Jeffrey Houser drove home to rural Indiana County, Pa., in November 2014 to find his grandmother complaining about her $600-a-month cell phone bill, driven by online updates. A U.S. Air Force vet and former military contractor in Iraq, Houser bought her a new computer — Grandma Houser was using a cell phone to connect to her old one because she had no internet. He told her to watch her online usage.
A month later for Christmas, Houser returned to the family’s farm on Kinter Road to find his grandmother distressed again, now with a $900 monthly bill. That made him angry.
The next year, 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. Houser’s 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. Comcast served those students with internet.
And that’s when, 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, one as long as 84 hours, plagued Rednet’s network, according to a spreadsheet Houser kept. Comcast initially agreed to credit him. But Houser pointed out that 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 Rednet 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 in a statement. "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, Houser, 38, has found a robust market in Western Pennsylvania, with 10,000 daily users on Rednet. He has created his own network of rural customers and college students much as a company or a hospital creates a network to serve multiple geographic locations. He connects far-flung 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 global internet through a Comcast port.
Houser says that Comcast still owes him $36,000 in credits, though now talking with Comcast is like “beating a dead horse.” He hasn’t paid challenged charges, running up tens of thousands of dollars in arrears.
“Every time I talk with them, I tell them that you owe me for the outages and the phone tax,” Houser said. “Can they be that completely incompetent? It’s either incompetence or maliciousness.”
Regulators talk about the nation’s “digital divide” — or the gap between people with low incomes who can’t afford the internet and the middle class and wealthy who can — in cities such as Philadelphia.
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 cell phones.
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. But many say that the number is likely much higher because of inaccurate broadband-coverage maps in Pennsylvania and other states.
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 high-speed 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 Pennsylvania 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.
In April, the Pennsylvania Public Utility Commission approved an order that opens the door for Tri-County Rural Electric Cooperative Inc. to string fiber over its 5,000 miles of utility poles to connect 20,000 customers. “We are going to give our consumers the bandwidth you’d find in the city and suburbs,” said the co-op’s CEO, Craig Eccher.
But Tri-County can’t connect Tammi Yeckley, 46, who lives in Armagh, not far from Rednet’s offices, about an hour east of Pittsburgh.
Verizon has neglected to fix a box by her driveway and she has no internet at all except for her cell phone, though cell reception can be weak with dropped calls if she walks and talks, she said. “Even if I want something from Amazon or something, someone has to order it for me,” Yeckley said.
She looked into satellite-delivered internet through HughesNet. Because too many users in her area use HughesNet, the company told her there are no available hookups. Down the road, some neighbors have Comcast. When Yeckley called, “Comcast told me they would charge $5,000 to run a line and I said that is absolutely insane.”
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.
Byron Stauffer, the director of the office of planning and development for Indiana County, has heard complaints from Yeckley and others. “You can talk to the moon or Mars," he said, "but you can’t talk to [local town] Brush Valley.”
Houser earned good money as a military contractor, in Iraq, Florida, and Washington. He drove a $100,000 Nissan Skyline GTR sports car home in 2014. 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. Other family members asked for help. Among his first customers were his great-aunt Sally, cousin Tommy, father Jeffrey, uncle Bill, cousin Cynthia, uncle Don, two neighbors, and a friend.
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, sleeping on her couch, as he developed a plan for the network, using equipment bought on Amazon. He also emptied out $440,000 in personal funds — mostly savings from his work as a military contractor and some smart stock investments — to finance Rednet.
Early on, he contracted Comcast to run a business fiber line to his office, agreeing to pay about $340,000 over five years through monthly payments of $5,000 to $6,000. Houser said he was “200% clear” with Comcast about what he was doing.
Rednet 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 cell phone charges per child because student-aged children use the internet so heavily for homework, he said. Houser knows a family with six children that paid $1,800 a month in cellular charges, partly because of children doing homework online.
Houser soon expanded into Indiana Borough the summer of 2017, helping apartment complexes manage their internet services. Houser asked Comcast to run a line for Rednet to an apartment complex for college students so that he could control the internet through Rednet.
Comcast agreed. Houser didn’t think it was a big deal because Comcast was still serving the data, only the bill was being paid by Rednet instead of the student apartment complex owners.
But within months, Houser began to have trouble with his Comcast bill. Comcast says its business relationship with Rednet changed when he leased fiber lines, leading to the new taxes. Houser has stopped paying what he believes are charges that he shouldn’t be assessed. Comcast sends him shut-off notices.
An indication of the breadth of the billing dispute: Comcast credited Rednet $51,730 last July for late fees, equipment overcharges, and misapplied connectivity fees, according to an email Houser provided from Comcast. At the time, Rednet’s recurring monthly bill was only supposed to be about $12,400 based on the contract that Rednet signed with Comcast, Houser said.