Dream On: WildBlue's home page shows a user thrilled about an Internet experience she'll never truly enjoy with a monthly usage limit at low as 2.3GB. Exceed it and face the consequences: WildBlue's Time Out Corner: a speed throttle delivering 128kbps downstream and just 28kbps upstream.

When is broadband not broadband?  When it is delivered by hopelessly overloaded and underpowered satellite providers that annoy their subscribers with high prices and low usage allowances.

For many customers of WildBlue and HughesNet, getting high speed Internet access remains a far off dream. No broadband Internet service is more rationed and speed throttled than satellite “fraudband.”

Most satellite broadband customers live in America’s most rural areas, literally miles away from the nearest telephone exchange and often hundreds of miles away from a town with cable broadband.  Even wireless Internet providers can’t find enough customers to justify the costs of delivering service.

For America’s most rural, there are three choices:

1. Go without.
2. Use dial-up service.
3. Choose the least annoying satellite provider you can afford.

Just over one million Americans have stuck it out with choice number three, paying twice as much wired Americans pay for broadband and getting just a fraction of the speed and use.

But both providers claim that is all about to change.

WildBlue and HughesNet are in a hurry to launch brand new satellites with dramatically improved capacity that will deliver, they claim, “speeds as fast as fiber.”

For Stop the Cap! reader Adele in a rural part of Arizona, she’ll believe it when she sees it.

“As Stop the Cap! has said all along, anyone who thinks satellite ‘broadband’ is a useful alternative to DSL or cable Internet should be condemned to use it,” she writes.  “Everyday brings a new frustration, especially with so-called ‘Fair Access Policies’ that effectively restrict your use to web page browsing and e-mail.”

HughesNet explains how their satellite service uses your satellite dish to send and receive Internet data. (click to enlarge)

For many people running Microsoft Windows, the company’s monthly gift of bug fixes, service packs, and updates is just a minor nuisance. For satellite Internet customers, it can sometimes mean the “day of no Internet.”

Adele explains:

If you have multiple computers and Microsoft determines it has a lot of screw-ups to fix, the monthly updates can easily run into the hundreds of megabytes when every computer receives their individual updates.  HughesNet’s “budget” Home and Pro Plans cost up to $70 a month and only include a daily allowance of up to 300 megabytes.  It’s no trouble at all to exceed that usage on increasingly large web pages loaded down with video advertising, pop-ups, and other content.  Now deal with Microsoft Update Day and in our house, that means you get a good book and stay offline.

If she doesn’t, HughesNet inflicts a stinging punishment — 24 hours in the time out corner with barely dial-up speed penalties for exceeding the limit.

But both satellite providers promise better days ahead when their newest satellites are launched into space.

The New York Times notes WildBlue’s next generation of satellites will bring 10 times the capacity of its three current satellites combined.  That opens the door for faster satellite broadband, according to both companies, without price increases.

HughesNet believes satellite broadband’s best days lie ahead, especially as a contender in the rural broadband market.

“One advantage satellite has is ubiquity,” Arunas G. Slekys, vice president for Hughes Network Systems, said. “The cost of reaching you with a satellite dish is independent of where you are. Fiber or cable is labor-intensive and dependent on distance.”

As to satellite’s potential in rural regions, “clearly, there’s an unserved market,” Mr. Slekys said. “And it’s not as though they have terrestrial or satellite. They only have satellite as a choice.”

Can a new generation of satellites save satellite broadband?

One question the Times didn’t ask is whether increased capacity will mean the end of so-called “Fair Access Policies” that strictly ration the amount of browsing customers can manage before the speed throttle punishment begins.  Neither company is saying.

“When pigs fly,” Adele thinks.  “Sometimes these satellite companies think rural people are just plain stupid.  When you live this far out in the country, you learn to recognize snake oil salesmen when you see them.  Why give us more access when nobody else will provide the service?”

The sudden interest in satellite broadband in the nation’s paper of record is no coincidence.  Both HughesNet and WildBlue are upset they are not getting a bigger piece of the broadband stimulus pie.  The Times notes just $100 million out of $2.5 billion in U.S. Department of Agriculture grants for rural broadband will go to satellite companies.  Raising the question in a newspaper widely read in Washington can’t hurt your cause.

Thomas E. Moore, chief of WildBlue, said satellite technology would be able to serve thousands more rural residents than terrestrial services at a fraction of the cost. He cited a $28 million grant to a nonprofit group in North Carolina to extend fiber to 420 schools and libraries. That same grant could have instead directly served 70,000 residents in North Carolina through satellite service, Mr. Moore said.

“For every one of those people, there are literally hundreds more who won’t have access to stimulus funds,” he said.

But Joseph Freddoso, president of MCNC, the nonprofit group that manages North Carolina’s public education technology network, said satellites were not an ideal primary service for his users, who require a more reliable network for their research and data-heavy applications.

“To compare what we do with what satellite does as a service is an apples-to-oranges comparison,” Mr. Freddoso said, adding that the grant will serve one million students in 37 counties.

Adele is concerned that means even more people will fight for the limited resources satellite has until the next generation of satellites get launched, especially for rural customers trying to share a spot beam in North Carolina.

“These companies have really stopped heavily promoting themselves in parts of rural America because both are already at or over capacity in many places,” she says. “The advertised speeds for some parts of the country are straight out of Alice in Wonderland — total fiction, and with the lag time that comes naturally from sending and receiving data over a distance of 22,000 miles, it’s not getting any better.”

Adele is referring to the satellite providers’ regionally-directed signals.  Much like how satellite TV companies can deliver local stations within limited regions of the country, satellite Internet service can be divided up and delivered to certain parts of the United States.  One beam might serve rural Louisiana, another could be directed to northern California, and so on.  Once a region’s capacity nears saturation, speed and performance suffers.  In areas where capacity remains underused, the service performs better.

Regardless of the promises for enhanced satellite broadband, most cable and fiber broadband providers spend no time pondering the competitive impact, because there is none.  They plan to continue ignoring the likes of WildBlue and HughesNet for years to come.

Kevin Laverty from Verizon told the Times their FiOS fiber network is expensive to deploy but is light years ahead of satellite when it comes to speed and easy upgrades.

“Fiber optic is virtually an unlimited technology,” he said. “All you have to do is change the electronics on either end.”

A spokesman for Time Warner Cable said cable broadband speeds already easily exceed the satellite providers’ proposed new speeds, so they have nothing to worry about.

For most satellite customers, WildBlue and HughesNet are not choices, they are realities if rural Americans want to participate in the broadband revolution.

“Nobody chooses these satellite providers over DSL, cable, fiber, or even most wireless ISPs,” Adele says. “They choose satellite because of the absence of these other providers.”

Should Adele’s local phone company offer her DSL or a wireless broadband provider arrive to deliver service, would she switch away from HughesNet?

“In a shot,” she says. “I dream about throwing their dish into the biggest bonfire I can build and then my neighbors and I visit their headquarters to horse-whip them for years of horrible service and throttled speeds.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Satellite Fraudband.flv[/flv]

We’ve assembled some examples of advertising for both HughesNet and WildBlue, typically seen on networks catering to rural Americans, a brief interview with a representative from WildBlue, and some actual customer… uh… “testimonials” about the quality of service actually received.  Finally, we’ve included the most painful speed test ever encountered.  The original video was silent and some might think it’s actually stuck.  It’s not.  We’ve added some music to spice things up or to increase your pain and suffering.  You might want to get a piece of cake for this. Oh, and one last thing:  If you are using a satellite provider to access Stop the Cap!, forget about the video.  Watching it will eat almost a quarter of your daily usage allowance.  (6 minutes)

Qwest, the former-Baby Bell serving the upper midwest, mountain west, and desert states got caught on tape telling customers the company’s intent is to eliminate competition from independent Internet Service Providers by banning them from their network.

One such ISP, XMission, has blown the whistle on the anti-competitive practice, noting they could potentially be run out of business if Qwest manages to keep them from delivering competitive service over Qwest’s upgraded partly-fiber network.

In 1997, XMission first started providing service over Qwest’s DSL.  We have literally paid millions of dollars of revenue to Qwest for the privilege, all the while relieving them of the difficult task of providing excellent customer support.  In 2008, Qwest launched their “Fiber-to-the-Node” product which is usually falsely advertised as just plain “fiber”.  Unlike the UTOPIA system which runs fiber optics all the way to the home, Qwest FTTN runs fiber to a neighborhood, then copper DSL lines to the customer.  Because of the subsequent shorter distances on copper, they are able to attain download speeds of up to 40Mbit to the customer and 5Mbit from the customer.  This is normally referred to “download” and “upload” respectively.

There is one key difference in the FTTN product.  Qwest is not not allowing 3rd party ISPs like XMission to sell their own service over it, as we traditionally have with their first DSL product.  In addition, Qwest has been notorious for disinformation and service problems that motivate customers to drop their current ISP and change over to Qwest.  Technical problems exist, such as radio interference that degrades existing XMission customer DSL speeds, sometimes making their Internet connection unusable.  The solution offered by Qwest was not to shield the radio interference, but to switch customers off XMission and to their own product.  We have also had reports and in one case, a recording, of Qwest sales representatives telling customers that Qwest’s intent is to “eliminate” 3rd party ISPs.   Today, I received an email from a customer who was told by Qwest that XMission’s equipment is “too slow” to handle FTTN service.  Considering that we service customers on fiber and in our data center with up to a gigabit in solid bandwidth, one has to wonder why Qwest feels the need to lie to sell their service.  There is no technical reason why Qwest could not allow 3rd party ISPs like XMission to provide service over their FTTN network.

XMission has been hemorrhaging DSL customers for the past year, and I really don’t blame them for looking for bigger Internet connections.  I personally can only get 3Mbit download and 500Kbit upload to my own home and it is not enough bandwidth for me.  With Netflix, Hulu, Youtube, and other services demanding more and more bandwidth, homes will need larger and larger connections.  Unless they’re in a UTOPIA connected city, chances are that they are going to choose from two companies to buy Internet from in the future, neither of them stellar.

UTOPIA is Utah’s publicly-owned fiber optic platform delivering competitive choice to residents of 16 Utah cities.  Residents enjoy true fiber optic service and can select from 11 different Internet Service Providers, each offering their own speed levels, bundles, and pricing.  How many ISPs can you choose from?

Qwest’s newest network upgrades deliver service somewhat comparable to AT&T’s U-verse — faster broadband through a hybrid fiber, copper phone line-based network.  Qwest also sells traditional DSL service over standard phone lines, including so-called “dry loop” service that delivers broadband service without also buying a phone line.  While competing providers can sell service over many of Qwest’s DSL lines, they have been barred from selling access over these new, faster-speed lines.

Customers have been unimpressed with Qwest’s traditional DSL services which often promises far more than it actually delivers.

Alex Langshall in South Salt Lake was guaranteed 7Mbps DSL service from Qwest, but ended up with only 640kbps.  The reason?  His distance from the central office and the deteriorating quality of Qwest’s landline network.  Qwest’s technicians told Alex even after line conditioning and rehabilitation, he would only get 1.5Mbps service.

XMission publicized this recording between Qwest and one of their customers about the phone company’s intentions for independent ISPs on their network (July 21, 2010) (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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The firebrand Rep. Alan Grayson (D-Florida), normally a plain-spoken kind of guy, has managed to tie himself into a human pretzel over the issue of Net Neutrality.  In less than a week, he’s adopted every side of the issue as his own.

Grayson shocked many of his supporters last week when he signed on with AT&T, Verizon, and Comcast to pressure the Federal Communications Commission not to regulate Internet principles like Net Neutrality.

Grayson’s increasingly high profile in the Democratic party and his hero status among many progressives made his allegiance to big telecom stick out like a sore thumb.  Liberal blogs immediately blasted Grayson’s decision to side with the “you can’t use my pipes for free” crowd.  Some bloggers called his position “curious” while others accused him of selling out.

Grayson has been engaged in damage control ever since.

His letter to the FCC echoed earlier letters from Democrats hostile to broadband reform (but receptive to campaign contributions from the phone and cable companies).  But Grayson insists he has been misunderstood.

The Orlando Democrat told the Huffington Post that he is in favor of Net Neutrality and that his alliance with the telecom industry is a coincidental case of “strange bedfellows.”

“I say in the letter that I support the policy of Net Neutrality. I don’t know how I could be more explicit than that,” he told HuffPost. “There is a question, though, of how to reach that conclusion, and it’s a legitimate question. My own feeling is that we should not allow a matter like this to be resolved by regulation, because regulations can be changed very easily. We saw this all the time with the Bush administration. I think it is preferable to have the principle of net neutrality enshrined in statute.”

Grayson

Grayson’s position does not make sense to many Net Neutrality advocates who do not understand why Grayson cannot be supportive of both regulatory reform and legislative changes.

“I think Grayson is mistaken to think that good Net Neutrality legislation could come out of this Congress. And certainly he’s mistaken to think that good Net Neutrality legislation would come out of the next Congress,” said Tim Karr of Free Press.

Karr told HuffPost he hoped Grayson would note conservative bloggers are in love with the congressman’s position on Net Neutrality and rethink his position. “Given that Grayson is considered a progressive lion in the House of Representatives, that the people who routinely vilify him are now seeing him as a champion should make him think twice,” he said.

Grayson argues that getting the FCC to reform broadband and make Net Neutrality a formal agency directive would be a waste of time because Republicans would simply throw it out the next time they occupy the White House.

For many Net Neutrality advocates, that kind of defeatist attitude is symbolic of a problem Democrats have long faced — the impression they’ll cave-in when challenged by Republicans.

Marvin Ammori, a law professor at the University of Nebraska:

“What he’s implying is that Republicans actually do what they want to do and implement the policies they want and Democrats don’t,” said Ammori. “It sounds like they’re unwilling to change regulations because they’re worried Republicans will change them back… It just highlights that Republicans are willing to change the law and Democrats aren’t.”

Perhaps most upsetting to Net Neutrality supporters is Grayson’s belief that many phone and cable companies support Net Neutrality, at least how they define it.

Ammori thinks that is nonsense, and easily dismissed as lip service when one considers the actions of the telecom industry.

“If they supported Net Neutrality, we’d have it by now,” he said. “They’ve spent hundreds of millions fighting against Net Neutrality… This is part of their pitch: ‘We don’t plan on blocking anything on the Internet. We just want the right to do so’… He’s essentially crediting their PR claims.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/MSNBC Alan Grayson on Net Neutrality.flv[/flv]

Grayson faced questions about his position on MSNBC about his Net Neutrality views, and was lectured by progressive talk show host Cenk Uygur.  Grayson called the FCC “a fundamentally corrupt organization.”  (2 minutes)

Opelika residents who cast votes in Tuesday’s special referendum on cable competition delivered a decisive “yes” to city officials seeking to build a fiber to the home cable and broadband system in the city.

Although the turnout was just 18 percent, 62 percent of residents voting voted for the system’s construction, 38 percent said “no.”

For most of the supporters of the project, it was about delivering a resounding message to Charter Cable that their days of endless rate increases and sub-standard service in eastern Alabama were over.

Opelika mayor Gary Fuller was excited by the outcome of the vote.

“It’s a great day for Opelika. It’s a great day for our future. It’s a terrible day for Charter,” he told a crowd waiting to hear the mayor’s reaction to the results of the special referendum.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Opelika Votes Yes Cable Competition 8-10-10.flv[/flv]

The Opelika Auburn News captured some of the remarks from Opelika Mayor Gary Fuller announcing the results of the referendum.  (4 minutes)

Fuller has been complaining about the lack of cable and broadband competition in Opelika for years, noting residents regularly complain about Charter Cable’s prices and service.

Fuller

Part of the drive to look for alternatives may have come from watching a cable overbuilder, Knology, installing a $20 million fiber network down the road in nearby Auburn.

While Knology does compete with existing cable providers in many cities, it often takes years for the company to deliver service to every residence, if ever.  In fact, Knology is most commonly found in multi-dwelling units like apartment buildings, condos, and new housing developments where construction costs are lower.  Fuller proposes to build a network that will serve everyone.  The city will negotiate with companies like Knology to use the new fiber network to provide service to residents.

“I believe that this is the most amazing thing that any of us as elected officials will ever do during our service in the city of Opelika, because of what it will mean to our future especially with high speed Internet that will be a calling card for high paying jobs in new industries for Opelika,” Fuller said.

Charter Cable fought hard to stop the network, but wasn’t always accurate along the way.

Skip James, Charter Communications government relations director, claimed other municipal networks were financial failures.

“It has been repeatedly demonstrated that when cities or municipal-owned power companies enter the video/data/phone business, it usually ends up costing the taxpayers at least twice as much as the consultant had suggested,” James said. “It also has resulted in many municipalities selling off the networks at significant losses or walking away from further operation of the network.

“After the initial system cost, the city has to stay abreast with the competition and changes in the marketplace by investing more money in costly upgrades. This is a high risk of taxpayer money, since the taxpayers are generally not aware that they have the ultimate responsibility for payment and/or default on the huge bonds to build and upgrade the system.”

Of course, many municipal systems are up, running, and profitable for the communities they serve.  Construction delays and costly lawsuits from incumbent providers can delay such projects and boost costs, but since Opelika’s system will be built with revenue bonds, which are paid back through generated revenue, taxpayers cannot be left responsible for payments or defaults.

James could not understand why the city would want such a network when Charter was already serving the community.

“Our communications system is in front of almost every house and business in the city of Opelika,” James said. “Why would the city want to risk so much taxpayer dollars and go into this much debt when a network already exists that can provide services the customers want at a much lesser cost?”

Opelika residents who wanted an alternative to Charter may have just voted their answer.

City officials will seek bids for construction work in the near future.  Operations will be run by Alabama Light and Power.

There were a total of 2,819 ballots cast. Here’s how they broke down according to ward:

• Ward 1: 211 yes, 54 no
• Ward 2: 236 yes, 86 no
• Ward 3: 368 yes, 333 no
• Ward 4: 443 yes, 228 no
• Ward 5: 492 yes, 368 no
• Absentee ballots: 14 yes, 7 no

[flv]http://www.phillipdampier.com/video/WTVM Columbus GA Opelika Cable Controversy and Vote 8-10-10.flv[/flv]

WTVM in Columbus, Georgia covered the story of Opelika’s journey to build their own fiber network.  (5 minutes)

The implications of the deal between Google and Verizon were colorfully explored on last Thursday's 'Countdown With Keith Olbermann' on MSNBC.

A progressive group has collected more than 300,000 signatures protesting talks between Google and Verizon to establish a “separate peace” on Net Neutrality while throwing the rest of America’s open Internet under the bus.

The Progressive Change Campaign Committee joined forces with groups like MoveOn.org, Color of Change, Free Press, and Credo Action to launch an emergency petition to Google to get them to back away and rethink their deal with Verizon.

A package containing the signatures was delivered to Google’s offices in Washington, but another trip may be necessary as the group claims it has collected nearly 50,000 additional signatures since Monday.

The groups are calling for strong Net Neutrality policies to be enacted and enforced to preserve the open Internet.

Support for Net Neutrality comes from a diverse mix of Americans, from Barry Diller, who founded Fox Broadcasting to progressive MSNBC host Keith Olbermann.

[flv width=”596″ height=”356″]http://www.phillipdampier.com/video/MSNBC Olbermann Silver Net Neutrality 8-5-10.flv[/flv]

Free Press’ Josh Silver appeared on Thursday’s edition of MSNBC’s Countdown With Keith Olbermann to explore the implications of a non-Net Neutral Internet.  (7 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CNN Why Diller pushes for net neutrality 7-27-10.flv[/flv]

CNN talked with Fox Broadcasting founder and media mogul Barry Diller about his strong support for Net Neutrality. (4 minutes)