Australia’s planned National Broadband Network (NBN) delivering the country access to broadband speeds up to 1Gbps face many of the same criticisms American municipal providers hear when incumbent commercial providers face imminent competition from fiber broadband.

But nobody can top the venomous spray of Exetel’s CEO John Linton, who called the entire concept of public broadband for the public good “a load of crap” and those behind it a mix of ‘thugs,’ ‘pretenders,’ and generally incompetent and stupid.

Linton’s Internet Service Provider delivers broadband to most of its customers over Telstra landlines, using DSL.  But the company has grudgingly agreed to participate in the NBN project, even while still despising it to the core.

Exetel’s pricing on NBN’s fiber network charges for speed and usage.  Much like cable broadband, Exetel delivers much faster downstream speeds (up t0 100Mbps), with upload speeds maxing out at 8Mbps. The higher the speed, the higher the monthly access fee.  Users receive no usage allowance, paying fees per gigabyte for all of their usage.  Exetel still reserves the right to throttle customer speeds for certain online applications, and “traffic shape” users based on their usage.

In Tasmania, Exetel has introduced a 25/2Mbps broadband plan with no usage allowance — but no monthly access fee either — charging a flat $2 per gigabyte of usage.

Exetel Fiber Pricing In Tasmania

Plan	Speed Down	Speed Up	Monthly Access	Download Charges	Upload Charges	Contract Length	Usage Allowance
A	25 mbps	2 mbps	$0.00	$2.00 per GB	Nil	12 Months	None
B	50 mbps	4 mbps	$25.00	$1.00 per GB	Nil	12 Months	None
C	100 mbps	8 mbps	$50.00	$0.75 per GB	Nil	12 Months	None

Linton spews most of his angry commentary on his personal blog, which he closed to non-Exetel customers unless they made a $20AUS contribution to the company’s endangered wildlife protection programs.  But he rarely pulls punches in public either.

A sampler:

With wireless broadband waiting in the wings, those excited by NBN’s 1Gbps speeds are “unthinking and just plain stupid, pretty much along the same lines as the stone age cargo cult dwellers in the jungles of New Guinea are excited about the next ‘goods drop’ from the strange colored bird.”

Australia’s aging population, “who don’t play computer games or get a surrogate sex life from pornography” have zero interest in getting terabyte broadband speeds, making the whole endeavor a giant waste of money.

“The number of people who want 100Mbps are almost none today and aren’t going to be very many in five years time.   Probably 40-50% of people today will never want to use a piece of fiber […] and they’re certainly not gamers playing, or those other things.  They’re the other half of Australia that has a life rather than a half life.”

On the results of the recent election and the decision to move forward with the NBN: “God help us all.”

On Communications Minister Stephen Conroy (Australia’s version of FCC Chairman Julius Genachowski): “He was his usual mixture of bewilderment, ignorance and barely concealed thuggery, but I was amused at his reference to Exetel (not by name).” Linton wrote on his blog. “While I’m grateful for the ‘free plug’ I thought it was an obvious example of “straw clutching” if it wasn’t based on appallingly bad briefing, which I would doubt, because for him to have been aware of any actual pricing would have required some sort of briefing,” added Linton.

On NBN co-chief Mike Quigley, who will help manage NBN service: “Is [Mike Quigley] god? Can he reverse 100 years of telecommunications going one way and say, ‘Oh, I’m Mike Quigley, and I haven’t worked here in 30 years, I know nothing about running major networks, but someone has paid me $2 million a year so I can pretend I can’.  The only one who can do it is Telstra. It would do it cheaper than a bloody government.”

Linton blames all of the talk about a publicly-owned broadband network for the decrepit state of Australia’s commercial broadband market, claiming it dried up private investment in new ADSL products: “The situation as I see it is that the suppliers — Telstra, Optus, AAPT — are not really investing in anything new, especially when you’re referring to ADSL type broadband products. The current suppliers are holding on to the margins they have at the moment, and if anything they will seek to increase them rather than reduce them,” says Linton.

Since nearly every broadband user in Australia knows Linton hates fiber broadband, what technology does he believe represents Australia’s future?

3G wireless.

“Most people that I know, including me, put a much higher priority on mobility than they do on speed,” he told ZDNet. “The average person needs a 100Mbps internet connection about as much as they need to have their arms amputated.”

While mobility is important, his critics charge, there is no way 3G wireless can deliver Australia its broadband future.  Service is not ubiquitous across the country, speeds are far below even what DSL offers, streaming multimedia is challenging at best, and the usage fees and limits that accompany wireless service plans in the south Pacific would create an even greater divide between those who can afford wireless broadband, and those who cannot.

A report released yesterday by the Bureau of Statistics shows Australians are downloading more data than ever before, increasing more than 50 percent in the second quarter compared to the same period last year. The amount of data downloaded every three months is now 11 times higher than March 2005 and 126 times higher than March 2002.

Australia’s National Broadband Network is open to all Internet Service providers that wish to participate, reselling their broadband plans using NBN’s infrastructure.

AT&T unveiled it’s U-verse system Monday in the Triad region of North Carolina, hoping to poach customers from Time Warner Cable’s “triple play” package of phone, broadband, and cable service.

AT&T U-verse services, which are delivered over AT&T’s Internet Protocol (IP) hybrid fiber-copper network, offer an alternative to cable with a DVR that can record more programming than the competition, features and apps not available from the local cable company, and additional channels new to the region. AT&T U-verse can combine every AT&T service a customer subscribes to onto a single monthly bill.

The most popular Internet-only tier of service has somewhat anemic download speeds up to 6 Mbps for $43 a month — other packages range from $38 for 3 Mbps to $65 for 24 Mbps.

U-verse TV packages include “local-channel only” service for $19 a month (with a stinging $199 installation fee), to more than 390 channels for $112 a month, with a $29 activation fee.  Other packages include U-100 with 130 channels for $54 a month and U-200 with 230 channels for $67.  High definition channels, now numbering more than 130, cost $10 extra per month.  Want premium channels in HD?  That’s another $5 a month.

Like other providers, AT&T has tinkered with pricing to deliver the most savings to customers who bring all of their business to AT&T with a triple-play bundle subscription.

“Today’s expansion of AT&T U-verse reflects our commitment to make the investments necessary to bring consumers across the Piedmont Triad a new era of true video competition,” Cynthia Marshall, AT&T North Carolina president said in a statement. “Local residents have asked for more choices in television service and today we’re delivering.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/ATT U-verse introduction.flv[/flv]

Watch this comprehensive video from AT&T explaining the many types of services U-verse offers and helpful tips to prepare for service installation.  Then view an actual installation in a customer’s home who shows off the equipment.  Stop the Cap! recommends you let AT&T do all of the required wiring for you.  That’s why you are paying that installation fee!  (22 minutes)

But despite the company’s claims that competition will deliver lower prices for consumers, the evidence suggests otherwise.

AT&T credits a statewide video franchising bill passed in the North Carolina legislature for making U-verse possible in the state.  Company officials showed their thanks by inviting the two state legislators instrumental in shepherding AT&T’s agenda through the General Assembly to be on hand to take credit for introducing cable competition in the state.  They also publicly thanked them in their press release.

Seventeen term House Rep. Harold Brubaker (R-Randolph) congratulated AT&T for its accomplishments.  Brubaker received $4,000 in campaign contributions from AT&T in the first quarter of 2010.

The representative from Asheboro co-sponsored the 2006 Video Service Competition Act which stripped local oversight of cable operators and made AT&T’s entry into North Carolina effortless.  For other would-be competitors, especially municipalities seeking to build their own fiber networks, Brubaker has been far less helpful.  Most recently, he voted against an effort to bring broadband service to Caswell County in areas incumbent provider CenturyLink has ignored for years.

“Prior to the legislation, you had geographic areas where you operated in, so it kind of like took the walls down. The legislation took the walls down to allow for more direct competition for the consumer. Competition is great.  The consumer’s the one that benefits,” said Brubaker.  “AT&T’s presence in the market will very definitely save customers money.”

Rep. Alma Adams (D-Guilford), another co-sponsor, said AT&T’s arrival was exactly what she hoped for when she supported the legislation.

“As policymakers, our goal was to increase investment in North Carolina and give consumers more choices and innovative new services,” said Adams. “Today’s announcement makes that goal a reality for Triad residents.”

Adams added that AT&T U-verse also provided a safety valve for consumers who want an alternative to incumbent provider Time Warner Cable.

“Even if they like a particular company, they always like to know that there’s some other opportunities out there that they can look at as well, so they can do some comparing,” she said.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Important Information about ATT U-Verse system.flv[/flv]

AT&T delivered more time and attention to North Carolina legislators at their launch event than they ever will on U-verse.  AT&T segregates Public Access, Educational, and Government channels on a single U-verse TV channel that makes for tedious viewing.  Watch this demonstration from the California Public Utilities Commission.  (4 minutes)

AT&T announced the service would initially be available in limited areas of Forsyth, Davidson, Guilford, Rockingham and Alamance counties, and we do mean “limited.”  Many Triad residents who checked to see if the service was available in their area found it was not.  In fact, AT&T refuses to disclose exactly how many customers in the region can actually sign up for the service.  We couldn’t find anyone who could order the service when it officially launched.

“There will be small pockets around most of the entire area,” Chuck Greene, AT&T’s regional director for the Piedmont Triad told the News-Record. “Once we complete the build-out, it will include parts of Davidson, Caswell and Randolph.”

AT&T lobbied hard to sweep away earlier provisions in local video franchises that committed providers to rapidly expand service to every possible customer in their respective service areas.  Under the Video Services Competition Act, AT&T can take its sweet time, perhaps for years before service becomes widely available across the region.  Some areas will never receive the service.

Time Warner Cable welcomed competition from AT&T U-verse.

“For a long time, Time Warner Cable has faced competition from satellite and dish providers,” Scott Pryzwansky, the company’s local public affairs manager, wrote to the News-Record. “We continue to invest in our network and remain committed to bring the best products and services to the Triad. We are confident we will maintain positive relationships with our customers.”

Time Warner Cable has little to fear from AT&T’s arrival.  Pryzwansky said Time Warner Cable has not lowered its pricing in any of the markets where it faces AT&T U-verse competition.  Both AT&T and Time Warner Cable have raised prices at least annually for their respective subscribers.  The only exception in North Carolina has been in Wilson, where municipal provider Greenlight has kept Time Warner Cable from increasing prices.

Stop the Cap! reader Sam in Greensboro thinks AT&T’s arrival is much ado about nothing.

“AT&T prices their U-verse service nearly the same or more as Time Warner Cable, especially after the introductory rate expires,” he says.  “Few people are going to be bothered switching back to Time Warner after the year is up, so they’ll be paying the same high prices for cable service to AT&T instead of the cable company — a distinction with no difference.”

Sam won’t bother with U-verse because he is disgusted with AT&T’s lobbying efforts to stop consumer broadband reform and Net Neutrality.

“It’s like dealing with the devil,” Sam writes.  “Why would I want to pay AT&T my money so they can turn around and spend it working against my interests as a consumer?”

The only good thing about U-verse’s arrival is that it may stall Time Warner Cable from trying another Internet Overcharging scheme in the area.

“Time Warner has to think twice about another usage cap and overlimit fee ‘experiment’ in the Triad if customers can simply flee to U-verse, although knowing AT&T they’d love to have the same rationing of the Internet they force on their wireless customers,” Sam said.

[flv width=”636″ height=”373″]http://www.phillipdampier.com/video/TWC Fights Back U-verse.flv[/flv]

Time Warner Cable maintains a sometimes-bizarre web campaign to convince customers not to switch to U-verse or satellite.  We’ve put together the various videos so you can watch them all at once.  (4 minutes)

Like Time Warner Cable, AT&T does not offer a-la-carte cable programming, either.  Customers can only choose from large packages of programming, not individual channels.

Triad area cable customers told local media they were tentatively glad U-verse is competing, but many are taking a wait and see approach as to whether they’ll actually see any savings.

WFMY News 2 spoke with cable customers today. One man said he feels like a “hostage” to his cable company because they have a monopoly on TV, Internet and phone bundles. A woman said cable and satellite companies drive her “crazy,” so she gave up and now simply rents movies.

“I am happy, but it’s hard times. I have three children. We live on one income,” Jamie Rettie, a Time Warner Cable customer told News 2. Whether she switches to AT&T or not, she’s said she’s hoping for a change in her bill.

“Hopefully they’ll keep competing against each another and have better and better prices for their services,” she said. “(I’ll) wait out my contract and we’ll see what happens.”

Some residents, like Thomas, are left picking the lesser of two evils:

“I don’t know who’s worse at their game, as Time Warner Cable and AT&T are both evil corporate entities that care only about their bottom line,” he writes. “Search the Internet and understand this service limits the amount of TV’s that can be used at one time.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Greensboro Media Cover U-Verse Launch 9-13-10.flv[/flv]

Watch several news reports from Triad area TV stations about the introduction of AT&T U-verse.  In order, we include reports from WXII, WGHP, and WFMY-TV.  (7 minutes)

In many communities across America, there is more fiber optic cable on telephone poles and buried in underground conduit than you may realize.  But as a consumer, you’ll never get to benefit from it because of a broadband duopoly that works hard to keep municipal fiber networks away from your home and out of your reach.

Take Sarasota County, Florida.  The county is making preparations to build a 96-strand fiber network across the county, capable of delivering 100Gbps service over each strand, and early plans suggest they’ll use it for… controlling traffic signals and viewing traffic cameras.  Taxpayers are ultimately paying the costs to construct the $1,000-per-mile fiber network, but current plans won’t allow any of them to access it.

Why?  Because companies like Comcast and Verizon want it that way.

It’s nothing new and it’s not limited to Sarasota.  In cities across the country, enormous capacity networks are devised and constructed to deliver high speed data connections to local hospitals, schools, and public safety institutions.  Many states’ transportation departments have enormous excess fiber capacity, installed from federal and state grant money to develop intelligent traffic systems.  But almost all of these networks are strictly off-limits to the general public and small business entrepreneurs who are stuck with the far slower broadband service the phone and cable companies deliver at ridiculously high prices.

Sarasota has had ultra-fast connections for years, delivering a dedicated 10Gbps connection to one area hospital and insanely fast connections to police departments and other government buildings.  It’s managed by Comcast and was built for $3 million, paid for directly by Comcast subscribers.  Comcast built the county I-Net network with the understanding that commercial use of the network was strictly prohibited.

The result is blazing fast speeds for institutions that can’t possibly utilize all of the capacity they have, and a broadband cartel delivering less service than local residents and businesses need.

The Sarasota Herald-Tribune considered the county’s fiber future so important, it dedicated a week of coverage to municipal fiber, and the providers and politics that get in the way.

The newspaper reports that the existing broadband duopoly under-delivers access to digital entrepreneurs that need those speeds the most.

The co-called creative class — bandwidth entrepreneurs on a budget — struggle to get by on mediocre connections that are largely repackaged retail offerings.

Over and over, businesses surveyed by the Herald-Tribune pointed to the tell-tale distinction between business-class service and retail.

“Businesses upload stuff, while consumers download,” said Rich Swier Jr., who works from a Central Avenue office where the only service comes from Comcast. Swier, the only entrepreneur on the Sarasota Broadband Task Force, is not happy with what he gets from Comcast. “They are repackaging a consumer grade service as a business service and charging three times more.”

Swier is paying about $200 per month for what is supposed to be 50 megabits per second download and 5 megabits up. But in reality, it operates at half those speeds, he said.

The newspaper’s conclusion: Fiber access is to modern business what train stations and interstate connections used to be.

Sarasota’s fiber project has grown considerably since its original proposition — 24 strands of fiber installed for $11 a foot. Then the county received an estimate that said they could have triple the amount of fiber for just 20 cents more per mile.  Broadband enthusiasts urged the county to upgrade the network to 96 strands and they agreed.

Commissioner Jon Thaxton told the newspaper he views the planned fiber network as an insurance policy as Internet speed becomes more and more important.

“It does, at a minimum, put us in a position of not being wholly dependent on some other service provider,” Thaxton said.

The newspaper notes the economic implications of superior broadband are enormous.

Google sparked the issue when it announced plans earlier this year to hot-wire a city or cities somewhere in the United States, creating what could be a prototype for a community with the broadband speeds to more than command its economic future.

Our political leaders clearly saw the import of this. Heck, City Commissioner Dick Clapp even jumped into a shark tank to show Google the community’s spirit (yeah, they were pretty small sharks, but I wouldn’t do it, fiber or no fiber).

Businesses of the 21st century are hungry for fast speeds, and this region has been fortunate to land some with voracious appetites.

[…]Who would have pegged Lafayette, La., as a place where Hollywood would set up a first-rate special-effects studio? (Can you say the Walt Disney Co. as a customer?) But the fiber was there, and the big dogs came.

South of us, in Naples, it is private enterprise driving high-octane broadband, the work of a technology-savvy entrepreneur and a like-minded group of millionaires who want what many of us raising families in Southwest Florida are after: an economy that would allow our kids to remain here with good jobs.

In the Information Age, connectivity is going to be critical in attracting the kind of companies we want, and the well-heeled folks in Collier County know that. (They also clearly know how to make a lot of money, so don’t read their efforts too much as altruism).

Then you have one of the new 800-pound gorillas of the fiber effort, Allied Fiber, a New York-based company in the midst of creating a trans-continental broadband push akin to what the railroad barons of the 1800s accomplished.

Southwest Florida has a good chance of tapping into their $500 million (or more) play.

The county established a Broadband Task Force, but made the same mistake so many other municipalities make when they create these panels: consumers are not represented at all and small business representation is limited to a single participant. Consumers will ultimately be a major source of revenue from municipal broadband projects and their needs and interests must be represented.  Since incumbent commercial providers will seek to impede municipal competition by organizing consumer opposition to such projects, getting trusted consumer advocates and broadband evangelists on your side at the outset can make the difference between enthusiastic support for additional broadband choice or a mind-numbing, incumbent provider-driven sideshow about a “socialist government takeover of the Internet.”

The rest of the panel is made up of public officials from the school district, county and city government and the local hospital.

The newspaper hints these are exactly the wrong people to invite onto a Broadband Task Force.  Virtually all already enjoy the generous bandwidth already provided by Comcast’s I-Net, few are likely to be well informed on broadband technology issues, and apart from the lone businessman on the panel, the group is unlikely to grasp the commercial implications of better broadband for the local digital economy.

Since these individuals all earn a paycheck protecting their own institutional interests, the larger vision of community broadband can easily get lost in turf wars and political disputes, or interference from incumbent providers.

Providers can cut the bottom out of such task forces with rewarding side deals for friends — enhanced services at fire sale prices. For institutional opponents — intransigence and crippling rate increases.

On Florida’s East Coast, Martin County’s public service institutions learned first hand what kind of pricing Comcast is capable of bringing to the table when an existing contract expired.  Comcast demanded a whopper of a rate hike.

“We decided for the kind of money these people are asking us, we would be better off doing this on our own,” Kevin Kryzda, the county’s chief information officer, told the Sarasota paper. “That is different from anybody else. And then we said we would like to do a loose association to provide broadband to the community while we are spending the money to build this network anyway. That was unique, too.”

The last straw for county officials was the loss of a lucrative deal with California-based Digital Domain to build a Florida branch campus.  The company chose St. Lucie County instead.  John Textor, Digital Domain’s co-chairman, told the Herald-Tribune that having a local all-fiber network connection and being able to set up an all-fiber direct connection to remote servers in Miami was a key advantage of the site in Port St. Lucie.

After that, Martin County commissioners voted unanimously to obtain bids for their own network.

Martin County’s fiber network will combine a publicly-constructed institutional network and a tiny rural phone company paying part of the costs to resell excess capacity to commercial users. The downside is that consumers will not be offered service.

In Florida’s Lee and Collier Counties, U.S. Metro network has proved fiber’s ability to transform entire regions economically.

“If you build it, they will come” is a common rallying cry for fiber proponents.  In both counties, they came.  The latest arrival?  Jackson Laboratory of Bar Harbor, Maine, now being showered with more than $200 million in government grants to build a genetic research campus in Collier County.  A large portion of that money will end up staying in Collier County, stimulating the local economy and creating jobs.

Why all the clamor?  Because U.S. Metro runs a network that puts incumbent phone and cable companies to shame.  When a business requests service, owner Frank Mambuca doesn’t tell them what speeds they’ll have to live with.  Instead, he asks, “how many gigabits do you want?”

Unfortunately, U.S. Metro also only sells service to businesses, but they have some wholesale customers that do serve consumers.  Marco Island Cable and a sister company, NuVu are cable overbuilders that offer access to U.S. Metro’s broadband network at speeds and prices Comcast and CenturyLink can’t touch.

Marco Cable is preparing to deliver fiber-based 75Mbps service for $99 a month, along with several other access plans that save at least $12.95 per month over Comcast’s prices, and undercuts CenturyLink’s DSL plans as well.  The company also does something Comcast won’t — it promises unlimited Internet access and email accounts.

If someone wants even faster speeds, say 100Mbps, they can call Marco Cable and request it.

The highest download speed that Verizon offers [locally] at present is 50 megabits per second for $149.99 a month, according to spokesman Bob Elek.

NuVu is currently installing competing service in condos on the mainland.  For the father and son team that run both Marco Cable and NuVu, their philosophy is radically different from most cable and phone companies — delivering as much broadband speed as customers can use at prices they can afford.

For existing providers, who have “marked up” prices for years, the competition’s lower prices threaten profits from delivering “good enough for you” speeds at the highest possible price.

For some, simply lowering prices and enhancing service to compete isn’t the answer — putting a stop to municipal competition at all costs is.

In 18 states, high priced lobbying campaigns financed by giant phone and cable operators have succeeded in restricting or banning competing providers.  AT&T has been the most aggressive, successfully impeding competition in states like Texas, Wisconsin, Missouri, Arkansas, Michigan, Tennessee, and others.  Comcast helped stop competition in its home state of Pennsylvania.

Year after year, Time Warner Cable and AT&T continue efforts to try and do the same in North Carolina, a potential hotbed of locally run, community-owned providers.

For some towns and cities who have spent years begging for improved service, the clock has run out.  The Sarasota Herald-Tribune used Wilson, N.C., as an excellent example.  The city of 50,000 east of Raleigh decided it was through asking Time Warner Cable to provide a platform for a digital economic revival.

Brian Bowman, public affairs manager for the city, told the newspaper the city faced economic disaster from twin blows — the loss of the textile industry and America’s waning interest in tobacco products. Giving the keys to the local cable company to drive Wilson’s nascent digital economy into Lake Wilson was simply not an option.  The town would build its own digital highway — a municipal fiber to the home system for consumers and businesses.

For both, Wilson’s Greenlight system provides up to 100 megabits per second in both directions.  Time Warner Cable residential customers, in comparison, max out at 15/2 Mbps service.

“The way we see it, you’re going to have haves and have-nots in the next generation broadband world,” Bowman said. “The fact is we wanted to invest in our own future; that’s why we did this.”

Cable and phone giants always are going to say that current speeds are adequate and that there is no need for cities to build expensive networks themselves, Bowman said.

“I have heard that here from some of the incumbents, that you don’t need to go that fast. I’m sure the folks in Florida were doing OK without I-4,” Bowman said, noting the state never would have gotten Disney World if not for that interstate access.

People in Sarasota County are about to hear all of the usual arguments against municipal service:

• “Taxpayers will pay for it.” — Not with revenue bonds they won’t.  These bonds deliver returns to investors from revenue earned by the municipal provider, not from taxpayer dollars.
• “We want a level playing field.” — This cable industry opposed providing one when satellite and phone company IPTV showed up, as they tried to withhold programming and lobbied against both.
• “The government should stay out of the private sector.” — Christopher Mitchell, writing for the New Rules Project, tore apart that argument:

Governments “compete” with the private sector in many ways on a daily basis. Libraries compete with book stores, schools with private schools, public transit with taxis, police with security firms, even lumber yards, liquor stores, municipal golf courses and swimming pools with privately owned counterparts. Without public competition in the form of the Rural Electrification Authority, much of the country would still not be wired for electricity or phones.

The focus on whether local governments, who have a wholly different motivation than private companies, are “competing” with the private sector is a red herring to distract the public from incumbent providers’ failures to build modern networks. On matters of infrastructure, a community should always have the option to build the network it needs, just as it can build roads, bridges, water systems, and other modern necessities.

Ultimately, Sarasota County residents have two choices:

1. Obtain the best traffic control and monitoring system America has ever seen, capable of delivering crisp, clear 1080p HD feeds of traffic tieups on Route 301.
2. Deliver Sarasota County 21st century broadband that will power the digital economy and bring hundreds of millions in investment dollars, create thousands of new, high-paying jobs, and save local consumers and businesses a lot of money from broadband competition.

Imagine if you lived in a country where broadband competition actually delivered real innovation and savings, overseen by a consumer protection agency that made sure providers in a barely competitive marketplace actually delivered on their “highly competitive” rhetoric.

Australia’s National Broadband Network (NBN) will deliver exactly that, with a check and balance system that makes sure advertiser claims meet reality and that “robust competition” means… robust competition.

One industry-backed front group, Digital Society, doesn’t think that idea is fair to big telecom companies (like those funding its operations), and wants none of that here in the States.

Nick Brown doesn’t object too much to Australia’s plan to deliver fiber-to-the-home connections offering 100/50Mbps service to 93 percent of residents.  He just doesn’t want the Australian government overseeing how private providers use (and how much they can charge to access) the publicly-owned network:

Internet Service Providers in Australia will be forced to compete with each other via the “Competition and Consumer Commission”.  The problem with this is that a supposedly ubiquitous commission deciding what is and what isn’t competition and fair pricing stands a fair chance of not actually playing out in any other fashion than simply being a price fixing commission.

[…]Because the NBN will only act as a wholesaler and treat all ISP retailers equally, ISP’s no longer have the ability to develop their own unique contracts that would reduce costs to consumers.  All backhaul would be priced to all ISP’s at the same rate.  So realistically no company has a significant advantage over the other.  That does potentially create a good deal of choice, but that does not necessarily ensure competition.  This would be akin to going to the grocery store and on the shelf were 5 different brands of soft drink, but every single brand tasted exactly like Coca-Cola.  You would have a lot of choice in that situation, but there would be no real competition between those 5 brands, because taste is the competitive factor.  For the Australian, this means that ISP’s will likely be forced to start bundling services to gain advantages over one another.  Something that is not always considered attractive here stateside.

Brown’s bitter-tasting public-broadband philosophy is based on the inaccurate notion that incumbent private providers are just itching to deliver state-of-the-art broadband service across Australia.  If the darn federal government didn’t get in the way and steal their thunder with a nationwide fiber network, Aussies would be enjoying world class Internet access over copper phone wires and usage-limited wireless 3G networks right now.  Even worse, the Australian government that will finance the entire operation also has the temerity to set ground rules for private companies reselling access to consumers and businesses!  How dare they oversee a network bought and paid for by Australian taxpayers (he objects to the funding as well.)

Brown must also still be living in Australia if he missed the parade of American providers repricing services to push people into “triple-play bundles” whether they want them or not.  And we don’t even get the fiber to go with it.  For most Australians, they no longer care whether it’s Diet Coke, Pepsi One, Cherry Coke, or even RC Cola for that matter — as long as it arrives on a fiber network built by and for their interests (instead of Telstra’s), it’s far better than what they have now.

In reality, broadband issues hold a front-and-center position in Australian politics, and the Labor Government which supports an aggressive national broadband plan that puts America’s proposed broadband improvements to shame was -the- issue that keeps that government in power today.  Why?  Because Australia is well behind others in providing broadband access at reasonable speeds and prices.  Australian private providers maintain a nice little arrangement delivering sub-standard, near-monopoly service at some of the highest prices around, all usage-limited and speed throttled. Despite years of negotiations with big players like Telstra, the privatized phone company, broadband improvement has moved at a glacial pace (too often by their design).

The development of the National Broadband Network for Australia was driven by private provider intransigence.  Even Brown recognizes the logistics of the proposed fiber network is “very smart and very common sense” for a country like Australia, which he considers a close cousin geographically to the United States.  Brown also admits the use of fiber straight to the home “‘future proofs’ Australian networks and would allow for easier improvement in the future.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ABC Radio Battle of the broadband 8-11-2010.mp4[/flv]

ABC Radio National offered a comprehensive review of the competing plans from Australia’s political parties to address broadband issues as the country drops to 50th place worldwide in broadband excellence.  (9 minutes)

While Australia ponders a fiber future, today’s broadband picture across the country is less idyllic.

The minority of Australians receiving service over cable broadband, available mostly in the largest cities, continue to face usage-limited service and higher prices than American providers.

Most Australians get their service from DSL connections offered by Telstra and third party companies leasing access to Telstra facilities.  Telstra’s network is based almost entirely on aging copper wire that cannot deliver broadband to most rural populations.  Telstra’s long term broadband plan for Australia depends on milking every last cent out of those copper wires while raking in even bigger profits from usage limited and expensive wireless data plans.  Just last month, Telstra was fined $18.5 AUS million dollars for monopolistic behavior by impeding competitive access to its telephone network.  No wonder the country had enough.

Brown labeled the Australian government’s buyout of Telstra’s copper wire network a “negative,” as if they were stuck with a pig in a poke.  That suggests Brown does not understand the actual plan, which relies on reusing existing infrastructure like poles and underground conduit to install fiber at an enormous savings — both in billions of dollars in reduced costs and deployment time.  The alternative would require the government to obtain agreements with Telstra-owned facilities to share access or construct their own facilities from the ground up.  Telstra has no incentive to spend money to upgrade their networks, much less decommission them.  Logistically, the plan cuts through enormous red tape and guarantees Australians no one will be stuck waiting decades for the eventual retirement of copper phone wiring.

Call it Fiber Optic Broadband for Copper Wire Clunkers — the government has not nationalized the phone network — it wants to buy it a fair price, from a willing seller who will be able to use the new network to deliver some of its own services.

The horror show for groups like Digital Society is the thought private companies will actually be forced to deliver the competition and real savings they routinely proclaim in press releases, but never actually deliver to consumers.  The Australian people will own the fiber playground private companies will play on, so why shouldn’t they have the benefit of oversight to make sure the game is played fairly?

Australia’s Competition & Consumer Commission is equivalent to the Consumer Product Safety Commission, the Federal Trade Commission, and a state Attorney General all rolled into one.  The ACCC is an independent statutory authority that works for consumers.  It promotes and enforces real competition and fair trade.

The ACCC’s involvement in broadband regulation includes: stopping false advertising, helping intervene and resolve disputes over access and billing issues, and being an impartial observer about broadband uptake and measuring how competition actually delivers better service and savings for consumers.

What Brown dismisses as “a price fixing commission” is in reality a consumer protection agency with enforcement teeth.  The ACCC has a solid track record.  For instance, the broadband industry in 2009 itself admitted the ACCC stopped a “race to the bottom” in wild advertising claims:

In August last year, we sat down with the CEOs of the major telecommunication providers, Telstra, Optus and Vodafone Hutchison Australia. They acknowledged that there was a problem, exacerbated by a “race to the bottom” by industry participants in their advertising practices. The CEOs showed a ready willingness to resolve the issue on an industry-wide basis.

After analysing complaints, the ACCC identified the 12 most prevalent types of potential misleading conduct made in telecommunications. Some of these included:

• use of terms such as “free”, “unlimited”, “no exceptions”, “no exclusions” or “no catches” when this is not the case;
• headline price offers in the form of “price per minute” for calls made using mobile phones and phone cards when there are other fees/charges which are not clearly disclosed; or
• headline claims relating to price, data allowances, total time allowances, speeds and network coverage, where the claims cannot generally be achieved by consumers.

The three industry leaders have provided a court enforceable undertaking to review and improve advertising practices so that consumers are better informed about the telecommunications products they purchase. They have undertaken that their advertising will not make these claims in circumstances where they are likely to be misleading to consumers.

Further the majors have also agreed that they will take reasonable steps to ensure that this commitment will extend to any other players with whom they have commercial agreements which allow them to control the advertising and promotion of goods or services.

I can see why Digital Society, a group partly funded by telecommunications companies, would object to the ACCC stopping Big Telecom’s ill-gotten Money Party-gains.

ACCC also put a stop to promotions that tricked consumers into signing up for mobile data plans that included “free” netbooks, high value gas gift cards, or cash rebates.  The Commission discovered these “promo plans” weren’t giving away anything at all — they simply added the retail cost of the “free” item to the plans’ charges.

The ACCC received a court enforceable undertaking from Dodo Australia Proprietary Limited for the advertising of some of their mobile plans. Dodo had advertised that consumers would receive either an Asus Eee PC, a fuel card or a cash payment when they signed up to a ‘free offer’ plan.

However, cheaper mobile cap plans that did not include the ‘free’ offers were comparable in value and services. After raising these concerns with Dodo, they promptly ceased publishing the ‘free offer’ advertisement and undertook to ensure the affected customers would receive the goods for free, either by way of cash refund or by reducing the monthly charges for the ‘free offer’ plans.

That mean and nasty ACCC, ruining all of the fun for providers delivering tricks and traps for their customers.  Caveat emptor, right?

But the most ludicrous claim of all comes towards the end of Brown’s piece, when he claims the National Broadband Network will leave Australians with even higher priced, usage-capped access:

Australia traditionally has had low bandwidth caps.  Even just five years ago while most Americans were enjoying unlimited bandwidth with their broadband connections, I was living in Melbourne, Australia and was limited to a 1GB cap per month via my Telstra connection.  The likelihood of seeing 100Mb uncapped connections is highly suspect.  Australians may enjoy these speeds, but they will likely be extremely expensive with low bandwidth caps or limited to high priced premium tiers.

Brown can’t blame the private company that delivered his abysmal Internet service without his “free market knows best” philosophy falling apart.  It wasn’t the Australian government that provided him a 1GB monthly usage allowance — it was Telstra, and five years later the company is still usage-limiting Australian broadband consumers.  The National Broadband Network was designed to tackle that problem once and for all.  Brown apparently doesn’t realize the last argument private providers have used to justify usage caps — insufficient overseas capacity — is being addressed by new super-high-capacity undersea fiber cables stretching across the Pacific.  The issue of “usage cap” abatement is among the top bullet points for constructing the NBN.

Brown would be right when he suggests that Australians may enjoy faster speeds, but with low usage caps and high prices — if Telstra was the only company providing the service.  The new network will provide speeds faster than most Americans enjoy, with enormously expanded capacity.  Providers like Telstra have an incentive not to deliver the unlimited service that fiber network can deliver, as it will reduce their profits.  But since any company can access the network and compete, Telstra’s loss in market power will also erode their pricing power.  When a consumer protection mechanism is added, Telstra won’t just be answering to their shareholders’ demands for greater value.  They’ll also answer to the ACCC and the consumers who will pay for and maintain the network.

That may not add up to mega-profits for Big Telecom, but it certainly makes a whole lot of sense to consumers and small businesses who will finally be able to get 21st century broadband at a reasonable price.

Even worse for Digital Society’s friends — AT&T and Verizon — who fund the group through its connection with Arts+Labs, it might provide a blueprint for how America’s broadband future should be built.

[flv]http://www.phillipdampier.com/video/ABC TV National Broadand Network 8-15-10.flv[/flv]

ABC-TV (Australia) debated the merits of competing broadband plans from the incumbent Labor government, which supports a National Broadband Network delivering fiber to the home, versus a cheaper plan from the coalition opposition which promoted a private industry-favored initiative delivering improved broadband only to rural areas.  The Labor government initiative won the day when two rural independent members of Parliament, Rob Oakeshott and Tony Windsor announced they’d support Prime Minister Julia Gillard, giving her the 76 votes required to form a minority Labor government.  Windsor is an enthusiastic supporter of the NBN, telling Sky News “’you do it once, you do it right, you do it with fiber.”  Oakeshott said Labor’s plan to deliver real broadband for the 21st century was a major reason he backed the Labor government.  For the first time ever, fiber optic broadband was the key factor in determining who would govern a country.  (5 minutes)

Like two peas in a pod, Robert Cyran and Bob Cox are back for the umpteenth time with their views on something.  A few years ago, they were upset because the group Radiohead decided consumers should name their own price for one of their albums.  This time it’s about Net Neutrality and variable pricing for broadband.  Writing for Reuters BreakingViews, they’re deeply concerned poor traditional phone and cable companies are being shortchanged — saddled with the costs of building and maintaining networks that content companies like Google, Apple, Cisco, and Microsoft get to use for free.

As for the four leading [content companies], they have a combined net cash pile of around $140 billion. Last year they spent $4.9 billion on capital expansion, a tenth of what the big four [telecom companies] paid to erect new cell towers, buy routers and extend fiber-optic cables.

[…]The introduction of variable pricing, or charging customers based on the data they consume, will help pay for the needed gear. But it means that the already unpopular [telecoms] will stick their customers with far larger bills — a recipe for political interference. Meantime, the [content companies] would continue to carry away what the telecom operators see as a disproportionate share of the benefits.

This analysis is a mile wide and an inch deep — fundamentally flawed because of information Cyran and Cox either ignored, didn’t know about, or didn’t care to consider.

First, Cisco is hardly a content company.  It is doing quite nicely feeding rumors of the forthcoming great tsunami of data — the “zettabyte era of broadband” that will result in a global traffic jam only they can help overcome. Cisco’s success comes from the sale of advanced networking equipment that can manage the growth of the Internet.  The amount of data that crosses today’s broadband wires has grown exponentially, even as the costs to manage it are increasingly declining on a per-gigabyte basis.  Apple is partly a content company, but more importantly is a developer of devices like the iPad and iPhone which are driving growth in wireless networks and helping justify the acceptance of monthly wireless phone bills easily over $100 a month in many households.  Google has content, but is also willing to take a plunge into being a provider itself, with plans to deploy an advanced 1Gbps fiber network that big telecom providers say cannot be built in a sensible way (to their investors.)  Finally, love or hate Microsoft, they have successfully powered the growth of personal computing which made the concept of broadband something telecom companies could actually sell to their shareholders as a viable business.

Cyran and Cox equate content providers and big telecom companies as unequal beneficiaries of the broadband revolution.  But just like many other powerful interests opposed to Net Neutrality, they forget those big telecom companies earn enormous revenue and profits from their customers — you and I.  The financial reports of all of these companies tell the story Cox and Cyran don’t.  Broadband profits among large telecom companies are the biggest growth area these companies have.  Deploying the service reaps financial windfalls.  Even with capital expenses involved in constructing fiber optic networks, broadband revenue can still make shareholders smile like no other component in today’s triple play packages.

On the wired side, Verizon has announced it has suspended further expansion of its fiber network FiOS indefinitely.  No other national cable or phone company is currently constructing true fiber to the home networks. Instead, most deploy fiber to the neighborhood and let coaxial or copper wiring cover the rest of the way.  Indeed, capital spending by many telecom companies is actually dropping.

On the wireless side, more than 90 percent of Americans now carry cell phones.  The monthly prices most pay for service exceeds that of their landline provider, if they have one.  Yet for all of the awful costs wireless providers face, AT&T and Verizon can’t wait to devote more time and energy to the wireless side of their business, because that is where the real money can be found.

It’s difficult to claim “victim” status of unequal treatment when you’re standing in a room filled with piles of cash.

The authors also completely ignore the fact companies that produce content don’t just throw it on the web for free.  An entire industry devoted to delivery of streaming media and other high bandwidth content buys fat pipelines from these telecom companies to deliver content to consumers.  Every content provider already pays their fair share for the traffic they generate.  Consumers pick up the rest as part of their monthly bill.

But Cyran and Cox believe these content companies (and consumers) should pay dramatically more to telecom companies for “upgrades” that may or may not materialize, and are frankly just the cost of doing business, which can be recouped from the relatively expensive broadband pricing Americans already pay for service.  The profit margins for broadband service are enormous.

Variable pricing, which we consistently call Internet Overcharging, is nothing more than price gouging, and the one true fact in their piece we agree with is that customers will get stuck with the bill.