Showing posts with label cooperatives. Show all posts
Showing posts with label cooperatives. Show all posts

Wednesday, November 21, 2018

Cooperatives served early 20th century exurban America's electricity and telephone needs, but face far more challenging situation for today's advanced telecom

Matheson: ‘We Want the Consumer to Have Real Broadband’ - America's Electric Cooperatives: NRECA CEO Jim Matheson, speaking before a Washington audience of business strategists, outlined how federal policymakers can help close the digital divide and what innovative electric cooperatives are doing to meet rural America’s broadband needs in the meantime.High-speed internet service “is important to us as electric cooperatives because we are owned by the communities we serve, communities that won’t have much of a future without broadband,” Matheson said at the Next.2018 conference held Nov. 13-15 by Bloomberg BNA, a news and analysis company.

Matheson underscored how electric co-ops are leaders in smart technology, yet Federal Communications Commission policies fail to make the most of co-op investments for broadband development. “The FCC has spent $114 billion, and there are still 23 million people without access to broadband,” he said. This gap in service is due in part to the commission’s reliance on self-reported and unverified data about internet service from incumbent providers.
Electric power was first deployed in urban areas of the United States at the start of the 20th century. That's what led to the formation of electric cooperatives in the 1930s to provide electricity outside of urban areas.

Today's advanced telecom infrastructure deficiencies are a different story. Unlike early electric power service, advanced telecom infrastructure does exist outside of urban and suburban areas. But it's generally only deployed to discrete areas where legacy incumbent telephone and cable companies believe they can earn a relatively rapid return on their capital expenditures and maintenance costs. As per the previous post on this blog, that can mean service for one house while another just down the road, around the bend or outside town limits is deemed unservicable.

Incumbents aren't keen on federal subsidies for providers desiring to serve those they do not since they potentially infringe on their territorial monopolies. Consequently, federal subsidy program rules hamstring potential alternative providers, impractically targeted at filling the only the unserved redlined holes in the incumbents' swiss cheese distribution networks. The incumbents lobby for those rules. They naturally want to maximize the size of the cheese and minimize the size of the holes in the data on infrastructure availability they are required to report to regulators under the 1996 revision of the Communications Act. The incumbent rigging of the rules leaves cooperative leaders like Matheson understandably frustrated.

Thursday, May 23, 2013

FCC Expands CAF Definition of Broadband Subsidy-Eligible Areas - 2013-05-22 22:48:29 | Broadcasting & Cable

FCC Expands CAF Definition of Broadband Subsidy-Eligible Areas - 2013-05-22 22:48:29 | Broadcasting & Cable

Summed up, this subsidy program designed to underwrite the cost of building telecommunications infrastructure in high cost areas is ineffective.  Telcos won't apply because they don't want to fully serve these areas and complain the subsidy amounts are too low.  And even if they did want the money, they have to fight cable companies ineligible for the funding (derived from a surcharge on telephone bills) that claim the telcos are upgrading their infrastructures in order to steal their customers.

This circumstance only adds to the argument that communities and particularly those with lower population densities can't expect legacy providers to serve them.  They must build their own publicly and cooperative owned and operated fiber networks.

Saturday, September 29, 2012

Google's Kansas City fiber build doesn't change underlying infrastructure economics

This Kansas City Star article discusses the implications of Google's rollout of fiber to the premise (FTTP) infrastructure in Kansas City.

The newspaper interviewed Josh Olson, a technology industry analyst for Edward Jones & Co.  Olson sees the Google fiber deployment as a template to boost user demand for higher bandwidth and speeds.  If new applications that can run on this gigabit speed capable infrastructure emerge, it would increase pressure for incumbent cable and telephone companies in other markets to upgrade their networks. However, Olson goes on to dismiss that notion, noting incumbent telcos and cablecos can make money off their existing services.  Of course they can when these are the only wireline services available to most U.S. homes and small businesses unless their communities build their own fiber networks operated by local governments or consumer cooperatives.

And as industry analyst Dave Burstein points out, Google's fiber deployment in a single U.S. city cannot change the underlying economics for incumbent providers that must earn a rapid return on investment to keep their shareholders happy -- a business model that directly conflicts with the long term ROI associated with high cost infrastructure projects.  Plus telecommunications company shareholders are accustomed to receiving high dividends -- money that can't be directed toward CAPex.

“The problem is it costs a lot of money to climb all those poles and dig all those trenches to make it happen,” Burstein told the Star. “You don’t make money in three years, but you make money in 10 years."

Read more here: http://www.kansascity.com/2012/09/24/3832330/google-fibers-gigabit-gamble-has.html#storylink=cpy

Sunday, September 16, 2012

Public utility district Internet as alternative to Google fiber

Most rural communities lag in the type of broadband Internet service available in urban areas. But northeast of Spokane, in Newport and the surrounding hills and valleys, around 5,000 homes and businesses have the chance to connect soon to a fiber-optic system with lightning-fast speed.


The network being built by the Pend Oreille Public Utility District will allow users to download and upload data all the way up to 1,000 megabits, or 1 gigabit, per second - far faster than the 10 to 20 megabits that is a popular consumer choice today.


It will rival the Google Fiber system rolling out in the Kansas City area and is fast enough to download a movie in seconds, conduct video conferencing at home, and watch multiple high-definition TV programs simultaneously online.


“We believe it’s kind of the footprint for the future of rural communities,” said Joe Onley, manager of the Community Network System for the Pend Oreille PUD

I expect PUDs like this one and consumer cooperatives will take the lead in building out fiber. The key reason is the time to return on investment is too long for private sector players, whether they be AT&T, Verizon, or Google.  And that applies in all areas -- not just rural locations.