Analysis & commentary on America's troubled transition from analog telephone service to digital advanced telecommunications and associated infrastructure deficits.
Sunday, July 25, 2010
Residents near two state capitols struggle with outmoded telecom service
As noted on this blog recently, the town of Berry located near Wisconsin's capital, Madison, is a case in point. Ditto for some folks living just four miles from the Vermont statehouse in Montpelier, according to this item from ABC News.
Like their countparts several states away in Berry, the natives are restless and their patience worn thin after much talk and promises but little action. While telecom infrastructure upgrades aren't yet certain, it's clear more talk is on tap. Vermont gubernatorial candidates are raising the issue of lack of advanced telecom infrastructure in year's campaign, the ABC News article notes.
Rural electrification better model for driving expansion of next generation networks
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.
Saturday, July 24, 2010
Local governments, coops better positioned than legacy providers to meet burgeoning bandwidth demand
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.
Tuesday, July 20, 2010
FCC: 14 to 24 million Americans lack Internet access
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
Saturday, July 10, 2010
Telecom caught at crossroads of change without a sustainable business model
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.
Tuesday, June 29, 2010
Independent New Englanders take control of their telecom infrastructure
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."