Montana is among the bottom three states for Internet broadband performance and the state can partly blame Charter Communications for its poor service.

Net Index rates Montana so low because the state relies on slow speed DSL and cable broadband service provided by smaller players who either lack the will or resources to invest in improved service.

Among the worst providers: Charter Cable, which often suffers from capacity and connectivity problems in the state.

“Right now with Charter we are experiencing significant packet loss going out to major networks in the country,” Joshua Reynolds, president of JTech Communications in Bozeman told NBC Montana. “Its gotten so bad recently that he can’t connect to our file server and download files,” said Reynolds.

Reynolds said Charter’s slow service is now affecting his company by preventing an out-of-state employee from doing his job.

Brit Fontenot, director of economic development for the city of Bozeman is surprised Montana didn’t rank dead last. Fontenot told the television station local cable and phone providers are not investing in more reliable fiber optics to solve capacity slowdowns. The city is exploring taking matters into its own hands.

“The future is a ring, a community ring connecting around the community that allows data to be transmitted both internally and externally,” said Fontenot.

The city is now engaged in dialogue with local business leaders to get comments on the quality of local Internet service.

Charter Cable is the second worst-rated cable company in the nation, according to Consumer Reports.

Speed ratings in Montana range from serviceable to painful. The fastest average speeds are around 15Mbps and the worst are just above 3Mbps.

[flv]http://www.phillipdampier.com/video/NBC Montana State Broadband Third Worst 1-27-14.flv[/flv]

NBC Montana surveys the broadband situation in Montana and the results are not good. (1:39)

Phillip “Free Trade in Bad Broadband” Dampier

Sure we’ve had our cultural skirmishes in the past,  but on one thing we can all mostly agree: our largest cable, phone, and broadband providers generally suck.

Outside of hockey season, Canada’s national pastime is hating Bell, Rogers, Vidéotron, Telus, and Shaw. The chorus of complaints is unending on overbilling, bundling of dozens of channels almost nobody watches but everybody pays for, outrageous long-term contracts, and bloodsucking Internet overlimit fees. In fact, dissatisfaction is so pervasive, the Conservative government of Stephen Harper spent this past summer waving shiny keys of distraction promising Canadians telecom relief while hoping voters didn’t notice their tax dollars were being spent by the country’s national security apparatus to spy on Brazil for big energy companies.

The Montreal Gazette is now collecting horror stories about dreadful service, mysterious price hikes, and promised credits gone missing on behalf of readers fed up with Bell and Vidéotron.

Rogers Cable, always thoughtful and pleasant, punished a Ottawa man coping with multiple sclerosis and cancer with a $1,288 bill, quickly turned over to a collection agency after his home burned to the ground. It took headlines spread across Ontario newspapers to get the cable company to relent.

Things are no better in the United States where the American Customer Satisfaction Index rates telecom companies worse than the post office, health insurers airlines, and the bird flu. National Public Radio opened the floodgates when it asked listeners to rate their personal satisfaction with their Internet Service Provider — almost always the local cable or telephone company.

The phone company Canadians love to hate.

Many responded their Internet access is horribly slow, often goes out, and is hugely overpriced. In response, the cable industry’s hack-in-chief did little more than shrug his shoulders — knowing full well American broadband exists in a cozy monopoly or duopoly in most American cities.

Breann Neal of Hudson, Ill., told NPR she has one choice — DSL, which is much slower than advertised. Hudson is Frontier Communications country, and it is a comfortable area to serve because local cable competition from Mediacom, America’s worst cable company, is miles away from Neal’s home.

“There’s no incentive for them to make it better for us because we’re still paying them every month … and there’s no competition,” Neal says.

Samantha Laws, who gets her Internet through her cable provider, says she also only has one option.

“It goes out at least once a day, and it’s been getting worse the last few months,” Laws says. She works with a pet-sitting company that handles all of its scheduling through email and the company website. At times she can’t do her job because of the unreliable connection.

Chicago is in Comcast’s territory and the company is quite comfortable cashing your check while AT&T takes its sweet time launching U-verse in the Windy City. AT&T isn’t about to throw money at improving DSL while local residents wait for U-verse and Comcast doesn’t need to spend a lot in Chicago when the alternative is AT&T.

Where there is no disruptive new player in town to shake things up, there is little incentive to speed broadband service up. But there is plenty of room to keep increasing prices for a service that is becoming as important as a working telephone. Companies are using broadband profits to cover increasing losses from pay television service, investing in stock buybacks, paying dividends to shareholders, or just putting the money in a bank, often offshore.

NPR’s All Things Considered:

“[For] at least 77 percent of the country, your only choice for a high-capacity, high-speed Internet connection is your local cable monopoly,” says Susan Crawford, a visiting professor at Harvard Law School. She is also the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

Crawford says that today’s high-speed Internet infrastructure is equivalent to when the railroad lines were controlled by a very few moguls who divided up the country between themselves and gouged everybody on prices.

She says the U.S. has fallen behind other countries in providing broadband. At best, Crawford says, the U.S. is at the middle of the pack and is far below many countries when it comes to fiber optic penetration. Given that the Internet was developed in the U.S., she says the gap is a result of failures in policy.

“These major infrastructure businesses aren’t like other market businesses,” Crawford says. “It is very expensive to install them in the first place, and then they build up enormous barriers of entry around them. It really doesn’t make sense to try to compete with a player like Comcast or Time Warner Cable.”

So Crawford is calling for is a major public works projects to install fiber optic infrastructure — a public grid that private companies could then use to deliver Internet service.

Powell

That’s an idea met with hand-wringing and concern-trolling Revolving Door Olympian Michael Powell, who made his way from former chairman of the Federal Communications Commission during the first term of George W. Bush’s administration straight into the arms of Big Cable as president of their national trade association, the NCTA.

Powell, well compensated in his new role representing the cable industry, wants Americans to consider wireless 3G and 4G broadband (with usage caps as low as a few hundred megabytes per month) equivalent competitors to the local cable and phone company.

“I think to exclude [wireless] as a substitutable, competitive alternative is an error that leads you to believe the market is substantially more concentrated that it actually is,” Powell says.

Of course, Powell’s new career includes a paycheck large enough to afford the wireless data bills that would shock the rest of us. All that money also apparently blinds him to the reality the two largest wireless providers in America are AT&T and Verizon — the same two companies that are part of the duopoly in wired broadband. It’s even worse in Canada, where Rogers, Bell, and Telus dominate wired and wireless broadband.

Although America isn’t even close to having the fastest broadband speeds, Powell wants you to know the speeds you do get are good enough.

“I think taking a snapshot and declaring us as somehow dangerously falling behind is just not substantiated by the data,” he says. He says it is like taking a snapshot of speed skaters, where there might be a few seconds separating the leaders, but no one is “meaningfully out of the race.”

That is why we still celebrate and honor Svetlana Radkevich from Belarus who competed in the speed skating competition at the Vancouver 2010 Winter Olympics. She made it to the finish line and ranked 33rd. Ironically, South Korea ranked fastest overall that year, taking home three gold and two silver medals. In Powell’s world, that’s a distinction without much difference. You don’t need South Korean speed and gold medals when Belarus is enough. That argument always plays well in the United States, where Americans can choose between Amtrak or an airline for a long distance trip. Who needs a non-stop flight when a leisurely train ride will get you there… eventually.

There are a handful of providers uncomfortable with the mediocre broadband slow lane. Google is among them. So are community broadband providers installing fiber broadband and delivering gigabit Internet speeds. EPB in Chattanooga is among them, and it has already made a difference for that city’s digital economy neither AT&T or Comcast could deliver.

Unsurprisingly, Powell thinks community broadband is a really bad idea because private companies are already delivering broadband service — while laughing all the way to the bank.

If a community really wants gold medal broadband, Powell says, they should be able to have it. But Powell conveniently forgets to mention NCTA’s largest members, including Comcast and Time Warner Cable, spend millions lobbying federal and state governments to make publicly owned broadband illegal. After all, cable companies know what is best.

All Things Considered recently asked its fans on Facebook, “How satisfied are you with your Internet service provider?” Many responded that they didn’t like their Internet service, that it often goes out and that their connection was often “painfully slow.” Listen to the full report first aired Jan. 11, 2014. (11:30)
You must remain on this page to hear the clip, or you can download the clip and listen later.

HissyFitWatch

A senior executive at Frontier Communications stormed out of a public meeting in Charleston Wednesday after being questioned about Frontier’s DSL broadband speeds that critics claim are below state standards.

Dana Waldo, senior vice president and general manager of Frontier’s West Virginia operations, got up and left the meeting after Citynet CEO Jim Martin began questioning Waldo about Frontier meeting the minimum broadband speed requirements mandated by the state legislature. It was not the first time the two have sparred.

Martin has been a frequent critic of the way the state has spent broadband stimulus funding. Much of it, Martin alleges, paid for the construction of a Frontier-owned and controlled statewide fiber network that will benefit the company more than the state and its residents.

Frontier and the State of West Virginia received more than $126 million of taxpayer money to subsidize the fiber network and the expansion of broadband service into rural areas of the state. Frontier agreed to offer a minimum of 4/1Mbps service to each home connected through the subsidy program.

Martin alleges Frontier has failed to offer consistent access to at least 1Mbps upstream speed, a charge Waldo vehemently denied.

“That is not correct, Jim,” Waldo said. “I wasn’t going to bring this up, but I am absolutely beside myself. I feel so sorry for you, that you are so desperate to make you and Citynet relevant and, apparently, keep it afloat. You make all these characterizations about us and everybody else.”

Waldo also accused Martin of making “misleading and defaming” comments about “my company and myself.”

Waldo

“My God,” Waldo added, “every allegation you make and everything you said, [federal officials] dispute, and you still bring up these allegations. I’m tired talking to you about this stuff. I’m tired of the misrepresentations you make. Jim, it’s over. I’m done talking to you. I’m done wasting my time responding to your mischaracterizations. I’m not going to sit here and waste my time and hear more of his nonsense. I’ll excuse myself.”

Martin said nothing in response as Waldo picked up his papers and left the Broadband Deployment Council meeting room.

Martin later told The Charleston Gazette he was just asking a question and repeated his assertion Frontier’s rural DSL service does not offer rural West Virginians at least 1Mbps upload speeds across the state. Martin added Waldo’s defense relied on news articles and documents now three years out of date.

“Both an independent consultant hired by the Governor’s Office, and the legislative auditor have confirmed what I said was true,” Martin said.

AT&T this month signed up their 10 millionth customer to U-verse High Speed Internet service, surpassing Verizon FiOS as the nation’s biggest telephone company supplier of broadband, television, and telephone service. Coinciding with that success, AT&T is raising prices for U-verse, despite AT&T’s record earnings from the fiber to the neighborhood service, now accounting for $1 billion a month in revenue.

AT&T is protecting its broadband flank by convincing current DSL customers to switch to higher-speed U-verse broadband as the network upgrade reaches into more homes across AT&T’s service areas. In the last quarter U-verse picked up 655,000 new broadband customers nationwide, many upgraded from traditional DSL. Where AT&T has not invested in U-verse upgrades and cable competition exists, results are not as good. AT&T lost 26,000 DSL customers last quarter, most moving to cable broadband.

“This latest milestone shows how U-verse is helping transform AT&T into a premier IP broadband company,” said Lori Lee, senior executive vice president, AT&T Home Solutions. As of the third quarter of this year, total U-verse high-speed Internet subscribers represented about 60 percent of all wireline broadband subscribers, compared with 43 percent in the year-earlier quarter.

Verizon FiOS, in comparison, has signed up just 5.9 million customers FiOS Internet subscribers on its stalled fiber optic network. Most Verizon broadband customers with no FiOS in their future either stick with DSL service or, increasingly, switch to a cable competitor for faster speeds.

Some of AT&T’s strongest U-verse growth came from its TV package. At least 265,000 cable and satellite cord-cutters looking for a better deal switched to U-verse TV in the last three months, a gain from 198,000 at the same time last year. That’s the second-best quarterly gain ever. A total of 5.3 million AT&T customers subscribe to U-verse TV.

Much of the growth has come from AT&T’s investment in expanding U-verse to new areas. Project Velocity IP is a three-year, $14 billion plan to upgrade AT&T’s wireless and wired broadband networks. AT&T has added almost 2.5 million more homes to its broadband footprint so far this year and hopes to expand broadband availability to reach about 57 million customers by the end of 2015.

Although $14 billion is a significant investment, AT&T has spent considerably more on its shareholders. John Stephens, AT&T’s chief financial officer told Wall Street analysts AT&T has bought back 684 million shares of stock that will save the company more than $1.2 billion in future dividend payouts.  Combined with its dividend payout, AT&T has handed shareholders $18 billion so far this year and more than $40 billion since the beginning of 2012. AT&T expects to spend $20 billion on wireless and wireline network improvements in 2014.

AT&T’s speed upgrades have also not run as smoothly as AT&T claims. Efforts to increase speeds to 45Mbps in 79 markets has had mixed results with a significant number of customers complaining they cannot get qualified for the faster speeds because of infrastructure problems with AT&T’s network. The company still says it is on track to offer 75 and 100Mbps speed tiers in the future and is building a fiber to the home network in Austin to compete with Google.

Many customers who have been with AT&T for more than a year are learning better service does not come for free. AT&T has filed rate increases for its television service beginning Jan. 26, 2014 for customers not on a pricing promotion. The monthly price for the following U-verse TV service plans will increase $3, along with fee hikes for local stations and equipment, bringing AT&T at least $15 million in extra revenue each month:

• U-family to $62;
• U200 to $77;
• U200 Latino to $87;
• U300 to $92;
• U300 Latino to $102;
• U450 to $124;
• and U450 Latino to $134.
• Grandfathered plans also will increase $3: U100 to $64 or $69, depending on when first ordered; and U400 to $119.

• The monthly price of each non-DVR TV receiver will increase from $7 to $;
• Beginning on February 1, 2014, the Broadcast TV Surcharge will increase $1 to $2.99 per month to recover a portion of the amount local broadcasters charge AT&T to carry their channels.

Those customers who have a U-verse TV pricing promotion will continue to receive the promotional benefit until the applicable promotion ends or expires.  Customers are being notified of these changes via bill messaging occurring in November and December and a reminder in January and February 2014.  In addition, customers will be notified of these changes online at www.att.net/uversepricechange and att.com/uversesupport.

[flv]http://www.phillipdampier.com/video/ATT U-verse with GigaPower — Reactions 11-13.mp4[/flv]

AT&T is trying to get ahead of Google by advertising AT&T U-verse with GigaPower, a 1,000Mbps fiber to the home service promised in Austin sometime in the future. (0:30)

Verizon’s Home Phone Connect base station

Despite assertions that Verizon created Voice Link as a solution for customers suffering from chronic landline problems, in reality the wireless landline replacement is nearly identical to Verizon Wireless’ Home Phone Connect and was produced only because of a complicated business relationship the wireless carrier had with its part owner Vodafone.

A Verizon spokesman told Stop the Cap! in June Voice Link was created for use where Verizon’s copper customers had chronic repairs issues:

Verizon will maintain the copper network where it makes customer service and business sense to do so.  Please keep in mind that the vast majority of our copper customers have no issues at all with their service; we are only considering the universe of customers where the copper network is not supporting their requirements.  Again, the exception is the storm-impacted areas in the western portion of Fire Island and a few New Jersey Barrier communities where copper facilities were damaged beyond repair.  In these locations Voice Link will be the single voice option available to customers. Verizon will offer these customers the opportunity to use our state-of-the-art, tried and tested wireless network at the same rate (or better) that they pay today.

Business sense appears to have played a great deal in Verizon’s strange decision to produce and market two nearly identical products. Hired by Verizon, William E. Taylor, a special consultant with National Economic Research Associates, Inc., testified last week that both Voice Link and Home Phone Connect are intended to compete in the landline replacement marketplace:

Home wireless services are a rapidly growing alternative to wireline plain old telephone service for many customers throughout New York State. In competition with Verizon’s Voice Link service, AT&T offers a Wireless Home Phone and Internet service with unlimited nationwide voice service at $20 per month with broadband internet service at higher prices, wherever its 4G LTE network is available. Sprint offers a competing wireless home service at $20 per month, as does U.S. Cellular. Wal-Mart sells its comparable Straight Talk prepaid wireless home voice service for $15 a month together with additional optional prepaid broadband internet access service. These offerings are similar to Verizon Wireless Home Phone Connect service, and differ in some features from Verizon New York’s Voice Link service but compete directly with both services.

Thus, one immediate and real competitive effect of the public release of Verizon’s wireline and Voice Link cost data would be to enable these four competitors (and others) to assess Verizon’s price floor for wireline voice service as an element in pricing their wireless home network services and calculating the profitability of expanding their wireless networks to provide wireless home phone service on Fire Island and elsewhere.

Verizon Voice Link

Taylor’s provided his declaration as part of Verizon’s case not to reveal certain documents (for competitive reasons) to the public about Voice Link deployment in New York and New Jersey. Verizon has offered Voice Link either as an option or, originally, as a sole landline replacement in areas considered uneconomical for landline restoration. But Taylor’s testimony also suggests Voice Link wasn’t necessarily created to solve chronic landline problems or replace landlines in natural disaster areas. In fact, Taylor testified Voice Link is just one of several competitors in the landline replacement market, including one from Verizon Wireless. In 2011, Verizon Wireless began national marketing of Home Phone Connect, a home wireless landline replacement product marketed to cord-cutters.

Verizon Communications chief financial officer Fran Shammo explained why Verizon Voice Link and Verizon Wireless Home Phone Connect both exist during remarks at the Wells Fargo Technology, Media & Telecom Conference on Nov. 12. Shammo blamed a complicated business relationship between Verizon, Verizon Wireless, and Vodafone which owned 45% of Verizon’s wireless venture for the near-twin services. The result was an informal “wall” between two Verizon entities, one devoted to landline and FiOS service, the other wireless — both selling essentially the same wireless product.

“The easiest way I can explain this is if you look at our product called Home Phone Connect, which was developed on the wireless side of the house,” Shammo said. “This is the product that you plug into your wall at home, converting the copper wire inside your home to an LTE network for voice. So in essence it is a copper voice replacement product. Now you would think that we would be able to take that same product and market it on the wireline side of the house. But we were prohibited because of governance and affiliate transactions. So the wireline business went out and developed their own product called Voice Link, which now they sell to their copper and DSL customers.”

Shammo admitted creating both Home Phone Connect and Voice Link was “a pretty inefficient way to develop product.”

So when this governance affiliate transaction-wall is taken away, you then can become a much more efficient company to launch one product to your customer, whether it is a wireline product or a wireless product,” he added. Shammo also believes tearing down that wall and tightly integrating Verizon’s wireline and wireless businesses will create “the soft synergies of the new Verizon that we believe we can create here.”

That might be bad news for Verizon’s rural landline customers, because Verizon’s current CEO is no fan of maintaining rural copper landline service when Verizon Wireless can do the job for less money and the open the door to higher profits.

“In […] areas that are more rural and more sparsely populated, we have got [a wireless 4G] LTE built that will handle all of those services and so we are going to cut the copper off there,” said Verizon CEO Lowell McAdam in June of last year. “We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there and then I can focus the investment on that to improve the performance of it. The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view.”

The wall that divided Verizon and Verizon Wireless may eventually be rebuilt between rural landline customers transitioned to wireless service as the only available landline replacement technology and urban and suburban customers offered Verizon’s fiber-to-the-home service FiOS.