The Economist: Why LTE can't substitute for fiber

Some believe the Internet will become untethered over the last mile and point to cutting edge wireless transmission technology known as LTE or 4G. The two biggest telcos in the U.S., Verizon and AT&T, are rolling it out (or are about to in the case of AT&T.)

But it won't be able to replace the nation's aging copper cable infrastructure that has grown increasingly difficult and costly to operate reliably. Nor is it likely to provide sufficient capacity for future growth in bandwidth demand -- something that Verizon and AT&T are acutely aware having faced growth pains and capacity constraints with their current generation of 3G wireless.

The Economist explains why:

Already LTE has shown itself good for at least 5Mbps—impressive for a mobile technology still in its infancy (see “Generational change”, December 3rd, 2010). But with peak speeds of 1Gbps theoretically possible, LTE’s next iteration should make downloads of 100Mbps over the airwaves a matter of routine. Developments beyond that could lead to near-gigabit speeds.

Of the two, though, a fixed link like fibre remains the better bet. Sooner or later, even a 4G wireless protocol such as LTE or its country-cousin WiMAX will become overwhelmed by the exponential growth of mobile traffic. By contrast, an optical link to the home could use a multitude of different wavelengths to boost throughput almost indefinitely.

Network World also weighs in:

So the next question about wireless broadband as a substitute. Recall that according to the U.S. Government Centers for Disease Control and Prevention (CDC), 1 in 4 homes has cut the legacy wireline phone cord in favor of wireless-only voice. Could we see wireless substitution rates that high for broadband access? We think not because radio spectrum is a limited resource, and unlike wireless voice networks that have plenty of spectrum to manage voice calls, if 25% of broadband users shifted from wireline access, the demand for wireless broadband would likely exceed available spectrum given today's technology.

The post-broadband era begins

As 2010 draws to a close, we are also seeing the closure of a chapter of the early Internet era and the beginning of a new one. The first chapter opened in the early 1990s when the few people who connected to the Internet did so with narrowband "dial up" connections using the Public Switched Telephone Network (PSTN). By the end of that decade, dialup evolved from 1200 and 2400 baud connections to 56Kbs connections as well as ISDN offering Internet connections of up to 128Kbs. At the same time, "broadband" began emerging with DSL and Internet services offered by cable companies.

We are now beginning a new chapter where throughput speeds that defined an Internet connection will be less relevant than the services and applications people use when they access the Internet. If the connection can't support them, it no longer will be considered bona fide Internet-based service. From a practical standpoint, that means dialup and satellite connections are now obsolete since they cannot provide end users a full Internet experience due to the inherent physical limitations of their technologies.

Also being rendered obsolete as bandwidth demand grows exponentially, particularly with the explosion of video content and mobile Internet:

-- The U.S. Federal Communications Commission's definition of a "broadband" Internet connection as 4Mbs down and 1Mbs up.

-- The term "broadband black hole" and dubious efforts to "map" these locations. These areas will simply be regarded as disconnected from the Internet, similar to the "off the grid" term applied to those locations lacking electric power service.

FCC ruling heralds regulatory end of "broadband" era

The U.S. Federal Communications Commission's decision this week barring providers of fixed premises wireline Internet connectivity from selectively rationing (or blocking) bandwidth based on the source and/or content marks the regulatory beginning of the end of the "broadband" era. Whereas broadband once defined a premium telecommunications service offered at a premium price, the FCC is effectively declaring that an Internet connection is an Internet connection regardless of what information or content consumers receive from it. ISPs cannot devote greater bandwidth to some information or content (for example, their own proprietary content) while affording less bandwidth to other information or content.

This is the right decision that recognizes the Internet as a de facto common carrier telecommunications network similar in that regard to traditional voice telephone service. The large national legacy telcos and cable companies warned before the FCC adopted the ruling that it would discourage capital investment in their infrastructures, which the FCC noted early this year continue to leave an estimated 7 million U.S homes offline.

There's no evidence the business case for more network investment by the large national legacy telcos and cablecos would have been improved had the commission come down on the other side of the issue. Their business models are constrained by the need to pay their shareholders generous dividends as they have done for decades and by high labor costs to modernize and build out their plants outside of densely populated urban and suburban areas.

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.

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.

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.

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.

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.

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.

"Opening the pipes" isn't a feasible or global solution to America's rotten telecom

Scientific American joins The Economist and other publications in describing the current state of next generation Internet protocol-based telecommunications service in the U.S. -- commonly known as broadband -- as "awful" in an editorial this week. Scientific American's solution also mirrors those proffered by others: using the force of law to compel investor-owned telcos to allow service providers to buy access to their systems.

There are a couple of big problems with this. First, as long as the fiercely protective and territorial telcos own the infrastructure or "pipes" as they were termed several years back by then-AT&T honcho Ed Whitacre, they will be in charge of who gets to sell services over them and at what price. And one can be assured the telcos will litigate the issue to death for decades if necessary to slow down the process as they did following the Telecommunications Act of 1996.

Second and perhaps most importantly, this is not a global solution to what ails U.S. telecom infrastructure. The reason: the so-called "pipes" don't even run through much of America, forcing residents to use outmoded, early 1990s era dialup or lousy, relatively low value satellite Internet connections. Additionally, in the majority of the nation, the pipes to the extent they are comprised of aging copper cable to will soon be obsolete and unable to transport the exponentially growing volume of digital content. They need to be changed out and replaced with fiber optic cable in order to accommodate future growth.

Blair Levin stuck in the failed paradigm of investor owned telecom infrastructure

Blair Levin, who exited as executive director of the Omnibus Broadband Initiative at the U.S. Federal Communications Commission in May to become a fellow at the Aspen Institute, has penned a white paper issued last week by the think tank calling for retasking the Universal Service Fund (USF) from subsidizing basic telephone service in high cost areas to defraying the cost of deploying advanced telecommunications infrastructure.

Specifically, Levin advocates $10 billion in USF funding subsidize infrastructure capable of supporting the FCC's current minimum throughput standard of 4 Mbs down and 1 Mbs up to nearly all premises by 2020. Levin also proposes using USF funding to support "the adoption of broadband by low-income Americans and other non-adopter communities."

Levin's paper is based on some fundamental flaws. Levin has confined his thinking to the investor owned telco paradigm whose market failure is responsible for the inadequate, incomplete and outmoded telecom infrastructure that plagues much of the United States today in rural, quasi rural and metro areas. This infrastructure needs a massive revamping and it won't happen with just $10 billion in USF subsidies. In an interim report on its National Broadband Plan released in September 2008, the FCC estimated it would cost as much as $350 billion to build next generation telecom infrastructure to serve 100 million American homes. Ten billion dollars by comparison would barely make a dent.

This isn't to argue for much larger USF subsidies to telcos. Instead of appropriating $10 billion to subsidize infrastructure that will be obsolete well before 2020, the U.S. should face the fact that incumbent investor owned telcos simply can't afford to deploy the next generation of Internet protocol-based telecommunications infrastructure in a timely manner. The business case just doesn't pencil out. AT&T essentially conceded this point in a Dec. 21, 2009 filing with the FCC, pointing to the "enormous" amount of capital necessary to complete the build out of required infrastructure to ensure all Americans have access to IP-based services just as basic telephone service is nearly universal.

Instead of Levin's failed private market model, the U.S. instead should support policies that treat advanced telecommunications infrastructure as a public infrastructure like roads and highways such as advocated by Andrew Cohill and others. Allowing the private sector to attempt to build this vital infrastructure is economically untenable.

Levin's proposed use of USF monies to support "adoption of broadband by low-income Americans and other non-adopter communities" unfortunately amplifies a cynical canard advanced by legacy telcos and their astroturf groups. The unstated goal is to lower expectations and keep the calendar fixed in 1999 when Americans were just beginning to adopt "broadband" and "high speed" Internet access in personal computing. The Internet protocol-based infrastructure America needs now and in the future isn't just about computers connecting to the Internet for email and viewing web pages. It will support voice, video, teleconferencing, telework, telemedicine and uses that haven't yet been conceived.

Time to relegate "broadband" to the history books

The term "broadband" is outdated and should be retired.

It came into wide use a decade and a half ago to denote a premium telecommunications service on the publicly switched telephone network (PSTN) that provided a faster, "always on" Internet connection compared to now obsolete "narrowband" dialup and ISDN service.

The Internet is now a de facto global telecommunications system providing Internet protocol-based voice and video communications in addition to early "broadband" fare of email and the World Wide Web.

Instead of broadband, we should simply refer to the Internet. The term "broadband' is out of place in the context of today's "Internet ecosystem" to borrow a phrase from the Federal Communications Commission's National Broadband Plan issued in March. (Which should be retiled the "National Internet Plan")

References to "broadband" also pose problems insofar as they spark debates over what bandwidth and speeds constitute "broadband." Its continued use also aids legacy telco and cable industry players who want to keep it around so they can incrementally charge a premium for "broader" bandwidth.

The incumbent legacy providers also like the term "broadband" because it keeps the calendar where they want it: around 1999 when the phrase meant only Web and email — and not the bandwidth intensive applications we're seeing in 2010 that their incomplete and outdated infrastructures are unable to deliver to all customers in their self proclaimed "service areas."

It also helps the incumbents conjure up (and dust off old) self serving studies purportedly showing many folks don't "adopt" broadband because they have little interest in the Web or email. Ergo, it's not critical telecommunications infrastructure should be available to all homes and businesses when in fact it should be.

It's time to say "bye" to "broadband."

Richard Florida still doesn't get it

Richard Florida apparently hasn't gotten the memo that information-based work -- performed by what Florida calls the "creative class" -- isn't bound by geography in the Internet age.

In a post on The Atlantic blog this week titled Where the Creative Class Jobs Will Be, Florida wrote as follows:

The good news is that creative class jobs will continue to grow and provide high-wage, high-skill employment for a large and significant share of the American workforce. It's important to recognize that not all of these jobs require college degrees. Though nearly three-quarters (72 percent) of college graduates go on to do this kind of work, four in 10 creative class workers do not hold college degrees, according to analysis by my colleagues at the University of Toronto's Martin Prosperity Institute. The bad news is that creative class jobs will be geographically concentrated. (Emphasis added)

Wrong. The bad news is Florida is still thinking inside the box of a pre-Internet world where creative work could only be done in office buildings in metro areas.

Suck a bigger, faster satellite!

Satellite companies have been the also-rans of Internet providers. They serve a little more than one million customers, most in rural areas that have no other options. Their services can be painfully slow and cost twice as much as high-speed broadband. But two companies, WildBlue and HughesNet, are now in a race to change all that.

Both plan to launch satellites in the next couple of years that will dwarf their predecessors in space. WildBlue’s alone will have 10 times the capacity of its three current satellites combined. Such behemoths, the companies say, will enable them, at prices similar to what they now charge, to provide Internet service at speeds many times faster than they now offer — as fast, in some cases, as fiber connections.

Further, the companies argue, satellites can provide service more easily and cheaply per subscriber than their earthbound cable and phone company competitors, particularly to the 14 million to 24 million Americans who live in areas without broadband service.

Read more of this New York Times story by clicking here. (Registration required)
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This is a crock and a travesty. Internet protocol based services via satellite will never measure up to terrestrial fiber telecom infrastructure and should never be offered anywhere outside of the polar and most remote regions of the globe.

The mere fact that satellite Internet connectivity is sold anywhere in the lower 48 United States is and should be regarded as a national embarrassment showing the rest of the world how far behind the information technology curve the nation has fallen.

Memo to HughesNet and Wildblue: sell your new and improved services to SETI (Search for Extraterrestrial Intelligence) in order to allow off world intelligent life to connect to the global Internet.

FTTH Council prematurely buries open access networks

In a recent filing with the U.S. Federal Communications Commission, the FTTH (Fiber to the Home) Council is urging the FCC avoid placing Internet protocol-based telecommunications services under common carrier requirements of the Title II of the Communications Act of 1934.

In its 87-page filing, the FTTH Council contends doing so would inject a large degree of business uncertainty into what's arguably an already tenuous for profit business model and discourage private investment in the build out of fiber networks.

The FTTH Council also worries that the FCC's placement of IP-based telecom services under Title II would lead to the FCC declaring such services a monopoly -- not a hard stretch considering that high CAPEX costs make fiber networks natural monopolies. Once it has done so, the FCC would then require private companies to share its fiber facilities as phone companies were required to do with DSL under unbundling rules until the FCC reversed that policy in 2005 by deeming DSL an information service rather than Title II telecom service. Also once the FCC formally finds wireline telecom a natural monopoly, the FTTH Council warns, price controls will be put in place, further clouding the business case for for-profit providers.

Another more disturbing part of the filing beginning at page 19 effectively asserts that if the FTTH business case can't work in the context of a regulated monopoly for investor owned FTTH providers, then it can't pencil out for open access nonprofit municipal or other community-owned fiber networks either. The FTTH Council's filing quotes Tim Nulty, former manager of the Burlington, Vermont muni fiber network, as dismissing the open access wholesale model in which network owners sell access to service providers as "a recipe for financial failure."

But in a footnote on p. 19, the FTTH Council lauds closed proprietary (non open access) muni fiber networks as playing an important role where legacy incumbent providers aren't meeting community needs. Moreover, the organization notes, open access community networks require subsidization. Well of course they do. So do investor owned networks in areas where it's difficult to make a business case for deploying fiber given the slow return on investment.

My impression is the FTTH Council is jumping the gun. It's far too early to pronounce open access fiber networks unworkable as the U.S. searches for a sustainable business model alternative to address market failure among legacy telcos and cablecos that has spawned innumerable broadband black holes across the nation.

Open access can work if people truly regard fiber infrastructure as a community asset like roads and other public infrastructure, recognize its importance to a community's economy by making it far easier for information-based businesses to operate and workers to telework at distant jobs. And most importantly, having a willingness to pay for that infrastructure in recognition of its inherent value.

Solar storm could hit GPS and satellite broadband

Another reason not to be suckered in to sucking a satellite....

Internet access is the new dial tone, but millions of Americans are disconnected

Three years ago, then-U.S. Federal Communications Commissioner Jonathan S. Adelstein called on the nation to make broadband "the dial-tone of the 21st Century."

Adelstein's characterization is correct. Today, the Internet is the telecommunications network. Those who don't have access to it are disconnected and isolated.

The Huffington Post has posted a summary of Akamai Technologies' State of the Internet" report for the first quarter of 2010 showing which states are the most offline. (Hat tip to Jason Wilson) It wouldn't surprise me if these states find it toughest to help boost the nation out of a deep economic contraction, being sidelined in an increasingly Internet-based economy.

The governors of these (and other) states should ask the Obama administration to create a Work Projects Administration-like entity to embark on a crash program to construct locally owned and operated fiber networks to serve all Americans where they live and work. Achieving this goal is a stated administration policy. Moreover, given the administration's projected multiplier effect of a project like this in terms of job creation and economic activity, it could well end up being revenue neutral when increased tax revenues are factored in.