Incumbent telcos warn feds: Let us have our way, or the consumer gets it

New Study Projects Investment Declines under Title II | USTelecom

Incumbent telephone companies have warned the U.S. Federal Communications Commission (and indirectly, the Obama administration) that they will tie up in the courts for years any move to regulate Internet services as a Title II common carrier telecommunications service available to all customer premises without discrimination.

Now they are citing a study to back up their threat that they will also significantly pare back construction of new infrastructure. In other words, if you don't let us pick and choose which neighborhoods we want to serve, we'll leave the 19 million premises the FCC estimates are not served by landline Internet service twisting in the wind. Ditto those on increasingly obsolete, legacy DSL service provided over aging copper cables.

That's monopolist speak for if you don't leave us alone, the consumer gets it.

Connecticut consumers squawk over poor Internet service quality from Frontier

More than a decade ago, AT&T was looking to offer TV programming via Internet protocol (IPTV) as part of its U-verse branded triple play service offering. To deliver that bandwidth intensive service, rather than replace its decades old copper plant designed to deliver what's referred to as "plain old telephone service" or POTS with modern fiber to the premise infrastructure, AT&T instead opted to soup up its Digital Subscriber Line (DSL) service to a more robust version, VDSL.

The initiative, dubbed by AT&T as Project Lightspeed, is a hybrid design that brings fiber to field distribution units. Customer premises are connected to those units using the existing POTS copper infrastructure. This is the proverbial weak link in the chain given the often deteriorated condition of the copper pairs in these cables.

That weak link may now be coming home to roost in Connecticut for Frontier Communications, which purchased AT&T's wireline operations in the state earlier this year. Arstechnica reports complaints about Frontier's service have gone through the roof and state regulators and officials are scheduling hearings.

No fiber to the prem in Silicon Valley, but a raft of slow, overpriced options

Wolverton: I’ve got the South Bay broadband shopping blues | SiliconBeat: Willow Glen

Tech Files columnist TroyWolverton goes shopping for Internet service on the California Public Utilities Commission's website but finds the service choices wanting, leaving the legacy incumbent telephone and cable company duopoly as the only viable options.

I did a little shopping of my own on the site a few months ago and like Wolverton, found it identified Megapath Networks as a provider at the same options and prices Wolverton found. But it turned out the company couldn't service my location even after the sales rep insisted it could.

Someday -- hopefully soon -- Wolverton's account will be looked back upon as a description of the primitive and often frustrating state of pre-fiber to the premise Internet service.

How high cost telecom subsidies might work if Title II common carrier regulation was “Obamacare for the Internet”

President Obama’s call this week to the U.S. Federal Communications Commission to regulate Internet service providers as common carrier telecommunications providers provoked Sen. Ted Cruz of Texas to disapprovingly dub it “Obamacare for the Internet.”

A political shot to be sure. But what if the high cost of building fiber to the premise infrastructure to all American homes and businesses were subsidized using tax credits such as those used to make individual health insurance more affordable to low and moderate income households under the Patient Protection and Affordable Care Act?

Instead of directly subsidizing Internet providers to build infrastructure in high cost areas using the FCC’s Connect America Fund – which many providers have spurned or only selectively accessed – customers in high cost areas would receive the subsidies and not providers.

Providers would be able to charge higher rates (not based on bandwidth use or connection speeds) for fiber connections to homes and businesses in high cost areas. Owners of these properties could then use the telecom tax credits to offset the higher cost of getting them connected.

That would create incentive for these premises to get online while also reducing the business risk of the current subscription-based models that are heavily dependent on how many customer premises sign up for service and which act to inhibit infrastructure construction in higher cost areas of the nation.

What do you think? Share your comments.

Western Massachusetts coop creates financial template for regional fiber telecom infrastructure

Steve Nelson: Towns hold the key to broadband - Berkshire Eagle Online: To participate in the last-mile project, a town must take these steps:

1. By Dec. 31, its Select Board must pass a nonbinding resolution expressing the town's intent to participate;

2. As early as next spring at a town meeting, it must authorize the issuance of bonds to cover the town's share of construction costs above the funds contributed by MBI;

3. At the same time, 40 percent of households in a town must sign a conditional contract to take service — Internet, phone and/or TV — when it becomes available.

WiredWest, a Western Massachusetts cooperative formed to construct a regional fiber telecommunications network, has developed the above financing plan for the build out of the network. It's a model that other regions of the United States might wish to study for their own infrastructure development.

Section 706 of Telecom Act offers FCC little to address telecom infrastructure deficit

Net neutrality storm engulfs FCC - POLITICO: FCC officials are meeting with congressional staff this week as Wheeler tries to better explain the options on the table to industry players and the public interest community. Across those meetings, the FCC chairman and his aides haven’t tipped their hand about how they want to proceed, according to multiple sources. The officials have given a rundown of the various options, including adopting the utility-style regulation known as Title II, using a weaker authority known as Section 706 or some combination of the two — but failed to lay out a clear path forward, the sources said.

Section 706, found in Title VII (Miscellaneous Provisions) of the Communications Act, isn't really a mandate on telecommunications providers. Rather, it merely affords the Federal Communications Commission authority to issue rules creating incentives to remove barriers to telecommunications infrastructure investment and to promote competition.

The main barrier to wireline Internet infrastructure investment that according to the FCC has left about 19 million American homes without Internet connections is economic, not regulatory. The business models of investor-owned providers typically require relatively quick return on monies invested to build infrastructure. In less densely populated areas, there is greater risk that standard won't be met, extending out the time for investors to break even and begin generating profits. No FCC rulemaking can change those economics.

The FCC provides subsidies to help bridge the gap (the Connect America Fund), but providers have generally spurned them. Instead, they've concentrated capital investments in more densely populated and profitable parts of their service territories and in mobile wireless services.

As for removing barriers to competition, there is little the FCC can do within the existing market-based model for telecommunications service. That's because telecommunications infrastructure is a natural monopoly that due to high cost and risk barriers deters would be competitors from entering the market.

FCC Chair Wheeler faces either/or choice on Internet regulation; the baby can't be split.

Obama’s call for an open Internet puts him at odds with regulators - The Washington Post: Huddled in an FCC conference room Monday with officials from major Web companies, including Google, Yahoo and Etsy, agency Chairman Tom Wheeler said he has preferred a more nuanced solution. That approach would deliver some of what Obama wants but also would address the concerns of the companies that provide Internet access to millions of Americans, such as Comcast, Time Warner Cable and AT&T. “What you want is what everyone wants: an open Internet that doesn’t affect your business,” a visibly frustrated Wheeler said at the meeting, according to four people who attended. “What I’ve got to figure out is how to split the baby.”

It's natural given Tom Wheeler's background as a telecom lobbyist that he would look for some kind of deal or compromise that opposing parties in a contentious policy issue can live with. But that's not what President Obama -- who designated Wheeler as Federal Communications Commission chair -- had in mind when he issued a statement this week calling on the FCC to issue rules defining Internet service a common carrier telecommunications service under Title II of the Communications Act instead of a more narrowly offered, specialized information service under Title I of the statute. These are entirely different regulatory schemes that don't lend themselves to hybrid models. It's an either/or choice. The baby can't be split. Moreover, doing so will only create legal uncertainty and fuel litigation. Rather than satisfying various stakeholders, none will be happy and more inclined to turn to the courts for redress of their grievances, potentially creating years of regulatory uncertainty.

Judging from the millions of comments filed with the FCC on the question, it's eminently clear the public preference is for Title II common carrier regulation of Internet service providers. Which makes sense given the Internet is gradually replacing the role the telephone system served in the past: a universal communications system accessible to everyone regardless of their location and whether they received or placed calls. Even the legacy incumbent telephone companies agree, saying it doesn't make sense for them to have to adhere to regulations governing landline telephone service.

Bottom line at this point, this is now primarily a political and not a regulatory issue. As such, expect politics to come more sharply into play. If Wheeler can't bring himself to make a clear policy call for Title II, President Obama could end up designating another Democrat on the FCC to replace him as chair. Speaking of Democratic politicians, I expect former President Bill Clinton will weigh in siding with Obama, saying something like Title II was where he ultimately intended Internet regulation to go when he signed the 1996 Telecommunications Act into law, with Title I more of a transitional but not permanent regulatory scheme. His vice president, Al Gore, could also join the Title II juggernaut.