U.S. needs complete telecom infrastructure construction strategy, not minimalist incrementalism

The United States needs a comprehensive, holistic approach to ensure the construction of fiber optic infrastructure to provide robust Internet enabled telecommunications services in the 21^st century on a par with universal telephone service in the 20^th. The nation won’t achieve that standard in a timely manner by relying on incremental, one off builds.

While it’s laudable that some local governments have built or are planning fiber infrastructure in response to private sector market failure on the supply side (as spotlighted this week in Cedar Falls, Iowa by President Obama), these builds without significant and sustainable funding support cannot cumulatively provide the telecommunications infrastructure the nation needs and should have been planning at least two decades ago. As Steven S. Ross notes in his article in the November-December, 2014 issue of Broadband Communities, Bandwidth: Good for Rural Residents, Good for the Country, these localities that have or are putting in place modern telecommunications infrastructure participate in the same economy as do others lacking it.

New York State’s initiative announced this week it would dedicate $500 million of a $4.5 billion windfall arising from the settlement last year of prosecutions of alleged misconduct by banks and insurance companies to subsidize fiber construction. That’s one time, opportunistic funding that will help construct fiber in areas where it doesn’t exist. But it addresses only a small fraction of the state’s significant need as shown by the accompanying map. The money will quickly be exhausted with no plan fiber up the rest of the Empire State, reinforcing existing disparities. Similar underfunded initiatives exist in other states. Incrementalism allows policymakers to claim small, short term victories but leaves incomplete networks in its wake over the longer term.

Other examples of incrementalism are the continuing circa 2002 debate over “broadband speeds” -- which grows increasingly irrelevant in an age of fiber optic-based telecommunications technology -- and “net neutrality.” Net neutrality – the principle that all Internet traffic be given equal priority – is meaningless without robust network service in the first place. A more important principle than net neutrality is Metcalfe’s Law. It holds that the value of a communications network increases as the number of connections to the network grows. With so many Americans not offered fiber Internet service, the U.S. has a long way to go to recognize the full value of Metcalfe’s Law. It won’t get there with piecemeal incrementalism.

CNY man says Time Warner Cable wants to charge $20,000 for broadband Internet | syracuse.com

CNY man says Time Warner Cable wants to charge $20,000 for broadband Internet | syracuse.com: Think your cable and Internet bill is too high? Jesse Walser might disagree with you.

Walser, who lives about 20 miles outside of Syracuse in the rural town of Pompey, told Ars Technica that Time Warner Cable wants to charge him more than $20,000 to hook him up with broadband Internet. What baffles him is that he can see TWC lines from his house, just 0.32 miles from the road.

"I didn't think it would be that difficult, because the cable was on my road," he told the tech news site. "I have phone. I have electricity. It's not completely 'Green Acres.'"

As this blog has previously pointed out, many Americans lack wireline Internet access because of this kind of arbitrary redlining by legacy incumbent telephone and cable companies. It's difficult to make a credible argument that living less than a half mile from existing infrastructure puts a customer premise out in the middle of nowhere, making it cost prohibitive to serve. As Mr. Walser points out, his circumstance bolsters the argument that last mile Internet service providers be classified as common carriers.

This situation has existed unchanged throughout much of the United States over the past decade (and isn't likely to change anytime soon), leaving some 19 million homes offline according to the U.S. Federal Communications Commission. The FCC is currently considering common carrier regulation of Internet service providers.

Broadband black holes in Brooklyn?

Surprisingly so, according to this item on the New York City Broadband Advisory Committee appearing today in the Queens Chronicle:

The committee working to bring high speed public Internet access to New York City will be holding a hearing in Queens on Monday, March 3 at 1 p.m. The New York City Broadband Advisory Committee will convene at LaGuardia Community College in Long Island City. The public is invited to attend and testify.

The committee, headed by Councilwoman Gale Brewer from Manhattan and including Councilman James Sanders from Springfield Gardens, will hear testimony from local officials and Queens residents about the accessibility and affordability of high speed Internet in Queens.

The committee has held hearings in Manhattan, the Bronx and Brooklyn already and was surprised to learn that some areas of Brooklyn have no cable or Internet access, according to Brewer. Sanders speculates that the same situation probably exists in parts of Queens.

NY Gov. Spitzer forms state broadband council; RFPs issued for research of nontraditional infrastructure

New York Gov. Eliot Spitzer announced the state would issue RFPs today to begin the process of distributing $5 million in seed funds allocated in the Empire State's budget for competitive grants to research, design and implement accessible Internet for unserved and underserved areas of rural and urban New York. Spitzer also announced the formation of the New York State Council for Universal Broadband. The council will recommend "a comprehensive statewide strategy that charts a course towards affordable broadband access throughout the state" and "leverage existing resources, consider new ways to extend high-speed Internet access beyond traditional means and recommend approaches to increase digital literacy in underserved urban and rural communities."

“As we build an innovation economy we must make New York the most connected and technologically advanced place to live and do business in the world," said Spitzer said in a news release. "Internet access is no longer a luxury. We must implement a strategy that leads to every New Yorker having access to affordable, high-speed Internet so that they may take advantage of the economic, social and cultural opportunities it provides.”

When he was inaugurated in January, Spitzer set a goal of universal broadband access, starting by mapping out existing infrastructure and broadband black holes. The state Broadband Council will be charged with this task.

Spitzer said a lack of federal leadership to establish a national broadband policy requires his state take the initiative, which comes as California Gov. Arnold Schwarzenegger is to issue a report this month his Broadband Task Force has been developing over the past year. The report will make specific recommendations on "how California can take advantage of opportunities for and eliminate any related barriers to broadband access and adoption." Similar state-level initiatives are have been undertaken in several other states over the past two years.

A key element of Spitzer's strategy -- one likely to be embraced by Schwarzenegger's Broadband Task Force -- is public-private partnerships. "State government will not be the one constructing these networks, Spitzer emphasized. "Instead, state money will be used to leverage matching funds from the private and not-for-profit sectors. In the end, it is New York’s vibrant telecommunications sector—together with their tireless and invaluable workers—who will implement this vision in partnership with government."

It remains to be seen whether states can inject enough money into public-private broadband initiatives to spur telecom providers to build out their networks -- particularly when states such as California continue to deal with sizable budget deficits. And because the telcos and cable companies are publicly traded, short term earnings pressures make it difficult for them to undertake major projects to expand their broadband infrastructures.

States could be convinced to find ways to fund broadband initiatives if they believed the funding would have a multiplier effect by stimulating economic activity and generating tax revenues that could be used, for example, to service state bond debt.

An AT&T-funded California study released in November found the Golden State would 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.

“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.

Protecting the telco/cable duopoly

This story out of New York state shows that telcos (in this case, Verizon) can offer broadband-based Internet Protocol TV (IPTV) in without legislation the telcos are seeking in the Empire State to put the state in charge of issuing so-called "video franchises" In this case, Multichannel News reports, the towns of West Haverstraw and North Castle approved Verizon's applications to provide IPTV over its propriety fiber optic FiOS infrastructure.

The telco/cable duopoly has pursued similar legislation in about a dozen states, claiming it would allow them to bypass local governments, bring greater market competition (pretty hard to do in a duopolistic market) and deploy broadband-based services more rapidly. However, at the slow pace at which the telcos and cable companies are expanding the availability of their broadband services, doing with local government regulation one area at a time certainly doesn't seem to be an impediment.

Rather than speed up deployment of broadband, the true objective of the state franchise measures, like a recently-promulgated Federal Communications Commission rule (which is being legally challenged by local governments), is to protect telcos and cable companies from local government demands they hasten the build out of their infrastructures in order to make broadband available to unserved areas.