Stage two of the nightmare is billing problems, and one West Virginia family discovered a phone bill they couldn't imagine possible.

Frontier Communications’ performance in West Virginia is starting to resemble northern New England’s never ending nightmare with FairPoint, the phone company that couldn’t manage landline service for customers in Maine, New Hampshire and Vermont and ended up in bankruptcy.  Things have gotten so bad, Frontier Communications now earns an “F” rating from the Better Business Bureau, called out specifically for failing to respond to complaints filed against the provider, failure to resolve the complaints they did acknowledge, and government action taken against the company for deceptive business practices.

Stop the Cap! reader Ralph in West Virginia drops us a line to share the latest progress the company is making in his part of West Virginia, or rather the lack thereof, starting with his own personal story:

The afternoon of  Thursday Sep. 2nd, our phones were out of order for awhile but were working by 4pm.  The DSL was still out so I waited to see if they’d get it fixed later that evening.  When it was still out Friday afternoon, I called to report it and asked if they had a reported outage for the area.  Their answer was no, and they proceeded to ask me to reset the modem and perform some additional diagnostic testing.

That didn’t “fix” it so they filed a trouble ticket and told me a technician would be out to check the outside wiring and, if needed, give me a new modem.  Frontier never showed up, so I called again and was left on hold for 30 of the 35 minutes that phone call lasted. I was finally told that it was a known outage affecting 12 people in the area.  No repairs were made on Sunday so I called on Monday and was told the problem now affected 16 people and they had no idea when it would be fixed.  It was finally fixed five days after initially reporting the outage, and nobody bothered to explain why it took so long.  I was later bemused to find an article in the weekly county paper that noted the outage was now up to impacting 20 people.

In your earlier report about Frontier, a spokesman for the company claimed the company follows a protocol about calling customers with service problems to see if the issues were resolved, but that call didn’t come until Sep. 8th, a full 24 hours after our DSL service was restored.  Keep up the good work, maybe Frontier and other providers will realize that the system is broken and we do want and need high speed Internet.

Ralph is not alone in having trouble with Frontier.  Just as Stop the Cap! reported with FairPoint’s failure in New England, service problems are just the beginning of the “fun” for transitioned customers.  Billing problems come next, and Frontier followed through in spades for one West Virginia family.

Meet Johna and Paul Snatchko, who are being billed $671.45 for dial-up Internet service calls by Frontier.  Not only did Frontier fail to deliver broadband service to the northwestern part of the state, now the Snatchko family has had to quit using dial-up Internet as well because the Snatchko’s claim Frontier made accessing the service a long distance call.

“When we switched from Verizon to Frontier, they said nothing will change,” Paul told WTOV News. “Well, there’s change.”

Despite selling the Snatchko family “unlimited long distance” service, Frontier still charged every call to their ISP at the regular long distance rate.  Why use dial-up in the first place?

“In this part of West Virginia, you’re very limited in your service,” Paul explained. “Dial-up is it for us. We’ve tried everything else. The only thing we could get was dial-up.”

The family also endured another Frontier specialty — the constantly changing promotional offers that are poorly explained by the company’s customer service representatives.

“They said it doesn’t include their package deal with the computer,” Johnna said, referring to a common Frontier promotion for a free netbook in return for a bundled package of services on a two year contract. “The first couple months it did and now it doesn’t include it.”

Frontier Communications earned an "F" rating from the Better Business Bureau

Frontier’s spokesman for the area, Bill Moon, made yet another TV appearance to try and explain it all away.

“There are billing problems that can happen anytime you have a switch over like that,” he told WTOV. “It’s probably a simple mistake on this particular customer’s bill, something that can be rectified pretty easy.”

Apparently not. Frontier told the family they have received two credits already and that is the last time the company is willing to provide them.

Despite the increasing frequency and seriousness of complaints now becoming a staple on the nightly news, Moon said incidents like this are rare.  He told the station out of more than 60,000 lines of service, they’ve had about 10 problems at most.

West Virginians are also waking up to the realization that Frontier’s promised “fiber upgrades” are little more than bait and switch, and they’ll never be able to directly access the fiber the company is installing.  As Stop the Cap! has reported previously, Frontier’s residential customers are more likely to encounter beneficial fiber in their morning breakfast cereal than from Frontier Communications.

The Charleston media is abuzz about the fact taxpayers are footing the bill for a $40 million fiber network that the company will own free and clear, and charge top dollar prices to access.  Citynet, one of Frontier’s competitors, blew the whistle over Frontier’s much-ballyhooed fiber expansion that is actually intended to serve public institutions, wholesale customers, and Frontier’s “middle-mile” network — not directly benefit consumers:

[…]Once Frontier spends the $40 million of taxpayer money to expand its network, it will be the sole owner of that network and the State will have no ownership rights. Thus, Frontier’s monopoly in the State of West Virginia will have been financed with taxpayer money.

Frontier will then sell services to state entities such as schools and government offices at the existing exorbitant prices. Those prices will never decrease, because no competitor can afford to spend $40 million or more of its own capital to build out its network.

Citynet, however, has provided the state with a plan for the expenditure of the taxpayer money that will expand broadband access in the state while at the same time lowering the cost of broadband access by 70 percent to 90 percent.

It is true that competitors, like Citynet, have existing contracts with Frontier for access to fiber facilities, but given that Frontier’s new network will be built with your money, it is Citynet’s position that those facilities should be made available to competitors at a nominal cost so that competitors can make their services available to the public at large at much lower prices.

Frontier has flatly refused Citynet’s proposal and intends to require competitors to pay inflated prices for access to fiber facilities it built for free.

As currently structured, the state’s plan for expanding broadband will do nothing more than expand Frontier’s monopoly, and will not address the fundamental problem of the high cost of broadband access.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WTOV Steubenville Speaking Too Soon – Frontier’s Customers Still Complaining 9-15 and 9-28-10.flv[/flv]

WTOV-TV thought Frontier’s problems were behind them when they ran the first of two stories about the company Sep. 15th.  But then they met the Snatchko family and learned they spoke too soon.  Last night, they tried to determine how a West Virginia family could be charged nearly $700 for dial-up Internet service.  (4 minutes)

Phillip "Darn, they didn't pick my essay" Dampier

Time Warner Cable paid $20,000 for a report that concludes, “policymakers not only need to focus on the oft-stated long-term goal of encouraging Fiber-To-The-Home but also on the more immediate need to bring fiber significantly closer to the customer.”

That declaration was included in one of five essays released this week by Time Warner Cable’s Research Program.  When we first wrote about this program in February, we were convinced that the resulting essays would parrot the cable company’s public policy agenda.  We were largely right, especially in those that delved into public policy matters.  They stayed safely inside the company’s policy boundaries.  Even those who focused on technical matters avoided directly challenging the company writing the check.

The cable company earlier announced it would pay $20,000 stipends to essayists that wrote research reports on these questions:

• How are broadband operators coping with the explosive growth in Internet traffic? Will proposed limits on network management practices impede innovation and threaten to undermine consumers’ enjoyment of the Internet?
• How can policymakers harmonize the objectives of preventing anticompetitive tactics and preserving flexibility to engage in beneficial forms of network management?
• Regarding these issues, describe a vision for the architecture of cable broadband networks that promotes and advances innovation for the future of digital communications.
• How might Internet regulations have an impact on underserved or disadvantaged populations?

The winners:

• Dale N. Hatfield, executive director, Silicon Flatirons Center for Law, Technology and Entrepeneurship, University of Colorado, “The Challenge of Increasing Broadband Capacity.”
• John G. Palfrey, Jr., Henry N., Ess III professor of Law, Harvard Law School, “The Challenge of Developing Effective Public Policy on the Use of Social Media by Youth.”
• Nicole Turner-Lee, vice president and director, Media and Technology Institute, Joint Center for Political and Economic Studies, “The Challenge of Increasing Civic Engagement in the Digital Age.”
• Scott J. Wallsten, vice president for Research and Senior Fellow, Technology Policy Institute, “The Future of Digital Communications Research and Policy.”
• Christopher S. Yoo, professor of Law & Communciations, University of Pennsylvania Law School, “The Challenge of New Patterns in Internet Usage.”

Among the reports were a few that echoed the cable industry’s public policy agenda, particularly Scott Wallsten’s policy essay, “The Future of Digital Communications Research and Policy.” Wallsten is an industry favorite.  He works for the Technology Policy Institute, an industry front group funded by AT&T, Comcast, the National Cable & Telecommunications Association, Qwest, Time Warner Cable, T-Mobile, and Verizon.

Scott Wallsten's essay parrots the cable industry's agenda

Wallsten argues worrying about residential broadband service is far less important than delivering broadband improvements to businesses to spur economic growth.  Part of the money to do that might come from raising residential broadband prices.  Wallsten points out consumers are willing to pay far more than they do today for their broadband accounts — up to $80 a month for today’s typical access speeds.  That’s music to an Internet Overcharger’s ears.

Wallsten’s essay hints that broadband expansion to the unserved, and Washington’s focus on broadband competition, might be misplaced if they are looking for the biggest economic bang for the buck.  His overall conclusion?  Worry about business broadband, not home residential use.

This is hardly new territory for Mr. Wallsten, who in 2007 wrote a piece warning of the perils of flat rate, unlimited use broadband pricing for the Progress & Freedom Foundation and the Heartland Institute, both great friends of large industry players. Only this time, he got a nice chuck of change from Time Warner Cable ratepayers.

More remarkable was Dale Hatfield’s essay, “The Challenge of Increasing Broadband Capacity.” Unlike Mr. Wallsten’s cable industry public policy echo chamber, Hatfield tries to keep things technical, but also safely made sure he didn’t stray too far off Time Warner’s broadband plantation.

Hatfield discusses the challenges of different broadband technologies ranging from twisted-pair copper wiring that delivers DSL to cable’s hybrid coaxial-fiber networks and the latest generation wireless and fiber optic technologies.  Hatfield largely calls them as he sees them, noting DSL’s inherent distance limitations and maximum supportable speeds, cable’s potential for last-mile/neighborhood congestion, wireless spectrum inadequacy, and the promises fiber optics can bring to the broadband revolution if costs can be reduced.

Hatfield avoids embarrassing his benefactor too much by spending the least amount of time and space on the benefits fiber brings to the broadband expansion question:

The fourth technology, fiber optic cable, is generally regarded as the “gold standard” in terms of increasing broadband digital access capacity because of its enormous analog bandwidth and its immunity to natural and man-made forms of electrical noise and interference. The actual digital transmission rate delivered to or from a customer depends upon the details of the architecture employed, but the ultimate capacity is limited more by economic factors rather than by the inherent technical constraints on the underlying technology imposed by Shannon’s Law. In this regard, fiber optic cable is often referred to as being “future-proof” because the maximum digital transmission rates are governed more by the electronic equipment attached to the cable rather than by the actual fiber itself. It is future-proof in the sense that the capacity can be increased by upgrading the associated electronic equipment rather than by taking the more expensive step of replacing the fiber itself.

Hatfield

While Time Warner Cable does market itself as having an “Advanced Fiber Network,” it is, in reality using the same technology the cable industry has used for a decade — fiber distribution into individual towns and large neighborhoods, coaxial cable the rest of the way.  Hatfield believes that simply isn’t good enough:

[…]Both DSL and cable modem technology benefit from the shorter distances that are associated with a more dense deployment of their access nodes. This suggests the growing need to extend fiber optic cable capacity closer to the customer—either fixed or mobile—to minimize the distance between the customer and the access nodes.

Hatfield’s subtle conclusion is that broadband expansion is ultimately best served by delivering fiber-optic connections straight to the home, something Time Warner Cable has argued against and refused to provide for years, but has now paid $20,000 to put on their website:

[…]Policymakers not only need to focus on the oft-stated long-term goal of encouraging FTTH but also on the more immediate need to bring fiber significantly closer to the customer to support a vastly increased number of access nodes. This is particularly important in the wireless case, where the capacity added through frequency reuse is critical to facilitating wireless competition with the two major suppliers of fixed broadband capacity—the incumbent telephone and cable television companies.

What is the last technology product you purchased that never declined in price after you bought it?  If you answered your broadband service, a new study proves you right.

Since there are no public data on what has happened to broadband prices over the last decade, Shane Greenstein, a professor of management and strategy at the Kellogg School of Management, and his co-author Ryan McDevitt, an assistant professor of economics and management at the University of Rochester and a graduate of Northwestern University, analyzed the contracts of 1,500 DSL and cable service providers from 2004 to 2009.

The results every broadband user already knows.

At best, prices have declined only slightly — typically between 3-10 percent, partly from a “quality adjustment” the authors included to account for gradually increased broadband speeds when measuring prices.

Greenstein blames a broadband duopoly for the stagnation in broadband pricing.

Greenstein

“So if you were in such a market as a supplier, why would you initiate a price war?” Greenstein asks. With no new entries on the market, suppliers can compete by slowly increasing quality but keeping prices the same. According to Greenstein, quality is where providers channel their competitive urges.

Meanwhile, once companies have installed the lines, their costs are far below prices. “At that point, it becomes pure profit,” Greenstein says. A company might spend around $100 per year to “maintain and service” the connection, but people are paying nearly that amount every other month. Greenstein says that it is not surprising that prices were high during the buildout phase in the early and mid-2000s, since the firms were trying to recover their costs. “However, we are approaching the end of the first buildout, so competitive pressures should have led to price drops by now, if there are any. Like many observers, I expected to see prices drop by now, and I am surprised they have not.”

The authors also confirm Stop the Cap!‘s long-standing contention that providers are enjoying dramatically reduced costs to deliver broadband to customers, yet are not spending some of those profits on important network upgrades.  That could lead to a broadband bottleneck, Greenstein contends, especially with the growth of online video.  We argue it is a recipe for Internet Overcharging — triggering increased pricing to “pay for upgrades” while limiting usage of broadband service, despite the mountain of profits available today to cope with usage growth.

McDevitt

Greenstein and McDevitt pored over 1,500 broadband contracts over several years, tracking pricing, service bundling, and speed improvements.  Pricing, adjusted for speed improvements, was generally flat.  Because the cable industry has delivered most of the speed growth Americans enjoy, the “quality adjustment” the authors used credited most of the modest price declines to the cable industry, especially for customers moving to bundled packages of services.  The authors found DSL and its providers almost completely stagnant — both in pricing and speed.

The most surprising discovery, Greenstein says, is that national decisions are being made without the type of data that he created in the consumer price index. “As an observer of communications policy in the U.S., I find it shocking sometimes how often government makes decisions by the seat of their pants,” he says. Without real data and statistics, decisions are based solely on who has better arguments—in essence, a debate. A better consumer price index will help produce better decisions for the future of the Internet and its users.

It may also serve as an effective challenge to telecommunications industry lobbyists who engineer their own statistics and claims about the performance of the nation’s phone and cable companies.

Thanks to Stop the Cap! readers Bones and Michael for sending along the story.

EPB’s new 1Gbps municipal broadband service is causing some serious embarrassment to the telecom industry.  Since last week’s unveiling, several “dollar-a-holler” telecom-funded front groups and trade publications friendly to the industry have come forward to dismiss the service as “too expensive,” delivering speeds nobody wants, and out of touch with the market.

The “Information Technology and Innovation Federation,” which has historically supported the agenda of big telecom companies, has been particularly noisy in its condescending dismissal of the mega-speed service delivered in Chattanooga, Tenn.

Robert Atkinson, president of ITIF, undermines the very “innovation” their group is supposed to celebrate.  Because it doesn’t come from AT&T or Verizon, it’s not their kind of “innovation” at all.

“I can’t imagine a for-profit company doing what they are doing in Chattanooga, because it’s so far ahead of where the market is,” Atkinson told the New York Times.

“Chattanooga definitely is ahead of the curve,” Atkinson told the Times Free Press. “It’s like they are building a 16-lane highway when there is a demand for only four at this point. The private companies probably can’t afford to get that far ahead of the market.”

Bernie Arnason, formerly with Verizon and a cable industry trade association also dismissed EPB’s new service in his current role as managing editor for Telecompetitor, a telecom industry trade website:

Does anyone need that speed today? Will they in the next few years? The short answer is no. It’s kind of akin to people in the U.S. that buy a Ferrari or Lamborghini – all that power and speed, and nowhere to really use it. A more apropos question, is how many people can afford it – especially in a city the size of Chattanooga?

[…]Will there be a time when 1 Gb/s is an offer that is truly in demand? More than likely, although I still find it hard to imagine it being really necessary in a residential setting – I mean how many 3D movies can you watch at one time? Maybe a service that bursts to 1 Gb/s in times of need, but an always on symmetrical 1 Gb/s connection? Truth be told, no one really knows what the future holds, especially from a bandwidth demand perspective.

Arnason admits he doesn’t know what the future holds, but he and his industry friends have already made up their minds about what level of service and pricing is good enough for “a city the size of Chattanooga.”

Comcast’s Business Class broadband alternative is priced at around $370 a month and only provides 100/15Mbps service in some areas.  Atkinson and Arnason have no problems with that kind of innovation… the one that charges more and delivers less.

For groups like the ITIF, it’s hardly a surprise to see them mount a “nobody wants it or needs it”-dismissive posture towards fiber, because they represent the commercial providers who don’t have it.

Fiber Embargo

The Fiber-to-the-Home Council, perhaps the biggest promoter of fiber broadband delivered straight to customer homes, currently has 277 service provider members. With the exception of TDS Telecom, which owns and operates small phone companies serving a total of 1.1 million customers in 30 states, the FTTH Council’s American provider members are almost entirely family-run, independent, co-op, or municipally-owned.

Companies like American Samoa Telecommunications Authority, Hiawatha Broadband Communications, KanOkla Telephone Association Inc., and the Palmetto Rural Telephone Cooperative all belong.  AT&T, CenturyLink, Frontier, Verizon, and Windstream do not.  Neither do any large cable operators.

While not every member of the Council has deployed fiber to the home to its customers, many appreciate their future, and that of their communities, relies on a high-fiber diet.

EPB’s announcement of 1Gbps service was made possible because it operates its service over an entirely fiber optic network.  Company officials, when asked why they were introducing such a fast service in Chattanooga, answered simply, “because we can.”

The same question should have been directed to the city’s other providers, Comcast and AT&T.  Their answer would be “because we can’t… and won’t.”

Among large providers, only Verizon has the potential to deliver that level of service to its residential customers because it invested in fiber.  It was also punished by Wall Street for those investments, repeatedly criticized for spending too much money chasing longer term revenue.  Wall Street may have ultimately won that argument, because Verizon indefinitely suspended its FiOS expansion plans earlier this year, despite overwhelmingly positive reviews of the service.

So among these players, who are the real innovators?

The Phone Company: Holding On to Alexander Graham Bell for Dear Life

Last week, Frontier Communications told customers in western New York they don’t need FiOS-like broadband speeds delivered over fiber connections, so they’re not going to get them.  For Frontier, yesterday’s ADSL technology providing 1-3Mbps service in rural areas and somewhat faster speeds in urban ones is ‘more than enough.’

That “good enough for you” attitude is pervasive among many providers, especially large independent phone companies that are riding out their legacy copper wire networks as long as they’ll last.

What makes them different from locally-owned phone companies and co-ops that believe in fiber-t0-the-home?  Simply put, their business plans.

Companies like Frontier, FairPoint, Windstream, and CenturyLink all share one thing in common — their dependence on propping up their stock values with high dividend payouts and limited investments in network upgrades (capital expenditures):

Perhaps the most important metric for judging dividend sustainability, the payout compares how much money a company pays out in dividends to how much money it generates. A ratio that’s too high, say, above 80% of earnings, indicates the company may be stretching to make payouts it can’t afford.

Frontier’s payout ratio is 233%, which means the company pays out more than $2 in dividends for every $1 of earnings! But this ignores Frontier’s huge deferred tax benefit and the fact that depreciation and amortization exceed capital expenditures — the company’s actual free cash flow payout ratio is a much more manageable 73%. Dividend investors should ensure that benefit and Frontier’s cash-generating ability are sustainable.

In other words, Frontier’s balance sheet benefits from the ability to write off the declining value of much of its aging copper-wire network and from creative tax benefits that might be eliminated through legislative reform.

The nightmare scenario at Frontier is heavily investing in widespread network upgrades and improvements beyond DSL.  The company recently was forced to cut its $1 dividend payout to $0.75 to fund the recent acquisition of some Verizon landlines and for limited investment in DSL broadband expansion.

Frontier won’t seek to deploy fiber in a big way because it would be forced to take on more debt and potentially cut that dividend payout even further.  That’s something the company won’t risk, even if it means earning back customers who fled to cable competitors.  Long term investments in future proof fiber are not on the menu.  “That would be then and this is now,” demand shareholders insistent on short term results.

The broadband expansion Frontier has designed increases the amount of revenue it earns per customer while spending as little as possible to achieve it.  Slow speed, expensive DSL fits the bill nicely.

The story is largely the same among the other players.  One, FairPoint Communications, ended up in bankruptcy when it tried to integrate Verizon’s operations in northern New England and found it didn’t have the resources to pull it off, and delivered high speed broken promises, not broadband.

Meanwhile, many municipal providers, including EPB, are constructing fiber networks that deliver for their customers instead of focusing on dividend checks for shareholders.

Which is more innovative — mailing checks to shareholders or delivering world class broadband that doesn’t cost taxpayers a cent?

Cable: “People Don’t Realize the Days of Cable Company Upgrades are Basically Over”

While municipal providers like EPB appear in major national newspapers and on cable news breaking speed records and delivering service not seen elsewhere in the United States, the cable industry has a different story to share.

Kent

Suddenlink president and CEO Jerry Kent let the cat out of the bag when he told investors on CNBC that the days of cable companies spending capital on system upgrades are basically over.

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Both cable and phone companies have called a technology truce in the broadband speed war.  Where phone companies rely on traditional DSL service to provide broadband, most cable companies raise their speeds one level higher and then vilify the competition with ads promoting cable’s speed advantages.  Phone companies blast cable for high priced broadband service they’re willing to sell for less, if you don’t need the fastest possible speeds.  But with the pervasiveness of service bundling, where consumers pay one price for phone, Internet, and television service, many customers don’t shop for individual services any longer.

With the advent of DOCSIS 3, the latest standard for cable broadband networks, many in the cable industry believe the days of investing in new infrastructure are over.  They believe their hybrid fiber-coaxial cable systems deliver everything broadband consumers will want and don’t see a need for fiber to the home service.

Their balance sheets prove it, as many of the nation’s largest cable companies reduce capital expenses and investments in system expansion.  Coming at the same time Internet usage is growing, the disparity between investment and demand on broadband network capacity sets the perfect stage for rate increases and other revenue enhancers like Internet Overcharging schemes.

Unfortunately for the cable industry, without a mass-conversion of cable-TV lineups to digital, which greatly increases available bandwidth for other services, their existing network infrastructure does not excuse required network upgrades.

EPB’s fiber optic system delivers significantly more capacity than any cable system, and with advances in laser technology, the expansion possibilities are almost endless.  EPB is also not constrained with the asynchronous broadband cable delivers — reasonably fast downstream speeds coupled with paltry upstream rates.  EPB delivers the same speed coming and going.  In fact, the biggest bottlenecks EPB customers are likely to face are those on the websites they visit.

EPB also delivered significant free speed upgrades to its customers earlier this year… and no broadband rate hike or usage limits.  In fact, EPB cut its price for 100Mbps service from $175 to $140.  Many cable companies are increasing broadband pricing, while major speed upgrades come to those who agree to pay plenty more to get them.

Which company has the kind of innovation you want — the one that delivers faster speeds for free or the one that experiments with usage limits and higher prices for what you already have?

No wonder Big Telecom is embarrassed.  They should be.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/EPB Interviews 9-20-10.flv[/flv]

EPB and Chattanooga city officials appeared in interviews on Bloomberg News and the Fox Business Channel.  CNET News also covered EPB’s 1Gbps service, introduced last week.  (12 minutes)

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)