The general counsel of the Federal Communications Commission predicts your landline will stop working within the next ten years, abandoned by companies like AT&T and Verizon in favor of wireless service in rural America or fiber (if you are lucky) in the cities.

Phillip “Did you know your landline will be dead within ten years?” Dampier

Sean Lev, the FCC’s general counsel, said in a blog post that “we should do everything we can to speed the way while protecting consumers, competition, and public safety.”

But the FCC seems to be abdicating its responsibility to do exactly that by singing the same song some of America’s largest phone companies have hummed since they decided to get out of the copper landline business for fun and profit.

Traditional boring telephone service is regulated as a utility — a guaranteed-to-be-available service for any American who wants it. Hundreds of millions of Americans do, especially in rural areas where America’s cell phone love affair is tempered by dreadful reception, especially in mountainous areas. Oh, and the nearest cable company is ten miles away.

AT&T and Verizon — two of America’s direct descendants of the Bell System, just don’t want to pay to keep up a network most of urban America doesn’t seem to want or need anymore. In addition to a dwindling customer base, providing a regulated legacy service means having to answer to unions and government-types who make sure employees are fairly compensated and customers are given reasonable service at a fair price. The alternatives on offer from AT&T and Verizon carry no such regulatory (or union) baggage. Prices can change at will and customers have no guarantee they will receive service or have someone to complain to if that service is sub-standard.

While in the past regulators have taken the lead to make sure telephone companies meet their obligations, the new FCC seems to spend most of its time observing the business agendas of the companies themselves.

Lev implied to the Associated Press the FCC is not exactly leading the parade on the future of landlines. He seems more comfortable trying to analyze the intentions of AT&T and Verizon’s executives:

Most phone companies aren’t set to retire their landline equipment immediately. The equipment has been bought and paid for, and there’s no real incentive to shut down a working network. He thinks phone companies will continue to use landlines for five to 10 years, suggesting that regulators have some time to figure out how to tackle the issue.

Lev

AT&T is more direct: It wants to switch off all of its landline service, everywhere, by 2020. Customers will be given a choice of wireless or U-verse in urban areas and only wireless in rural ones. Where U-verse doesn’t serve, AT&T DSL customers will be in the same boat as Verizon customers on Fire Island: pick an expensive wireless data plan, satellite fraudband, or go without.

Verizon prefers a “gradual phase-out” according to Tom Maguire, Verizon’s senior vice president of operations support.

Verizon claims it has no plans to shut down working service for customers, but it does not want to spend millions to continue to support infrastructure fewer customers actually use. That means watching the gradual deterioration of Verizon’s copper-based facilities, kept in service until they inevitably fail, at which point Verizon will offer to “restore service” with its Voice Link wireless product instead.

For voice calls, that may suffice for some, especially those comfortable relying on cell technology already. But at a time when the United States is already struggling with a rural broadband problem, abandoning millions of rural DSL customers only makes rural broadband an even bigger challenge. The wireless alternative is too variable in reception quality, too expensive, and too usage capped.

Schneiderman

The New York Attorney General has some strong words for Verizon Communications:

“Verizon [must] divest those portions of its New York franchise where it is no longer willing to continue providing wireline service and replace Verizon with another carrier that will provide wireline service.”

Attorney General Eric Schneiderman is more than a little concerned with Verizon’s plans to abandon offering landline service on the western half of Fire Island and potentially other areas further upstate to satisfy the company’s wireless business strategy.

In a hostile 13-page filing directed to the New York Public Service Commission, Schneiderman’s office accused Verizon of abdicating its responsibility to provide universal access to high quality landline service in favor of moving customers to inferior Verizon Wireless service.

“Verizon is asking the Commission to depart from a century of telephone service regulation, which had as one of its fundamental principles, universal wireline telephone service for all customers,” Schneiderman wrote.

In return for a guaranteed monopoly, profits, and a secure franchise area across portions of New York, telephone companies like Verizon historically agreed to offer phone service to any customer who wanted it. State and federal universal service rules provided subsidies to phone companies to reach their most rural or expensive-to-reach customers.

The goal, Schneiderman argued, was for every resident in New York to have home phone service, enabling them to communicate with their doctors, families, schools, friends and businesses, as well as to send for police, fire and ambulance assistance in an emergency.

Verizon’s intended replacement, Voice Link, represents a downgrade in service even worse than hundred-year old copper wire “plain old telephone service,” according to the attorney general. Schneiderman called Verizon’s Voice Link inferior and its thick 10-page terms, conditions, and disclaimers “legalistic,” leaving consumers without services they previously received or imposing significant new burdens and obligations.

The issues cited by Schneiderman:

Voice Link Service “is not compatible with fax machines, DVR services, credit card machines, medical alert or other monitoring services or some High Speed or DSL Internet services.” Customers in western Fire Island and other rural parts of New York have no FiOS or cable modem Internet providers to switch to, so those who rely on these services have no alternatives if switched to Voice Link.

Because Voice Link “may not be compatible with certain monitored home security systems,” customers’ homes and businesses will be at greater risk from flooding by burst plumbing, fire or burglars. In the case of plumbing emergencies, visit Carlson Plumbing Company website for reliable solutions and prompt support.

Although wireline customers whose service is suspended for nonpayment can still reach a 911 operator in emergencies, suspension of Voice Link “will prevent ALL Service, including any 911 dialing and associated emergency response services. Customers may also lose the ability to receive or place calls, even to 911, if they fail to “promptly notify Verizon” of a change in their address, email, or credit card expiration date.

Customers must “defend, indemnify and hold harmless Verizon from and against all claims … for infringement of any intellectual property rights arising from use of Voice Link or its software.”

Voice Link Service “does not allow the Customer to make 500, 700, 900, 950, 976, 0, 00, 01, 0+, calling card or dial-around calls (e.g., 10-10-XXXX),” so customers will be unable to use such pay-per-call information services. Voice Link Service “does not allow the Customer to accept collect calls or third number billed calls. The Company will not bill any charges on behalf of other carriers. [Customers] must have an International Calling Plan in order to make international calls. Wireline customers are able to subscribe to toll and international calling plans provided by other carriers, and have these and other third-party service charges included on their Verizon bills.

Verizon Voice Link

Voice Link Service “is subject to the availability of adequate wireless coverage throughout your home, and is not available in all locations.”

Unlike wireline service, which supplies its own power over the copper wiring, Voice Link uses customers’ house current to operate. Verizon has not disclosed how much customers’ electric utility bills will increase to power the Voice Link device. Also, if electric power is interrupted, Customers may have to “reset or reconfigure equipment prior to using” Voice Link. This may be difficult for some physically limited or technologically unsophisticated customers to perform.

During power interruptions, the wireless Devices used in Voice Link are battery operated. Although the Devices include a rechargeable battery back-up that provides only 36 hours of standby power and up to 2.5 hours of talk time in the event of a commercial power outage, “[a ]fter the battery is exhausted, the Service (including 911 dialing) will not function until power is restored.”

After the expiration of a one year replacement warranty for the battery back-up included with customers’ wireless Device, customers “are responsible for replacing the back-up battery as needed,” but Verizon has not disclosed the cost of such replacement batteries.

Wireline customers purchase their own telephones from competitive manufacturers, but the Voice Link device is only supplied by Verizon, which continues to own it. Thus, customers will have to pay Verizon to repair the device if “such repair or maintenance is made necessary due to misuse, abuse or intentional damage to the Device.” Verizon has not disclosed what [the] repair or replacement might cost customers in such event.

When wireline customers end their service with Verizon, they have no equipment to return to the company. However, Voice Link customers who cancel their service “are responsible for returning their Wireless Device to [Verizon] in an undamaged condition. Failure to return the Device within 30 days … may result in [Verizon] charging [customers] an unreturned equipment fee.” Verizon has not disclosed the amount of this fee.

Schneiderman accused Verizon of dragging its feet on repairs on Fire Island and forcing Voice Link on customers as the only available alternative.

“It is clear that Verizon is leveraging the storm damage from Sandy as part of its long-term strategy to abandon its copper networks by substituting Voice Link for [landline] service on western Fire Island and forcing customers to accept wireless Voice Link wherever it does not build FiOS,” Schneiderman argued. “Verizon’s failure to make prompt repairs to its Fire Island facilities during the seven months following Sandy left the Commission little choice but to provide temporary approval of Voice Link so that customers would have some form of telephone service during the 2013 summer beach season. However, this ‘temporary approval’ should not be expanded to allow Verizon to avoid its obligations permanently, on Fire Island or anywhere else in New York.”

Schneiderman wants the PSC to force the issue with Verizon, and not on the preferred terms of its senior executives.

“Rather than allow Verizon to provide inadequate Voice Link service to Fire Island and other New York customers, the Commission should compel the company to either maintain its wireline network throughout its franchise territory or sell
those parts where it is unwilling to do so to another provider that will provide adequate service,” Schneiderman wrote.

Attention broadband planners: Although broadband deployment strategies differ around the world, a new report decisively concludes there is only one network technology proven to meet the demands of broadband users both today and tomorrow: a national fiber optic network.

BuddeComm’s new report, “Global Broadband – Fibre is the Infrastructure Required for the Future,” looked at every technology from variations of DSL, cable broadband, satellite, and wireless and found only fiber optics capable of handling the capacity of data and applications that will be required to run cities and countries from today onwards.

The report found that fiber optic deployment faced a range of challenges, despite its obvious technological advantages. Political obstacles are among the biggest roadblocks facing fiber networks. A combination of concerns about the cost of wiring service to procrastination has held back many national broadband improvement projects, including those in Australia and New Zealand. Incumbent commercial providers in North America have also actively attempted to block public fiber networks to protect their own commercial interests.

BuddeComm concludes America’s biggest broadband problems come as a result of incumbent providers exercising undue market power and influence over elected officials to protect their commercial interests at the price of the public good.

The report concludes that decisive political leadership is essential to overcome many of the artificial obstacles which slow down or stop fiber broadband deployments.

“One can argue endlessly about what technologies should be applied and at what cost, but we believe that all signs point to Fiber-to-the-Home (FTTH) networks as the best future-proof solution,” the report concludes. “One can debate about whether it is needed in five, ten or fifteen years – and again that depends on some of the differences between countries – but in the end FTTH is the best final solution for all urban and many regional premises.”

The 21st century digital economy is powered by robust broadband, and growing demands for faster speeds are coming from the healthcare, energy, media and retail sectors. Healthcare uses include file transfers of high-definition medical imagery and teleconferencing. Smart Grid technology is being deployed by many power companies to develop more efficient means of distributing and conserving energy. Media and mass entertainment providers are moving to high bandwidth online video, and the retail economy markets products and services over modern broadband networks.

The implications for the global economy are enormous. More than 120 countries have formal broadband policies and many consider high-speed Internet access a national priority. In the last century, North America and western Europe were considered the dominant economic players, in part because they established and maintained infrastructure to support their manufacturing and service economies. But many of these countries are falling far behind in the 21st century digital economy, where countries like Japan and Korea, parts of eastern Europe, the Baltic States, and Scandinavia are taking the lead in infrastructure deployment.

“Broadband infrastructure is perceived by all to be critical for the development of the digital economy, healthcare, education, e-government and so on,” the report notes. “From a financial and investment point of view broadband infrastructure should be treated as utility infrastructure.”

The interests of the private sector are not always aligned with the public interest, particularly when it comes to spending capital on upgrading network infrastructure. The report recommends that governments step in and build a public fiber highway system on which all providers can offer services.

“A National Broadband Network (NBN) should be based upon an open network as this makes it possible to offer the basic infrastructure on a utility basis to content and service providers,” the report concludes.

The governments of Australia, New Zealand, Israel, and others are already moving in that direction, setting up broadband authorities to build fiber infrastructure dismissed as too expensive or unnecessary by commercial providers who answer first to financial markets, shareholders, and private banks.

Under most NBN plans, providers get access to the fiber network at wholesale rates and help recoup its cost.

Australia’s National Broadband Network is on the way.

Where politicians answer to the whims of the private sector before considering the public good, the report finds:

• Private cable companies, particularly in North America, will continue to support and incrementally upgrade their HFC networks, but new cable operators are more likely to deploy fiber at the outset, not coaxial copper cable. Network costs, efficiencies, and reliability are all in fiber’s favor. In Europe, cable broadband is regularly losing market share to faster fiber technology. The share of all broadband subscribers held by HFC networks across Europe fell from 26% in 2002 to about 11% by mid-2013;
• Private telephone companies that do not face robust competition will continue to rely on their existing DSL networks. In cities and larger towns, expect phone companies to eventually upgrade to VDSL fiber-to-the-neighborhood (and its variants) in the largest markets with the most competition. Rural areas will continue to receive less robust DSL service, particularly where no cable competitor provides service;
• Rural areas may receive fixed wireless or satellite broadband service, but this is not a solution for more populated areas.

Although the global economic downturn stalled many fiber network deployments and suppressed demand, the report finds broadband usage and demand for faster speeds are quickly accelerating. Some other highlights:

• Asia continues to be the leader in fiber optic deployment;
• Sufficient customer demand to make the investment in fiber worthwhile is increasingly likely once fiber service becomes widely available in countries like the Netherlands, China, France, Israel, Switzerland, Norway and Sweden;
• International connectivity in Africa remains a challenge, but fiber bandwidth is expected to more than double by 2014;
• The Middle East will see rapid growth in fiber broadband once international capacity constraints are eased.

Obtaining a copy of the full BuddeComm report is prohibitively expensive for consumers, priced at $995.

A freak spring snowstorm has stolen CenturyLink’s thunder.

A freak spring snowstorm has covered up much of the anticipated publicity for CenturyLink’s plans to launch a trial of gigabit fiber broadband for 48,000 customers in western Omaha.

The phone company announced the pilot project this week amid a historic spring storm that dumped several inches of heavy, wet snow on parts of Nebraska. The media devoted most of its attention to the weather.

CenturyLink admits its gigabit fiber service is a pilot project designed to test consumer demand and the tolerance of local officials for limiting upgrades to selected neighborhoods and customers most likely to buy the service. CenturyLink has priced the gigabit service comparably to Google Fiber — $79.95 a month if bundled with other CenturyLink products. Standalone broadband is nearly twice as expensive — $149.95 a month.

“CenturyLink is pleased to offer its Omaha customers ultra-fast broadband speeds up to 1Gbps to help keep pace with growing broadband demands,” said Karen Puckett, chief operating officer. “This demonstrates our commitment to deliver communications solutions that provide our customers with the technology they need to enhance their quality of life, now and into the future.”

CenturyLink will not be building the fiber network from scratch. The company already runs a 100Gbps middle-mile/institutional fiber network in Omaha that reaches certain business clients and serves as a conduit for CenturyLink customer traffic. CenturyLink will supplement that by using the remnants of its predecessor’s long-gone Qwest Choice TV service. The company will spend millions to run fiber connections to homes and businesses, but around 9,800 residents formerly served by Qwest’s television service will be able to sign up for CenturyLink Lightspeed Broadband as early as Monday. Others may have to wait until as late as October.

CenturyLink now sells up to 40Mbps speeds in Omaha, with a 300GB monthly usage cap. The company has not said if it intends to apply a usage limit on its fiber customers.

The phone company’s largest and fastest competitor is Cox Cable, which sells up to 150/20Mbps service for $99.99 a month.

Cox Cable cannot match CenturyLink’s speeds at the moment, but does not think most Omaha residents need or want gigabit fiber.

“It is important to note that our most popular Internet package remains the one that provides speeds of 25Mbps, which meets the needs of the majority of customers,” said Cox spokesman Todd Smith. “We will continue to talk with our customers and invest in product enhancements to provide an optimal broadband experience.”

Only around 12% of metropolitan Omaha will have access to the experimental fiber service, primarily those living in West Omaha. The network will bypass residents that live further east. The boundaries of the forthcoming fiber network are notable: West Omaha comprises mostly affluent middle and upper class professionals and is one of the wealthiest areas in the metropolitan region. Winning a right to offer service on a limited basis within Omaha is an important consideration for telecom companies like CenturyLink.

AT&T, Verizon, CenturyLink and other telecommunications companies are seeking deregulation that would end universal service mandates that require companies to build their networks in every neighborhood, rich and poor.

Cable and telephone companies have taken careful note Google Fiber is being allowed to provide service only where demand can be found — a significant change in long-standing municipal policies that demand cable and phone companies provide access to nearly every resident.

CenturyLink delivered a “between the lines” message to local officials when it suggested it might expand its fiber network elsewhere in Omaha and beyond, but only after evaluating the project for “positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.”

In other words, keeping zoning and permit battles (and residential complaints about construction projects) to a bare minimum, allowing the company the right to choose where it will (and won’t) deploy service, and making sure people will actually buy the service are all the key factors for fiber expansion.

AT&T said much the same thing when it vaguely promised a gigabit fiber network to compete with Google in Austin.

Google may have unintentionally handed their competitors a new carrot: deregulate us in return for fancy fiber upgrades that customers crave.

In perspective: CenturyLink’s fiber trial will only impact about 12% of the total population of metropolitan Omaha, primarily in and near affluent West Omaha.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WOWT Omaha CenturyLink Gigabit 5-1-13.flv[/flv]

WOWT in Omaha spent less than a minute reporting on CenturyLink’s forthcoming gigabit fiber trial. A spring snowstorm preoccupied most of Omaha’s media instead.  (1 minute)

Verizon Communications has filed separate requests with the New York State Public Service Commission that would report customers’ payment histories to credit reporting agencies, share your payment history with competing providers, and increase phone bills statewide to recoup expenses related to construction costs.

Verizon Wants to Influence Your Credit Score

One of the most substantial changes proposed by Verizon is the deregulation of privacy requirements that limit the amount of information the phone company can share with credit reporting agencies about your past payment history and whether you could represent a credit risk to the next telecommunications company you choose to do business with.

New York regulators originally enforced limits on how much information Verizon could share and with whom. Generally, the rules now state the phone company can only share your payment history with other telephone companies, such as in the case of moving to an area served by a different provider or if you choose to sign up with a competitor. Providers use this information to decide if they will require a deposit before connecting service.

Verizon claims the current rules do not go far enough to protect the company from deadbeats who bounce between unregulated telecom providers (wireless, Voice over IP, and cable telephone service) and Verizon. The company is asking the PSC to:

• to report final unpaid undisputed accounts of its local exchange customers to credit reporting agencies,
• to engage in full file reporting with the NCTUE, a special credit reporting service created by and for cable, telephone, and other utility companies to track customer payment histories (i.e., reporting monthly on all payment history for all customers), and
• to engage in full file reporting with Equifax, Experian and TransUnion should Verizon choose to do so in the future.

Late phone company payments appearing on a consumer’s credit report can be devastating to a consumer’s general credit score, which can affect credit lending decisions, home purchases, apartment leases, insurance rates, and employment prospects. Disconnected, unpaid accounts turned over to an independent collection agency may already appear on credit reports, but Verizon late-payers who still have service with the company might be affected much sooner.

Verizon hopes the change will convince customers to pay Verizon first instead of last or not at all:

“Consumer reporting agencies serve an important function by enabling businesses to avoid bad-debt costs and by preventing consumers, in a competitive market, from hopping with impunity from one company to another, accumulating unpaid debts at each step of the way,” Verizon argues in its regulatory filing. “In that way, information obtained from consumer reporting agencies reduces bad-debt costs that would otherwise have to be passed on to consumers who do pay their bills. Further, consumers who know that their credit scores will be reported will be less likely to default on payments; conversely, consumers who feel secure that such data will not be reported will be more likely to believe that moving to another provider is an acceptable alternative to paying bills.”

Verizon Seeks New Fees, Rate Increases

Verizon customers in New York will soon see higher phone bills if Verizon’s appeal to raise certain rates and tack on a new monthly service fee is approved:

Municipal Construction Surcharge: To cope with a declining number of landline customers, Verizon is seeking the imposition of a new $0.99 surcharge on all residential and business customers (except Lifeline) to help recoup the costs of relocating Verizon lines in public rights-of-way to prevent interference with street maintenance, repairs, or public construction projects. Verizon is also mandated to remove lines or other equipment that present a potential danger to public safety or health. Because Verizon has lost half of their landline customers in New York since 2006, the costs incurred by Verizon per remaining customer have increased dramatically, Verizon argues. In 2006, the company claims the average cost for line relocation was $10.79 per customer. Today, the company says the cost has risen to $31.01 annually.

Verizon seemed unconcerned about the impact the new fee might have on customers who could use it as an excuse to abandon landline service.

“Verizon needs to recoup its losses where it can,” said Verizon’s general counsel Keefe B. Clemons. “Moreover, customers have competitive alternatives and can choose other providers if they are dissatisfied.”

Other Service Charges and Rate Hikes:

• Verizon is seeking increases in the non-recurring Service Charge and the Central Office Line or Port Charge for business customers;
• Verizon seeks a $3 rate increase for its legacy ISDN service, which still serves a declining number of business customers;
• Verizon also seeks a 50 cent a month increase for maintaining a non-published number. The current rate ($2.50) has remained unchanged since 2005 and Verizon claims the increase is required to “keep up with inflation.” The company said its new rate would still be lower than AT&T in Connecticut ($4.99/month) or Time Warner Cable ($3.75/month);
• Verizon is discontinuing its Busy Verification and Interruption Service, primarily because it does not work with most of its competitors.

Verizon says these rate changes are necessitated by a marked decrease in the number of customers keeping their Verizon landlines. Since New York still requires Verizon to serve every part of its designated service area, the current financial situation for the company’s landline service division is untenable. The company argues its investment in FiOS and other network upgrades more than outweigh the amount of revenue the company is earning from the declining number of landline customers. Verizon did not mention the far brighter financial performance of its wireless division Verizon Wireless, not subject to the PSC’s regulatory requirements.