It looked like this in 2011. Click for a bigger view.
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.
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.
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’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.
‘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”.