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

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

Ensuring High-Speed Internet Access for Every New Yorker

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

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

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

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

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

Except it won’t.

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

Complaints about HughesNet are common on websites like Consumer Affairs:

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

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

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

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

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

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

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

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

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

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

Exurban communities in northern Illinois bypassed for upgrades from second-rate cable companies and considered too-small-for-fiber by AT&T are clamoring for a third option that will deliver fiber optic broadband.

In the Fox River Valley, west of Chicago, Sugar Grove residents are hopeful that a midwestern upstart that specializes in taking on larger cable and phone companies in the region will come to town with gigabit broadband and better service.

MetroNet is currently surveying residents of this fast-growing village of 9,000, looking for future customers willing to put down deposits of $20 to join a “MetroZone,” an area where MetroNet sees enough potential to begin construction of its fiber to the home network, over which it sells television, phone, and internet service.

The Kane Country Chronicle reports local resident Wendy Betustak can’t wait. Betustak has been a customer of both AT&T and Mediacom, and both underwhelmed her.

“I hate AT&T now, but I don’t want to make a jump back to Mediacom because I remember what that was like,” she said. “But AT&T has been out so many times that I’ve stopped calling them.”

While both Mediacom and AT&T have been promoting their investments in upgrading service, those benefits often take many years to reach smaller communities inside their service areas. In some cases, those upgrades will never arrive.

Sugar Grove is just one of several exploding exurban communities in the far western suburbs of Chicago. As residents migrate further away from the city center, they expect services to migrate with them. But when essential utilities are in the hands of private companies, smaller towns and villages are often frustrated to hear there is not enough Return On Investment to provide 21st century quality service.

But MetroNet’s business plan is more forgiving, in part because it recognizes it will almost always compete head to head with one or two long-established telecom companies. It also does not hurt to have neighboring communities already wired up by MetroNet, which serves Batavia, Geneva, Montgomery, North Aurora, Oswego, and St. Charles. MetroNet has already installed fiber throughout the village of Sugar Grove and plans to install more.

“These installations will facilitate service to the village at a later date. Currently they are being utilized as transport routes,” Sugar Grove village administrator Brent Eichelberger told the newspaper. “We do not have a firm date for when MetroNet plans to start providing service within the village. If residents and businesses are interested in having MetroNet provide service they should contact MetroNet directly.”

They might want to hurry. Residents are encouraged by the company to visit www.metronetinc.com/metrozone and select Sugar Grove (or another community MetroNet is considering) and create an account. A refundable $20 deposit allows MetroNet to know that a would-be customer is seriously interested in getting service. Right now, MetroNet estimates around 10% of Sugar Grove residents have placed deposits.

“The MetroZone opportunity is a milestone in that we are able to track those who are interested in us coming to the village of Sugar Grove,” said Kathy Scheller, business development manager for MetroNet. “Our goal is to have 25 percent of the village pre-signed by Feb. 28.”

MetroNet’s broadband customers blow past Mediacom and AT&T’s offerings with 100/25 Mbps internet service for $49.95 a month. MetroNet’s top speed – 1000/250 Mbps costs $89.95 a month.

The usual alternative for most towns and villages unwilling to consider building their own broadband networks is to wait for the cable and phone company to upgrade service, which could take years in smaller communities. But a growing number of small commercial ventures are starting to offer fiber broadband service in a growing number of communities to meet the demand for better and faster broadband service.

National security officials inside the Trump Administration dropped a controversial proposal on the desks of multiple federal agencies that advocates a federal government takeover of the nation’s forthcoming 5G wireless network.

Axios obtained a copy of an accompanying memo and PowerPoint presentation outlining the proposal that would nationalize 5G service and have taxpayers fund the construction of a single,  nationwide network that would allow federal officials to secure traffic from foreign economic and cybersecurity threats.

Some national security officials worry the Chinese have achieved dominant market positions in network infrastructure and artificial intelligence, and this could have security implications for emerging technologies like self-driving cars and machine to machine communications, which will likely use 5G networks.

“China is the dominant malicious actor in the Information Domain,” the presentation notes, adding that two Chinese manufacturers – ZTE and Huawei are dominant players in 5G infrastructure at a time when American manufacturers of wireless technology are disappearing.

That 5G technology and who makes it is becoming a national security issue, claims the author, advocating reduced risk by authorizing the United States government to build a single, nationwide 5G wireless network, on which America’s wireless carriers could lease secure access. The network concept could even eventually be shared with America’s allies to protect them from “Chinese neo-colonial behavior,” the author writes.

The author of the presentation, perhaps unintentionally, waded into the heart of a fierce debate between municipalities, broadband advocates and private cable and phone companies and their funded special interest groups, over the benefits of public vs. private broadband service.

Calling the taxpayer-funded effort “the 21st century equivalent of the Eisenhower National Highway System,” the author advocated first spending up to $200 billion to construct a national fiber optic backbone that would reach neighborhood 5G small cells. Additional funding would cover small cell placement and equipment.

The author implied the Department of Defense budget could be tapped for some of the money, quoting the Secretary’s interest in expanding secure communications. The author noted little of the military’s current $700 billion budget does any good for the American people in the information domain. Constructing a secured 5G broadband network would presumably change that.

The proposal suggests a national 5G network could be up and running within three years, if it became a government priority. ISPs and other users would then be able to obtain access on the network to service their respective customers.

If adopted, the Trump Administration would oversee the country’s largest public broadband project in American history, paid for by U.S. taxpayers, a concept that has traditionally been anathema to most Republicans and the broadband industry. Both have traditionally opposed public broadband projects if or when they compete with the private sector.

“This is coming from a Trump’s National Security Council,” tweeted Hal Singer, a principal at Economists, Inc. “If the same thoughts came from Bernie Sander’s NSC (or Elizabeth Warren’s), Republicans would be up in arms and Fox News would sound the socialism alarm.”

Commissioners at the Federal Communications Commission also roundly criticized the proposal.

“I oppose any proposal for the federal government to build and operate a nationwide 5G network,” wrote FCC Chairman Ajit Pai. “The market, not the government, is best positioned to drive innovation and investment.”

Pai wants the government to accelerate the allocation of additional wireless spectrum that could be auctioned off to wireless carriers to expand 5G.

The large wireless carriers remained silent about the implications of the proposal, claiming they had not yet seen it.

But by late morning, the Trump Administration was attempting to downplay the presentation, telling Recode the document was dated and had merely been floated by a staff member and was not a reflection of an imminent major policy announcement.

That did not stop four of the five commissioners at the FCC from hurrying out statements criticizing the proposal, and the fifth tweeting negatively about it. They apparently took it very seriously:

• • Commissioner Clyburn’s comments
  • Commissioner Carr’s comments
  • Commissioner O’Rielly’s comments
  • Chairman Pai’s comments

Just shy of 10 years after FairPoint Communications acquired Verizon’s landline properties in the northern New England states of Maine, New Hampshire, and Vermont, both the company and its name are disappearing forever.

Consolidated Communications, which announced it would acquire FairPoint in December 2016, intends to put FairPoint’s name and reputation behind it, and is rebranding the phone company as Consolidated Communications with plans for significant broadband upgrades for its customers.

FairPoint bought the assets of Verizon’s landline network in the three northern New England states in 2007 for $2.4 billion. The transition from Verizon to FairPoint did not go well, and the company stumbled for years trying to keep up with billing and service problems and the need to continually expand broadband service to stay competitive, all while also trying to pay off the debts it incurred in the acquisition. The company failed on all accounts and declared bankruptcy in 2009, eventually emerging with a new business plan in 2011.

FairPoint’s performance post-bankruptcy has relied on cautious spending, cost-cutting measures and benefits cutbacks for its employees, which triggered a 131-day strike in 2014 among FairPoint’s union workforce — the longest walkout of any company that year. Replacement workers sent in to handle service calls and network maintenance were criticized by customers and lacked experience to manage New England’s rough winters.

By early 2016, executives claimed their “turnaround” plan for FairPoint had made significant strides. By that summer, activist shareholders were demanding FairPoint be put up for sale, in part to allow them to quickly recoup their investments in company debt that could not be monetized unless another company acquired FairPoint and assumed those debts.

In late 2016, Consolidated Communications did exactly that, acquiring FairPoint’s assets in northern New England and many other states where it operates small phone companies for $1.5 billion — a significant drop in value for assets that sold for nearly $1 billion more nine years earlier.

Rob Koester, Consolidated Communications vice president for consumer products clearly wants to put FairPoint behind him.

“It is a new beginning,” he said. “It’s a new chapter for us. It’s a re-dedication to our customers.”

Some of the biggest planned changes appear to be more job cuts. Consolidated recently eliminated FairPoint’s state president positions in Maine, New Hampshire, and Vermont and will depend on regional management instead. The phone company will also once again face negotiations with unions that represent much of its workforce later this year. Most expect the unions will not be friendly to anticipated company efforts to further consolidate and reduce benefits.

Promised broadband upgrades from speed increases come with few details, except a broad commitment to raise speeds for 300,000 internet customers over the course of this year — which represents about 30% of FairPoint customers. Spokeswoman Angelynne Amores claims there will be no price hikes for faster internet speeds.

But Consolidated will also be under the watchful eye of Wall Street, which does not want the company to invest too much in broadband upgrades until shareholders are comfortable with the company’s financial future. There are few business successes in wireline acquisitions and mergers these days, as Frontier Communications can attest from its purchase of Verizon’s network in Florida, California, and Texas.

Any upgrades cannot come soon enough for FairPoint customers forced to endure its DSL service as their only internet access option.

Michael Charter, a FairPoint customer in Jericho, Vt., lives just outside the state’s largest city, Burlington, where there are several internet service providers. But in his part of Jericho, FairPoint is the only broadband provider available, and it does not come close to offering actual broadband speeds.

Charter told the Associated Press his current solution is to buy two DSL accounts from FairPoint and divide up the load from his family’s streaming, internet browsing, downloading and telecommuting across two different accounts. His television and computers share one FairPoint DSL account hooked up to one router while other internet usage is confined to a second router connected to a second account. FairPoint is unable to bond the two connections together to increase speed, so two slow DSL lines is the best option for him for now.

Consolidated isn’t likely to make a lot of money taking over FairPoint’s residential and business landlines or DSL accounts. But it could earn substantial revenue from FairPoint’s extensive fiber network laid across the three northern New England states it serves. Companies and public institutions rely on fiber connectivity, as do cell towers — including the future swarm of 5G small cells expected to eventually be placed across the phone company’s footprint.

The phone company’s biggest rival is Comcast, which has some cable coverage in the region, but large sections of all three states are bypassed by Comcast and Charter Communications, which has a substantial presence in eastern Maine.

Charter Communications has ended more than a decade-long relationship between Earthlink and Time Warner Cable by quietly pulling the plug on Earthlink’s cable broadband service.

As far back as November, Spectrum customer service agents have begun turning down customer requests to enroll in the alternative broadband service distributed by Spectrum/Time Warner Cable’s network and charged to monthly cable bills. With the exception of e-mail service, Earthlink over Time Warner Cable (and later Spectrum) was indistinguishable from cable company internet service and traveled over the same network. But customers used to enjoy significant savings by bouncing between new customer promotions from Earthlink and the cable company. Charter officials first closed that loophole by forbidding Earthlink from extending promotional pricing to existing Spectrum or Time Warner Cable broadband customers. Charter has since stopped enrolling new customers altogether.

Existing Earthlink customers can keep their service until further notice. Most are enrolled in 15-20 Mbps slower speed tiers originally identical to those offered by Time Warner Cable, but pay less than Spectrum’s standard $65 standalone broadband pricing.

“Spectrum now has absolutely no reasonable competition in the N.Y. Capitol District,” complains Stop the Cap! reader Jan Pedersen, who reported Spectrum told him Earthlink was no longer an option.

Earthlink does still resell AT&T DSL service in AT&T landline markets.