Inouye

Three senior Democrats on the Senate Commerce Committee have characterized the Federal Communication Commission’s national broadband expansion plans as inadequate — firmly rooting America as second class citizens in a global broadband market.

In three separate letters to FCC Chairman Julius Genachowski, the senators criticized the chairman’s plan for broadband targets set too low, both in vision and in speed.

Genachowski’s plan calls for Americans to have universal access to at least 4/1Mbps service no later than 2020, a goal Genachowski described as “an aggressive target.”

But in a letter obtained by CQ, Senator Daniel Inouye (D-Hawaii) noted that such speed goals were set low in comparison to other countries, many of which are on target to achieve 100Mbps broadband well before 2020.

“What is the FCC’s rationale for a vision that appears to be firmly rooted in the second tier of countries?” Inouye wrote.

Begich

Senator Mark Begich (D-Alaska) wanted to know how Genachowski settled for 4Mbps download speed, noting that seemed to him to be too modest.

In fact, speed goals in the National Broadband Plan were a major point of contention in the National Broadband Plan, with lobbyists from AT&T and Verizon pushing hard for the lowest possible speed goals.  That is because they are the largest traditional landline providers saddled with aging copper wire networks which provide broadband to most rural Americans through DSL.  Most Americans living outside of major population centers rely on phone company-delivered DSL service typically speed rated at 768kbps-3Mbps.  Because DSL service is distance sensitive, a speed target of just 4Mbps requires a considerably lower investment than a target of 20Mbps or higher.  It is likely 100Mbps service, outlined as a goal for at least 100 million Americans, will first be achieved through fiber and cable networks in large cities, and not from phone company DSL service.

The difficulty for rural Americans to achieve a fair shake in broadband was highlighted by Senator Byron Dorgan (D-North Dakota).  He cited his state’s poor ranking — 42nd in broadband speed, as evidence Americans in rural states suffer with considerably lower quality broadband service.  The FCC’s National Broadband Plan, Dorgan fears, may only recreate the digital divide, only with different levels of speeds.

Dorgan

If 100 million Americans can access broadband services at 100Mbps, a rural speed target of 4Mbps will make new, high bandwidth-dependent Internet services just as off-limits to rural America as basic broadband is today in many areas.

Genachowski promised to review broadband speed targets every four years, making adjustments when necessary to be certain rural Americans receive broadband service comparable to urban areas.

But with the wide disparity in speed goals for urban and rural America, that may be impossible in the short term, especially as telecom industry lobbyists continue to pressure Congress for less regulation and no government mandates.

For more than a year, Stop the Cap! has been covering the issue of broadband mapping, warning against allowing incumbent telecommunications companies from being able to control or influence statewide maps that show who has broadband, and who does not.  A perfect example of why we repeatedly call out telecom-connected groups like Connected Nation being granted a piece of the mapping action can be found this weekend in a guest editorial published in the Fort Worth Star–Telegram written by Todd Baxter, vice president of government affairs and general counsel for the Austin-based Texas Cable Association — the Texas cable lobby:

Newly released maps show that broadband — high-speed Internet — is widely available in Texas. They also underscore that the broadband stimulus program has been ill-conceived and poorly executed by the federal government.

That’s because the federal government put the cart before the horse.

It gave out more than $270 million of your money to a dozen projects in Texas before actually determining where current broadband operators provide service. Common sense would say to find out where broadband is, or isn’t, available before spending the money.

The feds also should better define “underserved,” since the money is intended to help both unserved and underserved areas. It sounds like a riddle — how many broadband providers have to serve a household before it isn’t considered “underserved”? So far that riddle has no answer, and it is costing you, the taxpayer, a lot of money.

Without the data or the definition, how can the federal government make sure it is spending taxpayer money wisely and where it is really needed?

Now that we have the maps, we can see that more than 99 percent of all Texans can access some form of broadband, whether wired, wireless or mobile, from more than 123 providers. Yet — without this information — the federal government awarded hundreds of millions in grants and loans to the Texas projects, with possibly more to come before the broadband stimulus program wraps up in September.

The Texas Cable Association formally objected to seven of the dozen Texas projects when in the application stage, because the areas addressed are already covered by existing broadband providers. We don’t believe the areas are unserved or underserved.

Just a few weeks ago, the Texas Agriculture Commissioner Todd Staples, with great fanfare, unveiled the current state of broadband in Texas.  Connected Texas, a subsidiary of Connected Nation joined forces with the state government to perform a broadband census across the state, based on voluntary information provided confidentially by existing service providers.  The result was the stunning “achievement” that 97 percent of Texas already had broadband access, quite a revelation to the scores of consumers who aren’t served by cable companies and cannot get DSL service from the phone company, even if the Broadband Map of Texas says they can.

Texas Broadband Map (click to enlarge)

Kelly from Childress, located in the Texas panhandle, is a perfect example.  She writes Stop the Cap! to tell us how thrilled she was to see the phone company had finally brought DSL service to her street just on the outskirts of town.  She had nagged everyone she could for more than three years about her lack of broadband.  The cable company offered service, if she paid $9,300 for installation of an extended cable line to reach her.  The phone company, despite serving her neighbors less than 1/2 mile away, said she was not “qualified” to receive DSL service.  Today, her husband and two kids do access broadband service, albeit from the equivalent of the broadband black market.  Her nearest neighbor has rigged a souped up Wi-Fi system that allows her family to share the neighbor’s DSL account.  A directional antenna mounted on the roof of each home provides line-of-sight access.  They split the cost of the account and Kelly, an accomplished baker, keeps her neighbors well-supplied with some great pies in gratitude.

Connected Texas collected the information about where broadband service was supposedly available in Texas

Texas has a well-deserved reputation for neighbors helping neighbors to solve problems they’ve long since decided the government can’t, won’t, or shouldn’t solve for them.  Now that neighborly spirit has taken a high-tech approach to share broadband.

With the release of the new broadband map, Kelly thought the days of sharing accounts was over, and she called the phone company to sign up for service.  But, in no surprise to us, broadband availability to her home changed only on paper, not in reality.  No, she was told, she could not sign up for DSL service today or tomorrow for that matter — the company had no plans to extend service her way… indefinitely.

For others, the map is inaccurate because it shows service from dominant cable and phone companies, but ignores the competition.  Regular Stop the Cap! reader Michael Chaney noted, “I know for a fact this map is inaccurate. They show no fiber to the home coverage in Cedar Park, Williamson County, even though I’ve had residential fiber service for almost two years.”

In 2009, Public Knowledge released a report highly critical of Connected Nation, the group responsible for broadband mapping across many states.  Among the findings:

In order to be effective, a national broadband data-collection and mapping exercise should be conducted by a government agency, on behalf of the public, with as granular a degree of information as possible and be totally transparent so that underlying information can be evaluated.

Connected Nation is none of those and represents none of those characteristics. It is an organization sponsored by the telephone and cable companies and represents their interests in deciding what data to collect and how information should be displayed. They are quite up front about their company sponsorship and, in fact, believe it is an asset, if in a way counter to solid public policy.

It would be a setback for our broadband policy if Connected Nation were to take a prominent role in broadband mapping and data collection if it continues on its present policy course because the organization does not represent wise public policy and because it distorts its results.

Kentucky Gov. Steve Beshear (D) was correct in April, 2008, when he vetoed a $2.4 million appropriation for Connect Kentucky, which until then had received almost $7 million from the commonwealth. Beshear said that the program was being rejected for state financing because it had asked for funds “without specifically identifying any services to be rendered to the state or providing for any oversight, control or performance measures relative to the services being rendered.”

The group’s close association to incumbent cable and telephone company interests were easily apparent just from the national organization’s board which has 12 outside directors, eight of whom are well known cable and phone company lobbyists or those with direct interests in the industry:

• James W. Cicconi – AT&T senior executive vice president-external and legislative affairs
• Steve Largent – CTIA – The Wireless Association president and CEO
• Joseph W. Waz – Comcast senior vice president, external affairs and public policy counsel
• Larry Cohen – Communications Workers of America president. CWA is in frequent agreement with telecom companies on policy issues.
• Thomas J. Tauke – Verizon executive vice president for public affairs, policy and communication
• Walter B. McCormick – United States Telecom Association president
• Kyle E. McSlarrow – National Cable and Telecommunications Association president
• Grant Seiffert – Telecommunications Industry Association president. (The members are the equipment makers who sell their gear to the telecom industry.)

These individuals, and others, are listed as “national advisors” on the Connected Nation Web site. They are listed as “directors” in their filing with the Kentucky Secretary of State.

The implications of allowing incumbent service providers to influence broadband mapping can be seen in Baxter’s editorial.  If Texas cable and phone companies can declare broadband service available even in areas where it is not, they can then argue against broadband stimulus projects to expand availability as an unnecessary waste of taxpayer money.  The answer to Baxter’s riddle is, unfortunately, too often “none.”  Areas that declare access to wireless broadband, cable and DSL often have access to none of these options.  The cable company doesn’t wire that Texas ranch located too far away from the phone company for DSL and is in an area that just can’t get a good wireless signal.

In smaller communities in rural Texas, efforts by local entrepreneurs to launch needed local broadband services often meet fierce opposition from incumbent interests who declare communities already served, backed up with a map that shows coverage, and therefore should not be allowed to receive stimulus funding.  Often, objections from existing providers effectively disqualifies stimulus applicants and the result is a continued blockade for rural broadband.

The dividend Connected Nation hands to the Texas Cable Association is the political argument that there is no broadband problem in Texas — nearly 100 percent of homes can already access it.  That means broadband stimulus is, in the eyes of the cable lobby, just another federal government giveaway — wasteful spending of tax dollars.  Just look at the Texas Broadband Map and see for yourself.

The Texas Department of Agriculture failed the people of Texas by relying on a group with a vested interest in not finding a broadband availability problem.  And even worse — taxpayers nationwide effectively picked up the $3 million dollars in grant money given to Connected Nation for its map.  That’s a waste of tax dollars that Baxter didn’t bother to bring up.  Somehow I knew he wouldn’t.

Although not too far from Winston-Salem and Greensboro, Caswell County has a population of just over 23,000 people

In a painful display of callous disregard for the broadband needs of rural North Carolina, where half the state’s population lives, nine Republicans and two Democrats on the House Public Utilities committee voted down a bill to deliver service to 60 percent of Caswell County that currently goes without.

HB2067, introduced by Rep. Bill Faison (D-Orange/Caswell) would have allowed the rural county to provide broadband service to unserved residents and businesses.  What Rep. Faison did manage to put in HB2067 was initiative towards 21st Century technology.  The bill would have authorized Caswell County to install better technology, both up and down, where Centurylink offers slow DSL as the only option.  In introducing the bill, Faison explained that recent broadband data showed only 40 percent of Caswell County had access to broadband.

Already suffering from the exodus of textile jobs that used to provide an economic base for the area, the failure to obtain broadband has proven disastrous to the work of the county’s 21st Century Group, trying to restore Caswell County’s economy with a higher-tech future.  Six years of work was blocked by CenturyLink — the local phone company and 11 legislators, who told residents they don’t deserve anything better than they already have (which is often nothing.)

Without HB2067, Caswell County cannot even apply for federal stimulus broadband grant funds because the state law doesn’t provide specific authority to deliver the service.  Faison’s bill would correct that oversight and encourage public/private partnerships to get busy bringing broadband to the region.

CenturyLink and its top lobbyist Steve Brewer would hear none of it — Goliath was afraid that David would install better technology and force Centurylink to upgrade or hit the road.

Brewer was given more than half the available time for discussion about the proposed bill to fill the ears of committee members with half-truths.

CenturyLink, Brewer claimed, was more than willing to work with the county to provide the kind of speed its business park needed, yet failed to mention its long history of refusing to expand service to unserved areas.  Brewer’s claim that 70 percent of Caswell County is served by CenturyLink doesn’t mean the company offers broadband to all of those customers.  His further claim that 90 percent of those areas include equipment that is “DSL capable” also doesn’t mean those areas are providing the service today, just that they could… someday.  Many factors can disqualify a potential customer from getting DSL service, especially in rural areas where line quality is not always the best.

Bartlett Yancey House Restaurant and Gallery, a famous landmark in Caswell County.

Faison sought to explore exactly what Brewer defined as “broadband” service.  Brewer claimed DSL service offered anywhere from “1.5 to 6Mbps,” admitting speeds decline with distance and is untenable more than three miles from the telephone company switch facility.

Of course, Caswell County’s large rural expanse puts many of the unserved beyond the maximum distance DSL can work without additional equipment.  Many rural areas that can get DSL are typically offered between 768kbps-3Mbps service.  Caswell County is so rural, it met the Rural Utility Service’s (RUS) classic definition of an underserved community.  That allowed the county to technically qualify for first round federal broadband grant funding.

Unfortunately, legislators are not always as informed as they need to be to recognize statements riddled with loopholes and asterisks.

For instance, Rep. Daniel McComas (R-New Hanover) asked whether he could get high speed Internet over a phone line.  Although Brewer answered yes, what qualifies as “high speed” was left unanswered, as was exactly how many Caswell County residents requested DSL service, only to be refused by CenturyLink.  Yes, you can get DSL broadband over a phone line — but that doesn’t mean you will in Caswell County.

“The only definition of high speed Internet in North Carolina is from a statute from 10 years ago,” Faison noted. “You would have to admit that what was high speed Internet 10 years ago is not high speed Internet today.”

Just as the call for a vote was made, Brewer delivered an uninvited closing argument — probably unnecessary since no consumers were invited to speak on the issue.  If you don’t have broadband in Caswell County, 11 legislators on that committee weren’t interested in hearing from you anyway.

Brewer said the bill was completely unnecessary, because “federal broadband grants were no longer available,” and besides, it was unfair competition for the county to deliver broadband service better than what CenturyLink provides.  Of course, broadband grants -are- still available from the RUS, and few on the committee probably understood the irony of a phone company demanding that Caswell County not be allowed to deliver quality broadband service CenturyLink refuses to provide.

The substitute Committee bill would have protected CenturyLink from their fears of "unfair" competition by not allowing the county to build out broadband service where CenturyLink already provides it if it was not better service, but the company remained adamantly opposed to the county providing broadband service even in areas where they refuse to deliver it themselves for fear they would have to offer real broadband to Caswell County.

CenturyLink also claimed the county would have ‘secret insider information’ about CenturyLink’s every move through the permit process.  The glacial pace of the phone company’s broadband expansion is hardly a secret to the residents who live there.  Besides, permits are not required for the phone company to work in their own right-of-way.  Unlike cities who control the rights of way in their corporate limits, the state owns and controls the rights of way going through the unincorporated parts of the County.  Brewer’s comments were intended to scare legislators, not inform them.  It was a flat out lie.

The vote illustrates the disconnect many in the state legislature have about broadband.  Most of those in favor of the of the bill were Democrats mostly from rural sections of the state.  Two of the “no” votes came from Democrats in urban Mecklenburg County, which includes the city of Charlotte.  Representatives Beverly Earle and Becky Carney already have several choices for broadband service where they live.  Shame on them for condemning their rural neighbors in the north to a broadband backwater.

Mecklenburg County legislators were sure in a big hurry a few years back to do the bidding of AT&T, opening the doors to their kind of competition with statewide video franchising.  U-verse, which is available in parts of Charlotte, was supposed to put a stop the relentless rate increases and deliver competition.  So far, they’ve managed to sign up around 13,000 residents out of a potential 4 million plus in North Carolina, and the rate hikes just keep on coming.

The Republicans on the committee voted lock-step against the bill, even those from rural regions of the state.  Most of them are grateful recipients of big telecom money or are not running for re-election.  None of them can be bothered to ponder better broadband for their constituents unless it comes from a company cutting them a campaign contribution check.

When the vote was over, AT&T’s lobbyist Herb Crenshaw warmly shook McComas’ hand and congratulated him for a job well done. AT&T’s next check to McComas’ campaign fund will likely be bigger than the $500 he collected during the first quarter of this year.

The hit job on the broadband needs of rural Caswell County was complete.

The Members of the House Public Utilities Committee Voting Against Better Broadband for Caswell County & The Reasons Why
…and these amounts are just from the 1st quarter of 2010!

Rep. Harold J. Brubaker (R-Randolph) — Big Bucks Brubaker ran to the bank with $4,000 from AT&T, $4,000 from CenturyLink, $2,000 from Time Warner Cable, and $2,000 from Verizon.

Rep. Hugh Blackwell (R-Burke) — Blackwell accepted $500 from AT&T and $250 from Time Warner Cable.

Rep. Becky Carney (D–Mecklenburg) — AT&T and Time Warner Cable both cut checks for $500 each for Ms. Carney.

Rep. Beverly Earle (D-Mecklenburg) — She’s nice at half the price, with a grateful CenturyLink cutting a check for $250.

Rep. W. Robert Grady (R-Onslow) — Zippo.  He’s not running for re-election.

Rep. Jim Gulley (R-Mecklenburg) — Nada.  He’s not running again either.

Rep. Julia Howard (R–Davie/Iredell) — She gets around.  AT&T found her $500, CenturyLink provided a cool $2,000, and Time Warner Cable did even better with $2,500.

Rep. Linda Johnson (R-Cabarrus) — A double mint.  AT&T $500, Time Warner Cable $500.

Rep. Daniel McComas (R-New Hanover) — AT&T gave him $500, Time Warner Cable doubled that with $1,000.

Rep. Tim Moore (R-Cleveland) — Walking around money — AT&T $500, Time Warner Cable $500.

Rep. Wil Neumann (R-Gaston) — AT&T $500, but thanks to this year’s hefty rate hike, Time Warner Cable could afford $1,000 for Mr. Neumann.

Representatives Who Supported Rural North Carolina’s Need for Better Broadband, Voting For HB2067

Rep. Bill Faison (D-Orange, Caswell)

Rep. Kelly Alexander, Jr. (D–Mecklenburg)

Rep. Angela Bryant (D–Nash, Halifax)

Rep. Pricey Harrison (D-Guilford)

Rep. Marvin Lucas (D-Cumberland)

Rep. Nelson Cole (D-Rockingham)

Totals for 2010 (so far) for Telecom Contributions in the North Carolina General Assembly

AT&T $72,740

CenturyLink $51,750

Time Warner Cable $20,450

Verizon $10,500

(All figures are from the North Carolina State Board of Elections website, from candidates filings.)

Telstra is Australia's largest telecommunications company. (Photo: Telstra)

It’s not as if the Australian government didn’t warn private broadband providers, notably Telstra.  For the past several years, Australians have endured expensive, slow, heavily usage-limited broadband service that has put the country well behind many other Commonwealth nations.  Australian Communications Minister Stephen Conroy finally warned the nation’s largest telecommunications provider if it didn’t move forward on upgrades and improved service, the government would be forced to step in to protect the national interest.

Instead of improving service, Telstra spent years stonewalling the government and the Australian public, while banking high profits for broadband service.  That’s a familiar story for North Americans, stuck with companies like Bell, Rogers, AT&T, Comcast and Verizon — all of whom seek ultimate control over what kind of service you receive, what you pay for it, and what websites you can and, perhaps down the road, cannot visit without paying a surcharge.

Australia is closing the chapter on this story with a happier outcome for its 22 million citizens.  Perhaps the United States and Canada could learn a thing or two from the folks down under.

Bringing U.S. Oligopoly-Style Management to Australian Broadband: The Sol Trujillo Years — 2005 to 2009

Telstra, a former government monopoly comparable to the American Bell System, was privatized in the late 1990s.  Telstra looked to the United States for a chief executive that had experience navigating that transition.  They found Sol Trujillo working his way up the management ladder at AT&T, finally culminating in chairmanship of former Baby Bell Qwest Communications.  Would Trujillo like to take on the challenge of managing Australia’s largest phone company? Trujillo signed on with as Telstra’s CEO in 2005 promising to modernize the business and to bring American-style innovation to the South Pacific.

Instead, Trujillo established an American-style rapacious oligopoly.

[flv width=”424″ height=”260″]http://www.phillipdampier.com/video/Nine Australia Trujillo War on Unions.flv[/flv]

Channel Nine in Australia reported on Telstra’s sudden interest in union-busting after Sol Trujillo arrived in 2005.  (1 minute)

Sol Trujillo

In his first year at the company, Trujillo started an all-out war to get rid of Telstra’s organized labor, slashing 10,000 jobs to “save the company money” all while boosting his own salary.  What started as $3 million in compensation in 2005 would rise to more than $11 million dollars just four years later, even as the value of Telstra declined by more than $25 billion on his watch.

Trujillo alienated his employees and officials in the Australian government.  Then-Prime Minister John Howard attacked Trujillo’s salary boost as abusive.

“I’m not complaining about the salary I get but I do think the average Australian, who gets paid a lot less than I do … regards that sort of salary as being absolutely unreasonable,” Mr Howard said on Southern Cross radio. “And it doesn’t help the capitalist system, which I believe in very passionately, that some people appear to abuse it.”

Trujillo’s salary was 38 times greater than the highest official in Australia’s government.

The average Australian retiree gets by on $219AUS a week.

Trujillo had to make due with more than $211,000 a week.

[flv width=”424″ height=”260″]http://www.phillipdampier.com/video/Nine Australia Telstra Salary Hike.flv[/flv]

Channel Nine ran this report on the controversy over Sol Trujillo’s compensation package.  That old meme about having to pay high salaries to attract quality talent would have been more convincing had Trujillo’s policies not caused a $25 billion reduction in Telstra’s value.   (2 minutes)

Customers weren’t exactly endeared to spending more of their money on Telstra products and services.  Telstra had already embarked on cost controls for network upgrades, leveraged its monopoly power in many parts of the country with high rates for usage-restricted service, and bungled a critical application to participate in Australia’s National Broadband Network.

Australia’s National Broadband Plan, a roadmap for broadband improvements, set pre-conditions to involve small and medium-sized businesses in network construction.  Trujillo balked, demanding that Telstra — and only Telstra — should have the right to determine what kind of network should be built in the country.  More importantly, unless they exclusively ran it, the company would do everything in its power to block or destroy it.

Internet Overcharging schemes limit enjoyment of broadband usage across Australia. Telstra provides a usage meter estimator that includes all of the useless measurements for e-mail, images, and web browsing. But throw in some movie watching and the gas gauge really starts to spike.

The Sydney Morning Herald business reporter Ian Verrender was stunned:

Telstra has employed a three-step strategy to muscle out any competition.

It can be neatly condensed into three words: Bluster, Belligerence and Obfuscation.  We [just] saw it again in spades.

Telstra has been excluded from one of the most ambitious infrastructure projects announced by a Federal Government in decades: the construction of a national broadband network.

Could it really be that Telstra’s board and management were so incompetent that they could not get past stage one in a tender process of this magnitude?

After all, there were only four main criteria that had to be met. The first was the proposal had to be lodged in English. The second and third had equally low hurdles. Metric measurements – not the old inches, feet and miles – were required and the bid had to be signed. Nothing too difficult there.

But the fourth criterion appeared to stump Telstra. It didn’t include any plan for the inclusion of small business. And so the Communications Minister, Stephen Conroy, was obliged to exclude Telstra, an announcement that shook 12 per cent from the value of the country’s biggest telecommunications company.

This was no accident on Telstra’s part. It knew it was lodging a non-conforming proposal. Why, you ask?

The answer is simple. Telstra does not want a national broadband network, particularly one that involves anyone else. That includes taxpayers.

And if one has to be built, Telstra will do everything in its power to delay or kill the process. Yesterday marked stage one in a protracted war, ultimately designed to defeat one of Prime Minister Kevin Rudd’s key election promises.

Trujillo claimed yesterday that Telstra had been unfairly excluded from the process on a technicality. That’s just rubbish.

In recent months, the company, its chairman, Don McGauchie, and Trujillo repeatedly threatened to walk away from the tender process, and lodged the proposal only a few hours before the deadline.

Trujillo’s rhetoric yesterday was laced with the usual mixture of bravado and threats. He compared Australia to North Korea or Cuba. He declared only Telstra was capable of building the type of network required by the Government.

But two lines stand out. First this: “Customers make the choice of who they do business with; regulators and governments and others do not.” And then: “We reserve our rights regarding future action.”

The message is clear. Telstra will launch legal action at every opportunity – and even when there aren’t opportunities.

That time-honored American practice of simply suing your way through any legislative or regulatory roadblocks threatened to come to Australia.

The exclusion of Telstra from such a revolutionary broadband project didn’t sit well with the board or shareholders, and directly led to Trujillo’s ouster in 2009.  By then, he had alienated customers, the government, and just about everyone else.  Perhaps the government would allow a second look at a Telstra broadband application if it was submitted by someone other than Sol Trujillo?  It couldn’t hurt to find out.

[flv width=”424″ height=”260″]http://www.phillipdampier.com/video/Nine Australia Telstra Trujillo Quits 2-26-09.flv[/flv]

Channel Nine covers the ousting of Sol Trujillo, wondering what sort of golden parachute he’d receive on the way out the door.  (3 minutes)

Just weeks after leaving, Trujillo decided to settle scores with Australia, telling reporters that he thought the country was backwards and racist.

[flv width=”424″ height=”260″]http://www.phillipdampier.com/video/Nine Australia Trujillo Calls Australia Racist 3-09.flv[/flv]

Payback time.  Trujillo threw a hissyfit in a BBC interview calling Australia’s lack of laissez-faire regulatory policies backwards, and treatment towards him racist.  (Channel Nine – 1 minute)

The Post-Trujillo Era: More Arrogance and Ruthlessness, But a Communications Minister Outmaneuvers the Telecom Giant — 2009 to Present Day

Telstra spent the summer of 2009 attempting to heal the Trujillo-caused wounds with conciliatory statements in the Australian media.  Telstra’s new chief executive, David Thodey, admitted the company’s customer service record needed improvement.  He distanced himself from some of the more caustic comments from the former CEO, and claimed the company was on-track to be a major participant in improving Australia’s broadband experience.

Conroy

But as the months progressed, Australia’s Communications Minister, Stephen Conroy ultimately concluded he was getting the lip service treatment that Telstra had delivered Australians for years.  Conroy, already suspicious of the company’s control-minded tendencies, quietly began bending the ear of Prime Minister Kevin Rudd.  Conroy had watched Telstra’s steadfast refusal to work constructively towards a National Broadband Network (NBN).  By last summer, the company was making proposals for underwhelming broadband expansion.  Fiber optic broadband was unnecessary and expensive, they said.  Besides, the service Telstra was providing was already good enough.

Australians didn’t agree.  Part of the platform that brought the Rudd government to power was the promise of better broadband service in Australia.  Waiting for Telstra to provide it was a futile exercise.

Conroy told Rudd the government should not be setting its broadband policy agenda based on what worked most conveniently for private providers.  If they won’t move, then let’s get them out of the way, Conroy suggested.  Rudd, working for the interests of the Australian people — not just a handful of telecom companies seeking riches with substandard service at monopoly prices, agreed.

After reviewing the proposals submitted to design and construct 21st century broadband service for Australia, Rudd dismissed them all, calling them inadequate.  The government, he announced, would go it alone and build the network itself — delivering a fiber to the home network for 90 percent of Australians on an open network available to any provider that wanted to rent access at wholesale rates.

More importantly, Conroy was not going to allow Telstra to continually block progress on the NBN.  Conroy was not some supine minister willing to compromise away the goal of super-fast affordable broadband.  His critics called him Machiavellian, slashing and burning anything that stood in his way.  But Conroy was steadfast — corporations would never be allowed to dictate broadband terms to the government.  He warned Telstra to cooperate or face the consequences.

Telstra continued to stall and stonewall, and last September, the Rudd government delivered what it promised — a forced break-up of Telstra.  The company was given a choice — either sell back its copper wire landline network to the government or divest itself of satellite TV service Foxtel and lose access to any additional wireless mobile frequencies for Telstra’s cellular service.

The equivalent in the United States would be to declare fiber to the home to be in the national interest, and if AT&T and Verizon didn’t deliver it to nearly every home in their service areas, the government would move in and do it themselves, taking back ownership of the AT&T and Verizon’s infrastructure along the way.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/Network 10 Aus Telstra Break-Up 9-15-09.flv[/flv]

Network Ten covered the announced break up of Telstra by the federal government.  (2 minutes)

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/Nine Network Telstra Breakup 9-15-09.flv[/flv]

Channel Nine ran several reports on the announced breakup of Telstra, including an interview with the opposition.  (6 minutes)

Australia Declares Broadband a Utility Service that Private Providers Cannot Control

Monday marked a day in history for Telstra, agreeing to sell back its copper wire landline business (for which it will receive $11 billion in compensation).  In return, Telstra is assured wholesale access to the new fiber broadband network, and can market products and services on it.  It cannot, however, serve as a gatekeeper to keep competitors out nor maintain virtual monopoly service, especially for less suburban and rural customers.

Some telecom analysts believe the deal is actually good news for Telstra, if they’d see beyond their control tendencies.  After all, they say, Telstra gets to rid itself of a legacy copper-wire landline network that is expensive to maintain and serves a dwindling number of consumers, many who have switched to wireless.  They also get to develop and market new high bandwidth applications on a network they are no longer responsible for financing.

It’s a win for the government as well who gets a single, national fiber network built in the public interest, which makes it far easier to recoup the billions in costs to build it.  They’ll even likely make a profit suitable to defray the costs of subsidizing wireless broadband service for Australia’s rural residents, to be served with at least 12Mbps connections.  No cost-recovery fees on customer bills, no usage limitations that restrict innovation, and broadband that serves everyone, not just a handful of corporations that seek to monetize every aspect of it.

Conroy wouldn’t think much of America’s National Broadband Plan, which relies near-exclusively on private providers voluntarily doing the right thing. Conroy stopped putting blind faith in Australia’s large telecommunications companies.  The Obama Administration hasn’t.

We’ve seen millions spent lobbying to permit a handful of providers to control broadband service on their terms.  Few will provide fiber to the home service and many are content leaving rural Americans with dial-up service.  With dreams of Internet Overcharging schemes to manipulate usage to maximize profits even higher, things could get much worse.  What’s right for AT&T isn’t right for us.

For Australia, who has lived under such monopolistic broadband regimes for over a decade, a National Broadband Network without arbitrary usage limits and available to all — rural and urban — is the promised land.  It will leapfrog Australia well ahead of the United States and Canada, with far faster speeds and better prices, all because a government stood up to a corporate provider that preferred to overpay its executives instead of getting the job done right.

Australia had a reality check — broadband is a utility service necessary for every citizen who wants it.  Just as electrification and universal phone service became ubiquitous in the last century, broadband will also join those services in the years ahead as commonplace in nearly every home.

If only the strength and conviction that is fueling Australia’s broadband future could also be found in the United States, where too often what is urgently needed today gets frittered away into “maybe we can have it someday” compromises with big telecom and their lobbyists.  That isn’t good enough.

ABC National Radio interviewed telecom analysts about the implications of today’s deal with Telstra to retire Australia’s copper wire phone network (June 21, 2010) (4 minutes, 17 seconds)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Take the money and run

The Federal Communications Commission’s approval of Frontier’s takeover of 4.8 million Verizon landline customers in 14 states comes a year after the company announced the deal.  Frontier joins three other independent phone companies — FairPoint Communications, Windstream Communications, and CenturyLink zealously trying to grow their companies with additional mergers and acquisitions to avoid being swallowed up themselves.

What is common among all four companies is they rely heavily on dividend payouts to keep their stock price as high as possible.  That was a formula for disaster for FairPoint, the first of the four to end up in bankruptcy after a similar deal with Verizon in northern New England caused the company to falter.  Service and billing deteriorated, customers fled, and promises for better broadband were broken.  Now Frontier is following in FairPoint’s footsteps with more than 4.8 million new customers Frontier hopes they can swallow.

The FCC’s statement approving the merger reads like a press release for all involved, and delighted FCC Chairman Genachowski, who called these meager requirements “robust”:

Coming one week after the final state approval for the transaction, the FCC’s Order holds the applicants, Verizon and Frontier, to enforceable voluntary commitments, including:

• Extend faster broadband to more Americans: Frontier will significantly increase broadband deployment for the lines involved in this transaction, only 62 percent of which are broadband-capable today. Specifically, Frontier will deploy broadband with actual speeds of at least 3 Mbps downstream to at least 85 percent of transferred lines by the end of 2013, and actual speeds of at least 4 Mbps downstream to at least 85 percent of the transferred lines by the end of 2015, with all new broadband deployment offering actual speeds of at least 1 Mbps upstream.

Frontier's Fast One: 3 Mbps DSL Service with a 5GB Monthly Usage Allowance

Frontier’s broadband commitment gives the company a full five years to meet the bare minimum speed considered to constitute broadband in the National Broadband Plan.  One hopes Frontier doesn’t break into a sweat offering a piddly 3 Mbps service to homes using yesterday’s DSL service until then.  While Verizon’s rural castoffs get stuck eventually with 4 Mbps DSL, many of the company’s remaining customers are enjoying 50Mbps service over an all fiber network.  The FCC is accepting an urban-rural divide for broadband which will benefit the phone companies while leaving rural customers in the dirt.

Deploy fiber to libraries, hospitals, and other anchor institutions: Frontier will launch an anchor institution initiative to deploy fiber to libraries, hospitals, and government buildings, particularly in unserved and underserved communities.

Fiber for these locations sure, but no fiber for you or I.  Frontier, like most other telecom companies, loves to promote the benefits of fiber without actually deploying it to homes.

Promote competition: Frontier and Verizon have made a series of commitments to protect wholesale customers, including honoring all obligations under Verizon’s current wholesale arrangements that are in effect at closing.

Since wholesale customers often depend on the same network other customers do, if a company doesn’t deliver robust broadband into a state like West Virginia, there isn’t a robust service to sell to those wholesalers.

Improve data quality and collection: Frontier will make available to the Commission data on its broadband deployment progress at an unprecedented level of detail to enable effective monitoring of Frontier’s compliance with its commitments.

The Commission concluded that the commitments that applicants have offered, coupled with monitoring and enforcement by the Commission, will minimize the risks of harm and ensure that this transaction is in the public interest.

Phillip "Living on the Frontier" Dampier

Considering how weakly the FCC is committing itself to protecting rural customers from being dumped into the broadband backwater Frontier has on offer (complete with the 5GB monthly usage allowance), does collecting statistics help when things go sour?  Regulators collected statistics in New England when FairPoint failed, but that didn’t get service levels back until Maine, New Hampshire, and Vermont threatened to toss FairPoint out.  Now the company is in bankruptcy and regulators are negotiating which of the promises FairPoint made can be let go ‘for the sake of the company.’

That’s why it’s so ironic to read editorials that proclaim the FCC is on some sort of power grab when they seek to restore what meager authority they exercised over broadband before a DC Court effectively excluded broadband oversight from their portfolio.

It will be a good day when federal agencies like the FCC start worrying first and foremost about consumers instead of how to make a parade of overpriced mergers and acquisitions succeed for the companies involved.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WANE Ft Wayne Verizon hanging up on local landlines 5-24-10.flv[/flv]

WANE-TV in Fort Wayne warns viewers their landline company is about to change asVerizon vacates the area by July 1st.  (1 minute)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/CWA Verizon Dont Take the Money and Run in WV.flv[/flv]

Too late.  The Communications Workers of America ran this ad spot asking the West Virginia governor to intervene and stop the sale.  (1 minute)