With the average speed of DSL service under 10 Mbps in rural counties across the United States, this legacy technology is disenfranchising a growing number of rural Americans and is largely responsible for dragging down overall U.S. internet speed scores. Only satellite internet offers overall lower speed and poor customer satisfaction, according to consumer surveys.

In some areas, customers cannot even get bad DSL service, despite the fact the Federal Communications Commission marks many of those addresses as well-served. According to a new report by the company Broadband Now, the FCC could be claiming at least 20 million Americans have access to robust internet service that, in fact, does not exist, especially in rural counties.

Citylab:

To get its estimate, the Broadband Now team manually ran 11,663 randomly selected addresses through the “check availability” tool of nine large internet service providers that claim to serve those areas. All in all, the team analyzed 20,000 provider-address combinations. A fifth of them indicated that no service was available, suggesting to the researchers that companies may be overstating their availability by 20%, said John Busby, the managing director of Broadband Now. The results also show that 13% of the addresses served by multiple providers didn’t actually have available service through any of them. They then applied these rates across the country to get their final estimate of 42 million people without broadband.

The disparity between their estimate and the FCC’s largely comes from the agency’s reliance on Form 477 reports, in which internet providers self-report the locations they serve. Providers can claim to serve the population of an entire census block if service is provided to just one household in that block. After the release of FCC’s May report, the agency’s Democratic commissioners dismissed the report, berating their colleagues for “blindly accepting incorrect data” and using the numbers to “clap its hands and pronounce our broadband job done.”

Across DSL-heavy rural Ohio, weary residents have nothing to clap about as they desperately look for something better than slow speed DSL from the local phone company.

“It’s a good day when Frontier DSL breaks 2 Mbps, although they advertise (and we pay for) 10 Mbps,” said Fred Phelps, a Frontier DSL customer for more than a decade. “In rural Ohio, it is take it or leave it internet access and we have no choice other than Frontier.”

Phelps has longed for Charter Spectrum to wire his area, next to a large farm operation, but the nearest Spectrum-connected home is a half-mile down the road. Phelps was lucky to get DSL at all. That aforementioned farm paid Frontier a handsome sum to extend its commercial DSL service to the farm’s office, putting Phelps in range for a residential DSL connection.

“It is always slow and frequently goes offline on rainy and snowy days because water is getting into the phone cable somewhere,” Phelps told Stop the Cap! “Service calls are a waste of time because the problem always disappears by the time the repair crew shows up.”

Cindy B (last name withheld at request) is in a similar situation in Ohio. She has a CenturyLink DSL line that averages 1 Mbps, although some of her relatives have managed to get almost 12 Mbps from CenturyLink closer to town.

Warren County, Ky.

“CenturyLink treats you like they are doing you a favor even offering DSL service in this part of Ohio. There is no cable TV service for at least 20 miles, so cable internet is out of the question,” Cindy tells us. “They have also made it crystal clear there are no plans to upgrade service in our area.”

She used to be a Viasat satellite internet customer but quickly canceled service.

“Satellite internet should be considered torture and banned as illegal,” Cindy said. “You can spend five minutes just trying to open an email, and the only time we could download a file was overnight, but even that failed all the time.”

Cindy and Fred are collateral damage of the country’s broadband dilemma. They are stuck with DSL, a service that often wildly over-claims advertised speed that it actually cannot deliver in rural areas. In much of rural Ohio, DSL speeds are usually under 6 Mbps, although companies often claim much faster speed on reports sent to the FCC.

“According to the FCC website, we should be getting 24 Mbps internet from Frontier and two other companies, but that simply does not exist,” said Phelps. “I really don’t understand how the FCC can rely on its own database for broadband speed that is not available and never has been.”

Cindy said her children cannot depend on their DSL line and have to do their homework at school or in the library, where a more dependable Wi-Fi connection exists.

“The problem is getting worse because websites are becoming more elaborate and are designed for people who have real internet connections, so often they won’t even load for us,” she said.

Warren Rural Electric Co-Op’s service area.

But according to the FCC, neither Cindy nor Fred live in a broadband-deprived area. For this reason, public funding to improve internet access is hard to come by because the FCC deems both areas well-served.

South of Ohio, in Warren County, Ky., a local rural electric co-op is not waiting for the State of Kentucky or the federal government to fix inaccurate data about broadband service in the rural exurbs around Bowling Green, usually stuck with slow DSL or no internet access at all. Warren Rural Electric Cooperative and Lafayette, Tenn.-based North Central Telephone Co-Op are working together to lay fiber optic cables to bring fiber to the home internet service to some broadband-deprived communities in the county. Warren RECC serves eight counties in south central Kentucky with over 5,700 miles of electric transmission and distribution lines, mostly in rural parts of the state. Two communities chosen for service as part of a pilot project — Boyce and September Lakes, are more than a little excited to get connected.

The Bowling Green Daily News reports that an informational meeting held in early February drew 300 residents (out of nearly 800) ready to hear more information about the project. Almost 150 signed up for future fiber service on the spot. Many more have subsequently signed up online. The new service will charge $64.95/mo for 100 Mbps service or $94.95 for 1,000 Mbps service. That is about $5 less than what Charter Spectrum charges city folks and is many times faster than what most phone companies are offering in rural Kentucky.

Canoe Ventures

The impact of video cord-cutting and a growing intolerance for heavy advertising loads seem to be taking a toll on the cable industry’s lucrative advertising business.

Canoe Ventures, owned by Comcast, Charter Spectrum, and Cox, reports the number of ads being viewed by video-on-demand users rose just 4% in 2019, just a fraction of the growth the company reported over the past three years.

Many ad-supported cable networks make parts of their programming libraries available for on-demand viewing by video subscribers. Cable companies sell advertising that fills the original commercial breaks, sometimes resulting in a viewing experience comparable to live viewing — ads and all. But customers are increasingly turning away from cable video-on-demand, either because they are canceling their video packages or are becoming more intolerant of heavy ad loads.

Canoe Ventures claims its slowed growth comes from selling out ad inventory on the cable video-on-demand platform. But during the first six months of 2019, 13.1 billion ads were collectively viewed by customers, which is nearly identical to the 13 billion ads viewed during the same months in 2018. Assuming Canoe Ventures has nearly sold out all available space on its ad insertion platform, that should result in consumers seeing more ads. But with ad viewing almost flat, that likely means less video-on-demand content is being watched.

Large media companies and streaming services are on to many of you.

If you are among the two-thirds of subscribers that have reportedly shared your Netflix, HBO GO, Hulu, or Disney+ password with friends and family, your provider probably already knows about it.

A recent report from HUB Entertainment Research found that at least 64% of 13-24-year-olds have shared a password to a streaming service with someone else, with 31% of consumers admitting they are sharing passwords with people outside of their home.

The reason many people share passwords is to save money on the cost of signing up for multiple streaming services. Many trade a Netflix password in return for a Hulu password, or hand over an HBO GO password in exchange for access to your Disney+ account. Research firm Park Associates claims that streamers lost an estimated $9.1 billion in revenue from password sharing, and can expect to lose nearly $12.5 billion by 2024 if password sharing is not curtailed.

Oddly, most streaming services are well aware of password sharing and the lost revenue that results from sharing accounts, and most care little, at least for now.

Marketplace notes a lot of the complaints about password sharing are coming from cable industry executives, shareholders, and Wall Street analysts, but for now most streaming services are just monitoring the situation instead of controlling it.

“I think we continue to monitor it,” said Gregory K. Peters, Netflix’s chief product officer, on the 2019 third quarter earnings call. “We’ll see those consumer-friendly ways to push on the edges of that, but I think we’ve got no big plans to announce at this point in time in terms of doing something differently there.”

Netflix sells different tiers of service that limit the number of concurrent streams to one, two, or four streams at a time. The company believes that if customers that share accounts bump into the stream limits, many will upgrade to a higher level of service which will result in more revenue.

Newcomer Disney+ not only recognizes password sharing is going on, it almost embraces it.

“We’re setting up a service that is very family friendly. We expect families to consume it,” Disney CEO Bob Iger said in an interview with CNBC. “We will be monitoring [password sharing] with the various tools that we have.”

The biggest tool Disney has to monitor account sharing is Charter Spectrum, which is aggressively encouraging streaming services to crack down hard on password sharing. Spectrum internet customers who watch Disney+ are now tracked by Spectrum, recording each IP address that accesses Disney+ content over Spectrum’s broadband service. When multiple people at different IP addresses access Disney+ content on a single account at the same time, Spectrum can flag those customers as potential password sharers.

Synamedia, a streaming provider security firm, uses geolocation tools to determine who is watching streaming services from where. If someone is watching one stream from one address and another person is watching from another city at the same time, password sharing is the likely culprit. For now, most companies are quietly collecting data to learn just how big a problem password sharing is and are not using that information to crack down on customers.

Streaming providers are more interested in stopping the pervasive sale of stolen account credentials on services like eBay and shutting down stolen accounts used to harvest content for unauthorized resale. But as sharing grows, so will calls from stakeholders to curtail the practice. Those in favor of vigorous crackdowns on password sharing argue billions of dollars of lost revenue will be lost. If a service like Netflix blocked password sharing, that could lead to dramatic increases in account sign-ups. But less established brands like Disney+ seem more concerned about losing the unofficial extra viewers that are watching and buzzing about shows on its new streaming platform. Find the best residential proxies to access the streaming content that is not available in your location.

Cable companies are frustrated about losing scores of cable TV customers to competitors that may be effectively giving away service for free. That has raised tempers at companies like Charter Communications.

“Pricing and lack of security continue to be the main problems contributing to the challenges of paid video growth,” Charter CEO Thomas Rutledge said in recent prepared remarks with Wall Street analysts. “The traditional bundle … is very expensive, and the actual unit rate of that product continues to rise, and that’s priced a lot of people out of the market. And it’s free to a lot of consumers who have friends with passwords. So our ability to sell that product is ultimately constrained by our relationship with content [companies], and we have to manage that in terms of the kinds of power that the content companies have.”

Charter’s power comes from its willingness to distribute cable networks like The Disney Channel to tens of millions of homes around the country. That forces Disney to listen to Charter’s concerns about piracy and password sharing and the issue is even documented in the latest carriage contract between the two companies.

Cable industry executives believe a crackdown on password sharing is inevitable, eventually. Just as the cable industry was forced to combat cable pirates during its formative years, streaming providers that welcome extra viewers today may lament the lost revenue those subscribers don’t bring to the table tomorrow.

Marketplace reports on the growing issue of streaming service password sharing. (2:19)

Most analysts are predicting this past year will be the worst yet for video customer losses, with nearly two million cable TV customers cutting the cord in 2019, up from 1.26 million in 2018. Business is even worse for satellite TV operators, which lost 1.2 million customers in 2018 and are expected to have shed another 3.25 million customers in 2019 — mostly because of mass customer defections at AT&T’s DirecTV. Altogether, over five million Americans are estimated to have cut the cord over the past year.

Investors have largely stopped worrying about video subscriber losses, and cable operators have boldly told Wall Street they have stopped chasing video customers threatening to cancel service, claiming many are no longer profitable enough to keep. Their key competitors, online streaming video services like Sling TV, AT&T TV Now, and Hulu with Live TV are also seeing subscriber gains slowing, most likely because of price increases. One analyst predicted these online cable TV replacements would add a combined 804,000 customers in 2019, less than half of the 2.3 million they added in 2018.

Cable companies seem unfazed, in part because of record-breaking gains they are expected to have made in internet and wireless customers in the last year. One analyst suggests that most of those gains are coming directly at the expense of phone companies.

Comcast and Charter are the two largest cable companies in the United States.

“Cable’s clear speed advantage in roughly half the U.S. is driving continued strong share performance,” Jayant told clients in a research note. Jayant expects some of the biggest gains will come from ex-DSL customers in Comcast and Charter Spectrum’s service areas.

Nationwide, cable operators likely added 3.1 million new broadband customers in 2019, up 15% over last year. Phone companies are predicted to have lost at least 402,000 internet customers, up from 342,000 in 2018. Most of those departing customers are not served by fiber broadband.

Both Comcast and Charter Spectrum are also successfully attracting a growing number of mobile customers, as is Altice USA. Charter and Comcast offer their broadband customers the option of signing up for wireless mobile service, powered by Verizon Wireless. Altice USA resells Sprint service at cut-rate prices.

Comcast is estimated to have added 778,000 wireless customers in 2019 and analysts predict that the company will add another 909,000 in 2020. Charter Spectrum is expected to have gained 923,000 wireless customers in 2019, with another 1.04 million likely to sign up in 2020. Altice USA’s deal with Sprint in its Cablevision/Optimum service area has already attracted about 80,000 customers, with 550,000 more likely to follow in 2020.

No service.

Despite New York Gov. Andrew Cuomo’s $500 million, 2015 Broadband for All initiative which guaranteed broadband service for anyone  that wanted home internet access, five years later rural broadband gaps continue to plague the state.

A bill that would set aside funds to complete a feasibility study to launch a state owned broadband provider of last resort was quietly vetoed by Cuomo at the end of 2019. Assembly member Aileen Gunther (D-Monticello) sponsored the bill after hearing scores of complaints about terrible or non-existent internet access from constituents in her district, which covers the parts of the rural Catskills region north of the Pennsylvania border.

Gunther complained that despite the governor’s broadband initiative, private phone and cable companies were still ignoring rural customers, leaving them with slow DSL service or no internet access at all. Gunther’s bill was a first step in potentially allowing the state to step in and provide service to New Yorkers unable to get broadband from any private provider.

New York has spent over $500 million on its Broadband for All program and made Charter Spectrum an integral part of its broadband expansion plans in return for approval of its 2016 acquisition of Time Warner Cable. But a growing number of the governor’s critics claim the program has failed to deliver on its mandate, stranding thousands of New Yorkers without internet service and tens of thousands more with just one option — unpopular satellite internet access.

Gunther

Gunther was upset to learn that New York was prepared to hand over more than a half billion dollars to large private telecom companies including Frontier Communications and Verizon while not being willing to spend a penny to fund projects to reach New Yorkers for-profit companies could not be dragged kicking and screaming to service.

“We’re all spending millions and millions of dollars on privately owned internet service providers,” said Gunther. “In return for promises, a lot of our communities do not have access to the internet, or if they do have access to the internet, it’s slow and these companies are not, I think, fulfilling the promises made.”

The rural broadband problem is not resolved in the Finger Lakes or Southern Tier regions of New York either. This week, Yates County announced it was joining an effort by Schuyler, Steuben, and Tioga counties, and the Southern Tier Network, to complete a broadband feasibility study to improve internet access in the four counties. Fujitsu Broadband will manage the study and hopes to have results by June. The study will target the pervasive problem of inadequate broadband service in the region, which includes crucial tourist, winery, and agricultural businesses vital to New York’s rural economy.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York in 2015.

Gov. Cuomo has called such initiatives “well-intentioned” but was non committal about contributing more state funds to construct new networks or underwrite further expansion of existing ones. New York is about to begin its annual hard-fought budget negotiations in hopes of completing the state budget by April. Finding funding for such projects will probably require a powerful political advocate able to wrestle funding for further broadband improvements.

Even after spending $500 million, New York’s rural broadband problem has not been resolved. That offers insight into the merits of other state broadband programs, which often limit annual broadband expansion funding to under $30 million annually.

Those still without service are likely in high-cost service areas, where each customer could cost over $20,000 to reach. New York’s Broadband for All program relied on a reverse auction that required private companies to bid to service each unserved address. No wireline provider bid on any high-cost service areas, leaving Hughes Satellite as a subsidized satellite provider of last resort. But inadequate broadband mapping left scores of rural New Yorkers behind without even the option of subsidized satellite internet access.