Avila’s bill, H129, is up for a vote early this afternoon.  If you live in North Carolina, this is your last chance to contact the members of the committee voting on the bill and encourage them to vote NO.  Tell them you are tired of these anti-competitive bills coming up year after year.  Let them know you support community broadband, that the bill does not exempt existing networks from its lethal regulatory requirements, and that there is no need for these kinds of bills, as local governments already answer to voters.

Rep. Marilyn Avila (R-Time Warner Cable) is getting significant blowback from some of her own constituents for introducing a bill that benefits a cable company, and almost nobody else.

Avila’s district extends into the northern part of Raleigh, the capital city of North Carolina.  Now, the city is making it clear it wants no part of Avila’s bill, H129, which will guarantee residents will continue to pay escalating cable bills year after year.

Raleigh’s City Council adopted a resolution opposing Avila’s legislation, written on behalf of Time Warner Cable.

H129 will destroy North Carolina’s community-owned broadband networks and prevent new ones from launching.

Council Member Bonner Gaylord, who authored the resolution, says passage of these kinds of anti-competitive bills would stop local governments from providing needed communications services, especially advanced high-speed broadband, and deny local governments the availability of federal grants under the American Recovery and Reinvestment Act to assist in providing affordable access to high-capacity broadband service in unserved and underserved areas.

North Carolina’s broadband rankings do not speak highly of the state’s existing broadband penetration, speeds, or pricing.  Large parts of western North Carolina lack broadband altogether, and what is available is often very slow speed DSL, often providing just 1.5Mbps service.  The mountainous western areas of the state are not well-reached by cable companies, and because of geographic and distance impediments, even telephone company DSL service is sporadically available.

Take Rockingham County, where the local government is pre-occupied with trying to find providers — any providers — to extend broadband service across the north central part of North Carolina.  Adjacent to Caswell County (which Stop the Cap! featured last year), it’s just one more example of how providers have ignored large sections of the state too rural, too poor, or too difficult for them to reach.

On Monday, Mark Wells, executive director for the Rockingham County Business and Technology Center, delivered a report to the county on his progress trying to get someone to provide service between the communities of Wentworth and Madison, which currently have no access to broadband.  Wells reports he is doing all he can to get CenturyLink, the area’s phone company, to step up and provide service, and the county is trying to see if Clearwire could extend service into the northern sections of the state.

Unfortunately, Clearwire has proved to be no broadband replacement, heavily throttling their customers to speeds that occasionally seem more like dial-up than actual broadband.

Rockingham County opposes H129 for the same reasons the city of Raleigh does.  The Board of Commissioners recognizes the broadband reality of northern North Carolina.  Unless local governments have a free hand to address the digital divide themselves, there will be no long-term solution for broadband availability in rural North Carolina.  That’s the message they are sending to their representatives in Raleigh.

Addressing the state’s broadband shortage requires public and private assistance.  Public governments can construct networks that require a longer window to pay off than private “return on investment” requirements allow, and private companies can access community networks to sell their services to the public they currently do not serve (or serve well).

But because companies like Time Warner do not want the competition, particularly from networks more advanced and capable than their own, they would prefer to see them shut down and banned — which is exactly what Avila’s bill would accomplish.

Last year, Sen. David Hoyle openly admitted Time Warner Cable wrote his bill.  There is little doubt the same is true for Avila’s bill this year.

The city has an entirely different set of recommendations for Avila to consider:

1. The State of North Carolina adopt policies to encourage the development of high-speed broadband, including advanced, next-generation fiber-to-the-premises networks, in order to fully serve the citizens and advance education and economic development throughout the state;
2. The General Assembly provide incentives for both public and private development of high-capacity connections in order to handle rapidly growing data needs;
3. The General Assembly promote competition by curtailing predatory pricing practices that are used to push new providers and public broadband services out of the market; and,
4. The General Assembly reject any legislation similar to the Level Playing Field bills that would have a chilling effect on local economies and would impede or remove local government’s ability to provide broadband services to enhance economic development and improve quality of life for their citizens.

The resolution also noted that several North Carolina municipalities; including Wilson, Salisbury, Morganton, Laurinburg and Davidson, already have successfully launched local high-speed broadband networks in response to private provider’s unwillingness or inability to provide high-speed service “to serve the public and promote economic development in their respective areas.”

Stop the Cap! reader Jeff from Palo Alto, Calif., dropped us a line over the weekend asking about a story published last week by the Salisbury Post regarding a bill that would banish community-owned broadband providers in the state of North Carolina.  The legislation, custom-written by Big Telecom companies, could eventually spell doom for truly competitive service from community-owned providers like Fibrant, based in Salisbury.

“I got the impression that it said Salisbury was agreeing not to oppose the proposed legislation, in exchange for being exempted from it,” Jeff writes. “That seemed like a long-term victory for Time Warner. Am I missing something?”

The reporter who accepted propaganda at face value from the cable industry certainly did.

The article, “Lawmakers Eye Blocks on Fiber Optic Systems,” was replete with demonstrably false statements from both Time Warner Cable and a high-powered cable industry lobbyist less-menacingly-labeled “a lawyer for the N.C. Cable Telecommunications Association.”  (Perry Mason he isn’t.)

In fact, communities across the state continue to oppose this special interest favoritism, bought and paid for by the telecommunications industry.  But getting people acquainted with the facts is a problem when reporters don’t bother to fact-check some of the rhetoric from the cable industry, which at times leaves some with the ludicrous impression they are “the little guy.”

Rep. Marilyn Avila — The Representative for Time Warner Cable

The Post seems to suggest local officials are negotiating passage to the lifeboats before Rep. Marilyn Avila’s legislative gift to Time Warner Cable becomes the legal iceberg that sinks community broadband in the state.

In reality, city officials are pointing out they harbor no resentment towards any telecommunications company operating in the state.  In fact, they welcome them to participate by securing space on their advanced networks at competitive rates in public-private partnerships.

Unfortunately, they are up against Avila’s “bull in a china shop” bill that would cut the legs out from community-owned networks before such partnerships can become reality.  In fact, Avila’s abdication of her responsibilities to her constituents for the benefit of Time Warner Cable is even worse because it could ultimately harm the state’s credit rating and image if such networks can be run out of business at the behest of a competitor.

For a “small government conservative” to write a bill laden with regulations, rules, and taxes anathema to the “free market” is a testament to just how willing she is to abandon her principles when Big Cable comes calling.

Avila has suggested that existing community-owned networks are exempt in the current language of the bill.  That statement is patently untrue because the micro-management regulations found within it would apply to all community broadband networks, but exempt privately-owned ones.  That’s fair, right?

For mayors in communities with these networks, securing a strong exemption is part of a full-court press against this bill.  If it were to become law, keeping a pre-existing network in business becomes an important priority.

Mayor Susan Kluttz told the Post she is hopeful state lawmakers will rewrite the bill to exempt Salisbury and other cities with networks that are up and running.

But the mayor is smart enough to also realize at least some of the people at the table do not have the city’s best interests at heart when it comes to Fibrant.

Sources tell Stop the Cap! there are several members of the General Assembly, Republicans and Democrats, who are more than a little unhappy with Avila’s attempts to ram the bill through.  Not only does the water-carrying look bad inside (and outside) of the state, it will also destroy the potential of expanding broadband service to many poorly reached parts of North Carolina.

“This bill guarantees Time Warner will hold the keys to the broadband kingdom in North Carolina for years to come,” a well-placed source told us.  “Even public-private partnerships to develop broadband in rural areas of the state are directly threatened by her bill.”

Citizens across North Carolina are calling and writing legislators in opposition, but Avila doesn’t show signs of moving away from her pro-cable bill so far.

“Empty promises are being made to some legislators that suggest if they support this bill, Time Warner will magically wire unserved areas for service,” sources tell us.  “The company that had no intention of wiring these areas over the past two decades will continue to ignore them whether this bill passes or not.”

Indeed, Time Warner Cable and other companies use a standard business calculation when determining whether or not to wire outlying communities.  If too few customers live within a square mile radius, they don’t receive cable service.  Nothing has ever changed that unless it is mandated in a formal local franchise agreement.  At AT&T’s behest a few years ago, such local franchise agreements were banished from the state.  Rural residents in places like Caswell County pay the price as large sections of the county go without broadband service.

The implications are dire:

Jobs -are- threatened by Avila’s legislation.  They belong to the those who manufacture spools of fiber and the equipment that utilizes it, the contractors who install, maintain, and service the network, and the customer support staff that deal with customers on a daily basis.

One of the strengths providers like GreenLight and Fibrant bring to their respective communities is their networks are open to all-comers.  Time Warner Cable, AT&T, and other phone companies can obtain access on both to serve their own customers — business and residential.  The impetus for building these networks was to benefit everyone.

The only adversarial players here are cable and phone companies that want to own, manage, and control everything themselves.  The companies that spent years telling communities they saw no need to enhance service now want to legislate away the chance for others to try.

“We have several Republicans who read Time Warner’s claims about this bill, then looked over the inadequate broadband landscape in their districts back home, and are coming to the conclusion this is one bad bill,” one pro-broadband lobbyist told us.  “But this is still going to be a very hard fight unless ordinary consumers make their voices heard loud and clear.”

Fact Checking

The most disturbing thing about the Post story is the complete lack of fact checking the industry’s arguments, most of which are simply flat out false.  A few examples:

Melissa Buscher, Time Warner Cable’s vice president of communications for the Carolinas claimed the city of Wilson raised pole attachment fees by 300 percent after launching GreenLight, Wilson’s community-owned network.  Buscher suggests that is an example of cross-subsidizing networks.  In her mind, mean and nasty Wilson officials jacked up the fees  just to put the cable company at a competitive disadvantage.

But the facts tell a different story.

Wilson’s pole attachment fee, unchanged since 1975 while other communities around the nation raised them year after year, was adjusted well before GreenLight opened its doors for business.

“Before 2007, Wilson’s pole fee had stayed the same since 1975,” city spokesman Brian Bowman said. “The attachment fee increase was not related to GreenLight. The old fee schedule was outdated.”

How much money are we talking about here?  The old rate was $5 per pole annually.  Today it’s $15 per pole per year.  That means Time Warner will have to pay $246,000 a year instead of $82,000 in Wilson — petty cash to a multi-billion dollar cable company.

Time Warner itself provided data nearly five years ago in a Tennessee study on pole attachment fees that proves Wilson is hardly being arbitrary and capricious.  The cable company was paying up to $13.64 per pole four years ago in North Carolina.  The Tennessee Cable Telecommunications Association has been complaining as late as last year over average pole attachment rates of $14.86 per pole in that state, adjacent to North Carolina.

The irony of a cable company that has nearly tripled its basic cable rates over the same period of time complaining about rate increases is lost on them.

Buscher also claims their new competition in Wilson and Salisbury is run by the same city governments that regulate them:

“Cities have unfair advantages,” Buscher told the Post, noting when cities get into the broadband business, they become not only a regulator for incumbent providers, but also a competitor. “If municipalities want to get into a business already offered by the private sector, we welcome the competition, but we want to level the playing field.”

The only thing Time Warner wants to level is the competition from community networks that deliver better broadband service than they offer.

In reality, thanks to industry lobbying in the 1990s, the cable industry is almost completely deregulated.  No local, state, or federal government regulates broadband — where it is offered, at what speeds and at what prices.

There is no conflict of interest on the regulatory front.

Time Warner Cable and the North Carolina Cable Telecommunications Association: Waltzing Partners in a Dance of Deception

The North Carolina Cable Telecommunications Association, which helps deliver a one-two punch for Big Cable’s agenda, delivered the next false claim:

“Fibrant and GreenLight have lower operating costs.”

In reality, Time Warner Cable’s enormous size and scope provides them with benefits and cost saving opportunities across their national footprint that neither community provider can match:

• Volume discounts for programming, equipment, and other infrastructure;
• The power of incumbency, which makes them the default choice for most customers who must be compelled to switch providers;
• Access to grants and agreements like “payments in lieu of taxes” to protect cable jobs. Time Warner hardly pays “rack rates” for taxes across its entire footprint;
• Time Warner’s construction costs were mostly incurred in the 1990s when cable systems were last rebuilt.  Suddenlink Cable CEO Jerry Kent said it best: “I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”  That isn’t true for community networks just opening for business or still in the initial construction phase.

Frontier Communications, a private industry player, discovered all of the benefits in programming costs go to large players like Time Warner, Comcast, Verizon and AT&T when claiming they were forced to raise rates $30 a month because they could not get the same volume discounts big cable and phone companies receive.

Marcus Trathen, the lobbyist running the NCCTA, hopes his fear, uncertainty and doubt campaign will be proven correct with the passage of Avila’s bill.  As law, it assures all of the competitive advantages go to the billion dollar incumbents, and any failures will be among the community providers that compete with them:

“Cities are particularly ill-suited to competition in a technology-based industry,” Trathen said in an e-mail to the Post. “Technology changes in an instant.”

Just not for Time Warner customers in Wilson and Salisbury.  The genesis of these, and other, community-based networks come from provider intransigence to deliver the kind of broadband service consumers and businesses increasingly seek, at an affordable price.

Fibrant delivers 15/15Mbps service today in its standard broadband package.  Time Warner Cable delivers 10/1Mbps service.  When Fibrant and Greenlight were first proposed, Time Warner delivered even lower speeds.

The industry cannot have it both ways.  On the one hand, they claim community broadband is an economic failure delivering redundant service and mis-managed by government officials who do not understand the business of broadband.  On the other hand, these companies and their respective mouthpieces are literally spending tens of millions of dollars lobbying for legislation to keep these “failures” from ever getting off the ground.

As we’ve always said on Stop the Cap!, following the money always leads you to the truth.

Comcast is increasing the number of speed tiers available to broadband customers in markets where DOCSIS 3 broadband upgrades have been completed.  The new options are part of the company’s effort to rebrand its product line under the Xfinity name.

Broadband Reports notes the new speed choices come with different price points depending on regional competition and service bundling.  The Economy Plus tier is also only offered to customers calling to complain about high broadband pricing, and may not be available everywhere.  The company’s highest speed tier will be available in about half of their markets by the summer.

All plans are subject to the company’s 250GB usage cap.

Economy – 1.5 Mbps downstream, 384 kbps upstream
Economy Plus – 3 Mbps downstream, 768kbps upstream
Performance Starter – 6 Mbps downstream, 1 Mbps upstream
Performance – 15 Mbps downstream, 2 Mbps upstream
Blast – 25 Mbps downstream, 4 Mbps upstream
Extreme – 50 Mbps downstream, 10 Mbps upstream
Extreme 105 – 105 Mbps downstream, 20 Mbps upstream

EchoStar Corporation, which makes equipment and provides satellites for Dish Network, today announced it has agreed to buy Hughes Communications, Inc., for about $1.32 billion.

The deal means Dish, the second-largest U.S. satellite television provider, could be one step closer to providing a national data service to its customers.  Hughes operates a “broadband” satellite network, which almost entirely serves rural areas.

Much maligned by its customers, who consider the service’s high prices, low speeds and even lower usage caps “fraudband,” Hughes’ satellite service has been up for sale for some time.

The purchase “brings together the two premier providers of satellite communications services and delivers substantial value to our shareholders,” Pradman Kaul, chief executive officer of Hughes said in the statement.

Satellite television companies have increasingly been at a disadvantage because they cannot sell a true “triple-play” package of television, Internet, and phone service to customers who commonly bundle the three services together.  Instead, Dish and its larger competitor DirecTV have been relying on partnerships with telephone companies who provide phone and Internet service with a satellite television package.

The current generation of satellite broadband services are not well-rated by their customers.  Capacity shortages force providers to place strict limits on usage, which makes the service largely useless for high bandwidth applications — especially video.

The deal is expected to close later this year.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Hughesnet.flv[/flv]

Watch HughesNet’s advertisement promising “blazing fast” speeds in contrast to an actual speed test completed by one of their customers, at a non-peak-usage time.  (2 minutes)

Here in West Virginia, cell phone reception is often by the grace of God.  The incredibly mountainous state makes “line of sight” communications a real problem when the nearest cell tower is blocked by a gigantic shale rock formation someone blasted through to build a road decades earlier.

AT&T probably still delivers the largest coverage of rural areas in the state because its towers expand beyond the major highways other carriers cover. But even with that expanded service, using a smartphone indoors is going to be a problem in many places.

Recently, AT&T sent letters to approximately 7.5 percent of their customers in the rural areas most likely to have reception problems, offering a free “MicroCell,” which is comparable to a mini cell tower inside your home or office.  The equipment works with your existing broadband connection to expand “coverage” inside your home.  For data purposes, the MicroCell doesn’t deliver anything your personal Wi-Fi connection couldn’t, but if you rely on a cell phone, having signal bars makes all the difference if you are waiting for an important call.

A considerable number of those letters reached families in West Virginia, and that is no surprise considering the state is by far the most difficult to blanket with wireless coverage in the eastern half of the country.

But the problem is, some families are receiving the free offers, while others are not, and that is creating reception envy.

Charlotte, who lives in Whipple, W.V., outside of Oak Hill, was visiting with her neighbor Joy last week and noticed her husband fiddling with the latest gadget on his computer desk.

“It looked odd because of the way it spread out on the bottom, so I asked Joy what in the world he was installing,” Charlotte says.

“It’s a cell tower thing AT&T gave us to get better reception,” Joy responded.

Despite the fact the two families live only a few homes apart and signed up for AT&T service with the exact same phones within weeks of each other, Charlotte was never offered AT&T’s MicroCell.

AT&T notified qualified customers with a letter containing a personal reservation code, and the offer was not transferable.

“Maybe you got it and threw it away,” Joy offered.

“No, ever since the credit card companies started changing terms on us, we open every envelope that comes into this house,” Charlotte replied.

Assuming it must be an oversight, Charlotte dropped by her local AT&T store to inquire about the offer.

“We quickly learned we were not the first family to bring up this issue with AT&T as the store manager told us he was fielding complaints from all over town about the highly-selective offer,” Charlotte said.

Even worse, there was nothing the manager could do to rectify the situation.

“His hands were as tied as my patience was tried,” Charlotte tells Stop the Cap!

“The store manager offered to sell me the MicroCell for around $100 with a rebate, but why should I pay AT&T for better reception they should already be providing?” Charlotte asks.  “It seems to me if they are giving away these things to some people in a neighborhood, they should be doing it for everyone, because we pay the same bill our neighbors do.”

The seemingly random offers of MicroCell units are not limited to West Virginia.  We’ve noticed complaints from residents in northern California, the Pacific Northwest, and northern New England from others who get reception while outdoors or on the go, but find their phones useless for making and receiving calls at home.

In most cases, irate customers seeking redress from AT&T run into a bureaucratic brick wall.

Rick McGee, commenting on Engadget’s website:

I have talked to Marketing, Technical Support, and my local store, and nobody can tell me who to contact to qualify for a MicroCell. I have been an AT&T Mobility customer for over four years, with four family plan phones and two more phones on corporate contracts. The reception at my house is usually zero, at times maybe one bar, but never enough to maintain an incoming call or make an outgoing call. I guess I am a glutton for punishment, but this is the last straw.

If AT&T does not magically send me one of the MicroCell coupons, I will total up my termination fees and determine the earliest date I am willing to dump AT&T and try another carrier. In addition to the cell phones, I have two AT&T land lines, plus an AT&T internet account, so I am likely in the top tier of residential customers. With no reception at my house, I don’t see how I would fail to qualify for a MicroCell, but AT&T has no process to help individual customers with bad reception. Everyone I talk to claims ignorance. I’ve done my part, AT&T — either step up, or I am gone.

Others find similar experiences — apologies from in-person sales staff about the corporate roadblocks even they cannot navigate around.

But every once in awhile, one does.  Casey Robinson’s neighborhood lost all AT&T cell phone service when their local cell tower was destroyed in a storm.  The replacement redirected most of its signal elsewhere, leaving them with no bars.

After arguing with corporate phone support in the AT&T store for 2 hours they told me pay the $149 [for a MicroCell] or tough luck. I responded by telling them to take my family plan +2 lines, my roommates family plan +3 lines, and our Uverse U400 package with high speed internet and shove it, we will be changing carriers immediately since I have tower data from AT&T pre and post storm to show they breached our contract.

The AT&T store rep was amazing through all of this. He apologized continuously and said if it was up to them they would give out the MicroCell as soon as we walked in the door, unfortunately their computers physically block them from comping a MicroCell. While I was very distraught on the phone with AT&T, he called his manager at home and explained the situation. She drove in to the store, again apologizing for everything we had to go through, checked us out with the MicroCell then credited our account for the full purchase price and credited a month’s service to both my line and my roommate’s line for the issues we had been having. They are the only reason we still have AT&T. Of course we wrote to their district manager and AT&T corporate applauding the employee and manager, and of course from what we’ve heard they still haven’t been acknowledged for their good work.

Some others have had recent success filing complaints with the Better Business Bureau, when executive level customer service representatives come to the rescue with a free MicroCell.

Charlotte’s family intends to deal with the MicroCell Gap in their own way — by switching to Verizon Wireless, which improved service in the Oak Hill region a few years ago while they’ve been under contract with AT&T.

“We were willing to put up with the MicroCell doing the job their own cell towers should be doing, but because they don’t care about us, we’re done with them,” Charlotte says.

Customers accepting AT&T’s free offer must verbally commit to stay with the carrier at least 12 months or return the MicroCell when they depart.  If they don’t, AT&T will bill an equipment fee up to $199.