AT&T’s bifurcated, speculative strategy on residential telecom service

AT&T has adopted a bifurcated and highly speculative future strategy for its residential premise telecommunications market segment that treats a small portion of it like a specialized business market for its fiber to the premise (FTTP) service while serving other residential customers with a mix of wireless technologies.

AT&T Fiber is primarily aimed at business premises and multi-family buildings and not single family homes. The company is phasing out its legacy U-Verse service that blends fiber to neighborhood distribution equipment with copper from the era of Plain Old Telephone Service (POTS) – metallic infrastructure it is anxious to retire as quickly as possible to avoid the cost of maintaining it. In its place AT&T is relying on proven and unproven radio-based technologies.

In some high cost areas of its U.S. service territory, AT&T recently announced it would construct infrastructure designed to deliver fixed residential premise service as part of upgrading its mobile wireless service to 4G LTE technology. However, that infrastructure will be obsolete the day it’s installed, not even close to approaching what the U.S. Federal Communications Commission considers service capable of supporting high-quality voice, data, graphics and video. It’s essentially a bolt on afterthought to a 4G LTE mobile wireless service upgrade that will likely bog down during peak periods as its shared bandwidth becomes saturated with heavy, multi-premise demand.

As for the unproven radio-based technology that’s still in the development phase, AT&T recently announced its experimental “Project AirGig” technology. It will utilize antennas mounted atop utility poles to transmit millimeter wave signals from pole to pole. It taps into those signals to feed premise service based on 4G (or more optimally, AT&T’s still under development 5G wireless technology.) The service will apparently be similar to electrical power distribution architecture where current from high voltage transmission lines on the tops of poles is stepped down by a transformer before it flows into a home. This service in theory would be capable of meeting the FCC’s minimum service standard. But at this point, it’s largely speculative and leaves much of AT&T’s residential market segment with no clear and certain future path as its legacy copper cable POTS plant rots on the poles.

Google's wireless service leaves bandwidth rationed business model undisturbed

Google's soft launch today of its Project Fi mobile wireless offering won't be a game changer for homes and small businesses unfortunate enough to be located outside the limited footprints of landline Internet service providers (or not in a Google Fiber "fiberhood") and reliant on wireless premise Internet service such as Verizon's 4G Installed service offering.

While Project Fi does allow the creation of wireless hot spots at a customer premise, it retains the metered pricing schemes of existing wireless providers wherein end users must purchase monthly bandwidth allowance levels, referred to as "bandwidth by the bucket."

That makes the service a poor value for premises service. It's easy to blow through the bandwidth allowances and end up with a large bill via software updates and video streaming. Parents in homes with teenage children who stream video such as Netflix have been shocked by jaw dropping bills. Or who do class work online, which has been spotlighted by Federal Communications Commissioner Jessica Rosenworcel as a key issue in America's Internet access disparities.

The Project Fi Plan and Pricing FAQ states:

Do you offer an unlimited data plan?

No, we do not offer an unlimited data plan. We believe you should only pay for the data you use.

 And you'll pay for it, all right.

If Google truly wishes to disrupt the existing wireless business model, it should build out fiber closer to neighborhoods and homes lacking fiber to the premise service and use it to backhaul really robust and not bandwidth rationed wireless service. This would be an interim step in a longer term effort to deploy fiber to the premise connections in these areas.

Event highlights scarcity of high-speed Internet in rural areas | The News Leader | newsleader.com

Event highlights scarcity of high-speed Internet in rural areas | The News Leader | newsleader.com: During a break, Korte explained how he, his wife, and their business, The Balance Group, switched to 4G cellular broadband service. However the data limits cellphone providers set make business more expensive, Korte said.

They’ve had to stick with it, though, and absorb the cost from exceeding data caps.

“I go to the (cellphone provider) and say, ‘Well, we need 300 gigabytes a month. That would probably do it.’” Korte said. “They laugh at it, and tell me to go to the cable company.”

Like many residents in Augusta County and those served by the two-dozen other rural, local government officials gathered for the workshop, cable service doesn’t extend to his home.

This pretty well sums up the sorry state of Internet infrastructure in much of the United States and trying to get by on mobile wireless.

Google's Project Loon no cure for the common Internet not spot

Google's experimental Project Loon unveiled this week that envisions a fleet of high altitude balloons providing Internet connectivity is likely to benefit only the most remote and undeveloped areas of the globe.  Fittingly, remote New Zealand was the site of the first experimental deployment of these 'loons, mate.

The technology won't be a panacea for more populated parts of the globe in developed nations plagued by incomplete wireline Internet infrastructure that serves only some residences and businesses while others adjacent are left off the Internet grid.

Nor can it provide sufficient throughput to support the rapid growth in bandwidth demand driven by video and the use of multiple devices common nowadays in many households.  According to Google, the high altitude digital dirigibles will provide connectivity at speeds comparable to 3G, the legacy mobile wireless service now being superseded by higher bandwidth 4G mobile wireless.

Tweed residents angry about broadband service to the area | Northern Star

Tweed residents angry about broadband service to the area | Northern Star: "When we lived in West Tweed on Kennedy Dr we got told we were too far from the interchange."

Mr Vivian was stuck with Telstra's mobile broadband solution.

"The only one we can get reception for in Tweed is Telstra 4G," he said.

"It's $60 for eight gigabytes.

"But it's so slow you might as well not use it sometimes."

This is occurring in Australia.  However, the same scenario is likely also playing out in the United States.

Verizon's residential LTE "HomeFusion" likely to serve only fringes of small number of metro areas

Verizon's announcement today of its HomeFusion wireless residential Internet service offering based on its nascent 4G cellular LTE service appears aimed at picking up marginal residential market share in suburban and exurban fringes of U.S metro areas where wireline connectivity from incumbent telcos and cable providers is sketchy. These are also areas where Verizon might otherwise deploy its FiOS fiber to the premise residential wireline product but will not because the company has called a halt to further FiOS expansion.

It's not likely HomeFusion will be broadly deployed in predominantly rural and quasi-rural areas. Like Verizon's mobile wireless offerings, it's bandwidth metered and can't offer the ample headroom for bandwidth demand growth -- much of it driven by video -- that fiber does. In order to improve Internet deployment and access in these areas, these communities will have to build their own fiber to the premises networks constructed by local governments or telecom cooperatives.

AT&T has effectively thrown in the towel in serving these areas. HomeFusion represents Verizon's last ditch effort to pick up some limited revenues in these underserved markets.

Why "wireless broadband" will remain in mobile market segment

This article in CED magazine explains why 4G cell service can't substitute for premises wireline Internet service:

Even if you’re a light user or a millionaire, you might still think twice about going entirely wireless. Allen Nogee, principal analyst for In-Stat, says he actually tried an LTE modem as his sole Internet connection for about four months. He was pleased with the service; however, he did eventually go back to a fixed line for a number of reasons.

Nogee says that while price is certainly an issue, depending on usage, spectrum is the truly prohibitive element that will prevent LTE from becoming an in-home solution. Nogee says that eventually the cell towers currently pumping out LTE will get crowded, and that’s when things get complicated.

“It’s a shared resource, with a set amount of spectrum, and operators only have so much spectrum,” Nogee says. “If we had no wired Internet in the United States and everyone attempted to use LTE, it just wouldn’t work. There’s just not enough capacity there.”

Another analyst, Strategy Analytics, predicts fixed wireline will remain the primary premises Internet connection and will not be displaced by 4G wireless connections where wireline infrastructure exists and serve as an alternative means of access where it does not.

“We see two parallel markets for 'Mobile Only' in the US: users in remote or underserved areas where dependable fixed broadband is unavailable, and cost-conscious casual users, who are unlikely to exceed imposed data caps, and for whom mobile data rates are ‘good enough,’” said Ben Piper, Director of the Service Provider Strategies program at Strategy Analytics.

What about tablets? Might tablet users cut the cord to these devices and instead rely exclusively on mobile wireless connections, especially since tablets are so portable? Not likely. Nearly all tablet data traffic will be transported via fixed premises Internet service, Sandvine says in its broadband predictions for 2012.

The Economist: Why LTE can't substitute for fiber

Some believe the Internet will become untethered over the last mile and point to cutting edge wireless transmission technology known as LTE or 4G. The two biggest telcos in the U.S., Verizon and AT&T, are rolling it out (or are about to in the case of AT&T.)

But it won't be able to replace the nation's aging copper cable infrastructure that has grown increasingly difficult and costly to operate reliably. Nor is it likely to provide sufficient capacity for future growth in bandwidth demand -- something that Verizon and AT&T are acutely aware having faced growth pains and capacity constraints with their current generation of 3G wireless.

The Economist explains why:

Already LTE has shown itself good for at least 5Mbps—impressive for a mobile technology still in its infancy (see “Generational change”, December 3rd, 2010). But with peak speeds of 1Gbps theoretically possible, LTE’s next iteration should make downloads of 100Mbps over the airwaves a matter of routine. Developments beyond that could lead to near-gigabit speeds.

Of the two, though, a fixed link like fibre remains the better bet. Sooner or later, even a 4G wireless protocol such as LTE or its country-cousin WiMAX will become overwhelmed by the exponential growth of mobile traffic. By contrast, an optical link to the home could use a multitude of different wavelengths to boost throughput almost indefinitely.

Network World also weighs in:

So the next question about wireless broadband as a substitute. Recall that according to the U.S. Government Centers for Disease Control and Prevention (CDC), 1 in 4 homes has cut the legacy wireline phone cord in favor of wireless-only voice. Could we see wireless substitution rates that high for broadband access? We think not because radio spectrum is a limited resource, and unlike wireless voice networks that have plenty of spectrum to manage voice calls, if 25% of broadband users shifted from wireline access, the demand for wireless broadband would likely exceed available spectrum given today's technology.

App-Rising: FCC fudges on fiber

From the perspective of App-Rising, a recent Federal Communications Commission report addressing how to complete America's incomplete IP-based telecom infrastructure suffers from a major flaw. There's too much emphasis on DSL wireline technology intended to serve as a temporary stopgap on the road to fiber to the premises -- technology that will soon be obsolete and already suffers from poor reliability and high maintenance costs given the nation's aging copper cable plant.

The FCC also fudges on fiber by looking to mobile 4G wireless technology as a substitute for fiber to the premises. I agree with App-Rising that's also bad idea. This technology is intended primarily for mobile and not premises service. And unlike fiber, it's not a proven technology. Plus there's no indication 4G won't also become quickly obsolete, unable to scale up as premise bandwidth demand inevitably grows.

Telco plans LTE for fixed premises broadband

FierceBroadbandWireless reports CenturyTel CEO Glen Post told the publicly traded telcos's quarterly conference call that it will deploy Long Term Evolution (LTE) aka 4G cellular broadband in 2010 as a platform to serve fixed premises customers in rural areas. CenturyTel serves small and mid-sized markets in 25 states, according to its Web site.

If this really occurs and isn't yet another of the vaporware technology claims common in the wireless broadband world, it could provide a superior interim fixed premises broadband pipe in broadband black holes until these areas can be wired for fiber optic cable plant.

Currently 3G cellular broadband plays that role in some areas lacking wireline delivered broadband. But it's more appropriate for mobile broadband than for fixed premises users given the tradeoffs of relatively slow throughput speeds, high latency and low bandwidth caps. Locally owned and operated fixed terrestial Wireless Internet Service Providers (WISPs), which also presently play a major role in bridging the broadband gap created by the limited technological reach of DSL and the limited service area footprints of cable companies, aren't likely to be competitive with 4G where it's deployed.

If it can deliver with good latency numbers, LTE could also offer better coverage than 3G since it will utilize 700 MHz radio spectrum that was purchased by CenturyTel Broadband Wireless and other telcos such as AT&T and Verizon in federal auctions conducted last year. The spectrum was formerly used for television signals and is noted for its robust ability to carry through rolling terrian and trees and buildings.

LTE will also potentially offer far higher thoughput -- in the range of 10-15 Mbps, according to Sidecut Reports. That's at least five times faster than what's currently available from 3G and WISPs.

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.