Copps

Americans need to stand up and say “no” to more telecom mergers and lobbying efforts that push for additional deregulation and corporate protectionism in the telecommunications sector. Unfortunately, we are in for a fight, thanks to Washington’s problem disappointing a multi-billion industry that lavishly finances political campaigns, conventions, and vacation outings.

Michael Copps, former commissioner on the Federal Communications Commission from 2001-2011 and acting chairman for the first six months of the Obama Administration ought to know.

“The consolidated world of telecom broadband did not evolve from the hand of God, the mysterious workings of natural law, or the inevitability of market-based dynamics,” Copps wrote in his essay, “Why Give Up on Competition?” “It was enabled by conscious decision-making at the federal level, largely through the abdication of its oversight responsibilities by the Federal Communications Commission over the better part of 30 years.”

In short, it did not have to turn out this way, no matter what the telecom industry and their astroturf friends have to say.

“Go to just about any telecom conference these days, and some industry maven will make the case that restoring competition to the telecom world is so 1990s,” Copps writes. “Why don’t we all just recognize the inevitable, they ask: telecom is a natural monopoly, competition is a chimera, and the sooner we flash a steady green light for more industry consolidation and less government oversight, the better off we’ll all be.”

Provider-backed ALEC advocates for the corporate interests that fund its operations.

Too many in Washington are already true believers, according to Copps, and the result is two companies controlling over 2/3rds of the wireless marketplace and a broadband duopoly for most Americans. This did not happen overnight. Enormous and expensive lobbying campaigns run for over a decade have convinced lawmakers that less is more when it comes to telecom regulation and oversight. Regulators ringing alarm bells about deregulation without sufficient competition have been picked off, says Copps, by the telecom industry-backed American Legislative Exchange Council (ALEC), which has convinced at least 19 state legislatures to wipe away authority from state public service commissions that for years have been trying to protect consumers and preserve competition.

The Telecommunications Act of 1996 was originally designed to open the telecommunications marketplace to increased competition, but also ensure a level playing field for competitors by charging the FCC to implement and enforce strong rules to keep incumbent telecommunications companies from steamrolling new competitors.

No surprises here: Michael Powell was FCC chairman during the deregulation frenzy of the first term of George W. Bush. Today, he’s the president of the National Cable & Telecommunications Association, the largest cable industry lobbying group in the country.

With the arrival of President George W. Bush, the new Republican majority at the FCC promptly began obliterating checks and balances at the behest of some of the nation’s largest phone and cable companies. The results:

• Reselling rights and wholesale leasing of facilities to competitors were wiped away, guaranteeing monopoly control of already-established networks;
• Opening up the long distance and local market to Baby Bell competition with their promise they would compete nationwide failed. Like Big Cable, the Baby Bells sold local and long distance only to their own customers, not to those located in another Baby Bell’s service area;
• Instead of competing, phone companies simply bought each other. “As soon as one transaction was approved, another one came through the door,” Copps reported. “Sometimes it seemed like the merger approval business was our only business.”;
• ” The FCC voted, over the strenuous objections of Commissioner Jonathan Adelstein and me, to remove advanced telecommunications (broadband) from the purview of Title II of the Telecommunications Act—where consumer protections, competition, privacy, and public safety are clearly mandated—and placed them instead in the nebulous and uncharted land of Title I, where regulatory authority is uncertain, consumer protections are virtually non-existent, and where the huge companies are better positioned to wreak havoc on the promise of competition,” Copps said.

To right the wrongs, Copps wants some major changes to reignite competition and return to telecom innovation, eliminating the stagnation we have from today’s cozy, barely competitive marketplace:

1. Learn to say “no” to more industry mergers. Consolidation has not brought communications nirvana for consumers, just higher prices and fewer choices, often from a monopoly provider;
2. Encourage innovative approaches like municipal broadband. Copps: “‘My way or nothing’ may be the mantra of the big guys, but that means no broadband in places they don’t wish to serve.” Copps wants to see the federal government pre-empt state bans on public broadband laws provider-backed ALEC has gotten through legislatures across the country;
3. Smarter stewardship of wireless spectrum, including unlicensed spectrum use, shared spectrum, smarter technology, and a “use it or lose it” policy that pulls back unused/warehoused spectrum held by some of the nation’s largest wireless carriers.

On important issues for the online community, there are some substantial differences between the Democratic and Republican parties, particularly regarding Net Neutrality.

A review of the yas and nays in both party platforms (and past history in Congress) shows your vote can make a difference when Washington ultimately deals with privacy, network traffic, piracy, cybersecurity, and broadband expansion.

Net Neutrality – “Preserving the free and open Internet”: Prohibits providers from discriminating against different types of network traffic for profit or control

• Democrats: Yas
• Republicans: Nay

While the Democratic platform specifically states, “President Obama is strongly committed to protecting an open Internet,” one “that fosters investment, innovation, creativity, consumer choice, and free speech,” Republicans have treated Net Neutrality as anathema to the free market. Although virtually every Republican member of Congress has voted against Net Neutrality or publicly opposed the concept, some Democrats have as well, particularly those who have received significant financial contributions from the largest phone and cable companies lobbying against the policy.

Net Neutrality has not proved to be a major issue in Congress this year, with most of the recent battles taking place at the Federal Communications Commission. FCC chairman Julius Genachowski applauded a ‘third way’ for Net Neutrality, staking out a middle-of-the-road policy that pleased few outside of the FCC. It largely leaves the concept a “suggestion” for wireless carriers. Replete with loopholes and enforcement issues, even wired providers like Comcast have run around the policy for their own benefit.

Network Privacy – Full disclosure when websites track your browsing habits, and how online companies protect your private information

• Democrats: Yas, provisionally
• Republicans: Yas, provisionally

Net privacy is a topic many consumers hear about the most when a website gets hacked and private customer information is stolen in the process. But a growing number of consumers are also concerned about what websites are doing with their information and how their web visits are being tracked for advertising purposes. Large online companies like Facebook and Google have a vested interest in keeping this space as unregulated as possible to maintain lucrative revenue earned selling demographic information to advertisers. But consumers may not want advertisers to know the websites they visit, and members of both political parties have expressed growing interest in taming who gets their hands on your private stuff. Republicans are primarily concerned about tracking by government agencies, Democrats are more concerned with for-profit use of customer data.

The Republican platform abhors government intrusion into private liberty — primarily a reference to certain forms of surveillance. But the GOP platform is silent on enhancing privacy rights of consumers. The Obama Administration has been calling for a “Privacy Bill of Rights” that permits consumers to opt out of web tracking cookies and other tracking technology. Democrats separately want companies to do a better job disclosing and explaining how private information is being used. But Congress, under heavy lobbying to avoid the issue, never acted on the administration’s request.

Expanding Broadband: Finding New Wireless Spectrum and Improved Rural Access

• Democrats: Yas on both
• Republicans: Yas on one, vacillating  on the other

While neither party fully embraces their respective platforms while governing, their stated positions often reflect political positioning when new laws are contemplated.

The Democrats tout both their National Broadband Plan and the Obama Administration’s commitment to find Internet access for 98 percent of the country and expand spectrum available to meet the growing demands for wireless data. The Democratic platform touted President Obama’s proposal to promote wireless broadband as a possible rural Internet solution.

In a new twist, Comcast has announced rate increases for cable television that are roughly at the rate of inflation (2.3%) — the lowest rate increase for the company since 2001 — but is also hiking rates for Internet service at a substantially higher rate.

The company claims the Internet rate increase is partly due to the increased number of channels on its cable systems in Oregon and southwest Washington, as well as the cost to launch new interactive applications and multi-platform content that customers want and value.

Comcast’s rate increase for video represents the new reality for the cable business — companies continue with 7%+ increases in cable TV rates at the risk of cord cutting, analysts say. With cable television packages increasingly seen as ripe for cutting as they grow more expensive, cable operators are turning to broadband — a service customers can’t live without — to make up the difference.

Comcast had not touched broadband rates in the Pacific Northwest for seven years, until the company began hiking them in 2011. Monthly rates for the popular “Performance” Internet service (15Mbps) are going up again this year, from $48.95 to $51.95, according to The Oregonian. Prices are higher for standalone broadband service. Comcast’s Digital Starter TV package is increasing to $67.49 a month. Rates for customers on promotions will not  increase until those offers expire.

But some customers complain Comcast is now charging nearly $200 a month for its triple-play package.

One customer told the newspaper after his introductory triple play promotion expired, the bill rose to $190 a month for phone, Internet, and cable service with two DVR boxes. The customer does not have any premium movie channels.

The Oregonian has tracked Comcast’s rates in the Pacific Northwest for almost a decade. The staircase of climbing prices for cable television is leveling off as Comcast makes up the difference from its Internet rates.

The newspaper noted Frontier Communications, which provides competition for Comcast in the suburbs of Portland, has given Comcast only a slight headache.

Frontier continues to offer its barely-advertised FiOS television package for around $65 a month, but customer complaints about Frontier’s service in the area have been reflected by Comcast’s growing subscriber numbers.

One Oregonian reader summed up his feelings about Frontier:

Frontier was atrocious. I don’t just mean bad, I mean an embarrassment to humanity […] which chimpanzees and dolphins laugh at us for putting up with. I’ve had Frontier service for a little over a year now only because there is nothing else where I live.

The nightmare started with them coming out hook up DSL at my new house, but instead of hooking me up, [they tore] out the demarc box on the house and left with it,  lost all records of ever having talked to me, much less scheduling an appointment.

After finally getting Internet service a week late, the original [service order] showed up leading them to bill me for multiple accounts, which took five months to  resolve. They never were able to prove to me I actually owed what I ultimately paid (I got them to within one bill’s worth of my calculated value and gave up).

Half of the time I’ve held off paying my bill until a day or two before the due date so it’s too late to mail a check and their online payment system is down, forcing me to call in my payment and pay a $3 service fee.

All of that is on top of the blatant theft of forcing customers who already own modems to pay a “modem rental fee” for a modem they aren’t renting.

CenturyLink is having a tough time competing against Tacoma, Wash.-based Click! Network, so the phone company hired third party vendors who are spreading lies about its community-owned competitor.

Click!, a division of Tacoma Power, recently upgraded its network to begin selling 100Mbps broadband to Tacoma residents. That proved a problem to CenturyLink’s outsourced sales force who cannot begin to offer those kinds of speeds to Tacoma residents over CenturyLink’s copper-wire facilities. So when you can’t compete, the next best thing is to lie.

The News Tribune reports CenturyLink’s door-to-door sales force is misinforming current Click! customers the service is shutting down and offering to transfer their service to CenturyLink.

“Customers have been told that Click! Cable TV is going out of business in the next couple of months,” said Tenzin Gyaltsen, Click! Network general manager. “That is not true. Click! Cable TV is still in business, offering competitive pricing – and will continue to do so for many years to come.”

A complaint will be filed with the Office of the State Attorney General against CenturyLink accusing them of an apparent violation of state law – RCW 19.86.020 – which states, “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.”

“It’s a vendor we’re using,” Meg Andrews from CenturyLink admitted. “When we were made aware of the situation the vendor was told it is not in our best interest. It’s not really in our voice, or tone. It’s not a good thing for us. We’ve never had this type of experience before.”

Although the salespeople are not CenturyLink employees, the phone company hired the firm that employs them.

Tacoma residents enjoy the competition. Prices are lower than in nearby Seattle, and residents can choose from CenturyLink, Comcast, or one of three independent ISPs that provide service over the Click! Network.

One Tacoma resident told Community Broadband Networks the competition can’t afford to charge the usual prices other Washington residents pay:

I have Comcast in Tacoma and all I know is since there is competition down here Comcast is about half the cost as it is in Seattle. They give you a rate good for a year. When your year is up you call up and just say Click! and bam back down you go. A friend in Seattle once called Comcast with both of our bills with similar service and mentioned my price and they said I must live in Tacoma and they wouldn’t match the price.

The city asks anyone who hears a CenturyLink sales representative misrepresent Click! call 253-502-8900 to report it.

Pricing for broadband on Tacoma’s Click! Network

Susan Crawford points us to this fun fact: While the cable industry wants to raise your prices to cover increased costs, one of the things they forgot to mention is more than $8,900,000 (so far this year) of your money was shipped straight to Washington to hand out to lawmakers. In the last quarter alone, the National Cable & Telecommunications Association has spent more than $4.5 million lobbying Washington on everything from repealing the Dodd-Frank Wall Street Reform and Consumer Protection Act to the Internet Freedom Act. If consumers are for it, the NCTA is against it. The ironic part of it is they put your money to work against your interests.

Imagine what you could do with $8.9 million — bringing broadband to the unserved, making service better for those who already have it, and keeping your broadband bill in check. Just sayin’.