Content providers could make a big play for the pipes

When television was a relatively new technology, mass communications theorist Marshall McLuhan predicted it would produce an electronic global village linked together by a medium so powerful that the medium itself would be as important as its content. Thus, McLuhan famously pronounced in his 1964 book Understanding Media: The Extensions of Man, “the medium is the message.”

If McLuhan were alive today, he’d surely say the same about Internet and with great emphasis. It’s become such a powerful global medium that it’s threatening to reshape TV itself along with other traditional media outlets such as radio and print publications. Because the Internet can transport all forms of communication and do so interactively, it’s arguably McLuhan’s uber medium. It’s no wonder that newspapers, television and radio are paying homage to the Internet, scrambling to get their content on it.

Given the power of this emerging medium, expect to see content providers to take a greater stake in owning Internet infrastructure directly as cable provider Comcast already does. Last year, News Corp. owner Rupert Murdoch complained about the current patchwork state of Internet access, with large numbers of people unable to obtain broadband connections to the Internet. Murdoch and other media titans could end up making plays for telcos and cable companies to speed broadband deployment in order to reach larger audiences for their content.

If they were joined by big Internet content amalgamators Yahoo! and Google, their economic power would be enormous, able to finance a crash program to upgrade the nation’s infrastructure to support near universal broadband access. It’s also quite conceivable that the debate over network neutrality in which the cable and telcos claim they should be able to charge media content providers for access to their systems (net neutrality advocates say they shouldn’t) could provoke media content providers to launch hostile takeovers of big telcos and cable companies. You want to charge us to use your pipes? Forget about it; we want those pipes!

Telcos like Verizon that are putting in fiber optic based systems that offer adequate bandwidth to easily carry all types of Internet content now and in the near future will likely be the most attractive takeover targets. By contrast, AT&T’s strategy utilizing both fiber and its legacy copper cable plant could make it a less attractive target for a media company. But Ma Bell would certainly have to be on the list by virtue of her sheer size and ownership of vast swaths of the nation’s Internet infrastructure.

Silicon Valley startup has big plans for wireless broadband coverage

This venture capital-backed Silicon Valley startup was mentioned on this blog about a year ago. M2Z says it will build a nationwide broadband network that will serve one third of the U.S. population within three years, two thirds within five years and 95 percent within ten years.

Wisconsin offers tax incentives for broadband infrastructure investment

Wisconsin is offering up to $7.5 million in tax incentives to companies that will make investments, over the next two years, in equipment designed to provide broadband Internet availability to unserved or underserved areas of the state.

California PUC a toothless watchdog on broadband access

The California Public Utilities Commission announced it's accepting applications from broadband providers seeking statewide franchises under the Digital Infrastructure and Video Competition Act (AB 2987). The PUC said it will report on broadband availability in California by tracking households by census tract to determine which have broadband access and/or subscribe to broadband services. The PUC also said it would be "a vigilant watchdog in ensuring that this critical upgrade to the state's communication infrastructure reaches consumers of all income levels."

While the PUC's support for universal broadband access is laudable, AB 2987 doesn't give it the teeth to be that vigilant watchdog. The big telcos and cable companies aren't required by the legislation to build out their systems in order to offer broadband to all Californians. Instead, they are required to offer broadband to only half or less of their service areas by 2012 -- and there are are loopholes that reduce that requirement. The PUC can bark and snarl, but it has no bite when it comes to bridging California's digital divide, which by the way has little to do with a household's income but rather its location.

Verizon earns analyst plaudits for upgrading copper to fiber

Verizon paid a short term share price for committing itself to replace copper cable endangered with obsolescence by skyrocketing digital bandwidth demand. But the telco is earning high marks from industry analysts for adopting its FTTH (Fiber To The Home) strategy that better positions the company in the long term to offer the triple play service package of voice, high speed Internet and video since fiber offers far greater carrying capacity than copper. Local governments also see the long term fiber advantage, with some engaged in public/private partnerships to put in fiber-based systems, particularly in areas where legacy metal wire based systems aren't expected to be replaced with fiber in the foreseeable.

Fiber optic, New England town hall style

Residents of the Vermont towns of Jericho, Underhill and Westford will be polled by their selectboard members on whether the towns should take out a lease to expand fiber optic triple play services provided by Burlington Telecom to their communities.

This is an admirable expression of the American spirit -- folks taking control of their telecommunications destiny instead of hoping and waiting the big telco and cable companies will bring them broadband service.

Virginia legislature appropriates $1.6 million for fiber project

Some states are apparently tired of waiting for the private sector to act and are putting their own money on the line as in this project to build out fiber optic-based broadband for Virginia's Eastern Shore.

California bill would add broadband to lifeline service for low income residences

Sen. Alex Padilla (D-San Fernando) has introduced legislation that would require the California Public Utilities Commission to include broadband Internet access in the state's existing lifeline program that provides discounted POTS to low income households.

With telcos like AT&T offering DSL promo rates for residential customers who can get its underpowered DSL service for as little as $13 a month, Padilla's proposal would certainly appear within the realm of possibilities.

However, public policymakers and residential broadband providers should also consider more flexible pricing strategies that allow providers to cover increased deployment costs in less densely populated portions of their service areas outside of urban centers. As things currently stand, too many residences in these areas must choose between cheap but impractically slow dial up and costly services such as satellite -- more appropriate to extremely remote locations of the U.S. -- and T-1 lines which were never intended for residential customers. There's a price point in the middle for fast, reliable wire line broadband and the providers should offer services to meet it.