Many people still think of broadband Internet access as some sort of luxury “extra,” like a premium movie channel on your cable subscription, or maybe a nice dinner out at an expensive restaurant. Only it’s not. Increasingly, students are choosing where to attend school based on connectivity, high tech business incubators are built in communities where access is available at affordable prices, and now one New York State senator has released a report showing lack of access to affordable broadband is hurting the real estate market.
Senator George Winner (R/C/I – Elmira) released a report last fall documenting the trials and tribulations of inadequate availability and competition for broadband in smaller towns and cities, including many in his district in the southern tier of New York.
Winner fears that without equity of access and a healthy competitive marketplace, the impact will be felt community-wide.
Lack of access to broadband is influencing the real estate market. Homes that have broadband are winning out over more remote ones that don’t. Areas with better and faster broadband are becoming more desirable than ones with slower access. Experts believe that over time, the lack of universal broadband, could pull people from the countryside toward cities and suburbs. On the federal level, the FCC is considering using the Universal Service Fund, which subsidizes phone service in rural areas, to promote broadband coverage as well.
That’s why communities like Elmira, and others in the Twin Tiers region, were paying attention when Time Warner announced broadband usage cap experiments in Beaumont, Texas. For most, Road Runner -is- their broadband provider.
Can anyone place that anchor’s accent? It’s definitely not from the western New York area!
StoptheCap! heard from many Frontier customers scattered nationwide across their service area, which encompasses mostly rural communities from coast to coast. For them, broadband Internet service means getting it from an expensive satellite service, or getting DSL from Frontier Communications. There is no cable service in many of these communities. When Frontier was considering a usage cap of 5GB per month, these consumers weren’t just alarmed, they were in full panic.
Rural and underserved markets are routinely bypassed by providers from the latest technological innovations, and are often under punitive contracts at high prices. Senator Winner’s report details private and public initiatives to reach these communities. He’s a conservative Republican who serves a district that would prefer not to be bothered by political schemes hatched in Albany, but the issue of broadband access is one that crosses party lines, as readers of this site have come to learn. It’s not a right or left issue. It’s one that will rapidly become as important as wiring communities for electricity and universal access to telephone service.
Expensive caps and overlimit fees are an anathema to the development of broadband nationwide. It’s an issue rural communities are following, as they often have few, if any alternatives.
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A pretty powerful piece. Time Warner comes across as exceptionally arrogant in Beaumont. They would not provide anyone to talk on-air, and their written statement, while acknowledging the program was driven back in other cities, is working just fine for them in Beaumont, whether customers like it or not. Pretty chilling and smacks of arrogance. Of course, in Beaumont, AT&T is experimenting with caps of their own, so the point that customers have no uncapped alternative is particularly powerful in this part of Texas.
Mr. Kim then suggests he doesn’t necessarily like his electricity or water rates, but he conserves because there is a penalty for unrestrained use. Actually, there isn’t really a penalty at all. Gas, electric, and water service are sold on a true metered basis. There are no “bucket plans” for these services. They are also utilities, and their rates are either regulated outright, or carefully monitored in the limited competition models some states have for these services.
Your water company bears the minimal cost of pumping a gallon of water from a body of water or aquifer. It then resells that water at a per gallon rate marked up to cover all of the overhead and expenses it has, sets a little more aside just in case of a non-rainy day, and delivers it to you at a rational, non-gouging price. If you don’t want to pay, you leave the faucet off. On the Internet, the faucet drips… all the time. The only way you are assured of not paying is to unplug your modem, never check your e-mail, and avoid websites with ads, because those are now now on your dime, especially when Time Warner marks up its wholesale cost by 1000% or more for that data. It’s like getting a glass of water but handing half of it to the stranger walking by your house, who also wants you to pay him a dollar on top of that.
Time Warner is also, like many cable providers, hip deep in a conflict of interest on broadband consumption. Cable has a vested interest in forcing you to “conserve” your connection, particularly by not using those services which directly compete with its business models. Streaming video online offers the customer the possibility of foregoing a cable TV package altogether. A Voice Over IP telephone provider on the Internet makes Time Warner’s Digital Phone product redundant. A Netflix set-top box that streams movies and other video programming in competition with premium/pay per view channels represent just one more service that panics many in the upper floors at Time Warner Cable’s headquarters.
Ironically, it was the very same cable companies that are whining about Exafloods and a crisis of costs who have contributed to the demise of “long distance.” Time Warner, among others, are now pitching cheap unlimited calling plans to customers who will never pay for another long distance call. In the wireless industry, price skirmishes have already broken out with carriers marketing true unlimited calling plans or calling circles which, for most people, mean no more airtime minute watching.
When I renew my Verizon Wireless contract this December, I will be handed a new phone and the option of a better plan with more minutes at or below the price I am paying now. By that time, there is every likelihood Time Warner will be asking me to pay three times more ($150 a month) for precisely the same level of service I am receiving now for around $50 a month. One of these companies is responding to the reality that bandwidth costs are declining, and are reducing rates and offering more. The other is taking advantage of a very limited competitive market and wants to triple charges claiming they are on the edge of broadband bankruptcy — only they’re not when you read their financial reports. Guess which is which.
I am also glad you are asking real people these questions, because companies like Time Warner certainly aren’t. Any reader here can recite poll after poll. The overwhelming majority of broadband customers, even those who are not defined “at the moment” as “abusers” of the network are content and satisfied paying one monthly fee for their service. They don’t want your plan, the industry’s plan, buckets, limits, caps, overlimits, or whatever else the marketing people decide to call the equivalent of Internet rationing at top dollar pricing.
We are consumers. We are customers. We are not industry insiders and we don’t write for industry trade publications. We don’t get a paycheck from this industry. Indeed, this industry raises our bill year after year, delivers inconsistent messages about why we are now being asked to pay for “buckets of broadband,” yet still denies us the ability to choose the channels we want for our own video package, paying just for what we want.
We also are empowered and educated enough to use this incredible tool called the Internet to research the assertions some make and simply expect others to accept at face value. We now read financial reports and statements. We verify. We also discover the language of the lobbyist, the marketers, the astroturfers, and the executive elements that are now attempting to sell consumers on their scheme to pay considerably more for the exact same thing, or less. Then we compare that with the glowing results given to shareholders, and we see the chasm between the two messages. We realize what we are being sold: a soon-to-be-even-more-inflated bill of goods.
Frankly, you don’t have to be a genius to recognize that looking at a gas gauge, worrying about overlimit fees, and being stuck paying $100 more a month for broadband is not going to make anyone outside of this industry happy.
The first time a consumer gets a bill from a company with a plan like Time Warner’s, they are going to kick the bucket.
Anyone who doesn’t recognize and admit the real potential of market abusive pricing and policies in a limited competitive marketplace isn’t being completely honest, especially when the players do not offer roughly equivalent levels of service. If the future of broadband in this country is to be unregulated virtual duopolies, then perhaps consumers need to insist on common carrier status for those networks, allowing equal access to a variety of competing providers, with oversight to guarantee fair wholesale pricing and access.