Home » Rural Broadband » Recent Articles:

California Consumer Seeks Class Action Case Against Frontier for False Advertising

Phillip Dampier September 22, 2016 Consumer News, Frontier, Public Policy & Gov't, Rural Broadband 1 Comment

frontier new logoDorothy Ayer said she was quoted a price of $69 a month for a package including landline phone and broadband service from Frontier Communications, but when she received her first bill, she claims she was charged $426.55.

Ayer filed a class action complaint against Frontier Communications Sept. 12 in U.S. District Court for the Central Division of California, claiming the phone company regularly engages in unlawful, unfair, and deceptive business practices including false advertising.

Ayer claims Frontier promised her all installation charges, activation fees and other miscellaneous costs found on her first bill would be waived, but now that the bill is in her mailbox, the company wants to be paid in full.

The lawsuit asks the court to recognize the economic harm and injury done not only to Ms. Ayer, but to other similarly situated Frontier customers. The lawsuit claims Frontier Communications benefits from falsely advertising the prices of its services without properly informing customers of the many other charges the company levies on the first bill.

If Ayer is successful, Frontier will be forced to notify all affected customers and presumably refund or credit their accounts.

The case is being handled by attorneys Todd M. Friedman and Adrian R. Bacon of Law Offices of Todd M. Friedman PC in Woodland Hills, Calif.

Scotland and Ireland Promise 100% Broadband Coverage

Phillip Dampier September 13, 2016 Public Policy & Gov't, Rural Broadband No Comments

scotlandThe governments of Scotland and Ireland are promising their rural constituents they will have an absolute guarantee of access to broadband within the next 3-5 years, regardless of where they live.

Ministers at Holyrood have issued a Prior Information Notice on Public Contracts Scotland to lay the foundation for rural broadband expansion by describing the scope of the project for the benefit of potential partners that may wish to bid for a contract. Scotland has achieved 85% coverage six months ahead of the target date, with many of the biggest challenges to reach isolated properties still ahead.

The Cabinet Secretary for Rural Affairs and Connectivity Fergus Ewing told the media there is more work to be done to guarantee every rural home in Scotland is connected.

“We are putting digital connectivity at the heart of our agenda and delivering 100% superfast broadband for Scotland by the end of the next Parliament is one of our priorities,” Ewing said.

Naughten

Naughten

In Ireland, skepticism has met the claims of Communications Minister Denis Naughten’s claim that every single home in Ireland will have access to reliable, high-speed internet within the next five years.

Today (2pm EDT), the minister is holding a live broadcast through Facebook to take questions about his commitment from communities across rural Ireland. Critics suggest it will be hard for those without internet access to share that fact with the minister when the event is taking place on a website they cannot easily access.

“Most people don’t believe that this National Broadband Plan is real. I can’t blame them. I was as big a cynic as everyone else in relation to it,” said Naughten. “As I said to the team in the department, we will under-promise and over-deliver, because I am sick and tired of promises being made, and (the government’s) failing on it.”

Naughten claims the “vast majority” of rural Ireland will be connected within three years. The last two years will be reserved to tackle the hardest cases.

“You are going to be dealing with peripheral areas – the sides of mountains, isolated rural valleys, and so forth – so it will take time to get to those particular locations,” he said.

Naughten said Irish broadband expansion wasn’t just to allow access to an online entertainment service.

“It will have a transformational impact on Ireland equivalent to rural electrification, and we want people to be prepared for it because it’s going to open up massive new opportunities for business and for entrepreneurs,” Naughten said. He added the benefits of telecommuting would improve the environment by reducing emissions and the demands on existing infrastructure, as well as opening up jobs opportunities in rural communities.

CenturyLink Broadband in Former Qwest Country is a Mess: Slow Speeds, Customers Leaving

molassesOnly half of CenturyLink’s customers in well-populated areas formerly served by Qwest can buy broadband service at 40Mbps or higher, while rural customers fare considerably worse with less than 25% able to get High Speed Internet at those speeds.

Customers have noticed and at least 65,000 canceled their broadband service with the phone company in the second quarter of this year, most presumably switching to their area’s cable operator.

“CenturyLink is by far the most abysmal telephone company I’ve ever had to deal with and I’m 63 years old,” shares Glen Canby in Arizona. Canby is a retired telephone company engineer that spent 40 years with a larger phone company serving the midwestern U.S.  “Their reviews online echo my own experiences, which have ranged from being quoted one price while being billed another, being locked into a term contract you didn’t ask for, and getting only a fraction of the speed they claim to sell.”

Canby is counted as one of CenturyLink’s 40Mbps-qualified customers, yet he actually receives less than 6Mbps service.

But that isn’t what CenturyLink tells the Federal Communications Commission. In a semi-annual broadband deployment report, the company claimed 51 percent of their customers in urban and suburban former Qwest service areas can subscribe to 40Mbps DSL or higher. But whether a customer is “qualified” to buy 40Mbps service is not the same as actually getting the speeds the company markets.

CenturyLinkCenturyLink attempts to cover their claims with fine print attached to their FCC submission: “The numbers shown in this chart reflect the percentages of households served by DSLAMs that are capable of providing the specified broadband speeds.” (A DSLAM is a network device typically used to extend faster DSL speeds to customers by reducing the amount of copper wiring between the telephone company’s central office and the customer’s home. Customers in a neighborhood typically share space on a DSLAM, in effect sharing a single connection back to the phone company.)

“That’s clever of them, because of course the DSLAM is just one link in the chain that ends with the ‘last mile’ between that equipment and my home, and that is where CenturyLink’s phone plant is at its weakest,” Canby writes. “I spent 20 years at a phone company dealing with last-mile DSL speed issues, so they cannot fool me.”

Canby blames the condition of CenturyLink’s infrastructure between the DSLAM serving him and his home for the problems, as well as overselling DSL service by packing too many customers onto a single DSLAM.

“It might be 40Mbps service at the remote end, but it drops to around 6Mbps on a good day by the time it reaches my house,” Canby complains. “Once the sun goes down, the speed drops to 3Mbps, which is a classic case of overselling to me because too many people are trying to share one connection at the same time. It has been this way since 2008 according to my neighbors.”

Back then, phone service was provided by Qwest, the former Baby Bell providing service in 14 sparsely populated western U.S. states — Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. Qwest was acquired by CenturyLink in 2011.

centurylink report

CenturyLink has promised to improve broadband speeds for former Qwest customers, but much of what counts as progress has been in more urban areas, while rural customers continue to languish. The company admits just 21.9 percent of rural households can get 40Mbps service. Only 47.6% can buy 12Mbps, 61.3% can get 5Mbps, and 83% can subscribe to 1.5Mbps. That leaves 17% of former Qwest customers with no broadband options at all. CenturyLink did not break out the percentage of customers that meet the FCC’s 25Mbps minimum speed definition of broadband.

“This is why CenturyLink loses customers to cable operators who have no problems trying to deliver internet access over their network, because it was built to support more bandwidth,” Canby shares. “They can usually deliver the same internet speed to customers no matter how far out they live while phone companies deal with a network built for making phone calls, not data.”

Company officials recognize they could do better and have promised investors another 2.5 million customers will be able to reach 40Mbps by the end of 2017. By the end of the year after that, CenturyLink hopes to reach 85% of customers with VDSL2, bonding, and vectoring technology to achieve 40Mbps service for most customers in their top 25 markets. But rural customers are likely to left waiting longer because of the costs to upgrade Qwest’s copper-based network, especially in smaller states like Idaho, the Dakotas and Wyoming.

“The only answer is cable or fiber broadband, and if you live in a small community it could be years before CenturyLink gets around to you,” Canby writes. “If it’s the same story all over town, I’d start advocating for a community-owned fiber network and not sit around and wait for CenturyLink to act, especially if there is no cable company in town.”

Our Take: Frontier to Bring Vantage TV to Metro Rochester, N.Y.

frontier new logoWith more than one million people in its footprint across western New York, Frontier Communications has the potential of picking up a significant number of new customers and keeping others from leaving with the introduction of its Vantage IPTV service (see our coverage from this spring to learn more about Vantage TV), set to arrive in the Greater Rochester area by the end of this year.

Rochester is Frontier’s largest legacy copper service area by population, encompassing the majority of the 585 area code. Yet for all that history and Rochester’s significant population base, over the last 15 years Frontier has owned the former Rochester Telephone, upgrades to its copper wire infrastructure have been modest. Significant segments of Frontier’s service area in Rochester still cannot support greater than 3-6Mbps DSL because the company has proportionally underinvested in network upgrades.

That underinvestment has allowed Time Warner Cable (now Charter) to amass a large majority of the residential broadband, phone, and television market in the region. Winning those customers back may be tough without considerable investment in ridding the Rochester area of large segments of copper wiring in place since the 1960s and 1970s. Frontier will be competing against a company that offers broadband speeds starting at 60Mbps and will be discounting its plans, packages and equipment fees for the next few years.

opinionVantage TV is powered by Frontier’s broadband service and will need more bandwidth than the company can now supply across parts of the three dozen communities it plans to market IPTV in the Greater Rochester area. CEO Dan McCarthy promised to upgrade much of Frontier’s copper network to support speeds of 50Mbps or higher, but that isn’t likely to happen this year in large parts of western New York.

Historically, Frontier has preferred acquiring other companies’ already-built fiber and fiber/copper networks instead of spending the money to build comparable networks from scratch. That is why there is a wide disparity between Frontier’s performance in its acquired FiOS and U-verse territories (Indiana, Pacific Northwest, and Connecticut) and its legacy network (Rochester) and acquired dilapidated copper communities (non-FiOS Verizon acquisition areas, most of West Virginia, etc.)

The Vantage TV announcement underwhelmed local media, with only one television station bothering to cover it. That may be a result of skepticism among area reporters who have had direct past experience using Frontier’s DSL service and share our attitude about Frontier’s press releases: only believe it when you actually see it.

Windstream Brings Kinetic TV to Communities Around Charlotte, North Carolina

Kinetic WindstreamWindstream will bring its fiber to the neighborhood service Kinetic TV to around 50,000 homes in 13 suburban and exurban communities surrounding Charlotte, N.C., to stay competitive with Time Warner Cable/Charter and a publicly owned cable system serving Mooresville.

The independent phone company submitted a formal application for a cable television franchise with North Carolina’s Department of the Secretary of State to begin offering television service in Albemarle, Badin, China Grove, Concord, Harrisburg, Hemby Bridge, Indian Trail, Kannapolis, Matthews, Mooresville, Mt. Pleasant, New London and Oakboro.

Windstream claims Kinetic TV leverages “a 100 percent fiber-backed network,” which leaves customers with the impression they are getting fiber optic delivery of television, broadband, and phone service. In fact, for many communities Windstream is constructing a network similar to AT&T U-verse. The phone company brings fiber optic cables into each neighborhood, but relies on existing copper wire infrastructure connecting individual homes to a nearby fiber optic-connected neighborhood hub. The upgrade allows Windstream to expand broadband capacity to support concurrent use of television, phone and internet access. For many Windstream customers complaining about the poor performance of Windstream’s DSL service, that offers a significant improvement. But Windstream does provide even better upgrades in some communities. In April 2016, Windstream launched gigabit speed internet service for seven North Carolina towns: China Grove, Concord, Davidson, Harrisburg, Kannapolis, Lewisville and Matthews. By applying for a statewide video franchise agreement in North Carolina, Windstream will be able to sell cable television service along with gigabit broadband speed.

Kinetic TV is now an exceptionally good deal for new customers.

Kinetic TV is currently available in Lincoln, Neb., Lexington, Ky., and Sugar Land, Tex.

Kinetic TV is already available in Lincoln, Neb., Lexington, Ky., and Sugar Land, Tex.

Windstream aggressively prices its most deluxe double play package of 50Mbps broadband and 270+ channels and Whole House DVR service at a one-year introductory price of $89.99 a month with a one-year service commitment. Customers can upgrade to a triple play package with the same 12 month commitment that includes a phone line with unlimited long distance calling for just $2 more — $91.99 a month. New double/triple-play customers also receive a one-time bill credit of $250, which will generally cover the first two months of service. This promotion is by far the best value for money. Unfortunately, after the promotion expires your price increases by $72.99 to $162.98 a month.

Kinetic TV operates with wireless set-top boxes that can be moved to different televisions as needed. The DVR can handle recording four channels at the same time and Windstream promises no lag while channel changing. The usual $80 installation fee is waived when new customers sign up under a promotional offer. Anyone can register to be notified about Windstream’s promotional offers on the company’s website and will likely receive an invitation as Kinetic TV becomes available in your area.

Earlier this year, Windstream debuted Kinetic TV in Sugar Land, Tex., joining the communities of Lexington, Ky. and Lincoln, Neb. The 13 small cities and communities in North Carolina will be Windstream’s fourth service area for Kinetic TV.

Kinetic TV's Whole House DVR

Kinetic TV’s Whole House DVR

The service has received generally positive reviews from those not expecting to place a lot of demand on the service. The fastest internet package tops out for most at 50Mbps and some customers report their actual speeds are sometimes slightly lower. Windstream currently offers Kinetic customers unlimited, uncapped data plans. If you cancel service before the end of your contract, the penalty as stated in Windstream’s terms and conditions is among the steepest we have ever seen: 100% of the charges you would have paid had you kept the service through the rest of your contract.

There is other fine print:

  • Kinetic TV cannot support more than four Standard Definition video streams (television sets in use concurrently). HD channels for recording or viewing are limited to between one and four, depending on the capacity of your connection. If you exceed it, the remaining video streams or recordings will be in Standard Definition.
  • Kinetic TV will not allow pay per view or video on demand charges to exceed $200 in a calendar month.
  • Prices above include one Kinetic TV receiver. Each additional box is billed at $7 a month, and may be limited in quantity. A Windstream gateway, also required for service, is assessed a separate monthly charge.
  • Your internet speeds may be affected by how many televisions are concurrently in use in your home.
  • Windstream collects information about programming watched, recorded, or accessed. Currently, they use this information to make general programming recommendations to all customers and/or specific recommendations to you based on your personal viewing habits.

(Windstream pricing information gathered by entering a residential street address in Sugar Land, Tex., Zip Code 77478.)

Christmas in August: Calif. Allows AT&T to Fine Itself and Keep the Money

att400California’s Public Utilities Commission (CPUC) couldn’t get cozier with AT&T if they moved regulators into the phone company’s plush executive suites.

In a 3-2 decision, the CPUC has given California phone companies that cannot manage to keep their wireline networks in good order an early Christmas, allowing the companies to effectively fine themselves for bad performance and keep the money.

Although the CPUC adopted a series of “automatic fines” for companies with chronic service problems (AT&T is by far the largest offender), it completely negated any sting by allowing companies to skip the fine by demonstrating they’ve invested at least twice the amount of the penalty in their networks. That is an expense AT&T’s bookkeepers can manage to document in minutes just by highlighting AT&T’s investments in other parts of the state. AT&T can argue investments in gigabit fiber in southern California or wiring fiber to business parks and cell sites improves service reliability for at least some customers.

CPUC president Michael Picker isn’t in any hurry either, helpfully offering AT&T and other phone companies two years to complete the investments that will cancel their fines:

In support of a request to suspend the fine, carriers may propose, in their annual fine filing, to invest no less than twice the amount of their annual fine in a project (s) which improves service quality in a measurable way within 2 years. The proposal must demonstrate that 1) twice the amount of the fine is being spent, 2) the project (s) is an incremental expenditure with supporting financials (e.g. expenditure is in excess of the existing construction budget and/or staffing base), 3) the project (s) is designed to address a service quality deficiency and, 4) upon the project (s) completion, the carrier shall demonstrate the results for the purpose proposed. Carriers are encouraged to review their service quality results to find appropriate target projects to invest funds.

Consumer advocates have accused AT&T of underinvesting in their wireline facilities for years. Because the CPUC does not require the investment be specifically targeted to correcting problems that prompted the fine, phone companies can continue to allow high cost/low profit rural infrastructure to deteriorate while targeting service-improving investments in more profitable or competitive service areas.

Steve Blum from Tellus Venture Associates, who has closely tracked telecom public policy matters in California for years, called it the most cynical decision he’s ever seen from the CPUC:

Fines, it seems, are just another cost of doing business for telecoms companies and don’t matter anyway. So why not let them keep the money?

Boiled down, that’s CPUC president Michael Picker’s rationale for establishing new telephone voice service level requirements backed up by a swinging schedule of penalties and then saying but we’ll let you keep the money if you invest it in infrastructure or pay staff. Or something. Anything.

Picker

Picker

Commissioner Mike Florio called the Picker’s proposal “unenforceable.”

The CPUC’s own staff has documented the troubling condition of landline service in the state. A staff report published in September 2014 showed the largest phone companies in the state — AT&T and Verizon (later sold to Frontier Communications) — that control 88% of landlines in California never met the CPUC’s minimum standard of repairing 90% of “out of service” trouble tickets within 24 hours during 2010-2013.

In 2010 and 2011, AT&T and Verizon needed an average of 110 hours to repair 90% of outages. That is 4.5 days. In 2012 and 2013, repair time marginally improved to an average of 72 hours (3 days). That is three days without any phone service or the ability to call 911, something the CPUC staff said compromised public safety.

AT&T and Verizon have papered the CPUC’s walls with “corrective action reports” over the years explaining why they failed to meet CPUC standards and what actions they planned to take to improve compliance. The staff report found those reports never resulted in improved compliance.

Commissioner Catherine Sandoval submitted an alternative plan of simple fines and a reporting system that gives equal weight to outages occurring in areas served by independent phone companies like Citizens Telecommunications Company of California (d/b/a Frontier) and SureWest Telephone (d/b/a Consolidated Telephone). Picker didn’t bother to hold a vote on Sandoval’s proposal, instead bringing his own proposal to the commission that approved it on a 3-2 voice vote. Florio and Sandoval voted no.

Despite the easy out, the state’s phone companies are still complaining the fine system was unnecessary because the free market was best equipped to manage service outages. If customers don’t like their provider, they can switch, assuming there is another provider available in the large rural and mountainous parts of the state.

Hedge Fund to FairPoint: Sell the Company to Maximize Shareholder Value

fairpoint greedAfter years of financial problems, union problems, and service problems, customers of FairPoint Communications in northern New England report the company has stabilized operations and has been gradually improving service. A hedge fund holding 7.5% of FairPoint agrees, and is now pressuring FairPoint’s board of directors to sell the company, allowing shareholders that bought FairPoint stock when it was nearly worthless to cash out at up to $23 a share.

That almost guarantees shareholders a huge profit while likely saddling whoever buys FairPoint with the same kind of sale-related debt that bankrupted FairPoint in 2009.

Maglan Capital’s David Tawil and Steven Azarbad communicated their displeasure to FairPoint CEO Paul Sunu in a letter earlier this summer that complains “shareholders have been extremely patient with the company’s operational turnaround and have suffered because the board has not been vigilant in protecting shareholder value.”

maglan“Not as patient as FairPoint’s own customers that spent several years of hell dealing with Verizon’s sale of its landlines in Vermont, New Hampshire, and Maine,” said FairPoint customer Sally Jackman, who lives in Maine. “It looks like the hedge funds want their pound of profits from another sale, exactly what FairPoint customers don’t need right now.”

Jackman endured three weeks of outages after FairPoint took over Verizon’s deteriorating landline networks in northern New England. The nearest cable company – Time Warner Cable, is almost 50 miles away, leaving Jackman with FairPoint DSL or no broadband service at all.

“Wall Street doesn’t care, they just want the money,” Jackman added. “They probably assume Frontier will pay a premium for FairPoint and then we can go through the kind of problems customers in Texas and Florida dealt with for over a month.”

The hedge fund managers argue that FairPoint “has made enormous strides” and notes “revenue is stabilizing and growth is coming.”

Maglan is well positioned to cash out with an enormous gain, having been an investor in FairPoint since the phone company declared Chapter 11 bankruptcy almost six years ago. The fund held shares when their price dipped below $4. Now, assuming FairPoint will put shareholders first “in ways that other wireline telecom companies do,” investors like Maglan hope to see a sale at a share price of $23, a 75% premium.

“With the company’s labor challenges behind it and with it $700 million of long-term debt removed from FairPoint’s balance-sheet, the time has come for the company to be sold or to be merged into a peer,” the hedge fund managers write.

Tawil (L) and Azarbad (R)

Tawil (L) and Azarbad (R)

Maglan recommends the company be sold to Communications Sales & Leasing, a tax-sheltered Real Estate Investment Trust spun off from Windstream with no current experience running a residential service provider. CS&L primarily provides commercial fiber services for corporations, institutions, and cell phone towers. Shareholders would benefit and CS&L would benefit from diversification, argues Maglan. But the hedge fund has nothing to say about the sale’s impact on FairPoint customers.

Maglan also demanded that while FairPoint explored a sale of the company, it must turn its investments away from its network and operations and start “generating value for shareholders immediately.” Maglan wants FairPoint to turn spending towards a $40 million share repurchase program (to benefit shareholders with a boost in the stock price) and initiate a recurring shareholder dividend payout. To accomplish this, FairPoint will have to designate much of its $23 million of cash on hand and a hefty part of the $52 million of free cash flow anticipated in 2016 directly to shareholders. The company may even need to tap into its revolving credit line if financial results are worse than expected.

Tawil and Azarbad characterize their plan as “well within the range of comfort.”

“It is high-time that the company and the board turn its attention directly to shareholders and, specifically, unlocking shareholder value,” the hedge fund managers add. “We have been a very patient group.”

But perhaps not as patient as they thought. This week, Maglan demanded that FairPoint remove four of its board members — Dennis Austin, Michael Mahoney, David Treadwell and Wayne Wilson, demanding they “immediately tender their resignations” and warned Maglan would push for a special meeting if no action was taken. The reason? Tawil and Azarbad said they did not think the four were “critical to the board in any way.”

“Wall Street has been about as useful as cancer for those of us trying to communicate with the outside world up here,” Jackman said. “I hope all three states get copies of these temper tantrums, because if FairPoint does sell, maybe this time they won’t approve the deal. After all, even the Titanic only sank once.”

Meet North Carolina’s Sen. Thom Tillis (R-ALEC/Time Warner Cable)

Tillis was honored in 2011 as ALEC's "Legislator of the Year" and received an undisclosed cash reward.

Tillis was honored in 2011 as ALEC’s “Legislator of the Year” and received an undisclosed cash reward.

Back when we first became aware of Republican member of the North Carolina legislature Thom Tillis around 2010, he was hard at work building his political future just as Republicans were poised to take control of the state legislature for the first time since the days of Reconstruction. Despite running unopposed in 2010, Tillis raised more money from cable and phone companies than any other lawmaker in the state, depositing $37,000 before knowing he would be the next Speaker of the North Carolina House of Representatives in January 2011. To celebrate, AT&T, Time Warner Cable, and Verizon each gave Tillis $1,000 just a few weeks before the swearing-in ceremony. It was money well spent, if you were a cable or phone company doing business in North Carolina.

Tillis left the legislature in 2015 to become the junior U.S. Senator from North Carolina. The telecom industry made sure to keep the campaign contributions flowing, if only to give their thanks for Tillis’ unwavering support for their agenda. Tillis doesn’t care much for his rural constituents still waiting for something better than dial-up internet access and as long as his campaign coffers remain bulging with corporate contributions, he doesn’t think he has much to fear from the state’s voters either. After all, he survived accusations from a resigning House Finance chairman that he had a secret business relationship with Time Warner Cable.

Raleigh’s The News & Observer felt it was their duty to mention Tillis in their editorial pages anyway, taking him to task for “cheering a loss for North Carolina consumers last week after a federal appeals court upheld a cable company protection law that he supported as state House speaker in 2011.”

The newspaper is talking about North Carolina’s infamous anti-public broadband bill that was literally constructed by lobbyists working for Time Warner Cable. The law effectively made it impossible for community broadband providers to bring their much-needed service to adjacent communities that have waited more than a decade for companies like Time Warner Cable, AT&T, CenturyLink and others to offer internet access in rural and underserved parts of the state.

Tillis personally helped shepherd the corporate protection bill, designed to shield incumbent cable and phone companies from community competition, through the state legislature, supporting it every step of the way. It would become law in 2011 and rural broadband in North Carolina hasn’t gotten any better since. In fact, it’s almost stagnant. But Tillis cannot say the same thing about his campaign bank accounts, which continue to bulge with corporate donations now in excess of $11 million.

An effort by the Federal Communications Commission to pre-empt the state law failed in a federal appeals court, much to the delight of Thom Tillis, something the newspaper calls an “insult” to North Carolinians looking for a better deal.

“Today’s ruling affirms the fact that unelected bureaucrats at the FCC completely overstepped their authority by attempting to deny states like North Carolina from setting their own laws to protect hard-working taxpayers and maintain the fairness of the free market,” Tillis said in a statement. Cough, cough.

The newspaper’s response:

Translation: Time Warner and other companies, thank goodness, will retain control of the market without having to worry about towns competing with them and thus will be able to charge people whatever the market will bear.

For Tillis to say the court ruling, which should be appealed, is a triumph for taxpayers is preposterous. It’s a setback. The “free market” he backs is one free of competition from municipal broadband services that offer a better product at a lower price.

Sixth Circuit Court of Appeals Reverses FCC Rule Allowing Public Broadband Expansion

6th CircuitA federal appeals court has reversed an effort by the Federal Communications Commission to pre-empt state laws restricting municipal broadband expansion in Tennessee and North Carolina, ruling the FCC exceeded its authority by interfering with both states’ rights to define the boundaries where the community broadband networks can and cannot operate.

In a near-unanimous decision (with some minor dissent from one judge), judges from the Sixth Circuit Court of Appeals found the FCC exceeded their authority.

“The FCC order essentially serves to re-allocate decision-making power between the states and their municipalities,” the court ruled. “This is shown by the fact that no federal statute or FCC regulation requires the municipalities to expand or otherwise to act in contravention of the preempted state statutory provisions. This preemption by the FCC of the allocation of power between a state and its subdivisions requires at least a clear statement in the authorizing federal legislation. The FCC relies upon § 706 of the Telecommunications Act of 1996 for the authority to preempt in this case, but that statute falls far short of such a clear statement. The preemption order must accordingly be reversed.”

In other words, the court ruled that the FCC’s belief that Section 706 of the Telecommunications Act of 1996 allowed it to pre-empt state broadband laws goes too far. The judges opined Congress would have to rewrite the law to clearly state it was acceptable for the federal branch of government to overrule how a community or state decides to draw boundaries for public utilities.

EPB is the municipal utility in Chattanooga, Tenn.

EPB is the municipal utility in Chattanooga, Tenn.

The ruling will have an immediate impact on plans by municipal utility EPB in Chattanooga and city-owned provider Greenlight in Wilson, N.C., to expand service outside of their respective service areas. EPB has been working inside the Tennessee legislature to overturn or change the current broadband law but has been unsuccessful so far. Comcast and AT&T have lobbied the Tennessee legislature to keep municipal competitors from expanding, even where neither company offers service.

“Ultimately, Tennessee’s broadband gap is a problem for Tennesseans, and we need a Tennessee solution,” said David Wade, president of EPB. “We will continue to work with the growing number of state legislators and grassroots citizens interested in removing the barriers that prevent EPB and other municipal providers from serving our neighbors in surrounding areas who have little or no access to broadband. We are further encouraged by Commissioner Randy Boyd’s interest in addressing the lack of broadband in rural areas. As the head of the Tennessee Department of Economic and Community Development, he is especially well positioned to join with state lawmakers in addressing this challenge on behalf of Tennesseans.”

Greenlight announces gigabit service for Wilson, N.C.

Greenlight announces gigabit service for Wilson, N.C.

North Carolina’s law was effectively drafted by Time Warner Cable, who shepherded the bill through the Republican-controlled state legislature, making huge political campaign contributions along the way, eventually winning enough votes to see the bill become law.

The ruling is a serious blow to FCC chairman Thomas Wheeler, who made municipal broadband expansion one of his active agenda items at the FCC. Wheeler believed the two state laws were not supposed to inhibit rural broadband expansion. Critics of the laws contend they were written and lobbied for by the same incumbent cable and phone companies that could eventually face competition from public broadband networks.

“Let’s be clear: industry-backed state laws to block municipal broadband only exist because pliant legislators are listening to their Big Cable and Big Telecom paymasters,” said Michael Copps, a former FCC commissioner. “This decision does not benefit our broadband nation.”

Wheeler

Wheeler

Wheeler tacitly agreed, saying today’s decision “appears to halt the promise of jobs, investment and opportunity that community broadband has provided in Tennessee and North Carolina.”

“[Since 2015], over 50 communities have taken steps to build their own bridges across the digital divide,” Wheeler said in written comments. “The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price.”

The ruling can be appealed to the U.S. Supreme Court, and the FCC has an excellent chance of getting the high court to overturn today’s decision. Rulings issued by the Sixth Circuit were reversed by the Supreme Court 24 out of the 25 times they were reviewed in the five annual terms starting in October 2008 and ending in June 2013 — the highest number of any federal appellate court during that time period.

Broadband activists can also return to the two state legislatures and urge that the broadband laws be modified or repealed. Wheeler seems ready to join the fight.

“Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice,” Wheeler said. “Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice.”

N.Y. Governor Announces “Sweeping Progress” Towards Broadband-for-All-NY’ers Goal

broadband nyGovernor Andrew M. Cuomo yesterday announced that the “New NY Broadband Program” is well on its way to achieving “sweeping progress toward achieving its nation-leading goal of broadband for all” New Yorkers.

The governor claimed that 97% of New York residents will have access to high-speed internet access by 2017, with a vague goal of serving 100% of New Yorkers by the end of 2018.

To do this, Gov. Cuomo relies heavily on the state’s new and overwhelmingly dominant cable operator – Charter Communications, which closed on its acquisition of Time Warner Cable earlier this summer. A press release promoting the governor’s efforts quotes Charter’s executive vice president of government affairs Catherine Bohigia as being excited to work with the governor and his administration to expand service to about 145,000 households currently not served by Time Warner Cable or Charter in New York.

Charter officials are working with the Public Service Commission to identify the households to be served, and highly redacted documents suggest Charter is identifying new housing developments and areas immediately next to existing Charter/Time Warner Cable service areas for this expansion.

A second separate plan to subsidize private cable and phone companies to help cover the costs of reaching another 34,000 homes that won’t be served by Charter is only expected to reach 50% of the remaining unserved homes and businesses in the state. A further round of funding will target the the remainder of unserved areas, including certain rural landline areas where Verizon has shown no interest in offering customers internet access of any kind.

Charter Communications

Charter Communications has effectively canceled the Time Warner Cable Maxx upgrades that were either underway, in progress, or in the planning stage in upstate New York. Instead, Charter plans to speed up the roll-out its own originally proposed upgrade, which includes two tiers: 60 and 100Mbps, for more than two million upstate homes and businesses by early 2017 in Buffalo, Rochester, Syracuse, Binghamton and Albany.

Customers in Central New York are likely to be left in limbo, some already getting Maxx upgraded 300Mbps internet access while others were scheduled to get the speed upgrade the same week Charter froze further Maxx upgrades. Those customers are now likely to receive a maximum of 100Mbps service sometime next year under Charter’s new plan.

Charter is also negotiating with state officials about where it will deploy broadband to 145,000 currently unserved homes in upstate New York over the next four years.

State-funded Rural Broadband Awards – Round I

New York State will help subsidize broadband rollouts to approximately 34,000 homes and businesses currently not served (or not served adequately) in rural areas. All but two of these projects will rely on fiber to the home service and each will offer service to a few thousand people:

Applicant Namesort descending Technology REDC Region Census Blocks Housing Units Total Units State Grant Total Private Match Total Project Cost
Armstrong Telecommunications, Inc. FTTH Finger Lakes, Southern Tier, Western NY 176 1,135 1,162 $3,930,189 $982,549 $4,912,738
Armstrong Telephone Company FTTH Southern Tier, Western NY 74 466 504 $1,778,256 $444,564 $2,222,820
Citizens Telephone Company of Hammond, N.Y., Inc. FTTH North Country 146 1,789 1,860 $3,316,810 $829,202 $4,146,012
Empire Access FTTH Southern Tier 124 719 724 $1,797,894 $449,474 $2,247,368
Empire Access FTTH Southern Tier 117 1,202 1,268 $1,598,480 $399,620 $1,998,100
Frontier Communications FTTH Southern Tier 1 62 65 $67,592 $16,899 $84,491
Frontier Communications FTTH North Country 3 188 216 $129,634 $32,409 $162,043
Frontier Communications FTTH Southern Tier 12 129 142 $197,104 $49,276 $246,380
Frontier Communications FTTH Capital Region 23 391 394 $318,304 $79,576 $397,880
Frontier Communications FTTH Mohawk Valley 30 402 405 $924,663 $231,166 $1,155,829
Frontier Communications FTTH North Country 105 1,928 2,096 $1,702,246 $425,562 $2,127,808
Germantown Telephone Company FTTH Capital Region 208 2,195 2,334 $2,512,562 $628,140 $3,140,702
Haefele TV Inc. FTTH Southern Tier 413 3,029 3,238 $271,568 $67,892 $339,460
Hancock Telephone Company FTTH Southern Tier 136 1,505 1,675 $4,915,920 $1,228,981 $6,144,901
Heart of the Catskills Communications Hybrid-Fiber Coax Southern Tier 216 2,836 3,177 $1,224,946 $524,977 $1,749,923
Margaretville Telephone Company FTTH Mid-Hudson, Southern Tier 209 1,882 2,002 $4,791,505 $2,053,503 $6,845,008
Mid-Hudson Data Corp Fixed Wireless Capital Region 60 647 663 $950,184 $237,546 $1,187,730
Mid-Hudson Data Corp FTTH Capital Region 6 354 362 $59,155 $14,789 $73,944
State Telephone Company, Inc. FTTH Capital Region 231 3,801 4,134 $5,805,600 $1,451,400 $7,257,000
State Telephone Company, Inc. FTTH Capital Region 101 516 595 $2,914,960 $728,740 $3,643,700
TDS Telecom FTTH Southern Tier 156 2,369 2,423 $1,895,390 $1,895,390 $3,790,780
TDS Telecom FTTH North Country 74 506 543 $1,084,000 $1,084,000 $2,168,000
TDS Telecom FTTH Central NY, Finger Lakes 106 996 1,038 $1,424,793 $1,424,793 $2,849,586
TDS Telecom FTTH Southern Tier 395 3,528 3,551 $4,989,570 $4,989,570 $9,979,140
The Middleburgh Telephone Company FTTH Capital Region, Mohawk Valley 250 1,596 1,651 $5,562,548 $1,390,637 $6,953,185
Federally Funded Rural Broadband Awards – Round II

After Verizon abdicated any interest in participating in rural broadband expansion funding through the FCC’s Connect America Fund, New York’s Broadband Program Office (BPO) and the Public Service Commission urged the FCC to keep the original funding intended for rural New York intact and open to other applicants seeking to build rural broadband projects. The FCC has not fully committed to do this, but it is an agenda item. Assuming this funding becomes available, it will be used to help pay for independent broadband providers or rural cable operators to begin delivering broadband service into still unserved parts of New York not included in the Charter expansion or Round I projects noted above. Many Verizon territories are expected to be included.

Applicants will have to provide at least 100Mbps service in most places or a minimum of 25Mbps in the most remote corners of New York. The application form discourages applicants from delivering broadband over DSL or wireless and clearly favors fiber to the home or cable broadband technology. Price controls will be in place for the first few years to assure affordability and those winning funding are strictly prohibited from introducing usage caps or usage-billing.

A vaguely defined “third phase” is scheduled to launch early next year to offer internet access to all remaining unaddressed service areas. Nobody mentions where the money is coming from to cover the last 1-3% of unserved areas, which are likely to be notoriously expensive to reach.

Gov. Cuomo explains progress on his New York Broadband for All program. (26:31)

Search This Site:

Contributions:

Recent Comments:

  • modal: I pay a visit each day some websites and websites to read content, however this blog offers quality based writing....
  • FredH: If your area is upgraded to be getting 300Mbps down and you aren't, there could be any number of factors preventing it that are your responsibility, n...
  • Ev: Why bother rearranging deck chairs on the titanic? Drop your cable TV service, put up an antenna for a bunch of channels, buy a DVR, and if you still...
  • Ev: People need to start recording ail their phone calls with company reps. They're recording it already, for their benefit. One little app on your phone...
  • beth: Called TWC today. They're the only cable provider in my area. I pay for internet and phone unfortunately still hooked to Direct for the football seaso...
  • Austin: "Responsible usage".... "limited resource"???? Give me a break! It's not like internet is mined out of a pocket in the ground. How can these idiots ke...
  • SendDavid: If you're in NY, you can also submit a claim for a refund with David, Inc. and they'll do all the work for you--50% of claims get refunded: http://bit...
  • SendDavid: If you're in NY, you can submit a claim for a refund with David, Inc.--50% of claims get refunded: http://bit.ly/2cSmmE9...
  • Seluryar: Its very hard for me to see many ISP's getting behind this since it seems many of them seem stingy on their upload speeds....
  • Justin Ayers: They have plans up to just 30 GB in our area, for crazy prices. The cellular Internet is also super-expensive. They charge $10 a month just for their ...
  • Justin Ayers: You think Time Warner is bad? Time Warner is a dream compared with Exede and cellular Internet. Our average data usage was 60 GB a month with Time War...
  • Mike: Lucky you! We got the screw job here in Rochester. We have a slow phone company so we don't have any other option....

Your Account: