Silicon Valley venture firms back start up planning universal wireless broadband service

WASHINGTON, May 16 (Reuters) - Three Silicon Valley venture capital firms are backing a project to grab a slice of valuable U.S. wireless airwaves to offer nationwide high-speed Internet service, according to a recent regulatory filing.

Kleiner Perkins Caufield & Byers, Charles River Ventures and Redpoint Ventures, each with more than $1.5 billion under management, are financing a firm called M2Z Networks Inc. to launch the project.

Most wireless spectrum is auctioned to the highest bidder but M2Z has offered to pay the U.S. Treasury 5 percent of its gross revenues from the premium broadband service it plans to offer alongside free, but slower, Internet access.

M2Z is trying to capitalize on President George W. Bush's call to have universal access to high-speed Internet, known as broadband, by 2007. The United States recently fell to 16th in world rankings for broadband penetration.

"M2Z's ultimate goal, through its own service, is to drive development of the broadband marketplace so that access is affordable and future penetration levels are near-ubiquitous throughout the country," the company said in a filing with the Federal Communications Commission.

Full Reuters story here.

The major questions here are how M2Z's backers define "near ubiquitous" service and what technology the service will utilize to overcome obstacles to wireless signals that make wireless broadband deployments challenging in hilly areas like El Dorado County.

Vandals cause telecom blackout in South Lake Tahoe

As if El Dorado County didn't already face enough telecom service challenges, vandals added to them earlier this week when they cut an overhead cable between Placerville and South Lake Tahoe, blacking out communications in South Lake Tahoe.

Story by Clint Swett in today's Sacramento Bee.

California PUC deluged by complaints -- most about phone service

Clint Swett reports in today's Sacramento Bee that the California Public Utilities Commission is getting consumer complaints at the rate of 150 per day -- two thirds of them related to phone service -- and has a backlog of nearly 20,000 complaints.

When does the broadband railroad come to El Dorado County?

According to this telecom industry publication article, telcos are throttling up their network upgrades to support broadband services. When will the tracks be laid in El Dorado County?

"Broadband access network spending has been slowly gaining momentum, like a freight train, and now it is screaming down the track," John Lively, Ovum-RHK’s vice president of forecasting, said in a prepared statement.

GAO Finds Flaws With FCC Broadband Estimates

GAO developed its own model for broadband analysis using the Form 477 data as well as numbers from a private-industry research firm, which seems to suggest the FCC’s conclusions are too optimistic. Among its conclusions, GAO found that only 17 percent of rural households subscribe to broadband services, significantly lower than urban and suburban households. “Our model indicated, however, that when the availability of broadband to households, as well as demographic characteristics, are taken into account, rural households no longer appear less likely than urban households to subscribe to broadband,” GAO said.

The emergence of satellite Internet alternatives to cable modem and DSL is a factor that complicates broadband penetration calculations. “It is not clear how satellite service should be judged in terms of deployment,” the report finds. “Since it is available throughout the entire country, one view could be that broadband is near fully deployed. Alternatively, it could be viewed that satellite broadband—while available in most areas—does not reflect localized deployment of broadband infrastructure and should therefore not be counted as a deployed broadband option at all.”

Item at NRTC Update

This blogger agrees. The California Public Utilities Commission also committed the satellite cop out in its May 2005 legislatively mandated report on broadband access in California wherein the CPUC concluded that "broadband service is available to every Zip Code in the state," although conceding that not every customer who wants it has service and some may be limited to satellite-based service that the CPUC admitted "tends to cost more and can be of lower quality."

Satellite is fine for TV, but it shouldn't been seen as an option (and an expensive one at that) for broadband services except possibly for those who inhabit the most remote areas of the nation.

WISP serves small area near Cameron Park, Shingle Springs

An established El Dorado County Internet Service Provider has become a WISP (Wireless Internet Service Provider) and is currently serving a small, 15 square mile section of the county east of Cameron Park and north of Shingle Springs.

This service is based on an emerging technology that has attempted to plug holes in wire line broadband availability in underserved areas. However, it contends with the same reception problems as radio and TV signals in El Dorado County's hilly topography.

In addition to technical obstacles, WISPs also face business challenges competing with far better capitalized telcos. And since they tend to serve only small geographical areas, they like the wire line telcos leave thousands of homes and businesses without broadband access.

It remains to be seen if WISPs such as this one surmount the formidable challenges facing them and gain market momentum. If they do, they could provide another impetus for AT&T to finally get its act together in El Dorado County and upgrade its system to support broadband access.