Analysis & commentary on America's troubled transition from analog telephone service to digital advanced telecommunications and associated infrastructure deficits.
Tuesday, March 06, 2007
Municipal fiber in the heart of Silicon Valley
But as a recent item on this blog showed, that's not necessarily the case. Much to his surprise, BusinessWeek's Silicon Valley bureau chief recently moved to a new home on the wrong side of the digital divide, smack dab in Palo Alto. So it's no wonder the Palo Alto City Council is moving forward with plans to construct a city wide fiber optic system. According to this story, Palo Alto may be the first city in the Golden State to do so.
FCC rules local governments cannot impose build out requirements on telcos
Here's a relevant excerpt from the 109-page order:
32. The record demonstrates that build-out requirements can substantially reduce competitive entry. Numerous commenters urge the Commission to prohibit LFAs from imposing any build-out requirements, and particularly universal build-out requirements. They argue that imposition of such mandates, rather than resulting in the increased service throughout the franchise area that LFAs desire, will cause potential new entrants to simply refrain from entering the market at all. They argue that even build-out provisions that do not require deployment throughout an entire franchise area may prevent a prospective new entrant from offering service.
33. The record contains numerous examples of build-out requirements at the local level that resulted in delayed entry, no entry, or failed entry. A consortium of California communities demanded that Verizon build out to every household in each community before Verizon would be allowed to offer service to any community, even though large parts of the communities fell outside of Verizon’s telephone service area. Furthermore, Qwest has withdrawn franchise applications in eight communities due to build-out requirements. In each case, Qwest determined that entering into a franchise agreement that mandates universal build-out would not be economically feasible.
Sunday, March 04, 2007
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.
Friday, March 02, 2007
Silicon Valley startup has big plans for wireless broadband coverage
Wisconsin offers tax incentives for broadband infrastructure investment
California PUC a toothless watchdog on broadband access
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.