Friday, January 16, 2009

Broadband infrastructure provisions of U.S. economic stimulus legislation

The House Appropriations Committee has released a draft of the economic stimulus legislation titled the American Recovery and Reinvestment Act of 2009 appropriating $6 billion in loans, loan guarantees and grants for the build out open access broadband telecommunications infrastructure.

Slightly less than half of the funds will be directed to the Rural Utilities Service prioritizing rural areas that received funding for electrification under the Rural Electrification Act of 1936. The Secretary of Agriculture would determine which rural areas lack sufficient access to high speed broadband service.

The balance of the funding would be directed to a State Broadband Data and Development Grant Program administered by the National Telecommunications and Information Administration. (NTIA) $1 billion would be allocated to wireless and $1.85 billion to wireline broadband; up to 20 percent could be shifted between wireless and wireline.

Within 75 days of the proposed legislation's enactment, states desiring access to funding would be required to submit reports to the NTIA identifying areas with the greatest need for broadband infrastructure. States would be required to identify those areas that lack basic wireline broadband -- defined asymetrically under the measure as capable of providing throughput of at least (not "up to") 5 Mbs download and 1 Mbs upload -- and advanced wireline broadband -- defined asymetrically as 45 Mbs download and 20 Mbs for uploads. Both voice only and advanced wireless telecommunications infrastructure are eligible for funding, however 75 percent would be set aside for advanced wireless infrastructure in capable of providing broadband connectivity of 3 Mbs down and 1 Mbs up.

Lacking from the throughput requirements for both wireline and wireless broadband are latency standards, which should be a maximum of 50-60 milliseconds.


Notably, entities eligible for grant funding include private providers of broadband services, states, local governments and other entities as authorized by the NTIA. The measure requires the agency to adopt rules to prevent unjust enrichment of grant recipients including meeting build out requirements for proposed projects.

The bill leaves it to the Federal Communications Commission to define broadband ‘‘unserved" and "underserved" areas as well as what constitutes open access broadband infrastructure. I would suggest that it be defined to mean the opposite of the proprietary broadband infrastructure owned by the large telcos and cable companies that has been only partially built out, leaving gaping broadband black holes and lack of access to modern IP-based telecommunications services. As World Wide Web creator Vint Cerf observed in 2008, these providers have impeded the expansion of broadband since they have large amounts invested in legacy infrastructure that was never intended for broadband and IP-based services.

Thursday, January 15, 2009

Economic stimulus measure includes $6 billion down payment on U.S. broadband infrastructure

The House Appropriations Committee today released an outline of the economic stimulus funding bill being readied for President-elect Barack Obama's signature after he takes office next week.

The American Recovery and Reinvestment Bill of 2009 will include $6 billion in grants earmarked for broadband and wireless services in underserved areas of the nation "to strengthen the economy and provide business and job opportunities in every section of America with benefits to e-commerce, education, and healthcare." The summary of the stimulus measure estimates that the $6 billion investment in broadband will produce a $60 billion multiplier effect for the nation's struggling economy.

This is just for starters. Blair Levin, a technology advisor to the incoming president, told the State of the Net Conference in Washington Jan. 14 that the $6 billion being set aside for broadband in the stimulus legislation represents only a portion of the incoming administration's planned efforts to boost broadband deployment in the U.S.

Update 1/16/08: For details on how the funding is parsed out, here's what I've obtained from the actual draft legislation.

Tuesday, January 13, 2009

Fiber infrastructure build out -- not throughput speed-- should be focus of planned stimulus funding

The Washington Post reports today a debate is brewing over how broadband should be defined under the incoming Obama administration's goal to fund new broadband telecommunications infrastructure as part of its planned economic stimulus package. Specifically, the debate is over what level of throughput defines broadband.

Throughput speed is not the issue. Building out fiber optic infrastructure over the local access network -- the so-called "last mile" -- is. Fiber provides a proven, future proof technology that can accommodate the rapidly increasing demand for bandwidth needed by video and other bandwidth-intensive applications. Art Brodsky of Public Knowledge correctly observes in the Post article that providing stimulus funding to telcos for increasingly obsolete metal wire-based broadband services would turn into a wasteful boondoggle.

History supports Brodsky's warning. The bell companies that today comprise AT&T, Verizon and Qwest were to have built out their networks with the tax incentives provided more than a decade ago under the Telecommunications Act of 1996 to provide fiber connections to all homes and businesses by 2006. They didn't. Consequently, the U.S. suffers with incomplete telecom networks that leave millions unable to get decent Internet access more than a decade after the law's enactment. Repeating this error would ignite a race to the bottom and leave the U.S. even further behind other developed nations when it comes to broadband Internet access and modern IP-based telecommunications services.

Rather than large telcos and cable companies, economic stimulus funding should be directed to local entities including for profit companies, nonprofit cooperatives and local governments to construct fiber optic infrastructure over the critical but long neglected last mile.

Sunday, January 11, 2009

Minnesota muni fiber project prime example of where broadband infrastructure stimulus funding should go

Blandin on Broadband tipped me to this municipal fiber project whose $18.5 million bond financing goes before North St. Paul, Minnesota voters next month.

It's a prime example of where the new Congress and the incoming Obama administration should be directing economic stimulus infrastructure funding. Federal funding would help reduce the financial risk of these municipal fiber projects by helping them cover their start up costs sooner while creating badly needed jobs and stimulating electronic commerce.

North St. Paul City Manager Wally Wysopal has the right idea in suggesting this isn't simply about filling in broadband black holes but instead is putting in place vital telecommunications infrastructure that can meet the city's needs going into the future. This approach is far superior to simply playing catch up by wasting stimulus funding on rolling out increasingly obsolete copper cable-based DSL that should have been more widely deployed years ago under the incentives and tax breaks of the 1996 federal Telecommunications Act.

"The idea here is to become the best-connected small town in Minnesota," Wysopal told the TwinCities.com Pioneer Press. "We're not getting into this for the sake of providing lower rates for cable or telephone but to provide a service that's superior to anything that's being contemplated today."

Friday, January 09, 2009

Obama calls for U.S. broadband build out

Here's the relevant passage from a speech U.S. President-elect Barack Obama delivered Thursday on his proposed American Recovery and Reinvestment Plan:

To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.

The President-elect raised the issue again two days later in his Saturday, Jan. 10 radio address:

We’ll put nearly 400,000 people to work by repairing our infrastructure – our crumbling roads, bridges and schools. And we’ll build the new infrastructure we need to succeed in this new century, investing in science and technology, and laying down miles of new broadband lines so that businesses across our nation can compete with their counterparts around the world.

Wednesday, January 07, 2009

Study estimates tax incentives for fiber to the premises would create more than half million jobs over 3 years

The Fiber to the Home Council commissioned a study issued this week that concludes tax incentives to spur the deployment of fiber optics to the premises (FTTP) would generate more than 200,000 jobs in each of the next three years (2009-11) and increase economic output by more than $100 billion during the period. The report examines the economic impact of allowing builders of broadband infrastructure to fully depreciate their investments and authorizing private and public entities to issue bonds that feature federal income tax credits to help cover the outlay for the deployments.

The report's release is apparently timed in hopes it will be considered as part of a massive federal economic stimulus and infrastructure construction measure being readied by Congress for President-elect Barack Obama's signature soon after he takes office later this month.

The report cites data compiled by Morgan Stanley estimating the U.S. residential broadband penetration rate at approximately 56 percent of all households, projected to grow to 61.1 percent by 2011. Without the proposed tax incentives, an average of 7.3 million homes (equal to six percent of all households) will lack broadband access from 2009 through 2011 without the proposed tax incentives, the study concludes citing Morgan Stanley estimates.

What's odd about the study considering it was done for an organization promoting the use of fiber is that it also examines the effect of tax incentives directed at upgrading and building out existing metal wire-based cable and telco DSL infrastructure offering throughput of 5 Mbs down and 1 Mbs up.

As this blog recently asserted, federal incentives and funding should be targeted to local private and public sector entities with the specific goal of modernizing telecommunications infrastructure over the last mile. History has shown that tax and other financial incentives put in place as part of the federal Telecommunications Act of 1996 failed to provide adequate impetus for large incumbent telcos to build out broadband infrastructure to serve all homes and businesses, leading to the current problem of widespread and persistent broadband black holes.

Netflix and Blockbuster video over Internet still not ready for prime time, but a viable a la carte VOD alternative to cable, telco TV

Reuters reports today that Blockbuster is joining rival Netflix in offering video on demand over high speed Internet connections as an alternative to renting DVDs.

This is clearly where viewing films at home is headed. But over the foreseeable, it's going to be logistically constrained to a small market segment: those areas where broadband connections offer adequate bandwidth to support downloading of standard and especially high definition video content.

On line delivery of video on demand provided by these vendors also offers an alternative to those who don't wish to pay for video programming packages offered by cable and telco TV players and instead prefer to take their video a la carte.

Tuesday, January 06, 2009

Alabama governor announces initiative to boost broadband availability

Here's the news release issued by Alabama Gov. Bob Riley and an AP story based on the release. According to the AP story, the initiative -- funded mostly by federal grants -- will fund the deployment of both wireline and wireless broadband infrastructure in unserved and underserved areas of the state.

Riley has apparently grown frustrated at the lack of broadband access in Alabama, which according to Federal Communications Commission ranked among the lowest of all states as of June 2007 -- the most recent period for which the FCC has released data -- measured on wireline-based telco broadband availability.

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.