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.

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“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.

Sen. Nelson

Idaho internet access is inadequate to support tele-learning services, hurting the state’s ability to move towards online education as a result of the COVID-19 pandemic.

State Sen. David Nelson (D-Boise) told his constituents that “now, more than ever, Idahoans need reliable broadband.”

At the moment, they are not getting it.

Nelson:

“The Moscow School District is providing instruction online for middle and high school students but about 20% of students don’t have strong enough Wi-Fi or can’t afford the internet access needed for classes at home. To make online learning available to all students, Moscow School District has turned school parking lots into Wi-Fi hot spots and is providing wireless hot spots to some students. In the Potlatch School District, they have distributed 300 laptops and Chromebooks, but 20% of kids don’t have internet access. Potlatch is also creating Wi-Fi hot spots for some families.

“In mountainous Benewah County, St. Maries School District has a harder job. Cell service is spotty and line-of-sight internet connections are hard to come by. More than 70% of St. Maries students and teachers do not have access to reliable internet. The school district found they must send home weekly packets because they cannot do online instruction. St. Maries teachers work in their classrooms daily because neither they nor their students have reliable internet for online teaching. Instead, the teachers spend their time creating the paper worksheets for families to pick up.

“St. Maries students only get packets, while other schools teach online. Does that live up to Idaho’s constitutional requirement of a general, uniform, and thorough system of public, free common schools? Idaho needs more investment in broadband infrastructure, but we aren’t going to be able to fix this in the midst of a crisis. According to Kamau Bobb Google, educators must address the needs of diverse learners. I wish we had been investing in broadband infrastructure instead of cutting taxes significantly when times were good.

“Our limited, unreliable broadband is often overtaxed. Internet that was already struggling to serve our communities is now unable to keep up with the unprecedented demand from educators, people working from home, families ordering groceries online, and nearly every other Idahoan using the web to stay connected. Even the time to clear a credit card payment at a grocery store has increased.”

Internet access in rural states like Idaho is mostly a mixture of cable internet in larger cities and towns and DSL service in suburban areas. Rural communities often have to rely on wireless internet, where available, or satellite internet access. A few communities have a co-op utility that doubles as a broadband provider, but in most cases rural Idaho only gets what CenturyLink, Frontier, and other telephone companies are willing to provide.

“Last year, the governor’s Broadband Task Force found that North Central Idaho has the least access to functional broadband in the state,” Nelson noted. “Since schools have closed due to coronavirus, North Idaho school districts are experiencing the consequences of Idaho’s lack of investment in broadband infrastructure.”

After years of trying to convince private telecom companies to do the right thing by their customers and expand internet access, Nelson points out the current COVID-19 crisis is a perfect example of why states like Idaho can no longer afford to wait.

“The coronavirus pandemic has made it more obvious than ever that reliable internet access is a public utility that all Idahoans need,” Nelson said.

Frontier Communications is selling its wireline and fiber assets in Idaho, Montana, Oregon and Washington in a $1.35 billion all-cash deal with two private investment firms.

Frontier will continue operating its FiOS and traditional landline networks in the four states until the transaction closes with regulator approval.

The buyers are WaveDivision Capital, a private investment firm run by the founder of Wave Broadband, an independent broadband provider serving the Pacific Northwest and Searchlight Capital Partners, a Wall Street investment firm seeking to “accelerate value creation” for its investors. The new owners plan to launch a new company to service existing Frontier customers and will honor existing contracts and service commitments.

“The sale of these properties reduces Frontier’s debt and strengthens liquidity,” said Dan McCarthy, Frontier’s president and CEO, in a statement. “We are pleased to have a buyer with extensive experience building and operating advanced fiber-based communications assets in these regions. We will be working very closely with the new owners to ensure a smooth, successful transition for our customers and the communities we serve.”

About 150,000 fiber, 150,000 copper and 35,000 fiber video customers are impacted by the sale in the four affected states. Frontier’s service area in the region is made up of large former Verizon service areas, many upgraded to fiber-to-the-home service, and a significant number of rural telephone exchanges operating with traditional copper wire networks. WaveDivision Capital claims it wants to invest in Frontier’s existing network to upgrade service and potentially retire additional copper infrastructure in favor of fiber.

Frontier service areas in Oregon, Washington, and Idaho.

“We are excited to transition these operations to a local ownership team and to invest in building out the network of next generation fiber throughout our region,” said Steve Weed, CEO of WaveDivision Capital, and founder and former CEO of Wave Broadband. “We are big believers in the Northwest’s future growth opportunities and that future runs on broadband. As the former leaders of another successful Northwest internet provider, Wave Broadband, we know what it takes to bring fiber and other advanced services to residential and business customers, give them choices, and keep them happy.”

Frontier, which has been struggling with a tremendous debt load and underinvestment in its network, sees the sale as a way to improve its balance sheet and cut both debt and expenses. The Pacific Northwest is a difficult region to serve because it is sparsely populated and can be a high cost area because of difficult terrain or long distances between customers. Although Frontier had committed to spending on upgrading its fiber customers, it promised little for its copper wireline customers still relying on low-speed DSL. Weed says his company hopes to change that.

“Our plan is to invest further in our markets, specifically by extending fiber to more homes and businesses, to bring them the high speeds they want,” Weed said in a statement.

Frontier’s Montana operations are in the northwest corner of the state, near the Kootenai National Forest.

The transaction is subject to regulatory approvals by the Federal Communications Commission, the U.S. Department of Justice, the Committee on Foreign Investment in the United States (CFIUS), applicable state regulatory agencies, and certain local video franchise authorities where Frontier FiOS operates. Frontier expects little opposition to the deal.

Weed’s involvement in Wave Broadband is no more, but at the time he left the company, Wave had reached 140 cities and towns in Washington, Oregon, and California. Wave was formed in 2003 with a series of strategic acquisitions of “distressed” independent cable systems and those owned by pre-bankruptcy Charter Communications, Northland Communications, and Cedar Communications. In May 2017, Wave Broadband was sold to TPG Capital for $2.36 billion, and today operates under TPG’s leadership with its close cousins RCN and Grande Communications.

Weed has a reputation for successfully deploying fiber networks in a region where capital can be difficult to find and easy returns on investment are rare, so there is considerable good will he will successfully upgrade Frontier service areas that have been neglected for years.

Although the transaction could deliver temporary fiscal relief for Frontier, shareholders remain displeased with the current leadership team at the company, and there are still significant signs Frontier remains in serious financial and operational distress, especially because of its ongoing customer losses. Frontier is likely to be pressured to find other sales opportunities, assuming it can find willing buyers.

Broadband… by Boss Hogg.

CenturyLink has given the state of Idaho until Sunday to come up with as much as $4.2 million or it will cut off Internet access to more than 200 Idaho public high schools, potentially leaving some without Internet access for the rest of the school year.

State officials in Boise warned school officials they are on their own if the statewide Idaho Education Network (IEN) goes dark on Sunday, leaving administrators scrambling for alternative Internet Service Providers in a state dominated by CenturyLink.

Senate President Pro Tem Brent Hill told nearly 200 Idaho public school trustees Monday that the state’s broadband project will go dark Feb. 22. Districts will need to carry out their own emergency plan immediately if they want broadband access for the rest of the school year.

“This is terrible. We apologize,” said Senate president pro tem Brent Hill, speaking to nearly 200 public school trustees on Monday.

“You need to have a plan in case Internet is shut off on Sunday,” added Will Goodman, technology chief for the state Department of Education. “You need to be prepared if that plan goes into place for the rest of the school year.”

Syringa Networks sued Idaho in late 2009, arguing the state illegally blocked it from the $60 million broadband contract to favor the politically connected Education Networks of America and CenturyLink. Gov. C.L. “Butch” Otter’s administration made certain the request for bids was tailored towards the ultimate winners — close friends of Otter and Idaho’s political class. The cronyism did not extend into the courtroom, however, and after several years of legal back and forth, a judge affirmed what many suspected: the contract was illegal and declared void.

State law prohibits using taxpayer dollars to pay for illegal contracts, and CenturyLink has kept the network running without payment in hopes their friends in the state legislature will bail IEN out. But after months of inaction, CenturyLink announced that without immediate payment, it will cut off the network this weekend.

The prospect of hundreds of high schools losing all Internet connectivity led to seething editorials in some state newspapers.

“Students were faux poster-children on what turned out to be just another example of putting the well-connected on the public dole, while simultaneously lauding the result,” wrote the editors of the Twin Falls Times-Union. “Contracting is broken in Idaho. Corruption is too easily accepted as day-to-day business.”

The newspaper advocates writing off IEN and starting over by giving control of broadband connectivity back to local communities across Idaho, where corruption does not predominate:

The IEN is a pile of rubble. It can’t be salvaged. Only a total rebuild will suffice.

Tell the districts that rely on IEN to go find a provider. Take that $4 million sitting in the bank, targeted for the providers, and start a reimbursement fund for schools. Let local officials run it. The courts will figure out what the providers are owed for the past service. Idaho has failed and, with its culture of corruption, can’t be trusted.

As of this afternoon, it seems the state legislature is preparing to force taxpayers to cover the costs of schools switching to alternative providers. Idaho officials have approved a nearly $3.6 million stopgap measure to maintain broadband connectivity for the rest of the school year by using other providers, assuming they can be found.

[flv]http://www.phillipdampier.com/video/KTVB Boise Idaho lawmakers approve 3-6M for broadband access 2-17-15.flv[/flv]

KTVB in Boise reports Idaho taxpayers will be on the hook to cover public school Internet costs after CenturyLink pulls the plug on a statewide educational broadband network this weekend. (2:28)

CenturyLink’s philosophy about offering gigabit fiber broadband speeds in Idaho can be summed up simply as “for business-use only.”

Jim Schmit, Idaho CenturyLink’s vice president and general manager, believes super fast broadband connections are overkill for homes and most businesses in the state.

“It’s like having a fancy sports car,” Schmit told the Idaho Statesman. “It might go 200 miles per hour, but what good does that do if the speed limit is 60?”

Schmitt’s attitude of broadband a-plenty is nothing new. In 2007, he told attendees of the Emerging Directions in Economic Development conference in Boise that “virtually all” Idahoans already had access to high-speed broadband. That was news to the audience, with about a quarter of the economic development professionals attending stating they represented a community that didn’t have it yet. Most of the questions related to how their communities could get the access they’d been told wasn’t available.

Seven years later, the Statesman reports more than a few homes and businesses in the region still rely on slow DSL, satellite and even dial-up access because faster options are just not available.

Idaho could find itself a bystander in the growing movement to deploy gigabit fiber to the premise broadband, despite the fact CenturyLink already has fiber infrastructure available nearby.

“We’re getting to the point where, for businesses in most places, we’re within last-mile connections for most locations,” Schmit says.

CenturyLink is willing to extend its fiber, but only if that fiber line reaches businesses needing gigabit speeds. Residential customers need not apply.

Fiber optics can be found in several office buildings in downtown Boise, which has been good news for established tech companies that need more bandwidth. Three data centers are operational in the city and would likely not be there without fiber.

But for home-based entrepreneurs of future Internet startups, most will be forced to choose between CenturyLink DSL or cable broadband from providers like Cable ONE, which offer slower speeds.

Smaller broadband providers have begun to fill the gap left open by the lack of interest from cable and phone companies. While Google is showing interest in building fiber networks in a handful of U.S. cities, many more communities are realizing they will not get gigabit speeds anytime soon unless they build a publicly owned broadband network themselves or rely on much smaller-scale projects under development in the private sector.

Patrick Lawless, founder and CEO of Boise voice recognition software developer Voxbright Technologies Inc., sees opportunity providing a limited fiber network in Boise. Lawless has plans to build a 2.6-mile fiber-optic loop and deliver television, phone and broadband service to apartment and office buildings in a manner similar to Google’s. It’s a small early effort, limited to a handful of businesses and new residential buildings — mostly apartments and renovated former office buildings or hotels. He plans to charge $99 a month for a package including television, 100Mbps broadband, and phone service.

With the project’s small scope and uncertain cost, CenturyLink says it isn’t too worried about the competition. For now they will continue to bank on offering only the broadband speed they believe customers actually need, and it will be up to a competitor to prove them wrong.