Two of Google Fiber’s newest fiber cities will only get the gigabit fiber-to-the-home service because someone else already laid the fiber.

In the last week, residents of San Francisco and Huntsville, Ala. were told they were next in line for Google Fiber service. But instead of proposing to build a citywide fiber network for all residents, Google will rely almost entirely on pre-existing fiber networks they will use to reach customers.

In San Francisco, only an unspecified portion of the metro area will qualify for Google Fiber, namely certain apartments, condos, and subsidized housing units already served by a fiber optic connection. Single family homes and apartments not currently connected to fiber may never qualify for Google’s service.

A Google Fiber executive seemed to signal Google may be taking a harder look at the cost of building fiber service, and future expansion may rely on renting space on someone else’s cable.

“To date, we’ve focused mostly on building fiber-optic networks from scratch,” said Michael Slinger, Google Fiber’s business operations director. “Now, as Google Fiber grows, we’re looking for more ways to serve cities of different shapes and sizes.”

That suddenly makes existing municipal and private dark fiber networks very attractive and in demand. Many municipalities have underused institutional fiber networks that serve anchor institutions, public safety, and government offices. Public access is often limited to non-existent. The prospect of Google paying to use those networks to reach more customers may prove attractive to cash-strapped cities. Private fiber overbuilders and those with excess capacity may also find a new revenue stream renting space to the search engine giant. In Huntsville, Google will have non-exclusive access to the city’s publicly owned fiber network. Any competitor could technically offer their services over the same network.

Competitors and analysts seemed ready to dismiss Google’s latest expansion announcements. Diffusion Group analyst Joel Espelien told the San Jose Mercury News Google Fiber’s plans to wire affordable housing in San Francisco was nothing more than “pure PR.” He’s unimpressed with Google Fiber generally, dismissing it as “Costco Internet,” delivering bulk sized connections at prices most consumers are unaccustomed to paying for Internet access.

“It’s both cheap and it isn’t cheap,” Espelien said. “It kind of depends on your point of view.”

Google’s reasons to offer service to only a few locations in San Francisco are clearly pegged to the costs of wiring the entire city.

“We considered a number of factors, including the city’s rolling hills, miles of coastline, and historic neighborhoods,” Google said in a blog post. All of those features that tourists love to see are also expensive because of costly engineering efforts to hide the cables from view to stay within zoning regulations.

Sens. Sanders and Warren

Democratic presidential hopeful Sen. Bernie Sanders (Ind.-Vt.) has expressed serious doubts about the claimed consumer benefits of a multi-billion dollar cable company merger between Charter Communications, Time Warner Cable, and Bright House Networks.

In a joint letter with Sens. Al Franken (D-Minn.), Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.), Sanders told FCC Chairman Tom Wheeler and Attorney General Loretta Lynch the deal would create a “nationwide broadband duopoly, with New Charter and Comcast largely in control of the essential wires that connect most Americans to how we commonly communicate and conduct commerce in the 21st century.”

The senators explained that “broadband service is not a luxury; it is an economic and social necessity for consumers and businesses.”

The five Democrats believe the merger could have negative effects on consumer choice, competition, and innovation in broadband and online video. With Comcast and New Charter controlling at least two-thirds of the high-speed broadband lines in the country, Sanders and his colleagues are concerned this will allow Comcast and New Charter to raise rates while reducing broadband innovation, allowing the United States to fall even further behind other industrialized nations with superior broadband.

The senators asked the Department of Justice and the FCC to carefully evaluate how the proposed deal could impact the marketplace.

“New Charter must not only prove that this deal would not harm consumers, but they must also demonstrate that it would actually benefit them and promote the public interest,” the senators argued.

This week, New Jersey regulators approved the merger transaction in that state, leaving California as the last major challenge for Charter executives. Federal regulators are not expected to rule on the deal until the spring or summer.

Frontier Communications plans to leverage their existing fiber-copper infrastructure to offer broadband-powered television service for up to half of their national customer base over the next four years.

Like many Frontier initiatives, the company’s IPTV effort relies on minimal spending, with just $150 million in capital budgeted for the project, spread out over several years.

“Our plans are to introduce video service to more than 40 markets representing approximately three million households over a three- to four-year period,” said Frontier CEO Daniel McCarthy. “Once complete, video service will be available to about 50% of the 8.5 million households in Frontier’s existing footprint, not counting the pending Verizon acquisition.”

Frontier intends to sell the service to the 57% of customers it claims can receive at least 20Mbps broadband speed. The video streams will co-exist with customers’ data service.

“Our IPTV applications employ the latest very advanced compression technology,” said McCarthy. “[Each] HD television channel will require approximately 2.5Mbps of capacity, meaning a household with four HDTVs active at once will require 10Mbps of capacity into the home, leaving the remainder available for data usage.”

Frontier’s IPTV approach is similar to AT&T U-verse. The company will depend on fiber to the neighborhood service already in place in certain markets, coupled with existing copper wiring already on telephone poles or buried underground in each neighborhood. To further minimize expenses (and customer inconvenience), Frontier will rely on customer-installable wireless set-top boxes that can be relocated to any television in the home.

McCarthy

Frontier has experimented with its video service since last fall in its test market of Durham, N.C. That city also benefits from an extensive fiber upgrade undertaken by Frontier. Frontier’s website sells the service as Frontier FiOS TV, even though Durham’s fiber network was built by Frontier, not Verizon.

For customers, it will likely be a welcome change from Frontier’s ongoing dependence on its partnership with satellite provider Dish Networks to offer video service. One clue Frontier has not well withstood heavy competition from competing cable operators comes from the company’s latest quarterly earnings report. Frontier executives admitted voice service disconnects are accelerating beyond expectation and average revenue per customer dropped 1.1% to $63.14 for the fourth quarter of 2015.

Frontier also continues to feel the wrath of former AT&T customers in Connecticut that withstood a messy “flash cut” from AT&T to Frontier that left some customers without service for days. Despite the expiration of special pricing promotions for Connecticut customers resulting in the prospect of higher revenue, Frontier still recorded a $7 million decline from Connecticut alone, which it mostly blamed on customers ditching landlines. In the rest of the country, Frontier’s “legacy service areas” (those still dependent on aging copper infrastructure) delivered another $4 million decline in revenue for the quarter.

Where are those customers going? Cable operators continue to grab Frontier’s unhappy DSL customers and wireless companies continue to benefit from landline disconnects.

To prevent a repeat of Connecticut in the Frontier-acquired Verizon territories in Florida, California, and Texas, Frontier will keep Verizon’s service plans and only gradually shift services away from Verizon, with the ability to back out of the transition immediately if something goes wrong.

Frontier’s IPTV service will depend on the classic cable television model — 100+ local, network, and cable channels delivered in a bundle with broadband and voice service. At the outset, Frontier won’t be emphasizing skinny bundles of TV channels, but will allow existing Verizon FiOS customers to keep the slimmed down packages they already have.

You’ve been flee¢ed

It’s time for some more Big Cable Fairy Tales, brought to you by the well-paid lawyers, lobbyists, and lackey sock puppets paid to tell regulators life is only worth living when you approve a colossal merger.

Kids, gather round for tonight’s prescient story of vague promises and non-committal commitments.

Once upon a time in the forest there was a big, bad old Mr. Wolf (better known to his friends as TWC) that had a nasty habit occupying a nearby bridge to grandmother’s house and charged humongous fees to cross it. One of his best customers was Little Red Riding Hood, who depended on the no longer state of the art bridge to cut her travel time to grandmother’s house by 75%. Every trip proved an aggravation for our Red. It was costly, closed to traffic far more often than it should, and was policed by that pesky wolf and his “take it or leave it” attitude.

One Sunday in January, an angry crowd had gathered, reading a notice tacked to a nearby tree. In small print, it was titled, “Toll Reconsideration Notification.”

The notice explained increased bridge beautification and maintenance expenses necessitated an annual toll adjustment. But no worries, it would amount to about the cost of one jar of jam in Red’s basket.

“If you bought it at Whole Foods,” muttered Hood to your eminent narrator.

(Last year’s toll hike was “less than a box of cookies,” the year before that was “a tin of tea.” Three years ago it was the cost of Red’s basket. Next year, we think she would do better just handing over her purse.)

This year one trip across the bridge would cost $7.50. If you bought a wolf-approved, bundled picnic basket at the gift store while on your journey, it would drop that toll to $6. The wolf told complainers that was evidence most would never have to pay that new price, so the toll hike was minimal. But the people remained suspicious. (There were stories this wolf also had a tendency to occasionally feast on customers when nobody was looking, but his lawyers denied it.)

Despite the bridge toll inflation and John Walsh looking for missing travelers, our Red knew if she wanted to get to grandmother’s house this week, she had to use the bridge, nefarious wolf or not. The only other bridge – run by old man Frank Bison, fell into the river last winter and he doesn’t think it is worth spending a lot of money to build a new one. Despite offers to take customers across in his leaky canoe, most decide to pass.

Mr. Bison

Mr. Wolf made a handsome profit every quarter charging tolls to travelers. This fact did not escape the attention of the head of the Sheep Consortium in the next valley over. For years, the Consortium felt under-appreciated. Their adventures were rarely told, because few people cared. The wolf had a better story, and anyway it was hard to respect the sheep after they overspent on their watchdog operation and bankrupted themselves for a time.

“That was so yesterday,” defended Dr. Flee¢e, the head of the Consortium. “This is a new sunny day.”

Or so he claimed. Out of view, Flee¢e paced a nearby paddock night after night, unable to sleep knowing that damn wolf got all the attention and a heckuva lot more toll revenue than he was getting.

So one night, Dr. Flee¢e and his friends paid $10 million dollars to the Magic Sparkle Pony grazing down by the investment bank to find a win-win solution for both the sheep and the wolf (but mostly the sheep, shhh.) The pony looked up, tilted his head briefly, and said just one word: SYNERGY. A cacophony of gratitude rose from the valley and gosh darn it, exclaimed Dr. Flee¢e, wouldn’t you know the silly pony had the answer? A merger! The wolf’s costs would drop, the sheep would finally be able to tap into a big piece of that toll operation, and only by working together would Little Red Riding Hood get the benefits of their new relationship:

1. The ratty old bridge would be fully painted.
2. The wolf promised to go vegetarian for up to three years.
3. Little Red Riding Hood would be given a new basket (imported from Laos).

“Hey, wait a minute,” asked one of the sheep. “Didn’t the Three Little Pigs try this last year? They had more money than we do and some of them were turned into bacon after that surprising storm blew their house down.”

“But don’t you see the Magic Sparkle Pony solved that for us too?” responded another. “All we have to say is we’re not pigs and that counts for something. Besides, who doesn’t love sheep? This is going to work out fine.”

But there were still problems, especially with Ms. Hood and her fellow travelers.

It seems the Consortium didn’t promise Ms. Hood or anyone else would pay less on those trips to see grandma. They only promised the journey would be prettier and less confusing. Gone was the $7.50 toll, replaced with the all-new Flee¢ePa$$™ offering trips across the bridge bundled with: a 24/7 travel hotline, travel advice, books on travel, songs about travel, a coffee mug with a picture of Dr. Flee¢e traveling to his castle in Scotland, and the aforementioned Laotian wicker basket to cram it all into, for just $50 a month.

“Is this one of those Dr. Seuss tales that you have to be on something to appreciate?” asked Red. “I don’t drink coffee, nobody reads books anymore, and if I need travel advice I’ll ask someone I know. I don’t need all those things so why do I have to pay $50 instead of $5? Wait, who is paying for that castle?”

“Because it’s simpler, don’t you see,” said Dr. Flee¢e, eavesdropping in the corner. “We are going to be a different kind of bridge operator committed to creating jobs, offering the most innovative products and preserving this bridge.”

“For $50 a month,” coolly replied an exasperated Ms. Hood. “Stephen King wrote this, didn’t he? I have a better idea. We’re moving grandma to Chattanooga. They have high-speed rail.”

CenturyLink is planning to trial usage caps on its broadband service later this year, not to reduce congestion or to bank the extra money for service upgrades, but to boost revenue and profits.

Stewart Ewing, chief financial officer at CenturyLink, told Wall Street analysts the company was on board with usage caps and usage billing primarily because its biggest competitor (Comcast) is already implementing a similar program in many of its markets. It’s that kind of “competition” many customers say they could do without.

“Regarding the metered data plans; we are considering that for second half of the year,” Ewing told investors on a morning conference call. “We think it is important and our competition is using the metered plans today and we think that exploring those starts and trials later this year is our expectation.”

No details about the test markets or range of usage allowances were made available by Ewing, but CenturyLink is under pressure by Wall Street to improve its revenue after raising prices and tightening credit standards on its customers. The combined impact of rate hikes and a tighter credit qualification policy led CenturyLink to lose 22,000 broadband customers during the last quarter, many who simply stopped paying the bill.

CenturyLink has been under pressure by Wall Street to put usage caps and usage pricing on its broadband service for over a year.

David Barden from Bank of America called data caps “an opportunity” for CenturyLink to rake in more dollars from customers by using misleading pricing to trick customers.

Post

“We have been seeing a lot of the cable companies experimenting with data caps and metering higher-end usage,” Barden told CenturyLink executives on the conference call. “It seems like the FCC is not pushing back on this and it feels like it could be a big opportunity for telcos to, if nothing else, price underneath the cable umbrella and start to raise rates from high-end users.”

In plain English, Barden wants companies like CenturyLink to make customers believe they are getting a better deal from a lower price, at least until customers actually use the service. Then, the rate increases from usage caps and overlimit fees begin.

Glen Post, CEO of CenturyLink, is still committed to believing CenturyLink is in a good position to add broadband customers, despite the forthcoming trials of usage caps and overlimit fees. He defines 40Mbps broadband from CenturyLink as the speed that will “address most of our customers’ actual needs.”

CenturyLink now has 940,000 households connected to its Gigabit Passive Optical Network (GPON), many for its Prism TV service. Another 490,000 businesses also have access to CenturyLink’s GPON network, primarily for broadband. Post claims more than 30% of the company’s service area is now served with broadband speeds of 40Mbps or greater.

In 2016, CenturyLink expects to spend $1.2 billion on upgrades for its broadband network and capacity. In comparison, in 2015 CenturyLink spent $1 billion repurchasing shares of its own stock and another $1 billion on dividend payouts – both to benefit shareholders.

At present, CenturyLink has around a 15% market share in its GPON-enabled markets (the company didn’t say what its market share was where legacy copper wire infrastructure still dominates). Post believes that gives the phone company enormous room to grow, assuming its customers can pass credit checks and do not mind their broadband service data-capped. Like many phone companies looking for the biggest return on investment, Post noted CenturyLink will pay extra attention to wiring Multiple Dwelling Units (MDUs) — apartment buildings, condos, etc. — where the company can bring fiber service at a lower cost than wiring each home and business.