Want To Know Why U.S. Broadband Is A Bad Joke? Take a Close Look at Frontier Communications
from the ill-communication dept
In telecom policy circles, there's an army of "experts" who twist themselves into pretzels trying to pretend U.S. telecom is a healthy, normal, vibrant market. Blinded by partisan loyalties, sector financial links, or ideologies embedded decades ago, they're incapable of even acknowledging that Americans pay too much money for spotty, substandard service with historically terrible customer support. They're even less likely to acknowledge the corruption, regulatory capture, and lack of competition that made this dysfunction possible. If it is acknowledged, it's downplayed to a comical degree.
As in the Ma Bell days, at the heart of U.S. broadband dysfunction sits phone companies. Providers, that have long refused to upgrade their aging DSL networks despite millions in taxpayer subsidies, lobby for state laws that ensure nobody else can deliver broadband in these neglected footprints either. These are companies that have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising, then, that many telco DSL customers are fleeing to cable, assuming they even have a second broadband option.
This dynamic often results in some almost comedic dysfunction.
Like in West Virginia, where incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. The graft and corruption in the state is so severe, state leaders have buried reports detailing the depth of the problem, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest.
But it's not just West Virginia. Frontier has since been under investigations from New York to Minnesota for failing to upgrade or even repair its aging network, at points putting human lives at risk. The company has also been repeatedly under fire for blatantly ripping its users off. For example, it has been charging its customers a rental fee for modems they already own. Very rarely do you see state leaders stand up to the company. And you'll certainly never see any kind of substantive pushback by the current, industry-captured FCC.
Customers who can leave (usually to the other end of the duopoly, Comcast), have been fleeing whenever possible, resulting in a looming bankruptcy by the company. In a report to investors this week we're only now starting to finally see something close to truth from the company as it tries to own up to its incompetence. Frontier had apparently tried to redact much of the report detailing the scope of network neglect, but appears to have bungled that as well:
"For example, one redacted sentence says that "Frontier WV's copper network has at least 952,163 connection points that are susceptible to moisture, corrosion, loose connections, etc. that may cause interruptions of service to customers."...The failed redaction of the number of connection points was coupled with failed redactions about the age of the network. The consultant firm's report said that 46.8 percent of Frontier's West Virginia network is between 36 and 47 years old. Both the percentage and the numbers of years were unsuccessfully "redacted" by Frontier.
The report makes it clear that the company probably shouldn't have engaged in mindless M&As, acquiring unwanted aging phone networks from AT&T and Verizon in "growth for growth's sake." Many of those deals were completely bungled and saddled the company with unneeded debt. Most should have been blocked by regulators and lawmakers who were too busy kissing the company's ass. Frontier also should have invested money back into the network to build a stronger company and retain subscribers, instead of engaging in repeated stock buybacks.
There are two reasons the company didn't do better on these fronts. One is sniveling, feckless, U.S. regulators and cash-compromised state and federal lawmakers, who rubber stamp every merger thrown on their desks, and refuse to hold politically powerful monopolies accountable. The other? A lack of competition across most of Frontier's territories:
"So why would a company like Frontier not immediately hit the upgrade button and start a massive copper retirement-fiber upgrade plan to keep the company in the black? In short, Frontier has survived chronic underinvestment because of a lack of broadband competition. Nearly two million Frontier customers have only one choice for internet access: Frontier. For another 11.3 million, there is only one other choice – a cable company that many detest. Frontier has enjoyed its broadband monopoly/duopoly for at least two decades. So long as its customers have fewer options, Frontier is under less pressure to invest in upgrades."
There were ample opportunities for state and federal leaders to step in and correct these problems, while embracing pro-competition policies that minimized the need for government involvement. Instead we let a regional monopoly dictate state and federal policy, and now act surprised when the end result is a smoldering dumpster fire. Granted as Frontier stumbles toward bankruptcy most of its debt will be wiped clean, nobody in the U.S. will learn anything from the process, and a universe of "very serious telecom policy thinkers" will continue to turn a blind eye to the entire mess as history repeats itself.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: broadband, cable, competition, corruption, dsl, fcc, promises, subsidies, west virginia
Companies: frontier
Reader Comments
Subscribe: RSS
View by: Time | Thread
We all forget...
We all repeatedly forget that the people running Frontier (and it's peers in similar situations) are personally making out like a bandit.
Frontier would be profitable despite the government, if profitable for the company was profitable for the CXO's. The CXO's golden parachutes, driven by institutional investors, and the cronyism amongst CXO's nationally (globally???) will ensure that the Frontier CXO's will reap huge rewards financially, then move to another company with even more rewards.
This scenario has happened under both Republican and Democrat administrations and Congresses. Neither party has had the backbone to do what is needed. Therefore, all those who say that "a vote which is not for either Republican or Democrat is wasted" is a part of the problem also!
[ link to this | view in chronology ]
Re: We all forget...
Yes it is. But until we change the system to make it either no parties, or in some other way where third or fourth party votes are not meaningless. Those involved with creating our republic argued about whether to have political parties, or not. Well including them was the choice, and the experiment has run. We now have conclusive evidence that that experiment failed.
The problem we now face is that the duopoly of parties are so entrenched (and in position to heavily impact any changes) they will protect their incumbency to the last vestige of power they can muster. Another help will be to remove money from politics, but there are ongoing, paid for incentives that prevent that action as well.
We need people with integrity in place before any appropriate changes can happen, or we need to find another way to refresh the tree of liberty.
[ link to this | view in chronology ]
Re: Re: We all forget...
For the naive:
[ link to this | view in chronology ]
Re: Re: We all forget...
A minor party vote is not meaningless if at least one of the following:
a) minor party vote causes a run-off among the major parties. Apart from increasing turnout, the best way for a run-off candidate to win is to engage the minor party candidate and their voters.
b) if you truly don't care which toady wins from the major parties, use your minor party vote to help make the rest of the public aware of your disaffection with the candidates. If everyone who is dissatisfied with the major parties does this, at the very least you'll have a better idea of where the major parties are most vulnerable.
Also, if you're not in a swing state/district, your vote is wasted anyway. Might as well YOLO.
[ link to this | view in chronology ]
Re: We all forget...
Elections..
IS there a 'No' vote?
A None of the above?
Many people would LIKE a choice, but we really dont get one.
And thats only part of the problem. Is 1 person responsible(as president or governor)?
NO. The president has about 500 people to Persuade to 'do the right thing'.
I know its fully possible NOW, to get a Fully report on Each and every person we have Hired, to be responsible for our states and our nation. Sooo, what is there to do?
Do we have to print it out and Show everyone what is happening? By Snail mail? Read every Bill, being passed and transcribe it into Simple english and 1-2 paragraphs that arent PAGES long. And send everyone a copy?
I wonder how long it would take to get Bought out, Paid off, or threatened. The dream that Anyone would let this appear/happen is abit thin. It was tried in the past, and there Was a Business that sent this info out, at an Excess of $$$ to those that could afford it.
Good luck folks.
it would be nice in the future, if facts were part of our lives.
[ link to this | view in chronology ]
US broadband is a bad joke because Richard Bennett keeps coming up with shitty excuses to keep the status quo.
[ link to this | view in chronology ]
How are the monopolies allowed?
How are these areas allowing only one broadband provider??
[ link to this | view in chronology ]
Re: How are the monopolies allowed?
Duplicating infrastructure is expensive, and leads to either local area monopolies, or a lot of idle infrastructure for the company out of favour. A more pertinent question is why does the US fail to regulate the infrastructure providers and enable competition at the level of services over that infrastructure; which is what most of the rest of the world is doing, and without regulatory capture.
Look to political patronage via appointments to regulatory agencies along with campaign contributions for the causes of the US woes.
[ link to this | view in chronology ]
Re: How are the monopolies allowed?
Most utilities are government-granted monopolies.
The argument was that utility infrastructure is so expensive to build that, by eliminating the cost of duplicate infrastructure, a monopoly would be a less expensive choice.
Many telecom arguments focus on the 'right' of companies to pursue a profit unfettered by government limits and oversight, ignoring that they are protected from competition by the government-granted monopoly that is the opposite of a capitalistic open market.
[ link to this | view in chronology ]
Re: How are the monopolies allowed?
It's what's called a natural monopoly. Running fiber is expensive. There are often similar monopolies in other areas that require major infrastructure investments -- if you're in the Phoenix area, for example, you're getting your power from either SRP or APS, depending on where you live.
The difference is that those industries are heavily regulated (even though I've got a few choice words for some of the people who have been in charge of regulating APS), while broadband Internet providers have largely been allowed to do what they want and regulations (like requiring the owners of the cable to allow competitors to use it) have fallen by the wayside. As for why that's happening, it's largely the reasons Karl lays out in the lede of this article: "loyalties, sector financial links, or ideologies embedded decades ago."
[ link to this | view in chronology ]
Re: Re: How are the monopolies allowed?
Yes, it's not so much that they are allowed to be monopolies, but rather that they're not forced to compete. This is why in Europe, most countries had their formerly government-owned providers first privatised, then forced to do things like local loop unbundling. Now, everyone here has a choice of providers and while choices generally vary, they are actually competing and things like bandwidth caps on non-mobile connections are almost unheard of, and net neutrality is not an issue because competition ensures that anyone trying to abuse it would instantly lose customers.
[ link to this | view in chronology ]
Re: How are the monopolies allowed?
MONEY.
Then raise the rates you charge the Citizen, customer, to pay for it.
[ link to this | view in chronology ]
'The companies giving us piles of money are bad? No...'
Granted as Frontier stumbles toward bankruptcy most of its debt will be wiped clean, nobody in the U.S. will learn anything from the process, and a universe of "very serious telecom policy thinkers" will continue to turn a blind eye to the entire mess as history repeats itself.
While this is likely true, the problem comes from why it's true, and that's because there's nothing new to learn for anyone involved. Those that are against such corruption and regulatory capture knew beforehand that it was a problem, and those that stand to benefit from those things were already quite aware of how profitable they are and as a result are in no rush to change anything, with the problem being that there is unfortunately a lot more of the latter than the former currently.
As the saying goes, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” If no lessons were learned it's because it's simply not profitable to learn them, or more accurately admit that they were learned decades back and all the wrong, albeit highly profitable, conclusions drawn from them.
[ link to this | view in chronology ]
History repeating itself
Or will it???
In a year or two, SpaceX should be offering broadband in the US. Change is coming....nothing lasts forever!
[ link to this | view in chronology ]
Re: History repeating itself
My thought exactly - sooner rather than later, these buggy-whip makers will be standing at the side of the road wondering "what's all that noise?" Progress will pass them by. You think they're bankrupt now? Just wait.
[ link to this | view in chronology ]
Frontier values!
Randolph Scott and John Wayne didn't need this fancy computer stuff, and the sandal-wearing hippies who come along with it. The next thing you know, they'll be selling marijuana to schoolchildren!
[ link to this | view in chronology ]
The quotation that follows this statement has nothing to do with neglect. A network being complex or old isn't a sign of neglect.
[ link to this | view in chronology ]
Re:
FCC,
Did a quick look at what has been done, and there were pictures and data of all of the above.
If we could find it, I think it was here someplace.
[ link to this | view in chronology ]
As long as the bosses get their salaries and Golden Handshakes, all is good! As for those who should have protected the customers and the tax payer funds that eere freely handed over, they got their Back Handers, so all is good with them too!
This is typical of so many industries in the USA, where millions in funding and tax breaks are given but nothing is done in return. Even worse, no action is then taken against them because of the 'big names' who were 'bought off', including law makers, so ass was always covered! How the hell can US companies be expected to compete with outside manufacturers when most of the money that should have been available in other subsidies has already been given away?
[ link to this | view in chronology ]
Useful information
"There are two reasons the company didn't do better on these fronts. One is sniveling, feckless, U.S. regulators and cash-compromised state and federal lawmakers, who rubber stamp every merger thrown on their desks, and refuse to hold politically powerful monopolies accountable."
Is there a publicly available name and location listing - a sort of "know your enemy" list - of these "sniveling, feckless U.S. regulators and cash-compromised state and federal lawmakers" ? Methinks this would be of tremendous value to voters, in the near and far future. Just saying....
[ link to this | view in chronology ]
Re: Useful information
Ever look at the regs for small business and compare them to Corps?? Its Amazing.
Look up LLC, which was designed for Starter and small companies so they Couldnt be Sued personally.
Every Large Corp is NOW an LLC. This is not what that designation was FOR.
At this time, those running the corps, have no concern of what happens TO the corp. They have little to NO responsibility. They can Walk away with a Contract, and even Add their Name to sueing the Corp for his wages and retirement..
[ link to this | view in chronology ]