Private, public sectors clash on broadband deployment

As fiber optic guru Tim Nulty accurately observed, wireline telecommunications infrastructure is a natural monopoly. That fact has spawned conflict between the private and public sectors over which will build out infrastructure to provide modern IP-based services. At issue in this confrontation that has played out throughout much of the United States over the past decade is who will get first rights to build since whoever deploys infrastructure first dominates the market given its monopolistic nature.

But there's more to it than that. Both sides have conflicting agendas. The private sector telcos and MSOs (cable companies) want to maintain an open ended option to build whereas public sector entities like muncipalities motivated by constituent pressure to rapidly deploy, pressure that naturally increases over time as demand for broadband-based services from consumers and businesses grows. In that regard, time is on the side of the public sector. That reality has spurred private sector players to employ litigation to buy time to preserve the option to serve a given area.

Case in point: this week, a Minnesota judge ruled this week that Minnesota cities have the authority to issue bonds to finance community fiber-optic networks. Monticello, a town of 12,000, has been locked in a legal battle with its incumbent phone company, TDS Telecom, which filed a complaint to prevent the city from building a network its citizens overwhelmingly approved in a referendum last year, according to Christopher Mitchell, Director of the Telecommunications as Commons Initiative for the Institute for Local Self Reliance (ILSR). “All along, we have said that this lawsuit is frivolous and was merely a delaying tactic,” Mitchell said in a news release. Mitchell adds that TDS "was merely trying to protect its monopolistic interests, much to the detriment of the citizens of Monticello who clearly want a local, accountable alternative to existing services.”

More delay could be in store. ILSR reports Monticello had to put the project on hold until the case was decided and escrowed funding until the case is fully resolved and all appeals are exhausted.

At present, the rules allow private sector providers to game the system to buy time. Even if they lose on the merits of muni fiber project legal challenges as in this case, they still win because they've achieved their goal of buying time to exercise their option to build. The problem is that option is currently open ended at a time when the nation is falling farther and farther behind on broadband and time is of the essence.

It needs to be tightened up with legislation that would give either public or private sector providers the option to build broadband infrastructure and subject the party exercising the option to deploy it to stringent oversight including incremental progress deadlines, late penalties and completion bonds.

Limited DSL range disappoints in Western Massachusetts, divides towns into digital haves and have nots

As reported earlier this year, Verizon is rolling out DSL in 24 Western Massachusetts towns. But state Rep. Denis Guyer, D-Dalton, is hearing from irate constituents who understandably believed that if their town is getting the service, that's just what it means and are flummoxed that they're still stuck with dialup or forced to suck a satellite.

The problem is Verizon is using underpowered DSL technology -- which should be dubbed "Doesn't Serve Lots"-- that can only serve parts of the towns. This puts pols like Guyer who are pushing to bring their districts into the modern age of telecommunications in a tough spot since voting districts don't necessarily coincide with DSL availability limits. For those covered by Verizon's DSL deployment, pols like Guyer look like a hero. But from the perspective of his constituents outside Verizon's DSL service limit, he looks like a ineffective bum. As this blog notes, like politics all broadband is local.

The item published in the North Adams Transcript is aptly headlined Guyer says Verizon's Broadband not so broad. So true for not only Western Massachusetts but sadly anywhere in the U.S. served by feeble telco DSL.

Pols pay lip service to vague "national broadband policy," support time wasting availabilty studies

In this election season, politicians are paying lip service to the idea of universal broadband access in the United States. The problem is just that: lip service in a support of a "national broadband policy" to spur broadband infrastructure rollout and studies to obtain "better data" on where broadband is and isn't.

Re the former, exactly would that policy be? They (and unfortunately too many advocates) are not saying. And in the unfortunate absence of specifics, they make it seem as if they would prefer the telco/cable duopoly be nationalized in order to speed broadband deployment. If that's what they're advocating, they ought to have the guts to say so directly instead of chanting repeatedly that the U.S. needs a "national broadband policy."

Re getting better data on broadband availability, that's a sucker's game that plays straight into the telco/cable duopoly's strategy of buying time to "study" the issue without having to spend a single dime on expanding their broadband infrastructure. Even if availability throughout the U.S. was extensively mapped down to the census tract level, we won't know much more than we already know right now: that the nation's telecommunications infrastructure is shot through with broadband black holes of all sizes, some massive encompassing entire communities and some as small as part of a single block. Politicians already know this, having heard from increasingly irate constituents tired of being forced to choose between obsolete dial up and substandard, costly satellite Internet service.

Aussies feel pull of broadband black holes

Just like their American counterparts who suffer from broadband black holes in metro areas, lots of Aussies are also relegated to dialup. Take the Adelaide metropolitan area, for example, where government statistics show 55,000 homes and businesses cannot cannot access fixed-line broadband internet services. Keep in mind this isn't the remote Outback we're talking about here.

The usual suspect: the limited range ADSL deployed by the big Australian telco, Telstra. Read the item in Adelaide Now.

AT&T will likely abandon residential wireline segment, U-Verse in early 2010

Sometime during the first two quarters of 2010, AT&T will probably become a pure play wireless company in the residential market, abandoning its Project Lightspeed/U-Verse deployment as part of a general retreat from the wireline-based residential/home office market segment.

The nation’s dominant telco — like other telcos — has been losing landlines to wireless phone service for several years now. When AT&T pulls the plug on U-Verse, which it began rolling out in selected markets in 2006 and which continues to fall behind deployment targets, it will likely cite unanticipated cost, technological and competitive market challenges.

The Achilles Heel of Project Lightspeed/U-Verse lies in the technological shortcomings of digital subscriber line (DSL). While DSL allows AT&T and other telcos to provide broadband over their existing copper cable plants, it’s hobbled by very limited range. When telcos first deployed ADSL around at the start of the decade, DSL’s limited range forced telcos including AT&T into a lose-lose proposition. Either they could spend significant sums of money installing remote DSLAM terminals to extend DSL’s notoriously feeble reach or leave money on the table in the form of lost opportunity costs, unable to serve subscriber premises not located close enough to their CO’s (central switching offices).

ADSL’s limited range also makes for unhappy customers who believe they are purchasing a particular speed tier only to find themselves involuntarily downgraded because the DSL signal isn’t sufficiently robust to support the level of service they ordered.

VDSL, the upgraded version of DSL that AT&T utilizes in its hybrid fiber/copper Project Lightspeed deployment, suffers from even greater range limitations. As such, it requires far more field equipment and fiber/copper interface cabinets (VRADs) than ADSL since VRADs can serve only premises located within 3,000 feet. While providing theoretical downside throughput of 25 Mbs, VDSL over copper also suffers from limited ability to scale up bandwidth to 100 Mbs and higher in order to remain competitive —at least when it comes to video — with MSOs (cable providers) and pure fiber triple players like Verizon and Surewest Communications.

Some market observers believe once copper has reached its throughput limit — many would maintain it already has — all AT&T has to do is change out the old copper for new fiber. That isn’t likely to happen. AT&T won’t bear that additional and substantial CAPEX burden and threaten its generous stock dividends when it is already struggling with the cost of the limited Lightspeed plant it has deployed to date and is reportedly cutting expenditures on it.

Additionally, given its existing alliance with Dish Network (to be replaced with DirecTV starting Jan. 31, 2009), it can still offer video without the associated CAPEX costs of Project Lightspeed and U-Verse just as it does with its marketing partnership with Wildblue to provide satellite “broadband” to the many residences located outside the restricted range of its DSL services.

What will happen to AT&T’s aging residential copper cable plant when it goes all wireless in this market segment? It will be put into runoff mode and minimally maintained — a plan that some would argue is already being implemented as resources have been redirected to Project Lightspeed. That will likely result in noisy and failed lines. But AT&T will probably simply pay any fines levied by regulators as a cost of unwinding its residential landline business with the expectation residential customers will migrate to its wireless service with the encouragement of limited time pricing incentives.

Dialuggers have company in high places

If you're stuck with mid-1990s era dial up Internet access, you have company in high places. For example, Congresswoman Donna Edwards, who represents a district just outside Washington, D.C., and can't get broadband service at her Fort Washington, Maryland, home. (Keep in mind this is a major metro area and hardly the kind of rural area where many erroneously believe is the only place where broadband black holes can be found in the U.S.)

According to this item in PC World, Edwards said at a a OneWebDay event in Washington that she hasn't used her home dial-up connection for months. "It's too much of a pain," PC World quoted Edwards as saying. "It's too cumbersome. All of the data, all of the information that really I most want, you can't just handle on dial-up." Very true as many frustrated dialuggers well know.

PC World reports Edwards and Federal Communications Commissioner Jonathan Adelstein called on Congress to develop a far-reaching broadband policy that would accelerate the rollout of faster broadband across the U.S. But what specifically? How about greater financial assistance for communities and local governments to build open access fiber optic last mile infrastructure for starters since the existing telco/cable duopoly apparently can't absorb the required capital expenditures. After all, if the government can come to the aid to the U.S. financial services industry with hundreds of billions of dollars, it seems to me it could also help in the development of the infrastructure over which finance and commerce is increasingly transacted. A bonus would be increased economic activity as indicated by this California study issued last November that concluded the state 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 broadband technology.

"Behold America's broadband backwater"

Behold America's broadband backwater. For the nation that pioneered the Internet, extending fast connections to small towns and rural areas has proved a daunting challenge. Carriers are loath to build networks where they can't sell service at a profit, and since 2003 more than $1.2 billion in federal loans aimed at helping private carriers serve remote areas has addressed only the most extreme cases. According to a study by the Pew Internet & American Life Project, released in July, only 38% of rural American households have access to high-speed Internet connections. That's an improvement from 15% in 2005, but it pales in comparison with 57% and 60% for city and suburb dwellers, respectively.

The lack of fast Web access is helping create a country of broadband haves and have-nots -- a division that not only makes it harder for businesses to get work done, but also impedes workers' efforts to find jobs, puts students at a disadvantage, and generally leaves a wide swath of the country less connected to the growing storehouse of information on the Web -- from health sites to news magazines to up-to-date information on Presidential candidates. "Broadband is a distance killer, which can especially help rural Americans," says John Horrigan, a Pew researcher. "Broadband is not just an information source for news and civic matters, but it's also a pathway to participation."