Would you be surprised to learn a company with just a basic, outdated website replete with spelling and grammar errors holds at least 760 television station construction permits and licenses and just wrote a check for $46.5 million to buy 52 more stations from nine different owners, with plans to shut every last one of them down in the future?

That is precisely the business plan of “Landover Wireless Corp.” and its series of limited liability corporate entities, which are grabbing up as much UHF television spectrum they can apply for across the country.

They are not alone.

CTB Spectrum Services, a company associated with Landover 2 LLC, has 356 UHF TV construction permits/licenses. Its website offers slightly more information about its operations, but not much.

DTV America, a mysterious Sunrise, Fla.-based venture with an official mailing address of 12717 W. Sunrise Boulevard (Suite 372) has its headquarters inside a private mailbox at a UPS Store. The company also has countless requests for television licenses on the UHF dial. DTV America manager John Kyle is also listed as chairman and president of The Pharmacy Television Network, which appears to broadcast its programming on video displays inside pharmacies. DTV America has the lowest profile of all three companies, with no apparent website.

And you thought over the air television was dead.

DTV America’s home is inside a mailbox at the UPS Store in Sunrise, Fla.

A number of low power television owners are surprised to see the sudden rush to launch more than 1,000 new television stations across the country, particularly in rural markets that have been considered a financial dead-end for low power television. Being in the LPTV business and making a living at it often depends on whether a local cable company or satellite dish provider will pick up and relay the station to the majority of Americans that do all of their television viewing on a paid platform. Without this carriage, low power television outlets have several strikes against them: challenging reception from operating with relatively low power, the lack of compelling programming — many of these outlets air paid religious, home shopping, music, or infomercial programming 24 hours a day, and the lack of familiarity by viewers who may not realize these stations are on the air.

From information Stop the Cap! has obtained, none of these ventures actually intend to stay in the over-the-air television business. Instead, they are using FCC licensing rules to get valuable UHF spectrum without having to bid for it at forthcoming spectrum auctions. At least two of the companies claim they are raising capital to build a unicast 4G wireless content delivery network. But some critics contend they are actually spectrum squatters — speculators that have no intention of building anything. Instead, critics charge they will conduct minor experiments to effectively stall the FCC, hanging onto their permits and licenses until they can sell their holdings to a wireless provider hungry for 500-700MHz spectrum and willing to pay top dollar to get it.

Meanwhile, Landover’s $46.5 million buys them dozens of low power stations airing 30-minute commercials like “Skin Solutions by Dr. Graf.” The company claims it will keep those stations on the air until their wireless network is ready, and then the infomercials (along with the rest of the television programming) will be gone for good. Landover also managed to acquire larger Class A TV stations as part of the deal, including one each in Las Vegas and Sacramento, and three in Texas. These stations might become part of the company’s 4G network, sold off or compensated to sign-off forever as part of forthcoming “spectrum packing” by the FCC — further shrinking the UHF TV dial and auctioning off the “excess” spectrum to AT&T, Verizon, Sprint, and other cell companies.

CTB’s License Map

CTB also holds multiple TV licenses in several of its markets. The company claims it will combine those stations together in something akin to a high-powered cellular network to create a bigger wireless data pipe using “patent pending multi-frequency cellular terrestrial network technology [that] increases capacity by hundreds of times through frequency re-use, while also enabling full mobility, broadband Internet, and location-based services.”

CTB’s sales pitch claims its TV licenses offer up to 228MHz of bandwidth that is “essentially identical to 700MHz spectrum, but can be acquired at a fraction of the cost.” The company also claims it has exclusive rights to TV “White Space” spectrum via first adjacent channels, which are treated like guard bands to protect against interference from nearby stations.

All of these companies are applying for channels largely in low-interest rural markets, where they face few challenges from competing applicants. CTB calls this part of their rural “corridor” strategy. One such corridor covers stations in a line from Wisconsin west to Idaho.

All three companies are betting the FCC will allow them to eventually convert their over-the-air television licenses into wireless data networks, or let them sell the spectrum to deeper pocketed players in keeping with the Commission’s plan to open up more frequencies for data-hungry users. If the FCC allows it, these three entities will end up with the rights to prime wireless spectrum covering up to 90 percent of the country without having to spend a penny at forthcoming spectrum auctions.

But there are financial risks. The type of low power station licenses held by most of these companies do not get them a seat at the spectrum packing table. LPTV outlets are considered low-priority stations, and in larger communities, many could be forced off the air without compensation to make enough room for more important, full power stations.

No license, no 4G data network for Landover, CTB and others. But the chances of that happening in rural markets, where residents are lucky to have two or three over the air stations, are slim.

The technology might offer unique broadband opportunities for rural areas where conventional low-range cell towers are too expensive, if the technology works. A higher powered transmitter serving a rural, larger geographic area might prove financially attractive in low population density areas. Only time will tell if any of these entities will be able to raise the capital needed to fulfill the FCC’s construction permit obligations, which give owners just a few years to get their stations on the air or face forfeiture of their permit and/or license.

Phillip Dampier

It is no secret that there is an urban-rural broadband divide.

The market-driven, private enterprise broadband landscape delivers the best speeds and service to urban-suburban areas, particularly those in and around large cities, short-changing rural communities.

This is true regardless of the technology: the fastest fiber optic services are delivered in large population centers, and wireless speeds are fastest there as well. But as the National Telecommunications and Information Administration has discovered, the further away you get from these urban sectors, the poorer the service you are likely to get.

The NTIA’s findings present a significant challenge to phone company claims that rural customers would be better served with wireless broadband instead of spending money to support and upgrade landline infrastructure, which supports DSL and is upgradable to fiber optics.

The NTIA finds these rural wireless networks to be severely lacking:

Not only are far fewer rural residents than urban residents able to access 4G wireless services (i.e., at least 6Mbps downstream), but a further divide also exists within rural communities. For wireless download services greater than 6Mbps, Very Rural communities have approximately half the availability rate of Small Towns, and Small Towns have about half the availability rate of Exurbs (10, 18, and 36 percent, respectively).

This represents nothing new. AT&T and Verizon have shortchanged their rural customers with catastrophically slow DSL service (or none at all) for years:

For wireline download service, Very Rural communities also have the least availability of all five areas. Though a rural/urban split continues to be useful in providing generalized information about availability, a five-way classification uncovers a more refined picture of the divide in broadband availability across the nation. For example, at wireline download speeds of 50Mbps, broadband availability varies from 14 percent (Very Rural), 32 percent (Exurban), 35 percent (Small Town), 62 percent (Central City), to 67 percent (Suburban), even though the overall broadband availability was 63 percent in urban areas compared to 23 percent in rural areas. In addition, wireline and wireless broadband availability, particularly at faster speeds, tends to be higher within Central Cities and the Suburbs compared to everywhere else.

Why the disparity? It is a simple case of economics. Wealthy suburbs can afford the ultimate triple play packages, so providers prioritize the best service for these areas, even above less costly to serve urban centers. Rural residents either get no service at all or only basic slow speed DSL. The Return on Investment to improve broadband is inadequate for these companies in rural areas.

Source: NTIA

The same is true with wireless 4G service. Rural areas struggle for access or endure poor reception because fewer towers provide service away from major highways or town centers.

The NTIA observed wireless download speeds of 6Mbps or more were available to 90% of urban residents, but only 18% of small town residents. Wireless upload speeds of 3Mbps or greater were found in only 14% of small towns.

Dee Davis, president, Center for Rural Strategies, based in Whitesburg, Va. said the implications were clear.

“The market’s always going to go to the well-heeled communities,” Davis observed. “It’s going to go to the densest population.”

Folks in rural communities end up paying more for a lower level of service, Davis said.

“That also means that they don’t get the same chance to participate in the economy,” Davis added. “They don’t get to bring their goods and services to market in the same way. They don’t always get to participate.”

The economics of cutting off rural landlines delivers most of the benefits to providers, and assures decades of inferior service to consumers.

Economic market tests, including Return on Investment, that impact rural broadband availability will not disappear if AT&T and Verizon abandon their rural landline networks. While cost savings will be realized once rural wired infrastructure is decommissioned, there is no free market formula that would encourage either provider to pour investment funds into rural service areas. For the same reasons rural customers are broadband-challenged today, their comparatively smaller numbers and economic abilities will continue to fail investment metrics for innovative new services tomorrow.

The primary reason broadband speeds are lower in rural areas is inferior network infrastructure. Providers argue it does not make economic sense to invest in network upgrades to boost speeds for such a small number of customers. While wireless technology can be cheaper to deploy than the upkeep of a deteriorating landline network, it is not cheap or robust enough to deliver comparable broadband speeds now available in urban areas, especially as broadband usage continues to grow.

Verizon’s chief financial officer Fran Shammo admitted as much during remarks at the at JPMorgan Global Technology, Media and Telecom Conference in May:

If you recall, way back I guess about two years ago we did a trial with DirecTV in Erie, Pa., where we did broadband on the side of a house and offered a triple-play, if you will, which consisted of broadband, voice, and linear TV provided by DirecTV.

What we found was people were adoptive to the broadband; but because of the consumption of broadband through that LTE network, it was really detrimental to the spectrum and to the network performance. Because they used so much data, it soaked up so much of the spectrum.

So what we felt was LTE for broadband works in certain rural areas, but you can’t compete LTE broadband in those dense populated areas because you can’t — first of all, you can’t match the speed with a 50-megabit or a 100-megabit delivery between cable and FiOS and U-verse. And you literally don’t have enough spectrum to be able to use that much consumption.

So what we felt was by partnering with the cable companies, and delivering our LTE network with voice and data, and having that hardwired connection into the home was a better financial way to do it than trying to go LTE broadband. Because we just didn’t see where the spectrum could hold up to the volume that would be demanded.

Without rural cable companies to partner with, Verizon’s decision to move rural broadband to wireless guarantees rural Americans will not benefit from ongoing speed and capacity upgrades that are necessary to support the evolving Internet.

Powell

You and I may think America can do better providing fast and inexpensive broadband service. But a former chairman of the FCC now representing industry interests waved shiny keys of distraction to explain away why cable companies are still delivering Internet speeds slower than those found in Romania, Latvia, South Korea and Japan.

Michael Powell, the poster child of D.C.’s “revolving door” problem gave a well-compensated, rousing (yet fact-lacking) defense of an industry he was supposed to oversee in the public interest as the Bush Administration’s FCC chairman from 2001-2005.

“America is home to the world’s very best Internet companies,” said Michael Powell, chief executive of the National Cable and Telecommunications Assn. at the annual Cable Show in Washington, D.C. “We have worked hard to reach everyone, and now offer service to 93% of American homes. Despite our success, many people like to denigrate U.S. broadband by painting false comparisons to other countries. There are some nations doing very well, but it is foolish to compare countries like Latvia and France to the United States of America.”

Powell’s response is hardly a fact-filled defense for cable company broadband that still delivers slow speeds at high prices. Instead of attempting to call the statistics inaccurate, he tried to explain away the discrepancy by complaining people are ignoring the size of the country and its population.

In denial

Powell’s arguments might have some merit if the cable industry did not make a point of bypassing vast rural areas that do not meet Return on Investment tests. It is difficult to claim cable companies cannot deliver comparatively fast service in rural Iowa when they don’t offer any service at all.

The People’s Republic of China’s population is far larger than our own and is now a vital market for fiber optics manufacturers and suppliers. While some of America’s cable industry CEOs repeatedly argue America does not need fiber broadband or gigabit broadband speeds, the Chinese government has insisted that every new housing development be pre-wired with fiber that will easily and inexpensively supply those speeds in the near future.

Powell is correct to say speeds are improving in the United States, but there is growing evidence they are improving even faster overseas, especially in countries that are basing their primary telecommunication infrastructure on fiber optics, which can support enormously fast Internet speeds. As those fiber networks are lit, America will fall even faster in broadband rankings as long as cable operators continue to insist there is no demand or interest in the next generation of high-speed service. At the prices they charge, they may just prove their own “no demand”-argument, at least in this country.

Powell himself helped lay the foundation for America’s broadband duopoly by deregulating the industry with one hand while ignoring the need for competitive checks and balances with the other. At the end of Powell’s tenure, his greatest achievement was constructing an industry-friendly personal resumé to win lucrative employment as a telecommunications lobbyist.

Who better to speak with “authority” on telecommunications matters than a well-connected former FCC chairman that does the industry’s bidding? The NCTA hired him to deliver just the kind of defense cable operators hope Americans will believe.

Those that are aware of what broadband is like abroad don’t.

All Arcadia, N.Y. town supervisor Dick Colacino wanted was for Time Warner Cable to consider using some of their profits to expand their cable system by one or two roads a year to offer service where it has earlier refused to go.

Time Warner Cable’s response? No.

But Time Warner might turn that “no” into “yes” if customers offer to cover the cable company’s estimated cost of $22,000 per overhead mile to extend cable service down ignored rural roads. Underground wiring costs much more.

Every year, elected officials in just about every small town and village get an earful of complaints from bypassed residents who cannot get cable broadband service.

Arcadia (pop. 14,900) is a small community in Wayne County, east of Rochester. Time Warner Cable dominates western and central New York, with cable service from Albany west to Buffalo. In Wayne County alone, Time Warner is the only cable provider in the 23 largest municipalities. But the company has routinely skipped over potential service areas it considers not worth a wiring investment. That leaves bypassed residents with one choice for broadband — Verizon Communications, which has not expanded DSL service in the area for some time.

The New York Public Service Commission has mandated that cable service must be available to any area where 35 homes per mile are located within 150 feet of the road.

Time Warner representative Chris Mueller says the cable operator has already cut that benchmark to 20 miles per home, but areas remain that do not meet even that reduced standard. Without an appropriate return on investment within a certain time frame, Time Warner Cable won’t wire those areas for service.

Colacino told Mueller he was very unhappy with that decision and intended to pursue the matter at franchise renewal time, possibly in coordination with other communities that also have a number of bypassed residents. A community can negotiate for changes during franchise renewal talks, but in almost every case, the incumbent cable operator holds the strongest position, knowing a community looking for another provider will be unlikely to find one willing to serve.

Colacino has battled with the cable company since at least 2010 because of complaints from area residents and businesses who cannot get service.

That year, a Time Warner Cable government affairs representative offered Colacino a novel solution to the problem — agree to refund collected franchise fees to Time Warner Cable, after which the company would consider using the money to expand service to more roads in Arcadia.

The only problem with that solution is that it is illegal.

“You can’t do that,” town attorney David Saracino responded. “It’s an unconstitutional gift of public monies.”

Verizon Voice Link: The company’s landline replacement, works over Verizon Wireless.

The New York Public Service Commission has granted limited approval for a Verizon Communications plan to replace traditional landline service on the western half of Fire Island with a wireless voice service some users complain is unstable and unreliable.

Verizon claims its landline network on Fire Island has been damaged irreparably in places, and argued it needed to immediately deploy a wireless alternative before the arrival of thousands of tourists on the island, a popular summer destination.

On May 3, Verizon asked the commission to approve the use of Voice Link, which provides fixed wireless phone service, anywhere in the state if the company can prove there is an equal competitor or if existing copper-based facilities are damaged or too costly to upgrade.

Stop the Cap! reminded local politicians, union representatives, and consumer advocates Verizon’s CEO earlier promised it would decommission its copper wire networks in rural areas in favor of wireless, mostly for financial reasons. The New York State Attorney General’s office took careful note of McAdam’s commitment to abandon copper in their objection letter to the commission.

Verizon CEO Lowell McAdam in 2012:

The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view. And then in other areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there. We are going to do it over wireless.

Verizon’s efforts to rush a tariff change without adequate public notice or formal hearings brought complaints from affected customers, unions, and area politicians.

The Communications Workers of America called Verizon’s emergency “self-made.” The company could have begun repair work on Fire Island as early as last November, but instead only came to regulators earlier this month with its Voice Link proposal, while much of the western half of the island remains out of service.

CWA officials are concerned Verizon is using Hurricane Sandy as an excuse to carry out its broader agenda of abandoning rural New York’s landline infrastructure in favor of wireless service.

“Playing on sympathy for the plight of customers whom it has left without service for more than six months, Verizon proposes to implement broad, generic rules that go to the core of its obligation to serve,” said CWA vice president Chris Shelton.

The union considers Verizon’s wireless alternative less adequate than the wireline facilities Verizon wants to abandon. The CWA wants the PSC to study Voice Link’s performance during times of peak cellular usage times, power outages, adverse weather, and inadequate reception.

Thomas Barraga, a legislator in Suffolk County, says his constituents with Voice Link service are already unhappy with its performance and reliability.

“Residents and business owners who had Voice Link installed after Sandy say the connection is unstable and unreliable, and doesn’t provide for DSL Internet or fax service,” Barraga wrote in a letter to the PSC.

“Internet service is so much a part of everyday life it should be consider a basic service and they should be mandated to provide this as well,” writes Fire Island resident Robert Gonzalez. “They should provide this for the same fees and usage rates as they had previously been charging.  As of today they are price gouging.  Prior to Sandy we paid approximately $50 per month for unlimited Internet access.  Now they are putting low limits on our usage for the same $50 per month with severe penalties for going over.  You can opt for higher usage plans at a much greater cost and they are not offering an unlimited plan.”

Stop the Cap! also continues to hear from Fire Island residents about their dissatisfaction with the service. Among the newest complaints we have received:

• “It doesn’t work with collect calls and you cannot dial “0” for operator assistance;”
• “I have to dial 10 digits for all calls, seven digit dialing no longer works even though it did before;”
• “Call Waiting and Caller ID often do not work, and my unit does not ring for incoming calls about 30% of the time and people have to keep calling me back;”
• “When you attempt to take a call when on the line with someone, you cannot get them back after answering a new call;”
• “I cannot use this with my home alarm system at all and the monitoring company keeps notifying police because they think my phone line was cut;”
• “If we had a major storm with three days of power being out, Verizon’s claim Voice Link will work for two hours without power means I would have to feed it up to 72 ‘AA’ batteries, costing more than what the phone line costs me every month;”
• “What does this do to our future? It makes us second class citizens without access to the Internet except through very expensive wireless capped usage plans that cost much more.”

The PSC ruled that allowing Verizon to deploy Voice Link on Fire Island during the peak tourist season will make sure adequate phone service is up and running as quickly as possible. But the commission also made it clear it is unwilling to approve Verizon’s request to extend the service further into rural New York without a thorough review of its performance and customer reaction.