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Middle Mile Madness: Rural Florida Blows $24 Million on Wireless Network Serving Nobody

12126179-florida-rural-broadband-alliance-logoA word to the wise: using public money to build a middle mile broadband network without any customers lined up to sign up is a disaster waiting to happen.

In April, the disaster arrived in the form of a Chapter 7 bankruptcy filing on behalf of the Florida Rural Broadband Alliance (FRBA), which threw away $24 million in federal grants on a network that was so unviable, the contractor that was supposed to run it apparently ran away instead, resulting in confusion and an eventual declaration it was “doomed to fail” anyway.

The sordid story started almost seven years ago when Florida’s Heartland Regional Economic Development Initiative (FHREDI) and Opportunity Florida (OF) — two non-profit organizations dedicated to spurring economic development across rural Florida, discovered federal grant money was available for rural Internet expansion as part of the Obama Administration’s 2009 American Recovery and Reinvestment Act. The two groups fashioned a broadband proposal they were confident would win approval. At the time, rural broadband across northwest and south-central Florida was dismal at best, with only 39% of homes covered. Largely unserved by cable and barely served with DSL from AT&T and other telephone companies, the two groups believed a wireless network would be the best solution for Hardee, DeSoto, Highlands, Okeechobee, Glades, Hendry, Holmes, Washington, Jackson, Gadsden, Calhoun, Liberty, Gulf and Franklin counties.

empty-office

$24 million spent and nothing to show for it.

Although $24 million is not an insubstantial sum, it was clearly never adequate to build a comprehensive rural broadband network reaching homes and businesses. Instead, the two groups envisioned a “middle mile” network funded by the government, with central offices in Orlando and Tallahassee equipped with microwave dishes and computer servers. Unlike most middle mile networks, the one proposed by the FRBA would rely on a network of microwave towers instead of fiber optics, and would ultimately serve all of its customers over a wireless network.

When complete, the wireless network was supposed to deliver up to 1Gbps capacity throughout the region, relying on leased space on existing cell towers to support microwave links that would bounce signals from one area to the next. Initially promising to serve more than 174,000 homes and 16,400 businesses, the one immediate flaw noticed by those skeptical of the proposal was the lack of a definitive plan to sell Internet service to paying residential and business customers. The brochures suggested existing commercial Internet Service Providers would magically step into that role. Early critics called that “wishful thinking.”

Despite what some felt was an untenable business plan and an incomplete application, the group won its federal “BTOP” grant of $24 million in 2010 and began a very lengthy planning process using well-paid consultants to get the network fully scoped out and built. Within a year, controversy quickly threatened to swamp the project, and a congressional oversight investigation quickly found evidence of wasteful spending and put its funding on hold. That would hardly be the first allegation raised against the FRBA and those overseeing it. By 2013, the Columbia County Observer had run more than a dozen stories reporting irregularities and other problems with the project. Few were noticed more than the report Rapid Systems, Inc., one of the contractors on the project, had filed a $25 million lawsuit replete with soap operatic allegations against FRBA for not being paid for its work.

Rapid Systems CEO, Dustin Jurman and CFO/VP Denise Hamilton. (Image: Columbia County Observer)

Rapid Systems CEO, Dustin Jurman and CFO/VP Denise Hamilton. (Image: Columbia County Observer)

Rapid Systems alleged everything from fraud and double-dipping to sexual promiscuity over what it called the “FRBA Fraud Scheme.”

At the heart of the lawsuit were allegations money was being misspent, “to pay inflated salaries to employees, who then fled to South America, and that grant money was used for inflated fees to consulting companies which were owned by FRBA principals.”

Rapid Systems claimed FRBA was very generous paying management consulting fees of $10,000 a month to an entity known as the Government Service Group (GSG), along with a pro rata share (3% of the grant) for a “Grant Compliance Fee” and an additional 13% of the grant as a “Capital Improvement Program Administrative Fee.” And you thought only Comcast and Time Warner Cable were creative conjuring up fees. When added up, it appeared just one consultant — GSG — would walk away with 16% of the entire grant — nearly $4 million in total “management fees” before a single broadband connection would be made.

The lawsuit also claimed the grant money was gorged on by the leadership of both non-profits, one who allegedly relocated to South America the lawsuit states in another aside. The two “were being paid fees in the amount of $8,500 a month to themselves cloaked as administrative and community outreach funds,” according to the lawsuit.

Phillip Dampier: To be a credible supporter of community broadband, it is responsible to call out the disasters so that they are not repeated.

Phillip Dampier: To be a credible supporter of community broadband, it is responsible to call out the disasters so they are not repeated.

Meanwhile, the public eagerly awaiting something better than the non-broadband AT&T and some independent phone companies were supplying in the region couldn’t get answers about the project’s progress. Neither could the media, which reported the business phone number for the FRBA would ring unanswered for hours or days. Those hired to provide community outreach about the broadband project were frequently unable to answer even basic questions about the network or its status, or where the principals involved in the project even met.

By 2014, Opportunity Florida’s Facebook page claimed the network was 90% complete. But the project now decidedly downplayed how many homes and businesses would get service. Instead, the middle mile network promoted itself as an institutional network, dedicated primarily to serving “community anchor institutions:”

The FRBA system provides lower cost, high capacity broadband to Community Anchor Institutions, commonly referred to as “CAIs.” CAIs include local government and public agencies including schools, libraries and hospitals. The NTIA grant was initiated with these unserved or underserved CAIs as the intended target. Most government and public services have moved, or are in the process of moving, to paperless transactions and record-keeping and need the additional broadband and Internet based capabilities. Another benefit of the FRBA system will be capacity to schools and libraries as both those institutions face online and digital mandates.

Commercial ISPs willing to use the network to offer service to individual non-institutional customers were invited to visit an Opportunity Florida webpage (now gone) for more information. There is no evidence any major ISP ever bothered. In fact, even institutional users didn’t seem very interested. We remain unclear if there was ever a single paying customer on the network, despite a report filed by the NFBA with the federal government that claimed through September 30, 2012, the NFBA had 11 anchor institutions, zero residents, and zero businesses hooked up to its network.

A year later, the Columbia County Observer went further and called some of those involved in evangelizing the project “clueless,” and based on the post-mortem of what has happened since, they may be right.

Those directly involved in the project have since displayed a stunning lack of knowledge about its operations and practices, or what has become of the $24 million:

The unfortunate "I see nothing, I hear nothing, I know nothing" brigade.

The unfortunate “I see nothing, I hear nothing, I know nothing” brigade answers questions from the media.

  • Gina Reynolds, the last executive director of FHREDI, which administered FRBA, claimed the network was running fine when she left in the summer of 2015 to start her own economic development consultancy. She may be among the very few that got out before the project ultimately fell apart. Although FHREDI managed to pay her for her services, it suddenly lacked any resources to pay anyone to replace her after she left;
  • Greg Harris, a Highlands County commissioner and FHREDI director, disclosed at a recent county commission meeting FRBA was in Chapter 7 bankruptcy and the group that oversaw it — FHREDI, was being dissolved. But like the phoenix rising from the ashes, some of those involved in FHREDI and FRBA are now associating themselves with a new group called the Florida Heartland Economic Region of Opportunity (FHERO). Says Harris: “We didn’t really know what FHREDI was doing. They were spending most of their opportunity on FRBA and the rural broadband. It got away from what we really needed to focus on.”
  • Terry Burroughs, an Okeechobee County commissioner, is FHERO’s chairman. But last year, the ex-telephone company executive was a FHREDI board member. His memory is excellent about where the taxpayer-funded equipment to run the network eventually ended up: in warehouses in Lake Placid and Tallahassee. But his answers were more vague when asked how things went so wrong. Burroughs tried to put substantial distance between himself and the failed wireless broadband network: “When I first got on the board, they were trying to negotiate with a contractor. Gina [Reynolds] was working with that, and it went on and on and on. There was probably a network at some given time, but I don’t think a last mile ever deployed. When I got there, the last mile was dark. … I never knew of a paying customer. They were trying to build a telephone company, and they were doomed to failure.”
  • Paul McGehee, business development manager for Glades Electric and a FHERO director, did an even better job explaining he knew nothing, saw nothing, and heard (almost) nothing: “The operator who was contracted to run it as a company stepped away from it,” McGehee said, adding he could not recall the contractor’s name. The flaw in FRBA’s plan, according to McGehee, was that while the grant bought the equipment, there were no federal funds for operations. “No one wanted to step up and operate the network, and there was no way to pay the tower leases… The end product wasn’t a viable sustainable thing.”

fhrediToo bad nobody bothered to consider that before spending $24 million of the taxpayers’ money on a non-viable network.

Commissioner Jim Brooks didn’t seem too bothered by the admissions of total failure. After hearing an explanation about the network’s demise and the money spent on it, he told his fellow commissioners he “didn’t have a problem with it.”

A multitude of articles that have documented this disaster (including our own from September 2011) illustrates what can happen when over-enthusiastic consultants overwhelm projects with happy talk not recognized as such by a board that has little or no understanding of the technology, the broadband business, or, in this case, the project itself. The claims and projections consistently simply bore no reality… to reality. What is even more concerning is some of those consultants didn’t work for free, and may have tapped a substantial portion of the total available grant for themselves.

It is also remarkable and disappointing to read candid assessments about a project “doomed to failure” from those with direct knowledge and or involvement only after the liquidator from the federal government turns up. As stewards of public taxpayer money, one expects more than a shrug of the shoulders and a quiet shuffle dance out of FHREDI into a new, reincarnated “rural economic development” initiative. How can we trust the same mistakes won’t be made again?

We remain strong supporters of community broadband, but messes like this hand potent ammunition to corporate-ISP-funded think tanks that use these kinds of failures to sully all public broadband projects. We must call out of the bad ones to be seen as credible supporting the good ones. It also never hurts to learn from others’ mistakes.

Among the biggest reasons this project was a flop (beyond the dubious skills of those in charge of overseeing it) was its size, scope, and technology choice. The biggest challenge to any rural broadband project is always “the last mile” — the point where the connection leaves a regional fiber network and reaches a nearby neighborhood’s utility poles and finally enters your home. It also happens to be the most costly segment of the network, and often the hardest to fund with government subsidies. But it is the one that makes the difference for individual homeowners and businesses who either have broadband or don’t.

Rural Floridians endure more broken promises for better broadband.

Rural Floridians endure more broken promises for better broadband.

Like too many middle mile projects of this type, the story initially fed to the press and supporters is that such networks will somehow alleviate rural broadband problems. Only later do supporters realize they are actually getting an institutional middle mile network that will offer service to hospitals, schools, and public safety buildings — not to homes and businesses. Ordinary citizens cannot access such networks unless a commercial ISP shows interest in leasing it to resell, which is unlikely. The closest most will ever get to experiencing an institutional network they paid for is staring at the fiber cable stretched across the utility poles in front of your house.

FRBA was too ambitious in size and scope, and a credible consultant should have advised those in charge to get credible evidence that a network built with grant money could be sustained without it going forward. If not, scale back the project or don’t apply for the grant.

This project proposed a wireless backbone to power a large regional wireless network. Winning support among anchor institutions was predictably difficult, because many already have existing contracts with commercial telecom companies. With government funding available in many instances, an institution can get full fiber or metro Ethernet service easier than a rural farmer can get 6Mbps DSL from a disinterested phone company.

The evidence shows there were few takers — institutional or otherwise — of what FRBA had to offer. Did the project organizers not see this lack of interest as a problem as the network prepared to launch? After launch, there were almost immediate signs it lacked enough of a customer base to sustain itself. Did the project backers assume the government would bail out the network or dump millions more into it to make it viable to sell to homes and businesses? Such assumptions would have been irresponsible.

There are too many underutilized middle mile or institutional fiber networks already built with taxpayer dollars that remain off-limits to those who paid to build them. Utilizing those networks by extending grant funding for last mile projects would be helpful, as would sufficient subsidies to assure middle mile construction is followed by last mile construction and actual service. We remain big believers in fiber to the home service. Although expensive, such projects are best positioned for success and future viability and can take advantage of the massive amount of dark fiber already laid in many areas. Some cities prefer to run the networks themselves, others contract day-to-day operations out to independent operators. Either would be preferable to a network that took six years to build and fail, without any evidence it could attract, support and sustain enough customers to support anything close to viability.

Attacks on Tennessee’s EPB Municipal Broadband Fall Flat in Light of Facts

latinos for tnThe worst enemy of some advocacy groups writing guest editorial hit pieces against municipal broadband is: facts.

Raul Lopez is the founder and executive director for Latinos for Tennessee, a 501C advocacy group that reported $0 in assets, $0 in income, and is not required to file a Form 990 with the Internal Revenue Service as of 2014. Lopez claims the group is dedicated to providing “Latinos in Tennessee with information and resources grounded on faith, family and freedom.”

But his views on telecom issues are grounded in AT&T and Comcast’s tiresome and false talking points about publicly owned broadband. His “opinion piece” in the Knoxville News Sentinel was almost entirely fact-free:

It is not the role of the government to use taxpayer resources to compete with private industry. Government is highly inefficient — usually creating an inferior product at a higher price — and is always slower to respond to market changes. Do we really want government providing our Internet service? Government-run health care hasn’t worked so well, so why would we promote government-run Internet?

Phillip Dampier: Corporate talking point nonsense regurgitated by Mr. Lopez isn't for the good of anyone.

Phillip Dampier: Corporate talking point nonsense regurgitated by Mr. Lopez isn’t for the good of anyone.

Lopez’s claim that only private providers are good at identifying what customers want falls to pieces when we’re talking about AT&T and Comcast. Public utility EPB was the first to deliver gigabit fiber to the home service in Chattanooga, first to deliver honest everyday pricing, still offers unlimited service without data caps and usage billing that customers despise, and has a customer approval and reliability rating Comcast and AT&T can only dream about.

Do the people of Chattanooga want “the government” (EPB is actually a public utility) to provide Internet service? Apparently so. Last fall, EPB achieved the status of being the #1 telecom provider in Chattanooga, with nearly half of all households EPB serves signed up for at least one EPB service — TV, broadband, or phone service. Comcast used to be #1 until real competition arrived. That “paragon of virtue’s” biggest private sector innovation of late? Rolling out its 300GB usage cap (with overlimit fees) in Chattanooga. That’s the same cap that inspired more than 13,000 Americans to file written complaints with the FCC about Comcast’s broadband pricing practices. EPB advertises no such data caps and has delivered the service residents actually want. Lopez calls that “hurting competition in our state and putting vital services at risk.”

Remarkably, other so-called “small government” advocates (usually well-funded by the telecom industry) immediately began beating a drum for Big Government protectionism to stop EPB by pushing for a state law to ban or restrict publicly owned networks.

Lopez appears to be on board:

Our Legislature considered a bill this session that would repeal a state municipal broadband law that prohibits government-owned networks from expanding across their municipal borders. Thankfully, it failed in the House Business and Utilities Subcommittee, but it will undoubtedly be back again in future legislative sessions. The legislation is troubling because it will harm taxpayers and stifle private-sector competition and innovation.

Or more accurately, it will make sure Comcast and AT&T can ram usage caps and higher prices for worse service down the throats of Tennessee customers.

epb broadband prices

EPB’s broadband pricing. Higher discounts possible with bundling.

Lopez also plays fast and loose with the truth suggesting the Obama Administration handed EPB a $111.7 million federal grant to compete with Comcast and AT&T. In reality, that grant was for EPB to build a smart grid for its electricity network. That fiber-based grid is estimated to have avoided 124.7 million customer minutes of interruptions by better detection of power faults and better methods of rerouting power to restore service more quickly than in the past.

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tennessee

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tennessee

Public utilities can run smart grids and not sell television, broadband, and phone service, leaving that fiber network underutilized. EPB decided it could put that network to good use, and a recent study by University of Tennessee economist Bento Lobo found EPB’s fiber services helped generate between 2,800 and 5,200 new jobs and added $865.3 million to $1.3 billion to the local economy. That translates into $2,832-$3,762 per Hamilton County resident. That’s quite a return on a $111.7 million investment that was originally intended just to help keep the lights on.

So EPB’s presence in Chattanooga has not harmed taxpayers and has not driven either of its two largest competitors out of the city.

Lopez then wanders into an equally ridiculous premise – that minority communities want mobile Internet access, not the fiber to the home service EPB offers:

Not all consumers access the Internet the same way. According to the Pew Research Center, Hispanics and African-Americans are more likely to rely on mobile broadband than traditional wire-line service. Indeed, minority communities are even more likely than the population as a whole to use their smartphones to apply for jobs online.

[…] Additionally, just like people are getting rid of basic at-home telephone service, Americans, especially minorities, are getting rid of at-home broadband. In 2013, 70 percent of Americans had broadband at home. Just two years later, only 67 percent did. The decline was true across almost the entire demographic board, regardless of race, income category, education level or location. Indeed, in 2013, 16 percent of Hispanics said they relied only on their smartphones for Internet access, and by 2015 that figure was up to 23 percent.

That drop in at-home broadband isn’t because fewer Americans have access to wireless broadband, it’s because more are moving to a wireless-only model. The bureaucracy of government has trouble adapting to changes like these, which is why government-owned broadband systems are often technologically out of date before they’re finished.

But Lopez ignores a key finding of Pew’s research:

In some form, cost is the chief reason that non-adopters cite when permitted to identify more than one reason they do not have a home high-speed subscription. Overall, 66% of non-adopters point toward either the monthly service fee or the cost of the computer as a barrier to adoption.

What community broadband provides communities the big phone and cable companies don't.

So it isn’t that customers want to exclusively access Internet services over a smartphone, they don’t have much of a choice at the prices providers like Comcast and AT&T charge. Wireless-only broadband is also typically usage capped and so expensive that average families with both wired broadband and a smartphone still do most of their data-intensive usage from home or over Wi-Fi to protect their usage allowance.

EPB runs a true fiber to the home network, Comcast runs a hybrid fiber-coax network, and AT&T mostly relies on a hybrid fiber-copper phone wire network. Comcast and AT&T are technically out of date, not EPB.

Not one of Lopez’s arguments has withstood the scrutiny of checking his claims against the facts, and here is another fact-finding failure on his part:

Top EPB officials argue that residents in Bradley County are clambering for EPB-offered Internet service, but the truth is Bradley County is already served by multiple private Internet service providers. Indeed, statewide only 215,000 Tennesseans, or approximately 4 percent, don’t have broadband access. We must find ways to address the needs of those residents, but that’s not what this bill would do. This bill would promote government providers over private providers, harming taxpayers and consumers along the way.

Outlined section shows Bradley County, Tenn., east of Chattanooga.

Outlined section shows Bradley County, Tenn., east of Chattanooga.

The Chattanoogan reported it far differently, talking with residents and local elected officials on the ground in the broadband-challenged county:

The legislation would remove territorial restrictions and provide the clearest path possible for EPB to serve customers and for customers to receive high-speed internet.

State Rep. Dan Howell, the former executive assistant to the county mayor of Bradley County, was in attendance and called broadband a “necessity” as he offered his full support to helping EPB, as did Tennessee State Senator Todd Gardenhire.

“We can finally get something done,” Senator Gardenhire said. “The major carriers, Charter, Comcast and AT&T, have an exclusive right to the area and they haven’t done anything about it.”

So while EPB’s proposed expansion threatened Comcast and AT&T sufficiently to bring out their lobbyists demanding a ban on such expansions in the state legislature, neither company has specific plans to offer service to unserved locations in the area. Only EPB has shown interest in expansion, and without taxpayer funds.

The facts just don’t tell the same story Lopez, AT&T, and Comcast tell and would like you to believe. EPB has demonstrated it is the best provider in Chattanooga, provides service customers want at a fair price, and represents the interests of the community, not Wall Street and investors Comcast and AT&T listen to almost exclusively. Lopez would do a better job for his group’s membership by telling the truth and not redistributing stale, disproven Big Telecom talking points.

Unlimitedville: Affordable Unlimited Wireless Broadband Service via Sprint

unlimitedvilleFinding affordable wireless Internet access that isn’t speed throttled or usage capped is becoming rare, but Stop the Cap! has been exploring a provider that offers both.

Unlimitedville is the latest authorized reseller of Sprint that has managed to get permission to market an unlimited LTE 4G wireless data plan that comes without speed throttles. The service is priced at $42.99 a month (not including certain minor fees and surcharges) and includes a 30-day free trial to test the service. A $50 setup fee includes a mobile hotspot device (typically a Netgear Zing or Pocket Wifi) that is yours to keep once you commit to the required 2-year contract (after the free trial).

Customers we have communicated with give the service a universal thumbs-up for not limiting or throttling usage. Customers in suburban and semi-rural areas near highways and interstates report the best speeds from relatively uncongested Sprint cell towers. Those in very rural areas may have a lot of trouble finding Sprint service available, so potential customers should review Sprint’s coverage map carefully for data service coverage before considering Unlimitedville.

There are some peculiarities about doing business with this reseller, however.

First, Unlimitedville acts as a front line sales agent, but accounts are apparently provisioned by an another company named Impact Wireless, a “master agent” for Sprint. After service is established, all future communications, support and billing take place directly with Sprint.

sprint zingGetting service established is the first minor hurdle. Because the contract plan is intended for business use, customers will need to list a company name on the enrollment form. It is acceptable to consider yourself a consultant or use your current profession if you intend to use the service at anytime/for any reason for work or while travelling for work. No formal business registration is required. Some customers sign up using their last name, as in “Smith Consulting.” You do have to give them your Social Security number or business Taxpayer ID Number to run the usual required credit check. Most applicants are easily approved within 72 hours and Sprint will then call to help arrange for service. If you are not approved, you can agree to pay an upfront deposit and after 12 on-time monthly payments, the deposit will be returned to your account.

Second, some customers have recently reported they’ve been surprised to discover their account activation came with membership in a free loyalty program for a certain home improvement retail chain. With the recent demise of Karma’s Neverstop plan, disconnecting customers are banging at the doors of Unlimitedville to get in. Evidently this overflow is also affecting Impact Wireless, which evidently has some limitations on how many new customers it can enroll itself over a certain period of time. As a result, they may be looking for other entry points available to them to get customers activated as quickly as possible. Customers should be ready to be flexible. Getting unlimited wireless data from anyone these days increasingly requires creativity.

As Unlimitedville gains more visibility, there are also questions about how long it will last given carriers’ dislike of resellers that attract a lot of heavy users. The service has been around at least as long as Karma and is still welcoming new clients, so it is hard to say. It will probably last longer if customers respect the wireless network that powers it was not built to sustain customers running up a terabyte of usage a month. Being a responsible user of a limited resource is likely to help keep these kinds of unlimited services viable, an important consideration for customers who do not have the luxury of going to another provider if Unlimitedville folds.

FCC Chairman Rejects Mobile Internet as Useful Competitor to Wired Broadband

Wheeler

Wheeler

FCC chairman Thomas Wheeler considers mobile broadband a poor substitute for fixed/wired Internet access. A fact sheet released by Wheeler’s office shows he is convinced America still has a broadband problem — speeds are too slow, competition is lacking, and 4G/LTE wireless broadband is so usage-capped or speed throttled, it is not a serious substitute for traditional wired broadband.

Wheeler claimed, “approximately 34 million Americans still lack access to fixed broadband at the FCC’s benchmark speed of 25Mbps for downloads, 3Mbps for uploads,” and has previously said those that do often find those speeds from only a single provider, typically a cable company.

Wheeler doesn’t dismiss the need for wireless Internet access, but he considers it an add-on for customers on the go. Other highlights from the fact sheet:

  • A persistent urban-rural digital divide has left 39 percent of the rural population without access to fixed broadband. By comparison, only 4 percent living in urban areas lack access;
  • 41 percent of Tribal Lands residents lack access;
  • 41 percent of schools have not met the Commission’s short-term goal of 100Mbps per 1,000 students/staff;
  • Only 9 percent of schools have fiber connections capable of meeting the FCC’s long-term goal of 1Gbps per 1,000 students.

Wheeler also said that U.S. broadband continues to lag behind other developed nations, only ranking 16th out of the top 34 countries.

Wheeler thinks wireless broadband is an essential service for many, but it should not be compared with wired broadband, as the two services are distinct from one-another:

  • Fixed broadband offers high-speed, high-capacity connections capable of supporting bandwidth-intensive uses, such as streaming video, by multiple users in a household. But fixed broadband can’t provide consumers with the mobile Internet access required to support myriad needs outside the home and while working remotely.
  • Mobile devices provide access to the web while on the go, and are especially useful for real-time two-way interactions, mapping applications, and social media. But consumers who rely solely on mobile broadband tend to perform a more limited range of tasks and are significantly more likely to incur additional usage fees or forego use of the Internet.

Stop the Cap! Testimony to N.Y. Public Service Commission Advocating Major Telecom Study

logoOctober 20, 2015

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

Dear Ms. Burgess,

New York State’s digital economy is in trouble.

While providers claim portions of New York achieve some of the top broadband speeds in the country, the vast majority of the state has been left behind by cable and phone companies that have never been in a hurry to deliver the top shelf telecom services that New Yorkers need and deserve.

The deregulation policies of the recent past have resulted in entrenched de facto monopoly and duopoly markets with little or no oversight. Those policies, instead of benefiting New Yorkers, are ultimately responsible for allowing two companies to dominate the state’s telecommunications marketplace.

In virtually all of upstate New York, the services consumers receive depend entirely on the business priorities of local incumbent providers, not market forces or customer demand. As a result, New Yorkers face relentless, unchecked rate increases, well-documented abysmal and unresponsive customer service, and inadequate broadband provided by a workforce under siege from downsizing, cost-cutting, and outsourcing.

Certain markets, particularly those in the New York City area, have at least secured a promise of better broadband from Verizon’s FiOS fiber to the home upgrade. But at least 100,000 New Yorkers have languished on Verizon’s “waiting list,” as the company drags its feet on Non Standard Installation orders.[1] In upstate New York, Verizon walked away from its FiOS expansion effort five years ago, leaving only a handful of wealthy suburbs furnished with fiber service while effectively abandoning urban communities like Buffalo and Syracuse with nothing better than Verizon’s outdated DSL, which does not meet the FCC’s minimum definition of broadband – 25Mbps.[2]

Cablevision’s broadband performance dramatically improved because of investment in network upgrades, and the company has been well-regarded for its broadband service ever since.[3] But the proposed new owner of Cablevision – Altice, NV — has sought “cost savings” from cuts totaling $900 million a year, which will almost certainly devastate that provider’s future investments, its engineering and repair crews, and customer service.[4]

At least downstate New York has the prospect for +100Mbps broadband service. In upstate New York, three providers define the broadband landscape for most cities and towns:

  • Time Warner Cable dominates upstate New York with its cable broadband service and has the largest market share for High Speed Internet. As of today, Time Warner Cable’s top broadband speed outside of New York City is just 50Mbps, far less than the 1,000Mbps service cities in other states are now on track to receive or are already getting.[5]
  • Verizon Communications is the largest ILEC in upstate New York. Outside of its very limited FiOS service areas, customers depend on Verizon’s DSL service at speeds no better than 15Mbps, below the FCC’s minimum speed to qualify as broadband;[6]
  • Frontier Communications has acquired FiOS networks from Verizon in Indiana and the Pacific Northwest, and AT&T U-verse in Connecticut. Frontier has made no significant investment or effort to bring FiOS or U-verse into New York State. In fact, in its largest New York service area, Rochester, there are significant areas that can receive no better than 3.1Mbps DSL from Frontier. The vast majority of Frontier customers in New York do not receive service that meets the FCC’s minimum definition of broadband, and some investors predict the company is “headed for financial disaster.”[7]

The competitive markets the DPS staff envisions in its report to the Commission are largely a mirage. When an ILEC like Frontier Communications admits its residential broadband market share “is less than 25% in our 27 states excluding Connecticut,” that is clear evidence the marketplace has rejected Frontier’s legacy DSL service and does not consider the company an effective competitor.[8]

While incumbent cable and phone companies tout ‘robust competition’ for service in New York, if the Commission investigated the market share of Time Warner Cable upstate, it would quickly realize that ‘robust competition’ has been eroding for years, with an ongoing shift away from DSL providers towards cable broadband.[9]

Frontier’s primary market focus is on rural communities where it often enjoys a monopoly and can deliver what we believe to be inadequate service to a captive customer base. The company is currently facing a class action lawsuit in West Virginia, where it is alleged to have failed to provide advertised broadband speeds and delivers poor service.[10]

Verizon’s ongoing investment in its legacy wireline network (and expansion of DSL to serve new customers) has been regularly criticized as woefully inadequate.[11] From all indications, we expect the company will eventually sell its legacy wireline networks, particularly those upstate, within the next 5-10 years as it has done in northern New England (sold to FairPoint Communications) and proposes to do in Texas, California, and Florida.[12] (Verizon also sold off its service areas in Hawaii, West Virginia, and much of its territory acquired from GTE.)

Across New York, service problems and controversial deals between telecom providers have made headlines. Here are just a few:

  1. Superstorm Sandy’s impact on Verizon’s legacy wireline network on Fire Island and in other downstate communities left many without service. Instead of repairing the damage, Verizon proposed to scrap its wireline network and substitute inferior wireless service with no possibility of wired broadband.[13] The DPS received a large number of comments from the public and local elected officials fiercely opposed to this proposal, one that Verizon eventually withdrew in the face of overwhelming opposition.[14]
  2. There are growing allegations Verizon may be underspending on its legacy wireline network and even worse, may be misallocating costs and revenues to deceive the Commission.[15] Some allege much of the company’s ongoing investments, charged to the wireline operation, in reality are for the benefit of its wireless network. This may have allowed Verizon Communications/New York to claim significant losses on its wireline books the company then argued justified rate increases on ratepayers.[16] A full scale accounting of Verizon’s books is essential for all concerned and corrective action may be necessary if these allegations are proven true.
  3. Verizon’s foot-dragging on FiOS buildouts in New York City led to a damning audit report commissioned by New York City Mayor Bill de Blasio this summer and oversight hearings were held last week by the City Council of New York.[17] [18] Despite Verizon’s creative definition of “homes passed,” a substantial number of New Yorkers cannot receive the benefits of “today’s networks” the DPS staff refers to. Instead, many are stuck with poorly-performing DSL or no service at all.[19] Regardless of whether fiber passes in front of, over, in between, or behind buildings, Verizon signed an agreement compelling them to give customers a clear timeline to establish FiOS service. It is apparent Verizon is not meeting its obligations.[20]
  4. The proposed sale of Time Warner Cable to Comcast led the Commission’s staff to admit the majority of respondents to requests for public input were strongly opposed to the merger and without substantial modifications concluded would not be in the public interest.[21] Comcast eventually withdrew its proposal in the face of overwhelming opposition.
  5. The proposed sale of Time Warner Cable to Charter Communications, where the DPS staff concluded as the application stood, there would be no public interest benefits to the transaction.[22]

Those are just a few examples of why aggressive oversight of telecommunications is critical for all New Yorkers. In most of these examples, the DPS never ruled one way or the other. The companies individually made their own decisions, and we believe they would have decided differently if they did not face grassroots opposition from consumers.

New Yorkers deserve an active DPS prepared to aggressively represent our interests, ready to investigate what Verizon is doing with its legacy wireline network, legacy wired broadband services, FiOS and Verizon Wireless. With Time Warner Cable having such a dominant presence in western and central New York, its sale should never be taken lightly, as it will impact millions of New Yorkers for years to come.

While the DPS seems prepared to passively wait around to discover what Time Warner Cable, Frontier and Verizon are planning next, the rest of the country is getting speed upgrades New York can only dream about.

Google Fiber and AT&T, among others, are aggressively rolling out 1,000Mbps fiber service upgrades in other states, while a disinterested Verizon refuses to invest further in FiOS expansion, leaving millions of New York customers with nothing better than DSL.

The lack of significant competition upstate is why we believe Time Warner Cable has not yet chosen any market in New York except New York City for its Maxx upgrade program, which offers substantially faster speeds and better service.[23] There is no compelling competitive reason for Time Warner to hurry upgrades into areas where they already enjoy a vast market share and no threat of a broadband speed race. So much for robust competition.

Charter’s proposed acquisition of Time Warner Cable proposes a modest upgrade of broadband speeds to 60-100Mbps, but as we wrote in our comments to the DPS regarding the merger proposal, upstate New York would be better off waiting for Time Warner Cable to complete its own Maxx upgrades over what will likely be 100% of its footprint in the next 24-30 months.[24] Time Warner Cable Maxx offers maximum broadband speeds three times faster than what Charter proposes for upstate New York, while also preserving affordable broadband options for those less fortunate. Approving a Charter buyout of Time Warner Cable will only set upstate New York back further.

We confess we were bewildered after reviewing the initial staff assessment of telecommunications services competition in New York. Its conclusions simply do not reflect reality on the ground, particularly in upstate communities.

It was this type of incomplete analysis that allowed New York to fall into the trap of irresponsible deregulation and abdication of oversight that has utterly failed to deliver the promised competition that would check rate hikes, guarantee better customer service, and provide New York with best-in-class service. In reality, we have none of those things. Rates continue to spiral higher, poor customer service continues, and New York has been left behind with sub-standard broadband that achieves no better than 50Mbps speeds in most upstate communities.

This summer, the American Customer Satisfaction Index told us something we already know. Americans dislike their cable company more than any other industry in the nation.[25] A survey of more than 14,000 customers by ACSI found service satisfaction achieving a new all-time low, scoring 63 out of 100.

“Customers expect a lot more than what the companies deliver,” said ACSI managing director David VanAmburg, who called poor customer service from cable operators “endemic.”

This year, Time Warner Cable again scored the worst in the country. As the only cable provider for virtually all of upstate New York, if residents in New York are given a choice between Time Warner Cable and the phone company’s slow-speed DSL, they are still likely to choose Time Warner Cable, but only because they have no other choices for broadband that meets the FCC definition of broadband.

Providers are quick to suggest consumers can turn to so-called competitors like satellite broadband or wireless Internet from mobile providers. They conveniently ignore the fact satellite-delivered Internet is such a provider of last resort, less than 1% of New Yorkers choose this option. Those that have used satellite broadband tell the companies providing it they rarely achieve the claimed speeds and are heavily speed throttled and usage capped.[26] It’s also costly, particularly when measuring the price against its performance.

Mobile Internet, which some ILECs have advocated as a possible replacement for rural wireline networks, is also a very poor substitute for wired Internet access. Wireless broadband pricing is high and usage allowances are low. Attempts to convince New Yorkers to abandon Verizon landline service in favor of Verizon’s 4G LTE wireless replacement have led to consumer complaints after learning their existing unlimited Verizon DSL service would be substituted for a wireless plan starting at $60 a month with a 10GB usage allowance.[27]

A customer with a 6Mbps DSL line from Verizon consuming 30GB of usage a month – hardly a heavy user – pays Verizon $29.99 a month for DSL service during the first year. In contrast, that same customer using Verizon Wireless’ home 2-5Mbps wireless LTE plan will pay $120 a month – four times more, with the added risk of incurring a $10 per gigabyte overlimit fee for usage in excess of their allowance.[28]

None of this information is a secret, yet it seems to have escaped the notice of the DPS staff in its report. Part of the reason why may be the complete lack of public input to help illuminate and counter incumbent providers’ well-financed public and government relations self-praise campaigns. If only actual customers agreed with their conclusions, we’d be well on our way to deregulation-inspired broadband nirvana.

Except New Yorkers do not agree all is well.

Consumer Reports:

Our latest survey of 81,848 customers of home telecommunications services found almost universally low ratings for value across services—especially for TV and Internet. Those who bundled the three services together for a discount still seemed unimpressed with what they were getting for their money. Even WOW and Verizon FiOS, which got high marks for service satisfaction, rated middling or lower for value, and out of 14 providers, nine got the lowest possible value rating.

What is it about home telecommunications that leaves such a sour taste in customers’ mouths? When we asked Consumer Reports’ Facebook followers to tell us their telecom stories, the few happy anecdotes of attentive service technicians and reliable service were overwhelmed by a tidal wave of consumer woe involving high prices, complicated equipment, and terrible service.[29]

The effective competition that would rely on market forces to deter abusive pricing and poor customer service is simply not available in a monopoly/duopoly marketplace. New entrants face enormous start-up costs, particularly provisioning last-mile service.

The nation’s telephone network was first constructed in the early half of the last century by providers guaranteed monopoly status. The cable industry developed during a period where regulators frequently considered operators to be a “natural monopoly,” unable to survive sustained competition.[30] Many cable operators were granted exclusive franchise agreements which helped them present a solid business case to investors to fund a costly network buildout. The end of franchise exclusivity happened years after most cable operators were already well established.

Today, those marketplace protections are unavailable to new entrants who face a variety of hurdles to achieve success. Some are competitive, others are regulatory. Google Fiber, which provides competitive service in states other than New York, publishes a guide for local communities to make them more attractive prospects for future Google Fiber expansion.[31]

For many overbuilders, pole attachment issues, zoning and permitting are significant obstacles to making new service available to residential and commercial customers. New York must ensure pole owners provide timely, non-discriminatory, and reasonable cost access. Permitting and zoning issues should be resolved on similar terms to speed network deployment.

Because a long history of experience tells us it is unreasonable to expect a competing telephone or cable company to enter another provider’s territory, in many cases the only significant possibility for competition will come from a new municipal/co-op/public-owned broadband alternative.

The hurdles these would-be providers face are significant. Incumbent provider opposition can be substantial, especially on a large-scale buildout. In rural areas, incumbents can and do refuse to cooperate, even on projects that seek to prioritize access first to unserved/underserved areas currently bypassed by those incumbents.

The effort to wire the Adirondack Park region is a case in point. Time Warner Cable has refused to provide detailed mapping information about their existing network, making it difficult to assess the viability of a municipal and/or a commercial broadband expansion project into these areas. Time Warner Cable maintains it has exclusivity to granular map data showing existing networks for “competitive reasons,” effectively maintaining an advantageous position from which it can strategically apply for state broadband expansion funding to expand its network using public funds.

Time Warner Cable benefits from access to publicly-owned rights of way and sanctioned easements. Without this access, their network would likely be untenable. As a beneficiary of that public access, making granular map data available to broadband planners is a fair exchange, and nothing precludes Time Warner from building its network into those unserved/underserved areas – something that might deter a would-be competitor’s business argument to overbuild a high-cost, rural area. The Commission should ask itself how many rural New York communities have two (or more) competing cable companies serving the same customers. If the answer is none, Time Warner Cable does not have a valid argument.

There is ample evidence the Commission needs to begin a full and comprehensive review of telecommunications in this state. It must build a factual, evidence-based record on which the Commission can build a case that oversight is needed to guarantee New Yorkers get the high quality telecommunications services they deserve.

Broadband and telephone service is not just a convenience. In September 2015, the Obama Administration declared broadband was now a “core utility,” just as important as telephone, electric, and natural gas service. Isn’t it about time the Department of Public Service oversee it as such?[32]

Respectfully submitted for your consideration,

Phillip M. Dampier

Director, Stop the Cap!

[1] http://stopthecap.com/2015/10/19/n-y-city-council-investigates-verizon-foot-dragging-fios-possible-contract-violations/
[2] http://www.wsj.com/articles/SB10001424052702303410404575151773432729614
[3] https://www.fcc.gov/reports/measuring-broadband-america-2014
[4] http://variety.com/2015/biz/news/altice-group-patrick-drahi-cablevision-bid-1201599986/
[5] http://www.pcmag.com/slideshow/story/310861/if-you-want-gigabit-internet-move-here/1
[6] https://www.fcc.gov/document/fcc-finds-us-broadband-deployment-not-keeping-pace
[7] http://seekingalpha.com/article/2888876-frontier-communications-headed-for-financial-disaster
[8] http://seekingalpha.com/article/2633375-frontier-communications-ftr-ceo-maggie-wilderotter-q3-2014-results-earnings-call-transcript?part=single
[9] http://www.leichtmanresearch.com/press/051515release.html
[10] http://www.wvgazettemail.com/article/20141020/GZ01/141029992
[11] http://www.cwa-union.org/news/entry/cwa_calls_for_regulators_to_investigate_verizons_refusal_to_invest_in_landl
[12] http://stopthecap.com/2015/05/05/fla-utility-says-negotiations-with-verizon-make-it-clear-verizon-will-exit-the-wireline-business-within-10-years/
[13] http://money.cnn.com/2013/07/22/technology/verizon-wireless-sandy/
[14] http://documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?Mattercaseno=13-C-0197
[15] http://www.cwa-union.org/news/entry/cwa_calls_for_regulators_to_investigate_verizons_refusal_to_invest_in_landl
[16] http://newnetworks.com/publicnn.pdf/
[17] http://www1.nyc.gov/office-of-the-mayor/news/415-15/de-blasio-administration-releases-audit-report-verizon-s-citywide-fios-implementation
[18] http://arstechnica.com/business/2015/10/verizon-tries-to-avoid-building-more-fiber-by-re-defining-the-word-pass/
[19] http://www.nytimes.com/2015/08/27/nyregion/new-york-city-and-verizon-battle-over-fios-service.html?_r=0
[20] http://www.nyc.gov/html/doitt/downloads/pdf/verizon-audit.pdf
[21] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={0A5EAC88-6AB7-4F79-862C-B6C6B6D2E4ED}
[22] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId=%7BC60985CC-BEE8-43A7-84E8-5A4B4D8E0F54%7D
[23] http://www.timewarnercable.com/en/enjoy/better-twc/internet.html
[24] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={FCB40F67-B91F-4F65-8CCD-66D8C22AF6B1}
[25] http://www.marketwatch.com/story/the-most-hated-cable-company-in-america-is-2015-06-02
[26] https://community.myhughesnet.com/hughesnet?topic_list%5Bsettings%5D%5Btype%5D=problem
[27] http://www.verizon.com/home/highspeedinternet/
[28] http://www.verizonwireless.com/b2c/lte-internet-installed/
[29] http://www.consumerreports.org//cro/magazine/2014/05/how-to-save-money-on-triple-play-cable-services/index.htm
[30] http://www.citi.columbia.edu/elinoam/articles/Is_Cable_Television_Natural_Monopoly.pdf (p.255)
[31] https://fiber.storage.googleapis.com/legal/googlefibercitychecklist2-24-14.pdf
[32] http://thehill.com/policy/technology/254431-obama-administration-declares-broadband-core-utility-in-report

Comcast, Frontier: It’s Too ‘Hilly and Woodsy’ to Bring Broadband to Rural Connecticut

no signalAn aversion of open, hilly landscapes and trees is apparently responsible for keeping residents of rural Connecticut from getting broadband service from the state’s two dominant providers — Comcast and Frontier Communications.

In the Litchfield Hills of northwestern Connecticut, you can visit some of the state’s finest antique shops and Revolutionary War-era inns, tour vineyards and even establish roots in the Upper Naugatuck Valley in towns like Barkhamsted, Colebrook, Goshen, Hartland, Harwinton, Litchfield, Morris, New Hartford, Norfolk, Torrington, and Winchester. Just leave your cellphone, tablet, and personal computer behind because chances are good you will find yourself in a wireless dead spot and Internet-free zone.

Obtaining even a smidgen of cell phone service often means leaning out a second story window or worse, climbing the nearest church steeple. The wealthiest residents, often second-homeowners from New York or California, can afford to spend several thousand dollars to entice the cable company to extend a coaxial cable their way or buy commercial broadband service at eye-popping prices from Frontier Communications, which acquired AT&T’s wireline network in the state. But for many, dial-up Internet remains the only affordable or available option.

Despite the area’s significant number of high income residents ready and willing to pay for service, Comcast and Frontier blame hilly terrain and dense woods for staying away. Those excuses get little regard from residents who suggest it is all about the money, not the landscape.

Northwest Connecticut region is shown in green and the Litchfield Hills region in blue.

Broadband-challenged areas in northwest Connecticut are shown in green and the often “No signal” and “No Internet” Litchfield Hills region is shown in blue.

Despite the need for service, deregulation largely allows cable and phone companies to decide where to offer broadband service, and arguments about fulfilling a public need and performing a community service don’t get far with Wall Street and shareholders that constantly pressure companies to deliver profits, not expensive investments that may never pay off.

State Rep. Roberta Willis (D-Salisbury) told the Register Citizen News the status quo is not acceptable — telecommunications companies are not doing enough to build out their networks.

“You just can’t say it’s the topography and walk away,” she told the newspaper. “If electricity companies were deregulated like this there would be no electricity in my district.”

Comcast spokeswoman Laura Brubaker Crisco claims the company extended cable service nearly 62 miles in northwest Connecticut since 2005 (ten years ago) and completed nearly 100 projects extending fiber more than 10 miles in the past two years. But many of those projects overhauled Comcast’s existing middle-mile network and extended cable service to profitable new markets serving commercial customers, especially office parks and commercial storefronts. Comcast’s other priority was to reach new high-income residential developments being built as the area continues to grow. Rural customers who could not meet Comcast’s Return On Investment formula in 2005 are still unlikely to have service in 2015 unless population density increases in their immediate area.

Connecticut's effort to extend gigabit fiber statewide is dismissed as a waste of money by incumbent cable operators.

Connecticut’s effort to extend gigabit fiber statewide is dismissed as a waste of money by incumbent cable operators.

Crisco admits Comcast does not wire low density areas and isn’t surprised other providers won’t either.

Frontier prefers to blame the area’s topography for keeping broadband out.

David Snyder, vice president for engineering for the east region of Frontier Communications, told the newspaper “it’s just natural the investment and the time become more challenging.”

Frontier does say it has expanded broadband to 40,000 additional households in Connecticut since taking over for AT&T a year ago. But nobody seems to know exactly who can get broadband in the state and who cannot. The have-nots are the most likely to complain, and those businesses that serve visitors are in peril of losing business without offering reasonable Wi-Fi or Internet access. Rural families with school-age children are also at risk from having their kids fall behind those that can get broadband.

Wireless Internet Service Providers, which offer long-range wireless broadband in rural areas, complain the federal government is wasting money on studies instead of helping to underwrite solutions that can quickly bring Internet access to the rural masses.

Others believe talking to Frontier and Comcast is futile. They prefer to follow the lead of western Massachusetts, where 24 small communities across the region have joined forces to build a public fiber to the home broadband network. One estimate suggests 22 Connecticut towns covering 200,000 residents could be reached with a bond-financed fiber network completed by 2018. That network would likely reach more unserved customers than Frontier or Comcast will elect to serve over the next three years combined.

A separate effort to establish gigabit fiber broadband across the state — the CT Gig Project — promptly ran into a buzzsaw of opposition, primarily from incumbent telecommunications companies that refuse to offer that service now. With a threat to current profitable business models, it was not unexpected to hear opposition from Paul Cianelli, CEO of the New England Cable & Telecom Association — a cable company lobbying group.

He called public broadband unnecessary and “potentially disastrous.” He wants assurances no government subsidies or loan guarantees are given to the project. He also said providing gigabit service was unnecessary and faster Internet speeds were not important to the majority of customers in the state. Public broadband proponents respond Cianelli should tell that to the residents of Litchfield Hills and other unserved and underserved communities.

Clear WiMAX Ends Nov. 6: You Don’t Have to Go Home But You Can’t Stay Here

If you are among the dwindling number of customers still using Sprint’s Clearwire 4G WiMAX service, the wireless provider would like you to leave.

After about a year of successive warnings it was preparing to decommission its aging WiMAX network in favor of LTE service, nobody can accuse Sprint of not giving its customers fair warning. The top banner on the Clear.com website is now festooned with red text giving customers one last chance to move on.

clear bye bye

In brief, the last Sprint WiMAX cell tower will cease functioning Nov. 6 2015 at 12:01am EST. Sprint is repurposing many of its former WiMAX cell sites to support expanded 4G LTE service in the carrier’s perennial network makeover.

wimaxDespite this, there still remains a loyal user base for WiMAX service — many in semi-rural areas using the service until the last days for wireless home broadband. The alternative is usually very expensive mobile data service from Verizon, AT&T, Sprint or T-Mobile, or one of several resellers. But usage caps can be stingy and overlimit fees high.

We also found several businesses, including a small auto servicing chain in western New York, still occasionally relying on Clear WiMAX-powered guest Wi-Fi, apparently unaware the service is soon to disappear. Time Warner Cable is often the chosen replacement for Clear’s business customers in the northeast as the cable company aggressively markets business broadband service coupled with free customer/public Wi-Fi access for around $90 a month.

Although WiMAX is nearing extinction in the United States, it remains in service in places like Ukraine and Azerbaijan. In Calgary, Platinum Communications continues to offer WiMAX wireless broadband in rural parts of Alberta between Edmonton and Calgary and large sections of the flat, open prairie of southeastern Alberta, including the communities of Lethbridge, Brooks, and Medicine Hat.

Thurman, N.Y. White Space Rural Broadband Wins “Most Innovative Project Award”

rural connectOne of the few “white space” wireless broadband projects deployed in the United States to deliver broadband to rural residents has won the “Most Innovative Project” award, presented during the 2015 New York State Broadband Summit.

The collaborative project between the Town of Thurman, Rainmaker Network Services and Frontier Communications to offer high-speed Internet access to around 65 residents is seen as a successful private-public collaboration to address rural broadband issues in sparsely populated areas.

Frontier Communications provided the trunk line for the service and a $200,000 state grant helped acquire the infrastructure to power the wireless network, which works over unoccupied UHF television channels. The 12 currently subscribing households pay $50 a month for broadband, plus a $292 equipment fee when they sign up. Plans to reach more households have been delayed by a handful of town board members opposed to the project and residents who refuse to grant easements to place equipment on private property. The project had to be re-engineered to workaround some of these difficulties.

PrintDespite the delays, there are estimates another 40-50 households will be able to get the service by the end of summer.

Customers love the service, which is faster than traditional Wireless ISP technology, and comes without speed throttling or data caps.

“By implementing an innovative white space network, Thurman found a way to provide Internet service to a rural area without the need for a large amount of costly infrastructure,” said David Salway, executive director of the New York Broadband Program Office. “Where there was once only dial-up and satellite service, Thurman citizens will have reliable high-speed Internet at affordable rates.”

 http://www.phillipdampier.com/video/Carlson Wireless Technologies Rural Connect 3-2015.mp4

Carlson Wireless Technologies explains how next generation white space wireless broadband can be a cost-effective solution to the digital divide. (3:41)

As Clearwire Service Prepares to Shutdown, Customer Service Agents Suggest Comcast as Alternative

clear-logoClearwire users seeking alternatives after the wireless ISP shuts down its WiMAX network this fall are surprised to hear some Clear customer service representatives recommending Comcast as their best option.

Stop the Cap! reader Randall Page has been looking for a new ISP after receiving a notification from Clearwire its network is ceasing operations before the end of this year and he needs to find a different provider:

Dear Valued CLEAR/Clearwire Customer,

You are receiving this notice because our records show you are subscribed to services on the CLEAR 4G (WiMAX) Network or Clearwire Expedience network. Sprint is in the process of implementing major enhancements to the Sprint 4G LTE Network, including the deployment of Sprint Spark, an enhanced LTE network capability, by repurposing the CLEAR 4G (WiMAX) Network and Clearwire Expedience Network. As a valued customer, we are providing you formal notice that Sprint will cease operating the CLEAR 4G (WiMAX) Network and Clearwire Expedience Network on November 6, 2015 at 12:01AM EST.

What this means to you:

  • Sprint will no longer support CLEAR 4G WiMAX and Clearwire Expedience devices or services.
  • Your CLEAR 4G WiMAX and Clearwire Expedience devices and services will no longer work, including your ability to contact 9-1-1.
  • You should not return your device(s).

To discuss your options or learn more, please call 1-888-888-3113.

Thank you for your business.

Sincerely,
CLEAR/Clearwire Wireless

clearsprint

The Page family has used Clearwire for years to get Internet service in their rural home near Lynden, Wash. The service was affordable and more than adequate for the occasional web browsing and e-mail Page’s parents rely on. After learning the service was being discontinued, Page called Clearwire customer service to learn what other options were available.

“They claim they will essentially match your current level of Clearwire service on the Sprint network,” Page told Stop the Cap! “Although Clearwire originally advertised unlimited service, the representative was not willing to match that through Sprint. Instead, they built a recommended usage plan based on reviewing actual use over the last several months.”

Clear/Clearwire's modems and routers were designed to work with their WiMAX network, which is being decommissioned. This equipment will be obsolete and cannot be reused on a new provider.

Clear/Clearwire’s modems and routers were designed to work with their WiMAX network, which is being decommissioned. This equipment will be obsolete and cannot be reused with a new provider.

Page was offered a 30GB plan adequate for his parents, but the quoted price of $110 a month was more than twice the price of Clearwire. The family also had to pay $200 for a replacement modem compatible with Sprint’s LTE network to replace the Clearwire WiMAX modem that isn’t.

“No consideration for Clearwire customers, no special promotions, no loyalty discounts, nothing for customers like us who have been with Clearwire for almost five years,” Page complained. “When Alltel was sold off and their network was changed, customers were given a free replacement phone as a courtesy, but Sprint seems to care less about us.”

Sprint acquired Clearwire in 2013 mostly for its massive spectrum holdings in the 2.5GHz band. After the deal closed, Sprint fired 75% of Clearwire’s workforce and began planning the end of Clearwire’s legacy WiMAX network, also familiar to first generation 4G Sprint customers who used it before the launch of LTE service.

Clearwire’s higher frequency spectrum never penetrated buildings well and did not reach as far as wireless signals on lower frequencies, which meant Clearwire was required to build a large cellular network to deliver reasonable service. Sprint inherited 17,000 Clearwire-enabled cell sites in the deal, many deemed redundant. A Sprint filing with the Securities & Exchange Commission indicated Sprint was shutting down no fewer than 6,000 of those sites by the end of this year, with the remaining transitioned to TD-LTE service as part of the Sprint Spark project.

The change will allow Sprint to better monetize its 2.5GHz spectrum by selling usage-based plans and more expensive home wireless broadband service. It’s the second major wireless technology shutdown organized by Sprint. In 2013, Sprint shut off the last 800MHz iDEN Nextel cell site inherited from its acquisition of Nextel. Sprint now provides LTE 4G service over the frequencies formerly used by Nextel.

Page was not happy with Clearwire’s alternative through Sprint, and remarkably the representative then suggested his family should sign up for Comcast service instead.

“I was floored to hear a representative working on behalf of Sprint recommend Comcast,” Page said.

It isn’t the first time Clearwire has done this:
clearwire sprintClearwire’s own Facebook page was abandoned in 2013, presumably right after its sale to Sprint was complete. Stranded customers are complaining about the impending loss of service and the lack of alternative options and information.

Wireless 'n WiFi's high usage data plan has gotten good reviews from Stop the Cap! readers,  although it is expensive.

Wireless ‘n WiFi’s high usage data plan has gotten good reviews from Stop the Cap! readers, although it is expensive and relies on Sprint’s less-than-great network.

Unfortunately, the Page home is not serviced by Comcast and DSL from CenturyLink is not an option either. Page and his immediate neighbors are instead joining a group “family plan” on a wireless carrier and will share a Wi-Fi hotspot that can reach three homes. It technically violates the terms and conditions of most family plans to share a connection in this way but it is the only affordable choice the families have for now.

Those rural Clearwire customers who cannot subscribe to cable or DSL broadband might also explore some options from Wireless ‘n WiFi, which sells high limit 3G/4G LTE plans that work on Sprint’s 3G and 4G networks.

Their current plan offers up to 60GB of usage per month, up to 30GB of which can come from using Sprint’s 3G network. The service costs a still steep $109.99 a month (including all taxes and fees) and comes with additional startup costs:

  • Rental of NetGear 341u USB modem and MBR1200B Cradlepoint Wi-Fi Router ($100 equipment deposit required, refunded when equipment returned)
  • $49.99 Activation Fee
  • $8.95 Priority Mail Shipping (for Equipment)
  • $268.93 total startup cost includes all charges referenced above (not including monthly service fee)

Service is month-to-month, no term contract. Overlimit fee is $5/GB.

freedompop plans

Some lighter users report reasonably priced service is available from FreedomPop, as long as you are careful to avoid over 10GB of usage per month ($59.99) and you turn off revenue generators like automatic top-off and other various extras they pitch (including data rollover if you find you use up most of your monthly allowance anyway).

Another Reminder Wireless ISPs are Not a Good Choice if a Fiber Alternative is Possible

Rationing Your Internet Experience: Stick to e-mail and web pages.

Rationing Your Internet Experience: Stick to e-mail and web pages.

This week’s news that the alleged owner of a Wireless ISP serving parts of New England may have fled the country to avoid an investigation by the Securities and Exchange Commission on an unrelated digital currency matter has left about 1,000 Vermont customers of GAW Wireless with no certain future for their Internet Service Provider.

As the “Geniuses At Work” came under pressure from public accusations the company was running a scam on digital currency investors, so went the performance of GAW Wireless. In February, a two-week service outage left many customers without telephone and Internet service. This month, e-mail accounts stopped working for some and nobody appears to be answering the firm’s customer service line. Even Vermont’s Attorney General cannot find the owner.

While Wireless ISPs (WISPs) can be a good option for North America’s unserved rural communities, they are not always the best choice, especially as customers continue to gravitate towards high bandwidth applications like Netflix.

Some rural WISPs have kept up with customer demand and continue to offer good service. Others have educated customers about being a good steward of a limited resource by showing courtesy to other customers by self-limiting heavy traffic applications to off-peak hours.

But other providers have chosen usage-discouraging data caps or usage-based billing to cover up for their inadequate infrastructure investment. In Nova Scotia, Eastlink’s new 15GB monthly usage cap on rural customers is nothing short of Internet rationing, completely ignorant of the fact most customers have moved beyond the Internet applications Eastlink envisioned them using when it built its network in 2006. Nearly a decade later, it is ridiculous to suggest customers should be happy continuing to pay almost $50 a month for a 1.5Mbps connection designed for e-mail, basic web browsing, and occasional dabbling into downloads, music, and video.

Come for the view but don't stay for the broadband.

Come for the view but don’t stay for the wireless broadband.

Some angry customers suspect Eastlink is simply being greedy. We believe it is more likely Eastlink’s existing wireless network is no longer adequate for the needs of Nova Scotians (or practically anybody else in 2015). The evidence that congestion is the real problem was supplied by customers who have noticed the network’s performance has slowed over the last few years. That is a sign the network is either oversold — too many customers trying to share the same bandwidth limited resource — or has become congested because of the growth of Internet traffic generally. It might even be both.

Implementing draconian usage caps only alienates customers and suggests Eastlink wants to collect as much revenue as it can from a resource that should either be vastly upgraded or retired in favor of superior technology. We have not seen anything from Eastlink that suggests major upgrades are on the way. In fact, the only conclusion we can make from Eastlink’s public comments is they think equal access to an inadequate resource is fairer than actually upgrading it.

Eastlink claims nobody could have envisioned Internet traffic growth from the likes of Netflix. In fact, equipment manufacturers like 3Com and Cisco were issuing scare stories about Internet brownouts and future traffic exafloods since December, 1995 — the year before Eastlink planned its Nova Scotia wireless network. Smart network planners have kept up with demand, which has been made easier by technology improvements accompanying the increased traffic. A good ISP recognizes upgrades are continual and essential to keep up with customer needs. A bad ISP introduces a rationing usage cap and claims it is only trying to be fair to every customer.

Phillip "Fiber is Good for You" Dampier

Phillip “Fiber is Good for You” Dampier

Usage caps and usage-based billing have never been about “fairness.” We’ve seen all sorts of usage enforcement schemes imposed on customers since 2008 when Stop the Cap! was founded. In each instance, usage caps were only about the money. Eastlink customers will not see any rate decrease as a result of its rationing plan, giving users less value for their broadband dollar. If an Eastlink customer confines use of their high traffic applications to the overnight hours, when they would cause little or no congestion, they will still eat into their monthly usage allowance.

All the benefits of usage caps accrue to Eastlink, either by reducing traffic on its network and allowing the company to delay necessary upgrades, or by pocketing the inevitable overlimit fees, which may or may not go towards upgrades. In our experience, the case for spending capital on network upgrades has never depended on overlimit fees collected from subscribers squirreled away in a separate bank account.

This is why communities in Vermont, Nova Scotia and beyond should strongly consider investing in fiber optics for broadband delivery and consider wireless only for the least populated areas. A broadband project in rural western Massachusetts can offer a guide to resolving the ongoing problem of unserved or underserved communities ignored by commercial providers. Deprived of upgrades from Verizon and shunned by Comcast and Time Warner Cable, the residents of these towns continue to vote overwhelmingly in favor of fiber optics.

The WiredWest approach is a solid solution. The initiative secures bond authorizations from each participating town in a public vote backed by deposits of $49 per household, held in escrow to be later used to cover the first month of broadband service when the service launches. Each town must have at least a 40% buy-in from residents, providing strong evidence the project has a solid customer base, is financially viable, and can recover construction costs and pay off the bonds estimated at $100-120 million within a reasonable amount of time. The state legislature contributed an additional $40 million dedicated to last mile infrastructure — the cost to wire each home or business. (In contrast, Nova Scotia and the federal government spent $34 million subsidizing the Eastlink wireless network in 2007 that has not aged well. Fiber optics is infinitely upgradable.) By choosing fiber optics, instead of getting rationed, slow speed, or no Internet service, WiredWest towns will be able to subscribe to 25Mbps for $49 a month, 100Mbps service for $79, or 1,000Mbps for $109 a month
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In comparison, Eastlink charges $46.95 a month for “up to” 1.5Mbps with a 15GB cap and GAW Wireless (when working) charges $39.95/mo for “up to 7Mbps.”

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