Usage caps low enough to set your hair on fire.

Bell customers across Ontario and Quebec are noticing the limbo dance is back in vogue as Bell Canada lowers the bar on usage caps for its Fibe fiber to the neighborhood service and boosts the maximum overlimit fee to $80.

Late last week, Bell’s website published the new, lower usage caps for broadband customers:

• Fibe 10 — 75GB 60GB (per month) (Quebec)
• Fibe 12 — 50GB 40GB
• Fibe 16 — 75GB 65GB (Ontario) 90GB 80GB (Quebec)
• Fibe 25 — 125GB 100GB (Ontario) 100GB 90GB (Quebec)

Users who exceed the new usage allowances face an overlimit fee of $1/GB — maximum $80 a month (up $20 effective Jan. 1, 2012).

New customers enjoy aggressively discounted introductory offers, but with usage allowances in decline, customers are being conditioned to use less or pay more.  It is the classic one-two punch of Internet Overcharging:

1. Gradually reduce usage allowances exposing customers to overlimit fees;
2. Increase the maximum penalty rate for exceeding the limit.

“I am watching my bill to see if they attempt to impose the new limits on existing customers,” shares Stop the Cap! reader François who lives in Toronto. “You pay Bell more for less and even as a new customer you might first pay less and also get less.  The ‘pay more’ comes after the first year.”

Want to use more?  You will have to buy Bell’s Usage Insurance in advance:

• $5/month for an extra 40GB
• $10/month for an extra 80GB
• $15/month for an extra 120GB

This co-op provides 25Mbps broadband in rural Minnesota.

Parts of rural Minnesota are teaching the nation a lesson or two about how to deliver rural broadband — form a community co-op and provide it yourself, or wait forever for a commercial provider to deem it sufficiently profitable to deliver a reasonable level of service.

Minnesota’s Broadband Task Force indirectly proved the case for community Internet access with their first official report on the state of broadband in the North Star State.

While the populous Twin Cities are well-provided-for by large cable and phone companies, most of rural Minnesota gets far slower (and spottier) access to telephone company DSL, which is increasingly uncompetitive and inadequate for the 21st century knowledge economy.  Commercial providers have repeatedly told rural Minnesota their 1-3Mbps DSL service is plenty fast enough, at least for those who can purchase the service.  City slickers enjoy speeds of 10Mbps or more in Minneapolis and St. Paul.  But as many more rural residents and small businesses will tell you, DSL just cannot get the job done at current speeds, especially for higher bandwidth applications.

Not all of Minnesota is stuck with second-class Internet access.  Two sections of the state where residents were unwilling to accept the broadband status quo now have speeds that rival anything on offer in Minneapolis or St. Paul, because they decided to provide the service themselves.

Farmers Mutual in Madison, Federated Telephone in Morris, and Paul Bunyan Communications in Bemidji have been running fiber optic cables up and down area streets and delivering next generation broadband to some very happy customers.  All are cooperatives — community-owned providers that put their customers (who also happen to be the owners) ahead of Wall Street shareholder profits.  The result: modern and reliable service, instead of “good enough for you” Internet access at sky-high prices from for-profit phone companies.

Farmers Mutual provides service at speeds up to 20/20Mbps, with faster service forthcoming in the future.  They also believe in an open Internet, free from provider interference.  Just outside of their service area, DSL (where available) often runs at speeds of 1Mbps or less.

Federated Telephone offers a unique Ethernet-based broadband service at 20/20Mbps speeds that advertises unlimited usage — a selling point when larger phone companies like AT&T now place limits on Internet access.  Outside of their service area, many rural Minnesotans are stuck using satellite Internet service or dial-up.

Paul Bunyan Communications goes one step further with a network that already delivers 25Mbps broadband in communities like Bemidji and Grand Rapids (Minn.)  Those speeds are simply unavailable from commercial providers in northern Minnesota.

Minnesota’s broadband story is retold across America.  Urban communities have fast speed, but high prices.  Rural communities have inferior DSL at high prices or nothing at all.  Only about 57 percent of Minnesota households now meet the statewide speed goal of 10/6Mbps service.  Cable operators have no problems achieving 10Mbps download speeds, but 6Mbps upload speeds are very uncommon.  Phone companies cannot reliably achieve either with traditional ADSL service.

The state’s broadband goals are aggressive:

By 2015, the state of Minnesota will:

• a. Be in the top five states of the United States for broadband speed universally accessible to residents and businesses; and,
• b. Be in the top five states for broadband access (availability); and,
• c. Be in the top 15 when compared to countries globally for broadband penetration (adoption).

Community owned co-ops are the most likely to help the state achieve their broadband goals. The state is currently ranked 24th in broadband speed.

Ebenezer Scrooge could successfully serve as the CEO of any large telecommunications company these days, and the New York Times knows a Christmas tale of woe when it sees one.  That is why the venerable newspaper printed a Christmas Eve editorial blasting Verizon’s new “non-aggression treaty” with America’s largest cable companies that puts coal in the stocking for any Verizon customer waiting for FiOS fiber-to-the-home service.  The newspaper believes the days of FiOS are numbered:

Verizon — Verizon Wireless’s main shareholder — relieved itself of the need to expand FiOS, its high-speed, fiber optic network, beyond the 18 million homes it set out to reach six years ago, a rollout that cost $23 billion. For the other 114 million homes in the country, it can simply bundle its wireless service with the cable and wireline broadband services of its partners. The agreement between Verizon and the cable carriers includes a joint venture to develop technology to integrate the wireline and wireless platforms.

Verizon’s cable deals squashed hopes that cable carriers’ purchases of wireless spectrum would lead to more competition against the dominant players, AT&T and Verizon Wireless. And it puts in doubt whether FiOS will ever be a serious competitor to cable, reducing the likelihood that video transmitted over broadband could break up cable’s regional oligopolies.

[…] Verizon’s deals suggest a future in which cable carriers will get uncontested control of high-speed broadband into the home while AT&T and Verizon will get uncontested control over wireless. For consumers with expensive wireless plans, pricey bundles of cable channels and costly, slow broadband, this does not look like good news.

Verizon’s economic future lies in the lucrative world of wireless.  Its FiOS network was an expensive gamble to reinvent its antiquated telephone network to drive customers to keep their landlines and spent a hundred dollars more on video entertainment and super fast broadband.  Wall Street hated the price and loathed the potential for costly competition that would force earnings down through aggressive price-cutting.  In some markets, Verizon FiOS has forced Comcast, Cablevision, and Time Warner Cable to be a little more generous with broadband speed and lighten up a little on the annual rate increases.

But convincing cable customers to switch remains a difficult proposition even when Verizon offers the superior service.  Verizon has not achieved the level of penetration it expected in many markets.  In short, people just don’t want to wait around for installers.  Besides, cable companies slash prices for customers threatening to depart.

Verizon’s deal with Time Warner and Comcast delivers Verizon Wireless desirable spectrum.  But the agreement to cross-market and cross-bundle product lines smacks of collusion, and is exactly the kind of turf protection that has kept cable companies from competing head-to-head with each other for more than three decades.  Is it more lucrative for Verizon to build out its FiOS network to compete or simply refer people to Time Warner or Cablevision for cable TV.  So long as cable doesn’t offer a competing wireless product, Verizon seems to think there is little harm done.

But for consumers, the absence of competition brings rate increases, reduced innovation, and declining customer service.

The one thing the telecom marketplace needs less of is the “take it or leave it” attitude that earned the scorn of cable customers everywhere.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Broadband Blindness.flv[/flv]

Toast Sacramento produced this 28-minute documentary which succinctly tells the story of North American broadband, and how commercial providers have set us up for long-term failure, especially in rural and suburban areas.  Whether you live in the United States or Canada, phone and cable companies dominate the telecommunications landscape.  Unlike other modern-day necessities, broadband is almost entirely in the hands of an unregulated free market that fails millions.  Where competition exists, customers can get reasonably fast service, but it costs more than it should.  Where competition is hard to find: slow speeds, spotty access, and out-of-sight prices predominate.

The documentary explores:

• the neglect of suburban and rural DSL from large phone companies like AT&T;
• how phony, industry-influenced broadband availability maps convince public officials there isn’t a big broadband problem;
• why the country’s broadband demands may be too great for providers to handle without major new investments, leading to usage limits and slowdowns to delay needed upgrades;
• and how the latest broadband technologies being installed overseas fall victim to Wall Street temper tantrums back home.

AT&T’s fiber to the neighborhood service is not exactly winning consumers over in Chattanooga, Tenn.  As of this past spring, AT&T only managed to convince 821 local customers to sign up for U-verse service, in part because the competition delivers faster service, and one doesn’t slap broadband customers with an Internet Overcharging scheme.

While Comcast remains the dominant cable company in the city with more than 100,000 customers, community-owned EPB Fiber has made major advances, primarily against Comcast, picking up at least 33,000 customers in the city since the summer of 2010.

EPB is turning into a major success story for community-owned broadband, typically maligned as a financial failure by cable and phone company competitors.  EPB offers residential customers usage cap free gigabit broadband, television, and telephone service and is competing effectively against the nation’s largest cable operator.

EPB has been raking in more than $3.8 million a month in telecommunications revenue from residential customers alone.  In less than two years, EPB, which also delivers electricity in Chattanooga, has built a $45 million a year telecommunications business.  As a community-owned utility, most of that revenue stays in Chattanooga, benefiting the local economy and allowing EPB to reinvest in its network and improve service.

Comcast, in contrast, has seen its revenue drop by 8.4 percent during the first six months of 2011, primarily because of departing customers. That has forced the dominant cable company to become more aggressive in its efforts to retain those calling to cancel, primarily by slashing prices if wavering customers agree to stay.

Remarkably, AT&T’s U-verse has merited also-ran third place status — the victim of limited availability, the ongoing trend of customers dropping landline service, and the far-superior broadband speeds available from the competition.  AT&T’s Internet Overcharging scheme is also the stingiest, limiting broadband customers to just 150GB for its DSL service, 250GB for U-verse broadband, charging overlimit fees when the caps are exceeded.  Comcast has a usage cap of 250GB with no overlimit fee.  EPB has no limits.

The Chattanooga Times Free Press compares all three providers’ strengths and weaknesses:

EPB Broadband speeds are the fastest in the nation.

AT&T — Very aggressively priced introductory offers, more HD channels than its competitors, plus a “quad-play” bundle that includes AT&T wireless service.  But AT&T’s landline network is still the least equipped to compete on broadband speed, an increasing number of residents continue to turn their back on AT&T when they cut landline service, and U-verse’s usage caps come with overlimit fees.

Comcast — Has a substantial number of on-demand programs to access, can be cheaper than EPB during the initial year of service, and is testing home security and automation services.  Also offers two-hour service call windows and aggressively priced retention deals.  But Comcast’s regular prices are high, its broadband service usage-limited, and its reputation questionable after more than a decade of rate hikes and service complaints.

EPB — The fastest broadband speeds anywhere, EPB runs an advanced fiber to the home network, and maintains a very aggressive attitude about expanding and improving service.  EPB is a formidable competitor.  Community-0wned, its service benefits local residents with a locally-staffed call center, revenues that stay in Chattanooga, and management that answers to customers, not Wall Street.  No caps either.  But EPB can be a harder initial sell for price-sensitive customers because it doesn’t offer heavily discounted service to attract new customers.  But EPB prices don’t rise dramatically after the first year, either.  EPB’s television lineup is less robust than others, in part because it lacks a nationwide presence that brings the kind of volume discounts AT&T and Comcast receive.