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Outage Hits Comcast, Other Internet Customers; CenturyLink’s Level 3 Takes Responsibility

Phillip Dampier November 6, 2017 CenturyLink, Comcast/Xfinity, Consumer News No Comments

The culprit?

A major internet outage is affecting internet users nationwide since this morning, particularly those subscribed to Comcast’s internet service.

“Some customers are having issues with their XFINITY Internet service. We apologize & appreciate your patience while we work to fix,” Comcast tweeted to its customers this morning.

The outages are not just affecting Comcast customers, however, with sporadic slowdowns and problems also reported by Charter/Spectrum, AT&T, and Verizon customers.

One factor that may explain the outage affecting customers beyond Comcast is CenturyLink’s Level 3, which provides backbone services for several ISPs.

Outages affecting Level 3 just happen to be in major Comcast service areas.

Level 3 eventually did take responsibility for the outage in a statement to the media:

On Monday, Nov. 6, our network experienced a service disruption affecting some customers with IP-based services. The disruption was caused by a configuration error. We know how important these services are to our customers. Our technicians were able to restore service within approximately 90 minutes.

On Nov. 1, Level 3 officially became part of CenturyLink, as part of a $30 billion acquisition. Hopefully CenturyLink will spend a bit more and build additional redundancy into Level 3’s network.

As of 30 minutes ago, Comcast claims the internet outage has eased.

Despite Net Neutrality, Providers Launch Fiber Spending Spree

Despite claims from some industry-backed researchers and former members of Congress that Net Neutrality has reduced investment in telecommunications, a new research note from Deutsche Bank shows America’s top telephone and cable companies are spending billions on fiber upgrades to power wireless, business, and consumer broadband.

“Telecoms have become much more public signaling their intent to increase fiber investment, with AT&T and Verizon leading the spending ramp,” reports Deutsche Bank Markets Research.

Verizon has been on a fiber spending spree in the northeastern United States, signing contracts with Corning and Prysmian worth $1.3 billion to guarantee a steady supply of 2.5 million miles of fiber optic cable Verizon plans to buy over the next three years. Much of that spending allows Verizon to lay a foundation for its future 5G wireless services, which will require fiber to the neighborhood networks. But in cities like Boston, Verizon is also once again expanding its FiOS fiber to the home service to consumers.

AT&T is committed to connecting 12.5 million homes to gigabit-ready fiber broadband by 2019 — part of a deal it made with the FCC to win approval of its acquisition of DirecTV. AT&T claims it has already connected 5.5 million homes to its gigabit AT&T Fiber network, expected to reach 7 million by the end of this year.

Deutsche Bank thinks providers’ future drive towards 5G service will also simultaneously benefit fiber to the home expansion, because the same fiber network can power both services.

“To support the upcoming innovations such as autonomous driving, IoT, smart cities, the US needs to densify its fiber network,” Deutsche Bank said. “The U.S. fiber penetration rate is 20% vs. 75% for leading OECD countries, which suggests a large gap needs to be closed.”

Altice founder Patrick Drahi (second from left) and Altice USA CEO Dexter Goei (center) visit a Cablevision fiber deployment on Long Island, N.Y.

The bank predicts companies will spend around $175 billion over the next 10 years building out their fiber networks, with most of the spending coming from the phone companies, who may see fiber buildouts as their best attempt to level the playing field with cable operators’ hybrid fiber-coaxial cable networks. As cable operators expand their networks to reach more business parks, they have been gradually stealing market share for phone and data services from phone companies. Consumer broadband is also increasingly dominated by cable operators in areas where phone companies still rely on selling DSL services.

FierceCable notes Comcast and Altice have stepped up aggressive spending on fiber networks for their consumer and business customers. Altice is planning to decommission Cablevision’s existing coaxial cable network and move customers to fiber-to-the-home service. Comcast is deploying fiber services while still selling traditional cable broadband upgraded to DOCSIS 3.1, which supports substantially faster broadband speeds. The two networks co-exist side-by-side. Customer need dictates which network Comcast will use to supply service.

Customers benefit differently in each state, depending on what type of service is available. Comcast’s large footprint in Pennsylvania, outside of Philadelphia, is usually served by traditional coaxial cable. Verizon still sells DSL in much of the state. In Massachusetts, Verizon is building out its FiOS network to serve metro Boston while Comcast will depend on DOCSIS 3.1 upgrades to speed up its internet service. In New Jersey, long a battleground for Verizon’s FiOS service the company stopped aggressively expanding several years ago, Comcast has announced DOCSIS 3.1 upgrades for the entire state.

Independent phone companies are also seeing a bleak future without fiber upgrades. Both CenturyLink and Windstream are planning moderately aggressive fiber expansion, particularly in urban service areas and where they face fierce cable competition. Frontier continues its more modest approach to fiber expansion, usually placing fiber in new housing developments and in places where its copper facilities have been severely damaged or have to be relocated because of infrastructure projects.

None of the companies have cited Net Neutrality as a factor in their future broadband expansion plans. In fact, fiber networks have opened the door to new business opportunities to the companies installing them, and the high-capacity networks are likely to further reduce traffic/transit costs, while boosting speeds. That undercuts the business model of selling digital slow and fast lanes.

CenturyLink Drops Hard Usage Cap Trial; “No Longer Aligns With Our Goals”

Phillip Dampier July 3, 2017 CenturyLink, Consumer News, Data Caps 4 Comments

CenturyLink has ended a year-long trial of usage-based billing for its customers, claiming charging for excess usage “no longer aligns with our goal to simplify offers and pricing for our customers.”

The data cap and overlimit program was first market tested in Yakima, Wash. in 2016, but has now been dropped with no plans to extend usage-based billing to any other CenturyLink customers.

“If you incurred overage charges related to this program, those charges will be credited and appear on your July monthly billing statement,” CenturyLink reports. “No action is required on your part, and there are no impacts to your existing CenturyLink service.”

CenturyLink does have a program of “soft caps” — generally unenforced data allowances for its customers:

  • 1.5Mbps plan: 150GB
  • 1.5Mbps-999Mbps: 250GB
  • 1Gbps: No download limit

“CenturyLink will weigh variables such as network health, congestion, availability of customer usage data, and the line speed purchased by the customer as factors when enforcing this policy,” writes the phone company. “Customers who are subject to enforcement receive a web notification and/or written communication from CenturyLink providing notice that they have exceeded their usage limit.”

In practice, very few customers are ever bothered by CenturyLink regarding their usage.

CenturyLink Buying Level 3 Communications for $24 Billion

Phillip Dampier October 31, 2016 CenturyLink, Competition, Reuters 1 Comment

centurylink(Reuters) – CenturyLink, Inc. said it would buy Level 3 Communications, Inc., in a deal valued at about $24 billion to expand its reach in the competitive market that provides communications services to business customers.

CenturyLink’s shares slumped 12.4 percent to $26.61 in afternoon trading on Monday, while shares of Level 3 surged 4.9 percent to $56.73.

The cash-and-stock deal, expected to close in the third quarter of 2017, comes as the companies struggle with a slowdown in their core operations and as they face telecommunications rivals like AT&T Inc., Comcast, and Verizon Communications Inc., who also offer internet and phone services to businesses.

CenturyLink aims to create a formidable enterprise telecom player as business clients seek more bandwidth and faster networks to move data traffic.

“We’ve become a much larger and more focused enterprise player,” CenturyLink Chief Executive Glen Post said in an interview after the deal was announced on Monday.

“Together with Level 3, we will have one of the most robust fiber network and high-speed data services companies in the world,” Post said separately in a statement.

Post, who has worked at CenturyLink since 1976, will lead the combined company, while Level 3 Chief Financial Officer Sunit Patel will be chief financial officer.

Analysts were concerned over the fact that CenturyLink will be using its shares to cover the purchase price, which they said would raise its debt-to-equity ratio.

“Our hangup on valuation stems from the fact that CenturyLink is using its shares to fund 60 percent of the purchase price,” Morningstar analyst Michael Hodel said in a research note.

Big Premium

The offer of about $66.50 per share represents a premium of 42 percent to Level 3’s close on Wednesday before reports surfaced on a potential pact between the two companies.

CenturyLink CEO and President Glen F. Post

CenturyLink CEO and President Glen F. Post

CenturyLink, which reported third-quarter earnings on Monday, forecast lower-than-expected fourth-quarter revenue of $4.28 billion-$4.34 billion, dragged by a decline in its wireline business. The company expects an adjusted profit of 53-59 cents per share for the quarter.

Analysts polled by Reuters expect revenue of $4.38 billion and earnings of 64 cents in the fourth quarter.

Monroe, La.-based CenturyLink, which provides telephone services mainly in rural areas, has been investing to grow its enterprise business and upgrade its networks in recent years. Level 3 has one of the most desirable global fiber networks and provides internet services to clients like Apple and Netflix.

Including debt, the deal is valued at about $34 billion and would result in cost savings of $975 million per year, CenturyLink executives said on a conference call with investors.

“These are two companies looking for scale and synergies in reaction to the struggles that both companies are facing in their core business to deliver on growth,” BTIG analyst Walter Piecyk said in an email.

CenturyLink, which operates more than 55 data centers in North America, Europe and Asia and provides broadband, voice, video, data and managed services, has been exploring a sale of some of its data center assets. That sale process is underway, CenturyLink executives said on the call.

Colorado-based Level 3 narrowly avoided bankruptcy in the early 2000s and was helped by got a cash infusion of $500 million in 2002 from investors including Warren Buffett. It purchased enterprise company TW Telecom in 2014 for $5.65 billion.

It’s unlikely that the CenturyLink-Level 3 deal would face regulatory hurdles, analysts said.

The global enterprise market is “so crowded with competition, with more and more new entrants building fiber every day that we see little cause for concern by regulators,” Drexel Hamilton analyst Barry Sine said in a research note.

The breakup fee is of a “normal size” and will be divulged when CenturyLink files its merger agreement with regulators shortly, Post said without providing details.

(Reporting by Malathi Nayak in New York; Narottam Medhora and Supantha Mukherjee in Bengaluru; Additional reporting by Lauren Hirsch in New York; Editing by Shounak Dasgupta and Bernadette Baum)

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.”

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