Stop the Cap! reader Cal believes AT&T cannot be reasoned with about Internet Overcharging until you threaten to cancel.

While a significant number of customers have already pulled the plug on AT&T DSL and U-verse service over their recently-introduced Internet Overcharging schemes, some are telling Stop the Cap! they have no plans to actually disconnect service until AT&T threatens to charge them overlimit fees.

For some AT&T customers, there is no suitable alternative to the phone company.  Rural customers without a cable provider, or those who are faced with two bad choices — AT&T or Charter Communications — say they are going to test AT&T’s resolve to actually overbill them.

Cal is an AT&T customer is Missouri.  His alternative?  Charter Cable, which has an Internet Overcharging scheme of its own and delivers what he calls “third world service” in his community.  Given a choice, he intends to stay with AT&T as long as possible, pulling the plug only after his third warning of exceeding the phone company’s new broadband usage limits.  He thinks AT&T’s customer service won’t ultimately let it come to that.

“My sister works for an AT&T call center where she lives, and there was some training on the subject of handling the company’s usage caps,” Cal reports. “Get the right representative or supervisor and they can make virtually anything go away with a few keystrokes, especially if you are prepared to cancel your service over the issue.  While they may not cancel the caps, they very well may credit back any overcharges.”

Cal says his family does not intend to change their usage habits one bit.  He’ll change providers before he rations his Internet usage.

“I maintain control over our Internet access here, they don’t and sure as hell won’t,” he said.  “We do not do illegal downloads and we don’t allow torrenting or anything else that can get my kids into trouble, but we do use a Roku box and watch Netflix instead of buying pay movie channels with programming not suitable for my family to watch.”

Cal says his five children are home-schooled, which makes daily Internet access an essential part of the education process.  Many companies that provide home-schooling materials increasingly require a broadband connection.  While not as bandwidth hungry as Netflix video streaming, with five children in the home, usage adds up fast.

“It is not hard to do 260GB of usage a month, which puts us just over their U-verse limit, and I’ll be damned if I am going to pay AT&T another $10 for 10GB over,” Cal says.  “This is another reason why the Obama Administration is no better than the last one — they are all masters of big corporations who will rob us blind and use the money to pay off Congress to look the other way.”

Cal used to be a Charter Cable customer, but left when that company implemented its own Internet Overcharging scheme.

“I told Charter with their lousy service they were lucky I was a customer, but after putting usage limits on, I left,” he reports.

Cal’s neighbor thinks he has an even better way to battle AT&T.

“My neighbor will cancel service under his name and sign up under his wife’s and bounce between them whenever AT&T threatens to send him a bigger bill; he has already been doing that for years back and forth between AT&T and Charter on new customer deals,” Cal says.

Cal, and many other readers touching base with us, believe AT&T is not very responsive to customer complaints unless customers threaten to cancel service, and they believe AT&T will only change its mind when shareholders see the usage limits as counterproductive.

“AT&T can buy enough people in Washington to make street protests irrelevant, but their shareholders sure won’t like it when they see customers and revenue dropping,” Cal notes.  “If you can’t get cable, you are stuck with AT&T, so you have to keep the pressure on — file complaints with the Better Business Bureau, the FCC, and Congress.  Make them spend more money defending their policy than they earn from its proceeds.”

AT&T, one of the country’s most profligate spenders on public policy lobbying, has pulled out all the stops pushing for Washington approval of its proposed merger with T-Mobile.

Bloomberg Government reports AT&T spent $6.8 million during the first quarter of 2011, more than 11 times more than its rival Sprint, which opposes the merger deal.  In fact, AT&T was the nation’s second biggest spender in lobbying dollars, just behind defense contractor Honeywell, which is trying to avoid Pentagon spending cuts.

Sprint’s much smaller lobbying effort had to make do with a budget of just $583,000 during the same period to push back against the telecom giant.

Also raising questions are reports from Bloomberg that AT&T CEO Randall Stephenson direct dialed Federal Communications Commission Chairman Julius Genachowski the weekend before the deal went public.  At the same time, former FCC Chairman Richard Wiley, today a lobbyist for T-Mobile, spoke directly with four of the five FCC Commissioners to directly lobby for the merger’s approval.

Sprint has been trying to beef up its own lobbying star power, recently adding Eddie Fritz, former head of the National Association of Broadcasters as one of their lobbyists.  Sprint has also hired several former high-level Congressional staffers and mid-level employees at the Justice Department, expected to help Team Sprint know how to apply the right pressure to the right people inside the FCC and Justice Department to reject the deal.  The merger hinges on the approval of both agencies.

Left off the speed dial — consumers, who cannot pick up the phone and reach FCC Chairman Genachowski while lounging in his backyard or enjoy lucrative employment opportunities open to government workers in the private lobbying sector.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg ATT Lobbying 5-24-11.mp4[/flv]

Bloomberg News breaks down AT&T’s lobbying and strategy for getting its merger deal with T-Mobile approved in Washington.  (2 minutes)

America’s broadband ranking has fallen once again, mostly at the expense of other countries who have accelerated service and speed upgrades above and beyond what is available in the United States.  That is the conclusion one can reach after reviewing the Federal Communications Commission’s second annual broadband report, delivered to Congress to fulfill obligations under the Broadband Data Improvement Act.

Through a combination of data from OECD broadband rankings and actual speed test results collected by the Commission, the FCC report notes American cities are at risk of losing the broadband speed race.

“This report compares data on average actual download speeds reported by a sample of consumers in a number of U.S. and foreign cities and finds that some large European and Asian cities exhibit a significant edge over comparable U.S. cities in reported download speeds, though reported speeds for some other international cities are roughly comparable to speeds in many U.S. cities,” the report concludes.

“The best currently available data set comparing the United States to other countries appears to be from the OECD, which collects data on various broadband deployment, adoption, and usage metrics and publishes rankings of its member countries. The OECD’s deployment data ranks countries based on particular technologies, rather than overall coverage. The U.S. ranking in these surveys ranges from 27th out of 30 in DSL coverage to 1st out of 28 in cable modem coverage.  The U.S. ranks 6th out of 16 in fiber-to-the-home (FTTH) coverage and 8th out of 29 in 3G mobile wireless coverage.”

Broadband Rankings (click to enlarge)

Most of the countries accelerating far beyond the United States in broadband speed and quality are in Asia and Europe, and many are upgrading their networks to fiber-based broadband.  As these fiber networks come online, the United States can be expected to fall further behind.

The cable industry lobby attacked the report's findings.

Just like last year, the Internet Service Providers turning in poor grades are rejecting the report’s conclusions.

“While the Commission’s headline proclaims that 20 million Americans are denied access to broadband, by that measure private investment has fueled the build-out of broadband networks to nearly 300 million consumers and is responsible for the jobs that flow from that investment,” said Michael Powell, president and chief executive of the National Cable and Telecommunications Association.  Powell used to oversee the FCC as chairman during the first term of the Bush Administration.

Another trade association with ties to the telecom industry, USTelecom, attacked the findings noting most Americans think their existing broadband service is good enough.

Walter McCormick Jr., USTelecom CEO, noted the FCC’s own report found that 95 percent of Americans have access to fixed broadband and 93 percent are happy with their service.

...so did USTelecom, another industry funded group

But McCormick says nothing about the speeds those customers receive, a bone of contention with the Commission.  As part of this year’s report, the FCC is increasingly relying on its own verifiable data about broadband speeds, collected through its SamKnows broadband speed test project.  The Commission has repeatedly noted that broadband speeds marketed by ISPs do not always match the actual speeds customers receive.

Speed tests comparing broadband performance in comparably sized cities found some sizable differences.

The data suggest that mean actual download speeds in some European and Asian cities are substantially higher than in comparably sized U.S. cities (e.g., 24.8 megabits per second (Mbps) in Paris and 35.8 Mbps in Seoul versus 6.9 Mbps in San Francisco, 9.4 Mbps in Chicago, and 9.9 Mbps in Phoenix). Some of the U.S. cities in our sample have higher speeds than some foreign cities (e.g., Chicago with 9.39 Mbps versus Rome with 5.6 Mbps).

The most significant reason for the disparity in speed is the technology used in each respective area.  Fiber to the home service traditionally delivers the fastest broadband speeds.  Cable broadband technology, common in the United States but less so abroad, is responsible for a great deal of speed increases in the United States.  Telephone company DSL and wireless are responsible for some of the slowest speeds, with rural DSL service commonly providing just 1-3Mbps service.  Many European cities still relying on DSL technology have upgraded to bonded DSL, ADSL2+, or VDSL service, which can significantly boost speeds.

Unfortunately, the report concludes, the faster the broadband service delivered, the higher the price — often out of proportion with other OECD countries.

Results […] suggest that U.S. stand-alone residential broadband prices are generally “in the middle of prices in OECD countries,” after accounting for speed, terms of service, data caps, and service delivery technology. Similarly, prices in the United States for business stand-alone broadband services were fourteenth out of 30 among the OECD countries. A paper by the Berkman Center for Internet and Society at Harvard University found prices for U.S. broadband with download speeds of around 768 kbps to be “very good” by international standards. However, as download speeds increase, the paper found that U.S. prices become more expensive than most other OECD countries.

Some providers unimpressed by the independent research accused the FCC of using biased and inconsistent research methods.  AT&T, for example, was unhappy with comparisons among U.S. cities and those of comparable size abroad.  They accused the Commission of not using “a well-defined or consistent methodology for choosing the ‘communities’ or offers.”  In fact, several providers suggested the Commission’s pricing comparisons ignored significant, albeit temporary, discounts some new customers receive, as well as discounts for bundled service packages.  Promotional pricing factors are acknowledged by the Commission, but the report notes the findings do attempt to collect real world pricing paid by actual customers.

For consumers in the United States, broadband envy is as close as the next news report highlighting broadband expansion efforts abroad.  Some countries are deploying 1Gbps broadband networks that deliver consistently faster speeds than American providers, at dramatically lower prices and without a usage cap attached.

When Stop the Cap! reader Nancy learned earlier this year AT&T was pushing yet another deregulation bill in the Michigan legislature allowing the company to abandon landline service if and when it chooses, she called AT&T and her state representatives to protest.

“When I called AT&T, the representative literally told me if the company ever did decide to stop offering basic phone service in Michigan, I should just ‘get a cell phone,'” Nancy reports.  “Naturally they tried to sell me one of theirs and I replied I was not likely to be loyal to a company that was willing to abandon me and hundreds of thousands of other rural customers.”

As in Wisconsin, AT&T’s lobbying efforts follow the same basic playbook: use friendly legislators and dollar-a-holler groups financed in part by AT&T to push deregulation as “improving competition” and making the state “business friendly.”  But as Nancy learned from experiences in Wisconsin, those are empty promises when rates go up.

“These same people pushed to deregulate cable in Wisconsin so they could offer AT&T’s cable TV service, promising lower prices if we had AT&T competing against Time Warner Cable,” Nancy remembers.  “Time Warner and AT&T raised their rates for both services, instead.”

Nancy has a good memory.  So do we.  Yet again, AT&T’s chief Astroturfer is Thad Nation, this time under the name of the Midwest Consumers for Choice and Competition.  While consumers get ignored, Nation gets time to testify before the House Energy and Technology Committee.

Nation, who runs a lobbying firm, told legislators companies like AT&T should not have to invest in old copper-lines that consumers don’t care about.  He claims it prevents AT&T and other companies from investing in broadband and wireless.

The only thing missing from this group are actual consumers. Instead, their "partners" include: AT&T, groups funded by AT&T, and several chapters of the Chamber of Commerce.

In reality, legislation pushed by AT&T will allow them and other phone companies to abandon providing even basic landline service in the rural areas they no longer care about. There is no evidence (and no regulation) AT&T will invest in either broadband or improved wireless service in rural areas where the company is unlikely to quickly recoup its investment.

Our friends at the Michigan Telephone Blog pointed us to a piece in the Huron Daily Tribune, a newspaper at ground zero for rural Michigan’s potential loss of landline service should the deregulation bill pass.

Located in Michigan’s “thumb” — the northeastern part of the state separated by Saginaw Bay, Tribune reporters drilled down into the implications for the loss of traditional landline service in this largely-rural area of Michigan.

Huron County Commissioner John Bodis, who chairs the Legislative Committee, said he’s aware of the bill and foresees some issues with it, particularly in regard to the provision allowing phone companies to discontinue landline service in an area where Voice over Internet Protocol (VoIP) or cell phone service is available.

“If it’s not mandated, they’re not going to do it,” he said. “So, I’m hoping the Senate version will tweak that a little bit and hold their feet to the fire, but I don’t know.”

In its May Capitol Currents, the Michigan Township Association reported its concerns center around residents losing their land-line phone services when other options are not adequate (i.e. poor cell phone coverage because of hills, trees, etc.).

In written testimony to the House Energy and Technology Committee, Brian Groom, president of the International Brotherhood of Electrical Workers, Local 1106, stated over the past decade, the Michigan Legislature has gradually removed telecommunications providers from the oversight of the MPSC, and HB 4314 would complete that process by eliminating the last vestige of regulation — the Primary Basic Local Exchange Service.

“This service, as currently mandated in state statute, requires residential service providers to offer — at the very least — a basic calling plan to customers in their service territory,” Groom stated. “In 2005, when (M)PSC regulation of larger calling plans was eliminated, proponents argued that the public would continue to be protected by the existence of a Primary Basic Local Exchange Service requirement.”

“This means telecommunication companies providing basic local exchange or toll service will be able to discontinue or deny service to any customer who has access to ‘a comparable voice service.’ Nothing in the bill ensures that such service would be affordable, reliable or of a minimum quality,” Grooms continued. “For customers living in remote areas which are of a higher cost to serve via landlines, this legislation could result in them having to depend on higher cost and less reliable forms of telecommunication services. This bill would create a telecommunications environment where large areas of the state have no access at all to traditional landline telephone service.”

“That means people like me and my friends in places like Bad Axe, Elmwood, and Minden City — communities few people outside of Michigan would have heard of, get disconnected because they are too rural to get much attention from these companies,” Nancy says.

Frontier Communications, which provides service in some areas of the state, claims monopolies don’t exist in the phone business:

In written testimony, Bob Stewart, Frontier Communications state director of governmental affairs for Michigan and Indiana, indicated the current atmosphere is no conducive toward monopolies.

“The telecommunications industry in Michigan has moved to a highly competitive environment where monopoly powers even in rural areas do not exist,” he stated. “Unneeded and outdated regulations in the Michigan Telecommunications Act are cleaned up by HB 4314. Michigan needs to celebrate the success of the MTA by declaring victory; not over regulating simply for the sake of regulation.”

But many rural Michigan residents far from cable television and strong signal cell phone service would beg to differ.

“The further inland you head on the ‘thumb,’ the worse things get,” Nancy reports.  “Much of this is farm country and they can’t even get DSL service, and cell reception might be barely adequate outside, but walk inside and your signal is gone.”

Despite consumers like Nancy getting upset when they learn the long term implications of these bills, without a public outcry it is easy for legislators to vote with AT&T.  In the House, HB 4314 passed 102-6.  The six standouts that stood up for consumers?

Reps. Vicki Barnett (D-Farmington Hills, Jeff Irwin (D-Ann Arbor), Steven Lindberg (D-Marquette), Lesia Liss (D-Warren), Edward McBroom (R-Vulcan) and Phil Potvin (R-Cadillac).

T-Mobile has announced it is giving some of its smartphone customers unlimited free calling, when you are within range of a Wi-Fi signal.

This new feature is available on Even More and Even More Plus postpaid rate plans for customers with Wi-Fi Calling-capable phones. Wi-Fi Calling is based on the Smart Wi-Fi application that comes pre-loaded onto many of T-Mobile’s latest smartphones.  It comes from Kineto Wireless, which provides a similar app for Orange UK and Rogers Wireless customers in Canada.

When enabled, T-Mobile customers will see a blue ‘talk bubble’ icon in the status bar.  Once active and running, all voice calls made on your phone while within range of a connected Wi-Fi signal are reportedly not counted against your plan minutes.

Judging from anecdotal reports across the web, T-Mobile customers have been able to add the free calling feature to their accounts as of last Friday.  The fastest route to a quick activation is calling T-Mobile customer service.  Those subscribed to a Family Plan must activate the feature individually for each smartphone on the account.

Wi-Fi Calling is primarily pitched as providing a solid signal where none exists, a helpful feature for T-Mobile customers who find reception less than robust indoors.  Offloading wireless traffic to Wi-Fi benefits T-Mobile as well, reducing demand on its cell towers.

The technology differs from femtocells — small devices that connect with your broadband connection and deliver a 3G wireless signal in your home or office.  Because the Smart Wi-Fi app that powers Wi-Fi Calling is software-based, there is no hardware expense and little customer configuration required.  But Wi-Fi Calling is more restrictive.  A femtocell delivers a 3G signal to any nearby device registered to access it; Wi-Fi Calling only works with phones pre-equipped with the feature.

T-Mobile is also reportedly readying its own femtocell solution for low signal areas.  Their Cel-Fi Microcell is undergoing focus group testing at a price point of a $50 refundable deposit, and a monthly cost of $1.99.

T-Mobile’s website has created some confusion over their Wi-Fi Calling by delivering contradictory information to what customer service representatives are telling customers.  Customer service and an internal company memo suggest the use of the feature does not count against plan minutes, but their website says the opposite.

T-Mobile’s latest innovation begs the question: Would AT&T  — potential future owner of T-Mobile — ever offer Wi-Fi Calling to its customers for free, with no deduction of plan minutes when used?

AT&T femtocell users find the company does deduct plan minutes, unless customers pay for a $19.99/month add-on plan for an unlimited calling option.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Smart Wi-Fi.flv[/flv]

Kineto Wireless produced this video explaining how Smart Wi-Fi Calling works, and we’ve included a second video from the company explaining how to access the application from a T-Mobile smartphone.  (6 minutes)