Feds shouldn't provide broadband funding directly to large telcos, cablecos

From Bloomberg today:

March 16 (Bloomberg) -- Groups representing companies including Comcast Corp. and AT&T Inc. pressed U.S. regulators to let broadband providers and equipment makers apply to a federal program disbursing $4.7 billion in grants to expand high-speed Internet. Companies already providing broadband “have extensive technical, financial, and managerial experience and expertise,” Curt Stamp, president of the Independent Telephone and Telecommunications Alliance, told a meeting in Washington today. The program is part of the U.S. economic recovery package.

Bad idea. True, these companies have technical expertise to deploy broadband infrastructure. But their role -- except perhaps for small, locally owned providers -- should be limited to that when it comes to distributing $7.2 billion in grants and loans contained in the recently-enacted federal economic stimulus legislation. They should NOT be the direct recipients of any grants or loans for last mile infratructure.

Instead, the stimulus finding should be directed to nonprofit telecommunications cooperatives and local government entities to put in place buried and aerial fiber optic cable and distribution plants over the last mile the telco/cable duopoly has neglected for years.

We should not forget the lessons of history and repeat the fiasco following the enactment of the Federal Communications Act in 1996 that saw an estimated $200 billion in tax breaks and subsidies to deploy advanced digital telecommunications infrastructure virtually disappear, spawning in the current plague of broadband black holes instead of near ubiquitous fiber that was to be in place by 2006.

If the feds directly provide the telco/cable duopoly broadband infrastucture monies as either part of the stimulus measure -- described by the Obama administration as a down payment on America's sorely needed telecommunications upgrade -- or in follow on funding, the U.S. will likely find itself shortchanged again with a substandard telecommunications infrastructure done on the cheap that won't meet the nation's current or future needs.

California PUC sets March 23 public meeting re broadband funding in federal stimulus act

The Schwarzenegger administration is preparing to request some of the $7.2 billion earmarked for broadband telecommunications infrastructure subsidies and loans in the recently enacted federal economic stimulus legislation.

The governor's office has asked the California Public Utilities Commission as well as the nonprofit California Emerging Technology Fund (CETF) to get stakeholder input on how best to use the CETF and the CPUC's California Advanced Services Fund (CASF) as vehicles to "quickly target initial federal stimulus funds toward California." The goal is also to determine how to leverage California’s existing broadband programs to assist applicants seeking federal funding available for broadband infrastructure in the stimulus bill.

The CPUC has set a public hearing for March 23 in San Francisco.
"We seek input from a broad spectrum of interests, including broadband providers, public agencies, and consumer groups," the CPUC's notice states.

California PUC approves broadband subsidies for 9 Northern California, Central Valley communities

The California Public Utilities Commission last week approved 40 percent subsidies for wireline broadband infrastructure build outs to 1,262 households in nine Northern California and Central Valley communities.

The $728,093 in funding for the projects comes from the CPUC's California Advanced Services Fund, which is funded by a surcharge on intrastate long distance telephone calls.

Here's the CPUC's press release.

Using U.S. economic stimulus funding for native fiber backbone and FTTH

Good piece in Network World today on using federal stimulus funding for fiber build out, both for native backbone and over the last mile. The article also touches on a point that's problematic in mainstream media coverage of broadband access: covering the issue exclusively along urban and rural lines as if it were still 1950. U.S. settlement patterns have changed substantially since then, with many Americans migrating to the exurbs, penturbs and semi-rural areas filled with broadband black holes. Here's the relevant excerpt:

In addition to building fiber backbones in rural areas, some ISPs also think that subsidizing fiber-to-the-home (FTTH) connections would be feasible for certain rural areas that have relatively high population densities. Patrick Knorr, the COO of cable and broadband provider Sunflower Broadband, says there are some suburban communities in his vicinity that have been sprouting up in rural areas that would have enough population density to justify building out FTTH infrastructure.

"Fiber to the home, like a lot of wire-based solutions, is cost intensive," he says. "But it is cheaper than DSL or coaxial cables. Fiber works better over long distances because it doesn't require as much maintenance as a lot of other technologies. The issue is that there is a significant initial infrastructure cost, which is why there should be opportunities for subsidies to build FTTH in areas that otherwise wouldn't be able to access fiber service."

The article also discusses the downside of Broadband over Power Lines (BPL), which in the opinion of this blogger isn't deserving of either investment capital or federal stimulus subsidies.

Analyst calls it wrong: DOCSIS doesn't support U.S. policy to expand broadband access

This MSNBC item quotes from an analysis by Pike & Fisher:

The Silver Spring, Md.-based research house also predicts that DOCSIS 3.0 will garner a lot of support from government officials distributing funds from the economic stimulus package.

"Considering the massive bandwidth increases that will be enabled by upgrading DOCSIS 2.0 to 3.0, the government is likely to view DOCSIS 3.0 as a most feasible and affordable near-term solution to perceived bandwidth scarcities," says P&F Chief Analyst Tim McElgunn, who authored the report.

This analysis is fatally flawed and reflects a major misapprehension of U.S. government policy. That policy is to expand broadband access -- and not to subsidize efforts by cable cable operators to increase their throughput speeds.

The issue with cable providers isn't that their broadband throughput is lacking for current needs. Rather it's the limited footprints of their local access networks that were planned decades ago when they served as single purpose TV delivery platforms that are no longer revelevant to current build out of homes and businesses that could benefit from their IP-based advanced services including high speed Internet and VOIP (Voice over Internet Protocol).

Broadband black hole preservation act introduced in Pennsylvania

In Pennsylvania, the state government controls alcoholic beverage sales via a state run monopoly. Apparently the telco/cable duopoly wants similar protection in the form of proposed legislation that would bar local governments from being involved with or helping finance the construction of local broadband telecommunications infrastructure, MuniWireless reports.

Talk about a state with mixed up crackpot regulatory policies. It treats one industry that's a naturally competitive private market (alcoholic beverage distribution) while proposing telecommunications infrastructure -- a natural monopoly -- be treated as a competitive private market and protected from government "competition."

Congressman seeks broadband infrastructure deployment to alleviate "economic disaster" in California's Central Valley

The Bakersfield Californian reports Rep. Jim Costa, D-Fresno sent a letter to President Barack Obama late last week requesting Obama create a federal economic disaster designation and declare the San Joaquin Valley its first designee.

The letter to the president requests rural broadband deployment as well as higher unemployment benefits, other infrastructure improvements to put people work, and expansion and modernization of federally qualified health centers.