Thursday, May 26, 2016

Alphabet's Eric Schmidt nails it: Incremental thinking holding back progress

Speaking at Bloomberg’s Breakaway conference Wednesday in New York, Schmidt also said Alphabet, the holding company that owns Google and other businesses including Nest and Fiber, will probably never break up and its job is to seek out transformative solutions. “There’s tremendous optimism around this next generation of scientists and thinkers,” Schmidt said. “There are problems that bedeviled us for centuries that can in fact be solved.” The government should play a role in accelerating these developments as they’ve done in the past, he said, pointing to initial public investment in Silicon Valley that allowed it to become the high-growth area it is today. Schmidt, who supports Democratic presidential candidate Hillary Clinton, said the politicians and business leaders in the country have gotten used to accepting incremental solutions rather than taking bigger risks for the larger reward of innovative technologies and methods.“Government spends an enormous amount of money on the wrong things,” he said. “I would just like to have a little bit of it on these things which are moonshots, enormous-scale things that can benefit the country.”
Source: Google’s Schmidt Sees Genetics Advances, No Alphabet Breakup

When it comes to modernizing America's legacy metallic telecommunications infrastructure designed for a bygone time of voice telephone calls and cable television, Schmidt nails it when he points to incrementalism as a major impediment. 

As I wrote in my recent eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis, over the past two decades the nation has concentrated on achieving incremental increases in "broadband speeds" on legacy infrastructure rather than modernizing and replacing it with fiber optic connections for every home, business and institution capable of supporting the Internet-protocol based information, communications and services of today and tomorrow. In my eBook, I propose a crash federal initiative to build it given how far behind the nation has fallen. Google Fiber can't do it alone.

Wednesday, May 25, 2016

America doesn’t have a “rural broadband” problem. It suffers from incomplete telecom infrastructure.

America’s telecommunications infrastructure deficiencies are often framed as a “rural broadband” issue and frequently compared to the lack of electric service in rural areas of the nation early in the 20th century. Both the description of the problem and the analogy are wrong.

They’re incorrect for a couple of reasons. First, landline Internet service more advanced than 1990s dialup can often be found in nominally “rural” areas. But typically some premises have access while others a mile or two down the road, or over the hill or around the bend do not. Even premises Internet service providers believe are connected are not, resulting in unpleasant surprises for new residents moving in under the impression service was available. That does not make for a “rural broadband” problem. The problem is partial, incomplete and highly granular landline telecom infrastructure.

By comparison, the lack of electrical distribution infrastructure in rural counties during the first few decades of the previous century was truly a rural problem. It wasn’t granular, with some communities and neighborhoods having power and others left in the dark. Entire rural regions had no electrical service, which was concentrated in cities.

The “rural broadband” label has an unfortunate aspect. It allows legacy incumbent providers and public policymakers to segment off and mischaracterize the problem as one affecting only thinly populated, remote regions of the nation and thus not requiring urgent action.

It does. The United States is a generation behind where it should be when it comes to modernizing its legacy metal cable telephone and cable TV infrastructures with fiber optic cable connecting every American home, business and public institution. If we continue to shrug our shoulders and insist on believing it’s a “rural broadband” problem, the United States risks slipping into third world nation status when it comes to its telecom infrastructure.

Virginia officials seek info about residents’ Internet service | WRIC

Virginia officials seek info about residents’ Internet service | WRIC: RICHMOND, Va. (AP) – Virginia officials want residents to help them pinpoint what areas in the state lack access to broadband Internet service. The new initiative announced Tuesday by Gov. Terry McAuliffe is aimed at helping officials fill gaps in broadband coverage across the state. McAuliffe is asking residents to sign onto a new website to let officials know the level of internet connectivity they have.
Policymakers have been doing this all over the United States for at least a decade. This strategy plays well for politicians since it makes them appear concerned about modern telecom infrastructure access disparities and is politically safe because it doesn't offend legacy incumbent providers. Sadly, it doesn't build a bit of needed infrastructure as the access disparities grow more urgent as time goes on.

Multiple fiber connections in some regions while others stuck in 1990s highlights U.S. telecom infrastructure disparities

Google Fiber franchise coming up for vote

This story linked above illustrates the extreme degree of disparate access to modern fiber optic telecommunications infrastructure that is developing in the United States. As the story reports, Louisville Kentucky and environs could end up with as many as four companies building fiber to the premise telecommunications infrastructure (Google Fiber, AT&T, and two other smaller providers). This at the same time millions of American homes and small businesses are offered only dialup or first generation DSL while others make do with satellite, mobile and fixed wireless services not capable of meeting the U.S. Federal Communications Commission's Internet service standard for supporting high-quality voice, data, graphics and video.

The driver of this perverse situation is the winner take all ethic that's part and parcel of the predominant vertically integrated business model in which service providers own both the fiber connection to premises and the services delivered over it. Publicly-owned open access fiber infrastructure serving every premise offers a far more efficient model and isn't prone to customer churn and market failure. Only one fiber connection is necessary to deliver telecommunications services given the substantial carrying capacity of fiber.

Monday, May 23, 2016

FCC brings Internet under Lifeline program – but without universal service obligation

The U.S. Federal Communications Commission has issued a final rulemaking bringing Internet service under the Lifeline program established in 1985 requiring discounted telephone service for qualifying low-income households.

However, under the final rule, incumbent telephone companies are not required to offer discounted Internet service to a Lifeline eligible low-income household requesting service in areas where the companies have not modernized and built out their plants to provide Internet service. That contravenes the FCC’s Open Internet rulemaking adopted in 2015 classifying Internet as a common carrier telecommunications utility under Title II of the Communications Act. Title II requires Internet service be provided upon reasonable request. The final rule also exempts telephone companies receiving FCC subsidies for universal service support in high cost areas from having to provide Lifeline Internet service.

We are sympathetic to ILECs’ (Incumbent Local Exchange Carrier) concerns about requiring them to offer broadband in Census blocks within their ETC designated service areas …where broadband services are not commercially available,” the final rule states. “In addition, for recipients of high-cost support, in those areas where the provider receives high-cost support but has not yet deployed a broadband network consistent with the provider’s high-cost public interest obligation to offer broadband, the obligation to provide Lifeline broadband services does not begin until such time as the provider has deployed a broadband network and is commercially offering service to that area.”

Despite the final rule’s contravention of the FCC’s 2015 Open Internet Rulemaking, the FCC employs Orwellian doublespeak in insisting it does not:
“Our actions today are consistent with the universal service goals promulgated by Congress. Congress articulated national goals in Section 254 of the Act that services should be available at “affordable” rates and that “consumers in all regions of the nation, including low-income consumers . . . should have access to telecommunications and information services.”

Sunday, May 22, 2016

Pleas for more competition make case for public option in telecom infrastructure

America’s telecommunications infrastructure crisis is fundamentally a microeconomic problem. Vertically integrated Internet service providers and consumers have difficulty transacting on mutually agreeable terms that consumers regard as offering good value. And about one of five American homes and small businesses can’t purchase landline Internet connections at all because none are offered to them.

Many consumer advocates and commentators frame the economic problem as one of insufficient competition. If there were only more providers offering services, then more consumers would be offered service and at superior value over that sold by legacy telephone and cable companies. After all, that’s how the competitive market works for other consumer services such as home improvement, landscaping, and housecleaning. Offer good service at reasonable value, you’re competitive. If you don’t, you’re not and could end up run out of business by the competition. The same rules should apply to “broadband” since it too is a service, the thinking goes. Consumers want the freedom to ditch their service provider and choose another offering better value.

It doesn’t work that way for telecommunications services including Internet because they are vertically integrated services – typically delivered by the same providers that own the infrastructure to deliver them. Due to the high cost of building and maintaining that infrastructure, there will only be one or two providers. Adding more competitors to build alternate “pipes” to compete with these providers isn’t an option because these high capital and operating costs discourage new entrants. Choice A is the telephone company. Choice B is the cable company. If they both suck on service and value – which they often do -- you’re out of luck.

But there is an alternative – the “public option” as it was termed in the recent policy discussion on health insurance reform: publicly owned infrastructure. That disintermediates ownership of telecommunications delivery infrastructure from the services offered over it like voice, data and video. In doing so, it eliminates the potential for abuse of the monopoly market power of the vertically integrated legacy providers to hold consumers hostage. The potential for abuse is substantial because a home or business must “subscribe” to their connections. Without a subscription to the hookup, none of these services are available. Having ownership of the infrastructure allows them to call all the shots. It doesn’t have to be that way.

There is only one entity in the United States that has the economic capacity to construct publicly owned, modern fiber optic telecom infrastructure that connects all American homes, businesses and institutions: the federal government. I discuss in detail in my recent eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis.

Thursday, May 19, 2016

UK considers universal service legislative requirement

Families face paying thousands for high speed internet access | Daily Mail Online:

Every family will win the right to demand a ‘fast’ broadband connection it was announced in the Queen’s Speech yesterday, but those in remote communities may have to pay hundreds of pounds to get it. The new Digital Economy Bill hopes to finally bring broadband technology to one million people whose properties have until now been treated as economically unviable or too difficult to provide with high-speed connections. But the legislation falls short of the Conservative Party’s manifesto pledge to ensure every home gets access to so-called ‘superfast’ broadband.
         *  *  *
Adam Marshall, of the British Chambers of Commerce said: ‘If implemented in full and at pace, this could go some way to improving the poor digital connectivity that far too many firms face.’Government sources said BT, which is in line for subsidies worth 1 billion to roll out broadband to 95 per cent of homes by the end of next year, has resisted the idea of a legal guarantee. But ministers have decided the threat of legal action is needed to ensure the final five per cent of homes also get a decent connection.

It boggles the mind to consider a relatively small island nation has so many premises still off the Internet grid in 2016. The U.S. already has a universal service/nondiscrimination requirement in law per the Federal Communications Commission's 2015 Open Internet rulemaking but is not enforcing it.

Tuesday, May 17, 2016

Growing bandwidth demand obsoletes Verizon Wireless 4G LTE Installed premise Internet product offering

Fellow blogger Doug Dawson has written extensively on burgeoning consumer bandwidth demand rendering obsolete DSL (Digital Subscriber Line) as an interim premise Internet service on the way to fiber to the premise (FTTP).

Now the trend is claiming Verizon Wireless's 4G LTE Installed service as its latest casualty. The service offers inadequate throughput to serve multiple devices. Plus its pricing is unworkable relative to current premise bandwidth needs.

The service is priced similar to Verizon's mobile service in monthly bandwidth consumption tiers. The more bandwidth used, the larger data plan a household will need. There are substantial overage charges for using more bandwidth than the contracted plan.

A single home office computer with daily business use and taking into account software updates would consume the bulk of the most generous plan offered -- 30 gigabits of data. That plan goes for an eye watering $120 a month -- leaving little left over for other devices.

Wednesday, May 11, 2016

Google Fiber's national ambitions, wireless as interim service, and going to debt markets- Recode

Google Fiber is the most audacious part of the whole Alphabet - Recode

This Recode article quotes an unnamed former Google Fiber staffer as saying Google Fiber's plan is "to grow to be nationwide at some point." The question is at what point considering the enormous backlog of work needed to modernize America's legacy metallic telecommunications infrastructure designed to deliver cable TV and phone service with future proof fiber to to the premise plant. The nation is already a generation behind where it should be relative to completing that task.

The piece also raises the previously reported point of Google Fiber exploring using wireless as an interim delivery technology until fiber to the prem can be installed in order to speed up deployment. But that won't provide a dramatic geographic acceleration since fast wireless service requires fiber backhaul to be installed nearby.

Also mentioned is the prospect of Google Fiber going to the debt markets to borrow the many billions it will need to extend fiber to nearly every American home, business and institution. And many, many billions it will need. As the late Senator Everett Dirksen is oft quoted, "A billion here, a billion there and pretty soon you're talking about real money." And that real money spells the difference between fiber to the press release and fiber to the premise.

Tuesday, May 10, 2016

Motley Fool item on 5G as premise service overlooks #FTTP

AT&T and Verizon's 5G Ambitions Are Cable's Worst Nightmare -- The Motley Fool: When it comes to picking a cable Internet provider, you usually have one (maybe two, if you're lucky) options. Time Warner Cable (NYSE:TWC) and Comcast (NASDAQ:CMCSA) provide Internet to about 71% of new Internet subscribers in America right now. That percentage is expected to stay about the same if Charter Communications' purchase of Time Warner Cable goes through.

The near-duopoly of cable providers in many regions of the country is a long-standing problem -- and wireless providers may have found a solution. You may already know AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) are in the process of testing 5G networks, which will bring much faster and reliable connections than even 4G LTE. But what you may not know is that 5G could also be used as an ultra-fast wireless connection for home broadband, too.

How 5G home broadband works.
Cellular connections work by sending out long-range signals from very large towers, but 5G home broadband would work a bit differently. AT&T and Verizon are testing out what's called "fixed wireless" in which a home wireless router would receive a signal from small cellular boxes (called small cells) placed much closer to your home than large towers.

Missing from this Motley Fool story is the cost/benefit tradeoff discussion comparing 5G to fiber to the premise (FTTP). Wireless does indeed have greater throughput capacity when the signal doesn't have to travel far such as in-building Wi-Fi. But it will take a lot of fiber installed relatively close to customer premises to support those small cell sites. So close, in fact, that it raises the question as to whether 5G makes sense as a premise telecom service delivery technology considering the small additional cost of bridging the short distance between small cell sites and customer premises with a direct FTTP connection. A connection that is far more future proof, less subject to interference and obstacles such as hills and foliage and offers far greater carrying capacity.

Sunday, May 08, 2016

Western MA microcosm of U.S. telecom infrastructure crisis

We Need Fiber in Western Mass — and In Our Politicians, Too. — Medium: What’s infuriating is how our telecommunications regulatory system failed us. It has been many years since the government realized that speedy internet connectivity is a vital necessity, like electricity or phone service. Indeed, in the early part of the century President George W. Bush promised that affordable high speed Internet would be available to all Americans — by 2007. President Obama made similar promises. There was considerable precedent.

Levy's right. As I discuss in my 2015 eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, it's been known for many years the United States needed to modernize its telecom infrastructure by replacing the metal cable of the legacy telephone and cable companies with fiber optic infrastructure to deliver digital today's Internet protocol-based services. But no transition plan was put in place and executed. So here we are today with woefully inadequate infrastructure. What's happening in western Massachusetts is a microcosm of how the broader national crisis is playing out.

To get telephone services in rural areas, the FCC established a Universal Service Fund. Something similar was proposed for last-mile internet. But it has yet to appear. In Massachusetts, federal stimulus funds went to “middle-mile” efforts — not actually providing service to homes. Schools and libraries in Western Mass had internet, but not actual people.

Segmenting telecom infrastructure into "middle mile" and "last mile" is part and parcel of the incremental thinking that has led to the current crisis. As Levy points out, middle mile gets built but the last mile is frequently neglected. Instead, we need to think of telecom infrastructure more holistically as a single, integrated delivery mechanism. Just as an interstate highway links to secondary roads and together form useful transportation infrastructure, the middle mile is useless unless it can connect to the last mile. Connecting as many premises as possible also observes Metcalfe's Law, wherein the value of a communications network increases with the number of users connected to it.

Thursday, May 05, 2016

Definition of competition in premise telecom infrastructure depends on audience perspective

Crazy Talk from Another Telco-Funded Think Tank - Community Broadband Bits Podcast 200 | community broadband networks

What's all the crazy talk about? In a word, competition. Specifically, competition in premise telecommunications infrastructure. It's very important to distinguish the audience when discussing competition in this context.

From the point of view of the legacy telephone and cable companies that enjoy a natural monopoly or duopoly with their vertically integrated business models where they own both the infrastructure and services offered over it, any public sector infrastructure project is indeed competition because it offers a less privatized or fully deprivatized model to provide telecommunications services -- often using an open access business model versus vertically integrated.

But that's NOT competition from a consumer perspective. Given the natural monopoly/duopoly nature of telecom infrastructure, consumers will never be able to choose from among many competing sellers -- the definition of a competitive market. Due to high cost barriers to enter and operate telecom infrastructure, there will only be one or two providers.

What we are talking about here isn't competing market offerings but instead competing public policy approaches to ensuring universal, high value telecommunications service. Given widespread consumer complaints of neighborhood redlining, poor value and customer service using the current privatized model, the public option looks more and more appealing as time goes on.

Internet Innovation Alliance's oddly bearish view of Title II

Study Says: Broadband is $1 Trillion Econ Driver | Multichannel: The U.S. broadband and ICT sectors have generated over a trillion dollars in annual value to the U.S. economy, according to an economic analysis commissioned by the Internet Innovation Alliance. The study concludes that all that activity was generated thanks to an "environment of light federal regulation." And while the study authors say they don't know how the FCC's Title II reclassification of ISPs will affect economic growth and employment, they predict from former analysis and review of the literature and history that it could adversely affect broadband/ICT investment and have "significant secondary costs" for other industries.

This is where the study authors' analysis of light regulation gets awfully light itself. No explanation of how reclassification of Internet as a common carrier telecommunications utility under Title II of the Communications Act would adversely affect investment in telecom infrastructure.

In fact, one could also argue the opposite. By mandating universal service, Title II would spur investment and generate knock on effects for other industries served by expanded and upgraded telecom infrastructure to meet that requirement. According to the organization's website,"IIA seeks to promote public policies that support equal opportunity for universal broadband availability." That's certainly compatible with Title II. Finally, consider the oddity of a bearish projection like that coming from an organization called the Internet Innovation Alliance.
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