Windstream this week introduced its fiber to the neighborhood service Kinetic – its attempt to bring a competitive triple-play package of broadband, home phone, and television service to about 50,000 homes initially in Lincoln, Neb.

“We’re extremely excited to launch Kinetic in Lincoln,” said David Redmond, president of small business and consumer at Windstream. “Over the last year, we have heard loudly and clearly that this community is excited and eager for an alternative TV service. Windstream is confident that residents that sign up for Kinetic will find a highly interactive experience and a smarter way to watch TV than cable or satellite.”

The project in Lincoln will test consumer reaction and help the company plan if or how it plans to expand the service across many of its other service areas across the country.

Powered by the Ericsson Mediaroom platform, Kinetic is Windstream’s effort to squeeze about as much use of its existing copper wire infrastructure as possible. Like AT&T U-verse, Kinetic requires a fiber connection part of the way to customers, but continues to rely on existing copper telephone wiring already in the subscriber’s neighborhood. In effect, it’s an enhanced DSL platform that will split available bandwidth between television, Internet access and home phone service.

One unique aspect of Kinetic is its use of a next generation, compact whole home DVR that can record four shows at the same time, supplemented with wireless set-top boxes ($7/mo each), that allow subscribers to take the service to any television in the home without wiring. A subscriber can even move a television out into the yard and not lose service.

Remarkably, Windstream — an independent telephone company — completely de-emphasizes its own phone service in its up front promotions. Unless customers dig deeper into the Kinetic website, they will find prominently featured double play packages of television and Internet service starting at $59.98 a month. Telephone service is offered (and priced) almost as an afterthought, bundled into various packages for $5 extra a month. Phone customers get unlimited nationwide local and long distance calling.

[flv]http://www.phillipdampier.com/video/Windstream Kinetic TV 4-2015.flv[/flv]

Windstream produced this introductory video to its new Kinetic TV service, offered initially to 50,000 homes in Lincoln, Neb. (1:20)

We added the pricing details for Home Phone service.

The biggest limitation Windstream faces marketing the service is its legacy network of copper wires. Customers can only qualify for the service if the connection between their home and Windstream’s central office is good enough to sustain the speeds required to handle all three services at the same time. The company is focusing Kinetic squarely on customers looking for a cable television alternative to Lincoln’s only other provider — Time Warner Cable. That may be because Kinetic remains disadvantaged in the broadband department.

The highest Internet speed a Kinetic customer can buy is 15Mbps, which is the speed Time Warner Cable offers in its “Standard” package. Time Warner currently sells up to 50/5Mbps in Lincoln — more than three times faster than Windstream’s Kinetic. Many Windstream DSL customers have complained they don’t come close to the speeds they are paying for, particularly during peak usage periods. A Facebook group with over 500 customers exists to discuss exactly that issue. Whether it will be different for Kinetic customers is not yet known, but the company’s lawyers are prepared for that possibility.

Windstream’s Whole House DVR is only about the length of its remote control.

“Windstream cannot guarantee speeds or uninterrupted, error-free service,” the company says in its terms and conditions. “Internet speed claims represent maximum network service capability speeds.  Actual customer speeds may vary based on factors including simultaneous use of multiple devices, use of other Windstream services, customer device capabilities, Internet and Network congestion, website traffic, content provider service capacity, customer location, network conditions, and bandwidth devoted to carriage or protocol and network information.”

At least there are no usage caps.

Kinetic subscribers are also warned that just like DSL broadband, line quality will impact the kind of television service received.

“Kinetic TV includes digital channels (including local channels), one receiver and up to four standard direct video streams to the customer residence,” Windstream notes. “Of the four standard direct video streams per residence, customer’s location will determine both high definition (“HD”) availability and the maximum number of HD video streams (between one and four) a customer can view and record in HD at any one time, regardless of the number of receivers in the residence.  The remaining streams will be standard definition.”

Kinetic’s channel lineup is comparable to that of Time Warner Cable, with some minor exceptions. Time Warner imports some regional over the air channels from adjacent cities, Windstream does not. Certain channels like Turner Classic Movies are available on Kinetic, but only for customers subscribing to the most expensive tier. Time Warner offers that channel on its less expensive Standard tier.

Limited bandwidth may limit your broadband speeds and the number of HD channels you can watch at any one time.

Time Warner Cable spokesman Mike Hogan took indirect shots at both the City of Lincoln and Windstream in response to the introduction of Kinetic.

“Lincoln residents can count on the fact that Time Warner Cable will offer the best choices for TV, Internet, home phone and home security to the entire city — in sharp contrast to competitors who only serve select areas, or won’t even say where they will or won’t serve,” Hogan said in an email to the Journal-Star.

That’s a reference to Windstream’s refusal to specify exactly where in Lincoln Kinetic is available.

Stop the Cap! surveyed more than 100 Lincoln-area addresses this morning and found Kinetic available primarily in wealthy and newer neighborhoods south and southeast of the city center, including zip codes such as 68516. A review of real estate transactions across the city of Lincoln showed home prices in this area are well above other parts of the city. That suggests Windstream is targeting the service to higher-income neighborhoods during its initial rollout, which plans to reach up to 45 percent of city households.

Although Windstream officials expect to bring Kinetic to about 80% of Lincoln, the city has given the company 15 years to complete the project. Further expansion may also depend on how customers respond to Kinetic.

With plenty of time, Windstream may choose to turn its attention elsewhere, eventually introducing the service in other cities across its 18-state service area of Alabama, Arkansas, Florida, Georgia, Iowa, Kentucky, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina and Texas, before it gets around to wiring urban poor neighborhoods in Lincoln.

Cable industry defenders believe Time Warner Cable and Windstream are being treated differently by city officials. Hogan notes the cable company is required to serve the entire metropolitan area, unlike Windstream that critics contend may be interested only in cherry-picking the low-hanging fruit.

Windstream’s announcement leaves just two significant independent telephone companies without IPTV offerings: FairPoint and Frontier Communications.

[flv]http://www.phillipdampier.com/video/KLKN Lincoln New television service in Lincoln 4-16-15.mp4[/flv]

KLKN in Lincoln covered the Windstream event introducing Kinetic TV to Lincoln and talked with company officials about what the new service offers Lincoln and how much it costs in comparison to Time Warner Cable, the area’s incumbent cable company. (2:29)

Houston residents excited by this week’s launch of AT&T U-verse with GigaPower have been quickly disappointed after learning the service is available practically nowhere in Houston and likely won’t be for some time.

The upgrade, offering up to 1,000/1,000Mbps broadband, was launched Monday with an announcement “select residents” in Bellaire, Pasadena, and northwest Harris County, Tex. will be the first to get the service.

Bellaire, known as the “City of Homes,” is a primarily residential community of 6,000 houses surrounded by the city of Houston. AT&T’s Houston headquarters are located in Bellaire, and the company maintains good relations with the local government. Larry Evans, AT&T’s vice president and general manager for South Texas told the Houston Chronicle that is a key factor for getting GigaPower upgrades. Evans said Bellaire, Pasadena and northwest Harris County have been very cooperative in clearing red tape and letting AT&T install fiber infrastructure for GigaPower with a minimum of fuss from permitting and zoning authorities.

Bellaire is a mostly residential community surrounded by Houston.

The larger city of Pasadena, with a population approaching 150,000 is another case where close cooperation with the city government made the difference. The city council contracts with AT&T to supply telecom services to the local government as well.

As in other AT&T service areas, actual availability of GigaPower is extremely limited. A search of prospective addresses in Pasadena found service available in only a few neighborhoods. In Bellaire, only a few streets now qualify for service. We were unable to find a single address in “northwest Harris County” that qualified for U-verse with GigaPower, but AT&T claims that “surrounding communities” would also have access, without disclosing the names of any of them. That makes it extremely difficult to accurately use AT&T’s service qualification tool to verify coverage.

Jim Cale found he pre-qualified on the website for U-verse with GigaPower service, but his hopes were dashed when a representative informed him his order was canceled because, in fact, GigaPower was not actually available on his street.

“My neighborhood was wired with fiber to the home when it [was built] a few years ago,” shared “Ed From Texas.” “AT&T is the provider and that was one of its advertised features. Who do I need to harass at AT&T to get Gigapower turned on for us?”

Gene R. is in a similar predicament:

“I can’t even get U-Verse and I am two blocks from loop 610,” he said. “AT&T says they don’t know when it will be available. I suspect…never.”

Richard dumped AT&T in the past for not meeting the speeds U-verse advertises, but is hopeful an all-fiber network might finally bring better speeds.

“I dropped AT&T’s MaxPlus because I never got anything approaching the 18Mbps speed I was being billed for,” he wrote.

AT&T will sell several U-verse with GigaPower plans in Houston. The packages below include waivers of equipment, installation and activation fees, if you agree to allow AT&T to monitor your browsing activity:

• U-verse High Speed Internet Premier: Internet speeds up to 1Gbps starting as low as $110 a month, or speeds at 300Mbps as low as $80 a month, with a one year price guarantee;
• U-verse High Speed Internet Premier + TV: Internet speeds up to 1Gbps and qualifying TV service starting as low as $150 a month, or speeds at 300Mbps and qualifying TV service as low as $120 a month, with a one year price guarantee;
• U-verse High Speed Internet Premier + TV + Voice: Internet speeds up to 1Gbps with qualifying TV service and Unlimited U-verse Voice starting as low as $180 a month, or speeds at 300Mbps with qualifying TV service and Unlimited U-verse Voice as low as $150 a month, with a two-year price guarantee.

These offers all include a provision in the service agreement allowing AT&T to spy on your browsing habits ostensibly to supply “targeted advertising.” But the terms and conditions do not limit AT&T from broadening its monitoring of your usage for other purposes. If you opt out, the price goes up to $109 monthly for 300Mbps service and $139 monthly for 1Gbps broadband and you will pay installation and activation fees.

AT&T says the monitoring is done purely to power its targeted ads. Some examples:

• If you search for concert tickets, you may receive offers and ads related to restaurants near the concert venue;
• After you browse hotels in Miami, you may be offered discounts for rental cars there;
• If you search for a car online, which may include window shade, you may receive an email notifying you of a local dealership’s sale;
• If you are exploring a new home appliance at one retailer, you may be presented with similar appliance options from other retailers.

“You might receive these offers or ads online, via email or through direct mail,” says AT&T on their Internet Preferences page.

The “price guarantee” provision is actually a contract obligating you to stay with U-verse for 1-2 years or face an early termination fee of $180. AT&T also warns your Internet speeds will deteriorate “if two or more HD shows [are] viewed at same time.” Usage caps apply, as usual. GigaPower customers signed up for the fastest speeds receive 1 terabyte, or 1,000 gigabytes, of data per month. Customers will get warnings if they exceed the cap twice. The third time, and going forward after that, they’ll pay a $10 fee for each 50GB over the cap.

Phillip “Comcast lost its case for usage caps” Dampier

With today’s announcement Comcast intends to bring unlimited 2Gbps broadband to as many as 18 million homes across its service area, one thing is clear — if Comcast is not worried about the impact of that many potential customers consuming 2Gbps of bandwidth, there is absolutely no justification to impose usage caps and allowances on any Comcast customer.

A frequent justification for usage caps and usage billing is to guarantee fair access for all customers on a shared, congested network. Another is to help defray the cost of broadband expansion. But Comcast’s new super-speed tier will have no usage cap and customers are invited to use it as much as they like for a fixed price. Clearly, a customer maxing out a 2Gbps connection to upload and download enormous amounts of content, say on a peer-to-peer network, will have a far greater impact on Comcast’s infrastructure than a user with a basic 25Mbps Internet connection. Yet today in Atlanta, Comcast is asking its 25Mbps customers to stay within a 300GB usage allowance, if they want to avoid an overlimit penalty of $10 for each 50GB block of additional usage.

Comcast does not like Stop the Cap! calling Comcast’s “data usage trials” what we believe them to be: “usage caps.”

In response to our testimony before the New York Public Service Commission last year regarding its application to acquire Time Warner Cable, Comcast objected to our claim it was placing usage allowances or limits on its broadband customers.

“Comcast does not have ‘data caps’ today,” Comcast told the PSC in its filing. “Comcast announced almost two years ago that it was suspending enforcement of its prior 250GB excessive usage cap and that it would instead be trialing different pricing and packaging options to evaluate options for subscribers—options that reflect evolving Internet usage and that are based on the desire to provide flexible consumption plans, including a plan that enables customers who want to use more data the option to pay more to do so as well as a plan for those who use less data the option to save some money.”

Yet Comcast’s desire to offer “flexible” usage plans becomes very inflexible when customers ask for unlimited service. Comcast has refused to offer such an option in several trial markets where usage caps are once again being tested.

Last May, Comcast vice president David Cohen emphatically stated usage caps and usage-based billing were all about “fairness,” telling investors: “People who use more should pay more, and people who use less should pay less.”

Those signing up for 2Gbps service will be in a position to use far more bandwidth and data than any other Comcast customer subscribing to a lower speed broadband tier, yet will not be asked to pay more for using more or pay less for using less. They will be signing up for a simple to understand unlimited usage plan most Comcast customers want that will carry no billing surprises. At the moment, that is the only unlimited tier residential plan a Comcast customer in Atlanta will be able to buy.

Also turned on its head is the idea that customers who use the most bandwidth or cost Comcast the most should be contributing more to help Comcast pay for network upgrades, but once again this will not be the case for 2Gbps customers in Atlanta. They will cost Comcast a fortune as the company rips out its existing HFC (coaxial cable) infrastructure and replaces it with fiber to the home service. Yet the 25Mbps customer still using decades-old coaxial cable is effectively being asked to limit their Internet usage to avoid additional charges while the 2Gbps modern fiber customer is not.

It clearly makes no sense, but will rake in dollars for Comcast as usage continues to grow.

If Comcast’s network can sustain up to 18 million 2Gbps users with no usage cap, it has more than enough capacity to take the limits off every Comcast broadband customer. Comcast must shelve its usage billing trials immediately and remove all usage allowances from residential broadband customers in various test markets where they have been in place for more than a year. Google, Verizon, Time Warner Cable, Cablevision, Charter, and many other broadband providers have found no defensible reason to slap usage limits on their broadband customers. If they can provide comparable speeds and service without a cap, so can Comcast.

Comcast should clearly state it is in the business of providing the best possible customer experience using 21st century infrastructure more than robust enough to sustain usage demands, and compulsory usage caps and consumption billing are incompatible with the company’s goal to provide top-quality, worry-free Internet access.

If Comcast wants to test voluntary discount programs for light users, we have no objection. But customers should always have access to an affordable unlimited option without having to watch usage meters or worry about bill shock.

Comcast needs to do the right thing today and end all compulsory data usage trials across the country and commit to providing unlimited, allowance-free broadband service.

Could a speed test like this be in your future?

Comcast is entering the gigabit broadband business and is guaranteeing customers willing to pay for the experience will not be subjected to a usage cap.

Comcast’s Gigabit Pro will arrive next month in select Atlanta neighborhoods located within one-third of a mile of Comcast’s fiber backbone network in the city. Promising 2,000/2,000Mbps unlimited fiber-to-the-home service (at a yet to be disclosed price), Comcast hopes to upstage Google Fiber and AT&T U-verse with GigaPower which are both working to upgrade Atlanta to 1,000Mbps service.

“We’ll first offer this service in Atlanta and roll it out in additional cities soon with the goal to have it available across the country and available to about 18 million homes by the end of the year,” said Marcien Jenckes, executive vice president of consumer services for Comcast. “Gigabit Pro is a professional-grade residential fiber-to-the-home solution that leverages our fiber network to deliver 2Gbps upload and download speeds. We’ve spent a decade building a national fiber backbone across 145,000 route miles of fiber. This new service will be available to customers that are within close proximity to our fiber network.”

Comcast says it will price Gigabit Pro below the cost of its current Extreme 505 (505/100Mbps) service, which costs $399.95 a month, not including the $250 technology activation fee, $250 installation fee, and three-year contract with up to a $1,000 early cancellation penalty. It seems unlikely Comcast’s price for 2Gbps will hover near Google and AT&T’s usual $70 fee for 1Gbps service. Comcast has to bring fiber from its nearest fiber node to a customer’s home and install commercial-grade equipment capable of handling 2Gbps. Existing Extreme 505 customers will be upgraded to 2Gbps for no additional charge.

Comcast officials have repeatedly stressed its 2Gbps tier will be exempt from usage caps, which makes it the only unlimited residential broadband offering available to Comcast customers in Atlanta. Other residential customers are now subjected to a 300GB usage cap with $10/50GB overlimit fee.

Marketing Comcast’s 2Gbps offering may prove tricky because potential customers must live close to pre-existing Comcast fiber. If you don’t qualify, Comcast won’t pay to bring fiber infrastructure your way. Those outside of the fiber service area will continue to be serviced by standard coaxial cable. Comcast will wait for DOCSIS 3.1 to be officially available before deploying more speed upgrades in 2016. It promises to boost speeds up to at least 1Gbps if demand warrants.

The sudden announcement Comcast was willing to ditch part of its HFC coax network in favor of fiber, almost unprecedented for a major cable operator, and boost speeds beyond a gigabit may also be used to boost its chances of winning approval of its merger deal with Time Warner Cable. TWC Maxx, Time Warner’s own speed upgrade effort, only raises Internet speeds to a maximum of 300Mbps. Comcast had promised to upgrade Time Warner Cable customers’ speeds as part of the merger, but TWC Maxx offered most customers better speeds than what Comcast offered most of its residential customers.

Article was updated to correct the upload speed for the 505Mbps Comcast tier. It is now evidently 100Mbps, up from 65Mbps.

AT&T is rolling out its gigabit fiber service in Cupertino, Calif., but if you want it you will pay $40 a month more than those who live in cities where Google Fiber offers competition.

AT&T U-verse with GigaPower launched Monday in “select areas,” which traditionally means it won’t be immediately available to most customers. The San Jose Mercury News reports AT&T admitted the service will be available only to a few thousand homes for now in the city and refused to give a percentage of how many of Cupertino’s 20,000 homes would ultimately be able to get the service. AT&T is under no obligation to provide the service and can cherry-pick neighborhoods and skip past government buildings, schools, and hospitals. AT&T won’t give any commitments to the city on its gigabit service.

The company justifies charging $110 a month for the same service it charges $70 for in Austin, Kansas City and North Carolina because it can afford to test higher price points where competitors won’t steal their business.

“We are trying to understand how different markets respond,” Eric Boyer, senior vice president of AT&T U-verse told the Wall Street Journal.

AT&T doesn’t treat the home town of their corporate headquarters much better. In Dallas, Gigapower costs $110, down $10 from its initial price. As Time Warner Cable and Google ponder their own broadband upgrades in North Carolina, AT&T suddenly cut the price of GigaPower on Mar. 17 from $120 to $70 in Winston-Salem and Raleigh-Durham.

AT&T customers who do not want the company to monitor their browsing activities have to pay $29 more for privacy protection, which opts them out of AT&T’s tracking systems. Despite the high-speed and price, AT&T still insists on usage caps for its most premium broadband offering. Customers can use up to 1TB per month, after which AT&T slaps overlimit fees of $10 for each 50GB customers use over their limit. Its primary competitors, including Google, Time Warner Cable, Verizon and Charter do not have usage caps. Boyer says he knows of no customer that has exceeded the 1,000GB usage cap. But that also brings the question if no customer has exceeded the cap, why have one?

More importantly, Boyer added the company isn’t yet offering services that would be exempt from the cap but might do so in the future. “We are open to a whole host of options,” he said. Critics would likely call that an end run around Net Neutrality.

Competition is the significant driver pushing AT&T and other providers to accelerate broadband upgrades and lower prices for higher speed tiers. In markets where cable operators face DSL competition from the phone companies, speeds are lower and prices are higher. Where an incumbent announces major upgrades like GigaPower or Time Warner Cable Maxx, competitors are forced to respond with upgrades of their own.

That leaves cities served by independent telephone companies like Frontier, CenturyLink, and Windstream at a distinct disadvantage because none of those companies have announced sweeping broadband speed increases and have relied instead on acquired fiber networks (Frontier FiOS and U-verse), limited fiber rollouts (CenturyLink) and incremental speed increases using VDSL and bonded DSL (all three). Frontier claims its customers are not interested in faster broadband speeds.

The northeastern United States has seen only one major market disruptor — Verizon FiOS, and it has shelved future expansion. Dominant cable provider Time Warner Cable has not seen its market share hurt much by limited DSL speeds offered in many areas by Verizon, Frontier, and FairPoint Communications. It continues to offer a maximum of 50/5Mbps broadband in upstate New York, Maine, and Massachusetts.