No service.

Despite New York Gov. Andrew Cuomo’s $500 million, 2015 Broadband for All initiative which guaranteed broadband service for anyone  that wanted home internet access, five years later rural broadband gaps continue to plague the state.

A bill that would set aside funds to complete a feasibility study to launch a state owned broadband provider of last resort was quietly vetoed by Cuomo at the end of 2019. Assembly member Aileen Gunther (D-Monticello) sponsored the bill after hearing scores of complaints about terrible or non-existent internet access from constituents in her district, which covers the parts of the rural Catskills region north of the Pennsylvania border.

Gunther complained that despite the governor’s broadband initiative, private phone and cable companies were still ignoring rural customers, leaving them with slow DSL service or no internet access at all. Gunther’s bill was a first step in potentially allowing the state to step in and provide service to New Yorkers unable to get broadband from any private provider.

New York has spent over $500 million on its Broadband for All program and made Charter Spectrum an integral part of its broadband expansion plans in return for approval of its 2016 acquisition of Time Warner Cable. But a growing number of the governor’s critics claim the program has failed to deliver on its mandate, stranding thousands of New Yorkers without internet service and tens of thousands more with just one option — unpopular satellite internet access.

Gunther

Gunther was upset to learn that New York was prepared to hand over more than a half billion dollars to large private telecom companies including Frontier Communications and Verizon while not being willing to spend a penny to fund projects to reach New Yorkers for-profit companies could not be dragged kicking and screaming to service.

“We’re all spending millions and millions of dollars on privately owned internet service providers,” said Gunther. “In return for promises, a lot of our communities do not have access to the internet, or if they do have access to the internet, it’s slow and these companies are not, I think, fulfilling the promises made.”

The rural broadband problem is not resolved in the Finger Lakes or Southern Tier regions of New York either. This week, Yates County announced it was joining an effort by Schuyler, Steuben, and Tioga counties, and the Southern Tier Network, to complete a broadband feasibility study to improve internet access in the four counties. Fujitsu Broadband will manage the study and hopes to have results by June. The study will target the pervasive problem of inadequate broadband service in the region, which includes crucial tourist, winery, and agricultural businesses vital to New York’s rural economy.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York in 2015.

Gov. Cuomo has called such initiatives “well-intentioned” but was non committal about contributing more state funds to construct new networks or underwrite further expansion of existing ones. New York is about to begin its annual hard-fought budget negotiations in hopes of completing the state budget by April. Finding funding for such projects will probably require a powerful political advocate able to wrestle funding for further broadband improvements.

Even after spending $500 million, New York’s rural broadband problem has not been resolved. That offers insight into the merits of other state broadband programs, which often limit annual broadband expansion funding to under $30 million annually.

Those still without service are likely in high-cost service areas, where each customer could cost over $20,000 to reach. New York’s Broadband for All program relied on a reverse auction that required private companies to bid to service each unserved address. No wireline provider bid on any high-cost service areas, leaving Hughes Satellite as a subsidized satellite provider of last resort. But inadequate broadband mapping left scores of rural New Yorkers behind without even the option of subsidized satellite internet access.

Most of these projects were previously designated as “Phase 3 Awardees,” but the FCC will now supply the funds needed to begin construction through the Connect America Fund.

Charter Communications and the New York Department of Public Service announced a tentative settlement Friday that would allow Spectrum to continue providing cable TV, phone, and internet service in New York in return for a renewed commitment from the cable company to meet its 145,000 new passings rural broadband buildout agreement, commit to an expansion of that rural buildout, and in lieu of fines, pay $12 million in funds deposited in two escrow accounts to be used to help defray the costs of further broadband service extensions apart from Charter’s original commitments.

“Today the New York Department of Public Service jointly filed a proposed agreement with Charter Communications to resolve disputes over the network expansion conditions imposed by the Public Service Commission,” said Department of Public Service CEO John B. Rhodes in a statement issued Friday. “This proposed agreement will now be issued for a 60-day public comment period and remains subject to review and final action by the Public Service Commission.”

The agreement reinforces the state’s desire that Charter’s broadband expansion commitment be met by expanding service to homes and businesses in areas unlikely to get cable service otherwise, namely areas in Upstate New York. The state originally objected when Charter tried to count new passings in the highly populated New York City area as part of its expansion commitment. The new agreement requires the 145,000 homes and businesses newly passed be entirely Upstate, and completed no later than Sept. 30, 2021.

Only 64,827 new passings have been recognized by both parties as “completed” as of December, 2018

The proposed settlement gives insight into just how badly Charter failed to meet its original broadband expansion commitments, noting “Charter shall be deemed successfully to have completed 64,827 passings qualifying towards the Total Passings requirements of the Settlement Agreement and the 2019 Settlement Order, as of December 16, 2018.”

Charter’s record of failure on its rural expansion commitment is stark.

The original 2016 Merger Order required Charter to expand service to:

• 36,250 premises by May 18, 2017
• 72,500 by May 18, 2018
• 108,750 by May 18, 2019
• 145,000 by May 18, 2020

Charter did not even come close. Department Interim CEO Gregg C. Sayre said in 2017 that as of May 18 of that year, Charter had only extended its network to pass 15,164 of the 36,250 premises it was required to pass in just the first year after the merger.

In June 2017, New York fined Charter and required a $13 million ($12 million refundable to Charter if it complied) deposit be placed in escrow in an effort to get the company to comply with its buildout commitments. But Charter also failed to meet its commitments under that settlement as well:

• 36,771 premises by Feb. 16, 2017
• 58,417 by June 18, 2018
• 80,063 by Dec. 16, 2018
• 101,708 by May 18, 2019
• 123,354 by Nov. 16, 2019
• 145,000 by May 18, 2020

With just shy of 65,000 premises recognized as completed as of December, 2018 — almost three years after the merger — Charter was 15,236 premises short, based on the December 16, 2018 deadline. Within a few weeks from today, the company should have completed its 101,708th new passing. That seems extremely unlikely to actually happen.

Charter itself claimed in July, 2018, “Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the PSC.” That number is also suspect.

The company did not say if the expansion numbers it reported met the terms of the 2016 Merger Order, but Charter obviously thought those should be counted as legitimate new passings for the purpose of meeting its merger obligations. New York regulators clearly thought many of those expansions did not, and were infuriated when Charter began airing advertisements promoting its rural expansion in New York with what the state believed to be inflated numbers.

The Settlement

A review of the proposed legal settlement shows the Commission accepted many of the recommendations made by Stop the Cap! regarding the terms of any deal that would rescind last summer’s order revoking approval for the merger of Time Warner Cable and Charter Communications in New York State. We recommended the settlement focus on requiring an even greater expansion of rural broadband than originally envisioned, particularly in areas the state designated for HughesNet satellite internet access. We also recommended that any monetary fines be directed to further expansion of rural broadband, instead of being sent on to Albany to be added to the state’s general fund.

We noted that although Charter flagrantly violated the terms of the 2016 Merger Order, successfully removing the company from New York would likely result in years of litigation, and the likely entry of Comcast, which in our view is anti-consumer, and a much worse choice in terms of pricing and the quality of customer service. Comcast also imposes data caps in many of its service areas, a concept which Stop the Cap! obviously fiercely opposes. In our view, given a choice between Charter and Comcast, which would be the highly likely outcome, New York consumers would benefit (slightly) by keeping Spectrum service.

The terms

Reach 145,000 unserved/underserved New Yorkers with at least 100 Mbps internet access

• Charter is recommitted to expand rural internet service to 145,000 New Yorkers qualified as unserved (download speeds less than 25 Mbps available) or underserved (download speeds of 25-99.9 Mbps) entirely within Upstate New York.

Schoharie, NY

To ensure Charter does not simply choose “low-hanging fruit” to wire, such as new housing starts or urban business parks, the agreement limits Charter expansions to no more than 9,500 addresses in the urban and suburban areas adjacent to Albany, Buffalo, Mt. Vernon, Rochester, Schenectady, and Syracuse.

Additionally, Charter is restricted from expanding service to no more than 9,400 addresses that are scheduled to get (or already have) access to another wired provider because of a grant from the New NY Broadband Program.

But Charter is allowed to expand service to reach not more than 30,000 customers stuck on New York’s list of addresses designated to get HughesNet satellite internet. Stop the Cap! strongly recommended the Commission do all it can to require or encourage Charter to reach as many satellite-designated New Yorkers as economically feasible. The proposed agreement takes our recommendation into account, but we will urge the Commission to strike the 30,000 cap and allow Charter to reach as many of these disadvantaged customers as possible, and have it count towards their broadband expansion commitment. Those addresses designated to receive satellite service are the least likely to be reached by any commercial provider because of the costs to reach them, and they are too scattered across the state to make a public broadband alternative feasible.

Charter gets to include some ‘already-in-progress new passings’ towards its 145,000 new passings commitment: 5,993 passings located within Upstate Cities Charter would likely have serviced anyway; 4,388 wired overlap passings (where an existing telco or cable provider already offers service), and 9,397 addresses where wireless or satellite service was the only option.

A new “milestones” schedule is included for new buildouts, which partly explains why so many rural New Yorkers expecting to receive service by now are complaining about delays:

• 76,521 new premises by Sept. 30, 2019
• 87,934 by Jan. 31, 2020
• 99,347 by May 31, 2020
• 110,760 by Sept. 30, 2020
• 122,173 by Jan. 31, 2021
• 133,586 by May 31, 2021
• 145,000 by Sept. 30, 2021

If Charter again fails to stay on schedule, it must pay $2,800 for each designated-as-missed passing address into an escrow fund. If it chooses not to appeal that decision, or loses an appeal, those funds will be added to an Incremental Build Commitment fund described below.

Rural Broadband Expansion Fund #1 ($6 million) — Incremental Build Commitment

The first rural broadband expansion fund will contain $6 million dollars that Charter will pay into escrow and will be dedicated to defray Charter’s costs of constructing additional broadband passings above and beyond the 145,000 noted above. Charter itself or the state can designate the unserved addresses either want serviced, and Charter will be permitted to withdraw funds to pay for materials, construction, labor, licensing, and any permits required for these incremental expansion efforts. This money will be reserved for Charter to use for its own projects.

Rural Broadband Expansion Fund #2 ($6 million) — Incremental Broadband Fund

Although New York Gov. Andrew Cuomo promised broadband service for any New Yorker that wants it, his New NY Broadband Program left more than 80,000 New York homes and businesses behind because the program relied on private companies to bid to serve each unserved/underserved New York address. In especially rural areas, no company ultimately bid to reach those addresses because the subsidy funding offered by the state was too little to make the expansion investment worthwhile. In the end, those addresses were designated to be served by HughesNet, a satellite internet service provider. But HughesNet cannot guarantee its internet speeds, has draconian usage caps, and is very expensive. Customer satisfaction scores are also generally poor. For most, a wired internet solution is far preferable. To get one, New York would need to launch a new round of broadband funding, with a more generous subsidy to make construction costs to reach those unserved customers financially worthwhile.

The second $6 million rural expansion fund is more or less exactly that — an additional source of funds to try to reach those missed by earlier funding rounds. Most of the money in this fund would be awarded after a bidding process starting on or after Sept. 30, 2021. Any provider capable of offering customers at least 100 Mbps service will be qualified to participate in the first round of bidding to receive a portion of this money. The areas under consideration would be in existing Charter franchise areas or outside of a Charter-franchised area if both Charter and New York’s Broadband Program Office (BPO) agree. In most cases, for reasons of simplicity, we expect most this money will end up financing expansion projects just outside of Charter’s existing service area. So if you happened to live within a mile or two of an existing Charter customer, this money could be used by Charter to extend its network in your direction. Charter also enjoys the right of first refusal, an important advantage for the cable company. Charter could agree to service a designated address before it becomes open to a competitive bidding process.

The terms are generous to providers, who only have to agree to pay 20% of their own money to submit a cost-sharing bid. The fund would cover the remaining 80%, which would be particularly useful where the cost to extend a fiber connection to a rural neighborhood or development would run into the tens of thousands of dollars. The downside is that $6 million will not go very far in these high cost areas, where a single project could easily exhaust $50,000-100,000 just to reach a handful of homes and businesses. Assuming there are any funds left, the BPO will entertain bids in later rounds from wireless providers delivering at least 25 Mbps service, assuming no wired provider submits a bid. But it is just as likely the funds will be long gone before that happens. The state needs to choose the wording of its terms carefully. Charter could easily apply for funds to buildout new housing tracts or large development projects and business parks the company would have reached anyway. We recommend restricting these funds exclusively to projects that would otherwise fail a bidder’s own Return On Investment formula.

Stop the Cap! intends to be a participant in the comment round and we will share with readers our formal comments as they are submitted.

Solving America’s rural broadband crisis will take a lot more than demonstration projects, token grants, and press releases.

Since 2008, Stop the Cap! has witnessed media coverage that breathlessly promises rural broadband is right around the corner, evidenced by a new state or federal grant to build what later turns out to be a middle mile or institutional fiber optic network that is strictly off-limits to homes and businesses. Politicians who participate in these press events tend to favor publicity over performance, often misleading reporters and constituents about just how significant a particular project will be towards resolving a community’s broadband challenges. Much of the time, these projects turn out to serve a very limited number of people or only fund part of a broadband initiative.

Officials last week said they are hoping to make North Carolina “the first ‘giga-state,’ with broadband access for all its residents.” But to realistically achieve that goal, nothing short of an expenditure of hundreds of millions of dollars will be required to realistically achieve that goal statewide.

A decade ago, rural broadband progressed in North Carolina, as communities transitioned away from traditional tobacco and textile businesses to the information and technology economy. To assure a foundation for that economic shift, several communities identified their local substandard (or lacking) broadband as a major problem. The state’s phone and cable companies at the time — notably Time Warner Cable, AT&T, and CenturyLink, often proved to be obstacles by refusing to upgrade networks in the state’s smaller communities. Some cities decided to stop relying on what the broadband companies were willing to offer and chose to construct their own modern, publicly owned broadband network alternatives, open to residents and businesses. A handful of cities in North Carolina went a different direction and acquired a dilapidated and bankrupt cable system and invested in upgrades, hoping cable broadband improvements would help protect their communities’ competitiveness to attract digital economy jobs.

That progress largely stalled after Republicans took control of the state legislature in 2011 and passed a draconian municipal broadband law that effectively banned public broadband expansion. Most of those backing the measure took lucrative campaign contributions from the state’s dominant phone and cable companies. One, Sen. Marilyn Avila, worked so closely with Time Warner Cable’s lobbyists, the resulting bill was effectively drafted by the state’s largest cable company. For that effort, she was later wined and dined by cable lobbyists at a celebration dinner in Asheville.

To be fair, some North Carolina cities are experiencing a broadband renaissance. Charlotte, Raleigh, Greensboro, Cary, Durham, Winston-Salem, and Chapel Hill will have a choice of providers for gigabit service. Google has installed fiber in some of these cities while AT&T and Charter lay down more fiber optics and introduce upgrades to support gigabit speeds.

Things are considerably worse outside of large cities.

In North Carolina, 585,000 people live in areas where their wired connections cannot reach the FCC’s speed definition of broadband — 25 Mbps, and another 145,000 live without any notion of broadband at all.

Bringing all of North Carolina up to at least the nation’s minimum standard for broadband will not be cheap, and politicians and public policy groups must be realistic about the real cost to once and for all resolve North Carolina’s rural broadband challenges. Where the money comes from is a question that will be left to state and local officials and their constituents. Some advocate only tax credit-inspired private funding, others support a public-private partnership to share costs, while still others believe public money should be only spent on publicly owned, locally developed broadband networks. Regardless of which model is proposed, without a specific and realistic budget proposal to move forward, the public will likely be disappointed with the results.

The Facts of Broadband Life

There is a reason rural areas are underserved or unserved. America’s broadband providers are primarily for-profit, investor-owned companies. They are not public servants and they respond first to the interests of their shareholders. Customers might come in second. When a publicly owned utility or co-op is created, in most cases it is the result of years of frustration trying to get a commercial provider to serve a rural or high cost area. Public projects are usually designed to serve almost everyone, even though it will likely take years for construction costs to be recovered. Investor-owned companies are not nearly as patient, and usually demand a Return On Investment formula that offers a much shorter window to recover costs. For broadband, adequately populated areas that can be reached affordably and attract enough new customers to recover the initial investment will get service, while those areas that cannot are left behind. The two populations most likely to fail the ROI test are the urban poor that may not be able to afford to subscribe and rural residents a company claims it cannot afford to serve. Many early cable TV franchise agreements insisted on ROI formulas that allowed companies only to skip areas with inadequate population density, not inadequate income, which explains why cable service is available in even the poorest city neighborhoods, while a wealthy resident in a rural area goes unserved.

Today, most cable and phone companies install fiber optic infrastructure most commonly in new housing developments or previously unwired business parks, while allowing existing copper wire infrastructure already in place elsewhere to remain in service. Some companies, including AT&T and Verizon, have made an effort in some areas to replace copper infrastructure with fiber optics, but in most cases, their rural service areas remain served by copper wiring installed decades ago. As a result, most rural residents end up with DSL internet from the phone company, often at speeds of 5 Mbps or less, or no internet service at all. Neither of these phone companies, much less independent telcos like CenturyLink and Frontier, have shown much interest in scrapping copper wiring for fiber optics in rural service areas. There is simply no economic case that shareholders will accept for costly upgrades that will deliver little, if any, short-term benefits to a company’s bottom line. That reality has led some communities to try incentivizing commercial providers to make an investment anyway, usually with a package of tax breaks and cost sharing. But many communities have achieved better results even faster by launching their own fiber broadband services that the public can access.

Some states with large rural areas have recognized that solving the rural broadband problem will be costly — almost always more costly than first thought. Such projects often take longer than one hoped, and will require some form of taxpayer matching funds, municipal bonds, public buy-in, or a miraculous sudden investment from a generous cable or phone company. In states with municipal broadband bans, like North Carolina, politicians who support such restrictions believe the cable and phone companies will spontaneously solve the rural internet problem on their own. Such beliefs have stalled rural broadband improvements in many of the states ensnared by such laws, usually tailored to protect a duopoly of the same phone and cable companies that have historically refused to offer adequate broadband service to their rural customers.

Challenges for North Carolina

(Courtesy: North Carolina League of Municipalities – Click image for more information)

North Carolina is a growing state, so a small part of the rural broadband problem may work itself out as population densities increase to a level that crosses that critical ROI threshold. But most rural communities will be waiting years for that to happen. Intransigent phone and cable companies are unlikely to respond positively to local officials seeking better service if it requires a substantial investment. As industry lobbyists will tell you, it is not the job of government to dictate the services of privately owned companies. The Republican majority in North Carolina’s legislature underlines that principle regularly in the form of legislation that reduces regulation and oversight. Many, but not all of those Republicans have also taken a strong strand against the idea of municipalities stepping up to resolve their local broadband challenges by working around problematic cable and phone companies. The ideology that government should never be in the business of competing against private businesses usually takes precedence.

Almost a decade ago, the cable and phone companies of North Carolina made three failed attempts to enshrine this principle in a new statewide law that would limit municipal broadband encroachment to such an extent it made future projects unviable. They succeeded in passing a law on their fourth attempt in 2011, the same year Republicans took control in the state legislature.

Today, Republicans still control the legislature with a Democratic governor providing some checks and balances. Why is this important? Because for North Carolina to achieve its goal, it will realistically need a combination of bipartisan support for rural broadband funding and an end to the municipal broadband ban.

Where is the money?

Although North Carolina wants to be America’s first “gigabit” state, New York is the first to at least claim full broadband coverage across the entire state. That did not and could not happen without a multi-year spending program. Recently, North Carolina’s Department of Information Technology launched a $10 million GREAT Grant program to provide last-mile connectivity to the most economically distressed counties in the state. While a noble effort, and one no doubt limited by the availability of funds to spend on broadband expansion, it is a drop in a bucket of water thrown into a barely filled pool.

To put this problem in better context, New York’s goal of full broadband coverage (which in our view remains incomplete) required not only $500 million acquired from settlement proceeds won by the state after suing Wall Street banks for causing the Great Recession, but another $170 million in federal broadband expansion funds that were expected to be forfeited because Verizon — the state’s largest phone company — was not interested in the money or upgrading their DSL service upstate.

Big Money: New York’s rural broadband funding initiative spent hundreds of millions to attack the rural broadband problem. Gov. Andrew Cuomo outlines funding for just one of several rounds of broadband funding.

Last year, Gov. Andrew Cuomo detailed success for his Broadband for All program by pointing out the state spent $670 million to upgrade or introduce broadband service to 2.42 million locations in rural New York, giving the state 99.9% coverage. That amounts to an average grant of $277 per household or business. In turn, award recipients — largely incumbent phone and cable companies, had to commit to matching private investments. For that state money, the provider had to typically offer at least 100 Mbps service, except in the most rural parts of the state, where a lower speed was acceptable.

North Carolina has 585,000 underserved or unserved locations. Just by using New York’s average $277 grant, North Carolina will have to spend approximately $202 million with similar matching funds from private companies to reach those locations. In fact, it is assuredly more than that because North Carolina’s goal is gigabit speed, not 100 Mbps. Also, New York declared ‘mission accomplished’ while stranding tens of thousands of expensive or difficult to reach residents with subsidized satellite internet access. That offers nothing close to gigabit speed. A more realistic figure for North Carolina in 2019 could be as high as $250-300 million in taxpayer dollars — combined with similar private matching funds to convince AT&T, Charter, CenturyLink and others that the time is right to expand into more rural areas. But as New York discovered, there will be areas in the state no company will bid to serve because the money provided is inadequate.

If the thought of handing over tax dollars to big phone and cable companies bothers you, the alternative is helping communities start and run their own networks in the public interest. Except private providers routinely retaliate with well-funded campaigns of fear, uncertainty and doubt over those projects, and they become political footballs to everyone except their customers, who generally appreciate the service and local accountability.

If North Carolina’s state government relies on a series of $10 million appropriations for grants, it will likely take at least 20 years to wire the state. Stop the Cap! agrees with the goals North Carolina has set to deliver ubiquitous, gigabit-fast broadband. But those goals will be difficult to reach in the present political climate. Republicans in the state legislature approved reductions in the corporate income tax rate to 2.5 percent, down from 3 percent last year, and the personal income tax rate drops to 5.25 percent from 5.499 percent. North Carolina’s latest budget sets aside $13.8 billion for education, $3.8 billion for Medicaid, $3 billion in new debt for road maintenance, and $31 million in grants to attract the film industry to shoot their projects in the state.

It is likely any appropriation significant enough to actually deliver on the commitment to provide total broadband coverage will have to be spread out over several years, unless another funding mechanism can be identified. That assumes the Republicans in the state legislature will be receptive to the idea, which remains an open question.

Tens of thousands of rural New York families were hopeful after Gov. Andrew Cuomo announced in 2015 his intention to bring true broadband to every corner of the state by the year 2018. At the time, it was the largest and most ambitious broadband investment of any state in the country, putting $670 million in lawsuit settlement money and rural broadband funds from the FCC on the table to build out rural broadband service other states only talk about.

But for many rural New Yorkers, Gov. Cuomo’s program was a failure that could lock in substandard internet service (or no service at all) for years. What began as a 100% broadband commitment later evolved into 99.9% (then 98% in another estimate) after state officials learned $670 million was not enough to convince providers to share the cost of extending their networks to the most rural of the rural as well as those unlucky enough to live just a little too far down the road to make extending cable broadband worthwhile. But the governor proclaimed mission accomplished, and as far as the Cuomo Administration is concerned, the rural broadband issue has been resolved.

“There were a lot of tax dollars that were flipped and the governor has said, ‘Internet for everybody. Everybody will have internet.’ Well, that’s not the case. We’re not seeing that and those were his promises, not mine, but I voted for that money. A lot of other members did too,” Sen. Rob Ortt (R-North Tonawanda) told WBFO radio last year.

Ortt wants to know where the money is going and who exactly is getting it, and proposed legislation requiring annual reports from the Empire State Development Corporation detailing expenditures and disclosing the formula used to determine who gets true broadband service, and who does not.

For those not getting high-speed wireless or wired connections, the state has either offered nothing or dreaded satellite internet service, paying HughesNet $14,888,249 to supply discounted satellite equipment Hughes itself routinely discounts as a marketing promotion on their own dime.

For rural residents learning HughesNet was their designated future provider, many experienced with satellite internet over the last decade and hating nearly every minute of it, it was “thanks for nothing.”

“The governor pulled the rug right out from under us,” Ann told Stop the Cap! from her home near Middle Granville in Washington County, just minutes away from the Vermont border. “I have kids that require internet access to finish research and send in homework assignments. Internet service is not an option, and my kids’ grades are suffering because they have to complete homework assignments in the car or in a fast food restaurant or coffee shop that has Wi-Fi.”

Ann used HughesNet before, and canceled it because service went out whenever snow arrived in town.

“I thought the governor promised 100 Mbps service and HughesNet can’t even provide 25 Mbps,” she claims. “If you get 5 Mbps on a clear summer’s day, you are doing okay. In winter, reading email is the only thing that won’t frustrate you. It’s slow, slow, slow.”

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

Nick D’Agostino brought his family to a new home an hour northeast of Syracuse when he got a new job. He was counting on the governor’s commitment to bring wired internet access to a home that used to have Verizon DSL, but no longer does after Verizon’s wired infrastructure deteriorated to the point where the company stopped offering the service to new customers like him arriving in the neighborhood. D’Agostino had to spend hours researching the state’s Broadband Program Office website to find out which provider was going to be supplying his census block (neighborhood) with 100 Mbps internet. He found HughesNet instead.

“It’s a kick in the pants because we have a lot of experience with HughesNet and Exede and neither came close to meeting their advertising claims,” he told Stop the Cap! “Exede was often unusable and a horrible company to deal with. HughesNet has a new ‘Gen 5’ service that is capable of DSL speeds, but comes with a low data cap and speed throttling.”

D’Agostino warns that New York made a terrible choice relying on satellite internet, even though HughesNet’s latest fleet of satellites has offered improvement over HughesNet a decade ago.

“The problem is HughesNet customers in a geographic area all share the same spot beam — a regionally targeted satellite signal that serves a specific state or region,” D’Agostino said. “When we lived in North Carolina, the population growth in rural areas meant a lot more satellite customers were sharing the same spot beam, and speeds plummeted, especially after Netflix, Hulu, and cord cutting took off. Nothing eats bandwidth like streaming video, which is why you can subscribe to their 50 GB allowance package and be over that limit after a single week.”

D’Agostino fears that tens of thousands of additional satellite users will dramatically slow down HughesNet across upstate New York unless the company finds a way to get more shared bandwidth to serve the state’s rural broadband leftovers.

“That usually means, ‘wait until the next generation of satellites are launched,’ something nobody should have to wait for,” D’Agostino said.

The obvious solution for D’Agostino is to convince Charter Spectrum, the nearest cable provider, to extend its lines down his street. The cable company agreed, if he paid an $88,000 engineering, pole, and installation fee.

“That is not going to happen, even if we got the dozen or so neighbors in our position to split the cost,” he said. “This is why Cuomo’s program is a flop. It turns out close to $700 million is not enough, and they probably always knew there would be people they could never economically serve because they are miles and miles from the nearest DSL or cable connection. But if the electric and phone companies are compelled to offer service, the same should be true for internet access.”

D’Agostino believes rural New Yorkers left behind need to organize and make their voices heard.

“They keep saying we are .1% of New York, but I’ve seen plenty of rural town supervisors and other local officials across upstate New York complain they have all been left behind, and that decision will cost their towns good education, jobs, competitive agribusiness, and services online that everyone assumes people can easily access,” he said. “Clearly the state is not telling the truth about how many are being internet-orphaned. There have been three rounds of broadband funding in New York. It is time for a fourth round, finding either tax breaks or funding to get existing providers to reach more areas like mine that are less than a mile from a Spectrum customer.”

Ann shares that sentiment, and adds that Vermont is looking for ways to get internet to its rural residents as well.

“We’re at the point where companies or co-ops already offering service are probably the quickest and easiest option to solve the rural internet crisis, but they are not going to pay to do it if they are not required to,” she said. “We have taxes and surcharges on our phone bill now that are supposed to pay for internet expansion, but the amounts are too small to get the job done I guess. Perhaps it is time to revisit this, because 99.995% is better than 99.9% and satellite internet should be the last resort for people living in a cottage miles from anyone else, not for people who can be in town in less than a five-minute drive.”

A familiar story for any rural resident trying to get internet access to their rural home. But there is a small silver lining. HughesNet’s newest generation of satellites has provided a modest improvement that is often better than rural DSL. (10:19)