Sol Trujillo, the former head of Telstra, was routinely depicted in the Aussie cartoon press in a sombrero reflecting his Mexican heritage

Yesterday’s Wall Street Journal Opinion page features a piece of nonsense from Holman Jenkins, Jr., one of the editorial writers for the paper, decrying Australia’s “Broadband Blunder” by not allowing Telstra, the dominant provider, free market means to define problems and create solutions in broadband.  The editorial carries a clear subtext for American policymakers — let the free market do it all and keep government out of it (unless they want to cut some checks with taxpayer money or other subsidies, of course).

Australia lacks America’s bottomless think-tank and K Street resources for publicizing policy differences. Its parliamentary government puts all the policy levers, including a ready resort to secrecy, in the ruling party’s hands. Australia is a small nation, with a small elite that tends to place limits on burn-the-bridges debate.

This may sound ideal to Americans, but the results aren’t always good, says Mr. Burgess. Australia, like America, has its “wingnuts,” he says, but they don’t get a hearing. “There’s no sharpening of issues. Policy ideas aren’t fully vetted.”

The [National Broadband Network] NBN, a tremendously awful idea, is a case in point. The government wants to spend $39 billion to deliver 100 megabits to every household in the next decade, without the slightest idea how it might be done commercially or whether customers, who already can get 21 megabits through wireless in most of the country, would be willing to support NBN’s huge costs.

Trujillo was reviled for increasing his own compensation package while presiding over massive cost-cutting layoffs

That’s a remarkable bit of news, for both Americans and Australians.  Jenkins comes right out and tells all of corporate America’s best K Street secrets.  Australia doesn’t have the corporate money-astroturf PR-influence machine that frames debates with a corporate point of view.  ‘Burn-the-bridges debate’ is the way Jenkins might characterize it, but burning actual facts and reality for astroturf fiction is more in keeping with reality.  On just about any issue, from energy deregulation to banking reform to last summer’s often-ridiculous health care debate melodrama filled with death panels, hiring a PR firm that can launder corporate-string-pulling-connections guarantees you can lie, distort, and obfuscate anything into something it’s not, in hopes of dispensing with it.  The Net Neutrality as Marxist Plot nonsense emanating from Americans for Prosperity and Glenn Beck is just the latest example of the broadband policy Distact-O-Matic in use.

American wingnuts not only get a hearing, they often get all of the attention, particularly in the television media.  The more outlandish and dramatic the video, the better.  Policy issues are never vetted at all when you start “sharpening of the issues” with accusations Mao Tse-tung is the founding father of Net Neutrality.

Australia’s NBN is hardly an example of government trying to compete with private industry.  In fact, it was the private industry which built the slow, incrementally upgraded, usage capped, and expensive network that misses large portions of the country which drove the government to consider doing what private industry simply refused to do – provide Australians a state of the art broadband platform.  It’s obvious the government doesn’t need to “do it commercially” with large profits and leveraging higher prices in non-competitive markets — they just need to see it gets done and paid for, recognizing Telstra and other providers will not spend the money to build it themselves because they don’t like the long term wait for that investment to be paid back.

Most Australians will also be surprised to learn they can obtain 21Mbps through wireless “in most of the country.”  In fact, reasonably priced broadband in Australia is much slower, and carries a small usage allowance.

Of course, it takes an unwonted faith in government to believe it will deliver the promised digital nirvana on-time, on-budget or at all. In the meantime, Telstra would have no incentive to invest in its own network, so Australia could end up with the worst of possible outcomes: neither a shiny new functioning government network nor an existing Telstra network that keeps pace with technology and customer demand.

Ah, the elusive “incentive to upgrade” reasoning.  The moving target of what represents appropriate incentive (extra fat profits, no competition, keeping costs low by rationing service) may work very nicely for interested shareholders but do little to advance the broadband platform either in Australia or the United States.  This debate is not new.  Decades earlier, power companies argued that rural areas didn’t need electrification because farmers wouldn’t use it (or afford it), or it was simply too expensive to wire for too few customers.  Citizens in both countries will have to impress on their government whether they consider broadband service a nice luxury to have or an essential utility that must be provided, even if it means bypassing the ‘100% free market’ approach that turns up their noses at rural residents or those deemed too poor to afford it.

Just because Jenkins claims Telstra keeps pace with technology and customer demand doesn’t make that reality.  Australians would argue both points, particularly comparing what they get for their money versus what we get in the United States for ours.

The rest of the piece is a glorification of Sol Trujillo, the controversial former head of Telstra, who has been compared with George W. Bush and Karl Rove for his combination of “I am the decider” confidence and Rove’s “take no prisoners” style of defending those decisions.  Jenkins suggests the source of the active dislike of Trujillo was his willingness to go personal in attacking Australian officials in speeches and press accounts.  But many more Australians would find fault with Trujillo’s very generous compensation package and benefits he and his associates earned even while the stock underperformed under his leadership, and with the sluggish, expensive, and capped state of Telstra’s broadband as he left.

LUS Fiber - Lafayette, Louisiana's public utility municipal broadband provider, offers fast speeds with great rates

Frustrated communities across America, take note.

If your town or city government starts making serious noises about constructing your own, municipally-owned broadband network (especially one built with fiber optics to the home), existing providers who have repeatedly said “no” to requests for faster service at more reasonable prices have a track record of quickly turning around and saying, “yes — why didn’t you ask us before?”

Big existing telecommunications players loathe the thought of facing a new competitor in their midst.  They are accustomed to the usual arrangement of one cable operator and one phone company.  Cable companies provide cable modem service, phone companies mostly provide DSL.  In smaller cities, and where a competitor is missing (or provides a lower quality service), there is almost no drive to upgrade.  Cable will set speeds just above what the phone company is offering, and both will co-exist happily ever after.

For communities being bypassed by the fiber revolution now underway by Verizon, and to a lesser degree AT&T, requests from civic leaders, businesses, and consumers for upgraded service fall on deaf ears.  ‘What you have now is good enough for this market, so be quiet and be lucky we give you what you’ve got now.  Oh, and we’re raising rates, too.’

In Rochester, the one upstate New York city not on the “to-do” list of Verizon (which is merrily wiring urban and suburban communities across their service areas with fiber optic cable FiOS), Time Warner Cable sees little incentive to raise speeds or upgrade to DOCSIS 3 with a phone company competitor that has no apparent plans to move beyond traditional old school DSL service.  Where FiOS does threaten, Time Warner Cable is in a hurry to provide “wideband” broadband as quickly as possible.

In Wilson, North Carolina, years of pleading from local officials to provide something beyond anemic broadband in their community was met with yawns from Time Warner Cable and Embarq, the local phone company.  Wilson decided to build their own municipal fiber network, offering faster speeds at better pricing.  Time Warner and Embarq did what most existing competitors do — they moved through the Four Stages of Telecommunications Competition Grief:

1) Behind the Scenes Threats and Anger: Companies work the phones with local officials trying to browbeat them into dropping the plans to construct municipal broadband, try to gin up partisan opposition, issue overinflated cost estimates, issue warnings about the trouble they’ll cause local politicians who support such initiatives, and snow a blizzard of documents illustrating how wonderful and reasonable their existing service is;

2) Stall Tactics Through Negotiation: Once home office is notified, a series of negotiations to attempt to forestall the project begins, such as throwing crumbs for incrementally better service, offers to build showcase mini-projects that represent a “win” for local politicians, or “looks good on paper” concessions that end up amounting to far less.  Most of these discussions are designed simply to stall to allow the company to prepare for stage three.

3) PR and Legal Blitzkrieg: Assuming local officials haven’t been discouraged away from their idea, or dropped it after starring in a company-sponsored press event – ribbon cutting a small wi-fi or school connectivity project, the next stage is a multi-front battle involving company legal teams filing lawsuits to delay or kill projects, public relations and astroturf lobbying efforts to distort issues and build public opposition, legislative maneuverings to make such projects untenable through industry-friendly laws, and often vague promises about impending upgrades making the entire project unnecessary.

4) Acceptance, Competition, and Better Service: The final stage is the realization consumers don’t always get suckered by astroturf groups and company scare tactics.  They accept the project is moving forward, and send out the press release saying they welcome the competition and are announcing their own significant service upgrade because “customers asked for it.”  Price increases slow, speeds increase, and service improves, all because of the reality that an aggressive competitor is in their future.

Wilson city officials tried negotiations for better service, got nowhere, and had to fight back against a blizzard of nonsense from the telecommunications industry trying to legislate such projects out of existence with changes to state law.  Americans for Prosperity, an astroturf group, even hassled residents in other nearby communities with robocalls to try and stop similar projects.

The arrival of Wilson’s Greenlight service, which offers speeds far faster than Time Warner and Embarq ever did, at lower prices, was a shock to Time Warner’s call centers.  As customers canceled, representatives taking those calls were in denial residents were actually achieving the speeds Time Warner failed to deliver.

[flv]http://www.phillipdampier.com/video/Chattanooga Builds Fiber Network.flv[/flv]

Chattanooga’s public power utility fought back against telecommunication company propaganda to construct fiber to the home service across the city, which launched this year. (5 minutes)

In Monticello, Minnesota, local telephone company TDS had spent years refusing requests to improve service in the city.  Speed and access issues plagued the community, northwest of Minneapolis.  Local officials had enough and voted to construct their own fiber to the home municipal network.

Enter the four stages.  TDS started by telling city officials the company’s network was state of the art for Monticello, and couldn’t be immediately improved because there was insufficient return on investment.  Companies want to be assured they are paid back for investments they make, and because Monticello is a relatively small city, there were questions whether the costs for a fiber network would be paid back quickly enough through revenues.

When that didn’t work, the company sued the city as a stalling tactic.  Despite the fact Monticello won case after case, TDS kept filing.  A full assault by large telecommunications interests also began, trying to gin up public opposition.  While the project was approved by voters, and Monticello was tied up in court, TDS quickly moved to stage four and started rapidly building their own fiber network in Monticello, actually putting down fiber the city was prohibited to wire themselves as the lawsuits dragged through the courts.

The company told Ars Technica that despite its earlier refusals to provide fiber service, TDS didn’t act earlier because it didn’t actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.

Then, in June, the company said with the advent of its own fiber network, the city of Monticello should back away from constructing theirs, because its economic viability report was partly premised on the fact TDS refused to provide that service.

To underline that, TDS’ new fiber network doubled customer speeds to 50Mbps, trying to keep customers from taking their business to  FiberNet Monticello.

[flv]http://www.phillipdampier.com/video/Vote Yes on Fiber.mp4[/flv]

Lafayette staged a multi-year battle with Cox and other providers to bring municipal fiber broadband to it’s corner of Louisiana.  This 30 second ad promoted a “yes” vote on the project.

In Louisiana, Cox Cable is facing accusations it’s engaged in predatory pricing to kill Lafayette Utility System’s fiber to the home network and EATel’s fiber network in Ascension Parish.  Cox Cable froze rates and moved in with DOCSIS 3 upgrades, delivering up to 50Mbps service.  Cox chose to upgrade Lafayette before any other Cox-served community.

The Lafayette Pro-Fiber Blog found this EATel billboard taunting Cox

EATel, an independent phone company that wired fiber across Ascension Parish, also faced down Cox.  When the cable company began promoting cut-rate pricing in Ascension, EATel took out advertising promoting Cox’s special prices — in other cities, much to Cox’s consternation.  EATel’s ads, much like those run by Novus against Shaw in British Columbia, tell Cox’s customers to call the company and ask for the lower price they are advertising elsewhere.

“Cox came in with an incredibly aggressive promotion for TV service with every bell and whistle you could imagine. We couldn’t figure out how they could even make money on it. So we took out an ad in the Lafayette newspaper that basically said, ‘Hey Lafayette, look at the great prices you are going to get from Cox.’ Cox was not amused,” Trae Russell, communications manager for EATel told Telephony Online.

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p style=”text-align: center;”>Joey Durel, Jr., president of Lafayette parish, testifies before the House Committee on Energy and Commerce on Lafayette’s municipal fiber network on February 27, 2008. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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p style=”text-align: center;”>

Lesson learned — just threatening to bring in a municipal competitor is often all it takes to turn a persistent “no” from the local cable and phone companies into “yes, Yes, YES!”

Of course, not every project is successful.  Some, such as Burlington Telecom Stop the Cap! reported on yesterday face political and cost challenges.  Others are killed through stage managed opposition and astroturf campaigns paid for by the telecommunications industry before they even get started.

In North St. Paul this year,  “PolarNet,” a planned fiber optic broadband network to stimulate the local economy was killed by an astroturf propaganda campaign undertaken by Qwest, Comcast, and other telecommunications companies that would have to deal with PolarNet as a competitor.  The telecommunications companies claimed it would result in higher local taxes and “more government” where it wasn’t needed.  Citizens defeated the proposal 67-33%.

Windom, Minnesota faced similar challenges and their fiber project was shot down in 1999, but with lessons learned, proponents brought it back up and won in 2000.  To this day, the community of 4500 in western Minnesota face considerable envy from adjacent communities — they want service from the fiber-to-the-home system as well.

Almost universally, opponents to municipal broadband systems claim they are financial failures and saddle communities with debt.  In reality, most have forced those opponents to provide improved service in their competitive communities, or those companies will become the financial failure.

[flv width=”427″ height=”240″]http://www.phillipdampier.com/video/Terry Huval of Lafayette Utility System April 2009.flv[/flv]

Terry Huval of Lafayette Utility System talks with the Fiber Revolution blog about the challenges Lafayette experienced building their own municipal fiber network.  Huval offers excellent advice for other municipalities exploring similar projects.  (April, 2009 – 10 minutes)

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p style=”text-align: left;”>Thanks to Stop the Cap! readers Tim and Matt who suggested this story idea.

Sen. John McCain (R-Arizona)

What a week.  Broadband policy now has its very own death panel, in the form of accusations that Net Neutrality policies are:

• a Marxist-Obama plot to control the Internet;
• designed to silence conservative talk radio like the Fairness Doctrine;
• going to ruin Sen. John “I don’t use e-mail” McCain’s (R-Arizona) day.

Just a few years ago we watched former Sen. Ted Stevens (R-Alaska) tell us the Internet is not a truck but a series of tubes.  Glenn Beck earlier this week was coddling a small, terrified puppy that he claimed represented cowardly media missing out on the grand Marxist conspiracy underway, and Net Neutrality was just the latest piece of the coup puzzle.  Now one Tennessee congresswoman believes Net Neutrality is the Fairness Doctrine of 2009 and is being run by a czar.

Let’s review:

Sen. John McCain (R-Arizona) has introduced the ironically named “Internet Freedom Act” to free the broadband industry from potential oppressive government overregulation.

“Today I’m pleased to introduce ‘The Internet Freedom Act of 2009’ that will keep the Internet free from government control and regulation,” said McCain.  “It will allow for continued innovation that will in turn create more high-paying jobs for the millions of Americans who are out of work or seeking new employment,” McCain continued.  “Keeping businesses free from oppressive regulations is the best stimulus for the current economy.”

It’s certainly a stimulus — for broadband provider coffers and for McCain himself, who is Congress’ top recipient of big telecom money in the form of campaign contributions (over $900,000 and counting).  He’s the best senator the telecom industry could buy.  But wait, the guy who doesn’t own a computer or use e-mail says ‘father knows best’ for America’s online communities? McCain released a statement introducing his new bill:

The wireless industry exploded over the past twenty years due to limited government regulation.  Wireless carriers invested $100 billion in infrastructure and development over the past three years which has led to faster networks, more competitors in the marketplace and lower prices compared to any other country.  Meanwhile, wired telephones and networks have become a slow dying breed as they are mired in state and Federal regulations, universal service contribution requirements and limitations on use.

And we all know who has one of those dying breed rotary dial wired telephones, don’t we?

In fact, wireless industry profits have exploded over the past twenty years as the vast majority of Americans signed up for service.  The industry has been so awash in cash they’ve been on a consolidation shopping spree for at least the past three years, buying each other out through mergers and acquisitions.  The number of competitors John McCain thinks he sees growing is, in reality, a case of double vision.  He should get that checked.  Lower pricing?  Not quite.

Consumers don’t dump wired telephones because of government regulations:

“Honey, I can’t believe they are doing a Reverse Morris Trust deal with the phone company over in West Virginia.  We should cancel our Verizon phone line and take our business elsewhere… to Verizon Wireless instead — that will show them!”

Consumers confronting two telephone bills, one for the wireless and one for the wired phone, makes one redundant for those Americans trying to economize in this difficult economy.  The McCain family doesn’t have to

The dog knows more than it's telling

economize thanks to Comcast, AT&T and Verizon – just a few cutting checks to the self-described maverick.  Increasingly, consumers are looking for better deals and finding one with the cable company’s “digital phone” product, or an Internet-based Voice Over IP service.  State and federal regulations aren’t the problem — the quality and price of the service can be.

The vast majority of those consumers switching to wireless do not escape “universal service contribution requirements” either.  More often than not, wireless phone bills are decorated like Christmas trees with add-ons for everything from USF fees to 911 support surcharges, local, county, state and federal taxes, among others.

Limitations on use?  That would not be the wired telephone line’s flat rate calling plan.  The limitations are more commonly found on the wireless side, where many consumers get an allowance and a per-minute fee for exceeding it.  It sounds like the out of touch senator probably still makes station to station calls to “enterprise numbers.”  Welcome to the 21st century.

In short, John McCain doesn’t understand what he is talking about.  He apparently does understand those big telecom industry checks he gets, however.  No doubt that is the real inspiration for this industry-friendly legislation.

Rachel Maddow spent several minutes Friday night breaking down McCain’s legislation and what Net Neutrality is really all about.

[flv width=”596″ height=”336″]http://www.phillipdampier.com/video/MSNBC Rachel Maddow Net Neutrality 10-23-09.flv[/flv]

Rachel Maddow and Xeni Jardin, co-editor of Boing Boing discuss Sen. McCain’s “Internet Freedom Act” and Net Neutrality. (6 minutes)

Glenn Beck from His Morning Zoo days on KZZP-FM Phoenix - Would Thomas Paine approve?

We’ve already dealt with the psychotic world of Glenn Beck.  The self-described “rodeo clown” is entertaining, as long as you recognize reality has a restraining order against Beck and must keep at least 900 feet away from him at all times.  Art Brodsky from Public Knowledge speaks to Beck’s worldview:

“Mr. Beck fails to understand the fundamentals of how the Internet works. He should be in favor of Net Neutrality, because it guarantees streaming of his program will not be able to be placed behind, say, Keith Olbermann’s Countdown. That could happen if NBC’s owner decided to pay protection money for prioritized data transmission.”

Meanwhile, Rep. Marsha Blackburn (R-Tennessee) took time out from her tireless efforts to root out the czar problem in the Obama White House to conflate Net Neutrality with the Fairness Doctrine, conservative talk radio’s garlic-to-a-vampire bugaboo.  Appearing at an event sponsored by the Astroturf group “Safe Internet Alliance,” Blackburn railed against “government interference” in broadband, as Kim Hart from The Hill took it all down.  It was an amazing feat, considering she stumbled her way through a statement:

“Net neutrality, as I see it, is the Fairness Doctrine for the Internet,” she said.  The creators “fully understand what the Fairness Doctrine would be when it applies to TV or radio.  What they do not want is the federal government policing how they deploy their content over the Internet and they want the ISPs to manage their networks and deploy the content however they have agreed on with ISP.  They do not want a czar of the Internet to determine when they can deploy their creativity over the Internet. “They do not want a czar to determine what speeds will be available….  We are watching the FCC very closely as it relates to that issue.”

When it comes to broadband expansion, she said, she wants to make sure “all individuals’ rights are respected and that we look at the freedom of all broadband participants.” She said Congress needs to make sure the groups receiving stimulus funds for broadband expansion are able to deploy reasonable and effective network management tools so they can be helpful in tracking down illegal activity.”

“We shouldn’t look at technology as how do we punish and impede, but how do we encourage innovation,” she said.  “That needs to be a key thought as we move forward.  How do we encourage that innovation and not impede it?”

Blackburn herself is impeding a rational discussion with her word salad.

Rep. Marsha Blackburn (R-Tennessee)

Blackburn doesn’t see or understand much of anything.  Her off the rails representation of Net Neutrality as the equivalent of the Fairness Doctrine is bizarre at best, just plain rock stupid at worst.  Indeed, the Fairness Doctrine did dictate a form of balance in opinions for licensed radio and television stations in this country before it was repealed.  Net Neutrality specifically requires Internet providers, and everyone else, to keep their hands out of determining whether something is balanced or not.  The Internet is not a licensed medium, and the free exchange of ideas possible on today’s Internet already provides the ultimate fairness, where ideas can be freely expressed by anyone.

Glenn Beck sees Marxists.  Marsha Blackburn sees czars.  These folks need to cut down on the borscht for lunch.

Blackburn’s only priority for broadband stimulus seems to be using the money to help ferret out illegal activity online.  Perhaps she can come over and clear out my spam folder.

I didn’t even realize we had a Broadband Speed Czar.  I want to be the Broadband Speed Czar, moving across the land and banishing slow, expensive, and just plain lousy slow broadband technologies.  I decree no Internet Overcharging experiments and fiber-fast speeds for all!

As for the “Safe Internet Alliance,” considering their members include AT&T, the National Cable & Telecommunications Association, Verizon, and a whole mess of other astroturfers (many who also belong to Broadband for America), we can guess the kind of safety they are looking for.

Phil Kerpen (left) waits his turn while Glenn Beck explains the Marxism connection in Net Neutrality

Glenn Beck, who is America’s biggest argument for mental health parity in health care reform, has turned his paranoid ravings to the subject of Net Neutrality, suggesting the whole concept is one giant government conspiracy to take over the Internet.  To prove the point, he brings on Phil Kerpen, policy director and master astroturfer for “Americans for Prosperity,” which should really be called “Telecom Companies for Prosperity.”

Glenn Beck believes there is a conspiracy by Obama Administration officials, working with “Marxists and Maoists,” to secretly gain control of the Internet through the implementation of Net Neutrality, and to prove it, he brings on a guy whose paycheck depends on the corporate contributions from big telecommunications companies that want him to pretend he represents actual consumers.  The real conspiracy was sitting just six feet away from Glenn, but he missed it because he was too busy rearranging pictures of Mao Tse-Tung and others on his magnetized chalkboard.

Drawing chalk lines and stacking and re-stacking pictures like some sort of deranged episode of The Hollywood Squares doesn’t actually prove a conspiracy, but I’ll take Mao Tse-Tung in the center square to block!

In a remarkably fact free ten minutes, Glenn’s photo album of the guilty got star billing, as he labeled those who personally crossed swords with Beck or Fox News as “Marxists.”  Van Jones, who founded Color of Change, the organization that coordinated an effort to strip Beck of virtually all of his mainstream paid advertisers after Beck accused President Obama of being racist against white America is there.  Rahm Emanuel and Anita Dunn, both of whom referred to Fox News as an arm of the Republican Party are there (Emanuel “is just evil, not a Marxist” according to Beck, while Dunn is a “Maoist.”)  Robert McChesney, who co-founded Free Press, one of many public interest groups fighting for Net Neutrality is there as well.  He’s the ‘real string puller and master conspirator’ here, according to Beck and Kerpen.

At times, this theater of the absurd left Kerpen with an odd look on his face, reduced to simply looking up at Beck, who spent large amounts of two segments on the all-important issue of moving and labeling pictures of his personal enemies around like a 14 year old throwing a temper tantrum.  It’s hard to argue Americans for Prosperity represents the sane position on Net Neutrality after Kerpen’s ten minute Beck Affirmation Session.

[flv width=”640″ height=”480″]http://www.phillipdampier.com/video/Glenn Beck Ravings of Net Neutrality Part One 10-20-09.flv[/flv]

Part one of Glenn Beck’s rant on Net Neutrality with Americans for Prosperity’s Phil Kerpen on October 20th (6 Minutes)

When dealing with people not entirely there, sometimes it is safer to just humor them while you seek a graceful exit.  But Kerpen played along with Beck’s label gun, and as we’ve seen all year, co-opted the paranoia among some conservatives that Net Neutrality, the Fairness Doctrine, and President Barack Obama are all conspiring to silence Glenn, right wing talk radio, and sooner or later all dissent.

Beck opens the discussion by fundamentally misunderstanding the very definition of Net Neutrality.

“Net neutrality. This is that everybody should have free Internet, right?,” Beck asks Kerpen.

“Well, essentially. You know, they dress it up the way they dress up a lot of their things. They turn it upside-down by saying that evil corporations, phone and cable corporations are going to block what we can do block or we can say,” Kerpen responds.

In fact, Net Neutrality has nothing to do with giving away free access to the Internet.  It is about preserving the free exchange of ideas that would allow Glenn, and anyone else, to talk about whatever they want online without fear a broadband provider would interfere with their content, slow access to it, block it, or charge extra to make sure it gets through to people at reasonable speeds.

Beck tried to conflate Net Neutrality with a government plan to give away access to everyone at taxpayer expense.

“I don’t remember anybody saying in the 1930s that everybody had a right to radio and we gave away free radios for the government. And I don’t remember anybody in the ’50s everybody deserved a free television, but that’s where we’re headed now. So that neutrality – I want to get to that later on in the week,” Beck said.

Perhaps Beck will educate himself on Net Neutrality by that time.

Kerpen knows better, but he’s paid to distort the issue.  Stop the Cap! consumers encountered Americans for Prosperity in North Carolina this past summer who were duped to show up to support state measures restricting municipal broadband projects in the state.  They thought they were there to support a-la-carte cable programming options and to oppose Obama Administration “emergency powers” to control the Internet.  Upon learning the true nature of the legislation at hand, a number of them ended up on our side.  They hate big telephone and cable monopolies too.

Americans for Prosperity is largely funded by corporate interests, which makes it unsurprising they would echo their talking points.

Kerpen’s fear factory that Net Neutrality represents a way for government to demand balance on websites is laughable, but then we know better.  For a crowd that already believes in the basic construct of Glenn Beck’s world view, it’s entirely believable.  That’s a shame, because it is Net Neutrality that ultimately will protect their access to Glenn’s online content without blockades or extortionist pricing from broadband providers.

[flv width=”640″ height=”480″]http://www.phillipdampier.com/video/Glenn Beck Ravings of Net Neutrality Part Two 10-20-09.flv[/flv]

Part two of Glenn Beck’s rant on Net Neutrality with Americans for Prosperity’s Phil Kerpen on October 20th (5 Minutes)

An avalanche of iPhones is to blame for AT&T's wireless problems, according to a Slate columnist

Telecommunications companies love people like Farhad Manjoo.  He’s a technology columnist for Slate, and he’s concerned with the congestion on AT&T’s wireless network caused by Apple iPhone owners using their phones ‘too much and ruining AT&T’s service for everyone else.’  Manjoo has a solution — do away with AT&T’s flat data pricing for the iPhone and implement a $10 price increase for any customer exceeding 400 megabytes of usage per month. For those using less than 400 megabytes, he advocates for a “pay for what you use” billing model.  Will AT&T adopt true consumption billing, a usage cap, or just another $10 price increase?  History suggests the latter two are most likely.

Stop the Cap! reader Mary drew our attention to Manjoo’s piece, which predictably has been carried through the streets by cheering astroturf websites connected with the telecommunications industry who just love the prospect of consumers paying more money.  They’ve called the organizations that work to fight against such unfair Internet Overcharging schemes “neo-Marxist,” ignoring the fact the overwhelming majority of consumers oppose metered broadband service and still don’t know the words to ‘The Internationale.’

Manjoo’s description of the problem itself has problems.

His argument is based on the premise that the Apple iPhone is virtually a menace on AT&T’s network.  He blames the phone for AT&T customers having trouble getting their calls through or for slow speeds on AT&T’s data network.

Every iPhone/AT&T customer must deal with the consequences of a slowed-down wireless network. Not every customer, though, is equally responsible for the slowdown. At the moment, AT&T charges $30 a month for unlimited mobile Internet access on the iPhone. That means a customer who uses 1 MB a month pays the same amount as someone who uses 1,000 MB. I’ve got a better plan—one that superusers won’t like but that will result in better service, and perhaps lower bills, for iPhone owners: AT&T should kill the all-you-can-eat model and start charging people for how much bandwidth they use.

How would my plan work? I propose charging $10 a month for each 100 MB you upload or download on your phone, with a maximum of $40 per month. In other words, people who use 400 MB or more per month will pay $40 for their plan, or $10 more than they pay now. Everybody else will pay their current rate—or less, as little as $10 a month. To summarize: If you don’t use your iPhone very much, your current monthly rates will go down; if you use it a lot, your rates will increase. (Of course, only your usage of AT&T’s cellular network would count toward your plan; what you do on Wi-Fi wouldn’t matter.)

First, and perhaps most importantly, AT&T not only voluntarily, but enthusiastically sought an exclusive arrangement with Apple to sell the iPhone.  For the majority of Americans, using an iPhone means using AT&T as their wireless carrier.  If AT&T cannot handle the customer demand (and the enormous revenue it earns from them), perhaps it’s time to end the exclusivity arrangement and spread the iPhone experience to other wireless networks in the United States.  I have not seen any wireless provider fearing the day the iPhone will be available for them to sell to customers.  Indeed, the only fear comes from AT&T pondering what happens when their exclusivity deal ends.

Second, problems with voice calling and dropped calls go well beyond iPhone owners ‘using too much data.’  It’s caused by less robust coverage and insufficient capacity at cell tower sites.  AT&T added millions of new customers from iPhone sales, but didn’t expand their network at the required pace to serve those new customers.  A number of consumers complaining about AT&T service not only mention dropped calls, but also inadequate coverage and ‘fewer bars in more places.’  That has nothing to do with iPhone users.  Congestion can cause slow speeds on data networks, but poor reception can create the same problems.

Third, the salvation of data network congestion is not overcharging consumers for service plans.  The answer comes from investing some of the $1,000+ AT&T earns annually from the average iPhone customer back into their network.  To be sure, wireless networks will have more complicated capacity issues than wired networks do, but higher pricing models for wireless service already take this into account.

Business Week covered AT&T’s upgrade complications in an article on August 23rd:

Many of AT&T’s 60,000 cell towers need to be upgraded. That could cost billions of dollars, and AT&T has kept a lid on capital spending during the recession—though it has made spending shifts to accommodate skyrocketing iPhone traffic. Even if the funds were available now, the process could take years due to the hassle and time needed to win approval to erect new towers and to dig the ditches that hold fiber-optic lines capable of delivering data. And time is ticking. All carriers are moving to a much faster network standard called LTE that will begin being deployed in 2011. Once that transition has occurred, the telecom giant will be on a more level playing field.

And there are limits to how fast AT&T can move. While it may take only a few weeks to deploy new-fangled wireless gear in a city’s cell towers, techies could spend months tilting antennas at the proper angle to make sure every square foot is covered.

Karl Bode at Broadband Reports also points out a good deal of the iPhone’s data traffic never touches AT&T’s wireless network and he debunked a piece in The Wall Street Journal that proposed some of the same kinds of pricing and policy changes Manjoo suggests:

iPhone users are using Wi-Fi 42% of the time and the $30 price point is already a $10 bump from the first generation iPhone. The Journal also ignores the absolutely staggering profits from SMS/MMS, and the fact that AT&T posted a net income of $3.1 billion for just the first three months of the year. That’s even after the network upgrades the Journal just got done telling us make unlimited data untenable.

Sanford Bernstein’s Craig Moffett has been making the rounds lately complaining that a wireless apocalypse is afoot, telling any journalist who’ll listen that the wireless market is “collapsing” and/or “grinding to a halt.” Why? Because as new subscriber growth slows and the market saturates, incredible profits for carriers like AT&T and Verizon Wireless may soon be downgraded to only somewhat incredible. Carriers may soon have to start competing more heavily on pricing, driving stock prices down. That’s great for you, but crappy for Moffett’s clients.

You’ll note that neither the Journal nor Moffett provide a new business model to replace the $30 unlimited plan, but the intentions are pretty clear if you’ve been playing along at home. As on the terrestrial broadband front, investors see pure per-byte billing as the solution to all of their future problems, as it lets carriers charge more money for the same or less product (ask Time Warner Cable). Of course as with Mr. Moffett’s opinions on network upgrades, what’s best for Mr. Moffett quite often isn’t what’s best for consumers.

If AT&T doesn’t have the financial capacity or willingness to appropriately grow their network, inevitably customers will take their wireless business elsewhere, and perhaps Apple will see the wisdom of not giving the company exclusivity rights any longer.

Manjoo’s proposals (except the $10 rate increase, which they’ll love) would almost certainly never make it beyond the discussion stage.  A pricing model that automatically places consumers using little data into a less expensive price tier, or relies on a true consumption “pay for exactly what you use” pricing model would cannibalize AT&T’s revenue.  Past Internet Overcharging pricing has never been about saving customers money — they just charge more to designated “heavy users” for the exact same level of service.  Need more money?  Redefine what constitutes a “heavy user” or just wait a year when today’s data piggies are tomorrow’s average users.  Now they can all pay more.

The average iPhone user already pays a premium for their AT&T iPhone experience — an average $90 a month for a combined mandatory voice and data plan — costs higher than those paid by other AT&T customers.  AT&T accounted for the anticipated data usage of the iPhone in setting the pricing for monthly service.

The biggest data consumers aren’t smartphone or iPhone users. That designation belongs to laptop or netbook owners using wireless mobile networks for connectivity.  Those plans universally are usage capped at 5 gigabytes per month, far higher than the 400 megabyte cap Manjoo proposes.  If AT&T felt individual iPhone customers were the real issue, they would have already usage capped the iPhone data plan.  Instead, they just increased the price, ostensibly to invest the difference in expanding their network.

Perhaps at twice the price, everything would be nice.

Manjoo admits AT&T does not release exact usage numbers, but it’s obvious a phone equipped to run any number of add-on applications that the iPhone can will use more data than a cumbersome phone forcing customers to browse using a number keypad.  That in and of itself does not mean iPhone users are “data hogs.”  In reality, 400 megabytes of usage a month on a network also handling wireless broadband customers with a 5 gigabyte cap is a pittance.  That’s 10 times less than a customer can use on an AT&T wireless broadband-equipped netbook, and still be under their monthly allowance.

Here’s a better idea: end the monopoly AT&T has on the iPhone in the United States. That would immediately do a lot more for AT&T customers, as the so-called “data hogs” that hate AT&T flee off their network.

Manjoo’s alternatives are a “pay $10 more” solution that won’t save consumers money and “pay exactly for what you use” plan that AT&T will never accept.

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