Qwest, the former-Baby Bell serving the upper midwest, mountain west, and desert states got caught on tape telling customers the company’s intent is to eliminate competition from independent Internet Service Providers by banning them from their network.

One such ISP, XMission, has blown the whistle on the anti-competitive practice, noting they could potentially be run out of business if Qwest manages to keep them from delivering competitive service over Qwest’s upgraded partly-fiber network.

In 1997, XMission first started providing service over Qwest’s DSL.  We have literally paid millions of dollars of revenue to Qwest for the privilege, all the while relieving them of the difficult task of providing excellent customer support.  In 2008, Qwest launched their “Fiber-to-the-Node” product which is usually falsely advertised as just plain “fiber”.  Unlike the UTOPIA system which runs fiber optics all the way to the home, Qwest FTTN runs fiber to a neighborhood, then copper DSL lines to the customer.  Because of the subsequent shorter distances on copper, they are able to attain download speeds of up to 40Mbit to the customer and 5Mbit from the customer.  This is normally referred to “download” and “upload” respectively.

There is one key difference in the FTTN product.  Qwest is not not allowing 3rd party ISPs like XMission to sell their own service over it, as we traditionally have with their first DSL product.  In addition, Qwest has been notorious for disinformation and service problems that motivate customers to drop their current ISP and change over to Qwest.  Technical problems exist, such as radio interference that degrades existing XMission customer DSL speeds, sometimes making their Internet connection unusable.  The solution offered by Qwest was not to shield the radio interference, but to switch customers off XMission and to their own product.  We have also had reports and in one case, a recording, of Qwest sales representatives telling customers that Qwest’s intent is to “eliminate” 3rd party ISPs.   Today, I received an email from a customer who was told by Qwest that XMission’s equipment is “too slow” to handle FTTN service.  Considering that we service customers on fiber and in our data center with up to a gigabit in solid bandwidth, one has to wonder why Qwest feels the need to lie to sell their service.  There is no technical reason why Qwest could not allow 3rd party ISPs like XMission to provide service over their FTTN network.

XMission has been hemorrhaging DSL customers for the past year, and I really don’t blame them for looking for bigger Internet connections.  I personally can only get 3Mbit download and 500Kbit upload to my own home and it is not enough bandwidth for me.  With Netflix, Hulu, Youtube, and other services demanding more and more bandwidth, homes will need larger and larger connections.  Unless they’re in a UTOPIA connected city, chances are that they are going to choose from two companies to buy Internet from in the future, neither of them stellar.

UTOPIA is Utah’s publicly-owned fiber optic platform delivering competitive choice to residents of 16 Utah cities.  Residents enjoy true fiber optic service and can select from 11 different Internet Service Providers, each offering their own speed levels, bundles, and pricing.  How many ISPs can you choose from?

Qwest’s newest network upgrades deliver service somewhat comparable to AT&T’s U-verse — faster broadband through a hybrid fiber, copper phone line-based network.  Qwest also sells traditional DSL service over standard phone lines, including so-called “dry loop” service that delivers broadband service without also buying a phone line.  While competing providers can sell service over many of Qwest’s DSL lines, they have been barred from selling access over these new, faster-speed lines.

Customers have been unimpressed with Qwest’s traditional DSL services which often promises far more than it actually delivers.

Alex Langshall in South Salt Lake was guaranteed 7Mbps DSL service from Qwest, but ended up with only 640kbps.  The reason?  His distance from the central office and the deteriorating quality of Qwest’s landline network.  Qwest’s technicians told Alex even after line conditioning and rehabilitation, he would only get 1.5Mbps service.

XMission publicized this recording between Qwest and one of their customers about the phone company’s intentions for independent ISPs on their network (July 21, 2010) (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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The firebrand Rep. Alan Grayson (D-Florida), normally a plain-spoken kind of guy, has managed to tie himself into a human pretzel over the issue of Net Neutrality.  In less than a week, he’s adopted every side of the issue as his own.

Grayson shocked many of his supporters last week when he signed on with AT&T, Verizon, and Comcast to pressure the Federal Communications Commission not to regulate Internet principles like Net Neutrality.

Grayson’s increasingly high profile in the Democratic party and his hero status among many progressives made his allegiance to big telecom stick out like a sore thumb.  Liberal blogs immediately blasted Grayson’s decision to side with the “you can’t use my pipes for free” crowd.  Some bloggers called his position “curious” while others accused him of selling out.

Grayson has been engaged in damage control ever since.

His letter to the FCC echoed earlier letters from Democrats hostile to broadband reform (but receptive to campaign contributions from the phone and cable companies).  But Grayson insists he has been misunderstood.

The Orlando Democrat told the Huffington Post that he is in favor of Net Neutrality and that his alliance with the telecom industry is a coincidental case of “strange bedfellows.”

“I say in the letter that I support the policy of Net Neutrality. I don’t know how I could be more explicit than that,” he told HuffPost. “There is a question, though, of how to reach that conclusion, and it’s a legitimate question. My own feeling is that we should not allow a matter like this to be resolved by regulation, because regulations can be changed very easily. We saw this all the time with the Bush administration. I think it is preferable to have the principle of net neutrality enshrined in statute.”

Grayson

Grayson’s position does not make sense to many Net Neutrality advocates who do not understand why Grayson cannot be supportive of both regulatory reform and legislative changes.

“I think Grayson is mistaken to think that good Net Neutrality legislation could come out of this Congress. And certainly he’s mistaken to think that good Net Neutrality legislation would come out of the next Congress,” said Tim Karr of Free Press.

Karr told HuffPost he hoped Grayson would note conservative bloggers are in love with the congressman’s position on Net Neutrality and rethink his position. “Given that Grayson is considered a progressive lion in the House of Representatives, that the people who routinely vilify him are now seeing him as a champion should make him think twice,” he said.

Grayson argues that getting the FCC to reform broadband and make Net Neutrality a formal agency directive would be a waste of time because Republicans would simply throw it out the next time they occupy the White House.

For many Net Neutrality advocates, that kind of defeatist attitude is symbolic of a problem Democrats have long faced — the impression they’ll cave-in when challenged by Republicans.

Marvin Ammori, a law professor at the University of Nebraska:

“What he’s implying is that Republicans actually do what they want to do and implement the policies they want and Democrats don’t,” said Ammori. “It sounds like they’re unwilling to change regulations because they’re worried Republicans will change them back… It just highlights that Republicans are willing to change the law and Democrats aren’t.”

Perhaps most upsetting to Net Neutrality supporters is Grayson’s belief that many phone and cable companies support Net Neutrality, at least how they define it.

Ammori thinks that is nonsense, and easily dismissed as lip service when one considers the actions of the telecom industry.

“If they supported Net Neutrality, we’d have it by now,” he said. “They’ve spent hundreds of millions fighting against Net Neutrality… This is part of their pitch: ‘We don’t plan on blocking anything on the Internet. We just want the right to do so’… He’s essentially crediting their PR claims.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/MSNBC Alan Grayson on Net Neutrality.flv[/flv]

Grayson faced questions about his position on MSNBC about his Net Neutrality views, and was lectured by progressive talk show host Cenk Uygur.  Grayson called the FCC “a fundamentally corrupt organization.”  (2 minutes)

Almost two years to the day Frontier Communications quietly introduced language in its customer agreements providing a monthly broadband usage allowance of just 5GB per month, the company has quietly removed that language from its terms and conditions.

The 5GB usage allowance was deemed generous by Frontier CEO Maggie Wilderotter.  Frontier claimed most of its 559,300 broadband subscribers (2008 numbers) consumed less than 1.5 gigabytes per month.  But news of the cap angered customers anyway, particularly in their biggest service area — Rochester, N.Y.  In fact, Frontier’s usage cap was what sparked the launch of Stop the Cap! in the summer of 2008.

While never universally enforced against the company’s DSL customers, Frontier has used that portion of its acceptable use policy to demand up to $250 a month from some “heavy users” in Mound, Minn.

Frontier’s usage limit language also played a role in a major controversy in April, 2009 when Time Warner Cable planned usage limits of their own for western New York customers already faced with Frontier’s 5GB usage limit.

The phone company used Time Warner’s planned usage cap as a marketing tool to switch to Frontier DSL service.

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

This website has pounded Frontier for two years over its continued use of the 5GB language as part of its broadband policies.  We raised the issue with several state regulatory bodies as part of Frontier’s purchase of Verizon landlines in several states.  Several state utility commissions raised the usage cap issue with Frontier as a result, deeming it negative for rural broadband customers who would effectively endure rationed broadband service from a de facto monopoly provider.

We also criticized Frontier for promoting its MyFitv service, little more than a website containing Google ads and embedded videos already available on Hulu, while not bothering to tell its customers use of that service on a regular basis would put them perilously close to their 5GB allowance.

In the end, Frontier itself denied they would strictly enforce the 5GB limit, making its continued presence in the company’s terms and conditions illogical.

Now, the company has returned to the earlier language it formerly used, reserving the right to shut you off if you use the service excessively or abusively.  This resembles similar language from most broadband providers.  While not absolute in defining those terms, Frontier doesn’t commit to a specific number either.  Today’s “generous usage allowance” is tomorrow’s “rationing.”

If Frontier cuts off customers for using only a handful of gigabytes a month, deeming it excessive, we want to know about it.

Stop the Cap! opposes all Internet Overcharging schemes like usage caps, speed throttles, and so-called “consumption billing.”  We believe such limits retard the growth and potential of broadband service and are unwarranted when considering the ongoing decline in costs to provide the service.  We do not oppose providers dealing with customers who create major problems on their networks, but believe those issues are best settled privately between the company and the individual customer.

Providers must also be honest in recognizing that broadband is a dynamic medium.  They have a responsibility to grow their networks to meet demand, especially at current pricing which provides major financial returns for those offering the service.  We also believe broadband tiers should be limited to speed, not consumption.  Customers with higher data demands will naturally gravitate towards higher-priced, faster-speed tiers, providing higher revenue to offset the minimal costs of moving data back and forth.

Broadband customers will be loyal to the providers that treat them right.  We applaud Frontier Communications for finally removing the last vestiges of its infamous 5GB usage allowance.  Hopefully, going forward, Frontier will spend its time, energy and money improving its broadband service instead of trying to convince customers to use less of it.

Opelika residents who cast votes in Tuesday’s special referendum on cable competition delivered a decisive “yes” to city officials seeking to build a fiber to the home cable and broadband system in the city.

Although the turnout was just 18 percent, 62 percent of residents voting voted for the system’s construction, 38 percent said “no.”

For most of the supporters of the project, it was about delivering a resounding message to Charter Cable that their days of endless rate increases and sub-standard service in eastern Alabama were over.

Opelika mayor Gary Fuller was excited by the outcome of the vote.

“It’s a great day for Opelika. It’s a great day for our future. It’s a terrible day for Charter,” he told a crowd waiting to hear the mayor’s reaction to the results of the special referendum.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Opelika Votes Yes Cable Competition 8-10-10.flv[/flv]

The Opelika Auburn News captured some of the remarks from Opelika Mayor Gary Fuller announcing the results of the referendum.  (4 minutes)

Fuller has been complaining about the lack of cable and broadband competition in Opelika for years, noting residents regularly complain about Charter Cable’s prices and service.

Fuller

Part of the drive to look for alternatives may have come from watching a cable overbuilder, Knology, installing a $20 million fiber network down the road in nearby Auburn.

While Knology does compete with existing cable providers in many cities, it often takes years for the company to deliver service to every residence, if ever.  In fact, Knology is most commonly found in multi-dwelling units like apartment buildings, condos, and new housing developments where construction costs are lower.  Fuller proposes to build a network that will serve everyone.  The city will negotiate with companies like Knology to use the new fiber network to provide service to residents.

“I believe that this is the most amazing thing that any of us as elected officials will ever do during our service in the city of Opelika, because of what it will mean to our future especially with high speed Internet that will be a calling card for high paying jobs in new industries for Opelika,” Fuller said.

Charter Cable fought hard to stop the network, but wasn’t always accurate along the way.

Skip James, Charter Communications government relations director, claimed other municipal networks were financial failures.

“It has been repeatedly demonstrated that when cities or municipal-owned power companies enter the video/data/phone business, it usually ends up costing the taxpayers at least twice as much as the consultant had suggested,” James said. “It also has resulted in many municipalities selling off the networks at significant losses or walking away from further operation of the network.

“After the initial system cost, the city has to stay abreast with the competition and changes in the marketplace by investing more money in costly upgrades. This is a high risk of taxpayer money, since the taxpayers are generally not aware that they have the ultimate responsibility for payment and/or default on the huge bonds to build and upgrade the system.”

Of course, many municipal systems are up, running, and profitable for the communities they serve.  Construction delays and costly lawsuits from incumbent providers can delay such projects and boost costs, but since Opelika’s system will be built with revenue bonds, which are paid back through generated revenue, taxpayers cannot be left responsible for payments or defaults.

James could not understand why the city would want such a network when Charter was already serving the community.

“Our communications system is in front of almost every house and business in the city of Opelika,” James said. “Why would the city want to risk so much taxpayer dollars and go into this much debt when a network already exists that can provide services the customers want at a much lesser cost?”

Opelika residents who wanted an alternative to Charter may have just voted their answer.

City officials will seek bids for construction work in the near future.  Operations will be run by Alabama Light and Power.

There were a total of 2,819 ballots cast. Here’s how they broke down according to ward:

• Ward 1: 211 yes, 54 no
• Ward 2: 236 yes, 86 no
• Ward 3: 368 yes, 333 no
• Ward 4: 443 yes, 228 no
• Ward 5: 492 yes, 368 no
• Absentee ballots: 14 yes, 7 no

[flv]http://www.phillipdampier.com/video/WTVM Columbus GA Opelika Cable Controversy and Vote 8-10-10.flv[/flv]

WTVM in Columbus, Georgia covered the story of Opelika’s journey to build their own fiber network.  (5 minutes)

Charter Communications, the cable success story that wasn’t, wants consumers in Opelika, Alabama to believe their cable system is better by the last mile than any fiber-to-the-home system around.

Residents of Opelika are voting today on a referendum to allow the city to finance the construction of a true fiber to the home network for residents and businesses across the area.  They are up against cable industry opposition and a small group of vocal citizens who oppose the project on political grounds.

Charter Cable, still dusting itself off from bankruptcy reorganization, told Fierce Telecom that their hybrid coaxial-fiber cable system was actually better than an all-fiber network.

What’s most interesting here is Charter’s stance that their HFC network, which would also include fiber, is more resilient than an all-fiber last mile network. “This delivery system keeps the cost down for residential customers while supplying direct fiber optic connections to businesses requiring the maximum bandwidth available nationally,” said Skip James, government relations director for Charter Communications. “If a coaxial cable is damaged by traffic accidents or excavation procedures, it can be repaired rather quickly, whereas a damaged fiber optic cable will take hours or days to repair, depending on the scenario.”

Obviously fiber cuts can happen with cable networks too, and this kind of argument is an about face for cable operators, who are usually busy trying to convince people that fiber and cable are largely indistinguishable.

Opelika’s network capabilities will be readily apparent once consumers realize a fiber to the home system can easily deliver the same upstream and downstream speeds, something Charter Cable can never offer on its network.  Fiber is also near-infinitely upgradeable, while cable systems are forced to take away analog channels from customers to make room for services that are already provided on most true fiber networks.