“One customer may have to move his business [from New Hampshire] to Massachusetts because he can’t get [phone] service in his store.” — WMUR Manchester (3/13/09)

Third world phone service?  Now into spring, the saga of FairPoint continues with no end in sight.  Customer complaints achieve alarming proportions in all three New England states where FairPoint Communications assumed control of customers discarded by Verizon.

Across Vermont, New Hampshire, and Maine, local media present disturbingly similar stories of customers left weeks without service, unable to reach customer service representatives.  Palpable frustration over what seems to be an endless litany of excuses about why things have gone wrong, and how things are “getting better” start to ring hollow.

Now there is a new complication.  Questions about FairPoint’s financial health are now openly pondered by the media, as FairPoint asks for a three month delay in paying back its debt.  The Associated Press reports FairPoint is struggling.  Even before the transition problems erupted, the company lost 12% of its New England customers in 2008.  The Maine Public Utilities Commission received 1,200 complaints about the company and the company’s stock price was rapidly declining.

[flv width=”480″ height=”360″]http://www.phillipdampier.com/video/WMUR Manchester Fairpoint Says Payment Delay Request Not Due To Customer Problems 3-13-09.flv[/flv]

Of course, no nightmare with a phone company is ever complete without them botching your bill.  FairPoint doesn’t disappoint, and as customers begin to receive their monthly statements from the new “transitioned” FairPoint, all too often they were wrong.  Customer payments were applied late or not at all, late fees charged even to customers on “autopay” plans, and new charges billed for lines that were disconnected.  Even customers on their way out the door were snared, as WMUR discovered from one Manchester resident who swore “I’ll never go back to FairPoint.”

Kate Bailey from the New Hampshire Public Utilities Commission: “The level of service that FairPoint is providing to its customers is unacceptable right now.”

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The Federal Communications Commission is accepting comments from citizens until July 8, 2009 as they craft a national broadband plan.  Free Press’ Save the Internet campaign has made sending our comments a lot easier for you and I.  They’ve created an online form that directly interfaces with the FCC’s formal comment submission system.  They have pre-filled a sample message to send to the Commission for consideration, but I strongly recommend you write one of your own.  Net Neutrality is a critically important issue for Stop the Cap!, but there is room to also share your thoughts on usage caps, metered pricing, competition and oversight — all of the issues we focus on regularly here.

They are already hearing from special interests and lobbyists attempting to influence the Commission into creating a broadband policy that caters to the whims of commercial interests.  It is paramount that the Internet first and foremost serve the interests of the people.

For the first time in a long time, every citizen can have a voice heard by anyone who wants to listen.  The impact and importance of that voice is judged on the merit of the message, not on how much money, power or influence that person has to present it.  Net Neutrality rules enforced as part of a national broadband policy protects your voice, your ideas, and your participation in our democracy.  Some commercial interests seek a net where their voices can travel faster, their partners get preferential treatment, and everyone else risks being throttled, capped, metered, or impeded.

Gordon F. Snyder, Director of the National Center for Information and Communications Technologies

Without Net Neutrality protections, the Internet may find itself resembling broadcasting in this country, where a few powerful interests control the medium, the message, and the content.  No company should be making these choices for you, either through speed throttling or imposing limits or meters on those products and services that aren’t owned, controlled, or partnered with that provider.  Your ISP should not have the right to impose a broadband strategy that is designed to protect the business model of another product or service they happen to offer, such is the case with online video.

Tell the FCC you don’t want to settle for a national broadband policy that doesn’t make America #1.  That means:

• The fastest possible speeds, not rationed “fast enough for most people to check e-mail and web pages broadband.”
• An end to policies that allow providers to artificially limit consumption through throttles, usage caps, and forced metered pricing at enormous markups.
• Protections against manipulating broadband policies to protect providers’ other business interests, such as streaming online video competing with traditional cable television business models.
• Policies that encourage competition among providers, even if it means establishing “common carrier” status to permit competitor access to wired infrastructure under fair terms.
• A policy that recognizes the rapid development of broadband technology and expects providers to grow with the times to accommodate new platforms, technologies, and applications.
• A policy that embraces municipal, public, and/or non-profit organizations that wish to establish advanced networks as they see fit, without having to face lawsuits and delay tactics from commercial interests.
• Recognition that there cannot be two broadband platforms in this country – one slow lane for rural and under-competitive markets and one fast lane for urban areas.  Equal access.  Equal speeds.  Fair pricing.

Gordon F. Snyder, Director of the National Center for Information and Communications Technologies, provides additional insight in his blog, and should be considered when writing your suggestions to the FCC:

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Fact vs. Fiction: Five Myths About Net Neutrality (click to read document)

A coalition of consumer groups, educators, and online activists have called on Canadian public utilities and municipalities to explore the construction and implementation of fiber optic networks to combat Canada’s deteriorating position in broadband service.

Steve Anderson, writing for The Tyee, opined in a Mediawatch column that “big telecom’s monopolistic control over the net is threatening to leave Canada with a last generation Internet.”

In the 2009 Federal budget, the Conservative government pledged to commit $225 million over the next three years for broadband to unserved communities.  By contrast, Australia, which has a similar geographic breakdown to Canada, is reportedly committing AU$4.7 billion to a similar initiative. Not only is the Conservative’s commitment relatively weak, it also does little to get Canadians hooked up to next generation networks.

Anderson complains the current competitive lock on broadband is unlikely to be broken by commercial providers, unwilling to compete for access.  Instead, Anderson suggests municipalities, community-non profits, and public utilities should fill the gap and provoke competition.

University of Toronto professor of Information Studies Andrew Clement points out that municipalities “have many critical assets, including significant financial resources, control over rights of way, as well as experience in developing and operating other complex, capital-intensive infrastructures, such as roads, waterworks, and transportation systems.” In fact, many municipalities own high-speed fiber networks that they can utilize relatively easily for Internet service provision.

There are successful public, municipal owned broadband networks now providing service in some cities in Canada.  Fredericton, New Brunswick’s award winning fiber and wi-fi network is a partnership co-op with the city government.  Wi-fi service is provided free of charge to all citizens, one of the reasons the city was congratulated for being one of the “communities or regions with a documented strategy for creating a local prosperity and inclusion using broadband and information technology to attract leading-edge businesses, stimulate job creation, build skills, generate economic growth, and improve the delivery of government services.”

Anderson criticizes Canadian broadband for being usage capped and throttled, a victim of lack of Net Neutrality protections.

A public interest organization SaveOurNet.ca is sponsoring a series of Open Internet Town Halls in Toronto, Ottawa, and Vancouver to engage citizens in discussions about the future of the Internet. Through live video streaming, the town halls will be available to a national audience on theREALnews.com, rabble.ca, TheTyee, Beyond Robson, SaveOurNet.ca, and other participating websites.

People from across Canada are encouraged to watch and engage with the first Open Internet Town Hall meeting at 7:30pm on Monday June 8th. The Canadian equivalent of the FCC, the CRTC, will be holding hearings on Net Neutrality issues on July 6th.

StoptheCap! will provide additional coverage of the SaveOurNet event Monday.  Americans can and should pay attention.  Canada’s abusive provider practices may very well be forthcoming in the States soon enough.

Engadget Labs expected a highly competitive shootout among the nation's top four wireless data providers. They found four carriers charging essentially the same thing for the same thing: $60/month for 5GB of usage

One of the frequent myths heard from telecom industry executives is that broadband is a highly competitive marketplace, with lots of choices and a diversity of pricing plans to meet the needs of every subscriber.  That’s why they should be allowed to set whatever pricing, terms and conditions, throttles, caps and tiers they wish — after all, there are plenty of other choices.

Not exactly.

In addition to the duopoly wired broadband marketplace in most cities (one cable company and one telephone company), outside of dial-up or the occasional wi-fi network, there is always wireless Internet provided by mobile phone companies.

Engadget Labs just completed an excellent, comprehensive review of the nation’s primary wireless data providers — AT&T, Sprint, T-Mobile, and Verizon.  They were searching for the answer to the question, “what is the best mobile data provider in America?”  They anticipated a range of service offerings, speeds, and prices.  What the ended up with is a realization that, at least when it comes to prices, it’s as simple as can be.  The nation’s four largest providers all charge the same thing for the same thing: Up to 5GB of usage for $60 per month.  Your actual speeds, overlimit fees, coverage, and promotional sign-up deal may vary.

Sadly for consumers, we can’t compare these options on monthly throughput allowance or monthly rate plans. In a fashion that only a colluder could love, the big four here in America all have matching monthly rate plans with matching monthly caps (5GB). So much for choice, right?

There is also no need for any “experiments” in usage caps on wireless data.  They all offer precisely the same limits.  Why experiment when you can simply match the competition, charge the same price, and sit back and cash the checks?

Contrary to popular belief, all four major US carriers offer capped mobile broadband plans to consumers. In other words, it’s not unlimited. In fact, you’ll only get 5GB of throughput per month before those nasty overage charges start to kick in, so you should go ahead and cast aside those dreams of using an AT&T data stick to replace your in-home cable internet service. We can’t say we like the cap, but that’s just the way things are at present time — hopefully we’ll look back in a year or so and laugh at the preposterousness of plans past.

I wouldn’t hold my breath.  Once a carrier puts a cap on, it can be extremely difficult to get rid of it.  Considering the capacity of wireless providers to expand bandwidth is hampered by spectrum availability and the speed race that seems to be getting a higher priority, controlling usage on your network to make sure customers don’t “abuse it” is paramount for all of these carriers.  Exceed your cap at your financial peril.  Overlimit fees are designed to punish:

• AT&T: $0.49/MB
• Sprint: $0.05/MB
• T-Mobile: $0.20/MB
• Verizon: $0.05/MB

(Verizon & AT&T charge different overlimit fees on lower-priced, lower consumption tier data plans.)

As far as speed goes, even a slow DSL account should be able to perform better than wireless “broadband” data services available today.  Engadget reports these speed results:

• AT&T: 239.01KBps down; 77.95KBps up
• Sprint: 121.27KBps down; 36.94 KBps up
• T-Mobile: 127.33KBps down; 54.05KBps up
• Verizon: 102.9KBps down; 63.22KBps up

Engadget’s summarized points to consider:

• Every major plan runs right at $60 per month for 5GB of throughput.
• Sprint is the only carrier that avoids dinging you with an activation fee.
• AT&T and T-Mobile are the only two with true worldwide roaming support (GSM bands).
• International data roaming is absurdly expensive; you’re infinitely better off just buying a prepaid data card in the country you travel to.
• AT&T offers the most data card options; T-Mobile offers the least (just one).
• Even domestic overage charges are pricey; don’t buy a data card to act as your primary ISP — this stuff is for backup / traveling only.
• Sprint will cut you a $9.99 discount if you bundle a data card in with a phone in a Simply Everything package.

Marcel Boyer

Marcel Boyer penned an opinion piece for Canada’s Financial Post this week attacking the virtues of Net Neutrality as short-sighted and potentially devastating to the Internet if codified into law.

Boyer, in a piece called “Don’t Throttle the Net,” advocates precisely that, applauding broadband providers for traffic shaping, which artificially slows non-preferred Internet traffic delivered over broadband networks.

There are many facets to the net-neutrality issue, including pricing and broadband allocation, which are central. Proponents of net-neutrality call for government intervention and regulation to prevent broadband providers from prioritizing or interfering with the data that flows in their networks. On the other hand, broadband providers are arguing that even though they continue to invest in their networks, their customers would still be affected by congestion during peak periods in the absence of traffic management measures. Other large networks face the same type of issues. New applications (video streaming and VoIP, among others) require a high quality of service assurance, making a more reliable network necessary.

Boyer delivers the usual talking points about bandwidth pricing and competition that Stop the Cap! readers are all too familiar with:

Making it illegal for broadband companies to offer a diversity of choices would destroy incentives to invest continually in improved Internet bandwidth, quality and security. Net-neutrality legislation would unnecessarily regulate a free and competitive market when there is no real evidence of consumer harm.

Let network owners and operators as well as service providers differentiate their offerings and price them the way they choose. Customers would benefit from more diversified offers by selecting the ones best suited to their needs. In such a competitive context, network operators and service providers would routinely aim to satisfy demand for Internet services most effectively while simultaneously aiming to manage the growth in peak demand.

It is to the advantage of consumers to allow competing vendors to experiment with various price and service combinations. From this discovery process, a portfolio of winning offerings will emerge. As long as competition is present and sufficiently intense, and assuming the level of information available and provided to consumers enables them to make informed choices between the various offerings, regulation of price schemes is neither necessary nor desirable as it would stifle innovation and obscure the best offerings and pricing schemes.

From an economic point of view, policies that would restrict the ability of broadband providers to manage their networks are likely to do more harm than good. Regulation of prices and offerings, products and services, has generally resulted in higher costs and lower benefits, especially when competition is present. The complexity of market dynamics poses particular problems in emerging industries. Instead of adopting regulations that could induce unwanted harmful effects, it is preferable to mandate the Canadian Competition Bureau to investigate when there is evidence of abuse or unlawful actions from broadband providers.

The impetus for the opinion piece was this week’s news highlighting Canada’s rapid decline in standing among top industrial nations’ broadband services.  The original report specifically called out the impact of draconian usage caps and throttles which reduce usage, limit innovative high bandwidth services’ entry into the Canadian market or bypass it entirely, and the potential economic and competitive impact on Canada’s economy as a whole.

Boyer’s premise presupposes there is a healthy competitive marketplace for broadband in Canada, a conclusion ridiculed by many.  Most Canadian cities have two primary choices for broadband, a usage capping phone company or a usage capping cable company.  Smaller independent providers typically resell bandwidth obtained from Bell or other similar entities at wholesale rates.

Despite pricing more than $15 a month higher in Canada than in the United States, and healthy financial returns among most of Canada’s providers for their broadband divisions, the “continual investments” in bandwidth Boyer claims are hardly eye popping.  Incremental speed increases, usually accompanied by rate hikes, and the imposition of often paltry usage caps has artificially reduced consumption, which also reduces the need to improve infrastructure.  Indeed, while fiber optics deployment is becoming increasingly common in the United States, it is not nearly as common in Canada.

Canadians find little diversity in pricing and service levels in a marketplace that nearly always imposes limits on consumption, doesn’t provide robust access in rural communities, and typically delivers slower speeds than their counterparts in the United States are providing customers today.  East York (near Toronto) residents, for example, can obtain “blistering fast” 10Mbps service from Rogers for about $60US per month, limited to 95GB of consumption.  Overlimit fees are $1.50/additional GB.  Bell offers “speed of light” Internet access at “up to 16Mbps” for $82.95 a month (100GB usage cap – $1.00/additional GB, billed in increments of 100MB, $30 monthly maximum applies.)

Head across Lake Ontario south to Rochester, NY and Time Warner Cable provides “Turbo” service offering 15Mbps, currently without any usage cap, for $50.00 a month.  Verizon FiOS pricing provides 20Mbps service with no cap for $54.99 a month.

In the absence of significant competition, duopoly-style pricing usually results, and that’s precisely what has happened in Canada.  Allowing the “wild west — hands off” approach Boyer advocates merely guarantees more of the same.  Providers in the United States, already enjoying phenomenal returns, would love to adopt the Canadian approach.  They’ve already been increasing rates, decreasing investment in their network infrastructure as a percentage of revenue, and enjoying the benefits of reduced bandwidth expenses.  The only components left are usage caps and throttling broadband applications they don’t own, control, or partner with.  Experiments are being attempted on some of these fronts now.

The end result: even higher profits and locking broadband into a rationed, expensive, and slow backwater.

Boyer should know that wired broadband competition beyond the aforementioned duopolies in most Canadian markets comes only from independent ISPs typically reselling wholesale bandwidth (which is now also being capped) and a few independent providers who may wire limited areas in large cities.  There will never be a free market paradise in cable television – the traditional one company per city approach is well rooted throughout North America.  Wireless is even more heavily capped and expensive than wired service.  And telephone companies, outside of Verizon in the United States, are loathe to aggressively deploy fiber optics unless required by local market conditions.

Broadband throttling and capping, particularly to discourage online video consumption, comes aggressively when companies have a vested interest in preventing erosion of their traditional video programming business model.  Both Rogers and Bell are in the business of delivering television entertainment to Canadians.  Should a sufficient amount of that entertainment be available online, some consumers may dispense with the video package and rely exclusively on the Internet.

Speaking of vested interests,  the Financial Press had plenty of space to print Boyer’s article, and even concluded it by noting his title:

Marcel Boyer is vice-president and chief economist of the Montreal Economic Institute.

Apparently things got throttled at that point, because they forgot to include one additional affiliation Boyer holds: Bell Canada Professor of industrial economics at the Université de Montréal.  How ironic.