Helping to spur additional competition, AT&T announced the availability of its U-verse service in parts of Corpus Christi, Texas and the communities of Springfield, Champaign, Danville and Decatur, all in central Illinois.

“Today’s launch of AT&T U-Verse reflects our commitment to make the investments necessary to bring consumers across central Illinois a new era of true video competition,” AT&T Illinois president Paul La Schiazza said in a statement.

In Illinois, dissatisfied Comcast customers were tearing up one of the local newspaper’s message boards.  Here’s a sampling:

• Now maybe Comcast will get better service and lower their OUTRAGEOUS prices.
• Comcast: Can you hear the sound of competition and angry customers? Can’t wait to get a cable carrier that actually plays all of the available Cardinals’ games.
• Will they have it in Chatham? I will be ready to sign up to get rid of Comcast! What parts of Springfield will get U-Verse, and what parts will be left out in Comcast’s cold?
• I can’t wait to get rid of Commiecast.

Troy Wolverton had a problem.  He wanted to send 170 pictures to Kodak to arrange to have them printed in time for Father’s Day.  It turned out to be a true labor of love, as he waited hours to send the 800 megabytes of imagery to Kodak’s online processor.

Troy Wolverton writes tech news for the Mercury News in California

As more than three hours passed, Wolverton began to ponder why the upload seemed some poky.  He subscribes to Earthlink, which supplied him with a 3Mbps connection.  Assuming that speed was available for both uploading and downloading, it would have taken less than an hour to get the job done.  But as virtually every customer of an Internet service provider finds, your download speed is many times faster than your upload speed.  In this case, Wolverton was suffering with a 384kbps upload speed to get those photos to Kodak.

In fact, while download speeds have been increasing at a steady clip, many have discovered upload speeds have barely budged, if at all, since broadband service became available in their area, often more than a decade ago.  Rochester, New York is one such example.  Time Warner Cable’s Road Runner service was introduced officially in 1998 with a download speed of around 5Mbps, but the upload was just 384kbps.  Today, standard Road Runner service provides 10Mbps for downloads, but the upload speed has remain unchanged, despite more than a decade having passed.

Networks were originally designed to provide more speed for downloading, and less for uploading, based on the presumption subscribers would take more than they “gave” to the Internet.  That remains essentially true today, but subscribers are increasingly relying on their upload connection to send pictures, movie clips, and other larger files to their friends, family, or work.

But broadband companies seem oblivious to this trend. If you look at the plans offered by the Bay Area’s two main providers, Comcast and AT&T, it’s all but impossible to find one in which the upload speed comes anywhere close to the download speed. To get an upload speed that’s faster than a slow download rate, you have to subscribe to one of the pricier plans, like Comcast’s Extreme 50, which gives you a 10 megabit per second upload connect — at a cost of $100 a month.

Comcast and AT&T officials say they are watching consumer Internet usage trends. They note that as their companies have ramped up download speeds, they’ve tended to increase upload speeds as well and will continue to do so. The download and upload speeds they offer are simply a response to market demand, they say, claiming that the vast majority of their customers still download far more data than they upload.

“We’re designing our products based on how we see consumers using them,” John Britton, an AT&T spokesman, told me.

Wolverton thinks the lack of competition also has a lot to do with it.

In terms of Internet access providers, the Bay Area essentially has a duopoly. There are numerous small players such as EarthLink, but Comcast and AT&T dominate — and duopolies tend to not have a good read on real market demand. People often buy one of their products because they don’t have any other choices — not because they meet their needs.

In other words, if the market were more competitive, a company might be able to build a successful business by catering to people who want faster upload speeds.

Just because consumers use their connections to download more data than they upload isn’t proof that they don’t want to upload more. The slow speeds could well discourage folks from doing more uploading. And they may well find a use for faster upload speeds — if they had them.

I’d love to be able to back up the videos, songs and documents on my computer to a server on the Internet. But with my slow upload connection, that’s not really an option because it would take days of uninterrupted uploading to back up any significant portion of my hard drive.

AT&T Rate Increases Coming

AT&T is jacking up phone rates for residents of Alabama, one year after state officials deregulated the Alabama telephone service marketplace based on the premise that competition would bring about lower rates for consumers, not higher.

Darrell Baker, director of the Alabama Public Service Commission’s telecommunications division, said telephone companies heavily promoted the price deregulation plan by claiming competition would keep rates down.  An industry-friendly deregulation bill was passed in 2005 over PSC objections, and another bill the Alabama Legislature passed this spring expanded deregulation further.

Alabama residents will now pay for that free-market construct in a state with limited local line competition.

AT&T spokesman Hood Harris said customers with Basic Service, a single-line home phone, will see their bill rise 3 percent, from $16.95 per month to $17.45.  Approximately 15 percent of AT&T’s Alabama customers have basic service.

Customers with AT&T’s deluxe plan, the Residence Complete Choice Package, will see an increase of 9.5 percent, from $21 per month to $23.

Harris blamed the increases on inflationary costs.

Baker was unimpressed with the rate increase announcement.  “It doesn’t sound like the competitive market is having much impact,” he said.  Baker expects other telephone companies in the state to quickly follow suit.

AT&T increased rates in 2008 by 4.1%.

No Myth: AT&T Huge Wireless Data Bills

In between the wall-to-wall coverage of the passing of Michael Jackson last week, Stop the Cap! reader Lou discovered Twitter was all-a-tweet about yet another person who got stuck with an enormous mobile data bill from AT&T Mobility.  This time it was Mythbusters’ Adam Savage, who spent five days in Montreal and discovered the most expensive part of the trip was the $11,000 bill from AT&T.

The story here isn’t really about AT&T’s math, or the remarkably expensive Canadian data roaming rate of $0.015 per kilobyte, it’s the fact AT&T will let your bill run into the ionosphere before alerting you, or giving you the option to automatically shut yourself off before you go over a plan limit.

Savage’s tweet to his 50,000 followers all but guaranteed a rapid response (and credit) from AT&T for the $11,000 in fees charged to his account (and they turned his phone back on.)  Unfortunately, company policies remain unchanged, leaving those who encounter similar kinds of overlimit fees who don’t have tens of thousands of followers on Twitter, stuck paying those bills or begging for credit.

AT&T should automatically notify any customer entering into a roaming area with a text message explaining the rates and fees charged when inside that roaming area.  Customers should have the right to choose a setting for their account that best meets their needs:

1. No roaming access/No overlimit fees: This would suspend service on your phone automatically until you contacted AT&T to remove it at your request;
2. No Overcharges: This would turn your service off when your plan limit is reached, requiring the customer to opt-in to any overlimit fees;
3. Free and Open: The current standard — roaming and overlimit rates apply automatically.

AT&T claims it will send a text message and/or contact customers who substantially exceed their normal usage, but there has been scant evidence that policy is applied uniformly.  Customers should have the right to make their own choices about their wireless usage, and the responsibility to select an option that best protects them from the heart attack in the mail, a/k/a the bill.

[Updated 1:00pm ET: Stop the Cap! reader Michael Chaney found a video interview done last fall with some Australian providers falling all over themselves to praise themselves for Internet Overcharging schemes, and suggest American providers learn from them how to get away with trying the same thing.]

The group managing director of Telstra (Australia), Justin Milne, wants you to know that the era of free love is over.  They are sick and tired of letting content producers like Ninemsn (a partnership between Australia’s Nine Network ((think ABC or CBS)) and Microsoft’s MSN) use their pipes for free to send those video clips to their customers.  It’s time to break out the checkbooks and start paying them for freeloading on their network.

In a commentary for ZDNet Australia, Milne equates Net Neutrality with greed and “economic self-interest dressed up as moral virtue.”  Pot to kettle, especially when he quotes Franklin Roosevelt:

Franklin Roosevelt said during the Great Depression that heedless self-interest reflected not only bad morals but bad economics too.  Seventy years on, his advice still rings true.

Yes it does, and Telstra is a perfect example of that in practice, offering dreadful broadband service with paltry limits on usage and heavy throttles on speed when one exceeds them, all for a substantial price.  Telstra’s own self-interest leaves a lot of Australians despising the provider and begging for alternatives.  The morality of a company that now wants content providers, with whom it has no business relationship, to pay them money to reach their customers, can be left to the reader’s determination.

This is a tune we’ve heard before.  AT&T’s former CEO Edward Whitacre was the guy who first lit the flame to the gas line of abusive provider tactics using generally the same language:

How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?  (11/07/05)

Justin Milne

After Whitacre was educated that providers already pay hosting fees, infrastructure and licensing costs, and provide the very stuff that drives consumers to sign up for AT&T’s broadband services (and pay them for it) in the first place, Whitacre did a full reversal three months later:

“Any provider that blocks access to content is inviting customers to find another provider. And that’s just bad business.” (3/21/06)

Milne follows in Whitacre’s earlier footsteps, except he wants to be paid by everyone.  His customers are already subjected to limits on usage, which have limited Australia’s multimedia online experience years behind most others, and now he wants to have the money he earns from Internet Overcharging -and- the right to limit content that reaches his customers to only those who pay Telstra for the right to deliver it:

“Some content providers such as ninemsn argue that Telstra should subsidise the cost of the ninemsn customers visiting their internet sites. We might also assume [they] would prefer petrol to be free for their cars, and Hayman Island would like air travel to the resort free,” Milne wrote.

“But Shell, Qantas and Woolworths do not give their services away for free. Just like BigPond and the rest of Australia’s ISPs, they need to charge their customers a fee so that over time their investment is recouped,” he said.

Of course, Shell, Qantas and Woolworths only charge once for their products and services.  They don’t install a toll booth on a road and claim that because a full petrol tank weighs more than a near-empty tank, there needs to be a surcharge toll.  Qantas doesn’t send people down the aisle on a flight with a collection plate demanding more money for your ticket because the plane was packed.  All of Australia’s ISPs charge their customers for providing broadband connectivity.  Telstra does as well.  The difference is that Telstra wants to charge its customers a fee and also charge the websites you choose to visit a “transport fee” on top of that.  Your bill as a customer doesn’t go down because of “cost sharing.”  Telstra’s profits simply go up.

Milne’s problem with Net Neutrality is its core principle that all legal data traveling across the net must be treated equally.  That means Telstra has no way to enforce their HissyFit.  In the absence of Net Neutrality, they can block, limit, or throttle those that refuse to pay them.

The cost of the infrastructure to support this traffic has been borne almost entirely by internet service providers, and not by the publishers. In Telstra’s case alone, the company has invested billions of dollars in the Next G mobile broadband network covering 99 per cent of Australian consumers, the HFC cable network in major cities and the extensive ADSL network.

Unfortunately there is no magic pudding, so this investment must be repaid by the beneficiaries of the internet — the users on the one hand, and the publishers who seek to make money from those users through advertising and subscriptions.

Milne almost suggests they did this out of the goodness of their heart, and their investment was not going to be paid back.  The fundamental reality is that subscribers to those services are Telstra’s customers and they pay for that service, such as it is.  That is where that investment will be recouped.  Demanding a company that has no business relationship with your company to pay up or else face the potential of being cut off is akin to extortion.

I offered Milne two alternative suggestions:

• Expand your network to create infrastructure suitable to meet the needs of your subscribers, who will sign on in greater numbers to your service.
• Create hosting platforms and services at attractive prices to content providers who will use your service to host their content (and pay you for actually doing something for them).

Barring that, this is nothing but a HissyFit from another provider looking for a payday.

Michael Chaney, one of our readers, discovered this video interview compilation done last fall by ZDNet.  Enjoy the Internet Overcharging excuse making, where the customer becomes the enemy, and the creativity to find new ways to charge more in without bounds.

“The attempt is being made certainly in the UK but also in the US to push that cost onto the content owner by saying, you pay, and we’ll prioritise your traffic,” he said. “[And] if you don’t pay, your traffic will be really crap.”

[flv width=”480″ height=”360″]http://www.phillipdampier.com/video/ZDNet Australia Providers 2008.flv[/flv]