Washington County, New York

Washington County, one of New York’s many rural counties, sits on the eastern border of the state adjacent to Vermont.  Its 62,000 citizens have access to dial-up, some areas have been wired by Time Warner Cable, and some others have access to Verizon DSL service.  But vast swaths of the county have no choice for broadband at all.  The Washington County Board of Supervisors wants to do something about that and will vote this week on a proposal to spend $40,000 to study how Washington, in cooperation with Warren and Hamilton counties, could benefit from a wireless broadband network being proposed by Plattsburgh (N.Y.)-based CBN Connect.

CBN Connect is a non profit corporation that constructs broadband platforms and networks it resells to commercial providers who will not construct such networks themselves.  CBN Connect’s website states “providers like Time Warner (Cable), Primelink, Westelcom, and others [can use their networks] to reach new customers.”

CBN Connect has plans to develop both fiber optic and wireless networks across New York’s “North Country” in eastern upstate areas.

No details about the type of wireless network under consideration were available.

Readers of The Post Star, which serves the county, had some problems with the country spending $40,000 of taxpayer dollars on the study:

“We are actually thinking of spending $40,000 to fund a private company’s “study?” If CBN wants to sell their services, which I am guessing they will profit on, let them fund whether it is feasable or not. This money can be better spent in other areas of the county, or better yet, don’t spend it at all.” — Whall01

“If there’s a demand (home or business) then the providers (Time Warner Cable, Verizon, CBN Connect) will do their own study (and fund it) to see if it makes sense to them. If they don’t, then they won’t be in business long. Washington county supervisors need to figure out how to cut expenses and overhead, not add to them.” — HFRES

“What a waste — $40,000 for a study to bring broadband to the community? FiOS is the technology that we should be looking into.  Why are our counties always a day late and a dollar short of keeping up with the rest of the world? These counties should be joining together to get Verizon here and bring us FiOS.” — Enoughalready

Mark Cuban, owner of HDNet, maintains a personal blog

Mark Cuban is on another tear this week.  Stop the Cap! reader Michael referred us to the latest.  This time it’s TV Everywhere, the cable industry’s answer to online video they get to own and control.

TV Everywhere is a concept put out by TV distributors that basically says that if you pay for cable or satellite, you should be able to watch the content you want, where you want. Everywhere. To some people this is not a good idea.  As is always the case,  many people think tv programming should be widely available for free on the internet.  Of course the content is never free. Someone has to pay to create it and we purchasers of cable and satellite services pay the subscription fees that pay the content companies and allow them to create all that content. Someone always must pay for free. Its unfortunate that there are some incredibly greedy people who think their entertainment needs should be subsidized. We aren’t talking healthcare, we are talking The Simpsons.  No one in the country has the right for their Simpsons to be subsidized.

I am uncertain why Mark is tilting at windmills here, fighting a battle with arguments that are beside the point.

He should know, as an independent programmer, permitting another cartel for video program distribution online has the potential to place control of that content in the hands of the pay television industry.  Agreements to carry a cable network on a cable system could easily become contingent on participation in TV Everywhere once it becomes more established.  Mark knows all about restrictive carriage agreements.  Some of his networks were trapped in a mini-premium HD tier on Time Warner Cable, despite his wishes to see them a part of the general HD lineup.  Once Time Warner Cable threw his networks off their cable systems nationwide, presumably so would go our online access to it as well.

For consumers, the basic concept of TV Everywhere seems like a positive development, if it brings online video content people want to see without charging them yet another fee on their pay television bill.  Consumers, raise your hand if you have a problem with more online video.

In fact, the loudest concerns about the entire endeavor these days are coming from the content producers and owners themselves.  They are the ones worrying about giving content away.

The Wall Street Journal chronicles the concerns:

While 24 networks are taking part in the Comcast trial, including Time Warner’s Turner cable networks, broadcaster CBS, AMC, BBC America, and Hallmark Channel, Walt Disney Co. (DIS) has so far avoided the “TV Everywhere” experiment because it doesn’t offer the Disney networks enough money in return for allowing their shows to be streamed over the Web.

“A new opportunity to reach consumers is very attractive … [but] we want to do so in a way that delivers proper compensation [to us] for that value,” said Disney Chief Financial Officer Tom Staggs, who spoke at the Goldman Sachs media conference on Tuesday.

That brought out Jeff Bewkes, Time Warner CEO, who scoffed at the demands for compensation.  Bewkes reminded Disney who is paying the bills.

“[The content providers are] not the ones who are going to the effort and expense of making this possible,” he remarked. “The ones that are making this possible are the distributors – the telcos, the satellite companies, the cable companies.”

Second, nobody is arguing that TV programming should be given away “free” online with absolutely no compensation.  The existing online video models are primarily advertiser supported.  The advertisers pay the costs to make the service available, and viewers endure online commercials during each ad break.  Some networks want to cram a ton of ads equaling the number a viewer would see on their television (get ready for more Snuggie and door draft stick on tape ads). Others are more realistic and will place a maximum of 30 seconds of commercials during each break.  Finding the right balance will be important — too many ads and consumers will pirate the content to avoid the ads.  Run smaller amounts and consumers will easily tolerate them.

Third, nobody I am aware of is arguing TV needs to be “subsidized.”  What does that even mean?

Besides the skirmish between content providers and the companies that want to distribute TV Everywhere, the concerns I’ve seen expressed include:

• The concentration and control of online video content through a cable industry-controlled authentication system that is long on generalities and short on specifics regarding how it will operate.  How do non-cable subscribers get “authenticated.”  What procedures are in place to protect the competitive data other providers will have to share with any authentication process?  How about customer privacy?  Is there equity of access to TV Everywhere regardless of the pay television service the consumer subscribes to?
• The credibility of the broadband providers’ argument that their networks are already overcrowded to the point they must “experiment” with usage caps, consumption billing, and other Internet Overcharging schemes.  Apparently their networks aren’t nearly as congested as they would have us believe, considering the fact they are participating in a project to place an even greater load on those networks.
• Mark seems to support content portability, namely the ability for a subscriber to place that content on any device for viewing.  Good luck.  Content producers go bananas over content that can be downloaded and viewed on any device or computer, because such open standards are also open to rampant piracy.

TV Everywhere can be a consumer value-added service for pay television providers, if it’s handled in a consumer friendly way.  The cable industry does not have an excellent track record of keeping their customers in love with them.  My personal concern is that what TV Everywhere gives away for free to “authenticated” subscribers today will tomorrow be packed with advertising, carry an additional fee for access on your cable bill, and will be just one more excuse to try and ram usage caps and consumption billing down the throats of the broadband customers trying to take advantage of their broadband service.

Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem

Another year, another rate hike for millions of Comcast customers.  The cable company is notifying cable subscribers of rate increases for programming and equipment.  While Comcast says the rate increases are among the lowest the company has implemented, the sting will be felt differently based on the types of services a customer receives.  One particularly nasty increase is for the cable modem rental fee.  In most areas, that used to be $3 a month, but is now increasing a whopping 66% to $5 a month.  Comcast blames the increased equipment expenses incurred upgrading their broadband network.

Consumers can avoid the monthly rental fee by purchasing their own cable modem, retailing for $60-100 depending on the model.  A Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem is available from Amazon.com for less than $90 and works with Comcast.

Although not every Comcast customer rents a cable modem from the company, the company will earn hundreds of millions of dollars in new revenue from the rate increase for cable modems, according to Multichannel News.

The Marin Independent Journal crunched the numbers:

In the San Francisco area, where Comcast has 2.2 million customers, the average rate increase will be 1.6 percent, down from a 4.9 percent spike in 2008-09 and a 6.9 percent jump in 2005-06.This year’s rate increase is the lowest in the past six years in what has become an annual rate hike for Comcast customers. The company has raised rates on its average Marin customer by a cumulative 29.5 percent over the past six years, based on the company’s annual notices of price changes.

The San Jose Mercury News observes that the rate increases will hit some harder than others:

Ironically, the customers who will see their rates increase are those who subscribe to the company’s lowest-end — and least-enhanced — packages. Subscribers to Comcast’s more expensive packages generally will see no rate increase.

Mindy Spat, communications director of The Utility Reform Network, a San Francisco-based consumer advocacy organization, said Comcast appears to be taking advantage of its lower-end customers.

She noted that many Bay Area consumers who were unable to tune in the new digital broadcast signals signed up for limited basic cable to continue to get the local channels after the old analog ones were switched off earlier this year. With the increases, Comcast also appears to be trying to push customers into higher-tier packages, she charged.

“If consumers had choices, they certainly would not choose Comcast,” Spat said. “But they don’t, and Comcast is taking advantage of the fact.”

Of course, the only thing not increasing this year is Comcast’s 250GB usage cap.  It remains locked firmly in place at 2008 levels.  How much Comcast will recoup from a perpetual modem rental fee providing up to $300+ million a year in new revenue is an open question.  But clearly some cable operators intend to pay for upgrades to their networks by means other than forcing consumers into consumption billing schemes.

Cricket has a nasty habit of selling customers an unlimited mobile broadband service… that is limited to 5GB of usage per month.  Today, the company announced it would be expanding its prepaid wireless broadband service to “big box” retail stores nationwide:

Cricket Broadband will soon be available in nearly 1,000 national retailer stores through a new all-inclusive $50 monthly service plan. The new plan will include all fees and taxes and provides unlimited Internet access without a signed contract or credit check. The Cricket A600 modem will be available as a grab-and-go offering for $69.99 with no activation fee. $50.00 top-up cards will also be available for this product.

The marketing on their website underlines the point: “With unlimited broadband access you can email, surf and download from your desktop or laptop anywhere in Cricket Broadband’s coverage areas.”

“Unlimited” in their marketing is actually “5GB” in the nitty-gritty details on their website as you sign-up:

Subscriber Management
We reserve the right to protect our network from harm, compromised capacity or degradation in performance. We reserve the right to limit throughput speeds or amount of data transferred, and to deny, modify or terminate service, without notice, to anyone whose usage adversely impacts our network, service levels or uses more than 5 GB in a given month. We may monitor your compliance with the above but will not monitor the content of your communications except as otherwise expressly permitted or required by law.

Cricket needs to discontinue the practice of referring to a service as “unlimited” when it isn’t unlimited at all.  Cricket is also well aware of the 5GB limitation, because it is currently testing a 10GB plan priced at $60 a month.

Cricket has also applied for federal broadband stimulus funding to provide service to low income residents:

Low-income residents in San Diego County who can’t afford Internet service may get some financial help if a local wireless provider succeeds in getting more than $8 million in federal stimulus funds to expand broadband access.

San Diego-based Cricket Communications said yesterday that it has applied for federal Recovery Act funding geared to expanding high-speed Internet access not only in more remote rural areas but also to the urban poor.

Cricket is proposing a $10.7 million program to provide subsidized, low-cost Internet service to 23,000 low-income families in San Diego, Baltimore, Houston, Memphis, Tenn., and Washington, D.C.

Under the proposal, the federal government would cover 80 percent of the cost, with Cricket picking up the remainder. Cricket, a wholly owned subsidiary of Leap Wireless International, is working with One Economy, a Washington, D.C., nonprofit, to help it reach out to low-income households.

In addition, it plans to substantially discount its normal monthly service of $40 so that participants would pay $5 a month the first year and $15 a month the second year. The grant would cover two years of subsidized service.

As for Cricket’s new broadband plan, I’m unsure what’s new about it.  It appears to be priced $10 higher than the old $40 Cricket plan (that comes with a $25 activation fee).  The A600 modem is available for free after rebate from the Cricket website, and the service price there remains $40 a month, although “taxes and fees” are extra, which may account for the primary difference between the two plans. Cricket appears to be moving to “all-inclusive” pricing strategies, which means the price you see is your “out the door” price. Many consumers are shocked when signing up for a mobile phone service that is advertised at one price, and turns out to be considerably higher once taxes and fees are included on the bill.

The A600 offers average download speeds of 538 kilobits per second (Kbps) and peaks at 787 Kbps. The average upload speeds offered by this modem are of the order of 502 Kbps, according to a PC Magazine review.

[Update 9/22: A response from Zocolo Group on behalf of Cricket can be found in the comment section of this article.]

Communications and Information Technology Minister Hon. Steven Joyce

New Zealand, long ranked near the bottom of the barrel in broadband according to OECD rankings, will embark on a $1.5 billion (NZD) national broadband initiative, with a publicly-owned fiber network as its hallmark.

The plan, which will give urban and suburban New Zealand residents access to speeds faster than commonly available in the United States, will reach three-quarters of the population within the next ten years.  New Zealand has discarded the “wait around for the private sector” approach, which has left the country with stiflingly slow and heavily capped broadband at high prices.  Instead, it will create an open access fiber optic network on which private providers can compete and offer consumers the speeds they desire.  Communications and Information Technology Minister Steven Joyce issued a statement explaining why the government was getting involved:

Private sector companies have decided, on behalf of their shareholders and as a commercial decision, not to invest in a nationwide network of fibre-to-the-home at this point in time.  The government understands this, and so wishes to assist and work with the private sector in improving the business case for ultra-fast broadband.

The government is also getting involved in order to encourage the provision of widespread open access dark fibre services, which will facilitate the best possible competition outcomes in emerging markets and encourage innovation in wholesale and retail services.

For residents in 33 communities across the country targeted for access to the new network, it cannot come soon enough.  For many of them the most important issue, even beyond speed, is an end to what one Henderson resident called “the current crap called ‘data caps.'”

“The speed of the broadband is meaningless compared to the tiny data caps involved.  On the current slow broadband, I use up my 50GB data cap 12-15 days into the month.  Ultra fast broadband would only be useful with no data caps involved, because the existing broadband speed is twice as fast as the cap already,” Lucy in Auckland told the New Zealand Herald.

Rose in Glenfield agrees:

“We have a 20GB data cap that we chew through in about 10-14 days, and then we are stuck on 64kbps or we have to pay another $30 for another 20GB to get through the rest of the month. When are they going to address these kinds of issues,” she asks.

New Zealand has seen the impact of Internet Overcharging schemes for years.  Providers originally introduced ‘data caps’ to reduce the usage on their networks, but have since relied on them, and consumption billing also as a way to collect revenue.  Most residential customers endure usage caps of 20-50GB per month.  After that, some providers dramatically reduce their connections to just above dial-up speed, while others have found new revenue by charging customers $2/GB or more in overlimit penalties and fees.  Some offer additional usage allotments, but at high prices, such as $30 for 20GB of additional usage.

The result has been a dramatically lower adoption of broadband in New Zealand, and many don’t think it’s worth the money.

John Rutter in Howick suggests speed is secondary to dealing with the issue of loathed usage caps.

“I like the idea of a ultra-fast broadband investment initiative but I hope Internet service providers like Vodafone, Slingshot, and Orcon will provide unlimited Internet soon. Unlimited Internet should come first, then ultra-fast broadband,” he said.

The government has received public support for its broadband initiative.  The public benefit is a much faster “public highway” on which private providers can offer service to individual customers.  By constructing a fast pipeline publicly that no provider is willing to provide privately, it creates additional value for consumers who find faster, more reliable service, preferably on better terms.

“Already a number of companies have shown interest in the government’s broadband initiative,” Joyce said in a statement. “It’s time to get on with finding the right partners to build these networks.”

The government “is prepared to accept a less than commercial return” from the partners. It aims to hold less than 25 per cent in the partnered investment vehicles and will resist contributions of more than 50 per cent.

For rural New Zealand, the answer generally won’t come from a fiber-based strategy, Joyce says.  Instead, the government estimates $300 million will be needed from public and private sources for a rural broadband plan.  Significant portions of New Zealand are difficult to reach with traditional broadband networks, and many New Zealand residents in even medium sized outlying towns find themselves on long waiting lists for what service is available.

Steve in Wellington told the Herald “a lot of towns (like Richmond, Tasman and Rolleston – not just remote areas) have issues where due to lack of exchange space many people cannot get broadband or are on ‘port waiting lists’ waiting for ports to become available. I think the main issue should be ensuring access to broadband full stop. Not just faster for those lucky enough to already have it.”

Rural broadband through wireless is one initiative under consideration.  WiMax technology can deliver fast broadband to rural area, often at faster speeds than traditional telephone company DSL in rural communities.