Tens of thousands of Oceanic Time Warner Cable customers across Hawaii were without Internet, cable, and phone service for up to 14 hours after an undersea TW Telecom fiber cable was cut near Lanai at around 1:10am Tuesday.

While broadband users on Kauai and Oahu managed to be rerouted after a two hour outage, residents on Maui and the Big Island endured more than a half-day outage for all of Time Warner Cable services.

The affected cable experienced an outage off Lanai Island

The impact of the fiber cut also disrupted over-the-air broadcasting — many feeds to Hawaii’s translator stations, which extend signals from Honolulu across the Hawaiian Islands, were also sent over the affected cable.

When Time Warner customers in Hawaii woke up Tuesday morning, many were left with fewer than 20 cable signals still working — those delivered via satellite, and no phone or broadband service.

The affected fiber cable is laid in water 3,000 feet deep, which means it will take weeks to manage repairs.  The cable company managed to obtain alternate connections, and some criticized the operator for not having backup service available immediately.

Restoration of services were complete around noon Tuesday for the Big Island, with Maui County getting phone and Internet service back by 3pm.

Hawaiian Telcom, Hawaii’s largest telephone company, said it wasn’t affected by the outage.

The Star-Advertiser reports the fiber cable is rented by Oceanic to communicate with their other cable operations throughout Hawaii:

Oceanic Time Warner rents bandwidth (data transmission capacity) from the fiber-optic cable, co-owned by Colorado-based TW Telecom and Wavecom Solutions, formerly Pacific Lightnet. TW Telecom was part of Time Warner Cable but became an independent entity in 2008.

Oceanic Time Warner is among 144 Maui firms that rent bandwidth from that section of the cable. That section went online in 1997, Miyake said.

When the cable was cut, Internet protocol addresses did not know which route to take back to the mainland. Oceanic crews had to reroute connections through alternate cables connecting the islands.

“We have a daisy-chain fiber connection that connects all the islands together,” said Norman Santos, Oceanic’s vice president of operations. “The main transmission point for Oceanic Cable is here on Oahu.”

Oceanic promises they will be developing additional redundancy in their network in the future to make sure they can restore service more rapidly in the event of a future disruption.

Typically, Oceanic Time Warner Cable does not give refunds unless service is out for a full 24 hours -and- customers specifically requests credit, but the company is debating whether to grant an exception this time.

“We’re going to make a determination as to if and how blanket credits will be authorized, if individual credits will be authorized, but we’re going to do the right thing,” Norman Santos with Oceanic Time Warner Cable told KHON-TV.

Customers can be in a better position to receive that credit by contacting Oceanic today and asking for it before you (and perhaps they) forget.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Time Warner Hawaii Outage 7-27-10.flv[/flv]

Every major television station in Hawaii covered the extensive service outage.  Here is a compilation of reports from KGMB, KHNL, KHON, and KITV-TV regarding the outage, its cause and impact.  (14 minutes)

A snake in the grass… defective water meters can result in customers paying hundreds of dollars for water they never used.

“Paying for what you use” is an idea some broadband providers want to adopt to re-price broadband service in an effort to capture additional revenue and profits from “high usage” customers.  But when the provider reads the meter without any independent oversight, customers can be billed for any amount of usage — accurate or not — and have little recourse to prove their case if overbilled.

At least water customers in Charlotte, N.C., are getting an independent audit of their water meters after Charlotte-Mecklenburg Utilities began sending some customers bills in the hundreds of dollars for a single month’s usage.

Broadband providers who bill consumers based on their usage answer to no one.  Completely deregulated, providers need not submit to independent verification of their measurement tools.

“There is no Bureau of Weights and Measures verifying broadband usage meters anywhere in North America that I’m aware of,” writes Stop the Cap! reader Mitch.  In fact, in several countries the telecommunications industry is specifically excluded from oversight by such accountability agencies.

In Australia, large businesses are often the first to discover overbilling because of their accounting practices which track usage over time.  Australian telecommunications companies are exempt from monitoring by weights and measurement oversight.  Canadians have complained about metered charge accuracy for several years now, especially when usage doesn’t appear on web-based “usage gauges” for days.  Nobody verifies those meters, either.

In late June, the Charlotte Observer reported a sampling audit of 9,000 out of 250,000 water meters found a significant error rate of at least 1.4 percent.  While that’s a small percentage, the numbers add up — more than 3,000 area customers would be billed erroneously at that error rate, some for hundreds of dollars more than they actually owe.

The audit is continuing, but early findings show that the utility has a significant problem in how it bills customers.

The audit so far has found 78 residential accounts where there was a mismatch of more than 1 CCF (100 cubic feet) of water usage. The mismatch was between the mechanical water meter, which is considered reliable, and the more error-prone electronic transmitters that send water usage data to the utility. While this raises concerns, individuals requiring professional assistance to address such issues can check out Sarkinen Plumbing here!

Some of the mismatches suggested that the customer was billed too much, while others showed the customer was billed too little.

“Some (of the accounts) were for only a few dollars, said Barry Gullet, CMU director. “Some were several hundred dollars.”

CMU calls the results thus far “not unexpected and within industry norms.”  But when customers called to complain about suddenly higher bills, CMU feigned ignorance, telling several customers the meters were accurate — perhaps they had a leak or washed their cars too many times.  One customer reporting a bill four times higher than average was told to hire a plumber at his expense to repair the problem.  It later turned out to be an erroneous meter.  Now that customer is also out the cost of the plumber visit.  CMU inflamed matters further in early June when it blamed the news media for “hyping” a non-existent problem, despite a finding from the Charlotte-Mecklenburg Utilities Advisory Committee showing an electronic equipment failure rate three times the national average.

That CMU is being held accountable by an independent audit was an important part of the process that eventually led them to admit there may be a problem with meter accuracy, say city officials.

“It is a breath of fresh air to have some acknowledgment that there is a problem and a sense about what to do about how to move forward with it,” Mayor Anthony Foxx told WCNC-TV.

CMU’s final report will be out in September.  By then a third party auditor will have looked at 9,000 meters.

The question for broadband consumers is whether you trust your cable or phone company to read your usage and bill you fairly if they know nobody is watching them do it.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WCNC Charlotte Water Meter Debacle.flv[/flv]

WCNC-TV in Charlotte ran three reports on the water meter controversy, starting in December 2009 when some enormous water bills arrived as unwelcome Christmas gifts from the local water provider.  (6 minutes)

Broadband providers with a vested interest in keeping the marketplace a comfortable (for them) duopoly want you to believe everything is great in American broadband.  They would have you believe there is little room for improvement, despite the ongoing drop in America’s global broadband rankings and the ever-increasing price for the service.

Google’s announcement this spring that it was looking for a few great communities to provide 1 gigabit broadband service at competitive rates caused a firestorm… of interest.  Over 1,100 communities have applied for the service and more than 200,000 consumers have nominated their towns and cities for Google Broadband.  Apparently there is plenty of room for improvement after all — from coast to coast and in every state.

The small dots refer to local government applications for the service, the large dots indicate places where more than 1,000 individuals nominated their community.

Communities Applying for Google’s Think Big With a Gig Project

Kyle "What Broadband Problem?" McSlarrow

In Kyle McSlarrow’s world, the only broadband problem is the one invented by the Federal Communications Commission when it claims that service is not being deployed to all Americans on a “reasonable and timely” basis.  The head of the National Cable and Telecommunications Association (NCTA), the cable industry’s lobbying group, has declared today’s broadband a U.S. “success story that keeps getting better.”

Writing in the group’s “CableTechTalk” blog, McSlarrow tells his readers that 95 percent of Americans already have broadband service available to them that meets the 4Mbps minimum speed standard proposed by the FCC, so where is the big problem?

McSlarrow’s interest in the economics of rural broadband is ironic considering the cable industry routinely bypasses rural Americans.  Where cable lines do predominate, meeting the FCC’s anemic 4Mbps minimum speed standard is not the biggest problem — cost is.  Where cable lines don’t reach, speed is an issue for many wireless and DSL subscribers.  For others, broadband service is not available at any price.

McSlarrow plays cable’s advantage on speed issues to promote minimum speeds higher than those sought by phone companies like AT&T and Verizon.  Of course, cable broadband does not rely on antiquated copper wire telephone networks.  In rural areas, many of these networks are held together with minimal investment.  DSL at any speed can be a luxury when available.

McSlarrow’s recognition that most of rural America will continue to be served by telephone companies doesn’t stop the cable industry from seeking an advantage over their nearest competitors by advocating for reduced subsidies for rural areas and policies that guarantee no potential competitor can ever see a dime in government broadband money.

Because the report plainly acknowledges that there is no reasonable business case to be made for extending broadband facilities to many of the unserved homes.  So instead of viewing the report’s finding as an indictment of broadband providers, it’s  perhaps better read as a statement of principle by the Chairman and two commissioners that, in their opinion, broadband already should be universally available, and, if there is no business case for that universal deployment, the government may have to step in to achieve it. So far as that goes, we agree.  For example, we support the report’s call to action on specific items that will speed broadband deployment to unserved communities.  Immediate FCC action on Universal Service Fund (USF) reform and pole attachment policy is critical to connecting unserved areas.

As explained in comments we filed last week, our industry strongly supports the USF reforms recommended in the National Broadband Plan (NBP).  To fund the FCC’s broadband USF proposals, we recommend adopting our proposal – filed in a November 2009 rulemaking petition – to reduce subsidies in rural areas where ample phone competition exists.  The sooner the Commission reduces unnecessary funding in the existing high-cost support program, the sooner it can direct funding to broadband deployment and adoption.

McSlarrow’s comments neglect to tell the whole story about what the NCTA actually wrote in its comments filed with the FCC:

The 4Mbps/1Mbps standard reflects today’s marketplace reality that most consumers choose not to purchase the highest speed tiers that are offered by their broadband provider. By setting a standard based on the services actually purchased by consumers, the Plan strikes the appropriate balance – not so low that it deprives consumers of the ability to purchase a service that meets their needs and not so high that it will require a significant infusion of new government funding.

Second, based on this definition of broadband, the Plan found that the vast majority of Americans – 95% of households – already have access to broadband, and that 80% of those consumers live in geographic areas served by two or more providers. For these areas where broadband has already been deployed, there is no basis for any increase in support; indeed, as NCTA has demonstrated, in many of these areas there is no basis for any high-cost support at all.

Consequently, the only areas that should see an increase in the support they receive are those areas that do not have broadband and qualify for CAF support, i.e., areas where there currently is no business case for private investment in broadband facilities.

In Great Britain, speeds promised don't match speeds delivered. The FCC is studying whether the same is true in the United States.

McSlarrow is disingenuous about Americans’ interest in improved broadband.  It’s not surprising many do not choose the highest speed tiers available from telephone and cable providers when one considers the premium prices charged for that service.  Some NCTA members charge $99 for 50/5Mbps service, which in other countries like Hong Kong sells for a fraction of that price.  One need only consider Google’s plan to deliver 1Gbps service to a handful of American communities.  It’s easier to count the communities that were not interested in this super-fast service.

The cable industry can afford to relent on a 4Mbps minimum speed standard for downloading as virtually all cable broadband providers already offer “standard service” plans well above that rate.  The cable industry’s own “lite” plans, usually 1.5Mbps or less, are not exactly the industry’s most popular.  Americans will choose higher speed service at the right price.

Broadband availability figures have become an important political issue, which is why controlling broadband mapping is so important to cable and phone companies.  Being able to offer that “95 percent of Americans already have access,” a figure in dispute by the way, can make a big difference in the debate.  As Stop the Cap! readers have seen repeatedly, broadband maps that depict broadband service as widely available in many areas actually is not, especially from phone company DSL service, which depends heavily on the quality of the existing infrastructure.

Most importantly, the NCTA seeks a new, even stricter standard for broadband funding under Universal Service Fund reform that would immediately deny money to any applicant that cannot prove there is no chance for any private investment in broadband.  As we’ve seen from broadband improvement applications filed under the Obama Administration’s broadband stimulus program, cable and phone companies routinely object to most proposals, claiming “duplication” of existing broadband service even in areas they have chosen not to provide service.  The NCTA would have us set the bar even lower, allowing any private entity to kill funding projects based solely on their claimed interest in providing the service themselves.

One sensitive spot the FCC did manage to hit was taking providers to task for advertising broadband speeds they don’t actually provide to customers.  While DSL speeds vary based on distance from the telephone company’s central office, cable broadband speeds vary depending on how many customers are online at any particular moment.  The cable industry’s shared access platform can create major bottlenecks in high-use neighborhoods, dramatically reducing speeds for every customer.  While some cable operators are better than others at re-dividing neighborhoods to increase capacity, others won’t spend the money to upgrade an area until service becomes intolerable.  That means consumers sold 10Mbps service may actually find it running at less than half that during evening hours.

A sampling of British cable and telephone company DSL providers, all of which aren't giving their customers what they are paying for.

McSlarrow’s view is there isn’t a problem there either — the FCC is relying on old data:

The key statistics in the report are drawn from Form 477 data for December 2008, data that was out of date when it was released earlier this year and is now 18 months old.  Broadband providers have made two subsequent Form 477 filings (with another one scheduled in a few weeks), so the reliance on stale data is frustrating.

Equally troubling is the Commission’s repetition of the NBP’s claim that “actual” broadband speeds are only half of “advertised” speeds.   After the NBP was released, we submitted an expert technical report demonstrating that the comScore data used was deeply flawed.  Since then, cable and telco ISPs have been working constructively with Commission staff on a hardware-based testing regime that should produce more accurate results.  Given the hard work that has been devoted to produce accurate speed measurements, it is disheartening that the 706 Report chose to perpetuate the NBP’s flawed speed data conclusions.

Finally, some of the data relied on in the 706 Report is not publicly available.  The report relies extensively on a cost model created for the NBP, but that model hasn’t been released, making it impossible to validate its results.  The Commission also repeatedly refers to an FCC staff report on international trends, but that report also has not been released.

The frustration McSlarrow writes about is shared by cable subscribers stuck in overloaded neighborhoods where service does not come close to marketed speeds.  The FCC is conducting an independent speed analysis that goes beyond speedtest data, and the results will be forthcoming.  In other countries where similar speed claims have not met reality, providers were usually found culpable for promising service they didn’t deliver.

Just ask Ofcom, the British regulatory agency charged with addressing this dilemma.  Earlier today they released evidence that 97 percent of UK broadband customers were not actually getting the speeds they were promised, and the gap between marketed speed and actual speed was growing. Will things be any different for American providers who use fine print to disclaim their bold marketing promises about speed?  Time will tell.

Finally, McSlarrow’s concerns about withheld data is ironic enough to call it a “pot to kettle” moment.  As those challenged with broadband mapping can attest, nobody keeps raw data about broadband availability and speeds closer to the vest than cable and telephone companies.

Of course, the ultimate agenda of the NCTA is to defend its industry’s record in broadband service, which means reducing any broadband challenges into little more than whining by Americans who don’t know how good they have it.

In the financially difficult world of landline service, there has been one bright spot for Verizon — its state-of-the-art fiber optic service FiOS.  The cost of replacing obsolete copper phone with 21st century fiber optics has proved to be an expensive, but successful endeavor, at least in the eyes of customers.  Hated by Wall Street for its costs but loved by those who enjoy the service, FiOS has successfully proven traditional phone companies can earn money by providing the kinds of services consumers want, just so long as investors are willing to hang in there while the investment pays off over time.  But many investors aren’t.

Some of Verizon’s critics in the investment community complain the company is n0t earning enough from FiOS — in fact, for some critics who didn’t want Verizon spending money on a fiber-to-the-home network in the first place, financial returns provide the evidence used to claim they were right all along.

Despite the naysayers, revenue for Verizon FiOS is up by almost one-third each year, with average revenue per user now reaching $145 a month.  That’s well above the money Verizon earns on its legacy copper network phone customers keep leaving, especially outside of major cities where DSL service is spotty.  There is plenty of room for Verizon FiOS to grow in the limited communities it reaches.  Unfortunately, Verizon has stopped expanding its FiOS network to new communities, in part from pressure from investors who want to see cost cutting from the telecommunications giant.

Despite the positive reviews (subscription required) FiOS earns from consumer publications like Consumer Reports, Verizon slashed marketing and promotion expenses, resulting in second-quarter net additions for FiOS TV coming in at 174,000, compared with 300,000 a year earlier.

With Verizon now deploying service to communities on a reduced schedule, the results have been underwhelming according to the Wall Street Journal:

Verizon Communications may want to tweak the ad slogan for its TV and ultrafast Internet service to “This is FIOS. This is pretty small.”

Not catchy, but it would be more accurate than the current “This is Big” line.

[…]It eventually became clear that Verizon had slowed the time frame of the buildup, originally scheduled to be mostly done this year. Instead, it now expects to meet its target of passing 18 million homes with the network by 2012.

The slower timetable allows Verizon to trim capital spending this year. The problem is that FiOS’s expansion could stall with a less aggressive approach to growth. Already, Verizon has retreated from its target of adding one million subscribers a year, in favor of boosting penetration to 40% of homes passed. At June 30, its 3.2 million TV subscribers was about 20% of homes passed.

[…]And that can only reinforce questions about long-term returns on the $23 billion FIOS investment.

Evidence that Verizon is looking for more customers in its existing FiOS markets can be found in the news the company dropped its contract commitment for new customers.  The term contracts may have held some potential customers back out of fear of a lengthy term commitment with a $360 early cancellation fee.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon FiOS goes contract free ad.flv[/flv]

Verizon started running this ad several weeks ago touting its new “no contract” FiOS service.  (15 seconds)

But a change in strategy isn’t enough for investors who demand immediate results through further cost cutting measures.

In Verizon’s second quarter earnings reports, company executives speak to this perception, proudly noting they have slashed costs through job-cutting and reduced spending on infrastructure and services.  Some of those services include DSL expansion for rural Verizon customers, many who are now left on hold waiting for broadband from Verizon indefinitely.

In many states, Verizon’s DSL expansion was incremental at best, with the company issuing press releases touting new service for literally hundreds of potential customers.

Verizon’s traditional landline business continues to lose customers year after year, and is abandoning millions of others through sell-off deals with companies like Frontier Communications.  Light Reading notes Verizon eliminated 11,000 jobs in its Mid-Atlantic and Eastern regions through early retirement incentive programs, an idea soon to spread to other regions, particularly California and Texas in the coming months.  This kind of cost cutting saves cash and allows companies to report positive financial results in quarterly reports.

According to John Killian, executive vice president and CFO of Verizon, the job cuts are just getting started.  As Verizon further alienates its non-FiOS landline customers who can find better service and lower prices elsewhere, the company expects “further force reductions” in the coming months.  Verizon is also slashing costs by selling off real estate, consolidating operations and vacating buildings.

The impact can become a vicious circle of deteriorating service, customer defections, and additional cost cutting, which starts the circle all over again.  In West Virginia, deteriorating Verizon phone lines reached the point of serious service outages whenever major storms hit the state.  Then Verizon simply sold off its network in West Virginia.  Those customers are now served by Frontier Communications.

Verizon previously declared the era of the landline dead, and is now seeking to prove its point, even as it demonstrates it can make money by spending money on FiOS, if only investors would give them the chance.

[flv width=”576″ height=”344″]http://www.phillipdampier.com/video/CNN Behind the scenes at Verizon Fios 3-15-10.flv[/flv]

CNN took a behind the scenes tour of Verizon’s FiOS network in New York City, from the central offices to individual apartments.  (4 minutes)