Rural electrification better model for driving expansion of next generation networks

Give a listen to Christopher Mitchell's interview on the public affairs radio program Minnesota This Week. Mitchell is director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance.

Near the end of the interview, Mitchell advocated government loans and loan guarantees to telecom cooperatives similar to those made by the U.S. federal Rural Electrification Administration to electric power coops starting in the 1930s. Mitchell said this would be a better policy than subsidizing investor owned telcos.

Such subsidies, Mitchell suggested, don't provide sufficient incentive to and accountability of private providers to offer quality service and network upgrades. Since community based cooperatives don't have to earn a return for investors, they can concentrate solely on serving their members.

Local governments, coops better positioned than legacy providers to meet burgeoning bandwidth demand

Check out Lance Whitney's July 21 cnet News article that illustrates the growing conflict between burgeoning bandwidth demands of Internet video content and the incremental billing business models of the legacy telco and cable providers that ration bandwidth.

Faced with the explosive demand for bandwidth, the legacy providers are responding the only way they know how given their business models: charging more money for more bandwidth via tiered service offerings and rationing bandwidth with the use of caps.

This puts the legacy providers in a bad spot since incremental bandwidth pricing and punitive caps will only tick off their customers. What's worse is the legacy providers can't upgrade their infrastructures to accommodate the jump in bandwidth demand and leave room for future growth over the foreseeable. That's because they are owned by shareholders who have been with them for decades and expect a nice safe, utility company style dividend -- money that can't be allocated to capital expenditures.

The take away here is alternative providers such as local governments and consumer telecom cooperatives who don't have to pay those fat shareholder dividends are better positioned to deploy fiber to the premises infrastructure that can easily deliver the bandwidth needed today and leave headroom for tomorrow.

FCC: 14 to 24 million Americans lack Internet access

Readers of this blog know from past posts on U.S. Federal Communications Commission reports on broadband infrastructure deployment know that it effectively ground to a halt in 2006 as legacy telco and cable companies reached the limits of their respective business models.

Four years on, the FCC has formally recognized this reality, noting in a news release today announcing its latest report under Section 706 of the Telecommunications Act of 1996 that between 14 and 24 million Americans "still lack access to broadband, and the immediate prospects for deployment to them are bleak."

As with past 706 reports, the table titled Percentage of Residential End-User Premises with Access to High-Speed Services by State shows those states where telco DSL deployments stalled because of technological and business model constraints.

Click here for the full report.

El Dorado County co-op seeks fiber-optic Internet access

Nice article in today's Sacramento Bee on the telecom consumer coop formed by your blogger...

Telecom caught at crossroads of change without a sustainable business model

IBM has issued a comprehensive outlook on the future of the telecommunications industry. To summarize, it describes an industry caught at the crossroads of change amid rapid growth of Internet protocol-based telecommunications without a sustainable business model. No surprise there since telecom as an industry -- like the cable industry -- is based on a closed, proprietary system put in place many decades ago to deliver voice or television programming over copper cable plant. It wasn't designed with the Internet in mind and thus doesn't have a cheap, easily executable upgrade path to put it in tech speak.

Moreover, neither telcos nor cable providers have a business model that will allow them to construct next generation, Internet protocol-based fiber to the premises infrastucture that can deliver multiple digital services to most all premises within their service areas. America's biggest telco, AT&T, admitted as much in a statement published in the New York Times yesterday directing customers not served by its wireline plant to its "broadband" satellite service.

Their corporate cultures naturally resist change. That's why they deploy battalions of lawyers, lobbyists, flacks and astroturf groups to defend the status quo and fight the future while preserving their conservative, risk averse business models based on the incremental billing schemes of the past -- even though these schemes are not a good fit with next generation telecom services.

Consequently, I believe we'll see a combination of the "Market Shakeout" and "Survivor Consolidation" scenarios in the IBM forecast come to pass. In fact, it could be aruged the "Market Shakeout" scenario in which "government, municipality and alternative providers extend ultra-fast broadband to gray areas, while private infrastructure investments are limited to densely populated areas" has been already playing out over the past several years.

Independent New Englanders take control of their telecom infrastructure

Last year, 22 central Vermont towns took charge of their telecom infrastructure by forming a public/private partnership to deploy 1,400 miles of aerial fiber-optic lines to provide high-speed Internet access, phone and video.

True to their fiercely independent reputation, more New Englanders in a neighboring state are doing likewise. Forty seven Western Massachusetts towns plan to form a non-profit to plan and build a fiber optic network to serve a part of the U.S. that has been described as a "broadband ghetto." A key driver is a desire to provide an economic boost to the region.

Here's an excerpt from the Berkshire (Massachusetts) Eagle story:

"This wasn't a hard sell," noted David Greenberg, chairman of the WiredWest steering committee. "It's pretty much a no-brainer -- economic development is the driving force. Without this major initiative, Western Mass is going to be sinking fast."

Once the non-profit has been formed, financing options would have to be identified, and preliminary design and cost estimate work would start.

None of the cost of the project would be borne by the towns, Webb said.

Ongoing maintenance cost and debt service payments would come from money paid to the agency by the service providers, added Andrew Michael Cohill, president of Design Nine, a consultancy hired to help WiredWest through the next phase of development.

"This is a jobs creation and a business attraction project," Cohill said. "And the highest proportion of home-based businesses in the state are in Western Mass."

DSL reaches end of line as interim pre-fiber to the premises technology

Digital Subscriber Line (DSL) was deployed by telcos starting in the late 1990s as an interim technology to bring Internet Protocol-based telecommunications services to customer premises before fiber optic connections could be brought to them.

Now DSL faces a crisis that dramatically shortens the days it can play this role. While DSL allows telcos to use existing copper plant designed for Plain Old Telephone Service (POTS), that copper plant is aged and deteriorating quickly. DSL tends to work best over newer, more pristine copper. But there's not much of that (if any) being deployed these days. Meanwhile, DSL customers complain about connections that run slower than advertised or are prone to outages as DSL signals struggle across ancient pairs of twisted copper.

And since about 2008 and amid the current economic downturn, telcos have pared back their DSL rollouts. Verizon concentrated on fiber to the premises via its FiOS product offering, prompting customer complaints it was neglecting its copper plant and repairing it with bubble gum and duct tape.

Here's the crisis: Now that DSL has served its role as an interim IP solution on the road to fiber to the premises, the United States is not prepared to make the transition to fiber. Stunningly, this gap in the technology transition isn't addressed in the Federal Communications Commission's National Broadband Plan issued this past spring. Nor is there any indication the nation's two largest telcos are seriously addressing it. Verizon recently halted build out of its FiOS fiber plant. AT&T opted for a hybrid model of fiber to the node and copper to the premise for its U-Verse product. But the VDSL transmission technology that powers U-Verse suffers from far greater distance limitations than previous generations of DSL and greatly limits U-Verse's service footprint.

It will fall to smaller, locally owned and operated telcos, local governments and telecom cooperatives to pick up where DSL left off (or in many cases, left out for those not serviceable by DSL). The National Broadband Plan should recognize that DSL over copper is dead or dying and support efforts by these entities to deploy fiber to the premises with technical assistance grants and infrastructure construction grants and low cost loans.

Cruel irony of incomplete telecom infrastructure plays near Wisconsin state capital

One of the cruelest ironies of America's incomplete telecommunications infrastructure is playing out not far from Madison, the capital of Wisconsin. The town of Berry, population 1,124, isn't large enough to attract investor owned providers. But at the same time, the incumbent provider, TDS Telecommunications, claims the federal government declined its request for subsidies for infrastructure improvements through funding earmarked for this purpose in the American Recovery and Reinvestment Act of 2009 because the town -- located just 20 miles from the capital -- isn't considered underserved, according to TDS Telecommunications.

The Milwaukee Journal Sentinel reports Berry is has filed a complaint with the Wisconsin Public Utilities Commission saying TDS Telecommunications is failing to provide required service to the community. Community residents contend the poor level of service is making it difficult to work remotely from home and is making their properties less marketable.

The good people of Berry and their town leaders would be well advised to take matters into their own hands and begin working on a Plan B that could get them improved service faster than their PUC complaint, which could end up in the courts and take years to resolve even if they prevail. They should begin planning today to build publicly (or if that's not feasible cooperatively) owned fiber to the premises infrastructure.