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Rochester Philanthropist Tom Golisano Acquiring Greenlight Networks

Golisano

Rochester billionaire and philanthropist Thomas Golisano is seeking expedited regulatory approval from New York’s Public Service Commission to acquire Rochester-based Greenlight Networks, LLC, a fiber to the home network provider for an undisclosed sum.

Greenlight Networks has been slowly overbuilding Charter/Spectrum and Frontier Communications’ service areas in eastern Monroe County since 2012, offering subscribers gigabit internet access. But time may be running short for Greenlight’s competitive broadband speed advantage. Charter Communications is reportedly planning to introduce gigabit service as early as April 25th throughout upstate New York, except for Buffalo.

The urgency of the transaction’s approval is clear in the companies’ filing with state officials requesting an expedited review and approval of the transaction.

“Greenlight’s […] need for working capital and the optimization of capital structure required for long-term success in the competitive telecommunications industry are matters for urgent consideration,” the application states. “Greenlight seeks Commission approval in order to avoid unnecessary delays in the completion of its network expansion projects and in order to secure valuable, committed, outside investors who share Greenlight’s vision and believe in its ability to execute on its plan.”

Greenlight’s success is likely dependent on its ability to rapidly expand its fiber optic network before its biggest competitor, Charter’s Spectrum, capitalizes on its forthcoming ability to match Greenlight’s download speeds. Greenlight receives praise from subscribers lucky enough to live in a neighborhood reached by its network. But residents also report frustration over the slow pace of the company’s fiber network expansion, particularly in suburbs west of the Genesee River that bisects the city of Rochester.

Golisano’s Grand Oaks LLC of Pittsford, N.Y. promises customers the acquisition will not result in any changes in Greenlight’s rates or its terms and conditions.

The petition claims the acquisition is in the public interest because it will offer Greenlight much-needed additional capital to accelerate deployment of its fiber network inside Rochester and beyond. Greenlight’s website suggests the company is considering expansion into the New York State cities of Albany, Binghamton, Buffalo, Ithaca, Syracuse, and the Finger Lakes Region. In Connecticut, the company is considering serving Bridgeport, Danbury, Hartford, New Haven, and Stamford (the corporate home of Frontier Communications). Grand Oak also promises to grow jobs at Greenlight and increase operational efficiency at the company.

Golisano is well-known in Rochester as an entrepreneur, philanthropist, and civic leader. Golisano founded Paychex, a leading national payroll service provider in 1971. After his retirement in 2004, Golisano has been actively involved in local civic causes and advocates for policies promoting improvement in the economy of western New York State.

The application is likely to be approved, but not soon enough to combat Charter Communications’ accelerated broadband upgrades across New York State. By early summer, Spectrum customers across New York State will receive 200 Mbps Standard service, 400 Mbps Ultra service, or 940 Mbps (nearly gigabit) Gigabit service from the cable operator at prices ranging from $65-125 a month. In contrast, Greenlight currently offers customers 100 Mbps for $50, 500 Mbps for $75, or 1,000 Mbps for $100 a month.

Former Head of Ajit Pai’s Broadband Group Arrested by FBI on Fraud Charges

Phillip Dampier April 16, 2018 Public Policy & Gov't, Rural Broadband, Video No Comments

Pierce (Image courtesy of: KTUU-TV)

FCC Chairman Ajit Pai’s choice to lead his newly created Broadband Deployment Advisory Committee (BDAC) was arrested last week by the FBI and charged with a multimillion-dollar investment fraud scheme.

Elizabeth Pierce, former CEO of Quintillion and ex-chair of the BDAC from its start until September, 2017 surrendered to authorities in New York City. Pierce was charged with wire fraud for allegedly tricking investors into putting more than $250 million into an Alaskan fiber optic project based on guaranteed revenue contracts prosecutors claimed Pierce forged herself to reassure investors Quintillion would benefit from telecom traffic revenue the fiber network never had.

To realize her plan to build a fiber optic system that would service Alaska and connect it to the lower 48 states, Pierce convinced two investment companies that she had secured signed contracts that would supposedly generate hundreds of millions of dollars in guaranteed future revenue from the system,” said Manhattan U.S. Attorney Geoffrey Berman. “Those sales agreements were worthless because the customers had not signed them. Pierce had forged counterparty signatures on contract after contract.”

To raise adequate funds to support Quintillion’s ambitious fiber optic network buildout, Pierce frequently appealed to outside investors. Several wanted evidence the fiber network would attract enough business from telecom companies to justify an investment. Pierce was accused of faking contracts with Alaska’s telecommunications companies from 2015 until 2017 to provide reassurance companies were committed to spend at least $24 million in traffic charges the first year the network began operation.

Pierce’s alleged scheme fell apart when Quintillion began invoicing clients based on the fake contracts. At least one protested, claiming it did not use Quintillion’s network. A subsequent internal investigation allegedly founds dozens of phony contracts kept in Pierce’s Google Drive account, with at least 78 moved to the service’s trash bin 48 hours before investigators began searching Pierce’s computer. Prosecutors were able to recover the deleted documents with a search warrant presented to Google.

Pierce may have attracted FCC Chairman Ajit Pai’s attention after publicly complaining the permitting process in Alaska took longer than building fiber cables from scratch and shipping them from Europe. Out of more than 380 applicants, FCC Chairman Ajit Pai picked Pierce in 2017 to head his new broadband advisory committee, tasked with eliminating or streamlining regulations and making life easier for broadband providers to persuade them to expand broadband rollouts.

“The Commission was fortunate to have an excellent and deep pool of applicants to serve on the BDAC,” Chairman Pai noted on the occasion of introducing the BDAC and Pierce to the public. Critics argue Pai’s BDAC has been stacked with industry, industry-funded or industry-friendly committee members that are influencing most of the public policy recommendations issued in the group’s final recommendations. At least two city officials resigned over concerns their views were not being taken seriously.

Pierce resigned from Quintillion in August 2017 and from the BDAC a month later for  “personal reasons.”

KTUU-TV in Anchorage reports Quintillion’s ex-CEO was charged with wire fraud. Nevertheless, the Alaskan fiber project is trying to carry on. (3:11)

Corruption? Massachusetts Giving Preferential Treatment, Taxpayer Dollars to Charter/Spectrum

The head of a state-funded group with direct ties to the Massachusetts governor’s office told local officials in New Marlborough that the Massachusetts Broadband Institute (MBI) “believes in cable companies” and is favoring one — Charter Communications, with an exclusive offer to invest millions in taxpayer dollars to entice Charter to bring its Spectrum cable service to town, while telling would-be competitors the money is only available to Charter Communications.

MBI was created in 2008, originally tasked with investing $50 million in state funds to help resolve the digital divide between eastern and western Massachusetts. MBI also manages the publicly owned, middle mile fiber optic network that towns in western Massachusetts are depending on as part of their plans to connect local residents to the internet.

In 2015, MBI suddenly yanked support for WiredWest, the region’s most robust and credible player in connecting residential homes and businesses. The group had spent several years organizing and educating some two dozen largely rural communities, and was well on its way to constructing a public broadband network for the towns that agreed to sign on to the project. Since 2015, a series of political disputes, bureaucracy, and confusion has stalled broadband expansion.

Peter Larkin, MBI’s board chairman, has been roundly criticized in many western Massachusetts communities for continuing MBI’s slow and cumbersome bureaucracy, frequent policy shifts, and most recently playing favorites with cable companies. Ignoring his own organization’s systemic failures and bureaucratic roadblocks, Larkin has recently leveraged community frustration with the slow pace of progress as an excuse to hand two of the nation’s largest cable operators public taxpayer dollars to complete a project MBI was directly responsible for stalling.

Larkin

Under the latest proposal, outlined last Friday, Charter Communications would receive $3.1 million to expand Spectrum cable service to at least 96% of the community of New Marlborough. Originally, the town was responsible for $1.44 million in cost sharing with the state, a substantial sum for a community with a population just over 1,500 residents. Larkin last week offered to split the cost to the town, with the town’s share reduced to $720,000 — payable directly to Charter.

“The state is willing to cut the gap in half to make this project go,” Larkin said.

But that deal appears to be good only if the town selects Charter Communications. Over the last year, MBI has been allocating public taxpayer dollars towards private cable and phone companies, especially Comcast and Charter, to get the companies to agree to expand their cable systems in areas both have ignored for decades. WiredWest’s proposal made towns partners in the project. Larkin’s offer suggests taxpayers should pay up to 50% of the expansion costs, while Charter keeps 100% of the revenue and profits.

In the past, MBI’s financial carrots have been enough to get the two cable companies to expand using state matching funds alone, but as the town’s Broadband Committee Chairman Richard Long told the Berkshire Eagle after the meeting, he thinks this is the first time an unserved town in central or western Massachusetts will have to contribute local taxpayer funds as well just to get service from a cable company.

Larkin’s hard sell for Charter raised eyebrows among some in the town, especially after Larkin offered to use state funds to also finance their $720,000 portion of the deal over as much as a decade. Larkin claimed he wanted to get the project done and wanted to be helpful.

“The state may spend moneys or engage in other activities that benefit or incentivize private businesses in order to promote such [economic] development and it may authorize or partner with its cities and towns to do likewise,” Larkin recently wrote in a letter to towns offering to help them get negotiations going with the cable companies.

Town resident Dave Travis called Larkin’s offer something else.

“Call me a whistleblower, concerned citizen, activist for fairness, justice and democracy, but for Massachusetts Broadband Institute to show such blatant preferential treatment [to Charter] when there are qualified, experienced local options feels like corruption, and it needs some serious daylight,” Travis wrote.

WiredWest’s Tim Newman exposed just how far Larkin was willing to go to bat for Charter.

“Is the generosity you’re presenting to our town on behalf of Charter the same generosity if the town were to build its own network?” he asked Larkin.

“We do believe in the cable companies … we think it’s a value worth leaning in a little bit harder for,” he said, suggesting Charter has the financial ability to complete the project.

“So, the short answer is ‘no’ — the $720,000 would not be available?” Newman pressed.

“No,” Larkin answered.

The FCC Four: The Top Special Interests Lobbying the FCC

March was a big month for lobbyists visiting the Federal Communications Commission, which opened the doors to wireless special interest groups for “ex parte” meetings with agency staffers that, in turn, brief the three Republicans and two Democrats that serve as FCC commissioners.

Last month’s ex parte filings reveal strong evidence of a coordinated, well-financed campaign by America’s wireless operators and cable companies to get the FCC to ease off regulations governing forthcoming 5G networks, particularly with respect to where tens of thousands of “small cell” antennas will be installed to deliver the service.

Four industry trade groups and companies are part of the concerted campaign to scale back third party control over where 5G infrastructure will end up. Some want to strip local governments of their power to oversee where 5G infrastructure will be placed, while others seek the elimination of laws and regulations that give everyone from historical societies to Native American tribes a say where next generation wireless infrastructure will go. The one point all four interests agree on — favoring pro-industry policies that give wireless companies the power to flood local communities with wireless infrastructure applications that come with automatic approval unless denied for “good cause” within a short window of time, regardless of how overwhelmed local governments are by the blizzard of paperwork.

Here are the big players:

The Competitive Carriers Association (CCA)

The CCA is primarily comprised of rural, independent, and smaller wireless companies. In short, a large percentage of wireless companies not named AT&T or Verizon Wireless are members of CCA. The CCA’s chief goal is to protect the interests of their members, who lack the finances and political pull of the top two wireless companies in the U.S. CCA lobbyists met ex parte with the FCC multiple times, submitting seven filings about their March meetings.

CCA’s top priority is to get rid of what they consider burdensome regulations about where members can place cell towers and antennas. They also want a big reduction in costly environmental, tribal, and historic reviews that are often required as part of a wireless buildout application. CCA lobbyists argue that multiple interests have their hands on CCA member applications, and fees can become “exorbitant” even before some basic reviews are completed. The CCA claims there have been standoffs between competing interests creating delays and confusion.

Costs are a relevant factor for most CCA members, which operate regional or local wireless networks often in rural areas. Getting a return on capital investment in rural wireless infrastructure can be challenging, and CCA claims unnecessary costs are curtailing additional rural expansion.

NCTA – The Internet & Television Association

The large cable industry lobbyist managed to submit eight ex parte filings with the FCC in March alone, making the NCTA one of the most prolific frequent visitors to the FCC’s headquarters in Washington.

The NCTA was there to discuss the Citizens Broadband Radio Service (CBRS) band, which is of particular interest to cable companies like Charter Communications, which wants to get into the wireless business on its own terms. Cable lobbyists, under the pretext of trying to avoid harmful interference, want to secure a large percentage of the CBRS band for their licensed use, at the expense of unlicensed consumers and their wireless industry competitors.

The cable industry wants CBRS spectrum to be wide, spacious, and contiguous for its cable industry members, which should open the door to faster speeds. The lobbyists want to make life difficult for unlicensed use of the band, potentially requiring cumbersome use regulations or costly equipment to verify a lack of interference to licensed users. They also want their traffic protected from other licensed users’ interference.

CTIA – The Wireless Association

The wireless industry’s largest lobbying group made multiple visits to the FCC in March and filed 10 ex parte communications looking for a dramatic reduction in local zoning and placement laws for the next generation of small cells and 5G networks.

The CTIA has been arguing with tribal interests recently. Tribes want the right to review cell tower placement and the environmental impacts of new equipment and construction. The CTIA wants a sped-up process for reviewing cell tower and site applications with a strict 30-day time limit, preferably with automatic approval for any unconsidered applications after the clock runs out. Although not explicitly stated, there have been grumblings in the past that tribal interests are inserting themselves into the review process in hopes of collecting application and review fees as a new revenue source. Wireless companies frequently question whether tribal review is even appropriate for some applications.

Sprint has had frequent run-ins with tribal interests demanding several thousand dollars for each application’s review under the National Historic Preservation Act (NHPA), which is supposed to protect heritage and historical sites.

In Houston, Sprint deployed small cells around the NRG Stadium, but found itself paying fees to at least a dozen Indian Tribal Nations as part of the NHPA. The NHPA opens the door to a lot of Native Americans interests because of how the law is written. Any Tribal Nation can express an interest in a project, even when it is to be placed on public or private property that is not considered to be tribal land. In Houston, Sprint found itself paying $6,850 per small cell site, not including processing fees, which raised the cost to $7,535 per antenna location. Those fees only covered tribal reviews, not the cost of installation or equipment. Some tribes offered better deals than others. The Tonkawa Tribe has 611 remaining members, mostly in Oklahoma. But they sought and got $200 in review fees for the 23 small cell sites deployed around the stadium. The Kiowa Indian Tribe of Oklahoma, not Texas, charged $1,500 for the 23 applications it reviewed.

Sprint complains it has paid millions in such fees over the last 13 years and no tribe to date has ever asked to meet with Sprint or suggest one of its towers or cell sites would intrude on historic or tribal property.

“Tribal Nations are continuing to demand higher fees and designate larger and larger areas of interest,” says Sprint. “At present, there are no constraints on the amount of fees a Tribal Nation may require or the geographic areas for which it can require payment for review. The tribal historic review process remains in place even in situations—such as utility rights-of-way—where the Commission has exempted state historic review.”

The CTIA wants major changes to the NHPA and other regulations regarding cell tower and antenna placement before the stampede of 5G construction begins.

Verizon

Verizon has been extremely busy visiting with the FCC during the month of March, filing 10 ex parte communications, also complaining about the tribal reviews of wireless infrastructure.

Verizon argues it wants to expand wireless service, not effectively subsidize Native American tribes.

“The draft order’s provisions to streamline tribal reviews for larger wireless broadband facilities will likewise speed broadband deployment and eliminate costs, thus freeing up resources that can, in turn, be used to deploy more facilities,” Verizon argued in one filing.

Verizon has also been carefully protecting its most recent very high frequency spectrum buyouts. It wants the FCC to force existing satellite services to share the 29.1-29.25 GHz band for 5G wireless internet. Verizon has a huge 150 MHz swath of spectrum in this band, allowing for potentially extremely high-speed wireless service, even in somewhat marginal reception areas.

“Verizon assured the commission that even when sharing with other services, we would be able to make use of the 150 MHz of spectrum in this block to provide high-speed broadband service to American consumers,” said one filing.

42% of Frontier’s Customers in Nevada are “Very Dissatisfied” With Their DSL Service

Bad results for Frontier DSL in Nevada. (Source: Elko Residential Broadband Survey)

Bad results for Frontier DSL in Nevada. (Source: Elko Residential Broadband Survey)

Only six Frontier Communications customers surveyed in Elko, Nev. gave the phone company an “A” for its DSL service, while 42% flunked Frontier for what they considered unacceptable internet service.

The Elko Broadband Action Team has surveyed residential and business customers about broadband performance and found widespread dissatisfaction with Frontier Communications over slow connections and service interruptions.

“I’m pretty disappointed in them,” said Elko councilman John Patrick Rice.

Businesses and residential customers were in close agreement with each other rating Frontier’s service, with nearly 87% complaining they endure buffering delays or slowdowns, especially when watching streaming video. When browsing web pages, nearly three-quarters of surveyed customers still found service lacking.

Among the complaints (Res)-Residential (Bus)-Business:

  • Service interruptions: 74.43% (Res)/79.69% (Bus)
  • Too slow/not receiving advertised speed: 72.16% (Res)/65.75% (Bus)
  • Price: 63.64% (Res)/37.5% (Bus)
  • Customer Service: 38.07% (Res)/45.31% (Bus)

The Nevada Attorney General’s Bureau of Consumer Protection received a steady stream of complaints about Frontier’s DSL service in the state over the past year.

Answering the survey question, “would you be interested in faster download and upload speeds at prices that are somewhat comparable to what you are paying now?” 97.87 percent of residential respondents said yes.

Frontier representatives responded to the survey results at a March 27 Elko City Council meeting.

“Frontier did recognize it could improve upstream and downstream flow and educated the council and the public on some of the issues,” Elko assistant city manager Scott Wilkinson said.

Javier Mendoza, director of public relations for Frontier’s West region, explained much of the area Frontier services in Nevada is very rural, so customers are “located many miles from the core Frontier network facilities used to provide broadband service, which makes it technologically and economically challenging to provide faster internet speeds. However, Frontier is continually evaluating and working to improve its network and has and will continue to undertake various initiatives at a customer and community level to enhance its internet services.”

Mendoza said Frontier was currently testing fixed wireless internet service to serve rural areas, but had few details about the service or when it might be available.

Frontier also noted internet traffic was up 25% in the Elko area, primarily as a result of video streaming, social media, and cloud services.

But Councilmen Reece Keener complained Frontier was underinvesting in its network, meaning the company is not well-equipped to deal with increases in demand, something Mendoza denied.

“Several areas of the network providing internet service to Elko have been and continue to be upgraded, providing enhanced service reliability, and ultimately will enable new and upgraded services,” Mendoza said.

It can’t come soon enough for students of Great Basin College, where those taking online courses using Frontier DSL have problems uploading their assignments, claimed Rice, who taught online classes at the college.

“We can get the classes out to the students, but the challenge is for students to get assignments back to the college,” Rice said in a phone interview with the Elko Daily Free Press.

Frontier also claimed improved service performance so far in 2018, up from the fourth quarter of 2017. The company claimed 98.3% of service orders met performance goals, up from 94.37% and  commitments met scored at 92 percent, up from 89.98 percent. Trouble tickets declined from 1,712 to 1,244 across Nevada, the company also claimed.

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