Wipro Launches Prepaid Broadband Solution for US Cable Market - Yahoo! Finance

Wipro Launches Prepaid Broadband Solution for US Cable Market - Yahoo! Finance

I'm not so sure that adopting a pre-paid pricing scheme like that of the personal wireless market will provide sufficient incentive and ARPU for cable companies to build out their infrastructures to capture new customers.  But from a consumer perspective, it's far better than the current practice of asking would-be customers to come up with $65,000 per mile (with no equity in return) to build out to their neighborhoods under so-called "self help" provisions of cable franchise agreements.

Software solution touted as way to help cable companies ration, monetize bandwidth

Active Broadband Networks Ensures Accuracy of Internet Usage Data in DOCSIS Networks - Yahoo! Finance: FRAMINGHAM, MA--(Marketwire - Oct 9, 2012) - Active Broadband Networks, an innovative supplier of next-generation operation support systems (OSS) for broadband providers, today announced enhancements to its software that improve operator visibility into the integrity of Internet protocol detail record (IPDR) data collected from Cable Modem Termination Systems (CMTSs) in DOCSIS networks. Cable operators rely on IPDR data to compute subscriber Internet usage for usage metering and usage-based pricing as well as a variety of broadband service management applications, so accuracy is a critical requirement as they seek to measure, manage and monetize increasing Internet usage.

When the business model is based on getting more out of existing customers rather than expanding to get new ones, this makes perfect sense.  A key component is commoditizing Internet bandwidth so it can be segmented into discrete unit prices. The company issuing the above news release is selling a tool to cable companies to help them do just that.

Susan Crawford on the state of U.S. Internet access

Susan Crawford has penned an excellent overview of the current state of Internet access in the United States in The New York Times, The New Digital Divide.

As the title of her piece suggests, Internet access is highly fragmented. Cable companies provide limited wired access in discrete, monopolistic markets in densely populated metro areas for those able to afford the $100 monthly cost (when bundled with voice phone and video) that these cablecos can increase at will absent the check and balance of market forces and rate regulation.

Meanwhile, lower income Americans who can't afford both wired and wireless access rely on wireless smartphones for Internet connectivity that costs half as much as bundled wired access. So must those who can afford wired access but can't get it at any price because of incomplete build out of wireline infrastructure. But it's not full access and comes with major disadvantages versus wired premises service. Crawford explains:

The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

It is not just inconvenient — many of these activities are physically impossible via a wireless connection. By their nature, the airwaves suffer from severe capacity limitations: the same five gigabytes of data that might take nine minutes to download over a high-speed cable connection would take an hour and 15 minutes to travel over a wireless connection.

Even if a smartphone had the technical potential to compete with wired, users would still be hampered by the monthly data caps put in place by AT&T and Verizon, by far the largest wireless carriers in America.

Cable emerges as dominant commercial ISP

As the Internet becomes the all purpose global telecommunications medium delivering voice, video, the web and email, cable companies have emerged as the dominant Internet Service Provider (ISP).

As Susan P. Crawford explains in this Harvard Law & Policy Review article The Communications Crisis in America, compared to incumbent telcos and wireless and satellite ISPs, only cable offers sufficiently robust bandwidth and headroom going forward. Telcos can't keep up since they would incur unabsorbable costs to replace their obsolete copper cable plants with fiber -- costs that would also make their generous stock dividends obsolete.

That's not likely to change despite the Federal Communications Commission's recent reforming of the Universal Service Fund (USF) from subsidizing plain old telephone service (POTS) in high cost areas to Internet. The Connect America Fund (CAF) requires telcos merely provide first generation DSL-level connectivity of 4Mbs for downloads and 1Mbs up and allocates only $4.5 billion a year -- hardly enough to meaningfully offset the cost of changing out decades-old copper plant for fiber.

In the wireless realm, the physics of radio spectrum hamstring wireless ISPs while satellite Internet -- on the verge of obsolescence from the day it was introduced -- has clearly reached its expiration date.

With cable now the dominant commercial Internet provider for most Americans, Crawford argues for increased government scrutiny of its monopoly market power. Crawford's position may draw support from community networks that have gone up against cable companies that pull out all the political stops to preserve their monopolies. The cable guys don't always win as Longmont, Colorado showed this week and as reported by Christopher Mitchell of Community Broadband Networks. Community networks also have a technological carrying capacity edge over the hybrid coax/fiber cable plant employed by cable companies since they typically deploy full fiber to the premises networks.

Analyst calls it wrong: DOCSIS doesn't support U.S. policy to expand broadband access

This MSNBC item quotes from an analysis by Pike & Fisher:

The Silver Spring, Md.-based research house also predicts that DOCSIS 3.0 will garner a lot of support from government officials distributing funds from the economic stimulus package.

"Considering the massive bandwidth increases that will be enabled by upgrading DOCSIS 2.0 to 3.0, the government is likely to view DOCSIS 3.0 as a most feasible and affordable near-term solution to perceived bandwidth scarcities," says P&F Chief Analyst Tim McElgunn, who authored the report.

This analysis is fatally flawed and reflects a major misapprehension of U.S. government policy. That policy is to expand broadband access -- and not to subsidize efforts by cable cable operators to increase their throughput speeds.

The issue with cable providers isn't that their broadband throughput is lacking for current needs. Rather it's the limited footprints of their local access networks that were planned decades ago when they served as single purpose TV delivery platforms that are no longer revelevant to current build out of homes and businesses that could benefit from their IP-based advanced services including high speed Internet and VOIP (Voice over Internet Protocol).

Telcos, cablecos have future role as middle mile and long haul IP connectivity providers

Bob Frankston has penned a thoughtful piece that encourages out of the box thinking when it comes to broadband Internet connectivity. He's dead on. We're at a transition point between yesterday's legacy single purpose, proprietary telco and cableco owned systems designed to dispense discrete services as billable events and the open architecture possibilities of the Internet that allow for customization according to need.

The two models are not compatible -- which Frankston says explains the artificial market scarcity of bandwidth delivered via the telcos (slow and costly 1970s-era T-1 lines that telcos are still selling, for example) and cablecos at a time where fiber to the end user is capable of delivering hundreds of megabits and even gigabits per second.

Instead of expecting telcos and cablecos to meet our Internet protocol-based telecommunications needs, Frankston suggests we view these entities as middle mile and long haul carriers. They would still have a critical role to play, serving locally owned and operated telecommunications entities such as municipal fiber systems and fiber cooperatives. Frankston has seen the future and I share his vision.

Telco plans LTE for fixed premises broadband

FierceBroadbandWireless reports CenturyTel CEO Glen Post told the publicly traded telcos's quarterly conference call that it will deploy Long Term Evolution (LTE) aka 4G cellular broadband in 2010 as a platform to serve fixed premises customers in rural areas. CenturyTel serves small and mid-sized markets in 25 states, according to its Web site.

If this really occurs and isn't yet another of the vaporware technology claims common in the wireless broadband world, it could provide a superior interim fixed premises broadband pipe in broadband black holes until these areas can be wired for fiber optic cable plant.

Currently 3G cellular broadband plays that role in some areas lacking wireline delivered broadband. But it's more appropriate for mobile broadband than for fixed premises users given the tradeoffs of relatively slow throughput speeds, high latency and low bandwidth caps. Locally owned and operated fixed terrestial Wireless Internet Service Providers (WISPs), which also presently play a major role in bridging the broadband gap created by the limited technological reach of DSL and the limited service area footprints of cable companies, aren't likely to be competitive with 4G where it's deployed.

If it can deliver with good latency numbers, LTE could also offer better coverage than 3G since it will utilize 700 MHz radio spectrum that was purchased by CenturyTel Broadband Wireless and other telcos such as AT&T and Verizon in federal auctions conducted last year. The spectrum was formerly used for television signals and is noted for its robust ability to carry through rolling terrian and trees and buildings.

LTE will also potentially offer far higher thoughput -- in the range of 10-15 Mbps, according to Sidecut Reports. That's at least five times faster than what's currently available from 3G and WISPs.

NPR story on U.S. broadband access illustrates major flaw in media coverage of issue

NPR's Morning Edition has a story out this AM on the $7.2 billion set aside for grants to subsidize broadband telecommunications infrastructure that Congress sent to President Barack Obama. Unfortunately this NPR story like others in the mainstream media paint the U.S. broadband landscape with far too wide a brush and reinforce the myth that lack of broadband access is confined to rural areas.

Due to the technological limitations of Digital Subscriber Line (DSL) over copper cable offered by telcos and the limited footprints of single purpose cable company plants built decades ago solely to provide TV, broadband black holes can be found most anywhere in the United States: in urban centers, suburbs, exurbs, quasi-rural as well as rural areas.

Homes and small businesses in one part of these areas may have access to broadband while those adjacent and just one or two miles away -- and oftentimes in even closer proximity -- don't. As noted by this blog recently, the Google search phrase that brings the largest number of hits and visitors to it goes along the lines of "My neighbor can can high speed Internet access but I can't/why not?"

Thy neighbor's broadband

In the three years this blog has been in existence, by far the top Google search phrase that directs readers to it goes along the lines of "My neighbors can get high speed Internet/DSL/cable but I can't/why not?"

The common question ultimately reveals the hodge podge, Balkanized deployment of premises-based wire line broadband Internet access that's about as maddening as not being able to get telephone service when the folks next door can. Or them getting electricity while you're left off the grid.

The high frequency of the Google query directed to this blog also calls into question the widely repeated myth that broadband black holes can only be found deep in rural Iowa or Nebraska when in fact they turn up most anywhere in the United States.

The common Google search term also points up the technological shortcomings of DSL over copper, which is very sensitive to and degrades with distance, as well as the severely proscribed footpoints of cable deployments based on the number of dwellings per an arbitrary linear metric suitable only for neighborhoods laid out along urban gridlines.

Cable providers face increased local government demands to renegotiate franchises for universal access

As cable providers go head to head with telcos to be full service advanced telecommunications players offering video, Internet and VOIP they will increasingly come under pressure from local governments to renegotiate franchise agreements to provide universal coverage. Their constituents no longer see cable as a luxury entertainment service but rather as vital telecommunications infrastructure.

A case in point is detailed in this dispatch from the Shelburne Falls (Massachusetts) Independent.

Analyst: Telcos no threat to cable

Sanford Bernstein Senior Analyst Craig Moffett opines that cable companies face no near term threat from telcos. Moffett is particularly dismissive of AT&T, which he sees unable to match broadband throughput speeds provided by cable companies and unlikely close the gap. Moffett also echos my own observation earlier this year that customers will find DSL increasingly inadequate as they download higher amounts of video content:

But while AT&T may upgrade 40 percent of its DSL plant to fiber in order to bring faster high-speed data service to its customers, some 60 percent of its network won’t be upgraded, Moffett projects. That means that AT&T will still be competing at a maximum standard DSL bit rate of 768 Kbps while cable operators offer substantially higher bit-rates, a disparity that could become more of a competitive challenge for AT&T as consumers download more video online through services like YouTube.

More wishful thinking from CPUC on AB 2987

The California Public Utilities Commission (CPUC) has issued what it says is the first statewide broadband franchise to a cable company, Cox Communications.

CPUC President Michael R. Peevey said the franchise allows Cox to serve four relatively small areas adjoining its existing service territory in the San Diego area, marking a rare occurrence of a cable company attempting to gain customers in a competing cable company’s territory.

Peevey predicts legislation (AB 2987) signed into law last year by Gov. Arnold Schwarzenegger that put the state in charge of cable franchises instead of local governments is likely to spur competition among broadband providers. “This is good news for consumers, who will have additional choices of providers not only for video service, but for the broadband and telephone services that typically are offered over the newly-constructed cable facilities,” Peevey said. “The Legislature’s goal was to foster video competition and broadband deployment, and that is exactly what we see beginning to happen.”

I’m not as sanguine as Peevey. The costs of moving into an existing provider’s service area with new infrastructure are quite high. Consequently, telcos and cable companies are concentrating on their existing service areas. They negotiated low build out requirements in AB 2987 that only require them to deploy broadband to less than half of their service areas by 2012. In addition, cable companies are free to operate under the terms of local government franchise agreements that were in effect when AB 2987 became law earlier this year. That allows them to stand pat and not offer service to areas that currently don’t have service — hardly paving the way for an expansion of broadband as trumpeted by the CPUC’s Peevey.