Some financially challenged customers subscribed to legacy DSL from Frontier Communications are finding they cannot qualify for the Biden Administration’s emergency internet discount program because their internet service is too slow.

WHEC-TV’s Jennifer Lewke heard from one Rochester, N.Y., area Frontier customer frustrated to discover the phone company refused to accept their application.

The discount comes from the Emergency Broadband Benefit, a temporary program offering financially distressed consumers $50 off their monthly internet bill until the funding for the program runs out.

The roadblock comes from Frontier, which created its own rule that only customers with 25 Mbps or faster internet service subscribed to select tiers of service can qualify for the discount. That eliminates many of Frontier’s most loyal DSL customers that have stayed with the company for over a decade, despite often getting internet speeds less than 10 Mbps.

News10NBC:

John Derycke of Rochester relies on the internet for a lot.

“My [Frontier] plan is $54.99 and then they tack on a $6.99 infrastructure charge,” he told News10NBC.

[…]

“I went to the site to verify eligibility, I qualify and that was on May 11, I called Frontier and I spoke to Monique and she told me everything’s great we’re good to go,” Derycke said.

But when his bill came the next month, there was no credit.

He didn’t like what he was told when he called.

“After being put on hold for 20 minutes, I finally got back with the woman and she immediately said you don’t qualify because you have 24 MB and you need 25,” Derycke said.

He says he then asked to talk with a supervisor who basically told him the same thing.

Derycke says he searched the EBB page and information and couldn’t find a requirement that a customer have a plan with a certain level of megabits to qualify.

Based on that phone call with Frontier, Derycke would have to switch to the dominant internet provider in western New York, Charter Spectrum, just to get the $50 monthly credit. Based on current promotions, that would likely leave Derycke paying nothing for internet service until the EBB program runs out of money, likely by the end of this year. After his Spectrum new customer promotion expires, Derycke would likely have a higher internet bill than he started with from Frontier. 

A Frontier spokesperson told News10NBC Frontier might find a solution sooner than that:

“While a limited number of customers have a grandfathered Frontier product that is not eligible for the Emergency Broadband benefit, we are committed to transitioning these customers to comparable eligible offerings so they can receive the financial benefits. Frontier is working closing with our customer to resolve the situation.”

Such limitations on the EBB program do not come from the federal government. Internet providers voluntarily participate in the EBB program, and can set whatever restrictions, terms, and conditions they would like to qualify.

WHEC-TV in Rochester, N.Y. reports some Frontier customers with legacy DSL internet service may find themselves locked out of the Biden Administration’s internet benefit program. (3:20)

America’s most costly large cable internet service provider is Sparklight, formerly known as Cable One. Its internet plans are usually data-capped and it barely offers new customers a pricing break before high regular prices apply. Sparklight primarily services small cities and towns, many income-challenged, in the middle of the country. Customers do not have much to rave about, because Sparklight puts its own profits far ahead of its customers. The cable operator was among the first to slap on data caps and was the nation’s most aggressive at getting rid of costly cable television channels.

About the only thing that does move Sparklight’s pricing is the presence of a formidable competitor. In Meridian and Garden City, Ida., TDS Fiber (formerly TDS Telecom) has been bringing gigabit fiber to the home service to area residents at prices low enough to motivate Sparklight customers to abandon the cable company. That motivated Sparklight to improve their plans and lower prices.

First, let’s examine the internet rate card for ordinary Sparklight customers typically stuck choosing either the cable company or DSL from Frontier, AT&T, or Windstream:

Sparklight regular pricing nationwide

Notice the entry-level internet plan (100/10 Mbps) costs $55 a month, does not mention the $10.50/mo modem rental fee (required if you choose the company’s Wi-Fi service), an internet service surcharge of $2.75/mo (not charged in all areas), and a stingy data cap of just 350 GB, which is at least 100 GB less than what the average U.S. broadband household now consumes each month. Internet overlimit fees are $10 for each additional block of 100GB of data in excess of your allowance, up to a maximum of $50 a month. Unlimited service costs an extra $40 a month.

When you add it all up: for an unlimited (100/10 Mbps) internet service plan with in-home Wi-Fi, Sparklight charges $108.25 a month.

If you happen to live in a competitive service area, such as Meridian and Garden City, Ida., speeds are faster, prices are lower, and data caps are nowhere to be found:

Pricing for Sparklight in Meridian and Garden City, Ida.

Customers still face a $10.50/mo charge to lease a cable modem, and that $2.75/mo internet surcharge fee might also apply.

The prospect of competition could cut dramatically into company profits, which is one reason telecom companies are fiercely lobbying the Biden Administration not to fund municipal broadband projects or supply funds to a new competitor as part of the 2021 Infrastructure Plan.

President Biden

Large cable and telephone companies are applauding the Biden Administration’s compromise $65 billion broadband infrastructure plan, designed to reduce the number of rural Americans without access to broadband service.

Many industry lobbyists and Wall Street analysts were wary of earlier plans by the Administration to spend $100 billion or more on internet infrastructure expansion, because amounts that high were seen to likely attract major proposals from municipalities to construct their own independent broadband projects, some in direct competition with cable and phone companies. The Biden Administration had sought preferential treatment to fund public broadband projects, suggesting the direct competition they could bring would lower prices. Unlike for-profit phone and cable companies, municipal projects were “less pressured to turn profits” and would have a natural incentive to commit to serve entire communities.

Heavy lobbying from for-profit phone, cable, and wireless companies, largely directed at Republicans in the Senate, sought a much lower budget for broadband expansion in the $35 billion range and a commitment to discourage municipal broadband.

Last week the Administration and a small group of Senate Republicans settled on a $65 billion compromise measure, with many of the details still unavailable early this week. But big ISPs are already breathing a sigh of relief, convinced a slimmed-down compromise measure will choke off any existential competitive threat from municipal providers invading their turf.

Wall Street analysts predict the compromise measure will be too small to provide funding for competing major city municipal broadband networks and would continue the tradition of targeting funds on unserved, high-cost rural areas. Historically, this has resulted in funding going to nearby cable and telephone companies to subsidize expansion of existing networks into areas currently deemed too unprofitable to wire for service. But ample funds are still likely to be awarded to rural telephone and electricity co-ops to expand internet access.

Analysts expect the final measure will include a requirement to offer service at minimum speeds of 100 Mbps, which would be a challenge for wireless companies and rural phone companies seeking to expand DSL service. Most providers would likely have to use fiber optics to build networks consistently capable of delivering that speed. If the compromise measure only insists on 100 Mbps download speed, expect the cable industry to be relieved. If the minimum speed requirement is substantially relaxed to as low as 25 Mbps, that would also benefit wireless ISPs offering fixed wireless access.

Also unknown is whether the compromise measure still contains language overriding state laws that restrict or prohibit municipal broadband projects.

In an era when cable companies love to tout increasing internet speeds, one cable company is headed in the other direction, turning the clock back by announcing dramatic cuts in upstream internet speeds beginning in mid-July.

Altice USA’s Optimum made the announcement quietly in a footnote on their website, notifying new and existing customers that change service tiers after July 12, 2021 will experience upload speeds formerly as high as 40 Mbps cut in half or more. In one instance, customers that used to get 35 Mbps for uploads will now see that speed reduced to just 5 Mbps:

Optimum’s new downgraded speed plans.

This speed change affects customers still serviced by Optimum’s legacy coaxial cable network. Parent company Altice USA has been gradually replacing that older copper wire network with an all-new fiber to the home network, but customers that live in neighborhoods not yet reached by fiber will have to live with slower upload speeds or switch to Verizon FiOS, the fiber to the home network offered by Verizon in much of Optimum’s service area in suburban New York, New Jersey, and Connecticut.

You would never know about Optimum’s speed downgrades unless you carefully read the fine print.

Sen. Portman

Three moderate senators will reintroduce the latest in a line of broadband funding initiatives later today that would allocate $40 billion to expand rural internet access and provide subsidies to make service more affordable for income-challenged Americans.

The Broadband Reform and Investment to Drive Growth in the Economy Act (BRIDGE Act), is a bipartisan measure sponsored by Republican Sen. Rob Portman of Ohio, Democrat Michael Bennet of Colorado, and independent Angus King of Maine. Originally introduced in 2020, the measure has been expanded this year to combine rural funding of broadband projects with direct subsidies to keep service affordable for poorer Americans. The measure is considerably smaller than the Biden Administration’s own proposal to spend $100 billion on broadband initiatives, the $94 billion broadband proposal from Congressional Democrats, and the $65 billion compromise plan Republicans tentatively reached with the Biden Administration before talks were called off.

Funding would be provided to internet providers prepared to expand broadband service, but only using technology capable of providing speeds starting at 100/100 Mbps — gigabit being even better. The bill would also invalidate state laws that impede or prohibit the development of municipal/public broadband projects. This could eventually lead to additional competition in rural areas not adequately served by existing providers. Funding would also be used to reduce the retail cost of internet service for those qualified as economically disadvantaged.

The reduced cost of the bill would limit the number of rural subsidy projects and would likely not be enough to provide service to all unserved Americans.