“I need better internet period!” says local business in St Louis County MN

Businesses from St Louis County are speaking after the broadband meeting in St Louis County yesterday. A theme emerge as they all say – we need better broadband. After the meeting I heard from Jon Benz at JM Retrievers. They board, train and breed retrievers. Here’s what Jon had to say about local broadband…

I need better internet period! Cost effective and would help my business a lot. From credit card processing to website design, which I do myself, videos and photo uploads to help me sell products and services. I have to wait sometimes hours to download files that people send me. And hours to upload sale videos etc.

Broadband is a must for us to survive for many aspects of our business. I get more online contacts for bookings numerous days than by phone. I barely have Internet through access broadband line of sight service.

I like the provider as a company but they don’t have the speeds that I need to make my business more efficient in many ways. The first few years I didn’t have them it was a struggle. It can only get better.

37% of Americans now go online mostly using a smartphone

Pew Research reports…

Today, 37% of U.S. adults say they mostly use a smartphone when accessing the internet. This share has nearly doubled since 2013, when the Center last asked this question. At that point, 19% of Americans named their smartphone as their primary device for going online.

Indeed, mobile devices are not simply being used more often to go online – some Americans are forgoing traditional broadband at home altogether in favor of their smartphone. A majority of adults say they subscribe to home broadband, but about one-in-four (27%) do not. And growing shares of these non-adopters cite their mobile phone as a reason for not subscribing to these services.

I could see people do more individual tasks online but (aside from watching videos or listening to audio) I can’t see people choose a smartphone for tasks that take longer – like research or writing. That being said, few people probably spend as much time writing or doing research as I do. I wasn’t surprised to see that people with higher education and salaries seem to choose smartphones and home broadband at about the same rate. So people who can choose, choose both. (Or maybe having home access helps them make more money.)

MoffettNathanson says CenturyLink might as well keep residential customers

There’s a lot to unpack here. Back in May, CenturyLink said they were looking at their options for their consumer/residential service…

Could the CenturyLink consumer business be sold or spun off? CenturyLink CEO Jeff Storey said yesterday that CenturyLink has enlisted advisors to assist the company in a strategic review of the company’s consumer business. Although he emphasized that it is “really early in the process,” he noted on the company’s first-quarter earnings call that the company is “very open” in the options it would consider.

“Let me be clear, we’re early in what I expect to be a lengthy and complex process,” said Story, according to a SeekingAlpha transcript of the earnings call.

At that time, Storey elaborated:  “During our review, we will not modify our normal operations or our investment patterns. I can’t predict the outcome or the timing of this work or if any transactions will come from it at all. Our focus, though, is value maximization for shareholders. If there are better paths to create more value with these assets, we will pursue them.”

He added, though, that the company is doing a good job of growing broadband where it invests in improving the customer experience and profitably expanding the network.

The company’s consumer revenues were $1.4 billion in the first quarter of 2019. The consumer business saw a 1.3% year-over-year and a 2.7% increase over the previous quarter in broadband revenues. While the company lost subscribers purchasing speeds below 20 Mbps, it gained subscribers purchasing higher-speed services.

I’ve added the emphasis. Interesting that CEO Storey  revealed  that  while CenturyLink “grow[s] broadband” where they invest,  decisions about where to invest are driven by a focus on maximizing shareholder value, not community benefit.  Because they are a business, profitability, not community needs, drives CenturyLink’s investment decisions.

Fast forward a month and it looks like the analysis is in

CenturyLink wouldn’t gain much by spinning off its consumer business, argued telecom financial analysts MoffettNathanson in a research note issued today. The cost of a CenturyLink consumer spinoff would leave the company with little in the way of financial benefits, the analysts said.

Telecompetitor goes into detail…

Spinning off the CenturyLink consumer business would generate what the researchers refer to as “dis-synergies” that would result from the difficult task of dividing a network and other operations that serve both the consumer and business sides of the house. These dis-synergies would “simplistically imply roughly $300 million to $600 million in value destruction from separating the businesses,” the researchers argue.

Another concern about a spinoff is whether it would receive necessary approvals from state public utility commissions.

The analysts also question how much upside there is for CenturyLink’s consumer business. They argue, for example, that the company’s opportunity to provide connectivity for small cells is limited because small cells will be deployed only in densely populated areas and CenturyLink is the incumbent local carrier in only two of the nation’s 50 most densely populated cities.

Again, the emphasis is mine. The worry about value destruction is real for any business; you don’t want to lose value. BUT the worry for communities is that this isn’t really a rousing rationale for investing in upgrading  residential service, rather a recognition that the cost of disaggregating business customers is just too high.

Also of note in the analysis is recognition that small cell technology (necessary for 5G) will only be deployed in densely populated areas. This is not new news, but does reinforce the fact that 5G is not coming to  rural areas anytime soon.

Finally…

Not all of MoffettNathanson’s analysis of CenturyLink opportunities is so downbeat, however.  For example, the researchers see the recent news about FCC plans for a replacement for the Connect America Fund, due to expire in just a couple of years, as a positive, as CenturyLink was one of the largest recipients of CAF funding.

The “potential upside risk is what keeps us on the sidelines,” the researchers wrote.

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Again, emphasis is mine. I have heard  industry insiders question the wisdom of CenturyLink accepting CAF funding. The main problem is that they didn’t receive enough funding to adequately cover upgrades to areas where the potential for ROI is slow or uncertain. And the required buildout speeds aren’t fast enough to satisfy all customers. It’s a lose-lose situation.

To create a win-win for both providers and communities, federal funding must be adequate to incent providers to invest in networks that meet consumer needs. The current CAF II requirements of a 10/1 network don’t meet community needs: economic development is in the upload speed. Minnesota state speed goals of 100 Mbps down and 20 Mbps up by 2026 seem much closer aligned to the community needs than the 10/1 speeds currently required by the Connect America Fund (CAFII).

The final line in the industry analysts’ research note reminds us that this is a look from and for the company of CenturyLink – not for the communities they serve…

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Blandin released a report in 2017  that points out that industry ROI and community ROI are different. Households with broadband realize $1850 in economic benefits per year. So, the communities need better broadband. The gap is between that community need and the business needs of the provider to deliver profits to their shareholders.

Stoicism and broadband – a guest post

Celebrating Sunday, I am going to share a speech that my daughter (Aine O’Donnell) wrote for her high school (freshman) rhetoric paper. I thought folks might enjoy a completely new look at broadband…

Where do you go when you have a question on your homework? Or when you need to catch up on the latest celebrity drama? Or maybe to get in touch with your family across the globe? We use the internet. But not everyone has access to the internet; there are entire towns right here in Minnesota that have little to no internet access. It’s not even an option. Imagine that painful moment when the internet is down and your hit with that wall of frustration, especially when you need to finish that huge assignment. That’s life without proper internet access. It’s hard to even imagine not having internet, isn’t it. This is the reality for hundreds of thousands of Minnesotans.  In our industrialized lives, Internet access is a necessity for anyone seeking prosperity.

According to Pew Research “17% of teenagers say they are often or sometimes unable to complete homework assignments because they do not have reliable access to  internet connection” (Anderson). This lack of internet access leaves people at a disadvantage, stripping away their chance to get anywhere those with internet easily can. This issue goes beyond the individuals. The lack of internet access affects entire communities, leaving them in the dust as the rest of the world progresses, getting more and more digital everyday. Without internet, we can’t do our homework, can’t apply for jobs, cent get remote access to health care (which is very important in rural areas), and much, much more. The internet is not just for Netflix and Snapchat, it’s not a luxury it’s a right  and an absolute necessity to be the people we want to be.

Stoicism involves obeying nature by evolving our gift of reason (aka our natural mind) for the ultimate goal of happiness through wisdom. . The internet keeps you in touch with the rest of the world and updated on our ever renewing ideas and discoveries. In that sense: the internet is parallel to Seneca’s letters, because he used the modern technology of his time to spread his knowledge to the world. Much like how Internet is our modern technology to spread and receive knowledge. In our modern time, the internet is undoubtedly a necessity to fulfill the duty of a stoic.,

To go back to my original question, where do you go when you have a question? The internet! But did it ever occur to you that people don’t have that option? That’s a lot of questions left unanswered.  Much like the food on our table or roof over our head, when you have it you don’t often think about those who don’t. But does that really mean it’s not an issue? Of course not! The Internet truly is more and more of a necessity as humanity progresses, to deny this is to deny the progression itself.  We are the future, which means that the path of our progression is in our hands. We can’t continue to leave so many people behind. If not everyone has a chance, no one has a chance.

Works Cited

Anderson, Monica, and Andrew Perrin. “Nearly One-in-Five Teens Can’t Always Finish Their Homework Because of the Digital Divide.” Pew Research Center, Pew Research Center, 26 Oct. 2018, http://www.pewresearch.org/fact-tank/2018/10/26/nearly-one-in-five-teens-cant-always-finish-their-homework-because-of-the-digital-divide/.

 

T-Mobile has 18% discount for nonprofit orgs to serve their clients

I just heard that T-Mobile has opened up its contracts with states and the federal GSA to nonprofits. This means you have access to an 18% discount on service. If you pay T-Mobile directly you can use this discount to provide service to the folks you serve. They do not have a system for the folks you serve to pay T-Mobile directly.

This could be a way to offer hotspots to library patrons or to families you serve that don’t have access at home. (Get pricing. And check coverage areas before you get into any contracts!)

Other providers may have similar service – and if they do I’d be happy to post it here too. (Just send me info atreacy@treacyinfo.com or post a comment below.)

What do you do when the maps are wrong and you aren’t served?

I heard from reader Steve Riley who is stuck in Crow Wing County with less broadband than he needs, “I’ve been trying to get faster DSL at my home. Currently I’m at 5-9 Mbps, but usually slower.” Since an injury a few years ago, his wife teleworks but those speeds make it difficult to be productive.

He sent me pictures of the telecom situation in the area.

He adds, “My current provider and the FCC say my area is served by high speed internet, but as you can see it’s not if you’re between DSLAMS. I’ve asked 3 different techs why I can’t be hooked up to the new DSLAM installed 2 years ago that’s less than 500 feet from me and they all say it’s easy to do but it’s against policy.” My guess is that they don’t want to sell beyond capacity but I can understand the frustration. And I hear often about the frustration of maps that aren’t quite right and just the inability to get the broadband you need.

And I worry about the communities where this happens. Who is going to move into an area, who is going to start a business where you can’t get sufficient broadband?