Friday, April 29, 2016

The bankruptcy of Obama administration's telecom policy

Continuing the Broadband Dialogue with States: This week, broadband leaders from across the country convened at the Schools, Health and Libraries Broadband Coalition’s annual conference to discuss key broadband policy issues important to communities and community anchor institutions such as schools, hospitals and libraries. NTIA had the opportunity to participate in several sessions at the conference to discuss our continued efforts to implement Obama Administration initiatives aimed at promoting broadband access, adoption and digital inclusion. We also had the chance to meet with about two dozen officials from 15 states who work on broadband initiatives. The meeting was part of our efforts to keep an ongoing dialogue with state broadband leaders to sustain their peer network as a valuable vehicle for knowledge sharing. Many of these state officials helped run programs that received funding through NTIA’s State Broadband Initiative (SBI). The SBI grants provided funding to each state, territory and the District of Columbia to collect the broadband availability data that helped power the National Broadband Map. In addition, SBI grantees used some of the funding to identify and address obstacles to broadband deployment and adoption in their states or territories.
While the SBI grant program is finished, 41 of the 56 states and territories that received SBI funding are continuing their state broadband programs in some fashion using their own funds. Several states continue collecting data for their own broadband maps, including Minnesota, Wisconsin, Virginia and Utah.

More meetings, more talk and more busy work on useless "broadband maps" that taken as a whole, are not meaningfully deploying fiber to modernize America's rapidly aging, obsolete and spotty telecommunications infrastructure. This is an urgent national problem that grows increasingly so by the month and year. It's one that can't be addressed by shifting it to the states. Strong federal leadership and support are needed.

This National Telecommunications and Information Administration update illustrates the bankruptcy of the Obama administration's telecom policy. It's unfortunate given nearly eight years ago, the Obama administration came into office with the promise of rapid, aggressive action to move the nation forward. Instead, it settled for half hearted efforts that left undisturbed a major obstacle to progress -- incumbent legacy telephone and cable companies.

Thursday, April 28, 2016

U.S. telecom infrastructure modernization an interstate and not urban issue

Great presentation by Susan Crawford on America's telecommunications infrastructure shortfalls and challenges. However, I am disappointed by what I view as Crawford's (and others' such as Next Century Cities) near exclusive focus on cities. Particularly given Crawford's observation that 20 percent of American homes are off the Internet and unable to purchase access at any price -- a situation that has existed for at least a decade. These homes are not in cities but in the exurbs, quasi-rural and rural areas where legacy telephone and cable companies have not modernized their infrastructures to reach them. They need fiber connections just as much if not more so than urban dwellings, especially so given the ability of fiber to bridge the greater distances between them and economic and educational opportunities and health care.

In the last analysis, the United States is a nation of states, not of cities. Telecommunications infrastructure is fundamentally interstate, connecting cities and states to each other and the nation to the world. It would be a mistake to view it too narrowly as an urban matter.

Friday, April 22, 2016

Selling vertically integrated "gigabit" service inefficient, reinforces disparate access

What it's like to take on Google Fiber in Nashville: One firm's take - Nashville Business Journal: For more than two years, Nashvillians have salivated over the eventual arrival of Google Fiber, super high-speed internet courtesy of one of the world's most idolized tech companies. But while Google has yet to share specifics on when that network will officially launch in Music City, other players have made their own moves. Most notably, legacy telecoms AT&T and Comcast have launched their own networks, but smaller players like Shelbyville-based Athena Broadband are also getting in on the gigabit game.
This is a disturbing pattern that reinforces America's crazy quilt, disparate access to advanced telecommunications service. Given the high cost of constructing telecommunications infrastructure, it would be far more efficient to have a single entity build it and allow various Internet service providers to offer services over it. Instead, the U.S. continues to emulate the failed monopolistic vertically integrated business model of the legacy telephone and cable companies with its neighborhood cherry picking and redlining that have led to the nation's widespread access disparities.

Sunday, April 17, 2016

Consquences of flawed U.S. telecommuncations infrastructure modernization policy manifest in Minnesota

Complicated Minn. rules help create broadband haves and have-nots - The underground fiber wires that deliver high-speed broadband access have been laid in fits and starts throughout Minnesota, creating a hierarchy of haves and have-nots around a technology that’s increasingly essential to doing business in the modern economy. Thanks to complicated eligibility rules and overlapping private interests, download speeds available in one community or part of a county are often not yet available in directly adjacent areas — or only at absurdly high prices.

Many have compared America's checkerboard, crazy quilt modernization of its telecommunications infrastructure to the deployment of electrical power distribution infrastructure early in the 20th century. But it's not directly comparable because in Minnesota as throughout the nation, it's highly granular with major access disparities between areas in close geographical proximity. By contrast, electrical distribution infrastructure initially served urban areas, leaving entire rural regions -- and not just parts of neighborhoods and streets and roads -- without power. As mentioned in this story, another difference is huge variations in what people pay for modern telecommunications service from one community to another based on the services offered.

The tax dollar tap is about to start flowing more freely. If Dayton and lawmakers can agree on broadband spending this year — a big “if” given the low expectations at the Capitol for the final work product of the politically divided Legislature — then it’s likely to fall somewhere between the $40 million sought by the House GOP and the $100 million that Dayton wants. It could end up as one of the single biggest state expenditures this year.

Even so, it's nowhere near the funding needed to ensure all Minnesotans have access to modern fiber to the premise connections. The situation on the ground in Minnesota repeats in major aspects all over America. Single states simply don't have the funding to adequately address this. It's a national problem that requires serious national funding. 

But there’s not universal agreement about the best way to spend all the broadband money. At the Legislature’s direction, the Office of Broadband has put its emphasis on connecting what it has labeled “unserved” areas. That leaves home and business owners and elected officials in many areas with the official designation of “underserved” wondering how much longer they have to wait to get a piece of the action.

Policymakers have been misled by incumbent legacy telephone and cable companies to define modern telecommunications service based on throughput speed rather that what's truly important -- fiber to the premise infrastructure. Hence, policymakers have found themselves bogged down for at least the past decade playing a variation of "how many angels can dance on the head of a pin" when taking on telecommunications modernization. The incumbents love it because it creates complexity and delay that serve their goal of postponing the future.

Friday, April 15, 2016

U.S. telecom infrastructure modernization a great infrastructure investment, Mr. President

Obama articulates why Americans are so unhappy: Obama said he hopes going forward there will be a focus on additional steps that can be taken to make a difference. “Why aren't we investing in infrastructure that would put people back to work and strengthen our competitiveness over the long-term?
Indeed, Mr. President. With some 34 million Americans are unable to obtain telecommunications service capable of delivering high-quality voice, data, graphics and video according to FCC data released earlier this year, an ideal infrastructure project for the 21st century would be modernizing and building out America's telecommunications infrastructure.

Such a project would offer both direct and indirect economic benefit and would generate future tax revenues from increased economic activity powered by fast Internet services delivered over fiber connections serving all American homes, businesses and schools. I've offered just such a proposal in my recently issued eBook Service Unavailable: America's Telecommunications Infrastructure Crisis.

Wednesday, April 13, 2016

Key U.S. telecom issue is market failure, not market competition

Verizon FiOS finally coming to Boston as mayor announces $300M fiber network - The Boston Globe: “Today, 90 percent of Boston residents have only one option for broadband,” said Jascha Franklin-Hodge, Boston chief information officer. “The free market only works for consumers when companies compete for their business. And when this project is complete, the majority of Boston residents will have real choice for the very first time.”

*  *  *
In a report on high-speed Internet access last year, the Federal Communications Commission said 45 percent of American households have only one provider for such access.“We have seen first-hand that competition does in fact encourage other providers to build-out or upgrade broadband services,” the commission wrote. A good example of that dynamic is Google Fiber, the Internet giant’s push to install high-speed Internet in select US cities, said Deb Socia, executive director of Next Century Cities, an Internet advocacy group.

This is a parochial misconceptualization of America's telecommunications infrastructure crisis. It's not about competition or the lack thereof in a "free market." Telecommunications infrastructure has never been and will never be a competitive market offering in a market with many sellers and buyers. There cannot be many sellers because the microeconomics simply don't support it. In telecom infrastructure, the "free market" isn't so free -- it's highly constrained by large CAPEX and OPEX costs. The desire for competition is driven by the tendency of many to view "broadband" as other consumer services where consumers are accustomed to having the ability to choose among many vendors. That thinking is flawed insofar as it neglects the underlying infrastructure necessary to deliver it.

The real issue for the United States isn't market competition. It's market failure and the disparate infrastructure access that leaves 34 million Americans unable to obtain telecommunications service capable of delivering high-quality voice, data, graphics and video, according to figures released by the U.S. Federal Communications Commission earlier this year.

Tuesday, April 12, 2016

Fat lady singing on AT&T residential landline service; big telco going out with a whimper

New AT&T Plans Guarantee Pricing for 2 Years; Customers Can Save More Than 40% on on TV, Home Internet and Voice | AT&T: Choose DIRECTV You’ll get our DIRECTV SELECT™ All Included package for $50 a month, guaranteed for two years when you add it to an eligible new or existing AT&T service, like wireless or home Internet. The monthly equipment fees for up to four TV receivers are now built into the cost and guaranteed for two years. Taxes are still separate, since those vary based on where you live.

Add in High-Speed Internet and Voice

When you have DIRECTV you can add home Internet service with speeds up to 6 megabits per second for an additional $30 a month. And you’ll get a Wi-Fi gateway included at no extra charge. All guaranteed for two years. Also, when you pay for both services on a single bill you’ll automatically receive unlimited home Internet data – a value worth $30 a month.

The above excerpt from an AT&T news release issued April 11, 2016 shows AT&T retreating from its VDSL-based U-Verse product that offered Internet throughput that could marginally -- with ample data compression -- support video offerings. It's now offloading its video TV programming to DBS via its recent acquisition of DirecTV and dialing back Internet to first generation ADSL with "up to" speed of 6 Mbs (A fine print footnote tamps that down further, noting "Actual speeds are not guaranteed.")

The fat lady is singing. This latest product bundle marks AT&T's final landline offering in the residential premise market. The big telco is going out with a whimper. Legacy class DSL service isn't going to be able to support growing consumer preference for OTT and on demand video delivered via Internet versus TV programming packages offered over AT&T's DirecTV holding. Nor does it even measure up what the U.S. Federal Communications Commission defines as minimum standard Internet service of 25 Mbs. Moreover, AT&T's announced plans in 2015 to deploy fixed "wireless local loop" Internet service to about 13 million residential premises in its service territory not offered landline Internet service appears to have been a head fake, with no reported deployments.

Monday, April 11, 2016

AT&T seeks state sanction to exit residential premise service, transition customers to mobile wireless

Fellow blogger Steve Blum of Tellus Venture Associates calls bullshit on AT&T for sponsoring California legislation that would relieve it from its premise landline universal service obligations under Title II of the federal Communications Act. Blum has the same problem with the bill as I do. It's dressed up as enabling AT&T to transition from copper POTS service to Internet protocol-based service. As Blum points out, AT&T can do that without the need for enabling legislation. It has chosen not to make an orderly transition over the past two decades. That's a business issue, not one of regulatory policy.

The bill is essentially seeking state sanction to transition AT&T residential landline customers to its mobile wireless service. The thing is, that's not premise service under Title II's universal service obligation. However, with the U.S. Federal Communications Commission not enforcing its 2015 Open Internet rulemaking bringing IP-based services under Title II's universal service requirement, AT&T faces no regulatory consequence for "mobilizing the world" of its residential customers with service not engineered or priced for residential premise service.

Wednesday, April 06, 2016

AT&T miscasts telecom infrastructure as competitive market requiring level playing field

AT&T GigaPower Ready to RSVP | Light Reading: AT&T has been known for taking action, politically and in the courts, to fight municipalities that want to build and operate their own networks, but Harrison insisted her company does not oppose government-owned networks. "We only want to have a level playing field for all competitors, so everyone works by the same rules and regulations," she said. That means a municipality can't favor its own network when it comes to using public rights of way or issuing permits in a more timely fashion.

Translated, that means we (AT&T) want to control the rules on our terms, not the public's. That's an overreach on AT&T's part. The government and the private sector are not equal partners and cannot be because unlike a private company, the government is obligated to act in the public interest. If the government wants to provide telecommunications as a common carrier utility consistent with the U.S. Federal Communications Commission's Open Internet rules (and accordingly serve all properties unlike AT&T's rampant redlining and cherry picking), it can do so regardless of what AT&T or any other legacy incumbent desires.

Finally, AT&T as a monopoly market player knows better than to cast telecommunications infrastructure as a competitive market of many sellers where a level playing field is necessary to ensure fair competition. It is not.

Service Unavailable: The Failure of Competition - Community Broadband Bits Podcast 196 | community broadband networks

Service Unavailable: The Failure of Competition - Community Broadband Bits Podcast 196 | community broadband networks: If you are paying close attention to discussions about broadband policy, you may have come across Fred Pilot's reminders that competition is not a cure-all for our Internet access woes across the United States. The blogger and author joins us for episode 196 of Community Broadband Bits.

Fred Pilot's new book, Service Unavailable: America's Telecommunications Infrastructure Crisis, discusses some of the history behind our current challenges and proposes a solution centered around federal funding and cooperatives.

We discuss the switch from telecommunications as a regulated utility, to which everyone was guaranteed access, to a system relying on competition, in which some people have many choices but others have no options. We also discuss the merits of a national solution vs encouraging more local approaches with federal financial assistance.

Christopher Mitchell interviews me for his Community Broadband Networks podcast. Give it a listen.

Monday, April 04, 2016

Barring ambitious federal program, state & local government P3s with legacy providers not a solution for U.S. telecom infrastructure deficits

CenturyLink, Frontier and TDS mull public, private fiber network partnerships - FierceTelecom: CenturyLink (NYSE: CTL), Frontier Communications and TDS are amongst a growing group of service providers that are considering partnering with local communities to build out and upgrade their networks to support higher speed residential and business services. Jennifer M. Fritzsche, senior analyst for Telecommunication Services - Wireless/Wireline at Wells Fargo, said that while CenturyLink, Frontier and TDS are looking at working with local communities, the one remaining barrier is who will oversee and operate these networks.

Actually, the bigger -- and biggest barrier -- is funding. These legacy players lack business models to generate adequate funding to build out fiber to the premise infrastructure serving all premises within their service territories within a reasonable time frame. But so do state and local governments. Especially as they continue to cope with the aftermath of the Great Recession and many competing needs for public funding such as deteriorated roads and highways and other infrastructure and enormous public pension obligations.

Some local governments and particularly those with pre-existing telecom or electric power infrastructure such as those mentioned in this article are the sole viable candidates for these P3 arrangements. That could change if the federal government launched an ambitious program appropriating the many billions needed to ensure every American home, business and institution has a fiber connection.
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