Study shows Community-Owned Broadband Networks provide best value – and access to pricing info is difficult to get

Harvard University recently published a report that compared public-owned FTTH networks with private options in the same market. They learned a few things – perhaps most important to note i- they learned it’s difficult to get info on pricing and packages available from some providers in some markets, which makes it very difficult to have a real conversation about broadband affordability. In this study or any other.

Here’s the abstract from the report…

We collected advertised prices for residential data plans offered by 40 community-owned (typically municipally owned) Internet service providers (ISPs) that offer fiber-to-the-home (FTTH) service. We then identified the least-expensive service that meets the federal definition of broadband—at least 25 Mbps download and 3 Mbps upload—and compared advertised prices to those of private competitors in the same markets. We found that most community-owned FTTH networks charged less and offered prices that were clear and unchanging, whereas private ISPs typically charged initial low promotional or “teaser” rates that later sharply rose, usually after 12 months. We were able to make comparisons in 27 communities. We found that in 23 cases, the community-owned FTTH providers’ pricing was lower when averaged over four years. (Using a three year-average changed this fraction to 22 out of 27.) In the other 13 communities, comparisons were not possible, either because the private providers’ website terms of service deterred or prohibited data collection or because no competitor offered service that qualified as broadband. We also made the incidental finding that Comcast offered different prices and terms for the same service in different regions.

Here are their highlights…

  • When considering entry-level broadband service—the least-expensive plan that provides at least 25/3 Mbps service—23 out of 27 community-owned FTTH providers we studied charged the lowest prices in their community when considering the annual average cost of service over a four-year period, taking into account installation and equipment costs and averaging any initial teaser rates with later, higher, rates. This is based on data collected in late 2015 and 2016.
  • In these 23 communities, prices for the lowest-cost program that met the current definition of broadband were between 2.9 percent and 50 percent less than the lowest-cost such service offered by a private provider (or providers) in that market. In the other four cases, a private provider’s service cost between 6.9 percent and 30.5 percent less.
  • While community-owned FTTH providers’ pricing is generally clear and unchanging, private providers almost always offer initial “teaser” prices and then raise the monthly price sharply. This price hike in the communities we studied ranged between $10 (20 percent) and $30 (42.8 percent) after 12 months, both imposed by Comcast, but in different communities. Only one community-owned FTTH provider employed this marketing practice for a data-only plan. This exception was a student discount offered by the MINET network in Oregon.
  • Language in the website “terms of service” (TOS) of some private ISPs strongly inhibits research on pricing. The TOS for AT&T, Verizon, and Time Warner Cable (now owned by Charter), were particularly strong in deterring such efforts; as a result, we did not record data from these three companies.
  • While the United States has 40 community networks offering broadband FTTH service (many of them serving more than one municipality), we did not make comparisons with private competitors in 13 cases, either because the TOS prohibited data collection or because no competing broadband service existed in the community network’s home community.
  • We noted that Comcast varied its teaser rates and other pricing details from region to region. Our sample size was small; just seven of the communities we studied were served by Comcast. Understanding Comcast’s pricing practices and their consumer impacts across the United States would require much deeper study.
  • In general we found that making comprehensive pricing comparisons among U.S. Internet service plans is extraordinarily difficult. The U.S. Federal Communications Commission (FCC) does not disseminate pricing data or track broadband availability by address. Additionally, service offerings follow no standard speed tiers or definitions (such as the specifics of video or phone service bundles). We focused on comparing entry-level broadband plans in part because of these complexities.

They looked at two communities in Minnesota and this is what they found in terms of average cost per year over four years; it takes into account all fees and recurring cost:

In Monticello:

  • Monticello Fiber Network a 50/50 connection is $640.29
  • TDS Telecom a 25/10 connection is $763.03
  • Charter Spectrum a 60/4 connection is $678.63

In Crosslake:

  • Crosslake Communications a 30/20 connection is $1,030.40
  • Emily Cooperative Telephone Company a 30/30 connection is $1,067.65

It’s interesting to see the differences in those two areas. And to see that we really aren’t talking about apples to apples comparisons – especially when you account for upload and download speeds. Again to me half of the story here is the difficulty in getting the information. The National Broadband Plan paid lip service to gathering more standardized info on services and prices…

Recommendation 4.2: The FCC and the U.S. Bureau of Labor Statistics (BLS) should collect more detailed and accurate data on actual availability, penetration, prices, churn and bundles offered by broadband service providers to consumers and businesses, and should publish analyses of these data.

But that doesn’t seem to have happened. Think about the impact of the cost (or calorie) per serving info at the grocery store. Now image how nice that would be for broadband and how that would help us pinpoint real issues based on areas and technologies. Is the problem access or affordability (or something else)? And are there some providers who have been able to overcome challenges to provide affordable access in rural areas – how can we reward and/or emulate them in other areas. Because I know there are providers (public, private and cooperative) who are serving happy customers in hard to reach places.

Comcast Increasing Internet Speeds for Twin Cities Customers

Good news for some folks in the Twin Cities, according to Business Wire

Comcast today announced it is increasing the speeds of its Xfinity Internet service packages for existing customers in the Twin Cities area at no additional cost.

The speed increases will vary based on the Xfinity Internet customers’ current speed subscriptions, and the majority of customers will see an increase of 50 Mbps. New and existing customers can expect to experience enhanced speeds this month.

“In today’s fast-moving, always-on world, quickly connecting to the internet is more important than ever,” said J.D. Keller, regional vice president, Comcast Twin Cities. “These increases reflect our ongoing commitment to offer the fastest speeds to our customers and deliver a great experience anytime, anywhere.”

To get the increased speeds, most customers will simply need to re-start their modems when notified by Comcast that the new speed is available. Comcast will also notify customers who may need to upgrade their modems to receive the increased speeds. Those who own their own modems and need to upgrade them to receive the increased speeds will need to purchase a new one or can lease a new modem from Comcast.

Broadband prices hikes expected – but will that be from all providers?

Digital Music News reports…

At least three major ISPs have already announced significant price hikes for 2018.  News of the increases come just days after the FCC voted to roll back net neutrality protections. …

Just this morning, Karl Bode of DSLReports caught wind of numerous increases at mega-ISP Comcast.  But that is simply the latest in a string of planned increases by the likes of Cox, Frontier, and even DirecTV and Dish Network.

In all cases, these are increases for essentially the same services, with Bode noting that American will be stuck paying ‘significantly more money for the same service in the new year’.  In many cases, the changes are padded into existing bills, with most consumers failing to see the changes.

You can check out the article for specifics on the increases.

I’ve heard from other providers that they have no plans to increase rates. It will be interesting to see what happens. And now I’m going to plug the idea to crowdsource benchmark prices today to track increases – by asking folks to report what they currently pay for service from their provider. I heard from a few folks – but not many and not from customers of local independent and cooperative providers. Providers are welcome to send me the info too.

It would be nice to give a nod to those who don’t raise prizes and be aware of those who do.

Foundation for Rural Service hosts Youth Tour for kids interested in broadband

I learn about the Youth Tour from Paul Bunyan Communications. (More on that soon.) Apparently there’s a broadband camp for teens. Or as the Foundation for Rural Service puts it…

Every summer, the FRS Youth Tour brings together high school students from across rural America to visit our nation’s capital and learn about rural telecommunications. The tour provides a forum for teens to meet and interact with their peers from other rural communities, as well as, key legislative, regulatory and government figures. Since its inception in 1995, the youth tour has hosted thousands of students.

The event draws from member communities…

NTCA member companies can sponsor a student from their local community. FRS leaves the selection of the youth tour participant completely up to the telco. The program offers sponsoring companies an excellent public relations opportunity by increasing their connections with local schools and the community in the rural areas they serve.

NTCA member companies can also sponsor a chaperone to attend the Youth Tour. FRS relies upon the support of chaperones to assist us with ensuring that the students have a safe and productive experience. Serving as a chaperone is a wonderful opportunity for a staff member of your organization.

I learned about it from Paul Bunyan because they sent me a press release. Folks in their area might contact them for more info. Folks in other areas might contact their local provider to see if they have an y programs that might help get a kid to DC. (Or if other providers want to send me info I’m happy to post here.)

Here’s the info from Paul Bunyan

Paul Bunyan Communications 2018 Youth Tour Essay Contest

Chance for 16-17 year old high school students to win a free trip to Washington D.C

(Bemidji, MN) (January 3, 2018) – Area High School Students age 16 o 17 are encouraged to enter the Paul Bunyan Communications Essay Contest for a chance to attend the 2018 Youth Tour in Washington, D.C. June 2-6, with all expenses paid by Paul Bunyan Communications.

Students interested in attending the Youth Tour need to submit a short essay, no more than 500 words in length, on why they would like to attend the Youth Tour. Students must be 16 or 17 years of age and in high school with their parent/guardian a member of Paul Bunyan Communications Cooperative.

Entries can be dropped off at the Paul Bunyan Communications office in Bemidji or Grand Rapids, or they can mailed to:

Paul Bunyan Communications Essay Contest
1831 Anne St. NW
Bemidji, MN 56601

The deadline for entries is Friday, March 16.

The trip features a comprehensive overview of the telecommunications industry, including careers in telecom, the critical role telecommunications plays in rural America, and how legislative and regulatory decisions affect the industry.  The tour allows youth to meet with members of Congress who represent rural constituents.  They also participate in educational sessions about the Federal Communications Commission (FCC).  Students visit some of the nation’s most historic sites, including Mount Vernon, the Smithsonian Museums, and a beautiful night tour of our Washington D.C.

“We hope that by providing our youth with telecommunications services comparable to those found in urban areas, as well as exposing them to cultural and educational opportunities, such as the FRS Youth Tour, our youth will remain in and become active members in their rural communities,” said Brian Bissonette, Paul Bunyan Communications Marketing Supervisor.

The Foundation for Rural Service is dedicated to informing and to improving the quality of life throughout rural America.  Each year, it organizes the Youth Tour, designed to educate rural youth about the telecommunications industry and the federal political process.  The FRS is a subsidiary of the NTCA-The Rural Broadband Association of which Paul Bunyan Communications is a member.

This is the 22nd consecutive year that Paul Bunyan Communications has participated in sending a local high school student to the Youth Tour.

 

Help crowdsource a benchmark to measure impact of Net Neutrality Repeal

Happy New Year! It’s a good day for looking back and in the broadband world, the topic of 2017 was Net Neutrality. Many are concerned that repeal of Net Neutrality will lead to higher prices for consumers and/or tiered pricing for premium content. Many providers say that they will continue to provide the same level of service they always have; nothing will change to the services or prices as a result of the repeal.

New Year is also a good time to look forward. Set goals. Assess. So I want to propose that instead of stepping on the dreaded scale to set goals – that we all check out broadband prices in our respective areas. That will set a benchmark for us to measure any impact of Net Neutrality.

I started by checking out services in my zip code. I found the list of providers on the Office of Broadband Development interactive broadband map. There are nine providers/services in my area:

  • AT&T (Mobile)
  • CenturyLink DSL
  • CenturyLink (Fiber)
  • Comcast (Cable)
  • Hughes Net (Satellite)
  • Sprint (Mobile)
  • T-Mobile (Mobile)
  • Verizon Wireless (Mobile)
  • ViaSat (Satellite)

Telecom changes will only directly impact CenturyLink but I checked pricing for cable and satellite as well. While I know in some areas, people use mobile option for home access, that would be pretty rare in St Paul so I didn’t check those prices. (That being said, I have a mobile hotspot but not for primary home or business use.)

I tracked the info I could for each services based on information from the provider websites. So, if they didn’t specific up or download speed, I didn’t either. If they mentioned a restriction, so did I. I posted the best deal I could find with minimal research.

Here are the options for my address through CenturyLink:

For Internet Only:

  • Gig – $85/month
  • 100 Mbps – $65/month
  • 40 Mbps – $55/month

Bundle of Internet, phone and TV (basic Prism)

  • Gig – $194.99/month
  • 100 Mbps – $174.99/month
  • 40 Mbps – $164.99/month

Here are the options for my address through Comcast/Xfinity:

For Internet and TV (Channels – I chose fewest channels)

  • 200 Mbps (down) – $69.99/month (with one year agreement)
  • 100 Mbps (down) – $59.99/month (with one year agreement)
  • 55 Mbps (down) – $49.99/month (with one year agreement)

Here are the options for my address through HughesNet:

  • 25 Mbps for 50 GB data – $99.99/month (requires 2 year agreement; if you surpass 10 GB your connection speeds will be reduced)
  • 25 Mbps for 30 GB data – $79.99/month (requires 2 year agreement; if you surpass 10 GB your connection speeds will be reduced)
  • 25 Mbps for 20 GB data – $59.99/month (requires 2 year agreement; if you surpass 10 GB your connection speeds will be reduced)
  • 25 Mbps for 10 GB data – $49.99/month (requires 2 year agreement; if you surpass 10 GB your connection speeds will be reduced)

Here are the options for my address through ViaSat/Exede

  • 30 Mbps (down) for unlimited data – $150/month ($100/month for first 3 months)
  • 25 Mbps (down) for unlimited data – $100/month ($70/month for first 3 months)
  • 12 Mbps (down) for unlimited data – $70/month ($50/month for first 3 months)
  • 12 Mbps (down) for 10 GB – $50/month ($30/month for first 3 months)

BUT on Unlimited service plans, after 150GB of data usage, they may prioritize your data behind other customers during network congestion.

If you want to check your own area and either send me your results atreacy@treaycinfo.com or post them in the comments below that would help create the larger benchmark. You don’t have to check all of the options in your area – just starting with your current provider would be great. Next year we can see how things compare.

Guest Post: Rural Minnesota Provider’s view on Net Neutrality

I have another guest post today from Bill Eckles, CEO of BEVCOMM, a fourth-generation, family owned telecom/broadband provider headquartered in Blue Earth. They serve more than 20,000 homes over 1,500 square miles. Here is what Bill had to say about Net Neutrality…

There has been a lot of speculation about what large ISPs will do now that the network neutrality regulations from 2015 have been repealed.  Unfortunately, much of the media coverage is lumping all ISPs together.  It doesn’t seem as if anyone has bothered to ask what the small rural ISPs will do.

In 2015 when FCC Chairman Wheeler pushed to classify all ISP’s under Title II regulation, I fielded many calls from both customers and local media.  The questions were nearly always the same.  How will these new regulations affect BEVCOMM?  The answer was easy.  The new network neutrality rules had absolutely no effect.  BEVCOMM was already regulated under Title II and BEVCOMM had always followed the principals of network neutrality.  Every other rural service provider I knew had the exact same answer as I did.

The FCC now, under Chairman Pai, has unclassified ISPs under Title II regulation which has the effect of ending network neutrality rules.  Once again, I’m taking the same questions from customers and the local media asking about the repeal of network neutrality.  Once again, the answer is easy.  The repeal doesn’t change anything for BEVCOMM.  Nor would I imagine it will change anything for the other rural service providers.  BEVCOMM and other rural providers have always followed the principal of network neutrality and, as far as I know they, are all planning on continuing to follow the principals of network neutrality.

BEVCOMM doesn’t block internet traffic.  BEVCOMM doesn’t enter into contracts giving one company’s content priority over another company’s content.  BEVCOMM isn’t unique. We are just like the other rural ISPs.  Our focus is on providing the best customer service possible.

Guest post: MN Telecom Alliance’s Position on Net Neutrality

I’m pleased to share a guest post today from Brent Christensen, President of Minnesota Telecom Alliance (MTA) on their position on Net Neutrality. (MTA is a trade association that advocates and represents the interests of more than 70 small, medium and large companies that provide advanced telecommunications services like voice, data, wireless video, and high-speed Internet access to Minnesota’s metropolitan and rural communities.)

For the past several months, there have been numerous stories and social media posts raising concerns over the FCC’s pending Open Internet Order (Net Neutrality). Many of the stories are grossly inaccurate and misleading and suggest the internet will come to an end or become a toll booth for payments from everyday users.
The present Commission voted Thursday, Dec. 14, to revise a prior Commission order dating back to 2015. The 2015 order gave the Commission the authority to regulate the internet using what is known as Title II, or “telephone-era” regulation. Title II gave the government sweeping latitude to regulate internet traffic, prices, privacy and other processes. Those regulations ONLY applied to Internet Services Providers (ISPs) like MTA member companies and not to internet content providers that don’t provide network services, like Netflix, Facebook, Google, ESPN and others, which also are a significant part of the internet ecosystem and the consumer’s overall experience.
The Minnesota Telecom Alliance supports an open internet that allows customers to access the content of their choosing from the device of their choosing. We believe these standards should apply, regardless of the type of Internet company providing the services.

We look forward to working with the FCC and lawmakers to ensure the internet experience for consumers and businesses, as well as the exchange of internet traffic between providers, remains positive and beneficial to all.

MTA’s Position on Net Neutrality

The Federal Communications Commission’s (FCC) proposal to roll back the 2015 Open Internet Order (OIO) has generated widespread debate.  Fact is, it’s complicated.

Consumer Protection:  The principles of network neutrality are that Internet providers should not block access to lawful content, throttle traffic or engage in discriminatory pricing schemes.  A related theme is protection of consumer privacy (i.e., Internet providers should not sell or market consumers’ personal information).  MTA member companies have not and do not engage in discriminatory blocking, throttling or discriminatory pricing regardless of the presence or absence of net neutrality rules.  MTA members also protect their customer data and do not sell or market personal information already protected by existing state and federal law.

Title I vs. Title II:  Title I of the Communications Act of 1934 (The Act) (the law that provides jurisdiction to the FCC) applies to advanced “information services.”  When updating the law in 1996, Congress intended to keep new information services relatively free of regulation.  Title II of the Act governs legacy telecommunications services and subjects them to “legacy” common carrier regulations.

Consumer broadband services prospered as “information services” under the “light touch” Title I statutory framework until 2015, when the FCC for the first time applied network neutrality rules under Title II to these services.

The proposed FCC Order restores broadband regulation to pre-2015 status.  Oversight of retail broadband would return to the Federal Trade Commission (FTC), which has primary authority over antitrust enforcement and consumer protection matters with respect to other mass-market services.

Regulatory (Dis)Parity: The current OIO rules apply only to retail broadband Internet Service Providers (ISPs).  Other dominant players in the Internet ecosystem, such as Netflix, Google, Amazon, Facebook, and others are not subject to FCC rules. The new rules introduced uncertainty into market decisions regarding new services and products that could be offered by ISPs.

This disparity is confusing for consumers – and potentially harmful.  For example, Google was fined $2 billion this year by the European Union for blocking access to its search engine unless consumers paid discriminatory prices.  With its Android operating system, Google is perhaps the world’s largest telecom provider.

Meanwhile, Google and Amazon are in a trade dispute over carrying one another’s content.  Public Knowledge, a consumer watchdog organization, said, “Google is setting a disappointing precedent by selectively blocking customer access to an open website.”  Amazon and Google ‘are putting consumers in the middle of a corporate battle between the two technology giants.”  (Communications Daily 12/8/17)

Privacy: The FCC’s 2015 OIO rules presented the prospect for new heavy-handed, privacy regulations that would have applied only to retail broadband ISPs.  However, the fact is that “edge” providers like Google and Facebook collect and market massive amounts of consumer data subject only to FTC oversight of their disclosures regarding use of such data.

As FCC Chairman Pai recently said, the role and responsibility of edge providers in promoting net neutrality must not be overlooked.  “They might cloak their advocacy in the public interest,” he said, “but the real interest of these Internet giants is in using the regulatory process to cement their dominance in the Internet economy.”

Ex ante vs. ex post regulation: A recent blog in Reason.com put the net neutrality debate in perspective.

“The debate has never been over “regulation” vs. “no regulation” of ISPs. Rather, it’s a question of whether it is more appropriate for an oversight body to observe market activities and intervene when foul play is suspected, called “ex post regulation,” or whether a beefed-up precautionary regulator should preemptively prohibit new service innovations until private bodies can prove them to be in the public interest, known as “ex ante regulation.”  (Reason.com Dec. 5, 2017)

A New Framework:  The 2015 OIO tried to fit a square peg in a round hole.

We need common rules of the road that apply evenly to all players in the Internet ecosystem.  The FTC can and will guard against unfair business practices by all those that interact with consumers, and it can and will enforce consumer privacy—it has already brought over 500 privacy enforcement actions, including some against both Internet Service Providers and edge providers

However, as a technical expert in network interoperability and connectivity, the FCC must continue to play an important but targeted role in regulating wholesale transactions governing interconnection among operators in the broadband marketplace.  The FCC also will be needed to ensure continued investment in our nation’s broadband infrastructure and to close the digital divide pursuant to its universal service mandate.  Indeed, the way we pay for and support universal broadband infrastructure is broken.

In 2017, Google and Facebook alone are expected to generate over $100 billion in advertising revenues; yet they contribute nothing to the universal service mechanisms that support the rural broadband networks they use to reach their customers.  Imagine how much more broadband infrastructure could be deployed sooner and farther if these operators contributed their fair share to cost of building the information highway.

Whether it’s Title I or Title II, the FTC or the FCC or some other regulatory construct, the inextricable role of the Internet in our lives calls for common rules of the road to guide the behavior and interaction of all broadband and edge providers in a rational, ex post regulatory environment.

We support bipartisan Congressional action to permanently preserve and solidify net neutrality protections for consumers and end the cycle of regulatory ping pong.