Resolution Seeks High-Speed Internet For All Putney Residents | Vermont Public Radio

Resolution Seeks High-Speed Internet For All Putney Residents | Vermont Public Radio: “The governor made us a promise at town meeting here last year that he would get everything wired 100 percent, no ifs, ands or buts,” Field says. “I’ve got the quote.”

Instead, area lawmakers got an earful from residents who say they’re tired of hearing that Putney already has Internet service.

"Close to 300 of us in Putney only have dial-up," says Field. "In my case I pay $80 a month to Hughes.net. Can’t Skype, can’t stream anything. My wife’s a pediatrician in town. She can’t do her electronic medical records."

Nancy Braus says people on her road are getting Internet from Comcast or Fairpoint. But not her house. Braus has a daughter who’s deaf.

A couple of observations on this story:

• It's an example of the blow back politicians face after years of promises to address deficiencies in premises wireline Internet service with little or no tangible results.
• Ms. Braus's comment illustrates the highly granular nature of broadband redlining that renders government subsidy programs based on mapping and funding only "unserved" and "underserved" areas impractical. One address is offered service by incumbent wireline providers while another nearby premise is not.

U.S. Internet policy fails expectation of universal premise service

For nearly every American who has been alive since the end of World War II, the availability of telephone service at a home or business premise is taken for granted. Need a phone line or several lines? Contact the phone company, order them and they’ll get hooked up.

With wireline premises Internet service, it’s been a very different story. According to the U.S. Federal Communications Commission as of 2012, 19 million Americans couldn’t order an Internet connection because none was available for sale. Some of those Americans live in California’s Gold Country, located in the western foothills of the Sierra Nevada. And they can’t understand why if people in Sacramento -- or in many cases just down the road -- can get wireline Internet service, why can’t they? Plus they hear messages like this one that only five percent or fewer premises are unserved and have a hard time believing their home or business is one of them, particularly when nearby premises do have service.

It’s therefore unsurprising that “[m]any residents without access feel a sense of entitlement to broadband (Internet) service,” according to the Gold Country Broadband Consortium’s annual progress report. The consortium is among 14 regional consortia formed by the California Public Utilities Commission in 2011 to promote local Internet access and adoption of Internet-delivered services.

Unfortunately, neither California as the largest state nor the nation as a whole has a public policy to meet the expectation that Internet service in 2014 should be as ubiquitous as telephone service. Nor as the case with telephone service is there a workable subsidy program to ensure high cost areas are served.

California screamin: Internet policy quagmire fosters failure

Plan for rural broadband collapses | The Press Democrat
This story illustrates the real world consequences of what happens when legacy incumbent wireline Internet providers control government subsidy programs designed to help cover the cost of deploying Internet infrastructure. They refuse to accept the subsidies themselves for high cost areas and lobby to influence the eligibility rules so that others can't easily qualify for funding.

These comments in the story from Cathy Emerson, manager of two consortia involved in expanding Internet access and Mitch Drake, head of the company that applied for subsidy funding from the California Public Utilities Commission, sum up the sorry situation:

“We're looking at a significant Catch-22,” Emerson said. “The federal
and the state programs are trying very hard to make use of legislative
moneys that have been collected, intended to be used for broadband
deployment. And yet the very language of the legislation has been so
effectively edited to the favor of the incumbents that it's extremely
difficult to try to offer services to these rural-most pockets.”

“I call this the great stalemate,” said Drake. “There's a huge need in
Northern California, and we've got a program that was designed to take
care of the need, and we've got incumbent carriers who made this
financial decision, for one reason or another, not to serve these rural
communities. But at the same time they are the biggest opponents,
preventing anyone from doing anything about it.”

It's going to get even harder for non-incumbent providers and local governments to qualify for the CPUC's California Advanced Services Fund network construction subsidy dollars in this year's funding round under revised rules recently adopted by the CPUC. Steve Blum has the depressing details in this blog post.

Slow broadband wipes 20% off house prices - Telegraph

Slow broadband wipes 20% off house prices - Telegraph: Slow broadband speeds can wipe as much as 20 per cent off the value of properties and lack of superfast connectivity in an area can be a dealbreaker in house sales, property experts have said.

With growing numbers of people going online to perform tasks ranging from working to grocery shopping and streaming entertainment, good broadband has become critical.

Property search website Rightmove has now added a broadband speed checker to every one of its listings alongside factors such as quality of local schools and transport links.

It's only a matter of time before we'll see this spread to the United States where plenty of residential properties nominally in the service areas of incumbent telephone and cable companies nevertheless lack Internet connections.

Policy debate -- not market competition -- predominates in U.S. premises Internet infrastructure

In the United States, the major competition in last mile wired premise Internet infrastructure is playing out in the public policy arena more than in the marketplace. In order to have market competition, there has to be a market. In many areas, there isn’t one. Those looking to purchase wired premise Internet service cannot do so because no providers want to sell it to them. The basic definition of a functional market is willing buyers and willing sellers. Others want better value service and more options. Here again, the market fails. No providers are willing to make the necessary investment in order to sell better value services to them – the impetus behind many municipal Internet infrastructure projects.

Second, telecommunications infrastructure due to its high construction and operating costs excludes many potential providers. It’s what known as a natural monopoly or at best, a duopoly. Roads and highways are tremendously expensive and thus tend to be operated by one provider that can bear the large cost burden: the government. In a limited number of cases, a duopoly exists where motorists have the option of taking the public highway or a private toll road. By definition, there cannot be a competitive market, which is one made up of many sellers and many buyers.

Which brings us to the major ideological battleground over last mile wired premise Internet service: Whether it should be operated like a closed, private toll road or an open access public thoroughfare. Big money has joined the fight to bolster the latter position. Macquarie Capital Group, an Australian firm that invests in multi-billion dollar infrastructure projects around the world, is considering investing in UTOPIA, an open access fiber to the premise (FTTP) network serving 11 Utah municipalities. (See item here).

On the other side of the debate are the legacy incumbent telephone and cable companies that want to preserve their closed network models. As Community Broadband Networks reports, they are sponsoring bills in both chambers of the Utah legislature opponents say are intended to scotch a potential Macquarie investment in UTOPIA. In Kansas, the cable company lobby is seeking legislation that would add Kansas to the roster of 20 states that bar local governments from building Internet infrastructure projects to serve their citizenry.

Verizon CEO wrongly compares Internet usage to basic utility consumption

Internet Service Cost: Verizon CEO says heavy broadband users pay more | BGR: Are you constantly streaming high-definition video, downloading tons of Xbox One games and sending massive files to friends and family? You should pay more for Internet access than your neighbor, who only uses a 10-year-old PC in his living room to read email and occasionally browse the Internet for cat GIFs. This is the position of Verizon CEO Lowell McAdam, who said this week that heavy broadband users should have to pay more for home Internet access than those who don’t take full advantage of the service for which they already pay top dollar.

McAdam's logic would make sense if an Internet service was like that of other utilities such as electric power, water or natural gas. These are limited commodities that require some incentive to conserve their use so that they may be available to all who need them. That's why these utility providers use tiered billing schemes that tap into price elasticity -- the tendency to use less of a commodity as its price increases -- and create incentive to conserve via penalties for excessive consumption. There is no similar need to conserve Internet bandwidth. Someone who uses more of it does not impose higher marginal costs on Verizon or any other Internet provider to deliver that higher level of usage.

That said, McAdam is correct to expect that customers of its FiOS fiber to the premise service to help offset the capital and operating costs of the service. But treating bandwidth as a limited commodity when in fact it is not isn't the way to go about it. Instead of creating a false paradigm of bandwidth scarcity, McAdam and other industry leaders should endeavor to foster a mindset of bandwidth plentitude. Big bandwidth promotes more uses and applications of it, making it more valuable to households and businesses. And as those users realize that value, demand for fiber connections will grow, in turn increasing the value of the network under Metcalfe's Law and Verizon's investment in it. When it comes to the Internet, more is better -- not less.  What Verizon and other telecommunications companies should remember is they are not in the business of bundling and selling bandwidth. They are in the communications business.

Rural areas shortchanged in broadband Internet service - Paradise Post

Rural areas shortchanged in broadband Internet service - Paradise Post: Jim Moorehead is working with the Broadband Alliance of Mendocino County to get the service to that county's rural areas. He said there are about 16 other counties in the same boat.

"We're not critical of the big companies for not doing it," he said. "They've got a responsibility to their shareholders." Still, he said he would like to see more money going toward installing those services for rural areas.

When a ratepayer gets a bill, he is paying a lot of nickel and dime charges. One of those charges is the California Advanced Services Fund (CASF), which is money that goes into closing the "digital divide," Moorehead said.

"That fund can help close it," he said. "The problem is, the carriers are fighting it."

A lot of this going on in California. It costs too much for the legacy incumbent telephone and cable companies to provide Internet connectivity to all premises in their service areas, so the kids there end up marooned in broadband backwaters. The incumbents don't want the subsidies Moorehead mentions to offset the high costs -- or anyone else receiving them either.

In addition, the CASF utilizes outdated, speed-based standards to determine areas eligible for subsidies rather than setting a higher, goal-based standard such as universal fiber optic premises Internet connectivity. It's a perfect prescription for a race to the bottom in a state that has historically viewed itself as a leader.

How Google Fiber is revolutionary -- and how it's not

Google Fiber is revolutionary with the medium of its infrastructure: fiber all the way to the customer premise and the enormous headroom it offers to accommodate future bandwidth growth and new, high bandwidth services. This will allow Google Fiber to leap past the big incumbent national telephone and cable companies bogged down by their existing investment in wire cable infrastructure designed for a pre-Internet era. As Marshall McLuhan put it, the medium is the message. And the medium is fiber to the premise.

Google Fiber also has a revolutionary business model that lessens the pressure to get customer premises to subscribe in order to make the network economics pencil out. It allows customers to sign up for a low cost, multi-year, flat rate connection designed to cover the cost of connecting the premise. The big telcos and cablecos, by comparison, typically charge many thousands of dollars to connect a premise lacking access to a connection, with cablecos charging about $65,000 per mile.

Where Google Fiber's business model is not revolutionary is that like the big legacy incumbents, it is a closed "walled garden" that seeks to own the customer rather than an open access network that sells access to customer premises on a wholesale basis to those wanting to market services over it. This imposes major marketing costs to acquire subscribers one at at time, limiting Google Fiber to those areas where it can get a good return for its marketing and infrastructure investment.

Critics of this business model such as Michael Elling (featured in this video) contend it degrades the value of the network by limiting its ability to scale, invoking Metcalfe's Law -- that implies a network is only as valuable as the number of subscribers on it. Since fewer subscribers can connect to a limited, closed network, it becomes less lucrative in the larger scheme for those at the core providing Internet delivered services such as Netflix, Amazon and ironically, Google itself.

The rainbow rabbit leaps over incumbents: Google Fiber in diligence for expansion in 9 metro areas of U.S.

Google Fiber's announcement today that it is in diligence with local governments in nine metro areas of the United States for possible expansion of its proprietary fiber to the premise (FTTP) telecommunications infrastructure illustrates how a company that has been in the Internet business from the beginning can nimbly hop over legacy incumbent telephone and cable companies. The incumbents are weighed down by large investments in metal wire-based infrastructure and outmoded pricing structures that rely on creating artificial bandwidth scarcity and unit-based consumption. They must also satisfy shareholders who favor big dividends over capital investment in FTTP networks -- which explains why Verizon halted its FiOS FTTP product expansion in 2012. Finally, incumbents have sowed sour relationships with local governments that have asked for better service for their residents for years, making them likely to heartily welcome the Googlers.

What's also evident from today's announcement is Google Fiber's colorful hare won't likely be running to areas of the U.S. where it's needed most -- locales where homes and businesses lack wireline premises Internet service due to redlining by the incumbent providers.

Those areas will likely have to rely on municipal and cooperative fiber builds, although some investor-owned players could potentially offer them FTTP as in this rather counterintuitive circumstance in Mississippi. They can, however, benefit from Google Fiber's experience, adopting principles and techniques that lower costs and improve the economics of FTTP. These include prioritizing construction based on interest from potential subscribers and differential pricing models that include an option for basic, flat rate service at low cost for a limited period of time.

Netflix performance on Verizon and Comcast has been dropping for months | Ars Technica

It wouldn't be at all surprising if Netflix and Amazon stood in the way of government approval of today's announced deal for Comcast to acquire Time Warner Cable without a pledge from Comcast to treat all network traffic equally along with meaningful regulatory enforcement. This story graphically shows why:
Netflix performance on Verizon and Comcast has been dropping for months | Ars Technica

The major causes of U.S. premise Internet service policy quagmire

U.S. telecommunications policy for premises Internet connectivity is in need of reassessment and revamping. It severely limits the nation’s ability to ensure all homes and businesses have fiber to the premise Internet connectivity capable of serving both current and future needs as bandwidth demand continues to grow exponentially.
 

Call it the Levin quagmire, named after former U.S. Federal Communications Commission official Blair Levin. In 2012, Levin predicted little change in the status quo, noting for most Americans over the near term, the best wireline network available to them will be the same one they have now. According to the FCC, for about 19 million Americans that’s dialup, state of the art technology in the early 1990s when Bill Clinton was starting his first term as president.

Summed up, these are the circumstances and policies that have produced the current quagmire:

• There is an insufficient business case for legacy incumbent telephone and cable companies to invest in building out their networks to serve all premises in their service areas or to upgrade existing infrastructure to fiber to the premise service. Nevertheless, these providers generally don’t avail themselves of federal and state subsidy programs aimed at capitalizing the cost of Internet infrastructure.
  

• Federal subsidy programs such as the Connect America Fund are only available to telephone companies and not cable companies that are becoming the dominant premises Internet service providers over telephone companies that are instead concentrating their capital investments on mobile wireless markets.

• Legacy incumbent telephone and cable providers view their service territories as proprietary franchises. Consequently, they oppose the award of subsidies to alternative providers and lobby for subsidy program eligibility rules inappropriately based on mobile wireless service and outmoded and changing standards of Internet service. They also lobby for state laws that bar local governments from building and operating fiber to the premise networks or make it impractical to do so.

California should invest in modern telecommunications infrastructure, not high speed rail

Stanford University public policy professor Joe Nation makes an excellent point in this article on transportation infrastructure. Nation, a former California state legislator, notes high-speed trains work in densely populated areas (like the Boston-New York-Washington corridor, for example) and not states like California with large rural, quasi-rural and exurban areas.

In the evolving digital, information-based socio-economy (much of it innovated in Silicon Valley), the Golden State would likely be better off  investing in fiber to the premise telecommunications infrastructure. Particularly since market forces don't tend to produce meaningful private investment in premise telecommunications infrastructure in less densely populated areas that are in danger of becoming neglected backwaters left off the Internet. Putting this infrastructure in place would also enable these areas to more fully participate in the digital economy, reduce the need for commutes to metro areas and benefit from services such as telehealth and distance learning.

High speed rail might have been a suitable project had it been proposed three or four decades ago. What's needed today is ubiquitous, high speed Internet.

IP Transition Must Advance, CES Panel Says | USTelecom

IP Transition Must Advance, CES Panel Says | USTelecom: Meanwhile, AT&T has been eager to begin moving forward with the IP transition and last year proposed that the Federal Communications Commission begin trials to test the effects of a full network transition, said Bob Quinn, AT&T senior vice president-federal regulatory. The role for FCC is to oversee the "turning off" of the old network, Quinn said. "There will be an enormous amount of policy concerns involved in doing this, and we need to figure out what this new world will look like."

"We've reached the point where the IP network is superior to the old switched network," said Internet analyst and author Larry Downes. "The policy issue is what do we do about people who have not yet made the switch?"

There's also the issue of telephone companies that have not yet changed out their old POTS copper cable plants to fiber optic capable of supporting data and video as well as voice services using voice over Internet protocol (VOIP). This isn't only about consumers who haven't made the transition off wireline POTS for premises service. For many, they don't really have a choice for wireline-delivered voice service.

AT&T and other telcos are hoping consumers will be satisfied with using mobile wireless service for both voice and Internet access since they don't plan to invest in fiber to the premise (FTTP) infrastructure to replace their obsolete copper networks that cannot serve many homes and businesses due to technological limitations. Communities can offer their residents a far better option by building municipal or consumer telecommunications cooperative owned and operated FTTP networks instead of leaving their residents relegated to supbar mobile wireless services that can't provide adequate bandwidth and value.

Kan. bill would outlaw public broadband service - Washington Times

Kan. bill would outlaw public broadband service - Washington Times: Officials in the southeast Kansas city of Chanute, population 9,100, say they’re the primary target of the proposed legislation. As part of its public utility system, the city runs an ultra-high-speed broadband network that now serves schools, city buildings, the town hospital, banks and other key businesses.

On Nov. 23, the City Commission voted to work toward “fiber to home,” which would extend access to all residents and businesses within about a three-mile radius around the city, said Larry Gates, Chanute utilities director.

“This bill is an attack on competition, an attack on municipal government,” Gates said. “It takes away our local control and local decision making. It will hurt our efforts in economic development,” he said. (Emphasis added)

I respectfully disagree with Mr. Gates' characterization of the bill as an "attack on competition." Utility infrastructure by nature isn't a competitive market. It's really an attack on progress that threatens the incumbent telephone and cable providers backing the measure.

Upgrading the nation's telecommunications infrastructure to fiber to the premise to support new Internet protocol-based networks represents progress in the digital age just as interstate highways did in the 1950s. No one would describe paved roads as "competition" to dirt roads. By bullying local governments to get their way, the incumbents are on the wrong side of this issue. Americans like progress and they hate bullies. If they keep it up, local governments should respond by exercising their redevelopment and inverse condemnation powers to take over incumbent assets and upgrade them to fiber to the premise.

Market failure – not market competition – spurs community Internet infrastructure projects

A major misconception -- largely advanced by legacy incumbent telephone and cable companies – is local governments build Internet infrastructure because they want to compete with the incumbents. Competitive markets are those characterized as having many sellers and many buyers. That’s not possible with Internet infrastructure due to high barriers to entry and high ongoing operating costs.

Local governments build Internet infrastructure not to engage in market competition with incumbent legacy cablecos and telcos. They do so in response to market failure where the incumbents cannot profitably serve local needs. Lacking sufficient potential profits, the incumbents naturally aren’t going to be inclined to upgrade and build out fiber networks. 

In terms of those left off the Internet “grid,” the scale of this market failure in the United States is substantial. The U.S. Federal Communications Commission (FCC) estimates about 19 million Americans live in homes where Internet service isn’t available.

Net neutrality debate underlies strategic tensions between legacy telcos, cablecos and content providers

Underlying the public policy issue of whether the U.S. Federal Communications Commission (FCC) has legal authority to bar Internet service providers from treating the Internet as a private toll road and charging higher fees for digital express lanes – a policy known as “net neutrality” – are deep tensions between legacy telephone and cable companies and content providers. The courts are now addressing the legality of this policy, with the question to potentially come before the U.S. Supreme Court. But how the tensions between big telephone and cable companies and Internet content and social media services are resolved in the marketplace could ultimately have a much bigger impact than the courts.

The telephone and cable companies maintain they need revenue from content providers to offset CAPex and OPex costs of the infrastructure to deliver the services and as such are entitled to payment for access to their networks. In short, their position is they can charge for access on both ends of the Internet: where services like Netflix enter their “pipes” as then-AT&T Chairman Ed Whitacre famously described them in 2007 and also at consumer premises where they are delivered. From the perspective of the content and service providers, given end users pay for access, they too shouldn’t have to pay to get content on network. And to boot, a network they view as technologically deficient and unable to provide sufficient current and future bandwidth as evidenced by Google’s limited venture into fiber the premise (FTTP) infrastructure via its Google Fiber unit. The incumbent inferiority gap has been recognized by former FCC official Blair Levin, who observes that big telco and cable companies have no plans to meaningfully upgrade and build out their networks.

While the courts will ultimately provide a tactical win to one side or the other on the issue of net neutrality, the strategic market tension between the sides over who owns and operates Internet infrastructure and who pays for it will nevertheless remain. How might it be resolved?

A possible scenario is the formation of an alliance among the big content providers and the Internet backbone transport players with the mission of dislodging the telco/cable cartel and its moribund, slow-moving pre-Internet business model. Call it the nuclear FTTP overbuild option. Given the hundreds of billions of dollars required to build out FTTP in the United States, a strategic initiative on such a massive scale would likely have to be a public-private partnership with private members such as like Level 3, Cogent Communications, Google, Amazon, Netflix, Ebay,Yahoo!, LinkedIn, Twitter as well as entities involved in the telehealth, distance education and the emerging markets of smart homes and the device-driven “Internet of things.” The federal government would be the public partner, providing capital through long term bonds to finance a strategic national Internet initiative to replace lethargic, highly contentious subsidy efforts such as the Connect America Fund that could take decades –if ever – to construct adequate Internet infrastructure serving all Americans.

Fiber to the premise obsoleting net neutrality debate

A ruling this week by a federal appellate court blocking U.S. Federal Communications Commission rules barring Internet service providers from effectively erecting toll gates and speed bumps as revenue enhancement mechanisms is likely to fuel the policy debate on the proper role of the Internet: whether it should be regulated like a public thoroughfare -- the infrastructure of an increasingly digital economy -- or as a private, profit producing asset.

Investor owned, rent seeking providers such as telcos and cable companies will naturally gravitate toward business models that treat digital Internet traffic as a limited commodity that must be broken down, packaged and sold in discrete bundles and flow rates. The more data and the faster the flow rate, the higher the price.

The big problem for this business model is it's being obsoleted by technology. Fiber to the premise (FTTP) infrastructure is the emerging standard for delivering Internet to homes and business customers. It does not have the inherent limitations of metal wire and cable infrastructure, where a rational, technology-based argument can be made for treating bandwidth as a limited commodity. Once FTTP infrastructure is in place, adding more capacity can be accomplished at relatively negligible cost.