Saturday, August 27, 2016

Legacy telcos want out from under FCC's Title II universal service requirement -- for both voice phone and Internet

CenturyLink, heir to old Bell system, wants to be freed from state oversight - StarTribune.com: CenturyLink’s petition is a “first-of-its kind request in Minnesota to deregulate basic local phone service following legislation enacted by the Minnesota Legislature in 2016,” according to a PUC filing by the state attorney general’s office. “The company’s request is premised on the alleged existence of adequate alternative means of communication,” the filing said. “Significant questions remain as to the existence of those alternatives on a universal basis — e.g. in all homes, in all parts of the state, etc.” 

The dominant telephone and cable companies dislike the U.S. Federal Communications Commission's Open Internet rules issued in 2015 that reclassified Internet as a telecommunications utility subject to universal service and anti-redlining requirements under Title II of the Communications Act of 1934. For now, however, it appears they have little to complain about in practical terms given the FCC's lack of enforcement of the regulation. The regulatory agency's posture is if a customer orders Internet service and is denied it and complains, we'll just look the other way.

An emerging question is whether the FCC and state public utility commissions will take the same position on telephone service. Legacy telephone companies like CenturyLink also don't want to comply with the longstanding Title II universal service mandate requiring voice telephone service be provided to all customer premises in their service territories that order it.

For both voice and Internet service, the reason for the resistance is the same. It would require investing billions of dollars on fiber to the premise infrastructure to replace old metallic outside plant -- billions the legacy providers lack. Ditto newcomers like Google Fiber. There just isn't adequate economic capacity among investor owned providers to address America's telecommunications infrastructure deficit.

Saturday, August 20, 2016

The false analogy of comparing analog telephone service to Internet

Clinton pushing broadband growth as big part of $275 billion infrastructure plan - Watchdog.org: Brent Skorup, who studies broadband issues for the Mercatus Center in Fairfax, Virginia, told Watchdog the goal of 100 percent broadband usage is unrealistic because some people — largely skewing older — have no interest in internet access.
“It’s been 100 years and there’s still not 100 percent penetration of the phone market,” he noted.

This furthers the falsehood propagated by the incumbent legacy telephone and cable companies that Internet protocol-based telecommunications is solely about getting a "broadband" connection to a desktop or laptop computer. If people don't use a computer much, the so-called "digital adoption" logic goes, then they don't need "broadband" and can get along fine with 1990s-era dialup or first generation ADSL. Ergo, they certainly don't require a fiber to the premise (FTTP) connection and the current infrastructure will suit them fine for the foreseeable.

This is nothing more than a concocted justification for not modernizing telecommunications infrastructure from the metallic cable put in place decades ago to carry phone calls and cable TV signals to FTTP. The telephone was the first form of telecommunications to serve people in their homes, businesses and institutions. It broke new ground and had longer path toward universal acceptance and daily use.

Nowadays, telecommunications technology is widely adopted and used by nearly every address. IP is a multimedia platform that supports not only data but also voice and video. IP over FTTP is an evolutionary shift and not a fundamentally revolutionary development as was the telephone. The analogy fails.

Tuesday, August 16, 2016

Tennessee's telecom infrastructure gaps not just a Tennessee problem. It's a national problem.

EPB Says Those Without Broadband Should Make Their Voices Heard - Chattanoogan.com: “Ultimately, Tennessee’s broadband gap is a problem for Tennesseans, and we need a Tennessee solution,” said David Wade, president of EPB. "We will continue to work with the growing number of state legislators and grassroots citizens interested in removing the barriers that prevent EPB and other municipal providers from serving our neighbors in surrounding areas who have little or no access to broadband.
I respectfully dissent. America's telecommunications infrastructure deficiencies manifest in every state, not just Tennessee. It's a national problem that demands a national solution. I elaborate further in this post from earlier this year.

Monday, August 15, 2016

Dismal state of U.S. telecom modernization enters new dilatory phase, prolonging infrastructure deficiencies

The dreary state of the modernization of America’s deficient telecommunications infrastructure -- already more than two decades tardy when it comes to the task of replacing metallic legacy telephone and cable systems with fiber optic to the premise infrastructure (FTTP) – is entering a new dilatory phase. Inspired by fellow blogger Steve Blum of Tellus Venture Associates, I’m dubbing it the “magic radio” phase. The goal: forestall FTTP infrastructure investment and instead experiment with various wireless technologies. As Blum correctly nails it, it’s based on “eternal hope that magic radios will appear one day and render wireline technology obsolete.”

It’s wishful thinking driven by the continued misguided reliance on undercapitalized investor-owned players like Verizon, AT&T and Google Fiber. All are looking into fixed premise wireless technologies, with Google Fiber the most recent, putting its FTTP builds on hold last week while it searches for the right radio magic. They all like the idea of employing wireless technologies for premise delivery because no one player has the many billions of dollars necessary to build out FTTP, spawning a search for lower cost alternatives.

The problem is the physics of radio spectrum are even more constrained than their finances. There’s only so much data than it can carry. Higher frequencies can carry significantly greater amounts. But only over such short distances that their use would require fiber to be brought so close to customer premises that the hoped for savings by avoiding FTTP deployment would be severely diminished. Not to mention the fact that higher frequencies are easily blocked and subject to interference without an unobstructed line of sight.

Saturday, August 13, 2016

Extending incrementalism of current U.S. telecom infrastructure modernization programs won't acheive ambitous Clinton campaign pledge of universal service by 2020

Hillary Clinton's Broadband-for-All Plan Faces Hurdles: In seeking universal, affordable broadband access, the Democratic candidate is aiming to “close the digital divide,” according to her campaign website. Clinton pledges to deliver on this goal with continued investments in the Connect America Fund, the Rural Utilities Service program and the Broadband Technology Opportunities Program, and by directing federal agencies to consider the full range of technologies—including fiber, fixed wireless and satellite—as potential recipients.
These are existing programs that simply aren't big and bold enough to achieve Clinton's goal of universal advanced telecommunications service by 2020. They preserve the vertically integrated, investor-owned, closed access network and subscription-based business model that produces widespread market failure leaving too many American premises unable to obtain service. Two of these programs are aimed at rural areas and thus fail to address the fact that much of America's infrastructure gaps exist outside of rural areas as Clinton herself pointed out in an economic policy speech this week.

The programs cited by Clinton embody the incrementalist thinking that is part of the problem and not part of the solution that requires a radically new approach. Meeting her objective on telecom infrastructure will require a far more aggressive policy such as the National Telecommunications Infrastructure Initiative outlined in my 2015 eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis.

Thursday, August 11, 2016

Hillary Clinton gets it: U.S. does not just have a "rural broadband" problem

It's a well established management and planning axiom that effectively addressing a problem or issue relies upon a clear definition of the problem. When it comes to modernizing its telecommunication infrastructure and addressing infrastructure disparities, it's too frequently imprecisely defined as a "rural broadband" issue.

That papers over the fact the the United States suffers from very uneven deployment of advanced telecommunications infrastructure in all areas: rural, exurban, suburban and urban. In short, the U.S. doesn't only have a "rural broadband" problem. It has significant, widespread gaps and incomplete infrastructure everywhere in the nation. It's folly to define the issue purely based on geography.

Finally that realization is beginning to register with public policymakers and office seekers as illustrated in a speech this week by Democratic presidential candidate Hillary Clinton:

You know, I happen to think we should be ambitious. While we're at it, let's connect every household to broadband by the year 2020. It's astonishing to me how many places in America not way way far away from cities but in cities and near cities that don't have access to broadband. And that disadvantages kids who are asked to do homework using the Internet; 5 million of them live in homes without access to the Internet. So you talk about an achievement gap, it starts right there. (Emphasis added)

Excerpt courtesy of Newsweek. Full transcript here.

Yet another pointless "broadband survey"

County looking for participants in broadband survey - Salisbury Post | Salisbury Post: There’s roughly one month left for Rowan residents to participate in the county’s broadband access survey. The survey was posed on Rowan County’s website roughly one month ago and has one month to go before it’s taken down. It’s purpose is to gather information about areas of Rowan County that are underserved by internet providers. It can be found on the front page of Rowan County’s website: www.rowancountync.gov. Those interested can access the survey by clicking a link that states “Broadband Service Survey.”

Yet another pointless "broadband survey." U.S. landline telecommunications infrastructure is very uneven with numerous service gaps and disparities in all areas. We don't need more surveys to point up that fact.

Tuesday, August 09, 2016

San Jose's Google Fiber rollout is delayed while tech giant explores alternatives - Mercury News

San Jose's Google Fiber rollout is delayed while tech giant explores alternatives - Mercury News: SAN JOSE -- Google has told at least two Silicon Valley cities that it is putting plans to provide lightning-fast fiber internet service on hold while the company explores a cheaper alternative. The news comes nearly three months after San Jose officials approved a major construction plan to bring Google Fiber to the city. Mountain View and Palo Alto also were working with Google to get fiber internet service but said Monday that the company told them the project has been delayed.

The economics of selling monthly subscriptions to one customer premise at a time -- the business model employed by the vertically integrated legacy telephone and cable companies Google is challenging -- are difficult. That's why it has produced widespread market failure and disparate access. And when the incumbents throw up legal speed bumps to slow deployment like making access to utility poles difficult, the business case for infrastructure ROI becomes even more difficult.

It's no surprise Google Fiber is reconnoitering. Using the investor owned, vertically integrated, subscription-based closed access business model favored by the incumbents to finance and construct advanced telecommunications infrastructure is like building roads based on the number of occupied garages -- preferably housing BMWs, Lexus and Mercedes. Google Fiber's problem is it's insufficiently disruptive. It's taking on the legacy telcos and cablecos with their own business model -- one that favors established incumbents and not new entrants like Google Fiber -- without any major cost or marketing advantage.

Monday, August 08, 2016

Public-private parterships for telecom infrastructure modernization hamstrung by subscription-based business model of incumbents

Citywide broadband service could cost over $200 million, study says | Local News | host.madison.com: In the report, CTC recommended that the city pursue an approach in which the city would build and own the fiber network. Private businesses would then provide internet service and build lines connecting individual users to the network.

This of course assumes those "private businesses" are willing. This is a major downside of applying a end user subscription-based model employed by legacy incumbent telephone and cable companies that has produced widespread cherry picking, redlining and market failure in the United States. Using the same business model isn't going to result in a rapid project that builds out to serve all Madison, Wisconsin homes, businesses and institutions. The private partners will run the numbers and likely conclude that simply doesn't pencil.

Soglin said covering the cost for the project would be a challenge, but said the move would foster competition among internet service providers and force them to improve their services.


Perhaps among the service providers. But certainly not among infrastructure builders since telecom infrastructure tends toward a natural monopoly due to high costs to play in the market.


"It will be a fight, politically and economically, with the companies that would rather have monopoly kind of control," Orton said.

That would be Barry Orton, chairman of the Citywide Broadband Subcommittee and a professor emeritus at UW-Madison. And he's right. The subscription-based, sell and own the customer business model favored by legacy telcos and cablecos promotes a winner take all mentality that along with the aforementioned microeconomic realities foster a monopoly market.

Tuesday, August 02, 2016

Market failure, not lack of competition drives telecom infrastructure deficiencies, disparate access

Charter, Comcast, AT&T Really Want To Stall Chance Of Competition From Google Fiber – Consumerist: As we’ve seen over and over again, high-speed broadband competition is hard to come by in huge swaths of the country. And one reason for that is because incumbent companies, especially AT&T, have a habit of throwing their weight around when competition does finally (try to) come to town. Meanwhile, though, it remains the best chance for consumers: both Comcast and AT&T charge less for their service in cities with Google’s super-speedy competition.
"Lack of competition" continues to be proffered as the primary rationale for America's telecommunications infrastructure deficiencies and disparate access. But that's the wrong analysis for the simply microeconomic fact that telecommunications infrastructure connecting customer premises is not and will never be a competitive market with many sellers and many buyers. The cost barriers to entry for would be competitors are too high. That's why one doesn't typically see multiple natural gas, water or power lines serving a given premise. It would be ridiculously wasteful and make it even harder for the builder of that second or third connection to achieve a return on their investment in a reasonable time frame.

The real reason the United States suffers from less than world class infrastructure connecting all homes, businesses and public institutions is excess reliance on investor-owned infrastructure providers overly prone to market failure. Since the microeconomics don't work, they can't meet the buyer side demand for affordable access even as it grows exponentially. They simply cannot make a decent return on investment, so they naturally don't invest in infrastructure. Not because they "refuse" to as many analysts claim. Because they simply can't afford to, whether it be AT&T, Comcast, or Google Fiber.
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