AT&T suddenly announced it was ready to build its own gigabit fiber network in Austin.

AT&T and Time Warner Cable report they are ready to make more investments in their operations in Austin, Tex. to compete with Google Fiber when it arrives in the middle of next year.

Time Warner Cable says it already operates a multi-gigabit fiber optic network — one residential customers cannot easily access or afford. Residential broadband speeds at the cable operator top out at 50/5Mbps in Austin, at a cost higher than what Google plans to charge for 1,000/1,000Mbps service. AT&T’s U-verse network maxes out at 24/3Mbps, assuming customers have good copper wiring between AT&T’s fiber in the neighborhood and their home.

“The cable and phone company providers have purposely confused their networks’ maximum speed capacity with real end-user speeds for years, and when that fails to convince they simply claim customers don’t need or want those speeds anyway,” says Stop the Cap! reader and Austin resident Sam Knoll.

Knoll is enthusiastic about giving Time Warner Cable the boot, partly to pay them back for their aborted consumption billing trial attempted in Austin in 2009.

“I am not completely convinced Time Warner Cable understands just how much damage they did to their reputation when they pulled that stunt, and I’m certain they will attempt it again if they have a chance,” Knoll said. “The best thing customers can do is switch to a provider that believes usage caps and consumption billing are the fraudulent ripoff we know them to be. Google already knows this.”

Some Time Warner Cable customers in Austin never forgot the company tried to meter Internet usage in a failed experiment back in 2009. (Image: The Austinst)

Competition from deep-pocketed Google could eventually transform the broadband business model for American providers, assuming Google builds its fiber network in enough cities to challenge the conventional wisdom that prices have plenty of room to grow with faster Internet access. The more customers that sign up for Google’s already-super-fast broadband, the more providers will have to compete with better and faster service.

But AT&T is not convinced. The company announced yesterday it was prepared to build a gigabit fiber network not just in Austin, but also in surrounding Williamson County, with plenty of caveats.

“[We will only build the network if] the demand is there and if we get the same terms and conditions as Google received,” said AT&T spokeswoman Tracy King.

AT&T told the Austin American-Statesman the company wanted a faster regulatory approval process and permission to only build its faster fiber network in neighborhoods where there is proven demand for the service. Current franchise agreements often compel providers to offer service throughout the community and prohibits “cherry-picking” customers in high-income or low construction cost areas.

An AT&T official told KEYE-TV he had no idea how much AT&T would charge for gigabit broadband. Google charges $70 a month in Kansas City.

Austin has promised cooperation with Google, although it is not extending tax breaks or grants to the search engine giant. Google will get easy access to Austin Energy’s municipally owned infrastructure including utility poles and rights-of-way.

Google is speculated to be building showcase fiber networks to embarrass incumbent cable and phone providers who typically sell standard broadband service with speeds of 6-15Mbps in most larger communities. Rural areas are lucky to have 3Mbps service, and often much less.

But if Google intended to force major upgrades by cable and phone companies across the country, it might be disappointed with the response so far from AT&T and Time Warner Cable. Both companies indicate they will invest in and upgrade their networks to compete, but only in the service areas where Google-style competition exists. For the rest of the country, phone and cable companies are prepared to continue with the current “broadband scarcity” business model that delivers upgrades only occasionally, often accompanied by usage limits, consumption billing, and/or higher prices.

“Google has proved that there is a business model for selling abundant bandwidth as opposed to a business model for allocating scarce bandwidth,” said Blair Levin, a former chief of staff of the Federal Communications Commission.

“They are saying this is not an experiment. It is a business,” Levin told the newspaper. “In Kansas City, Google did the country an enormous favor. They said, give us regulatory flexibility to design the business and give us access to city property so we can build a network to lower the cost.”

[flv width=”640″ height=”380”]http://www.phillipdampier.com/video/KEYE Austin Competitor Chimes In After Google Announcement 4-9-13.flv[/flv]

KEYE in Austin talks with AT&T about their plans for a gigabit broadband network to compete with Google Fiber. The AT&T spokesman seemed more interested in pitching the company’s deregulation agenda and was short on specifics.  (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KXAN Austin What competition will Google Fiber face 4-9-13.mp4[/flv]

KXAN in Austin talked with Google competitors Time Warner Cable and AT&T about how they will respond to the Google Fiber challenge.   (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KVUE Austin Fiber Wars in Austin 4-9-13.mp4[/flv]

KVUE in Austin called Google’s entry into the city the opening salvo of ‘Fiber Wars,’ as AT&T promises its own gigabit network. Austin residents intend to take advantage of the competition to force providers to give them better deals to keep their business.  (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KXAN Austin Google Fiber Possibilities Google Insider 4-9-13.mp4[/flv]

KXAN explains the possibilities of gigabit fiber, but also asks a former Google insider why the search engine is getting into the broadband business.  (5 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KTBC Austin Time Warner Cable Responds to Google 4-9-13.mp4[/flv]

KTBC was skeptical of AT&T’s sudden interest in gigabit broadband. “Gee, what a coincidence,” commented the anchor of Austin’s Fox affiliate.  (2 minutes)

On the heels of today’s announcement from Google that it intends to make Austin, Tex. the next home for Google Fiber, AT&T issued a press release claiming it was suddenly interested in building a gigabit fiber network in Austin too.

Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second.  AT&T’s expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives. This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures.

Currently, AT&T’s U-verse system in Austin — a fiber to the neighborhood system — cannot exceed 25Mbps as it is now configured. GigaOm’s Stacy Higginbotham reports AT&T told her it would build its own fiber to the premises system in Austin to support faster speeds.

But AT&T’s announcement does not come without plenty of wiggle room which could make today’s announcement little more than a publicity stunt:

1. AT&T claims it will build “infrastructure” capable of delivering “up to” 1Gbps. This could mean a network that supports a maximum of 1Gbps of shared Internet traffic, not 1Gbps to each home or business;
2. AT&T does not say it intends this network for residential customers, nor did it suggest a monthly price for gigabit service. Its Project VIP expansion describes planned broadband speed upgrades for residential U-verse customers of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, not 1Gbps;
3. AT&T’s Project VIP already specifies fiber network build outs, but they are destined for cell towers, large business complexes, and multi-dwelling units that will share a fiber connection;
4. AT&T wants the same terms and conditions Google has received, including investment incentives. But AT&T could have applied for those incentives, and potentially could have already received them, if it specified plans for a gigabit network of its own. Instead, AT&T executives have always believed residential customers do not want or need gigabit broadband speeds. In fact, AT&T still doesn’t believe fiber to the home service makes economic sense, which is why it invested in a cheaper fiber to the neighborhood system that still relies on old copper wiring. AT&T also warns that, “Our potential capital investment will depend on the extent we can reach satisfactory agreements” with local officials on those incentives;
5. Wiring a city of Austin will cost tens of millions to reach every resident with service. Such an expense might be considered materially relevant to shareholders, requiring disclosure. Building a much lesser network, like a gigabit middle mile network or only offering fiber service to institutional or commercial customers would cost far less and could escape reporting requirements.

AT&T also did not miss an opportunity to promote its deregulatory agenda, which has so far not proved to be of much help to broadband speed enthusiasts stuck with DSL or U-verse.

“Most encouraging is the recognition by government officials that policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment, can be a meaningful catalyst to additional investment in advanced networks which drives employment and economic growth,” said Randall Stephenson, AT&T chairman and CEO.

AT&T’s agenda might result in a meaningful catalyst of a different kind — the end of rural landline telephone and broadband service.

Frontier’s headquarters in Rochester, N.Y.

Frontier Communications is boasting it spent $123.6 million in New York to upgrade broadband speeds, now available up to 25Mbps through bonded ADSL2+ or VDSL technologies.

Frontier’s New York customers are now offered traditional 1-6Mbps DSL, Broadband Ultra (up to 12Mbps) and Broadband Ultimate (up to 25Mbps).

Kevin Smith, senior vice president and general manager of Frontier’s New York division said 155 of Frontier’s 194 switching offices now have faster speeds available, as do 214 remote DSLAM switches. In all, Frontier now reaches 403,000 New York households with faster Internet service.

The company also spent a considerable sum in the Rochester and Chenango areas to upgrade its backbone network with interoffice 10G Ethernet Ring Protection Switching topology. Rochester remains an important center for Frontier, as its largest metropolitan market. IT software upgrades in Rochester will also help improve the national help desk and network operations.

Frontier also plans a major broadband expansion in Hamilton County with broadband grant funds that will improve the company’s backbone between Eagle Bay and Gloversville. That will introduce 25Mbps service to more than half of the households in the immediate area.

Frontier claims it intends to further expand broadband to 85 percent of its service areas nationwide, including those it acquired from Verizon Communications.

Windstream Communications is under investigation by the Governor’s Office of Consumer Protection because of allegations the company is advertising broadband speeds and performance the company simply cannot deliver its customers in Georgia.

A Windstream employee in a company retail office in Dawsonville told an undercover CBS Atlanta photographer that the company can offer Internet speeds up to 24Mbps. He guaranteed service no slower than 6 to 12Mbps. But Mark Creekmore, who lives in Dawsonville, reports his speeds sometimes barely reach 1Mbps during the afternoons.

Duane Hartness, a Windstream customer, says Windstream has oversubscribed their service by continuing to sell broadband on a network that is overcrowded as-is, which slows speeds for every customer.

“Every customer they add to their oversubscribed DSLAM increases their revenue while further degrading your bandwidth,” Hartness said. “Lacking competition, they can ignore any and all complaints.”

Creekmore wants every Windstream customer in Georgia that is dissatisfied with their broadband service to file complaints with the state agency.

“The more complaints, the more likely the Office of Consumer Protection is to take action,” Creekmore said. “Please make sure to include that you are not getting what you are paying for and any other personal detail that would help them understand what you have gone through. If you have had multiple communications with Windstream, please include those details as well. In short, the more detail the better.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WGCL Atlanta Windstream Exposed for Not Providing Speeds Promised 3-7-13.mp4[/flv]

WGCL — CBS Atlanta reports there are new developments in Georgia regarding Windstream: It is under investigation by the governor’s office for misleading subscribers with broadband speeds the company cannot actually deliver.  (3 minutes)

The FCC finds Windstream is the worst of the worst among DSL providers, only giving customers advertised speeds 81 percent of the time. AT&T, Georgia’s largest phone company, doesn’t do much better.

Windstream is the worst-performing DSL provider in the country according to the Federal Communications Commission, with just 81 percent of customers getting the broadband speeds marketed.

After complaints about the company helped derail H.B. 282 — a bill Windstream heavily lobbied for that would have eliminated possible competition from community-owned providers — Windstream representatives quickly began promising upgrades.

“We’re asking our customers to be patient with us because we’re on it. We understand that they have issues and we’re working to upgrade their network,” Bettye Willis, a regional vice president at Windstream, told the CBS station in Atlanta.

Willis added Windstream was committed to solving its Internet speed problems, but not for everyone.

The company released this map showing planned service upgrades for “two-thirds of the communities it serves” in Georgia. But the company warned not everyone would receive improved service. For the remaining one-third, “take it or leave it” broadband service will continue.

Stop the Cap! has developed a sample e-mail message Georgia residents can use to petition the state legislature to vote NO on H.B. 282, the latest Big Telecom corporate welfare bill to kill competition from publicly-owned broadband networks. With thanks to Mark Creekmore, one of many rural Georgians suffering with DSL “service” from Windstream Communications, we have jointly created this letter to illustrate the folly of this bad bill. We may need to send this to members of the state Senate as well.

We realize many of you are served by AT&T, Comcast, or other rural providers, so this letter should be tailored to include the horror stories that you have experienced with your own provider. Make sure you change the relevant sections, including references to your local town’s provider (things that should be changed in your letter are highlighted in blue below) before sending your e-mail to House members today:

Dear Rep. -or- Sen.  [insert name]

I am writing to tell you that I do not support H.B. 282 — the Broadband Municipalities Act, and neither should you.

This proposed legislation is a solution in search of a problem. No community I know of gets interested in entering the broadband business on a whim. But when you live in a rural area served by a single provider that delivers poor service, as I do, it becomes understandable why some communities seek a public broadband solution as a last resort.

At its core, this is a bill designed to protect the broadband status quo at the cost of Georgia’s economic development and its citizens’ need for quality broadband service.

[Share several sentences here detailing the problems you have with your provider.]

Georgia has a long way to go to meet the broadband speeds available in cities like Chattanooga, Tenn. That city’s municipal power company offers 1,000Mbps service to residents that cannot buy those speeds from any other provider. That has attracted companies in this state to move to get the kind of service they just cannot get from our providers. Comcast and AT&T are hardly going out of business in Chattanooga and actually claim to welcome the competition. But things are much worse here in rural Georgia, where just getting 12Mbps service is a real challenge. That is because the local phone company has oversold its network and is too crowded, slowing speeds to a crawl. I’d welcome competition even more, but there just isn’t any.

Consider this: While Dawsonville suffers with Windstream’s oversubscribed DSL service as our only practical option, Thomasville residents can get 22Mbps of service over a fiber to the home network owned by the local community. Rose.net is hardly a financial failure either. It has been so successful, the city eliminated the local property tax. If you pass H.B. 282, Dawsonville will never have a chance, because no other provider is interested in serving us and the local community will never be able to because Windstream arguably already does.

If you believe H.B. 282 will stimulate rural broadband investment, you need to read Windstream CEO Jeff Gardner’s own statements during a February 2013 conference call to investors. He noted Windstream plans to cut capital expenses and investments this year and even more the next, including those made right here in Georgia. Gardner noted that Windstream’s rural customers are largely captive with no competitive alternatives, making extra investment unnecessary. That means we have to live with the service we are lucky enough to get at the high prices we are forced to pay. In effect, we are told to live with what we have or go without. This is an embarrassment to our state which boasts of its high-tech communications capability and is home to several major data centers.

The bill’s logic is also lacking. Private telecom companies enjoy the benefits of state taxpayer dollars in several ways, ranging from access to public rights of way to receiving federal stimulus dollars to incentivize rural broadband expansion. To date, Windstream’s only help for Georgia seems to be wiring 250 homes in Blue Ridge. If local communities decide they need a better broadband solution, allowing out-of-state corporations like Windstream to tie their hands and dictate terms is an outrage. We have been here before in the last century when giant electric utilities refused to provide adequate service in rural Georgia, so those communities managed it themselves with municipal utilities.

It is clear to me, despite a few inadequate revisions to the bill since its introduction, H.B. 282 is a disaster for Georgia’s telecommunications future. It is little more than protectionism for incumbent providers who will continue to treat rural Georgians like second class citizens, delivering service that falls far below what was advertised, yet costing the same as big city folks pay. If my community decides it is essential for our future to do better than what Windstream is willing to offer, making the town work through an expensive qualification process analyzing census blocks is nothing more than a deterrent to keep them from even trying.

With all the problems we face in Georgia today, spending time protecting Windstream from competition is not on my list and it certainly should not be on yours.

I respectfully ask you reject H.B. 282 in full, regardless of current or future revisions. The next time a telecommunications company comes by your office to lobby you on bills like this, let them know the best way they can protect themselves from municipal broadband is to deliver the good service Georgians deserve at a fair price. If they manage that, there would be no demand to build these alternative networks in the first place.

I look forward to hearing your views on this critical matter to me.

Respectfully,

// signature