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Cuomo Administration Capitulates on Affordable Broadband Law; State Laws Cannot Regulate Broadband Pricing

Cuomo

As expected, New York’s efforts to lower broadband pricing through a state mandate has been effectively killed in a Brooklyn federal court, putting an end to Governor Andrew Cuomo’s efforts to require providers to offer a $15 broadband tier to income-challenged state residents.

U.S. District Judge Denis R. Hurley, who signed a preliminary injunction preventing the mandate from taking effect on June 15, signaled the concept was likely unlawful in a memorandum attached to the injunction. Several telecom companies challenged the mandate in a lawsuit heard in Hurley’s courtroom, claiming states have no regulatory authority to set broadband terms or pricing. Hurley was clearly persuaded in their direction, and was pessimistic the state could ever show a legal way to regulate internet pricing, something currently reserved to the FCC. As a result, a settlement has been proposed dropping the affordable pricing mandate.

Hurley was also moved by arguments from several smaller New York providers that claimed the new mandate would force them to sell service below cost. Empire Access, a fiber to the home overbuilder based in Prattsburgh, filed a declaration with the court threatening to cancel a major expansion project to wire customers in Livingston and Broome counties, including the city of Binghamton, if the mandate was implemented, because it would likely lose federal funding.

Because of the state’s definition as to who would have qualified for the affordable broadband tier, many smaller companies in rural, economically challenged area of upstate New York claimed they would face substantial economic losses to their businesses. Empire claimed it would lose “approximately $2 million per year,” Heart of the Catskills claimed top-line revenue would decrease $1,364,000 annually, Delhi Telephone claimed it would lose at least $90,000 per month, and the Champlain Telephone Company notified the court that “nearly half (48%) of its existing broadband customers will qualify for discounted rates,” causing the company to lose money on each customer.

“While a telecommunications giant like Verizon may be able to absorb such a loss, others may not,” Judge Hurley wrote in his order.

Gov. Cuomo bristled after learning of the lawsuit, threatening to revoke the franchise of any company that refused to implement the  state’s affordable broadband program. But the governor has made empty threats before, including a promise in 2018 to revoke the merger of Charter Communications and Time Warner Cable because the company failed to live up to the deal commitments it made to state regulators. A settlement was eventually reached between the cable giant and the state, and it appears a settlement between the plaintiff telecom companies and the state will also end this dispute and lawsuit. It appears the state has capitulated and plans to walk away from the affordable broadband proposal, although it reserved the right to appeal the case.

Stop the Cap! predicts the state will work with larger providers to increase public knowledge of the companies’ existing affordable internet programs, which usually have similar qualifications to the affordable internet law Cuomo proposed. Cuomo Administration officials will also likely lobby the Biden Administration to toughen federal oversight of broadband service and suggest a possible federal mandate for an affordable service tier and a return to net neutrality under a regulatory framework that opens the door for future price and service regulation.

The court decision signals states the solution to broadband affordability will not be found in state laws or mandates that attempt to regulate broadband pricing, at least until the current federal law changes.

$50 Emergency Broadband Benefit Is A Windfall for Telecom Companies, a Headache for Consumers

Confusion, frustration, and fine print are all a part of the deal signing up for the $50 Emergency Broadband Benefit, customers complain.

The Biden Administration’s efforts to help economically challenged Americans with their broadband bills is actually a windfall for some of the nation’s largest telecommunications companies, which will pocket the money earned while forcing some customers off discounted promotional and legacy plans they claim do not qualify for bill relief.

The Emergency Broadband Benefit (EBB), rushed through in the early days of the new administration, is a $3.2 billion program that will offer qualifying consumers $50 off their monthly internet bill, at least until this fall when the money funding the program is expected to run out. Internet service provider participation is voluntary, but with billions of free money to be collected, most cable and phone companies are on board with the program. In fact, several are using the new benefit to earn even more money, by writing program rules that cynically exploit their income-challenged customers.

To qualify for the benefit, an individual is eligible if one member of the household:

  • Is a participant in one of the qualifying Lifeline programs: Medicaid, SNAP, SSI, FPHA, Veterans and Survivors Pension Benefit;
  • Is a resident on a Tribal reservation and participates in one of the following programs: Bureau of Indian Affairs general assistance; Tribally administered Temporary Assistance for Needy Families (Tribal TANF); Head Start (only those households meeting its income qualifying standard); or the Food Distribution Program on Indian Reservations (FDPIR);
  • Has applied for and been approved to participate in the National School Lunch Program: receives benefits under the free and reduced-price school lunch program or the school breakfast program, including through the USDA Community Eligibility Provision;
  • Has gross household income at or below 135% of the federal poverty guidelines;
  • Received a Federal Pell Grant during the current award year;
  • Experienced a substantial loss of income since February 29, 2020, and the household had a total income in 2020 below $99,000 for single filers and $198,000 for joint filers. This includes those who are unemployed or experienced unemployment in 2020 and/or were furloughed.

Stop the Cap! has received a few dozen letters from consumers that thought qualifying under the ‘substantial loss of income’ condition would be easy. Instead, they are sharing horror stories about providers unilaterally rejecting their applications, quietly canceling promotional packages, forcing some off less expensive, grandfathered service packages no longer being sold, or requiring customers to upgrade to more costly packages that ultimately left them with a bigger bill than they started with.

In some cases, poor training of customer service representatives seems to be the biggest impediment between you and a cheaper monthly bill. Some companies, including Sparklight, did not seem to even be aware of the highly publicized program. Others, notably Charter and Comcast, gave different answers depending on the representative you reach.

The most cynical provider of them all, however, is Verizon. No ISP makes participation in the EBB program more difficult. The phone company dominates as the largest wireline phone company in the northeast and Mid-Atlantic states and Verizon Wireless is one of the three major wireless carriers. It appears to be using the EBB as a marketing opportunity to upsell customers or drive them off older legacy plans that cost less, even if that is the only plan available.

“Verizon told me flat out ‘no’ that DSL customers cannot receive the $50 discount,” said Ted Rogers. Verizon is his only option for internet service, and only barely so. “We get about 6 Mbps from Verizon, no cell signals at all, and cable internet is just a dream. We live almost a mile from the nearest neighbor.”

Rogers lost his job as a result of the pandemic and is now working two part-time jobs to make ends meet. He told us the broadband benefit would be nice, but in the end is not worth fighting the phone company to get.

“You really have nowhere to go when they reject you, because the program is voluntary,” Rogers told us. “The FCC just passes the complaint back to Verizon and the PSC says it does not regulate internet service.”

Collect the $50, and then even more by forcing customers to switch to more expensive service plans.

Early FiOS customers who signed up for plans they have kept for years are also running straight into a firm “no” from Verizon. The Washington Post shared the stories of several Verizon fiber customers who were told they must upgrade to a more costly plan to qualify for the $50 discount. One customer in Massachusetts would have to give up his internet-only plan costing $62 for basically the same service under a different name — for $79 a month. While the $50 discount will make his internet bill much lower through the summer, when funds run out, he will end up paying $17 more a month indefinitely.

A Virginia customer was told she would have to walk away from her current Verizon internet plan costing $79 a month and switch to a new one for $95 a month, just to get a $50 discount over the next 3-6 months. That is a $16 more a month. In Pennsylvania, a Verizon customer was told she could not get the $50 a month broadband benefit unless she signed up for a costlier TV package and start renting some set top equipment as well. Her bill, after the EBB benefit expires, will be “at least $50 a month higher.”

“In my case, it seems like EBB only benefits Verizon,” she told the Post.

Unlike most telecom companies that claim these kinds of stories are simple misunderstandings or confusion on the part of their customer service team, Verizon spokesman Alex Lawson stepped up to boldly confirm that yes, indeed, the $50 benefit was only good on “qualifying plans.” For everyone else (our phrase): tough luck. But Lawson claims these newer plans allow customers to drop home phone service and typically save customers money. But not always, especially on legacy plans that include all the services a customer wants and special promotional packages which are lost when customers switch plans.

For the record, Verizon limits EBB benefits to these service plans. Notice DSL is excluded and prepaid wireless customers have to speak to a representative to find out if they can qualify:

Mobile:

Verizon Mix & Match Unlimited
Start Unlimited
Play More Unlimited
Do More Unlimited
Get More Unlimited
Above Unlimited
Beyond Unlimited
Go Unlimited (Some Go plans may not be eligible- inquire with rep.)
Standalone Mobile Hotspot plans
Unlimited and Unlimited Plus plans (Standalone mobile hotspot service offerings are those without a smartphone line on the account).

Home:

Fios Mix & Match Internet, any speed
Verizon 5G Home Internet
Verizon LTE Home Internet

Comcast representatives offered a range of responses to customers inquiring about signing up for EBB.

“Talk to one representative, get one story, hang up and call back and you get a completely different story,” said Sha’qwanda, a Comcast customer in Baltimore. “They told me I don’t qualify because I am 15 days late on my bill, then another person told me the plan was only for people on Medicaid, then another person told me I would have to give up my promotion plan they rate locked for a year. My bill would have gone up $54 a month. I can’t afford that. Who is really getting rich here?”

A Philadelphia customer told us Comcast completely messed up their account trying to apply the benefit, canceling their services and charging them for unreturned equipment.

“We lost service the following morning,” the customer wrote us, wishing to remain anonymous. “When we called up, the representative couldn’t figure out what happened, except he saw in the notes we were signed up for EBB, then the account was closed. Our final bill was over $400.”

The Xfinity social media account reached out to us earlier today to clear up the misunderstanding.

If you are a Comcast customer and are having trouble enrolling in EBB, we suggest you tweet a message to @Xfinity and get assistance. We suspect the problem here is insufficient training of customer service representatives to manage enrollments properly.

Charter/Spectrum is using the EBB program as a pry lever to push stubborn customers still holding on to legacy Time Warner Cable or Bright House service plans to switch to Spectrum internet plans and pricing. If you do not make the switch, you won’t qualify for EBB benefits. This is a choice by Charter management, not a limitation imposed by their billing system. Some customers on other legacy plans were also told they do not qualify.

“I am still a subscriber of New York’s Everyday Low Priced Internet service that used to be $15 a month. They have raised the price since, but also effectively jailed me by saying I have to abandon this plan if I want to get the $50 a month off my internet bill,” said Jay, a customer in New York City. “I can never go back either they tell me. Who wrote the rules for this program? The cable companies are using this to force people like me into upgrades I do not want and cannot afford. It’s scandalous.”

Another customer wishing to remain anonymous noted the same month EBB became available, Charter announced rate increases on equipment rentals and the Broadcast TV Fee paid by cable television customers.

“They will be back to raise internet prices again soon, I am sure,” the customer predicted.

AT&T, not to be left behind, also insists that customers choose from a limited menu of premium price plans and can never return to the plan they gave up. Even worse, customers complain you have to call to enroll, and the lines are jammed:

“I waited an hour on hold and then AT&T hung up on me twice,” said Kate Derry from Chicago. “It’s busy signals or waiting on hold forever. It’s like calling the unemployment office during the pandemic. AT&T has decided it should not be easy to enroll in this and I wonder how many people just give up.”

Jon, an AT&T Fiber customer in Dallas seems to agree.

“I finally got through at around 8am Texas time and listened to a representative fumble their way through disclaimers and conditions,” Jon told Stop the Cap! “Several times she had to put her hand over the microphone and ask her supervisor for help. It took an hour to get everything set up, not including the time needed to assemble the qualifying documentation. I really doubt many people are going to go through all this for a few months of savings. There is no excuse for this not to be available for online enrollment.”

House Democrats Blast Telecom Companies for Data Caps, Rate Hikes

House Energy & Commerce Committee

Democrats serving on the House Energy & Commerce Committee today blasted the nation’s largest internet service providers for price increases and data caps placed on consumer broadband services at the height of a global pandemic, questioning the industry’s commitment to keeping Americans connected.

“Over the last ten months, internet service became even more essential as many Americans were forced to transition to remote work and online school. Broadband networks seem to have largely withstood these massive shifts in usage,” wrote Democratic Reps. Frank Pallone, Jr (N.J.), Mike Doyle (Penn.) and Jerry McNerney (Calif.). “Unfortunately, what cannot be overlooked or underestimated is the extent to which families without home internet service — particularly those with school-aged children at home — have been left out and left behind.”

Pallone

The congressmen questioned nine providers after reading media coverage of rate hikes and the implementation of data caps by Comcast and the potential for Charter Spectrum to impose data caps as early as May 2021.

“This is an egregious action at a time when households and small businesses across the country need high-speed, reliable broadband more than ever but are struggling to make ends meet,” the three Democrats wrote.

In March 2020, many cable and phone companies relaxed a number of restrictions on customers in response to the emerging COVID-19 pandemic. Many volunteered to suspend data cap overlimit fees, provide affordable broadband options to the economically disadvantaged, offer free months of service, open restricted Wi-Fi hotspots, and discontinue collection efforts or service disconnects on customers falling behind on bills.

Despite the pledge, consumers filed a significant number of complaints with the Federal Communications Commission alleging the companies broke their promises, by far most often for not following through on free service offers or continuing aggressive collections of past due bills and shutting off service.

Consumer complaints filed with the FCC regarding the “Keep America Connected” pledge, received from March-November 2020. (Source: FCC)

The Energy and Commerce Committee has now sent letters to the CEOs of many providers, seeking answers to these questions as part of ongoing oversight of the industry:

  • Did the company participate in the FCC’s “Keep Americans Connected” pledge?
  • Has the company increased prices for fixed or mobile consumer internet and fixed or phone service since the start of the pandemic, or do they plan to raise prices on such plans within the next six months?
  • Prior to March 2020, did any of the company’s service plans impose a maximum data consumption threshold on its subscribers?
  • Since March 2020, has the company modified or imposed any new maximum data consumption thresholds on service plans, or do they plan to do so within the next six months?
  • Did the company stop disconnecting customers’ internet or telephone service due to their inability to pay during the pandemic?
  • Does the company offer a plan designed for low-income households, or a plan established in March or later to help students and families with connectivity during the pandemic?
  • Beyond service offerings for low-income customers, what steps is the company currently taking to assist individuals and families facing financial hardship due to circumstances related to COVID-19?

The full letters are available below:

Altice USA

AT&T

CenturyLink/Lumen

Charter Communications

Comcast Cable Communications

Cox Communications

Frontier Communications

T-Mobile US

Verizon Communications

Verizon Expands Both 5G “Ultra Wideband” and Nationwide Dynamic Spectrum Sharing 5G

Verizon customers in over 1,800 cities across the United States can now get a speed boost with the launch of Verizon’s nationwide Dynamic Spectrum Sharing (DSS) 5G, which runs simultaneously with existing 4G LTE on the same lower band spectrum, giving customers with 5G-capable devices faster service.

DSS technology is important to Verizon as it shares the limited amount of 4G spectrum it has in some cities with a slowly growing number of 5G customers. Now both can share the same spectrum without Verizon having to dedicate scarce low band frequencies exclusively to 5G service. The tradeoff is that low band DSS 5G service will not deliver the speed boost Verizon’s “Ultra Wideband” millimeter wave 5G service can offer.

Verizon simultaneously announced the addition of several cities now slightly covered by Verizon 5G Ultra Wideband, which can now reach up to 4 Gbps speed in some locations with the use of carrier aggregation. The rollouts are very limited, often covering just a few neighborhoods, a park, or shopping center, so check verizon.com/coverage-map for current coverage information.

Anaheim, Calif.

Where Available: West Anaheim, Downtown Anaheim (along Harbor Boulevard), Betsy Ross Park, Chaparral Park.

Baltimore, Md.

Where Available: Inner Harbor, Downtown, Power Plant Live, Camden Yards & M&T Bank Stadium, Towson University, and Cockesville.

Hartford, Conn.

Where Available: Trinity College, Frog Hollow and City Hall.

Jersey City, N.J. 

Where Available: Bayside Park, The Heights, and Journal Square.

Las Vegas, Nev.

Where Available: Las Vegas Strip, Mirage Volcano, Bellagio Lake, Welcome to Vegas Sign, and Paris/Eiffel Tower.

Oklahoma City, Okla.

Where Available: Quail Springs Mall, OU Medical Center, and near Hidden Trails Country Club.

Philadelphia, Pa.

Where Available: Temple University, South Philadelphia Sports Complex, Logan Circle, Broad Street, and Hawthorne.

Raleigh, N.C.

Where Available: Triangle Town Center, outside Duke Raleigh Hospital, and Crabtree Valley Mall.

Richmond, Va.

Where Available:  Scott’s Addiction, near VCU, and Church Hill.

San Francisco, Calif.

Where Available: Mission Bay, Yerba Buena Gardens, Marina Green Park, outside Oracle Park, Palace of Fine Arts, and Huntington Park (Nob Hill area).

Sarasota, Fla.

Where Available: Burns Square, along N Lemon Ave, and Rosemary District.

Syracuse, N.Y.

Where Available: In the Northside Neighborhood, near Schiller Park, outside St. Joseph’s Health Center.

Tucson, Ariz.

Where Available: Downtown, Historic Fourth Avenue and University of Arizona.

Verizon Announces Expansion of Rural Unlimited 4G LTE Wireless Home Internet to 189 Markets

Verizon has announced a significant expansion of its 4G LTE Home Internet service, now reaching 189 markets in 48 states.

“This summer, we introduced LTE Home Internet in select pilot markets, and the response from customers was incredible,” said Frank Boulben, senior vice president of consumer marketing and products at Verizon. “It’s clear the need for connectivity has never been greater during these challenging times, that’s why today, we’re expanding LTE Home Internet to even more customers in rural areas of America who may not have access to broadband internet.”

Indeed, most of the zip codes covered by Verizon’s wireless home broadband service are in rural communities where demand on Verizon’s 4G mobile network is likely much lower, with capacity to spare. The service is designed primarily for those living where DSL or cable broadband is not available.

For $40 a month for existing Verizon mobile customers ($60 for non-customers), customers receive unlimited data with no data caps or throttles at download speeds between 25-50 Mbps. A $240 LTE Home router is also provided, after a $10 a month device payment plan promotional credit that lasts for 24 months. In other words, you technically owe $240 for the router, with a balance reduction of $10 for each month you stay a customer. If you remain a customer for two years, that $240 is reduced to $0.00. If you cancel before that, you owe whatever balance remains. Verizon promises the service is easy to self-install.

The list of available zip codes is extensive, so you can download the current list here. Or verify precise availability by visiting: www.verizon.com/home/lte-home-internet.

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