Wednesday, December 23, 2015

Internet service franchises offer local governments potential work around to incumbent-sponsored state video franchises

Mediacom questions Iowa City deal with ImOn | The Gazette: Jeff Janssen, vice president of sales and marketing with ImOn Communications, said Tuesday he had not seen the Mediacom letter, but said ImOn has lease agreements similar those with Iowa City in other communities like Hiawatha and Marion.

Janssen also noted a franchise agreement only becomes required when cable TV is added to the list of service offerings. ImOn’s current plans for Iowa City are strictly for telephone and Internet services, he said.

“Franchise agreements are all around cable TV,” he said. “Once we decide, or if we decided to offer cable TV in Iowa City, we would get that franchise agreement, we are required to.”

This issue was bound to emerge sooner or later. In the early 2000s, legacy incumbent telephone and cable companies realized that with the emergence of the Internet and its capability to deliver TV programming, local governments would come under intense pressure from their constituents to require ISPs offering video services to provide Internet connections to all premises under municipal franchise agreements. That would have required substantial capital investment incompatible with the incumbents' business models based on milking their existing wireline "footprints" -- and not modernizing and expanding them to reach every doorstep.

To head off this prospect, the legacy incumbent cable and telephone company lobbies went into high gear to get state laws enacted putting states in charge of so-called "video franchises" and usurping local government authority over video services.

But that left a potential loophole for local governments to franchise Internet services other than video -- what's at issue in this Iowa case. Watch for this gambit to take off elsewhere, especially in states where there are also laws barring local governments from building and/or operating their own Internet services. Local governments could get around both restrictions by creating Internet service franchises and partnering with private ISPs as their franchisees. (Also referred to as "telecommunications franchises" in this item on a recent Brookings Institution panel discussion). They could also pressure the legacy incumbent telephone and cable companies by requiring them to obtain an Internet service franchise serving all premises if they wish to offer Internet services other than video within their jurisdictions.

With interest in wireline-delivered video declining among "cord cutting" consumers and incumbents relying more on Internet service for revenue, that pressure could be quite intense. It would also give localities a powerful tool to bring service to all of their residents and businesses given the U.S. Federal Communications Commission's lack of interest in enforcing its recently adopted rulemaking reclassifying Internet as a common carrier telecommunications service subject to the universal service and anti-redlining provisions of Title II of the Communications Act.

Monday, December 21, 2015

Pew study paints grim picture of U.S. consumer telecommunications market

Home Broadband 2015 | Pew Research Center: Still, the fact that more Americans have only a smartphone for online access at home has consequences for how people get information. Those who are “smartphone-dependent” for access do encounter distinct challenges. Previous Pew Research Center findings show that they are more likely than other users to run up against data-cap limits that often accompany smartphone service plans. They also more frequently have to cancel or suspend service due to financial constraints.
This study paints a grim picture of the state of telecommunications in the United States. On the sell side, market failure leaves many premises without landline Internet service. Service providers redline and refuse to serve neighborhoods where the business case can't be justified. On the buy side, in neighborhoods they do offer landline service, it's perceived as unaffordable. That forces many to rely on mobile wireless service via smartphones that has its own affordability issues and suffers from serious user limitations.

Tuesday, December 15, 2015

Redlined in Bradley County, Tennessee

Broadband providers battle over service in Bradley County | Times Free Press: Dr. Terry Forshee, president of Cherokee Pharmacy stores in Cleveland and Dalton, is eager for that growth. He said he can't get broadband at his South Bradley County home near Red Clay State Park.

"Charter Communications has had 27 years to bring cable down to me, but I'm still three miles away from service," he said. "I'm waiting, and I call every month to both Charter and AT&T, but I can't get anyone to come to my residence."

Forshee said he is trying to build his obesity education business, Take Charge, into a national company. But that's hard to do when he can't get high-speed Internet service at home.

Sandy Wallis lives in northern Bradley County, less than a quarter-mile from where Charter Communications and AT&T lines end.

"I've lived in my house for 30 years waiting on Charter and AT&T, and I've had to send my kids into town to do their homework (where broadband is available)," she told the Chamber gathering. "We need better service."

The U.S. Federal Communications Commission's Open Internet rules adopted earlier this year require Internet Service Providers fulfill requests for service under universal service and non-discrimination provisions of the Communications Act. Internet service is treated as a common carrier telecommunications utility under the rules. So far, however, there are no indications the FCC is enforcing these requirements in response to reports of ISP redlining such as these.

Saturday, December 12, 2015

Comcast's and AT&T's "unfair competition" complaints unfounded

Marion County cities call for broadband extension | Times Free Press: Telecommunications providers such as Comcast and AT&T have lined up solidly against allowing municipal providers to expand. They say it's unfair for government-owned services to compete against private industry.
Comcast and AT&T would have a valid complaint if telecommunications infrastructure was a competitive market. Their problem is it's not. It functions as a natural monopoly due to high cost barriers to entry that keep private competitors out. Natural monopolies lend themselves to direct government provision of services (such as as highways) or government granted franchises such as the old Bell Telephone system and local cable franchises. If AT&T and Comcast want to compete, they should get into the grocery, airline or automobile industries.

Friday, December 11, 2015

Broadband operators must conquer the home to meet threat from Google and Apple

Broadband operators must conquer the home to meet threat from Google and Apple: The threat posed by the big Internet players, especially Google and Apple, to traditional Telco operators has been talked about for over a decade, but has not yet materialised substantially as far as core services such as broadband and pay TV are concerned.

That is now changing fast as the battle enters the home where the prizes may initially be small but will amplify greatly over the next few years. Indeed with relatively few homes yet having a network worthy of the name, it is all up for grabs in what could become a winner takes all game around the emerging IoT (Internet of Things). (Emphasis added).
Very true. It's far too premature to be thinking about IoT given the primitive and deficient state of telecommunications infrastructure that's still largely based on the pre-Internet telephone and cable TV networks.

Northern California health care organization struggles with telecom infrastructure deficiencies

Deficient Internet telecom infrastructure is hamstringing a rapidly growing non-profit health care organization that administers Medicaid benefits for more than 500,000 beneficiaries in 14 Northern California counties including Del Norte, Humboldt, Lake, Lassen, Marin, Mendocino, Modoc, Napa, Shasta, Siskiyou, Solano, Sonoma, Trinity and Yolo.

“The biggest challenge we’re facing is (inadequate) broadband Internet,” in the region, Elizabeth Gibboney, CEO of the Partnership HealthPlan of California, told a health care symposium sponsored by the California HealthCare Foundation in Sacramento this week. In particular, Gibboney cited her organization’s need for modern connectivity to support safety net clinic sites and telehealth consultations with specialists as well as teleworking staff.

Wednesday, December 09, 2015

Reps. Huffman, Thompson, and Nolan Introduce the Rural Broadband Infrastructure Investment Act | Congressman Jared Huffman

Reps. Huffman, Thompson, and Nolan Introduce the Rural Broadband Infrastructure Investment Act | Congressman Jared Huffman: Washington, DC – Congressmen Jared Huffman (D-CA), Mike Thompson (D-CA), and Rick Nolan (D-MN) today introduced the Rural Broadband Infrastructure Investment Act, which would unlock new opportunities for broadband deployment on California’s North Coast and in rural communities across America. The bill would make North Coast communities eligible for $670 million in federal broadband financing; promote regional broadband solutions by allowing the Rural Utility Service (RUS) to offer broadband grants in addition to loans and loan guarantees; and increase overall RUS broadband investment to $50 million annually from $25 million. The legislation builds on the successful legacy of the Rural Electrification Act, which brought power and telephone service to rural communities across America during the New Deal.

This is a well intended but grossly underfunded bill. Too little, too late. As Fletcher Kittredge, chief executive officer of Great Works Internet and a member of the Maine Broadband Coalition put it earlier this year, "[t]his is not a million-dollar problem. It is far larger.”

Allocating millions isn't going to build telecom infrastructure the runs in the billions to build. Constructing fiber to serve every premise in the City of Santa Cruz, California, for example, would cost an estimated $30 million -- a major chunk of the $50 million the federal bill would appropriate to the RUS for the entire United States. (h/t to Steve Blum's Blog).