Verizon CEO Lowell McAdam telegraphed his plans to dump rural landline service last summer.

You should believe Verizon Communications CEO Lowell McAdam when he says he intends to end wired telephone and broadband service for areas that are simply not economically feasible for fiber upgrades. McAdam’s grand plan is now coming true for customers in parts of Florida and on Fire Island, N.Y.

Last summer, Stop the Cap! covered McAdam’s comments to Wall Street investors (that are always the first to know) at the Guggenheim Securities Symposium:

“In […] areas that are more rural and more sparsely populated, we have got [a wireless 4G] LTE build that will handle all of those services and so we are going to cut the copper off there,” McAdam said. “We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there and then I can focus the investment on that to improve the performance of it.”

The writing is already on the wall:

1. Verizon has been penalized and criticized in several states by public utility commissions for the ongoing degradation of its copper network. Verizon sees further investment in copper technology as throwing good money after bad, but spending millions on additional fiber upgrades isn’t appealing either. The result is deteriorating service. From downtown Manhattan to New Jersey to Maryland, D.C. and Virginia, Verizon’s service failures have left customers frustrated and sometimes waiting weeks or months for repair crews to turn up to restore basic phone service. Even more dangerous, Verizon was to blame for significant 911 network failures near the nation’s capital. Post Sandy, there are still sections of lower Manhattan without phone service nearly five months after the storm struck. Five months.
2. Verizon sold off telephone service in northern New England several years ago to FairPoint Communications, knowing full well Verizon never had an interest in upgrading any part of Vermont, New Hampshire or Maine to fiber service. In many smaller former GTE telephone areas too small to successfully argue a case for return on investment, Verizon decided selling those territories off was the best option. Hawaiian Telcom and Frontier Communications now own many of those former-Verizon territories.
3. Verizon has decreased marketing its wired DSL service and stopped selling it altogether to customers who want broadband-only service. That seems counter-intuitive for a company that recognizes future revenue possibilities come primarily from broadband and data services.

Traditionally, customers reporting trouble on a phone line get a visit from Verizon technicians who track the problem down and repair it. But Verizon no longer wants to spend money fixing copper wire-related problems. Customers reporting chronic phone static or outages are now being asked to abandon their traditional landline service instead:

• In areas where Verizon FiOS fiber is available, the company disconnects the customer from copper service and switches them to the FiOS fiber network. This also provides future marketing opportunities, pitching broadband and television service to accompany a customer’s home phone. 
• In areas where fiber upgrades are not forthcoming, the company now proposes to disconnect the customer in favor of Voice Link, a wireless home phone replacement. This also opens marketing opportunities for Verizon Wireless to pitch cell phones and wireless Internet service.

The end of an era.

Customers who live in Florida currently have a choice. During the trial, they can switch to Voice Link or keep their current landline service. On Fire Island, just south of Long Island, customers will not have that choice. Verizon is testing the will of New York regulators asked to allow the company to gradually abandon landline and wired Internet facilities on the island. Customers previously knocked out by Hurricane Sandy have no alternative — switch to a wireless option like Voice Link or lose  telephone service. As the network degrades further on the island, it is a safe bet more Fire Island residents will find themselves confronted with a wireless future courtesy of Voice Link.

Verizon is careful to note its Voice Link service comes at no additional cost to customers — their phone bills will remain the same, at least for now. But the transition includes several important caveats:

1. Voice Link is not subject to state or federal oversight or quality of service consumer protection laws that apply to traditional landline service;
2. The customer is responsible for providing an indoor space to mount the equipment (hardly unobtrusive, the receiver is eight inches tall) and provide electric power and AA batteries for battery backup;
3. Voice Link does not work with any data services including broadband or dial-up Internet, faxing, medical monitoring, alarm systems, etc. You will be pitched an expensive Verizon Wireless data plan if you want Internet access;
4. During recent severe storms, copper landline networks often continued to work but cell phone service failed over wide areas because of call congestion and  long-term power outages. Similar failures will leave Voice Link non-operational;
5. Voice Link customers lose DSL service and may have little chance of getting it back once they switch.

Verizon’s solution for Fire Island represents the long-term vision of McAdam coming to fruition. Complaining customers have not been able to persuade the company to abandon its plan, but New York State regulators might, if the issue gets enough attention.

In states with less aggressive regulators, Verizon could implement its Fire Island strategy nearly at-will, especially in rural service areas. Verizon’s plan differs little from that of AT&T, another major service provider seeking permission from regulators to abandon rural landline networks. AT&T is betting the Federal Communications Commission will approve AT&T’s “network transition plan” for all of its rural customers. Verizon is starting smaller, gradually implementing its transition under the radar of many state and federal officials.

AT&T wants to wind down its own rural landline network.

So why adopt Voice Link — a wireless solution, when copper wire network repairs remain a viable option?

The reasons are simple:

1. Voice Link is cheaper to run and maintain as a wireless service and uses existing Verizon Wireless cell towers;
2. Verizon can further cut their unionized workforce that maintains the company’s landline network;
3. Wireless products escape regulatory oversight;
4. The company can push customers to wireless data products that cost far more than wired DSL broadband service;
5. Verizon doesn’t have to upgrade the rest of their network to fiber.

Customers in Verizon service areas should appeal to regulators and their elected officials to stop the abandonment of wired infrastructure. Verizon argues maintaining its network doesn’t make sense when customers are fleeing their landlines. But rural customers are not disconnecting broadband service that travels across the same network. Even basic DSL is coveted in rural Verizon territories where Internet access remains unavailable. Just about everyone wants the option of FiOS fiber, perhaps the most coveted network upgrade around until Google announced its gigabit fiber project in Kansas City.

Nobody wants Verizon or AT&T to keep up its copper wire facilities indefinitely. But a better solution would be a regulatory mandate that requires Verizon and AT&T to gradually replace antiquated and failing copper infrastructure with fiber wherever possible. It is more than possible to do this on Fire Island. Verizon’s service area in Florida is hardly rural either. Verizon Florida (formerly GTE Telephone) serves Tampa-St. Petersburg east to Lake Wales, a major metropolitan region in central Florida.

What is best for shareholders should not be the final determining factor for an important utility service. If customers prefer the option of Voice Link for home phone service, there is nothing wrong with that. But wireless service as the only option customers have for broadband service? Not at Verizon Wireless’ prices.

Verizon officials have announced they will abandon their damaged wireline network serving several hundred permanent residents and businesses on Fire Island, replacing voice telephone service with a wireless system called Voice Link critics say will end high-speed Internet service and hurt business.

Fire Island’s landline network has been barely functional since Hurricane Sandy struck last October. Verizon has yet to make significant repairs, leading to ongoing complaints from residents who live on the island year-round. Verizon’s wish to eventually abandon its wired network facilities entirely has created concern among island officials and public safety agencies, noting the summer population on the island swells well into the thousands.

Verizon’s plan may leave businesses unable to process credit card transactions and prevent residents from getting back DSL broadband service they lost during the storm, much less get it in the future. For some, it represents turning the clock back to the days before Internet access.

“Verizon has given us a dial tone basically,” Ocean Beach Mayor James Mallott told Newsday. “But as far as DSL, ATMs, point-of-sale systems, all the rest of that stuff, we’re pretty much on our own.”

Fire Island resident Meg Wallace notes Verizon’s plan has not gone unnoticed by the New York State Public Service Commission. The PSC is currently monitoring the situation and invites comments from interested parties.

“Right now, only Saltaire has filed a formal complaint with them, along with one village’s fire official,” Wallace reports. “It is easy to register a complaint either by filling out a complaint form on their website or calling the NYSPSC directly at (800) 342-3377. They are concerned about public opinion, so the more calls and formal complaints filed by both home and business owners the better.”

Verizon officials have defended their decision, claiming a wireless system is more robust and can withstand severe weather better than a wired network. Another reality impacting the decision is the ongoing loss of landline customers. Verizon, the sole provider on the island, has lost 25 percent of its landline business in the last two years. The company claims 80 percent of Verizon-handled calls to and from the island are through Verizon Wireless.

Fire Island

Verizon told local officials that Cherry Grove and points east still have undamaged fiber optic and copper lines that should be able to work as usual this summer and will be left in place for now. On the west end of the island  from Kismet to Sailor’s Haven, the damage was more significant and Verizon has announced its intention to abandon wired service.

Although west end customers will be scheduled for Voice Link installations starting in April, those on the east side should not get too comfortable with their wired service because Verizon has announced it will not upgrade or make future significant repairs to its wired infrastructure going forward. When the remaining landline facilities eventually fail, affected customers will also be moved to Voice Link.

How It Works

Starting April 1st, customers calling with service problems on Fire Island will be redirected to special operators trained to pitch customers the Voice Link service as a replacement. These agents will also handle billing adjustments and drop phone package features Voice Link does not support. If the customer only wants phone service, Verizon will schedule an installation date for Voice Link. A technician will arrive with a wall-mounted box about 8″ high that will be installed in the room that provides the best reception from a nearby Verizon Wireless tower. The box will then be connected to your home telephone wiring and a nearby power outlet so existing telephones will work once again. The box has battery backup powered by customer-installed and maintained AA batteries.

If a customer also had broadband service with Verizon, they will not be getting it back. Instead, an agent will attempt to sell the customer a Verizon Wireless mobile broadband package at a significantly higher cost. For example, a 10GB monthly usage plan added to an existing Verizon Wireless account will cost an extra $20 a month for the “Mi-Fi” mobile hotspot device fee and $100 a month for the data package. Verizon DSL in comparison offered unlimited access for $30-50 a month, depending on the plan selected and any promotional discounts.

Verizon said it is currently improving reception of its 4G LTE network in areas worst-affected by storm damage.

Voice Link is a voice-only product. It does not support broadband, telephone modem connections, faxing, alarm monitoring, home medical monitoring, certain communications equipment for the impaired, or other data services including credit card processing. It does support E911, which gives detailed address information to a 911 operator.

Verizon’s Voice Link also creates a problem for some satellite dish customers. Some satellite companies need a landline connection for handling pay-per-view orders. That data connection does not work with Voice Link either.

Your voice line bill will remain the same if you switch to Voice Link. But customers will lose the benefit of oversight from the Public Service Commission if things go wrong. Voice Link, unlike traditional landline service, is an unregulated service not subject to government oversight.

Voice Link: Coming Soon to Your Area?

Verizon’s Voice Link service is by no means intended to be used only on Fire Island.

Voice Link is being trialed in Florida (Project Thunder) as a landline replacement option for use in areas where Verizon’s copper network has deteriorated and the company is unwilling to spend money on fiber upgrades. If successful, Verizon intends to switch a growing number of Verizon customers nationwide outside of FiOS fiber areas to the wireless service when they report trouble with their phone lines.

Local 824 of the International Brotherhood of Electrical Workers provided insight when one of their workers attended a training class and participated in a ride-along with Verizon technicians installing the service in Florida.

John Glye reports that Verizon considers a customer a candidate for Voice Link if they have chronic phone line problems and only want traditional voice telephone service.

Currently, if customers in Florida are persuaded to switch, a migration order is created. If they want to keep the service they have, a traditional copper trouble ticket will be created and repair crews will be dispatched.

The unit is about eight inches tall and has the following connections:

• 2 RJ 11 ports
• Antenna
• Voice Message indicator
• Signal strength indicator
• Power Button
• Power Port

Installation time is about 45 minutes. The unit must be mounted inside and the customer must supply power and a safe place for the unit. The customer’s existing copper line connection from the home to the pole is disconnected/removed. In the ride-along Glye participated in, he reports the customer was pleased with the outcome, having reported constant static aggravated by rain on her copper landline. After the wireless service was installed, the static was gone and the call quality was good.

Burdette: Won’t release a publicly funded report to a reporter he considers “dangerous.”

A damning report criticizing West Virginia’s use of $126.3 million in federal stimulus tax dollars to expand broadband in the state may never be made public because it might “be embarrassing to some people.”

State taxpayers funded the $118,000 review but they cannot read the results because Gov. Earl Ray Tomblin’s administration has declared the report confidential.

Once again, the Charleston Gazette’s Eric Eyre was promptly on the case asking Commerce Secretary Keith Burdette why the state wants to keep the findings secret.

“The documents may be embarrassing to some people . . .  . Embarrassing because it was someone’s opinion,” Burdette told Eyre. “It was a specific document, citing specific companies, and making very specific suggestions to me.”

The newspaper did glean some information from its Freedom of Information request to the state — it learned of the existence of the consultant’s document and his criticism of some of the players involved in the broadband expansion effort.

But Burdette won’t name names, other than to say the consultant wasn’t targeting the governor’s office for criticism. Possible companies that could be in the report include various equipment vendors and consultants tied to technology companies including Verizon and Cisco. It could also target Frontier Communications, the largest grant recipient.

Burdette decided on his own he didn’t like the report’s findings and dismissed requests to release copies to the public because he claimed it was an “internal memorandum” not required to be released under state law.

“”There’s some criticism of the players in there that I don’t accept,” Burdette told the newspaper. “I had the memo drafted, but I didn’t use it. It was assumptions and making recommendations. At the end of the day, I didn’t agree with their assessment.”

That decision promptly sparked West Virginia’s House Minority Leader Tim Armstead (R-Kanawha) to demand the release of all documents related to the taxpayer-funded broadband stimulus program, noting the federal government administered program requires grant recipients to be open and transparent about how taxpayer funds are spent.

A secret report about that very subject does not meet that requirement, according to Armstead.

“When you have a project, and you’re talking about millions of dollars in spending, and there are questions about whether those funds were efficiently spent, the public has a right to know about it,” Armstead told the Gazette. “It’s insulting to tell the public they have to pay for something and they can’t see it. The public paid for that report.”

Armstead has introduced a bill that would drop the exemption from the Freedom of Information Act Burdette cited to keep the report secret.

When Eyre asked Burdette why he won’t release the report, Burdette responded, “Because you’re dangerous.”

Last week, Tomblin’s administration abruptly cancelled a statewide “broadband summit,” fearing ongoing scrutiny of the broadband funding project and how the money was spent would be the main topic of discussion.

Find the Frontier Fiber

After spending tens of millions of dollars in taxpayer money to wire more than 500 miles of fiber broadband cable in public buildings across West Virginia, Frontier is allegedly withholding detailed engineering maps detailing the new fiber network from its competitors.

The Charleston Gazette’s Eric Eyre has kept a close watch on broadband stimulus funding in West Virginia, and the circus of controversy surrounding how the money has been spent.

But now that Frontier’s taxpayer-funded institutional fiber network has been built, efforts to install Internet connections to end users has become complicated… unless you choose Frontier Communications as your vendor.

State Broadband Deployment Council member Jim Martin from Citynet has been a vocal critic of the broadband spending priorities in West Virginia for several years. He’s particularly irritated taxpayer funds have been effectively diverted to Frontier to build a modern fiber network that mostly benefits Frontier and its shareholders. Now his company wants to see if it can use the new fiber network to connect more West Virginians to fiber Internet service, but Martin claims he has been given the runaround by Frontier, state officials, and a broadband council that includes a Frontier executive as a member.

“A number of providers have inquired about where that fiber is located so they can expand broadband to customers,” Martin told the Gazette. “The engineering maps are important so they will know exactly where the fiber is connected, and so they can tap it.”

Only Martin cannot get the detailed engineering maps he needs. Eyre describes the high-tech equivalent of “button, button, who’s got the button?”

Martin started asking about the maps eight months ago. State officials overseeing the broadband expansion project promised to check into his request, but they haven’t released the engineering maps.

On Wednesday, Frontier executive Dana Waldo, who also serves on the Broadband Deployment Council, told Martin to request the maps from the state “broadband grant implementation team,” which heads the broadband expansion project.

“Those are requests that have to go to the implementation team,” said Waldo, who heads Frontier’s West Virginia operations. “It provides for a consistent process.”

However, Gale Given, who serves on the project team and heads the state’s Office of Technology, referred Martin to Frontier.

“If you need detailed engineering maps,” Given said, “it’s my understanding the [broadband project] team is not going to produce those.”

Given noted that less-detailed maps are available on the state’s broadband project website.

“If you need a specific area,” she said, “tell us the specific area you need.”

Martin says the maps on the website mentioned are hand-drawn Google Maps, unsuitable to work with because they lack detail.

AT&T has new wireless data plans you can’t afford.

Saving money takes a back seat to AT&T’s newest supersized Mobile Share data packages reported by The Verge. AT&T’s goal of monetizing data usage for their most ravenous wireless data users means a 900 percent price hike from the days of the company’s $30 unlimited data plan. Here are the newest plans:

• 30GB data usage = $300 a month
• 40GB data usage = $400 a month
• 50GB data usage = $500 a month

Unlimited texting and talking are included in these prices, but the individual device fees for each smartphone, tablet, or wireless modem are not.

AT&T’s pricing is relevant to rural customers who face an imminent threat of losing landline phone and broadband service should the phone company win the right to abandon its copper wire network in favor of wireless-only service. A family watching Netflix consuming 45GB of usage on AT&T’s DSL service pay as little as $15 a month for broadband. With AT&T’s wireless Internet service, that same family will spend a prohibitive $500 a month.