Before Charter purchased Time Warner Cable (TWC) in May of this year, the company promised New York state regulators that it would bring broadband to 145,000 unserved and underserved homes and businesses by 2020. The condition helped Charter win government approval of the merger.
Christian Babcock of Schuylerville, New York, is one of the state’s unserved residents, but he has no idea if his home will be included in the required buildout to 145,000 locations. Before the merger, TWC told Babcock he’d have to pay thousands of dollars up front to subsidize construction needed to serve his home. Even now, the Charter-owned TWC is demanding more than $9,000 in exchange for service. That’s the price to cover Charter’s construction; Babcock would have to pay that plus the usual monthly service fees.
Making the situation even more frustrating, Charter wouldn’t have to extend the TWC network very far to reach the house owned by Babcock and his wife. One nearby house has Charter service already, Babcock says. But even just getting an accurate explanation of the costs has been a hassle.
In September of this year, Charter claimed there were no utility poles on Babcock’s road—that was false. Charter acknowledged its mistake, but it isn’t budging on the amount Babcock would have to pay for service. Unwilling to shell out thousands of dollars up front, Babcock is sticking with Verizon Internet that’s far slower than he’d like.
When contacted by Ars, Charter did not dispute any of the details of Babcock’s story, and the company insisted that he would need to pay for construction to receive service. Charter said its four-year buildout program required as part of the merger has begun in counties that government officials “identified as having the most need.”
“In these counties, we are evaluating buildout options based on several factors, including the number of homes that can be served, proximity to our existing network, and overall economic feasibility,” Charter told Ars. “We’re trying to reach as many people as possible, as quickly and efficiently as possible, in places the state itself has defined as most in need of broadband access.”
We asked Charter which counties it is building in first but did not receive an answer. Charter has filed updates with the state Department of Public Service, but the publicly available versions of these documents are heavily redacted.
As for Babcock’s specific case, Charter told Ars that the company “would need to replace three poles to comply with height and clearance from existing electric and telephone lines. Building underground requires a longer construction path but doesn’t require pole replacement.” The exact cost to Babcock would be $9,083.
The Charter spokesperson told Ars on October 17 that the company “will communicate directly with Mr. Babcock about his options for receiving service.” But Babcock says he hasn’t heard anything from Charter since mid-September, a couple of days before he contacted Ars.
A familiar but troubling tale
Babcock is far from the only Internet user who can’t get fast Internet unless he pays thousands or even tens of thousands of dollars to subsidize a private company’s construction. In November 2014, we wrote about Jesse Walser in Pompey, New York, who couldn’t get TWC service unless he paid the company more than $20,000. Walser had to go without wireline Internet access entirely, relying instead on wireless, even though TWC had received more than $10 million in state grants to build in underserved areas.
“There has been no change in my status. I still don’t have any wired Internet access,” Walser told Ars a few weeks ago.
In Nebraska, one farm owner we wrote about last year was told by Windstream that he’d have to pay an incredible $383,500 to subsidize the ISP’s construction. He ended up getting service from a smaller company for a more reasonable $41,915.88.
In another case, Charter incorrectly told a Wisconsin man that it could provide service to a new house he was building. But after it was built, Charter said that instead it would only offer service if he paid $117,000 to cover the cost of extending its network to his new home.
Babcock and his wife moved into their house in 2014. At that time, Time Warner Cable quoted a price of about $8,000 to serve the home. They signed a two-year contract for Verizon DSL instead, paying $75 a month for download speeds ranging from 768kbps to 2Mbps.
It’s essentially “single-purpose Internet,” Babcock said. If he’s streaming music, his wife can’t watch online video (and vice versa). “Web browsing isn’t terrible, but streaming movies off Amazon Prime or whatever, it usually takes two to five minutes for the movie to buffer,” he said. Babcock, a computer engineer, has the option of working at home but doesn’t because of the slow speeds.
There’s a local wireless ISP that could provide faster speeds but imposes data caps as low as 15GB per month, not enough for streaming lots of music and video, Babcock said.
Babcock lives on a dirt road with a handful of houses, including the one that has Charter service. That house is closer to a more heavily trafficked paved street, and the property abuts Babcock’s property. “I can throw a stone and throw it into the neighbor’s property,” Babcock said.
Unserved and frustrated
When Babcock’s Verizon contract was about to run out this year, he was ready to try getting cable again. He had read up on the Charter/TWC merger, and he knew about the commitment to serve new customers. Charter can meet the requirement by serving 145,000 locations that are either “unserved” (those with download speeds of less than 25Mbps) or “underserved” (those with download speeds of 25Mbps to 99.9Mbps).
It’s unclear how many such locations exist. New York’s approval of the merger says that if Charter “is able to demonstrate that there are fewer than 145,000 premises unserved and underserved as defined above, [it] may petition the Commission for relief of any of the remaining obligation under this condition.”
Babcock, who provided Ars with e-mail conversations he had with Charter representatives, wasn’t able to get any information from the company on whether his street will be served as part of the merger commitment.
In one e-mail on September 4, Charter incorrectly called him “Christine Babock” and said that it would provide a construction cost estimate using a government-approved formula that depends on the distance from his house to the company’s lines. But on September 8, a Charter employee said in an e-mail that a field tech found “no visible pole at the locations,” indicating that there were no poles on which cables could be hung.
This wasn’t true. Babcock took pictures of five service poles leading up to his house and sent them to Charter.
With that factual error corrected, Babcock says he was next told via phone that the poles were too short. Babcock disputed that assessment, pointing out that National Grid and Verizon each use the poles, which appear to meet National Grid’s standard height of at least 40 feet.
Charter also told him in a phone conversation that getting “make ready” permits for the poles from local authorities would take over 120 days, making it more costly than burying cable underground, Babcock said. The make ready process often requires existing users of the poles to move their wires to make room for new ones.
Babcock offered to apply for the make ready permits himself but was rebuffed. He also tried to make Charter’s job easier by mapping out the most optimal route for serving his house. “I measured it on Google Earth and it should be 1,221 feet, and all on existing service poles,” Babcock said.
Charter proposed running lines about the same distance but wanted to bury the lines underground for about half of it instead of using poles where Charter lines may be too close to existing electric and phone lines. Charter would hang wires on poles for the other half of the route. The cost to Babcock for this hybrid approach would be $9,083. He could also split the cost with neighbors if they were willing to pay, but Babcock says he doesn’t want to pay more than $1,000 up front.
“I would rather buy an overpriced broadband package for multiple years from the same provider than pay a connection fee up front,” he said.
Where US broadband falls short
Babcock says he has complained to elected officials and the state Public Service Commission but hasn’t heard back from any of them. A town official he spoke to was sympathetic and recalled similar cases of TWC demanding large construction fees from potential customers, but ultimately there is nothing in the town’s franchise agreement with the company that would force it to waive the construction fees.
New York Governor Andrew Cuomo recently announced more grants for bringing high-speed broadband to unserved areas. Cuomo’s goal is to “serv[e] all New Yorkers by the end of 2018,” so perhaps Babcock will eventually get broadband from Charter or another company.
Charter’s position is understandable from a financial standpoint: like other ISPs, it builds in areas where it’s most profitable. Even with the merger requirement to build in unserved or underserved areas, it still makes financial sense to target the more highly populated cities and towns.
Fed up with private ISPs’ failure to provide fast Internet to rural residents, a number of cities and towns have built their own networks, offering speeds and prices rivaling anything available in the US. But that’s a big undertaking and not something every municipality is willing to do. Many states (though not New York) impose legal restrictions on municipal broadband networks that protect private ISPs from competition even when they haven’t upgraded their networks.
For now, there isn’t much help for people like Babcock and others we’ve written about who cannot get modern broadband without paying thousands of dollars to subsidize the construction costs of private companies. Even with government grants and merger commitments, there are still plenty of spots in the US where broadband access falls short.
Disclosure: The Advance/Newhouse Partnership, which owns about 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.