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N.Y. Gov. Andrew Cuomo Vetoes Public Rural Broadband Feasibility Study as the Unserved Struggle On

No service.

Despite New York Gov. Andrew Cuomo’s $500 million, 2015 Broadband for All initiative which guaranteed broadband service for anyone  that wanted home internet access, five years later rural broadband gaps continue to plague the state.

A bill that would set aside funds to complete a feasibility study to launch a state owned broadband provider of last resort was quietly vetoed by Cuomo at the end of 2019. Assembly member Aileen Gunther (D-Monticello) sponsored the bill after hearing scores of complaints about terrible or non-existent internet access from constituents in her district, which covers the parts of the rural Catskills region north of the Pennsylvania border.

Gunther complained that despite the governor’s broadband initiative, private phone and cable companies were still ignoring rural customers, leaving them with slow DSL service or no internet access at all. Gunther’s bill was a first step in potentially allowing the state to step in and provide service to New Yorkers unable to get broadband from any private provider.

New York has spent over $500 million on its Broadband for All program and made Charter Spectrum an integral part of its broadband expansion plans in return for approval of its 2016 acquisition of Time Warner Cable. But a growing number of the governor’s critics claim the program has failed to deliver on its mandate, stranding thousands of New Yorkers without internet service and tens of thousands more with just one option — unpopular satellite internet access.

Gunther

Gunther was upset to learn that New York was prepared to hand over more than a half billion dollars to large private telecom companies including Frontier Communications and Verizon while not being willing to spend a penny to fund projects to reach New Yorkers for-profit companies could not be dragged kicking and screaming to service.

“We’re all spending millions and millions of dollars on privately owned internet service providers,” said Gunther. “In return for promises, a lot of our communities do not have access to the internet, or if they do have access to the internet, it’s slow and these companies are not, I think, fulfilling the promises made.”

The rural broadband problem is not resolved in the Finger Lakes or Southern Tier regions of New York either. This week, Yates County announced it was joining an effort by Schuyler, Steuben, and Tioga counties, and the Southern Tier Network, to complete a broadband feasibility study to improve internet access in the four counties. Fujitsu Broadband will manage the study and hopes to have results by June. The study will target the pervasive problem of inadequate broadband service in the region, which includes crucial tourist, winery, and agricultural businesses vital to New York’s rural economy.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York in 2015.

Gov. Cuomo has called such initiatives “well-intentioned” but was non committal about contributing more state funds to construct new networks or underwrite further expansion of existing ones. New York is about to begin its annual hard-fought budget negotiations in hopes of completing the state budget by April. Finding funding for such projects will probably require a powerful political advocate able to wrestle funding for further broadband improvements.

Even after spending $500 million, New York’s rural broadband problem has not been resolved. That offers insight into the merits of other state broadband programs, which often limit annual broadband expansion funding to under $30 million annually.

Those still without service are likely in high-cost service areas, where each customer could cost over $20,000 to reach. New York’s Broadband for All program relied on a reverse auction that required private companies to bid to service each unserved address. No wireline provider bid on any high-cost service areas, leaving Hughes Satellite as a subsidized satellite provider of last resort. But inadequate broadband mapping left scores of rural New Yorkers behind without even the option of subsidized satellite internet access.

Charter, Comcast Start Competing in Each Other’s Territories… But Only For Big Business Accounts

Comcast and Charter Communications have begun to compete outside of their respective cable footprints, potentially competing directly head to head for your business, but only if you are a super-sized corporate client.

Comcast Business has targeted selling large Fortune 1000 companies internet service through contractual partnerships with Charter, Cox, and Cablevision/Altice USA for a few years now. The cable giant recently entered the Canadian market, at least for U.S.-based companies that have satellite offices north of the border. Comcast now directly competes with other cable operators selling enterprise-level broadband service, whether the customer is inside Comcast’s footprint or not, but will not offer a similar service to consumers looking for better options.

The cable industry’s longstanding de facto agreement not to compete head to head for customers will probably remain intact even as Charter this week unveils its own national broadband service called Spectrum Total Connect. It will be available across the country, offering customers up to 940 Mbps broadband service at a highly competitive price, but only if you are running a large business and have an account with Spectrum Business National Accounts, which provides connectivity for large business franchises, national retailers, and companies utilizing a large network of telecommuters scattered around the country. Consumers need not apply here either.

Charter has refused to say who it has partnered with to provide the service, but it is likely a reciprocal agreement with Comcast and other cable companies it already works with to provide enterprise-level service. The new service will be rolled out in the next several weeks.

Cable companies have been successful selling connectivity products to small and medium-sized businesses, but large national companies have traditionally relied on phone companies to provide them with total connectivity packages that can reach all of their locations. Until Comcast began selling service outside of its footprint, cable companies have had to turn down business opportunities outside of their respective service areas. But now Comcast and Charter can reach well beyond their local cable systems to satisfy the needs of corporate clients.

But neither company wants to end their comfortable fiefdoms in the residential marketplace by competing head to head for customers. Companies claim it would not be profitable to install redundant, competing networks, even though independent fiber to the home overbuilders have been doing so in several cities for years. It seems more likely cable operators are deeply concerned about threatening their traditional business model supplying services that face little competition. In the early years, that was cable television. Today it is broadband. Large swaths of the country remain underserved by telephone companies that have decided upgrading their deteriorating copper wire networks to supply residential fiber broadband service is not worth the investment, leaving most internet connectivity in the hands of a single local cable operator. Most cable companies have taken full advantage of this de facto monopoly by regularly raising prices despite the fact that the costs associated with providing internet service have been declining for years.

Cherry-picking lucrative commercial customers while leaving ordinary consumers mired in a monopoly is more evidence that the U.S. broadband marketplace is broken and under regulated. Competition is the best solution to raising speeds while reducing prices — competition regulators should insist on wherever possible.

Verizon Puts 5G Wireless Home Broadband Expansion on Hold Until Late 2020

Dunne

Verizon will hold off on expanding its millimeter wave 5G wireless home broadband service until at least the second half of 2020, citing equipment availability issues.

Ronan Dunne, executive vice president and group CEO of Verizon’s Consumer Division, told attendees at a Citi investor’s conference that Verizon’s initial introduction of Home 5G was just a market test, and until newer high-powered wireless routers arrive that will be capable of more robust reception of the very high frequencies the service works on, Verizon will not expand the service further.

Dunne called the next generation of 5G home receivers “key” to Verizon’s wireless home broadband strategy. Dunne said the new equipment will let consumers receive more distant and weaker 5G wireless signals, allowing Verizon to expand coverage of the service to more households. The current generation of 5G receivers were designed for use in smartphones, which hampers in-home reception quality.

Verizon initially promised to serve about one-quarter of the United States with its wireless home broadband service, eventually capable of supplying 500/200 Mbps and more to subscribers. But Verizon’s goal to reach over 30 million households will take the company as long as seven years to reach.

Dunne also warned Verizon is prioritizing 5G coverage in urban commercial areas instead of suburban, rural, and residential neighborhoods. Verizon’s core 5G network will target dense urban areas, including commercial shopping, business, and entertainment venues like concert halls and sports stadiums where the company measures the highest traffic demand it hopes to satisfy with 5G. Verizon’s home 5G broadband service piggybacks on Verizon’s 5G mobile network, which means it will only be available in neighborhoods where Verizon has deployed its network of small cells.

“It’s very much a mobility strategy, with a secondary product of Home [5G], rather than us changing our overarching mobility deployment to try to accelerate Home at the expense of the overall 130 million customer base,” Dunne explained.

Verizon hopes to offer customers 5G-capable mobile phones for as little as $600 in the coming year and getting widespread adoption of 5G by Verizon customers is a long-term goal for Dunne. He added that once 5G becomes more widely available, Verizon and other wireless companies will consider shutting down Wi-Fi hotspots in favor of 5G.

“In a world of 5G millimeter wave deployments, we don’t see the need for Wi-Fi in the future, because we have a more secure network environment,” Dunne said. “Our view is that when fully deployed there are substantial environments where public Wi-Fi will be eliminated in favor of millimeter wave.”

Regulators… Captured: AT&T Gets FCC to Omit Bad Internet Speed Scores It Doesn’t Like

AT&T was unhappy with the low internet speed score the FCC was about to give the telecom giant, so it made a few phone calls and got the government regulator to effectively rig the results in its favor.

“Regulatory capture” is a term becoming more common in administrations that enable regulators that favor friendly relations with large companies over consumer protection, and under the Trump Administration, a very business-friendly FCC has demonstrated it is prepared to go the distance for some of the country’s largest telecom companies.

Today, the Wall Street Journal reported AT&T successfully got the FCC to omit DSL speed test results from the agency’s annual “Measuring Broadband America” report. Introduced during the Obama Administration, the internet speed analysis was designed to test whether cable and phone companies are being honest about delivering the broadband speed they advertise. Using a small army of test volunteers that host a free speed testing router in their home (full disclosure: Stop the Cap! is a volunteer host), automated testing of broadband performance is done silently by the equipment on an ongoing basis, with results sent to SamKnows, an independent company contracted to manage the data for the FCC’s project.

In 2011, the first full year of the program, results identified an early offender — Cablevision/Optimum, which advertised speed it couldn’t deliver to many of its customers because its network was oversold and congested. Within months, the company invested millions to dramatically expand internet capacity and speeds quickly rose, sometimes beyond the advertised level. In general, fiber and cable internet providers traditionally deliver the fastest and most reliable internet speed. Phone companies selling DSL service usually lag far behind in the results. One of those providers happened to be AT&T.

In the last year, the Journal reports AT&T successfully appealed to the FCC to keep its DSL service’s speed performance out of the report and withheld important information from the FCC required to validate some of the agency’s results.

The newspaper also found multiple potential conflicts of interest in both the program and SamKnows, its contracted partner:

  • Providers get the full names of customers using speed test equipment, and some (notably Cablevision/Optimum) regularly give speed test customers white glove treatment, including prioritized service, performance upgrades and extremely fast response times during outages that could affect the provider’s speed test score. Jack Burton, a former Cablevision engineer said “there was an effort to make sure known [users] had up-to-date equipment” like modems and routers. Cablevision also marked as “high priority” the neighborhoods that contained speed-testing users, ensuring that those neighborhoods got upgraded ahead of others, said other former Cablevision engineers close to the effort.
  • Providers can tinker with the raw data, including the right to exclude results from speed test volunteers subscribed to an “unpopular” speed tier (usually above 100 Mbps), those using outdated or troublesome equipment, or are signed up to an “obsolete” speed plan, like low-speed internet. Over 25% of speed test results (presumably unfavorable to the provider) were not included in the last annual report because cable and phone companies objected to their inclusion.
  • SamKnows sells providers immediate access to speed test data and the other data volunteers measure for a fee, ostensibly to allow providers to identify problems on their networks before they end up published in the FCC’s report. Critics claim this gives providers an incentive to give preferential treatment to customers with speed testing equipment.

Some have claimed internet companies have gained almost total leverage over the FCC speed testing project.

The Journal:

Internet experts and former FCC officials said the setup gives the internet companies enormous leverage. “How can you go to the party who controls the information and say, ‘please give me information that may implicate you?’ ” said Tom Wheeler, a former FCC chairman who stepped down in January 2017. Jim Warner, a retired network engineer who has helped advise the agency on the test for years, told the FCC in 2015 that the rules for providers were too lax. “It’s not much of a code of conduct,” Mr. Warner said.

An FCC spokesman told the Journal the program has a transparent process and that the agency will continue to enable it “to improve, evolve, and provide meaningful results as we move forward.”

The stakes of the FCC’s speed tests are enormous for providers, now more reliant than ever on the highly profitable broadband segment of their businesses. They also allow providers to weaponize  favorable performance results to fight off consumer protection efforts that attempt to hold providers accountable for selling internet speeds undelivered. In some high stakes court cases, the FCC’s speed test reports have been used to defend providers, such as the lawsuit filed by New York’s Attorney General against Charter Communications over the poor performance of Time Warner Cable. The parties eventually settled that case.

In 2018, the key takeaway from the report celebrated by providers in testimony, marketing, and lobbying, was that “for most of the major broadband providers that were tested, measured download speeds were 100% or better of advertised speeds during the peak hours.”

Comcast often refers to the FCC’s results in claims about XFINITY internet service: “Recent testing performed by the FCC confirms that Comcast’s broadband internet access service is one of the fastest, most reliable broadband services in the United States.” But in 2018, Comcast also successfully petitioned to FCC to exclude speed test results from 214 of its testing customers, the highest number surveyed among individual providers. In contrast, Charter got the FCC to ignore results from 148 of its customers, Mediacom asked the FCC to ignore results from 46 of its internet customers.

Among the most remarkable findings uncovered by the Journal was the revelation AT&T successfully got the FCC to exclude all of its DSL customers’ speed test results, claiming that it would not be proper to include data for a service no longer being marketed to customers. AT&T deems its DSL service “obsolete” and no longer worthy of being covered by the FCC. But the company still actively markets DSL to prospective customers. This year, AT&T also announced it was no longer cooperating with SamKnows and its speed test project, claiming AT&T has devised a far more accurate speed testing project itself that it intends to use to self-report customer speed testing data.

Cox also managed to find an innovative way out of its poor score for internet speed consistency, which the FCC initially rated a rock bottom 37% of what Cox advertises. Cox claimed its speed test results were faulty because SamKnows’ tests sent traffic through an overcongested internet link yet to be upgraded. That ‘unfairly lowered Cox’s ratings’ for many of its Arizona customers, the company successfully argued, and the FCC put Cox’s poor speed consistency rating in a fine print footnote, which included both the 37% rating and a predicted/estimated reliability rating of 85%, assuming Cox properly routed its internet traffic.

The FCC report also downplays or doesn’t include data about internet slowdowns on specific websites, like Netflix or YouTube. Complaints about buffering on both popular streaming sites have been regularly cited by angry customers, but the FCC’s annual report signals there is literally nothing wrong with most providers.

Providers still fear their own network slowdowns or problems during known testing periods. The Journal reports many have a solution for that problem as well — temporarily boosting speeds and targeting better performance of popular websites and services during testing periods and returning service to normal after tests are finished.

James Cannon, a longtime cable and telecom engineering executive who left Charter in February admitted that is standard practice at Spectrum.

“I know that goes on,” he told the Journal. “If they have a scheduled test with a government agency, they will be very careful about how that traffic is routed on the network.”

As a result, the FCC’s “independent” annual speed test report is now compromised by large telecom companies, admits Maurice Dean, a telecom and media consultant with 22 years’ experience working on streaming, cable and telecom projects.

“It is problematic,” Dean said. “This attempt to ‘enhance’ performance for these measurements is a well-known practice in the industry,’ and makes the FCC results “almost meaningless for describing actual user experience.”

Tim Wu, a longtime internet advocate, likened the speed test program as more theoretical than actual, suggesting it was like measuring the speed of a car after getting rid of traffic.

China Well Ahead of U.S. in Fiber Deployment; Lack of U.S. Competition Responsible for Lag

China is outpacing the U.S. in fiber broadband expansion. (Image: Broadband Now)

At least 86% of China now has access to fiber broadband connectivity after six years of aggressive fiber optic network expansion, putting the United States at a significant disadvantage.

Only 25% of the United States is served by fiber service, creating a giant digital divide that leaves most Americans without fiber high speed broadband. That is the finding of Broadband Now, which summarized the results of its investigation in an article published this week, blaming the country’s reliance on deregulated monopoly/duopoly telecom companies for much of the problem.

“While America continues to suffer from an immense digital divide, China’s government has made incredible progress building out a state-sponsored super network of fiber optic connections. This infrastructure will allow the country to take early advantage of some of the most impactful applications resulting from the fourth industrial revolution,” Broadband Now reports.

Chinese state policy has emphasized the importance of deploying modern telecommunications networks, including fiber-to-the-home and 5G wireless service. The Chinese central government is spending billions to build a core public broadband network, which providers can lease to offer service to their customers. U.S. providers rely on private investment that depends on a financial formula to determine if fiber upgrades will deliver a competitive advantage or a potential for robust profits.

Broadband Now notes that most U.S. providers face little significant competition — “a difficult proposition to justify installing robust fiber networks, especially in less populous areas of the U.S.”

The “return on investment” formula is also responsible for the lack of rural broadband access, a problem the Chinese government solved by directly subsidizing the construction of fiber networks across the country, deeming high speed connectivity a national priority. As a result, 96% of rural Chinese villages now have access to fast internet service.

Broadband Now advocates for more aggressive fiber broadband deployment in the United States, including policies that promote fiber expansion and reduce deployment costs. For example, Broadband Now believes that a national “dig once” policy that would require fiber optic conduit to be installed wherever roadway projects are undertaken could allow providers quick and inexpensive access to deploy fiber technology. The group estimates that nationwide fiber expansion costs could be reduced from $140 billion to $14 billion if dig once policies were the national standard.

Chinese fiber deployment has already laid a foundation for China to outpace the United States in the race to deploy 5G wireless networks. Fiber connections are required to power gigabit speed small cells integral to millimeter wave 5G services. With China well ahead of the U.S. in fiber deployment, the country is poised to rapidly expand 5G wireless service.

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