Incumbent legacy telcos, cablecos don't fear "net neutrality." Title II monopoly regulation is the real concern.

Net Neutrality and Broadband Investment for All - Morning Consult: A wise Federal Communications Commission chairman noted that “the best decision government ever made with respect to the internet was … NOT to impose regulation on it.” Who said that? Republican Chairman Ajit Pai? Republican Chairman Kevin Martin? No, it was Bill Kennard, the Democratic chairman appointed by President Bill Clinton. Kennard’s smart, future-focused, pro-innovation and pro-consumer philosophy — followed by chairmen of both parties for two decades — established an investment-friendly regulatory climate that resulted in more than $1.5 trillion in broadband network investment, and with it, America’s world-changing internet technologies, applications and services. Kennard’s words remain as true today as they did in 1999. Pai’s plan to unwind the 2015 Open Internet Order, which regulated broadband service like an early 20th century telephone monopoly, is the right start.

The thing is telecommunications infrastructure is a natural monopoly regardless of whether it's plain old telephone service (POTS) over copper or based on Internet communications protocol delivered over fiber to the premise (FTTP). It's simple microeconomics. Infrastructure a labor intensive, high cost proposition and as such will never attract many sellers due to the high cost barriers to entry. While some degree of redundancy is beneficial to ensure network reliability, it would make no sense and be uneconomic to have many providers installing multiple infrastructures to serve communities and customer premises.

The above item by the president and CEO of the telecom industry trade group USTelecom shows the industry isn't as concerned about so-called "net neutrality" rules requiring all Internet protocol traffic be afforded equal carriage. Rather, the real fear is monopoly regulation.

Microsoft dusts off TV white spaces wireless tech with "Rural Airband Initiative"

Microsoft proposing $10B program to bring broadband internet to rural America | The Seattle Times: Microsoft is set to propose a $10 billion program to bring broadband internet to the rural U.S., an economic-development program aimed at a core constituency of the Trump administration. The plan, which calls for corporate and government cash, relies on nascent television “white-space” technology, which sends internet data over unused broadcast frequencies set aside for television channels.In an event scheduled for Tuesday in Washington, D.C., Microsoft is to propose using the technology it helped develop as a cornerstone of an effort to connect the 23.4 million Americans in rural areas who lack high-speed internet access.

Ten years ago, Microsoft along with Dell, EarthLink, Google, HP, Intel, and Philips Electronics formed the White Spaces Coalition and submitted a prototype wireless Internet protocol-based telecom device to be tested by the U.S. Federal Communications Commission. The White Spaces Coalition hoped have the device approved for use when analog TV broadcasts ceased in February 2009 in favor of digital transmission, using unused portions of the television broadcast spectrum, 2MHz to 698MHz. The technology never came into widespread use in the decade that followed. According to this story in the Seattle Times, Microsoft’s Rural Airband Initiative seeks to deploy the technology with telecommunications industry partners in a dozen states by 2018.
 
TV white spaces technology isn't being held out as a panacea for the many neighborhoods redlined by incumbent landline telephone and cable companies that are found immediately adjacent to neighborhoods that are served by them. It's specifically targeted to areas with between two and 200 people per square mile, according to a Microsoft blog post. Fixed terrestrial wireless and "limited" fiber to the premise should be deployed in communities with a density greater than 200 people per square mile, according to the post, and satellite should be used to provide service in very sparsely populated areas with a population density of less than two people per square mile. Currently, however, satellite is found in much more populated areas that lack landline infrastructure and provides a far inferior level of service than can be provided by landline infrastructure.

Microsoft's TV white spaces plan faces a number of obstacles mentioned in this New York Times story. They include the high cost of the devices to deliver it, longstanding opposition from the TV broadcast industry concerned about possible interference and limited bandwidth inherent in any advanced telecom technology based on spectrum. There's a larger downside as well: looking to technologies that have limited and unproven track records for delivering advanced, Internet protocol-based telecommunications. It's happened before with Broadband Over Power Lines (BPL), which was first touted in the mid-2000s (around the same time as TV white spaces), G-Fast (souped up DSL) and more recently, AT&T's experimental AirGig technology. None have proven to be lower cost replacements offering the same bandwidth capacity and reliability that fiber to the premise (FTTP) technology provides.

Coming on the heels of a Deloitte white paper declaring building out fiber a U.S. national infrastructure imperative, Microsoft's proposal underscores the poor public policy and planning that brought the nation to where it is today with widespread telecommunications infrastructure deficiencies and disparities. TV white spaces might have made sense as a planned transitional technology on the road to universal FTTP. That it's being hauled back out 10 years after it debuted reflects a desperate, on the cheap strategy borne out of the landline infrastructure deficiencies and disparities rather than a transitional strategy.

Telecom infrastructure deficiencies direct consequence of leaving it in hands of vertically integrated private sector providers

Addressing the Digital Divide in California: It's a problem for foothills residents, as well as other rural communities throughout the state, due to the landscape and the distance between households. Smaller populations mean fewer cell towers and internet providers, Fletcher said, and it's a problem that needs to be addressed. "One of the biggest things has to do with safety. Between the sheriff's office, the fire department, or just for education, without the infrastructure, you are limited in what you can do in the foothills, and that's a big piece of the puzzle," Fletcher said.

Telecom infrastructure deficiencies are a direct consequence of current U.S. policy that keeps vital telecom infrastructure in the hands of vertically integrated investor owned corporations. Their business model based on selling "broadband" services fails when population density falls below an arbitrary number of occupied premises per mile, creating widespread service gaps. This cause has been well known for decades but very little has been done to address it -- and the complaints go on. And on.

50 million US homes have only one 25Mbps Internet provider or none at all | Ars Technica

50 million US homes have only one 25Mbps Internet provider or none at all | Ars Technica: More than 10.6 million US households have no access to wired Internet service with download speeds of at least 25Mbps, and an additional 46.1 million households live in areas with just one provider offering those speeds, a new analysis has found. That adds up to more than 56 million households lacking any high-speed broadband choice over wired connections. Even when counting access to fixed wireless connections, there are still nearly 50 million households with one 25Mbps provider or none at all.

The data comes from a report by researchers who evaluated Federal Communications Commission data in order to shed more light on broadband deployment, or lack thereof. The FCC's own reports on this data show the percentage of developed census blocks that have ISPs offering broadband at various speeds. The researchers attempted to improve upon that analysis by comparing the census block information to household data from the US Census Bureau's 2015 American Community Survey in order to determine how many homes have or don't have high-speed broadband access.

This analysis continues the misguided view that telecommunications infrastructure is a competitive market and therefore something is wrong if premises don't have multiple landline services from which they can obtain Internet protocol-based services. It is not a competitive market. Due to high cost barriers to entry that discourage competition, it functions as a natural monopoly like other utilities such as electric power, water and natural gas. It's not economic to have multiple power, water and gas lines serving a given customer premise. Driving this view is the notion that IP-based telecommunications is a "broadband" service and not infrastructure.

The analysis also incorporates a speed-based definition of service. The definition derives from a dearth of fiber to the premise (FTTP) infrastructure in the United States. Internet service providers rely on metallic cable landline plant and radio spectrum that offer considerably less bandwidth capacity than FTTP. Hence, bandwidth is constrained and throughput speed rather than infrastructure tends to define what constitutes good service. FTTP infrastructure rather than throughput speed is a far better metric and avoids the constant need to redefine a speed-based standard as bandwidth demand continues its inexorable growth.

Continued reliance on legacy telephone and cable company "broadband speeds" to define American telecom infrastructure modernization policy will result in continued frustratingly slow, incremental and inadequate progress

Trump's Rural Internet Could Cost $80 Bil | The Daily Caller: One problem is how much the federal government should subsidize the initiative. Trump’s administration hasn’t released an exact amount for how much building internet infrastructure in rural areas will cost, but according to an Obama-era study released in January, providing coverage to 98 percent of rural America will cost about $80 billion. If the government invests $40 billion, it could still reach around 94 percent of the uncovered areas.

The referenced Obama administration study was round filed by the Trump administration on Feb. 3, 2017.

The administration has several initiatives to work on rural broadband. The Federal Communications Commission started the Rural Broadband Auctions Task Force several months ago, which will offer “$2 billion to [internet provider] bidders to connect unserved and underserved locations over the next decade.” 

That amount is woefully inadequate as the now redacted FCC study suggests and explains why incumbent telephone companies are using this funding solely for limited buildouts of legacy 1990s DSL over copper and in the case of AT&T, adding special antenna equipment to its 4G LTE mobile service infrastructure to serve customer premises. That service will share radio spectrum bandwidth with mobile users and likely only approximate 1990s DSL service during peak evening hours, particularly as customers stream high bandwidth video. 

Lawmakers from rural states, however, are pushing for complete internet coverage. The FCC “must accurately target every area that is in need of support so that no one is left behind,” Republican Mississippi Sen. Roger Wicker and West Virginia Democrat Sen. Joe Manchin wrote in a letter to FCC chairman Ajit Pai in April.

Certainly well intended. But the devil is in the details. American public policy on telecom infrastructure modernization has gotten hopelessly bogged down over the use of "broadband speed" to define who is served with advanced modern telecom infrastructure and who isn't. That paradigm derives from the 1990s when throughput speed defined what differentiates "broadband" from early 1990s first generation narrowband dialup service that's still in use today. The type and quality of telecom infrastructure can vary widely over relatively small areas with some premises offered only dialup over decades-old copper while others just a mile or two away have cable DOCSIS service or fiber to the premise (FTTP). That's why this challenge cannot be accurately framed as a "rural" issue since these very disparities exist in nominally rural areas.

Continued reliance on "broadband speeds" provided by incumbent legacy telephone and cable companies to define American policy goals on telecom infrastructure modernization will result in the same frustratingly slow, incremental and inadequate progress of the past two decades. Going forward, the federal government should form and initially appropriate $200 billion to a 501(c)(1) nonprofit to build and own open access FTTP infrastructure serving every American doorstep where FTTP is not currently in place. FTTP infrastructure will provide the most bang for the buck measured in overall economic benefit and generate tax revenues to pay for it. Unlike the technologies being funded under the FCC's Connect America Fund (CAF), FTTP is far less prone to technological obsolescence. Publicly owned open access FTTP also fits well with the evolving business strategies of the legacy telecos and cablecos that are shifting to concentrate on mobile wireless and video entertainment content. It will also free telcos of the burden of maintaining obsolete copper cable networks designed for a bygone era of analog voice telephone service.

Telecom infrastructure as a public asset

Broadband Planning and How Government Creates Markets - Community Broadband Bits Podcast 260 | community broadband networks

Author and guest Alex Marshall urges a much needed reframing of advanced telecommunications infrastructure as public asset. Marshall correctly observes that when the public is not in charge, there are going to be problems with it. The United States has them spades with its continued reliance on vertically integrated, investor owned providers using subscription-based business models that lead to widespread infrastructure disparities and deficiencies. It is a short term, opportunistic business model that begets cherry picking of lower cost areas and redlining of higher cost ones.

Marshall analogizes telecom infrastructure to roads and highways that offer widespread benefit and not just to those who own and operate motor vehicles. I share Marshall's view. In my 2015 eBook Service Unavailable: America’s Telecommunications Infrastructure Crisis, I propose the formation of a federal 501(c)(1) nonprofit corporation to build and own fiber optic telecom infrastructure to reach every home, business and institution. And do so as a crash program given the nation is arguably a generation behind where it should be today.

"Broadband mapping" -- a favorite diversionary and delaying tactic of incumbents

Defining and Mapping Broadband Will Ensure Scarce Resources Are Used Effectively to Establish Universal Service, ITIF Testifies Before U.S. House Energy and Commerce Subcommittee | ITIF: To understand the current landscape of broadband offerings, the government must continue to define and map broadband service. Definitions of broadband in law or regulation should be grounded in what is actually offered, not a prospective or aspirational goal, and should avoid getting too far ahead of trends, or risk unduly shaping the services offered. The FCC generally takes the right approach in defining broadband, with some notable exceptions, said Brake. He pointed to the recent decision, as a component of the Federal Communications Commission’s (FCC) 2015 Broadband Progress Report, to adjust their definition of “advanced telecommunications capability” upwards from 4 to 25 Mbps download as an unfortunate change in the “definition” of broadband. This decision was rightly controversial, as the 25 Mbps threshold seemed carefully chosen to paint a particular picture of industry, defining away competition, and unhelpfully focused on the lack of overbuilds in areas that are uneconomical to serve. We should continue to map broadband access, said Brake, and the FCC is generally on the right track with its data collection.

So-called "broadband mapping" is a favorite diversionary tactic employed legacy incumbent telephone and cable companies. Instead of a truly useful plan for modernizing the nation's metallic telecommunications infrastructure with fiber connections serving every American household, business and institution, the "broadband mapping" tactic keeps the focus on the minutia of "broadband speeds" and what "broadband speeds" are offered in a given neighborhood. The gambit also serves the needs of incumbents by creating delay as various stakeholders debate the accuracy of the maps rather than building urgently needed fiber to the premise (FTTP) telecommunications infrastructure.

Framing the issue in terms of "broadband speeds" instead of FTTP infrastructure enables incumbents and their antiquated metallic infrastructures built for telephone and cable TV service decades ago since these infrastructures must naturally constrain Internet protocol (IP) throughput given their limited carrying capacity. Public policy shouldn't enable the delaying of technological progress. Instead of managing "broadband service offerings" over the incumbents' vertically integrated infrastructures, the policy the United States needs now and for the future is to fund a crash federal initiative to bring open access FTTP networks to every American doorstep. The nation is already a generation late in building it. Policymakers should reject further delaying tactics by legacy incumbents hell bent on fighting the future.

Claiming a monopolistic market is a competitive one doesn't make it so

Former Commish Michael Copps: ‘Maybe the Worst FCC I’ve Ever Seen’: In just a few short months, the Trump wrecking ball has pounded away at rules and regulations in virtually every government agency. The men and women the president has appointed to the Cabinet and to head those agencies are so far in sycophantic lockstep, engaged in dismantling years of protections in order to make real what White House strategist Steve Bannon infamously described as “the deconstruction of the administrative state.” The Federal Communications Commission is not immune. Its new chair, Republican Ajit Pai, embraces the Trump doctrine of regulatory devastation. “It’s basic economics,” he declared in an April 26 speech at Washington’s Newseum. “The more heavily you regulate something, the less of it you’re likely to get.”

The problem with Pai's assertion is not all markets are alike. While it may be true in a competitive market -- defined as one with many sellers and buyers -- it does not apply in a natural monopoly market like telecommunications infrastructure.

The FCC's existing Open Internet rules classifying IP-based telecommunications as a common carrier utility implicitly recognize that circumstance. They are predicted on a monopolistic and not a competitive market. Moreover, regulators aren't free to determine the microeconomics of the markets they regulate. Claiming a monopolistic market is a competitive one doesn't make it so. 

The incredibly misinformed "experts"

Lawmakers itching to advance high-speed Internet funding: Last month, the agency issued a notice of proposed rulemaking seeking comment on actions to remove regulatory barriers to infrastructure investment at all levels of government and to better enable broadband providers to build, maintain and upgrade their networks. "This is the kind of thing that is going to get more broadband into the hands of consumers," Joe Kane, a tech policy associate with the R Street Institute, told the Washington Examiner. "It's not a sexy political battle, but it's getting to the [question of] why is your computer really slow? A better example is people who don't currently have broadband. It's people in rural areas where it hasn't been profitable to build out there. Now that we have 5G on the horizon, it'll be more possible to reach those areas."

This except illustrates how misinformed even the experts are when it comes to modernizing  America’s telecommunications infrastructure. First of all, the U.S. Federal Communications Commission is focusing on the wrong issue. It isn’t regulatory barriers that inhibit investment in modern fiber telecommunications infrastructure that serves all premises. The main obstacle is the continued misguided reliance on vertically integrated, investor owned legacy telephone and cable companies to build it. Their business models are incompatible since they require a rapid return on investment. Infrastructure investment by comparison requires billions in patient capital they simply don’t have or cannot raise.

Second, 5G mobile wireless service doesn’t even exist yet. When it does, the same economic constraints that prevent the telcos and cablecos from connecting customer premises with fiber will be at work because all those 5G cell sites will require a lot of fiber to be built to serve them. Doug Dawson explains at his POTS and PANS blog.

Not just a rural issue: gaps in telecom infrastructure widespread in metro areas

Despite billions of public dollars, some rural residents slog through slow internet | Madison Wisconsin Business News | host.madison.com: Donovan Wright lives in a small subdivision in the town of Pleasant Springs near Stoughton, just 12 miles from the center of Wisconsin’s second-biggest city, but he is among more than an estimated 232,000 state residents who cannot tap a wired network to get online at any speed. It means his children access the web using unreliable and sluggish cellular service to do their homework. He can’t file his tax returns online. And streaming Netflix? Not a chance.

Michael Bridgeman, of the town of Roxbury in northwest Dane County, goes to a local library or the UW-Madison campus, a half-hour’s drive away, to do just about anything more internet-intensive than checking email. His slow connection hampers the occasional consulting work he does. Jane Leverance of the town of Oregon wants to enjoy some of the conveniences other people with internet access have enjoyed for years, including paying bills online. But even with a cellular-powered Wi-Fi hot spot to get online, the connection and speed are unreliable.

When it comes to advanced telecommunications infrastructure, what constitutes "rural" America isn't locales in sparsely populated agricultural industry counties deep in the nation's heartland. In this context, "rural" means where there are gaps in landline infrastructure, leaving premises within a mile or two of existing infrastructure with no or minimal service options or forced to get by on mobile wireless service.

As a map of service availability in the Madison, Wisconsin metro accompanying this article illustrates, those gaps appear in metro areas, forming a crazy quilt pattern of areas with service meeting minimum U.S. Federal Communications Commission standards and those without. The pattern repeats all over the United States, making the issue a national rather than local one.

The adverse socioeconomic impact of deficient telecom infrastructure

Rural America Is the New ‘Inner City’ - WSJ: Just two decades ago, the onset of new technologies, in particular the internet, promised to boost the fortunes of rural areas by allowing more people to work from anywhere and freeing companies to expand and invest outside metropolitan areas. Those gains never materialized.

The primary cause: poor public policy and planning a generation ago neglected to build universal digital telecommunications infrastructure to succeed universal voice telephone service. 

Deficient telecom infrastructure isn’t limited to deep rural areas. It also plagues outer suburban, exurban and quasi-rural areas redlined by legacy incumbent telephone and cable companies. Consequently, the adverse socioeconomic outcomes described in this article could also befall those areas.

Silicon Valley needs heartland help in net neutrality fight - Axios

Silicon Valley needs heartland help in net neutrality fight - Axios: The Bay Area has long been a bastion of support for strong net neutrality rules. Now supporters are looking somewhere else for backup: Trump country. Why it matters: With net neutrality rules under assault, proponents know they need to get the attention of policymakers with roots in the heartland to show support isn't isolated to the Silicon Valley bubble.

This is the crux of the problem defining the U.S. Federal Communications Commission 2015 Open Internet regulations as "net neutrality." It really doesn't mean much to the average telecommunications consumer. Moreover, in the heartland the real benefit of the regulations classifying Internet as a common carrier telecommunications utility service under Title II of the Communications Act is Title II's universal service and anti-redlining provisions. These are real world concerns in the heartland, where millions of Americans have been turned down for years by incumbent ISPs when they attempt to obtain landline Internet connections to their homes and small businesses.

Observations on Penn Law review of muni fiber

New Penn research assesses financial viability of municipal fiber networks •Penn Law: Using industry standard financial analysis tools on five years of official data, the study finds that 11 out of the 20 fiber networks assessed do not generate enough cash to cover their current operating costs and only two out of the 20 are on track to recover their total project costs during their 30-40 years of expected useful life. Key findings include:

• 11 of 20 projects studied are cash-flow negative, many substantially so.
• 5 of the 9 cash-flow positive projects are generating returns that are so small that it would take more than a century to recover project costs.
• 2 of the 9 cash-flow positive projects would have a recovery period of 61-65 years, beyond the expected useful life of a fiber network.
• Only 2 of the 20 projects studied earned enough to expect to cover their project costs during the useful life of the networks, one of which is an outlier that serves an industrial city with few residents.
• The analysis also models the returns for a hypothetical project, finding it would take over 100 years to recover expected project costs.

Three observations on this study:

1. The study's findings do not invalidate the concept of municipally operated telecommunications infrastructure per se. Rather, they suggest the financial model requires further assessment and adjusting and enhanced federal subsidization.
   
2. The scope of the study does not encompass the external benefits of modernized telecommunications infrastructure, particularly in areas where investor-owned private network investment would also be NPV (Net Present Value) negative, miring these areas with substandard infrastructures and associated adverse economic implications.
3. The executive summary states that "[a]lthough some claim that investing in fiber serves a necessary function of future-proofing a municipality’s infrastructure, evidence shows little current need for such high broadband speeds." This is the classic infrastructure planning error of estimating future infrastructure needs based on present needs and detracts greatly from the study's credibility since this point is typically made by legacy incumbent telephone and cable companies opposed to public sector telecommunications infrastructure modernization projects as an encroachment on their largely unregulated service territory monopolies.

Potential game changer: PG&E could alter California telecom landscape

An application by Pacific Gas & Electric to the California Public Utilities Commission to become a wholesale operator of fiber optic telecommunications infrastructure could be game changer in California where many customer premises nominally in the service territory of AT&T lack landline Internet connections or are limited to slow first generation DSL service over deteriorating copper cable plant.

PG&E’s vast 70,000 square mile northern and central California electric service territory overlaps regions of the Golden State where telecom infrastructure deficiencies are most prevalent: in and around the Central Valley municipalities of Modesto and Fresno, in the Sierra Nevada foothills east and northeast of the state capital of Sacramento in Placer and El Dorado counties and up the Interstate 5 corridor in Sutter, Butte and Yuba counties to the Shasta County seat of Redding in far northern part of the state. In addition to AT&T, PG&E’s electric service territory encompasses the telecom service territories of Frontier, Consolidated Communications and Citizens Telecommunications Company of California. All of these telcos could be customers of PG&E’s planned wholesale fiber as well as mobile wireless operators seeking backhaul bandwidth.

If approved by regulators, PG&E’s application could also attract new players who would like to provide fiber-based premise telecommunications service in areas lacking robust landline connections but can’t make the numbers work due to the high cost of building new fiber infrastructure. Having PG&E build it and lease it to them as competitive local exchange carriers (CLECs) would solve that problem. PG&E would also be spared considerable deployment expense and delay since it owns utility poles that would provide the backbone for aerial fiber plant, the optimal infrastructure architecture to serve such a large and geographically diverse area, much of it with rugged terrain.

PG&E’s move holds the potential promise of universal service for northern and central California, which for many years has been a crazy quilt checkerboard of served, underserved and unserved areas, leaving many consumers to struggle with substandard, poor value dialup, legacy DSL, fixed and mobile wireless and satellite service.

For more background on PG&E’s application, Steve Blum’s Blog has more details here and here.

House Dems Propose $40B Broadband Investment | Multichannel

House Dems Propose $40B Broadband Investment | Multichannel: According to a breakout of the bill, the broadband investment is spread out over five years and will use a reverse auction to subsidize broadband in "unserved" areas (75% of the funds, or $30 billion), with the remaining 25% (that would be $10 billion) going to states via a separate reverse auction. But if there are no unserved areas in a state, that state could use the funds to serve underserved areas--or as ISPs see it, overbuild existing service--or for connecting libraries and schools or to deploy next gen 911.

The $30 billion would have to go to private entities, but the $10 billion could go to muni broadband buildouts.The broadband will have to be high-speed--at least 100 Mbps downstream, and 3 Mbps up, with a carveout for remote areas, where 25 Mbps/3 mbps would qualify. Given that it has money for muni broadband and for potential overbuilds, both of which the reigning Republican majority has issues with--as do ISPs--the bill's prospects are probably not very bright.

I tend to agree with this analysis. As long as it remains the policy of the United States to primarily rely on legacy private investor-owned telephone and cable companies to upgrade and build out modern fiber optic telecommunications infrastructure to homes, businesses and institutions, any funding allocated to public sector entities will encounter strong resistance from the telco/cableco lobby. Those industries want to retain their prerogative under the current de facto light touch regulatory regime to do so on their schedule and in neighborhoods of their choosing. Even if that means for the foreseeable, millions of Americans will remain unserved with fiber connections or even first generation DSL first rolled out in the 1990s.

More nonsensical "broadband mapping" BS

Senators Agree That Accurate Mapping is Essential for Broadband Expansion: The CN subsidiary, Connect Michigan, found 44 percent of working-age Michigan adults rely on Internet access to seek or apply for jobs, while 22 percent further their education by taking online classes. But, it all starts with accurate data mapping, which is so important. A fact U.S. Senators Gary Peters (D-MI), Joe Manchin (D-WV), Roger Wicker (R-MS), Brian Schatz (D-HI), Deb Fischer (R-NE), Jerry Moran (R-KS), and Amy Klobuchar (D-MN) each acknowledged this week when they introduced the Rural Access bill.

“Millions of rural Americans in Kansas and many other states depend on the promise of mobile broadband buildout efforts, and this critical expansion depends on the accuracy of current coverage data and uniformity in how it is collected,” Senator Moran told Global Affairs. “As we work to close the broadband gap, our providers must have standardized, clear data so they can plan out ways to reach communities most in need of access.” “We can’t close the digital divide if we don’t know where the problem is,” Senator Schatz said. “This bill will help us understand which communities still have bad wireless broadband coverage, so that we can move ahead and fix it.”

This is complete nonsense (or bullshit if you prefer) for two reasons:

1. It conflates premise service needed by the families, businesses, schools, agricultural producers and people who need access to seek or apply for jobs or take online classes -- cited in the news release -- with mobile wireless service. They aren't one in the same.

2. It assumes the "digital divide" can be closed by mapping areas redlined by incumbent landline ISPs. Problem is the incumbent ISPs already know where the redlined neighborhoods are since they redlined them in the first place. What's a "broadband map" going to do to change that situation? Moreover, providers other than incumbents can't plop down discrete networks to fill the swiss cheese holes represented the redlined neighborhoods because telecommunications infrastructure operates as a network over wide areas. Nor would the economics pencil out.

FCC Chair Pai shows apparent lack of knowledge on wireless Internet

Pai: Wired, Wireless Appear Very Competitive To Him | Multichannel: At an American Enterprise Institute speech recapping his first 100 days, Pai was asked about that relative competitiveness by host and AEI visiting scholar Jeffrey Eisenach, who was a member of the Trump FCC transition team. Eisenach asked whether Pai thought that wireless is now a substitute for wireline. Pai said, for him, at least, "they are very competitive offerings." The "for him" is because the chairman is always careful to separate his views from what the FCC as a whole might conclude based on the fact record before it. But he suggested that fact record could be a strong one. Pai said that as 4g LTE and 5G networks get rolled out, and the next generation of Wi-Fi is rolled out, " I think we are increasingly going to see that wireless is not this 'imperfect substitute' for wired connections. "It is going to be the dominant means, the preferable means, by which people access the Internet."

This needs to be placed in the proper context. Currently, wireless networks are primarily intended to serve mobile users as a complement to premise service -- and not a substitute since even nominally "unlimited" hotspot plans come with quite restrictive bandwidth useage limitations. In addition, most industry experts don't see even the next generation of mobile wireless, 5G, being able to replace fiber premise service when it's expected to be rolled out in 2020. Assuming Pai is quoted accurately, one might hope that an FCC chair would demonstrate a greater depth of knowledge and bring a more nuanced perspective to this topic.

Legacy incumbent providers should reassess stance on public sector telecom infrastructure

Incumbent legacy telephone and cable companies are wont to complain that public sector telecommunications infrastructure modernization projects represent unfair market competition. That’s not an accurate characterization, and here’s why. The goal of market competition is to offer better value products and services to gain market share from competitors.

Public sector telecom modernization projects don’t have an explicit objective of taking away market share from incumbent providers. Rather, their goal is to offer a more complete and robust network than incumbent, investor owned providers can build within a reasonable time frame given the short term ROI constraints of their business models that disfavor infrastructure modernization CAPex. That goal is typically in support of broader economic development objectives, not capturing market share from existing legacy providers. Thus if these providers lose market shares in public sector telecom infrastructure initiatives, it is incidental and not part of an intentional strategy. Public policy should not protect legacy providers from losing market share due to infrastructure modernization needs they cannot meet.

That said, there is potentially lucrative role for legacy providers. They have lots of experience and know how to operate and maintain telecom infrastructure. They can partner with the public sector to fulfill these functions, viewing the public sector as a customer and not a competitive threat.

More underpowered, bass ackwards state telecom infrastructure planning

Charleston Gazette-Mail | Broadband council prepares for expanded role: The council will have three different maps for showing internet access: service areas below 6 mbps, service areas between 6 to 25 mbps and service areas with speeds above 25 mbps. Twenty-five mbps is considered the minimum standard for broadband by the Federal Communication Commission. “Having these maps can help us determine where the fiber is and where it isn’t,” Hinton said.

If the United States had built roads and highways and other critical infrastructure like this -- by first mapping where the infrastructure is missing instead of planning where to build it -- much of the nation would have been driving on dirt roads well into the late 20th century.

Telecommunications infrastructure is by nature a broad reaching network. It can't just be "plopped down" in discrete locales and neighborhoods as one AT&T representative correctly explained about a decade ago. It must be built out on a widespread basis and as quickly as possible given the nation is already a generation behind where it should be when it comes to constructing it. It's too big of a job to be left to small states like West Virginia that can't begin to devote the billions of dollars needed. Only the federal government is up to the task.

"Everyplace outside a metropolitan area was experiencing the same issues.”

Georgia Tackles the Digital Divide - Broadband Communities Magazine In summer 2016, Gooch and State Rep. Don Parsons formed a joint committee that included 10 members of both legislative houses and held a series of hearings all over Georgia. The committee heard testimony from local governments, state agencies, academic researchers, chambers of commerce, health care providers, incumbent telcos, trade associations and many other interested parties. In addition, it posted an online survey to ask residents about their broadband experiences. With very little promotion, the survey received 12,000 responses. Both the formal testimony and the survey responses confirmed that rural broadband was deficient all through rural Georgia – not just in the areas served by the provider in Gooch’s district. “Everyplace outside a metropolitan area was experiencing the same issues,” Gooch says. “There was no incentive for the providers to upgrade their infrastructures. It was an eye-opening conversation – all these people were from different parts of the state and had different phone companies.”

Georgia's experience shows deficient advanced telecommunications infrastructure is a widespread problem not limited to one part of the state. Nor is it limited to one state. Georgia's experience repeats all over the United States.

Deficient telecommunications infrastructure is not a local or state specific problem. It's a national issue requiring a national solution to bring robust fiber optic telecom infrastructure to every state in the union and to the doorstep of every American home, school and business. And just as long distance telephone service was interstate in the 20th century, so is Internet protocol-based service.

The adverse impact of deficient telecommunications infrastructure

Municipal Broadband | POTs and PANs: Local governments are finding that nobody wants to buy homes without broadband if there is a nearby community with broadband. Worse, communities are seeing businesses move away or bypass them when considering new locations. Lack of broadband puts school kids at a definite disadvantage and there are still a lot of households that drive kids daily to public hotspots just to do homework. And lack of broadband takes away all the opportunities for working at home – probably the biggest area of job growth in rural America. I see small communities – even down to really small sizes like townships with 700 residents – trying to find ways to build a broadband network. I’ve read a few hundred RFPs from rural communities over the last few years, and probably not more than 5% want to become an ISP. But they will do so if they can’t find a commercial company willing to do it. Rural communities largely favor of public-private partnerships. More and more of them are willing to kick money into a building a network if an ISP will invest in their community and operate a broadband network. I believe that within a decade we are going to start seeing broadband ‘deserts’ where communities without broadband start withering – just as happened in the past to communities that didn’t get electricity, or that were bypassed by railroads or interstate highways. It’s hard to think that a community today can keep their kids at home without broadband – and this is starting to scare local governments.

I agree with the writer that the impact of not having advanced telecommunications infrastructure in the 21^st century will indeed have negative consequences just as the lack of electrical distribution and transportation infrastructure did in the 20^th. But the analogy isn’t directly comparable what’s happening on the ground. Electrical distribution and transportation infrastructure deficiencies
(and railroads in the 19th) affected large regions of the nation in early in the previous century. The lack of advanced telecommunications service on the other hand is better equated to neighborhood redlining associated with mortgage lenders and insurance companies. It’s far more granular. A household can be served by advanced landline telecommunications infrastructure while another just down the road, over the hill or around the bend is not. This post at Steve Blum's blog as well as any number of “broadband maps” paint a crazy quilt of served and unserved areas that looks like this:

And as unfortunate members of those unserved households will attest, their pleas for service have fallen on deaf ears for more than a decade now or have been met with vague promises of service. Someday. Maybe. But mostly likely not because they don’t fit the business models of investor-owned providers that is incompatible with high cost, long term investment required for infrastructure
projects. 

Capito introduces bill intended to spur rural broadband expansion | The State Journal | theet.com

Capito introduces bill intended to spur rural broadband expansion | The State Journal | theet.com: U.S. Sen. Shelley Moore Capito, R-W.Va., has introduced federal legislation intended to make it easier for companies to expand broadband internet service to rural communities. Capito introduced the Gigibit Opportunity Act on Wednesday, May 3, according to a a news release. The legislation would give temporary tax deferments to broadband providers and allow communities to set up "Gigabit Opportunity Zones" to encourage expansion.

Perhaps well intended, but misses the mark. Private sector ISPs aren't deterred from investing in telecommunications infrastructure due to tax burdens. Rather, it's long waits for return on investment with their business models based on selling subscriptions one premise at a time to Internet-enabled services over their networks.

Infrastructure costs a lot -- billions. The United States isn't going to get the advanced telecommunications infrastructure it needs quickly today and for the future as demand for service and bandwidth grows exponentially by offering tax breaks worth millions. Particularly by continuing to rely on private sector investment due to the aforementioned ROI obstacle. The public sector has to take the lead just as it has with roads and highways.

Beyond Net Neutrality: The Importance of Title II for Broadband - Public Knowledge

Beyond Net Neutrality: The Importance of Title II for Broadband - Public Knowledge: Title II classification is critical for protecting an open internet, but it is also just as important for preserving our values of service to all Americans, including universal service and consumer protection. Broadband has the power to transform people’s everyday lives. Title II classification of broadband must remain in place to continue protecting the fundamental values of our communications systems.

H/T to Yosef Getachew of Public Knowledge for this item emphasizing the Federal Communications Commission's reclassification of Internet as a common carrier telecommunications utility under Title II of the U.S. Communications Act in its 2015 Open Internet Rulemaking. 

Title II's universal service provision has unfortunately been buried under the mainstream media "net neutrality" meme that is utterly meaningless from the perspective of the 34 million Americans the FCC found in 2016 lack access to advanced telecommunications infrastructure capable of delivering high quality voice, data, graphics and video. Here's what I wrote on the topic shortly before the rulemaking was adopted.

A universal service standard prevents all too common crazy quilt pattern of telecom infrastructure deployment such as this accompanying a post at Steve Blum's blog illustrating how legacy incumbent providers engage in neighborhood cherry picking and redlining.

Deceptive deal: Verizon Wireless 4G LTE "unlimited" isn't

Verizon Wireless which like other wireless ISPs has historically offered metered "data plans," sold in multiple price tiers based on the amount of data transacted over the connection. Under pressure from falling subscriber growth, Verizon Wireless recently introduced an "unlimited" service that dispenses with the meter and offers a flat monthly recurring charge under a 2-year contract. Sounds like a good deal, right, especially for the many households in areas redlined by landline ISPs and without an option for service?

Wrong. It's a lousy, deceptive deal. The VZ Wireless meter is still running under this so-called "unlimited" service which is in fact data limited. And it's a hard limit. Once the meter hits 10GB, the service is shunted off VZ Wireless's 4G LTE network and onto its outmoded and crippled 3G network that can't support streaming or Skype until the start of the next monthly billing cycle.

FCC Chair Pai wrongly describes natural monopoly of telecom infrastructure as competitive market

FCC Chairman Ajit Pai on Why He's Rejecting Net Neutrality Rules - Reason.com: If left in place, however, the Title II rules could harm the commercial internet, which Pai described as "one of the most incredible free market innovations in history. Companies like Google and Facebook and Netflix became household names precisely because we didn't have the government micromanaging how the internet would operate," said Pai, who noted that the Clinton-era decision not to regulate the Internet like a phone utility or a broadcast network was one of the most important factors in the rise of our new economy.

Companies like Google (excepting Google Fiber's now defunct venture into fiber to the premise service), Facebook and Netflix aren't network providers. Consequently, they don't face the high costs associated with building and operating telecommunications infrastructure serving homes, businesses and institutions that deters market competition and promotes market failure.

Ajit Pai: The funny thing about that is because it's precisely because the phone company was a slow moving monopolist. That's exactly the point we're trying to make. These rules, Title II rules were designed to regulate Ma Bell, and the promise with Ma Bell, the deal with the government was, we'll give you a monopoly as long as you give universal service to the country. As a result, for decades, we didn't see innovation in the network we didn't see innovation in phones and it's when you have a competitive marketplace and you let go of that impulse to regulate everything preemptively, that you finally get to see more of a competitive environment.

Pai is engaging in the distortion of describing the natural monopoly market that telecommunications infrastructure is as a competitive market. Wishing it were competitive won't make it so. The cost barriers to entry are simply too high. Just ask Google Fiber. Or the 34 million Americans who have experienced sell side market failure, their homes and small business not offered landline connections capable of delivering high-quality voice, data, graphics and video, according to figures released by the U.S. Federal Communications Commission in 2016. Market failure is hardly an indicator of a robustly competitive market.

Pai's predecessor Tom Wheeler indulged in the misguided notion that telecom infrastructure could be competitive market, even though the FCC under his leadership adopted the 2015 Open Internet rulemaking predicated on regulating Internet service as a natural monopoly, classifying it as a common carrier telecommunications utility.

No FCC enforcement of universal service, anti-redlining provisions of Open Internet rulemaking

Cable, internet connection still not available for many: After 36 years of not being able to access standard internet and cable TV at their home in Deerfield, Gloria and Greg Kasprowicz recently had a Spectrum representative come to their door asking if they would like to have service. The couple, who live three miles from the local Spectrum headquarters on Firehouse Road, were excited when the representative told them they could get service through Spectrum, so they set up an appointment and waited anxiously.

But the date and time of the installment came and went, and no one showed up. So Gloria gave Spectrum a call to see what was going on and was told the company wasn’t able to service her house at this time. “What do you do at this point?” Gloria asked. “(Service) comes up from the bottom of the road, so the first couple of houses, I believe, have it. And it comes down the road to probably a half a mile up the road from us. There’s like a mile stretch — the last mile — for some reason they started from the top and came down and started from the bottom and came up.”

Technically under the U.S. Federal Communications Commission's 2015 Open Internet rulemaking that classified Internet protocol-based telecommunications as a common carrier telecommunications service, Spectrum would have to honor the Kasprowiczs' request for service. That's because the reclassification under Title II of the federal Communications Act includes that requirement as part of Title II's universal service and anti-redlining provisions. But despite adopting the rule, The FCC has never enforced those requirements. The current FCC chairman, Ajit Pai, is reportedly preparing to reverse the rulemaking.

NC bill that permits leasing of muni fiber raises question of how it reduces infrastructure construction costs

Rural broadband internet bill passes NC House | News & Observer: House Bill 68 is titled the BRIGHT Futures Act, which stands for Broadband, Retail, Internet of Things, Grid Power, Healthcare and Training. Its main goal is expanding access to high-speed, broadband internet in rural areas of the state where it’s often too expensive for private service providers to extend their lines.

*  *  *
Bill sponsors say cities, towns and counties could make use of what’s known as “dark fiber” – additional capacity in existing infrastructure that government uses to connect traffic lights, schools and public facilities. Leasing capacity to private internet providers could provide revenue to local governments that could support the expansion of
government-owned fiber networks.

The problem as stated here is it's too costly for private telecom providers to extend their infrastructure to rural areas. So how does allowing these providers to lease local government owned fiber address the cost of building the needed infrastructure that connects homes and small businesses? Particularly given the challenging business case to justify building infrastructure to serve these areas?

A concise summary of poor state of American telecom

The FCC Is Leading Us Toward Catastrophe – Backchannel: Adding a little internet-y flavor to basic, physical telecommunications lines makes zero difference to the economics of building these essential connections. Because the upfront costs of building communications lines — very physical things, lots of labor costs involved — are high, because no one needs two lines to their house, and because it was cheaper to upgrade the cable systems to higher speeds than to dig up copper wires and replace them with fiber, we have ended up with a country subject to geographically divided markets, private, unconstrained monopolies, and big holes where internet access is rare and expensive where it exists at all. In urban areas, local cable monopolies generally wield tremendous power and charge as much as they like. Rural places, meanwhile, are often relegated to inadequate connections over copper phone lines.

Susan Crawford provides an concise summary of the poor state of American telecommunications borne out of misguided and excessive reliance on market forces to modernize and build out the nation's telecom infrastructure in a natural monopoly market where market forces don't work.

Robert W. Taylor, a pioneer of the modern computer, dies at 85 - LA Times

Robert W. Taylor, a pioneer of the modern computer, dies at 85 - LA Times: Robert W. Taylor, one of the most important figures in the creation of the modern computer and the Internet, has died. He was 85. According to his son Kurt Taylor, the scientist died Thursday at his home in Woodside. He suffered from Parkinson’s disease and other ailments. Taylor’s name was not known to the public, but it was a byword in computer science and networking, where he was a key innovator who transformed the world of technology. Taylor was a Pentagon researcher in the 1960s when he launched Arpanet, which evolved into what we know today as the Internet.

Presaging the concern in our current time over disparate access to advanced Internet-based telecommunications, Taylor wrote the following in a paper he co-authored, The Computer as a Communication Device published in April 1968 in Science and Society:

For the society, the impact will be good or bad, depending mainly on the question: Will "to be on line" be a privilege or a right? If only a favored segment of the population gets a chance to enjoy the advantage of "intelligence amplification," the network may exaggerate the discontinuity in the spectrum of intellectual opportunity.

USTelecom is right -- and wrong -- on public telecom infrastructure

Survey: Most Americans cities to build, sell Internet plans: Proponents of independent Internet networks argue that a "public option" for Internet access could help drive down the price of broadband and increase speeds. Opponents say the expense of building new networks represents an unacceptable financial risk for many local governments. "Municipal broadband networks too often end up failing and costing taxpayers millions," said USTelecom, a trade association representing Internet providers and telecom companies.

USTelecom is right. Modernizing telecommunications infrastructure rapidly enough to meet the nation's needs in an era of Internet protocol-based services will indeed cost tax dollars. It simply has to because infrastructure costs billions to build. That high price is not compatible with the short term business models of private investor owned legacy telephone and cable companies. That's why they're confined to piecemeal build outs and bandwidth rationing that leave many existing and putative customers in their service territories unserved and undeserved and complaining about lousy, poor value service. Even conservatives are waking up to the fact of this market failure, recognizing that market forces don't work well when it comes to high cost infrastructure. And it's about time.

USTelecom is also correct that local governments face significant financial risk due to the large sums involved. That's why I propose in my eBook Service Unavailable: America’s Telecommunications Infrastructure Crisis a federal "public option" since only the federal government -- and not state and local government -- can shoulder the burden.

Where USTelecom as well as those who support local government telecom infrastructure modernization projects are wrong is claiming these projects represent market competition with legacy incumbent telephone and cable companies. They do not and cannot. Local governments are responding to market failure, not any desire to compete in the telecommunications industry. They are looking to meet their needs to support economic development in the digital economy and address their citizens' complaints about crappy service from the incumbents. That situation has occurred because telecommunications infrastructure by definition is a natural monopoly and not a competitive market characterized by many sellers and buyers. Thus market forces fail, too weak to provide incentive for incumbent telephone and cable companies to provide better service.

U.S. at crossroads on telecom infrastructure modernization. The choice is to look to the past -- or to the future.

The United States stands at a crossroads when it comes to modernizing its telecommunications infrastructure. Many observers including Susan Crawford and this writer believe that modernization must be future-focused, providing an infrastructure that’s sufficiently robust and able to accommodate the rapidly growing demand for bandwidth that comes with the transition to digital, Internet-protocol based telecommunications. That means replacing the legacy metallic infrastructure that worked well for telephone and cable TV service in the 20^th century with the infrastructure of the 21^st: fiber optic connections serving every American doorstep. The future is big and it demands big thinking.

Others such as Doug Brake of the Information Technology & Innovation Foundation argue for a retrogressive approach that encourages us to think small. It proposes incremental fixes, prioritizing those areas worst impacted by market failure borne out of the misguided heavy reliance on investor-owned infrastructure. Instead of producing a future of bandwidth abundance where the term “broadband speed” is obsoleted, Brake’s incremental outlook would condemn Americans to a future of ongoing bandwidth poverty and its adverse effects for the larger socio-economy.

Competition isn't the answer for better premise telecom service

California lawmakers give cable utility perks, without utility obligations: Historically, there was a difference between telephone companies, which have been state regulated utilities for more than a century, and cable companies, which were originally franchised by local governments but managed to escape that oversight ten years ago. At least in California. Today, the differences are diminishingly small, particularly in urban and suburban markets where cable and telephone companies sell the same services and enjoy a comfortable, unregulated duopoly.

The distinguishing characteristics of a natural monopoly are high initial capital costs, usually related to infrastructure construction, and powerful economies of scale, both of which give the first mover in the market insurmountable advantages over would be competitors. In the old analog world, telephone and television service were completely different businesses, linked only by a common dependence on wireline networks. Now, both offer voice and video, and face competition in those segments from wireless providers. But they are also almost always the only wireline broadband option and wireless service is not a credible substitute, in either practical or microeconomic terms.

This is an excellent and much needed microeconomic description of the dominant privately owned telecommunications infrastructure that dominates in the United States that is all too often absent from the current policy discussion. Many ask why there isn’t competition in the telecommunications industry like exists in most consumer products and services. If it works there, then it must work in telecommunications also. More competition is the answer for better choice and consumer value, they conclude.

But as Steve Blum explains in his blog post, that reasoning is fatally flawed. More competition isn’t possible in a natural monopoly market where high cost barriers and the power of incumbency deter would be competitors. (Just ask Google how its flagging Google Fiber venture worked out) Telecommunications infrastructure will never be a robustly competitive market, defined as one with many sellers and buyers offering consumers many choices, enabling market forces that allow consumers to choose the best value and force out uncompetitive players.

When it comes to landline premise telecommunications service, most Americans can select from no more than two providers. And sadly for millions, none at all since the business model of vertically integrated investor owned providers must naturally redline and cherry pick among neighborhoods, creating winners and losers among consumers. As long as the nation relies on this broken model, it
will continue to lag when it comes to building the world class telecom infrastructure it needs to accommodate the explosion in digital communications.