Rep. Marilyn Avila’s (R-Time Warner Cable) anti-community broadband bill will be up for a vote this Wednesday in the Public Utilities Committee (Room 643, 12 noon) in the state legislature.

The bill was custom-written by Time Warner Cable to eliminate competition and keep your broadband prices high and speeds slow.  The proposed bill, H129 is bad news for every North Carolinian:

1. It will drive existing community networks out of business with onerous conditions;
2. It will damage the state’s credit rating and reputation when community networks fail under the legislative burdens that Time Warner Cable made certain it was exempt from;
3. It will harm local jobs.  Advanced fiber optic cables and equipment are also manufactured in North Carolina;
4. It destroys investment in the high tech infrastructure required to survive in the growing digital economy;
5. It guarantees that rural residents will never have access to the same kinds of broadband choices urban consumers and businesses have.

Nine high tech businesses and associations serving North Carolina have signed a letter telling the Legislature this bill will stifle high technology business in North Carolina.

But Marilyn Avila does not care.  She is only working for the interests of a single cable company that donates to her political campaigns.

Tell your legislator to vote NO on H129, and let them know you are appalled that this anti-consumer, anti-competition legislation keeps coming up year after year because of the lobbying influence of Time Warner Cable.  Make it completely clear you are watching their vote on this bill like a hawk, and it means everything to you at the next election.

Tell your representative to stand up for competition, stand up for advanced fiber optic networks, and to stand down on special interest legislation like H129, which only benefits the cable company that has overcharged you for years.

Your Call List

(click on each name for contact details)

Chairman	Rep. Steen
Vice Chairman	Rep. Brubaker
Vice Chairman	Rep. Cook
Vice Chairman	Rep. Hager
Members	Rep. K. Alexander, Rep. Blackwell, Rep. Brawley, Rep. Brisson, Rep. Collins, Rep. Dockham, Rep. Earle, Rep. Gill, Rep. Harrison, Rep. Hastings, Rep. Hilton, Rep. Hollo, Rep. Howard, Rep. Jeffus, Rep. Johnson, Rep. LaRoque, Rep. Lucas, Rep. Luebke, Rep. McComas, Rep. McLawhorn, Rep. T. Moore, Rep. Owens, Rep. Pierce, Rep. Pridgen, Rep. Samuelson, Rep. Setzer, Rep. Tolson, Rep. E. Warren, Rep. H. Warren, Rep. West, Rep. Womble, Rep. Wray

 

Stop the Cap! reader Jeff from Palo Alto, Calif., dropped us a line over the weekend asking about a story published last week by the Salisbury Post regarding a bill that would banish community-owned broadband providers in the state of North Carolina.  The legislation, custom-written by Big Telecom companies, could eventually spell doom for truly competitive service from community-owned providers like Fibrant, based in Salisbury.

“I got the impression that it said Salisbury was agreeing not to oppose the proposed legislation, in exchange for being exempted from it,” Jeff writes. “That seemed like a long-term victory for Time Warner. Am I missing something?”

The reporter who accepted propaganda at face value from the cable industry certainly did.

The article, “Lawmakers Eye Blocks on Fiber Optic Systems,” was replete with demonstrably false statements from both Time Warner Cable and a high-powered cable industry lobbyist less-menacingly-labeled “a lawyer for the N.C. Cable Telecommunications Association.”  (Perry Mason he isn’t.)

In fact, communities across the state continue to oppose this special interest favoritism, bought and paid for by the telecommunications industry.  But getting people acquainted with the facts is a problem when reporters don’t bother to fact-check some of the rhetoric from the cable industry, which at times leaves some with the ludicrous impression they are “the little guy.”

Rep. Marilyn Avila — The Representative for Time Warner Cable

The Post seems to suggest local officials are negotiating passage to the lifeboats before Rep. Marilyn Avila’s legislative gift to Time Warner Cable becomes the legal iceberg that sinks community broadband in the state.

In reality, city officials are pointing out they harbor no resentment towards any telecommunications company operating in the state.  In fact, they welcome them to participate by securing space on their advanced networks at competitive rates in public-private partnerships.

Unfortunately, they are up against Avila’s “bull in a china shop” bill that would cut the legs out from community-owned networks before such partnerships can become reality.  In fact, Avila’s abdication of her responsibilities to her constituents for the benefit of Time Warner Cable is even worse because it could ultimately harm the state’s credit rating and image if such networks can be run out of business at the behest of a competitor.

For a “small government conservative” to write a bill laden with regulations, rules, and taxes anathema to the “free market” is a testament to just how willing she is to abandon her principles when Big Cable comes calling.

Avila has suggested that existing community-owned networks are exempt in the current language of the bill.  That statement is patently untrue because the micro-management regulations found within it would apply to all community broadband networks, but exempt privately-owned ones.  That’s fair, right?

For mayors in communities with these networks, securing a strong exemption is part of a full-court press against this bill.  If it were to become law, keeping a pre-existing network in business becomes an important priority.

Mayor Susan Kluttz told the Post she is hopeful state lawmakers will rewrite the bill to exempt Salisbury and other cities with networks that are up and running.

But the mayor is smart enough to also realize at least some of the people at the table do not have the city’s best interests at heart when it comes to Fibrant.

Sources tell Stop the Cap! there are several members of the General Assembly, Republicans and Democrats, who are more than a little unhappy with Avila’s attempts to ram the bill through.  Not only does the water-carrying look bad inside (and outside) of the state, it will also destroy the potential of expanding broadband service to many poorly reached parts of North Carolina.

“This bill guarantees Time Warner will hold the keys to the broadband kingdom in North Carolina for years to come,” a well-placed source told us.  “Even public-private partnerships to develop broadband in rural areas of the state are directly threatened by her bill.”

Citizens across North Carolina are calling and writing legislators in opposition, but Avila doesn’t show signs of moving away from her pro-cable bill so far.

“Empty promises are being made to some legislators that suggest if they support this bill, Time Warner will magically wire unserved areas for service,” sources tell us.  “The company that had no intention of wiring these areas over the past two decades will continue to ignore them whether this bill passes or not.”

Indeed, Time Warner Cable and other companies use a standard business calculation when determining whether or not to wire outlying communities.  If too few customers live within a square mile radius, they don’t receive cable service.  Nothing has ever changed that unless it is mandated in a formal local franchise agreement.  At AT&T’s behest a few years ago, such local franchise agreements were banished from the state.  Rural residents in places like Caswell County pay the price as large sections of the county go without broadband service.

The implications are dire:

Jobs -are- threatened by Avila’s legislation.  They belong to the those who manufacture spools of fiber and the equipment that utilizes it, the contractors who install, maintain, and service the network, and the customer support staff that deal with customers on a daily basis.

One of the strengths providers like GreenLight and Fibrant bring to their respective communities is their networks are open to all-comers.  Time Warner Cable, AT&T, and other phone companies can obtain access on both to serve their own customers — business and residential.  The impetus for building these networks was to benefit everyone.

The only adversarial players here are cable and phone companies that want to own, manage, and control everything themselves.  The companies that spent years telling communities they saw no need to enhance service now want to legislate away the chance for others to try.

“We have several Republicans who read Time Warner’s claims about this bill, then looked over the inadequate broadband landscape in their districts back home, and are coming to the conclusion this is one bad bill,” one pro-broadband lobbyist told us.  “But this is still going to be a very hard fight unless ordinary consumers make their voices heard loud and clear.”

Fact Checking

The most disturbing thing about the Post story is the complete lack of fact checking the industry’s arguments, most of which are simply flat out false.  A few examples:

Melissa Buscher, Time Warner Cable’s vice president of communications for the Carolinas claimed the city of Wilson raised pole attachment fees by 300 percent after launching GreenLight, Wilson’s community-owned network.  Buscher suggests that is an example of cross-subsidizing networks.  In her mind, mean and nasty Wilson officials jacked up the fees  just to put the cable company at a competitive disadvantage.

But the facts tell a different story.

Wilson’s pole attachment fee, unchanged since 1975 while other communities around the nation raised them year after year, was adjusted well before GreenLight opened its doors for business.

“Before 2007, Wilson’s pole fee had stayed the same since 1975,” city spokesman Brian Bowman said. “The attachment fee increase was not related to GreenLight. The old fee schedule was outdated.”

How much money are we talking about here?  The old rate was $5 per pole annually.  Today it’s $15 per pole per year.  That means Time Warner will have to pay $246,000 a year instead of $82,000 in Wilson — petty cash to a multi-billion dollar cable company.

Time Warner itself provided data nearly five years ago in a Tennessee study on pole attachment fees that proves Wilson is hardly being arbitrary and capricious.  The cable company was paying up to $13.64 per pole four years ago in North Carolina.  The Tennessee Cable Telecommunications Association has been complaining as late as last year over average pole attachment rates of $14.86 per pole in that state, adjacent to North Carolina.

The irony of a cable company that has nearly tripled its basic cable rates over the same period of time complaining about rate increases is lost on them.

Buscher also claims their new competition in Wilson and Salisbury is run by the same city governments that regulate them:

“Cities have unfair advantages,” Buscher told the Post, noting when cities get into the broadband business, they become not only a regulator for incumbent providers, but also a competitor. “If municipalities want to get into a business already offered by the private sector, we welcome the competition, but we want to level the playing field.”

The only thing Time Warner wants to level is the competition from community networks that deliver better broadband service than they offer.

In reality, thanks to industry lobbying in the 1990s, the cable industry is almost completely deregulated.  No local, state, or federal government regulates broadband — where it is offered, at what speeds and at what prices.

There is no conflict of interest on the regulatory front.

Time Warner Cable and the North Carolina Cable Telecommunications Association: Waltzing Partners in a Dance of Deception

The North Carolina Cable Telecommunications Association, which helps deliver a one-two punch for Big Cable’s agenda, delivered the next false claim:

“Fibrant and GreenLight have lower operating costs.”

In reality, Time Warner Cable’s enormous size and scope provides them with benefits and cost saving opportunities across their national footprint that neither community provider can match:

• Volume discounts for programming, equipment, and other infrastructure;
• The power of incumbency, which makes them the default choice for most customers who must be compelled to switch providers;
• Access to grants and agreements like “payments in lieu of taxes” to protect cable jobs. Time Warner hardly pays “rack rates” for taxes across its entire footprint;
• Time Warner’s construction costs were mostly incurred in the 1990s when cable systems were last rebuilt.  Suddenlink Cable CEO Jerry Kent said it best: “I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”  That isn’t true for community networks just opening for business or still in the initial construction phase.

Frontier Communications, a private industry player, discovered all of the benefits in programming costs go to large players like Time Warner, Comcast, Verizon and AT&T when claiming they were forced to raise rates $30 a month because they could not get the same volume discounts big cable and phone companies receive.

Marcus Trathen, the lobbyist running the NCCTA, hopes his fear, uncertainty and doubt campaign will be proven correct with the passage of Avila’s bill.  As law, it assures all of the competitive advantages go to the billion dollar incumbents, and any failures will be among the community providers that compete with them:

“Cities are particularly ill-suited to competition in a technology-based industry,” Trathen said in an e-mail to the Post. “Technology changes in an instant.”

Just not for Time Warner customers in Wilson and Salisbury.  The genesis of these, and other, community-based networks come from provider intransigence to deliver the kind of broadband service consumers and businesses increasingly seek, at an affordable price.

Fibrant delivers 15/15Mbps service today in its standard broadband package.  Time Warner Cable delivers 10/1Mbps service.  When Fibrant and Greenlight were first proposed, Time Warner delivered even lower speeds.

The industry cannot have it both ways.  On the one hand, they claim community broadband is an economic failure delivering redundant service and mis-managed by government officials who do not understand the business of broadband.  On the other hand, these companies and their respective mouthpieces are literally spending tens of millions of dollars lobbying for legislation to keep these “failures” from ever getting off the ground.

As we’ve always said on Stop the Cap!, following the money always leads you to the truth.

Invest or die.  That succinctly explains the current state of the landline telephone business and the companies providing service to a decreasing number of Americans.  Some companies, like AT&T and Verizon have heavily diversified their business into wireless, fiber, IPTV and broadband.  Others, like Frontier are hoping their presence in uncompetitive rural markets will keep them in business, as long as their dividends keep stockholders happy.

CenturyLink, which is in the process of absorbing the last remaining Baby Bell — Qwest, has decided to invest in their business to stay competitive with their biggest nemesis — the cable company.  CenturyLink is still hanging on to ADSL broadband service in many rural areas, but the company sees the promise of future relevance with bonded DSL, which is delivering 25/2Mbps broadband service to an increasing number of their customers.  Where distances allow, CenturyLink is at least temporarily providing the fastest residential broadband service available in areas like southwest Florida.  They are holding their own against local cable competitors like Comcast.

Now the company is following AT&T in introducing a new IPTV service to many of its customers.  Dubbed Prism, the U-verse like service delivers a true triple play package to customers who thought they would be stuck with their local cable company or satellite dish provider for TV programming.

Prism offers more than 200 channels, a multi-room DVR capable of recording up to four shows at the same time, and an interactive program guide that doesn’t need an instruction manual to navigate.

[flv width=”640″ height=”390″]http://www.phillipdampier.com/video/Introducing CenturyLink Prism.flv[/flv]

This promotional video introduces CenturyLink’s Prism service and its television features.  (4 minutes)

Prism has been introduced in larger CenturyLink areas ranging from southern Nevada, southwestern Florida, and North Carolina, where EMBARQ used to provide telephone service.

The service works through a hybrid fiber-copper wire IPTV network.  Fiber optic cable reduces the distance data needs to travel over ordinary copper phone wires.  The less copper, the faster the potential speed.  With a 25-30Mbps broadband platform, Prism can divide up available bandwidth to support television, phone, and up to 10Mbps broadband service.  It’s all delivered over the same digital network.  While not as advanced as Verizon FiOS and other fiber to the home networks, IPTV services like Prism and U-verse are cheaper to provide, and that can mean faster deployment in areas not well served by competition.

Reaction to Prism has been generally positive among Stop the Cap! readers who have shared their stories with us.  Among the positives:

• The interactive program guide is light years ahead of Comcast, Cox, and Time Warner Cable;
• Broadband speeds are generally better than the original DSL service CenturyLink used to provide;
• The picture quality is excellent where the telephone network has been upgraded the most;
• Competitive introductory and retention offers mean consumers can pay less for service, at least initially.

But there are some problems, too:

• Bandwidth varies depending on how far away you are from the nearest fiber node.  This affects what you can do with the service.  If you are further out, you can only watch one HD television channel at a time, and may not be able to record more than one HD channel at the same time;
• The DVR box has issues — readers report shows disappear, don’t get recorded, or show poor results when line quality drops;
• Broadband speeds with Prism officially max out at 10Mbps;
• If you are watching a number of televisions at the same time, your broadband speeds could drop;
• Variability in service quality comes largely as a result of inferior copper wire phone networks CenturyLink chose to stick with.  If your phone line is prone to static or hum, or deliver poor results when the weather is bad, Prism might not work well for you.

Some subscribers found they initially loved the service, but when bad weather arrived, it all fell apart.

“Our phone lines are decades old, so this comes as no surprise,” says Manny who writes from Naples, Fla.  “I was also disappointed some of the channels in HD I had with Comcast are not available from Prism.”

In parts of Raleigh, N.C., Prism just launched a few weeks ago.  But some of our readers are sticking with Time Warner Cable.

“After looking over their pricing and packages, Time Warner has more HD channels and doesn’t charge $12 a month extra for them,” writes Ralph.  “CenturyLink also only bundles 3Mbps broadband service with most of their packages, and you have to pay extra for 10Mbps service.”

Ralph thinks Road Runner from the cable company will provide a more consistent broadband experience for his family.

“There is only so much you can push through a phone line at the same time; I like the fact they are competing, but they will not be able to keep up if they rely on copper phone wiring forever,” Ralph says.

Despite some of the negatives, CenturyLink may deliver formidable competition where cable companies haven’t kept up.  Some other markets where Prism will offer service: Jefferson City, and Columbia, Mo., and La Crosse, Wis.  Cox Cable in southern Nevada is now competing with Prism, and believes it has the superior network.

“The way our system is constructed, we have services equally distributed everywhere in the valley,” Juergen Barbusca, Cox manager of communications, public and government affairs in Las Vegas said. “Everybody in our footprint can get our highest advertised speeds.”

Cable broadband is less susceptible to distance degradation that can make Prism a no-go in neighborhoods at the far end of a phone company’s central office.

Also equally distributed is the price.  Outside of new customer promotions, nobody will save any money here.  Cox and CenturyLink are both selling their respective triple-play packages of TV, Internet, and phone for exactly the same price: $143 a month.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KTNV Las Vegas CenturyLink Prism 2-8-11 WFTX Cape Coral CenturyLink in SW Florida 12-7-10.flv[/flv]

KTNV-TV in Las Vegas introduces viewers to CenturyLink’s Prism service and WFTX-TV in Cape Coral, Florida talks with CenturyLink about their new 25Mbps broadband service in two exceptionally company-friendly pieces from the stations’ respective news shows.  (13 minutes)

Volusia County’s consideration of a community-owned fiber optic network has been scoffed at by incumbent cable provider Bright House Networks, which claims the network is “redundant” and unnecessary.

The proposed fiber project is being promoted by Jim Cameron, vice president of government relations for the Daytona Regional Chamber of Commerce.  The organization believes a public-private fiber-optic network could do wonders for economic development across the Fun Coast.

But the idea of stringing miles of fiber to connect area businesses to a gigabit-speed network brought rolled eyes from the folks at the cable company.

“We have miles and miles of fiber-optic lines in Volusia County,” Donald Forbes, senior director of corporate communications for Bright House told the Daytona Beach News-Journal. “Where anyone is willing to do business with us, we can make it happen . . . You want it, we’ve got it.”

But area businesses supportive of Cameron’s initiative are mystified by Bright House’s secretive-fiber-network, because few ever heard of it before.

Jason Frederick, business development director for WorkSmart MD, a Daytona Beach medical billing company, was just one example.  The News-Journal reports Frederick was surprised when he was told that Bright House claims to have fiber lines in the county that can deliver Internet at one gigabit per second, about 200 times faster than average broadband service in the U.S., or faster.

“I haven’t heard anything about Bright House offering one gig, and my tech guy is laughing (incredulously) right now,” said Frederick.

In Search Of… Bright House’s Mystery Fiber

Bright House declined to quote pricing for access to their fiber network to the folks at the News-Journal, so Stop the Cap! called Bright House Networks’ Business Solutions department this morning posing as a new business customer looking for fiber optic access.

STC: We were calling to gather information about getting broadband service for our new Internet business.  Can you tell me what kind of broadband services you have available?

At this point, Bright House asked us a ton of questions about where the business was located, what we intended to do with the connection, how many employees we had, etc.  After feeding them answers, we got them to narrow down some basics, even as they tried to have a sales representative come out and meet with us (we explained they would have to fly to New York to manage that, and they should bring a shovel if they come.)

Bright House pointed us to their website for basic details, but stressed individual plans could be customized to meet our needs.  That was the invitation we were looking for.

None of these plans seemed at all fast enough for our needs, we explained.  The maximum plan on their website, 50/5Mbps, didn’t even come close.  Where was the 50/50 or 100/100Mbps plans?  What if we needed a gigabit?  Didn’t we read they ran a fiber network?

Bright House: We do run a fiber network, but it’s a special kind known as a hybrid fiber/coax network.  That is the most proven technology out there, installed to millions of homes and businesses across the country for more than a decade.

STC: Then all-fiber networks are unproven?

Bright House: In a way, yes.  But more important, they are enormously expensive.

STC: How expensive?

Bright House: We spent millions on ours.

STC: So you are saying if we wanted Bright House to deliver fiber to our business, it would cost millions?

Bright House: Probably not that much, but it would probably be a waste of money because it was so expensive.  We service business customers all over central Florida, and I’ll be honest none of them really need fiber — it would be a waste of money.  We couldn’t even give you a price for fiber because nobody ever asked us before.

STC: Wow, I am surprised nobody has even asked.  Our business would want symmetrical broadband so our upload and download speeds would be the same.  We also don’t want to pay an outrageous amount of money for it.  What would Bright House charge for a symmetrical connection?

Bright House: One of our account specialists would have to talk with you about that.  Our network was designed to deliver faster download speeds because that is what our customers want.

STC: Well, not every customer.

Bright House: I understand that, and it sounds like you are a special case.  I think you’ll find we deliver the best service in town for business customers, and we sure do a lot better than AT&T.  Have you spoken with them about their service?

STC: We don’t want DSL.

Bright House (laughing): I can certainly agree with you there.  AT&T is a good company for what they do, but I am proud to say we do better.  And we can give you cable television and business phone service in one package.

STC: Yes, but we’re probably getting ahead of ourselves.  How much would it cost for just the broadband service?

Bright House: Before we quote you a price, we’d really like to sit down with you or a representative of your company so we can explain our whole product line and the benefits we offer.  Is there someone down here we could meet with?

STC: Not yet, but I appreciate the information and we can always call you back.

(We did learn from another source 50/5Mbps business class service costs around $190 a month from Bright House.)

So Bright House fiber remains elusive, even after our call.  Connected Nation, which has direct ties to Big Telecom, couldn’t find any fiber across the area either.  That was surprising, considering the large telecom companies help manage their operations:

The Florida Department of Management Services is running Connected Nation’s efforts in the Sunshine State.

If the goal is widespread fiber-optic coverage, then Connected Nation’s map shows Florida sorely needs a fiber dietary supplement (Metamucil-optic?). Only a small portion of the state — around Orlando and to the south, and around Tampa and along the surrounding Gulf Coast — has fiber coverage, according to Connected Nation’s survey results.

Jessica Ditto, Connected Nation communications director, said the map only reflects spots where fiber-optic lines run to homes, and that Bright House might not have responded accurately to the survey. Bright House’s Forbes said he hadn’t heard of Connected Nation.

Another indictment for the useless work Connected Nation does for large sums.  If a major provider doesn’t answer the questionnaire, broadband from that provider apparently does not exist as far as Connected Nation is concerned.

Finding fiber is Daytona is turning into that commercial for Honey Nut Clusters cereal.  It’s got to be around somewhere.

The county director of economic development, Phil Ehlinger, suggests it is all around us even if we can’t see it at first glance.

“I am not aware of anyone (in the business community) who is unable to get the service that they want,” Ehlinger told the newspaper. “Bright House and some of the other folks, AT&T, they have been putting in fiber optic all over the county.”

But the important question left unanswered is whether or not you can access it.  For individuals, the answer is clearly no.  Bright House believes its network is plenty fast enough, and AT&T didn’t want to talk to us in time for today’s story.  But phone companies, already vulnerable in the broadband speed race, prefers to deflect the question, arguing you don’t need that speed anyway.

Fiber optics delivers the fastest broadband experience, period.  But when providers don’t sell or promote the service, it’s easy to suggest nobody wants it.

But not too far away, in communities like Chattanooga, and several areas in North Carolina, they -do- want it.  Even Verizon FiOS, a growing presence in the northeastern United States, has won over business and residential customers to fiber-fast broadband.  In many cases, the network sells itself.

But in central Florida, Bright House won’t sell the service to you even if you ask.  It’s apparently the best kept secret in Daytona Beach.

[Updated 2/4/2011 — Don Forbes attached a reply to a piece on Broadband Reports that quotes from our piece:

Bright House Networks does in fact provide Fiber to the Premise (FTTP) – or what is known in the business services market as “dedicated access” – to its business customers who want this type of bandwidth. We work directly with our business customers to provide solutions tailored to meet their specific needs. We currently serve more than 3,000 Florida business locations directly with fiber. We currently offer speeds up to 1 Gbps, although it should be understood most business customers do not require 1Gbps speeds. Residential customers, at this time, do not need the bandwidth offered with dedicated fiber – however, Bright House has led the industry in comprehensively deploying next-generation bandwidth services (DOCSIS 3.0) to its’ entire footprint in Florida – current speeds offered are 50 Mbps with the ability to offer much higher. We provision our network according to our customers’ needs.

As a private company, we do reserve the right to share specific proprietary details of our network and our business for competitive reasons. However, it is no secret that we offer the above services.

It apparently is a secret to the people taking calls at Bright House’s business services hotline at 1-877-424-9246.  That’s the number we called yesterday to inquire.  The results are noted above.  I’d make two observations:

1. The point of our piece was partly to confirm whether fiber is a big secret in the Daytona area, as was the implication.  In our experience, it was.
2. Once again, another provider — this time Bright House — has made the declaration that residential customers don’t need fiber to the home access, something Verizon and many municipal/community-owned networks would strongly disagree with.  We do as well.  As long as phone companies compete using DSL, cable companies can safely make this claim and it won’t harm their business.  But if a far faster fiber to the home network arrives in town delivering far faster speeds (at equal or lower prices), Bright House, and other companies like it, could be in trouble — especially if their new competitors market themselves well.

We stand by our piece, which documents our direct experiences with Bright House Networks business class customer service.]

A full-scale revolt among consumers across Canada has brought the issue of Internet Overcharging to the highest levels of government.

A spokesman for Prime Minister Stephen Harper said the government is very concerned about a decision from the Canadian Radio-television and Telecommunications Commission that has effectively forced the end of unlimited use broadband plans across the country.

Both the Liberal and NDP parties have made a point of protesting the CRTC decision, which happened under the Conservative Party’s watch.  Harper’s Industry Minister Tony Clement stepped up his remarks this morning which hint the government is prepared to quash last week’s decision by the CRTC, which has already forced price increases for broadband service across the country.

“The decision on its face has some pretty severe impacts,” Clement told reporters in Ottawa after NDP and Liberal critics in the House of Commons repeatedly pounded the government on the issue of so-called “usage-based billing.”

“I indicated the impacts on consumers, on small business operators, on creators, on innovators. So that’s why I have to work through a process, cross my T’s, doc my I’s. When you’re dealing with a legal process, that’s what you have to do. But I will be doing that very, very quickly, and getting back to the prime minister and my colleagues very, very quickly,” said Clement.

As of this morning, more than 286,000 Canadians have signed a petition protesting the Internet Overcharging schemes.

The protest movement has now been joined by small and medium-sized business groups who fear the impact new Internet pricing will have on their businesses.

Richard Truscott, with the Canadian Federation of Independent Business, normally a group that prefers less government action, said his members are demanding a stop to the pricing schemes before they get started.

“The vast majority of small businesses rely on reasonably-priced Internet service to conduct their operations,” he said. “Generally this is the sort of thing that hits the most innovative sector with higher costs.”

Most cable and phone companies are lobbying Ottawa politicians to keep the new usage-based billing schemes, and several are pretending the protest movement doesn’t exist.

AgenceQMI, a cable-company owned wire service, is also coming under fire for misrepresenting Clement’s positions on the pricing schemes in a news report issued yesterday.  The wire service claimed Clement supported the CRTC’s position, something Clement adamantly denied this morning.

The National Post, a self-described conservative newspaper, this morning published an editorial supporting usage-based pricing, claiming a handful of users were creating a problem that light users should not pay to solve.  But many readers leaving comments on the article strongly disagreed, claiming the newspaper is out of touch.

Although the regime of usage caps, speed throttles, and overlimit fees have been in place with most major providers for at least two years, the culmination of several events in the last six months have brought the issue to the boiling point:

1. The arrival of Netflix video streaming, which provides unlimited access for a flat monthly fee;
2. The ongoing limbo dance among several providers who are reducing usage allowances when competitive threats arrive;
3. The increase in providers now enforcing usage limits by billing consumers overlimit fees that spike broadband bills;
4. Recent examples of bill shock, which have left some consumers with thousands of dollars in Internet charges.

Kevin Brennan, a graphic designer who works from home and downloads large files from clients, was first hit with extra charges in November, which cost him $34 above his usual Shaw bill.

“I’d never been contacted about going over before,” he told the Calgary Herald, adding he was also over in December. “Thirty-four dollars doesn’t seem like much, but over the course of a year it adds up.

“What concerns me, outside my own business, is the lack of innovation people will be able to do. And it makes Shaw a monopoly. . . . if you watch TV or the Internet, you pay more to them.”

Shaw reduced its usage allowance for customers like Brennan late last year from 75 to 60GB on its most popular broadband plan.  It also now enforces a $2/GB overlimit fee.

John Lawford, counsel for the Public Interest Advocacy Centre, told the Herald the concern isn’t just that smaller companies can no longer offer unlimited plans, which reduces competition.

“The phone and Internet and cable companies of the world are playing it both ways. They’re saying, ‘Well, there’s these big data hogs that are using too much, we’ve got to punish them to keep the price down.’ On the other hand they’re buying media companies so they have stuff to shove down the wires, which doesn’t count toward your cap,” Lawford said. “That’s anti-competitive.”

Most Canadian media companies are now tightly integrated with large telecommunications companies.  CTV, Canada’s largest commercial network, is now owned by Bell, the country’s biggest phone company.  Rogers, Shaw, and Videotron — the largest cable companies in Canada own cable and broadcast stations, newspapers, and magazines.  They also control cellphone companies, Wi-Fi networks, and have interests in satellite providers as well.

When a competitor like Netflix arrives to challenge the companies’ pay television interests, turning down consumers’ broadband usage allowances discourages cord-cutting.

The CRTC’s decision to allow Bell to charge usage-based pricing for wholesale accounts was the final death blow to unlimited Internet according to several independent service providers, because virtually all of them rely on Bell — a company that received taxpayer subsidies to build its broadband network — for access to the Internet.

TekSavvy, a company that used to offer unlimited use plans, can do so no more.  In a statement to customers, TekSavvy laid blame on regulators for being forced to increase prices.

“From March 1 on, users of the up to 5Mbps packages in Ontario can expect a usage cap of 25Gb (60Gb in Quebec), substantially down from the 200Gb or unlimited deals TekSavvy was able to offer before the CRTC’s decision to impose usage based billing,” read a statement sent to customers.

TekSavvy spokeswoman Katie do Forno said the CRTC decision is a disaster for Canadian broadband in the new digital economy.

“This will result in unjustifiably high prices and a reduction in innovation,” said do Forno. “I think it’s going to change behavior about how people use the Internet.”

The company underlines the point by including “before and after” pricing schedules on its website, an unprecedented move.  Shaw, western Canada’s largest cable company, was heavily criticized for trying to hide their reduction in usage allowances.

Ottawa residents are planning direct action to protest the decision this Saturday.  Shawn Pepin is organizing the protest rally.

“What they’re doing right now looks like a cash-grab scheme, and people aren’t going to take it,” he said.

[flv width=”640″ height=”388″]http://www.phillipdampier.com/video/CBC News Pay As You Go Tony Clement 2-1-11.flv[/flv]

Minister of Industry Tony Clement was pressed by CBC Television about the Harper Government’s stand on Internet Overcharging.  The CBC asks why Canadians are paying some of the world’s highest prices for broadband and why Clement is finally getting involved.  Watch as he mysteriously avoids stating the obvious: Canadians are in open revolt and politicians from competing parties are taking their side.  (9 minutes)