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.

Cox faces new competition in southern Nevada

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)

Knology's Shakedown in Lawrence

Pesky facts have a way of getting in the middle of silly marketing campaigns.  Knology of Kansas (actually Georgia) has run into this problem in a big way with its glitzy, carefully-crafted welcome website KnologyKnows.

Some of the company’s facts are uncoordinated.

Lawrence blogger Joe Davis sure noticed:

Knology put up a new website to help build their brand in Lawrence, Kansas. In big capital letters, they write:

Allow us to introduce ourselves. We’re Knology, the new (115-year-old) kid on the block.

Sounds eerily familiar to the beginning of “Sympathy for the Devil” by the Rolling Stones.  Trust me… I have no sympathy for the Devil (in this case, a non-local company), also known as Knology. Their website is called KnologyKnows.com. But considering how many “facts” they’ve put out this past week that have been wrong, they really don’t know.

[flv width=”640″ height=”253″]http://www.phillipdampier.com/video/Sunflower Broadband is Now Knology.flv[/flv]

Knology’s opening welcome video to residents of Lawrence, Kansas has some fact-checking problems. (1 minute)

Davis caught a fact-checking lapse in the company’s introductory video, which claims the world record for handshakes was 13,372.  Oops.  In 2002, while campaigning for office, soon-to-be Gov. Bill Richardson set a world record for the most number of handshakes in an eight-hour period: 13,392.

The only thing Knology has been good at so far in Lawrence is shaking down their customers with Internet Overcharging schemes.  The company has plenty of money to invest in promoting itself, but has so far retained Sunflower Broadband’s costly usage limits and overlimit fees.

Knology hasn’t been around for 115 years either — a company it bought out was.  The Interstate and Valley Telephone Company was one of many independent phone companies created to serve areas AT&T dismissed as rural backwaters not worthy of their service.  Knology itself has only been around since 1994, owned by ITC Holding Company — the people who also brought you Mindspring, a defunct Internet Service Provider sold to Earthlink one month before the dot.com crash.

Did you know Lawrence omits several states?

Davis is also unimpressed with the company’s sell-out of its customer support staff, many of whom will lose their jobs as part of the company’s “rightsizing” initiative.

For Davis, first impressions mean a lot, and Knology is doing themselves no favors.  Some of their other trivia isn’t always accurate, either:

This “fact” is told to anyone who first comes to Lawrence. However, it is wrong. Truth is, 14 states are missing from the Lawrence street grid. The first thing I did when I was told this in 2006 was to find where Connecticut street was located. The funny thing is… Of the 36 state streets in Lawrence, Georgia is not included. Knology is based out of Georgia. Whoops.

Davis says Knology has turned Sunflower’s well-regarded Twitter customer support account into an automated marketing spambot, spewing out continuous tweets telling customers to enter its giveaway and visit its newly branded website.

Stop the Cap! reader Brian, also from Lawrence, agrees with Davis.

“Knology has no concept of the truth in their marketing campaign. This is a scary test of things to come. Fortunately, we just switched to AT&T’s U-verse.”

Perhaps Knology should learn from the ghost of Mindspring, which used to have legendary customer service and a list of:

By filling out Knology's survey, you can give the company a piece of your mind over its Internet Overcharging schemes and possibly win this 32" Samsung flat panel TV.

The 14 Deadly Sins of Mindspring (a/k/a “the ways that we can be just like everybody else”)

1. Give lousy service- busy signals, disconnects, downtime, and ring no answers.
2. Rely on outside vendors who let us down.
3. Make internal procedures easy on us, even if it means negatively affecting or inconveniencing the customer.
4. Joke about how dumb the customers are.
5. Finger point at how other departments are not doing their job.
6. Customers can’t get immediate “live” help from sales or support.
7. Poor coordination across departments.
8. Show up at a demo, sales call, trade show, or meeting unprepared.
9. Ignore the competition, they are far inferior to us.
10. Miss deadlines that we commit to internally and externally.
11. Make recruiting, hiring, and training a lower priority because we are too busy doing other tasks.
12. Look for the next job assignment, instead of focusing on the current one.
13. Office gossip, rumors, and politics.
14. Rely on dissatisfied customers to be your service monitors.

Readers can share their views about Knology’s unjustified Internet Overcharging schemes and enter to win a 32″ Samsung flat panel TV in the process.  You need not be a customer to participate.  Just complete their survey, and be sure to let them know in the box labeled “other” that you will never do business with an Internet provider that doesn’t provide truly unlimited, full speed, flat rate broadband service.

[flv]http://www.phillipdampier.com/video/WOWK Charleston Frontier vs CityNet Pt 1 12-11-10.mp4[/flv]

DecisionMakers: Frontier vs. Citynet, Part One  (10 minutes)

Bray Cary

Bray Cary, who runs a Sunday news-talk-interview show on his network of West Virginia-based television stations, turned his attention back to the mediocre broadband picture across the state.  Once again, the “free market can do no wrong”-host showered attention and praise on Frontier Communications for their promises to improve West Virginia’s bottom-of-the-barrel rankings in broadband adoption, availability, and speed.  Only this time, one of his guests took him to school on why Frontier Communications is not the state’s broadband savior.

In this round, Cary invited Frontier’s senior vice president Dana Waldo and Citynet president and CEO Jim Martin to discuss where the state’s broadband is today and where it is going tomorrow.

The community of French Creek can't get Frontier broadband even after promising the company dozens of new broadband customers.

Cary wears his opinions on his sleeve, and he’s no fan of the Obama Administration’s broadband stimulus program, believing private companies will deliver West Virginia from its broadband doldrums. That’s wishful thinking Cary can afford as he browses the web from well-wired cities like Charleston.  But if you live in a community like French Creek in Upshur County, that talk isn’t going to get you broadband from Frontier or anyone else.  Stop the Cap! has heard from residents in the community who have delivered petitions from dozens of residents ready and willing to sign up for -any- broadband service, but Frontier hasn’t responded.

Martin opines that as long as stimulus money is available, using it to get the best bang for the buck could improve service for residents from the Panhandle to the Virginia border, instead of simply improving Frontier’s bottom line.

Cary did seem concerned that Frontier was ill-equipped to deliver service to all residents, regardless of cost.

Martin argues Frontier’s broadband network will do nothing to stimulate competition and bring better service.  Martin wants funds redirected into a robust middle-mile statewide backbone, preferably fiber-based, that is open to all-comers at reasonable wholesale pricing.  Citynet has been aggressively complaining about broadband stimulus grants in the state which seem to benefit a handful of companies and projects that don’t actually result in service to individual residents.

The reality is, Cary’s “free market” approach will not deliver service to tens of thousands of West Virginians who will never get wired because of “return on investment” requirements for service in the mountainous state.  Martin’s middle-mile mentality won’t bring access to the last mile, critical for wiring individual homes, either.  But one thing Martin does see that Frontier doesn’t — fiber is the future.

There is a third way to get service without waiting from Frontier’s 1-3Mbps service with an Internet Overcharging scheme or Martin’s middle-mile network that goes past your home but never stops there — petition your local government to empower itself and build a community-owned network that answers to residents, not to Frontier’s dividend-obsessed shareholders.

[flv]http://www.phillipdampier.com/video/WOWK Charleston Frontier vs CityNet Pt 2 12-11-10.mp4[/flv]

DecisionMakers: Frontier vs. Citynet, Part Two  (9 minutes)

A wireless ISP (WISP) serving parts of Michigan and eastern Iowa has informed customers that due to their enthusiastic use of the Internet, the company was slapping a 5GB monthly usage limit on customers effective Feb. 1.

SpeedConnect, based in Saginaw, Mich., informed customers in a letter that those who exceed the company’s new usage limit face a penalty overlimit rate of $2.00 per gigabyte.  An alternative 200GB “Platinum” monthly usage plan, including phone service, was also announced for $69.99 per month.

That’s a steep rate increase for customers accustomed to receiving around 3Mbps download x 384Kbps upload speeds for $39.95 per month.

Too much for our reader Greg, who says he has been a SpeedConnect customer for the last decade.

“Ouch,” Greg writes.  “I’m changing ISPs over this.”

Company officials blame the usage limits on usage growth.  The company’s letter states, “[growth] is forcing us to make substantial upgrades to our networks and to rethink the way we provide service to our customers.”

Now customers will rethink using SpeedConnect for their Internet access.

SpeedConnect's letter to customers.

SpeedConnect’s attempt to collect upgrade funds from their customers, which the company admits are increasingly turning to broadband for home entertainment and information, comes at the same time the company had no trouble dipping into the kitty to buyout CommSpeed of Arizona’s 2.5GHz spectrum holdings and customers based in Eastern Iowa.

Saginaw, Mich.

AT&T DSL is one alternative.

The same CEO that signed the letter telling customers to use less of their service or pay dramatically more was thrilled about “the exciting new chapter” its merger/acquisition would open.

“The completion of this acquisition is a significant event for our customers, communities, investors, and employees,” said John A. Ogren, President and Chief Executive Officer.

Saginaw residents are not well-served by AT&T, which has left major gaps in the economically-stressed region’s broadband coverage options.  We had a hard time finding landlines in Saginaw and nearby townships pre-qualified for AT&T DSL to offer a price comparison.  After much searching, we discovered AT&T heavily markets DSL Pro ($35/$19.95 new customer promo price for one year) which delivers 3Mbps/512kbps service, or Elite ($40/$24.95 new customer promo price for one year) which offers 6Mbps/768kbps service to those who -can- get the service.

AT&T’s Pro plan delivers comparable speeds at lower prices than SpeedConnect charges, all with no usage limits.  Users seeking higher speeds can use them without fear of overlimit penalties or a $70 broadband bill using AT&T’s Elite DSL plan.

SkyWeb is the other.

Greg also notes he has another wireless option, as do many residents and business across central Michigan’s Tri City area, from SkyWeb, which delivers wireless access at speeds ranging from 3-10Mbps.  The company does not limit usage and offers new customers a month of free service.  A comparable package of services from SkyWeb at 3Mbps is priced $10 less than what SpeedConnect charges.

Wireless ISPs have unique problems trying to keep up with usage demands:

1. Many are individually owned and operated and lack sufficient capital to invest in required upgrades to meet today’s Internet multimedia reality;
2. Many WISPs serve rural areas where growth opportunities are often limited;
3. A few very heavy users could create significant strains on a wireless network that is not infinitely expandable;
4. The arrival of competition from telephone, cable, or even cell-phone wireless data plans can present a major threat to the business plans of some providers.

[flv width=”384″ height=”236″]http://www.phillipdampier.com/video/WNEM Saginaw Air Advantage Broadband Grant 9-2010.flv[/flv]

WNEM-TV covered Air Advantage, another regional WISP that won a broadband stimulus grant last fall to expand wireless access in mid-Michigan.  (2 minutes)

Copps

A Statement from FCC Commissioner Michael Copps: The Lone Dissenter in Today’s 4-1 Decision Approving the Merger of Comcast and NBC-Universal:

Comcast’s acquisition of NBC Universal is a transaction like no other that has come before this Commission—ever. It reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land. It is new media as well as old; it is news and information as well as sports and entertainment; it is distribution as well as content. And it confers too much power in one company’s hands.

For any transaction that comes before this Commission, our statutory obligation is to weigh the promised benefits against the potential harms so as to determine whether the public interest is being served. There are many potential harms attending this transaction—even the majority recognizes them. But all the majority’s efforts—diligent though they were—to ameliorate these harms cannot mask the truth that this Comcast-NBCU joint venture grievously fails the public interest. I searched in vain for the benefits. I could find little more than such touted gains as “the elimination of double marginalization.” Pardon me, but a deal of this size should be expected to yield more than the limited benefits cited. I understand that economies and efficiencies could accrue to the combined Comcast-NBCU venture, but look a little further into the decision and you will find that any such savings will not necessarily be passed on to consumers. When they tell you that at the outset, don’t look for lower cable or Internet access bills. As companies combine and consolidate, consumers have seen their cable bills out-strip the Consumer Price Index by orders of magnitude.

Many of the new commitments that have been added aim no higher than maintaining the status quo. The status quo is not serving the public interest.

It is also claimed that the duration of the commitments made by Comcast-NBCU are longer than any that have been attached to previously-approved mergers. That may be true—but it is also true that power is patient and that big businesses can bide their time when they have to in order to reap the fullest harvest.

While approval of this transaction was from its announcement the steepest of climbs for me, given my long-standing opposition to the outrageous media consolidation this country has experienced over the past few decades, I did meet with stakeholders on all sides to make sure I understood their perspectives on the matter. And I worked to develop ideas to minimize the harms and to advance at least some positive public interest benefits. I know my colleagues worked assiduously on this proceeding, too.

Commissioner Clyburn, for example, worked successfully to achieve commitments from Comcast-NBCU to improve diversity, expand broadband deployment in unserved areas and increase broadband adoption by low-income households. The Chairman and his team, led by John Flynn, and many, many other members of the FCC team put more effort into this transaction than I have seen put into any transaction during my nearly ten years here at the Commission. I also salute the unprecedented cooperation between the agency and the Department of Justice.

Comcast's Online Toll Plaza

But at the end of the day, the public interest requires more—much more—than it is receiving. The Comcast-NBCU joint venture opens the door to the cable-ization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.

As for the future of America’s news and journalism, I see nothing in this deal to address the fundamental damage that has been inflicted by years of outrageous consolidation and newsroom cuts. Investigative journalism is not even a shell of its former self. All of this means it’s more difficult for citizens to hold the powerful accountable. It means thousands of stories go unwritten. It means we never hear about untold instances of business corruption, political graft and other chicanery; it also means we don’t hear enough about all the good things taking place in our country every day.

The slight tip of the hat that the applicants have made toward some very limited support of local media projects does not even begin to address the core of the problem. Given that this merger will make the joint venture a steward of the public’s airwaves as a broadcast licensee, I asked for a major commitment of its resources to beef up the news operation at NBC. That request was not taken seriously. Increasing the quantity of news by adding hours of programming is no substitute for improving the quality of news by devoting the necessary resources. Make no mistake: what is at stake here is the infrastructure for our national conversation—the very lifeblood of American democracy.

We should be moving in precisely the opposite direction of what this Commission approves today.

There are many other facets of the joint venture that trouble me. I worry, for example, about the future of our public broadcast stations. Comcast-NBCU has committed to carry the signals of any of those stations that agree to relinquish the spectrum they are presently using. Will public television no longer be available to over-the-air viewers? And, what happens when the duration of this commitment has run its course? Might the public station be dropped to make room for yet more infotainment programming? In too many communities, the public television station is the last locally owned and operated media outlet left. Public television is miles ahead of everyone else in making productive, public interest use of the digital multi-cast spectrum licensed to it.

Why in the world would we gamble with its future?

While the item before the Commission improves measurably on the program access, program carriage and online video provisions originally offered by the applicants, I believe loopholes remain that will allow Comcast-NBCU to unduly pressure both distributors, especially small cable companies, and content producers who sit across the table from the newly-consolidated company during high-stakes business negotiations for programming and carriage. Even when negotiations are successful between the companies, consumers can still expect to see high prices get passed along to them, as Comcast-NBCU remains free to bundle less popular programming with must-have marquee programming. Given the market power that Comcast-NBCU will have at the close of this deal over both programming content and the means of distribution, consumers should be rightfully worried.

In sum, this is simply too much, too big, too powerful, too lacking in benefits for American consumers and citizens. I have respect for the business acumen of the applicants, and have no doubts that they will strive to make Comcast-NBCU a financial success. But simply blessing business deals is not the FCC’s statutorily-mandated job.  Our job is to determine whether the record here demonstrates that this new media giant will serve the public interest. While I welcome the improvements made to the original terms, at the end of the day this transaction is a huge boost for media industry (and digital industry) consolidation. It puts new media on a road traditional media should never have taken. It further erodes diversity, localism and competition—the three essential pillars of the public interest standard mandated by law. I would be true to neither the statute nor to everything I have fought for here at the Commission over the past decade if I did not dissent from what I consider to be a damaging and potentially dangerous deal.