Frontier's Ann Burr sat down for an interview with a Rochester television station to discuss the future of landlines.

Frontier Communications told customers in western New York not to expect FiOS fiber-to-the-home technology from them anytime soon, claiming residents in upstate New York do not need broadband speeds that fast.  That prompted regular Stop the Cap! reader Bob in Rochester to drop us a note.

Ann Burr, general manager of Frontier’s Rochester division, told WHAM-TV reporter Rachel Barnhart the company believes its current DSL service is more than adequate for residents in the company’s largest service area.  This, despite the fact Frontier recently adopted a handful of FiOS markets purchased from Verizon Communications.  While Frontier has promised to continue delivering the fiber-to-the-home service in areas already offered the service started by Verizon, they have no plans to expand FiOS.

“We’re constantly upgrading our local networks to make sure they can get higher and higher speeds,” Burr told Barnhart. “Fiber lines are installed in newer developments, and neighborhoods that report problems with DSL lines get attention from technicians.”

With Frontier’s DSL service already available in 95 percent of Frontier’s Rochester-area division, Burr added, there is no need to offer FiOS in Rochester.

Burr, who was formerly president of Time Warner Cable’s Rochester division from 1995-1999, has made similar remarks in the past.  In February, she told readers of the Rochester Democrat & Chronicle they didn’t need ultra-fast broadband speeds from Frontier either.

from 'The Bridge'

Yet Verizon, one of the nation’s largest phone companies, thinks otherwise.  In upstate New York, the company is still completing its fiber optic network in cities like Albany, Buffalo, and Syracuse.  Verizon FiOS remains a top-rated favorite among readers of Consumer Reports.  Frontier’s DSL managed a less impressive 12th place.

Barnhart learned about Frontier’s broadband plans as part of a larger story about how the phone company will survive the age of the cell phone, as local customers continue to disconnect their Frontier landlines in favor of wireless service from providers like Verizon and AT&T.

Burr warned customers to think twice before disconnecting service.

“Don’t do it. Because I’ve personally been in a situation where my home was without power for a couple of days and you have to recharge cell phone batteries, which you can’t do if you don’t have power,” Burr said.

Burr can’t see a day when no one has a landline phone any longer.

“I don’t see that for a long time. I think that wired phone, copper infrastructure that’s been here for many years provides [the] security [and] reliability that people want,” she said.

Burr’s beliefs are contrary to industry statistics that show Americans continue to drop landline service.  Among those under 30, it’s sometimes hard to find anyone who has a landline at all.

The Bridge reports in the second quarter of 2010 alone, just three phone companies — AT&T, Verizon, and Qwest lost nearly 1.5 million landline customers, mostly to cell phone service and competing “digital phone” products offered by the cable industry.

Consumer Reports says its readers gave top marks to Verizon FiOS for its speed, selection, and service. Frontier didn't make this list at all.

[flv]http://www.phillipdampier.com/video/WHAM Rochester Will Frontier Communications Survive in Cell Phone Age 9-15-10.flv[/flv]

WHAM-TV’s Rachel Barnhart talked with local residents who have disconnected their Frontier landlines and spoke with Frontier’s Ann Burr about the long term prospects for a company primarily delivering that service.  (2 minutes)

A British financial analyst has issued a new report telling phone companies they should forget about fiber optic upgrades — copper-based DSL service is adequate for consumers and doesn’t bring shareholders fits over capital expenditures.

Analysys Mason’s Rupert Wood believes companies are at risk of overspending on fiber networks that deliver speeds he claims few consumers want.

“The vague promise of future services may appeal to some early FTTH adopters, but will become increasingly ineffective as a selling point unless the rate of innovation in devices and services that are uniquely suitable for FTTH gets some new impetus from vendors and service providers,” writes Wood. “The future cannot be simply plotted against increasing fixed-line bandwidth.”

Wood believes wireless 3G and 4G broadband is where innovation and demand is greatest.  It also just happens to be where the biggest money can be made.  Providers can charge premium prices for wireless services while limiting access.

Wood

For at-home Internet, Wood believes copper-based DSL is fine for most consumers.  Wood points to American providers offering super-high-speed broadband tiers that attracts few buyers as proof there is little interest in ultra-fast connections.  DSL is cheap to provide, he argues.  Fiber is just ‘too risky’ and Wood suggests it’s not as “future-proof” as wireless.

So what should providers do with their fiber networks?  Short of abandoning them altogether, Wood recommends operators pull back on fiber roll-outs and deploy them only for experimental purposes.

“Conditions vary between markets, but in general the business case to move much beyond trials just isn’t there and we are already beginning to see some scale-back,” explains Wood.

“Bandwidth demand for fixed broadband is converging with the bandwidth required to stream TV, and its rate of growth will slow down,” he adds. “DSL [technology] might not be able to meet these demands at some point in the future, but we believe that this point is still a long way off.”

If you want to read more, it will cost you €5500 to purchase a copy of “FTTx roll-out and capex in developed economies: forecasts 2010–2015.”

Our analysis comes for free.

Wood ignores the most important reason why Americans are not signing up for ultra-fast premium speed tiers in droves — the current “early adopter” price tag.  Few consumers are going to justify spending $99 a month or more for the highest speed connections.  When price cuts deliver faster service at incrementally higher pricing, perhaps $10-20 for each step up, there will be greater demand.  If America was not interested in higher speed networks, Google’s proposal to build a 1Gbps fiber to the home system would have passed by without notice.  Instead, more than 1,100 communities applied to be chosen for the project, including just about every American city.

Wood’s report primarily speaks to a European market, where the majority of broadband connections come through telephone company DSL or wireless.  In the United States, the cable industry heavily competes with phone companies for broadband customers.  That is much rarer in Europe.  Wood’s claim that consumers care little about speed is belied by marketing campaigns that put cable broadband’s speed advantage front and center, and they have the market share to justify it.

In North America, although Wood’s report may be music to phone companies’ ears, refusing to upgrade copper phone networks comes at their peril.  Americans and Canadians are disconnecting their landlines at an increasing rate, abandoning those that abandoned innovation long ago. Cable operators report many of their new broadband customers come from those disconnecting slower speed DSL service from copper-loving phone companies.

The future is clear — sticking with standard DSL over copper phone lines in competitive markets is a losing proposition unless phone companies begin slashing prices to become a value leader for those who want more savings than speed.

Verizon determined the best way to “future proof” its network was to deploy fiber straight to the home in many areas.  Verizon’s vision carries a price tag analysts like Wood and those on Wall Street don’t like because it challenges short term profits.  But with Americans increasingly saying goodbye to their landline providers, not upgrading networks to give customers a reason to stay is penny wise and pound foolish.

When Midwest Publishing couldn't get their AT&T Internet service restored, a business neighbor allowed the company to run a cable next door and borrow theirs.

AT&T likes to think of broadband as a tool towards economic recovery, but too often service problems end up hurting small businesses.

Ask Pat Boll, business manager of Midwest Publishing.  When his company’s AT&T business broadband connection suddenly stopped working last week, much of the business activity at the company stopped with it.  Midwest Publishing, like many small businesses, depends on the Internet to conduct business, take orders, and assist customers.

Boll spent three days trying to get answers from AT&T customer service, but only managed to learn the reason why the company’s Internet service stopped working: AT&T claimed a disconnect order entered into their systems in May was processed… in late August.  That was news to Boll, because they never asked for their service to be shut off.

What was worse is that the mysterious disconnect order remained in AT&T’s computer systems preventing the telecommunications company from re-establishing the service, costing Midwest Publishing thousands in lost business and wasted time.

Like so many stories we’ve covered on Stop the Cap!, Boll turned to local media for help.  He contacted Tulsa TV station KJRH-TV.  Their “2 Works for You Problem Solvers” got in touch with AT&T and managed to do what Boll couldn’t accomplish himself — get AT&T to turn Internet service back on.

Small businesses who depend on the Internet should never have only one provider.  Having a backup service provider can make all the difference in an extended outage.  Many small businesses maintain basic DSL service or even wireless broadband as a backup in case their primary connection stops working.  The expense is well worth it if your business depends on the Internet to stay in business.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KJRH Tulsa Internet glitch costs small business thousands 9-2-10.flv[/flv]

KJRH-TV in Tulsa shares Pat Boll’s story with Tulsa viewers.  AT&T provides DSL service through much of Oklahoma.  (2 minutes)

A new report published by the Federal Communications Commission this week finds Americans are being ripped off by their broadband providers who promise speeds 50 percent faster than they actually receive.

In a generically named report, “Broadband Performance,” the FCC finds Americans love spending increasing amounts of time on the Internet, but face providers making bogus marketing claims for speeds they’ll never actually receive.

In 2009, average […] advertised download speeds were 7–8 Mbps, across technologies. However, FCC analysis shows that the median actual speed consumers experienced in the first half of 2009 was roughly 3 Mbps, while the average (mean) actual speed was approximately 4 Mbps. Therefore actual download speeds experienced by U.S. consumers appear to lag advertised speeds by roughly 50%.

[…] The “up to” speed, however, does not provide an accurate measure of likely end-user broadband experience. That experience depends on multiple factors, including the actual speed that consumers realize, taking into account the impact of network congestion; and other metrics like the availability of the network, latency, jitter and packet loss. In other words, consumers need a better, publicly agreed upon measure of broadband performance that reflects the network operation and end-user experience.

No surprises here - the FCC found fiber delivered the fastest broadband speeds with wireless and satellite service delivering the slowest

Providers in several countries have been called to account for marketing claims that never seem to be realized by customers.

For years, providers have relied on the weasel words “up to” to escape charges of outright misrepresentation of their products.  The FCC doesn’t believe the status quo properly informs consumers about true broadband speeds, especially when comparison shopping.

Some of the widest gaps between advertised and actually delivered speeds came from telephone company DSL service.  Many phone companies define their maximum speeds based on theoretical maximums, not the actual average speeds encountered by customers.  While some providers claimed up to 10Mbps service, they only actually delivered up to 3Mbps to many customers.

The report recommends new disclosures, including average actual speeds delivered to customers, what kind of speeds customers can expect during peak usage times, and what speeds consumers will encounter while using certain online applications.

Speeds can make all the difference for certain classes of broadband users, also defined in the FCC report:

➤ Advanced. These consumers use large amounts of data and tend to use the highest quality voice, video, and other cutting-edge applications.

➤ Full media. These consumers are moderately heavy users of broadband and mobile applications, seeking to access high-quality voice, data, graphics, and video communications but, typically not in the most cutting-edge forms.

➤ Emerging multimedia. These consumers utilize some video and graphical content but still see the Internet primarily as a way to communicate and access news and entertainment in a richer format than found in offline content.

➤ Utility. These consumers are largely content to access the Internet for basic news, communication, and basic entertainment.

The New America Foundation thinks the gulf between promises and reality has grown so large, it’s time to bring “The Schumer Box” to broadband.  Named after Sen. Chuck Schumer (D-NY), the “Schumer Box” was made a part of every credit card application and cardholder agreement.  It breaks out in large print fact-based disclosures to consumers about what kind of service and pricing to expect.  The Foundation wants consumers to have truth-in-labeling introduced for Internet users who will be able to comparison shop providers more effectively.

One consumer group wants a credit card-style disclosure of broadband speeds and policies

While the FCC’s findings may not reach the level of credit card-style disclosures, the agency does recognize there is a significant problem with providers misrepresenting their broadband speeds.

The report also found consumers are increasing their amount of monthly usage, often correlated to the speeds they receive.  Those with the fastest broadband accounts consume the most (and typically also pay the most for service).  Those with slower speeds consume less.

That finding supports the contention among many consumer groups that today’s speed-based broadband tiers fairly compensate providers for customer usage.  Those who use the most pay the most for the fastest speeds. Those who use the least pay lower prices for lower speed tiers.

The agency also rated fiber to the home America’s fastest broadband technology, followed by cable broadband, then DSL service, and finally wireless/satellite-delivered service.

An increasing number of Verizon’s DSL customers are discovering their broadband speeds cut, sometimes significantly, by the phone company’s internal line testing “optimization” tool, designed to deliver stable DSL service over a deteriorating, aging network of copper phone lines.

Regular Stop the Cap! reader Smith6612, who is extremely familiar with the technical workings of DSL service, dropped us a note to report a disturbing trend of complaints from Verizon customers who are waking up to speed cuts that often don’t make sense.

At issue here is the highly variable nature of DSL speed and how providers manage it for customers.  Data delivery over America’s aging copper wire, meant-for-voice-calls-network has always been somewhat of a bootstrapped affair, all the way back to the days of dial-up.  Most phone companies have always included detailed disclaimers for customers relying on a phone network envisioned more than 100 years ago for 21st century data communications.  No guarantees on speed or access are among the most common, especially with DSL service which is highly distance and line quality sensitive.

In short, the further away you live or work from the phone company’s exchange (where your individual phone line eventually ends up), the lower the speeds that line can support, if it can support DSL service at all.  Badly managed wiring along the way can dramatically reduce the quality of your service.  Sammy the Squirrel could chew enough insulation off a phone cable to expose it to interference from radio signals.  Water finding its way into cables and connection boxes can turn excellent DSL service into no service at all during bad weather.  Even temperature variations between seasons can eventually corrode, degrade, or destroy fittings, connectors, or any number of vital components necessary for good service.

Unfortunately, if companies do not properly invest resources to maintain their legacy phone networks, service problems are bound to increase sooner or later.

Many DSL customers do not really have an understanding of what speeds they should be getting from their providers, much less be able to easily identify when those speeds have declined.  But they do understand service outages.  When a DSL modem runs into trouble supporting the speeds it is configured for, the unit will try to re-establish the connection.  This “sync” process can occur once a day or continuously — it all depends on what condition the line is in.

While this process is underway, anyone trying to use the Internet is likely to find their service unavailable.  That often results in a service call.

Calling to complain about a troublesome Internet connection is expensive — even when reaching one of the overseas call centers Verizon regularly uses for customer support.  Sending a repair truck to your home is even more costly.

One way to reduce these expenses, without upgrading or improving maintenance of your network, is to simply reduce the speed of the connection.

Verizon ironically calls their line testing process “optimization.”  Verizon’s software is designed to ascertain the maximum possible downstream and upstream speeds a line can continually support.  Those measurements are used as a basis for configuring the customer’s modem, placing a speed limit on how fast of a connection to negotiate, even if a customer is paying for a faster tier of service.  The goal is to stop the modem from losing a connection.

Unfortunately, sometimes customers with no service problems at all take a hit in speed along the way. For several weeks now, many long-standing Verizon DSL customers are discovering their speeds have been reduced and are finding Verizon’s “optimization” procedures directly responsible.  Some are accusing Verizon of recently configuring connections more conservatively to avoid service calls caused, in part, by years of neglect maintaining their landline network.

Bob in North Billerica, Massachusetts has experienced a speed cut himself.

Writing on the Verizon DSL forum at Broadband Reports, he noticed years of stable service at 1.792Mbps/448kbps are no more.  His maximum download speed has been cut to 1.5Mbps.

The same thing happened to Zaii in Philadelphia — despite stable service at higher speeds, he found himself cut back to 1.5Mbps as well.

Jack in Lakeland, Florida discovered his speeds has been “optimized” nearly in half by Verizon, and the company admitted it had capped his maximum speed as part of that process.  He was paying for 1.5Mbps service and received 700kbps-1Mbps service.

“The technician [sent to my house] found I could receive 2.6Mbps but Verizon had me “optimized” at 1.2Mbps because of my location,” Jack writes.  “The technician made a call and had the “optimize” cap removed and I am back to 1.54Mbps.”

It’s the same story in Ridgecrest, California where one Verizon DSL customer suddenly noticed a dramatic speed cut.  He pays for 1.5-2Mbps service and barely manages 1Mbps these days.  A Verizon technician thought even with the sudden speed loss, his speeds were still “pretty good.”

That attitude doesn’t exactly placate Verizon customers paying for more and receiving less.

Often, technicians sent to the home find their own line tests are far more optimistic about the speeds Verizon can support.  The customer in Ridgecrest, for example, learned from a technician his line can support 3Mbps, but Verizon’s corporate “optimization” software says otherwise.

A few anecdotal reports from customers listening to Verizon field technicians suggests many of these issues are being caused by Verizon’s “optimizing” software.  Once a service call commences, knowledgeable technicians manage to override the software settings and reset the connection back to support earlier, faster speeds.  But often these changes last only a few weeks before the problem returns.

Unfortunately, Verizon’s customer service department usually seems unconcerned about speed complaints.

“SDillman” in Uxbridge, Massachusetts relayed his experiences:

I talked Verizon DSL support and got them to run a line test and they confirm the data rate they are seeing is 1.216Mbps, which is exactly what I reported. Unless it drops under 1Mbps they won’t do anything because it is considered an acceptable speed.

What stinks is that up until last week my data rate was a constant 1.792Mbps and all my speed tests showed 1.5Mbps.  I even swapped out the modem today to try my backup and got the same rate.  So I’ve lost 500k for no reason at all and there is nothing I can do about it. It wouldn’t be so bad if I never had it, but losing it just doesn’t sit right with me. I might be looking at alternate providers and or mediums of broadband in the near future because that just leaves a poor taste in my mouth.

A Verizon DSL Modem/Router

Angry, motivated customers can wreak havoc on bad customer service practices, and SDillman managed to overcome Verizon’s speed throttles and shares advice for others in the same situation:

1. Visit and register for an account on Broadband Reports.  Then visit and post a message in the Verizon Direct Support forum.  Those messages are kept private between you and a Verizon technical representative.  They have enhanced skills and authority over the traditional offshore customer service people, and in the words of “SDillman,” “are amazing — after getting the runaround from everyone else, those guys had a proper repair ticket created in no time.”
2. Carefully listen to the technicians that are sent to your home.  The technician in Uxbridge was frustrated that his service visit revealed a line in what he called “pristine condition,” yet Verizon’s “optimization” speed throttle said otherwise and was directly implicated in the speed reduction.  The frustration mounted when Verizon’s own employee encountered the same roadblocks Verizon’s customers do from overseas customer service agents.  In this case, a call center employee attempted to explain the basics of how telephone lines work to a Verizon technician with over 30 years of experience.  The technician also didn’t respond any better to arguments that 1.2Mbps was a good speed when the customer is paying for a higher level of service.
3. Most of these issues are best resolved between a Verizon service technician and employees at the central office exchange serving your home or business. Encourage a direct service call and do not accept over-the-phone assertions about speed issues, particularly from call center employees a half-world away.  If the problems go unresolved, a compliant about bad phone/broadband service filed with your state’s Public Service/Public Utilities Commission may bring about a higher level of response, even if broadband speeds are unregulated.

As SDillman shares, “For now my speeds are back up, until they ‘optimize’ the line again to try to free up some of the congestion on their crowded routers and begin stealing bandwidth [again]. I don’t know if this practice is illegal, but it certainly doesn’t pass the smell test. It feels a lot like going into a gas station and filling up your tank and then finding out 30% of it is water.”