Monday, June 09, 2008

Unusual competitive situation develops in the Big D: Verizon plans FiOS overbuild in areas served by AT&T U-Verse

Matt Stump at Onetrak reports Verizon is opting to go head to head with AT&T in the IPTV triple play market for about 60,000 customers in suburban Dallas.

The development is being seen by some such as Telecompetitor as possibly the opening salvo of a competitive war between the two big telco TV players in states such as Texas where the telcos have successfully lobbied for state video franchises. It's also likely a contest of IPTV technology with Verizon betting when it comes to delivering HDTV, it can clean AT&T's clock with its fiber to the home (FTTN) full fiber infrastructure compared to AT&T's hybrid fiber and copper cable VDSL-based plant delivering Ma Bell's U-Verse Internet/TV/phone bundle.

What's also interesting about this overbuild is there's also a cable provider in this same Dallas area, Time Warner Cable, that will now find itself competing not just with a single telco in the usual duopolistic market configuration, but with two.

Onetrak concludes Verizon's move could have significant implications for other states such as Florida, California, Indiana, Washington and Oregon where Verizon operates inside AT&T and Qwest territory.

Editor: Incomplete, inadequate telecom infrastructure requires state government to step into the gap

Broadband is essential as roads and like roads, it can't be left to the private sector alone, writes Charlotte Observer Associate Editor Mary C. Schulken.

Schulken cites a 2007 report by the North Carolina s
e-NC Authority showing in four counties -- Jones, Greene, Warren and Gates -- less than 50 percent of the households can obtain access to high speed Internet services, while in 21 more than 30 percent are mired in broadband black holes.

"Access to high-speed Internet is as basic today as being connected by a good road -- and offers the same public benefit," Schulken writes. "Yet the private sector will not pay to put it within reach of every household and every community in North Carolina. The state needs to step up and invest in connecting the last mile."

Too bad this is AT&T territory. Up north in Massachusetts, a Verizon spokesman says the company is deploying its FiOS fiber optic plant without regard to population density and particular in areas where the old cable plant needs replacement.

Population density not determining factor in Verizon fiber deployment, spokesman says

More so than population density, the condition of the existing copper cable plant influences where Verizon plans to deploy its FiOS fiber optic infrastructure, a Verizon spokesman told the Worcester (Mass.) Business Journal.

"If you have to replace the copper in a particular area, there's no sense putting more copper in there," the spokesman told the newspaper.

Another factor driving fiber is the need to offer bundled services to attract residential customers who have abandoned POTS (Plain Old Telephone Service) over copper in favor of wireless phone service.

Saturday, June 07, 2008

California PUC set to adopt guidelines for broadband subsidies

The California Public Utilities Commission is set to adopt guidelines June 12 for the California Advanced Services Fund (CASF). CASF was established by the CPUC in December 2007 to subsidize the deployment of broadband infrastructure in high cost unserved and underserved areas of the state. Funding will be prioritized for projects targeted to areas currently with only dial-up service or satellite and then to build out facilities in underserved areas if funds are still available.

$100 million in CASF funding is available, derived from a 25 percent surcharge on telephone bills that's estimated to be five cents a month for the average customer. The CASF surcharge will be offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service

Applications for CASF funding will be considered beginning July 3, 2008. CPUC will subsidize 40 percent of the project costs. Both wireline and wireless providers are eligible to apply. Benchmark throughput is 3Mbs for downloads and 1Mbs for uploads.

Project funding will be awarded by the fall of 2008 and successful applicants will have two years to complete their projects. That likely means for Californians currently located in broadband black holes -- there are some 2 million of them in about 2,000 towns according to a report by Gov. Arnold Schwarzenegger's Broadband Task Force issued in January -- they'll have to wait at least until the fall of 2010 before they'll realize any benefit. The CASF funding was one of seven recommendations by the task force to increase broadband availability in California.

Wednesday, June 04, 2008

Higher than expected equipment, lost opportunity costs dog AT&T strategy to retain copper cable plant

AT&T continues to use its decades-old copper cable plant designed for carrying analog voice traffic to distribute Internet protocol traffic via Digital Subscriber Line (DSL) and more recently, its triple play voice/Internet/TV bundled service, U-Verse.

This strategy has allowed AT&T to avoid large expenditures to replace its last mile copper with fiber optic cable while continuing to depreciate the aging copper cable plant. But over time, it could prove to be a costlier strategy. The reason is that it takes a lot of field-based booster equipment — remote DSLAMs in the case of DSL and VRADs for U-Verse — to pump high bandwidth digital signals over old copper.

AT&T has all but abandoned putting in more remote DSLAMs to provide DSL, choosing to concentrate instead on fiber-fed VRADs to distribute U-Verse. However, if DSL Prime has got it right, Ma Bell will need a lot more VRADs than DSLAMS to reach customers. While DSLAMs can reliably propagate DSL service up to 12,000-14,000 feet, the VRADs used to distribute far more bandwidth intensive U-Verse are considerably less robust, not able to reliably serve premises more than 3,000 feet away. According to DSL Prime, AT&T erred in initially believing their reliable service range was 5,000 feet.

If true, that’s going to cost AT&T big time. Both in higher infrastructure costs because it will have to install more VRADs than anticipated and in lost opportunity costs since it will have to turn away droves of potential customers — including many who missed out on DSL and are still relegated to early 1990s era dialup because the telco failed to install enough remote DSLAMs.

Monday, June 02, 2008

FCC’s Martin doesn’t get it when it comes to U.S. broadband build out, fuels myth it’s largely a rural problem

FCC Chairman Kevin Martin continues to mischaracterize America’s poor broadband build out track record as a rural issue, telling last week’s D: All Things Digital Conference that the U.S. lags on broadband access “because it costs a lot more to build out in more rural areas and people who live further apart.”


Memo to Mr. Martin: It’s not a rural vs. non-rural issue. Rather, it’s one of incomplete telecommunications infrastructure that for all too many is an unfinished onramp to the information highway. Or a Balkanized “hodge podge” as the Communications Workers of America termed it.


There are plenty of folks residing in metro areas who can’t get wire line broadband connections from either telcos or cable companies. Oftentimes a neighbor will get service while another down the street cannot. In my own case, there’s both buried telco fiber and Comcast aerial cable 1.5 miles from my home that has existed for years. But neither the cableco or telco offer wireline broadband to me or my neighbors.

Friday, May 30, 2008

California's "surprisingly low" ranking for broadband connectivity speed

California may be widely considered the U.S. information technology leader as the home of the famed Silicon Valley. But when it comes to broadband Internet connectivity, it doesn't even make the top 10 among states, according to Internetnews.com's report on a recent study by mammoth Web server farmer Akamai.

David Belson, Akamai's director of market intelligence, told InternetNews.com that California ranks 17th, with just 21 percent of its connections coming in at 5 Mbps or higher over Akamai's network. "It was surprising that California didn't rank higher on the high broadband list," Belson said.


The top states are Delaware with 60 percent of its connections to Akamai measured at 5 Mbps, Rhode Island (42 percent) New York (36 percent), Nevada (34 percent), Oklahoma (33 percent), Connecticut (32 percent), New Hampshire (30 percent), Massachusetts (29 percent), Maryland (27 percent) and the District of Columbia (27 percent).


A possible contributing factor is the mediocre, incomplete state of the Golden State's broadband infrastructure. In January, Gov. Arnold Schwarzenegger's Broadband Task Force reported California's broadband infrastructure is unevenly deployed with nearly 2,000 towns and communities lacking broadband access -- many in Northern California -- while other parts of the state, mostly in metro areas of Southern California, enjoy state of the art connections.

What's truly surprising isn't so much Akamai's findings but AT&T's dubious assertion in a recent California Public Utilities filing that it provides broadband to its entire service area in the state.

Wednesday, May 28, 2008

Offline outside of Olympia

According to the Everett, Washington HeraldNet, much of Washington state outside of its urban centers is still offline when it comes to broadband Internet access. The newspaper reports the Washington Utilities and Transportation Commission is expected to release a study next month of the disparities in broadband use and availability in Columbia, Ferry, Grays Harbor, Lewis and Stevens counties in response to a legislative mandate to fill in the black spots.

Tuesday, May 27, 2008

WSJ: About 60 municipal fiber projects deployed in last decade

According to The Wall Street Journal, about 60 U.S. towns and small cities including Bristol, Va.; Barnsville, Minn.; and Sallisaw, Okla., have built state-of-the-art fiber networks and an additional two dozen municipalities, including Chattanooga and Clarksville, Tenn., have launched or are considering similar initiatives.
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The newspaper notes the projects have revived policy debates similar to those of more than seven decades ago when local governments opted to build out their own electrical distribution infrastructures to serve areas large private sector providers neglected.

The Nashville Tennessean, which carried and supplemented the WSJ story, reports Clarksville's Department of Electricity is building some 860 miles of fiber cable to offer TV service, broadband Internet and phone, and will start to sign up customers this year. Meanwhile, Columbia Power & Water Systems offers from 1Mbs to 7Mbs of broadband Internet speeds for residential customers at prices ranging from $29.95 to $52.95 per month.

The public providers complain the private providers are moving too slowly. They're willing to take on more risk than the private sector, and that risk is real for poorly planned and executed government run fiber systems as recent events with Utah's UTOPIA and IProvo systems illustrate. IProvo's financial problems have prompted the Provo City Council to consider selling off that city's system; a vote on the transaction is set for this week.

Friday, May 23, 2008

Cynical spin campaign shifts broadband build out burden to consumers

Telecommunications companies are engaged in a subtle PR campaign that attempts to shift the burden to consumers to prove they want broadband before they build out their infrastructures in order to make it available. Their position -- made clear in this PC World item via Yahoo News -- is unless demand can be shown, we aren't building it.

It's really nothing more than a cynical, self serving delaying tactic, part of the paper chase diversion of drawing maps and aggregating demand that allows the telcos and cable companies to sit back and do nothing, content to depreciate their aging and increasingly obsolete infrastructures instead of investing in upgrading them for the modern Internet era of telecommunications. They're essentially saying, if consumers can't prove to our satisfaction they really want broadband, then they can get by with circa 1992 dialup connections or go suck a satellite and put up with high cost and sluggish, often unreliable connections. The problem is consumers won't ever be able to do so since the true intent is to buy time, not prove market demand.

Consultant Jeff Kagan tells PC World most consumers don't need more than a 3Mbps connection even as broadband providers are rolling out connections up to 20Mbps. For now and for those mired in broadband black holes for years, Kagan's right. But just because most consumers don't need a 20Mbps connection doesn't mean they don't need -- or want as some industry apologists suggest -- a 3Mbps connection. Providers should be providing broadband throughout their entire service areas at that minimum level of service right now and planning for 20Mbps connections in the near future.

Wednesday, May 21, 2008

AT&T audaciously claims "broadband access to all of its California service area"

One of the physical principles of cosmic black holes is no information can be known about what's inside of them because no information can escape the powerful gravity of the singularity at their centers.

Clearly, that same principle also applies to the numerous broadband telecommunications black holes in California based on a recent AT&T filing with the California Public Utilities Commission. In the introduction to the April 16, 2008 filing, AT&T asserts it "now offers broadband access to all of its California service area."

Apparently the unfortunate residences and small businesses who cannot order wireline-based broadband service from AT&T such as DSL or the telco's next generation U-Verse bundled service offering higher speeds than AT&T's legacy DSL service haven't gotten the message. Of course not. In AT&T's universe, they simply don't exist and nothing can be known about them. Out of sight, out of mind.

Perhaps AT&T is fudging by counting the limited areas where it offers its EDGE wireless network service that provides throughput not much better than the antiquated 1994 Federal Communications Commission "broadband" standard of 200Kbs. No dice. By today's standards, that's not broadband. Ditto satellite, which the telco deployed throughout much of the U.S. -- as if the entire nation was situated in the remote regions of the Arctic Circle -- in 2006 via a reseller agreement with WildBlue.

The AT&T filing objects to proposed CPUC rules designed to reduce California's digital divide and speed broadband infrastructure build out by requiring telcos and cable providers to report by census tract where they provide broadband and delineated by various speed tiers, i.e. less than 1 mbps; 1-5 mbps; and 5-10 mbps. The AT&T filing asserts CPUC has no authority to regulate broadband services because they are information services preempted by Federal Communications Commission jurisdiction.

Report: Comcast considers selling off infrastruture in Maine

The Times Record of Maine reports today that Comcast is mulling selling off its holdings in the state as part of a plan to dispose of 46 properties nationwide. (Separately, an industry source discloses one of the Comcast plants to be divested serves Coalinga in California's Central Valley.)

According to the newspaper, municipal officials in several Maine towns said they were contacted by Comcast and informed of the possible sale. A Comcast spokesman declined to comment on the report.

Following this report, the Associated Press May 23 reported Comcast plans to sell off its plant in eight states serving between 400,000 and 500,000 subscribers. The states reportedly include Maine, Kentucky, Louisiana, New Mexico, Virginia, Georgia, West Virginia and California. Comcast is staying mum on the specific locations where it will sell off its assets.

Robert Serrano, an analyst at SNL Kagan in Monterey, Calif., told the AP Comcast is "pruning some of the more outlying areas in order to make a more efficient cluster."

Tuesday, May 20, 2008

AT&T: Aerial copper cable theft at "almost epidemic levels"

A little more than a year ago, Alaska Sen. Ted Stevens told the Senate Commerce Committee that America's legacy copper telecommunications cable designed for an era of analog voice communications poses a major obstacle to the wider deployment of fiber optic-based digital broadband infrastructure that the nation needs now and in the future.

Legacy copper cable is also creating a choke point for emerging wireless broadband providers who can't get sufficient backhaul over 1970s era copper T-1 lines that provide a narrow pipe of only 1.5Mbs.

While certainly not by design, the recent rapid run up of the price of scrap copper could help expedite the needed transition from copper to fiber and speed the deployment of fiber. The reason: high copper prices have spawned a wave of theft of aerial copper telecommunications cable that an AT&T official told American Public Media's Marketplace program today is "almost at epidemic levels" and getting worse.

Comcast gets well deserved poor customer satisfaction ranking

Not surprisingly, Comcast's customer satisfaction ranking in the Q1 2008 American Customer Satisfaction Index is in the cellar at 54. Dealing with this company is like talking to a wall. While Comcast's Web site informs me that I qualify for various services when I enter my address in ZIP Code 95709, when an attempt is made to order service, it initiates an endless loop with on line customer service personnel who simply shrug and repeat, "You're not in our system."

Truly surprising given AT&T's dismal track record of over promising -- "Your World Delivered" -- and under delivering is the telco 's score of 75 out of 100. AT&T informs me I'll be able to order its U-Verse bundled service in the next 1-2 months. With the absence of newly installed U-Verse VRADs in my area, I'll withhold judgment as to whether I'd vote to raise the telco's score.

The index is produced by the University of Michigan’s Ross School of Business in partnership with the American Society for Quality (ASQ) and CFI Group, and is supported in part by ForeSee Results, corporate sponsor for the e-commerce and e-business measurements.

Qwest petitions FCC for $4.2B in USF funds to defray broadband infrastructure costs

The Denver Business Journal reports Denver-based telco Qwest has filed a petition with the Federal Communications Commission seeking $4.2 billion from the Universal Service Fund to defray the cost of deploying broadband infrastructure in its 14-state service area located in the western United States.

According to the newspaper, current FCC rules make the funds inaccessbile to Qwest.

Tuesday, May 06, 2008

Big WiMAX deal could have sufficient backhaul due to cableco involvement

Less than a week after an Unstrung analysis noted the launch of Sprint's Xohm WiMAX was delayed due to insufficient backhaul over 1970's era copper-based T-1 lines that also threatens future 4G rollouts, The Wall Street Journal reports Sprint, WiMAX player Clearwire, Web portal Google, and chip maker Intel and big cable companies Comcast and Time Warner Cable have joined forces to create a WiMAX protocol-based wireless voice and broadband network.

The offering, which could provide downloads of 5Mbs on a par with current cable Internet service, isn't likely to encounter backhaul problems since it involves both wireless and wireline players -- the latter being Comcast and Time Warner Cable. Both companies are likely to be able to provide adequate backhaul. But some observers aren't so sure. One notes there are doubts that the cableco partners can provide adequate backhaul capacity without upgrading their infrastructures. Additionally, Google told Unstrung it won't be making available its proprietary fiber to serve as backhaul for the new Clearwire venture. According to Unstrung, for now Clearwire intends to rely primarily on its proprietary microwave network for backhaul.

If the WiMAX technology works as expected and this service is rolled out quickly, in addition to mobile customers it could sign on fixed residential and small business customers located in areas not served by the cable companies or those stuck in the many telco broadband black holes where DSL wasn't deployed in the past several years and where infrastructure for Internet Protocol-based advanced bundled services has yet to be built.

A report released May 7 by the UK-based Juniper Research supports this analysis. Report author Howard Wilcox predicts WiMAX "will be an attractive offer" in areas where there are no wired networks, and in areas where the existing DSL speed is suboptimal, (i.e. 1.5Mbs or less). "WiMAX will solve the broadband access problem for users located at the fringes of DSL coverage," Wilcox wrote.