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U.S. Gone from World Ranking of Fastest Broadband Countries; Cozy Duopoly Results in Less Investment, Upgrades

Phillip Dampier September 13, 2021 Broadband Speed, Consumer News, Public Policy & Gov't 1 Comment

The United States is rapidly losing its place among the world’s fastest broadband countries, dropping out of the top-10 this year and falling behind Chile, Liechtenstein, and Romania.

While other countries and internet providers are investing billions to improve their standing in an increasingly competitive global broadband marketplace, a comfortable duopoly of phone and cable companies in the United States has successfully kept regulators at bay and allowed many of the largest internet service providers to divert investment away from upgrades and towards stock buybacks, dividend payouts, debt reduction, and ongoing merger and acquisition activities.

Internet speed testing firm Ookla has watched the United States slip in its fixed broadband speed standings over the last three years, dropping from 8th place (2019) to 9th place (2020), to being dropped from its top 10 list this year (it now scores 14th). Canada has never made the list.

This year, the countries with the fastest internet download speeds are: Monaco, Singapore, Hong Kong, Thailand, Romania, Switzerland, South Korea, Chile, Denmark and Liechtenstein. The only other countries to fall off the top-10 list in the last three years are Taiwan, Andorra, Macau, and France.

Globally, wireless internet speeds are benefitting from 4G and 5G upgrades on cell towers, with overall speed increasing nearly 60% in the last year. Fixed broadband speeds are up 32% year over year, primarily from an increase in the amount of fiber to the home connections providers are making as they move away from traditional copper wiring. Heavy investment in network upgrades can deliver remarkable boosts in internet speeds.

“South Korea and the United Arab Emirates stood out with mean mobile download speeds that were more than 240% faster than the global average and fixed broadband downloads that were more than 70% faster than the global average,” said Ookla’s Isla McKetta. “China’s mobile download speed was more than 180% faster than the global average and the country was more than 70% faster than the global average for fixed broadband. Switzerland’s mobile and fixed broadband download speeds were close to 100% faster than the global average.”

All of those countries have invested heavily in fiber connectivity for both their mobile and fixed wired broadband connections.

In contrast, U.S. cable companies have delayed upgrades to DOCSIS 4.0, capable of supporting 10 Gbps connections, and many telephone companies have dragged their feet on fiber upgrades, facing resistance from Wall Street as well as heavy debt burdens from prior mergers and acquisitions.

Most of the countries ranking the fastest have pushed providers to supply gigabit internet speed connections, but U.S. regulators and politicians have reduced pressure on large providers by proposing to subsidize millions of expanded internet connections with U.S. taxpayer funds while reducing required speed minimums to just 100/20 Mbps.

AT&T Trying to Make Printed Telephone Directories Extinct

Phillip Dampier August 24, 2021 AT&T, Consumer News, Public Policy & Gov't No Comments

Endangered Species: The AT&T Printed White Pages Directory

Landline customers in Michigan might never receive another printed telephone directory after AT&T successfully lobbied the state legislature for an end to the requirement that anyone that wants a phone book can have one, for free.

AT&T let its fingers do the walking and looked up support for Michigan Senate Bill 372, introduced by the company’s good friend, Sen. Ken Horn (R-Frankenmuth). In addition to counting AT&T as his third largest contributor, Horn has been honored with the Excellence in Education Award (2017), sponsored by AT&T and the Michigan Association for Computer Users in Learning.

Horn’s bill was short and to the point, amending Michigan state law by stripping out the requirement that every landline provider in the state must provide a free printed telephone directory (if requested) to each customer. In its place:

The People of the State of Michigan enact:

Sec. 309. (1) A provider of basic local exchange service shall provide to each customer local directory assistance.
(2) A provider of basic local exchange service shall provide each customer at no additional charge the option of having access to 900 prefix services blocked through the customer’s exchange service.

This act is ordered to take immediate effect.

The bill was passed in both houses of the legislature with wide margins and Michigan Gov. Gretchen Whitmer signed it into law last month.

The new law requires phone companies to continue offering local “411” directory assistance service, but says nothing about how much a phone company can charge a customer looking for a telephone number (in Michigan, some now pay as much as $2.49 per directory assistance call.)

It also finally allows customers to block all calls to “900 numbers” that can carry hefty per minute charges. Of course, the worst scandals involving 900 call charges were back in the 1990s — some 20-30 years ago. Many phone companies lobbied against call blocking technology when 900 number revenue, split between the phone company and the 900 number, was far more lucrative than it is today. Does anyone even call “Time of Day and Temperature” or “Local Weather and Horoscope” numbers today?

AT&T has once again shown it is effective lobbying state legislatures, where it brings its corporate agenda to state lawmakers like Mr. Horn. About a decade ago the company fought to eliminate the automatic delivery of printed phone directories. It also fought for statewide video franchising to rip control of cable TV services away from local communities just as it was introducing U-verse, its own TV service. It fought to marginalize public, educational, and government access channels. It even continues to seek an end to the requirement it provide local wireline phone service in areas it considers unprofitable.

AT&T was not alone in support of the measure to eliminate the century-old printed phone book. Frontier Communications heartily supported AT&T in its efforts.

Today’s printed directory has been hobbled by the ongoing move towards wireless. As consumers cut their landlines, listings disappear from phone directories because wireless numbers are rarely published. Competing digital phone companies like Charter Spectrum offer to sell their customer number listings for telephone directories, but companies like Frontier refuse to pay, resulting in Frontier’s phone books slimming down to the point of irrelevance. In the Rochester, N.Y. 585 area code, where Frontier is by far the largest incumbent local landline provider, its printed White Pages for 2021 includes just 111 pages of business and residential listings in an area with more than a million people.

With reciprocal listings no longer freely shared, the obsolescence of the telephone directory — electronic or printed — is virtually assured. That will leave many customers with just one option: calling directory assistance and paying a fee for each number successfully obtained.

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.

Cuomo Administration Capitulates on Affordable Broadband Law; State Laws Cannot Regulate Broadband Pricing

Cuomo

As expected, New York’s efforts to lower broadband pricing through a state mandate has been effectively killed in a Brooklyn federal court, putting an end to Governor Andrew Cuomo’s efforts to require providers to offer a $15 broadband tier to income-challenged state residents.

U.S. District Judge Denis R. Hurley, who signed a preliminary injunction preventing the mandate from taking effect on June 15, signaled the concept was likely unlawful in a memorandum attached to the injunction. Several telecom companies challenged the mandate in a lawsuit heard in Hurley’s courtroom, claiming states have no regulatory authority to set broadband terms or pricing. Hurley was clearly persuaded in their direction, and was pessimistic the state could ever show a legal way to regulate internet pricing, something currently reserved to the FCC. As a result, a settlement has been proposed dropping the affordable pricing mandate.

Hurley was also moved by arguments from several smaller New York providers that claimed the new mandate would force them to sell service below cost. Empire Access, a fiber to the home overbuilder based in Prattsburgh, filed a declaration with the court threatening to cancel a major expansion project to wire customers in Livingston and Broome counties, including the city of Binghamton, if the mandate was implemented, because it would likely lose federal funding.

Because of the state’s definition as to who would have qualified for the affordable broadband tier, many smaller companies in rural, economically challenged area of upstate New York claimed they would face substantial economic losses to their businesses. Empire claimed it would lose “approximately $2 million per year,” Heart of the Catskills claimed top-line revenue would decrease $1,364,000 annually, Delhi Telephone claimed it would lose at least $90,000 per month, and the Champlain Telephone Company notified the court that “nearly half (48%) of its existing broadband customers will qualify for discounted rates,” causing the company to lose money on each customer.

“While a telecommunications giant like Verizon may be able to absorb such a loss, others may not,” Judge Hurley wrote in his order.

Gov. Cuomo bristled after learning of the lawsuit, threatening to revoke the franchise of any company that refused to implement the  state’s affordable broadband program. But the governor has made empty threats before, including a promise in 2018 to revoke the merger of Charter Communications and Time Warner Cable because the company failed to live up to the deal commitments it made to state regulators. A settlement was eventually reached between the cable giant and the state, and it appears a settlement between the plaintiff telecom companies and the state will also end this dispute and lawsuit. It appears the state has capitulated and plans to walk away from the affordable broadband proposal, although it reserved the right to appeal the case.

Stop the Cap! predicts the state will work with larger providers to increase public knowledge of the companies’ existing affordable internet programs, which usually have similar qualifications to the affordable internet law Cuomo proposed. Cuomo Administration officials will also likely lobby the Biden Administration to toughen federal oversight of broadband service and suggest a possible federal mandate for an affordable service tier and a return to net neutrality under a regulatory framework that opens the door for future price and service regulation.

The court decision signals states the solution to broadband affordability will not be found in state laws or mandates that attempt to regulate broadband pricing, at least until the current federal law changes.

Frontier: Only the Customers With the Fastest Internet Speeds Get the Emergency Broadband Benefit

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)

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