"Hey, we're #19!"

The United States may be a leader in many things, but broadband isn’t one of them. The country has now fallen two more positions — to 19th place, behind South Korea, Sweden, Denmark, the United Kingdom, and even Iceland, since the Berkman Center for Internet and Society released its last rankings in 2009.

In 2004, President George W. Bush complained about the U.S. falling to 10th place, which he declared was “ten spots too low.”

Now eastern Europe and former Soviet Republics in the Baltics threaten to overtake the United States, and countries in southeast Asia already have.  Innovation in the United Kingdom, Australia and New Zealand means deploying fiber to the home service to the vast majority of the population.  Innovation in North America means conjuring up new pricing schemes to raise prices on broadband service and engage in competition-busting mergers and acquisitions.

But a USA Today editorial this week also places much of the blame on corporate influence inside Washington, which has promulgated legislative policies that favor telecommunications companies and throw customers under the bus.

“The simple answer is that other countries have policies that promote competition and innovation,” the editors write. “In contrast, policies here have allowed a few dominant players that control the least interesting parts of the broadband landscape (the cables and the wireless spectrum) to dominate.”

Indeed, a series of telecommunications laws enacted by Congress, combined with short-sighted policies at the Federal Communications Commission, have allowed a handful of super-sized players to own and control broadband service in America, resulting in providers establishing non-competing fiefdoms that avoid head-on competition.

The worst policy of all allowed broadband providers to keep competitors from reaching customers over existing broadband networks.  During the days of dial-up, you could purchase Internet access from the phone company, a large provider like MSN or AOL, or thousands of smaller regional and local service providers.  Simply dial a local access number and you were connected to the provider of your choice.  Now, U.S. law gives broadband network operators the right to restrict these independents from selling service over their networks.  Comcast need not sell anything other than Comcast Internet.  Frontier Communications can make a killing selling its own DSL service, while protecting that revenue from other Internet Service Providers who might sell the service over Frontier’s network for half the price.  Time Warner Cable voluntarily allows Earthlink and a handful of other companies to sell cable broadband service over its infrastructure, but at prices equal to or higher than what Time Warner charges itself.

Broadband providers argue that allowing competitors to sell service on their network would discourage future investment and rob shareholders a return on investments already made.  Today, major cable operators and phone companies are falling all over themselves denying they are in anything but the broadband business.  It has become an enormously lucrative enterprise, more profitable than television or telephone service.

USA Today compares the broadband landscape back home with that in South Korea — perennially the world’s fastest, and considerably less expensive than what North Americans pay for service:

South Korea has made broadband a national priority, mandating deployment and in some cases giving private companies incentives to build out. It has also prevented major players from monopolizing their businesses, encouraging competition and innovation. In South Korea, consumers can get broadband service from a cable or telecom company. But they may also choose among myriad independent providers that are given access to the physical infrastructure. This competition keeps prices down and the quality of service high.

[…] But over time, cable and telecom companies worked the courts and Congress to make sure that this competitive world would never come to be [in the United States]. […] Wireless is a bit better. But the market has remained a near duopoly, with none of the smaller players emerging as a strong competitor to AT&T and Verizon.

The same open network concept has fought its way forward in Canada (where Bell has worked furiously to sabotage the business plans of independent providers) and in the United Kingdom, Australia and New Zealand where all three governments have decided the best solution would be to scrap the ancient landline network and start fresh with an open-to-all-comers fiber to the home service.

Back home in the States it is business as usual with increasing broadband prices and the looming prospect of usage-limiting schemes designed to cut capital costs, monetize broadband usage, and stop cord-cutting.

The opposing point of view comes courtesy of dollar-a-holler, corporate-backed think tank The Heartland Institute, who is stuck quoting notorious industry-funded studies and think tanks like the Discovery Institute and the Technology Policy Institute:

The idea that European and Asian countries are lapping America in the race for broadband speed and penetration is a fallacy created with statistics comparing “persons” instead of “households.” Once you make that correction, the USA is firmly planted among the top of industrialized nations, as economist Scott Wallsten pointed out when he was a staffer at the Federal Communications Commission in 2009.

And as tech researcher Bret Swanson of Entropy Economics points out, if you measure Internet usage by gigabytes used per month — a better measure of the speed and utility of networks — the USA has nearly lapped Western Europe once and Asia twice.

Heartland Institute: "By not disclosing our donors, we keep the focus on the issue."

If you measure how many mouse clicks customers in New York make on a Thursday afternoon, we could be number one as well!  Gigabytes used per month does not measure the speed or price of service on broadband networks, considerations that actually do impact broadband rankings.

Mr. Wallsten is a familiar favorite go-to-guy for The Heartland Institute.  He’s also the choice of Time Warner Cable, who paid him $20,000 for a 2010 essay: “The Future of Digital Communications Research and Policy.”

There is big money to be made writing corporate-funded research reports.  Bret Swanson knows that very well, having been involved with the Discovery Institute, a “research group” that delivers paid, “credentialed” reports to telecommunications company clients who waive them before Congress to support their positions.  Swanson is also a “Visiting Fellow” at Arts+Labs/Digital Society, which counted as its “partners” AT&T and Verizon.

The gentleman from Heartland also quotes from the misnamed “Progressive Policy Institute,” which counts among its funding partners, AT&T.

It would have been probably easier (but ineffectively transparent) to simply quote from AT&T and Comcast directly.

The Heartland Institute, unsurprisingly, believes letting existing broadband providers deliver service exactly the way they want is the best option:

The digital economy — one of the only vibrant economic sectors left — doesn’t need more government “investment” or regulation. It needs only for government to butt out and let the market work the magic that continues to bring us the marvels of the modern age.

That magic will cost you $50 a month and rising.  If some providers have their way, while the rest of the world abandons usage caps, American providers can’t wait to slap them on, reducing the value of your service even further.

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.

FairPoint Communications is under fire for counting customers “broadband ready” when, in fact, they can’t buy DSL service from the northern New England phone company at any price.

One of the commitments FairPoint made to regulators who approved their buyout of Verizon landlines in Maine, New Hampshire, and Vermont in 2007 was that the company would expand broadband availability to at least 87 percent of residents in states like Maine.  In October, FairPoint claimed it had met that target, but now the Office of the Public Advocate has found instances where the phone company counted customers who live too far away from the phone company’s facilities to buy the service as “served.”

FairPoint is apparently counting most customers within a DSL-equipped exchange as reachable by broadband, even if only some of them actually are.  The rest either live too far away to get proper broadband speeds, or are connected to inferior lines that will not sustain a serviceable connection.

Maine’s Public Utility Commission (PUC) is upset FairPoint seems to be padding the numbers in its favor.  Maine’s Public Broadcasting Network talked with commissioners:

“I just find it hard to reconcile that it’s in the public interest to include in the definition of addressable lines, a line on which no customer can be connected and to which Fairpoint has made no planning or economic commitment to serve in the future,” said Vendean Vafiades. She, along with fellow commissioner David Littell, voted in favor of a decision which is likely to require Fairpoint to re-calculate the 87 percent figure using a stricter methodology.

“And I do believe that Fairpoint has a commitment to be economically viable in this state and to provide good quality service. And at a minimum I think Fairpoint should be required to provide actual access to meet its merger condition and obligations,” said Vafiades.

The holdout vote was that of PUC Chairman Tom Welch, who sympathized with Fairpoint on this issue.

The vote in Maine is likely to force FairPoint, which had hoped it was “all done” fulfilling broadband obligations, to spend more to upgrade its network to sufficiently service customers it promised it would.

FairPoint defends their interpretation of the numbers, noting the company has spent more than $169 million across their northern New England territories on broadband, making good on their commitment.  The state’s consumer advocate and PUC disagree, so now all parties will be re-evaluating their numbers, and FairPoint customers still waiting for DSL might still have a chance to get it after all.

Maine’s Public Broadcasting Network reports on the controversy over FairPoint’s promise to serve at least 87% of Maine with broadband service. Maine’s public utility commissioners voted to ramp up the pressure on Fairpoint Communications with regard to their broadband rollout. The expansion of high-speed internet to most areas of Maine was one of the conditions of Fairpoint’s purchase of Verizon’s former landline operation in 2007. (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

CenturyLink announces their own Internet Overcharging scheme; customers call to cancel their service.

CenturyLink is quietly introducing usage caps for its broadband customers that will limit residential customers to between 150-250GB of usage per month.

The Internet Overcharging scheme was inserted into the company’s High Speed Internet Service Management disclosure page, and suggests heavy users are using an inappropriate amount of data, slowing down the network for other users:

The majority of CenturyLink High-Speed Internet customers make great use of their service and comply with the CenturyLink High-Speed Internet Subscriber Agreement. An extremely small percentage use their service excessively, or at such extreme high volumes, that they violate the terms of their CenturyLink High-Speed Internet Subscriber Agreement. While this high volume use is very rare, CenturyLink is committed to helping these customers find a high-speed Internet solution to better meet their needs.

CenturyLink is announcing the following Excessive Usage Policy (EUP), which will become effective in February 2012:

CenturyLink’s EUP applies to all residential high speed Internet customers and is only enforced in the downstream (from Internet to customer) direction. Video services provided by CenturyLink PRISM™ TV are not subject to the usage limits. The policy has the following usage limits per calendar month:

• Customers purchasing service at speeds of 1.5Mbps and below, have a usage limit of 150 Gigabytes (GB) of download volume per month.
• Customers purchasing service at speeds greater than 1.5Mbps, have a limit of 250GB in download volume per month.

There are no overage charges or metering fees for usage as part of the Policy.

The company exempts their own video service PRISM TV from the scheme.

“It’s another CenturyLink ripoff in action, and despite their claims that they treat all data the same, they certainly do not,” says CenturyLink customer Rob Cabella. “Their video programming is sent from local facilities, as data, down the same pipe as their broadband service, yet they conveniently leave their TV product out of the usage cap equation.”

Prism customers can watch unlimited TV, but face limited broadband usage over the exact same pipeline.

Cabella says PRISM operates much like AT&T’s U-verse.  Fiber provides service into individual neighborhoods and then standard copper phone lines deliver service the rest of the way to customer homes.

“It’s one pipe they divide up for video, phone, and Internet, but they are protecting their video service by limiting broadband use while leaving their television and phone service completely unlimited,” Cabella says.  “Video is the biggest bandwidth hog of all, and CenturyLink invites you to watch as much as you want, as long as it comes from them.”

Cabella thinks the very fact CenturyLink is offering unlimited video disproves their argument about ensuring appropriate levels of broadband usage.

“Their local facilities get overloaded to the point where they temporarily stop signing up customers, yet it’s a video free-for-all, as long as you get your video from ‘the right place’ and that sure isn’t Netflix or Hulu,” Cabella notes.

CenturyLink’s limits will apply to broadband customers signed up for PRISM or the company’s traditional DSL service.  Uploads will not count against the cap.

For the moment, overlimit fees will not be charged and the company will send warning letters to offenders that invite customers to migrate “to a higher speed if available or to a business grade data service that better fits their bandwidth usage.”

Customers who repeatedly exceed their usage limits after being notified may have their service discontinued.

Cabella isn’t waiting.

“I called my local cable company which still offers unlimited service and signed up this morning,” Cabella says. “CenturyLink didn’t even know what I was talking about when I called and said their website must have been hacked or in error.  Why would I want to do business with a company that doesn’t even have a clue what their own business is doing?  Goodbye CenturyLink.”

Campbell

A commissioner on the Louisiana Public Service Commission accused Gov. Bobby Jindal of sabotaging a now-rescinded $80 million dollar broadband improvement grant for the benefit of the state’s largest telecommunications companies.

Public Service Commissioner Foster Campbell publicly berated the Republican governor for intentionally interfering with the project until time ran out and the government withdrew its funding.

The cancellation of the project has proved embarrassing because it is the first and only time a state has lost federal broadband grant money.

“We want to know what the heck happened; we’re the only ones in the country that dropped the ball,” Campbell said. “I meet with people in every parish, and the number one priority by far is high-speed Internet, and how do you lose $80 million coming from the federal government to do that. How do you drop the ball, and if they did drop the ball was it because someone whispered in their ears, ‘it’s going interfere with big companies?'”

Campbell suspects the state’s largest phone and cable companies lobbied the governor’s office for changes in what was originally proposed as a public broadband network reaching large sections of rural Louisiana that do not have broadband access.

The state’s Division of Administration eventually scrapped plans for the public broadband network and replaced it with a proposal to use grant dollars to purchase long term institutional broadband contracts from private providers.  AT&T is the dominant local phone company in Louisiana — the same company that has steadfastly refused to provide DSL service across rural Louisiana. The new proposal would have not delivered any broadband access to individual Louisiana homes, only to institutions like schools, libraries, and local government agencies.

In Campbell’s eyes, the grant represented a competitive threat and seeing it dead and buried was the governor’s special favor to Big Telecom.

“I think they threw a little dirt on this one or a lot of dirt on it,” Campbell told the Tulane Hullabaloo.

Jindal himself admits his administration did get directly involved in changing the project’s course.

The governor called the revised private provider-focused project “a reasonable approach that would have expanded broadband access and not hurt private providers.” Jindal attacked the public broadband network originally planned by the Louisiana Broadband Alliance as “a heavy-handed approach from the federal government that would have undermined and taken over private businesses.”

With the $80 million dollars back in the hands of the federal treasury, Jindal is now blaming the Obama Administration for taking the money back.

The Louisiana Broadband Alliance, a collaboration among six state agencies, would have deployed more than 900 miles of fiber-optic network to expand broadband Internet service in some of the most economically distressed regions of Louisiana. The new network intends to provide direct connections for more than 80 community anchor institutions including universities, K-12 schools, libraries, and healthcare facilities. The 3,488-square-mile service area includes 12 impoverished parishes targeted by the state’s Louisiana Delta Initiative and a separate five-parish area that is home to four federally-recognized American Indian Tribes.