Frontier's Maggie Wilderotter escapes reality

Frontier Communications CEO Maggie Wilderotter has bought a first class ticket to Fiber Fantasy Island, where phone companies dream of delivering fiber-optic broadband service without actually deploying fiber.  They just tell you they did.

In an interview published today in The Oregonian, Wilderotter tries to convince residents Frontier’s arrival is good news, making promises about broadband and service improvements based on a company track record an independent observer would conclude she simply made up.

If Wilderotter’s command of the facts about her own company are reflective of “a distinct, improved image in its new territories,” Oregon is in big trouble.

Let’s review:

CLAIM: “We deploy fiber to the home all across the country. We don’t call it FiOS. We call it high-speed Internet. For our customers, the technology doesn’t matter. What matters is access, speed and capacity.”

REALITY CHECK: Frontier, as far as we have been able to determine, has not deployed fiber to the home anywhere in the country, with the exception of the FiOS network it acquired from Verizon.  Frontier Communications’ deployment of fiber optics to the home is comparable to the amount of fiber found in a box of Cookie Crisp cereal.  In their largest market, Rochester, N.Y., Frontier relies on the same legacy copper wire phone network it utilizes everywhere else.  It is highly misleading for Wilderotter to represent otherwise.  Fiber to the home means exactly that — fiber optic cable brought right to the home.  This is not a case of “you call it corn, we call it maize.”

This kitten is not an iguana.

Fiber optic cable is not also known as “high-speed Internet,” just as the cute kitten on the left is not called an iguana.  For the significant number of customers who ask Frontier to disconnect their service year-after-year, technology matters very much, and this particular phone company lacks it.  Frontier relies on the same DSL technology other phone companies and customers increasingly consider yesterday’s news.

In many Frontier service areas, there is no access to broadband because line quality will not support the service.  In Brighton, N.Y., a suburb of Rochester less than a minute from the Rochester city line, Frontier could only manage to deliver 3.1Mbps DSL speeds, and until recently Frontier was crying it needed a 5GB usage allowance because of the threat higher amounts of consumption might have on its network capacity.  Access, speed, and capacity does matter, which is why Time Warner Cable is picking up the bulk of its new broadband subscribers at Frontier’s expense.

CLAIM: “For high-speed, it means having speed and capacity in addition to reach. We’ll do add-on services. We have a terrific Yahoo-Frontier portal that will be a gateway on our high-speed Internet service. We are in the throes of putting together Wi-Fi hotspots that will be distributed throughout this market for customers.  If you’re a high-speed Internet customer of ours it’s free. We’re looking to put one at Hillsboro Stadium. Typically, we put them in hotels, convention centers, truck stops, trailer parks, outside parks, campuses for colleges, shopping centers, business campuses.”

REALITY CHECK:  Those “add-on services,” such as Frontier’s Peace of Mind, come with a price tag and are often required components of a bundled service discount offer.  As first impressions go, a company still relying on Yahoo! for a front end is not exactly on the cutting edge, nor are “portals.”  It’s like trying to impress new customers with free web space through GeoCities.  Actually, that is something Frontier could offer because GeoCities is now owned by Yahoo!

Frontier’s Peace of Mind Services

• Hard Drive Backup: $4.99 per month
• Hard Drive Backup + Unlimited Technical Support: $9.99 per month
• Hard Drive Backup + Unlimited Technical Support + Inside Wire Maintenance: $12.99 per month
• $50 early cancellation penalty if you get these services with a term commitment

Rochester’s experience with Frontier Wi-Fi has not been very impressive.  Most residents don’t even know the service exists.  The city and several suburbs offer limited Frontier pay-walled Wi-Fi service and a handful of free access hotspots in cooperation with Monroe County.  Unfortunately, many of the fee-based and free hotspots have fallen into disrepair and no longer function.  Signal strength is not impressive either, and many were not usable indoors.  We tested several of the free hotspots and discovered one only delivered a signal into a suburban parking lot, another only into an empty soccer field, and the third was not functioning at all.  Frontier’s record in Wi-Fi delivered more promises than actual service.

Those Wi-Fi services, by the way, are not free for all Frontier broadband customers.  Evidently Ms. Wilderotter is not acquainted with her own company’s products and services, nor Frontier’s own website:

So much for Wilderotter's claim Frontier's Wi-Fi network was free for all Frontier broadband customers.

CLAIM: “We deliver the highest value for the price you pay. We also have excellent customer service. We also don’t raise our rates every 12 months, no matter what.”

REALITY CHECK:  In Rochester, the out-the-door price Frontier charges its broadband customers is actually higher than that charged by Time Warner Cable, which delivers far faster connections.  In West Virginia, the state’s Consumer Advocate put together a chart depicting Frontier’s broadband prices.  Determine for yourself if it delivers the “highest value for the price you pay.”

Comparing Prices: Frontier's pricing doesn't look as exciting as Wilderotter would have you believe, as the West Virginia Consumer Advocate discovered

CLAIM: “If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years.”

REALITY CHECK: We looked and found Frontier demanding the right to increase basic service rates in New York by $2 a month each year for up to two years.  In fact, last November, the New York State Public Service Commission, at the request of Frontier, sent the company a letter authorizing a rate hike of $2 a month for customers in the state.  Even more enlightening was Frontier’s filing in August 2005 with the PSC demanding near-complete deregulation and rate relief allowing Frontier to raise rates up to $1 per month annually indefinitely for basic service.  Frontier also wanted consumer protection rules “relaxed” and ban the PSC from investigating consumer complaints.  One of the reasons they cited is that basic phone service is not the same critical service it used to be because people can communicate through blogs instead.

In fact, consumers should be asking why Frontier’s rates haven’t decreased.  From that same filing: “Frontier believes that with the decreasing costs and increasing bandwidths of new technologies and the acceleration of intermodal market entry, the market will cause rates for non-basic services in all parts of the State to decline.”

CLAIM: Local regulators tell me they did see a spike in billing complaints after Verizon took over. Any thoughts on why? — “Whenever there’s a change — you change the name on the bill, you change the format — customers tend to look at it more closely. We always expect a spike in billing calls whenever we’ve done acquisitions. It has already (settled out).”

REALITY CHECK: As Stop the Cap! has reported, Frontier’s takeover in West Virginia has hardly “settled out.”  Service interruptions, forgotten service calls, and other problems have plagued the state to the point the PSC needed new hearings to review the situation.  Many of Frontier’s billing complaints come from customers choosing to cancel Frontier service, only to find unjustified early termination fees added to their final bills, even when customers never agreed to a term contract.  That problem was so serious in New York, the state Attorney General fined the company and ordered customer refunds.  Changing a customer’s bill by adding $100 or more to the total amount due will always get a customer to look at the bill more closely.

CLAIM: “One of the big opportunities that we’re working on is the ability to display Internet content and video on the television set.”

REALITY CHECK: That “big opportunity” has been available to broadband users for several years now.

CLAIM: We also have a new site that’s called myfitv.com. We carry over 100,000 titles of free television content on this site. It’s a little bit like Hulu on steroids. It’s provided free of charge to all our customers.

REALITY CHECK: MyFitv is not “a little bit like Hulu on steroids.”  In fact, it is Hulu.  Frontier simply used Hulu’s “embed” feature to take content, slap the Frontier logo on it, and add Google ads in an attempt to rake in a few extra dollars.  You can do exactly the same thing yourself.  Meanwhile, the service is added to customer bills showing an amount of $0.00, a very inexpensive way to try and impress customers with content Frontier never developed, deployed, or created — just like their phantom fiber to the home network.

CLAIM: “We think over time the Internet will also provide different packaging, different prices, different ways to buy content than the traditional viewing platform. We also think that mobility is important. We want to make sure that whatever you do you’ll be able to take it with you.  The Sling technology is interesting, too. It’s something we’re talking about DISH Network with.”

REALITY CHECK: Every time Maggie has talked about “different packaging and prices,” it has been in the context of an Internet Overcharging scheme — limited usage allowances, extremely high rate increases for those deemed to have consumed too much, etc.  And yes, Sling technology is interesting.  A company conceived of the idea, built it, developed a marketing plan, and sold it.  That’s a concept Frontier needs to understand.  You cannot transform a legacy network with words alone.  Here’s an idea.  How about conceiving of a real fiber-to-the-home network, build one, develop a marketing plan, and then sell it.  For those in markets like Rochester, it’s the only way Frontier Communications will avoid becoming the horse and buggy carriage maker of the 21st century.

CLAIM: You’re around Seattle, around Portland, but not in them yet. Is there any possibility that Frontier would build into another company’s market? — “There’s always a possibility. It’s not a priority for us. And the reason why it’s not a priority is we’ve got a lot to do, just in the service areas that we own today. When I’m humming on all cylinders there, and I’ve been able to do everything I possibly can in those areas, then I might look to extend service areas out.”

REALITY CHECK: Translation — “when pigs fly.”  Frontier would be laughed out of the Seattle and Portland markets.

Ms. Wilderotter needs to be a lot more open and forthcoming with the press.  Frontier’s business plan makes it clear the company’s future is serving uncompetitive rural markets that will be forced to tolerate the products and pricing Frontier delivers.  Where competition exists, let’s face facts.  Frontier is not gaining market share — it is losing it, eroded away year after year by uncompetitive, substandard products at high prices.

That’s a reality you are bound to miss if you spend too much time with Mr. Rourke and Tattoo.

Advertisements for Road Runner Extreme, Time Warner Cable’s DOCSIS 3 “wideband” service, began running in Rochester, N.Y., this week despite the fact Time Warner Cable has no intention of providing the service in the area anytime soon.

The ad offers Road Runner subscribers the chance to obtain 30/5 Mbps service “for just $20 more per month” and invites viewers to “call now to order.”

So that’s what we did.

Time Warner Cable representatives in Buffalo confirmed the service is not available in Rochester, but figured if they were advertising it here it must be coming soon.  Even they were surprised with the answer they got ‘from upstairs’ when inquiring further.

“No, it’s not coming to Rochester anytime soon,” we were told.

We asked if there was any timetable to bring DOCSIS 3 upgrades to the area.  The response was both illuminating and candid:

“I wouldn’t hold your breath.  We’ve had some issues in the Rochester area and, for now, we feel comfortable offering the service only in the Buffalo area in western New York.”

When we asked why the company was now heavily advertising a product on Rochester TV screens that isn’t available here, we were told Time Warner Cable was increasingly consolidating its operations in western New York through its Buffalo office, which is where “most customer service” and “local advertising you see on cable channels” is now originating.  Since Road Runner Extreme is available in Buffalo, Rochester viewers are accidental witnesses to a service intended for residents of The City of Good Neighbors.

So what are “the issues” in the Rochester area?

Time Warner Cable bypassed Rochester for promised upgrades after the defeat of their proposed Internet Overcharging plan, which would have tripled broadband prices for an equivalent level of service.  Consumer outrage and political headaches combined to kill the experiment.

Meanwhile, Time Warner Cable isn’t compelled to hurry DOCSIS 3 into an area underserved by Frontier Communication’s slow speed DSL service.  Neighboring communities in Buffalo and Syracuse have access to Verizon’s fiber-to-the-home service FiOS, which has driven Time Warner to enhance services in both communities to avoid losing customers.

Despite the slow pace of upgrades, Time Warner Cable previously stated it intended to upgrade a significant number of its cable systems to DOCSIS 3 technology by the end of the year.  So it will eventually reach the area.  As Time Warner Cable recommends… just don’t hold your breath.

[flv width=”490″ height=”380″]http://www.phillipdampier.com/video/Time Warner Cable at the NYS Fair.flv[/flv]

The closest residents of the Flower City will get to Road Runner Extreme is at the New York State Fair in Syracuse, at the Time Warner Cable booth.  (Their advertised ‘celebrity’ is Mike O’Malley.  Who???)  (1 minute)

Kent

Suddenlink president and CEO Jerry Kent sends word that the days of cable companies spending capital on system upgrades are basically over.

Interviewed on CNBC, Kent was responding to concerns about the cable industry’s long history of leveraged buyouts — amassing enormous debt to launch buyouts of small and medium sized cable companies as the march towards industry consolidation continues.

Kent’s own cable system — Suddenlink, was built partly on purchased cable systems from Cox and Charter Cable.  In the changing economy, Wall Street now wants to see cable companies with plenty of free cash flow on hand as part of their balance sheets, not just potential revenue growth through increased numbers of households made possible through debt-ridden acquisitions.

Kent sees Suddenlink, and many other cable operators, performing better as they transition away from making investments in system upgrades to accommodate demand.

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Kent told CNBC Suddenlink had the fastest residential Internet service in the country — 107Mbps. (EPB in Chattanooga claims it offers 150Mbps residential service, although we don’t see much about it beyond a June press release on their website.)  Suddenlink’s speeds are one-way only, however.  The upstream speed for that tier of service is considerably slower — 5Mbps.  EPB offers the same upstream and downstream speeds.

Kent appeared on CNBC to discuss the “threat” to cable television company business models by online video.  Kent believes Suddenlink, and the cable industry more generally, is positioned to protect cable-TV profits with the TV Everywhere concept — offer online video of cable programming, but only to authenticated, current cable subscribers.  Those without cable subscriptions can’t watch.

Financial reports submitted by many of the nation’s cable operators confirm Kent’s claim that capital spending is being reduced.  Even among cable systems that claim they need to enact usage caps and other Internet Overcharging schemes to “invest in broadband upgrades,” the financial reports don’t lie — they are not using increased revenue for system upgrades.  They are instead retaining the revenue as free cash – available for other purposes, paying down debt, or returning it to shareholders through dividend payouts.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

CNBC interviewed Suddenlink CEO Jerry Kent on how the cable industry intends to cope with invasive online video, threatening to erode cable-TV profits.  (8 minutes)

Pacific Fibre's planned undersea fiber optic cable set to begin service in 2013. (click to enlarge)

Australia and New Zealand remain the two countries most notorious for Internet Overcharging schemes like usage caps and speed throttles.  The lack of international broadband capacity is routinely blamed for limiting broadband usage for consumers in both southern Pacific countries, and now a major undersea fiber optic cable project seeks to end those Internet Overcharging schemes once and for all.

Pacific Fibre hates usage caps.  The company, which is one of the partners in a planned 5.12 terabits per second undersea cable connecting the United States with New Zealand and Australia, believes limiting broadband consumption is bad for business — theirs and the digital economies of both nations.  Now the company is reportedly willing to put its money where its mouth is, charging broadband providers a flat rate per customer for unlimited access to its backbone network.

The company believes such pricing will force providers into selling more generous, often unlimited broadband service packages for businesses and consumers.  Providers have routinely blamed insufficient international capacity for restrictive data caps.  But increasing capacity, including Pacific Fibre’s new cable set to begin service in 2013, removes that excuse once and for all.

Co-founder Rod Drury believes there will be so much capacity, if providers continue to engage in Internet Overcharging schemes, most of the newly available bandwidth could actually go unsold.

“Why don’t we flip the model around and go to a per-person charging model and then try to give internet providers as much bandwidth as we possibly can for that?,” Drury told BusinessDay.  “The charges could be segmented by customer type; you could do it for mobile connections, home connections, schools, hospitals and businesses, and set a reasonable price.”

[flv]http://www.phillipdampier.com/video/CNBC Interview With Pacnet CEO June-July 2010.flv[/flv]

CNBC talked with Pacnet CEO Bill Barney, one of the partners in the Pacific Fibre project, about bandwidth needs in Asia and how new undersea fiber cables will meet the growing demands.  (Segment one of the interview was done in June, segment two in July.)  (10 minutes)

Telecommunications Users Association chief executive Ernie Newman said Drury’s idea was long overdue. “The way the world is moving is towards all-you-can-eat-type plans and any move like that has got to be the way of the future.”

But one of Pacific Fibre’s competitors, Southern Cross, which currently provides undersea fiber connections for South Pacific Internet Service Providers, said he wasn’t sure Drury’s idea would work.

Southern Cross marketing director Ross Pfeffer said broadband providers haven’t been justified limiting broadband usage for some time, as newly available capacity has already helped ease the bandwidth crunch.  Instead, critics contend existing providers don’t want to give up the massive profits they are earning limiting usage, maximizing revenue from users who think twice before using high bandwidth services, thus reducing required investments in network upgrades.

“New Zealand internet providers [are] using data caps to segment the retail market and maximize their own revenues,” Pfeffer noted.

Both Australia and New Zealand are embarked on National Broadband Plans to take back some control of their broadband futures from private providers many accuse of monopolizing an increasingly important part of both countries’ digital economies.

Drury’s project, and others like it, may become important components of newly constructed national fiber-to-the-home projects proposed in Australia, and dramatically improved service in New Zealand.

[flv width=”480″ height=”292″]http://www.phillipdampier.com/video/Underwater cable laying 1936.flv[/flv]

The history of deploying underseas cables is a fascinating one.  Check out this 1936 documentary showing how AT&T made undersea phone cables to connect the San Francisco Bay area.  Back then, companies didn’t use rubber or plastic cable jackets to keep the water out.  They used jute fiber and paper!  Some other companies used gutta percha, which is today best known for root canal fillings, or tar mixtures.  (5 minutes)

[flv width=”484″ height=”292″]http://www.phillipdampier.com/video/BBC Cable Under the Sea.flv[/flv]

Before there was telephone service, the challenges of connecting the far flung components of the British Empire were met by underseas telegraph cables beginning in the 1870s.  A fascinating BBC documentary visited Porthcurno, located at the tip of Cornwall, England, where 14 undersea telegraph cables stretched from a single beach to points all around the globe. Then something called “wireless” arrived and threatened to ruin everything.  (8 minutes)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Fiber Optic Cable.flv[/flv]

But what exactly is “fiber optic cable” and how is it made?  More importantly, how do they store thousands of miles of fiber optic cable on a single ship, ready to drop to the bottom of the ocean?  The answers to both are here.  (12 minutes)

Wendy

Pro-broadband reform groups continue to hit the telecommunications industry’s last nerve.  While the fight for more expansive broadband and Net Neutrality continues, some providers and their water-carrying friends are pulling out all the stops to keep broadband under the firm grasp of a phone and cable duopoly.  Both will say or do just about anything along the way to stop consumer-friendly reform.

Say hello to Mike Wendy.  He’s made it his personal mission to “expose” groups promoting broadband reform as “radicals” and “hardcore entrenched lobbyists.”  Using rhetoric that will resonate with angry talk radio listeners, Wendy is convinced broadband policies that enforce the public interest and Net Neutrality are akin to a Marxist takeover.  While Wendy calls on good Americans like himself to man the barricades protecting AT&T, Verizon, Comcast, and Time Warner Cable, he just doesn’t have time to mention he happens to work for a special interest group funded by Big Telecom.  Maybe it slipped his mind?

Wendy’s ironically named “Media Freedom” blog is chock full of attacks on “Free Press and the radical media reformistas [sic].”  Special guest stars include Venezuela’s Hugo Chavez, Marxism, collectivism, and a whole slew of rhetoric that ultimately tells readers efforts to enact broadband reform are little more than a grand socialist conspiracy.

A real grassroots campaign is run for and by consumers. An astroturf campaign is bought and paid for by corporate interests to push their own agenda.

His visitors’ enthusiasm for such accusations might be diminished a tad had Wendy prominently disclosed his day job: Vice President of Press & External Affairs at the Progress & Freedom Foundation, a “think tank” that ingests money from Big Telecom and then spews forth their talking points.  Among the backers: AT&T, Comcast, the National Cable and Telecommunications Association, Time Warner Cable and Verizon.

That takes the wind out of the proclamation that Media Freedom is a bulwark against those who “threaten to quash speech and economic freedoms.”  Wendy isn’t working for Big Government.  He’s working for the interests of AT&T and Comcast.

Many of the companies supporting the Progress & Freedom Foundation have a vested interest in maintaining today’s barely-competitive broadband marketplace, avoid oversight, and stop reform regulation and legislation dead in its tracks.  They want Progress only on their terms and the Freedom to do whatever they please.

The real chutzpah moment came when Wendy claimed pro-consumer groups like Free Press and Public Knowledge were the ones running high-powered lobbying campaigns.  That’s a pot to kettle moment to behold, especially considering who paid to print Wendy’s business cards.  From a recent blog post:

The “public interest” lobby makes itself out to be the tireless, country-poor underdog for the downtrodden consumer.  But don’t be fooled.  In the technology space, three such groups – Public Knowledge, Media Access Project and Free Press – have few rivals.  Their humble appearance belies their take-no-prisoners, oftentimes shameless, below-the-belt approach to public policy formation and gamesmanship.  How do they do it?  They use all the tools, and then some, to make them every bit as sophisticated as the largest companies they’re trying to undermine.

Shameless and “below-the-belt” might better define Wendy’s last job: “Director of Grassroots” for the United States Telecom Association, a job title that literally defines astroturf-in-action. Who is on the board of USTA?  Among others, corporate executives and lobbyists for AT&T, Verizon, Qwest, and two members who shouldn’t be able to afford the annual dues considering their employers went bankrupt — Hawaiian Telcom and FairPoint Communications.

Wendy’s line of thinking is evident soon enough from his blog’s tag cloud, a regular cocktail of conspiracy:

The ironically named "Media Freedom" blog isn't media and its freedom is limited to carrying water for the nation's largest telecom companies.

• Al Franken (the broadband industry’s ‘Boogie Man’)
• Cyber-Collectivist (the secret link between broadband and Jean-Jacques Rousseau)
• Fairness Doctrine (guaranteed to perk up the ears of any conservative talk radio fan wandering through)
• First Amendment (for corporations)
• Freedom (for said corporations to abuse your wallet)
• Free Speech (for corporations)
• Hugo Chavez (the go-to-guy for lazy smear-by-association rhetoric)
• Marxist (chalkboard time)
• New Deal (broadband users sure want one)
• … and redistributionism (something overheard at the last session of the “Communications Comintern?”)

The rhetoric is two parts AT&T to one part 1970s Radio Tirana, Albania.  A Glenn Beck swizzle stick labeled “Marxism” is included to stir the overheated rhetoric into a hot mess for Verizon and the cable lobby.

All of the “isms” aside, we’ve created a convenient, handy-dandy chart you can use to see which team Wendy and his group really supports:

Distinctions With a Difference – A Telecommunications Issue Checklist