U.S. telecom infrastructure also needs a "public option"

Market forces have rendered telecommunications infrastructure in the United States a balkanized, crazy quilt patchwork. Investor-owned internet service providers naturally gravitate toward locations where there are high concentrations of households with healthy incomes that can afford their service offerings. Since those services are typically vertically integrated wherein the ISPs own the infrastructure, infrastructure is built only where it can generate robust profits over the short term. Everyplace else is left to twist in the wind, redlined off the internet because there is no infrastructure to deliver telecommunications services.

That has led to a deepening crisis as telecommunications continues its rapid shift to internet-based services as legacy telephone companies abandon their copper cable plants constructed many decades ago to support voice phone service.

A similar market dynamic exists in the payer side of health care. Like telecommunications infrastructure, it takes lots of capital to enter the market. Health plan issuers must have millions of dollars set aside to cover the cost of care of their members, particularly if costs exceed projections. They naturally will offer coverage in areas where there are plenty of premium paying members to generate those dollars. In less densely populated areas, those with fewer health care providers and lower population health status, health plan issuers have less incentive to offer a greater variety of plans.

President Barack Obama called out this circumstance in a recent article published in The Journal of the American Medicine Association (JAMA). The president noted that 12 percent of enrollees in states where the federal government operates state health benefit exchanges live in areas where they can choose from among only one or two health plan issuers. For such areas, Obama suggests policymakers revisit the concept of a government operated health plan – the so-called “public option” – that was jettisoned leading up to the enactment of the Patient Protection and Affordable Care Act in 2010. Obama’s call for taking another look at government-operated health plans serving the individual and small group markets comes as one of the law’s mechanisms designed to ensure greater access to coverage -- consumer operated and oriented (CO-OP) health plans – is faltering with most co-ops undercapitalized and deemed insolvent. 

Given that some 34 million Americans are unserved by modern, internet-based telecommunications infrastructure capable of delivering high-quality voice, data, graphics and video to their homes and small businesses  according to figures released by the U.S. Federal Communications Commission in early 2016, it’s also time for policymakers to seriously consider a public option for telecom infrastructure.

In my recent eBook, Service Unavailable: america’s Telecommunications Infrastructure Crisis, I propose the formation of a government chartered 501(c)(1) nonprofit, the National Telecommunications Infrastructure Agency, to engage in a crash program to build modern fiber to the premise telecommunications infrastructure connecting all American homes and businesses. That’s where America needs to be in the 21^st century. Market forces are not up to fully accomplishing the job or as rapidly as needed.

Obama administration plays up mobile wireless, ignores 34 million Americans lacking modern landline premise telecom service

As the Obama administration winds down, it is declaring a hollow victory on telecommunications infrastructure, playing up mobile wireless technology while ignoring the plight of some 34 million Americans whose homes and small business that lack 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.

Mobile wireless is also being termed by incumbent telephone companies as a technological transition from non-IP based services that supported legacy telephone, cable TV and early mobile wireless services to Internet protocol-based services. Problem is many of those aforementioned 34 million Americans are being left out of the transition since landline infrastructure isn't being modernized and built out to serve them. And as many observers have pointed out including here, mobile wireless service alone cannot meet the needs of homes and small businesses due to technological constraints and high cost.

More of the same old same old that fails to meaningfully address nation's telecom infrastructure deficit

SHLB Publishes New Broadband Action Plan - Utah Broadband Outreach Center: The Schools, Health & Libraries Broadband Coalition (SHLB) released a Broadband Action Plan this week to kick off their Grow2Gig Campaign. The plan was developed by SHLB as a resource to generate ideas and provide policy recommendations for community leaders. Kelleigh Cole, Director of the Broadband Outreach Center, contributed to the Action plan with a chapter titled “Broadband Needs Assessment and Planning for Community Anchor Institutions.” The SHLB Coalition advocates for broadband access through the targeted use of Community Anchor Institutions (CAIs).

CAIs include schools, libraries, healthcare providers, community centers, public housing, public education institutions, and other easy to access community meeting places that can serve as a centralized location for high-speed Internet use. CAIs can help provide affordable broadband access to a community, and they also act as anchor tenant by establishing critical middle mile connections to residential areas. Broadband Director Kelleigh Cole was asked to be a contributor to the Broadband Action Plan due to her years of experience as a state broadband leader, in addition to her perspective on Utah’s collaborative and highly successful approach to broadband planning. Her chapter kicks off the Action Plan, and discusses the advantages to creating broadband needs assessments that drive targeted infrastructure investment where it is most needed.

This is a desultory, pathetic rehash of the same tired old, parochial approaches of the past decade that create an illusion of action and focus on the low hanging fruit of anchor institutions and running silly "broadband needs assessments." (Who doesn't need robust Internet service in 2016?)

They fail to meaningfully support the badly needed modernization of the nation's legacy telecommunications infrastructure and the construction of fiber optic telecommunications infrastructure to serve all American homes and businesses. Moreover, once the anchor institutions are connected, the nearby residences are typically forgotten and victory declared.

Lacking specific sum, does Hillary Clinton's infrastructure modernization plan dedicate enough for telecom?

Connect allAmericans to the digital economy with 21st century Internet access.
Clinton believes that high-speed Internet access is not a luxury; it is a necessity for equal opportunity and social mobility in a 21st century economy. That’s why she will finish the job of connecting America’s households to the Internet, committing that by 2020, 100 percent of households in America will have access to affordable broadband that delivers world-class speeds sufficient to meet families’ needs.

Hillary Clinton's Infrastructure Plan: Building Tomorrow's Economy Today

Per the above item from her campaign website, presumptive Democratic presidential nominee Hillary Clinton is proposing universal Internet access that's currently required under the U.S. Federal Communications Commission's 2015 Open Internet rulemaking classifying Internet as a common carrier telecommunications (versus information) service.

What's new is Clinton's proposed federal funding programs to help finance the necessary infrastructure to make universal service a reality that would dedicate $275 billion over five years for infrastructure investment. A national infrastructure bank seeded with $25 billion would leverage private capital to generate an additional $225 billion in direct loans, loan guarantees, and other forms of credit enhancement along the lines of what Susan Crawford suggested earlier this year, renewing and expanding the Obama administration's Build America Bonds program. Crawford correctly asserts that there are boatloads of private capital sitting on the sidelines seeking better returns that could be leveraged to undertake the long delayed task of modernizing America's telecommunications infrastructure with fiber to the premise for the Internet age.

The caveat here is Clinton's funding proposals cover all infrastructure modernization needs, including transportation, energy and water systems, constituting an "infrastructure gap" that her campaign notes runs in the trillions of dollars. No specific sum is earmarked for telecom infrastructure. Without that specific dollar amount, the question is will there be enough for it?

Also concerning is Clinton defines telecom infrastructure not in terms of the infrastructure itself, but rather in vague terms of "world class" connection speeds. Connection speed is how the legacy telephone and cable companies define their Internet-based telecom services. It's a backward rather than forward-looking perspective and is central maintaining a paradigm of constrained "broadband" bandwidth that in turn supports high prices and minimal investment in modern infrastructure such as fiber to the premise (FTTP).

Kovacs is right: FCC reclassification of Internet as telecommunications service creates uncertainty. And it's about time.

Kovacs: D.C. Circuit's net neutrality ruling poses danger to edge providers - FierceTelecom: The D.C. Circuit's affirmation of the FCC's Open Internet Order creates enormous uncertainty for companies in all parts of the internet, not just for access providers. It invites edge providers to contort their services to attempt to evade classification under Title II. Thus, it threatens innovation and investment throughout the internet ecosystem.

So writes Anna-Maria Kovacs, a financial analyst and consultant affiliated with the Georgetown Center for Business and Public Policy. Kovacs has a valid point. Classifying Internet as a telecommunications service under Title II of the Communications Act is a major shift in regulatory policy. But the real uncertainty was sown by the FCC in 2002 when as then-FCC Commissioner Michael Copps recently noted, the FCC chose to classify Internet service as an information rather than telecommunication service.

How so? At that point in time, the Internet was well along the way toward becoming a de facto telecommunications service and on a global scale. Yet the 2002 FCC turned rolled the calendar of progress back a decade and kept it there for 13 years until the FCC reclassified in 2015. That created a enormous collision between the natural progression of telecommunications and federal regulatory policy.

Of course that's going to foster uncertainty for legacy telephone and cable providers and disrupt their business models based on the 1990s strategy of selling "broadband" as a premium add on to legacy voice telephone and cable service. That strategy can still be seen in 2016 as they and other ISPs continue to market "broadband" rather than telecommunications service with price tiers tied to bandwidth.

Google Says It's Very 'Serious' About Gigabit Wireless | DSLReports, ISP Information

Google Says It's Very 'Serious' About Gigabit Wireless | DSLReports, ISP Information: Alphabet CEO Eric Schmidt told shareholders during the company's annual meeting on Wednesday that Google Fiber is extremely "serious" about using fiber as an additional avenue to deliver additional broadband competition to stagnant markets. "To give you an idea of how serious this is," Schmidt stated the executive had a "lengthy" meeting on Tuesday with Alphabet CEO Larry Page and Chief Financial Officer Ruth Porat to discuss the company's wireless ambitions.Those ambitions include testing the viability of millimeter wave technologies and 3.5 GHz wireless broadband as part of an ongoing trial in Kansas City. "There appears to be a wireless solutions that are point to point that are inexpensive now because of the improvements in semiconductors," Schmidt said. "These point to point solutions are now cheaper than digging up your garden and so forth."

Fixed premise wireless IP certainly costs a lot less to deliver telecom services to homes and small businesses. But it's no magic bullet and there's a cost tradeoff involved. The physics of radio frequency spectrum impose a natural limit on throughput as more premises share the available spectrum. That means Google Fiber will have to push its fiber relatively close to premises to feed lots of microcells in order to offer quality service that won't degrade like that of a busy coffeehouse or hotel when lots of guests are on the establishment's WiFi service. The constraints are explained by Google's Milo Medin in comments he made at the 2013 Broadband Communities Summit, excerpted in a post on this blog (See No. 2). Higher radio frequencies like the referenced millimeter wave technology can carry more data. But the tradeoff there is they are easily obscured by buildings, flora and terrain, severely limiting its viability as a premise IP delivery technology.

It will be interesting to see how Google Fiber negotiates the tradeoffs if it continues to pursue this.

Report: Wireless Still Not a Serious Fixed-line Competitor

Granted 5G wireless could ultimately let AT&T and Verizon compete more directly with cable broadband, but with the standard still not finalized, serious deployment won't be likely until 2020 or later. And given AT&T and Verizon's tendency toward premium pricing and usage restrictions on wireless, it's not all that likely that these services will be seen as a real alternative to cable either (especially as gigabit speeds are deployed via DOCSIS 3.1).The reality is that even should 5G technology be a great alternative to fixed service, the cable and wireless industries will likely work to avoid competing seriously on price, much as we've seen throughout the DSL/cable duopoly era.

Via https://www.dslreports.com/shownews/Report-Wireless-Still-Not-a-Serious-Fixedline-Competitor-137115?utm_source=dlvr.it&utm_medium=twitter

The limited carrying capacity of radio spectrum would require telcos to push fiber far more deeply into their networks to backhaul small cell sites in order to use 5G wireless as a premises service delivery technology. In that regard, it faces the same ROI constraints that limit legacy telco build out of fiber to the premise architecture and is thus highly unlikely.

Alphabet's Eric Schmidt nails it: Incremental thinking holding back progress

Speaking at Bloomberg’s Breakaway conference Wednesday in New York, Schmidt also said Alphabet, the holding company that owns Google and other businesses including Nest and Fiber, will probably never break up and its job is to seek out transformative solutions. “There’s tremendous optimism around this next generation of scientists and thinkers,” Schmidt said. “There are problems that bedeviled us for centuries that can in fact be solved.” The government should play a role in accelerating these developments as they’ve done in the past, he said, pointing to initial public investment in Silicon Valley that allowed it to become the high-growth area it is today. Schmidt, who supports Democratic presidential candidate Hillary Clinton, said the politicians and business leaders in the country have gotten used to accepting incremental solutions rather than taking bigger risks for the larger reward of innovative technologies and methods.“Government spends an enormous amount of money on the wrong things,” he said. “I would just like to have a little bit of it on these things which are moonshots, enormous-scale things that can benefit the country.”

Source: Google’s Schmidt Sees Genetics Advances, No Alphabet Breakup

When it comes to modernizing America's legacy metallic telecommunications infrastructure designed for a bygone time of voice telephone calls and cable television, Schmidt nails it when he points to incrementalism as a major impediment. 

As I wrote in my recent eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis, over the past two decades the nation has concentrated on achieving incremental increases in "broadband speeds" on legacy infrastructure rather than modernizing and replacing it with fiber optic connections for every home, business and institution capable of supporting the Internet-protocol based information, communications and services of today and tomorrow. In my eBook, I propose a crash federal initiative to build it given how far behind the nation has fallen. Google Fiber can't do it alone.

America doesn’t have a “rural broadband” problem. It suffers from incomplete telecom infrastructure.

America’s telecommunications infrastructure deficiencies are often framed as a “rural broadband” issue and frequently compared to the lack of electric service in rural areas of the nation early in the 20^th century. Both the description of the problem and the analogy are wrong.

They’re incorrect for a couple of reasons. First, landline Internet service more advanced than 1990s dialup can often be found in nominally “rural” areas. But typically some premises have access while others a mile or two down the road, or over the hill or around the bend do not. Even premises Internet service providers believe are connected are not, resulting in unpleasant surprises for new residents moving in under the impression service was available. That does not make for a “rural broadband” problem. The problem is partial, incomplete and highly granular landline telecom infrastructure.

By comparison, the lack of electrical distribution infrastructure in rural counties during the first few decades of the previous century was truly a rural problem. It wasn’t granular, with some communities and neighborhoods having power and others left in the dark. Entire rural regions had no electrical service, which was concentrated in cities.

The “rural broadband” label has an unfortunate aspect. It allows legacy incumbent providers and public policymakers to segment off and mischaracterize the problem as one affecting only thinly populated, remote regions of the nation and thus not requiring urgent action.

It does. The United States is a generation behind where it should be when it comes to modernizing its legacy metal cable telephone and cable TV infrastructures with fiber optic cable connecting every American home, business and public institution. If we continue to shrug our shoulders and insist on believing it’s a “rural broadband” problem, the United States risks slipping into third world nation status when it comes to its telecom infrastructure.

Virginia officials seek info about residents’ Internet service | WRIC

Virginia officials seek info about residents’ Internet service | WRIC: RICHMOND, Va. (AP) – Virginia officials want residents to help them pinpoint what areas in the state lack access to broadband Internet service. The new initiative announced Tuesday by Gov. Terry McAuliffe is aimed at helping officials fill gaps in broadband coverage across the state. McAuliffe is asking residents to sign onto a new website RUonline.virginia.gov to let officials know the level of internet connectivity they have.

Policymakers have been doing this all over the United States for at least a decade. This strategy plays well for politicians since it makes them appear concerned about modern telecom infrastructure access disparities and is politically safe because it doesn't offend legacy incumbent providers. Sadly, it doesn't build a bit of needed infrastructure as the access disparities grow more urgent as time goes on.

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.

         *  *  *

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.