Verizon FiOS is coming to Fire Island.

Verizon Communications has thrown in the beach towel attempting to convince residents of popular tourist destination Fire Island to accept its wireless landline replacement Voice Link as the company’s sole landline service option.

After telling customers for months it did not make financial sense to restore copper service or bring its fiber optic network FiOS to Fire Island, Verizon senior vice president of national operations support Tom Maguire today reversed course.

“In today’s competitive marketplace it’s all about making sure you can take care of customers because if you don’t they can go someplace else,” Maguire told Newsday. “Interestingly on Fire Island, there is no place else, so we listened to our customers. It was pretty apparent that we wanted to do something beyond Voice Link and the wireless network, so we think that fiber is the best course.”

Verizon customers on Fire Island have told Stop the Cap! all summer they felt abandoned by Verizon, stuck using a wireless landline replacement service they claimed worked poorly or not at all at times. Customers also loudly complained that Verizon was effectively forcing broadband customers who depended on Verizon DSL to the much more expensive Verizon Wireless broadband service with a very small usage cap. Many attended meetings sponsored by elected officials or the Public Service Commission to decry Voice Link and demand Verizon offer the same quality service its landline network used to provide.

Maguire told the newspaper the company will now deploy its fiber network FiOS on Fire Island, offering residents new options for telephone and broadband service. The 600 customers on Fire Island with Voice Link will be able to keep the wireless service or switch to FiOS fiber.

Reached for comment, Verizon tells Stop the Cap! its fiber service will not include FiOS TV because Verizon does not have franchise agreements with the many municipalities on Fire Island, and their primary concern is getting the fiber network engineered and constructed.

Schumer

Fire Island residents have made it clear to Verizon their biggest concern is Internet access, not television, and Verizon FiOS will be able to deliver faster Internet speeds unavailable from DSL.

Verizon expects to begin construction in October, although it has already started preliminary design work for the new fiber network. Verizon expects to have the fiber build complete by the beginning of the 2014 summer season on the island.

Sen. Charles Schumer (D-N.Y.), who has been carefully monitoring the Voice Link issue, released a statement welcoming Verizon’s decision.

“By installing fiber-optic cables on the island, Verizon will not only make the system as good as it was before, it will be making it better,” said Schumer. “Fire Island residents will now have greater access to high-speed Internet – a necessity in the modern age – and reliable voice service. Verizon deserves credit for listening to our concerns and changing course.”

In a June guest article written for publication on Stop the Cap!, Maguire wrote it would cost Verizon from $4.8 million to more than $6 million to restore landline service. Maguire argued it made no economic sense to commit to a multimillion dollar investment with no guarantee that residents of the island will sign up for Verizon service.

“That’s probably why Verizon is the sole provider on the island,” Maguire noted in the piece. “None of the companies we compete with in other parts of New York offer services on the island.”

Today’s decision represents a complete reversal of the company’s earlier views, but one that is welcomed nonetheless by residents on Fire Island reached by Stop the Cap! this afternoon.

“We’re very glad this is now over and behind us,” said Verizon customer Shari who has toughed out the summer with cellphone-only service.

“I can’t wait to return Voice Link, which has been a real pain,” said Thom.

Both customers tell Stop the Cap! they intend to sign up for Verizon FiOS the moment it becomes available.

Comcast rates are going up again this fall in the Pacific Northwest, now exceeding $70 a month.

At least 600,000 cable customers in Oregon and southwestern Washington will pay 4.4 percent more for 100-channel television service beginning this October, raising the cost of Standard basic cable to $70.49 a month.

Despite threats of cord cutting, customers in the Pacific Northwest have remained loyal to the idea of paying for television, according to Fred Christ, policy director for the Metropolitan Area Cable Commission in Washington County.

“Subscriber numbers remain steady,” Christ told The Oregonian. “People still don’t see an easy alternative to Comcast, Frontier (FiOS TV), or the satellite providers, all of which cause more or less the same amount of pain.”

The newspaper notes sports programming may not be the cause of this year’s rate increase.

The cost of Comcast’s discounted “Digital Economy” cable package, which excludes most expensive sports networks, is rising at nearly double the rate of Standard Cable, up 8.6 percent this fall to $37.95 a month.

For those who cannot afford traditional Standard cable television, Comcast’s limited basic service, which primarily consists of local TV channels, runs $12-22 a month depending on the customer’s location. It also increased in price by about $1.30 a month in August.

Comcast may not mind cord cutters too much, because it reaps significant profits from the broadband service that powers online viewing. Comcast raised speeds from 15 to 20Mbps last spring along with the price. The popular “Performance” tier now costs $53.95 a month.

Comcast is testing the reintroduction of usage caps in a handful of service areas, typically providing up to 300GB of usage per month before overlimit fees kick in. But those Internet usage limits do not yet apply in the Pacific Northwest.

Comcast blamed the rate increases on network enhancement investments including faster Internet speeds, more multi platform video and better customer service. Comcast is currently introducing its new X1 cable box that makes finding programming easier.

Customers can avoid the worst of the price increases by choosing a bundled service package, which will see a lower rate increase. Current customers can also call Comcast to negotiate a better deal by threatening to cancel service.

Mediacom, the worst-rated cable operator in the United States, claims it needs usage caps and consumption billing to force heavy users to pay for needed upgrades. But that isn’t what Mediacom’s executives are telling investors and the Securities and Exchange Commission (SEC).

Thomas Larsen, group vice president of legal and public affairs for Mediacom told The Gazette the consumption-based billing program was intended to pay for the cost of network upgrades incurred by “individuals who are the highest users.”

But Mediacom’s August 10-Q filings (Mediacom LLC and Mediacom Broadband LLC) with the SEC indicate Mediacom’s revenues are increasing faster than the cable operator’s costs to provide service, as customers upgrade to more costly, faster speed Internet tiers.

“Revenues from residential services are expected to grow as a result of [broadband] and phone customer growth, with additional contributions from customers taking higher speed tiers and more customers taking our advanced video services,” Mediacom reports. “Based upon the speeds we offer, we believe our High Speed Data (HSD) product is generally superior to DSL offerings in our service areas. As consumers’ bandwidth requirements have dramatically increased in the past few years, a trend we expect to continue, we believe our ability to offer a HSD product today with speeds of up to 105Mbps gives us a competitive advantage compared to the DSL service offered by the local telephone companies. We expect to continue to grow HSD revenues through residential customer growth and more customers taking higher HSD speed tiers. “

Mediacom’s consumption billing program, already in effect for new customers, will be imposed on all Mediacom broadband customers starting in September. Larsen claims only about three percent of customers will be impacted by the usage allowance, which will include 250GB of usage for customers selecting the company’s most popular speed tier. Larsen also claimed the average Mediacom customer uses only 14GB per month.

That usage profile is below the national average, and leads to questions about why Mediacom needs a usage allowance system when 97 percent of its customers do not present a burden to the cable company.

“Once a customer reaches their monthly allowance,  for $10 they can purchase an additional 50GB a month of capacity,” Larsen explained. “Each time that they reach that next level, they’ll be able to purchase another allotment. We’re never going to stop you from using data, we’re just going to charge you more if you exceed your monthly allowance. Before, we could cap you, there was no mechanism for them to purchase more.”

Mediacom did not frequently enforce its usage caps in the past except in instances where usage levels created problems for other customers. Despite Larsen’s assertion Mediacom would spent the overages collected from heavy users on broadband upgrades, Mediacom’s report to the SEC indicates broadband usage has never been a significant burden for the cable operator:

Our HSD and phone service costs fluctuate depending on the level of investments we make in our cable systems and the resulting operational efficiencies. Our other service costs generally rise as a result of customer growth and inflationary cost increases for personnel, outside vendors and other expenses. Personnel and related support costs may increase as the percentage of expenses that we capitalize declines due to lower levels of new service installations. We anticipate that service costs, with the exception of programming expenses, will remain fairly consistent as a percentage of our revenues.

Although Mediacom reported field operating costs rose 7.6%, much of that increase was a result of greater fiber lease and cable location expenses on its wireless backhaul business for cell towers and greater use of outside contractors. In the company’s latest 10-Q filing, Mediacom reports its revenues increased 2.9 percent in the past year while its costs rose only 1.5 percent. Mediacom’s revenues from its broadband division are even more rosy, rising 9% in the past year alone. In fact, broadband is the company’s highest growth residential business.

Many of Mediacom’s long-standing customers were initially promised they would be exempt from usage caps, with only new customers subject to usage limits. But Mediacom has unilaterally changed their minds, much to the consternation of some customers.

As of this afternoon, Mediacom is still promising customers usage caps only apply to new customers and those making plan changes.

“It is my belief a man’s word is gold and when Mediacom customers have been told for ages they were grandfathered in with no usage data charges unless they changed plans, that is how it is supposed to be,” said D. Gronceski. “I have explicitly turned down service increases in the past to stay on the unlimited usage plan originally offered by Mediacom […] so I get screwed twice, once for bandwidth caps and again because I’m not getting the services I would be getting if I had not refused the automatic increases.”

Other customers incensed about the new usage limits have called to cancel service only to be threatened with steep early termination fees.

“Why do I have to pay an early termination fee?” asked AustinPowersISU. “The way of billing for the service is changing and I do not agree to this method of billing. I should be allowed to terminate my service without paying a fee.”

A Mediacom social media team representative offered one suggestion for customers finding themselves quickly over their usage limits: upgrade to faster speed tiers at a higher price. As for complaints about the unilateral introduction of usage caps with overlimit fees, it’s tough luck for customers, on contract or off:

All Internet users will be held to the new terms of service and usage based billing as of Sept. 7, 2013.  There is no agreement to sign, no acknowledgement needed.  Continuing to utilize Internet services is acceptance of these changes. If for any reason you do not feel that your current service level meets your needs, let us know and we can have a representative contact you with further options.

[…] Per the posted terms of service and acceptable use policy, there has always been an established data consumption threshold (data allowance) to be enforced at Mediacom’s discretion.  With this change, we have clarified these methods of enforcement and have expanded the allowance to offer different levels of users different options.  We have notified the proper departments of possible additions, but these statements are and have been posted.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCRG Cedar Rapids Mediacom Going Usage Billing 8-21-13.mp4[/flv].

KCRG in Cedar Rapids reports Mediacom is switching to consumption billing for broadband service in September.  (2 minutes)

Waiting for Comcast and Verizon to offer cutting edge broadband to 620,000 Baltimore city residents and businesses appears to be going nowhere, so the city is hiring an Internet consultant to consider whether to sell access to its existing fiber network.

Baltimore officials spent at least a year trying to convince Google to launch its fiber network in the city only to be bypassed in favor of Kansas City, Austin, and Provo, Utah. Local unions and community groups have also attempted to embarrass the local phone company by publicly protesting Verizon’s lack of interest in expanding its fiber optic network FiOS in Baltimore. Comcast has proved a disappointment for many, with the latest technology going to other cities well before Baltimore gets improved service.

Baltimore’s Board of Estimates voted to spend $157,000 to hire Magellan Advisors to produce a cost-benefit analysis of expanding the city’s current fiber infrastructure to deliver better Internet access.

“I’m paying more here for lesser service, so I think one of the things we want to try to do is look at that, look at what [current companies] offer and try to incentivize people to offer more,” Baltimore’s chief information officer Chris Tonjes told the Baltimore Business Journal. “In the short term, we’re going to do a study. In the medium run, we’re going to try to renegotiate the cable franchise agreement. In the longer run we want to make it more profitable for providers to come in here and offer the expanded service.”

Like many cities, Baltimore already owns and operates its own fiber ring, built with public funds to support the city’s public safety radio system. Like many municipal institutional fiber networks, Baltimore’s fiber ring is underutilized. Public safety and other institutional users often use just a fraction of available capacity. Despite the fact such networks are often oversized, they are rarely controversial because they do not typically compete with commercial providers and are usually off-limits to the public.

As Baltimore prepares to update their existing fiber infrastructure, Magellan will study the implications of leasing excess capacity to third-party providers that can sell broadband access to private businesses and individuals. Even Comcast and Verizon would be welcome to lease capacity.

Neither company has shown much interest, and the proposal received a strong rebuke from Maryland Sen. Catherine Pugh (D-Baltimore City):

Pugh

For the most part, municipally-built broadband networks have the economic chips stacked against them and, where tried, have saddled local taxpayers with a mountain of debt and half-built networks that are then sold at fire-sale prices to vulture investors. Taxpayers in Provo, Utah, for instance, spent $40 million to build a relatively small and modest network only to sell it for $1 a few years later because they underestimated the massive costs of operating, upgrading and maintaining it.

But Provo is just the latest exhibit in a long pantheon of such failed initiatives that include Groton, Conn., ($38 million taxpayer loss) and Marietta, Ga., ($35 million taxpayer loss). Cities as large as Philadelphia, New York and Chicago and as small as Lompoc, Calif., and Acworth, Ga., have also tried and failed to launch their own broadband networks — or simply gave up.

Pugh’s editorial, published in both the Wall Street Journal and The Baltimore Sun, failed to disclose Pugh has received political campaign contributions from both Comcast and Verizon. More importantly, Pugh did not bother to mention she is the president-elect of the National Black Caucus of State Legislators, a group with close ties to both Comcast and Verizon Communications.

Among the “member corporations” of the NBCSL — companies who “weigh in” on the policies promoted by the group: AT&T, Comcast, CTIA – The Wireless Association, the National Cable & Telecommunications Association, Time Warner Cable, and Verizon.

Among the NBCSL’s roundtable members: AT&T, Comcast, Time Warner Cable, and Verizon

For the fourth consecutive year, Verizon hosted its Black History Month open house at the Reginald F. Lewis Museum in downtown Baltimore. This year, among Verizon’s special guests: Maryland Senator and president-elect of the National Black Caucus of State Legislators Catherine Pugh. Comcast has also opened its checkbook to the NBCSL. Among the contributions — $50,000 to form the “NBCSL/Comcast Broadband Legislative Fellowship” to “increase efforts to conduct research and develop solutions regarding broadband adoption among African Americans.”

Opening up a competitive, lower-priced broadband alternative owned by the citizens of Baltimore is not one of Pugh’s favored solutions to be sure.

The NBCSL has been more than a little preoccupied with the business agendas of its corporate members. The group’s glowing endorsement of the Comcast-NBCUniversal merger was so positive, Comcast continues to present the group’s submission urging approval of the merger on its website. In 2011, the NBCSL signed on to the campaign to get government approval of the now-dead merger of AT&T and T-Mobile USA, claiming it was in the best interests of African-Americans. Just this month, Time Warner Cable quoted the group’s comments on the dispute between the cable company and CBS on its website.

Stop the Cap! has refuted claims that public broadband is a financial failure in the past. Read our fact check here.

Although Comcast has been the dominant cable provider in Baltimore for years, its monopoly status is “de facto” only, because federal law prohibits exclusive cable franchise agreements. That being said, no other well-known cable provider will agree to offer service in competition with another. Overbuilders — small private entities that have business plans that depend on competing with incumbent operators, are few and far between. For most Americans, the only cable competition comes from satellite providers or the phone company. Satellite television lacks a broadband option and Verizon’s local broadband infrastructure is limited to providing DSL service.

Tonjes

Tonjes hopes the possibility of a public broadband alternative might shake up the city’s broadband landscape, but not every neighborhood is now passed by the city’s fiber ring.

Fracking traffic

The controversial practice of extracting natural gas from so-called “fracking” techniques is generating controversy of a whole new kind as workers are being fingered for interrupting phone and broadband service around the state of West Virginia.

Harrison and Doddridge County residents are irritated they keep losing Frontier phone and Internet service thanks to careless turns by large rig drivers that hook poles and telephone lines and tear them down.

“We’ve lost service three times so far because the trucks keep knocking down phone poles or rip the lines right off,” writes Stop the Cap! reader Jennifer J. “I guess looking for natural gas and keeping phones working at the same time just isn’t possible around here.”

“Since the oil and gas industry has had a boom, we have definitely seen an increase in cut cables and things of that nature in Harrison and especially Doddridge County,” Frontier Communications general manager Chip Van Alsburg told The Exponent Telegram.

Frontier would not reveal exactly how many phone line accidents have been caused by the workers, but Van Alsburg told the newspaper there were a “number of gas-industry-related incidents” recently.