U.S. losing its build big moxie: telecom infrastructure modernization case in point

Can America Still Build Big? A California Rail Project Raises Doubts - The New York Times: The need for increased infrastructure investment has been one of America’s few remaining bipartisan issues, although left and right differ over whether public money or private money would finance it. President Barack Obama made reinvesting in roads, bridges and power plants a cornerstone of the 2009 economic stimulus package, and during the 2016 presidential campaign seemingly the only disagreement Hillary Clinton and Donald Trump had on infrastructure was about which of their administrations would spend more on it. The issue unites truckers and train buffs, unions and Wall Street, economists from the left and right.

And yet, when it comes to spending the money — and actually getting things built — very little progress has been made. Following a brief spike during the recession, government investment has hovered around 3.3 percent of gross domestic product for the past few years, which is the lowest since the 1940s. In the meantime, roads, bridges and train tracks have gotten steadily older while proposals for new projects are delayed by political intransigence and legal delays.

The failure of the United States to timely modernize its legacy metallic telecommunications infrastructure built for the analog age of telephone and cable TV to fiber optic technology for the digital age is a pertinent example. Federal, state and local elected representatives uniformly proclaim the need is great with many at the state and local level saying it's the number one topic of constituent contacts. It's a major disconnect between what's needed and what's actually being built, reflecting the loss of America's moxie to think big and act big.

Meanwhile as the phone and cable companies incrementally upgrade their legacy infrastructures in search of high margin luxury "broadband speed" rents instead of bringing fiber to every doorstep as was the case with phone service, the nation is already a generation late and falling further behind where it should be in 2019. Fiber connections should have reached every home, school, business and government building by 2010 at the latest. The title of author Susan Crawford's recently published book Fiber: The Coming Tech Revolution―and Why America Might Miss It points up the tardiness of this vital infrastructure reboot. It's not just a hypothetical. As Crawford's book notes, compared to other nations it already has.

Pennsylvania: Another underfunded, sloganistic statewide universal service initiative

Governor Wolf makes case for statewide broadband to support education - WFMZ: Restore Pennsylvania is an infrastructure initiative funded by the monetization of a severance tax. Restore Pennsylvania would invest $4.5 billion over the next four years in projects throughout the commonwealth. The initiative would address five priority infrastructure areas including high speed internet access, storm preparedness and disaster recovery, downstream manufacturing, business development, and energy infrastructure, demolition, revitalization, and renewal, and transportation capital projects.

States cannot achieve universal advanced telecom service with these kinds of woefully underfunded, sloganistic initiatives. There simply won't be enough money if the pot is shared with other infrastructure needs as it is here. In a state as large as Pennsylvania, it's doubtful there would be enough even if the entire sum was dedicated to telecom infrastructure. This is too big of a job for states to tackle on their own. The federal government must lead.

A hybrid model of medical care would also be good for telecommunications

Health Care Spending In The US And Taiwan: A Response To <em>It’s The Prices, And A Tribute To Uwe Reinhardt</em> | Health Affairs: Uwe Reinhardt And Taiwan’s Single-Payer Health System

In 1989, as a high-level government adviser to Taiwan when it was planning to implement universal health insurance, Uwe boldly recommended a single-payer system. Taiwan’s government accepted this recommendation in 1990 and implemented its single-payer National Health Insurance (NHI) in 1995.
Uwe based his recommendation on three policy considerations. First, a single-payer system is effective in controlling cost; this was a major policy goal of the government as health spending in Taiwan was growing rapidly. Second, a single-payer system is equitable: coverage is universal and all insured are treated equally regardless of ability to pay or preexisting conditions. Third, a single payer system is administratively simple and easy for the public to understand. The NHI has achieved all three policy goals. Uwe also suggested that Taiwan retain its predominantly private delivery system. He believed that the private sector has an important role to play in a nation’s health care system. As long as financing and payment were within the purview of government, a mixed delivery system of private and public providers could work well within a single-payer framework. Taiwan’s experience has shown this to indeed be the case. (Emphasis added)

As with health care, the Americans pay more and get less value than other nations for telecommunications services. In a parallel with advanced telecom services, many Americans find needed medical care inaccessible or unaffordable. The late health care economist Uwe Reinhardt's prescription for Taiwan was putting the government in charge of the financial side of medical care while allowing the private sector to do what it does best: providing care.

The United States should do the same for another essential and high cost service: telecommunications. Let the telecom providers do what they do best -- planning, building and operating networks -- and relieve them of the burdens of infrastructure finance and ownership. Their weaknesses here have led to widespread infrastructure deficiencies, market failure and poor value service offerings. Hybrid models get around the winner take all, win-lose dynamics and allow providers and consumers to both benefit.

FCC chief touts hybrid fiber and next gen wireless delivery infrastructure as viable alternative to FTTP

U.S. Federal Communications Commission Chairman Ajit Pai said a hybrid infrastructure of next generation wireless backhauled by fiber offers an alternative delivery method for fixed premise advanced telecom service where the return on investment to connect premises directly to fiber isn't adequate.

Industry observers are skeptical of this scenario, noting next generation wireless service requires the construction of substantial new fiber infrastructure to support it, significantly weakening the investment case.

Pai disagrees, arguing that sufficient fiber infrastructure is already in place to move ahead with deployment. "Part of the reason is, in terms of the possibilities of fixed wireless, given the fiber penetration that some of your members have," he told the NTCA-The Rural Broadband Association in New Orleans earlier this week. Pai urged the group to "think broadly" about "how to extend this great fiber penetration you’ve got." 

Generation into IP telecom era, AT&T still has no durable, scalable premise service delivery infrastructure

AT&T Does a Flip Flop on Fixed 5G, Now Sees It “Unequivocably” a Landline Broadband Replacement - Telecompetitor: “As we look at 5G will you have enough capacity to have a good broadband product that serves as a streaming service for all of your DIRECTV NOW, your Netflix, et cetera?” asked Stephenson in a SeekingAlpha transcript of today’s earnings call. “I absolutely am convinced that we will have that capacity, particularly as we turn up millimeter wave spectrum. That’s where the capacity and the performance comes from and that’s where you’ll begin to see a broad – a true replacement opportunity for fixed line broadband. So I have little doubt that in the three to five year time horizon you’ll start to see substitution of wireless for fixed line broadband.”

The concerns that Stephens expressed last year related primarily to the cost of backhaul to support 5G fixed wireless. Stephens apparently also was envisioning fixed 5G wireless being deployed in the millimeter wave spectrum band. Millimeter wave spectrum will support the highest broadband speeds, but over relatively short distances. Hence there is a need for dense backhaul infrastructure.

It is unclear what has caused the company to have a change of heart about the prospects for an AT&T fixed 5G wireless offering. Interestingly, however, the company recently released a policy paper touting the potential of using its AirGig fixed broadband technology in combination with 5G. Although the paper doesn’t provide details, perhaps AT&T is looking at the possibility of using AirGig to provide backhaul for fixed 5G.

A generation into IP telecom era, AT&T has no proven durable premise service delivery infrastructure easily scalable throughout its service area as its 1990s DSL over copper outside plant goes obsolete. AirGig remains an experimental technology. And the millimeter wave frequencies used by 5G can't penetrate objects.