Verizon delivers fiber-to-the-home service over its FiOS network.

Verizon Communications says it will not run an Internet Overcharging scheme on its wired broadband customers.

The company that knows about investment and upgrading their networks like few others — bringing true, fiber-to-the-home FiOS service to customers across several states — says it has no need to impose usage caps or metered billing on its wired broadband customers.

“This is something we have looked at in the past, and we’ll continue to evaluate what’s best to ensure our customers get the best broadband service for the best value,” Verizon spokesman Bill Kula told Broadband Reports. “We have no plans to implement usage-based pricing for our fixed broadband customers,” Kula says.

Verizon’s announcement provides additional ammunition against AT&T’s unjustified 150-250GB usage caps over claims it faces congestion issues.

The company doesn’t share AT&T’s “congestion problem,” probably for two reasons:

1. Because it does not exist.
2. Verizon has upgraded their network to keep up with demand, winning new customers with their top-rated FiOS fiber to the home network.

Karl Bode sees right through AT&T’s arguments:

If you believe AT&T’s claim that the new pricing is about congestion and not about protecting U-Verse revenues from a Internet video — and many don’t — Verizon’s decision to spend $24 billion on upgrading more than half of their network to fiber to the home would make a Verizon decision to follow suit a very tough sell. AT&T has previously stated their last-mile customers see little to no congestion, and Verizon’s seeing even less.

Kula notes Verizon doesn’t oppose the use of usage caps, but their TOS allows them to handle any users they deem particularly gluttonous, and even then — Verizon makes it clear to us they’ve never disconnected one of these users. “Verizon terms of service were written in a way to allow us to terminate users if they violate our acceptable use policy, and excessive use ‘could’ constitute a violation,” says Kula. “However, we’ve not disconnected any consumer, small business or mass market customers to date.”

Stop the Cap! has never objected to terms and conditions which provide an escape clause for a provider that encounters a customer creating significant problems on its network, such as e-mail spamming, illegal activity, or causing serious problems for other users.  These terms and conditions are a part of every Acceptable Use Policy, and responsible providers don’t activate those provisions on a whim.

It’s too bad some AT&T customers can’t choose an alternative to a company who promised great things with U-verse, and then put unjustified limits on customer enjoyment.

Bennett

We received word this afternoon proponents of community-0wned broadband in North Carolina were under attack by the ironically-named Innovation Policy Blog from the Information Technology & Innovation Foundation (ITIF), a thinly-disguised, industry-funded think tank.

Charges and counter-charges are flying fast and furious. Well-travelled muni broadband consultant Craig Settles says the authors are in the pockets of Time-Warner Cable, and urges people around the country to lobby NC legislators to kill the bills:

The battle is now fully joined in NC. But it’s not just their fight, and it’s not a fight solely about broadband. This fight affects everyone who believes that communities deserve the freedom to choose their own best solutions to key problems involving economic development. Communities own the problems of this terrible economy.

Philip Dampier, the supporter of former New York Congressman Eric Massa who joined the broadband policy fight when Time Warner was experimenting with metered pricing, is even more shrill than Settles.

I suppose being called “shrill” is a little better than “mean and nasty,” even if perennial industry defender and comment troll Richard “I Don’t Work for a K Street Lobbyist, But I Do” Bennett doesn’t bother to spell my name correctly.

Bennett’s read of North Carolina’s H.129 is that it’s a minor little bill that does no harm.

I don’t see what our perpetual network operator-haters are so worked up about, although I can certainly see that the network equipment vendors want more outlets for their gear; more power to them. The bills actually don’t place any restrictions at all on unserved communities (where 90% or more can’t get broadband) who want to build themselves a first-class, triple-play enabled, broadband network or anything else better than dial-up. If there weren’t such an exemption, I’d be just as riled as the people I’ve quoted.

Supporting innovation from the right kind of companies.

I suspect Bennett may have trouble seeing the facts on the issue because they are obscured by the $20,000 stipend he picked up from Time Warner Cable.  That is in addition to his regular salary provided by players with a dog in the fight.

Unfortunately for those who accidentally stumble their way into the warped world of “innovation” some of our biggest telecommunications companies have in store for us, Bennett forgets to disclose who pays him.

Our argument (the one that comes without industry money-strings attached) is explored in great detail here.

For the benefit of those who don’t want to dirty themselves wading through the ITIF’s blog, here is our response in full:

Richard and I have discussed several issues impacting the broadband community over the past two years.  He always takes the side of the industry that pays him well to serve as their mouthpiece, and I represent actual consumers and do not take a penny of industry money.

The ironically named “Innovation” blog attacks the very innovation that community broadband brings to hard-pressed communities in North Carolina who want to reinvent themselves from their tobacco and cotton-past.  The reason these networks exist is because existing companies refused to provide the service needed to accomplish this task.  Richard has no idea what these communities and ordinary North Carolina consumers are going through because his article exists merely as a “drive-by” hit piece that mischaracterizes the bill, the people that oppose it, and leaves his readers thinking he doesn’t have direct ties to a company that helped write the bill.

Gone undisclosed: Bennett accepted a $20K stipend from Time Warner Cable and does work on behalf of a K Street lobbyist.  That’s “dollar a holler” reporting.

Folks, follow the money.  If a Big Telecom company is involved, Richard reflexively adopts their position, often to the detriment of consumers.  He is also factually wrong.

1) Wilson did not “buy” their fiber to the home network, they built it.
2) Davidson and Mooresville bought a bankrupt Adelphia system that needed major upgrades.  Time Warner would have done precisely the same thing the community did, only they would pay for it with rate hikes across the state (except in Wilson which has avoided rate increases from Time Warner precisely because GreenLight is running there).
3) Salisbury has had a waiting list for signups.  Not bad for a “failure.”  EPB just finished their award-winning network in Chattanooga ahead of schedule.

The public-private partnership idea has no opposition, except among providers who won’t hear of anything they don’t own, operate, and control outright.  It is telling ongoing negotiations over Ms. Avila’s Time Warner-written bill have broken down because she still objects to language that would keep those networks in business to create those kinds of success stories.

All of the pipe dreams in this piece come from the author.  I’m not an industry consultant.  I just know a much better deal when I see one.  GreenLight, EPB, and Fibrant all deliver better service than the cable company or phone company and the money paid to them remains in those communities.  They also deliver unlimited service, an issue that now becomes more important than ever with AT&T’s attempt to launch its Internet Overcharging scheme.

The key question Bennett never asks is exactly how H.129 will improve broadband in the state, whose broadband rankings are unworthy of its potential.  Answer: it won’t.  It simply delivers protection for incumbent providers who will continue to not deliver the kind of service people want and will continue to ignore rural areas they have always ignored.  When a “small government” conservative like Marilyn Avila writes micro-management requirements for these networks right down to banning them from promoting themselves and arguing over service area boundaries (conditions Time Warner is exempted from), it tells you how far certain legislators will go on behalf of large telecom companies.

As for voter approval, it already exists in the form of elections.  I haven’t seen any “throw the bums out” movement in Tennessee or North Carolina over this issue.  In fact, the only ones out of office are the last two legislators that proposed these anti-community broadband bills.  Ty Harrell resigned in disgrace and David Hoyle left office admitting, on camera, Time Warner Cable wrote the bill he introduced.

Nice try, Richard.  Maybe if Time Warner gave you $40k, you would have spent more time coming up with legitimate arguments instead of just attacking the “music men” who can name your tune after the first predictable note.

Phillip M. Dampier
Editor, Stop the Cap!

[Update 3:42pm — We just received a carbon copy of an e-mail Rep. Marilyn Avila (R-Time Warner Cable) sent out after Bennett’s piece was published (coordinated effort, anyone?).  Amusingly, she forgot to hide the carbon copy list.  Among the recipients — two lobbyists from Time Warner Cable, the state’s top cable association lobbyist, and CenturyLink.  The most hilarious part of all — her claims Bennett’s piece represented an “independent explanation” to correct the “false record” on her anti-consumer bill.  Every resident in North Carolina should be on the phones and e-mail today telling the Finance Committee to oppose H.129, and also let them know Ms. Avila’s office is sending out distorted articles written by a K Street lobbyist who accepted a $20k stipend from Time Warner Cable, the company that most strongly supports this bill.  How “independent” is that?]

Frontier attempts to dig themselves out.

The Oregonian has been covering the plight of Frontier customers in the Pacific Northwest who signed up for Verizon’s fiber to the home service — FiOS — and are now facing down the new owners who want to raise the price by $30 a month.

Frontier has done itself no favors in the media with an ongoing series of reports of service problems, rate increases, and now the latest signs it wants out of the television delivery business altogether.

In a letter dated March 4th, Steven Crosby — senior vice president of government and regulatory affairs, told the city administrator in Dundee, Ore., Frontier FiOS TV has been a flop.

Since Frontier Communications Northwest, Inc., acquired Verizon’s operations on July 1, 2010, it has built on Verizon’s prior actions and continued to offer a robust and aggressively priced video product to attract Dundee subscribers.  Despite these efforts, however, customer growth has been disappointing and stagnant and Frontier has not achieved a commercially reasonable level of subscriber penetration.

Frontier also admits it has been under-pricing its video service to stay competitive and attract new customers, but those days are over.  The company earlier announced its intention to raise rates by $30 a month for its standard cable TV service, making it more costly than its nearest competitor, Comcast.

Frontier recognizes the impact its enormous rate increase will have on its subscriber base, soberly noting it is likely to “further depress subscriber penetration.”

With this in mind, Frontier is exercising its right under the franchise agreement it has in Dundee to provide notice it intends to terminate its video service at a future date, after providing subscribers with 90 days advance notification.

Similar letters went to city administrators in Newberg, McMinnville, and Wilsonville.  City officials had no reservations about interpreting the meaning of the letters and plans to implement a $500 installation fee for future FiOS TV installations.

“Looking at it, you expect there will be no new customers,” Dan Danicic, Newberg’s city manager told The Oregonian. “Getting this opt-out notice is not a huge surprise to me, but we are disappointed.”

Frontier's rate increases are driving many consumers back to Comcast for their television service.

Sources tell Stop the Cap! there was considerable debate inside Frontier’s offices last week on how to implement directives from executives to shut down FiOS installations as quickly as possible.  Initial efforts to quietly raise the installation price — without giving subscribers’ advance notice — were on track until Frontier’s legal department quashed the plan.  Concerns were also raised inside the customer support units responsible for taking orders and handling customer billing inquiries over how to deal with the inevitable subscriber backlash when the first bills arrived in the mail.

“Frontier hates dealing with FiOS and they can’t wait to be rid of it — they claim that the product is at least 10 years away from really returning any investment from its original deployment,” a well-placed source told Stop the Cap! late last week.

Frontier FiOS is an anomaly for the rural phone company, which delivers the vast majority of its broadband customers DSL service over copper wire phone lines, usually at speeds approaching 3Mbps.  Frontier FiOS “came along with the deal,” one Indiana Frontier official told local media there in response to rate hikes there.

Still, media reports that the company plans to ditch its TV customers created a small panic inside Frontier by the weekend.

“Getting customers switched over to satellite TV service in an orderly manner was the original plan, but reports the company was abandoning the service altogether risks we’ll lose our customers to Comcast, and many will take their phone lines to the cable company, too,” a second source informed Stop the Cap! this morning.  “We were told ‘orderly transition’ over and over again, so reassuring customers is today’s top priority.”

Dundee, Oregon

Evidence of this campaign was not difficult to find over the weekend, as The Oregonian amended its original story claiming Frontier does not have immediate plans to exit the video business.

Crosby told the newspaper: “Our actual implementation decisions will be business driven. At this time, there is no change in our FiOS video offerings or in our FiOS video service delivery to our customers. And this filing does not affect our FiOS high speed service.”

Stephanie Schifano, identifying herself as an employee of Frontier Communications, attempted to spin the letters sent to several Oregon communities as a simple matter of business and not a foreshadowed abandonment of television service.

“Frontier is exercising our right under the franchise agreements to terminate the franchises. The right to terminate soon expires, and if Frontier didn’t give notice now we may have been required to provide this service, with these franchises, for another 12 years. This notice offers Frontier the flexibility to continue to analyze the FiOS Video/TV business and continue to service our customers,” Schifano wrote.

But both of our sources well-familiar with Frontier FiOS say the company’s actions speak louder than its words.

“When you increase the installation fee to $500 and raise your prices nearly $30 higher than Comcast, you would be crazy not to interpret the message Frontier is trying to send — go get your satellite dish from us and get off FiOS,” our second source told us.

Telecompetitor read into some of the company’s comments about utilizing the acquired fiber network in a new way, perhaps for over-the-top Internet video content.

“That’s wishful thinking,” our second source says.  “Frontier’s only online video efforts surround its rebranded Hulu service, relabeled myfitv.”

Frontier's online video platform serves up mostly repurposed Hulu content.

“The company has no plans I am aware of for a grand video strategy — FiOS covers far too small a service area and there is no way Frontier will spend more money to increase that fiber footprint,” our source adds. “Frontier wants to meet its general obligations made as part of its deal with state regulators when it bought Verizon FiOS with the landline deal, and little else.”

Frontier will continue to offer FiOS to broadband customers for the time being, regardless of what it does with its video package.

“If it’s already there and not costing a lot of money to maintain for broadband, why not?” our source says.

One direct sales contractor for competitor Comcast suspects that train may have already left the station.

Calling Frontier’s customer service operation “a circus,” the salesman says Comcast is benefiting from Frontier’s ball-dropping.

“Many Frontier customers are unhappy with the customer service side while stating they do enjoy their phone, Internet, and video services provided by the FiOS network, but lose the business on the practically non-existing customer service side.”

The contractor says he hears stories from Frontier customers all day who are fed up with the frustration of extended hold times, inaccurate or missing bills, online account access problems, excessive call transfers to deal with service issues and high fees.

For regulators, the aggravation is much the same.

After being promised by CEO Maggie Wilderotter that Frontier would be an aggressive competitor in a barely competitive marketplace, Frontier has raised rates by 46 percent, irritated their customers with customer service problems and outages, and now has served notice it intends to flee the TV business at an undetermined point in the future.

Sibley County's fiber future?

It takes a lot of chutzpah to vilify a community’s proposed fiber to the home network when you’ve managed to completely screw up the one you’ve acquired from another company, but Frontier Communications tries anyway.

Instead of relying on Frontier’s overpriced (and soon to be rationed) slow speed DSL from an earlier era, Sibley County, Minnesota is proposing a municipally owned fiber project that will bring much needed connectivity to area businesses, homes, and farms.  Community Broadband Networks found a certain phone company in strong opposition.  Frontier warned county officials not to make the mistake of delivering better service than they can provide themselves:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the “fiber to the home” proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

Frontier even “runs the numbers” on the county proposal.  But Sibley County should carefully consider the source.  This is the same company that couldn’t manage its fiber to home network it acquired with landline purchases from Verizon Communications.  Instead, this month it dumped $30 rate increases on its fiber customers in the Pacific Northwest and Indiana.

Frontier has a vested interest in maintaining the status quo, which means leaving many rural Minnesotans with one choice for broadband: Frontier.

Of course the company opposes the county’s fiber project — they would be crazy not to, considering it will cost them many of their customers.

Cherry-picking a small percentage of the municipally-owned networks facing difficulties is just a scare tactic, and doesn’t prove their case.  County officials should consider the growing number of projects that are a breath of fresh air for the communities they serve, all at no risk to taxpayers: projects like EPB in Chattanooga, Greenlight in Wilson, or Fibrant in Salisbury — both North Carolina.

Or DSL past?

Those projects all faced the same provider-financed campfire scary stories, too — just because incumbent cable and phone companies didn’t want the competition.

When wild claims about failing projects don’t work, Frontier officials hilariously offered up this absurdity in a story in the Arlington Enterprise that ran Dec. 16.

“What we can do is provide the same speed of service as fiber can provide,” said Todd Van Epps, Frontier’s regional manager.

Really, on Frontier’s pre-existing, decades-old copper wire network?  The same one that Frontier currently sells “blazing fast/up to” 3Mbps DSL service on for $50 a month?

In comparison, the fiber network proposed for Sibley County would deliver at least 20/20Mbps service for less than $50 a month.  That fiber network is infinitely upgradable as well, with service up to 1 gigabit per second if a customer needed that much.

Our advice when dealing with Frontier’s promises: get them in writing.

When a company tells customers to throw away their Frontier FiOS fiber and switch to a competitor’s satellite television service or else pay $30 more per month for basic cable, their helpful advice about how to manage the fiber business should be taken with a grain of salt.

Time Warner Cable customers in the Albany, N.Y. area are complaining about the cable company’s latest rate increase which will cost most bundled customers at least $7 a month more in 2011.

Time Warner blamed the rate increases on investment and upgrades to their facilities and increased programming costs.

The company’s heavily marketed $99 promotion is also coming under fire in the area, because many customers don’t qualify for it.

The Albany Times-Union reports many area residents were invited to call the company “to see how they could lower their bill.”  Time Warner has marketed a one year promotional offer providing the company’s triple-play bundle of phone, Internet and cable-TV service for around $33 for each service, or $99 a month.  But when customers called the company, they were told they don’t qualify for the promotion.

Michael Malachowski, a Delmar resident, learned the hard way that winning a promotional offer from the cable company wasn’t going to be as easy as he thought.

Malachowski currently has a bundle of services with the company and spends around $140 a month.  But he learned he can’t qualify for Time Warner’s $99 offer  — it is available only to new customers or those with a single service.

Other area customers shared similar stories with the newspaper.

One way around the roadblock is to threaten to cancel.

Albany customers are getting some additional powers to negotiate with the imminent arrival of Verizon FiOS TV, coming to Bethlehem, Scotia, and Colonie.  A similar bundle of services from Verizon is a lot cheaper than Time Warner’s $140 a month.  The fiber to the home network offers an online promotion for all three services for $84.99 a month for at least the first year.

Even if FiOS is not an option, Time Warner bends the rules when customers are on the verge of cutting their cord.