Saturday, April 21, 2012

SB 1161 doesn't touch California's real telecom problem

There was a fair amount of mainstream media coverage this week of pending California legislation that would state public policy that the state's Public Utilities Commission does not have regulatory jurisdiction over Internet protocol (IP) services.  As this Sacramento Bee story reports, consumer groups fear SB 1161 would give monopoly incumbent telcos too much free reign as they migrate away from plain old telephone service (POTS) delivered over twisted pair copper.  The telcos and the bill's author, Sen. Alex Padilla, support the policy to remove regulatory uncertainty and allow unfettered expansion of the Internet and IP-delivered telecommunications services to homes, businesses and institutions.

SB 1161 would neither help nor hinder that goal.  California's real problem is incomplete Internet infrastructure that leaves millions of Californians disconnected from the Internet.  Since telecommunications services tend to be a natural monopoly market, the fears of consumer groups of any form of reduced regulatory oversight are understandable.  However, their concerns would make more sense if all Californians had fiber connections to the Internet via a monopolistic provider.  They don't.  California's telecommunications market suffers from market failure because the high cost business models of the incumbent telcos (and cable companies) don't allow them to achieve that level of service.  Accordingly, the CPUC should do a better job of assisting alternative, lower cost business models emerge -- such as consumer-owned telecom cooperatives -- take root and thrive.  So far, the CPUC has failed to do so.

Saturday, April 07, 2012

Drop DSL and go suck our sooper dooper satellite!

Satellite Internet providers that serve a captive market of those who are off the Internet grid because of a lack of terrestrial infrastructure now hope to attract DSL subscribers by offering higher speeds. But as this USA Today article points out, converting DSL customers won't be easy since they have to buy the dish and installation. Not to mention they'd be getting much higher latency, hardly worth the trade off for higher speeds.

Satellite providers are a national embarrassment that point up how just how much of the United States remains a backward Internet backwater. The service should only be available in the Alaskan wilderness and places like Buford, Wyoming (Pop. 1).

Sunday, April 01, 2012

Why America needs lower cost, coop business models to complete Internet infrastructure

The excerpt below from Timothy B. Lee's discussion in the current issue of National Affairs of what ails America's regulation of Internet infrastructure states a strong case for alternative, lower cost business models such as telecommunications cooperatives to bring fiber connections to nearly all premises and to keep cable companies from gaining near total market dominance:

FiOS is Verizon's attempt to solve this problem by replacing its slow telephone cables with fiber-optic connections capable of offering speed that can compete with Comcast's. But in 2010, Verizon announced that it was winding down its FiOS installation efforts. Verizon plans for the network to reach around 18 million households, but not in some major metropolitan areas, including a few (like Boston) at the heart of its service area. News reports cited the high costs of the project as a reason why it was not being extended to all homes in Verizon's territory. Meanwhile, AT&T's project to partially replace its copper network with fiber, "U-Verse," is also being hampered by high costs. U-Verse service is faster than a traditional DSL line, but it is significantly slower than Verizon's and Comcast's high-speed networks, and it will not reach all households in AT&T's service territory. This might explain why, in the third quarter of 2011, Comcast added more than twice as many subscribers as did the seven largest telephone incumbents combined.
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