FCC chairman Thomas Wheeler doesn’t like what he sees when looks at the state of American broadband.

At a speech today given to the 1776 community in Washington, Wheeler complained about the lack of broadband competition in the United States.

“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”

“The lighter the blue, the fewer the options,” Wheeler said, gesturing towards his chart. “You get the point. The bar on the left reflects the availability of wired broadband using the FCC’s current broadband definition of 4Mbps. But let’s be clear, this is ‘yesterday’s broadband.’ Four megabits per second isn’t adequate when a single HD video delivered to home or classroom requires 5Mbps of capacity. This is why we have proposed updating the broadband speed required for universal service support to 10Mbps.”

But Wheeler added that even 10Mbps was insufficient as households increasingly add more connected devices — often six or more — to a single broadband connection.  When used concurrently, especially for online video, it is easy to consume all available bandwidth at lower broadband speeds.

Wheeler

Wheeler’s new informal benchmark is 25Mbps — “table stakes” in 21st century communications. About 80 percent of Americans can get 25Mbps today or better, but typically only from one provider. Wheeler wants even faster speeds than that, stating it is unacceptable that more than 40% of the country cannot get 100Mbps service. Wheeler seemed to fear that phone companies have largely given up on competing for faster broadband connections, handing a de facto monopoly to cable operators the government has left deregulated.

“It was the absence of competition that historically forced the imposition of strict government regulation in telecommunications,” Wheeler explained. “One of the consequences of such a regulated monopoly was the thwarting of the kind of innovation that competition stimulates. Today, we are buffeted by constant innovation precisely because of the policy decisions to promote competition made by the FCC and Justice Department since the 1970s and 1980s.”

Wheeler said competition between phone and cable companies used to keep broadband speeds and capacity rising.

“In order to meet the competitive threat of satellite services, cable TV companies upgraded their facilities,” Wheeler said. “When the Internet went mainstream, they found themselves in the enviable position of having greater network capacity than telephone companies. Confronted by such competition, the telcos upgraded to DSL, and in some places deployed all fiber, or fiber-and-copper networks. Cable companies further responded to this competition by improving their own broadband performance. All this investment was a very good thing. The simple lesson of history is that competition drives deployment and network innovation. That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

But Wheeler admits the current state of broadband in the United States no longer reflects the fierce competition of a decade or more ago.

“Today, cable companies provide the overwhelming percentage of high-speed broadband connections in America,” Wheeler noted. “Industry observers believe cable’s advantage over DSL technologies will continue for the foreseeable future. The question with which we as Americans must wrestle is whether broadband will continue to be responsive to competitive forces in order to produce the advances that consumers and our economy increasingly demand. Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler recognized what most broadband customers have dealt with for years — a broadband duopoly for most Americans.

“Take a look at the chart again,” Wheeler said. “At the low end of throughput, 4Mbps and 10Mbps, the majority of Americans have a choice of only two providers. That is what economists call a “duopoly”, a marketplace that is typically characterized by less than vibrant competition. But even two “competitors” overstates the case. Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after. Once consumers choose a broadband provider, they face high switching costs that include early termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

Wheeler emphasized that true competition would allow customers to change providers monthly, if a vibrant marketplace forced competitors to outdo one another. That market does not exist in American broadband today.

“At 25Mbps, there is simply no competitive choice for most Americans,” Wheeler added. “Stop and let that sink in…three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all. Things only get worse as you move to 50Mbps where 82 percent of consumers lack a choice. It’s important to understand the technical limitations of the twisted-pair copper plant on which telephone companies have relied for DSL connections. Traditional DSL is just not keeping up, and new DSL technologies, while helpful, are limited to short distances. Increasing copper’s capacity may help in clustered business parks and downtown buildings, but the signal’s rapid degradation over distance may limit the improvement’s practical applicability to change the overall competitive landscape.”

Wheeler finds little chance wireless providers will deliver any meaningful competition to wired broadband because of pricing levels and miserly data caps. Such statements are in direct conflict with a traditional industry talking point.

In a remarkable admission, Wheeler added that the only hope of competing with cable operators comes from a technology phone companies have become reluctant to deploy.

“In the end, at this moment, only fiber gives the local cable company a competitive run for its money,” Wheeler said. “Once fiber is in place, its beauty is that throughput increases are largely a matter of upgrading the electronics at both ends, something that costs much less than laying new connections.”

Wheeler also continued to recognize the urban-rural divide in broadband service and availability, but said little about how he planned to address it.

Wheeler’s answer to the broadband dilemma fell firmly in the camp of promoting competition and avoiding regulation, a policy that has been in place during the last two administrations with little success and more industry consolidation. Most of Wheeler’s specific commitments to protect and enhance competition apply to the wireless marketplace, not fixed wired broadband:

1. Where competition exists, the Commission will protect it. Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example. As applied to fixed networks, the Commission’s Order on tech transition experiments similarly starts with the belief that changes in network technology should not be a license to limit competition.

In short, don’t expect anymore efforts to combine T-Mobile and Sprint into a single entity. Wheeler only mentioned “nationwide wireless providers” which suggests it remains open season to acquire the dwindling number of smaller, regional carriers. Wheeler offers no meaningful benchmarks to protect consumers or prevent further consolidation in the cable and telephone business.

2. Where greater competition can exist, we will encourage it. Again, a good example comes from wireless broadband. The “reserve” spectrum in the Broadcast Incentive Auction will provide opportunities for wireless providers to gain access to important low-band spectrum that could enhance their ability to compete. Similarly, the entire Open Internet proceeding is about ensuring that the Internet remains free from barriers erected by last-mile providers. Third, where meaningful competition is not available, the Commission will work to create it. For instance, our efforts to expand the amount of unlicensed spectrum creates alternative competitive pathways. And we understand the petitions from two communities asking us to pre-empt state laws against citizen-driven broadband expansion to be in the same category, which is why we are looking at that question so closely.

Again, the specifics Wheeler offered pertain almost entirely to the wireless business. Spectrum auctions are designed to attract new competition, but the biggest buyers will almost certainly be the four current national carriers, particularly AT&T and Verizon Wireless. Although low-band spectrum will help Sprint and T-Mobile deliver better indoor service, it is unlikely to drive new market share for either. Wheeler offered no specifics on the issues of Net Neutrality or municipal broadband beyond acknowledging they are issues.

3. Incentivizing competition is a job for governments at every level. We must build on and expand the creative thinking that has gone into facilitating advanced broadband builds around the country. For example, Google Fiber’s “City Checklist” highlights the importance of timely and accurate information about and access to infrastructure, such as poles and conduit. Working together, we can implement policies at the federal, state, and local level that serve consumers by facilitating construction and encouraging competition in the broadband marketplace.

Most of the policies Wheeler seeks to influence exist on the state and local level, where he has considerably less influence. Based on the overwhelming interest shown by cities clamoring to attract Google Fiber, the problems of access to utility poles and conduit are likely overstated. The bigger issue is the lack of interest by new providers to enter entrenched monopoly/duopoly markets where they face crushing capital investment costs and catcalls from incumbent providers demanding they be forced to serve every possible customer, not selectively choose individual neighborhoods to serve. Both incumbent cable and phone companies originally entered communities free from significant competition, often guaranteed a monopoly, making the burden of wired universal service more acceptable to investors. When new entrants are anticipated to capture only 14-40 percent competitive market share at best, it is much harder to convince lenders to support infrastructure and construction expenses. That is why new providers seek primarily to serve areas where there is demonstrated demand for the service.

4. Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband. One thing we already know is the fact that something works in New York City doesn’t mean it works in rural South Dakota. We cannot allow rural America to be behind the broadband curve. Our universal service efforts are focused on bringing better broadband to rural America by whomever steps up to the challenge – not the highest speeds all at once, but steadily to prevent the creation of a new digital divide.

Again, Wheeler offers few specifics. Current efforts by the FCC include the Connect America Fund, which is nearly entirely devoted to subsidizing rural telephone companies to build traditional DSL service into high-cost areas. Cable is rarely a competitor in these markets, but Wireless ISPs often are, and they are usually privately funded and consider government subsidized DSL expansion an unwelcome and unfair intrusion in their business.

“Since my first day as Chairman of the FCC my mantra has been consistent and concise: ‘Competition, Competition, Competition,'” said Wheeler. “As we have seen today, there is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable.”

Under Wheeler’s leadership, Comcast has filed a petition to assume control of Time Warner Cable, AT&T is seeking permission to buy DirecTV, Frontier Communications is acquiring the wired facilities of AT&T in Connecticut, and wireless consolidation continues. A forthcoming test of Wheeler’s willingness to back his rhetoric with action is whether he will support or reject these industry consolidating mergers and acquisitions. Wheeler’s FCC has also said little to nothing about the consumer-unfriendly practice of usage caps and usage-based billing — both growing among wired networks even as they upgrade to much-faster speeds and raise prices.

More than 50 mayors of towns and cities large and small regurgitated Comcast-provided talking points in a joint letter submitted to the FCC in support of the Comcast-Time Warner Cable merger:

The combination of these two American companies will bring benefits to every affected city. Cities joining the Comcast service area will benefit from increased network investment, faster Internet speeds, improved video options and leading community development programs to help us tackle important community challenges like the digital divide. Existing Comcast markets will enjoy the benefits of a company with the scale and scope to invest in innovation and deliver products and services on a regional basis.

For us, the most significant aspect of the proposed transaction is its capacity to propel new investment in infrastructure in Time Warner markets that will enhance video and Internet service in our communities. Comcast has pledged to invest hundreds of millions of dollars a year speeding up and improving the combined company’s networks.

We also view positively the apparent response to this development from other companies that provide similar services. Since the Comcast Time Warner Cable transaction was proposed, Google has announced plans to expand its high-speed Fiber service to 34 new communities, AT&T has announced plans to expand its 1 gigabit U-Verse service to 100 new municipalities including 21 large cities, and Sprint’s corporate parent has proposed to build a 200 Mbps wireless network for the US.

In addition to being terribly misleading, parts of the letter are factually inaccurate. The letter’s text was taken almost entirely from Comcast’s own talking points released to the media and disclosed to the Securities and Exchange Commission.

Buffalo Mayor Byron Brown
2012: Time Warner Cable is naughty.
2014: Time Warner Cable is nice.

Remarkably, Buffalo Mayor Byron Brown managed a complete flip-flop on his views of Time Warner Cable. In 2012, he co-signed a letter accusing Comcast and Time Warner Cable of anticompetitive behavior, runaway rate increases, and a growing digital divide. He was speaking about Comcast and Time Warner Cable’s  decision to partner with Verizon Wireless to jointly market products to their customers:

“We are deeply worried that the anti-competitive partnership between Verizon Wireless, the nation’s largest wireless provider, and four of the leading cable companies will have a negative impact on economic development and job creation in our cities, leading to higher prices, fewer service options, and a growing digital divide, “ the letter reads. “As you review the Verizon Wireless/cable transaction, we strongly urge you to examine the impact of this transaction on competition and consumer choice, and ensure that our communities are not left behind.”

This year, despite the fact both Comcast and Time Warner Cable still have their cross-marketing agreement with Verizon and both cable operators have raised prices, Brown joined the other mayors heaping praise on both cable companies:

Time Warner Cable has been a responsible corporate citizen whose efforts will only be enhanced by joining forces with Comcast’s community investment programs. Comcast has established itself as an industry leader and exemplary community partner who invests in its local communities and works hand in hand with local governments on critical social challenges like the digital divide.

Except when it is not.

Matthew Keys, who comments on journalism and social media, notes the Comcast merger has little to do with broadband expansion at other companies:

But the mayors failed to note that Sprint’s pledge of a faster wireless data network was predicated on a merger with rival T-Mobile, which fell through earlier this month. In addition, AT&T’s 1-Gigabit Internet service is likely being offered as an incentive for the FCC to approve its own proposed merger with Comcast competitor DirecTV; the Internet service is offered to residents in a handful of cities at a whopping $100 a month, nearly triple what the company sells it’s basic broadband Internet service for. And while the mayors assert that Google is expanding its Fiber service to more than 30 areas, they fail to note that Google is in preliminary talks with those communities and that the rollout may never happen.

If any providers inspired a broadband speed Renaissance, it was Google Fiber and a handful of gigabit community-owned fiber networks like EPB in Chattanooga, all demonstrating fast speeds and affordable pricing can go hand in hand when your primary interest is serving customers, not shoveling money at shareholders.

Customers who happen to live in the cities below might want to fill the email boxes and melt down the phone lines of these mayors who have demonstrated a willingness to throw their constituents under the bus (Matthew Keys did an exceptional job collecting their contact information).

Feel free to share our fact-based testimony with the mayors and let them know you don’t appreciate the fact they are spending taxpayer time and money advocating for a multi-billion dollar cable merger the majority of Americans oppose. Then remind them if this merger succeeds, you will think of them every time you have a problem with your cable service, when your bill increases, and when you discover Comcast has rationed your use of the Internet with a compulsory usage allowance. Because these problems always come fast and furious with Comcast, let them know you will have no trouble recalling their role in bringing Comcast to town when you go and vote.

This article updated 8/28 to reflect that Pedro Segarra is the mayor of Hartford, Conn., not Hartford, Colo.

Comcast told the New York Public Service Commission that the overwhelming majority of the substantive comments submitted to the regulator “express a strong desire and enthusiasm for the improved and expanded voice, data, video, and broadband services” that the merger of Comcast and Time Warner Cable will bring to the state.

“Given these many concrete benefits, and the lack of any harm to competition or consumers, it should come as no surprise that the overwhelming majority of the substantive comments (approximately 110 out of a total of about 140 substantive comments) filed in this proceeding support Commission approval of the transaction,” Comcast wrote in its latest submission.[1]

Comcast’s “new math” applies a subjective (and undisclosed) standard about what constitutes “substantive,” but in the end the cable company has urged the Commission to disregard the sentiments of more than 2,700 New York State residents who have filed comments in strong opposition to the merger because their remarks simply fell beneath Comcast’s standards.

“The minority of organizations and individuals who filed substantive comments opposing the transaction largely ignore the significant public interest benefits of the transaction,” writes Comcast. “Instead, these detractors raise issues that are not relevant to the transaction and are factually inaccurate and speculative – such as unfounded concerns about Comcast’s broadband management practices, misplaced criticisms of Internet Essentials, and general fears that ‘big is bad.’ None of these commenters identify any reasonable basis to reject or condition the Joint Petition.”

Comcast did not apply the same rigorous standards of ‘substantiveness’ to comments sent by its supporters, who often used what New York Assemblyman Joe Morelle admitted was a Comcast-supplied template ghost-written by the company itself.[2]

“Supporters of the transaction span a wide range of groups and individuals, including governmental officials (e.g., mayors, town supervisors, county commissioners, city councils, state legislators, and school superintendents); businesses and non-profits; state and local organizations focused on economic development; community service, youth and family, and diversity organizations; arts and education groups; and others,” writes Comcast.

But the company never disclosed the many financial ties between Comcast and its political and civic supporters. In fact, a large percentage of the “template” letters of support originated from politicians like Assemblyman Morelle, who recently received a $1,000 check from Comcast[3] and Rochester city councilman Adam McFadden, whose group claims to receive $50,000 annually from Comcast.[4] [5]

In fact, it is hard not to find financial connections between Comcast’s supporters and the cable company itself. A random sampling uncovers multiple instances of Comcast contributions that were followed by letters of support for its merger:

The Urban League has received at least $12 million in in-kind contributions from Comcast since 2007, in addition to direct financial contributions to local chapters around Comcast’s service area.[6] In just one example Stephen Thomas, Comcast’s area vice president, who also serves on the Chicago chapter’s board of directors, presented the organization with a check for $40,000.[7] Just a few months later, Andrea L. Zopp, president of the Chicago Urban League, wrote to urge the FCC to approve Comcast’s merger deal.[8]

“Comcast is a strong supporter of the Urban League movement throughout the country. … I sincerely ask that you approve this transaction so that the Urban Leaguers and everyone else can benefit,” Zopp wrote.

Various chapters of the Boys and Girls Club also submitted glowing letters in favor of the merger. Comcast has partnered with local Boys & Girls Clubs since 2000, providing more than $68 million in cash and in-kind contributions. But no chapter was willing to openly admit Comcast asked them to share their views with New York regulators and only a few disclosed the financial ties the organization has with Comcast. The Boys and Girls Club has been a very loyal supporter of whatever Comcast has on its corporate agenda. Chapters submitted letters urging regulators to approve the Comcast-NBC merger in 2010 as well.[9]

Another strong supporter Comcast quotes from in its filing is the National Black Chamber of Commerce. But they don’t mention Comcast is a corporate sponsor of the group.[10]

Comcast (falsely) claims their $9.95 Internet Essentials is the country’s only discount Internet program for the disadvantaged. But Google Fiber gives it away for free to anyone who wants it.

Comcast also called criticism of its Internet Essentials discount Internet program “inaccurate and unavailing,” despite the fact the company’s own senior vice president David Cohen admitted the program was stalled to use as a political chip to win approval of its merger with NBCUniversal.[11]

Comcast also falsely claims it is the only Internet discount program for the poor of its kind.

“[Critics] simply advocate a different broadband adoption program – one that no company has ever implemented, that has never been attempted or even analyzed, and that may not be equally sustainable or popular or easy to publicize,” Comcast wrote. “Comcast is the only company to offer a program of this kind, and it has continually and voluntarily expanded the scope, breadth, and eligibility for and benefits of the program.”

In fact, it may have escaped Comcast’s attention that Google has provided residents in their fiber service areas with free Internet service with absolutely no income qualification or needs test, after paying a “construction fee” ranging from $30 in Provo, Utah [12] to $300 in Kansas City.[13] Residents in the latter community can break the somewhat steep construction fee into 12 payments of $25 each and have a guarantee of free service for up to seven years. Over the course of both programs, Google offers a more compelling and less expensive offer without onerous qualification requirements.

Yr    Google Fiber Cost  Comcast Internet Essentials Cost (@$9.95/mo)

1          $300                            $119.40
2          $0                                $119.40
3          $0                                $119.40
4          $0                                $119.40
5          $0                                $119.40
6          $0                                $119.40
7          $0                                $119.40

Over the course of seven years, a Google Fiber customer selecting discounted Internet would pay $300. A Comcast customer would pay $835.80 – a difference of $535.80.

While Google Fiber’s service area is very limited, it does offer an evidence-based challenge to Comcast’s inaccurate claim that its Internet Essentials program is unprecedented and represents the best solution for New York. A well-designed program designed to help New Yorkers will sell itself far better than the complicated, restrictive, and revenue-protection-oriented Internet Essentials, and its lack of penetration in long-standing Comcast service areas speaks for itself.

The California Emerging Technologies Fund also found serious problems with Internet Essentials from top to bottom.[14]

“Comcast makes the sign-up process long and cumbersome,” CETF claimed.[15] “The application process often takes 2-3 months, far too long for customers who are skeptical about the product in the first place, and have other pressing demands on their budgets. The waiting period between the initial call to Comcast and the CIE [Comcast Internet Essentials] application arriving in the mail can stretch 8-12 weeks, if it comes at all. After submitting the application, another 2-4 weeks elapse before the equipment arrives. Many low-income residents do not have Social Security Numbers (SSNs) and are required to travel long distances to verify their identities because Comcast has closed many of its regional offices. Recently, some potential subscribers with SSNs were rejected over the phone and told they had to visit a Comcast office. Comcast has a pilot effort in Florida that should be expanded to allow customers to fax or e-mail photocopied IDs as proof of identification.”

CETF also found widespread violations of Comcast’s own program rules when the cable company conducted credit checks on customers, which can reduce a customer’s already challenged FICO score with a credit inquiry on their file.

“Comcast conducts credit checks for some customers, contrary to CIE rules,” the CETF filing said. “Dozens of clients are receiving letters from Comcast saying that they have failed a credit check. Comcast specifically states and advertises no credit check is needed for CIE. This has repercussions beyond obtaining broadband service. The act of performing a credit check can negatively impact the consumer’s credit worthiness. Initially, some CIE service representatives told customers they could pay $150 deposit to avoid a credit check, also contrary to program rules.”

Customers have also been redirected to Comcast sales call centers, where they receive aggressive sales pitches for higher-cost products and services.

Comcast’s celebration of its commitment to minority television programming does not mention the expansion of minority programming was a condition of the FCC’s approval of the Comcast-NBCUniversal merger.

Among Comcast’s “compelling” minority programming that customers are asked to pay for: Baby First Americas, a network for bilingual infants aged 0 to 3.

Subscribers got less than compelling programming and more rate increases to pay for it.

National Public Radio noted Comcast’s new minority channels are not exactly drawing significant audiences[16]:

Out of the gate, well, first was Baby First America — for bilingual infants aged 0 to 3.

ASPiRE, a channel focused on African-Americans, is mostly reruns and talk shows. Writer Anita Wilson Pringle called the network’s programming “crap.”

Next came Aspire, a family-oriented network from ex-basketball star and entertainment impresario Magic Johnson. Its lineup includes reruns of The Cosby Show plus even older fare: Julia, Soul Train and The Flip Wilson Show.

Writer Anita Wilson Pringle, for one, is no fan of that lineup of TV retreads.

“He promised innovative, new fresh ideas, new fresh programming, and it’s not,” she says.

Pringle is upset that Aspire’s managers were merely reshuffled from the old Gospel Music Channel. And she says the people Aspire is supposed to serve — African Americans — don’t exactly need more reruns or talk shows.

“It’s crap, if you really want to know the truth,” she says. “But my thing is, they did this to break that monopoly that Comcast was having on all these stations, and all that has happened is that Comcast has a stronger monopoly.”

Comcast’s commitment to improve energy efficiency is comparable to Time Warner Cable’s own commitments, providing no net gain for New York consumers.[17]

Comcast’s promised commitments to deliver better customer service have been made annually for several years with no significant improvement, as measured by independent customer satisfaction studies. Comcast relies on a quotation from a Wall Street analyst, Craig Moffett, who provides only anecdotal evidence of customer service improvements and has supported the merger’s potential benefits for shareholders.

Comcast’s idea of effective competition is using your Verizon Wireless connection for home broadband use. A 16GB monthly plan will cost consumers as much as $170 a month before taxes and fees.

Comcast’s assertion that the Commission should ignore or downplay bad customer service experiences of customers outside New York is made despite their own admission they serve only a tiny number of New York customers today. Is Comcast suggesting it would be inappropriate to consider their customer service record in comparable-sized cities across the country, some likely served by the same national and offshore customer care centers New Yorkers will reach when they have future problems with Comcast?

Comcast’s claims of plentiful broadband competition also do not exist in the real world for many New Yorkers. The Commission has faced such a large number of complaints about Verizon landline service, which also supports DSL, it launched a Verizon Service Quality Improvement Plan. When a Verizon landline becomes inoperable for several months, as customers in Inwood experienced earlier this year[18], their DSL broadband is also inoperable. For customers served by cable, but not reached by DSL service from telephone companies like Verizon, Windstream, and Frontier Communications, their only realistic home broadband connection comes from the local cable company. Wireless broadband, advocated as a competitive alternative by Comcast, does not penetrate well indoors in large sections of rural upstate New York and is constrained by very expensive service plans and severe limits on data usage, compelling customers to pay excessive fees to obtain service.

A family consuming 16GB of data per month (less than today’s average use per person) would face Internet bills of $170 a month with Verizon Wireless ($40/mo Monthly Line Access – Internet Device + 16GB Data Plan ($130/mo Monthly Account Access)[19] Wired broadband accounts from Time Warner Cable in comparison cost as little as $14.99 a month for unlimited usage.

Where DSL service is available, it is typically offered at speeds lower than a cable operator can offer. As an example, at our residence in the Town of Brighton, N.Y., Frontier Communications can only offer a maximum speed of 3.1Mbps from their DSL service because of our distance from the central office.

Comcast will have a near-total monopoly on all broadband service in excess of 15Mbps in current Time Warner Cable territories not serviced by Verizon FiOS. Verizon’s maximum speed DSL offer is for speeds “up to 15Mbps.”[20] Verizon FiOS expansion outside of already-committed territories has ended, and the majority of upstate New York is not served by Verizon’s FiOS fiber upgrades.

Comcast claims there is a world of difference between highly regulated energy-generation utilities and the “competitive” marketplace for telecommunications.

“Proposals that the Commission approach this transaction with the same mindset, and apply the same types of burdensome conditions, are entirely unjustified,” argues Comcast.

“Electric and gas utilities remain the quintessential public service utilities,” says the cable company. “Their markets are characterized by a lack of competition, captive customer bases, and direct rate-setting and operational oversight by the Commission.”

In fact, many cable customers in New York do face a lack of competition for fast broadband speeds, are stuck with the single cable operator serving their community, and lack the consumer protections offered by the Commission that apply to other utilities.

The Commission can test Comcast’s claims of competitiveness for itself. Stop the Cap! offers a challenge to find more than one provider that can deliver consistent, widely obtainable broadband speeds of 15/3Mbps or greater in downtown Buffalo, Rochester, Albany or Syracuse.

The Commission will discover there is only one provider now capable of delivering that service across the entire urban centers of upstate New York: the local cable company.

In far western New York, Verizon FiOS is available only in small parts of South Buffalo and North Buffalo and select suburbs.

In Rochester, Frontier Communications does not offer consistent access to speeds greater than 10Mbps.

Albany and Syracuse are also bypassed by Verizon FiOS, left with Verizon DSL, which only offers speeds “up to 15/1Mbps.” Most customers get less.

Comcast would have the Commission believe any review of its broadband service is off-limits and outside of their jurisdiction anyway.

“The Commission has no authority to review broadband transactions and lacks statutory authority to regulate broadband services – and beyond this, cable broadband services are interstate information services that are not properly subject to state jurisdiction,” claimed Comcast.

It further argued the Commission must ignore “matters beyond the Commission’s jurisdiction,” quoting from a 2006 proceeding.

Comcast evidently forgets the law has changed in New York. In 2006, the Commission had to disprove a petition was in the public interest to reject it. In 2014, the applicant is solely responsible for carrying the burden of proof that their proposal is in the public interest.

Nothing in Section 222 of the Public Service Law places restrictions on what the Commission can consider when weighing public interest benefits.

Comcast’s claims of its wish to expand service into rural, unserved areas also must be questioned. Comcast automatically sets a high bar for expansion suggesting it will occur only “where economically feasible,” which is the same standard in place with the incumbent cable operator.

“Where economically feasible” is the reason cable companies in New York have rarely expanded their service territories, except in high growth areas where population density warrants expansion. All cable operators have an internal formula governing Return On Investment requirements that must be met before expansion begins. The Commission must review that information and compare the standards used by both applicants, because it will ultimately govern any future natural expansion of cable service in rural New York.

Conclusion

Comcast’s rosy picture of New York’s future with a merged Time Warner Cable-Comcast is belied by the real world experiences of New York consumers who have learned from long, hard experience that when a cable company starts promising a better deal, the result has too often been higher rates and fees, unwanted channels, poorer customer service, and new restrictions.

Don’t close your eyes to the facts.

Cable operators have enjoyed unfettered power to escape oversight with inflated claims of fierce competitiveness that they suggest will keep prices and abusive behavior in check, but in reality rates are rising and Comcast’s customer approval ratings live in the basement.

Comcast’s most recent filing continues to dismiss these very real concerns for New Yorkers who will not have a choice of a cable operator other than Time Warner Cable or Comcast. Calling the comments of more than 2,700 New Yorkers largely opposed to this merger “unsubstantive” is precisely the attitude of a cable company that has earned its bad reputation with customers.

Sending “templates” to politicians and non-profits that have received funding from Comcast and asking them to send letters to regulators urging approval of the company’s latest item on the agenda is the kind of “substantive” evidence Comcast wants the Commission to rely on in this proceeding.

But worst of all, Comcast suggests that any review of the company’s broadband service, its pricing and performance, and the potential for usage allowances and usage fees above and beyond the current high cost of Internet service is off-limits to New York regulators. The Commission already recognizes the growing importance of broadband in New York State and that it is, in reality, nearly a necessity.

Time Warner Cable recognizes that and is moving ahead on an upgrade program that delivers broadband benefits above those offered by Comcast and at a lower price, with no usage allowances or overlimit fees likely in the foreseeable future. It remains clear to us that Time Warner Cable is the better choice for New York. We have a well-documented history of not being great fans of Time Warner Cable, but we know worse when we see it, and we see it in Comcast.

[1] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={60D7F65E-3AAB-4507-B58D-7F14E31E130A}

[2] http://www.rochesterfirst.com/news/lawmakers-write-letters-supporting-comcast-deal/190434972

[3] http://www.rochesterfirst.com/news/lawmakers-write-letters-supporting-comcast-deal/190434972

[4] http://stopthecap.com/2014/08/11/rochester-city-councilman-adam-mcfaddens-love-for-comcast-and-the-50k/

[5] http://www.nlc.org/corporate-partnership-program/corporate-partners-program

[6] https://corporate.comcast.com/news-information/news-feed/national-urban-league-resource

[7] https://www.thechicagourbanleague.org/cms/lib07/IL07000264/Centricity/Domain/14/impact-jan-2014.pdf

[8] https://www.thewrap.com/consumer-groups-urge-fcc-to-reject-comcast/time-warner-cable-deal/

[9] https://ecfsapi.fcc.gov/file/7020462210.pdf

[10] https://www.nationalbcc.org/news/progress-reports/2107-recap-of-22nd-annual-conference

[11] http://stopthecap.com/2013/07/10/comcasts-internet-essentials-facade-padding-the-bottom-line-without-cannibalizing-your-base/

[12] https://fiber.google.com/legal/schedule/

[13] https://fiber.google.com/legal/schedule/

[14] https://arstechnica.com/information-technology/2014/07/comcasts-internet-for-the-poor-too-hard-to-sign-up-for-advocates-say/

[15] http://www.cetfund.org/files/140711_CETF_Partners_Comcast-TWC_FCC_PR_and_Filing.pdf

[16] http://www.npr.org/2013/11/12/244558834/comcast-deal-puts-new-minority-run-channels-in-play

[17] http://www.timewarnercable.com/en/about-us/corporate-responsibility/environment.html

[18] http://manhattan.ny1.com/content/shows/ny1_for_you/203064/ny1foryou–inwood-verizon-customers-want-phone-service-outages-to-stop

[19] http://www.verizonwireless.com/wcms/consumer/shop/shop-data-plans/more-everything.html

[20] https://www.verizon.com/?lid=//global//residential

Verizon Wireless is closing several loopholes that customers have used to acquire new subsidized, on-contract smartphones and keep their unlimited data plans intact for an extra two years.

Since Verizon Wireless stopped enrolling customers in unlimited use data plans in 2012, current customers have been able to hang on to their unlimited use plans with the understanding they will not be entitled to subsidized upgrades or new lines with unlimited data. Despite that, Verizon still aggressively pursues unlimited data customers at almost every contact encouraging them to ditch their unlimited plan in favor of much more profitable Family Share plans, which feature usage-based billing tiers that customers will need to regularly upgrade to stay ahead of increasing data usage trends.

A study from Consumer Intelligence Research Partners showing Verizon has successfully convinced all but 22% of their customers to dump their unlimited plans. Those still hanging on guard their unmetered plans zealously. Some have even managed to find loopholes that let them keep unlimited data while getting subsidized device upgrades. But Verizon has caught on and is slowly closing the loopholes, increasing restrictions on unlimited data plan customers.

The Loopholes

One of the newer loopholes is a type of subsidized upgrade through Best Buy. A number of careful steps are required to win the upgrade without changing your data plan, and there are several side effects explained exhaustively on the Slickdeals website. If you try, read the instructions very carefully or you could lose your unlimited plan. The upgrade has been successful for many who have kept their unlimited packages, signed a new two-year contract exempting them from Verizon Wireless’ 4G speed throttle, and getting a new device at a subsidized discount. it won’t be easy to tell when this loophole is closed, and you might have to fight to win back your unlimited data package if it is removed from your account.

Another loophole involves shifting upgrades around on your current family plan. As different family members become eligible for device upgrades, it is possible to an upgrade to an existing number with an unlimited data plan without losing that feature. This is the most popular loophole at the moment and the one Verizon Wireless wants to kill the most.

“Tina, bring me the axe!”

Verizon Takes the Axe to Loopholes, Discounts, and Finance Plans for Unlimited Data Customers

Verizon has declared a virtual war on their grandfathered unlimited data plan customers, and has gradually tightened the noose:

1. Verizon Wireless will begin throttling 4G/LTE speeds of off-contract, unlimited data plan customers deemed heavy users who consume more than 4.7GB of data per month beginning this fall;
2. On July 13, Verizon Wireless quietly terminated its Device Payment Plan for unlimited data customers seeking to finance the cost of an unsubsidized device upgrade over 12-20 months. Instead, customers must enroll in Verizon Edge to get a phone with little cash upfront and monthly payments. One of the conditions of the Edge program is forfeiting your unlimited data plan;
3. Verizon will no longer allow customers with unlimited data plans to transfer an available device upgrade from another line on the account to get a subsidized device upgrade while keeping their unlimited data plan.

In the past, some customers who love upgrading devices a lot either grabbed other family members’ device upgrade offers or opened up extra lines on the account. For each additional $9.99 a month basic line, a customer could qualify for a new subsidized device with a two-year contract, initially attaching a basic 2GB $30/month data plan they can immediately drop when the phone is switched to a line with unlimited data. Some customers have even maintained two or three unused phantom lines just so they can upgrade their phone every 10 months or so.

Beginning Aug. 24, Verizon will close that loophole by forcing customers to keep a data package associated with every subsidized device on their account for the length of the contract. This means customers must pay at least $30 for a 2GB data package, plus the usual $9.99 a month fee for service over the next two years for each line with a smartphone attached, regardless of what number it gets associated with.

According to information received by Droid Life, Verizon believes that when it “gives customers a discount on the retail price of a smartphone, we expect them to pay for data services and keep the smartphone activated for two years. This change closes the loopholes which allowed customers to activate/upgrade a smartphone and immediately revert back to a basic phone, resulting in a discontinued smartphone with no associated data plan.”

Here’s an offer I’d like to refuse: This may explain why Verizon Wireless is so gung-ho about getting customers to switch to their “money-saving” Family Share Plan. In fact, it’s a Family Theft plan — nearly three times more expensive with a data cap that will force even more upgrades at a higher cost in the future.