CenturyLink investors got the shock of their investment lives last week after company executives announced the phone company was slashing its dividend by 26 percent from 72.5 cents to 54 cents per share. The stock immediately tanked, tumbling the most in more than three decades, according to Bloomberg News.

The stock price crash wiped out about $6 billion in market value after the dividend cut was announced and stock analysts lambasted executives for the decision.

But CenturyLink’s move to stop paying out large sums to investors does not mean the company is going to spend the money on network and service upgrades. Instead, CenturyLink executives plan to spend $2 billion in stock purchase buybacks over the next two years.

“This is one of the most unusual capital allocation decisions I have ever seen,”  Todd Rethemeier, an analyst with Hudson Square Research in New York told Bloomberg.

CenturyLink, like Frontier Communications and Windstream, have all been popular “investment-grade” stocks for investors that rely on dividend payouts. Many investors explore various platforms for trading these stocks, often seeking resources that provide in-depth analyses, such as a Kraken review, to make informed decisions. All three phone companies have paid extremely high dividends to attract shareholder investment, but the ongoing decline in revenue from landline customers disconnecting service has made high dividend payouts financially untenable. CenturyLink has lost six percent of its landline customers in the 12 months ending last September, a decline of 857,000 lines. In the last two years, the dividend payout has cost CenturyLink 50-55 percent of its free cash flow. That is unsustainable at a time the company is losing upwards of $25 million in operating revenue every quarter.

From: Seeking Alpha

CenturyLink executives told shareholders in the company’s latest quarterly conference call that much of CenturyLink’s investment will continue to build fiber links to serve highly profitable cell towers. The company also plans to further expand its fiber-to-the-neighborhood service Prism, which works similarly to AT&T’s U-verse. Phoenix, Arizona is the company’s next major target for rollout, with the service already soft-launched in certain neighborhoods. But do not expect CenturyLink to begin a spending spree to expand Prism rapidly into other communities, even if it means losing more landline customers.

The Minneapolis Star-Tribune reports CenturyLink, the city’s primary phone company, is now in a race against time in a country where more than a third of Americans rely on cellphones — a service CenturyLink does not provide. In response, CenturyLink has relied on its multi-platform Prism service, which can provide phone, broadband, and cable-TV in its bid to stay relevant and help improve earnings growth. The company also sees corporate customers as a major income source, and has expanded into the business of cloud computing with its acquisition of Savvis.

But the company has a more immediate potential challenge. The Communications Workers of America (CWA), the union representing as many as 13,000 CenturyLink employees, has authorized its executive board to set a strike date. The company’s labor contract expired in October and bargaining has yet to achieve a renewal. Workers are complaining about significant benefits cuts, especially to health care plans.

Windstream is reportedly behind the latest effort to ban community broadband networks in Georgia.

Rural communities across Georgia are upset about a new piece of legislation ghost-written by Windstream Communications that would keep broadband a strictly private affair in the Peach State.

House Bill 282, introduced by Rep. Mark Hamilton (R-Cumming) would prohibit publicly owned broadband networks from being built anywhere an incumbent provider delivers at least 1.5Mbps “broadband” in the state.

Sources familiar with the legislation say Windstream, a phone company primarily serving smaller communities, is the primary force behind the bill now before a legislative committee. When news of the bill came to light earlier this week, consumers and local communities began to push back with state legislators. A planned hearing on the bill has been temporarily pushed back until next week.

The legislation would effectively tie the hands of municipalities that have waited more than a decade for AT&T, Windstream, CenturyLink and other phone companies to bring DSL broadband to rural Georgia.

While not proposing a total ban on public broadband, the bill’s requirement that service be denied to a customer in a “census block” where at least one home can receive slow speed DSL makes building such networks nearly impossible.

The Georgia Municipal Association notes local governments in small towns and cities, already strapped for resources, would have to prove to the Georgia Public Service Commission that each census block a community wants to serve has no existing broadband service (census blocks are the smallest geographic area the Census Bureau uses for data collection.)

There are 291,086 census blocks in Georgia, making such a review difficult at best.

For communities that have already built public broadband networks, the bill brings more bad news. Under its terms, existing networks would not be allowed to expand anywhere any other provider delivers even a modicum of “high speed” 1.5Mbps Internet access. With many community networks built out in stages to minimize initial financial outlays, H.B. 282 could ruin the economic cost recovery models under which existing networks were financed and built, potentially risking bondholders.

Rep. Hamilton does not seem to care about them or whether rural Georgia gets Internet access or not. He answers to a higher calling: Windstream’s lobbyists.

The final report of Gov. Nathan Deal’s Competitive Initiative found rural Georgia at a disadvantage simply because many communities cannot get broadband service. Several regions in Georgia called on Deal’s office to help improve inadequate broadband infrastructure.

Instead, Hamilton’s bill would turn over Georgia’s broadband needs to phone company “Return on Investment” formulas that guarantee large sections of rural Georgia will remain unserved, with other areas left underserved. The bill itself defines suitable broadband at just 1.5Mbps, deemed inadequate by the Federal Communications Commission for today’s broadband user.

The bill’s defenders told The Telegraph the bill was designed to “close off an opportunity for government waste.” The bill also closes off an opportunity for better broadband and competition in Georgia.

“The fundamental question is rather simple: does Georgia want local leaders to determine the economic and investment strategies for their communities or do we want those decisions to be made solely on the business plans of companies based outside of the state,” asked the Georgia Municipal Association.

Georgia residents can contact the House Energy, Utilities & Telecommunications Subcommittee members and tell them to reject H.B. 282. Local municipalities seeking further information about this legislation should contact the Institute for Local Self-Reliance for additional information and guidance.

A handful of Georgia state legislators have introduced a bill to ban community-owned broadband anywhere Internet service is available at speeds of at least 1.5Mbps — so slow it does not even meet the FCC’s new definition of “broadband.”

The so-called “Municipal Broadband Investment Act,” introduced Feb. 8 is just the latest in a series of anti-competition, corporate welfare bills designed to protect existing telecom monopolies and duopolies from facing any additional competition.

Introduced and co-sponsored by Reps. Mark Hamilton (R-Cumming), Don Parsons (R-Marietta), Ron Stephens (R-Savannah), Jay Roberts (R-Ocilla), Ben Harbin (R-Evans), and Jon Burns (R-Newington), H.B. 282 would only allow community providers to offer service where broadband is not available within a census block, a requirement that makes virtually all public broadband efforts untenable because of the patchwork of DSL service throughout the state.

Hamilton

Remarkably, the legislation also includes a penalty clause that will leave community providers liable for damages payable to corporate-owned Internet Service Providers if they dare compete with the state’s largest phone and cable companies. Local communities could even be on the hook for attorney fees paid by companies like Comcast, Windstream, and AT&T to make sure publicly owned ISPs never get off the ground.

Phone companies like Windstream are seeking federal funding from the FCC Connect America Fund that will defray up to $775 per home for new broadband hookups delivering at least 4/1Mbps service. But Georgia’s legislation will set a new standard for minimum broadband at a much slower 1.5Mbps, benefiting telephone companies like AT&T, CenturyLink and Windstream. All can claim their existing 1.5Mbps DSL lines are good enough for Georgia to consider an area “served” by broadband. That certification would make it impossible for a publicly owned provider to establish far faster service.

Stop the Cap! strongly urges Georgia residents to contact their state representative and ask that he or she vote no on H.B. 282, which is nothing more than another corporate-written and backed protectionism bill that will guarantee rural Georgia remains mired in a slow speed broadband swamp. The best way corporate ISPs can guarantee no community will rise up to compete is by providing 21st century broadband speeds and service to local residents.

The proposed bill is scheduled for its first hearing tomorrow afternoon at 4pm.

Netflix has released figures for January ranking Internet Service Providers delivering the best viewing experience for viewing Netflix’s catalog of online video titles.

At the top is Google Fiber, which comes as little surprise considering Google provides 1,000/1,000Mbps service to its limited number of customers in Kansas City.

Suddenlink saw the greatest improvement. The mostly-rural and small city cable provider jumped five points in January’s ratings, scoring 3rd. Cablevision’s Optimum broadband service jumped ahead of three rivals to score second place.

Time Warner Cable and Cox remained in the middle, while AT&T U-verse demonstrated that the benefits of a fiber network end when the remaining copper wire to the customer’s home comes into play. U-verse performed only marginally better than the DSL services of independent phone companies like Windstream and CenturyLink. Frontier managed some minor improvement, now scoring 14th place out of 17.

The worst performers: DSL services from both Verizon and AT&T and Clearwire’s 4G WiMAX network, which scored dead last.