“It helps no one if broadband subsidies flow to ‘overbuilders’….” Matt Polka, American Cable Association CEO

“We will have government-created competition.” Cable One senior vice president and chief sales and marketing officer Jerry McKenna

America’s cable companies are having fits of anxiety over $7.2 billion dollars in broadband stimulus money that isn’t just going to fall into their laps.  “There are a lot of strings on that money,” one executive told Multichannel News this week in a piece that truly feels for the plight of the nation’s cable operators, concerned that billions of dollars could end up stimulating competition in the rural broadband marketplace.

The horror.

Granted, there are some concerns with some specific conditions which will likely represent little or no impediment to big regional telephone companies, and those like Frontier Communications, which specialize in servicing rural customers (and will likely apply for a substantial amount of broadband stimulus money), but will potentially lock out a lot of “mom and pop” operators.

Among them are requirements that a “first lien” be granted to the Rural Utilities Service, a USDA government-run administrator of the broadband program.  That has some banks, which small providers would likely use to finance some up front construction costs, up in arms.  A first lien would leave the government first in line for any asset recovery from a failed project, not the bank.

But some small providers are also upset with a requirement that any completed projects be held within that provider’s portfolio for a minimum of 10 years.  That provision, according to government officials, was added to prevent bottom feeder “flippers” from creating new companies tailor-made to fit broadband grant criteria, receive substantial amounts from the government to build projects, and then quickly sell them to the highest bidder when complete, pocketing the profits.

But the overwhelming concern expressed by 70% of cable operators surveyed by the American Cable Association at their ACA Independent Show held in late July is the fear of competition.

Many small-operator executives said that they feared the broadband stimulus would create competition — one said the money would go to “charlatans who would ruin the business.”

Cable One senior vice president and chief sales and marketing officer Jerry McKenna, who after his panel session at the show said that his MSO will likely apply for two or three broadband projects, was even more direct.

“We will have government-created competition,” he said.

As a result of the realization that free government money was simply not going to fall from the sky into their hands, many of the nation’s cable operators have stomped their feet and thrown fits, finally resulting in more than half declaring they were either not likely or absolutely certain they would not apply for a penny.  It’s their hope the federal government will see a dearth of applications, assume the process is too onerous, and dramatically loosen up the rules.

“If they get an overwhelming number of applications, the administration will see this [program] as a success,” American Cable Association director of regulatory affairs Ross Lieberman said at the show. “If there are not that many applicants, if there is no incumbent interest, we can expect changes to this program.”

Changes have already been made at the behest of lobbyists, who are now given a freer reign to pursue broadband policies more amenable to their clients.  Also changed are the definitions of what constitutes an underserved or unserved area, and with the broadband mapping project at risk of being run by the providers themselves, those definitions could eventually become meaningless anyway.

But providers fearing an “overbuilder,” a competing company that strings its own cables and provides true competition, need not panic just yet.  As they nail bite about the decision to apply or not apply for broadband stimulus money, risking if they don’t a competing provider may, the government has graciously provided a 30 day window for incumbent providers to submit a formal challenge of other applicants for up to 30 days after the deadline.

Every application will be publicly posted online at BroadbandUSA.gov.

Telecommunications providers have convinced the Commerce Department to stop asking too many questions about the Internet service their customers receive, including the fees providers charge and the speeds provided, because the information is “proprietary” and “useful to our competitors.”

It’s all a part of the federal government’s broadband mapping project — to create detailed maps showing who has access to what types of broadband, at what speed and at what price.  Those areas deemed underserved would be eligible for substantial broadband stimulus grants, paid for by taxpayers, and likely will be received by many of the same ISPs who are telling the government to butt out of their private business affairs.

In lieu of the detailed customer information the Commerce Department had been seeking, Verizon, Comcast, and AT&T have agreed to provide generic data about prices charged on a per-block basis and will also clue in the government as to the maximum speeds marketed to consumers, even if those speeds are not actually provided to individual customers.

Consumers Union was not happy with the Commerce Department’s decision, likening it to a cave-in.

Because the federal government will not allow the public to learn about the actual speeds achieved by customers, companies can continue to market and charge for an Internet service that doesn’t come close to achieving the speeds promised in advertising, according to Joel Kelsey, a telecommunications policy analyst for the consumer watchdog.

ISPs, particularly telephone line-based DSL service, routinely advertises speeds “up to” a certain level, but never guarantees those actual speeds will be achieved by customers.  DSL service is sensitive to the quality of the telephone line and the distance of the cable between the customer’s home or business and phone company facilities.  Longer distances always mean lower speeds, often much lower.

Cable companies rely on a shared bandwidth model, which means every home in a neighborhood shares a set amount of bandwidth.  The more users on the system, the slower the maximum speed.  In areas where cable companies have not upgraded service, or split neighborhoods up to reduce the number of residents sharing one “node,” speeds can dramatically drop at peak usage times.

“The actual speeds delivered to particular areas simply doesn’t match up,” Kelsey said. “The government gave a lot and received very, very little in return.”

ISPs complain that revealing these details will be useful information for competitors, and have steadfastly refused to provide it, despite the potential for those same companies to enjoy taxpayer dollars in the form of grants to finance specific broadband projects.

Since the federal government will rely heavily on the broadband mapping project to determine what projects have merit and meet an immediate need, who controls the map will have major influence on what projects will appear most eligible for stimulus money.

Public Knowledge continues to criticize the broadband mapping project as already being overrun by telecommunications special interests.  Connected Nation, a group tailor-made to be granted approval for statewide mapping initiatives, has a board heavy with telecommunications corporation representation.

Art Brodsky, communications director of Public Knowledge, has implied the telecommunication ‘fix’ is already in, but conceding even more to the telephone and cable industry threatens to turn the broadband stimulus program into a creature of big telecom.

“The whole mapping exercise is already on its way to being substantially corrupted as the telecom industry’s creation, which exists to prevent data from being public, is collecting mapping contracts right and left through the efforts of their lobbying and influence. There is absolutely no reason for the National Telecommunications & Information Administration (administering the data collection process) to concede on the data collection. NTIA and its supporters in the Administration and in Congress should realize that if agency backs down on this assault from the industry, there will be that much less of value worth saving,” Brodsky wrote.

“At the end of the day, somebody is going to be in control of the mapping. It will either be the public, and the public interest, as represented by NTIA, or the industry,” he concluded.

The cable and phone companies declared victory.  The American Cable Association, which represents smaller independent and rural operators which stand to receive a substantial amount in stimulus taxpayer funding, applauded the decision saying the government backing down would “improve and expedite the mapping effort,” said ACA president Matthew Polka.

Surprisingly, Larry Landis, a Republican-appointed Indiana utility regulatory commissioner and chairman of the federal-state group that will be responsible for the mapping project, also applauded the Commerce Department’s flexibility on getting access to detailed information.

Landis has past ties, albeit on the periphery, with AT&T through his former employer:

From 1985 through 1991, Landis was Vice President/Account Planning at an advertising firm informing the agency’s creative direction for clients such as Indiana Bell (now AT&T Indiana), at Handley & Miller, Inc.

The Center for Public Integrity graded the state of Indiana with a “C” for disclosure of utility commissioner outside ties in 2005.  No apparent direct ties to telecommunications interests were found in Landis’ 2004 disclosure, the last one available from the Center.

Up to $350 million taxpayer dollars will be earmarked for the mapping program, tainted as it might be according to critics.  The final map will be vital to determine what recipients will qualify for the $7.2 billion dollars in available funding for grant-worthy broadband projects.  The money will be awarded to for-profit and non-profit groups, typically those that can best tailor their funding request to the requirements specified in the grant application process.

Daryl Kramp, MP for Prince Edward-Hastings, announcing broadband initiative in eastern Ontario

Daryl Kramp, Member of Parliament for Prince Edward-Hastings, on behalf of John Baird, Canada’s Transport and Infrastructure Minister, and the Honourable Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs for Ontario, announced that the construction of a 21st century broadband network is a step closer in Eastern Ontario. The Government of Canada and the Province of Ontario have together set aside up to $110 million for the project.

“Our Government is delivering on investments that help create jobs and build sustainable communities,” said MP Kramp. “The construction of a broadband network in Eastern Ontario will help to expand and improve local businesses and their services, and significantly boost our regional economy.”

“Delivering broadband to Eastern Ontario is a critical infrastructure investment that will bring more industry to the region and create the jobs that will help our towns and rural communities prosper,” said Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs.

“Today’s announcement marks a major step forward in helping to secure the future prosperity of Eastern Ontario. Having a high-speed, high-capacity broadband network is one of the most important assets that we can utilize to assist us in unlocking the ingenuity and creativity of our people and businesses. We are extremely grateful to both the federal and provincial governments for their tremendous financial support for this project,” said Ron Emond, Chair of the Eastern Ontario Wardens’ Caucus.

The governments of Canada and Ontario will each set aside up to one-third of total eligible costs of the project, to a maximum contribution of $55 million. Eastern Ontario Wardens’ Caucus (EOWC) Incorporated and private sector partners will provide the remaining funding, with EOWC Inc. contributing up to $10 million. The total eligible costs of this project are estimated to be $170 million.

Once completed, the network will provide broadband service to the residents and businesses in many of the counties of Eastern Ontario (Hastings, Peterborough, Renfrew, Northumberland, Haliburton, Frontenac, Lanark, Prince Edward, Lennox & Addington, the United Counties of Stormont, Dundas & Glengarry, the United Counties of Prescott & Russell and the United Counties of Leeds & Grenville) as well as the City of Kawartha Lakes.

Many of these areas already have rudimentary broadband service in the form of DSL and limited cable television penetration, but many DSL accounts are speed limited to 1-3Mbps, which the EOWC has determined to be woefully inadequate for broadband applications of the near future.

Canada’s broadband initiatives outside of the most rural communities are starting to define the bare minimum network speed at 10Mbps for downloading if the network is to sustain viability in the future.  With a goal of reaching up to 95% of eastern Ontario with broadband service in the next four years, a variety of technologies are likely to be considered depending on the population being reached.  Those living in the most rural areas are likely to find wireless service the most viable option, delivered with a form of WiMax.  Rural enclaves or neighborhoods outside of community centers may continue to be served by DSL service for some time.  But those in suburban and more urban community centers should have access to advanced forms of DSL, fiber optics, or high speed wireless service.

Many public Wi-Fi “hotspots” will be established at community gathering points, accessible to visitors at no charge.

The Government of Canada’s 2009 Economic Action Plan is accelerating and expanding the existing federal investment of $33 billion in infrastructure across Canada with almost $12 billion in new infrastructure stimulus funding over the next two years.

Through the 2009 Ontario Budget – Confronting the Challenge: Building Our Economic Future – the province is investing $32.5 billion in infrastructure for the province of Ontario over the next two years, including a $5 billion contribution from the federal government that will support more than 300,000 jobs and strengthen Ontario’s economy.

Every Time Warner Cable division has different policies for installations, service calls, and disconnect requests.  Some charge for technician visits, some do not.  In southern California, Time Warner Cable is trying to reduce the expense of “truck rolls” — technicians visiting customer homes, to handle Road Runner installations.

The company announced Wednesday it would provide free Easy Connect self-install kits for broadband service.  Mailed at no cost to customer homes within 24-48 hours, the kit contains a cable modem, connectors, and instructions on how to set up and configure Road Runner service.

Time Warner Cable technicians will continue to install Road Runner for a $19.95 installation fee.  Company officials believe many customers will be able to hook up service themselves, which will ultimately save the company time and money assigning a technician to do the installation.

A Broadband Reports reader from Zephyrhills, Florida was invited by E-Rewards, an online focus group, to give views on some new names and pricing for higher speed Road Runner tiers.  “Molitar,” a customer of Bright House Networks, which also markets broadband service under the Road Runner name, reports being asked impressions about new speed tiers, including faster downstream speeds of 30Mbps or more and one offering 5Mbps upload speed.

At least five different names were offered, with consumers invited to give their impressions.  Among the names: Road Runner Flash, Road Runner Extreme,  and Road Runner Lightning. “Molitar” preferred Road Runner Extreme.

Also asked: what kind of pricing customers would be willing to pay for the new premium speed services.

Assuming the facts were as the reader reported, this would likely impact residents in New York City first, where DOCSIS 3 upgrades are well underway. As upgrades begin in other cities, presumably such speed tiers would also be introduced. Those reported speeds would not likely be offered in areas where upgrades have not taken place.

Time Warner Cable has been one of the more stingy providers with upstream speeds. Many cities, including Rochester, New York have never seen a speed increase for standard Road Runner service since the product was introduced more than 10 years ago. At just 384kbps, uploading large files has been painfully slow. Road Runner Turbo, a $9.95 monthly add-on, is coveted for uploaders if only for the increase in upstream speed to 1Mbps, at least in Rochester. But many other Time Warner Cable markets offer Turbo upload speeds of 2Mbps.

Roscoe P. Coltrane and "Flash"

Speed based tier pricing is welcomed by Stop the Cap! We are supporters of providing customers with the choice of different pricing levels of service based on different speeds. “Heavy downloaders” and other “extreme” users of broadband service will gladly pay premium pricing for better service, providing enhanced revenue for operators like Time Warner Cable and bringing positive goodwill from customers who are anxious to see speed increases and are willing to pay to get them.

What we oppose, of course, is Time Warner Cable introducing consumption-based billing which curtails innovation, punishes subscribers for using the service as it was marketed to them in the first place, and sets up scenarios for massive profit-taking from consumers subjected to overlimit fees and penalties.

Time Warner Cable’s latest investor conference call featured company executives touting their initiative to give Time Warner customers access to as much content as they want, when they want, and where they want to see it. If they intend to honor that commitment, punitive consumption-based pricing denies customers the ability to access as much content as they want, makes them think twice about getting it out of fear of running over their “allowance,” and will drive customers to look elsewhere for broadband service, if not also taking their video and telephone business to another provider as well.

As for me personally, I’m not thrilled with any of those product names. Road Runner “Flash” does nothing for me at all, except reminisce about Roscoe P. Coltrane’s lazy basset hound with that name from the TV series Dukes of Hazzard (Friday night in our household growing up didn’t provide me with remote control privileges). Road Runner “Extreme” is already overused as a concept, and I frankly thought it was already in use. Road Runner “Lightning” reminds me of Frontier Communications’ older name for DSL service: Lightning Link.

I suppose Road Runner Max might be better, perhaps supplemented with the download speed as a suffix. Road Runner Max 30 for 30Mbps downloading, and so on.

Share your ideas in the comments section. Maybe we’ll offer it to them if they promise to honor the fact gas gauges belong on automobiles, not on broadband service.