Friday, August 22, 2008

4G wireless broadband seen as potential game changing technology

Fourth generation (referred to as 4G or LTE--Long Term Evolution) wireless service expected to be deployed between 2010 and 2012 has the potential to be a game changer for IP-based advanced telecommunications services. The GSM Association (GSMA) predicts the technology will be able to provide 100 Mbps broadband connections, rivaling the throughput of fiber optic wireline services such as Verizon's FiOS, according to a report published this week in mobile news. The big questions of course are whether and when it can.

Blair Levin, an analyst with Stifel Nicolaus and a reportedly a rumored Federal Communications Commission nominee in an Obama administration, apparently thinks 4G will alter the playing field in broadband, telling this week's CoBank Communications Industry Executive Forum in Colorado that it has the potential to dramatically expand the cannibalization of wireline-based connections. That means people will not only ditch their voice landlines as they have in droves over the past few years, but also their cable and DSL-based broadband services since 4G's speeds will surpass these and at least approximate the 50Mbs throughput of pure fiber plays offered by Verizon, SureWest Communications and others.

But once again, 4G's broadband capabilities remain speculative and no one yet knows if 4G can really deliver on its potential and whether its costs can support a business model allowing it be be widely offered in the same footprint currently covered by existing 3G wireless services, which in some areas without wireline-based services is the sole terrestrial broadband option. Additionally, 4G must overcome the high latency that can render 3G connections decidedly less than snappy.

Meanwhile, the Sprint and Clearwire predict with expected regulatory approval by year end, their WiMAX rollout will leapfrog 3G and offer a technologically superior alternative with better range. Longer range translates into fewer transmission towers and lower latency.
Not only does WiMAX's longer range make it more suitable for less densely populated areas, it also reduces the need for fiber backhaul -- less widely available outside of metro areas -- since there will be fewer transmission sites to feed.

Looking ahead over the next several years, it appears likely the U.S. wireless broadband market will bifurcate with 4G/LTE-based systems run by the big telcos like AT&T and Verizon dominating in metro areas and WiMAX and WiMAX players such as Sprint/Clearwire taking control at the fringes and outside of metro areas.

Thursday, August 21, 2008

Go suck a satellite, AT&T spokesman reiterates


AT&T's marketing slogan "Your world delivered" should be followed by a huge asterisk directing readers to fine print that states:

* Provided you reside in our world, which may or may not exist in this or other dimensions, parallel universes or those comprised of dark matter and/or energy.

An AT&T spokesman drove home the point this week, telling the Eureka (Calif.) Reporter “People choose to live where they choose to live. (How profound) We have a broadband solution for everybody in areas where it’s not feasible to stretch the wireline network via satellite.”

In other words, "Your world isn't necessarily our world and if it's not, we're sorry, you'll just have to go suck a satellite." However, that's hardly a good option as some local residents quoted in the Reporter article note, pointing to its slow and less than reliable connections and high costs that make it more suitable for remote Arctic regions than the lower 48 states.

Connie Davis, a Web-based business owner and treasurer of the Hoopa (Calif.) Association, has the right idea when it comes to countering the big telco's lackadaisical stance. Davis says people cannot look to large telcos or even their local governments for help (the latter hardly surprising given California's difficulty in keeping both state and local govenment functioning these days) getting broadband. They must take matters into their own hands at the grass roots level and most importantly, think outside the box. Moreover, Davis has no time for delaying games packaged as "studies" of broadband availability and demand. "We don’t need to do studies," Davis says. "We don’t need to talk about this. We just need to do it because we need it.” I couldn't have said it better myself, Connie.

I hope the millions of folks stuck in broadband black holes throughout the U.S. follow her advice and form fiber optic and wireless cooperatives they can control and operate rather than leaving themselves at the mercy of big telcos and cable companies who are about as responsive to their needs as the former Soviet phone company.

Wednesday, August 20, 2008

Telecompetitor: Telcos should offer complementary wireline and wireless broadband to residential customers

Telecompetitor is out with analysis today that warns wireless services that have been cannibalizing first tier telcos' landline voice subscriber base also pose a threat to their wireline broadband services.

Telcos can ameliorate the threat, telecompetitor suggests, by segmenting their residential broadband offerings into two complementary products: A wireline-based broadband "heavy" connection featuring fast throughput and a broadband "lite" wireless service delivered via their 3G and, later, 4G, cellular system-based service.

Service that will seamlessly extend the broadband experience, both inside and outside of the home, is "quite compelling," telecompetitor concludes, pointing to a Nielsen Mobile study released Tuesday that found wireless broadband access cards while originally targeted at mobile users are increasingly popular among fixed residential users.

Although it makes sense on its face, this strategy is currently flawed insofar that it assumes telcos are already providing robust wireline broadband connections to residential customers who can get them. That's hardly the case for most residential customers whose DSL connections typically max out at 3 Mbs and often at slower speeds very close to current 3G cellular wireless broadband throughputs. (I omit AT&T's U-Verse and Verizon's FiOS services since they're available to only a small fraction of their residential customer bases.)

The rise in fixed residential use of 3G cellular broadband connections discovered by Nielsen Mobile is likely being driven by the lack of wireline-based broadband offerings. As this blog reported a few months back, some telcos such as Verizon Wireless have picked off AT&T residential customers in the many areas where AT&T has neither wireline nor terrestrial wireless-based broadband offerings. That strategy also gives Verizon the opportunity to cross sell its cellular voice plans to AT&T customers and build brand loyalty.

Tuesday, August 19, 2008

Comments by AT&T exec show U.S. cannot rely on big telcos to speed lagging broadband deployment

Recent comments in the New York Times by AT&T technology chief John Donovan underscore why the United States cannot rely on for profit, private sector providers to bring advanced Internet protocol-based telecommunications services to a nation that continues to lag years behind where it should be on broadband deployment. While America’s largest telecommunications company, Donovan’s comments show that AT&T is simply too risk averse to make the necessary investment to bring its rapidly aging last mile infrastructure up to date.

"The ideal way to deploy technology is on the last day as fast as possible, because it gets more capable and cheaper every day," Donovan told the newspaper. This has been AT&T’s failed broadband deployment strategy that has seen its seemingly bold broadband initiatives such as Project Pronto and Project Lightspeed collide with the company’s conservative culture aimed at maximizing depreciation and cash flow and paying large dividends to shareholders.

As your blogger has previously noted, that conservative capex strategy also likely reduces demand for advanced IP services over time since residential and home office based users who have repeatedly asked for such services conclude they will never be made available to them and give up and stop requesting them. The reduced customer demand in turn self justifies AT&T’s decision not to upgrade its plant and also limits competition since competitive local exchange carriers can’t sell their services if there are no circuits over which to deliver them. Moreover, cable companies won’t bother to extend their systems to such deprived areas either, leading to highly persistent broadband black holes.

The U.S. has already begun to move toward an alternative last mile broadband delivery model that’s playing out at the local level with support in some cases from state and federal funding. Under this emerging model, the last mile infrastructure — typically fiber — is privately owned and maintained by local property and business owners similar to privately owned roads. On a larger scale, entire communities opt to form nonprofits or cooperatives to deploy fiber systems. California Gov. Arnold Schwarzenegger recently signed legislation into law that would allow community services districts to construct their own infrastructure if for profit providers decline to do so.

Sunday, August 17, 2008

Expert says municipalities should facilitate fiber builds versus wireless

Tim Nulty, a name that has appeared on this blog before, is once again sharing his sagacity on the future of U.S. broadband. Nulty, who until recently served as director of Burlington Telecom, a publicly owned broadband system serving the city of Burlington, Vermont and who now runs ValleyFiber, a nonprofit organization focused on bringing municipal fiber to Vermont towns, suggests municipal wireless broadband isn't going to hack it because it doesn't have sufficient bandwidth.

Nulty uses a transportation metaphor to illustrate that while wireless systems may offer mobility, a fiber-optic network connected directly to homes boasts nearly unlimited capacity. "Think about 747s and helicopters,” Nulty told The Progressive magazine. “Helicopters are marvelous when they’re used for what they’re good at. But you don’t use them to fly thousands of people between Boston and Chicago. For that you need 747s.”

Nulty makes a valid point that has been missed by most industry observers. Exploding demand for bandwidth could make even wireless broadband technologies with 20Mbs throughput such as WiMAX and 4G LTE cellular obsolete not long after they are projected to hit the market by 2010-12. (Indeed, existing wireless broadband infrastructure is arguably already obsolete, typically unable to deliver even speeds matching DSL and hamstrung by 1970s era copper T-1 technology used for backhaul)

Only wireline-based fiber has the capacity to handle the booming demand for bandwidth. Local governments should encourage fiber optic infrastructure investments, particularly since their residents and business owners cannot necessarily count on telcos and cable companies to step into the gap.

Monday, August 11, 2008

Consultant: U.S. broadband market still has "a lot of growth potential"

Bruce Leichtman, president of Leichtman Research Group, said Monday that while U.S. telcos and cable companies added the fewest number of new broadband subscribers during this year's second quarter than any of the past seven years, it's not because there are no new customers to be had. According to Leichtman, "there's a lot of growth potential out there" among people who use dial-up or don't have Internet access at all.

Read the full article at Yahoo news.

Tuesday, August 05, 2008

ISPs target remote areas of Northern California for state subsidized broadband infrastructure

A review of broadband infrastructure projects filed by the July 24 soft application deadline for 40 percent buildout subsidies from the California Advanced Services Fund to service unserved and underserved areas of the state shows nearly all of the proposed projects are located in Northern California. Most are in ZIP Codes and census tracts in North Coast counties and heavily concentrated in remote Sierra Nevada counties.

The providers -- whose identities remain under wraps until the close of the application process being overseen by the California Public Utilities Commission -- have apparently chosen to deploy outside of metro areas where they believe they could face near term competition from the telco/cable duopoly. That unfortunately means for those mired in broadband black holes where telcos and/or cable companies have limited, incomplete broadband infrastructure in parts of metro area counties such as the Sierra Nevada foothill counties of El Dorado and Placer and portions of Silicon Valley, relief doesn't appear likely anytime soon from one of these subsidized ISPs. In El Dorado County alone, for example, the California Broadband Task Force identified more than five dozen communities that aren't provided any wireline broadband services -- and that's not counting the numerous broadband black holes adjacent to U.S Highway 50.

Providers seeking the CASF funding were allowed to propose either wireline or wireless broadband projects providing minimum throughput of 3 Mbs down and 1 Mbs up.

Update 9/3/08: The CPUC has released ZIP Codes, Maps and Census Block Groups for proposed projects filed by the Aug. 25 soft deadline that would build out broadband infrastructure to underserved areas, which the CPUC defines as those where broadband is available but no facilities-based provider offers service at asymmetrical speeds of at least 3 Mbs for downloads and 1 Mbs on the upload side.

As with the proposals for unserved areas, defined as defined those not served by any form of facilities-based broadband, or where
Internet connectivity is available only through dial-up service or satellite, the vast majority of the proposed projects for underserved areas are situated in Northern California. This latest batch of proposals is heavily concentrated in Sierra Nevada and Sierra Nevada foothill counties including Toulumne, Mariposa, Amador and Calavaras counties.

Monday, August 04, 2008

Will state broadband subsidies have meaningful impact?

Massachusetts appears set to join California among states providing subsidies to expand broadband telecommunications infrastructure where little or none exists.

The Berkshire Eagle of Pittsfield, Massachusetts reports Bay State lawmakers have sent Gov. Deval L. Patrick legislation that would provide $40 million to help underwrite the cost of building infrastructure in the notorious sprawling broadband black hole in the western part of the state. According to the newspaper, the goal of the legislation, signed into law today by Patrick, is to wire 32 unserved communities with high-speed broadband in the next two years.

Out on the left coast, a deadline passed July 24 for providers to submit proposals to the California Public Utilities Commission under which they would receive a 40 percent subsidy to deploy either wireline or wireless-based broadband infrastruture capable of speeds of at least 3 Mbs down and 1 Mbs up. Priority will be given first to unserved areas and then underserved areas. The $100 million California Advanced Services Fund is funded by a surcharge on telephone bills. The CPUC is expected to announce those projects selected for funding by the fall or later this year.


Given the high cost of broadband telecommunications infrastructure, it remains to be seen if these relatively small state subsidies can make a signficant dent in both states' many broadband black spots. Some believe broadband market failure is so pervasive that a much broader, larger federal initiative similar to the Eisenhower-era federal highway act is needed to bring America into the modern age of Internet-based telecommunications and are urging presidential candidates to back such a program.

AT&T sees WiMAX as solution for less densely populated areas of U.S.

As AT&T's copper plant has been neglected outside of metro area cores, there has been much speculation about the big telco's future plans for it. Particularly since much of it is too deteriorated and unreliable to support weak Digital Subscriber Line (DSL) signals that degrade quickly over distance. In addition, AT&T has not been upgrading its copper plant to support its fiber/copper hybrid Project Lightspeed/U-Verse IPTV/voice/data bundled service outside of the limited metro areas where it's deploying U-Verse.

AT&T's new technology chief John Donovan is making AT&T's view of the future its aged copper cable plant in these regions more clear in a published interview with USA Today: It's a costly, obsolete albatross -- a legacy of the analog era of plain old telephone service (POTS).

Now that AT&T defines itself more as a wireless than wireline carrier, wireless is naturally viewed as the logical copper cable replacement strategy. At the top of the list, USA Today quotes Donovan as saying, is WiMAX, which AT&T apparently sees as a longer range and more robust solution for both fixed and mobile voice and data services outside of densely populated areas. In the latter, the telco will likely deploy its planned 4G Long Term Evolution (LTE) cellular service that is expected to provide far faster Internet connections than its current 3G system that itself isn't universally deployed in AT&T's 22-state territory.


Donovan told the newspaper WiMAX appears particularly well suited to rural areas of the U.S. where it's becoming prohibitively expensive to maintain copper.


Reports last year suggested Ma Bell planned to ramp up her WiMAX deployments starting earlier this year after initial rollouts in the Fairbanks, Alaska area and parts of the former Bellsouth territory AT&T acquired at the end of 2006.

Telecompetitor speculates that AT&T's interest in WiMAX as a replacement for copper cable represents the start of a "coordinated rural market divestiture strategy."

 
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