US Telcos Are Giving Up On Residential Broadband And Nobody Seems To Have Noticed

from the ill-communication dept

We’ve noted for a while that US telcos have been making it very clear they no longer really want to be in the residential broadband business. While profitable, it’s not profitable enough, quickly enough for Wall Street’s liking. And since upgrading aging DSL lines in rural or less affluent urban markets is expensive, these companies have largely decided to freeze most major fiber upgrades. Not only that, many of these companies (Windstream, Frontier, CenturyLink, AT&T, and Verizon) have been refusing to even repair many of the lines already in service.

The problem is that as these companies exit and neglect these underserved markets, cable giants are being left with growing monopolies across huge swaths of the US. Limited competition means less incentive to compete on price, or fix the cable industry’s often comical customer service. And while some believe 5G will magically come in and somehow fix this problem, that’s not likely to happen for the same reason fiber isn’t universally deployed: companies don’t want to pay for to connect fiber to the nation’s rural and less affluent urban communities.

Aside from the reduction in competition, another problem with telcos just giving up on residential broadband is that many of these networks were heavily taxpayer subsidized. Regulations in many states (which telcom lobbyists have voraciously been assaulting for years) also protect the elderly and poor from having connectivity stripped away. That’s not really stopping companies like CenturyLink, which recently quietly froze all network upgrades, and is now signaling that in may leave the residential broadband market almost entirely to focus on more immediately profitable enterprise offerings after acquiring Level 3.

AT&T and Verizon have shifted all of their focus toward wireless and trying to become (however ham-handedly) the next major players in the online video advertising space. Another major telco, Windstream Communications, recently declared bankruptcy after years of network neglect resulted in a flood of customers headed to the exists. There’s a similar story playing out at Frontier Communications, which first gobbled up Verizon’s unwanted assets in growth for growth’s sake, but now is being forced to sell some territories off as it struggles with the massive debt load.

Again, wireless isn’t going to fix this because the same rules apply: 5G needs fiber lines carriers don’t want to invest in in rural or less affluent broadband markets if the ROI is low. And while many communities have turned toward building their own broadband networks instead, these very same telcos (with the help of the Pai FCC) have lobbied to pass state laws banning towns or cities from building the better broadband these telcos have long refused to.

It’s a pretty massive problem with an exponential impact on numerous sectors that tends to get lost in mainstream tech conversations surrounding “big tech” giants. But it’s a problem that’s not going away and remains hugely important all the same.

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Companies: at&t, verizon

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Comments on “US Telcos Are Giving Up On Residential Broadband And Nobody Seems To Have Noticed”

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AEIO_ (profile) says:

"Windstream recently declared bankruptcy after years of network neglect resulted in a flood of customers headed to the exists."

Errr, no. Well maybe, but the thing that killed them was management, and accountants and lawyers all happily chatting together.

after a judge found Windstream’s attempt in 2015 to shift its valuable fiber optic network assets off its own books into a sheltered real estate investment trust (REIT) … violated the rights of bondholders which hold some of Windstream’s debt.

I don’t get the details, but someone played accounting games and bet the company. And lost.

Kinda like the captain of a boat hitting an iceberg, sinking the boat, and saying: " Wow, I’d sure hate it if I owned that." And just walking away from the mess to pilot a new boat. (Well, swimming away; you know what I mean.)

James Burkhardt (profile) says:

Re: Re:

Your opinion only holds together if Windstream wasn’t having financial difficulties prior to spinning off the fiber optic network. If however, as described in the article you got that quote from, The fibre optic network was the only profitable portion of Windstream’s business, then it seems likely the characterazation provided by Karl is accurate: years of network neglect lead to a death spiral in its non-fiber operations. To use your analogy, they then built a new boat for the fiber trade, intending to run the non-fiber ship into an iceburg, walking away with the valuable business. That was the whole point of the Judge’s ruling: the move was a clear attempt to shelter the fiber network from an eventual bankruptcy, but the creditors had a stake in the fiber network and so transferring it to another corporation was improper.

Anonymous Coward says:

It may be the major Telcos that are doing this, but the local telcos are upgrading. My local telco Co-op has fiber to the home, and as soon as Comcast price for 16/3 went up, I switched. In the year that I have had fiber my price for 100/100 has dropped twice now. I only pay 83 USD a month for my fiber. AT&T has been pulling out of some of the rural markets around here and my local co-op has taken over. I know the power company that is also a co-op they have been offering fiber, as they put up new power line poles they are also running fiber and offering the rural area fiber to the home.

So not all Telco’s just the Major Telco’s that dont want to be a Telco anymore.

Anonymous Coward says:

Re: Re:

Certainly, smaller shops have an opportunity to sweep up the customer based in the rural areas.

In my case, AT&T has refused to provision new DSL circuits. This has led to a frustrating situation where buyers of a house that had DSL previous cannot get DSL after purchase.

Comcast refuses to deploy their trash this far from the central city area, and no other wired providers exist yet. All that is available is one or two fixed wireless providers who have obscene prices and low caps.

There has been an attempt to get a local fiber ISP up and deploying fiber now for something like 5 years, but it feels like it’s never going to happen, and until it does it feels like the internet dark ages around here.

alternatives() says:

2 rural locations with poor internet

While I can point to a now-in-Denver person who works for one of big providers of Internet/TV and his rural home that had "high speed DSL" when he bought the place and still has the same service due to a lack of upgrades by AT&T there is a lack of access to infrastructure that exists.

In front of 2 other rural places is an AT&T fiber run the locals can’t tap, and the other has Time Warner -> Spectrum fiber on poles and GTE -> Frontier fiber in the ground. State law has Co-Op internet law but said law doesn’t allow any way to tap that infrastructure to provide service where AT&T won’t.

Anonymous Coward says:

Re: We noticed

Disregard for public concern lies at the core of paradigm shifts in politics.

If a representative does not represent the public, who exactly do they represent? The political bodies happy to continue doing whatever they wish unaccountable prefer to deride that motive for representation as populism.

Edgar Allen says:

Re: Re: Starlink to the rescue

The incumbents are about to GIVE Elon Musk and Starlink this entire space (pun intended).

Elon has already said that their primary focus will be latency so when it is up Starlink will be the only choice for stock traders (major ISPs will no longer have a monopoly, Musk will).

No US ISP is planning a big invasion of China (Musk may have trouble with their Great Firewall) but those satellites will get through just like the BBC news got into occupied Europe. (Governments around the world will hold secret discussions about sending assassins)

Cell phones already proved that a large area can be covered cheaply. Now Starlink can show that it can be done with high bandwidth too.

Once he has a minimal network up watch for the Military to demand that they get their own network.

If I were designing the Starlink network it would be IPv6 only. (Perhaps US ISPs would urge their customer web sites to offer IPv6 connections as well.)

Governments were put in place by citizens to keep the "dog eat dog"
of life at bay.

Libertarian billionaires forget that the real world is filled with
assholes as greedy as them and that without Government "The Koch
Brothers’ Enforcers" would be taking their shit !
Ed Allen

Uriel-238 (profile) says:

Re: Re: Re: Greedy assholes

Billionaires have been a curiosity of psychology since they were only multimillionaires. These are people who have so much money they can’t help but make money just by having their funds in the economic pool (say, a bank account). They’ll never need the amount they have, and yet they have to be schooled by the Church or secret societies to give away some of that money to public projects.

Alfred Nobel and Andrew Carnegie got haunted by Dickensian ghosts and realized they’d be despised in history. John Pierpont Morgan couldn’t care less what the little people thought of him, and JP Morgan Chase doesn’t care either.

One would think that at some point the Maslowian sense of community would kick in, and the embarrassingly rich would notice their (typically ill-gotten) gains are imposing a burden on the economy at large, and would compensate for that. But no, once they run out of centuries old bourbon and houses of marble and private restaurants and helicopter pools and still have absurd amounts of lucre, they’re happy to let it just accumulate in the hands of banks and investment funds.

My first fantasy if I had a billion dollars would be to offer free high-speed wifi to the entire planet. (I don’t know if $1B can buy that much internet — I’d scale the project accordingly). And the question is, why don’t captains of industry have and fulfill such dreams? Why are they content just to let their lucre soak up more and more from the economy like a pile of rock salt in the middle of a greenhouse? Who hurt them?

More pedantically, why does the Maslow model fail the very rich? Without a kick in the pants, they universally lose interest in the greater community.

Wendy Cockcroft (profile) says:

Re: Re: Re:2 Greedy assholes

More pedantically, why does the Maslow model fail the very rich? Without a kick in the pants, they universally lose interest in the greater community.

It’s because, once they get ridiculously rich, two things happen.

  1. They worry that the people around them who have less than they do aren’t really their friends, they only want to be around them for the money, so they get a bit paranoid. It doesn’t help that this is often true.
  2. They develop a sense of entitlement and delusions of grandeur in which they are far above the smallfolk like ourselves. They convince themselves that they deserve their vast wealth and that anyone who wants a part of it is basically a thief trying to rob them — and thereby drag them down to smallfolk status.

The kick in the pants is usually effective when it threatens their sense of worth and value; in Carnegie and Nobel’s case, they liked to think of themselves as universally beloved good people. When that was proven untrue, they went into PR overdrive to present themselves as universally beloved good people.

We need to kick ’em in a different way when their sense of worth and value is predicated on a self-image as a shark with attitude.

Anonymous Coward says:

So let me get this straight.

The telecom monopolies poured mountains of cash into regulation to block competition. State by state. County by county. Apartment complex by complex. Rather than pour that funding into quality service, even when taxpayers subsidized the effort, instead those funds were dumped into digging moats to prevent other parties from servicing the need.

Now that the moats have been dug they’re climbing onto their Morgan and riding into the sunset. Leaving a broken mess of regulation in their wake and choosing just not to service the country.

The telecoms took that taxpayer funding and made sure no one could provide the service at all.

That’s a clear statement. Null and void regulation out there with action at federal level and clear the way for mom and pop ISP’s to rule the day again.

Anonymous Coward says:

Again, wireless isn’t going to fix this because the same rules apply: 5G needs fiber lines carriers don’t want to invest in in rural or less affluent broadband markets if the ROI is low.

That’s half the story. 5G needs the same fiber trunk investment as FTTH… and it replaces the need for "last mile" fiber with the need for "last mile" 5G hotspots. So essentially, 5G IS FTTH, just with the last mile component being wireless instead of wired.

And the telcos have already stated that they’re not going to deploy those low-coverage high-speed 5G clusters anywhere but in profitable dense urban areas — likely where the Fiber trunk lines are already capable of handling the traffic.

Anonymous Coward says:

In the case of AT&T, their fiber build out was in part due to an agreement with the FCC to deploy fiber to 12.5 million premises.
"AT&T … has said the total number of planned fiber connections is just two million more than the amount it would have built even if the merger had not been approved."

But, they’re still 2 million over the desired limit, so this July, when the 12.5 million target is reached, expect AT&T to be a lot more selective where they deploy.

Berenerd (profile) says:

Funny story...

I was talking to a few Verizon techs on Monday when they were installing a new gig line here in my office. This was ordered from our central IT department, so I had no idea we were getting an upgrade. I told the techs that I had no idea that it was available in this area yet. Their response was "90% of the state has it available, just normal homes don’t want to pay $2800/month for the service." 90% of Massachusetts could get gig service, but the price tag is too high. My company isn’t even paying $2800/month. Verizon is just the carrier but AT&T is the "provider". Through AT&T we are paying something like $900/month for this.

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