Want To Understand Why U.S. Broadband Sucks? Look At Frontier Communications In Wisconsin, West Virginia

from the do-not-pass-go,-do-not-collect-$200 dept

So for years I've noted if you really want to understand why U.S. broadband is so crappy, you should take a long, close look at Frontier Communications in states like West Virginia. For decades the ISP has provided slow and expensive service, routinely failed to upgrade or repair its network, and generally personified the typical bumbling, apathetic, regional monopoly. And its punishment, year after year, has generally been a parade of regulatory favors, tax breaks, and millions in subsidies. At no point do "telecom policy leaders" or politicians ever try to do much differently.

Case in point: Frontier, fresh off of an ugly bankruptcy, numerous AG and FTC lawsuits over repair delays, and repeated subsidy scandals, is positioning itself to nab yet more subsidies from the state of Wisconsin. Frontier is asking the state of for $35 million in additional grants, despite the fact Wisconsin was just one of several states whose AGs recently sued the company for being generally terrible. Folks familiar with the company argue it shouldn't be seeing a single, additional dime in taxpayer resources given fifteen years of scandal:

"I hope the state will seriously consider the track record of companies to understand which ones have a long record of meeting the needs of residents and businesses,” Christopher Mitchell, director of the Community Broadband Networks Initiative, a Minnesota-based think tank supporting communities’ telecommunications efforts, said in an interview with The Badger Project.

"Frankly, Frontier’s record suggests it should not receive a single additional dollar from any government,” he added. “Local companies, communities, and cooperatives have proven to be much better at turning public subsidies into needed networks."

Keep in mind Frontier has been accused of taking state and federal subsidies on several occasions, misleadingly billing the government extra, then basically just shrugging when asked for the money back. To date nobody has done much about any of it. Also keep in mind Frontier routinely lobbies for (and often ghost writes) state laws banning towns and cities from building their own broadband networks. They're also directly responsible for the gutting of state and federal regulatory and consumer protection authority. Facing little real competition and feckless oversight in most states, nothing much changes. By design.

Historically, state politicians and regulators ignore these kinds of problems, because, it should be made clear, they're corrupt. Regional monopolies find it immensely easy to throw a few bucks at state leaders in exchange for just mindless rubber stamping of whatever goal they're interested in (merger approvals, new subsidies, the gutting of consumer protections, tax breaks, zero accountability). That this strategy continually results in terrible, substandard, and expensive service never seems to enter into the picture. It's just rinse, wash, repeat in a long line of states.

The Wisconsin State Public Service Commission is expected to grant or deny Frontier's request by the end of the month. The company is also first in line to grab new federal broadband funding from the Biden FCC. It will be curious to see if just a parade of unprecedented scandal reduces Frontier's ability to have millions in additional taxpayer money thrown at it in the slightest. My guess is it doesn't. At all.

There are two, indisputable reasons U.S. broadband generally sucks: regional monopolization and the corruption that protects it. But when you see news articles, regulators, many think tankers, or politicians talking about broadband, notice how many are capable of even clearly acknowledging that fact, much less genuinely interested in actually doing anything about it.

Filed Under: broadband, competition, dsl, fcc, subsidies, telecom, upgrades, west virginia, wisconsin
Companies: frontier

US Telcos Continue To Embrace Apathy As A Business Model

from the blatant-disinterest-isn't-a-strategy dept

For more than a decade we've noted how the US broadband industry's biggest problem is a lack of healthy competition. In countless markets consumers either have the choice of a terrible phone company or a cable giant. The nation's phone companies have spent the last decade refusing to upgrade (or in some cases even repair) their aging DSL lines, because they don't see residential broadband as worth their while. That, in turn, is giving giants like Comcast and Spectrum an ever greater monopoly in many markets, reducing the already muted incentive to compete on price or shore up comically terrible customer service.

While that may be great for cable companies, execs, and investors, it's not so great for consumers whose only choice of broadband is aging DSL from an apathetic telco. Instead of upgrading its customers to fiber across more than 20 states, US telco CenturyLink (recently rebranded "Lumen") announced it would be selling much of the company's copper DSL and phone network to private equity firm Apollo. Under the $7.5 billion dollar deal CenturyLink will keep the customers it actually cares about, then throw the (mostly rural) customers it doesn't care about at a private equity firm that isn't likely to upgrade them either.

Apollo, primarily famous for acquiring old newspapers, lobotomizing them, then stripping them for parts, claims it will upgrade many of these users to fiber. But that doesn't seem particularly likely given their track record, or the track record of similar deals like this, which basically involves shuffling ownership of aging DSL lines nobody wants to actually upgrade, then milking the assets until the next sale. Many of these customers have been stuck on expensive, slow DSL for the better part of fifteen years as they get shuffled from disinterested owner to disinterested owner:

"It will be interesting to see if Apollo can do better than other past forays with buying copper networks. I can’t think of one of these mega-deals where buying copper networks has gone well. I think back on the purchases by Frontier, Fairpoint, Iowa Telephone, Windstream, Citizens, and others that never panned out – and those deals were for copper that wasn't as ancient as is coming in this sale. Some of the rural customers in this sale have seen the name of the incumbent telco change several times – but they haven’t seen improvements in copper for decades."

The cycle of apathy is directly responsible for the surging interest in local community and municipal broadband networks, often run by people who actually give two flying shits about the communities they're dealing with. Of course instead of embracing those alternatives as a productive way to shore up overall broadband access (during a plague, no less), many US policymakers have instead demonized and tried to ban them.

Filed Under: broadband, competition, dsl, rural broadband, upgrades
Companies: centurylink, lumen

The Pai FCC Sits On Its Hands While Phone Companies Rip Off American Taxpayers

from the ill-communication dept

We've talked often about how the nation's phone companies, now fixated on video and online advertising, have effectively just been letting their DSL and phone networks fall apart while still charging exorbitant rates. Not only did these companies take billions in taxpayer dollars to build these older copper-based networks, they took billions more in subsidies for fiber upgrades they never fully deployed. Yet increasingly we've watched as they've refused to upgrade or even repair their networks across countless states, leaving customers trapped with expensive service that often doesn't even meet the FCC's standard definition of broadband (25 Mbps).

This problem has often been exemplified by Frontier Communications in West Virginia, where local Charleston Gazette reporter Eric Eyre has quietly done an amazing job the last few years chronicling the state's immense corruption and dysfunction, from the state's use of broadband stimulus subsidies on unused, overpowered routers and overpaid, redundant consultants, to state leaders' attempts to bury reports supporting allegations that Frontier engaged in systemic, statewide fraud on the taxpayer dime.

Though not quite as profound, similar problems have plagued Frontier's operations in the state of Minnesota. The Minnesota Attorney General's office has been investigating whether Frontier violated state consumer-protection laws for a while now, and not long ago issued a 133 page report (pdf) detailing how terrible the company is at maintaining and repairing its network despite endless taxpayer subsidies. The report clearly illustrated a pattern of the company letting outages go on for months at a time, often putting paying customers at risk:

"The findings of this investigation detail an extraordinary situation, where customers have suffered with outages of months, or more, when the law requires telephone utilities to make all reasonable efforts to prevent interruptions of service. When interruptions occur, telephone utilities are to restore service “with the shortest possible delay.” Frontier customers with these outages include those with family members with urgent medical needs, such as pacemakers monitored by their medical teams via the customer’s landline."

Given that Frontier receives $283.4 million each year from the FCC's Connect America Fund (CAF), there's some obvious questions here as to who is minding the store and ensuring that Frontier is adhering to the law.

Like most broadband dysfunction, giant broadband ISPs get away with this sort of thing thanks to two things: a lack of real broadband competition, and regulatory capture. Case in point: Ajit Pai, whose FCC is supposed at least occasionally protect the American public. Senators in Minnesota have recently been pressing him to take some kind of action, even to publicly condemn the kind of grift and consumer mistreatment that's pretty common in the the state. In a letter posted to the FCC website (pdf), Pai effectively acknowledged the problem, though falls well short of saying he'll actually do anything about it:

"...the FCC will remain vigilant to ensure that our rules are observed and taxpayer funds respected. Accordingly, I have conveyed the information from your letter regarding the state commission’s investigation to our staff and have asked them carefully to monitor this development. Thank you for bringing this aspect of the issue to my attention."

While Pai is just a particularly obvious example of the regulatory capture that has infected telecom, this kind of "maybe we'll look into it" attitude has plagued both parties for decades when it comes to big telecom's long history of taxpayer-supported shenanigans and overall apathy. Needless to say, local state Senators weren't particularly enthusiastic about Pai's promise, especially given Pai's often breathless claims that he's a champion of stopping fraud and waste:

"For a chairman who is so concerned with rooting out waste, fraud and abuse, it's baffling that the commission tasked with overseeing billions of dollars in public money is declining to investigate the more than a thousand allegations of poor service by a company that receives that public money to provide those services," US Sen. Tina Smith (D-Minn.) told Ars in a statement today."

Given this is America, this will likely just be dismissed as partisan bickering. But it shouldn't be. We've thrown endless billions in taxpayer dollars at giant telecom conglomerates with often just a fleeting effort to ensure that money is being spent wisely. And while it's nice the Pai FCC will "monitor" the problem, we're long past that point. If you dig for more than twenty seconds, you can find endless examples of giant ISPs taking taxpayer dollars in exchange for the technological equivalent of damp garbage. And were Pai a quarter of the stalwart defender of fraud and waste he professes to be, this stuff would be met with a lot more than just "we might look into it."

Filed Under: ajit pai, fcc, fiber, oversight, subsidies, taxpayers, upgrades
Companies: frontier communications

Big Telecom Wants To Tax Netflix To Pay For Broadband Upgrades ISPs Refuse To Deploy Themselves

from the ride-my-pipes-for-free dept

Last year, FCC boss Ajit Pai repeatedly hyped the creation of a new "Broadband Deployment Advisory Council" (BDAC) purportedly tasked with coming up with creative solutions to the nation's broadband problem(s). Unfortunately, reports just as quickly began to circulate that this panel was little more than a who's who of entrenched telecom operators with a vested interest in protecting the status quo. The panel has yet to really offer up a meaningful proposal, but it has been rocked by several resignations due to cronyism, and at least one member who was arrested for fraud.

As the FCC looks to expand the council's charter for another few years, the panel itself has been pushing a plan that pretty clearly highlights the cronyism intentionally inherent in its design. More specifically, the panel has been pushing the FCC to adopt a new system that urges states to tax Netflix and Google to fund rural broadband deployment:

"A Federal Communications Commission advisory committee has proposed a new tax on Netflix, Google, Facebook, and many other businesses that require Internet access to operate. If adopted by states, the recommended tax would apply to subscription-based retail services that require Internet access, such as Netflix, and to advertising-supported services that use the Internet, such as Google and Facebook. The tax would also apply to any small- or medium-sized business that charges subscription fees for online services or uses online advertising."

To be clear, this is extremely unlikely to come to pass, even in the most myopic of states. Still, if you're playing along at home, this is just an extension of a multi-decade effort by ISPs to force somebody else to pay for network upgrades they refuse to fund, despite having received countless billions to accomplish this goal. In fact this push to have content companies pay for ISP network upgrades is really what began the net neutrality fight back in 2003 or so, when former AT&T CEO Ed Whitacre proclaimed that Google should pay him an additional troll toll just to access his network. You know, just because.

This mantra was long rooted in telecom envy of Silicon Valley online ad revenues, and a belief by telecom executives that they're somehow "owed" a cut of those revenues. Over time it evolved into endless claims by telecom sector allies, think tankers, and other cronies that companies like Google and Netflix were somehow getting a "free ride" on incumbent ISP networks, despite having invested billions into their own global transit and network operations. Over time it became a global telecom executive mantra of sorts, even if it never made coherent sense.

People forget, but it's this telecom industry attempt to "double dip" that truly launched the modern net neutrality debate just about fifteen years ago. That point has gotten lost as ISP efforts to extract unearned rents have gotten more elaborate over the years, but at its heart the fight has always been about monopoly ISPs trying to offload network construction and operation costs off to somebody else, while already earning fat revenues thanks to limited competition.

Of course AT&T, who generally drives most dubious DC telecom policy moves and would reap the lion's share of said tax, had originally tried to insist that the panel's recommendations (and the proposed tax) should apply to pretty much all traffic that touches the internet:

"An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. The committee ultimately adopted a slightly more narrow recommendation that would apply the tax to subscription services and advertising-supported services only."

The real problem here (or one of many) is that companies like AT&T and Verizon were already given billions upon billions in taxpayer dollars to fund these upgrades years ago. American history is filled with examples of these companies getting massive tax cuts or subsidies to deploy fiber, then using their lobbying prowess to wiggle out from under the obligations after the fact. Had the government ever conducted any real audit, you'd likely find American taxpayers have paid to upgrade the country with fiber several times over, yet still somehow often only have access to pricey, sluggish DSL.

That, nearly two decades later, AT&T's still running a lame variation of the same ploy is equal parts frightening and sad, but seems to be par for the course for a country that refuses to learn from history, and an FCC that has made it abundantly clear it's a glorified rubber stamp for lumbering natural monopolies and their very worst instincts.

Filed Under: broadband, capital expenditure, capital investment, fcc, fees, internet, taxes, upgrades
Companies: at&t, google, netflix, verizon

Some Comcast Customers Won't Get The Latest Broadband Upgrades Without Buying Cable TV

from the utterly-Comcastic dept

As we've often noted, Comcast has been shielded from the cord cutting trend somewhat thanks to its growing monopoly over broadband. As users on slow DSL lines flee telcos that are unwilling to upgrade their damn networks, they're increasingly flocking to cable operators for faster speeds. When they get there, they often bundle TV services; not necessarily because they want it, but because it's intentionally cheaper than buying broadband standalone.

And while Comcast's broadband monopoly has protected it from TV cord cutting somewhat, the rise in streaming competition has slowly eroded that advantage, and Comcast is expected to see see double its usual rate of cord cutting this year according to Wall Street analysts.

Comcast being Comcast, the company has a semi-nefarious plan B. Part of that plan is to abuse its monopoly over broadband to deploy arbitrary and unnecessary usage caps and overage fees. These restrictions are glorified rate hikes applied to non competitive markets, with the added advantage of making streaming video more expensive. It's a punishment for choosing to leave Comcast's walled garden.

But Comcast appears to have discovered another handy trick that involves using its broadband monopoly to hamstring cord cutters. Reports emerged this week that the company is upgrading the speeds of customers in Houston and parts of the Pacific Northwest, but only if they continue to subscribe to traditional cable television. The company's press release casually floats over the fact that only Comcast video customers will see these upgrades for now:

"Speed increases will vary based on the Xfinity Internet customers' current speed subscriptions. Those receiving the speed boost will benefit from an increase of 30 to 40 percent in their download speeds. Existing Xfinity Internet and X1 video customers subscribing to certain packages can expect to experience enhanced speeds this month."

As is usually the case, Comcast simply acted as if this was all just routine promotional experimentation (an argument that only works if you're unfamiliar with Comcast's other efforts to constrain emerging video competition):

"We asked Comcast a few questions, including whether it will make speed increases in other cities contingent on TV subscribership. A Comcast spokesperson didn't answer, but noted, "we test and introduce new bundles all the time." The spokesperson also said that the speed increase for Houston is the second in 2018, after one in January. The Oregon/SW Washington speed increase is apparently the first one this year."

In a healthy market with healthy regulatory oversight, either competition or adult regulatory supervision would prevent Comcast from using its broadband monopoly to constrain consumer video choices. But if you hadn't noticed, the telecom and TV sector and the current crop of regulators overseeing it aren't particularly healthy, and with the looming death of net neutrality you're going to see a whole lot more behavior like this designed to erect artificial barriers to genuine consumer choice and competition.

Filed Under: broadband, bundles, cable tv, competition, speeds, tv, upgrades, xfinity
Companies: comcast

Verizon Insists Higher Phone Upgrades Are Being Used To Enhance The Network Instead Of Make Up Revenue Decline

from the uh-huh dept

Within Karl Bode's post about Verizon's insistence that all of the people who continue to use grandfathered unlimited data plans don't actually exist was a brief note about the company's decision to increase the cost to upgrade the phones themselves. As mentioned in the post, Verizon claimed that the reason to push upgrade costs from $20 to $30 was due to increasing costs. Fleshing that out a tiny bit, a Verizon spokesman commented for Ars Technica.

When asked why the upgrade fee was raised, a Verizon spokesperson told Ars, "These fees help cover increased cost to provide customers with America’s largest and fastest 4G LTE network."

As both Karl's and the Ars post note, there's a bit of a problem with this statement. Verizon's earnings reports are publicly available, you see, and the company's own reporting details a fairly significant decline in operating costs compared with the previous year. So, what was sold as a need to make up for increased expense appears instead to be something else. Once the post went live, another Verizon spokesman reached out to Ars again.

After this story published, Verizon responded that it was referring to "ongoing costs to maintain and enhance the network," but did not provide any further details.

Making the additional comment rather useless, I would say. We still have source material in the form of Verizon's own financial statements that suggest lower expenses for the company, not higher. What you do find, in addition to that, is a slightly smaller decline in revenue. It would make some sense for the company to try to make up for a revenue decline by raising upgrade fees. If that were the case, however, why not just say so? Why instead invoke the expense and the spectre of the future without anything concrete to back that up? It's not like the telecom industry has some sterling reputation when it comes to how and when it deploys the cost of maintaining or upgrading their networks as the reason to take certain actions. And why on the one hand charge extra fees to burgeon the network while at the same time eliminate data plans that could take advantage of a beefed up service?

The only thing that's certain in this is that Verizon appears to be dipping ever-further into tactics that are designed not to provide its customers with additional value, but to instead merely prop up a decreasing revenue number.

Filed Under: costs, network, revenue, upgrades
Companies: verizon

AT&T Makes It Clear: It Bought DirecTV So It Doesn't Have To Upgrade Its Lagging Networks

from the decidedly-last-generation dept

The biggest U.S. pay TV provider has stopped building U-verse set-top boxes and is nudging prospective customers toward its satellite unit, which has lower hardware and programming costs. The shift is the first stage of a plan to create a “home gateway” within three years that will consolidate all AT&T services and act as a central hub to deliver video to any device...“AT&T is going to actively get out of the U-verse business,” said Chris Ucko, an analyst with CreditSights Inc.

“To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV,” said Brad Burns, an AT&T spokesman. “However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options.”

Filed Under: broadband, competition, dsl, infrastructure, satellite tv, tv, upgrades
Companies: at&t, directv

14 Mayors Have To Join Forces And Beg Verizon To Upgrade Its DSL Network

from the please-sir-may-I-have-another dept

"Our cities lie within the core footprint of Verizon Communications and have long valued the quality jobs and fiber upgrades that Verizon promised to bring to our communities...But consistently and increasingly, our consumers have complained that FiOS service is not available to them. These are not isolated complaints – there are millions of residents in communities throughout the Northeast who have been left without service, and with no plan or promise for future resolution."

"Based on irrefutable evidence of your company’s poor service record, lack of transparency and accountability, or demands for exclusive agreements with landlords throughout the region, we are deeply concerned that you have not acted like a good corporate citizen and that an incomplete FiOS rollout will result in decreased competition and the reduction of benefits to consumers throughout the Verizon footprint. As elected officials, it is our obligation and our responsibility to bring these complaints to your attention."

Filed Under: broadband, dsl, mayors, upgrades
Companies: verizon

Verizon Picks The Worst Possible Person To Try To Bullshit Into Unnecessary Upgrade

from the smooth-move-exlax dept

"While some might want to chalk this us to an isolated incident, or an over zealous sales rep, that’s not the case at all. I called in three times and spoke to three different reps, plus one online and got the same pitch. Clearly this sales tactic is being driven by those higher up in the company and isn’t something a sales rep made up on their own. And two years ago, Verizon tried to pitch me the exact same story, promising better quality Netflix streaming if I upgraded my Internet package."

Filed Under: bandwidth, dan rayburn, upgrades
Companies: netflix, verizon