Study warns "last mile" congestion will bog down Internet connectivity

If you're mired in a broadband black hole and relegated to slow dial up or sluggish satellite connections, everyone else could be dealing with slow speeds in as little as three years.

A study by Nemertes Research warns unless another $42 billion to $55 billion is spent on U.S. telecommunications infrastructure above and beyond the $72 billion service providers are already planning to invest in the next three to five years, there will be a developing capacity problem.

“This groundbreaking analysis identifies a critical issue facing the Internet – that we must take the necessary steps to build out network capacity or potentially face Internet gridlock that could wreak havoc on Internet services,” said Larry Irving, co-chairman of the Internet Innovation Alliance. “It’s important to note that even if we make the investment necessary between now and 2010, we still might not be prepared for the next killer application or new internet-dependent business like Google or YouTube. The Nemertes study is evidence the exaflood is coming.”

The choke points will occur on the so-called last mile or so that connects businesses and residences to the fast fiber backbone of the Internet. Current in much of the U.S., the last mile infrastructure cannot support any type of broadband connections let alone the coming "exaflood."

AT&T engaged in digital infrastructure redlining, telecom prof says

Barry Orton, a University of Wisconsin at Madison telecommunications professor, says AT&T's actions show the big telco is engaged in digital redlining in Wisconsin.

The Wisconsin State Journal reports AT&T has deployed its fiber-copper hybrid U-verse infrastructure in parts of Racine and Milwaukee. But if the company decides to offer service in Madison or elsewhere, it won't announce the rollout, AT&T spokesman Jeff Bentoff told the newspaper. Rather, Bentoff said, AT&T will contact consumers individually through direct mail and door-to-door visits.
"When it 's available, we 'll let them know, " Bentoff said.

AT&T's rollout strategy shows the big telco wants to select the neighborhoods in which to offer advanced telecommunications services, Orton says, unlike cable agreements with local governments that typically require providers to serve the entire jurisdiction. "That 's what this is fundamentally about -- the ability to cherry-pick neighborhoods, " Orton said.

California study finds "clear connection between investing in broadband technology and job growth"

California stands to gain 1.8 million jobs and $132 billion of new payroll over the next 10 years with a 3.8 percent increase in the utilization of DSL and cable broadband Internet services, according to a study released today by the Sacramento Regional Research Institute (SRRI).

“There is a clear connection between investing in broadband technology and job growth,” said Dr. Kristin Van Gaasbeck, Assistant Professor of Economics at California State University, Sacramento and one of the authors of the report.

The study used statistical models as well as economic and broadband usage data from 2001 through 2005 to analyze 24 major regions of California and project future growth. It projected three levels of annual growth of the percentage of the adult population using broadband: a .2 percent annual increase, 3.8 percent increase and a 7.6 percent increase. Under the latter growth scenario, 2.2 million jobs would be created in the state representing $267 billion in new payroll.

Here are some key excerpts from a summary of the SRRI study:

SRRI’s analysis shows that this migration and the growth in broadband use appears to have had a positive and significant effect on employment and payroll in the state. Economic theory would suggest that increased investment in the deployment and, sequentially, the use of broadband has the potential to generate incremental benefits to many of the state’s regions and California overall.

All regions of the state could benefit from an incremental boost in jobs and total payroll with increased broadband use, but the magnitude depends on the local economic conditions
and unique distribution of Internet connections.

Unfortunately, that unique distribution of Internet connections currently leaves sizable areas of the state without access to cable or DSL broadband. AT&T, which funded the SRRI study and provides the bulk of DSL broadband service in California, bears a large degree of responsibility since it has effectively abandoned these areas, offering them only inferior satellite sub-broadband service, which notably wasn't included in the SSRI study.

Four months ago, a study by the Public Policy Institute of California revealed sharp differences among regions of the state when it comes to broadband access, ranging from under 30 percent of households in the Sierra Nevada (21%) and northern part of the state (29%) to just over 50 percent in the San Francisco Bay Area (51%) and the greater Los Angeles area (52%). The PPIC study recommended the California Emerging Technology Fund should focus on broadband deployment in rural areas.

The SRRI report comes as Gov. Arnold Schwarzenegger's Broadband Task Force nears completion of a one year study to find ways to remove barriers to broadband access, identify opportunities for increased broadband adoption and enable the creation and deployment of new advanced communication technologies.

Reverse regulation and the race to the bottom

This excerpt from the Jackson, Tennessee Sun once again reveals the real competition between the telcos and cable companies isn't about who can get the most customers with upgraded infrastructure that's able to provide advanced telecommunications and video services. Instead, it's just the opposite in the perverse state of today's wire line telecommunications industry. It's a battle in which the telcos and cable companies compete to serve the narrowest geographical base of potential customers while devising rules to force the other guy to serve the broadest possible base. Call it reverse regulation. In most industries, businesses want regulation that allows them to reach more -- not fewer -- customers. Not in wire line telecommunications, in which the players are engaged in a race not to the top, but to the bottom. (Incidentially, Sen. Ketron is dreaming if he truly believes AT&T plans to roll out its fiber/copper hybrid project U-Verse infrastructure in rural areas. U-Verse is targeted exclusively to select urban/suburban areas.)

By using its existing infrastructure, AT&T could reach smaller rural communities that do not have, and may never have, cable service because of their size, said state Sen. Bill Ketron, R-Murfreesboro. Ketron is the main sponsor of the cable legislation. The bill does not ask for any state funding for AT&T.

"The faster we get broadband into our rural communities, the faster those communities can be connected to the world," Ketron said. "Not only from our children in education in being connected but in providing the economic link to industrial development to those communities."

(Tennessee Cable and Telecommunications Association Executive Director )Briggs argues otherwise.

"They have said they intend to serve 70 communities, and there are over 500 to 600 franchises," Briggs said, "so right there it tells you they do not intend to serve everyone."

Tennessee broadband build out bloodbath predicted for 2008 legislative session

Tennessee state Senator Tim Burchett of Knoxville is predicting there will be a “bloodbath” in the 2008 legislative session as lawmakers once again entertain AT&T's request to preempt local governments and put the state in charge of broadband franchises that include delivery of high bandwidth IPTV video service.

Local governments won out this year when they convinced lawmakers Ma Bell was trying to avoid local government demands that AT&T build out its infrastructure to serve all of their residents and businesses. AT&T doesn't want to make that investment and hopes legislation making the state government the sole regulator will allow it to avoid negotiating with local governments.

“We believe that [the AT&T legislation] weakens consumer protections because there are no build-out requirements,” Carole Graves, communications director for the Tennessee Municipal League, told the Knoxville News Sentinel in this article via Free Press.

Wisconsin lawmaker wants protections for rural areas in AT&T-backed state franchise legislation

The Capital Times (Madison, Wisconsin) notes in an editorial today:

As state Sen. Kathleen Vinehout, D-Alma, notes, Plale's proposal does not contain needed consumer protections and offers no assurances that rural areas -- including the western Wisconsin region that elected her last year -- will enjoy the same access to telecommunication services as the Milwaukee County communities that elect Plale.

In proposing to rewrite the cable franchise bill to require AT&T, cable and other companies to contribute up to $7.5 million to a new "digital divide" fund to protect rural areas from being left behind, Vinehout says, "I'm representing the people that weren't at the table."

Wisconsin lawmaker likes Illinois 90 percent build out standard

Wisconsin state Senator Kathleen Vinehout isn't about to roll over to Ma Bell's proposed advanced telecommunications services regulatory framework that would require a far lower build out standard for AT&T's Project U-Verse product.

Vinehout likes what Illinois has done in requiring the company to build out its hybrid fiber and copper cable U-Verse infrastructure to serve 90 percent of the state rather than the 50 percent build out requirement favored by AT&T that leaves large areas on the wrong side of the digital divide:

Not every state meekly surrendered to AT&T. Illinois passed a bill with real teeth, including very specific consumer protection standards: requirements to bring services to 90 percent of the state, standards for quality, and protection for community access television.

AT&T fined by California for poor telephone service restoration

The California Public Utilities Commission announced it has levied nearly $1 million in fines against AT&T for failing to restore phone service outages in a timely manner in 2006. The fines are in addition to $900,000 in fines imposed on the telco for failing to meet service standards the previous year.

At the root of the restoration problem is AT&T's aging copper cable infrastructure that took a beating during California's rainy season during the first three months of 2006.

The regulatory actions against AT&T raise major questions about the big telco's ability to deliver advanced telecommunications services including high speed Internet access when it has difficulty maintaining even plain old telephone service (POTS) and explain to a large degree why many California customers of AT&T are still not offered wireline broadband nearly two years later.

Time Warner Cable applies for California franchise

Nearly two months after the Southern California city of Carlsbad accused Time Warner Cable of operating in a regulatory no mans land because it lacked either a franchise from the city or a statewide franchise issued by the California Public Utilities Commission, Time Warner has applied for a statewide franchise. That will enable it to avoid build out requirements that Carlsbad or other local California governments might seek to impose on providers.

More than 20 percent of U.S. local phone company customers still couldn't get broadband in last half of 2006

In September, your blogger speculated the Federal Communications Commission was delaying the release of a semi-annual report on the number of high speed telco and cable connections to the Internet covering the last six months of 2006 at the behest of telcos because it would show little or no improvement in the percentage of residential customers able to subscribe to high speed Internet from their incumbent local telephone exchange carriers.

This week the FCC finally released the long delayed report and it's clearly unflattering to the telcos. It reveals more than 20 percent of American residences could not get broadband from their telephone companies in the latter half of 2006. That represents no change whatsoever in the national average from the first six months of that year and illustrates that rather than making an effort to extend broadband to these unserved customers, telcos are hanging them out to dry, permanently stranding them on the dark side of the digital divide.

States with the highest levels of telco broadband access in the last six months of 2006 include Florida (89% ); Georgia (90% ) Colorado (86%) and surprisingly, Nebraska (89%).

States with the lowest levels of telco broadband access in the period were Maine (67% ); Arkansas (66% ); Michigan (64% ); New Hampshire (61% ); Vermont (64% ) and Virginia (66% ).

Author of California legislation benefitting telcos solicited charitable contributions from Verizon

The Sacramento Bee is reporting California Assembly Speaker Fabian Núñez solicited $120,000 in contributions to his designated charities from Verizon three months after Gov. Arnold Schwarzenegger signed Núñez's Digital Infrastructure and Video Competition Act of 2006 into law.

In addition, the newspaper reports AT&T made three grants of $5,000 apiece last year at Núñez's behest.

The law permits telcos like Verizon and AT&T to offer advanced broadband-based telecommunications services including Internet Protocol TV (IPTV) with a statewide franchise granted by the California Public Utilities Commission. The legislation authored by Núñez, AB 2987, shafted areas outside of urban centers such as Núñez's Los Angeles district because it does not require providers to build out their infrastructures, sanctioning digital redlining and leaving gaping broadband black holes in these areas intact.

A spokesman for Núñez issued the perfunctory denial of any link between the solicitation of Verizon and the legislation.

Trend: Rural telcos move to fiber

Two years ago, only about 12 percent of rural telcos were utilizing fiber to the home (FTTH) and/or fiber to the curb (FTTC) to offer broadband to customers. Last year, that number had grown to 28 percent. It now stands at 32 percent, according to surveys of members of the National Telecommunications Cooperative Association, and the vast majority of survey respondents (84 percent) already utilize fiber fed nodes to extend the reach of their digital subscriber line service.

Virginia local governments endeavor to get broadband infrastructure in place

“People are tired of us saying it’s coming, it’s coming - they want results,” said Corum, the director of economic development and tourism in Nelson, on whose lap the responsibility for coming up with a solution to the county’s broadband problem has fallen.

Broadband for far too many in Virginia and other states is merely an unfulfilled promise. Kudos to Nelson County Virginia Economic Development Director Maureen Corum and other Virginia economic development directors who are working to bring broadband to their counties. They like and their counterparts like El Dorado County, California Economic Development Director Sam Driggers wisely see the issue as vital infrastructure linked to the economic health of their counties.

Spread broadband, not asphalt

Some words of wisdom for our time from Washington Post syndicated columnist Neil R. Peirce. Policymakers, read closely:

Put your ear to the ground, and you can hear other voices, especially in new technologies, suggesting a less frenetic lifestyle in a nation clearly confounded by congestion, obesity, energy consumption, global warming and air quality issues.

Enter then the broadband-transportation link. Fast, reliable Internet connection makes telecommuting far more feasible –– to transfer files, worksheets and video clips, access company databases, create videoconferences and more. But "telework" can't function well when employees don't have broadband access. Simple equation: Universal broadband equals increased telecommuting, which in turn means less roadway demand, fewer greenhouse gas emissions and less pollution. Even if a worker telecommutes a day or two a week, it can make a real difference.

Local governments play critical role in ending digital divide

Illinois IT consultant Jim Carlini reports representatives of communities outside urban regions throughout the US who attended this month's Rural Telecon Conference in Springfield, Illinois are developing an increasing sense urgency as they continue to remain mired on the wrong side of the digital divide by the telco/cable duopoly. They realize they cannot count on the telcos and cable companies to build out their infrastructures to provide advanced telecommunications services like broadband and need alternatives.

Carlini suggests they turn to their local elected officials. "If your municipality isn’t looking at creative ways to develop new strategies that include having a state-of-the-art network infrastructure to support economic growth and development, they will be stagnating your property value and quality of life in your area," Carlini writes at MidwestBusiness.com.

"Simply put, the three most important words in real estate (“location, location, location”) have turned into “location, location, connectivity” in urban, suburban and rural America. Corporate site selection committees have included broadband connectivity as one of the top three criteria they are looking for when researching locations for corporate facilities. If your community does not have a good platform for broadband connectivity, it will simply be passed over in favor for one that does."

El Dorado County, California, while located in the Sacramento metro area, is like many other areas of the country, plagued by spotty and inferior broadband access. County Economic Development Director Sam Driggers conveyed Carlini's point recently to the El Dorado County Board of Supervisors.

Your blogger agrees with Carlini that local governments must take a proactive role in ensuring their telecommunications infrastructures can support the current and future needs of their residents and businesses. In that spirit, I've drafted petitions to El Dorado County Board of Supervisors and the El Dorado Irrigation District urging those local government entities to partner with private fiber optic telecommunications providers to lay fiber in their rights of way to build a fiber to the neighborhood network as the foundation for a badly needed upgrade to the county's telecommunications infrastructure.

Municipal WiFi struggles for viable business model

Municipal WiFi continues to struggle to find a viable business model in Sacramento and other U.S urban centers, Sacramento Bee business writer Clint Swett reports today.

Why competition suffers in the broadband market

One of the biggest debates is over how much broadband telecommunications should be regulated. That debate is in turn fueled by another over the fundamental nature of the market. Is it a competitive market and will competitive pressures force the market to provide broadband to those who want it at reasonable prices? Or is it an uncompetitive market as Robert Atkinson, president of the Information Technology and Innovation Foundation, described it at a conference today in San Francisco.

Atkinson like your blogger and many other observers tend to see it as a monopoly or duopoly with broadband provided by just a telco, a cable company or in all too many cases, neither, leading to the formation of broadband black holes stretching across the landscape. The reason, Atkinson explains, is the high cost of becoming broadband provider and deploying the necessary infrastructure.

Atkinson's right. By way of illustration, if another high cost infrastructure such as roads and highways was left to private market providers who would charge tolls for access, there would only be a small number of road builders and plenty of places where roads -- like broadband -- don't go. That's why roads in the vast majority of places are provided by the public sector.

Despite the substantial financial heft of the big telcos and cable companies and their ability to raise money on Wall Street, they simply can't put up the money themselves to build out their infrastructures to provide broadband to nearly every one who wants it. They'd have to take on billions more of bond debt and sacrifice near term earnings --something their investors wouldn't tolerate.

Increasingly, it appears only a partnership of both the private and public sectors can eliminate America's numerous broadband black holes and close the digital divide.