The License Fee pays for the BBC's television, radio, and online operations, but now the British government wants a portion of it to be directed towards broadband as well.

Britain’s new coalition government announced Wednesday it was scrapping a proposed £6 a year phone tax to help expand rural broadband in the country.

“We need investment in our digital infrastructure,” said George Osborne, the Chancellor of the Exchequer. “But the previous government’s landline duty is an archaic way of achieving this, hitting 30 million households who happen to have a fixed telephone line. I am happy to be able to abolish this new duty before it is even introduced.”

“Instead, we will support private broadband investment, including to rural areas, in part with funding from the digital switchover under-spend within the TV licence fee.”

Osborne is referring to the average £11.63 monthly fee British citizens pay to help fund the operations of the BBC’s radio, television and online operations.  A surplus of up to up to £300 million is anticipated to remain after the UK completes its transition to digital television in the next two years.  That money would be diverted to expanding rural broadband under the government plan.

But campaigners for better rural broadband service complain that will not raise nearly enough to provide broadband across the countryside.  The 50p monthly telephone tax proposed by the former Labour government would have raised nearly £1 billion per year.

Charles Trotman, of the Country Land and Business Association, told The Telegraph it will not be enough money to connect all rural areas. He said remote communities risk being left behind in ‘broadband deserts’ unless more is done to help villages set up connections themselves.

Other critics contend the surplus from the digital TV transition may not exist two years from now.  Thus far, mostly rural regions in England have made the transition to digital, costing the government publicity campaign less than expected.

Rather than the tax, Osborne claims the government can spur investment from the private sector by “making regulatory changes to reduce the cost of roll-out.”  He did not specify what those changes might be.

The government claims it is committed to providing up to 2Mbps broadband service across the entire country, but the lack of action in many areas have forced small towns and villages to launch their own municipal broadband services, sometimes funded by residents themselves.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/BBC Municipal Broadband 4-2010.flv[/flv]

The BBC covers two British communities doing it themselves — providing enhanced broadband because private providers wouldn’t.  One in Highworth offers free Wi-Fi for up to two hours daily, while in Lyddington residents raised £37,000 to obtain enhanced DSL service.  (5 minutes)

[flv width=”480″ height=”292″]http://www.phillipdampier.com/video/Signal – Connectivity on the move 6-10.mp4[/flv]

Highworth (Swindon) relies on Signal, a high speed WISP/Wi-Fi network that offers up to 20/2 Mbps unlimited access with no Internet Overcharging schemes like usage caps or overage fees for £5.99 per month, or up to two hours daily access for free.  (4 minutes)

The Beaumont Enterprise has an online poll up to accompany its report on the end of AT&T’s Internet Overcharging scheme.  The poll is not well-written — I’ll write about that later.  In the meantime, let’s deliver a message to Beaumont that usage caps and other overcharging schemes are -not acceptable!-

The poll:

Should companies charge you based on the bandwidth you use?

• Yes.  You pay more for larger and faster in everything else.
• No.  Volume purchases should yield a discount.  <– Vote for this one.
  
• Hold on while I download this movie.

The first option is nonsense.  If you buy unlimited long distance plans from AT&T (assuming they bill you correctly), do you pay more for making 10 vs. 100 calls?  No you don’t.  The second choice is the one we recommend you choose, even though it’s poorly worded — it assumes you should still be capped, just not as extremely.  We’ll have to re-educate them on that.  The third option is simply insulting — playing into the stereotype that “heavy downloaders” are simply pilfering movies from the web.  That’s garbage.  We’ll educate them about that as well.

Thus far, with 75 votes in, the noes have it.  Let’s make that overwhelmingly so — here is the link.

TV Everywhere isn’t just for the United States.  Canadian cable operators are also threatened by cable cord-cutters, although their pervasive Internet Overcharging schemes have kept TV addicts from watching too much video online.

Both Shaw Cable (serving western Canada) and Vidéotron (best known in Quebec) have this week introduced their own online video portals providing “authenticated” cable subscribers with access to on-demand movies and television programming as an extension of their cable package.  But neither company is willing to exempt its customers from Internet Overcharging schemes which apply data caps and overlimit fees to broadband accounts.

Of the two services, Shaw Cable’s is bare bones, offering a relative handful of TV shows and a movie library.  No live video is provided, and many titles carry per-viewing fees, even for cable subscribers.  Non-subscribers face even higher fees to view programming.  Vidéotron takes a different approach, offering a video portal called Illico Web that offers on-demand and live streaming feeds of a wide range of cable networks, mostly in French for its Quebec subscriber base.

Shaw positioned its video-on-demand service as an extension of its cable service.  It hopes its announced acquisition of Canwest Global, which runs the Global television network in Canada and 18 cable networks will vastly expand its offerings in the future.

Vidéotron warns its subscribers watching its service eats into monthly broadband usage allowances.

“Technology continues to evolve with the ability to watch content on multi-platforms,” said Peter Bissonnette, President, Shaw Communications. “That’s why Shaw is investing in bringing exceptional content delivered in various ways. Our new broadband VOD Player provides our customers the convenience of watching their favorite movies and television shows when and where they want to.”

Pierre Karl Péladeau, the president and chief executive officer of Vidéotron’s parent Quebecor was more abrupt when he said on Wednesday that its TV Everywhere service would offer “an alternative to piracy.”

But in Canada, there is a catch.  Neither cable provider offers subscribers unlimited broadband service.  Both employ Internet Overcharging schemes ranging from usage caps to consumption billing schemes with overlimit penalties.  Vidéotron reminds its subscribers to “keep an eye on your Internet usage.”  That’s because they don’t exempt their online viewing service from their usage limits.  Vidéotron’s video portal does eat its way through subscriber allowances.  The company provides these estimates to help guess by how much:

[flv width=”432″ height=”263″]http://www.phillipdampier.com/video/Welcome to illico web 6-10.flv[/flv]

Illico Web produced this video introduction to its TV Everywhere service. (French with English subtitles — 3 minutes)

Spangler

While the mainstream media and some of AT&T’s apologists tell consumers AT&T’s 2 GB monthly usage limit will impact only a handful of “abusers,” the cable trade press is telling its readers the industry insider’s secret — consumers will blow right through those caps.

Todd Spangler, who is an Internet Overcharging advocate and columnist for Multichannel News, a cable industry trade magazine, writes the implications of AT&T’s usage cap couldn’t be clearer to him.

The new iPhone 4, introduced yesterday to the predictable media crush, provides 10 hours of battery life for playing video, among other features.

But now that AT&T has eliminated its all-you-can-eat plan for smartphones, you will blow through the maximum 3G usage for the entry-level 200 MB plan if you watched just 4 minutes of streaming video per day. That would include commercials.

Even AT&T’s more generous DataPro 2-GB plan would allow just 35 minutes per day of streaming video (assuming you used your iPhone for nothing else), according to the carrier’s online data calculator.

Like a stopped watch, at least he’s right twice a day.

Spangler celebrates the opportunity AT&T’s overcharging scheme provides the cable industry to “grease the skids” for data caps and overpriced consumption billing on cable modem service.

In Spangler’s “Cable companies pay my salary”-world-view, it wasn’t that Time Warner Cable did the wrong thing when it tried to triple broadband pricing — to $150 a month — for the exact same level of service customers previously enjoyed.  It was all about its execution.

Spangler characterizes Time Warner Cable CEO Glenn Britt as a victim, burned over the company’s failed overcharging experiment in 2009.  When one plays with matches, is it any surprise there are consequences?

Consumers will respond to more overcharging schemes the same way they did a year before — with overwhelming condemnation and opposition.  It’s hard to convince consumers to pay a higher price for limits on usage while telling shareholders you’ve invested less to expand your network, charged more to access it, all while the costs to provide the service have dropped dramatically.  Consumers call that out for what it is: greed.

Make no mistake, consumers hate usage caps and overpriced consumption billing and Time Warner Cable has no justification to introduce either.

[flv]http://www.phillipdampier.com/video/CNBC ATT Cuts Unlimited Data 6-2-10.flv[/flv]

Normally business-friendly CNBC covers the introduction of the 2 GB usage cap on AT&T smartphone data usage.  Then the CNBC anchor got skeptical about AT&T’s claims this was good news for consumers, admitting she hates overcharging schemes that deliver a surprise on the bill at the end of the month.  Lance Ulanoff, editor of PC Magazine expressed some doubts himself.  (8 minutes)

Apple's iPhone 4

As expected, Steve Jobs introduced America to the new Apple iPhone 4 today at Apple’s Worldwide Developer Conference in San Francisco.  Karl Bode at Broadband Reports did a great summary on what’s new, so I won’t reinvent the wheel:

As everyone had expected, Apple just announced the long-awaited iPhone 4. According to his Jobsness, the phone is 24% thinner than the iPhone 3GS and as expected has a more powerful primary 5MP camera with flash — and a new camera on the front that will be used primarily for video chat. The phone’s stainless steel frame (sandwiched by glass) is being partially used as an antenna, something that may prove helpful for connectivity issues.

Other specs: Dual mics, 802.11n WiFi, GPS, compass, accelerometer, Quad band HSDPA (7.2Mbps), gyroscope (perfect for gaming, insists Jobs). The company says they’ve also improved the device’s battery. It can now handle 7 hours of 3G talk, 6 hours of 3G browsing, 10 hours of Wi-Fi browsing, 10 hours of video, or 40 hours of music. The phone also records HD video (720p at 30fps, insists Steve), and the new flash will stay on during video recording.

Amusingly, Apple ran into network connectivity issues while trying to demonstrate the phone’s higher resolution screen (join the club, Jobs). According to Apple, the phone comes in white or black, with the 16GB version costing $199 and the 32GB version costing $299. The phone will be available on June 24, with pre-orders beginning on June 15.

Karl also notes, as others have confirmed with us, AT&T is so eager to get this new phone into your hands (along with a new two-year contract), they are waiving the usual two-year waiting period before customers can upgrade their phones.  If your contract expires anytime this year, you can obtain the phone at the subsidized price.

But should you?

For many, the iPhone 4 will represent an incremental upgrade, especially if you aren’t a power user.  In this economy, is it worth $200-300 for a new phone and a new service commitment?

The upgrade for current customers, who can keep their unlimited data plan, may make sense -if- you receive tolerable service from AT&T and feel the latest phone would directly benefit you.  You should consider, however, that signing a new contract will lock you into another two year marriage with the company that drove more Americans crazy with bad service, dropped calls, slow data, and irritating customer service than any other.  A divorce will cost you up to $325 per phone. Their 3G coverage isn’t all that, either.

It also gives the company that loves to cap more of your money.

Unfortunately, waiting for the iPhone to arrive at Verizon Wireless is increasingly less likely to be a panacea for AT&T’s Internet Overchargitis.  That’s because AT&T and Verizon are the Mary Had a Little Lamb of big telecom:

Everywhere that AT&T went,
AT&T went, AT&T went,
Everywhere that AT&T went
Verizon was sure to go.

It’s a safe bet that by the time Verizon brings forth the coveted iPhone, it will have an Internet Overcharging scheme matching AT&T’s.

If you are seeking to upgrade to a smartphone, it’s increasingly likely you’ll find a better deal with Sprint or T-Mobile, both of which have no plans for AT&T’s pricing schemes.

The best way to get a company like Verizon or AT&T to pay attention is to avoid their products when they charge too much.  A dramatic reduction in demand for AT&T’s iPhone among new customers, for example, would send a clear message to Wall Street that their love of usage caps is hurting shareholder value in a big way.  They follow the money.  If existing customers hang on to their $30 unlimited plans while other customers head elsewhere to avoid AT&T’s Internet rationing, you’ll see an overnight conversion among many industry players suddenly demanding a return to the unlimited buffet.

Or better yet, how about giving every customer a choice of both types of plans — pay less for limited service or pay today’s prices for unlimited.

[flv width=”636″ height=”380″]http://www.phillipdampier.com/video/Apple – iPhone 4 6-2010.mp4[/flv]

Apple proclaims the arrival of iPhone 4, calling it a revolutionary upgrade.  Apple released this video showcasing iPhone 4’s video capabilities that AT&T has now effectively hobbled with a wireless Internet rationing plan that punishes customers who try to use the phone’s new features.  (6 minutes)