Silicon Valley businesses meet on broadband infrastructure needs

Leaders of high tech Silicon Valley companies are growing concerned that the telco/cable duopoly is failing to keep up with their growing Internet bandwidth needs:

These company and city leaders will discuss how to overcome current regional challenges to building a telecommunications system worthy of the region many consider the technology capital of the world. The meeting will be guided by a keynote presentation by Scott McNealy, Chairman and Co-Founder of Sun Microsystems, plus a report by the Bay Area Council, prepared by Bonocore Technology Partners, that reviews what other countries or regions have done to improve their infrastructure, and recommends Bay Area actions.

U.S. wireline broadband expansion hitting the wall

USA Today and many other media outlets are carrying an Associated Press story reporting a study by the Pew Internet and American Life Project shows the rate of broadband growth among American households is slowing sharply. Broadband adoption grew just 12 percent from March 2006 to March of this year compared to the 40 percent rate of the previous 12 months.

John Horrigan, Pew's associate director for research, says providers have picked the low hanging fruit. They now have to make substantial investments in their infrastructure to bring in more broadband customers since many households who don't use wireline broadband can't get it because it's not available.

Their prospects of getting it in the near term don't look good, which could produce even lower broadband adoption numbers when Pew and other think tanks report on broadband growth in 2008.

The results of the Pew study aren't surprising considering that AT&T appears to have all but halted deploying additional equipment necessary to expand its Digital Subscriber Line (DSL) service beyond three miles from the telco's central offices. Those who can't get DSL get pitched to sign up for inferior satellite Internet service via AT&T's reseller deal with WildBlue announced a year ago.

The other big player in the telco/cable duopoly, cable provider Comcast, also doesn't appear to be expanding its footprint in existing neighborhoods, concentrating instead on new home developments seen as good prospects for the company's bundled video, Internet and voice services.

Sierra foothills economic development nonprofit gets federal funding to expand broadband

According to this report in TheUnion.com, the Sierra Economic Development District is getting a $190,000 grant from the USDA Rural Business Enterprise Grant program.

The funds will be loaned to local Internet providers -- in this case apparently Wireless Internet Service Providers or WISPs -- to help extend their services.

Analyst: Telcos no threat to cable

Sanford Bernstein Senior Analyst Craig Moffett opines that cable companies face no near term threat from telcos. Moffett is particularly dismissive of AT&T, which he sees unable to match broadband throughput speeds provided by cable companies and unlikely close the gap. Moffett also echos my own observation earlier this year that customers will find DSL increasingly inadequate as they download higher amounts of video content:

But while AT&T may upgrade 40 percent of its DSL plant to fiber in order to bring faster high-speed data service to its customers, some 60 percent of its network won’t be upgraded, Moffett projects. That means that AT&T will still be competing at a maximum standard DSL bit rate of 768 Kbps while cable operators offer substantially higher bit-rates, a disparity that could become more of a competitive challenge for AT&T as consumers download more video online through services like YouTube.

California Broadband Task Force issues report on state government actions to increase broadband access

Gov. Arnold Schwarzenegger's administration has released the first report of the administration's Broadband Task Force formed late last year. The task force was formed under an executive order issued in October 2006 to "identify and eliminate obstacles to making broadband internet access ubiquitous in the state."

The June 25 report identifies actions state agencies can take to "immediately promote broadband access and usage." As might be expected since it's focused on administrative agency actions, there's little in the report that addresses the fundamental "last mile" problem that leaves many Californians cut off from wireline-based broadband services that aren't offered to them by the telco/cable duopoly.

The task force is due to issue a second report in October that "lays out a vision for California to be the model state where barriers to broadband access and adoption are eliminated."

Falling U.S. broadband penetration rate called "national embarassment"

Newsweek is out with an article reporting the United States has fallen to 15th place among economically developed nations when it comes to the number of households with broadband Internet access.

FCC Commissioner Michael Copps is quoted as calling the findings by the Organization for Economic Cooperation and Development a "national embarrassment."

Copps describes the growing gap between America's broadband haves and have nots as the nation's most recent infrastructure challenge and one that demands rapid action.

"Every generation in America has had an infrastructure challenge. And the response has been canals, turnpikes, railroads and the interstates," he told Newsweek. "But in the 21st century, it seems that no one is looking out for us. We're frittering our future away."

Revamp wireless USF charge to subsidize wireline broadband, Qwest reportedly urges FCC

The Denver Post reports Colorado-based telco Qwest wants the Federal Communications Commission to change the formula for wireless phone surcharges for the Universal Service Fund (USF).

Qwest is proposing that the wireless surcharge be applied on a per household rather than per customer basis. The difference between the two methods is estimated to be around $500 million, which Qwest says should be set aside to subsidize wireline broadband deployment.