Genachowski

This morning in Chicago, FCC Chairman Julius Genachowski congratulated the cable industry for their part in delivering broadband service to America.

Appearing at the cable industry’s trade show, Genachowski said the next problem to conquer is broadband adoption — reaching the 100 million Americans that either don’t want or can’t afford the service.

“As an industry, you’ve connected two-thirds of Americans to broadband – and I applaud you for that,” Genachowski said. “Now, let’s work together to connect the last third — nearly 100 million people — so all Americans can participate fully in our 21st century economy and society.”

To address the issue of broadband adoption, Genachowski plans to create a Broadband Adoption Task Force to be headed by his senior counselor, Josh Gottheimer.  The group will accept input from public and private sources to try and find ways to get broadband service into more homes.

The cable industry has recently argued that elimination of flat rate broadband service would allow the industry to create lower priced, lower usage tiers of service to reach customers.  But even existing “light usage” service plans that deliver lower speeds at lower prices have not made a major difference in convincing millions of potential customers to sign up.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Swinburne Sees Most TV Revenue from Subs by 2015 6-2-11.mp4[/flv]

With the advent of high speed broadband and streamed online video, an analyst at Morgan Stanley is predicting that by 2015, more than half of all television revenue will come from subscription fees charged to access it.  Ben Swinburne says the entire television model is being turned on its head by broadband video, with cable, phone and satellite companies scrambling to protect the average $85 Americans spend every month for broadband Internet and television service.

Among Swinburne’s predictions:

• Cable and telephone broadband will increasingly be the delivery platform for television programming with at least 50% of all televisions connected directly to the Internet by 2015;
• Advertising revenue will continue to lose prominence, with networks and programmers seeking direct payments from consumers in the form of monthly subscriptions or pay-per-view to access even traditional over-the-air programming;
• Satellite television is at a distinct disadvantage not offering broadband Internet access, something satellite companies are trying to change;
• Cable companies will face the potential of “online cable” competitors delivering multichannel video packages over broadband connections;
• Content producers, networks, and the cable industry will continue to maintain a united front against a-la-carte television, which could dramatically reduce the revenue the entertainment industry earns from selling multi-hundred channel cable and satellite video packages.

Swinburne speaks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.”  (4 minutes)

A research report sponsored by the National Cable & Telecommunications Association, the nation’s largest cable lobbying group, has concluded that millions of broadband stimulus dollars are being wasted by the government on broadband projects that will ultimately serve people who supposedly already enjoy a panoply of broadband choice.

Navigant Economics, a “research group” that produces reports for its paying clients inside industry, government, and law firms, produced this one at the behest of a cable industry concerned that broadband stimulus funding will build competing broadband providers that could force better service and lower prices for consumers.

• More than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers. In one of the project areas, more than 98 percent of households are already passed by at least one of these modalities.

• In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high. When existing mobile wireless broadband coverage is taken into account, the $231.7 million in RUS funding across the three projects will provide service to just 452 households that currently lack broadband service.

Navigant’s report tries to prove its contention by analyzing three broadband projects that seek funding from the federal government.  Northeastern Minnesota, northwestern Kansas, and southwestern Montana were selected for Navigant’s analysis, and unsurprisingly the researcher found the broadband unavailability problem overblown.

The evidence demonstrates that broadband service is already widely available in each of the three proposed service areas. Thus, a large proportion of each award goes to subsidize broadband deployment to households and regions where it is already available, and the taxpayer cost per unserved household is significantly higher than the taxpayer cost per household passed.

The cable industry funds research reports that oppose fiber broadband stimulus projects.

But Navigant’s findings take liberties with what defines appropriate broadband service in the 21st century.

First, Navigant argues that wireless mobile broadband is suitable to meet the definition of broadband service, despite the fact most rural areas face 3G broadband speeds that, in real terms, are below the current definition of “broadband” (a stable 768kbps or better — although the FCC supports redefining broadband to speeds at or above 3-4Mbps).  As any 3G user knows, cell site congestion, signal quality, and environmental factors can quickly reduce 3G speeds to less than 500kbps.  When was the last time your 3G wireless provider delivered 768kbps or better on a consistent basis?

Navigant also ignores the ongoing march by providers to establish tiny usage caps for wireless broadband.  With most declaring anything greater than 5GB “abusive use,” and some limiting use to less than half that amount, a real question can be raised about whether mobile broadband, even at future 4G speeds, can provide a suitable home broadband replacement.

Second, Navigant’s list of available providers assumes facts not necessarily in evidence.  For example, in Lake County, Minnesota, Navigant assumes DSL availability based on a formula that assumes the service will be available anywhere within a certain radius of the phone company’s central office.  But as our own readers have testified, companies like Qwest, Frontier, and AT&T do not necessarily provide DSL in every central office or within the radius Navigant assumes it should be available.  One Stop the Cap! reader in the area has fought Frontier Communications for more than a year to obtain DSL service, and he lives blocks from the local central office.  It is simply not available in his neighborhood.  AT&T customers have encountered similar problems because the company has deemed parts of its service area unprofitable to provide saturation DSL service.  While some multi-dwelling units can obtain 3Mbps DSL, individual homes nearby cannot.

Navigant never visited the impacted communities to inquire whether service was actually available.  Instead, it relied on this definition to assume availability:

DSL boundaries were estimated as follows: Based on the location of the dominant central office of each wirecenter, a 12,000 foot radius was generated. This radius was then truncated as necessary to encompass only the servicing wirecenter. The assumption that DSL is capable of serving areas within 12,000 is based on analysis conducted by the Omnibus Broadband Initiative for the National Broadband Plan.

Frontier advertises up to 10Mbps DSL in our neighborhood, but in reality can actually only offer speeds of 3.1Mbps in a suburb less than one mile from the Rochester, N.Y. city line.  In more rural areas, customers are lucky to get service at all.

Cable broadband boundaries were estimated based on information obtained from an industry factbook, which gathered provider-supplied general coverage information and extrapolated availability from that.  But, as we’ve reported on numerous occasions, provider-supplied coverage data has proven suspect.  We’ve found repeated instances when advertised service proved unavailable, especially in rural areas where individual homes do not meet the minimum density required to provide service.

We’ve argued repeatedly for independent broadband mapping that relies on actual on-the-ground data, if only to end the kind of generalizations legislators rely on regarding broadband service.  But if the cable industry can argue away the broadband problem with empty claims service is available even in places where it is not (or woefully inadequate), relying on voluntary data serves the industry well, even if it shortchanges rural consumers who are told they have broadband choices that do not actually exist.

Navigant’s report seeks to apply the brakes to broadband improvement programs that can deliver consistent coverage and 21st century broadband speeds that other carriers simply don’t provide or don’t offer throughout the proposed service areas.  The cable industry doesn’t welcome the competition, especially in areas stuck with lesser-quality service from low-rated providers.

Gov. Purdue

If North Carolina Gov. Bev Purdue does not veto H.129, the cable industry-written bill to throw up roadblocks for community broadband, it will automatically become law at midnight tonight.

We need every North Carolinian on the phone this afternoon, even if you called her office before. Let the governor know that you expect her to veto this anti-consumer, anti-jobs, anti-development bill that will keep broadband out of rural areas and competition at bay.  Let them know you cannot be fooled: doing nothing is the same as signing it into law as far as you are concerned.

The Governor’s Phone Number: +1 919 733 2391

The open source community has joined the fight.  Community Broadband Networks shares the open letter sent to the governor, published on Rootstrikers.org, a community dedicated to fighting all the corruption in politics that allows massive companies like Time Warner Cable to buy legislation:

Dear Governor Perdue,

We are strong supporters of your leadership and your campaign, and we would like to be heard on the important issue of community broadband. I know you are not afraid to use your veto pen, and so I ask you to veto H129, a bill that will take the future away from North Carolina and put it into the pockets of cable company monopolists.

On Sunday May 15th you may have read about our latest investment in North Carolina, Manifold Recording. This was the feature story in the Arts & Living section, and the top right-hand text box on the front page. One of the most difficult and expensive line-items in this multi-million dollar project was securing a broadband link to the site in rural Chatham County. I spent more than two years begging Time Warner to sell me a service that costs 50x more than it should, and that’s after I agreed to pay 100% of the installation costs for more than a mile of fiber. As part of a revised Conditional Use Permit (approved last night), I presented to the Commissioners and the Planning Board of Chatham County data on the economic investment I made, and the fact that according to the statistics from the Rural Broadband Coalition, that such an investment was worth about $300,000 to the 100+ neighbors who live along the new fiber link that I paid for.

Such heroics should not be necessary, nor should they be so costly.

I spent 10 years in Silicon Valley, and I know how quick they are to adopt new technologies that help people start and grow businesses. Manifold Recording would have remained a pipe-dream without broadband. But not everybody can afford to pay $1000/month for the slowest class of fiber broadband. Community broadband initiatives reach more people faster, at lower costs, leading to better economic development. Take it from me: had I been able to spend the time and money on community broadband that I spent in my commercial negotiations, there would be more jobs in Chatham County today.

For more information, which I strongly encourage you to have someone on staff research, please review https://www.rootstrikers.org/#!/story/community-broadband/. There, you will see that “as goes North Carolina, so goes the nation.” We cannot afford to ruin either our own prospects for an economic recovery led by new technologies and new business nor the prospects for an America recovery.

Meredith Attwell-Baker sure is.

The exit of Meredith Attwell Baker from her role as a Republican commissioner on the Federal Communications Commission to take a position as a top lobbyist at Comcast is raising eyebrows in Washington and anger in the rest of the country.

Comcast confirmed late today Baker will serve as their new senior vice president of government affairs, a title that can be considerably shortened to “lobbyist.”

The short span between March, when Baker was browbeating regulators over “taking too long” to review the Comcast-NBC merger she supported, and today’s announcement has surprised even some Washington insiders.

Often, those looking for a better paycheck in the private sector will start by working for a D.C. lobbying firm before directly accepting employment with a company whose multi-billion dollar merger deal they affirmed months earlier in their role as a regulator.

Tim Karr at Free Press called today’s announcement more food for the cynics:

With behavior like this it’s little wonder that American people are so nauseated by business as usual in Washington. Inside the Beltway the complete capture of government by industry barely raises any eyebrows. Outside of Washington, people of every political stripe have expressed near unanimous contempt for a system of government that favors powerful corporations at the expense of the many.

An opinion piece in the Los Angeles Times noted Baker’s move raises uncomfortable questions about how legislators and regulators make their decisions. “Are they acting in their constituents’ best interests, or are they burnishing their prospects for a high-paying job on K Street after they leave government?”

The New York Times expanded on Baker’s strong sentiment for the merger:

“The NBC/Comcast merger took too long, in my view,” Ms. Baker said on March 2 in a speech to a communications industry group. Noting that that time was similar to the length of other major merger reviews at the commission, she asked whether those reviews were preventing companies from trying to grow through acquisition.

“My concern is that you might walk away,” she told the communications executives, “and how many other consumer-enhancing and job-creating deals are not getting done today.”

Politico reported that Comcast’s gain was probably a loss for consumers:

“Sometimes the revolving door between government and private industry spins quickly and sometimes it’s on a rocket sled,” Dave Levinthal, communication’s director for the Center for Responsive Politics, told POLITICO. “This transition is as quick as it can possibly get.”

While Baker is not allowed to be an official lobbyist, Levinthal noted that she has many ways to be influential and lobby for her new company in a broader sense.

“It’s a big boon for Comcast,” he said. “They are getting somebody who has unbelievable government experience and know-how” in the communications space. Consumers, he noted, can’t afford to hire someone of a similar stature to advocate for them.

Comcast denied it approached Baker for a job until after their merger deal was approved.  That defense only strengthens suspicions Baker’s vote made her an even more attractive candidate for the cable company, but most pundits guess she would have supported Comcast even without a job offer. Judging from the comment sections of most major media stories covering today’s events, consumers are unhappy. Some called Baker an opportunist, while others used the occasion to bash Republicans for their reflexive support of big cable and phone companies paying off with jobs at the companies they strongly supported while in government positions.

Considering a few former Democratic commissioners have also made a living working for the interests of big cable and phone companies, calling today’s events an exclusively Republican travesty would be wrong.

Baker will report to Kyle McSlarrow, who recently left the National Cable and Telecommunications Association, the cable industry’s top lobbying group, for his own new career at Comcast.