One of the rural groups fighting to keep funding for rural broadband networks.

The Republican platform on telecommunications and its criticism of the Obama Administration’s handling of broadband inspired a blogger at the Washington Post to ponder the question, “Whatever happened to Obama’s goal of universal broadband access?”

Brad Plumer sees the Republican criticism as valid, at least on the surface:

Does anyone remember when the Obama administration promised to bring “true broadband [to] every community in America”? The Republican Party definitely does, and its 2012 platform criticizes the president for not making any progress on this pledge:

“The current Administration has been frozen in the past…. It inherited from the previous Republican Administration 95 percent coverage of the nation with broadband. It will leave office with no progress toward the goal of universal coverage—after spending $7.2 billion more. That hurts rural America, where farmers, ranchers, and small business manufacturers need connectivity to expand their customer base and operate in real time with the world’s producers.

So whatever happened to the Obama administration’s plan to expand broadband access, anyway? In one sense, the Republican critics are right. Universal broadband is still far from a reality. According to the Federal Communications Commission’s annual broadband report, released in August, there are still 19 million Americans who lack access to wired broadband. Only about 94 percent of households have broadband access. Obama hasn’t achieved his goal.

Stop the Cap! has been watching the rural broadband debate since the summer of 2008, and believes the failure to do better isn’t primarily the fault of Republicans or Democrats — it lies with the nation’s phone companies — particularly AT&T and Verizon. But both political parties, to different degrees, have helped and hindered along the way.

Plumer slightly misstates the commitment of the Obama Administration at the outset. The Obama-Biden Plan never promised to successfully complete universal broadband access in the United States. Here is their actual pledge (emphasis ours):

Deploy Next-Generation Broadband: Work towards true broadband in every community in America through a combination of reform of the Universal Service Fund, better use of the nation’s wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives. America should lead the world in broadband penetration and Internet access.

Big Phone Companies Struggle to Abandon Landlines in Rural America

The Obama-Biden Plan for broadband never promised you a rose garden. It simply promised the administration would get to work planting one.

By far, AT&T and Verizon Communications are the most culpable for leaving rural Americans without broadband service. Over the last four years, both companies have diverted investment away from their landline networks into wireless. AT&T has also spent millions lobbying state governments to free itself from the requirement of serving as “the carrier of last resort,” a critical matter for rural landline customers, particularly because rural wireless coverage remains lacking.

In most states, the dominant phone company is still mandated to provide basic telephone service to every customer who wants it. Universal electric and telephone service goes all the way back to the Roosevelt Administration, who saw both as essential to the rural economy.

The Communications Act of 1934 that the Republicans today dismiss as outdated established the concept of universal telephone service: “making available, so far as possible, to all the people of the United States a rapid, efficient, nationwide and worldwide wire and radio communication service with adequate facilities at reasonable charges.”

The concept of universal service was reaffirmed, with the blessing of the telephone companies, under the sweeping deregulation of the landmark Telecommunications Act of 1996. Republicans call that law outdated as well.

Rural America Can’t Win Better Broadband If Their Providers Don’t Play

Decided not to participate in rural broadband funding programs.

The American Recovery and Reinvestment Act provided the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the U.S. Department of Agriculture’s Rural Utilities Service (RUS) with $7.2 billion to expand access to broadband services in the United States. Of those funds, the Act provided $4.7 billion to NTIA to support the deployment of broadband infrastructure, enhance and expand public computer centers, encourage sustainable adoption of broadband service, and develop and maintain a nationwide public map of broadband service capability and availability.

This first round of serious broadband stimulus was designed to help defray the costs of bringing broadband to rural areas where “return on investment” formulas used by large phone companies deemed them insufficiently profitable to service.

Remarkably, America’s largest phone companies declined to participate. In March 2009, AT&T and Verizon delivered their response to the Obama Administration through Bloomberg News:

Verizon Communications Inc. and AT&T Inc. may have this response to the U.S. government’s offer of $7.2 billion for high-speed Internet projects: Keep it.

Unlike the businesses that welcomed the $787 billion stimulus package approved by Congress last month, the two biggest U.S. phone companies have reservations. They’re urging the government not to help other companies compete with them through broadband grants or to set new conditions on how Internet access should be provided.

The companies have remained noncommittal as they lobby to shape rules for the grants.

“We do not have our hand out seeking government funds,” James Cicconi, AT&T’s senior executive vice president, told reporters March 11. While the company is “open to considering things that might help the economy and might help our customers at the same time,” he said AT&T’s primary focus for broadband is its own investment program.

Also declined to participate.

AT&T’s own financial reports illustrate its “investment program” was largely focused on its wireless services division, not rural broadband. Many other phone companies filed objections to projects they deemed invasive to their service areas, whether they actually provided broadband in those places or not.

When the final NTIA grant recipients were announced, the overwhelming majority were middle-mile or institutional broadband networks that would not provide broadband to any home or business.

The U.S. Department of Agriculture’s Rural Utilities Service managed the rest of the broadband grants and loans, and the majority went to exceptionally rural telephone companies, co-ops, and tribal telecommunications. AT&T did participate in one aspect of broadband stimulus — its legal team and lobbyists appealed to grant administrators to change the rules to be more flexible about how and where grant money was spent.

In the past year, both AT&T and Verizon have signaled their true intentions for rural landline service:

Verizon’s McAdam: Ready to pull the plug on rural landlines.

Verizon CEO Lowell McAdam: “In […] areas that are more rural and more sparsely populated, we have got [a wireless 4G] LTE built that will handle all of those services and so we are going to cut the copper off there,” McAdam said. “We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there and then I can focus the investment on that to improve the performance of it.”

AT&T CEO Randall Stephenson: “We have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America?,” Stephenson told investors earlier this year. “And we’ve all been trying to find a broadband solution that was economically viable to get out to rural America and we’re not finding one to be quite candid.”

More recently, Verizon has nearly disinherited its DSL service, making it more difficult to purchase (impossible in FiOS fiber to the home service areas). In states like West Virginia, it effectively slashed expansion and infrastructure investment as it prepared to exit the state, selling its network to Frontier Communications. AT&T has shown almost no interest expanding the coverage of its DSL service either. If you don’t have access to it today, you likely won’t tomorrow.

A good portion of the broadband stimulus funding provided by the government is actually in the form of low-interest, repayable loans. Despite rhetoric in the Republican platform about supporting public-private partnerships to expand rural broadband, the Republicans in Congress launched coordinated attacks on the Broadband Access Loan Program offered by the USDA’s Rural Utilities Service in the spring of 2011. Various right-wing pundits and pressure groups joined forces with several Republican members of Congress attempting to permanently de-fund the program, starting with $700 million in federally-backed loans in April, 2011. The loans were targeted to public and private rural telecommunications companies attempting to expand or introduce broadband service.

Attacks on the effectiveness of President Obama’s broadband campaign pledges in the Republican platform ring a little hollow when Republican lawmakers actively blocked the administration’s efforts to keep those promises.

Killing Community Broadband: Priority #1 for Providers With the Help of Corporate-Backed ALEC and State Politicians

AT&T’s Stephenson: Doesn’t have a solution for the rural broadband problem, so why try?

Stop the Cap! has repeatedly reported on the challenges of community broadband in the United States. Launched by towns and villages to provide quality broadband service in areas where larger companies have either underserved or delivered no service at all, publicly-owned broadband is often the only chance a community has to stay competitive in the digital age.

That goal is shared by the GOP’s platform, which states how important it is to connect “rural areas so that every American can fully participate in the global economy.”

Unfortunately, unless your local phone or cable company is providing the service, all too often they would prefer communities continue to receive no service at all.

AT&T is among the most aggressive phone companies lobbying state officials, often through the American Legislative Exchange Council (ALEC), to pass state laws hindering or banning community broadband development. ALEC supporters, overwhelmingly Republican, accept company-drafted legislation as their own and introduce it in state legislatures, hoping it will become law. Generous campaign contributions often follow.

In the past few years, AT&T and Time Warner Cable have been especially active in broadband backwater states like North and South Carolina and Georgia, where rural counties often receive nothing more than DSL service at speeds that no longer qualify as “broadband” under the Obama Administration’s National Broadband Plan. In North Carolina, Democratic state politicians well funded by Time Warner Cable helped push bills forward, but it took a Republican takeover of the North Carolina legislature to finally get those laws enacted. South Carolina presented fewer challenges for state lawmakers, despite protests from communities across the state bypassed by AT&T and other phone companies.

The efforts to de-fund broadband stimulus and tie the hands of communities seeking their own broadband solutions have done considerable damage to the rural broadband expansion effort.

Universal Service Fund Reform: Not Much Help If America’s Largest Phone Companies Remain Uninterested

The Obama Administration has also kept its pledge to reform the Universal Service Fund, recreating it as the Connect America Fund (CAF) to help wire rural America.

Hopes for rural broadband drowned in the cement pond.

In its first phase of broadband funding, $300 million dollars became available to help subsidize the cost of rural broadband construction. Deemed a “mild stimulus” effort that would test the CAF’s grant mechanisms, only $115 million of the available funding was accepted by the nation’s phone companies — all independent providers like Frontier, FairPoint, CenturyLink, Windstream, and smaller players. Once again, both AT&T and Verizon refused to participate. There is no word yet on whether the two largest phone companies in the country will also effectively boycott the second round of funding, estimated to allocate over $1.8 billion to expand rural broadband.

“Getting to 100 percent is going to be a very difficult long-term goal, given the size of the U.S. landmass and the huge expense to reach those final couple of percentage points,” John Horrigan of the Joint Center Media and Technology Institute told Brad Plumer.

Politics and provider intransigence seem to be getting in the way just as much as America’s vast expanse. Many conservative and provider-backed groups have called America’s claimed 94% broadband availability rate a success story, and don’t see a need to fuss over the remaining six percent that cannot buy the service (and pointing to a larger number that don’t want the service at today’s prices).

Beyond the partisan obstructionism and middle mile/institutional network “successes” that ordinary consumers cannot access, the real issue remains the providers themselves. You can lead a horse to water but you cannot make him drink.

It seems as long as AT&T and Verizon treat their rural landline customers as hayseed relatives they (and Wall Street) could do without, the rural broadband picture for customers of AT&T and Verizon will remain bleak at current stimulus levels regardless of which party promises what in their respective platforms.

Four of the nation’s largest phone companies — two former Baby Bells, two independents — have very different ideas about solving the rural broadband problem in the country. Which company serves your area could make all the difference between having basic DSL service or nothing at all.

Some blame Wall Street for the problem, others criticize the leadership at companies that only see dollars, not solutions. Some attack the federal government for interfering in the natural order of the private market, and some even hold rural residents at fault for expecting too much while choosing to live out in the country.

This four-part series will examine the attitudes of the four largest phone companies you may be doing business with in your small town.

AT&T’s real priorities are to satisfy Wall Street demands for regular revenue growth. Rural wired broadband just cannot compete with the margins the company earns on its enormously profitable wireless and ARPU-raising U-verse services. (Graphic adapted from original work of Mark Fiore)

Today: AT&T — More Rural Broadband? Don’t Call Us, We’ll Call You

AT&T CEO Randall Stephenson earlier this year declared expansion of its U-verse fiber to the neighborhood service “largely complete,” despite the fact almost half of AT&T’s customers only have access to much slower DSL service, or cannot receive any broadband service at all.

For those living in AT&T’s service areas, which include a large portion of the midwest, southern states east of the Mississippi, Connecticut, and parts of California and Texas, Stephenson has not inspired confidence the company is rethinking what is possible in rural broadband.

“We have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America?,” Stephenson told investors earlier this year. “And we’ve all been trying to find a broadband solution that was economically viable to get out to rural America and we’re not finding one to be quite candid.”

AT&T’s lack of confidence this year is in contrast with their bombastic rural broadband lobbying campaign of 2011, launched as part of an effort to win approval for its aborted merger with T-Mobile USA. The company sent slick talking points promoting the deal to community groups it supported with contributions, politicians it bought with contributions, and astroturf efforts it bankrolled with contributions.

The result was declarations like this from former Rep. Rick Boucher (D-Va.), who swept through Washington’s revolving door and came out on the other side working for AT&T-backed lobbyist-law firm Sidley Austin and serving as an “honorary chairman” of the industry-backed Internet Innovation Alliance:

Thousands of the smallest communities outside of urban areas either lack broadband service or have just one option that can be pricey for a relatively low connection speed, inadequate for modern business demands. The joining of AT&T’s and T-Mobile’s wireless spectrum will largely fill the gap and bring robust Internet connectivity to rural localities where wired infrastructure is cost prohibitive.

With the merger now nothing more than a bad memory, Stephenson’s interest in the innovation of Internet access quickly faded.

Last week, AT&T customers learned the company isn’t even interested in taking free money from the federal government and ratepayers to do better. Offered access to $115 million in broadband subsidies from the reform of the Universal Service Fund (USF), AT&T officials shrugged their shoulders and indicated they were not interested because they are not yet “ready” to participate.

Quinn

“AT&T is in the midst of evaluating its options for further rural broadband deployment,” said Robert Quinn, AT&T’s senior vice president of regulatory affairs wrote in a letter to the commission. “As our chairman stated last month, we are optimistic about AT&T’s ability to get more broadband into rural areas, particularly as the technology continues to advance. However, until AT&T finalizes that strategy, it cannot commit to participating in the incremental support program. ”

For communities like Orangeburg, S.C., that answer is not good enough. The community received an $18.65 million federal grant of broadband stimulus funds to develop high-speed broadband in an area where only 20-40 percent of residents have Internet service today. AT&T is the dominant phone company and offered the same non-committal response to Orangeburg’s pleas for better service that the  company gives to customers elsewhere.

While AT&T reports it is not yet ready to do better in rural South Carolina, it is very motivated to make sure nobody else does either, funding a massive lobbying effort in coordination with its friends at the American Legislative Exchange Council (ALEC) to pass a virtual ban on community broadband development across South Carolina.

Christopher Mitchell at Community Broadband Networks calls it “monetizing scarcity.” Orangeburg officials call it a big headache and are working around AT&T, frustrated with the phone company’s disinterest while it also helps build barriers to impede the community’s efforts to build its own network.

“If some of these other providers had a desire to serve these rural areas, they would have already been doing it,” said county administrator Bill Clark. “We are entering the broadband business because third-party providers are reluctant to provide the service.”

AT&T’s reluctance to accept USF money may have a lot to do with the company’s focus on its wireless network which is seen as a much more lucrative investment. Profit margins for barely-competitive wireless service remain sky high, and are growing higher as AT&T raises prices and the industry works to cut costs.

Even the company’s urban-focused U-verse network delivers opportunities for greater revenues from AT&T customers likely to buy additional services. Investing in DSL just does not pull in the same level of profits, and companies like AT&T will remain reluctant to expand rural broadband unless the government delivers a much larger government subsidy, according to Benjamin Lennett, a policy director at the New America Foundation.

“It underscores how flawed it is to rely on private companies to serve these rural areas where their margins are not going to be that high,” Lennett said.

Unfortunately for communities trying to work around AT&T’s roadblock, the company has made sure towns and villages building their own networks soon discover that road remains closed in more than dozen states thanks to  AT&T with the help from corporate groups like ALEC, who feed willing legislators bills often drafted by the corporations they are designed to protect.

Nearly 100 Frontier employees may be visiting Idaho’s unemployment offices by September.

On the second anniversary of Frontier Communications assuming control of landline operations in Idaho formerly owned by Verizon Communications, Frontier has announced plans to close its Coeur d’Alene call center this summer, putting nearly half of Frontier’s workers in Idaho out of work.

“There’s nothing wrong with the employees or the work they’re doing. It’s more about efficiencies,” Frontier’s senior vice president Steve Crosby told CDA Press. “What we’re trying to do is work through efficiencies, consolidations, really moving people around, having work groups working closer together.”

Those hoping to remain with Frontier will need to move to another state and accept a large pay cut if they want to keep their jobs. Other Frontier call centers around the country will assume the responsibilities of the 100 Idaho-based employees who face termination by Sept. 18, including one opening near Myrtle Beach, S.C., that will pay substantially lower salaries.

The closure will reduce Frontier’s workforce in Idaho almost in half. Crosby said Frontier had roughly 260 employees in the state as of last week.

Two years ago, Frontier was telling Idaho a very different story about its takeover of Verizon landlines.

“I think we’ll have better service for customers,” David Haggerty, then a Verizon manager staying with Frontier, told the Bonner County Daily Bee. “Frontier brings with it a small-town mentality. It used to be you were able to pay bills in town and make human contact. That was taken away by Verizon.”

In 2010, Haggerty promised the transition would have no impact on former Verizon workers now heading to work at Frontier.

“We focus on putting the customer first,” said Frontier’s regional manager Vickie Bullard said. “That’s one of the 11 value statements we have at Frontier.”

Some of Frontier’s customers in Idaho wonder if Frontier’s “value statements” are also being downsized.

“I just switched from Frontier to Time Warner Cable for my Internet,” says Scott Mead. “Frontier started out great in the beginning, but shortly after went downhill as issue after issue started.”

Mead reports his calls to Frontier’s national 800 customer support number, which promises 100 percent of the company’s workers are American-based, often left him flummoxed dealing with foreign-accented employees with poor English language skills.

The last one out can turn off the lights.

Another Coeur d’Alene customer endured bad service from Frontier before finally leaving, with the phone company’s collection agency chasing him not far behind:

“As far as I’m concerned Frontier can take a long walk off a short pier. When they first took over from Verizon, from whom we had good service, they sent out a service guy to get us back online. He installed the wrong equipment so another serviceman came out and replaced the wrong one with a bigger, better, and faster wrong one. Over the next 6 weeks we were down all but 12 days and we heard one excuse after another with nothing getting resolved.

So a month later, after switching companies, not only did we get a bill from Frontier for the entire 6 weeks but they charged us for several wrong pieces of equipment. When we tried to resolve the issues they simply sent us to collection and refused to talk. Se we ended up paying for over 4 weeks of service they did not provide and for 4 Internet boxes that the servicemen could not get to work.

I can only hope that Frontier has an office at the bottom of a honey bucket at a chili feed. Flippin crooks.”

One former Verizon/Frontier employee suggests the “efficiencies” Crosby is concerned with is paying call center workers less, and offering fewer benefits:

“Frontier closed a center in Elk Grove, Calif. back in June leaving 50+ people unemployed there,” he writes. “When Verizon sold their landlines and DSL to Frontier back in 2009 they only guaranteed the acquired employees jobs for two years. July 1, 2012 was the second anniversary of that acquisition. This does not surprise me at all. The leadership of both Verizon and Frontier is like any other large corporation. Bottom line is the new call center in South Carolina is cheaper to operate. Why pay people over 50K (this is including 401k, stock & medical benefits) when you can pay half that in a center that has no union.”

Another Idaho employee is bitter about the extra work Frontier employees managed for the company during its great billing and systems transition away from Verizon.

“We will be out of a job, after working massive amounts of overtime to transition this company to get them through the largest conversion in telecommunications history,” the worker shared. “They needed us to get them through it and now they don’t.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WMBF Myrtle Beach New Frontier Call Center 5-11-12.mp4[/flv]

Race to the bottom. Frontier Communications closes an “unneeded” 100-worker call center in Idaho that reportedly paid workers over $50,000 a year in salary and benefits while announcing a new, “much-needed” call center with 110 workers near Myrtle Beach, S.C. that will pay workers only $30,000 a year. WMBF in Myrtle Beach calls the new South Carolina call center a “success” for Horry County’s efforts to recruit new business to the area. Frontier applauded South Carolina’s “excellent business environment.” But that success comes at a cost to other workers in other states.  (2 minutes)

Broadband Backwater: Don't let AT&T and ALEC keep South Carolina broadband down.

AT&T and the corporate-funded front group American Legislative Exchange Council (ALEC) are making progress banning community broadband in South Carolina with the second reading of H.3508, the AT&T Profit Protection Act.

This bill has been debated in the state legislature since early last year, and despite protestations from local community leaders in broadband-impoverished areas of the state, AT&T’s money and lobbyists can buy a lot of support.  South Carolina cannot afford to have its broadband options limited. It remains among the worst states in the country for broadband adoption, with just a tad over half of all households hooked up to the Internet. The rest either cannot afford the prices incumbent providers charge, or in many cases, nobody is willing to provide the service.

With the passage of H.3508, South Carolina’s broadband future will effectively be left in the hands of Time Warner Cable, which has some presence in larger cities, and the former BellSouth, which is now AT&T. But unless you live in greater Charleston, Columbia, or Greenville, AT&T’s investment in your future has been limited to smatterings of slow speed DSL.

Despite claims that the “private sector” will provide, South Carolina remains a broadband afterthought for telecommunications companies in the state, especially outside of major cities. H.3508 stops communities from electing to drain the broadband backwater they are forced to endure and build better service other companies simply won’t provide.

You can’t discourage investment from providers who won’t invest in South Carolina’s broadband in the first place.

Use this tool to find your state senator and take a few minutes to call their office and let them know you oppose H.3508 and what it represents — broadband stagnation and corporate protectionism. Let them know you want broadband decisions for your community made in your community, not by a lobbyist for AT&T or the cable industry. Ask why any legislator would want to support a measure that would allow an out of state corporation to dictate what South Carolina can do about its own telecommunications future.

Ask them to stand up for you as a constituent and do the right thing.  AT&T, a multi-billion dollar corporation does not need their help. Broadband in South Carolina does!

Joe Roget has one word for South Carolina’s Broadband Availability Map: “nuts.”

The 72 year old resident of a small town in South Carolina was excited to read a new statewide broadband availability map showed his street was currently getting DSL service from one of South Carolina’s largest phone companies.  But that was news to AT&T, who provides landline phone service.

“They said they had no idea what I was talking about and that whatever map data I was looking at was totally wrong,” Roget reports to Stop the Cap! “The operator was frank with me, saying it was highly unlikely I would ever receive DSL from AT&T and the company was really not expanding DSL access any longer.”

Karen, a Stop the Cap! reader near Denmark, S.C., reported a similar story.

“The broadband map Connect South Carolina has gotten a government grant to produce is total fiction in my area and is little more than cable and phone company wishful thinking,” Karen reports.

Karen says not only does her street show DSL as readily available, but cable broadband as well.  Karen and her neighbors can get neither.

“‘Never have, never will’ seems to be the attitude unless we pay $20,000 to the cable company to extend wiring down the street,” Karen says. “The phone company doesn’t have time to even consider that, but their call center is nowhere near South Carolina so those people don’t care.”

Roget wonders exactly how Connect South Carolina, a chapter of the industry-connected Connected Nation group, got their data.

The answer: it largely collects it from the data providers volunteer themselves.

“Did anyone ever bother to use some of the millions of taxpayer dollars this group got to actually verify what the cable and phone companies handed out to make sure it was real?” Roget asks.

Darryl Coffey, an engineering consultant for the group, says he spends countless hours trying to verify the data providers submit to the group.

In South Carolina, I verify each of these platforms by going out into the field with tools, test equipment and data.  We refer to this process as “provider validation.”

Provider validation involves driving hundreds of miles following telephone and cable lines, or testing wireless signals in neighborhoods as well as in remote areas.

“I have basic phone service at my home, and I don’t know how Mr. Coffey can follow a phone line to determine if it also can provide me with DSL,” Roget says. “I could tell him, or anyone else at Connected South Carolina, it most certainly does not — had they asked.”

Roget is also upset that South Carolina’s legislature is interested in preventing local communities from deploying their own broadband networks to fill in the gaps where large telecommunications companies refuse to provide service. Only he wonders exactly how legislators will know there is a broadband gap if the group drawing the maps, based on what providers tell them, shows there isn’t a problem.

“What a scam,” Roget concludes. “An industry-backed group draws maps of data volunteered by the providers themselves that legislators use to prove there is no broadband problem in South Carolina and no need for towns and cities to build their own service.”

Karen has virtually given up on South Carolina officials representing the interests of South Carolina’s citizens.

“They look out for the companies, not the people,” Karen says. “It seems if we want better broadband, we will have to move somewhere else, preferably someplace that isn’t dumb or corrupt enough to let the broadband industry control our broadband future.”