When Customers Use Their Data

In a recent disturbing announcement ,Verizon Wireless will be disconnecting service to 8,500 rural customers this month for using too much data on their cellphones. The customers are scattered around 13 states and are a mix those with both unlimited and limited data plans.

Verizon justifies this because these customers are using data where Verizon has no direct cell towers, meaning that these customers are roaming on cellular data networks owned by somebody else. Since Verizon pays for roaming the company say that these customers are costing them more in roaming charges than what the company collects in monthly subscription fees.

Verizon may well have a good business case for discontinuing these particular data customers if they are losing money on each customer. But the act of disconnecting them opens up a lot of questions and ought to be a concern to cellular customers everywhere.

This immediately raises the question of ‘carrier of last resort’. This is a basic principle of utility regulation that says that utilities, such as traditional incumbent telephone companies, must reasonably connect to everybody within their service territory. Obviously cellular customers don’t fall under this umbrella since the industry is competitive and none of the cellular companies have assigned territories.

But the lines between cellular companies and telcos are blurring. As AT&T and Verizon take down rural copper they are offering customers a wireless alternative. But in doing so they are shifting these customers from being served by a regulated telco to a cellular company that doesn’t have any carrier of last resort obligations. And that means that once converted to cellular that Verizon or AT&T would be free to then cut these customers loose at any time and for any reason. That should scare anybody that loses their rural copper lines.

Secondly, this raises the whole issue of Title II regulation. In 2015 the FCC declared that broadband is a regulated service, and that includes cellular data. This ruling brought cable companies and wireless companies under the jurisdiction of the FCC as common carriers. And that means that customers in this situation might have grounds for fighting back against what Verizon is doing. The FCC has the jurisdiction to regulate and to intervene in these kinds of situations if they regulate the ISPs as common carriers. But the current FCC is working hard to reverse that ruling and it’s doubtful they would tackle this case even if it was brought before them.

Probably the most disturbing thing about this is that it’s scary for these folks being disconnected. Rural homes do not want to use cellular data as their only broadband connection because it’s some of the most expensive broadband in the world. But many rural homes have no choice since this is their only broadband alternative to do the things they need to do with broadband. While satellite data is available almost everywhere, the incredibly high latency on satellite data means that it can’t be used for things like maintaining a connection to a school server to do homework or to connect to a work server to work at home.

One only has to look at rural cellular networks to understand the dilemma many of these 8,500 households might face. The usable distance for a data connection from a cellular tower is only a few miles at best, much like the circles around a DSL hub. It is not hard to imagine that many of these customers actually live within range of a Verizon tower but still roam on other networks.

Cellular roaming is an interesting thing. Every time you pick up your cellphone to make a voice or data connection, your phone searches for the strongest signal available and grabs it. This means that the phones of rural customers that don’t live right next to a tower must choose between competing weaker signals. Customers in this situation might be connected to a non-Verizon tower without it being obvious to them. Most cellphones have a tiny symbol that warns when users are roaming, but since voice roaming stopped being an issue most of us ignore it. And it’s difficult or impossible on most phones to choose which tower to connect to. Many of these customers being disconnected might have always assumed they actually were using the Verizon network. But largely it’s not something that customers have much control over.

I just discussed yesterday how we are now in limbo when it comes to regulating the broadband practices of the big ISPs. This is a perfect example of that situation because it’s doubtful that the customers being disconnected have any regulatory recourse to what is happening to them. And that bodes poorly to rural broadband customers in general – just one more reason why being a rural broadband customer is scary.

Retiring the Copper Networks

telephone cablesAttached is a copy of FCC Docket DA-14-1272 where Verizon is asking to discontinue copper service in the towns of Lynnfield, MA, Farmingdale, NJ, Belle Harbor, NY, Orchard Park, NY, Hummelstown, PA and Ocean View, VA. In this docket the FCC is asking for public comments before it will consider the request.

In these particular towns Verizon is claiming that almost all of the households are already served by fiber and they are seeking to move the remaining households to fiber so they can disconnect and discontinue the use of the copper networks there. And perhaps if there are only five percent of lines left on copper in these towns that might be a reasonable request by Verizon. But this does prompt me to talk about the whole idea of discontinuing older copper networks, because both Verizon and AT&T have said that they would like to eliminate most of their copper by 2020.

In the case of Verizon it’s a tall order to get rid of all copper because they still have 4.9 million customers on copper with 5.5 million customers that have been moved to fiber. AT&T has a much larger problem since they don’t use fiber to serve residential customers except in a few rare cases. But both big carriers have made it a priority to get people off copper.

Many customers are unhappy with the idea of losing their copper and many have complained that they are getting a lot of pressure from the big telcos to drop their copper. There are numerous Verizon customers who say they are contacted monthly to get off the copper and they feel like they are being harassed. There are a few different issues to consider when talking about this topic.

Not everybody that loses copper will get fiber. Of the big telcos only Verizon even owns a residential fiber network. But even the Verizon FiOS network doesn’t go everywhere and they are not expanding the fiber network to new neighborhoods. For customers that live where there is no fiber, the goal is to move them to a DSL-based service or, in the case of AT&T to cellular phones.

Interestingly when a telco moves a customer from POTs (Plain Old Telephone Service) on copper to VoIP on DSL the telco will keep using the identical old copper wires. They will have changed the technology being used from analog to digital. But more importantly in most cases they will have changed the customers from being on a regulated product to an unregulated one. And that is one of the primary thrusts to get people off POTs.

POTs service is fully covered by a slew of regulations that are aimed at protecting consumers, such as carrier-of-last-resort obligations that require telcos to connect anybody who asks for service.  But in most states those same protections don’t apply to VoIP or fiber service. The most important right that customers lose with VoIP are the capped prices, meaning that the prices for VoIP or fiber service could be raised at any time by any amount. And the carrier-of-last-resort obligations have real-life impact even for existing customers. If a customer is late paying their bill on a VoIP network, Verizon would be within their rights to refuse to connect them back to service when they pay.

There are customers who want to stay on POTs on copper for various reasons. One reason is that POTs phones are powered by the copper network and so they keep working when the power goes out. There are still parts of the country where the power goes out regularly or where there is a reasonable expectation of hurricanes or ice storms. For example, houses that still had copper could make calls for up to a week after hurricane Sandy.

Another reason to keep copper is for security and medical monitoring. The copper POTs network has always been very reliable. But it is much more common for households to lose Internet service. Once a phone is converted to VoIP, then any time the Internet is down for a customer then their security and medical monitoring services that use those phones don’t work.

The FCC is going to be flooded with requests like this one to disconnect people from POTs. Certainly the copper networks are getting old. There might be merit for disconnecting copper in towns that are almost entirely fiber and where the customer losing POTs will move to fiber. In most cases fiber seems to be as reliable as copper, although it cannot power the phones when the electricity goes out.

But it seems somewhat ludicrous for the FCC to approve shuttling people from POTs to DSL while still using the same old copper lines. That clearly is being done as way to avoid regulation and customer protections and not for the carrier to save money. And it is clearly not in the customer’s best interest to move customers from POTs to cellular.