A fiber optic network may be only as good as the marketing that sells it.

If that is true, Fort Wayne residents have made their choice, and they prefer Comcast Cable over Frontier Communications FiOS.

City officials released figures this week showing Comcast has a clear lead in the Indiana city.  Both companies pay the city franchise fees to do business in Fort Wayne, and Comcast paid almost $435,000, almost double Frontier Communications’ $262,556.

Ft. Wayne, Indiana

Frontier assumed control of the fiber optics network when it purchased the local assets of Verizon Communications.  But Frontier quickly found that volume pricing for video programming gave the old owner a decided advantage.  Frontier found programming prices for its comparatively smaller footprint far higher than what Verizon paid, and quickly began encouraging its fiber video customers switch to DirecTV satellite service.  Comcast responded with a billboard campaign that suggested Frontier was getting out of the fiber business, and encouraged customers to come back to cable.

Some did, but Frontier says it remains committed to its inherited fiber network, even though it lost over 10,000 customers last year.

“We’ve completed our evaluation of our business model and pricing,” Frontier’s Matt Kelley told the Journal-Gazette. “We’re offering an attractive bundle price. Customers are recognizing the quality and value, and that it’s a very compelling service.”

Frontier does appear to be serious about maintaining the broadband and phone service attached to its FiOS product, but has been looking for ways to bring down the wholesale cost of cable television programming and so far has shown no interest in expanding it.

“Our focus is not on FiOS video deployment,” Frontier CEO Maggie Wilderotter told investors in 2010. “The costs to install, set up and market new FiOS video customers are very expensive and, in our view, uneconomical.”

That’s less of a problem for Comcast, the nation’s largest cable operator.  It enjoys volume discounts few other providers can negotiate.  Comcast always had a built-in advantage associated with its incumbency.  Getting customers to switch providers isn’t easy.  But despite the presence of an advanced fiber optic network operated by the competition, Comcast has held on to customers.

“Our customers that are staying with us and joining us are enjoying our services, especially since the introduction of our Xfinity home security management system,” said Comcast’s Mary Beth Halprin, not missing an opportunity to pitch the cable company’s latest new product line. “The home security service costs $39.95 a month and provides around-the-clock monitoring and allows customers to watch live-streaming video from wireless cameras using an iPhone or iPad.”

Schuyler County

The fastest thing in Schuyler County, N.Y., isn’t broadband — it’s the Watkins Glen International speedway.

County officials hope to change that, voting unanimously this month to approve an agreement with the Southern Tier Network to bring a regional fiber optic system into the county.

The not-for-profit local development corporation established to build and manage the regional fiber network doesn’t sit well with some county residents, however, including one retired Verizon employee who dismissed the project.

Odessa resident Karen Radenberg called fiber optics technology “old school” and said no private company will connect to the fiber network to expand broadband service.

Radenberg urged the county to consider that communications companies have now moved on to using 4G wireless technology instead of fiber.

“That’s ridiculous,” countered Legislature Chairman Dennis Fagan (R-Tyrone).

Fagan

Fagan pointed to nearby Ontario County’s fiber middle-mile and institutional network which has signed companies, including Verizon, as customers.  Verizon reportedly uses the Ontario County network to deliver backhaul connectivity to its cell tower network in the area.  Ontario County is served by several different landline companies including Frontier Communications, Verizon, and Windstream.  Time Warner Cable is the dominant cable provider, but large sections of the county are deemed too rural for cable television service.

Fagan said the new fiber network will improve the chances private companies will expand broadband across the county, but also help deliver an important upgrade to the region’s emergency responder communications system.  The extremely hilly terrain across much of the southern tier creates problems because of signal gaps.  The new fiber network will allow the county to build radio repeaters into areas where the existing network of microwave communications towers cannot reach.

Schuyler County currently has no plans to sell Internet connectivity to the public, but hopes existing private cable and phone companies — including Time Warner Cable and Verizon Communications — will consider utilizing the network to expand service.  Neither company has shown much interest expanding service to new areas recently, most likely because expansion costs will not be recouped fast enough.

If the county network reduces the cost to expand service, more homes and businesses may now fall within a “Return on Investment” formula that could mean the difference between broadband and dial-up.

As AT&T joins Verizon selling off its Yellow Pages publishing unit and payphones keep disappearing from street corners, the media is writing the landline obituary once again.

CNN Money asks today whether we’re witnessing the death of the landline.

In as little as 20 years, the concept of a wired phone line may become the novelty a rotary-dial phone represents today.  Yes, traditional phone lines will still be found in businesses and in the homes of those uncomfortable dealing with a mobile phone, but America’s largest phone companies are well aware the traditional telephone line is in decline.

[flv width=”412″ height=”330″]http://www.phillipdampier.com/video/ATT Archives What is the Bell System.flv[/flv]

The Bell System, as it was known until the 1980s, used to comprise AT&T, Bell Labs, Western Electric, Long Lines, and two dozen local “operating companies” like New York Telephone, Mountain Bell, etc.  This AT&T documentary, from 1976, explores how “the phone company” used to function.  New innovations like “lightwave” are showcased, promising to deliver voice phone calls over glass fibers one day.  

Much of the technology seen in the documentary may be unfamiliar if you are under 30 (and check out how customer records were maintained back then), but those who remember renting telephones in garish colors from your local phone company will recognize the phones that occupied space in your home not that long ago.  The only part of the landline network that hasn’t changed much in the last 40 years is the wiring infrastructure itself, which has been allowed to deteriorate as customers continue to depart.

Why was the company so darn big back then?  Because it had to be, the documentary says, to serve a big America.  Hilariously, the company defends its then-status as a “regulated monopoly” telling viewers “[a] regulated monopoly works well in communications because you don’t duplicate facilities and you produce real economies over the long haul.”  (14 minutes)

CNN reports nearly one-third of all American homes no longer have landline service, double the rate from 2008, triple that of 2007.  Verizon is feeling the heat the most, with revenue down 19% over the last five years.  AT&T has seen their revenue drop 16.5% over the same period.

But things are not all bad for phone companies willing to spend money upgrading their networks.  Verizon’s top-rated FiOS fiber to the home service is a compelling competitor to Comcast and Time Warner Cable.  AT&T’s U-verse has gotten a respectable market share larger midwestern cities and draws customers who like its DVR box and the chance to stick it to the local cable company they’ve hated for years.

But where both companies have decided against investing in upgrades — notably in their rural service areas — the traditional phone line is trapped in time.  Only the network it depends on is changing, and not for the better.

[flv]http://www.phillipdampier.com/video/ATT 1993-1994 You Will Ad Campaign Compilation.flv[/flv]

Back in 1993, AT&T produced seven advertisements dubbed the “You Will” series, showcasing future technologies AT&T would “deliver to you.”  Eerily, the vast majority of these predictions came true, but mostly from companies other than AT&T.  While the phone company predicted what would eventually become E-ZPass, Apple’s iPad, Apple’s Siri, the smartphone, Skype, Amazon’s Kindle, the cable industry’s home security apps, video on demand, and GPS navigation, most of those innovations were developed and sold by others.  

AT&T spun away Bell Labs and became preoccupied selling Internet access, cell phones and reassembling itself into its former ‘hugeness’ through mergers and buyouts. With limited investment in innovation, AT&T risks being left as a “dumb pipe” provider, selling the connectivity (among many others) to allow other companies’ devices to communicate. (Alert: Loud Volume at around 2 minutes) (4 minutes)

Verizon decided to ditch its rural service areas to FairPoint Communications in northern New England and Frontier Communications in 14 other states.  The results have not been good for the buyers (and often customers).  FairPoint went bankrupt in 2009, overwhelmed by the debt it incurred buying phone lines in Vermont, New Hampshire, and Maine.  Frontier has watched its sales fall ever since its own landline acquisition, and the company has gotten scores of complaints from ex-Verizon customers about broken promises for improved broadband, billing errors, and poor service.

Analysts predict AT&T will start dumping its rural landline customers in the near future as well, letting the company focus on its U-verse service areas.  But who will buy these cast-offs?  CNN reports nobody knows.  CenturyLink and Windstream, two major independent phone companies, don’t appear to be in the mood to acquire neglected landline facilities they will need to spend millions to repair and upgrade.

One thing is certain — both AT&T and Verizon are tailoring business plans to favor Wall Street approval.  The companies’ decisions to temporarily boost revenue selling pieces of its operations has helped stock prices, but has also made the companies shadows of their former selves.  Nearly 30 years ago, customers still paid the phone company to rent their home telephones, relied extensively on the companies’ lucrative White and Yellow Pages for directory information, and discovered new technology innovations like digital switching thanks to Bell Labs, the research arm of AT&T — today independent and known as Alcatel-Lucent.  Today, people in some cities cannot even find a telephone company-owned payphone.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WJBK Detroit Quest to Find a Working Pay Phone 4-10-12.mp4[/flv]

WJBK in Detroit this week ventured out across Detroit to see if they could find a pay phone that actually works.  That old phone booth on the corner is long gone, and some admit they haven’t touched a pay phone in 20 years.  (2 minutes)

Stop the Cap! has learned Frontier Communications is laying the groundwork to upgrade selected areas of its network to deliver fiber-to-the-neighborhood service to some of its customers, perhaps as early as the last quarter of 2012.  Documents obtained by Stop the Cap! indicate the company is negotiating with AT&T to license U-verse technology to deliver the service.

The documents suggest Frontier’s 2011 negotiations with AT&T to resell mobile phone service to Frontier customers have now expanded to include the development of improved broadband at a cost less likely to antagonize Wall Street and the company’s investors.

Sources familiar with Frontier’s operations tell Stop the Cap! although the company will continue to support Verizon-acquired FiOS fiber-to-the-home networks in Indiana and the Pacific Northwest, Frontier plans to rely on less-expensive alternatives for the rest of its service areas and has no plans to further expand the FiOS branded fiber-to-the-home service.

For the most rural customers, Frontier appears ready to partner with HughesNet to resell a satellite broadband product to customers considered unsuitable for basic DSL service.  Frontier will continue to invest and upgrade its traditional 1-3Mbps ADSL service in rural states like West Virginia, Idaho, Nevada, and South Carolina.  The company is also planning to upgrade selected cities to VDSL — a more advanced form of DSL needed to support a U-verse offering.  Perhaps one major target for such an upgrade is Frontier’s largest service area — Rochester, N.Y., where Time Warner Cable has systematically picked off Frontier’s landline customers for years with offers of faster broadband speeds and better package pricing.

Frontier's headquarters in Rochester, N.Y.

Frontier’s insistence customers don’t need faster broadband speeds, a statement made repeatedly by Frontier Rochester general manager Ann Burr, has cost the company market share, especially for high speed Internet service.  Although Frontier claims to offer speeds up to 10Mbps in Rochester, the company only manages to deliver 3Mbps in some of the city’s nearest suburbs.

An upgrade to U-verse, while not as technologically advanced as fiber to the home service, would help Frontier defend its position in more urban markets, especially as cable companies upgrade their own infrastructure to market faster broadband speeds.

AT&T U-verse sells broadband at speeds of 3, 6, 12, 18, and 24Mbps.  Time Warner Cable, Frontier’s largest competitor in upstate New York, sells speeds of 3, 10, 20, 30, and 50Mbps.

Frontier Communications has been preoccupied integrating its newest customers, acquired from Verizon Communications in 2009, with their existing IT and operations systems.  The company recently touted it completed transitioning former Verizon operations, financing, and human resources with its own information technology network nine months ahead of schedule.

Frontier has been reorganizing some of its internal departments in preparation to launch several aggressive initiatives in 2012, especially in its efforts to roll-0ut more competitive broadband — considered a landline lifesaver —  in areas where the company has lost a lot of business to its cable competitors.  The company also intends to spend tens of millions upgrading its regional and national broadband infrastructure and continue extending DSL service to presently unserved rural areas.

Another planned improvement is an overhaul of Frontier’s website, which has brought complaints from customers for delivering inaccurate information, making online bill payment cumbersome, and being difficult to navigate.

Documents obtained by Stop the Cap! also reveal the company has made progress on its plans to pitch AT&T cell phone service to Frontier customers.

Frontier signed a resale agreement with AT&T last fall and is on track to begin limited trial offers of AT&T cell phones, smartphones, and tablets — with full access to AT&T’s network of 29,000 Wi-Fi hotspots during 2012 with a more widespread rollout in 2013.  Frontier plans to offer customers the option of a single bill for Frontier and AT&T services.

Frontier’s Karen Miller told Stop the Cap! the company had no comment about today’s story.

Appalachia: A major target for copper theft

Some 8,000 residents in Pike, Scioto, and Jackson counties found themselves without phone service when copper thieves mistakenly cut a critical fiber optic line serving Frontier Communications customers across the region.

As a result, phone service, broadband, 911, and even ATM machines were left out of order for hours last Wednesday, not restored until Thursday afternoon.

Pike County Sheriff Richard Henderson told WBNS-TV the outage was devastating for emergency responders.

“It’s a fear for us, because we depend on it for people to be able to call us for emergency situations,” Henderson said.

As a result of the fiber cut, the department was able to forward cellular 911 calls to neighboring counties, but the delay in response could have been life-threatening in some cases.

Frontier and other phone companies in Appalachia have been particularly hard-hit by copper theft, often committed by those with substance abuse problems.

Scrap copper prices remain very high, and some scrap dealers are accused of looking the other way when suspiciously-obtained “scrap copper” is delivered for a cash sale.

Brazen copper thieves have even stripped copper phone wiring in broad daylight, literally tearing it off utility poles as they drive down rural country roads.

Some of the worst problems have occurred in West Virginia, where lawmakers are beefing up criminal penalties for copper theft in an effort to control the problem.

Unfortunately for phone companies like Frontier, thieves often mistake fiber optic cabling — worthless for scrap metal resale — for copper, and with phone companies increasingly dependent on fiber to move a substantial amount of data traffic and phone calls between central offices and beyond, a single fiber cut can create major headaches for customers, and an expensive, often complex repair job for technicians.

Some companies in hard-hit areas are now building network redundancy into their service areas, allowing for quicker restoration of service.

That won’t help customers who are missing the phone cable that used to wind through their neighborhood, but maintaining a backup could be a life-saver in cases where phone companies rely on fiber and copper cables to move large numbers of calls between their switching centers and beyond.

[flv width=”600″ height=”356″]http://www.phillipdampier.com/video/WBNS Columbus Thieves Cripple 911 Internet Phone Services In Pike Scioto Jackson Counties 3-30-12.f4v[/flv]

WBNS in Columbus covered the extensive impact copper theft can have disrupting daily life in southern Ohio.  (3 minutes)