Tomorrow’s House Public Utilities Meeting on S1004 in North Carolina has been canceled.  We can pat ourselves on the back again for continuing to keep the pressure on and hold our legislators accountable.

We must still keep writing our legislators and letting them know that they need to send HB1252/S1004 to the Joint Committee on Broadband, so the committee who has knowledge on broadband issues can address accessibility, affordability and capacity.

The e-mail addresses can be found in the original action alert or at the Public Utilities Committee webpage.

This is the first in a series of articles documenting the trials and tribulations of residents in New Hampshire, Vermont, and Maine when their incumbent telephone company Verizon abandoned them, leaving them at the mercy of an inexperienced, financially shaky, and downright lousy replacement — FairPoint Communications.  This are many lessons to be learned, and we’ll be following what was promised, what went wrong, and why it creates a nightmare for rural and small town America.  Some may wonder why focusing on this story is relevant to our issues.  The reasons:

• Broadband service in rural America is either unavailable, expensive, slow, and/or capped.  Smaller players in the broadband market often lack the financial resources to provide high quality, fast, and flexible broadband service to residents and businesses.
• The hope for competition from Verizon’s advanced fiber to the home FiOS network is dashed when the company abandons the smaller communities it once served to concentrate on more urban service areas.  Those communities will be stuck with second-rate copper or wireless “broadband” options for years to come.  In many of these communities, there is no cable service available.
  
• Some of the astroturfing political groups on the right decry public taxpayer funding of broadband, and accuse municipal networks of being subsidized by taxpayer dollars.  But as you’ll learn, private companies are receiving favorable tax breaks, and FairPoint in particular is being permitted to access $50 million dollars in funding that was originally intended by New Hampshire to be used for improvements in service.  Now that money will go to repay debts incurred by FairPoint at the same time the company paid enormous bonuses to company executives.  Strangely, these astroturf groups are silent about diverted funds finding their way into the private sector.

The sordid story of FairPoint in New England is a timely one, coming just a few weeks after Frontier Communications announced it would be taking on Verizon customers in several states, in numbers that dwarf the existing customer base of Frontier.  Shouldn’t public utility regulators carefully consider the implications for these customers before it gets approval?  What guarantees for broadband will be included, and at what speeds?  Will Frontier’s “acceptable use policy” provision of 5GB of usage per month, currently unenforced, come back to haunt customers later?

We’ll be covering the story in chronological order with lots of video over the coming days.  Pay special attention to the promises made, the realities that would come later, and the current nightmares that have cut off communities from 911 service, forced some businesses to relocate out of state just to obtain telephone service, six week delays for installations, Internet accounts that lost e-mail, and the tale of one woman who literally lives next to the telephone company, but cannot get a service call completed because FairPoint claims they cannot find her address!

When it’s all over, isn’t it well past the time Americans should be asking more from the telecommunications providers that deliver service?  For millions of Americans, when the phone company is your only choice, is this the best we can do?

… Continue Reading

North Carolina Legislature Building

I received an e-mail from a very reliable source that told me that S1004 (Level Playing Field Study) will be in the House Public Utilities Committee this Wednesday.  Their plan is to refer the study bill to Rules with NO CHANGES.  Time Warner Cable and the telecom Lobby want the study bill (S. 1004) to go to Revenue Laws ONLY, and not the Broadband Committee as specified and required in the companion House bill (H. 1252) and advocated by Rep. Faison in the last committee hearing on H 1252.

We must make sure that this bill goes to Broadband Committee as it was publicly voted to do.

I issued this statement to Fiona Morgan from the Independent Weekly this morning on the current developments:

“It has come to my attention from a credible source on the inside that S1004 will be sent to the Revenue Laws Study Committee in the House Public Utilities Committee on Wednesday.  It will not go to the Joint Legislative Committee on High Speed Internet in Rural Areas as the Public Utilities Committee had voted to send  it to about a month ago.  An immense amount of pressure was applied by Time Warner Cable to place S1004 in Revenue Law, as it is a more favorable committee for them to pass this to a full vote.  The don’t want a “turf war” on this important issue.  They want a free market where they, and only they, are free to monopolize the markets in which they operate.  The very definition, from the Revenue Law Study Committee website, of the committee is that “The Committee reviews the State’s revenue laws to determine which laws need clarification, technical amendment, repeal, or other change to make the laws concise, intelligible, easy to administer, and equitable.”  This has nothing to do with the State’s revenue laws.  It makes sense that it be placed in the Joint Legislative Committee on High Speed Internet in Rural Areas, where the real issues of accessibility, speed and affordability can be addressed.  Anything less is a travesty to the citizens to which are legislators are beholden to, and shows that Time Warner and the cable/telecom industry got what they paid for from Sen. Hoyle ($25750 in PAC money) and Rep. Brubaker ($16250 in PAC money).

Municipal broadband is becoming more of a necessity because the current providers refuse to upgrade their infrastructure to technology that is found in this century worldwide.  We will continue to fall behind in health care, education and commerce at the speeds at which we move currently.  If we want to compete, we must first compete with the high-speeds the rest of the world moves at.  Most other developed countries have speeds at least 4 to 5 times the speeds we move at.  Japan is at 160Mbps compared to our 10Mbps.  South Korea will be at 1Gbps by 2012, 100 times faster.  For our state’s very survival, we need someone to step up and upgrade our broadband access and speed.  Municipalities are very capable and, more importantly, very willing to provide this step towards the future.   All the while, our current providers like to live on their gross profits in the past. “

My first point of contention is that if this is already predetermined, then what is a public committee for anyway.  In North Carolina,  we did away with back room meetings to decide things of a legislative manner.

My second point is, why is this being sent to Revenue Laws, when clearly it doesn’t even belong there?  A committee on Broadband is far more appropriate, if not the only place you could send it!  Sen. Hoyle and Rep. Brubaker sit on the Revenue Laws Study Committee, if you catch my drift.

Lastly, North Carolina is 5th highest in unemployment.  If we do not give ourselves the tools (and that includes affordable, accessible and up-to-date high speed Internet access), we will continue to head south economically.

Please write the committee members on the House Public Utilities Committee and tell them they should make the Senate concur with the House and send it first to the Broadband Committee and then onto Revenue Laws, the way they originally voted to address this important issue.  Tell them we need more accessibility, more affordability and a chance for our state to compete on a global level economically.  Let them know that we do not have that right now, due to archaic infrastructure supplied by greedy monopolies and duopolies.

Here are the members’ names and e-mail addresses:

Rep. Lorene Coates <[email protected]>, Rep. Harold J. Brubaker <[email protected]>, Rep. Nelson Cole <[email protected]>, Rep. Bill Faison <[email protected]>, Rep. Russell E. Tucker <[email protected]>, Rep. Kelly Alexander <[email protected]>, Rep. Hugh Blackwell <[email protected]>, Rep. Angela Bryant <[email protected]>, Rep. Becky Carney <[email protected]>, Rep. Beverly M. Earle <[email protected]>, Rep. Bruce Goforth <[email protected]>, Rep. W. Robert Grady <[email protected]>, Rep. Jim Gulley <[email protected]>, Rep. Pricey Harrison <[email protected]>, Rep. Hugh Holliman <[email protected]>, Rep. Julia C. Howard <[email protected]>, Representative Linda Johnson <[email protected]>, Representative Marvin Lucas <[email protected]>, Rep. Daniel McComas <[email protected]>, Rep. Tim Moore <[email protected]>, Rep. Wil Neumann <[email protected]>

A sample letter:

Dear Public Utilities Committee Member,

Please make sure that the study activated by SB1004 (The “Level Playing Field” bill)  is in fact level and balanced by mandating that the Joint Legislative Committee on High-Speed Internet in Rural Areas also studies broadband issues in North Carolina AND that the study includes an examination of how the public AND private sector are addressing broadband affordability, accessibility and capacity in North Carolina. Right now SB1004 just has Revenue Laws Study Committee studying what is wrong with municipal broadband ownership and no focus on the private sector broadband deficiencies. There is nothing “level” about that!

Please feel free to elaborate on this letter or write your own, but please write today!

It’s not just the telephone and cable companies that must change and adapt to stay viable in this new era of online video, but the providers of all that great content as well.  Network TV has been engaged in its own battle over the last few of decades to try to maintain its relevance in the cable TV era.  In this time we’ve see the dilution of the network TV brands.  No longer is TV a network-centric market dominated by the big four of ABC, CBS, NBC and FOX, but as the adoption of cable television began to trump over-the-air broadcasting, networks have had to deal with the fact that they are now just one channel among hundreds that viewers have to choose from.

Today network TV has yet another paradigm shift it must adapt to: the convergence of video entertainment and the Internet.  This shift no doubt could further dilute their brand, but this problem didn’t begin with the advent of the Internet or the emergence of content providers such as Hulu and YouTube as some would have you believe.

Do you watch a TV network or a TV show?

Kevin Wassong contributing editor for paidContent.org wrote on Monday in Memo To Networks Re Hulu: You’re Making A Big Mistake, “the form and function of Hulu is great—but it may also represent the greatest destruction of media value in our lifetime.”  This is a pretty big claim considering the damage that has already been done by cable TV.  I argue that the greatest destruction of media value has come from, to quote Bruce Springsteen, “fifty-seven channels and nothin’ on”.  The problem is being forced to purchase packages of bland, uninteresting content to be able to watch the handful of shows that are worth watching.  Wassong goes on to elaborate:

So how might this represent a massive destruction of media value? Start with the premise that Hulu is creating the Uber-Brand of media, and the networks have simply relegated themselves to being content producers. In essence, the networks have quit. What happened to the value of a network brand?

It became irrelevant.  Back in the day of the big four, network branding was important, or at very least possible.  You gathered the family around the TV in the evening and you had to decide which channel to watch, and if two shows you liked equally came on at the same time, you had to choose one or the other.  In this situation it could very well be the network name that swayed your decision.  When Fox came on the scene it was touted as the “rogue” network, the underdog.  If you wanted to see something edgy that pushed the censorship limits, you watched Fox.  This was an era where network names still carried a connotation of the type of content you would find there.  This is the era Mr. Wassong is still living in:

The value of NBC is not in a show like Heroes or Friends. The value of NBC is the more than 70 years that it has taken the network to create expectations for generations. Expectations that a network will be a leader in comedy or drama or variety or reality programming. The years that it has taken the network to train consumers to expect a level of quality that can’t be matched. NBC has earned my respect. By joining Hulu, NBC is essentially saying there is no value to those three letters.

But in the cable TV era of multi-channel DVRs, a fundamental change occurred.  It DID become all about the show.  I like the shows Survivor and Lost, and honestly, I could care less what network airs them.  If one of those shows were to suddenly flip networks, two clicks and a quick change of my DVR settings and it’s a non-issue for me.  I also hate to burst Mr. Wassong’s bubble, but I’ll let him in on a little secret — all networks have good shows and bad shows, and I don’t have expectations of quality based on any particular network.  I take it on a show-by-show basis.  If I don’t like it, then the scheduled recording gets deleted from my DVR.  The era of network loyalty, if it ever existed, has long since passed.

As Wassong pointed out, some content producers are starting to get it, “…The NFL and MLB have both created their own networks.  The two premier sports leagues have said: We don’t need the networks anymore, and the networks have acquiesced.”  Content producers are now starting to strike out on their own to develop or regain their own branding.  Soon they’ll also discover they won’t need the cable TV companies either.  They’ll be able to offer subscription services that offer streaming HD content over the Internet directly to the consumer with nothing but their brand splattered all over it, without network or cable company dilution.

If networks want keep their brand and stay viable in the future, then relegating themselves to being just content producers is EXACTLY what they should do.  Focus on producing quality shows and explore every distribution channel available.  Broadcasting gave way to cablecasting which is giving way to webcasting. If you want to grow your business, then you also need to be aware of your public image. Online reputation management companies like www.internetreputation.com can also help you maintain a positive image at all times.

Stop the Cap! reader Michael Chaney takes on the issue of online video, an important component of the corporate struggle over who controls the programming and distribution of entertainment in this country.  The collateral damage from online distribution of video content is a driver of broadband usage caps, designed to limit challenges to the cable industry’s traditional video business model.

“Broadband is a highly competitive industry in the United States, with many options for customers.”

Despite that mantra from the cable and telephone industry, large sections of the country have two options for broadband service – satellite or nothing.  For an estimated 80,000 Californians, nothing may be a better option.  That number represents the estimated number of state residents locked into a contract with HughesNet for satellite-delivered “broadband” service.  For several years, many customers have been appalled at just how bad HughesNet is at delivering that service, and now several have had enough.

Filed in the Northern District of California federal court in Oakland, a class action lawsuit alleges that HughesNet falsely advertises the quality of its service, particularly regarding speeds it promises but doesn’t deliver, and does not disclose the full extent of the company’s throttling and cap policies.

HughesNet limits customers to a daily limit starting at just 200MB of consumption, and then throttles speed to dial-up or slower for at least 24 hours for anyone who exceeds it.  Repeated instances of exceeding the cap extends a customer’s time in the throttled speed penalty box or can lead to service suspension.

Customers who find they no longer wish to live under this kind of “broadband regime” find escaping the two year service contract expensive, requiring a $400 early cancellation fee.

For millions of Americans, well beyond cable lines or too far away for DSL service, broadband under any terms is an extremely expensive proposition.  HughesNet requires customers to purchase equipment, costing around $300 up front (after a $100 mail-in rebate), including mandatory installation fees.  For just 1.0Mbps service, the monthly cost is around $60 with a 200MB daily limit.  If you want to attempt service at 5Mbps, that will cost $350 a month with a 500MB daily limit.

For HughesNet customers Tina Walker and Christoper Bayless, who instigated the class action suit, even pricing this high wasn’t the reason for filing the suit on behalf of California residents.  It is because speeds promised are speeds rarely delivered.  Many independent reviews of the service agree, with many finding download speeds at 200-300Kbps more typical.

Walker and Bayless also allege the company throttles more than the “few” customers HughesNet claims exceed the daily limits.

By the time customers decide they’ve had enough, they have to spend several hundred dollars to get away from the company, and many are also stuck with useless equipment they had to buy up front.

They are asking for a refund of any early cancellation fees paid in California, an end to the policy that charges them, and more truthful disclosure about the actual level of service HughesNet is capable of providing.

HughesNet defends their service, pointing to a 30 day window for customers to sample the service and decide whether it is right for them, and having the option to cancel during that window with no early termination fee.  Customers are still out the initial investment for equipment and installation, however.  The company does claim that many customers can return their HughesNet equipment and receive a $200 discount off their early termination fee, if they qualify.

But the company also charges an early termination fee for customers it throws off their network.  If you exceed their usage limits too often, they can cancel service and immediately charge your credit or debit card a $400 fee.  If you agree to return the equipment, they will refund $300 of that fee, charging you $100 for making them get rid of you as a customer.

Beyond that, HughesNet does not comment on the specific merits of any lawsuit filed against it.

For rural Americans, any concept of “broadband” service is slow and expensive, with long term contracts, usage caps, and in some cases, expensive overlimit fees.  The three satellite competitors in the United States all require term commitments, and sell their least expensive broadband service at prices urban and suburban residents pay for the fastest levels of service:

StarBand: $299 equipment fee/$50 installation  1Mbps service $69.99/mo – $79.99/mo (1-2 year commitment) — 1,600MB download/400MB upload 7-day rolling limit

Wildblue: $150 equipment fee/$50 installation  512kbps service $49.99/mo (1 year commitment) — 7,500MB download/2,300MB upload 30-day rolling limit

HughesNet: $299 equipment & installation fee, after rebate  1Mbps service $59.99/mo (2 year commitment) — 200MB daily download limit