Tuesday, December 30, 2008

Guiding principles for U.S. broadband infrastructure economic stimulus

As Congressional leaders and the incoming administration of U.S. President-elect Barack Obama mull economic stimulus legislation including a portion of which is expected to be devoted to telecommunications infrastructure to boost broadband Internet access, I offer these guiding principles:

1. The focus should be on the so-called "last mile" or local access network portion of the system. There's a broad consensus that the lack of adequate broadband access in the United States is due to technological shortcomings on this segment of the telecommunications infrastructure, its weakest link. The overall goal should be full build out of this currently incomplete but vital infrastructure to serve all residents and businesses.

2. The "copper wall" that comprises the last mile telecommunications infrastructure is the primary barrier to wider broadband Internet access. It has been obsolete for about a decade and will become increasingly so as demand for broadband access and more bandwidth intensive content like video grows. The copper wall should be torn down and replaced with fiber optic cable, either aerial or buried depending on local construction cost factors and neighborhood preferences. Calls by large telcos for funding for DSL over copper should be rejected. Funding for such projects would keep the U.S. lagging behind other developed nations on broadband telecommunications technology and constitute an economic bailout to build increasingly obsolete technology rather than a true stimulus.

3. The last mile is the most local element of the nation's telecommunications infrastructure. Accordingly, stimulus should favor local entities to replace copper with fiber such as locally owned private companies, local governments and fiber cooperatives, the latter aided by incentives to encourage homeowner-owned fiber over the last mile.

The 12 year period following the enactment of the 1996 Telecommunications Reform Act has shown providing tax breaks and other incentives to large publicly traded telcos has not resulted in adequate capital expenditure on infrastructure to serve the nation's future telecommunications needs or the selection of broadband technology best suited to do so.

As for private providers, Congress and the Obama administration should note that even generous subsidies to incumbent telcos to build out broadband infrastructure may prove indequate as seen from their less than enthusiastic response to a California Public Utilities Commission program that subsidizes broadband deployments in unserved and underserved areas with a surcharge on intrastate voice long distance calls.

The investment cycle of these companies is apparently too short to earn a return on broadband infrastructure investment even at the 40 percent funding level provided by the program -- and even for arguably obsolete DSL equipment proposed in the handful of projects approved by the CPUC in 2008. Accordingly, broadband infrastructure stimulus funding directed to community-based cooperatives, nonprofits and local governments would likely produce the most rapid deployments.

Friday, December 19, 2008

Media reform group recommends $44 billion broadband "down payment"

Free Press, a nonprofit group that advocates "diverse and independent media ownership, strong public media and universal access to communications," has issued a paper calling on the Obama administration and Congress to make a $44 billion "down payment" investment in U.S. broadband telecommunications infrastructure as part of the incoming administration's planned economic stimulus package.

Free Press plan recommends the bulk of the $44 billion be used to fund grants and interest free bonds to private sector providers as well as municipalities and nonprofits fund deployment of wireline and wireless broadband to underserved areas of the U.S. capable of providing minimum 5 Mbps symmetrical service with priority
given to projects that can deliver speeds in excess of 50 Mbps. The funding would be paid out over three years.

Free Press properly raises the concern that the funds could end up becoming a slush fund and like the Universal Service Fund has for voice telephone service could be used to fund broadband infrastructure in areas that already have a range of broadband services.

"Congress must not simply write blank checks to industry," the organization states in an executive summary of the report. "To maximize the effectiveness of scarce taxpayer resources, oversight and accountability measures must be established." Free Press suggests these measures include strict build-out schedules and affordability and capacity requirements, including minimum rather than "up to" throughput capacities.

"We offer these proposals as a starting point — not the bottom line," the group states. "Our hope is to expand the public debate and the deliberative process on broadband stimulus proposals to include a wide variety of ideas that have been put forward or are coming soon. Though we strongly believe that principles of accountability, future-proof quality, and public service priorities must guide any final legislation, this set of ideas should serve as a foundation for policymakers and the public."

Tuesday, December 16, 2008

Another sign of the coming end of AT&T's U-Verse

In late September, this blog predicted AT&T will abandon its Project Lightspeed/U-Verse deployment sometime in the first half of 2010 as part of a general retreat from the wireline-based residential/home office market segment.

Another sign of the coming end of the U-Verse universe emerged this week when AT&T pushed back -- again -- the rollout of VDSL copper pair bonding technology to extend the range and throughput of its bundled IP-based U-Verse product. The new target date is sometime next year, the second delay after a planned late 2007 deployment was pushed back a year.

The obstacle is the same one that has plagued AT&T 's ADSL service: not enough good, clean copper in the telco's last mile cable plant, much of it put in place decades ago to support POTS (Plain Old Telephone Service) and never expected to support advanced digital services like ADSL let alone U-Verse. Telephony Online explains:

Perhaps a more pressing limitation, however, is the simple requirement for extra pairs of existing copper, which are not in plentiful supply in AT&T’s network outside the territory of the former BellSouth, where extra pairs were deployed extensively in the 1990s to accomodate dialup and fax services.

Saturday, December 13, 2008

Sacramento Bee: More than third of $500 billion federal economic stimulus package earmarked for infrastructure investment -- including broadband

The Sacramento Bee reports today that infrastructure investment will comprise more than one third of a $500 billion economic stimulus measure being drafted into legislation for approval by the Obama administration when it takes over Jan. 20.

The infrastructure investment is expected to encompass expanding broadband Internet access and creating "digital highways" for the 21st century economy, the newspaper reports quoting unnamed Democratic lawmakers and aides.

In a radio address one week ago, President-elect Obama pledged to renew U.S. broadband infrastructure, declaring it's "unacceptable that the United States ranks 15th in the world in broadband adoption."

Friday, December 12, 2008

Sacramento Bee: Internet access still a wish for many in rural areas

The Sacramento Bee is out with a story today that's likely to be familiar to folks all over the United States and not just in the Bee's Northern California circulation area. Your blogger is featured. Click here for the story. As for my recommendations re this issue to the incoming Obama administration, click here.

The difficulty getting good solid broadband Internet access isn't by definition a rural issue given that U.S. residential development isn't confined to only urban and rural areas. For much of Northern California, it's far more "granular" as demographers would say when the exurbs and quasi-rural areas are taken into account. Most of the Sacramento Bee's circulation area is considered part of the Sacramento metropolitan area.

It's also worth noting that some of those who have posted comments on the Bee's Web site at the online version of the story are located relatively close in, including one from Silicon Valley. Broadband black holes like their physical counterparts in space can be found anywhere. See also Silicon Valley’s shameful secret: lousy broadband at MuniWireless.

BTW, the article didn't include the name of my WISP (Wireless Internet Service Provider). For you El Dorado County and Amador County residents looking for service, it's Remotely Located.

Thursday, December 11, 2008

White paper calls on next president to form National Broadband Strategy Commission

When it comes to the proliferation of robust broadband access, the United States has relied too heavily on the private sector and has gotten less than impressive results, asserts the Benton Foundation in a white paper calling for increased public involvement by the federal government.

The paper urges the incoming administration to create a National Broadband Strategy Commission composed of members from the public, private, academic, nonprofit, and other sectors to produce "an ambitious, yet achievable, comprehensive National Broadband Strategy to deploy robust, affordable broadband to every household in America," by Jan. 1, 2010.

The commission should lay out a "roadmap and timetable" to provide all U.S. households access to "robust and affordable broadband" by the end of 2010 and "affordable access to modernized broadband networks that are as robust as those of any other nation" by the end of 2015, the foundation advises.

The foundation's recommendations are likely to be well received by President-elect Barack Obama, who said in an address last weekend that it's unacceptable that the United States ranks 15th in the world in broadband adoption.

Report: AT&T pulling plug on Pahrump, Nevada WiMAX by year end

A few years back, AT&T rolled out an early market test deployment of WiMAX in Pahrump, Nevada. Now an AT&T customer there tells me AT&T will stop offering the service effective Dec. 31 and has opted instead for DSL and is deploying remote DSLAMs around the town about 60 miles from Las Vegas.

Apparently there wasn't enough bandwidth to handle the demand. "We had it for about two years, and the longer we had it, the slower it got," the AT&T customer reports, noting he generally got 384 Kbs to 768 Kbs downloads on WiMAX. He's now on AT&T's 6 Mbs DSL plan, so while the switch to DSL cost $5 a month more, it was a no brainer.

What's notable about this development is AT&T's new technology chief John Donovan said only four months ago that the big telco viewed WiMAX as a less costly alternative to replacing aging copper plant and installing remote DSLAMs in order to provide DSL, particularly in less densely populated areas.

I sent an email to AT&T spokesman Michael Coe Dec. 10 asking why WiMAX was scrapped in favor of DSL in Pahrump but received no reply, so readers will have to draw their own conclusions. AT&T has also deployed WiMAX in Alaska offering sub 1 Mbs throughput speed and in parts of the former Bellsouth territory AT&T acquired at the end of 2006.

If AT&T's version of WiMAX can't provide more than 1 Mbs, it is already essentially obsolete and calls into question AT&T's expectations that it will serve as lower cost broadband option compared to DSL.

Wednesday, December 03, 2008

Fixed terrestrial wireless supplanting DSL as interim premises broadband technology

When it was widely introduced starting nearly a decade ago, Digital Subscriber Line (DSL) was viewed by telcos as an ideal interim broadband technology on the road to Fiber To The Premises (FTTP) and a means to utilize their existing investment in copper cable plant over the last mile. But since telcos are many years behind where they should be in deploying FTTP, DSL became more of a permanent thoroughfare rather than temporary byway.

The problem is DSL has not been able to adequately fulfill that role due to technological limitations that restrict its range and require the use of near pristine copper that's in increasingly short supply as telcos' decades-old cable plants grow old and frazzled.

Now fixed terrestrial wireless is poised to take the place of DSL as the preferred transitional technology on the way to FTTP, starting in areas where DSL cannot due to its notorious handicaps. Over the past few years, a large number of mom and pop Wireless Internet Service Providers (WISPs) offering fixed terrestrial wireless via over unlicensed spectrum have sprung up, exploiting DSL's far more limited geographical reach and providing a faster and less costly connectivity than satellite Internet. The big telcos have also incidentally picked up some fixed premises customers with their mobile wireless 3G broadband offerings, but don't represent a threat to the WISPs due to high latencies and bandwidth usage caps.

The proliferation of WISPs as a substitute for DSL is evident in this blogger's area of El Dorado County, California where one, Central Valley Broadband, is offering 3Mbs service to telco neglected SOHOs (Small Office/Home Office) located in telco broadband black holes.*
* (See 1/23/09 update)

Telcos and to some extent cable providers have effectively ceded these areas to the WISPs, leading to increased competition among them. More competition among WISPs is also driving consolidation. Central Valley Broadband announced in October it had acquired two WISPs serving Placer and El Dorado counties.

Going forward, I expect WISPs to continue to provide a more flexible and robust pre-FTTP premises broadband option than DSL. Since it will likely be many years before most all premises have fiber optic connections, the WISPs appear set for a good long run.

Tuesday, December 02, 2008

Russia shuns copper for broadband buildout

Light Reading Europe reports TTK, the state-owned Russian telco, is "embarking on a major push into high-speed broadband access, focusing on Russia's less well served cities and towns," noting that about 93 percent of Russia's 140 million inhabitants live outside Moscow.

Notably, those plans don't call for the use of metal wire-based cable plant used in most other nations, typically to provide underpowered DSL over copper. Instead, TTK's
Sergey Shavkunov told Light Reading, the company will use a mix of point-to-point fiber, GPON and WiMax as apppropriate.

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.

Wednesday, November 12, 2008

BPL gets another lease on life

The obituary for Broadband Over Power Lines (BPL) had all but been written when IBM announced it would pony up $9.6 million in a venture with a small company to deploy BPL via electric power cooperatives formed decades ago in areas of the U.S. skipped by private power companies. Today, these same areas are being passed over by the private telco/cable duopoly and left without broadband Internet access.

According to Yahoo! Tech, the BPL rollout will take about two years and potentially serve 340,000 homes in Alabama, Indiana, Maryland, Pennsylvania, Texas, Virginia, and Wisconsin where about 86 percent lack cable or DSL access. The project has received $70 million in low-interest loans from the Department of Agriculture.

Making this project work could prove challenging. BPL utilizes similar transmission technology as DSL that rapidly degrades over distance, requiring extensive and costly amplification to get the signal to homes over long distances.

In addition, by the time this BPL project comes on line, residents of these areas could have superior alternatives such as fixed terrestrial wireless broadband based on multiple current and emerging technologies such as WiMAX and white spaces broadband over unused television frequencies that was given the green light by the Federal Communications Commission last week. And given that these areas have a history of forming cooperatively owned utilities, they may similarly opt to form cooperatives to build fiber optic infrastructure to assure their telecommunications needs are met over the longer term.

Monday, November 10, 2008

Less than enthusiatic response to California broadband build out subsidy program

A key recommendation of California Gov. Arnold Schwarzenegger's Broadband Task Force to build out broadband Internet infrastructure in the Golden State is getting a less than enthusiastic response from the state's incumbent telcos.

In comments filed last week with the California Public Utilities Commission (CPUC), which is considering expanding eligibility for 40 percent project subsidies to a wide variety of organizations and local governments, both large and small Incumbent Local Exchange Carriers (ILECs) complain the 40 percent subsidy is too low to make it worthwhile to invest in infrastructure for high cost areas currently unserved or underserved by broadband providers. They call on the CPUC to abandon the fixed 40 percent subsidy and instead award amounts based on the cost of the project.

The CPUC's internal Division of Ratepayer Advocates (DRA) is also calling on the CPUC to revamp the subsidy program, the California Advanced Services Fund (CASF). "The general paucity of bidders for CASF funding" and just six ILEC-proposed projects submitted for funding to date "suggests that the Commission’s anticipated advancement of broadband availability and competition is not bearing fruit," the DRA stated in its filed comments in the CASF proceeding. "While the factors that have led to this outcome are unclear, what is clear is that one of the Commission’s goals for the CASF – encouraging a diversity of advanced technologies and service providers – is unlikely to be met unless there is a critical review of the CASF, as it is currently structured and administered."

The DRA also recommends against allowing municipalities and other entities that are not under the CPUC's jurisdiction from proposing projects because the CPUC would have to enforce compliance with CASF funding requirements through the courts.

The six ILEC-proposed projects to bring wireline-delivered broadband unserved areas to be considered by the CPUC at its Nov. 21 meeting total just $372,976 in requested CASF funding.

The largest of the six proposals is by Verizon California and seeks $174,000 to serve 382 housholds in the Pinyon Crest area of Riverside County. AT&T has proposed four projects in both northern and southern California, including what is arguably a token effort to bring broadband to two residences in the Mount Wilson area of Los Angeles County.

Only one of the proposed projects meets original CASF project criteria of being capable of providing at least 3 Mbs downloads and 1 Mbs uploads -- one by Frontier Communications to provide service for 171 households in the Lake Almanor area of Plumas County.