FCC Expands CAF Definition of Broadband Subsidy-Eligible Areas - 2013-05-22 22:48:29 | Broadcasting & Cable

FCC Expands CAF Definition of Broadband Subsidy-Eligible Areas - 2013-05-22 22:48:29 | Broadcasting & Cable

Summed up, this subsidy program designed to underwrite the cost of building telecommunications infrastructure in high cost areas is ineffective.  Telcos won't apply because they don't want to fully serve these areas and complain the subsidy amounts are too low.  And even if they did want the money, they have to fight cable companies ineligible for the funding (derived from a surcharge on telephone bills) that claim the telcos are upgrading their infrastructures in order to steal their customers.

This circumstance only adds to the argument that communities and particularly those with lower population densities can't expect legacy providers to serve them.  They must build their own publicly and cooperative owned and operated fiber networks.

Light Reading - Google Fiber's Future Looks Limited

Light Reading - Google Fiber's Future Looks Limited: Google is destined to remain a small player in the broadband service market, unable to dislodge cable companies such as AT&T Inc. and Comcast Corp., according to analyst Dexter Thillien of IHS iSuppli.

Outside of a few select metro areas, the costs and risks get too high for Google Fiber's 1Gbit/s broadband service, Thillien writes in a report issued Tuesday.

IHS is not the first to warn against expecting Google to light up fiber across the nation. Last month, analysts at Alliance Bernstein said in a report that they remained "skeptical that Google will find a scalable and economically feasible model to extend its build out to a large portion of the U.S., as costs would be substantial, regulatory and competitive barriers material, and in the end the effort would have limited impact on the global trajectory of the business."

These analyses affirm recent posts on this blog casting doubt on the irrational exuberance of some who believe Google is going to overbuild metal wire-based incumbent telephone and cable company footprints with fiber.  It might make sense on the surface as somnolent incumbents have placed their wireline plant into "harvest" mode (in the case of the cablecos) and runoff mode (telcos).

But as deep as its pockets are, Google simply can't afford anything other than one off, opportunistic builds. And the incumbents can't undertake massive fiber infrastructure CAPex using grandma's shareholder dividend.  As I've been saying for several years, that leaves it up to communities to build their own municipal or cooperatively owned fiber networks.

Verizon Hopes to Nudge Some From Wired to Wireless - NYTimes.com

Verizon Hopes to Nudge Some From Wired to Wireless - NYTimes.com

This story illustrates why communities must build their own fiber networks.  The incumbents like Verizon aren't going to do the job.  As the story notes, that leaves residents and business owners with lousy options:  poor voice quality over garbled wireless premises phone service that can go out in a prolonged power failure and data capped satellite Internet service.

Former FCC Chairman and GTCR Fund See Strong Rural Cable Future

Former FCC Chairman and GTCR Fund See Strong Rural Cable Future: Former FCC Chairman Reed Hundt hopes this week’s acquisition of tier 2 cable company NewWave Communications by investment firm GTCR will be “the first of many.” Telecompetitor spoke this week with Hundt, who headed up the FCC during the Clinton administration and is now an advisor to GTCR.“We believe cable is the universal American communications medium,” said Hundt. “Cable is the essential connection for everyone, especially in rural America.”

 The Telecompetitor article continues:

GTCR’s strategy is interesting, considering that service providers have had difficulty finding a business case for deploying broadband in some rural areas – particularly as distances from population centers increase.

When I asked Hundt about that he said, “Technology keeps producing breakthroughs.”

Indeed it does.  But has it reduced the labor costs associated with deployment and maintenance of wireline Internet infrastructure, which rule of thumb estimates place at about 70 percent of the total?  I haven't heard of of any such technology breakthroughs unless Hundt is talking about using drones to spool and drop cable from the sky and robots to bury and install it on poles.

AT&T CEO: We'll piggyback on Google's Fiber rollout plans | Mobile - CNET News

AT&T CEO: We'll piggyback on Google's Fiber rollout plans | Mobile - CNET News

More mutually assured diminished returns threatened by AT&T.  Ma Bell is basically saying she will overbuild Google to obtain a slice of picked over cherry pie, leaving each competitor serving 15 percent of the premises passed at best.

This should put to rest the hopeful, magical thinking of some who claim Google is somehow going to goad legacy telcos to undertake a broad-based upgrade of their obsolete last mile copper plant to fiber.  Not in this lifetime and not with grandma's shareholder dividend.

Businesses Lining Up for Service in Longmont, FTTH Build-Out Studied | community broadband networks

Businesses Lining Up for Service in Longmont, FTTH Build-Out Studied | community broadband networks: If LPC wants to pursue a triple play offering, Uptown estimates it would cost another $6 million. At this point, LPC does not consider triple play a good investment:

"The young generation that's active now, they don't watch TV in the conventional way," Jordan said. At a recent presentation, he said, when he asked a college student how often he watched traditional scheduled TV programming, the response was "Never."

The implication here is the subscriber television channel Internet service offering is losing its appeal going forward with the changing viewing habits of younger adults.  This is a potentially huge disruption of the current business models of both incumbent cable providers and telcos offering TV in service bundles like AT&T's U-Verse product.  It's also very disruptive of the TV advertising business model that has traditionally targeted younger adults.