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AT&T Uses Tax Dollars to Subsidize Expensive, Capped, and Slow Wireless Rural Broadband Solution

AT&T Fiber isn’t coming to rural communities and farms in the phone company’s service area anytime soon. Instead, AT&T grudgingly accepted $428 million in ratepayer-subsidized Connect America funds to build fixed wireless networks that do not meet the FCC’s minimum definition of broadband, come usage-capped, and will offer a price break only to customers who sign up for AT&T’s other services.

AT&T’s Fixed Wireless Internet service begins this week in Georgia, offering up to 10/1Mbps service with a monthly data cap of 160GB (additional 50GB increments cost $10 each). The monthly price is $70, or $60 with a one-year contract, or $50 if a customer has AT&T wireless phone service or DirecTV. The installation fee is $99, waived if you bundle with DirecTV. The fee covers the installation of an outdoor antenna and indoor residential gateway, which remains the property of AT&T. The service works over AT&T’s 4G LTE network. Credit approval is required, and those not approved may have to pay a refundable deposit to start service. These prices do not include taxes, federal and state universal service charges, regulatory cost recovery charges (up to $1.25), gross receipts surcharge, administrative fees and other assessments which are not government-required charges. See att.com/additionalcharges for details on fees & restrictions.

AT&T is using ratepayer funds to construct a sub-standard fixed wireless network that it will use to cross-sell its own products and services by offering customers a discount. The minimum speed to be considered “broadband” according to the FCC is not less than 25Mbps. But AT&T would have to spend considerably more to equip its wireless solution to work at those speeds, and the company has already admitted fixed wireless will be available in areas where it is “uneconomical to build wireline” networks, according to AT&T president of technology operations Bill Smith.

The new wireless network will be in service for 400,000 locations in Georgia by the end of this year, with 1.1 million locations up and running across 17 other states (Alabama, Arkansas, California, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, Texas and Wisconsin) by 2020.

The buildout is required to meet the terms of the FCC’s Connect America Fund, which AT&T committed to in 2015.

Fixed wireless fits nicely with AT&T’s long-term strategy of mothballing its wireline networks in rural service areas, in favor of wireless alternatives. The company has been behind bills in more than a dozen state legislatures where it offers landline service to permanently disconnect rural customers from wired landline and broadband services.

“We’re committed to utilizing available technologies to connect hard-to-reach locations,” said Eric Boyer, senior vice president, wireless and wired product marketing at AT&T. Just as long as that technology isn’t fiber optics.

Questions and Answers About AT&T’s Fixed Wireless Internet

What is AT&T Fixed Wireless Internet?

AT&T Fixed Wireless Internet provides qualified households and small businesses with high-speed internet service via an outdoor antenna and indoor Wi-Fi Gateway router. AT&T Fixed Wireless Internet includes:

  • High-speed internet with download speeds of at least 10Mbps.
  • 160GB of internet usage per month. If you exceed the amount of data in your plan, additional data will automatically be provided in increments of 50GB for $10, up to a maximum of 20 such increments or $200
  • Wi-Fi connections for multiple devices (e.g. laptops, tablets, smartphones, gaming consoles, etc.).
  • Wired Ethernet connections for up to 4 devices.

What speed does AT&T Fixed Wireless Internet provide?

AT&T Fixed Wireless Internet will provide speeds of at least 10Mbps for downloading and at least 1Mbps for uploading. However, data speeds can vary depending upon various factors:

  • Wi-Fi isn’t as fast as a wired connection. You get the best Wi-Fi signal closest to your gateway without obstructions. Use a wired (Ethernet) connection for the best results.
  • Devices have a maximum internet speed they can reach, and might not be as fast as your possible internet service level (especially older devices).
  • Multiple devices sharing your internet connection at the same time, whether wired or Wi-Fi, can reduce your internet speed.
  • Learn more at att.com/speed101 and att.com/broadbandinfo.

Can I add AT&T Fixed Wireless Internet to my AT&T Mobile Share Plan and is Rollover Data included?

No, AT&T Fixed Wireless Internet cannot be added to a Mobile Share plan, and Rollover Data is not included in the AT&T Fixed Wireless Internet data plan.

Is Wi-Fi included with AT&T Fixed Wireless Internet?

Yes, you can connect multiple Wi-Fi enabled devices like laptops, smartphones and tablets to the AT&T Fixed Wireless Internet Wi-Fi Gateway, and up to 4 Ethernet-connected devices. When you access your AT&T Fixed Wireless Internet over your Wi-Fi home network using any type of device (including smartphones and some home automation equipment), that counts as AT&T internet data usage. However, if you access the internet via a public or commercial Wi-Fi hotspot, that access does not count as usage.

How far does the AT&T Fixed Wireless Internet Wi-Fi signal reach?

The AT&T Fixed Wireless Internet Wi-Fi Gateway router enables wireless networking capabilities throughout your home or business and helps to minimize wireless dead spots. This smart technology allows you to:

  • Provide high-speed internet connections to multiple devices
  • Create safe and secure wireless networking

Does weather affect service?

AT&T Fixed Wireless Internet relies on a LTE signal from a cell tower. Many things can affect the availability and quality of your service, including network capacity, terrain, buildings, foliage, and weather. A professional installer will confirm sufficient signal strength at your location before installation.

What type of support is available for AT&T Fixed Wireless Internet service?

For AT&T Fixed Wireless Internet Customer Care, call 1-855-483-3063, available 6AM to midnight Central Time 7-days a week.

How long does it take to get AT&T Fixed Wireless Internet service?

AT&T Fixed Wireless Internet service is available for installation within 10 business days of ordering. Professional installation (required) usually takes about 3 hours.

If I move, can I take AT&T Fixed Wireless Internet with me?

If you are moving, please contact AT&T to find out if AT&T Fixed Wireless Internet or other AT&T services are available at your new address. Please do not attempt to move the AT&T Fixed Wireless Internet outdoor antenna.

Can I take AT&T Fixed Wireless Internet to my cottage or second home?

No, AT&T Fixed Wireless Internet is not movable or mobile. Please do not attempt to move the AT&T Fixed Wireless Internet outdoor antenna.  Please contact AT&T to find out if AT&T Fixed Wireless Internet or other AT&T services are available at your cottage or second home.

How is AT&T Fixed Wireless Internet different from AT&T Wireless Home Phone & Internet?

Both AT&T Fixed Wireless Internet and AT&T Wireless Home Phone & Internet provide internet access. AT&T Fixed Wireless Internet includes an outdoor antenna that is professionally mounted on or near the exterior of your home or business to provide a strong signal for better connectivity, while Wireless Home Phone & Internet uses a small desktop device that you can install yourself since there is no outdoor antenna. Stated another way, Wireless Home Phone & Internet is a mobile service, whereas AT&T Fixed Wireless Internet is not. AT&T Fixed Wireless Internet is only available in select (typically rural) areas, while Wireless Home Phone & Internet is available throughout the AT&T wireless footprint.  AT&T Fixed Wireless Internet provides internet download speeds of 10Mbps or over, while Wireless Home Phone & Internet provides the highest speed available to it, typically in the range of 5-12Mbps.

What service limitations apply to AT&T Fixed Wireless Internet?

Services like web hosting or hosted services such as camera, gaming server, peer-to-peer, etc., that require static IP address are not supported by AT&T Fixed Wireless Internet. AT&T Fixed Wireless Internet may not be compatible with DVR/Satellite systems; please check with your provider.

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

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

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

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

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

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

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

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

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

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

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

AT&T Wants to Walk Away from Universal Landline Service in Illinois

AT&T is seeking permission to walk away from its decades-long commitment to provide universal access to landline service in Illinois, which could mean the eventual end of landline phone and wired broadband service in parts of the state.

An Illinois Senate committee approved a bill in March effectively ghostwritten by AT&T that will end the phone company’s legal obligation to provide wired services. AT&T claims 90% of consumers have already dropped landlines in Illinois, switching to cell phone or Voice over IP services. But the company would not say how many consumers still get wired broadband service from AT&T.

AT&T is laying the groundwork to eventually mothball its copper wire networks. Customers in urban areas would likely be serviced by AT&T’s fiber-copper U-verse network while rural areas would be served entirely by AT&T’s wireless cellular network. The company has already received approval to drop landline service in 19 of the 21 states where it provides landline service. AT&T Illinois president Paul La Schiazza said the company won’t approach the FCC about switching the network off for good until it gets approval in all 21 states.

If AT&T wins the right to pull the plug, it need only provide customers with 60 days notice. The bill also currently qualifies only one company in Illinois to discontinue service almost immediately — AT&T. Despite that, the bill has won support from independent phone companies in the state including Frontier Communications.

La Schiazza complains the government has treated AT&T unfairly by requiring it to provide service while other companies can cherry-pick service areas.

“What we’re left with in Illinois is we’re not guaranteed any customers, we’re not guaranteed any return … yet we still are required to provide an old-style, voice-only telephone line to every customer in our service territory,” he told the Chicago Tribune. “No competitor is required to do that. They can pick and choose whatever customers they want to serve and they can use whatever available technology that they want to.”

But AT&T’s competitors never enjoyed a legacy as a government-sanctioned monopoly, and do not benefit from rights-of-access, government tax credits, and mature network infrastructure over which it can offer service almost anywhere. AT&T also wins an end to the universal service mandate that has been a part of telecom public policy for decades, which means some rural state residents will not be able to get any telephone or internet service from AT&T or any other provider.

AT&T claims it will invest the money it currently puts into wireline network maintenance into ‘services consumers actually want,’ which has traditionally been its wireless network. AT&T’s preferred solution for rural service is to bolster its wireless network and convert existing wired customers into wireless ones. But that gives some state legislators pause, and efforts to decommission landline service by Verizon in rural New York and Superstorm Sandy-ravaged communities along the New York and New Jersey shoreline met with howls of protest from customers about inferior service.

Abe Scarr, director of the Illinois Public Interest Research Group, warned AT&T’s proposal was good for AT&T but potentially bad news for rural, older, and poor residents. Scarr submitted testimony to the Illinois Senate’s Telecommunications and Information Technology Committee that argued the current bill SB1381 was favorable to AT&T’s corporate agenda but failed to preserve time-honored traditions of universal service, consumer protection, competition, and public safety.

Scarr pointed out several recent wireless failures including several 911 outages that disrupted access to emergency services nationwide and AT&T’s inability to offer reliable wireless service during mass events. He also questioned whether AT&T would actually invest adequately in improving coverage in Illinois.

“I don’t think we can take away the old policy without replacing (it with a) new one and just pray to the gods of the markets to provide everything,” Scarr said. “I’m quite confident that’s not going to work out for all Illinoisans, especially since we don’t have real competition in broadband.”

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

Emery

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

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

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

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

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

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

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

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

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

Rural America: not a broadband-a-plenty

Emery offers two contradictory defenses for his bill:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Emery at a 2015 ALEC event.

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

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

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

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

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

New York Awards $212 Million to 26 Telecom Companies for Rural Broadband Expansion

New York State taxpayers will contribute $212 million to expand broadband to reach 89,514 homes and institutions in mostly in rural upstate communities that either lack internet access or have to endure very slow speed DSL service from the phone company. All recipients have agreed, as a condition of receiving the money, not to impose data caps on their customers.

This week, New York Governor Andrew M. Cuomo announced the latest winning projects that will receive grants from a second round of funding from the New NY Broadband Program, part of the governor’s effort to achieve 100% broadband penetration in the Empire State.

Gov. Cuomo

Twenty six cable and phone companies, mostly for-profit businesses, will share awards ranging from $226,184 for Cable Communications of Willsboro to reach 558 homes in the Essex County communities of Willsboro and Essex, on the border of Lake Champlain and the state of Vermont to $47,770,970 for Armstrong Telecommunications to reach 16,545 homes in Allegany, Cattaraugus, Erie, Livingston, Steuben, and Wyoming counties in the Finger Lakes Region and Southern Tier.

“Broadband is today what electricity was nearly a century ago – essential to creating economic opportunity, driving innovation and an absolute necessity for our way of life,” Governor Cuomo said. “These awards will provide homes and businesses with access to the high-speed internet required to participate and succeed in the modern economy, and are a major step toward broadband for all in New York.”

Grant recipients provided $56,253,037 in private matching funds, with New York taxpayers picking up the remaining 75% of the total expansion cost — about $2,366 per home or business.

A separate agreement with the New York State Public Service Commission obligates Charter Communications (formerly Time Warner Cable) to embark on its own company-funded expansion program to expand service to approximately 145,000 unserved and underserved premises. Charter has identified Columbia, Erie, Jefferson, Onondaga, Oswego, and Sullivan as “Year One Priority Counties” where most upgrades will be taking place in 2017, including expansion to reach 100Mbps speeds during the first six months of this year.

The winning providers had to guarantee they would upgrade speeds to at least 100Mbps except in the “most remote areas” where 25Mbps is acceptable. Although the state targeted 50% private sector co-investment, providers ultimately came closer to the absolute minimum of 20% in matching funds. They must also guarantee that broadband service will be available to customers for no more than $60 a month to qualify for the grant. Cable Communications of Willsboro, for example, now offers 8/1Mbps for $59.95 a month. Presumably it will have to boost speeds as part of its grant award.

The grant program was also designed to favor applicants offering fiber-to-the-home or hybrid fiber/cable (HFC) technology currently favored by cable operators. DSL and fixed wireless applicants had to give evidence the governor’s need for speed would be delivered using those technologies. All applicants must also agree not to impose data caps of any kind for New York residents.

New York is a rare exception to rural broadband expansion in states that mostly rely on politicians begging and pleading with providers to expand their service areas. At best, this has delivered modest results without access to supplemental funding to achieve Return On Investment requirements private companies demand.

As New York progresses through multiple rounds of bidding, each new round becomes more challenging because of the increasing expense to reach each remaining unwired rural home, business, and farm. In the current round, the costs to wire a single home are at least four times more than what Verizon spent to extend its FiOS service to a new home or business in downstate New York.

To meet 100% penetration, some properties will require a $20,000 or more investment to extend service. Gov. Cuomo has decided that broadband should be treated as a necessary utility, not a convenience. In effect, New York wants universal service standards to be applied to broadband, regardless of cost.

All projects must be finished by the end of 2018. The Broadband Program Office is currently finalizing a Request for Proposals for the Program’s upcoming Round III, which will launch within 30 days. This round will seek to complete the goal of bringing high-speed internet access to New York’s remaining unserved and underserved communities. Round III will be paid for by the $170 million in Connect America Funds Verizon forfeit because of their lack of interest in expanding rural broadband service. New York officials successfully petitioned the Federal Communications Commission to reallocate those funds to the state to disburse to reach the remaining rural areas still without suitable internet access.

Phase 2 Awardees

Awardee Projects Census Blocks Total Units State Grant Total Private Match Total Project Cost
TOTALS
54
10,378
89,514
$211,798,593
$56,253,037
$268,051,631
Altice 1 25 346 $867,281 $216,821 $1,084,102
Armstrong Telecommunications 4 1,678 16,545 $47,770,970 $12,472,577 $60,243,547
Cable Communications of Willsboro 1 11 558 $226,184 $56,546 $282,730
Castle Cable TV Television, Inc. 1 14 129 $632,559 $158,140 $790,699
Champlain Telephone Company 1 58 334 $1,362,901 $340,726 $1,703,627
Chazy and Westport Telephone Corporation 2 222 530 $2,821,185 $705,297 $3,526,482
Citizens of Hammond 1 40 382 $1,395,688 $348,923 $1,744,611
Delhi Telephone Company 1 284 818 $3,392,373 $848,094 $4,240,467
DFT Local Service Corporation 1 212 973 $4,274,536 $1,068,634 $5,343,170
DTC Cable Inc. 1 413 1,524 $4,432,209 $1,899,518 $6,331,727
Empire Telephone Corporation 3 277 1,692 $3,236,891 $809,226 $4,046,117
Fairpoint 3 2,015 10,321 $36,668,472 $9,301,930 $45,970,402
Frontier Communications 11 1,189 12,003 $29,901,354 $7,475,354 $37,376,708
Gtel Teleconnections 2 442 2,450 $5,259,217 $1,314,806 $6,574,023
Haefele TV Inc. 2 386 3,407 $5,022,332 $1,255,751 $6,278,083
Mid-Hudson Data Corp. 1 449 18,771 $849,818 $212,455 $1,062,273
Middleburgh Telephone Company (MIDTEL) 1 228 1,599 $6,831,856 $1,707,964 $8,539,820
Mohawk Networks, LLC 1 754 3,623 $6,391,157 $1,597,792 $7,988,949
MTC Cable 4 183 2,982 $6,529,775 $2,391,035 $8,920,810
New Visions Communications 1 266 3,906 $11,310,921 $2,827,731 $14,138,652
Newport Telephone Company 1 255 1,919 $9,348,940 $2,337,237 $11,686,177
Oneida County Rural Telephone 1 210 588 $3,285,885 $821,474 $4,107,359
Otsego Electric Cooperative 2 122 714 $3,935,949 $1,145,065 $5,081,014
Pattersonville Telephone Company 1 93 170 $1,188,748 $297,187 $1,485,936
Slic Network Solutions 2 121 891 $3,746,744 $937,871 $4,684,615
TDS Telecom 4 431 2,339 $11,114,648 $3,704,883 $14,819,531

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