EPB this morning celebrated its fourth anniversary by thanking Chattanooga residents for supporting the utility’s fiber network with a series of price cuts and speed increases.

Beginning today, EPB’s fiber broadband customers are getting the following upgrades and savings:

• 50/50Mbps customers get a free upgrade to 100/100Mbps service with no change in their current price ($57.99/month);
• 100/100 and 250/250Mbps customers get a free upgrade to 1,000/1,000Mbps service;
• 1,000/1,000Mbps customers now paying $349 a month will see their bills slashed to $69.99 a month, a savings of $230 a month;
• EPB’s business broadband customers will be contacted individually to coordinate the speed upgrades.

Customers will see the new speeds provisioned within the next two weeks. At least 3,000 residential customers will be upgraded to gigabit service.

EPB also reported this morning it has 55,000 broadband customers.

EPB is one of the nation’s most successful municipal fiber providers and is proving itself a major challenger to Chattanooga’s cable competitor Comcast and incumbent phone company AT&T.

AT&T’s U-verse is the least capable network in Chattanooga, because its fiber-to-the-neighborhood technology currently limits AT&T’s maximum broadband speed in the city to 24/3Mbps. AT&T says it is working on doubling or tripling speeds, but it still leaves U-verse far behind Comcast and EPB.

Comcast has lost at least 47,000 customers in Chattanooga, estimates EPB CEO Harold DePriest. Comcast originally had 122,000 customers on the EPB grid when EPB launched fiber broadband. This year, Comcast has about 75,000 customers and is expected to see numbers decline further in 2014 to about 60,000 customers.

The best Comcast offers is 505/20Mbps service in select cities, with a price tag of $400 a month.

Neither Comcast or AT&T is competing on price for higher speed broadband in Chattanooga. Comcast charges $114.95 a month for 105/20Mbps service and offers 505/100Mbps service in a handful of other cities, for $399.95 a month. Comcast is also currently testing the reintroduction of usage caps and overlimit fees in several markets.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

EPB has been criticized by conservative groups, bloggers, and its competitors that argue municipal utilities have no business being in the broadband business. Most of these groups predicted EPB Fiber would deliver a costly failure for Chattanooga utility ratepayers. The utility has also come under repeated fire from the conservative editorial page in the Chattanooga Times-Free Press, often from ex-editorial writer Drew Johnson, who was fired in August.

DePriest can afford to take the criticism all in stride. He has been with the publicly owned utility for 42 years and has seen Chattanooga transformed from its old manufacturing roots into an increasingly high-tech city, thanks in part to EPB’s robust broadband infrastructure that has exceeded even EPB’s expectations.

EPB’s original business plan called for 28,000 customers to break even, with an estimated ceiling of 43,000 customers that would be willing to sign up. EPB has already passed both estimates with additional growth anticipated. DePriest even predicts EPB could surpass Comcast — the city’s biggest broadband and cable TV player — in market share by the end of next year.

Far from being a financial failure, EPB Fiber is now covering the $19 million debt payment incurred by the utility’s electric business, protecting Chattanooga residents from an electricity rate increase.

EPB is also making money offering advice to other cities who want to launch their own publicly owned fiber networks and avoid making costly mistakes. Consulting services will net EPB more than $1 million over the next three years.

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EPB CEO Harold DePriest announces speed increases and price cuts for customers to celebrate the utility’s fourth anniversary in the broadband business. (3 minutes)

Correction: The original story misreported Comcast’s upstream speed for its 505Mbps tier as 20Mbps. It is, as corrected above, 100Mbps.

Verizon Communications notified the New York Public Service Commission late Tuesday it was abandoning a request to replace damaged landlines anywhere in the state where the company’s facilities were substantially destroyed with a wireless service called Voice Link.

Verizon’s original tariff, if approved, would have allowed the company to drop landline service in areas of New York where it decided it was impractical to repair or replace heavily damaged wired infrastructure. Customers in these areas would no longer be able to obtain wired landline service or DSL broadband. Instead, under the original tariff request, Verizon would offer customers Voice Link as its sole service offering, providing voice-only service over existing telephones, assuming a good signal was available from a nearby Verizon Wireless cell tower.

Yesterday, Stop the Cap! reported a well-placed source in Albany indicated Verizon was unlikely to win approval of its tariff request after a summer of real-world experiences with Voice Link service on Fire Island. Customers overwhelmingly rejected the service, complaining about dropped and missed calls, poor voice quality, and the lack of an affordable broadband option. Yesterday, Verizon separately announced it was reversing an earlier decision and would now install its fiber network FiOS on Fire Island, offering customers the option of keeping Voice Link or switching to FiOS for telephone and/or broadband service.

Accordingly, Verizon today requested the PSC abandon proceedings regarding its request, calling the issue “moot,” and for now will no longer pursue an effort to drop landline service in New York. Verizon will continue to offer Voice Link in the state as an optional service, but will also provide traditional landline and DSL service (where available).

Verizon has not said whether it will continue to pursue regulators for permission to supply Voice Link as its sole service offering in part of New Jersey and Pennsylvania where the company’s landline networks were damaged by last year’s Hurricane Sandy.

Verizon FiOS is coming to Fire Island.

Verizon Communications has thrown in the beach towel attempting to convince residents of popular tourist destination Fire Island to accept its wireless landline replacement Voice Link as the company’s sole landline service option.

After telling customers for months it did not make financial sense to restore copper service or bring its fiber optic network FiOS to Fire Island, Verizon senior vice president of national operations support Tom Maguire today reversed course.

“In today’s competitive marketplace it’s all about making sure you can take care of customers because if you don’t they can go someplace else,” Maguire told Newsday. “Interestingly on Fire Island, there is no place else, so we listened to our customers. It was pretty apparent that we wanted to do something beyond Voice Link and the wireless network, so we think that fiber is the best course.”

Verizon customers on Fire Island have told Stop the Cap! all summer they felt abandoned by Verizon, stuck using a wireless landline replacement service they claimed worked poorly or not at all at times. Customers also loudly complained that Verizon was effectively forcing broadband customers who depended on Verizon DSL to the much more expensive Verizon Wireless broadband service with a very small usage cap. Many attended meetings sponsored by elected officials or the Public Service Commission to decry Voice Link and demand Verizon offer the same quality service its landline network used to provide.

Maguire told the newspaper the company will now deploy its fiber network FiOS on Fire Island, offering residents new options for telephone and broadband service. The 600 customers on Fire Island with Voice Link will be able to keep the wireless service or switch to FiOS fiber.

Reached for comment, Verizon tells Stop the Cap! its fiber service will not include FiOS TV because Verizon does not have franchise agreements with the many municipalities on Fire Island, and their primary concern is getting the fiber network engineered and constructed.

Schumer

Fire Island residents have made it clear to Verizon their biggest concern is Internet access, not television, and Verizon FiOS will be able to deliver faster Internet speeds unavailable from DSL.

Verizon expects to begin construction in October, although it has already started preliminary design work for the new fiber network. Verizon expects to have the fiber build complete by the beginning of the 2014 summer season on the island.

Sen. Charles Schumer (D-N.Y.), who has been carefully monitoring the Voice Link issue, released a statement welcoming Verizon’s decision.

“By installing fiber-optic cables on the island, Verizon will not only make the system as good as it was before, it will be making it better,” said Schumer. “Fire Island residents will now have greater access to high-speed Internet – a necessity in the modern age – and reliable voice service. Verizon deserves credit for listening to our concerns and changing course.”

In a June guest article written for publication on Stop the Cap!, Maguire wrote it would cost Verizon from $4.8 million to more than $6 million to restore landline service. Maguire argued it made no economic sense to commit to a multimillion dollar investment with no guarantee that residents of the island will sign up for Verizon service.

“That’s probably why Verizon is the sole provider on the island,” Maguire noted in the piece. “None of the companies we compete with in other parts of New York offer services on the island.”

Today’s decision represents a complete reversal of the company’s earlier views, but one that is welcomed nonetheless by residents on Fire Island reached by Stop the Cap! this afternoon.

“We’re very glad this is now over and behind us,” said Verizon customer Shari who has toughed out the summer with cellphone-only service.

“I can’t wait to return Voice Link, which has been a real pain,” said Thom.

Both customers tell Stop the Cap! they intend to sign up for Verizon FiOS the moment it becomes available.

Waiting for Comcast and Verizon to offer cutting edge broadband to 620,000 Baltimore city residents and businesses appears to be going nowhere, so the city is hiring an Internet consultant to consider whether to sell access to its existing fiber network.

Baltimore officials spent at least a year trying to convince Google to launch its fiber network in the city only to be bypassed in favor of Kansas City, Austin, and Provo, Utah. Local unions and community groups have also attempted to embarrass the local phone company by publicly protesting Verizon’s lack of interest in expanding its fiber optic network FiOS in Baltimore. Comcast has proved a disappointment for many, with the latest technology going to other cities well before Baltimore gets improved service.

Baltimore’s Board of Estimates voted to spend $157,000 to hire Magellan Advisors to produce a cost-benefit analysis of expanding the city’s current fiber infrastructure to deliver better Internet access.

“I’m paying more here for lesser service, so I think one of the things we want to try to do is look at that, look at what [current companies] offer and try to incentivize people to offer more,” Baltimore’s chief information officer Chris Tonjes told the Baltimore Business Journal. “In the short term, we’re going to do a study. In the medium run, we’re going to try to renegotiate the cable franchise agreement. In the longer run we want to make it more profitable for providers to come in here and offer the expanded service.”

Like many cities, Baltimore already owns and operates its own fiber ring, built with public funds to support the city’s public safety radio system. Like many municipal institutional fiber networks, Baltimore’s fiber ring is underutilized. Public safety and other institutional users often use just a fraction of available capacity. Despite the fact such networks are often oversized, they are rarely controversial because they do not typically compete with commercial providers and are usually off-limits to the public.

As Baltimore prepares to update their existing fiber infrastructure, Magellan will study the implications of leasing excess capacity to third-party providers that can sell broadband access to private businesses and individuals. Even Comcast and Verizon would be welcome to lease capacity.

Neither company has shown much interest, and the proposal received a strong rebuke from Maryland Sen. Catherine Pugh (D-Baltimore City):

Pugh

For the most part, municipally-built broadband networks have the economic chips stacked against them and, where tried, have saddled local taxpayers with a mountain of debt and half-built networks that are then sold at fire-sale prices to vulture investors. Taxpayers in Provo, Utah, for instance, spent $40 million to build a relatively small and modest network only to sell it for $1 a few years later because they underestimated the massive costs of operating, upgrading and maintaining it.

But Provo is just the latest exhibit in a long pantheon of such failed initiatives that include Groton, Conn., ($38 million taxpayer loss) and Marietta, Ga., ($35 million taxpayer loss). Cities as large as Philadelphia, New York and Chicago and as small as Lompoc, Calif., and Acworth, Ga., have also tried and failed to launch their own broadband networks — or simply gave up.

Pugh’s editorial, published in both the Wall Street Journal and The Baltimore Sun, failed to disclose Pugh has received political campaign contributions from both Comcast and Verizon. More importantly, Pugh did not bother to mention she is the president-elect of the National Black Caucus of State Legislators, a group with close ties to both Comcast and Verizon Communications.

Among the “member corporations” of the NBCSL — companies who “weigh in” on the policies promoted by the group: AT&T, Comcast, CTIA – The Wireless Association, the National Cable & Telecommunications Association, Time Warner Cable, and Verizon.

Among the NBCSL’s roundtable members: AT&T, Comcast, Time Warner Cable, and Verizon

For the fourth consecutive year, Verizon hosted its Black History Month open house at the Reginald F. Lewis Museum in downtown Baltimore. This year, among Verizon’s special guests: Maryland Senator and president-elect of the National Black Caucus of State Legislators Catherine Pugh. Comcast has also opened its checkbook to the NBCSL. Among the contributions — $50,000 to form the “NBCSL/Comcast Broadband Legislative Fellowship” to “increase efforts to conduct research and develop solutions regarding broadband adoption among African Americans.”

Opening up a competitive, lower-priced broadband alternative owned by the citizens of Baltimore is not one of Pugh’s favored solutions to be sure.

The NBCSL has been more than a little preoccupied with the business agendas of its corporate members. The group’s glowing endorsement of the Comcast-NBCUniversal merger was so positive, Comcast continues to present the group’s submission urging approval of the merger on its website. In 2011, the NBCSL signed on to the campaign to get government approval of the now-dead merger of AT&T and T-Mobile USA, claiming it was in the best interests of African-Americans. Just this month, Time Warner Cable quoted the group’s comments on the dispute between the cable company and CBS on its website.

Stop the Cap! has refuted claims that public broadband is a financial failure in the past. Read our fact check here.

Although Comcast has been the dominant cable provider in Baltimore for years, its monopoly status is “de facto” only, because federal law prohibits exclusive cable franchise agreements. That being said, no other well-known cable provider will agree to offer service in competition with another. Overbuilders — small private entities that have business plans that depend on competing with incumbent operators, are few and far between. For most Americans, the only cable competition comes from satellite providers or the phone company. Satellite television lacks a broadband option and Verizon’s local broadband infrastructure is limited to providing DSL service.

Tonjes

Tonjes hopes the possibility of a public broadband alternative might shake up the city’s broadband landscape, but not every neighborhood is now passed by the city’s fiber ring.

Despite warnings from public safety officials the wireless landline alternative proposed by Verizon is unreliable and potentially a threat to the safety and well-being of customers, Verizon is moving full speed ahead to deploy Voice Link service in New York and New Jersey communities where existing Verizon landlines have deteriorated and FiOS fiber optics is a distant dream.

On July 12, the Communications Workers of America reported that Verizon’s repair call centers in New York City are now assigning employees to Voice Link-related jobs.

“In addition, CWA members report that technicians are receiving specialized Voice Link installation training and are being assigned to carry out installations in the Buffalo and Watertown areas,” said Chris Shelton, vice president of CWA District 1.

The union also confirmed no further expansion work was being done on Verizon’s FiOS fiber network outside of the areas already committed by the company. Verizon FiOS is only available in a few Buffalo suburbs and not available in Watertown at all.

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CWA District 1 vice president Chris Shelton summed up Verizon’s aggressive deployment of Voice Link: “We can’t allow these dirty bastards to do this to their own customers, who they don’t give a s**t about….” (Warning: Strong Language) (3 minutes)

Sullivan County

More than 130 county executives, legislators, mayors, town supervisors, and councilors representing 68 New York State communities including Albany, Syracuse, Rochester, Binghamton, Plattsburgh, Ithaca, Jamestown, Poughkeepsie, Rome, and Elmira called on the PSC to declare Voice Link an experimental service and not allow it to serve as the sole service offering on Fire Island or anywhere else:

The Commission stated that “[it] has been the Commission’s policy that utilities determine how to provision service via any combination of facilities – wires, fiber optics, electronics – so long as the tariffed service meets the Commission’s prescribed rules and customer expectations.”

Voice Link, as currently offered, does not meet Municipalities’ expectations. Instead, Voice Link would jeopardize municipalities’ ability to fulfill their responsibility to protect the safety of the citizens who reside and work in their communities. The broad and significant implications of Verizon’s proposed tariff warrant a full investigation. New technology should be deployed after solutions are found, not before.

Municipalities urge the Commission to develop a full factual record and to offer interested stakeholders the opportunity to participate fully in this important proceeding. Municipalities rely on the Commission to guide the evolution of the state’s telecommunications infrastructure in a manner that protects citizens’ safety and promotes economic development.

The legislators called Voice Link a threat to public safety and its installation hampered communities from protecting local residents.

In Sullivan County, where Verizon is attempting to introduce Voice Link as an option for seasonal residents, Undersheriff Eric Chaboty said using wireless service carries risks in an emergency.

Chaboty

At a press conference covered by the Mid-Hudson News Service, Chaboty made it clear homeowners should not feel pressured to sign up for Voice Link. Chaboty recounted a story of his neighbor’s house catching fire and the owner called 911 from a cell phone using the same wireless network Voice Link would use. The call was mistakenly routed to another county instead of Sullivan County 911, and by the time the call reached the correct emergency responders, the family’s home burned to the ground.

Stories like that may explain why Verizon has taken great pains to disclaim responsibility for a customer’s inability to reach 911 or be connected to the correct public safety operator.

Assemblywoman Aileen Gunther (D-Forestburgh) was incredulous Verizon would even attempt to introduce Voice Link in the rural Catskill Mountains, which is notorious for lousy cell reception.

“Too much of this county has no service at all and no hope on the horizon,” she told the audience. “Until the time comes when companies like Verizon are willing to make the investment to ensure reliable and thorough coverage, products like Voice Link are an insult and a danger to our community.”

Legislators across the state also suspect Voice Link will create an incentive for Verizon to neglect its already-deteriorating copper wire network, accelerating the need to deploy its preferred wireless solution. But the thought of achieving business priorities at the possible cost of public safety bothered the 134 legislators who signed a petition sent to the PSC.

“When outside plant is inadequately maintained, consumers’ safety is jeopardized because their dial tones may not function when they need to reach emergency services,” the petition explained.

Brookhaven town supervisor Edward P. Romaine held his own news conference at the Davis Park Ferry Terminal in Patchogue last week. He worried that Verizon was attempting to get its foot in the door with Voice Link, and will use any approval to quickly expand it as a “sole service option” elsewhere.

“Our concern isn’t only for Fire Island,” Romaine said. “Our concern is while they’re impacting a few communities in Fire Island, this . . . will spread to all of Fire Island and possibly to the main island.”

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/CBS This Morning No more landlines Verizon wont fix storm damaged wires 7-19-13.flv[/flv]

CBS’ This Morning covered Verizon’s plans to drop landline service in Mantoloking, N.J., on an off shore barrier island. Residents really don’t want Voice Link as the replacement, but at least they have an alternative. Unlike on Fire Island, Mantoloking is served by a cable company – Comcast. (3 minutes)