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Des Moines Welcomes Fiber Competition for Mediacom and CenturyLink

The capital city of Iowa will soon get citywide access to gigabit service from a new competitor when MetroNet fires up its fiber to the home network beginning in the spring of 2022.

MetroNet, based in Indiana, has developed a lucrative business competing with some of America’s lesser known telecom companies, which have generally offered poorer service and slower speeds. When MetroNet cuts the ribbon on its gigabit fiber network, it will compete with usage-capped cable operator Mediacom, which Consumer Reports has bottom rated for at least a decade, and underfunded phone company CenturyLink, which has struggled to keep up with cable operator upgrades.

Des Moines, Iowa

According to the Des Moines Register, the fiber overbuilder will invest $70 million in its Des Moines network, and will be the third local competitor for internet, phone, and video service. The company traditionally undercuts competitors on regular pricing and at least matches their introductory pricing. In Des Moines, Mediacom offers new customers gigabit speed for $79 per month, which almost doubles to $139.99 when the promotion ends. CenturyLink’s limited fiber network starts at $65 a month, but also rises significantly after the promotional pricing ends. MetroNet will charge $60 a month for gigabit speed with a $100 debit card rebate, with prices increasing after the sixth month to $69.95 for the next 12 months. After the 18th month, regular pricing ($89.95) will apply.. MetroNet does not impose any data caps or usage based pricing.

MetroNet already offers service in Davenport, Ames, and Bettendorf, and has similar networks under construction in Ankeny, Urbandale, Gilbert, Grimes, Johnston, Clive, Le Claire, Nevada and Mason City — all in Iowa.

Google Fiber also has a nearby presence in West Des Moines. The city is constructing a fiber network that Google will license to provide its fiber internet service to residents in that area.

MetroNet received significant assistance from “red-tape-cutting” city officials, and the network will use existing rights-of-ways, with cables placed on poles and underground. MetroNet expects construction to take up to three years to complete, and residents can follow the company’s progress on a special website.

KCCI in Des Moines reports on MetroNet’s entry into Iowa’s largest city. (1:59)

Maine Raises the Bar on Public Broadband: Will Fund Projects Offering 100/100 Mbps

Maine’s broadband internet authority is proposing major changes to win public financing of broadband projects in the state, demanding better speeds and performance and giving more Maine communities the potential to construct their own public internet projects.

The ConnectMaine Authority (ConnectME), which traditionally modestly funds a variety of smaller scale internet projects in the state, wants to think big now that it has a budget over fifteen times its original size. With at least $15 million to spend this year and potentially tens of millions in federal broadband funding to manage, courtesy of Congress and the Biden Administration, the authority wants to make certain future projects can deliver the scale and service consumers need in the 21st century digital economy.

In April, ConnectME’s board voted to propose changing the criteria for broadband funding awards, now insisting that projects be capable of delivering at least 100/100 Mbps service, which is four times faster than the FCC’s current minimum definition of downstream broadband. The board hopes the faster speeds will be future-proof and more realistic of what consumers need to telecommute and access online classes, streaming video, and other high bandwidth services. The result of the proposed standards would likely require all future projects to be fiber to the home, although historically the vast majority of broadband projects funded by ConnectME in the past have been fiber to the home.

The authority has also proposed expanding the definition of what represents an “unserved/underserved” area qualified to receive public funding to include any address that lacks access to at least 50/10 Mbps service, up from the current standard of 25/3 Mbps. Such a change would likely open up funding in areas where only DSL service or wireless internet is currently available. Most cable operators can meet the new standard, so their territories would likely remain closed to public funding. Opposition from the state’s telephone companies was almost instant, however, represented in comments from Ben Sanborn, executive director of the Telecommunications Association of Maine, a state telecom lobbying group.

Sanborn considers the proposed changes negative because public dollars could end up funding competitors in areas already served by lower speed providers.

“Arguably, there are going to be a whole bunch of areas in the state that will be eligible for funding either from ConnectME or with federal dollars,” Sanborn told the Press Herald. “Our concern with that is that it is going to create a situation of overbuilding existing networks,” which could leave currently unserved areas out of getting any funding for service.

At present, about 11% of Maine homes still have no internet access, mostly in rural areas. Traditionally, telephone companies or co-op telecom providers are the most likely to provide rural internet service, but the costs to reach those not currently served can be prohibitive. Cable operators have been the least likely to extend service in rural areas, and cash-strapped telephone companies have been reluctant to replace rural copper wire networks that can extend for miles with fiber optics, just to reach a few dozen homes. As broadband penetration increases, the cost to reach remaining unserved homes typically rises as they are often the most costly to reach. Subsidy funding can make a considerable difference when determining the cost/benefit analysis of expanding service to these homes.

The authority is also hoping to inspire existing providers to adopt 100/100 Mbps as the new broadband speed minimum across the state, which it claims will meet the needs of customers. For cable providers, that likely will not happen until upgrades to DOCSIS 4.0 are implemented, unlikely in the short term. Cable broadband networks are designed to deliver much faster downstream speeds at the expense of uploads.

The newly available funds are likely to achieve a significant increase in the number of rural homes served, but probably will not be enough to achieve 100% penetration.

ConnectME plans a public hearing to discuss the proposed changes on May 13, with a final vote scheduled for later this month.

Altice USA’s Optimum Selling Gigabit Service for $45 a Month… With a $200 Prepaid Visa Card

Altice USA is pushing hard to grab market share away from Verizon FiOS — its biggest competitor in the northeastern U.S., with a new customer promotion that offers a year of gigabit broadband speed for $45/month, as well as a $200 prepaid Visa gift card just for signing up.

To qualify for this rate, you must be a new Altice customer (or a customer that disconnected Altice service for at least 30 days). To get the gift card, you must be a new customer and have not received an earlier gift card from Altice in the last 12 months. This offer is good for residents of New York, New Jersey, and Connecticut.

The Bill Breakdown:

  • $50/mo for 1 gigabit service (up to 940 Mbps download/up to 50 Mbps upload) + $5/mo discount for signing up for paperless billing and autopay (total equals $45/mo)
  • $10/mo optional gateway modem/router rental fee
  • $3.50/mo mandatory “Network Enhancement Fee”
  • Your out the door price is $58.50/mo if you use their gateway, $48.50/mo if you bring your own.

Customers can also choose a 500 Mbps tier for $35 a month with similar fees.

If you sign up, you will also be offered the option of multiple TV packages, including a Basic TV package of 50 channels for $15/mo or a Core TV package of 210 channels for $25/mo. Home phone service is also available in this promotion for $10/mo. A bundle including gigabit internet, Core TV and home phone service is priced at $80/mo. There is no installation fee for customers that can manage their own inside wiring if needed.

20% of Charter Spectrum Customers Now Exceed 1 TB of Usage Every Month

Almost 20% of Charter Spectrum’s broadband-only customers now consume over 1 TB of data per month, with the average cord-cutting Spectrum customer now reaching 700 GB of usage.

Charter CEO Thomas Rutledge revealed the company’s increasing usage figures on a conference call with investors this morning. Rutledge pointed to a spike in pandemic-related, at-home video streaming, but also an explosion in video conferencing traffic from work-at-home customers. Video traffic constitutes the majority of consumer broadband traffic in the United States, and as video quality improves, so does the amount of data each customer consumes.

Recent pressure from some in Washington to increase upstream capacity has been noticed by company officials but largely dismissed. In fact, Rutledge claimed Spectrum had no capacity issues that it could not address with incremental capacity upgrades and neighborhood node splits.

“We don’t have any immediate need to expand the capacity of the plant,” Rutledge said, noting that Charter still has room to grow after adopting DOCSIS 3.1 technology. Rutledge added that with the majority of traffic still firmly originating from downloads and streaming, incremental network improvements could allow the company to boost some speeds, but only if market demand for it emerges.

Rutledge noted the company has the capacity to expand its existing infrastructure to 1.2 GHz by expanding network bandwidth. DOCSIS 3.1 can support multi-gigabit download speeds and 1,000 Mbps for uploads. Charter, along with many other cable companies, has been slow to move towards the next cable broadband standard, DOCSIS 4.0, which would exponentially increase speeds and capacity even further.

Another potential method of curtailing usage growth could come from data caps or usage-based billing, but Charter’s efforts to rid itself of its 2016 agreement not to impose data caps until at least 2023 (if ever) in return for approval of its merger with Time Warner Cable and Bright House Networks was withdrawn by the company after receiving significant opposition. The agreement’s expiration date remains May 2023.

Despite the usage growth, Charter’s chief financial officer Christopher Winfrey told investors the impact on the company’s capacity and costs were insignificant and remained confident Charter’s costs to deliver broadband service and expand it would continue to decline overall in the years ahead.

Frontier Exits Bankruptcy on Friday; Company to Focus on Gradual Fiber Upgrades

Frontier Communications is scheduled to announce its emergence from bankruptcy reorganization as early as Friday, beginning a new era with a reduced debt load, new leadership, and a plan to retire a considerable amount of its copper wire network in favor of fiber optics over the next decade.

“Frontier is ready to set a new course as a revitalized public company. Through the restructuring process, the company has stabilized its business and recapitalized its balance sheet, while making significant progress on the early stages of implementing our initial fiber expansion plan,” said John Stratton, incoming executive chairman of the board. “Frontier’s success with the Fiber-to-the-Home pilot program, which upgraded more than 60,000 locations from copper to fiber optic service in 2020, is just one example of the important work already underway. Frontier’s future is bright. I’m eager to work closely with our new board, our CEO Nick Jeffery, and the rest of the leadership team to build the new Frontier.”

As part of its reorganization, Frontier shed nearly $10 billion in debt, most attributable to its earlier buying spree of castoff landline customers formerly served by AT&T and Verizon. The company’s budget busting 2016 acquisition of Verizon service areas in California, Texas, and Florida was called “a textbook case of how not to do an acquisition,” by The Dallas Morning News

For at least a decade covering 2010-2020, Frontier was regarded as one of the worst phone companies in America in consumer surveys. Most of its legacy customers still suffer with Frontier’s dilapidated and deteriorating copper wire network and the slow speed DSL service barely supported on it. Speeds of 1-3 Mbps maximum are still common in some places, even in urban areas. Frontier’s acquisition of Verizon FiOS and AT&T U-verse service areas in states like Indiana, Washington, Connecticut, Florida, Texas and California gave a minority of customers access to pre-built fiber to the home networks, but Frontier’s notoriously poor switchover from Verizon and AT&T’s billing systems to their own effectively drove off hundreds of thousands of formerly loyal customers.

Under the leadership of former CEOs Maggie Wilderotter and Dan McCarthy, Frontier dragged from one quarter to the next, promising improvements that failed to materialize for most customers. The company’s $10.5 billion acquisition of landlines in California, Texas and Florida was particularly costly as the company sold bonds offering astonishing 10.5-11% interest rates to investors to cover more than $5 billion in debt coming due for repayment. A year after the Verizon deal, a half million Frontier customers left for good and the company lost $262 million.

Frontier’s latest fiber plan is to target upgrades in its legacy service areas, noted in blue on this map. These areas are all almost entirely served by copper wire, provide slow speed DSL, and are long overdue for fiber upgrades. Frontier will also expand fiber in its acquired service areas, represented by other colors on the map. Note that Frontier sold its Pacific Northwest region, marked by the red box, to Zipply Fiber, which also plans to scrap Frontier’s copper wire network in favor of fiber. (Map courtesy of Light Reading)

By the time bankruptcy was inevitable, Frontier was saddled with billions in debt and no financial ability to embark on fiber upgrades the company should have committed to a decade ago. Almost all of its existing fiber footprint was acquired from other companies.

Stratton

Frontier’s new management includes John Stratton, a former Verizon executive. Stratton believes Frontier’s future depends on the company expanding its fiber footprint. In 2020, it put that plan to the test by expanding fiber to the home service to 60,000 additional homes in a pilot project proving Frontier can plan and execute fiber upgrades on time and on budget. But a closer look at the numbers shows the majority of homes Frontier “upgraded” were brand new. Of the 60,000 homes, 44,000 were located in new housing developments or were unwired previously. These “greenfield” locations are typically easier to provision and much less expensive to service than pre-existing homes where Frontier first needs to decommission its existing copper wiring and replace it with fiber optics. Only around 16,000 pre-existing homes saw copper wire replaced with fiber in so-called “brownfield” locations.

For Frontier to succeed, it will need to move a lot more copper customers to fiber optics to remain competitive in the marketplace. Currently, Frontier serves approximately three million fiber homes and 11 million copper homes. Frontier is expected to announce fiber upgrades for an additional six million homes and target about 85% of its footprint to be serviced by fiber… eventually.

Some proposals hint the company could take five years or more to complete upgrades at the same time independent fiber to the home providers, next generation satellite internet, and wireless home 4G/5G internet plans are expanding. Much of Frontier’s service area is serviced by cable companies already providing high speed internet. Frontier’s plan assumes it will capture about 40% of the market — a tall order in communities like Rochester, N.Y., where dominant cable provider Charter Spectrum is assumed to have 70+% of the home broadband market. When competing fiber providers enter the market, Spectrum often slashes promotional pricing to $30 a month for 400 Mbps internet service for two years. Spectrum will probably offer similar pricing in newly competitive markets to retain customers threatening to cancel service and switch to Frontier.

Frontier plans to discuss its exit from bankruptcy and where the company will go in the future in a webcast presentation this Friday, April 30, 2021 at 10:00am ET.

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