New York Gov. Andrew Cuomo discussed affordable internet at the State of the State address in January 2021.

Low income New Yorkers will soon be able to subscribe to internet service at speeds starting at 25/10 Mbps for $15 a month, thanks to a new law passed by the state legislature and signed by Gov. Andrew Cuomo.

To qualify, a consumer will need to show proof of active enrollment in any of the following programs:

• Medicaid
• Free or discounted school lunches
• the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as “food stamps”
• A senior or disability rent increase exemption

Almost every internet service provider of consequence in New York will be required to introduce a low income discounted internet program by June 2021. Consumers will be offered at least two options, depending on the technological capacity of a provider’s network:

• $15/month basic service at speeds of at least 25/10 Mbps
• $20/month enhanced service bringing download speeds up to 200 Mbps.

Rates will be fixed for at least five years, after which providers can increase prices based on the rate of inflation or by a modest percentage allowed by the state. In 2023, the New York State Public Service Commission will be permitted to require increases in the minimum download speeds offered.

The measure is part of New York’s effort to expand broadband availability and affordability across the state. Earlier broadband funding programs helped expand service into rural, unserved areas. This year, the legislature and the governor are targeting the digital divide between those who can and cannot afford internet access. The state’s largest cable operator, Charter Spectrum, already offers low-income customers its own Spectrum Internet Assist program, with similar qualifications. The company charges $14.99/month for 30/4 Mbps internet service, but excludes current customers from enrolling and may reject customers with past due balances owed in the past.

Gov. Cuomo announced the initiative at the State of the State Address in January. Critics called the plan “window dressing,” noting the state’s largest telecommunications companies including Charter Spectrum, Verizon, Altice, and Frontier already offer internet discount programs. Many also continue to question the governor’s contention that 98% of New Yorkers can now access high-speed internet and the overall cost and quality of service.

To assist residents in finding a suitable provider, the state launched an Affordable Internet website to help consumers sign up for discounted service. In some cases, additional discounts may be available.

The legislation also mandates the Public Service Commission to study and report back on internet accessibility and affordability by this time next year. The PSC will scrutinize how many New York homes and businesses still lack access to high-speed internet, as well as studying how reliable service providers are, what rates they charge, and the current state of competition in New York.

New York consumers can share their own experiences with internet service providers the state will use to guide potential future legislation.

WGRZ in Buffalo took a closer look at whether New York’s mandate for affordable internet service was a game changer or just window dressing. (2:33)

Clyburn

Congressman James Clyburn (D-S.C.) plans to reintroduce a bill offering $100 billion dollars to provide rural high speed internet service in unserved and underserved parts of the United States and to provide subsidies as needed to ensure that internet service is affordable.

The return of the Accessible, Affordable Internet for All Act will be welcomed by the House Rural Broadband Task Force and other groups appealing for rural broadband funding to resolve the pervasive lack of high-speed internet access in unprofitable service areas.

Clyburn notes that in his home state, one in ten rural South Carolinians lack access to suitable broadband service, despite years of more modest funding programs. His bill went nowhere in the 2020 session as part of the Democrats’ $1.5 trillion infrastructure bill, dubbed the Moving Forward Act. With the election of President Joe Biden and the razor thin Democratic majority control of the U.S. Senate, some form of expanded infrastructure spending bill is likely to emerge in Congress this spring, which will include rural broadband funding.

Like last year’s bill, the 2021 version will likely include:

• $80 billion in direct subsidy funds to build out high-speed rural internet access to homes and businesses.
• $5 billion set aside for low interest broadband deployment loans
• $5 billion for distance learning programs
• Funding for Wi-Fi service in school buses
• The creation of the Office of Internet Connectivity and Growth within the National Telecommunications and Information Administration to monitor, promote, and assist rural communities and those economically disadvantaged in getting affordable high-speed internet service established in their community.
• Funding for digital equity programs to train those not yet connected in how to use the internet.
• A requirement that the FCC track and analyze national broadband pricing and ensure price transparency.

Clyburn’s 2020 bill also knocked down state barriers on building and expanding municipal broadband networks.

According to the FCC, 21 million Americans and 10 million school-age children do not have internet access. Low-income households are the least connected in America, and, not surprisingly, rural communities are the least served. What might surprise us all is that the data reveals a 75% correlation between median household income and broadband access In 2019, US Representative Jim Clyburn (D-S.C.) created the Rural Broadband Task Force to close the digital divide, with the goal of all Americans having high-speed internet access by 2025. The digital era is to the 21st century what electricity was to the 20th, argues Clyburn. Bridging the digital divide is something we must address if we are going to reset the US economy for all. Featuring Jim Clyburn in conversation with Naomi Nix. (9:21)

Gooch

A bill in the Georgia legislature that would divert a portion of a state fund that currently subsidizes rural landlines towards rural internet expansion ran into trouble last week after lobbyists representing AT&T and several small rural telephone companies announced opposition to the measure.

Sen. Steve Gooch (R-Dahlonega), the chief sponsor of Senate Bill 65, is seeking to boost subsidy funds to expand high-speed internet in unserved areas of the state. His bill would designate up to $35 million annually towards construction of new broadband connections. Without the measure, state residents would instead see a reduction in Universal Access Fund (UAF) fees on their monthly phone bills beginning later this year. But if the bill passes, modest UAF charges would continue at 2020 levels for an additional nine years, expiring June 30, 2030.

Georgia’s Senate Regulated Industries Committee reviewed the current state of rural broadband funding in a meeting held last Thursday in Atlanta. Gooch noted Gov. Brian Kemp already set aside $20 million for rural broadband in the 2021 state budget, but he felt more needed to be done.

“Twenty million dollars […] is a good start,” Gooch said. “But we need to put more money into this year after year until the problem is fixed.”

Gooch’s measure has attracted 20 co-sponsors in the legislature so far:

Georgia’s cable and phone companies appear much less supportive of Gooch’s effort. Leading the charge against Gooch’s bill was AT&T Georgia. Kevin Curtin, AT&T’s assistant vice president of legislative affairs in Georgia, said diverting money from the UAF Fund to rural broadband expansion was unnecessary.

“There are many federal government programs doling out substantial amounts of funding to spread broadband,” Curtin said. AT&T has regularly pointed to the FCC’s Rural Digital Opportunity Fund (RDOF) as the best source of rural broadband funding. The 10-year, $9.2 billion program has already designated $326.5 million for rural broadband expansion in Georgia. But it will take years for RDOF to dispense its available funds.

The state’s largest lobbying group for the cable industry does not care for the bill either.

“We want to continue to try to bring broadband to every Georgia citizen,” said Hunter Hopkins, interim executive director of the Georgia Cable Association. “Let’s just put more money in the general fund versus tinkering with the UAF.”

Rural Georgians are usually left waiting indefinitely for private industry investment to expand rural internet access. Instead, rural utility cooperatives are now stepping up to solve the rural broadband problem in parts of the state, often without waiting for government subsides.

Last week, Conexon, a fiber overbuilder and internet service provider teamed up with two member-owned utility co-ops with a plan to bring high-speed gigabit internet to 80,000 homes and businesses in 18 rural Middle Georgia counties.

The partnership will combine utility co-op investments of $135 million from Central Georgia EMC and $53 million from Southern Rivers Energy with $21.5 million from Conexon to build a new, 6,890 mile fiber to the home broadband network over the next four years that will serve residents in Bibb, Butts, Clayton, Coweta, Crawford, Fayette, Henry, Jasper, Jones, Lamar, Meriwether, Monroe, Morgan, Newton, Pike, Putnam, Spalding, and Upson counties. Monroe County has also offered $1.3 million to incentivize the partnership to break ground in that county as quickly as possible.

Customers in rural Georgia have given up waiting for companies like AT&T and Windstream to expand high-speed internet service.

“The majority of members in our service area have no access to the quality, high-speed internet service they so desperately need. That changes today,” said Southern Rivers Energy President and CEO Michael McMillan. “We know electric cooperatives play a critical role in connecting underserved areas and we are proud to partner with Conexon to help bridge the digital divide for our communities. This partnership will enable thousands of rural Georgians to finally access the same online connections as those in more urban areas, while allowing us to maintain focus on our core mission – providing reliable, affordable electricity to our members.”

Charter Communications will spend almost $5 billion a part of a multiyear, 24-state broadband buildout to deliver high-speed internet service to more than a million unserved homes and businesses.

Approximately $1.2 billion of the cost to serve these low-density, mostly rural communities will come from the federal government’s Rural Digital Opportunity Fund (RDOF), which is subsidizing some of the expenses associated with providing service in areas deemed unprofitable to serve.

Preparation and planning for Charter’s RDOF Phase 1 broadband buildout has already begun, with an additional 2,000 employees and contractors expected to focus on Charter’s rural expansion efforts in Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, and Wisconsin.

The biggest expansions in coverage area appear to be in North and South Carolina, North and Eastern Wisconsin, East Texas, Ohio, and Eastern Tennessee.

Charter’s RDOF Expansion Project Map

The network Charter will build in these rural areas will offer Spectrum 1 Gbps high–speed broadband access to all newly served customer locations with starting speeds of 200 Mbps, with no data caps, modem fees, or contracts. Customers will also be able to subscribe to Spectrum TV, home phone and wireless mobile service.

Charter CEO Thomas Rutledge said one of the most important factors governing when service will become available is how well the cable company will be received by the owners of utility poles in the various regions.

“The more cooperation we have with the pole owners and utility companies, the faster we can connect these communities with high-speed internet services,” Rutledge said in a company news release. “We look forward to working with local municipalities, electric cooperatives, and investor-owned utilities to ensure that permits are obtained in a timely, fair and cost-effective fashion.”

Nick Jeffery will be appointed president and CEO of Frontier Communications effective March 1, 2021, succeeding Bernie Han.

Frontier Communications today announced a “holistic transformation” of its business from a copper-based landline company to a fiber to the home internet service provider, with plans to eventually offer fiber to the home service to nearly six million residential customers, approximately three million already served by fiber networks acquired from Verizon and AT&T.

As part of that transformation, Frontier today announced yet another new CEO, Nick Jeffery, will take over from current CEO Bernie Han in March 2021. Jeffery was CEO of Vodafone UK, one of Great Britain’s largest mobile operators. Jeffery agreed to replace Han, who became CEO and president only a year ago, in return for a $3.75 million signing bonus, a $1.3 million annual salary, and eligibility for more than $8 million in annual bonuses and equity awards.

“I am honored to be appointed Frontier’s next CEO, and I am excited to lead the company in its next phase,” Jeffery said in a statement. “Frontier owns a unique set of assets and maintains a competitive market position. My immediate focus will be on serving our customers as we enhance the network through investments in our existing footprint and in adjacent markets while building operational excellence across the organization.”

Frontier has been in Chapter 11 bankruptcy since April 2020 and is being reorganized to eliminate about $10 billion in debt and another billion annually in debt-servicing interest payments. Frontier’s bankruptcy plan will give four investment firms — Elliott Management, Franklin Mutual, Golden Tree Asset Management, and HG Vora, effective control over Frontier. The four are reportedly behind the decision to install Jeffery as Frontier’s new CEO to protect their financial interests. He has a reputation of repairing damaged customer relationships and improving sales, while also being willing to cut costs and simplify services sold to customers. Jeffery will also be joined by former Verizon executive John Stratton, who has accepted a position of executive chairman of the board. Jeffery is expected to lead the company out of bankruptcy sometime in early 2021.

Frontier has repeatedly promised to retire significant parts of its copper wire network and expand fiber to the home service, but over the last decade most of Frontier’s fiber footprint has been acquired from other phone companies, notably Verizon and AT&T. Most of Frontier’s own fiber expansion has come from installing service in new housing developments and in rural areas where it received taxpayer or ratepayer-funded subsidies to expand service to unserved areas.

In a conference call held earlier today, Frontier executives signaled the company will not hurry to deliver fiber upgrades to Frontier customers. In some of the most opaque language ever uttered in a Frontier conference call, company officials warned some Frontier customers may actually find themselves sold to another service provider. The company plans to divide its copper customers into two categories: those destined to be a part of Frontier’s fiber future and those left stuck on copper or sold off after Frontier “strategically reevaluates individual state operating performance employing a virtual separation framework” — all to “optimize our returns on invested capital.”

Frontier emphasizes its planned total of “nearly 6 million fiber-enabled households” will come to fruition “over the long term.” In 2020, the company plans to bring fiber service to approximately 60,000 new households in six states, many in new housing developments Frontier was already expected to serve.

Frontier’s modernization plan will likely sell unprofitable service areas and selectively upgrade many customers over a ten-year period to fiber optics. (Source: Frontier Communications)

“We have completed construction of about 60% of our target locations and continue to ramp quickly and remain on target to reach our year-end goals,” said Han. “Although, it is still very early in the process, our offer is very appealing to customers. While we are successfully converting existing copper customers to fiber, most of our early gains are coming from winning net new customers. Early penetration and ARPUs are performing at or above targets.”

In 2021, the company announced it had “planning and engineering” underway for unspecified fiber to the home service upgrades in copper service areas “in select regions.” But most of Frontier’s fiber upgrades will take place over the next decade. Specifically, Frontier plans to wire up to 2.9 million homes with fiber using a combination of its own money and subsidy funds provided by the FCC. Frontier’s new owners have signaled they will not go out on a limb to finance rapid fiber upgrades, and you better live in a state where fiber upgrades are being given priority.

“Of the 2.9 million new fiber homes passed for the modernization plan, roughly 2.6 million of them are in […] California, Texas, Florida and Connecticut and […] West Virginia, Illinois, New York and Ohio,” Han noted.

“The modernization plan is expected to be completely self-funding […] and has been developed with strict return on capital hurdles, allowing for very attractive returns,” said Robert A. Schriesheim, chairman of the Frontier’s Finance Committee of the Board. “The expected shift in the subscriber base from the modernization plan will increase the percent of fiber subs from 45% today to 87% over the plan horizon and will drive a transformation of business mix that is expected to result in 75% of revenue coming from fiber products in the long-term as compared to about one-third today. Equity Management Software like the ones at Astrella can be a key tool for managing this transformation and tracking ownership changes as the company grows. By automating the administrative processes and ensuring transparency, it allows businesses to focus on scaling while maintaining precise equity data.”