Some financially challenged customers subscribed to legacy DSL from Frontier Communications are finding they cannot qualify for the Biden Administration’s emergency internet discount program because their internet service is too slow.

WHEC-TV’s Jennifer Lewke heard from one Rochester, N.Y., area Frontier customer frustrated to discover the phone company refused to accept their application.

The discount comes from the Emergency Broadband Benefit, a temporary program offering financially distressed consumers $50 off their monthly internet bill until the funding for the program runs out.

The roadblock comes from Frontier, which created its own rule that only customers with 25 Mbps or faster internet service subscribed to select tiers of service can qualify for the discount. That eliminates many of Frontier’s most loyal DSL customers that have stayed with the company for over a decade, despite often getting internet speeds less than 10 Mbps.

News10NBC:

John Derycke of Rochester relies on the internet for a lot.

“My [Frontier] plan is $54.99 and then they tack on a $6.99 infrastructure charge,” he told News10NBC.

[…]

“I went to the site to verify eligibility, I qualify and that was on May 11, I called Frontier and I spoke to Monique and she told me everything’s great we’re good to go,” Derycke said.

But when his bill came the next month, there was no credit.

He didn’t like what he was told when he called.

“After being put on hold for 20 minutes, I finally got back with the woman and she immediately said you don’t qualify because you have 24 MB and you need 25,” Derycke said.

He says he then asked to talk with a supervisor who basically told him the same thing.

Derycke says he searched the EBB page and information and couldn’t find a requirement that a customer have a plan with a certain level of megabits to qualify.

Based on that phone call with Frontier, Derycke would have to switch to the dominant internet provider in western New York, Charter Spectrum, just to get the $50 monthly credit. Based on current promotions, that would likely leave Derycke paying nothing for internet service until the EBB program runs out of money, likely by the end of this year. After his Spectrum new customer promotion expires, Derycke would likely have a higher internet bill than he started with from Frontier. 

A Frontier spokesperson told News10NBC Frontier might find a solution sooner than that:

“While a limited number of customers have a grandfathered Frontier product that is not eligible for the Emergency Broadband benefit, we are committed to transitioning these customers to comparable eligible offerings so they can receive the financial benefits. Frontier is working closing with our customer to resolve the situation.”

Such limitations on the EBB program do not come from the federal government. Internet providers voluntarily participate in the EBB program, and can set whatever restrictions, terms, and conditions they would like to qualify.

WHEC-TV in Rochester, N.Y. reports some Frontier customers with legacy DSL internet service may find themselves locked out of the Biden Administration’s internet benefit program. (3:20)

Competition is a wonderful thing. A case in point is the enormous difference Charter Spectrum charges new customers in areas where competition exists, and where it does not.

Charter’s offers are address sensitive. The cable company knows its competition and almost exactly where those competitors offer service. That is why the company asks for your service address before it quotes you pricing.

Stop the Cap! compared promotional new customer offers in the metro Rochester, N.Y. market where Spectrum faces token competition from Frontier’s slow speed DSL service. Then we checked pricing in neighborhoods where a fiber to the home overbuilder called Greenlight also offers service.

In neighborhoods where Spectrum enjoys a broadband monopoly, here are the offers for internet-only service available to new customers. Notice they expire after 12 months:

Spectrum promotional prices in non-competitive service areas.

Just one street away, where Greenlight offers customers the option of gigabit speed over a fiber to the home network, Spectrum’s promotional prices are quite different. Notice these offers last 24 months, twice as long as in non-competitive neighborhoods:

Spectrum promotional prices in some areas where customers can choose a competitor offering fiber to the home service.

Spectrum does not even bother offering new customers its entry-level 200 Mbps plan in areas where it has significant fiber competition. For $20 less per month, you get double that speed. Gigabit service is $20 less in competitive areas, too.

Spectrum charges a hefty $199.99 compulsory installation fee for gigabit service in non-competitive neighborhoods. Where fiber competition exists, sometimes just a street away, that installation fee plummets to just $49.99.

Note similar pricing variability exists in Spectrum service areas around the country, with the most aggressively priced offers reserved for addresses also served by a fiber to the home provider or multiple competitors (e.g. cable company, phone company, Google Fiber or other overbuilder). Current customers typically have to cancel existing service and sign up as a new customer to get these prices.

Greenlight Networks has four internet plans that range from $50-200 a month. They do not offer promotional prices, instead marketing “what you see is exactly what you will pay” pricing. As a relatively new company, they charge an installation fee that helps recoup the investments they are making to dig and string fiber cables in neighborhoods across Rochester (and Buffalo as well, where they are expanding). Spectrum (and its predecessors) use pre-existing cable lines that have been there for decades.

Greenlight Networks pricing

Charter’s promotion strategy is designed to undercut the competition on price, believing customers will choose 400/20 Mbps service for $29.99 a month over Greenlight’s 500/50 Mbps service for $50 a month. Of course, after two years Spectrum’s regular prices can kick in, more than tripling the cost to around $94.99 a month, although customers usually get a less attractive secondary promotion after the original one expires, usually offering around $10 off per month.

Spectrum customers still stuck with 100/10 Mbps Standard Internet speed may want to reboot their modems and check if they have gotten a free speed increase this week.

Stop the Cap! has heard from customers in the following areas, all reporting their Standard Internet speed has doubled to 200/10 Mbps:

• Rochester, N.Y. and surrounding Finger Lakes region
• Buffalo, N.Y., and parts of Western New York
• Central Florida, including Winter Springs

Charter Communications has already upgraded just over half of their Standard Internet customers nationwide to 200/10 Mbps. Upgrading the remaining 40% of customers has taken over a year and is still a work in progress. Charter may have delivered these recent speed hikes in part to placate customers notified this month their broadband service was increasing an additional $5 a month.

Spectrum’s other speed tiers remain unchanged.

Some Frontier Communications customers in Rochester were left without service early today in a “widespread” outage that impacted local governments, commercial customers, and medical care facilities. To prevent disruptions, working with Operant Billing can help keep your billing and financial operations running smoothly.

Medical facilities are relying on backup plans to maintain communications after service failed this morning, just days after the New York Public Service Commission warned Frontier Communications it must improve service after receiving a growing number of service complaints impacting service across the state.

The outage is just the latest in a growing series of outages that have left some customers without service for as long as five weeks. Last week, state regulators released results of their 2018 survey on the service quality of telephone companies serving New York and found service from four Frontier-owned affiliates lacking:

• Citizens Telecommunications Company of New York, Inc. (Citizens)
• Frontier Telephone of Rochester, Inc. (Frontier Rochester)
• Frontier Communications of New York, Inc. (Frontier New York)
• Frontier Communications of Ausable Valley, Inc. (Ausable Valley)

“The rate of consumer complaints received by the Department of Public Service (PSC Complaints) has significantly increased in the last several years for these companies,” the PSC report concludes. “In addition, a review of company-provided initial data shows poor performance regarding repair duration for customers who lose service. Further, Staff has received an increasing number of complaints from local, county, and State government representatives and officials from first-responder organizations regarding network reliability and timeliness of repairs in the service areas of these companies.”

Frontier was a clear standout among problematic service providers serving New York. The company currently serves 221,000 access lines from 211 central offices and is the largest independent telephone company in New York outside of Verizon. Frontier is the incumbent landline provider for 7.9% of the state’s total access lines, with its largest service area centered on Rochester and the 585 area code. The PSC notes Frontier has been rapidly losing customers, with 30,000 access lines disconnected in 2018 alone.

But not every Frontier division in New York has operated below the PSC’s standards. Former Rochester Telephone-owned entities including Frontier Ogden Telephone Company and Frontier Communications of Seneca-Gorham, as well as Frontier Communications of Sylvan Lake experienced no significant outages or complaints in 2018. Frontier often allows its divisions to be managed somewhat autonomously, with local managers keeping watch over operations in their area. Frontier offers little residential fiber optic service in its New York markets, except in selected new housing developments and in areas where the existing copper network has deteriorated or been damaged beyond practical repair. Most customers are offered copper-based DSL service over telephone lines installed decades ago.

Frontier’s ongoing and increasing financial problems may be responsible for the spike in service complaints and lengthening repair times. Employees have repeatedly told Stop the Cap! resources to deal with service issues are increasingly scarce and cost management is among the highest priorities inside the company. Frontier’s service repairs often take days, if not weeks. Company officials have told employees that since most people have cell phones, landline repairs are no longer as critical as they once were years ago. But spotty internet service can significantly damage local businesses, and outages are becoming more frequent and taking longer to repair.

“The PSC Complaint rate has significantly increased in the last several years for these Frontier companies,” the PSC found. “In addition, Staff has responded to a significant number of network reliability complaints and inquiries from local, county, and State government representatives, including emergency response entities. These complaints include long repair durations and repeated out-of-service conditions, as well as internet access and speed issues.”

Stop the Cap! has learned the New York State Attorney General’s office has also opened an informal inquiry into the increasing number of internet service complaints filed with the AG’s office.

To learn why Frontier is experiencing an increasing number of problems, the PSC has requested more granular trouble reports and will interview Frontier’s local supervisors and technicians to get a candid assessment of Frontier’s wireline facilities and what exactly is contributing to a deterioration of service. If Frontier is unwilling or unable to improve service, the PSC has warned it may take formal action against the company.

WHAM-TV in Rochester reports some Frontier customers in Mount Morris, N.Y., south of Rochester, have been without internet service for five weeks, causing frustration. (2:05)

WROC-TV in Rochester reports on another multi-day Frontier service outage, this one affecting residential and business customers in the Sea Breeze and Point Pleasant areas along Lake Ontario. (1:58)

Verizon Wireless has sued the City of Rochester, N.Y. in a potentially precedent-setting case, for demanding excessive and discriminatory fees to use public rights-of-way to deploy a fiber backhaul network and hundreds of small cells to support the introduction of 5G wireless service in the community.

The lawsuit, Cellco Partnership (d/b/a Verizon Wireless) v. City of Rochester seeks a declaratory judgment acknowledging that local laws regarding the use of rights-of-way by telecommunications companies have been largely overridden by the Trump Administration’s Federal Communications Commission. Under FCC guidelines, the maximum compensation rate a city can generally collect is $270 annually for each small cell site, far less than what the City of Rochester hopes to collect from telecommunications companies planning to dig up streets and place hundreds of small cell antennas on utility and light poles across the city.

The two parties are far apart on what defines fair and just compensation. In early 2019, the City of Rochester introduced a new fee schedule that seeks $1,500 annually for the use of each publicly owned utility or light pole, and $1,000 per standalone “smart pole” erected by a wireless company to support a small cell. Verizon Wireless wants to pay no more than $270 annually for either type.

The City also wants compensation to cover “administrative costs for retaining and managing documents and records,” “costs for managing, coordinating and responding to public concerns and complaints,” and “the costs of the City’s self-insurance.” Verizon Wireless’ attorneys argue that the FCC’s “presumptive limit” of $270 annually is all-inclusive, and therefore the fees requested are inherently unreasonable.

The City ordinance is also designed to discourage providers from installing cables on existing utility poles, preferring underground installation.

“Aerial installation of fiber or other telecommunications facilities and accessory equipment strung between poles, buildings, or other facilities, is strongly discouraged due to area weather, safety concerns, limited capacity, and aesthetic disturbances,” the ordinance reads. But Verizon Wireless argues the extra fees demanded by the City for underground burial of fiber optic cable are illegal under federal law.

“The Code’s ‘underground’ fee structure is not a reasonable approximation of actual cost, is not objectively determined, and is discriminatory,” Verizon Wireless argues.

The City’s fees for fiber optic cable installation are significant. Verizon Wireless’ lawsuit notes fees start at $10,000 for up to 2,500 linear feet of installed fiber optic cable, plus an additional $1.50 for each additional foot from 2,500-12,500 feet and $0.75 for each additional foot above 12,500 feet. After the first year, fees continue at $5,000 annually for up to 2,500 feet, $1 for each additional foot from 2,500-12,500 feet, and $0.50 for each additional foot above 12,500 feet. Somewhat lower fees apply if Verizon places its fiber cables in an existing conduit with other cables, or if it uses directional boring to place conduit and wiring without disturbing lawns, roads, or sidewalks.

Curtin

Verizon Wireless’ attorneys argue the fees cannot possibly reflect the City’s true costs because the charges are the same regardless if Verizon installed three feet or 2,000 feet of fiber optic cable.

But City Corporation Counsel Tim Curtin told the Democrat & Chronicle the city’s new fee schedule is comparable to what other cities are charging, and the City is planning more restrictions to keep providers from repeatedly digging up streets and yards to place new cable and equipment.

“This is a serious problem with people digging up the same right of way every other day and not repairing it,” Curtin told the newspaper.

The City is also exploring passing a new “dig once” policy that would incentivize providers to coordinate fiber installation to place wiring and equipment in a single shared conduit in return for lower fees. But providers like Verizon Wireless consider it in their competitive advantage to wire cities like Rochester before their competitors do.

“To better serve its customers and the City and to begin to serve new customers and provide new services, Verizon Wireless seeks to extend, densify, and upgrade its wireless network infrastructure [in Rochester], including to install additional Small Wireless Facilities to support the provision of current and next-generation telecommunications services such as 5G and to deploy fiber to connect these facilities. To successfully do this, Verizon Wireless requires new approvals from [the City of Rochester] to access City property,” Verizon’s lawsuit states. Because of the City’s fees and policies, “Verizon Wireless has been, and will continue to be, damaged and irreparably harmed, […] [including] an effective prohibition on Verizon Wireless’s ability to provide telecommunications services in the affected area of the City.”

In short, Verizon Wireless is threatening not to deploy 5G service in the area if the City successfully defends its fees and requirements.

Curtin argues Verizon Wireless is the only provider unwilling to comply with the City’s requirements, while others are moving forward under the new ordinance. One provider likely covered by Curtin’s claim is residential fiber overbuilder Greenlight Networks, which has installed fiber to the home service across several city neighborhoods for the past several years. But in 2019, Greenlight began focusing on installations in suburbs west of Rochester, and several city neighborhoods proposed for service have languished for years with “easements required” status, which could reflect Greenlight’s reluctance or ability to pay the City’s new fees.

Verizon has been the most aggressive wireless provider in Western and Central New York with respect to the proposed 5G service expansion. In addition to being the incumbent local telephone company in several New York cities (excluding Rochester), it has also offered spotty FiOS fiber to the home service in several suburbs of Buffalo and Syracuse.

A small cell

In contrast with Rochester, the City of Syracuse decided to effectively “partner” with Verizon Wireless to deploy 5G small cells to be considered America’s “first fully 5G city.” To win Verizon over, the City mothballed its existing fee policy in 2019 that charged $950 per small cell tower, resetting the rate to match the FCC’s presumed maximum of $270 annually. In return, Verizon has tentatively agreed to place up to 600 smart cell poles around the city, paying $162,000 a year. Verizon also agreed to pay a $500 application fee for each pole project (covering up to a maximum of five poles per project). Nobody is certain whether 600 smart cells are enough to saturate the city with 5G coverage, where exactly Verizon will ultimately place the small cells, or exactly when.

Ken Schmidt, president of Steel in the Air, a consultant to public and private landowners and municipalities on matters related to wireless infrastructure valuation, offered to advise the City of Syracuse for free about its agreement with Verizon Wireless, but the City never returned his calls, despite his direct experience working with other cities that negotiated with Verizon Wireless over 5G smart cells, pole attachment fees, and antenna placement rules.

“Syracuse seems to have bent over backward for Verizon,” Schmidt argues on his blog. “Make no mistake, there are benefits to becoming a 5G city, but this agreement does no more for Syracuse than it does for other cities where Verizon promised the same thing. At least some of the other cities didn’t enter into such a one-sided agreement. For example, Sacramento, San Diego and San Jose negotiated better terms and conditions than Syracuse did, and will have a similarly robust small cell deployment.”

Many consultants recommend that cities consider whether Verizon’s threats not to deploy 5G service are real, especially considering the company’s PR claims that moving forward with 5G is essential to Verizon’s network expansion.

Schmidt

Schmidt acknowledges the current FCC has a vested interest in helping large wireless companies deploy 5G infrastructure with a minimum of interference or fees from local governments.

“While the City could have negotiated a higher amount for the pole access rights or permit fees, it would have had to demonstrate that its actual costs in reviewing small cell applications and maintaining the rights-of-way were higher than the nominal fees allowed by the FCC,” Schmidt said.

Verizon’s lawyers appeared to outmaneuver the City’s attorneys by winning a number of concessions for Verizon that Syracuse will have to live with for up to 45 years. Schmidt’s recommendations may be useful to other cities, including Rochester, wrestling with these issues.

Schmidt:

Syracuse granted rights to Verizon for upward of 45 years when it didn’t have to. The city signed a master license agreement for 20 years, which allows Verizon to install poles under individual pole licenses that run up to 25 years from the date the pole was installed. Thus, if a pole is installed in year 20, it will be there for another 25 years. In short, the city is entering a possible 45-year agreement even though there is no legal requirement to do so by the FCC or any other agency. While Verizon surely prefers a much longer agreement, other cities are entering much shorter, 10-year agreements with Verizon. Verizon retained the right to terminate “at any time for any reason or no reason by written notice to the city,” but the city does not have the same right. So, the city is now committed to this specific agreement legally, regardless of what happens with technology in the future.

The agreement entered into by the city concedes unnecessary rights to Verizon under contract law. The agreement is substantially the same as other agreements proposed by Verizon to other cities. It attempts to incorporate many of the standards from the FCC Order into the license agreement. From a legal perspective, these clauses did not need to be in the license agreement. If Verizon felt the city was not adhering to the FCC order, Verizon by default has the option of requesting relief from the FCC or filing in federal court for injunction or damages. However, by adding the language in the license agreement, Verizon can now file in state court on a civil claim if Verizon believes the city is in breach of the agreement and collect monetary damages. This is absolutely of no benefit to Syracuse.

Other cities have received additional compensation in the form of public safety or “internet of things” monitoring and services, and higher fees to help pay for additional staff to review small cells applications. Syracuse received nothing. In fairness, the other cities are bigger and more important to Verizon than Syracuse. Nonetheless, the only concession Verizon appears to have made to Syracuse is the requirement for Verizon to monitor a limited set of small cells for compliance with applicable radio frequency emission standards. Verizon did not commit to deploying a certain number of small cells by any date. It is not required to deploy in the poorer areas of the city. And it did not commit to smart city initiatives or research on how 5G can benefit the residents of Syracuse.

The agreement gives the city limited rights to terminate, even if health risks are identified and proven. The city, in what appears to be an effort to appease its citizens that small cells are safe, inserted language that requires Verizon to test up to 5% of the small cells annually to confirm that they meet the minimum applicable health, safety and radio frequency regulations. The city could also test on its own, but only to confirm compliance with applicable FCC standards. By agreeing to a long-term license with limited rights to terminate, the city could be legally committed to Verizon small cells in the public right of way even if there is ample evidence that they should be removed, unless the FCC revokes its order.

By agreeing to such a one-sided agreement, the city has condemned itself to agree to similar agreements with any company providing wireless services who want to deploy in the right-of-way. Under the FCC Order and previous case law regarding the Telecommunications Act of 1996, the city may not discriminate between similar providers of wireless services. By agreeing to the terms with Verizon, the city will have a difficult time agreeing to different terms with other providers.