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N.Y. Governor Reneges on 100% Broadband Promise, Offers Satellite to 72k New Yorkers Instead

Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

It was called “Broadband for All” — New York Governor Andrew Cuomo’s commitment to bring high-speed internet service to every New York State resident. But it now appears the governor will break that promise and leave more than 72,000 rural New York residents with satellite-delivered internet that does not come close to meeting the broadband speed standard and is infamous for customer frustration, slow speeds, and low data caps.

Ensuring High-Speed Internet Access for Every New Yorker

In today’s world, internet connectivity is no longer a luxury—it is a necessity. Broadband is as vital a resource as running water and electricity to New York’s communities and is absolutely critical to the future of our economy, education, and safety.

In 2015, Governor Cuomo made the largest and most ambitious state broadband investment in the nation, $500 million, to achieve statewide broadband access by 2018. 

The New NY Broadband Program sets as its goal access to speeds of 100 Mbps for all New Yorkers, with 25 Mbps acceptable in the most remote and rural areas. The cost must not exceed $60 and there is a general prohibition of data caps. This goal exceeds requirements of the FCC’s Connect America Fund program and requires that projects be completed on a more accelerated timeline.

Today, the governor announced the state grant winners to split $209.7 million in the third and final round of awards to offer 122,285 additional homes, businesses, and institutions broadband internet service.

“These latest awards through Round III of the New NY Broadband Program will close the final gap and bring high-speed broadband to all New Yorkers in every corner of the state,” the governor’s office claimed.

Except it won’t.

Tucked in among the grant award winners is a $14,889,249 grant to Hughes Network Systems, LLC, targeting 72,163 rural New Yorkers, more than half of the total number of customers to be reached in the third round. Hughes operates the HughesNet satellite internet service, a technology derisively known as “satellite fraudband” for routinely failing to meet its advertised speed claims. It’s also known as “last resort internet” because it is slow, expensive, and heavily data capped.

Complaints about HughesNet are common on websites like Consumer Affairs:

“Extreme false advertising. Over the first 30 days with HughesNet Gen5, I averaged 3 Mbps download when advertised 25 Mbps. I canceled when they couldn’t answer why I used 20 GB of data in less than 24 hours. I am a 55 year old average internet user. No streaming. No music. No videos (YouTube). DO NOT GET THIS SERVICE EVEN IF NO OTHERS ARE AVAILABLE.” — Dennis, Tazewell, Tenn. (1/25/2018)

HughesNet claims high speed internet in our region. Clearly not available here, 3 service calls, with exchange of equipment, 50 calls – recorded leaves us no choice, we demand that this contract be null/void without stealing $399 cancellation. A despicable Company, uninformed customer service, average speeds with a video; upload speed 0.62 Mbps, the download speed is 1.28 Mbps. Help!!!” — Jeffrey, Kerhonkson, NY (1/21/2018)

“Promised speeds of no less than 25 Mbps. Actual speed received was 5-9 Mbps. Unable to stream anything. Computer programs did not operate and did not update as required. We have cancelled HughesNet at great cost to us. Worst internet service ever.” — Jennifer, Hartsville, SC (1/12/2018)

Pat (last name withheld) lives 1.3 miles from the nearest Charter Communications customer in Niagara County, near Niagara Falls and is very disappointed with recent developments. Charter has quoted an installation fee of $50,000 to extend their cable service and Verizon has refused to provide DSL service, leaving Pat resorting to using an AT&T mobile data plan, which is expensive and gets throttled after using more than ~22 GB a month.

“This was a scam from Jump Street,” Pat said. “Phase 3 has 70,000 out of 120,000 homes getting satellite internet, a technology that was already available. It also gives $70 million to Verizon who declined funds in first place. Five years and $675 million later and still no internet for my kids.”

“This is a huge disappointment for us,” Pat added. “We were counting on this happening. Told numerous times it would. Now we have to debate moving, we can’t continue not having internet. My oldest son just graduated high school never having internet at home.”

“I have written and spoke with New York Broadband Program Office and it was clear to me from the beginning they didn’t understand the problems they faced, namely infrastructure costs,” said Pat. “They didn’t want to hear it. They wrongly assumed that telecoms would bid and everyone would have internet. I knew when announcements were delayed that the bids for last mile didn’t come in. Tragic really. I think they made a mistake accepting that money from the FCC. Satellite was never on the table until that happened.”

Stop the Cap! readers have told us satellite internet is the worst possible option for internet access, and many have reported better results relying on their mobile phone’s data plan. But New York’s solution for more than 70,000 of its rural citizens — many that believed the governor’s commitment of 100% coverage — is to saddle them with satellite internet access starting at $49.99 a month for a paltry 10 GB of usage per month. The top plan on offer costs $99.99 a month and is capped at 50 GB a month before a speed throttle kicks in and reduces speeds to dial-up levels. A 24-month contract is required with a very steep early cancellation penalty.

Another surprising winner is Verizon Communications, a company that originally refused to participate in rural broadband expansion efforts. Verizon will accept more than $70 million to expand its broadband service to 15,515 homes, businesses, and institutions in the Capital Region, central New York, the North Country, and Southern Tier. At press time, it is not known if Verizon will bring FiOS or DSL to these customers.

Because New York State relied on private companies to bid to cover unserved residents, it seems clear HughesNet is the default choice for those New Yorkers stranded without a telecom company bidder. Although that will allow Gov. Cuomo to claim his program reaches 99.99% of New Yorkers, the rural broadband problem remains unresolved for those who were depending the most on New York to help bring broadband to rural farms, homes in the smallest communities, and those simply unlucky enough to live in small neighborhoods deemed unprofitable to serve.

Verizon and Samsung Partner Up to Provide 5G Services, Starting in Sacramento

Verizon Communications has selected Samsung Electronics as a major supplier of the wireless company’s forthcoming 5G wireless service, launching first in Sacramento, Calif., in the second half of this year.

Samsung will be a major vendor supplying Verizon and its customers in Sacramento with 5G equipment, including wireless modems and routers. In 11 other cities where Verizon is testing 5G service, Ericsson AB, another 5G network vendor, has supplied much of the equipment. Samsung is currently a small player in the 5G networking business, but hopes to ramp up its business and cross-promote its smartphones and tablets with future 5G users.

Verizon’s wireless customers in Sacramento will be the first to receive invitations to switch their home broadband accounts away from AT&T, Frontier, Wave Broadband and Comcast — the four largest incumbent providers in the greater Sacramento area. Verizon claims its 5G service can support speeds up to 1Gbps. Verizon has been testing 5G service in 11 U.S. cities, but has kept pricing details to itself. The issue of data caps has been repeatedly raised and most industry analysts predict Verizon will usage cap its 5G service at around 200GB a month. Whether the company plans to offer an unlimited use plan is unknown.

Kim Young-ky, president of Samsung’s networks business, told the Wall Street Journal that 5G is a reality and it will be much more than just an upgrade from 4G service.

“The average U.S. consumer uses about five gigabytes of mobile data a month,” said Kim. But after 5G becomes more ubiquitous in the next few years, he believes consumers will eventually use closer to 100GB monthly on new services such as virtual or augmented reality programs—or even from driverless cars, the newspaper added.

Kim expects the first 5G capable smartphones won’t appear until sometime in 2019, leaving 5G primarily as a wireless home broadband replacement during its initial rollout.

The Many Lies of Ajit Pai About Net Neutrality

Pai

I’ve done a LOT of interviews and talk shows on the issue of Net Neutrality over the last two weeks. After listening to the talking point-festooned “experts” and show hosts with a political agenda, your listeners, readers, and I will not be gaslighted by the exceptionally ridiculous condescension campaign now underway by Net Neutrality opponents.

For those who don’t know, “gaslighting” refers to manipulating someone into questioning or second-guessing their beliefs by distorting facts, attempting to delegitimize evidence with falsehoods, confusing the issues, and suggesting one lacks credibility to speak or write on an issue… because they said so.

Fortunately, when these “facts” come from a cable/telco bought-and-paid-for policy institute or lobbyist, it is easy to identify these campaigns and debunk them. It is also entertaining to turn the tables by questioning the source of their talking points and the agendas in play. We always ask these individuals where the money comes from for their “policy institute” and the answers are always not revealing. For the record, Stop the Cap! doesn’t accept corporate donations, period. We accept contributions exclusively from individuals. It takes just a few seconds to explain our funding while the other side takes minutes tap-dancing around the corporate dark money that funds their efforts.

Phillip Dampier: Don’t gaslight me, bro!

Thankfully, there have been a lot of newspaper reporters taking time to understand the issues and have shown professionalism in their reporting. But some radio talk show hosts unfortunately don’t do as well and rely on short-sighted political positioning, “rescue” their cornered allies with convenient commercial breaks, interrupt, or change the subject with baited questions when the facts don’t go their way. Net Neutrality is NOT a conservative or liberal issue, but some attempt to make it one by injecting President Barack Obama’s name into the debate or claim Net Neutrality represents government control of the internet.

Speaking of facts, FCC Chairman Ajit Pai’s latest arguments for his Christmas gift repeal of Net Neutrality for the telecom industry uses similar gaslighting and false talking points that distract from a fact-based debate on these issues.

As millions of consumers express outrage over Pai’s unbending agenda to allow internet service providers to create an unlevel internet playing field and paid prioritization fast lanes that favor some content over others (as long as they disclose it), Pai and his staff are now resorting to calling Americans who favor the current free and open internet “desperate” or ignorant about how the internet works.

But you know more than you think, reminded each month (when the bill arrives) of the special ability of companies like Comcast to abuse the customer relationship with skyrocketing rates, data caps, and unhelpful customer service. Giving companies like this more ways to charge you more for the same service has never worked to your advantage.

Net Neutrality is one of only a few tools available to the FCC to keep ISPs in check. Banning data caps and zero rating schemes would be another great way to protect consumers from Wall Street’s insatiable demand for companies to extract more revenue from consumers. Investors know full well in a monopoly/duopoly marketplace there is every incentive to gouge and very little risk of losing customers doing so.

Our friends at Free Press did considerable research to debunk some of Mr. Pai’s talking points in a long series of tweets we thought would be illuminating:

Jangling Shiny Keys of Distraction: Pai Claims Twitter, Edge Providers are the Real Threat to Open Internet

Pai

FCC Chairman Ajit Pai has gone all out to defend internet service providers and his plan to jettison Net Neutrality, claiming companies like Twitter and other “edge providers” that offer a platform to a diversity of voices are a much bigger threat to an open internet than companies like AT&T and Comcast.

Speaking at the Future of Internet Freedom conference in Washington, Pai faced down the torrent of criticism that has been expressed about his plans to roll back Title II enforcement of ISPs and Net Neutrality rules that protect internet content from discriminatory behavior. In remarks to the audience, Pai used partisan framing to criticize companies like Twitter that he claims have targeted bans on conservative users who violate its terms and conditions and removes tweets for political reasons.

“Now look, I love Twitter, and I use it all the time,” Pai said. “But let’s not kid ourselves; when it comes to an open internet, Twitter is part of the problem. The company has a viewpoint and uses that viewpoint to discriminate. As just one of many examples, two months ago, Twitter blocked Rep. Marsha Blackburn (R-Tenn.) from advertising her Senate campaign launch video because it featured a pro-life message. Before that, during the so-called Day of Action [to preserve Net Neutrality], Twitter warned users that a link to a statement by one company on the topic of internet regulation ‘may be unsafe.’  And to say the least, the company appears to have a double standard when it comes to suspending or de-verifying conservative users’ accounts as opposed to those of liberal users.  This conduct is many things, but it isn’t fighting for an open internet.”

Pai also used additional examples of “edge provider” censorship that he claims targets conservatives far more often than liberals:

  • Apple’s app store bars apps from cigar aficionados as promoting tobacco use
  • YouTube “restricts videos from the likes of conservative commentator Dennis Prager on subjects he considers ‘important to understanding American values.'”
  • Mysterious algorithms target content to specific users but without transparency and disclosure
  • Edge providers champion their own free speech while supporting online censorship at the behest of foreign governments for business reasons.

But Pai’s own statements lacked transparency:

  1. Twitter blocked, then rescinded its block, on one sponsored Tweet from Blackburn that claimed in the ad she ‘stopped the sale of baby body parts.’ Twitter declared the ad was inflammatory and violated Twitter’s advertising standards. Other media fact-checkers were less polite, calling her claim false advertising. “No investigation ever found proof of actual tissue sales. The only criminal charges stemming from the videos were filed against antiabortion activist David Daleiden and another activist in California for violations of privacy. Yet to this day, ‘baby body parts’ remain a rallying cry in conservative and antiabortion circles,” according to a Washington Post story. Twitter’s advertising standards differ from its general code of user conduct.
  2. Apple’s app store does indeed block apps promoting products deemed harmful to users. There is no financial incentive to block these apps, however. The specific language: “Apps that encourage consumption of tobacco products, illegal drugs, or excessive amounts of alcohol are not permitted on the App Store. Apps that encourage minors to consume any of these substances will be rejected. Facilitating the sale of marijuana, tobacco, or controlled substances (except for licensed pharmacies) isn’t allowed.”
  3. Pai suggests YouTube is unfairly restricting Mr. Prager’s videos, but in fact it is only placing advisories on some of his more inflammatory content warning the video may not be suitable for some audiences. YouTube also demonetized certain videos, making them ineligible for pre-roll advertisements, primarily because advertisers do not want to be associated with inflammatory content. But no videos have been censored, blocked, or removed. Anyone can view them by acknowledging the content advisory. Members of the LGBTQ community have also been upset with YouTube for similar actions, so there is scant evidence YouTube’s motives are political and target conservatives.
  4. Pai’s ‘mysterious algorithms’ have existed across the internet for years, including Verizon’s “super cookie” and AT&T that extracted more money from customers to switch off its monitoring and tracking software following customers’ internet usage. Pai was highly instrumental in blocking internet privacy regulations that would have forced the kind of disclosure of practices he suddenly objects to now.
  5. Pai’s claims about American companies caving in to foreign governments’ censorship policies seem to echo his similar 2015 claim that Net Neutrality also helps authoritarian regimes, as long as one interprets Net Neutrality as a “government takeover” of the internet. “If in the United States we adopt regulations that assert more government control over how the internet operates… it becomes a lot more difficult for us to go on the international stage and tell governments: ‘Look, we want you to keep your hands off the internet. Even if the ideas aren’t completely identical, you can appreciate the optical difficult[y] in trying to make that case,” Pai said. But that argument distorts like a fun house mirror. Pai’s declaration that Net Neutrality is a bad thing is based on his premise it would hand the keys to information control to the government to act as gatekeeper. He prefers trusting private companies to be more reliable and safer gatekeepers than the FCC or the Trump Administration. But that argument puts Pai at war with himself, considering his attacks on edge providers — private companies — for bias and censorship. Incidentally and ironically, he raised many of his 2015 objections on RT — the external television service of Russian State Television.

Pai reserved much of his remarks to attack Hollywood celebrities that occasionally inelegantly promote Net Neutrality with inexact language Pai loves to exploit. Among his targets were Mark Ruffalo, who played Hulk, Cher, and George “Sulu” Takei.

Takei

Pai called out Mr. Takei for his suggestion eliminating Net Neutrality would allow internet companies to further monetize the internet by selling additional packages of services to access certain internet content.

“The complaint by Mr. Takei and others doesn’t hold water. They’re arguing that if the plan is adopted, Internet Service Providers would suddenly start doing something that Net Neutrality rules already allow them to do. But the reason that Internet service providers aren’t offering such packages now, and likely won’t offer such packages in the future, is that American consumers by and large don’t want them.”

But of course that didn’t prevent ISPs like Comcast and AT&T to impose data caps on their customers with scant evidence of their necessity and with purely arbitrary allowances. From this regime of data caps, Wall Street analysts push providers to further monetize internet usage to raise revenue to return to shareholders. What customers want has not had much impact on Comcast’s business decisions, as the record on data caps illustrates. The threat of regulation like Net Neutrality enforcement has cooled enthusiasm for these pricing schemes, however, until recently. In April, after Mr. Pai introduced his Net Neutrality repeal plan, Comcast quietly repealed its self-ban on paid prioritization — internet fast lanes.

In a barely competitive marketplace, what customers want may not count for much if they have few, if any alternatives.

Chip Pickering, CEO of INCOMPAS, which includes as member major Silicon Valley edge providers, called Pai’s speech a diversion from the real issues.

“Chairman Pai’s attack on Twitter is like a boxer losing a fight and taking wild and erratic swings,” Pickering said. “Preventing hate speech and bullying behavior online is not the same thing as allowing cable companies to block, throttle and extort money from consumers and the websites they love. Twitter is an amazing platform for left, right and center. Donald Trump might not be President without it, and Chairman Pai’s plan to kill Net Neutrality will put Comcast and AT&T in charge of his Twitter account.”

Defenders of FCC’s Ajit Pai Miss the Point on Cutting Broadband Speed Standards

Defenders of FCC Chairman Ajit Pai are rushing to defend the Republican majority’s likely support for an initiative to roll back the FCC’s 25/3Mbps speed standard embraced by his predecessor, Thomas Wheeler.

Johnny Kampis, writing for Watchdog.org, claims that broadband speed standard has had an adverse affect on solving America’s rural broadband gap.

After raising that standard, suddenly those areas with speeds below 10 mbps were lumped into the same group with those who could access speeds of 10-25 mbps, resulting in diminished focus on those areas where the broadband gap cut the deepest.

Raising the standard meant, too, that fans of big government could point to the suddenly higher percentage of the population that was “underserved” on internet speeds and call for more taxpayer money to solve that “problem.”

Kampis is relying on the talking points from the broadband industry, which also happens to support the same ideological interests of Watchdog.org’s benefactor, the corporate/foundation-funded Franklin Center for Government & Public Integrity. The argument suggests that if you raise broadband standards, that opens the door to more communities to claim they too are presently underserved, which then would qualify them for government-funded broadband improvements.

Kampis’ piece, like many of those published on Watchdog.org, distorts reality with suggestions that communities with 50Mbps broadband service will now be ripe for government handouts. He depends on an unnamed source from an article written on Townhall.com and also quotes the CEO of Freedom Foundation of Minnesota, which is closely associated with the same Franklin Center that hosts Watchdog.org. Kampis’ piece relies on sourcing that is directly tied to the organization hosting his article.

In reality, rural broadband funding has several mechanisms in place which heavily favor unserved, rural areas, not communities that already have 50Mbps internet access. ISPs also routinely object to projects proposed within their existing service areas, declaring them already served, and much of the funding doled out by the Connect America Fund (CAF) Kampis suggests is a government handout are being given to telephone companies, not municipalities.

Kampis

Kampis is satisfied free market capitalism will eventually solve the rural broadband problem, despite two decades of lackluster or non-existent service in areas deemed unprofitable to serve.

“So while Pai’s critics denigrate him because his FCC is considering lowering that broadband standard, he’s just correcting an earlier mistake, with the realization that the free market, not big government, will solve the rural broadband gap if given enough time,” Kampis writes. “And returning to the old standards will help ensure that the focus will be placed squarely on the areas that need the most help.”

Kampis suggests that free market solution might be 5G wireless broadband, which can potentially serve rural populations less expensively than traditional wired broadband service. Communities only need wait another 5-10 years for that to materialize, if it does at all.

Kampis claims to be an investigative reporter, but he didn’t venture too far beyond regurgitating press releases and talking points from big phone companies and opponents of municipal broadband. If he had spent time reviewing correspondence sent to the FCC in response to the question of easing broadband speed standards, he would have discovered the biggest advocates for that are large phone companies and wireless carriers that stand to benefit the most from the change.

Following the money usually delivers a clearer, more fact-based explanation for what motivates players in the broadband industry. In this case, the 25Mbps speed standard has regularly been attacked by phone and wireless companies hoping to tap into government funds to build out their networks. Traditional phone companies are upset that the 25Mbps requirement means their typical rural broadband solution – DSL, usually won’t cut it. Wireless companies have also had a hard time assuring the FCC of consistent 25Mbps speeds, making it difficult for them to qualify for grants. AT&T wasn’t happy with a 10Mbps standard for wireless service either.

Incidentally, these are the same companies that have failed to solve the rural broadband gap all along. Most will continue not serving rural areas unless the government covers part of their costs. AT&T illustrates that with its own fixed wireless rural broadband solution, which came about grudgingly with the availability of CAF funding.

The dark money ATM network hides corporate contributions funneled into advocacy groups.

The free market broadband solution is rooted in meeting Return On Investment metrics. In short, if a home costs more to serve that a company can recoup in a short amount of time, that home will not be served unless either the homeowner or someone else covers the costs of providing the service. By wiping out the Obama Administration’s FCC speed standard, more ratepayer dollars will be directed to phone and wireless companies that will build less expensive and less-capable DSL and wireless networks instead of investing in more modern technology like fiber optics.

Mr. Kampis, and others, through their advocacy, claim their motive is a reduction in government waste. But in reality, and not by coincidence, their brand of journalism hoodwinks readers into advocating against their best interests of getting fast, future-proofed broadband, and instead hand more money to companies like AT&T. The Franklin Center refuses to reveal its donor list, of course, but SourceWatch reported the Center is heavily dependent on funding from DonorsTrust, which cloaks the identity of its corporate donors. Mother Jones went further and called it “a dark money ATM.”

Companies like AT&T didn’t end up this lucky by accident. It donates to dark money groups that fund various sock puppet and astroturf operations that avoid revealing where the money comes from, while the groups get to claim they are advocating for taxpayers. By no coincidence, these groups frequently don’t attack corporate welfare, especially if the recipient is also a donor.

New York’s rural broadband initiative is on track to deliver near 100% broadband coverage to all New York homes and has speed requirements and a ban on hard data caps.

Raising speed standards does not harm rural broadband expansion. In New York, Gov. Andrew Cuomo’s broadband expansion campaign is on track to reach the remaining 150,000 homes still without broadband access by sometime next year. His program relies on broadband expansion funding that comes with requirements that insist providers offer internet access capable of at least 25Mbps (with a preference for 100Mbps) for $60 or less and a ban on hard usage caps. Kampis claims the 25Mbps speed standard hampers progress, yet New York is the first state in the nation moving towards 100% broadband availability for its residents at that speed or better.

Chairman Pai’s solution is little more than a gift to the country’s largest phone and wireless companies that would like to capture more CAF money for themselves while delivering the least amount of service possible (and keep money out of the hands of municipalities that want to build their own more capable networks). The evidence is quite clear — relying on the same companies that have allowed the rural broadband crisis to continue for more than 20 years is a stupendously bad idea that only sounds brilliant after some corporation writes a large check.

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