Three years ago, Bush Administration FCC Chairman Kevin Martin championed an initiative to offer free national Internet access across the United States via wireless access.  Martin’s idea was to take a portion of unused spectrum and auction it to a company that agreed to set aside 25 percent of the 2 GHz “AWS-3” band for a free, slow speed Internet service.  The winning bidder could underwrite the free service with online advertising and sell access to the remaining 75 percent of the spectrum, presumably for faster access.  Think NetZero for the 21st century.

That proposal just happened to coincide with a nearly identical plan offered by M2Z Networks Inc., a politically-connected start-up backed by Kleiner Perkins Caufield & Byers partner John Doerr and loaded with former FCC people.

M2Z had everything the FCC wanted from an applicant:

• a minority owned business that would raise the percentage of minority-owned telecommunications businesses;
• a willingness to agree to Martin’s demands that the free Internet service be censored to remove adult content;
• sufficient financial backing to win the spectrum auction;
• political connections that could help drive the plan through a political minefield and objections from incumbent commercial providers.

John Muleta, co-founder and CEO of M2Z Networks, also headed the FCC's Wireless Telecom Bureau between 2003 and 2005.

M2Z planned to offer free Internet access below the definition of broadband speeds defined in America’s National Broadband Plan — 768kbps, and would also include web advertising injected by M2Z.  Premium, paying customers could access faster speeds and avoid the extra advertising.

Unfortunately for the project’s boosters, Martin’s maverick proposal met a roadblock of opposition, including from his boss, President George W. Bush.  Commercial providers, especially AT&T, Verizon, and T-Mobile immediately attacked the plan.  AT&T and Verizon did not want a competitor giving away free wireless access when they were charging top dollar for it.  T-Mobile objected, fearing interference to spectrum it owned nearby (fears that proved not credible).  Civil rights and consumer groups objected to Martin’s insistence that adult content be blocked using imperfect filtering software.  Still others thought M2Z would never be able to cover 95 percent of America within a decade, as required by Martin’s proposal.  Some speculated M2z would launch service, deploy it to major cities, and then petition the FCC to forget about the 95 percent requirement.

Philosophically, many industry groups also objected to the Commission sticking its nose in private company business plans, dictating the services offered by the winning bidder.

Despite some willingness by M2Z to compromise on issues like the “smut filter,” with the remaining parade of opposition it came as no surprise the FCC left M2Z’s proposal on the back burner for the remainder of the Bush Administration.

With the arrival of the Obama Administration, Kevin Martin was out at the FCC.  In came Julius Genachowski and a National Broadband Plan.

The concept on offer from M2Z just didn’t fit the vision of America’s broadband transformation.  Although wireless 3G and 4G networks remained hot topics, other wireless projects have simply not gotten as much attention outside of rural areas.  As many community-owned Wi-Fi services shut down, the concept of free, slow-speed broadband just wasn’t a hot topic any longer.  Even worse, approving a plan offering speeds well below the FCC’s proposed definition of broadband threatened to muddy the message America needs faster access.  Last week, the FCC quietly sent word to M2Z that they had rejected their proposal, effectively killing the venture.

How broadband advocates frame broadband expansion can be critical to the plan’s success.  Critics already opposed to broadband stimulus programs could argue M2Z offered a free market, privately-funded solution to Internet adoption without spending billions of taxpayer dollars.  Although 768kbps would offer little to solve the digital divide, totally free access isn’t something easily ignored, even if M2Z was never capable of extending service to 95 percent of the country.

But in the end, vociferous objections from AT&T, Verizon, and T-Mobile were probably the primary reason for the plan’s ultimate demise.

After all, if you could get free wireless access at speeds comparable to what several carriers realistically deliver to their 3G customers today for upwards of $60 a month, would you remain a paying customer?

[flv]http://www.phillipdampier.com/video/C-SPAN M2Z Networks The Communicators 10-11-07.flv[/flv]

In October 2007, C-SPAN’s “The Communicators” spent 30 minutes discussing the state of competitiveness in American broadband and how M2Z planned to shake up the duopoly.  Three years later, the duopoly remains and M2Z’s plan is dead.  (29 minutes)

Phillip "It's Haunting Time for AT&T, Verizon and their good friends at Digital Society" Dampier

Imagine if you lived in a country where broadband competition actually delivered real innovation and savings, overseen by a consumer protection agency that made sure providers in a barely competitive marketplace actually delivered on their “highly competitive” rhetoric.

Australia’s National Broadband Network (NBN) will deliver exactly that, with a check and balance system that makes sure advertiser claims meet reality and that “robust competition” means… robust competition.

One industry-backed front group, Digital Society, doesn’t think that idea is fair to big telecom companies (like those funding its operations), and wants none of that here in the States.

Nick Brown doesn’t object too much to Australia’s plan to deliver fiber-to-the-home connections offering 100/50Mbps service to 93 percent of residents.  He just doesn’t want the Australian government overseeing how private providers use (and how much they can charge to access) the publicly-owned network:

Internet Service Providers in Australia will be forced to compete with each other via the “Competition and Consumer Commission”.  The problem with this is that a supposedly ubiquitous commission deciding what is and what isn’t competition and fair pricing stands a fair chance of not actually playing out in any other fashion than simply being a price fixing commission.

[…]Because the NBN will only act as a wholesaler and treat all ISP retailers equally, ISP’s no longer have the ability to develop their own unique contracts that would reduce costs to consumers.  All backhaul would be priced to all ISP’s at the same rate.  So realistically no company has a significant advantage over the other.  That does potentially create a good deal of choice, but that does not necessarily ensure competition.  This would be akin to going to the grocery store and on the shelf were 5 different brands of soft drink, but every single brand tasted exactly like Coca-Cola.  You would have a lot of choice in that situation, but there would be no real competition between those 5 brands, because taste is the competitive factor.  For the Australian, this means that ISP’s will likely be forced to start bundling services to gain advantages over one another.  Something that is not always considered attractive here stateside.

NBNCo is responsible for the deployment and installation of Australia's fiber to the home network.

Brown’s bitter-tasting public-broadband philosophy is based on the inaccurate notion that incumbent private providers are just itching to deliver state-of-the-art broadband service across Australia.  If the darn federal government didn’t get in the way and steal their thunder with a nationwide fiber network, Aussies would be enjoying world class Internet access over copper phone wires and usage-limited wireless 3G networks right now.  Even worse, the Australian government that will finance the entire operation also has the temerity to set ground rules for private companies reselling access to consumers and businesses!  How dare they oversee a network bought and paid for by Australian taxpayers (he objects to the funding as well.)

Brown must also still be living in Australia if he missed the parade of American providers repricing services to push people into “triple-play bundles” whether they want them or not.  And we don’t even get the fiber to go with it.  For most Australians, they no longer care whether it’s Diet Coke, Pepsi One, Cherry Coke, or even RC Cola for that matter — as long as it arrives on a fiber network built by and for their interests (instead of Telstra’s), it’s far better than what they have now.

In reality, broadband issues hold a front-and-center position in Australian politics, and the Labor Government which supports an aggressive national broadband plan that puts America’s proposed broadband improvements to shame was -the- issue that keeps that government in power today.  Why?  Because Australia is well behind others in providing broadband access at reasonable speeds and prices.  Australian private providers maintain a nice little arrangement delivering sub-standard, near-monopoly service at some of the highest prices around, all usage-limited and speed throttled. Despite years of negotiations with big players like Telstra, the privatized phone company, broadband improvement has moved at a glacial pace (too often by their design).

The development of the National Broadband Network for Australia was driven by private provider intransigence.  Even Brown recognizes the logistics of the proposed fiber network is “very smart and very common sense” for a country like Australia, which he considers a close cousin geographically to the United States.  Brown also admits the use of fiber straight to the home “‘future proofs’ Australian networks and would allow for easier improvement in the future.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ABC Radio Battle of the broadband 8-11-2010.mp4[/flv]

ABC Radio National offered a comprehensive review of the competing plans from Australia’s political parties to address broadband issues as the country drops to 50th place worldwide in broadband excellence.  (9 minutes)

While Australia ponders a fiber future, today’s broadband picture across the country is less idyllic.

The minority of Australians receiving service over cable broadband, available mostly in the largest cities, continue to face usage-limited service and higher prices than American providers.

Most Australians get their service from DSL connections offered by Telstra and third party companies leasing access to Telstra facilities.  Telstra’s network is based almost entirely on aging copper wire that cannot deliver broadband to most rural populations.  Telstra’s long term broadband plan for Australia depends on milking every last cent out of those copper wires while raking in even bigger profits from usage limited and expensive wireless data plans.  Just last month, Telstra was fined $18.5 AUS million dollars for monopolistic behavior by impeding competitive access to its telephone network.  No wonder the country had enough.

Brown labeled the Australian government’s buyout of Telstra’s copper wire network a “negative,” as if they were stuck with a pig in a poke.  That suggests Brown does not understand the actual plan, which relies on reusing existing infrastructure like poles and underground conduit to install fiber at an enormous savings — both in billions of dollars in reduced costs and deployment time.  The alternative would require the government to obtain agreements with Telstra-owned facilities to share access or construct their own facilities from the ground up.  Telstra has no incentive to spend money to upgrade their networks, much less decommission them.  Logistically, the plan cuts through enormous red tape and guarantees Australians no one will be stuck waiting decades for the eventual retirement of copper phone wiring.

Call it Fiber Optic Broadband for Copper Wire Clunkers — the government has not nationalized the phone network — it wants to buy it a fair price, from a willing seller who will be able to use the new network to deliver some of its own services.

The horror show for groups like Digital Society is the thought private companies will actually be forced to deliver the competition and real savings they routinely proclaim in press releases, but never actually deliver to consumers.  The Australian people will own the fiber playground private companies will play on, so why shouldn’t they have the benefit of oversight to make sure the game is played fairly?

Australia’s Competition & Consumer Commission is equivalent to the Consumer Product Safety Commission, the Federal Trade Commission, and a state Attorney General all rolled into one.  The ACCC is an independent statutory authority that works for consumers.  It promotes and enforces real competition and fair trade.

The ACCC’s involvement in broadband regulation includes: stopping false advertising, helping intervene and resolve disputes over access and billing issues, and being an impartial observer about broadband uptake and measuring how competition actually delivers better service and savings for consumers.

What Brown dismisses as “a price fixing commission” is in reality a consumer protection agency with enforcement teeth.  The ACCC has a solid track record.  For instance, the broadband industry in 2009 itself admitted the ACCC stopped a “race to the bottom” in wild advertising claims:

In August last year, we sat down with the CEOs of the major telecommunication providers, Telstra, Optus and Vodafone Hutchison Australia. They acknowledged that there was a problem, exacerbated by a “race to the bottom” by industry participants in their advertising practices. The CEOs showed a ready willingness to resolve the issue on an industry-wide basis.

After analysing complaints, the ACCC identified the 12 most prevalent types of potential misleading conduct made in telecommunications. Some of these included:

• use of terms such as “free”, “unlimited”, “no exceptions”, “no exclusions” or “no catches” when this is not the case;
• headline price offers in the form of “price per minute” for calls made using mobile phones and phone cards when there are other fees/charges which are not clearly disclosed; or
• headline claims relating to price, data allowances, total time allowances, speeds and network coverage, where the claims cannot generally be achieved by consumers.

The three industry leaders have provided a court enforceable undertaking to review and improve advertising practices so that consumers are better informed about the telecommunications products they purchase. They have undertaken that their advertising will not make these claims in circumstances where they are likely to be misleading to consumers.

Further the majors have also agreed that they will take reasonable steps to ensure that this commitment will extend to any other players with whom they have commercial agreements which allow them to control the advertising and promotion of goods or services.

Australians are starting to receive consent forms for free installation of fiber broadband in their homes.

I can see why Digital Society, a group partly funded by telecommunications companies, would object to the ACCC stopping Big Telecom’s ill-gotten Money Party-gains.

ACCC also put a stop to promotions that tricked consumers into signing up for mobile data plans that included “free” netbooks, high value gas gift cards, or cash rebates.  The Commission discovered these “promo plans” weren’t giving away anything at all — they simply added the retail cost of the “free” item to the plans’ charges.

The ACCC received a court enforceable undertaking from Dodo Australia Proprietary Limited for the advertising of some of their mobile plans. Dodo had advertised that consumers would receive either an Asus Eee PC, a fuel card or a cash payment when they signed up to a ‘free offer’ plan.

However, cheaper mobile cap plans that did not include the ‘free’ offers were comparable in value and services. After raising these concerns with Dodo, they promptly ceased publishing the ‘free offer’ advertisement and undertook to ensure the affected customers would receive the goods for free, either by way of cash refund or by reducing the monthly charges for the ‘free offer’ plans.

That mean and nasty ACCC, ruining all of the fun for providers delivering tricks and traps for their customers.  Caveat emptor, right?

But the most ludicrous claim of all comes towards the end of Brown’s piece, when he claims the National Broadband Network will leave Australians with even higher priced, usage-capped access:

Australia traditionally has had low bandwidth caps.  Even just five years ago while most Americans were enjoying unlimited bandwidth with their broadband connections, I was living in Melbourne, Australia and was limited to a 1GB cap per month via my Telstra connection.  The likelihood of seeing 100Mb uncapped connections is highly suspect.  Australians may enjoy these speeds, but they will likely be extremely expensive with low bandwidth caps or limited to high priced premium tiers.

Brown can’t blame the private company that delivered his abysmal Internet service without his “free market knows best” philosophy falling apart.  It wasn’t the Australian government that provided him a 1GB monthly usage allowance — it was Telstra, and five years later the company is still usage-limiting Australian broadband consumers.  The National Broadband Network was designed to tackle that problem once and for all.  Brown apparently doesn’t realize the last argument private providers have used to justify usage caps — insufficient overseas capacity — is being addressed by new super-high-capacity undersea fiber cables stretching across the Pacific.  The issue of “usage cap” abatement is among the top bullet points for constructing the NBN.

Brown would be right when he suggests that Australians may enjoy faster speeds, but with low usage caps and high prices — if Telstra was the only company providing the service.  The new network will provide speeds faster than most Americans enjoy, with enormously expanded capacity.  Providers like Telstra have an incentive not to deliver the unlimited service that fiber network can deliver, as it will reduce their profits.  But since any company can access the network and compete, Telstra’s loss in market power will also erode their pricing power.  When a consumer protection mechanism is added, Telstra won’t just be answering to their shareholders’ demands for greater value.  They’ll also answer to the ACCC and the consumers who will pay for and maintain the network.

That may not add up to mega-profits for Big Telecom, but it certainly makes a whole lot of sense to consumers and small businesses who will finally be able to get 21st century broadband at a reasonable price.

Even worse for Digital Society’s friends — AT&T and Verizon — who fund the group through its connection with Arts+Labs, it might provide a blueprint for how America’s broadband future should be built.

[flv]http://www.phillipdampier.com/video/ABC TV National Broadand Network 8-15-10.flv[/flv]

ABC-TV (Australia) debated the merits of competing broadband plans from the incumbent Labor government, which supports a National Broadband Network delivering fiber to the home, versus a cheaper plan from the coalition opposition which promoted a private industry-favored initiative delivering improved broadband only to rural areas.  The Labor government initiative won the day when two rural independent members of Parliament, Rob Oakeshott and Tony Windsor announced they’d support Prime Minister Julia Gillard, giving her the 76 votes required to form a minority Labor government.  Windsor is an enthusiastic supporter of the NBN, telling Sky News “’you do it once, you do it right, you do it with fiber.”  Oakeshott said Labor’s plan to deliver real broadband for the 21st century was a major reason he backed the Labor government.  For the first time ever, fiber optic broadband was the key factor in determining who would govern a country.  (5 minutes)

When Alltel announced the sale of its wireless business to Verizon in 2008, few Alltel customers could have foreseen they’d technically end up changing cell phone providers not once, but twice.  That’s because the federal government ordered Verizon to sell off Alltel’s assets in communities where Verizon already had a substantial market share.  For the sake of competition, the majority of Alltel customers in 18 states affected by the federal government divestiture order will become AT&T customers shortly.

That poses a problem because Alltel’s network and phones use CDMA network technology.  AT&T uses a different standard called GSM.  The two standards are not compatible.  Since AT&T has no intention of operating a CDMA network for Alltel customers, once AT&T converts Alltel’s cell sites to operate on its own network, every Alltel customer will be left with phones and equipment that will no longer work.

To make the deal work, AT&T has agreed to provide, at no charge, comparable brand new phones and other equipment to Alltel customers being moved to AT&T’s network.  No new contract is required, and customers will not be forced to extend one to receive the new AT&T equipment.

But that deal doesn’t extend to handing out free iPhones to Alltel customers.  If you want one of those, you will have to pony up the same money every other AT&T customer pays, and sign a new two-year contract.

This week, AT&T announced it was speeding up the transition, and many customers will be choosing new free phones around the end of this year or in early 2011.  Originally, AT&T expected it would take until mid-2011 to complete network conversions.  Complete details can be found on the AT&T-Alltel Transition Website.

For residents in the north-central United States, the iPhone craze has been something other Americans have experienced.  For much of the Dakotas and Montana, the transition will bring the first opportunity to get the popular smartphone at the subsidized price AT&T offers all of its customers on contract.

The implications of AT&T’s imminent arrival in the area doesn’t seem to bother the other dominant provider – Verizon Wireless.  In South Dakota, AT&T’s entry into the market may cause some to switch to AT&T, if only for the iPhone.  But Karen Smith, spokeswoman for Verizon Wireless in the Great Plains region, says Verizon is confident with the lineup of phones it already offers and remains the nation’s largest wireless carrier even without the iPhone.

Current Verizon customers like Jill Garrigan of Rapid City told the Rapid City Journal she’d consider switching to AT&T to grab the iPhone, but she’d much prefer buying one from Verizon Wireless.

“If Verizon carried the iPhone, I’d probably consider getting it from Verizon,” Garrigan said.

Many other South Dakotans share concerns about the higher monthly wireless bills the iPhone brings, and they’re not interested in paying a lot more just to own one.

Garrigan’s friend, Jessica Simon, said she’ll keep her current Samsung phone, thank you very much.  The reason?  “It’s all the additional money and all the surcharges,” she told the newspaper.

But local cell phone dealers believe the arrival of Apple’s iPhone will cause a sensation across the region, and they’ve already fielded calls from customers anxious to acquire one.

Stop the Cap! has created a map showing the areas due for early conversion for your convenience.

Areas shaded in red are scheduled for early conversion to AT&T's GSM Network (click to enlarge)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Alltel ATT Transition Ahead of Schedule 9-4-10.flv[/flv]

Stop the Cap! has compiled news reports from across the region regarding the AT&T-Alltel transition and its impact on states including the Dakotas, Montana and Wyoming.  Clips courtesy of WDAY-TV Fargo, N.D., KGWN-TV Cheyenne, Wyo., KECI-TV Missoula, Mont., and KFYR-TV Bismarck, N.D. (4 minutes)

Upgrade Specifics

The following counties are on AT&T’s early upgrade list (RSA=Rural Service Area):

Alabama: Greater Dothan area and RSA 7 including Butler, Coffee, Covington, Crenshaw, Geneva and Pike Counties.

Arizona: RSA 5 including Gila and Pinal Counties.

Colorado:  RSA 4 includes Chaffee, Custer, Fremont, Lake and Park Counties. RSA 5 includes Cheyenne, Elbert, Kit Carson and Lincoln Counties. RSA 6 includes Dolores, Hinsdale, La Plata, Montezuma, Ouray, San Juan and San Miguel Counties. RSA 7 includes Alamosa, Archuleta, Conejos, Mineral, Rio Grande and Saguache Counties. RSA 8 includes Bent, Crowley, Kiowa, Otero and Prowers Counties. RSA 9 includes Baca, Costilla, Huerfano and Las Animas Counties.

Michigan: Greater Muskegon area and RSA 5 includes Benzie, Lake, Leelanau, Manistee, Mason, Missaukee, Osceola and Wexford Counties. RSA 7 includes Gratiot, Isabella, Mecosta, Montcalm and Newaygo Counties.

Montana: Greater Billings and Great Falls areas and RSA 1 includes Flathead, Glacier, Lake, Lincoln, Pondera, Sanders and Teton Counties. RSA 2 includes Blaine, Chouteau, Hill, Liberty and Toole Counties. RSA 4 includes Daniels, Dawson, McCone, Richland, Roosevelt, Sheridan and Wibaux Counties. RSA 5 includes Granite, Lewis and Clark, Mineral, Missoula, Powell and Ravalli Counties. RSA 6 includes Broadwater, Deer Lodge, Jefferson, Judith Basin, Meagher, Silver Bow and Wheatland Counties. RSA 7 includes Fergus, Golden Valley, Musselshell, Petroleum, Stillwater and Sweet Grass Counties. RSA 8 includes Beaverhead, Gallatin, Madison and Park Counties. RSA 9 includes Big Horn, Carbon, Rosebud and Treasure Counties. RSA 10 includes Carter, Custer, Fallon, Powder River and Prairie Counties.

New Mexico: Greater Las Cruces area and RSA 1 includes Cibola, McKinley, Rio Arriba, San Juan and Taos Counties. RSA 5 includes Grant, Hidalgo and Luna Counties. RSA 6 includes Chaves, Eddy, Lee, Lincoln and Otero Counties.

North Dakota: Greater Fargo, Grand Forks, and Bismarck areas and RSA 1 includes Burke, Divide, McLean, Mountrail, Renville, Ward and Williams Counties. RSA 2 includes Benson, Bottineau, Cavalier, McHenry, Pierce, Ramsey, Rolette and Towner Counties. RSA 3 includes Barnes, Dickey, Griggs, LaMoure, Nelson, Pembina, Ransom, Richland, Sargent, Steele, Traill and Walsh Counties. RSA 4 includes Adams, Billings, Bowman, Dunn, Golden Valley, Grant, Hettinger, McKenzie, Mercer, Oliver, Sioux, Slope and Stark Counties. RSA 5 includes Eddy, Emmons, Foster, Kidder, Logan, McIntosh, Sheridan, Stutsman and Wells Counties.

South Dakota: Greater Sioux Falls and Rapid City areas and RSA 1 includes Butte, Harding, Lawrence and Perkins Counties. RSA 2 includes Campbell, Corson, Dewey, Potter, Walworth and Ziebach Counties. RSA 3 includes Brown, Edmunds, Faulk, McPherson and Spink Counties. RSA 4 includes Clark, Codington, Day, Deuel, Grant, Hamlin, Marshall and Roberts Counties. RSA 5 includes Custer, Fall River and Shannon Counties. RSA 6 includes Bennett, Gregory, Haakon, Jackson, Jones, Lyman, Mellette, Stanley, Todd and Tripp Counties. RSA 7 includes Aurora, Brule, Buffalo, Charles Mix, Davison, Douglas, Hand, Hughes, Hyde, Jerauld and Sully Counties. RSA 8 includes Beadle, Brookings, Kingsbury, Lake, Miner, Moody and Sanborn Counties.RSA 9 includes Bon Homme, Clay, Hanson, Hutchinson, Lincoln, McCook, Turner, Union and Yankton Counties.

Virginia: Greater Danville, Norton and South Hill areas and RSA 1 includes Buchanan, Dickenson, Lee, Russell, and Wise Counties and Norton City. RSA 8 includes Amelia, Brunswick, Lunenburg, Mecklenburg and Nottoway Counties.

Wyoming: Greater Casper area and RSA 1 includes Big Horn, Hot Springs, Park and Washakie Counties. RSA 2 includes Campbell, Crook, Johnson, Sheridan and Weston Counties. RSA 4 includes Albany, Goshen, Laramie, Niobrara and Platte Counties. RSA 5 includes Converse County.

Last week, Stop the Cap! took a look at Virgin Mobile’s new unlimited $40 prepaid wireless broadband service.  Early testing looked promising, with speed test results that were well within economy tier DSL service and better than expected.  But by early this week the story began to change.

We’ve continued testing the service here and have noticed that while Virgin Mobile’s service turned in respectable performance during the business day (East Coast time), once people started heading home, it’s a completely different story.  For the last five days the service has deteriorated to the point of unusability by dinnertime.

It had gotten so bad, we went back to using Cricket’s wireless broadband.

So what’s happening?

First, it’s important to distinguish that these problems are impacting only Virgin Mobile.  Sprint’s postpaid customers can use the same cell tower and backbone network and not experience any performance issues.  Virgin Mobile’s home location on Sprint’s data network is in San Francisco, and until September 2nd, all traffic headed for the Bay Area to what is basically a virtual LAN on Sprint’s network.  The IP address we were assigned was actually an internal address for that virtual LAN.

Our problems started appearing Monday afternoon when we noticed web pages refused to load completely.  Since many web pages are composed of content from a variety of different web hosts (Google Analytics, advertising, embedded content, etc.), if parts of the page refuse to load, the page itself may not appear at all.  Advertising blocks were the worst problem, often leaving one staring at a blank web page waiting for the ad content to render.

By Wednesday, this problem simply made using Virgin Mobile for broadband untenable.  Few pages — even Google’s home page, refused to load reliably.  When pages did appear, they took longer than dial-up in many cases.  We tried to perform some diagnostics but found trace-routing impossible after the third hop and speed tests could not be loaded, much less run reliably.

The fact the worst problems occurred in the late afternoon and evening hours point to a network completely overloaded with customers.

And indeed, Virgin Mobile admitted as much when it replied to some tweets indicating it had quadrupled capacity by the end of this week.  Some users also reported they no longer connected exclusively through the San Francisco (Walnut Creek) location.

As of Thursday, anecdotal reports indicated some service improvements, but the service is still prone to slowdowns during peak usage times.

A few things are evident now that a week has passed:

1. Virgin Mobile Wireless Broadband does not share the better performing Sprint postpaid data network those customers receive.  Virgin Mobile customer traffic shares a much smaller “pool of bandwidth” because of the limitations imposed by its routing.
2. The company needs to either abandon its current routing scheme or dramatically modify it to accommodate the traffic.
3. Refunds for disgruntled customers are often available for the hardware, but don’t expect to get a refund for data usage.
4. The service problems come regardless of the device used or the number of signal bars you receive.
5. New routing cities have popped up since Thursday to supplement San Francisco — Charlotte, N.C., New York, Atlanta, Boston, Southfield (Mich.), Los Angeles, Philadelphia, and a few others.  Feel free to share yours in the comments section.

On Friday, Virgin Mobile suffered a major outage caused by a power failure that has stopped or seriously delayed delivery of text messages.  The outage is also affecting some data connections and customer service availability.  Angry customers have been pelting the company’s Facebook page with hostile remarks since the outage began.

If you signed up for Virgin Mobile wireless broadband, please share your experiences in our comments section!

It’s alive.

After a day or so of stumbling, Sprint-owned Virgin Mobile’s prepaid, unlimited Broadband2Go service went live early this morning, and Stop the Cap! gave it a try and has some tips to share to save you time and money.

More importantly, a “hidden soft usage cap” of 400GB a month, visible early this morning, disappeared by this afternoon after we made inquiries about whether “400GB” actually meant “unlimited.”  More on that below.

Buying Advice

Virgin Mobile keeps it simple with two mobile broadband devices — the Ovation MC760 ($79.99), about the size of a USB flash drive and the MiFi 2200 ($149.99), a portable “hotspot” that connects to Virgin Mobile’s wireless broadband 3G network and then converts the signal into standard Wi-Fi to share with up to five nearby computers.

We tested Broadband2Go using the Ovation MC760.

Virgin Mobile’s USB modems are about the size of a typical USB Flash Memory device

Our first recommendation is to hurry on down to Radio Shack if you intend to purchase Broadband2Go service.  Best Buy, the other retailer selling the service, inexplicably sells the Ovation MC760 for $99.99, twenty dollars more than Virgin Mobile charges itself.  We didn’t bother to check Best Buy’s in-store price which might be lower because we put together a far better deal at Radio Shack.

You can manage to grab the MC760 for as low as $59.99 by following these steps:

1. If you are new to Radio Shack’s website, your first visit to their homepage should bring a “pop-up” offering $10 off your next purchase of $40 or more (if it doesn’t try clearing out your cookies or launching the site from a different web browser).  Simply supply an e-mail address new to Radio Shack and in a few minutes the coupon will arrive in your inbox.  It can be printed and redeemed in-store or used online.  This cuts the price of the MC760 to $69.99.  But wait, there’s more.
2. Until August 28th, Radio Shack is running a sale offering a $10 instant discount off the MC760.  We first saw this online, but when we visited a local Radio Shack store, we found the same savings in-store.  That brings the price down further to $59.99 because you can combine the coupon with the instant savings, until it expires Saturday night.
3. Many Radio Shack stores insist that you buy at least $10 in “top-up” funds when buying the MC760.  Although this increases your out-the-door price, it’s money you would spend anyway for the $40 a month service. An incredibly long receipt, similar to the one on online quittung, will print at the register, including your PIN activation number to redeem your “top-up” funds on Virgin Mobile’s website.

Radio Shack offers up to $20 off the Ovation MC760 – $10 off for responding to this pop-up on their website and another $10 instant discount good until Saturday night.

Radio Shack stores stock both the old box-format packaging for the MC760, and a newer plastic security-sealed “clamshell” package (the one you’ll slice your fingers on when trying to get the thing open.)  There is no real difference between the two other than the packaging.

Getting It Activated

Although Virgin Mobile claims the Ovation MC760 works with Windows XP, Vista, Windows 7 and Mac OS X, 10.3 & higher, we found advice for Mac owners using older versions of the OS.  Check out this information for how to bootstrap the MC760 to work with your older Mac computer (your results may vary and don’t expect Virgin Mobile technical support to provide assistance.)  Linux users using Ubuntu found some success installing the MC760 as well from this website and this blog.  Let Google be your friend if you are running an unsupported operating system.

For new Virgin Mobile customers, the activation process is very simple.  You just plug in the device and the included software will automatically load and prompt you for installation.  After the process is complete, you will see a connection manager pop up.  Your first indication of signal strength will also be apparent, but do not be alarmed by the indicator showing only a connection to Sprint’s 1xRTT network.  Users do not access Sprint’s faster 3G EV-DO Revision A network until activation is complete.

Several slowly loading screens will appear during activation asking for your contact information, the zip code of where you intend to use the service the most, and payment details.  At the end, you are assigned a broadband “phone number” which serves as your account number, based on the zip code you provided earlier.

Things get complicated, however, for existing Virgin Mobile customers.  Many of those who anticipated the arrival of the service and pre-loaded their voice accounts with additional “top up” funds will discover there is no way for Virgin Mobile to activate your Broadband2Go service under your existing Virgin Mobile account.  A separate, new account must be established for the broadband service.

However, with the help of a customer service representative, you can transfer funds between your existing voice account and your new Broadband2Go account.  You’ll need to call a special toll-free number which will take you directly to Broadband2Go’s customer service department — 1-877-877-8443.  At the voice prompts, indicate you are a new customer and that you want “tech support.”  Expect at least 10 minutes of hold time and an overseas call center representative to answer.  There is no elevator music on hold with Virgin Mobile either.  You’ll hear plenty of rap and alternative music mixed with greetings from current hit artists.

The tech support representative will handle your Broadband2Go activation over the phone.  Have the device and a pen and paper handy.  Allow 10-15 minutes minimum for the representative to gather information or transfer details from your existing account to the new account.  The tech support rep will then transfer your call to the business office to handle the transfer of funds between accounts.

Our Experience

Phonenews also discovered Virgin Mobile’s “unlimited” service had a 400GB usage cap this morning…

After activation, the device reset and we found ourselves suddenly connected to Sprint’s EV-DO network with an average of three bars of signal strength.  Sprint’s nearest tower is about 0.75 miles away from our home in a flat terrain residential area.  Still, we found indoors the signal level could decline to the point the connection fell back to the far slower 1xRTT connection.  Outdoors, the connection manager’s signal level spiked to full strength.

Although Virgin Mobile sells the service as “unlimited,” the website included a usage counter this morning that stated we had just over 400GB of usage remaining.  While extraordinarily generous, that’s still not “unlimited” in our book and we asked Virgin Mobile about it.  Their explanation? It was a “soft usage cap,” and although they didn’t expect anyone to actually hit that level of usage on a relatively slow broadband connection, if they did, customer service would reset it to zero upon request.  We asked why it was included at all on an unlimited service?  We were told it was a software issue — the website was designed for usage-limited broadband measurement.  Considering the performance of 3G wireless networks, it’s not likely many would ever hit it, especially because you would need to be running traffic almost continuously across the connection to reach it.

Nevertheless, we’re pleased to report that as of this afternoon, the 400GB limit is gone, replaced by a usage counter that plainly states “unlimited.”  We applaud Virgin Mobile for rapidly responding to concerns that “unlimited” didn’t actually mean “unlimited.”

…but not for long. As of this afternoon, even that generous usage cap was gone.

One concerned reader dropped a note to Stop the Cap! wondering about something seen in the terms and conditions about “unlimited mobile Internet (but not unlimited downloaded content).”  We couldn’t find those terms and conditions, and if they were included as part of the online activation process, that’s something we missed as we had to activate by phone.  We can only think that may have something to do with the company’s Acceptable Use Policy for data products.  Like other wireless providers, Virgin Mobile does not want customers using their service for “web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing or other systems that drive continuous heavy traffic or data sessions.”  P2P traffic, in particular, is usually a painful experience for both the wireless user and provider.  These kinds of terms and conditions are commonly found in wireless provider agreements.  We’d have a problem with Virgin Mobile if they joined some wireless ISP’s in banning use of online video, but they have not.

So does Virgin Mobile’s marketing of its unlimited Broadband2Go service pass the Stop the Cap! Honest Marketing Test?

The company claims: “Speed varies based on location and coverage with average downlink data speeds between 600 and 1400Kbps. Virgin Mobile does not restrict your speeds based on data usage caps.”

At first glance, we suspected that 600Kbps speed might be a little higher than what real-world users would actually encounter.  Signal strength can steal a lot of speed and if Sprint’s nearest cell tower encounters heavy usage at peak times, speeds can drop dramatically.

We ran several speed tests from different server locations, because results can vary dramatically.  Here is what we found from our location in Rochester, N.Y.:

Speedtest.net recommended a speed test server in the San Francisco area.  Our first test showed reasonable 3G speeds.

Interestingly, using a local speed test site showed better downstream results, although upload speeds suffered somewhat.

Finally, a speed test result using a Los Angeles test server that performed well.

Virgin Mobile’s speed and marketing claims do pass the Honest Marketing Test, although we feel they should more openly disclose the ban on P2P traffic.  It’s likely not enforced, if only because most users would grow impatient with the poor results.  Although we have not had a chance to test the robustness of Sprint’s data network and how well it hands off data signals between tower sites or peak usage, the browsing experience was definitely superior to that of the other wireless broadband service we tested — Cricket Wireless.  The speeds were better, too.

There is no way to tell whether Virgin Mobile’s owner Sprint will ultimately be able to sustain the service should a flood of new customers saturate their 3G network.  It’s a shame that although Virgin Mobile uses Sprint’s network, they do not currently allow access to Sprint’s much-faster 4G network.

Our Recommendation

For those lucky enough to have good wireless signal coverage from Sprint and are currently stuck with Hughes or Wildblue satellite fraudband service — your day has come.  Stop the Cap! can heartily recommend Virgin Mobile’s unlimited service as a great alternative to either provider.  We can also recommend this service to those stuck on .768-1.5Mbps DSL, especially if the phone company is charging you more than $40 a month for tortoise-slow DSL service.  For those on the go, this is also a great choice, assuming where you go is within Sprint’s coverage area.  Broadband2Go can even provide an effective backup if your primary Internet provider goes down.  But we do not recommend it as a replacement for higher speed DSL, cable, or fiber delivered broadband.

Because Sprint’s coverage is more spotty than AT&T or Verizon, it is important to consider where you will use the service.  Those on the edge of coverage areas may experience considerably poorer service, or none at all, when indoors.  Sprint locates their towers inside major metropolitan areas and along major highways that connect those communities.  If you are uncertain whether Broadband2Go will work where you want to use it, you can consider buying the MC760 with $10 worth of usage, which will provide 100MB of usage within 10 days.  If it doesn’t work well for you, return the modem and be out only $10 worth of usage.

Those who like the service can either top-up your account automatically to cover the $40 monthly fee with no interruption in service, or just pay for the service when you need it.  There is no activation/re-activation fee.

Overall, our first impressions are positive, although we wished existing Virgin Mobile customers could link the service to their existing accounts.  Over the next few days, we’ll take the service on the road and see how it fares.