Federal measure would map broadband black holes, redefine broadband

Nate Anderson of ars technica reports on draft federal legislation, the Broadband Census of America Act, that would define broadband as 2Mbps and have the National Telecommunications and Information Administration create a searchable, Web-based map census of broadband availability. The cable/telco duopoly has historically resisted such maps since they would show large portions of their service areas don't include broadband access and discredit providers' claims that market dynamics are filling America's broadband black holes.

A broadband census has already been enacted in California as part of that state's Digital Infrastructure and Video Competition Act of 2006, AB 2987. It requires those providers who hold broadband "video franchises" issued by the California Public Utilities Commission to provide the PUC broadband penetration data by census tract each year beginning April 1, 2008.

Tales from the dark side of the digital divide, 95709

Nearly seven years ago, a postcard arrived in the mail from Internet Service provider EarthLink announcing that DSL was available in my El Dorado County, California neighborhood. That turned out to be premature — very premature. Seven years later and two years after a promising community meeting with a regional manager for the incumbent local exchange carrier (ILEC), then-SBC Communications and now AT&T, DSL is still not available despite fiber optic cable less than two miles away on a frontage road for a major U.S. highway. Nor is Comcast cable, which recently declined to extend its existing cable plant located a mile and a half away, citing a franchise agreement that allows it to skip neighborhoods that aren’t set up like densely developed common interest developments with zero lot lines.

Today, another postcard — actually the size of a flyer — arrived in the mail. This one from HughesNet satellite Internet and addressed to:

DIAL UP INTERNET USER AT
ADDRESS
CITY, STATE, ZIP

"Been overlooked by DSL and cable?” it asks. “Your high-speed Internet solution has arrived."

Judging from a neighbor’s experience with HughesNet, I hardly think so. It’s maddenly sluggish and not surprisingly so considering each keystroke to load a Web page must make a 46,000 mile round trip up to the HughesNet satellite and back down to the surface. For months, about 20 percent of his inbound email wouldn’t download to his Outlook Express program. So we installed Thunderbird mail as an alternative. The emails came in OK, but nothing would go out.

We spent two hours on the phone with some incompetent HughesNet support guy in Bangalore who couldn't solve the problem. So my neighbor is now relegated to using HughesNet’s crappy Web-based mail program. That’s not all. About a month ago, his granddaughter downloaded a TV program and HughesNet responded by throttling down the throughput to dialup speed as punishment for using too much bandwidth since it has too many ex-dialup desperados trying to cram onto too little HughesNet bandwidth. Many of these ex-dialuggers including my neighbor — large numbers of them seniors simply seeking a viable Internet connection to share pics with the grandkids — have been sucked into signing two-year contracts for what more aptly should be dubbed “MolassesNet” on steroids.

I imagine in another two years, another postcard will arrive in the mail addressed to:

DIAL UP INTERNET USER AT
ADDRESS
CITY, STATE, ZIP

Telecom association chief's assertions at odds with reality

United States Telecom Association President and CEO Walter B. McCormick Jr. filed comments with the Federal Communications Commission this week that contained two key myths of telco propaganda when it comes to broadband deployment in the U.S: 1) that competition is speeding broadband deployment and 2) that telcos are investing in broadband deployments in less densely populated areas of the U.S.

“In addition to deploying new and innovative products and services in urban and suburban communities, telecom companies are spending billions of dollars to reach many of the most geographically challenging and expensive rural areas in the nation,” said USTelecom President and CEO Walter B. McCormick Jr. “The FCC’s market-based policies encourage communications companies to stay ahead of the competition and continue to make significant infrastructure investments. These policies are working and we strongly urge the Commission to allow the highly competitive broadband market to continue to thrive.”

First of all, there's no real market competition in areas that lack broadband access since no one's providing service there. Second, telcos are NOT investing in infrastructure in less populated portions of their service areas. Just the opposite. Infrastructure investment is being concentrated in urban areas such as AT&T's Project Lightspeed and U-Verse initiatives and Verizon's FiOS fiber optic deployment. The FCC's own research found that as of last June, more than 20 percent of telco customers couldn't even get DSL over telcos' aging copper cable plants.

Protecting the telco/cable duopoly

This story out of New York state shows that telcos (in this case, Verizon) can offer broadband-based Internet Protocol TV (IPTV) in without legislation the telcos are seeking in the Empire State to put the state in charge of issuing so-called "video franchises" In this case, Multichannel News reports, the towns of West Haverstraw and North Castle approved Verizon's applications to provide IPTV over its propriety fiber optic FiOS infrastructure.

The telco/cable duopoly has pursued similar legislation in about a dozen states, claiming it would allow them to bypass local governments, bring greater market competition (pretty hard to do in a duopolistic market) and deploy broadband-based services more rapidly. However, at the slow pace at which the telcos and cable companies are expanding the availability of their broadband services, doing with local government regulation one area at a time certainly doesn't seem to be an impediment.

Rather than speed up deployment of broadband, the true objective of the state franchise measures, like a recently-promulgated Federal Communications Commission rule (which is being legally challenged by local governments), is to protect telcos and cable companies from local government demands they hasten the build out of their infrastructures in order to make broadband available to unserved areas.

Ma Bell pipe dream: $1 billion in ad revenue in 3 years

Seems that everyone wants a piece of Internet-based ad revenue. Now even the companies that provide the "pipes" that carry the Internet want in on the action, including Ma Bell.

John Stankey, AT&T's president for operations support, told the Reuters Global Technology, Media and Telecoms Summit in New York that advertising could bring $1 billion to Ma Bell's top line in three years time. Stankey said AT&T can reach that revenue goal by virtue of being the biggest U.S. broadband provider, a wireless carrier and most recently, a purveyor of Internet Protocol Television Service (IPTV) via its nascent U-Verse video service.

I think Stankey's time line is far too optimistic given the slow pace of AT&T's U-verse rollout whose functionality hasn't yet been demonstrated on a large scale. Also the company's sluggishness in even upgrading large portions of its service area that must continue to use early 1990s dial up modem technology to access the Internet or the so-called "Molasses Net" -- satellite Internet service -- which AT&T is hawking via a reseller deal with satellite provider WildBlue.

Rather than the pipe providers getting into the advertising biz, the more likely scenario is the media giants like Rupert Murdoch's News Corp. and Web portals Yahoo! and Google getting into the pipes business, partnering with other companies to build their own broadband infrastructure after tiring of waiting on the telco/cable duopoly to expand their networks.

Vermont legislature approves $40 million bond measure to speed universal broadband access

Blogger Tom Evslin reports Vermont legislation that would make the state the nation's first "e-state" featuring universal broadband and wireless coverage by 2010 is on its way to Gov. Jim Douglas. It defines fixed broadband as a symmetrical (same speed for both uploads and downloads) 3Mbs connection.

The bill encourages both public and private provisioning of service. It includes authorization for up to $40 million in revenue bonds by the State to build infrastructure like radio towers and middle-mile fiber. The State is NOT authorized to become a retail ISP but the plan is to encourage private wireless ISPs (WISPs), wireline ISPs, and cellular operators – as well as municipalities – by making infrastructure broadly available at a reasonable cost even in areas where the short term economics are tough. The bonds need to be repaid out of revenues but this will be “patient” money.

The measure also authorizes local governments to engage in municipal broadband projects. As Evslin states in an earlier post on the legislation, implementation of it could prove more difficult than getting the bill into law. I would agree, considering that $40 million likely represents a small portion of the investment that will be needed to bring universal broadband access to Vermont in just three years.

U.S. Dept. of Agriculture revamps rules for funding rural broadband projects

Dorr outlined several key elements of the proposed rules: Promoting deployment to rural areas with little or no service; Ensuring that residents in funded areas get broadband access more quickly; Limiting funding in urban areas and areas where a significant share of the market is served by incumbent providers; Clarifying and streamlining equity and marketing survey requirements; Increasing the transparency of the application process, including legal notice requirements, to make more informed lending/borrowing decisions; Promoting a better understanding of all application requirements, including market survey, competitive analysis, business plan, and system design requirements; and ensuring that projects funding are keeping pace with increasing demand for bandwidth.

Dorr noted that significant progress has been made in facilitating rural broadband deployment since the program began. Over 70 loans have been made totaling $1.2 billion for broadband deployment projects headquartered in 36 states. Through these loans, more than half a million households in more than 1,000 rural communities will receive broadband service. Over 60% of these communities had little or no broadband service at the time.

HD Net's Cuban calls for broadband infrastructure investment

"[T]he reality is that the consumer internet,…has matured, and its future, unless there is significant investment will constrain economic development in this country.”

Colorado video franchise fight reveals true goal of provider "competition," Comcast's hypocrisy

Here's an interesting story from the Rocky Mountain News that illustrates what the real competition between cable companies and telcos is all about. It's not about which can capture the most customers in a given market -- the traditional measure of market competition -- but rather who can force the other guy to provide service to everyone in a given local government jurisdiction.

Cable provider Comcast insists Denver-based telco Qwest be required to provide broadband video service to everyone in the Colorado municipalities it wants to serve, charging Qwest will leave some neighborhoods unserved if local governments don't require it to do so in exchange for granting Qwest a video franchise. (Note however, hypocritical Comcast does exactly what it accuses Qwest of doing, including in my own El Dorado County, California ZIP code where Comcast serves some neighborhoods but refuses to serve others).

If Colorado local governments force Qwest to serve their entire jurisdictions, the Rocky Mountain News reports Qwest may counter by invoking a recently promulgated Federal Communications Commission rule that Qwest sought prohibiting local governments from imposing "unreasonable" build out requirements on telephone companies seeking franchises to offer enhanced broadband-based video services. The rule also requires local governments to make a decision on a video franchise application within 90 days.

If Qwest presses ahead with this reported effort to accelerate local government video franchise applications, it will set the stage for litigation over the meaning of what constitutes an "unreasonable" build out requirement under the FCC rule. Local governments have already gone to federal court to challenge the rule, contending the FCC overstepped its authority.

Qwest's initiative also marks a quick reversal of a strategy announced earlier this month by CEO Richard Notebaert, who told Bloomberg Qwest planned to hold off offering video over phone lines, concentrating instead on accelerating residential broadband Internet access.

California's AB 2987: Market competition in a tightly limited market

I agree in concept with Pacific Research Institute think tanker and TechNewsWorld columnist Sonia Arrison that allowing telcos to compete with cable companies for broadband video services as California's recently enacted Digital Infrastructure and Video Competition Act (AB 2987) provides is good public policy in that it spurs some degree of market competition. "California lawmakers -- and others across the nation -- would do well to learn from the success of cable franchise reform and discard recycled proposals to over-regulate the technology sector," Arrison opines.

The problem is that competition is geographically restricted, playing out in a limited market where both the telco and cable provider have a presence. Consumers not in these proscribed markets don't benefit from the increased competition envisioned by AB 2987.

In California and most states, there exists a de facto duopoly in which the big telcos and cable companies like AT&T and Comcast have the market all to themselves. There are few if any other competitors nipping at their heels and forcing them to provide more and improved services.

Exhibit A is the large number of broadband black holes that exist in California where hapless residents can't get broadband Internet access from their telco (who in AT&T's case tells them to "go suck a satellite") or from the cable provider (upon whose maps these would be customers simply don't exist). Here, AB 2987 fails to spur competition and better services and does nothing to expand broadband services to unserved areas of the Golden State since the legislation allows the telco/cable duopoly to offer services to just half of potential customers by 2012. That effectively locks the providers into the market they presently serve, creating two separate but unequal Californias -- one with broadband Internet access and the other without.

U.S. Sen. Jay Rockefeller introduces universal broadband resolution

Thanks to Eldo resident Ron Britvich for passing this along this item from ars technica reporting Sen. Jay Rockefeller (D-WV) has introduced a Senate resolution calling for 100Mbps broadband for all U.S. residents by 2015, with an interim goal of 10Mbps by 2010.

Rockefeller noted that at the current pace of deployment, "next-generation" broadband networks (which the resolution defines as being capable of 100Mbps) will not be deployed throughout the US for another 20 years. The resolution calls on Congress to work with the President to develop a strategy with the goal of passing legislation by year end, but since a resolution doesn't carry the force of law, there's no guarantee that it will have any tangible results.

Comcast should expand service area as well as access speeds

Roberts went on to demonstrate how wideband can download four gigabytes of data, the entire Encyclopedia Britannica Library--55 million words and more--in just under four minutes. It would take a traditional cable modem about three hours and a dial-up connection two weeks to download the same amount of data, which Roberts said is equivalent to how much the average family consumes online a month.

“It’s kind of mind boggling to think what you’d be able to do with that speed,” said Roberts.

In the short term, Roberts and his fellow cable operators plan to use that speed to continue to hammer away at the competitive threat from both the telcos and satellite with their triple-play offering of video, broadband and voice services.

Satellite Internet with triple play? What planet is Roberts living on? Satellite Internet is crippled broadband, with sluggish connections and high latency that can't even support Voice Over Internet Protocol (VOIP). As for the telcos, the only real threat is Verizon if it continues to speed deployment of Fiber To The Home (FTTN). If Comcast really wants to compete with the telcos and satellite, it should expand its coverage to those areas where residents are stuck with a Hobson's choice of dial up over aging telco copper cable or satellite.

San Jose Mercury News: Time for action on national broadband policy

The federal government’s lack of leadership in this area is a disgrace. Despite a 2004 promise by President Bush to deliver “universal, affordable access to broadband technology by the year 2007,” his administration has done nothing to advance that goal.

Last month, the Federal Communications Commission, chaired by Bush appointee Kevin Martin, launched yet another study of the sorry state of broadband service in this country.

The U.S. needs action, not another study.

Inadequate telco infrastructure drives cities to build fiber networks

Lafayette's Fiber to the Home project is expected to provide residents and businesses with Internet, cable and telephone services at a low cost.

Salter said cities with fiber networks have experienced economic growth as a result.

"We just think that the ability to move information is where everything is going," he said.

Huval said telecommunications companies have infrastructure with limited capacity.

Fiber will not artificially limit capacity, he said. Residents will be able to choose how they want their fiber.

Satellilte Internet customers condemned to broadband purgatory

Satellite Internet providers serve about 10 percent of the U.S. that is mired in broadband black holes, according to one of them, Hughes Communications. And they believe they'll have a lock on this captive market for the foreseeable, betting the wire line telco/cable duopoly won't ever serve these areas. AT&T reinforces this grim reality, making satellite a key element of its broadband initiatives.

Their customers face a purgatory of sluggish connections slowed by the 46,000 mile round trip from their computers to satellites that they must share with thousands of other customers, unlike the commercial and military users of the technology.

"If you look at this industry ten years from now, there's still a good chance consumers will still be unhappy. And the reason is that satellite bandwidth is extremely expensive," said Randy Scott, manager at VSAT U.S., a Monument, Colo., company that installs satellite dishes for commercial customers. HughesNet is one of the companies he works with.

Broadband franchise legislation or not, AT&T not expected to deploy broadband to Tennessee small towns

AT&T is threatening Tennessee lawmakers that it will not invest in deployment of broadband in smaller towns if the state legislature doesn't pass a state video franchise bill backed by the telco.

A lobbyist for local governments opposing the measure however says even if it were enacted, AT&T would continue to concentrate on large metro areas of the state and leave smaller towns on the dark side of the digital divide.

Which is likely true because similar statewide franchise bills such as California's Digital Infrastructure and Video Competition Act of 2006 (AB 2987) -- which was also sought by AT&T -- requires big providers to deploy broadband to just half of their service areas by 2012, leaving non-urban areas out in the cold.

Will Comcast seek California state charter?

As demand for broadband Internet access grows, California municipalities and counties will invariably find themselves under pressure to amend franchise agreements with cable companies like Comcast to require them to extend service to neighborhoods lacking cable access. Even areas where AT&T and other telcos provide broadband via Digital Subscriber Line (DSL) could clamor for cable service since it offers a proven bundle of television and Internet access at speeds higher than DSL.

But if they do, will Comcast and other cable providers tell California local governments to take a hike and opt to obtain a statewide franchise under legislation that took effect earlier this year, the Digital Infrastructure and Video Competition Act of 2006?

Enacted last year as AB 2987, the law allows both cable and telephone companies to bypass local governments and instead obtain authority to offer video-capable broadband through franchises issued by the California Public Utilities Commission (CPUC). But AB 2987 also allows cable companies to operate under existing local government franchise agreements if they choose. So far, Comcast is doing just that and has not applied for a statewide franchise from the CPUC. (To date, only one cable provider, Cox Communications, has applied for a statewide franchise.)

If enough California local governments pressure Comcast to build out its cable plant to provide service to more neighborhoods, Comcast could well opt for a state charter under AB 2987. The reason: the law has very limited build out requirements that require providers serve only half of their regional service areas by 2012. Opting for a statewide franchise would provide Comcast and other cable providers an easy exit from local political pressure to expand broadband access.