Ma Bell tells El Dorado County: Go suck a satellite

Ma Bell has stiff armed much of El Dorado County clamoring for her to upgrade her aged and near obsolete copper cable plant to fiber optic to support improved voice service and wire line broadband Internet access. (See petition to AT&T)

Readers of this blog may recall the "Gut Check Time for Ma Bell" post on May 24 that included a link to AT&T's news release issued that day announcing the rollout of satellite-based broadband Internet service in AT&T's 13-state service area in a reseller arrangement with a satellite Internet service provider.

At that time, it wasn't clear if the service would be offered in El Dorado County. Now it's clear that it is: Direct mail postcards from AT&T pitching the satellite service have begun to hit El Dorado County mailboxes.

I expect many county residents and businesses aren't going to get excited over the service since they've long had the ability to go with satellite Internet providers at prices and speeds comparable to AT&T's offer. They're comfortable getting TV by satellite, but getting a second dish for Internet access? And after all, this is the Sacramento metro region, not the remote stretches of North Dakota or Alaska. Will we next have to get satellite phone service when the copper wire line system gives up the ghost?

By rolling out inferior satellite-based broadband (which by the way can't support voice over Internet protocol or gaming and lacks future growth capacity), AT&T is signalling it has no intention to upgrade its aged, antiquated El Dorado County wire line infrastructure anytime soon despite AT&T flackery in the Sacramento Bee in April promising county residents a number of broadband options by year end.

Bottom line, this is an unacceptable cop out. It's time for Ma Bell to decide if she really wants to be in the telecommunications business in El Dorado County or just another reseller like a Best Buy or Radio Shack, offering a service inferior to what she herself could provide. If she doesn't want to be here and serve El Dorado County's current and future telecom needs, then she needs to get out of the market and make way for other players who will.

Cable companies, telcos now in accord on state wire line TV franchises

Things are happening fast in Sacramento on legislation that would preempt local goverment jurisdiction over cable TV franchises and give it to the California Public Utilities Commission. The cable TV companies opposed the telco-proposed legislation fearing it would keep them under more restrictive local regulation while allowing the telcos to enter their markets under a less restrictive state franchise system.

John Hill reports in today's Sacramento Bee that the telcos and cable companies are now in accord over an amended version of the legislation that would permit both telcos and cables to opt out of local government control in favor of a PUC-issued franchise.

El Dorado County residents stuck on the wrong side of the digital divide with no broadband services likely care little about the regulatory rules. What's relevant for them is service choices and getting those choices ASAP.

Back to the future: U.S. Supreme Court accepts telco antitrust case

Many readers likely remember when AT&T agreed to be broken up into several regional, independent operating companies in 1984 under a consent degree to settle a federal anti-trust case.

When the feds splintered Ma Bell's progeny and cast them to the winds, they created a bunch of smaller monopolies in the process of breaking up a big one, plaintiffs allege in an anti-trust action that contends the regional operating companies are engaging in anti-competitive market conduct by agreeing to stay out of each other's territories.

The New York Times (registration required) reports today the U.S. Supreme Court has accepted the case, setting the stage for one of the new court's most far reaching decisions. The Times reports the case, Bell Atlantic v. Twombly, No. 05-1126, will be heard in the Supreme Court's next term which begins in October.

Regulatory uncertainty creates "double play" opportunity for Comcast expansion

As the big telcos including AT&T and Verizon battle it out in Sacramento with the cable companies over legislation that would preempt local government cable TV franchising authority, the cable companies have an opportunity under the current rules to expand and grab market share from the telcos.

In El Dorado County, Comcast is the franchisee. If Comcast's executives were smart and aggressive, they would put the pedal to the metal and dramatically expand in the county while AT&T is distracted down in River City fighting for the right to go around county authorities with a state authorized franchise. It's a strategy right out of the 1980s business bestseller In Search of Excellence that advised a bias for action to gain competitive market advantage.

Earlier this month, this blog reported Comcast plans to launch digital phone service across central California from Chico to Fresno as early as first-quarter 2007. Digital phone service -- and most certainly high speed Internet -- would likely be wholeheartedly embraced by El Dorado County residents who have for years experienced noisy and unreliable voice service over AT&T's aging copper cable plant and who lack broadband access to boot.

It's a compelling double play opportunity that Comcast could play out under the county franchise agreement provided both the county and Comcast waive a provision in the agreement requiring new subscribers outside Comcast's current service area to subsidize expansion costs. And it would likely produce a high take rate and rapidly expand Comcast's customer base in the county.

Comcast should step up to the plate and take advantage of the political uncertainty distracting its would be competitors now that Comcast going into full telco mode and expanding beyond its core entertainment service business model. A "triple play" bonus would be Comcast's ability to sell these newly acquired "double play" customers television programming services.

No fiber optic in Pleasant Valley: Just a conduit

A reader reports from the field: Fiber optic cable is being placed in the trench for the El Dorado Irrigation District's Pleasant Oak water main replacement project.

EID clarifies: No fiber is being installed -- just a conduit for possible future fiber optic cable deployment.

I guess that's a start. But I'm sure Pleasant Valley and Sly Park area residents and businesses would prefer the whole fiber enchilada now so they can get out of dial up hell and also enjoy reliable and high quality voice telephone service.

May 2006: 72% of U.S. households with Internet used broadband connections

That's according to the results of a Nielsen//NetRatings survey reported today in Adweek. The survey found the 72 percent figure is up 15 percentage points compared to May 2005 (57 percent). New broadband users tend to be former dial-up users, as dial-up penetration dropped by 15 percentage points over the same period of time, going from 43 percent to 28 percent.

Much of El Dorado County continues to bring up the rear, stuck in the 28 percent category not out of a preference for dial up, but for lack of broadband Internet access. For too many in the county, it's still Al Gore's Internet, frozen in time where it stood when Gore assumed the vice presidency in 1993 and dial up was the only way to get Internet access.

Writer suggests threat of eminent domain to spur telcos, cable companies to compete

Maybe the incumbent network providers--the Verizons, Comcasts, AT&Ts--can be made to compete; threatening to seize their stagnating networks via eminent domain is just one creative idea to get them to do this. A truly competitive, non-neutral network could work, but only if we know its real economic value. If telcos or cable charge too much, someone should be in a position to steal the customer. Maybe then we'd see useful services and a better Internet. Sounds like capitalism.

Andy Kessler in The Weekly Standard.

In the public policy realm, this is what would be known as the nuclear option -- a final, overwhelming and extreme solution. Local governments have a number of interim measures they can take to encourage preferred outcomes to serve the best interests of the citizenry or discourage those things deemed harmful to the public interest.

As Mr. Kessler notes, in the wake of the U.S. Supreme Court's recent Kelo ruling upholding local governments' broad authority to exercise eminent domain in the name of economic progress, it wouldn't be a major leap of logic to argue that just as governments exercise emiment domain to acquire rights of way for roads and highways, they might also do the same for telecommunications systems.

Just like roads and highways, these systems are key infrastructure vital to a community's economic health and well being and therefore, it could be reasonably argued, the public interest in them outweighs the financial interests of those who own them.

Local governments throughout the U.S. have already gone into direct competition with telcos and cable companies with their own municipal broadband systems. Perhaps in the post Kelo environment, they'll also begin to consider forming telecommunications redevelopment agencies to take over aging phone and cable systems. A key advantage to this strategy is that it eliminates an entrenched monopolistic provider that refuses to upgrade its systems to make broadband widely available, but by its very presence casts a chilling effect on the market, discouraging the entry of competitors.