Friday, November 28, 2008

France adopts universal broadband requirement but sets bar too low

More international broadband developments this Thanksgiving weekend. While the Australian government struggles to implement near universal broadband access in the land down under and wrangles with its partially state owned telco, Telstra, over build out requirements, Reuters reports a French government official said his nation would require telcos (called telecoms in Europe) to provide universal broadband access providing connectivity of at least 512kbs throughout France starting in 2010. According to the Reuters dispatch, France had been pressuring the European Union to adopt a universal broadband mandate for telecoms that provide universal voice service but abandoned the effort due to lack of consensus among EU member nations.

France's 512kbs minimum speed requirement is really setting the bar low, perhaps in order to allow French telecoms such as France Telecom to attempt to deliver DSL over long and ancient copper loops commonly found in broadband black holes in the U.S. and elsewhere. That throughput level is already obsolete and is below even the minimal 768kbs "basic" broadband standard adopted by the U.S. Federal Communications Commission earlier this year.

Wednesday, November 26, 2008

Trouble down under with national broadband program

The Australian labor government and the nation's predominant telco Telstra are at loggerheads over the government's National Broadband Project, the goal of which is to bring broadband to 98 percent of homes and businesses, reports Business Day. Telstra isn't willing to go that far and wants its rollout to reach only 80 to 90 percent.

It's also balking at the government's demand that its infrastructure and retail arms be separated, apparently to discourage the latter from driving the former's broadband deployment strategy as has occured in other nations including the U.S. where telcos concentrate on selling services to more profitable areas while leaving others without broadband access.

Fiber cooperatives pick up the slack where telcos won't go

Here's an item from the nation's least populated state, Wyoming, that counters the myth that fiber optic telecommunications infrastructure is feasible only in densely populated areas. This is where things are headed: while the major telcos shun less densely populated areas and deploy fiber in limited portions of their service territories, cooperatives are stepping into the gap just as they did several decades ago when the other large private utility companies wouldn't serve these areas. Most importantly, those forming fiber cooperatives hold a long term view of their future telecommunications needs in contrast to the big publicly traded telcos that operate with limited quarterly and annual time horizons.

Tri County Telephone, the cooperative that serves the Ten Sleep area, upgraded from decades-old copper phone wiring to fiber in 2006 — a step that has still yet to happen in many urban areas.

Chris Davidson, Tri County's general manager, said the company wanted "to build a network for the future.

Monday, November 24, 2008

Obama administration should offer incentives for homeowner-owned fiber over the last mile

The incoming administration of U.S. President-Elect Barack Obama has tagged rebuilding America's aging infrastructure as a key policy objective. That includes its badly outdated last mile telecommunications infrastructure in order to make broadband accessible to more Americans.

Since the primary inadequacy of the telecommunications infrastructure when it comes to supporting broadband-enabled IP services isn't with the long haul and mid-mile portion of the network but rather the so-called "last mile" local access network, the administration should concentrate its efforts on developing incentives to hasten the change out of copper cable to fiber optic cable over this segment.

The administration should pay particular note of a recently issued working paper by the New America Foundation authored by Derek Slater and Tim Wu. The paper, Homes with Tails What If You Could Own Your Internet Connection, recommends state and federal tax credits to create incentives for homeowners to spend a $2,500 to $4,000 to connect their homes to last mile fiber built by existing carriers, neighborhood cooperatives, developers, local governments and private fiber optic vendors.

The authors seem to acknowledge that while there's near universal agreement that fiber over the last mile is essential to the future of America's telecommunications system and the critical role it plays in the nation's economy, there also is a substantial amount of inertia on both the supply and demand sides of the equation that keeps the U.S. stuck behind a technologically obsolete "copper wall" built decades before the Internet was created. The limitations of telcos' circa 1970s and earlier copper cable plants have become painfully obvious to all too many Americans who have vainly attempted for years to subscribe to their telco's DSL (or VDSL)-based services, only to be told it can't reach their homes or the copper cable is too old and degraded to support it or find it can't reliably deliver the throughput they'd like.

Telcos that have to produce quarterly profits are inherently conservative and won't make a long term capital investment in deploying fiber over their entire networks. They argue there's not enough evidence that homeowners will subscribe to fiber-based services at a sufficient "take rate" to justify such a major expenditure unless homes are densely packed cheek to jowl, thus reducing their investment risk. The problem is a lot of Americans don't live in such neighborhoods nor have any desire to do so. And since telcos operate in a duopolistic and often monopolistic market environment, telcos eschew meaningful market research and don't get hard data that might indicate that if they built fiber, customers will sign up for advanced services.

Hence, Slater and Wu posit -- correctly in this blogger's opinion-- that it falls to consumers themselves to break down the copper wall in favor of fiber over the last mile since risk averse telcos will continue to default to the safe status quo whenever possible.

The authors aptly acknowledge that many homeowners might balk at dropping a few thousand bucks to connect their homes to locally owned fiber and that there needs to be a compelling financial argument in addition to bringing their dwellings into the modern telecommunications age. In this regard, they point to a study by RVA & Associates, a market research firm that focuses on fiber networks, estimating that fiber connection increases the value of a home by about $4000. If the Obama administration combined that with a tax break, the proposition becomes even more appealing, particularly along with incentives for mortgage companies and other lenders to extend low interest fiber loans to homeowners. The tax breaks could be partially offset by stimulating economic activity that would bring in additional tax revenues.

Slater and Wu are to be commended for advancing the discussion beyond the true but tired themes of how much the nation is falling behind other developed countries when it comes to broadband and needs a national broadband policy to outlining a strategy to make it happen. It's no longer useful to call for a vague "national broadband policy." Since the U.S. is already years behind where it should be when it comes to broadband telecommunications infrastructure, what's sorely needed an action plan and rapid implementation. The solutions don't have to be perfect when the dreary U.S. broadband status quo is unacceptable and grows increasingly so as time goes on. As business gurus Tom Peters and Robert H. Waterman Jr. advised in their 1982 book In Search of Excellence: Ready, Fire, Aim.

Thursday, November 20, 2008

Tensions erupt between telcos, cablecos over over California broadband build out subsidy levels

As recently reported on this blog, California's incumbent telcos are bitching to the California Public Utilities Commission, complaining a 40 percent subsidy to underwrite the cost of building out broadband infrastructure to areas of the state lacking adequate access under the CPUC's California Advanced Services Fund (CASF) isn't likely to be enough for many potential projects.

Now the griping has turned into a contretemps between some of the biggest players and Comcast has jumped into the fray. In comments filed Nov. 19 on the eve of a CPUC hearing today to consider restructuring the CASF, Verizon criticizes AT&T's suggestion the 60 percent provider match be abandoned, warning it could lead to too much state funding of some projects.

In its Nov. 19 comments filed with the CPUC, cable provider Comcast takes issue with AT&T's "incredible" suggestion that the CASF fully subsidize some projects and Verizon's proposal that the CASF share be increased up to 80 percent for selected projects. The cable company warns the higher CASF funding threshold would be contrary to the CASF's goal of funding only projects that are economically viable.

AT&T's suggestion that CASF provide 100 percent funding for selected high cost projects in unserved areas "is truly outrageous, particularly coming from AT&T," Comcast said in its filed comments. "The CASF was not set up to be a slush fund to cover 100 percent of the costs of the largest ILEC in the state."

Saturday, November 15, 2008

Vermonters starved for broadband

This item at Burlington FreePress.com starkly illustrates how far behind the demand curve telcos and cable companies have gotten in rolling out high speed Internet. Chittenden County, Vermont residents needed broadband yesterday. More accurately, make that last year or the year before.

The lag between broadband demand and availability here and elsewhere throughout much of the U.S. is likely to continue for many more years. The basic broadband such as being deployed here is already all but obsolete and will be unable to support the increased use of video that is making up ever larger portions of Internet traffic.