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Just a quick note - this was an excellent, candid discussion about Internet access policy that featured Phil Dampier from Stop the Cap and Rachel Barnhart, a NY legislator from Monroe County.
The show is Connections with Evan Dawson. It is a 51-minute discussion and is far more reality-based than most that we come across.
The federal government is about to spend more than $120 million on subsidies that, rather than improving rural connectivity, will make tens of thousands of families worse off.
These funds are part of a 2018 federal program intended to expand rural broadband access called the Connect America Fund phase II (CAF II) reverse auction. The program, in which Internet access providers competed for subsidies, will distribute nearly $1.5 billion over the next 10 years to connect unserved rural residents. But in some communities, the auction may do more to widen the digital divide than diminish it.
While some winning bidders committed to building out high-speed fiber optic networks, satellite company Viasat will rake in more than $120 million in subsidies to continue providing inadequate geostationary satellite connectivity to rural households that are clamoring for something better. Not only does satellite Internet access offer slower speeds, greater latency, and less reliability for a higher cost compared to other technologies, but Viasat’s subsidies are making those areas ineligible for future broadband funds, deterring other providers from building truly high-quality networks. Instead of bridging the digital divide, the process will relegate certain communities to satellite Internet access while others receive ultra-fast fiber and do nothing more than deepen the fissure.
Mo’ Money . . .
The Connect America Fund (CAF) is a multi-phase subsidy program that supports improved connectivity in rural, high-cost areas as part of the Federal Communications Commission's (FCC’s) Universal Service Fund. The most recent phase of the program, the CAF phase II reverse auction, auctioned off regions to providers using a complicated formula that prioritized bids for low subsidy amounts and high-quality service.
Previous rounds of CAF mainly subsidized the large incumbents, such as AT&T and CenturyLink, but for the reverse auction, the FCC opened participation to other entities, including non-traditional providers like electric cooperatives. Eligible areas included rural locations where the incumbents had previously refused subsidies (and the accompanying commitment to expand Internet access).
Viasat was one of the largest winners in the CAF II reverse auction...
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By now, you’ve met the people of “Villageville,” the imaginary town in rural America that, like many similarly situated communities, are struggling to find better connectivity. This week, we continue our soap opera saga “From Crops to Co-ops: Small Towns Want Better Internet.”
In this episode, the kids of the community are working on another big homework assignment and gather together at the neighbor’s house to tap into his satellite Internet access. Watch to find out the results when Grumpy Gary tells the kids to “get off his lawn.”
In rural areas with low population density, large corporate Internet access providers don’t find the motivation they need to invest in fast, affordable, reliable connectivity. High numbers of residents and businesses depend on satellite Internet access as a last resort. Plans are expensive, unreliable, and typically include data caps. In episode 3, we include pop-up information about satellite Internet access and how communities who must use it settle for less than they deserve.
Don’t miss another opportunity to hear the Very Amateur Acting Troupe from the Community Broadband Networks Initiative and the Institute for Local Self-Reliance fill the roles of local people who are just trying to get online to get stuff done.
If you want to get caught up first, read up on the storyline from episode 1 here or watch it below. You can also check out the synopsis of episode 2 and watch it below to experience the whole story from the start. Share the series playlist, where we'll continue to add episodes as we release them.
Next week we attend a city council meeting in Villageville in which residents and community leaders decide what to do about poor Internet access in their community. Don't miss it!
You can get caught up on the saga here with episode 1:
...
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Much like the the bone-chilling flicks celebrating eerie entertainment that dwells in the depths of our dark imaginations, monster cable and DSL Internet service providers strike terror in the hearts of subscribers…if they survive. Mesmerizing fees, hair-raising customer service, and shockingly slow connections can drive one to the brink of madness.
In celebration of Halloween 2016, our writers each selected a national ISP and reimagined it as a classic horror character. The results are horrifying! Read them here…if you dare!
AT&T’s Frankenmerger
by Kate
This shocking film tells the horrific tale of a mad scientist in his quest to create the world’s largest telecommunications monopoly monster. The scientist’s abomination runs amok, gobbling up company after company, to create a horrifying monster conglomerate. Watch the monster terrorize towns across America as it imposes data caps, denies people access to low-cost programs, and refuses to upgrade infrastructure. What nightmare lies ahead? Will the townsfolk and their elected officials unite to stop the monster, before it acquires Time Warner? Watch and find out!
The Mummy From Last CenturyLink
by Scott
Archaeologists unearth the Last CenturyLink Mummy from a rural field of copper wires. Townspeople put the Mummy on display in Hard Luck City Hall. Little do they know the Last CenturyLink Mummy was once Pharaoh of DSL (Dreadfully Slow Line) service. Long ago, he was cursed by subscribers and doomed to remain in the slumber of purgatory, much like the DSL Internet access they endured. He awakes when he...
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A recent Wall Street Journal (WSJ) article (requires subscription) chronicles the increasingly problematic effect of data caps on the quality of residential subscribers' Internet access experience.
Also known as a bandwidth cap, a data cap is a monthly bandwidth usage limit Internet Service Providers (ISPs) sometimes impose on subscribers at their standard monthly rates. While some ISPs charge customers more for exceeding their monthly bandwidth caps, in other cases ISPs may even cut off a customer’s service completely.
The problem is also harming companies like Netflix and Sling TV who are losing customers who can’t justify paying for a high capacity video streaming service that’s only available until they hit their data caps partway through the month. In response, Netflix lowered the video quality for users on ISP networks that use data caps as a way to help them avoid the limitations. The plan worked, but in the process Netflix angered customers, who blamed both the ISPs and the streaming service for the lowered video quality.
It's Not All About The Money
The problem goes beyond the extra fees charged to customers who use a lot of data. The WSJ article cites two Internet users who’d like to join the growing number of “cord cutters” who are dropping television service for Internet-based video. As one man put it:
“I wouldn’t have regular TV if not for the data cap,” he says. “Comcast has got me by the throat.”
Another added:
“I was planning to cut the cord when my DirecTV contract is up,” he says. “This is essentially a ploy to keep people from cutting cable in my opinion.”
An increasing number of subscriber complaints and suspicions about the accuracy of measuring bandwidth usage heighten concerns.
Feds Take Notice
The Government Accountability Office released a report at the end of 2014 expressing their concern about ISPs abusing the use of data caps. At the time, the FCC said that they had not received enough complaints about the problem to merit action. In 2015, as this new WSJ article notes, the FCC received an unprecedented number of complaints about data caps. The problem is...
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The East-Central Vermont Community Fiber-Optic Network (EC Fiber) recently announced plans to increase speeds across tiers with no increase in prices.
Changes will look like this:
All speeds from EC Fiber are symmetrical so both download and upload are equally fast.
Self-Funded at the Start
Twenty-four communities in Vermont make up the consortium which began in 2009. The towns joined forces to deploy a regional Fiber-to-the-Home (FTTH) network when large corporate incumbent providers chose to invest elsewhere. Slow DSL was the best option in the area and local residents, businesses, and local institutions needed better connectivity.
Individual investors funded the initial network buildout but last year a new Vermont law took affect that allows towns to create "communications union districts." EC Fiber now functions under such a governance structure and organization officials expect to more easily attract larger investors and borrow at lower interest rates. EC Fiber hopes to answer requests to expand beyond its 24 member towns.
Characteristic Altruism
Increasing speeds with little or no rate increases is typical of publicly owned network communities. Tullahoma's LightTUBe, Chattanooga's EPB Fiber, and Lafayette's LUS Fiber have done it, often with little or no fanfare.
Publicly owned networks are also known to shun data caps, another tool big players like Comcast use to squeeze every penny out of subscribers....
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For this week's Community Broadband Bits podcast, we are trying a discussion/debate format between myself, Christopher Mitchell, and Ryan Radia, Associate Director of Technology Studies at the Competitive Enterprise Institute. We have debated previously and prefer a style of seeking to flesh out the argument rather than merely trying to win it.
We start by discussing the role of incumbents in limiting competition and what might be done about it. Next we move to bandwidth caps. On both of those points, we have pretty significant disagreement.
We finish by discussing the role of conduit and poles, where we have some agreement. If you like this show, please do let us know and we'll try to have more in this style.
The transcript from this episode is available here.
We want your feedback and suggestions for the show - please e-mail us or leave a comment below.
This show is 22 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.
You can can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index.
Thanks to Arne Huseby for the music, licensed using Creative Commons. The song is "Warm Duck Shuffle."
The Open Technology Institute (OTI) at the New America Foundation recently released its report on bandwidth caps. "Artificial Scarcity: How Data Caps Harm Consumers and Innovation" is the latest warning about an issue with grave implications. The PDF is now available to download.
Last November, the Government Accounting Office (GAO) released a report [PDF] with serious comments on how ISPs might abuse their power through bandwidth caps. In that report, the GAO strongly suggested the FCC take action.
This report by Danielle Kehl and Patrick Lucey further examines how this profit grabbing technique from the big ISPs impacts consumer decisions and usage.
From the OTI press release:
In this paper, we examine the growth and impact of usage-based pricing and data caps on wired and mobile broadband services in the United States. We analyze the financial incentive that Internet service providers (ISPs) have to implement these usage limits and discuss research that demonstrates how these policies affect consumer behavior. In particular, we explain how data caps can make it harder for consumers to make informed choices; decrease the adoption and use of existing and new online services; and undermine online security.
It is also increasingly clear that data caps have a disproportionate impact on low-income and minority populations as well as groups like telecommuters and students. In the conclusion, we urge the Federal Communications Commission (FCC), particularly as the new Open Internet Order goes into effect, to open up a serious inquiry into whether data caps are an acceptable business practice.
In addition to their own data and conclusions, Kehl and Lucey provide information to many other resources that tackle the implications of bandwidth caps. As consumers' need for bandwidth increases with their changing Internet habits, this topic will only become more pressing.
Last month, the U.S. Government Accountability Office (GAO) released a report warning of the possibility and potential consequences of ISPs instituting data caps in their fixed line plans. In effect, this could mean applying something like the tiered service charges based on usage levels that we see in the mobile sector to broadband connections in the home or office. But whereas the vast majority of Americans have a reasonable range of choice between several major and minor carriers for mobile service, the GAO notes that the same is not true in the market for broadband, which could lead to ISPs using data caps (or usage-based pricing (UBP) in their parlance) in various harmful ways:
...providers facing limited competition could use UBP [usage-based pricing] to increase profits, potentially resulting in negative effects, including increased prices, reductions in content accessed, and increased threats to network security.
The GAO has provided the FCC with a copy of its report, and urged that the agency take action on the issue, including systematically tracking information on how many consumers are impacted by fixed providers instituting data caps and developing a voluntary code of conduct for the industry. According to Ars Technica, the FCC has taken a skeptical stance on the issue, despite Chairman Tom Wheeler’s outspoken concerns on the lack of competition in the fixed broadband market. Pointing to the small number of consumer complaints on the issue so far, the FCC asserted that “it is unclear that any action is needed at this time.”
Usage caps do not just affect sophisticated users with bandwidth-intensive jobs or hobbies that require them to transfer large design files or generate and share multimedia content. This has the potential to affect kids and adults doing homework or taking classes online, people who hope to cut the cord from traditional television providers, and telecommuters. From the GAO study:
Read moreParticipants also expressed concern about difficulty tracking the wide range of devices accessing their fixed data allowance and that fixed UBP may negatively affect students, people working from home, and those with lower socio-economic...
Recent reports out of the FCC say that it will allow ISPs to create and sell "fast lanes" of Internet access to the companies with sufficiently deep pockets to afford them. While some people argue over whether this violates network neutrality principles or not, the more important point is that most communities have no control over how the networks on which they depend are operated.
The big ISPs, like Comcast and AT&T, are focused on maximizing revenue for their shareholders. It is why they exist. So they will want to make the fast lanes as appealing as possible, which in turn means making providers like Netflix unable to deliver a high quality product without paying special tolls to Comcast.
What does that mean for you? It means you should expect to see the big providers slow their already anemic pace of investing in higher capacity connections in favor of pushing content providers into the paid prioritization schemes. It also means that you may have to start paying more for Netflix or Hulu, where the additional money goes to the ISP you already overpay for comparatively lousy service.
A range of ISPs, from privately owned Sonic.Net in California to Chattanooga's Electric Power Board right up to Google have demonstrated that they can deliver a "fast lane" to everyone. This fight over paid prioritization is nothing more than the big cable and telephone companies trying to increase their profits while minimizing needed investments in higher quality service to everyone.
Unless you live in an area with a community-owned network. Unlike the big providers with a fidiciary responsibility to distant shareholders, community owned networks are directly accountable to the community. Their mission is to maximize local benefits, not extracting as much wealth from households as possible. ISPs like Sonic also have much more reasonable policies but over time these privately owned ISPs are vulnerable to being bought by the big national providers.
Community owned networks are far less likely to engage in paid...
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