Let’s state the obvious: Internet in the U.S. sucks. Unless you already have fiber, you’re probably stuck with cable, DSL, or no internet at all because no ISP wants to expand into your area. If you live in a rural area and are lucky to get some form of broadband, you’re probably paying an exorbitant amount for slower than molasses speeds. And most people, about 83.3 million according to a recent report from the Institute for Local Self-Reliance (ILSR), can only access broadband through a single provider. There’s no incentive for major ISPs to actually offer their customers good service. Instead, their focus is on short-term profits—even if that means leaving money on the table and customers on DSL.
Our own Alex Cranz and Brian Kahn recently spoke with Electronic Frontier Foundation special adviser Cory Doctorow about how ISPs continue to wreck their own internet service, overcharge customers, shut out competition, and leave a significant chunk of urban and rural America pleading for more affordable and better broadband. (You can listen to this first episode of the System Reboot podcast here.) The podcast is a nice overview of the problems with ISPs, but I wanted to dig a bit further into one key element of Doctorow’s focus in the episode: The case of Frontier’s bankruptcy. It’s especially illuminating when it comes to tracing the steps of how ISPs got this monopolistic power over consumers and continue to wield it to absolute ill effects.
The Internet Is Broken, and ISPs Are to Blame
A small Nova Scotia-based company is upset about losing a provincial government contract to deliver high-speed internet, saying the loss could force it out of business.
Acadian Communications of Chéticamp lost to Bell Aliant in the second round of bidding for qualified suppliers to provide high-speed internet service.
It missed the first round of bidding due to a change in company ownership. Bell Aliant was among the successful bidders in that round and is working on providing service in the Chéticamp area.
Andrew LeBlanc, owner of Acadian Communications, said his company is already preparing to lose customers.
“As Bell comes in and steals away customers, there’s a point in the not too far future where I think we could go under,” he said.
Acadian Communications provides internet for around 800 customers and employs four people, including LeBlanc. He said if business drops to just 200 or 300 customers, the company won’t be profitable anymore.
Smaller companies losing out
LeBlanc said they offered a lower bid and asked for a 40 per cent subsidy from the province, while Bell Aliant asked for a 50 per cent subsidy.
“They’re going to cover the maximum amount of houses which is great for themselves and great for Nova Scotia residents, but for myself and several other companies across the province it’s not good at all,” said LeBlanc.
The second round of bidding went entirely to Bell Aliant. The company will provide high-speed internet for another 32,000 homes and businesses. The provincial government is providing $59 million for the project.
“In effect, the provincial government is funding the biggest telecommunication company to bankrupt our company,” said LeBlanc. “Something with that just doesn’t sit right.”
(Reuters) – Oasis Petroleum Inc OAS.O filed for Chapter 11 bankruptcy protection on Wednesday, the latest U.S. shale producer to seek court-aided restructuring as the energy industry reels from an unprecedented crash in oil prices caused by the COVID-19 pandemic.
The company listed assets and liabilities in the range of $1 billion to $10 billion, according to a court filing.
Oasis said it secured $450 million in debtor-in-possession financing and expects to cut debt by $1.8 billion through the restructuring. It had long-term debt of $2.76 billion with just $77.4 million in cash and cash equivalents as of June 30.
Lockdowns to stem the spread of the virus decimated travel and the demand for fuel, bringing oil drilling to a halt and leaving many shale producers with no source of cash to repay massive debt taken on in past years.
Peers Chesapeake Energy Corp and Chaparral Energy Inc filed for bankruptcy earlier this year, while Whiting Petroleum Corp WLL.N emerged from Chapter 11 bankruptcy and completed its financial restructuring at the start of this month.
“Due to historically low global energy demand and commodity prices, we determined it is best for Oasis Petroleum to take decisive action to strengthen our liquidity,” Chief Executive Officer Thomas Nusz said in a statement.
Oasis said upstream operations and production would continue normally as restructuring happens, adding that its independent pipeline company Oasis Midstream Partners LP OMP.O and other subsidiaries in which it owns an equity interest are not included in Chapter 11 proceedings.
Reporting by Rama Venkat in Bengaluru; Editing by Ramakrishnan M.