Tag Archives: frontier

Case against San Bernardino FTTH embraces low federal expectations

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A proposed $28 million grant for a fiber to the home project in the Phelan area of San Bernardino County has drawn two formal challenges. One, from Frontier Communications, was completely predictable, but the other, from the California Public Utilities Commission’s office of ratepayer advocates (ORA), was somewhat unexpected.

Only somewhat, because ORA has a track record of sporadically opposing grants for FTTH systems from the California Advanced Services Fund (CASF). However, its objections usually second guess design or budget decisions. This time though, ORA is taking Frontier’s side, arguing that CASF subsidies shouldn’t be given for projects in areas where incumbents are getting federal money via the Connect America Fund program.

There are two big problems with that argument. First, the federal money generally pays for minimal upgrades to existing, and typically antiquated, broadband infrastructure. To get the money, Frontier only has to commit to providing service at 10 Mbps download and 1 Mbps upload speeds. In other words, substandard service that leaves communities underserved by the CPUC’s minimum benchmark of 6 Mbps down and 1.5 Mbps up, and therefor eligible for CASF money.

ORA makes much of Frontier’s claims that it can do better, but if this project is approved, Race Telecommunications will offer gigabit service for $60 a month to every home in its footprint. And that’s an enforceable obligation, since it’s tied to the grant money. Frontier, on the other hand, can’t be forced to deliver on its half promises about speeds and it’s making no commitments about prices.

Second, Frontier won’t be serving all the homes in Race’s proposed project area: the federal money is scattered around a checker board of census blocks, per the map above. Some people will be left without broadband service at all, and others will end up with speeds that wouldn’t have been considered sufficient ten years ago, let alone today.

The real problem is that the federal program is poorly designed. It pays for propping up incumbents’ slow service, out of date infrastructure and inconsistent deployment. If the aim is to avoid overlapping subsidies, then it’s the federal money that should be spent elsewhere. Its increasingly aggressive rhetoric and lawyerly intimidation notwithstanding, Frontier does not own exclusive rights to the Phelan community. The people – the ratepayers – there deserve advocacy too.

$900K chopped from San Bernardino FTTH subsidy plan, but it’s moving again

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A fiber to the home project in San Bernardino County is back on track, sorta. California Public Utilities Commission staff cut $900,000 from a proposed $29 million grant to Race Telecommunications for the Gigafy Phelan project, and sent it all back into a 30 day comment, reply and commission consideration cycle.

Gigafy Phelan is an ambitious attempt to extend FTTH service to 8,400 homes in California’s high desert region, in and around the town of Phelan. Or maybe it’s 7,600 homes. It depends on how homes is defined, and in this case it’s more than academic. It makes a $900,000 difference.

The federal census bureau tracks housing units and households. A housing unit is a discrete structure where people might live: “a house, an apartment, a mobile home or trailer, a group of rooms, or a single room that is occupied, or, if vacant, is intended for occupancy as separate living quarters", as the census bureau, as quoted by CPUC staff, puts it. A household is an occupied housing unit, regardless of the number of occupants or the relationships between them.

The California Advanced Service Fund – the broadband subsidy program that would pick up the tab – uses households as its primary metric. Housing units is a better measure, since a home that’s unoccupied today is as likely to be occupied tomorrow as any other, and everyone needs broadband service. But it’s just a way of keeping score and, so long as it’s done consistently, one way works pretty much as well as another.

It’s also a poor excuse for whittling down an FTTH project at the 11th hour, particularly one that delivers a gigabit for $60 a month and is the second "highest-scoring pending project application on the CASF’s project evaluation scoring matrix".

The revisions open up a window for another round of protests, and you can expect Frontier Communications will continue to object, claiming that its substandard, 10 Mbps down/1 Mbps up, federally subsidised service – at no particular price point – is enough for people who live in Phelan. The A in CASF stands for Advanced services. It’s time to get on with it.

CPUC, California lawmakers need to be as rational as a telecoms monopolist

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Update: the CPUC delayed action on the Gigafy Phelan project, and rescheduled it for consideration at its 25 May 2107 meeting.

Frontier Communication’s request to the California Public Utilities Commission to squash a potential competitor is economically rational – it has a monopoly and wants to keep it – which is why it should be rejected. Utility regulators exist to moderate monopolist impulses, not turbocharge them. If the CPUC rejects a $29 million infrastructure grant request from Race Telecommunications for its Gigafy Phelan fiber to the premise project, it will be handing over effective broadband ownership of 8,000 San Bernardino County homes to Frontier, which in turn will redline 3,000 of them because they haven’t been blessed with federal subsidies. Of the remaining 5,000, only a fraction will receive service that meets the CPUC’s minimum standard of 6 Mbps download and 1.5 Mbps upload speeds.

I made that point in reply comments I filed on Friday with the CPUC, as a rebuttal to the challenge Frontier mounted. I also debunked Frontier’s attempt to invoke assembly bill 1665, which would kill Race’s project if it actually makes it into law…

The bill in question – Assembly Bill 1665 – has not been enacted or similarly endorsed by the California Legislature. It is a controversial bill which has only been heard in a single assembly committee. In fact, a Frontier representative raised objections to the bill during the hearing…

It is disingenuous in the extreme to characterise AB 1665 as California policy or, indeed, anything other than a wish list submitted for consideration by its prospective beneficiaries, which include Frontier Communications, its objections notwithstanding.

Frontier’s objections to AB 1665 amount to almost isn’t good enough, I want it all. Which make plain its intent to use policy makers as tools to cement its grip on rural broadband customers while scooping any available subsidy money into its own pocket. Which is a completely and economically rational way of looking at the world. The CPUC and California legislators should respond in kind.

Race Telecommunications reply comments on Resolution T-17525 – CASF grant to construct the Gigafy Phelan project, 5 May 2015
Tellus Venture Associates reply comments on Resolution T-17525 – CASF grant to construct the Gigafy Phelan project, 5 May 2015

Frontier makes the case, California’s AB 1665 is double disaster

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Frontier’s admittedly “late-filed” attempt to kill grant funding for the Gigafy Phelan fiber to the home proposal in San Bernardino County does a much better job of demonstrating why assembly bill 1665 is a bad idea than it does of effectively arguing against the project.

In addition to reinstating a tax on phone bills and adding $300 million to the California Advanced Services Fund (CASF), AB 1665 would lower California’s minimum broadband service standard to 6 Mbps download and 1 Mbps upload speeds. It would also give incumbent telephone companies – Frontier and AT&T, primarily – de facto exclusive rights to rural broadband customers, whether or not they offer Internet access that meets the Californian minimum or, indeed, whether they offer broadband service at all. All they have to do is accept federal money from the Connect America Fund (CAF) program to build broadband infrastructure that meets the lower standard they’re pushing, somewhere in the general area.

Frontier is so eager to claim that prize that it cited AB 1665 in its argument against Gigafy Phelan, saying “just last week, the Legislature endorsed [using federal funds] again by amending CASF funding legislation to expressly prohibit award of a CASF grant to overbuild a CAF-funded broadband project”.

The “again” bit is misleading. California law and policy is full of exhortations to tap federal funds. What’s different and dangerous about AB 1665 is that it deliberately fences off large areas from state funded broadband upgrades when infrastructure is installed that doesn’t meet the current five year old Californian standard, even if no federal money is used.

That’s a point that Frontier clearly, if probably inadvertently, makes when it says it’s “currently in construction to expand broadband access by August 2017 to about 5,000 of the 8,361 households this application proposes to serve”. Why only 60% of the homes? Take a look at the map of Phelan above. The areas tinted yellow in checkerboard fashion are where Frontier is taking federal money to do substandard upgrades; there’s no money on offer for the areas in between. Guess where the more than 3,000 homes it’s bypassing are located?

That checkerboard pattern makes it completely impractical for another company to come in and serve people who don’t live where federal money flows, with or without a CASF grant. But Frontier would be completely entitled to double dip CASF money there and use it to offer service that wouldn’t meet basic needs five years ago, let alone today.

If the current version of AB 1665 becomes law.

Frontier Communications hates double dipping, unless it’s licking the cone

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As might be expected, Frontier Communications objects to a proposed $29 million California Advanced Services Fund subsidy for a fiber to the home project in its San Bernardino County territory. Its first instinct was to try to a backdoor approach at the California Public Utilities Commission, but that was rebuffed. So yesterday Frontier filed formal comments urging the CPUC to kill the Gigafy Phelan project when it comes up for a vote next week.

There are a few problems with its arguments against it.

First, it claims it’s going to upgrade the area that Race Telecommunications wants to serve. Well, not the entire area. Only 60% of the homes. And Frontier is very careful not to mention what that upgraded service will be. That’s because it’s only willing to commit to meeting a federal subsidy program’s 10 Mbps download/1 Mbps upload standard, as its previous filings at the CPUC have made abundantly clear. That service level does not meet the CPUC’s 6 Mbps down/1.5 Mbps up minimum. So even if the upgrade is completed in August, Frontier’s service in the Phelan area will still be substandard, for both the 40% of homes it’s bypassing and for many, if not all, of the remaining 60%.

Second, it makes a very odd argument against tapping two subsidy programs in one area. The CASF grant, which would give a gigabit to 100% of the homes in the project area, comes from California taxpayers, who also contribute to the federal Connect America Fund program that is financing Frontier’s substandard upgrade. It’s a fair point that taxpayers should only be paying for one broadband upgrade project, but should it be the one that offers a gigabit for $60 a month or the one that’ll lock in ten or twenty year old technology for the next twenty or thirty years?

There’s no way that Frontier will pass up that money, though. In fact, it doesn’t pass up money even when it means engaging in the kind of double dipping that it so piously objects to in its letter to the CPUC. In 2015, Frontier pursued, and received, CASF and federal subsidies to prop up its ageing DSL infrastructure in the Humboldt County town of Petrolia.

Frontier is entitled to play subsidies as dealt. But it’s gross hypocrisy to complain about the game when the other guy ends up with better cards.

Frontier pays a price for its California meltdown

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Frontier Communications’ cutover problems when it took control of Verizon’s wireline systems in California, Texas and Florida were costly, in terms of broadband subscribers and overall revenue. On Frontier’s third quarter earnings call earlier this week, company executives said that they saw a net loss of 100,000 broadband customers in the three states between April and June, and lost another 75,000 from July through September.

In revenue terms, though, the biggest hit in California and the other two states came from phone and video customers: total revenue was down $55 million in the third quarter, compared to the second, with video services accounting for $24 million and phone service for another $20 million.

The losses were attributed to the problems Frontier had in transferring call center operations from the Philippines back to the U.S., as well as tighter credit management. During the first few months, Frontier gave customers considerable slack in making payments, but as the transition was completed normal credit practices came into play.

Looking ahead, Frontier CEO Dan McCarthy said that 300,000 homes in three states will get broadband service upgrades in the next 90 days. Frontier is in the process of upgrading legacy DSL systems it acquired from Verizon, which typically max out at 6 Mbps download speeds, to modern DSL technology with claimed download speeds of 50 Mbps. No mention was made of upload speeds.

Those 300,000 homes represent about 12% of the new subscribers that Frontier picked up in the three states.

McCarthy also said that by the end of the year, 170,000 homes will get broadband upgrades (or broadband service for the first time in many cases) in areas subsidised by the Federal Communications Commission’s Connect America Fund program. Another 90,000 homes that are adjacent to those areas, but aren’t eligible for the subsidies, will also be upgraded. He wasn’t clear on whether those homes were specifically in California, Florida and Texas, though.

Frontier complaints drop as it fixes California FTTH problems

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Hundreds of fiber-to-the-home customers crashed and burned when Frontier Communications took over ownership of Verizon’s wireline networks in California last April. Phone, Internet and television service was disrupted, apparently because the customer data Frontier received from Verizon was faulty. The problems were compounded by a temporary call center that was drafted in to help Frontier get through the transition period.

The company’s position is they’re in business as usual mode now, and preliminary data from the California Public Utilities Commission appear to back it up.

The CPUC met in Long Beach last week, ground zero of Frontier’s meltdown. Of the 30 or so members of the public who signed up to speak at the meeting, only one man used his time to lambaste Frontier. That’s one indicator that things are getting better – more people made the trip to Sacramento last May to complain to legislators, when the troubles were at a peak.

The available stats also show marked improvement. More than 500 people filed complaints about Frontier with the commission in April, and more than 600 in May. By June, that number was down to a quarter of that level and it continued to drop in July and August. In September, only 62 complaints were received, which does look like business as usual – Frontier expects to handle 50,000 service issues in a normal month, according to regional president Melinda White, speaking to lawmakers in May.

The flood of problems was concentrated on the FTTH systems that Frontier acquired from Verizon, and “there was no similar widespread service disruptions for the rest of the service territory using traditional voice service over copper lines during this transition period”, communications division director Michael Amato told commissioners. The communities hardest hit were Camarillo and Santa Monica, and a cluster of cities around Long Beach, including Lakewood and Huntington Beach.

Frontier gets California subsidy to upgrade Shasta County service

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A thousand homes in the rural Shasta County community of Shingletown will be getting faster DSL service from Frontier Communications, as a result of a $546,000 subsidy from the California Advanced Services Fund (CASF) that was okayed by the California Public Utilities Commission at its meeting last week. According to the resolution approving the grant

Frontier submitted an application for CASF funding to build 64,950 feet of fiber cable from the Shingletown, California central office to six digital loop carrier sites…The sites under this grant are currently served by broadband over copper facilities to DSLAM’s served from the Shingletown central office in Shasta County. The existing bandwidth is not capable of providing more than 3 Mbps download speeds and 768 Kbps upload speeds, and must be upgraded to a new technology (ADSL2+ with bonding) to meet the grant speeds. To upgrade to this using this combination of technology, the existing DSLAMs must be Ethernet-capable and the central office must have sufficient bandwidth coming into it…Customers within 7,200 feet of the DSLAM will be capable of receiving speeds of 25 Mbps download and up to 2 Mbps upload and those within 10,000 feet will be capable of receiving 10 Mbps download and up to 1.5 Mbps upload speeds.

When this project was first proposed for a CASF subsidy, I described it as middle mile infrastructure, and as such said it should be subject to the same kind of open access requirements the CPUC has imposed on independent projects it’s funded. Frontier objected to that characterisation, saying it was for upgrades to its last mile distribution network. After looking at it more closely, I agree – it’s a last mile build. The new fiber will all be downstream of the central office, and the average run will be about two miles. Fair enough.

Broadband gaps to fill, but willingness to do so in northeastern California

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Many homes will still be without broadband service in northeastern California, even after upgrades paid by the federal Connect America Fund (CAF-2) program are complete. That’s mostly because the census blocks deemed eligible for the subsidies by the Federal Communications Commission are limited – many thousands of unserved homes are outside of those areas – but also because the FCC doesn’t necessarily require that all homes in a given census block be served.

I ran an analysis for the California Center for Rural Policy (CCRP), ahead of a meeting with Frontier Communications executives and supervisors from the six counties – Lassen, Modoc, Plumas, Shasta, Siskiyou and Tehama – in the region. It was organised by CCRP and the California Emerging Technology Fund (CETF) and held in Redding on Thursday. It was a follow up to the agreement negotiated between Frontier and CETF, during the regulatory review process that led to approval of Frontier’s purchase of Verizon’s wireline telephone systems in California.

The subsidised census blocks in Frontier’s service territory are concentrated in Modoc, Lassen and Shasta counties. Once the CAF-2 funded census blocks are built out – the deadline is the end of 2020 – there will still be about 1,500 homes without access to wireline broadband service. In those blocks alone. Pulling back and looking at the entire six county region, including AT&T’s territory (but not areas served by small rural phone companies), there will be more than 30,000 homes without access, with about a third of those in Plumas County.

One approach to fixing the problem is to build more middle mile fiber deeper into the region, to make last mile build outs less expensive and boost capacity all around. I ran that analysis too. A Digital 395-scale project – 500 miles, say, of dark fiber through a strategic corridor at a $100 million-plus cost – could, for example, boost wireline broadband availability in Modoc County from the current 36% to 74%, and from 56% to 81% in Lassen County.

There are other ways to approach it, particularly when there’s an incumbent telephone (or cable) company that’s willing to address the problem. As Frontier was in last week’s meeting. The company has a stated policy of working with local communities – doing more than just giving money to a softball team, as one exec put it – and so far, they’re living up to it. The problem of connectivity in northeastern California isn’t solved yet – that’ll take years – but at this point everyone involved is pushing toward a real solution. That alone is a refreshing change.

Tellus Venture Associates presentation, Northeastern Broadband Meeting with Frontier Communications, 23 June 2016

Broadband gets lowest satisfaction rating of any industry in latest survey

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Consumers are a wee bit happier, on the average, with Internet service providers, but that’s not to say happy, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. Overall, Internet service providers get an average score of 64 (out of 100), up one point from 2016. It is the lowest industry average of all those ranked by ACSI. Subscription TV companies – there’s quite a bit of overlap, of course – are nearly as bad on the average, getting 65 out of 100. By comparison, mobile phone companies get a 71, and consumer electronics manufacturers and full service restaurants share the top spot at 82.

Verizon’s fiber to the home customers are the happiest of all, rating their satisfaction at 73, up five points from last year. From there, though, it is bleak. AT&T drops five points to 64, Comcast is three points better at 59 and Frontier slides five points to the bottom of the ISP rankings at 56. The survey was completed before Frontier took over 2 million Verizon customers in California.

That also means it happened before Charter, Time Warner and Bright House merged together. All three companies are up from last year, scoring 63, 66 and 67 respectively. It’ll be interesting to see how the new combined company rates in 2017. ACSI cautions that “mergers tend to cause customer satisfaction to deteriorate, at least in the short term”.

Consumers are the least satisfied with their ISP’s customer service, choice of plans and delivered speed, including video streaming quality; all those factors rate 69 out of 100 or worse.