Rensselaer County is just a short drive to the east of New York’s capital city Albany, but for residents in the southern half of the county, it might as be in the middle of nowhere.

Welcome to the world of broadband have’s and have-nots. If you live in the county seat — Troy, Internet access is widely available. But if you live in a community like Nassau, in the southern part of the county, getting Internet access is strictly a hit or miss affair, and in practical terms, the only entity that will decide if you have reasonable access to broadband is Time Warner Cable.

Verizon has decided that the days of expanding DSL in rural areas are over. There is no possibility those without access to DSL now will ever see Verizon’s fiber network FiOS coming their way either. That has left many residents with an unfortunate choice between heavily usage-capped and slow satellite Internet access or heavily usage-capped and expensive wireless Internet from a cell phone company.

Nassau does have a franchise agreement with Time Warner Cable, the only cable operator willing to offer service in this part of upstate New York. The contract specifies Time Warner will bring service to any neighborhood where there are at least 20 residences within a one-mile radius.

The Record News covered negotiations for a franchise renewal for the cable company last year, and found Time Warner Cable held all the cards and the town had almost no leverage in the negotiations:

A rare sight in southern Rensselaer County.

“We really have no negotiating leverage or power and the Public Service Commission (PSC) was helpful in looking at the contract, but told us we were basically out of luck with any efforts to require anything,” said town Supervisor David Fleming, who said he was told by Time Warner Cable that specific areas in Nassau are “not currently serviceable.”

The town had marked out all the areas that were not served and met with Time Warner to try to gain extensions of service.

“This only succeeded in a couple of areas,” he said. “This is because PSC told us we have no bargaining power. The only big concession we were able to get was to reduce the number of houses per mile needed for service, but this was a pretty standard fall back for Time Warner.”

The town succeeded in negotiating standards down to 20 dwellings per cable mile from 30. “We continue to explore this matter, but frankly, there has been a great deal of unwillingness to expand service in our community,” Fleming said. “The state has been of no help in expanding services.”

As a result, Time Warner has been generally adamant about not expanding service to residents like Alan Austin, who lives on a street where 11 houses are built within a half-mile, technically the same ratio required by Time Warner Cable.

“We’ve asked them to bring the service and they won’t,” Austin told the newspaper.

Actually, Time Warner is willing to expand into Austin’s neighborhood — for the right price.

Time Warner agreed it would install cable service if the 11 homes collectively paid a $12,000 installation fee.

“We’re out of luck because we’re never going to get another nine houses in this mile,” Austin said. “We can’t get anybody to bring service here, unless we’re willing to pay an exorbitant amount.”

As for alternatives, don’t call Verizon, they’ll call you. The phone company has suggested rural residents consider their wireless broadband and phone service, assuming a cell tower can reach them with a reasonable signal. But the cost is very high — at least $50 for only 4GB of usage per month and another $20 for telephone service.

Austin is lucky enough to receive some reception from Sprint, which is slightly more reasonably priced. But to get a reliable signal, he has to place his mobile Wi-Fi hotspot in his non-climate-controlled attic. When temperatures fall or soar, the hotspot stops working. Austin has rigged a remote-powered fan in the attic to blow cool air on the hotspot this summer to keep it up and running.

“It’s ridiculous,” he admitted. “People don’t believe me when I tell them these things, but that’s what we deal with.”

The newspaper also pondered the impact of being an Internet have-not with respect to education. In more than a few communities in the county, teachers avoid giving assignments that require students to do research over the Internet, putting them at a potentially serious disadvantage when they attend college.

Businesses also avoid areas where broadband poses a significant challenge, which affects jobs. Selling a home in a broadband blackout zone can also be difficult as savvy buyers increasingly now insist on Internet accessibility.

Without the benefit of bundling discounts, rural Americans pay substantially higher prices for telecommunications services. A promotional bundle from Time Warner Cable can provide phone, Internet, and television service for less than $100 a month. Austin says his package costs more than twice that — more than $220 monthly between paying bills for Verizon phone service, DirectTV television and Sprint for broadband Internet.

These kinds of challenges are ready-made to be addressed on the local government level, but cable and phone companies lobbied successfully for near-total deregulation, making it impossible for town officials to provoke change. In fact, had the community successfully revoked Time Warner Cable’s franchise, no other commercial provider would be willing to step in. That remains common in every community considering its future relationship with the area’s cable company. An informal understanding between cable operators keep them from competing outside of their defined territories.

That leaves Nassau officials with no options, except whether to renew Time Warner’s franchise on the company’s terms for five or ten years. Time Warner wouldn’t hear of a five-year contract so the town capitulated and agreed to a 10-year franchise renewal that will continue to leave residents like Austin without much hope for cable broadband service indefinitely.

Effective June 1st, all Sprint contract and prepaid customers, as well as those using Virgin Mobile USA and Boost will find their wireless data speeds throttled if Sprint finds they are among the top 5% of users on a congested cell site.

Text messages are being sent to all customers about Sprint’s new “fairness algorithm” that it will use as part of its data “prioritization management.”

“Beginning 6/1/14, to provide more customers with a high quality data experience during heavy usage times, Sprint/Virgin Mobile USA/Boost may manage prioritization of access to network resources in congested areas for customers within the top 5 percent of data users.”

Such text messages are unlikely to be understood by average customers who have no idea how much data they use, don’t understand what “prioritization of access” means, or what would make them a “top 5 percent” data user. What many do understand is that they were sold “unlimited use” plans that will be much harder to use if they are identified as a 5%‘r.

Fierce Wireless found answers to several unanswered questions:

• Boost and Virgin customers exceeding 2.5GB of data use a month used to find their data speeds cut to 256kbps until the beginning of their next billing cycle. In March, Sprint announced it was further cutting speeds in the punishment zone to 128kbps for affected prepaid customers;
• Sprint’s postpaid/prepaid customers are likely to find themselves throttled once they exceed 5GB of usage per month.

Sprint says the throttle will only be activated on “congested cell sites” and will impact WiMAX, 3G and LTE 4G networks owned by the company. Anyone who has used Sprint’s 3G network will discover most urban and suburban Sprint cell towers are frequently congested, judging by the low speeds many customers endure. Rural customers or those served on the edge of a suburban area may never find themselves throttled and Sprint promises once traffic clears, the throttle is shut off.

At the same time, once Sprint labels you a “heavy user,” they can leave you in the penalty box for up to 60 days because the network prioritization will also apply during the following month of service.

“Customers that continue to fall within the top 5 percent of data users will continue to be subject to prioritization,” Sprint said.

The approach “will enable us to provide more customers with a high quality data experience during heavy usage times,” Sprint said in a statement sent to FierceWirelessTech.

Other wireless carriers also have employed speed throttling to control their grandfathered “unlimited data” customers, Fierce Wireless notes:

During September 2011, Verizon Wireless implemented what it  termed a “network optimization” plan to limit the bandwidth for the operator’s top 5 percent of 3G smartphone users who are on a grandfathered unlimited data plan. (Ed. Note: However, because of FCC requirements, Verizon cannot throttle its 4G LTE customers.)

One month later, AT&T Mobility  instituted a similar plan, targeting the top 5 percent of users on unlimited plans in specific high-traffic locations. However, AT&T was forced to alter its approach in early 2012 after an outcry from users who were unprepared to have their speeds reduced, particularly in cases where some of them had only consumed 2 GB of data. AT&T’s revised policy slowed speeds of unlimited data users who exceeded specific data thresholds.

T-Mobile US also uses a form of prioritization, noting “certain T-Mobile plans may be prioritized” over service plans under its GoSmart Mobile prepaid brand.

Sprint has begun decommissioning its increasingly obsolete 4G WiMAX network with definitive plans to shut off the service completely by the end of 2015.

While most Sprint customers with smartphones have long since moved away from WiMAX, Sprint has resold access to the 2.5GHz network for some prepaid Boost, Sprint, and Virgin Mobile customers as well as third parties including FreedomPop and Earthlink.

WiMAX was the first 4G network in the United States, launching first in Baltimore in the fall of 2008. Sprint customers were offered the HTC Evo 4G smartphone to access WiMAX’s faster speeds. Separately, Clearwire marketed access to WiMAX as a wireless home and business broadband solution. WiMAX was often promoted as a longer distance alternative to Wi-Fi, and was initially capable of 30-40Mbps speeds.

In practice, WiMAX in the United States never achieved great success. Sprint and Clearwire’s network was never built out sufficiently to provide nationwide coverage, and because it relied on very high frequencies, even customers inside claimed service areas often dealt with reception problems, especially indoors. Clearwire’s home broadband replacement often required reception equipment be placed near a window, preferably one without a thermal coating that could block or degrade the signal.

As soon as Sprint and Clearwire added a significant number of customers to the network, speeds deteriorated. Neither company invested enough in upgrades to keep up with demand. Instead, Clearwire’s home broadband customers, originally promised unlimited service, were routinely speed throttled for “excessive use.”

The same year WiMAX was introduced in Baltimore, Network World was already warning the technology was in trouble. By 2011, the magazine had officially declared WiMAX dead.

“There was way too much hype surrounding WiMAX (like the White Spaces today, it was marketed as ‘Wi-Fi on steroids’ and a replacement for Wi-Fi; such was, of course, complete nonsense)”, the magazine wrote.

Other American wireless carriers showed little interest in WiMAX, particularly as competing 4G technologies including HSPA+ and LTE were nearing deployment.

Despite the promise of greatly enhanced data speeds with the next generation of WiMAX, dubbed WiMAX 2, many of the world’s largest wireless carriers were already preparing to move on. In particular, China Mobile (and its 600 million customers) became the decisive factor that turned WiMAX 2 into a bad bet. China Mobile decided the better choice was TD-LTE, a variant of LTE technology. With China Mobile providing service to 10 percent of the world’s mobile users all by itself, support for TD-LTE grew and attracted equipment manufacturers that saw the earnings potential from selling tens of millions of base stations.

TD-LTE is an excellent upgrade choice for WiMAX operators because it was designed to work best at high frequencies ranging from 1850-3800MHz — the same frequency bands that WiMAX already uses.

Sprint expects to decommission at least 6,000 of its 17,000 WiMAX cell sites. Another 5,000 of those sites have already gotten TD-LTE technology, a part of Sprint’s broader LTE network upgrade. Sprint will combine its FDD-LTE network in its 800MHz and 1.9GHz spectrum with a TD-LTE network in its 2.5GHz spectrum. Sprint Spark customers are being offered tri-band equipment that can access either technology. Sprint can use its massive expanse of 2.5GHz spectrum to offload data usage from its lower frequency spectrum, especially in large cities.

Another 5,000 legacy Clearwire cell sites will be upgraded to TD-LTE between now and the end of next year. Sprint expects to deploy TD-LTE more widely than WiMAX, potentially serving 100 cities and 100 million base stations by 2016.

Sprint has protected much of its postpaid customer base from the transition by repeatedly encouraging customers to upgrade to LTE service, now being rolled out as part of its Network Vision plan. But firms like FreedomPop and others that now lease access to the WiMAX network will leave their customers with a shorter upgrade path when WiMAX equipment stops working, requiring users to upgrade to LTE equipment.

[flv]http://www.phillipdampier.com/video/Sprint Spark – Today is already the future 10-30-13.mp4[/flv]

Sprint hypes its new tri-band Sprint Spark network, which combines two different LTE networks to deliver faster data speeds. (1:18)

U.S. wireless carriers are on track to earn more than $100 billion this year from usage-based billing plans for mobile data, the first country in the world to break the symbolic $100 billion mark in data revenue.

Analyst Chetan Sharma reports Verizon Wireless and AT&T are statistically the largest recipients of revenue earned from metering data usage. For the first time in 2013, mobile data revenue surpassed voice revenue in the U.S., making data usage the most lucrative product available from wireless carriers.

A graph from the Economist published last year explains the runaway revenue growth at U.S. wireless carriers. The lack of significant competition has allowed U.S. companies to charge an average of $85 a month for data plans, which are nearly always bundled into compulsory packages of unlimited voice calling and texting. In contrast, customers in China pay just $24 for data plans. In the United Kingdom, the average charge is $9 a month.

Sharma said the only disruption to this revenue growth in the United States comes from T-Mobile USA, which has recently cut prices on its service plans, forcing AT&T and Verizon Wireless to react with moderate price cutting. But with the significant disparity in market share between AT&T and Verizon vs. T-Mobile, neither larger carrier is expected to take a significant hit to their bottom lines without a mass exodus to the country’s fourth largest provider.

Softbank, the Japanese company that now controls Sprint, has launched a lobbying effort to secure permission to acquire T-Mobile and merge it into the Sprint network. But with reports showing T-Mobile’s willingness to disrupt the wireless market, regulators are likely to be reluctant to remove that competition from the playing field.

Here comes the taxman.

New York Attorney General Eric Schneiderman has won the right to continue the state’s lawsuit against Sprint-Nextel Corp., for allegedly underpaying millions of dollars in taxes. If the courts find Sprint fully liable, the company could owe New York up to $400 million in damages.

Schneiderman’s lawsuit claims Sprint has been illegally pro-rating state and local sales taxes on its service plans based on actual customer usage instead of the full amount of monthly access charges that New York law defines as taxable.

The lawsuit alleges Sprint has underpaid New York’s Department of Taxation and Finance at least $100 million since 2005.

Since 2002, New York Tax Law has required mobile phone companies to collect and pay sales taxes on the full amount of the monthly access charges for their calling plans. For example, when a customer pays Sprint a fixed monthly charge of $39.99 for 450 minutes of mobile calling time, the law requires Sprint to collect and pay sales taxes on the entire $39.99. According to the Attorney General’s complaint, starting in 2005, Sprint illegally failed to collect and pay New York sales taxes on an arbitrarily set portion of its revenue from these fixed monthly access charges.

Sprint’s scheme is ongoing, said Schneiderman. As a result, the state claims Sprint’s underpayment of New York sales taxes is growing by about a $210,000 a week, more than $30,000 a day.

The Attorney General’s lawsuit is the first ever tax enforcement action filed under the New York False Claims Act. The Act allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government. Fraudsters found liable under the False Claims Act must pay triple damages, penalties and attorneys’ fees. Under the False Claims Act, whistleblowers may be eligible to receive up to 25 percent of any money recovered by the government as a result of information they provide.

Sprint asked the court to dismiss Schneiderman’s lawsuit, but the New York Supreme Court ruled against the company on July 1. Sprint appealed the decision to the Appellate Division, which unanimously affirmed the July 1 ruling on Feb. 27.