Broadband Cable Association of Pennsylvania


March 25, 2014

Hopewell Township (Cumberland County, NJ) officials believe Verizon is going back on its pledge it made more than two decades ago to provide every household in the state with sufficient broadband Internet.

Both Hopewell Township and Cumberland County officials say a proposed agreement between the Board of Public Utilities (BPU) and Verizon could shut the door on households and businesses in rural communities like Hopewell from ever receiving fiber optic (FIOS) broadband - which they say dense urban communities are receiving. Officials say this is imminent, as Monday is the last chance for customers to submit their comments on the agreement. Hopewell Township Committeeman Greg Facemyer is urging residents to email comments to the BPU contesting the agreement.

In 1993, Verizon proposed a plan called "Opportunity New Jersey," which promised that Verizon would completely wire the state with broadband by the end of 2010. And, Facemyer said, four years past its deadline, Verizon customers throughout New Jersey have already paid about $13 billion in surcharges in return for high-speed broadband. "Verizon is turning (its) back on the commitment it originally made to cover the entire state," Facemyer said. "This includes rural communities like Hopewell Township."

State Sen. Jeff Van Drew (D-1) also believes Verizon is trying to back out of its original commitment and thinks the state has some kind of understanding to get Verizon "off the hook." However, Lee Gierczynski, spokesman for Verizon New Jersey, said the claims are "not true at all." According to Gierczynski, the original stipulation never dictated Verizon to specifically use fiber optic broadband. He said Verizon had an obligation only to deliver "broadband" coverage statewide. He added, according to the Cable Act, Verizon was required to service FIOS to the largest municipalities in New Jersey. But Facemyer said in 1993, when the original stipulation was agreed upon, fiber optic technology didn't even exist. "So, of course it wasn't included," Facemyer said.

Instead of providing fiber optic broadband, officials say Verizon plans to issue wireless broadband to underserved, less dense areas like Hopewell. According to the Cumberland County freeholder board, the proposed agreement would relegate those underserved households to "less reliable and more expensive technologies." Wireless would provide households and businesses with "DSL-like" speed. In other words, far below fiber optic. Wireless can be knocked out during a major storm or natural disaster. Fiber optic would not. And, according to Verizon's own website, the company claims its FiOS services is as much as 15 times faster than most cable Internet plans. Wireless can also be more susceptible to security threats.

However, Facemyer noted wireless broadband wasn't around in 1993 either - yet Verizon determined at some point that it was the technology it was going to implement for less-dense rural areas like Hopewell. But Facemyer emphasized his main point: that it isn't fair only dense urban areas receive the best kind of coverage. "Our rural communities will never be built to the density of an urban area," he said. "However, that should not close the door on businesses and students that live in these areas. Why should they be left behind?"

The Cumberland County Board of Chosen Freeholders unanimously decreed that the BPU should hold Verizon accountable to its promise. Freeholder Director Joe Derella recently issued a letter to the BPU, writing, "Fiber optic is the gold standard of high-speed broadband technology for education, commerce and communication in the 21st century." Derella said the county freeholder board is urging the BPU not to accept the agreement with Verizon. "Instead, we (Cumberland County) request that the BPU hold Verizon to its overdue commitment to deploy broadband service as intended in 1993 when the BPU approved (Opportunity New Jersey). Verizon has been collecting funds from ratepayers since that time, and these funds should only be users to build out the fiber optic network." Gierczynski said the allegation that Verizon imposed surcharges was blatantly false.

Barbara Stratton, secretary of the Cumberland County Planning Board, has been a staunch advocate of bringing fiber optic Internet to the area. She was one of the many outspoken voices that helped bring broadband coverage to Greenwich and Stow Creek. In 2010, community advocates started a petition in an effort to improve broadband network in the townships. In 2013, Verizon promised to bring its fiber optic network into the townships. Stratton said having Greenwich and Stow Creek - which surround Hopewell - covered is unfair because it virtually leaves Hopewell at a disadvantage to compete in education and business. "Hopewell is surrounded by municipalities that have full access - (but) if I am a business and trying to compete in Hopewell Township (without) high speed Internet, I cannot compete on any level - not locally, regionally, let alone nationally or globally. A farmer cannot just move a 300-acre farm where infrastructure exists. It's just impossible."

She added, "A student trying to do their homework (who) does not have access to high speed Internet is at a disadvantage compared to the students who do. Some of my neighbors were bringing their kids to in-laws' houses just to do homework at night." According to several officials, more than 7 percent of Cumberland County households still lack access to sufficient broadband Internet. According to Facemyer, this is almost 10 times the state average. Gierczynski said that wasn't necessarily true. He also said, "There is no reason they (Hopewell) can't go out and solicit other companies." The BPU responded by email Friday, but declined comment. South Jersey Times (Woodbury, NJ)

Any deal between Comcast Corp. and Apple Inc. to create a new streaming-video service with special access to subscribers would likely draw close regulatory scrutiny and spark a new debate over whether cable companies can carve out a part of its pipe for content providers, according to industry analysts and experts.

The Wall Street Journal reported Monday that Apple and Comcast have discussed teaming up on a new streaming-video service that would deliver content to Apple set-top boxes. Apple wants traffic to the boxes to be marked as distinct from public Internet traffic and travel in a separate flow of bandwidth over Comcast's cables to homes, ensuring better quality for Apple's TV service than Web video. The companies aren't close to a deal and there is no guarantee they will strike one. But the talks have cast a spotlight on the type of arrangement Apple is proposing: one that would treat its video traffic as a "managed service" traveling in Internet protocol format, similar to cable video-on-demand and phone services.

Federal "net neutrality" rules struck down in January barred broadband providers from discriminating against any public Internet traffic- but they were allowed to make exceptions for managed services. The benefit of managed services is that they don't have to contend with other Web traffic over the "last mile" of pipes connected to customers' homes, and data-use thresholds often don't apply. Comcast previously agreed to abide by net-neutrality conditions to gain regulatory approval for its merger with NBCUniversal in 2011 and its proposed acquisition of Time Warner Cable Inc. The Federal Communications Commission and the Justice Department are likely to take a close look if any such Comcast-Apple deal is struck, particularly because it involves the nation's largest cable and broadband provider.

Proponents of net neutrality-the concept that Internet service providers should treat all traffic equally-argue that such deals would allow Comcast to pick winners and losers on the Internet, and force innovative companies to pay a toll to reach customers with new applications. "The Comcast-Apple deal could revolutionize the pay-TV business, so it will naturally draw closer government scrutiny," said Guggenheim Securities telecom policy analyst Paul Gallant. Comcast and Apple wouldn't need government approval for such a deal, but regulators could get involved if anyone complains that an agreement violates other commitments Comcast has made.

The FCC is writing new net-neutrality rules. Under its old ones, such a deal might be allowed through an exemption for managed or specialized services, like the VoIP phone service offered by many cable companies, Mr. Gallant said. "I think as long as it's nonexclusive, and doesn't degrade the traditional broadband service, I expect the FCC would be OK with it," Mr. Gallant said. The FCC, Comcast and Apple all declined to comment. Already Comcast is under scrutiny from regulators as it seeks approval to buy Time Warner Cable. Comcast has agreed to expand its net-neutrality commitment as a condition for winning approval for that deal.

The advantages of managed services over public Internet services can be stark. For example, Comcast and Time Warner Cable both offer streaming video apps on the Xbox gaming console that don't count toward customer data thresholds. In contrast, both Comcast and Time Warner Cable count watching a streamed Netflix movie or TV show over the Xbox toward users' data thresholds. Nearly two years ago, Netflix Inc. Chief Executive Reed Hastings put a spotlight on managed services when he said that Comcast was giving special treatment to its own TV app, while not affording the same privilege to Netflix. "Comcast should apply [data] caps equally, or not at all," Mr. Hastings wrote in a Facebook post. "In what way is this neutral?"

The cable industry argues that it should be able to offer managed services. "As the Commission has previously recognized, consumers benefit not only from a growing open public Internet, but also from the evolution of innovative, specialized services," a spokesman for the National Cable Telecommunications Association said Monday. "We fully support this conclusion and expect future regulatory proceedings to recognize this fact." Supporters of net neutrality fear the exemptions for managed services will become a loophole for Internet service providers like Comcast to start charging companies that seek to provide consumers with new, high-bandwidth services in the future. Matt Wood, policy director of the advocacy group Free Press, said such arrangements could also discourage ISPs from upgrading the speed of traditional Internet access. Comcast and Time Warner Cable executives have said they continue to boost speeds and investments in the public broadband portion of their pipes. The companies have said exempting their own TV streaming apps from data thresholds is justified because those don't travel over the public Internet and are simply extensions of the cable-TV service that customers are already paying for. Wall Street Journal