Verizon casts off its rural landline network for some customers.

Verizon landline customers reporting problems with their service in Pennsylvania may be soon targeted for Verizon’s wireless landline replacement — Voice Link — according to two sources sharing an internal memo with Broadband Reports.

The May 7 memo states that a significant number “selected customers” will be migrated off Verizon’s copper landline network to the Voice Link wireless service. One of the sources recognized the move as an end run around regulators:

“It has become painfully obvious to both our employees and customers that Verizon wishes to divest themselves of all regulated services,” says the source. “Abandoning our regulated wire line customers in favor of fixed point LTE may seem like a clever move but it violates “The Negroponte Principle” and will ultimately bump-up against the immutable laws of spectrum conservation physics.”

“It’s a shame that corporations like Verizon can build a FTTCS based wireless empire with regulatory subsidies provided by their wireline customers and then force them onto the unregulated wireless side,” argues the insider. “Questions of ethics and legality abound and perhaps regulatory over-sight is warranted here.”

Verizon may not get too much oversight from Pennsylvania regulators hoodwinked by the telecom company in the past.

Voice Link is a voice-only wireless home phone replacement that lacks certain calling features, Caller ID with Name for one, and requires the homeowner to provide power (and backup batteries in the event of a power failure). Customers are also dependent on quality reception from the nearest Verizon Wireless cell tower and that it remains in service during severe weather events or prolonged power outages.

Some of the customers likely targeted are still waiting for DSL broadband service from Verizon. If those customers are identified as Voice Link prospects, they will be waiting for broadband forever because Voice Link does not support data services and Verizon cannot supply DSL over a scrapped landline network.

Stop the Cap! has also learned today that the Federal Communications Commission has no problem with Verizon’s unilateral action to switch landline customers to wireless.

A FCC representative told our reader Anne, who is currently fighting Verizon over its plans to abandon landline service on the New Jersey Barrier Island, that they consider Voice Link a functionally equivalent landline service. In a response that could have come directly from Verizon customer service, the FCC helpfully describes the new service Anne already understands and does not want:

Q. What if Verizon is NOT replacing copper with fiber, but is going strictly to wireless?  There will be no landlines whatsoever.  Is that acceptable?

A. “Yes that is acceptable and it is called Verizon Voice Link.  It is a wireless device that plugs into the telephone lines in your home, allowing customers the ability to use their home telephone to make and receive calls.” — FCC Representative Number : TSR54

“This second FCC response, like the first one, ignores the issue, is unprofessional and is insulting,” says Anne. “Obviously, I already know what Voice Link is.”

Other stories of interest:

1. Verizon to Rural America: Voice Link is Coming Soon; Buy a Satellite Dish If You Want Data
2. Six Months After Sandy, Verizon Abandoning Wired Network in Mantoloking, N.J.
3. Verizon’s Long Term Plan to Abandon Wired Landlines/Broadband in Non-FiOS Areas Begins
4. Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
5. Verizon Will Cease Selling Standalone DSL Service May 6th; Voice With DSL Only, Please

Verizon FiOS is off limits to rural customers. Wireless voice and satellite broadband is in your future.

Verizon Communications has big plans for its “miraculous” wireless home phone replacement which will soon find itself in rural homes across Verizon’s service area as part of a larger plan to dismantle rural America’s wired telephone network.

Just as company executives promised more than a year ago, Verizon wants to transition rural customers to fixed wireless phone service that could mean the end of wired broadband for millions of Verizon customers still using DSL.

Verizon senior vice president Tom Maguire told Communications Daily Voice Link is Verizon’s answer for customers it cannot easily transition to fiber optics. He is thrilled about the prospects of getting rid of deteriorating copper networks in favor of an inexpensive wireless alternative.

“I’m super jazzed about this because I think it will be good for everybody,” he said. “I think it’ll change a lot.”

For rural Verizon customers, the changes could be profound, dramatic, and not exactly a win-win scenario:

• No more wired phone service, which means medical monitoring, many home security systems, and inexpensive dial-up service that all rely on landline technology will be rendered unusable;
• No more unlimited use DSL service, no business broadband service, no credit card processing or other electronic business transactions that depend on a wired connection;
• No enforced quality of service standards, rate oversight, or guarantee of access to quality voice service;
• No prospect of advanced fiber optic FiOS services, including high bandwidth video and broadband.

Verizon is making it clear Fire Island and the New Jersey Barrier Island are just the first steps towards the retirement of copper, either in favor of fiber optics in high profit/low-cost areas or wireless in rural areas not worth upgrading.

Maguire claims Fire Island residents did not want the company to tear up yards or streets to replace its damaged copper wire network with newer technology like fiber. But Fire Island residents and administrators tell Stop the Cap! they were never asked. Instead, residents are being told Voice Link is likely their only option for traditional phone service on the western half of the island, and some customers are unhappy they will never get FiOS broadband upgrades Verizon says are financially untenable to provide.

Verizon has quietly tested Voice Link in Florida, giving customers the option of keeping their wired service or switching to the wireless alternative. But the test may have been stacked in Voice Link’s favor, as the choice was given to voice-only customers having chronic service problems with Verizon’s deteriorating copper wire network.

Going forward, many rural customers may not have a choice. For those who want Internet access, Verizon isn’t promising its wireless network is up to the task. Their suggested alternative?

Verizon’s solution for rural broadband.

Get a satellite dish.

Maguire acknowledged Voice Link customers won’t be able to fax or do certain activities, but he said the telco never pretended they would. Verizon won’t be offering data services with Voice Link, but if Fire Island customers want more options, they can potentially choose satellite, he said.

Maguire believes that customers living with a deteriorating copper landline network will gravitate quickly towards a wireless phone replacement.

Verizon arranged a blind test of Voice Link for 40,000 customers in another company’s territory with unbranded devices. When the copper wire network performed normally, customers preferred the quality of traditional landline service. But after it rained, the poorly maintained network made all the difference.

“The copper sounded like hell, it was noisy and static-y,” Maguire said.

Maguire did not say if Verizon blind tested whether customers preferred traditional landline service, Voice Link, or its fiber optic FiOS network.

Verizon hopes to begin introducing its Voice Link service in other markets as early as June.

Other stories of interest:

1. Verizon’s Long Term Plan to Abandon Wired Landlines/Broadband in Non-FiOS Areas Begins
2. Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
3. Six Months After Sandy, Verizon Abandoning Wired Network in Mantoloking, N.J.
4. Verizon Will Cease Selling Standalone DSL Service May 6th; Voice With DSL Only, Please
5. Verizon Ending DSL Service in FiOS Fiber-Wired Service Areas

CenturyLink’s massive nationwide broadband service outage on May 7 hurt Florida schools trying to administer online testing, small businesses in Nevada that were forced to close for the day, and frustrated nearly six million customers across both states and in Arkansas, Missouri, Louisiana, Texas, Kansas, Minnesota, Ohio, Wisconsin, Pennsylvania, Colorado, Washington, Virginia, Michigan, Montana, Oregon, Tennessee, and Illinois.

An unspecified router failure disrupted broadband service for up to eight hours, and it could not have come at a worse time for Lee County and Cape Charter Schools in Florida that had to postpone state-mandated tests that are completed by students online.

Dr. Lee Bush told WZVN when things like this happen it is not good for the students or area schools.

“There’s a window of time for these tests and there’s a short period of time left. It does affect us,” said Dr. Bush.

The Las Vegas Sun also found itself without Internet access for much of the day, which also brought the newspaper’s website down. Several area businesses that depend on the Internet decided to send workers home late in the morning after it became clear CenturyLink had no realistic expectation of when service would be restored.

The Clark County School District, which serves Las Vegas, also reported their broadband service was interrupted.

In Illinois, Michigan, and Wisconsin outages created a significant problem for farmers cut off from commodity trading markets during the morning hours.

“An early Tuesday morning in May is definitely not a good time to have a long-lasting service outage for agribusiness,” said Sam Haupmann, who advises small and medium-sized farms on telecommunications matters. “Connectivity is very important for the farm economy these days, and farmers can’t just switch to the cable company or a cell phone. There often is no cable company serving farms and cell phone service can be difficult in rural areas.”

Ask CenturyLink to credit your account for the May 7 outage.

Ed Perrine, the chief of operations of Network Tallahassee, a Florida provider, told the Tallahassee Democrat all of his operations went down in the outage, affecting at least 4,000 customers and the 600 to 700 businesses they serve on the Florida Panhandle alone.

Perrine is not too happy with early reports CenturyLink’s massive outage could have come as a result of botched routine maintenance right before the start of business on a weekday:

Perrine said he spoke with CenturyLink at 6 a.m. where they advised him the company was doing scheduled maintenance. At 7:35 a.m. they told him something had gone wrong during the maintenance and it was affecting customers in 13 states.

By 10:30 a.m., the company advised the outage had spread to 22 states.

Perrine said the company has not told him what is causing the outage, but said that just after 11 a.m., the company advised Perrine that they were in the process of restoring service.

The timing of the update is questionable according to Perrine, who said maintenance is normally scheduled on early Sunday morning so if something goes wrong businesses won’t be affected.

CenturyLink had no plans to issue automatic service credits to affected customers, but you can request a refund for a day of lost service by contacting CenturyLink by phone or e-mail.

WBBH in Fort Myers explains how a nationwide CenturyLink Internet outage on May 7 hurt the local economy, affected area schools, and frustrated area businesses and residents. (2 minutes)

Other stories of interest:

1. New Hampshire’s Comcast Phone Service Outage: Like FairPoint Never Existed
2. Cox’s Massive Weekend E-Mail Outage; Reason #1 to Get An Independent E-Mail Account
3. [Update 2] Time Warner Cable: Major Road Runner/Digital Phone Outage in Northeastern U.S.
4. AT&T’s Network Collapses in South Florida: Broward County to the Keys Without Service for Hours
5. Time Warner Cable Suffers Nationwide Outage, But At Least It Didn’t Last Long

A California federal judge has rejected a class action case against Comcast for allegedly hiding modem fees as high as $15 a month when signing up new customers.

In 2010, Athanassios Diacakis made several calls to Comcast inquiring about cable service as a new customer. Diacakis claims several Comcast representatives offered a bundle of broadband, television and phone service for $99 a month. When he asked Comcast about any other charges, company representatives eventually admitted there was a $25 installation fee, but never mentioned any modem rental fees.

After Comcast installed service, Diacakis began receiving Comcast bills that included a previously undisclosed monthly modem fee of $10 and an extra “lease charge” of $5 a month associated with his broadband service.

Diacakis alleged in his complaint charging $15 a month for cable modem equipment was “outside and in excess of the specifically quoted bundled service” package he ordered.

As Below Your Means points out, renting a cable modem may be harmful to your wallet.

The plaintiff sought class certification to force Comcast to refund some or all the modem fees charged customers from 2007 to the present. His first effort failed in January 2012 on grounds of insufficient evidence. His amended complaint was rejected May 3 on similar grounds.

United States District Judge Saundra Armstrong ruled Diacakis failed on two separate occasions to produce convincing proof Comcast was actively deceiving customers with undisclosed modem fees.

Judge Armstrong wrote that Diacakis should have come to court with evidence beyond the spoken promises of a handful of Comcast salespeople the plaintiff identified only by their first names. She was swayed by Comcast’s arguments:

As Comcast correctly points out, the only evidence offered by Plaintiff regarding Comcast’s alleged practices consists of his limited personal experience in speaking with “Heather,” “Steve” and another unidentified Comcast representative in August 2010. There is no evidence that Comcast has employed any policy, custom or practice of intentionally failing to inform potential Triple Play subscribers that they will be subject to separate modem fees. To the contrary, the record presented thus far shows that Comcast trains and instructs its employees to inform customers and potential customers about all applicable charges, including those for leased equipment.

[...] As noted, he has made no showing that the representations or omissions during those calls were made pursuant to a standardized script or marketing practice. Indeed, there is no evidence that anyone other than Plaintiff was allegedly misinformed about the modem fees.

Armstrong also faulted Diacakis for not independently locating, scrutinizing, and verifying Comcast’s print or television advertising before he filed a lawsuit seeking to represent every customer paying them:

Comcast argues that Plaintiff is not an adequate representative because there is no evidence that he or anyone else was misled by its marketing and advertisements for the Triple Play package. Plaintiff does not dispute that he lacks such evidence. In addition, Plaintiff admitted during his deposition that he did not review any advertisements before contacting Comcast in August 2010 about bundling his services. Since Plaintiff could not have been harmed by any allegedly misleading advertising, he cannot adequately represent a class member who claims to have been harmed by Comcast’s alleged marketing program.

Other stories of interest:

1. Judge Dismisses Hidden Cable Modem Fee Lawsuit Against Comcast
2. Time Warner Cable Faces Class Action Suits in NY, NJ Over Modem Fees
3. Bright House Boosts Speeds, Prices, Cable Modem Fees
4. Supreme Court Indirectly Torpedoes Settlement Between Comcast & Philadelphia Customers
5. AT&T Overbilling Class Action Lawsuit Shut Down; Forced Into AT&T-Inspired Arbitration

Phillip “I Shop Online” Dampier

Last week, JCPenney launched their nationwide redemption tour, apologizing to millions of ex-customers that fled the former retail giant, begging them to come back.

It took over a year for JCPenney to get the message that “disciplining” and “re-educating” customers to accept the wisdom of everyday higher prices with few sales and almost no coupons was hardly the door-busting success “miracle worker” CEO Ron Johnson originally had in mind. The ex-Apple executive was rewarded a $52.7 million signing bonus to take over JCPenney’s tired leadership and in return he dragged sales down 28.4% from the year before, with same store sales down 32%. Johnson’s new vision also steamrolled one-third of JCPenney’s online business.

The day those results became known, he confidently showed Wall Street he did not dwell in the reality-based community: “I’m completely convinced that our transformation is on track!” (For Kohl’s benefit anyway.)

Johnson also believed in a “less is more” philosophy in human resources, overseeing layoffs of 13 percent of the company’s workforce last April, with another 350 let go in July.

Despite the fact his all-new, rebooted vision of JCPenney was about as popular as bird flu, he stayed, even as customers and employees didn’t.

It wasn’t that the company didn’t know customers had a problem with all this. Many complained about the radical, unwanted changes at JCPenney, particularly middle-aged professional women representing one of the stores’ most important business segments. Company executives simply didn’t listen.

A year later, some of the same analysts that cheered JCPenney’s crackdown on discounting now wonder if the company will survive 2013. Many fretted about the real possibility the last customer to brave the “new era” of JCP might forget to turn the lights out when they left for good. Others were mostly furious the board let Johnson go.

Despite the tragic consequences, the conventional wisdom on Wall Street remains: Alienating customers with a revamp nobody asked for and “everyday pricing” designed to boost profits every day was not the problem, how Johnson implemented the strategy was. He just didn’t educate customers enough.

We see the same warped thinking in the broadband marketplace, particularly with usage caps, consumption billing, junk fees and the general ever-increasing price of broadband itself.

On providers’ quarterly results conference calls, the regular questions challenging leaders of the industry are not about providers charging too much for too little. The real concern is that your ISP is leaving too much ripe fruit on the tree:

• Where is the revenue-boosting usage caps and consumption billing, Time Warner Cable?
• Comcast: can’t you raise prices further on those recent speed increases to maximize additional revenue?
• Verizon: why are you spending so much on fiber broadband upgrades customers love when that money could have gone back to shareholders?
• AT&T: Is there anything else you can do to exploit your market share and make even more money from costly data plans?

The best ways a consumer can reward a good broadband provider include remaining a loyal customer, paying your bill on time and upgrading to faster speeds as needed. For Wall Street, the growing demand for broadband is a sign there is plenty of wiggle room for at-will rate increases, new fees and surcharges, contract tricks and traps, customer service cuts, and monetizing usage wherever possible. After all, you probably won’t cancel because the other guy in town is doing the same thing.

This is what sets the broadband marketplace of today apart from most retailers: consumers don’t have 10-20 other choices to take their business to if they are fed up.

Comcast or AT&T? Both charge a lot and have usage limits on their broadband service for no good reason. Your other alternatives? A wireless provider charging even more with an even lower usage cap. Or you can always go without.

While providers may tell you there is a healthy, competitive broadband marketplace, Wall Street knows better. When Time Warner Cable recently announced it would dramatically curtail new customer promotions and concentrate on delivering fewer services for more money, nobody bothered asking whether this would result in a stampede to the competition. What competition?

Although Google is delivering much-needed, game-changing competition in a tiny handful of cities, most Americans will not benefit because the best upgrades and lowest prices are only available where Google threatens the status quo. A larger number of municipalities are done putting their broadband (and economic) future in the hands of the phone and cable company and are building their own digital infrastructure for the good of their communities.

For everyone else, we can dream that one day, someday, the cable and phone company most Americans do business with will be forced to run their own JCPenney-like apology tour for years of abusive pricing and mediocre “good enough for you” broadband with unwarranted usage limits. Time Warner Cable went half way, but until competition or oversight forces some dramatic changes, we should not count on providers to actually listen to what customers want. They don’t believe they need to listen to earn or keep your business.

Other stories of interest:

1. Time Warner Cable’s Broadband Pricing Game: Special Wall-Street-At-Home Edition
2. Craig “Data Cap” Moffett Leaves Sanford Bernstein Wall Street Firm to Start His Own
3. Wall Street Journal’s Distorted Views on Broadband Only See the Industry’s Point of View
4. Time Warner Cable Loses 15% of Their Analog Cable Customers; News on Broadband Caps, Pricing
5. Time Warner Cable Pulling Back Hard on Promotions: New Customers Will Pay More for Less

Former Insight Cable customers in Evansville, Ind. are fuming after the company’s new owner temporarily left them without phone or Internet service, with nobody available to explain why.

Time Warner Cable attempted to convert Insight customers to its own platform last week, interrupting service in the process. Affected customers quickly jammed customer service lines, leading some to visit local cable offices to straighten things out.

Time Warner Cable will convert former Insight customers in Kentucky and Ohio to its own platform starting in June.

“Right now, I have no Internet,” said Insight customer Claudia Congleton. “I tried to call them three or four times today. No one answers. You’re waiting for over 30 minutes and so that’s why I’m down here. I’m just going to come down here and talk to them about it.”

“It’s so frustrating,” Congleton told Tristate News.

Time Warner blamed the problems on “minor glitches” during the customer conversion process, which began in Evansville on April 29. A larger transition is planned in Kentucky in mid-June, with former Insight customers in Columbus, Ohio moved later that same month.

When Time Warner Cable launched the conversion in Indiana, broadband customers whose names ended in letters “A” through “K” were redirected to a web page that required them to re-register broadband service and select a new twc.com e-mail address to replace their existing Insight e-mail account. Customers who either failed to complete the registration process or who tried during peak usage times often found their Internet service interrupted. Similar problems occurred with phone customers.

Some customers were unhappy with the cable company’s optimistic predictions of a quick fix.

“They lied to me,” said Insight customer Mary Jackson.  “I am so upset because they lied to me.”

Jackson visited the Evansville cable office to report her phone and Internet service were out and the company promised a same-day fix. A day later it was still out.

Here is how the transition was supposed to take place between Insight Cable and Time Warner. WTVW in Evansville walks customers through the conversion process.  (2 minutes)

 http://www.phillipdampier.com/video/WFIE Evansville Broadband Problems 5-1-13.mp4

WFIE in Evansville reports how things actually went. Not so good, reported a number of customers.  (1 minute)

http://www.phillipdampier.com/video/WTVW Evansville Time Warner Cable Customers Look For Answers 5-1-13.flv

The next day, Time Warner Cable customers who could not get through to the company by phone were down at this Time Warner Cable office in Evansville looking for answers, as WTVW reports.  (2 minutes)

http://www.phillipdampier.com/video/WFIE Evansville Insight Switch 5-3-13.mp4

The following day, some customers were still without service. WFIE talks to one Time Warner Cable customer upset she still did not have phone service.  (1 minute)

Other stories of interest:

1. Time Warner Cable Reviewing Its Newest Acquisition: Insight Communications
2. Say Goodbye to Insight Cable, Time Warner Cable Has Arrived
3. Time Warner Cable Acquires Insight Communications for $3 Billion – $1B Below Asking Price
4. Cable Flipping: Insight Communications On Sales Block, Time Warner Cable Says Price Too High
5. Time Warner Customers Upset by Surprise Modem Fees Starting Nov. 1st With No Formal Notice

Greenlight, the broadband provider owned and operated by the city of Wilson, N.C. today announced that it will begin offering gigabit Internet connectivity services to its customers by this July.

“In January, the Federal Communications Commission issued a challenge to communities to provide gigabit service by 2015, and we’re proud to answer that challenge now. We are excited to launch our gigabit service and allow our customers to be the first in the state to experience such high speed Internet access,” said Will Aycock, general manager of Greenlight. “Ultra-high speed Internet will help position Wilson for the future and will provide our businesses and residents with the tools they need to succeed.”

In January, the Federal Communications Commission Chairman issued the “Gigabit City Challenge” which challenged providers to offer gigabit service in at least one community in each state by 2015. Gigabit services are approximately 100 times faster than average high-speed Internet connections.

Greenlight was formed in 2008 to offer an independent, locally owned and operated option for television, telephone and Internet broadband connectivity for Wilson residents. Since then, Greenlight has grown to offer services to more than 6,000 residential customers and businesses and the Wilson County School System. In addition, Greenlight provides free wireless Internet access throughout the downtown Wilson area.

The community-owned broadband provider far out-delivers broadband performance from competitors Time Warner Cable and AT&T. Neither the cable or telephone company was willing to upgrade service in Wilson so the city decided to launch its own public network and manage its broadband future itself.

Unfortunately, many cities in the Tar Heel State cannot follow Wilson’s lead. The state’s dominant commercial cable and phone companies lobbied the Republican-controlled legislature for legislation that makes it nearly impossible for other public broadband providers to emerge.

The gigabit option will become available this summer on the community’s fiber to the home network.

Other stories of interest:

1. Happy Rate Increase Tuesday: Time Warner Cable Back for More from North Carolinians
2. America’s Best Broadband Is Publicly Owned: See How It Transforms Chattanooga, Tenn.
3. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced
4. Leverett, Mass. Fed Up With Poor Broadband; Town Wants Its Own Gigabit Network
5. Chattanooga: America’s First Gig City Opens the Door to Innovation, Jobs With U.S. Ignite

If the Federal Communications Commission allows Charter Communications to deploy a new, enhanced encryption system for set-top boxes that will allow it to scramble any or all of its video channels, it will offer broadband service up to 100Mbps to at least 200,000 additional homes within two years and transition every Charter Cable system in the country to all-digital television service.

The proposed deal was addressed to the Commission in a brief letter from Charter Communications CEO Thomas Rutledge on Apr. 4.

Charter is trying to negotiate a two-year waiver to allow the company to deploy a cheaper and more robust downloadable set-top box security upgrade that initially does not support CableCARD technology. Charter’s proposal will leave its legacy conditional access platform in place to give CableCARD users a temporary reprieve until the next generation of CableCARD technology becomes available in retail outlets. Other customers will eventually have to get a set-top box for every television in the home once the company converts to an all-digital platform. QAM service will not be available if Charter encrypts its lineup.

Charter wants to move away from analog service to increase bandwidth for DOCSIS 3 broadband upgrades and providing more HD channels to customers.

The commitment to offer up to 100/5Mbps service may not tax Charter too much. Multichannel News reports Charter’s regulatory filings show the majority of Charter Cable systems can already offer 100Mbps service today.

Charter ended 2012 with DOCSIS 3.0 deployed to 94 percent of its homes passed, “allowing us to offer multiple tiers of Internet services with speeds up to 100 Mbits download to our residential customers.”  About 98 percent of Charter’s cable network supported 550 MHz or more of capacity at the end of 2012.

Rutledge is attempting to repeat the success he had at Cablevision convincing the FCC to waive costly set-top box upgrade requirements. Cablevision also received a waiver allowing it to encrypt its entire video lineup in the New York area, in part to combat signal theft.

The Consumer Electronics Association is opposed to the cable industry’s efforts to adopt their own closed standards for set top security, preferring AllVid, a proposed next generation version of the CableCARD that will work with all types of video services, not just cable television.

Other stories of interest:

1. Charter Customers: Call and Ask Why You Can’t Have Their $60 Cable TV/30Mbps Broadband Deal
2. Charter Communications Adding $200 Upfront “Activation Fee” for 100Mbps Broadband
3. Former Cablevision COO Hits Pay Powerball as New CEO of Charter: $90+ Million Salary
4. TWCAlex (Dudley) Takes Job With Charter Cable; Helped Front for TWC’s 2009 Cap Experiment
5. Charter Cable Raids Cablevision for Executive Talent; Company Opens Office in N.Y.C.

To many, Provo, Utah might seem an unusual choice to follow on the heels of Google’s earlier announcement its gigabit fiber network was headed to Austin, Tex.

Provo is only the third largest community in Utah — Salt Lake City and West Valley City are bigger — and the community already has a fiber network called iProvo. So why build another one?

Google won’t have to.

But first some background:

iProvo was envisioned a decade ago as a public-private partnership — a fiber to the home network owned by the public with private service providers using it to sell broadband and other services . iProvo taught an early lesson about municipal broadband — large cable and phone companies routinely boycott participation in any network they do not own and control themselves.

In 2003, the president of Qwest’s Utah division made clear their intentions: “Fiber optic’s capabilities are way more than what most consumers need in their homes. Why provide a Rolls Royce when a Chevrolet will do?”

Comcast, the dominant local cable operator, also “went ballistic” according to former mayor Lewis Billings.

iProvo can be yours for just $1.

“One hired a PR firm and a telemarketing company to make calls to citizens,” Billings recalled. “They also placed full-page ads and ultimately hired people to picket City Hall. It was a bruising fight.  My favorite picket sign had a piece of telephone wire taped to it and read that I and one of my key staff members were, ‘a Twisted Pair.’”

With both Qwest and Comcast wanting nothing to do with the project, smaller independent ISPs had to fill the gap. It was a difficult sell, particularly because Qwest and Comcast blanketed Provo residents with a misinformation campaign about the network and pitched highly aggressive retention offers to keep customers with the phone and cable company. iProvo has been in financial distress ever since.

Former Provo city councilwoman Cynthia Dayton remembers being on the council when iProvo was approved and believes the public-private network was a decade before its time.

“Ten years ago it was worth the vote on iProvo,” she told the Daily Herald. It was one of the most difficult decisions but it was for the future.”

More than a year ago, Google noticed the city of Provo issued a request for proposals on what to ultimately do with iProvo.

Google became interested because Provo is seen as a city with hundreds of technology start-up companies and maintains a vibrant tech hub. The city also ranked highly for the enormous value it places on connectivity and community — something the approval and construction of iProvo demonstrated.

Why Provo? Google considers the city’s rankings. (1 minute)

City officials and Google executives began quietly talking more than a year ago about Google buying the public-private network. A key selling point: the city was willing to let the operation go for a steal — just $1.00. In return, Google promised to invest in and upgrade the network to reach the two-thirds of Provo homes it does not reach. Google says iProvo will need technology upgrades in the office, but the existing fiber strands already running throughout the city are service-ready today.

Val Hale, President of the Utah Valley Chamber of Commerce, said a quick “back of the envelope” estimate put Google’s anticipated investment in iProvo network upgrades at $18 million, according to the Deseret News. Unfortunately, taxpayers will still need to pay off about $40 million in bonds the city accumulated for iProvo’s initial construction costs.

Curtis

Current Mayor John Curtis says he has made the best out of a difficult situation.

“We have maximized what we have here today,” said Curtis. “It’s about maximizing what we have. I believe in the long-term it will pay dividends many times greater than what we paid into it, but it’s going to take a while to realize that dream.”

Google promised free gigabit Internet service to 25 local public institutions including schools, hospitals, and libraries. Residential customers will be expected to pay $70 a month for 1,000Mbps service or get 5Mbps broadband service for free up to seven years.

Google’s investment in Provo is anticipated to be far lower than in Austin and Kansas City — cities where it needs to build a considerable amount of fiber infrastructure from scratch. With existing fiber already in place in Provo, Google’s gigabit service will be available by the end of this year, at least six months faster than in Austin.

With reduced construction costs, Google will only ask new customers for a $30 activation fee, far less than the $300 Google will ask Austin and Kansas City residents to pay if they do not sign a multi-year service contract or only want basic 5Mbps service.

Google sees the opportunity to use its fiber network in an ongoing effort to embarrass other broadband providers into investing in speed upgrades.

KSL in Salt Lake City reports Google Fiber is coming to Provo. Last year Google began talking with the city to acquire its iProvo municipal fiber network.  (3 minutes)

KSTU in Salt Lake City reports taxpayers are still on the hook for around $40 million in bond payments to cover the construction costs of iProvo. But Google Fiber will stop other Internet providers from “cheating everyone” says one local Provo resident.  ”[Other ISPs] give you the slowest connection possible and charge you a ridiculous amount for it,” said Haley Cano. (4 minutes)

http://www.phillipdampier.com/video/KTVX Salt Lake City Google Fiber in Provo 4-17-13.mp4

KTVX in Salt Lake had some trouble navigating the difference between a gigabit and a gigabyte, and confused what Google services will be sold and which will be available for free in this report, but the ABC affiliate covered the unveiling with both city and Google company officials on hand.  (2 minutes)

http://www.phillipdampier.com/video/KTVX Salt Lake City Google Fiber Details in Provo 4-18-13.mp4

This morning, KTVX did a better job in this interview with the mayor of Provo and Google’s Matt Dunne, who says Google believes speed matters and current ISPs simply don’t offer enough.  A key factor to attract Google’s interest is a close working relationship with the cities that want the service. (2 minutes)

Other stories of interest:

1. Breaking News: Provo, Utah the Next City Slated for Gigabit Google Fiber
2. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced
3. Google Fiber Announces Next Gigabit Fiber City: Olathe, Kansas
4. Austin Media Gushing for Google Fiber
5. AT&T Diverts Salt Lake City 911 Calls to Seattle

This looks good enough for us, says the American Cable Association

A lobbying group for small cable operators says the nation’s current broadband availability maps are flawed, but good enough for the FCC to rely on to veto funding for rural broadband projects that might compete with some of their members.

The American Cable Association submitted its comments to the FCC as part of discussions about the next phase of broadband subsidy funding from the Connect America Fund.

Most current broadband maps rely heavily on unverified data voluntarily submitted by existing broadband providers or by third-party groups that are funded or controlled by some of the nation’s largest phone companies. Both have a vested interest painting an optimistic map of solid broadband coverage as a tool in the ongoing public policy fight pitting broadband advocates clamoring for better access and speed against the cable and phone companies that offer the service.

ACA members are concerned that the government might subsidize new broadband start-ups that could eventually compete against existing cable companies. The group calls such “overbuilders” redundant and wasteful.

“The FCC should protect the public by ensuring that broadband deployment subsidies do not result in significant government-supported overbuilding, which would cause real harm to cable operators that have invested only private capital,” ACA President and CEO Matthew M. Polka said. “It would also mean that locations across the country that need support will not receive broadband because the program would not have additional funding.”

Don’t Surprise Us With Doubling the Minimum Speed Requirement When We Thought 3Mbps Service Was Good Enough

ACA member cable operators assumed they would be safe from the government-funded overbuilders if they provided at least 3Mbps broadband, but now the FCC is exploring doubling the minimum speed to 6Mbps, which threatens a number of smaller cable operators that have avoided upgrades to increase speeds.

Polka

“This is a huge burden on a smaller operator.  These operators assumed when they filed data through the State Broadband Initiatives (SBIs) in June, 2012, providing service with speeds of at least 3 Mbps/768 kbps service was enough to protect them,” Polka said.

The ACA also wants the agency to initially reject applicants for broadband funding if current broadband map data shows another provider operating in the area, even if that provider’s volunteered service coverage maps are exaggerated.

“The Commission should presume the National Broadband Map (“NBM”) is accurate and rely upon it in identifying eligible areas for Phase II support, even though it is a work in progress and contains inaccuracies. The reasons for this conclusion are many.

First, the NBM is the most accurate and most granular representation of national broadband deployment that currently exists. Second, the federal government has already made a significant investment in the NBM, is seeking to further perfect its data, and clearly intends for it to be a key tool upon which to base its policies.

The group also warned that if the FCC does not rely on its inaccurate map, providers might be hesitant to voluntarily supply more coverage data in the future.

Prove That We Don’t Already Provide Service If Your Broadband Operation Wants Funding

The ACA’s comments also urge the FCC to require would-be new broadband providers to have the burden of proof that a cable operator does not already offer service in an area before they can qualify for Connect America funding. How? By calling the cable company pretending to be a new customer and seeing if they can schedule an installation at each particular home a provider plans to serve.

“In the normal course of business to attract customers, small cable operators post their service areas and broadband service offerings,” writes the ACA. “All a [new entrant] needs to do is survey the operator’s website and advertisements and, if necessary, call customer service. In contrast, it would be a much greater hardship for small cable operators, who lack regulatory staff and have already made the effort to be designated on the [map], to bear the initial burden and start from the beginning to submit documents to ensure they are on the map.”

In short, the ACA wants the FCC to assume their cable operator members cover an area until proven otherwise.

“It would be far less burdensome for the [new entrant] to challenge [allegedly inaccurate coverage map data] first, in which instance only those operators who are challenged would need to reaffirm their presence,” writes the ACA.

Because We Are Cable Operators Running the “Robust DOCSIS Platform,” It Means We Already Provide Great Service

The ACA also called on the FCC to give cable operators a free pass from demonstrating they can meet the Commission’s quality of service standards regarding latency and the responsiveness of the customer’s broadband connection.

“For cable operators, the Commission should presume that because they employ the robust DOCSIS platform they meet the latency requirement,” the ACA wrote.

Committing to study and oversee the quality of cable broadband is also a really bad idea according to the cable lobbying group.

“Further exploration of a cable system’s latency performance without clear and convincing evidence to the contrary would be unproductive for the Commission in carrying out its public interest mandate and for cable operators,” the ACA argued.

Don’t Tell Us What We Can Charge and What Usage Limits We Can Impose; That Should Be Reserved for Wall Street and Our Investors

The ACA is also concerned that the FCC might consider the price consumers pay for rural broadband and what usage limits rural cable operators impose when deciding whether it is time to help fund the launch of a competing provider.

Captive rural customers can pay the same or higher prices for much slower broadband service than urban Americans pay, but the ACA advocates the FCC look the other way and avoid making any such comparisons:

“[...] There are many reasons for the Commission to refrain from establishing (even minimal) comparable rates and terms of service for the provision of broadband service by cable operators to be deemed as “serving” an area.

First, the Commission should recognize that cable operators as a rule build their networks and provide broadband service with no government support, only using private capital and based on a business case enabling them to receive a market return on that investment.

Any effort by the government to impose price or usage allowances – that is regulate the service – has great potential to lower that return and slow rural broadband deployment. With universal service funding limited, this would lessen the ability for the Commission to achieve its objective of bringing broadband to unserved areas.

Further, it would be almost impossible to establish a reasonably comparable rate and terms of service because, at least for cable operators, these change so often and are usually offered in bundles with other services. Most cable customers subscribe to either or both a package of services and some sort of promotional offering. Further, bundles are far from homogeneous and operators change frequently. All of this makes it virtually impossible to have valid urban-rural comparisons.

[...] Finally, if it were to establish a comparable rate and terms of service for broadband, the Commission would be acting in an area where it clearly lacks authority.

ACA past chairman Ben Hooks, CEO of Buford Media and operator of cable systems under the Alliance Communications brand, appeared on MSNBC to rail against federal cable broadband regulations and oversight requirements. Hooks operates several small cable systems in Texas, Oklahoma, Arkansas, Louisiana, Mississippi, and Alabama that are throwbacks to a much earlier era of cable. Many offer just a few dozen channels and deliver no broadband or cable phone service.

Hooks is upset because the federal government wants to help fund new start-up broadband providers in his backyard. He thinks this is unfair, because his cable operations, run with largely refurbished, cast-off cable equipment discarded years ago by larger cable operators, is funded with private capital and may have to compete with new providers partly funded by the Connect America Fund. In the middle of the dispute are rural Americans who cannot get broadband from Alliance Communications and would be prevented from getting it from anyone else if Hooks has his way.  (6 minutes)

Other stories of interest:

1. Kyle McSlarrow’s Wonderful World of Broadband – The Broadband Glass is 95 Percent Full, Cable Lobby Says
2. Cable Lobby Pays for Research Report That Miraculously Agrees With Them on Rural Broadband Reforms
3. Chief Cable Lobby Group Explores Dropping “Cable” from Its Name
4. Broadband Maptastrophe; FCC Ignores Its Own 4/1Mbps Standard, Relies On Faulty Map Data
5. Telecom Company-Influenced Broadband Availability Map Hurts Mississippi Broadband Expansion