Gullible and intellectually dishonest politicians enacted so-called video franchise schemes in about a dozen states over the past few years pushed by big telcos like AT&T. They were gullible at best and disingenuous at worst because they parroted the telcos' party line that such regulatory "reforms" would enhance competition for video services by allowing telcos to compete with cable companies, resulting in lower prices for consumers.
Well surprise, surprise, surprise. Cable rates are headed up -- and not down -- despite the entry of telco TV offerings such as AT&T's U-Verse, according to this weekend item from the Milwaukee, Wisconsin Journal Sentinel. This week, the Federal Communications Commission launched an inquiry into cable rate increases in advance of next February's mandated cutover to all digital television broadcasting.
"On balance, the law hasn't been good for consumers but has been very good for the companies that wanted it," Barry Orton, a telecommunications professor at the University of Wisconsin-Madison, told the newspaper. "Two years from now, I don't think you will be able to say that consumers saved a lot of money if any at all."
Telcos sugar coated their true agenda with the false patina of increased competition and lower rates for consumers. Their real goal was to get local governments that wanted them to build out their broadband infrastructures evenly to serve all and not just some of their residents off their backs. It's far easier to lobby a single state regulatory agency and influence the pols who appoint their members (and get them to put in place rules sanctioning broadband black holes) than to herd the political cats who sit on city and town councils and county boards of supervisors.
Sunday, November 09, 2008
Broadband's potential to drive small town economic boom
"If you don't have broadband, it's as bad as not having electricity, running water or sewer utilities in your town." So says Jack Schultz, author of Boomtown USA: The 7 ½ Keys to Big Success in Small Towns.
Schultz has got that right. Broadband enabled telecommunications services make location and distance irrelevant and allow entrepreneurial activity to occur where it might not otherwise, which Schulz says is increasingly important to the economy at a time when the number of big companies that are expanding is decreasing.
Access to broadband could also fuel a population shift along the lines predicted by author Jack Lessinger in his prescient 1991 book Penturbia: Where Real Estate will Boom After the Crash of Suburbia. (Perhaps aided by the current real estate bust that began in 2006?)
A big roadblock however is America's spotty and incomplete last mile telecommunications infrastructure that leaves far too many home-based entrepreneurs struggling with dial up or substandard satellite Internet connections. Schulz correctly notes they cannot wait for the telco/cable duopoly to provide them the broadband they need to grow their businesses. "People must try to research and find alternate ways to get broadband in their communities," he says.
Schulz's position here coincides with my view that the last mile telecommunications infrastructure will become increasingly locally owned and operated as we are seeing with the proliferation of small mom and pop fixed terrestrial wireless Internet Service Providers (WISPs) and in initiatives by local governments and cooperatives to install fiber optic connections to homes and neighborhoods.
Schultz has got that right. Broadband enabled telecommunications services make location and distance irrelevant and allow entrepreneurial activity to occur where it might not otherwise, which Schulz says is increasingly important to the economy at a time when the number of big companies that are expanding is decreasing.
Access to broadband could also fuel a population shift along the lines predicted by author Jack Lessinger in his prescient 1991 book Penturbia: Where Real Estate will Boom After the Crash of Suburbia. (Perhaps aided by the current real estate bust that began in 2006?)
A big roadblock however is America's spotty and incomplete last mile telecommunications infrastructure that leaves far too many home-based entrepreneurs struggling with dial up or substandard satellite Internet connections. Schulz correctly notes they cannot wait for the telco/cable duopoly to provide them the broadband they need to grow their businesses. "People must try to research and find alternate ways to get broadband in their communities," he says.
Schulz's position here coincides with my view that the last mile telecommunications infrastructure will become increasingly locally owned and operated as we are seeing with the proliferation of small mom and pop fixed terrestrial wireless Internet Service Providers (WISPs) and in initiatives by local governments and cooperatives to install fiber optic connections to homes and neighborhoods.
Friday, November 07, 2008
CLECs fear loss of access to copper loops being retired and replaced with fiber
Competitive Local Exchange Carriers (CLECs) established under the federal Telecommunications Act of 1996 that requires Incumbent Local Exchange Carriers (ILECs) to sell them access to their copper cable loops apparently fear the copper is literally about to be pulled out from under them and replaced with fiber, leaving them without access to their customers.
An organization of California CLECs, the California Association of Competitive Telecommunications Companies (CALTEL), petitioned the California Public Utilities Commission to adopt rules requiring ILECs to obtain advance approval from the CPUC before retiring copper loops and replacing them with fiber and demonstrate doing so would be in the public interest.
The CPUC declined, instead requiring ILECs to notify the CPUC and all CLECs interconnected with their copper plants before replacing copper with fiber. In addition, ILECs must engage in "good faith commercial negotiations" CLECs that want to purchase or lease the copper loop, the CPUC said in a Nov. 6 news release.
"I believe that this decision balances state and federal goals of promoting the deployment of broadband networks against the interests of competitors to retain access to the copper loop," Commissioner Rachelle Chong stated in the news release.
ILECs have long chafed under the line sharing requirements of the 1996 federal reform law and have dragged their feet and litigated with CLECs seeking to connect to their lines. Apparently CLECs now fear ILECs are about to use their ultimate weapon to make them go away for good, rendering them irrelevant by replacing their copper with fiber since they don't have to provide CLECs access to their proprietary fiber under a 2006 U.S. Court of Appeals ruling.
But ILECs have largely resisted employing the fiber strategy on CLECs since it requires them to make substantial investments in upgrading their wireline infrastructures that they have been reluctant to make. It's possible ILECs are now concluding doing so is worth it because it both disposes of pesky CLECs while also enabling them to exclusively offer far more advanced IP-based services that can be more reliably delivered over fiber than copper.
It will be interesting to watch how this plays out in California and other states and whether CLECs will bid on telco copper loops made obsolete by fiber. Probably few will since copper does not provide a future growth path for offering advanced services due to its technological limitations as have been painfully illustrated with the limited range and throughput of DSL over copper. In addition, aged copper loops are likely to be a low repair priority for ILECs, making it difficult for CLECs to provide reliable service. This could be the beginning of the end for CLECs.
An organization of California CLECs, the California Association of Competitive Telecommunications Companies (CALTEL), petitioned the California Public Utilities Commission to adopt rules requiring ILECs to obtain advance approval from the CPUC before retiring copper loops and replacing them with fiber and demonstrate doing so would be in the public interest.
The CPUC declined, instead requiring ILECs to notify the CPUC and all CLECs interconnected with their copper plants before replacing copper with fiber. In addition, ILECs must engage in "good faith commercial negotiations" CLECs that want to purchase or lease the copper loop, the CPUC said in a Nov. 6 news release.
"I believe that this decision balances state and federal goals of promoting the deployment of broadband networks against the interests of competitors to retain access to the copper loop," Commissioner Rachelle Chong stated in the news release.
ILECs have long chafed under the line sharing requirements of the 1996 federal reform law and have dragged their feet and litigated with CLECs seeking to connect to their lines. Apparently CLECs now fear ILECs are about to use their ultimate weapon to make them go away for good, rendering them irrelevant by replacing their copper with fiber since they don't have to provide CLECs access to their proprietary fiber under a 2006 U.S. Court of Appeals ruling.
But ILECs have largely resisted employing the fiber strategy on CLECs since it requires them to make substantial investments in upgrading their wireline infrastructures that they have been reluctant to make. It's possible ILECs are now concluding doing so is worth it because it both disposes of pesky CLECs while also enabling them to exclusively offer far more advanced IP-based services that can be more reliably delivered over fiber than copper.
It will be interesting to watch how this plays out in California and other states and whether CLECs will bid on telco copper loops made obsolete by fiber. Probably few will since copper does not provide a future growth path for offering advanced services due to its technological limitations as have been painfully illustrated with the limited range and throughput of DSL over copper. In addition, aged copper loops are likely to be a low repair priority for ILECs, making it difficult for CLECs to provide reliable service. This could be the beginning of the end for CLECs.
Location, location, location: Broadband access now a factor in residential real estate
Associated Press writer Peter Svensson reports on what I've predicted will be a growing factor affecting the residential real estate market: whether a home has broadband access. Broadband has become a basic telecommunications utility. Homes that lack it are becoming about as desirable as those without electricity or water hookups. Svensson quotes Edward Redpath, a real estate broker in Hanover, N.H., as saying he's seen deals fall through once the buyer realizes a home can't get broadband.
I disagree with Svensson's theory that over time the lack of universal broadband in the United States along with higher gasoline prices could pull people from the countryside toward cities and suburbs.
Small local Wireless Internet Service Providers (WISPs) are springing up throughout the U.S. to provide wireless broadband where the telco/cable duopoly does not. Residents and businesses will also take matters into their own hands and form and invest in cooperatives to build their own local fiber optic telecommunications infrastructures just as they did several decades ago to bring electricity and telephone service to their communities.
As Svensson's story suggests, they will be motivated by economic considerations to boost the market appeal and value of their homes -- particularly as they work to crawl out of the current real estate market downturn -- and to support their ability to start businesses and telecommute to their jobs.
I disagree with Svensson's theory that over time the lack of universal broadband in the United States along with higher gasoline prices could pull people from the countryside toward cities and suburbs.
Small local Wireless Internet Service Providers (WISPs) are springing up throughout the U.S. to provide wireless broadband where the telco/cable duopoly does not. Residents and businesses will also take matters into their own hands and form and invest in cooperatives to build their own local fiber optic telecommunications infrastructures just as they did several decades ago to bring electricity and telephone service to their communities.
As Svensson's story suggests, they will be motivated by economic considerations to boost the market appeal and value of their homes -- particularly as they work to crawl out of the current real estate market downturn -- and to support their ability to start businesses and telecommute to their jobs.
Wednesday, November 05, 2008
White spaces broadband faces uncertain future
Expectations should be tempered contemplating the implications of this week's action by the Federal Communications Commission approving the unlicensed use of television broadcast "white spaces" spectrum being freed up by the February 2009 transition to all digital TV broadcasting to deliver wireless broadband.
There are many unknowns as to whether white spaces will ultimately deliver broadband over the airwaves in the real world or whether it will remain an impractical concept that goes the way of Broadband over Power Lines (BPL).
They include a probable years long legal challenge by broadcasters worried over potential interference despite FCC field testing showing otherwise. It should be borne in mind the purpose of the FCC testing was to assess potential interference with broadcast and short range microphone signals. How white spaces broadband will perform and the kind of throughput it can reliably deliver remain major unknowns until it's actually deployed.
White spaces broadband could well end up being too little to late once the legal challenges have run their course given that Clearwire is already rolling out 2.5 Ghz WiMAX in some areas and deployment of 4G wireless broadband by telcos is expected by 2010.
Potential key advantages of white spaces broadband over these other wireless technologies is superior range and greater ability to penetrate trees and buildings since it operates in the 700 Mhz TV spectrum.
An additional challenge could come from telcos who may resist providing the necessary "fat pipe" backhaul for white spaces broadband if they see it as a competitive threat to their own wireline and wireless broadband franchises. That could generate more lengthy litigation such that between Internet Service Providers (ISPs) and telcos over access and pricing of line access under the Telecommuncations Act of 1996.
Finally, all wireless broadband technologies at this point don't appear likely to be able to match the fiber gold standard of 100 Mbs and greater throughputs that will increasingly be in demand for fixed broadband services. For the foreseeable, that relegates wireless broadband -- likely including white spaces broadband if it comes to market -- to a transitional broadband technology for fixed locations in areas unserved and underserved by wireline broadband providers and for general mobile use.
There are many unknowns as to whether white spaces will ultimately deliver broadband over the airwaves in the real world or whether it will remain an impractical concept that goes the way of Broadband over Power Lines (BPL).
They include a probable years long legal challenge by broadcasters worried over potential interference despite FCC field testing showing otherwise. It should be borne in mind the purpose of the FCC testing was to assess potential interference with broadcast and short range microphone signals. How white spaces broadband will perform and the kind of throughput it can reliably deliver remain major unknowns until it's actually deployed.
White spaces broadband could well end up being too little to late once the legal challenges have run their course given that Clearwire is already rolling out 2.5 Ghz WiMAX in some areas and deployment of 4G wireless broadband by telcos is expected by 2010.
Potential key advantages of white spaces broadband over these other wireless technologies is superior range and greater ability to penetrate trees and buildings since it operates in the 700 Mhz TV spectrum.
An additional challenge could come from telcos who may resist providing the necessary "fat pipe" backhaul for white spaces broadband if they see it as a competitive threat to their own wireline and wireless broadband franchises. That could generate more lengthy litigation such that between Internet Service Providers (ISPs) and telcos over access and pricing of line access under the Telecommuncations Act of 1996.
Finally, all wireless broadband technologies at this point don't appear likely to be able to match the fiber gold standard of 100 Mbs and greater throughputs that will increasingly be in demand for fixed broadband services. For the foreseeable, that relegates wireless broadband -- likely including white spaces broadband if it comes to market -- to a transitional broadband technology for fixed locations in areas unserved and underserved by wireline broadband providers and for general mobile use.
Sunday, November 02, 2008
Cable company capitalizes on AT&T's failure to deploy DSL, inability of telco's aged copper cable plant to support bundled services
Two years ago, South Lake Tahoe was one of El Dorado County, California's most puzzling and persistent broadband black holes. Neither incumbent telco AT&T nor the incumbent cable provider, Charter Communications, offered broadband to many of the area's neighborhoods, leaving residents with the dreary Hobson's choice of antiquated mid-1990s era dialup technology or costly, substandard satellite Internet connections.
Patti Handal was fed up with the situation and went door to door with some of her neighbors, collecting signatures of nearly 700 residents of the affected neighborhoods petitioning AT&T to deploy DSL and do so ASAP. Then several months later in June 2007, the Angora Fire incinerated some of these neighborhoods along with portions of AT&T's aerial copper cable serving them. AT&T's replacement of the fire damaged infrastructure enabled the telco roll out DSL to Handal's and some -- but not all -- of the Tahoe neighborhoods stranded on the dark side of the digital divide.
In retrospect, Handal believes the petition campaign to show AT&T demand was there for DSL had no meaningful impact despite the encouragement of the effort by AT&T and local elected officials. Instead, it was the Angora Fire's destruction of AT&T infrastructure that altered the dial up status quo.
Now Handal reports Charter is about to roll out service to much of Montgomery Estates, all of Echo View Estates, all of Angora Highlands, and all of Mountain View Estates with Christmas Valley and all of Montgomery Estates in the near future.
Charter officials were likely motivated by a report in the Tahoe Tribune that AT&T decided in January 2008 not to expand DSL service in the area in the foreseeable future, seizing an opportunity to take and hold market share since in a duopolistic market, whichever provider deploys first enjoys initial customer appreciation and loyalty for bringing them out of dial up purgatory and into the modern era of telecommunications.
Notably, AT&T isn't matching Charter's bundled services including video. According to Handal, an AT&T representative told a South Lake Tahoe Chamber of Commerce meeting two months ago that it would not be offering its bundled U-Verse service. Instead, AT&T has chosen to deploy DSL in some but not all of the areas served by Charter in a limited response to Charter's deployment initiative.
The likely explanation for AT&T's decision to select a partial DSL deployment strategy is going head to head with Charter for bundled services would require AT&T to replace most of its aged copper cable plant that can support only slower DSL speeds but cannot carry the higher bandwidth VDSL signal used by U-Verse.
Despite the expectation that AT&T introduced U-Verse in order to compete with cable companies, the scenario playing out in some South Lake Tahoe communities is likely to be mirrored throughout much of the United States where telcos' aged copper cable plant precludes them from offering bundled services and higher speeds to effectively compete with cable providers.
Patti Handal was fed up with the situation and went door to door with some of her neighbors, collecting signatures of nearly 700 residents of the affected neighborhoods petitioning AT&T to deploy DSL and do so ASAP. Then several months later in June 2007, the Angora Fire incinerated some of these neighborhoods along with portions of AT&T's aerial copper cable serving them. AT&T's replacement of the fire damaged infrastructure enabled the telco roll out DSL to Handal's and some -- but not all -- of the Tahoe neighborhoods stranded on the dark side of the digital divide.
In retrospect, Handal believes the petition campaign to show AT&T demand was there for DSL had no meaningful impact despite the encouragement of the effort by AT&T and local elected officials. Instead, it was the Angora Fire's destruction of AT&T infrastructure that altered the dial up status quo.
Now Handal reports Charter is about to roll out service to much of Montgomery Estates, all of Echo View Estates, all of Angora Highlands, and all of Mountain View Estates with Christmas Valley and all of Montgomery Estates in the near future.
Charter officials were likely motivated by a report in the Tahoe Tribune that AT&T decided in January 2008 not to expand DSL service in the area in the foreseeable future, seizing an opportunity to take and hold market share since in a duopolistic market, whichever provider deploys first enjoys initial customer appreciation and loyalty for bringing them out of dial up purgatory and into the modern era of telecommunications.
Notably, AT&T isn't matching Charter's bundled services including video. According to Handal, an AT&T representative told a South Lake Tahoe Chamber of Commerce meeting two months ago that it would not be offering its bundled U-Verse service. Instead, AT&T has chosen to deploy DSL in some but not all of the areas served by Charter in a limited response to Charter's deployment initiative.
The likely explanation for AT&T's decision to select a partial DSL deployment strategy is going head to head with Charter for bundled services would require AT&T to replace most of its aged copper cable plant that can support only slower DSL speeds but cannot carry the higher bandwidth VDSL signal used by U-Verse.
Despite the expectation that AT&T introduced U-Verse in order to compete with cable companies, the scenario playing out in some South Lake Tahoe communities is likely to be mirrored throughout much of the United States where telcos' aged copper cable plant precludes them from offering bundled services and higher speeds to effectively compete with cable providers.
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