FCC: "Significant and persistent" Internet infrastructure deployment gap leaves 26 million Americans offline

The Federal Communications Commission reports this week that a "significant and persistent deployment gap" in Internet telecommunications infrastructure deprives as many as 26 million Americans from Internet access. "This significant and persistent deployment gap is particularly concerning in light of the substantial and growing costs of digital exclusion: Being unable to subscribe to broadband in 2011 is a much bigger obstacle to healthcare, educational, and employment opportunities that are essential for consumer welfare and America’s economic growth and global competitiveness than it was even a few years ago," the FCC notes in its seventh annual report to Congress on the availability of advanced telecommunications capability as mandated by the Telecommunications Act of 1996.

"We thus must conclude that broadband is not being deployed to all Americans in a reasonable and timely fashion, and we underscore how much work remains before we can conclude that all Americans are served by broadband."

In addition, the FCC rejected arguments by mobile wireless providers that their service constitutes Internet infrastructure that's sufficiently robust at at time when the Internet is becoming an all purpose telecommunications system transporting an exponentially growing amount of voice, data and video traffic.

"While use of mobile broadband is growing, that growth to date is mainly in lower speed ranges that may not be able to support the applications and services identified by Congress, such as high-quality video," the FCC's report states. "MetroPCS and others ask the Commission to reverse its conclusion, given the prevalence of wireless technology," the report continues. "While MetroPCS and others have noted the general expansion of mobile wireless across the country, they failed to demonstrate that wireless broadband is provided at 4 Mbps/1 Mbps actual speed (or reasonable proxy) in the unserved areas."

Most importantly, the FCC identifies the key reason why so many Americans remain disconnected: investor owned providers can't profitably earn a return on their investment -- mostly upfront and ongoing labor costs -- in order to justify building out their networks to serve more premises. "In the absence of programs that provide additional support, the private sector will not bring broadband to Americans living in areas where there is no business case for operating a broadband network," the report states.

Short of labor costs declining dramatically, that will continue to be the case. And unless communities explore alternative nonprofit business models such as municipal and cooperatively-owned open access fiber to the premises infrastructure, the FCC will continue to report on a "significant and persistent" infrastructure gap next year and subsequent years.

Battling over accuracy of broadband maps plays into hands of legacy providers

Readers of this blog know that I've long regarded so-called "broadband mapping" as well as as focusing on "broadband adoption" as strategies cooked up by the PR shops of the big legacy telco and cable companies to divert attention away from the lack of advanced telecom infrastructure. As long as people are battling over the accuracy of "broadband maps," they aren't taking matters into their own hands and money isn't being invested to construct fiber to the premises telecom infrastructure to fill in the availability gaps the mappers are attempting to document.

The Associated Press reports Vermont Gov. Peter Shumlin is steamed that existing "broadband maps" -- probably including the useless National Broadband Map paid for by our federal tax dollars -- show his home near Putney, Vermont has DSL service. Not true, the guv says. So he's countered with his own state-run mapping program, BroadbandVT.org

Instead of trying to see who can most accurately map broadband black holes -- an exercise about as useful as mapping the celestial variety -- Vermonters should call upon their independent New England spirit and create cooperatives to build fiber to their homes and businesses. That spirit is apparently alive and well in western Massachusetts, where the Wired West announced this week that several towns voted in favor of moving forward to formalize creation of a municipal telecommunications cooperative to build sorely needed fiber to the premises telecom infrastructure.

Despite growth of Internet telecommunications, majority of employers don't allow telework

We may be living in the era of Internet telecommunications where most any generation, analysis and manipulation of words and numbers can be done from most anywhere having adequate telecom infrastructure.

But for most American businesses, that fact hasn't yet fully registered. Most still believe this type of work can only be done in office buildings and cubicles, which in turn reinforces that time sucking activity known as commuting. At a time when people are strapped for time and want to reduce their carbon footprints. And exercise more and perhaps lower their employers' soaring health care costs in the process.

The results of a random telephone survey of nearly 10,000 businesses in a dozen states last year found only 23 percent allow telework. The results are reported in a white paper issued today by Connected Nation, Leveraging Technology to Stimulate Economic Growth.

AT&T exec suggests wireless will save its residential market segment

AT&T may be the nation's largest telecommunications company. But its size hasn't helped it meet the challenge of upgrading its cable plant to transport Internet protocol-based services. AT&T provided wireline Internet connectivity first through dial up and ISDN connections in the early 1990s, and then DSL as the 1990s turned into the 2000s. Starting in 2006, AT&T brought fiber closer to customer premises -- but not to them -- with its FTTN (Fiber to the Node) U-Verse service utilizing VDSL. Some new, dense greenfield developments received U-Verse service via direct fiber to the premises connections.

New home construction cratered shortly after U-Verse rolled out, leaving only more challenging FTTN brownfield opportunities. They are more challenging because the old cooper cable plant designed for POTS (Plain Old Telephone Service) is used to carry high compressed VDSL signals that quickly degrade with distance, limiting the size of the potential U-Verse customer base.

Faced with these challenges to reach customer premises and seeing strong growth on the wireless side of its business, AT&T not surprisingly sees its future in the wireless space. "The future is wireless broadband and we must keep that in front of us at all times," Tim Ray, executive director for AT&T External Affairs in Northern California, said at a recent roundtable discussion hosted by Sacramento-based Valley Vision.

In 2010, Valley Vision formed the Connected Capital Area Broadband Consortium (CCABC), a coalition "which seeks to identify and coordinate strategic broadband investments in the six-county Sacramento region aimed at improving broadband infrastructure, access and adoption." Ray, who sits on Valley Vision's board of directors, appeared to suggest wireless Internet connectivity will be able to substitute for wireline connectivity, noting "27 percent of homes no longer have wire line and this trend will continue to grow."

Ray's wrong and engaged in wishful thinking. There's currently nothing indicating wireless Internet service -- which is aimed at mobile devices with a low bandwidth allocation per customer  -- can provide sufficient capacity to handle burgeoning bandwidth consumption and be able to reliably deliver to customer premises high definition video content and applications like video conferencing and telemedicine. Indeed, AT&T's wireless infrastructure is already choked with far lower bandwidth traffic from devices such as the iPhone.

AT&T is in conflict with its own business model. It's in the telecommunications business which by its nature requires lots of CAPEX and OPEX. But it expects to get a full ROI within 5 years on its CAPEX. That's not going happen in most places except perhaps in new dense greenfield developments, which as previously mentioned also aren't happening.

More patient capital the key advantage of community telecom infrastrucuture

Craig Settles explains the advantages of community fiber telecom infrastructure in this Government Technology piece.  The key advantage over investor-owed infrastructure can be summed up in three words: more patient capital.  Telecom infrastructure built by local governments and cooperatives doesn't need a return on investment in just 3-5 years -- an inherent flaw of the investor-owed business model given the high capital cost of constructing and operating it. 

Settles correctly notes there is money to be made for private players -- if they are willing to partner with communities in open access fiber projects and abandon the outdated business model of 100 percent ownership and monopolistic control.

Communities must build fiber telecom infrastructure where incumbents cannot

As bandwidth demand grows exponentially for Internet protocol-based telecommunications, Geoff Daily aptly notes the debate over what infrastructure can best deliver it to customers is over. Only fiber can do the job, he writes on his blog App-Rising. The task, therefore, is to bring it to their doorsteps. "With this context we can now define fiber-to-the-home as bringing the full power of the Internet to your front door," Daily writes.

Indeed. Daily adds to get there, public policymakers and consumers must be educated on the significance of fiber telecom infrastructure. And we must end the useless demonizing of for-profit providers whose business models don't allow them to both bring fiber to consumers' premises and make money for their investors. Don't expect them to do something they can't.

Instead, I would add, consumers must find alternative business models to build vital fiber-based telecommunications infrastructure in their communities not served by investor-owned providers. I'm not just talking the talk here. I'm walking the walk in my own community. I encourage other communities to do so as well.

Obama administration should focus on community-run open access fiber, not 4G wireless

The Obama administration's recent announcement of its National Wireless Initiative to subsidize the build out of 4th generation (4G) wireless Internet to make it available to least 98 percent of Americans appears based on the assumption that cutting edge wireless telecommunications technology can play a central role in the nation's telecom infrastructure.

I'm not convinced. 4G wireless is only just emerging and remains unproven in terms of whether it can deliver sufficient bandwidth at the same time bandwidth demand is increasing exponentially. It's primarily designed for mobile use and portable devices such as smart phones and IPads that are gobbling bandwidth at such a prodigious rate that providers have a difficult time meeting the demand. That's why they ration bandwidth and penalize wireless customers who use more than 5 GB per month. The rationing is due to a more basic telecom infrastructure problem: the lack of adequate wire line infrastructure to "backhaul" or feed the distribution system that supports that huge and growing universe of wireless devices.

The administration's wireless initiative seems to suggest that people can "cut the cord" for Internet access just as they have done for wire line voice service, which requires far less bandwidth. 4G wireless, the administration apparently believes, can provide access to medical tests, online courses and applications that have not yet been invented.

That remains to be seen. What is certain now is wire line fiber optic connections to American households and businesses can deliver more than enough bandwidth for today's needs without the need for rationing plus plenty of additional capacity for those yet to be invented applications. The administration's telecom infrastructure efforts should focus on bringing it to the 24 million Americans that Federal Communications Chairman Julius Genachowski said remain disconnected from the Internet. "The infrastructure simply isn’t there," Genachowski explained.

The reason: It's simply not sufficiently profitable for investor owned providers to build it. Alternative, lower cost methods are urgently needed. The best and most rapid way to bring about these alternatives is to focus at the local level and provide local governments and consumer telecom cooperatives technical assistance grants and low cost loans to build open access fiber networks to serve their communities.

The administration's health care reform legislation allocates $5 billion in technical assistance grants to for new health insurance cooperatives to pool risk and purchase health coverage for their members. The administration should provide a similar amount of technical assistance funding for local governments and telecom cooperatives to help them plan and design open access fiber optic telecom networks.