Monday, November 08, 2010

NTIA report reinforces outdated notion of "broadband adoption"

The National Telecommunications and Information Administration (NTIA) is issuing a report today that continues to promote the outdated notion that Internet connectivity is separate and distinct from other types of Internet delivered telecommunications such as voice and video. It does so by parsing out "broadband" usage among various demographic groups.

Unfortunately, it's about as useful as reporting distinctions among these groups in their landline long distance calling patterns. Whether they make long distance calls or not, all use telecommunications infrastructure serving their premises. It's the same with the Internet as it replaces the publicly switched telephone network (PSTN) for voice calls and even cable TV for video. "Broadband usage" is no longer a meaningful metric.

If the calendar read 1999, the NTIA's report would be timely rather than more than decade out of date. Back then, "broadband" and "high speed Internet" was an emerging service option offered by legacy telephone and cable companies. Customers paid about $50 a month for the service over and above their usual monthly service charge.

Accordingly, discussing adoption of this service in terms of demographics and income would have made sense then since some groups of people would find this premium service more appealing and affordable than others -- especially since Internet applications such as websites and email were at the time only just starting to reach most consumers.

However, at a time when the Internet provides multiple services that formerly required separate, proprietary cable and telephone systems to deliver and can do so over a single tiny fiber optic strand connected to every home and business, reports like the one being issued today by the NTIA are increasingly irrelevant. It would be more far more useful and relevant if the NTIA and others instead studied how to hasten the build out of fiber optic infrastructure so that no homes and businesses are left offline.

Wednesday, November 03, 2010

Blair Levin perpetuates false distinction among IP-based services

Blair Levin, in another recent interview looking back on the U.S. National Broadband Plan he lead authored for the Federal Communications Commission before becoming an Aspen Institute fellow this summer, perpetuates a false distinction among Internet Protocol (IP)-based telecommunications services. IP-based services include Internet applications such as web browsing, email and e-commerce as well as Voice Over Internet Protocol (VOIP) and video, also known as Internet Protocol TV (IPTV).

In an interview with Marguerite Reardon of cnet news, Levin does so by differentiating VOIP and IPTV from Internet applications. Levin -- as do many incumbent legacy phone and cable companies -- continues to describe the latter as "broadband." That term was appropriate in the mid-1990s when "broadband" denoted a premium service offered by telephone companies over their single purpose, proprietary copper cable plants. But as fiber optic cable technology increasingly obsoletes metal wire for delivering multiple IP-based services, the term is no longer relevant.

Levin reinforces this artificial split by talking about "broadband adoption." That too was relevant in the 1990s when broadband was being offered as a premium service, requiring customers to sign up for or "adopt" it. Today, it no longer is when Internet applications, voice and video can be delivered to consumers over a single fiber "pipe."

Further reinforcing the bogus notion of "broadband adoption," Levin elaborates that "broadband" requires consumers to be literate whereas voice and video do not. Therefore, Levin implies, we first need to improve the literacy of Americans to drive "broadband adoption" before the nation revamps its outmoded telecom infrastructure with fiber. Here's what he told Reardon:

Even though there are a lot of low-income people who may not be able to afford multi-channel video (cable TV), there is still a high proportion of people subscribing to the service. And people are not leaving in huge numbers. The big difference between TV and broadband is that to watch TV, you don't have to be literate. The same is true of phone service. You don't need to be literate to use a cell phone, so penetration of those services is higher. But to use broadband for things, such as getting access to public services, health care, job training, etc., a basic level of literacy is necessary. It requires a skill set. And teaching people those skills is a serious effort. So price is a piece of it, but literacy and relevance are also aspects too.

This is so much sophistry. Moreover, even if one accepts Levin's false dichotomy between Internet applications on one hand and voice and video on the other, it would argue for a bigger push to deploy fiber optic telecom infrastructure since video requires the "fat pipe" bandwidth fiber can provide.

Sunday, October 31, 2010

National Broadband Plan overly reliant on wireline, author says

Blair Levin, the Aspen Institute fellow who served as lead author of the U.S. Federal Communications Commission's National Broadband Plan before leaving the FCC this summer, told PCWorld last week the plan is flawed because it places too much emphasis on making landline Internet protocol-based telecommunications service accessible to all Americans.

"One of the problems we were running up against and that we should've been clearer about is that the conventional wisdom says the primary metric for measuring the validity or power of a national broadband plan is the speed of the wireline network to the most rural of residents," Levin is quoted as saying. "That way of looking at the problem is entirely wrong, is profoundly wrong -- almost every word in the sentence I just uttered is wrong. And we should've done a better job of explaining that."

If Levin could go back and rewrite the plan, landline and wireless technology would be framed synergistically, working in conjunction with each other to make a more complete telecommunications infrastructure that meets the National Broadband Plan's objective of expanding service availability to all Americans.

On this point, I agree with Levin. Until the last and middle miles of the U.S. telecommunications infrastructure can be fully upgraded to fiber, wireless has an important but interim role to play since it can be deployed more quickly than wireline plant. That's a very important consideration given that the FCC reported in late July that between 14 and 24 million Americans "still lack access to broadband, and the immediate prospects for deployment to them are bleak."

However, if Levin sees wireless connectivity as a replacement for fiber, I disagree. Wireless telecommunications is largely designed for mobile use and not to serve premises. Wireless also lacks fiber's ability to handle the exploding demand for bandwidth. There is no field-proven wireless technology that matches fiber's capacity to accommodate that growth.

As Tim Nulty, who believes fiber to the premises can pencil out even in rural areas, put it in a 2008 interview, fiber optic plant is to wireless as jumbo jets are to helicopters. "Think about 747s and helicopters,” Nulty told The Progressive magazine. “Helicopters are marvelous when they’re used for what they’re good at. But you don’t use them to fly thousands of people between Boston and Chicago. For that you need 747s.”

America's badly needed revamp of its telecommunications infrastructure should not be based on the expectation that wireless technology will overtake and render fiber wireline plant obsolete and cost ineffective. Hope is a good attitude, but does not a plan make.

Friday, October 22, 2010

Making fiber to premises a reality requires consumers to think like business owners

Much has been written on this blog and elsewhere about market failure and the urgent need for alternative business models to speed deployment of fiber to the premises telecom infrastructure. Most of it has been centered on market economics and technology.

However, a fundamental change in thinking must occur if these alternative business models are to come to fruition and bring the services people need now and in the future as bandwidth demand grows exponentially. People must think of themselves as not just consumers but also as owners.

Consumer cooperatives were formed in the U.S. a century ago to provide voice telephone service where investor owned telcos could not make a business case to provide service. Now that the telephone network is being replaced by the Internet, the time is at hand for the revival of this business model.

While coops offer significant structural cost savings that can make the business case pencil out for deploying an open access fiber to the premises network, those advantages cannot be realized until consumers think of themselves not just as a consumers but also as a business owners since a coop is a business, albeit owned by its customers. Being an owner requires doing diligence and assuming some degree of risk and not just asking what the coop may be able to provide them personally and at what price.

Without this shift in thinking, consumers will continue to be at the mercy of the incumbent telcos and cable companies and what services they choose to provide (or not provide as is often the case) and forced to pay whatever they want to charge for them in order to earn a return for their shareholders. Rather than benefit remote shareholders who could care less who gets fiber to the premises in their communities, it's time for consumers to say "enough" and take control of their telecommunications service.

Monday, October 11, 2010

Burgeoning telecom bandwidth demand emulates Moore's Law

In 1965, Intel co-founder Gordon E. Moore successfully predicted semiconductor processing power would double about every two years. A trend similar to Moore's Law is now occurring in fiber optic capacity. And just in time as this New York Times article notes, pointing to burgeoning demand for Internet bandwidth:

The need for core network improvement is pressing, said Stojan Radic, a professor of electrical engineering at the University of California, San Diego. “We are looking at a point soon where we cannot satisfy demand,” he said. “And if we don’t, it will be like going over a cliff.”

Demand is continually growing, somewhere below street level, as details of our e-mail, bank balances and national security zip along on light waves. And consumers can’t get enough video clips on YouTube, television shows on Hulu, and movies streamed to them by Netflix that they watch on their computers and TVs.

This has implications for telecommunications services, which in theory could deliver a better Internet experience and new applications with far more bandwidth. While technological advances will allow more bandwidth to move along the fiber of the Internet backbone and middle mile distribution networks, this increased capacity hits a major bottleneck at the so-called last mile that connects to customer premises.

This segment of the network is still largely made up of metal wire designed for the single purpose of delivering analog phone service or cable TV. The business models of the telcos and cablecos don't allow them to make the capital expenditures necessary to upgrade the last mile to fiber, creating an urgent need for alternative providers that can devise viable business models that can make the fiber connections for consumers.

Wednesday, October 06, 2010

Ratepayer advocate urges reform of California subsidy fund

The Division of Ratepayer Advocates (DRA) of the California Public Utilities Commission (CPUC) recommends an overhaul of the CPUC's California Advanced Services Fund (CASF). The fund was established in December 2007 to subsidize advanced telecom infrastructure in high cost unserved and underserved areas of the state. Up to $100 million was allocated from a 25 percent surcharge on intrastate long distance calls, with the CASF surcharge offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service.

DRA's Sept. 13 petition was filed 12 days before California Gov. Arnold Schwarzenegger signed into law urgency legislation that would extend the CASF to 2013 and appropriate an additional $125 million to the fund.

DRA wants the following reforms implemented:

• Transparency. Applications for CASF funding should be open to the public and subject to a public comment process.

• Affordability/Adoption. The program should cap monthly rates at affordable levels for at least two years, prohibit installation or connection charges, and require funding recipients to demonstrate how they will ensure that customers adopt and can afford their broadband offerings.

• Speed. The CASF minimum speed should mirror the FCC's 4/1 standard except in rare cases.

• Cost control. CASF projects should not exceed benchmark per-household costs based on what it costs in the market to install broadband.

• Open access. The Commission should require all CASF recipients to share their networks with third party providers.

• Audits. The Commission should audit each CASF funding recipient and allow public access to audit data.

DRA's petition can be viewed here.