Walt Mossberg (left) discusses the current state of American broadband with FCC Chairman Julius Genachowski (right)

FCC Chairman Julius Genachowki told attendees at the D: All Things Digital conference America scores dead last in a study measuring the rate of change in broadband innovation.  American broadband is stuck in neutral while every other ranked nation is moving forward faster in understanding the importance of deploying fast, reliable, and universal broadband.  Genachowski directly ties broadband to improving local economies, propelling growth in jobs, and improving education and health care.

Unfortunately the American duopoly most Americans cope with maintains a stranglehold on efforts to bring America literally up to speed with competing nations.  Worse, there is no end in sight as long as America relies entirely on incumbent providers to get the job done.

Americans pay some of the highest prices in the world for mediocre broadband, and it’s only getting worse with the introduction of usage limiting schemes like data caps and so-called consumption billing.

Genachowski is attempting to facilitate improved broadband across the United States, but is hampered by private industry undermining the FCC’s authority to help push improvements forward.  Recent industry-driven court challenges to the FCC’s authority have led to the agency seeking a different path to regain its regulatory footing.

The FCC chairman sees the biggest challenges coming in wireless broadband, where a spectrum shortage is limiting potential capacity and available bandwidth.  Genachowski seeks an accommodation with the nation’s television stations to relinquish UHF spectrum where possible to bolster wireless networks.

Conference host Walt Mossberg challenged Genachowski on why more isn’t getting done and why accepting the current state of the marketplace is acceptable.  He also criticized providers for charging high prices for slow service and attacked Comcast for its set top box, claiming if there was an open market for these things, no one would buy it, that it would be the worst thing on the shelf.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/All Things Digital Genachowski 6-2-10.flv[/flv]

Excerpts from FCC Chairman Julius Genachowski’s visit with Walt Mossberg at the June 2nd D: All Things Digital conference.  (6 minutes)

AT&T’s days of unlimited wireless data plans for smartphone customers officially end June 7th when the company launches new wireless data plans that all come with usage caps attached:

• DataPlus $15 a month and limited to 200 megabytes  of data.  If you exceed it, your overlimit penalty is $15, good for an additional 200 megabytes.
• DataPro $25 a month gets you just 2 gigabytes of data.  The overlimit penalty for those exceeding it is $10 which buys an additional 1 gigabyte of usage.

AT&T Smartphone customers will also be able to add tethering under the $25 DataPro plan for an extra $20 per month, with DataPro’s usage allowance applied.

Current AT&T customers can remain on their current unlimited Smartphone data plan indefinitely, even if they change or upgrade phones according to AT&T spokesman Mark Siegel.  That concession probably helps AT&T preserve anticipated demand for next week’s new iPhone launch.  Without it, customer demand could be tempered by the realization a phone upgrade could cost you your $29.99 unlimited usage plan.  If you were considering getting an AT&T phone with unlimited data, you have until June 6th to sign up for service under that plan.  After that date, you’re out of luck indefinitely.

AT&T is promoting the end of unlimited wireless broadband as a benefit to customers, claiming that 98 percent of its Smartphone customers use on average less than 2GB of data per month.  But that represents today’s usage.  AT&T’s decision to eliminate an unlimited option they claim 98 percent of their customers never exceeded would be curious without understanding the next generation of Smartphones will provide dramatic improvements in high bandwidth video streaming that will dramatically start eating into those low usage allowances.  The company’s next generation of faster wireless broadband will also include low limit plans, which makes them untenable as a home broadband replacement for all but the most casual users.

For new iPad customers, the $25 per month 2 GB plan will replace the existing $29.99 unlimited plan. iPad customers will continue to pre-pay for their wireless data plan and no contract is required. Existing iPad customers who have the $29.99 per month unlimited plan can keep that plan or switch to the new $25 per month plan with 2 GB of data.

AT&T offers up the common practice of boasting about how much you can do with a usage-limited account, based on the thousands of e-mails you'll never send, the 500 pictures you'll never take, or the 20 - one minute YouTube clips you'll never watch. Notice they never seem to include figures for streaming multimedia applications like music, movies, and TV shows or playing more bandwidth-intensive games. To do so would only upset customers further.

AT&T says customers can continue to use unlimited amounts of data when they access it over the company’s Wi-Fi network hotspots.

Wall Street is happy with AT&T’s elimination of unlimited plans, sensing higher profits and reduced costs will follow.

“The new plans appear well designed to reduce undue network stresses,” Craig Moffett, an analyst at Sanford C. Bernstein told The Wall Street Journal.

Analyst Philip Cusick at Macquarie Securities also told the Journal AT&T may see lower growth in data revenue in the short term as a result of the new changes, but will gain leverage over the heaviest data users, improving its ability to manage its network and charge for capacity. Tiered plans may also pull more customers into data plans, he said.

But because current customers can choose to remain on the grandfathered unlimited plan, existing heavy data users accused of chewing up AT&T’s wireless network can continue to do so as long as they remain customers.  AT&T will only be capping future customers who sign up on or after June 7th.

For those outraged by AT&T’s decision, fleeing to Verizon Wireless for unlimited data may not be an option for too much longer either.

Verizon Wireless Chief Executive Lowell McAdam indicated in an interview with the Journal last month that he, too, is looking at pricing based on use.

“The old model of one price plan per device is going to fall away,” McAdam told the newspaper, adding that he expects carriers to take an approach that targets a “bucket of megabytes.”

One company that doesn’t plan to end an all-you-can-eat wireless data buffet is Sprint, which now sees its unlimited data plan as a potential marketing asset.

A Sprint spokesperson spoke the words you were already thinking:

“We’re giving customers a better value. With data usage growing, customers don’t want to worry about going over their limits.”

Some customers upset that AT&T only sold an unlimited plan welcomed the lower cost options because they didn’t spend a lot of time using the data features of their phones, but several wondered why the company didn’t simply introduce lower cost options -and- leave the unlimited plan in place for those who wanted it.

Overall, AT&T is getting an earful from angry customers over the announcement — even those who don’t exceed 2GB per month.  They sense greed and overcharging.   A sampling:

If 3% are using data “a lot” now, then in another two years, it’ll be 15% and then 60%. Simply put, this is gouging customers, where pricing is decided by dudes in a board room looking at charts and graphs and sales numbers, figuring out how to gouge people for maximum profit.

Obviously AT&T is killing the unlimited plan to cut down on usage and to raise their profits. I also believe it is heavy handed to eliminate the unlimited access plan. If anything, offer other plans and raise the price of the unlimited plan. It will be interesting to see of the other players follow suit and also kill their unlimited plans (can you say “price fixing”? Sure you can!).

AT&T is always full of good ideas, like that Microcell thing. Hey, we can’t give you good service you paid for, so we are going to ask you for more money for this piece of equipment to supplement the service you are not getting.

Just another greedy ploy to make more money. They are selling air. The charges are ridiculous and this is one industry that should be under government control.

My spouse and I pay half of what AT&T would charge us for excellent Palm smartphones on Sprint. We also get turn-by-turn GPS included–something AT&T AND Verizon both charge extra for. Sprint’s network is top-notch. I can’t fathom why people continue to waste money on Verizon and AT&T.

If you’ve got a smartphone or you tether your computer, you really have no idea how much bandwidth your device is consuming. Even worse (or better if you are the phone company) customers can’t control the bandwidth that their devices consume. How often does your email client check for new messages? Can you even stop your computer from downloading a security update? What about that last application you installed, can you stop it from calling home every time you launch it? Do you even know that it does track and report your usage? That’s a huge difference between phone services and data services. You KNOW when you’ve dialed a number and talked for 10 minutes. You can’t control all the data consuming applications and services on your devices… and trying to bill customers for something that they can’t control the usage or cost must be illegal. Surely someone will address this problem soon. Surely.

[flv width=”576″ height=”344″]http://www.phillipdampier.com/video/CNN ATT Goodbye to unlimited data 6-2-10.flv[/flv]

CNN Money reports on AT&T saying goodbye to unlimited data plans for iPhones and iPads.  (1 minute)

This empty water tower in Madison, Wis. caught fire Friday as workers began painting preparations, disrupting wireless communications services on the city's west side for months. (Photo: WMTV Madison)

A water tower fire on Madison’s west side has wiped out WiMAX broadband service for at least 150 fixed wireless broadband customers, leaving them cut off for so long, provider TDS Telecom is canceling their service and assisting customers in switching providers.

A Madison utility manager said workers Friday were preparing to paint the 100,000-gallon tower in the 2700 block of Prairie Road when insulation around communications cables caught fire.  Smoke was visible from the empty water tower for miles, and several nearby homes had to be evacuated because of fears of a potential collapse.

City engineers have since deemed the tower safe, but the real impact will be several months of interrupted broadband and cell service from several area providers who depended on the tower as an antenna site.  The tower was particularly crucial to TDS Telecom, which depended on its strategic location to deliver its wireless broadband service in western Madison.  It will take several months to restore service.

“Based on our discussions with the City, we anticipate it could take a very long time to repair the damaged tower,” states DeAnne Boegli, TDS National Public Relations Manager. “Since this is the only viable tower location TDS can use to serve these homes, and because temporary solutions are not available, our customer’s best option is to select another facilities-based communications provider.”

TDS will assist all 147 impacted customers in changing their service without penalty and remove the equipment from customer homes at their request and convenience. The company is also providing the customers a month’s service credit.

“Unfortunately, this accident has left us with no reliable or timely restoration options. TDS understands communications services are critical to our customers and we want to get them transitioned as quickly as possible, even though it means they must select another provider,” said Boegli.

Affected cell phone companies are trying to establish temporary cell tower sites to improve service in the area while repairs get underway.

[flv]http://www.phillipdampier.com/video/WMTV Madison Water Tower Fire Wipes Out WiMAX 5-14-10.flv[/flv]

WMTV-TV in Madison broke into regular programming to deliver a special report on the fire.  We’ve also included some raw video of the fire.  (11 minutes)

Last year I participated in an online focus group about wireless broadband pricing.  The subject was consumption billing vs. usage limits — do consumers value unlimited broadband plans with overlimit fees more than strict usage caps that cause speeds to plummet for customers who reach them.  Also under consideration were various usage allowances sold at different price points.  Focus group members could rate the plans’ acceptability from a scale of “extremely interested” to “would not consider this plan.”  It took me mere minutes to work my way through dozens of combinations, rating them all unacceptable.  Participants were next directed into an online forum to discuss the different plans amongst ourselves, with a moderator focusing and encouraging discussions.

Inevitably, I was asked why I rated every plan on offer as not worthy of my consideration.  My short answer was that while I understand wireless was not presently a limitless resource, the plans suggested all included overlimit fees or plan allowances that would-be customers had to choose, many with no insight into what their monthly usage could or would be.  Not on offer was a true consumption plan that charged wireless customers only for what they used during a month.  If they didn’t use it at all, no bill would result.  My bottom line — customers should not have to take a crash course in data consumption to predict their usage or face steep penalties when they guessed wrong.

T-Mobile has found a third way, although Cricket’s wireless broadband service beat them to it well over a year ago.

The company’s new 5GB wireless broadband plan offers a traditional usage cap every mobile broadband customer is familiar with, but imposes no overlimit fees on customers that exceed it.  Instead, they reserve the right to dramatically reduce your speed until the next billing cycle begins.  T-Mobile representatives tell Stop the Cap! the company won’t automatically impose the speed throttle unless customers have a history of regularly exceeding their usage allowance (or dramatically exceed it.)  T-Mobile also may forgive a customer for an occasional breach, dropping the speed throttle for those who contact customer service and ask.

This effectively matches Cricket’s pricing and usage plan, which may cause that carrier to consider increasing usage allowances or reducing the price to compete.

T-Mobile's data plans for mobile broadband and smartphones

Broadband Reports notes that the 200 megabyte plan still requires overlimit fees, but they’ve been cut in half from 20 cents per megabyte to 10 cents.

Larger carriers like AT&T and Verizon still impose overlimit fees on their usage-capped wireless broadband accounts.  Cricket sells a $50 10 gigabyte usage allowance plan through Wal-Mart as well.

American Salt Company's salt pile in Hampton Corners, just south of Rochester, N.Y.

Faithful Stop the Cap! reader Lance dropped us a note this afternoon alerting us that Syracuse is the latest Time Warner Cable city getting the benefits of increased speed from Time Warner Cable’s DOCSIS 3 Wideband upgrade.

While those in the Salt City can now sign up for 50Mbps broadband service, Time Warner Cable tells residents of the Flower City to go pound salt — there are no upgrades for you!

Why?

Thank Frontier Communications anemic (read that barely-existent) competition against Time Warner Cable in Rochester.  While the rest of upstate New York is being wired for fiber-to-the-home service from Verizon, Frontier Communications is relying on decade-old DSL service… indefinitely.  For residents like myself, that topped out at a whopping 3.1Mbps. That fails the FCC’s newly-proposed minimum speed to even be considered “broadband.”

Buffalo has been Wideband ready since early this month, and New York City launched service last year.

The Rochester Democrat & Chronicle must have noticed nearby cities were getting speed increases, but Rochester was not, so they contacted Time Warner Cable to find out why:

While those DOCSIS 3.0 products — called Wideband and Road Runner Extreme — are being made available in Buffalo and Syracuse, the company “has just begun its national launch of this product across its entire footprint, but with no additional locations determined at this time,” said spokesman Jeff Unaitis.

The company, however, does plan to roll out a wireless broadband product for the Rochester market before the end of 2010, he said.

(*) - As long as you don't live in Rochester, N.Y.

That’s the nice way of saying Rochester isn’t getting the speed increases because there is no competitive reason to provide it.  With Rochester left off the upgrade list, and no real incentive to run to Frontier (which can’t beat Road Runner’s existing speeds), this community falls behind the rest of the state in broadband speed.

To think last April Time Warner Cable was promising dramatically upgraded service, if the community agreed to accept their Internet Overcharging usage-based billing scheme.  Apparently no other upstate city was required to commit to ripoff pricing, and speed upgrades came anyway.  The fact Rochester is bypassed this year proves our contention their pricing experiment came to Rochester only because they faced no real competitive threat from Frontier then, and they still do not today.

As for the wireless product coming to Rochester, that will come courtesy of rebranded Clearwire service, which has had very mixed reviews.  Time Warner Cable and Comcast are both major investors in Clearwire, and are using their service to provide a wireless add-on.  It won’t come cheap, however, if North Carolina’s pricing also applies here:

• Road Runner Mobile 4G National Elite gives unlimited access to both Time Warner Cable’s 4G Mobile Network and a national 3G network (Sprint, presumably), for use when traveling.
  o $79.95 per month for Road Runner Standard or Turbo customers.
• Road Runner Mobile 4G Elite gives customers unlimited access to the Time Warner Cable 4G Mobile Network.
  o $49.95 per month for Road Runner Standard or Turbo customers.
• Road Runner Mobile 4G Choice gives light users 2GB of service on the Time Warner Cable 4G network each month.
  o Available for $39.95 per month to customers of at least one other Time Warner Cable service.  Additional $5 off if you have a  bundled service package.

As for Wideband pricing, Syracuse residents should expect to pay:

• 30/5Mbps: $25 more than standard Road Runner service;
• 50/5Mbps: $99 per month, but ask about promotional pricing, which may be available.

In Syracuse, Road Runner speed now matches Verizon FiOS on the downstream side, although Verizon can deliver better upload speed at 20Mbps.  Formerly, Road Runner maxed out at 15Mbps in central New York.

About 30 percent of the central New York division of Time Warner Cable is now Wideband-ready, including the entire city of Syracuse.  By October, the company expects to have the faster service available in 70 percent of the central New York area.