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Frontier’s Modem Rental Fee: $7/Month; Wireless Router Fee Now $14.99/Month

Phillip Dampier August 10, 2011 Consumer News, Data Caps, Frontier, Rural Broadband 3 Comments

A very pricey upgrade

Frontier Communications’ DSL modem rental fee is now as high as $6.99 a month in some of the phone company’s service areas, $14.99 a month if you want the convenience of a wireless router built-in.  That’s $84 and $189 a year, respectively, for equipment that cost the company a fraction of that.

“Lymelizzard,” a would-be Frontier DSL customer in Robbinsville, North Carolina, considers that highway robbery.

“I can go and buy the modem at a store and it would be less than one year of rental,” he wrote on Broadband Reports’ Frontier forum.

Frontier Communications’ regular monthly prices are not exactly aggressive in North Carolina, charging up to $50 a month for 3Mbps DSL, $55 for up to 7Mbps, before the modem rental fee and other charges are included.  A customer with Frontier’s wireless router would pay more than $70 a month, just for 7Mbps DSL service:

Frontier's No-Contract Prices for New Customers Only. Prices less for 1-2 year contracts that include $165 early termination fee for Double Plays and up to $120 early termination fee for High-Speed Internet only plans. One-time charges up to $60. Additional charges, taxes and terms apply.

Frontier has quietly increased equipment fees over the years.  Back in 2010, the company raised the rental fee to $4.50 a month.  Some service areas have been paying $6.99 a month since 2009, but now face even higher prices if they want a home “Wi-Fi” hotspot included.

Something else has changed at Frontier as well.  The company is making it more difficult for customers to purchase their own modems and use them instead, skipping the modem rental fee.  Customers trying to save several dollars a month now face a brick wall when contacting customer service.

“The salesman on the phone even said [the modem rental fee] wasn’t a good deal but he could not waive it,” Lymelizzard wrote.  He declined to become a Frontier DSL customer, considering the modem rental fee a deal-breaker.

“I’m surprised that all the Joe Customers out in Frontier-land haven’t complained,” he said. “This is merely a money grab on Frontier’s part. I could see the fee for a year, maybe two, but for the life of the account that’s bogus.”

White Space Wi-Fi: 802.22 Benefits Rural Providers, Not Home Wi-Fi Users

Phillip Dampier August 2, 2011 Broadband Speed, Consumer News, Editorial & Site News, Public Policy & Gov't, Rural Broadband, Wireless Broadband Comments Off on White Space Wi-Fi: 802.22 Benefits Rural Providers, Not Home Wi-Fi Users

An example of an 801.22 Wireless Regional Area Network

The mainstream media and technology blogs have been running away with coverage about the IEEE’s recent approval of the so-called “white space” 802.22 wireless standard with stories of up to 100 kilometers of wireless coverage for home Wi-Fi over unused UHF television channels.  The thought of installing a router that can deliver reception of your personal broadband connection for up to 62 square miles sounds very exciting, but don’t get as carried away as some media outlets have.

The truth is, 802.22 benefits wireless providers, not consumers (unless you happen to receive your Internet service from a commercial provider over this technology.)

The new standard was designed to benefit Wireless Regional Area Networks (WRANs).  In general terms, this means Wireless Internet Service Provider (WISPs), who are most likely to adopt the new technology to enhance wireless service over long distances in rural areas not covered by DSL, cable broadband, or other wired networks.  To achieve the maximum amount of coverage noted in the popular press, providers will need to utilize specialized transmitters using antennas considerably higher than what one would find in a home environment.

Unlike today’s Wi-Fi networks, 802.22 uses much lower frequencies which tend to propagate over longer distances.  Using frequencies in the Megahertz range instead of the Gigahertz range makes it much more likely ground-based wireless signals will penetrate buildings and reach across the rural landscape.

To accommodate “white space” wireless, the Federal Communications Commission last year approved the use of unused broadcast channels for these data transmissions.  But providers will not simply be able to fire up their white space Wi-Fi network just anywhere.  The standard includes a provision that will automatically register the exact location of each transmission site with a central coordinating body.  Providers must agree to vacate channels if harmful interference to licensed broadcasters is “sensed” by the technology, and even though multiple operators may be able to operate concurrently in an area at the same time, there are important limitations on how many available “white space” channels will exist in different television markets.

Realistically, the most sensible implementation of 802.22 will come in very rural areas with few, if any, local broadcast signals to contend with.  If the FCC has its way, a considerable amount of the so-called “white space” will be sold off to America’s largest cell phone companies, leaving even fewer channels open for this kind of wireless broadband.  In large urban markets, it’s doubtful many channels will be available for 802.22 use, if any at all.  Currently, the FCC dictates these networks cannot operate on an occupied broadcast channel, or the adjacent channels on either side.  That means if your city has a station on channel 31, these networks cannot use channels 30, 31, or 32.

Another problem is the available bandwidth for individual users.  Each “channel” has 6MHz of bandwidth, which can realistically provide 12Mbps service to a single user.  The IEEE specifies a maximum speed of 22Mbps, but that is more theoretical than actual when taking into account the longer distances average customers will be from the transmitter.  Providers will almost certainly pack each channel with multiple users.  A dozen customers concurrently using the service would probably get around 1.5Mbps on average (384kbps upstream), assuming nobody saturates the channel at maximum speeds. That is equivalent to some rural DSL providers.  Should providers “oversubscribe” the network, and dozens of customers try and use the service at the same time, speeds could drop precipitously.  The further users are from the transmitter, the lower the speeds they will receive regardless of how many users are on the network at that time.

To handle demand, one solution is to run multiple transmitters to handle the traffic, but how many transmitters can operate will depend on how much “white space” is available.  That is why this technology is best suited for rural areas where UHF television signals, and customers, are few and far between.

Home Wi-Fi users will need to wait for the development of a different standard — 802.11af — to take any advantage of “white-space” Wi-Fi, sometimes called White-Fi or “Super Wi-Fi.”

Since the much used 2.4 GHz band for Wi-Fi is congested in urban areas, IEEE 802.11af can provide additional open frequencies for home users.  But most 802.11af home equipment will operate at considerably lower power and range, and will suffer some of the same bandwidth limitations created by narrow channel spacing.  An even bigger problem will be available channel space.  The same urban areas experiencing over-congested Wi-Fi will also likely have the largest number of operating television signals, limiting the use of this technology.

Some theorize White-Fi wireless will not be of much use to home broadband users at all, instead opening up connectivity for devices we might not normally associate with wireless connectivity.  A home security system could plausibly work well with limited bandwidth.  So could home electronic devices that want to communicate their status.  A washer and dryer could use the technology to communicate with each other to synchronize completion time and signal the homeowner that their laundry is ready.  Home weather stations could deliver data over longer distances, refrigerators could signal owners they need to be restocked, and so on.

If you are waiting for wireless broadband nirvana, unfortunately there is not much to see here with these developments.  Increasing usage demands continue to make wireless among the least suitable technologies to deliver the substantial-sized data pipeline broadband consumers increasingly require.

Digging Deeper Into Time Warner Cable’s Latest Quarterly Report: They Aren’t Hurting for Money

Phillip Dampier July 28, 2011 Audio, Competition, Data Caps, Editorial & Site News Comments Off on Digging Deeper Into Time Warner Cable’s Latest Quarterly Report: They Aren’t Hurting for Money

Despite the loss of more than 128,000 video subscribers, Time Warner Cable more than made up the difference with rate increases on equipment, programming, and broadband to score a 23 percent increase in earnings in the second quarter of 2011.  For the period of April-June, Time Warner earned a profit of $420 million, nearly $80 million more than the same quarter last year.

Cable Television

Time Warner CEO Glenn Britt continued to blame the loss of video subscribers on the housing crisis and economy, suggesting the cable operator’s prices have gotten too high for some customers to handle, and they’ve disconnected cable television service as a result.  Britt also continues to downplay the impact of online video allowing for consumer cord-cutting, suggesting instead that increased competition from phone companies and satellite providers are creating a problem online video isn’t.

As a result, Time Warner is refocusing its efforts on marketing packages to three segments it particularly wants to attract — the very well-to-do, the Latino community, and the income-challenged.

Time Warner officials noted that many of their customers have continued to pare back their packages to cushion against the company’s rate increases.  For the last few years, consumers have cut premium movie channels and extra tier add-ons.  Now customers are targeting Time Warner’s DVR service as a route to a lower cable bill.  Many are returning their DVR boxes to save money, or are not keeping the service as a promotion expires.  Time Warner often bundles DVR service into new customer promotions for no additional charge.

For these income-challenged consumers, Time Warner is promising to develop new packages of services at reduced prices.  That likely means the expansion of the company’s “budget tier” — a package of selected basic cable networks, excluding expensive sports programming, currently testing in two markets for around $50 a month.

But the company is also reporting success with its wealthier customers, many who are adopting Time Warner’s super premium Signature Home service, from which the company collects an average of $220 per month per customer.  Time Warner is also ramping up promotion of its cable services to Spanish-speaking audiences in the Latino community — customers it may have under-served in the past.

The company also reported declines in video-on-demand revenue, principally adult pornography pay-per-view content consumers are now watching on the Internet for free.

Broadband

Among the brightest stars for Time Warner Cable continues to be broadband service, which is increasingly important… and profitable for the nation’s second largest cable operator.  With “pricing strength,” Time Warner has successfully adopted a series of rate increases for Road Runner service, increasing revenues along the way.  The company also reports success with its DOCSIS 3 rollouts, now reaching 60 percent of its cable subscribers.  CEO Britt says the cable company expects to complete DOCSIS 3 upgrades nationwide by the end of 2012.  A noticeable percentage of customers are upgrading to premium-priced, faster speed tiers as a result.

Despite the investment in DOCSIS 3, Time Warner Cable continues to slash the amount of capital it is investing in its network.  So far this year, capital expenditures are down 7.4 percent to $1.36 billion.  Chief Operating Officer Rob Marcus predicts Time Warner will spend no more than $3 billion on its systems in 2011, despite plans to continue broadband upgrades and convert their cable systems to all-digital operations.  So far this year, Time Warner has earned over $2.2 billion from its broadband division alone, up 9 percent from last year.  The company attributes most of that growth to rate increases and customers upgrading their service.

Other facts:

  • Time Warner’s wireless mobile broadband has failed to spark much interest from consumers, perhaps because they realize it comes from Clearwire, a company Time Warner CEO Glenn Britt seemed unimpressed with in today’s conference call.  He made a point of telling investors the cable company is under no obligation to invest anything else in the venture;
  • Time Warner Cable is taking a new interest in Wi-Fi, deploying networks in New York and Los Angeles, in the hope the company can boost interest in a “quad-play” of cable, phone, Internet, and wireless broadband/Wi-Fi that consumers have taken a pass on thus far;
  • The company’s new super data center in Charlotte, N.C., will provide a national “head-end” for IPTV video, currently supplied from a facility in Denver.  This will principally benefit iPad users using the company’s app to stream online video.  The company hopes to eliminate regional and local distribution efforts as a cost-savings measure, consolidating national distribution through Colorado and North Carolina;
  • The company’s next version of TWCable TV — the aforementioned iPad app, is due out in a few weeks and will include text searching for individual shows.  Whether it corrects the ludicrous inability for the app to consistently stream video is another question;
  • Competition for new customers has been responsible for a number of disconnects.  One satellite provider is pitching Time Warner customers on a $30 a month video package that includes the NFL Sunday Ticket for free.  Verizon FiOS has increased its marketing of Time Warner customers, offering its own triple-play package for $99 a month.  AT&T U-verse has their own triple play packages as low as $89 a month, with a substantial mail-in rebate offer good for over $100.  But Britt warns the lack of change in the “average revenue per subscriber”-numbers from competitors probably means consumers are paying substantially more thanks to fine print-surcharges and fees;
  • Time Warner is still trying to sign agreements for its TV Everywhere project, particularly for HBO Go, but the terms are evidently still not acceptable to the cable company.

Our earlier coverage, seen below, covers Britt’s remarkable comments about usage-based pricing.  He was certainly off the usual industry playbook today, even going as far as telling investors what we knew all along: bandwidth costs bear almost no relationship to the prices charged for broadband service.  That’s one we’ll tuck away and remember.

Time Warner Cable CEO Glenn Britt highlights the results from the second quarter, covering cable-TV, broadband, and other products. July 28, 2011. (6 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

New ‘5-Strikes And Your Offline’-Copyright Agreement Scares Wi-Fi Providers

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KJCT Grand Junction Wi-Fi Hot Spots 7-18-11.mp4[/flv]

The voluntary agreement between many of the nation’s largest Internet Service Providers and copyright holders is striking fear into the hearts of small retail businesses who provide free Wi-Fi to their customers.  If those customers download illegal content, who is ultimately going to be held to account?  KJCT-TV in Grand Junction, Colorado investigates whether some local coffee shops may be forced to shut their Wi-Fi off, or make customers sign agreements before they can log in.  (2 minutes)

Free Communal Broadband? Boston Firm Says Share and Share Alike and Get Service for Free

A Boston firm believes broadband is something best shared, and plans to put that notion to the test by bringing free access to wireless broadband to anyone in range of its equipment.

NetBlazr starts with gigabit fiber from Cogent Communications, and then delivers free or low-cost access to any customer that is willing to do two things:

  1. Spend $299 for their basic installation kit, which includes a high speed router, three antennas, and some cabling;
  2. Use the included equipment to receive service from NetBlazr and agree to share it with anyone in range of the wireless antennas included in the kit.

Reception of the wireless broadband signal, comparable to Business Class DSL, comes with no ongoing fees.  If you want dedicated, guaranteed speeds, NetBlazr will sell them to you at an added cost.  The more customers exchanging signals, the more robust and faster the network becomes, says NetBlazr CEO Jim Hanley.

Although the service is currently designed to operate for business customers in downtown Boston, Hanley sees the possibility of crowdsourcing a broadband platform eventually large enough to cover residential homes and businesses across the country, at almost no expense.

The venture is new, however, and the company’s FAQ warns businesses not to depend entirely on NetBlazr for dependable broadband just yet.

Because it’s still new, the quality and level of service is highly dependent on what kind of signal one can receive from the next nearest business that belongs to the cooperative.  If you are the only one for blocks around, the signal could be marginal to non-existent.

Such communal networks only work when they reach a critical mass of cooperative members to blanket areas with coverage.  At the moment, that means Boston’s Back Bay and downtown, where high-rise buildings help get the signals around densely populated neighborhoods.

NetBlazr’s marketing brochure touts the service can deliver symmetrical speeds up to 60Mbps for free, and is particularly suited to offices that need additional broadband resources, but don’t want to sign a pricey upgrade agreement with incumbent providers like Verizon.

NetBlazr’s competitors like the aforementioned phone company are reacting with a shrug of the shoulders so far.

Verizon spokesman Phil Santoro: “Competition is always healthy and the market for Internet service is already highly competitive.”

“We aren’t familiar with this company’s business proposition, but I can tell you that Comcast already offers secure and reliable high speed Internet,” spokesman Marc Goodman told the Boston Herald.

Earlier efforts to share Internet services in neighborhoods through Wi-Fi ran into trouble when Internet Service Providers found out.  Virtually all providers specifically prohibit customers from sharing their residential service with non-paying customers beyond the property line.  But since NetBlazr arranges for its own access, this stumbling block is overcome.

Company officials say they have enough connectivity to support the demand, although business users don’t traditionally pound networks with peer-to-peer file requests or lots of online video, so how NetBlazr will ultimately perform in a residential setting remains to be seen.

The company has impressed technology mavens at the Massachusetts Innovation & Technology Exchange.  NetBlazr won this year’s “Best Bootstrapped Start-up” award.  It was also a finalist for the $1 million MassChallenge competition held earlier this year.

Hanley’s ultimate goal is to provide cheap, commodity Internet access, and thinks within five years his idea will be a major game-changer for how broadband service is delivered in the United States.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/NetBlazr.flv[/flv]

netBlazr CEO Jim Hanley indicts America’s broadband duopoly and says direct action through new competition will solve the problem faster than public policy can.  Hanley also explains how his service works. (10 minutes)

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