Showing posts with label fiber to the premises. Show all posts
Showing posts with label fiber to the premises. Show all posts

Tuesday, February 06, 2024

Report: GFiber parent Alphabet seeks outside investment as part of spin off strategy

Metro fiber to the premises (FTTP) player GFiber is seeking external investment to capitalize its expansion. Reuters (via yahoo! finance) reports GFiber’s parent company Alphabet has retained an investment bank to start the process of selling equity in the company, citing a source close to Alphabet's efforts.

Reuters quoted the source as saying the goal is to spin off the unit, formed in 2010 as the nation grew impatient to migrate from its legacy copper telephone service delivery infrastructure to fiber-delivered Internet protocol-based voice, video and data.

"This next step of raising external capital will enable them to scale their technical leadership, expand their reach, and provide better internet access to more communities," Ruth Porat, Alphabet's president and chief investment officer, told Reuters in a statement. 

GFiber’s debut -- branded as Google Fiber -- was enthusiastically welcomed by localities looking for a more rapid alternative to bring fiber connections than the slow walking legacy incumbent telephone companies. But the company faces the same high capital expenses that come with utility infrastructure construction. It identified no overwhelming technological or marketing advantage over the incumbents as a Google 10X project, throttling back expansion plans in 2016, most notably and somewhat embarrassingly in its Silicon Valley region headquarters. "There’s no flying-saucer shit in laying fiber," Google co-founder Larry Page later explained.

In a move similar to Alphabet’s seeking outside investment capital for GFiber, AT&T in late 2022 entered into a joint venture with private equity firm BlackRock to build fiber connectivity to an initial 1.5 million customer locations beyond AT&T’s current footprint branded as Gigapower. Gigapower CEO and retired AT&T executive Bill Hogg, asserted in 2023 that Gigapower will be “much larger than any other provider in the space. The scale at which we are going to operate will be a differentiator in the U.S. marketplace.”

GFiber parent Alphabet’s move appears aimed at rivaling Gigapower’s plans. GFiber has a presence in 18 states and plans to expand to 25 new metros, finalizing a franchise for the Las Vegas metro this week, a metro also on Gigapower’s target list. It too will be entering the metro, according to the Las Vegas Review Journal.

Friday, December 08, 2023

Failure to modernize copper to fiber reaches inflection point

Ensuring everyone can access modern broadband networks requires not only financial investments but also the support of forward-looking public policy. Unfortunately, the regulatory environment in some states, like California, is hindering these much-needed investments. Outdated regulations such as Carrier of Last Resort, or COLR, require providers to overlook the needs of the vast majority of consumers and prevent investments in modern networks. It’s worth noting Congress and many state legislatures have invested a historic number of resources towards high-speed broadband expansion in hard-to-serve areas; however, none of these programs are intended for preserving legacy voice services.

Today, public policies in California and states across the country should prioritize connecting as many households as possible and ensuring broadband access reaches underserved communities.
https://www.attconnects.com/how-broadband-networks-helped-create-21st-century-technology/

Some background here. AT&T California is petitioning the California Public Utilities Commission (CPUC) for geographically targeted relief from its Title II common carrier utility regulatory requirement to provide landline voice telephone service to any customer requesting a connection. It contends fixed prem wireless service served by its mobile wireless network will provide a reliable voice replacement in less densely populated areas where its isn’t deploying fiber to replace legacy copper POTS infrastructure.

Not everyone is convinced. Understandably so considering wireless is designed primarily for mobile use and can degrade in quality when too many users are using the system, particularly since these networks carry both voice and data. Wireless signals can also be less reliable in these areas that frequently feature hilly terrain and vegetation that can interfere with them.

AT&T contends the COLR requirement requires it to “wastefully” maintain “two duplicative networks:” the legacy copper POTS network as well as a “forward looking fiber” network. The problem with the tortured, ahistoric logic of this argument is AT&T and other large telecommunications companies have had decades to look ahead and modernize their copper POTS delivery infrastructure to fiber -- state of the art delivery infrastructure then and now. But because their investors are averse to this significant capital investment that cuts into earnings and shareholder dividends, the fiber future was cancelled in areas where the cost of building and operating it runs higher than others.

The delay in that crucial transition has now reached what AT&T properly characterizes as an inflection point, one that became painfully apparent during the public health measures taken during the COVID-19 pandemic stage. The issue lies not with CPUC’s COLR regulations but with AT&T’s shareholders whose interests don’t align with the broader public interest of modernizing the legacy copper POTS delivery infrastructure to fiber. The relevant public policy question is should the company's shareholders be rewarded for sitting on the sidelines for so long, leaving the nation years behind where it should be for advanced telecom?

Monday, October 02, 2023

FWA seems like a lower cost alternative to FTTP -- until radio propagation constraints taken into account.

Outside of our urban cores and highway corridors, many modern life-enhancing technologies remain unavailable. For underserved constituencies, health outcomes are less positive; educational and business opportunities are more limited; and a myriad of other harms are borne by our more rural constituencies. But 5G FWA stands to finally connect those communities that remain unserved or underserved. Because this technology can span distances and cross terrains that coaxial and fiber cannot, at a fraction of the cost, more communities will be connected using 5G FWA than ever before

https://broadbandbreakfast.com/2023/08/sascha-meinrath-12-gigahertz-band-is-key-to-bridging-the-digital-divide/

The challenge is very limited propagation. The high frequencies used by FYA like the 12 Gigahertz cited in this article have very limited reach. Propagation distance is inversely correlated to the frequency. High frequencies can carry more data than lower ones. But the tradeoff is they don’t travel very far. Consequently, homes and businesses close to FWA radio towers get good throughput as Doug Dawson explains in this blog post. But just a bit farther out, it drops off dramatically as this example of a Sacramento, California suburb illustrates using two relatively lower frequencies. For 12 Gigahertz, the propagation circle of coverage would be even smaller. 


To overcome these limits, in rural areas it would seem to make sense to deploy radios close to customer premises mounted on existing utility poles or new dedicated poles. But the tradeoff there would be those radios would need fiber to feed them. At which the economics would point to connecting the premises to fiber directly as the most cost-effective approach. 

Thursday, September 28, 2023

States struggle to devise solid, actionable plans to achieve universal service

“Maine's existing internet infrastructure is largely a patchwork of individual private networks. The infrastructure behind these networks was generally not created to support the goal of universal broadband access throughout the state. While public and private investments over the last decade have added essential infrastructure to support this goal, the job is not done, and too many areas of Maine remain unserved.”

That excerpt from Maine’s Five Year Action Plan required by the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program describes every American state and territory, encapsulating the fundamental problem of the nation’s highly fragmented advanced telecommunications infrastructure that falls short of universal service, leaving many without quality, affordable connectivity.

Consistent with current federal policy of subsidiarity leaving it to the states to establish universal service like that for landline telephone service, BEAD requires states to devise plans to provide universal service reaching every doorstep. The Five Year Action Plans must include timelines, cost estimates and funding sources to bring it about, with a subsidy funding preference for fiber to the premises (FTTP) delivery infrastructure.

The NTIA characterizes the $43 billion in BEAD subsidies largely targeted to exurban and rural areas deemed unworthy of investment by investor owned providers as a once in a generation initiative. “We are writing the next chapter of the great American infrastructure story,” said BEAD Program Director Evan Feinman. “But this is going to require a true whole-of-society effort” involving federal and state officials, local governments, providers, co-operatives, and communities.

However, a review of BEAD Five Year Action Plans filed with the NTIA as of this week shows states are struggling to devise solid, actionable plans to achieve universal service. Most are largely aspirational. Several note that BEAD subsidies alone cannot fully fund universal service along with an alphabet soup of other federal and state grant programs put in place over the past few decades. That’s implicit in BEAD program guidance that require the plans to include federal, state, and local funding sources to attain it. But nearly all the plans don’t identify state or other local funding sources to address the deficit in federal funding. Others point to the continued use of FTTP stopgaps such as fixed wireless and satellite service along with the expectation investor owned providers will build out their infrastructures.

The state plans generally point to a prolongation of the historical pattern of incremental construction that will leave universal service out of reach for the foreseeable despite the state plans stating advanced telecommunications infrastructure will reach all residents by the end of the decade. One off grant funding has encouraged the incrementalism since it only nibbles away at the infrastructure deficits rather than eliminating them, producing what analyst Karl Bode aptly describes as “half built,” incomplete infrastructure.

A single, long term, low interest federal loan program for lower cost government owned and consumer utility cooperative-owed FTTP infrastructure is a better option than the current confusing mix of grant programs. It would have program integrity built in via loan underwriting standards and collateralized network assets to protect public dollars – dollars that would go further with these lower cost deployers and attain universal service more rapidly since they don’t bear the burden of generating profits and dividends for investors as well as income taxes.

In sum, the state Five Year Plans reflect no true “uni” in the BEAD universal service initiative: one single guiding program policy principle and sufficient dedication of resources to close the infrastructure gaps and bring about universal service.

Saturday, September 16, 2023

More patient capital meets burgeoning demand for fiber

A shift is underway in capital investment in fiber to the premises (FTTP) advanced telecommunications infrastructure. In the United States, FTTP investment has lagged for decades due to the capital investment limitations of investor owned telephone companies. They are constrained by overleveraged balance sheets and investor expectations of traditionally high shareholder dividends that necessitate rapid returns on any capital investment. Those limitations became apparent in the late 2000s when Verizon faced a shareholder revolt, forcing it to scale back plans to modernize its legacy copper outside plant to FTTP. It later moved into fixed wireless that offered lower capital costs. Infrastructure investment is a long term proposition that requires patient capital not found in these companies.

Now AT&T is attempting a workaround to access more patient capital with its Gigapower joint venture with investment firm BlackRock to invest in open access FTTP delivery infrastructure outside of its service area. That patient capital includes state and local pension funds, sovereign wealth funds, and family endowments, Adam Walz, told a panel presentation this week by Broadband Breakfast. Walz is managing director of BlackRock’s Global Infrastructure Fund focused on investments in digital infrastructure opportunities across fiber networks, data centers, and wireless infrastructure.

Notably, other builders of open access FTTP also rely on patient capital including UTOPIA Fiber, owned and financially backed by a 20 Utah municipalities and privately owned SiFi Networks, funded by European pension fund APG. However, Gigapower CEO and retired AT&T executive Bill Hogg, said these players have “nowhere near the scale we will have,” claiming Gigapower will be “much larger than any other provider in the space. The scale at which we are going to operate will be a differentiator in the U.S. marketplace.”

But patient capital doesn’t mean it isn’t concerned about maximizing returns. All these players are targeting more densely developed areas most likely to produce strong ROI and ARPU, capitalizing on the strong demand for FTTP delivered services. Had U.S. telecom policymakers made more erudite decisions decades ago, fiber would have reached nearly all American doorsteps by 2010 at the latest instead of the estimated 40 percent currently. That gives Gigapower lots of runway as well as first mover advantage: first with fiber owns the location for the long term. “We’ve found plenty of attractive locations to build fiber where there’s no fiber today,” Hogg said, pointing to Las Vegas (Google Fiber is looking at that metro as it enters Nevada) and locales in Florida and Arizona. 

The concentration on densely developed areas will require patient capital investment by governments and consumer utility cooperatives to serve less developed areas, particularly those at the exurban edges of metro areas that have seen in migration by knowledge workers as knowledge work decentralizes out of urban cores.

Saturday, August 19, 2023

Sohn questions key policy premise of 1996 Telecommunications Act

Gigi Sohn, executive director of the American Association of Public Broadband, made a profound observation on U.S. telecommunications policy in a podcast interview this week with Mike Masnick of TechDirt at (around 47:50)

 “The facilities-based competition when you have cable competing against telecom competing against wireless, maybe wasn’t the best idea."

Sohn is essentially -- and astutely-- questioning a fundamental policy premise of the 1996 Telecommunications Act and once held by her former boss, Federal Communications Commission Chairman Tom Wheeler: that facilities-based competition would unleash market forces that would benefit all Americans by bringing them affordable Internet access. 

This is also referred to as "technological neutrality" in the context of subsidizing advanced telecommunications infrastructure. The assumption baked into law -- along with opening up the legacy metallic copper telephone delivery plant to Internet Service Providers -- is market competition would benefit all Americans regardless of their location by bringing them access to the then-emerging form of digital telecommunications. 

It was incorrect largely because fiber optic delivery technology existed in the 1990s that was technologically capable of modernizing the legacy copper and cable coax connections to homes, businesses and institutions. No technology has emerged since that's superior to fiber when it comes to delivering high quality, reliable digital, voice and video services.

Another fundamental flaw in this policy was seeing connectivity as a market commodity of "broadband bandwidth" instead of a natural monopoly that utilities are and where market forces don't operate to benefit buyers and instead strongly favor sellers. A single fiber connection would suffice; fiber to the premises (FTTP) should have been designated as the national telecom delivery infrastructure standard. There is no need for more than one fiber connection or other type of technologies for premise service.

Thursday, August 10, 2023

Lacking goal of universal fiber, incrementalism dominates

Billions of dollars in recently announced federal grants have been called a once-in-a-generation opportunity for internet service in rural America. But the same prediction was made about other plans, and some of those fell far short of their goals.
Billions in rural internet grants could be a once-in-a generation opportunity

That’s because these are incremental and not wholistic ongoing initiatives to bring fiber to every doorstep that was connected to copper telephone lines in the previous century. They will inevitably come up short with limited timelines and budgets and “technical neutrality” favoring substandard stopgaps when this isn’t the clearly expressed goal.
Wisconsin has roughly 246,000 locations lacking access to even minimum broadband speeds of 25 megabit per second downloads and 3 Mbps uploads, and another 217,000 without access to 100 Mbps downloads and 20 Mbps uploads, adequate speeds for many households, according to the state Public Service Commission. The locations are spread across the entire state, said PSC Chairwoman Rebecca Cameron Valcq.
Once again, incrementalism is the reason. Investor-owned telephone and cable companies extend service to discrete, cherry picked neighborhoods where they expect a relatively rapid return on investment and that generate sufficient revenues to be profitable. The resulting infrastructure deficiencies cannot be neatly categorized into broad residential settlement patterns e.g., urban, suburban, exurban, rural. As Karl Bode described the issue, it’s infrastructure that is only half completed, leaving many addresses without fiber connections:
I’ve spent the better part of a life writing about how federal and state telecom regulators and politicians throw billions at companies for fiber networks that then somehow, repeatedly and quite mysteriously, never arrive. It happens over and over and over again, with only fleeting penalties for big ISPs that miss meaningful deployment goals.

Monday, August 07, 2023

Vermont draft BEAD Five Year Action Plan: FTTP to all on grid addresses by year end 2028.

The state of Vermont expects fiber to the premises (FTTP) advanced telecommunications infrastructure will reach every location connected to the electrical grid by the end of 2028. That’s according to a draft Five Year Action Plan setting a timeline and budget to achieve universal service in the state as required by the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program.

“Vermont shares NTIA’s strong preference for deploying end-to-end fiber connectivity to all unserved and underserved locations, as well as all eligible CAIs. Aligned with the VCBB’s statutory mandate, this approach prioritizes quality, scalability, and reliability,” the draft plan states.

The draft plan anticipates all remote off grid locations will be reached by other technologies deemed “reliable” by the NTIA: hybrid fiber-coaxial cable, digital subscriber line (DSL) technology and terrestrial fixed wireless utilizing entirely licensed spectrum or using a hybrid of licensed and unlicensed spectrum.

The draft plan estimates the cost of extending fiber to all of Vermont’s approximately 50,000 locations not served by fiber excluding locations where the U.S. Federal Communications Commission has allocated grants to subsidize infrastructure under its Rural Digital Opportunity Fund (RDOF) at $500-$700 million. The plan anticipates subsidies under BEAD, the American Rescue Plan Act’s Capital Projects Fund, subgrantee matches, and other funding sources will cover this cost.

The estimate is based on road miles. The upper estimate accounts for the risk of project cost overruns due to inflation, supply chain challenges, and labor shortages. The draft plan notes additional, more extensive analysis will be required to develop a more precise cost estimate. The state intends to refine the estimate in its initial proposal to the NTIA for BEAD infrastructure subsidy funding.

The plan notes the Vermont Community Broadband Board (VCBB) will continue its support of efforts by Communications Union Districts (CUDs) organized under state law to submit and gain approval for applications for grants to extend their end-to-end fiber networks. CUDs are two or more towns that join as a municipality to jointly build telecommunications infrastructure.

Monday, July 17, 2023

BEAD requires states to plan for universal service. But it doesn't fully subsidize it, necessitating states to develop their own funding sources.

As required by the Broadband Equity Access and Deployment program, each CUD must come to the state with a universal service plan to serve every address in their jurisdiction with high-speed internet. This is especially important for solving climate change, said Hallquist. “We have to get fiber to every address to solve climate change,” she said. Fiber is critical because it reduces latency and allows for faster reaction times. The smart grid enables faster responsiveness to electrical outages, even issuing warnings when equipment is about to fail.

Unfortunately, there are several barriers implemented in the BEAD program that may affect CUDs ability to use BEAD funds in their deployment, said Hallquist. The letters of credit requirement, which mandates that grantees receive a 25 percent letter of guaranteed payment from a bank on top of the 25 percent match requirement affects CUDs and smaller providers while favoring large, established providers, she said.

 Vermont’s Unique Communications Union Districts Support BEAD Outlays

The National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program – part of the Infrastructure Investment and Jobs Act (IIJA) targets capital cost subsidies to high cost areas. They are primarily limited to addresses based on the bandwidth advertised to them; those with 80 percent of addresses not advertised at least 25 Mbps down and 3 Mbps up with latency exceeding 100ms are eligible. Public entities building fiber to the premises (FTTP) infrastructure such as Vermont's Communications Union Districts (CUDs) should thus regard them as a limited, supplemental, one time opportunistic funding source.

Notably, BEAD requires states to develop “a comprehensive, high-level plan attain universal service.” But the program contemplates states develop their own funding sources to finance it. In other words, while BEAD requires states plan for universal service, it is not intended to fully fund the construction and operational costs of universal FTTP. States and regional entities like the CUDs can do this via bond funding and utilize end user fees to service the bond debt.

Saturday, July 08, 2023

U.S. Senator Michael Bennet: Federal infrastructure funding shouldn't subsidize big telecoms

Previous federal efforts to expand broadband infrastructure, totaling $50 billion by Bennet’s estimation, were ”in reality subsidizing the biggest telecom companies in America not to build that broadband out,” he said. The money instead went to expansion that left out rural America.

https://www.denverpost.com/2023/07/06/federal-beads-broadband-funding-program/

The problem with modernizing telecom infrastructure to fiber to the premises is there has been no well thought out, coordinated high cost area subsidization policy. Instead, it's been a series of highly restricted one off grants, treating advanced telecom infrastructure more as a special charity case instead of essential infrastructure. 

Moreover, subsidies have come without universal service obligations or rate regulation as existed for legacy voice plain old telephone service (POTS) under Title II of the federal Communications Act. Telecom utility infrastructure functions as a natural monopoly and requires regulation to protect the public interest in access and affordability.

Comcast is correct that public-private partnerships are the way forward. The public sector should own the infrastructure and competitively contract with private entities to design, build and operate it.