If there's one theme that's emerged in the two years of feedback CNET readers have given to On the Dot, it's this: you crave broadband and just can't get enough of it. And in some cases, would-be broadband subscribers can't get any of it. It's either dial-up or nothing, or something hobbled to 768Kbps, a speed that people in most other Web-savvy countries would spurn as insultingly slow. England, for example, has almost universally available DSL at 2.3Mbps to 8Mbps for the equivalent of $28.45 per month, taxes included. How does your service stack up to that?
To someone like me in the suburb of a biggish U.S. city, the choice isn't so bad. I have my pick of three different broadband providers, ranging from 1.5Mbps DSL to 8Mbps cable offerings, without even looking into satellite service. But I'm one of the lucky ones. So what is it that's narrowing the options for broadband? The Web has been around for more than a decade now, and the double whammy of market forces and government interests have been pushing toward a goal of Internet for all. Theoretically, the revenue generated over the past decade between the phone companies and the cable companies, along with the fierce competition between them, should have fueled some serious infrastructure development. Oh, and the billions of dollars in the Universal Service Fund (USF) could have helped. In 1996, the Telecommunications Act expanded the mandate of the 62-year-old USF to include the provision of Internet service to schools, libraries, and "high-cost" areas.
The fund your tax dollars built
The billions of dollars involved easily could have established fiber-optic lines in areas where broadband didn't exist, bought switches, created a billing and customer service infrastructure, and started bits flying across the ether.
The USF could have been tapped to fund broadband access to areas that were too expensive to be profitable to the telcos. In fact, given that between 1999 and 2005, no less than 4 percent (and up to 11 percent) of all the money spent on long-distance phone calls in the States was going into the Universal Service Fund, there should have been enough to bankroll all the rural fiber-optic networks that any out-of-town development could need. Instead, according to Bruce Kushnick
of the consumer advocacy group Teletruth
, about 60 percent of that money was going to supporting communications to high-cost areas.
The billions of dollars involved easily could have established fiber-optic lines in areas where broadband didn't exist, bought switches, created a billing and customer service infrastructure, and started flying bits across the ether. As it is, well, that hasn't happened.
So how come little villages in England that don't even have cable television can get 2.3Mbps DSL service, when CNET readers in good-size U.S. towns are stuck with dial-up?
As far as I can see, it was incredibly poor management of the USF (a problem with government) and short-sightedness on the part of the broadband providers (a problem among corporations). The result is that we, the consumers, are stuck with spottily available broadband at underpowered data rates. And basic features that have been promised for two or more years, such as so-called naked DSL--a service that doesn't require a phone number--and high-speed consumer fiber-optic service are still available in only a few areas.
The corporate-greed factor
A price hike is fair enough, though no customer likes them, but sneaking a surcharge in under the wire looks like a thin disguise for a price hike--and a case of dishonest billing.
The only thing that the bigger broadband companies seem to have done with the Universal Service Fund is complain about it. Verizon Online has routinely tacked on a varying rate of surcharge onto its customers' bills for years, sending out e-mail explanations so mealymouthed that their own spam filters sometimes catch them
. And the top three broadband providers have been lobbying for the FCC to redefine the term "interstate communications" to exempt broadband providers from the fee.
And guess what? As of August 14, 2006, these providers succeeded. You'll no longer see a surcharge of a couple of dollars on your broadband bill. (You may have to pay extra for Internet telephony
and phone cards, but that's a separate issue). But two of the top three DSL providers saw this as a great chance to soak their customers for a little bit extra. Within days, Verizon and BellSouth
announced that they would continue to surcharge their customers a couple of bucks per month to cover their expenses. Verizon described the move like this, in an e-mail to 5.7 million subscribers:
Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds.
Verizon's new surcharge was a nickel or two less than the most recent USF surcharge; BellSouth's was exactly the same amount. And spread out over 5.7 million Verizon subscribers, the company was planning to take in an extra $11 million or so every month to cover expenses it has had all along. This doesn't sound entirely right to this consumer’s ears. A price hike is fair enough, though no customer likes them, but sneaking in a surcharge under the wire looks like a thin disguise for a price hike--and a case of dishonest billing.
Instead of playing silly power games with each other, these government bodies and monopolistic corporations should be doing what they were designed for: serving the people.
The FCC thinks so, too. When BellSouth and Verizon made their announcements, the FCC began beating its shield and threatening to send a nastygram if the companies didn't back down. The letter, when it was sent, questioned whether the surcharge was "consistent with the obligations set forth in the commission's Truth-in-Billing rules." Both companies backed down. BellSouth caved
before the FCC sent out its letter; Verizon followed suit
four days later. Both of them trotted out the convenient lie that they had "listened to their customers" and changed their minds. The FCC chairman Kevin Martin issued a statement that he was pleased with their decision. Quit bickering; start serving
Well, bully for Kevin Martin. I'm not pleased with the situation at all. Instead of playing silly power games with each other, these government bodies and monopolistic corporations should be doing what they were designed for: serving the people.
DSL providers: Stop focusing on your legal contracts with your customers. Yes, we’re paying you to provide 768Kbps or 1.5Mbps service. But we’re mandating you to boost the infrastructure so that in two or three or five years' time, you’re able to provide us with 8Mbps and beyond at the same price.
FCC: Start looking beyond the corporations' infractions of minor customer service rules and on to the deeper problem. You’ve been taking billions from these companies for decades now. Start creating programs so that they can tap into the fund and use it for the intended purpose.
Universal service sounds good, but it starts with service from the two big bodies we’ve been paying all these years. Out here in consumer land, we can’t wait to have it.
If Matt Lake added a $1.53 surcharge to his column, would the FCC allow it? Is his information feed a few bits per second short of dial-up? Should he apply for his immigrant visa to Utopia now or later? Let him have it in the feedback section below.