Sometimes you can’t please some people no matter what you do.

Kit Carson Electric Cooperative’s $64 million fiber-to-the-home expansion project will finally bring 21st century broadband speeds to northern New Mexico. The electric co-op intends to deliver broadband speeds up to 100Mbps to 20,000 largely rural residents and businesses in Taos, Colfax, and Rio Arriba counties who have had limited access to cable broadband or live with speeds often less than 1Mbps from CenturyLink-delivered DSL.

“It’s a whole new ballgame for rural New Mexico,” shares Stop the Cap! reader Raul. “But the pinheads at the local weekly newspaper are ringing their hands over the project, suggesting only businesses deserve 100Mbps while the rest of us should be satisfied with speeds under a megabit per second.”

Indeed, editors at the Sangre de Christo Chronicle are wringing their hands over the project:

But many of us in the Kit Carson service area already have Internet service — and we’re completely happy with it. Kit Carson CEO Luis Reyes, Jr. said a large portion of the organization’s electric customers are currently under-served by other providers with Internet speeds of less than one megabit (1,000 kilobits) per second.

We have no reason to doubt that, but many of these customers probably don’t need the higher speeds. For the Internet customers who use the Internet for email, Facebook, news and other basic functions, Kit Carson’s prices will be most important. Most of us will not pay more for faster Internet speed we don’t need, but we will consider switching to a local provider if it offers identical or better service and prices.

“CenturyLink barely delivers DSL today, and has shown no interest in investing substantially in northern New Mexico, and outside of concentrated built-up areas there is no cable competition,” Raul says. “Kit Carson is the only local concern that has shown any real interest in making our community better, and the local newspaper is complaining about it.”

Proposed service area for Kit Carson Electric's new fiber to the home network serving northern New Mexico.

Kit Carson Electric’s project will provide a true fiber-to-the-home service bundling television, telephone, and broadband service — a substantial upgrade over what the telephone company has on offer.  With speeds far beyond what cable and phone providers in New Mexico are accustomed to providing, the region stands to benefit from entrepreneurs building digital economy businesses over a broadband network that can actually help, not hinder online development.

Currently, area residents pay CenturyLink up to $55 a month for 1.5/1Mbps DSL service.  Residents are so excited by the prospects of much faster speeds at significantly lower prices, Kit Carson Electric has developed an innovative stop-gap service for residents still waiting for direct fiber connections — fiber-to-wireless service.  New and existing customers can sign up for the service for a $100 installation fee and choose from three service tiers:

• 3Mbps — $29.95/month
• 7Mbps — $39.95/month
• 10Mbps — $49.95/month

A three year contract is required (early termination fee is $200).  But customers who eventually obtain Kit Carson Electric’s fiber service will automatically satisfy their contract requirement.

“Kit Carson’s wireless project already blows away CenturyLink’s speeds and pricing, and that is for inferior wireless,” Raul argues. “The Chronicle doesn’t have a clue.”

We can’t understand the newspaper’s concerns either.  Kit Carson Electric has already demonstrated their prices (and interest) in northern New Mexico is superior to that of CenturyLink, owner of former Baby Bell Qwest, which serves New Mexico.

Republican Sen. Jeff Bingaman is thrilled with Kit Carson’s broadband initiative.

“This major investment in broadband technology is exactly the kind of project I had envisioned when I voted for the American Recovery and Reinvestment Act,” U.S. Senator Jeff Bingaman said. “This grant is not only creating jobs now in northern New Mexico, it is laying the groundwork to attract new businesses, improve healthcare services and create new education opportunities in the future.”

The electric co-op has been successful operating non-profit businesses selling propane, telecommunications, and economic development space.  The fiber project will also allow the electric utility to deploy “smart grid” technology to increase the efficiency of their electric service.

A groundbreaking ceremony at the broadband project’s command center held this past summer also coincided with a public emergency communications network upgrade which will increase the efficiency and reliability of first responders and other emergency and public safety agencies.

Wireless operator (and cable company) Rogers Communications likes to spend big dollars pushing the message Canada is in the midst of a wireless spectrum crunch — a big reason why it wants “equal treatment”-bidding in upcoming spectrum auctions that may include “set-asides” exclusively for emerging Canadian wireless competitors.

But apparently the spectrum shortage only impacts areas outside of the province of Quebec, because Rogers plans to experiment with a new LTE wireless video on demand service it plans to pitch Quebecers, perhaps as early as next year.

Rogers CEO Nadir Mohamed told the Montreal Gazette the cable company intends to enter the Quebec market with an “over-the-top” on-demand video service, distributed over Rogers’ growing LTE wireless broadband network.  While Mohamed was quick to say this doesn’t mean Rogers intends to launch a full-scale competitive invasion against provincial providers Videotron, Ltd., and Bell Canada Enterprises, it is pre-emptively getting into the business of serving cord-cutters who drop traditional cable packages to watch online video.

The new service is expected to be accessible on phones, tablets, and Internet-enabled televisions and video game consoles, presumably through a wireless Internet adapter.

Mohamed

“Video for wireless has huge potential for growth,” Mohamed told the Gazette. “It’s sort of the mirror image of (how cable evolved), which went from video, to data to voice.”

Nothing eats bandwidth like online video, and Rogers traditionally caps this and other usage on their mobile wireless network, citing spectrum and capacity shortages. But Rogers sees few impediments serving up certain kinds of online video: namely their own.

That’s not a message the company continues to deliver consumers on its “I Want My LTE” website, part of a robust lobbying effort to get its hands on as much new spectrum as possible, even if it means locking out would-be competitors.  In fact, leaving the impression the company has spectrum to spare is so politically dangerous, Mohamed took the wind out of his own announcement by mentioning, as an aside, their networks still don’t have enough capacity to deliver full-motion video to a large number of customers at the same time.

“I think wireless networks in the foreseeable future will not have the capability to deliver full-motion video to a large number of customers at the same time, even with LTE,” he said. “So what you will see is an integration of wired and wireless, where the wireless network will off-load the traffic to a wired network.”

Rogers’ decision to limit the service, both in scope and range, is also designed to protect itself (and other cable operators) from unnecessary competition.  Rogers won’t offer a full menu of video services outside of its traditional cable system areas in Ontario, New Brunswick, and Newfoundland, and only Quebec residents (where Rogers doesn’t sell cable TV) will have the option of signing up for the wireless video-on-demand service.

The Federal Communications Commission has concluded allowing AT&T and T-Mobile to merge will cause huge job losses and knock out a vital wireless competitor in an increasingly concentrated U.S. wireless marketplace.

The new 266-page document, produced by FCC staffers, directly challenges AT&T’s contention that the merger will bring about job creation and an improved mobile broadband network for millions of rural Americans.

The report comes on the heels of news the Commission will allow the FCC to withdraw its pending application before the FCC to win approval of the merger.  That allows the company to resubmit the merger request at a later date.

The FCC determined prices will increase an average of 6-7% in these cities if the merger deal gets approved.

The new report, occasionally redacted to remove competitive information, found AT&T vastly exaggerating the benefits of the deal, questioning whether it would indeed lead to lower prices for consumers, bring about enhanced service, and create new jobs.

Overall, the agency concludes, AT&T and T-Mobile have failed to meet their burden of proof that the merger is in the public interest.  The FCC staffers found no compelling reason why AT&T needed T-Mobile to build out its 4G network to the majority of the country.  Indeed, memos accidentally leaked to the Commission by AT&T’s legal team suggested AT&T executives rejected expansion plans as too costly.  Instead, they proposed a $39 billion dollar merger with T-Mobile with a $6 billion deal cancellation clause.  That penalty exceeds the $3.8 billion AT&T rejected spending to pursue 4G upgrades on its own.

Among the Commission report’s findings:

• The merger would increasingly concentrate the U.S. wireless marketplace, leading to unilateral and coordinated efforts to raise prices by remaining carriers;
• Roaming agreements for remaining smaller and regional carriers could become more difficult and expensive to reach with fewer players in the marketplace;
• Pricing innovation, a hallmark of T-Mobile, would be lost.  T-Mobile is cited by the FCC as one of America’s most-disruptive carriers, forcing other companies to match their aggressive offers;
• Despite AT&T’s promises to grandfather existing T-Mobile customers to their existing plans, customers would be unable to upgrade to an equally innovative plan T-Mobile probably would have offered on its own.  Instead, customers would be forced to choose one of AT&T’s more expensive, traditional plans;
• AT&T is overstating the importance of remaining competitors, especially regional carriers and Leap Wireless’ Cricket and MetroPCS, which all have a negligible market share and depend heavily on roaming agreements with companies like Verizon, Sprint, and AT&T to survive;
• Substantial evidence exists to believe without T-Mobile, AT&T and Verizon Wireless would likely raise prices and mimic each others’ respective service plans, pricing, usage allowances, and network policies;
• Sprint will probably be forced to raise prices as a consequence of the merger to pay for increasingly expensive backhaul and roaming services, often purchased from AT&T or Verizon.  Sprint would also be pressured by market forces into pricing its services closer to AT&T and Verizon, if only to pay for handset and subscriber acquisition costs.  Sprint’s new customers often come from T-Mobile or smaller providers — less often from AT&T and Verizon.
• AT&T did not submit sufficient evidence to demonstrate the combination of T-Mobile and AT&T’s cell sites would substantially relieve congestion issues, especially in America’s largest cities where AT&T’s network issues are the worst;
• AT&T’s own documents suggest the company will fire most of T-Mobile’s customer service staff post-merger, leading ironically to the loss of a customer service support unit that has a higher customer satisfaction rating than AT&T itself.  Not only would T-Mobile customers be forced to deal with AT&T’s customer service, AT&T customers will have to compete with millions of T-Mobile customers for the time and attention of AT&T’s existing customer service representatives — a recipe for a congestion of a different kind;
• Much of the cost savings realized from the merger, earned from laying off T-Mobile workers, closing T-Mobile retail stores, terminating reseller agreements, and unifying billing, administration, and network technologies, will be realized by AT&T (and its shareholders), not average customers.  The end effect for consumers will be higher prices and a deteriorating level of customer service.

Smaller, scrappier carriers with aggressive pricing have historically forced larger companies like AT&T and Verizon to compete by lowering prices and offering more generous calling and data plans.

The report angered AT&T’s chief lobbyist, Jim Cicconi, who called its release “troubling” because, in his words, it represents a “staff draft” not voted on by the Commission as a whole.

“It has no force or effect under the law, which raises questions as to why the FCC would choose to release it,” Cicconi said in a statement. “The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.”

But the report’s substantial research suggests FCC staffers have taken a very close look at the arguments and the evidence submitted by AT&T, T-Mobile and opponents of the deal.  The findings only favor AT&T and T-Mobile with a mild agreement that combining resources in certain markets where both compete might reduce network redundancy.  But the cost to consumers is way too high, the report concludes.

Sprint couldn’t be happier with the report’s findings, saying in a statement:

“The investigation’s findings are clear. Approval of AT&T’s bid for T-Mobile would lead to higher prices for consumers, eliminate jobs, harm competition, and dampen innovation across the wireless industry.”

An unredacted copy of the findings will be available to the U.S. Department of Justice for its consideration as it presses its own legal case against AT&T to derail the merger on anti-competitive grounds.

Should T-Mobile remain independent, the FCC says wireless prices will decline.

Pay $160 a month... or $89.99

Time Warner Cable attached their new rate schedule to my November cable bill which arrived in the mail last week.  It’s the second major rate increase in western New York this year, and it means customers who just want to watch standard basic cable television will now pay $80.50 a month to do so.  We’re a long, LONG way from the $20 cable TV package the industry used to advertise as “less expensive than a cup of coffee a day.”  This is Starbucks’ coffee pricing, with no end in sight.

Time Warner Cable’s Triple-Play package of phone, Internet, and television service will now run $160.49 a month here in Rochester.  It wasn’t too long ago that a bill that size was reserved for the gas and electric company, or perhaps for a used car payment.  That’s before taxes, franchise fees, and other pad-ons, too.  Need that extra set top box?  Add another $7 a month each with remote control.  Want to speed up your broadband?  $10 a month for that.  HBO?  Time Warner Cable’s premium channel-pricing completely ignores today’s economic and marketplace (Netflix/Redbox) realities.

The cable company does have competition in the television business. In the same day’s mail was the latest offer from DirecTV, which has nearly as many sneaky extra fees as local phone company Frontier Communications.  That $24.99 a month “amazing deal” starts to snowball as you build a package, and it also means a satellite dish on your roof, which some people just don’t want.

Assuming you stick with the cable company’s triple play package, the sobering truth is that doing business with Time Warner at their everyday-high-pricing will cost you at least $1,920 a year.  But you don’t always have to pay them the asking price.

So with rate increase notice in hand, what can you do?

1. Call them up and tell them the relationship is over unless changes are made.  Good things come to those who wait for the other side of the relationship to start sacrificing for a change.  You’ve coped with rate hikes for years and cable companies keep shoveling more channels you never watch and then raise rates because of “increased programming costs.” This time, let the cable company give a little.  Call and tell them you want to disconnect your service two weeks from today.  A retention specialist will attempt to negotiate with you (starting with efforts to pare down your package, leaving you still paying regular price for fewer services).  Be non-committal,  because better deals will start to arrive by phone as early as a few hours after telling them you’re leaving.  (But you have to answer those unfamiliar Caller-ID calls to hear about them.)  The worst that will happen is you don’t win a significantly better deal. You still have two weeks to rescind the cancel request with no interruption in service and at least get something for your efforts.  Consolation prizes to sweeten a mediocre retention deal: free sample of premium channels, a free Turbo-class upgrade for Road Runner, and/or a break on DVR service.

2. Compare prices.  If you live in an area with telephone company-delivered TV, offer to stay with the cable company if they will match the new customer offers you are probably already getting pelted with in your mailbox.  Most will.  There are customers who literally bounce back and forth between AT&T/Verizon and Comcast/Time Warner Cable year after year just to keep the $89-99 triple-play promotional price that effectively never expires.  Getting your existing provider to match it saves you and your provider the time and hassle of switching.

3. Demand a new customer price.  Do a Google search for “Time Warner Cable deals” (or for your respective cable company) and at least a dozen offers will appear, mostly from third-party, authorized resellers.  Double-play offers for broadband and cable-TV often range between $75-85.  A triple play offer which adds phone service is usually just a few dollars more.  Some resellers pitch combo offers that deliver a discounted rate and a substantial rebate ($150), like the one below:

Ask Time Warner to match the price of these offers (you likely won’t get the rebate, however).  They certainly can come close on retention deals — in fact they will go as low as $85 a month for an annual triple play deal in some areas.

Some customers deal with intransigent retention agents by canceling service and quickly signing up as a new customer soon after.  That is more of a hassle, and some areas require a waiting period before they’ll offer a new customer promotion again, but the usual trick around this is to sign up under a spouse’s name.

It pays to shop around and read the fine print carefully.

For example, in the deal above, I highlighted three important features — the $150 rebate, which is important for reasons I’ll explain in a moment, the free DVR service, and “standard installation.”  In some cases, promotional offers for new customers do not include free installation or equipment, so it is always important to ask exactly what is included.  The $150 rebate will help defray those expenses, but some competing deals omit the rebate and knock $10 off the $99 monthly price for the same bouquet of services and installation is free.

1. Drop services you don’t need.  Still paying for premium channels?  Why?  Also check your bill for extra mini-pay tiers for certain HD channels Time Warner Cable dropped a few years ago.  You may still be paying $5 a month or more for channels like HDNet Time Warner replaced with the hardly-comparable RFD-TV.  Some customers who signed up for a discounted promotional offer for Time Warner phone service are now paying upwards of $30 a month for the company’s regular-priced unlimited long distance plan.  Consider switching to the $20 “local calling only” plan.  You can make those long distance calls on your cell phone or Google Voice and save $120 a year.

Time Warner, like every other cable company, understands the word “cancel” very well.  The best way to put an end to endless rate increases is to refuse to pay them and being willing to cut the cord until they get the message.

Shark-infested waters for AT&T and T-Mobile USA

Months after the U.S. Department of Justice announced its formal opposition to the merger of AT&T and T-Mobile, the Federal Communications Commission yesterday announced it would hold its own unusual “administrative hearing” to review the deal regardless of the outcome of a Justice Department lawsuit.

It has been more than nine years since the FCC last held such a hearing, which derailed the proposed merger of satellite TV providers DISH Network and DirecTV.  It is the clearest indication yet that regulators are deeply uncomfortable with the deal.

FCC Chairman Julius Genachowski waited for the Justice Department to announce its opposition to the deal before making his own concerns known.  The decision to pursue the special hearing, which won’t begin until 2012 and is likely to take several months, follows the lead of antitrust regulators at the DOJ.

It represents a nightmare scenario for AT&T, which has spent millions lobbying and promoting a merger with Deutsche Telekom’s T-Mobile USA.

An unnamed FCC official told The Wall Street Journal AT&T’s campaign has been playing fast and loose with the facts, particularly relating to claims the merger will create up to 100,000 new jobs. The official, who has seen confidential document filings from AT&T, says the phone company’s secret papers reveal the exact opposite — “massive job losses” if the deal gets approved.

Most companies confronting an FCC administrative hearing think long and hard about the prospects of the deal. Unlike an antitrust legal case, which must prove that a merger will substantially undercut competition, the FCC need only prove a deal is contrary to the “public interest” to reject it, a much lower hurdle.

When DirecTV and DISH failed to win a nod from the FCC for their merger, it fell apart.

Solomon

AT&T was testy after hearing the news.

“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs,” AT&T senior vice president of corporate communications Larry Solomon told the Journal. He added, “We are reviewing all options.”

A growing number of Wall Street analysts believe those options are dwindling by the day, and an all-out war by AT&T against regulators could come at a cost when the giant phone company brings other business before them. Genachowski is still willing to go to bat for AT&T, circulating a draft approval among fellow commissioners that would grant the company’s separate proposal to purchase $1.9 billion in additional wireless spectrum from Qualcomm, Inc.

Observers predict AT&T might offer to divest a larger portion of T-Mobile than it was originally comfortable considering.  That may ultimately prove less expensive than the alternative — paying Deutsche Telekom a breakup fee worth $6 billion dollars should the merger fail to succeed.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WSJ FCC Chief to Seek Hearing on ATT Deal 11-22-11.flv[/flv]

The head of the Federal Communications Commission will seek an administrative hearing on AT&T’s proposed $39 billion deal to acquire T-Mobile USA, according to a person close to the matter. Thomas Catan has details on The Wall Street Journal’s ‘News Hub.’  (2 minutes)