The people of Malta will soon have a choice between a cable broadband provider offering 250/20Mbps service or a fiber to the home network now under construction that will be capable of delivering gigabit broadband across the island — all without usage limits or speed throttles.

Starting this month, for €96 per month ($128), customers of Melita can buy a triple play package of phone, broadband, and cable television that includes a free upgrade to 250/20Mbps.

“The FibrePower 250 product leverages the investments Melita has made in the past years and further strengthens the company’s position as Malta’s fastest service provider,” said Michael Darmanin, director of marketing and corporate services at Melita. “We are seeing an exponential growth in demand for higher speeds and capacity. This is driven by more people connected in the same household or business, more devices and more consumption of video over the Internet.”

Darmanin added the Maltese people want fast and unlimited broadband service, and they will deliver it, starting at Tigne Point (Midi) and Fort Cambridge in Sliema. The service will then gradually be rolled out in other Maltese communities.

Malta, in the Mediterranean Sea, has a population of around 450,000. The country has two major telecom companies: Melita which delivers cable service and GO, which delivers DSL service over the telephone network. Vodafone used to offer a now-discontinued WiMAX service across the island, which never had a significant market share.

The Maltese government made broadband expansion a national priority and set regulatory policies that would increase competition. But the government also insisted that telecom market improvements also benefit customers, and the country laid the foundation of its broadband policy on encouraging the development of a nationwide fiber to the home network.

The tradeoff: the government would deregulate the broadband marketplace and remove regulatory obstacles and unnecessary red tape governing pole usage and underground trenching, but in return providers must meet government objectives towards enhancing broadband speeds and price competition.

As a result, Melita has aggressively invested in cable broadband upgrades that have delivered broadband speeds faster than what most Americans and Canadians can buy from their cable providers. The cable operator plans to be among the earliest adopters of DOCSIS 3.1 which will support up to 10/1Gbps broadband speeds.

Not to be outdone, GO is rolling out its own fiber to the home network supporting interactive IPTV and faster broadband speeds. It will then be able to retire its DSL service, which now provides respectable Internet speeds up to 35Mbps.

Powell

You and I may think America can do better providing fast and inexpensive broadband service. But a former chairman of the FCC now representing industry interests waved shiny keys of distraction to explain away why cable companies are still delivering Internet speeds slower than those found in Romania, Latvia, South Korea and Japan.

Michael Powell, the poster child of D.C.’s “revolving door” problem gave a well-compensated, rousing (yet fact-lacking) defense of an industry he was supposed to oversee in the public interest as the Bush Administration’s FCC chairman from 2001-2005.

“America is home to the world’s very best Internet companies,” said Michael Powell, chief executive of the National Cable and Telecommunications Assn. at the annual Cable Show in Washington, D.C. “We have worked hard to reach everyone, and now offer service to 93% of American homes. Despite our success, many people like to denigrate U.S. broadband by painting false comparisons to other countries. There are some nations doing very well, but it is foolish to compare countries like Latvia and France to the United States of America.”

Powell’s response is hardly a fact-filled defense for cable company broadband that still delivers slow speeds at high prices. Instead of attempting to call the statistics inaccurate, he tried to explain away the discrepancy by complaining people are ignoring the size of the country and its population.

In denial

Powell’s arguments might have some merit if the cable industry did not make a point of bypassing vast rural areas that do not meet Return on Investment tests. It is difficult to claim cable companies cannot deliver comparatively fast service in rural Iowa when they don’t offer any service at all.

The People’s Republic of China’s population is far larger than our own and is now a vital market for fiber optics manufacturers and suppliers. While some of America’s cable industry CEOs repeatedly argue America does not need fiber broadband or gigabit broadband speeds, the Chinese government has insisted that every new housing development be pre-wired with fiber that will easily and inexpensively supply those speeds in the near future.

Powell is correct to say speeds are improving in the United States, but there is growing evidence they are improving even faster overseas, especially in countries that are basing their primary telecommunication infrastructure on fiber optics, which can support enormously fast Internet speeds. As those fiber networks are lit, America will fall even faster in broadband rankings as long as cable operators continue to insist there is no demand or interest in the next generation of high-speed service. At the prices they charge, they may just prove their own “no demand”-argument, at least in this country.

Powell himself helped lay the foundation for America’s broadband duopoly by deregulating the industry with one hand while ignoring the need for competitive checks and balances with the other. At the end of Powell’s tenure, his greatest achievement was constructing an industry-friendly personal resumé to win lucrative employment as a telecommunications lobbyist.

Who better to speak with “authority” on telecommunications matters than a well-connected former FCC chairman that does the industry’s bidding? The NCTA hired him to deliver just the kind of defense cable operators hope Americans will believe.

Those that are aware of what broadband is like abroad don’t.

One of America’s lowest-rated cable companies and an industry legend labeled by consumer advocates as the “Darth Vader of cable” may be joining forces to buy Time Warner Cable, according to Bloomberg News.

The blockbuster buyout would leap Charter Cable from fourth largest cable operator to second place, although still behind Comcast in terms of revenue and number of subscribers.

The spectacular return of Malone to the top echelon of the American cable industry was the talk of the industry’s Cable Show, ongoing this week in Washington, D.C. Those attending are reportedly buzzing Malone’s imminent return is likely to spark a massive consolidation of the U.S. cable industry to as few as three major cable operators serving more than 95 percent of the American cable marketplace.

Malone

Driving momentum to merge, in Malone’s view, is increasing cable video programming costs, which are cutting into profits. Having a fewer number of cable operators could hand the industry more leverage over broadcasters and unaffiliated cable programmers, but could also cut costs through marketplace efficiencies and volume discounts.

“If you’re John Malone, you’re thinking: we’ve got to get bigger,” Jim Boyle, managing director of SQAD and formerly a cable equity analyst for more than 19 years, said in a telephone interview with Bloomberg News. “The bigger Charter can get, the more economies of scale discounts it can get,” he said. “If everyone else is playing checkers, Malone is playing three-dimensional chess.”

For many on Wall Street, the only thing left to do is plan the funeral for the country’s second largest cable company.

“If you’re going to do a transformational deal, your choices are Time Warner Cable, Time Warner Cable and Time Warner Cable,” Craig Moffett, a veteran industry observer told Bloomberg. “You can roll up all the little guys if you want to, but even if you did, you haven’t built something that’s truly large-scale.”

“Time Warner Cable is gone,” Chris Marangi, a money manager at Gamco Investors Inc., said. “I think Charter will buy them eventually, whether it’s Liberty facilitating that or Charter doing it directly or the two companies doing it in partnership.”

Industry observers predict Malone will signal his dream deal by initially launching smaller mergers and acquisitions before attempting a buyout of a cable company considerably larger than Charter itself.

The first target: perennially bottom rated Mediacom, where any buyer is likely to be hailed as a rescuer by beleaguered subscribers who have regularly dismissed the cable operator as incompetent. Next, the Washington Post’s Cable ONE, which may already be plumping itself up as at attractive takeover target through investment in improving its network infrastructure.

But the most obvious foreshadowing of a big deal with Time Warner would most likely come if Charter first successfully acquires always-rumored-for-sale Cablevision, where the controlling Dolan family is rumored to be holding out for an exceptionally attractive buyout package other cable companies aren’t willing to offer. Time Warner itself has been rumored as a buyer, but current management has repeatedly stressed it will not pay a premium price for acquisition targets.

Malone may not be able to help himself. His long history in the cable industry includes a voracious appetite for merger and acquisition deals. For more than two decades, Malone led Tele-Communications, Inc. (TCI). When he arrived in 1972, TCI was a rural Texas and western states cable operation with 100,000 subscribers. By 1981, through mergers and acquisitions, he built TCI into America’s largest cable operator. In 1998, AT&T bought out TCI Cable. The phone company later exited the cable business and sold most of the operation to present owner Comcast.

The level of consolidation proposed by Malone is unheard of in the United States, but is familiar in Canada where two major cable operators — Rogers and Shaw — control the majority of cable subscriptions. Third largest Vidéotron leads in Québec and Cogeco serves pockets of Ontario and Québec bypassed by Rogers and Vidéotron, respectively.

Cable ONE broadband customers will soon benefit from the cable operator’s increased investment in its operations with faster broadband speeds and a less complicated “usage guideline” system with no overlimit fees.

The cable operator, owned by The Washington Post, has announced effective June 10, customers will be able to buy 5-70Mbps packages with allowances up to 500GB a month.

Cable ONE now only sells two broadband tiers:

• 5Mbps/512kbps (3GB daily limit to avoid speed throttle) No overlimit fees ($50/month)
• 50/2Mbps – 50-100GB monthly usage limit depending on how many Cable ONE services you receive ($50/month, $0.50/GB overlimit fee)

Starting Monday, the monthly usage allowance for the 50Mbps plan will be increased to 300GB per month and no overlimit fee will be charged. The price will remain $50 a month. Other new tiers include:

• 60/2Mbps – 400GB usage limit ($75/month)
• 70/2Mbps – 500GB usage limit ($100/month)

Customers will also lose the “grace period” between 12am-8am when usage was formerly not counted against the monthly allowance. Effective June 10, all usage counts 24 hours a day.

“We are very excited to launch these new, more flexible Internet plans. Our customers are spending more time online than ever before and have voiced the need for faster service and no overage charges,” said Joe Felbab, Cable ONE vice president of marketing. “We’re committed to listening to our customers and delivering the latest products and technical advancements while maintaining the highest level of reliability and customer care.”

Customers who exceed their monthly cap will not pay overlimit fees but will receive warnings from Cable ONE. If those warnings are ignored, the company will “invite” customers to upgrade to the next higher tier or convert to a business account.

A freak spring snowstorm has stolen CenturyLink’s thunder.

A freak spring snowstorm has covered up much of the anticipated publicity for CenturyLink’s plans to launch a trial of gigabit fiber broadband for 48,000 customers in western Omaha.

The phone company announced the pilot project this week amid a historic spring storm that dumped several inches of heavy, wet snow on parts of Nebraska. The media devoted most of its attention to the weather.

CenturyLink admits its gigabit fiber service is a pilot project designed to test consumer demand and the tolerance of local officials for limiting upgrades to selected neighborhoods and customers most likely to buy the service. CenturyLink has priced the gigabit service comparably to Google Fiber — $79.95 a month if bundled with other CenturyLink products. Standalone broadband is nearly twice as expensive — $149.95 a month.

“CenturyLink is pleased to offer its Omaha customers ultra-fast broadband speeds up to 1Gbps to help keep pace with growing broadband demands,” said Karen Puckett, chief operating officer. “This demonstrates our commitment to deliver communications solutions that provide our customers with the technology they need to enhance their quality of life, now and into the future.”

CenturyLink will not be building the fiber network from scratch. The company already runs a 100Gbps middle-mile/institutional fiber network in Omaha that reaches certain business clients and serves as a conduit for CenturyLink customer traffic. CenturyLink will supplement that by using the remnants of its predecessor’s long-gone Qwest Choice TV service. The company will spend millions to run fiber connections to homes and businesses, but around 9,800 residents formerly served by Qwest’s television service will be able to sign up for CenturyLink Lightspeed Broadband as early as Monday. Others may have to wait until as late as October.

CenturyLink now sells up to 40Mbps speeds in Omaha, with a 300GB monthly usage cap. The company has not said if it intends to apply a usage limit on its fiber customers.

The phone company’s largest and fastest competitor is Cox Cable, which sells up to 150/20Mbps service for $99.99 a month.

Cox Cable cannot match CenturyLink’s speeds at the moment, but does not think most Omaha residents need or want gigabit fiber.

“It is important to note that our most popular Internet package remains the one that provides speeds of 25Mbps, which meets the needs of the majority of customers,” said Cox spokesman Todd Smith. “We will continue to talk with our customers and invest in product enhancements to provide an optimal broadband experience.”

Only around 12% of metropolitan Omaha will have access to the experimental fiber service, primarily those living in West Omaha. The network will bypass residents that live further east. The boundaries of the forthcoming fiber network are notable: West Omaha comprises mostly affluent middle and upper class professionals and is one of the wealthiest areas in the metropolitan region. Winning a right to offer service on a limited basis within Omaha is an important consideration for telecom companies like CenturyLink.

AT&T, Verizon, CenturyLink and other telecommunications companies are seeking deregulation that would end universal service mandates that require companies to build their networks in every neighborhood, rich and poor.

Cable and telephone companies have taken careful note Google Fiber is being allowed to provide service only where demand can be found — a significant change in long-standing municipal policies that demand cable and phone companies provide access to nearly every resident.

CenturyLink delivered a “between the lines” message to local officials when it suggested it might expand its fiber network elsewhere in Omaha and beyond, but only after evaluating the project for “positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.”

In other words, keeping zoning and permit battles (and residential complaints about construction projects) to a bare minimum, allowing the company the right to choose where it will (and won’t) deploy service, and making sure people will actually buy the service are all the key factors for fiber expansion.

AT&T said much the same thing when it vaguely promised a gigabit fiber network to compete with Google in Austin.

Google may have unintentionally handed their competitors a new carrot: deregulate us in return for fancy fiber upgrades that customers crave.

In perspective: CenturyLink’s fiber trial will only impact about 12% of the total population of metropolitan Omaha, primarily in and near affluent West Omaha.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WOWT Omaha CenturyLink Gigabit 5-1-13.flv[/flv]

WOWT in Omaha spent less than a minute reporting on CenturyLink’s forthcoming gigabit fiber trial. A spring snowstorm preoccupied most of Omaha’s media instead.  (1 minute)