Saturday, June 28, 2008

Costly oil will fuel public policy push for universal broadband access

The Los Angeles Times is out with a look ahead at how Americans' lives will change with $200 a barrel oil and $7 a gallon gasoline if it reaches those price points -- which would represent an exponential increase considering oil was going for just $20 a barrel at the beginning of 2002.

I predict that if this unpleasant circumstance comes about, it will provide a big boost to telecommuting and other forms of using telecommunications technology to bridge distances rather than fuel consuming transportation. That in turn will create a major public policy push for rapidly upgrading the nation's incomplete telecommunications infrastructure to ensure every American has access to high speed Internet -- possibly on the scale of the Federal Aid Highway Act of 1956 -- only this time involving fiber optic cable instead of concrete and blacktop.

On July 16, 2008, Virginia Gov. Timothy M. Kaine citing rising fuel prices and the escalating cost of commuting to work, announced a telework initiative for gubernatorial appointees, which includes about 120 employees in the Cabinet and Governor's Office. Kaine also announced an improved State Telework Policy directing all state agencies to consider ways to improve and expand agency telework and alternate work schedule programs.

In order for telework initiatives like Kaine's to work, Virginia and other states will have to ensure that their telecommunications infrastructures provide broadband access to all state residents. That means policies and incentives to rapidly deploy infrastructure to make telework possible and not simply engaging in studies and mapping broadband black holes that don't result in wider broadband access. Rising pump prices will likely add the necessary extra incentive to show real and timely progress.

Friday, June 27, 2008

U.S. Court of Appeals upholds FCC rule legitimizing broadband black holes

The Wall Street Journal reports today the U.S. Court of Appeals has upheld a Federal Communications Authority rule adopted in the spring of 2007 prohibiting local governments from imposing "unreasonable" requirements on telephone companies seeking franchises to offer enhanced broadband-based video services.

The rule is designed to stop local governments from using their FCC cable franchise granting authority to impose build out requirements on franchise applicants, preserving broadband black holes in these communities.

Here are the relevant excerpts from a previous post on the FCC rule.

Tuesday, June 24, 2008

U.S. suffers from "Neanderthal" broadband policy, critic charges

Stanford University law prof Larry Lessig suggested at today's announcement of the InternetforEveryone.org universal broadband access initiative at the Personal Democracy Forum in New York that the current U.S. policy treating broadband Internet access like a competitive consumer commodity isn't working and is keeping the nation stuck in the dial up digital dark ages.

"That Neanderthal philosophy has governed for about eight years, and it has allowed us to slide from a leader in this field to an abysmal position," Lessig said in a clear attack on the Bush administration's stance.

Internetnews.com reports the coalition, which includes Google and eBay, wants Congress and the next administration to take up the issue of broadband availability.

Vint Cerf, Google's chief technology evangelist and one of the architects of the Internet, implied that one of the key reasons for the lack of universal broadband access in the U.S. is that that the Internet, which carries multiple and unlimited forms of digital communications, is delivered by telcos and cable companies interested less in providing Internet access and more in selling particular services such as video and voice telephone connections.

Supreme Court to hear AT&T DSL anti-trust case


More than two decades ago, a federal judge ordered the breakup of AT&T after concluding Ma Bell's monopolistic control of local and long distance voice telephone service violated federal anti-trust law.

Now AT&T as the successor to SBC Communications faces another anti-trust suit that the U.S. Supreme Court decided to take up this week. The high court will review a Sept. 11, 2007 decision by the 9th U.S. Circuit Court of Appeal in which the appellate court affirmed a U.S. district court ruling allowing an anti-trust action brought against SBC/AT&T by several Internet service providers to proceed.

The ISPs allege SBC/AT&T maintained unreasonably high wholesale access charges to ISPs to deliberately thwart them from competing with SBC/AT&T for Digital Subscriber Line (DSL) customers as permitted under the line sharing provisions of the federal Telecommunications Reform Act of 1996. Ma Bell then lowballed prices on her own DSL offerings, making it impossible for the ISPs to compete on price, the ISP plaintiffs complain.

The case, Linkline Communications et. al. v. SBC California, et. al. represents an important test of federal policy under the 1996 law intended to foster robust market competition and speed timely deployment of high speed Internet access to all Americans.

However the suit suggests SBC/AT&T's actions in response to the law have had just the opposite effect. By cutting its DSL prices to the bone in order to deter competing ISPs -- SBC/AT&T was promoting residential DSL for as little as $13 a month in late 2006-- it lacked adequate revenue to finance the expansion of DSL within its service territory. That led to the formation of monstrous broadband black holes filled with frustrated customers unable to order wireline broadband from AT&T at any price.

From Wilson, North Carolina to Washington: Broadband access a growing issue

Here's an exhausive, well written feature article by Fiona Morgan at INDYWeek.com replete with photos on the issue of broadband Internet access and how the North Carolina municipality of Wilson concluded broadband is an essential public utility and took matters into its own hands and built its own fiber optic based infratructure.

The story explains the reasons for America's incomplete telecommunications infrastructure and how policymakers are addressing the issue from Wilson city hall to Congress. Speaking of the latter, the story notes that lack of broadband is the top constitutent complaint for North Carolina Rep. Bill Faison, a House Democrat representing Orange and Caswell counties.

"I can't go to a public meeting anywhere in Orange or Caswell without someone coming up to me and saying, 'We've got a problem with Internet and here's what it is,'" Faison is quoted as saying. "No one comes up and says, 'We've got a problem with Medicaid,' or 'We've got a problem with the wildlife commission.' No one complains about the Department of Transportation not fixing a road in front of their house. They all show up and want high-speed Internet.'"

Sunday, June 22, 2008

The harsh reality of surburban broadband

I recently pointed out the U.S. digital dividing line doesn't necessarily run between urban and rural areas as it's often less than accurately described in the media and by public policymakers. Rather than a hard "digital divide," the nation instead suffers from a shamefully incomplete last mile telecommunications infrastructure with more broadband service holes than a Swiss cheese. Anyone is vulnerable to winding up in a void -- even folks living in densely populated suburbs.

Here's a piece in ZD Net by Jason Perlow titled The harsh reality of suburban broadband that aptly illustrates the point. Perlow is fortunate that he at least even has broadband access via his cable provider. There are some suburban residents and people living in metro areas who aren't able to obtain any wireline broadband service at all short of ordering up a costly T-1 circuit from their telco.

Tuesday, June 17, 2008

California Broadband Task Force availability maps leave much to be desired

Drew Clark of BroadbandCensus.com blogged about last week's Broadband Policy Summit IV sponsored by Pike & Fischer. He quoted Jeff Campbell, senior director of technology and communications policy at Cisco Systems, as praising the report issued in January of this year by the California Broadband Task Force for producing "address-level" data about both broadband availablity and throughput speeds.

While the underlying data may be based on a given address, it did not produce maps of similar granularity. The wireline broadband availabilty maps produced by the task force cover such large geographical areas as to be practically useless. There are no reference points such as identification of major highways and towns, nor can a viewer zoom in to view what's available in his or her own neighborhood.

Instead of making useless maps our public policy should incentivize rapid broadband deployment given that much of the nation is years behind where it should be when it comes to broadband services.

Monday, June 16, 2008

AT&T's Web site engages prospective broadband customers in circular shell game

I recently ran a drill I've been running for the past four years to check wireline broadband availability on AT&T's Web site. The availability search engine would predictably come back with the news that DSL was "unfortunately" not available at my location. Unfortunate indeed since I was ready to order it in early 2003. I was then invited to register to be notified "if" DSL became available. In the meantime, the message suggested, I may qualify for satellite Internet. Newsflash to AT&T: In case you hadn't noticed, I don't live in the Arctic Circle; there's fiber just 1.5 miles from my location. I'll pass.

Then earlier this year, the DSL availability check produced a new message, sans the dubious invitation to go suck a satellite:


You may qualify for AT&T U-verse High Speed Internet and TV. AT&T U-verse is a bundled service of 100% digital high-speed Internet with TV that provides you the ultimate home entertainment experience.

If DSL becomes available at my location, Contact Me

I inquired with AT&T's U-Verse folks to see if I qualified for U-Verse. It should be available in 1-2 months, I was advised in an email. When I noticed no VRADs were being installed to deliver U-Verse's VDSL-based service, I asked about the 1 to 2 month timeframe.

That resulted in another email from Ma Bell:

Although service was estimated back in April to be available 1-2 months, it was just an estimation. Unfortunately, we are not provided with enough accurate information to be “positive” on the feedback we provide.

In the meantime, the latest from AT&T's Web site is I "may" qualify for U-Verse. Bottom line, no DSL and no U-Verse. As usual, the ever equivocal Ma Bell says maybe and that's final. She's all dressed up with nothing tangible to sell.

Update 6/30/08: Ma Bell has changed her mind -- again. Now I no longer "may qualify" for U-Verse as an alternative since DSL isn't offered. It's back to "Go suck a satellite." No wonder some wags have aptly dubbed U-Verse "Re-Verse:"

AT&T High Speed Internet




Our system indicates that our DSL service, AT&T High Speed Internet, is not available at your location. However let's see if we have another solution for you:


You qualify for Satellite Broadband from AT&T
Learn More

Among the benefits AT&T touts of satellite is "Wide Footprint" because it can reach people even in remote locations. In my case, remote means two miles from a major U.S. highway with buried fiber cable plant along a frontage road 1.5 miles from my location. Gee, and here I thought I must be residing somewhere in the Arctic Circle.

Sunday, June 15, 2008

U.S. broadband: Desperate ideas of an industry that resists change

Here's a piece that ran in TG Daily by Wolfgang Gruener lamenting the dreary state of U.S. broadband and the lack of the kind of technological and market competition seen elsewhere in the information technology industry. Some key excerpts:

Mainstream DSL speeds aren’t enough to support family broadband networks and new services such as multimedia streaming and I don’t even want to talk about the quality and reliability of the DSL service in my hometown. Broadband providers already are the most significant roadblock between consumers and new applications and now we are hearing that connections will see delays and/or extra charges when you take advantage of new high-bandwidth services.

Let’s be clear: There is zero entrepreneurial spirit and zero social responsibility left in today’s U.S. telecommunication industry. This industry is not about products and consumer trends anymore. It is about protecting a revenue base without exploring and providing new and existing services to customers at prices that avoid new divides between the rich and the poor.

Any industry naturally resists change. Change fosters uncertainty and business hates uncertainty. The broadband telecommunications industry by its very nature lacks robust competition. It is monopolistic and at best, duopolistic. The barriers to entry (the cost of overbuilding new physical plant, regulatory hurdles) are high and discourage new players from entering the market. Without these new players entering the market and creating change by offering superior products and services, there is no incentive for the incumbents to improve their offerings. This is why the broadband telecommunications industry behaves as if it doesn’t believe in its future. There isn’t really a future when its fundamental perspective is preserving the status quo.

We are increasingly likely to see government intervention in the broadband telecommunications industry in the next several years if it becomes public policy to regard modern telecommunications — which now encompass broadband Internet — as vital infrastructure and a natural monopoly as occurred with basic telephone service decades ago.

Friday, June 13, 2008

TheStreet.com: AT&T mulls surcharge for high bandwidth DSL customers

Robert Holmes of TheStreet.com reports today AT&T is considering surcharging high volume DSL customers. "Usage-based pricing is one way to deal fairly with Internet usage, which is very uneven among broadband users," AT&T spokesman Michael Coe told TheStreet.com. According to AT&T, a small percentage of customers account for a large percentage of total bandwidth used, with the top 5 percent of residential DSL subscribers using 46 percent of the total bandwidth and the top one percent consuming 21 percent of bandwidth.


"Broadband use is surging," Coe says. "Based on current trends, total bandwidth in the AT&T network will increase by four times over the next three years."


Ma Bell has two likely motivations for considering the yet to be deterined surcharge, disclosed a little more than four months after she raised most residential DSL pricing tiers by $5 a month. As with the DSL rate increase, the goal is to milk additional incremental revenue out of DSL and secondarily, to drive high bandwidth residential subscribers over to AT&T's higher priced U-Verse bundled service.

Thursday, June 12, 2008

Survey results show speedy broadband a threshold advanced IP service

A survey of of executives, engineers and consultants representing the cable, telephone, satellite TV, broadcast, and technology equipment industries found that consumers are most interested in high speed Internet connectivity ahead of other advanced services such as HDTV over Internet and digital phone service.

Survey participants were asked to rank several advanced communications services on a scale of 1 to 5, with 5 being the most attractive to customers. High-speed data speeds received more rankings of 5 than any other service. Nearly 40 percent of the respondents ranked data rates as a top draw. About one-fourth of participants ranked HDTV service as a 5. Digital phone service received the fewest top rankings. Only 9.2 percent of participants ranked it at 5.

The results of the survey by Pike & Fisher Broadband Advisory Services were released today at Pike & Fisher's Broadband Policy Summit IV.

The results are hardly unexpected considering the U.S. is still playing catch up with other industrialized nations on broadband access and throughput speeds, with too many Americans still relegated to early 1990s era dialup. They show a solid broadband offering with robust bandwidth is a threshold service consumers want first and foremost ahead other advanced IP services.

Monday, June 09, 2008

Unusual competitive situation develops in the Big D: Verizon plans FiOS overbuild in areas served by AT&T U-Verse

Matt Stump at Onetrak reports Verizon is opting to go head to head with AT&T in the IPTV triple play market for about 60,000 customers in suburban Dallas.

The development is being seen by some such as Telecompetitor as possibly the opening salvo of a competitive war between the two big telco TV players in states such as Texas where the telcos have successfully lobbied for state video franchises. It's also likely a contest of IPTV technology with Verizon betting when it comes to delivering HDTV, it can clean AT&T's clock with its fiber to the home (FTTN) full fiber infrastructure compared to AT&T's hybrid fiber and copper cable VDSL-based plant delivering Ma Bell's U-Verse Internet/TV/phone bundle.

What's also interesting about this overbuild is there's also a cable provider in this same Dallas area, Time Warner Cable, that will now find itself competing not just with a single telco in the usual duopolistic market configuration, but with two.

Onetrak concludes Verizon's move could have significant implications for other states such as Florida, California, Indiana, Washington and Oregon where Verizon operates inside AT&T and Qwest territory.

Editor: Incomplete, inadequate telecom infrastructure requires state government to step into the gap

Broadband is essential as roads and like roads, it can't be left to the private sector alone, writes Charlotte Observer Associate Editor Mary C. Schulken.

Schulken cites a 2007 report by the North Carolina s
e-NC Authority showing in four counties -- Jones, Greene, Warren and Gates -- less than 50 percent of the households can obtain access to high speed Internet services, while in 21 more than 30 percent are mired in broadband black holes.

"Access to high-speed Internet is as basic today as being connected by a good road -- and offers the same public benefit," Schulken writes. "Yet the private sector will not pay to put it within reach of every household and every community in North Carolina. The state needs to step up and invest in connecting the last mile."

Too bad this is AT&T territory. Up north in Massachusetts, a Verizon spokesman says the company is deploying its FiOS fiber optic plant without regard to population density and particular in areas where the old cable plant needs replacement.

Population density not determining factor in Verizon fiber deployment, spokesman says

More so than population density, the condition of the existing copper cable plant influences where Verizon plans to deploy its FiOS fiber optic infrastructure, a Verizon spokesman told the Worcester (Mass.) Business Journal.

"If you have to replace the copper in a particular area, there's no sense putting more copper in there," the spokesman told the newspaper.

Another factor driving fiber is the need to offer bundled services to attract residential customers who have abandoned POTS (Plain Old Telephone Service) over copper in favor of wireless phone service.

Saturday, June 07, 2008

California PUC set to adopt guidelines for broadband subsidies

The California Public Utilities Commission is set to adopt guidelines June 12 for the California Advanced Services Fund (CASF). CASF was established by the CPUC in December 2007 to subsidize the deployment of broadband infrastructure in high cost unserved and underserved areas of the state. Funding will be prioritized for projects targeted to areas currently with only dial-up service or satellite and then to build out facilities in underserved areas if funds are still available.

$100 million in CASF funding is available, derived from a 25 percent surcharge on telephone bills that's estimated to be five cents a month for the average customer. The CASF surcharge will be offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service

Applications for CASF funding will be considered beginning July 3, 2008. CPUC will subsidize 40 percent of the project costs. Both wireline and wireless providers are eligible to apply. Benchmark throughput is 3Mbs for downloads and 1Mbs for uploads.

Project funding will be awarded by the fall of 2008 and successful applicants will have two years to complete their projects. That likely means for Californians currently located in broadband black holes -- there are some 2 million of them in about 2,000 towns according to a report by Gov. Arnold Schwarzenegger's Broadband Task Force issued in January -- they'll have to wait at least until the fall of 2010 before they'll realize any benefit. The CASF funding was one of seven recommendations by the task force to increase broadband availability in California.

Wednesday, June 04, 2008

Higher than expected equipment, lost opportunity costs dog AT&T strategy to retain copper cable plant

AT&T continues to use its decades-old copper cable plant designed for carrying analog voice traffic to distribute Internet protocol traffic via Digital Subscriber Line (DSL) and more recently, its triple play voice/Internet/TV bundled service, U-Verse.

This strategy has allowed AT&T to avoid large expenditures to replace its last mile copper with fiber optic cable while continuing to depreciate the aging copper cable plant. But over time, it could prove to be a costlier strategy. The reason is that it takes a lot of field-based booster equipment — remote DSLAMs in the case of DSL and VRADs for U-Verse — to pump high bandwidth digital signals over old copper.

AT&T has all but abandoned putting in more remote DSLAMs to provide DSL, choosing to concentrate instead on fiber-fed VRADs to distribute U-Verse. However, if DSL Prime has got it right, Ma Bell will need a lot more VRADs than DSLAMS to reach customers. While DSLAMs can reliably propagate DSL service up to 12,000-14,000 feet, the VRADs used to distribute far more bandwidth intensive U-Verse are considerably less robust, not able to reliably serve premises more than 3,000 feet away. According to DSL Prime, AT&T erred in initially believing their reliable service range was 5,000 feet.

If true, that’s going to cost AT&T big time. Both in higher infrastructure costs because it will have to install more VRADs than anticipated and in lost opportunity costs since it will have to turn away droves of potential customers — including many who missed out on DSL and are still relegated to early 1990s era dialup because the telco failed to install enough remote DSLAMs.

Monday, June 02, 2008

FCC’s Martin doesn’t get it when it comes to U.S. broadband build out, fuels myth it’s largely a rural problem

FCC Chairman Kevin Martin continues to mischaracterize America’s poor broadband build out track record as a rural issue, telling last week’s D: All Things Digital Conference that the U.S. lags on broadband access “because it costs a lot more to build out in more rural areas and people who live further apart.”


Memo to Mr. Martin: It’s not a rural vs. non-rural issue. Rather, it’s one of incomplete telecommunications infrastructure that for all too many is an unfinished onramp to the information highway. Or a Balkanized “hodge podge” as the Communications Workers of America termed it.


There are plenty of folks residing in metro areas who can’t get wire line broadband connections from either telcos or cable companies. Oftentimes a neighbor will get service while another down the street cannot. In my own case, there’s both buried telco fiber and Comcast aerial cable 1.5 miles from my home that has existed for years. But neither the cableco or telco offer wireline broadband to me or my neighbors.

 
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