At broadband crisis point, U.S. should invest $100 billion to build 100 Mbs fiber to every home by 2012

The United States is so rapidly falling behind other developed nations when it comes to broadband access that it’s reached a crisis point demanding a bold new course of action, posits a January 2008 white paper by EDUCAUSE.

EDUCAUSE describes itself as a nonprofit comprised of colleges, universities, educational organizations and corporations to advance higher education by promoting the intelligent use of information technology. The white paper, A Blueprint for Big Broadband, argues the current national policy that relies exclusively on private sector telecommunications companies to build out broadband infrastructure is flawed because they are unable to respond quickly enough to rapidly growing demand for faster speeds driven by increased use of video and other bandwidth intensive applications.

Private sector wire line broadband providers are driven by short term economic incentives and operate within — at most — five year time horizons. This has led to drastically slashed R&D spending and curtailed broadband deployments that would serve large unserved areas of the country.

The result in an incomplete broadband infrastructure that doesn’t extend to many homes and businesses, creating choke points on the “last mile.”

Instead, the U.S. should from a public-private partnership to invest nearly $100 billion to build an open access fiber to the premises (FTTP) local infrastructure to ensure every home in the nation has access to at least 100 Mbs (and capable of scaling up to 1 Gbs) by 2012.

How to raise the $100 billion? A Universal Broadband Fund (UBF) modeled after one used in Canada that would get a third of its funding from the feds in the form of direct appropriations or bond proceeds, another one third from the states, and the remainder from private or public sector providers. The UBF would allocate $8 billion per year for four years to be distributed to the states, which would put up matching funds.

"The U.S. broadband crisis is a unique challenge,” wrote the author of the 74-page white paper, telecommunications attorney and consultant John Windhausen Jr. “Unlike past threats to our future competitiveness, the solution to our broadband connectivity crisis is primarily local. The benefits of broadband connectivity are felt directly by every consumer and business, and final decisions must involve our local leaders under a comprehensive federal program. The United States needs to move beyond the rhetoric and begin to adopt a specific action plan for the future.”

The comprehensive report also includes a detailed and current summary of actions by state and local governments to improve broadband access for their residents.

I have questioned the adequacy of state government broadband initiatives since they typically provide funding in 10s to low $100 millions in the form of grants and loans, which isn’t going to be sufficient incentive to private sector providers to deploy fiber infrastructure on the scale called for in the EDUCAUSE white paper.

The key to the success of the proposed UBF is getting the federal government on board as willing partner with the states and the private sector. That’s not likely to happen unless feds are convinced of the white paper’s assertion that universal access to fast broadband will benefit the U.S. economy and its global competitiveness. Congress may be receptive to attempts to make that case given its approval this week of a $150 billion economic stimulus plan.

Governor: "We ought to consider what Tennesseans want"

Tennessee Gov. Phil Bredesen made it clear earlier this year his policy priority as AT&T seeks legislation allowing it to offer advanced broadband services under a state charter is ensuring the company build out a complete infrastructure rather than the partial one that presently leaves many state residents on the wrong side of the digital divide.

Bredesen underscored that point in remarks reported by the Associated Press Feb. 4 that suggest he's putting the interests of his constituents first:

"Last year and so far this year, it's shaping up into what AT&T wants versus what the cable TV companies want," Bredesen said. "Maybe at some point, we ought to consider what Tennesseans want. It's something I am taking a look at how I might have an influence on."

AT&T hikes DSL prices, newspaper reports

The Chicago Tribune is reporting AT&T is raising prices across the board for its DSL service by $5 a month. The exception, a company spokeswoman told the newspaper, is residential customers who pay $35 for the Elite plan and customers with long term contracts.

AT&T said the increase is needed to upgrade infrastructure to support more bandwidth intensive applications such as video and music files.

I'm doubtful of the company's stated rationale for the increase because it has effectively pulled the plug on upgrading its legacy first generation DSL plant and is instead directing funding to its hybrid fiber/copper Project Lightspeed deployment in selected metro areas. This deployment is in support of the telco's U-Verse all digital triple play bundle of voice, high speed Internet and Internet Protocol TV (IPTV).

The DSL price boost is an effort to merely extract greater incremental income out of existing services. That's in line with AT&T's highly risk adverse cash flow and depreciation based management strategy that shuns significant physical plant upgrades that would eliminate large swaths of its 22-state service area where AT&T offers no wireline-based broadband services.

2008 a pivotal year for wireless broadband

The year 2008 will be a pivotal one that could mark the beginning of the end of the duopolistic hold the telcos and cable companies have over broadband Internet access marked by widespread market failure and lack of competition.

The Federal Communications Commission is set to make key decisions this year that determine whether broadband will be delivered over the air and provide the much needed wireless "third pipe" for broadband delivery starting in 2009.

The FCC is currently auctioning off portions of the 700mhz spectrum that could carry both mobile and fixed broadband services. The agency is also testing revamped prototype devices
developed by a consortium including Microsoft, Google, Dell, HP, Intel, Earthlink and Phillips that would transmit broadband signals at speeds reaching as high as 80Mps that would blow nearly all existing U.S. wireline broadband providers out of the water.

The White Spaces Coalition's prototypes failed the first round of testing last year. The coalition hopes to prove the prototypes, which transmit on unused portions of digital TV broadcast frequencies, won't interfere with TV signals.

The road to America's transportation infrastructure future should be paved with fiber as well as asphalt

Rebuilding America's aging roads and highways should not involve only concrete and asphalt. Instead, the U.S. needs to install fiber optic cable to upgrade its weak broadband distribution system. Doing so takes more vehicles off roadways would allow more to work from home, which the Heritage Foundation's Ronald Utt suggested in an interview broadcast today on NPR's Marketplace:

RONALD UTT: We've been providing the public sector with all this tax revenue and what-not for roads, but we have not been getting new roads in return for it.

Utt says part of the long-term solution is to get a significant amount of commuters off the roads -- by allowing people to work from home or at least closer to home.

NTIA report on US broadband access blasted

The feds are once again drawing well justified criticism for papering over America's sprawling broadband black holes by relying on an outdated, 12-year-old formula for measuring broadband access. The formula, promulgated by the Federal Communications Commission and adopted in a report on U.S. broadband access released this week by the National Telecommunications and Information Administration (NTIA), simply measures whether anyone -- even just one address -- in a given ZIP Code can obtain broadband, defined in the circa 1996 standard of at least 200kbs in one direction.

One only needs to take a look at two states, California and Tennessee, where large areas are mapped as having no wireline broadband services to see how far off base this federal government report truly is.

One of the FCC's commissioners even took issue with his own agency's data that was used in the NTIA report. "This report relies on widely-discredited data in a strained effort that only distracts us from the real work ahead," Commissioner Jonathan S. Adelstein said in a statement.

Gigi B. Sohn, president and co-founder of Public Knowledge, blasted the NTIA report:

“The NTIA report presents a distorted view of the state of broadband in the U.S. The Administration should not be boasting about our success at a time when consumers here pay more money for slower service with have fewer choices than do consumers in other parts of the world.

“Almost 97 percent of U.S. consumers have a choice only between their cable company and their telephone company. The Administration wiped out the policies that once upon a time allowed competition to flourish here and which now sustain the competition in other countries that consumers enjoy.

“The short-sighted policies cited by the NTIA have put our economic future at risk. The rosy picture the NTIA portrayed should have recognized that reality.”

Nate Anderson of arstechnica.com had this to say:

As broadband continues to be a key driver of economic opportunity and growth, falling behind the rest of the world will have real consequences for US high-tech leadership. Instead of addressing that crucial question, though, the report is an unabashed celebration of free-market, deregulatory policies. So enamored with their own economic theories are the authors that they resort to dogmatic lecturing throughout the paper.