A research report sponsored by the National Cable & Telecommunications Association, the nation’s largest cable lobbying group, has concluded that millions of broadband stimulus dollars are being wasted by the government on broadband projects that will ultimately serve people who supposedly already enjoy a panoply of broadband choice.

Navigant Economics, a “research group” that produces reports for its paying clients inside industry, government, and law firms, produced this one at the behest of a cable industry concerned that broadband stimulus funding will build competing broadband providers that could force better service and lower prices for consumers.

• More than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers. In one of the project areas, more than 98 percent of households are already passed by at least one of these modalities.

• In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high. When existing mobile wireless broadband coverage is taken into account, the $231.7 million in RUS funding across the three projects will provide service to just 452 households that currently lack broadband service.

Navigant’s report tries to prove its contention by analyzing three broadband projects that seek funding from the federal government.  Northeastern Minnesota, northwestern Kansas, and southwestern Montana were selected for Navigant’s analysis, and unsurprisingly the researcher found the broadband unavailability problem overblown.

The evidence demonstrates that broadband service is already widely available in each of the three proposed service areas. Thus, a large proportion of each award goes to subsidize broadband deployment to households and regions where it is already available, and the taxpayer cost per unserved household is significantly higher than the taxpayer cost per household passed.

The cable industry funds research reports that oppose fiber broadband stimulus projects.

But Navigant’s findings take liberties with what defines appropriate broadband service in the 21st century.

First, Navigant argues that wireless mobile broadband is suitable to meet the definition of broadband service, despite the fact most rural areas face 3G broadband speeds that, in real terms, are below the current definition of “broadband” (a stable 768kbps or better — although the FCC supports redefining broadband to speeds at or above 3-4Mbps).  As any 3G user knows, cell site congestion, signal quality, and environmental factors can quickly reduce 3G speeds to less than 500kbps.  When was the last time your 3G wireless provider delivered 768kbps or better on a consistent basis?

Navigant also ignores the ongoing march by providers to establish tiny usage caps for wireless broadband.  With most declaring anything greater than 5GB “abusive use,” and some limiting use to less than half that amount, a real question can be raised about whether mobile broadband, even at future 4G speeds, can provide a suitable home broadband replacement.

Second, Navigant’s list of available providers assumes facts not necessarily in evidence.  For example, in Lake County, Minnesota, Navigant assumes DSL availability based on a formula that assumes the service will be available anywhere within a certain radius of the phone company’s central office.  But as our own readers have testified, companies like Qwest, Frontier, and AT&T do not necessarily provide DSL in every central office or within the radius Navigant assumes it should be available.  One Stop the Cap! reader in the area has fought Frontier Communications for more than a year to obtain DSL service, and he lives blocks from the local central office.  It is simply not available in his neighborhood.  AT&T customers have encountered similar problems because the company has deemed parts of its service area unprofitable to provide saturation DSL service.  While some multi-dwelling units can obtain 3Mbps DSL, individual homes nearby cannot.

Navigant never visited the impacted communities to inquire whether service was actually available.  Instead, it relied on this definition to assume availability:

DSL boundaries were estimated as follows: Based on the location of the dominant central office of each wirecenter, a 12,000 foot radius was generated. This radius was then truncated as necessary to encompass only the servicing wirecenter. The assumption that DSL is capable of serving areas within 12,000 is based on analysis conducted by the Omnibus Broadband Initiative for the National Broadband Plan.

Frontier advertises up to 10Mbps DSL in our neighborhood, but in reality can actually only offer speeds of 3.1Mbps in a suburb less than one mile from the Rochester, N.Y. city line.  In more rural areas, customers are lucky to get service at all.

Cable broadband boundaries were estimated based on information obtained from an industry factbook, which gathered provider-supplied general coverage information and extrapolated availability from that.  But, as we’ve reported on numerous occasions, provider-supplied coverage data has proven suspect.  We’ve found repeated instances when advertised service proved unavailable, especially in rural areas where individual homes do not meet the minimum density required to provide service.

We’ve argued repeatedly for independent broadband mapping that relies on actual on-the-ground data, if only to end the kind of generalizations legislators rely on regarding broadband service.  But if the cable industry can argue away the broadband problem with empty claims service is available even in places where it is not (or woefully inadequate), relying on voluntary data serves the industry well, even if it shortchanges rural consumers who are told they have broadband choices that do not actually exist.

Navigant’s report seeks to apply the brakes to broadband improvement programs that can deliver consistent coverage and 21st century broadband speeds that other carriers simply don’t provide or don’t offer throughout the proposed service areas.  The cable industry doesn’t welcome the competition, especially in areas stuck with lesser-quality service from low-rated providers.

Stop the Cap! readers will recall we pulled the plug on Frontier Communications with the disconnection of our landline back in early February.  After at least 25 years doing business with Rochester Telephone Corporation, later Frontier-Global Crossing, later Frontier-Citizens Communications, we had enough.  Frontier Communications has done nothing of merit for the metropolitan Rochester, N.Y., area since the late 1990s.  Their DSL broadband service is handily beaten in quality, reliability, and price by cable competitor Time Warner Cable, and Frontier’s lack of willingness to invest in something better for their largest service area of nearly one million people in western New York has left us cold.  After a one week experiment with Frontier’s DSL service in 2009, we dropped the service like a hot potato after it achieved an underwhelming 3.1Mbps in the town of Brighton, less than one mile from the Rochester city line.

In early February, our last remaining service — the landline — was transferred to Time Warner Cable.  But even on the way out the door, Frontier continued to disappoint.  After more than two months (and two invoices later), Frontier had still not refunded our credit balance of $26.09.  We’re a long way from Rochester Telephone, a well-regarded predecessor to Frontier which traditionally enclosed a refund check with the final bill.  Frontier makes you wait, and wait, and wait some more, reminding you they owe you money with repetitious “do not pay – credit balance” invoices for long-terminated service.

More than two months after disconnecting service, our refund check finally arrives!

On Monday, the refund check finally arrived, in an obscure envelope resembling one of those PIN reminders banks send you.  After tearing away three sides of perforated strips, there it was — $26.09 from Frontier Communications.

The long wait is hardly a random glitch.  Stop the Cap! covered the story of a Frontier customer in California who waited several months for the phone company to refund her just over $15, and just this evening we heard from one of our regular readers in Rochester disappointed by Frontier’s hardly-rapid refund policy.

The only good news is that we weren’t overbilled on the way out the door, as one Elk Grove, Calif. customer was — to the tune of $680.

To Frontier we say goodbye and good luck (and we’ll be cashing that check faster than you sent it).

Fast is in the eye of the beholder

Obtaining broadband in rural America can be a real challenge, but few rise to the occasion more than Stop the Cap! reader Paul, who lives in Blaine, Tenn.  Paul so wanted broadband service, he was willing to pay for his own telephone poles and equipment to get Frontier Communications to provide him with DSL service, even though he technically lives in AT&T territory.

Paul’s saga, documented on his blog, began in 2009, when his satellite fraudband provider Optistreams could no longer manage reliable uploading of images and maps for his employer, despite the fact he was paying nearly $150 a month for the service.  Satellite providers are having a tough time providing customers access to an increasingly multimedia rich Internet.  With low usage caps and ridiculously low speeds, most satellite customers we’ve heard from report their experiences to be frustrating, at best.  For Paul, in rural Grainger County, it had become intolerable. Verizon, the best possible wireless option, delivered one bar to the farm country Paul lives in — unsuitable for wireless data service.

Paul called his local phone company, AT&T, and inquired about when the company would extend its DSL service to his part of Blaine.

AT&T answered Paul succinctly:  “[We will] never provide DSL within 20 miles of your location.”

Paul’s property is situated right on the boundary between AT&T and Frontier Communications’ service areas.  AT&T provides service at Paul’s home, but Frontier Communications’ territory starts just 1,400 feet away, on the other end of his property.  In-between is a telecommunications no-man’s land.

Paul pondered emigrating his service from the Republic of AT&T to the Fiefdom of Frontier, which does offer DSL nearby.

Paul lives in Grainger County -- a Frontier Communications territory surrounded by the former BellSouth, today owned by AT&T.

AT&T told Paul he could leave them anytime he liked, taking his broadband business to Frontier.  Besides, nothing precluded him from doing that with or without AT&T’s consent, informed AT&T’s Eastern District Counsel.

Declaring allegiance to Frontier would be no easy matter, however.  Would Frontier allow him to settle down as their broadband customer?

“After a bunch of arguing with Frontier District Manager Mike Bird he sent District Engineer John Simpson out to my home,” Paul says.  “Simpson informed me that I was in AT&T territory and that ended all conversations.  I stated that AT&T had advised they had no problem and further there was no government regulation.  Didn’t matter I was told, that was that.”

Few, if any phone companies will agree to trespass on another provider’s turf, except under the most special circumstances.

Paul contacted Sen. Bob Corker (R-Tenn.) to escalate the matter, and followed up with an official complaint to the Federal Communications Commission.

Federal agencies like the FCC become particularly responsive when a United States Senator is involved in monitoring the dispute.  AT&T responded to the complaint telling the Commission Paul had effectively fled their service area and was now a customer of Frontier Communications.  Frontier ignored the FCC initially, and instead sent Paul a letter affirming they would be willing to provide him with DSL, but at a “go away” installation price of $10,000.

When providers confront unprofitable customers difficult to serve, it is often easier to give them a sky high installation price with the hope it will discourage them from pursuing the matter.  Frontier claimed the costs of running infrastructure to reach Paul would amount to $9,977.44 — check or money order, please.

From Gregg Sayre, Frontier’s Eastern Region Associate General Counsel:

“As you know, you are in the service territory of AT&T.  AT&T is correct that we legally can provide service to you outside of our local service territory.  Unfortunately, the cost of serving you… if fully absorbed by Frontier, would overshadow the potential profits.  …In this case it does not make economic sense for us to undertake a line extension at our expense into AT&T’s service territory to reach your location, and the law does not require us to do so.”

“I countered with the fact that we would run the poles along the roadway and they could pay our pole attachment agreement.  They balked,” Paul writes.  “We, in turn, stated we would bring our own infrastructure to them underground and across a friend’s farm and did such for a quarter of the price.  This included running our own network interface at their pole and our house.”

In the end, Paul paid out of pocket for 1,600 feet of direct burial cable running across two farms and a county road.  He assumes responsibility of his cable, Frontier is responsible for the network from their pole back to the central office.

After the robust investment in time, money, and energy, what Paul ended up with wasn’t worth a dollar:

Frontier DSL in East Tennessee: 205kbps/142kbps

That’s worse than most satellite providers.

In fact, Paul has documented much of the time he is without any service at all — offline at least 38 of the last 50 days.

“Our average speed until they installed a new D-SLAM was 92kbps down and 125kbps up,” Paul writes.  It wasn’t just a problem for him.  Among Frontier’s loyal subjects already a part of their service area, customers also reported similar slow speeds.  Paul organized a door-to-door campaign to bring a united front of complaints to company officials.

Paul notes the local Frontier technicians have been responsive and understanding, but Frontier officials higher up are simply dragging their feet on needed upgrades.  Finally, $200 in service credits later, Frontier is promising to install a fiber cable to reduce the distance between the central office and the more distant points in the exchange where Paul and his neighbors live.  While that might help bring Paul’s speeds up, Frontier is notorious for overselling their network, leaving customers in large regions with slow service at peak usage times.  This has particularly been a problem in nearby West Virginia.

Paul says Frontier is largely unresponsive to individual complaints.

“I racked up well over 170 repair tickets in six months,” Paul shares.  “I organized my rural area and we hammered their call center. Did that do anything? Well, I can’t honestly say it did.”

With Frontier, it takes media exposure and embarrassment or the work of individual employees willing to persistently push higher-ups to authorize real solutions to customer problems, not temporary Band-Aids.

Broadband over a telephone network that is decades old requires substantial investments to function well.  In rural areas where customers have few choices, phone companies delivering service on the cheap too often leave paying customers with a quality of service highly lacking.

While AT&T is placing limits on their broadband customers, the people of Lithuania are celebrating news that the part-state-owned telephone company — Teo LT — is increasing broadband speeds for their customers at no additional charge.

Effective May 16th, Internet speeds of up to 300Mbps will be available from the phone company ISP – Zebra.

Teo LT has installed fiber to the home service for nearly half of Lithuania’s million-plus households, and expects to serve the majority of the Baltic nation with fiber within the next decade.  Much of the rest of the country gets DSL service.

With the speed upgrade, Lithuanians will be able to access foreign websites at the same speeds as international websites.

Lithuania is one of three Baltic states north of Poland, formerly annexed as part of the Soviet Union.

Currently, Lithuania considers its lowest quality light user plan 10/10Mbps, which it sells for a paltry $14.72 a month, for unlimited access.  But international websites used to arrive at much slower speeds under this plan — 1Mbps.  That’s why many Lithuanians chose higher speed offerings.  Now, for around $55 a month, they’ll receive 40/40Mbps service, potentially less when bundled with other products.

Lithuania sees fiber optics as their path to broadband prosperity, and seeks to retire copper wire DSL circuits as quickly as possible.  The company’s fiber network now reaches 86 percent of the capital city Vilnius, 95 percent of Klaipeda, 75 percent of Kaunas, and more than 50 percent of Panevėžys and Šiauliai.  The company, with its Swedish-owned partner Telia Sonera, has invested more than $140 million in building the network, designed to replace the country’s old copper wire telephone infrastructure now deemed obsolete.

Lithuania, formerly a Soviet Socialist Republic, declared its independence from the USSR in March, 1990 — the first Soviet Republic to do so.  Today, the country is a member of NATO and the European Union.  Lithuania has a long history of recognizing the importance of infrastructure tied to economic development, and has an extensive and modern transport system.  The country is treating broadband development much as they would treat roads and railways — as a long term investment.

The administration of President Dalia Grybauskaitė sees Lithuania’s future as a knowledge-based economy, and has restructured away from heavy industry and simple agriculture towards biotechnology and information technology businesses.

With the renewed telecommunications infrastructure, IBM built a major research center inside the country and last year Lithuania opened its first solar cell plant.  Lithuanians culturally are increasingly turning away from their former Russian occupiers and looking west, especially towards western Europe, Scandanavia and the United States.  At least one-third of Lithuanians have learned English a second language, according to a Eurobarometer survey conducted in 2005.

While many AT&T residential customers continue their exodus from the company’s forthcoming Internet Overcharging scheme, there are many rural Americans who have just one choice for broadband service — AT&T DSL.  For them, escaping usage caps is not as easy as calling the local cable company and arranging for new service.

While consumers continue to register their displeasure with AT&T over capping Internet usage at 150GB for DSL or 250GB for U-verse, there appears to be a way to get away from the usage limits while still maintaining your AT&T DSL service — switch to a usage-cap-free business account.

AT&T sells business broadband service to at-home, small, and medium-sized businesses at a substantial discount for the first year — $30 a month for up to 6Mbps.  A one year term commitment is required, but that likely won’t present any problems for customers who don’t have any other option for service.  With an AT&T modem/router already in place, making the change should just require a phone call to AT&T.

The company may offer different pricing and service plans depending on the region where you obtain service.  Former BellSouth customers may get different promotions than former Ameritech customers do.  We also found a few customers who still were able to access AT&T’s “usage measurement tool” on their business accounts, but business customers have not been notified usage caps apply to them, and we suspect that will continue to be the case.  AT&T promotes business class service at $25-30 a month in one offer we found, and service was even available to those who don’t want a business phone line.

After the first year, rates increase substantially, but we’re hopeful AT&T will learn the error of their ways and rescind their unjustified usage limits before the year is up.

Thanks to Wayne in Madison, Wisconsin for capturing these screen shots from AT&T's website.

If you are going to switch to AT&T’s business class service, share your experiences in our comment section to help other readers.