Phillip “You Guys Need a Timeout” Dampier

AT&T and Time Warner Cable are complaining they have gotten a raw deal from Kansas City, Mo. and Kansas City, Ks., in comparison to the incentives Google was granted to wire both cities with gigabit fiber broadband.

“It’s time to modernize our industry’s rules and regulations…so all consumers benefit from fair and equal competition,” read a statement from AT&T.

“There are certain portions of the agreement between Google and Kansas City, Kan., that put them at a competitive advantage compared with not just us but also the other competitors in the field,” said Alex Dudley, a Time Warner Cable spokesman. “We’re happy to compete with Google, but we’d just like an even playing field.”

The Wall Street Journal seemed to suggest Google was getting the keys to both cities, with grants of free office space and free power for Google’s equipment, according to the agreement on file with the cities. The company also gets the use of all the cities’ “assets and infrastructure”—including fiber, buildings, land and computer tools, for no charge. Both cities are even providing Google a team of government employees “dedicated to the project,” says the Journal.

The Google Fiber project was so desired that the local governments rolled out the red carpet. In Kansas City, Mo., for instance, the city is allowing Google to construct “fiberhuts,” small buildings that house equipment on city land at no cost, according to a person familiar with the matter.

The cities are discounting other services, as well. For the right to attach its cables to city utility poles, Google is paying Kansas City, Kan., only $10 per pole per year—compared with the $18.95 Time Warner Cable pays. Both cities have also waived permit and inspection fees for Google.

The cities are even helping Google market its fiber build-out. And both are implementing city-managed marketing and education programs about the gigabit network that will, among other things, include direct mailings and community meetings.

Several cable executives complain that the cities also gave Google the unusual right to start its fiber project only in neighborhoods guaranteeing high demand for the service through pre-registrations. Most cable and phone companies were required by franchise agreements with regional governments to build out most of the markets they entered, regardless of demand.

But the Journal missed two key points:

1. Time Warner Cable has been granted the same concessions given to Google on the Missouri side, and AT&T presumably will also get them when it completes negotiations with city officials on the matter.
2. Both cable and phone companies have the benefit of incumbency, and the article ignores concessions each had secured when their operations first got started.

The Bell System enjoyed a monopoly on phone service for decades, with concessions on rights-of-way, telephone poles and placement. AT&T was a major beneficiary, and although the AT&T of today is not the same corporation that older Americans once knew, the company continues a century-long tradition of winning the benefit of the doubt in both the state and federal legislature. AT&T has won statewide video franchise agreements that give the company the power to determine where it will roll out its more advanced U-verse platform, and enjoys carefully crafted federal tax policies that helped them not only avoid paying any federal tax in 2011 — the company actually secured a $420 million “refund” subsidized by taxpayers.

Cable operators also won major concessions from local governments under pressure from citizens eager to buy cable television. At the time, cable companies were granted exclusive franchises — a cable monopoly — to operate, an important distinction for investors concerned about the value of their early investments. Local zoning and pole attachment matters were either negotiated or dealt with legislatively to allow cable companies the right to hang their wires on existing utility poles. Franchise agreements permitted the gradual roll-out of cable service in each franchise area, often allowing two, three, or more years to introduce service. It was not uncommon for neighborhoods on one side of town to have cable two years before the other side could sign up. That sounds awfully familiar to AT&T U-verse today.

Google’s proposal to build a revolutionary broadband network delivering 1Gbps deserved and got the same type of treatment then-revolutionary phone and cable service won back in the day.

Time Warner Cable also won much the same treatment Google is now getting, and the cable operator has gotten $27,000 in fees refunded and will avoid another $100,000 in permit fees going forward. Time Warner Cable and Google will both receive free traffic control services during network construction — not that Time Warner Cable plans much of a change for customers in either Missouri or Kansas.

AT&T will likely also receive the same treatment, although it would be hypocritical of them to complain that Google gets to pick and choose where it provides service. Large swaths of Kansas City and suburbs are still waiting for U-verse to arrive, and many areas will never get the service. Cable operators had to wire a little further, but also benefited from years of monopoly status and network construction expenses paid off years ago when there literally was no competition.

Those paragons of virtue at Goldman Sachs are appalled Google has such a good relationship with Kansas City officials more than happy to have the gigabit speeds neither AT&T or Time Warner Cable would even consider providing.

Google’s rights “appear to be significantly more favorable than those cable, Verizon or any other fiber overbuilders achieved when striking deals with local governments in the past,” Goldman Sachs analyst Jason Armstrong told the Journal. “We’re surprised Time Warner Cable hasn’t been more vocal in its opposition.”

But then the cable company has secured most of the same benefits Google has, so why complain at all?

In fact, city officials had to browbeat Time Warner to modernize its network in ways it would have not done otherwise without the new agreement.

Both AT&T and Time Warner have every right to be concerned. Their substandard networks and high prices (along with a lousy history of customer service, according to national surveys) put them at a competitive disadvantage if Google does not make any major mistakes. Neither cable or phone company has made any noise about upgrading service to compete, and should customers begin to leave in droves, then both companies may actually have something to cry about.

The Wall Street Journal’s report on the concessions granted to Google wanders off into the Net Neutrality debate for some reason, and misses several important facts reviewed above.  (3 minutes)

Comcast cable subscribers in Mattapoisett want less bundling and fewer fees.

They and everyone else.

This month, the 6,000 local residents of the small coastal town in southeastern Massachusetts got the opportunity to voice their concerns about Comcast Cable’s performance before the Board of Selectmen at an open town meeting contemplating the renewal of the cable operator’s five year franchise agreement.

The Sippican Week covered the proceedings:

Subscription plans and fees were the main concerns voiced by residents at the meeting.

“I’m just here to see if there is any way we can unbundle or offer some of the channels a la carte, rather than have to pay an exorbitant fee for the channels that are bundled at the different levels,” said Herb Webb.

“Instead of these large packages you have to buy, they could break them up into smaller sub-packages,” said Selectman Tyler Macallister. “Get some feedback from the town and develop packages specially for Mattapoisett.”

Resident Bob Spooner also questioned the $2 fee subscribers are charged for each cable box in addition to their main TV.

“What about the people who have four or five TVs,” said Spooner. “That’s another six or eight dollars a month.”

Macallister agreed, “I’m already paying for those channels, but now I have to pay $2 to get it.”

Selectmen chair Jordan Collyer tried to answer residents’ concerns, much like any local town or city official facing similar complaints would — with understanding and little else. After all, Comcast operates in a largely deregulated marketplace and need not fear threats from elected officials.

Local governments have no say over a cable company’s pricing for its most popular tiers of service, cannot dictate matters of channel bundling or equipment fees, and have little recourse beyond taking bids from other operators willing to serve when an incumbent company’s franchise goes unrenewed.

But that almost never happens. No major cable operator will offer to replace another major operator, meaning the chances that Time Warner Cable, Cox, Cablevision, or Bright House Networks would respond favorably to a request are effectively zero.

But parts of Mattapoisett are lucky enough to at least have a competitive option — Verizon FiOS, although that company also charges for set top equipment and bundles channels together. The local government has little control over Verizon’s service either.

One alternative open to residents and the local government is to support the construction of a community-owned provider that could, as much as programming contracts allow, respond more effectively to these kinds of concerns. Under current regulatory policies, that is about the only way Mattapoisett, and towns like it, can guarantee the presence of a responsive provider ready to meet the collective needs of the community.

The last time Comcast charged less per day than the cost of a cup of coffee, they used this logo.

Comcast is raising rates on its Atlanta-area customers effective Oct. 1.

“Despite working hard to keep down our prices, we are continuing to experience increased costs, including rising programming expenses, while also investing in next-generation technologies that deliver new innovations,” said Brian Farley, a spokesperson from Comcast. ” This year alone, we’ve added 15 new channels in in metro Atlanta – including Disney Junior, ShopNBC and ESPN Goal Line – and made our programming available on additional screens.”

It is uncertain how many Atlanta area customers were clamoring for Comcast to add ShopNBC — a network Comcast now owns with the purchase of NBC-Universal, much less pay extra for it.

Comcast expects most customers will see increases averaging $3 a month on their October bills. But the cable operator also took time to remind customers of the incredible value cable television still offers Atlanta:

Comcast: $2.28 a day. A cup of coffee at the Atlanta Diner? $1.65

“At just a few dollars a day, cable is about the price of a cup of coffee and significantly less expensive than taking a family to the movies or a sporting event,” Farley said.

Perhaps, but not always.

Comcast charges just under $70 for its popular Xfinity Digital TV Starter package — around $2.28 a day. Atlanta-area Regal Theaters charge around $11 a ticket — $44 for a family of four. The Atlanta Diner charges $1.65 for a cup of coffee (with free refills). Assuming you visited them for 30 days, your coffee tab would run $49.50, still much less than what Comcast charges every month.

More than a decade ago, cable operators used to claim their service was still less than a cup of coffee. It actually still might be, assuming your cup of coffee comes from Starbucks.

Country Cablevision, a small cable operator providing service in the heart of the Blue Ridge Mountains in rural northwestern North Carolina, will deploy fiber to the home service to Mitchell and Yancey counties, home to more than 33,000 people, thanks to $25.3 million (75% grant/25% loan) from the U.S. Department of Agriculture’s Rural Utilities Service.

The money is intended to fund broadband expansion in areas currently not served by the cable operator. When the project is complete in 2013, 97% of all homes in both counties will have access to the fiber network. Faster Internet speeds and competitive phone service will also be available to area businesses, and medical facilities in both counties will enjoy improved high speed connectivity.

Country Cablevision is one of the first cable operators in the country choosing to upgrade to an all-fiber network instead of extending its current, traditional cable infrastructure into currently unwired areas.

Modern utilities came to rural America through some of the most successful government initiatives in American history, carried out through the United States Department of Agriculture (USDA) working with rural cooperatives, nonprofit associations, public bodies, and for-profit utilities. Today, USDA Rural Development Utilities Programs carries on this tradition helping rural utilities expand and keep their technology up to date, helping establish new and vital services such as distance learning and telemedicine.

THE Internet Overcharger

Cable One, one of the nation’s most notorious, usage-capped broadband providers, has left thousands of Columbus, Miss. subscribers without phone, Internet, and cable television service since 6pm Sunday night, unable to repair the problem until a part arrives at the local cable office.

The Dispatch reports a steady stream of people, unable to get answers from Cable One over the phone, have been showing up at the company’s local cable office from the time it opened for business this morning, all looking for answers.

Cable One General Manager David Lusby said he had no idea how many customers were affected by the outage or when the cable system would be back up and running. Those are not the answers customers want to hear, particularly for customers depending on Cable One for their local businesses. Local shops have been unable to process credit card transactions, cannot make or receive calls, and are relying on personal cell phones for basic connectivity with the outside world.

New Hope resident Walter Worthy is fed up with Cable One’s bad service, calling the company’s broadband service “spotty” for more than a month.  Worthy told the newspaper he would rather have AT&T’s DSL service if he could, but AT&T has shown no interest extending service in his neighborhood.

One ex-customer named Matt told the newspaper he finally dropped Cable One Internet service that cost $65 a month for the same reason.

Cable One maintains one of the most arcane Internet “Fair Use” policies in the country, with broadband usage limits that apply to both daily and monthly usage:

Another limit applies to monthly usage:

The combination of poor service and a confusing Internet Overcharging scheme resulted in the cable operator experiencing a loss in broadband customers, almost unprecedented for cable companies. Cable One said goodbye to 1,017 high-speed Internet and 9,610 basic video subscribers during the second quarter, according to its owner, The Washington Post.

Communities like Natchez, Miss. are responding by attempting to shorten its franchise renewal with the company, which typically runs 10 years.

Ward 3 Alderwoman Sarah Smith foresees the contract being renewed but isn’t certain she wants the city’s digital future tied to Cable One for the next decade.

“Technology is changing so fast, I just don’t see us having any contract for as long as 10 years,” Smith told the Natchez Democrat.

Smith notes local residents have regularly complained about Cable One’s service, and the city has considered the possibility of letting another operator take over in the area, but has found no takers.

“We’re not going to be on the top of the radar for every service to be here,” Smith said.

More importantly, it is unprecedented for another major cable provider to displace a current operator, no matter how poorly they provide service.