Vermont towns strive to enter modern era of telecommunications

Their residents understandably sick and tired of sluggish "dialug" Internet connectivity that was state of the art technology in the early 1990s, the Associated Press reports more than 20 Vermont towns are forming a community owned, subscriber funded nonprofit to deploy fiber optic telecommunications infrastructure.

According to the AP, a financial institution would finance the system and lease it back to the nonprofit, which would cover the lease with subscriber fees that would run around $120 a month for a "triple play" bundle of TV programming, voice and Internet service.

Firm claims to give new lease on life to DSL--at "up to" 400 Mbs

A Canadian firm claims it has developed proprietary DSL transmission technology that would allow DSL to run over copper pair at speeds "up to" 400 Mbs, easily lapping cable. Moreover, boasts Calgary, Alberta -based Genesis Technical Systems Corp, its Bonded DSL Rings(tm) Technology (BDR), is so economical to deploy that telcos could get back their investment in one year, even in rural areas.

The company elaborates in a press release issued today:

High quality television over copper telephone lines can be a reality for Telcos using Bonded DSL Rings(TM). Bandwidths of up to 400 megabits per second - at a cost much lower than fiber - are achievable using BDR. This will allow Telcos to compete head-to-head with cable companies at a price point that is attractive to consumers and very profitable for Telcos.

The company claims it demonstrated BDR's viability in proof of concept demonstrations at trade shows in 2007. The real proof of concept as this company likely well knows is whether telcos buy its claimed breakthrough that provides extended life to DSL, an interim wireline broadband technology on the road to fiber.

There have been a number of companies claiming breakthroughs such as this in DSL technology. Given the fact that copper is a poor transmission medium for broadband due to the tendency for signals to degrade quickly over short distances, such claims should be met with a healthy degree of skepticism.

In addition, a diagram of the technology's components at the Genesis Web site shows it requires remote field equipment. The telcos have long had remote DSL terminals. The issue isn't lack of technology but rather an unwillingness on the part of the telcos to invest in infrastructure and equipment to deliver broadband.

Local government units could build own broadband infrastructure under proposed California legislation

Following the January release of a report by Gov. Arnold Schwarzenegger's Broadband Task Force finding nearly 2,000 California communities lacking high speed Internet access, legislation has been introduced that would authorize community service districts (CSDs) to offer broadband service within their jurisdictions.

SB 1191 would allow allow CSDs to "acquire, own, improve, maintain, and operate broadband facilities and to provide broadband services, until a private person or entity is ready, willing, and able to acquire, construct, improve, maintain, and operate broadband facilities and to provide broadband services, and to sell those services at a comparable cost and quality of service to the district and its property owners, residents, and visitors." If and when a qualified private broadband provider steps up and shows an interest in serving the community, the legislation requires the CSD to sell or lease its broadband infrastructure to the provider at fair market value.

In 2007, a California Court of Appeal ruling cleared the way for public utility districts to provide advanced telecommunications services, rejecting a legal challenge by a cable TV company.

AT&T has itself to blame and not economy for slowing residential wireline revenues

Last month, AT&T's chairman and CEO Randall Stephenson told an industry conference a slowing economy is taking a toll on the telco's residential wireline broadband market segment.

That doesn't exactly square with a forecast by the Telecommunications Industry Association (TIA), which said yesterday that the telecommunications industry should see strong growth over the next three years, driven largely by increasing demand for broadband.

Reports Grant Gross of IDG News Service:

The trade group expects the worldwide telecom market to grow to $4.6 trillion by 2011, compared to about $3.9 trillion in 2006. About $1.3 trillion of the 2011 market will come from the United States, the TIA said.

Driving these increases will be broadband, with its consumption doubling in 2006 and quadrupling again in 2007, said Arthur Gruen of Wilkofsky Gruen Associates, a consultancy that focuses on telecom and other industries. Video and entertainment applications are pushing customers to buy more broadband and telecom providers to build more capacity, he said.

Rather than the blame the economy, AT&T need only look in the closest mirror for declining residential wireline revenues. It has halted DSL buildouts, failing to meet its "Project Pronto" goal of systemwide DSL availability by last year. The telco is currently engaged in a half hearted effort to build a halfway capable system (Project Lightspeed/U-Verse) that will meet only a fraction of the burgeoning demand for integrated IP services in the residential segment.

AT&T can hardly blame the economy when it chooses to sit back and milk existing revenues and depreciation from its aging copper cable based system rather than aggressively growing its residential business.

Lack of patient capital condemns AT&T to also ran status in coverged IP services

Taken in combination with a recent financial analysis of AT&T, a survey of telecom execs last year by IBM's Institute for Business Value suggests that while telcos look to the convergence of Internet protocol-based voice, data and video services to grow their companies, AT&T isn't likely to get a major share of the action.

The reason: a lack of "patient capital" that the company needs to upgrade its network -- particularly over the final segments before it reaches customer premises.

With digital convergence blurring industry boundaries, telecom providers now believe they can expand their addressable market to include areas of media and advertising that were once beyond their reach. Many telecom operators are investing in digital content with the expectation of offsetting declines in voice revenues.

The most promising areas of advanced content services are television and video. However, delivering all but the most basic digital content services over networks that were originally designed for voice communications and Web browsing is challenging, and telecom operators are having to upgrade their networks to compete. The returns on these network upgrade investments remain uncertain and are likely to be positive only in the long term.

"Positive only in the long term" means patient investment capital. However, a recent analysis by DSL Prime's Dave Burstein found an absence of such funding at AT&T. Rather than increasing spending on its infrastructure, Burstein found the company instead slashed capital expenditures by 50 percent since 2002, which explains AT&T's abandonment of its planned system wide DSL deployment dubbed "Project Pronto."

Tennessee broadband build out debate highlights conflict between public and private interests

The Tennessee broadband build out bloodbath is heating up, according to the The Tennessean. The cable industry is running TV ads suggesting AT&T will redline rural areas if the state enacts AT&T-backed legislation putting the state rather than the local governments in charge of issuing Internet Protocol TV franchises.

The redlined areas will likely remain unconnected for decades from AT&T's new U-Verse fiber and copper based service offering IPTV, voice and high speed Internet. AT&T denies it redlines in the dozen states where it has rolled out U-Verse. Wrong, according to a couple of industry analysts quoted in the story. AT&T lacks patient capital to invest in providing a wider base of U-Verse service and therefore installs U-Verse infrastructure in selected areas only where it believes it will get the quickest return on investment.

This story aptly illustrates the clash between public and private interests that has produced the incomplete and balkanized crazy quilt telecommunications infrastructure that has effectively divided the U.S. into two nations: one with access to advanced telecommunications services based on broadband Internet and one without. Public policymakers are rightly concerned about this situation given the increasingly important role of broadband access to the economy.

Taking America's heartland by storm: WISPs swoop into areas neglected by wireline providers

Telecompetitor reports several WISPs are sweeping into several U.S. markets where wireline broadband service isn't offered. Not surprisingly, they are quickly signing up customers who have been waiting in vain for years for telcos and cable companies to provide high speed Internet:

All of these companies are targeting “underserved” rural markets with a broadband alternative. Underserved generally is a code word for markets served by large RBOCs and/or MSOs who have not invested in local broadband networks. These markets are often identified as a part of the “digital divide.” DigitalBridge says they have reached 10% penetration within 6 months of one their first market entries, Rexburg, ID. These growing rural deployments are leveraging quickly evolving broadband wireless technology and pent up demand for broadband in markets where little or no broadband competition exists.

According to Telecompetitor, one of the WISPs, Oklahoma City-based Stelera Wireless, has rolled out service in Floresville & Poth, Texas using recently auctioned advanced wireless service (AWS) spectrum offering maximum speeds of 7.2 Mbps down and 2 Mbps up. However, Stelera informs me that its users get average download speeds of 1.5-2 Mbps down and 350-380 Kbps for uploads.

Notably, the WISP does not use telco circuits for backhaul connections, instead relying on its proprietary OC-3 and OC-12 microwave network. In Stelera's Texas markets, service is backhauled to San Antonio via microwave and from there via long haul ethernet to Stelera's Oklahoma City HQ POP.