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Fiber to the Press Release: Atlantic Broadband Announces 1Gbps in Miami… (For 40 Homes)

atlanticMore people will read this story than Atlantic Broadband has current customers for its 1Gbps broadband project in Miami.

“Atlantic Broadband is proud to be the first company to deliver 1 Gigabit Internet service to its customers here in the Miami Beach area,” said David Keefe, Atlantic Broadband’s senior vice president and general manager of the South Florida region. “While other companies are talking about what they will be doing, Atlantic Broadband moved forward and started offering this service in one of its communities. We look forward to extending access to our Gigabit Internet service to other properties and communities within our Miami footprint.”

Although Mr. Keefe isn’t being modest, his company’s gigabit broadband coverage area certainly is.

At present, the company serves just 40 properties with the super high-speed broadband service in high-income Indian Creek Village — the 8th richest community in the United States.

The tiny village of Indian Creek is made up of 40 properties and is the 8th richest community in the U.S.A.

The tiny village of Indian Creek, in the Miami-Dade area, is made up of 40 properties and is the 8th richest community in the U.S.A.

Designed to appeal to residents who can spare no expense, the Atlantic Broadband package also includes more than 350 TV channels powered by TiVo, integrated access to Netflix, and unlimited phone service for up to four lines.

An Atlantic Broadband spokesperson wouldn’t reveal the price of the package, and admitted customers cannot choose standalone broadband-only service.

“The needs of Indian Creek Village were unique so custom service packages were created that include all of Atlantic Broadband’s TV services, Gigabit Internet and four phone lines,” a spokeswoman told Multichannel News. “Currently, there is not a published a standalone price for Gigabit Internet.”

Residents in the wealthy enclave include Victoria’s Secret model Adriana Lima, Spanish singer Julio Iglesias, his son Enrique Iglesias, Robert Diener, co-founder of Hotels.com, Edward Lampert, hedge fund billionaire and owner of what is left of Kmart and Sears, Don Shula, retired football coach, Charles Bartlett Johnson, mutual fund billionaire, billionaire investor Carl Icahn and former Philadelphia Eagles owner and billionaire art collector Norman Braman.

Other famous residents both past and present have included Beyoncé and Jay-Z, pro golfer Raymond Floyd, coach Rick Pitino, U.S. Senator George Smathers, Sheik Mohammed al Fassi, television host Don Francisco, co-founder of Calvin Klein Barry Schwartz, radio magnate Raul Alarcon, coal and oil executive, heiress and philanthropist Suzie Linden, Arthur I. Appleton, President of Appleton Electric Company and founder of the Appleton Museum of Art and Bridlewood Farm, and his wife Martha O’Driscoll a former Hollywood actress.

Atlantic Broadband has not ripped out classic cable infrastructure for its less-well-to-do customers outside of the village in the Miami-Dade area and relies on RF over Glass technology for its network extensions. That allows the company to keep its legacy equipment in place while giving some residents access to fiber and others traditional coaxial cable.

Atlantic serves an island of customers in the Miami Beach area, but most of Miami gets its cable service from Comcast. Competitor AT&T has promised fiber upgrades and gigabit speeds for its own customers in the Hialeah, Hollywood, Homestead, Opa-Locka, and Pompano Beach areas, but no time frame has been announced for the upgrade.

Atlantic Broadband will have one advantage over AT&T U-verse. It does not have usage caps.

Atlantic Broadband serves around 230,000 residential and business subs in western Pennsylvania, Miami Beach, Maryland/Delaware, and Aiken, S.C. It is owned by Cogeco Cable of Canada.

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Kentucky Wakes Up: AT&T Dereg Bills Will Not Bring Better Broadband, Will Make Rural Service Worse

luckykyQuestion: How will ripping out landline infrastructure in Kentucky help improve broadband service for rural areas?

Answer: It won’t.

This is not for a lack of trying though. AT&T has returned to the Kentucky state legislature year after year with a company-written bill loaded with more ornaments than a Christmas tree. In the guise of “modernizing” telecom regulation, AT&T wants to abolish most of it, replaced by a laissez-faire marketplace for telecommunications services not seen in the United States since the 1910s. AT&T claims robust competition will do a better job of keeping providers in check than a century of oversight by state officials. But customers in rural Kentucky have a better chance of sighting Bigfoot than finding a competitive alternative to AT&T’s telephone and DSL service. AT&T retains a monopoly in broadband across much of the state where cable operators like Time Warner don’t tread.

This year, Senate Bill 99, dubbed “The AT&T Bill” received overwhelming support from the Kentucky Senate as well as in the House Economic Development Committee. AT&T made sure the state’s most prominent politicians were well-compensated with generous campaign contributions, which helped move the bill along.

Since 2011, AT&T’s political-action committee has given about $55,000 to state election campaigns in Kentucky, including $5,000 to the Senate Republican majority’s chief fundraising committee and $5,000 more to the House Democratic majority’s chief fundraising committee. The company spent $108,846 last year on its 22 Frankfort lobbyists.

That generosity no doubt helped Republican Floor Leader Jeff Hoover find his way to AT&T’s talking point that only by “modernizing” Kentucky’s telecom laws would the state receive much-needed broadband improvements.

Hoover

Hoover

Hoover is upset that the state’s House Democratic leadership stopped AT&T’s bill dead in its tracks, despite bipartisan begging primarily from AT&T’s check-cashers that the bill see a vote. Speaker Greg Stumbo, whose rural Eastern Kentucky district would have seen AT&T’s landline and DSL service largely wiped out by AT&T’s original proposal, would hear none of it.

He has been to AT&T’s Deregulation Rodeo before.

“When I served as attorney general, I dealt with deregulation firsthand to protect consumers as much as possible,” he wrote in a recent editorial. “In most cases, deregulation led to worse service and less opportunity to correct the problems customers invariably faced. It is now our job as House leaders to continue defending Kentucky’s consumers.”

Stumbo, like many across Kentucky, have come to realize that AT&T’s custom-written legislation gives the company a guarantee it can disconnect rural landline service en masse, but does not guarantee better broadband as a result.

“In fact, there is nothing in the legislation guaranteeing better landline, cell or Internet service,” Stumbo noted.

Hoover declared that by not doing AT&T’s bidding, Kentucky was at risk of further falling behind.

“This decision by Stumbo and House Democrat leadership, like many others, has unfortunately had a real effect on the lives of Kentuckians as we will go, at minimum, another year before these private businesses can focus on increasing broadband speed throughout the commonwealth,” he wrote. “It is another year in which we risk falling further behind our neighboring states and others in the competitive world of economic development.”

Stumbo

Stumbo

Stumbo responded the Republicans seemed to have a narrow vision of what represents progress. Hoover and his caucus voted against the House budget that included $100 million for a broadband improvement initiative spearheaded by Gov. Steve Beshear, Rep. Hal Rogers, and private interests.

By relying entirely on a deregulated AT&T, rural Kentucky residents may lose both landline and DSL service and be forced to wireless alternatives that come at a high price.

“There are citizens, many of whom are elderly or on fixed income, who depend on their landline or cannot afford more expensive options; these are the people I am fighting for,” said Stumbo. “I do not want to get a call from a family member who lost a loved one because that person could not reach a first responder in time.”

State residents watching the debate have increasingly noticed discrepancies between what AT&T wants and what it is promising Kentucky.

“No one has ever been able to satisfactorily explain to me how allowing phone companies to abandon landline service will help expand broadband Internet, especially since DSL service requires phone lines,” said H.B. Elkins, Public Information Officer at KYTC District 10.

Matt Simpson recognizes that Senate Bill 99 and other similar measures will not change the economic realities of AT&T’s for-profit business.

“Without regulation, the for-profit companies like AT&T are going to invest in the most profitable areas,” he wrote. “If they thought they could make a huge profit providing broadband in rural areas, they would already be doing it. Deregulation is not going to change that profit calculation. They will still view rural broadband as unprofitable, and they still won’t do it. The bill was a total giveaway to the industry, with no offsetting benefit to the consumers.”

Michael Yancy summed up his views more colorfully.

“The ‘AT&T bill should be classified as a sheep bill. It was all about pulling the wool over the eyes of the public,” Yancy said. “Anyone who thinks the people of Kentucky will benefit from more of the same, needs to make inquiries into moving the Brooklyn Bridge to the Ohio River.”

http://www.phillipdampier.com/video/KET Phone Deregulation Kentucky Tonight 1 2-19-13.mp4

Kentucky Educational Television aired a debate between AT&T and the Kentucky Resources Council on the issue of telephone deregulation in 2013. The same issues were back this year in AT&T’s latest failed attempt to win statewide deregulation and permission to switch landline customers in rural Kentucky to less reliable wireless service. In this clip AT&T argues it should be able to shift investment away from landline service towards wireless because wireless is the more popular technology, but not everyone gets good coverage in Kentucky. (Feb. 19 2013) (3:00)

http://www.phillipdampier.com/video/KET Phone Deregulation Kentucky Tonight 2 2-19-13.mp4

In this second clip, AT&T claims customers who want to keep landline service can, but Kentucky Resources Council president Tom Fitzgerald reads the bill and finds AT&T’s claims just don’t hold up under scrutiny. The carrier of last resort obligation which guarantees quality landline phone service to all who want it is gone if AT&T’s bill passes. Customers can be forced to use wireless service instead. (Feb. 19 2013) (4:33)

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N.Y. Regulators Predict Some Time Warner Customers Will Pay More Than Double to Comcast

Staff at the New York regulator overseeing the state’s telecommunications companies have determined that some Time Warner Cable customers will see their largest rate increase in New York history — more than double their current rate — if Comcast is successful in its bid to acquire Time Warner Cable.

At issue is Time Warner Cable’s heavily promoted ‘buy only what you need’ Every Day Low Price Internet service, which offers 2Mbps service for $14.99 a month.

Comcast has no plans to continue the discount offering, which means Internet customers will pay more than twice as much for Comcast’s cheapest Internet package available to all customers — Economy Plus (3Mbps), priced at $39.99 a month and only available at that price if you also subscribe to Comcast telephone or television service.

Time Warner Cable’s cheapest television package is priced at $8-20 a month. Comcast’s least-expensive TV package costs $17-20 a month.

“Time Warner’s lowest-priced offerings… represent choices for New York consumers,” Public Service Commission staff wrote in an Aug. 8 filing in the case, noted Albany’s Times-Union. “Any loss of these services would likely result in consumers paying more.”

Comcast denies it will raise prices for New Yorkers or any other Time Warner Cable customer, but noted it needs to study the “significant competition that it faces” before making any decisions on prices. When Comcast discovers Verizon FiOS isn’t providing much of a competitive threat in areas unreached after Verizon stalled its expansion efforts and AT&T U-verse and other telco broadband offerings cannot keep up with cable broadband speeds, they might assume they don’t face that much competition after all.

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Los Angeles Public TV Station Gives Up Its Channel So AT&T/Verizon Can Have More Spectrum

Two educational public broadcasting stations in Los Angeles will soon share the same channel to make room for AT&T and Verizon Wireless’ growing needs for wireless spectrum.

KCET, a charter member of the Public Broadcasting Service (PBS) that left the network to become the nation’s largest independent TV station in 2010 will share the transmitter of KLCS, an educational PBS TV station owned by the Los Angeles Unified School District Board of Education. The move will turn back a 6MHz UHF channel to the Federal Communications Commission, to be auctioned off to the highest wireless carrier bidder in a future spectrum auction.

The two stations will share a single UHF channel, multiplexed into up to eight digital over-the-air sub-channels, equally divided between the two.

The time-sharing agreement is nothing new for KLCS, which had shared one of its digital sub-channels with Spanish language KJLA-TV earlier this year in a trial in partnership with the biggest wireless lobbying organization in the country – CTIA and the Association of Public Television Stations. The trial was designed to see how well two stations could use the H.264 compression video codec for simultaneous shared digital television transmissions. The multiplexing test, completed in March, found generally good results as long as the stations avoided concurrent HD broadcasts on the same channel. There is simply not enough bandwidth in a single 6MHz channel to handle multiple HD feeds showing complex content.

KJLA’s primary transmitter already multiplexes 10 low resolution digital sub-channels of its own, primarily in Vietnamese, Mandarin and Spanish.

When KCET and KLCS begin the channel sharing arrangement, one is unlikely to air its programming in HD. Instead, the channel space will be divided into up to eight 480i channels airing both stations’ programming lineups. For some, it will be a viewing quality downgrade. KCET was one of the first stations in Los Angeles to air HD programming, but that will be unlikely in the future.

KCET’s Channel Lineup

Channel Video Aspect PSIP Short Name Programming
28.1 720p 16:9 KCET-HD Main KCET programming
28.2 480i 4:3 KCET-LN KCET Link
28.3 KCET-Vm V-me
28.4 N H K NHK World Japan

KLCS’ Channel Lineup (No HD programming)

Channel Video Aspect PSIP Short Name Programming
58.1 480i 4:3 KLCS-1 Main KLCS programming/PBS
58.2 KLCS-2 PBS Kids
58.3 KLCS-3 Create
58.4 KLCS-4 MHz WorldView

KCET is the financially weaker of the two stations, having given up its membership in PBS four years ago and seeing a dramatic decline in viewer pledges ever since. KCET sold its studio complex to the Church of Scientology in 2011 and moved its operations to smaller facilities in Burbank. KOCE-TV in Huntington Beach is now the primary PBS station in greater Los Angeles.

The Federal Communications Commission will hold its voluntary spectrum incentive auction in mid-2015, allowing stations to bid on surrendering their licenses, moving their UHF channel to an open VHF channel or sharing their channel with another station — all in exchange for cash payments. AT&T and Verizon Wireless are widely expected to be the two largest bidders for the valuable spectrum.

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Wi-Fi is Threatening AT&T and Verizon Wireless’ 4G Data Money Party; Wi-Fi Usage Conquers 4G

att verizonVerizon Wireless and AT&T have invested billions expanding and improving their wireless networks, telling investors that revenue from exploding wireless data usage would more than recoup their investments, but the growing availability of low-cost and free Wi-Fi is threatening to derail those plans.

Business Week reports that as carriers have dropped unlimited use data plans in favor of costly, restricted-usage offers, savvy customers have learned to conserve their data allowance by switching to Wi-Fi wherever possible. Adobe Systems reported this week that more than half of all wireless data traffic from smartphones occurs over Wi-Fi, not 3G or 4G networks. Total Wi-Fi traffic passed mobile data networks more than a year earlier.

AT&T and Verizon’s business plans depend on smartphone users accessing faster 4G LTE networks to consume high bandwidth online applications like video streaming, but that isn’t happening at the rate they expected. Instead, customers are waiting to connect to a Wi-Fi hotspot before watching.

The carriers are partly to blame for the Wi-Fi habit by encouraging customers to switch to Wi-Fi to reduce congestion on their 3G and 4G networks while they were upgraded and expanded. But after carriers completed those upgrades, customers are sticking with Wi-Fi.

“There’s a flavor of too much of a good thing here, where Wi-Fi offloads start to really impinge on the prospects of monetizing all that additional usage,” says industry analyst Craig Moffett. “All the carriers have put their eggs in the basket of incremental usage as the source of revenue growth. It isn’t going according to plan.”

wifiAT&T and Verizon hoped customers would face upgrades to more costly plans with more generous usage allowances as data usage increased. Early efforts to monetize data usage seemed encouraging. Both carriers reported surprising success from in-store marketing efforts to push families to upgrade to deluxe 10GB+ usage plans in larger numbers than anticipated. But customers are now increasingly trying to stay within their budget and current usage allowance, with the help of Wi-Fi.

‘As customers become more aware of the limits on their data plans, they’re more careful about moving to Wi-Fi as often as possible,’ says Tamara Gaffney, an analyst with Adobe’s Digital Index.

Wi-Fi hotspots are easier to find as cable companies provide them for their customers. Major shopping, dining and entertainment venues often offer free access to draw and keep customers.

As carriers began to realize smartphones would not be the data sucking vampires they were expecting, both AT&T and Verizon eagerly dove into the tablet business, hoping to convince customers to buy mobile-ready versions of the devices that would more likely be used for data allowance-killing online video.

But customers outsmarted them again, preferring tablets equipped only with Wi-Fi. Carriers responded by slashing prices, to no avail. Even those who splurged on 3G and 4G-ready tablets rarely use them on AT&T and Verizon’s wireless networks. More than 93% of tablet traffic is done over Wi-Fi, derailing a potential wireless data money train.

onstarTheir latest plan is to push the “Internet of Things” — machine to machine communications. Both AT&T and Verizon have invested heavily in wireless utility meter technology and are pushing manufacturers to add 4G capability to all sorts of home appliances from refrigerators, ovens, and dishwashers to home laundry centers, alarm systems, and even pet-webcams. But early efforts have not been promising. Reception in fixed indoor locations, especially basements, is often very poor to non-existent, and manufacturers don’t see much benefit adding mobile network connectivity when traditional Wi-Fi is cheaper and much more reliable.

That hasn’t stopped AT&T, which won a lucrative contract to offer 4G LTE and/or HSPA+ support inside Audi and GM vehicles. To them, the “connected car” is a cash cow waiting to be milked.

“Five or six years ago when we talked to car OEMs, it was about safety and embedded modules and cheap rates,” said Glenn Lurie, CEO of AT&T Mobility.

That was the era of OnStar and other competing telematics systems that can monitor vehicle performance and notify emergency responders in the event of an accident. Verizon Wireless has supported GM’s OnStar system for years and until GM’s bankruptcy reorganization offered Verizon customers the option of adding their OnStar speakerphone to a Verizon Wireless family plan for $9.99 a month, sharing that plan’s voice calling minutes. Starting this year, AT&T has the contract.

AT&T is celebrating the end of cheap rates and see big dollar signs selling in-car connectivity, which will be available in dozens of car models.

Mary Chan from GM committed to offer AT&T 4G access on 33 GM model vehicles by the end of this year.

Customers will get a free sample of the service in promotions lasting from 30-90 days. After that, customers will need to pay:

  • OnStar’s data plan (doesn’t include voice calling/emergency response) will cost $10 a month to add the car as a device on your AT&T Mobile Share plan and $10 a month for 200MB of data; $30 a month for 3GB of data, or $50 a month for 5GB;
  • Applicable taxes and federal/state universal service charges, regulatory cost recovery charge (up to $1.25), gross receipts surcharge, administrative fees and other government assessments which are not taxes or government required charges are not included in the above-stated prices;
  • A $5 day pass will be available for occasional users providing 250MB of access for up to 24 hours;
  • All payments must be made in advance of receiving service and will be automatically renewed month-by-month until the customer cancels;
  • The built-in Wi-Fi hotspot will support up to seven devices;
  • Excessive roaming may result in service termination.

“The connected car will change the entire wireless industry,” said AT&T Mobility’s Ralph de la Vega. AT&T expects as many as 10 million connected cars will be signed up for service in just a few years.

But at AT&T’s prices, Moffett suspects the ingenuity of Silicon Valley and other entrepreneurs will eventually find a much cheaper solution, potentially robbing AT&T of yet another expected cash coup.

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AT&T U-verse Customers Can Escape AT&T’s Usage Caps With DSL Extreme’s trueSTREAM

dsl extremeThere is a way out for AT&T U-verse customers stuck dealing with the company’s arbitrary 250GB monthly usage cap — sign up with U-verse reseller DSL Extreme for the same Internet access with no usage caps whatsoever.

Today, DSL Extreme announced the introduction of trueSTREAM in 21 states serviced by AT&T’s U-verse fiber to the neighborhood system. Much like Earthlink’s reseller agreement with Time Warner Cable, customers can transparently switch between the two providers and receive essentially the same service at a different price point.

The biggest selling point of trueSTREAM is that it has absolutely no usage limits.

DSL Extreme has signed a contract with AT&T to offer the service in states including California, Texas, Illinois, and Florida, among many others.

Customers don’t need to have a phone line to subscribe. They will need to lease a wireless gateway router ($6.50/mo) from DSL Extreme and the rate plans are similar to AT&T’s own U-verse broadband offerings:

  • truestreamValue ($17.95/mo) 768/384kbps
  • Plus ($22.95/mo) 1.5Mbps/384kbps
  • Pro ($27.95/mo) 3Mbps/512kbps
  • Elite ($32.95/mo) 6Mbps/768kbps
  • Max ($37.95/mo) 12/1Mbps
  • Max Plus ($42.95/mo) 18/1.5Mbps
  • Max Turbo ($52.95/mo) 24/3Mbps
  • Power ($62.95/mo) 45/6Mbps
  • Power Plus ($92.95/mo) 75/8Mbps

Professional installation is now free of charge and an optional one-year contract delivers other extras, such as a static IP address. A Supplier Surcharge Recovery fee of $2.88 per month applies. Customers can pre-qualify on the company’s website.

The coverage area of trueSTREAM will extend the company’s reach overnight to 30 million potential customer locations, growing to nearly 60 million by 2015.

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FCC Chairman Complains About State of U.S. Broadband But Offers Few Meaningful Solutions

FCC chairman Thomas Wheeler doesn’t like what he sees when looks at the state of American broadband.

At a speech today given to the 1776 community in Washington, Wheeler complained about the lack of broadband competition in the United States.

“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”

faster speed fewer competitors

“The lighter the blue, the fewer the options,” Wheeler said, gesturing towards his chart. “You get the point. The bar on the left reflects the availability of wired broadband using the FCC’s current broadband definition of 4Mbps. But let’s be clear, this is ‘yesterday’s broadband.’ Four megabits per second isn’t adequate when a single HD video delivered to home or classroom requires 5Mbps of capacity. This is why we have proposed updating the broadband speed required for universal service support to 10Mbps.”

But Wheeler added that even 10Mbps was insufficient as households increasingly add more connected devices — often six or more — to a single broadband connection.  When used concurrently, especially for online video, it is easy to consume all available bandwidth at lower broadband speeds.

Wheeler

Wheeler

Wheeler’s new informal benchmark is 25Mbps — “table stakes” in 21st century communications. About 80 percent of Americans can get 25Mbps today or better, but typically only from one provider. Wheeler wants even faster speeds than that, stating it is unacceptable that more than 40% of the country cannot get 100Mbps service. Wheeler seemed to fear that phone companies have largely given up on competing for faster broadband connections, handing a de facto monopoly to cable operators the government has left deregulated.

“It was the absence of competition that historically forced the imposition of strict government regulation in telecommunications,” Wheeler explained. “One of the consequences of such a regulated monopoly was the thwarting of the kind of innovation that competition stimulates. Today, we are buffeted by constant innovation precisely because of the policy decisions to promote competition made by the FCC and Justice Department since the 1970s and 1980s.”

Wheeler said competition between phone and cable companies used to keep broadband speeds and capacity rising.

“In order to meet the competitive threat of satellite services, cable TV companies upgraded their facilities,” Wheeler said. “When the Internet went mainstream, they found themselves in the enviable position of having greater network capacity than telephone companies. Confronted by such competition, the telcos upgraded to DSL, and in some places deployed all fiber, or fiber-and-copper networks. Cable companies further responded to this competition by improving their own broadband performance. All this investment was a very good thing. The simple lesson of history is that competition drives deployment and network innovation. That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

But Wheeler admits the current state of broadband in the United States no longer reflects the fierce competition of a decade or more ago.

“Today, cable companies provide the overwhelming percentage of high-speed broadband connections in America,” Wheeler noted. “Industry observers believe cable’s advantage over DSL technologies will continue for the foreseeable future. The question with which we as Americans must wrestle is whether broadband will continue to be responsive to competitive forces in order to produce the advances that consumers and our economy increasingly demand. Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler recognized what most broadband customers have dealt with for years — a broadband duopoly for most Americans.

antimonopoly“Take a look at the chart again,” Wheeler said. “At the low end of throughput, 4Mbps and 10Mbps, the majority of Americans have a choice of only two providers. That is what economists call a “duopoly”, a marketplace that is typically characterized by less than vibrant competition. But even two “competitors” overstates the case. Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after. Once consumers choose a broadband provider, they face high switching costs that include early termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

Wheeler emphasized that true competition would allow customers to change providers monthly, if a vibrant marketplace forced competitors to outdo one another. That market does not exist in American broadband today.

“At 25Mbps, there is simply no competitive choice for most Americans,” Wheeler added. “Stop and let that sink in…three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all. Things only get worse as you move to 50Mbps where 82 percent of consumers lack a choice. It’s important to understand the technical limitations of the twisted-pair copper plant on which telephone companies have relied for DSL connections. Traditional DSL is just not keeping up, and new DSL technologies, while helpful, are limited to short distances. Increasing copper’s capacity may help in clustered business parks and downtown buildings, but the signal’s rapid degradation over distance may limit the improvement’s practical applicability to change the overall competitive landscape.”

Wheeler finds little chance wireless providers will deliver any meaningful competition to wired broadband because of pricing levels and miserly data caps. Such statements are in direct conflict with a traditional industry talking point.

In a remarkable admission, Wheeler added that the only hope of competing with cable operators comes from a technology phone companies have become reluctant to deploy.

“In the end, at this moment, only fiber gives the local cable company a competitive run for its money,” Wheeler said. “Once fiber is in place, its beauty is that throughput increases are largely a matter of upgrading the electronics at both ends, something that costs much less than laying new connections.”

Wheeler also continued to recognize the urban-rural divide in broadband service and availability, but said little about how he planned to address it.

Wheeler’s answer to the broadband dilemma fell firmly in the camp of promoting competition and avoiding regulation, a policy that has been in place during the last two administrations with little success and more industry consolidation. Most of Wheeler’s specific commitments to protect and enhance competition apply to the wireless marketplace, not fixed wired broadband:

1. comcast highwayWhere competition exists, the Commission will protect it. Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example. As applied to fixed networks, the Commission’s Order on tech transition experiments similarly starts with the belief that changes in network technology should not be a license to limit competition.

In short, don’t expect anymore efforts to combine T-Mobile and Sprint into a single entity. Wheeler only mentioned “nationwide wireless providers” which suggests it remains open season to acquire the dwindling number of smaller, regional carriers. Wheeler offers no meaningful benchmarks to protect consumers or prevent further consolidation in the cable and telephone business.

2. Where greater competition can exist, we will encourage it. Again, a good example comes from wireless broadband. The “reserve” spectrum in the Broadcast Incentive Auction will provide opportunities for wireless providers to gain access to important low-band spectrum that could enhance their ability to compete. Similarly, the entire Open Internet proceeding is about ensuring that the Internet remains free from barriers erected by last-mile providers. Third, where meaningful competition is not available, the Commission will work to create it. For instance, our efforts to expand the amount of unlicensed spectrum creates alternative competitive pathways. And we understand the petitions from two communities asking us to pre-empt state laws against citizen-driven broadband expansion to be in the same category, which is why we are looking at that question so closely.

Again, the specifics Wheeler offered pertain almost entirely to the wireless business. Spectrum auctions are designed to attract new competition, but the biggest buyers will almost certainly be the four current national carriers, particularly AT&T and Verizon Wireless. Although low-band spectrum will help Sprint and T-Mobile deliver better indoor service, it is unlikely to drive new market share for either. Wheeler offered no specifics on the issues of Net Neutrality or municipal broadband beyond acknowledging they are issues.

3. Incentivizing competition is a job for governments at every level. We must build on and expand the creative thinking that has gone into facilitating advanced broadband builds around the country. For example, Google Fiber’s “City Checklist” highlights the importance of timely and accurate information about and access to infrastructure, such as poles and conduit. Working together, we can implement policies at the federal, state, and local level that serve consumers by facilitating construction and encouraging competition in the broadband marketplace.

competitionMost of the policies Wheeler seeks to influence exist on the state and local level, where he has considerably less influence. Based on the overwhelming interest shown by cities clamoring to attract Google Fiber, the problems of access to utility poles and conduit are likely overstated. The bigger issue is the lack of interest by new providers to enter entrenched monopoly/duopoly markets where they face crushing capital investment costs and catcalls from incumbent providers demanding they be forced to serve every possible customer, not selectively choose individual neighborhoods to serve. Both incumbent cable and phone companies originally entered communities free from significant competition, often guaranteed a monopoly, making the burden of wired universal service more acceptable to investors. When new entrants are anticipated to capture only 14-40 percent competitive market share at best, it is much harder to convince lenders to support infrastructure and construction expenses. That is why new providers seek primarily to serve areas where there is demonstrated demand for the service.

4. Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband. One thing we already know is the fact that something works in New York City doesn’t mean it works in rural South Dakota. We cannot allow rural America to be behind the broadband curve. Our universal service efforts are focused on bringing better broadband to rural America by whomever steps up to the challenge – not the highest speeds all at once, but steadily to prevent the creation of a new digital divide.

Again, Wheeler offers few specifics. Current efforts by the FCC include the Connect America Fund, which is nearly entirely devoted to subsidizing rural telephone companies to build traditional DSL service into high-cost areas. Cable is rarely a competitor in these markets, but Wireless ISPs often are, and they are usually privately funded and consider government subsidized DSL expansion an unwelcome and unfair intrusion in their business.

“Since my first day as Chairman of the FCC my mantra has been consistent and concise: ‘Competition, Competition, Competition,'” said Wheeler. “As we have seen today, there is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable.”

Under Wheeler’s leadership, Comcast has filed a petition to assume control of Time Warner Cable, AT&T is seeking permission to buy DirecTV, Frontier Communications is acquiring the wired facilities of AT&T in Connecticut, and wireless consolidation continues. A forthcoming test of Wheeler’s willingness to back his rhetoric with action is whether he will support or reject these industry consolidating mergers and acquisitions. Wheeler’s FCC has also said little to nothing about the consumer-unfriendly practice of usage caps and usage-based billing — both growing among wired networks even as they upgrade to much-faster speeds and raise prices.

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Frontier’s Buyout of AT&T Connecticut Rejected By Regulators; Deal Offers Little Benefit to Customers

puraConnecticut’s tough Public Utilities Regulatory Authority (PURA) has rejected a settlement between state officials and Frontier Communications to acquire AT&T Connecticut, saying the deal offers very little to Connecticut ratepayers.

The settlement between Frontier, Connecticut’s Consumer Counsel and the Connecticut Attorney General’s office included commitments from Frontier governing contributions to state non-profit groups, phone rates and broadband expansion.

The Authority was told it could either approve or reject the settlement, but not suggest or require changes. It decided late last week to reject the settlement deal.

The regulator cited several reasons for its disapproval:

  • PURA_new_area_code_mapA landline rate freeze offers little benefit to Connecticut ratepayers because landline rates have been stable for years and any attempt to increase them will only fuel additional disconnections;
  • Frontier’s commitments to improve broadband service in Connecticut are vague, lacking specific speed improvements and rural broadband expansion targets to meet;
  • Frontier attempted to insert weakened rules governing pole inspections, which should be part of a separate regulatory proceeding;
  • The agreement might limit PURA’s ability to launch cost-recovery proceedings and flexibility to maintain oversight over Frontier’s performance in the state;
  • A contractual agreement requiring Frontier to make specific contributions to state non-profit groups is inappropriate and unenforceable;
  • A lack of information about how Frontier and AT&T will collaborate after the transaction is complete, particularly with AT&T’s U-verse offering;
  • No details about how Frontier U-verse intends to handle Public, Educational, and Government Access channels on its television platform;
  • A lack of a detailed disaster preparedness plan from Frontier to handle major service disruptions.

PURA’s Acting Executive Secretary Nicholas Neeley said the goal is to “improve the likelihood of success of Frontier as it assumes the duties, obligations and responsibilities currently held by AT&T in Connecticut.”

“(It seeks to) balance the interests of all parties affected by this transaction, promote competition and preserve the public’s rights to safe and adequate communications services,” Neeley wrote in a public notice. “The Authority hopes that such a session will produce an amended proposal from Frontier that would be deemed acceptable for consideration.”

The rejection also seeks to protect and preserve Connecticut’s regulatory oversight power over Frontier.

Frontier received a better reception from the Communications Workers of America. The phone company has traditionally maintained reasonably good relations with its unionized workforce. CWA approved of Frontier’s purchase of AT&T Connecticut after winning commitments for new union jobs, a job security program, a payout of 100 shares of company stock to each union member, and Frontier’s commitment to prioritize Connecticut-based call centers.

Wall Street is less impressed. This morning, Morgan Stanley downgraded Frontier’s stock to “underweight,” citing complications in the AT&T Connecticut deal and Frontier’s increasing debt load. Frontier is financing $1.55 billion of the $2 billion transaction by selling two groups of senior notes of $775 million each, due in 2021 and 2024. As of June 30, Frontier had amassed $7.9 billion in debt with just $805 million in cash on hand.

Frontier's proposed northeastern service areas would add almost the entire state of Connecticut to its holdings in mostly-rural upstate New York and Pennsylvania and the urban metropolitan Rochester, N.Y. 585 area code region.

Frontier’s proposed northeastern service areas would add almost the entire state of Connecticut to its holdings in mostly rural upstate New York and Pennsylvania and the metropolitan Rochester, N.Y. 585 area code region where the company got its name.

http://www.phillipdampier.com/video/Frontier Communications Connecticut 1-2014.mp4

Frontier Communications introduces itself to AT&T Connecticut customers in this company-produced video. (4:03)

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Frontier Files Opposition to Time Warner Cable/Comcast Merger; Harms Video Competition

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier used Time Warner Cable’s usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier Communications has filed a rare objection with the Federal Communications Commission opposing the merger of Comcast and Time Warner Cable, citing concerns the merger would further harm competition and prevent Frontier and other competitors from getting fair access to programming owned by the combined cable companies.

“Comcast’s appetite for market control threatens the competitiveness of the video market,” wrote Frontier. “Comcast is already the largest Internet provider and largest video provider in the United States. If approved, Comcast’s video subscriber base would be approximately 52-times the size of Frontier’s video subscriber base.”

As Stop the Cap! wrote in its own objections to the merger, would-be competitors can and will be deterred from competing for video subscribers if they cannot obtain reasonable wholesale rates for popular cable programming. Currently, the largest providers extend the best volume discounts to the country’s largest satellite and cable operators. They make up those discounts by charging smaller customers higher rates. Frontier, as we noted in our filing, has already experienced the impact of volume discounting in its adopted FiOS TV areas in Indiana and the Pacific Northwest. Losing volume discounts originally obtained by Verizon, Frontier faced substantially higher programming costs as an independent provider — costs so great the company began asking customers to drop its own fiber television product in favor of third-party partner DISH, a satellite provider.

“Small multichannel video programming distributors (MVPDs) like Frontier cannot achieve the scale necessary to drive down programming costs, which are based upon an MVPD’s subscriber totals, to the same levels that Comcast can with this transaction,” noted Frontier. “Further, Comcast would own an enormous share of the “must have” programming that customers demand and could exercise its market dominance to either outright deny such programming to its competitors or to functionally deny the programming by charging exorbitant rates for content.”

“While Frontier continues to grow its subscriber base organically by delivering a quality product in its markets and also by acquiring AT&T’s wireline assets in Connecticut, the cost of content for video programming remains staggering for new entrants that lack the scale and scope of cable companies like Comcast and Time Warner Cable individually, let alone that of the merged entity,” said Frontier. “It is no mere coincidence that AT&T announced its proposed acquisition of DirecTV shortly after Comcast announced its intention to purchase Time Warner Cable. AT&T recognized the need to improve its subscriber scale in order to compete with Comcast on video programming pricing.”

Frontier noted the Federal Communications Commission also expressed grave concerns over Comcast’s ability to affect video competition during its acquisition of NBCUniversal. That merger was approved only after Comcast agreed to several conditions to avoid anticompetitive abuse in the marketplace. But Frontier complained a further acquisition of Time Warner Cable would only exacerbate competition concerns, even as Comcast argues the FCC should not contemplate any further investigation of the subject during its current merger review.

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Special Report: Big Phone and Cable Companies Are Losing Your Calls to Rural America

Phillip Dampier August 28, 2014 Consumer News, Public Policy & Gov't, Video 7 Comments

aroundtheworldBig cable and telephone companies have opened a new digital divide by losing your long distance calls to rural America to save a buck.

The problems have grown so pervasive, a FCC investigation found some of America’s biggest providers are sending some of their long distance calls destined for rural communities across the U.S. through shady, fly-by-night third-party operators in Russia, the United Arab Emirates, Singapore, Japan, Bulgaria and Romania before the phone ever starts ringing on the other end. If it ever starts ringing on the other end.

In Addison County, Vt., State Representative Will Stevens knows all about it. When not representing the people of rural Shoreham, he is running Golden Russet Farm, highly dependent on his landline to deal with customers.

“Phone calls here get cut off,” he told the Addison County Independent. “Or they don’t go through at all. So many times I’ve called elsewhere and you just don’t know if the call is going through, it goes dead. It rings then goes dead. You can’t tell how many times it’s rung on the other end if at all.”

It’s even worse when callers get a recording stating the number is no longer in service.

That is what happened to Pat Plautz who runs a small map store in the town of Reedsburg, Wis. A caller from Milwaukee trying to place an order first got a recording stating her number had been disconnected. Lucky for her the caller tried again, this time connecting.

“My main concern is that people think we’re out of business,” Plautz said.

As many as one in five long-distance calls to rural communities either aren’t connected to the intended number or are corrupted by issues such as static or garbled sound, according to Communications Data Group, a telephone billing company based in Champaign, Ill.

In rural upstate New York, some callers report nearly 100% of their call attempts to certain rural customers fail.

Stevens has attempted to place calls from his rural Shoreham Tel landline in Vermont across Lake Champlain to his father’s camp – 30 minutes away by car – served by the Crown Point Telephone Corporation in Crown Point, N.Y., with absolutely no success.

Rural call failures have created a number of safety fears for concerned relatives, particularly those trying to reach seasonal residents — often retirees that live in the area part of the year.

“When they can’t get through they’ll call us and ask us to check the lines, and we do and they are working properly, so then they’ll ask us if we can go out and see if the person is OK because they aren’t answering their phone,” said Shana Macey, president of the Crown Point phone company. “And we’ll do that because we’re concerned, too.”

A Nationwide Deterioration of Rural Telephone Service

In rural Wisconsin and Minnesota, even 911 calls can get lost. In west-central Minnesota, particularly those along the I-94 corridor, hard-hit communities like Brainerd and Little Falls find their 911 calls are being dropped or lost and businesses have reported huge drops in incoming long distance calls, costing them business.

Shoreham, Vt. to Crown Point, N.Y. by auto.

Shoreham, Vt. to Crown Point, N.Y. by auto.

In Kansas, home to many rural independent phone companies, long distance call problems have become so pervasive, phone companies are publishing information about the problem in their phone directories and on their websites.

Rural customers complain long distance calls often lose one side of the conversation so both parties cannot hear each other, or the call is lost in static and distortion that make it sound like it originated from the middle of Siberia.

What shocked the FCC into calling this problem “epic” earlier this year was the revelation that long distance calls between people as little as 15 miles away from each other often are routed through Siberia or other distant lands as long distance companies seek the cheapest possible way to route calls to boost profits.

Welcome to the world of “Least Cost Routing,” (LCR) a harmless-sounding phrase that often means the difference between getting a long distance call or not.

You might have experienced LCR if you have encountered any of the following:

  • Someone tells you they tried to call you but your phone never rang;
  • Someone tells you they tried to call you and the phone rang on their end, but didn’t ring on yours;
  • A call came through but the quality was poor;
  • One side of the call cannot reliably hear the other;
  • Phantom touch-tone sounds erupt in mid-conversation or distorted sounds from other phone conversations occasionally break through and can be heard by one or both parties;
  • A call came through but the Caller ID was incorrect.

Nationally, users of Google Voice, MagicJack, and other discount long distance services have probably observed at least one of these, all because the companies involved are looking for the cheapest ways possible to route your call.

But the problems have grown well beyond the deep discount providers and affect Verizon, AT&T, Comcast, Time Warner Cable and other phone and cable company telephone customers. Evidence suggests unregulated cable and wireless phone calls are much more likely to encounter LCR than traditional regulated landlines.

http://www.phillipdampier.com/video/KMSP Minneapolis Dropped Calls 3-5-14.mp4

KMSP in Minneapolis reports Minnesota officials are helpless trying to resolve call completion problems because their oversight powers have been largely stripped away by deregulation and telecom lobbyists want to keep it that way. (3:14)

lcr

Least Cost Routing in action.

Deregulation Implicated in Race for High Profits, Low Call Quality

Wisconsin’s Public Service Commission, perhaps slightly perturbed after watching its oversight powers get largely stripped away by the Walker Administration at the behest of AT&T, explained the reality:

Once upon a time – back in the days of rotary phones – a phone call was carried over copper wires which formed a single circuit from end to end. Those days are gone. Today, the network is almost entirely digital, with calls reduced to bits and sent over a massive web of links provided by telephone, cable, cellular and fixed wireless providers. These networks pass calls using a complex set of computer controls, interfaces and protocols. Rural call completion issues appear to be caused by some error or errors in programming, or incompatibility in the software somewhere in the network, that prevents the call from reaching the rural telephone company at all.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

The problem is bad enough in Wisconsin the PSC has devoted a section of its website to address the problem, but that is about all it can do. In 2011, Gov. Walker directed his Republican colleagues to draft a sweeping deregulation measure ghostwritten by AT&T. The bill completely stripped the PSC of its ability to investigate consumer complaints or the problems of rural call completion. The Assembly approved the Republican bill 80-13 and the Senate quickly followed on a 25-8 vote. Walker promptly signed the bill into law.

Consumer advocates and rural officials warned the bill would lead to a deterioration of telephone service in Wisconsin, especially in rural areas — exactly what has happened.

“We’re pitting urban against rural,” said Sen. Kathleen Vinehout (D-Alma). “The consumer has absolutely no recourse under this bill.”

Nonsense, declared Sen. Rich Zipperer (R-Pewaukee). “We’re ready to keep up with the technology. First and foremost, this is a job creation bill,” he said.

In fact, the bill may have indeed created new jobs… for overseas, fly-by-night wholesale call connection companies in places like Bulgaria, the United Arab Emirates, and across Russia.

Hundreds of new and mysterious telecommunications companies, some literally run out of garages with a consumer residential broadband account, jumped into the wholesale call completion marketplace. Telephone and cable companies use sophisticated databases that maintain constantly changing price lists for IP-based call completion services. If a long distance company wants the cheapest possible rate, a computer will automatically choose whatever company offers it, without regard to the reputation of the company or its ability to properly route the call.

Fraud has become a serious problem, with some call connection companies charging below-market rates and then connecting calls to an artificial, never-ending ringing signal or an intercept recording stating the number is out of service. Consumers are generally not charged for unanswered calls or those to disconnected numbers, but phone and cable companies often are.

So why do rural Americans suffer the biggest problems? Because rural telephone exchanges are allowed to charge slightly higher call completion fees to companies sending their customers’ calls into these rural areas. The higher charges help defray the higher costs incurred by rural independent phone companies to maintain service with a much smaller customer base. Verizon has millions of landline customers in New York. Crown Point Telephone has 735.

There are millions to be made in the call completion business and a growing number of cell phone companies and large phone and cable companies have teamed up with third-party call completion discounters to shave costs and increase profits. The more money to be made, the more advanced the call routing schemes have become. In the last few years, LCR has become nearly as frenzied as the stock market, with call completion rates subject to change constantly as capacity increases or decreases and as competitors try to match or beat others’ rates.

pushpollA Race to the Bottom

As flyers know, it is often cheaper to fly into a major city and catch a connecting flight to your final destination instead of booking a direct flight. The same is true for phone calls. Mr. Stevens’ call across Lake Champlain involved two high-cost rural telephone companies. So his long distance carrier (or cell phone company) likely sold the call to a third-party to handle. If that third-party found it cheaper to send the call overseas and then back again (often to avoid connection fees), that is exactly what will happen. If it found it couldn’t make any money on the call, it likely dropped it.

“In some cases, the calls become looped in the network and are never completed. In other cases, the calls are delivered via a low quality network which results in poor sound quality,” the Reedsburg Utility Commission, which also runs a local telephone company, says on its website.

In one case a call from Milwaukee to northeast Wisconsin was routed through carriers in Singapore, Dubai, and parts of Europe including Russia.

“It just kept getting shipped everywhere. It was insane,” Peter Jahn, of the Wisconsin Public Service Commission’s Division of Business and Communications Services, told the Journal-Sentinel.

These third-party operators have no responsibility to guarantee calls will be connected, and when their algorithm discovers it has been saddled with a money-losing call that will cost more to complete than the company is charging, it simply drops it, leaving the caller with dead silence, an artificial busy signal, or a dial tone.

“It’s something that’s been going on for years, and it’s very difficult to identify the bad actors. … Some of them could be fly-by-night operations,” admitted Bill Esbeck, executive director of the Wisconsin State Telecommunications Association, which represents telephone companies.

The Murky World of Grey Routes

special reportIn fact, the industry has a different name for this type of call handling – grey routes.

“The grey route is, literally, a sub-par phone line or phone company who is intentionally selling phone service in areas that should be expensive but is cutting corners to be able to provide the service for less,” says 2600hz, a Voice over IP service provider. “An example of a grey route, in it’s simplest form, might be someone buying 50 phone lines that were on special from the phone company for six months – and putting those phone lines in their garage. Then they buy an Internet connection and funnel calls from the Internet to those cheap phone lines all day long.”

The company says grey routes are responsible for a lot of the problems will call completion and quality.

“They’re most likely using a poor quality Internet connection, poor quality equipment and aren’t interested in debugging or fixing problems with their setup – as long as they can keep you on the line long enough to bill the other party,” says the company.

“How do they achieve that? They pitch the route to the phone company who’s losing money on expensive phone calls and falsely promise them great quality. In essence, the theory goes that if only 5% of your calls go over a ‘grey route’ then phone companies can save literally millions of dollars and most customers will ‘tolerate’ the poor quality because it only occurs on such a small number of calls. Unfortunately, the side effects of such behavior range from broken Caller ID and touchtone transmission to audio quality cut-outs and generally poor sounding calls.”

Fly-by-Night Least Cost Call Routing

Fly-by-Night Least Cost Call Routing

Because many of these providers are unsophisticated, mistakes in call routing are common.

In one instance, all calls intended for an area in northern Wisconsin instead were routed to a car dealership, which was deluged with wrong-number calls.

“It took months and months to figure out who had screwed this up,” Jahn told the newspaper.

Unfortunately, it isn’t just the discount long distance providers that occasionally hand off calls to grey routes. The biggest cell phone and cable companies also use them.

For months, Pat Fretschel of Reedsburg had trouble getting calls from Milwaukee. Her callers would assume she wasn’t home and would hang up, when in fact the phone wasn’t ringing at her end of the line.

The problem only affected callers using Time Warner Cable phone service.

“Time Warner kept trying to tell me the calls were being hijacked out of California. I could never wrap my head around that,” Fretschel told the Journal-Sentinel.

Back in New England, Jackie Ambrozaitis is thankful she has a website to advertise her Falkenbury Farm Guest House, because she has no idea how many long distance calls she is missing.

Molly Worden, Jackie’s daughter who lives in Connecticut, reports to the Addison County Independent that she has problems every month reaching both her mother and a sister who also lives in Benson.

Rural first responders can't respond if they don't get a call.

Rural first responders can’t respond if they don’t get the call.

“I call Shoreham Tel and they test the line and they say it’s my phone; they tell me my phone looks for the cheapest way to send the call,” Worden says. “I’ve had people over to the house and called from several different carriers with their cell phones, I’ve tried Verizon, Sprint, Nextel, and I still can’t get through. It will ring 20 times without answer or it goes to busy. Sometimes five, six days in a row I can’t get through.”

Worden’s young children get frustrated when they can’t talk to their grandparents in Vermont, and Ambrozaitis’s 90-year-old father-in-law in Connecticut gets distressed when he can’t reach the family.

Your Health and Safety at Risk?

But the problem isn’t just annoying for friends and family trying to stay in touch.

Doctors “have been unable to reach patients, hospitals have been unable to reach on-call emergency surgeons, and there is a reported instance in which a 911 call center was unable to make emergency call backs,” the National Exchange Carrier Association, which represents rural telecom companies, said in an Aug. 18 letter to the Federal Communications Commission.

“I’m concerned we’ll have a major event where perhaps a first responder doesn’t know that they were called out,” says Steve Head, engineer at HEADSolutions, consultant to the telecommunications industry. Head is working with Waitsfield Telecom, and has been instrumental in recognizing and revealing the extent of the rural connectivity problem nationwide. “We had at least one incident of a hospital trying to get ahold of a patient to schedule surgery and could not get through, and if they had not been able to get ahold of him for this surgery opening it was not going to be able to be done for some time,” he said. “That was major.”

“I Have Regulatory Authority Over Telegraph Lines” – State Regulators Helpless to Intervene

Trying to resolve this problem has fallen largely on the FCC in Washington as telephone company oversight and consumer protection laws in the states have not kept up with technology or have been wiped off the books in deregulation measures.

Rothman

Rothman

“I have regulatory authority over telegraph lines,” complained Minnesota Commerce Commissioner Mike Rothman. “Currently, wholesale transport providers are not defined in statute, they’re unknown.”

In Minnesota, attempts at wholesale deregulation have not been successful, and landline phone companies still fall under some state regulation. Cell phones are covered by the FCC, and, as Rothman explained, cable is pretty much a free-for-all.

Any attempt to place oversight or regulation on telecom companies rings alarm bells and the lobbyists quickly arrive in Rothman’s office, “all lined up, someone from Verizon, another from Sprint, and a representative from a trade group representing cable.”

“Regulation worked for a long time but customers didn’t have a choice. Now they have a choice, but the quality of calls may have declined,” said Rob Souza, senior vice president of Otelco, the Maine-based communication company that bought Shoreham Tel 13 months ago. “I’ve been in this business 40 years, and the modernization of the telecommunications system has been extraordinary. It’s a good, solid reliable system. But when people don’t play by the rules, you get more service problems. That’s not an indictment of the system, but on some people who are trying to shave every penny out of it.”

Inadequate FCC Fines Are Just the Cost of Maintaining a Very Profitable Business

Among those include Matrix Telecom Inc. of Irving, Tex., fined $875,000 by the FCC to resolve a call-completion investigation. Similar agreements were reached with Level 3 Communications LLC for $975,000 in March and Windstream Corp. for $2.5 million in February.

But those amounts are miniscule in comparison to the potential financial benefits reaped from LCR.

“In the short-term, it’s going to take the FCC cracking down and making those fines larger, so the cost of not doing what the carriers are supposed to do is greater than doing what they’re supposed to,” said Reedsburg Utility Commission general manager Brett Schuppner.

But the FCC isn’t immune to lobbying either, and powerhouse AT&T is at the front of the line fiercely fighting to weaken new FCC rules to a level that would qualify them as homeopathic.

CommLawBlog fingered AT&T as the worst offender. The phone company recently filed a petition to change FCC rules designed to find and track the source of degradation of rural calls. The company also wants waivers for its wireless traffic and intaLATA toll calls (those placed to nearby areas outside of a customer’s local toll-free calling zone). They are also seeking a six month extension of a reporting deadline. This is significant, CommLawBlog says, because AT&T is the largest interexchange carrier with the most traffic sent to many rural areas in the country. Letting them effectively “opt out” could nullify many of the benefits of the new rural call completion rules.

Those suggested changes from AT&T are getting a cold response from groups like the National Association of Regulatory Utility Commissioners, which complain that rural call completion problems have been ongoing for years and now is not the time to weaken FCC rules.

On a separate front, Sen. Tim Johnson (D-S.D.) has introduced a bill requiring the FCC to keep a registry of the companies responsible for routing long-distance calls. It also would set service quality standards for the carriers.

The bill has little chance of being passed because of significant Republican opposition.

http://www.phillipdampier.com/video/KTVM Montana Incomplete Calls Madison County 4-24-14.mp4

In rural Montana, long distance telephone calls often don’t reach homes and businesses. KTVM talks with a business owner in Madison County who thinks it’s unfair rural America is stuck with substandard service. (1:40)

http://www.phillipdampier.com/video/You Might Have to Call Again If I Live in Rural America.flv

David Lewis, CEO of ANPI talks about Rural Call Completion at the IP Possibilities Conference and Expo. Lewis goes into greater detail about how this problem developed, how it affects customers, and what solutions are available to fix it. Because Lewis is speaking to an audience of mostly telecom professionals, we’ve provided a “cheat sheet” to explain some of the jargon. (11:43)

Telco Jargon Translated (in chronological order as it appears in the video)

Tier 1 Carriers – The biggest IP networks
CLEC’s – Competitive local phone companies (Time Warner, Comcast, MagicJack, Vonage, etc.)
ILEC’s – Incumbent local phone companies that have been around for decades
RBOC – A former regional Bell company (eg. Verizon, AT&T, SBC, Qwest, etc.)
Termination – When a call successfully reaches the called party’s phone number
PSTN – The network that powers your traditional landline
Enhanced 911 – 911 operators automatically get your calling location and other pertinent details
PSAPs – a 911 call center
Rate Deck – Essentially a price list showing the cost to complete calls to different areas
Bypassing Access – Getting around the traditional compensation system for calls made to rural telephone companies
Feature Group D – a type of telecommunication trunk used to provide “equal access” capability from telecommunication carriers and central offices (where the switching equipment is located and customer lines are connected and terminated) to the access tandem. The caller’s number is passed along to the next carrier in the call chain for Caller ID and 911.

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