The slow lane

Frontier Communications customers in West Virginia are part of a filed class-action lawsuit alleging the phone company has violated the state’s Consumer Credit and Protection Act for failing to deliver the high-speed Internet service it promises.

The lawsuit, filed in Lincoln County Circuit Court, claims Frontier is advertising fast Internet speeds up to 12Mbps, but often delivers far less than that, especially in rural areas where the company is accused of throttling broadband speeds to less than 1Mbps. The suit also alleges Frontier’s broadband service is highly unreliable.

“The Internet service provided by Frontier does not come anywhere close to the speeds advertised,” wrote Benjamin Sheridan, the Hurricane lawyer filing the lawsuit on behalf of three Frontier customers. The attorney is seeking to have the case designated a class action lawsuit that would cover Frontier customers across the state.

“Although we cannot guarantee Internet speeds due to numerous factors, such as traffic on the Internet and the capabilities of a customer’s computer, Frontier tested each plaintiff’s line and found that in all cases the service met or exceeded the ‘up to’ broadband speeds to which they subscribed,” Frontier spokesperson Dan Page told the Charleston Gazette. “Nonetheless, the plaintiffs filed their case in Lincoln County, where none of them lives. If necessary, we are prepared to defend ourselves in court and bring the facts to light.”

Frontier’s general manager in West Virginia, Dana Waldo, may have helped the plaintiffs when he seemed to admit Frontier was purposely throttling the Internet speeds of its customers, a move Sheridan claims saves Frontier “a fortune” in connectivity costs with wholesale broadband providers like Sprint and AT&T.

Sheridan

“If as you suggest, we ‘opened up the throttle’ for every served customer, it could create congestion problems resulting in degradation of speed for all customers,” according to Waldo as part of an email exchange with one of the class members cited in the lawsuit.

The lawsuit also cites a state report issued over the summer that found just 12 percent of Frontier customers receive Internet speeds that actually qualify as “broadband” under federal and state standards. Frontier’s speed ranking is the slowest of any provider in the state. That is especially significant because Frontier is the largest ISP in West Virginia, and is often the only choice rural residents have for broadband service.

Frontier dismissed the state’s report claiming it was based on voluntary speed tests performed by disgruntled customers.

“As we’ve said before, the speed tests are the result of self-selected, self-reported samples,” Page said. “People who take speed tests tend to be those with speed problems or low speeds.”

“Even if that were true, it doesn’t account for Frontier’s poor performance,” said Frontier customer William Henley. “If every person that ran a speed test in West Virginia was annoyed with their provider, Frontier still came in last place.”

Frontier’s competitors scored better:

• Comcast: 88% of customers met or exceeded state and federal standards;
• Suddenlink Communications: 80%
• Time Warner Cable: 77%
• Shentel: 71%
• Armstrong Cable: 67%
• LUMOS Networks: 44%

“…Frontier’s practice of overcharging and failing to provide the high-speed, broadband-level of service it advertises has created high profits for Frontier but left Internet users in the digital Dark Age,” Sheridan wrote. “As a result, students are prevented from being able to do their homework, and rural consumers are unable to utilize the Internet in a way that gives them equal footing with those in an urban environment.”

Sheridan also accused Frontier of delivering its fastest speeds only in areas where it faces competition. Where there is none, Frontier can afford to go slow.

But slow speed is not the only issue. One plaintiff — April Morgan in Marion County — says she has to reset her modem up to 10 times a day to stay connected to the Internet. Her modem has been replaced several times by Frontier, but that has done little to solve her problem.

Frontier customers who check the company’s terms of service agreement may question whether Sheridan can get very far suing the company. A clause in the contract states customers must settle disputes only through binding arbitration or small claims court. Individual lawsuits, jury trials, and class-action cases are prohibited.

Sheridan points out customers have to go online to read the agreement – it is not provided to customers signing up for Internet service. A contract that forces customers to agree to its terms without getting informed consent may turn out not very binding under West Virginia law.

Lincoln County Judge Jay Hoke, assigned to hear the case, will likely face that matter in pre-trial motions.

West Virginia residents interested in the class action case can register here for updates.

[flv]http://www.phillipdampier.com/video/Digital Ireland Forum Opening address by Minister Alex White – Part 1 of 2 9-12-14.mp4[/flv]

Ireland’s new Communications Minister announced major improvements in rural broadband at the Digital Ireland Forum. This is part one of his remarks. (7:16)

White

Ireland’s new Minister for Communications Alex White has made a personal commitment to deliver high-speed fiber broadband “to every citizen and business in the country, irrespective of their location.”

Ireland has a set a national priority to deliver world-class broadband to every corner of the republic, stepping in to subsidize broadband service where private providers have refused to upgrade their networks to offer the service.

Five months ago, the cabinet announced $473 million – $664 million would be available to pay for a rural fiber broadband network for about 1,100 small villages that can barely get DSL service, if any broadband at all.

Minister White rejected the philosophy of incremental upgrades like those taking place in North America, particularly by companies attempting to improve traditional DSL service. He believes Ireland must move to a fiber-based telecommunications future.

Although there are questions about the precise type of fiber network to be installed in rural Ireland, some answers are emerging this week.

Outgoing Communications Minister Pat Rabbitte, recently reshuffled out of the Irish cabinet, claimed the National Broadband Plan was committed to fiber to the home/business service, not fiber to the cabinet technology similar to AT&T U-verse and the type of “super fast” broadband being installed in Great Britain.

But some critics contend $664 million is insufficient to wire every building in Ireland for fiber service and suspect the government may try to backtrack and choose fiber to the cabinet or wireless service for the most isolated communities that could prove extremely expensive to reach with fiber.

In 2012, the government initially guaranteed minimum broadband speeds of 30Mbps to every rural home in the country, but failed to meet that commitment and has since dropped promising any specific broadband speeds.

Stating a commitment to deliver “high-speed” service is inexact because it means different things in different parts of Ireland. A “high-speed connection” in rural Ireland might be defined as 10Mbps, but 50Mbps would be more typical in Dublin, Cork, and Limerick.

Earlier this month, national telecom provider Eircom passed the 1 millionth premises with 100Mbps fiber broadband as it completed wiring the County Kerry community of Cahersiveen. The Irish fiber network now reaches half the country, and provides both fiber and Vectored DSL, which can support 100Mbps broadband speeds. Eircom noted its fiber network rollout was well ahead of network upgrades in the United States, the United Kingdom and Germany.

Once complete, fiber broadband will be available to every town in Ireland with a population of more than 900 people.

[flv]http://www.phillipdampier.com/video/Digital Ireland Forum Opening address by Minister Alex White – Part 2 of 2 9-12-14.mp4[/flv]

Part two of remarks from Ireland’s Communications Minister about fiber broadband across Ireland. (6:26)

Question: How will ripping out landline infrastructure in Kentucky help improve broadband service for rural areas?

Answer: It won’t.

This is not for a lack of trying though. AT&T has returned to the Kentucky state legislature year after year with a company-written bill loaded with more ornaments than a Christmas tree. In the guise of “modernizing” telecom regulation, AT&T wants to abolish most of it, replaced by a laissez-faire marketplace for telecommunications services not seen in the United States since the 1910s. AT&T claims robust competition will do a better job of keeping providers in check than a century of oversight by state officials. But customers in rural Kentucky have a better chance of sighting Bigfoot than finding a competitive alternative to AT&T’s telephone and DSL service. AT&T retains a monopoly in broadband across much of the state where cable operators like Time Warner don’t tread.

This year, Senate Bill 99, dubbed “The AT&T Bill” received overwhelming support from the Kentucky Senate as well as in the House Economic Development Committee. AT&T made sure the state’s most prominent politicians were well-compensated with generous campaign contributions, which helped move the bill along.

Since 2011, AT&T’s political-action committee has given about $55,000 to state election campaigns in Kentucky, including $5,000 to the Senate Republican majority’s chief fundraising committee and $5,000 more to the House Democratic majority’s chief fundraising committee. The company spent $108,846 last year on its 22 Frankfort lobbyists.

That generosity no doubt helped Republican Floor Leader Jeff Hoover find his way to AT&T’s talking point that only by “modernizing” Kentucky’s telecom laws would the state receive much-needed broadband improvements.

Hoover

Hoover is upset that the state’s House Democratic leadership stopped AT&T’s bill dead in its tracks, despite bipartisan begging primarily from AT&T’s check-cashers that the bill see a vote. Speaker Greg Stumbo, whose rural Eastern Kentucky district would have seen AT&T’s landline and DSL service largely wiped out by AT&T’s original proposal, would hear none of it.

He has been to AT&T’s Deregulation Rodeo before.

“When I served as attorney general, I dealt with deregulation firsthand to protect consumers as much as possible,” he wrote in a recent editorial. “In most cases, deregulation led to worse service and less opportunity to correct the problems customers invariably faced. It is now our job as House leaders to continue defending Kentucky’s consumers.”

Stumbo, like many across Kentucky, have come to realize that AT&T’s custom-written legislation gives the company a guarantee it can disconnect rural landline service en masse, but does not guarantee better broadband as a result.

“In fact, there is nothing in the legislation guaranteeing better landline, cell or Internet service,” Stumbo noted.

Hoover declared that by not doing AT&T’s bidding, Kentucky was at risk of further falling behind.

“This decision by Stumbo and House Democrat leadership, like many others, has unfortunately had a real effect on the lives of Kentuckians as we will go, at minimum, another year before these private businesses can focus on increasing broadband speed throughout the commonwealth,” he wrote. “It is another year in which we risk falling further behind our neighboring states and others in the competitive world of economic development.”

Stumbo

Stumbo responded the Republicans seemed to have a narrow vision of what represents progress. Hoover and his caucus voted against the House budget that included $100 million for a broadband improvement initiative spearheaded by Gov. Steve Beshear, Rep. Hal Rogers, and private interests.

By relying entirely on a deregulated AT&T, rural Kentucky residents may lose both landline and DSL service and be forced to wireless alternatives that come at a high price.

“There are citizens, many of whom are elderly or on fixed income, who depend on their landline or cannot afford more expensive options; these are the people I am fighting for,” said Stumbo. “I do not want to get a call from a family member who lost a loved one because that person could not reach a first responder in time.”

State residents watching the debate have increasingly noticed discrepancies between what AT&T wants and what it is promising Kentucky.

“No one has ever been able to satisfactorily explain to me how allowing phone companies to abandon landline service will help expand broadband Internet, especially since DSL service requires phone lines,” said H.B. Elkins, Public Information Officer at KYTC District 10.

Matt Simpson recognizes that Senate Bill 99 and other similar measures will not change the economic realities of AT&T’s for-profit business.

“Without regulation, the for-profit companies like AT&T are going to invest in the most profitable areas,” he wrote. “If they thought they could make a huge profit providing broadband in rural areas, they would already be doing it. Deregulation is not going to change that profit calculation. They will still view rural broadband as unprofitable, and they still won’t do it. The bill was a total giveaway to the industry, with no offsetting benefit to the consumers.”

Michael Yancy summed up his views more colorfully.

“The ‘AT&T bill should be classified as a sheep bill. It was all about pulling the wool over the eyes of the public,” Yancy said. “Anyone who thinks the people of Kentucky will benefit from more of the same, needs to make inquiries into moving the Brooklyn Bridge to the Ohio River.”

[flv]http://www.phillipdampier.com/video/KET Phone Deregulation Kentucky Tonight 1 2-19-13.mp4[/flv]

Kentucky Educational Television aired a debate between AT&T and the Kentucky Resources Council on the issue of telephone deregulation in 2013. The same issues were back this year in AT&T’s latest failed attempt to win statewide deregulation and permission to switch landline customers in rural Kentucky to less reliable wireless service. In this clip AT&T argues it should be able to shift investment away from landline service towards wireless because wireless is the more popular technology, but not everyone gets good coverage in Kentucky. (Feb. 19 2013) (3:00)

[flv]http://www.phillipdampier.com/video/KET Phone Deregulation Kentucky Tonight 2 2-19-13.mp4[/flv]

In this second clip, AT&T claims customers who want to keep landline service can, but Kentucky Resources Council president Tom Fitzgerald reads the bill and finds AT&T’s claims just don’t hold up under scrutiny. The carrier of last resort obligation which guarantees quality landline phone service to all who want it is gone if AT&T’s bill passes. Customers can be forced to use wireless service instead. (Feb. 19 2013) (4:33)

The Caribbean island of Martinique will receive island-wide fiber to the home broadband service by 2019 and upgrades for many of the island’s ADSL lines while the overseas department (départements et territoires d’outre-mer) of France awaits fiber service.

Prime Minister Manuel Valls announced the agreement in principle to finance the four-year fiber project under the island’s Public Network Initiative administered by local authorities.

The project’s budget is $155.39 million, with about $34 million paid upfront by Martinique and the rest financed by the island’s four arrondissements and France itself.

By 2019, 80,000 fiber to the home connections will be installed on Martinique, starting with priority institutions including schools, hospitals, government offices and office parks. Until the fiber upgrades are complete Martinique will upgrade existing ADSL and satellite connections to ensure 90 percent of the island has at least 8Mbps broadband service until the fiber network arrives to replace DSL.

Within two years, Martinique’s broadband speeds will exceed the average speeds rural American and Canadian broadband users can receive.

FCC chairman Thomas Wheeler doesn’t like what he sees when looks at the state of American broadband.

At a speech today given to the 1776 community in Washington, Wheeler complained about the lack of broadband competition in the United States.

“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”

“The lighter the blue, the fewer the options,” Wheeler said, gesturing towards his chart. “You get the point. The bar on the left reflects the availability of wired broadband using the FCC’s current broadband definition of 4Mbps. But let’s be clear, this is ‘yesterday’s broadband.’ Four megabits per second isn’t adequate when a single HD video delivered to home or classroom requires 5Mbps of capacity. This is why we have proposed updating the broadband speed required for universal service support to 10Mbps.”

But Wheeler added that even 10Mbps was insufficient as households increasingly add more connected devices — often six or more — to a single broadband connection.  When used concurrently, especially for online video, it is easy to consume all available bandwidth at lower broadband speeds.

Wheeler

Wheeler’s new informal benchmark is 25Mbps — “table stakes” in 21st century communications. About 80 percent of Americans can get 25Mbps today or better, but typically only from one provider. Wheeler wants even faster speeds than that, stating it is unacceptable that more than 40% of the country cannot get 100Mbps service. Wheeler seemed to fear that phone companies have largely given up on competing for faster broadband connections, handing a de facto monopoly to cable operators the government has left deregulated.

“It was the absence of competition that historically forced the imposition of strict government regulation in telecommunications,” Wheeler explained. “One of the consequences of such a regulated monopoly was the thwarting of the kind of innovation that competition stimulates. Today, we are buffeted by constant innovation precisely because of the policy decisions to promote competition made by the FCC and Justice Department since the 1970s and 1980s.”

Wheeler said competition between phone and cable companies used to keep broadband speeds and capacity rising.

“In order to meet the competitive threat of satellite services, cable TV companies upgraded their facilities,” Wheeler said. “When the Internet went mainstream, they found themselves in the enviable position of having greater network capacity than telephone companies. Confronted by such competition, the telcos upgraded to DSL, and in some places deployed all fiber, or fiber-and-copper networks. Cable companies further responded to this competition by improving their own broadband performance. All this investment was a very good thing. The simple lesson of history is that competition drives deployment and network innovation. That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

But Wheeler admits the current state of broadband in the United States no longer reflects the fierce competition of a decade or more ago.

“Today, cable companies provide the overwhelming percentage of high-speed broadband connections in America,” Wheeler noted. “Industry observers believe cable’s advantage over DSL technologies will continue for the foreseeable future. The question with which we as Americans must wrestle is whether broadband will continue to be responsive to competitive forces in order to produce the advances that consumers and our economy increasingly demand. Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler recognized what most broadband customers have dealt with for years — a broadband duopoly for most Americans.

“Take a look at the chart again,” Wheeler said. “At the low end of throughput, 4Mbps and 10Mbps, the majority of Americans have a choice of only two providers. That is what economists call a “duopoly”, a marketplace that is typically characterized by less than vibrant competition. But even two “competitors” overstates the case. Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after. Once consumers choose a broadband provider, they face high switching costs that include early termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

Wheeler emphasized that true competition would allow customers to change providers monthly, if a vibrant marketplace forced competitors to outdo one another. That market does not exist in American broadband today.

“At 25Mbps, there is simply no competitive choice for most Americans,” Wheeler added. “Stop and let that sink in…three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all. Things only get worse as you move to 50Mbps where 82 percent of consumers lack a choice. It’s important to understand the technical limitations of the twisted-pair copper plant on which telephone companies have relied for DSL connections. Traditional DSL is just not keeping up, and new DSL technologies, while helpful, are limited to short distances. Increasing copper’s capacity may help in clustered business parks and downtown buildings, but the signal’s rapid degradation over distance may limit the improvement’s practical applicability to change the overall competitive landscape.”

Wheeler finds little chance wireless providers will deliver any meaningful competition to wired broadband because of pricing levels and miserly data caps. Such statements are in direct conflict with a traditional industry talking point.

In a remarkable admission, Wheeler added that the only hope of competing with cable operators comes from a technology phone companies have become reluctant to deploy.

“In the end, at this moment, only fiber gives the local cable company a competitive run for its money,” Wheeler said. “Once fiber is in place, its beauty is that throughput increases are largely a matter of upgrading the electronics at both ends, something that costs much less than laying new connections.”

Wheeler also continued to recognize the urban-rural divide in broadband service and availability, but said little about how he planned to address it.

Wheeler’s answer to the broadband dilemma fell firmly in the camp of promoting competition and avoiding regulation, a policy that has been in place during the last two administrations with little success and more industry consolidation. Most of Wheeler’s specific commitments to protect and enhance competition apply to the wireless marketplace, not fixed wired broadband:

1. Where competition exists, the Commission will protect it. Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example. As applied to fixed networks, the Commission’s Order on tech transition experiments similarly starts with the belief that changes in network technology should not be a license to limit competition.

In short, don’t expect anymore efforts to combine T-Mobile and Sprint into a single entity. Wheeler only mentioned “nationwide wireless providers” which suggests it remains open season to acquire the dwindling number of smaller, regional carriers. Wheeler offers no meaningful benchmarks to protect consumers or prevent further consolidation in the cable and telephone business.

2. Where greater competition can exist, we will encourage it. Again, a good example comes from wireless broadband. The “reserve” spectrum in the Broadcast Incentive Auction will provide opportunities for wireless providers to gain access to important low-band spectrum that could enhance their ability to compete. Similarly, the entire Open Internet proceeding is about ensuring that the Internet remains free from barriers erected by last-mile providers. Third, where meaningful competition is not available, the Commission will work to create it. For instance, our efforts to expand the amount of unlicensed spectrum creates alternative competitive pathways. And we understand the petitions from two communities asking us to pre-empt state laws against citizen-driven broadband expansion to be in the same category, which is why we are looking at that question so closely.

Again, the specifics Wheeler offered pertain almost entirely to the wireless business. Spectrum auctions are designed to attract new competition, but the biggest buyers will almost certainly be the four current national carriers, particularly AT&T and Verizon Wireless. Although low-band spectrum will help Sprint and T-Mobile deliver better indoor service, it is unlikely to drive new market share for either. Wheeler offered no specifics on the issues of Net Neutrality or municipal broadband beyond acknowledging they are issues.

3. Incentivizing competition is a job for governments at every level. We must build on and expand the creative thinking that has gone into facilitating advanced broadband builds around the country. For example, Google Fiber’s “City Checklist” highlights the importance of timely and accurate information about and access to infrastructure, such as poles and conduit. Working together, we can implement policies at the federal, state, and local level that serve consumers by facilitating construction and encouraging competition in the broadband marketplace.

Most of the policies Wheeler seeks to influence exist on the state and local level, where he has considerably less influence. Based on the overwhelming interest shown by cities clamoring to attract Google Fiber, the problems of access to utility poles and conduit are likely overstated. The bigger issue is the lack of interest by new providers to enter entrenched monopoly/duopoly markets where they face crushing capital investment costs and catcalls from incumbent providers demanding they be forced to serve every possible customer, not selectively choose individual neighborhoods to serve. Both incumbent cable and phone companies originally entered communities free from significant competition, often guaranteed a monopoly, making the burden of wired universal service more acceptable to investors. When new entrants are anticipated to capture only 14-40 percent competitive market share at best, it is much harder to convince lenders to support infrastructure and construction expenses. That is why new providers seek primarily to serve areas where there is demonstrated demand for the service.

4. Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband. One thing we already know is the fact that something works in New York City doesn’t mean it works in rural South Dakota. We cannot allow rural America to be behind the broadband curve. Our universal service efforts are focused on bringing better broadband to rural America by whomever steps up to the challenge – not the highest speeds all at once, but steadily to prevent the creation of a new digital divide.

Again, Wheeler offers few specifics. Current efforts by the FCC include the Connect America Fund, which is nearly entirely devoted to subsidizing rural telephone companies to build traditional DSL service into high-cost areas. Cable is rarely a competitor in these markets, but Wireless ISPs often are, and they are usually privately funded and consider government subsidized DSL expansion an unwelcome and unfair intrusion in their business.

“Since my first day as Chairman of the FCC my mantra has been consistent and concise: ‘Competition, Competition, Competition,'” said Wheeler. “As we have seen today, there is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable.”

Under Wheeler’s leadership, Comcast has filed a petition to assume control of Time Warner Cable, AT&T is seeking permission to buy DirecTV, Frontier Communications is acquiring the wired facilities of AT&T in Connecticut, and wireless consolidation continues. A forthcoming test of Wheeler’s willingness to back his rhetoric with action is whether he will support or reject these industry consolidating mergers and acquisitions. Wheeler’s FCC has also said little to nothing about the consumer-unfriendly practice of usage caps and usage-based billing — both growing among wired networks even as they upgrade to much-faster speeds and raise prices.