ISPs target remote areas of Northern California for state subsidized broadband infrastructure

A review of broadband infrastructure projects filed by the July 24 soft application deadline for 40 percent buildout subsidies from the California Advanced Services Fund to service unserved and underserved areas of the state shows nearly all of the proposed projects are located in Northern California. Most are in ZIP Codes and census tracts in North Coast counties and heavily concentrated in remote Sierra Nevada counties.

The providers -- whose identities remain under wraps until the close of the application process being overseen by the California Public Utilities Commission -- have apparently chosen to deploy outside of metro areas where they believe they could face near term competition from the telco/cable duopoly. That unfortunately means for those mired in broadband black holes where telcos and/or cable companies have limited, incomplete broadband infrastructure in parts of metro area counties such as the Sierra Nevada foothill counties of El Dorado and Placer and portions of Silicon Valley, relief doesn't appear likely anytime soon from one of these subsidized ISPs. In El Dorado County alone, for example, the California Broadband Task Force identified more than five dozen communities that aren't provided any wireline broadband services -- and that's not counting the numerous broadband black holes adjacent to U.S Highway 50.

Providers seeking the CASF funding were allowed to propose either wireline or wireless broadband projects providing minimum throughput of 3 Mbs down and 1 Mbs up.

Update 9/3/08: The CPUC has released ZIP Codes, Maps and Census Block Groups for proposed projects filed by the Aug. 25 soft deadline that would build out broadband infrastructure to underserved areas, which the CPUC defines as those where broadband is available but no facilities-based provider offers service at asymmetrical speeds of at least 3 Mbs for downloads and 1 Mbs on the upload side.

As with the proposals for unserved areas, defined as defined those not served by any form of facilities-based broadband, or where
Internet connectivity is available only through dial-up service or satellite, the vast majority of the proposed projects for underserved areas are situated in Northern California. This latest batch of proposals is heavily concentrated in Sierra Nevada and Sierra Nevada foothill counties including Toulumne, Mariposa, Amador and Calavaras counties.

Will state broadband subsidies have meaningful impact?

Massachusetts appears set to join California among states providing subsidies to expand broadband telecommunications infrastructure where little or none exists.

The Berkshire Eagle of Pittsfield, Massachusetts reports Bay State lawmakers have sent Gov. Deval L. Patrick legislation that would provide $40 million to help underwrite the cost of building infrastructure in the notorious sprawling broadband black hole in the western part of the state. According to the newspaper, the goal of the legislation, signed into law today by Patrick, is to wire 32 unserved communities with high-speed broadband in the next two years.

Out on the left coast, a deadline passed July 24 for providers to submit proposals to the California Public Utilities Commission under which they would receive a 40 percent subsidy to deploy either wireline or wireless-based broadband infrastruture capable of speeds of at least 3 Mbs down and 1 Mbs up. Priority will be given first to unserved areas and then underserved areas. The $100 million California Advanced Services Fund is funded by a surcharge on telephone bills. The CPUC is expected to announce those projects selected for funding by the fall or later this year.

Given the high cost of broadband telecommunications infrastructure, it remains to be seen if these relatively small state subsidies can make a signficant dent in both states' many broadband black spots. Some believe broadband market failure is so pervasive that a much broader, larger federal initiative similar to the Eisenhower-era federal highway act is needed to bring America into the modern age of Internet-based telecommunications and are urging presidential candidates to back such a program.

AT&T sees WiMAX as solution for less densely populated areas of U.S.

As AT&T's copper plant has been neglected outside of metro area cores, there has been much speculation about the big telco's future plans for it. Particularly since much of it is too deteriorated and unreliable to support weak Digital Subscriber Line (DSL) signals that degrade quickly over distance. In addition, AT&T has not been upgrading its copper plant to support its fiber/copper hybrid Project Lightspeed/U-Verse IPTV/voice/data bundled service outside of the limited metro areas where it's deploying U-Verse.

AT&T's new technology chief John Donovan is making AT&T's view of the future its aged copper cable plant in these regions more clear in a published interview with USA Today: It's a costly, obsolete albatross -- a legacy of the analog era of plain old telephone service (POTS).

Now that AT&T defines itself more as a wireless than wireline carrier, wireless is naturally viewed as the logical copper cable replacement strategy. At the top of the list, USA Today quotes Donovan as saying, is WiMAX, which AT&T apparently sees as a longer range and more robust solution for both fixed and mobile voice and data services outside of densely populated areas. In the latter, the telco will likely deploy its planned 4G Long Term Evolution (LTE) cellular service that is expected to provide far faster Internet connections than its current 3G system that itself isn't universally deployed in AT&T's 22-state territory.

Donovan told the newspaper WiMAX appears particularly well suited to rural areas of the U.S. where it's becoming prohibitively expensive to maintain copper.

Reports last year suggested Ma Bell planned to ramp up her WiMAX deployments starting earlier this year after initial rollouts in the Fairbanks, Alaska area and parts of the former Bellsouth territory AT&T acquired at the end of 2006.

Telecompetitor speculates that AT&T's interest in WiMAX as a replacement for copper cable represents the start of a "coordinated rural market divestiture strategy."

Report: AT&T reduces investment in Project Lightspeed, concentrates spending on existing U-Verse deployments

While AT&T is making its triple play U-Verse its core wireline focus, at the same time it's throttling back investment in Project Lightspeed, the VDSL-based fiber to the node (FTTN) infrastruce that supports U-Verse.

Instead, spending is being redirected to selling and supporting customers in the limited areas where U-Verse has been deployed, writes Bob Wallace in xchange:

AT&T recently announced it is cutting capital spending by hundreds of millions, but didn’t disclose specifically how that will affect its FTTx plans. AT&T said roughly a year ago that all new builds would use an FTTN architecture, but with these cuts in capital spending more folks likely will have to get by with copper links. However, AT&T is hiring big for U-verse in areas including customer service and call centers, help desk staff and technicians to install the service. That plays toward customer retention and easy adds.

“We know the capex slowdown will impact how many homes AT&T can pass with U-verse throughout 2008 and early 2009,” said Jeff Heynen, directing analyst for IPTV and Next Gen BSS/OSS for Infonetics Research. “However, right now the priority is signing up subscribers in the areas where they do pass the majority of homes. Their subscriber ramp continues to get better, as it should.”

Coalition calls on next U.S. administration to adopt broadband expansion strategy

Two weeks after the National Association of Telecommunications Officers & Advisors (NATOA) declared the U.S. is at a crisis point on the future of its telecommunications infrastructure, another organization is calling for the next administration to make broadband access an "early and high-level priority."

As with the NATOA, the nternet Innovation Alliance (IIA) advcocates a national broadband strategy it says should be comprised of a "coherent set of policies and goals to accelerate universal adoption of high speed Internet." The IIA calls on the next administration to provide investment incentives and encourage public-private partnerships to expand broadband infrastructure and availability.

“We are at a critical moment in our nation’s history,” said Bruce Mehlman, co-chair of the IIA, which describes itself as a broad-based coalition of business and non-profit organizations. “To compete and win in the 21^st century, we must ensure the United States capitalizes on the extraordinary economic, technological and societal opportunities presented by broadband. The benefits are undeniable and compelling.”

Ironically, one of IIA's members is AT&T, whose failure to invest in upgrading its infrastructure, particularly over the last mile to homes and businesses, is a major cause of the pathetic state of U.S. broadband access.

Self perpetuating broadband black holes a product of telcos' cynical digital redlining strategy

Since late 2006 and again this week, there have been reports of slowing growth in U.S. wireline broadband subscribers and particularly those using telco-provided Digital Subscriber Line (DSL) service. Analysts and other observers have blamed the demand side of the market, attributing the decline to a slowing economy and market saturation.

There's likely a better explanation -- and it's on the supply side of the equation. Since 2006, DSL deployments by the tier 1 telcos such as AT&T and Verizon have been slowing and are now all but halted as the companies concentrate on building out their triple play (U-Verse and FiOS, respectively) infrastructures in a relative few selected markets.

For those unfortunate enough to reside or do business in these companies' service territories where they don't offer wireline broadband connections, there's another factor at work: the self perpetuating broadband black hole. They're the natural product of the telcos' digital redlining strategy.

Since the big telcos don't do market research, they rely on what they term as "pent up demand" for services. As the broadband boom unfolded at the start of the decade, pent up demand grew. Right around the time of the first reports of a broadband "slowdown" began appearing, that pent up demand had likely recently peaked. Folks who have been asking for wireline broadband connections over a period of 5-7 years and have yet to obtain them by mid-2008 have likely concluded they never will. So they stop asking for service, ignore misguided ads for telco broadband, and pent up demand for broadband falls away. The telcos can then cynically point to the falling demand to justify their continued failure to deploy broadband infrastructure to these redlined neighborhoods.

AT&T seeks regulatory roadblocks to wider broadband access

AT&T is notorious for incomplete wireline infrastructure in its 22-state service area. That produces sprawling broadband black holes that belie its motto of "Your World Delivered."

Now the big telco wants the Federal Communications Commission to block a joint venture between Sprint and Clearwire that would deploy WiMAX wireless broadband that could fill in many of AT&T's broadband black holes. AT&T's current strategy seems to have the perverse goal of preserving as many of its digital dark spots as possible for as long as possible. In some areas, AT&T is already under competitive pressure from Verizon Wireless Broadband, which has been harvesting customers who can't get wireline broadband from Ma Bell. Since it would likely offer faster thoughput speeds, the Sprint/Clearwire WiMAX venture would present an even greater threat to AT&T's dark territorial hegemony.

Virginia governor links broadband buildout to reduced transportation infrastructure demand

Virginia Gov. Tim Kaine believes building out broadband infrastructure can reduce the strain on transportation infrastructure by allowing more information workers -- many of whom live in Northern Virginia and commute to Washington -- to telecommute.

Kaine's observation, contained in a report on a panel discussion last week coinciding with the release of papers by the Brookings Institution, has broad implications given that many of nation's roads and highways are deteriorating at the same time oil prices have sent gasoline above $4 a gallon.

Read the full report by Drew Clark of BroadbandCensus.com here, which includes links to the Brookings Institution papers.

"Copper cartel" of telcos has anti-competitive stranglehold over U.S. last mile telecom infrastructure, CLEC complains

U.S. telcos such as AT&T and Verizon comprise a "copper cartel" that maintain an anti-competitive stranglehold over the nation's last mile telecommunications infrastructure, the head of one of the largest competitive local exchange carriers created under the federal Telecommunications Act of 1996 told Congress this week.

“The predominant issue of 21st century telecommunications is broadband choice and options for businesses and consumers which allow them to choose their broadband provider based on customer need," XO Communications CEO Carl J. Grivner told the U.S. House Telecommunications Subcommittee on Telecommunications and the Internet, according to a news release issued by the CLEC. "But we continually face incumbents’ efforts to restrict access to essential last mile links that are critical to competitive broadband offerings.”

Griver complained telcos are using provisions of the 1996 law to get around rules requiring them to sell last mile connections at wholesale rates.

Monopoly power of U.S. telcos harms national interest, Internet protocol developer Vint Cerf says

Internet protocol developer and Google Internet evangelist Vint Cerf warns the existing structure of U.S. telecommunications providers impedes Internet access and harms the national interest. Cerf criticizes the monopolistic market power of the telcos, which allows them to hold out for regulatory concessions before investing in their infrastructure -- infrastructure he says is as vital as roads and highways.

While not calling on the government to bust up the monopoly, Cerf says providers need to be restructured, according to a Canadian account of a recent interview Cerf gave to a Silicon Valley blog:

Cerf said large internet service providers (ISPs) need to be split into two entities — one wholesale arm that sells access to the company's network to other firms, and one retail arm that sells internet access to customers. The wholesale arm would have to sell access to other service providers at the same rate that it charges itself.

The model has been adopted in the United Kingdom and New Zealand, where Cerf said it is working.

U.S. should regard broadband as information utility and ensure universal access, congressman says

This from the Pittsburgh Post-Gazette on the Federal Communications Commission's July 21 hearing held in Pittsburgh, PA:

U.S. Representative Mike Doyle, D-Forest Hills, who help to organize the event, said the hearing was intended to address two major concerns -- the so-called "digital divide" between those who have broadband access and those who don't, and "net neutrality," or the openness of the Internet.

Rep. Doyle favors a "guarantee of universal service" similar to telephone service, that views the Internet as a type of information utility. Making broadband Internet service available to all "has to be a joint effort by the federal government and the private sector," he said.

Along with universal service, he said, the United States needs "a policy that establishes basic core principles for the Internet" to ensure that service providers do not become "gatekeepers" who can restrict users access.

Uneven U.S. broadband deployment distorts market perceptions, drives digital downturn

The uneven, hodge podge deployment of last mile broadband infrastructure in the United States in the current decade has affected market demand by distorting perceptions about broadband availability. In areas that still don't have wireline-based broadband access in 2008, some inhabitants have apparently concluded that if they don't have service now they aren't likely to in the foreseeable. The practice of cable companies and telcos of not giving residents time frames as to when broadband will be offerred only reinforces that perception.

Commenting on the recently released Home Broadband Adoption report by the Pew Internet and American Life Project, the National Rural Telecommunications Cooperative (NRTC) observes in its July 2008 Update newsletter that the perception ironically persists even when broadband services are actually available. That naturally drives down demand, known as "take rate" among providers.

Cost and lack of availability were the main reasons rural consumer gave for not subscribing to broadband. Twenty-four percent of the rural dial-up users in the Pew survey said they would take broadband if it were available. This might indicate that rural consumer perceptions in some areas do not match the actual amount of service available from rural broadband providers. For years, NTCA broadband surveys have shown that rural providers have been building out broadband services, but that there have been very low take rates.

This market phenomenom isn't confined to rural areas since broadband black holes can be found in all areas of the U.S.: urban, surburban, quasi-rural and rural.

Low take rates understandably make providers reluctant to invest in broadband infrastructure, particularly in higher cost areas. The end result of this depressed dynamic is self perpetuating and highly persistent broadband black holes in those areas where there are in fact no wireline-based broadband services. Providers in turn can justify the existence of these black holes, fearing low take rates. It's the equivalent of an economic downturn: a lack of confidence on the part of both sellers and buyers.

This is primarily a supply side problem given that the supply of broadband services in these areas has been nonexistent over a period of many years. The way out of this digital downturn is for providers to drive demand by both aggressively deploying services and advertising their availabilty. The latter element is key to overcoming entrenched market perceptions in long-established broadband black holes that broadband isn't available and isn't coming any time soon.

On Sept. 8, 2008, the Broadband Stakeholder Group (BSG), the British government’s advisory group on broadband, issued what it termed "the most comprehensive analysis produced to date on the costs of deploying fibre in the UK."

This report supports the notion that ISPs must proactively drive up demand for advanced services in order to support the business case for fiber-based broadband infrastructure deployment in costlier, less densely populated areas instead of passively writing them off as unservicable as all too many are wont to do. “If operators could achieve a higher than expected level of take-up in rural areas, then the business case for deployment in those areas could improve significantly”, said the BSG's CEO, Antony Walker.

U.S. at "critical juncture," in danger of becoming second class broadband state

Yet another organization is sounding the alarm over the pathetic state of U.S. broadband telecommunications infrastructure. This time it's the National Association of Telecommunications Officers & Advisors (NATOA), which today adopted and released formal Broadband Principles encouraging the immediate development of a national broadband strategy.

"Today, the United States is at a critical juncture," the organization states. "Economic and social development increasingly depend on advanced communications infrastructure. However, there is no strategy in place for widespread deployment of next-generation broadband networks. Our failure to take immediate action threatens to relegate our country to second-class status in the broadband age."

Forget about studies, broadband demand aggregation surveys and pretty maps of broadband black holes and other delaying tactics, well meaning or otherwise. The situation is so dire, NATOA asserts, it requires urgent action rather than contemplation: the immediate deployment of advanced broadband infrastructure -- preferably over open access fiber optic cable systems -- providing synchronous connections.

The NATOA's statement also shuns a search for magic bullets to speed broadband deployment. "Different methods may be preferable in different communities," it reads. "For example, networks may be financed by private investment, by government investment, by public-private partnerships, by tax incentives, or by other means. None of these approaches should be prohibited by law or burdened by special restrictions (such as laws that forbid cross-subsidy by governments but allow it for private entities)."

Aside from the need for immediate action, another theme strongly emerges from the NATOA's statement: that local government play a key role and the current model of that concentrates ownership of telecommunications infrastructure in the hands of just a few private owners is part of the problem.

That makes sense given that the U.S. broadband crisis is really a local crisis over the so-called last mile connection. Consider roads and highways to which the telecommunications system has often been compared. The big telecom players may own and operate the interstates and major highways. Local governments have traditionally had responsibilty for providing roads and streets and NATOA argues they should also play a critical role in upgrading the nation's inadequate broadband infrastructure.

Vexed in Vermont over slow progress on broadband access

Considering that broadband has been likened to an information interstate highway, Vermont is settling for just a two lane blacktop, laments Lawrence Keyes in a op-ed in the Rutland, Vermont Herald.

Keyes, who chairs Vermont's Software Developer's Alliance outreach committee, says Vermont's E-State initiative "is largely an exercise to convince ourselves that 'something is being done, and 'we've got it covered' as broadband black holes remain numerous.

What worries me is that with E-State we're going to get people barely off dialup. By going with wireless Internet connections, we believe that we have a state-of-the-art high-tech infrastructure superior to other states. That is how it is being sold. But, we're really just paving the dirt roads.

Keyes suggests investment in broadband infrastructure should be given the highest priority by all candidates for governor.

Schwarzenegger signs legislation allowing some California local governments to construct broadband infrastructure

Gov. Arnold Schwarzenegger has implemented one of the several recommendations issued by his Broadband Task Force earlier this year by approving legislation that would allow California's 320 community services districts (CSDs) to construct and operate telecommunications infrastructure to deliver broadband within their jurisdictions. CSDs are part of a category of limited purpose local governments known as special districts.

Under Senate Bill 1191, CSDs would serve as stopgap providers until a private sector provider opts to serve their areas with services of comparable cost and quality. CSDs would then have to sell or lease the plant to the private provider at fair market value under the legislation.

Notably, the measure was not opposed by telephone or cable companies, which suggests lawmakers might come back in 2009 with new legislation expanding the concept to other types of local government.

Here's a link to the text of SB 1191 and a news release issued by Schwarzenegger's Press Office.

EE Times: European firms engaged in R&D consortium to drive down cost of fiber optic infrastructure

LONDON — Optical components specialist Ignis Photonyx AS (Birkeröd, Denmark) is leading a European R&D project dubbed GigaWaM, that will tackle one of the biggest barriers to the uptake of next-generation broadband access technology Wavelength Division Multiplexing (WDM) PON -– the current high cost of the components needed to deliver a wavelength to each customer's home.

One of the major partners in the project — which is being funded by the European Commission by approximately $4.7 million — is Ericsson AB.

The GigaWaM (Gigabit access passive optical network using wavelength division multiplexing) team also includes two German firms, component manufacturer FiconTEC GmbH and laser diode vendor VertiLas GmbH , and focuses on developing "application specific optical components... with a high level of integration in addition to new manufacturing processes" with a view to enabling a WDM-PON system cost per subscriber tha is lower than current GPON systems can manage.

Palo Alto fiber project represents important test of open access concept

Here's an update from the Palo Alto Daily News on Palo Alto, California's efforts to put in place an open access fiber optic network. If the city council gives the OK to this project -- which doesn't require the municipality to fund or operate the system -- it will be a renewed test case of the open access network concept .

The open access model is emerging as a public/private initiative to build out broadband faster than the proprietary infrastructure owned and operated by telcos and cable companies which are unable and/or unwilling to invest in upgrading their plants. The latter have resisted open access initiatives by local governments, arguing they represent unfair competition and in some cases have gone to the courts to seek to halt the projects.

That's a poor strategy because the telcos and cable companies would benefit from open access fiber projects since they could sell customers improved IP-based services faster than they might otherwise could since it would take far longer for them to build their own proprietary fiber infrastructures. By going to court to block or slow these projects, the telcos and cable companies are shooting themselves in the foot. They also risk provoking local governments to counter with eminent domain actions to take over aging and increasingly obsolete metal-wire based systems in the name of economic development.