Sen. Chip Rogers' vision of rural Georgia's broadband future

Sen. Chip Rogers (R-Woodstock) thinks he knows broadband.  He, along with several other Georgia legislators well-compensated by some of the state’s largest telecom interests, have defined appropriate Internet speeds at a remarkably low “200 kilobits per second,” less than four times faster than your old AOL dial-up Internet account.  The one you canceled in 1998.

With a background like that, it was no surprise last Thursday when technology leaders and city representatives from across Georgia testified before the Senate Regulated Industries & Utilities Committee, strongly objecting to Rogers’ SB 313, a bill bought and paid for by the very companies the legislation would effectively protect from competition.

Rogers argues he wants to “level the playing field” between private providers that currently dominate broadband service in Georgia, and the long-suffering communities in rural areas that have waited for faster Internet since the Clinton Administration.

City officials from Dalton, Newnan, Elberton, Thomasville, Cartersville, LaGrange, Hogansville and Monroe collectively noted the proposed legislation hardly represents a level playing field when it fully exempts the bill’s backers from any of its provisions.  Thomasville mayor Max Beverly noted the same cable and phone companies that fiercely fought for statewide cable franchises for themselves now want to impose rules that forbid publicly-run companies from operating outside of their respective city limits.

“We would have to turn off service to the county’s two largest employers,” Thomasville Mayor Max Beverly told the Senate panel. “There is no telling what that would do to jobs in our area.”

Those testifying uniformly noted they entered the broadband business because private providers refused to deliver adequate service in their areas.

What community broadband provides communities the big phone and cable companies don't.

“We started our cable system not on a whim but on a demand from our citizens to provide a higher level of service for cable TV and Internet,” said Newnan Mayor Keith Brady. “We got into the cable business originally to provide fiber optics and broadband because Charter Communications would simply not invest in our community.”

Now cable and phone companies across Georgia are supporting legislation that would make that community service next to impossible to provide.

“The most ironic part of legislation like SB 313 is that cable and phone companies only take an interest in rural broadband when they ghostwrite bills like this to stop other people from providing the service themselves,” said Stop the Cap! reader Max Curr. “When I lived in Hiltonia, some of these same companies laughed at me when I asked about broadband. It simply was not profitable, they were not going to provide it, and with this bill, they will make sure it stays that way.”

But the cost to consumers extends way beyond the most rural corners of the state. SB 313 also hurts existing cable and phone customers who pay higher rates because of the lack of competition.  That assures the kind of anemic broadband Rogers and his friends in the cable and phone industries are only too happy to define as 200kbps.  At least that is 10kbps more than a similar bill being pushed by telephone and cable operators in South Carolina.

Brady says their community-owned system not only provides broadband where Charter would not, the cable company also was forced to reduce their rates for consumers in nearby communities, saving taxpayers across the entire city and county millions.

In Elberton, the lack of broadband was so pervasive the 4,700 local residents demanded the city provide the service themselves. Commercial providers had stonewalled the county seat of Elbert County for years until the city broke ground on a broadband project in 2001.

Dalton Utilities' CEO Don Cope (left), Newnan mayor Keith Brady (right) (Photo: Georgia Municipal Assn.)

Elberton City Manager Lanier Dunn complained SB 313 undercuts the rational definition of minimum Internet speeds to levels most Americans would not even consider “broadband.”  Dunn noted that the 2010 National Broadband Plan calls for download speeds 250 times greater, and by 2020 500 times greater, than what Rogers’ bill currently defines as broadband service.

“We should be reaching for higher and faster speeds, not relegating ourselves to barely just above dial-up,” Dunn said.

Don Cope, president and CEO of Dalton Utilities, demonstrated that municipal broadband systems are not the financial risk large telecommunications companies always claim they represent.  In fact, Dalton’s system has never received a penny of tax revenue and its accounting is open to public scrutiny to prove it.

Cope noted SB 313 imposes restrictions on community providers, but completely exempts those owned by the companies pushing the bill.

“I would ask that you look at the private providers in the state,” Cope said. “Look at their reports, and you would see how many dollars that are provided to them from the federal government. We are talking about in the billions of dollars. All the [private telecommunications entities] that I know about have some form of government support.”

Dalton isn’t the only city in Georgia with a successful community-owned operation.

The city of Newnan found their system such a valuable asset, they sold it at a profit to a private company in 2008 and used the proceeds to pay off its remaining construction costs.

Payday for Rutledge

Cablevision’s former chief operating officer Tom Rutledge has hit executive pay Powerball, scoring a compensation package worth more than $90 million dollars as the incoming CEO of formerly-bankrupt Charter Communications.

Documents filed with the Securities and Exchange Commission reveal why Rutledge abruptly resigned from his position at Cablevision on Dec. 15.  Just four days later, Charter announced Rutledge would become its new CEO this February, replacing Mike Lovett who earlier announced his departure plans.

Rutledge will be extremely well compensated in his new position, scoring $8,000 a week in walk-around money until February when the executive suite opens up.  After that, his base salary will amount to $2 million annually, with yearly increases possible.  But the real money will come from Rutledge’s bonus and incentives package.  In addition to an annual bonus worth up to $3.5 million annually, Rutledge will also get more than one million shares of Charter stock, worth more than $70 million at present.  If Rutledge focuses on boosting that stock price, he could earn considerably more.

That’s a remarkable pay package for a cable company that declared bankruptcy just two years ago.  It’s also a lot more money for Rutledge, who collected just over $28 million at his old job at Cablevision.

In 2010, soon-to-be-former Charter CEO Mike Lovett earned just under $11 million in total compensation.

Storm damage in eastern Massachusetts. (Courtesy: WGBH Boston)

The northeastern United States got more than its fair share of severe storms these past few months.  Remnants of Hurricane Irene caused severe flooding, heavy rainstorms that followed didn’t help.  But one of the worst of all was the Halloween Nor’easter that left serious wind damage in some areas, heavy snowfall in others, leaving customers without power, phone, cable, and broadband service for days, if not weeks.

Telecommunications companies including Cablevision, Charter Communications, Comcast, Cox Communications, Dish Network, Time Warner Cable, and Metrocast Communications of Connecticut are under fire across the region for not providing automatic service credits for impacted customers.  Charter and Comcast are both facing a class action lawsuit filed last week by a Massachusetts law firm that accuses the cable operators of “gouging” their customers by not automatically crediting affected subscribers for lost service.

Jeffrey Morneau of Springfield, Mass. law firm Connor, Morneau & Olin says up to 1.2 million Charter and Comcast customers were without service, but the companies will only provide credits on a case-by-case basis, and only if customers request them within a short time after the outage occurred.

“If you pay for a service and you don’t get it, the company can’t keep your money,” Morneau said.

Stop the Cap! readers in Massachusetts and New Hampshire report Comcast will grant reasonable service credit requests, assuming you get through to ask for them.

“Hold times are epic,” reports Tom Turlin, a Comcast customer in Massachusetts.  “I managed to get my credit by using their web contact form instead.”

Most providers require consumers to request credits for outages within 30-60 days of the service interruption, and time is running out for Nor’easter credits.

“Most people think they will only get 50 cents back so why bother, but actually with today’s huge cable bills, credits can be substantial,” Turlin says. “I received almost $15 back on my bill.”

Only AT&T, Connecticut’s largest phone company, agreed to automatically credit customers the company determined were without service for at least 24 hours.  Customers who don’t receive credit automatically can appeal to the company for credit they believe they are entitled to receive.

Here’s how different companies are responding:

AT&T: “We will give U-verse TV customers in Connecticut who experience a service outage for longer than 24 hours a pro-rated credit,” AT&T said. “In addition, we will voluntarily give similar credits for U-verse Voice and U-verse High Speed Internet service customers who experienced a service outage for longer than 24 hours. Customers are not required to take any action: the credits will be applied automatically on the customer bill for impacted customers within the next several billing cycles.”

Cablevision: “While state law provides for consumer credits for qualifying outages for cable service only, Cablevision has been providing a credit to customers on an individualized basis for all their services,” Cablevision said. “Customers will be credited when they notify us that they had a service outage. We are extending our normal period to request refunds to 45 days from the date of the storm.”

Charter: Customers must call or visit the cable company offices in person to request service credit.  “We are providing credit to customers for the entire time they were without service, from the time they lost power to the time their Charter services were fully restored, and we are providing credit for all services,” Charter said.

Comcast: “In order to receive a credit, a customer must contact Comcast and identify the time period during which they did not have access to Comcast services,” Comcast said.

Cox: “We need our customers to call us after their service is restored to report that they were without Cox services, and for how long,” Cox said. “We then credit their accounts from the time of the service outage until service was actually restored.”

DISH Network: The satellite provider is waiving service and equipment fees for consumers who need their equipment realigned, reinstalled or repaired due to the storm. “DISH subscribers who indicated that they were without service due to the storm were provided a credit for their time without service,” DISH said. “In addition, DISH subscribers who needed to suspend their service due to storm damage were allowed to do so at no charge.”

MetroCast Communications of Connecticut: It will provide customers with a refund on their next invoice after contacting the company. “The credit equals a prorated amount of the affected customer’s monthly charges for all MetroCast services, calculated based on the number of days during which such services were interrupted, and are included in the customer’s next invoice,” MetroCast said.

Time Warner Cable: Customers must contact the cable company online, by e-mail or phone and request credit for the number of days they were without service.  Most service credit requests that can be verified are granted within hours, and will appear on the next billing statement.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WSHM Springfield City councilor Comcast disagree on cable rebates 11-21-11.mp4[/flv]

WSHM in Springfield covers the ongoing dispute city officials have with Comcast, who is refusing to automatically provide storm credits to customers impacted by the October Nor’easter.  (2 minutes)

Charter Cable is upgrading its broadband service to deliver free speed upgrades, but with the company’s Internet Overcharging-usage cap scheme in place, some customers are not impressed.

“We plan to streamline Charter Internet options to: Lite, Express, Plus, and Ultra,” Charter social media rep “Eric” wrote on the Broadband Reports‘ Charter customer forum. “Current Max customers will be able to move to a different level of Internet Service.”

The company’s boosted speeds (prices vary in different markets):

• Charter Lite: 1Mbps/128kbps → Unknown ($19.99) 100GB limit
• Charter Express: 12/1Mbps → 15/3Mbps ($44.99) 100GB limit
• Charter Plus: 18/2Mbps → 30/4Mbps ($54.99) 250GB limit
• Charter Max: 25/3Mbps → Discontinued ($69.99) 250GB limit
• Charter Ultra: 60/5Mbps → 100/5Mbps ($99.99-109.99) 500GB limit

Charter has usage caps on all of its residential broadband service plans, but Stop the Cap! readers tell us they are not always enforced.  No overlimit fees are charged.  No announcements have been made about any changes to the existing usage limits.  Some Charter Max customers tell us they are using the speed upgrades an an excuse to downgrade to the cheaper Plus plan, which is faster and $15 less a month, with the same 250GB usage cap.  Customers who absolutely won’t tolerate a usage limit have to upgrade to commercial-grade service, which is considerably more expensive.  Lower speed plans run about $80 a month in many areas, but are unlimited.

“I’m glad to discover faster upload speeds, which I’ve waited for a long time, but I’d rather have no usage limits to worry about instead of faster speeds,” shares Stop the Cap! reader and Charter customer Paul McNeil.  “My problem with these faster speeds is that you can’t use them for too long.  Why buy a luxury race car you can only drive down the street?”

Light users who use the Internet primarily for e-mail or web page browsing rarely require more than the most budget-priced broadband package because high speeds do not deliver a significantly improved user experience.  But those who use the Internet for higher-bandwidth applications including video, downloading, certain online games, and file backup do benefit the most from high speed packages.  But when providers slap usage limits on them, the value erodes away.

“Why spend more for less?” asks McNeil. “Two years ago there were no limits and I honestly received more value from my Charter Internet service then over what I have to deal with now.”

Genachowski

The cable industry is expanding so-called “lifeline Internet service” to more households in an effort to combat what a government agency calls “a persistent digital divide.”

Next spring, Time Warner Cable, Cox, and Charter Communications will launch low-speed Internet service for $9.95 a month for two years.  The offers will echo Comcast’s Internet Essentials, which launched earlier this year as part of a deal with the government to win approval of the cable company’s merger with NBC-Universal.

The Federal Communications Commission calls the effort “Connect to Compete,” and suggests the public-private initiative will help rural Americans and low-income minorities get affordable Internet access. A study by the National Telecommunications and Information Administration found just 55% of black households and 57% of Hispanics currently subscribe to broadband.  More than 72% of Caucasian households and more than 81% of Asian homes use broadband by comparison.  The rural southern states of Mississippi (52%), Arkansas (52%) and Alabama (56%) have the lowest broadband penetration rates in the country.  In contrast, more than 80% of Utah residents have broadband in their homes.

“In this difficult economy, we need everyone to be working together on solutions,” FCC Chairman Julius Genachowski said. “Broadband is a key to economic and educational opportunity and these kinds of commitments to close the digital divide are powerful.”

But not every poverty-stricken American will qualify for the discount programs.

Cable operators are following Comcast’s lead, restricting access to families with at least one school age child enrolled in the free school lunch program.  Customers must not have existing broadband service during the last 90 days and customers with past due balances cannot sign up.  Don’t have children or fell behind on your cable bill?  No discount Internet for you.

Pilot programs will be launched by each operator in around a dozen cities total starting next spring, with plans to roll programs out nationally by the start of the 2012 school year.  Broadband speeds, usage limits, and other fees were not disclosed.  Comcast’s Internet Essentials operates at 1.5Mbps with upload speeds up to 384kbps.

Comcast’s program sells a netbook computer loaded with Windows 7 Starter Edition for around $150.  The $250 computers expected to be provided by Microsoft will include Windows 7 Home Premium operating system and Microsoft Office.  An additional vendor will sell refurbished computers to interested program participants for around $150.

The program will primarily reach urban residents who cannot afford current Internet service plans that are sold for $40-45 a month.  Rural residents are unlikely to benefit much because most cable operators do not deliver service in rural areas.

CenturyLink announced its own version of discounted DSL Internet in October to sell for $9.95 a month, but with numerous “gotcha” fees and surcharges.

One group unlikely to take advantage of the program: older householders, particularly those ages 65 and older, where just 45% have broadband at home.  The biggest reason the rest don’t?  They don’t believe they need the Internet at any cost.