Broadband Expert Survey of US Consumers Finds 94% Believe They Are Overpaying for Their Broadband Service - Houston Chronicle

Broadband Expert Survey of US Consumers Finds 94% Believe They Are Overpaying for Their Broadband Service - Houston Chronicle

In a nationwide survey of more than 30,000 online consumers conducted by Broadband Expert, an overwhelming majority of respondents -- 94% -- believe they are paying too much for their broadband package and more than 25% have only one Internet provider to choose from. Of those surveyed 77% of respondents said they would like an easy apples-to-apples solution to be able to compare plans and prices when choosing a provider.

When asked about the ease of currently shopping for and comparing plans, 35% are totally discouraged by the complexity of comparing carriers on multiple websites. Even more alarming one-third of Americans do not know where to even start to shop for and compare broadband prices and services.

“Based on our online survey, it is clear that American consumers are frustrated with the amount they are being charged for internet access and are looking for an easy way to shop for and compare digital services such as Internet, TV and phone,” said Rob Webber, CEO, Broadband Expert. Webber goes on to say that he believes “like for like comparison of internet service providers and their packages helps encourage competitive pricing and better deals for consumers”.

Americans aren't going to get the kind of market they want until the business model changes.  Due to high barriers to entry, it's not practical to have competing telecommunication infrastructure any more than it is to have competition for other types of infrastructure like roads and highways.  What's needed is publicly or consumer owned open access telecommunications infrastructure where service providers compete on price and service.

Tweed residents angry about broadband service to the area | Northern Star

Tweed residents angry about broadband service to the area | Northern Star: "When we lived in West Tweed on Kennedy Dr we got told we were too far from the interchange."

Mr Vivian was stuck with Telstra's mobile broadband solution.

"The only one we can get reception for in Tweed is Telstra 4G," he said.

"It's $60 for eight gigabytes.

"But it's so slow you might as well not use it sometimes."

This is occurring in Australia.  However, the same scenario is likely also playing out in the United States.

Google Fiber expansion unlikely to solve America's incomplete infrastructure problem

As I recently blogged, market failure dogging the U.S. telecom infrastructure that continues to leave millions off the Internet grid calls for new business models.  Nearly six years ago, I speculated big Internet content amalgamators flush with cash (i.e. Google, Yahoo!) could might acquire legacy telcos and cablecos and upgrade their incomplete and inadequate infrastructure with their own.  That post wasn't fully on the mark because it didn't include the possibility that the content players' "big play for the pipes" as I termed it would be to overbuild the incumbents with their own infrastructure as Google recently did in a single American city: Kansas City. 

This Wired piece is sparking speculation that Google might in fact be planning an effort to expand its proprietary fiber to customer premises infrastructure supported not just by customer service charges but also by its own content, similar to the incumbent cableco business model.  "If it turns out Google Fiber helps Google sell more (and more valuable) ads and content," the Wired article notes, then building out more fiber would support Google's business model.  However, the article notes that the cost of doing so would strain even Google's vast economic resources, leaving the U.S. with what President Barack Obama described in his 2012 State of the Union Address as an "incomplete high-speed broadband network."

Another recent article posted at ZDNet points to the same conclusion.

Europe Hurting Telecom Industry: Alcatel-Lucent CEO

Europe Hurting Telecom Industry: Alcatel-Lucent CEO: European regulations are stifling innovation within the telecom industry and preventing its growth, Ben Verwaayen, CEO of Paris-based telecom equipment maker Alcatel-Lucent has told CNBC.

"It's not just a French problem it's a European problem. If you look to why it is that the U.S. is so much [more] ahead than Europe it's because of the business environment and what you're allowed to do because this is a regulated business. The situation in Europe is very unfortunate," Verwaayen said in an interview telecast on Thursday.

U.S. ahead of Europe?  With about 20 million Americans lacking facilities-based Internet service?  Clarification, please.

BellLabs: Soaring VOD, OTT Video Usage Shaking Up the IP Edge

BellLabs: Soaring VOD, OTT Video Usage Shaking Up the IP Edge: Bell Labs researchers make their forecasts in a report titled “Video Shakes Up the IP Edge,” in which they predict that by 2020, U.S. video consumers will access a whopping seven hours of video each day, up from 4.8 today. Consumers also will turn increasingly to tablets to watch videos whether at home or on the go, says BellLabs.

This trend will be accompanied by “a dramatic shift in viewing habits,” as viewers switch from watching broadcast content to video-on-demand (VoD) services, demand for which will grow to 70% of daily consumption from 33% today, the report says. The researchers also note that cloud services, news sites and social networking applications will become more video-based and be accessible anywhere, anytime via tablets, which suggests Internet video content will increase 12 times.

These trends, according to Bell Labs’ predictions, “will stretch the capabilities [of] the residential broadband networks many service providers use today. As the delivery of video content rapidly moves from traditional broadcast TV to the ‘unicast’ delivery of personalized content to individuals, disproportionate pressure will be placed on the ‘IP edge’ of these networks,” where most of the network ‘intelligence’ needed to deliver personalized content on-demand resides.

In case anyone was wondering why fast fiber to the premises Internet infrastructure is now an imperative.  And consider the additional demand should personal video communications take off as a new (not so new, actually) app.

Mississippi map malarkey

A fundamental purpose of a map is to plan a route to an end point – a destination.  But when it comes to what’s called “broadband mapping,” the goal isn’t the destination.  In fact, this wasteful activity has resulted in a circular journey to nowhere, diverting precious resources that could otherwise be invested in building out Internet telecommunications infrastructure as this boondoggle out of Mississippi painfully illustrates. 

It’s a good thing the United States chose not to remedy the market failure that produced large gaps in electric power and telephone service availability in the early part of the 20^th Century by engaging in folly such as drawing up maps of existing electrical and telephone service and promoting electricity and telephone adoption where there was no service.  If that had been the policy, many areas of the nation might not have had power or telephone service until well into the 1950s and 1960s.

Telecom coops offer much needed alternative to build out U.S. Internet infrastructure

This Wall Street Journal article explores the Faustian bargain AT&T, America's largest wireline telecom provider, struck with the U.S. Federal Communications Commission to begin winding down its obsolete copper Publicly Switched Telephone Network (PSTN):

Mr. Stephenson himself has made it clear that AT&T would rather just sell off its regulated phone territories the way rival Verizon has done. But those sales haven't worked out swimmingly for the buyers, so now buyers can't be found, and neither would regulators likely bless further sales.  AT&T's plan, then, amounts to a compromise: AT&T will spend several billion dollars making undesirable investments if Washington will relieve it of the unsustainable regulatory burdens associated with the old copper voice network.

This is not an optimal solution for either AT&T's shareholders or for the many Americans who despite AT&T's expansion plans would remain disconnected from the Internet and the Voice Over Internet Protocol (VOIP) service it could provide to replace voice telephone service delivered over the nation's aging copper Publicly Switched Telephone Network (PSTN).  An alternative is clearly needed.

The good news is one exists as does its funding mechanism: cooperatives.  In the 1930s, the U.S. Department of Agriculture's Rural Utilities Service (RUS) made funding available to coops to build the needed infrastructure to deliver electric power and phone service.  The RUS remains in place today.  Given the problems investor-owned telcos like AT&T face deploying needed Internet infrastructure as shown in the WSJ story, the RUS should be given a higher profile and adequately funded to facilitate the much needed telecom coop alternative for the construction and operation of Internet infrastructure.

Telecom infrastructure demands competing business models

The Salt Lake Tribune has published a set of articles on UTOPIA, a public open access fiber network.  For other publicly owned and operated telecommunications infrastructure, the take away is they are like building and financing toll highway systems over a period of many years.  A prudent, long term financial plan is essential and their success can't be measured in isolation over the short term.

That's why investor owned incumbent telco and cable providers haven't built out fiber to the premise infrastructure. Their shareholders expect a certain return on investment within five years or less as well as hefty dividends.  Infrastructure projects have long term time horizons that aren't compatible with their business models.

Some of those interviewed in the articles assert that UTOPIA and other publicly operated telecommunications networks shouldn't be competing with incumbent, investor owned telcos and cablecos.  I disagree.  The challenges of constructing and operating telecommunications infrastructure demand competition to produce the best business models demonstrating the greatest potential for long term viability.  It's not an easy task.  The incumbent providers been unable to produce one.  That has led to extensive market failure in wireline telecommunications services, leaving millions of Americans without premises Internet access.  UTOPIA and other non-incumbent operators despite their shortcomings are to be commended for making the effort to develop alternatives to build and construct this essential infrastructure for the 21st Century.