(Fifth in a series. Also see: Please, sir, may I have another?; How wireless hype is hurting America; The great Verizon FiOs ripoff; and Broadband wars: The battle for New Jersey has begun.)
To summarize the situation in New Jersey, Verizon, New Jersey, the company in charge of the state's Public Switched Telephone Networks (PSTN), (the state's telecom utility), was supposed to have 100 percent of New Jersey upgraded by 2010 with a fiber optic wire that would replace the old copper wiring and could deliver a residential service capable of 45 Mbps in both directions.
In March of 2012, the State's Board of Public Utilities issued a show cause order for Verizon to explain why they never completed this state requirement, especially since state laws were changed to give the company billions of dollars for the upgrades.
This action started because two small towns in Cumberland County -- Greenwich and Stow Creek -- were never wired with fiber optic, and in fact don't even have reliable phone service.
Verizon responded by claiming they fulfilled their requirements. Now the question is whether the state commission will actually hold Verizon accountable for this obviously false claim. Verizon hasn't wired about 50 percent of the state with anything, and its fiber optic service, FIOS, is in only 60 percent of the state's 70 communities.)
Now a new wrinkle has hit this story -- the Cantenna.
That's right, a wireless antenna that looks like a can -- Cantenna. Though it sounds like a Mexican drinking hole in an old, dusty western, Verizon has been rolling out Cantenna to rural areas so that they don't have to bother upgrading the wires -- just let 'em buy a can.
And Verizon Wireless has stepped into the picture to offer these two small town wireless services by constructing a new tower in the town, most likely for 'Cantenna.'
The Cantenna, with its overhyped "4G" service, is ostensibly "designed for use in rural and remote homes that can't get DSL or cable." But it can't provide cable television, nor is it competitive even with DSL -- not to mention FiOS -- as it is a wireless service that's very expensive to use.
Every resident of these two towns already has a wire for phone service. Why wasn't it upgraded over the last 20 years? And why is the wireless company offering services? Aren't wireless services supposed to compete with wireline services?
Let's Play Kick the Cantenna: Why wireless is not a substitute for wireline.
Verizon is marketing Cantenna as HomeFusion:
Let's compare Cantenna to FiOS: (See Chart)
Or even Verizon's DSL
So, wireless Cantenna vs. wired services aren't even close.
Cantenna's $60 plan allows for about three HD movies per month and doesn't come with phone service. It does not come with cable and can't do cable. For someone who wanted to stream the national average of 33 hours of TV a week (or 132 hours a month per person), one month's viewing for one person would come to $790 a month. (Using the highest price at $120, with $10 per GB later)
We note that the prices mentioned are not actual prices but "listed prices." Verizon places a caveat that "gov't taxes & our surcharges could add 6% - 40% to your bill" -- and notice that it is their surcharges, meaning additional fees added to the bill because they can get away with it, as compared to putting these extra fees into the actual listed price customers see in their advertisements.
But Verizon customers who currently don't have FiOS may have no choice but to go wireless. Verizon has announced that FiOS is no longer being built out and appears to be on the way to abandoning DSL, meaning that they are closing down the wireline services to force people onto Cantenna. Gigaom blog writes: "The slow death of DSL will cause the rapid rise of expensive broadband for underserved areas if Verizon's Fusion home broadband service is any indication."
A Cantenna of Worms
So here's where things stand:
Customers all over New Jersey -- residences, business, schools, libraries, the government -- all paid higher premiums since 1993 to upgrade the entire Public Switched Telephone networks, (PSTN) to an all-fiber network.
First, Verizon pulled a bait and switch and instead of upgrading everything to fiber optics, rolled out DSL over the old copper wiring.
In 2006, Verizon rolled out FiOS, claiming it is a separate network -- even though all funding comes directly from the original monies supposed to be used for the PSTN upgrades.
Verizon cherrypicks where to actually lay the FiOS cable, only choosing 60 percent of New Jersey's 70 communities, or about 50 percent of the customers. And because even where it's available Verizon FiOS only has an uptake rate of 25 to 30 percent, that translates to 12.5 percent of the state's customers actually using the fiber-optic services, while 50 percent paid for upgrades they will never get.
Customers who won't get FiOS are actually in worse shape than they would otherwise have been, because both Verizon and AT&T are expected to abandon DSL and are not doing upgrades of the copper infrastructure, according to the installers we talked to from the unions. Also, Verizon in some states got rid of any obligations to provide services as "last resort" -- meaning if it breaks, screw Aunt Ethel.
Now that some New Jersey communities are complaining that they didn't get what they paid for, Verizon is offering them an extremely expensive substandard (third-world-style) service from their wireless division -- which, for good measure, has been hugely subsidized by the landline business and continues to be subsidized because it gets to use the FiOS lines everyone paid for.
What's next? Stay tuned as we find out: Will the State hold Verizon accountable and stop this ridiculous bait and switch and require that the companies actually do what they were paid to do and rewire New Jersey? Or will it cave in and kick New Jersey residents in the can?
Craig Settles: Communities: Get Off Your Assets and Get Better Broadband
I imagine that Verizon will go to the Congress or the SCOTUS and not only get the protection they've paid for but handed a big wad of money for taking up their time...
FiOS has been offering 15-150Mbs download tiers for a few years now and the new FiOS quantum services released last month now go from 15-300Mbs down and in most cases 35 or 65 up. They haven't been 15-50 for a long long time.
I'd hate to see what people pay you to be a "Telecom Expert".
They lied; from day one we couldn't speak to each other when my s.o. went to the rural area to care for his elderly mother. We were promised that that area was covered. Coverage was so bad we couldn't have a decent conversation, and had to resort to calling through his mom's land line.
AT&T isn't perfect, but he can at least call from his cell at his mom's house, which is all we asked for to begin with.
If the regulators in the various states allow this to continue, and they obviously will, then the people will be hosed yet again, forever. There's no secret these telecom companies want the profits from the regulated side to pay for the costs of their "upgraded" services that are unregulated, because it's guaranteed income stream. That profit that should be used to pay for keeping the copper networks up and repaired is being funneled to generate more profits from other services.
What a great scam. I'm in an AT&T area and I see it every day. The infrastructure is crumbling. But hey, regulations are bad for business profits, or at least the actual following of the regulations is bad for business. Corporate greed = 1, consumers = 0 (again).
NJ regulators should simply slap Verizon with a fine equal to the total amount of money they've received for the upgrades, add the interest at a minimum of 10% annually since the beginning, add 50% as a penalty for the crime of screwing the consumers and call it good. Oh yeah, make them write a check to the state treasury by tomorrow.
Let me know how that works out.