[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WTKR Norfolk ATT to raise prices on smartphone users 1-19-12.mp4[/flv]

A Virginia television station is warning customers planning to switch their wireless service to AT&T to think twice.  The company recently announced it was increasing prices on data plans for new customers, although existing ones can keep their current plans.  Virginians considering leaving Sprint, Verizon Wireless, or T-Mobile will find themselves locked into the new, higher prices if they move to AT&T, WTKR in Norfolk reports.  The “grandfathered” service plan, exempted from price hikes and service restrictions, is increasingly becoming a customer retention tool.  (1 minute)

Plenty of taxpayer-backed money for this... (Time Warner Cable Arena - Charlotte, N.C.)

Which is more important:

1. Spending hundreds of millions of taxpayer dollars to finance sports facilities, stadiums, and “incentive packages” to attract and keep major sports franchises calling your city home;
2. Building quality digital infrastructure that will deliver 21st century broadband service at affordable prices for every local citizen that wants the service.

Here in western New York, the city of Buffalo — the third poorest city in the nation with 28 percent of its residents living in poverty and suffering chronically high unemployment — is about to the recipient of a one billion dollar bailout courtesy of the state government (a/k/a taxpayers).  That, even as some in the city are howling that the promised tens-to-hundreds of millions in promised renovation funding for the Ralph Wilson (Buffalo Bills) Stadium is apparently not included.

While hundreds of millions of taxpayer dollars are readily available to finance sports stadiums, getting privately financed bonds for public broadband is somehow the real crime in states like North and South Carolina.  North Carolina already has legislation in place that virtually assures broadband service is under the control of the state’s largest phone and cable companies, or it simply is not provided at all. Evidently in a battle over worthwhile public spending, financing a reported $260 million for Charlotte, N.C.’s Time Warner Cable Arena remains a higher priority than making sure the people of North Carolina have decent broadband service.

South Carolina this week is considering extending a similar courtesy to companies like AT&T and Time Warner Cable.  They need better broadband even more than their neighbors to the north.

Happily, broadband advocate Craig Settles has found a way for broadband lovers to have their cake and eat it too.

...but none for this?

Why not construct public, non-profit broadband networks by selling ownership shares to the general public?

All of you who believe in broadband’s impact on economic development (or are a little jealous of stories like this about Chattanooga’s 1 gigabit network), should look to the Green Bay Packers of the NFL for the key to financing your broadband network.

Yeah, they kind of choked in last Sunday’s playoff game against the N.Y. Giants. But the team is a surefire winner when it comes to raising money. The franchise raised $70 million to rehab its football stadium (Lambeau Field) by selling 280,000 stock shares to individuals at $250 a pop. They pulled off this amazing feat in just five weeks!

With apologies to New Orleans Saints fans — “Who Dat” is bringing big bucks into town for a project that will pump up the local economy? The citizens of Green Bay. Literally. The Green Bay Packers are a nonprofit corporation owned by local residents and businesses. Packers pride enabled Green Bay to outdo tech companies that can’t get an initial public offering off the ground, let alone raise $70 million.

If Green Bay can do all this for a football field, can’t your hometown or county convince constituents to raise just a few million for a broadband network?

$250?  That’s the combined price of today’s cable and cell phone service over just a single month.  Should a private non-profit group act as coordinator for the project, they can walk right past existing restrictions on municipal broadband enacted at the behest of big cable and phone companies.  Self-financed fiber to the home service could pay dividends… to customers instead of Wall Street.

Settles lays out the parameters and the challenges, namely fighting that old meme that only giant telecom duopolies know how to run a broadband business.  But as we’ve seen from small scrappy private providers like Sonic.net in California and publicly-owned EPB Fiber, providing superior service at a reasonable price will bring customers to your door.  Even more so if they also happen to own the door.

Broadband everywhere, except where it isn't.

Comcast is willing to install cable service for a neighborhood in Ashburnham, if six families agree to split the estimated $94,000 installation fee.

Paying more than $10,000 each just to get cable television from the nation’s largest cable operator is not a top priority for those living on Old Pierce Road and Rindge State Road, but getting reliable Internet access is.  Comcast officials have refused all requests to extend cable service to the families, because there are simply too few of them in the company’s eyes to justify the expense.

Families were surprised to find neither Comcast or Verizon interested in serving the neighborhood, because state broadband maps show coverage in Ashburnham from both the dominant cable and phone company.  Comcast suggested the families sign up for satellite Internet service or use a wireless provider instead.  But families complain paying Verizon Wireless or AT&T for mobile broadband is expensive and has resulted in rationed Internet use because of very low data caps.  Even worse, when the weather turns bad, the wireless Internet service effectively turns off.

The affected families want better answers.

“I’m not afraid to spend $400 to get out of a [wireless] contract if I can have Internet when it’s cloudy out,” James LeBlanc of Rindge State Road told the Sentinel & Enterprise. “But I don’t have $10,000 just sitting in my pocket.”

Wireless broadband for rural Massachusetts is simply not a serious solution for most because of the low usage allowances that accompany the service.

“It’s difficult when it’s raining out, and we can’t get online, and I have to tell my kids, sorry, you can’t do your homework tonight,” his wife, Wendy LeBlanc told the newspaper. “My oldest goes to Overlook (Middle School) and I’m going to have to send in notes for any assignments that require Internet research to be done at school.”

“It’s a hardship for our family,” said Brian Belliveau, of Old Pierce Road. “We don’t have enough Internet service. We get into situations where we use all of our data within the first two weeks of the month and have to go without it the rest of the month. Our kids are in school with kids who have service all the time, and they don’t understand why we don’t. It’s hard to explain.”

Comcast’s attitude so far has been ‘tough luck — it’s a money thing.’  Company officials simply won’t front the construction and installation costs because it would take too long to recoup that investment.  That leaves the families with few alternatives.

Although Ashburnham, a community of 6,000 in north-central Massachusetts, is considered “rural,” it is not nearly rural enough to qualify for federal broadband funding.  Besides, according to broadband mapping data supplied by area cable and phone companies, Ashburnham is already “well-served” with broadband.  But don’t tell that to families without Internet access.

Local officials were stunned the multi-billion dollar company wouldn’t assume upfront expenses in return for goodwill and devoted, long-term paying customers.

“I may be sort of old-fashioned, but a company sometimes has to do what is in the best interest of its customers to gain their loyalty,” Selectman Gregory Fagan said. “I’m offended when you say the company can’t afford it. Our schools are giving our children Internet assignments. There’s been discussion of giving tablets to all kindergartners. It’s not like in the ’80s when these things were a luxury. They are must-haves now.”

AT&T has announced an across-the-board rate increase for smartphone and tablet data plans, raising prices $5 Sunday for most plans while including incrementally larger usage allowances:

• Lite Usage: 200MB for $15 is now 300MB for $20;
• Average Usage: 2GB for $25 is now 3GB for $30;
• Higher Usage: 4GB for $45 is now 5GB for $50.
• Regular Tablet Plan:  2GB for $25 is now 3GB for $30.
• A new, higher use tablet plan will offer 5GB for $50.
• Overlimit fees are now $20 for 300MB of additional usage on the lite usage plan, $10/GB on all other plans.

AT&T originally charged $29.99 for unlimited-use data plans.  The company claimed in the summer of 2010 its new limited-use plans would save most customers money, but except for very light users, that is no longer true.

AT&T's throttles are engaged.

AT&T says the new usage allowances reflect customer resistance to paying overlimit fees when they exceed AT&T’s existing caps.  But the company has also previously said the vast majority of its customers never exceed the old allowances. According to AT&T, 65 percent of its customers use less than 200MB per month and 98 percent of its smartphone customers use less than 2GB of data per month. That effectively means every customer will now face a $5 rate hike for increased usage allowances most will not currently use.

Existing customers can hang on to their old data plans indefinitely, but those who bounce between carriers will be forced to choose from a more limited, and expensive, menu of options.

Considering that AT&T’s most significant rival Verizon Wireless currently charges $30 for just 2GB per month, AT&T officials are still able to claim their new prices represent a “great value.”

Customers grandfathered under AT&T’s old unlimited-use plans are also discovering they are anything but unlimited.  So-called “heavy users” who exceed 2GB of use per month are first warned by AT&T they are in the “top 5%” of usage-hungry users, after which their wireless connection is throttled to as little as 15kbps for the remainder of the billing cycle.

Years ago, phone companies could not simply raise rates willy-nilly.  They had to justify rate increases before an oversight body, usually on the state level.  But after spending millions to lobby state lawmakers to deregulate the phone business, AT&T is set to recoup their investment with a dramatic 25 percent rate increase for landline phone service in the state of California.

Some residential customers have kept basic landline service as a last resort, switching to “measured service,” where customers pay a small charge for every call they make or receive a calling allowance that covers several calls a day.  Measured service can deliver substantial savings over traditional flat rate service.  But now AT&T is targeting these “budget customers” for some stunning rate hikes.

Starting March 1st, AT&T is raising rates by nearly 25% for measured service — from $12.37 to $15.37 a month — a $3 increase.  After your calling allowance is exhausted, each additional local call will cost three cents per minute.

Customers with flat rate service will also pay AT&T $1.05 more — $21 a month (before taxes, fees, and surcharges) for basic flat rate, unlimited local calling.

Best of all (for AT&T), the company does not have to explain or justify the rate increase.  That attitude was evident when reading the Los Angeles Times‘ account of the rate hike, complete with an arrogant, shoulder-shrugging AT&T spokesman:

Lane Kasselman, an AT&T spokesman, said fees for measured and flat-rate calling plans are going up because, well, because.

“Goods and services go up,” he told me. “That’s how our economy works.”

The increase is expected to hit seniors and low income consumers the hardest — they are the biggest constituency of the 10 percent of AT&T customers who choose measured-rate, budget service.  They are also the least likely to have cut the cord on their traditional landline service in favor of a cell phone or competing Voice Over IP provider.

AT&T hints that the rate increase is partly to push customers into multi-service bundles that include phone, Internet, and television service.  By hiking the price of individual services, the bundled price suddenly seems to deliver the best “savings” for customers.

Critics call that price pumping — artificially raising the price of a-la-carte services to create phantom savings for the company’s higher-revenue bundled service packages.

A San Francisco advocacy group calls it something else.

“It’s extortion, pure and simple,” said Regina Costa, telecom research director for the Utility Reform Network, or TURN, a consumer group. “There’s no proof that these price increases are justified.”

Thanks to California’s deregulation of the landline phone business, no proof is required.