California policymakers should consider creating public utility to serve Northern California delivering electric power -- and advanced telecommunications.

Northern California’s electric utility Pacific Gas & Electric’s future as a going concern is in doubt in the aftermath of enormous wildfires in the region the past several years, most recently the disastrous Camp Fire that incinerated the town of Paradise. The investor-owned utility is potentially facing liability claims running into the many billions of dollars from deaths, injuries, property damage and fire suppression costs that it will be hard pressed to pay. This circumstance is raising the question of whether the public interest of reliable and safe electric power would be better served by a publicly owned utility.

The question presents at a pivotal time as regulators prepare to reassess PG&E’s organizational structure going forward, the Legislature begins a new biennial session and new administration is about to take office. Veteran Sacramento columnist Dan Walters suggests they explore whether California’s electric utilities should become governmental entities – regional versions of municipally owned utilities already operating in the state. “All of them have markedly lower rates than the three big private utilities, and have governing structures that are much more transparent and accountable, not only to ratepayers but to voters.”

Policymakers would be wise and forward looking to also consider expanding the scope of a publicly owned regional utility to include advanced telecommunications. Consumers would likely get a better deal there as well. Much of PG&E’s service area lacks adequate landline telecommunications infrastructure, nominally served by investor owned corporations like PG&E. A publicly owned utility would operate without the need to generate profits and could concentrate on providing the highest possible level of service and value to all – and not just some premises. Particularly when advanced telecommunications service is increasingly seen as essential as electricity.

New methods of installing fiber optic cable on poles owned by PG&E show promise to lower construction costs compared to the traditional strand and lash method of utilizing a separate metal suspension cable hung in the middle part of the pole leased by telephone and cable companies. These include lighter weight all-dielectric self-supporting cable and aerial conduit used in conjunction with smart grid technology. Smart grid technology could also improve safety management of the electric infrastructure, reducing wildfire risk.

Cooperatives served early 20th century exurban America's electricity and telephone needs, but face far more challenging situation for today's advanced telecom

Matheson: ‘We Want the Consumer to Have Real Broadband’ - America's Electric Cooperatives: NRECA CEO Jim Matheson, speaking before a Washington audience of business strategists, outlined how federal policymakers can help close the digital divide and what innovative electric cooperatives are doing to meet rural America’s broadband needs in the meantime.High-speed internet service “is important to us as electric cooperatives because we are owned by the communities we serve, communities that won’t have much of a future without broadband,” Matheson said at the Next.2018 conference held Nov. 13-15 by Bloomberg BNA, a news and analysis company.

Matheson underscored how electric co-ops are leaders in smart technology, yet Federal Communications Commission policies fail to make the most of co-op investments for broadband development. “The FCC has spent $114 billion, and there are still 23 million people without access to broadband,” he said. This gap in service is due in part to the commission’s reliance on self-reported and unverified data about internet service from incumbent providers.

Electric power was first deployed in urban areas of the United States at the start of the 20th century. That's what led to the formation of electric cooperatives in the 1930s to provide electricity outside of urban areas.

Today's advanced telecom infrastructure deficiencies are a different story. Unlike early electric power service, advanced telecom infrastructure does exist outside of urban and suburban areas. But it's generally only deployed to discrete areas where legacy incumbent telephone and cable companies believe they can earn a relatively rapid return on their capital expenditures and maintenance costs. As per the previous post on this blog, that can mean service for one house while another just down the road, around the bend or outside town limits is deemed unservicable.

Incumbents aren't keen on federal subsidies for providers desiring to serve those they do not since they potentially infringe on their territorial monopolies. Consequently, federal subsidy program rules hamstring potential alternative providers, impractically targeted at filling the only the unserved redlined holes in the incumbents' swiss cheese distribution networks. The incumbents lobby for those rules. They naturally want to maximize the size of the cheese and minimize the size of the holes in the data on infrastructure availability they are required to report to regulators under the 1996 revision of the Communications Act. The incumbent rigging of the rules leaves cooperative leaders like Matheson understandably frustrated.

When one premise has advanced telecom service and another nearby does not, it's not a "rural broadband" issue

Electric coops could end Mississippi's broadband 'deserts': What’s considered a “broadband desert” can be deceptive. My elderly parents, for example, live in a rural area between two cities that are served by broadband, but still can only get basic dial-up services. People just up the road can receive broadband from AT&T, and when we recently inquired about services, AT&T looked up the address, assured us they could help and dispatched a technician. But when the tech showed up and tried to install the equipment, he apologetically explained that the home was just out of reach. He was sympathetic to my parents’ plight, and it wasn’t his fault, but it was just not happening.

This account illustrates why America's advanced telecom infrastructure deficiencies cannot accurately be described as a "rural broadband" problem as it's typically dubbed in both mainstream and info tech media. As has been the case for at least a decade as reported on this blog, the problem is redlining by legacy incumbent ISPs with no universal service requirement as exists for traditional voice telephone service. One premise is offered service while another nearby is not. That wasn't the case with electric power distribution infrastructure in the early 20th century. That was truly a rural issue since rural areas were bereft of electric power service.

Purpose of "broadband maps" is to protect legacy incumbent telephone and cable companies, delay progress

FCC leaders say we need a 'national mission' to fix rural broadband - CNET: But before you can really get things going, you have to address one key issue, Rosenworcel said.
"Our broadband maps are terrible," she said. "If we're going to solve this nation's broadband problems, then the first thing we have to do is fix those maps. We need to know where broadband is and is not in every corner of this country." You can't solve a problem you can't measure, she added.

And one can't reach a destination or goal without a plan. Rather than serve that purpose, American policymakers have instead used "broadband maps" to protect legacy incumbent telephone and cable companies and delay progress. They're continuing the fool's errand the incumbents assigned them. Policymakers instead need to set the goal of bringing fiber to every home, school and business and work from the rebuttable presumption that it doesn't exist in most of the nation.

“Net neutrality” fight over nothing less than the future business and regulatory model of advanced telecommunications

The state vs. federal showdown over “net neutrality” is about far more than regulating ISPs’ ability to favor or “speed up” some advanced telecommunications services or slow or even block others. It’s a fight over nothing less than the future business and regulatory models of advanced telecommunications (ATC). Should ATC be bundled with services owned or procured by the ISP or be a common carrier “dumb pipe” in which the role of ISPs is primarily to provide connectivity?

Because Internet protocol enabled digital ATC can deliver far more services than the analog voice telephone service that preceded it, ISPs naturally see a gold mine in monetizing these services. An example is their push for “video everywhere” displayed on home TVs as well as personal devices and acquisitions of video content producers such as AT&T’s recent purchase of Time Warner.

This is the ATC as an information service regulatory approach favored by ISPs and expressed in current public policy wherein the U.S. Federal Communications Commission has reclassified ATC as an information service rather than a common carrier telecommunications utility as the FCC classified it in its 2015 Open Internet rulemaking.

The problem with treating ATC as a proprietary information service instead of a common carrier telecom utility is it will always have limited availability because the infrastructure to deliver it will only be built to serve “high potential” neighborhoods deemed sufficiently profitable by ISPs. The FCC’s now repealed Open Internet rules by contrast included a mandate on ISPs to make ATC available to any customer in their service territories making a reasonable request for service. As information service, that provision contained in Title II of the Communications Act doesn’t apply since information services are regulated under Title I of the statute.

Big ISPs naturally prefer Title I information service regulation because it supports their vertically integrated business models favoring proprietary content delivered to end users over proprietary infrastructure. That supports their top lines. And not having to serve “low potential” neighborhoods reduces capital and maintenance costs, benefitting their bottom lines. It’s a lopsided winner take all scheme in which the ISPs win big and consumers lose.

It's not the data, stupid. It's the FCC's crazy back and forth regulatory posture on advanced telecommunications

Rural Americans Suffer the Costs of Faulty FCC Broadband Data - Pacific Standard: The FCC conducts a review of the state of broadband deployment and access every year, as required by the 1996 Telecommunications Act. As part of this analysis, the FCC must determine whether high-speed broadband is being deployed to "all Americans in a reasonable and timely fashion."

Here, accurate data is crucial. If the FCC finds that high-speed broadband is not being deployed to all Americans in the way it spells out, it must "take immediate action to accelerate deployment." In other words, if broadband isn't being deployed in a timely way to all Americans, the FCC is obligated to enact policies to remedy that. But without reliable data, the FCC might restrict its own ability to do what it's supposed to do. (Emphasis added)

The premise here is flawed. The FCC has already hampered its own ability to ensure universal advanced telecommunications service by failing to consistently regulate it as a common carrier telecommunications utility under Title II of the Communications Act. That regulatory regime accelerates deployment by mandating universal service and prohibiting neighborhood redlining by requiring ISPs to honor reasonable requests for service.

Instead, the agency has vacillated over the past two decades between regulating it under that scheme and as an information service under Title I of the statute. Most recently, the FCC has shifted back to Title I information service regulation after repealing its Title II-based 2015 Open Internet regulations in late 2017. The lack of a consistent regulatory policy and the resulting infrastructure deficiencies is spawning a movement to deprivatize advanced telecom infrastructure as localities study ways to finance and build their own.

Why is Verizon chasing 4G speed records with 5G only days away?

Why is Verizon chasing 4G speed records with 5G only days away?: After nearly a year of hype, actual 5G service is now only days away. Verizon is launching commercial offerings in four cities next week — but the same carrier is touting an eleventh-hour breakthrough in 4G. Working with Qualcomm and Nokia in a live New York commercial environment, Verizon achieved a peak data speed of 1.45Gbps using LTE Advanced technology.

To put that in some perspective, Verizon’s 5G service is promising customers peak data speeds of 1Gbps — 10 to 100 times faster than typical cellular speeds today — with more typical performance in the 300Mbps range. So when Verizon says that (certain) 4G phones might outperform its 5G network, by a factor of nearly 50 percent, that’s a sure-fire recipe for customer confusion.

Adding to the confusion is the blurring between mobile and fixed service given Verizon's limited test market introduction of 5G fixed premise service. This is where mass marketing fueled expectations collide with reality since this service is naturally very limited to areas with sufficient existing fiber infrastructure and free of terrain and foliage obstructions that block 5G signals. But consumers naturally think it's available to them because a large mobile carrier is deploying it and may already be Verizon Wireless customers. Some have even jumped to the conclusion that it has obsoleted fiber to the premise technology.

Asking for meaningful competition in telecom infrastructure is asking for the impossible

These Minnesotans Are Fed Up With Frontier | community broadband networks: Speaker after speaker pointed out that they recognize the root of the problem is lack of competition. In addition to their description of specific issues, almost every attendee expressed a desire to give their business to some other company but they had no other option for Internet access provider — none. Folks in Wyoming feel they’ve been mistreated because Frontier doesn’t have to worry about losing their business. The people in Wyoming are right and Frontier isn’t the only company with the same attitude. Big cable and telecom companies have divided up America’s geography in to slices of monopoly pie, creating an environment in which subscribers can be neglected or even abused. With no other option for Internet access and our dependence on connectivity, subscribers face a tough choice between paying for horrible Internet access or having no connection at all.

It's natural for consumers to want more competition and choice when the market isn't providing the service, value and choice they expect. The problem is asking for more competition in telecom infrastructure is asking for the impossible. There can be no meaningful market competition because telecom infrastructure is very costly to build and maintain. Those high costs typically torpedo the business case for a new player to offer services -- something Google Fiber found out the hard way.

Consequently, the economics of telecom premise landline infrastructure make it feasible for only one or two providers. And as this post points out, providers can gouge and provide poor value service because they can. Consumers have no real alternative. This is the unfortunate consequence of telecom policy that has left advanced telecom infrastructure largely to investor owned providers whose first loyalty is to their shareholders, not their customers. Only public ownership of telecom infrastructure can serve the public interest and provides a needed solution to the failure of market forces in a natural monopoly market. That's not to say there's no role for the private sector. Investor owned companies have the know how and experience to build and operate advanced telecom infrastructure and deliver services over it.

Fiber to the prem renders issue of "broadband speed" largely irrelevant

Why are kids doing their homework in McDonald's parking lot?: An area of northwest Alabama is already seeing some benefit to that federal money, of course. Aderholt announced in May that Tombigbee Communications had received $3 million as it expands online connectivity services in Marion, Winston, Fayette and Lamar counties.

The meeting last week in Guntersville included business and elected leaders who gathered in a roundtable discussion to talk about the specifics of expanding broadband in northeast Alabama. Steve Foshee, the president and CEO of Tombigbee Communications, was among those in attendance.

That conversation, Aderholt said, got as focused as what internet speed would be best - not too slow to be useless but not too fast as to be cost-prohibitive.

The question posed in the last sentence reflects the misguided notion that regards advanced telecommunications infrastructure like water pipes. The bigger the pipe, the higher the cost. It's a false tradeoff, largely put forth by incumbent telephone and cable companies reluctant to modernize their legacy metallic infrastructures to fiber to the premise. Fiber has such abundant carrying capacity it renders the "broadband speed" issue largely irrelevant.

Tennessee U.S. Senate race offers sharp policy debate over public vs. private ownership of telecom infrastructure

Bredesen wants TVA mission expanded to provide rural broadband service | Times Free Press

A Tennessee U.S. Senate contest provides a sharp policy contrast between public versus private ownership of advanced telecommunications infrastructure. Former Tennessee Gov. Phil Bredesen favors public ownership via the Tennessee Valley Authority (TVA), formed in the 1930s to provide electric service in areas avoided by investor owned providers. U.S. Rep. Marsha Blackburn on the other hand opposes public ownership of telecommunications infrastructure, contending that unleasing market forces and reduced regulation will encourage investor owned providers to build the necessary infrastructure.

The history that led to the creation of the TVA however suggests market forces aren't up to the challenge. Then as now, if the return on investment isn't sufficient, the market fails on the sell side. Providers cannot earn enough profit in a reasonable timeframe to justify the capital expenditure on infrastructure. In that regard, Bredesen is on the right side of history.

That's not to say however that investor owned players and market forces cannot play a role. Privately owned providers can make money building and operating advanced telecom infrastructure and providing services over it -- and with far less risk than they would face as both owner and operator. Competition can take place in these realms. For example, Ammon Idaho is building publicly owned fiber to the premise telecom infrastructure that allows end users to select among competing ISPs.

FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com

FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com: Speaking to reporters after the meeting, Pai said, from the FCC's viewpoint, connectivity remains the biggest hurdle to a serious move toward widespread use of telemedicine. "The telemedicine application is only as strong as the digital connections between communities," said Pai, a 2012 Obama appointee who was designated director of the commission by President Trump, and a noted free-market advocate. Pai pointed to his agency's recent infusion of funds into its Rural Health Care Program, which provides funds to some health care providers for broadband and telecommunications services. He also said he is aiming to eliminate outdated FCC rules and encourage competition among internet service providers. "We want to make sure these companies have a strong incentive to upgrade to fiber, especially in these rural communities that need high-capacity internet access," Pai said.

The FCC chairman is right when he says America needs more fiber advanced telecommunications infrastructure deployment as medical care increasingly utilizes it. But it won't happen with Pai's prescriptions. Limited purpose funding such as the Rural Health Care Program will hardly make a dent in the nation's enormous accumulated telecommunications infrastructure deficit where FTTP is the exception rather than the norm it should be.

Nor can regulatory reforms address the fundamental business problem facing investor owned ISPs. Building new fiber infrastructure under their current business models cannot yield positive net present value within the limited patience of their investors' capital looking for rapid returns. And encouraging competition in a natural monopoly market that is telecommunications infrastructure is like expecting ice cream plants to grow in the desert. No meaningful competition can ever occur.

ISPs want to be hotels because luxury accomodations aren't meant for the masses

Net neutrality activists, state officials are taking the FCC to court. Here's how they'll argue the case. | National and International | napavalleyregister.com: But tech companies and consumer groups told the court Monday that third-party services routinely carry out those same functions, and that ISPs cannot lay claim to lighter regulation just because a portion of their business is involved in performing them. "The FCC could not have reasonably concluded that a drop of DNS and caching in a sea of transmission transformed the service into something that could properly be called an information service," the brief said. The overall impression, the group said, is that of trying to deregulate all roads that lead to hotels by simply reclassifying the roads themselves as hotels.

Hotels are often seen as luxury accommodations compared to say Motel 6. The analogy here fits nicely with the legacy incumbent telephone and cable company opposition to being regulated as a common carrier telecommunication utility -- and thus barred under the now repealed FCC Title II rulemaking from redlining and discriminating against neighborhoods they choose not to serve.

Will forthcoming FCC rule on pole attachments and enhanced PON technology lead to reboot of Google Fiber?

Google Fiber Blog: FCC Supports OTMR - Faster and Fairer Rules for Pole Attachments: Fortunately, there is a better way. It is called One Touch Make Ready (OTMR), which is a system where a new attacher does much of the make ready work itself, all at one time. OTMR is a common sense policy that will dramatically improve the ability of new broadband providers to enter the market and offer competitive service, reducing delays and lowering costs by allowing the necessary work on utility poles to be done much more efficiently. This also means fewer crews coming through neighborhoods and disrupting traffic, making it safer for both workers and residents.That’s why we’re so excited by the news that the FCC is poised to pass a rule that would institute a national One Touch Make Ready system, with the goal of significantly increasing the deployment of high-speed broadband across the United States. As the FCC stated, “OTMR speeds and reduces the cost of broadband deployment by allowing the party with the strongest incentive — the new attacher — to prepare the pole quickly to perform all of the work itself, rather than spreading the work across multiple parties.”

The big question here is whether this will spur a serious reboot of Google Fiber as an aerial fiber overbuilder, forsaking its originally preferred buried conduit deployment architecture and its attendant construction delay and high cost burdens.

Along with liberalized pole attachment rules, another factor is enhanced Passive Optical Network (PON) technology that could reduce deployment costs and allow Google Fiber to move beyond the urban and suburban areas it initially targeted to exurban and possibly rural areas. In these areas, Google Fiber would more rapidly capture market share since incumbent telephone and cable companies tend to have partially deployed networks that leave many premises unconnected.

Selling data consumption tiers rather than connectivity

Net neutrality makes comeback in California; lawmakers agree to strict rules | Ars Technica: Wiener's office told Ars that the compromise version will remove a ban on "application-specific differential pricing," which the bill defined as "charging different prices for Internet traffic to customers on the basis of Internet content, application, service, or device, or class of Internet content, application, service, or device, but does not include zero-rating." That means an ISP could sell add-ons to data plans that let customers buy extra data just for a certain type of website or online service. A customer's base data plan would still allow browsing to any kind of website or service in this scenario, but the package of extra data could be restricted just to social media sites, or some other category, Wiener's office explained. The effect would be similar to zero-rating, but Wiener's office said it wouldn't involve exempting any traffic from the customer's base data plan. (Emphasis added)

Mobile device users are familiar with their carriers' business models: selling tiered plans based on the amount of data consumed. The more consumed, the higher the price tier. As well as functional costs such as throughput being throttled back once a certain consumption threshold is exceeded.

This story suggests the expansion of this pricing model to landline-based service. And that the development likely motivated providers of advanced telecom service providers to successfully lobby the U.S Federal Communications Commission to recently scuttle its 2015 Open Internet rulemaking that would have made doing so problematic. If landline like mobile providers can sell finite "bandwidth by the bucket" (or scoop of ice cream to use the Verizon Wireless analogy), that provides them a pricing rationale to offer discounted or better service to end users accessing their proprietary content -- the "walled garden" consumer facing model that characterized the early days of the Internet with ISPs like CompuServe and AOL. And telephone service for decades before, when calls were billed based on minutes used and distance of the call.

The real policy issue here is whether providers of advanced telecommunications services should be able to maintain vertically integrated business structures and product offerings based on those business models of the past and whether doing so is good for consumers. At a time when Internet protocol-based telecommunications can provide so much more than the bill per unit voice phone call of legacy POTS (Plain Old Telephone Service) or distant TV channels of the legacy CATV model.

Comcast to build FTTP telecom infrastructure in 2 Michigan townships after tax measure fails

According to the Holland (Michigan) Sentinel, Comcast cites lower deployment costs due to improved carrying of fiber vs. COAX cable:

As Laketown finally gets internet, rural access still a prevalent issue elsewhere: Traditional coaxial cables use radio frequencies as the medium to transmit data, which means there is a larger amount of signal loss compared to fiber technology. This loss of signal that comes with traditional coax has made it difficult to serve Laketown and Saugatuck townships in the past because of large-size properties and widespread homes.
Now Comcast can build fiber to each home without building or extending main facilities to each one at about the same cost as using traditional coax cables to build the network out, Gilbert said.

NTIA Reauthorization Legislation Morphs Into Legacy Incumbent Protectionist Measure

NTIA Reauthorization Legislation Morphs Into Broadband Bill - Multichannel: On the broadband front, the bill establishes an Office of Internet Connectivity and Growth within NTIA to do outreach to communities in need of high-speed broadband as well as hold workshops and develop training tools to help expand adoption and access.

And in a move that warms the hearts of ISPs often complaining about overbuilding and potential waste, fraud and abuse in government subsidies, the new office would create a database identifying how federal broadband money was being used, including tracking construction and access to any infrastructure build-out.

Both of these are cynical provisions that will do nothing to support America's urgent need to modernize its legacy metallic telecom infrastructure to fiber to the premise serving all homes, schools and businesses. They are essentially designed to keep the sub optimal status quo in place and protect legacy incumbent telephone and cable companies wishing to preserve control over their nominal, limited footprint service territories without disruption.

Brought to you by broadband: TV viewing via connected devices up 65% since 2016

Brought to you by broadband: TV viewing via connected devices up 65% since 2016: Connected devices have made video streaming easy and ubiquitous -- 74% of U.S. TV households now have at least one internet-connected TV device, including smart TVs, streaming media devices (like Roku, Amazon Fire TV, Chromecast or Apple TV), connected video game systems, and Blu-ray players. Similarly, households with over-the-top video service are expected to exceed 265 million by 2022. Given the tremendous growth of broadband-powered devices, USTelecom remains committed to supporting policies that foster the innovation and investment necessary to keep pace with consumer demand.

This is an important trend driving the vertical integration of advanced telecom infrastructure with content such as this month's merger of AT&T and Time Warner.  It represents the "cable-lization of the Internet" as some have termed it and a return to the "walled gardens" of the early 1990s such as AOL and CompuServe. These services functioned as integrated platforms for content as well as communications such as email for a recurring monthly fee. We are witnessing a revival of the model, this time with bundled video content those early platforms couldn't deliver.

It's a regressive trend and counter to the move toward Internet protocol-based telecommunications since then that enables access to innumerable information and communication services (including Voice Over Internet Protocol or VOIP), obsoleting the walled garden model of a generation ago. It also represents a misplaced emphasis on entertainment over telecommunications. Capital is diverted to purchasing content rather than constructing and upgrading infrastructure. That reinforces neighborhood redlining as the big ISPs concentrate on affluent, high density neighborhoods where they can maximize ARPU and ROI with their video bundles.

Google Fiber doesn't have a wireless alternative because it would require huge technological breakthrough

Google Fiber Broadband Hype Replaced By Delays And Frustration | Techdirt: To be fair, Google's PR folks can't offer answers of what comes next because Google itself doesn't know what the wireless technology that will supplant fiber will look like. But even Google's wireless promises have been decidedly shaky. After acquiring urban wireless provider Webpass two years ago, some of that company's coverage markets have actually shrunk, with the provider simply pulling out of cities like Boston without much explanation. And many of the executives that were part of that acquisition have "suddenly" departed for unspecified reasons. At this point it's certainly possible that once Google Fiber is done with its multi-year, numerous wireless tests it settles on a cheaper (but still expensive and time consuming) alternative to fiber.

There's a simple answer here. It's because Google doesn't have (not yet, as least) an unconventional wireless technology that can replace fiber. That would require breakthrough technology that can get around the physics of radio spectrum that makes it difficult to reliably deliver bidirectional IP data streams to multiple users while penetrating objects and precipitation without interference. In other words, to get fiber's throughput, nothing tops fiber.

Milo Medin, Google's then vice president of access services, said as much at the 2013 Broadband Communities Summit, disabusing the notion that wireless can replace fiber and thus eliminating the cost of building the necessary infrastructure to support it:

Some argue that fiber networks are not really needed because of wireless network growth. As an engineer, quite honestly, this kind of talk makes my brain hurt. Wireless network growth is driven by fiber. All those base stations that smartphones connect to are increasingly connected by fiber because, as speeds go up, fiber is required to carry that kind of traffic.

In other words, wireless needs a lot of what some hope it can more cheaply substitute: fiber.

Public policy likely to shift to regard IP-based advanced telecommunications as a utility, aligning with public expectations

Internet Service Providers have historically regarded their “broadband” offerings as luxury upgrades to basic narrowband dialup service introduced in the early 1990s. Consequently, they upgraded their “last mile” delivery infrastructures to support a range of Internet protocol supported services such as high quality data, video, voice only in select areas where they believed a sufficient number of households would opt for their high end offerings. The working assumption was significantly fewer than half would do so. Hence to hedge their risk, ISPs favored areas with the highest density single family housing and multiple dwelling units (MDUs) to increase the likelihood their investment in upgraded infrastructure would produce a decent return over a relatively short duration in order to satisfy their investors.

Nearly three decades later, ISPs continue to follow this deployment strategy at the same time IP-based advanced telecommunications is increasingly seen as a basic utility service. In the United States, current regulatory policy is aligned with the ISPs “broadband” service-as-luxury business models. ISPs are free of universal service obligations like those that governed voice telephone service of the pre-Internet era, predicated on the policy principle that in a natural monopoly, market forces cannot assure all households requesting service will have their requests honored. That’s consistent with the current public policy that regards advanced telecommunications as luxury and not basic utility service. Why require ISPs to provide service to all requesting it when after all, it’s a luxury? Similarly as a luxury, regulating what ISPs can charge isn’t appropriate. Let them charge what the market will bear. (It will bear quite a lot for a service that consumers see less as a luxury than a basic service.)

The tension between the basic versus luxury service paradigm has been building in recent years and will soon reach a breaking point. As constituent complaints of infrastructure deficits grow more strident, policymakers of every stripe are increasingly describing advanced telecommunications as an essential utility like electric power and water service. Sooner rather than later, public policy will come into alignment with this view. Concurrently, expect a shift away from subsidizing investor-owned ISPs to build the necessary infrastructure to a publicly-led effort. It will be necessary in order to build rapidly enough to cover the persistent infrastructure gaps and to gain a greater degree of control and accountability than has existed in limited subsidy programs for advanced telecommunications infrastructure.

Schumer: Broadband is a Utility That May Require Price Caps | DSLReports, ISP Information

Schumer: Broadband is a Utility That May Require Price Caps | DSLReports, ISP Information: Senate Democratic leader Chuck Schumer uttered some words this week that likely terrified lobbyists and executives for AT&T, Verizon and Comcast. During his floor argument for a Congressional Review Act resolution that would restore net neutrality, Schumer stated that he believes that broadband should be viewed as an essential utility, and that we may need to eventually explore price caps to prevent monopolies from over-charging for services thanks to limited competition.

Schumer's right. And when it's an essential service, the potential for abusive price gouging is enormous.

Democrats and Republicans alike have traditionally avoided price caps on broadband service, in large part because deep-pocketed campaign contributors in the telecom sector have viciously opposed the idea for obvious reasons.  Even when former FCC boss Tom Wheeler reclassified ISPs as common carriers under Title II of the Telecom act he was careful to "forbear" from applying rate regulation onto ISPs.

But Schumer appeared to re-open the conversation of price caps on an uncompetitive broadband market during discussions about net neutrality, even though the likelihood of him actually following through with that isn't particularly likely given historical precedent. "You know, people say, well, let a private company do whatever it wants, let them charge whatever they want," Schumer argued. "But in certain goods which are essential we don't do that. Utilities, highways. The same thing now applies to the internet. It's a necessity and we have to have protections for average folks, for small businesses, for working families." 

Spot on. It's time to end the delusion that a utility market can be a competitive market. After all, how many electric, water and natural gas companies are competing for customers?

Jonathan Chambers on overcoming U.S. telecom infrastructure deficiencies

Overbuilding, aka Competition, is the American Way – Conexon

The following is a non-comprehensive list of rural broadband overbuilders that have announced over the past two years plans to build rural networks:

1. AT&T. Announced Project AirGig to send data over powerlines.
2. Google. Announced Project Loon to use balloons traveling at the edge of space to bring internet access to rural areas.
3. Facebook. Announced conducted tests to use drones to deliver rural broadband.
4. Microsoft. Announced trials to use TV whitespaces for rural broadband.
5. SpaceX/OneWeb. Announced plans to deploy thousands of low-earth orbiting satellites to deliver internet access to rural areas.
6. New T-Mobile. Announced its intention of 5G for all, extending 5G to rural areas.
7. Rural Electric Cooperatives. Dozens of fiber-to-the-home networks under construction.
   
   Which of these initiatives should the government favor?

Only No. 7. It's the only proven technology with headroom to accommodate bandwidth demand that's doubling every few years. And because federal funding of utility cooperatives has a successful record of constructing needed infrastructure in areas not sufficiently profitable for investor-owned providers.

If your answer is the government should not favor any one company or technology, then perhaps you also agree that the government shouldn’t favor telephone companies with their copper networks.

I would agree with the second part of the question. The existing Connect America Fund is regressive and wasteful in that it allows funding of legacy copper telecommunications networks. It's main purpose is to preserve the service area hegemony of legacy telephone companies, not improve infrastructure.

As a small first step, I propose that anywhere one of the overbuilders has already overbuilt a telephone company’s network without any public funding, the government should cease its funding in that area.

Yes, if overbuilt with fiber to the premise, option No. 7 above.

To make the government policy easy to execute, I propose that where 100% of the households in a census block have access to Gigabit service by a company that is not receiving a subsidy in that area, then the government shouldn’t fund any company in that area. That simple policy change would save the public hundreds of millions of dollars,
money that could be used where it is needed.

Let's dispense with the term "Gigabit service." Keep it simple. Fiber to the premise.

 As a second small step, I propose that all future funding follow individual consumer decisions. The telephone companies can continue to get their legacy support, except where a household chooses another carrier with a minimum of 100 Mbps service. In that case, the overbuilder should receive support that is equal to the funding being provided on a per household basis to the telephone company. Such a program should be limited in time, no more than a decade, in order to encourage overbuilders to move quickly and incumbents to improve their networks.

Again, keep it simple. Fiber to the premise infrastructure. That's the real network improvement. Don't fall into the incumbent created trap of focusing on "broadband speed."

U.S. doesn’t have a definitive “rural broadband” problem; it’s all about service area “footprints” and redlining

In the first part of the 20th century, U.S. policymakers appropriated funding to cooperatives and local governments to bring electrical and telephone service to rural America. As the century got underway, these utilities were offered only in cities – where investor-owned providers deemed them sufficiently profitable to build the necessary distribution infrastructure.

Many similarly describe the nation’s advanced telecommunications infrastructure deficiencies as a rural issue as it was for these utilities. It’s not that simple. True, the deficits tend to be greater in rural areas. But it’s not purely a matter of rural geography as it was many decades ago. Back then, entire rural regions lacked electric power and telephone infrastructure.

The situation today is different and more nuanced. Legacy telephone and cable companies first began offering always on “broadband” services using existing infrastructure starting in the late 1990s and early 2000s. It was offered not as a general telecommunications service, but as a premium “high speed” add on service in highly localized “footprints” in urban, suburban, exurban and rural areas compatible with their business models. Those models generally require capital build costs to be recovered in five years or less.

These highly granular "footprints" and the redlined areas outside of them -- passed over due to long durations to ROI and insufficient profit potential relative to the cost of building out infrastructure – cannot be compared to the large rural regions that lacked electrical and telephone service in the early 20th century. Consequently, building out advanced telecommunications infrastructure in the 21st century cannot be undertaken with a 1920s or 1930s perspective, framing it simply as a “rural broadband” issue.

Hence, the inability of “rural broadband” subsidy programs to close the gaps. Rural electrification and telephone subsidy programs were the right approach for their time. But that context does not easily translate to the complexities of modern advanced telecommunications infrastructure. Other factors beyond rurality come into play such as the number of occupied premises per mile of landline infrastructure and average income levels. The former trumps the latter as many high income homeowners in exurban areas without access to landline service can attest.

Legacy incumbent phone companies propaganda canard: Describing a duopoly as "intensely competitive"

Broadband Deployment & Competition Growing: Dedicated Federal Funding Needed to Close Digital Divide | USTelecom: U.S. Broadband Deployment Is Intensely Competitive. Our analysis also examines broadband deployment from the perspective of competition, which is not a focal area for the FCC’s legislatively mandated deployment analysis. U.S. providers have been deploying broadband infrastructure using a range of technologies for more than two decades. As a result, basic underlying competitive infrastructure from multiple providers is available in the vast majority of the country. On top of this foundational infrastructure, broadband providers invest tens of billions of dollars annually to upgrade networks with enhanced technologies, driving a competitive process of ever-expanding network capabilities The data indicate that competitive deployment is strong and growing, even at higher speeds. As of year-end 2016, 97 percent of Americans had at least one wired broadband network platform available to them and 86 percent had at least two wired options. Competitive availability – defined narrowly as at least two wired providers – at 25 megabits per second (mbps) download (DL) and 3 mbps upload (UL) was 50 percent at year-end 2016, up from 31 percent at year-end 2014 and 25 percent at year-end 2012. (Emphasis added).

Claiming that having a choice among two sellers constitutes an "intensely competitive market" is ludicrous. But that assertion is not to be taken literally on its face. The true intent of this propaganda from legacy incumbent telephone companies is to drive a perception that the line delivering telecommunications service to customer premises is somehow fundamentally different from the line that delivered voice telephone service decades before. True, advanced digital telecommunications can deliver data and video as well as voice. But that capability does not fundamentally alter the fact that a single line of fiber can deliver them all just as a copper one did for voice as well as optional custom calling services that came later.

The real goal of this cynical propaganda is to deceive public policymakers into thinking America's telecommunications infrastructure deficiencies can be solved by market forces. That may be true in a competitive market defined as one with many sellers and buyers with relatively equal access to quality and costs. It's certainly not the case for telecommunications infrastructure. Moreover, if market forces truly operated in telecommunications infrastructure, they would drive down deployment costs, making it more widely available on favorable terms to the millions of customers who use it and eliminate persistent infrastructure deficits.