Chickamauga Telephone Cooperative office (Courtesy: WRCB-Chattanooga)

AT&T and some of Georgia’s cable operators are under attack by telephone customers outraged to learn of a plan to force two independent phone companies to raise their rates because some think they charge too little.

Residents packed the Chickamauga Civic Center Monday night to loudly protest an effort by AT&T and the Georgia Cable TV Association to force both Chickmauga and Ringgold Telephone to raise their rates, in some cases by 100 percent.

“We’re here today because another company has complained about Chickamauga Telephone rates [claiming] that they are too low,” said Chickamauga city superintendent of schools Melody Day. “Maybe it’s just that their rates are too high.”

Retirees complained the rate increases demanded by AT&T and cable operators were unaffordable, with residential customers facing hikes of 42% for phone service. AT&T claims both phone companies are subsidizing their rates with money from the Universal Service Fund to an artificially low level. AT&T rates are considerably higher, and now AT&T wants the two independents to raise their rates accordingly.

If AT&T has their way with the Georgia Public Service Commission, Chickamauga residential customers currently paying $13.30 per month will be billed $18.83 per month for basic phone service with a limited local calling area. Business customer rates would double from $20.40 to $40.80 per month.

Local businesses and politicians are complaining loudly about the proposal, and want AT&T to mind its own business.

AT&T does not directly compete with landline service in the area, considered a suburb of nearby Chattanooga, Tenn. But cable operators do compete and AT&T sells cell phone service locally.

“It’s important for the Public Service Commission to be able to hear from our constituents around the state,” said PSC Chairman Tim Echols. “And we’re glad people packed the auditorium tonight.”

State regulators told the Times Free Press the Commission was unlikely to approve the kind of rate increase being demanded by AT&T. But they may approve a cut in state subsidies received by Chickamauga and Ringgold telephone companies, which would likely force both to raise rates anyway.

Chickamauga city manager John Culpepper said the city alone is looking at paying $200 more per month — money that will ultimately fall on the taxpayer. Culpepper says independent small businesses are already having a hard time competing with corporate America.

“When you double their rates, it is another financial impact.”

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WRCB Chattanooga Walker County phone customers fighting rate increase 8-13-12.mp4[/flv]

WRCB in Chattanooga reports on the unrest among phone customers in Chickamauga, Ga. over a plan by AT&T and Georgia cable companies to get regulators to force their local telephone cooperative to increase rates by as much as double. (4 minutes)

Otero

When a former labor leader suddenly starts advocating for the interests of AT&T and other super-sized telecommunications companies, even as AT&T’s unionized work force prepared to strike, the smell of Big Telecom money and influence permeates the air.

Jack Otero, identified in the Des Moines Register as “a former member of the AFL-CIO Executive Council and past national president of the AFL-CIO’s Labor Council for Latin American Advancement,” penned a particularly suspicious love letter to deregulation that might as well have been written by AT&T’s director of government relations:

[…]Industries — like broadband Internet — are thriving and creating innovations. Tossing a regulatory grenade into these businesses could wreck markets that create value for consumers and jobs for workers.

The United States is one of the most wired nations in the world. More than 95 percent of households have access to at least one wireline broadband provider, and the vast majority can connect at speeds exceeding 100 Mbps. And monthly packages start as low as $15. That means more families can go online to improve their job skills, look for work or help the kids with their school assignments.

More choices and higher speeds — the signs of a vibrant market — are the product of private investment, not public dollars. Internet service providers have invested over $250 billion in the last four years alone. This has created roughly half a million jobs laying fiber-optic and coaxial cable.

But some squeaky wheels are demanding heavy-handed regulations that would move our broadband Internet to the European model, where taxpayers have to subsidize outdated networks with slow speeds. Some want broadband providers to be required to lease their networks to competitors at discounted prices — as they do in Europe. But lawmakers in both parties agree that this policy, tried in the 1996 Telecommunications Act, failed miserably.

Others argue that broadband Internet providers should not be able to impose a small surcharge on the tiny percentage (less than 1 percent) of consumers who download hundreds of movies and tens of thousands of songs every month — effectively the data usage of a business. They say these fees discriminate against online video companies like Netflix. But that’s silly. More than 99 percent of users can watch plenty of Apple TV or Netflix without approaching the lowest data allotment. Without tiered pricing plans, the rest of us would have to underwrite these super-users.

Okay then.

Otero’s Fantasy World of Broadband sounds great, only it does not exist for the vast majority of Americans. Are most of us able to connect at speeds exceeding 100Mbps?

If you happen to live in a community served by a publicly-owned broadband provider Otero effectively dismisses, you can almost take this fact for granted.

Some of America’s most advanced telecommunications providers are actually owned by the public they serve in dozens of communities small and large. EPB Fiber, Greenlight, Fibrant, Lafayette’s LUS Fiber, among others, deliver super-fast upload and download speeds at very reasonable prices while the giant phone and cable companies offer less service for more money.

The only major telecommunications company with a wide deployment of fiber-to-the-home service is Verizon Communications.

You cannot easily buy residential 100Mbps service from Time Warner Cable, AT&T, CenturyLink, Frontier, FairPoint, or a myriad of other telecom companies at any price, unless you purchase an obscenely expensive business account. From the rest, 100Mbps service typically sets you back $100 a month.

Otero’s quote of affordable $15 broadband is not easy to come by either. It usually requires the customer to qualify for food stamps or certain welfare programs, have a family with school-age children, a perfect payment history, and no recent record of subscribing to broadband service at the regular price.

The only people who believe America is the home of a vibrant market for broadband service are paid employees of telecom companies, paid-off politicians, or their sock-puppet friends and organizations who more often than not receive substantial contributions from phone or cable companies. The fact is, the United States endures a home broadband duopoly in most communities — one cable and one phone company. They charge roughly the same rates for a level of service that Europe and Asia left behind years ago. Broadband prices keep going up here, going down there.

Simply put, Mr. Otero and actual reality have yet to meet. Consider his nonsensical diatribe about the impact of the “heavy-handed” 1996 Telecommunications Act, actually a festival of mindless deregulation that resulted in sweeping consolidation in the telecommunications and broadcasting business and higher prices for consumers.

Otero is upset that big companies like AT&T and Verizon originally had to open up their networks in the early 1990s to independent Internet Service Providers who purchased wholesale access at fair (yet profitable) prices. Those fledgling ISPs developed and marketed third-party Internet service based on those open network rates. Remember the days when you could choose your ISP from a whole host of providers? In some markets, this tradition carried forward with DSL service, but for most it would not last.

The telecommunications industry managed to successfully lobby the government and federal regulators to change the rules. Phone companies did not appreciate the fact they had to open their networks for fair access while cable operators did not. So in 2005, the FCC allowed both to control their broadband networks like third world despots. Competitors were effectively not allowed. Wholesale access, where available, was priced at rates that usually guaranteed few ISPs would ever undercut the cable or phone company’s own broadband product.

The lawmakers who believed open networks represented awful policy were almost entirely corporate-friendly or recipients of enormous campaign contributions from the telecom companies themselves.

So which market is actually on the road to failure?

The LCLAA couldn’t do enough to help AT&T swallow up competitor T-Mobile USA.

The American broadband business model is a firmly established duopoly that charges some of the world’s highest prices and has rapidly fallen behind those “failures” in Europe.

In the United Kingdom, BT — the national phone company, is required to sell access at the wholesale rates Otero dismisses as bad policy. As a result, UK consumers have a greater choice of service providers, and at speeds that are increasingly outpacing the United States. Nationally backed fiber to the home networks in eastern Europe and the Baltic states have already blown past the average speeds Americans can affordably buy from the cable company.

Even Canada requires Bell, the dominant phone company, to open its network to independent ISPs selling DSL service. Without this, Canadians would rarely have a chance to find a service provider offering unlimited, flat rate service.

Otero’s final, and most-tired argument is that data caps force “average” users to subsidize “heavy” users. In fact, as Stop the Cap! reported this week, that fallacy can be safely flushed away when you consider the largest ISPs pay, on average, just $1 per month per subscriber for usage, and that price is dropping fast. The only thing being subsidized here is the telecom “dollar-a-holler” fund, paid to various mouthpiece organizations who deliver the industry’s talking points without looking too obvious.

The Des Moines Register omitted the rest of Mr. Otero’s industry connections. We’re always here to help at Stop the Cap!, so here is what the newspaper forgot:

• Mr. Otero is a board member of Directors of the U.S. Hispanic Leadership Institute (USHLI), a group funded in part by AT&T and Verizon;
• He is the past president of the Labor Council for Latin American Advancement, a group that enthusiastically supported the anti-competitive merger of AT&T and T-Mobile USA;

Mr. Otero has a side hobby of penning nearly identical editorials with largely these same broadband talking points. One wonders what might motivate him into writing letters to the Des Moines Register, the Lexington Herald-Leader, the Gainesville Sun, the Star-Banner, and the Ledger-Inquirer.

Otero may have a case for plagiarism, if he chooses to pursue it, against Mr. Roger Campos, president of the Minority Business RoundTable (the top cable lobbyist, the National Cable & Telecommunications Association is labeled an MBRT “strategic partner” on their website). Campos uses some of the exact same talking points in his own “roundtable” of letters to the editor sent to newspapers all over the place, including the Ventura County Star, the Leaf Chronicle, and the Daily Herald.

AT&T workers launched a two-day strike impacting operations in Connecticut, Nevada, and California.

Around 20,000 AT&T workers in Connecticut, Nevada and California are striking this afternoon in a two-day action to protest what union officials call the company’s lack of good faith during contract negotiations talks.

“Contract negotiations are never easy,” said CWA District 9 vice president Jim Weitkamp. “But when AT&T violates the law repeatedly, the process really can’t work. Given AT&T’s record profits, tax breaks and jaw-dropping executive compensation, there is no reason for them to insist on lowering the standard of living of a single worker.”

While 17,000 workers in the west and 3,000 employees in Connecticut walk picket lines, fellow AT&T employees in the southeast are still on the job after the company reached tentative deals with unions representing those workers.

AT&T says the new three-year deals with the Communications Workers of America and the International Brotherhood of Electrical Workers in Alabama, Georgia, Louisiana, Mississippi, Tennessee and North and South Carolina  bring wage and “modest pension increases,” according to the company.

Connecticut workers say AT&T’s proposed package in the northeast is not sufficient to address the high cost of living in the state.

But AT&T says declining numbers of landlines means cuts are inevitable. AT&T said in a statement Tuesday’s walkout was not in anyone’s best interest.

Connecticut picketers have been blocking the entrances of several AT&T facilities including in New Haven, where replacement workers appear to be honoring the picket lines after talking with striking workers. Unions are requesting customers not do business with AT&T during the strike.

Late reports indicate several cars with New Jersey license plates have hit three persons on one picket line. The union claims the vehicles were being driven by replacement workers, but no independent confirmation was available.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/New Haven Register ATT UNION ON STRIKE 8-7-12.mp4[/flv]

The New Haven Register talked with Tim Smith, a union worker on a picket line outside of an AT&T facility. The video shows picketers encouraging replacement workers to honor the picket line and not report for work.  (3 minutes) 

AT&T loves corporate free speech rights, the same ones it is using to deny customers access to Google’s Play Movies service.

With wireless Net Neutrality rendered largely ineffective with the help of AT&T and Verizon Wireless’ extensive lobbying and legal threats, AT&T has leveraged its right to govern its own network by deciding to block its wireless customers from watching Google Play Store’s streaming movie service over its 3G and 4G networks. This block is enforced even though AT&T already throttles heavy “unlimited” users and charges others more for using more data.

Geek.com was the first to discover AT&T’s curious dislike of Google Play Movies, while leaving other streaming services like Netflix, HBO Go, YouTube, and others alone (for now):

Instead of The Anchorman […] I was greeted with an error message telling me that I was not allowed to stream this movie over the mobile network. Assuming it was just an error, I tried again and got the same message. After a few minutes of playing with settings, it became clear that I was not going to be able to watch this movie without WiFi.

Yes, it seems that AT&T has removed the ability to watch Google Play Movie files over their 3G and LTE networks. This only happens with Google Play Movies, and only on AT&T. […] Curiously enough, you can download or “pin” a Google Play Movie over 3G and LTE and the only warning you get is one from Google explaining that you might incur data costs.

AT&T and Verizon have both declared Net Neutrality violates their free speech rights as corporate citizens — rights further expanded with the Supreme Court’s “Citizens United” decision.

When Federal Communications Commission chairman Julius Genachowski sought to introduce mild Net Neutrality protections for the Internet, both companies threatened to sue (Verizon has a case pending) and conservative commentators launched into tirades about “an Obama takeover of the Internet.”

RUSH LIMBAUGH: Today the FCC approved a proposal by chairman Julius Genachowski to give the FCC power to prevent broadband providers from selectively blocking web traffic. And that’s just a ruse. Net Neutrality is not what this is really all about. This is about the feds wanting to control the Internet just as they control the public airwaves. They want to be able to determine who gets to say what, where, how often — they want to be able to determine what search services are providing what answers to your queries. It’s total government control of the Internet, and the regime has just awarded it to itself.

It’s another gleaming aspect of free speech, free market, private industry Obama has decided to take over as a Christmas present to himself and the Democrat National Committee and to Mr. Soros. He’s even beaten Hugo Chavez to the punch. Chavez is just talking about taking over the Internet in Venezuela; Obama has got it done.

Geek.com doesn’t think the Obama Administration is blocking Google Play over AT&T — AT&T is. They just cannot understand the reasoning why:

I can’t imagine any real world justification for this behavior. If you pay your carrier for an internet connection to your phone, should the provider really be allowed to control how you use that connection? What’s more is that this happened over AT&T’s high speed and mostly empty LTE network. I can easily create a wireless hotspot on this same phone and stream a video from the Nexus 7, using the exact same data connection to accomplish the exact same task. This move is confusing at best, and AT&T is going to quickly alienate customers eager to take advantage of their brand new LTE devices as they receive them.

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

Mark Fiore channels Disney-sentimentality schtick on a whole new level with his take on AT&T’s Pinocchio-CorporateLand dream come true: the right to be human. (1 minute)

Normally, telephone companies looking for a rate increase file a request themselves with state regulators to charge customers more for service. But in Georgia, AT&T, Comcast, and the state cable lobbying group are asking the Georgia Public Service Commission (GPSC) to order two rural phone companies to raise rates because they are not “charging enough” for phone service, when compared with cable telephone services and AT&T.

The Ringgold Telephone Company (RTC) and Chickamauga Telephone Company both argue the action is anti-competitive.

“By forcing [both companies] to increase rates, these competitors are seeking to make wireless and cable companies more attractive to consumers,” says the Don’t Raise My Rate website.

The independent phone companies are vehemently against raising their rates, and executives at both companies are outraged AT&T and the state’s cable companies are literally trying to force the GPSC to order rate increases on residential and business customers.

“It’s totally unprecedented,” Phil Erli, executive vice president at RTC told the Times Free Press.  “It is ludicrous and illogical.”

The Georgia Public Service Commission will decide on Oct. 16 whether the rate increases are justified, following local public hearings Aug. 13.

AT&T, which is driving the campaign to force customers to pay higher rates, says they are pressing the case because both companies unfairly charge substantially lower rates than AT&T does in Georgia.

Peter F. Martin, vice president for legislative and regulatory affairs in Georgia openly admits he wants both companies to charge essentially the same prices AT&T bills its customers in other areas of the state.

“The premise of my recommendation is that [the two phone companies] raise rates to roughly the same levels that are being charged by other local exchange carriers in surrounding areas,” Martin testified before the GPSC. “In other words, my recommendation is that [the two phone companies] increase their own end-user rates to market-based levels comparable to what other carriers are charging their subscribers.”

For customers of Chickamauga Telephone, that would amount to a 42% rate increase on residential customers, 100% on business customers. Customers of RTC would pay 20 percent more for residential service, 37% more for business service.

AT&T claims both companies, in deeply rural Georgia, are tapping into the state’s rural service fund and are receiving some of the largest state-mandated telecom subsidies, which are funded by all of Georgia’s phone companies and ratepayers. But both companies claim they have spent a large portion of those funds repairing damages to their rural networks incurred from a series of tornadoes which hit the area two years in a row.

The state cable lobbying group, the Cable Television Association of Georgia (CTAG) also has a dog in this fight. Comcast Cable, the dominant provider in Georgia, directly competes with both phone companies. They support AT&T’s demands that both phone companies hike their rates. It is not difficult to understand why:

Residential Service With Calling Features:

Business Service With Calling Features:

(EPB, a publicly-owned provider from nearby Chattanooga, Tenn., also offers service in some areas.)

Chickamauga Telephone executives argue Georgia’s telephone deregulation policies are heavily weighted in favor of huge phone and cable companies and leave independent, rural phone companies with no new revenue opportunities. Chickamauga argues AT&T and the cable industry are using legislatively imposed “unfunded mandates” to win favor and additional profits for themselves and their shareholders, with no resulting savings for Georgia ratepayers, especially in rural areas.

If AT&T and cable operators have their way, both independent phone companies “would be priced out of the competitive market,” and “would soon find [themselves] out of business.”

“If you lived down here and you had a phone with us and your rates went up, how would you respond?” asked Ted Austin, a spokesman for Chickamauga Telephone. “Nobody wants their bills to go up, especially when it’s not something that Chickamauga Telephone is asking for.”