The Rural Mobile and Broadband Alliance (RuMBA) USA released a whitepaper this week concluding that satellite-delivered broadband is more promise than results.

“When measured against the prevailing definition of broadband, satellite technology falls far short of conventional wired and wireless alternatives, mainly due to latency, bandwidth, price, performance and service shortcomings,” the Alliance wrote in a statement.

In other words, everything.

“Given the limitations of satellite Internet service detailed in this report, RuMBA cannot consider satellite a viable solution for rural communities who are increasingly cut off from mainstream America by the lack of access to affordable broadband service,” says Luisa Handem, founder and Managing Director of RuMBA USA.

“There is every indication that America’s reliance on broadband is only going to increase, especially in the areas of business, education, healthcare, government and entertainment, so it is vital that America’s rural communities have all the facts before deciding on broadband access, and delivering those facts is what this paper is about,” says Sascha Meinrath, Director of Open Technology Initiative, New America Foundation.

Among the Key Findings:

• The latency inherent in satellite Internet connections limits their use for standard broadband functions such as Voice over IP (VoIP) and Virtual Private Networks (VPNs).

• The capacity limits of satellite Internet service rule out broadband functionality taken for granted by Americans living in communities served by cable, fiber optic, and DSL services. These functions include automatic software updates, online backup, streaming video, telecommuting, and website hosting.

• Notwithstanding those limitations satellite Internet service is less affordable than wired Internet service.

While Stephen Cobb, author of a whitepaper on the subject, considers satellite Internet access an amazing technology, it has proved to be a poor substitute for ground-based, wired alternatives, including DSL.

More than 20 million rural Americans live without any access to the Internet, despite the country’s growing reliance on broadband service.  Those that do subscribe to satellite service generally report a dismal experience, in part because of a punitive usage limit that dramatically lowers already-slow speeds when exceeded.  Weather disturbances and heavy snow can also disrupt satellite signals, and contract terms often carry hefty termination fees if one cancels before the end of the contract.

Remember when Bell’s head of government affairs Mirko Bibic told Parliament usage-based billing was necessary because he didn’t think it fair that all Canadians should pay for “heavy users” of the company’s Internet service?  That was a few months ago.  This is April — time for a rate increase that will jack Bell broadband service rates up an additional $3 a month, effective in May.  That’s a rate increase every customer will pay, and comes with Bell’s everyday Internet Overcharging scheme — usage caps and overlimit fees.

Stop the Cap! reader Alex in Quebec sent a copy of his bill showing Bell’s “Price Update.”  They don’t even want to call it a rate increase.

Bell's notification to customers in Quebec their bills are going up.

“Bell Canada will increase their Internet rates by as much as 15% (for Québec ”Essential” users),” Alex says. “Although $3 may seem like a negligible charge, it especially affects those with budget Internet plans, such as Essential, E Plus, and Performance ‘Fibe’ 6.”

Bell’s website cannot even get the story straight, originally telling customers their overlimit fees would now be rounded to the nearest gigabyte, instead of megabyte.  A Bell spokesperson tells Stop the Cap! that is a typo — they really still mean megabyte.

Bell is one of the few phone companies out there actually increasing their long distance calling rates as well, Alex tells us.  The original announcement came around the same time as the earthquake in Japan, underlining how essential long distance can be during natural disasters.  Many cable companies have waived long distance fees to Japan altogether.  Not Bell.

The rate increases mean customers like ‘Jackorama’ in Hamilton will pay $56.90 for “up to 7Mbps” ‘Performance DSL’ service.  After HST fees, he’ll pay $64.30 just for broadband service, with a 60GB monthly usage limit.  If he exceeds that, he’ll pay even more — $2.50 per gigabyte, or, if he knows he’ll exceed the cap in advance: $5/month for 40 GB, $10/month for 80 GB, or $15/month for 120 GB.

That also assumes Bell can count usage correctly, and there is every indication they cannot.  The company has admitted its usage meter is prone to errors — misreads they are still prepared to bill their customers.

One of Canada’s largest phone companies is willing to admit it is prepared to launch an Internet Overcharging scheme on its broadband customers now, while western Canada’s largest cable company would prefer to wait until after the next election to spring higher prices on consumers.

When Shaw’s president Peter Bissonnette told investors and the media he believes users who use more should pay more, all that needs to be put in place is exactly how much more Shaw customers will pay for already-expensive Internet access.  With Shaw making noises about usage-based billing, Telus felt it was safe enough to dive right into their own usage cap and overlimit fee pricing scheme.

Shawn Hall, a spokesperson for Telus, told CTV News that the phone company was ready to begin overcharging customers as soon as this summer.

Shawn Hall (CTV BC)

“It’s only fair that people pay for how much Internet capacity they use,” Hall told CTV.

Telus doesn’t seem to be too worried about the fact usage-based billing has become a major issue in the upcoming elections.  A review of the pricing scheme by the Canadian Radio-television and Telecommunications Commission is due within months, but the phone company isn’t going to wait.

Shaw is being more cautious.  After the pretense of a “listening tour,” and with federal officials breathing down their necks, Shaw wants to wait until the elections are over before moving forward on their own price gouging, according to Openmedia.ca.

As Stop the Cap! has told our readers repeatedly, corporate “listening tours” about Internet Overcharging are about as useful as lipstick on a pig.  Providers don’t actually listen to their customers who are completely against these pricing schemes — and every survey done tells us that represents the majority of customers.  Instead, they only hear what they want to hear, cherry-picking a handful of useful statements in order to make it appear they are responsive to customer needs.

Shaw heavily redacted their own meeting minutes on their website, completely ignoring a large number of customers unalterably opposed to usage-based billing of any kind.  Instead, statements that fit their agenda were repeated in detail, especially those that suggested average users don’t want to pay for heavy users.

Shaw executives discuss with investors how they will stick customers with usage-based billing, despite customers telling them they don’t want these schemes. April 13, 2011. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

It’s like arguing marathon runners should pay extra for the oxygen they consume because others don’t breathe as much.  It’s all a lot of hot air.

Broadband traffic costs providers only a small percentage of the amount they charge customers, and that number is dropping.  Yet providers want to raise prices, restrict usage, and charge punitive fees for those who exceed their arbitrary usage limits.

The power of the duopoly in place across most of western Canada has given providers little to fear from overcharging consumers.

Shaw CEO Bradley Shaw told investors they know few customers will switch providers if usage-based billing is imposed.

“We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services,” Shaw said.

The fact many Shaw customers have no other choice other than Telus does not escape Shaw’s notice either.

Telus’ Hall even had the nerve to call their Internet Overcharging pro-consumer.

Bissonnette

“It’s going to be really customer friendly,” he said. “You’d be forgiven for the first month you go over. You’d get lots of warning, lots of notice that you were going over with options of moving to other plans.”

Except an unlimited one — that is not available.

Openmedia.ca is trying to hold politicians’ feet to the fire on the issue of Internet Overcharging, demanding answers from every major party in Canada about how they will keep providers from imposing these pricing schemes.

Every major party, with one exception — the Conservative Party of Canada, has answered.  That’s the party currently in power.

Liberal Leader Michael Ignatieff has spoken out against usage-based billing, while NDP Leader Jack Layton has promised to ban it outright if elected to power.

Nearly a half-million Canadians have signed a petition opposing usage-based billing, and providers are showing once again they are not open to listening to anyone but their bean counters, intent on extracting as much cash as possible from Canadian customers’ wallets.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CTV British Columbia – Shaw planning to revive metered internet billing critics 4-25-11.flv[/flv]

CTV in British Columbia covers Shaw’s plans to revive metered Internet billing later this year.  (2 minutes)

Joe Brown was obviously not the right person for G4TV’s Attack of the Show to talk to about the issue of Internet Overcharging.

As AT&T begins notifying their DSL and U-verse customers they are about to face usage limits on their broadband service, G4TV sought out reaction from the features editor of Gizmodo.com, who was wholly unprepared to inform viewers about the facts behind AT&T’s usage caps and their implications for customers.

While Brown and G4TV were joking about users having to curtail game downloads, for millions of AT&T customers, it’s no laughing matter.

AT&T’s announced 150-250GB limits will eventually cost customers $10 or more for each extra 50GB allotment, on top of their already-expensive broadband service package.

“It really had to happen eventually I think,” Brown told viewers.  “People are using a lot of bandwidth.”

Gizmodo's Joe Brown talks with G4TV's Attack of the Show

But Brown’s observation conflicts with AT&T’s own claim “only a tiny minority of customers” will use more than the company wants to allow, with the average AT&T customer consuming 18GB per month.  AT&T isn’t telling the full story about that either.

For those “heavy users” AT&T wants to restrict first, the implications go well beyond curtailing Netflix and playing online games.

“As a software developer who works under a Linux environment and is forced to telecommute from home one week per month, these caps would absolutely kill me,” writes Joe Stein from Sparks, Nev.  “If you are a retired person using your computer to check e-mail and browse the headlines, you will obviously never exceed AT&T’s caps, but for technology innovators and those like me in the software development field, 150GB is nothing.”

Stein downloads regular updates for Linux, exchanges software back and forth with the office several times a day, and uses video conferencing regularly when he works from home.

“Not all online video is about adult entertainment or downloading movies,” Stein says.  “Usage caps hurt anyone who has to work with large files or business-related video, and after the events this week, AT&T can afford to leave off the caps.”

Brown claims AT&T conducted “a study” in two cities which found that 98 percent of their customers used far less than the usage caps would allow.  What Brown does not know is that those two cities are Beaumont, Texas and Reno, Nevada — hardly superstars in the tech revolution.

“Nobody moves to greater Reno to be a software superstar, which is why I am in San Jose, Calif., all the time,” Stein says.  “But there is more to this area than casinos.”

Stop the Cap! has been helping consumers in both cities avoid AT&T because the company’s “study” came at the same time it was experimenting with an Internet Overcharging scheme that limited customers to as little as 20GB of usage per month — a strong incentive for customers to avoid high bandwidth services,  or better yet AT&T.  So it’s no surprise broadband users who know better chose an alternative provider, including Stein.

“I first became aware of the usage cap debacle a few years ago when AT&T tested usage caps in the Reno area, which covers Sparks,” Stein says.  “I saw the impact first hand when customers started getting notified they would have to pay substantially more for basic Internet service.”

AT&T first limited their broadband customers to as little as 20GB of usage per month, then claimed the average customer only uses 18GB, making their 150GB DSL cap "generous."

Stein left for the cable company — Charter Communications, and they have usage caps too, but they are rarely enforced and much higher than what AT&T offers DSL customers, Stein says.

Brown claims AT&T is trying to “get out ahead of people using too much,” a point in conflict with the fact AT&T is willing to sell consumers additional bandwidth on its “overcongested” network.

Brown’s suggestion that “bandwidth costs money” is partially true, but not in the context of AT&T’s usage limits.  The company that can afford fiber optic upgrades to deliver limitless television and telephone service apparently cannot afford the pennies in bandwidth costs customers consume as part of their broadband service, which can run $50 a month or more.

Pondering broadband usage “fairness” is a losing proposition for consumers… and reporters, too.

Once someone blindly accepts the premise AT&T needs data caps, with no evidence usage presents a technical or financial challenge for the company, the debate is quickly reduced into a numbers game about “how much usage is fair.”

Clearly for Brown and his friends, who admit they are dangerously close to reaching or exceeding AT&T’s limits, the answer to Brown wondering aloud if the caps would “do it for him” should be no.

Stop the Cap! believes no cap is worth living with, especially on AT&T’s enormous-sized broadband network, now increasingly designed to handle the multimedia rich Internet and their U-verse platform.

It is doubtful many will be assuaged by Brown’s comments that “AT&T sounded pretty cool” about how they will deal with those who exceed their arbitrary usage limits.  Why?  Because after the “fair warnings” AT&T will provide customers on its artificially limited network, they will drop the sledgehammer of higher bills on top of customers’ heads.

Brown should know better, especially after finding AT&T unwilling to discuss how often it intends to revisit its usage cap levels.  AT&T’s counterparts in Canada have already foreshadowed the answer.  Once the cap regime is in place, several companies lowered them, sometimes repeatedly, to further monetize broadband usage.  They also raised the prices of overlimit fees, often substantially.

AT&T depends on uninformed consumers and reporters not understanding the true facts about Internet Overcharging schemes.  It’s not too late for reporters like Joe Brown to undo the damage, however.

Stop the Cap! strongly encourages everyone to examine the evidence we have compiled here over the past two and a half years.  It’s not hard to discover AT&T’s usage caps have nothing to do with fairness, are arbitrary and unnecessary, and come as a result of providers seeking higher profits in an undercompetitive marketplace.

If we do not uniformly and loudly oppose usage limits, America’s broadband rankings, digital economy innovation, and high technology jobs are all at risk, just to satisfy AT&T’s insatiable appetite for higher profits.

(P.S. – Joe: How did you miss Comcast has been capping their customers at 250GB for two years now.  Say it ain’t so, Joe!)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/G4TV Attack of the Show ATT Caps Their Data Usage 3-15-11.flv[/flv]

G4TV’s ‘Attack of the Show’ misses the boat on AT&T’s Internet Overcharging scheme.  They did better covering Time Warner Cable’s attempt at Internet Overcharging in 2009.  It’s time to revisit this issue and get involved in the fight that could hurt the very audience watching this show.  (6 minutes)

Good news to report for North Carolina consumers.  With a coordinated pro-consumer pushback, we’re achieving some victories in the battle to stop big cable and phone companies from pushing community broadband networks out of the state.  Since Rep. Marilyn Avila (R-Time Warner Cable) was not amenable to withdrawing the bill cable lobbyists authored, your appeals to members of the Finance Committee made a major difference: winning exemptions for the state’s existing community networks and redefining an under-served area to any community where 50 percent of households cannot obtain high-speed broadband service.

North Carolina’s local media is becoming increasingly aware of H.129 for the first time, and so are many consumers — outraged over reports state government is spending its valuable time working on the cable industry’s wishlist.

Today was a very important victory and we are glad to have done our part to win it, but this battle is by no means over.  We fully expect Time Warner trickery — their lobbyists will be back next week to try and undo what we have accomplished together.

We’ve been here before.  A de-fanged bill is okay, but a bill voted down altogether is better.

Please thank Chairman Mitchell S. Setzer for his call for a recorded vote, which helped us track who represents consumers and who fights for the cable company’s agenda.

We’d also like to thank Rep. K. Alexander, Rep. Faison, Rep. Luebke, Rep. Ross, Rep. H. Warren, and Rep. Womble for their strong support for better broadband in North Carolina.  There will be more to thank along the way, but this is a good start.

We are continuing the consumer fight to see H.129 shot down as the travesty it represents.  This proposed legislation does not deliver a single new broadband connection, improve ones that already exist, or deliver lower prices to anyone.

Citizens in Raleigh are making their feelings known on WRAL-TV’s website:

“NC should be encouraging and assisting rural cities and towns looking at doing this, not putting up obstacles. But I’m sure the Time Warner, Comcast and AT&T lobbyists have deep pockets full of excellent graft.”

“This all comes down to the city of Wilson. They offered every telecom and cable provider to provide 100Mbps internet access to 100% of the people in the city if they want it at a rate of $50/month (I think that was the amount). Every single private company laughed and said it was not profitable and they would take the contract. So, the City of Wilson took it upon themselves to provide the product the city wanted. Now, all of the companies are whining? Provide what the City of Wilson did at the price they did and there would be no problem. Don’t blame this on taxes. The simple issue is that TWC, Charter, and you name it want to make 100-200% profit and offer substandard high speed internet. “

“Come on NC. Reject the Bill and approve an order to allow cities to provide this technology if the monopolistic companies will not. Get them out of our state.”

“Frankly, if it were to mean that I could dump Time Warner Cable and their cra**y service and their “Oh we’re raising our rates again due to the Sun coming up 5 minutes late” attitude, I would be elated!”

“When will it ever be enough for the cable and phone companies? Their lines and equipment have been in place for YEARS and what do we get….rate increases every year, outages, lines cut, spotty internet service. It’s high time they have some competition. If they can afford to give new customers discounts for 12 months, why not keep the prices at that level with only moderate increase over time and then KEEP MORE customers in the fold? Just a thought!”

“The internet service offered by Wilson ROCKS. Twice the speed at half the price of TWC. No wonder they’re trying to block this from happening.”

The people are speaking, and they do not want state legislators moonlighting for the interests of cable and phone companies.  Remind your legislators you want more choice, not less.  Tell them to oppose H.129 and ask Rep. Avila to withdraw her bill.

Rep. Marilyn Avila (R-Time Warner Cable) at today’s House Finance Committee Meeting (1 Hour, 13 minutes)