Verizon’s chief operating officer thinks industry calls for Internet Overcharging schemes like metered billing and usage capped-broadband will harm providers trying to convince customers their multi-service packages represent the best value.

Bob Mudge told Bloomberg News Verizon has little interest heading down the road to charge customers based on what they use, particularly on its FiOS fiber to the home network.  Although Verizon does limit usage on its wireless network, to enforce limits on its fiber network could harm the company’s “value proposition” to consumers.

“The way we’ve structured our pricing is we have a great value proposition with the best speeds in the industry,” Mudge said.  “What we’re thinking about here is to make sure that if you are an Internet user, the total triple or quad play will have so much value and flexibility to you it will prevent you from becoming a niche buyer or seeking to cut the cord.”

Mudge believes customers want to be able to access content across several different device platforms, from home-based televisions, to computers around the home, to wireless devices while out on the go.

Despite Verizon’s enthusiasm for FiOS, the company has continued to put further expansion to new areas on hold.  Only communities already holding signed franchise agreements from Verizon will see fiber to the home from the company anytime soon.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Mudge Says Verizon Is Expanding Its Fios Service 12-7-10.flv[/flv]

Bloomberg News interviews Bob Mudge from Verizon about FiOS and Verizon’s future plans.  (5 minutes)

A new report proves what Stop the Cap! has advocated for more than two years now — communities seeking the fastest, most-modern, and most aggressively priced broadband can get all of that and more… if they do it themselves.

The concept of community self-reliance for broadband has been dismissed and derided for years among small government conservatives and corporately-backed dollar-a-holler groups who claim government can’t manage anything, but when it comes to broadband in the state of North Carolina, the evidence is in and it is irrefutable — Tar Heel state residents are getting the most bang for their broadband buck from well-managed and smartly-run community-owned broadband networks.

Christopher Mitchell from the New Rules Project — part of the Institute for Local Self-Reliance, gathered evidence from North Carolina’s different broadband providers and found the best broadband services come from local communities who decided to build their own fiber networks. instead of relying on a handful of cable and phone companies who have kept the state lower in broadband rankings than it deserves.

North Carolina is undergoing a transition from a manufacturing and agricultural-based economy that used to employ hundreds of thousands of workers in textile, tobacco, and furniture manufacturing businesses.  In the last quarter-century, the state has lost one in five jobs to Asian outsourcing and America kicking the tobacco habit.  Its future depends on meeting the challenges of transitioning to a new digital economy, and major cities like Charlotte, Raleigh, and Greensboro have risen as well-recognized leaders in engineering, biotech, and finance.

But for rural and suburban North Carolina, success has been hindered by a lack of necessary infrastructure — particularly broadband for small businesses and entrepreneurs.  It becomes impossible to attract high tech jobs to areas that are forced to rely entirely on low speed DSL service, if that is even available.

In communities like Wilson and Salisbury, long frustrated by area providers not delivering needed services, a decision was reached to build their own broadband infrastructure — modern fiber to the home networks worthy of the 21st century.

Mitchell’s report charts the benefits available to every resident, as communities with state-of-the-art fiber networks consistently deliver the most robust service at the lowest prices, all without risk to local taxpayers.  Better still, when the network construction costs are paid back to bondholders, future profits generated by the community-owned systems will be plowed back into local communities to reduce tax burdens and keep service state-of-the-art.

“Comparing the tiers of residential service from Wilson or Salisbury against the providers in the Raleigh area shows that the communities have invested in a network that offers far faster speeds for less money than any of the private providers,” Mitchell concludes.  “Whether communities in North Carolina are competing against other states or internationally for jobs and quality of life, they are smart to consider investing in a community fiber network.”

Mitchell’s report arrives just a few weeks after voters handed North Carolina’s General Assembly to GOP control for the first time in more than a century.  Both cable and phone companies in the state modestly suggest that is good news for their legislative agenda, which is an understatement equal in proportion to the historic handover of control of both the House (67-52) and the Senate (31-19).  The top items on the agenda of incoming members is a checklist of conservative activist favorites, including a war on unions, mandatory ID cards for voting, opting the state out of recently enacted health care reform, an eminent domain constitutional amendment, sweeping deregulation reform to favor business interests, and redistricting to “restore fairness” in future elections.

The state’s big cable and phone companies are convinced with a list like that, they can come along for the legislative ride and get their agenda passed as “pro-business reform.”  That means a much larger fight in 2011 for the inevitable return of corporate protection legislation banning exactly the kinds of municipal networks that are delivering North Carolina better, faster, and cheaper broadband.

Time Warner Cable customers in North Carolina are getting rate hike letters from the cable company that foreshadows what other Time Warner Cable customers around the country can expect in the coming months.

For residents in Charlotte and the Triad region, Time Warner is boosting prices for unbundled customers an average of six percent, which will impact customers not on promotional plans or who are not locked into a “price protection agreement.”

The rate increases particularly target standalone service customers.  Those with the fewest services will pay the biggest increases.  Those who subscribe to cable, phone, and broadband service from the company will suffer the least.

A Time Warner Cable spokesman claimed the company is just passing on the cost of programming.

WXII-TV in Greensboro reported that for many customers already struggling with their bills, they don’t want to hear anything about a price hike.

“I think it’s ridiculous at this time with the economy — it’s hard to make it as it is,” one customer told the station.

“I wish there was a better option out there, but it’s about the only thing you can get,” said another viewer.

Time Warner has been developing pricing models that increasingly push customers towards bundled packages of services.  Standalone broadband service saw dramatic price increases in many areas in 2010, and the company’s most aggressive new customer promotions encourage customers to take all three of its services.

But broadband customers need not expose themselves to inflated broadband prices for standalone service.  Most Time Warner Cable franchises offer Earthlink broadband at comparable speeds at prices as low as $29.95 per month for the first six months.  When the promotion expires, customers can switch back to Road Runner at Time Warner’s promotional price.

Time Warner does face competition in some areas of North Carolina from AT&T U-verse, which offers attractive promotional pricing for new customers.  But the phone company’s broadband speeds come up short after Time Warner boosted speeds across much of the state.  The cable company now delivers Road Runner at speeds of up to 50/5Mbps.  AT&T tops out at 24Mbps, and not in every area.

When a competitor can’t deliver the fastest speeds, they inevitably claim consumers don’t want or care about super-fast broadband.

“We are focused on offering the broadband speeds that our customers need, at a price that they can afford,” said AT&T spokeswoman Gretchen Schultz.

Greenlight promotes its local connection to Wilson residents

Some North Carolina consumers are watching AT&T’s slower speeds and Time Warner’s price hikes from the sidelines, because they are signed up with municipal competitors.

Residents in Wilson with Greenlight service from the city don’t have to sign a contract to get the best prices and obtain service run and maintained by Wilson-area employees. The provider has embarked on a campaign to remind residents that money spent on the city-owned provider stays in the city.

In Salisbury, Fibrant is making headway against incumbent Time Warner as it works through a waiting list for customers anxious to cut Time Warner’s cable for good.  Fibrant customers are assured they’ll always get the fastest possible service in town on a network capable of delivering up to 1Gbps to businesses -and- residents.

MI-Connection, the rebuilt former Adelphia cable system now owned by a group of local municipalities is managing to keep up with Time Warner with its own top broadband speeds of 20/2Mbps.  The system is comparable to a traditional cable operator and does not provide fiber to the home service.  Its 15,000 customers in Mooresville, Cornelius and Davidson are likely to stay with the system, but it is vulnerable to Time Warner’s bragging rights made possible from DOCSIS 3 upgrades.  Since Time Warner does not provide service in most of MI-Connection’s service area, city officials don’t face an exodus of departing customers.

But that could eventually change.  Some MI-Connection customers have reported to Stop the Cap! they have begun to receive promotional literature from Time Warner Cable for the first time, and there are growing questions whether the cable company may plan to invade some of MI-Connection’s more affluent service areas.  Cable companies generally refuse to compete with each other, but all bets are off when that cable company is owned by a local municipality.

For most North Carolina residents, AT&T will likely be the first wired competitor, with its U-verse system.  To date, U-verse has drawn mixed reviews from North Carolina consumers.  Many appreciate AT&T’s broadband network is currently less congested than Road Runner, and speeds promised are closer to reality on U-verse compared with Road Runner during the early evening.  But some AT&T customers are not thrilled being nickle-and-dimed for HD channels Time Warner bundles with its digital cable service at no additional charge.  And for households with a lot of users, AT&T can run short on bandwidth.

“We have five kids — three now teenagers, and between my husband’s Internet usage and me recording a whole bunch of shows to watch later, we have run into messages on U-verse telling us we are trying to do too much and certain TV sets won’t work until we reduce our usage,” writes Angela.  “AT&T doesn’t tell you that you all share a preset amount of bandwidth which gets divided up and if you use it up, services stop working.”

Angela says when she called AT&T, the company gave her a $15 credit for her inconvenience, and the company claims it is working on ways to eliminate these limits in particularly active households.  For now, the family is sticking with U-verse because the broadband works better in the evenings and she loves the DVR which records more shows at once than Time Warner offers.  Their U-verse new customer promotional offer saves them $35 a month over Time Warner, at least until it expires.

“From reading about Fibrant and Greenlight on your site, my husband still wishes we lived in Salisbury or Wilson because nothing beats fiber, but at least what we have is better than what we used to have,” she adds.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WXII Greensboro TWC Raising Rates 11-16-10.flv[/flv]

WXII-TV in Greensboro reports of Time-Warner Cable’s rate hikes for the Piedmont Triad region of North Carolina.  (2 minutes)

Fibrant ruins Time Warner Cable's Speed Party by delivering faster service at a lower price, without the cable company's rate increase notice sitting in Charlotte-area mailboxes.

Residents of Salisbury, N.C. are going to get some of the state’s fastest broadband speeds as the community-owned broadband provider prepares to introduce 200/200Mbps service, leaving Time Warner Cable’s Road Runner service behind in the dust.

Time Warner Cable enjoyed a few moments in the spotlight last week announcing free speed upgrades for the Charlotte region, which includes Salisbury.  But Fibrant’s fiber to the home network is well-equipped to turn Time Warner’s temporary speed advantage on its head.

Last week, the cable operator promoted the introduction of its new maximum speed 50/5Mbps Road Runner Wideband service, which carries a monthly price of $99.95.

But Salisbury city officials were unimpressed, claiming Fibrant already offers 50/50Mbps service — they just haven’t advertised it.

Assistant City Manager Doug Paris said Fibrant’s top available speed is 10 times faster than the cable giant’s when uploading.

“We’re cheaper, and we’re faster,” Paris told the Salisbury Post.  Fibrant sells the 50Mbps service for $85 a month, about 15 dollars less than Time Warner Cable’s slower Wideband service.

City officials also weren’t surprised that Time Warner announced faster Internet speeds the day after Fibrant launched.

“We’ve seen this in every other city that has invested in fiber optics,” he said. “They are trying to match our speeds, but they can’t.”

The Salisbury Post needs a few cans for its message boards, filled with anonymous lunacy.

Time Warner Cable claimed its new speeds were not in response to Fibrant but were part of a service upgrade for the entire Charlotte area, a claim every cable company makes in response to new competition on their doorstep.

Fibrant’s upstream streams are dramatically better than those offered by Time Warner Cable, which uses an inferior network architecture not currently capable of delivering the same upstream and downstream speeds to consumers.  Cable broadband networks are constructed with the assumption most users will download far more than they upload, so the networks emphasize downstream speeds.  Time Warner Cable has dramatically increased those download speeds, but has been forced so far to limit uploads to just 5Mbps.

Fiber to the home networks like Fibrant do not suffer those limitations, and the city plans to exploit that in their marketing.

Fibrant has the capacity to provide up to 1 gigabit per second upload and download, Paris said. Forthcoming are plans offering 100/100 and 200/200Mbps service, with prices yet to be determined.

Fibrant continues to have a waiting list of several hundred area residents waiting for service, but you wouldn’t know it from the raucous anonymous postings on the Post’s website.  Virtually all of the anonymous comments about Fibrant have been negative and wildly uninformed, to the point of hilarity.  From a Korean War veteran talking about eating blueberries and living life in the Windstream DSL slow lane (and loving it) to comments proclaiming fiber optics as woefully slower than WiMax, the Internet trolls have managed to prove why an increasing number of newspapers have learned to adopt “real names-only” posting policies or have just turned the comment section off altogether.

For those fans of  Time Warner Cable, the price of that love is about to go up.

Time Warner is mailing notices to Charlotte area customers announcing broadband rate hikes for some customers this December.  Time Warner customers who bundle their services or are on price protection promotions will be exempted from the rate increases… for now.

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

Sandman

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

Martin

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

Philippi's fiber optic broadband is not so fast, thanks to a bottleneck between the community and the rest of the Internet

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)