Verizon Wireless, ignoring its agreement with the Federal Communications Commission not to lock handsets, will soon stop selling unlocked phones, at least temporarily preventing customers from taking their phones to another carrier or overseas without Verizon’s consent.

Verizon’s ‘SIM Lockdown’ is expected to begin later this year in a move Verizon is calling a “theft control measure.”

Verizon Wireless is the only major carrier that does not lock its smartphones, but that policy was agreed to as a condition of its acquisition of 700 MHz spectrum licenses in 2008, which included a prohibition on phone locking. But Verizon seems to think its new locking policy doesn’t break any rules or that nobody will care.

“We’re taking steps to combat this theft and reduce fraud. These steps will make our phones exponentially less desirable to criminals,” Tami Erwin, executive vice president of wireless operations for Verizon, said in a statement to CNET.

After the change takes effect, Verizon Wireless customers will find their new handsets locked and unable to be used with other carriers until activated on a new or existing Verizon Wireless account. After that, Verizon says it will still keep the phone locked for an unspecified waiting period to prevent cell phone thieves from stealing a phone, activating it with a stolen identity, and then selling it for profit. Verizon won’t say exactly when customers will be able to get their devices unlocked.

With an industry friendly Republican majority on the Federal Communications Commission, Verizon may be attempting to test the waters to see if it can successfully walk away from its agreement with the FCC without penalty or even win itself a waiver. But FCC rules don’t appear to give Verizon the leeway it needs to unilaterally act:

§ 27.16 Network access requirements for Block C in the 746-757 and 776-787 MHz bands.

(a)Applicability. This section shall apply only to the authorizations for Block C in the 746-757 and 776-787 MHz bands assigned and only if the results of the first auction in which licenses for such authorizations are offered satisfied the applicable reserve price.

(b)Use of devices and applications. Licensees offering service on spectrum subject to this section shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice on the licensee’s C Block network, except:

(1) Insofar as such use would not be compliant with published technical standards reasonably necessary for the management or protection of the licensee’s network, or

(2) As required to comply with statute or applicable government regulation.

(c)Technical standards. For purposes of paragraph (b)(1) of this section:

(1) Standards shall include technical requirements reasonably necessary for third parties to access a licensee’s network via devices or applications without causing objectionable interference to other spectrum users or jeopardizing network security. The potential for excessive bandwidth demand alone shall not constitute grounds for denying, limiting or restricting access to the network.

(2) To the extent a licensee relies on standards established by an independent standards-setting body which is open to participation by representatives of service providers, equipment manufacturers, application developers, consumer organizations, and other interested parties, the standards will carry a presumption of reasonableness.

(3) A licensee shall publish its technical standards, which shall be non-proprietary, no later than the time at which it makes such standards available to any preferred vendors, so that the standards are readily available to customers, equipment manufacturers, application developers, and other parties interested in using or developing products for use on a licensee’s networks.

(d)Access requests.

(1) Licensees shall establish and publish clear and reasonable procedures for parties to seek approval to use devices or applications on the licensees’ networks. A licensee must also provide to potential customers notice of the customers’ rights to request the attachment of a device or application to the licensee’s network, and notice of the licensee’s process for customers to make such requests, including the relevant network criteria.

(2) If a licensee determines that a request for access would violate its technical standards or regulatory requirements, the licensee shall expeditiously provide a written response to the requester specifying the basis for denying access and providing an opportunity for the requester to modify its request to satisfy the licensee’s concerns.

(e)Handset locking prohibited. No licensee may disable features on handsets it provides to customers, to the extent such features are compliant with the licensee’s standards pursuant to paragraph (b)of this section, nor configure handsets it provides to prohibit use of such handsets on other providers’ networks.

(f)Burden of proof. Once a complainant sets forth a prima facie case that the C Block licensee has refused to attach a device or application in violation of the requirements adopted in this section, the licensee shall have the burden of proof to demonstrate that it has adopted reasonable network standards and reasonably applied those standards in the complainant’s case. Where the licensee bases its network restrictions on industry-wide consensus standards, such restrictions would be presumed reasonable.

Verizon’s old unlocking policy.

Verizon does not need to lock phones to control stolen device trafficking. An earlier initiative by the wireless industry tracks stolen phone IMEI and other identification numbers that are needed to activate service. If a carrier gets a request to activate service on a phone or device with a suspect IMEI number, the carrier can refuse service, rendering the phone useless on the stolen goods market. But Verizon may have other motives in mind.

“This is going to make it harder for rivals to poach subscribers from Verizon,” Avi Greengart, an analyst at Global Data, told CNET, because customers bringing their Verizon smartphones to other carriers may find they cannot use them on the competitor’s network. The phones also won’t work if a customer travels abroad and uses a SIM card purchased in the destination country, which could offer substantially lower rates than Verizon’s international calling and data plans or roaming.

Few consumers would be willing to buy new phones for $600+ just to switch carriers, a fact Verizon is likely well aware will keep customers loyal to them.

New York’s Broadband for All Program yesterday announced the third and final round of grant winners to expand rural internet access across the state.

Verizon Communications was the top grant recipient, winning a total of $106,642,787 in combined state, federal, and private dollars to expand internet access to 15,515 residential homes, businesses, and institutions primarily in the Capital Region, Central New York, and the North Country.

Stop the Cap! has learned these funds will be spent on fiber internet expansion, which could mean direct fiber to the home (FTTH) connections or a combination of fiber and existing copper telephone wiring (FTTN). To meet the state’s requirements, Verizon will likely have to use optical fiber as much as possible, although some advanced forms of DSL are capable of meeting minimum speed requirements.

But where exactly will Verizon start building out its network? The state’s grant program includes census block data on the exact areas where Verizon will commence upgrades or bring internet service for the first time.

By far the biggest winner of Verizon upgrades is New York’s North Country where over 1,000 Census Blocks will be wired for service.

Here is a general breakdown on where Verizon will begin working on rural broadband expansion:

Capital Region

• 78 Census Blocks in Rensselaer County
• 59 Census Blocks in Schenectady County
• 132 Census Blocks in Washington County

Central New York Region

• 196 Census Blocks in Cayuga County
• 47 Census Blocks in Cortland County
• 5 Census Blocks in Onondaga County

Mohawk Valley Region

• 1 Census Block in Montgomery County

North Country Region

• 686 Census Blocks in Clinton County
• 203 Census Blocks in Jefferson County
• 279 Census Blocks in St. Lawrence County

Southern Tier Region

• 5 Census Blocks in Tompkins County

We are not well-schooled on mapping applications or integrating the data into a searchable tool or larger map (if you can, we’d love to hear from you). So for now, readers will have to search the database manually. Here are two ways to search:

Identify your Census Block ID and see if broadband improvements are coming to your area

1. Visit this website and enter your street address.
2. From the resulting list, click the  icon adjacent to the “Block” Geography Type, which will bring up a pop-up table containing additional information.
3. Find the “Code” line which will show a long number like this: 1000000US300500197056002. If you Copy everything to the right of “US”, in this example 300500197056002, that represents your Census Block ID. Omit everything else (including the ‘US’).
4. You can compare your Census Block ID number with the master list (click to download – .xlsx spreadsheet format) of New York’s third round census block winners. Just use the Search function and enter your Census Block ID number. If it matches with anything in that spreadsheet, your address is almost certainly to be serviced by Verizon (or another telecom company, as specified in the spreadsheet.)

To view coverage maps of winning Census Block IDs

1. Download the master list (click to download – .xlsx spreadsheet format) of New York’s third round census block winners.
2. Copy any Census Block ID listed, visit Melissa Data and paste the ID into the search box.
3. A map of the Census Block will appear. Not all Census Blocks have homes or businesses within them and will appear undeveloped. In many cases, this means a grant winner is being given funds to develop their network to pass through one Census Block to reach other areas nearby where customers live and work.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

It was called “Broadband for All” — New York Governor Andrew Cuomo’s commitment to bring high-speed internet service to every New York State resident. But it now appears the governor will break that promise and leave more than 72,000 rural New York residents with satellite-delivered internet that does not come close to meeting the broadband speed standard and is infamous for customer frustration, slow speeds, and low data caps.

Ensuring High-Speed Internet Access for Every New Yorker

In today’s world, internet connectivity is no longer a luxury—it is a necessity. Broadband is as vital a resource as running water and electricity to New York’s communities and is absolutely critical to the future of our economy, education, and safety.

In 2015, Governor Cuomo made the largest and most ambitious state broadband investment in the nation, $500 million, to achieve statewide broadband access by 2018. 

The New NY Broadband Program sets as its goal access to speeds of 100 Mbps for all New Yorkers, with 25 Mbps acceptable in the most remote and rural areas. The cost must not exceed $60 and there is a general prohibition of data caps. This goal exceeds requirements of the FCC’s Connect America Fund program and requires that projects be completed on a more accelerated timeline.

Today, the governor announced the state grant winners to split $209.7 million in the third and final round of awards to offer 122,285 additional homes, businesses, and institutions broadband internet service.

“These latest awards through Round III of the New NY Broadband Program will close the final gap and bring high-speed broadband to all New Yorkers in every corner of the state,” the governor’s office claimed.

Except it won’t.

Tucked in among the grant award winners is a $14,889,249 grant to Hughes Network Systems, LLC, targeting 72,163 rural New Yorkers, more than half of the total number of customers to be reached in the third round. Hughes operates the HughesNet satellite internet service, a technology derisively known as “satellite fraudband” for routinely failing to meet its advertised speed claims. It’s also known as “last resort internet” because it is slow, expensive, and heavily data capped.

Complaints about HughesNet are common on websites like Consumer Affairs:

“Extreme false advertising. Over the first 30 days with HughesNet Gen5, I averaged 3 Mbps download when advertised 25 Mbps. I canceled when they couldn’t answer why I used 20 GB of data in less than 24 hours. I am a 55 year old average internet user. No streaming. No music. No videos (YouTube). DO NOT GET THIS SERVICE EVEN IF NO OTHERS ARE AVAILABLE.” — Dennis, Tazewell, Tenn. (1/25/2018)

“HughesNet claims high speed internet in our region. Clearly not available here, 3 service calls, with exchange of equipment, 50 calls – recorded leaves us no choice, we demand that this contract be null/void without stealing $399 cancellation. A despicable Company, uninformed customer service, average speeds with a video; upload speed 0.62 Mbps, the download speed is 1.28 Mbps. Help!!!” — Jeffrey, Kerhonkson, NY (1/21/2018)

“Promised speeds of no less than 25 Mbps. Actual speed received was 5-9 Mbps. Unable to stream anything. Computer programs did not operate and did not update as required. We have cancelled HughesNet at great cost to us. Worst internet service ever.” — Jennifer, Hartsville, SC (1/12/2018)

Pat (last name withheld) lives 1.3 miles from the nearest Charter Communications customer in Niagara County, near Niagara Falls and is very disappointed with recent developments. Charter has quoted an installation fee of $50,000 to extend their cable service and Verizon has refused to provide DSL service, leaving Pat resorting to using an AT&T mobile data plan, which is expensive and gets throttled after using more than ~22 GB a month.

“This was a scam from Jump Street,” Pat said. “Phase 3 has 70,000 out of 120,000 homes getting satellite internet, a technology that was already available. It also gives $70 million to Verizon who declined funds in first place. Five years and $675 million later and still no internet for my kids.”

“This is a huge disappointment for us,” Pat added. “We were counting on this happening. Told numerous times it would. Now we have to debate moving, we can’t continue not having internet. My oldest son just graduated high school never having internet at home.”

“I have written and spoke with New York Broadband Program Office and it was clear to me from the beginning they didn’t understand the problems they faced, namely infrastructure costs,” said Pat. “They didn’t want to hear it. They wrongly assumed that telecoms would bid and everyone would have internet. I knew when announcements were delayed that the bids for last mile didn’t come in. Tragic really. I think they made a mistake accepting that money from the FCC. Satellite was never on the table until that happened.”

Stop the Cap! readers have told us satellite internet is the worst possible option for internet access, and many have reported better results relying on their mobile phone’s data plan. But New York’s solution for more than 70,000 of its rural citizens — many that believed the governor’s commitment of 100% coverage — is to saddle them with satellite internet access starting at $49.99 a month for a paltry 10 GB of usage per month. The top plan on offer costs $99.99 a month and is capped at 50 GB a month before a speed throttle kicks in and reduces speeds to dial-up levels. A 24-month contract is required with a very steep early cancellation penalty.

Another surprising winner is Verizon Communications, a company that originally refused to participate in rural broadband expansion efforts. Verizon will accept more than $70 million to expand its broadband service to 15,515 homes, businesses, and institutions in the Capital Region, central New York, the North Country, and Southern Tier. At press time, it is not known if Verizon will bring FiOS or DSL to these customers.

Because New York State relied on private companies to bid to cover unserved residents, it seems clear HughesNet is the default choice for those New Yorkers stranded without a telecom company bidder. Although that will allow Gov. Cuomo to claim his program reaches 99.99% of New Yorkers, the rural broadband problem remains unresolved for those who were depending the most on New York to help bring broadband to rural farms, homes in the smallest communities, and those simply unlucky enough to live in small neighborhoods deemed unprofitable to serve.

Verizon will spend most of the benefits gained from the Trump Administration’s tax cuts on writing off investments that will reduce the company’s tax exposure and boosting its dividend to shareholders.

Verizon’s chief technology officer Hans Vestberg told shareholders at an investment conference the company had no plans to spend the $3.5-$4 billion more in operating cash flow that will result from tax cuts on network upgrades, while it will continue to cut as much as $10 billion in costs out of its business over the next four years.

Verizon has attempted to converge its traditional wireline business with its wireless unit since buying out its partner Vodafone. As the two networks gradually merge, Verizon is continuing job cuts and expense reductions, even as the company will enjoy a $16.8 billion reduction in its deferred tax liabilities because of the new permanently lowered 21% corporate tax rate.

Vestberg argued Verizon was likely to waste money if it spent its anticipated windfall on accelerated network upgrades.

“You probably don’t want to have big spikes in the capital allocation because then in the end it drives inefficiencies. We want to be consistent,” Vestberg said. “From an execution point of view you want to be consistent. It’s not helpful to go up and down in capital allocation because it ramps up and down resources—money wasted … But we are always debating. And we should debate in a leadership team the size of Verizon.”

Verizon currently pays out more than three-quarters of its annual income to shareholders in the form of quarterly dividend payments. This morning, Verizon announced it would award 50 shares of restricted Verizon stock to virtually every employee except those in top management. On Tuesday, Verizon stock traded at around $53 a share, making the stock bonus potentially worth around $2,650 for each worker. But employees may not be permitted to sell their shares immediately. In earlier compensation packages that included restricted shares, the stock could not be sold for at least two years, and was subject to forfeit if an employee left the company during that window.

Verizon’s operating plan for 2018 includes a spending budget of $17 billion, an amount that has not changed as a result of the new tax law. Verizon is expected to allocate a significant amount of its budget towards its wireless services, particularly 5G development.

Western New York

In a recent survey of 2,000 residents living in Erie County (Buffalo), N.Y., it was clear almost nobody trusts their internet service provider, and 71% were dissatisfied with their internet service.

Seventeen years after many western New York residents heard the word “broadband” for the first time at a 2000 CNN town hall at the University of Buffalo, where then U.S. Senate candidate Hillary Rodham Clinton called for increased federal funding for high-speed internet, many upstate residents are still waiting for faster access.

The Buffalo News featured two stories about the current state of the internet in western New York and found it lacking.

Erie County Executive Mark C. Poloncarz blames internet service providers for serving up mediocre broadband, and no service at all in some parts of the county he represents.

“It’s been put in the hands of the private sector, and the private sector has, for whatever reason, elected to not expand into particular areas or not increase speeds in particular areas, putting those areas behind the eight ball,” he said.

Poloncarz effectively fingers the three dominant internet providers serving upstate New York – phone companies Verizon and Frontier and cable company Charter/Spectrum. He argues that companies will not even consider locating operations in areas lacking the most modern high-speed broadband. The digital economy is essential to help the recovery of western New York cities affected by the loss of manufacturing jobs and the ongoing departure of residents to other states.

Poloncarz

An important part of Gov. Andrew Cuomo’s statewide broadband improvement initiative is prodding Charter Communications and its predecessor Time Warner Cable to do a better job offering faster internet speeds and more rural broadband expansion. The New York Public Service Commission, as part of its approval of Charter’s acquisition of Time Warner Cable, extracted more concessions from the cable giant than any other state. Among them is a commitment to expand the cable company’s footprint into adjacent unserved areas by 2020 to reach at least 145,000 homes and businesses now outside of Charter’s service area.

Last week, the cable company told the PSC it was ahead of schedule on its expansion commitment, now reaching 42,889 additional households and businesses, which is above its goal of 36,771. It has two years left to add at least another 102,111 buildings.

Charter also recently increased broadband speeds to 100 Mbps for 99% of its customers in New York and has committed to boosting those speeds to 300 Mbps by the end of next year.

But where Charter does not provide service, broadband problems come courtesy of western New York’s biggest phone companies – Verizon and Frontier. In Erie County, a broadband census found a lack of service in parts of South Buffalo, the far West Side and East Side of Buffalo, as well as in parts of every town in the county except in the prosperous communities of West Seneca and Orchard Park. Verizon FiOS can be found in a handful of well-to-do Buffalo suburban towns, but not in the city itself or in rural parts of the region.

Verizon spokesman Chris McCann said the company had no further plans to expand FiOS service in upstate New York, and stopped announcing additional expansions in 2010. In the rest of its service area, Verizon supplies DSL service as an afterthought, and has made no significant investments to improve or expand service. Frontier Communications, which is the dominant phone company in the greater Rochester region, also provides service in some other rural western New York communities, but its DSL service rarely meets the FCC’s minimum speed definition to qualify as  broadband.

Rep. Collins

Both phone companies have no plans for significant fiber optic upgrades that would boost internet speeds. There is little pressure on either company to begin costly upgrades. In rural communities, both companies lack cable competition and in more urban areas, both have written off their ongoing customer losses to their cable competitor. That leaves towns like North Collins in a real dilemma. Poloncarz told the newspaper residents frequently park in the town library parking lot at night to connect to the library’s Wi-Fi service, because they lack internet service at home.

A political divide has opened up between area Democrats and Republican officials on how to solve the rural broadband problem. Democrats like Poloncarz are exploring solving the rural internet problem with a county-owned fiber network that would be open to all private ISPs to assist them in expanding service. He is joined by Erie County legislator Patrick Burke, who thinks it is time to spend the estimated $16.3 million it will take to build an “open access network” across Erie County.

“There are literally geographic dead zones, and it’s unnecessary,” said Burke, a Buffalo Democrat. “There’s no excuse.”

Poloncarz is more cautious and told the newspaper he will only propose the idea if he is convinced it will solve the problem, but is willing to continue studying it.

Republicans from the western New York congressional delegation believe deregulation and other incentives may give private companies enough reasons to begin upgrades and expansion.

Rep. Chris Collins, a Clarence-area congressman with close ties to the Trump White House, defended FCC Chairman Ajit Pai’s recent decision to eliminate net neutrality. Pai was born in Buffalo.

Collins argues net neutrality only raised the cost of business for ISPs, and being rid of it would inspire cable and phone companies to boost investment in 105 exurban and rural towns in his district, which covers eight counties and extends from the Buffalo suburbs east to Canandaigua, 80 miles away. More than 65% of those areas are under-served because DSL is often the only choice, and at least 3.3% had no internet options at all.

Rep. Tom Reed (R-Corning) has just as many internet dead zones in his district, if not more. Reed represents the Southern Tier region of western New York in a district that runs along the Pennsylvania border from the westernmost part of New York east nearly to Binghamton. Much of recent broadband development in this part of New York comes as a result of Gov. Cuomo’s state-funded broadband expansion initiative, not private investment.

Reed has a record in Congress that is better at explaining the rural broadband dilemma than solving it.

“In a rural district, there are areas that are just physically difficult to serve,” Reed shrugged.

Collins’ hope that the banishment of net neutrality will inspire Frontier, Verizon, and Charter to use their own money to expand into the frontiers of western New York seems unlikely. Gov. Cuomo’s plan, which uses public funds to help subsidize mostly private companies to expand into areas where Return On Investment fails to meet their metrics has had more success.

But the rural broadband debate has been accompanied by a fierce pushback among upstate New Yorkers against the Republican-controlled FCC and elected officials like Collins who support the recent gutting of net neutrality. A backlash has developed in his district, and some have accused Collins of aiding and abetting a corporate takeover of the internet.

“The hysteria and narrative that this will kill the internet is blatantly false,” responded Collins. “Internet service providers have said they do not increase speeds for certain websites over others, and I have signed onto legislation that would make such a practice illegal.”