As AT&T and Google push broadband adoption, the feds are non-players - CIO

As AT&T and Google push broadband adoption, the feds are non-players - CIO: Both Google and AT&T clearly see the economic incentives of bringing video and other new Web services to a wider audience over 1 Gbps connections.

Both companies also seem to want to use their fiber-optic programs to help bridge the nation's digital divide and to bring free, or nearly-free, broadband service to underserved low-income homes for those who want it.

The question remains whether their private efforts and other programs from an assortment of cable companies like Cox, Comcast, Time Warner and carriers such as Verizon and Sprint are enough to improve the number of homes in the U.S. on broadband without a big infusion of government money.

About 28% of U.S. homes still don't have broadband service, which is defined by federal officials as download speeds of least 4 Mbps.

This is indeed the overarching question as the United States reaches an inflection point on next generation, Internet-based telecommunications infrastructure. Private providers have reached the limits of their triple play business models and thus aren't likely to bring fiber connections to those 28 percent of homes that have remained unserved for going on more than a decade and reliant on dialup and satellite and where available, fixed terrestrial wireless service.

U.K.-backed FTTP builder plans first U.S. projects in California

According to the story in the Monterey County Weekly, SiFI Networks will construct fiber to the premise infrastucture in Pacific Grove using a mixed architecture apparently designed to lower deployment costs using aerial lines and existing municipal infrastructure: the sewerage system.

The Monterey County Weekly reports SiFi has London-based backers interested in U.S. projects and has targeted two California cities as the first ones.

Under the public-private partnership with Pacific Grove, the city is providing in kind services in the form of staff time for planning and permitting. SiFI Networks is seeking funding for the estimated $30 million to $40 million capital cost of constructing the network.

Why U.S. state, local governments are exploring alternative business models for fiber to the premise telecom infrastructure

Larry Irving, who served as assistant secretary of Commerce for Communications and Information and administrator of the National Telecommunications and Information Administration (NTIA), writes in The Hill that he is having a difficult time understanding why state and local governments are interested in building their own telecommunications networks.

The answer is self evident. Mr. Irving need only look at the situation in Montrose, Colorado, described in this Daily Yonder article -- which is emblematic of much of the United States. Investor-owned providers can't provide all premises reliable wireline Internet service and do so at a cost that affords good value for the consumer:

Montrose, a city of 19,000 about 65 miles from the Utah border, is a typically conservative rural area, overwhelmingly Republican but with a populist bent. Like all of the Western Slope of the state, it is not participating in the robust economic recovery seen in the Front Slope cities of Denver, Ft. Collins and Colorado Springs.

Internet service here is currently a hodgepodge. Some of us depend on broadcast towers, some on DSL from CenturyLink and some on cable service from Charter. Service is generally at less than 10MB. It’s expensive, and customer service is erratic.

It became clear to the city leadership that none of the large corporate providers were ever going to invest in high-speed broadband for the area. And while some enterprising local startups have moved to provide high-speed fiber and tower broadcast, they are capital-limited and have to charge high fees to get even a modest return on investment.

That's why the citizens of Montrose gave their municipal leaders the green light to explore alternative business models that can bring fiber to the premises of Montrose residents. City leaders recognize that technologically, fiber is the future. But that future and its many benefits will be deferred -- perhaps permanently -- unless new business models are found to make it a reality.

Hats off to Montrose, Colorado. It is taking on one of the nation's toughest and most important problems. Former U.S. Federal Communications Commission Chairman Julius Genachowski called it the "critical infrastructure challenge of our generation."

Holy fiber, Batman! The Rainbow Rabbit may be leaping into Greater Gotham

Possibly sensing weakening commitment on the part of the dominant telco, Verizon, to construct fiber to the premise Internet infrastructure to serve the greater New York City area, a Multichannel News report this week suggests Google Fiber may have greater Gotham in its sights for expansion.

According to Multichannel News, Google Fiber is recruiting a sales manager for the region but isn't confirming -- for now at least -- that it plans a fiber to the premise build in the area.

Google Fiber could also see potential opportunity next door in New Jersey, where Ars Technica reports Verizon mounted an astroturf email campaign to get the blessing of Garden State regulators to wimp out of a premises infrastructure service commitment made more than two decades ago in 1993.

Broadband faces a fork in the road - Computerworld

Broadband faces a fork in the road - Computerworld: Experts who worked on the National Broadband Plan approved in 2010 recently warned that there is still a great need for connecting unserved homes, libraries and schools with even basic broadband at less than 4 Mbps. Most of these unconnected homes are in poor inner city neighborhoods and rural areas.

Not an unexpected outcome when a "plan" is essentially an aspirational expression rather than a concrete project plan to deploy Internet infrastructure. Also, it should be noted there are plenty of unconnected homes that aren't in inner city neighborhoods and rural areas. They can be found anywhere in the United States where residential density is non-contiguous, leaving gaps and pockets of homes redlined by incumbent telcos and cable companies.

Summers urges infrastructure construction to revitalize torpid economy. How about fiber to the premise?

The Perpetual Bubble Economy - NYTimes.com: “A strategy that relies on interest rates significantly below growth rates for long periods of time virtually guarantees the emergence of substantial bubbles and dangerous build-ups in leverage,” Mr. Summers wrote recently. “The idea that regulation can allow the growth benefits of easy credit to come without the costs is a chimera.”

A better route, Mr. Summers argued, would be to run deficits, perhaps indefinitely, even during economic good times. To help the economy right now, for instance, he argued for huge infrastructure spending, especially since money is cheap and so many construction workers are out of a job.

In addition to bridges and highways, water distribution systems and other public infrastructure, why not a public works project to bring fiber optic telecommunications service to every American home and business premise? Especially when 20 to 30 percent of them are left off the Internet grid?

New Telehealth Program Aims To Increase Specialist Care in Northern California - California Healthline

New Telehealth Program Aims To Increase Specialist Care in Northern California - California Healthline
Adequate Internet infrastructure providing sufficient bandwidth is identified as a major challenge to the implementation of the program, which would alleviate the need for patients in rural areas to travel long distances to visit healthcare providers.

Colorado measure would bar Internet infrastructure subsidies to small towns served by satellite ISPs

Broadband act could expand service in Chaffee County - TheMountainMail.com: Free Content: As introduced, the bill’s language would define unserved areas as: areas outside a municipality or a city with less than 5,000 people in which a majority of households do not have access to at least one satellite and one non-satellite broadband provider.

Summed up in two words: Useless and laughable. It basically tells Coloradans with no other premise Internet options to go suck a satellite and be happy with the crappy customer experience, bandwidth "fair access" caps and poor value. A bill only the incumbent preservatives could love. Indeed, they probably drafted it.

Event highlights scarcity of high-speed Internet in rural areas | The News Leader | newsleader.com

Event highlights scarcity of high-speed Internet in rural areas | The News Leader | newsleader.com: During a break, Korte explained how he, his wife, and their business, The Balance Group, switched to 4G cellular broadband service. However the data limits cellphone providers set make business more expensive, Korte said.

They’ve had to stick with it, though, and absorb the cost from exceeding data caps.

“I go to the (cellphone provider) and say, ‘Well, we need 300 gigabytes a month. That would probably do it.’” Korte said. “They laugh at it, and tell me to go to the cable company.”

Like many residents in Augusta County and those served by the two-dozen other rural, local government officials gathered for the workshop, cable service doesn’t extend to his home.

This pretty well sums up the sorry state of Internet infrastructure in much of the United States and trying to get by on mobile wireless.

The case for overbuilding incumbent telcos and cablecos

Twentieth century, metal wire-based legacy incumbent telephone and cable companies naturally don’t like it when progress inevitably emerges in the form of 21^st century fiber optic to the premise (FTTP) telecommunications infrastructure offering the proverbial better (and faster) mousetrap as well as protection against technological obsolescence. Particularly if they have opted not to construct it and someone else is planning to do so. Especially if the new fiber infrastructure benefits from government subsidies. No fair, incumbents protest. That’s government subsidized competition that picks winners and losers and we’ll lose.

That argument cuts both ways, asserts Christopher Mitchell of the Minnesota-based Institute for Local Self Reliance (ILSR), one of my favorite incumbent spin busters. Incumbents have benefitted from favorable governmental policies that have been in place for decades including the availability of high cost subsidies and public policy that permitted them to maintain a monopoly. Not allowing government subsidization of FTTP infrastructure built by non-incumbents in the footprints of the incumbents, Mitchell suggests, is a double standard.

Given that telecommunications infrastructure must be broadly dispersed in order to be economically viable and adhere to Metcalfe’s Law, Mitchell accurately notes FTTP infrastructure builders must be able overbuild outmoded incumbent infrastructure when they opt not to upgrade to FTTP -- and receive government subsidies for doing so if available. That’s eminently fair and good old American progress – the same progress that brought electricity to large swaths of the nation in the 1930s when market forces alone could not do so.

As for the incumbent argument they will come out losers, Mitchell observes incumbents have made losers out of nearly 20 million Americans who according to a 2012 Federal Communications Commission estimate live in neighborhoods incumbents redlined and declined any wireline premises Internet connectivity, leaving them to dialup and satellite.

Click here to hear Mitchell and ILSR colleague Lisa Gonzalez elaborate in a 13-minute podcast.

U.S. at inflection point on premises Internet infrastructure

The United States is at an inflection point relative to premise Internet infrastructure serving homes and small businesses. The “walled garden” business model of legacy incumbent cable and telephone companies has reached the limits of its reach. Connecting the remaining 20 to 30 percent of premises outside the wall isn’t economically practical as testimony at a U.S. House Small Business Subcommittee hearing this week in upstate New York illustrates.

Mark Meyerhofer, a government relations administrator for Time Warner Cable, said while there has been a change in the national mindset that favors a greater focus on unserved areas, nevertheless “It remains extremely challenging to extend broadband to most rural areas of New York State, where geographic isolation and topographic issues make it economically infeasible for companies to reach these areas,” Meyerhofer explained. “Investments simply cannot be recouped before it is time to reinvest.” Although Meyerhofer was specifically referring to only one part of the country, his testimony applies elsewhere across the nation including many suburban and exurban areas where service gaps exist. That economic reality of the walled garden Internet also applies to Google Fiber, which plans to expand into several metropolitan areas.

The other challenge faced by the legacy incumbent providers (but not Google Fiber) is the ever growing demand for more Internet bandwidth. It’s similar to the problem facing manufacturers of silicon-based microchips that eventually will reach a physical barrier where no additional circuitry can be crammed onto the chip. That will require the incumbent providers to change out their metal wire-based premise service infrastructure with fiber optic connections to accommodate the additional bandwidth demand and stave off technological obsolescence. But barring a revolutionary breakthrough that significantly reduces the cost of constructing fiber to the premise infrastructure, their shareholders aren’t likely to approve of such large capital expenditures that could cut into dividends as shown by Verizon’s 2012 pullback of its FiOS fiber to the premise product offering.

Given the growing consensus that the so-called “last mile” premise Internet infrastructure challenge can’t be met within a commercial framework, it strongly suggests other business models including a nonprofit cooperative or public works approach similar to that used for roads and highways will be necessary in many areas of the U.S.

Good wireline Internet connectivity becoming a job requirement

One clear indication of the role good Internet connectivity plays in the economy is starting to show up in job postings. This telecommute position with Aetna, for example, states the following job requirements:

Minimum internet requirements for a telecommuting position include:
· A separate wired Internet connection
· Minimum download speed of 6MB
· Minimum upload speed of 1MB
· Satellite and other wireless Internet are NOT supported

Sprint Chairman Masayoshi Son: A New Visionary In Our Midst?

IVP Capital TMT Advisory - SpectralShifts Weekly

I'm skeptical of Son's assertion that wireless is the solution to the U.S. premises fiber Internet infrastructure deficit. What's surprising is the incumbent telcos have been trying to sell this canard to divert attention away from their own wireline premise shortfalls. That's hardly disruptive or visionary.

What would impress me is breakout, actionable thinking that offers a functional alternative business model that would enable rapid build out of universal fiber to the premise.

Telecom Giants Drag Their Feet on Broadband for the Whole Country - Newsweek

Telecom Giants Drag Their Feet on Broadband for the Whole Country - Newsweek

Of course they drag their feet; it's their fiduciary duty to shareholders to do so. This story spotlights the inherent conflict in relying on the private sector alone to construct telecommunications infrastructure needed by a much larger constituency: the American public.

Despite their claims of having invested billions in telecom infrastructure, investor-owned telcos simply don't have enough cash to finance the transition of their networks from the old, copper POTS (Plain Old Telephone Service) cables to modern, fiber optic-based networks. Given that circumstance, they are leaving the old networks in place throughout most of their service territories. But since these networks are decades old and require a lot of costly maintenance, telcos are asking regulators to relieve them of the duty to maintain them to ensure every premise can get telephone service, sparking consumer push back.

Nebraska Broadband Study: Broadband Access Creates Jobs, Revenue | CivSource

Nebraska Broadband Study: Broadband Access Creates Jobs, Revenue | CivSource

It's about time for the cooper/coax cartel of the incumbent telco and cablecos to take their bootheels off the throat of the  21st century digital economy.

Iowa governor sets goal of universal premise Internet service

Iowa Poll: Aid for broadband gets Iowans' OK | The Des Moines Register | desmoinesregister.com: While adoption and satisfaction are relatively high, Gov. Terry Branstad’s Internet expansion initiative aims for 100 percent.

“The governor’s bill is titled the ‘Connect Every Iowan’ bill, not ‘Connect Some Iowans’ or ‘Connect a majority of Iowans,’ ” said Adam Gregg, the governor’s lobbyist. “... We want to encourage ubiquitous access all throughout the state.”

This should be a goal for every state. But setting a goal without a realistic plan to reach it will only produce disappointment. Branstad's plan for getting there is based on providing tax incentives to spur the construction of necessary infrastructure. Problem is tax incentives alone cannot overcome market failure -- when there is insufficient economic incentive to invest in infrastructure reaching every home and business. To reach that goal, Iowa and other similarly situated states would have to form and fund state Internet infrastructure authorities to subsidize municipal networks and telecommunications consumer cooperatives.

Since states adjacent to Iowa tend to also suffer from market failure that leaves many of their residents off the Internet grid, Bradstad might also consider negotiating a compact with these states as he is currently doing for the health insurance exchange marketplace to form a regional Internet infrastructure authority. The very fact the Bradstad is acting on this issue in Iowa points up the deficiencies in U.S. federal government policy that leaves many Americans in Iowa and other states with less than universal premise Internet access.

Broadband Spring emerges in Tennessee

Tennessee Legies Go Into Pro-Public Broadband Frenzy | Building the Gigabit City

Craig Settles reports on what appears to be the start of what I'm calling "Broadband Spring," powered by a decade of frustration and pent up demand to modernize telecommunications infrastructure to fiber to the premise architecture -- along with the realization that legacy incumbent telephone and cable companies are part of the problem and not part of the solution to getting that infrastructure in place.

This development could represent a tipping point where the public interest of modernizing the U.S. telecommunications infrastructure to fiber to the premise is outweighing the private interest of the legacy providers. It would be a welcome thaw after a 10-year-long winter of recession and failed public policy that has stood in the way of moving forward with this critical infrastructure.