Verizon Communications is a study in contrasts.  It runs one of the most advanced wired broadband services in the country that wins rave reviews from consumers and businesses, is on the verge of ending its unlimited use data plans for smartphone customers on the wireless side, and has launched a major “police action” against individuals that are using their smartphones as wireless hotspots without paying an additional $20 a month for the privilege.

Verizon Says No to Data Caps and Consumption Billing

When you run an advanced fiber to the home network like FiOS, the concept of data caps is as silly as charging for each glass of water collected from Niagara Falls.  That’s a point recognized by Joseph Ambeault, director of media and entertainment services for Verizon.  Talking with GigaOm’s Stacey Higginbotham, Verizon continues to insist their network was built to handle both today and tomorrow’s network demands.

“Our network is always engineered for big amounts of data and right now there are no plans [to implement caps], but of course you never want to say never because things could change.”

However, in the same conversation he talked about how the FiOS service has gone from offering a maximum of 622 Mbps shared among 24 homes in the beginning to tests of 10-gigabit-per-second connections in individual homes that Ambeault mentioned. For now, Verizon is testing 10-gigabit-per-second-shared connections and offering up to 150 Mbps home connections. This kind of relish for massive bandwidth is not evident in conversations with folks at AT&T or even those cable firms deploying DOCSIS 3.0. Which is why when Ambeault added, “We don’t want to take the gleam off of FiOS,” as his final say on caps, I tend to believe that Verizon may be the last holdout as other ISPs such as AT&T, Charter and Comcast implement caps.

Verizon Says Yes to Ending Unlimited Smartphone Data Plans

Verizon is among the last holdouts still offering unlimited data plans for smartphone customers.  Priced at $30 a month per phone, these plans have proved very profitable for Verizon in the past, in part because they are mandatory whether you use a little data or a lot.  But now as data consumption grows, Verizon’s profits are not as luxurious as they once were, so the “unlimited plan” must and will go, probably within the next three months.

Verizon has always been hesitant about following AT&T’s lead for wireless data pricing, which delivers a paltry 2GB for $25 a month.  AT&T still sells its legacy unlimited plan, grandfathered for existing customers, for just $4 more per month.  So while AT&T can claim they’ve reduced the price for their data plans, they’ve also introduced a usage allowance.  Those exceeding it will find a much higher bill than the one they would have received under the old unlimited plan.

Verizon will probably echo AT&T’s tiered data plans, perhaps with slightly more generous allowances, but the real excitement came from Verizon CFO Fran Shammo, who told attendees at the Reuters Global Technology Summit it was prepared to finally introduce the much-wanted “family data plan,” which would allow every family member to share data on a single plan.  That’s a potential smartphone breakthrough as customers resistant to paying up to $30 a month per phone for each individual data plan might see their way clear to buying smartphones for everyone in the family if they all shared a single family-use data plan.

“I think it’s safe to assume that at some point you are going to have megaplans and people are going to share that megaplan based on the number of devices within their family. That’s just a logical progression,” Shammo said.

Of course, the devil is in the details, starting with how much the plan will cost and what kind of shared allowance it will offer.

Verizon Says ‘Oh No You Didn’t Tether Your Phone Without Our $20 Add-On’

Phandroid posted this copy of a message Verizon customers are receiving if they are using unauthorized third party tethering apps. (Click to enlarge.)

Earlier today, Verizon Wireless customers using popular third-party tethering apps to share their smartphone’s built-in Wi-Fi Hotspot with other nearby wireless devices began receiving the first of what is expected to be a series of warnings that the jig is up.

Tethering allows anything from a tablet computer to a netbook or laptop to share a Verizon Wireless data connection without having to pay for individual data plans for each device.  Third party software applications bypass Verizon’s own built-in app, the 3G Mobile Hotspot, which involves paying an additional $20 a month for a secondary data plan delivering a 2GB monthly usage allowance.

Just as AT&T hated to see the possibility of lost revenue passing them by, Verizon has begun ferreting out customers using these apps and sending them friendly reminders that tethering requires an official Verizon Wireless add-on plan.  While the third party apps are not yet being blocked, most expect Verizon to gradually crack down on their use if customers persist in using them.  Verizon can also block the sale of the apps from the Android Market and can also insert roadblocks to prevent their use.  Or they can follow AT&T’s lead and threaten (perhaps illegally) to automatically enroll customers caught using tethering apps in their paid tethering plans.

The New York Times today published an editorial blasting Verizon’s lawsuit against the Federal Communications Commission for requiring the wireless carrier to offer data roaming on commercially reasonable terms:

With text messages, e-mail and other forms of data overtaking voice as the main form of wireless communication, the rule issued in April will preserve competition in a vital communications network.

There are more than 100 wireless providers around the country, mostly tiny carriers with a network limited to a small area. They depend on roaming agreements to stitch together a bigger footprint, which is essential to compete successfully. If Verizon were to prevail — AT&T has, so far, not joined the lawsuit but has criticized the rule — the two dominant players could refuse to deal.

In fact, there is evidence Verizon and AT&T have spent years foot-dragging their way to roaming agreements for data, an increasingly vital service for the handful of independent cellular service providers, almost all operating with limited local service areas.  Although roaming agreements cover voice phone calls, such agreements for data roaming have traditionally been much rarer.  When the FCC threatened to regulate, the pressure was on and both AT&T and Verizon quickly reached agreements with many carriers, some of whom complained about outrageous roaming prices up to $1 per megabyte.

The Times argues that with wireless marketplace concentration accelerating with the impending merger of T-Mobile and AT&T, fair data roaming rules are essential.

A research report sponsored by the National Cable & Telecommunications Association, the nation’s largest cable lobbying group, has concluded that millions of broadband stimulus dollars are being wasted by the government on broadband projects that will ultimately serve people who supposedly already enjoy a panoply of broadband choice.

Navigant Economics, a “research group” that produces reports for its paying clients inside industry, government, and law firms, produced this one at the behest of a cable industry concerned that broadband stimulus funding will build competing broadband providers that could force better service and lower prices for consumers.

• More than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers. In one of the project areas, more than 98 percent of households are already passed by at least one of these modalities.

• In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high. When existing mobile wireless broadband coverage is taken into account, the $231.7 million in RUS funding across the three projects will provide service to just 452 households that currently lack broadband service.

Navigant’s report tries to prove its contention by analyzing three broadband projects that seek funding from the federal government.  Northeastern Minnesota, northwestern Kansas, and southwestern Montana were selected for Navigant’s analysis, and unsurprisingly the researcher found the broadband unavailability problem overblown.

The evidence demonstrates that broadband service is already widely available in each of the three proposed service areas. Thus, a large proportion of each award goes to subsidize broadband deployment to households and regions where it is already available, and the taxpayer cost per unserved household is significantly higher than the taxpayer cost per household passed.

The cable industry funds research reports that oppose fiber broadband stimulus projects.

But Navigant’s findings take liberties with what defines appropriate broadband service in the 21st century.

First, Navigant argues that wireless mobile broadband is suitable to meet the definition of broadband service, despite the fact most rural areas face 3G broadband speeds that, in real terms, are below the current definition of “broadband” (a stable 768kbps or better — although the FCC supports redefining broadband to speeds at or above 3-4Mbps).  As any 3G user knows, cell site congestion, signal quality, and environmental factors can quickly reduce 3G speeds to less than 500kbps.  When was the last time your 3G wireless provider delivered 768kbps or better on a consistent basis?

Navigant also ignores the ongoing march by providers to establish tiny usage caps for wireless broadband.  With most declaring anything greater than 5GB “abusive use,” and some limiting use to less than half that amount, a real question can be raised about whether mobile broadband, even at future 4G speeds, can provide a suitable home broadband replacement.

Second, Navigant’s list of available providers assumes facts not necessarily in evidence.  For example, in Lake County, Minnesota, Navigant assumes DSL availability based on a formula that assumes the service will be available anywhere within a certain radius of the phone company’s central office.  But as our own readers have testified, companies like Qwest, Frontier, and AT&T do not necessarily provide DSL in every central office or within the radius Navigant assumes it should be available.  One Stop the Cap! reader in the area has fought Frontier Communications for more than a year to obtain DSL service, and he lives blocks from the local central office.  It is simply not available in his neighborhood.  AT&T customers have encountered similar problems because the company has deemed parts of its service area unprofitable to provide saturation DSL service.  While some multi-dwelling units can obtain 3Mbps DSL, individual homes nearby cannot.

Navigant never visited the impacted communities to inquire whether service was actually available.  Instead, it relied on this definition to assume availability:

DSL boundaries were estimated as follows: Based on the location of the dominant central office of each wirecenter, a 12,000 foot radius was generated. This radius was then truncated as necessary to encompass only the servicing wirecenter. The assumption that DSL is capable of serving areas within 12,000 is based on analysis conducted by the Omnibus Broadband Initiative for the National Broadband Plan.

Frontier advertises up to 10Mbps DSL in our neighborhood, but in reality can actually only offer speeds of 3.1Mbps in a suburb less than one mile from the Rochester, N.Y. city line.  In more rural areas, customers are lucky to get service at all.

Cable broadband boundaries were estimated based on information obtained from an industry factbook, which gathered provider-supplied general coverage information and extrapolated availability from that.  But, as we’ve reported on numerous occasions, provider-supplied coverage data has proven suspect.  We’ve found repeated instances when advertised service proved unavailable, especially in rural areas where individual homes do not meet the minimum density required to provide service.

We’ve argued repeatedly for independent broadband mapping that relies on actual on-the-ground data, if only to end the kind of generalizations legislators rely on regarding broadband service.  But if the cable industry can argue away the broadband problem with empty claims service is available even in places where it is not (or woefully inadequate), relying on voluntary data serves the industry well, even if it shortchanges rural consumers who are told they have broadband choices that do not actually exist.

Navigant’s report seeks to apply the brakes to broadband improvement programs that can deliver consistent coverage and 21st century broadband speeds that other carriers simply don’t provide or don’t offer throughout the proposed service areas.  The cable industry doesn’t welcome the competition, especially in areas stuck with lesser-quality service from low-rated providers.

Vermont officials this month are learning broadband maps purporting to represent widespread availability of high speed Internet access across the state are much less accurate than originally thought.  Now into its second week, the BroadbandVT project to identify service gaps and collect actual broadband speeds is showing a chasm between provider claims and actual broadband reality on the ground for the state’s 625,000 residents.

Vermont’s broadband service availability map was originally reliant on service providers voluntarily contributing data about where service was available — data that has rapidly found to be faulty as Vermont residents report their actual broadband experiences to the state’s website.

The state’s Broadband Mapping Team used data from a phone survey conducted in January by the University of Vermont-Center for Rural Studies to verify providers’ claims of broadband availability.  On May 12, state officials reported that their provider-inspired maps were not accurate, and officials wanted residents to help verify coverage.

“I’m bound and determined to have Vermont connected by 2013 — high-speed Internet and cell service to every last mile. One of our challenges is that we don’t have information that we can trust about who has service and who doesn’t,” Gov. Peter Shumlin said. “So we need Vermonter’s help, so we can figure out where to go. So we’re urging Vermonters to use our new website to help us get truth about your service in your home or business.”

In similar cases Stop the Cap! has followed, the biggest sources of inaccurate data turn out to be telephone companies and wireless providers.  Phone companies like FairPoint Communications may advertise DSL available in certain communities, but be unable to actually provide the service to every household due to the distance between the central telephone exchange and the customer’s home, or because of deteriorated infrastructure.  Wireless providers often theorize where service should be available, but real world experience proves otherwise.

FairPoint told the Brattleboro Reformer the phone company intends to do much better delivering DSL to Vermont residents in the coming weeks.  The company claims it already provides DSL access to 82 percent of the state and intends to increase that number considerably higher in June.

“We have a plan with the state to bring total broadband coverage to half of our telephone exchanges in the state, so that’s the first three digits of your phone number. Ninety-five percent of that will be done in the next six weeks,” said FairPoint spokeswoman Sabina Haskell.

Vermont residents appear to be enthusiastic participants in the project, with 1,500 visitors a day using the website’s broadband maps and taking speed tests to share results with the state, who can compare them against providers’ speed claims.

Vermont’s expansion of broadband service is a state priority, and directing resources to areas of need has proved critical as the state receives and spends broadband stimulus funding.  Crowdsourced maps can expose exaggerated claims of broadband availability or confirm them as accurate.  The state intends to update its maps regularly based on data it receives, all part of an initiative to deliver 100 percent broadband coverage across the state.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WPTZ Plattsburgh Lawmakers Debate Broadband 4-12-11.mp4[/flv]

WPTZ-TV in Plattsburgh explores Vermont’s new initiative to bring broadband to 100 percent of the state’s residents.  (2 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WPTZ Plattsburgh Website Identifies Broadband Availability 5-12-11.mp4[/flv]

WPTZ-TV also reports on the state’s new website to verify broadband mapping data and speed claims made by the state’s phone and cable companies.  (3 minutes)

Nevermind. We'll resell Sprint instead.

Back in January 2010, Cox Cable announced it was getting into the cell phone business with an ambitious plan to construct its own competing wireless network.  Cox used their little spacemen to market their forthcoming alternative as delivering “unbelievably fair” pricing and terms for cell phone service.  The bigger players were selling bait and switch plans with high extra charges and bill shock at the end of the month, or so Cox’s ads suggested.

Now, the cable company has announced it is pulling the plug on its partially constructed 3G network, and will rely exclusively on reselling Sprint service.

“We believe this approach is good for our customers, allowing us to take the necessary steps to fulfill our promise to deliver a Cox experience that customers expect from us,” read a statement from Cox.

What happens to Cox’s existing infrastructure, and the frequencies it won at auction in 2008, is unknown.

Although the reasons for the change of heart are not officially known, there is speculation in the investment community Cox’s expensive launch of 3G technology would be outdated just as larger providers were unveiling newer 4G networks.  Additionally, the dynamics of the market are increasingly trending towards a duopoly, especially after AT&T announced its intentions to acquire T-Mobile.

Two major carriers will provide service to the vast majority of Americans if the merger is approved.  That would leave Cox in a difficult position attracting investment to build its own network and interest from consumers looking for the latest and greatest smartphones Cox couldn’t sell.

Sprint’s wholesale division has allowed several providers to resell Sprint’s network, no capital investments required.  Cox had already been relying on Sprint for providing cell phone service in several markets.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cox Wireless Advertising Campaign.flv[/flv]

Cox Wireless’ marketing campaign promised “unbelievably fair” pricing on its own wireless network.  Now it will resell Sprint’s network instead. (2 minutes)