John Badal, CEO of Sacred Wind Communications

NBC Universal and American Express today announced Sacred Wind Communications (Albuquerque, N.M.) as the winner and most inspiring small business in the “Shine A Light” program, determined by public vote.

Sacred Wind Communications will receive $50,000 in grant money and $50,000 in marketing support from American Express, and will be featured on MSNBC’s small business show, “Your Business.”

John Badal, described by the Shine A Light Foundation as an entrepreneur, founded Sacred Wind to provide service across the largely ignored Navajo Reservation in New Mexico.  Fewer than 40% of the homes had access to even basic telephone service, provided by Qwest on what the foundation describes as a “dilapidated telephone system.”

Badal, along with a few others, thought Qwest’s turtle-like-speed to provide basic telephone service was not acceptable.

Badal should know — he was the former president of Qwest New Mexico from 2000-2004, overseeing that phone network.

During his involvement with Qwest, the frustration to wire the economically challenged Native American community in his area was daunting.  He told Fierce Broadband Wireless that laying copper cable throughout a rugged, rural desert area to reach a small number of customers who couldn’t afford to pay much for service wasn’t economically feasible for Qwest.

In four years, Qwest only managed to bring phone service to 42 new customers–out of thousands. “It took us two years to get through the rights of way process. Six of those homes had moved by the time the process was completed. It would have taken 45 years to reach 70 percent of the homes in our territory,” Badal said. “We needed a different technology altogether. We needed to go wireless.”

Sacred Wind's service areas (click to enlarge)

Badal decided to build a for-profit telecommunications company with a business plan that would depend on funding from the government.

“The only way any company could hope to provide service to the Navajo Nation is with the help of the Federal Communications Commission’s Universal Services Fund,” Badal told New Mexico Business Weekly in 2005.

“We can make this affordable, where Qwest cannot,” says Badal, who expects half of the cost to be picked up by government funding. “That is a necessary part of this equation. Without that, the Navajo cannot be served.”

Virtually every American pays into the Universal Services Fund through a charge levied on telephone bills.  The funding underwrites the expense of providing rural America with access to basic telecommunications services.

In 2004, the same year Badal left Qwest, the company agreed to sell its telephone business on the Navajo Reservation to Badal’s new company.  Sacred Wind, which the company says “evokes a sense of connection between what we do – to send communications over the air – with a larger-than-life purpose for starting this business,” launched service two years later in 2006.

Sacred Wind uses recently developed wireless technology to provide phone service to 2,700+ customers, using both point-to-point wireless and fixed WiMAX to reach as many customers as possible in the sparsely populated desert region.  It’s a challenging proposition for any company, considering most of their service area has less than one home per square mile.  Even when finished constructing their network, Badal estimates there will only be two or three homes served per square mile.

One third of Sacred Wind’s customers live in Navajo or federal government sponsored public housing, another third live in small clusters of a half dozen homes separated by several miles, and the last third live at least a half mile from the nearest neighbor.  Most are economically disadvantaged and have household incomes below $15,000 a year — 57.9% living below the poverty level.  More than two-thirds of reservation homes have no telephone, with some driving up to 30 miles to reach the nearest pay phone.  Several lack access to electricity, which makes wireless phone service and broadband even more challenging.  Sacred Wind is exploring solar options to serve these unpowered homes.

The benefits achieved from Sacred Wind’s focus on their service area are obvious – they know the landscape, the culture, the economics, and the people.  The company will work on problems that a large multi-state carrier like Qwest would not.  Technicians trying to reach one customer five miles away from the nearest wireless base station could not get service until a technician experimented with bouncing the three gigahertz wireless signal off a granite cliff face to extend coverage, which worked.

A company specializing in providing service to rural Native Americans, that also has a non-profit arm dedicated to computer training, provides scholarships, and e-commerce opportunities for Native Americans, is a natural for recognition, and the public responded, calling Sacred Wind’s mission inspiring.

“It’s a real honor to be voted most inspiring small business in the Shine A Light program,” Badal said. “It’s so exciting and rewarding to start your own business and be able to make an impact on the community. Through the support we will receive from American Express as winner of this program, we will be able to further extend our commitment to serving the Navajo people with advanced technology and educational resources.”

Since August, people across the country have nominated thousands of small businesses for the “Shine A Light” program. Three finalists were ultimately selected with the help of host and entrepreneur Ellen DeGeneres, fashion designer and entrepreneur Diane von Furstenberg and MSNBC’s small business expert and host JJ Ramberg.

[flv width=”480″ height=”320”]http://www.phillipdampier.com/video/sacred wind intro.flv[/flv]

A one minute introduction to Sacred Wind Communications

Sacred Wind Broadband Speed/Pricing

In addition to telephone service, Sacred Wind also provides Internet access to its customers, and here is where the story becomes considerably less inspiring.

Sacred Wind’s “broadband” service for most affordable tiers fails to qualify as “broadband” at all, using the FCC standard of 768kbps.  Pricing is exorbitant and speeds are slow.

It self-describes its dial-up option as “stable, fast, and affordable.”  The “affordable” claim may be true when comparing pricing with the first broadband tier that actually meets the minimum definition of broadband – $49.95 a month for 768kbps service.  Paying $79.95 a month will bring you their maximum speed offering — just 3Mbps.

The company also sells customers annual contracts to avoid the $99 installation and $65 equipment fees.

Still, for those who have never had telephone service, much less Internet access, it’s considered by many residents to be a good beginning.  The company is amenable to the idea of raising those speeds when technically and financially feasible.

[flv width=”480″ height=”320″]http://www.phillipdampier.com/video/Fujitsu Sacred Wind.mp4[/flv]

Fujitsu showcases Sacred Wind Communications and how it approached the technological challenges involved in providing service to the Navajo Reservation [8 minutes]

Unfortunately, like its bigger telephone brethren, Sacred Wind is not entirely free from the telephone industry politics that often lobbies for anti-consumer policies.  A concerning document on Sacred Wind’s website promotes a questionable legislative agenda, including support of legislation that would permit providers to “create fair compensation in network use by identifying traffic on our networks,” which is a Net Neutrality no-no if it applies to their broadband network.  Another mysterious bullet point, not well explained, objects to “video programming and broadcasting practices that make it difficult to provide an affordable product to our customers.” That could apply to wireless frequency allocations or traffic on their broadband network — it’s not well defined.

While the FCC works on its goal of providing broadband access to underserved Americans, actual case studies illustrating “successes” like Sacred Wind that only manage to bring 3Mbps service to rural areas underline the need for Universal Services Fund reform.  Dedicating additional economic assistance to construct considerably more advanced networks to meet the needs of an increasingly high bandwidth Internet is essential to correct the urban-rural digital divide.  The original purpose of the USF to guarantee basic phone service in rural areas was a noble idea a decade ago, but that was then and this is now.

As the pile of money in the USF continues to grow from Voice Over IP and mobile phone surcharges, it was only a matter of time before waste, fraud, and abuse also turned up.  The administrators of the USF have often wasted considerable amounts of that money on questionable projects in decidedly un-rural areas.  Redirecting, reforming, and broadening USF resources to cover broadband deployment in areas like the Navajo Reservation may be one of the only ways to build sustainable and equitable broadband access networks that are scalable and affordable, even for the most financially-challenged communities.  Providing 256kbps service for $30 a month doesn’t come close to cutting it in poverty-stricken communities.

Additional video coverage of Sacred Wind can be found below the jump.

… Continue Reading

Carol Hevey, executive vice president of operations for TWC’s Carolinas region.

Stop the Cap!‘s strong readership in the Triad region of North Carolina comes from their experience with Time Warner Cable’s Internet Overcharging experiment this past April.  For residents in greater Greensboro and surrounding communities, now you get a chance to be pioneers of a different sort.

Time Warner Cable today announced Greensboro, Raleigh, and Charlotte, all in North Carolina, among the first in the nation able to purchase Road Runner Mobile, a new 4G wireless mobile broadband service designed to accompany your existing Road Runner subscription.

On December 1st, Time Warner Cable customers can sign up for the service, providing speeds up to 6Mbps, starting at $34.95 per month, if you are on a Price Lock Guarantee (a service commitment requiring you to remain with Time Warner Cable in return for service discounts) and subscribe to a bundle of services.  That low priced option has a usage allowance of 2 gigabytes per month.

Time Warner Cable's Carolinas region service area

“With Time Warner Cable’s 4G Mobile Network, we now offer the fastest mobile service available and extend our reach outside the home.” said Carol Hevey, Executive Vice President of the Carolina Region for Time Warner Cable.  “Giving our customers the convenience of mobility and the speed of 4G, Road Runner Mobile lets customers take their favorite Internet service wherever they go.  This is an important part of our strategy to give our customers any content, on any device, anytime, anywhere.”

Time Warner Cable is using the Clearwire WiMax network to provide the service, a benefit it gained along with Comcast when they became part-owners of the Sprint-Clearwire venture.

Pricing will vary depending on the level of service customers need:

• Road Runner Mobile 4G National Elite gives unlimited access to both Time Warner Cable’s 4G Mobile Network and a national 3G network (Sprint, presumably), for use when traveling.
  o $79.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Elite gives customers unlimited access to the Time Warner Cable 4G Mobile Network.
  o $49.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Choice gives light users 2GB of service on the Time Warner Cable 4G network each month.
  o Available for $39.95 per month to customers of at least one other Time Warner Cable service.  Additional $5 off if you have a Price Lock Guarantee and bundled service package.

Time Warner Cable plans to launch additional mobile services to customers in the future such as the ability to program a DVR from a mobile device and the ability to take their video content with them on the go.  Time Warner Cable will be expanding its 4G Mobile network to additional service areas over the next few months including Dallas, TX and Honolulu and Maui, HI.

Customer experiences with the Clearwire network have been decidedly mixed.  In Portland, uneven signal coverage has plagued service and fueled customer returns.  In Greensboro, some who have tested the Clearwire-branded version of the service report earlier speeds close to 5Mbps that have since slowed to below 2Mbps.

As with any wireless mobile service, inquire about trial options and cancellation policies before signing any contract.  Consumers should always verify service is available to them at tolerable speeds before committing to any contract.

Rochester, NY - New York's second largest economy on the shores of a broadband backwater

Broadband Reports this morning received word from an “insider” that Time Warner Cable is laying the groundwork to introduce “wideband” broadband service up to 50Mbps throughout New York State’s Verizon FiOS-wired communities.  According to the report, Time Warner Cable plans to launch faster DOCSIS 3.0 service in Buffalo in mid-November, Syracuse in December, and Albany in January.  The company introduced “wideband” service in metropolitan New York City a few weeks ago.

Omitted from the upgrade list is New York’s second largest economy and high tech capital of upstate New York — Rochester.  The city was in the news in April when Time Warner designated Rochester as one of the “test cities” for an Internet Overcharging experiment.  The plan was shelved when customers organized a mass revolt against the plan and two federal legislators intervened.

From a logical standpoint, it wouldn’t seem to make sense for a broadband provider to omit a region with more than one million residents, many who have been highly educated and work for the community’s largest employers – the University of Rochester/Strong Health, Eastman Kodak, Xerox, ViaHealth/Rochester General Hospital, Rochester Institute of Technology, Paychex, and ITT.

But from the all-important business standpoint, Time Warner Cable enjoys extraordinarily limited competition in the area, and the gap only widens in the coming future.  The area’s telephone provider, Frontier Communications, is known mostly for providing service in rural communities, and has so far offered lackluster plans for a 21st century broadband platform, preferring to rely on now-aging DSL technology while Verizon wires most comparably-sized cities in the rest of the state for advanced fiber-to-the-home FiOS service.

While Frontier can live comfortably in rural communities where cable television is not an option, customers who live and work in their largest service area continue to find disadvantages from a company business plan that these days seems more focused on mergers and acquisitions, and is content with language that defines an appropriate amount of monthly broadband usage at a ridiculously small 5 gigabytes per month.

Against a competitor like that, why would Time Warner Cable bother?

Cable ONE, owned by the Net Neutrality-bashing Washington Post, has turned the art of broadband service into a science of confusion for its customers.

In addition to introducing a forthcoming new, faster tier of service, offering speeds at 12Mbps downstream and 1.5Mbps upstream, Cable ONE has been tinkering with their convoluted usage capping system, which combines a daily usage allowance with throttled speeds and exempt periods during traditionally lower usage hours.

See if you can understand their new usage limit chart, and even if you can, ask yourself if your parents will pick up what they are putting down:

(Click to enlarge)

Karl Bode at Broadband Reports thinks “Standard Speed” refers to Cable ONE’s throttle — reducing effective speeds by half, assuming you exceed your “threshold.”  The limits shown are reset daily.  Exceeding that limit many times during a month can technically get your service suspended, but we’ve not heard of anyone who either hasn’t been able to talk their way out of it with company officials or who haven’t been bothered by local system managers who are probably just as confounded by this crazy cap scheme as we are.

Cable ONE customers like the new speed offering, if and when it arrives in their respective communities, but hate the silly usage allowances and speed throttles that accompany them.  As Stop the Cap! has always said, consumers are beating the doors down waiting to throw more dollars at broadband providers who offer them the higher speed service they desire.

Instead, some providers would rather create Internet Overcharging schemes to reduce demand and expenses, and profit the proceeds.  If given a competitive choice, consumers will leave a cap-happy provider for someone else who actually listens to customers.  Unfortunately, for too many Americans, the key words are “if given a competitive choice.”

A customer in Boise notes, “I can’t even watch a full movie from Netflix without getting my speed cut in half.  I started the movie at 12pm and by 1pm my speed was cut in half.  When I called Cable ONE and asked about my bandwidth, they wouldn’t even tell me if I crossed the threshold limit.  They kept dancing around my question with ‘it may have been reduced.’  Wake up Cable ONE!”

Many Cable ONE customers are located in smaller cities and communities that currently have just one other option – DSL service from the local phone company.  For many residents, that tops out at 1.5Mbps or 3Mbps downstream.  But for some, it’s better than being usage capped by cable.

Perhaps Cable ONE would do good to watch their own advertisements, which promise: “It’s the way we always listen, to every word you say; loud and clear is how we hear, there’s just no other way.”

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Stop the Cap! calls on Cable ONE to discard confusing, impenetrable usage allowances that few customers can find on their website and even fewer actually understand.  Investing in your network with the proceeds of higher speed premium service tiers and making upgrades to DOCSIS 3 can provide additional bandwidth and profit opportunities while customers can sit back, “enjoy the fun with Cable ONE,” and relax with the broadband service they pay good money to receive.  Cable ONE already provides customers with a way to self-regulate their usage, by selecting a speed tier that is comfortable for them and their anticipated Internet needs.

An avalanche of iPhones is to blame for AT&T's wireless problems, according to a Slate columnist

Telecommunications companies love people like Farhad Manjoo.  He’s a technology columnist for Slate, and he’s concerned with the congestion on AT&T’s wireless network caused by Apple iPhone owners using their phones ‘too much and ruining AT&T’s service for everyone else.’  Manjoo has a solution — do away with AT&T’s flat data pricing for the iPhone and implement a $10 price increase for any customer exceeding 400 megabytes of usage per month. For those using less than 400 megabytes, he advocates for a “pay for what you use” billing model.  Will AT&T adopt true consumption billing, a usage cap, or just another $10 price increase?  History suggests the latter two are most likely.

Stop the Cap! reader Mary drew our attention to Manjoo’s piece, which predictably has been carried through the streets by cheering astroturf websites connected with the telecommunications industry who just love the prospect of consumers paying more money.  They’ve called the organizations that work to fight against such unfair Internet Overcharging schemes “neo-Marxist,” ignoring the fact the overwhelming majority of consumers oppose metered broadband service and still don’t know the words to ‘The Internationale.’

Manjoo’s description of the problem itself has problems.

His argument is based on the premise that the Apple iPhone is virtually a menace on AT&T’s network.  He blames the phone for AT&T customers having trouble getting their calls through or for slow speeds on AT&T’s data network.

Every iPhone/AT&T customer must deal with the consequences of a slowed-down wireless network. Not every customer, though, is equally responsible for the slowdown. At the moment, AT&T charges $30 a month for unlimited mobile Internet access on the iPhone. That means a customer who uses 1 MB a month pays the same amount as someone who uses 1,000 MB. I’ve got a better plan—one that superusers won’t like but that will result in better service, and perhaps lower bills, for iPhone owners: AT&T should kill the all-you-can-eat model and start charging people for how much bandwidth they use.

How would my plan work? I propose charging $10 a month for each 100 MB you upload or download on your phone, with a maximum of $40 per month. In other words, people who use 400 MB or more per month will pay $40 for their plan, or $10 more than they pay now. Everybody else will pay their current rate—or less, as little as $10 a month. To summarize: If you don’t use your iPhone very much, your current monthly rates will go down; if you use it a lot, your rates will increase. (Of course, only your usage of AT&T’s cellular network would count toward your plan; what you do on Wi-Fi wouldn’t matter.)

First, and perhaps most importantly, AT&T not only voluntarily, but enthusiastically sought an exclusive arrangement with Apple to sell the iPhone.  For the majority of Americans, using an iPhone means using AT&T as their wireless carrier.  If AT&T cannot handle the customer demand (and the enormous revenue it earns from them), perhaps it’s time to end the exclusivity arrangement and spread the iPhone experience to other wireless networks in the United States.  I have not seen any wireless provider fearing the day the iPhone will be available for them to sell to customers.  Indeed, the only fear comes from AT&T pondering what happens when their exclusivity deal ends.

Second, problems with voice calling and dropped calls go well beyond iPhone owners ‘using too much data.’  It’s caused by less robust coverage and insufficient capacity at cell tower sites.  AT&T added millions of new customers from iPhone sales, but didn’t expand their network at the required pace to serve those new customers.  A number of consumers complaining about AT&T service not only mention dropped calls, but also inadequate coverage and ‘fewer bars in more places.’  That has nothing to do with iPhone users.  Congestion can cause slow speeds on data networks, but poor reception can create the same problems.

Third, the salvation of data network congestion is not overcharging consumers for service plans.  The answer comes from investing some of the $1,000+ AT&T earns annually from the average iPhone customer back into their network.  To be sure, wireless networks will have more complicated capacity issues than wired networks do, but higher pricing models for wireless service already take this into account.

Business Week covered AT&T’s upgrade complications in an article on August 23rd:

Many of AT&T’s 60,000 cell towers need to be upgraded. That could cost billions of dollars, and AT&T has kept a lid on capital spending during the recession—though it has made spending shifts to accommodate skyrocketing iPhone traffic. Even if the funds were available now, the process could take years due to the hassle and time needed to win approval to erect new towers and to dig the ditches that hold fiber-optic lines capable of delivering data. And time is ticking. All carriers are moving to a much faster network standard called LTE that will begin being deployed in 2011. Once that transition has occurred, the telecom giant will be on a more level playing field.

And there are limits to how fast AT&T can move. While it may take only a few weeks to deploy new-fangled wireless gear in a city’s cell towers, techies could spend months tilting antennas at the proper angle to make sure every square foot is covered.

Karl Bode at Broadband Reports also points out a good deal of the iPhone’s data traffic never touches AT&T’s wireless network and he debunked a piece in The Wall Street Journal that proposed some of the same kinds of pricing and policy changes Manjoo suggests:

iPhone users are using Wi-Fi 42% of the time and the $30 price point is already a $10 bump from the first generation iPhone. The Journal also ignores the absolutely staggering profits from SMS/MMS, and the fact that AT&T posted a net income of $3.1 billion for just the first three months of the year. That’s even after the network upgrades the Journal just got done telling us make unlimited data untenable.

Sanford Bernstein’s Craig Moffett has been making the rounds lately complaining that a wireless apocalypse is afoot, telling any journalist who’ll listen that the wireless market is “collapsing” and/or “grinding to a halt.” Why? Because as new subscriber growth slows and the market saturates, incredible profits for carriers like AT&T and Verizon Wireless may soon be downgraded to only somewhat incredible. Carriers may soon have to start competing more heavily on pricing, driving stock prices down. That’s great for you, but crappy for Moffett’s clients.

You’ll note that neither the Journal nor Moffett provide a new business model to replace the $30 unlimited plan, but the intentions are pretty clear if you’ve been playing along at home. As on the terrestrial broadband front, investors see pure per-byte billing as the solution to all of their future problems, as it lets carriers charge more money for the same or less product (ask Time Warner Cable). Of course as with Mr. Moffett’s opinions on network upgrades, what’s best for Mr. Moffett quite often isn’t what’s best for consumers.

If AT&T doesn’t have the financial capacity or willingness to appropriately grow their network, inevitably customers will take their wireless business elsewhere, and perhaps Apple will see the wisdom of not giving the company exclusivity rights any longer.

Manjoo’s proposals (except the $10 rate increase, which they’ll love) would almost certainly never make it beyond the discussion stage.  A pricing model that automatically places consumers using little data into a less expensive price tier, or relies on a true consumption “pay for exactly what you use” pricing model would cannibalize AT&T’s revenue.  Past Internet Overcharging pricing has never been about saving customers money — they just charge more to designated “heavy users” for the exact same level of service.  Need more money?  Redefine what constitutes a “heavy user” or just wait a year when today’s data piggies are tomorrow’s average users.  Now they can all pay more.

The average iPhone user already pays a premium for their AT&T iPhone experience — an average $90 a month for a combined mandatory voice and data plan — costs higher than those paid by other AT&T customers.  AT&T accounted for the anticipated data usage of the iPhone in setting the pricing for monthly service.

The biggest data consumers aren’t smartphone or iPhone users. That designation belongs to laptop or netbook owners using wireless mobile networks for connectivity.  Those plans universally are usage capped at 5 gigabytes per month, far higher than the 400 megabyte cap Manjoo proposes.  If AT&T felt individual iPhone customers were the real issue, they would have already usage capped the iPhone data plan.  Instead, they just increased the price, ostensibly to invest the difference in expanding their network.

Perhaps at twice the price, everything would be nice.

Manjoo admits AT&T does not release exact usage numbers, but it’s obvious a phone equipped to run any number of add-on applications that the iPhone can will use more data than a cumbersome phone forcing customers to browse using a number keypad.  That in and of itself does not mean iPhone users are “data hogs.”  In reality, 400 megabytes of usage a month on a network also handling wireless broadband customers with a 5 gigabyte cap is a pittance.  That’s 10 times less than a customer can use on an AT&T wireless broadband-equipped netbook, and still be under their monthly allowance.

Here’s a better idea: end the monopoly AT&T has on the iPhone in the United States. That would immediately do a lot more for AT&T customers, as the so-called “data hogs” that hate AT&T flee off their network.

Manjoo’s alternatives are a “pay $10 more” solution that won’t save consumers money and “pay exactly for what you use” plan that AT&T will never accept.

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