Tuesday, March 31, 2015

AT&T launches ultrafast Internet service in Cupertino - ContraCostaTimes.com

AT&T launches ultrafast Internet service in Cupertino - ContraCostaTimes.com: It's also unclear just who in Cupertino will be able to receive the GigaPower service. At launch, the service is available at "several thousand" homes in the city, said Terry Stenzel, vice president and general manager of the Northern California and Reno region for AT&T. But Stenzel declined to give an exact number or say what percentage of the 20,000 households in the city or what neighborhoods have access to the service, citing competitive reasons.

"They're unwilling to tell anybody. Not even me," Mayor Sinks said.

Cupertino doesn't have any commitment from AT&T to offer service to all areas of the city or to bring service to government buildings, schools or hospitals, Sinks said.

"They've stopped short of any commitment on that," he said.

Now that the U.S. Federal Communications Commission has adopted rules this month classifying Internet as a universally available common carrier telecommunications service, it's going to be more difficult as time goes on for dominant providers to cherry pick and redline neighborhoods as is being done here.

Sunday, March 29, 2015

Open access fiber networks offer way to boost access to Internet services

The United States suffers from costly and disparate Internet access due to a vertically integrated business model based on the old copper telephone network. Under that model, the network infrastructure and the telecommunications services sold over it are provided by a single company such as AT&T or Verizon. It’s the same model used by cable companies, where the network operators that bring the cable to customer premises “own” the customer and bill for separate or bundled services on a monthly subscription basis. Google Fiber also operates under this business model.

That business model is inherently limited because it can expand and upgrade service only to the extent new customers and revenues can be added quickly enough to generate a rapid return on the money invested to build out the infrastructure. That circumstance and the high cost of constructing telecommunications infrastructure naturally make telcos and cable companies very conservative when it comes to expanding their networks.

That risk aversion in turn has brought about widespread market failure. There are potential buyers clamoring for service but the telephone and cable companies decline to provide it. This is essentially where the U.S. has been stuck for the past decade, creating massive frustration for consumers and for state and local governments hoping to improve Internet telecommunications access that has grown increasingly vital for their communities and economies.

Fortunately, there is a way out of the mire with open access fiber networks as Andrew Cohill of Wide Open Networks explains in this article appearing in the March/April issue of Broadband Communities magazine. Highly recommended reading for government officials and consumers.

Saturday, March 28, 2015

As health care goes online, Internet infrastructure takes on greater importance

Internet Backup Options Can Be Pricey, Complicated - Data Centers on Top Tech News: Disruptions to Internet service can and do happen for many reasons, ranging from hacker attacks to solar storms. With online access vital for so many services today, such interruptions can be far from merely inconvenient.

Last month's vandalism in Arizona, for example, raised "major implications for telehealth in northern Arizona," according to the Arizona Telecommunications & Information Council. That's a concern for many rural and tribal communities for whom phone and Internet services can be the primary means of accessing health care.

San Antonio’s size proving to be a challenge for Google Fiber - San Antonio Business Journal

San Antonio’s size proving to be a challenge for Google Fiber - San Antonio Business Journal: One of the challenges for Google is developing the infrastructure needed to support a new fiber-optic network, including a system of equipment shelters. That process is complicated because of land mass and topography.

But Google officials insist that the company continues to work with San Antonio officials and expects to have a progress report on the Alamo City’s expansion status before the end of the year.

Reading between the lines, it appears Google Fiber is facing the classic demand muni officials have made of cable providers in franchise negotiations, i.e. that the providers serve all addresses and not just some per Google Fiber's walled garden "fiberhood" infrastructure deployment strategy.

As Google Fiber looks to expand, it will likely increasingly confront this demand and choose to walk away, especially if state public utility commissions back up local governments by enforcing the U.S. Federal Communications Commission's recently adopted rules designating Internet services as common carrier utilities subject to a universal service mandate. That factor along with its limited financial resources to build costly telecommunications infrastructure will significantly limit Google Fiber's U.S. expansion under its current "own the customer" business model.

Friday, March 27, 2015

AT&T hopes to squeeze more milk from the pay TV cow to boost earnings and pay dividends -- not to fund network CAPex

New Services Cloud AT&T’s Bet on Pay TV - WSJ: AT&T Inc. knew it was buying a melting ice cube when it agreed to acquire satellite-TV company DirecTV last year for $49 billion. But recent moves by HBO, Apple Inc. and the National Football League have turned the temperature up a few degrees.

A wave of new TV services delivered over the Internet allow Americans to get prime programming like the hit HBO series “Game of Thrones” and ESPN sports without paying a big cable or satellite bill. That, in theory, means fewer customers for bundles of TV channels like those sold by DirecTV. And unlike cable companies, DirecTV doesn’t have a significant broadband business to fall back on.

AT&T is aware of the risks. Chief Strategy Officer John Stankey says the telecom giant figured when it did the deal that demand for traditional bundles of TV channels probably had peaked. But AT&T is betting the decline will be slower than many people think—a gradual 34-degree melt, as opposed to a 75-degree one— and that it will be able to milk the cash produced by the declining satellite business in the meantime to fund upgrades in its networks. (Emphasis added)

It's an unlikely bet since given AT&T's business structure and strategy. Milking the pay TV cow boosts earnings and pays fat dividends, not CAPex.

Thursday, March 26, 2015

FCC Commissioner Pai should resign, get new job as lobbyist or run for Congress

This report courtesy of ExtremeTech:
FCC Commissioner Ajit Pai spoke to the House of Representatives on Tuesday, and took the unusual step of requesting that Congress forbid the FCC from using any appropriated funds to enforce its net neutrality ruling.


Pai's entitled to his opinion, of course. But for a sitting Federal Communications Commission member to go before Congress asking it to restrict its funding doesn't pass the smell test of proper protocol respecting the constitutional separation of powers. If Pai wants to appropriate, he should resign his FCC post and run for Congress. Or become a lobbyist. 

UTOPIA holdout cities should adopt broader view of economic benefit of UTOPIA-Macquarie PPP

Orem, Utah and four other cities that have opted out of a public-private partnership between the Utah Telecommunication Open Infrastructure Agency (UTOPIA) and Macquarie Capital Group are now grappling with a fundamental question as to how to finance the future operation of fiber to the premise (FTTP) telecommunications infrastructure to serve their residents. The question: support the partnership’s public works approach to the increasingly essential infrastructure or default to legacy incumbent telephone and cable companies and the poor value and customer service and disparate access they typically offer as monopoly providers.

Six of the 11 cities comprising UTOPIA agreed in concept in 2014 to assess a parcel utility fee to help offset the cost and mitigate the business risk associated the pure subscription-based model used by incumbent providers. They mitigate their business risk by cherry picking neighborhoods believed to have the greatest profit potential for their proprietary network investments while redlining those that don’t.

The utility parcel fee is a key sticking point in negotiations between UTOPIA and the five hold out cities including Orem. A Daily Herald dispatch cites from a memorandum to the Orem mayor and council from Orem City Manager Jamie Davidson:

"There is a concern that Orem is unpredictable and not easy to work with," Davidson said. "It's concerning to me to see new options entering the market [UTOPIA] with a stranded investment for the future."

“However, bottom line, the proposal remains a utility fee-based model,” Davidson said. “If, as a council, you cannot wrap your arms around the assessment of a monthly utility fee to all customers (with potentially a few exceptions, for example, the indigent), nothing else matters.”

Davidson’s right. The parcel fee is essential to making the UTOPIA partnership with Macquarie pencil out by mitigating the business risk of relying solely on customer subscription revenues. UTOPIA operates an open access fiber network, enabling competition among ISPs that want to offer customer premises services delivered over the network. In that regard, the UTOPIA network is like a road or other public works project that benefits and enhances the value of the properties it passes. The UTOPIA cities benefit because these properties can support higher levels of economic activity as well as boosting their market value and, by extension, their ad valorem property tax revenue potential to fund other municipal services.

Wednesday, March 25, 2015

New Homeowner Has To Sell House Because Of Comcast’s Incompetence, Lack Of Competition – Consumerist

New Homeowner Has To Sell House Because Of Comcast’s Incompetence, Lack Of Competition – Consumerist

A sad tale of a consumer jerked around by incumbents and misled by the U.S. government's "broadband map" -- a major and useless component of the Federal Communications Commission's 2010 "National Broadband Plan."

And the consumer might find it hard to sell his home since not having an Internet connection is increasingly becoming like living off the grid.

Let's hope the FCC's recent policy deeming Internet as a common carrier telecommunications service requiring providers to universally serve all premises can help avoid these kinds of unfortunate circumstances that leave consumers high and dry.

Opinion: Internet infrastructure can't be built in a reasonable time frame with limited, incremental funding

Want to boost rural tourism in Maine? Raise Internet speeds — Opinion — Bangor Daily News — BDN Maine: The catch is that corporate providers, like Time Warner Cable and FairPoint Communications, see no profit in extending fiber optics to remote, sparsely populated areas. So the state must be involved, and several remedies are being explored at the State House. Most of these approaches are “incrementalist”; that is, focused on giving slightly more funding to the ConnectME Authority. One proposal would authorize ConnectME to provide more grants so additional communities can plan for extending fiber-optic networks, creating wireless nodes and boosting connection speeds. Other bills propose small bonds to boost ConnectME’s funding.

Incrementalism, however, has fundamental limitations: Few rural communities are prepared to compete for limited ConnectME funds, and few low-density, low-income communities can afford broadband investment on their own. With incrementalism, it will take years, perhaps decades, to connect all of Maine.

Some progress is better than none, but ultimately rural Maine needs a “big push,” analogous to the New Deal’s Rural Electrification program that transformed life in rural America. The big push strategy’s basic premise is that broadband is critical for rural economic competitiveness and also a public good to which all should have access. Rural electrification relied on community-level planning, but it was also backed by massive public investment.

The author of this op-ed nails it. Internet infrastructure like any infrastructure is costly and can't be put in place in a reasonable time frame with limited, incremental funding. The states can't do it alone. The United States needs a national Internet initiative on the scale that built today's highway and electrical distribution infrastructures.

Tuesday, March 24, 2015

The medium is the message: Google Fiber is primarily an advertising platform

Lest anyone forget that notwithstanding Google's construction of proprietary closed access fiber to the premise networks in a few metro areas of the United States, Google's core business is and remains advertising. FTTP is simply a better way to put ads on more screens and in front of more eyeballs, albeit an expensive one -- hence the limited deployment of Google Fiber.

And what better way than the leading advertising medium: high (and super high) definition TV. Over the next few weeks, Google Fiber will test targeted TV ads over its Kansas City build. The ads will run during existing ad breaks, along with national ads, on live TV and DVR-recorded programs and will be matched to the viewer based on geography, the type of program being shown or viewing history, according to a March 20 post by Google Fiber. Subscribers will be able to opt out of seeing ads based on viewing history, according to the post.

In addition to generating advertising revenue, the TV ads will also help offset operating costs, particularly the rising costs of TV programming. Google recently increased the monthly price of its TV and Internet bundle to $130 a month, according to a report in the Kansas City Star.

Monday, March 23, 2015

US federal government will have provide substantial funding for Internet infrastructure construction

Obama: This federal council will jumpstart broadband - CNET: Obama first introduced this idea in January, when he traveled to Cedar Falls, Iowa to announce his plan to promote "Broadband that Works," a public-private effort to help more Americans get access to speedier broadband.

As part of this new push, he urged the FCC to strike down state laws to ensure communities could build or expand their own 1 gigabit-per-second networks, which offer downloads 100 times faster than conventional connections.

The new council will include 25 federal agencies and departments that will work with private industry to understand how the federal government can help communities increase broadband investment and reduce barriers to deployment. The council will be co-chaired by the U.S. Commerce and Agriculture departments. The council will report back to Obama, within 150 days, with the steps each agency will take to advance these goals, including specific regulatory actions or budget proposals.

The biggest barrier to Internet infrastructure investment is private market failure on the sell side. That's been patently obvious for more than a decade; it doesn't take more than two dozen federal agencies and departments to ascertain that. The existing dominant U.S. commercial model for providing telecommunications services is based on selling "subscriptions" to and "owning" the customer, consistent with the natural monopoly market that favors large vertically integrated legacy telephone and cable TV providers.

Its primary weakness is it is wholly dependent on ARPU and ROI which don't easily pencil out in much of the nation and aren't likely to given that labor costs that make up about 70 percent of network deployment and maintenance expense are not declining and don't benefit from economies of scale. This produces an all or nothing scenario and lots of winners and losers -- with millions of premises stuck in the latter category for nearly two decades.

If the United States is to have modern telecommunications infrastructure in the 21st century that serves all Americans wherever they live or operate their businesses, the federal government must commit big as it did for electrification, water, telephone and highways in the 20th century.

What will be truly interesting is what regulatory actions and budget proposals will be recommended by the newly created federal council. On the regulatory front, the Federal Communications Commission has already acted by deeming the Internet as a common carrier telecommunications service. That leaves it up to fiscal strategies, which should include substantial technical assistance and infrastructure funding for the states along the lines of existing block grant and federal highway programs. Or in recognition that the nation is a generation behind on construction progress, the federal government could built it directly on a crash program basis with early completion bonuses for contractors. Then operate the network on an open access basis, contracting for operations and maintenance and leasing out access to providers under long term contracts.

Obama administration continues to ignore US need for ubiquitous FTTP

The Obama administration continues to ignore the need for ubiquitous fiber to the premise infrastructure serving all American homes and small businesses.

The administration instead is pursuing a PR campaign to shift attention to mobile wireless service that can't accommodate growing premise bandwidth demand as well as pointless activities such as "broadband mapping" and measuring "broadband speeds" that will do nothing to construct the FTTP infrastructure the nation should have been putting in place a generation ago.

Thursday, March 19, 2015

Major fail: West Virginia Internet infrastructure policy

The Charleston Gazette | W.Va. broadband panel to get new duties, but no funds: Roper’s group supported the broadband expansion bill, arguing the project would help improve education and healthcare, and spur entrepreneurship in West Virginia.

“If we solely depend on private industry, we’ll just stay at the status quo,” Roper said. “If students can’t access textbooks online at home, and if doctors can’t access electronic health records, we’re in trouble. [Broadband] is like good roads and water lines. It’s everything.”
This sums up the situation well, but the state's plan is to essentially pass the buck (and the hat) while continuing the useless exercise of mapping and comparing "broadband speeds" -- the do nothing approach favored by all too many state and local governments that won't build needed infrastructure:
The new legislation, which Tomblin is expected to sign into law, creates a “broadband enhancement fund,” but state lawmakers didn’t set aside any money for the fund. The bill, however, seems to  allow outside groups to donate to the fund. The panel also will receive any  money remaining from the former Broadband Deployment Council’s account, but the  council announced last year that it planned to spend all leftover funds on  final reports and audits. At the outset, the new broadband  council is expected to gather data about residential and business customers’  Internet speeds – and compare speeds to those advertised by broadband  providers. The new council also will be asked to examine existing  broadband networks.

Wednesday, March 18, 2015

Accelerating implosion of pay TV will hasten AT&T exit from residential wireline

The accelerating implosion of subscription pay TV offerings will hasten AT&T’s exit from the residential wireline market segment and could also result in the telco’s withdrawal of its planned acquisition of satellite provider DirecTV announced in 2014.

AT&T offers video packages with its U-Verse-branded triple play Internet-video-voice product. With the DirecTV deal pending regulatory approval, AT&T hopes to expand its audience of potential viewers and consequently, boost its purchasing power with TV programming providers as negotiations with the programming providers have hardened in recent years.

Viewers have historically regarded the TV programming packages as a poor value for the money since they typically watch only a handful of a few hundred channels. Now they can stream only the video programming they desire via their Internet connections, disrupting the triple play revenue model.

In addition, AT&T’s U-Verse product is delivered to residences over its aging legacy last mile copper cable plant that offers far less bandwidth headroom -- much of it consumed by video -- than hybrid fiber-coax (HFC) cable plants. To keep technologically abreast of cable, AT&T would have to replace its copper plant with fiber. But it is unable to easily do so, constrained by shareholder expectations for earnings and high dividends that militate against substantial capital expenditures.

That leaves AT&T with only one viable option – to continue to sell off chucks of its residential market as it did in December 2014, spinning off its Connecticut residential landline unit, including Internet and TV services to Frontier Communications for $2 billion.

Monday, March 16, 2015

FCC’s Title II order adopts ultra light touch on net neutrality enforcement

While much of the media has been abuzz over the concept of net neutrality – the principle that all Internet traffic be treated equally – an initial review of the FCC’s report and order issued last week classifying Internet services as telecommunications services under Title II of the Telecommunications Act indicates the regulatory agency is adopting a decidedly light touch approach on enforcing net neutrality. The question of whether net neutrality is being respected has arisen at interconnection between network layers, choke points specifically addressed in the FCC’s order and report.

Paragraph 4 states the order’s policy respecting net neutrality, described in the media as a ban on network providers creating paid fast lanes, drawing on the metaphor of toll lanes on a busy freeway:

4. The lesson of this period, and the overwhelming consensus on the record, is that  carefully-tailored rules to protect Internet openness will allow investment and innovation to continue to flourish. Consistent with that experience and the record built in this proceeding, today we adopt carefully-tailored rules that would prevent specific practices we know are harmful to Internet openness— blocking, throttling, and paid prioritization—as well as a strong standard of conduct designed to prevent the deployment of new practices that would harm Internet openness. We also enhance our transparency rule to ensure that consumers are fully informed as to whether the services they purchase are delivering what they expect.

Paragraph 30 however specifically declines to apply Title II rules to interconnection, noting frictions among commercial players have produced differing accounts of how Internet data traffic is being handled:

30. But this Order does not apply the open Internet rules to interconnection. Three factors  are critical in informing this approach to interconnection. First, the nature of Internet traffic, driven by massive consumption of video, has challenged traditional arrangements—placing more emphasis on the use of CDNs or even direct connections between content providers (like Netflix or Google) and last-mile broadband providers. Second, it is clear that consumers have been subject to degradation resulting from commercial disagreements, perhaps most notably in a series of disputes between Netflix and large last-mile broadband providers. But, third, the causes of past disruption and—just as importantly—the potential for future degradation through interconnection disputes—are reflected in very different narratives in the record.

At paragraph 31 of the order, the FCC opts for an information gathering stance vis a vis disputes over interconnection rather than a strong enforcement role:

31. While we have more than a decade’s worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context. Thus, we find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules. This Order—for the first time—provides authority to consider claims involving interconnection, a process that is sure to bring greater understanding to the Commission.

Saturday, March 14, 2015

Levin's Law of Internet Infrastructure Inertia may prevail over FCC universal service mandate

This week’s report and order by the U.S. Federal Communications Commission that imposes a universal service requirement on Internet infrastructure providers may do little to over the next decade to ensure all premises have access to landline Internet connections.

As they did soon after the Telecommunications Act was amended in 1996 requiring telephone companies to share their network infrastructures with competitive providers, the large telephone companies -- joined by cable companies – could challenge the rule in the courts and drag their feet implementing it.

They might also argue that they cannot afford to provide universal service within their service territories because there are insufficient subsidies given this week’s draft order defers enforcement of Section 254(d) of the Telecommunications Act requiring telecommunications carriers to fund universal service.

With a generation of progress toward connecting all American premises with fiber already squandered, the associated delays could buy the big incumbent telephone and cable companies another 10 years or more of business as usual, allowing them to continue to cherry pick communities, neighborhoods and roads and streets they prefer to serve and redline those they reject.

That would leave Levin's Law of Internet Infrastructure Inertia* intact and the resulting entrenched disparate access to landline Internet service that leaves about one in five U.S. homes and small businesses unable to order service.

*Blair Levin, a former U.S Federal Communications Commission official and lead author of the FCC’s 2010 National Broadband Plan observed in 2012 that the major landline ISPs had no plans to improve and build out their infrastructures. “For most Americans, five years from now, the best network available to them will be the same network they have today," Levin stated.

Thursday, March 12, 2015

FCC adopts Internet universal service obligation

Finding the United States needs improved Internet access, the U.S. Federal Communications Commission today released a report and order classifying Internet service as a common carrier telecommunications service under Title II of the Telecommunications Act. That subjects Internet service providers (ISPs) to the same common carrier universal service obligations under which telephone companies operate, requiring them to provide connections to all customers requesting service in their service territories. Harold Feld of Public Knowledge recently termed universal service “the quintessential common-carrier obligation.”

Under prior FCC rules, Internet service was classified as an information service under Title I of the Act, relieving ISPs of the obligation to provide Internet service to any premise requesting it. Consequently, for more than a decade ISPs have effectively redlined communities, neighborhoods and even portions of roads and streets by not building out their infrastructures to serve them.

The FCC's reclassification of Internet as a Title II telecommunications service invokes Section 254(b)(3) of the Telecommunications Act that requires ISPs to provide access to advanced telecommunications in all regions of the nation:

(3) Access in rural and high cost areas

Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

The FCC’s report and order also applies Section 214(e)(3) of the Telecommunications Act, which empowers the FCC to "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for that unserved community or portion thereof."

In addition, within the scope of the FCC's action is Section 202 of the Act, which contains an anti-redlining provision barring providers from discriminating against localities in providing service. The report and order notes complaints of violations will be addressed on a case-by-case basis.

In applying most of Section 254 of the Act to ISPs, the FCC noted it rejected calls to delay or phase in its enforcement:

“Even prior to the classification of broadband Internet access service adopted here, the Commission already supported broadband services to schools, libraries, and health care providers and supported broadband-capable networks in high-cost areas. Broadband Internet access service was, and is, a key focus of those universal service policies, and classification today simply provides another statutory justification in support of these policies going forward. Under our broader section 10(a)(3) public interest analysis, the historical focus of our universal service policies on advancing end-users’ access to broadband Internet access service persuades us to give much less weight to arguments that we should proceed incrementally in this context… We therefore conclude that these universal service policy-making provisions of section 254, and the interrelated requirements of section 214(e), give us greater flexibility in pursuing those policies, and outweighs any limited incremental effects (if any) on broadband providers in this context. Because forbearance would not be in the public interest under section 10(a)(3), we apply these provisions of section 254 and 214(e) and our implementing rules with respect to broadband Internet access service.”
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