Monday, September 12, 2016

Why state and local government are ill equipped to modernize U.S. telecom infrastructure

West Virginia Broadband Enhancement Council Chairman Seeks Gigabit Internet Statewide: (TNS) -- The new chairman of a governor-appointed panel wants to set a lofty goal for broadband speeds in West Virginia: Make gigabit internet service available statewide.

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“I applaud your thought, but I think, at this point, it’s a very unrealistic goal,” said council member Robert Cole, adding that the 1-gigabit service would require extensive excavation work to install large high-speed fiber lines. “If we scare [internet providers] off, they’re going to put up a wall. Getting their cooperation is key.

This exchange encapsulates the challenge confronting state and local governments eager to modernize their telecommunications infrastructures to universally available fiber to the premise (FTTP) as an economic development strategy. There is currently no viable business model to finance it in either the private or public sectors.

The amount of investment capital needed is too high and the ROI too long for private investment capital. That's why investor-owned telecom providers have only sparingly deployed FTTP -- in discrete, compact neighborhoods they believe will generate sufficient revenue to offset construction and maintenance costs.

On the public side, state and local governments struggle with their existing obligations including maintaining roads and highways and water and sewer systems as well as accumulated public pension obligations. That reality leaves states like West Virginia here to engage in a pointless debate over "broadband speeds" which isn't really relevant when it comes to FTTP given the technology's enormous capacity compared to legacy metallic telephone and cable networks.


Thursday, September 08, 2016

Universally available advanced telecom infrastructure requires public ownership

EU seeks to spur fast broadband roll-out with telecoms reform | Reuters: The costs of running optic fiber - which can deliver speeds of up to 1 gigabit per second - into households are high. Telecoms operators such as Orange, Deutsche Telekom and Telecom Italia have long complained that the current rules forcing them to open up their networks to competitors at regulated prices do not allow them get a decent return on investment.

Unbundling of Networks Elements (UNE) is a key part of the 1996 amendment of the U.S. Communications Act. The thinking was this would hasten the availability of advanced communications services by spurring competition among service providers. The problem however is those advanced services require infrastructure upgrades and fiber to the premise -- upgrades the vertically integrated incumbent telephone companies are loath to make since they would have to share them with other service providers offering competing services. Meanwhile, 20 years after the enactment of the amendment, the United States suffers from widespread infrastructure access disparities, with some premises still only offered the same dialup service that was available in 1996.

That's not to imply that the EU's approach is the right one since it like U.S. policy is overly reliant on competitive market forces that have limited effect in telecommunications infrastructure owned by vertically integrated, investor-owned players that want to protect their natural monopolies and cherry pick and redline down to the neighborhood level. Achieving universal advanced telecommunications service thus requires public ownership of the infrastructure.

Sunday, September 04, 2016

Limited thinking major obstacle in telecom infrastructure modernization

Rapid climb in California's broadband speeds and use: The average speed at which Californians connected to Akamai’s content delivery network in the first quarter of 2016 was 16.4 Mbps, according to Akamai’s State of the Internet Report for the first quarter of 2016. Despite lagging behind U.S. leaders, that’s stilll a healthy jump from a year earlier, when the average was 13.6 Mbps, and a huge improvement over the 5.7 Mbps we were clocking five years ago – a 188% improvement.
This exemplifies a big part of addressing the challenge of modernizing America's telecommunications infrastructure for the digital age: how we think about it. Our thinking tends to be constrained and parochial, measuring success based on throughput speeds and limited to a given state or local jurisdiction rather than conceptualizing it as essential interstate infrastructure connecting every American home, business and institution.

State rep flustered by AT&T FTTP deployment to unspecified areas of Bradley County, Tennessee

Report: State broadband access lacking | The Cleveland Daily Banner: The debate is now continuing over whether Tennessee should change its laws allowing municipalities, such as Chattanooga’s EPB, to extend its broadband service footprint into adjacent areas. Communication conglomerates such as AT&T and Verizon have been vigorous in their fight against such measures saying any competition between government and private companies would not be fair. There are those who argue that point, particularly noting AT&T has received hundred of millions of dollars in federal subsidies that are supposed to aid in providing broadband access to rural areas.

AT&T announced Aug. 25 it would be introducing its fiber network to “areas of Bradley County.” State Reps. Kevin Brooks and Dan Howell, who have spearheaded efforts in Nashville to change the laws, questioned why the announcement said “areas” of the county. “What areas exactly? Why not all areas of Bradley County?” Brooks asked in a statement to the Cleveland Daily Banner in response to the announcement.

The answer, Rep. Brooks:

1. Whatever areas we cherry pick because the FCC isn't enforcing its Open Internet rules classifying Internet service as a common carrier telecommunications utility requiring universal service and barring redlining.

2. Even if it did, we couldn't afford to comply and would have to go bankrupt.

Friday, September 02, 2016

Russ Feingold calls for making internet a utility | Local | lacrossetribune.com

Russ Feingold calls for making internet a utility | Local | lacrossetribune.com: Feingold called for a “robust” federal program of broadband build-outs by both private and public providers to bring rural residents up to the same level of service as people in the city, at similar rates — similar to federal subsidies in the 1930s that expanded electricity to those same areas. “This needs to be a utility,” Feingold said. “Everybody needs to have it. You can’t let these three big companies have control.”
Feingold's on the right track here. States and local governments aren't up to the monumental task of modernizing the nation's telecommunications infrastructure from the metallic networks used for decades by telephone and cable companies to fiber to the premise (FTTP).

Feingold's also correct in asserting that the United States cannot rely on these legacy companies to ensure universal service. I propose a similarly aggressive approach in my 2015 eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, calling for a crash federal telecommunications infrastructure modernization initiative to bring the nation to where it should be now and will need to be going forward.

Thursday, September 01, 2016

A refreshingly honest assessment from AT&T: Building advanced telecom infrastructure is "tough."

AT&T rips Google Fiber - Business Insider: Google's service has been a big threat to AT&T and other telcos since it promised to offer faster internet speeds at lower prices. But a series of recent reports noted that Google's broadband service has garnered disappointing subscription numbers and is scrambling for a new wireless-based model as it cuts back the size of its staff. The two corporate giants have clashed before, including ongoing legal battles over access to utility poles. But the latest salvo by AT&T, which reads as part take-down, part tantrum, stands out for the undisguised derision and sarcasm it heaps on Google, while touting what it says is its own $140 billion investment in broadband.

"Moral of the story," writes AT&T VP of federal regulatory Joan Marsh, "Building reliable, ubiquitous high-speed broadband connectivity is tough."

A refreshingly honest assessment here. AT&T certainly knows it's hard building ubiquitous advanced telecommunications infrastructure, particularly when it like other legacy providers is hamstrung by a vertically integrated, "bill and keep," subscription-based business model that requires selling one customer premise at a time. The evidence: the widespread infrastructure gaps in its nominal "service territory."

If the United States continues to rely on this impaired business model, it will continue to suffer from inadequate infrastructure and disparate service access for decades to come.