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State and local laws that make it difficult — if not impossible — for new competition to emerge in broadband markets should be reformed, according to Crawford. For example, many states make it very difficult for municipalities to create public wireless networks, thanks to decades of state-level lobbying by the industry giants. In order to help local governments upgrade their communications grids, Crawford is calling for an infrastructure bank to help cities obtain affordable financing to help build high-speed fiber networks for their citizens. Finally, U.S. regulators should apply real oversight to the broadband industry to ensure that these market behemoths abide by open Internet principles and don’t price gouge consumers.Art Brodsky also reviewed the book on the Huffington Post. He leads with a reminder of the damage done by the NFL's replacement refs, an apt comparison given how poorly the FCC and Congress have protected the public. Susan will be our guest for the Community Broadband Bits Podcast (episode 29) on Tuesday, Jan 15, and I will be offering periodic thoughts on passages from the book in coming days/weeks.
Imagine going to a gas station, putting 10 gallons into your car's 12 gallon tank, and driving off only to find your needle only approaches half a tank? This scenario is quite rare because government inspects gas stations to ensure they are not lying about how much gasoline they dispense.
But when it comes to the Internet, we have found measurements of how much data one uses is unregulated, providing no check on massive companies like AT&T and Time Warner Cable. And we are seeing the results -- AT&T is not open about what its limits are or how to tell when one has exceeded them.
Stop The Cap has noted that AT&T has advertised unlimited bandwidth for its DSL/ U-verse product while chiding and charging customers who exceeded certain amounts of monthly usage. Customers were quietly warned and charged $10 for each additional 50 GB over 150 GB for DSL subscribers or 250 GB for U-verse customers. Clearly, "unlimited" has several definitions, depending on whether one is a customer or an ISP.
Complaints have also come in from SuddenLink customers and others. The ISP charged usage based customers for bandwidth usage when they didn't even have power. Simlarly, AT&T customers began to complain about inaccurate meters from the beginning of the program. This from a 2011 DSL Reports story - one of many comments from AT&T customers:
AT&T's data appears to be wholely corrupted. Some days, AT&T will under-report my data usage by as much as 91%. (They said I used 92 meg, my firewall says I used 1.1 Gigs.) Some days, AT&T will over-report my data usage by as much as 4700%. (They said I used 3.8 Gig, dd-wrt says I used 80 meg. And no, this day wasn't anywhere near the day they under-reported.)
AT&T and others regularly woo their regulators and policymakers with promises to built increase investments or expand networks in return for deregulation or merger approval. A recent Gerry Smith Huffington Post article examines a familiar pattern of broken promises made by telcos, what has developed into a chronic wham-bam-thank-you-ma'am attitude by these massive corporations.
We actually have a name for this, Kushnick's Law: "A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today."
Smith revisits promises made back in 2006 when AT&T merged with BellSouth. AT&T promised to roll out broadband to every customer in its territory by 2007. Tell that to Cedric Wiggins from rural Mississippi. From the article:
But five years after that deadline, Wiggins, 26, is still waiting. Inside his trailer, his only affordable Internet option is a sluggish dial-up modem that takes five minutes to load the online job listing sites he has visited since being laid-off as a truck driver in May. Every few months, he calls AT&T to ask when he will receive a faster connection. The answer never changes.
“They said they don’t offer it in my area right now,” he said. “There’s nothing I can do.”
Smith found that promises made to gain merger approval are traditionally broken and/or so weakly constructed that the players can comply with little or no effort. Empty promises continue to be accepted by the feds and conveniently forgotten, except people like Wiggins.
No one knows the pattern better than those on the inside:
“We have a problem at the commission, historically, with following-up on merger conditions,” said Michael Copps, who served on the FCC from 2001 to 2011, and who voted to approve the AT&T-BellSouth merger. “A lot of these conditions that get attached are not that great, and they are not always really enforced.”
Last year, when Comcast unveiled its Internet Essentials program, the corporate powerhouse received accolades from FCC Chairman Julius Genachowski. The program was promoted as an example of corporate philanthropy helping to bridge the digital divide.
Comcast received all kinds of positive media coverage for its program. Most of that coverage failed to note that the FCC required Comcast to integrate the program as one of the supposed concessions offered in return for Comcast being able to take over NBC -- giving the largest cable monopolist in the US even more market power.
DSLReports has publicly exposed what many of us suspected all along -- the program was not a concession on Comcast's part. Internet Essentials was originally conceived as a program that would offer slower connections to certain low income households at affordable rates that nevertheless remain profitable for Comcast.
A recent Washington Post Technology profile on Comcast's Chief Lobbyist David Cohen, notes how the program was actually conceived in 2009, but:
At the time, Comcast was planning a controversial $30 billion bid to take over NBC Universal, and Cohen needed a bargaining chip for government negotiations.
“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman” of the Federal Communications Commission, Cohen said in a recent interview.
Eligibility depends on four factors:
We have long argued that smart antitrust policy promotes investment and competition in the market. Allowing a few firms to consolidate too much power allows them to ignore our needs because we lack alternative service providers. In economic terms, they can use their market power to prevent market entry from innovative new firms.
Harold Feld recented provided more empirical evidence for our view by comparing the present cellular wireless market against that of 20 months ago. He notes new investment from abroad in T-Mobile and Sprint and that U.S. Cellular plans to expand its footprint; AT&T is planning upgrades in its spectrum holdings. Bottom line - investment is starting to happen, which was not the case a year ago.
Feld breaks out details in FCC and DoJ activities to show the relationship. In addition to the DoJ and FCC mutual block of the AT&T/T-Mobile deal, Feld notes the FCC's new attitude regarding regulatory reform. From the Feld blog:
On top of this, the FCC sudden[ly] started getting all serious about regulatory reforms designed to keep carriers other than AT&T and Verizon in the game as serious players. This included not just the long-awaited data roaming order (which now looks like it will probably survive review by the D.C. Circuit after all), but also revisiting special access, 700 MHz Interoperability, and renewed interest in clarifying the spectrum screen/possibly reviving the spectrum cap. While the last three are still in progress, the fact that the FCC is even talking about them in a serious way is so radically different from what folks expected at the beginning of 2011 that it puts heart into investors and competitors who were looking for some sign that anyone in DC gave a crap or if competitive wireless would end up going the way of competitive telecom and competitive ISPs.
Feld acknowledges that there will be those that jump to conclusions and discourages an all-or-nothing viewpoint in favor of a more measured approach. Also from his blog post:
Just this week, FCC Chairman Julius Genachowski highlighted the success of Chattanooga at a speech at VOX Media and SBNation on Winning the Global Broadband Race. From his speech (the entire speech in PDF format is available here):
First, as we said in our National Broadband Plan, we need “innovation hubs” with ultra-fast broadband, with speed measured in gigabits, not megabits.
There have been some positive recent developments on this front.
In Chattanooga, the community-owned utility installed a 100% fiber-to-the-premises network, making speeds up to 1 gigabit per second available to all businesses, residences, and institutions
Genachowski also commented on Chattanooga's place in the competitive environment:
Promoting competition also means we need to keep a close eye on developments in places like Chattanooga and Kansas City to see what additional steps we can take to encourage game- changing investments by disruptive broadband competitors.
This is not the first time Chairman Genachowski has referred to municipal networks as a valuable asset. In his August comments on the Google Fiber roll-out, he referred to the importance of municipal infrastructure investments as a way to push the boundaries and compete globally.