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N.Y. Gov. Andrew Cuomo Vetoes Public Rural Broadband Feasibility Study as the Unserved Struggle On

No service.

Despite New York Gov. Andrew Cuomo’s $500 million, 2015 Broadband for All initiative which guaranteed broadband service for anyone  that wanted home internet access, five years later rural broadband gaps continue to plague the state.

A bill that would set aside funds to complete a feasibility study to launch a state owned broadband provider of last resort was quietly vetoed by Cuomo at the end of 2019. Assembly member Aileen Gunther (D-Monticello) sponsored the bill after hearing scores of complaints about terrible or non-existent internet access from constituents in her district, which covers the parts of the rural Catskills region north of the Pennsylvania border.

Gunther complained that despite the governor’s broadband initiative, private phone and cable companies were still ignoring rural customers, leaving them with slow DSL service or no internet access at all. Gunther’s bill was a first step in potentially allowing the state to step in and provide service to New Yorkers unable to get broadband from any private provider.

New York has spent over $500 million on its Broadband for All program and made Charter Spectrum an integral part of its broadband expansion plans in return for approval of its 2016 acquisition of Time Warner Cable. But a growing number of the governor’s critics claim the program has failed to deliver on its mandate, stranding thousands of New Yorkers without internet service and tens of thousands more with just one option — unpopular satellite internet access.

Gunther

Gunther was upset to learn that New York was prepared to hand over more than a half billion dollars to large private telecom companies including Frontier Communications and Verizon while not being willing to spend a penny to fund projects to reach New Yorkers for-profit companies could not be dragged kicking and screaming to service.

“We’re all spending millions and millions of dollars on privately owned internet service providers,” said Gunther. “In return for promises, a lot of our communities do not have access to the internet, or if they do have access to the internet, it’s slow and these companies are not, I think, fulfilling the promises made.”

The rural broadband problem is not resolved in the Finger Lakes or Southern Tier regions of New York either. This week, Yates County announced it was joining an effort by Schuyler, Steuben, and Tioga counties, and the Southern Tier Network, to complete a broadband feasibility study to improve internet access in the four counties. Fujitsu Broadband will manage the study and hopes to have results by June. The study will target the pervasive problem of inadequate broadband service in the region, which includes crucial tourist, winery, and agricultural businesses vital to New York’s rural economy.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York in 2015.

Gov. Cuomo has called such initiatives “well-intentioned” but was non committal about contributing more state funds to construct new networks or underwrite further expansion of existing ones. New York is about to begin its annual hard-fought budget negotiations in hopes of completing the state budget by April. Finding funding for such projects will probably require a powerful political advocate able to wrestle funding for further broadband improvements.

Even after spending $500 million, New York’s rural broadband problem has not been resolved. That offers insight into the merits of other state broadband programs, which often limit annual broadband expansion funding to under $30 million annually.

Those still without service are likely in high-cost service areas, where each customer could cost over $20,000 to reach. New York’s Broadband for All program relied on a reverse auction that required private companies to bid to service each unserved address. No wireline provider bid on any high-cost service areas, leaving Hughes Satellite as a subsidized satellite provider of last resort. But inadequate broadband mapping left scores of rural New Yorkers behind without even the option of subsidized satellite internet access.

Verizon Puts 5G Wireless Home Broadband Expansion on Hold Until Late 2020

Dunne

Verizon will hold off on expanding its millimeter wave 5G wireless home broadband service until at least the second half of 2020, citing equipment availability issues.

Ronan Dunne, executive vice president and group CEO of Verizon’s Consumer Division, told attendees at a Citi investor’s conference that Verizon’s initial introduction of Home 5G was just a market test, and until newer high-powered wireless routers arrive that will be capable of more robust reception of the very high frequencies the service works on, Verizon will not expand the service further.

Dunne called the next generation of 5G home receivers “key” to Verizon’s wireless home broadband strategy. Dunne said the new equipment will let consumers receive more distant and weaker 5G wireless signals, allowing Verizon to expand coverage of the service to more households. The current generation of 5G receivers were designed for use in smartphones, which hampers in-home reception quality.

Verizon initially promised to serve about one-quarter of the United States with its wireless home broadband service, eventually capable of supplying 500/200 Mbps and more to subscribers. But Verizon’s goal to reach over 30 million households will take the company as long as seven years to reach.

Dunne also warned Verizon is prioritizing 5G coverage in urban commercial areas instead of suburban, rural, and residential neighborhoods. Verizon’s core 5G network will target dense urban areas, including commercial shopping, business, and entertainment venues like concert halls and sports stadiums where the company measures the highest traffic demand it hopes to satisfy with 5G. Verizon’s home 5G broadband service piggybacks on Verizon’s 5G mobile network, which means it will only be available in neighborhoods where Verizon has deployed its network of small cells.

“It’s very much a mobility strategy, with a secondary product of Home [5G], rather than us changing our overarching mobility deployment to try to accelerate Home at the expense of the overall 130 million customer base,” Dunne explained.

Verizon hopes to offer customers 5G-capable mobile phones for as little as $600 in the coming year and getting widespread adoption of 5G by Verizon customers is a long-term goal for Dunne. He added that once 5G becomes more widely available, Verizon and other wireless companies will consider shutting down Wi-Fi hotspots in favor of 5G.

“In a world of 5G millimeter wave deployments, we don’t see the need for Wi-Fi in the future, because we have a more secure network environment,” Dunne said. “Our view is that when fully deployed there are substantial environments where public Wi-Fi will be eliminated in favor of millimeter wave.”

Telecom Industry Slashes Investments for 2020-2021; Focus on Profit Margins New Priority

Telecom companies are cutting investment in their networks despite promises by Republican members of the FCC that repeal of net neutrality would inspire increased investment.

Charter, Comcast, AT&T, and Verizon have surprised Wall Street with dramatic cutbacks in spending and investment in their networks, with one provider admitting improving profit margins are now a bigger priority.

As a result, Wall Street analysts are revising down capital expenditure (Capex) estimates in reports to their investor clients.

“Comcast and Charter missed [third quarter] expectations for Capex and guided 2019 lower than previously planned,” reported Nomura in a note to investors. “We have lowered our combined 2019 Capex forecast for Comcast and Charter from $14.6 billion to $14.2 billion.”

AT&T’s drop in network spending was the most dramatic among the country’s top telecom companies. AT&T has declared an end to fiber broadband expansion and slashed spending forecasts from the $23 billion the company spent this year to as little as $20 billion next year, despite claiming it would dramatically expand its 5G service to over two dozen cities over the next 12 months.

In a recent conference call with investors, AT&T CEO Randall Stephenson said “now it’s time to reap the rewards of what we’ve been doing [and] begin to reward to shareholders these investments that we’ve been making over the last few years.”

Over the next three years, AT&T will pay shareholders $45 billion in dividends and spend $30 billion on buying back shares of AT&T stock to retire debt racked up buying Time Warner (Entertainment). In fact, AT&T will devote 50-75% of its free cash flow exclusively on retiring shares of AT&T stock, which is expected to benefit shareholders.

Verizon reported spending $4.4 billion in the third quarter on network upgrades, approximately $100 million less than expected. That is a concern because Verizon is trying to expand its costly 5G network, but is not devoting the investment dollars required to make such an upgrade happen without cutting investments elsewhere in the company. Verizon has told Wall Street analysts to expect stable Capex spending of $17-18 billion annually for 2019-2021. That will either mean Verizon’s 5G expansion will be modest or the phone company will have to slash investments in other areas, such as wireline, fiber to the home, or business services.

Many analysts expect 5G will be a top spending priority for AT&T and Verizon over the next several years, leaving little room in budgets for upkeep of the company’s legacy landline networks or its other products. Charter and Comcast have effectively stopped spending on large upgrade projects, also as part of improved profit-taking.

The spending realities are in direct conflict with the promises made by Republican members of the FCC. Trump-picked FCC Chairman Ajit Pai repeatedly claimed that banishing net neutrality would lead to significant increases in investment by the nation’s top telecom companies. In fact, the opposite has happened.

Verizon Customers Get a Year of Disney+ for Free

Phillip Dampier October 22, 2019 Competition, Consumer News, Disney+, Online Video, Verizon No Comments

Some Verizon customers can receive 12 free months of Disney+, starting Nov. 12.

All Verizon Wireless Unlimited customers, new FiOS Home Internet, and 5G Home Internet customers qualify for the offer.

Customers must enroll for the offer between Nov. 12, 2019 and June 1, 2020. One subscription per account. Must be 18 years of age or older and a legal U.S. resident. After the 12-month promotional period, customers will be charged the prevailing subscription rate of $6.99+tax/month until canceled. Charges will be billed to your Verizon account. For New Mexico residents, Disney+ ends automatically after 12 months. Verizon is not zero-rating Disney+ usage, so it will count towards your total data usage.

Customers can get more information here: http://verizon.com/disneyplus.

The deal with Disney+ is an exclusive among U.S. wireless carriers. The Wall Street Journal reports under the latest agreement, Disney and Verizon will share the cost of providing the content to the carrier’s subscribers, according to a person familiar with the arrangement.

“Giving Verizon customers an unprecedented offer and access to Disney+ on the platform of their choice is yet another example of our commitment to provide the best premium content available through key partnerships on behalf of our customers,” said Verizon Chairman and CEO Hans Vestberg. “Our work with Disney extends beyond Disney+ as we bring the power of 5G Ultra Wideband technology to the entertainment industry through exciting initiatives with Disney Innovation Studios and in the parks.”

Verizon and T-Mobile: Poor Neighborhoods Won’t Get 5G

Verizon and T-Mobile are redlining their up and coming 5G wireless services to target wealthy neighborhoods and business districts while shunning the urban poor.

Dave Burstein examined the coverage maps of both carriers in cities like Manhattan and found a distinction in the service available in wealthy southern Manhattan and what upper Manhattan neighborhoods including Harlem and the mostly Latino Washington Heights are getting. For both companies, 5G is not much of a priority for Brooklyn either.

“I do not think T-Mobile specifically intended to exclude people of color, but that seems to be the practical effect,” Burstein wrote.

(Image: Dave Burstein)

Ronan Dunne, executive vice president & group CEO of Verizon Consumer confirmed that Verizon will be targeting 5G service to areas where it makes the most economic sense. He said that more than half of Verizon Wireless customers will continue to get 4G LTE-like speeds, with the rest eventually upgraded to 5G service.

“So we’ve taken a very clear view that we want to have both a coverage strategy and a capability strategy. And a very large majority of the volume of data that we carry on our networks goes to large, dense urban environments,” Dunne told investors recently. “So from a population point of view, it’ll be significantly less than half of the customers [getting 5G]. But from a data traffic point of view, it’s significantly more than half. So when it comes to the ability to use 5G as a significant capacity enhancement, there’s more of an opportunity to leverage that in the urban areas.”

In other words, Verizon plans to target population dense urban areas for 5G service the most, because that is where most of its data-loving customers live and where they network’s cost effectiveness may be the highest. Although the geographic coverage of 5G will seem relatively small, the population density of areas targeted for 5G service is not.

Dunne

Verizon has been touting its forthcoming nationwide 5G network, but Dunne has hinted to investors that the devil will be in the details. Not every customer will have access to Verizon’s super fast millimeter wave 5G service. In fact, at least half the country will be serviced by existing 4G LTE cell towers upgraded to provide 5G service on lower frequencies capable of reaching far beyond the coverage area offered by millimeter wave service. But that will also mean a much larger number of customers will share the same 5G network connection, potentially dramatically reducing speed and performance. Dunne said the performance of this type of 5G service “will approximate a good 4G service.”

Burstein notes in real terms, this will mean a significant difference in network speed. Verizon’s millimeter wave service will be capable of delivering 1-2 Gbps, while Verizon’s 5G upgrade of its existing 4G cell towers will deliver speeds in the low hundreds of megabits per second, potentially even slower on crowded cell sites.

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