Home » Rural Broadband » Recent Articles:

Erie County Executive Blasts Bad Internet Access for Harming Western N.Y. Economy

Western New York

In a recent survey of 2,000 residents living in Erie County (Buffalo), N.Y., it was clear almost nobody trusts their internet service provider, and 71% were dissatisfied with their internet service.

Seventeen years after many western New York residents heard the word “broadband” for the first time at a 2000 CNN town hall at the University of Buffalo, where then U.S. Senate candidate Hillary Rodham Clinton called for increased federal funding for high-speed internet, many upstate residents are still waiting for faster access.

The Buffalo News featured two stories about the current state of the internet in western New York and found it lacking.

Erie County Executive Mark C. Poloncarz blames internet service providers for serving up mediocre broadband, and no service at all in some parts of the county he represents.

“It’s been put in the hands of the private sector, and the private sector has, for whatever reason, elected to not expand into particular areas or not increase speeds in particular areas, putting those areas behind the eight ball,” he said.

Poloncarz effectively fingers the three dominant internet providers serving upstate New York – phone companies Verizon and Frontier and cable company Charter/Spectrum. He argues that companies will not even consider locating operations in areas lacking the most modern high-speed broadband. The digital economy is essential to help the recovery of western New York cities affected by the loss of manufacturing jobs and the ongoing departure of residents to other states.

Poloncarz

An important part of Gov. Andrew Cuomo’s statewide broadband improvement initiative is prodding Charter Communications and its predecessor Time Warner Cable to do a better job offering faster internet speeds and more rural broadband expansion. The New York Public Service Commission, as part of its approval of Charter’s acquisition of Time Warner Cable, extracted more concessions from the cable giant than any other state. Among them is a commitment to expand the cable company’s footprint into adjacent unserved areas by 2020 to reach at least 145,000 homes and businesses now outside of Charter’s service area.

Last week, the cable company told the PSC it was ahead of schedule on its expansion commitment, now reaching 42,889 additional households and businesses, which is above its goal of 36,771. It has two years left to add at least another 102,111 buildings.

Charter also recently increased broadband speeds to 100 Mbps for 99% of its customers in New York and has committed to boosting those speeds to 300 Mbps by the end of next year.

But where Charter does not provide service, broadband problems come courtesy of western New York’s biggest phone companies – Verizon and Frontier. In Erie County, a broadband census found a lack of service in parts of South Buffalo, the far West Side and East Side of Buffalo, as well as in parts of every town in the county except in the prosperous communities of West Seneca and Orchard Park. Verizon FiOS can be found in a handful of well-to-do Buffalo suburban towns, but not in the city itself or in rural parts of the region.

Verizon spokesman Chris McCann said the company had no further plans to expand FiOS service in upstate New York, and stopped announcing additional expansions in 2010. In the rest of its service area, Verizon supplies DSL service as an afterthought, and has made no significant investments to improve or expand service. Frontier Communications, which is the dominant phone company in the greater Rochester region, also provides service in some other rural western New York communities, but its DSL service rarely meets the FCC’s minimum speed definition to qualify as  broadband.

Rep. Collins

Both phone companies have no plans for significant fiber optic upgrades that would boost internet speeds. There is little pressure on either company to begin costly upgrades. In rural communities, both companies lack cable competition and in more urban areas, both have written off their ongoing customer losses to their cable competitor. That leaves towns like North Collins in a real dilemma. Poloncarz told the newspaper residents frequently park in the town library parking lot at night to connect to the library’s Wi-Fi service, because they lack internet service at home.

A political divide has opened up between area Democrats and Republican officials on how to solve the rural broadband problem. Democrats like Poloncarz are exploring solving the rural internet problem with a county-owned fiber network that would be open to all private ISPs to assist them in expanding service. He is joined by Erie County legislator Patrick Burke, who thinks it is time to spend the estimated $16.3 million it will take to build an “open access network” across Erie County.

“There are literally geographic dead zones, and it’s unnecessary,” said Burke, a Buffalo Democrat. “There’s no excuse.”

Poloncarz is more cautious and told the newspaper he will only propose the idea if he is convinced it will solve the problem, but is willing to continue studying it.

Republicans from the western New York congressional delegation believe deregulation and other incentives may give private companies enough reasons to begin upgrades and expansion.

Rep. Chris Collins, a Clarence-area congressman with close ties to the Trump White House, defended FCC Chairman Ajit Pai’s recent decision to eliminate net neutrality. Pai was born in Buffalo.

Collins argues net neutrality only raised the cost of business for ISPs, and being rid of it would inspire cable and phone companies to boost investment in 105 exurban and rural towns in his district, which covers eight counties and extends from the Buffalo suburbs east to Canandaigua, 80 miles away. More than 65% of those areas are under-served because DSL is often the only choice, and at least 3.3% had no internet options at all.

Rep. Tom Reed (R-Corning) has just as many internet dead zones in his district, if not more. Reed represents the Southern Tier region of western New York in a district that runs along the Pennsylvania border from the westernmost part of New York east nearly to Binghamton. Much of recent broadband development in this part of New York comes as a result of Gov. Cuomo’s state-funded broadband expansion initiative, not private investment.

Reed has a record in Congress that is better at explaining the rural broadband dilemma than solving it.

“In a rural district, there are areas that are just physically difficult to serve,” Reed shrugged.

Collins’ hope that the banishment of net neutrality will inspire Frontier, Verizon, and Charter to use their own money to expand into the frontiers of western New York seems unlikely. Gov. Cuomo’s plan, which uses public funds to help subsidize mostly private companies to expand into areas where Return On Investment fails to meet their metrics has had more success.

But the rural broadband debate has been accompanied by a fierce pushback among upstate New Yorkers against the Republican-controlled FCC and elected officials like Collins who support the recent gutting of net neutrality. A backlash has developed in his district, and some have accused Collins of aiding and abetting a corporate takeover of the internet.

“The hysteria and narrative that this will kill the internet is blatantly false,” responded Collins. “Internet service providers have said they do not increase speeds for certain websites over others, and I have signed onto legislation that would make such a practice illegal.”

Goodbye FairPoint, New Owner Rebrands as Consolidated Communications

Just shy of 10 years after FairPoint Communications acquired Verizon’s landline properties in the northern New England states of Maine, New Hampshire, and Vermont, both the company and its name are disappearing forever.

Consolidated Communications, which announced it would acquire FairPoint in December 2016, intends to put FairPoint’s name and reputation behind it, and is rebranding the phone company as Consolidated Communications with plans for significant broadband upgrades for its customers.

FairPoint bought the assets of Verizon’s landline network in the three northern New England states in 2007 for $2.4 billion. The transition from Verizon to FairPoint did not go well, and the company stumbled for years trying to keep up with billing and service problems and the need to continually expand broadband service to stay competitive, all while also trying to pay off the debts it incurred in the acquisition. The company failed on all accounts and declared bankruptcy in 2009, eventually emerging with a new business plan in 2011.

FairPoint’s performance post-bankruptcy has relied on cautious spending, cost-cutting measures and benefits cutbacks for its employees, which triggered a 131-day strike in 2014 among FairPoint’s union workforce — the longest walkout of any company that year. Replacement workers sent in to handle service calls and network maintenance were criticized by customers and lacked experience to manage New England’s rough winters.

By early 2016, executives claimed their “turnaround” plan for FairPoint had made significant strides. By that summer, activist shareholders were demanding FairPoint be put up for sale, in part to allow them to quickly recoup their investments in company debt that could not be monetized unless another company acquired FairPoint and assumed those debts.

In late 2016, Consolidated Communications did exactly that, acquiring FairPoint’s assets in northern New England and many other states where it operates small phone companies for $1.5 billion — a significant drop in value for assets that sold for nearly $1 billion more nine years earlier.

Rob Koester, Consolidated Communications vice president for consumer products clearly wants to put FairPoint behind him.

“It is a new beginning,” he said. “It’s a new chapter for us. It’s a re-dedication to our customers.”

Some of the biggest planned changes appear to be more job cuts. Consolidated recently eliminated FairPoint’s state president positions in Maine, New Hampshire, and Vermont and will depend on regional management instead. The phone company will also once again face negotiations with unions that represent much of its workforce later this year. Most expect the unions will not be friendly to anticipated company efforts to further consolidate and reduce benefits.

Promised broadband upgrades from speed increases come with few details, except a broad commitment to raise speeds for 300,000 internet customers over the course of this year — which represents about 30% of FairPoint customers. Spokeswoman Angelynne Amores claims there will be no price hikes for faster internet speeds.

But Consolidated will also be under the watchful eye of Wall Street, which does not want the company to invest too much in broadband upgrades until shareholders are comfortable with the company’s financial future. There are few business successes in wireline acquisitions and mergers these days, as Frontier Communications can attest from its purchase of Verizon’s network in Florida, California, and Texas.

Any upgrades cannot come soon enough for FairPoint customers forced to endure its DSL service as their only internet access option.

Michael Charter, a FairPoint customer in Jericho, Vt., lives just outside the state’s largest city, Burlington, where there are several internet service providers. But in his part of Jericho, FairPoint is the only broadband provider available, and it does not come close to offering actual broadband speeds.

Charter told the Associated Press his current solution is to buy two DSL accounts from FairPoint and divide up the load from his family’s streaming, internet browsing, downloading and telecommuting across two different accounts. His television and computers share one FairPoint DSL account hooked up to one router while other internet usage is confined to a second router connected to a second account. FairPoint is unable to bond the two connections together to increase speed, so two slow DSL lines is the best option for him for now.

Consolidated isn’t likely to make a lot of money taking over FairPoint’s residential and business landlines or DSL accounts. But it could earn substantial revenue from FairPoint’s extensive fiber network laid across the three northern New England states it serves. Companies and public institutions rely on fiber connectivity, as do cell towers — including the future swarm of 5G small cells expected to eventually be placed across the phone company’s footprint.

The phone company’s biggest rival is Comcast, which has some cable coverage in the region, but large sections of all three states are bypassed by Comcast and Charter Communications, which has a substantial presence in eastern Maine.

Frontier Communications’ Broken Promises to Mountain Counties of North Carolina

Frontier Communications customers in the mountainous western counties of North Carolina have run out of patience waiting for web pages to load and upgrades to arrive, despite repeated promises from the phone company that its aging copper-wire DSL service would improve over time.

Stop the Cap! readers in the region pointed us to a special investigative report by WLOS-TV, Asheville’s ABC affiliate, which reports Frontier service is so bad, speeds under 1 Mbps are common. The station saw examples of Frontier unable to supply even modest speeds of just 3 Mbps.

“I’d rather stab myself than rely on Frontier’s fake internet access,” says our reader Darrell, who lives near Brasstown. “The only thing high-speed at Frontier is how fast they hang up on you when you call to complain.”

Frontier sold him “up to 10 Mbps” speed and instead struggles to deliver 1 Mbps, despite repeated service calls and promises of improvements.

“They keep telling us the federal government has to come up with money to help upgrade the area, and I keep wondering why a private company needs our tax dollars to build a network they will profit from for years,” Dan said. “If they cannot do the job, maybe the town should because they at least answer to us.”

Aiden Davis, who lives near Asheville, said he’d rather have the government give money to the cable company to extend broadband to his home, which is located about 1/4th a mile away from the nearest cable connection.

“At least the cable company can give me speeds DSL never will,” he told us.

Reporters at WLOS visited Murphy, N.C., a community of 1,600 people in Cherokee — the westernmost county of the state.

Craig Marble escaped Washington, D.C. to live in the picturesque community nestled in the mountains. But his efforts to telecommute to his IT employer are frustrated by Frontier’s DSL service, which is supposed to provide up to 3 Mbps to Marble and his neighbors. But Frontier delivers far less than it advertises.

Western North Carolina

“It’s just a comedy of errors except that it’s not funny. It takes five minutes to load a single webpage,” Marble said. “This should be 3.0, not .3 [Mbps],” Marble said while showing reporters various speed tests for his service, resulting in .3 and .5, and .6 Mbps at various times throughout the morning and afternoon.

More than 50 similar complaints have been filed with the North Carolina Attorney General, some about internet speed, others about service, outages, and billing problems.

“If there are companies out there making representations to consumers that they can not back up and we hear from consumers, we will absolutely take action on their behalf,” Attorney General Josh Stein told the station. “If we determine that Frontier is not complying with the law, we’ll hold them accountable, but there’s a lot of work we still need to do.”

But residents contend Stein does not seem to be in a hurry to chase down Frontier, and may not have the resources to follow through even if he wanted. After the Democrat won the North Carolina Attorney General race and took office in 2017, the Republican-controlled legislature slashed $10 million from his budget, forcing layoffs of dozens of staff attorneys and limiting his office’s ability to act.

Stein told the TV station he wrote to Frontier about internet speed issues in North Carolina, but hasn’t received a response.

Frontier responded to WLOS with a statement, reading in part:

“Copper-based internet service is difficult to represent consistently as it is subject to distance limitations. That is why it is sold as offering ‘up to’ a specified speed. Not all customers will have the same DSL service.”

But some customers report speeds are consistently better at times when most people are unlikely to be online, suggesting Frontier may be overselling its DSL service — forcing too many customers to share a limited bandwidth connection.

“When it is 2:30 in the morning, we always have the best speeds,” Davis reported. “They always drop as soon as the kids get home from school and keep dropping into the evening. During recent winter storms, speeds dropped to the point where the internet was unusable.”

Attorney General Joel Stein

“It’s not a technical problem, it’s a ‘reluctance to spend money to fix it’ problem,” he added.

Frontier frequently responds to speed complaints with press releases touting recent internet service improvements made possible through the federal government’s Connect America Fund, without always disclosing many of these projects pay to extend internet access into areas where it did not exist before, not improve service for customers that already have it.

Frontier’s willingness to spend its own money on broadband improvements is often challenged by Wall Street’s demands for a dividend payout to shareholders, sending a significant portion of Frontier’s incoming revenue to investors. The company has reduced its dividend during difficult times to invest in limited upgrades. But critics claim Frontier’s devotion to a robust upgrade program comes second to shareholders and depends mostly on federal government handouts.

“The company struggles to spend $14.4 million on upgrades through 2020, but had no problem spending more than $10 billion to buyout Verizon in Florida, California, and Texas,” complained Darrell. “When you ask them specific questions, you learn that upgrade spending is window dressing that won’t address their speed problems across this part of the state.”

Marble tells WLOS that seems to be his impression as well, noting Frontier representatives didn’t give him much hope.

“They said — several of them said, ‘There are no plans for upgrades in your area, period’,” Marble said.

The TV station sent Frontier a detailed questionnaire, to which the company responded, taking care to disclaim some of the upgrade benefits many of Frontier’s own press releases seem to imply:

Question: How many customers does Frontier service in the following counties: Buncombe, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, Mitchell, McDowell, Polk, Rutherford, Swain, Transylvania, Yancey? Answer: I’m not familiar enough with cities in counties etc. We have customers in the following towns: Andrews, Bryson City, Buncombe, Cashiers, Cherokee, Cullowhee, Fontana, Franklin, Garden City, Glenwood, Hayesville, Highlands, Madison, McDowell, Mitchell, Murphy, Robbinsville, Suit, Sylva, Weaverville and Yancey. Of those we serve, some are only telephone customers, some internet only customers and still others both phone and internet customers. While we do not provide market specific customer counts in any of our operating areas for competitive reasons, it is fair to say that our customer count in the areas I referenced is in the tens of thousands.

Question: How is Frontier using the Connect America Funds in western North Carolina? What’s being done to upgrade or add service? How is the money being spent? Answer: Frontier is installing fiber into network support buildings or units in western North Carolina to enable more capacity over our existing copper network.

Question: How many new customers has Frontier been able to provide service to, as a result of Connect America funds? Are the funds being used more for acquiring new customers or is it more upgrading service for existing customers and in that case, what have the service improvements been like? Answer: It starts with upgrading the network to provide a minimum of 10 Mbps service identified as CAF households to meet the requirements of the CAF Fund as established by the FCC. Customers along the path of these improvements, both existing and those who are currently not customers, can take advantage of new broadband upgrades though not necessarily at the 10 Mbps threshold. However, it is not designed to extend the network to different operating areas.

Question: How much funding has Frontier received in Connect America funds for upgrades to broadband service in those western North Carolina counties? Answer: As of 2016, Frontier began receiving approximately $3.6 million a year from the CAF to expand and upgrade the company’s network to more than 11,000 locations in North Carolina by the end of 2020, to include areas in western NC. In total, Frontier has accepted the FCC’s CAF II offer of over $330 million annually across 29 states during the six-year program, and must meet annual benchmarks for each state beginning in 2017 for passing a specified percentage of designated households.

Question: In which counties has Frontier received funds and is using them to improve or add service? Answer: We have previously used CAF II funds in Macon, Clay, Jackson and Swain counties.

Question: What projects/upgrades have been completed to date, since Frontier started receiving Connect America funds? Answer: In addition to the counties referenced above, representative counties in this latest round in 2017 included households in Cashiers, Cherokee, Franklin and Hayesville. By the of this phase of CAF II funding the intention is to have touched all of the counties we serve in Western NC, barring anything unexpected.

Question: Has Frontier over-promised service in areas in any of the above mentioned counties? If service has been over-promised, what problems is that creating and what is the remedy for solving that problem? Answer: I’m not sure what this question is asking. I would say that copper-based internet service is difficult to represent consistently as it is subject to distance limitations. That is why it is sold as offering “up to” a specified speed. However, CAF funding should have a positive impact on the end user experience.

Question: What is the best way customers who feel they’re being underserved or not getting the service that they’ve paid for can reach out to report a problem? Answer: They should call 1-800-921-8101.

Question: Has the state of North Carolina, through the state’s Attorney General office or Consumer Protection Division reached out to Frontier over service issues, failing to deliver on service promises made by the company and if so, what’s been the response back to the state? Answer: We receive individual customer complaints from these agencies, usually revolving around availability of service or insufficient internet speeds. Our marketing for internet service and our terms of service recognize that some customers may not have the same experience as others, largely because of the distance limitations of DSL service or congestion in the network. We are attempting to address both of these issues through a combination of normal capital budgets and the additional CAF II funding.

Question: What are some of the issues Frontier runs into in expanding or improving broadband service or internet access and speed issues in western North Carolina? Answer: Mostly there are geographic challenges. However, customer density is also a challenge, or lack thereof. Balancing the significant cost of expanding broadband availability in rural areas versus the potential return on that investment is always a challenge. However, we are grateful for the Connect America Fund to help spur some of that investment and know that those customers who have been impacted by the expanded capacity appreciate the service.

Question: Anything you would like to add about the Connect America funds? Answer: We are fortunate to be a participant in the CAF funding process and grateful to the FCC for making it possible. Our hope is that customers in Western NC will have better internet connectivity experiences as we move along toward the culmination of this funding in 2020.

If you live in North Carolina and want to file a complaint about your internet service with the Attorney General’s Office click here.

WLOS-TV in Asheville, N.C. aired this special investigative report about Frontier Communications’ performance problems in western North Carolina. (5:03)

Service Problems Plague Frontier Customers in West Virginia as Company Seeks Voluntary Layoffs

Phillip Dampier January 3, 2018 Consumer News, Frontier, Rural Broadband, Video 1 Comment

An undisclosed number of Frontier Communications customers in West Virginia were without phone service during the Christmas-New Year’s Day holidays because of copper thefts and slow repair crews that did not begin repairs for up to two weeks after the outages were reported.

Hardest hit was Mingo County, where multiple copper wire thefts caused significant service outages starting Dec. 20 in Matewan, Delbarton, and Varney. Many customers were without phone service over the Christmas holiday, and some are still without service two weeks later. One of them is Arlene Gartin at the two-month old Mudders restaurant, which depends on pickup and delivery orders.

“This has devastated us,” Gartin told WSAZ-TV. “Seventy-five percent of our business was our delivery and without the calls I’m hanging on by threads.”

In Iaeger in McDowell County, residents on Coonbranch Mountain report their Frontier phone and internet services have been out of service for two weeks. Carl Shrader told WVVA-TV that service went out on Dec. 23 and remained so throughout Christmas and New Year’s Day.

Mingo County, W.V., on the Kentucky border.

“We had a windstorm come through, and up here where the church is, at the top of my driveway, it blew the power line and the telephone line down,” said Shrader. “If you get a fire around your house, and the phone lines is down, how can you notify the fire department? If you have a burglar coming in on you, how can you phone and say, ‘9-1-1, I need help! There’s a burglar here.’ You can’t!”

Cell service in this part of West Virginia is spotty, making landline service very important for many West Virginia residents who live and work around the state’s notorious mountainous terrain.

Customers affected by service outages report long hold times calling Frontier and very little information or updates about outages. Many residents report Frontier’s outages are frequent and often take a long time to fix. Some have been told Frontier’s repair crews are short-staffed and busy elsewhere.

That comes as a surprise to officials at the Communications Workers of America who confirmed Frontier announced a “voluntary” reduction in force program on Dec. 20, seeking employees willing to accept a buyout offer. If enough workers do not take Frontier up on their offer, more than 50 Bluefield-based employees and about 30 in Ashburn, Va., are at risk of being laid off.

WSAZ-TV in Huntington, W.V. reports a significant number of residents in Mingo County have been without Frontier telephone and internet service because of copper wire thefts for the last two weeks. (1:49)

WVVA-TV in Bluefield/Beckley, W.V. reports some residents waited two weeks for Frontier repair crews to show up after a windstorm. (1:49)

Wall Street Uneasy About Future 5G Broadband Competition; Ponders Idea of 5G Monopolies

Super monopoly?

Some Wall Street analysts are pondering ideas on how to limit forthcoming 5G wireless home broadband, suggesting providers might want to set up local monopolies, keeping competition to a minimum and profits to a maximum.

Verizon’s presentation at its annual Analyst Day meeting drew little praise from analysts and investors in attendance, “landing like a thud” to quote one person at the event.

The issue concerning Wall Street is what impact 5G wireless broadband will have on the internet access marketplace, which is currently a comfortable monopoly or duopoly in most American cities. That may radically change if the country’s four wireless companies each launch their own 5G services, designed to replace wired home broadband services from the cable and phone companies.

This week Verizon formally announced Sacramento would be the first city in the country to get its forthcoming 5G service, with an additional four of five unnamed cities to follow sometime next year.

Verizon will advertise 1,000Mbps service that will be “priced competitively” with current internet providers in the market. But Verizon intends to market itself as “a premium provider,” which means pricing is likely to be higher than one might expect. Verizon claims they intend to roll out 5G service to 30 million households — 25-30% of the country, making Verizon a prominent provider of fixed wireless home broadband service.

But analysts panned Verizon’s presentation for raising more questions than the company was prepared to answer. Barron’s shared the views of several analysts who were underwhelmed.

Notably, Craig Moffett from Moffett-Nathanson was particularly concerned about how to rate 5G service for his investor clients, and more importantly to them, how to forecast revenue and profit.

Moffett

The biggest problem for Moffett is the prospect of additional competition, and what that will do to each current (and future) provider’s share of customers and its revenue. If every major wireless carrier enters the 5G home broadband business, that will raise the prospective number of ISPs available to consumers to six or more — four wireless carriers competing with the phone and cable company. That is potentially very dangerous to big profits, especially if a competitive price war emerges.

“Let’s assume that AT&T is just as aggressive about this opportunity as Verizon,” Moffett told his investor clients. “Will they enter the same markets as Verizon, or different ones? […] If multiple players enter each market, all targeting the same 25-30% [where 5G service will be sold]. Well, what then? Let’s suppose the 30% market share estimate is right. Wouldn’t it be now shared among two, three, or even four [5G fixed wireless broadband] providers?”

Moffett gently proposes a concept where this profit-bruising competition can be abated by following the cable television model — companies agree to stay out of each others’ markets, giving consumers a choice of just one 5G provider in each city instead of four.

“There’s a completely different future where each operator targets different markets […] Let’s say that AT&T decides to skip Sacramento. After all, Verizon will have gotten there first,” Moffett suggests. “If the required share of the [fixed wireless] market is close to Verizon’s estimated 30%, then there is only room for one provider. So AT&T decides to do Stockton, about 40 miles to the south. Verizon would then skip Stockton, but might do Modesto, twenty miles further south… and then AT&T would then skip Modesto and instead target Fresno… unless Sprint or T-Mobile got there first.”

But Moffett is thinking even further ahead, by suggesting wireless carriers might be able to stop spending billions on building and expanding their competing 4G LTE networks when they could all share a single provider’s network in each city. That idea could work if providers agreed to creating local monopolies.

“That would create a truly bizarre market dynamic that is almost unimaginable today, where each operator ‘owned’ different cities, not just for [5G] but also for 4G LTE. If this kind of patchwork were to come to pass, the only viable solution might then be for companies to reciprocally wholesale their networks. You can use mine in Modesto if I can use yours in Fresno. To state the obvious, there is almost no imaginable path to that kind of an outcome today.”

The reason providers have not attempted this kind of “one provider” model in the past is because former FCC commissioners would have never supported the idea of retiring wireless competition and creating a cable monopoly-like model for wireless service. But things have changed dramatically with the advent of Chairman Ajit Pai, who potentially could be sold on the idea of granting local monopolies on the theory it will “speed 5G deployment” to a large number of different cities. Just as independent wireless providers lease access on the four largest carriers today (MVNO agreements), AT&T, Verizon, T-Mobile and Sprint could sell wholesale access to their networks to each other, allowing massive cost savings, which may or may not be passed on to customers.

But it would also bring an end to network redundancy, create capacity problems, and require every carrier to be certain their networks were interoperable with other wireless companies. The federal government’s emergency first responder program also increasingly depends on a wireless network AT&T is building that would give them first priority access to wireless services. How that would work in a city “designated” to get service from Verizon is unclear.

Restricting competition would protect profits and sharing networks would slash expenses. But such prospects were not enough to assuage Wall Street’s insatiable hunger for maximum profits. That is why analysts were unimpressed with Verizon’s presentation, which “lacked the financials” — precise numbers that explain how much the network will cost, how quickly it will be paid off, and how much revenue it can earn for investors.

A small cell attached to a light pole.

Verizon did sell investors on the idea 5G will put an end to having to wire fiber optics to every home. The service will also keep costs to a minimum by selling retail activation kits customers will install themselves — avoiding expensive truck rolls. Billing and account activation will also be self-service.

Verizon also announced a new compact 4G/5G combined antenna, which means 5G service can be supplied through existing macro/small cell 4G equipment. Verizon will be able to supplement that network by adding new 5G nodes where it becomes necessary.

Investor expectations are that 5G will cost substantially less than fiber to the home service, will not cost massive amounts of new investment dollars to deploy in addition to maintaining existing 4G services, will not substantially undercut existing providers, and will allow Verizon to market 21st century broadband speeds to its customers bypassed for FiOS fiber service. It will also threaten rural phone companies, where customers could easily replace slow speed DSL in favor of what Verizon claims will be “gigabit wireless.”

Despite that, Instinet’s Jeffrey Kvaal was not wowed by Verizon’s look to the future.

“Verizon’s initial fixed wireless implementation seems clunky and it withheld its pricing strategy,” Kvaal told his clients. He believes fixed wireless broadband will cost Verizon an enormous amount of money he feels would be better spent on Verizon’s mobile network. “Verizon glossed over 5-10x LTE upgrades that are already offering ~100Mbps of fully mobile service at current prices to current phones without line of sight. A better 5G story might be to free up sufficient LTE capacity to boost the unlimited cap from 25GB to 100GB for, say, a $25 premium. The ‘cut the cord’ concept was successful in voice, in video, and should be in broadband.”

Search This Site:

Contributions:

Recent Comments:

  • Josh: I'm not even clear why broadcasters would WANT such things stopped, at least so long as they can be included in viewership numbers. I mean shouldn't ...
  • dave: Well my bill in Northern VA went up over 25%. I will dump them in a week....
  • Duane Cunningham: I Wish They Would Give us Back CLOO and Chiller. Those Were Great Channels....
  • EJ: Two of your three providers are not going to expand anytime soon for sure. Frontier has no money to expand so that is not going to happen and Verizon ...
  • Chris: Im in Tri-Cities, WA and just caught wind of the upgrade. Charter said they'd be doing this at some point over the last year and it finally happened f...
  • JayS: It will be interesting to see how companies in Utility-Monopoly like markets (Cable Tv, Electric, Wired Internet) treat the "tax rate windfall". Then...
  • Adam Bryant: Please give us any updates you have on this! I received an approval letter on 11/29/2017 12:16 PM sayign they would be sending a check within 10 busin...
  • jgbbmodelrailroad: New York State has a weird law that means Internet Service Providers pay they same taxes on infrastructure regardless of how many customers it serves,...
  • nanaki: If your on a 100mbit card you will not see a full 100 mbit but do to over head will see between 70 and 85 90 if your computer and network are brand ne...
  • Jose: I can strongly relate to your frustration. My elderly neighbors were having issues with their Spectrum phone line always going down. It took about 6...
  • Jose: I believe there is some truth to the price of the cable box. Before my next door neighbors switched over to a Spectrum plan, they were paying about $...
  • Phillip Dampier: Charter has not fully converted former Time Warner Cable customers to its legacy Charter website and support platform, which is why TWC customers ente...

Your Account: