Ceylon City Council Member John Gibeau shows this Frontier Communications cable intentionally laid across the customer’s propane tank. (Image courtesy: Mark Steil, MPR News)

Frontier Communications technicians decided it would be perfectly safe to drape their telephone lines on top of a propane tank, use overhead tree branches as makeshift telephone poles, and leave phone cables laying on the ground — in lawns, fields, and farms — for up to three years in southern Minnesota.

Minnesota Public Radio found a number of problems with Frontier Communications in a special report outlining years of complaints about the phone company’s performance — or lack thereof — in small communities around the state, including in the town of Ceylon in Martin County, located along the Minnesota-Iowa border.

John Gibeau, a city council member, might tell visitors to be careful of Frontier’s phone cables, some that have laid on the ground in parts of town for years.

“There’s three lines there, that are just laying across the ground,” Gibeau told MPR News. “And they run down for probably another 60 yards.”

Frontier laid out the phone cables sometime ago, but they have never seen a day attached to a utility pole.

In another part of town, a Frontier line technician thought nothing about draping a phone line across the top of a homeowner’s propane tank. At one address, there was no convenient utility pole in sight, so the technician used a few trees in the neighborhood as makeshift poles, distributing the line through the tree branches which help keep the cable above ground so vehicles do not drive over it. Gibeau said Frontier has left it that way for almost three years.

Ceylon, Minn.

Another resident deals with Frontier’s phone line each time he mows his lawn. That is because Frontier just dropped the cable on the grass and left it there. He relocated it to a nearby flower bed to avoid an accidental entanglement with the lawnmower. Other neighbors have done their part, attaching Frontier’s lines to the top of fences and fence poles — anything in sight that can get the cable off the ground where it can be ruined over time.

In all these cases, Frontier has refused to fix the problems, despite repeated calls. But that may be asking for too much. At a hearing recently in Slayton, Frontier customer Dale Burkhardt lost his phone and DSL service after a construction crew accidentally severed the phone cable that serves his farm. More than a year later, Frontier’s repair crews have never shown up to repair the line, regardless of the number of trouble tickets and calls to customer service.

“I still don’t have a landline, I don’t have an internet,” Burkhardt said. “I’m getting a little fed up.”

As Minnesota’s Public Utilities Commission continues a series of public hearings around the state to hear complaints concerning Frontier Communications, regulators are getting an earful. Nearly 400 people have turned out for the hearings so far. Many report Frontier has not fixed their problems, no matter how often customers complain.

Javier Mendoza, Frontier’s vice president of communications, told MPR the company is listening to customers.

“For us, one customer who is out of service is one customer too many,” Mendoza said. “So, we would thank our customers for their patience. We recognize that from time to time we experience service issues and delays. And for those customers that are affected, we apologize to them.”

Frontier Communications scatters its phone cables on residents’ lawns, across a propane tank, and through tree branches as makeshift utility poles, reports Minnesota Public Radio (3:56)

With friends like these…

In an effort to attract new business, Frontier Communications has launched a new nationwide brand platform it claims will help customers “facing challenges and frustrations navigating today’s internet services market.”

The “Don’t Go it Alone” campaign advertises Frontier as your friend on the digital frontier.

In one ad, a balladeer laments customers trying to use a home internet connection that is too slow and unreliable to depend on for working from home. The ad shows customers flocking to nearby coffee shops “looking for bandwidth” they do not have at home.

While the ads claim Frontier’s FiOS network is faster than its competitor — Charter Spectrum, many Frontier customers living outside of a FiOS service area will likely find Frontier’s ads ironic. That is because Frontier has a poor track record achieving the promised speeds it advertises to its large base of DSL customers. The 2016 FCC Report, “Measuring Fixed Broadband” (the annual reports were discontinued by the Trump Administration’s FCC in early 2017), found Frontier a poor performer. Even its fiber network Frontier FiOS was measured losing ground in delivering advertised speeds and performance.

Minnesota Public Radio reports hundreds of complaints about Frontier Communications have prompted statewide public hearings about the company’s alleged poor performance. MPR shares the stories of two frustrated Frontier DSL customers paying for service they do not get. (3:28)

“Our internet here is horrible, our provider is Frontier,” Monica King Von Holtum of Worthington in southwest Minnesota, told Minnesota Public Radio. “It’s infuriating.”

Her service is so bad, she can tell if a neighbor starts using the internet or another family member starts browsing.

“If I’m literally the only person using the internet, it’s fine,” said King Von Holtum. “As soon as we have one or more people using different devices it just tanks and we can’t get anything done.”

She is hardly alone. In Minnesota, the Public Utility Commission has received more than 400 complaints and comments about Frontier’s frustrating performance. Customers report service interruptions lasting up to a week and internet speeds slower than dial-up.

One customer said Frontier lacks “common decency” because of the way it treats its customers, often stuck with only one choice for internet access in their rural service areas.

A speed test showing 0.4 Mbps from 2013 shows this is an ongoing problem.

King Von Houltum showed MPR the results of a speed test while being interviewed.

“We have 0.4 megabits per second,” said King Von Holtum, who pays Frontier for 6 Mbps service. “And our upload is pretty much nonexistent.”

Melody Webster’s family makes regular 5-mile trips into the town of Cannon Falls to use their local library’s Wi-Fi service. It is the only way her children can complete their school assignments, because Frontier’s DSL struggles to open web pages. Webster has called Frontier again and again about the speed problems, but told the public radio station she gets “lied to or pretty much laughed at.”

That’s a story Frontier’s balladeer is not likely to put to song.

Frontier spent an undisclosed amount hiring the ad agency responsible for the new advertising.

“A brand campaign must be creative and memorable. It also has to drive a client’s business forward,” said Lance Jensen, chief creative officer of Hill Holliday, which created the campaign. “The Balladeer is a fun and accessible character who brings humanity and humor to the frustrating experience of dealing with internet and TV service. We can’t wait to put him to work for the Frontier brand.”

The campaign launches this week in Frontier markets nationally and includes broadcast, radio, online video, out of home, digital and social components.

An “affable balladeer” sings about the frustrations of internet users who do not get the internet service they paid for, in this new 30-second ad from Frontier Communications. Ironically, slow speed is the most common complaint about Frontier’s own DSL service. (0:30)

Delrahim

The top antitrust regulator in the United States partly blames CNN for helping AT&T and Time Warner outmaneuver the Justice Department and win approval of their merger, despite antitrust objections.

“We have some of the best and most dedicated public servants who tried this case, but we don’t have the same resources available to us,” Makan Delrahim, assistant attorney general of the United States and chief of the Justice Department’s Antitrust Division told Marketplace Morning Report. “We don’t have a 24-hour dedicated news channel to go out and spin your case to the American public and judges and others as some merging parties might.”

CNN is owned by Turner Broadcasting System, Inc., a division of Time Warner, Inc.

Delrahim admitted the government “is often the underdog in a lot of these cases, and we’re still considering our next steps and whether or not the government will appeal.”

AT&T and Time Warner clearly do not believe the government will further pursue the case, treating the merger as a done deal as the two companies move forward on combining their assets.

Delrahim complained about the judge handling the case, whose ruling excoriated the government’s case and strongly urged the Justice Department to not contemplate an appeal. In Delrahim’s view, the judge gave favorable weight to evidence from the two companies and dismissed much of the evidence the government presented.

“I think eight out of 10 judges may have treated this case differently,” he concluded.

Delrahim expressed his general frustration with government antitrust regulators attempting to impose various deal conditions and limitations designed to mitigate a transaction’s anti-competitive harm in the marketplace.

“If there’s a substantial lessening of competition, that’s the legal test, then the transaction is illegal,” Delrahim said. Instead of that simple test, the antitrust division often tries to rescue troublesome transactions with deal conditions he calls “microengineering an industry which is dynamic,” and in his view, is contrary to the role Congress assigned to the Antitrust Division. “I think the role is you go in, if there’s problematic aspect of a transaction, you divest and you let the market decide what the prices are now.”

“So the idea is: the greater the competitive process, the better the price ultimately will be, or the better the products will be for the consumer. And that’s where you have fair competition in the marketplace,” he added. “Our job is to police that. It isn’t to keep companies from getting too big. If they’re better at what they do, if customers like what they do, more power to them. The free market system encourages that. And we shouldn’t punish them once they have reached a certain level of success. If they are too big though, they also got to be careful. They can’t take anti-competitive practices that harms competition, which ultimately harms consumers.”

Kansas House Bill 2563 would require content providers that sell products and services in Kansas to pay into the state’s rural broadband fund.

ISPs and any website that generates at least $500,000 in revenue from Kansas residents would be required to pay into a state fund to subsidize rural broadband, if a bill introduced by a Lawrence Republican becomes law.

Rep. Thomas Sloan’s House Bill 2563 — a bill requiring broadband and content providers to pay into the Kansas Universal Service Fund (KUSF), drew immediate fire from cable and telephone companies across the state, and Sprint Corp. told state officials the bill was illegal.

“Rural residents lack the same broadband opportunities as urban residents because of the high cost to serve low-population density areas,” Sloan said. “We have a classic case of rising customer expectations for capabilities delivered through a broadband communications system and a fiscally stressed telecommunications provider network’s ability to serve high-cost rural customers.”

As in many rural states, finding the funding to solve the rural broadband problem gets more difficult as those hardest to serve are also the most expensive to reach. Kansas currently spends about $40 million annually to reach homes and businesses that are still using dial-up or forced to invest in satellite internet service. Most KUSF money is given to incumbent rural telephone, wireless or cable providers to subsidize expansion, keeping costs in line with each company’s Return On Investment expectations.

But as demand for faster and more robust broadband accelerates, and as the definition of broadband itself has evolved, rural providers are increasingly challenged reaching both unserved customers and those now considered underserved because older technologies like DSL often do not meet the current FCC definition of broadband: 25/3 Mbps service.

Sloan said his bill is designed to address both problems by wiring unserved areas and improving access to reliable, high-speed internet service where only slower alternatives now exist. The bill would provide funding to more than 90 Kansas counties with a population density of less than 100 people per square mile (excepting the county seat). In an agricultural state like Kansas, that would directly inject cash for upgrades into large sections of the state. Sloan says his law would cover at least 40% of a provider’s wiring and upgrade costs.

Rep. Sloan

House Bill 2563 would fund a rural broadband project that:

• is capable of minimum download speeds of 25 Mbps and minimum upload speeds of three megabits per second;
• provides an average latency of less than 100 milliseconds to enable the use of real time communications; and
• provides subscribers with a minimum monthly data allowance of 150 gigabytes per month.

“Poor connectivity to the internet undermines operation of businesses, filing of government documents, school research projects, viewing of entertainment and other day-to-day activities,” Sloan said.

ISPs would likely pass along the costs of the new broadband universal service fund charge to subscribers, which means urban Kansans will be contributing a portion of their monthly internet bill to benefit their rural neighbors.

Sloan’s bill would also take the unprecedented step of taxing internet content companies and for-profit websites that generate at least $500,000 in revenue attributable to Kansas customers and use the money for rural broadband expansion as well. Websites like Amazon.com, Netflix, and Hulu would certainly be liable, but so would thousands of other smaller website ventures, including porn websites and online publishers like newspapers.

Telecom industry lobbyists quickly descended on state lawmakers in Topeka to encourage them to kill Sloan’s bill:

• Catherine Moyer, chief executive officer of Pioneer Communications in Ulysses, represents the interests of the State Independent Telephone Association for Kansas and the Kansas Rural Independent Telecommunications Coalition. She is strongly opposed to the bill because she claims it would weaken the current Kansas Universal Service Fund (KUSF) model that has given rural companies confidence and certainty their rural expansion investments will be backed with adequate state subsidies. Under Sloan’s bill, the disbursement formula and the areas entitled to receive state support would be expanded, potentially reducing funds that were payable to projects under the old KUSF subsidy system.
• Patrick Fucik, national director of legislative affairs for Sprint Corp. in Overland Park, is concerned about broadening the universal service fund to tax content providers and other websites, claiming the state lacks the legal authority under federal law to impose such taxes.
• John Idoux, a lobbyist with CenturyLink, which serves more than 100 Kansas communities with fewer than 1,000 residents, said the bill would likely make lawyers rich from the “prolonged” and inevitable legal challenges that will begin if the bill becomes law, “all while creating false hope of rural broadband availability.” Idoux also wants to make sure none of the KUSF money will be spent in areas already served by a fixed broadband provider (like CenturyLink). He does not want to see public money competing with private investment, even if it results in better service.

An audio-only hearing of the Committee on Energy, Utilities and Telecommunications of the Kansas State Legislature on HB2563, held Feb. 5, 2018. (35:53)

Johnson

Sen. Ron Johnson (R-Wis.) is in favor of banishing Net Neutrality and allowing service providers to sell paid broadband fast lanes, claiming some uses of the internet are more important than others.

Speaking alongside FCC Chairman Ajit Pai on a live interview with WTMJ Radio in Milwaukee with no guests in opposition, Johnson claimed unless cable and telephone companies are given additional economic incentives to risk capital, broadband service improvements will be slow in coming.

Johnson added ISPs should be allowed to adopt paid prioritization.

“You might need a fast lane within that pipeline so that [medical] diagnoses can be transmitted instantaneously [and] not [be] held up by maybe a movie streaming,” Johnson said.

“I want everyone to have what I call digital opportunity, and to do that you need to have a regulatory framework that gives all of these companies — satellite, wireless, fiber — a strong incentive to invest,” added Pai.

“As a businessperson, you need the economic incentive to risk your capital and the minute you have government regulation it reduces the certainty in terms of what you can get from return on investment, you are going to invest less,” argued Johnson. “We’re seeing that right now because of what [former FCC] Chairman Wheeler did.”

Pai

Pai argued that outdated FCC rules were also responsible for reducing broadband investment, particularly rules that require phone companies to continue maintaining their existing wireline network to provide universal access to telephone service.

Pai characterized Net Neutrality as government control of the internet.

“Do you want the government deciding how the internet is run?” Pai said, noting he favors “light touch” regulation where private companies manage their own businesses with targeted enforcement action by the FCC. “In 2015, on a party line vote, the FCC went the other way and put the government, rather than the private sector, at the center of how the internet operates.”

By getting rid of the Obama Administration’s Net Neutrality policies, Pai believes that will return the U.S. to an era of where cable and phone companies invest in their networks and expand rural broadband.

“As Chairman Pai said, Net Neutrality is a slogan,” added Johnson. “What you really want is an expansion of high-speed broadband. In order to do that, you have to create the incentives for those smaller ISPs to invest and if they don’t really control their own fiber — if the government tells them exactly how they are going to use their investment — there is less incentive for them to invest so we’ll have less high-speed broadband.”

“Consumers will be worse off because of this term Net Neutrality,” Johnson said.

“We at the FCC need to be focused on investment in infrastructure,” Pai said, not Net Neutrality.