Frontier Communications claims its expansive broadband deployment efforts in West Virginia will take the Mountain State from the bottom of the broadband barrel to the very top within a few years.

Dana Waldo, Frontier’s senior vice president and general manager, said the company has completely turned around landline and broadband service in West Virginia just over a year after Verizon Communications left the state.

In a wide-ranging radio interview with MetroNews, Waldo claims complaints are way down while DSL broadband deployment is way up.  In just about a year, Frontier has expanded broadband to 76 percent of its West Virginia service area, adding 85,000 additional homes and businesses that previously had no access to wired broadband.

“We made a commitment to spend about $310 million, from the time of the transaction through 2013, to improve the network, to expand broadband across the state and for other capital improvements,” Waldo told MetroNews Talkline.

Frontier Communications’ Dana Waldo talks with MetroNews Talkline about phone and broadband service in West Virginia. July 19, 2011. (11 minutes)
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Currently, West Virginia ranks 47th in the United States for broadband access, mostly because large sections of the rural, mountainous state simply don’t have access to any provider.  What access most do have, outside of major cities like Charleston, Huntington, Wheeling, and Parkersburg comes from telephone company-provided DSL.  Verizon used to be the dominant provider in West Virginia, with Frontier providing service in limited areas.  But after Verizon sold its operations in the state to Frontier, the independent telephone company is now the only telecommunications provider for many rural communities.  For the majority of customers outside of the largest cities, Frontier markets DSL at speeds up to 3Mbps, hardly cutting-edge.

Frontier’s backbone network is deemed the worst in the nation for a wired provider, according to statistics collected and analyzed by Netflix.

“When comparing broadband in states like New York or New Jersey with West Virginia… there is no comparison,” shares Stop the Cap! reader Steve who lives in Hempstead, N.Y., but owns a cabin outside of Beckley, W.V.  “You can get Cablevision’s cable broadband at rocket ship speeds or Verizon FiOS fiber-to-the-home, which is even faster, in New York.  For my neighbors and me in West Virginia, there is one choice – Frontier Communications’ DSL, which can manage 800kbps on a good day.”

“I almost drove off the road laughing as I listened to the sheer nonsense of Mr. Waldo’s empty promises,” Steve shares. “This company’s idea of broadband access is up to 3Mbps DSL while nearby states like Virginia and Pennsylvania are getting fiber or cable broadband speeds ten times faster.  How he expects to make West Virginia a top-5 broadband state with their obsolete DSL is a question the gushing host never bothered to ask.”

Steve doesn’t think too many of his Mountain State neighbors are as excited as Mr. Waldo by Frontier.

“God help you if your line goes out, because they can take days to get around to fix it,” Steve says. “Waldo tries to sell you his possum pie with claims the company takes longer to effect repairs so they are ‘done right the first time,’ which is a real hoot considering all of the repeated outages customers experience.”

Steve doesn’t lay the blame entirely at Frontier, however, claiming Verizon fled the state after mangling their outdated landline network and keeping it running with electrical tape.

“Frontier bought into a real mess, and I’m sure they will eventually fix a lot of the problems Verizon didn’t ever care to fix, but that doesn’t make West Virginia a broadband nirvana — certainly not with Frontier’s DSL.”

Rest in Peace, AT&T DSL

AT&T CEO Randall Stephenson doesn’t think much of the company’s largest-reaching broadband product – DSL service, telling an audience at the the National Association of Regulatory Utility Commissioners summer seminar in Los Angeles that AT&T developed DSL mostly to compete with Comcast, but “now that’s obsolete.”

That’s a remarkable admission for AT&T, which continues to provide the bulk of its Internet access to consumers over DSL on its copper-wire telephone network.  Comcast spokeswoman Sena Fitzmaurice, in attendance, promptly tweeted the news to her followers: “AT&T CEO — to chase comcast we built dsl, it is obsolete now”

The story from GigaOm’s Stacey Higginbotham only got stranger when an AT&T spokesperson tried to explain away Stephenson’s careless remarks:

Stephenson was answering a question from an audience member about how state regulators should think about new technology cycles when they are considering things like USF. He said that new technology used to be amortized over a 10-15 year period, but that has shrunk to about 5 years now. He said that DSL was introduced in the 1990s, it has been surpassed in speed by U-verse and Comcast’s DOCSIS 3.0. He also gave the example of deploying 3G in 2006 … and now 5 years later we are rolling out 4G. His point was — new technology is being surpassed by the next generation much quicker than ever before. We have millions of customers using DSL and remain fully committed to the technology — even as we constantly look to bring innovation to the marketplace.

That innovation comes mostly from the company’s more advanced DSL platform U-verse, which is only slowly working its way across urban AT&T service areas.  Unfortunately, that service will not likely be forthcoming for AT&T’s rural landline customers, who will be left with “obsolete” DSL service, if available at all, indefinitely.

With an increasing amount of AT&T’s revenue coming from its wireless division, there is little incentive for AT&T to expand DSL service into areas where it is not already sold.  In fact, most of the company’s landline-oriented lobbying has been directed at allowing the company to abandon its “universal service” obligations to provide decent, basic telephone service in rural areas.  The company has already won that deregulation in several of the states it serves, but has given no indication if and/or when it plans to shut off its landline service.

Landline providers hope American consumers will lead the way, as an increasing number disconnect their home phone lines permanently.

More than half of adults between the ages of 25 and 29 reside in wireless-only homes, according to the Federal Communications Commission.

“The number of Americans who rely exclusively on mobile wireless for voice service has increased significantly in recent years,” the FCC said, citing a January-June 2010 National Health Interview Survey.

Unfortunately, rural Americans overwhelmingly receive broadband over that landline network in the form of basic DSL, usually at speeds of 1-3Mbps.  If that network is discontinued, their opportunity for broadband service goes with it.

Phillip "Not Paid by AT&T" Dampier

When asked if the merger of AT&T and T-Mobile will limit customer choice, NAACP’s local executive director Stanley Miller told a Cleveland, Ohio television station, “I don’t think that’s an issue in today’s environment; I think the companies are smarter today and they will make people understand and give them the beneficial services that they’ll need.”

The civil rights group had nothing to say about how much AT&T will charge for these “beneficial services.”

At least WEWS-TV in Cleveland is bothering to ask the question.  Most of America’s television news has either ignored the enormous merger on offer from AT&T and T-Mobile, or didn’t wade much further beyond AT&T’s press release about the “benefits” the merger will bring.  Unfortunately, the television station never bothered to alert viewers to the fact the civil rights group receives substantial financial support from AT&T.

Miller’s performance trying to tout his parent organization’s unqualified support for the merger sent a very clear message to anyone watching NewsChannel 5 — he doesn’t really understand what he is talking about.

On the issue of expanding wireless service into rural Ohio, Miller was left tongue-twisting his way into advocating a monopoly because they’ll be best equipped to get service to those who need it.  That’s a fascinating prospect — a monopoly spending money expanding service where it is unprofitable to provide.  That’s the reason companies like AT&T have ignored rural America, and will continue to do so — merger or not.

Miller (WEWS-TV)

In fact, AT&T’s claim that it needs the network of T-Mobile to stop the persistent problems of dropped calls and slow data service doesn’t make much sense either.  Verizon, AT&T’s closest competitor, doesn’t seem to be suffering those problems, perhaps because it has made investments in upgrades AT&T has avoided.

In California, consumer advocate Jon Fox was taking an equally skeptical look at AT&T’s claims on behalf of CalPIRG, the California Public Interest Research Group.  Fox noted AT&T’s promotion of the merger in his state came at invitation-only cheerleading sessions run by company officials:

Earlier this month, AT&T California President Ken McNeely explained to an invitation-only audience that the proposed merger with T-Mobile will create new jobs, help communities and improve wireless phone service. AT&T preferred not to take questions from the general public on how that vision fits with AT&T’s history of consolidation, layoffs and aggressive market behavior.

Nearly 30 years after regulators broke up AT&T’s unprecedented control over the U.S. wired phone market, consumers are asked to believe that this time things will be different. This notion defies both experience and common sense. Unless significant market regulation is put into place that encourages a competitive wireless arena to flourish, this proposed merger will be bad for consumers, innovation and economic growth.

Fox notes the wireless marketplace in the United States is hardly a paragon of competitiveness today.  If the merger were approved, 76 percent of Americans would receive wireless service from two providers — AT&T and Verizon.  Fox observed America’s next-most-hated conglomerate — the oil and gas industry — wishes it could have that sort of market power.  The top two oil companies in the U.S. have a combined market share of only 24 percent.  America, he notes, wouldn’t tolerate that kind of consolidation in the gasoline market, so why should we tolerate it in the mobile market?

The California Public Interest Research Group

Fox advocates more competition, not less.  He suggests the government force AT&T and Verizon to open their cellular networks to independent third party competitors at fair prices, and let everyone compete.  That could germinate competition that would end the chorus of rate increases from the largest players and allow for innovative pricing plans that don’t force customers into the nearly identical service plans AT&T and Verizon want to force you to accept.  T-Mobile already provides the most innovative pricing in the wireless marketplace, and AT&T is about to swallow that innovation whole.

What ultimately happens to a well-dwarfed Sprint remains an open question, but one many on Wall Street have already answered, suspecting America’s third largest carrier simply won’t be in a position to compete.  Fox thinks the situation is dire when two companies will have a virtual lock on wireless data services Americans increasingly depend on.

That’s not the view of the NAACP, of course.  But then the NAACP is hardly an independent observer, being the recipient of a considerable amount of money and executive talent from AT&T.  That counts for a whole lot more than the rank and file members of the organization, who will be paying the increased prices AT&T has in store for everyone.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WEWS Cleveland ATT T-Mobile Merger 7-14-11.mp4[/flv]

WEWS-TV in Cleveland investigates the ramifications of a merger between AT&T and T-Mobile.  More than 94% of all Ohioans filing comments with FCC oppose the merger, but groups like the NAACP support it.  NewsCenter 5 wanted to find out why.  (3 minutes)

Cantor

For all of the bluster about not raising taxes, a group of House Republicans have proposed doing what one telecom organization concludes is exactly that by diverting Universal Service Fund revenue paid by landline and cell phone customers to reduce the budget deficit.

The idea to divert at least $1 billion annually — about 25% of the USF budget, comes from House Majority Leader Rep. Eric Cantor (R-Va.).  USF fees are paid by consumers as part of their telephone bill.

With nearly a quarter of the USF’s $4.5 billion annual revenue diverted to the treasury, phone companies would either have to curtail efforts at rural broadband expansion, now proposed under USF reform efforts, or lobby for an increase in the amount of the fee to cover the diverted shortfall.

Telecom industry groups representing rural phone companies and local utility regulators blasted the proposal, saying it would destroy rural broadband expansion efforts underway by small independent and co-op phone companies.  The Universal Service Fund was designed to subsidize phone service in rural America to ensure equality of access and rates regardless of where Americans live. Without it, many rural phone companies face serious financial difficulties, especially as consumers increasingly look to providers to deliver broadband service.

“While we understand Congress is scrambling to resolve the deficit issue, our lawmakers should not tap into the Universal Service Fund as a last-minute solution. To divert these vital but limited funds from their intended use would be counterproductive and may undermine our national broadband goals,” said National Association of Regulatory Utility Commissioners president Tony Clark. “The Universal Service Fund is funded by fees consumers pay through their telephone company to ensure affordable access to telecommunications service across America. The Universal Service Fund receives no federal monies and should not even be under consideration in this debate.”

John Rose, president of the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), called Cantor’s proposal “a totally new tax.”

The Federal Communications Commission has been working with state and local regulators, members of Congress, and rural telephone interests to transition the fund away from subsidizing basic telephone service, which is now ubiquitous in the United States, and towards a general purpose broadband rollout fund, to help provide capital to expand broadband service into communities deemed by larger providers as unprofitable to serve.

Some critics of the program suggest in its present form, it suffers from waste, fraud, and abuse.  Rep. Cliff Stearns (R-Fla.) noted the original fund charged consumers less than five percent of their long distance bill, but subsequent increases have resulted in consumers paying up to 14%.  Stearns said more must be done to reduce the cost of the USF for consumers and has supported prior reform efforts.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Universal Service Fund – Cliff Stearns 11-18-09.flv[/flv]

Rep. Cliff Stearns (R-Fla.)’s opening remarks in a 2009 hearing criticize the increasing costs consumers find on their phone bills for the Universal Service Fund.  (5 minutes)

Meigs County, Ohio

Connect Ohio, one of the many state chapters working with telecommunications industry-backed Connected Nation, has released its 2011 Technology Assessment about how the state is adopting broadband technology.

Despite celebrating improvements, large parts of rural Ohio still do not receive any kind of broadband service, especially from the state’s dominant provider AT&T, one of the companies that has traditionally backed Connected Nation.

The friendly relations these broadband groups maintain with their sponsors results in reports that strenuously avoid any direct criticism of providers for ignoring rural Ohio, particularly in the southeastern part of the state where broadband is especially difficult to obtain.

Connect Ohio’s findings, mostly provided by voluntary data from Internet Service Providers and respondents to various surveys, downplays rural Ohio’s broadband drought:

Statewide, 5% of Ohio residents report that broadband is not available where they live, 85% say with certainty that broadband is available, and 10% do not know whether broadband service is available.  By comparison, Connect Ohio’s provider-validated Broadband Service Inventory found that 1.7% of households do not have terrestrial fixed broadband service access.

The disparity in Connect Ohio’s numbers is especially apparent in rural Meigs County, located in southeastern Ohio.

“Geographically speaking, nearly two-thirds of Meigs County does not have easy access to affordable broadband,” Meigs County Economic Development Director Perry Varnadoe told The Daily Sentinel. “In terms of infrastructure, access to broadband is just as important as water and sewer service to businesses.”

Varnadoe thinks the few major providers that do offer service in the county are basically done expanding their service areas, and Varnadoe believes broadband adoption has reached a ceiling in Meigs County.

With much of the county bypassed for DSL or cable modem service, the only exception to this is fixed wireless service from New Era Broadband.  Unfortunately, it’s a costly alternative to traditional DSL.

New Era Broadband of Coolville is a Wireless ISP

New Era delivers up to 1.5Mbps service for $60 a month with a $200 installation fee and a two-year service agreement, and provides service in the vicinity of the community of Racine.

The company is still waiting on a $2.9 million grant to expand service to an additional 3,000 residents, mostly in the area of Five Points, which only has access to dial-up Internet.

Only about half the residents of Belmont, Jefferson, Monroe and Harrison counties have broadband connections at home, the study also found.  The Intelligencer/Wheeling News-Register placed most of the blame for that on residents not being particularly interested in the Internet, but service and cost are likely more important factors, as cable and DSL service is also spotty in those counties as well.  If there is a computer in the home, there is a demand for broadband service, especially in households where children find Internet access increasingly important to complete study work.

For most residents, it has become a waiting game to see who will deliver access, if anyone will.  In most of Ohio, customers look to the phone or cable company for access.  Rural Ohio lacks good cable broadband coverage, and DSL from the phone company first requires an interest in providing the service, and AT&T has not proven to be aggressive in rural communities in the state.

In fact, the phone company has been seeking approval to discontinue providing rural landline service at a time and date of its choosing.  If the landline goes, the chance for wired DSL goes with it.