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Frontier’s March to Oblivion: Bankruptcy In Its Future?

Frontier Communications is quickly becoming the Sears and Kmart of phone companies, on a slow march to bankruptcy or outright oblivion.

What started as a small independent phone company in Connecticut has grown through acquiring overpriced or decrepit landline cast-offs, mostly from Verizon, leaving itself with massive amounts of debt and infrastructure it is not willing to upgrade.

Despite rosy prognostications given to customers and shareholders, few are willing to take Frontier’s word that life is good with a company that still relies heavily on copper wire phone and DSL service.

Don’t take out word for it. Just watch the line of customers heading for the exits, canceling service and never looking back. As Frontier continues to lose customers fed up with its bad DSL service, rated even poorer than satellite-delivered broadband by Consumer Reports, its only chance to grow is to acquire more customers through more acquisitions. Unfortunately, after another disastrous transition for former Verizon customers in Florida, California, and Texas, Frontier’s bad reputation is likely to leave regulators and shareholders concerned about Frontier’s ability to manage yet more acquisitions in the future.

The Wall Street Journal reports Frontier bet on making it big with rural and suburban landlines, and lost.

Frontier’s mess has infuriated shareholders who invest in the stock mostly for its dividend payouts. The Norwalk, Conn. company recently announced it slashed its dividend, causing investors to flee the stock. Shares are down 69% so far this year. In a desperate bid to keep its Nasdaq listing, the company announced an unprecedented 1-for-15 reverse stock split just to prop up its share price.

Frontier’s slow hemorrhage of landline customers turned into a flash flood in the spring of 2016 after botching yet another “flash cutover” of customers acquired from Verizon. Verizon’s decision to sell off its landline networks in Florida, California, and Texas (mostly acquired from GTE by Verizon predecessor Bell Atlantic) was good news for Verizon, bad news for Frontier’s newest customers. Frontier hates to spend money to overhaul its copper-based facilities with fiber. It prefers to buy service areas from companies that undertook fiber upgrades on their own dime. Verizon had already upgraded large sections of those three states with its FiOS fiber to the home network. Frontier’s interest was primarily about acquiring that fiber, Frontier finance chief Perley McBride told the Wall Street Journal. Even McBride admitted Frontier failed to do a good job integrating those customers.

Consumer Reports rates Frontier DSL lower than one satellite broadband provider.

That should not be news to McBride or anyone else. Frontier has repeatedly failed every flash cutover it has attempted. The worst recent examples were Frontier’s botched 2010 transition in West Virginia, where the company inherited copper landlines neglected by Verizon for decades. Customers were infuriated by Frontier’s inability to maintain service and billing, and the company was investigated by state officials after many customers lost service, sometimes for weeks. In Connecticut, Frontier messed up a transition of its acquisition of AT&T’s U-verse system, having learned nothing from its mistakes in West Virginia or elsewhere. The company was forced to pay substantial service credits to residential and business customers that were offline for days. Thus it was no surprise yet another hurried transition would lead to disaster last spring. Regulators received thousands of complaints and a significant percentage of longtime Verizon customers left for good.

Frontier CEO Dan McCarthy appears to be even less credible with investors and customers than his predecessor Maggie Wilderotter, who may have retired with an understanding the long term future of Frontier looks pretty bleak. McCarthy has repeatedly put an optimistic face on Frontier’s increasingly poor performance.

John Jureller, Frontier’s last chief financial officer, routinely joined McCarthy in putting a brave face on Frontier’s stark numbers. He repeatedly tried to fuel optimism by telling investors the Verizon landline acquisition would make revenue trends “very positive.”

Jureller is no longer with Frontier. His replacement is the aforementioned McBride, who has a reputation as a “turnaround” expert, usually at the expense of employees. McBride has already helped oversee the permanent departure of at least 1,000 employees, laid off as part of what Frontier is calling “a customer-focused reorganization.” McCarthy prefers to tell Wall Street the layoffs are about reining in costs, despite the company’s profligate spending on acquisitions.

McBride told the Journal he doesn’t expect much revenue growth at Frontier anytime soon in California, Texas, and Florida. McCarthy’s grand turnaround plan isn’t working either. In fact, customer ratings of Frontier are falling about as fast as a rock thrown off a cliff.

There is little evidence Frontier will improve its dismal American Customer Satisfaction Index score in 2017. It finished dead last among internet service providers last year, falling 8% despite taking on new customers and allegedly upgrading others. Frontier’s overall grade was second to last across all categories in the telecom sector. Frontier managed to achieve bottom of the barrel scores despite broad upticks in customer satisfaction among other similar providers last year. Verizon FiOS achieved a 7% improvement to a best-ever customer satisfaction rating. In areas acquired by Frontier, as soon as the service was renamed Frontier FiOS, ratings plunged.

So has Frontier’s revenue, which continues a downward spiral. The company posted a loss of $373 million last year compared to $196 million in losses a year earlier. It has committed to spending $1 billion on its network this year, but customers uniformly report few substantial service improvements, and many wonder where the money is going.

Frontier is also upset that Verizon, in its zeal to make its landline properties in California, Texas, and Florida look as good as possible, stopped collection activity on overdue accounts just before the sale, saddling Frontier with thousands of deadbeat customers Verizon should have written off as uncollectable long ago, but never did.

Yesterday, the western New York office of the Better Business Bureau reported Frontier had achieved an “F” rating, amassed nearly 9,000 complaints, and out of 718 customer reviews, just six were positive:

We find a high volume and pattern of complaints exists concerning prior Verizon consumers who have not had a smooth transition to Frontier Communication since Frontier Communications took over various Verizon customers on April 1, 2016. Consumers have reported that services did not transition properly: many do not have services or are having spotty service with outages; many internet issues, from slow speeds to complete outages, consumers advise they are paying for certain levels of internet speeds but are not receiving those levels. Cable issues including missing networks, movie on demand concerns, issues with purchased subscriptions not carrying over, titles consumers have paid for (purchased licensed for) not being uploaded to their libraries and no solutions are being offered; and inability to access items like DVR boxes at the same time (multiple boxes in households not functioning); the Frontier App is not functioning for consumers; not fulfilling the rewards advertised with new service signups; charging consumers unauthorized third party charges on their telephone bill and not properly applying credits to consumer’s bills or consumers not being able to login to pay their bills.

When consumers call to receive assistance many report to BBB that they are hung up on or calls are disconnected and [are not followed up] by Frontier representatives. Consumers are transferred from representative to representative without receiving any assistance to their concerns many times resulting in a disconnection.

We have also identified a pattern in [Frontier’s] responses to complaints stating:

  • Per Tariff, in no event shall Frontier be liable in tort, contract, or otherwise for errors, omissions, interruptions, or delays to any person for personal injury, property damage, death, or economic losses. Frontier shall in no event exceed an amount equivalent to the proportionate charge to the customer for the period of service during which such mistake, omission, interruption, delay, error or defect occurs. Frontier will apply a credit based on the customer’s daily service rate.
  • We trust that this information will assist you in closing this complaint.  We regret any inconvenience that ‘consumer name’ may have experienced as a result of the above matter.

The business did not respond to the pattern of complaint correspondence BBB sent.

“Cable companies are beating the pants off Frontier,” Jonathan Chaplin, an analyst for New Street Research, told the newspaper. Heavy targeted marketing of Frontier’s customers, especially those served by Charter Communications in states like New York, Texas, Florida, and California are only accelerating Frontier’s customer cancellations.

Frontier’s cost consciousness and deferred upgrades as a result of its financial condition are only allowing cable companies to steal away more customers than ever, as the value for money gap continues to widen. While Frontier has failed to significantly upgrade many of their DSL customers still stuck with less than 10Mbps service, Charter Communications is gradually boosting their entry-level broadband speed to 100Mbps across its footprint and selling it at an introductory price of $44.99 a month.

Even Verizon sees the writing on the wall for the revenue prospects of landline service, especially in areas where it has not undertaken FiOS upgrades. Verizon DSL is still very common across its northeastern footprint, particularly in states like New York, Pennsylvania, Virginia, and Maryland. Upstate New York is almost entirely DSL territory for Verizon, except for a few suburbs in Buffalo, Syracuse, and the state’s Capitol region. Verizon soured on upgrading its copper facilities in these areas years ago, and has contemplated selling them or moving customers to wireless service instead.

Verizon spokesman Bob Varettoni admitted Verizon’s strategy was to “sharpen our strategic focus on wireless,” which makes Verizon considerably more money than its wireline networks.

“If Verizon’s selling assets, they’re selling them for a reason,” Chaplin said. “Verizon had taken those markets [in California, Florida, and Texas] pretty close to saturation before they sold. That’s the point at which they punted the assets to Frontier.”

Frontier cannot continue to do business this way and expect to survive. Investors have circled 2020 on their calendar — the year $2.4 billion in debt payments are due. Another $2.5 billion is due in 2021 and $2.6 billion in 2022, not including interest charges and other obligations. Refinancing is expected to get tougher at struggling companies and interest rates are rising. The pattern is a familiar one in the telecom industry, where acquirers like FairPoint Communications and Hawaiian Telcom spent heavily on acquiring landline cast-offs from Verizon. Customer departures, a financial inability to upgrade facilities quickly enough, and heavy debts forced both companies into bankruptcy, precisely where Frontier Communications will end up if it does not change its management and business practices.

Still No Fiber for Southern N.J.: State Settles with Verizon Over Poor Service

South Jersey: The worst broadband problems are in the southernmost counties closest to Delaware.

Customers hoping New Jersey’s telecom regulator would compel Verizon to expand fiber to the home service across southern New Jersey are out of luck.

The New Jersey Board of Public Utilities (BPU) approved a settlement between Verizon New Jersey, Inc., Cumberland County, and 18 southern New Jersey towns that alleged Verizon failed to properly maintain its wireline network in areas where it has chosen not to deploy FiOS — its fiber to the home service. But the settlement will only compel Verizon to maintain its existing copper network and offer token DSL and FiOS expansion in some unserved rural communities.

“We have heard our customers’ concerns in South Jersey and are pleased to have reached an agreement with the approval of all 17 towns on a maintenance plan going forward,” said Ray McConville, a Verizon spokesman. “We look forward to staying in regular communication with the towns to ensure our customers continue to receive the level of service they expect and deserve.”

“While the Board was fully prepared to proceed on this matter, the parties were able to reach a negotiated settlement which takes into consideration the needs of each community,” said Richard S. Mroz, president, N.J. Board of Public Utilities.

But some residents of those communities beg to differ.

“It’s another example of Chris Christie’s hand-picked regulators letting Verizon off the hook and sticking us in a digital divide,” complained Jeff Franklin, a Verizon DSL customer in Cumberland County. “Verizon should not be allowed to offer one half of the state modern broadband while sticking the rest of us with its slow DSL service.”

Franklin is upset that communities bypassed by Verizon’s FiOS network appear to have little chance of getting it in the future, now that regulators have agreed to allow Verizon to fix its own copper network.

“All the Board did was force Verizon to do what it should have been doing all along, taking care of its own network,” Franklin complained to Stop the Cap! 

Verizon did agree to expand its fiber network into the communities of Estell Manor, Weymouth Township, Corbin City, and Lower Alloways Creek Township, but only because of a 2014 agreement with Verizon compelling them to offer broadband to residents who read and complete a “Bona Fide Retail Request” (BFRR) form which stipulates homes and businesses in Verizon’s New Jersey territory can get broadband if they don’t have it now as long as these criteria are met:

  • Have no access to broadband service from a cable provider or Verizon;
  • Have no access to 4G-based wireless service; and
  • Sign a contract for at least one (1) year of broadband service and pay a $100 deposit.

“BFRR is a joke because it requires potential customers have no access to 4G wireless service,” claimed Franklin. “You have to go to the government’s National Broadband Map to determine eligibility, which is very tough because — surprise, surprise — Verizon itself contributed its 4G wireless coverage information for that map and as far as Verizon is concerned, their 4G coverage in New Jersey is beautiful, even though it really isn’t.”

If a single provider submits map data that shows a home address is already covered by 4G wireless service, even if that isn’t accurate on the ground, that customer is ineligible under the terms of BFRR. Even if they were able to subscribe to 4G broadband, most plans are strictly data capped or throttled.

Under the settlement, Verizon gets to choose what technology to deploy. Outside of the four communities getting FiOS, the rest of South Jersey will have to continue relying on Verizon’s DSL service. Verizon has agreed to extend DSL to 2,000 new residences and businesses in Upper Pittsgrove, Downe, Commercial, Mannington, Pilesgrove, and South Harrison. It will also fix some of its DSL speed congestion problems and monitor for future ones as part of the settlement.

But DSL won’t work if Verizon’s wireline network stays in poor shape. The company has agreed to deploy its “Proactive Preventative Maintenance Tool” (PPMT) to scan its copper network to identify and repair or replace defective cables. Verizon has also agreed to daily inspections of outside facilities and fix any detected problems within 30 days, as well as regularly reporting back on the condition of its infrastructure inside the towns affected under the settlement.

This agreement took a year and a half to reach and will keep the two parties out of court, but many are not satisfied being left with Verizon’s DSL service.

“Unfortunately, the BPU continues to allow Verizon to pick and choose which residents will receive modern telecommunications at an affordable cost,” Greg Facemyer, a Hopewell Township committeeman in Cumberland County, told NewsWorks. “The state legislature needs to recognize these inequities and step in and level the playing field for South Jersey. Otherwise, our region will continue to fall even farther behind and be less competitive.”

FCC Considering Making It Easier for Telcos to Kill Landline/DSL Service

The FCC has circulated a draft rulemaking that proposes to make it easier for phone companies to end landline and DSL service in areas they are no longer interested in maintaining existing infrastructure.

“We propose eliminating some or all of the changes to the copper retirement process adopted by the Commission in the 2015 Technology Transitions Order,” according to the draft, which would allow phone companies to end service “where alternative voice services are available to consumers in the affected service area.”

The proposed new policy would depart significantly from the one put in place during the Obama Administration because it would end assurances that competing providers would have reasonable and affordable access to wholesale broadband and voice services after phone companies mothball their copper wire networks in favor of wireless or fiber alternatives. If the FCC proposal passes, incumbent phone companies like Verizon and AT&T could end rural landline and DSL service and not make provisions for competitors to have access to the technology alternatives the phone companies would offer affected customers.

Verizon immediately praised the FCC proposal, saying it was “encouraged the FCC has set as a priority creating a regulatory environment that encourages investment in next-generation networks and clears away outdated and unnecessary regulations,” wrote Will Johnson, senior vice-president of federal regulatory and legal affairs at Verizon. “This action is forward-looking, productive and will lead to tangible consumer benefits.”

Previous attempts by Verizon to discontinue landline and DSL service did not lead to “tangible consumer benefits” as Verizon might have hoped. Instead, it led to a consumer backlash, particularly in areas affected by Superstorm Sandy in 2012. Verizon elected not to rebuild its copper wire infrastructure in affected coastal communities in New York and New Jersey. Instead, it introduced a wireless landline replacement called Voice Link that proved unpopular and caused a revolt among residents on Fire Island. The wireless replacement did not support data, health monitoring, credit card transaction processing, faxing, and was criticized for being unreliable. Verizon eventually relented and opted to expand its FiOS fiber to the home network on the island instead.

Verizon also attempted to market Voice Link to New York residents in certain urban and rural service areas affected by extended service outages in lieu of repairing its existing infrastructure. Under the proposed changes, the FCC would ease the rules governing the transition away from copper-based services, which include traditional landline service and DSL, in favor of wireless technology replacements and fiber optics.

Because telephone companies like AT&T and Verizon have made mothballing rural wireline infrastructure a priority, the FCC strengthened its rules in 2015 by doubling the notification window from 90 to 180 days, giving more time for affected customers to make other service arrangements or complain to regulators that there were no suitable alternatives. The FCC wants to roll back that provision to its earlier 90-day notification window in response to telephone company complaints that maintaining copper wire infrastructure is expensive and diverted investment away from next-generation networks.

AT&T has been lobbying for several years to win permission from state legislatures to abandon copper wireline infrastructure, mostly in rural areas, where the company has chosen not to upgrade to fiber optic networks. AT&T claims only about 10% of their original landline customer base still have that service.

Both Verizon and AT&T have shown an interest in moving rural consumers to more proprietary wireless networks, preferably their own, where consumers would get voice and data services. But consumer advocates complain customers could lose access to competitive alternatives, may not have a guarantee of reliable service because of variable wireless coverage, could pay substantially more for wireless alternatives, and may be forced to use technology that either does not support or works less reliably with home security systems, medical monitoring, faxing, and data-related transactions like credit card processing.

Other consumer groups like AARP and Public Knowledge have complained that shortening the window for a transition away from basic landline and DSL service to alternative technology could disproportionately affect the customers most likely to still depend on traditional wireline service — the elderly, poor, and those in rural areas.

“50 Shades of Grey” Community Broadband Ban Bill Ties the Hands of Missouri Communities

Emery

It’s 2017 and a lot of Missouri residents are still tortured by the lack of access to basic broadband service, and if a community broadband ban bill becomes state law it will remain that way for years to come.

SB 186 is essentially a copy of last year’s community broadband ban that eventually died in the legislature. Just like last year, many of the sponsors and promoters of the latest attempt to impose a municipal broadband ban have close ties to the American Legislative Exchange Council (ALEC) and receive copious amounts of money from Missouri’s largest telecom companies. Some even win awards from the state’s biggest telecom lobbyists.

State Sen. Ed Emery (R-Lamar) loves the headlines he attracts from throwing ideological bombs into the public debate (he called homosexuality a mental illness, compared public education to slavery and a pathway to prison, and questioned whether former president Barack Obama was actually an American citizen). But he is not in touch with the rural residents in his state who have had their pleas for broadband service ignored by AT&T and other telecom companies for years.

Emery is a big fan of ALEC and serves as a Missouri state chairman. In 2015 he told an audience at an ALEC event he found the group’s efforts inspiring and helpful. ALEC acts as a giant clearinghouse for corporate-inspired legislation that ends up in the hands of friendly state legislators. ALEC’s model bills, including one banning municipal broadband, win passage in part because state legislatures do not get the kind of media attention and public scrutiny seen in Washington. SB 186, its predecessor, and other similar bills introduced in other states are frequently ghostwritten by telecom company lawyers and lobbyists and are designed to stop municipal broadband networks before they can get started.

Emery’s current bill is designed to apply a “scorched earth” response to communities trying to find ways to get rural broadband service up and running after a decade of being ignored by private telecom companies. It’s corporate protectionism and welfare at its finest, with a thicket of language that would force public providers into price and speed regulation. Emery’s bill would interfere with the types of loan agreements communities could contemplate to provide the service, and the language required for a mandatory referendum is heavily slanted to suggest such service is redundant and unnecessary. Emery’s bill also offers assurances his business friends could get gigabit speeds from community-owned providers, but not necessarily consumers.

Like the failed broadband hit bill introduced in Virginia, SB 186 is an ironic piece of legislation, heavy-handed with regulation and micromanagement and anchored with bureaucratic requirements designed to guarantee disappointment and costly failure. Emery’s career in public life has been spent railing against costly and unnecessary overregulation, yet his bill exemplifies both in action.

SB 186 also protects the status quo for broadband in Missouri, which is dreadful outside of major cities. It would assure incumbent telecom companies won’t face any service-improving competition and keep municipalities off their turf. For example, Columbia Water and Light has a “dark fiber” institutional fiber network at its disposal that is woefully underutilized. In addition to helping provide some connectivity for local government functions, the city-owned network also leases connections to hospitals and other public buildings, as well as some businesses. But the utility does not sell internet service itself.

The city believes much of the fiber network’s capacity is sitting un-utilized and could prove a valuable asset to the local connectivity economy. With the fiber already in place, expanding the network could be a cost-effective/common sense way to reach city residents that want better internet service than what incumbents are offering, and the city is more than willing to open the network up to those incumbents as well. SB 186 could eliminate that option in Missouri, just to protect the same private companies that have delivered underwhelming service for years.

In cities like Centralia, now exploring enhanced smart grid technology to improve the area’s electricity infrastructure, SB 186 would make the upgrade much more costly. Smart grid technology relies on fiber optic technology, often laid deep into neighborhoods and office parks. Only a tiny portion of that capacity is used to monitor utility infrastructure. The rest of the bandwidth on the fiber optic cable — already in place, could easily offer gigabit broadband service to every resident and business, especially if the city wires fiber to or near individual utility meters. That wouldn’t be allowed under SB 186 either, so communities like Centralia could not recoup some of the cost of the fiber optic technology by selling broadband service. That’s great news for companies like AT&T, CenturyLink, and Charter Communications. It’s also a relief for the phone companies who need not invest in their networks to offer something better than 20th century DSL.

Rural America: not a broadband-a-plenty

Emery offers two contradictory defenses for his bill:

  1. It is necessary to protect taxpayers from municipal broadband which Emery calls “unsuccessful, leaving ratepayers to cover debt costs.” But when asked by local media for any examples of a Missouri public broadband project that has failed, he could not.
  2. “We need more private-sector opportunities and not drive them out or hinder offerings coming into a community.”

In other words, Emery believes all public broadband networks are failures -and- they represent a major threat to private telecom companies that will be discouraged from investing in broadband expansion because a publicly owned competitor could be ready to “drive them out.”

Of course, neither is true. In rural Missouri there is no line of eager telecom companies seeking to expand broadband service into unprofitable rural communities and where only one broadband provider exists, there is no pressure to improve service quality or speed. In the first instance, there is no investment by private companies to discourage and in the second, the presence of a new provider encourages upgrades and investment. It’s a concept called “competition.” Sen. Emery would have a difficult time providing the name(s) of telecom companies that exited a community because of the presence of a municipal broadband alternative.

Rural farms are among the least likely places to get adequate internet service.

Sen. Emery’s family has a feed and grain business background, and those businesses (as well as Missouri’s farmers) are among the hardest hit economically by the lack of suitable broadband. But Emery is now far away from the business his father and grandfather ran. These days, he harvests big dollar contributions from some of the country’s largest corporations and much of his last campaign was financed by just two families — one with a vendetta against unions and the other — Rex Sinquefield — bucking to be Missouri’s own version of the Koch Brothers, who has his own private agenda he’d like enacted into law. Sinquefield has close ties to the Grow Missouri PAC, that also has close ties to the Club for Growth, ALEC, and the Koch Brothers’ backed Americans for Prosperity. Birds of a feather flock together.

Missouri’s biggest telecom companies are also generous contributors to Sen. Emery, which isn’t a surprise considering his bill and voting record directly benefits their businesses in the state. That may explain why the Missouri Cable Telecommunications Association — the state’s top cable lobbying group — gave Emery its Legislator of the Year award. Not to be outdone, the phone companies’ Missouri Telecommunications Industry Association gave Emery its own Leadership Award. Anyone who can introduce a bill that eliminates the best prospect of competition in suburban and rural Missouri for years is probably worthy of both.

In return for favors like that, some familiar names appear at the top of Emery’s list of campaign contributors:

  • AT&T ($6,000)
  • Comcast ($4,000)
  • Verizon Communications ($4,000)
  • CenturyLink ($3,500)
  • Charter ($2,000)
  • Time Warner Cable ($1,500)
  • Charter Communications ($1,325)
  • Sprint ($1,000)

Emery clearly listens to their interests more than average Missouri consumers still searching for broadband service.

The St. Louis Post-Dispatch reported last summer that there are significant gaps in broadband coverage even in St. Louis County, where one million residents live. “Fringe suburban spots” too costly to meet Return On Investment requirements guarantee no service, indefinitely. In St. Clair County, 5,000 homes are without broadband for the same reason. In large parts of the state, what constitutes broadband no longer meets that definition — 25Mbps, as established by the FCC. Every telephone ratepayer pays a “universal service fee” on their phone bill, in part to extend broadband into rural areas. But that extension has been spotty because not every phone company accepts the money and the conditions that come with it to broaden their reach. That leaves many rural Missourians with <1Mbps DSL service. That’s the case in Wildwood, where streaming media is out of the question because internet speeds are too low.

The Broadband Berlin Wall: Wildwood, Mo. — Broadband service is easily available to the east of Highway 109. But to the west, service is spotty to non-existent.

Wildwood — in western St. Louis County, is living in “Third World conditions,” even though “we’re not in rural Timbuktu,” according to resident Marilyn Gilbert. It’s also comparable to Cold War-era Berlin, except in reverse. Eastern Wildwood offers residents broadband options from both Charter and AT&T. But the Broadband Berlin Wall dividing the community — Highway 109, separates the broadband haves’ from the have-nots’. The larger part of Wildwood to the west, now growing with new housing and businesses, is a broadband swamp with few, if any choices for local residents.

Gilbert “enjoys” AT&T DSL and speeds that never come close to 1Mbps. It is her only option.

“I tried to download my Windows update and it timed out,” she said. “The amount of time you waste waiting for things to open up or download!”

Remember, this is in St. Louis County, the old home for the headquarters of Charter Communications, which dominates the city of St. Louis.

Despite earning billions every year from the broadband business, Charter has refused to extend its lines of service into the western half of Wildwood, despite efforts to attract the company that date back six years. Residents report broadband availability is among their top concerns taken to local officials, who have in turn sought help from Charter, AT&T, and the state legislature.

The city of Wildwood’s efforts were met with a demand by Charter to pay the cable company $3 million in taxpayer funds to extend service. The city said no.

“The comment we hear constantly is that kids need high-speed (internet) in order to access their school work,” said Wildwood councilman Larry McGowen. “These days, internet is just like another utility. It has become every bit as important in people’s lives as electricity.”

But it apparently is not important enough to allow Wildwood and other communities the option of constructing their own local broadband solutions for residents if Emery’s bill becomes law.

Ironically, the same companies that refuse to extend their service into rural Missouri are also vehemently opposed to letting local governments do it in their absence.

The stalemate has caused some residents to sell their homes and move, just to get internet access. David Norell left town because he couldn’t survive with satellite internet service, which costs $80 a month and offers spotty service with a low data allowance.

That makes Emery’s bill, and others like it, a travesty. Banning local communities from doing the job large for-profit companies won’t seems nothing short of corporate protectionism. After all, as critics of Emery’s bill charge, how can a local government unfairly compete with a company that doesn’t compete at all? Also of concern is the fact those residents that do get token DSL service from AT&T may be trapped using it forever if Emery’s bill keeps better and faster service from co-ops and other public broadband options off the table.

If it seems like Sen. Emery is putting the interests of big telecom companies – many dues-paying members of ALEC – above those of his constituents, perhaps he is. Consider the fact Emery is a state chairman at ALEC, an organization that included this loyalty pledge in its draft state chair agreement:

I will act with care and loyalty and put the interests of the organization (ALEC) first.

Emery has taken heat for his ongoing love affair with ALEC before, including an ethics complaint about a $3,000 meal at the Dallas Chop House where Emery ate. ALEC’s corporate members picked up the tab. That kind of unethical conflict of interest, along with the aforementioned loyalty pledge, infuriated the St. Louis Post-Dispatch:

Mr. Emery and his ilk can believe what they want, but they should play no part in allowing corporations to hide their agendas, and their lobbying expenses, by pretending to be something they are not. The proof is in ALEC’s actions, which as Washington Post columnist Dana Milbank outlined, hid itself behind closed doors in a meeting last week in the nation’s capital, pushing reporters away while claiming they had nothing to hide.

No, ALEC exists solely to hide. To hide money. To hide agendas. To hide its hijacking of democracy.

Lawmakers who care about the constitution and their commitment to voters should be fleeing faster than the corporations who realize ALEC is simply a bad investment.

Emery at a 2015 ALEC event.

It was not an isolated incident. Ed and his wife Rebecca Emery also enjoyed a $141.10 meal paid for by the Missouri Telecommunications Association. It’s safe to assume nobody had just a small salad. Other meals and drinks were courtesy of AT&T and CenturyLink. (Peabody Energy footed the bill for the Emerys’ taxi rides back and forth.)

When the wining and dining ended, the lobbyists were back with campaign contribution checks in hand.

These kinds of municipal broadband bans are toxic to economic development for rural communities that already face built-in economic and infrastructure disadvantages. The 21st century digital knowledge economy has the potential to make rural America equally competitive, assuming there is adequate infrastructure in place to participate.

Relying on private investment alone can work in urban areas where broadband profits are easy because the essential infrastructure to provide the service was constructed and paid for decades ago, originally to deliver telephone and television service. Rural areas suffer from deteriorated wireline infrastructure some phone companies want to abandon altogether and no cable broadband service at all.

Charter and AT&T first answer to shareholders. Local governments answer to their residents. Legislators are supposed to do the same. For Mr. Emery, loyalty to the interests of ALEC and the state’s telecommunications companies seems clear. It’s too bad his bill suggests a lot less loyalty to the voters in his district that need internet access or better broadband are will assuredly not get it if this bill ever becomes state law.

Frozen in Time: Verizon’s Ultra Slow DSL Languishes On in Massachusetts

When the Berkshire Eagle asked readers to test their internet speeds and share the results, along with opinions about their broadband options, the newspaper hit a nerve.

Over 400 readers in western Massachusetts promptly responded, many with scathing stories about slow speeds and unresponsive customer service.

The newspaper preferred to call it “tortured testimony.”

“It is slow and getting slower,” wrote Bob Rosen, from Otis. “Many times it just says, ‘not responding.'”

It” is Verizon’s DSL — broadband for the masses of landline customers in Massachusetts unlucky enough not to have FiOS fiber to the home service available before Verizon decided to stop expanding its copper-replacement fiber network. For the last seven years, Verizon’s DSL has remained more or less “as-is,” with no significant service improvements or apparent expansion effort.

Source: The ConsumeristUnfortunately, as customer demand for bandwidth grows, performance drops unless providers continually invest in new equipment to manage demand appropriately. Customers in western Massachusetts report Verizon seems to be making do with what they already have, and speeds have suffered.

Douglas Mcnally of Windsor, a member of the Select Board and consultant whose job depends on a good internet connection told the newspaper he really doesn’t have a consistently reliable connection. One test showed a speed of 2.82Mbps, but a second one returned a speed result of 0.64Mbps. Barbara Craft-Reiss from Becket has a connection also topping out at 0.64Mbps.

In Dalton, a customer that repeatedly complained about his 1.5Mbps speed was told that was as good as Verizon DSL was going to get.

“I have had several communications with Verizon and they always say not to expect any more,” the reader told the newspaper. “At times it is so slow the web page expires before it comes up. There are many times it does not work at all.”

On August 13th, 2011, The WiredWest Cooperative in western Massachusetts was officially formed by charter member towns. The project has gained some town, lost some others as the region works towards faster broadband instead of waiting around for Verizon, Comcast, and Charter.

Verizon seemed to echo its “done with DSL” attitude to Robert Rosen who has subscribed since the 1990s at his home in the Otis Woodlands area.

“In the beginning, the signal was very strong. Every six months I would call Verizon and see if I could get a stronger signal. Sometimes it was boosted, however in the past several years I have been told by Verizon I am at max strength,” Rosen said.

But at least he could subscribe. Verizon customer service agents have warned some customers if they drop DSL service, they cannot come back. Bob Johnson dropped his 2Mbps Verizon DSL account — the one he inherited under the previous account-holder’s name.

“I was told that if I cancelled the previous owner’s account, I would not be able to get an account at all,” Johnson reported.

A Verizon spokesperson claimed DSL is still available in Verizon’s FiOS-less service areas, as long as the customer’s line passes a loop qualification test. Only ISDN has been decommissioned in certain service areas, the spokesperson claimed.

But Stop the Cap! has heard from countless Verizon customers who share stories of deteriorating performance and disinterest in improving service, and customer service agents won’t even sell DSL to customers without bundling landline phone service.

“They are just letting the old telephone network fall apart piece by piece,” claims John Landis, a Verizon DSL customer outside of Buffalo, N.Y. “The investment is just not clear anymore. When is the last time Verizon introduced a new service on their wired network, such as faster internet speeds? We’re living with a company where time has stopped, unless you are on Verizon Wireless.”

Verizon’s apparent disinterest in selling DSL broadband has proved to be a significant benefit for cable operators that continue to take market share from the phone company. Strategy Analytics reports cable companies added more than three million new subscribers from 2015 on. Cable operators now have a 62% broadband market share, compared to just 15% for DSL, a percentage that has dropped for years. (Fiber broadband now accounts for a 23% share.)

“The telco operators haven’t been able to shake off the losses of DSL subscribers, but we expect to see increased fiber deployments in the coming quarters, which should help AT&T and Verizon return to growth,” Jason Blackwell, director of Strategy Analytics’ Service Provider Strategies Service said last summer. But much of that growth seems to be targeted for urban and suburban areas, not rural areas where DSL is often the only available broadband technology.

Cable broadband is generally not available in rural areas.

Despite telco claims that wireless broadband alternatives will eventually solve the rural broadband problem, Blackwell is skeptical.

“The reality is fixed broadband is continuing to grow in the U.S., and not being replaced by mobile broadband as some have reported,” he claimed. “The cable operators are driving the growth with increased speeds and multiplay bundles.”

The availability of a cable competitor has helped some in western Massachusetts resolve their broadband problems, but only in communities where cable operators exist. Many western Massachusetts residents are still waiting for community-owned gigabit-capable fiber broadband through the WiredWest project.

In late 2015, politics from the governor’s office put a “pause” on all state “last-mile broadband” projects and a sudden policy shift required each town to own its own network infrastructure despite the widely expressed desire on the local level for a regional approach. More than a year later, the project to improve broadband across the western half of the state is still trapped by bureaucratic interference, allowing the state’s big cable and phone companies to continue the status quo with no alternatives on the immediate horizon.

As of late December, the project is gathering support for sending a resolution to state officials reaffirming their request to allow local communities involved in the project to determine their broadband future without onerous requirements from the governor’s office.

Without WiredWest, the future is not good. Unless Verizon changes its mind about broadband deployment in western Massachusetts or cable operators Charter and Comcast spontaneously expand their service areas, readers of the Berkshire Eagle can expect more of what staff writer Larry Parnass summed up in two words: extreme disappointment.

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