Saturday, April 23, 2011

AT&T exec suggests wireless will save its residential market segment

AT&T may be the nation's largest telecommunications company. But its size hasn't helped it meet the challenge of upgrading its cable plant to transport Internet protocol-based services. AT&T provided wireline Internet connectivity first through dial up and ISDN connections in the early 1990s, and then DSL as the 1990s turned into the 2000s. Starting in 2006, AT&T brought fiber closer to customer premises -- but not to them -- with its FTTN (Fiber to the Node) U-Verse service utilizing VDSL. Some new, dense greenfield developments received U-Verse service via direct fiber to the premises connections.

New home construction cratered shortly after U-Verse rolled out, leaving only more challenging FTTN brownfield opportunities. They are more challenging because the old cooper cable plant designed for POTS (Plain Old Telephone Service) is used to carry high compressed VDSL signals that quickly degrade with distance, limiting the size of the potential U-Verse customer base.

Faced with these challenges to reach customer premises and seeing strong growth on the wireless side of its business, AT&T not surprisingly sees its future in the wireless space. "The future is wireless broadband and we must keep that in front of us at all times," Tim Ray, executive director for AT&T External Affairs in Northern California, said at a recent roundtable discussion hosted by Sacramento-based Valley Vision.

In 2010, Valley Vision formed the Connected Capital Area Broadband Consortium (CCABC), a coalition "which seeks to identify and coordinate strategic broadband investments in the six-county Sacramento region aimed at improving broadband infrastructure, access and adoption." Ray, who sits on Valley Vision's board of directors, appeared to suggest wireless Internet connectivity will be able to substitute for wireline connectivity, noting "27 percent of homes no longer have wire line and this trend will continue to grow."

Ray's wrong and engaged in wishful thinking. There's currently nothing indicating wireless Internet service -- which is aimed at mobile devices with a low bandwidth allocation per customer  -- can provide sufficient capacity to handle burgeoning bandwidth consumption and be able to reliably deliver to customer premises high definition video content and applications like video conferencing and telemedicine. Indeed, AT&T's wireless infrastructure is already choked with far lower bandwidth traffic from devices such as the iPhone.

AT&T is in conflict with its own business model. It's in the telecommunications business which by its nature requires lots of CAPEX and OPEX. But it expects to get a full ROI within 5 years on its CAPEX. That's not going happen in most places except perhaps in new dense greenfield developments, which as previously mentioned also aren't happening.

Thursday, March 24, 2011

More patient capital the key advantage of community telecom infrastrucuture

Craig Settles explains the advantages of community fiber telecom infrastructure in this Government Technology piece.  The key advantage over investor-owed infrastructure can be summed up in three words: more patient capital.  Telecom infrastructure built by local governments and cooperatives doesn't need a return on investment in just 3-5 years -- an inherent flaw of the investor-owed business model given the high capital cost of constructing and operating it. 

Settles correctly notes there is money to be made for private players -- if they are willing to partner with communities in open access fiber projects and abandon the outdated business model of 100 percent ownership and monopolistic control.

Saturday, March 19, 2011

Communities must build fiber telecom infrastructure where incumbents cannot

As bandwidth demand grows exponentially for Internet protocol-based telecommunications, Geoff Daily aptly notes the debate over what infrastructure can best deliver it to customers is over. Only fiber can do the job, he writes on his blog App-Rising. The task, therefore, is to bring it to their doorsteps. "With this context we can now define fiber-to-the-home as bringing the full power of the Internet to your front door," Daily writes.

Indeed. Daily adds to get there, public policymakers and consumers must be educated on the significance of fiber telecom infrastructure. And we must end the useless demonizing of for-profit providers whose business models don't allow them to both bring fiber to consumers' premises and make money for their investors. Don't expect them to do something they can't.

Instead, I would add, consumers must find alternative business models to build vital fiber-based telecommunications infrastructure in their communities not served by investor-owned providers. I'm not just talking the talk here. I'm walking the walk in my own community. I encourage other communities to do so as well.

Saturday, February 19, 2011

Obama administration should focus on community-run open access fiber, not 4G wireless

The Obama administration's recent announcement of its National Wireless Initiative to subsidize the build out of 4th generation (4G) wireless Internet to make it available to least 98 percent of Americans appears based on the assumption that cutting edge wireless telecommunications technology can play a central role in the nation's telecom infrastructure.

I'm not convinced. 4G wireless is only just emerging and remains unproven in terms of whether it can deliver sufficient bandwidth at the same time bandwidth demand is increasing exponentially. It's primarily designed for mobile use and portable devices such as smart phones and IPads that are gobbling bandwidth at such a prodigious rate that providers have a difficult time meeting the demand. That's why they ration bandwidth and penalize wireless customers who use more than 5 GB per month. The rationing is due to a more basic telecom infrastructure problem: the lack of adequate wire line infrastructure to "backhaul" or feed the distribution system that supports that huge and growing universe of wireless devices.

The administration's wireless initiative seems to suggest that people can "cut the cord" for Internet access just as they have done for wire line voice service, which requires far less bandwidth. 4G wireless, the administration apparently believes, can provide access to medical tests, online courses and applications that have not yet been invented.

That remains to be seen. What is certain now is wire line fiber optic connections to American households and businesses can deliver more than enough bandwidth for today's needs without the need for rationing plus plenty of additional capacity for those yet to be invented applications. The administration's telecom infrastructure efforts should focus on bringing it to the 24 million Americans that Federal Communications Chairman Julius Genachowski said remain disconnected from the Internet. "The infrastructure simply isn’t there," Genachowski explained.

The reason: It's simply not sufficiently profitable for investor owned providers to build it. Alternative, lower cost methods are urgently needed. The best and most rapid way to bring about these alternatives is to focus at the local level and provide local governments and consumer telecom cooperatives technical assistance grants and low cost loans to build open access fiber networks to serve their communities.

The administration's health care reform legislation allocates $5 billion in technical assistance grants to for new health insurance cooperatives to pool risk and purchase health coverage for their members. The administration should provide a similar amount of technical assistance funding for local governments and telecom cooperatives to help them plan and design open access fiber optic telecom networks.

Friday, February 18, 2011

Virtual workforce requires robust telecom infrastructure

While a recent survey found that less than 4 percent of U.S. private sector workers actually work from home, that figure could reach as high as 30 percent by 2019, according to TechCast, a George Washington University–based virtual think tank.

What's behind this coming workplace revolution? Quite simply, "work" no longer needs to be defined as a place you go. We're witnessing the emergence of a next generation workforce that is always-on and hyper-connected via broadband, with a proliferation of connected devices and access to on-the-go Internet-based applications and cloud-based services that make working from anywhere possible.

The above excerpt from a Reuters article goes on to point out various pluses of telework including reduced carbon emissions from less commuting and mutual benefits for employers (better productivity, lower office costs) and employees (greater work/life balance and job satisfaction). While not mentioned specifically, improved work/life balance could also yield big benefits in lower health care costs by freeing up time for exercise that would otherwise be spent commuting to and from the office.

In order for the virtual workforce to become a reality, workers will need advanced telecommunications infrastructure at their doorsteps that can support videoconferencing and other interactive applications. That means fiber optic connections offering symmetric upload and download speeds and scalability for future growth that is generally not offered by incumbent telco and cable companies.

Monday, February 14, 2011

Satellite Internet provider targets U.S. exurbs as growth market

The notion that being disconnected from the Internet is a problem largely confined to rural areas isn't true. The latest evidence comes courtesy of Arunas Slekys, vice president of corporate marketing for satellite Internet provider Hughes Network Systems.

Slekys told The Washington Post that Hughes' best growth prospects aren't necessarily deep rural America but the outer rings of metro areas where telcos and cable companies haven't built out their wireline infrastructures to provide premises Internet connections. "These aren't people sitting on a mountainside in Idaho," Slekys told The Post. "They're actually exurban. You can go 20 or 30 miles outside of D.C. and there are a lot of areas where you can't get terrestrial broadband."

Indeed. Ditto for other metro regions of the United States. Living in the exurbs often means no Internet, which won't help property values recover in despite their typically upmarket homes.

Slekys makes a excellent point about the extent of the problem in the U.S. But his company's solution is, frankly, not a solution. Even on an interim basis until terrestrial infrastructure is constructed to serve these offline areas. Satellite Internet connections are notoriously sluggish due to the high signal latency caused by the 46,000 mile round trip to the satellite and back to the Earth's surface and are prone to frequent drop outs. Then there are the dreaded FAPs, aka Fair Access Policies. This fine print in satellite providers' contracts allows them to slow your connection to dial up speed -- often for days on end -- if the connection is used too much or for applications that use a lot of bandwidth such as video.

So those of you in the offline exurbs, forget about streaming Netflix films on a satellite connection unless you want to spend some time in FAP jail with your Internet connection slowed to a crawl. And if you're an executive who lives in an upscale exurban property or a small business owner/consultant, forget about using your satellite connection to videoconference with your offices or to exchange large files. The connection isn't sufficiently robust and stable to support it.

Sunday, January 09, 2011

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.

Friday, December 24, 2010

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.

Wednesday, December 22, 2010

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.

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.

Tuesday, October 05, 2010

"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.

Sunday, October 03, 2010

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.