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Sellout: Biden’s Broadband Stimulus is a Shadow of Its Former Self

After weeks of tense negotiations to secure bipartisan support for the Biden Administration’s $1 trillion infrastructure stimulus measure, the White House appears to have largely capitulated to Republican efforts to water down funding to expand broadband service into a $65 billion package that will doubtless be a financial bonanza to the country’s largest phone and cable operators.

The Biden Administration’s original proposal for $100 billion in broadband funding was dedicated to wiring rural areas as well as focusing funding on new entrants like community-owned networks that could deliver internet access to unserved and underserved locations without having a profit motive. The original proposal also would have prioritized funding for future-capable fiber internet, with some advocating that networks be capable of delivering at least a gigabit of speed to customers to qualify for funding. The Administration also promoted the idea of affordable broadband, combatting the growing digital divide exacerbated by internet pricing out of reach of the working poor.

What emerged on Sunday as a “bipartisan agreement” with Republicans on infrastructure stimulus is almost a travesty — slashed almost by half and now effectively a veritable gift to Big Telecom. The industry spent hundreds of millions lobbying Congress and got almost everything it wanted. If passed in its current form, those same phone and cable companies will pocket much of the money for themselves.

Here is how consumers were sold out:

Reduced speed requirements are a dream come true for cable operators.

The bipartisan measure proposes to water down speed requirements to qualify for government stimulus funding to a underwhelming 100/20 Mbps. That speed is tailor made for cable operators, which traditionally offer upload speeds just a fraction of their download speeds. Gone is any condition requiring gigabit-capable networks, at a time when more providers than ever are marketing near-gigabit speeds. That could quickly lead to the emergence of a speed divide, with rural Americans stuck with slower broadband technology from companies that will have no financial incentive to upgrade in these areas.

Addressing affordability is now mostly wishful thinking.

The latest proposal’s idea of solving the broadband affordability issue is to admit there is a problem and declare the need for some kind of low-cost broadband option, but apparently does not specify pricing, who is qualified to get cheaper service, and who will oversee that such programs remain affordable. That allows providers to keep writing the rules of their own token, voluntary efforts to offer discounted internet, like those that disqualify current customers and requires enrollees to jump through various qualification hoops to sign up. The stimulus program will also spend billions of dollars effectively paying a portion of disadvantaged Americans’ internet bills, at the current high prices many ISP’s charge. That is a direct subsidy to big cable and phone companies that can continue charging whatever they please for access, knowing the government will now pay $30-50 of the bill.

Republicans have made sure there is not a whiff of rate regulation or consumer protection mandates in the measure. It also abandons establishing a fixed rate, affordable internet tier for as little as $10 a month. That original proposal would have given cable and phone companies as little as $10 a month from the federal government, much less than collecting up to $50 a month from the Emergency Broadband Benefit, which pays a portion of regular-priced service. The $14 billion being set aside to continue subsidizing Americans’ internet bills at Big Telecom’s monopoly or duopoly prices could be better spent building and expanding internet services where no service or competition exists now.

Digital redlining is A-OK

The watered down compromise measure chastises companies for only incrementally expanding fiber service, mostly to wealthy neighborhoods, but stops short of banning the practice. This wink and a nod to redlining primarily benefits phone companies like AT&T and Frontier, which can now cherry-pick rich neighborhoods for fiber upgrades most likely to return the biggest profits. Phone companies and fiber overbuilders will continue to skip over urban poor neighborhoods and the highest cost rural areas which have always been the hardest to reach.

Sky is the Limit pricing with onerous data caps are fine with us.

Nothing in the measure will give preference to providers willing to offer affordable, flat rate service without the hassle of data caps. Neither will it discourage applicants that plan to use public tax dollars to subsidize expanding service that comes at high prices and with paltry usage limits.

Light Reading reported Wall Street analysts were generally pleased with the outcome, noting the negotiations resulted in stripping out oversight and price regulation and the measure won’t fund potential competitors. It also noted Big Telecom and its associated trade organizations spent more than $234 million on lobbying. Comcast topped the list of spenders at more than $43 million, with AT&T coming in second at $36 million. Both the cable and wireless industry also spent tens of millions on lobbying. They got their money’s worth. Taxpayers won’t.

$50 Emergency Broadband Benefit Is A Windfall for Telecom Companies, a Headache for Consumers

Confusion, frustration, and fine print are all a part of the deal signing up for the $50 Emergency Broadband Benefit, customers complain.

The Biden Administration’s efforts to help economically challenged Americans with their broadband bills is actually a windfall for some of the nation’s largest telecommunications companies, which will pocket the money earned while forcing some customers off discounted promotional and legacy plans they claim do not qualify for bill relief.

The Emergency Broadband Benefit (EBB), rushed through in the early days of the new administration, is a $3.2 billion program that will offer qualifying consumers $50 off their monthly internet bill, at least until this fall when the money funding the program is expected to run out. Internet service provider participation is voluntary, but with billions of free money to be collected, most cable and phone companies are on board with the program. In fact, several are using the new benefit to earn even more money, by writing program rules that cynically exploit their income-challenged customers.

To qualify for the benefit, an individual is eligible if one member of the household:

  • Is a participant in one of the qualifying Lifeline programs: Medicaid, SNAP, SSI, FPHA, Veterans and Survivors Pension Benefit;
  • Is a resident on a Tribal reservation and participates in one of the following programs: Bureau of Indian Affairs general assistance; Tribally administered Temporary Assistance for Needy Families (Tribal TANF); Head Start (only those households meeting its income qualifying standard); or the Food Distribution Program on Indian Reservations (FDPIR);
  • Has applied for and been approved to participate in the National School Lunch Program: receives benefits under the free and reduced-price school lunch program or the school breakfast program, including through the USDA Community Eligibility Provision;
  • Has gross household income at or below 135% of the federal poverty guidelines;
  • Received a Federal Pell Grant during the current award year;
  • Experienced a substantial loss of income since February 29, 2020, and the household had a total income in 2020 below $99,000 for single filers and $198,000 for joint filers. This includes those who are unemployed or experienced unemployment in 2020 and/or were furloughed.

Stop the Cap! has received a few dozen letters from consumers that thought qualifying under the ‘substantial loss of income’ condition would be easy. Instead, they are sharing horror stories about providers unilaterally rejecting their applications, quietly canceling promotional packages, forcing some off less expensive, grandfathered service packages no longer being sold, or requiring customers to upgrade to more costly packages that ultimately left them with a bigger bill than they started with.

In some cases, poor training of customer service representatives seems to be the biggest impediment between you and a cheaper monthly bill. Some companies, including Sparklight, did not seem to even be aware of the highly publicized program. Others, notably Charter and Comcast, gave different answers depending on the representative you reach.

The most cynical provider of them all, however, is Verizon. No ISP makes participation in the EBB program more difficult. The phone company dominates as the largest wireline phone company in the northeast and Mid-Atlantic states and Verizon Wireless is one of the three major wireless carriers. It appears to be using the EBB as a marketing opportunity to upsell customers or drive them off older legacy plans that cost less, even if that is the only plan available.

“Verizon told me flat out ‘no’ that DSL customers cannot receive the $50 discount,” said Ted Rogers. Verizon is his only option for internet service, and only barely so. “We get about 6 Mbps from Verizon, no cell signals at all, and cable internet is just a dream. We live almost a mile from the nearest neighbor.”

Rogers lost his job as a result of the pandemic and is now working two part-time jobs to make ends meet. He told us the broadband benefit would be nice, but in the end is not worth fighting the phone company to get.

“You really have nowhere to go when they reject you, because the program is voluntary,” Rogers told us. “The FCC just passes the complaint back to Verizon and the PSC says it does not regulate internet service.”

Collect the $50, and then even more by forcing customers to switch to more expensive service plans.

Early FiOS customers who signed up for plans they have kept for years are also running straight into a firm “no” from Verizon. The Washington Post shared the stories of several Verizon fiber customers who were told they must upgrade to a more costly plan to qualify for the $50 discount. One customer in Massachusetts would have to give up his internet-only plan costing $62 for basically the same service under a different name — for $79 a month. While the $50 discount will make his internet bill much lower through the summer, when funds run out, he will end up paying $17 more a month indefinitely.

A Virginia customer was told she would have to walk away from her current Verizon internet plan costing $79 a month and switch to a new one for $95 a month, just to get a $50 discount over the next 3-6 months. That is a $16 more a month. In Pennsylvania, a Verizon customer was told she could not get the $50 a month broadband benefit unless she signed up for a costlier TV package and start renting some set top equipment as well. Her bill, after the EBB benefit expires, will be “at least $50 a month higher.”

“In my case, it seems like EBB only benefits Verizon,” she told the Post.

Unlike most telecom companies that claim these kinds of stories are simple misunderstandings or confusion on the part of their customer service team, Verizon spokesman Alex Lawson stepped up to boldly confirm that yes, indeed, the $50 benefit was only good on “qualifying plans.” For everyone else (our phrase): tough luck. But Lawson claims these newer plans allow customers to drop home phone service and typically save customers money. But not always, especially on legacy plans that include all the services a customer wants and special promotional packages which are lost when customers switch plans.

For the record, Verizon limits EBB benefits to these service plans. Notice DSL is excluded and prepaid wireless customers have to speak to a representative to find out if they can qualify:

Mobile:

Verizon Mix & Match Unlimited
Start Unlimited
Play More Unlimited
Do More Unlimited
Get More Unlimited
Above Unlimited
Beyond Unlimited
Go Unlimited (Some Go plans may not be eligible- inquire with rep.)
Standalone Mobile Hotspot plans
Unlimited and Unlimited Plus plans (Standalone mobile hotspot service offerings are those without a smartphone line on the account).

Home:

Fios Mix & Match Internet, any speed
Verizon 5G Home Internet
Verizon LTE Home Internet

Comcast representatives offered a range of responses to customers inquiring about signing up for EBB.

“Talk to one representative, get one story, hang up and call back and you get a completely different story,” said Sha’qwanda, a Comcast customer in Baltimore. “They told me I don’t qualify because I am 15 days late on my bill, then another person told me the plan was only for people on Medicaid, then another person told me I would have to give up my promotion plan they rate locked for a year. My bill would have gone up $54 a month. I can’t afford that. Who is really getting rich here?”

A Philadelphia customer told us Comcast completely messed up their account trying to apply the benefit, canceling their services and charging them for unreturned equipment.

“We lost service the following morning,” the customer wrote us, wishing to remain anonymous. “When we called up, the representative couldn’t figure out what happened, except he saw in the notes we were signed up for EBB, then the account was closed. Our final bill was over $400.”

The Xfinity social media account reached out to us earlier today to clear up the misunderstanding.

If you are a Comcast customer and are having trouble enrolling in EBB, we suggest you tweet a message to @Xfinity and get assistance. We suspect the problem here is insufficient training of customer service representatives to manage enrollments properly.

Charter/Spectrum is using the EBB program as a pry lever to push stubborn customers still holding on to legacy Time Warner Cable or Bright House service plans to switch to Spectrum internet plans and pricing. If you do not make the switch, you won’t qualify for EBB benefits. This is a choice by Charter management, not a limitation imposed by their billing system. Some customers on other legacy plans were also told they do not qualify.

“I am still a subscriber of New York’s Everyday Low Priced Internet service that used to be $15 a month. They have raised the price since, but also effectively jailed me by saying I have to abandon this plan if I want to get the $50 a month off my internet bill,” said Jay, a customer in New York City. “I can never go back either they tell me. Who wrote the rules for this program? The cable companies are using this to force people like me into upgrades I do not want and cannot afford. It’s scandalous.”

Another customer wishing to remain anonymous noted the same month EBB became available, Charter announced rate increases on equipment rentals and the Broadcast TV Fee paid by cable television customers.

“They will be back to raise internet prices again soon, I am sure,” the customer predicted.

AT&T, not to be left behind, also insists that customers choose from a limited menu of premium price plans and can never return to the plan they gave up. Even worse, customers complain you have to call to enroll, and the lines are jammed:

“I waited an hour on hold and then AT&T hung up on me twice,” said Kate Derry from Chicago. “It’s busy signals or waiting on hold forever. It’s like calling the unemployment office during the pandemic. AT&T has decided it should not be easy to enroll in this and I wonder how many people just give up.”

Jon, an AT&T Fiber customer in Dallas seems to agree.

“I finally got through at around 8am Texas time and listened to a representative fumble their way through disclaimers and conditions,” Jon told Stop the Cap! “Several times she had to put her hand over the microphone and ask her supervisor for help. It took an hour to get everything set up, not including the time needed to assemble the qualifying documentation. I really doubt many people are going to go through all this for a few months of savings. There is no excuse for this not to be available for online enrollment.”

Frontier Exits Bankruptcy on Friday; Company to Focus on Gradual Fiber Upgrades

Frontier Communications is scheduled to announce its emergence from bankruptcy reorganization as early as Friday, beginning a new era with a reduced debt load, new leadership, and a plan to retire a considerable amount of its copper wire network in favor of fiber optics over the next decade.

“Frontier is ready to set a new course as a revitalized public company. Through the restructuring process, the company has stabilized its business and recapitalized its balance sheet, while making significant progress on the early stages of implementing our initial fiber expansion plan,” said John Stratton, incoming executive chairman of the board. “Frontier’s success with the Fiber-to-the-Home pilot program, which upgraded more than 60,000 locations from copper to fiber optic service in 2020, is just one example of the important work already underway. Frontier’s future is bright. I’m eager to work closely with our new board, our CEO Nick Jeffery, and the rest of the leadership team to build the new Frontier.”

As part of its reorganization, Frontier shed nearly $10 billion in debt, most attributable to its earlier buying spree of castoff landline customers formerly served by AT&T and Verizon. The company’s budget busting 2016 acquisition of Verizon service areas in California, Texas, and Florida was called “a textbook case of how not to do an acquisition,” by The Dallas Morning News

For at least a decade covering 2010-2020, Frontier was regarded as one of the worst phone companies in America in consumer surveys. Most of its legacy customers still suffer with Frontier’s dilapidated and deteriorating copper wire network and the slow speed DSL service barely supported on it. Speeds of 1-3 Mbps maximum are still common in some places, even in urban areas. Frontier’s acquisition of Verizon FiOS and AT&T U-verse service areas in states like Indiana, Washington, Connecticut, Florida, Texas and California gave a minority of customers access to pre-built fiber to the home networks, but Frontier’s notoriously poor switchover from Verizon and AT&T’s billing systems to their own effectively drove off hundreds of thousands of formerly loyal customers.

Under the leadership of former CEOs Maggie Wilderotter and Dan McCarthy, Frontier dragged from one quarter to the next, promising improvements that failed to materialize for most customers. The company’s $10.5 billion acquisition of landlines in California, Texas and Florida was particularly costly as the company sold bonds offering astonishing 10.5-11% interest rates to investors to cover more than $5 billion in debt coming due for repayment. A year after the Verizon deal, a half million Frontier customers left for good and the company lost $262 million.

Frontier’s latest fiber plan is to target upgrades in its legacy service areas, noted in blue on this map. These areas are all almost entirely served by copper wire, provide slow speed DSL, and are long overdue for fiber upgrades. Frontier will also expand fiber in its acquired service areas, represented by other colors on the map. Note that Frontier sold its Pacific Northwest region, marked by the red box, to Zipply Fiber, which also plans to scrap Frontier’s copper wire network in favor of fiber. (Map courtesy of Light Reading)

By the time bankruptcy was inevitable, Frontier was saddled with billions in debt and no financial ability to embark on fiber upgrades the company should have committed to a decade ago. Almost all of its existing fiber footprint was acquired from other companies.

Stratton

Frontier’s new management includes John Stratton, a former Verizon executive. Stratton believes Frontier’s future depends on the company expanding its fiber footprint. In 2020, it put that plan to the test by expanding fiber to the home service to 60,000 additional homes in a pilot project proving Frontier can plan and execute fiber upgrades on time and on budget. But a closer look at the numbers shows the majority of homes Frontier “upgraded” were brand new. Of the 60,000 homes, 44,000 were located in new housing developments or were unwired previously. These “greenfield” locations are typically easier to provision and much less expensive to service than pre-existing homes where Frontier first needs to decommission its existing copper wiring and replace it with fiber optics. Only around 16,000 pre-existing homes saw copper wire replaced with fiber in so-called “brownfield” locations.

For Frontier to succeed, it will need to move a lot more copper customers to fiber optics to remain competitive in the marketplace. Currently, Frontier serves approximately three million fiber homes and 11 million copper homes. Frontier is expected to announce fiber upgrades for an additional six million homes and target about 85% of its footprint to be serviced by fiber… eventually.

Some proposals hint the company could take five years or more to complete upgrades at the same time independent fiber to the home providers, next generation satellite internet, and wireless home 4G/5G internet plans are expanding. Much of Frontier’s service area is serviced by cable companies already providing high speed internet. Frontier’s plan assumes it will capture about 40% of the market — a tall order in communities like Rochester, N.Y., where dominant cable provider Charter Spectrum is assumed to have 70+% of the home broadband market. When competing fiber providers enter the market, Spectrum often slashes promotional pricing to $30 a month for 400 Mbps internet service for two years. Spectrum will probably offer similar pricing in newly competitive markets to retain customers threatening to cancel service and switch to Frontier.

Frontier plans to discuss its exit from bankruptcy and where the company will go in the future in a webcast presentation this Friday, April 30, 2021 at 10:00am ET.

Breaking News: FCC Chairman Ramming Through Vote to Reaffirm Death of Net Neutrality Before Election

Pai’s parting gift

Fearing the potential of Joe Biden replacing Donald Trump as president in next month’s election, Federal Communications Commission chairman Ajit Pai will ram through a final vote to kill net neutrality while Republicans still have a majority on the Commission.

At the final commissioners’ meeting on Oct. 27, just days before the U.S. election, Pai intends to take up net neutrality once again, primarily to deal with a demand by the D.C. Court of Appeals to address outstanding issues that came up when Republicans rescinded net neutrality rules that were put in place by the FCC under the Obama Administration. To drive the final stake into the heart of a free and open internet, Pai plans to quickly dismiss three issues of concern to the Court:

  • how net neutrality impacts public safety;
  • if it affected how the FCC deals with pole attachment regulation;
  • if it hurts the FCC Lifeline program’s ability to offer broadband to low-income Americans.

In Pai’s view, these are basically non-issues of concern and he intends to bring the matter before the Commission for a widely predicted party-line vote affirming the death of net neutrality policies under the Trump Administration.

Pai took to Medium.com to write a smug and condescending editorial about why the pro-corporate deregulation policies he and his Republican colleagues have supported over the last four years have made American broadband great again. He called net neutrality supporters a bunch of “Washington politicians, far-left special-interest groups, Hollywood stars, and Silicon Valley tech giants.” He blasted the media for “scaring the American people” about what would happen after Trump’s FCC killed the open internet order. He also claimed defeating net neutrality would lead to a renaissance of new investment in broadband.

In fact, many broadband providers elected to curtail investment even before the COVID-19 pandemic arrived. Charter, Comcast, AT&T, and Verizon have all reduced investment in residential wired broadband services, in part because of a lack of competitive marketplace. Pai, a former lawyer for Verizon, has spent the last four years making life very comfortable for the country’s largest internet service providers. He eliminated mandated competition in set-top boxes, did nothing to stop data caps, eliminated net neutrality protections, and helped enact new rules allowing mobile providers to place future cell towers and other equipment in places that have never been acceptable before.

Most broadband providers today only compete on price for new customers. Once those promotions expire, customers face punishing bills. Internet pricing drew renewed scrutiny during the early days of the pandemic when schools and employers moved to at-home study and work. Many found internet pricing of $70+ a month unaffordable, while other suburban and exurban employees discovered they could not get suitably fast internet service at any price.

Pai’s tenure as chairman has been four years of smug arrogance and a complete disinterest in the input of consumers. Millions have told the FCC to leave net neutrality policies in place. Pai and his Republican colleagues ignored them. The Republican commissioners have delivered speeches at some of the most partisan right-wing groups imaginable, but won’t respond to ordinary Americans looking for actual evidence of competition and consumer protection. For much of this year, Pai’s two Republican colleagues have spent much of their time on Twitter pursuing their own agendas. Commissioner O’Rielly has made closing down low power community pirate radio stations his obsession. At least that is covered under the FCC’s mandate. Commissioner Carr has spent his time on Twitter complaining about people being mean to President Trump on social media, his obsession with China and freedom of speech, and his suspicions about the World Health Organization (WHO).

This final attempt to destroy net neutrality just before the election is the ultimate insult, one that Democratic Commissioner Jessica Rosenworcel fumed about:

“This is crazy. The internet should be open and available for all. That’s what net neutrality is about. It’s why people from across this country rose up to voice their frustration and anger with the Federal Communications Commission when it decided to ignore their wishes and roll back net neutrality. Now the courts have asked us for a do-over. But instead of taking this opportunity to right what this agency got wrong, we are going to double down on our mistake.”

“The FCC is going to make it easier for broadband companies to block websites, slow speeds, and dictate what we can do and where we can go online. It’s insane that this is happening now, during a pandemic when we rely on internet access for so much of day-to-day life. It’s also cruel that this is our priority when this crisis has exposed just how vast our digital divide is and how much more work we have to do for broadband to reach 100% of us—no matter who we are or where we live.”

Verizon’s “Unlimited” Confusion Plus Plan Now Really Means 30 GB Data Cap, Except When Its 50 GB

Verizon wireless plans: now more confusing than ever.

The concept of “unlimited data” rarely means unlimited on mobile plans and it can get very confusing for consumers trying to figure out what each carrier defines as “unlimited.”

Verizon has announced some plan changes that are not helping resolve this confusion.

As of late last week, Verizon introduced a new version of its “Unlimited Plus” plan, which attaches to existing wireless plans for an extra $30 a month. Then, if you would like to connect more devices to your plan beyond your phone, you can sign up for an unlimited connected device plan and upgrade to Unlimited Plus for another $10 a month. If you have a tablet or hotspot, Verizon will sell you another unlimited plan for those for an extra $20 a month.

What? Confusing!

Customers enrolled in the older standard “Unlimited Plus” plan received unlimited data up to 15 GB before a speed throttle kicked in. The new “Unlimited Plus” offers unlimited-unlimited 5G and up to 30 GB of “premium” 4G LTE data. So it appears you get double the unlimited data as well as an infinite amount of 5G service which is probably not provided in your area (or if you turn the corner, or go indoors in an area that has the service). But if you are connecting a hotspot, laptop, or tablet to your plan, then Verizon redefines unlimited again, this time to mean up to 50 GB of 5G data (almost not available anywhere) and then you get speed throttled to 3 Mbps for the rest of the billing cycle, but just on those devices.

Oh by the way, if you have an Apple Watch, Verizon has a plan for that as well, now priced at $10 a month, which gets you 15 GB of premium data, presumably on the watch.

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