Tuesday, May 30, 2017

The adverse socioeconomic impact of deficient telecom infrastructure

Rural America Is the New ‘Inner City’ - WSJ: Just two decades ago, the onset of new technologies, in particular the internet, promised to boost the fortunes of rural areas by allowing more people to work from anywhere and freeing companies to expand and invest outside metropolitan areas. Those gains never materialized.
The primary cause: poor public policy and planning a generation ago neglected to build universal digital telecommunications infrastructure to succeed universal voice telephone service. 

Deficient telecom infrastructure isn’t limited to deep rural areas. It also plagues outer suburban, exurban and quasi-rural areas redlined by legacy incumbent telephone and cable companies. Consequently, the adverse socioeconomic outcomes described in this article could also befall those areas.

Thursday, May 25, 2017

Silicon Valley needs heartland help in net neutrality fight - Axios

Silicon Valley needs heartland help in net neutrality fight - Axios: The Bay Area has long been a bastion of support for strong net neutrality rules. Now supporters are looking somewhere else for backup: Trump country. Why it matters: With net neutrality rules under assault, proponents know they need to get the attention of policymakers with roots in the heartland to show support isn't isolated to the Silicon Valley bubble.
This is the crux of the problem defining the U.S. Federal Communications Commission 2015 Open Internet regulations as "net neutrality." It really doesn't mean much to the average telecommunications consumer. Moreover, in the heartland the real benefit of the regulations classifying Internet as a common carrier telecommunications utility service under Title II of the Communications Act is Title II's universal service and anti-redlining provisions. These are real world concerns in the heartland, where millions of Americans have been turned down for years by incumbent ISPs when they attempt to obtain landline Internet connections to their homes and small businesses.

Wednesday, May 24, 2017

Observations on Penn Law review of muni fiber

New Penn research assesses financial viability of municipal fiber networks •Penn Law: Using industry standard financial analysis tools on five years of official data, the study finds that 11 out of the 20 fiber networks assessed do not generate enough cash to cover their current operating costs and only two out of the 20 are on track to recover their total project costs during their 30-40 years of expected useful life. Key findings include:

  • 11 of 20 projects studied are cash-flow negative, many substantially so.
  • 5 of the 9 cash-flow positive projects are generating returns that are so small that it would take more than a century to recover project costs.
  • 2 of the 9 cash-flow positive projects would have a recovery period of 61-65 years, beyond the expected useful life of a fiber network.
  • Only 2 of the 20 projects studied earned enough to expect to cover their project costs during the useful life of the networks, one of which is an outlier that serves an industrial city with few residents.
  • The analysis also models the returns for a hypothetical project, finding it would take over 100 years to recover expected project costs.

Three observations on this study:

  1. The study's findings do not invalidate the concept of municipally operated telecommunications infrastructure per se. Rather, they suggest the financial model requires further assessment and adjusting and enhanced federal subsidization.
  2. The scope of the study does not encompass the external benefits of modernized telecommunications infrastructure, particularly in areas where investor-owned private network investment would also be NPV (Net Present Value) negative, miring these areas with substandard infrastructures and associated adverse economic implications.
  3. The executive summary states that "[a]lthough some claim that investing in fiber serves a necessary function of future-proofing a municipality’s infrastructure, evidence shows little current need for such high broadband speeds." This is the classic infrastructure planning error of estimating future infrastructure needs based on present needs and detracts greatly from the study's credibility since this point is typically made by legacy incumbent telephone and cable companies opposed to public sector telecommunications infrastructure modernization projects as an encroachment on their largely unregulated service territory monopolies.

Tuesday, May 23, 2017

Potential game changer: PG&E could alter California telecom landscape

Image result for pg&e

An application by Pacific Gas & Electric to the California Public Utilities Commission to become a wholesale operator of fiber optic telecommunications infrastructure could be game changer in California where many customer premises nominally in the service territory of AT&T lack landline Internet connections or are limited to slow first generation DSL service over deteriorating copper cable plant.

PG&E’s vast 70,000 square mile northern and central California electric service territory overlaps regions of the Golden State where telecom infrastructure deficiencies are most prevalent: in and around the Central Valley municipalities of Modesto and Fresno, in the Sierra Nevada foothills east and northeast of the state capital of Sacramento in Placer and El Dorado counties and up the Interstate 5 corridor in Sutter, Butte and Yuba counties to the Shasta County seat of Redding in far northern part of the state. In addition to AT&T, PG&E’s electric service territory encompasses the telecom service territories of Frontier, Consolidated Communications and Citizens Telecommunications Company of California. All of these telcos could be customers of PG&E’s planned wholesale fiber as well as mobile wireless operators seeking backhaul bandwidth.

If approved by regulators, PG&E’s application could also attract new players who would like to provide fiber-based premise telecommunications service in areas lacking robust landline connections but can’t make the numbers work due to the high cost of building new fiber infrastructure. Having PG&E build it and lease it to them as competitive local exchange carriers (CLECs) would solve that problem. PG&E would also be spared considerable deployment expense and delay since it owns utility poles that would provide the backbone for aerial fiber plant, the optimal infrastructure architecture to serve such a large and geographically diverse area, much of it with rugged terrain.

PG&E’s move holds the potential promise of universal service for northern and central California, which for many years has been a crazy quilt checkerboard of served, underserved and unserved areas, leaving many consumers to struggle with substandard, poor value dialup, legacy DSL, fixed and mobile wireless and satellite service.

For more background on PG&E’s application, Steve Blum’s Blog has more details here and here.

Wednesday, May 17, 2017

House Dems Propose $40B Broadband Investment | Multichannel

House Dems Propose $40B Broadband Investment | Multichannel: According to a breakout of the bill, the broadband investment is spread out over five years and will use a reverse auction to subsidize broadband in "unserved" areas (75% of the funds, or $30 billion), with the remaining 25% (that would be $10 billion) going to states via a separate reverse auction. But if there are no unserved areas in a state, that state could use the funds to serve underserved areas--or as ISPs see it, overbuild existing service--or for connecting libraries and schools or to deploy next gen 911.

The $30 billion would have to go to private entities, but the $10 billion could go to muni broadband buildouts.The broadband will have to be high-speed--at least 100 Mbps downstream, and 3 Mbps up, with a carveout for remote areas, where 25 Mbps/3 mbps would qualify. Given that it has money for muni broadband and for potential overbuilds, both of which the reigning Republican majority has issues with--as do ISPs--the bill's prospects are probably not very bright.

I tend to agree with this analysis. As long as it remains the policy of the United States to primarily rely on legacy private investor-owned telephone and cable companies to upgrade and build out modern fiber optic telecommunications infrastructure to homes, businesses and institutions, any funding allocated to public sector entities will encounter strong resistance from the telco/cableco lobby. Those industries want to retain their prerogative under the current de facto light touch regulatory regime to do so on their schedule and in neighborhoods of their choosing. Even if that means for the foreseeable, millions of Americans will remain unserved with fiber connections or even first generation DSL first rolled out in the 1990s.

More nonsensical "broadband mapping" BS

Senators Agree That Accurate Mapping is Essential for Broadband Expansion: The CN subsidiary, Connect Michigan, found 44 percent of working-age Michigan adults rely on Internet access to seek or apply for jobs, while 22 percent further their education by taking online classes. But, it all starts with accurate data mapping, which is so important. A fact U.S. Senators Gary Peters (D-MI), Joe Manchin (D-WV), Roger Wicker (R-MS), Brian Schatz (D-HI), Deb Fischer (R-NE), Jerry Moran (R-KS), and Amy Klobuchar (D-MN) each acknowledged this week when they introduced the Rural Access bill.

“Millions of rural Americans in Kansas and many other states depend on the promise of mobile broadband buildout efforts, and this critical expansion depends on the accuracy of current coverage data and uniformity in how it is collected,” Senator Moran told Global Affairs. “As we work to close the broadband gap, our providers must have standardized, clear data so they can plan out ways to reach communities most in need of access.” “We can’t close the digital divide if we don’t know where the problem is,” Senator Schatz said. “This bill will help us understand which communities still have bad wireless broadband coverage, so that we can move ahead and fix it.”

This is complete nonsense (or bullshit if you prefer) for two reasons:

1. It conflates premise service needed by the families, businesses, schools, agricultural producers and people who need access to seek or apply for jobs or take online classes -- cited in the news release -- with mobile wireless service. They aren't one in the same.

2. It assumes the "digital divide" can be closed by mapping areas redlined by incumbent landline ISPs. Problem is the incumbent ISPs already know where the redlined neighborhoods are since they redlined them in the first place. What's a "broadband map" going to do to change that situation? Moreover, providers other than incumbents can't plop down discrete networks to fill the swiss cheese holes represented the redlined neighborhoods because telecommunications infrastructure operates as a network over wide areas. Nor would the economics pencil out.

Monday, May 15, 2017

FCC Chair Pai shows apparent lack of knowledge on wireless Internet

Pai: Wired, Wireless Appear Very Competitive To Him | Multichannel: At an American Enterprise Institute speech recapping his first 100 days, Pai was asked about that relative competitiveness by host and AEI visiting scholar Jeffrey Eisenach, who was a member of the Trump FCC transition team. Eisenach asked whether Pai thought that wireless is now a substitute for wireline. Pai said, for him, at least, "they are very competitive offerings." The "for him" is because the chairman is always careful to separate his views from what the FCC as a whole might conclude based on the fact record before it. But he suggested that fact record could be a strong one. Pai said that as 4g LTE and 5G networks get rolled out, and the next generation of Wi-Fi is rolled out, " I think we are increasingly going to see that wireless is not this 'imperfect substitute' for wired connections. "It is going to be the dominant means, the preferable means, by which people access the Internet."
This needs to be placed in the proper context. Currently, wireless networks are primarily intended to serve mobile users as a complement to premise service -- and not a substitute since even nominally "unlimited" hotspot plans come with quite restrictive bandwidth useage limitations. In addition, most industry experts don't see even the next generation of mobile wireless, 5G, being able to replace fiber premise service when it's expected to be rolled out in 2020. Assuming Pai is quoted accurately, one might hope that an FCC chair would demonstrate a greater depth of knowledge and bring a more nuanced perspective to this topic.

Friday, May 12, 2017

Legacy incumbent providers should reassess stance on public sector telecom infrastructure

Incumbent legacy telephone and cable companies are wont to complain that public sector telecommunications infrastructure modernization projects represent unfair market competition. That’s not an accurate characterization, and here’s why. The goal of market competition is to offer better value products and services to gain market share from competitors.

Public sector telecom modernization projects don’t have an explicit objective of taking away market share from incumbent providers. Rather, their goal is to offer a more complete and robust network than incumbent, investor owned providers can build within a reasonable time frame given the short term ROI constraints of their business models that disfavor infrastructure modernization CAPex. That goal is typically in support of broader economic development objectives, not capturing market share from existing legacy providers. Thus if these providers lose market shares in public sector telecom infrastructure initiatives, it is incidental and not part of an intentional strategy. Public policy should not protect legacy providers from losing market share due to infrastructure modernization needs they cannot meet.

That said, there is potentially lucrative role for legacy providers. They have lots of experience and know how to operate and maintain telecom infrastructure. They can partner with the public sector to fulfill these functions, viewing the public sector as a customer and not a competitive threat.

More underpowered, bass ackwards state telecom infrastructure planning

Charleston Gazette-Mail | Broadband council prepares for expanded role: The council will have three different maps for showing internet access: service areas below 6 mbps, service areas between 6 to 25 mbps and service areas with speeds above 25 mbps. Twenty-five mbps is considered the minimum standard for broadband by the Federal Communication Commission. “Having these maps can help us determine where the fiber is and where it isn’t,” Hinton said.
If the United States had built roads and highways and other critical infrastructure like this -- by first mapping where the infrastructure is missing instead of planning where to build it -- much of the nation would have been driving on dirt roads well into the late 20th century.

Telecommunications infrastructure is by nature a broad reaching network. It can't just be "plopped down" in discrete locales and neighborhoods as one AT&T representative correctly explained about a decade ago. It must be built out on a widespread basis and as quickly as possible given the nation is already a generation behind where it should be when it comes to constructing it. It's too big of a job to be left to small states like West Virginia that can't begin to devote the billions of dollars needed. Only the federal government is up to the task.

Friday, May 05, 2017

"Everyplace outside a metropolitan area was experiencing the same issues.”

Georgia Tackles the Digital Divide - Broadband Communities Magazine In summer 2016, Gooch and State Rep. Don Parsons formed a joint committee that included 10 members of both legislative houses and held a series of hearings all over Georgia. The committee heard testimony from local governments, state agencies, academic researchers, chambers of commerce, health care providers, incumbent telcos, trade associations and many other interested parties. In addition, it posted an online survey to ask residents about their broadband experiences. With very little promotion, the survey received 12,000 responses. Both the formal testimony and the survey responses confirmed that rural broadband was deficient all through rural Georgia – not just in the areas served by the provider in Gooch’s district. “Everyplace outside a metropolitan area was experiencing the same issues,” Gooch says. “There was no incentive for the providers to upgrade their infrastructures. It was an eye-opening conversation – all these people were from different parts of the state and had different phone companies.”

Georgia's experience shows deficient advanced telecommunications infrastructure is a widespread problem not limited to one part of the state. Nor is it limited to one state. Georgia's experience repeats all over the United States.

Deficient telecommunications infrastructure is not a local or state specific problem. It's a national issue requiring a national solution to bring robust fiber optic telecom infrastructure to every state in the union and to the doorstep of every American home, school and business. And just as long distance telephone service was interstate in the 20th century, so is Internet protocol-based service.

Thursday, May 04, 2017

The adverse impact of deficient telecommunications infrastructure

Municipal Broadband | POTs and PANs: Local governments are finding that nobody wants to buy homes without broadband if there is a nearby community with broadband. Worse, communities are seeing businesses move away or bypass them when considering new locations. Lack of broadband puts school kids at a definite disadvantage and there are still a lot of households that drive kids daily to public hotspots just to do homework. And lack of broadband takes away all the opportunities for working at home – probably the biggest area of job growth in rural America. I see small communities – even down to really small sizes like townships with 700 residents – trying to find ways to build a broadband network. I’ve read a few hundred RFPs from rural communities over the last few years, and probably not more than 5% want to become an ISP. But they will do so if they can’t find a commercial company willing to do it. Rural communities largely favor of public-private partnerships. More and more of them are willing to kick money into a building a network if an ISP will invest in their community and operate a broadband network. I believe that within a decade we are going to start seeing broadband ‘deserts’ where communities without broadband start withering – just as happened in the past to communities that didn’t get electricity, or that were bypassed by railroads or interstate highways. It’s hard to think that a community today can keep their kids at home without broadband – and this is starting to scare local governments.

I agree with the writer that the impact of not having advanced telecommunications infrastructure in the 21st century will indeed have negative consequences just as the lack of electrical distribution and transportation infrastructure did in the 20th. But the analogy isn’t directly comparable what’s happening on the ground. Electrical distribution and transportation infrastructure deficiencies
(and railroads in the 19th) affected large regions of the nation in early in the previous century. The lack of advanced telecommunications service on the other hand is better equated to neighborhood redlining associated with mortgage lenders and insurance companies. It’s far more granular. A household can be served by advanced landline telecommunications infrastructure while another just down the road, over the hill or around the bend is not. This post at Steve Blum's blog as well as any number of “broadband maps” paint a crazy quilt of served and unserved areas that looks like this:

And as unfortunate members of those unserved households will attest, their pleas for service have fallen on deaf ears for more than a decade now or have been met with vague promises of service. Someday. Maybe. But mostly likely not because they don’t fit the business models of investor-owned providers that is incompatible with high cost, long term investment required for infrastructure

Wednesday, May 03, 2017

Capito introduces bill intended to spur rural broadband expansion | The State Journal | theet.com

Capito introduces bill intended to spur rural broadband expansion | The State Journal | theet.com: U.S. Sen. Shelley Moore Capito, R-W.Va., has introduced federal legislation intended to make it easier for companies to expand broadband internet service to rural communities. Capito introduced the Gigibit Opportunity Act on Wednesday, May 3, according to a a news release. The legislation would give temporary tax deferments to broadband providers and allow communities to set up "Gigabit Opportunity Zones" to encourage expansion.

Perhaps well intended, but misses the mark. Private sector ISPs aren't deterred from investing in telecommunications infrastructure due to tax burdens. Rather, it's long waits for return on investment with their business models based on selling subscriptions one premise at a time to Internet-enabled services over their networks.

Infrastructure costs a lot -- billions. The United States isn't going to get the advanced telecommunications infrastructure it needs quickly today and for the future as demand for service and bandwidth grows exponentially by offering tax breaks worth millions. Particularly by continuing to rely on private sector investment due to the aforementioned ROI obstacle. The public sector has to take the lead just as it has with roads and highways.

Tuesday, May 02, 2017

Beyond Net Neutrality: The Importance of Title II for Broadband - Public Knowledge

Beyond Net Neutrality: The Importance of Title II for Broadband - Public Knowledge: Title II classification is critical for protecting an open internet, but it is also just as important for preserving our values of service to all Americans, including universal service and consumer protection. Broadband has the power to transform people’s everyday lives. Title II classification of broadband must remain in place to continue protecting the fundamental values of our communications systems.
H/T to Yosef Getachew of Public Knowledge for this item emphasizing the Federal Communications Commission's reclassification of Internet as a common carrier telecommunications utility under Title II of the U.S. Communications Act in its 2015 Open Internet Rulemaking. 

Title II's universal service provision has unfortunately been buried under the mainstream media "net neutrality" meme that is utterly meaningless from the perspective of the 34 million Americans the FCC found in 2016 lack access to advanced telecommunications infrastructure capable of delivering high quality voice, data, graphics and video. Here's what I wrote on the topic shortly before the rulemaking was adopted.

A universal service standard prevents all too common crazy quilt pattern of telecom infrastructure deployment such as this accompanying a post at Steve Blum's blog illustrating how legacy incumbent providers engage in neighborhood cherry picking and redlining.

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