When the Berkshire Eagle asked readers to test their internet speeds and share the results, along with opinions about their broadband options, the newspaper hit a nerve.

Over 400 readers in western Massachusetts promptly responded, many with scathing stories about slow speeds and unresponsive customer service.

The newspaper preferred to call it “tortured testimony.”

“It is slow and getting slower,” wrote Bob Rosen, from Otis. “Many times it just says, ‘not responding.'”

“It” is Verizon’s DSL — broadband for the masses of landline customers in Massachusetts unlucky enough not to have FiOS fiber to the home service available before Verizon decided to stop expanding its copper-replacement fiber network. For the last seven years, Verizon’s DSL has remained more or less “as-is,” with no significant service improvements or apparent expansion effort.

Unfortunately, as customer demand for bandwidth grows, performance drops unless providers continually invest in new equipment to manage demand appropriately. Customers in western Massachusetts report Verizon seems to be making do with what they already have, and speeds have suffered.

Douglas Mcnally of Windsor, a member of the Select Board and consultant whose job depends on a good internet connection told the newspaper he really doesn’t have a consistently reliable connection. One test showed a speed of 2.82Mbps, but a second one returned a speed result of 0.64Mbps. Barbara Craft-Reiss from Becket has a connection also topping out at 0.64Mbps.

In Dalton, a customer that repeatedly complained about his 1.5Mbps speed was told that was as good as Verizon DSL was going to get.

“I have had several communications with Verizon and they always say not to expect any more,” the reader told the newspaper. “At times it is so slow the web page expires before it comes up. There are many times it does not work at all.”

On August 13th, 2011, The WiredWest Cooperative in western Massachusetts was officially formed by charter member towns. The project has gained some town, lost some others as the region works towards faster broadband instead of waiting around for Verizon, Comcast, and Charter.

Verizon seemed to echo its “done with DSL” attitude to Robert Rosen who has subscribed since the 1990s at his home in the Otis Woodlands area.

“In the beginning, the signal was very strong. Every six months I would call Verizon and see if I could get a stronger signal. Sometimes it was boosted, however in the past several years I have been told by Verizon I am at max strength,” Rosen said.

But at least he could subscribe. Verizon customer service agents have warned some customers if they drop DSL service, they cannot come back. Bob Johnson dropped his 2Mbps Verizon DSL account — the one he inherited under the previous account-holder’s name.

“I was told that if I cancelled the previous owner’s account, I would not be able to get an account at all,” Johnson reported.

A Verizon spokesperson claimed DSL is still available in Verizon’s FiOS-less service areas, as long as the customer’s line passes a loop qualification test. Only ISDN has been decommissioned in certain service areas, the spokesperson claimed.

But Stop the Cap! has heard from countless Verizon customers who share stories of deteriorating performance and disinterest in improving service, and customer service agents won’t even sell DSL to customers without bundling landline phone service.

“They are just letting the old telephone network fall apart piece by piece,” claims John Landis, a Verizon DSL customer outside of Buffalo, N.Y. “The investment is just not clear anymore. When is the last time Verizon introduced a new service on their wired network, such as faster internet speeds? We’re living with a company where time has stopped, unless you are on Verizon Wireless.”

Verizon’s apparent disinterest in selling DSL broadband has proved to be a significant benefit for cable operators that continue to take market share from the phone company. Strategy Analytics reports cable companies added more than three million new subscribers from 2015 on. Cable operators now have a 62% broadband market share, compared to just 15% for DSL, a percentage that has dropped for years. (Fiber broadband now accounts for a 23% share.)

“The telco operators haven’t been able to shake off the losses of DSL subscribers, but we expect to see increased fiber deployments in the coming quarters, which should help AT&T and Verizon return to growth,” Jason Blackwell, director of Strategy Analytics’ Service Provider Strategies Service said last summer. But much of that growth seems to be targeted for urban and suburban areas, not rural areas where DSL is often the only available broadband technology.

Cable broadband is generally not available in rural areas.

Despite telco claims that wireless broadband alternatives will eventually solve the rural broadband problem, Blackwell is skeptical.

“The reality is fixed broadband is continuing to grow in the U.S., and not being replaced by mobile broadband as some have reported,” he claimed. “The cable operators are driving the growth with increased speeds and multiplay bundles.”

The availability of a cable competitor has helped some in western Massachusetts resolve their broadband problems, but only in communities where cable operators exist. Many western Massachusetts residents are still waiting for community-owned gigabit-capable fiber broadband through the WiredWest project.

In late 2015, politics from the governor’s office put a “pause” on all state “last-mile broadband” projects and a sudden policy shift required each town to own its own network infrastructure despite the widely expressed desire on the local level for a regional approach. More than a year later, the project to improve broadband across the western half of the state is still trapped by bureaucratic interference, allowing the state’s big cable and phone companies to continue the status quo with no alternatives on the immediate horizon.

As of late December, the project is gathering support for sending a resolution to state officials reaffirming their request to allow local communities involved in the project to determine their broadband future without onerous requirements from the governor’s office.

Without WiredWest, the future is not good. Unless Verizon changes its mind about broadband deployment in western Massachusetts or cable operators Charter and Comcast spontaneously expand their service areas, readers of the Berkshire Eagle can expect more of what staff writer Larry Parnass summed up in two words: extreme disappointment.

Goei

The CEO of Altice USA took time away from his luxurious homes in Switzerland and New York this week to sit down with concerned middle and working-class Cablevision employees at a meeting held at an unassuming company garage in the Bronx.

Dexter Goei has worries of an organized workforce on his mind. A recording of the meeting provided to Stop the Cap!, showed Goei spent most of his time trying to convince employees they could trust him to protect their future employment at the cable operator.

Since Altice acquired Cablevision in the U.S., the French media have criticized the ‘naiveté of American regulators’ that largely accepted the promises and commitments of the rapidly growing international cable and wireless company at the same time Altice was regularly accused of reneging on the promises it made to regulators in Europe, especially in France. The company has been fined at least twice for breaking those commitments.

Altice’s entrance into the United States began with the acquisitions of Suddenlink, a relatively small cable company serving forgotten small cities in states like Texas and West Virginia and the should-have-been-acquired-by-Comcast-or-Time-Warner-Cable-years-ago oddity Cablevision, which made money for its founding family the Dolans for decades, selling cable mostly in suburban downstate New York.

In America, those acquiring a rival operator are usually asked to show how a deal is “in the public interest” while also submitting to a review to ensure the transaction does not irreparably harm competition. For Suddenlink customers, almost anything Altice could do would be an improvement for a cable company run by a guy who admitted on national television that the days of big investments by cable companies in service improvements were over. It was time to reap the profits, to paraphrase then-CEO Jerry Kent. And so they did, coming up with innovative usage caps and overlimit penalties for customers who dared to use the cable company’s internet service to circumvent a costly cable television package.

Cablevision, in contrast, was usually better regarded than the cable giants that surrounded it. Although technologically aggressive, Comcast canceled most of the goodwill earned for its service improvements by treating customers like patrons of an S&M club. Time Warner Cable was also loathed for its “last to do anything” upgrades, disengaged customer service, and reliable rate hikes, but at least they learned from earlier customer service mishaps and generally relied on a policy of being nicer to customers that threatened to leave.

Cablevision innovated on ways to keep customer loyalty after Verizon FiOS arrived to compete in large sections of its service area. The company spent millions on a major Wi-Fi network for the benefit of its commuting customers, launched broadband speed upgrades earlier than most, and after one embarrassing episode with the FCC showing their speed claims were not met by reality, they have usually overachieved ever since.

Drahi

In 2016, almost everything except Comcast changed. Time Warner Cable was successfully sold to Charter Communications and a self-styled ‘Baron of the Stock Exchange‘ — Patrick Drahi, managed to invade the United States and successfully acquire the two cable operators, despite admitting he would gut spending and wring hundreds of millions in savings out of the transactions for the benefit of his investors.

Mr. Drahi’s penchant for ruthless cost-cutting isn’t new, and he’s been dubbed “The Slasher” in Europe since decimating the budget at his French wireless and broadband company SFR-Numericable. French unions hate him, and not just those representing workers at his telecom businesses. Since the Altice Media Group took control of several major print publications in France, independent photographers have complained Altice slowed payments to a crawl, leading to an open letter to the French government from several press photography agencies demanding action. To date, Altice owes more than a half million dollars in outstanding licensing payments.

Critics contend this is nothing new for Altice, often denounced for not paying vendors (or paying them only after they agree to provide discounts) or alienating employees with radical cost cutting and cutbacks. Customers don’t like what they see either, with more than a million dropping SFR for other providers.

But that was not a story Goei was prepared to share with Cablevision workers in the Bronx.

Instead, Mr. Goei told employees he turned his back on a lucrative career on Wall Street after the great financial meltdown of 2008 and saw more potential running cable companies in Europe and the United States. Goei told the workers Altice’s business plan is to acquire cable and telecom companies and reinvest the profits in improved customer service and better technology for customers. Actual customers of Altice’s cable companies in Europe are still waiting for those improvements.

The French loathe SFR-Numericable, giving it one out of five stars in reviews.

SFR-Numericable, which Goei claimed this week won acclaim from French regulators for being the most reliable in the country, gets scathing reviews criticizing the company for its very frequent service outages, tricky marketing, and incoherent customer service. “Legalized banditry,” claimed one customer. Another described the offshore customer care center as “the Moroccan nightmare,” with more than a few call center workers demonstrating less-than-capable comprehension of French. Service outages are rampant and represent the single biggest reason customers have canceled service.

Goei complained that acquisitions and upgrades have been complicated in Europe by former managers grabbing their golden parachutes and abandoning the acquired companies (without mentioning Altice’s well-known reputation for draconian salary cuts and downsizing) and slowdowns from underperforming suppliers (despite the fact some vendors in France complained their invoices went unpaid for weeks or months, leading to complaints to government regulators).

Forthcoming upgrades are one of the reasons Goei was in the Bronx to sell employees on the merits of Altice Technical Services (ATS), a spinoff entity expected to eventually manage all of Altice’s technical infrastructure and the technicians that will care for it.

“We don’t want to contract out,” explained Goei, who aspires to manage Altice’s forthcoming upgrades effectively in-house through ATS instead of going to outside contractors. To manage this, Goei needs to convince Altice USA’s technical employees to leave Altice and join ATS.

Will ATS protect workers and customers or simply help Altice rid itself of regulator-imposed conditions for its acquisitions?

Goei’s statements seemed to suggest that most will need to make that transition if they want to remain a part of Altice for more than five years, hinting ATS will increasingly manage more and more of Altice’s technical needs, eventually making Altice USA employees potentially redundant.

Goei also hinted ATS might perform work for more than just Altice, which underlined concerns for union organizers that ATS is being established as an independent contracting entity that would not be subject to any regulatory job protection conditions that came with the approval of Altice’s acquisition of Cablevision.

Altice’s plans to rip out and replace coaxial cable with an all-fiber network will likely provide work for the next 7-10 years, notwithstanding the ambitious five-year timeline Altice gave for the fiber upgrade. But employees peppered Goei with questions about job security, benefits like vacation pay, and exactly who will be running ATS and what their opportunities for advancement are.

The transition to ATS might effectively be in name only, because Goei claimed ATS will have full access to employees’ files and work history with Altice and Cablevision, and if managers make the transition to ATS, employees could report to the same manager or supervisor they did under Altice.

“We’re not bringing in some Mexican guy” to run things Goei said to nervous laughter and raised eyebrows from the almost all-minority audience.

Goei’s question and answer session is unlikely to assuage concerns ATS could evolve into little more than Altice’s version of an independent subcontractor with enhanced loyalty to Altice USA. Despite assurances Altice is not looking for excuses to radically trim its workforce, Altice’s history shows job cuts are an integral part of what the French business press calls “The Drahi Method.”

At France’s SFR, Drahi made clear he is looking to cut at least 5,000 paid positions, reducing the workforce from 14,700 to 9,000, starting in July. Observers suspect Altice’s reliance on ATS to act as an umbrella technical department for all of Altice’s North American acquisitions guarantees workforce reductions, if only to eliminate redundancy. Altice has already shown a willingness to lay off employees at its Cablevision and Suddenlink call centers.

But there is one area where Altice is willing to spend.

Le Temps reports Drahi is opening the checkbook to beef up its Geneva executive headquarters in Switzerland, increasing the workforce tenfold and centralizing business operations for the Altice empire. The office is packed with ex-Wall Street bankers and businessmen with a reputation for ruthlessness. Goei’s office is in the building, as is the company’s director — Michel Combes. Combes was notoriously hired away from Alcatel right after demonstrating a talent for swinging the job cutting ax. They are joined by Burkhard Koep, a former Morgan Stanley investment banker in charge of mergers and acquisitions.

The top shelf executives have moved themselves and their families from London, New York, Paris, Tel Aviv and Lisbon to the posh neighborhoods around suburban Geneva, where homes are more likely to be called estates.

The Geneva office conducts business through heavy reliance on videoconferencing and racking up frequent flier miles traveling abroad. Often absent is Drahi himself, who prefers to conduct business from his Zermatt-based luxury cottages. As much as executives spend their time pondering the next acquisition, Le Temps reports they also spend their weekends trying to renegotiate the company’s enormous debt load by seeking refinancing at lower interest rates.

“They play a bank against each other by saying: we will refinance to 6% the debt you loaned us at 7%,” reported the news outlet.

But Altice’s Geneva headquarters did not come for free. Drahi recently introduced a new franchise fee obligating each cable or telecom unit to pay 2-3% of their revenue to Mr. Drahi’s Switzerland office. In the first year that is expected to raise at least $550 million dollars. While popular with Swiss tax authorities, the substantial royalty payments are expected to reduce available cash for upgrades and debt service. Nobody is sure where the money will ultimately end up.

Come for the scenery but don’t stay for the broadband. (Image: Paul Hamilton)

Verizon’s lack of interest in improving broadband service in rural Pennsylvania could cause the state to lose more than $23 million in available broadband improvement funding.

For several years, Verizon has declined tens of millions from the Federal Communications Commission’s Connect America Fund (CAF). The program’s ratepayer-funded subsidies are offered to private phone companies to expand rural internet access in high cost service areas where return on investment is slow or uncertain.

In 2016, Verizon was eligible to receive $23.3 million — nearly half of the federal allotment available to Pennsylvania, but Verizon once again turned the money down. Some consumer advocates called Verizon’s decision counter-intuitive in a state like Pennsylvania where a state law requires guaranteed access to broadband to any customer who wants the service.

Instead of accepting the money to improve the company’s poorly rated DSL service, still not widely available in many rural areas, Verizon has consistently shown no interest in improving service or expanding its highly acclaimed FiOS fiber to the home service to more customers in the state.

State officials now fear the millions in available funding will instead be distributed to other states, leaving Verizon customers in Pennsylvania paying ongoing bill surcharges that will be effectively spent on improved broadband in West Virginia, New York, Ohio, and other states.

“Losing all or part of this funding would be unfair to Pennsylvania residents in rural and high-cost areas and contrary to the FCC’s goal of ensuring broadband access for all,” Sen. Bob Casey (D-Pa.) wrote in a Dec. 22 letter to outgoing FCC chairman Thomas Wheeler.

The state’s Public Utilities Commission claims there isn’t much the state can do if Verizon remains intransigent about accepting Connect America funding and the minimum speed and service obligations that come with the money.

Independent phone companies in the state including Frontier Communications and Windstream could benefit by requesting some or all of Verizon’s share of the money, but only if the companies are willing and able to invest in rural broadband expansion. In most cases, CAF funding requires phone companies to invest matching funds to collect a payout.

Verizon has significantly reduced investment in its landline/wireline networks since suspending FiOS expansion in 2010.

Altice, the new owner of Cablevision, is not following the rest of the U.S. cable industry by rolling out the next generation of cable broadband — DOCSIS 3.1 — and will instead scrap coaxial cable entirely in favor of a new, all-fiber network.

The cable industry has depended on some form of coaxial cable to offer its service since about 1950, when the first mom and pop operators set up shop offering community antenna television service in areas that could not easily receive over the air TV stations. Most American cable systems today still use the coaxial cable installed in millions of homes starting in the 1970s, supplemented by outdoor coaxial cable that is often 10-20 years old, supported by a more recent fiber backbone network that improves system reliability and maintenance.

Cable systems were originally designed to deliver analog cable television signals, but over the years bandwidth has been set aside to offer ancillary services like video game products, home security and alarm monitoring, digital radio/music, telephone, and broadband. Because of the billions of dollars invested in existing cable networks, the idea of scrapping existing wiring in favor of fiber optics has been largely rejected by the industry as too costly. As broadband service increasingly becomes cable’s most important service, network engineers have instead worked to realign bandwidth to support faster internet speeds, most commonly by upgrading to more efficient cable broadband transmission standards and by removing space hogs like analog television channels from the lineup.

Regardless of what the cable industry does to increase the efficiency of its hybrid coaxial-fiber networks (known as ‘HFC’), they will never achieve the capacity and robustness of all-fiber networks, which may be why Altice is seeking to stop investing in old technology in favor of something new and better.

Altice’s management is legendary in its zeal to cut costs, so an expensive deployment of fiber to the home service to 8.3 million Cablevision/Optimum and Suddenlink customers would seem contrary to the company’s promise to wring out about $900 million in cost savings for the benefit of shareholders after acquiring Cablevision. DOCSIS 3.1 is clearly a cheaper alternative than rewiring millions of homes for all-fiber service. Last summer, Liberty Global CEO Mike Fries estimated that Liberty Global’s costs to deploy the cheaper DOCSIS 3.1 option in Europe would bring gigabit speeds to customers for about $21 per home — a fraction of the cost of tearing out coaxial cable and replacing it with fiber, estimated to cost about $500 a customer.

But Altice wants to future-proof its network with fiber technology that can support profitable next-generation services that may need speed in excess of a gigabit. Dexter Goei, Altice USA’s chairman and CEO, told Multichannel News Altice was not interested in undertaking incremental upgrades every few years trying to keep up with the internet speed demands of its customers:

Goei

Going with a DOCSIS 3.1 game plan “felt to us as one step forward but not a step forward enough relative to what we see as the future of continued connectivity and higher bandwidth usage,” Dexter Goei, Altice USA’s chairman and CEO, said in an interview, noting that the operator has reached an “inflection point” as it sees a disproportionate number of gross broadband subscriber additions taking higher and higher Internet speed tiers.

“We’re big believers in this trend continuing, and we really are moving toward a 10-gig world,” Goei said. “And to sit around and do this in multiple steps doesn’t make any sense [so we decided] to skip over DOCSIS 3.1 and get straight to the point.”

The cable industry may also be exaggerating the cost of fiber upgrades, especially when they cite the financial challenges experienced by Verizon (FiOS) and AT&T (U-verse) as both built out their respective fiber and fiber-copper networks from the ground up. Cablevision and Suddenlink will not have to build fiber networks from end to end because a significant part of their networks already include a substantial amount of fiber optics. Altice would simply extend the amount of fiber in its network to reach each customer.

Fiber to the home upgrades for Cablevision and Suddenlink customers.

Wall Street remains concerned about where the money to build the project, dubbed “Generation Gigaspeed,” is coming from. The Communications Workers of America is also afraid the money will come, in part, from significant downsizing and salary cuts.

Earlier this week, Altice announced it was spinning off its engineering and technical workers to a new independent entity — Altice Technical Services (ATS). When the spinoff is complete, it will employ as many as 4,500 of Altice’s current workforce of 17,000 employees nationwide, and will eventually manage Cablevision and Suddenlink service calls, outdoor network plant design, construction and maintenance, and house all of Altice’s employees servicing commercial accounts.

Although details remain murky, the union is concerned Altice could be engineering an end run around the New York Public Service Commission’s order approving the buyout of Cablevision if Altice did not lay off any New York workers for the next four years.

“We’re very concerned,” CWA District 1 assistant to the vice president Robert Master said. “But we haven’t fully unpacked it yet. We don’t know what they have in mind.”

CWA District 1 organizer Tim Dubnau was more blunt, telling Multichannel News: “We definitely smell a rat.”

Assuming ATS is configured as an independent entity, it will not be required to adhere to the NY PSC order prohibiting reductions of Cablevision’s customer-facing workforce in New York State, which theoretically could allow Altice to dramatically downsize.

Outside of New York, Altice’s cost cutting has followed a long established pattern company executives have followed in Europe for years, where Altice also offers service. In France, battles over toiletries and office supplies resulted in workers bringing their own toilet tissue to work. Downsizing, despite regulatory orders prohibiting layoffs, went ahead in France as company officials thumbed their noses at regulators. In the United States, a familiar pattern is emerging, charges Altice’s critics. Almost 600 call center workers were terminated in November in Connecticut, and other cutbacks have taken place in North Carolina and other states.

Late last week, the NY Post reported Cablevision employees are now complaining about an increasingly miserable office life as they endure penny-penching from their bosses. In New York, top management reportedly ordered the removal of many office printers to reduce the expense of replacement ink cartridges. Office cleaning expenses have also been reportedly slashed by increasing the length of time between cleanings. Even the cost of an ice machine for a break room has come under intense scrutiny, as cost management specialists demand better deals and less costly equipment. Much of the removed equipment provides one last service to Altice – a tax write-off after being removed from service and donated to charities.

Employees report unprecedented intensity of cost cutting and lengthy scrutiny of almost every expense. Some claim to have resorted to buying certain equipment and supplies out of pocket just to avoid drawing management scrutiny. Employee morale is reportedly low — especially at Cablevision, where reduced pay packages predominate under Altice ownership. Management has told employees to hold out for a planned IPO, which could allow them to reap some of the benefits of a Wall Street-fueled cash-raising exercise likely to be put to work buying up other cable operators in 2017.

The pain of cost-cutting isn’t exactly reaching the top level executive suites, however. Despite a very public dispensing of Cablevision’s lush Dolan family corporate jet immediately after Altice took ownership of Cablevision, a replacement nearly identical to the original was quietly been put into service for the benefit of Altice’s management, according to the newspaper.

Assuming Altice can raise the money to pay for its fiber upgrade, it is expected to be completed within five years for all Cablevision and most, but not all Suddenlink customers.

Tis the season for rate increases. Fa-la-la-la-la, La-La-La-La.

Comcast is bringing itself some Christmas cheer this holiday season with more of your money going into its pocket as the cable giant announces nationwide rate hikes that will cost customers an average of 3.8 percent more in 2017. Comcast blames much of the increase on others.

“We continue to make investments in our network and technology to give customers more for their money—like faster internet service and more Wi-Fi hotspots, more video across viewing screens, better technology like X1 and a better customer experience,” Comcast said in a statement. “Unfortunately, the costs we are charged to carry popular networks continue to increase significantly, especially broadcast television and sports programming, which are the largest drivers of increases in price adjustments.”

Customers may not feel like they are getting more for their money with Comcast’s data caps and overlimit fees, which increasingly affect customers except in the northeast (for now). Cable TV customers will generally see a published rate increase of around $1 a month, which sounds like a pittance until you scrutinize the rate hike more closely.

Bill padding is where the real money will be made in 2017:

• Broadcast TV Fee: Was around $5 in most markets, but Comcast intends to charge $2 more, bringing the fee to $7 a month;
• Regional Sports Surcharge: Whether you watch sports channels or not, you will be expected to pay $2 more next year for those channels, with fees rising to $5 a month.

The absence of viable broadband competition in states like Maryland, bypassed by Verizon FiOS, means Comcast can raise broadband prices almost at will.

TV Predictions notes officials in Montgomery County, which includes the suburban Washington, D.C. cities of Bethesda and Rockville, have been notified of $5 a month rate hikes on broadband, taking some internet access pricing above $80 a month:

• Internet Plus will increase from $77.95 a month to $82.95 a month;
• Internet Pro Plus with Showtime will rise from $81.95 a month to $86.95 a month;
• Internet Pro Plus With HBO will increase from $84.95 a month to $89.95 a month;
• Premier XF Double Play package will increase from $182.95 a month to $187.99 a month, taking Comcast closer to the $200 cable bill.

Standalone internet pricing is now just as expensive as a deluxe cable television package, despite the fact it costs Comcast only a fraction of the amount it charges to provide the service:

• Performance plan will rise from $69.95 to $74.95 a month;
• Performance Pro plan will go from $79.95 a month to $84.95 a month;
• Blast plan will rise from $82.95 a month to $87.95 a month.