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CenturyLink Considering Dumping Its Consumer Landline/Broadband Services

CenturyLink is considering getting out of the consumer landline and broadband business and instead focusing on its profitable corporate-targeted enterprise and wholesale businesses.

CenturyLink CEO Jeff Storey told investors on a quarterly conference call that the phone company had hired advisors that will conduct a strategic review of all CenturyLink products and services targeting the consumer market and is “very open” to the possibility to selling or spinning off its residential business, assuming it can find an interested buyer.

“Let me be clear, we’re early in what I expect to be a lengthy and complex process,” Storey told investors, noting the company’s first priority is to take care of its shareholders. “During our review, we will not modify our normal operations or our investment patterns. I can’t predict the outcome or the timing of this work or if any transactions will come from it at all. Our focus, though, is value maximization for shareholders. If there are better paths to create more value with these assets, we will pursue them.”

CenturyLink’s landline network is similar to those of other independent telephone companies. There are significant markets where extensive upgrades have introduced fiber broadband service and high-speed DSL, but most of CenturyLink’s network remains reliant on copper wire infrastructure that is not capable of supplying high speed internet to customers.

Like most large independent telephone companies, the majority of CenturyLink’s residential customers can only purchase slow speed DSL service offering less than 20 Mbps. A growing number of customers have canceled service after running out of patience waiting for upgrades. CenturyLink executives told investors last week the company is abandoning investments in bonded or vectored DSL upgrades, claiming anything other than fiber optics is not “competitive infrastructure.”

CenturyLink also admitted it is losing customers after deciding to shelve its unprofitable, competing Prism TV product. The only growth on the consumer side of CenturyLink is coming from significant broadband upgrades.

“In the first quarter, we saw a net loss of 6,000 total broadband subscribers. This quarter’s total was made up of declines of 83,000 in speeds below 20 Mbps and growth of 77,000 in speeds of 20 Mbps and above,” reported CenturyLink chief financial officer Neel Dev. “Within those gains, we added 47,000 in speeds of 100 Mbps and above. Voice revenue declined 12% this quarter. Going forward, we expect similar declines in voice revenue. As a reminder, the decline in other revenue was driven by our decision to de-emphasize our linear video product.”

Dev reported that 55% of CenturyLink’s customers have access to speeds of 20 Mbps or less, and the company has ceased spending marketing dollars advertising slow speed DSL. Instead, it “microtargets” service areas where customers can sign up for service faster than 20 Mbps.

Observers note CenturyLink’s interest in its landline business has been waning for some time. The change in attitude can be traced back to CenturyLink’s merger with Level 3, a very profitable provider of connectivity to the enterprise and wholesale markets. CenturyLink’s commercial services are consistently earning most of the revenue the company reports to shareholders every quarter, with residential services declining in importance.

A sale of CenturyLink’s local landline and consumer-focused internet businesses could be hampered because of the likely lack of buyers. Frontier Communications had been an aggressive player in acquiring landline networks cast off by Verizon and AT&T, but that company is now in financial trouble and faces major debt issues. It would be an unlikely bidder. Windstream is still in bankruptcy reorganization and an acquisition is out of the question. Smaller independent phone companies like Consolidated Communications (owner of former FairPoint Communications), also likely lack financing to achieve such a deal, especially as interest rates continue to rise. CenturyLink also has the option of spinning off its residential business into a new corporate entity, but would likely result in a financially hobbled enterprise that may have trouble attracting capital to continue funding further expansion.

Minnesota Regulators: Frontier is a Shoddy, Criminally Rogue Phone Company

(Image courtesy: Minnesota Public Radio)

Minnesota regulators slammed the performance of Frontier Communications in a highly critical 133-page report released Friday, describing a rogue phone company that appears to have knowingly violated at least 35 state laws and operating rules, while jeopardizing the lives and wellbeing of 100,000 Frontier customers in parts of northeastern and southern Minnesota and the Twin Cities metro area.

“Many of the issues reported by consumers show direct violations of Minnesota law and Commission rules, and indicate broad, systemic problems with Frontier’s service quality, recordkeeping and business operations,” the report concluded.

A year-long investigation by the Minnesota Commerce Department found ample evidence of Frontier’s terrible customer service, fraudulent billing, and its rapidly deteriorating and often decrepit landline network, sometimes left in disrepair for months or years with little regard for the safety of customers, workers, or the public.

As part of the investigation, seven public hearings were held last fall in Frontier’s Minnesota service area. The resulting report is based on more than 1,000 consumer complaints and statements, as well as Frontier’s responses to information requests by the Commerce Department.

In many cases, Frontier left health-compromised customers using landline-based health/safety monitoring services without phone service for over a month, putting cost-saving measures ahead of the safety of customers that need reliable phone service the most. The investigation also found “that orders for new telephone or internet access service, being a new source of revenue for Frontier, and a sales commission for the customer service representative, take priority over repairs of internet or phone.”

The report also blasted Frontier’s shoddy customer service department, described as “shocking” in the report. In dozens of complaints, customers reported correcting service problems was often a nightmare.

Decrepit Network Facilities Falling Off Poles and Drowned in Ditches

Frontier wireline pedestal in Kelsey, Minn., knocked over and submersed in ice water. (Image courtesy of: Mr. and Ms. Ulshafer)

Waterville, Minn. residents that have experienced frequent outages for years were given every excuse in the book by Frontier officials, at one point blaming a mouse in a central office for chewing through their phone lines. Frontier customer Harry Tolzman chronicled years of Frontier’s apparent ineptness in providing reliable phone and internet service to his rural part of Minnesota. His testimony to Minnesota regulators, reproduced in part below, explains a lot of what the report found wrong at Frontier Communications these days:

“[One day, Frontier] decided that they needed to rebury the telephone cable that was — that ran from Elysian to our rural route Waterville, so they contract[ed] with an outfit out of Indiana, Direct Line Communications Underground Burying, who in turn sublets to another company called Premier Underground. So one day these guys show up from Indiana and they needed to bore underneath State Highway 60 to get the cable from across the highway to our residence, which was on the north side of the highway. So they came out and they bored underneath the highway and they ran the cable and then they got into a big argument with the local technician as to where the cable was to run and so they got mad and left.

The next day another outfit, same, Premier Underground out of Indiana, shows up, and they were supposed to connect the cable from the highway down to the closest junction box, which is about 100 yards from my place to the road and it’s another 100 yards from the road to the nearest junction box. So they started in with their plow and they plowed up to the house and they hit some tree trunks and the plow would jump out of the ground.

Finally they got up to the house where I had decorative rock and they say, well, we can’t dig here so we’ll just lay it on top of the rock. And then wherever it jumped out of the ground because of a root, it’s buried about one inch below the ground, in other places it’s 8 or 10 inches, where it should be. So anyhow, they said that’s the best we can do. Then they went across the road to make the connection to the nearest junction box, and they went right down the shoulder of the road about three feet off the blacktop and they were going down the road with their plow. And lo and behold, the state highway department drove by and happened to see them going right down the shoulder of the road. And so they questioned them, and lo and behold they didn’t have a permit to bury this cable.

So the next day a guy shows up and he hooks up his pickup to the cable and he pulls it all out. And the local technician comes out and he lays a temporary line on top of the ground over to where they had plowed underneath the road, and he made the connection so we could get our telephone service back. And they said they would be back to re-bury it in the proper right-of-way position as soon as they had the proper permits. That was two and a half years ago. And this cable is laying in the road ditch, and meanwhile the state highway department came along and they mowed the road ditch and they cut the cable. So they replaced the cable again. And then another time a snowmobile took the cable out. So that cable still lies there strung between the sumac bushes so that they can’t mow it when they mow the road ditch.

And I keep calling these people to get this fixed and they keep telling me, well, they don’t have the permit yet. So I called the highway department in Mankato and they say there’s been no application for a permit to re-bury your cable. In the interim, I had opened up a complaint with the Federal Communications Commission, which is located in Washington, D.C., and they in turn responded to me. And Frontier had the gall to tell them that they had investigated the above statements and offered the following resolution. Upon the investigation, Frontier showed that the line was repaired as of August 11, 2017, Frontier will be burying the line on August 31, 2017. Frontier spoke with Mr. Tolzman and advised him of the above information. They had the gall to tell them it was fixed and that same problem is still there, the cable lies between the bushes. So whenever we have moisture or rain, we’ll be out of service for our landline phone. And it’s just very frustrating to have to call and get a customer service rep many states away that runs his routine check and tells you, well, the problem is not on their end, it’s in your house, and yet it’s never been a problem within the house.”

A Frontier installer draped a new line across this customer’s residential propane tank, and then left. (Image courtesy: (Image courtesy: Mark Steil, MPR News)

As Stop the Cap! reported in 2018, Frontier’s network infrastructure in Minnesota was literally falling off utility poles. Customers reported Frontier technicians used trees as makeshift utility poles, strung phone cables across yards and fields, unburied, and in one case, draped a phone cable over the customer’s propane tank. Despite months or years of complaints, Frontier repeatedly failed to repair infrastructure it knew or should have known was in disrepair, and in several documented cases, Frontier technicians dealt with the loudest complaining customers by swapping line pairs with a satisfied customer, silencing the complaining customer while giving their troublesome or failing line to another customer without their knowledge.

Company officials also lobbied Minnesota officials hard over the summer of 2018 to limit the scope of the investigation into its business practices in the state, claiming at one point that anything short of a gag order forbidding customers from complaining at public hearings about the performance of Frontier’s DSL service would “violate federal law” and “create false expectations and confusion for customers.”

“Holding public hearings directed to internet access service complaints would not be constructive because the Commission would be precluded from taking action concerning internet service rates or service quality using any information it may collect during the public hearings,” Frontier claimed.

Customer Service Hell

Elizabeth Mohr’s testimony described an experience typical of many Frontier complaints. When Mohr complained about the poor quality of her Frontier DSL service, which came nowhere near the 12 Mbps she was offered, Frontier unilaterally disconnected her service without notice, leaving her without phone service for 12 days. The company “lost” five of the six repair tickets assigned to Mohr’s disconnect complaint. Frontier later refused to reactivate her DSL service, claiming it had “no ports available,” despite the fact taxpayers helped subsidize the expansion of internet access in her neighborhood.

“We found it took us 47 of our hours on the phone with Frontier to get service, even though they sent us a flier that said you should be able to call and get it,” Mohr testified. “So 47 hours on the phone of our time, six tickets, five of which were closed with no answer. They never showed up.”

Frontier’s bad customer service isn’t a new experience for Mohr either.

“You can get better service from them but you have to be willing to put up a fight. I have been hung up on, probably in the last 13 years, probably 200 times,” Mohr said. “When I would call and say, I have an issue with your network, they wouldn’t believe me. Between my husband and myself, we have 20 years of network administration. We could ping to their system and tell them where the problem was failing and they wouldn’t believe us, and they would hang up on us. So clearly, Frontier has a problem.”

Shellie Metzler of Finlayson claimed she has to be placed on a waiting list to have her phone line repaired — something more in common with East Berlin in the 1970s than the United States in 2019. She waited over a year for repairs for her basic Frontier landline and DSL service, repeatedly being told in over 20 hours of phone calls with the company “there were no lines available.”

The wait was not worth it. After service was installed, Ms. Metzler reported, “I could not hear when on the phone because of the static. Also, each time the phone rang, the internet would go offline.”

Like many Minnesotans, Metzler is still paying for broadband internet service she is not receiving. Metzler was sold Frontier’s Broadband Ultra 12 Mbps DSL service.

“I am receiving, if lucky, 1.2 Mbps,” Metzler reported. “Last week within two days the internet dropped over 100 times. Dropped service and slow internet speeds are everyday occurrences. I should not be charged for the 12 Mbps because I have never had it. I should not be charged for the 6 Mbps because I do not get that either.”

The report also had little positive to say about Frontier’s customer service department:

Subscribers received inaccurate information and expressed great frustration when dealing with Frontier’s customer service personnel, even characterizing the service as being rude and/or unhelpful. Customers also said Frontier’s customer service representatives would often refuse to transfer the customer to a supervisor or the supervisor would fail to return their call as requested.

Many customers reported that contacting Frontier was anything but convenient, describing long hold times prior to speaking with a customer service representatives. Also, several consumers reported that they believed Frontier representatives were unqualified, untrained, or otherwise provided them with inaccurate information. In some cases, representatives yelled at customers and accused them of being rude or inappropriate.

Frontier’s Repairs: ‘Like Placing a Band-Aid on a Hemorrhage’

Frontier’s “High Speed” 21st Century Network fantasy claims extend back to 2010 when former CEO Maggie Wilderotter was telling customers Frontier was loaded with fiber.

The state investigation also uncovered evidence that Frontier often “repairs” poor service for a complaining customer by swapping the bad line pair with another customer with good service who is not likely to complain when their service suddenly deteriorates:

Frontier’s practice is that, when one customer is out of service [or is receiving impaired service] and requests repair, in order to restore service to that subscriber, Frontier disconnects, without notice, the service of another subscriber, and “swaps” the other subscriber’s working lines or cards for the non-working line or card of the subscriber whose service is being restored.

A typical example is the public comment of Debra Boldt of Glen, Minn., who lives on a lake with some summer residents. Ms. Boldt reported that to restore service to one neighbor, Frontier switches non-working lines with the working line of a summer resident who may not know their service is disconnected until they next visit; and, when that person complains, Frontier will then switch the working line from a different resident.

Similarly, Tom Grant testified at the Lakeville public hearing that Frontier technicians have told him, “they basically move cards or switches to be able to solve the problem for that individual customer, while knowing full well that that creates havoc for others that reside on that same node.”

Wayne Nierenhausen testified that technicians have told him: “[W]hen they get a complaint, there’s some kind of card within that box that’s a quarter-mile from my house that they will change to basically whoever made the complaint to get faster speed, but then when another call is made, they’ll switch that card out, put it to whoever made the complaint, and then put the old card back in.”

Customer service problems particularly affect the elderly and infirm, who are the most likely to still have landline service.

The report also heavily criticized Frontier for covering up problems by miscoding trouble reports and service outages to avoid drawing regulator attention. Outages impacting regulated basic phone service were frequently classified as unregulated internet outages, coded as being the fault of the customer, or trouble tickets were closed before repairs were completed. Closing trouble tickets prematurely also extends an extra benefit to Frontier — the company will not credit customers for extended outages if the original trouble ticket is closed.

As a last resort, if Frontier deems repairs too costly, customers are told to “live with it.”

Medically Necessary Phone Service Repairs Ignored

The report also found Frontier’s unwillingness to expedite repairs for customers with serious medical issues were “shocking” because customers were often not informed service representatives have no authority to request a medical-related expedited repair, and notes placed on customer accounts by those representatives are routinely ignored. The company admitted the only way a customer can be flagged a medical priority customer is if a doctor certifies annually, in writing, there is a medical need to maintain reliable phone service:

A letter/document must be received from the customer’s physician annually certifying that a medical emergency exists and that phone service is essential, and that the letter or document must contain the following:

  • State registration or license number of physician.
  • Name and address of seriously ill person.
  • Name, signature of licensed physician or public health official (nurse or physician’s assistant) certifying illness or medical emergency and date.
  • Optional – Any services beyond local exchange service that may be necessary to reach customer’s doctor and that absence of such services would be a serious risk of inaccessibility of emergency medical assistance.

Customers are instructed to mail or fax the documentation to:

Frontier Correspondence
PO Box 5166
Tampa, FL 33675
Fax: 1- 888-609-9919

Billing Controversies

Frontier used to mail checks refunding credit balances to departing customers. Today they mail gift cards, occasionally with no balance on them.

The report also found many “direct violations” of Minnesota law and rules from the company’s billing practices. Customers reported Frontier misrepresented its “vacation rate,” offering discounted phone service during seasonal disconnects at vacation properties. Instead, many customers report being billed normal rates and were refused credits, even when the company admitted the problem was theirs and would be fixed.

Customers also report steep late fees for online payments made before the due date, because Frontier reserves the right to take at least five days (and sometimes more) to process online payments, and does not always honor the date of payments initiated by customers. Many others reported Frontier continued to bill closed accounts for months despite cancelling service. One customer who refused to pay several hundred dollars in new charges on his closed account had his credit ruined after Frontier reported him delinquent. A subsequent agreement to pay off the outstanding bills on the closed account in return for getting negative information removed from his credit report was later refused by Frontier… after the company cashed his check.

Customers who pass away while being Frontier customers had better share their account passwords with surviving relatives. As Tabitha Odegaard discovered after her father in law passed away in November 2017, Frontier will not cancel service for deceased customers without a proper account password. Odegaard told regulators she was still paying for service on behalf of her father-in-law in 2018.

Customers that plan to cancel service might be better off removing auto-pay from their account and not paying their last bill until a final bill is generated. Receiving refunds for cancelled service is a hit-or-miss affair at Frontier, according to the report. Customers must wait at least 90 days for a refund to arrive. Most customers end up with a gift card covering any credit balances, but some report their gift card arrived with a zero balance, or did not arrive at all. In such cases, customers have to wait an additional two months before a replacement card will be issued. One customer reported his refund took seven months to arrive, after getting a gift card with no balance on it. Other customers report only getting a credit balance on their monthly bill for their closed account, with no refund, gradually depleted by ongoing billing fees, taxes and surcharges that accrue each month. The credit balance runs out while waiting for a refund that never arrives.

Report Recommends Fundamental Changes and Frontier Responds

The report recommends that Frontier be required to refund or credit customers for service outages and unauthorized charges; add staffing to improve customer service; and increase investments in infrastructure and equipment.

Frontier responded with a written statement, reading in part:

“Frontier strongly disagrees with the assertions in the Department of Commerce’s initial comments and is reviewing the Department’s filing with the Minnesota Public Utilities Commission. Frontier and its employees work hard to provide reliable, affordable telecommunications services to approximately 90,000 customers in Minnesota, many in rural communities where no other provider will invest in providing service. Frontier recognizes we experience service issues and delays from time-to-time with some of our customers. We are an ethical company committed to our customers and the Minnesota communities we serve. We take this matter seriously and will respond appropriately before the Public Utilities Commission.”

Minnesota Public Radio reported in October 2018 that Frontier has slashed its technical workforce by 50% in Minnesota over the last five years. (4:08)

Telcos Pile Up Debt From Mergers & Acquisitions While Stalling Fiber Upgrades

Phillip Dampier June 18, 2018 AT&T, Broadband Speed, Competition, Consumer News, Public Policy & Gov't, Rural Broadband, Verizon Comments Off on Telcos Pile Up Debt From Mergers & Acquisitions While Stalling Fiber Upgrades

Spending priorities: mergers & acquisitions, not upgrades.

Since 2012, two of the country’s largest phone companies spent enough money — $281.4 billion — to wire at least three-quarters of the  nation with fiber-to-the-home service and deliver vastly improved rural internet access to the rest of the country. Instead of doing that, AT&T and Verizon used the money to buy their competitors and content creators including AOL and Yahoo.

A 2017 Deloitte Consulting analysis estimates the United States will need between $130 and $150 billion in investment over the next 5–7 years to upgrade at least 75% of homes and businesses to fiber to the home service, with the remaining 25% serviced by technologies including 5G that are capable of delivering broadband speeds greater than the federal minimum standard of 25/3 Mbps.

AT&T could almost deliver the country a major broadband upgrade all by itself, having spent $138 billion on mergers and acquisitions in the past six years. Verizon could have easily handled the entire cost, but instead spent its $143.4 billion on business deals, including $130 billion to buy out former Verizon Wireless partner Vodafone. Among independent phone companies, things look equally bad. Frontier Communications is saddled with so much debt after acquiring former AT&T customers in Connecticut and Verizon customers in more than a dozen states, it has been forced to suspend its shareholder dividend and has been only able to make token investments in network upgrades for its mostly copper wire infrastructure in its original “legacy” service areas and a mixture of copper and fiber in acquired service areas. Both CenturyLink and Windstream have refocused many of their business activities on the commercial services marketplace, including the sale of hosting, business IT services, and cloud server networks.

More recently, both AT&T and Verizon have raced into content company acquisitions, buying up AOL, Yahoo, and Time Warner to offer their respective customers additional content. The phone companies are diversifying their business interests away from simply offering phone lines and internet access. At the same time, many of these acquisitions are depleting resources that could be spent on critical network upgrades.

The article in Light Reading claims the telecom industry’s traditional financial model of borrowing money to build networks and upgrade others is broken, because telecom companies now prefer to spend money acquiring other companies instead. Although AT&T has, in recent years, been more aggressive than Verizon in deploying fiber to home service, both companies have resisted committing large amounts of capital to a territory-wide fiber buildout, preferring to spend smaller sums to incrementally upgrade their networks in selected areas over the next decade. But the merger and acquisition teams at both companies are far less cautious, given the go ahead to pay handsomely for companies that often have little to do with providing telephone or internet service.

Light Reading reports AT&T’s debt climbed from $59 billion in 2010 to $126 billion at the end of 2017. Verizon’s debt increased from $45 billion to $114 billion. But those acquisitions have done little to attract new customers. Both companies’ operating cash flows have barely budged — $39 billion annually at AT&T (up from $35 billion) and Verizon’s actually declined from $33 billion in 2010 to $25 billion in 2017.

Mergers and Acquisitions (2011-2018)

AT&T

  • 2012: AT&T buys $1.93 billion worth of spectrum from Qualcomm.
  • 2013: AT&T buys Leap Wireless (Cricket) for $1.2 billion.
  • 2014: AT&T pays $49 billion for the DirectTV, issuing $17.5 billion in debt in April.
  • 2015: AT&T buys out assets from bankrupt Mexican wireless business of NII Holdings for around $1.875 billion.
  • 2018: AT&T pays $207 million to acquire FiberTower.
  • 2018: AT&T is cleared to merge with Time Warner in a deal valued at more than $84 billion.

Verizon

  • 2011: Verizon acquires Terremark for $1.4 billion.
  • 2014: Verizon buys out Vodafone’s 45 percent stake in Verizon Wireless, valued at $130 billion, with a mixture of stock and debt.
  • 2015: Verizon buys AOL for a deal valued around $4.4 billion.
  • 2017: Verizon acquires Yahoo Internet assets for $4.5 billion.
  • 2017: Verizon buys spectrum holder Straight Path Communications for $3.1 billion roughly double rival AT&T’s offer, to build up 5G spectrum and footprint.

The more debt (and debt payments) that pile up at the two companies, the less money will be available to spend on fiber upgrades. In fact, there is evidence these companies are hoping to further cut costs in their core landline network operations. Some regulators have noticed. Verizon was forced to make a deal with New York regulators requiring the company to spend millions replacing failing copper-based facilities and upgrade them to fiber and remove or replace tens of thousands of deteriorated utility poles. Verizon faced similar action in Pennsylvania.

AT&T has spent millions lobbying the federal government to permanently decommission rural America’s landline network and replace it with a wireless alternative, while also working to replace the current regulated telephone network with deregulated alternatives like internet and Voice over IP phone service.

Wall Street analysts have occasionally questioned or at least expressed surprise over some of the phone companies’ odd acquisitions:

  • Verizon acquired Terremark to beef up its cloud-based and server-hosting businesses. But shortly after acquiring the company, Verizon began replacing top management, sometimes repeatedly, and ultimately divested itself of its data center portfolio, including Terremark, just five years later. Find uk reseller hosting services at netnerd.com.
  • AT&T bought DirecTV to help it reduce wholesale TV programming expenses for its U-verse TV subscribers. But DirecTV has lost more than one million satellite TV customers since AT&T acquired it in 2014, despite new marketing efforts to convince would-be U-verse TV customers to choose DirecTV instead.
  • Verizon saw value in web brands that were major players more than 18 years ago but are mostly afterthoughts today. The company spent almost $9 billion to acquire Yahoo and AOL, and their low quality content portfolios, which rely heavily on clickbait headlines, advertiser-sponsored content, and articles designed to maximize mouse clicks to boost the number of ads you see.

“The telcos are trying to diversify into content when they should instead be focused on their core business — building networks and charging for value-added technology,” said Scott Raynovich, founder and principal analyst at Futuriom. “It’s clear they see content as part of the value-add but customers so far don’t seem to be reacting that way. It’s clear they are allergic to paying higher prices for bundled content.”

AT&T and Verizon’s customers are not clamoring for more content deals. When surveyed, most want better internet service at more affordable prices.

Deutsche Telekom: We’ll Build a Nationwide Fiber Network If You Let Us Monopolize It

German Chancellor Angela Merkel examines fiber optic telecommunications cables.

Germany has an internet access problem not very different from the one afflicting the United States and Canada. The national phone company, still partly owned by the government, remains mostly dependent on a decades-old wireline telephone network to deliver landline and DSL broadband service. The only way Deutsche Telekom will invest adequately to replace it with optical fiber is if they get assurances from the federal government they will be allowed to monopolize access to it.

According to the business weekly WirtschaftsWoche, a sister publication of Handelsblatt, Telekom executives have agreed to build a fiber-optic network everywhere in Germany provided that it is excluded from European anti-monopoly rules so that Deutsche Telekom wouldn’t be forced to open its network to competition.

The proposal from the German telecom giant was particularly audacious because many in the country blame it and its uncompetitive behavior for creating Germany’s slow broadband problem, but that did nothing to stop the company from asking to be shielded from competition.

“A fundamental departure from the kind of logic that viewed regulation of Deutsche Telekom (DT) as the normal state in the last 20 years is urgently needed,” the company said in a filing with the German Federal Network Agency, which regulates the internet in the country.

For most Germans, DT is the problem. The phone company has proven itself a formidable competitor across many parts of eastern Europe, where it bought control of privatized telecommunications companies that used to operate as government monopolies. But back home in Germany, it has been happy to continue offering DSL service that the rest of Europe cannot get rid of fast enough. In certain larger cities like Munich and Cologne, upstart fiber to the home providers have filled the broadband gap and have wired significant parts of both cities, and DT has responded with a fiber offering of its own without complaining about the cost of building a fiber network or the return on its investment.

Oberbürgermeister Wolff

But in smaller towns and villages across Germany — particularly in the eastern states, broadband has been terrible for years and under DT’s “leadership” it has not gotten much better, allowing other countries in the EU to sail past Germany in broadband rankings. Like AT&T and Verizon in the U.S., DT claims that where it has not upgraded its network, there is either no demand for fiber fast internet speed or inadequate return on investment. Also like in the U.S., DT has spent its money on other technologies, notably wireless, while investment in landline networks has not kept up.

Some German communities like Bretten, fed up with inaction, have taken charge of their own broadband future and are building their own fiber to the home networks. Martin Wolff has dreamed of a digital economy boost for his town of 28,000 located near Karlsruhe in western Germany.

As mayor, he has begged and pleaded with DT to give Bretten something beyond lackluster DSL service, which is now too slow to handle the kind of 21st century internet applications that better wired communities take for granted. Mayor Wolff wants Bretten known as a gigabit city. DT, in contrast, wants to leave Bretten as a forgotten digital backwater. The phone company had repeatedly told the community the broadband it gets now is more than good enough and nobody should hold their breath waiting for something better. DT’s few competitors, including Britain’s Vodafone, weren’t interested either. Bretten is too small… too… irrelevant to matter to their investors.

“They are only interested in serving the cream of the crop in the cities and don’t come to rural areas,” the mayor said.

Like in North America, Germans are asking themselves who should be in charge of their digital future — investor-owned telecom companies or the community itself. The country’s continued embarrassing showing in European broadband rankings has become an issue of national pride and has sparked a loud debate between established telecom companies and the public that wants faster and better broadband.

The noise of the debate has attracted the politicians, and the issue of German broadband has now taken center stage in the parliamentary elections, which will be held Sept. 24. Handelsblatt reports the issue of inadequate broadband now interests German voters more than the latest economic policy position paper or how Germany will manage to deal with U.S. President Donald Trump for the next three years. Many Germans have plenty of time for these kinds of offline debates, because online, it can take a minute to load a webpage on some of the country’s dial-up like DSL connections.

“Germany is one of the most under-supplied countries in Europe, especially in terms of rural coverage,” wrote Bernd Beckert, an internet expert at the Fraunhofer Institute for Systems and Innovation Research, in a recent study of European broadband. He said countries such as Switzerland, Spain and even tiny Estonia are far ahead of Germany. In fact, the Baltic states and many former Eastern bloc countries are moving towards a fiber future while Germany considers wrapping itself even tighter in copper wiring installed in the 1960s. More than 70% of German internet users get internet access through a DT-provided, ADSL-equipped landline. Many connect at just 1-6Mbps, about the same speed users were getting in the late 1990s when DT’s internet monopoly was abolished.

Since then, DT has done everything possible to encourage “competitors” to not build competing networks. In fact, most competing ISPs like 1&1, Versatel, Telefonica Deutschland, and Vodafone rent DT DSL-capable landlines to provision service to their customers. That means they cannot compete on speed and they are forced to rely on DT to maintain its wireline network. It is no accident that German adoption of fiber optics is stuck at only 1.8%, fifth from last place among the 35 member states of the Organization of Economic Cooperation and Development (OECD). In comparison, Japan and South Korea have more than 70 percent of their customers on fiber to the home connections.

Germany’s largest political parties that have been in government since 2005, the Christian Democratic Union (CDU) and the Christian Social Union in Bavaria (CSU) have tolerated DT and its anemic upgrade policies. Broadband stagnancy, many believe, would not be possible without acquiescence and appeasement by those in control of the country. That conspiracy theory is backed by many of Germany’s smaller political parties which believe it is time to change the government’s involvement with DT.

The Left Party’s platform supports nationalizing DT and returning it to a state-owned enterprise that will answer to the public policy priorities of the next government. The capitalist, pro-business Free Democratic Party wants to get the government completely out of its 32% remaining stake in DT and hope that free market solutions will emerge. In the meantime, that party proposes to use the proceeds of any sale to fund a national broadband subsidy fund to convince private telecom companies to upgrade their networks in underserved areas.

DT has not stayed quiet in the public policy debate either. After disappointing the German public by rejecting a proposal to build an open, nationwide fiber to the home network, the company has instead promised to upgrade existing DSL lines to newer technologies like VDSL and vectoring, which DT claims could deliver up to 100Mbps service. American phone companies like Verizon have been reluctant to head in a similar direction, admitting many of the next generation DSL technologies work better in the lab than in the field. Many of the technologies promoting the most dramatic speed improvements have also proved to be vaporware so far.

Deutsche Telekom HQ Bonn, Germany

“We are committed to vectoring, because it is the only way to provide people in rural areas with faster lines quickly,” Deutsche Telekom said in a blog post published in August. “If we are fixated on [fiber to the home], those in the countryside will remain left behind for years. It is simply impossible to roll out fiber lines to homes everywhere in the country. Neither the construction capacity nor the funding is available for that. Plus, there is quite simply no demand for it.”

Some of the other competitors in the market seem to agree with DT.

“No provider can achieve fiber optic expansion on its own,” said Valentina Daiber, a member of the board of Telefonica. Daiber said DT was already nearly $60 billion in debt. Daiber said she hoped a solution could be found after the election.

But just a week after Daiber made that claim Vodafone announced it will spend $2.4 billion on a new fiber to the premises network targeting 100,000 companies in 2,000 German business parks. The company will also spend up to $450 million partnering with municipalities to extend the network to about one million rural homes, in addition to boosting its current broadband speeds delivered to German cable customers to 1Gbps.

That announcement could cause DT’s DSL plans to eventually collapse, if Vodafone follows through on its fiber buildout.

Mayor Wolff has no intention of waiting to see how it all plays out. Wolff has convinced private fiber optics company BBV to install the fiber infrastructure and has a Dutch investor partner arranging $12 million in financing, which is always the biggest stumbling block to get fiber buildouts underway. Upfront construction costs often deter many municipalities and would-be competitors from launching. But for Wolff, where there is a will, there is a way to deliver fiber fast broadband, and he is making certain it happens sooner rather than later.

Telecom Companies Prepare for Hurricane Irma

Phillip Dampier September 7, 2017 AT&T, Comcast/Xfinity, Consumer News, Frontier, Public Policy & Gov't, Sprint, T-Mobile, Verizon, Virgin Mobile, Wireless Broadband Comments Off on Telecom Companies Prepare for Hurricane Irma

AT&T, Verizon Wireless, Sprint, and T-Mobile are sending technicians to hundreds of cell sites across Florida to top off fuel generators, test back up batteries, and protect facilities from Hurricane Irma’s anticipated storm surge and associated flooding.

“Customers rely on us, especially during major storms,” said Joe York, AT&T Florida president. “That’s why we practice readiness drills and simulations throughout the year. We do all we can to have our networks prepared when severe weather strikes. We’ve worked for the past few days to position equipment and crews to respond to the storm. We’re closely linked with Florida public officials in their storm response efforts. With a storm of this size, we may have some outages. But if service goes down, we’ll do all we can to get it back up as fast as possible.”

With landfall possible along the Florida coast or inland, Verizon pointed out that in Florida, since last hurricane season, it has densified its network with 4G, fortified coverage along evacuation routes, put cell sites equipment on stilts and installed new systems in hospitals, government and emergency facilities, and high-traffic public areas.

“The country is only beginning to wrestle with recovery efforts from Harvey, and already, residents of Florida and the Caribbean are bracing for another potentially devastating storm in Hurricane Irma,” said Sprint CEO Marcelo Claure. “During times like these, the cost of staying connected to friends and loved ones should be the last thing on anyone’s mind, and we want to do what we can to support our customers across impacted areas.”

Hurricane Irma’s impact on Puerto Rico.

AT&T and Verizon Wireless are positioning portable cell tower trailers just outside of areas anticipated to take the brunt of the hurricane. AT&T in particular has a lot to prove as its network now includes FirstNet — a public private wireless broadband network for emergency responders that also depends on AT&T’s wireless networks. States are still in the process of opting in to AT&T’s FirstNet. The company has more than 700 pieces of emergency cellular equipment, including Cell on Wheels, Cell on Light Trucks, portable trailers and generators, and even the possibility of deploying Cells on Wings — airborne cell towers that can restore cell service in areas where roads are inaccessible because of floods.

Wireline companies are also positioning repair crews in the region to bring service back online. Other technicians are checking on emergency generator and battery backup power, particularly for maintaining landline service.

“Our team is working to prepare for extreme weather and will be there for our business and residential customers to quickly and safely restore any affected network services,” reports Frontier Communications, which provides service in former Verizon landline service areas.

The phone company is reminding landline customers that not all phones will operate during a power outage, but that does not mean Frontier’s landline network is down.

“Customers who rely on cordless phones should consider plugging a traditional corded phone directly into the wall. In the event of a commercial power outage, corded phones on the copper network will still operate; cordless ones will not,” the company says. “If commercial power is unavailable, generators and batteries in Frontier’s central offices serve as a backup. Phone lines generally will have enough power in them to use a corded phone. For customers using FiOS phone services, the battery backup will supply voice service for up to eight hours.”

The company also warns customers to watch out for damaged utility lines after the storm is over.

“Stay far away from any downed cables or power lines. Contact Frontier at 800-921-8102 (business) or 800-921-8101 (residential) to report any fallen telephone poles or cables.”

Some companies are offering customers a break on their bills:

  • Verizon: Landline customers will not pay any long distance charges for calls to Anguilla, the British Virgin Islands, Puerto Rico, Dominican Republic, Haiti, and the Turks and Caicos Islands from Sept. 6-9. Taxes and any government surcharges applicable will still apply. Verizon Wireless customers inside the U.S. will not be charged for texts or calls originating in the U.S. to those same countries and territories for the same period.
  • T-Mobile and MetroPCS customers in affected areas of Puerto Rico:  Will get calls, texts, and unlimited data free from Sept. 6th through Sept. 8th. This free service will be available to customers in the 787 and 939 area codes.
  • Sprint: Effective today through Sept. 9, 2017, Sprint will waive call, text and data overage fees for its Sprint, Boost Mobile and Virgin Mobile customers in Puerto Rico and the U.S. Virgin Islands. For Sprint, Boost Mobile and Virgin Mobile customers in the U.S., the company will also waive all international call and text overage fees to the following: Anguilla, Dominican Republic, Haiti, Turks and Caicos, and British Virgin Islands. For the same period, Sprint will also waive roaming voice and text overage fees for its customers in those locations. Fees will be waived during the time specified.
  • Comcast: Opening more than 137,000 XFINITY Wi-Fi hotspots throughout Florida to anyone who needs them, including non-XFINITY customers, for free. For a map of XFINITY Wi-Fi hotspots, which are located both indoors and outdoors in places such as shopping districts, parks and businesses, visit Xfinity.com/wifi. Once in range of a hotspot, select the “xfinitywifi” network name in the list of available hotspots and then launch a browser. Comcast internet customers can sign in with their usernames and passwords and they will be automatically connected to XFINITY Wi-Fi hotspots in the future. Non-Comcast internet subscribers should visit the “Not an Xfinity Internet Customer” section on the sign-in page to get started. Non-customers will be able to renew their complimentary sessions every 2 hours through Sept. 15, 2017.

AT&T Offers These Customer Tips:

  • Keep your mobile phone battery charged. In case of a power outage, have another way to charge your phone like an extra battery, car charger or device-charging accessory. Applicable sales tax holidays are a great time to stock up on cell phone accessories.
  • Keep your mobile devices dry. The biggest threat to your device during a hurricane is water.  Keep it safe from the elements by storing it in a baggie or some other type of protective covering, like an Otterbox phone cover.
  • Have a family communications plan. Choose someone out of the area as a central contact.   Make sure all family members know who to contact if they get separated. Most importantly, practice your emergency plan in advance.
  • Program all of your emergency contact numbers and e-mail addresses into your mobile phone. Numbers should include the police department, fire station and hospital, as well as your family members.
  • Forward your home number to your mobile number in the event of an evacuation. Call forwarding is based out of the telephone central office. This means you will get calls from your landline phone even if your local telephone service is disrupted. If the central office is not operational, services such as voicemail and call forwarding may be useful.
  • Track the storm and access weather information on your mobile device. Many homes lose power during severe weather. You can stay up to speed as a DIRECTV customer, by streaming local weather channels using the DIRECTV application on your smartphone. If you subscribe to mobile DVR, you can also stream every channel directly to your phone.
  • Camera phones provide assistance. If you have a camera phone, take, store and send photos and video clips of damage to your insurance company.
  • Use location-based technology.  Services like AT&T Navigator and AT&T FamilyMap can help you find evacuation routes or avoid traffic from downed trees or power lines. They can also track a family member’s wireless device if you get separated.
  • Limit social media activity. Keep social media activity to a minimum during and after a storm to limit network congestion and allow for emergency communications to go through.

Business Tips:

  • Set up a call-forwarding service to a backup location. Set up a single or multiple hotline number(s) for employees, their families, customers and partners so they all know about the business situation and emergency plan.
  • Back up data to the Cloud. Routinely back up files to an off-site location.
  • Outline detailed plans for evacuation and shelter-in-place. Practice these plans (employee training, etc.). Establish a backup location for your business and meeting place for all employees.
  • Assemble a crisis-management team. Coordinate efforts with neighboring businesses and building management. Disasters that affect your suppliers also affect your business. Outline a plan for supply chain continuity for business needs.

Keeping the lines open for emergencies:

During evacuations, the storm event and its aftermath, network resources will likely be taxed. To help ensure that emergency personnel have open lines, keep these tips in mind:

  • Text messaging. During an emergency situation, text messages may go through more quickly than voice calls because they require fewer network resources. Depending on your text or data plan, additional charges may apply.
  • Be prepared for high call volume. During an emergency, many people are trying to use their phones at the same time. The increased calling volume may create network congestion, leading to “fast busy” signals on your wireless phone or a slow dial tone on your landline phone. If this happens, hang up, wait several seconds and then try the call again. This allows your original call data to clear the network before you try again.
  • Keep non-emergency calls to a minimum, and limit your calls to the most important ones. If there is severe weather, chances are many people will be attempting to place calls to loved ones, friends and business associates.

Additional information and tips for disaster preparedness can be found at www.att.com/vitalconnections.

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