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Finding The Truth About West Virginia’s Bad Broadband; Here’s How You Can Help

If advertised claims of lightning fast DSL internet don’t match reality, it never hurts to bring evidence to the table if you want to prove your state’s biggest telecom company is lying through its teeth.

West Virginia’s Broadband Council wants to understand just how awful broadband is in the state, despite glowing rhetoric from cable and phone companies that promise fast connections that rarely deliver to beleaguered broadband users. The Council has created its own Speed Test Portal for the state’s broadband users to test their internet speed. The results will also provide data about real world broadband performance to generate a new statewide broadband map that will clearly identify where broadband performs, where it doesn’t, and where it doesn’t exist.

“The speed test is really important,” Commerce Secretary Woody Thrasher said. “This is one of those things where before you know where you’re going to go, you have to know where you are. So we’re trying to identify what type of broadband service we have. That’s what the speed tests do for us. We want people to take the speed test, send it in and from there, we will create a map of where we are in the state of West Virginia and identify where our priorities should be. From that, we can identify where we are strong and where we are weak. We can identify where to prioritize areas to put funding and resources to generate broadband connectivity.”

The Council wants residents to test early, test often, and test on every computer they can find to make the data as meaningful as possible.

“With this information, the Broadband Council will work with local governments to help bring affordable broadband service to underserved and unserved areas of the state,” Council Chairman Robert Hinton said in a recent Department of Commerce news release.

One of the responsibilities of the Council is determining whether providers are delivering the speeds they advertise to state residents. West Virginia is ranked 48th worst out of the 50 states for the percentage of residents without access to broadband service. The state’s incumbent phone company, Frontier Communications, controls virtually all the state’s telephone lines. Its DSL service is not well regarded by customers and its poor performance led to a $150 million settlement with West Virginia’s Attorney General Patrick Morrisey in 2015 for deceptive claims about its DSL service.

Behind the scenes, the Broadband Council is also attempting to build an evidentiary record of “discrepancies between the service the incumbent has claimed to provide and the service the incumbent has actually provided.” If the Council can show Frontier is failing to meet its service requirements, it is hoping the FCC will open broadband funding to other providers in unserved and underserved areas in the state, some potentially offering fiber optic broadband. That would, they argue, be a better use of limited Connect America Fund resources than funding further expansion of Frontier’s DSL service.

In a filing with the FCC in response, Frontier said the Council’s solution is “misplaced and inappropriate.” It asked the FCC to reject the proposal and instead increase funding available to Frontier for rural broadband expansion in West Virginia. For Frontier, the metric that matters the most is that the company “well ahead of schedule” to meet the federal program’s requirements.

“Because Frontier is often alone in undertaking the challenge of providing any landline internet service to the most rural and remote areas in the state, Frontier is often the brunt of dissatisfaction, as expressed in the Council’s letter, with the available speeds and technologies in those areas,” Frontier said.

In October, Frontier waived away a demand to return $4.7 million in funds an inspector general claimed were the result of padded invoices with phony extra charges and improper reimbursements for “unreasonable and unallowable” fees.

In a letter to West Virginia Chief Technology Officer John Dunlap, Frontier made it clear that West Virginia taxpayers were effectively on the hook for the money, noting any funds the state might return to the federal government “are, of course, not recoverable from Frontier.”

Unfair Tax Policies Disadvantage New Fiber Competitors, Harm Broadband Expansion

Providers attempting to wire rural communities to offer broadband service or a competitive alternative to cable and phone companies face unfair tax and pole attachment fees that often give the advantage to existing companies and deter would-be competitors.

Those differences have a meaningful impact on rural broadband providers in states like New York, where wiring rural upstate communities is being made difficult by bureaucratic pole attachment fee policies and wide differences in property taxation that give an edge to existing cable giants like Charter Communications while hampering small start-ups with costly and confusing tax policies that slow down broadband rollouts.

The Watertown Daily Times recently published an in-depth special report on the broadband challenges impacting northern New York, where fast internet access has evaded some communities for more than two decades. That lack of access is becoming a critical problem for a growing number of employers who are now considering exiting those communities because companies like Verizon, Frontier Communications and Charter/Spectrum are refusing to provide 21st century broadband service in rural upstate communities.

One example is Tupper Lake Hardware in Tupper Lake, N.Y., which wanted to expand, but considered exiting the area instead after being stuck using satellite internet access because no phone or cable company offered broadband service in the area.

“It came to the point where if you are going to make a $1 million investment, we actually talked about this, we said ‘do we put our money into this place or do we just pick up and move?’” general manager Chris Dewyea told the newspaper. “It is real. It sounds dramatic, but that is the way it goes. The connectivity speed that we had with satellite internet was not good enough, so that is when we started on our journey to get high-speed here.”

Calling Verizon, Frontier, or Spectrum was fruitless, so the company picked up the phone and called… the Empire State Forest Products Association, a group that has tangled with internet connectivity problems in upstate New York before. The group pointed the company to Slic Network Solutions, owned by the independent Nicholville Telephone Company, which has spent the last several years slowly expanding the reach of its fiber optic network in the north country. Slic currently provides service to about 10,000 homes in small communities like Belmont, Lake Placid, Schroon Lake, and Titus Mountain.

Like many fiber overbuilders operating in New York, Slic has to plan its network expansion carefully, as it lacks the financial resources and staff of a company like Verizon or Charter. Slic’s fiber service is in very high demand, because the alternatives are almost always satellite internet access or appallingly slow DSL service from Verizon or Frontier, neither of which have shown much interest in delivering the FCC’s 25Mbps definition of broadband. Charter’s Spectrum service is available only in larger concentrated communities that can meet the cable company’s return on investment property density test. Many rural upstate communities don’t.

“In most of the places, there really was the option of satellite. Some places had DSL but it was usually pretty marginal,” said Kevin Lynch, vice president of technical operations & chief operations officer of Slic Network Solutions. “There are a few areas, but very limited, that might have had Spectrum.”

Slic is one of several small fiber providers operating in New York, each trying to cover territories larger phone and cable companies have ignored for years. Cooperation in commonplace among some companies operating in similar regional areas to keep construction and operating costs down. Some providers share their networks to extend their reach. Most target commercial or institutional users but will lease out their networks for residential providers. Some of the state’s middle mile fiber networks were built with economic stimulus money or through other grant or government programs. Others are privately funded. Many are underutilized but lack the funds to expand.

Westelcom, based in Watertown, counts Slic as one of its partners. Westelcom currently limits its business to commercial accounts in its six county service area, which includes Watertown, Malone, Clayton, Elizabethtown, Ticonderoga and Plattsburgh. But it is willing to provide wholesale access to third-party companies that want to serve residential customers.

One of the biggest and most surprising impediments to serving “last-mile” residential customers isn’t the cost of construction or the return on investment. It’s New York’s tax laws. Current tax policy requires fiber providers to pay taxes on the value of the infrastructure being used, regardless of revenue. At present, that tax rate can cost between $25,000 and $30,000 per fiber route mile. If it takes five miles of fiber to reach only a half-dozen homes, the provider would owe New York over $100,000 in taxes alone, making it impossible to recoup costs and drain the provider’s finances.

The National Conference of State Legislatures, a bi-partisan group, published Property Taxation on Communications Providers: A Primer for State Legislatures in 2015, outlining a legacy of inconsistent and often outdated state and local taxation policies across the United States that treat communications providers differently on issues like property tax. The group points out New York’s tax authorities treat cable and phone companies very differently than upstart fiber providers. Mobile phone companies are taxed differently as well:

The taxation of communications property varies widely in New York. There are several types of property taxes that are applied in varying ways to the communications sector. While New York does not generally tax tangible personal property, the state considers lines, wires, poles, electrical conductors, fiber optic equipment, and related equipment to be real property. Landline companies and cable companies are subject to a real property tax on “Special Franchise” property which is centrally administered and assessed using the reproduction cost method by the Office of Real Property Tax Services (ORPTS). The Special Franchise property tax applies to equipment located on public property. In addition, Nassau County and New York City have a “split roll” which  requires higher taxes on the “utility” class which includes landline telephone companies. Wireless companies and cable companies are assessed locally for their real property (land and buildings,  e.g., towers)

In plainer English, Lynch points out Slic is taxed about $465 per mile per year in St. Lawrence County, which is “significantly higher” than what cable companies like Charter pay, because they are taxed differently.

In the college town of Potsdam, Slic pays more than double the school and property taxes paid by Charter Communications, even though it serves fewer customers and earns much less. That disparity forces providers to target their networks in more dense areas like inside towns and villages, which means more customers per fiber route mile, reducing the bite of the tax man.

“Broadband infrastructure is considered real property, so it is taxed just like a house when it is in the right of way. So when we attach to these poles which are in the public right-of-way, we pay taxes on it and it is based on construction costs,” Lynch added. “There are a certain number of customers we have just to break even on those two operational costs and that does not include any of the other overhead and the content, the electronics and all that.”

After paying New York, Slic then faces the bureaucratic challenge of pole attachment permitting and fees. Every pole on which Slic attaches its fiber wiring is owned by someone else, typically utility companies like National Grid, Verizon, or Frontier. Some poles are jointly owned and maintained by the phone and electric company in the area. Fees and procedures vary in different parts of the state. There is generally a very costly pole attachment application fee and ongoing pole rental fees, which in this part of New York can run $400 a mile, per year.

Lynch said the costs of pole attachment fees alone can account for up to 40 percent of Slic’s expansion budget, and those initial fees can run between $10,000-14,000 per mile. This is why fiber overbuilders frequently decide on coverage areas based on customer commitments to sign up for service if it becomes available. This allows companies like Slic to secure the financing required to provision the service. But money alone doesn’t buy instant access.

“We apply to National Grid or whoever the pole owner is and say, ‘We would like to attach to these 30 poles on this road,’ and do a pole application and pay a fee,” Mr. Lynch explained to the newspaper. “They come out, they look at each pole and they determine if there is space on the pole, do they need to rearrange the electrical wires so they are in compliance with the electrical code, do they need to move down the phone lines. A lot of times these poles are jointly owned. It will be National Grid and Verizon, so they have to coordinate and then there might be a section that has Spectrum on it, so you have three or four companies that have to coordinate this effort.”

The state adds its own layer of bureaucracy with different Department of Transportation regions, regional economic regions, and Department of Environmental Conservation regions, each with its own rules and procedures. It is common for fiber projects to cross from one region into another, requiring additional paperwork and likely delays. If a project has to cross into the Adirondack Park, the rules and permits required to manage that are byzantine.

The result of all this is usually a significant delay in getting started, but once the paperwork is complete and fees are paid, the work can go faster than many realize.

“In these areas where we are constructing right now, Schroon Lake and Belmont and Lyon Mountain, we are building three to five miles of fiber per week. Our next group of projects that has been funded by New York state is 300-plus miles of fiber,” Lynch said. “And when I say three to five miles per week, that is per area.”

Fiber providers would like to see tax fairness and a lot less bureaucracy. The rules in states like New York may eventually leave fiber to the home service at a distinct disadvantage, because wireless networks don’t face pole attachment complications and pay lower taxes because their real property is generally a cell tower and the fiber line that connects to it. As it stands, some internet providers may gravitate towards wireless internet solutions in rural areas instead of fiber just to avoid excessive taxes and the pole attachment bureaucracy. Most homes and businesses prefer fiber optic service when given a choice, but without some changes to tax laws and a more centralized, less bureaucratic approach to pole attachments, fiber optics may never make financial sense in rural upstate New York.

Frontier: Nothing to See Here; 3rd Quarter Results Cause Share Price to Plummet to New Low

Phillip Dampier November 1, 2017 Broadband Speed, Competition, Consumer News, Frontier No Comments

Frontier’s stock has reached the lowest level of the year after another disappointing earnings report.

Frontier Communications turned in lackluster numbers for the third quarter of 2017, resulting in a wide selloff of Frontier’s stock, driving it to the lowest level it has seen in a year.

Investors are reacting to news the company missed earnings estimates once again, and many are losing confidence in Frontier’s CEO Daniel McCarthy, who has promised better results for more than a year. Frontier is rare among broadband providers, losing customers in virtually every segment of its business, including in its acquired FiOS service areas.

Frontier’s stock has lost more than 80% of its marketplace value so far this year — a stunning decline for a company selling broadband service in many areas where it maintains a monopoly.

McCarthy once again made a commitment his efforts will “stabilize” customer losses, but spent most of his time trying to reassure investors on a Tuesday conference call that those stabilization efforts will primarily target areas where Frontier sells FiOS fiber to the home service. Customer churn continues to be a problem, with many customers leaving either because the company alienated them or dramatically raised their rates after a discounted promotion expires. Either way, many of those customers switch back to a cable provider. McCarthy claimed Frontier plans to adjust promotional pricing to soften the blow of a steep rate hike after a promotion expires.

McCarthy said almost nothing about Frontier’s legacy service areas, where Frontier still sells copper-based DSL service. Some of the company’s biggest losses have been in areas where it cannot compete effectively with cable broadband. McCarthy offered to enhance customer retention efforts and increase marketing to reduce losses, but there are no indications Frontier plans to spend significantly on major network upgrades in these areas anytime soon.

Frontier declared an unexpected dividend of $0.60 a share, which some analysts consider excessive and represents a “red flag atop this toxic value destroyer.”

One analyst remarked, “I’m not buying it; Frontier is a business in free fall.”

Frontier Overcharging Some Florida, Texas, and California Customers Hundreds of Dollars

Phillip Dampier October 17, 2017 Consumer News, Frontier, Video 2 Comments

Customers switched to Frontier Communications from Verizon in Florida, California and Texas continue to complain they are being overcharged for service, sometimes by hundreds of dollars a month, and they’re fed up.

Danielle Ferrari, owner of a clothing and consignment shop in Tampa, has been battling the phone company over its erroneous billing since the first day it took over service from Verizon Communications.

“The very first bill was wildly wrong,” Ferrari told WFTS Action News. “The next one wasn’t correct and the next one wasn’t correct.”

Ferrari had paid Verizon a little more than $100 a month, but Frontier sent a bill for more than $340. Calls to customer service brought broken promises the company will fix Ferrari’s bill, but the overcharges kept on coming. Subsequent calls to Frontier have accomplished nothing, and attempts to speak with a supervisor were denied.

Customers who decide to cancel their Frontier service and change providers are not out of the woods yet either. Canceling is what 79-year old Dennis Klocek from Palm Springs, Calif. tried to do, leaving him owed $127.62 for dropping his Frontier phone, TV, and internet service. Frontier claims it refunds customers not with a check, but a prepaid debit card, which the company promised to mail to his home address. It never arrived.

When Klocek called Frontier about the missing card, the company refused to reimburse him, claiming the card had been sent and was almost entirely depleted by someone who used it at several convenience stores and fast food restaurants in nearby Cathedral City. As far as Frontier was concerned, once the card was mailed, the matter was out of their hands and responsibility. Klocek is upset Frontier sent his refund in the form of a debit card, which he never authorized and obviously lacked the security features a refund check would have given him.

“These people can’t get away with this,” Klockek told KESQ-TV. “What’s going on? How many other people are getting screwed like this? I don’t like this and I am going to get to the bottom of it. I feel empty. I feel like I can’t trust anybody in big business, meaning ‘AKA’ Frontier.”

Frontier also refused Klockek’s request to speak to a supervisor, leaving him at a dead end. He took his complaint to the Palm Springs television station instead, which seems to potentially bring Frontier around.

“We empathize with our former customer and are actively helping him work with the card issuer to implement a fraud investigation, resolve the matter and receive the refund,” wrote Frontier representative Javier Mendoza.

WFTS-TV in Tampa reports multiple Florida customers are having billing problems with Frontier Communications. (1:38)

Back in Tampa, Frontier customer Christina Herrman said she’s been dealing with overcharges by Frontier Communications for years.

“Ever since Frontier took over, our bill has gotten exceedingly more each month, now up to $260,” she posted on a thread talking about the issue on Facebook. “Even charging us for a 2nd cable box/DVR for the past year that we never had.”

Requesting a supervisor can lead to punishing hold times.

“I wait on hold for 20 minutes to get one on the phone, to spend another hour and they can’t help me,” she posted. “Hours upon hours wasted trying to deal with them.”

She eventually surrendered and now just pays whatever amount Frontier bills her.

In Dallas, Tex., Beth Smith Powell also took to Frontier’s Facebook page to complain she spent almost 40 hours on the phone with Frontier representatives about their bait and switch promotions.

“I had a sales rep come to my home and give me a price on TV/internet/phone for two years,” Powell wrote. “I asked her several time was this price good for the full two years, she said yes.”

When the first bill arrived, it was nearly $500, leaving Powell aghast. After two hours with Frontier’s customer service, she was promised the bill would be adjusted. It wasn’t adjusted much because when the next bill arrived, it was over $400, forcing her to spend another two hours working with Frontier to straighten that bill out. In the meantime, she was threatened with service interruption and a collection agency if her original bill was not paid in full.

Just a few months later, Powell’s bill suddenly increased $40 a month and nobody could initially explain why.

“Come to find out my two-year CONTRACT was BS — it was only a six-month discount,” Powell wrote. “I have the paperwork but […] Frontier will not honor this contract.”

It appeared Frontier walked away from the commitments their third-party door-to-door sales agents made promising 24 months of savings by only delivering six, after the billing errors were corrected.

“Shame on Frontier for being dishonest and not honoring your written sales rep contract,” Powell complains. “I’ve spent about 40 hours on the phone and chat trying to get help and no one will honor your advertised rate!”

Alan Borden, a Tampa consumer protection attorney with Debt Relief Legal Group, told WFTS Frontier’s bills are very long and hard to understand.

“They make it as convoluted as possible but theoretically, they can sneak in these overcharges where you won’t notice, or you’ll just give up,” Borden said.

Which is exactly what many customers do. Frontier has earned an “F” rating from the Better Business Bureau and has collected more than 9,400 customer complaints in the last few years.

Despite Net Neutrality, Providers Launch Fiber Spending Spree

Despite claims from some industry-backed researchers and former members of Congress that Net Neutrality has reduced investment in telecommunications, a new research note from Deutsche Bank shows America’s top telephone and cable companies are spending billions on fiber upgrades to power wireless, business, and consumer broadband.

“Telecoms have become much more public signaling their intent to increase fiber investment, with AT&T and Verizon leading the spending ramp,” reports Deutsche Bank Markets Research.

Verizon has been on a fiber spending spree in the northeastern United States, signing contracts with Corning and Prysmian worth $1.3 billion to guarantee a steady supply of 2.5 million miles of fiber optic cable Verizon plans to buy over the next three years. Much of that spending allows Verizon to lay a foundation for its future 5G wireless services, which will require fiber to the neighborhood networks. But in cities like Boston, Verizon is also once again expanding its FiOS fiber to the home service to consumers.

AT&T is committed to connecting 12.5 million homes to gigabit-ready fiber broadband by 2019 — part of a deal it made with the FCC to win approval of its acquisition of DirecTV. AT&T claims it has already connected 5.5 million homes to its gigabit AT&T Fiber network, expected to reach 7 million by the end of this year.

Deutsche Bank thinks providers’ future drive towards 5G service will also simultaneously benefit fiber to the home expansion, because the same fiber network can power both services.

“To support the upcoming innovations such as autonomous driving, IoT, smart cities, the US needs to densify its fiber network,” Deutsche Bank said. “The U.S. fiber penetration rate is 20% vs. 75% for leading OECD countries, which suggests a large gap needs to be closed.”

Altice founder Patrick Drahi (second from left) and Altice USA CEO Dexter Goei (center) visit a Cablevision fiber deployment on Long Island, N.Y.

The bank predicts companies will spend around $175 billion over the next 10 years building out their fiber networks, with most of the spending coming from the phone companies, who may see fiber buildouts as their best attempt to level the playing field with cable operators’ hybrid fiber-coaxial cable networks. As cable operators expand their networks to reach more business parks, they have been gradually stealing market share for phone and data services from phone companies. Consumer broadband is also increasingly dominated by cable operators in areas where phone companies still rely on selling DSL services.

FierceCable notes Comcast and Altice have stepped up aggressive spending on fiber networks for their consumer and business customers. Altice is planning to decommission Cablevision’s existing coaxial cable network and move customers to fiber-to-the-home service. Comcast is deploying fiber services while still selling traditional cable broadband upgraded to DOCSIS 3.1, which supports substantially faster broadband speeds. The two networks co-exist side-by-side. Customer need dictates which network Comcast will use to supply service.

Customers benefit differently in each state, depending on what type of service is available. Comcast’s large footprint in Pennsylvania, outside of Philadelphia, is usually served by traditional coaxial cable. Verizon still sells DSL in much of the state. In Massachusetts, Verizon is building out its FiOS network to serve metro Boston while Comcast will depend on DOCSIS 3.1 upgrades to speed up its internet service. In New Jersey, long a battleground for Verizon’s FiOS service the company stopped aggressively expanding several years ago, Comcast has announced DOCSIS 3.1 upgrades for the entire state.

Independent phone companies are also seeing a bleak future without fiber upgrades. Both CenturyLink and Windstream are planning moderately aggressive fiber expansion, particularly in urban service areas and where they face fierce cable competition. Frontier continues its more modest approach to fiber expansion, usually placing fiber in new housing developments and in places where its copper facilities have been severely damaged or have to be relocated because of infrastructure projects.

None of the companies have cited Net Neutrality as a factor in their future broadband expansion plans. In fact, fiber networks have opened the door to new business opportunities to the companies installing them, and the high-capacity networks are likely to further reduce traffic/transit costs, while boosting speeds. That undercuts the business model of selling digital slow and fast lanes.

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  • BobInIllinois: My observation has been that Xfinity/Comcast will compete on speed if the local market is competitive. If they are the speed leader already, they won...
  • Josh: It's not where I am. There's a Fiber company available that's both way cheaper and way faster. I've wondered if they're trying to compete with that....
  • BobInIllinois: Xfinity must have goal to be fastest broadband speed in its markets....
  • john: So can they merge digi tier 1 and 2 together now and keep it at $12 since they are removing like 8 channels from it and it's basically just a crappy ...
  • Josh: Nice! It's about time we get some good news!...
  • tim: Predicted cost for cable next year by November: $74.50 ( for the basic package, and when ever your beginning trial period ends with in the year of sig...
  • JACQUELINE SKIPPER: I have this problem with Spectrum. I would have to cancel and wait 3 months and I would if I didn't need my internet and the sabres games. they alway...
  • BobInIllinois: Frontier offers VantageTV in the Bloomington-Normal, Illinois area. They are competing with Comcast and MetroNet (a fiber overbuilder from Evansville...
  • L Nova: The DOJ should force AT&T to either sell OR spin off the unwanted copper wireline assets....
  • EJ: Do these "institutes" really think they are fooling anyone? This song and dance political moves is sickening at best. Most of these companies have dug...
  • jason: poor former Brighthouse members in a week it will be a year since SPP prices started for them. That means no one will be on the legacy first year pr...
  • jason: spectrum is on pace to be the worst cable company when it comes to speeds soon. They had no reason to remove the 200mbps option twc had. They will al...

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