Ohio utility regulators today approved the transfer of telephone service from Verizon North to Frontier Communications with some conditions attached.  The transition will make Frontier Communications the state’s second largest telephone company behind AT&T.

Regulators negotiated conditions with Frontier officials that requires the company to:

• deploy broadband facilities in 85 percent of Verizon’s current Ohio service area by the end of 2013;
• freeze basic local telephone rates in Frontier’s service territory at current levels until broadband deployment reaches 85 percent;
• invest in service upgrades in each of the next three years amounting to $50 million in infrastructure improvements;
• agree to track and report service outages and how Frontier responds to them.

The company has committed to keep on nearly 1,000 Verizon North employees in Ohio.  Opponents expressed concern that pressure to cut costs post-merger would have come at the expense of employees.

Frontier's current service area in Ohio is a tiny portion of Williams County, serving just 480 residents from an office in Michigan (click to see a color map of the service area)

Ohio residents are largely unfamiliar with Frontier Communications.  Prior to the merger, just 480 residents in a tiny portion of Williams County in northwest Ohio had Frontier telephone service, served by Frontier Communications of Michigan’s office in Osseo, Michigan.

Right now, residents of Billingstown, Cooney, Northwest, and Nettle Lake, Ohio might qualify for Frontier High-Speed Internet Max, advertising “breakthrough speeds at an unbeatable price.”  That is “up to 3Mbps” service starting at $49.99 a month.

Those members of Frontier’s family of customers will now be joined by 435,000 Verizon residential customers in 77 of Ohio’s 88 counties.

The largest portion of Frontier’s new service area will include parts of Champaign, Clark, Clinton, Darke, Miami, Montgomery, Preble, Shelby and Warren counties.

Despite early opposition from Ohio Consumers’ Counsel (OCC), who expressed concerns about the financial viability of the deal and the fulfillment of promised broadband expansion, the vote by the Public Utilities Commission (PUC) was unanimous.  After negotiations with company officials and the OCC and PUC, an agreement to attach conditions to the sale of Verizon’s landlines resulted in a change of heart by the Counsel’s office.

Frontier's new service area, representing territory formerly served by Verizon North (click to enlarge)

Many of Ohio’s former Verizon service areas are served by Verizon”s DSL service, but many rural communities went unserved.  Verizon has made a business decision to direct resources into its fiber to the home service — FiOS, which is only being provided in substantial-sized communities.  With Verizon’s reduction in resources towards rural service areas, Frontier argues the sale will benefit rural residents because they will provide broadband service Verizon never did.  Frontier suggests the viability of its landline business is enhanced by robust broadband deployment as consumers continue to drop traditional phone service.  Broadband gives customers a reason to stay with Frontier, the company believes.

But critics contend Frontier’s broadband is behind-the-times, often providing less than 3Mbps service in many smaller communities.  Frontier also maintains language in its Acceptable Use Policy that expects consumers to limit their broadband use to just 5GB per month, although company officials stress they do not enforce that provision at this time.

Frontier believes broadband deployment will help the company survive the trend away from landline phone service

Frontier relies on traditional, basic ADSL service across its service areas nationwide, but also provides provides some communities with Wi-Fi access for an additional monthly charge.

Similar earlier deals between Verizon and FairPoint Communications, the Carlyle Group, and Verizon’s former telephone directory printing operation (now Idearc Media) have all ended in bankruptcy after months of sub-standard service, billing errors, and broken promises.  Should a similar fate befall Frontier Communications, a trip to Bankruptcy Court could put an end to broadband, pricing, and service commitments made with state officials.

Google plans to offer up to 1Gbps service on its direct to the home fiber network

Google has announced it is doing something about anemic, overpriced, and poorly supported broadband service in the United States.  It’s going to start providing service itself.

In a move that is sure to drive providers crazy, Google is looking for your nominations for communities that are stuck in broadband backwaters, desperate for an upgrade.  With so many suffering from “good enough for you” broadband speeds, threats of “inevitable” Internet Overcharging schemes like usage limits and consumption billing, or customer support that involves reaching more busy signals than helpful assistance, they won’t have to beg for nominations.

Google is planning to launch an experiment that we hope will make Internet access better and faster for everyone. We plan to test ultra-high speed broadband networks in one or more trial locations across the country. Our networks will deliver Internet speeds more than 100 times faster than what most Americans have access to today over 1 gigabit per second, fiber-to-the-home connections. We’ll offer service at a competitive price to at least 50,000 and potentially up to 500,000 people.

From now until March 26th, we’re asking interested municipalities to provide us with information about their communities through a Request for information (RFI), which we’ll use to determine where to build our network.

I can think of a few cities that were victimized by providers in 2009 who have little chance of seeing true fiber optic service any other way.  Rochester, New York, the Triad region of North Carolina, parts of San Antonio and Austin bypassed by Grande Communications’ fiber network, are all among them.  Rochester has the dubious distinction of being stuck with two providers itching to slap usage limits and consumption billing on their customers – Frontier and Time Warner Cable.  Since Verizon FiOS is popping up all over the rest of New York State, residents in the Flower City concerned about being left behind might want to make their voices heard.

Google plans to deliver 1Gbps… that’s a Gigabit — 1,000Mbps service to its fiber customers at a “competitive price.”

While some in the industry consider such speeds irrelevant to the majority of consumers, Google thinks otherwise:

In the same way that the transition from dial-up to broadband made possible the emergence of online video and countless other applications, ultra high-speed bandwidth will drive more innovation – in high-definition video, remote data storage, real-time multimedia collaboration, and others that we cannot yet imagine. It will enable new consumer applications, as well as medical, educational, and other services that can benefit communities. If the Internet has taught us anything, it’s that the most important innovations are often those we least expect.

What’s in it for Google?  Targeted advertising, guaranteed open networks, an improved broadband platform on which Google can develop new broadband applications, and calling out providers’ high profit, slow speed broadband schemes are all part of the fringe benefits.

For providers and their friends who have regularly attacked Google for “using their networks for free,” Google’s fiber experiment deflates providers’ hollow rhetoric, and could finally provide a warning shot on behalf of overcharged, frustrated consumers that the days of rationed broadband service at top dollar pricing may soon be over.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Google Think Big With a Gig Announcement.flv[/flv]

Google released this video announcing their Think Big With a Gig campaign (1 minute)

This isn’t Google’s first experience with being an Internet Service Provider.  The company has experimented with free Google Wi-Fi service in its hometown of Mountain View, California since 2006.

[Update 2:30pm EST: FCC Chairman Julius Genachowski applauded Google’s experiment: “Big broadband creates big opportunities,” he said in a statement. “This significant trial will provide an American testbed for the next generation of innovative, high-speed Internet apps, devices and services.”

The Washington Post has a source that claims Google “doesn’t currently have plans to expand beyond the initial tests but will evaluate as the tests progress.”  That could mean the experiment also serves a public policy purpose to re-emphasize Google’s support for Net Neutrality, and to deflate lobbyist rhetoric about Google’s support for those policies being more a case of their own self-interest and less about the public good.  If Google can run its networks with open access, they essentially put their money where their public policy mouth is.]