Wednesday, September 30, 2009

FCC: More subsidies needed for U.S. telecom infrastructure

Just days before President Barack Obama took office this year, his then-technology advisor and now Federal Communications Commission broadband czar Blair Levin told the State of the Net Conference that the $6 billion allocated for broadband infrastructure in the forthcoming American Recovery and Reinvestment Act represented only a portion of the new administration's planned efforts to boost broadband deployment in the U.S. (Congress increased that amount to $7.2 billion in the final version of the bill.)

The FCC clearly signaled more robust federal subsidies will be needed in an update released Tuesday on its progress and plans toward developing an overall broadband build out strategy to achieve universal access as required by the economic stimulus legislation.

Current subsidies including the the $7.2 billion in grants and loan subsidies contained in the economic stimulus package "are insufficient to achieve national purposes," the FCC said in a Sept. 29 news release. The reason as explained in the news release: $20 billion in subsidies would be needed to fully deploy slow speed "basic" broadband that would be quickly outmoded. To bring the U.S. where it needs to be for the future -- fiber to the premises providing throughput of 100 Mbs or better -- the number rises to $350 billion.

Monday, September 28, 2009

Internet access -- not the coffee -- is likely primary attraction of U.S. coffee shops

MuniWireless has a summary and link to a social commentary piece that posits Americans go to coffee shops like Starbucks not so much for the coffee and baked goods or even the social ambiance savored -- slowly -- in European coffeehouses.

Instead, the draw is wireless high speed Internet access that has made U.S. coffee cafes more like public computing centers with patrons' making more eye contact with their laptop displays than other customers. (Query: I wonder if any U.S. coffee chains or shops applied for public computing center subsidies in broadband component of the economic stimulus package, especially during the current downturn that has customers buying fewer premium four dollar espresso drinks?)

Rather than socializing and conversing like their European coffeehouse counterparts, Americans are primarily there to get Internet access and to get work done -- or dash out the door with coffee to go in a paper cup instead of one made of china.

I suspect the difference between U.S. and European coffeehouses can't be fully ascribed to sociological factors. For many Americans, Starbucks and other retail coffee venues are about getting affordable broadband that can't be obtained at home due to the fractured and subpar state of premises-based advanced telecommunications infrastructure.

Thursday, September 24, 2009

IP-based service convergence rendering broadband debate irrelevant

Comcast's move into digital voice in 2006, AT&T's disclosure to Investor's Business Daily two years ago that it ultimately plans to shut down its existing voice network and replace it with a VOIP (Voice Over Internet Protocol) system in the limited areas where its U-Verse offering is being deployed and Verizon CEO Ivan Seidenberg's assertion at a Goldman Sachs investor conference last week that his company is migrating from the publicly switched telephone network (PSTN) and central offices designed to handle plain old telephone service (POTS) delivered over twisted pair copper wire to fiber to the premises (FTTP) all signal that wireline telecommunications is undergoing a paradigm shift.

The transition is away from the single purpose voice telephone and cable TV systems of the past to Internet-protocol based telecommunications infrastructure capable of delivering various media including high speed Internet connectivity, voice and video.

This paradigm shift is rendering the debate at the U.S. Federal Communications Commission and elsewhere over what constitutes broadband Internet increasingly irrelevant. What's gaining importance isn't the download and upload speeds that have dominated the debate over defining broadband but rather how to ensure these various IP-based services can be reliably and economically delivered to end users.

That takes a new and improved telecommunications infrastructure. This emerging IP-based infrastructure and the business models that can most rapidly deploy and support it is what truly deserve attention going forward. The pointless back and forth over how to define broadband keeps the conversation oriented retrospectively to the 1990s instead of where it needs to be: forward into the 21st century.

Tuesday, September 22, 2009

Verizon abandons PSTN, commits to next generation IP-based services

Verizon has become the first big telco to fully commit to next generation Internet Protocol-based service delivered over fiber in which the Internet replaces the publicly switched telephone network (PSTN) designed for plain old telephone service (POTS) delivered over twisted pair copper wire.

“We don’t look any different than Google,” Verizon CEO Ivan Seidenberg told a Goldman Sachs investor conference last week. “We can begin to look at eliminating central offices, call centers and garages.” Seidenberg's remarks were reported in Saul Hansell's Bits column in The New York Times.

That means a much smaller, shrinking wireline footprint for Verizon as the company sells off its old copper plant and deploys its FiOS fiber to the premises plant. In effect, Verizon is starting almost from scratch to build a new wireline plant. And just as with the early copper cable plant, urban areas will see it many years before those living outside them will. That sets the stage for history to repeat the cycle of the early copper POTS deployments of a century ago in which less densely populated areas established telecom cooperatives in the meantime. Only this time the coops will be putting up fiber instead of metal.

In contrast to Verizon, the dominant American telco, AT&T, is trying to keep one foot in its PSTN past by attempting to pound the square peg of ever increasing IP-based bandwidth demand -- particularly for video -- into the round hole of copper POTS with its Project Lightspeed/U-Verse FTTN architecture. This gambit leaves AT&T far less strategic headroom and could ultimately lead to the company getting out of residential wireline altogether in the first part of 2010.

Monday, September 21, 2009

FCC Proposes New Open Internet Rules

The concept, referred to as net neutrality, pits open Internet companies like Google Inc against broadband service providers such as AT&T Inc, Verizon Communications Inc and Comcast Corp, which oppose new rules governing network management.

"Today, we can't imagine what our lives would be like without the Internet -- any more than we can imagine life without running water or the light bulb," Genachowski said in his first major policy speech at the Brookings Institution, a public-policy think tank.

But service providers say the increasing volume of bandwidth-hogging services -- such as video sharing -- requires active management of their networks and some argue that net neutrality could stifle innovation.

This is baloney. Big telcos like AT&T continue to introduce technical advances in long haul infrastructure that can handle ever increasing bandwidth. What they really fear is this proposal will have the effect of requiring them to increase bandwidth over the middle and last miles -- and do so faster and at higher cost than their business models permit.

That in turn will lead to pressure for alternative models in which states, local governments and telecom cooperatives will do the job with open access networks, rendering the incumbents increasingly irrelevant over the middle and last miles.

Incumbents protest Missouri broadband stimulus project

There has been much speculation that incumbent telecom providers would challenge projects seeking broadband infrastructure construction subsidies of the American Recovery and Reinvestment Act of 2009.

One such challenge is shaping up in the Show Me State. Missouri has endorsed a proposal by Marshfield-based Sho-Me Power to lay 2,500 miles of new fiber-optic cable and build 200 new wireless towers to improve broadband access. The project seeks $142.3 million in federal stimulus funds that would be matched by $25.2 million in state funds.

The incumbents contend they already have plenty of middle mile in place and worry the state wants to avoid paying for access to their infrastructure and build its own.

Wednesday, September 16, 2009

As with proposed health care coops, U.S. should seed telecom coops

One of the most debated aspects of the current health care reform effort pending in Congress is how and to what extent any overhaul should foster market competition among managed care plans and insurers. Due to the high costs of paying for medical care for large numbers of people and the substantial capital barriers to entry, the market is oligopolistic with a relatively small number of players operating in each state.

Senate Finance Committee Chairman Max Baucus's (D-Mont.) solution unveiled today in his markup of America’s Health Future Act: purchasing pools for small businesses and consumer cooperatives. The Baucus bill appropriates $6 billion in seed money to help the coops cover start-up costs and to meet solvency requirements.

What does this have to do with advanced telecommunications infrastructure? Like health insurance, the market over the so-called "last mile" also tends to be uncompetitive due to the high capital costs of entry. In fact, it's even less competitive than health insurance from consumers' perspective as telecom infrastructure is a natural monopoly or at best, a duopoly. Here too, coops can provide a degree of competition and choice that's lacking.

Not only that, they can help the Obama administration fulfill its stated policy goal of extending broadband access to all Americans by building out advanced telecommunications infrastructure. As Sen. Baucus proposes, Congress and the administration should similarly seed fund telecom cooperatives that also face high start up costs and capital requirements.

Monday, September 14, 2009

"Broadband in a box" is prime example of going backward on telecom infrastructure

Stories like this one in Telephony Online depict the U.S. headed backward in a race to the bottom rather than forward when it comes to deploying advanced telecommunications infrastructure. This so-called "Broadband in a Box" might make sense for some isolated part of the Third World. But what's sad is it's being deployed in the United States of America. West Virginia, to be exact.

"Broadband in a Box" combines two of the absolute worst forms of Internet Protocol-based connectivity: sucking a satellite on the downlink and dialugging for the uplink.

It's so pathetic that it rightfully doesn't even meet the U.S. government's definition of broadband -- already arguably obsolete at 768 Kbs down and 200 Kbs up -- for the purposes of broadband infrastructure subsidies in the American Recovery and Reinvestment Act of 2009.

Wednesday, September 09, 2009

U.S. posts database of first round broadband economic stimulus projects

Summaries of projects proposed in the first round of U.S. broadband stimulus funding that closed in mid-August ($4 billion of the total $7.2 billion allocated for broadband infrastructure subsidies in the American Recovery and Reinvestment Act of 2009) are available via a searchable database at the Web site.

Maps of the proposed projects -- which are also required to be posted at the site -- haven't yet been posted.

Friday, September 04, 2009

Why the incumbents prefer a sub 1 MBs broadband standard

Some are scratching their heads at recent comments submitted by large telcos and cable companies to the Federal Communications Commission recommending that broadband be defined at speeds of under 1 Mbs in the national broadband plan the FCC is due to present to Congress by February.

Why would they set the bar so low, observers rightfully wonder, particularly since such a low standard is already becoming obsolete given the explosive growth in bandwidth demand and video content.

It's clearly incongruous that Comcast, for example, would urge the FCC define broadband at circa 1998 levels of 256 Kbs at the same time it rolls out its DOCSIS 3.0 software upgrade providing downloads of 50 Mbs and potentially higher. Or for Verizon to suggest broadband be deemed 768 Kbs down and 200 Kbs up (the current FCC definition of "basic" broadband service) when its own fiber to the premises offering, FiOS, offers throughput on a par with that of Comcast.

Here's the explanation: These sub 1 Mbs standards are based not on what the providers are technologically capable of delivering today but instead on their business models. They have built out their proprietary infrastructures to the extent these models allow while providing a reasonable return and dividends for their shareholders.

By advising the FCC to define broadband on such obsolete and arguably bogus terms, the providers are essentially telling the feds they aren't serious about the issue. It's a frivolous, throwaway position that summed up says "forget about any national broadband plan and leave us the hell alone." It's reminiscent of the scene in the 1980s film Tin Men where a car salesman asks a tin man played by Danny DeVito what he's willing to pay for a Cadillac and DeVito answers "Five dollars."

That stance is likely to lead to more complaints from top FCC brass that the FCC's call for input on a national broadband plan is producing self serving and unconstructive comment that doesn't provide any illumination or guidance.

Tuesday, September 01, 2009

What do fuel efficiency standards and broadband have in common?

Like the decades-long policy debate over fuel efficiency standards for automobiles, a new one is springing up. This time it's over minimum broadband speeds with incumbent telecommunications providers arguing for lower standards and consumers demanding higher numbers.

Free Press advocates for a "future proof" telecommunications infrastructure. Based on current, proven technology, that means fiber optics to the premises. Free Press also correctly observes that unlike automotive technology that can be incrementally improved to deliver more fuel efficient vehicles, telecommunications is basic infrastructure and thus requires the right choices to be made up front to protect it from obsolescence and provide sufficient flexibility to accommodate both current and future needs.

Fortunately, there's a way around this debate, which the Federal Communications Commission will soon discover is unlikely lead to a useful outcome or do anything to improve America's fragmented and inadequate telecommunications infrastructure. It's empowering local governments and nonprofit telecommunications cooperatives to build and own their own fiber telecommunications infrastructure -- and ultimately define broadband on their own terms.

Canada's version of broadband stimulus

Two weeks after the U.S. government closed out the first round broadband stimulus funding applications seeking seven times more funds than available, the Canadian government is ramping up its own broadband infrastructure subsidy program.

Like the U.S. broadband stimulus targeting unserved and underserved areas, it too appears aimed at creating jobs and economic activity as rapidly as possible. Applicants have until Oct. 23 to apply for subsidies of up to 50 percent of project costs (compared to 80 percent subsidies under the U.S. Broadband Technology Opportunity Program.)

Unlike the clearly inadequate minimum 768 Kbs download standard for the U.S. program, the Broadband Canada: Connecting Rural Canadians initiative calls for a minimum standard of 1.5 Mbs. While twice that of the U.S. minimum, that standard is already on the verge of obsolescence, barely capable of supporting the growing amount of IP-based video content.
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