The story here isn't so much about Ma Bell raising dial up prices. Rather, it's that AT&T is leaving lots of money on the table by pricing DSL too low relative to dial up prices.
AT&T's costs to deploy DSL are obviously going to be higher in areas where cable loops are long and remote terminals must be installed in order to distribute the service. Its one-size-fits-all pricing scheme for DSL would be fine if there were enough total revenues to subsidize these higher costs. Clearly there are not. Consequently, AT&T and other telcos leave more than 20 percent of their U.S. service areas with no DSL service whatsoever.
The obvious solution would be to charge higher rates for DSL -- including for reseller ISPs -- in higher cost areas where 20 bucks a month for service doesn't allow for a reasonable profit. That would gain a lot more wire line broadband and potential bundled service customers who'd gladly pay two to three times that amount rather than be stuck with dial up or the high up front costs and sluggish connections afforded by satellite "broadband."
Thursday, November 29, 2007
The story here isn't so much about Ma Bell raising dial up prices. Rather, it's that AT&T is leaving lots of money on the table by pricing DSL too low relative to dial up prices.
Tuesday, November 27, 2007
Broadband Task Force report due in December, Schwarzenegger tells USC conference on digital infrastructure
California Gov. Arnold Schwarzenegger addressed the University of Southern California's Annenberg Center for the Digital Future conference on California's digital infrastructure today. But despite the stated focus of the conference, Schwarzenegger devoted very little of his keynote speech to the state's digital infrastructure. Like the state's other critical systems such as water and transportation, the state's digital telecommunications infrastructure is years behind where it should be and now requires billions of dollars of investment to bring it up to date to serve California's current and future needs.
I had expected the governor would use the conference as a platform to unveil a report that his Broadband Task Force formed by executive order last year was due to issue this week. It will now come out in December, Schwarzenegger said during a question and answer session following his speech. The report is to make specific recommendations on "how California can take advantage of opportunities for and eliminate any related barriers to broadband access and adoption."
Data recently released by the Federal Communications Commission show nearly 20 percent of California residents were unable to obtain broadband DSL service from their telephone companies as of Dec. 31, 2006.
Schwarzenegger told the USC conference he's directing the California Public Utilities Commission to be "much more aggressive in pushing broadband." But the CPUC's authority to prod telcos and cable companies to build out their infrastructures -- which in many areas of the state are unable to provide broadband Internet access -- is sharply limited by legislation Schwarzenegger signed into law last year, the Digital Infrastructure and Video Competition Act of 2006.
While the legislation pays homage to the notion of wider broadband deployment, it also allows the big telcos and cable companies that dominate the state to avoid building out broadband infrastructure to as much as half of their service areas over the next four years. Backed by telco and cable companies, the statute effectively sanctions California's digital divide and makes any gubenatorial rhetoric to bring broadband to nearly all Californians ring hollow.
As Cisco Systems' Director of Technology and Communications Policy Jeffrey A. Campbell aptly put it in a panel discussion at the event: “The key is broadband infrastructure. We can have everything in terms of content, but if people cannot access them and at the appropriate speeds, it is worthless.”
Monday, November 26, 2007
Broadband bandwidth is the currency of the global Internet economy and the U.S. is short on funds, Computerworld's Robert L. Mitchell writes.
Twenty years after DSL’s invention, we’re still relying on the same basic technology — and in many areas, providers haven’t even delivered that. Maximum uplink speeds are limited in some locations to as little as 128Kbit/sec., with best-case downlink speeds of 768Kbit/sec.
Next-generation technologies such as Verizon’s FiOS promise metropolitan areas 2Mbit/sec. uplink speeds and 15Mbit/sec. downlink speeds eventually. But Europeans have 20M-30Mbit/sec., and some areas of Korea and Japan have 100Mbit/sec. — enough to support full-motion video. Meanwhile, Gagnon, struggling with basic VoIP, is forced to tell customers to forget DSL and go back to leasing 1960s technology: a T1 line.
Monday, November 19, 2007
AT&T is big on business bundles. Problem is, it can't seem to deliver them. Last week, your blogger successfully placed an order for a bundled package of an unlimited local and long distance business line conbined with AT&T's DSL Pro level service. The AT&T sales rep said the DSL service -- which she said is a new product offering called "DSL Red" -- would be provided via a remote terminal.
Turns out that while the rep was extremely courteous and helpful -- one of the best encounters I've had with telephone sales or service people -- she was sadly misinformed according to an AT&T account rep who called to say the order couldn't be fulfilled.
No such product; no DSL service. No bundle. No deal.
With rural areas comprising about 70 percent of the state along with its well developed medical care and high tech industries, California is uniquely positioned to be a national model for the use of telemedicine, the use of broadband telecommunications to allow doctors to consult with patients online. That reduces the need for patients to drive long distances to see medical providers in distant metro areas.
Kate Ackerman reports in today's California Healthline:
Telemedicine advocates across the country are working to alleviate some of these barriers to facilitate widespread adoption, but California is in a unique position to be a model for the rest of the country.
"California is the perfect state to do this in," said Peter Yellowlees, professor of psychiatry and director of academic information systems at the UC-Davis Medical Center, adding, "Officially, 70% of the state is rural, and it's a huge state. ... So I think the rural geography in California makes it ideal, but I think also there's an attitude of 'can do' in California where people clearly are prepared to try things differently."
One of the biggest obstacles to the use of telemedicine the article neglected to mention is the lack of advanced telecommunications infrastructure in rural areas of California. California Gov. Arnold Schwarzenegger, whose administration is about to issue a report by a blue ribbon task force report on what can be done to remove obstacles to wider broadband availability, is a proponent of telemedicine.
If you're mired in a broadband black hole and relegated to slow dial up or sluggish satellite connections, everyone else could be dealing with slow speeds in as little as three years.
A study by Nemertes Research warns unless another $42 billion to $55 billion is spent on U.S. telecommunications infrastructure above and beyond the $72 billion service providers are already planning to invest in the next three to five years, there will be a developing capacity problem.
“This groundbreaking analysis identifies a critical issue facing the Internet – that we must take the necessary steps to build out network capacity or potentially face Internet gridlock that could wreak havoc on Internet services,” said Larry Irving, co-chairman of the Internet Innovation Alliance. “It’s important to note that even if we make the investment necessary between now and 2010, we still might not be prepared for the next killer application or new internet-dependent business like Google or YouTube. The Nemertes study is evidence the exaflood is coming.”
The choke points will occur on the so-called last mile or so that connects businesses and residences to the fast fiber backbone of the Internet. Current in much of the U.S., the last mile infrastructure cannot support any type of broadband connections let alone the coming "exaflood."
Sunday, November 18, 2007
Barry Orton, a University of Wisconsin at Madison telecommunications professor, says AT&T's actions show the big telco is engaged in digital redlining in Wisconsin.
The Wisconsin State Journal reports AT&T has deployed its fiber-copper hybrid U-verse infrastructure in parts of Racine and Milwaukee. But if the company decides to offer service in Madison or elsewhere, it won't announce the rollout, AT&T spokesman Jeff Bentoff told the newspaper. Rather, Bentoff said, AT&T will contact consumers individually through direct mail and door-to-door visits.
"When it 's available, we 'll let them know, " Bentoff said.
AT&T's rollout strategy shows the big telco wants to select the neighborhoods in which to offer advanced telecommunications services, Orton says, unlike cable agreements with local governments that typically require providers to serve the entire jurisdiction. "That 's what this is fundamentally about -- the ability to cherry-pick neighborhoods, " Orton said.
Tuesday, November 13, 2007
California stands to gain 1.8 million jobs and $132 billion of new payroll over the next 10 years with a 3.8 percent increase in the utilization of DSL and cable broadband Internet services, according to a study released today by the Sacramento Regional Research Institute (SRRI).
“There is a clear connection between investing in broadband technology and job growth,” said Dr. Kristin Van Gaasbeck, Assistant Professor of Economics at California State University, Sacramento and one of the authors of the report.
The study used statistical models as well as economic and broadband usage data from 2001 through 2005 to analyze 24 major regions of California and project future growth. It projected three levels of annual growth of the percentage of the adult population using broadband: a .2 percent annual increase, 3.8 percent increase and a 7.6 percent increase. Under the latter growth scenario, 2.2 million jobs would be created in the state representing $267 billion in new payroll.
Here are some key excerpts from a summary of the SRRI study:
SRRI’s analysis shows that this migration and the growth in broadband use appears to have had a positive and significant effect on employment and payroll in the state. Economic theory would suggest that increased investment in the deployment and, sequentially, the use of broadband has the potential to generate incremental benefits to many of the state’s regions and California overall.
All regions of the state could benefit from an incremental boost in jobs and total payroll with increased broadband use, but the magnitude depends on the local economic conditions
and unique distribution of Internet connections.
Unfortunately, that unique distribution of Internet connections currently leaves sizable areas of the state without access to cable or DSL broadband. AT&T, which funded the SRRI study and provides the bulk of DSL broadband service in California, bears a large degree of responsibility since it has effectively abandoned these areas, offering them only inferior satellite sub-broadband service, which notably wasn't included in the SSRI study.
Four months ago, a study by the Public Policy Institute of California revealed sharp differences among regions of the state when it comes to broadband access, ranging from under 30 percent of households in the Sierra Nevada (21%) and northern part of the state (29%) to just over 50 percent in the San Francisco Bay Area (51%) and the greater Los Angeles area (52%). The PPIC study recommended the California Emerging Technology Fund should focus on broadband deployment in rural areas.
The SRRI report comes as Gov. Arnold Schwarzenegger's Broadband Task Force nears completion of a one year study to find ways to remove barriers to broadband access, identify opportunities for increased broadband adoption and enable the creation and deployment of new advanced communication technologies.
Sunday, November 11, 2007
This excerpt from the Jackson, Tennessee Sun once again reveals the real competition between the telcos and cable companies isn't about who can get the most customers with upgraded infrastructure that's able to provide advanced telecommunications and video services. Instead, it's just the opposite in the perverse state of today's wire line telecommunications industry. It's a battle in which the telcos and cable companies compete to serve the narrowest geographical base of potential customers while devising rules to force the other guy to serve the broadest possible base. Call it reverse regulation. In most industries, businesses want regulation that allows them to reach more -- not fewer -- customers. Not in wire line telecommunications, in which the players are engaged in a race not to the top, but to the bottom. (Incidentially, Sen. Ketron is dreaming if he truly believes AT&T plans to roll out its fiber/copper hybrid project U-Verse infrastructure in rural areas. U-Verse is targeted exclusively to select urban/suburban areas.) By using its existing infrastructure, AT&T could reach smaller rural communities that do not have, and may never have, cable service because of their size, said state Sen. Bill Ketron, R-Murfreesboro. Ketron is the main sponsor of the cable legislation. The bill does not ask for any state funding for AT&T. "The faster we get broadband into our rural communities, the faster those communities can be connected to the world," Ketron said. "Not only from our children in education in being connected but in providing the economic link to industrial development to those communities." (Tennessee Cable and Telecommunications Association Executive Director )Briggs argues otherwise. "They have said they intend to serve 70 communities, and there are over 500 to 600 franchises," Briggs said, "so right there it tells you they do not intend to serve everyone."
By using its existing infrastructure, AT&T could reach smaller rural communities that do not have, and may never have, cable service because of their size, said state Sen. Bill Ketron, R-Murfreesboro. Ketron is the main sponsor of the cable legislation. The bill does not ask for any state funding for AT&T.
"The faster we get broadband into our rural communities, the faster those communities can be connected to the world," Ketron said. "Not only from our children in education in being connected but in providing the economic link to industrial development to those communities."
(Tennessee Cable and Telecommunications Association Executive Director )Briggs argues otherwise.
"They have said they intend to serve 70 communities, and there are over 500 to 600 franchises," Briggs said, "so right there it tells you they do not intend to serve everyone."
Friday, November 09, 2007
Tennessee state Senator Tim Burchett of Knoxville is predicting there will be a “bloodbath” in the 2008 legislative session as lawmakers once again entertain AT&T's request to preempt local governments and put the state in charge of broadband franchises that include delivery of high bandwidth IPTV video service.
Local governments won out this year when they convinced lawmakers Ma Bell was trying to avoid local government demands that AT&T build out its infrastructure to serve all of their residents and businesses. AT&T doesn't want to make that investment and hopes legislation making the state government the sole regulator will allow it to avoid negotiating with local governments.
“We believe that [the AT&T legislation] weakens consumer protections because there are no build-out requirements,” Carole Graves, communications director for the Tennessee Municipal League, told the Knoxville News Sentinel in this article via Free Press.
Thursday, November 08, 2007
The Capital Times (Madison, Wisconsin) notes in an editorial today:
As state Sen. Kathleen Vinehout, D-Alma, notes, Plale's proposal does not contain needed consumer protections and offers no assurances that rural areas -- including the western Wisconsin region that elected her last year -- will enjoy the same access to telecommunication services as the Milwaukee County communities that elect Plale.
In proposing to rewrite the cable franchise bill to require AT&T, cable and other companies to contribute up to $7.5 million to a new "digital divide" fund to protect rural areas from being left behind, Vinehout says, "I'm representing the people that weren't at the table."
Monday, November 05, 2007
Wisconsin state Senator Kathleen Vinehout isn't about to roll over to Ma Bell's proposed advanced telecommunications services regulatory framework that would require a far lower build out standard for AT&T's Project U-Verse product.
Vinehout likes what Illinois has done in requiring the company to build out its hybrid fiber and copper cable U-Verse infrastructure to serve 90 percent of the state rather than the 50 percent build out requirement favored by AT&T that leaves large areas on the wrong side of the digital divide:
Not every state meekly surrendered to AT&T. Illinois passed a bill with real teeth, including very specific consumer protection standards: requirements to bring services to 90 percent of the state, standards for quality, and protection for community access television.
Friday, November 02, 2007
The California Public Utilities Commission announced it has levied nearly $1 million in fines against AT&T for failing to restore phone service outages in a timely manner in 2006. The fines are in addition to $900,000 in fines imposed on the telco for failing to meet service standards the previous year.
At the root of the restoration problem is AT&T's aging copper cable infrastructure that took a beating during California's rainy season during the first three months of 2006.
The regulatory actions against AT&T raise major questions about the big telco's ability to deliver advanced telecommunications services including high speed Internet access when it has difficulty maintaining even plain old telephone service (POTS) and explain to a large degree why many California customers of AT&T are still not offered wireline broadband nearly two years later.
Nearly two months after the Southern California city of Carlsbad accused Time Warner Cable of operating in a regulatory no mans land because it lacked either a franchise from the city or a statewide franchise issued by the California Public Utilities Commission, Time Warner has applied for a statewide franchise. That will enable it to avoid build out requirements that Carlsbad or other local California governments might seek to impose on providers.
More than 20 percent of U.S. local phone company customers still couldn't get broadband in last half of 2006
In September, your blogger speculated the Federal Communications Commission was delaying the release of a semi-annual report on the number of high speed telco and cable connections to the Internet covering the last six months of 2006 at the behest of telcos because it would show little or no improvement in the percentage of residential customers able to subscribe to high speed Internet from their incumbent local telephone exchange carriers.
This week the FCC finally released the long delayed report and it's clearly unflattering to the telcos. It reveals more than 20 percent of American residences could not get broadband from their telephone companies in the latter half of 2006. That represents no change whatsoever in the national average from the first six months of that year and illustrates that rather than making an effort to extend broadband to these unserved customers, telcos are hanging them out to dry, permanently stranding them on the dark side of the digital divide.
States with the highest levels of telco broadband access in the last six months of 2006 include Florida (89% ); Georgia (90% ) Colorado (86%) and surprisingly, Nebraska (89%).
States with the lowest levels of telco broadband access in the period were Maine (67% ); Arkansas (66% ); Michigan (64% ); New Hampshire (61% ); Vermont (64% ) and Virginia (66% ).
Thursday, November 01, 2007
The Sacramento Bee is reporting California Assembly Speaker Fabian Núñez solicited $120,000 in contributions to his designated charities from Verizon three months after Gov. Arnold Schwarzenegger signed Núñez's Digital Infrastructure and Video Competition Act of 2006 into law.
In addition, the newspaper reports AT&T made three grants of $5,000 apiece last year at Núñez's behest.
The law permits telcos like Verizon and AT&T to offer advanced broadband-based telecommunications services including Internet Protocol TV (IPTV) with a statewide franchise granted by the California Public Utilities Commission. The legislation authored by Núñez, AB 2987, shafted areas outside of urban centers such as Núñez's Los Angeles district because it does not require providers to build out their infrastructures, sanctioning digital redlining and leaving gaping broadband black holes in these areas intact.
A spokesman for Núñez issued the perfunctory denial of any link between the solicitation of Verizon and the legislation.
Two years ago, only about 12 percent of rural telcos were utilizing fiber to the home (FTTH) and/or fiber to the curb (FTTC) to offer broadband to customers. Last year, that number had grown to 28 percent. It now stands at 32 percent, according to surveys of members of the National Telecommunications Cooperative Association, and the vast majority of survey respondents (84 percent) already utilize fiber fed nodes to extend the reach of their digital subscriber line service.