AT&T’s bifurcated, speculative strategy on residential telecom service

AT&T has adopted a bifurcated and highly speculative future strategy for its residential premise telecommunications market segment that treats a small portion of it like a specialized business market for its fiber to the premise (FTTP) service while serving other residential customers with a mix of wireless technologies.

AT&T Fiber is primarily aimed at business premises and multi-family buildings and not single family homes. The company is phasing out its legacy U-Verse service that blends fiber to neighborhood distribution equipment with copper from the era of Plain Old Telephone Service (POTS) – metallic infrastructure it is anxious to retire as quickly as possible to avoid the cost of maintaining it. In its place AT&T is relying on proven and unproven radio-based technologies.

In some high cost areas of its U.S. service territory, AT&T recently announced it would construct infrastructure designed to deliver fixed residential premise service as part of upgrading its mobile wireless service to 4G LTE technology. However, that infrastructure will be obsolete the day it’s installed, not even close to approaching what the U.S. Federal Communications Commission considers service capable of supporting high-quality voice, data, graphics and video. It’s essentially a bolt on afterthought to a 4G LTE mobile wireless service upgrade that will likely bog down during peak periods as its shared bandwidth becomes saturated with heavy, multi-premise demand.

As for the unproven radio-based technology that’s still in the development phase, AT&T recently announced its experimental “Project AirGig” technology. It will utilize antennas mounted atop utility poles to transmit millimeter wave signals from pole to pole. It taps into those signals to feed premise service based on 4G (or more optimally, AT&T’s still under development 5G wireless technology.) The service will apparently be similar to electrical power distribution architecture where current from high voltage transmission lines on the tops of poles is stepped down by a transformer before it flows into a home. This service in theory would be capable of meeting the FCC’s minimum service standard. But at this point, it’s largely speculative and leaves much of AT&T’s residential market segment with no clear and certain future path as its legacy copper cable POTS plant rots on the poles.

Incumbent bellyaching over "unfair competition" from public sector fails straight face test

Rural areas in Marion County could still get broadband access | Times Free Press: JASPER, Tenn. — Like many local governments across Tennessee, Marion County leaders have been pushing for a couple of years to change state laws that restrict municipal utilities like EPB's gigabit internet, TV, and phone services from expanding beyond current borders. EPB has petitioned the state and the Federal Communications Commission, too, and Mike Partin, president and CEO of the Sequatchee Valley Electric Cooperative, said broadband access has been "widely debated across the state."

"So far in the [state] Legislature, that has been defeated," he said. "AT&T has a pretty extensive lockdown, it seems like, in the Legislature. That's one of the holdups." Telecommunications companies such as AT&T and Comcast argue that it's unfair to allow government to compete the market with private industry. (Emphasis added)

That argument would hold water but for a single fatal flaw: telecommunications infrastructure is not by nature a competitive market but rather a natural monopoly/duopoly. Shouting "unfair competition" in a noncompetitive market doesn't pass the straight face test.

Outmoded 1990s thinking retards U.S. telecom infrastructure modernization

Digitally Unconnected in the U.S.: Who’s Not Online and Why? | NTIA: But what about those Americans who do not use the Internet? Whether by circumstance or by choice, millions of U.S. households are not online, and thus unable to meaningfully participate in the digital economy. Data from NTIA's July 2015 Computer and Internet Use Supplement to the Current Population Survey confirm that the digital divide persists. In 2015, 33 million households (27 percent of all U.S. households) did not use the Internet at home, where families can more easily share Internet access and conduct sensitive online transactions privately. Significantly, 26 million households--one-fifth of all households--were offline entirely, lacking a single member who used the Internet from any location in 2015.

This report reflects the limited thinking that retards the direly needed modernization of telecommunications infrastructure in the United States. It adopts a one-dimensional view of modern telecommunications rooted in the later 1990s and early 2000s when internet protocol-based telecommunications solely meant going on line with a computer, using dialup or DSL where it was being rolled out.

Nearly two decades later, the internet isn't just about going online, particularly as legacy telephone companies look to retire their aged and obsolete copper cable plants and fiber to the premise (FTTP) obsoletes metallic cable and can support multiple telecom services. Internet protocol also supports voice service (Voice Over Internet Protocol) as well as video, both one way and interactive. It's a multi-modal telecommunications platform.

Why market competition cannot remedy America’s lousy telecom service

Almost daily, the justifiable criticism of the lousy state of America’s telecommunications service includes the demand for more competition as the solution. Providing more competition – and specifically as fiber to the premise (FTTP) -- for indolent incumbent legacy telephone and cable companies in no hurry to modernize their aging and increasingly obsolete metallic infrastructures will provide superior service and value for consumers. Sound good in theory, but completely misguided.

Telecommunications is not and will never be a truly competitive market where consumers can select among many sellers. The economics simply don’t allow it because it costs too much to enter the market and the return on investment under the dominant, vertically integrated, subscription-based business model is too skimpy or too far in the future to attract would be competitors. If telecommunications were a truly competitive market, consumers no matter where they live would have multiple sellers and services from which to choose just as they do other consumer offerings. Cherry picking in a few select metro markets as we’ve seen with Google Fiber and AT&T’s “Gigaweasel” as fellow blogger Steve Blum dubs it is hardly robust market competition.

That’s a key distinction. Telecommunications is not a consumer market. It’s a natural monopoly market and the incumbents have established their place in it. And they vigorously defend that place. That’s not evil as Susan Crawford recently pointed out. The incumbents are merely doing what they must do to faithfully and diligently serve the interests of their shareholders no matter how smarmy, greedy or disingenuous it may appear at times. Shareholders come first, market demand second. And the interests of the demand side of the market can easily remain in second place in a natural monopoly market because there is and won’t be any pressure to offer more to maintain market share because market share is assured. The market will accept whatever it’s offered because it has no choice – and cannot have meaningful choice. That’s why consumers complain service sucks equally between legacy telcos and cable providers.

Light-based quantum Internet protocol requires FTTP

Particle teleportation across Calgary marks 'major step' toward creation of 'quantum internet' - Calgary - CBC News: In a "major step" toward practical quantum networking, researchers at the University of Calgary have successfully demonstrated the teleportation of a light particle's properties between their lab and the city's downtown area, six kilometres away.

It doesn't exist yet, but the dream of a "quantum internet" involves taking advantage of a key element of quantum mechanics — the fact that observing a particle's quantum state changes that particle's quantum state. This creates the opportunity to communicate with a degree of security never before possible, because no one can intercept a communication without the intended receiver of the information knowing about it.

A couple of takeaways here:

1. A light-based Internet protocol will require fiber optic to the premise (FTTP) communications infrastructure. The metallic infrastructures of the legacy telephone and cable companies that dominate today aren't going to cut it. (A bonus: fiber is non-conducting and thus invulnerable to high energy solar flares.)
   
   
2. Quantum-based encryption as described here looks even more hack proof that the current cutting edge blockchain technology.

Relying on legacy incumbents, state government for telecom infrastructure modernization -- That dog don't hunt

Rural residents push for broadband | Local News | daltondailycitizen.com: After hearing from frustrated residents and community leaders, Sen. Steve Gooch, R-Dahlonega, who co-chairs the committee, sought to reassure service providers. "We need the Windstreams, the AT&Ts, the Comcasts," he said. "We're not running anybody off. We're trying to keep them here, keep their jobs here, but encourage more investment." One proposal is the elimination of a sales tax on telecommunications network equipment. Others have recommended boosting coverage by restoring state funding for local public-private projects and doing more to hold companies accountable when their service is not as advertised.

As they say in the south, that dog don't hunt. The "Windstreams, the AT&Ts, the Comcasts" aren't going to invest in telecom infrastructure to fill in service area gaps in any reasonable timeframe because the ROI is simply too far in the future to justify the investment to their shareholders.

Expecting state government to step up with the billions in needed funding isn't realistic either. A robust, well funded national telecommunications infrastructure initiative is needed.