Multiple fiber connections in some regions while others stuck in 1990s highlights U.S. telecom infrastructure disparities

Google Fiber franchise coming up for vote

This story linked above illustrates the extreme degree of disparate access to modern fiber optic telecommunications infrastructure that is developing in the United States. As the story reports, Louisville Kentucky and environs could end up with as many as four companies building fiber to the premise telecommunications infrastructure (Google Fiber, AT&T, and two other smaller providers). This at the same time millions of American homes and small businesses are offered only dialup or first generation DSL while others make do with satellite, mobile and fixed wireless services not capable of meeting the U.S. Federal Communications Commission's Internet service standard for supporting high-quality voice, data, graphics and video.

The driver of this perverse situation is the winner take all ethic that's part and parcel of the predominant vertically integrated business model in which service providers own both the fiber connection to premises and the services delivered over it. Publicly-owned open access fiber infrastructure serving every premise offers a far more efficient model and isn't prone to customer churn and market failure. Only one fiber connection is necessary to deliver telecommunications services given the substantial carrying capacity of fiber.

FCC brings Internet under Lifeline program – but without universal service obligation

The U.S. Federal Communications Commission has issued a final rulemaking bringing Internet service under the Lifeline program established in 1985 requiring discounted telephone service for qualifying low-income households.

However, under the final rule, incumbent telephone companies are not required to offer discounted Internet service to a Lifeline eligible low-income household requesting service in areas where the companies have not modernized and built out their plants to provide Internet service. That contravenes the FCC’s Open Internet rulemaking adopted in 2015 classifying Internet as a common carrier telecommunications utility under Title II of the Communications Act. Title II requires Internet service be provided upon reasonable request. The final rule also exempts telephone companies receiving FCC subsidies for universal service support in high cost areas from having to provide Lifeline Internet service.

We are sympathetic to ILECs’ (Incumbent Local Exchange Carrier) concerns about requiring them to offer broadband in Census blocks within their ETC designated service areas …where broadband services are not commercially available,” the final rule states. “In addition, for recipients of high-cost support, in those areas where the provider receives high-cost support but has not yet deployed a broadband network consistent with the provider’s high-cost public interest obligation to offer broadband, the obligation to provide Lifeline broadband services does not begin until such time as the provider has deployed a broadband network and is commercially offering service to that area.”

Despite the final rule’s contravention of the FCC’s 2015 Open Internet Rulemaking, the FCC employs Orwellian doublespeak in insisting it does not:

“Our actions today are consistent with the universal service goals promulgated by Congress. Congress articulated national goals in Section 254 of the Act that services should be available at “affordable” rates and that “consumers in all regions of the nation, including low-income consumers . . . should have access to telecommunications and information services.”

Pleas for more competition make case for public option in telecom infrastructure

America’s telecommunications infrastructure crisis is fundamentally a microeconomic problem. Vertically integrated Internet service providers and consumers have difficulty transacting on mutually agreeable terms that consumers regard as offering good value. And about one of five American homes and small businesses can’t purchase landline Internet connections at all because none are offered to them.

Many consumer advocates and commentators frame the economic problem as one of insufficient competition. If there were only more providers offering services, then more consumers would be offered service and at superior value over that sold by legacy telephone and cable companies. After all, that’s how the competitive market works for other consumer services such as home improvement, landscaping, and housecleaning. Offer good service at reasonable value, you’re competitive. If you don’t, you’re not and could end up run out of business by the competition. The same rules should apply to “broadband” since it too is a service, the thinking goes. Consumers want the freedom to ditch their service provider and choose another offering better value.

It doesn’t work that way for telecommunications services including Internet because they are vertically integrated services – typically delivered by the same providers that own the infrastructure to deliver them. Due to the high cost of building and maintaining that infrastructure, there will only be one or two providers. Adding more competitors to build alternate “pipes” to compete with these providers isn’t an option because these high capital and operating costs discourage new entrants. Choice A is the telephone company. Choice B is the cable company. If they both suck on service and value – which they often do -- you’re out of luck.

But there is an alternative – the “public option” as it was termed in the recent policy discussion on health insurance reform: publicly owned infrastructure. That disintermediates ownership of telecommunications delivery infrastructure from the services offered over it like voice, data and video. In doing so, it eliminates the potential for abuse of the monopoly market power of the vertically integrated legacy providers to hold consumers hostage. The potential for abuse is substantial because a home or business must “subscribe” to their connections. Without a subscription to the hookup, none of these services are available. Having ownership of the infrastructure allows them to call all the shots. It doesn’t have to be that way.

There is only one entity in the United States that has the economic capacity to construct publicly owned, modern fiber optic telecom infrastructure that connects all American homes, businesses and institutions: the federal government. I discuss in detail in my recent eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis.

UK considers universal service legislative requirement

Families face paying thousands for high speed internet access | Daily Mail Online:

Every family will win the right to demand a ‘fast’ broadband connection it was announced in the Queen’s Speech yesterday, but those in remote communities may have to pay hundreds of pounds to get it. The new Digital Economy Bill hopes to finally bring broadband technology to one million people whose properties have until now been treated as economically unviable or too difficult to provide with high-speed connections. But the legislation falls short of the Conservative Party’s manifesto pledge to ensure every home gets access to so-called ‘superfast’ broadband.

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Adam Marshall, of the British Chambers of Commerce said: ‘If implemented in full and at pace, this could go some way to improving the poor digital connectivity that far too many firms face.’Government sources said BT, which is in line for subsidies worth 1 billion to roll out broadband to 95 per cent of homes by the end of next year, has resisted the idea of a legal guarantee. But ministers have decided the threat of legal action is needed to ensure the final five per cent of homes also get a decent connection.

It boggles the mind to consider a relatively small island nation has so many premises still off the Internet grid in 2016. The U.S. already has a universal service/nondiscrimination requirement in law per the Federal Communications Commission's 2015 Open Internet rulemaking but is not enforcing it.

Growing bandwidth demand obsoletes Verizon Wireless 4G LTE Installed premise Internet product offering

Fellow blogger Doug Dawson has written extensively on burgeoning consumer bandwidth demand rendering obsolete DSL (Digital Subscriber Line) as an interim premise Internet service on the way to fiber to the premise (FTTP).

Now the trend is claiming Verizon Wireless's 4G LTE Installed service as its latest casualty. The service offers inadequate throughput to serve multiple devices. Plus its pricing is unworkable relative to current premise bandwidth needs.

The service is priced similar to Verizon's mobile service in monthly bandwidth consumption tiers. The more bandwidth used, the larger data plan a household will need. There are substantial overage charges for using more bandwidth than the contracted plan.

A single home office computer with daily business use and taking into account software updates would consume the bulk of the most generous plan offered -- 30 gigabits of data. That plan goes for an eye watering $120 a month -- leaving little left over for other devices.

Google Fiber's national ambitions, wireless as interim service, and going to debt markets- Recode

Google Fiber is the most audacious part of the whole Alphabet - Recode

This Recode article quotes an unnamed former Google Fiber staffer as saying Google Fiber's plan is "to grow to be nationwide at some point." The question is at what point considering the enormous backlog of work needed to modernize America's legacy metallic telecommunications infrastructure designed to deliver cable TV and phone service with future proof fiber to to the premise plant. The nation is already a generation behind where it should be relative to completing that task.

The piece also raises the previously reported point of Google Fiber exploring using wireless as an interim delivery technology until fiber to the prem can be installed in order to speed up deployment. But that won't provide a dramatic geographic acceleration since fast wireless service requires fiber backhaul to be installed nearby.

Also mentioned is the prospect of Google Fiber going to the debt markets to borrow the many billions it will need to extend fiber to nearly every American home, business and institution. And many, many billions it will need. As the late Senator Everett Dirksen is oft quoted, "A billion here, a billion there and pretty soon you're talking about real money." And that real money spells the difference between fiber to the press release and fiber to the premise.

Motley Fool item on 5G as premise service overlooks #FTTP

AT&T and Verizon's 5G Ambitions Are Cable's Worst Nightmare -- The Motley Fool: When it comes to picking a cable Internet provider, you usually have one (maybe two, if you're lucky) options. Time Warner Cable (NYSE:TWC) and Comcast (NASDAQ:CMCSA) provide Internet to about 71% of new Internet subscribers in America right now. That percentage is expected to stay about the same if Charter Communications' purchase of Time Warner Cable goes through.

The near-duopoly of cable providers in many regions of the country is a long-standing problem -- and wireless providers may have found a solution. You may already know AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) are in the process of testing 5G networks, which will bring much faster and reliable connections than even 4G LTE. But what you may not know is that 5G could also be used as an ultra-fast wireless connection for home broadband, too.

How 5G home broadband works.
Cellular connections work by sending out long-range signals from very large towers, but 5G home broadband would work a bit differently. AT&T and Verizon are testing out what's called "fixed wireless" in which a home wireless router would receive a signal from small cellular boxes (called small cells) placed much closer to your home than large towers.

Missing from this Motley Fool story is the cost/benefit tradeoff discussion comparing 5G to fiber to the premise (FTTP). Wireless does indeed have greater throughput capacity when the signal doesn't have to travel far such as in-building Wi-Fi. But it will take a lot of fiber installed relatively close to customer premises to support those small cell sites. So close, in fact, that it raises the question as to whether 5G makes sense as a premise telecom service delivery technology considering the small additional cost of bridging the short distance between small cell sites and customer premises with a direct FTTP connection. A connection that is far more future proof, less subject to interference and obstacles such as hills and foliage and offers far greater carrying capacity.

Western MA microcosm of U.S. telecom infrastructure crisis

We Need Fiber in Western Mass — and In Our Politicians, Too. — Medium: What’s infuriating is how our telecommunications regulatory system failed us. It has been many years since the government realized that speedy internet connectivity is a vital necessity, like electricity or phone service. Indeed, in the early part of the century President George W. Bush promised that affordable high speed Internet would be available to all Americans — by 2007. President Obama made similar promises. There was considerable precedent.

Levy's right. As I discuss in my 2015 eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, it's been known for many years the United States needed to modernize its telecom infrastructure by replacing the metal cable of the legacy telephone and cable companies with fiber optic infrastructure to deliver digital today's Internet protocol-based services. But no transition plan was put in place and executed. So here we are today with woefully inadequate infrastructure. What's happening in western Massachusetts is a microcosm of how the broader national crisis is playing out.

To get telephone services in rural areas, the FCC established a Universal Service Fund. Something similar was proposed for last-mile internet. But it has yet to appear. In Massachusetts, federal stimulus funds went to “middle-mile” efforts — not actually providing service to homes. Schools and libraries in Western Mass had internet, but not actual people.

Segmenting telecom infrastructure into "middle mile" and "last mile" is part and parcel of the incremental thinking that has led to the current crisis. As Levy points out, middle mile gets built but the last mile is frequently neglected. Instead, we need to think of telecom infrastructure more holistically as a single, integrated delivery mechanism. Just as an interstate highway links to secondary roads and together form useful transportation infrastructure, the middle mile is useless unless it can connect to the last mile. Connecting as many premises as possible also observes Metcalfe's Law, wherein the value of a communications network increases with the number of users connected to it.

Definition of competition in premise telecom infrastructure depends on audience perspective

Crazy Talk from Another Telco-Funded Think Tank - Community Broadband Bits Podcast 200 | community broadband networks

What's all the crazy talk about? In a word, competition. Specifically, competition in premise telecommunications infrastructure. It's very important to distinguish the audience when discussing competition in this context.

From the point of view of the legacy telephone and cable companies that enjoy a natural monopoly or duopoly with their vertically integrated business models where they own both the infrastructure and services offered over it, any public sector infrastructure project is indeed competition because it offers a less privatized or fully deprivatized model to provide telecommunications services -- often using an open access business model versus vertically integrated.

But that's NOT competition from a consumer perspective. Given the natural monopoly/duopoly nature of telecom infrastructure, consumers will never be able to choose from among many competing sellers -- the definition of a competitive market. Due to high cost barriers to enter and operate telecom infrastructure, there will only be one or two providers.

What we are talking about here isn't competing market offerings but instead competing public policy approaches to ensuring universal, high value telecommunications service. Given widespread consumer complaints of neighborhood redlining, poor value and customer service using the current privatized model, the public option looks more and more appealing as time goes on.

Internet Innovation Alliance's oddly bearish view of Title II

Study Says: Broadband is $1 Trillion Econ Driver | Multichannel: The U.S. broadband and ICT sectors have generated over a trillion dollars in annual value to the U.S. economy, according to an economic analysis commissioned by the Internet Innovation Alliance. The study concludes that all that activity was generated thanks to an "environment of light federal regulation." And while the study authors say they don't know how the FCC's Title II reclassification of ISPs will affect economic growth and employment, they predict from former analysis and review of the literature and history that it could adversely affect broadband/ICT investment and have "significant secondary costs" for other industries.

This is where the study authors' analysis of light regulation gets awfully light itself. No explanation of how reclassification of Internet as a common carrier telecommunications utility under Title II of the Communications Act would adversely affect investment in telecom infrastructure.

In fact, one could also argue the opposite. By mandating universal service, Title II would spur investment and generate knock on effects for other industries served by expanded and upgraded telecom infrastructure to meet that requirement. According to the organization's website,"IIA seeks to promote public policies that support equal opportunity for universal broadband availability." That's certainly compatible with Title II. Finally, consider the oddity of a bearish projection like that coming from an organization called the Internet Innovation Alliance.

The bankruptcy of Obama administration's telecom policy

Continuing the Broadband Dialogue with States: This week, broadband leaders from across the country convened at the Schools, Health and Libraries Broadband Coalition’s annual conference to discuss key broadband policy issues important to communities and community anchor institutions such as schools, hospitals and libraries. NTIA had the opportunity to participate in several sessions at the conference to discuss our continued efforts to implement Obama Administration initiatives aimed at promoting broadband access, adoption and digital inclusion. We also had the chance to meet with about two dozen officials from 15 states who work on broadband initiatives. The meeting was part of our efforts to keep an ongoing dialogue with state broadband leaders to sustain their peer network as a valuable vehicle for knowledge sharing. Many of these state officials helped run programs that received funding through NTIA’s State Broadband Initiative (SBI). The SBI grants provided funding to each state, territory and the District of Columbia to collect the broadband availability data that helped power the National Broadband Map. In addition, SBI grantees used some of the funding to identify and address obstacles to broadband deployment and adoption in their states or territories.
While the SBI grant program is finished, 41 of the 56 states and territories that received SBI funding are continuing their state broadband programs in some fashion using their own funds. Several states continue collecting data for their own broadband maps, including Minnesota, Wisconsin, Virginia and Utah.

More meetings, more talk and more busy work on useless "broadband maps" that taken as a whole, are not meaningfully deploying fiber to modernize America's rapidly aging, obsolete and spotty telecommunications infrastructure. This is an urgent national problem that grows increasingly so by the month and year. It's one that can't be addressed by shifting it to the states. Strong federal leadership and support are needed.

This National Telecommunications and Information Administration update illustrates the bankruptcy of the Obama administration's telecom policy. It's unfortunate given nearly eight years ago, the Obama administration came into office with the promise of rapid, aggressive action to move the nation forward. Instead, it settled for half hearted efforts that left undisturbed a major obstacle to progress -- incumbent legacy telephone and cable companies.

U.S. telecom infrastructure modernization an interstate and not urban issue

Great presentation by Susan Crawford on America's telecommunications infrastructure shortfalls and challenges. However, I am disappointed by what I view as Crawford's (and others' such as Next Century Cities) near exclusive focus on cities. Particularly given Crawford's observation that 20 percent of American homes are off the Internet and unable to purchase access at any price -- a situation that has existed for at least a decade. These homes are not in cities but in the exurbs, quasi-rural and rural areas where legacy telephone and cable companies have not modernized their infrastructures to reach them. They need fiber connections just as much if not more so than urban dwellings, especially so given the ability of fiber to bridge the greater distances between them and economic and educational opportunities and health care.

In the last analysis, the United States is a nation of states, not of cities. Telecommunications infrastructure is fundamentally interstate, connecting cities and states to each other and the nation to the world. It would be a mistake to view it too narrowly as an urban matter.

Selling vertically integrated "gigabit" service inefficient, reinforces disparate access

What it's like to take on Google Fiber in Nashville: One firm's take - Nashville Business Journal: For more than two years, Nashvillians have salivated over the eventual arrival of Google Fiber, super high-speed internet courtesy of one of the world's most idolized tech companies. But while Google has yet to share specifics on when that network will officially launch in Music City, other players have made their own moves. Most notably, legacy telecoms AT&T and Comcast have launched their own networks, but smaller players like Shelbyville-based Athena Broadband are also getting in on the gigabit game.

This is a disturbing pattern that reinforces America's crazy quilt, disparate access to advanced telecommunications service. Given the high cost of constructing telecommunications infrastructure, it would be far more efficient to have a single entity build it and allow various Internet service providers to offer services over it. Instead, the U.S. continues to emulate the failed monopolistic vertically integrated business model of the legacy telephone and cable companies with its neighborhood cherry picking and redlining that have led to the nation's widespread access disparities.

Consquences of flawed U.S. telecommuncations infrastructure modernization policy manifest in Minnesota

Complicated Minn. rules help create broadband haves and have-nots - StarTribune.com: The underground fiber wires that deliver high-speed broadband access have been laid in fits and starts throughout Minnesota, creating a hierarchy of haves and have-nots around a technology that’s increasingly essential to doing business in the modern economy. Thanks to complicated eligibility rules and overlapping private interests, download speeds available in one community or part of a county are often not yet available in directly adjacent areas — or only at absurdly high prices.

Many have compared America's checkerboard, crazy quilt modernization of its telecommunications infrastructure to the deployment of electrical power distribution infrastructure early in the 20th century. But it's not directly comparable because in Minnesota as throughout the nation, it's highly granular with major access disparities between areas in close geographical proximity. By contrast, electrical distribution infrastructure initially served urban areas, leaving entire rural regions -- and not just parts of neighborhoods and streets and roads -- without power. As mentioned in this story, another difference is huge variations in what people pay for modern telecommunications service from one community to another based on the services offered.

The tax dollar tap is about to start flowing more freely. If Dayton and lawmakers can agree on broadband spending this year — a big “if” given the low expectations at the Capitol for the final work product of the politically divided Legislature — then it’s likely to fall somewhere between the $40 million sought by the House GOP and the $100 million that Dayton wants. It could end up as one of the single biggest state expenditures this year.

Even so, it's nowhere near the funding needed to ensure all Minnesotans have access to modern fiber to the premise connections. The situation on the ground in Minnesota repeats in major aspects all over America. Single states simply don't have the funding to adequately address this. It's a national problem that requires serious national funding. 

But there’s not universal agreement about the best way to spend all the broadband money. At the Legislature’s direction, the Office of Broadband has put its emphasis on connecting what it has labeled “unserved” areas. That leaves home and business owners and elected officials in many areas with the official designation of “underserved” wondering how much longer they have to wait to get a piece of the action.

Policymakers have been misled by incumbent legacy telephone and cable companies to define modern telecommunications service based on throughput speed rather that what's truly important -- fiber to the premise infrastructure. Hence, policymakers have found themselves bogged down for at least the past decade playing a variation of "how many angels can dance on the head of a pin" when taking on telecommunications modernization. The incumbents love it because it creates complexity and delay that serve their goal of postponing the future.

U.S. telecom infrastructure modernization a great infrastructure investment, Mr. President

Obama articulates why Americans are so unhappy: Obama said he hopes going forward there will be a focus on additional steps that can be taken to make a difference. “Why aren't we investing in infrastructure that would put people back to work and strengthen our competitiveness over the long-term?

Indeed, Mr. President. With some 34 million Americans are unable to obtain telecommunications service capable of delivering high-quality voice, data, graphics and video according to FCC data released earlier this year, an ideal infrastructure project for the 21st century would be modernizing and building out America's telecommunications infrastructure.

Such a project would offer both direct and indirect economic benefit and would generate future tax revenues from increased economic activity powered by fast Internet services delivered over fiber connections serving all American homes, businesses and schools. I've offered just such a proposal in my recently issued eBook Service Unavailable: America's Telecommunications Infrastructure Crisis.

Key U.S. telecom issue is market failure, not market competition

Verizon FiOS finally coming to Boston as mayor announces $300M fiber network - The Boston Globe: “Today, 90 percent of Boston residents have only one option for broadband,” said Jascha Franklin-Hodge, Boston chief information officer. “The free market only works for consumers when companies compete for their business. And when this project is complete, the majority of Boston residents will have real choice for the very first time.”

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In a report on high-speed Internet access last year, the Federal Communications Commission said 45 percent of American households have only one provider for such access.“We have seen first-hand that competition does in fact encourage other providers to build-out or upgrade broadband services,” the commission wrote. A good example of that dynamic is Google Fiber, the Internet giant’s push to install high-speed Internet in select US cities, said Deb Socia, executive director of Next Century Cities, an Internet advocacy group.

This is a parochial misconceptualization of America's telecommunications infrastructure crisis. It's not about competition or the lack thereof in a "free market." Telecommunications infrastructure has never been and will never be a competitive market offering in a market with many sellers and buyers. There cannot be many sellers because the microeconomics simply don't support it. In telecom infrastructure, the "free market" isn't so free -- it's highly constrained by large CAPEX and OPEX costs. The desire for competition is driven by the tendency of many to view "broadband" as other consumer services where consumers are accustomed to having the ability to choose among many vendors. That thinking is flawed insofar as it neglects the underlying infrastructure necessary to deliver it.

The real issue for the United States isn't market competition. It's market failure and the disparate infrastructure access that leaves 34 million Americans unable to obtain telecommunications service capable of delivering high-quality voice, data, graphics and video, according to figures released by the U.S. Federal Communications Commission earlier this year.

Fat lady singing on AT&T residential landline service; big telco going out with a whimper

New AT&T Plans Guarantee Pricing for 2 Years; Customers Can Save More Than 40% on on TV, Home Internet and Voice | AT&T: Choose DIRECTV You’ll get our DIRECTV SELECT™ All Included package for $50 a month, guaranteed for two years when you add it to an eligible new or existing AT&T service, like wireless or home Internet. The monthly equipment fees for up to four TV receivers are now built into the cost and guaranteed for two years. Taxes are still separate, since those vary based on where you live.

Add in High-Speed Internet and Voice

When you have DIRECTV you can add home Internet service with speeds up to 6 megabits per second for an additional $30 a month. And you’ll get a Wi-Fi gateway included at no extra charge. All guaranteed for two years. Also, when you pay for both services on a single bill you’ll automatically receive unlimited home Internet data – a value worth $30 a month.

The above excerpt from an AT&T news release issued April 11, 2016 shows AT&T retreating from its VDSL-based U-Verse product that offered Internet throughput that could marginally -- with ample data compression -- support video offerings. It's now offloading its video TV programming to DBS via its recent acquisition of DirecTV and dialing back Internet to first generation ADSL with "up to" speed of 6 Mbs (A fine print footnote tamps that down further, noting "Actual speeds are not guaranteed.")

The fat lady is singing. This latest product bundle marks AT&T's final landline offering in the residential premise market. The big telco is going out with a whimper. Legacy class DSL service isn't going to be able to support growing consumer preference for OTT and on demand video delivered via Internet versus TV programming packages offered over AT&T's DirecTV holding. Nor does it even measure up what the U.S. Federal Communications Commission defines as minimum standard Internet service of 25 Mbs. Moreover, AT&T's announced plans in 2015 to deploy fixed "wireless local loop" Internet service to about 13 million residential premises in its service territory not offered landline Internet service appears to have been a head fake, with no reported deployments.