A Rochester, N.Y.-based broadband company founded by an ex-president of Time Warner Cable and a former top executive at Rochester Telephone is bringing broadband competition to thousands of residents in Connecticut and Pennsylvania through its fiber-to-the-home network.

GoNetspeed has been aggressively expanding its service in Comcast, Verizon, and Frontier Communications service areas in suburban Pittsburgh and several cities in Connecticut. According to chief operating officer Tom Perrone, GoNetspeed has managed to buildout 100 network miles of fiber across 13 towns in two different states in just the first six months of 2018, providing a new choice for broadband service to over 30,000 homes and businesses.

Most recently, the company completed expansion in the New Haven, Conn. neighborhoods of Beaver Hills, Edgewood, and West River, adding an additional 3,000-5,000 homes to its network service area.

GoNetspeed prioritizes expansion in areas where there is little competition and where neighborhood density makes it financially feasible to bring fiber optic cables into an area. The company markets its service with simplified, lifetime pricing:

• $50 for 100/100 Mbps
• $70 for 500/500 Mbps
• $90 for 1,000/1,000 Mbps

In areas when service is first offered, the $100 installation fee is traditionally waived. There are no data caps. Static IPs and inside wiring are available at an additional cost.

GoNetspeed has received positive reviews from customers in parts of Bridgeport and West Hartford, where service is already available in Connecticut. In suburban Pittsburgh, GoNetspeed is available in parts of Ambridge, Beaver Falls, Baden, Conway, Beaver, Monaca, and Rochester. Over the summer, it announced it would soon also service New Brighton and Aliquippa. In general, the company wires neighborhoods where at least 10% of residents are committed to signing up for service. In Pennsylvania, it faces competition primarily from Comcast and Verizon. In Connecticut, competition will come from incumbents Comcast, Altice USA, and Frontier.

GoNetspeed’s headquarters are in suburban Rochester, N.Y. Ironically, it does not offer residential service in New York.

A GoNetspeed truck

The company originally behind GoNetspeed was Fibertech Networks (since sold to Crown Castle, a cell tower owner/operator). The founding partners were John K. Purcell, a former vice president at Rochester Telephone Corporation (now Frontier Communications) and Frank Chiano, the former head of Time Warner Cable in Rochester.

Fibertech was founded in 2000 as a fiber optic network operator. Purcell passed away in 2017, but Fibertech continued, eventually amassing a valuable 14,000 mile metro fiber network serving cities around the northeast. Fibertech served commercial customers like corporations, institutions, and wireless network operators seeking fiber connections to buildings or cell tower sites.

In the last several years, fiber network operators have started to enter the retail broadband marketplace as fiber overbuilders — providing fiber to the home service to areas where demand warrants investment. Most overbuilders target areas where no existing fiber competitor exists, which makes the northeast a viable target.

Verizon dropped its FiOS fiber to the home network expansion project eight years ago and incumbent telephone companies including Verizon, Frontier, Consolidated (formerly FairPoint), Windstream, and CenturyLink have shown little interest in investing in significant fiber upgrades in medium-sized cities in New England, the Northeast, and Mid-Atlantic region. That has given Comcast and Charter Communications — the two largest cable operators, a substantial and growing market share. But customers often loathe both cable operators, and there is built-in demand for new competition.

New Haven. Conn.

Local officials are also happy to see another competitive option. New Haven officials, like many others in Connecticut, have embarked on an effort during the last few years to attract new players to the state, especially after Frontier Communications acquired the assets of AT&T Connecticut. Many communities in Connecticut report a significant digital divide, particularly over the cost of internet access. New Haven, which has a significant low-income population, is happy to see GoNetspeed be part of the solution, but has wondered if GoNetspeed will expand service into lower-income areas of the city.

Connecticut Consumer Counsel Elin Swanson Katz, whose office manages broadband expansion in Connecticut, told the New Haven Register GoNetspeed’s expansion in New Haven “is just another strong indicator that Connecticut consumers are interested in having different options for broadband Internet service.”

“The more competition there is for consumers, for them to have choices, the better off we are,” Katz said. “It’s really important for our state to have ubiquitous access to affordable high-speed broadband that is reliable and that touches every corner of out state.”

Golisano

Rochester billionaire and philanthropist Thomas Golisano is seeking expedited regulatory approval from New York’s Public Service Commission to acquire Rochester-based Greenlight Networks, LLC, a fiber to the home network provider for an undisclosed sum.

Greenlight Networks has been slowly overbuilding Charter/Spectrum and Frontier Communications’ service areas in eastern Monroe County since 2012, offering subscribers gigabit internet access. But time may be running short for Greenlight’s competitive broadband speed advantage. Charter Communications is reportedly planning to introduce gigabit service as early as April 25th throughout upstate New York, except for Buffalo.

The urgency of the transaction’s approval is clear in the companies’ filing with state officials requesting an expedited review and approval of the transaction.

“Greenlight’s […] need for working capital and the optimization of capital structure required for long-term success in the competitive telecommunications industry are matters for urgent consideration,” the application states. “Greenlight seeks Commission approval in order to avoid unnecessary delays in the completion of its network expansion projects and in order to secure valuable, committed, outside investors who share Greenlight’s vision and believe in its ability to execute on its plan.”

Greenlight’s success is likely dependent on its ability to rapidly expand its fiber optic network before its biggest competitor, Charter’s Spectrum, capitalizes on its forthcoming ability to match Greenlight’s download speeds. Greenlight receives praise from subscribers lucky enough to live in a neighborhood reached by its network. But residents also report frustration over the slow pace of the company’s fiber network expansion, particularly in suburbs west of the Genesee River that bisects the city of Rochester.

Golisano’s Grand Oaks LLC of Pittsford, N.Y. promises customers the acquisition will not result in any changes in Greenlight’s rates or its terms and conditions.

The petition claims the acquisition is in the public interest because it will offer Greenlight much-needed additional capital to accelerate deployment of its fiber network inside Rochester and beyond. Greenlight’s website suggests the company is considering expansion into the New York State cities of Albany, Binghamton, Buffalo, Ithaca, Syracuse, and the Finger Lakes Region. In Connecticut, the company is considering serving Bridgeport, Danbury, Hartford, New Haven, and Stamford (the corporate home of Frontier Communications). Grand Oak also promises to grow jobs at Greenlight and increase operational efficiency at the company.

Golisano is well-known in Rochester as an entrepreneur, philanthropist, and civic leader. Golisano founded Paychex, a leading national payroll service provider in 1971. After his retirement in 2004, Golisano has been actively involved in local civic causes and advocates for policies promoting improvement in the economy of western New York State.

The application is likely to be approved, but not soon enough to combat Charter Communications’ accelerated broadband upgrades across New York State. By early summer, Spectrum customers across New York State will receive 200 Mbps Standard service, 400 Mbps Ultra service, or 940 Mbps (nearly gigabit) Gigabit service from the cable operator at prices ranging from $65-125 a month. In contrast, Greenlight currently offers customers 100 Mbps for $50, 500 Mbps for $75, or 1,000 Mbps for $100 a month.

The second half of 2016 shows losses in broadband and television customers.

Frontier Communications CEO is blaming employees for the company’s deteriorating financial condition and operating performance and has allegedly dropped bonuses and merit pay increases for lower-level employees.

Sources inside Frontier Communications tell Stop the Cap! Frontier CEO Dan McCarthy notified employees in email on March 2 — one week before employees were expecting to receive their annual bonus — the company would no longer be providing bonus compensation for “lower banded management employees.” They hired redundancy representation for employers for this case.

“He implied that he too was affected but I highly doubt that is the case,” one source tells us. “We weren’t notified via a ‘Town Hall’, no conference call, no face to face with our managers, only a cowardly e-mail sent from behind a desk thousands of miles away. Keep in mind that people use that to pay house taxes, medical bills, pay off other bills, pay college tuition, etc, and a week before we were slated to get it we’re told that it isn’t coming.”

McCarthy has been on the hot seat with Wall Street for weeks after reporting yet another quarter where many of Frontier’s most profitable customers are fleeing faster than the company can replace them with new ones. McCarthy also told investors that many of Frontier’s losses in the last quarter were due to the company finally disconnecting service and writing off customers who haven’t paid their Frontier phone bills for as long as a year in acquired former Verizon territories in Florida, Texas, and California.

McCarthy

“There was certainly no suggestion that the big acquisition would pay off in the company’s Q4 earning report when subscriber counts, average revenue per residential user, and quarter-over-quarter revenue all fell,” wrote Daniel B. Kline of TMFDankline. “That has been the pattern in all three quarters since the Verizon deal closed, and while McCarthy has done an excellent job controlling expenses, his excuses for the drop in subscribers have started to sound a bit hollow.”

That effort to “control expenses” may be coming at the expense of customers that Frontier is depending on to stay in business.

New York Attorney General Eric Schneiderman last month announced the state was reviewing Frontier’s performance in western New York. A Rochester television station has aired more than a half-dozen stories about deteriorating service quality at Frontier since last summer. After airing the first few stories, the station was inundated with hundreds of complaints about Frontier’s spotty broadband and phone service.

News10NBC (WHEC-TV) reported it can take weeks for a Frontier technician to show up on a service call. Customer service is no help and customers are not getting the services they paid to receive.

Frontier was also implicated last month in knocking a Rochester area radio station off the air. After the company first blamed the radio station’s equipment for the problem, Frontier eventually admitted its own “old infrastructure” was responsible for outages that interrupted broadcasts for hours at a time.

Frontier’s stock continues its descent.

Schneiderman has been focused on keeping New York’s ISPs honest about their speed claims and performance, but service reliability is also increasingly an issue, especially after high winds in a recent storm in western New York left nearly half of the Rochester metro area without essential utilities for several days. Infrastructure upkeep, particularly aging utility poles, is now under investigation by the state’s Public Service Commission. Early evidence revealed local utilities may have underinvested in pole maintenance for years due to cost cutting. Some utility poles in western New York are well over 50 years old, originally placed in the 1950s and 1960s. Hundreds failed in the high winds.

Frontier’s track record of blaming others for their own problems has not been well-received by employees.

“Maggie Wilderotter [former CEO of Frontier Communications] was bad but McCarthy’s leadership is erratic and catastrophic,” shares another Frontier middle management employee wishing to stay anonymous. “McCarthy was defending the regional management autonomy approach as a unique strength for Frontier last summer, now he’s declared that is inefficient and is centralizing management decisions at corporate headquarters. He was selling Wall Street on Frontier’s IPTV project in 2016 by promoting expanded service territories. Now that project is on hold and there are signs Frontier is pulling back on meaningful and long overdue broadband speed upgrades. He recently announced he was reorganizing residential and commercial sales units, something our competitors did long ago and will only disrupt things at Frontier even more. Poor customer service was the result of “on-shoring” our call centers? Not exactly. Poor training and inadequate support have left our call center employees unable to properly handle customer concerns. Employees can reach out to an employment law attorney when facing unjust treatment in the workplace. He also consistently downplayed how nightmarish the Verizon conversion was for our new customers in Florida, Texas, and California. It was bad planning, bad vision, and poor execution and the buck stops with our CEO.”

Another source tells us:

“We worked 60-80 weeks, late nights, weekends, countless hours away from our families to push forward with projects that were horrible for our customers and senior leadership was told to get the job done regardless any way they could. We worked through the AT&T and Verizon conversions. We performed as employees of Frontier. Who did not perform? Those making these horrible financial and planning decisions that caused major outages to former Verizon customers when they finally cut over. Some problems were so severe that many customers decided to leave.”

Frontier insiders tell us the company is on a mission to slash expenses across the board to turn in better financial results that can protect the company’s dividend payout to shareholders and, in turn, executive pay and bonuses. The company is reportedly considering allowing more employees to work from home to cut facilities costs, utilities, and maintenance expenses.

“There have been numerous resignations over this and morale is at an all-time low within the company,” a source tells us.

One of the employees sharing the latest developments reports he has turned in his resignation this month and hired an employment lawyer at HKM.com to get the compensation he deserves.

“I figure I should follow so many of our customers to a company that isn’t great, but at least makes an effort delivering what it promises.”

Frontier’s Problems Afflict Hundreds of Customers in Western N.Y.

WHEC-TV Rochester has been following problems with Frontier Communications since last summer. Until the acquisition of former Verizon customers in Texas, Florida, and California, the Rochester, N.Y. metropolitan area was considered Frontier’s largest legacy city service area. But just like in smaller rural communities, service problems have plagued Frontier, with complaints rolling in about slow or non-existent broadband, landline outages, poor billing and customer service practices, and service calls that take weeks before anyone shows up.

WHEC-TV Rochester began covering problems with Frontier on Aug. 22, 2016 with an investigation into internet woes at a Geneseo insurance agency. (2:21)

One day later (Aug. 23, 2016) complaints from other Frontier customers poured into WHEC-TV’s newsroom because of outages and bad service. (2:54)

In September, 2016 WHEC-TV was back with another story from frustrated and angry customers who can’t get suitable service from Frontier Communications, but found a $200 early termination fee on their bills when they tried to cancel. Now the Attorney General is getting involved. (3:18)

In late December, WHEC reported it had asked the N.Y. Public Service Commission to start an investigation into Frontier Communications over its broadband service. (2:20)

In February, when N.Y. Attorney General Eric Schneiderman came to town to discuss the honesty of ISP speed claims, WHEC reporter Jennifer Lewke instead questioned him about the hundreds of complaints the station had received about Frontier Communications. (3:03)

About one week after the Attorney General visited Rochester, WHEC reported Frontier Communications’ “old and outdated” equipment was directly responsible for taking a local radio station off the air for hours at a time. (1:10)

Several days after a windstorm in the Rochester area took away power to nearly half the metropolitan area, WHEC reports residents are frustrated waiting for cable and phone service to be restored. An investigation into utility infrastructure is now underway. (3:17)

Shhh… Don’t tell anyone except the newspapers, trade journals, everyone else….

Well-placed sources inside Verizon are leaking like a sieve to the media about the phone giant’s ambition to own and operate a large cable company.

In what may be a trial balloon to test the waters with the incoming Trump Administration, at least two “well-placed sources” have told the New York Post Verizon CEO Lowell McAdam is seriously contemplating countering AT&T’s buy of DirecTV and its attempted acquisition of content company Time Warner, Inc., with the buyout of a major national cable operator.

Verizon’s primary interest, according to multiple sources, is expanding available content to fill its current and future wireless platforms, especially 5G. Acquiring a cable operator would make content deals easier and more affordable because of volume discounting. It would also allow Verizon to directly sell cable products and services without investing in further FiOS expansion.

The CEO told friends at the Consumer Electronic Show in Las Vegas that he “wants to buy into cable.”

The most likely targets would have to be large cable operators with a national footprint, and a source told the tabloid two companies qualified: Charter or Comcast.

“Altice is too small,” the source speculated. That would also count out other medium-sized companies like Cox and Mediacom, because they have too limited a service area to be of much use to Verizon.

No final decision has been made, the newspaper notes, adding no talks are underway between Verizon and any cable company at present. Should Mr. Trump repeat the earlier objections to the AT&T-Time Warner, Inc., merger he made last October, any marriage of Verizon with a cable operator would be unlikely. Trump cited unchecked media consolidation as his primary reason for opposing AT&T’s latest acquisition deal, but he has not repeated those objections recently. Last week Trump met with AT&T CEO Randall Stephenson in New York.

McAdam originally planned to use Verizon’s acquisition of Yahoo! as a way to broaden the phone company’s content library, but that yet-to-be-finished deal has been in turbulence since media reports exposed major security breaches of Yahoo’s e-mail and portal sites.

A deal with Charter is more likely than a buyout of Comcast because Charter’s most significant shareholder – John Malone, has no allegiance to keeping Charter Communications independent. Charter also lacks the kind of complications that an acquisition of Comcast could bring – notably Comcast’s ownership of NBC and its dozen owned-and-operated TV stations.

Malone has a long history of dispassionately buying and selling large telecom assets, including the cable company Tele-Communications, Inc. (TCI) he helped build from a handful of cable systems into what used to be the nation’s largest cable operator. In 1999, TCI was sold and rebranded as AT&T Broadband and Internet Services. Three years later, most of those cable systems were again sold to their present owner Comcast.

Verizon may argue it has already divested significant amounts of its FiOS service to Frontier Communications in the Pacific Northwest, Indiana, Texas, California, and Florida, limiting antitrust concerns. But state regulators, particularly in New York, are likely to raise serious objections if Verizon, already the dominant telephone company in New York (except Rochester) attempts to acquire Charter, the only significant cable operator in upstate New York and Manhattan. That would leave the vast majority of New York with a classic telecom monopoly, with only one provider for landline and broadband service.

Artist rendition of Charter’s new regional headquarters in Rochester, N.Y.

The northeast region of Charter/Spectrum, encompassing six states, will soon be managed from a new regional headquarters office to be opened in Rochester, N.Y.

Elected officials across western New York joined Gov. Andrew Cuomo to congratulate Charter Communications for its decision to locate its new headquarters in suburban Rochester, where the cable company is expected to add 228 new full-time jobs.

Gov. Cuomo announced Charter will invest more than $2.9 million to renovate its existing offices on Mount Hope Avenue in downtown Rochester and its new 46,000 square-foot facility in Henrietta, which will house regional executives, call center workers, and technicians. New York taxpayers will cover $2.5 million of those costs through the Empire State Development Corporation, a public-benefit corporation that offers tax credits in return for job creation commitments.

“This expansion of one of the nation’s leading cable providers in the Finger Lakes is a clear signal that our economic strategy is driving innovation and transforming the local economy,” Gov. Cuomo said. “Cutting-edge companies are betting on this region like never before and are growing their businesses and creating-good paying jobs in the process. By incentivizing private sector growth, we are generating momentum and strengthening the economy in Monroe County and beyond.”

Cuomo

“By early next year, this beautifully restored facility will allow us to bring together our field operations leadership and vital support functions under one roof,” said Charter executive vice president of field operations Tom Adams. “Through our partnership with the New York State Economic Development Corporation, the Rochester area benefits from an influx of high-paying technical jobs, while our customers across Upstate New York and throughout New England benefit from improved communication, collaboration and efficiency in our operations.”

Time Warner Cable employed 460 workers at its existing office in downtown Rochester. Charter’s new regional headquarters will add 230 workers.

Gov. Cuomo has heavily promoted New York as a new corporate-friendly state to create jobs and grow businesses. The “Finger Lakes Forward” initiative has already spent $3.4 billion in the region since 2012 to invest in and attract key industries like photonics, agriculture/food production, and advanced manufacturing. The plan has seen some success for the key regions of Rochester (photonics), Batavia (milk/yogurt production), and Canandaigua (mixed manufacturing), but has not been as successful keeping jobs when businesses have downsizing on their mind.

For Rochester, Charter’s announcement will still result in a net job loss of more than 300 jobs in the telecommunications sector because of Verizon Wireless’ announced closure of its Rochester call center, which will eliminate 645 jobs in the area when the facility closes Jan. 27, 2017. The governor’s office called Verizon’s job cuts “an egregious example of corporate abuse.”