Verizon Communications will stop selling DSL broadband-only service to its customers May 6th in what the company is calling an effort to control costs “enabling us to continue providing competitively priced services to existing and new customers.”

Broadband Reports readers first reported receiving written notice of Verizon’s plans to discard “naked DSL” service, although existing customers who don’t move or make any changes to their account will be able to keep the broadband-only service for now.

Verizon provides the details:

Beginning May 6, 2012, we will no longer offer High Speed Internet without local voice service on the same account.

What does this mean for you?

• If you currently have High Speed Internet without local voice service on the same account, there is no action required on your part to continue enjoying your internet service. You will not experience any disruption of service.
• Prior to May 6, 2012, you can still make speed upgrades or downgrades to your existing service.
• Prior to May 6, 2012, you can receive bundle discounts by adding DIRECTV service or Verizon Wireless service to your current internet service.

What this means if you change or disconnect your High Speed Internet Service as of May 6, 2012 or after:

• You can make changes to and retain your Verizon High Speed Internet Service on or after the above date, by adding Verizon’s local voice service to the same account.
• If you are moving your service from one location to another on or after the above date, you may subscribe to internet service at your new location if you also subscribe to Verizon’s local voice service on the same account.
• If you choose to subscribe to additional Verizon services you could be eligible for a bundled discount when you also subscribe to Verizon’s local voice service on the same account.

There is speculation Verizon is eliminating its DSL-only service in an effort to boost revenue and push subscribers in FiOS-enabled areas to Verizon’s fiber optic network.  A decade earlier, many phone companies fought to avoid selling “broadband-only” DSL service without a voice landline because of revenue losses.  Landline customers continue to drop voice service from traditional phone companies at an alarming rate — choosing competing cable or Voice over IP service or a cell phone.  By requiring voice service, Verizon can boost average revenue from each customer, whether those customers want the service or not.

Customers who currently subscribe to broadband-only DSL service from Verizon are advised that virtually any account change of significance can disqualify them from continuing with the service.  That includes address changes and speed adjustments.  Stop the Cap! recommends customers make any changes prior to May 6th.

Large sections of Verizon’s service area are not FiOS-eligible,  so current DSL customers with no other broadband choices may find themselves stuck with adding voice service. Verizon sells Basic Home Telephone Service with no local calling allowance at prices ranging from $7 in some communities to $16 or higher in others, excluding the FCC-mandated line fee, which runs an extra $6.50 a month.

One thing Verizon’s higher bills will accomplish is making Verizon Wireless’ new 4G LTE Home Fusion wireless broadband service look slightly more price competitive.  If a Verizon landline customer has to pay for both voice and data service, paying $60 a month for 10GB of wireless broadband may not seem that expensive in comparison.

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

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

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

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

Frontier's headquarters in Rochester, N.Y.

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

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

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

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

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

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

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

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

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

No broadband for you...

Sometimes even money doesn’t talk… or buy you faster broadband service.

That is a lesson some of New Hampshire’s wealthiest residents — company presidents, top-dollar lawyers, and the trust-fund endowed — in Rindge and Grafton County are learning only too well.

It seems neither Comcast or FairPoint Communications has shown much interest in extending today’s definition of “broadband” to the multi-million dollar homes on Hubbard Road.

“Every year, I start working up the telephone chain, calling people at Comcast. I’m looking for the vice president, or whatever, in charge of infrastructure so I can call him, bribe him, plead with him to connect me,” said Leigh Eichel, who moved to the ritzy cul-de-sac in 2005. “I’ll pay anything!”

Eichel and his friends told their story to David Brooks of the Nashua Telegraph, who used the plight of the 1%’ers to ponder whether broadband should be a universal right.

A century ago, the government decided that mail service to all American homes was necessary and launched Rural Free Delivery. Then it decided electricity was necessary and created regulated utilities that guaranteed connection. It did the same with telephones, creating the universal access fund that collects money from all phone bills to subsidize land lines to the remotest home.

But nothing similar has happened with Internet service, which is mostly unregulated by government. The market has been largely left to its own.

The result is scattered empty spots like Hubbard Road, which should be broadband heaven.

... or you.

Comcast continues, for the seventh year running, to show zero interest in wiring the wealthy enclave.  That left residents trying to make do with satellite broadband, which they cried was too slow and usage-capped.

Eichel finally managed to cajole FairPoint Communications, the bankrupt phone company that bought out Verizon landlines in northern New England, to extend DSL to the neighborhood, but they did it on-the-cheap, leaving residents with sub-par service barely capable of breaking 1Mbps, when they’re lucky.

Welcome to broadband equality of a different kind, whether you are fighting AT&T from a family farm in Wisconsin for better-than-1Mbps DSL or a super-wealthy executive in New Hampshire suffering with FairPoint’s alleged broadband and utterly rejected by Comcast.

Particularly appalling for the well-traveled Hubbard Road residents: the realization that Singapore’s equivalent of a seedy Motel 6 has basic broadband service that beats the pants off New England’s dominant phone company.

Even Money Won't Talk

“I was staying in a budget hotel; there weren’t even windows in the room. Hey, I was spending my own money,” Eichel’s neighbor Rick Slocum told the newspaper. “[They had] 12Mbps broadband — the connection [was] 10 times as fast as my home.”

Brooks concludes New England wants the same thing most of the rest of the country wants — universal fiber-to-the-home access, which delivers 100-1000Mbps, depending on the provider.

They, like most everyone else, will have to wait.  Like AT&T U-verse and Verizon FiOS, FairPoint’s very-limited fiber offering FAST has reached a limit of its own — the amount the phone company is willing to spend rebuilding their network.  Future expansion plans are now on hold.

Slocum ponders the speed needs America will have in the future, and wonders if even fiber optics will one day need to be replaced for something even faster.

Brooks responds with a prediction.  As long as Comcast and FairPoint are in charge, whatever it is, Hubbard Road probably won’t have it.

AT&T has joined Verizon in a groundbreaking decision to stop allowing bogus charges on customer’s phone bills.

Senator Jay Rockefeller (D-W.V.) publicly thanked AT&T for joining with Verizon to stop the fraudulent fees, which a recent Senate investigation found netted at least $10 billion over the last five years.

“AT&T made the right decision to end cramming by August,” Rockefeller said. “While the decisions of AT&T and Verizon are a step in the right direction, I still believe we need to pass a bill that bans this abusive practice once and for all.”

Phone companies have been reluctant to stop third-party billing because it represents lucrative revenue for companies that have watched their landline customers disconnect and disappear.

“According to financial information my staff has reviewed, telephone companies earn a dollar or two every time they place a third-party charge on their customers’ bills,” Rockefeller said. “Do the math. That’s well over a billion dollars in profit over the past decade.”

AT&T suggested the cramming problem was overblown, but relented anyway.

“We currently receive cramming complaints for only about one out of every thousand bills that contain third-party charges,” said Michael Balmoris, an AT&T spokesman, in a statement to MSNBC.  “However, due to continued concern over the possibility of unauthorized charges, we have decided to take this additional step and eliminate third-party billing for most types of services.”

In late March, Verizon notified its billing partners it would cease third-party billing by the end of 2012.

AT&T’s ongoing efforts to win deregulation and an end to universal landline service have now reached Colorado, where state lawmakers are reacting favorably to an AT&T-sponsored bill that would strip away rural landline subsidies and deregulate basic phone rates, much to the consternation of incumbent provider CenturyLink.

The long-winded bill,  SB 157 – Concerning the Regulation of Telecommunications Service and, in Connection Therewith, Enacting the “Telecommunications Modernization Act of 2012,” is just the latest in a series of deregulation measures co-authored by AT&T that would let phone companies off the hook for guaranteeing affordable, universal landline service to every American.  Instead, AT&T is happy to sell rural consumers pricey mobile phone service.

Ironically, AT&T’s bill would deliver the worst blows to fellow landline provider CenturyLink, the largest phone company in the state. Consumers pay 2.9 percent of their phone bill toward a rural landline subsidy fund, or 87 cents for a $30 bill. It is no surprise CenturyLink is adamantly opposed to the measure, declaring the loss of rural phone service subsidies a guarantee of future rate hikes and discriminatory pricing, if not the end of basic telephone service in rural Colorado.  The company also receives more than 90 percent of the annual proceeds collected from Colorado ratepayers.

“The bill continues to legislate discrimination of one very large group of consumers. It allows a consumer living on one side of the street in rural Colorado to continue to receive High Cost Fund support while his neighbor on the other side of the street will not, simply because of the logo at the top of their telephone bills” said Jim Campbell, CenturyLink regional vice president for regulatory and legislative affairs. “We continue to be baffled that lawmakers voting in favor of this bill feel it is good public policy to write consumer discrimination into Colorado law.”

As with other AT&T-written deregulation bills, the “sufficient competition” test to prove consumers have plenty of choices for phone service is notoriously easy to meet.  SB 157 defines a market competitive when 90 percent of customers in a geographic area have a choice of at least five providers.  While that sounds like competition, in fact the bill defines just about anything resembling a phone company as “competition.”  That includes traditional landline service, mobile phones, satellite telephony, Voice Over IP providers like Skype, and cable company phone service.

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A provider declaring service to any particular geographic area on a coverage map is sufficient evidence that competition exists, even if that provider does not deliver a consistently suitable signal, charges extraordinarily high prices, or only markets service in selected areas or in a package that includes other services.  In rural Colorado, wireless companies maintaining roaming agreements with other providers would count as multiple competitors, even though they rely on the same infrastructure to handle calls.  Poor reception? That’s your problem.

The bill also allows phone companies to charge whatever they like for traditional phone service, and only requires one day’s notice of pricing changes.  The bill would also strip away the right of regulators to demand justification for the inevitable rate increases and takes away their right to reject, modify or suspend rate hikes they deem unacceptably unfair.

That could force CenturyLink prices way up in rural Colorado, perhaps to a level that makes AT&T cell phone pricing not that bad after all.

CenturyLink: Victim of Friendly Fire from AT&T?

That suits AT&T’s Colorado president William Soards just fine, as AT&T is willing to sell rural Colorado lots of wireless phones.

“There’s plenty of competition out there that will be very excited to take their business, and AT&T will be one of them,” Soards told the Denver Post.

Colorado’s Rural Broadband Fund: The Fix Is In

One of the boldest provisions of SB 157 is the establishment of a rural broadband fund that delivers up to $25 million of ratepayer money to a select group of telecommunications companies to underwrite the costs of building  non-competitive broadband networks in the most distant, unwired corners of the state.  They wrote the rules, so it comes as no surprise they are, by definition, the intended recipients — often the very same companies that have refused to provide service in rural communities in the past.  Among those they’ve made certain are prohibited from accessing the broadband fund:

• Broadcasters experimenting with sub-channel broadband data service;
• Government agencies;
• Local municipalities;
• Public-private partnerships;
• Any organization, including non-profits, controlled in whole or part by a public entity;
• Electric utilities;
• Electric co-ops;
• Non-profit electric companies or associations;
• Every other supplier of electrical energy.

Who can access the broadband fund?  Why, the backers of the bill of course, especially AT&T:

• Wireless companies like AT&T;
• Telephone companies;
• Cable operators;
• Wireless ISPs (meeting certain conditions).

Padgett: Let local communities solve their broadband challenges themselves.

The bill is written to require a minimum level of 4/1Mbps service, which may lock out many rural telephone companies unable to deliver those speeds over traditional DSL as well as congestion and distance-sensitive wireless ISPs.  Cable operators are unlikely to provide any service in the most rural areas qualified to receive broadband funding. CenturyLink’s ongoing opposition to the bill suggests they don’t see much broadband funding in their immediate future either. That leaves just one technology most suitable to receive ratepayer funding: heavily capped and expensive wireless 4G broadband from companies like AT&T.

That may leave rural (but potentially not rural enough) Ouray County up the broadband creek without a paddle.

CenturyLink has shown minimal interest in providing ubiquitous broadband across the area dubbed the “Switzerland of America” for its rugged mountainous topography.  With just 4,450 residents, Ouray County is not the phone company’s highest priority.  But the company serves just enough of the county that it might fail the “unserved area” test — a ludicrous notion for broadband-starved Colona, Eldredge, Dallas, Ridgway, Ouray, Thistledown and Camp Bird.

Long-term residents have been through something like this before.  Some remember having to fight for basic electric service as well.  The San Miguel Power Association, a non-profit, member-owned rural electric cooperative established back in 1938, finally brought electric service to the San Miguel Basin area after residents were denied service for years by Western Colorado Power.  The region ultimately had to fend for itself, and did so successfully.

That same electric co-op may just have the best broadband solution for Ouray County — fiber infrastructure already in place, but prohibited from being funded to completion by AT&T’s corporate welfare bill.

Many rural legislators understand the rural broadband problem and see community-owned co-ops as their best chance of getting broadband service in rural Colorado.  They want to amend the bill to strip out the anti-competitive, anti-public broadband language.

Ouray County Commissioner Lynn Padgett is convinced her county’s broadband problems will never be solved by the Colorado Legislature or AT&T.

“Fundamentally, I believe that we need to let those closest to the areas with the rural broadband challenges, and those most accountable, help their communities,” Padgett said.