The Mountain Pointe subdivision, northwest of Cleveland, Tennessee

The rural broadband divide doesn’t just impact the middle class.

Residents of the affluent Mountain Pointe subdivision in Cleveland, Tennessee (any neighborhood with an extra “e” on end of the name always spells money) are unhappy to find a home life without broadband service.  Like many wealthy enclaves set outside of clustered suburban neighborhoods, homes are too few and far between in the subdivision, making it too expensive for Charter Cable to wire service there.

Charter Communications Director of Government Relations Nick Pavlis told The Cleveland Daily Banner that it was not profitable to provide service to the 55 homes affected.

Generally, Charter Cable will not wire a neighborhood or street if it costs much more than $500 per home to provide service, including the collective cost of bringing wiring to that area.  In the case of Mountain Pointe, Pavlis said it would cost the cable company $130,000 to run an underground cable 2.5 miles to supply the subdivision with service, and that’s “not a reasonable payback,” considering the company expects a 36-48 month return on investment.

Charter is willing to wire the subdivision, if the residents agree to pay $1,850 apiece to pay for the wiring expenses.

That is a cost some homeowners may be willing to pay, considering the affluence of many of them.  Among the residents, according to Cleveland Mayor Tom Rowland, are bankers, business owners, and a former state senator.

“These are the kind of people you want to provide service for — they would subscribe to all of your services if they were available,” said Rowland.

But before opening their wallets, residents are looking for alternatives.  Mountain Pointe resident Lou Patten told the newspaper he and his neighbors are frustrated because a newer subdivision on Freewill Road has service from both Charter and AT&T.

A few residents have braved wireless broadband as their best option, for now, but the neighborhood’s terrain makes service unreliable.  AT&T DSL service is not available because Mountain Pointe is too far away from the central office serving the neighborhood, located northwest of the city of Cleveland.

With Charter remaining intransigent, the mayor met with five of the neighborhood’s residents and State Rep. Kevin Brooks, City Attorney John Kimball and AT&T Regional Director Mary Stewart Lewis to see if AT&T could find a solution.

A DSLAM manufactured by Siemens designed for outdoor installation

Tennessee’s statewide franchise agreement with AT&T points to Bradley County being wired for U-verse, a hybrid fiber-phone line TV, broadband, and telephone service, by July of next year.  But such agreements do not require 100% coverage and doesn’t guarantee Mountain Pointe service.

Lewis told the newspaper she would consult AT&T engineers for a possible solution to the problem.

“We’ve got to see where you are,” Lewis said.

In the short-term, AT&T could provide DSL service by installing equipment nearby that would reduce the distance between Mountain Pointe residents and AT&T’s switching equipment, using a device known as a Digital Subscriber Line Access Multiplexer (DSLAM).  It is commonly installed in more remote locations to provide DSL service in areas where direct service isn’t possible.

AT&T: 'Google is violating the Net Neutrality tenets we spend millions to make sure don't become law.'

AT&T sent a letter late last week to the Federal Communications Commission calling out Google Voice, the free adjunct Voice Over IP service being tested by Google, for blocking calls to certain high cost telephone numbers.  Robert W. Quinn, Jr., Senior Vice President of AT&T’s Federal Regulatory office complained that AT&T has been forced to complete those calls while Google Voice does not, suggesting that might be the equivalent of a Net Neutrality violation, if not an outright violation of call completion requirements established by the Commission.

These days, almost anything can be defined as a Net Neutrality violation.  If I was a vegetarian and I blocked meat products from my home, I’d probably get a letter from AT&T’s counsel too.

At issue here is the exploitation of a loophole that was established by telecom regulators to provide extra financial support to rural community telephone companies.  When a person places a long distance call, part of the charge is paid to the company that connects the call from the long distance network to the recipient’s telephone line.  The fees long distance companies pay vary depending on the size of the community and the length of the call.  Small rural areas enjoy a higher call completion fee than urban areas do.

Some enterprising individuals discovered the fees being paid to rural phone companies were higher than the actual costs to provide the service.  Traditionally, that extra money was used by rural phone companies, often independent or customer-owned cooperatives, to keep their service costs down and to maintain their equipment.  Long distance carriers didn’t care because the number of calls to these rural communities was comparatively small.

But what would happen if a company set up a telephone number to receive lots of calls that would otherwise never be made to such rural communities?  The result could be a financial windfall.  That possibility persuaded a few rural phone companies to let third parties offer international calling, conference calling and adult phone chat services for no charge beyond whatever the customer has to pay to make the long distance call.  In return, the phone company kicks back a significant portion of the extra income they earn from “call completion fees” to the service providers.

AT&T, among others, got wind of this arrangement and flipped out, complaining they were paying an ever increasing bill from rural phone companies hosting these services.  Anyone with an unlimited long distance plan could call these numbers for free and stay connected for hours at a time.

Unsurprisingly, AT&T blocked calls to these services for a period in 2007, refused to pay for some prior charges, and sued several phone companies.

AT&T/Cingular spokesperson Mark Siegel told Ars that the reason the company has decided to start blocking these services is because high volumes of calls to similar services are costly, and the cost of those calls aren’t passed on to the customer. “We have to pay terminating access for every minute the person is on the line,” Siegel explained. “Typically these companies run them through local exchange companies that charge high access rates, so we end up paying high access charges.”

The FCC intervened and said phone companies cannot arbitrarily block customer access to phone numbers, and the blocks were removed.  Today, the free international long distance calling services are basically gone, but free conference calling lines and adult sex chat services remain, and Google Voice has now discovered the perils of connecting calls, for free, to these services.  So now they have blocked access as well.  Google Voice beta testers report calling blocked numbers results in perpetual busy signals.

AT&T pounced in a letter to the FCC:

Numerous press reports indicate that Google is systematically blocking telephone calls from consumers that use Google Voice to call telephone numbers in certain rural communities.  By blocking these calls, Google is able to reduce its access expenses. Other providers, including those with which Google Voice competes, are banned from call blocking because in June 2007, the Wireline Competition Bureau emphatically declared that all carriers are prohibited from pursuing “self help actions such as call blocking.” The Bureau expressed concern that call blocking “may degrade the reliability of the nation’s telecommunications network.” Google Voice thus has claimed for itself a significant advantage over providers offering competing services.

But even if Google Voice is instead an “Internet application,” Google would still be subject to the Commission’s Internet Policy Statement, whose fourth principle states that “consumers are entitled to competition among network providers, application and service providers, and content providers.” This fourth principle cannot fairly be read to embrace competition in which one provider unilaterally appropriates to itself regulatory advantages over its competitors. By openly flaunting the call blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the fourth principle.

Ironically, Google is also flouting the so-called “fifth principle of non-discrimination” for which Google has so fervently advocated (Net Neutrality). According to Google, non-discrimination ensures that a provider “cannot block fair access” to another provider. But that is exactly what Google is doing when it blocks calls that Google Voice customers make to telephone numbers associated with certain local exchange carriers. The Financial Times aptly recognized this fundamental flaw in Google’s position: “network neutrality is similar to common carriage because it enforces non-discrimination . . . Google is arguing for others to be bound by network neutrality and, on the other hand arguing against itself being bound by common carriage,” which leaves Google with an “intellectual contradiction” in its argument.

Richard Whitt, Washington Telecom and Media Counsel for Google, fired back a response on the Google Policy Blog countering AT&T’s arguments:

Google Voice’s goal is to provide consumers with free or low-cost access to as many advanced communications features as possible. In order to do this, Google Voice does restrict certain outbound calls from our Web platform to these high-priced destinations. But despite AT&T’s efforts to blur the distinctions between Google Voice and traditional phone service, there are many significant differences:

• Unlike traditional carriers, Google Voice is a free, Web-based software application, and so not subject to common carrier laws.
  
• Google Voice is not intended to be a replacement for traditional phone service — in fact, you need an existing land or wireless line in order to use it. Importantly, users are still able to make outbound calls on any other phone device.
• Google Voice is currently invitation-only, serving a limited number of users.

AT&T is trying to make this about Google’s support for an open Internet, but the comparison just doesn’t fly. The FCC’s open Internet principles apply only to the behavior of broadband carriers — not the creators of Web-based software applications. Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.

The HissyFit is on, and it’s almost entirely beside the point.  Once again, Net Neutrality is being used as a convenient flogging tool, this time by a company that spends millions to oppose it, yet sanctimoniously demands others should comply with its founding principles.  While the systematic blocking of telephone numbers may echo the kinds of concerns Net Neutrality protection is designed to address, it’s not as on point as AT&T would have you believe.

Google Voice isn’t even close to being a replacement for telephone service.  It’s not even openly available to the public.  AT&T would have had a stronger argument complaining about MagicJack, the dongle that lets you make unlimited long distance calls for $20 a year.  They go beyond just blocking some of the conference calling services — they actually redirect calls to a recording encouraging customers to instead use one of their own partners instead.

Dan Borislow, inventor of MagicJack says “it is not illegal for us to block calls to [conference calling numbers.]  We have invited other conference calling companies to interconnect to us for free, so we can complete our customers’ calls to them.”

Google’s public policy response isn’t as satisfying as it could have been either, and uses some weak arguments in rebuttal.  Much more important and on point is finding a way to address call completion fee loopholes through a change in telecommunications policy.  The telecommunications landscape has fundamentally changed in ways that existing rules could not have anticipated.  Addressing that issue would provide immediate relief to both AT&T and Google Voice without dragging consumer interests into a telecom policy cat fight.

Unfortunately, that’s a point far too fine for many media types, bloggers, and the sock puppets to understand (or desire to), and the campaign of Waving Shiny Keys of Distraction will carry on, and may have been AT&T’s intention in making such an argument in the first place.

AT&T’s Definition of Broadband Suitable for Online Gaming

AT&T’s advocacy of a federal standard for lowest common denominator broadband has struck a nerve in the onling gaming industry.  Stop the Cap! reader Lance noted in a news tip that the gaming industry is unimpressed.

Upset with AT&T’s suggestion that the Federal Communications Commission should accept a definition of broadband service that is merely suitable for basic web browsing and e-mail service, the Entertainment Software Association (ESA), a trade group for the gaming industry, fired off a letter last week opposing AT&T’s bare bones approach to broadband speed and service:

AT&T argued that the baseline definition of broadband should not include what it characterized as “aspirational broadband services” and “myriad sophisticated applications:’ including streaming video, real-time voice, and “real-time, two-way gaming.” It urged the Agency to focus on more “meaningful” services, such as email, web surfing, interacting with Internet-based government services, and online education and training. According to AT&T, these are more pressing concerns for those who do not have terrestrial broadband access currently.

ESA agrees that such services are important. We disagree that the definition should stop there. Americans deserve a higher benchmark. Online video games are a meaningful part of our participative culture. They remove geographic barriers, connecting people from across the country and around the world. They teach cooperation, cultivate leadership skills, and empower users to express their creatiVity. Increasingly, games are used for training purposes and to educate students about complex social issues. If you are starting your gaming journey, get qwertybro gamer gear to have a good gaming experience. Entertaining does not mean trivial.

What AT&T describes as aspirational services are no less important to the future of the Internet than email and web browsing were to the past and are today. Whatever definition of broadband the FCC adopts, it should use a benchmark that opens the potential of the Internet to all Americans. Ultimately, consumers should determine what applications and services they find to be of value.

The ESA has a lot to learn when it comes to the broadband industry allowing consumers to determine what they want from their broadband service.  This is an industry that has several players that do not listen to their customers.  Instead, it engages in PR and astroturf lobbying campaigns to try and convince customers to accept the industry’s own agenda — higher pricing, less “abuse” of their networks, no government oversight or regulation, limited competition, and control of as much content (and the wires that content travels across) as feasible.

The type of gaming consumers expect from their broadband connection.

The ESA should not be surprised by AT&T’s desire to define broadband at the barest of minimum speeds.  AT&T still owns an enormous network of copper telephone wiring.  In rural areas, broadband service definitions based on the lowest speeds are tailor-made for the older phone system capable of delivering only slow speed DSL to consumers.  To define broadband at higher speeds would force AT&T to invest in upgrading its current infrastructure, particularly in rural communities.

Ars Technica ponders the question of whether online gaming is in fact “necessary” to consider when defining a broadband standard, and delves into a discussion about gaming and its value to society.  That misses more important points to consider:

1. With a broadband industry trying to design a broadband standard that is only capable of reasonably serving web pages, e-mail, and other low bandwidth applications commonplace a decade ago, will embracing mediocre broadband speeds help or hurt the United States and the increasingly important digital economy?  How many jobs have been created in new business start-ups that depend on leveraging a robust broadband platform in the United States?  What impact does a “go slow” approach have on American competitiveness and standing in an increasingly wired world?
2. What impact will this industry’s increased noise about Internet Overcharging schemes have on the online gaming landscape?  While many current games don’t use much data transmitting game moves back and forth during play, the software and its add-ons and updates can easily contribute to a bigger broadband bill when users update.  Even more relevant are the trials for the next generation online gaming services like OnLive, which consume considerable amounts of bandwidth from the moment game play begins.  The ESA would do well not to only consider the implications of slow, mediocre broadband service.  It should also consider the very real threat a heavily usage capped or overpriced consumption billing scheme would have on their future.  Will consumers play games that bring them ever closer to a monthly usage cap, or start a billing meter running the moment play begins?

AT&T Entertainment: AT&T's answer to TV Everywhere

AT&T, not wanting to be left behind in the race to provide online video content to subscribers, has soft-launched its own video portal site, AT&T Entertainment.  The site, primarily for AT&T’s U-verse customers, is also available to anyone else who drops by to visit, although the content currently available to view is already available online elsewhere.

Current AT&T customers already have an account on the site based on their att.net Member ID.  Logging in adds several additional features, including:

• Viewing age restricted content (if you meet minimum age requirements)
• Rating shows and movies
• Creating and managing a personalized library and queue
• Sharing videos with friends via email
• Viewing your U-verse guide and managing recordings on your DVR (if you have an AT&T U-verse account associated with your ATT.net Member ID)

At present, none of the content is exclusive to AT&T — it’s mostly a mix of videos from Hulu, CBS, and a few cable networks that allow videos to be embedded on other websites.  AT&T has promised it will expand the service when it officially launches at a yet to be determined date.

Ironically, while watching one Hulu-based TV show, the first thing shown to me was an advertisement from Sprint bashing AT&T for overcharging customers.

AT&T unveiled its U-verse service Monday in Louisville, in a ribbon-cutting ceremony with claims that residents “finally have a choice” for cable service in the area.

AT&T will compete head-on with incumbent cable operator Insight Communications, which has been the only cable provider in Jefferson County for at least a decade.

AT&T promises customers packages starting at $49 a month, as well as digital video recorder set top boxes that can record up to four shows at the same time, and display the recorded programming on any AT&T-wired television in the house.  AT&T also promises residents significant savings when they choose AT&T for video, telephone, and broadband service, and will even include a “quad-play” bundle including AT&T Wireless mobile phone service, resulting in one bill for all AT&T services.

AT&T’s U-verse system is an advanced form of DSL, using a hybrid network of fiber optic cables wired into neighborhoods that interface with ordinary copper telephone wiring that already exists in most Louisville homes.  The technology reduces the costs of wiring every home with fiber optics, but can still offer advanced services “beyond what cable can offer,” according to AT&T.

Consumers across Louisville welcomed the competition.

Tabitha Rhodes told the Louisville Courier-Journal the lack of competition was bothersome.  “It is like there is only one shoe store in town,” she said. “I want 20 shoe stores.”

Rhodes’ husband, Tate, said he hopes AT&T’s competition will force Insight to become a more reliable cable company. Rhodes said their cable service has experienced dropped channels, poor quality pictures, and even pesky neighborhood squirrels that gnawed through the cable line serving his street.

The U-verse service also ties in with an Apple iPhone application, which when run on AT&T’s wireless network allows customers to program their television recording remotely.

Insight customer Rhonda Petr, 44, said she now pays $15 per month for digital video recorder service for each of two television sets in her home, in addition to a bundled monthly subscription for premium cable, phone and Internet service.

Petr said she liked the idea of DVR service without “nickel and dime” charges for each TV set.

Insight Communications dismissed AT&T’s U-verse as little more than smoke and mirrors, according to company spokesman Jason Keller.

“Insight has been Louisville’s technology leader for more than a decade,” company spokesman Jason Keller said Friday.

“One more competitor… won’t change that,” Keller said.

Insight’s system in Louisville is the largest in the company’s nationwide portfolio.  Company officials point to investments Insight has made in the Louisville area to introduce additional services, including “a broadband service that is faster than what AT&T is offering.”

Insight offers 20Mbps service for $17 less than what AT&T charges for 18Mbps, according to one reader.

Insight claims that AT&T is relying on the same old wiring that has been around “since the days of Alexander Graham Bell” to deliver service, and Insight has a “technological advantage in broadband width.”

The question on everyone’s mind is, how much will consumers save?

As the Courier-Journal notes, both are primarily competing on services, not on price:

Both Insight and AT&T offer bundled packages combining telephone, television and Internet starting at about $100 per month.The two compete chiefly on features. For instance, Insight offers faster Internet access, while AT&T is promoting U-Verse’s features that link television, home phone service, wireless phone service, and Internet together.

Rob Enderle, a technology consultant and president of the Enderle Group based in San Jose, Calif., told the newspaper the big savings are found in new customer promotional offers, which he calls “low teaser rates.”  In many Verizon FiOS TV areas that compete with cable, promotional new customer offers also often include long-term contracts lasting 12-24 months.

Incumbent cable companies often launch pre-emptive marketing blitzes to sell their customers on “price protection agreements” just before a competitor comes to town.

“They will try to lock up as many customers as they can,” Enderle told the newspaper.

In Louisville, Insight may have managed to accomplish that with their one-year “price protection agreement” they have managed to sell many of their customers.  The marketing for such agreements promises no price increases for the term of the contract, something that might sound attractive to price-sensitive cable subscribers facing relentless annual rate hikes.

AT&T has no such contract requirements in Louisville, although the company has used them in other markets to lock in customers taking advantage of promotional offers.

Once those promotional offers expire, the two companies will end up charging roughly the same prices for the various packages they offer.  Customers can choose which provider gives them the channels and services they want, as well as which offers better quality service.  The elusive savings, once the promotions expire, are still hard to find.

One Louisville reader called both companies to compare:

Just did a comparison on the different packages AT&T would offer: slower Internet, any additional DVR boxes would be $15/mo (same as Insight), HD channels would be $10/mo (free with Insight), and they would offer no more channels than Insight and both offer garbage as far as programs go. Yeah, I think Insight needs some competition in order to provide its customers with better pricing and better quality, but slower Internet and having to pay to access HD channels is BS. AT&T better come up with something better.

Multiple video news reports about AT&T’s U-verse launch in Louisville can be found below the jump.  Many also include product introductions and short demos.

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