Downtown Leverett (Courtesy: Town of Leverett)

Life in Leverett, Mass. could get a lot faster as the community considers entering the 21st century by bringing high speed gigabit broadband to town.

For years, residents have had three relatively slow choices for Internet access: dial-up, wireless or satellite-delivered service.  Verizon and cable companies like Comcast and Time Warner Cable, which have systems in western Massachusetts, have largely ignored Leverett’s need for speed.

Now the town is considering building its own fiber-to-the-home network to reach every home in Leverett starting in 2014.  The proposed $3.6 million network will also offer residents cable television and phone service — helpful upgrades in the western half of Massachusetts where Verizon has allowed their landline network to degrade to conditions declared intolerable by the state Department of Telecommunications.  Last year, the state agency ordered Verizon to assess and repair its landline network in almost 100 communities in the western half of the state.

Town officials will introduce their plans for the new municipal broadband network at a public meeting April 28.  The community would borrow the money to construct the network, paying it off over 20 years and outsourcing its construction and maintenance to outside companies.

The town originally planned a fiber-to-the-neighborhood network similar to AT&T U-verse, but quickly decided the benefits of a true fiber-to-the-home network were worth the extra investment.

Unlike some other community-owned networks, Leverett will raise taxes on local residents to cover the cost of the service, but Selectman Peter d’Errico says it will save most residents money if they currently pay a satellite provider for broadband service. Research shows the largest majority of Leverett residents get broadband from satellite providers.

“It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will pay less,” d’Errico told the Daily Hampshire Gazette.

d’Errico added the local community is done waiting for private companies to deliver modern telecommunications services in Leverett.  Those companies have repeatedly told town officials there isn’t enough profit or return on investment to justify expanding broadband in rural communities.

Leverett hopes to serve as a template to more than 40 other western Massachusetts communities who belong to WiredWest, a consortium of similarly-situated towns working together to build a regional broadband network.  Leverett’s network would leverage the Massachusetts Broadband Institute’s 1,300 “middle mile” fiber backbone network that is working its way through 123 western and central Massachusetts towns.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WGGB Springfield Internet Connection in Leverett 4-11-12.mp4[/flv]

WGGB in Springfield previews Leverett’s efforts for better broadband. Big commercial providers ignore the community so now they want to provide service themselves.  (2 minutes)

Frontier Communications faced unhappy investors Thursday after announcing it was slashing its dividend nearly in half in an effort to raise money to sustain the company’s cash flow and reduce its debt.

The company’s earnings fell 8.1% as customers continued to leave for the competition, seeking better service and lower prices.

The poor earnings results and the dividend cuts delivered a one-two punch to Frontier stock, which slid to $4.20 a share, down 16 percent in the last three months.

Among Frontier’s biggest challenges remains the quality of its broadband service to customers.  Where competition exists, Frontier DSL continues to lose the speed battle, and recent junk fees padding customer bills, including a “High Speed Internet surcharge,” and increasing modem rental fees have alienated some customers.

Frontier’s chief operating officer and executive vice president Dan McCarthy told investors 83 percent of Frontier’s service area has access to the company’s broadband product.  However, fewer than 20% of Frontier’s customers have access to speeds as high as 20Mbps.  Only just over half can access the Internet at 6Mbps.  Many of Frontier’s customers can only access lower speed service (66% can choose 4Mbps, 76% — 3Mbps, and the rest 768kbps-3Mbps).

“We’ll be investing throughout the year to improve speed-reaching capability in all our markets,” McCarthy told investors on a conference call last week.

In the second half of 2010, Frontier is expected to increase the amount of Ethernet in its middle mile network, which McCarthy expects will allow the company to deliver faster speeds over VDSL2 and VDSL2 bonding as means of driving both speed increases in the residential and the commercial markets.

However, Frontier’s preoccupation with an internal system conversion, to integrate its acquired Verizon service areas with the rest of its network, has stalled much of the company’s marketing.  Promotions, in particular, have been anemic over the last several months and will likely remain that way until later this year.  Where competition exists, cable operators have successfully been picking off Frontier’s customers.

• Broadband and satellite TV additions are down, in part due to the lack of promotions and marketing;
• FiOS video losses continue as the company shuns its fiber video service in favor of satellite TV cross-marketing;
• Line loss rates remain very high: 8.3% of Frontier’s customers disconnected their landline service in the last quarter, 5.9% in areas that were not acquired from Verizon.
• Once customers leave, they rarely return.  Churn rate of Frontier customers coming and going is at just 1.6%.

As with similar Verizon landline sales in the past, initial revenue growth from acquired customers starts out high, boosting revenue numbers and often the value of a company’s stock.  But the heavy debt load incurred from acquisitions and ongoing line losses to the competition eventually take their toll, and Frontier’s revenue now reflects the reality of a company trying to sell more services to a declining number of customers.

Morningstar notes the company’s debt problems are significant:

Frontier has struggled to bring leverage down and hasn’t successfully placed new debt since closing the Verizon transaction in 2010. Management has talked about taking care of the $580 million maturity it faces in early 2013 for the better part of a year, with no result to date. Yields on the firm’s existing debt have increased over the past year, despite the sharp decline in Treasury rates.

Standard & Poor’s Ratings Services reduced its outlook on the company from stable to negative, noting the competition is increasingly hurting Frontier’s capability to raise revenue.

The company’s decision to slash its dividend in an effort to reduce debt has created consternation for some investors who stuck with the company when the share price was above $7 and the dividend was declared safe for two years.  Neither seems to the be case any longer.

CenturyLink runs specials on their website that offer extra savings when ordered online.

Your $50 monthly broadband bill has been burning a hole in your wallet and you think there should be a cheaper price available somewhere, right?

The answer is, for most of us, there is.  You just have to look.

The most expensive Internet access around comes when you buy broadband-only service from a provider.  Both cable and phone companies have been incrementally punishing their “broadband-only” customers for years, tacking on $5, $10, even $15 to the price because you have chosen not to bundle broadband with other services the company sells.  It is not unusual to see some cable companies charging $55-60 for standard Internet service.  When you call to inquire, they are sure to begin aggressively upselling you to a bundled service package, arguing you can add cable TV and phone service for $20-30 more a month.  That sounds like a better deal, unless you honestly don’t care about either service.

Welcome to the world of marketing, where the “value perception” is key to driving the average revenue collected from each subscriber higher and higher.  You end up buying services you probably would not have considered, but because they seem so inexpensive when compared with the price of the service you are interested in, why not?

Phone companies do the same thing, but many of them also love to bury hidden charges in the fine print and commit you to 1-3 years of service to guarantee the advertised price.  Companies like Frontier Communications may pitch DSL service for just $15 a month, but keep reading and you will discover the taxes and fees raise that price substantially.  In fact, that particular phone company is notorious for charging substantial modem rental fees and what they call a “High Speed Internet” surcharge.  To get the lowest price from them, you will be a Frontier customer for at least a year, depending on the promotional offer selected.

Frontier redefines "value": This attractive looking offer "fine prints" the $6.30 modem rental fee, is for service "up to" 1Mbps (so much for "high speed"), has a one-year service commitment with a $50 early termination fee, and does not include unspecified "taxes and surcharges" which run extra.

You can break free of the marketing circus by concentrating on finding the best possible deal for the service(s) you really care about.

1. Check advertising offers on television and in newspapers, but always read the fine print;
2. Visit the website of each local provider and look for “Internet-only” offers that may deliver extra savings, but only when you order online;
3. Call providers and ask them about their various deals and inquire “is this the best offer you have right now?;”
4. Use search engines and type in your provider’s name and words like “deals,” “offers,” or “promotion.”  Third party authorized resellers may have an offer that works better for you.

Sometimes you can get excellent results playing providers off each other.  Try contacting the social media representatives of different providers in your area to unlock hidden deals, and more importantly, customer retention offers.  One Rochester reader of ours got Time Warner Cable to open negotiations to keep his business with this tweet:

Getting ready to schedule my @TWCable disconnect after rate increase – should I go with @dishnetwork over @DirecTV or vice versa?

He received a substantial retention offer within hours of alerting Time Warner of his discontent (he’s also a rabid hockey fan, and the ongoing MSG-Time Warner Cable dispute made satellite an attractive alternative.)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KNXV Phoenix Which broadband provider saves you the most money 2-7-12.mp4[/flv]

KNXV in Phoenix helped residents in that Arizona city figure out who was cheaper, CenturyLink or Cox Cable.  And what about using mobile broadband for a home broadband replacement?  (3 minutes)

Broadband life in Frankford, Greenbrier County, W.V. may be slow, but few customers of Frontier Communications thought things could get even slower.  And then they did.

Stop the Cap! reader DJ has been frustrated with the performance of his phone company — Frontier, that took control of Verizon’s landline network across the state.  Verizon rarely got the hopes up for customers waiting more than a decade for broadband service to reach them.  Dana Waldo, Frontier’s senior vice president and general manager did, telling West Virginians Frontier would propel the Mountain State from its current rank of 47th in the country to the top 5.  Achieving that goal seems unlikely when the company quietly reduces some customers’ broadband speeds.

“We are on the High Speed Max plan which gives us, or should I say gave us 3.5Mbps,” DJ shares.  Although his phone line supported that speed, Frontier’s congested network could not, especially at night when speeds dropped dramatically.  It took several months for Frontier to upgrade local facilities in the county to better manage the broadband demands of customers who pay $110 a month for DSL and phone service.

Frontier representatives promised the Pocahontas Times further upgrades were on the way by February of 2011, DJ says. February came and went and promised speeds of 5Mbps never arrived and Frontier representatives told DJ they didn’t know a thing about a 5Mbps broadband plan.

Fast forward to last spring: Frontier’s website suddenly advertised speeds up to 12Mbps.

Frontier's Mysterious Upgrade List

“I first contacted them through their Twitter account and was told I could receive 8Mbps, went through all the processes and a few days later I was told I [already] had the maximum speed available for my area and nothing was ever done,” DJ writes.

The Phantom “Network Upgrades” List

More discouraging to DJ was the surprise appearance of a Network Upgrades listing on the company’s website that again promised better days for customers in states like West Virginia.

“The geniuses at Frontier listed us as Frankfort instead of Frankford but either way we were listed to get upgrades at the end of [this past] November,” DJ says. “The date came, the date passed. Never once did I see a Frontier truck out working. I still found myself [with] 3.5Mbps and after being lied to about upgrades for the third time in a few years I was ticked.”

Frontier representatives would later wonder where DJ obtained the Network Upgrades list, which has since disappeared from the company’s website.  Stop the Cap! has an archived copy here (PDF).

The worst part of DJ’s story came on Jan. 24, when Frontier reduced his speed from 3.5Mbps to 1.3Mbps without notice or explanation.  Frontier, the phone company that provides free speed decreases for customers, is not part of any marketing plan DJ knows about, so he began calling the company for answers.

“I was told my speed would be fixed when “upgrades” were complete,” DJ reports. Later that day, after a series of complaint calls, his old speed returned, leaving him right where he started in 2010.

“There is no excuse for that kind of treatment and it has been going on for years,” DJ says. “It’s a shame we can’t get anything else; Suddenlink literally stops serving just down the road with 10Mbps service — sad.”

[Updated 3/26 2:31pm ET:  Changed piece to reflect unincorporated Frankford is actually in Greenbrier County, not Pocahontas.]