Monday, March 23, 2015

Obama administration continues to ignore US need for ubiquitous FTTP

The Obama administration continues to ignore the need for ubiquitous fiber to the premise infrastructure serving all American homes and small businesses.

The administration instead is pursuing a PR campaign to shift attention to mobile wireless service that can't accommodate growing premise bandwidth demand as well as pointless activities such as "broadband mapping" and measuring "broadband speeds" that will do nothing to construct the FTTP infrastructure the nation should have been putting in place a generation ago.

Thursday, March 19, 2015

Major fail: West Virginia Internet infrastructure policy

The Charleston Gazette | W.Va. broadband panel to get new duties, but no funds: Roper’s group supported the broadband expansion bill, arguing the project would help improve education and healthcare, and spur entrepreneurship in West Virginia.

“If we solely depend on private industry, we’ll just stay at the status quo,” Roper said. “If students can’t access textbooks online at home, and if doctors can’t access electronic health records, we’re in trouble. [Broadband] is like good roads and water lines. It’s everything.”
This sums up the situation well, but the state's plan is to essentially pass the buck (and the hat) while continuing the useless exercise of mapping and comparing "broadband speeds" -- the do nothing approach favored by all too many state and local governments that won't build needed infrastructure:
The new legislation, which Tomblin is expected to sign into law, creates a “broadband enhancement fund,” but state lawmakers didn’t set aside any money for the fund. The bill, however, seems to  allow outside groups to donate to the fund. The panel also will receive any  money remaining from the former Broadband Deployment Council’s account, but the  council announced last year that it planned to spend all leftover funds on  final reports and audits. At the outset, the new broadband  council is expected to gather data about residential and business customers’  Internet speeds – and compare speeds to those advertised by broadband  providers. The new council also will be asked to examine existing  broadband networks.

Wednesday, March 18, 2015

Accelerating implosion of pay TV will hasten AT&T exit from residential wireline

The accelerating implosion of subscription pay TV offerings will hasten AT&T’s exit from the residential wireline market segment and could also result in the telco’s withdrawal of its planned acquisition of satellite provider DirecTV announced in 2014.

AT&T offers video packages with its U-Verse-branded triple play Internet-video-voice product. With the DirecTV deal pending regulatory approval, AT&T hopes to expand its audience of potential viewers and consequently, boost its purchasing power with TV programming providers as negotiations with the programming providers have hardened in recent years.

Viewers have historically regarded the TV programming packages as a poor value for the money since they typically watch only a handful of a few hundred channels. Now they can stream only the video programming they desire via their Internet connections, disrupting the triple play revenue model.

In addition, AT&T’s U-Verse product is delivered to residences over its aging legacy last mile copper cable plant that offers far less bandwidth headroom -- much of it consumed by video -- than hybrid fiber-coax (HFC) cable plants. To keep technologically abreast of cable, AT&T would have to replace its copper plant with fiber. But it is unable to easily do so, constrained by shareholder expectations for earnings and high dividends that militate against substantial capital expenditures.

That leaves AT&T with only one viable option – to continue to sell off chucks of its residential market as it did in December 2014, spinning off its Connecticut residential landline unit, including Internet and TV services to Frontier Communications for $2 billion.

Monday, March 16, 2015

FCC’s Title II order adopts ultra light touch on net neutrality enforcement

While much of the media has been abuzz over the concept of net neutrality – the principle that all Internet traffic be treated equally – an initial review of the FCC’s report and order issued last week classifying Internet services as telecommunications services under Title II of the Communications Act indicates the regulatory agency is adopting a decidedly light touch approach on enforcing net neutrality. The question of whether net neutrality is being respected has arisen at interconnection between network layers, choke points specifically addressed in the FCC’s order and report.

Paragraph 4 states the order’s policy respecting net neutrality, described in the media as a ban on network providers creating paid fast lanes, drawing on the metaphor of toll lanes on a busy freeway:

4. The lesson of this period, and the overwhelming consensus on the record, is that  carefully-tailored rules to protect Internet openness will allow investment and innovation to continue to flourish. Consistent with that experience and the record built in this proceeding, today we adopt carefully-tailored rules that would prevent specific practices we know are harmful to Internet openness— blocking, throttling, and paid prioritization—as well as a strong standard of conduct designed to prevent the deployment of new practices that would harm Internet openness. We also enhance our transparency rule to ensure that consumers are fully informed as to whether the services they purchase are delivering what they expect.

Paragraph 30 however specifically declines to apply Title II rules to interconnection, noting frictions among commercial players have produced differing accounts of how Internet data traffic is being handled:

30. But this Order does not apply the open Internet rules to interconnection. Three factors  are critical in informing this approach to interconnection. First, the nature of Internet traffic, driven by massive consumption of video, has challenged traditional arrangements—placing more emphasis on the use of CDNs or even direct connections between content providers (like Netflix or Google) and last-mile broadband providers. Second, it is clear that consumers have been subject to degradation resulting from commercial disagreements, perhaps most notably in a series of disputes between Netflix and large last-mile broadband providers. But, third, the causes of past disruption and—just as importantly—the potential for future degradation through interconnection disputes—are reflected in very different narratives in the record.

At paragraph 31 of the order, the FCC opts for an information gathering stance vis a vis disputes over interconnection rather than a strong enforcement role:

31. While we have more than a decade’s worth of experience with last-mile practices, we lack a similar depth of background in the Internet traffic exchange context. Thus, we find that the best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules. This Order—for the first time—provides authority to consider claims involving interconnection, a process that is sure to bring greater understanding to the Commission.

Saturday, March 14, 2015

Levin's Law of Internet Infrastructure Inertia may prevail over FCC universal service mandate

This week’s report and order by the U.S. Federal Communications Commission that imposes a universal service requirement on Internet infrastructure providers may do little to over the next decade to ensure all premises have access to landline Internet connections.

As they did soon after the Communications Act was amended in 1996 requiring telephone companies to share their network infrastructures with competitive providers, the large telephone companies -- joined by cable companies – could challenge the rule in the courts and drag their feet implementing it.

They might also argue that they cannot afford to provide universal service within their service territories because there are insufficient subsidies given this week’s draft order defers enforcement of Section 254(d) of the Communications Act requiring telecommunications carriers to fund universal service.

With a generation of progress toward connecting all American premises with fiber already squandered, the associated delays could buy the big incumbent telephone and cable companies another 10 years or more of business as usual, allowing them to continue to cherry pick communities, neighborhoods and roads and streets they prefer to serve and redline those they reject.

That would leave Levin's Law of Internet Infrastructure Inertia* intact and the resulting entrenched disparate access to landline Internet service that leaves about one in five U.S. homes and small businesses unable to order service.

*Blair Levin, a former U.S Federal Communications Commission official and lead author of the FCC’s 2010 National Broadband Plan observed in 2012 that the major landline ISPs had no plans to improve and build out their infrastructures. “For most Americans, five years from now, the best network available to them will be the same network they have today," Levin stated.

Thursday, March 12, 2015

FCC adopts Internet universal service obligation

Finding the United States needs improved Internet access, the U.S. Federal Communications Commission today released a report and order classifying Internet service as a common carrier telecommunications service under Title II of the Communications Act. That subjects Internet service providers (ISPs) to the same common carrier universal service obligations under which telephone companies operate, requiring them to provide connections to all customers requesting service in their service territories. Harold Feld of Public Knowledge recently termed universal service “the quintessential common-carrier obligation.”

Under prior FCC rules, Internet service was classified as an information service under Title I of the Act, relieving ISPs of the obligation to provide Internet service to any premise requesting it. Consequently, for more than a decade ISPs have effectively redlined communities, neighborhoods and even portions of roads and streets by not building out their infrastructures to serve them.

The FCC's reclassification of Internet as a Title II telecommunications service invokes Section 201(a) of the Communications Act:

"It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor..."

The FCC's order and rulemaking also applies Section 254(b)(3) of the Communications Act that requires ISPs to provide access to advanced telecommunications in all regions of the nation:

(3) Access in rural and high cost areas

Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

The report and order also applies Section 214(e)(3) of the Communications Act, which empowers the FCC to "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for that unserved community or portion thereof."

In addition, within the scope of the FCC's action is Section 202 of the Act, which contains an anti-redlining provision barring providers from discriminating against localities in providing service. The report and order notes complaints of violations will be addressed on a case-by-case basis.

In applying most of Section 254 of the Act to ISPs, the FCC noted it rejected calls to delay or phase in its enforcement:

“Even prior to the classification of broadband Internet access service adopted here, the Commission already supported broadband services to schools, libraries, and health care providers and supported broadband-capable networks in high-cost areas. Broadband Internet access service was, and is, a key focus of those universal service policies, and classification today simply provides another statutory justification in support of these policies going forward. Under our broader section 10(a)(3) public interest analysis, the historical focus of our universal service policies on advancing end-users’ access to broadband Internet access service persuades us to give much less weight to arguments that we should proceed incrementally in this context… We therefore conclude that these universal service policy-making provisions of section 254, and the interrelated requirements of section 214(e), give us greater flexibility in pursuing those policies, and outweighs any limited incremental effects (if any) on broadband providers in this context. Because forbearance would not be in the public interest under section 10(a)(3), we apply these provisions of section 254 and 214(e) and our implementing rules with respect to broadband Internet access service.”

Tuesday, March 10, 2015

Unpacking USTelecom FCC forbearance petition: no obligation to continue copper plant

GN 14-126: USTelecom Comments on 2015 Broadband Progress Report | USTelecom: First, the Commission should grant the petition that USTelecom filed in October 2014 that seeks forbearance from various outdated regulatory requirements applicable only to incumbent local exchange carriers (“ILECs”). As USTelecom explained in its Forbearance Petition, unlike most broadband providers – including cable, wireless, and competitive fiber providers – ILECs are not free to focus their expenditures on next-generation networks designed to deliver the higher-speed broadband services customers increasingly crave; instead they “must direct a substantial portion of their expenditures to maintaining legacy networks and fulfilling regulatory mandates whose costs far exceed any benefits.”

USTelecom is correct in noting there's little point in investing in obsolete copper networks. But its petition to the U.S. Federal Communications Commission fails to cite any regulations that specifically require telephone companies to deliver services solely over copper and not fiber.

Instead, the filing appears to pick a bone with existing rules governing ILEC last mile network operations and access -- rules that are predicated on ILECs having a monopoly over last mile infrastructure. The petition does not explain how these rules operate to discourage investment to upgrade copper networks to fiber.

Expect more legacy incumbent telephone company complaints as the FCC adopts final rules later this year reclassifying Internet service as a common carrier utility under Title II of the Communications Act.

Monday, March 09, 2015

Rhode Island universal Internet service bill introduced

GoLocalProv | Chippendale: Homes Without Internet Access Leave Students Unable to Excel in School: Representative Michael Chippendale (R-Foster, Glocester, Coventry) has introduced legislation that would bring broadband internet to households that currently have no means of accessing it. The bill stipulates that “any public utility providing phone, cable television, or broadband internet service to 75% of the eligible residents of any single city or town shall make available said phone, cable television, or internet services to the remaining 25% of the city or town.” Also, “any broadband service provider which provides internet service to any city or town that is part of a school district that utilizes portable internet devices for student learning at home and has broadband internet provided to at least 25% of the eligible residents of any single city or town, must provide broadband internet service for all residents of the city or town.”
While the U.S. Federal Communications Commission appears to be passing on a universal Internet service obligation in its forthcoming final rules deeming ISPs as common telecommunications carriers under Title II of the Communications Act, this could be the first of a state-based movement to impose such a requirement.

It should be noted this is a limited universal access measure and won't help localities in the all too common scenario where ISPs commonly serve only the doughnut hole of half of all premises -- those close to the center of town -- but not those outside of the center.

Tennesseans want fiber Internet service

More and more areas of the United States are recognizing they need to build fiber telecommunications infrastructure just as they built their own roads and highways. The excerpts below from this story explain why and the growing political sentiment that is reaching a tipping point.

Farm Bureau backs EPB expansions | Local News | Times Free Press: Sen. Todd Gardenhire, R-Chattanooga, said he backs Bowling's bill because his top priority is getting high-speed Internet to rural areas of south Bradley County that are in his district. Some 800 families would benefit, he said.

He said Charter, Comcast and AT&T told him "it's not profitable" to do it. In Gardenhire's view, "private enterprise has given up on taking care of the people."

Some south Bradley Countians are less than a mile from EPB's service area but can't get its broadband, leaving them with dial-up service and a slow connection speed. Joyce Coltrin, whose wholesale nursery is in southern Bradley County, relies on her cellphone to access the Internet.

"It's very hard to use an iPhone for business," said Coltrin, who heads a group of 160 households who call themselves "citizens striving to be part of the 21st century." They, too, have been pushing state legislators to change the law.

*  *  *
Wireless in particular "is capable of a tiny fraction of what fiber can deliver, with respect to speed, reliability, and capacity," she said. "Because of data caps and usage-based pricing, it's also very, very expensive for anyone who uses a lot of bandwidth, such as families who home-school and therefore require lots of online video." Saying that a community "doesn't need fiber because it has DSL or wireless is like saying that the nation doesn't need the Interstatehighway system because we have the Santa Fe trail," Hovis argued.

Friday, March 06, 2015

Big incumbent telcos, cablecos should stop the zero sum game, partner with the public sector on open access infrastructure

Steven S. Ross of Broadband Communities magazine opines in the January/February 2015 issue that legacy incumbent telephone and cable companies should abandon their win/lose, zero sum, all or nothing attitudes toward telecommunications infrastructure and partner with the public sector on open access infrastructure:
"A well-built municipal system (or access to public assets in a public/private partnership) should be open to all carriers and to all content and service providers. They would get a chance to sell products and services with vastly higher revenue potential and much greater reliability than they would by nursing ancient infrastructure to drain a few extra years of cash out of hapless, captive customers."

Indeed.

Click here to read the full article.

On telecom infrastructure, policymakers must choose between sanctioning market failure or serving their constituents

Rural Tennesseans limited in Internet choices

As time goes on, it’s going to grow increasingly difficult for policymakers to continue to provide protection to legacy telephone and cable companies that want to preserve their partial service area infrastructure footprints. Such protectionist policies amount to government sanctioned market failure.

In the face of market failure, naturally those who live outside the boundaries of those limited footprints are looking to the public sector for help to get landline telecommunications service -- just as they did nearly a century ago for electrical distribution infrastructure. 

If their elected representatives fail to support them, they will face growing political risk come election time, particularly as more stories like this one show they’ve sold out their constituents by taking campaign contributions from the legacy providers.

Thursday, March 05, 2015

Sell fiber enabled services, not “gigabit.”

There’s a well-established maxim in the sales of information and communications technology (ICT) products and services: Don’t sell bits and bytes, feeds and speeds. Instead, sell features and benefits. There’s a good reason for this selling principle. Most consumers aren’t interested in technology. They’re interested in what it can do to benefit them and its value for the money invested.

The same rule applies in telecommunications. But it has been violated in the marketing of fiber to the premise (FTTP) services, where Internet Service Providers have defined FTTP by its speed – its ability to deliver bandwidths of 1 gigabit or more. Problem is, only a small percentage of consumers really know what the term “gigabit” means, according to a survey by Pivot Group spotlighted in the January/February issue of Broadband Communities magazine. (Sell Services, Not Speed)

“Service providers spend an awful lot of time and marketing spend emphasizing speed, but this research reveals consumers are confused regarding speed references and perceive that their current speed package is sufficient,” Dave Nieuwstraten, president of Pivot Group and co-author of the study, observes.

The takeaway: What really matters isn’t gigabit bandwidth per se but rather the services FTTP can enable in the home where people have high definition televisions, desktop and laptop computers and personal devices such as tablets and smartphones all being supported by the home’s Internet connection. FTTP will play an increasingly important role in the delivery of video content as more is delivered via the Internet, enhancing its value to consumers sensitive to high price points for Internet service used to support only web browsing and email. That will increasingly be so as live sports migrates to Internet streaming.

In the era of FTTP, it’s really no longer useful to market bandwidth or brand it with a speed-based term such as "gigabit” or “broadband” -- a now obsolete term used in the 1990s to distinguish narrowband dialup Internet access from first generation ADSL services. Similarly, marketing Internet services with speed/bandwidth price tiers is no longer truly relevant for premise services. Without benefits described, consumers will naturally tend toward lower cost options.

Emphasizing the utility and benefits of a FTTP connection also fits well with the open access, wholesale model where the owner of the FTTP infrastructure sells access to ISPs who in turn sell retail services delivered over it. Including new ones mentioned in the Broadband Communities article such as installing and supporting the next generation of more robust home Wi-Fi needed to enable all of those wireless devices being used in today’s homes and home-based businesses.

Thursday, February 26, 2015

Disparate Internet access likely to continue in US without comprehensive policy, strategies

Want Fiber? Do more to get it, Google exec tells cities | Gigaom: The upshot for the foreseeable future is a patchwork of different broadband speeds across the country as competitors flock to easy-access markets, while leaving many millions of others (including me in Brooklyn) stuck with monopoly service.

According to Cogent CEO Dave Schaeffer, who also spoke on the panel, this situation will require a future wave of policy inducements to produce more broadband offerings.


Lacking comprehensive policy inducements and strategy to further the construction of fiber optic telecommunications infrastructure to reach all homes and businesses and updating outmoded metal wire infrastructure operated by incumbent telephone and cable companies, the United States does indeed face a less than bright future of disparate Internet access in both metro and rural areas.

Today's adoption of rules by the U.S. Federal Communications Commission only partially implementing Title II of the Communications Act subjecting the Internet to common carrier utility regulation will serve to reinforce the disparity without a solid universal service obligation. More in depth analysis of the FCC's action will follow here once the final rulemaking is published in the Federal Register.

Wednesday, February 25, 2015

Google Fiber's business model emulates -- and shares same downsides -- as incumbents'

Google Fiber: Make It Easier For Us Or Enjoy Time Warner Cable | DSLReports, ISP Information: Numerous cities have been so eager to get Google Fiber, they've signed rather sweetheart deals that, for example, allow Google to simply walk away from builds should TV subscriber uptake numbers not be met. Perks also include the right to redline and cherry pick deployment neighborhoods...

This illustrates how closely Google Fiber's triple play business model emulates that of legacy incumbent telephone and cable companies. And also how vulnerable it is to TV programming costs that are squeezing all but the biggest players such as Comcast and Time Warner.

What's ironic is localities across the United States have literally begged Google Fiber for relief from the legacy incumbents. Google has adopted much of the incumbents' triple play business model but utilizes fiber to the premise plant instead of wire or cable. And since it's such a high cost model, it naturally leads to market segmentation (cherry picking and redlining neighborhoods based on expected revenue) that reinforces an entrenched infrastructure gap that leaves one in five American homes unable to order landline Internet service.

Monday, February 23, 2015

AEI overlooks lack of investment in aging telecom infrastructure

Don't make the Internet a public utility AEI: The result is that public utilities are among our least innovative, worst-performing industries. Search the phrase “America’s aging infrastructure” and you will find dozens of articles and studies detailing lack of adequate investment in our bridges, gas pipelines, electricity transmission systems and other utilities. Sixty-two percent of the gas mains in Washington, for example, are more than 50 years old.


Similarly, one can do a search and find plenty of references to America's aging metal wire telecommunications infrastructure where market forces alone fail to provide sufficient incentive for investment to replace it with fiber.



 

Wednesday, February 18, 2015

Ellsworth, Maine exemplifies local efforts to address U.S. telecom infrastructure deficit -- and need for federal assistance

Council backs broadband Internet project - The Ellsworth American: Lili Pew, a real estate agent who heads the EBDC broadband committee, pointed out many people have home-based jobs or businesses. She said the number one question she hears from her clients looking at Ellsworth is, “Do I have access to high-speed broadband?”

Running fiber lines to every residence in Ellsworth would be cost-prohibitive — in the range of $8 million to $12 million, according to Tilson — but there are other ways to reach parts of the city that Pew said are “in the black hole of technology right now.”

Paul said service that is “five, 10, 20 times faster” than what customers have currently can be provided wirelessly using the same type of service cell phone users have. Hamilton said Ellsworth “is blessed by having good towers in place already.”

This account out of Ellsworth, Maine illustrates the American can do spirit of meeting and responding to a challenge -- in this case constructing fiber optic telecommunications infrastructure to enable the locality to participate in the digital 21st century economy.

This story is playing out all over the United States as cities and towns like Ellsworth take their telecommunications destiny into their own hands. It also shows these localities will need significant funding assistance from the federal government to ensure all homes and businesses have fiber connections. Ellsworth's economic development TIF (tax-increment financing) program won't provide enough funding to ensure all of its residents will have fiber connections.

The Federal Communications Commission's Connect America Fund isn't up to the task and hasn't been sufficiently tapped by providers to build needed telecom infrastructure in areas where it's not quickly profitable. What's needed is a far more robust federal program to provide funding to states and localities on a scale like that of the Rural Electric Administration in the 1930s to bridge the gap in Ellsworth and other places like it.

Saturday, February 14, 2015

Center for Public Integrity delves deep into U.S. Internet infrastructure challenges

A great read on investigative journalism by the Center for Public Integrity that delves deeply into the market and policy challenges of building a complete and modern Internet infrastructure in the United States in 2015. Here’s a summary of the fundamental elements covered in the article.

Incumbent telephone and cable companies can’t afford to upgrade and build out their Internet infrastructures to fully serve their service territories. So they lobby and give campaign contributions to policymakers to allow them to preserve their incomplete networks that leave many disconnected from the Internet. Reporter Allan Holmes describes a typical scenario in much of the nation where those networks don’t extend to reach many suburban and exurban homes:

But then you go outside of Tullahoma (South Carolina), you just drive like 3, 4, 5 miles outside of Tullahoma into this suburban area where there are some very nice homes, and they don’t have Internet access. They don’t even have AT&T, U-verse or Charter Communications which is another telecom there who provides service in Tullahoma. They don’t serve this area.

Leaving these people unserved creates political pressure for action to solve the problem – naturally leading local governments to build their own infrastructure to serve their citizens just as they did in the 1930s for electrical service. That in turn generates resistance from the incumbents to preserve the status quo and put roadblocks in their path. Legislators like Tennessee State Representative Glen Casada are being squeezed by increasing pressure from both the incumbent telephone and cable providers that support their campaigns and the constituents who elect them and want good Internet connections as Holmes relates a conversation with Casada:

“My district is about 2/3 high-speed and 1/3 non-high-speed. So I do hear a lot of that, and I talk to several of those providers: ‘we need help, what’s the solution?’ and their retort is ‘well, we can’t afford to go to the southeast corner of your county because we would lose money and lose money hand over fist.’ And I said ‘we’ve got to figure this out, and real quick, because if we don’t figure it out, then we’re going to have to go with a solution that may not be palatable to the free market system.’ So there is an answer, I contend we have to work it out and figure it out so that the free market solves it, because if a government-run entity solves it, it’s got long-term negative implications.”

The challenge Casada faces is the market for telecommunications infrastructure isn’t a competitive one. It’s a natural monopoly due to the high cost barriers that keep out potential competitors. It’s that natural monopoly that the incumbents want to preserve by keeping local governments from building their own Internet infrastructure with protectionist laws. 

Casada can however have market competition for services provided over Internet infrastructure by treating the infrastructure like public works such as a road or highway. But a competitive market with many sellers and buyers isn’t going to happen for Internet infrastructure because it is fundamentally at odds with market economics.

The larger story underlying this one is the disruption and discomfort that naturally comes with technological and economic change – in this case replacing 20th century metallic legacy telephone and cable TV infrastructures with modern fiber optic networks for the 21st century. Naturally the legacy providers will resist this transition out of fear of adverse economic consequences for their shareholders and employees. But policymakers must also consider the economic opportunity and job creation ubiquitous modern fiber Internet infrastructure will enable.