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Frontier Admits the DSL Service it Sells is Not High-Speed Broadband Service

Phillip Dampier June 8, 2021 Broadband Speed, Consumer News, Frontier, Public Policy & Gov't, Rural Broadband Comments Off on Frontier Admits the DSL Service it Sells is Not High-Speed Broadband Service

Frontier Communications told a federal court judge last week that the DSL service it sells across much of its service area in New York State is not remotely “high-speed broadband service” and is not fit for purpose if New York’s Affordable Internet Law takes effect next week and requires Frontier to deliver at least 25/3 Mbps service to state residents.

“Simply put, Frontier New York’s DSL-based service is not a ‘high-speed broadband service’ within the meaning of the statute, and an unreasonable interpretation thereof could be read to mandate the massive efforts and expenditures that would be required to provide the high-speed service standards set forth in the [Affordable Internet] Statute,” Frontier wrote in a filing with the court.

New York’s Affordable Internet Law, now being challenged in federal court, would require internet service providers to deliver at least 25 Mbps broadband service for $15/month to low-income state residents.

Frontier fears that if that new law takes effect, it could face mandatory investments in the tens of millions to upgrade its dilapidated copper wire network across most of its service areas in New York. Frontier told the judge it cannot provide reliable service over its copper wire facilities even at 15 Mbps, and many addresses recently added to Frontier’s internet service area are only getting service at 10 Mbps.

“Any attempt to require the consistent delivery of 25 Mbps through copper loops would require different network architecture, new equipment at Frontier New York’s central offices, new equipment in the field, and alternative methods and procedures,” Frontier complained. “Any such changes would constitute a new service rather than an upgrade to Frontier New York’s existing DSL services. The extensive time, effort and  money required would require the reallocation of capital and resources that are focused on forward-looking projects rather than backward-looking technology.”

Frontier added that the state should look to other providers to deliver service that meets minimal qualifications for broadband — service it does not provide today to most of its New York customers.

“FCC data and mapping indicates that speeds equal to or exceeding 25 Mbps download and 3 Mbps upload through technologies such as cable, fiber, fixed wireless and satellite are available across the state,” Frontier wrote.

AT&T To Strand Some DSL Customers With Fixed Wireless; Rural Areas Unlikely to See Fiber Upgrades for Years

AT&T CEO John Stankey is still looking to wring costs out of the business, and the company’s rural landline customers are next to take the cut.

At this morning’s J.P. Morgan Technology, Media and Communications Conference for investors, Stankey said AT&T is considering mothballing landline facilities in rural parts of its service area and offer wireless service instead.

“We have a voice replacement service now, so that allows us to look at our options around the footprint […] and begin the work of starting to shed some of that footprint and reduce the number of square miles that have that fixed infrastructure in place [where] you’re never going to have an incentive to ultimately upgrade to fiber,” Stankey told investors, quickly correcting himself over use the word ‘never’ in favor of “the next several years.”

“The best way to serve them is with robust wireless infrastructure and stepped up investment in that case and we will do that,” he added.

AT&T has been testing fixed wireless replacement phone service in parts of the southern United States for several years, to very mixed reviews. In these trials, AT&T rural landline customers receive a wireless modem that connects with existing home phone lines. Internet service is provided over AT&T’s 4G LTE network.

Stankey

AT&T ceased marketing its DSL service last October, although some Stop the Cap! readers claim they still occasionally receive targeted invitations for DSL service in some areas. The company has allowed its current rural DSL customers to keep their service, but many don’t. The company lost almost 39,000 DSL customers in the first three months of this year, with so signs of stopping. Across AT&T’s landline footprint, which extends from the Great Lakes region to the South as far west as Texas and east to Florida, there are only about a half-million AT&T DSL customers remaining. Most of those customers keep the service because they have no other options.

If AT&T wins FCC approval to decommission its wired network in rural areas where it has no plans to provide fiber to the home service, customers will lose traditional landline phone service and DSL.

Stankey said any serious effort in that direction is unlikely to begin until 2023, largely because AT&T will not make the investments to bolster its rural wireless infrastructure until then.

The CEO also foreshadowed no immediate plans to follow Verizon into the 5G wireless home internet business. In fact, Stankey admitted AT&T’s network is likely inadequate to support the data demands of home broadband customers.

That leaves rural customers in AT&T’s service areas with no hope of high-speed upgrades unless a community broadband provider launches or a cable operator agrees to wire rural areas. There are still questions about the capacity next generation satellite internet service will have in rural areas and whether service will be adequate to meet today’s data demands.

AT&T’s customers in urban and major suburban areas have a brighter future, however. Stankey told investors AT&T will expand its fiber to the home service to another three million households in 2021 and at least four million more in 2022. Overall, AT&T plans to provide fiber service to around 30 million homes and businesses in its wireline service area. If adequate returns on investment can be realized, along with reduced upgrade costs to reach each home, Stankey suggested another 10 million customer locations could one day see fiber service as well.

Maine Raises the Bar on Public Broadband: Will Fund Projects Offering 100/100 Mbps

Maine’s broadband internet authority is proposing major changes to win public financing of broadband projects in the state, demanding better speeds and performance and giving more Maine communities the potential to construct their own public internet projects.

The ConnectMaine Authority (ConnectME), which traditionally modestly funds a variety of smaller scale internet projects in the state, wants to think big now that it has a budget over fifteen times its original size. With at least $15 million to spend this year and potentially tens of millions in federal broadband funding to manage, courtesy of Congress and the Biden Administration, the authority wants to make certain future projects can deliver the scale and service consumers need in the 21st century digital economy.

In April, ConnectME’s board voted to propose changing the criteria for broadband funding awards, now insisting that projects be capable of delivering at least 100/100 Mbps service, which is four times faster than the FCC’s current minimum definition of downstream broadband. The board hopes the faster speeds will be future-proof and more realistic of what consumers need to telecommute and access online classes, streaming video, and other high bandwidth services. The result of the proposed standards would likely require all future projects to be fiber to the home, although historically the vast majority of broadband projects funded by ConnectME in the past have been fiber to the home.

The authority has also proposed expanding the definition of what represents an “unserved/underserved” area qualified to receive public funding to include any address that lacks access to at least 50/10 Mbps service, up from the current standard of 25/3 Mbps. Such a change would likely open up funding in areas where only DSL service or wireless internet is currently available. Most cable operators can meet the new standard, so their territories would likely remain closed to public funding. Opposition from the state’s telephone companies was almost instant, however, represented in comments from Ben Sanborn, executive director of the Telecommunications Association of Maine, a state telecom lobbying group.

Sanborn considers the proposed changes negative because public dollars could end up funding competitors in areas already served by lower speed providers.

“Arguably, there are going to be a whole bunch of areas in the state that will be eligible for funding either from ConnectME or with federal dollars,” Sanborn told the Press Herald. “Our concern with that is that it is going to create a situation of overbuilding existing networks,” which could leave currently unserved areas out of getting any funding for service.

At present, about 11% of Maine homes still have no internet access, mostly in rural areas. Traditionally, telephone companies or co-op telecom providers are the most likely to provide rural internet service, but the costs to reach those not currently served can be prohibitive. Cable operators have been the least likely to extend service in rural areas, and cash-strapped telephone companies have been reluctant to replace rural copper wire networks that can extend for miles with fiber optics, just to reach a few dozen homes. As broadband penetration increases, the cost to reach remaining unserved homes typically rises as they are often the most costly to reach. Subsidy funding can make a considerable difference when determining the cost/benefit analysis of expanding service to these homes.

The authority is also hoping to inspire existing providers to adopt 100/100 Mbps as the new broadband speed minimum across the state, which it claims will meet the needs of customers. For cable providers, that likely will not happen until upgrades to DOCSIS 4.0 are implemented, unlikely in the short term. Cable broadband networks are designed to deliver much faster downstream speeds at the expense of uploads.

The newly available funds are likely to achieve a significant increase in the number of rural homes served, but probably will not be enough to achieve 100% penetration.

ConnectME plans a public hearing to discuss the proposed changes on May 13, with a final vote scheduled for later this month.

Frontier Exits Bankruptcy on Friday; Company to Focus on Gradual Fiber Upgrades

Frontier Communications is scheduled to announce its emergence from bankruptcy reorganization as early as Friday, beginning a new era with a reduced debt load, new leadership, and a plan to retire a considerable amount of its copper wire network in favor of fiber optics over the next decade.

“Frontier is ready to set a new course as a revitalized public company. Through the restructuring process, the company has stabilized its business and recapitalized its balance sheet, while making significant progress on the early stages of implementing our initial fiber expansion plan,” said John Stratton, incoming executive chairman of the board. “Frontier’s success with the Fiber-to-the-Home pilot program, which upgraded more than 60,000 locations from copper to fiber optic service in 2020, is just one example of the important work already underway. Frontier’s future is bright. I’m eager to work closely with our new board, our CEO Nick Jeffery, and the rest of the leadership team to build the new Frontier.”

As part of its reorganization, Frontier shed nearly $10 billion in debt, most attributable to its earlier buying spree of castoff landline customers formerly served by AT&T and Verizon. The company’s budget busting 2016 acquisition of Verizon service areas in California, Texas, and Florida was called “a textbook case of how not to do an acquisition,” by The Dallas Morning News

For at least a decade covering 2010-2020, Frontier was regarded as one of the worst phone companies in America in consumer surveys. Most of its legacy customers still suffer with Frontier’s dilapidated and deteriorating copper wire network and the slow speed DSL service barely supported on it. Speeds of 1-3 Mbps maximum are still common in some places, even in urban areas. Frontier’s acquisition of Verizon FiOS and AT&T U-verse service areas in states like Indiana, Washington, Connecticut, Florida, Texas and California gave a minority of customers access to pre-built fiber to the home networks, but Frontier’s notoriously poor switchover from Verizon and AT&T’s billing systems to their own effectively drove off hundreds of thousands of formerly loyal customers.

Under the leadership of former CEOs Maggie Wilderotter and Dan McCarthy, Frontier dragged from one quarter to the next, promising improvements that failed to materialize for most customers. The company’s $10.5 billion acquisition of landlines in California, Texas and Florida was particularly costly as the company sold bonds offering astonishing 10.5-11% interest rates to investors to cover more than $5 billion in debt coming due for repayment. A year after the Verizon deal, a half million Frontier customers left for good and the company lost $262 million.

Frontier’s latest fiber plan is to target upgrades in its legacy service areas, noted in blue on this map. These areas are all almost entirely served by copper wire, provide slow speed DSL, and are long overdue for fiber upgrades. Frontier will also expand fiber in its acquired service areas, represented by other colors on the map. Note that Frontier sold its Pacific Northwest region, marked by the red box, to Zipply Fiber, which also plans to scrap Frontier’s copper wire network in favor of fiber. (Map courtesy of Light Reading)

By the time bankruptcy was inevitable, Frontier was saddled with billions in debt and no financial ability to embark on fiber upgrades the company should have committed to a decade ago. Almost all of its existing fiber footprint was acquired from other companies.

Stratton

Frontier’s new management includes John Stratton, a former Verizon executive. Stratton believes Frontier’s future depends on the company expanding its fiber footprint. In 2020, it put that plan to the test by expanding fiber to the home service to 60,000 additional homes in a pilot project proving Frontier can plan and execute fiber upgrades on time and on budget. But a closer look at the numbers shows the majority of homes Frontier “upgraded” were brand new. Of the 60,000 homes, 44,000 were located in new housing developments or were unwired previously. These “greenfield” locations are typically easier to provision and much less expensive to service than pre-existing homes where Frontier first needs to decommission its existing copper wiring and replace it with fiber optics. Only around 16,000 pre-existing homes saw copper wire replaced with fiber in so-called “brownfield” locations.

For Frontier to succeed, it will need to move a lot more copper customers to fiber optics to remain competitive in the marketplace. Currently, Frontier serves approximately three million fiber homes and 11 million copper homes. Frontier is expected to announce fiber upgrades for an additional six million homes and target about 85% of its footprint to be serviced by fiber… eventually.

Some proposals hint the company could take five years or more to complete upgrades at the same time independent fiber to the home providers, next generation satellite internet, and wireless home 4G/5G internet plans are expanding. Much of Frontier’s service area is serviced by cable companies already providing high speed internet. Frontier’s plan assumes it will capture about 40% of the market — a tall order in communities like Rochester, N.Y., where dominant cable provider Charter Spectrum is assumed to have 70+% of the home broadband market. When competing fiber providers enter the market, Spectrum often slashes promotional pricing to $30 a month for 400 Mbps internet service for two years. Spectrum will probably offer similar pricing in newly competitive markets to retain customers threatening to cancel service and switch to Frontier.

Frontier plans to discuss its exit from bankruptcy and where the company will go in the future in a webcast presentation this Friday, April 30, 2021 at 10:00am ET.

AT&T Stops Selling DSL Service

Phillip Dampier October 5, 2020 AT&T, Broadband Speed, Consumer News, Rural Broadband 3 Comments

AT&T stopped accepting orders for traditional DSL service from customers across its landline service area on Oct. 1, and will no longer allow existing customers to change speeds or transfer DSL service if they move to a new address.

AT&T sells three classes of wired internet service to residential customers:

  • DSL: Traditional, old-fashioned DSL is sold primarily in rural and exurban areas that were never upgraded to AT&T’s U-verse service. Download speed is typically between 1-6 Mbps. This service is no longer available to new customers.
  • U-verse: AT&T’s fiber-to-the-neighborhood service delivers 24 Mbps or faster download speed. AT&T uses fiber optic cables between the central switching office and the customer’s neighborhood, where it connects with existing copper wiring that runs down your street and into your home. Most AT&T internet customers are still served by U-verse.
  • Fiber: About 4.3 million former U-verse customers have been upgraded to AT&T Fiber, the company’s fiber to the home service. This upgrade eliminates the copper wiring that runs to your home, which provides for vastly faster internet speeds.

Only AT&T’s DSL service has been discontinued. The company claims about a half million customers still get DSL service from AT&T as of the second quarter of 2020. Most don’t choose DSL by choice. It is often the only option, because the customer lives in a rural area where no other options for internet service exist. That may leave some new customers with no options for wired internet service at all.

“We are focused on enhancing our network with more advanced, higher speed technologies like fiber and wireless, which consumers are demanding,” AT&T said in a statement. “We’re beginning to phase out outdated services like DSL and new orders for the service will no longer be supported after October 1. Current DSL customers will be able to continue their existing service or where possible upgrade to our 100% fiber network.”

AT&T has been slowly expanding its wireless 4G LTE home internet service in select rural areas, but the service is unlikely to reach all the areas now shut out of DSL service.

While AT&T’s rural customers have been left behind, prices for AT&T Fiber are coming down, at least for new customers. Spectrum and Comcast have offered attractive new customer promotions in areas served by AT&T, and the phone company is now responding with better offers. New customers can now get 100 Mbps from AT&T Fiber for $35 a month, 300 Mbps for $45 a month, and 1,000 Mbps for $60 a month (all promotions good for 12 months and do not include equipment fees or taxes).

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