AT&T and Frontier have let cellphone networks collapse, Calif. regulator finds

A pair of scissors being used to cut a wire coming out of a landline telephone.

AT&T and Frontier have let their copper cellphone networks deteriorate by way of neglect since 2010, leading to poor service high quality and plenty of prolonged outages, a report commissioned by the California state authorities discovered. Prospects in low-income areas and areas with out substantial competitors have fared the worst, the report discovered. AT&T particularly was discovered to have uncared for low-income communities and to have imposed extreme worth will increase including as much as 152.6 p.c over a decade.

The report was written in April 2019 however saved non-public as a result of information submitted by the carriers was deemed confidential and proprietary. The report lastly grew to become public after the California Public Utilities Fee (CPUC) ruled in December 2020 {that a} redacted model needed to be launched by mid-January.

A abstract of the CPUC-commissioned report recognized six key findings:

  1. Service High quality has deteriorated: Each carriers exhibited a better relative variety of outages and longer time required to revive service for outages lasting greater than 24 hours.
  2. Demonstrated lack of resiliency: AT&T and Frontier usually are not sustaining networks to resist environmental and weather-related situations. Networks usually are not sturdy, each Incumbent Native Change Carriers (ILECs) have reduce on preventative upkeep expenditures.
  3. Disinvestment in Plain Previous Phone Service (POTS): AT&T and Frontier are placing little or no funding into infrastructure that helps solely Time Division Multiplexing (TDM) service. Each ILECs are counting on worth will increase and buyer inertia to keep up income stream.
  4. Elevated funding in broadband improves POTS service high quality: AT&T and Frontier areas with greater broadband funding have a better degree of POTS service high quality and higher efficiency on all [service] metrics.
  5. AT&T is specializing in greater earnings communities: AT&T wire facilities serving areas with the bottom family incomes exhibit greater hassle report charges and longer out-of-service durations than areas in greater earnings communities.
  6. Direct relationship between quantity of competitors and repair high quality outcomes: Areas with restricted or no competitors expertise decrease service high quality outcomes. Each AT&T and Frontier put extra funding and a spotlight in areas with greater charges of aggressive choices.

Frontier’s California community was owned and operated by Verizon till Frontier bought it in April 2016.

Lengthy outages

AT&T and Frontier each repeatedly failed to satisfy the state’s minimal customary to “restore 90 p.c of all out-of-service hassle studies inside 24 hours.”

“The requirement to clear a minimal 90 p.c of out-of-service (OOS) studies inside 24 hours has by no means been met by AT&T since 2010. Verizon/Frontier met the OOS customary in solely two of the 96 months lined by this examine,” the report stated.

“AT&T has the monetary sources to keep up and improve its wireline community in California, however has but to take action,” the report additionally stated. “Frontier has a powerful curiosity in pursuing such upgrades, however lacks the monetary capability to make the required investments.” Frontier filed for bankruptcy in April 2020 whereas admitting that its monetary issues have been brought about largely by a “vital under-investment in fiber deployment.”

The issue has gotten worse over time, the California report stated. “With a number of particular exceptions, the standard of AT&T and Frontier legacy voice companies has steadily declined over the examine interval, with outages occurring extra continuously and repair restoration occasions getting longer,” the report stated.

The report additional described AT&T’s failure to put money into low-income communities on this paragraph:

Whether or not deliberate or not, AT&T’s funding insurance policies have tended to favor higher-income communities, and have thus had a disproportionate affect upon the state’s lowest earnings areas. For instance, the weighted common 2010 median annual family earnings for… areas that had been upgraded with fiber optic feeder amenities to help broadband companies was $72,024, vs. solely $60,795 for wire facilities with out such upgrades. Utilizing 2010 US Census information, we discover a clear inverse relationship between family earnings and all the principal service high quality metrics. Wire facilities serving areas with the bottom family incomes are likely to have the very best hassle report charges, the longest out-of-service durations, the bottom percentages of outages cleared inside 24 hours, and the longest occasions required to clear 90 p.c of service outages. The alternative is the case for the very best earnings communities.

AT&T’s quickly rising costs

AT&T “has raised its charges for legacy flat-rate residential service by 152.6 p.c for the reason that service was de-tariffed by the CPUC in 2009,” the report stated. The value will increase help a “harvesting” technique that maintains income “regardless of a large drop-off in demand” for landline cellphone service.

AT&T “has ceased energetic advertising of POTS, has degraded POTS service high quality, and as a substitute depends upon successive worth will increase and buyer inertia to keep up its declining POTS income stream,” the CPUC report stated. Regardless of years of regular worth will increase, AT&T “made minimal investments in exterior plant rehabilitation, and has additionally allowed service high quality for its legacy companies to say no.”

AT&T’s flat-rate cellphone worth in California rose from $10.69 per 30 days in 2006 to $27 in 2018, including as much as a 152.6 p.c enhance, the report stated. The largest will increase started in 2009. Frontier and its predecessor Verizon raised the flat fee by 30.6 p.c (from $16.85 to $22) over the identical timeframe.

AT&T’s “measured fee” service, through which the value varies by the variety of calls made, rose in worth from $5.70 in 2006 to $24.25 in 2018, a 325.4 p.c enhance. Frontier/Verizon’s measured fee costs elevated by 34 p.c in the identical time interval.

Telecom analyst Bruce Kushnick argued in a blog post today that cellphone costs ought to have “plummeted” through the years however that AT&T makes use of the income from its poorly maintained landline cellphone service to pay for upgrades to its cell community. Kushnick and his “Irregulators” group have been calling for investigations into these “cross-subsidies.”

“In October 2020, the Irregulators filed with the CA Broadband Council and CA Public Utility Fee (CPUC) claiming that AT&T probably has been overcharging prospects billions of {dollars} yearly, and that it has been taking the development budgets that ought to have been devoted to the cities and houses in California and as a substitute has been diverting them to wi-fi as a substitute of upgrading the state telecom utility,” Kushnick wrote immediately.

Although Frontier additionally raised costs through the years, it has not “carried out the intense succession of great worth will increase for its legacy residential POTS companies” seen with AT&T, the report stated. The report additionally stated Frontier hasn’t used the “harvesting” technique carried out by AT&T.

“Frontier, as a ‘pure-play’ ILEC, has a powerful incentive to keep up and to develop its buyer base, to not enable it to dissipate. These are all positives for Frontier’s future whether it is someway capable of reverse its monetary decline,” the report stated.

Established order

We contacted AT&T and Frontier concerning the CPUC report immediately and requested what steps the carriers have taken to enhance service high quality. We additionally requested the CPUC what actions it took in response to the report and whether or not AT&T and Frontier service has gotten higher or worse for the reason that report was written in April 2019. We’ll replace this text if we get any responses.

Frontier recently agreed to increase its fiber-to-the-premises community and enhance its poor service high quality in California as a part of a settlement that may assist the corporate exit chapter. Frontier additionally agreed to momentary worth freezes on voice service by way of the remainder of 2021.

AT&T in October stopped providing legacy DSL service to new prospects regardless of having didn’t improve tens of hundreds of thousands of legacy DSL traces throughout the US to fiber. AT&T continues to promote DSL to current prospects.

AT&T’s newest embarrassment occurred this month when a 90-year-old buyer in California paid for a Wall Street Journal print ad to complain about his gradual DSL Web service. The dangerous publicity shamed AT&T into upgrading his residence to fiber. However because the CPUC report notes, AT&T has didn’t adequately keep its community, leaving many DSL Web and landline cellphone prospects with outdated and unreliable service that continues to worsen.

Replace: Frontier issued a response, saying, “The report covers a time interval largely previous to Frontier’s possession and affords suggestions to regulators, not mandates to suppliers. Whereas Frontier doesn’t agree with all of the conclusions, we proceed working cooperatively to deal with service high quality and reported vital enhancements in our most up-to-date report back to the CPUC. We’ll keep a concentrate on high quality and persevering with to create advantages for our prospects and the California communities we serve.”

AT&T issued an announcement, saying, “The report is biased, ignores the persevering with transformation of the communications market, and depends on an outdated and flawed efficiency metric that has little relevance to prospects’ precise expertise. Holding prospects related is vital to us—and the truth is we’ve got exceeded the state customary for community reliability since 1990. The CPUC’s report as a substitute selectively depends on a distinct, flawed metric and makes conclusions with none regard for the reliability customary that we do meet. We have invested $8.78 billion in our networks in California over the past three years (2017-2019) to extend reliability, velocity, and protection—a rise over the earlier 3-year interval—and we have invested hundreds of thousands in a rural broadband buildout effort to achieve over 140,000 properties and rural companies in California, which the report utterly ignores.”

AT&T’s assertion refers to a “reliability customary that we do meet,” in reference to the “buyer hassle studies” customary that enables six hassle studies per 100 cellphone traces every month. The CPUC-commissioned report stated this customary needs to be modified as a result of it “is so simply happy that it has by no means been missed by both [AT&T or Frontier] at the same time as their general service high quality has deteriorated.”

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