(Image courtesy of: Rick Snapp)

CenturyLink customers in Utah were rudely interrupted earlier this month by an ad for CenturyLink’s pricey security and content filtering software that left their internet access disabled until they acknowledged reading the ad.

Dear Utah Customer,

Your internet security and experience is important to us at CenturyLink.

The Utah Department of Commerce, Division of Consumer Protection requires CenturyLink to inform you of filtering software available to you. This software can be used to block material that may be deemed harmful to minors.

CenturyLink’s @Ease product is available here and provides the availability of such software.

As a result of the forced ad, all internet activity stopped working until a customer opened a browser session to first discover the notification, then clear it by hitting the “OK” button at the bottom of the screen. This irritated customers who use the internet for more than just web browsing.

One customer told Ars Technica he was watching his Fire TV when streaming suddenly stopped. After failed attempts at troubleshooting, the customer checked his web browser and discovered the notification message. After clicking “OK,” his service resumed.

A CenturyLink spokesperson told KSL News, “As a result of the new law, all CenturyLink high-speed internet customers in Utah must acknowledge a pop-up notice, which provides information about the availability of filtering software, in order to access the internet.”

In fact, according to a detailed report by Ars Technica, CenturyLink falsely claimed that the forced advertisement was required by Utah state law, when in fact the company would be in full compliance simply by notifying such software was available “in a conspicuous manner.”

CenturyLink chose to turn the Utah law to their profitable advantage by exclusively promoting its own product — @Ease, a costly ISP-branded version of Norton Security. CenturyLink recommended customers choose its Advanced package, which costs $14.95 a month. But parental filtering and content blocking tools are not even mentioned on the product comparison page, leaving customers flummoxed about which option to choose.

In effect, CenturyLink captured an audience and held their internet connection hostage — an advantage most advertisers can only dream about. CenturyLink countered that only residential customers had their usage restricted, and that because of the gravity of the situation, extraordinary notification methods were required.

But as Ars points out, no other ISP in the state went to this extreme level (and used it as an opportunity to make more money with self-interested software pitches).

Bill sponsor Sen. Todd Weiler (R), said ISPs were in compliance simply by putting a notice on a monthly bill or sending an e-mail message to customers about the software. Weiler added that ISPs had all of 2018 to comply and most had already done so. AT&T, for example, included the required notice in a monthly bill statement. CenturyLink waited until the last few weeks of the year, and used it as an opportunity to upsell customers to expensive security solutions most do not need.

With the demise of net neutrality, ISPs that were forbidden to block or throttle content for financial gain are now doing so, with a motivation to make even more money from their customers.

Just had @CenturyLink block my internet and then inject this page into my browser (dns spoofing I think) to advertise their paid filtering software to me. Clicking OK on the notice then restored my internet… this is NOT okay! pic.twitter.com/NtCZUeJF8I

— Rich Snapp (@Snapwich) December 9, 2018

Brindisi

Congressman-elect Anthony Brindisi has a message for the New York State Public Service Commission: stop giving Charter Spectrum extensions.

“Today, I am asking the Public Service Commission to make Feb. 11 the absolute final deadline for Charter Spectrum to present its plan to give customers the service they deserve or it is time to show them the exit door here in New York State,” Brindisi said at a press event. ““No one’s losing their cable. They’re not just going to turn the switch off and leave. The would have to bring in another provider. I would actually like to see a few providers so people can have some choices in their internet and cable providers. Competition, I believe, is a good thing.”

Brindisi is reacting to repeated extensions of the PSC’s order requiring Charter Spectrum to file an orderly exit plan with state regulators so that an alternate cable provider can be found. Private negotiations between the PSC staff and Charter officials have resulted in several deadline extensions, the latest granted until after the new year. Observers expect Charter and the PSC will settle the case, with the cable company agreeing to pay a fine and fulfilling its commitments in return for the Commission rescinding its July order canceling Charter’s merger with Time Warner Cable.

Brindisi, a Democrat from the Utica area, made Charter Spectrum a prominent campaign issue, and even ran ads against the cable company that Spectrum initially refused to air.

Brindisi says he would be okay with Spectrum remaining in the state as long as it meets its agreements, but he is not very optimistic that will happen.

“Number one — they committed that they were going to expand their service into underserved areas,” Brindisi said. “Number two — they weren’t going to raise rates and they have not complied or lived up to their agreement so I think action has to be taken.”

WUTR in Utica reports Congressman-elect Anthony Brindisi’s patience is wearing thin on Charter Spectrum. (0:48)

Vermont residents want better internet service and protection for universal access to phone service, even if customers have to pay a surcharge on their bill to make sure the traditional landline is still available in 100% of the state.

In contrast, some residents complain, Vermont regulators want to make life easier for a telecom industry that wants to abandon universal service, fails to connect rural customers to the internet, and has left major cell phone signal gaps around the state.

In 2017, Vermont commissioned two surveys that asked 400 business and 418 residential customers about their telecommunications services. It was quickly clear from the results that most wanted some changes.

Vermont is a largely rural, small state that presents a difficult business case for many for-profit telecom companies. Verizon Communications sold its landline business in northern New England, including Vermont, to FairPoint Communications in 2007. FairPoint limped along for several years until it declared bankruptcy and was eventually acquired by Consolidated Communications, which still provides telephone service to most of the state.

Many rural areas are not furnished with anything close to the FCC’s definition of broadband (25/3 Mbps). DSL service at speeds hovering around 4 Mbps is still common, especially in areas relying on Verizon’s old copper wire infrastructure.

Comcast dominates cable service in the state, except for a portion of east-central Vermont, which is served by Charter Communications (Spectrum). Getting cable broadband service in rural Vermont remains challenging, as those areas usually fail the Return On Investment test. Still, 85% of respondents said they had internet service available in their home. Vermont’s Department of Public Service (DPS) estimates about 7% of homes in Vermont have no internet provider offering service, with a larger percentage served only by the incumbent phone company.

The majority of residents own cell phones, with Verizon (47.5%) and AT&T (31.8%) dominating market share. Sprint has 0.6% of the market; T-Mobile has a 1.2% share, both largely due to coverage issues. But even with Verizon and AT&T, 40% of respondents said cell phone companies cannot deliver a signal in their homes. As a result, many residents are hanging on to landline service, which is considered more reliable than cell service. Some 40% of those relying on cell phones said they would consider going back to a landline for various reasons.

With the FCC ready to cut support funding for rural landline service, residents were asked if the state should maintain funding to assure continued universal access to landline service. Among respondents, 87.8% thought it was either “very important” or “somewhat important.” The study also found 51% would accept a general statewide rate increase to cover those costs, while 29% preferred rate increases be targeted to rural ratepayers only. About 16% did not like either idea, and 4% liked both.

When asked whether residents would be interested in having a fiber connection in their home, 80% of respondents said “yes,” but 30% were unwilling to pay a higher bill to get it.

Ironically, the state’s most aggressive residential fiber buildouts are run by some of the smallest community-owned internet providers, rural electric or telecom co-ops, and small independent phone companies. What makes these smaller providers different is that they answer to their customers, not shareholders.

Comcast and Charter are the two largest cable companies in Vermont.

Recently, the DPS released a 100+ page final draft of its 2018 Vermont Telecommunications Plan, setting out a vision of where Vermont should be a decade from now, especially regarding rural broadband expansion, pole attachment issues, and cell tower/small cell zoning.

The report acknowledges the state’s own existing rural broadband expansion fund is woefully inadequate. In 2017, the Vermont Universal Service Fund paid out $220,000 to assist ISPs with building out networks to rural areas.

“The amount of money available to the fund pales in comparison to the amount of funding requests that the Department receives, which is generally in the millions of dollars,” the draft report states. “With approximately 20,000 unserved and underserved addresses in Vermont, the Connectivity Initiative cannot make a meaningful dent in the number of underserved locations.”

Much of the report focuses on ideas to lure incumbent providers into volunteering to expand their networks, either through deregulation, pole attachment reform, direct subsidies, or cost sharing arrangements that split the expenses of network extensions between providers, the state, and residents.

A significant weakness in the report covered the forthcoming challenge of upgrading a state like Vermont with 5G wireless service:

Small cell deployment has been attempted along rural routes with very limited success and the national efforts to expand small-cell, distributed-antenna systems, and 5G upgrades have focused on urban areas. The common refrain on 5G is that ‘it’s not coming to rural America.’ 5G should come to rural Vermont and the state should take efforts to improve its reach into rural areas.

A small cell attached to a light pole.

To accomplish this, the report only recommends streamlining the permitting process for new cell towers and small cells. The report says nothing about how the state can make a compelling case to convince providers to spend millions to deploy small cells in rural areas.

Where for-profit providers refuse to provide service, local communities and co-op phone or electric providers often step into the void. But Vermont prohibits municipalities from using tax dollars to fund telecommunications projects, which the law claims was designed to protect communities from investing in ‘unprofitable broadband networks.’

The draft proposal offers a mild recommendation to change the law to allow towns to bond for some capital expenditures on existing or starting networks:

Vermont could use a similar program to help start Communications Union Districts as well as allow towns to invest in existing networks of incumbent providers. Limitations on the authority to bond would need to be put in place. Such limitations should include focusing capital to underserved locations only, limiting the amount (or percentage) of tax payer dollars allowed to be collateralized, and setting technical requirements for the service.

Such restrictions often leave community broadband projects untenable and lacking a sufficient service area or customer base to cover construction and operating expenses. Instead, only the most difficult and costly-to-serve areas would be served. The current law also prevents local communities from making decisions on the local level to meet local needs.

At a public hearing last Tuesday in Montpelier, the report faced immediate criticism from a state legislator and some consumers for being vague and lacking measurable, attainable goals.

“This plan does not appear to move Vermont ahead in a way that enables it to compete effectively,” said state Sen. Mark MacDonald (D-Orange). “It doesn’t seem to be moving forward at the pace we’re capable of.”

Clay Purvis, director of telecommunications and connectivity for the DPS, defended the plan by alluding to how the state intends to establish a cooperative environment for internet service providers and help cut through red tape. But much of those efforts are focused on resolving controversial pole attachment fees and disputes, assuming there are providers fighting to place their competing infrastructure on those utility poles.

Montpelier resident Stephen Whitaker was profoundly underwhelmed by the report.

“There is no plan at all here,” Whitaker said at Tuesday’s public hearing. “There is some new background information from the 2014 version, but there’s no plan there. There is no objective to reach the statutory goals.”

The telecom industry wants a new tax on broadband services to pay for rural broadband expansion.

Nearly two years after FCC Chairman Ajit Pai announced the formation of a new federal advisory committee on broadband development, the telecom industry-stacked panel has recommended implementing a new tax on websites and online subscription services like Netflix, Hulu, and Amazon Prime Video and turning over the proceeds to many of the same companies dominating the Committee.

The proposal is part of a large set of recommendations from the Broadband Deployment Advisory Committee (BDAC) designed to promote and streamline broadband expansion, especially in rural areas. If adopted by the states, the new tax would create a large broadband deployment fund that could be accessed by telecommunications companies like AT&T and Comcast to expand service without having to pay back the funds or give up part ownership of the taxpayer-funded expansion.

What caught many by surprise was the sweeping impact the new tax could have on the internet economy, because online businesses, streaming services, and even many website owners could be subject to the tax, if enacted:

Entities that financially benefit from access to a broadband system located in the state, including advertising providers, shall contribute to the Broadband Deployment Fund.

A comprehensive piece by Jon Brodkin on Ars Technica points out defining the meaning of “entities” and “advertising providers” will be crucial to determine who will have to pay the tax and who won’t:

Article 11 of the BDAC’s model state code would create a Rural Broadband Deployment Assistance Fund, paid for by contributions from broadband providers and “Broadband Dependent Services.”

The definition of “Broadband Dependent Services” is where things get interesting. An earlier version of that definition—available in this document—reads as follows:

“Broadband Dependent Service” means a subscription-based retail service for which consumers pay a one time or recurring fee which requires the capabilities of the Broadband Service which the consumer has purchased and shall also include entities that financially benefit from access to a broadband system located in the state, including advertising providers.

The BDAC met on December 7 and pared that definition back a bit to exclude “entities that financially benefit from access to a broadband system.” Video is available here; the discussion on the definition starts around 2:04:45.

BDAC Chair Elizabeth Bowles, who also runs an Arkansas-based wireless Internet service provider called Aristotle, expressed concern that the original version of the definition “was including every small business in America,” potentially forcing them all to pay the new tax.

Nurse

AT&T has been one of the strongest advocates for the new tax, and argued it should be as expansive as possible.

“It basically is everybody [that should be taxed] because this is a societal objective,” said Chris Nurse, assistant vice president for state legislative and regulatory affairs at AT&T. “Universal service is a societal objective. We want to spread that $20 or $30 billion burden more broadly so the tax is low on everybody.”

Google Fiber policy chief John Burchett objected, claiming under AT&T’s vision, everyone who has an internet connection would be taxed. In his view, AT&T’s proposal was “absurd.”

As the debate raged on, it became clear AT&T was once again looking for a way to be compensated by companies like Amazon and Facebook — using its ‘pipes’ without contributing towards the cost of the network.

“Who are we cutting out and who are we leaving in?” Nurse asked. “Today it’s basically the telephone companies [who pay] and not Google and not Amazon and not Facebook, right? And they’re gigantic beneficiaries from the broadband ecosystem. Should they contribute or not? Someone has to pay.”

Burchett

In the end, the BDAC settled on adopting a compromise over what broadband entities will be subject to the new tax:

“Broadband Dependent Service” means a subscription-based retail service for which consumers pay a one time or recurring fee, and shall also include advertising-supported services which requires the capabilities of the Broadband Service which the consumer has purchased.

This compromise definition primarily targets the new tax on streaming video services — the ones AT&T itself competes with. But it will also cover any websites sponsored with online advertising — like Facebook and Google, ISPs, subscription services delivered over the internet, as well as AT&T’s broadband competitors.

The proposal also seeks to guarantee that rural residents be granted access to affordable broadband, but the industry-dominated Committee chose to define “affordable” as the cost of internet access in urban areas, which some would argue isn’t affordable at all.

The draft proposal has been criticized by many stakeholders, including the National Rural Electric Cooperative Association, representing electric cooperatives. The group implied the new proposal was just the latest attempt to get the telecom industry’s wish list enacted.

“Instead of focusing on solutions for unserved and underserved rural communities, many of the recommendations focus on issues specific to urban areas where broadband is already available,” said NRECA CEO Jim Matheson. “Ignoring the precedent of federal law and laws in 20 states, the state model code would treat co-op poles like those belonging to large investor-owned utilities. The state model code would also cap pole attachment rates in state statute, effectively making those rates permanent. This code, in effect, increases regulatory burdens while giving co-ops less time and less money to comply with those regulations.”

The National Multifamily Housing Council also objected to another proposal approved in the draft.

“Article 8 of the MSC grants broadband providers the unilateral right to install facilities in all multifamily residential and other commercial buildings and mandate construction of broadband facilities at the property owner’s expense without regard to the rights and concerns of the owner,” the organization claimed. “NMHC/NAA and its real estate industry partners argued that Article 8 of the MSC is riddled with many practical and legal problems. Among the most serious issues with the MSC is that it interferes with private property rights, disrupts negotiations and existing contracts between property owners and communications service providers and will lead to costly regulation and litigation at the state level without any assurance of actually spurring broadband deployment.”

AT&T would be among the biggest beneficiaries of the tax fund, already receiving $428 million annually from another rural broadband fund to expand wireless internet access in rural areas. If Nurse’s predictions are correct, the tax could collect $20-30 billion, far more than has ever been spent on rural broadband before.

Liccardo

Critics also contend the BDAC’s industry-friendly proposals are predictable for a Committee created by FCC Chairman Ajit Pai and well-stacked with telecom industry executives and lobbyists. The former head of the BDAC was arrested by the FBI on fraud charges, and San Jose Mayor Sam Liccardo quit the Committee in January, writing, “the industry-heavy makeup of BDAC will simply relegate the body to being a vehicle for advancing the interests of the telecommunications industry over those of the public” in his letter of resignation.

Whatever the BDAC ultimately decides, the final proposal has a long road to travel before becoming law. Each state can choose to adopt the proposal, part of it, or none of it. In the end, it is just a “model code” for states to consider. But it will be part of the argument made by the telecom industry that laws must be streamlined to prevent delays in deploying service, and that those benefiting from broadband should cover more of the costs to provide it.

Ironically, the person most likely to be embarrassed by the model code could be FCC Chairman Ajit Pai, who has almost universally rejected new taxes and fees on broadband services. But his approval is not required to advance the argument and the model code to the states, where the telecom industry’s lobbyists are waiting to begin advocating the passage of new state laws enacting its recommendations.

Using data from the 2017 American Community Survey (ACS), released in September 2018 by the U.S. Census Bureau, the National Digital Inclusion Alliance ranked all 191 U.S. cities with more than 50,000 households by the percentage of each city’s households that lack home Internet connections of any kind.

Note that this data is not an indication of the availability of home broadband service, but rather of the extent to which households are actually connected to it.

In general, affordability and familiarity are the two biggest impediments that stop someone from signing up for internet access. With broadband providers boosting speeds, but also dropping affordable lower-speed plans, a digital divide based on dollars has worsened in many communities, despite the availability of discounted internet access plans for poor families with school age children or elderly users on disability. Kansas City, Kan. is a remarkable entry at 23rd worst in the country. It, along with its much larger counterpart across the Missouri border, was the first Google Fiber city.

1. Laredo, Texas
2. Brownsville, Texas
3. Hialeah, Florida
4. Detroit, Michigan
5. Cleveland, Ohio
6. Memphis, Tennessee
7. Miami, Florida
8. Philadelphia, Pennsylvania
9. Newark, New Jersey
10. Syracuse, New York
11. Chattanooga, Tennessee
12. Springfield, Massachusetts
13. Milwaukee, Wisconsin
14. New Orleans, Louisiana
15. Shreveport, Louisiana
16. Birmingham, Alabama
17. Mobile, Alabama
18. Macon-Bibb County, Georgia
19. Richmond, Virginia
20. Dayton, Ohio
21. Rochester, New York
22. Topeka, Kansas
23. Kansas City, Kansas
24. Baltimore, Maryland
25. Montgomery, Alabama