Dozens of lawmakers, municipal officials, and consumer advocacy groups want a thorough investigation of New York's phone system, accusing Verizon of raising prices substantially while allowing landline service to deteriorate throughout the state.
Rate deregulation has harmed customers, the lawmakers and groups wrote in a petition to the New York Public Service Commission (PSC). Verizon has been shifting wireline service from copper to fiber and building out its cellular network, but in the process it's leaving many consumers behind, the petition claims.
The letter quotes New York Attorney General Eric Schneiderman and previous PSC documents that say Verizon failed to meet quality standards. The petition was signed by 49 State Assembly members (out of 150), seven State Senate members (out of 63), and a member of Congress, US Rep Tim Bishop (D-NY).
Mayors and other officials representing a dozen cities, towns, and counties signed the letter, as did consumer advocacy groups including the AARP and Common Cause New York. The letter was also signed by the New York State AFL-CIO and a Communications Workers of America representative.
New York is shaping up as a major battleground for Comcast's proposed acquisition of Time Warner Cable.
While the $45.2 billion merger will be scrutinized by federal officials, it also needs approval at the state level.
TWC has 2.2 million cable TV, Internet, and phone customers in 1,150 New York communities, and hundreds of them have called on the New York Public Service Commission (PSC) to block the sale to Comcast. Comcast doesn't compete against TWC for subscribers, and its territory in New York is limited but includes a VoIP phone service offered to residential and business customers in 10 communities.
"Both Time Warner Cable and Comcast already have monopolies in each and every territory in which they do business today, and combining the companies will reinforce those individual territorial monopolies under a single corporate umbrella, with NBC-Universal thrown in to boot," resident Frank Brice argued in a comment to the PSC posted. Brice complained that "The constant, yearly rate increases imposed on us by Time Warner Cable are and continue to be outrageous, outsized, and unwarranted. "Given where I live in the mid-Hudson valley, 100 miles from New York City and 50 miles from Albany, I cannot get over-the-air TV broadcasts, and I have no choice in my cable-TV provider unless I choose a satellite provider." Brice is "so unhappy with Time Warner Cable" that he buys DSL Internet and phone service from Verizon, which hasn't built FiOS in his area.
Brice's comment is similar to many others submitted by residents to the PSC's merger proceeding.
Since 2013, Comcast's wireless gateways have by default broadcast a second signal that turns each customer's modem and router into a public Wi-Fi hotspot.
It's all part of Comcast's plan to create a nationwide Wi-Fi network of more than 1 million hotspots that the cable company can sell access to. Routers broadcast public Wi-Fi signals, unless you ask Comcast to turn it off.
Comcast deflected criticism by arguing that the hotspot's bandwidth is separate from the bandwidth subscribers pay for, so it won't reduce the customer's Internet speeds. But what about electricity? Alex Gizis, CEO of Speedify, which makes software that bonds Internet connections to combine bandwidth, decided to investigate.
To test the effect of people using the hotspot, Gizis plugged the Comcast modem and router into a power strip that was being monitored by a "Kill A Watt" meter. After testing the devices while idle, "we then connected two Windows laptops to the Xfinity hotspot, one watching Netflix and the other downloading files," he wrote. "You could immediately see the difference in the power meter, as the devices jumped from 0.14 Amps when idle, up to 0.22 Amps when actually being used. To translate this into dollars and cents, we used the average cost of power here in the Mid-Atlantic, which is $0.162 per KWh."
Comcast spokesperson Joel Shadle told Ars that the Speedify test relied on Comcast's business equipment, rather than the equipment that's used for the residential hotspot program, and that the equipment was outdated.
With Verizon struggling to bring FiOS to every corner of New York City as promised, the company has been arguing with landlords about gaining access to buildings where tenants might want to buy Verizon's fiber-based Internet, phone, and TV service.
Verizon's fiber now passes buildings in "90 percent of the Bronx, 89 percent of Brooklyn, 94 percent of Manhattan, 90 percent of Queens and virtually the entirety of Staten Island," the company says. That's short of the 100 percent Verizon was supposed to achieve by June 30, 2014 according to its franchise agreement. And the percentage of buildings where residents can actually buy FiOS is lower.
Verizon now blames Sandy but claimed it was "ahead of schedule" after the storm.
"The various percentages refer to the amount of fiber in the streets and avenues, our obligation. The numbers have nothing to do with building penetration," Verizon spokesperson John Bonomo said.
Verizon has been filing petitions with the State Public Service Commission to gain access to several hundred buildings in order to conduct pre-installation surveys and then wire up the buildings. In some cases these petitions have allowed Verizon access, but other attempts were plagued by miscommunications and mistakes.
When Netflix agreed to pay Comcast for a direct connection to the ISP's network, video performance improved immediately. Verizon subscribers aren't so lucky.
Although Netflix and Verizon confirmed on April 28 that they had struck a paid peering deal, performance continued to drop in May and could remain poor for months while the companies upgrade infrastructure.
"Verizon FiOS is down two slots and now ranks behind DSL providers Frontier and Windstream," Netflix wrote after releasing its monthly speed index.
In the US, Netflix performance on Verizon FiOS dropped from 1.99Mbps in April to 1.90Mbps in May, and performance on Verizon DSL dropped from 1.08Mbps to 1.05Mbps. This is the average performance of all Netflix streams on each ISP's network. The drops are small, but they show that the paid peering deal didn't make any immediate impact.
In April 2008, Verizon signed a franchise agreement in which it promised the New York City Department of Information Technology and Telecommunications (DoITT) that it would build its "state-of-the-art fiber-optic network throughout the entire City by mid-year 2014."
The June 30, 2014 deadline is about to pass without Verizon meeting the requirement. The company is blaming Hurricane Sandy from October 2012 -- even though Verizon was still claiming to be "ahead of schedule" in April 2013.
AT&T recently named 100 municipalities in 21 metropolitan areas where it might bring its fiber-to-the-home network, without actually saying how many customers would get the GigaPower service, which offers up to 1Gbps download speeds.
AT&T said the expansion "is not expected to impact AT&T’s capital investment plans for 2014," further muddying the picture.
That fiber announcement came a few weeks before AT&T announced a deal to buy satellite provider DirecTV for $48.5 billion. Yet it seems the two are intertwined: AT&T told the Securities and Exchange Commission that it needs approval of the DirecTV merger in order to bring fiber to 2 million locations.
"The economics of this transaction will allow the combined company to upgrade 2 million additional locations to high speed broadband with GigaPower FTTP (fiber to the premise) and expand our high speed broadband footprint to an additional 13 million locations where AT&T will be able to offer a pay TV and high speed broadband bundle," AT&T wrote in an SEC filing.
The expansions would happen within by 2018, AT&T said, as combining the companies will let AT&T gain "cost synergies" of more than $1.6 billion a year by 2017. The savings would largely be due to lower programming costs from increasing AT&T's size and bargaining power.
Verizon and the rest of the country's biggest Internet service providers joined forces to argue that so-called "common carrier" regulations for utilities shouldn't be applied to broadband.
Such rules would force the Internet service providers (ISPs) to innovate less and spend less money than they do today on network upgrades, they argue. Yet Verizon obtains a variety of perks from the government for its FiOS Internet service by using public utility rules to its advantage, a new report drawing on public documents says.
“It's the secret that's been hiding in plain sight,” said Harold Feld, senior VP of Public Knowledge and an expert on the Federal Communications Commission and telecommunications. “At the exact moment that these guys are complaining about how awful Title II is, they are trying to enjoy all the privileges of Title II on the regulated side.”
“There's nothing illegal about it,” said Feld, who wasn’t involved in writing the report. However, “as a political point this is very useful.” Bruce Kushnick, telecommunications analyst, points to a New Jersey franchise agreement which states, "The construction of Verizon NJ’s fiber-to-the-premises FTTP network (the FTTP network) is being performed under the authority of Title II of the Communications Act of 1934 and under the appropriate state telecommunications authority granted to Verizon NJ."
The network interconnection deals between content providers and Internet service providers (ISPs) are often shrouded in secrecy, at least when it comes to the question of whether any money is changing hands. But it's possible to figure out which companies are directly exchanging traffic with ISPs by examining publicly available information if you know where to search.
Analyst Dan Rayburn shows which ISPs the likes of Google, Amazon, Facebook, Microsoft, Netflix, Pandora, eBay, and Apple have direct connections with. The connections are "public information that anyone can look up simply by knowing the networks' Autonomous System number (AS) and looking at their peers," Rayburn wrote. "You don’t have to be a networking engineer to look at BGP [Border Gateway Protocol] relationships and see what is taking place. It’s all public info."
It's long been rumored that Apple is building its own content delivery network (CDN), and now it appears that the company is negotiating paid interconnection deals with "some of the largest ISPs in the US" in order to deliver Apple content to consumers.
Dan Rayburn, an analyst with extensive contacts in the CDN and Internet service provider industries, reported on Apple's latest moves.
"In February I blogged about a new group formed inside of Apple in 2013, tasked with building out their own CDN to deliver Apple software updates, apps and other Apple related content," Rayburn wrote. "Since my post, Apple has been very busy with their build-out deploying a lot of boxes running Apache Traffic Server and buying a ton of transit, co-location, wavelengths and other infrastructure services. Their CDN is quickly growing, and it won’t be long before we start seeing a portion of their content getting delivered from their new CDN."
According to Rayburn, "Microsoft, Google, Facebook, Pandora, EBay, and other content owners that have already built out their own CDNs" are also paying ISPs for interconnection.