Windstream To Farmer: Sure, We'll Give You Fiber Broadband -- For $383,500

from the do-not-pass-go,-do-not-collect-$200 dept

According to the FCC's most recent Broadband Deployment Report, 55 million Americans -- 17 percent of the population -- lack access to advanced broadband, and over half of all Americans lack access to broadband at speeds of 25 Mbps down, 3 Mbps up. When these underserved communities try to do something about it, they usually run into state protectionist laws written by ISP lawyers to protect regional duopolies. And when these duopolies are willing to connect them, it's often at an absurdly steep premium.

The latest example of this comes via Ars Technica, which tells the tale of a Nebraska farmer who simply wanted something better than the 1.5 Mbps connection he received from Windstream. That line often struggled to deliver him even 512 kbps, so he asked Windstream how much it would cost to connect him with pure fiber to Windstream's core network. According to Windstream's own fiber map, he lived about a quarter mile from the ISP's core network, but Windstream claimed the distance was more like 3.5 miles -- and the price tag to do the work was a rock bottom $383,500.

Mysteriously, when Schneider turned to a smaller local competitor, it was willing to do the same work for a mere fraction of the cost:
"Fortunately, it looks like Schneider will get fiber service for a fraction of that price from a second network provider called Northeast Nebraska Telephone Company (NNTC). Even though the Schneider farm is completely outside NNTC’s service area, even for copper, NNTC told him it would build the fiber line for a more reasonable $41,915.88. While nearly $42,000 is still a lot, Schneider noted that “it is a one-time investment that will enhance my quality of life and property value significantly."
When pressed by Ars as to why Windstream wanted to charge eight times as much to connect the farmer, the ISP didn't much want to talk about it:
"What isn’t clear is why Windstream would charge nine times as much as NNTC. Ars contacted Windstream, which confirmed the $383,500 price, saying “the total quoted was for 36 months of dedicated Internet service." We also asked Windstream how it calculated the estimate but did not receive an answer.
That's because these totals are often pulled entirely out of an ISP's ass, and are usually artificially inflated to deter customers from signing up for service -- since they don't like the slow ROI showing up on their quarterly results -- even if the line is profitable in the long term. Only in the broadband sector do you so consistently see companies that don't actually appear to even want to be in the business they're in, with such an obvious disdain for the customers they "serve."

Of course even if the farmer had been able to afford Windstream's steep price tag, there's no indication the Windstream network would have performed. A recent FCC study on which ISPs deliver advertised speeds ranked Windstream as the very worst U.S. ISP when it comes to delivering the bandwidth they advertise and users pay for. The ISP was also fined $600,000 by the Atlanta AG last year for false advertising, after state leaders were flooded with complaints about under-performing broadband connections and its congested core network.

This is all of course thanks to the fact that Windstream sees so little broadband competition that there's absolutely nothing requiring it to upgrade networks or give much of a damn. We've also consistently deregulated the broadband industry to the point where most regional regulatory agencies are utterly toothless, something we were told was supposed to free the industry from restrictions and result in a broadband free market Utopia. In reality, the end result has been an endless flood of charming anecdotes like this one, worth remembering the next time an industry lobbyist is busy arguing that U.S. consumers are simply awash in robust market competition.
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Filed Under: access, broadband, deployment, farm, fiber, nebraska
Companies: nntc, northeast nebraska telephone company, windstream


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  • icon
    That One Guy (profile), 14 Aug 2015 @ 2:31am

    Tossing some numbers about

    So Windstream defended their insane quote by claiming that it 'included' 36 months of internet service, one would assume alongside the installation costs for the fiber itself.

    Assume for a moment that installation costs would be equal to what NNTC quoted, $41,915.88. This is despite the fact that Windstream, unlike NNTC, already had their network set up very close, either a quarter of a mile or 3.5 miles, which one would assume would significantly lower installation costs, but for the sake of the example we'll set it as the same.

    So, reducing the overall costs by the installation costs we get $341,585. Divide that by 36 to see what the monthly rate would be, and you get an absolutely jaw-dropping $9488 per month.

    Either they really didn't want to deal with him, but didn't have the honesty to admit it, or they arrogantly assumed that they had him in a bind, and he'd either pay out the nose, or go without. Unfortunately for them it seems they forgot to buy enough politicians beforehand, and there was some actual competition in the area willing to jump at the business opportunity presented.

    reply to this | link to this | view in chronology ]

  • icon
    mhammett (profile), 14 Aug 2015 @ 4:56am

    Lumping of ISPs

    I wish publications would do a little more to not lump all ISPs into one barrel. Sure, this article does a little more than normal to make a distinction, but the general theme is still "ALL ISPS ARE BAD!!!!"

    It makes it hard for us independents to compete against the big guys.

    reply to this | link to this | view in chronology ]

    • icon
      Sheogorath (profile), 14 Aug 2015 @ 5:38am

      Re: Lumping of ISPs

      No, what makes it hard for independent companies to compete is the fact that they just don't have the same market presence as the big guys. And the moment they do have anything approaching the same market presence? Bam! Oligopoly.

      reply to this | link to this | view in chronology ]

    • icon
      Karl Bode (profile), 14 Aug 2015 @ 7:32am

      Re: Lumping of ISPs

      It's not to say one or all ISPs are "bad" or "good." It's more about MOST ISPs seeing so little competition they're unwilling to compete and upgrade networks. It's not some personal slight against "all ISPs," it's simply a fact of the market they reside in.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2015 @ 7:37am

      Re: Lumping of ISPs

      I'll agree to that when the l;arger ones stop acting like they deserve to steal from the public.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2015 @ 9:22am

      Re: Lumping of ISPs

      To me it sounds like a fantastic marketing opportunity: "We are small enough to care".
      No need to worry about the big boys; they'll keep alienating their customer base, driving business your way.
      Deliver on quality and service and engage the local community/-ies. See, that wasn't so hard.

      reply to this | link to this | view in chronology ]

      • icon
        mhammett (profile), 14 Aug 2015 @ 6:10pm

        Re: Re: Lumping of ISPs

        I do just that, but it gets kinda old everyone thinking you want to sacrifice their firstborn just because you sell Internet service.

        reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 14 Aug 2015 @ 6:26pm

          Re: Re: Re: Lumping of ISPs

          You're in an industry where the companies that people will first think of when the industry is mentioned have practically made it a contest as to who can screw their customers over the worst.

          You may not like what that means for you, but there's not much you can do about it other than show your customers that you aren't like that, and hopefully get a reputation that overshadows the industry reputation when people hear about you.

          reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 14 Aug 2015 @ 5:05am

    Even considering NNTC that has no network there, wouldn't it be profitable in the long term to get more people interested and then bring fiber there? I mean NNTC probably sees this. The initial investment may be steep but once they actually get there small expansions to cover more area are much less expensive. But Windstream has infr much closer to this guy and chose to ignore him because the investment would probably drop their immediate-term profits.

    And this is the problem with a pure profit focused society: we can't seem to accept earning less now to triple it in 10, 15 years and make shitloads more of money overall.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2015 @ 9:22am

      Re:

      ...we can't seem to accept earning less now to triple it in 10, 15 years and make shitloads more of money overall...

      Try applying for a bank loan for any project whose ROI requires at least 10 years or more and see how far you get.

      That's why we end up with public (or partial public) financing for stadiums and arenas: the banks don't want to 100% finance such projects.

      reply to this | link to this | view in chronology ]

  • icon
    Sheogorath (profile), 14 Aug 2015 @ 5:30am

    In reality, the end result has been an endless flood of charming anecdotes like this one, worth remembering the next time an industry lobbyist is busy arguing that U.S. consumers are simply awash in robust market competition.
    There's actually loads of competition. If you call a bunch of duopolies and triopolies competition, that is.

    reply to this | link to this | view in chronology ]

  • identicon
    Me, 14 Aug 2015 @ 5:41am

    Charter quoted me $450,000 for a 1.5 mile run of cable for internet. They do not care about a community need, only profit.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2015 @ 7:14am

    'Windstream sees so little broadband competition that there's absolutely nothing requiring it to upgrade networks or give much of a damn'

    much the same then, thanks to bought and paid for members of Congress, as almost every other main service or supply in the USA!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2015 @ 7:24am

    Comment re: Norway

    The Ars story had an interesting comment about Norway:

    I live in Norway and had the same problem ... only here you can lay your own fiber to your central. ...

    ... i found out that if you order fiber cable direct from China, its dirt cheap, and i ordered 8.2 miles of fiber ...
    In about 4~5 hours we had all the cables hanging, 2 man in the MEWP, 1 man driving a pick-up to role out the cable.

    Cost
    $3200 cable.
    $250 fastening matrials
    $300 2x fiber to copper network converter
    $200 connection cost
    $100 for beer and stakes on the grill for the people helping.
    $130 month for a 200/200Mbit business line. (including rent for use of the poles)
    Total cost about $4000.

    reply to this | link to this | view in chronology ]

  • icon
    John Fenderson (profile), 14 Aug 2015 @ 8:29am

    Old game

    I'll never forget in the pre-broadband days when I wanted two additional phone lines run to my house. In the city. The phone company wanted a bit over $10,000 to do this. During this debacle, I learned that it was company policy to avoid putting in more trunk lines than there was current demand for, so unless you got lucky and there happened to be unused capacity, if you wanted more than one phone line then you had to pay for the company to add additional trunk lines.

    reply to this | link to this | view in chronology ]

    • icon
      Derek Kerton (profile), 14 Aug 2015 @ 10:54am

      Re: Old game

      My fave was in 1997 before DSL was available, I was using a modem to get 56k. I figured I would order a second phone line and bond two modems for 112k.

      I put in the order, paid a premium for the second line (first lines are cheaper "lifelines" while seconds are considered a luxury), and then PacBell came out and installed my second line.

      I bought the "shotgun" modem that can bond two dial-ups into one PC, installed it all, got it fired up, and...

      ...56K!!! WTF!!?

      Well, it turns out, the telcos had developed splitters that could take one voice phone line and split its 56k capacity into two voice phone lines, each with its own number. They had simply gone to the edge of the apartment, installed a splitter on my line, and activate line 2 on the yellow and black wires. My technology then bonded the yellow and black back into the green and red. Yay. They split it, and I recombined it about 40 yards apart. Net effect: zero, of course.

      DSL arrived a year later, and I was just about the first customer. That install was an experience in itself. Two days, and three trucks and more before they figured it out.

      reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 14 Aug 2015 @ 11:55am

    I love the numbers and Claims

    Anyone live in RURAL AREAS??

    "55 million Americans -- 17 percent of the population -- lack access to advanced broadband, "

    Here is what has happened..
    The Main lines run along the highway..(copper/cable/fiber/...) along with that we can add 2 more. Cellphone and SAT..
    If you have used the last 2, then you should realize they are NOT high speed.

    Our Gov has paid the Major phone corps money, (I THINK TWICE, in the last 15 years) to get the fiber lines out to everyone..

    Its really strange that they can claim 17% dont have access. when the only access they can/will have is Cellphone.

    Construction is:
    Major cities first..
    Smaller areas, next..
    Freeway access, for cellphones.
    Jump points for Smaller towns and cities..

    THEN those small towns, (generally Cable/DSL) have to get the connections OUT to the surrounding area..
    But even in the larger Cities..Copper still rules the day from the HOUSE to the nearest Main junction.

    What could be done with 2-3 fiber lines to every house?
    You could turn every house into a Cellphone base
    You could give every person a Wireless phone with a range of the WHOLE town..
    You could give Electrical power
    You could give every channel in the world to them..

    But who would be upset with 1-2 services being paid for all this? Every company that has their fingers in the pot..

    Want an interesting thought?
    Fiber could supply electrical power to every home at a MUCH greater efficiency then copper. Copper looses about 1/4-1/3 of its strength running long distances..

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Aug 2015 @ 6:14pm

      Re: I love the numbers and Claims

      Physics check. Fiber cannot supply electrical power. Total power of the light in a typical fiber is a fraction of a milliwatt. Compare with the multiple kilowatts required for electrical power. Broadband and telephone can both be carried by the one fiber connection, but not power as well.

      reply to this | link to this | view in chronology ]

    • icon
      mhammett (profile), 14 Aug 2015 @ 6:15pm

      Re: I love the numbers and Claims

      Fixed Wireless serves most residents not served by DSL and cable.

      reply to this | link to this | view in chronology ]

    • icon
      Sheogorath (profile), 15 Aug 2015 @ 2:41pm

      Re: I love the numbers and Claims

      Fiber could supply electrical power to every home at a MUCH greater efficiency than copper.
      Sounds great. *does a quick double take* Hang on, fibre optic cables are made out of glass, which is an atrocious conductor of electricity. Light only, boyo.

      reply to this | link to this | view in chronology ]

  • icon
    Ehud Gavron (profile), 14 Aug 2015 @ 3:07pm

    bs

    I called BS on this on the Ars forum and I call it BS here.

    Karl, did you do any research? Did you contact Schneider? Did you contact Windstream?

    If you took the ten minutes to reach out you'd find out there is a lot of smoke and no fire.

    How do I know this? Occam's razor.

    He who asserts must prove... and I find no proof (or pudding) in either Arstechnica's wive's tale or this retelling over a fireside chat with honey meade of the same tale.

    E

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 14 Aug 2015 @ 3:49pm

      Re: bs

      Unless you're claiming that Schneider is lying, then there's really no need to contact him, he's already said his part.

      As for contracting Windstream, what good would that serve, they too have already said their piece, so again, unless you're claiming that they too are lying, contacting them just so they can re-state what they've already said would be a waste of time.

      If you took the ten minutes to reach out you'd find out there is a lot of smoke and no fire.

      And what research was that? If it's just 'Occam's Razor', that's not research, it's more akin to an appeal to incredulity, 'I don't believe this could have happened, therefor it probably didn't'. Various ISP's have shown that they are more than capable of showing greed at this level, so it's hardly impossible that they would indeed demand an insane 'installation fee' of this magnitude.

      If you've got information showing that the story is false, by all means, present it.

      reply to this | link to this | view in chronology ]

    • icon
      mhammett (profile), 14 Aug 2015 @ 6:15pm

      Re: bs

      That's common in tech reporting.

      reply to this | link to this | view in chronology ]

  • icon
    Ehud Gavron (profile), 14 Aug 2015 @ 4:27pm

    He who asserts must prove. I didn't write this story and it's not my burden to prove it's false. Putting it on me is a good example of the burden of proof fallacy.

    http://www.nizkor.org/features/fallacies/burden-of-proof.html

    Your comments are usually the top (or second) in the best of the week. Better luck with the next one :)

    E
    P.S. I do have other reasons than Occam's... but for now we'll let this marinate as is.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 14 Aug 2015 @ 4:43pm

      Re:

      Again, unless you're claiming that Schneider is lying, and have evidence to support this claim, then the story is almost certainly as reported.

      Schneider made his statements, Windstream made their statements, unless you've got evidence that one or both of them is lying, or that Ars made the story up, saying 'I don't believe it happened' is meaningless. You can not believe it all you want, but unless you have evidence that the facts as reported are false, your disbelief doesn't change anything.

      You said that even a little bit of research would show the story false, and if that's so you should have no problem providing the evidence you found that backs up that claim. What did you find that shows the story to be false?

      reply to this | link to this | view in chronology ]

    • icon
      Sheogorath (profile), 15 Aug 2015 @ 4:02pm

      Re:

      Indeed, he who asserts must prove. However, who's actually making the assertion, those reporting the story or the farmer who wanted fibre Internet?

      reply to this | link to this | view in chronology ]

  • icon
    Ehud Gavron (profile), 15 Aug 2015 @ 7:35pm

    fiber

    Fiber-optic circuits don't ever supply power as parent says.

    Aerial fiber (/ outdoor fiber) includes a ground conductor (copper) so that the $11/hr kid with the spray paint can detect it in the street.

    No power is *ever* delivered on any FO circuit I'm aware of anywhere in the US.

    He who asserts must prove.

    E

    reply to this | link to this | view in chronology ]

    • icon
      mhammett (profile), 15 Aug 2015 @ 7:48pm

      Re: fiber

      Well, there is hybrid fiber\power cable for tower applications. The cellular industry uses it pretty heavily now. For actual infrastructure, it's not impossible, just not done and not overly practical.

      reply to this | link to this | view in chronology ]

  • icon
    Ehud Gavron (profile), 17 Aug 2015 @ 9:40am

    Microwaves

    Yes, microwaves. It's a word people throw out as a lifeline to sinking sailors. Sadly the word is so obsolete because almost everything we do with radios now *is* microwaves.

    Any frequency between 300MHz (100cm wavelength) and 300GHz (0.1cm wavelength) is a microwave frequency.

    That includes every WiFi and Bluetooth device you have. It even includes those old 900MHz phones you threw out when you upgraded to DECT. Even garage door openers - the dumbest radio devices out there - are in the microwave band (315MHz).

    You don't have to get gear from Ubiquiti (although I use their gear and like it) or Motorola's Canopy (although I've used that and like it) or ...

    Pringles-can antennas and standard WiFi will work great. Or there's always the Ubiquiti radios.

    But "Microwave" is not the answer. It's a fact.

    reply to this | link to this | view in chronology ]

  • identicon
    L Ford, 18 Aug 2015 @ 12:53pm

    Fiber

    Windstream and the rest of the ISP's have been screwing everyone for years and will do so every chance they get. They charge $1000's every month for a gigabit fiber connection, then soon as competition comes in town, prices drop to a couple of hundred dollars (for those not already under contract). WTF. These companies are thieves.

    BTW, I've used satellites for internet and have been to 100's of sites that used it. The latency is horrible, but the speed isn't bad once you get going. That was 2000-2005, it's probably improved since them.

    reply to this | link to this | view in chronology ]

  • icon
    Tanner Andrews (profile), 20 Aug 2015 @ 2:25am

    Re: Fiber [and satellites]


    [sattellite] latency is horrible, but the speed isn't bad once you get going. That was 2000-2005, it's probably improved since them.

    Probably not. The speed of light has stayed pretty steady for the past few decades. The latency is essentially the time for signal to get up to the Clarke belt and back.

    reply to this | link to this | view in chronology ]

  • identicon
    Addrick, 11 Dec 2016 @ 6:53pm

    Pure lies, and refusal to help

    I and my family have been customers of windstream for about 2 years now, not in any way voluntarily of course. They own the lines and refuse to upgrade (because upgrading would bring in competition) I've asked multiple different ISP's for assistance and even filed a formal complaint with the Federal Trade Commission about the monopoly that windstream has put our community in.

    So, about two years ago we moved to Rural Georgia, and my family contacted windstream, we were "Promised" nothing less than 1MB/s and no more than 3MB/s, This was completely false. We never once pushed over 240KB/s. One year later, we receive a call notifying us that our service would be reduced to 256kbps (going from Bytes to bits) so that they could properly upgrade our service in the coming months, and that we were in line to be upgraded. This was true and false. We called them 6 Months later, expecting delays in the upgrade and then we were informed that we were never receiving 1MB/s, and they never made the phone call and clearly anyone we spoke to was ill-informed on the matter.(Oh and we're not due for an upgrade on these 30 year old lines) This company, it's employee's, and it's management are clearly sharks, praying on those unable to move to a more digitally diverse community.

    I close with this, If you're debating about moving to an area, look deep into who your ISP is, what their track record is, and how many lawsuits are against them for monopoly, quality of service and whether or not they have any competition. We made this mistake, I hope you all learn from it and don't repeat it.

    reply to this | link to this | view in chronology ]

    • icon
      mhammett (profile), 12 Dec 2016 @ 4:35am

      Re: Pure lies, and refusal to help

      Communications is *always* measured in bits per second, not bytes per second. It sounds like things were just fine until whatever upgrade thing started happening.

      reply to this | link to this | view in chronology ]


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