AT&T's Project Pronto wasn't: 1 in 4 customers still without broadband

AT&T's Project Pronto, which set a goal of providing broadband to 80 percent of its service area by 2002 and the balance by now, wasn't. Consequently, at least a quarter of AT&T's customers are left twisting in the wind with sluggish dial up Internet connections, according to this editorial by Dave Burstein appearing today in DSL Prime.

Burstein calls upon FCC Chairman Kevin Martin to hold AT&T's feet to the fire by holding up its planned merger with BellSouth unless it acts -- and not just promises -- to deploy broadband to more of its customer base.

Here's some PR puffery from 2000 from what was then SBC Communication's PR firm on the now discredited Project-Not-So-Pronto.

El Dorado telecom market needs local providers

El Dorado County’s market for voice and data telecommunications is stuck in the past, set up to serve the county as it existed nearly two decades ago but woefully behind where it needs to be today.

What the county needs to bring it up to date are nimble, locally owned and operated providers — enterprises to play the telecom equivalent of what El Dorado Savings Bank is to Bank of America.

The big, out of state domiciled Fortune 500 telecom behemoths are concentrating their growth strategies on large urban markets and on television and video services — services El Dorado County needs far less urgently than clear, reliable digital voice service and fast broadband Internet access. They have huge balance sheets and a nationwide territory to contend with and can’t focus their attention on a single, underserved market like El Dorado County. They are in the words of AT&T CEO Ed Whitacre in the “big pipes” business — providing the freeways that carry large amounts of telecom traffic. That’s a good business model for AT&T — to be the long haul carrier, the Internet backbone provider. It should pull out of local markets and make way for smaller, local telcos to provide services that AT&T by its actions (or more accurately, lack thereof) clearly does not want to offer.

What El Dorado County needs to compliment AT&T’s interstate and international digital highway system is a local telecom transportation department comprised of providers who can pave over its aging, deteriorating telecom roads and highways that are plagued with potholes of poor line quality and too narrow to deliver broadband Internet services.

Wireline market bifurcating as big telcos sell off lines

This New York Times (registration required) article reports big telcos are getting out of the traditional telephone business and selling off lines in some markets. The business rationale is these assets provide little revenue growth opportunity compared to booming wireless services.

Bucking the trend, The Times reports, is El Dorado County's telco provider, AT&T, which is sticking with its strategy of providing both wireline and wireless services. However, there's no evidence AT&T is doing anything to expand high speed Internet access in El Dorado County by upgrading its aged wireline infrastructure to support broadband.

Cable providers outscore telcos for basic phone service

On June 27, your blogger suggested Comcast has a competitive opportunity in El Dorado County to overtake AT&T by offering both broadband Internet access as well as digital voice telephone service. (See Regulatory uncertainty creates "double play" opportunity for Comcast expansion)

Blogger Preston Gralla cites a consumer survey by J.D. Power & Associates that finds cable providers outscored telcos in customer satisfaction for voice telephone service. Gralla questions the long term viability of the telcos if they cannot compete with cable operators when it comes to their core service of providing standard telephone service. That caveat applies doubly in El Dorado County, where AT&T draws complaints for unreliable phone service while also not providing high speed wire line Internet connectivity to large areas of the county, leaving thousands of residents and business owners stranded on the wrong side of the digital divide.

Swansboro Country: Another Eldo community on the wrong side of the digital divide

Since the start of the year, the good folk in Swansboro Country have suffered major road access challenges due to a wash out of Mosquito Road.

I've been hearing from some Swansboro residents that they're also cut off from the broadband Internet highway, stuck on the wrong side of the digital divide and relegated to sluggish dial up like all too many El Dorado County communities.

Telecom: Repeating failed promises

Brooklyn-based telecom analyst Bruce Kushnick insists that big telecom has systematically failed to deliver on its promises to the public and to policymakers.

In the early and mid 1990’s, telecommunications companies promised to build networks that could allow them to compete with cable. We were all supposed to get high-speed fiber optic cables (light pipes) right to the house, and they were supposed to carry voice, data, and video. There would be tons of competition, and 86 million homes would get 45 Megabits per second of two-way data capacity.

Excerpted from Public Knowledge blog.

El Dorado County AOL dial up subscribers may face obsolescence penalty

If you're one of many who live on the wrong side of the digital divide in El Dorado County and limited to dial up Internet access, you could be facing an obsolescence penalty if you're an AOL subscriber.

According to The Wall Street Journal via this Reuters dispatch, AOL is considering offering customers with broadband (high speed) Internet services at no charge. Dial up customers, however, would still have to pay a monthly subscription fee.

This story illustrates how El Dorado County is being left behind at increasingly greater cost and inconvenience by its telecommunications providers while the rest of the world goes broadband.

Ma Bell tells El Dorado County: Go suck a satellite

Ma Bell has stiff armed much of El Dorado County clamoring for her to upgrade her aged and near obsolete copper cable plant to fiber optic to support improved voice service and wire line broadband Internet access. (See petition to AT&T)

Readers of this blog may recall the "Gut Check Time for Ma Bell" post on May 24 that included a link to AT&T's news release issued that day announcing the rollout of satellite-based broadband Internet service in AT&T's 13-state service area in a reseller arrangement with a satellite Internet service provider.

At that time, it wasn't clear if the service would be offered in El Dorado County. Now it's clear that it is: Direct mail postcards from AT&T pitching the satellite service have begun to hit El Dorado County mailboxes.

I expect many county residents and businesses aren't going to get excited over the service since they've long had the ability to go with satellite Internet providers at prices and speeds comparable to AT&T's offer. They're comfortable getting TV by satellite, but getting a second dish for Internet access? And after all, this is the Sacramento metro region, not the remote stretches of North Dakota or Alaska. Will we next have to get satellite phone service when the copper wire line system gives up the ghost?

By rolling out inferior satellite-based broadband (which by the way can't support voice over Internet protocol or gaming and lacks future growth capacity), AT&T is signalling it has no intention to upgrade its aged, antiquated El Dorado County wire line infrastructure anytime soon despite AT&T flackery in the Sacramento Bee in April promising county residents a number of broadband options by year end.

Bottom line, this is an unacceptable cop out. It's time for Ma Bell to decide if she really wants to be in the telecommunications business in El Dorado County or just another reseller like a Best Buy or Radio Shack, offering a service inferior to what she herself could provide. If she doesn't want to be here and serve El Dorado County's current and future telecom needs, then she needs to get out of the market and make way for other players who will.

Cable companies, telcos now in accord on state wire line TV franchises

Things are happening fast in Sacramento on legislation that would preempt local goverment jurisdiction over cable TV franchises and give it to the California Public Utilities Commission. The cable TV companies opposed the telco-proposed legislation fearing it would keep them under more restrictive local regulation while allowing the telcos to enter their markets under a less restrictive state franchise system.

John Hill reports in today's Sacramento Bee that the telcos and cable companies are now in accord over an amended version of the legislation that would permit both telcos and cables to opt out of local government control in favor of a PUC-issued franchise.

El Dorado County residents stuck on the wrong side of the digital divide with no broadband services likely care little about the regulatory rules. What's relevant for them is service choices and getting those choices ASAP.

Back to the future: U.S. Supreme Court accepts telco antitrust case

Many readers likely remember when AT&T agreed to be broken up into several regional, independent operating companies in 1984 under a consent degree to settle a federal anti-trust case.

When the feds splintered Ma Bell's progeny and cast them to the winds, they created a bunch of smaller monopolies in the process of breaking up a big one, plaintiffs allege in an anti-trust action that contends the regional operating companies are engaging in anti-competitive market conduct by agreeing to stay out of each other's territories.

The New York Times (registration required) reports today the U.S. Supreme Court has accepted the case, setting the stage for one of the new court's most far reaching decisions. The Times reports the case, Bell Atlantic v. Twombly, No. 05-1126, will be heard in the Supreme Court's next term which begins in October.

Regulatory uncertainty creates "double play" opportunity for Comcast expansion

As the big telcos including AT&T and Verizon battle it out in Sacramento with the cable companies over legislation that would preempt local government cable TV franchising authority, the cable companies have an opportunity under the current rules to expand and grab market share from the telcos.

In El Dorado County, Comcast is the franchisee. If Comcast's executives were smart and aggressive, they would put the pedal to the metal and dramatically expand in the county while AT&T is distracted down in River City fighting for the right to go around county authorities with a state authorized franchise. It's a strategy right out of the 1980s business bestseller In Search of Excellence that advised a bias for action to gain competitive market advantage.

Earlier this month, this blog reported Comcast plans to launch digital phone service across central California from Chico to Fresno as early as first-quarter 2007. Digital phone service -- and most certainly high speed Internet -- would likely be wholeheartedly embraced by El Dorado County residents who have for years experienced noisy and unreliable voice service over AT&T's aging copper cable plant and who lack broadband access to boot.

It's a compelling double play opportunity that Comcast could play out under the county franchise agreement provided both the county and Comcast waive a provision in the agreement requiring new subscribers outside Comcast's current service area to subsidize expansion costs. And it would likely produce a high take rate and rapidly expand Comcast's customer base in the county.

Comcast should step up to the plate and take advantage of the political uncertainty distracting its would be competitors now that Comcast going into full telco mode and expanding beyond its core entertainment service business model. A "triple play" bonus would be Comcast's ability to sell these newly acquired "double play" customers television programming services.

No fiber optic in Pleasant Valley: Just a conduit

A reader reports from the field: Fiber optic cable is being placed in the trench for the El Dorado Irrigation District's Pleasant Oak water main replacement project.

EID clarifies: No fiber is being installed -- just a conduit for possible future fiber optic cable deployment.

I guess that's a start. But I'm sure Pleasant Valley and Sly Park area residents and businesses would prefer the whole fiber enchilada now so they can get out of dial up hell and also enjoy reliable and high quality voice telephone service.

May 2006: 72% of U.S. households with Internet used broadband connections

That's according to the results of a Nielsen//NetRatings survey reported today in Adweek. The survey found the 72 percent figure is up 15 percentage points compared to May 2005 (57 percent). New broadband users tend to be former dial-up users, as dial-up penetration dropped by 15 percentage points over the same period of time, going from 43 percent to 28 percent.

Much of El Dorado County continues to bring up the rear, stuck in the 28 percent category not out of a preference for dial up, but for lack of broadband Internet access. For too many in the county, it's still Al Gore's Internet, frozen in time where it stood when Gore assumed the vice presidency in 1993 and dial up was the only way to get Internet access.

Writer suggests threat of eminent domain to spur telcos, cable companies to compete

Maybe the incumbent network providers--the Verizons, Comcasts, AT&Ts--can be made to compete; threatening to seize their stagnating networks via eminent domain is just one creative idea to get them to do this. A truly competitive, non-neutral network could work, but only if we know its real economic value. If telcos or cable charge too much, someone should be in a position to steal the customer. Maybe then we'd see useful services and a better Internet. Sounds like capitalism.

Andy Kessler in The Weekly Standard.

In the public policy realm, this is what would be known as the nuclear option -- a final, overwhelming and extreme solution. Local governments have a number of interim measures they can take to encourage preferred outcomes to serve the best interests of the citizenry or discourage those things deemed harmful to the public interest.

As Mr. Kessler notes, in the wake of the U.S. Supreme Court's recent Kelo ruling upholding local governments' broad authority to exercise eminent domain in the name of economic progress, it wouldn't be a major leap of logic to argue that just as governments exercise emiment domain to acquire rights of way for roads and highways, they might also do the same for telecommunications systems.

Just like roads and highways, these systems are key infrastructure vital to a community's economic health and well being and therefore, it could be reasonably argued, the public interest in them outweighs the financial interests of those who own them.

Local governments throughout the U.S. have already gone into direct competition with telcos and cable companies with their own municipal broadband systems. Perhaps in the post Kelo environment, they'll also begin to consider forming telecommunications redevelopment agencies to take over aging phone and cable systems. A key advantage to this strategy is that it eliminates an entrenched monopolistic provider that refuses to upgrade its systems to make broadband widely available, but by its very presence casts a chilling effect on the market, discouraging the entry of competitors.

Verizon exec: Broadband is vital infrastructure

"I think broadband infrastructure is as important as highways and airports and any other type of infrastructure the state needs, now and for the future," said Timothy J. McCallion, Verizon regional president.

McCallion, quoted in this Sacramento Bee article today on the multi-million dollar lobbying battle between telcos and cable companies over video franchise rules, is absolutely correct. Wonder if his competition, AT&T, gets this?

So far, there's no indication that it does in El Dorado County, where large areas of the county remain relegated to dial up and unable to get broadband Internet access. If AT&T can't or won't deliver this vital part of the county's infrastructure, perhaps Verizon will.

Beyond DSL: Rural consumers want "triple play" services

This new study by the National Carriers Exchange Association (NECA) finds consumers in rural areas expect telcos to provide more than DSL. They're looking beyond DSL -- an interim technology designed to allow broadband to work over copper-based cables -- to their future needs for higher bandwidth to support multiple Internet protocol-based services known in the industry as a "triple play" of high speed Internet, voice, and video. That finding is relevant to El Dorado County, where much of the copper cable system is deteriorated and unable to support DSL services anyway.

The results are not surprising since telcos have broadly promoted triple play as the emerging product standard and are taking on cable companies for the right to sell video Internet Protocol Television (IPTV). The question is will they invest the estimated $11.9 billion to upgrade their networks to deliver minimum speeds of 8 Mbps in order to offer triple play services?

This study goes beyond NECA’s previous examinations of the challenges of bringing broadband to rural America. In The Packet Train Needs to Stop at Every Door, NECA looks at the transformation occurring in rural networks toward Internet Protocol (IP) technology to meet evolving customer expectations for “triple play” multimedia services—a combination of voice, data and video.

These services are driving the need for much higher delivery speeds in the “last mile.” The study examines issues affecting a rural consumer’s ability to access advanced services comparable to those available to urban consumers. Among
these issues are the continuation of stable funding mechanisms to encourage needed network investment
in rural America and emerging issues associated with the delivery of multimedia services. Availability of these services may be a key to increased “take” rates for broadband. These are among the subjects that must be addressed to ensure the packet train arrives on time in rural America.

Another WISP entering El Dorado County

NuTel Broadband Corporation, a broadband wireless managed services provider based in Cranbury, NJ, announced it plans to deploy wireless "mesh" broadband networks in Sacramento, Chico, San Jose and El Dorado County as part of a 14-state rollout.

The rollout is targeting underserved suburban and rural subscribers and small-to-medium sized businesses in regions where broadband wireless network services have been limited or generally unavailable, according to NuTel.

NuTel CEO Joe Fiero says unlike most wireless broadband systems that utilize a copper cable-based data line to connect them to the Internet, NuTel uses fiber optic cable as the system "backhaul," providing a minimum throughput of 45 Mbps, offering plenty of bandwidth for future growth. It will also offer proprietary network VOIP (Voice Over Internet Protocol) that allows subscribers to make digital voice telephone calls over the system.

Fiero says NuTel expects to offer 192/192 kbps Internet connectivity for $14.99 a month, 1.5/1.5 mbps for $34.99, and a bundled Internet and unlimited digital voice calling product at $59.99 per month.

In hilly terrains like El Dorado County, wireless faces a major technological challenge since it requires a clear, unobstructed line of sight to reach end users. Not NuTel's "mesh" system it's deploying in conjuction with Santa Clara-based SkyPilot Networks, which Fiero says is based on a "close spaced node topology that gives us the ability to saturate the coverage area."

Given the many underserved areas of El Dorado that are clearly within NuTel's stated target market such as parts of Placerville, Garden Valley, Camino, Pollock Pines, Pleasant Valley and Mosquito, I asked Fiero when NuTel would be deploying in these areas. Unfortunately despite their starkly underserved status with no broadband services, Fiero didn't have good news.

Turns out parts of Folsom and El Dorado Hills are running short of DSL connections from AT&T (AT&T isn't confirming this) and NuTel will roll out there first, eventually making its way east up Highway 50. Fiber optic cable is also more readily available in Folsom and EDH at this time, Fiero explains.

Memo to Mr. Fiero: fiber is also available farther up the hill. Those who have been stuck on the wrong side of the digital divide surrounding Placerville will surely be watching with interest to see if NuTel can get its system off the ground on the western edge of the county during this initial deployment and if it lives up to its stated mission of providing service in underserved areas where broadband is not available.