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Comcast Dragged Into Upgrade for Santa Cruz After Public Broadband Initiative Announced

Before and after competition

Before and after competition

The best way to guarantee service upgrades from Comcast is to threaten to launch your own competing service provider, which is precisely what worked for the community of Santa Cruz, Calif., where Comcast suddenly found the resources to upgrade the local cable system to support speeds faster than 25Mbps.

For more than two years, customers and local governments across Santa Cruz County have been begging Comcast to upgrade the cable system that would have been state-of-the-art if it was still 1997. Customers could not exceed speeds of 25-28Mbps, but Comcast continued advertising its “Performance” tier (50Mbps), Blast! (105Mbps) and even Extreme option (150Mbps), collecting dozens of extra dollars a month from customers while their broadband speeds maxed out below 30Mbps.

The cable system is so antiquated, it could not officially support consistent service above 25Mbps, and many locals complain their speeds were slower than that.

“The most popular speed in this county is 16/2Mbps, which is the fastest one Comcast will actually give you what you paid for,” said Stop the Cap! reader Jim, who lives in Santa Cruz. “It’s so bad, people are actually envious of Charter, which services customers to the south.”

comcastOokla’s Net Speed Index rated the community of 62,000 447th fastest out of 505 California broadband-enabled cities.

Comcast’s performance was so bad, a frustrated employee began leaking internal company documents exposing the fact the cable system could not deliver speeds above 29Mbps, despite marketing and advertising campaigns selling customers more expensive, faster broadband local employees knew it could not deliver.

“We’ve been complaining to the company in Philadelphia for years, asking them to stop promising something they weren’t delivering,” a Comcast  technician told GoodTimes, a community newspaper. “But they ignored us.”

When customers complained, they were told their equipment was at fault or their cable modems needed to be replaced. In fact, the cable system’s local infrastructure needed to be upgraded, something Comcast has not done until recently.

santa cruzThis summer, the City of Santa Cruz joined forces with Cruzio, a California-based independent Internet Service Provider, to plan a new fiber to the home network within the city.

Under the terms of the partnership, the city will own the network, and Cruzio will act as the developer during engineering and construction and as the operator when the network is complete. Financing for the development of the network will be through city-backed municipal revenue bonds, repaid through the revenue from the sale of network services (and not by the taxpayers). The project will be financially self-sustaining and 100% of the profit generated will stay in the City of Santa Cruz.

Much of that money is likely to flow away from Comcast and into the community fiber provider, which will support speeds up to 1 gigabit. The announcement of impending competition inspired Comcast to upgrade its local cable infrastructure and the cable company suddenly announced service upgrades less than two months after the city announced their fiber project. In August, Comcast added 30 new channels, raised the speeds of two of its residential Xfinity Internet tiers at no additional cost to customers, and introduced four new tiers of Internet service for commercial business customers.

cruzio-logoThe Performance tier speed jumped overnight from 16/2Mbps to 75/5Mbps. Blast! speed increased from 25/4Mbps to 150/10Mbps.

For many local residents, it is too little, too late.

“Comcast can kiss me goodbye when Cruzio rolls into my neighborhood,” said Jim. “They ignored and overbilled us for years and the only time things changed is when competition was announced. Cruzio keeps their money here, Comcast sends it off to Philadelphia. If I have a problem, I know I’m going to get better service in person than dealing with Comcast’s customer service which has no idea where Santa Cruz even is.”

For Comcast customers who paid extra for Internet speeds they never received, company officials suggested they write a letter and ask for a refund, something Comcast will consider on a case-by-case basis.

“Comcast is a fundamentally deceitful company, at the leadership level,” responded local resident Charles Vaske. “They can not be trusted to stick to their word, and they certainly should not be trusted with infrastructure as vital as Internet access. A mere refund for this type of deceit is not appropriate, there should be severe penalties for such intentional crime.”

Special Report: Drahi Strikes Again: Stop the Cap! Analyzes Altice’s Acquisition of Cablevision

special reportAfter 44 years in the cable television business, the Dolan family has agreed to part with its prize possession, Cablevision Systems Corp. in a $17.7 billion dollar deal with Patrick “The Slasher” Drahi’s Altice NV.

The transaction will profoundly impact Cablevision’s employees, customers, and potentially the cable business in general in the New York City metropolitan area, where Cablevision’s 3.1. million customers live.

Who is Patrick Drahi?

Although few Americans have heard of the self-made billionaire Patrick Drahi, most of French-speaking Europe knows Mr. Drahi only too well, regularly criticized in the French press for surrounding himself with debt-laden acquisitions, stiffing vendors and suppliers, and paying rock-bottom wages to the employees that remain after constant campaigns of ruthless cost cutting.

Drahi’s idol is none other than cable magnate billionaire John Malone, the man pulling the strings at Charter Communications. In the 1970s and 1980s, Malone ran America’s largest cable conglomerate – Tele-Communications, Inc. (TCI), a company castigated by customers for high rates and poor service about as much as Comcast is today.

Altice1Malone’s reputation with the U.S. Congress reached its lowest point in the 1980s when then-Sen. Al Gore, Jr. (D-Tenn.) alternately accused Malone of heading a monopolistic cable “Cosa Nostra” that extorted his constituents with rate increases that exceeded 180% in less than five years and the “Darth Vader of Cable.” Malone taught Drahi that massive sums of money could be made buying and selling cable television (and later broadband) over systems that are usually de facto monopolies. Although entertainment is always in high demand, few governments treat the cable systems that offer it as an “essential utility,” allowing them to charge whatever they want for service.

From his earliest days working for a small cable operator, Drahi dreamed of building a cable empire buying and selling cable systems, extracting whatever he could from subscribers. One of his earliest techniques was flouting a French telecommunications law that, at the time, forbade the carriage of non-French language channels. His cable systems quietly added Arabic language networks to entice the large North African immigrant community in France to sign up for service. Drahi did not directly promote the networks, relying on word-of-mouth to deliver sales in the Arabic speaking community.

The Sacred Monster

While very conservative about spending money on wages, service upgrades, and technology, customers of Drahi-owned cable companies report he had no problem raising their rates. Numericable’s customer satisfaction rating rivals that of Comcast — a one-star cable company charging five-star prices.



The announced acquisition of Cablevision (and earlier Suddenlink) by Drahi’s company — Altice NV, came with glowing coverage from the American media, particularly cable business news channels, the Wall Street press, and the New York Times. A Sept. 7, 2015 piece by Nicola Clark in the Times presented Drahi as a classic “rags to riches” success story, noting he loathes being interviewed and allegedly leads a humble existence:

Despite a personal fortune estimated at close to €17 billion, Mr. Drahi indulges in few of the trappings of great wealth, friends and colleagues said. Although he keeps several elegant homes — in Geneva, Paris and Tel Aviv — his personal tastes and habits hew to the mundane. He wears a plastic Swatch instead of a Rolex and often arrives at business meetings on foot or a bicycle, instead of by chauffeured car.

Clark only mentions in passing she relied almost entirely on a series of interviews with “a half-dozen friends and colleagues” to paint what turned out to be a one-sided picture of Mr. Drahi for American readers. That story had eyes rolling among staffers in the offices of French newspaper Les Echos, incredulous at the American infatuation with a man the newspaper calls the “sacré monstre” — sacred monster. In New York, reporter Lucie Robequain, foreign business correspondent for the French daily, tried to share the scene at the Goldman Sachs-organized Communacopia conference where the deal was personally announced by Mr. Drahi for her French readers.

cablevision“Newspapers [in America] devote entire pages [about Drahi], emphasizing his self-made-man side which Americans love so much,” Robequain noted. She added the New York Times painted Drahi an almost romantic figure, proposing to his wife one hour after meeting her and then putting everything between them at risk to build his personal fortune.

A later piece in the Times on Sept. 17 by Emily Steel and Mark Scott also was the subject of derision in the European press. Steel and Scott called Altice a “bold new player” in the American cable market and gave Dexter Goei, one of Drahi’s lieutenants (some in the French press prefer ‘minion’) space to gush about the game-changing deal. Goei joined Altice in 2009, having worked for 15 years in investment banking with JP Morgan and Morgan Stanley until the Great Recession arrived.

“There’s a new sheriff in town, and we’re probably going to run it a little differently,” Goei said during the investor conference in New York on Thursday that unveiled the deal.

Phantom Fiber

The Times piece also relied on unnamed “analysts” dangling the promise of fiber optics to appease subscribers concerned about a legendary cost-cutter taking the helm of the cable company.

[…] Analysts said Altice invests heavily in new infrastructure — with a focus on upgrading fixed-line networks with the latest fiber-optic technology. The priority, analysts said, is to provide subscribers with faster Internet connection speeds at competitive prices.

Previous deals involving Altice (Image: Financial Times)

Previous deals involving Altice (Image: Financial Times)

In Europe, the press is skeptical about promised upgrades, noting Altice is “an empire built on a mountain of debt” largely made possible by quantitative easing and record low interest rates, which permit companies to finance buyouts on the cheap. Drahi says he can save money through synergy — sharing operations and minimizing the need for customers to reach out for customer service. Altice officials claim just by simplifying Cablevision’s bills, the company can save $14 million annually.

Drahi’s success story with Wall Street and other investors comes from his ability to cut costs at acquired companies, often dramatically. It is part of the informal deal with investors that has allowed the company generous credit to continue its buying spree. The Cablevision deal promises the Dolans and other investors only $3.3 billion in cash. The rest of the purchase price will come from raising $8.6 billion in new debt, saddled on Cablevision’s books inside Altice.

So while unnamed analysts are promising fiber upgrades for Cablevision customers, the Financial Times and CNBC report only one thing will be on Cablevision’s menu post-merger: spending a lot less, not more. Drahi seems to agree.

In a slide presentation to investors, Altice compares Cablevision’s $49 a month in operating expenses per customer against what its Numericable operation in France spends on its customers: $14 a month.

So how does Numericable spend three times less on subscribers than Cablevision?

Cost Cutting Specialists

Say hello to Michel Combes, former CEO of Alcatel-Lucent. Two years ago, he took leadership of the company that was better known by many as Bell Labs. Known as a cost-cutter, Combes quickly announced plans to strip the company of less profitable business units and fired about 10,000 workers while also holding the line on salaries (except for his) of the remaining employees. After two years in the leadership position, Combes engineered the sale of the company to Nokia, putting himself out of a job. But he won’t be hurting. A breathtaking golden parachute package approved by his colleagues on Alcatel Lucent’s board caused a political furor in France.



Combes’ departure bonus was originally planned to amount to $15 million in stock after completing the company’s sale to Nokia, an amount Emmanuel Macron, France’s economic minister, called shocking and irresponsible. Under pressure, the board has since cut the payoff roughly in half. But according to L’Observateur, Drahi has offered his friend an even more lucrative “golden hello” — stock options awarded as a signing bonus worth up to $100 million. Combes’ first role will be to serve as Altice’s chief operating officer, presiding over new rounds of cost-cutting at the company’s various acquisitions. One item spared from review is Combes’ own compensation package. Those under him are not so lucky.

Wages and Jobs

“I do not like to pay salaries, I pay as little as I can,” Drahi told investors at the Goldman Sachs event last week. Drahi complained more than 300 employees at Cablevision were being paid more than $300,000 a year. “This we will change.

In addition to a large number of expected layoffs at Cablevision, widespread salary reductions are also likely to be forthcoming. Drahi’s cable companies have some of the smallest compensation packages in the industry, except at the top executive level.

Cablevision’s already testy relationship with some of its union employees will likely grow much worse under Drahi’s leadership. But that battle may have to wait until another day. In February, the union ratified a two-year agreement with Cablevision. In Europe, Drahi’s reputation among public unions is so poor many of the opinions expressed by unionized workers cannot be printed in a family newspaper.

Suppliers complain Drahi's companies don't pay their bills.

Suppliers complain Drahi’s companies don’t pay their bills.

In Lisbon, Jorge Felix – a representative of the trade union organization of workers at PT (Portugal Telecom) warns U.S. unions should get everything from Altice and Mr. Drahi in writing.

“There are commitments made by Altice before our union and are written,” Felix said, adding that he was disturbed by Drahi’s attitude toward his middle class employees. Felix notes Drahi has already created tremendous controversy in Portugal by stonewalling payment of suppliers and vendors’ outstanding invoices until the company secures written agreements promising enormous discounts, often amounting to 30-40% off current prices. That, in turn, can cause layoffs and salary reductions at suppliers, enriching Altice but hurting just about everyone else.

Drahi: Looking to run faster than the music

France’s Economic Minister Macron seems to agree, lashing out at Drahi’s now familiar business model.

“Is it good for the economy? The answer is no,” he said. “Is it good for investment? The answer is no. Is it good for employment? The answer is no.”

Macron also expressed concern that Drahi’s telecom empire was growing too fast — and taking on too much debt too quickly.

“I have a big concern in terms of leverage on Drahi due to its size and its place in our economy,” he said. “That’s my responsibility to look at it. He is looking to run faster than the music.”



Macron and his staff are concerned many of Drahi’s top executives and advisers come from New York’s financial markets and investment banks who either left or were pushed out in the turmoil of the Great Recession. Macron worries Drahi could be constructing the world’s first “too big to fail” cable operator that could cost nearly 100,000 jobs and require a government bailout if things turn sour.

Promised Service Improvement & Upgrades

With each cable consolidation merger, companies routinely promise subscribers will benefit from improved service. As mentioned earlier, unnamed analysts predict Drahi could invest up to $30 billion to improve the cable companies he buys in the United States.

“Which Altice are they talking about,” asks Stop the Cap! reader François Ribaud. “Altice owns Numericable, the largest cable company in metropolitan France, and if they are spending money it certainly was not on us.”

Ribaud’s original cable company Noos was acquired by Numericable in a massive acquisition effort in the early 2000s which today leaves almost all of France served by a single cable operator — Numericable.

“Things stagnated after that because Patrick Drahi does not spend money unless he has to,” Ribaud said. “The set-top boxes are outdated, the broadband service is often oversold, and heaven help you if there are service problems. The North African call center customer service help is an example for Numericable of getting what you pay for. They are awful.”

Charles Dolan

Charles Dolan

Drahi’s competitors in the fixed line and wireless markets eventually forced his wallet open, requiring an investment in fiber optics to help it remain a player in one of Europe’s most contentious telecommunications price wars. Drahi’s company in France lost subscribers as its network suffered from a lack of needed upgrades to manage demand.

“Now that I live in New York, I can say it is completely different than in France,” Ribaud said. “There is certainly no price war here, so there is no need to spend more money. The only people spending money will be customers I assure you.”

The Creator of Home Box Office Signs Off

Cablevision has been rumored “for sale” for so long without a deal, many analysts predicted the founding family would never let go of the company founded by 88-year old Charles Dolan, who helped transform what used to be a rural service to help customers receive distant over the air stations over a shared antenna into an urban and suburban subscription television business. Dolan made cable television something more.

Dolan founded Home Box Office (HBO), a commercial-free premium movie and entertainment channel free from the network “standards and practices” divisions that removed profanity and edited out violence from movies originally shown intact in theaters.

Cablevision systems used to cover 2.9 million subscribers in 19 states, many in small and medium-sized communities. By the 1990s, cable systems were swapped or sold to build regional empire-like service areas. Cablevision was no different, retreating to just three large service areas in New York, Cleveland and Boston. Soon thereafter, Cablevision would only serve metropolitan New York, particularly in Brooklyn, the Bronx, Long Island, parts of northern New Jersey and Connecticut, while exiting Cleveland and Boston.

The New York Post reported secret talks for the sale began in June, and a deal was complete at the end of August. Some of the discussions took place on a yacht floating around the Mediterranean. The Post reports the sale of Cablevision was an emotional experience for Dolan and he still thinks of the people who work there as family. But in the end, the Dolan family’s proceeds from the sale will reinforce their already well-established wealth and prominence. The same is unlikely to be true for Cablevision’s employees and customers under Drahi’s cost-conscious leadership.

Frontier Adds Limited Fiber to the Home Service in Rochester; $19.99 for 30/30Mbps Service

Phillip Dampier September 8, 2015 Broadband Speed, Competition, Consumer News, Frontier 5 Comments

frontier fiber

A lawn sign promoting Frontier fiber optic broadband at a new housing development in Ogden, N.Y. [Image courtesy: Craig]

Frontier Communications has introduced fiber to the home service limited to certain new housing developments in the suburbs around Rochester, N.Y., offering 30/30Mbps broadband for $19.99 a month.

Stop the Cap! reader Craig sent along word Frontier was using lawn signs to promote fiber broadband outside of the nearly complete Bella Estates — a development in the town of Ogden.

This is not the first project of this type for Frontier, which installs optical fiber in most new housing developments as they are built. Customers are typically offered fiber-fed broadband service at the same download speeds offered to Frontier’s DSL customers. With Frontier committed to providing basic telephone service throughout its operating service areas, stringing new optical fiber costs only a little more than using traditional copper wiring.

However, Frontier’s attitude about scrapping customers’ existing copper wiring in favor of fiber optics is very different. Frontier is among the last major independent phone companies not building its own significant fiber to the neighborhood or fiber-to-the-home service in its legacy service areas. Instead, it has adopted networks acquired from AT&T (U-verse in Connecticut) and Verizon (FiOS in Indiana and the Pacific Northwest, and possibly Florida, Texas and California as well).

“Once again, Frontier is only expanding where it feels like it,” writes Craig.

Stop the Cap!’s Open Letter to N.Y. Public Service Commission: No Rush to Judgment


August 19, 2015

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Case Number: 14-C-0370

Dear Ms. Burgess,

After years of allowing the telecommunications industry in New York to operate with little or no oversight, the need for an extensive and comprehensive review of the impact of New York’s regulatory policies has never been greater.

Let us remind the Commission of the status quo:

  • As Verizon winds down its FiOS initiative, other states are getting cutting-edge services like Google Fiber, AT&T U-verse with GigaPower, CenturyLink Prism, and other gigabit-speed broadband service competition. In contrast, the largest telecommunications companies in New York have stalled offering better service to New Yorkers.
  • Time Warner Cable has left all of upstate New York with no better than 50/5Mbps broadband – a top speed that has not risen in at least five years.
  • Frontier Communications has announced fiber upgrades in service areas it is acquiring while its largest New York service area – Rochester, languishes with copper-based ADSL service that often delivers no better than 3-6Mbps, well below the FCC’s minimum 25Mbps definition of broadband.
  • Verizon Communications, the state’s largest telephone company, is accused of reneging on its FiOS commitments in New York City and has left upstate New York cities with nothing better than DSL service, giving Time Warner Cable a monopoly on 25+Mbps broadband in most areas. It has also talked openly of selling off its rural landline network or scrapping it altogether, potentially forcing customers to an inferior wireless landline replacement it calls Voice Link.

As the Commission is also well aware, there are a number of recent high-profile issues relating to telecommunications matters that have a direct impact on consumers and businesses in this state – some that are currently before the Commission for review. Largest among them is another acquisition involving Time Warner Cable, this time from Charter Communications. That single issue alone will impact the majority of broadband consumers in New York because Time Warner Cable is the state’s dominant Internet Service Provider for high speed Internet services, especially upstate.

These issues are of monumental importance to the comprehensive examination and study of the telecommunications industry in New York promised by Chairwoman Audrey Zibelman. The Charter-Time Warner Cable merger alone has the potential of affecting millions of New York residents for years to come.

Although this study was first announced to Speaker Sheldon Silver, the Honorable Jeffrey Klein, and the Honorable Dean Skelos in a letter on March 28, 2014, followed up by a notification that Chairwoman Zibelman intended to commence the study within 45 days of her letter of May 13, 2014, the first public notice seeking comments from stakeholders and consumers was issued more than a year later on June 23, 2015 (less than two months ago), with comments due by August 24, 2015.

With respect, providing a 60-day comment window in the middle of summer along with a handful of public hearings scattered across the state with as little as three weeks’ advance notice is wholly inadequate for a broad study of this importance. The Commission’s ambitious schedule to contemplate the state of telecommunications across all of New York State will likely be shorter than the review of the 2014-2015 Comcast-Time Warner Cable merger transaction which started May 15, 2014 and ended April 30, 2015.

We have heard from New York residents upset about how the Commission is handling its review. One complained to us the Commission had more than a year to prepare for its study while giving New York residents short notice to attend poorly advertised public hearings in a distant city, and two months at most to share their feelings with the Commission in writing. One woman described having to find a hearing that was, at best, 60 miles away and located at a city hall unfamiliar to those not local to the area, where suitable parking was inconvenient and difficult as she attempted a lengthy walk to the hearing location at the age of 69.

Several of our members also complained there are more suitable public-friendly venues beyond paid parking downtown city administration buildings or deserted campuses in the middle of summer break. Many asked why the Commission does not seem to have a social media presence or sponsor live video streaming of hearings where residents can participate by phone or online and avoid inconvenient travel to a distant city. Perhaps the Commission could be enlightened to see how New York’s telecommunications companies actually perform during such a hearing.

While we think it is very useful for the Commission to have direct input from the public, we are uncertain about how the Commission intends to manage those comments. We were disappointed to find no public outline of what the Commission intended to include in its evaluation of a topic as broad as “the state of telecommunications in New York.”

Too often, providers downplay service complaints from consumers as “anecdotal evidence” or “isolated incidents.” But if the Commission sought specific input on a topic such as the availability of FiOS in Manhattan, consumers can provide useful input on the exact location(s) where service was requested but not provided.

If the Commission received information from an incumbent provider claiming it was providing broadband service to low income residents, consumers could share on-point experiences as to whether those claims were true, true with conditions the Commission might not be aware of (paperwork requirements, onerous terms, etc.) or false.

If the Commission sought input on rural broadband, providers might point to a broadband availability map that suggests there is robust competition and customer choice. But the Commission could learn from residents asked to share their direct experiences that the map was inaccurate or outdated, including providers that only service commercial customers, or those that cannot provide service that qualifies as “broadband” by the Federal Communications Commission.

A full and open investigation is essential to finding the truth about telecommunications in New York. The Commission needs to understand whether problems are unique to one customer in one part of the state or common among a million people statewide. We urge the Commission to rethink its current approach.

New Yorkers deserve public fact-finding hearings inviting input on the specific issues the Commission is exploring. New Yorkers need longer comment windows, more notice of public hearings, and a generous extension of the current deadline(s) to allow comments to be received for at least 60 additional days.

Most critically, we need hearings bringing the public and stakeholders together to offer sometimes-adversarial testimony to build a factual, evidence-based record on which the Commission can credibly defend its oversight of the telecommunications services that are a critical part of every New Yorker’s life.

The Commission’s policies going forward may have a profound effect on making sure an elderly couple in the Adirondacks can keep a functioning landline, if affordable Internet will be available to an economically-distressed single working mother in the Bronx, or if upstate New York can compete in the new digital economy with gigabit fiber broadband to support small businesses like those run by former employees of downsized companies like Eastman Kodak and Xerox in Rochester.

Yours very truly,

Phillip M. Dampier

Global Broadband Prices Drop 9%, But Not for North Americans

The cost of residential broadband service around the world dropped an average of 9%, but not in the United States and Canada where providers are effectively raising prices while justifying the added cost with occasional speed boosts.

Point Topic, which tracks residential and business broadband pricing found prices are affected the most when competition increases and incumbent providers are forced to respond with lower prices and/or better service.


Point Topic’s chart shows North Americans pay a significant price for service, but receive some of the worst broadband performance in return when compared against better value for money providers in Central Asia, Eastern Europe, Western Europe, and the Asia-Pacific region. (Chart: Point Topic)

By far the poorest value broadband tracked by Point Topic is traditional DSL from the telephone companies. Speeds have barely budged in many areas while prices wildly fluctuate depending on whether fiber or cable broadband providers are competing for the same customers. The research firm found DSL to be the worst choice for consumers — combing the lowest speeds and the highest per megabit cost among wired providers.

The price of residential DSL is also going up — it was just under $10 per Mbps in the second quarter, an increase from nearly $9 per Mbps the phone companies charged late last year.

DSL is a dreadful value. (Chart: Point Topic)

DSL is a dreadful value. (Chart: Point Topic)

Cable operators facing fiber competition have been forced to improve speeds but are still managing to raise prices. Globally, the average price of cable and fiber broadband based on speed alone is $1 per Mbps, down from $3 per Mbps in the second quarter of 2010. But North Americans are paying more for the service through annual rate increases and ancillary modem rental fees.

The reason North Americans are paying more for broadband service is because providers are attempting to make up for lost television revenue.

The New York Post noted most broadband bills are now up to between $50 and $70 a month for standalone service.

James Dolan, CEO of Cablevision, explained how broadband pricing has evolved in the cable industry.

“We’re going to see a re-stratification of the cable business .… One thing we see is significant uses of data, increasing exponentially,” Dolan told investors late last year. “We think that’s where the growth is going to come from.”

Dan Cryan, research director for digital at IHS, told the newspaper that revenue from U.S. broadband providers in 2014 topped $49 billion, up from $42.1 billion in 2012.

Cable companies collected an average of $4.75 per month more from broadband customers in 2014 over what they paid in 2012.

“Broadband is strategically more important than the number of subscribers indicates because it has the potential to be higher margin,” Cryan said.


(Chart: Point Topic)

Fiber Infinitely Upgradeable: Verizon Successfully Tests 10Gbps NG-PON2 Technology on FiOS

Phillip Dampier August 12, 2015 Broadband Speed, Competition, Verizon No Comments

verizonfiosVerizon is ready to push speeds beyond 1Gbps on its fiber to the home network FiOS, after successfully testing the next generation of signaling technology capable of delivering at least 10Gbps to customers.

Next Generation-Passive Optical Network (NG-PON2) technology allows providers to improve signaling speed and performance on existing fiber infrastructure already on the poles or in the ground. Verizon successfully tested an optical line terminal to transmit four wavelengths, each capable of speeds up to 10/2.5Gbps. Future versions should achieve symmetrical speeds of 10/10Gbps, according to Verizon. Eventually, FiOS customers may be able to subscribe to speeds up to 80Gbps.


The test demonstrated Verizon can successfully upgrade to newer generation technology and stay backwards-compatible with existing GPON customers without having to scale a utility pole or dig up any sidewalks. Existing fiber strands can manage all types of light signaling, meaning upgrades will typically occur in the office, not in the field, reducing the costs of upgrades.

Verizon isn’t even sure what to do with the extra speed yet.

“Upgrades on the FTTP network will begin when commercial equipment is available to support business services such as switched Ethernet services,” Verizon said in a press release. “The technology upgrade can also be used to support multi-gigabit-speed Internet access services for FiOS customers as the marketplace demands such services and as the technology matures.

North Carolina, Where Fiber Begets More Fiber; Ting Explores Wiring Cities Google Forgot

Ting-truck-closedNorth Carolina residents bypassed by Google Fiber and impatient waiting for AT&T U-verse with GigaPower may still have a chance to get gigabit fiber Internet.

Ting, a Toronto-based wireless provider, is exploring building fiber broadband networks in as many as a half-dozen cities in 2016, and some of them may be in North Carolina.

Elliot Noss, CEO of Ting’s parent company, told the Triangle Business Journal he is impressed with the enthusiasm for fiber optic broadband in the state. He recognized Greenlight, Wilson’s community-owned fiber network, as a fiber pioneer that helped fuel demand for better Internet in the state. He added North Carolina is one of the leaders in fiber to the home service in the country, and that makes it a very suitable place to bring even more fiber to the state.

The Triangle region of North Carolina is receiving network upgrades from Time Warner Cable and AT&T, and Google Fiber is coming to Charlotte and Raleigh-Durham, but there remains a number of Triangle communities including Clayton, Dunn, Henderson, Louisburg, Norlina, Oxford, Pittsboro, Rocky Mount, Roxboro, Sanford, Selma, Siler City, Smithfield, Tarboro and Wake Forest where fiber networks would be welcomed.

Ting workers installing fiber optics in Charlottesville, Va.

Ting workers installing fiber optics in Charlottesville, Va.

Noss believes fiber begets even more fiber, which may explain why some states are getting huge investments in competing fiber optic projects while others struggle with little or no fiber at all. As soon as a fiber provider enters a region, it creates a higher level of awareness that better Internet service exists when you look beyond “good enough” broadband from phone and cable companies. The resulting “broadband envy” fuels demand for network upgrades.

Noss believes smaller, outlying metros bypassed for fiber upgrades now want them more than ever because they are at a competitive disadvantage without better Internet access.

“North Carolina might be the first state in the union that has moved from where cities and towns are looking at fiber as a way to differentiate and to lead,” Noss told the newspaper. “(North Carolina) is seeing it almost defensively: We need it for our survival because we’re surrounded by it.”

So what makes a community ripe for fiber broadband? A community already sold on fiber and willing to make things happen quickly and smoothly.

“The first thing we look for when we’re engaging with a city or town is an understanding that this is something they deeply want to do,” Noss says. “We don’t take meetings with cities who want to hear about why they should have fiber or gigabit connectivity.”

That attitude is shared by Google, which has taken to issuing a checklist for city officials interested in attracting Google Fiber to their community. In short, it means developing a working relationship between zoning/permitting officials and Google’s engineers to cut the “red tape.”

In the past, politicians often treated cable franchise contracts as valuable enough to ask providers for concessions in return for an agreement. Many cities treated Verizon the same way when it sought franchise agreements to offer cable television over its FiOS fiber to the home network. Some city officials sought compensation for PEG services – Public Access, Educational, and Government channels. Others sought funding for technology and educational programs, community centers, or free service for public and government-owned buildings.

Google has turned that formula upside down. Today, communities offer concessions to Google competing to be the next fiber city. Other providers entering the fiber market with promises of better Internet are getting a similar reception from eager communities.

Charlottesville, Va. and Westminster, Md., neither a likely prospect for Google Fiber or Verizon FiOS did not need any convincing. Ting now provides gigabit fiber service in both communities for $89 a month or a cheaper 5/5Mbps budget option for $19 a month — both with a $399 installation fee. Customers cannot wait to sign up for service, often to say goodbye to companies like Comcast or Verizon’s DSL offering.

Ting is owned by Tucows, Inc., a provider of network access, domain names, and other Internet services.

http://www.phillipdampier.com/video/Ting What gigabit fiber means for Westminster 2015.mp4

Ting produced this video about what gigabit fiber broadband will mean for a community like Westminster, Md. (2:07)

Comcast Finds Excuses to Avoid Installing Gigabit Pro Fiber; Construction Costs Seem to Matter

qualifiedComcast is rejecting some requests for its new 2Gbps fiber to the home service, claiming construction costs to provide the service to some homes are too high, even for customers living 0.15 of a mile from Comcast’s nearest fiber optic connection point.

Stop the Cap! reader Thomas, who wishes to withhold his last name, was excited at the prospect of signing up for Comcast’s 2Gbps broadband service for his home-based Internet business, despite the steep $1,000 installation fee and $159/mo promotional price he saw in the media.

“For the average person just looking for a faster connection at home, 2Gbps is absolute overkill, but if you run a home-based business that depends on a fast Internet connection, Comcast’s prices are a lot more reasonable than a Metro Ethernet or fiber solution from AT&T,” Thomas said.

Thomas is a Comcast customer in the Chicago area and knew he’d qualify for the service because he watched Comcast crews install/upgrade fiber cables close to his home. Comcast requires customers to live within one-third of a mile of the nearest company-owned fiber connection point to get 2Gbps service. Thomas lives far closer than that and Comcast’s online qualification tool also seemed to show the service would be available to him.

“I assumed it would be easy to order service, but it has not turned out that way at all,” Thomas complained.

Comcast’s regular customer service agents were hit or miss for Thomas. Some are acquainted with Comcast’s Gigabit Pro offering, many others are not. It took three calls for him to find a representative aware of the product, but even then the representative informed him someone would have to call him back to take his order. Two days later, he did receive a call from a Comcast regional office that explained the lengthy ordering and installation procedure. If everything worked as it should, it would take up to three months for Comcast to complete the fiber installation. But Thomas warned there were potential deal-breakers along the way.

Equipment Costs

Comcast will supply some, but not all, of the necessary equipment. A router provided by Comcast adds $19.99/mo to the price, and could be worthwhile to customers wanting to limit their out-of-pocket up front costs. But there are other equipment requirements to consider as well:

  • Desktop PC with available PCIe expansion slot
  • 1 10G PCIe network interface controller with SFP+ cage ($200-400)
  • 1 10G enhanced small form factor pluggable SFP+ transceiver (850nm MMF) ($200-350)
  • 1 MMF LC patch cable ($25-30)

To connect multiple devices to the fiber handoff, a compatible and very expensive 10Gbps Layer 3 switch or router is also required, which can run well into the thousands of dollars.

Pricing Gotchas

Installation is $500 and activation costs another $500. There is an early termination fee of $1,100 if you disconnect service before the end of your term contract. On a three-year contract, the amount of the fee is reduced by $100 every three months you keep the service. That $159 promotional price quoted in the press turned out to be another issue. Comcast informed him that offer is only good in the cities of Nashville (a future Google Fiber city also designated for GigaPower U-verse from AT&T) and Chattanooga, Tenn. (which already has gigabit service from EPB). It would cost him $299.95 a month, not $159.

Service Qualification Procedure

slow noComcast implies any customer within 1/3rd of a mile of their nearest fiber cable is qualified to get Gigabit Pro service, but Thomas tells us that just isn’t true.

“Comcast treats these installations the same way they would running cable into virgin territories like an unserved neighborhood or office park,” Thomas said. “Once you commit to an order, I am convinced they do a Return On Investment (ROI) and cost analysis to decide if it makes financial sense to actually bring fiber to you.”

It begins with an in-office map survey that reviews Comcast’s existing network and verifies a path from Comcast’s existing fiber network to the customer’s home. This process takes up to 14 days, according to Thomas, and makes certain the customer is within the qualified distance for service.

“But I can say it goes beyond this, because Comcast was also looking at proposed routes to get fiber to me, and the representative was concerned about whether Comcast’s cables in my area were on telephone poles or underground in conduit,” reported Thomas. “There was also an issue with a pedestal and I was informed a site survey was required to check whether existing infrastructure in my neighborhood could support the service.”

Comcast said a visit from a technician would be required — another two-week process, and about then he was told “there was indeed a problem with their existing pedestal and they also ran into a conduit issue,” Thomas said. “At that point, I was informed my order could not go ahead because Comcast would have to spend about $17,000 to correct these issues and cover my installation and that evidently failed their ROI and cost analysis.”

Had Thomas passed all the qualification tests, he would have waited up to 13 weeks (more than three months) from the time he ordered service before he could actually use it. Now, he will wait at least a year for Comcast’s suggested alternative — the arrival of DOCSIS 3.1, which is expected to support gigabit speeds over Comcast’s existing coax cable network.

“I honestly felt mislead by Comcast’s press releases that suggested service was just a matter of where you lived without telling customers they will deny service if it costs Comcast over a certain dollar amount, no matter how close you live to their existing fiber,” Thomas added. “Promoting a service and actually providing it are two very different things and it seems Comcast just isn’t providing it, at least to me.”

Have you explored Comcast Gigabit Pro? If so, share your experiences in the comment section. We’d love to hear from you if you actually have the service installed.

Fiber to the Press Release: Comcast’s 2Gbps Service Arrives – In One 993-Acre Houston Development

the grovesAfter months of issuing nationwide press releases promoting Comcast’s new, blazing fast 2Gbps fiber to the home broadband, the cable company has finally announced it will be available (so far) … in one single 993-acre unfinished planned community in a northeastern suburb outside of Houston: Humble, Tex.

The Groves, designed to eventually contain 2,200 single-family homes on 993 acres west of West Lake Houston Parkway and south of Kingwood, currently resembles a crop circle because much of the community has yet to be built.

Crescent Communities, the North Carolina-based developer, calls The Groves a “refuge” from the rest of Houston, with amenities close at hand. Residents may not instinctively balk at Comcast’s expensive super-fast service requiring a $1,000 installation fee and a multi-year commitment to get the special promotional price of $159/mo. Housing at The Groves starts in the upper $200,000s and extends into the $500,000 range.

The Houston Business Journal reports Comcast will directly connect homes in the development to fiber optics, not the usual coaxial cable used elsewhere. Every home in the development will have access to the all-fiber network, which will offer 250Mbps and higher speeds, according to Comcast spokesman Michael Bybee.

Comcast will officially launch the 2Gbps service next week.

The Groves crop

The Groves (center) is a master-planned upscale residential community that will eventually contain over 2,000 homes. But in this photograph, provided by the developer, it looks more like a crop circle.

Unfinished Business: Comcast will not face much of a challenge wiring an incomplete planned community for fiber optics. Much of The Groves has yet to be built.

Unfinished Business: Comcast will not face much of a challenge wiring an incomplete planned community for fiber optics. Much of The Groves has yet to be built. (Dark Green: Unfinished/Tan: Complete)

Myanmar (Burma) Will Get Fiber-to-the-Home Broadband Service, Courtesy of Thai Consortium

myanmarResidents of one of the world’s most isolated countries will soon have the option of getting fiber-to-the-home service that will offer faster Internet access than most Americans get with traditional DSL from their phone company.

Thailand’s Benchachinda Holding Company has partnered with four other technology companies to launch Myanmar Information Highway Limited (MIH), with the goal of wiring fiber-to-the-home service to every home and business that wants service in Yangon and other major economic cities. It’s a remarkable investment for a country that had until recently been run by a military dictatorship for more than 50 years and is still liberalizing its economy and implementing democratic reforms.

Benchachinda’s president, Vichai Bencharongkul, said the group’s investment in international businesses in Myanmar is the first of a few foreign investments in other nations. Bencharongkul told the Thai press fiber broadband sells itself and investment in Myanmar would make good business sense.



He can point to the fact MIH was able to quickly get permission to lay fiber-optic cable from Yangon Electricity Supply Corporation, the country’s dominant electric utility. Myanmar’s bureaucracy can prove daunting to doing business in the country, but the promise of faster broadband overcame those concerns.

Internet access in Myanmar, better known internationally as Burma, has traditionally been a frustrating experience. Despite some fiber Internet rollouts by state-owned Myanma Posts & Telecommunications (MPT), offering up to 100Mbps, the average upper income Myanmar household still relies on DSL service and gets only up to 6Mbps speed. The country is ranked 159 out of 198 by Net Index for consumer download speed, averaging just 5Mbps. Fiber optic broadband will change that.

In a cost-saving measure, MIH will launch service with speeds averaging 20Mbps — four times faster than the current average speed in the country — and raise speeds and capacity going forward. They intend to deliver stiff competition to both Yatanarpon Teleport (YTP) and the state telephone company, which charges almost $65 a month for a basic DSL line. MPT charges $1,200 a month for 20Mbps fiber broadband and focuses on business customers. MIH is expected to charge lower prices for service and will rely on its own network instead of the one owned and controlled by the state-owned telephone company.

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