House Speaker Nancy Pelosi, with fellow Senate Democrats and FCC Commissioner Jessica Rosenworcel (upper left corner), speaks at the announcement of a new bill that would codify net neutrality as federal law.

Democrats in Congress this morning unveiled a new bill that would effectively reinstate the 2015 Open Internet rules repealed under the Trump Administration’s Republican-dominated Federal Communications Commission.

The new bill, “Save the Internet Act of 2019,” was hailed by House Speaker Nancy Pelosi (D-Calif.) as a “pillar of economic opportunity” for the digital 21st century information economy and a bill that will stop internet service providers from raising broadband prices even higher.

“A full 86% of Americans oppose the Trump assault on net neutrality including 82% of Republicans,” Pelosi said at an announcement ceremony held in Washington this morning. “With the Save the Internet Act, Democrats are honoring the will of the people and restore the protections that do this — stop unjust discriminatory practices by ISPs that try to throttle the public’s browsing speed, block your internet access, and increase your costs. This is about freedom, this is about cost.”

FCC Chairman Ajit Pai announced his intention to repeal net neutrality in 2017, and despite tens of millions of letters protesting that decision, Pai began rolling back net neutrality rules last year.

The three-page bill was co-sponsored by 46 Democrats in the U.S. Senate. It codifies the language from the FCC’s 2015 Open Internet rules as a standalone federal law, no longer subject to reinterpretation or dismissal by the FCC. A companion bill is expected to be introduced in the House on Friday.

Senate Minority Leader Chuck Schumer (D-N.Y.) implored Senate Republicans to get on board with Democrats to support the re-establishment of a level playing field on the internet, criticizing their lack of support during last year’s effort to resurrect net neutrality.

“Unfortunately, all but three Senate Republicans voted on behalf of the special interests,” Schumer said, noting the measure still passed the Senate in 2018 but ultimately was shelved by the then-Republican controlled House. “So now we have a Democratic House, and Republicans will have a second chance — there are second chances — to right the Trump Administration’s wrong.”

Here’s the Save The Internet Act of 2019 that nearly every Senate Democrat joined me in introducing today. 3 pages that will restore #NetNeutrality. Let’s pass it and make the internet free and open again. #SaveTheNet pic.twitter.com/BCYtcmcMe3

— Ed Markey (@SenMarkey) March 6, 2019

Net neutrality has faced multiple legal challenges and intense lobbying by the telecommunications industry, especially by large cable and phone companies that generally oppose the concept, claiming it would impede management of their networks and block the creation of new innovative services that could deliver extra bandwidth on demand. Telecom companies also complain content providers like Netflix unfairly utilize their networks without fair compensation.

House Speaker Nancy Pelosi and her fellow Senate Democrats introduce the Save the Internet Act of 2019, a bill re-establishing net neutrality as federal law. (31:35)

Comcast is giving some of its customers a way to get back unlimited data for their home broadband connection without having to spend an extra $50 for an unlimited data add-on.

The cable operator is offering customers in parts of its Central Division its xFi Advanced Gateway — a combination cable modem and router — that comes bundled with unlimited data, xFi Advanced Security, and a Home Wi-Fi Assessment for an extra $15 a month. That amounts to $4 a month more than the cost of renting Comcast’s traditional xFi Gateway buys and also buys you a return ticket to unlimited internet service.

Comcast has also offered some new customers unlimited service in time-limited promotions, but this seems to be permanent, assuming Comcast offers it in your area.

The xFi Advanced Gateway with unlimited data appears to have quietly launched last fall, but so far it has not expanded to Comcast service areas outside of its Central U.S. division, which includes (Heartland) Michigan, Indiana, Kentucky and Arkansas, (Big South) Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, and Virginia, plus the state of Florida and the greater Chicago area. Comcast says it has 17 states in its Central Division, but we could not find a definitive list that includes the three other states not listed here.

Interested customers will have to contact Comcast to determine if their area qualifies for this offer.

If you are a Comcast customer already paying an extra $50 a month for unlimited data, this could save you a considerable amount of money, assuming you live in a qualified area and don’t mind using their gateway.

Windstream Holdings, Inc. filed bankruptcy this afternoon, citing its inability to cover $5.8 billion in outstanding debt.

The independent phone company, which provides legacy landline and broadband service to around 1.4 million customers in 18 states, filed voluntary to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, citing a judge’s decision almost two weeks ago that the company defaulted on its obligations.

“Following a comprehensive review of our options, including an appeal, the Board of Directors and management team determined that filing for voluntary Chapter 11 protection is a necessary step to address the financial impact of Judge Furman’s decision and the impact it would have on consumers and businesses across the states in which we operate,” said Tony Thomas, president and chief executive officer of Windstream. “Taking this proactive step will ensure that Windstream has access to the capital and resources we need to continue building on Windstream’s strong operational momentum while we engage in constructive discussions with our creditors regarding the terms of a consensual plan of reorganization.”

Windstream received a commitment from Citigroup Global Markets Inc. for $1 billion in debtor-in-possession (“DIP”) financing. Assuming a bankruptcy judge approves of the arrangement, Windstream claims this stop-gap financing will allow it to run its current business as usual.

Windstream provides residential service in 18 states including: Alabama, Arkansas, Florida, Georgia, Iowa, Kentucky, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina and Texas.

The company claims it was forced into bankruptcy after a judge found Windstream’s attempt in 2015 to shift its valuable fiber optic network assets off its own books into a sheltered real estate investment trust (REIT) named Uniti Group violated the rights of bondholders which hold some of Windstream’s debt. Those debts are backed, in part, by the valuable fiber optic assets Windstream had  spun them off to a new entity. In fact, Uniti’s fiber optic assets are essential to Windstream’s viability. The phone company has the exclusive right to use Uniti’s fiber assets and two-thirds of Uniti’s revenue comes from Windstream, making the two companies inseparable.

Windstream’s bankruptcy is a concern to investors of both companies because it will allow Windstream to renegotiate the terms of its contract with its fiber partner. Windstream customers are equally concerned because the phone company needs Uniti’s network to manage its broadband service.

The judge’s decision on Feb. 15 to declare the arrangement inappropriate was reportedly a shock to the investor community, which has made money buying repackaged corporate debt in the form of bonds for years. Corporations have issued bonds to retire older debt, while giving investors a piece of the action. Since investors are making money, they typically do not complain too loudly about the persistence of corporate debt, frequently repackaged in new bonds. As a result, companies can hold onto more cash used to pay shareholder dividends and executive compensation instead of permanently retiring debt.

Aurelius, a hedge fund, is making some of its money scrutinizing these arrangements looking for contract violations such as the Uniti spinoff. When it finds one, it takes a stake in the company and then threatens to sue as a harmed investor. Based on the judge’s decision, Aurelius won a judgment that will effectively empty the pockets of many of the bondholders and investors that could lose a lot of their investments because of the bankruptcy. If the hedge fund is going to actively seek other questionable arrangements or violations of bondholders’ rights at other companies, it could cause an earthquake in an investment community that has quietly conspired with companies to generate transactions that enrich investors while allowing companies to carry more debt.

Customers could end up covering some of the costs of today’s bankruptcy filing if Windstream files a plan with the Bankruptcy Court promising to raise prices to help it demonstrate ongoing viability.

Windstream’s Thomas complained the phone company is little more than a victim of a predatory hedge fund out to enrich itself at the expense of others.

“The company believes that Aurelius engaged in predatory market manipulation to advance its own financial position through credit default swaps at the expense of many thousands of shareholders, lenders, employees, customers, vendors and business partners,” Thomas said. “Windstream stands by its decision to defend itself and try to block Aurelius’ tactics in court. The time is well-past for regulators to carefully examine the ramifications of an unregulated credit default swap marketplace.”

Santa Broadband: Ajit Pai’s magical world of broadband

God bless deregulation and your local phone and cable companies for making American Broadband Great Again.

That’s the message FCC Chairman Ajit Pai hopes will be the take away in the forthcoming 2019 Broadband Deployment Report — a highly dubious and over optimistic assessment of America’s rural broadband landscape.

“For the past two years, closing the digital divide has been the FCC’s top priority,” Chairman Pai said. “We’ve been tackling this problem by removing barriers to infrastructure investment, promoting competition, and providing efficient, effective support for rural broadband expansion through our Connect America Fund. This report shows that our approach is working. But we won’t rest until all Americans can have access to broadband and the 21st century opportunities it provides to communities everywhere.”

Except closing the rural-urban broadband gap has been a FCC priority for more than two years, and was a particularly high priority for the previous administration, which devoted a large amount of controversial stimulus funding after the Great Recession to internet expansion during the Obama Administration. In fact, Chairman Pai repeatedly claimed credit for broadband expansion projects that were funded by the previous administration, while at the same time criticizing the FCC under former Chairman Thomas Wheeler for harming investment in broadband with the enforcement of net neutrality.

The FCC continues to rely on dubious and flawed data to produce its reports — unverified data typically volunteered by the country’s phone and cable companies. The FCC has been frequently criticized for relying on inaccurate broadband availability maps, taking providers at their word on broadband speeds that fail to materialize in the real world, and reporting expansion projects that do not directly benefit consumers.

Pai’s office this week released a press release attempting to conflate broadband gains to his deregulatory policies and the banishment of net neutrality.

“The private sector has responded to FCC reforms by deploying fiber to 5.9 million new homes in 2018, the largest number ever recorded. And overall, capital expenditures by broadband providers increased in 2017, reversing declines that occurred in both 2015 and 2016.”

But Pai does not offer any evidence to back up those claims. In fact, as Stop the Cap! has reported, many of the country’s largest telecom companies have been cutting capital expenditures, many initiated as part of system upgrades to convert to digital cable television or to increase the amount of fiber optics to increase cable system reliability — neither relevant to the debate about net neutrality. This year, Charter Communications has announced a dramatic drop in spending (despite the repeal of net neutrality) because their long-planned system upgrades surrounding the retirement of analog cable television are now complete. Charter also had its merger agreement with Time Warner Cable revoked in New York for failing to meet its rural broadband commitments in that state.

Comcast cut spending by 3% because it bought fewer set-top TV boxes in light of cord-cutting customer losses. Verizon, which has been aggressively promoting its forthcoming 5G millimeter wave wireless network, slashed spending from $17.2 billion in 2017 to between $16.6-17 billion last year, and a significant sum of that money was earmarked for 5G buildouts in urban areas, not expanding rural internet. AT&T’s capital expenditures for 2019 are not expected to move much, placed in the $23 billion range for 2019, just a little more than last year. But AT&T is expecting to be reimbursed $1.6 billion by the federal government for AT&T’s FirstNet public safety network buildout, and much of its other spending is targeting its wireless business, including a plan to launch 5G services in 19 cities this year. That means less money for AT&T’s wireline network, including fiber broadband for homes and businesses.

Pai’s claims about the increased availability of broadband, at higher speeds, comes largely at similar incremental rates to progress under the Obama Administration. In New York, which is seeking to approach near universal broadband coverage, what moved the needle the most was a large sum of funding available to subsidize rural broadband expansion. The availability of substantial financial assistance from the state government, which some described as corporate welfare, appeared to be the most effective broadband expansion motivator for an industry Pai praised in his press release, not deregulation or the repeal of net neutrality.

Investors are not buying into the substantial hype surrounding the forthcoming 5G revolution and many remain unconvinced about the benefits of spending billions of investor dollars to deploy the next generation in wireless.

A survey by telecom analyst McKinsey & Co., picked up a clear drag on proposed spending, especially outside of North America, as carriers are finding investors reluctant about the business case for 5G technology.

The survey found 60% of wireless operators cited selling investors on the merits of 5G to be their greatest challenge. Only 25% were confident they could successfully prove a substantial return on investment for shareholders who typically want short-term results. Investors are demanding detailed evidence that 5G networks, the most costly requiring large fiber optic networks and neighborhood small cell antennas, will pay off with increased revenue and customer demand. Unlike earlier cellular standards which required incremental upgrades usually on existing cell towers, the fastest iteration of 5G will require providers to construct costly new fiber networks with a very large number of short-range antennas expected to be placed on top of utility or light poles.

Customer demand for 5G is anticipated to be low until new devices are introduced capable of connecting to it, and investors already recognize consumers are increasingly delaying device upgrades since the industry dropped two-year service contracts with device subsidies. Ongoing upgrades to existing 4G LTE networks may ultimately dampen demand even for less costly 5G networks that will be deployed on existing cell towers. McKinsey’s survey found less than 35% of respondents are planning quick launches of 5G on gigabit-speed capable millimeter wave spectrum, citing the high cost of deploying small cell networks.

“Until th[e business case emerges], most operators will tread cautiously, leveraging 5G for near-term objectives and waiting for a clearer view on the use cases’ economics to accelerate,” the McKinsey report concluded. “Given the expense required to prove those significant use cases, it could be an uncomfortably long wait. And for operators in countries that don’t see 5G as a matter of strategic and economic importance, there is a greater risk of falling behind.”

In early 2019, most network operators will focus on network planning and funding, with the first significant wave of launches expected in the U.S. coming later this year. Just over half of U.S. operators plan to have “large-scale 5G deployments” completed by late this year, and U.S. carriers are the most optimistic 5G can make good business sense, at least for some applications. Other U.S. carriers expect their networks to launch by the end of 2022. But in neither case are those launches expected to be widespread across the country. Competing with cable and phone company internet with fixed wireless service is also a non-priority for most operators.

“At least at the outset, the majority see enhanced mobile broadband and the Internet of Things (IoT), rather than fixed wireless access or mission-critical applications, as the most prevalent applications,” McKinsey’s survey found. Among early potential applications are smart utility meter connectivity, traffic sensing, and connected public infrastructure like lighting and traffic control signals. Giving consumers a way out of choosing between Verizon and Comcast for home internet service is not going to be an early priority for companies like AT&T. In fact, starting a price war is the last thing investors want to see.

“Although commercially in its infancy, 5G technology is ready, and in most markets its presence will be felt from 2020 on,” McKinsey’s report states. “Yet the fact that commercial models are not ready cannot be minimized; the business case is marginal, and the investments to enable new business models are not currently planned.”

McKinsey believes what will ultimately drive a gradual rollout of 5G technology is network congestion which can no longer be managed through existing traditional cell tower networks, known as “macro sites.”

“In rural and suburban areas, as well as along roadways, operators can handle increased traffic simply by densifying existing networks with macro sites,” McKinsey shared. “In many highly populated urban areas, by contrast, they’ll need to rely on small-cell solutions for two reasons: a higher concentration of traffic, as measured by traffic load per square kilometer, and the use of higher spectrum bands (greater than 3 gigahertz).”

But making the jump from the traditional large cell tower to a network of small cells scattered around neighborhoods will require a great deal of money. Operators will need to build fiber optic connectivity to each small cell, which can be managed either with a newly constructed fiber project or leasing existing fiber optic networks, presumably from cable operators which already have a significant fiber presence. In either scenario, rural areas will largely be left out, because all-important network traffic density is generally inadequate to support the business case for 5G, and cable operators are unlikely to have fiber networks available to lease in those areas.