While incumbent phone and cable operators often try to directly block community broadband projects, sometimes politics and special insider interests also get in the way.  One of our loyal readers shared a piece with us published in Fierce Telecom that outlines the trouble spots:

Gov. Bobby Jindal Blows It for Louisiana; Wife’s Foundation Heavily Supported By AT&T

Jindal's wife's charity is a recipient of AT&T money.

The U.S. Dept. of Commerce awarded $80.5 million to help drain Louisiana’s broadband swamp with a new statewide fiber network linking the most rural and poor areas of the state, including schools, libraries, hospitals, and universities.  Users could have obtained service from 10Mbps-1Gbps, but not if Jindal had his way.  He preferred AT&T (and the state’s cable operators) handle everything the same way they have traditionally handled telecommunications in the state — service in big cities and next to nothing everywhere else.  In addition to directly supporting the governor, AT&T contributes substantially to a charitable foundation founded by Jindal’s wife.

Jindal never openly blocked the project.  Instead, his administration “dithered and bickered” over the fiber network and ran the clock out.  Last October, the Commerce Department revoked the grant, leaving Louisiana’s Broadband Alliance with little more than a plan they’ll never be able to implement as long as Jindal occupies the governor’s office.  Stop the Cap! covered the mess back in November.

Public Service Commissioner Foster Campbell:

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

AT&T-Backed Astroturf Operation Scandalizes the Mayor’s Office and Ruins A High Tech Training Program

Marks

As Stop the Cap! wrote last fall, a scandal involving AT&T and the mayor of the state capital of Florida ultimately cost the city of Tallahassee a $1.6 million dollar federal broadband grant to expand Internet access to the urban poor and train disadvantaged citizens to navigate the online world.

Mayor John Marks never bothered to inform the city he had a direct conflict of interest with the group he strongly advocated as a participant in the grant project. The Alliance for Digital Equality (ADE) is little more than an AT&T astroturf effort — a front group that did almost nothing to bring Internet access to anyone. Mayor Marks was a paid adviser.

After the media got involved, the mayor’s office hoped the whole project would just go away. And it did, along with the $1.6 million.

Wisconsin Republicans <Heart> AT&T, Even When It Means Forfeiting $23 Million for Better Broadband

Wisconsin Gov. Scott Walker is a close friend of AT&T.  So close, when the phone company was threatened with the loss of revenue earned from the institutional broadband network it leases to the state, Walker and his Republican colleagues intervened, literally turning away $23 million in government stimulus funding.  Walker alone has accepted more than $20,000 in campaign contributions from AT&T.  Stop the Cap! covered this story in detail in February 2011.

Governor Walker (R-AT&T)

The decision to return the money had a direct impact on 380 Wisconsin communities, 385 libraries, 82 schools, and countless public safety offices across the state.  Namely, being stuck with AT&T’s outdated and expensive network the state leases in successive five year contracts.  Since broadband stimulus funding requires the construction of networks designed to last 20 years, not five, Walker’s insistence on sticking with AT&T made the stimulus funding off-limits.  But what are friends for?

AT&T has historically had no trouble getting its phone calls returned by Republican state lawmakers, who have cheered most of AT&T’s proposed legislation through the state legislature.  Today, Wisconsin takes a “hands off” approach with the state’s cable and phone companies, passed a statewide franchising bill that stripped oversight away from local communities, and AT&T’s landline network faces little scrutiny in the state, especially in rural communities.

The state university is now attempting to bypass Walker with its own $37 million project, but it will never serve Wisconsin consumers.  The institutional network will target schools, hospitals and first responders.

As Fierce Telecom notes, other communities could face the loss of their stimulus funding if they do not get busy building the projects they promised.  The Rural Utilities Service, part of the U.S. Dept. of Agriculture, has put several projects on notice they could forfeit broadband stimulus funding if they fail to meet project deadlines.

Last fall, our regular reader Scott wrote us about recent rate increases Bright House Networks imposed on broadband-only customers: $50/month for Internet access.  He learned from Stop the Cap! that a virtually identical, but lesser-known provider was ready and willing to provide six months of essentially equivalent Internet service for $20 less a month.

If your new customer promotion with Bright House or Time Warner Cable has ended, Earthlink can deliver essentially equivalent cable Internet service for $29.99 a month for six months. You do not receive the Powerboost temporary speed jump or a Road Runner/Bright House e-mail account, but you do save $120 over the promotional period.

Scott’s six month promotion with Earthlink was almost up, so he started calling Bright House looking for a returning customer promotion from them, and ran into a brick wall.

A Bright House promotion from a third party reseller

“Corporate wouldn’t budge,” Scott shares. “Two people kept giving me the run-around and excuses.”

“I was able to make the switch back to Bright House from Earthlink to keep my $30 a month promotional price for a second consecutive six month period,” Scott explains. “[But] I had to call an authorized [reseller] to give me the price as a ‘new customer.'”

But it wasn’t easy.  Involving third party resellers can become complicated because those independent businesses rely on commissions earned when new customers sign up.  An existing cable customer bouncing between providers may not be eligible for a commission, and can stall the switching process.

Scott spent an hour on the phone with Bright House getting them to apply the promotion to his account.

In general, Time Warner Cable customers have been able to bounce between new customer promotions from Earthlink and the cable company and back again without too much trouble.  Time Warner’s own promotion offers $29.99 a month Internet for a year, which is actually better than Earthlink’s six month deal.  Do a Google search for “Bright House promotions” and you will find third-party resellers all pitching six months of Bright House broadband service for $29.99 a month.

We recommend calling providers directly to establish service where possible, and if they refuse, you can always threaten to walk.  Providers become a little more willing to deal if you’re prepared to pull the plug.

Phillip "Keeping an Eye on Time Warner's Eye" Dampier

Today’s announcement by Time Warner Cable that it is reintroducing usage based billing, at least optionally for customers in southern Texas, is a concerning development that requires further examination and vigilance.  But before we delve into that, I’d like to thank the company for avoiding the kind of mandatory usage billing/cap system we’ve seen appearing at certain other providers.  We also welcome the company’s admission that they have earned enormous profits from unlimited consumption plans and consider that pricing part of the success story they’ve had selling Internet access.

Stop the Cap! has never opposed optional usage-based billing tiers for customers who feel their light usage justifies a service discount.  However, industry trends so far have made no provisions for truly unlimited usage plans that sit side by side tiered plans without quietly diluting the value of flat rate Internet with tricks and traps in the fine print.  We have serious concerns this “foot in the door” to Internet Overcharging could eventually become mandatory for all customers.  Perhaps Time Warner Cable will be different than all the rest.  We can only hope so.

Let’s break it down:

First, Time Warner Cable’s admission it blew it the first time it experimented with these pricing schemes is most welcome.  Being on the front lines of the battle against the company’s Internet Overcharging experiment in 2009 remains very-well-documented on this website.  We confronted arrogant local management that argued usage billing was “fair” and would barely affect any customer.  In fact, the original plan a later revision would have tripled flat rate Internet access to a ridiculous $150 a month.

The company’s 2009 “listening tour” was also a farce, with a number of e-mailed comments deleted unread (we know, because Time Warner’s comment system sent e-mail to customers telling them exactly that.)  Local media outlets, newspaper editorials, and customers made it quite clear: customers want their unlimited Internet access left alone.  They do not want to learn the mysteries of a gigabyte, they don’t want to watch a gauge to determine how much usage they have left, and they sure don’t want to pay any more for broadband service.

If Jeff Simmermon, Time Warner Cable’s director of digital communications, now represents the prevailing attitude about unlimited Internet access among Time Warner Cable’s executive management, that is a very welcome change indeed.  But we’re not completely convinced.  For nearly two years, Time Warner executives have talked favorably about usage-based billing as the “fairest way” to bill for Internet usage.  Besides Simmermon’s comments, we have seen nothing from CEO Glenn Britt or CFO Irene Esteves that indicates they have changed their original views on that.

Unfortunately, we’ve learned over the last three years today’s promises may not mean a lot a year from now.  We’ve watched too many companies introduce these pricing schemes and then gradually tighten the noose around their customers.  Once broadband usage is monetized, Wall Street looks to the practice of charging for usage as a revenue source, and they pressure companies to keep that money flowing.  What begins as an optional tiered plan can eventually become the only plan when flat rate broadband is “phased out.”

Canadians understand this is not unprecedented.  They’ve been down this broadband road before, and it is loaded with expensive potholes and broken promises to repair them.  Usage allowances have actually dropped at some Canadian providers.  The fixed maximum on overlimit fees has gradually been relaxed or removed altogether, exposing Canadian consumers to broadband bill shock.

Time Warner Cable customers are now paying upwards of $50 a month for broadband after consecutive annual rate increases.  That’s plenty, and usage should remain unlimited for that kind of money.

Still, Stop the Cap! has never been opposed to truly optional usage-based billing plans.  We’re just unconvinced companies will keep the wildly popular flat rate pricing if boatloads of additional revenue can be made dragging customers to tiered usage plans, particularly in the absence of aggressive competition.  Just ask AT&T.

Second, as we’ve seen on the wireless side, “unlimited Internet access” means one thing to consumers and all-too-often something very different to providers.  For example, companies have discovered they can claim to provide unlimited access but then de-prioritize flat rate traffic, or even worse, throttle speeds and give preferential treatment to usage-based billing traffic.  Time Warner Cable needs to commit that unlimited access means exactly that — no traffic prioritization, no speed throttles, and no sneaky fine print.

Third, we don’t expect Time Warner will get too many takers for their Broadband Essentials Internet program.  The discount, just $5 a month, is quite low for broadband service limited to 5GB per month.  Exceeding that limit is quite easy, and after just 5GB of “excess usage,” the discount is eaten away and the penalty rate of $1/GB kicks in.  That could ultimately risk up to $25 a month in extra charges.  I’m uncertain how many customers would want to risk exposing themselves to that for a modest discount.

While we are not issuing a Call to Action over these developments, we will be watching them very closely.  Time Warner Cable should make no mistake: if their usage billing plans begin to eat away at fairly priced unlimited access plans, we will once again picket the company and do whatever is necessary to bring political and consumer pressure to force them to rescind these kinds of pricing schemes yet again.

CenturyLink runs specials on their website that offer extra savings when ordered online.

Your $50 monthly broadband bill has been burning a hole in your wallet and you think there should be a cheaper price available somewhere, right?

The answer is, for most of us, there is.  You just have to look.

The most expensive Internet access around comes when you buy broadband-only service from a provider.  Both cable and phone companies have been incrementally punishing their “broadband-only” customers for years, tacking on $5, $10, even $15 to the price because you have chosen not to bundle broadband with other services the company sells.  It is not unusual to see some cable companies charging $55-60 for standard Internet service.  When you call to inquire, they are sure to begin aggressively upselling you to a bundled service package, arguing you can add cable TV and phone service for $20-30 more a month.  That sounds like a better deal, unless you honestly don’t care about either service.

Welcome to the world of marketing, where the “value perception” is key to driving the average revenue collected from each subscriber higher and higher.  You end up buying services you probably would not have considered, but because they seem so inexpensive when compared with the price of the service you are interested in, why not?

Phone companies do the same thing, but many of them also love to bury hidden charges in the fine print and commit you to 1-3 years of service to guarantee the advertised price.  Companies like Frontier Communications may pitch DSL service for just $15 a month, but keep reading and you will discover the taxes and fees raise that price substantially.  In fact, that particular phone company is notorious for charging substantial modem rental fees and what they call a “High Speed Internet” surcharge.  To get the lowest price from them, you will be a Frontier customer for at least a year, depending on the promotional offer selected.

Frontier redefines "value": This attractive looking offer "fine prints" the $6.30 modem rental fee, is for service "up to" 1Mbps (so much for "high speed"), has a one-year service commitment with a $50 early termination fee, and does not include unspecified "taxes and surcharges" which run extra.

You can break free of the marketing circus by concentrating on finding the best possible deal for the service(s) you really care about.

1. Check advertising offers on television and in newspapers, but always read the fine print;
2. Visit the website of each local provider and look for “Internet-only” offers that may deliver extra savings, but only when you order online;
3. Call providers and ask them about their various deals and inquire “is this the best offer you have right now?;”
4. Use search engines and type in your provider’s name and words like “deals,” “offers,” or “promotion.”  Third party authorized resellers may have an offer that works better for you.

Sometimes you can get excellent results playing providers off each other.  Try contacting the social media representatives of different providers in your area to unlock hidden deals, and more importantly, customer retention offers.  One Rochester reader of ours got Time Warner Cable to open negotiations to keep his business with this tweet:

Getting ready to schedule my @TWCable disconnect after rate increase – should I go with @dishnetwork over @DirecTV or vice versa?

He received a substantial retention offer within hours of alerting Time Warner of his discontent (he’s also a rabid hockey fan, and the ongoing MSG-Time Warner Cable dispute made satellite an attractive alternative.)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KNXV Phoenix Which broadband provider saves you the most money 2-7-12.mp4[/flv]

KNXV in Phoenix helped residents in that Arizona city figure out who was cheaper, CenturyLink or Cox Cable.  And what about using mobile broadband for a home broadband replacement?  (3 minutes)

Phillip "Break Free from 'What's In It For Me'-AT&T" Dampier

[We are reprinting this because it succinctly and persuasively proves a point we’ve been making at Stop the Cap! since 2008.  Broadband is not just a “nice thing to have.” It is as important as a phone line, electricity, and safe drinking water.  News, education, commerce, and culture increasingly utilize the Internet to share information and entertain us. Essential utility services can either be provided by a private company operating as a monopoly with oversight and regulation, or operate strictly in the public interest in the form of a customer-owned cooperative, a direct service of local government, or a quasi-public independent non-profit.

In North America, broadband was originally considered a non-essential service, and private providers in the United States lobbied heavily to maintain absolute control of their broadband networks, free to open them to share with other providers, or not.  They also won sweeping deregulation and are still fighting today for decreased oversight.  The results have been uneven service.  Large, compact cities enjoy modern and fast broadband while smaller communities are forced to live with a fraction of the speeds offered elsewhere, if they have access to the service at all.

With broadband now deemed “essential,” local governments have increasingly sought to end the same old excuses with the “don’t care”-cable company or “what’s in it for me”-AT&T and provide 21st century service themselves, especially where local commercial providers simply won’t step up to the plate at all.  Suddenly, big cable and phone companies are more possessive than your last boy/girlfriend. The companies that for years couldn’t care less about your broadband needs suddenly obsess when someone else moves in on “their territory.” They want special laws (that apply only to the competition) to make sure your broadband future lies exclusively in their hands.

Susan P. Crawford understand how this dysfunctional, controlling relationship comes at the expense of rural America.  She’s a visiting professor at the Harvard Kennedy School of Government and Harvard Law School. In 2009, she was a special assistant to President Barack Obama for science, technology and innovation policy. Her opinions were originally shared with readers of Bloomberg News.]

In cities and towns across the U.S., a familiar story is replaying itself: Powerful companies are preventing local governments from providing an essential service to their citizens. More than 100 years ago, it was electricity. Today, it is the public provision of communications services.

Susan Crawford

The Georgia legislature is currently considering a bill that would effectively make it impossible for any city in the state to provide for high-speed Internet access networks — even in areas in which the private sector cannot or will not. Nebraska, North Carolina, Louisiana, Arkansas and Tennessee already have similar laws in place. South Carolina is considering one, as is Florida.

Mayors across the U.S. are desperate to attract good jobs and provide residents with educational opportunities, access to affordable health care, and other benefits that depend on affordable, fast connectivity — something that people in other industrialized countries take for granted. But powerful incumbent providers such as AT&T Inc. and Time Warner Cable Inc. are hamstringing municipalities.

At the beginning of the 20th century, private power companies electrified only the most lucrative population centers and ignored most of America, particularly rural America. By the mid-1920s, 15 holding companies controlled 85 percent of the nation’s electricity distribution, and the Federal Trade Commission found that the power trusts routinely gouged consumers.

Costly and Dangerous

In response, and recognizing that cheap, plentiful electricity was essential to economic development and quality of life, thousands of communities formed electric utilities of their own. Predictably, the private utilities claimed that public ownership of electrical utilities was “costly and dangerous” and “always a failure,” according to the November 1906 issue of Moody’s Magazine. Now more than 2,000 communities in the U.S., including Seattle, San Antonio and Los Angeles, provide their own electricity.

Today, the Institute for Local Self-Reliance, which advocates for community broadband initiatives, is tracking more than 60 municipal governments that have built or are building successful fiber networks, just as they created electric systems during the 20th century. In Chattanooga, Tennessee, for example, the city’s publicly owned electric company provides fast, affordable and reliable fiber Internet access. Some businesses based in Knoxville — 100 miles to the northeast — are adding jobs in Chattanooga, where connectivity can cost an eighth as much.

Meanwhile, less than 8 percent of Americans currently receive fiber service to their homes, compared with more than 50 percent of households in South Korea, and almost 40 percent in Japan. Where it’s available, Americans pay five or six times as much for their fiber access as people in other countries do. Fully a third of Americans don’t subscribe to high-speed Internet access at all, and AT&T Chief Executive Officer Randall Stephenson said last month that the company was “trying to find a broadband solution that was economically viable to get out to rural America, and we’re not finding one, to be quite candid.” America is rapidly losing the global race for high-speed connectivity.

Tamping Down Enthusiasm

We've done something like this once before.

Like the power trusts of the 20th century, the enormous consolidated providers of wired Internet access want to tamp down any enthusiasm for municipal networks. Last year, telecom lobbyists spent more than $300,000 in a failed effort to block a referendum in Longmont, Colorado, to allow that city to provide Internet access. Time Warner Cable managed to get a North Carolina law enacted last year that makes launching municipal networks there extraordinarily difficult. The pending measures in Georgia and South Carolina are modeled on the North Carolina bill.

The Georgia bill is chock-full of sand traps and areas of deep statutory fog from which no local public network is likely ever to emerge. In addition to the ordinary public hearings that any municipality would hold on the subject, a town looking to build a public network would have to hold a referendum. It wouldn’t be allowed to spend any money in support of its position (there would be no such prohibition on the deep-pocketed incumbents). The community wouldn’t be allowed to support its network with local taxes or surplus revenues from any other services (although incumbents routinely and massively subsidize their networks with revenue from other businesses).

Most pernicious of all, the public operator would have to include in the costs of its service the phantom, imputed “capital costs” and “taxes” of a private provider. This is a fertile area for disputes, litigation and delay, as no one knows what precise costs and taxes are at issue, much less how to calculate these amounts. The public provider would also have to comply with all laws and “requirements” applicable to “the communications service,” if it were made available by “a private provider,” although again the law doesn’t specify which service is involved or which provider is relevant.

The end result of all this vague language will be to make it all but impossible for a city to obtain financing to build its network. Although the proponents of Georgia’s bill claim that they are merely trying to create a level playing field, these are terms and conditions that no new entrant, public or private, can meet — and that the incumbents themselves do not live by. You can almost hear the drafters laughing about how impossible the entire enterprise will be.

Globally Competitive Networks

Right now, state legislatures — where the incumbents wield great power — are keeping towns and cities in the U.S. from making their own choices about their communications networks. Meanwhile, municipalities, cooperatives and small independent companies are practically the only entities building globally competitive networks these days. Both AT&T and Verizon have ceased the expansion of next-generation fiber installations across the U.S., and the cable companies’ services greatly favor downloads over uploads.

Congress needs to intervene. One way it could help is by preempting state laws that erect barriers to the ability of local jurisdictions to provide communications services to their citizens.

Running for president in 1932, Franklin D. Roosevelt emphasized the right of communities to provide their own electricity. “I might call the right of the people to own and operate their own utility a birch rod in the cupboard,” he said, “to be taken out and used only when the child gets beyond the point where more scolding does any good.” It’s time to take out that birch rod.