FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com

FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com: Speaking to reporters after the meeting, Pai said, from the FCC's viewpoint, connectivity remains the biggest hurdle to a serious move toward widespread use of telemedicine. "The telemedicine application is only as strong as the digital connections between communities," said Pai, a 2012 Obama appointee who was designated director of the commission by President Trump, and a noted free-market advocate. Pai pointed to his agency's recent infusion of funds into its Rural Health Care Program, which provides funds to some health care providers for broadband and telecommunications services. He also said he is aiming to eliminate outdated FCC rules and encourage competition among internet service providers. "We want to make sure these companies have a strong incentive to upgrade to fiber, especially in these rural communities that need high-capacity internet access," Pai said.

The FCC chairman is right when he says America needs more fiber advanced telecommunications infrastructure deployment as medical care increasingly utilizes it. But it won't happen with Pai's prescriptions. Limited purpose funding such as the Rural Health Care Program will hardly make a dent in the nation's enormous accumulated telecommunications infrastructure deficit where FTTP is the exception rather than the norm it should be.

Nor can regulatory reforms address the fundamental business problem facing investor owned ISPs. Building new fiber infrastructure under their current business models cannot yield positive net present value within the limited patience of their investors' capital looking for rapid returns. And encouraging competition in a natural monopoly market that is telecommunications infrastructure is like expecting ice cream plants to grow in the desert. No meaningful competition can ever occur.

ISPs want to be hotels because luxury accomodations aren't meant for the masses

Net neutrality activists, state officials are taking the FCC to court. Here's how they'll argue the case. | National and International | napavalleyregister.com: But tech companies and consumer groups told the court Monday that third-party services routinely carry out those same functions, and that ISPs cannot lay claim to lighter regulation just because a portion of their business is involved in performing them. "The FCC could not have reasonably concluded that a drop of DNS and caching in a sea of transmission transformed the service into something that could properly be called an information service," the brief said. The overall impression, the group said, is that of trying to deregulate all roads that lead to hotels by simply reclassifying the roads themselves as hotels.

Hotels are often seen as luxury accommodations compared to say Motel 6. The analogy here fits nicely with the legacy incumbent telephone and cable company opposition to being regulated as a common carrier telecommunication utility -- and thus barred under the now repealed FCC Title II rulemaking from redlining and discriminating against neighborhoods they choose not to serve.

Will forthcoming FCC rule on pole attachments and enhanced PON technology lead to reboot of Google Fiber?

Google Fiber Blog: FCC Supports OTMR - Faster and Fairer Rules for Pole Attachments: Fortunately, there is a better way. It is called One Touch Make Ready (OTMR), which is a system where a new attacher does much of the make ready work itself, all at one time. OTMR is a common sense policy that will dramatically improve the ability of new broadband providers to enter the market and offer competitive service, reducing delays and lowering costs by allowing the necessary work on utility poles to be done much more efficiently. This also means fewer crews coming through neighborhoods and disrupting traffic, making it safer for both workers and residents.That’s why we’re so excited by the news that the FCC is poised to pass a rule that would institute a national One Touch Make Ready system, with the goal of significantly increasing the deployment of high-speed broadband across the United States. As the FCC stated, “OTMR speeds and reduces the cost of broadband deployment by allowing the party with the strongest incentive — the new attacher — to prepare the pole quickly to perform all of the work itself, rather than spreading the work across multiple parties.”

The big question here is whether this will spur a serious reboot of Google Fiber as an aerial fiber overbuilder, forsaking its originally preferred buried conduit deployment architecture and its attendant construction delay and high cost burdens.

Along with liberalized pole attachment rules, another factor is enhanced Passive Optical Network (PON) technology that could reduce deployment costs and allow Google Fiber to move beyond the urban and suburban areas it initially targeted to exurban and possibly rural areas. In these areas, Google Fiber would more rapidly capture market share since incumbent telephone and cable companies tend to have partially deployed networks that leave many premises unconnected.

Selling data consumption tiers rather than connectivity

Net neutrality makes comeback in California; lawmakers agree to strict rules | Ars Technica: Wiener's office told Ars that the compromise version will remove a ban on "application-specific differential pricing," which the bill defined as "charging different prices for Internet traffic to customers on the basis of Internet content, application, service, or device, or class of Internet content, application, service, or device, but does not include zero-rating." That means an ISP could sell add-ons to data plans that let customers buy extra data just for a certain type of website or online service. A customer's base data plan would still allow browsing to any kind of website or service in this scenario, but the package of extra data could be restricted just to social media sites, or some other category, Wiener's office explained. The effect would be similar to zero-rating, but Wiener's office said it wouldn't involve exempting any traffic from the customer's base data plan. (Emphasis added)

Mobile device users are familiar with their carriers' business models: selling tiered plans based on the amount of data consumed. The more consumed, the higher the price tier. As well as functional costs such as throughput being throttled back once a certain consumption threshold is exceeded.

This story suggests the expansion of this pricing model to landline-based service. And that the development likely motivated providers of advanced telecom service providers to successfully lobby the U.S Federal Communications Commission to recently scuttle its 2015 Open Internet rulemaking that would have made doing so problematic. If landline like mobile providers can sell finite "bandwidth by the bucket" (or scoop of ice cream to use the Verizon Wireless analogy), that provides them a pricing rationale to offer discounted or better service to end users accessing their proprietary content -- the "walled garden" consumer facing model that characterized the early days of the Internet with ISPs like CompuServe and AOL. And telephone service for decades before, when calls were billed based on minutes used and distance of the call.

The real policy issue here is whether providers of advanced telecommunications services should be able to maintain vertically integrated business structures and product offerings based on those business models of the past and whether doing so is good for consumers. At a time when Internet protocol-based telecommunications can provide so much more than the bill per unit voice phone call of legacy POTS (Plain Old Telephone Service) or distant TV channels of the legacy CATV model.

ACA Summit: Pai: Open Internet Order Was 'Galling Regulatory Onslaught’ | Multichannel

ACA Summit: Pai: Open Internet Order Was 'Galling Regulatory Onslaught’ | Multichannel: U.S. Federal Communications Commission Chairman Ajit Pai praised smaller cable operators for broadband deployment and as a competitive force, and renewed his attacks on edge providers in the network neutrality rule debate. Pai took aim at edge providers he said had pushed Title II on ISPs large and small. Those edge providers are an increasingly familiar target in Washington in conversations about power over internet content.

"Silicon Valley tech giants with market caps in the hundreds of billions of dollars demanded that the FCC regulate small companies like yours more heavily than they were!," he said. "That’s right... [T]hey claimed that small broadband providers like Spencer Municipal Utilities and Laurens Municipal Utilities were anticompetitive monopolists who posed a greater threat to a free and open Internet than companies like Google, Facebook, and Twitter."

The thing is Mr. Chairman, telecommunications infrastructure is a natural monopoly. It doesn't matter whether it's owned by big players like Charter and AT&T or small cable companies. It thus requires a regulatory scheme predicated on that monopolistic reality. The FCC's 2015 Open Internet rulemaking does so in treating it as a common carrier utility as basic telephone service was in the pre-Internet era under Title II of the Communications Act.

FCC Chair Pai falsely characterizes satellite Internet as innovative telecom technology

REMARKS OF FCC CHAIRMAN AJIT PAI
AT THE SATELLITE INDUSTRY ASSOCIATION’S
21ST ANNUAL LEADERSHIP DINNER
WASHINGTON, DC
MARCH 12, 2018

Next-generation satellites are bringing new competition to the broadband marketplace and new opportunities for rural Americans who have had no access to high-speed Internet access for far too long. That’s why the FCC under my leadership has moved quickly to give a green light to satellite innovators.

Here, U.S. Federal Communications Commission Chairman Ajit Pai falsely characterizes satellite delivered Internet connectivity as innovative. It is not. It's been around since the 1990s as a forced option for Americans who needed better than glacial dialup Internet access over legacy copper telephone lines but weren't offered DSL or later by cable companies.

We’ve also made satellite broadband providers eligible for our upcoming Connect America Fund Phase II reverse auction, which will provide up to $2 billion over ten years to expand broadband deployment in rural America. To be sure, I understand that the satellite industry disagreed with some of the decisions that the FCC made in developing rules for the reverse auction. We are forging new ground with this first-of-its-kind auction, and in doing so we had to make some hard choices. But, I nonetheless hope that satellite companies will study this opportunity closely and choose to participate in the reverse auction. 

This is an incredible waste of subsidy funding. With satellite, the FCC is subsidizing a substandard and kludgy form of connectivity subject to high latency and bandwidth usage caps. Subsidies should instead go to deploying fiber to the premise connections that offer far superior connectivity and aren't as subject to obsolescence.

Big ISPs once again at odds with local governments over universal service demands

FCC says small cells will close the digital divide. Most say they won't | Center for Public Integrity: The FCC’s claim doesn’t convince officials in Lincoln, Nebraska, which experienced the same reluctance as Montgomery County did by wireless companies willing to deploy small cells to rural areas, said David Young, manager of fiber infrastructure and rights of way for the city. In 2015, when Lincoln officials were negotiating with Verizon Communications Inc. over how much the city would charge the company to attach small cells to municipal property, the city said it would charge the carrier an annual $95 fee — if the carriers would commit to deploying broadband in rural areas in Nebraska. Over the next two years, Lincoln offered the same deal to other carriers and builders. Young said the companies said they couldn’t commit to anything. So, Lincoln went ahead with an agreement that have the companies paying $1,995 a year to attach small cells to city poles, more than 20 times as much. If Pai is serious about 5G closing the digital divide, Young said, “then I’ll make that deal: You cannot deploy any small cells in an urban environment until all the rural markets are covered. Until we can make that deal, I'm calling foul” on the assertion 5G will help close the digital divide.

The deal here is the essentially the same one local governments proffered to cable companies that wanted a franchise. Serve all premises within our jurisdiction or no deal. No cherry picking and neighborhood redlining. Cable companies didn't want to have to meet universal service demands in franchise negotiations and went over their heads to state governments in the mid 2000s and lobbied them to preempt the localities and take sole authority over so-called "video franchises." That preempted local government leverage.

Now local governments are pressing big telcos for universal service such as Lincoln is here. The telcos don't like the demands for universal service and are once again seeking preemptive relief from federal and state governments. Large telephone and cable companies also successfully lobbied the U.S. Federal Communications Commission to scuttle its 2015 Open Internet rulemaking classifying Internet service providers as common carrier telecommunications utilities, subjecting them to universal service and anti-redlining requirements.

Playing the preemption card again to avoid universal service obligations and continuing to leave many homes, schools and small businesses without connecting infrastructure to advanced telecommunications services will likely backfire on big telcos (and cablecos looking to get into mobile wireless services). Angry voters who have gone more than a decade with limited or no service options are increasingly likely hold elected policymakers who side with them in this fight accountable at the polls.

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. 

Forecast of holographic interactive video within five years a pipe dream

Magic Leap CEO thinks volumetric video will be a part of live TV in five years - The Verge: In an interview with The Verge, Abovitz said that within “two to five years,” it will be technically possible for people wearing Magic Leap goggles to watch an NBA game (or other media) live, but in a holographic, interactive form. “You can stream over the top and to the screens, the virtual screens — you can do that now,” he said. “We’re looking at, how do you derive the information to move the volumetric stuff from that? And then, how do you do volumetric live-streaming as well ... if you time where processing power is going, particularly backends, you’re single-digit years away from that happening.”

Processing power indeed continues as it has to increase. But Abovtitz neglects to consider telecommunications infrastructure deployment advances far more slowly. According to the U.S. Federal Communications Commission, many millions of American homes lack telecom infrastructure capable of supporting high quality data, voice and video.

Too many remain embarrassingly served by 1990s DSL over aging copper lines, satellite Internet and even dialup. An interactive holographic experience will require enormous bandwidth only fiber optic lines can deliver. But most premises lack fiber connections and there's no coordinated national effort to modernize America's aging and outdated legacy metallic telecom infrastructure to fiber.

Legacy incumbent telcos, cablecos not entitled to state sanctioned monopoly without FCC enforcement of Title II universal service requirement

Colorado Localities Vote for Broadband, but Must Get Creative to Actually Deploy It: “Cities don’t do this because they want to compete with the incumbent — they do it because the incumbent refuses to,” said Tom Roiniotis, general manager of Longmont Power & Communications, which runs the network.

Why the refusal? One big incumbent legacy telco explains: 

Mark Soltes, CenturyLink’s assistant vice president in Colorado for public policy and government affairs, said the gaps in service across the state are due to rugged landscapes and far-flung population centers. “You’re looking at deployment in some places where there’s no payback,” he said.

That's the economic reality and there's nothing unreasonable in CenturyLink's justification. It owes its investors a profitable return. But if a public sector entity steps into the gap where the numbers don't pencil for CenturyLink or other legacy incumbent, that's hardly market competition. In an open market, competitors compete for market share and profitable business. That's not the case when a public sector entity provides an essential telecommunications utility that's not being provided a private sector player because there's not a sufficient business case to do so. It's simply serving the need where the private sector cannot.

Nor do incumbent telcos and cablecos have a right to a state sanctioned monopoly. Particularly when the U.S. Federal Communications Commission is not enforcing the universal service and anti-redlining requirements of its current Open Internet regulations based on Title II of the Communications Act and is poised to repeal those rules later this month. If the FCC did enforce the rule, then the incumbents would have a far stronger and reasonable position. At present, they do not.

FCC Chair Pai's distorted take on America's telecommunications infrastructure challenges

Why deregulating internet service makes sense - Chicago Tribune: FCC Chairman Ajit Pai says CEOs, investors and entrepreneurs are in the best position to invent and give consumers what they want, so they should be allowed to compete. “The No. 1 issue that I hear about is that people want better, faster, cheaper internet access,” Pai told The Wall Street Journal earlier this year. “They want access, period. To me at least, that’s the question the FCC should be squarely focused on: What is the regulatory framework that will maximize the incentives of every company to deploy the next generation of networks?”

This brings to mind the adage that to a carpenter, problems generally appear as protruding nails needing to be hammered down. So it's no surprise that to a regulator, America's telecommunications infrastructure deficiencies are a regulatory problem calling for a sharp whack of the regulatory hammer. Or in Pai's words, an overgrown regulatory thicket of weeds calling for the application of a weed whacker.

The problem is Pai has incorrectly framed both the problem and the solution. America's disparate and costly telecommunications services and particularly those serving buildings where people live, work and attend school are not caused by excessive regulation. In fact, the reverse could be plausibly argued. The Federal Communications Commission current Open Internet rules classifying Internet service providers as telecommunications common carrier utilities under Title II of the Communications Act require them to fulfill reasonable requests for service and not discriminate based on a customer's address. That operates so as to force them to upgrade and build out their networks to honor those requests.

Rather, they are primarily due to overreliance on legacy telephone and cable companies to make the necessary capital expenditures to transition their metallic cable plants to fiber. And to do so at a rapid pace in order to meet the burgeoning demand for connectivity of which Pai speaks. Their business models that require quick profits can't do that because it can take many years to achieve profitability on telecommunications infrastructure that costs many billions of dollars.

Fearing state imposed universal service obligations and rate regulation, legacy incumbent telcos, cablecos seek federal cover

A decade ago as Internet-based telecommunications grew and began transporting video content, telephone and cable companies feared local governments would using their video franchising authority established in the cable TV era require them to build out their infrastructures to ensure all residents had connections. The pre-Internet cable television franchise had evolved. It was no longer just about entertainment. In the Internet era, it was now the full panoply of advanced telecommunications services: voice and data as well as video. That in turn would stoke demand for better infrastructure that could reliably deliver them.

However, the legacy incumbent telephone and cable companies didn’t want to be forced to upgrade and build out their cable plants to serve all customer premises in order to do business in numerous localities. Their business models are based on serving selected neighborhoods within arbitrary “footprints” of “serviceable” premises and not entire local government jurisdictions.

They initially sought relief in Washington from Congress and the U.S. Federal Communications Commission to preempt state – and by extension local -- video franchise regulation. That would take care of a multiplicity of potentially troublesome local governments imposing universal service conditions under their video franchising authority. But the National Governors Association and the National Conference of State Legislatures pushed back, wanting to keep video franchising within state jurisdiction.

Incumbents were able to easily pivot from that objection to their Plan B to kill local government video franchising authority: lobby state governments to take it over from local governments. That effort was quite successful, with state video franchising laws put on the books in state after state in the mid-2000s. Those laws such as California’s Digital Infrastructure and Video Competition Act of 2006 did not mandate video franchisees provide universal service by some future date in areas where they were awarded state franchises, thus sanctioning neighborhood redlining. Consequently, local governments that often receive complaints from constituents denied landline connections to advanced telecommunications service by the big incumbents are powerless to do anything about it since those connections fall under state video franchising authority. Calling one’s state representative isn’t helpful either since the incumbents have captured legislatures and state telecommunications regulatory agencies by buying political influence with campaign contributions.

The fight over universal service has now shifted from video franchising to a new regulatory front. But this time around, the incumbents ironically want protection from the states. They’re concerned that if the federal government continues avoid enforcement of universal service policy expressed in the Communications Act as amended in 1996 or the FCC’s 2015 Open Internet rulemaking -- or scraps the Open Internet rulemaking altogether -- the states might opt impose their own universal service obligations.

The big legacy incumbents are also worried over the prospect of states regulating service rates as authorized in the federal Open Internet rulemaking. In the two years the Open Internet rulemaking has been the law of the land, the FCC hasn’t enforced that provision either.

Given widespread complaints voiced by state and local elected officials over both spotty access to service due to neighborhood redlining and affordability challenges for low income households, the incumbents have reason for concern. Two of the nation’s largest telephone and cable companies, Verizon and Comcast, respectfully, are urging the FCC to enact a “clear, affirmative” rule preempting states, declaring federal primacy over state regulatory jurisdiction. However, such a rulemaking could fail to hold up in court against a statute enacted by a state legislature given a 2016 decision by the United States Court of Appeal Sixth District in State of Tennessee et al. v FCC & USA finding the FCC could not preempt state law without express federal statutory authority to do so. That could set up a grueling battle in Congress between the big telcos and cablecos and the states over the regulation of advanced telecommunications services.

With the level of dissatisfaction in the states over access and affordability to landline delivered advanced telecommunications services, it’s not a fight the incumbents would automatically win despite the massive lobbying and campaign cash they can bring to bear in Washington. Many if not most candidates for state and local offices have made access to and affordability of advanced telecommunications services a campaign issue, terming it infrastructure vital to commerce, education and telehealth services. In addition, the level of need and public interest is much higher now than it was a decade ago when the incumbents were lobbying state governments to enact statewide video franchise laws.

Why legacy incumbent telephone and cable companies want FCC re-reclassification as information service providers. Hint: It’s not “net neutrality.”

If the U.S. Federal Communications Commission revokes its 2015 Open Internet rulemaking classifying Internet as a telecommunications common carrier utility under Title II of the Communications Act and restores the previous rule classifying it as information service under Title I of the law as expected before year end, it will set the stage for another round of litigation just as that which followed after the 2015 rule was adopted. This time however it will be public and consumer interests that will be challenging the FCC rather than legacy incumbent telephone and cable companies. And the governing statute, the Communications Act, might well be on their side. Section 3(a)(1)(41) of the Act as amended in 1996 defines an information service as follows:

INFORMATION SERVICE- The term `information service' means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

The legacy incumbent telephone and cable companies want the FCC to define their Internet protocol delivered services using that definition, essentially equating them with services like LexisNexis or Intelius. Their problem however is these companies market Internet protocol-based telecommunications services such as data, voice and video delivered over their connections to customer premises. If they were merely information services like LexisNexis or Intelius, they wouldn’t market physical premise connections sold in throughput speed tiers for a monthly recurring fee. In so doing, they are arguably offering telecommunications service, which the statute defines as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.”

So what is the incumbents’ main motive in not wanting to be classified as telecommunications providers under Title II of the Act? Hint: It’s not “net neutrality” – the requirement they treat the bits and bytes of Internet protocol moving over their networks equally regardless of origin. The primary reason to avoid being classified as telecommunications providers is to escape the requirement in the Communications Act as amended in 1996 that they provide advanced telecommunications capability to all areas of the nation consistent with the public interest, convenience and necessity. It must enable users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology per Section 706(c)(1) of the statute. Elected policymakers at all levels of government generally agree advanced telecommunications capability is even more in the public interest and vital to the constituents they represent than it was when the 1996 Act was enacted two decades ago.

Incumbents also chafe at the prospect of price regulation as advanced telecommunications providers as authorized at Section 706(a) of the Act. Bottom line, if they are regulated solely as providing an information service and not as telecommunications common carriers, then they would be able to continue to redline neighborhoods they don’t wish to serve and charge customers in those they do whatever they wish – just as they have since the statute was enacted without meaningful regulatory enforcement. That might serve the interests of their shareholders, but clearly doesn’t comport with the public interest specified in the statute.

Legacy metallic telcos, cablecos fight rear guard actions against local FTTP initiatives

Municipal broadband advocates cry foul amid Seattle mayoral race: An ongoing debate over making broadband internet a public utility in Seattle is surfacing in the city's mayoral election, and advocates for the cause are crying foul over contributions large telecommunications companies have made in the race. Comcast and CenturyLink, two internet service providers in Seattle, collectively donated about $50,000 to a political action committee supporting Jenny Durkan, a candidate who opposes municipal broadband. Municipal broadband advocates say that the telecom companies’ donations represent efforts to maintain the duopoly they have in the region. The PAC is the Civic Alliance for a Sound Economy (CASE), which is sponsored by the Seattle Metropolitan Chamber of Commerce. “If I was running one of the most powerful monopolies of the modern era, I’d be donating as much as I could to take over local politics also,” said Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

Mitchell is correct. Due to high cost barriers to competitor entry, telecommunications infrastructure functions as a natural monopoly, a fact recognized in the previous regulatory regime governing analog voice telephone service. Title II of the U.S. Communications Act requires telephone companies to provide service to anyone requesting it and authorized state public utility commissions to regulate their rates since market forces cannot in a monopoly market. 

In its 2015 Open Internet rulemaking, the U.S. Federal Communications Commission made it clear Title II also applies to digital telecommunications delivered using Internet protocol technology. But the United States hasn’t found the regulatory fortitude to enforce that requirement, allowing landline advanced telecommunications providers to redline neighborhoods they don’t want to serve and charge whatever they want. Most pundits expect the FCC to repeal that rulemaking later this month and turn the clock back to the start of the new century when Internet was still a relatively novel “information” service where people “went online” with “broadband” (versus narrowband dialup) connections.

Meanwhile, telephone and cable companies find themselves fighting rear guard actions by localities all over the nation that like Seattle prefer fiber optic infrastructure over metallic cable that isn’t bundled with proprietary services -- known as an open access network. They're tired of waiting and understandably have lost confidence after years of incumbent promises of fiber upgrades that never materialized because their business models can't absorb the needed capital expenditures.

Had the nation engaged in sound public policymaking and prudent planning a generation ago when it became apparent telecommunications was transitioning from analog to digital Internet protocol, the legacy incumbents wouldn’t find themselves fighting these battles. But since they themselves heavily influenced public policy on telecommunications over the past few decades, they hoisted themselves on their own petard and became among the most hated companies in America.

California like rest of nation suffers from poor advanced telecom service

The Social Cost of Weak Broadband Competition in California: Over the last 8 years, California has spent more than $200M funding projects and subsidizing service to close the broadband digital divide. While the intent is good, the results are limited given that home broadband subscriptions are unchanged today from 2010. It is clear that California cannot subsidize its way out of the digital divide. Despite the claims of Sosa and the Big 5, California’s uncompetitive fixed broadband service hurts everyone. The answer is to either promote retail competition or regulate the Big 5’s monopolies like we do in the energy sector.

California like the rest of the nation has the worst of all worlds: a naturally monopolistic advanced telecommunications market but no monopoly regulation as is done for electric power and natural gas utilities. The U.S. Federal Communications Commission nominally recognized advanced telecommunications as a natural monopoly utility in 2015, placing it under Title II of the Communications Act that regulated basic telephone service before it with rate regulation and a universal service requirement. "Nominally" because this regulatory scheme was put in place on paper only and not enforced.

The author is correct in noting we cannot extricate ourselves from this unfortunate circumstance with subsidies because they don't fundamentally alter it.

Why Title II regulation is anathema to legacy telephone and cable companies

POTs and PANs | Pretty Advanced New Stuff from CCG Consulting: Until recently I always wondered why the ISPs are fighting so hard against Title II regulation. All of the big companies like Comcast, AT&T and Verizon have told stockholders that their initial concerns about Title II regulation did not materialize. And it’s obvious that Title II hasn’t changed the way they invest in their own companies.

That's because the Federal Communications Commission's Open Internet rulemaking is not being enforced since it took effect in June 2015. No enforcement = no material impact.

But recently I saw an article and wrote a blog about an analyst who thinks that the ISPs are going to drastically increases broadband prices once Title II regulation is gone. Title II is the only tool that the government can use to investigate and possibly act against the ISP for rate increases and for other practices like data caps. If true, and his arguments for this are good ones, then there is a huge motivation for the big ISPs to shed the only existing regulation of broadband.

That's exactly the issue -- and NOT "net neutrality" as the Open Internet rulemaking has been unfortunately dubbed as if the rulemaking only prohibits telecom providers from blocking and throttling content. The main reason the legacy telephone and cable companies dislike Title II regulation is that it is predicated on a natural monopoly market. That requires prices to be regulated because market forces won't act to control them as well as universal service obligations. Both are anathema to these entities because they naturally prefer an unregulated monopoly market that affords them full freedom to cherry pick and redline and charge whatever they choose, placing end users at a distinct advantage to their shareholders.

Where's the case Title II regulation of ISPs deters telecom infrastructure investment?

Improved broadband access is one of the most important benefits of reversing Title II overreach. The internet brought us what seems like endless opportunities. The corollary to this, however, is that Americans without access to the internet are left behind. Internet access and computer skills are key to being connected, well-informed and competitive — not only in today’s job market, but ultimately in today’s digital era. By returning to commonsense regulation that incentivizes broadband investment and expansion, we can build out more robust networks that keep the American dream alive for those striving to succeed in today’s technology-driven world. At least ten percent of Americans (35 million people) lack adequate broadband access, according to the FCC’s 2016 Broadband Progress Report. This includes 23 million Americans in rural communities. Faced with these troubling statistics, priority should be heightened to champion the urgency of broadband deployment.

Source: Rolling back 'net neutrality' is essential to the free internet's future.

Problem with this argument is it fails to state a clear case as to why subjecting Internet service providers offering Internet protocol-based telecommunications service under Title II of the Communications Act will deter deployment of telecommunications infrastructure. In fact, the Title II regulatory scheme mandates universal service to all Americans who reasonably request service. Many if not most of those millions of Americans the author points to as lacking adequate Internet access have repeatedly requested service and been denied service in violation of this requirement and its bar on neighborhood redlining. That's because providers have not adequately invested in their infrastructure to make service available to them. Those provisions of Title II were put in force in 2015 by the U.S. Federal Communications Commission's Open Internet rulemaking. (Click here for more background.)

Insanity defined: The continuing call for more competition in telecom infrastructure

FCC doesn't know enough about competition, or lack thereof, says GAO: The Federal Communications Commission needs better information about broadband competition, according to a report by the federal government accountability office. Existing data shows that 51% of U.S. residents only have access to one provider that offers at least a minimum level of broadband service, which the GAO defines using the FCC’s own advanced services standard of 25 Mbps download and 3 Mbps upload speeds.

That the majority of Americans have only a single advanced telecom services landline provider shouldn’t surprise anyone. If the Government Accountability Office conducted a similar study of other utilities – which is how the Federal Communications Commission classifies this service – it would find most Americans have only one water, electric power or natural gas utility serving them.

What makes advanced telecom service any different? Is it reasonable to expect multiple advanced telecom providers to make connections to customer premises when the economics of the dominant investor-owned business model leave many consumers with no options whatsoever let alone multiple choices? For inexplicable reasons, analysts ignore the microeconomics of telecom infrastructure where high cost barriers to entry make market competition – defined as many sellers competing for many buyers-- impossible. 

Americans hold the large investor owned telephone and cable companies that dominate a market that tends toward monopoly or duopoly in low regard. The misguided belief is more competition will up their game and force them to provide better value and customer service. Problem is that solution is only viable in a competitive market. Telecom infrastructure isn’t one and calling for more competition won’t make it so.

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.

FCC has few if any options to accelerate modernization of U.S. telecom infrastructure

Maybe Americans don’t need fast home Internet service, FCC suggests | Ars Technica: Americans might not need a fast home Internet connection, the Federal Communications Commission suggests in a new document. Instead, mobile Internet via a smartphone might be all people need. The suggestion comes in the FCC's annual inquiry into broadband availability. Section 706 of the Telecommunications Act requires the FCC to determine whether broadband (or more formally, "advanced telecommunications capability") is being deployed to all Americans in a reasonable and timely fashion. If the FCC finds that broadband isn't being deployed quickly enough to everyone, it is required by law to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." (Emphasis added)

The problem is the FCC has few if any effective options to accelerate the modernization of American telecommunications infrastructure. That's because the biggest barrier to private investment in infrastructure to support advanced telecommunications is economic and not a regulatory matter within the FCC's jurisdiction.

Privately owned telecommunications companies must achieve a rapid return on investment to satisfy investors. That's a tall order given infrastructure construction requires copious amounts of capital be invested up front with a long wait until that investment is recouped and generates profit. Their business model is based on selling monthly service bundles and speed tier subscriptions to individual customer premises. It frequently fails to spin off sufficient predictable revenues to earn the required return on invested capital within the investors' time horizon.

That substantially degrades the business case for investing in infrastructure and raises economic risk, in turn leading to market failure and infrastructure deficiencies and disparities. There is little if anything the FCC or any other regulator can do to address that economic reality. It's fundamental to the predominant U.S. model of private ownership and operation of telecommunications infrastructure.