Saturday, July 31, 2010

Telecom infrastructure upgrades could aid economic recovery

PALM COAST, FLA. -- The recession is claiming yet another victim: Americans' near-constitutional right to pick up and move to a better job.

Labor mobility has nearly ground to a halt in the past two years, and policymakers are increasingly worried that the slowdown is not just a symptom of the nation's economic struggles but also a barrier to overcoming them.

With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 -- a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.

"In the past, people tended to move to where the jobs are," said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. "Now it is necessary to have more of a strategy to move the jobs -- and create new jobs -- in areas where the people are."

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Bringing work to where people live also means they'll need affordable access to modern, Internet protocol based telecommunications services that will allow them to work remotely and teleconference with their employers and customers.

There's an added bonus. Constructing fiber to the premises telecom infrastructure is as Christopher Mitchell of the Institute for Local Self-Reliance pointed out in a recent radio interview is very labor intensive, which means badly needed jobs.

Sunday, July 25, 2010

Residents near two state capitols struggle with outmoded telecom service

Residents living near state capitols might expect to have access to modern telecommunications services given their proximity to their states' political power centers. Not necessarily so.

As noted on this blog recently, the town of Berry located near Wisconsin's capital, Madison, is a case in point. Ditto for some folks living just four miles from the Vermont statehouse in Montpelier, according to this item from ABC News.

Like their countparts several states away in Berry, the natives are restless and their patience worn thin after much talk and promises but little action. While telecom infrastructure upgrades aren't yet certain, it's clear more talk is on tap. Vermont gubernatorial candidates are raising the issue of lack of advanced telecom infrastructure in year's campaign, the ABC News article notes.

Rural electrification better model for driving expansion of next generation networks

Give a listen to Christopher Mitchell's interview on the public affairs radio program Minnesota This Week. Mitchell is director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance.

Near the end of the interview, Mitchell advocated government loans and loan guarantees to telecom cooperatives similar to those made by the U.S. federal Rural Electrification Administration to electric power coops starting in the 1930s. Mitchell said this would be a better policy than subsidizing investor owned telcos.

Such subsidies, Mitchell suggested, don't provide sufficient incentive to and accountability of private providers to offer quality service and network upgrades. Since community based cooperatives don't have to earn a return for investors, they can concentrate solely on serving their members.

Saturday, July 24, 2010

Local governments, coops better positioned than legacy providers to meet burgeoning bandwidth demand

Check out Lance Whitney's July 21 cnet News article that illustrates the growing conflict between burgeoning bandwidth demands of Internet video content and the incremental billing business models of the legacy telco and cable providers that ration bandwidth.

Faced with the explosive demand for bandwidth, the legacy providers are responding the only way they know how given their business models: charging more money for more bandwidth via tiered service offerings and rationing bandwidth with the use of caps.

This puts the legacy providers in a bad spot since incremental bandwidth pricing and punitive caps will only tick off their customers. What's worse is the legacy providers can't upgrade their infrastructures to accommodate the jump in bandwidth demand and leave room for future growth over the foreseeable. That's because they are owned by shareholders who have been with them for decades and expect a nice safe, utility company style dividend -- money that can't be allocated to capital expenditures.

The take away here is alternative providers such as local governments and consumer telecom cooperatives who don't have to pay those fat shareholder dividends are better positioned to deploy fiber to the premises infrastructure that can easily deliver the bandwidth needed today and leave headroom for tomorrow.

Tuesday, July 20, 2010

FCC: 14 to 24 million Americans lack Internet access

Readers of this blog know from past posts on U.S. Federal Communications Commission reports on broadband infrastructure deployment know that it effectively ground to a halt in 2006 as legacy telco and cable companies reached the limits of their respective business models.

Four years on, the FCC has formally recognized this reality, noting in a news release today announcing its latest report under Section 706 of the Telecommunications Act of 1996 that between 14 and 24 million Americans "still lack access to broadband, and the immediate prospects for deployment to them are bleak."

As with past 706 reports, the table titled Percentage of Residential End-User Premises with Access to High-Speed Services by State shows those states where telco DSL deployments stalled because of technological and business model constraints.

Click here for the full report.

El Dorado County co-op seeks fiber-optic Internet access

Nice article in today's Sacramento Bee on the telecom consumer coop formed by your blogger...

Saturday, July 10, 2010

Telecom caught at crossroads of change without a sustainable business model

IBM has issued a comprehensive outlook on the future of the telecommunications industry. To summarize, it describes an industry caught at the crossroads of change amid rapid growth of Internet protocol-based telecommunications without a sustainable business model. No surprise there since telecom as an industry -- like the cable industry -- is based on a closed, proprietary system put in place many decades ago to deliver voice or television programming over copper cable plant. It wasn't designed with the Internet in mind and thus doesn't have a cheap, easily executable upgrade path to put it in tech speak.

Moreover, neither telcos nor cable providers have a business model that will allow them to construct next generation, Internet protocol-based fiber to the premises infrastucture that can deliver multiple digital services to most all premises within their service areas. America's biggest telco, AT&T, admitted as much in a statement published in the New York Times yesterday directing customers not served by its wireline plant to its "broadband" satellite service.

Their corporate cultures naturally resist change. That's why they deploy battalions of lawyers, lobbyists, flacks and astroturf groups to defend the status quo and fight the future while preserving their conservative, risk averse business models based on the incremental billing schemes of the past -- even though these schemes are not a good fit with next generation telecom services.

Consequently, I believe we'll see a combination of the "Market Shakeout" and "Survivor Consolidation" scenarios in the IBM forecast come to pass. In fact, it could be aruged the "Market Shakeout" scenario in which "government, municipality and alternative providers extend ultra-fast broadband to gray areas, while private infrastructure investments are limited to densely populated areas" has been already playing out over the past several years.
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