Friday, November 28, 2008

France adopts universal broadband requirement but sets bar too low

More international broadband developments this Thanksgiving weekend. While the Australian government struggles to implement near universal broadband access in the land down under and wrangles with its partially state owned telco, Telstra, over build out requirements, Reuters reports a French government official said his nation would require telcos (called telecoms in Europe) to provide universal broadband access providing connectivity of at least 512kbs throughout France starting in 2010. According to the Reuters dispatch, France had been pressuring the European Union to adopt a universal broadband mandate for telecoms that provide universal voice service but abandoned the effort due to lack of consensus among EU member nations.

France's 512kbs minimum speed requirement is really setting the bar low, perhaps in order to allow French telecoms such as France Telecom to attempt to deliver DSL over long and ancient copper loops commonly found in broadband black holes in the U.S. and elsewhere. That throughput level is already obsolete and is below even the minimal 768kbs "basic" broadband standard adopted by the U.S. Federal Communications Commission earlier this year.

Wednesday, November 26, 2008

Trouble down under with national broadband program

The Australian labor government and the nation's predominant telco Telstra are at loggerheads over the government's National Broadband Project, the goal of which is to bring broadband to 98 percent of homes and businesses, reports Business Day. Telstra isn't willing to go that far and wants its rollout to reach only 80 to 90 percent.

It's also balking at the government's demand that its infrastructure and retail arms be separated, apparently to discourage the latter from driving the former's broadband deployment strategy as has occured in other nations including the U.S. where telcos concentrate on selling services to more profitable areas while leaving others without broadband access.

Fiber cooperatives pick up the slack where telcos won't go

Here's an item from the nation's least populated state, Wyoming, that counters the myth that fiber optic telecommunications infrastructure is feasible only in densely populated areas. This is where things are headed: while the major telcos shun less densely populated areas and deploy fiber in limited portions of their service territories, cooperatives are stepping into the gap just as they did several decades ago when the other large private utility companies wouldn't serve these areas. Most importantly, those forming fiber cooperatives hold a long term view of their future telecommunications needs in contrast to the big publicly traded telcos that operate with limited quarterly and annual time horizons.

Tri County Telephone, the cooperative that serves the Ten Sleep area, upgraded from decades-old copper phone wiring to fiber in 2006 — a step that has still yet to happen in many urban areas.

Chris Davidson, Tri County's general manager, said the company wanted "to build a network for the future.

Monday, November 24, 2008

Obama administration should offer incentives for homeowner-owned fiber over the last mile

The incoming administration of U.S. President-Elect Barack Obama has tagged rebuilding America's aging infrastructure as a key policy objective. That includes its badly outdated last mile telecommunications infrastructure in order to make broadband accessible to more Americans.

Since the primary inadequacy of the telecommunications infrastructure when it comes to supporting broadband-enabled IP services isn't with the long haul and mid-mile portion of the network but rather the so-called "last mile" local access network, the administration should concentrate its efforts on developing incentives to hasten the change out of copper cable to fiber optic cable over this segment.

The administration should pay particular note of a recently issued working paper by the New America Foundation authored by Derek Slater and Tim Wu. The paper, Homes with Tails What If You Could Own Your Internet Connection, recommends state and federal tax credits to create incentives for homeowners to spend a $2,500 to $4,000 to connect their homes to last mile fiber built by existing carriers, neighborhood cooperatives, developers, local governments and private fiber optic vendors.

The authors seem to acknowledge that while there's near universal agreement that fiber over the last mile is essential to the future of America's telecommunications system and the critical role it plays in the nation's economy, there also is a substantial amount of inertia on both the supply and demand sides of the equation that keeps the U.S. stuck behind a technologically obsolete "copper wall" built decades before the Internet was created. The limitations of telcos' circa 1970s and earlier copper cable plants have become painfully obvious to all too many Americans who have vainly attempted for years to subscribe to their telco's DSL (or VDSL)-based services, only to be told it can't reach their homes or the copper cable is too old and degraded to support it or find it can't reliably deliver the throughput they'd like.

Telcos that have to produce quarterly profits are inherently conservative and won't make a long term capital investment in deploying fiber over their entire networks. They argue there's not enough evidence that homeowners will subscribe to fiber-based services at a sufficient "take rate" to justify such a major expenditure unless homes are densely packed cheek to jowl, thus reducing their investment risk. The problem is a lot of Americans don't live in such neighborhoods nor have any desire to do so. And since telcos operate in a duopolistic and often monopolistic market environment, telcos eschew meaningful market research and don't get hard data that might indicate that if they built fiber, customers will sign up for advanced services.

Hence, Slater and Wu posit -- correctly in this blogger's opinion-- that it falls to consumers themselves to break down the copper wall in favor of fiber over the last mile since risk averse telcos will continue to default to the safe status quo whenever possible.

The authors aptly acknowledge that many homeowners might balk at dropping a few thousand bucks to connect their homes to locally owned fiber and that there needs to be a compelling financial argument in addition to bringing their dwellings into the modern telecommunications age. In this regard, they point to a study by RVA & Associates, a market research firm that focuses on fiber networks, estimating that fiber connection increases the value of a home by about $4000. If the Obama administration combined that with a tax break, the proposition becomes even more appealing, particularly along with incentives for mortgage companies and other lenders to extend low interest fiber loans to homeowners. The tax breaks could be partially offset by stimulating economic activity that would bring in additional tax revenues.

Slater and Wu are to be commended for advancing the discussion beyond the true but tired themes of how much the nation is falling behind other developed countries when it comes to broadband and needs a national broadband policy to outlining a strategy to make it happen. It's no longer useful to call for a vague "national broadband policy." Since the U.S. is already years behind where it should be when it comes to broadband telecommunications infrastructure, what's sorely needed an action plan and rapid implementation. The solutions don't have to be perfect when the dreary U.S. broadband status quo is unacceptable and grows increasingly so as time goes on. As business gurus Tom Peters and Robert H. Waterman Jr. advised in their 1982 book In Search of Excellence: Ready, Fire, Aim.

Thursday, November 20, 2008

Tensions erupt between telcos, cablecos over over California broadband build out subsidy levels

As recently reported on this blog, California's incumbent telcos are bitching to the California Public Utilities Commission, complaining a 40 percent subsidy to underwrite the cost of building out broadband infrastructure to areas of the state lacking adequate access under the CPUC's California Advanced Services Fund (CASF) isn't likely to be enough for many potential projects.

Now the griping has turned into a contretemps between some of the biggest players and Comcast has jumped into the fray. In comments filed Nov. 19 on the eve of a CPUC hearing today to consider restructuring the CASF, Verizon criticizes AT&T's suggestion the 60 percent provider match be abandoned, warning it could lead to too much state funding of some projects.

In its Nov. 19 comments filed with the CPUC, cable provider Comcast takes issue with AT&T's "incredible" suggestion that the CASF fully subsidize some projects and Verizon's proposal that the CASF share be increased up to 80 percent for selected projects. The cable company warns the higher CASF funding threshold would be contrary to the CASF's goal of funding only projects that are economically viable.

AT&T's suggestion that CASF provide 100 percent funding for selected high cost projects in unserved areas "is truly outrageous, particularly coming from AT&T," Comcast said in its filed comments. "The CASF was not set up to be a slush fund to cover 100 percent of the costs of the largest ILEC in the state."

Saturday, November 15, 2008

Vermonters starved for broadband

This item at Burlington starkly illustrates how far behind the demand curve telcos and cable companies have gotten in rolling out high speed Internet. Chittenden County, Vermont residents needed broadband yesterday. More accurately, make that last year or the year before.

The lag between broadband demand and availability here and elsewhere throughout much of the U.S. is likely to continue for many more years. The basic broadband such as being deployed here is already all but obsolete and will be unable to support the increased use of video that is making up ever larger portions of Internet traffic.

Wednesday, November 12, 2008

BPL gets another lease on life

The obituary for Broadband Over Power Lines (BPL) had all but been written when IBM announced it would pony up $9.6 million in a venture with a small company to deploy BPL via electric power cooperatives formed decades ago in areas of the U.S. skipped by private power companies. Today, these same areas are being passed over by the private telco/cable duopoly and left without broadband Internet access.

According to Yahoo! Tech, the BPL rollout will take about two years and potentially serve 340,000 homes in Alabama, Indiana, Maryland, Pennsylvania, Texas, Virginia, and Wisconsin where about 86 percent lack cable or DSL access. The project has received $70 million in low-interest loans from the Department of Agriculture.

Making this project work could prove challenging. BPL utilizes similar transmission technology as DSL that rapidly degrades over distance, requiring extensive and costly amplification to get the signal to homes over long distances.

In addition, by the time this BPL project comes on line, residents of these areas could have superior alternatives such as fixed terrestrial wireless broadband based on multiple current and emerging technologies such as WiMAX and white spaces broadband over unused television frequencies that was given the green light by the Federal Communications Commission last week. And given that these areas have a history of forming cooperatively owned utilities, they may similarly opt to form cooperatives to build fiber optic infrastructure to assure their telecommunications needs are met over the longer term.

Monday, November 10, 2008

Less than enthusiatic response to California broadband build out subsidy program

A key recommendation of California Gov. Arnold Schwarzenegger's Broadband Task Force to build out broadband Internet infrastructure in the Golden State is getting a less than enthusiastic response from the state's incumbent telcos.

In comments filed last week with the California Public Utilities Commission (CPUC), which is considering expanding eligibility for 40 percent project subsidies to a wide variety of organizations and local governments, both large and small Incumbent Local Exchange Carriers (ILECs) complain the 40 percent subsidy is too low to make it worthwhile to invest in infrastructure for high cost areas currently unserved or underserved by broadband providers. They call on the CPUC to abandon the fixed 40 percent subsidy and instead award amounts based on the cost of the project.

The CPUC's internal Division of Ratepayer Advocates (DRA) is also calling on the CPUC to revamp the subsidy program, the California Advanced Services Fund (CASF). "The general paucity of bidders for CASF funding" and just six ILEC-proposed projects submitted for funding to date "suggests that the Commission’s anticipated advancement of broadband availability and competition is not bearing fruit," the DRA stated in its filed comments in the CASF proceeding. "While the factors that have led to this outcome are unclear, what is clear is that one of the Commission’s goals for the CASF – encouraging a diversity of advanced technologies and service providers – is unlikely to be met unless there is a critical review of the CASF, as it is currently structured and administered."

The DRA also recommends against allowing municipalities and other entities that are not under the CPUC's jurisdiction from proposing projects because the CPUC would have to enforce compliance with CASF funding requirements through the courts.

The six ILEC-proposed projects to bring wireline-delivered broadband unserved areas to be considered by the CPUC at its Nov. 21 meeting total just $372,976 in requested CASF funding.

The largest of the six proposals is by Verizon California and seeks $174,000 to serve 382 housholds in the Pinyon Crest area of Riverside County. AT&T has proposed four projects in both northern and southern California, including what is arguably a token effort to bring broadband to two residences in the Mount Wilson area of Los Angeles County.

Only one of the proposed projects meets original CASF project criteria of being capable of providing at least 3 Mbs downloads and 1 Mbs uploads -- one by Frontier Communications to provide service for 171 households in the Lake Almanor area of Plumas County.

Broadband squared: state leverging fiber for roadway information and local telecommunications service

Here's an interesting item out of Massachusetts courtesy of The Berkshire Eagle that illustrates how fiber infrastructure can be leveraged for multiple uses. In this case, providing traffic data while also providing backhaul capacity to help serve the western part of the state where broadband access has been severely constrained.

Sunday, November 09, 2008

Gullible, disingenuous pols enact state video franchise schemes unlikely to lower cable rates

Gullible and intellectually dishonest politicians enacted so-called video franchise schemes in about a dozen states over the past few years pushed by big telcos like AT&T. They were gullible at best and disingenuous at worst because they parroted the telcos' party line that such regulatory "reforms" would enhance competition for video services by allowing telcos to compete with cable companies, resulting in lower prices for consumers.

Well surprise, surprise, surprise. Cable rates are headed up -- and not down -- despite the entry of telco TV offerings such as AT&T's U-Verse, according to this weekend item from the Milwaukee, Wisconsin Journal Sentinel. This week, the Federal Communications Commission launched an inquiry into cable rate increases in advance of next February's mandated cutover to all digital television broadcasting.

"On balance, the law hasn't been good for consumers but has been very good for the companies that wanted it," Barry Orton, a telecommunications professor at the University of Wisconsin-Madison, told the newspaper. "Two years from now, I don't think you will be able to say that consumers saved a lot of money if any at all."

Telcos sugar coated their true agenda with the false patina of increased competition and lower rates for consumers. Their real goal was to get local governments that wanted them to build out their broadband infrastructures evenly to serve all and not just some of their residents off their backs. It's far easier to lobby a single state regulatory agency and influence the pols who appoint their members (and get them to put in place rules sanctioning broadband black holes) than to herd the political cats who sit on city and town councils and county boards of supervisors.

Broadband's potential to drive small town economic boom

"If you don't have broadband, it's as bad as not having electricity, running water or sewer utilities in your town." So says Jack Schultz, author of Boomtown USA: The 7 ½ Keys to Big Success in Small Towns.

Schultz has got that right. Broadband enabled telecommunications services make location and distance irrelevant and allow entrepreneurial activity to occur where it might not otherwise, which Schulz says is increasingly important to the economy at a time when the number of big companies that are expanding is decreasing.

Access to broadband could also fuel a population shift along the lines predicted by author Jack Lessinger in his prescient 1991 book Penturbia: Where Real Estate will Boom After the Crash of Suburbia. (Perhaps aided by the current real estate bust that began in 2006?)

A big roadblock however is America's spotty and incomplete last mile telecommunications infrastructure that leaves far too many home-based entrepreneurs struggling with dial up or substandard satellite Internet connections. Schulz correctly notes they cannot wait for the telco/cable duopoly to provide them the broadband they need to grow their businesses. "People must try to research and find alternate ways to get broadband in their communities," he says.

Schulz's position here coincides with my view that the last mile telecommunications infrastructure will become increasingly locally owned and operated as we are seeing with the proliferation of small mom and pop fixed terrestrial wireless Internet Service Providers (WISPs) and in initiatives by local governments and cooperatives to install fiber optic connections to homes and neighborhoods.

Friday, November 07, 2008

CLECs fear loss of access to copper loops being retired and replaced with fiber

Competitive Local Exchange Carriers (CLECs) established under the federal Telecommunications Act of 1996 that requires Incumbent Local Exchange Carriers (ILECs) to sell them access to their copper cable loops apparently fear the copper is literally about to be pulled out from under them and replaced with fiber, leaving them without access to their customers.

An organization of California CLECs, the California Association of Competitive Telecommunications Companies (CALTEL), petitioned the California Public Utilities Commission to adopt rules requiring ILECs to obtain advance approval from the CPUC before retiring copper loops and replacing them with fiber and demonstrate doing so would be in the public interest.

The CPUC declined, instead requiring ILECs to notify the CPUC and all CLECs interconnected with their copper plants before replacing copper with fiber. In addition, ILECs must engage in "good faith commercial negotiations" CLECs that want to purchase or lease the copper loop, the CPUC said in a Nov. 6 news release.

"I believe that this decision balances state and federal goals of promoting the deployment of broadband networks against the interests of competitors to retain access to the copper loop," Commissioner Rachelle Chong stated in the news release.

ILECs have long chafed under the line sharing requirements of the 1996 federal reform law and have dragged their feet and litigated with CLECs seeking to connect to their lines. Apparently CLECs now fear ILECs are about to use their ultimate weapon to make them go away for good, rendering them irrelevant by replacing their copper with fiber since they don't have to provide CLECs access to their proprietary fiber under a 2006 U.S. Court of Appeals ruling.

But ILECs have largely resisted employing the fiber strategy on CLECs since it requires them to make substantial investments in upgrading their wireline infrastructures that they have been reluctant to make. It's possible ILECs are now concluding doing so is worth it because it both disposes of pesky CLECs while also enabling them to exclusively offer far more advanced IP-based services that can be more reliably delivered over fiber than copper.

It will be interesting to watch how this plays out in California and other states and whether CLECs will bid on telco copper loops made obsolete by fiber. Probably few will since copper does not provide a future growth path for offering advanced services due to its technological limitations as have been painfully illustrated with the limited range and throughput of DSL over copper. In addition, aged copper loops are likely to be a low repair priority for ILECs, making it difficult for CLECs to provide reliable service. This could be the beginning of the end for CLECs.

Location, location, location: Broadband access now a factor in residential real estate

Associated Press writer Peter Svensson reports on what I've predicted will be a growing factor affecting the residential real estate market: whether a home has broadband access. Broadband has become a basic telecommunications utility. Homes that lack it are becoming about as desirable as those without electricity or water hookups. Svensson quotes Edward Redpath, a real estate broker in Hanover, N.H., as saying he's seen deals fall through once the buyer realizes a home can't get broadband.

I disagree with Svensson's theory that over time the lack of universal broadband in the United States along with higher gasoline prices could pull people from the countryside toward cities and suburbs.

Small local Wireless Internet Service Providers (WISPs) are springing up throughout the U.S. to provide wireless broadband where the telco/cable duopoly does not. Residents and businesses will also take matters into their own hands and form and invest in cooperatives to build their own local fiber optic telecommunications infrastructures just as they did several decades ago to bring electricity and telephone service to their communities.

Svensson's story suggests, they will be motivated by economic considerations to boost the market appeal and value of their homes -- particularly as they work to crawl out of the current real estate market downturn -- and to support their ability to start businesses and telecommute to their jobs.

Wednesday, November 05, 2008

White spaces broadband faces uncertain future

Expectations should be tempered contemplating the implications of this week's action by the Federal Communications Commission approving the unlicensed use of television broadcast "white spaces" spectrum being freed up by the February 2009 transition to all digital TV broadcasting to deliver wireless broadband.

There are many unknowns as to whether white spaces will ultimately deliver broadband over the airwaves in the real world or whether it will remain an impractical concept that goes the way of Broadband over Power Lines (BPL).

They include a probable years long legal challenge by broadcasters worried over potential interference despite FCC field testing showing otherwise. It should be borne in mind the purpose of the FCC testing was to assess potential interference with broadcast and short range microphone signals. How white spaces broadband will perform and the kind of throughput it can reliably deliver remain major unknowns until it's actually deployed.

White spaces broadband could well end up being too little to late once the legal challenges have run their course given that Clearwire is already rolling out 2.5 Ghz WiMAX in some areas and deployment of 4G wireless broadband by telcos is expected by 2010.

Potential key advantages of white spaces broadband over these other wireless technologies is superior range and greater ability to penetrate trees and buildings since it operates in the 700 Mhz TV spectrum.

An additional challenge could come from telcos who may resist providing the necessary "fat pipe" backhaul for white spaces broadband if they see it as a competitive threat to their own wireline and wireless broadband franchises. That could generate more lengthy litigation such that between Internet Service Providers (ISPs) and telcos over access and pricing of line access under the Telecommuncations Act of 1996.

Finally, all wireless broadband technologies at this point don't appear likely to be able to match the fiber gold standard of 100 Mbs and greater throughputs that will increasingly be in demand for fixed broadband services. For the foreseeable, that relegates wireless broadband -- likely including white spaces broadband if it comes to market -- to a transitional broadband technology for fixed locations in areas unserved and underserved by wireline broadband providers and for general mobile use.

Sunday, November 02, 2008

Cable company capitalizes on AT&T's failure to deploy DSL, inability of telco's aged copper cable plant to support bundled services

Two years ago, South Lake Tahoe was one of El Dorado County, California's most puzzling and persistent broadband black holes. Neither incumbent telco AT&T nor the incumbent cable provider, Charter Communications, offered broadband to many of the area's neighborhoods, leaving residents with the dreary Hobson's choice of antiquated mid-1990s era dialup technology or costly, substandard satellite Internet connections.

Patti Handal was fed up with the situation and went door to door with some of her neighbors, collecting signatures of nearly 700 residents of the affected neighborhoods petitioning AT&T to deploy DSL and do so ASAP. Then several months later in June 2007, the Angora Fire incinerated some of these neighborhoods along with portions of AT&T's aerial copper cable serving them. AT&T's replacement of the fire damaged infrastructure enabled the telco roll out DSL to Handal's and some -- but not all -- of the Tahoe neighborhoods stranded on the dark side of the digital divide.

In retrospect, Handal believes the petition campaign to show AT&T demand was there for DSL had no meaningful impact despite the encouragement of the effort by AT&T and local elected officials. Instead, it was the Angora Fire's destruction of AT&T infrastructure that altered the dial up status quo.

Now Handal reports Charter is about to roll out service to much of Montgomery Estates, all of Echo View Estates, all of Angora Highlands, and all of Mountain View Estates with Christmas Valley and all of Montgomery Estates in the near future.

Charter officials were likely motivated by a report in the Tahoe Tribune that AT&T decided in January 2008 not to expand DSL service in the area in the foreseeable future, seizing an opportunity to take and hold market share since in a duopolistic market, whichever provider deploys first enjoys initial customer appreciation and loyalty for bringing them out of dial up purgatory and into the modern era of telecommunications.

Notably, AT&T isn't matching Charter's bundled services including video. According to Handal, an AT&T representative told a South Lake Tahoe Chamber of Commerce meeting two months ago that it would not be offering its bundled U-Verse service. Instead, AT&T has chosen to deploy DSL in some but not all of the areas served by Charter in a limited response to Charter's deployment initiative.

The likely explanation for AT&T's decision to select a partial DSL deployment strategy is going head to head with Charter for bundled services would require AT&T to replace most of its aged copper cable plant that can support only slower DSL speeds but cannot carry the higher bandwidth VDSL signal used by U-Verse.

Despite the expectation that AT&T introduced U-Verse in order to compete with cable companies, the scenario playing out in some South Lake Tahoe communities is likely to be mirrored throughout much of the United States where telcos' aged copper cable plant precludes them from offering bundled services and higher speeds to effectively compete with cable providers.
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