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New Owner Ziply Fiber Moves Quickly to Overhaul Frontier’s Network in Pacific Northwest

Even with the threat of COVID-19 and a virtual nationwide work-from-home initiative, the new owners of Frontier Communications’ network in Washington, Oregon, Montana and Idaho are moving rapidly to repair persistent network issues, create a backup network, and lay the foundation to bring fiber to the home service to 85% of its customers over the next three years.

Ziply Fiber of Kirkland, Wash., formerly known as Northwest Fiber, acquired the Frontier Communications service areas in the Pacific Northwest just as Frontier itself was on the verge of declaring bankruptcy. It will waste little time upgrading Frontier’s copper wire network to get fiber service to customers fast.

“After Frontier bought Verizon’s landlines and FiOS networks in Washington and Oregon in 2010, it felt like the last decade was a phone company driving in neutral,” said Dale Prescott, a FiOS customer in Washington State. “You could feel Frontier never wanted to spend any money out here. It was like they were a caretaker of Verizon’s network, and while we got some service improvements here and there, Frontier also took away a lot too.”

Service reliability suffered, especially in areas that remained served by copper over the last decade. Customers reported lengthy outages and waiting times for repairs, and DSL speeds were actually reduced in some areas because deteriorating network infrastructure could no longer support earlier, faster speeds. In a decade of service, Frontier only managed to provide fiber connections to about 33% of its customers, the vast majority of it acquired from Verizon.

“Frontier never invested much in its network, and what it did invest seemed mostly to keep the lines from falling off the poles,” Prescott said. “Businesses got slightly better service when Frontier boosted its fiber capacity, primarily to serve commercial customers. But if you lived in the sticks, your service got worse over time, not better.”

Ziply Fiber plans to change that experience with a promise to regulators to spend about $500 million overhauling Frontier’s network in the region. Most of that spending will be devoted to upgrading customers to fiber optics. Just a few weeks after closing on its acquisition of Frontier landlines, Ziply told residents in 13 communities to expect fiber upgrades that began this spring. The majority long suffered with Frontier DSL, often at speeds as low as 3 Mbps.

Among the first towns to get fiber service are Kellogg, Moscow, and Coeur d’Alene — all in Idaho. Work has already commenced and is expected to be finished by fall. Ziply wants to keep construction costs as low as possible, so it intends to do aerial deployment of fiber by wrapping the optical cable around existing copper wire telephone cables already on the pole. This process, known as “overlashing” will simplify installation by not requiring additional space to place fiber cables next to existing telephone wiring or going to the effort of removing the existing copper wiring, which raises costs.

Overlashing has met with some controversy, however. Telephone companies are strongly in favor of allowing the process for optical fiber installation because they rarely need permission or costly permits from utility pole owners, often electric utilities. Opposition comes primarily from some electric companies, which claim overlashing can make existing installations “unsafe” by placing too much weight on existing wiring, which may have been installed decades earlier. Those electric utilities also stand to make money from forcing companies to seek new permits for placing fiber on poles, and that permission does not come free of charge.

Fiber customers will be able to select internet plans up to 1,000 Mbps. Enhanced DSL service in some areas is available at speeds up to 115 Mbps, but most of these service areas will probably be served by fiber to the home service, eventually.

Ziply Fiber Upgrade Projects (May, 2020)

  • Washington—Anacortes, Kennewick, Pullman, Richland and Snohomish
  • Oregon—Coquille, Coos Bay, La Grande, North Bend
  • Idaho—Coeur d’Alene, Kellogg, Moscow
  • Montana—Libby

To further speed fiber upgrades, Ziply acquired Wholesail Networks, already contracted to manage fiber network design for Ziply. Company officials quickly identified multiple weak spots in Frontier’s network, particularly relating to its resiliency when fiber cables were cut or copper wiring was stolen. Ziply is building in network redundancy, with each portion of its network served by at least two sets of fiber cabling and identical equipment in each of more than 130 central switching offices. In many markets, Ziply will maintain at least three redundant fiber connections to make certain if one (or two) networks go down, customers can still be served by a third with no interruption in service.

Ziply is also avoiding the usual nightmares customers experience when switching between one company’s systems to another. Frontier’s customers suffered significantly from a cutover from Verizon’s operations and billing systems, which often left them disconnected or mis-billed. To prevent that from happening again, Ziply literally cloned Frontier’s existing back office systems, so customers won’t experience any “cutover” problems.

Ziply executives have been candid about the network they are acquiring. They told regulators the network was in reasonably good condition in some places, but not all. Ziply promised to fix the network weak spots, resolve customer repair orders at least two-thirds faster than Frontier did, and make comparatively broader investments in network operations. Analysts predict Ziply has a better chance of success than Frontier did, primarily because Frontier’s operations were mired in debt, making new investment in network upkeep and upgrades difficult.

This Internet Provider Earned a 94% Customer Satisfaction Score, and It Isn’t Comcast or Spectrum

One of America’s internet service providers managed to achieve a customer satisfaction score of 94%, an unprecedented vote of approval from consumers that typically loathe their cable or phone company.

What also makes this provider different is that it is owned by the public, and administered by the City of Fairlawn, Ohio. Fairlawn is a suburb of Akron, with a population of around 7,400 people. Akron is dominated by Charter Spectrum for cable and AT&T for telephone service. But the suburbs have been underserved by both companies for decades. As with many northeastern cities, the economic shift away from manufacturing towards high-tech businesses requires robust connectivity. But many communities are stuck with a cable company that will not service less populated areas in town and a phone company that is willing to leave many customers with low-speed DSL and nothing better.

When a community finds it cannot get gigabit fiber optic service for residents, it can either live with what is on offer instead or decide to do something about it. Fairlawn decided it was time to establish FairlawnGig, a municipal broadband utility that would provide gigabit fiber service to every resident in town, if they wanted it.

Broadband Communities reports local residents love the service they are getting:

The online survey results reveal overall satisfaction with FairlawnGig at an astoundingly high number of 94% with more than 3 out of 4 (77%) saying they are “very satisfied.”

Additionally, FairlawnGig 94% of residential customers rated the service they receive from FairlawnGig as “excellent” or “very good.”

FairlawnGig offers two plans to residents: 300/300 Mbps service for $55 a month or 1,000/1,000 Mbps service for $75. Landline phone service is an extra $25 a month, and the municipal provider has pointed its customers to online cable TV alternatives like Hulu and YouTube TV for television service. Incumbent cable and phone companies usually respond to this kind of competition with cut-rate promotions to keep the customers they have and lure others back. Spectrum has countered with promotions offering 400 Mbps internet for as little as $30/mo for two years. Despite the potential savings, most people in Fairlawn won’t go back to Spectrum regardless of the price. FairlawnGig’s loyalty score is 80, with 85% of those not only sticking with FairlawnGig but also actively recommending it to others.

Residents appreciate the service, deemed very reliable, and that technicians are local and accessible. The City says it works hard to ensure that customer appointments are kept and on time and representatives are available to assist customers with their questions and technical support needs. FairlawnGig claims its technicians spend extra time teaching customers about their services.

City officials candidly admit they were willing to build and launch the municipal fiber service even if it did not recoup its original investment for years to come. That is because the municipal fiber network has benefited the city in other ways:

  • It has attracted new residents to town and kept them there.
  • Several businesses launched or moved to be within FairlawnGig’s service area. Most are white collar businesses, such as IT firms, software and hardware engineers, and consultants.
  • A new orthopaedic hospital is being developed in the town, in part because FairlawnGig can provide connectivity up to 100 Gbps for things like medical imaging and video conferencing.
  • As businesses move in, so do workers looking for a shorter commute. Property values in the town have increased and realtors make a point to alert would-be buyers when a property is within FairlawnGig’s service area.

In short, Fairlawn officials see providing internet access as more than just a profit center. It is a public service initiative that is paying back dividends that will eventually exceed the $10 million investment taken from the city’s general fund to build the network. Taxes did not increase as a result of FairlawnGig either. Now other towns around Fairlawn and the city of Akron itself are showing interest in how to join forces to expand the public service well beyond Fairlawn’s town borders.

WOIO in Akron covered FairlawnGig back in January 2019 in this report explaining how a publicly owned fiber to the home service was delivering gig speed to this northeastern Ohio community. (2:31)

Wall Street Hates CenturyLink’s Dividend Cut; Company Punished for Upgrade Spending

CenturyLink’s stock is being pummeled after the company announced a cut in divided payouts to shareholders earlier this year, preferring to keep the money in-house to reduce debt and increase spending on necessary broadband upgrades.

Last fall, CenturyLink stock was trading for over $23 a share. By January, rumors that CenturyLink was going to cut its dividend put the stock on a downward trajectory, falling to an all-time-low below $11 this month. Company officials argued that with tightening credit opportunities and increasing interest rates, the company needed to devote money normally paid back to shareholders towards paying down its $35.5 billion long-term debt and provide better service to its customers.

A half billion dollars of that money will also be spent on upgrading CenturyLink’s broadband service, particularly in rural areas where the company is receiving Connect America Fund (CAF) dollars from the federal government.

“Our plan for 2019 includes investing to improve the trajectory of the business increasing CapEx by roughly $500 million,” Jeff Storey, president and CEO of CenturyLink said on a January analyst conference call. “As I mentioned earlier those investments include expanding the fiber network, adding new buildings throughout our footprint, enhancing our enterprise product portfolio, continuing our investments in CAF-II, and transforming our customer and employee experience.”

Investors were not impressed with those plans, and CenturyLink’s share price cratered.

Independent phone companies have traditionally attracted investors with handsome dividend payouts, but the realities of their aging infrastructure and the inability to compete effectively with cable companies on lucrative broadband services have left companies like CenturyLink, Windstream, and Frontier Communications in a quandary. Shareholders do not perceive value investing in fiber optic network upgrades and punish companies that announce dramatic increases in network investments. Customers left on slow-speed ADSL networks are increasingly dissatisfied with their internet experience and seek alternative providers — usually the local cable company. As Frontier Communications has discovered, attempting to win back ex-customers has been exceedingly difficult, often only possible with lucrative promotional offers that undercut the cable company. But such offers attract customers with above-average price sensitivity, making it difficult to extract increased revenue from them going forward.

CenturyLink’s stock price has dropped to an all-time low over the last six months.

Investors are also increasingly concerned about the financial viability of investor-owned phone companies that are stuck between leveraging their old networks and facing down shareholders when upgrades become essential. AT&T and Verizon have wireless units responsible for much of the revenue earned by those two Baby Bells. Traditional phone companies have had less luck trying to sell ancillary support services like Frontier’s “Peace of Mind” technical support service, or bundling satellite TV service into packages.

CenturyLink’s Local Service Territory (Source: CenturyLink)

CenturyLink is increasingly depending on its enterprise and wholesale businesses to earn revenue. That fact has prompted some shareholders to ask why the company hasn’t spun off or sold off its traditional landline network and consumer businesses, which currently account for only 25% of its revenue. In May, CenturyLink seemed determined to placate those investors with an announcement it was exploring “strategic options” for its consumer business. Investors theorize that CenturyLink could “unlock value” from its legacy landline networks in such a sale or spinoff that would benefit shareholder value. It would also be much cheaper than investing in that network to upgrade it.

The chorus for a sale increased after Frontier Communications announced it was spinning off its landline territories in the Pacific Northwest to a company specializing in upgrading legacy networks to support better broadband. Frontier, mired in debt and facing a concerning due date for some of its bonds, made the sale to give a boost to its balance sheet. Frontier had also been facing increasing scrutiny about a potential Chapter 11 bankruptcy filing. Windstream declared bankruptcy earlier this year, reminding investors that a trip to bankruptcy court could quickly wipe out all shareholder value.

MoffettNathanson, a Wall Street analyst firm that specializes in telecommunications, finds little to like about CenturyLink shedding its own landline operations. Frontier’s sale benefited from the fact a significant part of its Pacific Northwest territory was built from an acquisition from Verizon, which had already installed its FiOS fiber to the home network in parts of Washington and Oregon. About 30% of the territory Frontier is selling is fiber-enabled. In comparison, CenturyLink has installed fiber to the home service in only about 10% of its territory, dramatically reducing any potential sale price. Much of CenturyLink’s core fiber network powers its enterprise and wholesale operations — businesses CenturyLink would likely keep for itself.

MoffettNathanson also sees little value from the proposition a buyer could leverage CenturyLink’s network to provide backhaul fiber capacity for future 5G services, because CenturyLink provides service mostly in smaller communities likely to be bypassed by 5G, at least for the near term.

Wall Street’s idea of a win-win strategy for CenturyLink is to keep its consumer business and expand its broadband service footprint and capability, if the federal government offers to cover much of the cost through more rounds of CAF subsidies. Taxpayers would subsidize broadband expansion while CenturyLink and shareholders share all the profits.

Cable’s DOCSIS 4.0 – Symmetrical Broadband Coming

Phillip Dampier June 25, 2019 Broadband Speed, Consumer News No Comments

The next standard for cable broadband is now due by 2020.

CableLabs is working on the next generation of broadband over existing Hybrid Fiber-Coax (HFC) networks, finally achieving identical upload and download speed and supporting more spectrum on existing cable lines, which could mean another leap in broadband speed.

DOCSIS 4.0 is still evolving, but according to Light Reading, the next upgrade will fully support Full Duplex DOCSIS, allowing customers to get the same upload speed as their download speed, and will fully implement Low Latency DOCSIS which could reduce traffic delays to under 1 ms. The new standard will also introduce Extended Spectrum DOCSIS, which will open up broadband traffic on frequencies up to 1.8 GHz — 600 Mhz more bandwidth than available today. That additional spectrum will allow for speed increases in excess of 1 Gbps, support IP video traffic, and backhaul for wireless applications like small cells. 

According to Light Reading, people familiar with the development of the cable broadband specification believe much of the work will be complete by the end of 2019, with the spectrum expansion specification expected before mid-2020. This would allow the introduction of DOCSIS 4.0 modems for purchase beginning in 2021.

Cable operators are largely taking a break on large investments this year, with few planning major infrastructure changes beyond some projects underway at Comcast and Altice-Cablevision’s ongoing replacement of its HFC network with fiber to the home service. In 2020, operators will make crucial decisions about their next upgrade commitments. Comcast and Altice will have the easiest time delivering symmetrical broadband because Comcast will support the “Node+0” design that eliminates amplifiers between the nearest node and the customer’s home. This will facilitate the introduction of symmetrical speeds. Altice is dropping the DOCSIS standard as it moves to fiber service, which already supports symmetrical speeds.

Other cable operators are not currently committed to removing amplifiers from their networks, supporting alternate designs like “Node+1,” “Node+2,” etc., which are similar to today’s cable system designs. Instead, they are hoping to leverage Extended Spectrum DOCSIS to boost their speeds. Most will likely offer significant speed bumps for uploading, but those speeds won’t match download speed. For example, Charter Spectrum or Cox might upgrade customers to 500/100 Mbps service, on the theory that 100 Mbps upload speed will still be a welcome change for customers, and not noticeably slower for most current applications, such as uploading videos or file storage in the cloud.

Industry trade association NCTA reports that Comcast, Charter, Cox, Mediacom, Midco, Rogers (Canada), Shaw Communications (Canada), Vodafone (Europe), Taiwan Broadband Communications, Telecom Argentina, Liberty Global (Europe/Latin America) are all implementing the industry’s 10G initiative, with lab trials already underway, and field trials beginning in 2020. DOCSIS 4.0 will ultimately be a part of that project.

CableLabs is already making plans for DOCSIS 4.1 (our name, not theirs), that will further extend DOCSIS spectrum up to 3 GHz — a massive upgrade in usable spectrum. Whether that will be technically plausible on aging cable systems last rebuilt in the 1990s isn’t known, and probably won’t be for two or more years. But if it proves technically feasible, DOCSIS 4.1 could be one of the last DOCSIS standards before cable systems consider abandoning HFC in favor of all-fiber networks.

CableLabs has proved itself to be adept at squeezing every bit of performance out of a network that was originally built with simple coaxial copper cable and designed to distribute analog TV signals. DOCSIS 4.1 would support speeds potentially as high as 25 Gbps downstream and 10 Gbps upstream. Customers would require new cable modems and cable systems would have to tighten standards to take aging infrastructure out of service more frequently. Upload traffic would likely be assigned spectrum below 1 GHz, with 1-3 GHz reserved for downloads. By then, television, phone, and internet services would likely all be a part of a single broadband pipe.

Cable systems have enjoyed enormous cost savings over the last 20 years deploying DOCSIS upgrades instead of scrapping their existing HFC networks in favor of all-fiber. Charter Spectrum admitted the cost to upgrade from DOCSIS 3.0 to DOCSIS 3.1 was just $9 per subscriber.

Google Fiber Expansion in North Carolina Draws Complaints from Angry Neighborhoods

Phillip Dampier June 18, 2019 Consumer News, Google Fiber & Wireless, Video No Comments

Third party contractors hired to install fiber optic infrastructure that will deliver Google Fiber internet service in parts of North Carolina are getting an increasing number of complaints from frustrated residents upset with the pace of the work, the mess it creates, and disruptions caused when crews accidentally damage existing utilities.

In Cary, construction crews are testing the patience of residents on Kilarney Drive, who have endured multiple power outages caused by Google’s contractors digging up the streets in the area.

In one neighborhood, crews removed a section of a sidewalk and installed a utility cabinet in its path. In others, cabinets were installed on the wrong side of the street. In some areas, Google’s contractors are still experimenting with shallow dug fiber installations. Some residents reported they unearthed their underground Google Fiber connection after raking their lawns. Others claimed their home’s water service line was cut by construction crews. Last winter brought multiple outages when snowplows dragged up fiber lines buried just an inch or two into the pavement and held in place with foam.

This summer’s service disruptions are coming at inopportune times, Cary residents complain. Recently, crews mistakenly cut through cables providing power, phone, and cable service, knocking out power for four hours and cutting off air conditioning on a 92 degree day.

Watching the crews slowly move through the neighborhood also has some residents concerned.

“It took them a week or two to do a couple hundred yards,” Cary resident Ed Fillback told WRAL-TV. “How long is it going to take to do the town?”

Google Fiber officials shared a response to the disruptive work in a prepared statement.

“Building a brand new fiber network is a big and complex project, and we’re sensitive to the impact construction has on a community. We want to be good neighbors, and do everything we can to minimize disruption, respond to residents, and resolve issues quickly.”

WRAL in Raleigh reports neighborhood frustration with Google Fiber’s buildout in North Carolina is growing. (2:56)

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