Verizon’s moratorium on further expansion of its fiber to the home service will continue for “the next couple of years.”

Verizon FiOS won’t be coming soon to a home near you, unless that home is inside a community with a standing agreement with the phone company.

Verizon CEO Lowell McAdam made it clear to attendees at Tuesday’s Goldman Sachs 22^nd Annual Communacopia Conference his priority continues to be investing in the company’s highly profitable wireless business, while the company’s wired infrastructure is being targeted for more cost cutting, especially in areas designated to see existing copper infrastructure decommissioned. As for expanding FiOS into new communities, McAdam said he instead preferred to concentrate on improving market share and profits for the next few years in areas already getting the fiber optic service.

McAdam noted John Stratton, president of Verizon Enterprise Solutions, has been hard at work pruning Verizon’s wireline products and services targeted to business and government customers.

“I think [he] killed about 2,000 products this year, and we have taken 350 systems offline last year,” McAdam noted. “I think we are already at 250 this year. That sort of discipline gives you the ability to streamline your infrastructure.”

For residential customers, Verizon has two sets of offerings: one for customers served by FiOS fiber optics, the other for customers unlikely to see fiber upgrades indefinitely.

Inside Existing FiOS Service Areas

“We are doing some major technology shifts within FiOS to make it more efficient,” McAdam said. “We’re going to concentrate there for the next couple of years.”

McAdam’s signals to Wall Street were loud and clear: no more FiOS expansion into new communities for now.

McAdam

Instead, Verizon will focus on improving existing service in several key areas:

• Verizon has almost two million optical terminals that McAdam says were active at one point and are now sitting idle, suggesting FiOS has won and lost nearly two million customers since launching, either because the customer switched providers or moved away. McAdam said he wants to improve Verizon FiOS’ product set enough to attract those customers back. He noted with the terminals and cables already in place, the capital costs to win back a former customer are near zero;
• Verizon is introducing a new terminal this fall. Verizon’s FiOS Media Server “eliminates the requirement for coax, once you get into the optical terminal in the basement or wherever in the house,” McAdam said. “That slashes the installation time, and therefore makes the product a lot more profitable for us going forward. It eliminates set-top boxes, it is all IP-based going forward.”
• Verizon will continue to expand Verizon FiOS, particularly in New York City where it has a commitment to offer service.

Verizon FiOS has managed to build a much larger market share than its nearest neighbor, AT&T U-verse. McAdam claimed Verizon FiOS has achieved a 39 percent market share in broadband and around 34 percent on its television service so far. McAdam’s goal is to boost that to 45 percent. In areas of Texas where Verizon first introduced its FiOS fiber optic service, the company already has a penetration rate above 50 percent for broadband and 50 percent for television, demonstrating room to grow market share. AT&T’s U-verse TV penetration rate is 20.1 percent.

For Those Unserved by FiOS

Verizon’s 4G LTE Broadband Router with Voice

Except for Fire Island, N.Y., there are no significant announcements of FiOS expansion. Instead, Verizon has focused on investing to improve its wireless 4G LTE cell networks with the hope existing landline customers will consider switching to higher-profit wireless service. An attempted trial of Verizon Voice Link, intended to be an entry-level wireless replacement of landline service, failed badly on Fire Island due to an avalanche of complaints about poor quality reception, dropped and incomplete calls, and lack of support for data.

Now Verizon is back with a new offering, its 4G LTE Broadband Router with Voice ($49.99 2-yr contract with $175 early termination fee/$199.99 month-to-month).

“Securely connect wired and wireless devices to the 4G LTE network, and connect your landline phone to make calls,” Verizon’s website says. “Combine voice and data on a Share Everything Plan for added savings.”

The device can function as both a wireless landline replacement and router for data. The unit includes three Ethernet ports and Wi-Fi to share your connection. A landline phone or cordless phone base station can be plugged in as well.

Verizon charges an extra $20 a month for Home Service Monthly Line Access on Share Everything Plans, which covers your telephone service. Customers get unlimited local, long distance, call forwarding, call waiting, three-way calling, and voice mail. 911 is available, but Verizon disclaims any responsibility if you cannot reach an operator. The device also supports TTY-TTD calling.

Verizon claims users can expect 5-12Mbps downloading and 2-5Mbps uploading on Verizon’s 4G network, assuming there is solid coverage where you use the device. Usage caps apply. A backup battery keeps the service running for up to four hours of voice calling in the event of a power outage.

McAdam admitted the thing that keeps him up most at night are regulatory issues. He particularly called out Europe, which he believes is hostile for investment. But Europeans pay considerably less for wireless service than North Americans pay, and often have more choices due to competition and regulatory oversight.

“I think the beauty of the ’96 Telecom Act was that it was such a light touch on broadband and mobile,” said McAdam. “And that is — and I sit in Europe talking to investors all the time — that is the biggest difference between the U.S. and Europe.”

To head the FCC off from pursuing any additional regulatory oversight, McAdam claims he reluctantly approved Verizon’s lawsuit against the government on Net Neutrality.

“We have had to take some positions, frankly, that we didn’t want to take,” McAdam said of the lawsuit. “It opened the door for them to get into price regulation of broadband. And I think that is not their charter, and I think it would be a mistake for the U.S. economy and certainly the telecommunications ecosystem.”

[flv width=”488″ height=”300″]http://www.phillipdampier.com/video/Verizon 4G LTE Broadband Router with Voice 9-25-13.flv[/flv]

Verizon Wireless’ latest 4G LTE router supports wireless landline service and 4G data.  (1 minute)

C Spire, a wireless phone company serving the southeastern United States today announced ambitious plans to deploy a gigabit fiber to the home network in the state of Mississippi, now considered to be one of the worst states for broadband speed and availability.

C Spire Fiber to the Home was introduced by company executives at a news conference this morning attended by community leaders. C-Spire intends to build a fiber network offering 1,000/1,000Mbps broadband, telephone and television service at a competitive price starting in 2014 in select communities in the state.

“As a brand that’s been pushing the envelope of innovation our entire existence, it’s only natural for us to want to provide the ‘what’s next’ to the customers we serve,” said Hu Meena, president and CEO of C Spire Wireless. “The ‘what’s next’ is now here and we’re ready to release the power of 1 Gig fiber to communities that want to experience the immediate and lasting benefits of 100 times the speed and 100 times the opportunities.”

C Spire will use its existing 4,000 miles of fiber optic infrastructure now providing backhaul connectivity to the company’s cell tower network and its commercial customers. An additional 1,500 miles of fiber is scheduled for installation next year.

The cell phone company will follow the lead of Google Fiber, giving Mississippi communities a chance to compete with one another for C Spire’s fiber network. C Spire will be accepting applications from neighborhoods, towns and cities in the state presenting their best case why they should be the first to get fiber to the home service. The communities that want it most, and move quickest, will get it first, promised company officials.

C Spire claimed its proposed fiber to the home network will expand faster and deeper into Mississippi than Google Fiber’s limited network in Kansas City and nearby suburbs.

“While we know some of the tangible benefits that fiber offers to individuals, families, businesses and entire communities, we’ve only scratched the surface of what’s possible with 100-times-faster Internet,” Meena said. “Similar to the transition from dial-up to broadband, no one could fathom that people would one day be able to shop online, download software and watch endless hours of video on YouTube. The undiscovered potential of fiber is what’s most exciting and compelling about our plans.”

Competing communities will be expected to explain how they intend to cut as much bureaucratic red tape as possible to win consideration. The company’s “Request for Information” (RFI) document prominently mentions “streamlined construction,” “advantageous access to public rights-of-way,” and “an attractive local franchise agreement” as the types of help most needed from local governments.

C Spire will likely not entertain franchise proposals that require the company to serve every possible resident. C Spire’s fiber business plan depends on rolling out the service only to neighborhoods where enough demand exists.

Other conditions:

• C Spire will not give away free service to schools or government buildings;
• Sizable local participation in the pre-registration process is required;
• The RFI hints that communities might be in a better position to win if they waive permit fees, issue permits within five business days, offer tax waivers, don’t require a local office for customer interaction, waive any “unacceptable ordinance provision or regulation as requested by C Spire,” and aid in rallying sign-ups for the fiber service.

Competitors, including AT&T, CableONE, Suddenlink, and Comcast may raise questions about local governments committing to rally for sign-ups. Some of those competing providers may also complain about their own franchise agreements, which often require widespread service deployment whether there is established demand for service or not.

C Spire is among a handful of companies that have recognized their existing fiber-to-cell-tower and institutional fiber broadband networks are underutilized and have the capacity to support both commercial and residential broadband applications.

C Spire is expected to announce the winning communities later this year or in early 2014.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/C Spire Fiber to the Home 9-24-13.mp4[/flv]

C Spire introduces Fiber to the Home service and explains the transformational benefits fiber broadband can deliver users. (2 minutes)

Since 2005, five cable and telephone companies and their respective lobbying trade associations have donated nearly $12 million to New York politicians, making Big Telecom companies among the biggest political donors in the state. Now a government reform group wants an investigation by the state’s anti-corruption commission.

By exploiting giant loopholes in New York’s campaign finance laws, telecom companies that used to live with annual campaign finance limits of $5,000 are now donating millions to powerful political leaders in Albany – the majority conferences in the legislature, the state party committees, and the governor. Some are using secretive “housekeeping” accounts controlled by political parties. Others hide behind shadowy contributions from “limited liability corporations” (LLCs) established by some of the state’s biggest cable and phone companies and treated under current law as living, breathing people.

“Big Telecom exemplifies the pay-to-play culture which has come to define Albany, giving generously to the leadership in exchange for veto power over bills which favor the public interest,” said Common Cause-New York executive director Susan Lerner.

The Optimum donor to state “housekeeping” accounts among telecom providers is Cablevision.

No telecom company donates more in New York than Cablevision, which has given more than $5.3 million in contributions to state politicians since 2005 as it fights its way through union problems, fierce competition from Verizon, and complaints from subscribers about rising cable prices and questionable service. The cable company doesn’t just donate in name-only. Common Cause-NY discovered Cablevision using eight different LLCs to evade contribution limits, handing over $1.5 million to candidates and committees. Gov. Andrew Cuomo received $130,000 from four different Cablevision-controlled LLCs between July and October 2010. On April 29 of this year, former Nassau County executive Tom Suozzi’s campaign received $190,000 from three Cablevision-controlled LLCs on that single day.

Verizon (82%) and Time Warner Cable (70%) prefer to quietly give the largest percentage of their political donations to the parties’ secretive, soft money “housekeeping” accounts. The Republican and Democratic recipients are not using the money to buy Endust, mops or spare light bulbs, although the average voter might assume as much.

Corporations with an agenda just love New York’s hush-hush “housekeeping” accounts because they come without dollar limits or complete disclosure about how the money was ultimately spent.

The State Board of Elections says “housekeeping” money is supposed to go toward maintaining a party’s headquarters and staff or “ordinary activities that are not for the express purpose of promoting the candidacy of specific candidates.” Unfortunately, nobody bothered to require detailed accounting, allowing funds to disappear down a political rabbit hole, to be distributed at each party’s discretion.

Comcast (59%) and AT&T (53%) are considerably smaller players, in part because neither company serves many wired cable/broadband customers in New York.

Verizon’s corporate PAC also likes to raise relatively large numbers of small contributions given in the name of company executives or employees, not necessarily mentioning the company itself. Campaign finance disclosures may list only the individuals’ contribution(s), not the company that signed their paycheck.

Where does all the money go?

Common Cause-NY says most of the money is channeled to the most influential politicians in the state, with minority parties and unelected candidates typically getting much less.

To gain influence on the state level, Big Telecom companies contribute to the governor, attorney general, and the majority parties controlling the state Assembly and Senate, with Republicans getting the lion’s share (over $3.5 million) in the Senate and Democrats (over $1.6 million) in the Assembly.

For local issues of interest to the state’s local cable and phone companies, contributions are funneled to influential county-level political machines, perhaps helpful in making life difficult for a competing Wi-Fi project, a municipal fiber network, or helping to cut red tape to place a cell tower in a controversial location.

The top six recipients of Big Telecom’s political cash in the legislature:

• Key Party Leaders: Dean Skelos ($117,700), Tom Libous ($57,150), Jeff Klein ($49,450), and Sheldon Silver ($32,749.61)
• Current and former Chairs of the Senate Energy and Telecom Committee: George Maziarz ($79,718.02) and Kevin Parker ($34,444.00).

Common Cause-NY notes the corporations involved don’t give money without expecting something in return. After generous contribution checks were deposited, a number of telecom consumer protection bills mysteriously died in committee or never made it to the floor. The same fate did not meet bills offering special tax breaks for cable and Internet Service Providers that have cost New York taxpayers nearly $500 million and counting.

“Multi-million dollar campaign contributions clearly help Big Telecom maintain the status quo of corporate control, high prices, and lax regulation,” Common Cause-NY concludes.

The legislature is rife with examples of bills that would have likely passed with popular support but suddenly or “mysteriously” didn’t:

• A 7635-A / S5630-A: Establishes a moratorium on telephone corporations on the replacement of landline telephone service with a wireless system.
  • The “VoiceLink” moratorium bill, passed the Assembly, had broad bi-partisan support in the Senate but never came to a vote.
• S542: Relates to enacting the “Save New York Call Center Jobs Act of 2013,” which requires prior notice of relocation of call center jobs from New York to a foreign country; directs the Commissioner of Labor to maintain a list of employers who move call center jobs; prohibits loans or grants.
  • The “Call Center Jobs Act” would take away tax breaks and state grants if companies move a call center to another country. The bill passed the Assembly in 2012 (A9809) and had bipartisan support in Senate but was blocked. The 2013 bill died in Senate committee.
• A6003/S5577 — Directs the Department of Public Service to study and report on the current status of cable television systems providing services over fiber optic cables.
  • Bipartisan support in Assembly for further oversight of broadband but gets little support in Senate, the same bill was also blocked in 2012.
• A5234/S1075 — Enacts the “Roadway Excavation Quality Assurance Act” demanding utility companies or their contractors shall use competent workers and shall pay the prevailing wage on projects where a permit to use or open a street is required to be issued.
  • Bipartisan support in the Senate and Assembly but no passage in either 2012 and 2013.
• A6239/S4550 — Creates the State Office of the Utility Consumer Advocate to represent interests of residential utility customers.
  • Bipartisan support in Assembly, dies in Senate.
• A6757/S4449 — Requires providers of electric, gas, steam, telephone and cable television services to issue standardized bills to residential customers; provides the standards for such bills shall be established by the Public Service Commission.
  • Bipartisan support, passes Assembly, dies in Senate.

Another ex-AT&T customer deals with bill shock: “Dishekie” reports he disconnected AT&T service in March after the phone company failed to get his small company’s Voice over IP phone system functioning properly. “I was reassured my contract was nullified because the VoIP phones never worked,” says the customer. Wrong. AT&T claims the bill is for fraudulent calls placed over the company’s hacked phone system. AT&T has not been willing to resolve the charges, which continue month after month, but hasn’t turned the customer over to collections either, leaving “Dishekie” opening one eye-popping bill after another. He took his case to Reddit, which seems to have finally gotten the attention of a vice president of finances at AT&T who may have a solution, or not.

Verizon FiOS is the fastest nationwide broadband service available.

That was PC Magazine’s assessment in its ranking of the fastest Internet Service Providers of 2013. It’s not the first time Verizon FiOS has taken top honors. In fact, the fiber to the home broadband service has consistently won excellent rankings not only for its speed, but also for its value for money and quality of service. The worst thing about FiOS is that many Verizon customers cannot buy the service because its expansion was curtailed in early 2010.

Verizon FiOS has seen its national speed rankings increase this year. In 2012, the provider’s nationwide download speeds averaged 29.4Mbps; this year FiOS average downstream speeds jumped to 34.5Mbps. Upstream speeds are also up from 26.8Mbps to 31.6Mbps. In part, this is because a growing number of customers have moved away from Verizon’s entry-level 15/5Mbps package with a $10 upgrade to Quantum FiOS 50/25Mbps service. FiOS TV customers can upgrade themselves with their remote control.

Frontier Communications made the top five in the Pacific Northwest, thanks to FiOS infrastructure the company inherited from Verizon.

Other high-ranking ISPs included Midcontinent Communications, a small cable provider serving the north-central states. Midco’s DOCSIS 3 upgrade allows the company to offer most customers up to 100Mbps service. The average download speed for Midco customers is 33.1Mbps; average upload speed is 6.4Mpbs.

Where cable operators face head-on competition from Verizon FiOS, the usual competitive response is speed increases. Cablevision is a good example. It came in fourth place nationally with average speeds of 25.9/5.9Mbps. Comcast has also been boosting speeds, especially in the northeast where it faces the most competition from fiber. It came in third place with average speeds of 27.2/6.8Mbps and offers Internet speeds up to 505Mbps in some areas.

There were companies that performed so poorly, they barely made the regional rankings. The most glaring example largely absent from PC Magazine’s awards: Time Warner Cable, which has lagged behind most cable operators in the speed department. It scored poorly for the second largest cable company in the country, beaten by Charter, Mediacom, and CableONE — which all usually perform abysmally in customer ratings. The only regional contest where Time Warner made a showing at all was in the southeast, where it lost to Verizon FiOS, Comcast, and Charter. Only TDS, an independent phone company, scored worse among the top five down south.

Even more embarrassing results turned up for AT&T U-verse, which performed so bad it did not even make the national rankings. AT&T has promised speed upgrades for customers this year, and has implemented them in several cities. Unfortunately for AT&T, its decision to deploy a fiber to the neighborhood system that still depends on copper to the home is turning out to be penny wise-pound foolish, as it continues to fall further behind its cable and fiber competitors. At the rate its competitors are boosting speeds, U-verse broadband could become as relevant as today’s telephone company ADSL service within the next five years.

Other players scoring low include WOW!, a surprising result since Consumer Reports awarded them top honors for service this year. Also stuck in the mud: Atlantic Broadband (acquired by Canada’s Cogeco Cable, which itself is no award winner), Suddenlink, Wave Broadband and Metrocast, which serves smaller communities in New Hampshire, Maine, Pennsylvania, Maryland, Virginia, Connecticut, South Carolina, Mississippi and Alabama.

The magazine also ranked the fastest U.S. cities, with top honors going to the politically important Washington, D.C., and its nearby suburb Silver Spring, Md, which took first and second place. Alexandria, Va., another D.C. suburb, turned up in eighth place. No cable or phone company wants to be caught delivering poor service to the politicians that can make life difficult for them.

Brooklyn, N.Y., took third place because of head-on competition between Cablevision and Verizon FiOS. Time Warner’s dominance in Manhattan and other boroughs dragged New York City’s speed rankings down below the top ten. Among most of the remaining top ten cities, the most common reason those cities made the list was Verizon FiOS. Florida’s Gulf Coast communities of Bradenton (4th place) and Tampa (6th place) have fiber service. So does Plano, Tex. (5th place) and Long Beach, Calif. (7th place). The other contenders: Hollywood, Fla. takes ninth place and Chandler, Ariz. rounds out the top 10.