Analysis & commentary on America's troubled transition from analog telephone service to digital advanced telecommunications and associated infrastructure deficits.
Sunday, May 02, 2010
California legislation would expand subsidy program
The California Advanced Services Fund (CASF) was established by the California Public Utilities Commission in December 2007 to subsidize advanced telecom infrastructure in high cost unserved and underserved areas of the state. Up to $100 million was allocated from a 25 percent surcharge on intrastate long distance calls, with the CASF surcharge offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service.
SB 1040 would leave the CASF in place indefinitely and expand its budget to $250 million with up to $25 million available in any given fiscal year. The urgency measure also liberalizes the use of CASF funds. To subsidize broadband infrastructure construction, $20 million would be allocated to grants and $3 million for loans.
One of the most important elements would be a new Regional Broadband Consortia Grant Account that earmarks $2 million in technical assistance grants to fund the cost of broadband deployment activities other than actual infrastructure construction. The money would be available to a wide variety of groups including local and regional governments, schools and colleges, health care providers, libraries and community-based organizations.
This is a critical element of the bill since many such entities that were interested in applying for broadband infrastructure grants and loans appropriated in the American Recovery and Reinvestment Act of 2009 lacked adequate funding to retain experts to help them with the engineering and business planning work needed in order to prepare project proposals.
A California Senate floor analysis of SB 1040 notes the Senate Energy, Utilities and Communications Committee was told at a Feb. 16 hearing that four percent of Californians - 1.4 million people in mostly rural areas, do not have access to broadband service. Only about half of Californians have Internet access at speeds meeting the CPUC's definition of basic broadband of 3 Mbs down and 1 Mbs up.
SB 1040 is advancing without opposition and would become law immediately after being signed by the governor. The CPUC would then open a rulemaking proceeding to implement the new CASF provisions later this year.
Sunday, April 25, 2010
Another downside to legacy copper plant: cable thieves
Saturday, April 24, 2010
Paradigm shift in telecommunications underway
The FCC's current regulatory framework is more oriented toward PSTN than the Internet that is rapidly replacing it. It too is growing outmoded, leaving regulators struggling to devise a successor.
And as FCC Chairman Julius Genachowski has noted, the FCC also faces a major challenge in figuring out how to best address market failure that has left at least seven million U.S. households offline according to the FCC's own estimates. At a time when the PSTN is replaced by the Internet, if you don't have an "always on" terrestrial Internet connection, you don't have modern telecommunications service. As PSTN becomes obsolete, so does the PSTN means of Internet connectivity: dialup access that was state of the art nearly two decades ago.
This is truly a time of major transition in telecommunications. As with any major shift, there will be a tension between those who want to hang on to the old paradigm -- in this case the legacy single purpose "telephone" and "cable" companies whose business models are based on billing for incremental services delivered over closed, proprietary networks -- and those who want speed the shift toward alternative business models based on open access IP-based networks.
Friday, April 16, 2010
Fed up with circular debate over telecom market failure, British village acts to get broadband
While the UK government (just like America's) engages in a ridiculous circular debate over whether market failure has hampered the deployment of modern telecommunications infrastructure, the residents of Lyddington, Rutland have cried "bullocks!"and taken matters into their own hands.
No debate over market failure there, where according to this Telegraph article their petitions to the incumbent providers to bring them broadband got them nothing. So several local businesses are investing fiber optic cable that will bring the townspeople connectivity of 40 Mbs for £30 a month.
A key excerpt:
Dr Charles Trotman, head of rural business development at the Country Land and Business Association welcomed the project.
But he warned that not all local communities will be able to do it themselves and the next Government must put in place measures to ensure the whole country has superfast broadband.
"You cannot rely on the markets to do it because we know for a fact that large telecommunication companies will not invest in rural areas because there is no market return. If they are not willing to do it then someone has to do it and you have to have a central strategy set by Government"
Wednesday, April 14, 2010
FCC National Broadband Plan lacks sense of urgency
Particularly considering that according to an FCC estimate released when the plan was unveiled last month, 7 million U.S. homes are offline because they are located outside cable company footprints or unable to subscribe to DSL due to distance limitations. Last October, the Yankee Group estimated about 12 percent of U.S. households, including those in some major metropolitan areas, have no access to broadband service.
That's a big infrastructure problem reflecting the fact that the United States is easily a decade behind where it should be considering the rapid growth of the Internet and next generation, Internet-protocol based telecommunications.
Rockefeller's message to the FCC is a problem of this magnitude requires a sense of urgency to bridge the digital divide. I agree with him. As a representative of a state with sizable rural areas, Rockefeller wants the FCC to focus its plan on rural America where IP-based telecom infrastructure is the weakest and least developed.
I would include many metro areas as well, particularly neighborhoods where housing density and topography don't allow legacy wireline cable and telcos to profitably build out their systems. As I have stated repeatedly, the FCC's plan should help alternative entities such as nonprofit coops start up to rapidly construct this critical infrastructure where the legacy providers cannot afford to do so.
Friday, April 09, 2010
FCC's National Broadband Plan needs bottom up incentives to bridge last mile
The FCC's plan sets a goal of providing at least 100 million homes access with download speeds of at least 100 Mbs per second and upload speeds of at least 50 Mbs per second by 2020. In an interim report released in September, the FCC estimated reaching the "100/100" goal would cost as much as $350 billion.
The "100/100" goal is laudable. But a more pressing infrastructure shortfall now mires millions in the early 1990s with dialup access or subpar satellite Internet access that's a national embarrassment that should only be offered in Alaska or the north woods of Maine. The FCC report estimates bridging that gap would require existing providers to spend $24 billion on upgraded and expanded infrastructure. Investor-owned legacy providers aren't going to spend that kind of money. So the FCC proposes remaking the Universal Service Fund and other programs designed to subsidize legacy voice telephone service in high cost areas into the Connect America Fund (CAF). Recognizing this would yield just $15.5 billion over the next decade, the FCC's plan also calls on Congress to appropriate additional subsidies of a "few billion dollars" annually over the next 2-3 years to accelerate construction of advanced telecommunications infrastructure.
The weakness of the FCC's plan is that it relies too much on investor-owned telco and cable providers already burdened with outdated, legacy wire plant and the inherent limitations of their for-profit business models. These providers must naturally place their proprietary business interests ahead of any national goal for transitioning the nation's currently outmoded telecommunications infrastructure to one that delivers a range of Internet-protocol based services via fiber over the last mile. Consider, for example, that neither of the nation's largest telcos are currently expanding their own plants to bring fiber to customer premises. AT&T has except for some greenfield developments chosen to build out fiber only to neighborhood nodes, relying on legacy copper wire connections to reach customers. Verizon recently called a halt to further expansion of its FiOS fiber to the premises plant.
While the FCC's plan urges Congress to boost funding of the Rural Utilities Service's Community Connect program intended to provide funding for broadband to communities that are otherwise unserved, it doesn't go far enough. Instead of largely relying legacy providers to build out advanced telecom infrastructure from the top down to reach the last mile, it really needs to provide incentives that work from the bottom up.
One that holds promise is giving home and small business owners tax breaks to build their own last mile fiber much like current tax law provides incentives for solar power generation equipment. Tax breaks for properties with fiber "tails" as they were described in a November 2008 paper issued by the New America Foundation would help local governments and telecom cooperatives build fiber infrastructure since the tax savings would make it easier for property owners to pay fees for connection costs or fund coop memberships. Building out broadband infrastructure is primarily a business model problem. Providing tax credits for fiber "tails" would provide impetus to urgently needed alternative business models for modernizing America's telecom infrastructure.
Friday, April 02, 2010
The view from the UK: America's "lame" "costly" "third-world" telecom infrastructure
As Exhibit A of the U.S. broadband gap, the magazine pointed to the outpouring of supplications to Google urging the company to roll out its experimental 1 Gigabit fiber to the premises telecom infrastructure in their communities.
Much of the article goes on to repeat the same points made elsewhere about the flaws of the U.S. telecom paradigm and the sturm und drang industrialized nations are undergoing as they transition from legacy wireline single purpose systems designed to deliver voice and television signals to fiber optic infrastructures capable of providing multimedia and interactive applications using Internet protocol.
The article closes with a bit of wireless vaporware by suggesting Verizon is abandoning its FiOS fiber to the premises service in favor of Long Term Evolution (LTE) wireless service that could deliver 150Mbs. Perhaps over Starfleet Command's quantum sub-space channel. But not in today's world where people are literally jumping into freezing lakes in hopes of getting Google to deploy real state of the art fiber technology to their homes and businesses.