Stop the Cap! has learned Frontier Communications is laying the groundwork to upgrade selected areas of its network to deliver fiber-to-the-neighborhood service to some of its customers, perhaps as early as the last quarter of 2012.  Documents obtained by Stop the Cap! indicate the company is negotiating with AT&T to license U-verse technology to deliver the service.

The documents suggest Frontier’s 2011 negotiations with AT&T to resell mobile phone service to Frontier customers have now expanded to include the development of improved broadband at a cost less likely to antagonize Wall Street and the company’s investors.

Sources familiar with Frontier’s operations tell Stop the Cap! although the company will continue to support Verizon-acquired FiOS fiber-to-the-home networks in Indiana and the Pacific Northwest, Frontier plans to rely on less-expensive alternatives for the rest of its service areas and has no plans to further expand the FiOS branded fiber-to-the-home service.

For the most rural customers, Frontier appears ready to partner with HughesNet to resell a satellite broadband product to customers considered unsuitable for basic DSL service.  Frontier will continue to invest and upgrade its traditional 1-3Mbps ADSL service in rural states like West Virginia, Idaho, Nevada, and South Carolina.  The company is also planning to upgrade selected cities to VDSL — a more advanced form of DSL needed to support a U-verse offering.  Perhaps one major target for such an upgrade is Frontier’s largest service area — Rochester, N.Y., where Time Warner Cable has systematically picked off Frontier’s landline customers for years with offers of faster broadband speeds and better package pricing.

Frontier's headquarters in Rochester, N.Y.

Frontier’s insistence customers don’t need faster broadband speeds, a statement made repeatedly by Frontier Rochester general manager Ann Burr, has cost the company market share, especially for high speed Internet service.  Although Frontier claims to offer speeds up to 10Mbps in Rochester, the company only manages to deliver 3Mbps in some of the city’s nearest suburbs.

An upgrade to U-verse, while not as technologically advanced as fiber to the home service, would help Frontier defend its position in more urban markets, especially as cable companies upgrade their own infrastructure to market faster broadband speeds.

AT&T U-verse sells broadband at speeds of 3, 6, 12, 18, and 24Mbps.  Time Warner Cable, Frontier’s largest competitor in upstate New York, sells speeds of 3, 10, 20, 30, and 50Mbps.

Frontier Communications has been preoccupied integrating its newest customers, acquired from Verizon Communications in 2009, with their existing IT and operations systems.  The company recently touted it completed transitioning former Verizon operations, financing, and human resources with its own information technology network nine months ahead of schedule.

Frontier has been reorganizing some of its internal departments in preparation to launch several aggressive initiatives in 2012, especially in its efforts to roll-0ut more competitive broadband — considered a landline lifesaver —  in areas where the company has lost a lot of business to its cable competitors.  The company also intends to spend tens of millions upgrading its regional and national broadband infrastructure and continue extending DSL service to presently unserved rural areas.

Another planned improvement is an overhaul of Frontier’s website, which has brought complaints from customers for delivering inaccurate information, making online bill payment cumbersome, and being difficult to navigate.

Documents obtained by Stop the Cap! also reveal the company has made progress on its plans to pitch AT&T cell phone service to Frontier customers.

Frontier signed a resale agreement with AT&T last fall and is on track to begin limited trial offers of AT&T cell phones, smartphones, and tablets — with full access to AT&T’s network of 29,000 Wi-Fi hotspots during 2012 with a more widespread rollout in 2013.  Frontier plans to offer customers the option of a single bill for Frontier and AT&T services.

Frontier’s Karen Miller told Stop the Cap! the company had no comment about today’s story.

Cities left out of Verizon Communications’ fiber to the home upgrade FiOS are telling the Federal Communications Commission to reject any wireless spectrum swap between the phone company and the nation’s largest cable operators unless Verizon commits to getting the fiber upgrade done in their cities.

Coordinated by the Communications Workers of America, which represents many Verizon workers, elected officials and community groups in Boston, Baltimore, and the upstate New York cities of Albany, Syracuse, and Buffalo collectively blasted the proposed swap as bad news for consumers.  On a city-by-city basis, they each filed comments with the FCC opposing the deal unless the Commission mandates Verizon complete fiber upgrades as a condition for the approval of the spectrum swap.

Buffalo’s argument:

For the past few years, we have watched as Verizon Communications has built its all fiber FiOS network in 10 suburban communities that ring our city. In those communities, we have seen what happens when Time Warner Cable, our local cable monopoly, competes head-on with Verizon’s FiOS to provide video and broadband services. Consumers benefit from competitive choice; small businesses benefit from truly high-speed connections to suppliers and customers; schools and hospitals benefit from education and health-related applications; communications workers benefit from the jobs building, maintaining, and servicing networks; and families and communities benefit from the 21st century jobs and expanded tax base.

But the residents and small business owners in Buffalo have not been able to reap these benefits. To date, Verizon has chosen not to deploy its all-fiber FiOS network to the more densely-populated city of Buffalo. The proposed Verizon Wireless/cable company partnership would cement this digital divide and foreclose the possibility of effective high-speed broadband and video competition in our city. Verizon Wireless is a subsidiary of Verizon Communications. We are deeply concerned that as a result of the new joint marketing agreement, Verizon will no longer have the incentive to invest in an all-fiber network that competes with Verizon Wireless’ new partner, the cable company. Therefore, to promote high-speed broadband investment and video competition, especially in heavily minority and lower-income areas like the city of Buffalo, the FCC should include as a condition for approval of this Transaction a requirement that Verizon continue to invest in and build-out its FiOS network to currently unserved areas that are inside its traditional telephone service area footprint, including the city of Buffalo and the surrounding areas.

Cole

In response, Verizon confirmed it never had any intention of wiring any of those cities for fiber service.  Multichannel News reports:

But a Verizon exec points out that those cities are all areas that were not scheduled to get FiOS, whether or not the cable spectrum deal goes through. As Verizon has pointed out, the company decided back in 2010 that it was going to build out the franchises it had already secured and target those 18 million customers in and around New York City, Washington, D.C., and Philadelphia, rather than spend any more of its shareholders money in a wider buildout. The above cities were not in those franchise areas.

Baltimore City Council member William H. Cole accused Verizon of leaving the city of Baltimore behind in a letter he addressed to the Commission this week:

High-speed, fiber-optic networks are vital for economic competitiveness. Currently, Verizon’s FiOS is the only all fiber-optic commercially-available network for businesses and households. Other advanced industrialized nations have already deployed fiber-optic networks on a large-scale; they recognize that high-speed fiber is the competitive infrastructure of the 21 st century. Much of the suburban areas outside of Baltimore already have FiOS. The City of Baltimore will never get a fiber-optic network if this deal is approved, which concerns me greatly. I am not willing to see Baltimore permanently relegated to the wrong side of the digital divide.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WBGH Binghamton Verizon Workers Protest 03-22-12.mp4[/flv]

Workers for Verizon Communications continued public protests outside of Verizon facilities in upstate New York as their unions complain the company has still not reached a negotiated contract agreement covering landline employees.  Protestors in Buffalo and Binghamton told local media they fear customer service operations will be outsourced overseas, other jobs will be cut, and benefits will be slashed.  “Verizon is not a hurting company,” noted one protestor in Binghamton.  Verizon counters its landline operations must become more competitive to compete with wireless services, although the largest provider in the country is Verizon Wireless, which has almost no unionized employees.  WBGH in Binghamton reports. (Loud Volume Warning!)  (2 minutes)

When Massena, N.Y. town supervisor Joseph D. Gray balked at Time Warner Cable’s demands for a 15-year franchise renewal agreement, especially after the cable company never bothered to show up at a hearing on the subject, he thought he could send a message by supporting a renewal expiring after just one year.

But there was a reason Time Warner never bothered to show up to defend their performance in northern New York State over the last decade of increasing rates and unwanted channels shoveled at subscribers — they did really have to answer to local officials.

Gray assumed playing some hardball with the cable company might get their attention and bring them to the table to discuss the demands of local Massena residents he hears from all the time.  At the top of the list is a-la-carte cable — paying only for channels you want.

No deal.

Gray

Mr. Gray has since admitted in conversations with the Watertown Daily Times he is frustrated by the town’s inability to effect “any real change.”

This despite the state cable franchise law which declares communities have the right to establish and negotiate “cable-related community needs” as part of the final contract with cable operators.

In fact, the cable industry has spent millions lobbying federal and state governments to deregulate their operations, even though most communities are served by just one cable operator.  While phone companies have made limited progress competing in larger urban areas, most of upstate New York is left choosing between a satellite provider or a cable company — usually Time Warner Cable.

That lobbying paid off in the 1990s when the federal government swept away considerable government oversight of cable operations.  While municipalities technically still control the basic franchising process, those dissatisfied with service from an existing provider rarely find other companies willing to take over.  That leaves Massena stuck with Time Warner Cable, who isn’t giving an inch on how they package their programming.

“We can make some gains for the community. Can we get free service for a couple of municipal buildings? Probably,” Mr. Gray told the newspaper. “They continue to say there’s nothing they can do about programming, there’s nothing they can do about bundling.  That’s from the programmer.  Until we get … a la carte, where people get the channels they want, we’re never going to satisfy people.”

Time Warner Cable’s latest series of rate increases and perceived snubs has rubbed some New York residents the wrong way, and one upstate city has retaliated by extending the cable operator’s franchise by just one year.

Cable customers from Lowville to Massena, adjacent to the Canadian border, have been venting about the cable company’s decision to increase cable rates for the second time this year across the region.  The anger is nearly universal, whether one is a conservative tea party member in Norwood or a liberal Democrat in Watertown.

But the strongest message heard by Time Warner officials was delivered by Massena Deputy Supervisor Albert N. Nicola, who helped shoot down the cable company’s request for a 15-year franchise renewal, and approved a one year renewal in its place.  The vote was 5-0.

“They’re asking for a 15-year extension, which is absolutely totally outrageous,” Mr. Nicola told the Watertown Daily Times. “We’ve got to be crazy for even thinking about that.”

That is no Christmas present for Time Warner, whose cable franchise agreement in Massena expires this year on Dec. 25.

Town board members noted the cable company didn’t bother show up for franchise renegotiation discussions and were reportedly not in attendance for this week’s vote.

“It’s tough to ask questions of a group that isn’t here,” Nicola said.

Massena wants some changes in the local cable lineup, more responsiveness to local residents, and more involvement in the community by the cable company.

Residents want lower rates.

Wayne D. Mihalyi of Lowville called Time Warner the poster child of corporate greed.  Tim Donahue of Lowville wondered how much more he and his neighbors would take from the cable operator:

How long are we going to continue having Time Warner Cable increase their rates without hesitation? Isn’t anybody out there looking out for us?

We just had all our rates increase 7.5 percent in January 2011. They cried poverty and increases in dealing with the networks. Yet another small increase occurred (because of taxes) somewhere between June’s bill and October’s.

And now we just received yet another 8 percent increase within the same year? They must have seen how Netflix did it and said, “What the heck, if they can do it so can we.”

This time we’re supposed to believe it is because of their significantly increased cost of programming. Don’t forget, we also got socked a whopping 16.5 percent increase in January of 2010. When is this nonsense going to end? I am beginning to understand the reason for some of the protesting going on. This is outright greed. There is no other explanation or words for it. They have to know that seniors haven’t even had a 1 percent raise in three years.