The Nation's Telcos Are Hemorrhaging Customers Because They Refuse To Upgrade Their Networks
from the don't-build-it-and-they-won't-come dept
So we've noted for a while how despite all the hype surrounding next-gen wireless and gigabit fiber builds like Google Fiber, vast swaths of this country are actually facing less broadband competition than ever before. That's in large part thanks to the nation's phone companies, which have effectively given up on upgrading their lagging DSL networks at any real scale. One net result is millions of customers paying an arm and a leg for sub 6 Mbps DSL service that doesn't even technically meet the FCC's new standard 25 Mbps definition of broadband.
And it's not changing anytime soon. Verizon has all but frozen next-gen upgrades as it shifts its focus to gobbling up failed 90s internet brands to help it sling video advertisements at Millennials (poorly, we might add). But smaller telcos like Frontier, CenturyLink and Windstream have similarly been losing broadband customers hand over foot as they flee to faster cable competitors. Even Wall Street, which has historically and myopically disliked putting any money back into broadband networks, has started to take notice, resulting in the nation's telco stocks taking a precipitous dive in recent months:
"Shares in the wireline ILEC/RLEC space (CenturyLink, Frontier, Windstream) have endured the worst three consecutive quarters in industry history, with shares plummeting an average of -20% in 4Q16, -21% in 1Q17, and -24% in 2Q17 (we note another -5% in 3Q17 thus far), mostly from Frontier and Windstream as CenturyLink shares are being supported by the Level 3 acquisition,” Cowen said in a research note."
It has gotten to the point where some Wall Street analysts have even gone so far as to *gasp* recommend that some of these companies actually upgrade their networks if they want to remain relevant. Ironic, since it was Wall Street's relentless focus on short-term gains and avoiding these necessary network upgrades that help put these companies in this position to begin with:
"Jennifer Fritzsche, senior analyst for telecommunications services at Wells Fargo, doesn't think Frontier can actually right said ship without offering consumers a better broadband product.
"It is hard to fix a problem just by cutting costs when your competition (cable) is only pressing its foot heavier on the capex and fiber pedal," Fritzsche said.
But instead of upgrading the networks they already have, many telcos are trying to please Wall Street by focusing on growth for growth's sake. Frontier recently gobbled up Verizon's unwanted DSL customers in California, Texas and Florida in the belief that bigger automatically means better. But Frontier not only saddled itself with massive additional debt and outdated copper landlines Verizon had neglected for years, but it bungled the acquisition so badly it actually forced many of these subscribers to flee to cable even faster. Focusing on growth for growth's sake now has Frontier teetering on the verge of bankruptcy.
But the more problematic impact of all this is that across countless markets, consumers looking for current-generation broadband often only have one option: cable providers. These cable providers are on the cusp of enjoying a greater broadband monopoly than ever before, resulting in less incentive than ever to shore up their historically awful customer service, and only encouraging their slow but steady deployment of arbitrary and unnecessary usage caps. Combine that with the Trump administration's intense focus on eliminating all consumer protections in the telecom space, and it shouldn't take a tea leaf reader to see how this could potentially end very badly for consumers and competitors alike.
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Filed Under: broadband, competition, dsl, investment, telcos, wall street
Companies: centurtylink, frontier, verizon, windstream
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DSL - damned slow links
Ah for the good old days of pony express and data delivered on pigeon-carried USBs.
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If American industry had always had that attitude, we'd be a continent of nothing but third world countries today.
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There's always some article like that. In Canada, there's 50 Mbit/s DSL; in the UK, 80 Mbit/s. Manufacturers are always promising more: gigabit speeds have been achieved in labs, probably only with extremely short distances. But telcos have to put new equipment in their cabinets for that, which US telcos are not doing (do they even have remote nodes? 6 Mbit/s suggests they're going straight to the CO).
Fibre equipment is getting cheap, and going straight to that would be cheaper in the long term... which as we've established, they've stopped thinking about.
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Be it Germany or the US: ISPs need to die. Mesh networking is the way to go. Unfortunately the bullies and profiteers are standing ready to smash down any efforts.
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I'm glad I get 110% of my contract speed at any time though :/
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Why not high-density areas? I'm sure it's not easy, latency being an obvious difficulty, but more mesh-routers mean more paths through the network and much more bandwidth; and technologies like MIMO and beamforming (and maybe even lasers) can reduce interference.
Peer-to-peer technology can help in other ways, like ensuring popular data is cached throughout the network. We don't need everyone mesh-routing to California to get the exact same videos.
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Assuming that you mean radio based mesh networking, the assigned bandwidth has to be shared between all the nodes that can see each other. Also, unless there is a high density of connection to the outside Internet, the actual connections to the Internet end up carrying traffic for hundreds to thousand of subscribers.
Most of the time, you and your neighbors WiFis work fine because they cannot see each other, while with mesh networking you want to see and connect via four or more neighbors, which also means you are sharing bandwidth. If you are also relaying for neighbors,that is twice the bandwidth consumption, as you both receive and transmit packets going both ways.
Mobile phone networks use careful planning of frequencies used, based on hexagon cells, so that there is always at least one cell on a different set of frequencies between two cells using the same frequency. In high density areas, they just use smaller cells, with lower antenna placement, and lower power to increase capacity. Also each cell is directly connected by wire or fiber to the rest on the Internet, so it is NOT a mesh system as far as traffic routing is concerned.concerned.
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Not entirely true, with good enough beamforming. In theory anyway, but such things do become more practical over time.
Tor works reasonably well without a ton of nodes, and only a minority are exit nodes. It works even better when you don't need to exit the network, and we could try to do the same with a mesh network. Links across unpopulated areas (oceans...) will remain a problem for non-cacheable uses, but those links were always less of a problem than the consumer links.
Those packets go in different directions, so could go across different, minimally-interfering, antennas.
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Beam forming systems are not that helpful in high population density areas, as how many houses are in a narrow beam pointed to a neighbors house down the line of a street.
The density of connections to nodes outside the local mesh has to be considered. The lower the ratio of such nodes to the nodes in the mesh, the more the network becomes to look like a set of star networks linked to a central node, and the more the bandwidth of that node comes to dominate the networks bandwidth capacity. Also that requires management of connecting nodes, and oh look you have just started to build a mobile phone network.
I am not saying that mesh networking has no real uses, it does in low population density areas. I am saying that it, and satellite have severe restriction when used in high population density areas, because of the problems of forming enough isolated beams to serve all the potential users.
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There you go. You fulfilled the statement.
Please how it CAN be done. Enough with the reasons won why it cannot.
Provide solutions, not more obstacles.
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"Unfortunately legislatory bullies are teaming up with the ISP profiteers to create obstacles for independent projects, of course with the goal to smash down those efforts".
The solutions are already there. In Germany it's called Freifunk, creating mesh WiFi networks. About the US I'm not well informed. There was the Free Network Foundation, but their website is defunct (looked yesterday).
If you get struck down, you stand up, adapt to the new conditions and continue the efforts. The alternative is to perish.
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Fiber optic, on the other hand, can run pretty darn far. More importantly, fiber only solves the biggest issues (distance to the central office or DSLAM) if you have fiber to the house.
Fiber to the neighborhood seems like a good idea, but that requires building remote buildings to terminate the fiber and distribute to customers. It also doesn't really solve the issue of houses being spaced far apart, as the restictions of the remaining copper would still be in the way.
More of these companies appear to be looking towards wireless as a solution. Rewiring their customers to fiber just doesn't seem to be in the cards.
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Fiber optics don't need a building for every split/termination, just a small box. If you aren't familiar with the tech, google for fiber optic junction box. They're really not very big at all, and fairly cheap! Not that you're ISP won't charge thousands if they need to put one in. ;)
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Every feed box requires to be maintained. The 6000 meter limit means that if there are only 2 or 3 hours on a given run, then you have to consider those costs covered by only 3 potential subscribers.
Also, it would not be very functional to provide copper wire connectivity to everyone in the town back to a single CO, as the distances (when you consider the route the wires must take) might require multiple sections. Modern networking basically says that you run from your CO to a remote point, install a small switching building, and have all of the local connections terminate there. At that point, they are turned into IP traffic, plugged into a router. It's way easier and cheaper to connection router to router with a single fiber optic run, which can generally go the full distance for most local phone companies without needing any boosts.
There is also the question of maintenance. Installing and maintaining all the cable isn't anywhere near as easy as maintaining a fiber to the neighborhood setup.
Fiber optic is generally the same. The biggest advantage is that you can splice and divide the fiber with junctions and you can do this over a much longer distance. So your 6000 meter DSL can become 20 miles or more.
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so how fix this mess ?
What would be Techdirt's ideal solution to this problem?
If TD could wave a magic wand and install the 'ideal' people in full control of FCC/Congress/Presidency/SCOTUS ---- then exactly what should those good people do to solve this problem?
(it often helps with difficult problems to work backwards from a postulated ideal solution.... to figure out the necessary process to get there)
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Re: so how fix this mess ?
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Re: so how fix this mess ?
Appoint members of state and municipal governments, and consumer advocates, in advisory positions, not just industry representatives.
Congress: Explicitly allow states and municipalities to set up their own competing ISPs, and preempt any state laws to the contrary. Create incentives for telecoms to expand and maintain their networks, and take away government funds from ones that don't.
The courts: Break up the monopolies. If there is only one owner of last-mile broadband infrastructure in an area, then separate it from the ISP that provides service over that line. Penalize companies that breach contract.
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huh?
Yep... the sky is falling, TD went total anarchy over here!
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Re: huh?
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TD regulars makes the anarchy claim against those that argue for Free Market, instead of "more regulation".
I guess its okay for you guys to make them, but not me, even when I am being sarcastic about it for a reason.
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"Yep... the sky is falling, TD went total anarchy over here!"
Was fulfilling that role. It seems I have overestimated the crowd around here.
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And yet, for reasons that elude me, you keep insisting because we feel that there was market failure in this one narrow area, that we always support regulation and never a free market.
So weird. It's almost like you don't care about truth and just want to be trollish.
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Essentially, your desire to have online competition in video and other high bandwidth areas means that you want the ISPs and such to have their hands tied by regulation. You want to create the level online playing field regardless of cost or effect. I can udnerstand your point of view.
However, NN is fixing things from the wrong end. The real solution would be mandated breaking up of the media conglomerates who have turned themselves into content providing verticals. Getting the neutral ISPs away from the not-so-neutral content providers and distributors would be a big step in the right direction.
Your competition issues are inherent in the current ownership situation. UNtil you change that situation, everything else will be King Canute situation. The tide will find a way around the rules and we will be back at square one.
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Tech isn't whole story
Is cellular a true broadband competitor? Not really, not for me not for you. But for the teleco they still lose customers to them for phone and internet. Telco loses customers to Cable Co. phone, internet, video. Even though Cable Co. takes weeks to fix issues compared to hours that the telco I worked for. Basically same cost to build network with less customers to spread cost over.
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That is a real funny thought, because any cable company customer, if they had a choice, would dump their current provider.
I have Cablevision in New Jersey. Verizon isn't running FIOs in our town, so it is either Cable, DTV or phone company Internet, not much of a choice.
Cutting programming/phone service doesn't help much, because then the Internet service price goes up. Using a mobile device isn't a reality, their data charges are even higher.
Only way to change this is with Muni-Broadband, but that isn't likely to happen, another option is to privatize the cables and let others use it, but I don't see anyone deciding to run cable even if they can get free access.
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People aren't signing up for that these days. Their market is shrinking and it's going to drop off pretty fast. The only way to fix this is to start laying down Fiber. Offer good prices for service and most importantly, Good customer service and people would flee the cable company's!!! Sticking with doing nothing means them going out of business in a number of years. Most of these company's if they keep doing what they're doing will be gone in 20 years at most.
Wireless Networks is not a solution. It's the cheap way to go, but SUCKS!!! We had it here at work for many years and it was really SSSLLLLLOOOOWWWW. But it was the only thing we could get at the time until Comcast finally ran a line into our building. A really large wire!!! Now we have 100Mbps service. So much faster then before. Though I have 200Mbps service at home currently.
The wireless was like 1.5Mbps speed. Had the Dish on the roof pointing to their antenna. The only choice is going to be Cable IF you're luckily. Kind of funny to say as customer service stinks. Prices stink! No real competition and it's just getting worse.
I hate saying it, but towns and city's will have to create their own Networks. I'm not a fan of Government doing it, but if the Private market is going to do nothing, there's not a whole lot of choice. Yet the Cable company's will fight that.
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Except that big telco has written and passed laws in mnay locales to stop that exact thing.
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If there's only one, it's not an option.
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