Last week it was discussed at length how the investment community would like the public to believe that the shift to low cap and high overage broadband pricing is “inevitable.” We also discussed how cable industry lobbyists would like the public to believe that such a shift isn’t about making more money, it’s about helping the poor. Not only is the metered billing push absolutely about making money, it’s about artificially constricting the pipe to protect uncompetitive carriers and TV revenues from Internet video. But instead, there’s a very concerted effort afoot to portray this shift as necessary, inevitable, and even altruistic.

Most consumers prefer the simplicity of flat rate pricing, and understand that ISPs are perfectly profitable under the flat-rate pricing model. They also understand that this is a pipe dream forged by never-satisfied investors, and once implemented ends with ever soaring per gig fees and ever shrinking usage caps.

The PR campaign continues this week, with Hewlett-Packard’s Joe Weinman claiming at GigaOM that not only is such a pricing shift “inevitable,” but that it’s a shift that actually originates with consumers, not investors or ISP executives. Weinman starts out on the wrong foot immediately, by confusing “pay per use” with low cap and high overage pricing models:

For the record, I like unlimited Internet access just as much as anyone else. However, such plans appear to be on their way out, and here s why. As explored in “The Market for Melons”, pay-per-use is not an evil plot by greedy robber barons, but a natural outcome of independent, rational consumer choice. Consider a town with an all-you-can-eat (flat rate) buffet and an a la carte (pay-per-use) restaurant. Smart shoppers on diets will save money by patronizing the a la carte restaurant, whereas heavy eaters will save money by visiting the buffet…. Bottom line: it is not the proprietors driving this dynamic, but the customers themselves acting out of pure, rational self-interest

Except for the thousandth time, ISP’s are not interested in real pay per use plans because the majority of their users (who simply check e-mail a few times a day) would downgrade to $5 tiers and cost carriers billions. What ISPs are proposing is flat-rate pricing with costly per gigabyte overages (completely detached from any real-world costs, which for ISPs are fixed or dropping) layered on top. Meanwhile, the suggestion this is a consumer driven push is absurd. This is an investor driven push for obvious reasons, and you have to wonder if Weinman saw the consumer reaction when Time Warner Cable proposed charging consumers up to $5 per gigabyte then insisted such pricing was for their own good.

Weinmen offers up a second post in which he hallucinates a laundry list of supposed benefits that will occur from this change in pricing paradigm. Most of them revolve around technology platforms designed to aid this monitoring and metering of usage and billing, which we’ll go out on a crazy limb and guess is precisely what Weinman is selling at HP. Unfortunately, Weinman begins his sales pitch just like the cable industry traditionally has by pretending this is an inevitability consumers want, and that such a pricing shift is financially necessary. Neither are true.

Link to the original article…

“White space” broadband technology could use unlicensed and partially vacated spectrum created by the shift to digital television to create a new wireless broadband delivery system. You’ll recall that in 2008 the National Association of Broadcasters was busy bickering with the companies pushing white space usage (Dell, Google, Microsoft), and the FCC began fielding comments on possible rules for the technology. According to the Wall Street Journal, the FCC may vote on final white space rules at their upcoming September meeting, though the agency has a mountain of unresolved issues already on their plate.

Link to the original article…

Cox Communications has announced that the company is now offering faster, DOCSIS 3.0 based service to businesses and residential customers in Connecticut. That of course includes the company’s fastest Ultimate Internet tier, which offers 50 Mbps downstream (55 Mbps when Powerboost kicks in) and 5 Mbps upstream for $99 a month. According to the Cox press release, the tier comes with three unique IP addresses, 10 e-mail addresses, and 50 hours per month of remote dial access (that last one being something you’ll enjoy for less than a month, since Cox is killing off backup dial-up starting in September).

Link to the original article…

Both Clearwire and Sprint this morning launched press releases stating they’ve expanded their joint Mobile WiMax into Modesto and Stockton, California, Jacksonville, Florida, Wilmington, Delaware, and Grand Rapids, Michigan.

According to Sprint, these launches bring their total number of 4G-served markets to 48. Both companies say they’re still on track to deploy the Mobile WiMax service to the New York, Los Angeles, Miami and Boston later this year. You can find a state-by-state market coverage breakdown for Sprint here and for Clearwire here.

Link to the original article…

After years of waiting and collapsed business models (like Boeing’s Connexion), we finally started to see in-flight broadband services materialize last year. Unfortunately for carriers, fewer than 10% of air travelers seem willing to pay for the service, at least at the current price point. Companies keep tinkering with pricing in the hopes of finding their sweet spot but free Wi-Fi promotions from the likes of Google and others appear to have ruined flyers’ appetites for Wi-Fi bills. A new report by In Stat says in-flight broadband should see $95 million in 2010 revenues (up from $7 million in 2009), while “fee per connect is expected to deteriorate” due to lower negotiated roaming and other costs.

Link to the original article…

Back in May it was noted how Verizon was doing something interesting in Tampa to try and grab market share from cable: they were offering no-contract FiOS to customers. In other words, users in Florida are now getting the same triple-play pricing as users that used to have to sign contracts instead of being penalized roughly $25-$30 extra for no-contract.

As Verizon shifts from expanding FiOS into new markets to upping subscription rates in already deployed markets, apparently Verizon found that their long-term contracts and ETFs, which telcos imported over from the wireless sector, was a deterrent to many customers moving over from cable.

Verizon has reached out to us to note that they’re now taking this idea nationally in the hopes of ramping up subscriber numbers. “Basically we are taking the program in Florida you wrote about recently and going national with it,” Verizon’s Robert Elek tells Broadband Reports. “The name change from Verizon’s FiOS Service Commitment to FiOS Worry Free Guarantee is really the only change from what we’ve been doing in Florida,” he says.

According to Elek, the results in Florida and Pennsylvania “exceeded what the company was expecting,” so going national “seems like the natural next step.”

As part of the deal, users who don’t sign a long-term contract won’t have to pay more and they’ll receive a guarantee of their initial price for one year. They also won’t have to pay an early termination fee (which was raised to $360 earlier this year). After Verizon’s announcement of the new strategy in Tampa, cable competitors like Bright House Communications accused the telco of simply copying a practice cable operators have been using for years.

Users interested in the whole Verizon release can find it here.

Link to the original article…

Back in February, BroadbandReports noted how Baltimore was one of a number of cities upset that they were overlooked by the Verizon FiOS installation fairies. As they’ve discussed at length, the company is stopping deployment in any market where a franchise agreement hasn’t already been signed. There’s a number of reasons for this, including the fact that Verizon wants to market the service to deployed areas and ramp up adoption, the company is eager to see if they can grab stimulus bucks, and Verizon CEO (and FiOS’s biggest champion) Ivan Seidenberg is on the way out – and his replacements aren’t as bullish on this whole “future” thing.

Baltimore this week decided to hold a public hearing exploring why they weren’t part of Verizon’s $23 Billion FiOS plans. The city denies that they were in any way the cause of Verizon’s decision, either by being difficult franchise negotiation partners or by imposing heavy conditions on Verizon. Many in the city continue to think Baltimore was ignored because of its lower income and minority neighborhoods – but Verizon again denied such “redlining” allegations at the hearing, according to attendee and Baltimore Sun blogger Gus Sentementes. Still, Verizon’s not disclosing the secret formula used to determine FiOS worthiness:

We still have not heard Verizon’s rationale for avoiding Baltimore and heck, while we’re at it: Boston and Buffalo and Syracuse and Albany, too. Specifically, by what standards did Verizon choose who would get FiOS and who would not? Did they throw darts at a map of the United States? It’s not enough to say “we can’t be everywhere” — I think people generally understand that. But why is Baltimore the hole in the donut, to use Kraft’s analogy? Choices were made probably following a set of criteria. Verizon must have made a business decision (one hopes) on a set of facts, and the city wants more clarification on how they reached that decision.

Obviously Verizon didn’t find installation there to be a profitable equation, but Baltimore still would like to see the math – and Verizon likely felt telling Baltimoreans Verizon felt their city isn’t very nice wasn’t in the cards. To try and calm the locals, Verizon sent a letter to the Baltimore Sun insisting that they remain “committed to Baltimore.” Just not when it comes to actually upgrading the network there:

Although FiOS video may not be available, it’s important to remember that Verizon is able to offer Baltimore consumers High Speed Internet (HSI) service (using DSL technology) at speeds up to 7 megabits per second in much of the city, and DIRECTV with a network that is second to none, our infrastructure keeps residents and businesses communicating. And we’ll continue to make that infrastructure better, faster and more robust.

As for Baltimore figuring out Verizon’s secret formula, the city is probably going to be waiting for a while. Cities like Boston, Alexandria, Binghamton, Albany and many others are asking the same questions but getting no answer. Of course Verizon looked at a huge variety of economic, logistical, competition (or more specifically a lack thereof) and other factors, but Verizon’s never going to let the public see the real data behind their decisions. Perhaps Baltimore (or local businesses) can begin building a Baltimore fiber network, and see if that gets Verizon’s attention?

Link to the original article…

Cisco is apparently hoping to piggyback on the excitement surrounding Google’s recent announcement that they’re deploying 1 Gbps fiber service to a limited number of consumers for testing purposes. According to the Financial Times, Cisco is “developing an ultra-high-speed system for internet access” in cooperation with a number of US service providers. Given Cisco already sells hardware to most of the major ISPs, many of whom already are cooking up “ultra-high-speed” service (like Comcast’s exploration of 100-250 Mbps service), the leak is annoyingly vague:

Cisco declined to comment on its plans. But it said the US “needs high-speed, future-proof broadband networks that are accessible and affordable to all and that it “looks forward to being part of this exciting transformation”. David Kaut, an analyst at Stifel Nicolaus in Washington, said Cisco’s move, like Google s, would help the private sector determine whether there was real consumer demand for huge amounts of bandwidth, or whether current levels of 5 or 10 megabits were sufficient.

Mr. Kaut’s quote is particularly odd for several reasons. One, we’re already quickly pushing past 5 to 10 megabits per second speeds for even standard service in many markets, with several carriers launching 50-100 Mbps service. Two, why would anybody think that the evolution in broadband speeds should just stop at 5 to 10 megabits? Today’s power user is tomorrow’s regular user; you don’t just stop upgrading networks because you think Joe public currently doesn’t need faster speeds.

Cisco’s “leak” offers no details, though the company tells GigaOM that they’re holding a press event on March 9 where Cisco “will make a significant announcement that will forever change the Internet and its impact on consumers, businesses and governments.” From the sound of it, ISPs are working with Cisco to design a public relations counterpunch to Google’s announcement, which as we noted at launch is in part designed to give Google policy and political ammunition in the fights over open access, network neutrality, and competition.

Link to the original article…

Time Warner Cable announced that the cable provider is now the nation’s third-largest broadband ISP, having just passed the 9 million broadband subscriber mark. They seem to be working from trend projections: Time Warner Cable actually ended 2009 as the country’s fourth biggest ISP, their earnings showing 8.9 million broadband subscribers to Verizon’s reported 9.2 million customers. Both of course trail AT&T and Comcast, AT&T’s earnings indicating that AT&T now serves 15.7 million customers, while Comcast’s latest report shows Comcast with 15.9 million broadband users.

“This is a great milestone for Time Warner Cable, and it further proves that our customers enjoy the speed and content our HSD products deliver, as well as the value seen when bundling this service with our video and phone offerings,” said Landel Hobbs, COO of Time Warner Cable.

Time Warner Cable and Mr. Hobbs were greatly helped by the fact that Verizon’s all but giving up on rural DSL service, either selling or simply ignoring many of these Time Warner Cable markets. Instead, Verizon has made it clear they want to focus on wireless (especially LTE) service and more profitable FiOS markets.

Last we checked Verizon FiOS was available in less than 10% of Time Warner Cable’s overall markets, and Time Warner Cable doesn’t have to try very hard to lure subscribers that have grown tired of 7 Mbps (or often 3 Mbps or slower) DSL service.

Penetration of AT&T U-Verse is actually higher in Time Warner Cable markets – approaching 20%. But AT&T’s top broadband speeds max out around 24 Mbps at shorter loop lengths, and AT&T’s been struggling to get line-bonded VDSL service working.

Once you realize that less than a third of Time Warner Cable’s markets see any kind of real next-gen broadband competition (with Verizon’s FiOS deployment outside of major cities essentially done for now and AT&T line bonding a perpetual no show), you start to understand why the company’s been slower to upgrade to faster DOCSIS 3.0 technology. The faster speeds are only available in portions of New York City, with only 2,000 of Time Warner Cable’s 9 million customers signed up for 50 Mbps service.

“High Speed Data continues to be a growing part of our business and we look to keep adding new features and further enhance speeds as we move through 2010,” says Hobbs. Though Time Warner Cable has been slow on upgrades we expect several new market launches over the next month or two; one insider tells us faster “Wideband” service should soft launch in upstate New York in a matter of weeks, with a hard launch a month later. Localized upstate New York promotions would seem to confirm this.

Link to the original article…

The other day it was noted that AT&T was getting ready to raise prices on U-Verse broadband, TV and VoIP customers (see the fine print on this U-Verse pricing page). Judging from some leaked AT&T talking points posted to BroadbandReports.com forums, AT&T is getting ready to hit regular DSL customers with some price hikes as well.

According to the leaked memo, AT&T says they’re making some “modest price adjustments” to both U-Verse and DSL pricing soon, and that users should be notified by mail of the changes. AT&T is currently offering “DSL Xtreme 6.0″ (6 Mbps), “DSL Xtreme” (3 Mbps) and “DSL Ultra” (1.5 Mbps) tiers – for the same price. Users who sign up now are given any one of the tiers for $24.95 for twelve months, after which the pricing reverts to $42.95, $37.95, or $32.95, respectively. Keep in mind of course that AT&T continues to test low caps and high per gig overages in two markets and may or may not expand those ambitions in 2010 as well.

Update: AT&T reached out to us to note that there will be a few price reductions on their higher end U-Verse tiers, and they’ll be eliminating their slowest U-verse tier:

On the U-verse High Speed Internet side, there are some changes for new customers, starting with decreasing the price of our higher-speed packages – Max (up to 12 Mbps) and Max Plus (up to 18 Mbps) – by a month across all of our 22-states. The Express (up to 1.5 Mbps) service will no longer be offered to new U-verse customers as of Feb. 21.

AT&T tells us the changes “reflect the greater demand and interest we’re seeing for higher bandwidth packages among our U-verse customers.”

Too bad “greater demand” is met only with “greater prices” and not “greater service”.

Link to the original article…

Many ISPs fail to expand broadband to all of their potential customers, which is sometimes understandable given the expense. However, it’s been documented countless times how those same ISPs often then lobby to have laws passed or engage in sleazy activities to prevent those towns and cities – or anyone else – from wiring those unserved regions.

ISPs get their cake and eat it too – saving money on expansion, while avoiding a future competitor should the local incumbent someday change their mind and decide to service that market. It shouldn’t work that way – but it does, and all too often.

The latest version of this all-too-familiar story is occurring in North Carolina, where freshly created CenturyLink (formerly Embarq and CenturyTel) is trying to prevent a local-Roxboro-based ISP named Electronic Solutions Inc. (ESI) from getting federal broadband funding to expand wireless broadband in the state. According to Stop The Cap, ESI President Randy King says CenturyLink is pretending to serve these markets – just to prevent anybody else from doing so:

“We are extremely disappointed that CenturyLink has opposed the Person County project. The project would provide high speed Internet (broadband) in areas that currently do not have service in our county. CenturyLink as recently as April 2009 met with county officials and members of the public and stated that they did not intend to expand DSL in low density areas which do not make economical sense. We are now aware that CenturyLink is not only not going to serve these areas but is attempting to block anyone else from serving these areas.”

Of course the broadband mapping data CenturyLink is using to artificially inflate their network footprint comes from none other than Connected Nation, a freshly taxpayer-funded mapping group under fire for being little more than a phone company dog and pony show and lobbying vehicle. Connected Nation’s overly-optimistic maps can show that no improvements are necessary locally, protecting the local phone incumbent’s turf – while sticking it to unserved users. The ultimate irony being that this is all funded by the taxpayer. Are we starting to understand how this works yet?

Outraged? You should be…

Link to the original article…

Earlier this month an analyst for the Yankee Group and one of the primary developer’s of Amsterdam’s fiber to the home (and houseboat) network argued that the bandwidth hog didn’t exist, and was instead simply a concept used to disguise poorly designed networks and justify anti-consumer behavior.

To prove their point, they offered to analyze anonymous data from any ISP willing to volunteer – as long as the ISP offered data that adhered to a specific dataset. According to a new post over at the blog, several ISPs have offered to participate (though there’s no names so far). They’ve also set forth the exact dataset (warning: pdf link ) they’re looking for, if any additional ISPs wish to participate.

Link to the original article…