Showing posts with label subsidization. Show all posts
Showing posts with label subsidization. Show all posts

Tuesday, May 04, 2021

Deloitte white paper points up flawed U.S. policy of chasing throughput versus modernizing copper to fiber

Despite more than $107 billion in federal subsidies between 2010 and 2020 to boost throughput outside of densely populated metro centers, the United States hasn't obtained appreciable and durable benefit, concludes a recently issued white paper by the consulting firm Deloitte.

Optimism over the past 10 years that billions of private and public investment in underserved geographies for broadband access and adoption would help close the digital divide has waned as outcomes have often disappointed. Previous programs increased the number of people with access to the FCC’s definition of broadband by less than 1% (<1%; 1.6 million people) between 2014 and 2019, partially as a result of the changing definition of broadband.

Unless the nation changes course on telecommunications policy and stops chasing "broadband" throughput and instead replaces copper telephone lines reaching nearly every American home with fiber, the paper suggests, it will continue the wasteful cycle and reap less than optimal economic advantage. 

The Biden administration's proposed infrastructure plan offers an opportunity to do that by prioritizing fiber built by public sector and nonprofit corporations that don't carry the burden of generating profits that disincentivizes investing in fiber and only doing so proscribed neighborhood deployments that potentially offer the most favorable return on investment. A big advantage of building public option fiber is it ends the broadband speed chase since fiber can easily accommodate expected growth in bandwidth requirements. That necessitates dispensing with the "technology neutral" standard of the 1996 Telecommunications Act that gave rise to unending debates over what constitutes broadband and the related issue of net neutrality, as described in the Deloitte paper:

Since 1996, the US government has set minimum speed requirements to define broadband service, with the hopes of keeping pace with the exponential growth in consumption. These minimum performance expectations have changed as applications require increasing amounts of bandwidth. From 2011 to 2014, the FCC definition of broadband was 4 Mbps uplink and 1 Mbps downlink. In 2015, the FCC updated its definition of broadband to speeds of 25 Mbps downlink and 3 Mbps uplink. The 2015 broadband definition, which persists today, was more suitable to support new applications. Now, pandemic induced requirements for streaming, videoconferencing, and the promise of further innovation make the FCC’s 2015 broadband definition of 25/3 the topic of ongoing debate at both the state and federal levels.

Sunday, March 30, 2014

Colorado measure would bar Internet infrastructure subsidies to small towns served by satellite ISPs

Broadband act could expand service in Chaffee County - TheMountainMail.com: Free Content: As introduced, the bill’s language would define unserved areas as: areas outside a municipality or a city with less than 5,000 people in which a majority of households do not have access to at least one satellite and one non-satellite broadband provider.
Summed up in two words: Useless and laughable. It basically tells Coloradans with no other premise Internet options to go suck a satellite and be happy with the crappy customer experience, bandwidth "fair access" caps and poor value. A bill only the incumbent preservatives could love. Indeed, they probably drafted it.

Tuesday, March 25, 2014

The case for overbuilding incumbent telcos and cablecos

Twentieth century, metal wire-based legacy incumbent telephone and cable companies naturally don’t like it when progress inevitably emerges in the form of 21st century fiber optic to the premise (FTTP) telecommunications infrastructure offering the proverbial better (and faster) mousetrap as well as protection against technological obsolescence. Particularly if they have opted not to construct it and someone else is planning to do so. Especially if the new fiber infrastructure benefits from government subsidies. No fair, incumbents protest. That’s government subsidized competition that picks winners and losers and we’ll lose.

That argument cuts both ways, asserts Christopher Mitchell of the Minnesota-based Institute for Local Self Reliance (ILSR), one of my favorite incumbent spin busters. Incumbents have benefitted from favorable governmental policies that have been in place for decades including the availability of high cost subsidies and public policy that permitted them to maintain a monopoly. Not allowing government subsidization of FTTP infrastructure built by non-incumbents in the footprints of the incumbents, Mitchell suggests, is a double standard.

Given that telecommunications infrastructure must be broadly dispersed in order to be economically viable and adhere to Metcalfe’s Law, Mitchell accurately notes FTTP infrastructure builders must be able overbuild outmoded incumbent infrastructure when they opt not to upgrade to FTTP -- and receive government subsidies for doing so if available. That’s eminently fair and good old American progress – the same progress that brought electricity to large swaths of the nation in the 1930s when market forces alone could not do so.

As for the incumbent argument they will come out losers, Mitchell observes incumbents have made losers out of nearly 20 million Americans who according to a 2012 Federal Communications Commission estimate live in neighborhoods incumbents redlined and declined any wireline premises Internet connectivity, leaving them to dialup and satellite.

Click here to hear Mitchell and ILSR colleague Lisa Gonzalez elaborate in a 13-minute podcast.