Africa’s international Internet connectivity is primarily provided by underseas fiber cables. (Map: Steve Song)

One of the most common arguments pro-capping telecom companies use is since the rest of the world has already adopted consumption billing for broadband, why can’t North American ISPs follow in their footsteps. But ISPs around the world are actually heading away from capped, throttled, or nickle-and-dime broadband pricing towards flat rate, unlimited service.

The Republic of South Africa is a case in point. Located on the southeastern tip of the African continent, South Africa has faced down a number of broadband challenges. Antiquated infrastructure lacking investment in upgrades, political and economic challenges, and very costly, limited capacity international connectivity have all conspired to leave the country with poor broadband service.

The biggest problem domestically is deteriorating landline infrastructure, leaving most South Africans with slow speed ADSL service. Wireless mobile broadband has proved less costly to deploy, but connectivity costs remain high regardless of how customers obtain service because of international bottlenecks.

South Africa’s problems are similar to those faced in South Pacific nations like Australia and New Zealand. Data caps have been a fact of life for years, primarily because there has never been sufficient capacity on underseas fiber and satellite links to sustain anticipated traffic if the caps were removed. But those problems are starting to ease as new high capacity backbone connections continue to come online.

Heavily capped broadband transforms how people use the Internet. In all three nations, many people do their heaviest web surfing at work over business connections. Some ISPs ease their usage caps or speed throttles during low-demand overnight hours, leaving many to hold off on significant file transfers and software updates until most people have gone to bed.

Regardless of whether you live in Johannesburg, Adelaide, or Wellington, people hate data caps and speed throttles and cannot wait to be rid of them.

That day has come in South Africa. Telkom, the former state-owned telephone company, has announced dramatic price cuts and relaxation of speed throttles for customers choosing its unlimited ADSL offerings. The company has announced a 40% price cut for residential customers and a 35% cut for business customers that took effect Feb. 1. Speed throttles that used to block international traffic when customers were deemed to be “using too much” are also being removed, although Telkom can still reduce speeds for their heaviest users.

Speeds are still very slow compared to what most North Americans can receive, but the average South African can now purchase unlimited 4Mbps ADSL for around $42 a month. A 10Mbps account remains out of reach for many at an unaffordable $157 a month. Some of Telkom’s competitors sell unthrottled and unlimited 1Mbps service for a budget-priced $22 a month.

South African ISPs are managing to achieve speed increases, but the primary bottleneck remains Telkom’s aging copper wire infrastructure. The answer is more fiber links further out in telephone exchanges and reducing the amount of copper customers have between their homes and Telkom’s central exchange offices. Although urban residents in relatively prosperous areas can achieve faster speeds, South Africa’s large expanse of low income areas often rely on prepaid wireless services because wired infrastructure is often sub-standard.

International capacity concerns will continue to ease as new underseas fiber cables are brought online. By 2014, one new underseas fiber cable will be able to carry more Internet traffic than all of the currently operational cables preceding it combined.

Isiogu

A current member of the Michigan Public Service Commission is penning guest editorials featuring AT&T’s favorite talking points: promoting the company’s deregulatory agenda and providing false memes about Internet Overcharging schemes like usage caps and consumption billing.

Orjiakor N. Isiogu, co-vice chairman of the National Association of Regulatory Utility Commissioners Committee on Telecommunications and member and immediate past chairman of the Michigan Public Service Commission wrote nearly identical pieces appearing in The Hill, the Detroit Free-Press and the Battle Creek Enquirer that included misleading claims that could have come straight from an AT&T lobbyist’s “fact sheet.”

A sample:

The federal government has used the telecom industry as a model of how competition could be a better elixir than the guiding hand of government regulation. And the results are impressive. The high-speed Information Superhighway touches 95 percent of the U.S., and most consumers can choose from among six or more wireless or wireline providers (90 percent can choose from at least two). And the price of Internet access — measured by megabits per second — has fallen 87 percent since 1999, even as the speed has increased tenfold;

80 percent of U.S. homes now have access to download speeds of 100 megabits per second, and 4G wireless service will soon be available nationwide, with speeds of up to 20 megabits per second;

Despite the evidence, however, there are those who wonder whether there is sufficient competition for Internet access, whether speeds are too slow and prices too high. Others object to new pricing plans that allow a consumer to purchase the amount of bandwidth that best suits his needs.  In fact, some have asked the government to stop these new tailored pricing plans, even though these plans save nearly all consumers from having to underwrite the “outliers” whose monthly usage is gigantic — over 300 GBs a month or the equivalent of over 500 standard definition movies;

And if Teddy Roosevelt were with us today, he would likely argue that we can walk and chew gum at the same time, pointing to the banking industry as an example of industry excesses in need of a public check and the telecom industry as an example of how private competition, with occasional nudges, could better make the markets work.

In reality, if Teddy Roosevelt were alive today, he’d ask why a state commissioner working for the public is instead carrying water for the large telecommunications companies he oversees.

Did Roosevelt advocate the government keep their hands off AT&T and other consolidating telecom companies?

Isiogu doesn’t know his history either.

Roosevelt made no distinctions between the excesses of one industry over another. He strongly believed all major interstate corporations (and that would cover Isiogu’s friends at AT&T, Comcast, and other big telecom companies) should be subject to federal regulation and, in some cases, have their rates set by the government to ensure the public was charged fairly for the services they received. Roosevelt learned his lesson well from the oil, railway, and tobacco trusts his government sued to break up after years of consolidation and rapacious greed at the public’s expense. Those companies all claimed to be competitive as well.

Few industries have consolidated faster than the telecom sector, which is gradually rebuilding the Bell System in AT&T and Verizon’s image and a cable cartel that agrees never to compete directly with other cartel members.

Isiogu’s “facts” are disturbingly incomplete and misleading for a telecom regulator ostensibly serving the public interest.

For example, his claim that Americans can choose among six or more different providers ignores the fact AT&T and Verizon are counted twice (wired and wireless), no competition exists among multiple cable operators or phone companies, and many of the other options Isiogu counts (almost always wireless) do not provide coverage in suburban and rural Michigan. The average consumer in the U.S. has two practical choices for broadband — the cable or phone company.

While Isiogu sings the praises of American broadband, the rest of us have watched the price of Internet service continue to increase, whether customers want faster speeds or not. The industry itself admits it can raise prices because the competitive landscape and consumer love of broadband gives companies “pricing power.”

He also doesn’t mention the price of 100Mbps service or the fact it is not offered by either AT&T or (outside of one city) Time Warner Cable — both industry leaders. Wireless is no panacea either. 4G service may offer faster speeds, but usage plans that start with just a 1GB allowance make it hard (and expensive) to take advantage of the technology improvements. Just a few years ago those plans offered unlimited access.

Isiogu also tapdances around the fact no broadband provider in the country wants to sell a “pay for what you use” plan. Instead, companies create usage allowances that come with steep overlimit fees and, as AT&T executives have told shareholders, deliver limitless potential revenue growth as subscribers are forced to upgrade as their usage grows.

Most consumers favor and appreciate unlimited-use plans for predictable pricing and ease of mind. But flat rate plans ruin providers’ goals to monetize broadband usage and are usually eliminated when consumption pricing arrives, another fact Isiogu does not bother to disclose.

Isiogu has gotten remarkably cozy with the industry he oversees, even resorting to mind-bending pretzel logic that calls regulation for the banking sector a good idea and oversight of his industry friends a disaster.

What is disturbing is while Isiogu pens these industry friendly guest editorials in his spare time, he is also in a position of power to oversee and regulate these same companies in the public’s interest.

That represents a clear conflict of interest Teddy Roosevelt could see and feel from his grave.

From writing friendly reports defending Internet Overcharging to the FCC’s new chief economist — D.C.’s revolving door keeps on spinning for Professor Steven Wildman.

The Federal Communications Commission has proved that Washington’s revolving door enjoys perpetual motion with the announcement it hired a new chief economist who just three weeks earlier was peddling his findings favoring usage caps and consumption billing before a National Cable & Telecommunications Association gathering that paid for his research.

Professor Steven Wildman’s move from the cable industry’s go-to-guy for defending Internet Overcharging to a cushy new position at the FCC just weeks after shilling for the country’s largest cable industry lobbying group is shocking even by Washington’s standards.

Remarkably, FCC Chairman Julius Genachowski praised this cheerleader of wallet-pilfering by saying “his deep economic expertise and problem solving abilities” are the perfect fit for an agency pressed with challenging initiatives – like charging you more for your broadband service and calling it “pro-consumer.”

There is no doubt Wildman has deep economic expertise — he has found success penning dubious research bought and paid for by an industry that expects his findings to echo their own talking points. His problem-solving abilities at fixing the facts around the cable industry’s agenda are also unquestioned.

But his research reports aren’t worth wasting your monthly usage allowance to download because they only tell part of the story.

At the December NCTA Connects event, Wildman was the darling of the cable industry echo chamber telling tall tales about the problems of broadband penetration in a country where providers enjoy up to 95 percent gross margins on broadband pricing:

“One of the key mechanisms through which positive welfare effects are realized is the crafting of lower-priced plans for users who otherwise might not take service, while users who have a more intensive demand for broadband are able to contract for more advanced services. We also showed that UBP has flexibility advantages for users whose data service needs vary over time. Because UBP creates an incentive to offer lower cost-lower usage plans to consumers who otherwise could not profitably be served at a unitary price, UBP can be an effective tool for promoting increased broadband penetration in the United States, a role that is enhanced by the fact that low price-low usage options reduce the financial risks to consumers thinking about trying broadband for the first time.”

“Tiered pricing also has benefits for the recovery of shared network costs and for network investment. Whereas investment decisions are also influenced by other factors, including the costs of extending networks, potential revenues, and overall economic conditions, we found that, other things equal, usage tiers will likely contribute to better cash flows and stronger incentives to invest in broadband plant, both to improve the quality of service for current customers and to extend networks into unserved and underserved territories.”

Wildman does not mention his cable benefactors earn a higher percentage of profit on broadband than oil sheikhs in the Middle East rake in charging $90+ for a barrel of oil. So it is unsurprising his analysis lacks one simple solution providers could use to differentiate their services and enhance broadband penetration: lower the price to compete. He also ignores the fact that true usage pricing would offer consumers a chance to pay only for what they actually consumed during a month, but those plans are not on offer anywhere.

Wildman ignores the real industry agenda: monetizing broadband usage to create even higher profits. The cable industry is well on its way, using the enormous market power enjoyed in the current monopoly/duopoly state of consumer broadband to preserve today’s near-extortionist pricing while trying to pick up customers currently unwilling to pay, charging for slightly discounted service that comes with a paltry usage allowance.

The meme that unlimited, flat rate broadband is somehow responsible for America’s broadband-unserved is a popular one at the FCC, where Chairman Genachowski has applauded usage based pricing as an “innovative” experiment that could change how broadband is marketed in the U.S. and promote its expansion.

While those in D.C. may live in a bubble populated by industry lobbyists, others do not.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/NCTA Connects The Pros and Cons of Broadband Peak Load Pricing Dec 2012.flv[/flv]

Message Confusion: While some in the cable industry still advocate usage pricing and caps as a matter of “fairness” and as a salve for peak time congestion, today’s advocates of usage-based billing appearing at a cable-industry event in December admit congestion is simply no longer a problem on wired networks. Sandvine’s Dave Caputo and Professor David M. Lyons of Boston College Law School dismiss the notion of congestion-based pricing only during peak usage, arguing congestion is no longer the real issue driving usage caps. That is why everyone must be subjected to higher priced, usage-capped broadband no matter what time of day they use the network. (3 minutes)

The inevitable outcome of “differentiated pricing” is charging consumers more to access popular websites, as is already the case in countries like Colombia.

Wildman argues that like car manufacturers that offer many different models ranging from basic to well-appointed with luxury extras, providers should be free to offer different types of plans to consumers.

Wildman’s auto analogy fails because consumers have more than a dozen different manufacturers to choose from, each making a range of different models. For broadband, the overwhelming majority of Americans have two choices: the cable and phone company. Unlike auto manufacturers that respond to consumer demand, broadband providers are hellbent on eliminating the overwhelmingly popular flat rate, unlimited option in favor of mandatory usage pricing and/or usage caps. It would be like telling auto-buyers that their Honda Accord, Toyota Camry, or Chevy Malibu no longer met the needs of manufacturers. Instead, you have one choice: the Toyota Yaris. But you can get it with heated leather seats, so what’s the problem?

Wildman also ignores the fact providers already sell different plans, based on different speeds. Customers with only light web use can select a cheaper, lower speed tier and never notice the difference. Heavier users buy up into premium speed tiers, paying higher prices to cover their additional usage and expectations of performance.

Providers have spent the last few years trying to justify adding a usage component to the pricing equation and Wildman is perplexed by public policy and consumer groups overwhelmingly hostile to plans that would leave current pricing largely intact and add an artificial usage cap. Considering who pays for his research, this is not too surprising.

Wildman’s style of “innovation” already exists in countries like Canada, Australia, New Zealand, and in parts of Europe allowing everyone to witness what actually happens when these pricing schemes gain a foothold. Usage-based pricing has successfully boosted the profits of providers but has done nothing to expand rural broadband networks or offer customers big savings. When providers gorge on profits made possible in uncompetitive markets, the money goes straight into bank accounts or back to investors, not into capital spending to improve service or expand into areas deemed unprofitable to serve.

Customers despise usage caps so much that in Australia and New Zealand, the government has partially taken over rebuilding infrastructure with new fiber to the home networks and promoting international capacity expansion that will eventually banish usage pricing for good. In western Canada, Shaw Cable heard so much condemnation about usage caps during its listening tour, it greatly relaxed them. (The fact its biggest competitor Telus barely enforces their own caps didn’t hurt either.)

In the rest of Canada, independent ISPs have found a growing niche selling plans with considerably larger usage allowances or flat rate access. How did dominant providers like Bell (BCE) respond? They asked regulators to force the competition to stop selling flat rate service.

How Sandvine helps providers “innovate.” Alaska’s GCI implemented its draconian caps and overlimit fees using Sandvine’s Internet Overcharging technology.

Wildman’s report flies in the face of reality, and every so often the cable industry itself admits as much. Take the word of Suddenlink president and CEO Jerry Kent, who runs a largely rural cable company that launched its own Internet Overcharging scheme:

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unsurprisingly, that sentiment did not make it into Wildman’s analysis either.

Wildman

Financial reports from providers that have usage caps and those that don’t show the same remarkable trend: broadband expenses are way down, capital intensity is well within expected norms, and cable operators are not pouring their profligate earnings into expanding rural broadband.

That makes Wildman the consummate team player, and hardly the best choice for taxpayers who will cover his salary for a few years before he takes another trip through the revolving door back to his industry friends. When Americans wonder why Washington doesn’t seem to be living in the reality-based community, this is why. We can hardly expect Mr. Wildman to represent our interests when he has spent the last several years representing an extremely profitable industry reviled for its overcharging, poor service, and scheming, and will be more than welcomed back if he remembers his friends while working at the FCC.

This latest move represents another disappointment from Chairman Julius Genachowski, who increasingly appears to be warming up to a telecommunications industry he used to aggressively oversee at the start of his tenure.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/NCTA Connects The Evolving Internet – Patterns in Usage and Pricing Dec 2012.flv[/flv]

Three weeks ago, the Three Musketeers of Internet Overcharging appeared at a cable industry-sponsored event promoting usage caps and consumption billing. Sandvine CEO Dave Caputo makes his living scaring providers and consumers about Internet growth and (conveniently) selling the equipment that manages the traffic “tsunami” with speed throttles and usage limits. Professor David M. Lyons of Boston College Law School calls usage pricing “second degree price discrimination,” a term he hopes the industry will rebrand into something less ominous and obvious. He argues selling broadband at incremental costs will never recover “fixed costs” for networks the cable industry itself admits have already been largely paid off. Professor Steven Wildman, now on the way to the FCC as its new chief economist, peddles research bought and paid for by the cable industry. They got their money’s worth. (1 hour, 9 minutes)

Phillip “It’s hard to trust a group that so spectacularly flip-flopped on Internet policies when its benefactor AT&T changed its tune” Dampier

When Republican FCC Commisioner Ajit Pai turned up last week at a telecom symposium to warn a more activist FCC could ruin broadband providers’ efforts to charge consumers more money for less service, he was speaking to a very friendly audience.

The conservative Phoenix Center, which ran the event, has been spewing out industry-friendly “research reports” for years that attempt to justify the country’s sky-high broadband pricing. It also promotes a “hands-off” mindset on industry oversight, calling it common sense and consumer-friendly.

Unfortunately for the group and its supporting authors, it has a serious credibility problem — exposed as an industry-funded “think tank” operating as a mercenary research arm for AT&T and other phone companies. In fact, the same group that today generates endless research condemning Net Neutrality had a very different position in 2004 when it published an Op-Ed entitled, “Net Neutrality: Now More Than Ever.”

What changed? Its benefactor. In 2004, AT&T was a competing long distance carrier fighting local phone companies. Today it –is– one of those phone companies. With its Baby Bell owners controlling AT&T’s purse-strings starting in 2006, the Phoenix Center dutifully flip-flopped to maintain continuity with the ‘new AT&T,’ strongly opposed to most forms of broadband regulation.

So it comes as no surprise the Phoenix Center continues pumping out cheerleading “research reports” that attempt to bolster credibility to forces opposing Net Neutrality and supporting an Internet Overcharging free-for-all with the help of usage billing and caps.

One particular bit of nonsense that completely ignores marketplace reality came in Phoenix Center Chief Economist Dr. George Ford’s report, “A Most Egregious Act? The Impact on Consumers of Usage-Based Pricing.”

For example, Ford argues:

A prohibition of differential pricing renders a single price that lies between the low price for the restricted service and the high price for the unrestricted service. Therefore, prohibitions against usage based pricing forces some consumers to pay more for services they do not want or use, while others are allowed to pay less for services they do. The prohibition, in effect, results in a transfer of wealth from one group of consumers to another, and profits are also reduced. Overall consumer welfare is diminished, even though some consumers are better off.

We’re number one… in prices, even with the increasing prevalence of usage-based pricing Ford believes benefits consumers. (Image: CRTC)

But Ford completely ignores the current conditions in today’s broadband market that have made it easy for providers to promulgate an unpopular end to flat rate, unlimited broadband in favor of a highly-flawed, usage-based billing policy:

1. Ford ignores the broadband market is essentially a duopoly for most consumers and effectively a monopoly in rural America. That gives providers what they call “pricing power,” the ability to increase prices at will and change pricing models because consumers are dependent on the service and have limited options to take their business elsewhere;
2. The only “transfer of wealth” involved here is from consumers to providers. While profits soar and costs drop, Ford complains that those using the service more are somehow subsidized by lighter users, when it fact providers enjoy a 90-95% gross margin on broadband. As Time Warner Cable CEO Glenn Britt admitted, the most significant cost attributed on the cable company’s balance sheet for broadband comes from its backbone traffic costs, which are minuscule in contrast to the increasing prices the cable company charges for its broadband service;
3. Consumer welfare is reduced primarily from the high costs charged by providers, made possible by scant competition that would otherwise drive prices downwards, not from expenses associated with broadband traffic;
4. Ford is careful not to advocate for a true usage-based billing system that would be a revenue nightmare for his benefactors. In a strict usage-based pricing model, customers would pay a small fee for infrastructure, support, and equipment expenses and a variable charge based on actual usage. But no provider in the United States advocates for this system. Instead, providers force consumers into tiered broadband plans that include different usage allowances the vast majority of customers will either not exhaust or will exceed, which raises profits even higher with usage overlimit penalties. With no unused usage rollover, most customers are in the same position Ford claims will diminish consumer welfare: paying for service they do not want or use;
5. Most consumers favor unlimited, flat use plans even if they could save money with a usage-constrained pricing model. Since keeping customers happy with a more expensive unlimited plan they like instead of a lower priced plan they don’t want would seem to enhance provider profits. But Ford ignores this reality, perhaps understanding providers are actually laying the groundwork to broadly monetize Internet usage. Whether a provider adopts usage-based billing or a strict cap on usage, which is growing in most households, the inevitable result is still the same: more profits, less cost from constrained usage. Inevitably this will force customers into higher-priced, higher-profit upgrades that deliver a higher usage allowance, again something consumers simply do not want. This is already a reality in the wireless marketplace, and is well-acknowledged by both AT&T and Verizon Wireless.

Otero

When a former labor leader suddenly starts advocating for the interests of AT&T and other super-sized telecommunications companies, even as AT&T’s unionized work force prepared to strike, the smell of Big Telecom money and influence permeates the air.

Jack Otero, identified in the Des Moines Register as “a former member of the AFL-CIO Executive Council and past national president of the AFL-CIO’s Labor Council for Latin American Advancement,” penned a particularly suspicious love letter to deregulation that might as well have been written by AT&T’s director of government relations:

[…]Industries — like broadband Internet — are thriving and creating innovations. Tossing a regulatory grenade into these businesses could wreck markets that create value for consumers and jobs for workers.

The United States is one of the most wired nations in the world. More than 95 percent of households have access to at least one wireline broadband provider, and the vast majority can connect at speeds exceeding 100 Mbps. And monthly packages start as low as $15. That means more families can go online to improve their job skills, look for work or help the kids with their school assignments.

More choices and higher speeds — the signs of a vibrant market — are the product of private investment, not public dollars. Internet service providers have invested over $250 billion in the last four years alone. This has created roughly half a million jobs laying fiber-optic and coaxial cable.

But some squeaky wheels are demanding heavy-handed regulations that would move our broadband Internet to the European model, where taxpayers have to subsidize outdated networks with slow speeds. Some want broadband providers to be required to lease their networks to competitors at discounted prices — as they do in Europe. But lawmakers in both parties agree that this policy, tried in the 1996 Telecommunications Act, failed miserably.

Others argue that broadband Internet providers should not be able to impose a small surcharge on the tiny percentage (less than 1 percent) of consumers who download hundreds of movies and tens of thousands of songs every month — effectively the data usage of a business. They say these fees discriminate against online video companies like Netflix. But that’s silly. More than 99 percent of users can watch plenty of Apple TV or Netflix without approaching the lowest data allotment. Without tiered pricing plans, the rest of us would have to underwrite these super-users.

Okay then.

Otero’s Fantasy World of Broadband sounds great, only it does not exist for the vast majority of Americans. Are most of us able to connect at speeds exceeding 100Mbps?

If you happen to live in a community served by a publicly-owned broadband provider Otero effectively dismisses, you can almost take this fact for granted.

Some of America’s most advanced telecommunications providers are actually owned by the public they serve in dozens of communities small and large. EPB Fiber, Greenlight, Fibrant, Lafayette’s LUS Fiber, among others, deliver super-fast upload and download speeds at very reasonable prices while the giant phone and cable companies offer less service for more money.

The only major telecommunications company with a wide deployment of fiber-to-the-home service is Verizon Communications.

You cannot easily buy residential 100Mbps service from Time Warner Cable, AT&T, CenturyLink, Frontier, FairPoint, or a myriad of other telecom companies at any price, unless you purchase an obscenely expensive business account. From the rest, 100Mbps service typically sets you back $100 a month.

Otero’s quote of affordable $15 broadband is not easy to come by either. It usually requires the customer to qualify for food stamps or certain welfare programs, have a family with school-age children, a perfect payment history, and no recent record of subscribing to broadband service at the regular price.

The only people who believe America is the home of a vibrant market for broadband service are paid employees of telecom companies, paid-off politicians, or their sock-puppet friends and organizations who more often than not receive substantial contributions from phone or cable companies. The fact is, the United States endures a home broadband duopoly in most communities — one cable and one phone company. They charge roughly the same rates for a level of service that Europe and Asia left behind years ago. Broadband prices keep going up here, going down there.

Simply put, Mr. Otero and actual reality have yet to meet. Consider his nonsensical diatribe about the impact of the “heavy-handed” 1996 Telecommunications Act, actually a festival of mindless deregulation that resulted in sweeping consolidation in the telecommunications and broadcasting business and higher prices for consumers.

Otero is upset that big companies like AT&T and Verizon originally had to open up their networks in the early 1990s to independent Internet Service Providers who purchased wholesale access at fair (yet profitable) prices. Those fledgling ISPs developed and marketed third-party Internet service based on those open network rates. Remember the days when you could choose your ISP from a whole host of providers? In some markets, this tradition carried forward with DSL service, but for most it would not last.

The telecommunications industry managed to successfully lobby the government and federal regulators to change the rules. Phone companies did not appreciate the fact they had to open their networks for fair access while cable operators did not. So in 2005, the FCC allowed both to control their broadband networks like third world despots. Competitors were effectively not allowed. Wholesale access, where available, was priced at rates that usually guaranteed few ISPs would ever undercut the cable or phone company’s own broadband product.

The lawmakers who believed open networks represented awful policy were almost entirely corporate-friendly or recipients of enormous campaign contributions from the telecom companies themselves.

So which market is actually on the road to failure?

The LCLAA couldn’t do enough to help AT&T swallow up competitor T-Mobile USA.

The American broadband business model is a firmly established duopoly that charges some of the world’s highest prices and has rapidly fallen behind those “failures” in Europe.

In the United Kingdom, BT — the national phone company, is required to sell access at the wholesale rates Otero dismisses as bad policy. As a result, UK consumers have a greater choice of service providers, and at speeds that are increasingly outpacing the United States. Nationally backed fiber to the home networks in eastern Europe and the Baltic states have already blown past the average speeds Americans can affordably buy from the cable company.

Even Canada requires Bell, the dominant phone company, to open its network to independent ISPs selling DSL service. Without this, Canadians would rarely have a chance to find a service provider offering unlimited, flat rate service.

Otero’s final, and most-tired argument is that data caps force “average” users to subsidize “heavy” users. In fact, as Stop the Cap! reported this week, that fallacy can be safely flushed away when you consider the largest ISPs pay, on average, just $1 per month per subscriber for usage, and that price is dropping fast. The only thing being subsidized here is the telecom “dollar-a-holler” fund, paid to various mouthpiece organizations who deliver the industry’s talking points without looking too obvious.

The Des Moines Register omitted the rest of Mr. Otero’s industry connections. We’re always here to help at Stop the Cap!, so here is what the newspaper forgot:

• Mr. Otero is a board member of Directors of the U.S. Hispanic Leadership Institute (USHLI), a group funded in part by AT&T and Verizon;
• He is the past president of the Labor Council for Latin American Advancement, a group that enthusiastically supported the anti-competitive merger of AT&T and T-Mobile USA;

Mr. Otero has a side hobby of penning nearly identical editorials with largely these same broadband talking points. One wonders what might motivate him into writing letters to the Des Moines Register, the Lexington Herald-Leader, the Gainesville Sun, the Star-Banner, and the Ledger-Inquirer.

Otero may have a case for plagiarism, if he chooses to pursue it, against Mr. Roger Campos, president of the Minority Business RoundTable (the top cable lobbyist, the National Cable & Telecommunications Association is labeled an MBRT “strategic partner” on their website). Campos uses some of the exact same talking points in his own “roundtable” of letters to the editor sent to newspapers all over the place, including the Ventura County Star, the Leaf Chronicle, and the Daily Herald.