Tag Archives: frontier communications

AT&T, Frontier talk to CPUC about future networks, without putting all cards on the table

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The California Public Utilities Commission looked at telephone company plans to replace copper networks and plain old telephone service (POTS) with new technology at a workshop in San Francisco yesterday. Representatives from AT&T and Frontier Communications talked about some, but not all, of those plans, as I pointed out in the remarks I prepared, and mostly delivered, at the workshop…

The copper-to-IP transition involves three discrete but inter-related issues. Only two of those issues were addressed today.

The speakers from AT&T and Frontier talked about the benefits of replacing copper networks with fiber, and legacy POTS systems with Internet protocol technology. They did a good job of explaining the technology, the economics and the benefits that fiber and IP-based service brings.

Fair enough.

But they ignored the third issue, despite the fact that it is at the heart of their business strategy. It is at the heart of their plan to use federal and state subsidies to lock rural communities into substandard service at monopoly prices for decades to come.

That unspoken, third issue is the replacement of copper networks, largely paid for with public subsidies, with fixed wireless service, also paid for with taxpayer and ratepayer money.

Although AT&T’s representative ignored it today, the company has made no secret of its plans. It intends to replace copper networks with wireless local loop technology in rural areas, claim it delivers the minimum 10 megabits down and 1 megabit up speeds required by the California Advanced Services Fund and the FCC’s Connect America Fund subsidy programs, and pocket the cash.

Frontier has been less straightforward. Despite promising the CPUC that it was a “dedicated wireline service provider”, during the regulatory review of its purchase of Verizon’s California systems, it is now testing its own version of wireless local loop technology, and its executives are speaking of it of as a means of meeting their Connect America Fund obligations.

At best, the fixed wireless systems that AT&T and Frontier are developing can support broadband service that’s on a par with legacy DSL upgrades; service that’s priced, though, on a par with faster and more reliable copper and fiber-based service. And they want to use regulatory blessings obtained with promises of a fiber future to do it.

Today’s focus on IP technology and fiber networks was driven, in part, by the CPUC’s regulatory authority over voice service. But the CPUC also has a legislative mandate to bridge the digital divide in California and bring fast, reliable and affordable broadband service to all Californians. It also has a new responsibility to monitor AT&T’s and Frontier’s compliance with Connect America Fund commitments.

The CPUC should hold AT&T and Frontier to account for everything they do, not just those things they choose to talk about.

Frontier orders a California broadband subsidy sandwich

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The first application for construction (and maybe operations) subsidies from the California Advanced Services Fund (CASF) since the program was gutted by the California legislature landed in the hopper at the California Public Utilities Commission.

Frontier Communications is asking for a $1.8 million grant, without specifying how much, if anything, it’s willing to pay out of its own pocket. It wants the money to pay for a fiber to the home system in and around the remote San Bernardino County town of Lytle Creek…

Frontier’s proposed project will cover about 4.4 square miles and is a combination of middle-mile and last-mile infrastructure using Frontier’s existing poles and rights of way to deploy fiber-to-the-home (“FTTH”) facilities capable of providing High Speed Internet, Ethernet, and VoIP service with speeds of up to 1 Gbps download and 1 Gbps upload.

“Capable of” and “up to” are weasel words that incumbent telcos, like Frontier, put in ads and other marketing material with the intent of pulling the rug out from under consumers when they have the gall to ask for it. In its project summary, Frontier makes no promises about the service it will actually offer, or the price it will charge.

Frontier says it plans to serve 339 homes with the subsidy, which comes out to $5,300 each. But what Frontier doesn’t mention is that Lytle Creek is one of the blank spaces on its federally subsidised checkerboard. It’s sandwiched between areas where the Federal Communications Commission is paying for service at 10 Mbps down/1 Mbps up, which is below the otherwise federal standard of 25 Mbps down/3 Mbps up. The middle mile infrastructure that Frontier wants all Californians to pay for will support the promise, if not necessarily the reality, of modern service for some while condemning the rest to speeds consistent with 1990s DSL infrastructure.

The purpose of CASF is to extend the benefits of 21st century broadband service to all Californians. Frontier’s Lytle Creek proposal might do that for some. Before writing the check, the CPUC needs to make sure it will deliver it to all.

Rural Californians still fleeing Frontier broadband by the thousands

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Frontier is still losing broadband subscribers in California, more so in rural areas than in urban areas, but either way the counts are dropping. That’s according to Frontier’s third quarter 2017 financial report and presentation. The good news? Frontier says it’s not bleeding as fast as it was.

Frontier first separates its results out into what it calls “CTF”, short for California, Texas and Florida, and “legacy”, which is what it had before it bought out Verizon’s wireline systems in those three states. California accounts for about four-fifths of the subscribers Frontier acquired in that transaction and apparently about the same proportion of its losses. At least going by the very vague characterisation company executives gave during a conference call with investment analysts, as quoted by the website Seeking Alpha: “California is somewhere in between” Texas and Florida.

Then within the CTF group, Frontier breaks its subscriber trend numbers into DSL and FiOS categories. The FiOS households are primarily in urban and suburban communities, particularly in the affluent coastal counties of southern California, where Verizon invested in fiber. DSL subscribers, on the other hand, are in a dog’s breakfast of often decaying copper systems that trace their legacy back to a variety of rural telcos that were strung together over the years into a collection that Verizon couldn’t be bothered to upgrade and couldn’t wait to dump.

And that Frontier can’t hang onto. It ended the third quarter with 19,000 net fewer DSL subscribers in the three state group, again with California likely accounting for four-fifths, or roughly 15,000 households. That’s a little better than the previous trend since it closed its purchase of Verizon’s systems, when quarterly DSL losses swung between something like 18,000 and 24,000 in California, using the four-fifths ratio as a rough guide.

On the positive side, Frontier is doing better at keeping its FiOS subscribers, losing a net of only 11,000 across the three states in the third quarter, down from 44,000 in the second quarter. And way down from a high of 76,000 net sub losses in the second quarter of 2016, when Frontier fumbled its California hand off.

Frontier preps to pull a wireless bait and switch on Californians

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Frontier Communications is backtracking on pledges made to the California Public Utilities Commission as it successfully sought permission to take over Verizon’s copper and fiber systems in California. During that process, it claimed to be a “dedicated wireline service provider” as it was trying to convince the CPUC that it could do a better job than Verizon…

Frontier is strategically focused solely on wireline telecommunications and has a long and successful history providing those services. Unlike Verizon and other large telecommunications carriers that have multiple business divisions—such as wireless and international—that compete for capital resources and management attention, all of Frontier’s capital and human resources are concentrated on wireline communications services.

Not any more. In a recent filing with the Federal Communications Commission, Frontier (along with Windstream and Consolidated) said it’s moving ahead with plans to spend federal subsidies on wireless service, rather than wireline upgrades (h/t to Trish Steel at the Broadband Alliance of Mendocino County for the heads up)…

Frontier, for example, has already begun testing fixed wireless in very rural [Connect America Fund-subsidised] areas. As Frontier’s Chief Financial Officer has explained, Frontier believes that this could be a “good solution” to the deployment challenge “in very rural America[,] and if it works the way [Frontier is] expecting it to work…[Frontier] will deploy more of that next year.”

On the face of it, Frontier’s plans for fixed wireless broadband service are similar to AT&T’s. Both companies are required to offer service at a minimum of 10 Mbps download and 1 Mbps upload speeds in federally subsidised areas, and putting up an access point with wide coverage is one way to claim they’re meeting that obligation, even though the service is unlikely to be accessible to all, or even most, of the people under that umbrella.

There’s one key difference between Frontier and AT&T, though. Because it’s also a mobile carrier, AT&T already has wireless sites, licensed spectrum and a deep reservoir of wireless engineering talent. Frontier has none of it.

Frontier and competitive carriers agree, at least regarding telephone service in California

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Most of the issues between Frontier Communications and competitive local exchange carriers in California regarding Frontier’s proposed purchase of Verizon’s wireline telephone systems have been worked out. A settlement agreement was filed with the California Public Utilities Commission that addresses most of the objections that CLECs raised regarding the deal.

Boiled down, most of the settlement consists of Frontier saying it’ll honor Verizon’s current contracts with CLECs and keep current terms and interconnection agreements in effect for at least three years. CLECs will be able to get access to any new capacity that Frontier builds in order to stitch together the new territories it intends to acquire. Frontier will offer CLECs access to existing copper plant, or give specific reasons why it can’t do so…

Frontier will not require carriers to pay construction charges to install fiber, if working copper facilities have capacity and are available. Frontier will perform routine network modifications on copper facilities as Frontier reasonable determines to be appropriate and necessary. If Frontier denies any service request on the basis that no facilities are available, Frontier will inform the requesting CLEC of the copper facilities that terminate at the requested service location and identify the copper facilities that were tested.

The settlement also closes possible loopholes: Frontier is agreeing not to try to duck obligations by asking to be characterised as a rural carrier.

Some issues, particularly regarding Internet bandwidth and traffic, remain to be settled. In other words, Frontier isn’t backing away from its broader position that the CPUC doesn’t have the authority to get involved in regulating broadband, as opposed to telephone, service.

Frontier’s middle mile will solve some of Verizon’s last mile woes, says CFO

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Connecting Frontier Communication’s existing national fiber backbone to the Californian telephone systems it plans to buy from Verizon might be enough to greatly improve speeds. That’s what John Jureller, Frontier’s chief financial officer, told an investment conference last week. According to a story by Sean Buckley in FierceTelecom, Jureller said

“What we have found as we have gotten deeper and deeper into our integration, it has got a well enabled network backbone that might have been built out with DSL at one point with technology that might have been two generations ago,” Jureller said. “You might have a market like Santa Barbara, Calif., or Palm Springs, Calif., that might only have 7 Mbps of speed and with slight change in equipment and electronics we think we can transform into a 50 Mbps product.”

The top end for Frontier’s copper-based service is 100Mbps, which it’s offering in Connecticut via systems it bought from AT&T. Verizon’s wireline infrastructure in California, though, is likely to be a different story. The condition of Verizon’s networks here is not generally top of the line. Some, for example in a swath of unserved communities stretching from western Kern County to southeastern Monterey County, do not support even1990s style legacy DSL.

But Frontier has experience, in California and elsewhere, taking over Verizon’s copper plant and upgrading it to the point where it at least meets the CPUC’s minimum standard of 6 Mbps download and 1.5 Mbps upload speeds. Jureller said that the subsidies Frontier expects to get from the Federal Communication Commission’s Connect America Fund will go mostly toward areas in California where there’s no broadband service at all.

Californian ISPs pass on upgrades, open door to subsidised competition

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Exercising the right to refuse first.

It looks like the right of first refusal hurdle has been cleared for broadband infrastructure subsidies in California, and successfully so. Assuming no filings are stuck somewhere in the system, only Frontier Communications has told the California Public Utilities Commission that it will upgrade broadband service on its own in at least some of its territory. For up to a year, the commission won’t fund competing broadband projects in the 7 communities identified by Frontier.

That means that beginning on 1 December 2014, telephone and cable companies and independent Internet service providers alike can apply for constructions grants and loans from the California Advanced Services Fund anywhere else in the state where broadband service doesn’t meet the 6 Mbps down/1.5 Mbps up minimum standard. And if no one does, local governments can apply starting on 1 May 2014, but only for unserved areas – places where there’s effectively no existing broadband service at all.

Contrary to my own dire predictions, the big incumbents did not try to game the system in order to effectively shut down the CASF program and stall potential competitors for a year.

Instead, Frontier submitted a focused and verifiable commitment to improve service in communities that sorely need it. It’s possible that Frontier could fail to follow through, but its commitment letter was more specific and binding than a competitor’s grant application would have been. And faster to implement, assuming that the federal money Frontier is relying upon materialises.

It’s not a completely clear path to CASF subsidies. Another change in the program allows incumbents to review grant and loan applications one by one, and then submit a better proposal. That’s arguably a good thing for both taxpayers in general and specifically the people who live in an area where incumbents want to arm wrestle for the opportunity to upgrade infrastructure. But it creates additional risk for ISPs who are deciding whether or not to apply.

I don’t think it’ll matter much, though. Incumbents have always had the chance to challenge CASF project proposals on eligibility grounds, either by arguing about it or rushing in to improve service. Anyone who submits a CASF application knows that incumbents aren’t likely to roll over and play dead.

Frontier pledges to boost broadband service in California

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So far, only one Internet service provider has exercised its right of first refusal to upgrade substandard service areas on its own and thereby prevent competing projects from getting subsidies from the California Advanced Services Fund for up to a year. Frontier Communications submitted a letter to the California Public Utilities Commission on Friday making a plausible pledge to improve service in 7 rural Californian communities to at least minimum levels…

The project upgrades are in northeast California in the area of Alturas, Chester, Lake Almanor, Janesville, Shingletown, in the central California area of Tuolumne and along the California and Nevada border adjacent to Topaz Lake, NV on the California side. These projects are also supported by Connect America Fund Phase 1 Round 2 funding.

This upgrade will be performed by May 1, 2015.

Frontier says it will provide test data that shows subscribers in those communities are able to receive service that meets or beats the commission’s 6 Mbps down/1.5 Mbps up speed standard. As required, Frontier is committing to getting it done within 6 months, but the commission allows an extra 6 months if weather, permits from local government, federal funding or similar factors slow the work down. That potential extension out to a year was added earlier this year at the request of Frontier and other rural telcos.

The nominal deadline for exercising CASF rights of first refusal was Saturday, but since today is the next business day after that, ISPs could file by 5 p.m. and likely claim that’s good enough under CPUC rules.

Google has hyped the gig Frontier CEO complains. Duh.

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The hare provokes the tortoise.

Google’s campaign to vex incumbent broadband providers is a stunning success, at least judging by the thoroughly vexed comments Frontier Communication’s CEO Maggie Wilderotter made to her board. According to a story in the Oregonian, she slammed Google for, um, creating unrest amongst Frontier’s customers…

“Today it’s about the hype, because Google has hyped the gig,” said Wilderotter, in Portland this week for a meeting of her company’s board. She said Google is pitching something that’s beyond the capacity of many devices, with very few services that could take advantage of such speeds, and confusing customers in the process.

Bingo. Google wants to crank up the pressure on incumbents to upgrade networks, and it’s doing it by raising expectations with a simple concept: a gig is good. People get that. Whether they need it or not, whether they know what to do with it or not, they now know, thanks to Google, that a gig is the gold standard.

It’s a problem for incumbents because it puts them in the unfamiliar position of being on the defensive. Which makes for supremely uncomfortable marketing pitches: our stuff is adequate. Particularly for you. Unfortunately for Frontier’s customers, not to mention shareholders, that’s exactly the tack Wilderotter is taking…

Frontier’s pitch: Better prices for more modest speeds. For most people, Wilderotter said, 10 to 12 megabits per second will be perfectly adequate for at least the next couple years. She said Frontier is upgrading its networks in rural communities where it doesn’t offer FiOS to meet that benchmark.

It doesn’t matter that Wilderotter is correct – an honest 10 Mbps will satisfy most people’s needs for a year or two – because all that matters is meeting expectations. And Google is driving those expectations. With intent.

Almost heaven is broadband hell

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I love red meat on a Friday night (h/t to the Baller Herbst List for the heads up). Broadband/DSLreports.com has a delicious post detailing the public meltdown of a Frontier Communications executive when pressed on the highly technical question of “just how freaking fast is your DSL in West Virginia?”…

‘I’ll have an engineer talk to you about the technology we use on that,’ said [Dana] Waldo, senior vice president and general manager of Frontier’s West Virginia operations.

When [a competitor] alleged that Frontier’s broadband DSL service does not offer the 1-megabit upload speed, Waldo was unable to actually answer the question and instead decided to get personal:

“That is not correct, Jim,” Waldo said. “I wasn’t going to bring this up, but I am absolutely beside myself. I feel so sorry for you, that you are so desperate to make you and Citynet relevant and, apparently, keep it afloat. Jim, it’s over. I’m done talking to you. I’m done … wasting my time responding to your mischaracterizations. I’m not going to sit here and waste my time and hear more of his nonsense,” Waldo continued. “I’ll excuse myself.”

It happened while officials were considering a grant to subsidise competitive service in a local area where Frontier is supposed to be delivering Internet connections at West Virginia’s minimum standard of 4 Mbps down/1 Mbps up.

It might just be that Frontier has sent a man to match West Virginia’s mountains. Well, OK, hills. The state has its own broadband project problems. It’s in a battle with the federal government over allegedly misspent broadband stimulus money. Keep in mind, despite what it says on the license plates, the unofficial state motto is “thank god for Mississippi or we’d be 50th in everything”.