable programming networks Stephens says represents “best-in-industry pricing,” made possible from the enhanced volume discounts AT&T now receives.

DirecTV will also allow AT&T to curtail additional U-verse expansion into its more rural service areas.

“They don’t have television in these areas, or I should say we didn’t have a video offering,” Stephens said of AT&T’s rural customer base, mostly still dependent on DSL. With its ownership of a satellite TV provider, there is less urgency to expand rural U-verse. “These were generally out of the U-verse footprint, but now we do. And now we’ll be able to provide them with a video offering through DirecTV, and we’re very pleased with that. So we are hopeful that now this nationwide video service will help us in improving our overall broadband positioning.”

AT&T’s deal with the government to win approval of its merger with DirecTV committed the company to expand high-speed fiber optic broadband to at least 12.5 million customer locations and offer discounts to low-income customers. AT&T’s interpretation of the agreement means it will expand broadband service mostly in urban areas while continuing to allow its rural DSL broadband networks to lose customers.

“Over the last few years, the real trend has been a migration from DSL to IP broadband [eg. U-verse],” Stephens said. “And that’s been something that we’ve encouraged ourselves, and we’re beginning to complete that process or near completion where the DSL customers we have left is a much lower percentage than [those with U-verse] broadband capabilities from us.”

“I’m going to tell you, I think on the consumer side we’re down into the two million range on total DSL customers,” Stephens said. “[…] I would suggest to you it has changed dramatically over the course of four or five years, where it used to be 90% plus of our broadband base and now it’s a much lower percentage. So we’ve gone through that migration not completely, but almost completely.”

AT&T’s commitment to aid low-income customers is not clear, as customers report AT&T less willing to offer or extend money-saving promotions. On the wireless side of AT&T’s business, the company is increasingly pushing price-sensitive customers out of its network.

“Our focus is to provide the best customer experience while increasing profitability and not just chase customer counts,” Stephens said. “Our third quarter results drive that point home. We had our highest ever wireless service [profit] margins at 49.4%.”

In particular, AT&T is sacrificing its low-revenue feature phone customers by cutting back on handset choices and trying to shift certain prepaid customers to the less venerable Cricket brand. AT&T acquired Cricket from Leap Wireless in the spring of 2014. It completed a nationwide shutdown of Cricket’s competitive CDMA wireless network this fall and has pushed Cricket’s current customer base onto AT&T’s GSM network, often at a higher cost to customers.

Stephens reported AT&T Cricket customers now pay nearly $10 more a month than departing AT&T customers that maintained postpaid feature phones until the end of their two-year contracts.

“On the churn, first and foremost, yes, the feature phone churn is hitting us and having an impact on us, and those are decisions we made not to chase those customers,” Stephens informed investors. “[We] can’t make the math work not only on the pricing for those customers but the impact throughout our base.”

Stephens claimed profits are now AT&T’s number one priority.

“We’re going to be focused on profitable growth, not just chasing customer counts or specific targets,” Stephens said. “We’re going to really be focused on just getting the most profits out of the business.”

October 20, 2015

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

New York State’s digital economy is in trouble.

While providers claim portions of New York achieve some of the top broadband speeds in the country, the vast majority of the state has been left behind by cable and phone companies that have never been in a hurry to deliver the top shelf telecom services that New Yorkers need and deserve.

The deregulation policies of the recent past have resulted in entrenched de facto monopoly and duopoly markets with little or no oversight. Those policies, instead of benefiting New Yorkers, are ultimately responsible for allowing two companies to dominate the state’s telecommunications marketplace.

In virtually all of upstate New York, the services consumers receive depend entirely on the business priorities of local incumbent providers, not market forces or customer demand. As a result, New Yorkers face relentless, unchecked rate increases, well-documented abysmal and unresponsive customer service, and inadequate broadband provided by a workforce under siege from downsizing, cost-cutting, and outsourcing.

Certain markets, particularly those in the New York City area, have at least secured a promise of better broadband from Verizon’s FiOS fiber to the home upgrade. But at least 100,000 New Yorkers have languished on Verizon’s “waiting list,” as the company drags its feet on Non Standard Installation orders.[1] In upstate New York, Verizon walked away from its FiOS expansion effort five years ago, leaving only a handful of wealthy suburbs furnished with fiber service while effectively abandoning urban communities like Buffalo and Syracuse with nothing better than Verizon’s outdated DSL, which does not meet the FCC’s minimum definition of broadband – 25Mbps.[2]

Cablevision’s broadband performance dramatically improved because of investment in network upgrades, and the company has been well-regarded for its broadband service ever since.[3] But the proposed new owner of Cablevision – Altice, NV — has sought “cost savings” from cuts totaling $900 million a year, which will almost certainly devastate that provider’s future investments, its engineering and repair crews, and customer service.[4]

At least downstate New York has the prospect for +100Mbps broadband service. In upstate New York, three providers define the broadband landscape for most cities and towns:

• Time Warner Cable dominates upstate New York with its cable broadband service and has the largest market share for High Speed Internet. As of today, Time Warner Cable’s top broadband speed outside of New York City is just 50Mbps, far less than the 1,000Mbps service cities in other states are now on track to receive or are already getting.[5]
• Verizon Communications is the largest ILEC in upstate New York. Outside of its very limited FiOS service areas, customers depend on Verizon’s DSL service at speeds no better than 15Mbps, below the FCC’s minimum speed to qualify as broadband;[6]
• Frontier Communications has acquired FiOS networks from Verizon in Indiana and the Pacific Northwest, and AT&T U-verse in Connecticut. Frontier has made no significant investment or effort to bring FiOS or U-verse into New York State. In fact, in its largest New York service area, Rochester, there are significant areas that can receive no better than 3.1Mbps DSL from Frontier. The vast majority of Frontier customers in New York do not receive service that meets the FCC’s minimum definition of broadband, and some investors predict the company is “headed for financial disaster.”[7]

The competitive markets the DPS staff envisions in its report to the Commission are largely a mirage. When an ILEC like Frontier Communications admits its residential broadband market share “is less than 25% in our 27 states excluding Connecticut,” that is clear evidence the marketplace has rejected Frontier’s legacy DSL service and does not consider the company an effective competitor.[8]

While incumbent cable and phone companies tout ‘robust competition’ for service in New York, if the Commission investigated the market share of Time Warner Cable upstate, it would quickly realize that ‘robust competition’ has been eroding for years, with an ongoing shift away from DSL providers towards cable broadband.[9]

Frontier’s primary market focus is on rural communities where it often enjoys a monopoly and can deliver what we believe to be inadequate service to a captive customer base. The company is currently facing a class action lawsuit in West Virginia, where it is alleged to have failed to provide advertised broadband speeds and delivers poor service.[10]

Verizon’s ongoing investment in its legacy wireline network (and expansion of DSL to serve new customers) has been regularly criticized as woefully inadequate.[11] From all indications, we expect the company will eventually sell its legacy wireline networks, particularly those upstate, within the next 5-10 years as it has done in northern New England (sold to FairPoint Communications) and proposes to do in Texas, California, and Florida.[12] (Verizon also sold off its service areas in Hawaii, West Virginia, and much of its territory acquired from GTE.)

Across New York, service problems and controversial deals between telecom providers have made headlines. Here are just a few:

1. Superstorm Sandy’s impact on Verizon’s legacy wireline network on Fire Island and in other downstate communities left many without service. Instead of repairing the damage, Verizon proposed to scrap its wireline network and substitute inferior wireless service with no possibility of wired broadband.[13] The DPS received a large number of comments from the public and local elected officials fiercely opposed to this proposal, one that Verizon eventually withdrew in the face of overwhelming opposition.[14]
2. There are growing allegations Verizon may be underspending on its legacy wireline network and even worse, may be misallocating costs and revenues to deceive the Commission.[15] Some allege much of the company’s ongoing investments, charged to the wireline operation, in reality are for the benefit of its wireless network. This may have allowed Verizon Communications/New York to claim significant losses on its wireline books the company then argued justified rate increases on ratepayers.[16] A full scale accounting of Verizon’s books is essential for all concerned and corrective action may be necessary if these allegations are proven true.
3. Verizon’s foot-dragging on FiOS buildouts in New York City led to a damning audit report commissioned by New York City Mayor Bill de Blasio this summer and oversight hearings were held last week by the City Council of New York.[17] [18] Despite Verizon’s creative definition of “homes passed,” a substantial number of New Yorkers cannot receive the benefits of “today’s networks” the DPS staff refers to. Instead, many are stuck with poorly-performing DSL or no service at all.[19] Regardless of whether fiber passes in front of, over, in between, or behind buildings, Verizon signed an agreement compelling them to give customers a clear timeline to establish FiOS service. It is apparent Verizon is not meeting its obligations.[20]
4. The proposed sale of Time Warner Cable to Comcast led the Commission’s staff to admit the majority of respondents to requests for public input were strongly opposed to the merger and without substantial modifications concluded would not be in the public interest.[21] Comcast eventually withdrew its proposal in the face of overwhelming opposition.
5. The proposed sale of Time Warner Cable to Charter Communications, where the DPS staff concluded as the application stood, there would be no public interest benefits to the transaction.[22]

Those are just a few examples of why aggressive oversight of telecommunications is critical for all New Yorkers. In most of these examples, the DPS never ruled one way or the other. The companies individually made their own decisions, and we believe they would have decided differently if they did not face grassroots opposition from consumers.

New Yorkers deserve an active DPS prepared to aggressively represent our interests, ready to investigate what Verizon is doing with its legacy wireline network, legacy wired broadband services, FiOS and Verizon Wireless. With Time Warner Cable having such a dominant presence in western and central New York, its sale should never be taken lightly, as it will impact millions of New Yorkers for years to come.

While the DPS seems prepared to passively wait around to discover what Time Warner Cable, Frontier and Verizon are planning next, the rest of the country is getting speed upgrades New York can only dream about.

Google Fiber and AT&T, among others, are aggressively rolling out 1,000Mbps fiber service upgrades in other states, while a disinterested Verizon refuses to invest further in FiOS expansion, leaving millions of New York customers with nothing better than DSL.

The lack of significant competition upstate is why we believe Time Warner Cable has not yet chosen any market in New York except New York City for its Maxx upgrade program, which offers substantially faster speeds and better service.[23] There is no compelling competitive reason for Time Warner to hurry upgrades into areas where they already enjoy a vast market share and no threat of a broadband speed race. So much for robust competition.

Charter’s proposed acquisition of Time Warner Cable proposes a modest upgrade of broadband speeds to 60-100Mbps, but as we wrote in our comments to the DPS regarding the merger proposal, upstate New York would be better off waiting for Time Warner Cable to complete its own Maxx upgrades over what will likely be 100% of its footprint in the next 24-30 months.[24] Time Warner Cable Maxx offers maximum broadband speeds three times faster than what Charter proposes for upstate New York, while also preserving affordable broadband options for those less fortunate. Approving a Charter buyout of Time Warner Cable will only set upstate New York back further.

We confess we were bewildered after reviewing the initial staff assessment of telecommunications services competition in New York. Its conclusions simply do not reflect reality on the ground, particularly in upstate communities.

It was this type of incomplete analysis that allowed New York to fall into the trap of irresponsible deregulation and abdication of oversight that has utterly failed to deliver the promised competition that would check rate hikes, guarantee better customer service, and provide New York with best-in-class service. In reality, we have none of those things. Rates continue to spiral higher, poor customer service continues, and New York has been left behind with sub-standard broadband that achieves no better than 50Mbps speeds in most upstate communities.

This summer, the American Customer Satisfaction Index told us something we already know. Americans dislike their cable company more than any other industry in the nation.[25] A survey of more than 14,000 customers by ACSI found service satisfaction achieving a new all-time low, scoring 63 out of 100.

“Customers expect a lot more than what the companies deliver,” said ACSI managing director David VanAmburg, who called poor customer service from cable operators “endemic.”

This year, Time Warner Cable again scored the worst in the country. As the only cable provider for virtually all of upstate New York, if residents in New York are given a choice between Time Warner Cable and the phone company’s slow-speed DSL, they are still likely to choose Time Warner Cable, but only because they have no other choices for broadband that meets the FCC definition of broadband.

Providers are quick to suggest consumers can turn to so-called competitors like satellite broadband or wireless Internet from mobile providers. They conveniently ignore the fact satellite-delivered Internet is such a provider of last resort, less than 1% of New Yorkers choose this option. Those that have used satellite broadband tell the companies providing it they rarely achieve the claimed speeds and are heavily speed throttled and usage capped.[26] It’s also costly, particularly when measuring the price against its performance.

Mobile Internet, which some ILECs have advocated as a possible replacement for rural wireline networks, is also a very poor substitute for wired Internet access. Wireless broadband pricing is high and usage allowances are low. Attempts to convince New Yorkers to abandon Verizon landline service in favor of Verizon’s 4G LTE wireless replacement have led to consumer complaints after learning their existing unlimited Verizon DSL service would be substituted for a wireless plan starting at $60 a month with a 10GB usage allowance.[27]

A customer with a 6Mbps DSL line from Verizon consuming 30GB of usage a month – hardly a heavy user – pays Verizon $29.99 a month for DSL service during the first year. In contrast, that same customer using Verizon Wireless’ home 2-5Mbps wireless LTE plan will pay $120 a month – four times more, with the added risk of incurring a $10 per gigabyte overlimit fee for usage in excess of their allowance.[28]

None of this information is a secret, yet it seems to have escaped the notice of the DPS staff in its report. Part of the reason why may be the complete lack of public input to help illuminate and counter incumbent providers’ well-financed public and government relations self-praise campaigns. If only actual customers agreed with their conclusions, we’d be well on our way to deregulation-inspired broadband nirvana.

Except New Yorkers do not agree all is well.

Consumer Reports:

Our latest survey of 81,848 customers of home telecommunications services found almost universally low ratings for value across services—especially for TV and Internet. Those who bundled the three services together for a discount still seemed unimpressed with what they were getting for their money. Even WOW and Verizon FiOS, which got high marks for service satisfaction, rated middling or lower for value, and out of 14 providers, nine got the lowest possible value rating.

What is it about home telecommunications that leaves such a sour taste in customers’ mouths? When we asked Consumer Reports’ Facebook followers to tell us their telecom stories, the few happy anecdotes of attentive service technicians and reliable service were overwhelmed by a tidal wave of consumer woe involving high prices, complicated equipment, and terrible service.[29]

The effective competition that would rely on market forces to deter abusive pricing and poor customer service is simply not available in a monopoly/duopoly marketplace. New entrants face enormous start-up costs, particularly provisioning last-mile service.

The nation’s telephone network was first constructed in the early half of the last century by providers guaranteed monopoly status. The cable industry developed during a period where regulators frequently considered operators to be a “natural monopoly,” unable to survive sustained competition.[30] Many cable operators were granted exclusive franchise agreements which helped them present a solid business case to investors to fund a costly network buildout. The end of franchise exclusivity happened years after most cable operators were already well established.

Today, those marketplace protections are unavailable to new entrants who face a variety of hurdles to achieve success. Some are competitive, others are regulatory. Google Fiber, which provides competitive service in states other than New York, publishes a guide for local communities to make them more attractive prospects for future Google Fiber expansion.[31]

For many overbuilders, pole attachment issues, zoning and permitting are significant obstacles to making new service available to residential and commercial customers. New York must ensure pole owners provide timely, non-discriminatory, and reasonable cost access. Permitting and zoning issues should be resolved on similar terms to speed network deployment.

Because a long history of experience tells us it is unreasonable to expect a competing telephone or cable company to enter another provider’s territory, in many cases the only significant possibility for competition will come from a new municipal/co-op/public-owned broadband alternative.

The hurdles these would-be providers face are significant. Incumbent provider opposition can be substantial, especially on a large-scale buildout. In rural areas, incumbents can and do refuse to cooperate, even on projects that seek to prioritize access first to unserved/underserved areas currently bypassed by those incumbents.

The effort to wire the Adirondack Park region is a case in point. Time Warner Cable has refused to provide detailed mapping information about their existing network, making it difficult to assess the viability of a municipal and/or a commercial broadband expansion project into these areas. Time Warner Cable maintains it has exclusivity to granular map data showing existing networks for “competitive reasons,” effectively maintaining an advantageous position from which it can strategically apply for state broadband expansion funding to expand its network using public funds.

Time Warner Cable benefits from access to publicly-owned rights of way and sanctioned easements. Without this access, their network would likely be untenable. As a beneficiary of that public access, making granular map data available to broadband planners is a fair exchange, and nothing precludes Time Warner from building its network into those unserved/underserved areas – something that might deter a would-be competitor’s business argument to overbuild a high-cost, rural area. The Commission should ask itself how many rural New York communities have two (or more) competing cable companies serving the same customers. If the answer is none, Time Warner Cable does not have a valid argument.

There is ample evidence the Commission needs to begin a full and comprehensive review of telecommunications in this state. It must build a factual, evidence-based record on which the Commission can build a case that oversight is needed to guarantee New Yorkers get the high quality telecommunications services they deserve.

Broadband and telephone service is not just a convenience. In September 2015, the Obama Administration declared broadband was now a “core utility,” just as important as telephone, electric, and natural gas service. Isn’t it about time the Department of Public Service oversee it as such?[32]

Respectfully submitted for your consideration,

Phillip M. Dampier

Director, Stop the Cap!

[1] http://stopthecap.com/2015/10/19/n-y-city-council-investigates-verizon-foot-dragging-fios-possible-contract-violations/
[2] http://www.wsj.com/articles/SB10001424052702303410404575151773432729614
[3] https://www.fcc.gov/reports/measuring-broadband-america-2014
[4] http://variety.com/2015/biz/news/altice-group-patrick-drahi-cablevision-bid-1201599986/
[5] http://www.pcmag.com/slideshow/story/310861/if-you-want-gigabit-internet-move-here/1
[6] https://www.fcc.gov/document/fcc-finds-us-broadband-deployment-not-keeping-pace
[7] http://seekingalpha.com/article/2888876-frontier-communications-headed-for-financial-disaster
[8] https://seekingalpha.com/article/2633375-frontier-communications-ftr-ceo-maggie-wilderotter-q3-2014-results-earnings-call-transcript
[9] http://www.leichtmanresearch.com/press/051515release.html
[10] http://www.wvgazettemail.com/article/20141020/GZ01/141029992
[11] http://www.cwa-union.org/news/entry/cwa_calls_for_regulators_to_investigate_verizons_refusal_to_invest_in_landl
[12] http://stopthecap.com/2015/05/05/fla-utility-says-negotiations-with-verizon-make-it-clear-verizon-will-exit-the-wireline-business-within-10-years/
[13] http://money.cnn.com/2013/07/22/technology/verizon-wireless-sandy/
[14] http://documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?Mattercaseno=13-C-0197
[15] http://www.cwa-union.org/news/entry/cwa_calls_for_regulators_to_investigate_verizons_refusal_to_invest_in_landl
[16] http://newnetworks.com/publicnn.pdf/
[17] http://www1.nyc.gov/office-of-the-mayor/news/415-15/de-blasio-administration-releases-audit-report-verizon-s-citywide-fios-implementation
[18] http://arstechnica.com/business/2015/10/verizon-tries-to-avoid-building-more-fiber-by-re-defining-the-word-pass/
[19] http://www.nytimes.com/2015/08/27/nyregion/new-york-city-and-verizon-battle-over-fios-service.html?_r=0
[20] http://www.nyc.gov/html/doitt/downloads/pdf/verizon-audit.pdf
[21] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={0A5EAC88-6AB7-4F79-862C-B6C6B6D2E4ED}
[22] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId=%7BC60985CC-BEE8-43A7-84E8-5A4B4D8E0F54%7D
[23] http://www.timewarnercable.com/en/enjoy/better-twc/internet.html
[24] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={FCB40F67-B91F-4F65-8CCD-66D8C22AF6B1}
[25] http://www.marketwatch.com/story/the-most-hated-cable-company-in-america-is-2015-06-02
[26] https://community.myhughesnet.com/hughesnet?topic_list%5Bsettings%5D%5Btype%5D=problem
[27] http://www.verizon.com/home/highspeedinternet/
[28] HTTPS://www.verizonwireless.com/home-services/lte-internet-installed/
[29] http://www.consumerreports.org//cro/magazine/2014/05/how-to-save-money-on-triple-play-cable-services/index.htm
[30] http://www.citi.columbia.edu/elinoam/articles/Is_Cable_Television_Natural_Monopoly.pdf (p.255)
[31] https://fiber.storage.googleapis.com/legal/googlefibercitychecklist2-24-14.pdf
[32] http://thehill.com/policy/technology/254431-obama-administration-declares-broadband-core-utility-in-report

Canada’s largest wireless carrier and near-largest Internet Service Provider has just become one of Canada’s largest Net Neutrality advocates. How did that happen?

In an ironic move, Alphabeatic reports Rogers Communications today filed a letter with the Canadian Radio-television and Telecommunications Commission that supports a ban on providers exempting customers from usage caps when accessing content owned by the provider or its preferred partners.

The issue arose after Vidéotron, Quebec’s largest cable operator and significant wireless provider, began offering an Unlimited Music service that keeps the use of eight streaming audio services – Rdio, Stingray, Spotify, Google Play, 8Tracks, Groove, Songza and Deezer – from counting against a customer’s usage allowance.

The practice of exempting certain preferred content from usage billing, known as “zero rating,” is a flagrant violation of Net Neutrality according to consumer groups. Rogers now evidently agrees.

“The Unlimited Music service offered by Vidéotron is fundamentally at odds with the objective of ensuring that there is an open and non-discriminatory marketplace for mobile audio services,” Rogers’ CRTC filing said. “Vidéotron is, in effect, picking winners and losers by adopting a business model that would require an online audio service provider (including Canadian radio stations that stream content online) to accept Vidéotron’s contractual requirements in order to receive the benefit of having its content zero-rated.”

The practice of zero rating can steer users to a provider’s own services or those that agree to partner with the provider, putting others at a competitive disadvantage. That is what bothers the Public Interest Advocacy Centre, which calls the practice incompatible with an Open Internet.

Rogers has an interest in the fight. The company owns a number of commercial radio stations across Canada, many that stream their content over the Internet. None are exempt from Vidéotron’s caps.

Rogers’ advocacy for Net Neutrality is new for the company, and ironic. Rogers partnered with Vidéotron and Bell to offer its own zero-rated online video service for wireless customers until last August, when consumer groups complained to the CRTC about the practice.

Rogers may also be in the best position to judge others for the practice while finding a convenient loophole for itself. Its current promotions include free subscriptions to Shomi, a video streaming service, Next Issue, a magazine app, or Spotify, the well-known music streaming service. While Rogers won’t exempt your use of these services from its usage caps, it will effectively exempt you from having to pay a subscription fee for the service of your choice, which could provide the same amount of savings zero rating content would.