Rapid rise in work from home #WFH drives demand for enterprise grade connectivity

As states and localities put in place contagion control measures that shut down centralized commute in offices in mid-March of this year, many knowledge workers migrated to working at home. But with only about a third of all U.S. homes having access to fiber to the premise (FTTP) connections, many found their home connections wanting.

They are less secure than enterprise connections. Bandwidth is tight and competes with other users in the household such as students engaged in online learning and video entertainment streaming. Service from legacy telephone and cable companies is optimized for streaming video entertainment with asymmetric circuits allocating much more bandwidth to downloading than uploading. That’s not optimal for virtual knowledge work that often involves the use of two-way videoconferencing and virtual private networking.

The virtual office in the cloud needs fiber connectivity. A co-working space company offering its aptly branded CloudVO (virtual office) recognizes this need. It sells passes for access to these spaces offering what it describes as enterprise-grade connectivity – presumably FTTP.

Meanwhile, AT&T recently rolled out a new business offering aimed at bringing enterprise grade connectivity to home-based knowledge workers. AT&T’s Home Office Connectivity however isn’t FTTP per se. It would also use business class fixed wireless service supported by its mobile 4G LTE infrastructure where there’s no FTTP infrastructure and as a backup network. But that’s where the service becomes decidedly more residential than business class. It’s sold in bandwidth consumption tiers of 8, 12 and 50 Mbps at $80, $130 and $200 monthly, respectively.

The target market for Home Office Connectivity is businesses, not the homes of home-based knowledge workers according to AT&T:

The service enables businesses of any size to extend enterprise broadband connectivity throughout their workforce, whether it is for a single additional line or thousands. It also simplifies onboarding and management with consolidated invoicing directed to the business, single-number enterprise customer care, and professional on-site installation by a certified AT&T technician.

The line between residential and business service in the legacy telephone company business structure is becoming blurred.

Google Fiber's impact overrated

Incompas 2020 Policy Summit: Unraveling Broadband Challenges And Opportunities for Competitors, Communities: Blair Levin, policy analyst at New Street Research and nonresident fellow at the Metropolitan Policy Program at the Brookings Institution, said during the summit that these elements largely were influenced by the National Broadband Plan team’s conversations with the private sector. “While everyone thinks of Google Fiber as a business, there’s no question that it accelerated the next-generation networks from AT&T and CenturyLink as well as the cable industry,” Levin said.

Um, no. Google Fiber folded up its tent and began decamping in 2016 after a brief six-year-long presence in the fiber to the prem (FTTP) business. It provided no sustained and meaningful pressure on the big telcos and cablecos and their infrastructure plans due to its abandonment of the race, drawing mockery from AT&T. Had Google Fiber provided an impetus to AT&T, it would have replaced the legacy copper in its service territory with fiber over the past decade rather than respond with ridicule.

What Google Fiber proved was the poor progress the U.S. has made modernizing its legacy copper telecom infrastructure to FTTP as evidenced by the more than 1,100 communities that asked it to deploy in 2010.

AT&T should add residential FTTP service where it has installed fiber

It’s Hard to Like AT&T | POTs and PANs: Over the last year, I’ve said some nice things about AT&T. It was nice to see AT&T wholeheartedly embrace their commitment to build fiber past 12 million homes as they had promised as part of the conditions of buying DirecTV. In the past, they might have shrugged that obligation off and faked it, but they’ve brought fiber to pockets of residential neighborhoods all over the country. It seemed that they were unenthusiastic about this requirement at first, but eventually embraced when somebody at the company realized that new fiber could be profitable.

Doug Dawson’s right. It is indeed good to see badly outdated legacy copper plant being modernized to fiber to the prem (FTTP) infrastructure by one of the nation’s biggest telcos. It’s at least a decade overdue. But the downside it’s just a few discrete residential “pockets” as Dawson points out amid recent indications from AT&T that it will be dialing back its landline capital expenditures.

Moreover, in parts of AT&T’s service territory, services on these new fiber installs are being limited to enterprise customers willing and able to afford rates at hundreds of dollars per month and higher. Nearby residences that could be served by drops from the new fiber are relegated to DSL over aging copper twisted pair. Or in some cases, asymmetric 10/1Mbps fixed wireless service in exurban areas that competes for limited mobile bandwidth since it runs on top of mobile wireless infrastructure.

These exurbs typically have population densities of more than 200 people per square mile, where fixed wireless and limited fiber to the home are best suited, according to a Microsoft-sponsored study by the Boston Consulting Group. That study was done in 2017. The appetite for residential bandwidth has increased since then. And it’s likely spiked higher in recent weeks as more people work, study and get medical attention at home during the SARS-CoV-2 contagion, using videoconferencing that requires the symmetrical connectivity fiber enables. Those bandwidth intensive activities are likely to persist to a greater degree after the pandemic ends than they did before.

The vast majority of residential customers and home office and teleworkers are not going to be willing or able to afford paying several hundred dollars a month for business class service offerings. AT&T should consider adding residential service at accessible residential rates in areas where it has already has installed fiber or it’s in the works.

California proposes 3-day backup power for cell towers, communication networks - SFChronicle.com

California proposes 3-day backup power for cell towers, communication networks - SFChronicle.com: “It’s important to remember that one size does not fit all when it comes to network management during an emergency,” AT&T spokesman Jim Kimberly said in an email. “Adding 72 hours of backup power could mean adding large fuel tanks or multiple refrigerator-sized cabinets in the middle of communities, which in many areas is simply not feasible. A combination of fixed and mobile solutions is what is needed.”

Kimberly is right re fixed solutions. Residential fiber connected to premises backed up with premise generators and batteries would provide one such solution. That would require AT&T to rapidly change out its aged legacy copper outside plant to fiber -- something it should have done decades ago -- and consider placing in underground conduit in high wildfire risk areas to increase suvivabilty. Also, to offer both business and residential fiber service. In some of its Northern California service territory, AT&T has deployed fiber to business customers but does not offer fiber service to nearby residences.

California PUC Report: Worsening landline service from AT&T and Frontier

 

This disturbing San Jose Mercury News story on a California Public Utility Commission survey covering 2010-2017 found rampant residential landline redlining and lack of investment in landline infrastructure by two of the states largest telcos. From the story:

• Deteriorating service quality. The quality of AT&T and Frontier
  voice services has steadily declined over the eight year period, with
  the number of outages increasing and the service restoration times
  getting longer.
• Persistent disinvestment. The depreciation in the value of the
  AT&T and Frontier networks was greater than the companies’ capital
  investments. This was most pronounced in rural and low-income service
  areas.
• Degradation of landline service and support. AT&T no longer
  actively markets “Plain Old Telephone Service,” or “POTS” and is instead
  promoting broadband service to grow revenues.
• Failure to improve the network infrastructure to withstand bad
  weather or fire events. The companies’ engineering, design and
  construction, and maintenance practices are not as robust as they need
  to be.
• Preferential focus on higher income communities. There is an inverse
  relationship between household income and wire center service quality
  performance. For instance, AT&T wire centers that have been upgraded
  with fiber optic disproportionately serve richer communities. Areas
  with the lowest household incomes have the highest trouble report rates,
  the longest out-of-service durations, and the lowest percentages of
  outages cleared within 24 hours.
• Increased focus on the most competitive communities. AT&T and
  Frontier offer the greatest service in regions of the state where
  competition — and potential loss of customers — is greatest.

The story notes California law mandates telcos to restore 90 percent of service outages for telephone service within 24 hours or less, on statewide average. “Yet the largest service providers routinely fail to meet these requirements,” said CPUC commissioner Clifford Rechtschaffen. AT&T has the financial resources to maintain and upgrade its landline network in California, it has not done so, according to the CPUC. Frontier, in contrast, said it wants to invest in upgrades, but lacks the financial capacity, the Mercury News reports, citing the CPUC report.

A note regarding report item on the promotion of "broadband service" instead of POTs. When AT&T first rolled out Digital Subscriber Line (DSL) service nearly two decades ago, that product was promoted during the initial decade. Now that DSL is being phased out as the copper cable plant is placed in runoff mode, that's no longer the case and no successor residential landline product is being promoted for homes not served with fiber connections.

AT&T Targets Labor, Wireline Footprint in New Cost-Cutting Effort | Light Reading

AT&T Targets Labor, Wireline Footprint in New Cost-Cutting Effort | Light Reading: Wireline reductions
As for other cost-cutting efforts, Stankey said AT&T would also look into its wireline operations with an eye toward "product rationalization" and "geographic and footprint rationalization."

"There's a huge opportunity for us to look at our wireline business and how our customers are laid out, and start thinking about what we do to take out layers of cost -- based on the geography we serve and the products that we support -- that maybe have run their course in a fairly mature business," he said, but didn't elaborate further.

AT&T has a very conservative stance on building out fiber to serve residential customers. It's about to get even more so, signalling a likely full and final retreat from the residential market.

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.

Brought to you by broadband: TV viewing via connected devices up 65% since 2016

Brought to you by broadband: TV viewing via connected devices up 65% since 2016: Connected devices have made video streaming easy and ubiquitous -- 74% of U.S. TV households now have at least one internet-connected TV device, including smart TVs, streaming media devices (like Roku, Amazon Fire TV, Chromecast or Apple TV), connected video game systems, and Blu-ray players. Similarly, households with over-the-top video service are expected to exceed 265 million by 2022. Given the tremendous growth of broadband-powered devices, USTelecom remains committed to supporting policies that foster the innovation and investment necessary to keep pace with consumer demand.

This is an important trend driving the vertical integration of advanced telecom infrastructure with content such as this month's merger of AT&T and Time Warner.  It represents the "cable-lization of the Internet" as some have termed it and a return to the "walled gardens" of the early 1990s such as AOL and CompuServe. These services functioned as integrated platforms for content as well as communications such as email for a recurring monthly fee. We are witnessing a revival of the model, this time with bundled video content those early platforms couldn't deliver.

It's a regressive trend and counter to the move toward Internet protocol-based telecommunications since then that enables access to innumerable information and communication services (including Voice Over Internet Protocol or VOIP), obsoleting the walled garden model of a generation ago. It also represents a misplaced emphasis on entertainment over telecommunications. Capital is diverted to purchasing content rather than constructing and upgrading infrastructure. That reinforces neighborhood redlining as the big ISPs concentrate on affluent, high density neighborhoods where they can maximize ARPU and ROI with their video bundles.

Google, Netflix, YouTube, Facebook responsible for funding advanced telecom infrastructure, telco asserts

As net neutrality repeal nears, WV providers say internet won't change | Business | wvgazettemail.com: Frontier, West Virginia’s largest internet service provider and often the only option in rural areas of the state, sent a letter to the FCC in July applauding the commission’s proposed repeal, saying the regulations are outdated. In the letter, Frontier said it has a core commitment to “treating all Internet traffic the same regardless of content.” “Indeed, the combination of competition in the broadband market and consumer expectations would significantly discipline any company that sought to micromanage a user’s content,” the letter said. “The fundamental Internet freedoms will remain as strong as ever, whether or not they are backed by outdated Title II regulation.”

According to Frontier, internet service providers aren’t the problem when it comes to the issue of net neutrality — it’s major content providers such as Google, Netflix, YouTube and Facebook that need to be looked at. Frontier complained these companies don’t “help fund the upgrades their traffic is requiring,” adding that current FCC rules prevent negotiations relating to that from happening. The company claimed this issue prevents it from investing further in rural broadband access.

Frontier's position mirrors the that of then AT&T CEO Ed Whitacre who proclaimed in 2005 that content providers like Google, Netflix, YouTube and Facebook shouldn't be able to ride over "my pipes" without paying. Naturally AT&T like other legacy telephone and cable companies would prefer a business model based on a two sided market: assessing consumers monthly service charges for voice, video and data services on the delivery side and content providers like the aforementioned for access to their "pipes" as Whitacre put it.

That two-sided market is the fully vertically integrated business model telcos and cable companies desire because of the obvious revenue enhancement possibilities. Since telecom infrastructure is a naturally monopolistic offering, the prospect of telcos and cable companies abusing their monopoly power to exploit those opportunities concerns advocates of retaining the U.S. Federal Communications Commission's 2015 Open Internet rulemaking that regards Internet-delivered telecommunications services as a common carrier utility open to all content providers free of charge. 

Verizon’s FiOS Deployment In Boston Is Fiber-To-The-B.S. | HuffPost

Verizon’s FiOS Deployment In Boston Is Fiber-To-The-B.S. | HuffPost

This development shows it's far easier to talk about and even promise to deploy fiber to the premise (FTTP) telecommunications infrastructure than it is to fund and construct it. It also shows even large very well capitalized companies like Verizon, AT&T and more recently Alphabet's Google Fiber unit aren't up to the task. They lack the will (investment incentive driven by strong capital returns) and the means (patient capital than can wait many years for a return on capital investment) to do the job.

As Bruce Kushnick and other observers have shown, the talk typically falls far short of real world results. It's time to face the reality that the urgency needed large scale FTTP deployment the United States should have completed a decade ago requires a well funded federal initiative to accomplish the job. As the saying goes, money talks and bullshit walks.

AT&T in apparent violation of FCC Open Internet rulemaking reclassifying internet as telecom service

In June of 2015, the Open Internet rulemaking adopted by the U.S. Federal Communications Commission that reclassified internet as a common carrier telecommunications service subject to the universal service and non-discrimination mandates of Title II of the Communications Act became effective. Section 201(a) of the law states that:

"It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor..."

Section 254(b)(3) of the Act requires ISPs to provide access to advanced telecommunications in all regions of the nation. Section 202 of the Act contains an anti-redlining provision barring internet service providers from discriminating against localities in providing service.

But let’s take a look at what happens when at least some consumers attempt to place an online order for internet service with AT&T, the nation’s biggest telecommunications provider. After plugging in the address where service is needed on a recent service inquiry, the following screen appeared on the AT&T order page:

In other words, satellite television but ironically no telecommunications services are available for ordering. That window includes an informational link at the bottom right of the page titled “Why can’t I get these services?” Clicking on that link brought up the following:

The first and last explanations clearly do not comport with Title II’s universal service requirement for an incumbent local exchange carrier (ILEC) like AT&T. Particularly the last one referencing “an area we don’t service," noting landline services are offered only in “select areas” of AT&T’s 21 state service territory. “Select areas” is clearly not universal service. It will be interesting to see how the Federal Communications Commission addresses this apparent clear violation of its Title II rules.

Those rules also bar internet service providers from blocking and throttling content. Indeed, the Open Internet rulemaking has been wholly conflated with that provision, known as "net neutrality." However, the toughest form of blocking and throttling is meaningless when one has no internet service access whatsoever because a request for service isn't honored.