Tag: "frontier"

Posted January 12, 2012 by Christopher Mitchell

Last year we noted that a bill to expand local authority to invest in publicly owned broadband networks would return in 2012. HB 1711 is in Committee and causing a bit of a stir. "A bit of a stir" is good -- such a reaction means it has a chance at passing and giving Washington's residents a greater opportunity to have fast, affordable, and reliable access to the Internet.

Washington's law presently allows Public Utility Districts to build fiber-optic networks but they cannot offer retail services. They are limited to providing wholesale services only -- working with independent service providers to bring telecom services to the public.

Unfortunately, this approach can be financially debilitating, particularly in rural areas. Building next generation networks in very low density areas is hard enough without being forced to split the revenues with third parties.

Last year, House Bill 2601 created a study to examine telecommunications reform, including the possibilty of municipality and public utility district provisioning. The University of Washington School of Law examined the issues and released a report [pdf] that recognizes the important role public sector investments can play:

U Washington Law School

Broadband infrastructure is this century’s interstate highway system: a public investment in an infrastructure that will rapidly connect Washington’s citizens statewide, nationally, and internationally; fuelling growth, competition, and innovation. Like highway access, the path to universal broadband access varies with the needs of the local community.

Our primary goal is to expand broadband access. We believe allowing municipalities and PUDs to provide broadband services addresses the most significant hurdles to broadband expansion: the high cost of infrastructure. In conjunction with a state USF, PUDs and municipalities are well placed to address the needs of their consumers.

A secondary goal is to promote a competitive marketplace. We believe that empowering PUDs and municipalities...

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Posted January 3, 2012 by Christopher Mitchell

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.

Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.

The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.

But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)

We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.

FCC Logo

As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations. On the few occasions the FCC tries to defend the public from their schemes to rip-off...

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Posted November 4, 2011 by Christopher Mitchell

When it comes to expanding access to the Internet across the US, the federal government has long looked first to the private sector, ignoring hundreds of years of experience showing that unaccountable private companies cannot be trusted to sufficiently invest in or govern essential infrastructure.

Inevitably, they price access to high and invest too little as they maxmize their profits -- thereby minimizing the profits of all other parts of the economy.

So let's take a little survey of the progress we see from these companies.

We have long railed against the Verizon -> FairPoint fiasco in New England that left Verizon much richer at the expense of residents and businesses in rural Vermont, New Hampshire, and Maine particularly. Well, FairPoint creditors have realized the depth of Verizon's scam and are suing Verizon for $2 billion. Read the complaint [pdf].

According to the complaint (pdf), Verizon not only made out like a financial bandit up front, but took advantage of regulatory delays to strip mine the assets of anything of value, including core IP network components, business services, and localized billing and support assets required to support the three states. Verizon then billed out their support assistance for millions per month during the very rocky transition, during which time 911 and other services saw repeated outages, resulting in millions more in refund penalties.

Karl Bode is right to criticize the state authorities that allowed this fiasco to occur. Their inability to regulate in the public interest has hurt everyone stuck in the mess. While we can expect powerful companies like Verizon to try to game the system at every opportunity, there is no excuse for making it so easy for them.

Frontier Logo

As long as we are talking about Verizon shedding its rural investments, let's take a look at how Frontier is doing since it inherited thousands upon thousands of FiOS customers as part of its recent deal with Verizon. Frontier has decided the best approach is to...

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Posted July 24, 2011 by Christopher Mitchell

In a Q&A following a speech at the National Association of Regulatory Utility Commissioners, AT&T CEO Randal Stephenson candidly called DSL obsolete. This echoes not only our view, but that of hundreds of communities who have built their own networks upon realizing they cannot be competitive in the modern world with DSL.

Interestingly, AT&T still has millions of customers that use its DSL product. And it has announced its super-DSL offering called U-Verse is finished -- no doubt surprising many state-house policymakers that AT&T had convinced they would invest in communities.

The context of his comment was that DSL is no longer competitive with cable in broadband capacity (and often reliability) -- something we documented in our video comparing different types of networks. We would argue that U-Verse itself is not competitive with cable due to its greatly constrained upstream speeds -- even worse than cable networks typically experience.

So, to recap -- we have yet another admission from the private sector that it is delivering obsolete broadband services to our communities. How can there be any surprise that so many more communities are considering building their own networks to create economic develop, increase quality of life, and generally be competitive in the digital economy.

If AT&T can barely keep up with the investment necessary for our communities, how can far less profitable companies like CenturyLink and Frontier? They can't. But that doesn't stop them from advertising the hell out of their obsolete networks. Smart communities will choose self-determination rather than betting on last-generation networks run by distant, unaccountable corporations.

Posted May 6, 2011 by Christopher Mitchell

Thanks to Minnesota Public Radio for an update on stimulus broadband projects in NE MN. A massive non-profit middle-mile project called the NorthEast Service Cooperative will finally provide redundancy and modern connections to an area long neglected by Qwest.

Hundreds of miles of fiber optic cables will bring faster Internet access to the Arrowhead region of Minnesota by the end of this summer. Ground for a broadband network stretching 915 miles was broken yesterday. Sen. Al Franken (D-MN) and other politicians were on hand to tout the long-term economic significance of this federally funded project.

Soon, entire counties will not have to fear disastrous meltdowns from Qwest's inability to offer reliable services, as when they went 12 hours without any telecommunications, meaning police could not run background checks or run plates, credit cards and ATMs went offline, and border security had to use Canadian comms.

Northland News offered greater coverage as well as a video that would not embed here for reasons unknown.

The 915 miles of fiber optic network will stretch across eight counties in the Arrowhead Region and bring world class web speeds to the area.

State lawmakers were also on hand at the ceremony and say this type of technology is pivotal to economic development.

"I want this to be the next step in people realizing that economic diversification on the Iron Range can be done because we are wired, we're ready to go, and we have a work force that is second to none," said state Sen. David Tomassoni.

We have to wonder how many of these legislators will support removing barriers in Minnesota law to communities building their own networks.

Note that the the NE Service Coop is a middle-mile network and that Frontier will be using it to improve their services.

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Posted March 29, 2011 by Christopher Mitchell

Minnesota Public Radio, as part of its Ground Level Broadband Coverage has profiled WindomNet with a piece called "Who should build the next generation of high-speed networks?"

Dan Olsen, who runs the municipal broadband service in Windom, was just about to leave work for the night when he got a call. The muckety-mucks at Fortune Transportation, a trucking company on the outskirts of town, were considering shuttering their office and leaving the area.

"They said, Dan, you need to get your butt out here now," Olsen recalls. "I got there and they said, 'You need to build fiber out here. What would it take for you to do it?'"

Fortune, which employs 47 people in the town of 4,600, two and a half hours southwest of the Twin Cities, relies on plenty of high-tech gadgetry. Broadband Internet access figures into how the company bids for jobs, communicates with road-bound truckers, controls the temperatures in its refrigerated trucks and remotely views its office in Roswell, New Mexico. Fortune even uses the Internet to monitor where and to what extent drivers fill their gas tanks in order to save money.

Yet, when it was time to upgrade company systems three years ago, Fortune's private provider couldn't offer sufficient speeds.

That's where Windomnet came in. Though Fortune was a mile outside the municipal provider's service area, "We jumped through the hoops and made it happen," recalls Olsen. "The council said, "Do it and we'll figure out how to pay for it.' We got a plow and a local crew. We had it built in 30 days."

I have thought about this story frequently when I hear claims that publicly owned networks are failures. For years, lobbyists for cable and phone companies have told everyone in the state what a failure WindomNet has been - they crow about debt service exceeding revenue while ignoring the fact that all networks -- public and private -- take many years of losses before they break even because nearly all the costs of the network are paid upfront.

Toward the end of the article (which should be read in its entirely rather than in the snippets I repost here), Dan puts the matter in context:

Dan Olsen retorts that Windomnet was never designed to make money; one...

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Posted January 27, 2011 by Christopher Mitchell

For years, I have heard Graham Richards, former mayor of Fort Wayne Indiana, brag about this "beg, borrow, buy, build" [pdf] philosophy as Mayor.  I am not insulting him -- his brash style is quite likable, but it is bragging.  He was somewhat of a celebrity among the broadband folks because he both understood the importance of broadband and had convinced Verizon to roll out FiOS in Fort Wayne when they had no plans to.  His philosophy is to first beg, then borrow, then buy, and finally build the network if necessary -- a similar approach of many local governments.  This is also often the path of least resistance (which, Utah Phillips reminds us, is what makes the river crooked).  

Graham is a terrific guy and a great evangelist for broadband (though he never jumped into a frozen Lake Superior) -- but we have long argued that his priorities were wrong in the long term.  Not owning the network means the network is unlikely to care about what the community needs.  Unfortunately, our philosophy has proven prescient.

When we last discussed Frontier's radical price increases for the FiOS subscribers they bought from Verizon, we failed to note that Fort Wayne was one of the transferred communities.  They begged for the network and they have no voice in how it is run.  So when Frontier jacks up its FiOS prices and glibly encourages people to drop their high quality FiOS cable for lesser quality DirectTV (with a long contract), the folks in Fort Wayne have little choice but to shrug their shoulders.

Serfs may occasion upon a good Lord of the Manor, but mostly they didn't.  Ownership of essential infrastructure offers long term benefits.

Photo used under Creative Commons, courtesy of Jenn Raynes

Posted January 26, 2011 by Christopher Mitchell

The fiber-to-the-farm initiative in Sibley County, Minnesota, has completed the feasibility study and the towns involved are discussing a Joint Powers Agreement. One of the impacted incumbent providers -- Frontier Communications, a rural telco famous for slow DSL) -- has started to spread the usual FUD (fear, uncertainty, and doubt) that is common whenever a massive company is about to face competition.

Though I am tempted to comment directly on Frontier's letter, I'll let the community's response stand on its own. The way they misrepresent the record of Windom should be instructive - this same misinformation strategy is used around the country.  We believe publishing these scare tactics and responses to them is helpful to everyone -- so if your project has received one, please let us know.

Frontier's Letter:

Dear Commissioners:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the "fiber to the home" proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

A nearby example would be WindomNet, the city-owned network in Windom, Minnesota. That network, which provides telephone, internet, and video service, began in 2005. The financial results to date have been poor; operating losses of $662,000 in 2006, $1,257,000 in 2007, $326,000 in 2008, and $93,000 in 2009. Additional borrowing by the city was required to make up those losses.

Another example is the city-owned network in Burlington, Vermont. Burlington Telecom was begun with high hopes in 2003, to offer...

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Posted January 14, 2011 by Christopher Mitchell

Last night, local officials from all over Sibley County gathered in Arlington to learn about the potential fiber-to-the-farm broadband network they could build as early as 2012. Dave Peters, from Minnesota Public Radio, attended and discussed the meeting on MPR's Ground Level blog.

More than 50 elected officials -- county commissioners, city council members, township board supervisors -- gathered in the Arlington Community Center last night to inch ahead a plan to lay fiber optic lines to every home and business in the county plus those in and around neighboring Fairfax in Renville County.

It's an ambitious plan that would require the community to borrow $63 million and then pay off those bonds with revenue from the service. The county-owned operation would offer the usual cable-phone-Internet triple plays, and backers are promising that right out of the gate it would be at a speed of 20 megabits per second, upload and download. That's quite a bit faster than what area residents get now via DSL or cable or wireless.

If the project will move forward, the communities will have to form a Joint Powers Board and seed it with some start-up funds. The next steps will be to do a pre-subscription campaign to get a real sense of how many residents would take service from a new network. Responses are non-binding but will give a better measure of support as well as create an additional sense of responsibility for the project. From Dave Peters:

By the end of February, the 10 governments -- Sibley and Renville counties and the cities of Gaylord, Arlington, Winthrop, Fairfax, Henderson, Gibbon, Green Isle and New Auburn -- will each decide whether they want to create a joint powers board.

The best scenario is that all communities would join. But if one or a few do not, the project may be able to continue as long as some of the remaining communities are willing to take additional risk (which would be rewarded with a higher percentage of net income down the line). As long as the JPA is able to continue, all communities will still be passed by the network and residents able to subscribe. The exception is Sibley County itself; if the County does not join, the project would be hard-pressed to run the fiber out to the farmers...

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Posted January 6, 2011 by Christopher Mitchell

Frontier has been bitten by the same disadvantage many communities face when building their own networks -- little market power means having to overpay for everything. When Frontier bought millions of Verizon rural lines, it bought a few FiOS connections as well. But not enough to gain any bargaining power with channel owners. So Frontier had to raise the costs of its video services up for 46%. Lest anyone feel too sorry for Frontier, they are doing just fine. It is their customers who suffer. But it is a reminder that the issue of scale and market power are barriers to all competition, not just community networks. If we want to have real competition in this country, the Congress and the FCC need to stop ignoring the problems caused by massive players distorting the market. This unregulated market is an invitation for big players to join together and screw everyone else.

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