Groundhog Day?
Rural internet firm says Comcast messes up its bill every month, squashing its prospects
Jeffrey Houser drove home to rural Indiana County, Pa., in 2014 to find his grandmother complaining about her $ 600- a- month cell- phone bill, driven by online updates.
An Air Force vet and former military contractor, Mr. Houser bought her a new computer — Grandma Houser was using a cellphone to connect to her old one because she had no internet. He told her to watch her online usage.
A month later, Mr. Houser returned to the family’s farm to find his grandmother distressed again, now with a $ 900 monthly bill.
The next year, Mr. Houser launched the rural internet- service provider Rednet by shooting WiFi from ridge- top antennas to
customers from Punxsutawney of groundhog fame to homespun Blairsville.
His vision was to bring the internet to rural areas. And all was going well until Rednet connected off- campus apartments for students at Indiana University of Pennsylvania, expanding beyond his rural base, but also encroaching on Comcast Corp.’ s turf.
And that’s when, Mr. Houser says, his company ran into the buzz saw of Comcast’s billing and collections department.
“Connectivity” fees and taxes that were never on Rednet’s bills began appearing, tacking an extra 20% to 30% a month and wiping out his profits. Comcast charged him for an equipment upgrade it didn’t install. Outages plagued Rednet’s network. Comcast initially agreed to credit him. But Mr. Houser said it was only about half what he was owed. Comcast refused to credit him — and still refuses — saying these were electric power issues.
Comcast said last week that it doesn’t view the small company as a competitor and acknowledged earlier problems with Rednet’s bill, but says it has fixed them.
“We’ve worked very hard with RedNet to address their concerns, deliver credits where appropriate, and clarify existing and future billing line items, all while maintaining service on their account,“Comcast spokesperson Robert Grove said. ” We work very hard to make our customers happy and believe that we can make that happen in the vast majority of situations.”
For his part, Mr. Houser, 38, has found a robust market in Western Pennsylvania, with 10,000 daily users on Rednet. He connects farflung customers by using antennas, and then sends their data over nine fiber lines leased from Comcast to the Rednet data center. Finally, Rednet connects this network to the internet through a Comcast port.
‘ Absolutely insane’
Regulators talk about the nation’s “digital divide” — the gap between people with low incomes who can’t afford the internet and the middle class and wealthy who can — in cities.
But an equally persistent divide has developed in rural America. Legacy telephone companies have neglected to upgrade copper phone lines for modern internet, leaving these areas only with slow DSL or no DSL or cellphones.
Amazon has estimated in a filing with the Federal Communications Commission that 21 million Americans lack access to fixed wireline internet such as Comcast Xfinity or Verizon Fios. The FCC estimates that 800,000 residents in Pennsylvania are not connected to the internet.
In January 2018, 10 Pennsylvania representatives and Sen. Pat Toomey wrote to FCC Chairman Ajit Pai that 20% of the state’s rural residents lack access to highspeed internet, citing the regulatory agency’s data.
“Parts of Pennsylvania are about as bad as they get anywhere in the United States,” said Sascha D. Meinrath, telecommunications professor at Penn State University. “When you look at the speeds they get, it is atrociously bad. And this is excluding people who don’t get anything.”
Verizon Communications, the state’s biggest legacy phone company, declined to seek $ 139 million in federal subsidies available to upgrade its rural Pennsylvania copper phone lines, including those in Rednet’s service area.
But in April, the Pennsylvania Public Utility Commission approved an order that opens the door for TriCounty Rural Electric Cooperative Inc. to string fiber over its 5,000 miles of utility poles to connect 20,000 customers.
Still, Tri- County can’t connect Tammi Yeckley, 46, who lives in Armagh, about an hour east of Pittsburgh.
Verizon has neglected to fix a box by her driveway and she has no internet except for her cellphone, though cell reception can be weak if she walks and talks, she said. “Even if I want something from Amazon or something, someone has to order it for me,” Ms. Yeckley said.
She looked into satellitedelivered internet through HughesNet. Because too many users in her area use HughesNet, the company told her there are no available hookups. Some neighbors have Comcast. When Ms. Yeckley called, “Comcast told me they would charge $ 5,000 to run a line and I said that is absolutely insane.”
Mr. Houser says that Rednet’s infrastructure is not expensive in comparison: about $ 8,000 per antenna for 30 rural homes. His network now covers an area with about 60,000 people.
Grandma’s $ 900 bill
Mr. Houser earned good money as a military contractor in Iraq, Florida, and Washington. But he was excited about helping his family and building his own business.
At first, he rigged a T- Mobile phone to an antenna with a piece of equipment that compressed the data for the internet, cutting his grandmother’s bill to about $ 50 a month. Then other family members asked for help.
Mr. Houser relocated back home from Washington. Over beers with buddies, he came up with the Rednet name ( think “redneck”). He thought it was ironic because rednecks aren’t considered techies.
He lived with his grandmother as he developed a plan for the network using equipment bought on Amazon. He emptied out $ 440,000 in personal funds to finance the company.
Rednet service is not cheap. It charges $ 65 a month for 3 megabits per second of unlimited service, $ 100 for 6 megabits per second, and $ 150 for 10 megabits per second. Still, Rednet can save an Indiana County family $ 225 a month in cellphone charges per child because students use the internet so heavily for homework, he said. Mr. Houser knows a family with six children that paid $ 1,800 a month in cellular charges, partly because of children doing homework online.
To market Rednet’s internet service, Mr. Houser recently sent direct mail to four postal addresses in Indiana County — Creekside, Home, Rochester Mills, and Marion Center. Digital advertising doesn’t work because many of the homes in those ZIP codes aren’t connected to the internet.