Impact of competition on broadband speeds may come down to type of provider

Roberto Gallardo and Brain Whitacre have a new report out – A Look at Broadband Access, Providers and Technology. They used FCC Form 477 to figure out who are the biggest providers in the country, the state of competition and access to speeds of 25/3 (FCC definition of broadband) in rural vs urban areas and more.

Here are the six largest providers in the US:

I was surprised to see Charter with 22 percent rural housing units since I think of Charter as cable and I don’t think of cable as a primary rural provider. But that wasn’t what I found most interesting in the report.

I was a little surprised to see the discrepancy between urban and rural household access to 25/3:

I don’t know why I was surprised but the stark difference between 1 percent and 26 is jarring. But even that isn’t what really caught my eye. What caught my eye was the map of broadband providers by group:

Here’s an explanation of the key:

Figure 5 shows four layers: the orange layer indicates where top 6 and non-top 6 providers overlap; the blue layer indicates where Top 6 providers were the only providers (darker blue indicates a higher number of top 6 only providers); the green layer indicates where other (nontop 6) were the only providers (darker green indicates a higher number of other providers only).

Remember “top 6” are the providers shown above.

What struck me was the blueness of East Central Minnesota – trailing up north.

Roberto was kind enough to below of the Minnesota portion of the map for me. I’d like to compare it to two other maps. In each map you can see the color pattern in East Central MN – just north of the Twin Cities.e

  • The first map blue indicates only one of the “Top 6” providers serves that area.
  • The second map shows access to 25/3 broadband; orange means 50-60% have access, beige is 60-70% and light blue is 70-80%
  • The third maps shows access to 100/20; it is more diverse but yellow indicates less than 50 percent have access.
  • The first maps also shows where there is only one “other provider” which may be a cooperative, an independent or really anyone outside of the top 6.

I think it’s a powerful image of the impact of limited competition – and impact of the type of provider. Comparing East Central MN to West Central – each has areas served by one provider but the type of provider seems to make a difference in the speed of connection.

Roberto was also kind enough to send a spreadsheet with provider numbers and types by county – but with the county-level into we lose the granularity of the map. There are areas where the county may have numerous providers but a section of that county has just one – that is better demonstrated by map.

[Updated Sep 8: I’m delighted to share a new map from Roberto that includes county boundaries and provider number/types.]

Like MN, Ohio PUC is looking at Frontier too

Last week I mentioned that the Timber Jay is asking the MN PUC (Public Utilities Commission) to “reconsider the decision by the Department of Commerce to let Frontier Communications avoid any civil or criminal penalties for its systematic neglect of customers in Minnesota and its violations of state law.”

It sounds as if Frontier is having the same issues in Ohio…

Today the Public Utilities Commission of Ohio (PUCO) ordered staff to file a formal complaint against Frontier North, Inc. regarding the telephone provider’s landline service quality. The PUCO has received numerous customer complaints regarding extended service outages which may result in safety concerns, such as a customers’ inability to contact emergency services, doctors, and family and friends.

“Customer complaints indicating extensive telecommunication outages are troubling and deserve to be examined,” stated PUCO Chairman Sam Randazzo. “Today the PUCO is taking steps to investigate allegations of poor service quality.”

On Aug. 13, 2019, the PUCO staff filed a letter to the Commission citing 33 specific instances where Frontier allegedly failed to provide adequate and reliable telephone service to its basic local exchange service customers and recommended the Commission conduct a thorough investigation. Among other things, the staff identified issues concerning extended service restoration timelines, failure to provide basic telephone service that would allow customers to place or receive calls at any time and failure to comply with previous Commission orders and entries.

Today’s entry opens an investigation and directs PUCO staff to file a formal complaint against the company. Frontier will then have 20 days to respond to the allegations in the complaint.

Timberjay asks MN PUC to reconsider Frontier settlement

The Timberjay posts an editorial…

The Minnesota Public Utilities Commission should reconsider the decision by the Department of Commerce to let Frontier Communications avoid any civil or criminal penalties for its systematic neglect of customers in Minnesota and its violations of state law.

Back in January, the Department of Commerce released a hard-hitting report laying bare what they termed “staggering deficiencies” in Frontier’s physical plant and for its poor service and misleading billing practices.

Just seven months ago, the department’s staff appeared loaded for bear, writing: “The Minnesota legislature has provided a clear set of remedies to curb misconduct of rogue companies, ones who routinely, knowingly, disregard the law and jeopardize the lives and well-being of Minnesotans, including hefty civil penalties and criminal prosecutions.”

Seven months later, after months of mediation, it appears the department’s bark is much worse than its bite.

The stipulation agreement first reported this past week in the Timberjay includes no recommendation for either fines or for prosecution.

While the company does agree to take a number of positive steps to improve its service to customers, the agreement runs for only two years. After that, Frontier can apparently go back to its old ways.

Fast-Tracking the T-Mobile and Sprint Merger Undermines Public Interest

A press release from Next Century Cities

Fast-Tracking the T-Mobile and Sprint Merger Undermines Public Interest
Washington DC (August 14, 2019) — Today, Federal Communications Commission leadership recommended the approval of the proposed merger between T-Mobile and Sprint, a move that would further consolidate the wireless market and eventually raise prices for consumers.
T-Mobile and Sprint are two maverick companies that have competed head-to-head to offer innovative low-cost products to consumers and create a vital resale market. Combining the two would likely raise prices across the market, and would be particularly harmful for low-income consumers who rely on mobile service as their sole connection to the internet.
Both companies have told the FCC and Congress that the merger is necessary in order to build out next-generation wireless networks, yet have simultaneously touted independent 5G deployments to the public. It remains true that ultimately, competitive pressure — not consolidation — is what will drive network upgrades.
“The FCC’s charge is to protect the interest of the public, not of private companies,” said Cat Blake, Senior Program Manager. “This deal is good for T-Mobile and Sprint, but will ultimately make it harder for Americans to access affordable, high-quality essential mobile services. Further, it is unacceptable that the FCC would move to approve a deal without first soliciting public comment on the significant divestiture package required by the Department of Justice.
The public has a right to weigh-in on whether restructuring the deal with DISH would provide adequate consumer choice in the wireless market.”
A merger between T-Mobile and Sprint would be against the public interest. The FCC should follow the 16 state attorneys general in blocking the deal.

Minnesota is one of those states striving to block the deal.

Comcast Announces Largest Ever Expansion of Internet Essentials Program to Reach all Low-Income Americans

Good news for more people where Comcast is available…

Comcast announced today it is significantly expanding eligibility for Internet Essentials, which is the nation’s largest, most comprehensive, and most successful broadband adoption program in America, to include all qualified low-income households in its service area. The expansion is the most significant change in the program’s history. The Company estimates that more than three million additional low-income households, including households with people with disabilities, are now eligible to apply. It estimates a total of nearly seven million households now have access to low-cost Internet service, which literally doubles the total number of previously eligible households. In addition, the company announced that, since August 2011, Internet Essentials has connected more than eight million low-income individuals, from two million households, to the Internet at home, most for the first time in their lives. Today’s announcement follows 11 prior eligibility expansions, including last year’s extension of the program to low-income veterans.
“This expansion is the culmination of an audacious goal we set eight years ago, which was to meaningfully and significantly close the digital divide for low-income Americans,” said David L. Cohen, Senior Executive Vice President and Chief Diversity Officer of Comcast NBCUniversal. “The Internet is arguably the most important technological innovation in history, and it is unacceptable that we live in a country where millions of families and individuals are missing out on this life-changing resource. Whether the Internet is used for students to do their homework, adults to look for and apply for new jobs, seniors to keep in touch with friends and family, or veterans to access their well-deserved benefits or medical assistance, it is absolutely essential to be connected in our modern, digital age.”
To be eligible to apply to the program, low-income applicants simply need to show they are participating in one of more than a dozen different government assistance programs. These include: Medicaid, Supplemental Nutrition Assistance Program (SNAP), and Supplemental Security Income (SSI). A full list of these programs can be found at http://www.internetessentials.com. The Company already accepts applications from households that have a student eligible to participate in the National School Lunch Program, live in public housing or receive HUD Housing Assistance, including Section 8 vouchers, or participate in the Veterans Pension Program, as well as low-income seniors and community college students in select pilot markets.

According to U.S. Census data, households living in cities with the highest poverty rates, are up to 10 times more likely than those in higher earning communities not to have fixed broadband at home. For example, in Palo Alto, California, or Bethesda, Maryland – where poverty rates are very low – only about six percent of households do not have a broadband Internet subscription – 94 percent are connected. But in Trenton, New Jersey, and Flint, Michigan – where poverty rates are way above the national average – 60 percent or more of households do not have fixed broadband at home – that is, less than half are connected. That gap of more than 50 points defines the digital divide in this country.
Internet Essentials has an integrated, wrap-around design that addresses each of the three major barriers to broadband adoption that research has identified. These include: a lack of digital literacy skills, lack of awareness of the relevance of the Internet to every day life needs, and fear of the Internet, the lack of a computer, and cost. As a result, the program includes: multiple options to access free digital literacy training in print, online, and in person, the option to purchase an Internet-ready computer for less than $150; and low-cost, high-speed Internet service for $9.95 a month plus tax. The program is structured as a partnership between Comcast and tens of thousands of school districts, libraries, elected officials, and nonprofit community partners. For more information, or to apply for the program in seven different languages, please visit http://www.internetessentials.com or call 1-855-846-8376. Spanish-only speakers can also call 1-855-765-6995.
The most significant barrier to broadband adoption in low-income communities remains a basket of digital literacy deficits, lack of digital awareness, and fear of the Internet. To help address this barrier, since 2011, Comcast has invested more than $650 million to support digital literacy training and awareness, reaching more than 9.5 million low-income Americans. In addition, the company has either sold or donated more than 100,000 discounted and heavily subsidized computers to families and veterans that need one.

Klobuchar Introduces Legislation to Crack Down on Monopolies that Violate Antitrust Law

From Senator Klobuchar’s Senate website

Klobuchar is the Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights

WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation to crack down on monopolies that violate antitrust law. The Monopolization Deterrence Act would give the Justice Department and the Federal Trade Commission (FTC) the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. The bill was introduced with Senator Richard Blumenthal (D-CT) and cosponsored by Senators Dianne Feinstein (D-CA) and Ed Markey (D-MA).

“We have a major monopoly problem in this country. So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops. But the threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place. Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” Klobuchar said. “Our legislation will increase the ability of the Justice Department and the FTC to deter companies from engaging in monopolistic practices that hurt competition, consumers, and innovation in our economy.”

Specifically, the Monopolization Deterrence Act would:

  • Enable the Department of Justice and the FTC to seek civil monetary penalties, in addition to existing remedies, for violations of section 2 of the Sherman Act (15 U.S.C. 2);
  • Deter future violations by providing for penalties of up to 15 percent of the violator’s total U.S. revenues or 30 percent of the violator’s U.S. revenues in the affected markets; and
  • Ensure that the two agencies work together to create guidelines for how they would exercise their penalty authority considering a number of relevant factors.

The legislation has the support of leading national consumer welfare and antitrust policy organizations Consumer Reports, Public Knowledge, and American Antitrust Institute.

“We need to make sure we have effective enforcement tools to deter dominant corporations from engaging in anti-competitive, monopolistic practices that harm the marketplace and consumers,” said George Slover, senior policy counsel at Consumer Reports. “Senator Klobuchar’s legislation will put new teeth into our antitrust laws by empowering enforcers and courts to impose significant financial penalties when a corporation abuses its dominance in the marketplace.”

“Section 2 monopolization cases are more difficult to bring than other cases, and if the government wins at court, it usually can do no more than stop the offending company from engaging in the same anticompetitive behavior in the future,” said Charlotte Slaiman, Competition Policy Counsel at Public Knowledge. “Adding monetary penalties as a percentage of a company’s U.S. revenue could help deter anticompetitive conduct and give the antitrust enforcement agencies more leverage to promote competition in these types of cases.”

“Senator Klobuchar has been a leader in smart and constructive legislative antitrust reforms. Her proposed bill to strengthen U.S. monopolization law provides for needed expansion of federal remedies to help deter anticompetitive abuses. This initiative should garner strong bipartisan support,” said American Antitrust Institute President Diana Moss.

In her role as Ranking Member of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries including the telecommunications, agriculture, and pharmaceutical industries. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In the letters, the senators requested information regarding the existence and scope of the potential investigations. In April, Klobuchar and Senator Marsha Blackburn (R-TN) sent a letter to the FTC to take action in response to concerns regarding potential privacy, data security, and antitrust violations involving online platforms. They also called on the FTC to provide additional transparency into its ongoing investigations to ensure that consumers are protected from harmful conduct relating to digital markets.

Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.

Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. She introduced both bills in February.

Paul Bunyan Communications Returns Over $2.8 Million Member’s Share in Cooperative’s Success

Two years ago I looked at the community ROI of public investment in broadband. It turns out that while businesses can have a difficult time making the business case for better broadband – the community does see a return. SO it’s great to see a cooperative, such as Paul Bunyan, sharing their ROI with their customers and sharing the info with everyone…

Over $2.8 million has been returned to members of Paul Bunyan Communications, the cooperative announced today.

Paul Bunyan Communications is a not for profit company that strives to provide the highest quality service at the most affordable rates.  As a cooperative, membership in Paul Bunyan Communications includes the opportunity to share in the financial success of the company. When profits are earned they are allocated to the members based on their proportional share of the allocable revenues.  These allocations may then be returned to the individual members through capital credit retirements.

For current members with a distribution amount less than $75, a credit has been applied to your August bill. Checks have been mailed out for distributions of $75 or more.

“The state of our cooperative is very strong with over 27,600 active members throughout our 5,500 square mile service territory.  We have been very busy building one of the largest all-fiber optic rural Gigabit networks in the country, the GigaZone, which is revolutionizing the way members live, work, and play.  It is rewarding to see all those efforts continue to pay off and return these profits to our membership” said Gary Johnson, Paul Bunyan Communications CEO/General Manager.

“For over 65 years we have been providing the latest in technology at cost.  There is no membership fee to join Paul Bunyan Communications and there are no annual membership dues. All you need to do is subscribe to either one line of local phone or Broadband Internet service and you become a member. You get the latest in technology backed up by our talented team of over 130 local employees that all live and work here” added Dave Schultz, Paul Bunyan Communications Chief Financial Officer.

“In a highly competitive industry with national competitors our cooperative has been successful because we put our region and our members first.  We don’t have to worry about customers all over the place like in Sioux Falls, Fargo, Minneapolis, or anywhere else. Our investments go here, back into our network, our services, and our communities.” added Brian Bissonette, Paul Bunyan Communications Marketing Supervisor.

If you were a member of the cooperative in 2002 and/or 2018 and accrued more than $10 in total capital credit allocations, but do not receive the credit on your account or a check by September 22, please contact Paul Bunyan Communications at (218) 444-1234 or (218) 999-1234.