Broadband Yes

Time Warner Cable is spending taxpayer dollars received from New Yorkers to expand cable service in rural areas of the state, but primarily for the benefit of affluent residents — some that have sought cable and broadband service for their rural estates and vacation homes for years.

An analysis of publicly-available data by the New York Public Utility Law Project (PULP) from an earlier $5.3 million state rural broadband expansion grant paid to Time Warner Cable found that 73 percent of the money was spent extending cable service in zip codes where median incomes are significantly higher than surrounding areas that remain unserved. Time Warner Cable is relying on New York taxpayers to cover about 75% of the construction costs.

PULP’s Gerald Norlander has spent months seeking more information about how Time Warner Cable and its presumptive new owner Comcast collectively plan to address rural broadband issues in the state, but Time Warner Cable has fought to keep most of its plans secret, including projects funded in part by taxpayers.

Broadband No

Norlander’s current research included an analysis of 53 rural expansion projects that were included in the last round of broadband grant awards. He found Time Warner interested in expanding in affluent communities like Grafton in Rensselaer County. The part of the community targeted for expansion has a 10% higher median income than the rest of the county.

In a letter to the state’s Public Service Commission, Norlander argues Time Warner Cable’s desire to keep its rural broadband plans a secret may run contrary to New York’s universal broadband service goal to bring broadband to every customer that wants the service.

Targeting service on more affluent areas can result in higher revenue as wealthy customers are more likely to choose deluxe packages of services and are unlikely to fall behind paying their bills. But such decisions can also become politically untenable when a seasonal resident can access cable service for their six bedroom summer home while middle-income residents with school children up the road cannot.

Time Warner Cable Arena – Charlotte, N.C.

Taxpayers and tourists in North Carolina will be on the hook for $33.5 million in improvements for the “outdated” 10-year old Time Warner Cable Arena in Charlotte.

The Charlotte Hornets will spend the public’s money over the next ten years renovating restaurants and bathrooms and make several other improvements inside the stadium. Such renovations may call upon professionals like those Cladding Painters.

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Time Warner Cable won the naming rights for the stadium by cutting a deal with the Hornets (then known as the Bobcats) to allow games to air on satellite and regional cable sports networks, especially Fox Sports Net South. The stadium is largely the financial responsibility of Charlotte-area taxpayers, but a wealthy basketball team and the area’s largest cable operator take most of the credit.

The city is contractually obligated to spend taxpayer dollars on renovations and city officials took credit for reducing the original request for $50 million down to $33.5 million. Deal critics contend taxpayers are footing the bill while the NBA team enjoys a free ride.

The city signed an agreement in 2005 that includes language compelling the city to be concerned with the image of the team and its sponsors. Specifically, the city agreed to maintain the arena as among the NBA’s “most modern” stadiums. Just a decade after opening, the Hornets contend the stadium no longer meets that obligation. Now taxpayers and tourists will pony up millions from a hotel/motel occupancy tax and a car rental tax to cover renovations, including those for tony, corporate-reserved hospitality suites.

Some city council members claimed to feel trapped into voting for the deal, which was approved in a 9-2 vote. The council’s two Republicans voted no.

“If we break a contract, who will believe our word?” at-large council member Claire Fallon, a Democrat, told the Charlotte Observer. “Who will believe us? I have to vote for it.”

But Republican councilman Ed Driggs believes the city has signed a sucker’s deal.

“Many don’t believe public money should be used to subsidize a for-profit business,” Driggs said. “How do we rationalize the terms of this? We pay all capital costs … and receive no proceeds. What kind of partnership is this?”

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Eyebrows were raised when several council members, including the mayor pro tem, voted in favor of the Time Warner Cable Arena deal but against a public works project potentially financed by the federal government to expand the city’s Gold Line streetcar public transit system. WBTV in Charlotte reports. (2:31)

A 2011 state law largely written by Time Warner Cable will likely keep Charlotte, N.C. waiting for fiber broadband that nearby Salisbury has had since 2010.

North Carolina is dominated by Time Warner Cable, AT&T and CenturyLink. Google and AT&T recently expressed interest in bringing their fiber networks to the home in several cities in the state, but neither have put a shovel in the ground.

Fibrant, a community owned broadband provider in Salisbury, northeast of Charlotte, not only laid 250 miles of fiber optics, it has been open for business since November 2010. It was just in time for the publicly owned venture, joining a growing number of community providers like Wilson’s Greenlight and Mooresville, Davidson and Cornelius’ MI-Connection. Time Warner Cable’s lobbyists spent several years pushing for legislation restricting the development of these new competitors and when Republicans took control of the General Assembly in 2011, they finally succeeded. Today, launching or expanding community broadband networks in North Carolina has been made nearly impossible by the law, modeled after a bill developed by the American Legislative Exchange Council (ALEC).

With fiber fever gripping the state, Fibrant has gotten a lot of attention from Charlotte media because it provides the type of service other providers are only talking about. Fibrant offers residents cable television, phone, and broadband and competes directly with Time Warner Cable and AT&T. Although not the cheapest option in town, Fibrant is certainly the fastest and local residents are gradually taking their business to the community alternative.

Charlotte, N.C. is surrounded by community providers like Fibrant in Salisbury and MI-Connection in the Mooresville area.

“A lot faster Internet speeds, a lot clearer phone calls,” said Sidewalk Deli owner Rick Anderson-McCombs, who switched to Fibrant after 15 years with another provider. His mother, Anganetta Dover told WSOC-TV, “I think we save about $30 to $40 a month with Fibrant and the advantages of having the speed is so much better.”

Julianne Goodman cut cable’s cord, dropping Time Warner Cable TV service in favor of Netflix. To support her online streaming habit, she switched to Fibrant, which offers faster Internet speeds than the cable company.

Commercial customers are also switching, predominately away from AT&T in favor of Fibrant.

“Businesses love us because we don’t restrict them on uploads,” one Fibrant worker told WCNC-TV. “So when they want to send files, it’s practically instantaneous.”

Fibrant offers synchronous broadband speeds, which mean the download and upload speeds are the same. Cable broadband technology always favors download speeds over upload, and Time Warner Cable’s fastest upstream speed remains stuck at 5Mbps in North Carolina.

AT&T offers a mix of DSL and U-verse fiber to the neighborhood service in North Carolina. Maximum download speed for most customers is around 24Mbps. AT&T has made a vague commitment to increase those speeds, but customers report difficulty qualifying for upgrades.

Time Warner Cable is a big player in the largest city in North Carolina, evident as soon as you spot the Time Warner Cable Arena on East Trade Street in downtown Charlotte.

Taxpayer dollars are also funneled to the cable company.

Time Warner Cable’s $82 million data center won the company a $2.9 million Job Development Investment Grant. Charlotte’s News & Observer noted the nation’s second largest cable company also received $3 million in state incentives.

When communities like Salisbury approached providers about improving broadband speeds, they were shown the door.

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WCNC-TV reports that with Google expressing an interest in providing fiber service in Charlotte, Salisbury’s Fibrant has been offering service since 2010. (2:57)

“Our citizens asked for high-speed Internet,” says Doug Paris, Salisbury’s city manager. “We met with the incumbent providers [like Time Warner and AT&T, and that did not fit within their business plans.”

Salisbury and Wilson, among others, elected to build their own networks. The decision to enter the broadband business came under immediate attack from incumbent providers and a range of conservative astroturf and sock puppet political groups often secretly funded by the phone and cable companies.

Rep. Avila, a ban proponent, meets with Marc Trathen, Time Warner Cable’s top lobbyist (right) (Photo: Bob Sepe)

Critics of Fibrant launched an attack website against the venture (it stopped updating in March, 2012), suggesting the fiber venture would bankrupt the city. One brochure even calls Stop the Cap! part of a high-priced consultant cabal of “Judas goats for big fiber” (for the record, Stop the Cap! was not/is not paid a penny to advocate for Fibrant or any other provider).

Opponents also characterize Fibrant as communism in action and have distributed editorial cartoons depicting Fibrant service technicians in Soviet military uniforms guarding Salisbury’s broadband gulag.

In January of this year, city officials were able to report positive news. Fibrant has begun to turn a profit after generating $2,223,678 in the revenue from July through December, 2013. Fibrant lost $4.1 million during the previous fiscal year. That is an improvement over earlier years when the venture borrowed more than $7 million from the city’s water and sewer capital reserve fund, repaying the loans at 1 percent interest. The city believes the $33 million broadband network will break even this year — just four years after launching.

Fibrant is certainly no Time Warner Cable or AT&T, having fewer than 3,000 customers in the Salisbury city limits. But it does have a market share of 21 percent, comparable to what AT&T U-verse has achieved in many of its markets.

Fibrant also has the highest average revenue per customer among broadband providers in the city — $129 a month vs. $121 for Time Warner Cable. Customers spend more for the faster speeds Fibrant offers.

Some residents wonder if Fibrant will be successful if or when AT&T and Google begin offering fiber service. Both companies have made a splash in Charlotte’s newspapers and television news about their fiber plans, which exist only on paper in the form of press releases. Neither provider has targeted Salisbury for upgrades and nobody can predict whether either will ultimately bring fiber service to the city of Charlotte.

Those clamoring for fiber broadband speeds under the state’s anti-community broadband law will have to move to one of a handful of grandfathered communities in North Carolina where forward-thinking leaders actually built the fiber networks private companies are still only talking about.

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WSOC-TV in Charlotte reports Salisbury customers are happy with Fibrant service and the competition it provides AT&T and Time Warner Cable. (2:12)

West Virginia has spent nearly three times more than it anticipated for each mile of fiber optics being laid by Frontier Communications as part of the state’s taxpayer-funded broadband expansion project, according to a new report.

The Saturday Gazette-Mail reports that state officials originally planned to spend $17,000 for each mile of fiber cable laid to community institutions including schools and libraries. Instead, it is paying $47,500 per fiber mile, more than double the industry average of $20,000.

Frontier Communications is getting at least $45 million in taxpayer dollars towards construction costs and will end up owning the completed fiber network that won’t directly deliver broadband service to a single home or business in the state.

West Virginia will make use of a 675-mile institutional fiber network when the project is finished, 25 percent smaller than the 900-mile network originally proposed.

State officials including Homeland Security director Jimmy Gianato have come up with some novel defenses for the cost overruns, blaming:

• The 2011 Japanese earthquake/tsunami that allegedly spiked fiber prices to as much as $50,000 per mile;
• Superstorm Sandy which delayed the project and caused $14 million in damage;
• The cost of environmental impact studies.

The state is in a hurry to spend down the remaining funds left over from the $126.3 million taxpayer grant before they expire September 30. The broadband project has been mired in controversy from almost the beginning, including allegations that major telecom company employees serving as consultants steered project managers to invest in expensive, oversized routers intended to serve college campuses that ended up installed in tiny community libraries.

State officials also found many of the institutions slated to receive fiber upgrades already had fiber service. That left officials scrambling to find any schools, libraries, hospitals — even prisons where taxpayer-funded fiber broadband would prove useful.

In the end, Frontier will be the biggest beneficiary of the project and state officials predict $4-8 million will remain in unspent funds when the project is complete.

“If people step back, they can see this monstrosity in all its true glory,” says Jan Huntser. “Private companies like Frontier don’t want taxpayer money building public fiber networks for homes and businesses because that represents unfair competition. Instead, Frontier pockets taxpayer money to build a private fiber network they will end up owning that taxpayers cannot access. Instead, we’ll keep using their slow DSL service.”

Huntser says if taxpayer money is spent to build fiber networks, taxpayers ought to be able to use them.

“None of this makes any sense,” Huntser adds. “Frontier tells friends to buy a satellite dish for broadband because they will never offer it while a library in that town has four terminals and enough broadband equipment to support a business with hundreds of employees. They can’t even understand how to make it work, so they still rely on their DSL service to run the Wi-Fi connection instead.”

West Virginia’s broadband future is up for hot debate in the state legislature as Internet haves and have nots fight over whether the state should spend money to bring broadband to those lacking it or improve service for those that do.

House Bill 2979, a bill to expand the broadband purview of the West Virginia Infrastructure and Jobs Development Council, has turned into one of the most contentious bills before the legislature this term. An amendment to redefine what speeds represent “broadband” and requiring the council to prioritize efforts on unserved areas has sparked the most debate.

Sen. Robert Plymale (D-Cabell) introduced and won support for an amendment that would discard the current provider-favored standard defining a community as “served” if customers can buy at least 200kbps service. Plymale favors adopting the federal broadband speed standard — 4/1Mbps as the bare minimum. Plymale also wants the state to devote most of its resources to getting broadband to rural areas that do not have the service today.

“If you’re going to compete in this world today, you have to have access,” Plymale told lawmakers. “Access has to be the number one item, and this amendment allows access to be the priority.”

Plymale

But other lawmakers representing constituents in communities that already have broadband, but receive inadequate speed and service, objected to Plymale’s amendment.

Sen. Herb Snyder (D-Jefferson) claims Plymale’s amendment would restrict the council’s ability to manage broadband resources and require it to spend most of its funding on wiring smaller communities at the cost of service upgrades that could reach more people. Approximately 85,000 West Virginians still have no broadband access other than satellite.

“It’s entirely appropriate to use taxpayer dollars to help and assist people to get broadband service and get on the information superhighway rather than upgrading those already on it,” argued Sen. Mitch Carmichael (R-Jackson), who also happens to also be an employee of Frontier Communications.

Much of the state’s broadband infrastructure spending has been devoted to institutional and middle mile networks that consumers and small businesses cannot directly access. Spending on “last mile” infrastructure makes the difference between getting broadband service or being told it is unavailable.

But Sen. Snyder argues satellite broadband already offers access to the entire state, so broadband speed improvements were more important.

“As we speak the entirety of West Virginia is bathed in 5Mbps satellite broadband service,” Snyder said. “So we’re already surpassing that standard in the entire state, unless you’re in a cave where you can’t get the signal.”

Getting the best broadband bang for the buck was a priority for Sen. Clark Barnes (R-Randolph). He wanted to make sure any amendment would not prevent the council from spending money in areas where satellite service was available.

“If we have 10 folks up in Possum Hollow that have no access to broadband, would they receive priority over the thousand people who only have 2Mbps service?” he said.

The answer would seem to be yes under Plymale’s amendment.