America's $200 billion broadband boondoggle

Robert X. Cringely explains what went wrong with the federal Telecommunications Act of 1996 and why the U.S. is falling farther and farther behind the rest of the developed world when it comes to broadband Internet access:

There are no good guys in this story. Misguided and incompetent regulation combined with utilities that found ways to game the system resulted in what had been the best communication system in the world becoming just so-so, though very profitable. We as consumers were consistently sold ideas that were impractical only to have those be replaced later by less-ambitious technologies that, in turn, were still under-delivered. Congress set mandates then provided little or no oversight. The FCC was (and probably still is) managed for the benefit of the companies and their lobbyists, not for you and me. And the upshot is that I could move to Japan and pay $14 per month for 100-megabit-per-second Internet service but I can't do that here and will probably never be able to.

Despite this, the FCC says America has the highest broadband deployment rate in the world and President Bush has set a goal of having broadband available to every U.S. home by the end of this year. What have these guys been smoking? Nothing, actually, they simply redefined "broadband" as any Internet service with a download speed of 200 kilobits per second or better. That's less than one percent the target speed set in 1994 that we were supposed to have achieved by 2000 under regulations that still remain in place.

Mass. telecom czar: Broadband black holes "unacceptable"

Q You just took the helm of the new Department of Telecommunications and Cable. What is the plan?

A I have three hot priorities, one of which is broadband. The idea that in the 21st century we still have communities with no broadband is just unacceptable, and we have to fix it.

Connecticut AG wants to force AT&T to serve entire state with IPTV

Now here's a turnabout. Over the past two years, AT&T has lobbied states for laws that allow them to go around local governments and get statewide "video franchises." Looking out for their constituents, most local governments (unlike El Dorado County, California) naturally want advanced broadband telecommunications services including video available for all of their residents. But Ma Bell and other telcos -- as well as the cable companies -- instead want to pick and choose winners and losers when it comes to determining who will get service.

Connecticut isn't one of the two dozen or so states that put a statewide franchise law on the books. Nevertheless State Attorney General Richard Blumenthal worries that AT&T will work with the locals to leave much of the state on the wrong side of the digital divide and has petitioned the state's Department of Public Utility Control urging it to require Ma Bell to get a statewide franchise.

"Because AT&T serves virtually the entire state, the company needs to apply for a statewide license requiring it to eventually provide IPTV (Internet Protocol Television) service to all households, Blumenthal said in a press release. AT&T, which already offers IPTV in a few communities, had wanted to provide the service without state regulation and only in selected areas, according to Blumenthal's office.

Don't let the references to cable or video franchises and IPTV confuse the main issue. This issue isn't about TV or video competition. It's all about broadband buildout and closing the widespread digital divide.

Clearwire is missing market opportunity to fill in broadband black holes

A couple of weeks back, I blogged that the big WiMAX players like Clearwire aren't likely to fill in America's many broadband black holes where neither cable nor telco broadband is available.

Here's more evidence: The Tennessean.com reports today Clearwire is sticking to more populated areas of Nashville. There are more customers to be had there of course but there's also lots of broadband competition from the wireline telco and cable broadband providers. While there are fewer prospective subscribers outside the city limits, Clearwire shouldn't neglect these areas since they face little competition other than satellite Internet, which it can easily outperform from a price/performance standpoint.

Read this lamentation from one prospective Clearwire subscriber who like your blogger is situated on the dark side of the digital divide by only about a mile:

One group of people who may be disappointed with Clearwire is rural residents who don't have access to broadband through AT&T or Comcast. Clearwire is sticking mostly to major population centers in the Nashville area with its service.

George Reynolds hopes Clearwire gets to his house in west Nashville on the Cumberland River.

"Broadband is available on Charlotte (Avenue) and that's one mile from my house,'' he said, adding that he has been trying to get AT&T to give him broadband service for about three years.

AT&T rolls out WiMAX in Alaska -- could it be harbinger of broad-based fixed wireless expansion?

As part of its "commitment to broadband innovation," AT&T announced today it is deploying fixed terrestrial wireless broadband service in Alaska this year, starting in the Juneau area. Throughout the U.S, AT&T says it has deployed 22 fixed terrestrial wireless trials and "limited deployments" in U.S. communities to date, of which eight ended up as "active commercial deployments." According to AT&T's news release:

The new service uses WiMAX wireless technology, which enables delivery of broadband services to homes and small businesses with speeds that are similar to landline technologies such as DSL. With a range of up to several miles from a central tower, WiMAX technology is emerging as an alternative broadband solution for a range of locations where deployment of landline-based technologies is impractical or impossible.

Initial deployments of WiMAX technology in Alaska will be used to provide portable wireless broadband for home and business-based access, enabling users to plug in to the service at multiple home or work locations within the service's range. As mobile WiMAX technology advances, the company will evaluate options to enable additional roaming and mobility service options for customers.

While comparing throughput speeds to DSL, AT&T did not provide actual numbers. The company appears to be pricing the wireless service similarly to DSL, stating in the news release that monthly rates start at $19.95.

This announcement out of Alaska could have implications for the lower 48 states. While apparently the company is still working out the bugs, it appears probable AT&T could ramp up its fixed terrestrial wireless broadband in order to give it another alternative to offer broadband to residential customers. AT&T clearly needs another delivery option to bring broadband to residential and home office customers outside of the limited urban areas where it's deploying its new hybrid fiber and copper U-Verse broadband IPTV (Internet Protocol TV) infrastructure.

Weak DSL signals degrade once they travel more than 14,000 feet from an AT&T central office and the company has reportedly stopped installing additional remote terminals to boost DSL beyond the 14,000 foot limit. That means those who don't already get AT&T's DSL aren't likely to be offered it in the future.

Beyond the 14,000 foot DSL limit, I suspect AT&T is finding there's not as much demand as it would like for its repackaged satellite Internet service, WildBlue. That's hardly surprising given customers are locked into a one year contract for slow throughput, high latency, steep upfront costs and a poor overall value compared to other broadband technologies.

Massachusetts launches bond-funded broadband initiative

The Boston Globe reports today that the Massachusetts Broadband Incentive Plan will be funded by $25 million in general obligation bonds to bring broadband to 32 Bay State communities that lack access to cable or DSL service.

It will be managed by a new division within the Massachusetts Technology Collaborative and is designed to create a new incentive for private industry by underwriting part of the costs of providing service in rural areas. Ultimately, administration officials hope public/private partnerships will be formed to provide service, according to the Globe.

White Spaces prototypes fail initial FCC testing

As reported on this blog some months ago, the Federal Communications Commission has been testing a prototype device developed by the White Spaces Coalition that uses different transmission technology to beam ultra-fast wireless broadband via unused "white spaces" in the TV broadcast spectrum between 44 MHz and 885 MHz. The coalition is comprised of Dell, EarthLink, Google, HP, Intel, Microsoft, and Philips Electronics.

A major objective of the testing is to determine if the prototype would interfere with TV signals and wireless microphones. Two prototypes tested apparently do enough of the time that the FCC told the coalition to go back to the drawing board:

This report determined that the sample prototype White Space Devices submitted to the Commission for initial evaluation do not consistently sense or detect TV broadcast or wireless microphone signals. Our tests also found that the transmitter in the prototype device is capable of causing interference to TV broadcasting and wireless microphones. However, several features that are contemplated as possible options to minimize the interference potential of WSDs, such as dynamic power control and adjustment of power levels based on signal levels in adjacent bands, are not implemented in the prototype devices that were provided. Given these results, further testing of these devices was not deemed appropriate at this time.

FCC Commissioner Copps: 700MHz spectrum auction rules stymie broadband competition

America’s broadband performance leaves a lot to be desired. To me, the culprit is clear: a stultifying lack of competition in the broadband market, which in the words of the
Congressional Research Service is a plain old “cable and telephone . . . duopoly.” A 22 MHz block of 700 MHz spectrum is uniquely suited to provide a broadband alternative, with speeds and prices that beat current DSL and cable modem offerings. Maybe this can happen yet in this spectrum, but by declining to impose a wholesale requirement on the 22 MHz C-block, the Commission misses an important opportunity to bring a robust and badly-needed third broadband pipe into American homes.

Ohio governor issues executive order to expand state broadband network

The order directs the Ohio Broadband Council to coordinate efforts to extend access to the Broadband Ohio Network to every county in Ohio. And the order allows public and private entities to tap into the Broadband Ohio Network – all with a goal of expanding access to high-speed internet service in parts of the state that presently don’t have such service.

“Ohio’s economic future relies on our ability to compete in a high-speed, high-tech global marketplace,” Strickland said. “The Ohio Broadband Council will partner with the public and private sectors to help make sure that every Ohioan has viable access to affordable, high-speed internet service, regardless of where they live, work or learn.”

Covad reaches interim line sharing agreement with AT&T

Covad Communications, a publicly-traded Competitive Local Exchange Carrier (CLEC), announced today it has reached an interim line sharing agreement with AT&T.

Covad says the agreement provides access to AT&T's copper plant through May 2009 including the former BellSouth territory acquired by AT&T at the start of the year. Covad and AT&T also resolved a number of disputes that Covad declined to disclose.

A spokesman for the San Jose-based Covad said the company will attempt to negotiate a successor agreement before the expiration of the interim deal reached this week to assure line sharing with AT&T remains in place.

"If Covad and AT&T are unable to reach such an agreement by May 1, 2009, then Covad can no longer order line sharing under the commercial agreement for new customers," wrote Michael Doherty, Covad's vice president for corporate communications. He added Covad "would have the right in that event to seek access to line sharing through regulatory and legal avenues."

This development signals Covad is reaching the end of the line with AT&T, most likely because AT&T won't be extending its digital subscriber line (DSL) infrastructure beyond its current footprint, leaving Covad little opportunity to gain new DSL customers.

White Spaces Coalition device could compete with satellite, cable and telco TV

Earlier this year, the White Spaces Coalition, comprised of Dell, EarthLink, Google, HP, Intel, Microsoft, and Philips Electronics, submitted a prototype wireless broadband device to be tested by the Federal Communications Commission. The device would utilize unused portions of the television broadcast spectrum, 2MHz to 698MHz. Like current TV signals, it would penetrate structures.

The coalition is hoping to have the device approved for use when analog TV broadcasts cease in February 2009 in favor of digital transmission.

The coalition's device reportedly has the potential to deliver download speeds approaching 80Mps. That means it could not only compete with and blow away much of existing wireline broadband providers -- with the exception of Verizon's FiOS -- it could also pose a threat to TV providers -- satellite, cable and telco TV -- if the FCC approved the technology for transmission of digital TV signals. At 80Mbs, there's sufficient bandwidth to transport multiple high definition TV channels.

FCC Commissioner: "We need to make broadband the dial tone of the 21st Century."

Kudos to Federal Communications Commissioner Jonathan S. Adelstein for these remarks excerpted from his written testimony to the House Energy and Commerce Committee's Subcommittee on Telecommunications and the Internet. It's refreshing to hear a positive, let's get it done attitude in contrast to the pathetic, defeatist whining and foot dragging from the telco/cable duopoly:

We need to make broadband the dial-tone of the 21st Century.

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Some have argued that the reason we have fallen so far in the international broadband rankings is that we are a more rural country than many of those ahead of us. Even if that is the case, and since geography is destiny and we cannot change ours, rather than merely curse the difficulty of addressing rural communications challenges, we should redouble our efforts and get down to the business of addressing and overcoming them.

I am concerned that the lack of a comprehensive broadband communications deployment plan is one of the reasons that the U.S. is increasingly falling further behind our global competitors. Virtually every other developed country has implemented a national broadband strategy. This must become a greater national priority for America than it is now.

Why Verizon opted for fiber over DSL

Verizon’s Chief Technology Officer, Mark Wegleitner, explains in an interview with CNET News.com:

“I wouldn’t say that AT&T has gotten it wrong. DSL is a good technology,” he noted. “Our concern was more about what happens a few years out. And that’s why we picked fiber … I can’t really predict how other technologies will grow, but we know that fiber gave us the headroom we needed.”

Report: American consumers trapped in stagnant duopolistic broadband market

The United States has a broadband problem. All of the excuses offered to explain away America’s performance on the international broadband stage are just that: excuses. The fact is that many countries continue to deploy and adopt broadband at a higher level than in America. Consumers in these countries pay far less for far more service, and have many more marketplace choices.

American consumers are trapped in a duopoly marketplace with no relief in sight. The boasts of “third-pipe” competition from wireless providers ring hollow, as the offerings from these companies are slow, expensive, and extremely restrictive, making them unattractive as a true competitor to the current duopoly.

Incumbents argue that the marketplace will save our sinking ship, even as the water level rises. This blind faith in the market would be reasonable if the U.S. telecommunications market was perfectly competitive. But it simply is not, and it’s high time to face reality.

We rely on the market forces of a duopoly to produce robust cross-platform competition at our peril. When the chief supporters of the status quo, wait-and-see approach to the arrival of a third competitor to DSL and cable are the incumbents themselves, we should understand that they do not expect it will happen.

Big WiMAX players unlikely to fill in broadband black holes

There's more evidence the big wireless players making WiMAX plays aren't going to fill in broadband black holes that commonly exist outside of heavily populated regions.

Some observers have held out hope that wireless providers would provide the long awaited broadband solution to less urban areas that are underserved by the wireline telco/cable duopoly. Instead, the big guys like Clearwire are concentrating on serving mobile consumers in big metro areas shown by this announcement today that Clearwire Sprint Nextel have signed a letter of intent to jointly construct America’s first nationwide mobile WiMAX network.

The key word here is "mobile." In short, that doesn't mean residential consumers who remain mired in broadband black holes across much of America. Their wireless option for now is going to continue to remain among the 1,500 or so small wireless Internet service providers (WISPs) that provide fixed terrestrial service.

That is unless a high powered coalition is successful in demonstrating a prototype service called white space broadband that would deliver wireless broadband over unused portions of the television broadcast spectrum.

White space broadband seen more feasible for rural vs. urban wireless broadband

Blogger Jacob Levin of the Washington-based advocacy group Public Knowledge isn't bullish on so-called white space wireless broadband as a way around the wireline telco/cable duopoly on broadband access. But Levin does see white space broadband, which would harness unused or "white space" of the television broadcast frequency spectrum to transmit broadband signals, as having real benefit in less densely populated areas:

While I can’t say all the ways white space will be used, I can say how it probably won’t be: it will not be used to provide the third pipe that will finally break open the last mile bottleneck, thus reclaiming the internet from the ISP gatekeepers and ensuring a dynamic, innovative and generally neutral net. White space may be used to provide last mile wireless Internet connectivity at speeds comparable to DSL and cable, but only in rural areas where broadband competition is worse than the oligopoly city dwellers suffer under. The data transfer speed over white space is closely related to the amount of spectrum available and the number of users. As this study shows, there are vacant channels everywhere, but there are more vacant channels in areas with less population density due to the smaller demand for broadcast licenses in those areas. Because of the great amount of spectrum available, and the small number of people who will be using the spectrum, it is likely that rural wireless ISPs will try using the white space to provide broadband.

Local governments in federal courts to block telcos' end run to the FCC

Telcos adamant to avoid local government broadband infrastructure build out requirements went to Congress last year seeking legislation preempting local government authority to award "video franchises" and place it in the hands of the feds.

When that failed, the telcos then directed their efforts at state legislatures to get the locals off their backs. They have been successful in at least a dozen states, getting legislation with limited build out requirements that allow them to bypass local areas they don't want to serve, effectively making the digital divide law.

The telcos apparently want to buy insurance at the federal level despite their failure to get Congress to go along. So they're doing an end run around Congress by going to the Federal Communications Commission. Earlier this year, the FCC went along with them and promulgated regulations barring local governments from requiring telcos to build out their broadband infrastructure to serve an entire community and also giving the locals a short time frame to act on telco applications for franchises.

Not so fast, a coalition of local government and non-profit groups say. This week, they filed briefs in the U.S. Court of Appeals for the Sixth Circuit arguing the FCC lacks statutory to do so since the telcos failed to get federal legislation enacted last year.