Sen. Linda Runbeck, a dues-paying member of ALEC, a corporate funded pressure group that advocates for legislation advantageous to ALEC's corporate sponsors.

Rural Minnesota is facing a full frontal assault on community broadband, courtesy of a state representative so proud of her involvement in a corporate front group, she’s actually a dues-paying member.

State Sen. Linda Runbeck (R-Circle Pines) introduced HF 2695, a bill to prohibit publicly-owned broadband systems:

A bill for an act relating to telecommunications; prohibiting publicly owned broadband systems; proposing coding for new law in Minnesota Statutes, chapter 237.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. [237.201] PUBLICLY OWNED BROADBAND SYSTEM; PROHIBITION.

(a) Notwithstanding section 475.58, subdivision 1, other state law, county ordinance, or any authority granted in a home rule charter, a city or a county may not use tax revenues raised within its jurisdiction or issue debt to construct, acquire, own, or operate, in whole or in part, a system to deliver broadband service.

(b) Notwithstanding sections 123A.21, 123B.61 to 123B.63, 125B.26, and 475.58, subdivision 1, no school district or service cooperative may use state revenues, tax revenues raised within its jurisdiction, or issue debt to construct, acquire, own, or operate, in whole or in part, a system to deliver broadband service.

(c) For the purposes of this section, “broadband service” means a service that allows subscribers to access information from the Internet by means of a physical, terrestrial, non-mobile, or fixed wireless technology.

(d) This section applies to a system to deliver broadband service whose construction begins after the effective date of this section, but does not apply to:

1. the city of Minneapolis, St. Paul, or Duluth; or
2. the maintenance or repair of a system delivering broadband service whose initial construction began before the effective date of this section, provided that the geographical area in which the system delivers broadband service is not expanded as a result of the maintenance or repair.

EFFECTIVE DATE. This section is effective the day following final enactment.

The public broadband option delivers the most bang for the buck, which is why some providers want to see it banned.

Runbeck is a dues-paying member of the American Legislative Exchange Council (ALEC), a secretive corporate front group that lobbies lawmakers to introduce business-friendly legislation, often on the state level.  Runbeck told the Minnesota Independent via email that she paid $100 for a two-year membership in the organization, and says she’s never used ALEC’s “model legislation,” bills that are sometimes written by corporate members of the group and that pop up in state capitols across the country.

But Runbeck’s sudden interest in banning community broadband coincides with similar efforts in states like Georgia and South Carolina backed by big cable and phone companies.  Runbeck’s bill would directly target rural Minnesota, where broadband is the least robust, while exempting Minneapolis, St. Paul, and Duluth (and incumbent phone and cable companies) from the bill’s provisions.  Runbeck’s bill also constrains existing public broadband services from expanding, an important matter for providers still rolling out service to additional neighborhoods in their communities.

Community broadband is already hampered in Minnesota by laws that make such projects difficult to approve and build.  When projects do break ground, incumbent providers do everything possible to throw up roadblocks to delay or abort the progress being made.  In Monticello, TDS Telecom filed nuisance suits against that city’s public broadband network before finally deciding to upgrade service themselves.  Mediacom and Charter, two major Minnesota cable operators, have objected to public broadband projects that don’t even serve communities they’ve wired.

When the networks are in operation, providers like Charter work to undercut them by selling service at prices so low, they’re predatory.  But when competitors are driven out, prices rise… quickly.

 Runbeck’s $100 membership in ALEC is paying dividends, if you are a big incumbent cable or phone company. Consumers will pay much more than that if broadband competition is curtailed.

Netflix continues to step up its attacks on providers who implement Internet Overcharging schemes on their wired broadband customers.

That concern is understandable as Netflix increasingly transitions to broadband streaming instead of mailing DVD’s to customers.

Getting in the way are five of the nation’s seven largest broadband providers, all imposing limits on customers just as they discover they might be able to do without cable television.

Netflix’s streamed HD shows now consume around 2GB per hour, according to Netflix general counsel David Hyman.  That can eat through usage allowances quickly.  Hyman penned an op-ed in the Wall Street Journal last year blasting the practices of usage caps and consumption billing.

Hyman

“Wireline bandwidth is an almost unlimited resource due to advances in Internet architecture,” Hyman wrote. “The marginal cost of providing an extra gigabyte of data—enough to deliver one episode of 30 Rock from Netflix—is less than one cent, and falling.”

That doesn’t seem to matter much to Comcast, CenturyLink, Charter Communications, and Cox.  All four providers have introduced hard usage limits on customers — a usage cap.  Exceeding it gives any of those providers the right to cut off your broadband service.  AT&T, always one to see a financial angle, charges for excess use of their DSL and U-verse service — $10 for every 50GB. Time Warner Cable recently announced its own experimental “optional” usage pricing package for very light users who consume fewer than 5GB per month.  It will slap overlimit fees on those participating customers who break through the 5GB ceiling at a rate of $1/GB, an enormous markup.

Providers with strict caps usually argue they come as a result of their own network’s capacity problems.  Cable operators who do not consistently manage their network traffic can experience traffic clogs by overselling service without upgrading capacity to sustain user demand.  But providers like Comcast, Cox, and Charter resolved those capacity problems with upgrades to DOCSIS 3 technology, which offer operators an exponentially bigger pipeline for Internet traffic.

Although Comcast promised to regularly review and adjust usage caps since implementing them four years ago, the nation’s largest cable operator has thus far seen no need to raise them.

“We feel that that is an extraordinarily large amount of data,” says Comcast’s Charlie Davis. “That limit is there to make sure we provide a great online experience for every single paying customer.”

Wall Street bankers have closely monitored the industry’s early results from Internet Overcharging, and have been encouraged, so long as operators implement it carefully.

Credit Suisse in a 2011 report to its investor clients suggested the key for successful usage-based pricing is to introduce it slowly and keep “sticker shock to a minimum in the early days” to reduce backlash by consumers and lawmakers.

Once established, the sky is the limit.

Netflix itself is also battling an Internet Overcharging scheme it faces — double-dipping by cable operators like Comcast.  In addition to the fees Comcast collects from customers for its broadband service, the cable operator also wants to be paid directly by Netflix to allow the movie service’s traffic on its network.

That’s an Internet toll booth, charges Netflix and consumer groups.  It’s also uncompetitive, says Hyman.

This month Comcast unveiled its own movie and TV show streaming service — Xfinity Streampix — from which, unsurprisingly, the cable company has not sought extra traffic payments from itself.

Opposed to Internet Overcharging

Three providers which don’t cap customers don’t see a reason to try.

Verizon Communications says its fiber network FiOS has plenty of capacity and has no plans to restrict customers’ enjoyment of the service.  In 2009, Cablevision’s Jim Blackley told one panel discussion usage caps are not in the cards.

“We don’t want customers to think about byte caps so that’s not on our horizon,” Blackley said. “We literally don’t want consumers to think about how they’re consuming high-speed services. It’s a pretty powerful drug and we want people to use more and more of it.”

California’s Sonic.net Inc., goes even further.  Its CEO, Dane Jasper, believes the Federal Communications Commission needs to be more assertive about protecting America’s broadband revolution and the customers that depend on the service.

The fact different operators can take radically different positions on the subject, despite running similar networks, suggests technical necessity is not the reason providers are implementing usage restrictions and extra fees on customers.

As Hyman writes:

Bandwidth caps with fees piled on top are a lousy way to manage traffic. All of the costs of supplying residential broadband are for supporting peak usage. Bandwidth consumed off-peak is completely free. If Internet service providers really wanted to manage traffic efficiently, they would limit speeds at peak times. If their goal is instead to increase revenues or lessen competition, getting consumers to pay per gigabyte is an excellent strategy.

Consumer access to unlimited bandwidth is good for society. It fosters innovation, drives commerce, and advances political and social discourse. Given that bandwidth is cheap and plentiful and will only grow more so with time, there is no good reason for bandwidth caps and fees to take root.

Consumers and regulators need to take heed of what is happening and avoid winding up like the proverbial frog in a pot of boiling water. It’s time to jump before it’s too late.

Time Warner Cable has begun a review of operations at its latest completed acquisition, Insight Communications, as it begins to transition customers away from the Insight brand towards Time Warner Cable.

Insight’s customers in Kentucky, Ohio, and Indiana won’t see changes immediately.  Time Warner says it will be “business as usual” as the company begins to manage its newest service areas.  Time Warner Cable spokesperson Mary Jo Green said the company plans no immediate channel or price changes, but some Insight subscribers are worried about the long term fate of the NFL Network, which has been a part of Insight’s cable lineup but has not been carried by any Time Warner Cable systems.

Time Warner says its engineering staff will be examining the current state of Insight’s infrastructure — a key factor in determining what services already familiar to Time Warner customers can be extended to Insight customers.  Most of them involve the cable television operation.  Features like “Look Back” and “Start Over” have not been available on Insight’s cable systems.  Insight broadband offers tiers of 10, 20, 30, and 50Mbps — same as Time Warner.  The phone service is similar as well.

Kentucky will become one of Time Warner’s largest service areas as the company absorbs Insight.  Time Warner and Insight traditionally operated as neighbors in different parts of the state. Insight served most of the city of Henderson while Time Warner Cable covered most of Henderson’s suburbs.

Time Warner Cable’s acquisition of Insight adds more than 760,000 customers, including 550,000 broadband, 670,000 cable, and 290,000 phone subscribers across three states.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WTVQ Time Warner Cable Takes Over Insight Communications 2-29-12.mp4[/flv]

WTVQ in Louisville tells Kentucky Insight subscribers to get ready for the Time Warner Cable logo.  Time Warner completed its acquisition of Insight Communications last week.  (1 minute)

Every Arab citizen should have access to broadband by the year 2015.  That is the declaration of Dr. Hessa al-Jaber, secretary general of Qatar’s Supreme Council of Information Technology (ictQATAR), who described broadband as an absolute “citizen right” at the opening of the Connect Arab Summit 2012.

“Our target by 2015 should be that no one is denied access to any form of digital communication, and everyone is part of the connected web regionally and globally,” al-Jaber said, noting the target was consistent with her belief broadband should be considered “the simplest form of digital communications we will accept for our times.”

The Middle East is one of the fastest growing regions for broadband development as Arab governments increasingly deploy technology in an effort to grow the economy in the region.  While many oil-producing states have invested the earnings from high oil prices in technological infrastructure, most governments believe the Middle East cannot be economically sustained through the sale of fossil fuels alone.  Economic diversification is a key to sustained growth, and al-Jaber explained broadband is an absolutely essential component in those efforts.

al-Jaber

“If we want to grow our economies at a pace exceeding 7% year-on-year and over sustained periods so that income and output double every decade, create 75 million jobs by 2020, and create societies that can achieve the level progressiveness that our century demands, then we must be equipped with the digital technologies that will support our march into this prosperous future,” al-Jaber said.

Research obtained by ictQATAR found that just a 10% improvement in digitization can trigger a 0.6% gain in GDP and nearly a 1% decline in unemployment.  Broadband can also deliver a marked increase in innovation.

al-Jaber also noted many Arab region countries have made substantial progress in broadband development, some threatening to exceed the broadband rankings of countries in North America and Europe.

But the Internet can also remain a threat to countries in the region that maintain strict control on information and see the Internet as a potential threat.

“We find it disheartening that other Arab nations are severely falling behind in terms of network readiness, even in relation to their economic standing,” al-Jaber said, sidestepping the politically sensitive issue.

Other attendees noted broadband expansion in the region is outpacing that in more developed countries, and could deliver a “game-changer” for the Arab world to leap ahead of countries like the United States and Canada.

Jeffrey Sachs, director of the Earth Institute and a member of the Broadband Commission for Digital Development told the Gulf Times developing countries could leverage broadband as “a chance for convergence of progress, and for poor countries to leap ahead” of more developed societies and economies.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ITU Interview Nagwa El-Shenawy Egypt 3-12.flv[/flv]

Egypt, one of the focal points of the “Arab Spring” movement, is set to transform itself in part through embracing broadband as a democratization tool and resource for the country’s citizens. Nagwa El-Shenawy, Information Center Director of Egypt’s Ministry of Communications is interviewed about broadband development in Egypt.  She cited a need to expand broadband service into more parts of Egypt and keep the price affordable for all citizens.  Capacity building is key to building robust infrastructure across the Arab Region.  (6 minutes)

Subjects covered include: capacity building and the state of ICT’s within the Arab Region. The new internet Portal announced at the Connect Arab Summit 2012.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/BBC News Google Fiber Can ultra-fast internet change a city 2-27-12.flv[/flv]

The BBC explores how Google’s gigabit broadband project will change Kansas City economically, socially, and culturally.  (3 minutes)