Time to punch the reset button on U.S. telecom infrastructure

AT&T, Comcast Kill Local Gigabit Expansion Plans in Tennessee | DSLReports, ISP Information: For some time now municipal broadband operator EPB Broadband (see our user reviews) has been saying that a state law written by AT&T and Comcast lobbyists have prevented the organization from expanding its gigabit broadband offerings (and ten gigabit broadband offerings) throughout Tennessee. These state laws currently exist in more than twenty states, and prohibit towns from deploying their own broadband -- or often even striking public/private partnerships -- even in cases of obvious market failure. A proposal that would have recently lifted this statewide restriction in Tennessee was recently shot down thanks to AT&T and Comcast lobbying. Even a new compromise proposal (which would have simply let EPB expand slightly in the same county where it is headquartered as well as one adjoining county) was shot down, after 27 broadband industry lobbyists -- most of whom belonging to AT&T and Comcast -- fought in unison to kill the proposal.

It's understandable the legacy telephone and cable companies want to keep out interlopers who might threaten their de facto monopolies for Internet service. The incumbent protectionism on display in Tennessee plays out in multiple states in the form of laws barring public sector involvement in telecom infrastructure projects or as this month in California and Kentucky, efforts to block fiber to the premise (FTTP) projects from gaining access to utility poles. This obstructionism isn't going to go away and requires a major reset in order for it to come to an end.

As I wrote in my recently issued eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, the nation is already two decades behind where it should be relative to replacing its legacy metal wire telecom infrastructure with FTTP. The book proposes the federal government construct universal FTTP as public works. As roads and highway were to the 20th century, it's vital infrastructure for the 20th that's too important to be left in control of the legacy incumbents. It's time to punch the reset button so the United States can move forward to the future.

Vermont regional telecom district accesses institutional bond funding for expansion

ECFiber's growth plans could double service area | Vermont Business Magazine: ECFiber, based in Royalton and now officially known as the East Central Vermont Telecommunications District, announced plans to activate 110 miles of network in 2016 and build an additional 250 miles in 2017. “Working with bond underwriters, we believe ECFiber has reached the point in its financial development that allows us to access institutional capital markets for the first time in 2016,” says Irv Thomae, District Chairman. “Since 2011, we have relied on 450 local investors, some state-provided dark fiber, and VTA and Connectivity Fund grants to build the first 340 miles of network. By the end of 2016 we will be in parts of 21 of our 24 member towns, but many neighborhoods that desperately need ECFiber service cannot afford to raise the $30,000 per mile to complete a build. Outside financing would finally allow us to build to those towns that need us the most, not just those where we can raise capital.”

Regional telecom fiber modernization projects such as the Utah Telecommunication Open Infrastructure Agency and WiredWest in western Massachusetts have hit obstacles obtaining sufficient capitalization to expand. Due to the high cost of infrastructure projects, access to capital finance markets is critical given limited funding available from local governments and property owners.

According to this story by Vermont Business Magazine, the East Central Vermont Telecommunications District is accessing the institutional bond market for the first time for needed expansion capital, a development that bears watching since it demonstrates the bond markets' receptiveness to working with projects sponsored by utility districts.

Google fights AT&T, Comcast over Bay Area Google Fiber service - San Jose Mercury News

Google fights AT&T, Comcast over Bay Area Google Fiber service - San Jose Mercury News: MOUNTAIN VIEW -- Google's plan to bring ultrahigh-speed Internet service to the Bay Area has run into a decidedly nontech hurdle: utility poles. To roll out Google Fiber in five Silicon Valley cities, the tech giant needs access to the poles for stringing up fiber cable. But in several cities a who's who of Google competitors are standing in the way. The outcome of the pole fight is likely to have a profound effect on which communities get Google Fiber and which don't. "The infrastructure needs to be mostly above ground," said MoffettNathanson Research analyst Craig Moffett. "You can't proceed ... if you don't have pole access." Similar battles have played out in other cities across the nation, slowing Google's multibillion-dollar program while competitors push forward with their own gigabit-speed offerings.

This illustrates the death by thousand cuts delaying strategy of the legacy incumbent telephone and cable companies to protect their service territory monopolies from interlopers offering telecommunications infrastructure far superior to their own. Those legacy dinosaurs have armies of attorneys prepped to spend years if not decades in the courts erecting legal speed bumps to slow the progress of new entrants like Google Fiber.

Some observers believe the U.S. Federal Communications Commission's promulgation of its Open Internet rules in 2015 deeming Internet service providers common carrier utilities would make pole access easier. But so did others when Congress amended the Communications Act in 1996 to allow competitive local exchange carriers (CLECs) the right to use incumbent telephone central offices and cable plant to offer competing telephone and DSL services that was just emerging in the late 1990s. The incumbent telcos took a decidedly uncooperative and litigious stance to hamstring those providers as well.

These incumbent delaying tactics deepen America's telecommunications infrastructure crisis because they push a nation that's already a generation behind where it should be in terms of replacing its legacy metal cable system with fiber to the premise (FTTP) even more behind the curve. The situation calls for aggressive federal intervention in the form of a crash program to modernize and build out this vital telecom infrastructure to serve the nation's needs in the 21st century.

Obama administration, FCC use incumbent "broadband adoption" talking point designed to shift attention from nation's telecom infrastructure deficiencies

Obama Seeks Broadband for 20 Million More Low-Income Subscribers - The New York Times: The White House also released a report outlining the economic effects of broadband adoption, focused on how families without broadband at home are at a disadvantage in finding jobs.

Once again, the Obama administration and the U.S. Federal Communications Commission conflate access to advanced telecommunications service with its use. They are two different things. The unfortunate use of the term "broadband adoption" parrots a favorite talking point of the legacy telephone and cable companies to take the focus off the nation's telecommunications infrastructure deficiencies that leave some 34 million Americans without access to landline premise service according to the FCC's most recent estimate released in January. After all, the incumbent argument goes, why should we build Internet telecom infrastructure when people aren't using computers at home and therefore not adopting "broadband?"

The term "broadband" dates back to the late 1990s when people were beginning to migrate from narrowband, dial up Internet service to faster "broadband" connections. The context there was personal computer connections to the Internet. Which is also outdated given that today, Internet connections also provide voice and video services that don't require a personal computer.

As long as policymakers insist upon living in 1999, it will be difficult for America to advance into the 21st century.

DSL faces obsolescence -- with no successor in place

Two Tales of DSL | POTs and PANs: But the problem for all DSL providers is that within a few years the demand for broadband speed is going to exceed their capabilities. The statistic that I always like to quote is that household demand for broadband speeds doubles about every three years. This has happened since the earliest days of dial-up. One doesn’t have to chart out too many years in the future when the speeds that can be delivered on DSL are not going to satisfy anybody.

Telecom consultant Doug Dawson lays out the disconcerting reality that is a major manifestation of America's telecommunications infrastructure crisis. Digital subscriber line (DSL) technology was put in place as a temporary method of enabling Internet protocol service over twisted pair copper cable that delivered voice service pre-Internet. The problem is there is no succession plan to replace the copper with modern fiber to the premise (FTTP) technology as I discuss in my recent eBook Service Unavailable: America's Telecommunications Infrastructure Crisis.

Susan Crawford's Rx for ailing U.S. telecom infrastructure

Susan Crawford has added another component to her prescription to cure America's ailing telecom infrastructure, modernizing it with fiber optic technology to replace the increasingly obsolete metallic cables the legacy telephone and cable monopolies use to connect homes and businesses.

In January, she proposed the financial element: harnessing private investment capital via a regionally administered federal telecom infrastructure development and finance agency, funded by federally subsidized bond proceeds. (See related blog post)

Google Fiber's recent move to use existing fiber infrastructure owned by local governments in those select areas it will offer services spurred Crawford to elaborate on the infrastructure component of her solution. Her proposed federal telecom infrastructure development and finance agency would help local governments build open access fiber networks and sell access to retail providers on a wholesale basis.

Crawford sees Google Fiber's willingness to sell retail services over municipal infrastructure it does not own as a game changing move because the business model of local government-owned open access networks like Utah's Utah Telecommunication Open Infrastructure Agency (UTOPIA) have historically not meshed with the vertically integrated, monopolistic business models of the legacy telephone and cable companies that shun open access infrastructure. That model is based on owning the customer and selling monthly subscriptions to one premise at a time. That makes it highly risk averse since these legacy providers target their infrastructure only where they can get the most subscriptions and redline other neighborhoods that aren't as promising, creating widespread market failure and access disparities.

Google Fiber had initially followed the same model in its proprietary infrastructure projects such as in Kansas City and Austin, Texas. Now it is saying if a local government like Huntsville, Alabama has the resources to build fiber to the premise to serve its residents, it will be happy to sell services on that network. Crawford's federal bond finance model could scale up open access networks nationwide by aiding localities that lack Huntsville's pre-existing municipal electric company infrastructure to build their own.

The Cord Empire Strikes Back - Bloomberg Gadfly

The Cord Empire Strikes Back - Bloomberg Gadfly: Like in the rule-making for set-top boxes, incumbents are showing they're good at putting up roadblocks. AT&T last week sued the city and county and said local officials don't have the authority to regulate attachments to its poles. The telecom company also said tinkering with its equipment might cause outages for its own customers.

As the scuffles show, breaking Big Cable won't be easy. And it is cringeworthy that Americans' best chance to end the cable-and-telecom monopoly may lie with Google, another monopolist. But if the status quo doesn't change, ambitions for more robust Internet connections and more compelling home entertainment options will be realized painfully slowly, or not at all.

Telecommunications infrastructure is a natural monopoly. As such, it warrants strong monopoly regulation such as Title II of the Communications Act (implementing regulations symbolically adopted but not being enforced by the U.S. Federal Communications Commission ) or government ownership. The United States currently has neither and is reaping the consequences in the form of widely disparate access and high prices. The legacy incumbent telephone and cable companies are only all too happy to take advantage.