Saturday, June 28, 2014

New telecom infrastructure financing model struggles to emerge in Utah

A new public-private model to finance the construction and operation of modern fiber to the premise (FTTP) telecommunications infrastructure is struggling to emerge in Utah. Of 11 Utah cities that would be part of a public-private partnership to build out an existing FTTP network serving their region, only half have agreed to participate in the partnership as of this week’s deadline to decide. (See story here)
The sticking point is on the public side of the proposed partnership that entails a $20 monthly utility fee to finance construction and operating costs over a 30-year period. Since the Utah Telecommunications Open Infrastructure Agency (UTOPIA) network is an open access network that will build a fiber telecommunications highway to about 160,000 premises, the utility fee is based on the principle that like paved roads, all properties benefit from its presence directly or indirectly, both in the present and the future.

Those cities that have declined to participate in the UTOPIA partnership should revisit their decision. For four reasons:

  1. FTTP telecommunications infrastructure is needed to serve burgeoning demand for Internet connectivity and high capacity performance both now and in the future. Premise Internet service is shifting into a new phase where it is an essential telecommunications service like telephone service was in the 20th century and not an add-on feature to telephone or cable service in those limited areas where it is offered.
  2. Like roads, telecommunications infrastructure is expensive to build and maintain. That prevents the formation of a healthy competitive market since these high costs make it a natural monopoly. The existing private telephone and cable companies thus have no competitive incentive to upgrade and build out FTTP infrastructure. Private investor-owned providers are also highly risk averse when it comes to expansion since they owe a primary duty to their shareholders to generate profits and dividends with customer needs subordinate to that duty.
  3. Given high construction and operating costs, neither the private sector nor state and local government can shoulder the burden alone. Both must pool their financial resources into a public-private partnership to generate the large sums of necessary capital.
  4. The $240 annual utility fee needed to make the deal pencil out is a modest amount that approximates what many households are already paying every two months for telecommunications services.

Sunday, June 15, 2014

AT&T's dubious "wireless local loop" strategy to boost Internet reach if DirecTV deal blessed by regulators

AT&T’s hard sell on DirecTV: A new type of broadband network - Yahoo Finance: AT&T, however, still owns those 2.3 GHz airwaves in the Wireless Communications Services (WCS) band. In fact, it recently consolidated its WCS holdings across much of the country. And through a compromise with the satellite radio industry, it managed to clear the interference issues that previously made the band useless for wireless data services.

AT&T has said it will use WCS for LTE, but it’s beginning to look like it won’t build the same kind of LTE network it uses to connect phones, tablets and cars. Broadband spectrum analyst Tim Farrar believes AT&T plans to use those 2.3 GHz frequencies for its planned air-to-ground in-flight network. It may choose to use WCS for its fixed wireless network as well. Instead of transmitting to a plane in the sky, the network could link to an antenna. And that antenna could be conveniently mounted on a DirecTV satellite dish – all part of a bundled broadband and TV package.
This is more of the same 23rd century Star Trek quantum subspace channel magical thinking to rationalize an ABF (anything but fiber) infrastructure deployment strategy. Frequencies in that band may work in relatively flat terrain like AT&T's home state of Texas. But they can't penetrate more rugged and forested portions of AT&T's service territory where many premises are still only offered antiquated 1990s dialup Internet. A small New Hampshire wireless Internet service provider explains the problem in this item:
“The challenge with our technology is the land, the hills and valleys,” says Foucher. “The amount of trees is the other major factor. We might be able to connect one person, but their next-door neighbor might be behind a stand of trees that absorb the signals"
And consider this excerpt from a Wall Street Journal item on AT&T's Federal Communications Commission filing on the proposed merger:
If the deal goes ahead, however, it’s unclear how much of an improvement the fixed wireless technology will be. In its application with Federal Communications Commission for the DirecTV deal, AT&T said the transaction makes investing in the technology more feasible, but noted that the service is “relatively untested technology” and “its success in the marketplace is thus unproven.”

Saturday, June 14, 2014

FCC examining reasons for Internet traffic jams - Yahoo Finance

FCC examining reasons for Internet traffic jams - Yahoo Finance: Former FCC Commissioner Michael Powell, now president of National Cable & Telecommunications Association, blasted Netflix and other unnamed Internet companies for trying to "move the goal posts" to suit their own interests. "They want to protect their profits by ensuring that the disproportionate impact caused by delivering traffic to their customers is spread across all broadband subscribers and not just those who actually use the service," Powell wrote in a blog post earlier this week.

Powell's narrow, outdated cable TV perspective is old school thinking that no longer works given the growing multiplicity of those holding a stake in and benefiting from modern Internet-based telecommunications and its vital role in interstate and international commerce.

Netflix is just one of many services the Internet makes available just as roads and highways bring us both direct benefit when we travel over them and indirect benefit when they bring us goods and services. We need a new way of thinking and a new way of building out and regulating the Internet ecosystem that takes into account this reality.

Friday, June 13, 2014

Clashing perspectives from core and edge network players show urgent need for Internet policy review

FCC looking into slow Internet download speeds - Yahoo News: "Netflix has been paying (for traffic delivery) since inception. It wants free, I get it, but someone has to pay for it," Jim Cicconi, AT&T Inc senior executive vice president for external and legislative affairs, said earlier this week.

Netflix streaming accounts for nearly one-third of North American web traffic during peak times, according to research by Sandvine Corp.

Netflix vice president for global public policy, Christopher Libertelli, this week said the company already invests money in delivering traffic to the Internet provider.

"We pay a lot of money to drop content at the doorstep of an ISP. All we're really asking is for the ISPs to swing the door open," Libertelli said at the Aspen Institute think tank. "This has become a new choke point."

These statements make clear as day that it's high time for a core to edge review of Internet policy. 

Netflix believes it is adding value to the network edge operators like AT&T by providing core content for their customers. AT&T and other edge providers however hold the exact opposite view -- that Netflix is instead imposing a cost burden to transport that core content to the homes and businesses they serve. Meanwhile, edge providers prevent core provider content from fully reaching all potential consumers with ultra risk averse policies that leave much of the last mile network infrastructure in their service territories only partially constructed.

Sunday, June 08, 2014

AT&T already selling DirecTV

AT&T isn't waiting for regulatory approval of its recently announced acquisition of DirecTV to start bulking up the DirecTV subscriber base in order to gain greater bargaining power with television programming wholesalers -- the business rationale for the deal.

AT&T has launched a direct mail campaign pitching DirecTV as "Digital TV from AT&T," targeted at redlined portions of its service territory where it has no landline Internet infrastructure. Reviewing the fine print on the reverse of the direct mail piece reveals the "Digital TV from AT&T" is in fact DirecTV. The direct mail promo also pitches residential POTS (plain old telephone service).

Consumers have been able to get POTS and satellite TV for decades. Without an offer of a new and/or compelling value, the direct mail piece isn't likely to be appealing or gain many new DirecTV subscribers for AT&T. Instead, it's likely to end up in the waste can or junk mail recycling.

Saturday, June 07, 2014

Verizon threatens to sue Netflix in war of words over video quality | PCWorld

Verizon threatens to sue Netflix in war of words over video quality | PCWorld

Netflix has cut deals with Comcast and Verizon to get priority treatment for its video streams. But Netflix isn't at all happy about having done so, characterizing it as highway robbery and extortion. And Netflix is making it clear it expects these edge providers to ensure a congestion free experience for Netflix customers under the agreements.

Verizon's position outlined in this story is other network factors not within its control can degrade connectivity and it thus can't be held responsible. That's likely tick off Netflix even more and escalate tensions into a scorched earth court battle. And perhaps into a deal with Google Fiber to go around the incumbent telephone and cable providers?

The growing tensions and threat of litigation makes it clear a holistic, universal pricing and settlement scheme is urgently needed to ensure providers at the core, transport and edge of the network are fairly compensated and share responsibility for stewardship of the Internet ecosystem and ensuring all -- and not just some -- premises at the edge can obtain landline connectivity. If the private players cannot accomplish this, it becomes more likely the government will intervene and do it for them.

Tuesday, June 03, 2014

"VolksNet" solution in Deustchland: residents build their own fiber to the premise infrastructure

German villagers build own broadband network - The Local

With around 22 kilometres of network needed to link up all of the
houses to the high-speed data highway, "we would never have found a
company willing to supply the necessary fibre-optics," said mayor Holger
Jensen. Some 58 other communities in Northern Friesland face
similar difficulties and so the idea was born of clubbing together -
businesses, individuals and villages - to secure access to a modern
technology that is taken for granted in most German towns and cities.

In many nations, governments proclaim they are responding to private market failure that leaves homes and businesses disconnected from modern Internet access. These Germans have a backup plan in case that doesn't happen: they're building it themselves. I'm dubbing it "VolksNet;" maybe the idea will catch on elsewhere in Germany and other places.

Sunday, June 01, 2014

The FCC may finally admit that 4Mbps doesn’t count as ‘broadband’ anymore - Yahoo News

The FCC may finally admit that 4Mbps doesn’t count as ‘broadband’ anymore - Yahoo News

It's sheer folly to try to define "broadband" in 2014 based on throughput speed. Even the term "broadband" itself is obsolete since it was first used in the 1990s to differentiate service more advanced than dialup "narrowband."

What the U.S. needs is ubiquitous fiber to the premise telecommunications infrastructure and a real plan to achieve it and not more useless debating games and PR spin over what constitutes "broadband."

Why you shouldn’t buy the miracle broadband network Softbank’s Masayoshi Son is selling - Yahoo Finance

Why you shouldn’t buy the miracle broadband network Softbank’s Masayoshi Son is selling - Yahoo Finance

An excellent reality check by GigaOM's Kevin Fitchard on claims by Masayoshi and other wireless space players that wireless can substitute for landline premises Internet service.

The numbers simply don't pencil out in terms of cost and carrying capacity and aren't ever likely to as premises bandwidth demand keeps growing rapidly. Star Trek's 23rd century quantum subspace channel hasn't yet arrived, space fans.
Web Analytics