Residents of Auburn, Alabama will one day have a choice for cable television service. Incumbent cable company, Charter Cable, which has been in bankruptcy, will eventually face competition from Knology, a cable “overbuilder” servicing more than a dozen cities in the southeastern U.S.
The Auburn City Council unanimously agreed Tuesday night to begin a non-exclusive cable franchise agreement with Knology, based in West Point, Georgia. The cable company already serves several other Alabama communities including Dothan, Huntsville, Lanett, Montgomery, and Valley, and expects approval to construct a system in nearby Opelika shortly.
The decision to bring competition to the city of 56,000 was an easy one because residents demanded more choice:
“Thank goodness this has finally happened. It is time that people in this area had a choice regarding their cable. Charter has provided poor customer service as well as poor cable and internet service for years. I am surprised that my internet has stayed up long enough for me to type this!” — psych1
“This makes my day, now all we need is for satellite to have rights to the local channels and we’ll truly have the competition and choice we deserve…this is a huge step though!” — Matt
“I will dump Charter the second Knology is here.” — lp95
“Now we just need this in Opelika. I hate Charter with all my being.” — jackburnt
“Thank Goodness! Charter is surely the worst cable company in history. I hope nobody reading this fell for their BS “contract” pricing lately. They knew this was coming and tried to tie folks down for at least another year. This is truly a victory for the people of Auburn.” — tboone
“I am glad to see competition is coming in,” Ward 1 council member Arthur L. Dowdell told the Opelika-Auburn News. “I wish there was more coming in.”
One question remains on the table — When will Knology commence service in the area?
Chad S. Wachter, general counsel for Knology, said he didn’t know when Knology will be available for city residents.
“We’ll provide those answers with the city when we get them,” he said.
Ward 7 council member Gene Dulaney, the News noted, encouraged Wachter to build as fast as possible.
Charter Cable representatives followed the usual playbook cable operators use when competition is imminent.
Skip James, Charter’s director of government relations, addressed the council during citizens’ communications to express the company’s support for competition.
“We competed with Knology in the past and we will continue to in the future,” he said.
Knology provides customers with cable television, telephone and broadband services. Most of their systems offer broadband at around 8Mbps and there doesn’t appear to be a limit. Knology is quietly upgrading their systems to DOCSIS 3 to provide “wideband” service, cable’s designated turn of phrase for next generation broadband speeds. But the company is also following a familiar pattern of not spending the money to upgrade where competitive pressure doesn’t exist.
Knology chairman and CEO Rodger Johnson told investors during a 1st quarter 2009 earnings call that the company was prepared to upgrade, but isn’t going to jump the gun.
“We are enabling our markets to deliver Docsis 3.0 when we decide the time is right to push the trigger,” Johnson said. “A very expensive piece of that proposition is the transition of the cable modems to 3.0 cable modems. We will make that move at the time that we’re feeling competitive pressures to move to a 3.0 environment, but not until that time.”
Johnson should be careful about waiting too long. Pinellas County is one of Knology’s service areas in Florida, and it has Verizon FiOS and Bright House Networks fighting for customers in an upgrade war Knology cannot win with slower broadband.
Hong Kong Broadband Network, the wholly owned subsidiary of City Telecom, has just slashed the price for its 100Mbps “bb100” fiber optic broadband service. When a customer finds a friend willing to sign up, both will receive the broadband service for $13 US per month for 24 months, which represents a 50% discount for each customer.
At this price, Hong Kong residents pay just $0.06/megabit-per-second, which includes a speed guarantee that customers will receive at least 80% of advertised speed when surfing domestic websites.
William Yeung, Chief Executive Officer of HKBN noted that at least 32% of Internet users in Hong Kong suffer from broadband speeds below 10Mbps, and the Hong Kong special administrative region of the People’s Republic of China lags behind Korea and Japan in terms of fiber to the home service, something Yeung would like to see changed.
He considers Hong Kong’s broadband development rating “comfortably enjoying today’s applications” to be inadequate, and wants to see Hong Kong have universal access to 100Mbps or greater speed broadband.
“Being the second largest broadband service provider, we have a duty to improve Hong Kong’s global standings,” Yeung said.
HKBN provides speeds up to 1Gbps in Hong Kong over its fiber optic network. Hong Kong’s broadband ranking is important to the region for economic reasons, attracting new industry and high paying technology jobs with fast, affordable broadband service.
What Hong Kong considers inadequate is still well ahead of the United States, which continues to lag behind several Asian nations in constructing advanced high speed broadband platforms.
Hong Kong’s population density, which poses a challenge for some services, is actually a benefit for telecommunications, because construction costs are lower when wiring densely populated multi-dwelling units and apartments.
The company currently has 391,000 broadband customers, attracted to the company in part by their creative advertising campaigns.
[flv]http://www.phillipdampier.com/video/HKBN Member Get Member Promotion.flv[/flv]
HKBN makes Hong Kong’s population density a net plus for fast, affordable broadband. William Yeung announces “Member Get Member Promotion” from HKBN and unveils new advertising campaign. (3 minutes)
Several weeks ago, Stop the Cap! included several HKBN ads for your review. We’ve now obtained English subtitled copies to share, below the jump.
It’s appropriate that it is snowing heavily in Denver as attendees of the Society of Cable Telecommunications Engineers meet at Cable-Tec Expo ’09, under the banner “Touch the Technology.”
Yesterday’s Technology Leadership Roundtable, according to Lightwave’s Steven Hardy, was reserved for out of touch Verizon fiber bashing:
The title of this morning’s Technology Leadership Roundtable was “Enough Already!” “Enough of what?” you ask. Answers the roundtable description: “Growing a little weary of all that FiOS in your face?” The short answer, not surprisingly, is yes. Roundtable moderator Leslie Ellis (Ellis Edits LLC) opened the discussion by asking whether the cable-TV community should be defensive about the fact that it hasn’t fully embraced FTTH — particularly since the industry invented video over fiber and carries more video over fiber than anyone else.
Much pooh-poohing of FTTH and telcos ensued. Paul Liao, president and CEO of CableLabs, said that the MSOs are the big dogs when it comes to video and becoming big dogs in voice delivery — and when you’re a big dog, you’re going to attract competitive attention.
Dermot O’Carroll, SVP, engineering and network operations, at Rogers Cable Communications up in Canada, asserted that fiber “doesn’t do much” for voice or video (I assume he meant fiber access versus HFC) and perhaps only a little bit when it comes to Internet access. This last shortfall should go away with deployment of DOCSIS 3.0, he said.
Liao agreed that DOCSIS 3.0-enabled HFC should prove more than adequate for customer needs today and into the future, adding that DOCSIS 3.0 should enable more bandwidth than anyone will ever need. (This sounds like one of those “eat your words in 10 years or less” statements, but Liao is certainly smarter than I am and more versed in DOCSIS 3.0 capabilities.)
Meanwhile, at least two workshops later in the week will discuss how to migrate HFC networks to FTTH. It doesn’t hurt to hedge your bets, apparently. Getting a better understanding of how MSOs really feel about FTTH is one of my goals here.
The cable industry has routinely confronted the threat of fiber optics by dismissing it as irrelevant wizardry until they are forced to upgrade their networks to try and match the capabilities a well run fiber to the home system can provide. Broadband service with equal upload and download speeds on cable? Not so much. The sheer bandwidth potential of fiber optics? Quite nice, thank you. The potential for Verizon FiOS to be positioned to meet the current and future needs of customers without a lot of expensive upgrades? Very high, assuming it’s priced competitively.
Fiber bashing snowjob from Time Warner Cable
Rogers Cable has a point when they dismiss fiber’s potential for broadband. That’s because the company treats its customers to a host of Internet Overcharging schemes which provide blazing fast speeds that customers can’t use for very long without facing overlimit charges on next month’s bill. Few companies want to provide robust video broadband service in a country where such usage limits and other schemes prevail from Vancouver to St. John’s.
LUS Fiber - Lafayette, Louisiana's public utility municipal broadband provider, offers fast speeds with great rates
Frustrated communities across America, take note.
If your town or city government starts making serious noises about constructing your own, municipally-owned broadband network (especially one built with fiber optics to the home), existing providers who have repeatedly said “no” to requests for faster service at more reasonable prices have a track record of quickly turning around and saying, “yes — why didn’t you ask us before?”
Big existing telecommunications players loathe the thought of facing a new competitor in their midst. They are accustomed to the usual arrangement of one cable operator and one phone company. Cable companies provide cable modem service, phone companies mostly provide DSL. In smaller cities, and where a competitor is missing (or provides a lower quality service), there is almost no drive to upgrade. Cable will set speeds just above what the phone company is offering, and both will co-exist happily ever after.
For communities being bypassed by the fiber revolution now underway by Verizon, and to a lesser degree AT&T, requests from civic leaders, businesses, and consumers for upgraded service fall on deaf ears. ‘What you have now is good enough for this market, so be quiet and be lucky we give you what you’ve got now. Oh, and we’re raising rates, too.’
In Rochester, the one upstate New York city not on the “to-do” list of Verizon (which is merrily wiring urban and suburban communities across their service areas with fiber optic cable FiOS), Time Warner Cable sees little incentive to raise speeds or upgrade to DOCSIS 3 with a phone company competitor that has no apparent plans to move beyond traditional old school DSL service. Where FiOS does threaten, Time Warner Cable is in a hurry to provide “wideband” broadband as quickly as possible.
In Wilson, North Carolina, years of pleading from local officials to provide something beyond anemic broadband in their community was met with yawns from Time Warner Cable and Embarq, the local phone company. Wilson decided to build their own municipal fiber network, offering faster speeds at better pricing. Time Warner and Embarq did what most existing competitors do — they moved through the Four Stages of Telecommunications Competition Grief:
1) Behind the Scenes Threats and Anger: Companies work the phones with local officials trying to browbeat them into dropping the plans to construct municipal broadband, try to gin up partisan opposition, issue overinflated cost estimates, issue warnings about the trouble they’ll cause local politicians who support such initiatives, and snow a blizzard of documents illustrating how wonderful and reasonable their existing service is;
2) Stall Tactics Through Negotiation: Once home office is notified, a series of negotiations to attempt to forestall the project begins, such as throwing crumbs for incrementally better service, offers to build showcase mini-projects that represent a “win” for local politicians, or “looks good on paper” concessions that end up amounting to far less. Most of these discussions are designed simply to stall to allow the company to prepare for stage three.
3) PR and Legal Blitzkrieg: Assuming local officials haven’t been discouraged away from their idea, or dropped it after starring in a company-sponsored press event – ribbon cutting a small wi-fi or school connectivity project, the next stage is a multi-front battle involving company legal teams filing lawsuits to delay or kill projects, public relations and astroturf lobbying efforts to distort issues and build public opposition, legislative maneuverings to make such projects untenable through industry-friendly laws, and often vague promises about impending upgrades making the entire project unnecessary.
4) Acceptance, Competition, and Better Service: The final stage is the realization consumers don’t always get suckered by astroturf groups and company scare tactics. They accept the project is moving forward, and send out the press release saying they welcome the competition and are announcing their own significant service upgrade because “customers asked for it.” Price increases slow, speeds increase, and service improves, all because of the reality that an aggressive competitor is in their future.
Wilson city officials tried negotiations for better service, got nowhere, and had to fight back against a blizzard of nonsense from the telecommunications industry trying to legislate such projects out of existence with changes to state law. Americans for Prosperity, an astroturf group, even hassled residents in other nearby communities with robocalls to try and stop similar projects.
Chattanooga’s public power utility fought back against telecommunication company propaganda to construct fiber to the home service across the city, which launched this year. (5 minutes)
In Monticello, Minnesota, local telephone company TDS had spent years refusing requests to improve service in the city. Speed and access issues plagued the community, northwest of Minneapolis. Local officials had enough and voted to construct their own fiber to the home municipal network.
Enter the four stages. TDS started by telling city officials the company’s network was state of the art for Monticello, and couldn’t be immediately improved because there was insufficient return on investment. Companies want to be assured they are paid back for investments they make, and because Monticello is a relatively small city, there were questions whether the costs for a fiber network would be paid back quickly enough through revenues.
When that didn’t work, the company sued the city as a stalling tactic. Despite the fact Monticello won case after case, TDS kept filing. A full assault by large telecommunications interests also began, trying to gin up public opposition. While the project was approved by voters, and Monticello was tied up in court, TDS quickly moved to stage four and started rapidly building their own fiber network in Monticello, actually putting down fiber the city was prohibited to wire themselves as the lawsuits dragged through the courts.
The company told Ars Technica that despite its earlier refusals to provide fiber service, TDS didn’t act earlier because it didn’t actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.
Then, in June, the company said with the advent of its own fiber network, the city of Monticello should back away from constructing theirs, because its economic viability report was partly premised on the fact TDS refused to provide that service.
To underline that, TDS’ new fiber network doubled customer speeds to 50Mbps, trying to keep customers from taking their business to FiberNet Monticello.
[flv]http://www.phillipdampier.com/video/Vote Yes on Fiber.mp4[/flv]
Lafayette staged a multi-year battle with Cox and other providers to bring municipal fiber broadband to it’s corner of Louisiana. This 30 second ad promoted a “yes” vote on the project.
In Louisiana, Cox Cable is facing accusations it’s engaged in predatory pricing to kill Lafayette Utility System’s fiber to the home network and EATel’s fiber network in Ascension Parish. Cox Cable froze rates and moved in with DOCSIS 3 upgrades, delivering up to 50Mbps service. Cox chose to upgrade Lafayette before any other Cox-served community.
The Lafayette Pro-Fiber Blog found this EATel billboard taunting Cox
EATel, an independent phone company that wired fiber across Ascension Parish, also faced down Cox. When the cable company began promoting cut-rate pricing in Ascension, EATel took out advertising promoting Cox’s special prices — in other cities, much to Cox’s consternation. EATel’s ads, much like those run by Novus against Shaw in British Columbia, tell Cox’s customers to call the company and ask for the lower price they are advertising elsewhere.
“Cox came in with an incredibly aggressive promotion for TV service with every bell and whistle you could imagine. We couldn’t figure out how they could even make money on it. So we took out an ad in the Lafayette newspaper that basically said, ‘Hey Lafayette, look at the great prices you are going to get from Cox.’ Cox was not amused,” Trae Russell, communications manager for EATel told Telephony Online.
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p style=”text-align: center;”>Joey Durel, Jr., president of Lafayette parish, testifies before the House Committee on Energy and Commerce on Lafayette’s municipal fiber network on February 27, 2008. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
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Lesson learned — just threatening to bring in a municipal competitor is often all it takes to turn a persistent “no” from the local cable and phone companies into “yes, Yes, YES!”
Of course, not every project is successful. Some, such as Burlington Telecom Stop the Cap! reported on yesterday face political and cost challenges. Others are killed through stage managed opposition and astroturf campaigns paid for by the telecommunications industry before they even get started.
In North St. Paul this year, “PolarNet,” a planned fiber optic broadband network to stimulate the local economy was killed by an astroturf propaganda campaign undertaken by Qwest, Comcast, and other telecommunications companies that would have to deal with PolarNet as a competitor. The telecommunications companies claimed it would result in higher local taxes and “more government” where it wasn’t needed. Citizens defeated the proposal 67-33%.
Windom, Minnesota faced similar challenges and their fiber project was shot down in 1999, but with lessons learned, proponents brought it back up and won in 2000. To this day, the community of 4500 in western Minnesota face considerable envy from adjacent communities — they want service from the fiber-to-the-home system as well.
Almost universally, opponents to municipal broadband systems claim they are financial failures and saddle communities with debt. In reality, most have forced those opponents to provide improved service in their competitive communities, or those companies will become the financial failure.
[flv width=”427″ height=”240″]http://www.phillipdampier.com/video/Terry Huval of Lafayette Utility System April 2009.flv[/flv]
Terry Huval of Lafayette Utility System talks with the Fiber Revolution blog about the challenges Lafayette experienced building their own municipal fiber network. Huval offers excellent advice for other municipalities exploring similar projects. (April, 2009 – 10 minutes)
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p style=”text-align: left;”>Thanks to Stop the Cap! readers Tim and Matt who suggested this story idea.
Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about. Members of Broadband for America Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to […]
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Knology provides customers with cable television, telephone and broadband services. Most of their systems offer broadband at around 8Mbps and there doesn’t appear to be a limit. Knology is quietly upgrading their systems to DOCSIS 3 to provide “wideband” service, cable’s designated turn of phrase for next generation broadband speeds. But the company is also following a familiar pattern of not spending the money to upgrade where competitive pressure doesn’t exist.
