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America’s 5G Revolution Comes By Giving Wireless Industry Whatever It Wants

Wheeler

Wheeler

FCC chairman Thomas Wheeler today told an audience at the National Press Club that 5G — the next generation of wireless networks — “is a national priority, and why, this Thursday, I am circulating to my colleagues proposed new rules that will identify and open up vast amounts of spectrum for 5G applications.”

Wheeler’s proposal, dubbed “Spectrum Frontiers,” is supposed to deliver wireless connectivity as fast as fiber optic broadband, and in Wheeler’s view, will deliver competitive high-speed access for consumers.

“If the Commission approves my proposal next month, the United States will be the first country in the world to open up high-band spectrum for 5G networks and applications,” said Wheeler. “And that’s damn important because it means U.S. companies will be first out of the gate.”

Central to Wheeler’s 5G proposal is opening up very high frequency millimeter wave spectrum — for unlicensed and licensed data communications. Wheeler named two in his speech: a “massive” 14GHz unlicensed band and a 28GHz “shared band” that will allow mobile and satellite operators to co-exist.

“Consider that – 14,000 megahertz of unlicensed spectrum, with the same flexible-use rules that has allowed unlicensed to become a breeding ground for innovation,” Wheeler said.

5g“Sharing is essential for the future of spectrum utilization. Many of the high-frequency bands we will make available for 5G currently have some satellite users, and some federal users, or at least the possibility of future satellite and federal users,” Wheeler noted. “This means sharing will be required between satellite and terrestrial wireless; an issue that is especially relevant in the 28GHz band. It is also a consideration in the additional bands we will identify for future exploration. We will strike a balance that offers flexibility for satellite users to expand, while providing terrestrial licensees with predictability about the areas in which satellite will locate.”

The CTIA – The Wireless Association, America’s largest mobile carrier lobbying and trade association, is all for opening up new spectrum for the use of their members — AT&T, Verizon Wireless, Sprint, T-Mobile, among others. They just don’t want to share it. Ironically, they are calling on the FCC to regulate who gets access to what frequencies and what services can use them. They’d also appreciate federal rules restricting or preempting local officials responsible for approving where new cell towers can be located, and some form of price regulation for backhaul services would also be nice:

First, we need the right rules for high-band spectrum based on a time-tested regulatory framework. It must strike a reasonable balance for licensed and unlicensed use while promoting investment with clear service and licensing rules. We should avoid experimenting with novel spectrum sharing regimes or new technology mandates.

Second, we need the right rules to help build our 5G infrastructure. Traditional spectrum travels many miles, depending on large cell towers to transmit signals. In contrast, high-band spectrum – capable of carrying greater amounts of data –travels meters, not miles and will require the deployment of thousands of new small cells the size of smoke alarms. This network evolution requires a new infrastructure approach, and Congress, the FCC and states must streamline and simplify local siting and rights of way rules.

Wheeler recognizes that 5G services will work very differently from the 3G and 4G networks we’ve used in the past.

ctia

CTIA is the wireless industry’s biggest lobbyist and trade association.

“5G will use much higher-frequency bands than previously thought viable for mobile broadband and other applications,” Wheeler said. “Such millimeter wave signals have physical properties that are both a limitation and a strength: they tend to travel best in narrow and straight lines, and do not go through physical obstacles very well. This means that very narrow signals in an urban environment tend to bounce around buildings and other obstacles making it difficult to connect to a moving point. But it also means that the spectrum can be reused over and over again.”

In other words, think about 5G as an initially limited range wireless network that may turn out to be best suited for fixed wireless service or limited range hotspots, especially before network densification helps make 5G service more ubiquitous. The wireless industry doesn’t think Wheeler’s vision will be enough to resolve capacity issues in the short term, and is calling on the FCC to release even more low and mid-band spectrum in the 600MHz range that can travel inside buildings and offer a wider coverage area.

Wheeler’s recognition that 5G’s shorter range signals will likely require a massive overlay of new infrastructure has also opened the door for the CTIA to call on the FCC to revisit local zoning and antenna placement rules and policies, with the likely goal of preempting or watering down local authority to accept or reject where cell phone companies want to place their next small cell or cell tower. Wireless companies are also expected to push for easy access to utility poles, time limits to approve new cell tower construction applications, and pricing regulation for fiber lines needed to connect 5G infrastructure to backhaul networks.

Cell tower camouflage failure.

Cell tower camouflage failure.

On the issue of backhaul — the connection between a cell tower and the wireless carrier’s network, the FCC is planning a pro-regulatory “anchor pricing” approach to benefit wireless companies. Consumers can also relate to being overcharged for slow speed Internet access with little or no competition, but the FCC is only acting for the benefit of the wireless companies for now — the same companies that would undoubtedly complain loudly if anchor pricing was ever applied to them.

“Lack of competition doesn’t just hurt the deployment of wireless networks today, it threatens as well to delay the buildout of 5G networks with its demand for many, many more backhaul connections to many, many more antennae,” complained Wheeler. “Before the end of this year the Commission will take up a reform proposal – supported by the nation’s leading wireless carriers, save one – that will encourage innovation and investment in Business Data Services while ensuring that lack of competition in some places cannot be used to hold 5G hostage.”

While Wheeler’s goals are laudable, there are stunning examples of hypocrisy and self-interest from the wireless industry. Yet again, the industry is seeking regulatory protection from having to share spectrum with unlicensed users, existing licensees, or competitors.  No letting the “free market” decide here. Second, there are absolutely no assurances the wireless industry will deliver substantial home broadband competition. Verizon and AT&T will be effectively competing with themselves in areas where they already offer wired broadband. Is there a willingness from AT&T and Verizon to sell unlimited broadband over 5G networks or will customers be expected to pay “usage pack”-prices as high as $10 per gigabyte, which doesn’t include the monthly cost of the service itself. Offering customers unlimited 5G could cannibalize the massive profits earned selling data plans to wireless customers.

Cactus or cell tower

Cactus or cell tower

Upgrading to 5G service will be expensive and take years to reach many neighborhoods. Verizon’s chief financial officer believes 5G wireless will be more cost-effective to deploy than its FiOS fiber to the home network, but considering Verizon largely ended its deployment of FiOS several years ago and has allowed its DSL customers to languish just as long, 5G will need to be far more profitable to stimulate Verizon’s interest in spending tens of billions on 5G infrastructure. It does not seem likely the result will be $25/month unlimited, fiber-like fast, Internet plans.

Although the mobile industry will argue its investment dollars should be reason enough to further deregulate and dis-empower local officials that oversee the placement of cellular infrastructure, it would be a tremendous mistake to allow wireless carriers to erect cell towers and small cells wherever they see fit. Most small cells aren’t much larger than a toaster and will probably fit easily on utility poles. But it will likely spark another wave of pole access controversies. The aesthetics of traditional cell tower placement, especially in historical districts, parks, and suburbs, almost always create controversy. The FCC should not tip the balance of authority for tower placement away from those that have to live with the results.

The mobile industry doesn’t make investments for free, and before we reward them for investing in their networks, let’s recall the United States pays some of the highest mobile service prices in the world. The industry argues what you get in return for that $100+ wireless bill is better than ever, an argument similarly used by the cable industry to justify charging $80 a month for hundreds of channels you don’t watch or want. Therefore, incentives offered to the wireless industry should be tied to permanent pro-consumer commitments, such as unlimited 5G broadband, better rural coverage, and the power to unbundle current wireless packages and ditch services like unlimited texting many customers don’t need. Otherwise, it’s just another one-sided corporate welfare plan we can’t afford.

Verizon: Forget About FiOS, We’re Moving to a Broadband Wireless World

Who needs FiOS when you can get 5G wireless service with a data plan?

Who needs FiOS when you can get 5G wireless service with a data plan?

Fran Shammo has a message for Verizon customers and investors: fiber optic broadband is so… yesterday. Your millennial kids aren’t interested in gigabit speed, unlimited use Internet in the home. They want to watch most of their content on a smartphone and spend more on usage-capped wireless plans.

Shammo is Verizon’s money man – the chief financial officer and prognosticator of the great Internet future.

Like his boss, CEO Lowell McAdam, Frammo has his feet firmly planted in the direction of Verizon Wireless, the phone company’s top moneymaker. If one ever wondered why Verizon Communications has let FiOS expansion wither on the vine, Mr. McAdam and Mr. Shammo would be the two to speak with.

This week, Shammo doubled down on his pro-wireless rhetoric while attending the Bank of America Merrill Lynch 2016 Media, Communications & Entertainment Conference — one of many regular gathering spots for Wall Street analysts and investors. He left little doubt about the direction Verizon was headed in.

Shammo

Shammo

“As we look at the world if you will, and we look at our ecosystem, […] the world is moving to a broadband wireless world,” Shammo told the audience. “Now, I am really – when I say world, I am really talking the U.S., right. So, but I do think the world is moving to a wireless world.”

In Shammo’s view, the vast majority of people want to consume content, including entertainment, over a 4G LTE (or future 5G) wireless network on a portable device tied to a data plan. Shammo predicted wireless usage will surpass DSL, cable broadband, and even FiOS consumption in 3-5 years. If he’s right, that means a mountain of money for Verizon and its investors, as consumers will easily have to spend over $100 a month just on a data plan sufficient to cope with Shammo’s predicted usage curve. In fact, your future Verizon Wireless bill will likely rival what you pay for cable television, broadband, and phone service together.

Millennials don’t want fiber, they want wireless data plans

Shammo argued millennials are driving the transition to wireless, claiming they already watch most of their entertainment over smartphones and tablets, not home broadband or linear TV. His view is the rest of us are soon to follow. Shammo claims those under 30 are turning down cable television and disconnecting their home broadband service because they prefer wireless. Others wonder if it is more a matter of being able to afford both. A 2013 survey by Pew data found 84% of households making more than $54,000 have broadband. That number drops to 54% when annual household incomes are lower than $30,000 per year. But those income-challenged millennials don’t always forego Internet access — some rely on their wireless smartphone to access online content instead.

A microcell

A microcell

Verizon Wireless may be banking on the same kind of “hard choice” many made about their landline service. Pay for a landline and a mobile phone, or just keep mobile and disconnect the home phone to save money. Usage growth curves may soon force a choice about increasing your data plan or keeping broadband service at home. Shammo is betting most need Verizon Wireless more.

Verizon FiOS is really about network densification of our 4G LTE network

Shammo continued to frame its FiOS network as “east coast-centric” and almost a piece of nostalgia. The recent decision to expand FiOS in Boston is not based on a renewed belief in the future of fiber, Shammo admitted, it is being done primarily to lay the infrastructure needed to densify Verizon’s existing LTE wireless network in metro Boston to better manage increased wireless usage. Shammo’s spending priorities couldn’t be clearer.

“Obviously, we said, we would build up Boston now, because it makes sense from a LTE perspective,” Shammo said. “We can spend $300 million over the next three years to make that more palatable to expand FIOS. So we will continue to expand that broadband connection via fiber where it makes financial sense for us.”

verizon 5gIn other words, it is much easier to justify capital expenses of $300 million on network expansion to Wall Street if you explain it’s primarily for the high-profit wireless side of the business, not to give customers an alternative to Time Warner Cable or Comcast. FiOS powers cell sites as well as much smaller microcells and short-distance antennas designed to manage usage in high traffic neighborhoods.

Shammo also believes Verizon must not just be a ‘dumb wireless’ connection. Controlling and distributing content is also critically important, and Shammo is still a big believer in Verizon’s ho-hum GO90 platform, which compared to Hulu and Netflix couldn’t draw flies.

Even Verizon CEO McAdam admitted a few weeks ago at another Wall Street conference GO90 was “a little bit overhyped.” Most of GO90’s content library is mostly short video clips targeted at millennials with short attention spans. The downside of making that your target audience is the rumor many who sampled the service early on have already forgotten about it and moved on.

Forget about congested home and on-the-go Wi-Fi and expensive fiber optics. Verizon will sell you 5G wireless (with a data plan) for everywhere.

Shammo believes the future isn’t good for Wi-Fi in the home and on-the-go. As data demands increase, he believes Wi-Fi will become slow and overcongested.

“There is a quality of service with our network that you can’t get with others,” Shammo said. “I mean, most people in this room would realize that when Wi-Fi gets clogged, quality of service goes significantly down. It’s an unmanaged network. You can’t manage that.”

Instead, Verizon will eventually deploy 5G wireless instead of FiOS in many areas without fiber optic service today. Frammo said 5G would cost Verizon a lot less than fiber, “because there is no labor to dig up your front lawn, lay in fiber, or be able to fix something.”

Shammo doesn’t believe 5G wireless will replace 4G LTE wireless, however.

“LTE will be here for a very long time and be the predominant voice, text, data platform for mobile,” Shammo said.

So instead of unlimited fiber optic broadband, Verizon plans to sell home broadband customers something closer to Wi-Fi, except with a data allowance. It’s a return to fixed wireless service.

Verizon Wireless' existing fixed wireless service is heavily usage capped and no cheap.

Verizon Wireless’ existing fixed wireless service is heavily usage capped and not cheap.

Just a few short years ago, Verizon was looking to fixed wireless as a replacement for rural DSL and landline service. Now Shammo sees the economics as favorable to push a similar service on all of its customers, except those already fitted for FiOS. That changes the dynamics on usage as well, because Verizon Wireless ditched unlimited service several years ago except for a dwindling number of customer grandfathered in on its old unlimited plan.

Current 4G LTE fixed wireless customers can expect 5-12Mbps speeds with data plan options of $60 for 10GB, $90 for 20GB, or $120 for 30GB. The 5G service would be substantially faster than Verizon’s current fixed LTE wireless service, but the company’s philosophy favoring data caps for wireless services makes it likely customers will pay much higher prices for service, higher than Verizon charges for FiOS itself.

Verizon Workers Return to Jobs After Union Declares Victory

cwaThe Communications Workers of America just proved there is strength in numbers. After 39,000 network technicians and customer service representatives employed by Verizon Communications went on strike April 13 after nearly a year without a contract, Wall Street pondered the potential impact of $200 million in lost business for Verizon’s FiOS, phone and television services.

Reports from customers and union observers suggested Verizon’s temporary workforce of strike replacements proved inept and unsafe, putting increasing pressure on Verizon executives to respond to union demands to share a piece of Verizon’s vast and increasing profits.

The CWA and the International Brotherhood of Electrical Workers (IBEW) have also been some of the strongest advocates of pushing Verizon to continue service upgrades, particularly for its FiOS fiber to the home service. The unions believe the fiber upgrades not only benefit the workers who install and maintain the optical fiber network, but also help Verizon sell more products and services to customers who would love an alternative to their local cable company. Although Verizon FiOS has a substantial presence in major Eastern Seaboard cities, vast areas of Verizon territory are still dependent on its aging copper wire networks that can handle little more than basic landline service and slow speed DSL.

The seven week strike was the largest and longest strike action in the United States since 2011, and attracted the attention of the Obama Administration and the two Democratic candidates for president. It was also one of the most effective, from the union’s point of view.

Verizon workers have been on strike since April 13.

Verizon workers have been on strike since April 13.

Verizon executives eventually agreed to ‘share the wealth’ with workers, offering to hire 1,400 new permanent employees and pay raises just above 10 percent. It was a long journey for the workers and the unions, which have fought for a new comprehensive agreement with the company for several years. The CWA last struck Verizon for two weeks after negotiations deadlocked in 2011. Their latest contract ended last August, leading the union to begin several months of “informational picketing,” which effectively meant workers visibly protested Verizon’s policies towards its employees but stayed on the job while doing so.

Conservative groups attacked the unions and defended Verizon officials in editorials and columns. Billionaire Steve Forbes called Verizon employees “bamboozled” and greedy. Unless workers capitulated to Verizon executives’ wise and realistic demands, “Big Labor” would reduce Verizon’s tech revolution to something that “looks more like Detroit than Silicon Valley.” Forbes had nothing to say about Verizon’s explosive growth in compensation and bonus packages for the company’s top executives, or its increased debt load from buying out Vodafone, its former wireless partner, or its generous dividend payouts and share buybacks to benefit shareholders.

Did Verizon Capitulate Because it Intends to Sell Off its Wireline Networks?

Is Verizon planning on selling off its wireline networks?

Is Verizon planning on selling off its wireline networks?

Some on Wall Street were visibly annoyed that Verizon capitulated. Some analysts predicted it was the beginning of the end of Verizon remaining in the wired networks business.

“They needed to end the strike and they bit the bullet,” said Roger Entner of Recon Analytics. He said he thinks the deal “reinforced their commitment to basically exiting [wireline], the least profitable, most problematic part of the business. [The new contract] gives Verizon four years basically to get rid of the unit. Let it be somebody else’s problem.”

That somebody else is likely Frontier Communications. Stop the Cap! has predicted for more than a year our expectation Verizon Communications will continue to gradually sell off its wired service areas, starting with those inland regions not FiOS-enabled, to Frontier as that smaller company’s capacity to borrow money to finance transactions allows. Frontier has a strong interest in staying in the wireline business, and is acknowledged to have stable and friendly relations with its unionized workforce, including former Verizon workers.

Jim Patterson, CEO of Patterson Advisory Group, believes Verizon’s recent investments in fiber optics signals it does intend to stay in the wireline business. But there is a careful line to be drawn between wireline investments in services like FiOS and those made to support its much more profitable wireless unit, Verizon Wireless.

Bruce Kushnick, executive director of New Networks Institute, is increasingly skeptical about Verizon’s FiOS spending priorities.

Shammo

Shammo

“According to the NY Attorney General, about 75% of Verizon NY’s wireline utility budget has been diverted to fund the construction of fiber optic lines that are used by Verizon Wireless’s cell site facilities and FiOS cable TV,” Kushnick wrote last week in a Huffington Post article that questions Verizon’s announced investments in wiring Boston with fiber optics for FiOS. “On the 1st Quarter 2016 Verizon earnings call, [chief financial officer Fran] Shammo said that the build out is for another Verizon company – Verizon Wireless—and it is going to be paid for by the wireline, state utility— Verizon Massachusetts; i.e., it is diverting the wireline construction budgets to do another company’s build out of fiber, to be used for wireless services.”

If Kushnick is right, Verizon may not care whether the service area(s) it sells are well-fibered or not. The fact Verizon recently sold FiOS-enabled service areas in Texas, Florida, and California to Frontier Communications may bolster Kushnick’s case. Shammo’s statements to Wall Street suggest Verizon is primarily attracted to investing in areas where it needs to improve its wireless service, not its landline, broadband, and television services, delivered over FiOS fiber optics.

“We’ll take one city at a time,” Shammo said on the same conference call. “Obviously we still don’t have Alexandria (Virginia) built out or Baltimore. So if we get to a position where we believe we’re going to need to invest in [wireless network/cell] densification in those cities, then that’s an opportunity for us to take a look at it. But at this time we’re concentrating on Boston.”

Unions Can Make a Big Difference for Workers

Nobody believes individual workers could have negotiated the kind of salary and benefits package the CWA and IBEW won for their organized workforces. The New York Daily News heralded the end of the strike as “score one for the middle class — and for the importance of collective bargaining.”

As wages continue to stagnate for most Americans, union supporters call organized labor the last bulwark against a global wage race to the bottom for the middle class. Challenged by cheap labor overseas, increasing health care costs, and government policies some claim only promote accelerating wealth for about 1% of the population, the CWA’s victory forced Verizon to share some of its profits with the workers that helped make those profits possible.

Share the wealth

Share the wealth

“Executives get performance bonuses, stock awards, and retention bonuses for doing a good job, so why shouldn’t we?” argued one picketer outside of a Wall Street event featuring a Verizon executive.

Verizon’s last “final offer” before capitulating was a 6.5% salary hike and little, if any, future job security. Now Verizon will have to hire additional permanent call center workers instead of outsourcing that work to Asian-based call centers. The unions also won other concessions that reduce compulsory relocation to other cities, canceled planned pension and disability insurance cuts, and the CWA got its first contract for Verizon’s previously non-unionized wireless retail force.

After Waiting Forever, Boston is Finally Getting Verizon FiOS

verizon bostonThe long wait for fiber optic broadband in the city of Boston is finally over.

In a surprise announcement with Boston Mayor Martin J. Walsh and Verizon officials, Verizon announced it will commit to at least $300 million in investments over the next six years to bring fiber to the home service to residents of the metro area.

Construction of the fiber-optic network will be completed on a neighborhood-by-neighborhood basis according to customer demand. Initially, the project will begin in Dorchester, West Roxbury and the Dudley Square neighborhood of Roxbury in 2016, followed by Hyde Park, Mattapan, and other areas of Roxbury and Jamaica Plain. The city has also agreed to provide an expedited permitting process to encourage the project.

“Boston is moving faster than our current infrastructure can support, and a modern fiber-optic communications platform will make us a next-level city,” Walsh said in a statement.

“This transformation isn’t just about advanced new fiber-optic technology — it’s about the innovative services this platform will allow people to create and use, today and in the future,” Verizon Wireline Network president Bob Mudge said in a statement.

Bringing FiOS inside the city of Boston will challenge the de facto monopoly Comcast had held for years. The only alternative most residents have is Verizon DSL.

The dramatic turnaround came six months after Verizon adamantly told the Boston City Council Verizon FiOS expansion was dead. Verizon announced it would stop FiOS expansion in 2010 to concentrate on its existing FiOS commitments and better marketing the service to attract more customers.

The sudden end to FiOS expansion six years ago caught many cities by surprise. As a result, in several areas, the fiber service is only available in select suburbs and not city centers.

Verizon’s unions have also pushed for further FiOS expansion, but today’s announcement is expected to have no impact on plans by the Communications Workers of America and the International Brotherhood of Electrical Workers to strike Verizon starting early Wednesday morning.

The partnership also covers Verizon Wireless and its plans to attach wireless equipment to city street lights and utility poles without a lengthy permitting process.

Verizon was also likely offered a much easier time securing a license to offer cable television service, a stumbling block Verizon has experienced in several large cities.

Echoing Google Fiber, Verizon will try to win itself some free marketing and buzz by giving residents a chance to compete to see what neighborhoods get FiOS first. A free online registration process will be used to assess demand and help Verizon prioritize its fiber-optic network construction schedule.

Verizon will also support digital initiatives for the income-challenged, including a $100,000 Digital Equity contribution to the city, offered to support a mobile hotspot lending program at the Boston Public Library enabling Internet access to families on an as-needed basis.

Boston neighborhoods marked "A" will be upgraded to FiOS first, followed by "B" and so on. The upgrade effort is expected to take at least six years.

Boston neighborhoods marked “A” will be upgraded to FiOS first, followed by “B” and so on. The upgrade effort is expected to take at least six years.

Verizon Workers Set to Strike Company Starting Wednesday

Phillip Dampier April 11, 2016 Consumer News, Verizon, Video 1 Comment

verizon strikeAfter ten months of informational picketing and on-the-job protests for a new contract agreement, nearly 40,000 Verizon workers from Massachusetts to Virginia will go on strike starting at 6:00am Wednesday, April 13 if a settlement cannot be reached.

The Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) argue Verizon has dropped the ball on customers and employees, refusing to negotiate in good faith and not investing in better broadband and phone service for millions of its customers.

The two unions are among the strongest proponents of forcing Verizon to further expand its FiOS fiber-to-the-home service, which has been effectively on hold for several years as the company pours resources into its vastly more profitable wireless division – Verizon Wireless.

In addition to refusing further upgrades, unions accuse Verizon of gutting job protection, outsourcing an increasing amount of work, freezing pensions, closing call centers, and offshoring jobs to Mexico and the Philippines. While customers endure months-long phone outages and poor DSL broadband service Verizon has only grudgingly improved, the company made $39 billion in profits over the last three years, and $1.8 billion in profits over the first three months of this year. But it won’t spend the money on expanding FiOS or its workers.

Trainor

Trainor

“The company’s greed is disgusting. [CEO] Lowell McAdam made $18 million last year—more than 200 times the compensation of the average Verizon employee,” the CWA said in a statement. “Verizon’s top five executives made $233 million over the last five years. Last year alone, Verizon paid out $13.5 billion in dividends and stock buybacks to shareholders. But they claim they can’t afford a fair contract.”

The union says Verizon’s priorities are all wrong.

“It’s not just workers who are getting screwed,” the CWA wrote. “Verizon has $35 billion to invest in the failing internet company, Yahoo, but refuses to maintain its copper network, let alone build FiOS in underserved communities across the region. And even where it’s legally committed to building FiOS out for every customer, Verizon refuses to hire enough workers to get the job done right or on time.”

“We’re standing up for working families and standing up to Verizon’s corporate greed,” said CWA District 1 vice president Dennis Trainor. “If a hugely profitable corporation like Verizon can destroy the good family supporting jobs of highly skilled workers, then no worker in America will be safe from this corporate race to the bottom.”

Members of CWA District 1/Local 13500.

Members of CWA District 1/Local 13500.

Democratic presidential candidate Bernie Sanders has been a close ally of the CWA and has supported the union’s fight with Verizon. The CWA has returned the favor, encouraging the Vermont senator to stay in the race against Hillary Clinton.

Verizon workers complain they are being treated like servants by the company.

“Verizon is already turning people’s lives upside down by sending us hundreds of miles from home for weeks at a time, and now they want to make it even worse,” said Dan Hylton, a technician and CWA member in Roanoke, Va., who’s been with Verizon for 20 years. “Technicians on our team have always been happy to volunteer after natural disasters when our customers needed help, but if I was forced away from home for two months, I have no idea what my wife would do. She had back surgery last year, and she needs my help. I just want to do a good job, be there for my family, and have a decent life.”

A strike could have a significant effect on service calls and maintenance of Verizon’s infrastructure, particularly its deteriorating copper wire network still in service across much of its territory outside of the largest cities in the northeast and mid-Atlantic region. Particularly vulnerable areas include upstate New York, Maryland, suburban and rural Pennsylvania, southern New Jersey and western Virginia.

Verizon recently completed a sale of its landline service areas in Florida, California, and Texas to Frontier Communications, and these three states will not be affected by a walkout.

The CWA released this ad depicting the income disparity between average Verizon workers and its CEO. (30 seconds)

Big Headaches for Frontier Takeover of Verizon Landlines/DSL/FiOS in Texas, Florida, and California

As of late Monday afternoon, Downdetector.com still shows widespread outages for Frontier customers in North Texas, western Florida and parts of California.

As of late Monday afternoon, Downdetector.com still shows widespread outages for Frontier customers in North Texas, western Florida and parts of California.

Despite promises this past weekend’s transition from Verizon Communications to Frontier Communications would result in little more than “a logo change,” countless customers in the affected states of Florida, Texas, and California reported long service outages, website problems, and long holds waiting to talk to customer service representatives about when service would be back.

The outages were most widespread on Friday morning, April 1, when many subscribers awoke to discover they no longer had phone, television, or broadband service. A blitz on social media directed at Frontier quickly followed on Facebook and Twitter, many summing up their first experience with Frontier to be like “dealing with a third-rate phone company.”

Louise Thompson called the transition “a total fiasco” and some businesses lost thousands of dollars on Friday alone. The “Happy Grasshopper” was one of them, after losing Internet and phone service.

“We have 20 employees who can’t get any work done here today,” said owner Dan Stewart.

Gerard Donelan, a real estate appraiser who works from home in South Tampa, was still without service Friday afternoon. “I talked to customer service about 10:30. … He told me service was down in the Tampa Bay area, and he didn’t know when it was coming back, and there was nothing he could do,” Donelan told the Tampa Tribune. “What a joke. These guys were telling us just yesterday how seamless this was going to be. My next phone call is to Bright House.”

welcome frontierThe popular Zudar’s sandwich shop downtown was still unable to swipe credit cards or take phone or Internet orders at mid-afternoon. “It’s having a terrible effect on business,” said owner Eric Weinstein. “It’s absolutely an epic failure on their part. An amazing lack of customer service and communication.”

frontier texasThe City of Plano (Tex.) lost its website in the transition. Frontier shared its failure with AT&T mobile customers in parts of Florida, who found cell service not working because Frontier also took control of fiber links connecting many of AT&T’s cell towers to AT&T’s network. Many of those were down too.

“During the early morning of April 1, 2016, a technical issue occurred during the integration of the systems Frontier acquired from Verizon that impacted service to some enterprise and carrier customers in Florida, Texas and California.  As of 9:30 am eastern, the issue was resolved,” the company’s statement said.  “In addition, an unrelated fiber cut occurred that impacted customers in the Tampa market.”

Across all three states, Frontier officials hurried to downplay the impact of the service outages, which are continuing to this day for some customers. In some statements, Frontier claimed only about 500 business customers lost service, and there were no widespread problems. But many of the 3.7 million customers in Texas, Florida and California enduring the transition say those outages and problems affect residential accounts.

“There is ‘absolutely nothing widespread going on?'” asked Eric Petty, an adjunct professor at St. Petersburg College. “What a bunch of liars. How stupid do they think their customers are?”

One of the biggest problems customers are encountering is the procedure to transition their online access from Verizon to Frontier. To begin that process, customers need a new Frontier ID, but that is easier said than done if you lack landline service. As part of the registration process, customers need to enter the account PIN number usually displayed on landline bills, but often missing from broadband-only service bills.

frontier floridaLee Allen of Dallas was one of many frustrated customers. He spent an hour trying to manage the Frontier MyAccount registration process and when he tried to sync his Verizon and Frontier account together, it was a flop.

Two calls to Frontier customer service and still no joy reports the Dallas Morning News.

“I’m in limbo,” he said Friday afternoon.”I’m self-employed and work from home. They are supposed to be a technology company. They should have been ready.”

Frontier says they are aware of this problem and are working on a solution.

In Los Gatos, Calif., it was an Internet-free weekend for most of the city’s former Verizon Internet customers, who also lost service on Friday. As of Sunday morning, they still didn’t have service, according to the San Jose Mercury News:

Los Gatos customers were assured the transition on April 1 would be smooth with no interruption to service. But that hasn’t been the case, said Beau Graeber, Fenesy’s neighbor who’s helping him contact the company and reconfigure his Internet.

“It’s a little frustrating,” Graeber said, adding that Verizon — now Frontier — is the only option for Internet and telephone service in Los Gatos, outside of cable or satellite providers. “For Ralph and some of my other neighbors, it’s a terrible inconvenience.”

frontier californiaConcerned customers with bills due this week are finding they don’t have enough access on Frontier’s website to arrange payment of their bill. Frontier says not to worry – “Until this process is completed on April 8th, you will only have very limited account access, even with a Frontier ID,” Frontier reports. “You can still use your Frontier ID to download the Frontier TV App, HBO GO, Watch ESPN, Disney and other popular entertainment Apps. If your bill is due during this period, rest assured that all late fees will be waived.”

Beyond total service outages and interruptions, other customers are reporting various problems with Frontier’s version of FiOS TV:

  • Frontier began migrating their 100,000 title On Demand library to FiOS on April 2. The process was supposed to be complete Saturday afternoon, but some customers are still having problems. Frontier: “We understand how important Video on Demand is to our customers. We apologize for the inconvenience and are working diligently to ensure the content is available as soon as possible. If you get a message that the service is ‘temporarily unavailable,’ you should reboot your set-top box to refresh the VOD service. To reboot, unplug your set-top box, wait at least 10 seconds, and then plug it back in. Please note, a reboot can take up to 3 minutes as the system refreshes your settings. If you continue to experience any issues accessing VOD, please call our Tech Support team at 1-877-600-1511.”
  • The Nickelodeon Jr. FiOS TV Widget/App was retired by Nickelodeon on March 31 prior to the transition to Frontier. It is, therefore, not available. Customers can still watch Nick Jr. on their home television. Customers can also access Nick Jr.’s programming via the web, at www.nickjr.com, or through Nickelodeon’s mobile apps for iOS and Android.
  • When searching for a Video on Demand title with the FiOS TV remote, customers may notice due to the transition from Verizon to Frontier, many of the movies and TV shows are not appearing in either “New Releases” or “Collections”. However, they can be found by scrolling down to “By Title” and then selecting “All” in order to find your choice. You can also search for your VOD by selecting the “B” button on your FiOS TV remote.

frontier new logoFrontier promised regulators things would go better for new Frontier customers after the company botched a similar transfer of AT&T customers in Connecticut that went so poorly, the company had to offer $50 service credits to affected customers.

“We have lessons to learn,” Frontier spokeswoman Kathleen Abernathy told Connecticut regulators at the time.

“They didn’t learn a thing,” said Stan Rogers, a transitioned Frontier customer outside of Allen, Tex. “I was there for the Connecticut switchover two months before I moved down here and now I get to experience the same thing all over again. To give you an idea of where Frontier is on the technology curve, they have sent me information about how to transition my Verizon e-mail address to AOL. Hello!”

North Texas resident Larry Allen agrees, “I didn’t think anything could drive me back to Comcast, but Frontier may do it. TV issues, email issues, Frontier can’t process my information to set up an account, horrible/outdated selection of movies on demand, [and] Frontier [is] not responding to emails for assistance.”

WTSP in Tampa reports Florida area customers didn’t get the easy transition from Verizon to Frontier they were promised. (2:22)

KTVT in Dallas reports Frontier service outages created headaches for customers across North Texas. (2:08)

Verizon Takes N.Y. Landline Customers to the Cleaners: Finds $1,500

Phillip Dampier March 28, 2016 Consumer News, Public Policy & Gov't, Verizon, Video No Comments

ShakedownVerizon’s loyal landline customers are subsidizing corporate expenses and lavish spending on Verizon Wireless, the company’s eponymous mobile service, while their home phone service is going to pot.

Bruce Kushnick from New Networks Institute knows Verizon’s tricks of the trade. He reads tariff filings and arcane Securities & Exchange Commission corporate disclosures for fun. He’s been building a strong case that Verizon has used the revenue it earns from regulated landline telephone service to help finance Verizon’s FiOS fiber network and the company’s highly profitable wireless service.

Kushnick tells the New York Post at least two million New Yorkers with (P)lain (O)ld (T)elephone (S)ervice were overcharged $1,000-$1,500 while Verizon allowed its copper wire network to fall into disrepair. Kushnick figures Verizon owes billions of dollars that should have been spent on its POTS network that provides dial tones to seniors and low-income customers that cannot afford smartphones and laptops.

Verizon’s copper network should have been paid off years ago, argues Kushnick, resulting in dramatically less expensive phone service. What wasn’t paid off has been “written off” by Verizon for some time, Kushnick claims, and Verizon customers should only be paying $10-20 a month for basic phone service. But they pay far more than that.

To ensure a proper rate of return, New York State’s Public Service Commission sets Verizon’s basic service charge of regulated phone service downstate at $23 a month. Deregulation has allowed Verizon to charge whatever it likes for everything else, starting with passing along taxes and other various fees that raise the bill to over $30. Customers with calling plans to minimize long distance charges routinely pay over $60 a month.

Unregulated calling features like call waiting, call forwarding, and three-way calling don’t come cheap either, especially if customers choose them a-la-carte. A two-service package of call waiting and call forwarding costs Verizon 2-3¢ per month, but you pay $7.95. Other add-on fees apply for dubious services like “home wiring maintenance” which protects you if the phone lines installed in your home during the Eisenhower Administration happen to suddenly fail (unlikely).

verizonIn contrast, Time Warner Cable has sold its customers phone service with unlimited local and long distance calling (including free calls to the European Community, Canada, and Mexico) with a bundle of multiple phone features for just $10 a month. That, and the ubiquitous cell phone, may explain why about 11 million New Yorkers disconnected landline service between 2000-2016. There are about two million remaining customers across the state.

New York officials are investigating whether Verizon has allowed its landline network to deteriorate along the way. Anecdotal news reports suggests it might be the case. One apartment building in Harlem lost phone and DSL service for seven months. Another outage put senior citizens at risk in Queens for weeks.

“They don’t care if we live or die,” one tenant of a senior living center told WABC-TV.

Verizon claims Kushnick’s claims are ridiculous.

“There is absolutely no factual basis for his allegations,” the company said.

WABC’s “7 On Your Side” consumer reporter Nina Pineda had to intervene to get Verizon to repair phone service for a senior living center that lasted more than a month. (2:50)

Frontier Launches ‘Vantage’ Brand Bundles of TV, Broadband, and Phone

Phillip Dampier March 24, 2016 Broadband Speed, Competition, Consumer News, Frontier, Video 6 Comments

vantage tvFrontier Communications customers lucky enough to live in an upgraded or recently acquired service area may soon be getting Frontier Vantage, a new suite of enhanced products including a multichannel TV package, faster broadband, and phone service.

Frontier Vantage started life in Frontier’s fiber to the home market trial in Durham, N.C., and is set to accompany, not replace, the Frontier FiOS and U-verse brands, starting in a wide rollout in Connecticut. Much like the XFINITY brand today co-exists with Comcast, Frontier intends its new Vantage brand to signify a premium experience. It is part of Frontier’s larger plan to introduce IPTV service in more than 40 of its larger markets across the country over the next four years, with an even larger presence in former Verizon service areas in Texas, Florida, and California.

In all, Frontier expects to offer the enhanced service to more than eight million of its customers after upgrades are finished.

Frontier’s biggest challenge will be getting Vantage service to customers in its legacy service areas, where its reliance on ADSL and its slow broadband speeds are often inadequate for a shared broadband and IPTV platform. In upgraded service areas, other challenges are appearing, including firm rejections of Vantage in multi-dwelling units where complex owners have signed multi-year exclusivity contracts with cable operators.

frontier new logo“As far as Durham goes, some of the initial learnings are that we were locked out in many cases of securing long-term contracts with some of the apartments and condominium owners in the market because we didn’t have a video product other than a mini head-end that was using satellite, which was not the preferred solution,” said Frontier CEO Dan McCarthy in February. “In the first several weeks of introducing the product, we’ve already secured new contracts that would be substantial units right out of the gate. Our door-to-door sales process has been very successful so far, but we’re in the early days — it’s only been really about a month or so.”

McKenney

McKenney

Much of the door knocking is taking place in Connecticut, where Vantage started replacing the older Frontier TV/U-verse platform on set-top boxes starting last Monday. Former AT&T customers have transitioned through three brand changes. Originally served by AT&T U-verse, Frontier’s acquisition of AT&T’s wireline facilities in the state introduced customers to Frontier U-verse/FrontierTV. As of this week, it is now VantageTV.

The new firmware introduces a Netflix “on-demand channel” (Ch. 800 in Connecticut) where subscribers can access Netflix content without having to use separate hardware like Chromecast or Roku. This is the first of several “apps” that Frontier will offer, allowing customers to reach Facebook, Twitter, home shopping, weather, and games over their set-top box.

Frontier also plans a ‘start-over’ feature that allows viewers to start at the beginning of a show already in progress, an enhanced on-screen program guide and easier access to a list of upcoming shows. A video-on-demand library will also be on offer, and Frontier claims it will include over 100,000 movies and TV shows.

Customers will also get a whole-home DVR that can record four shows at once on a 1TB hard drive. A limited number of markets will also be offered 4k video service.

Accompanying the TV package will be phone service and Internet access at speeds starting as 12Mbps up to 1,000Mbps, depending on the market and available infrastructure.

“This is the perfect time for Frontier to launch our premier products,” said Cecilia K. McKenney, executive vice president and chief customer officer and head of corporate marketing at Frontier. “‘Vantage’ conveys the ultimate customer experience and represents products and services that deliver value, solutions, and choice.”

Frontier introduces Vantage TV to customers in Connecticut formerly served by AT&T U-verse. This introductory video shows Frontier’s new set-top box firmware includes direct support for Netflix. (2:16)

Verizon: Ignore Our Adamant Denials of Not Being Interested in Selling Our Wired Networks

carForSaleDespite denials Verizon Communications was interested in selling off more of its wireline network to companies like Frontier Communications, the company’s chief financial officer reminded investors Verizon is willing to sell just about anything if it will return value to its shareholders.

In September, rumors Verizon planned to sell more of its wireline network where the company has not invested in widespread FiOS fiber-to-the-home expansion grew loud enough to draw a response from Verizon CEO Lowell McAdam at the Goldman Sachs 24th annual Communicopia Conference.

“When people ask me, and I know there’s some speculation that we might be interested in selling the wireline properties, I don’t see it in the near-term,” McAdam said.

Today, Shammo seemed to clarify McAdam’s pessimistic attitude about another Verizon landline sell off in the near future.

“We’re extremely happy with the asset portfolio we have right now, but as we always say we continue to look at all things,” Shammo said. “Just like the towers, we said we would not sell the towers and then we got to a great financial position and we sold our towers. If something makes sense [and] we can return value to our shareholders and it’s not a strategic fit we’ll obviously look at that.”

Shammo

Shammo

For most of 2014, Verizon denied any interest in selling its portfolio of company-owned wireless cell towers. In February 2015 the company announced it would sell acquisition rights to most of its cell towers to American Tower Corporation for $5.056 billion in cash.

Some analysts believe the early indicators that suggest Verizon is ready to sell include its lack of upgrades in non-FiOS service areas and Verizon’s willingness to walk away from up to $144 million from the second phase of the FCC’s Connect America Fund to expand Internet access to more of Verizon’s rural landline customers.

Verizon’s decision to take a pass on broadband improvement funds infuriated four southern New Jersey counties that claim Verizon has neglected its copper network in the state. As a result of allegedly decreasing investment and interest by Verizon, customers in these areas do not get the same level of phone and broadband service that Verizon customers receive in the northern half of New Jersey.

More than a dozen communities have signed a joint petition sent to the Board of Public Utilities, New Jersey’s telecom regulator, insisting the BPU take whatever measures are needed to preserve the availability of telecommunications services in southern New Jersey. The towns also want the BPU to consider funding sources to help improve broadband service that public officials claim is woefully inadequate. Outside of Verizon FiOS service areas, Verizon offers customers traditional DSL service for Internet access.

Verizon-logoThe communities:

  • Atlantic County: Estell Manor and Weymouth Township.
  • Gloucester County: South Harrison Township.
  • Salem County: Alloway Township, Lower Alloways Creek, Mannington Township, Township of Pilesgrove, and Upper Pittsgrove Township.
  • Cumberland County: Commercial Township, Downe Township, Hopewell Township, Lawrence Township, Maurice River Township, City of Millville, Upper Deerfield Township, and Fairfield Township.

Officials claim Verizon has pushed its wireless alternatives to customers in the region, including its wireless landline replacement. But officials suggest Verizon’s wireless coverage and the quality of its service is not an adequate substitute for wireline service.

Verizon's Home Phone Connect base station

Verizon’s Home Phone Connect base station

Verizon has proposed decommissioning parts of its wireline network in rural service areas and substitute wireless service in the alternative. At issue are the costs to maintain a vast wireline network that reaches a dwindling number of customers. Verizon reminds regulators it has lost large numbers of residential landline customers who have switched to wireless service, making the costs to maintain service for a dwindling number of customers that much greater.

But for many communities, the focus is increasingly on broadband, especially in areas that receive little or no cable service. Telephone companies serving rural communities are surviving landline disconnects by providing broadband service.

For companies like Frontier Communications, CenturyLink, and Windstream, investments in providing broadband service are among their top spending priorities. At larger phone companies like Verizon and AT&T, highly profitable wireless divisions get the most attention and are top spending priorities.

Speaking this morning at the UBS 43rd Annual Global Media and Communications Conference, Shammo told investors Verizon will continue to allocate the majority of its capital allocation around Verizon Wireless to help densify its wireless network. Verizon, Shammo noted, plans further spending cuts for its wired networks next year as FiOS network buildouts start to taper off.

This will make expansion and improvement of Verizon DSL unlikely, and may put further cost pressure on maintaining Verizon’s wireline networks, which could further motivate a sale.

Verizon’s chief financial officer Fran Shammo is likely looking at three alternatives for the future:

  1. Increase investment in Verizon Communications to further expand FiOS fiber optics;
  2. Look at cost savings opportunities to improve the books at Verizon Communications, including decommissioning rural landline networks (if Verizon can win regulator approval);
  3. Consider selling Verizon’s non-core wireline assets in areas where the company has not made a substantial investment in FiOS and refocus attention on serving the dense corridor of customers along the Atlantic seaboard between Washington, D.C. and Boston.

The Stage Is Set to Kill Telco ADSL: Cable Operators Prepare for DOCSIS 3.1 Competitive Assault

docsis 30 31

Next year’s upgrade to DOCSIS 3.1 will support cable broadband speeds up to one gigabit shortly after introduction.

Telephone companies relying on traditional ADSL service to power their broadband offering will likely face a renewed competitive assault in 2016 that will further reduce their already-challenged market share in areas where cable companies compete.

Cable operators are hungry for profitable broadband customers and the best place to find new prospects is at the phone company, where DSL is still a common technology to deliver Internet access. But while cable Internet speeds have risen, significant DSL speed hikes have proven more modest in the residential market.

In 2016, the cable industry intends to poach some of the remaining price-sensitive holdouts still clinging to DSL with revised broadband offers promising more speed for the dollar.

Cable broadband has already proven itself a runaway success when matched against telephone company DSL service. Over the last year, Strategy Analytics found Comcast and Time Warner Cable alone signed up a combined 71 percent of the three million new broadband customers in the U.S.

“Cable operators continue to increase market share in U.S. broadband,” said Jason Blackwell, a director at Strategy Analytics. “Over the past twelve months, Comcast has accounted for 42 percent of new subscribers among the operators that we track.  Fiber growth is still strong, but the telco operators haven’t been able to shake off the losses of DSL subscribers.  In 2016, we expect to see a real battle in broadband, as cable operators begin to roll out DOCSIS 3.1 for even higher speed offers, placing additional pressure on telcos.”

That battle will come in the form of upgraded economy broadband plans, many arriving shortly after providers upgrade to the DOCSIS 3.1 cable broadband platform. Currently those plans offer speeds ranging from 2-6Mbps. Starting next year, customers can expect economy plan prices to stay generally comparable to DSL, with promises of faster and more consistent speeds. A source tells Stop the Cap! at least two significant cable operators are considering 10Mbps to be an appropriate entry-level broadband speed for 2016, in keeping with FCC chairman Thomas Wheeler’s dislike of Internet speeds below 10Mbps.

slowJust a few years earlier, most providers wouldn’t think of offering discounted 10Mbps service, fearing it would cannibalize revenue as customers downgraded to get lower priced service. Increasing demands on bandwidth from online video and multiple in-home users have gradually raised consumer expectations, and their need for speed.

Unfortunately for many phone companies that have neglected significant investment in their aging wireline networks, the costs to keep up with cable will become unmanageable unless investors are willing to tolerate significant growth in capital expenses to pay for network upgrades. Frontier Communications still claims most of their customers are satisfied with 6Mbps DSL, neglecting to mention many of those customers live in areas where cable competition (or faster service from Frontier) is not available.

Where competition does exist, it’s especially bad news for phone companies that still rely on DSL. Earlier this year, Frontier’s former CEO Maggie Wilderotter admitted Frontier’s share of the residential broadband market had dropped to less than 25% in 26 of the 27 states where it provides service. In Connecticut, the one state where Frontier was doing better, its acquired AT&T U-verse system has enabled the phone company to deliver broadband speeds up to 100Mbps. But even those speeds do not satisfy state officials who are seeking proposals from providers to build a gigabit fiber network in a public-private partnership.

DSL speed upgrades have been spotty and more modest.

DSL speed upgrades have been spotty and more modest.

Frontier’s recent experiments with fiber to the home service in a small part of Durham, N.C., and the unintentional revelation of a gigabit broadband inquiry page on Frontier’s website suggests the company may be exploring at least a limited rollout of gigabit fiber service in the state. But company officials have also repeatedly stressed in quarterly results conference calls there were no significant plans to embark on a major spending program to deliver major upgrades across their service areas.

Some phone companies may have little choice except to offer upgrades where cable operators are continuing to rob them of customers. In the northeast, where Frontier has a substantial presence, cable operators including Charter, Comcast and Time Warner Cable are committing to additional speed upgrades. Time Warner Cable’s current standard speed of 15Mbps will rise to 50-60Mbps in 2016, up to ten times faster than Frontier’s most popular “up to” 6Mbps DSL plan.

Most of the broadband customer gains won by Comcast and Time Warner Cable come as a result of DSL disconnects. AT&T said goodbye to 106,000 customers during the third quarter. Verizon managed to pick up 2,000 new subscribers overall, almost all signing up for FiOS fiber to the home service. No cable operator lost broadband market share, reported analyst firm Evercore. Leichtman Research offered additional insight, finding AT&T and Verizon were successful adding 305,000 U-verse and FiOS broadband customers, while losing 432,000 DSL customers during the same quarter.

The message to phone companies couldn’t be clearer: upgrade your networks or else.

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