FCC Chair Pai falsely characterizes satellite Internet as innovative telecom technology

REMARKS OF FCC CHAIRMAN AJIT PAI
AT THE SATELLITE INDUSTRY ASSOCIATION’S
21ST ANNUAL LEADERSHIP DINNER
WASHINGTON, DC
MARCH 12, 2018

Next-generation satellites are bringing new competition to the broadband marketplace and new opportunities for rural Americans who have had no access to high-speed Internet access for far too long. That’s why the FCC under my leadership has moved quickly to give a green light to satellite innovators.

Here, U.S. Federal Communications Commission Chairman Ajit Pai falsely characterizes satellite delivered Internet connectivity as innovative. It is not. It's been around since the 1990s as a forced option for Americans who needed better than glacial dialup Internet access over legacy copper telephone lines but weren't offered DSL or later by cable companies.

We’ve also made satellite broadband providers eligible for our upcoming Connect America Fund Phase II reverse auction, which will provide up to $2 billion over ten years to expand broadband deployment in rural America. To be sure, I understand that the satellite industry disagreed with some of the decisions that the FCC made in developing rules for the reverse auction. We are forging new ground with this first-of-its-kind auction, and in doing so we had to make some hard choices. But, I nonetheless hope that satellite companies will study this opportunity closely and choose to participate in the reverse auction. 

This is an incredible waste of subsidy funding. With satellite, the FCC is subsidizing a substandard and kludgy form of connectivity subject to high latency and bandwidth usage caps. Subsidies should instead go to deploying fiber to the premise connections that offer far superior connectivity and aren't as subject to obsolescence.

U.S."bandwidth problem" direct consequence of massive policy failure

The moving target: The amount of bandwidth required to make people happy increases each year as the benefits of broadband increase. What looked like a good technical solution a few years ago may not look like one today. That means any true solution must be future proof. Providers in the United States have made great strides toward modernizing their network infrastructure, and they continue to do so. But truly solving the bandwidth problem will require a national commitment to ensuring a world-class infrastructure. 

So writes Masha Zager, editor in chief of Broadband Communities magazine in her column appearing in the the January-February 2018 issue. Zager's column is titled The Bandwidth Problem. The origins of that problem stem from a massive policy failure dating back to the early 1990s. Public and regulatory policy regarded advanced digital telecommunications as a luxury add on to legacy telephone and cable TV services.

That perspective badly hobbled the necessary modernization of America's metallic cable infrastructure designed for 20th century analog telephone and cable TV service to fiber optic to the premise infrastructure for advanced digital telecommunications in the 21st -- the world class infrastructure referred to by Zager. It also established a mindset of bandwidth poverty instead of bandwidth abundance.

Consequently, a generation later the nation is limping along, trapped in a continuous, frustrating cycle of infrastructure failing to keep up with burgeoning bandwidth demand and the embarrassment of Americans still forced to use dialup and satellite services. Also absent is the national commitment that Zager calls for to address the problem. That commitment should be to solve it once and for all with a declaration of a war on bandwidth poverty and an aggressive national initiative to fast track construction of a fully fibered telecommunications network reaching every American doorstep.

Big ISPs once again at odds with local governments over universal service demands

FCC says small cells will close the digital divide. Most say they won't | Center for Public Integrity: The FCC’s claim doesn’t convince officials in Lincoln, Nebraska, which experienced the same reluctance as Montgomery County did by wireless companies willing to deploy small cells to rural areas, said David Young, manager of fiber infrastructure and rights of way for the city. In 2015, when Lincoln officials were negotiating with Verizon Communications Inc. over how much the city would charge the company to attach small cells to municipal property, the city said it would charge the carrier an annual $95 fee — if the carriers would commit to deploying broadband in rural areas in Nebraska. Over the next two years, Lincoln offered the same deal to other carriers and builders. Young said the companies said they couldn’t commit to anything. So, Lincoln went ahead with an agreement that have the companies paying $1,995 a year to attach small cells to city poles, more than 20 times as much. If Pai is serious about 5G closing the digital divide, Young said, “then I’ll make that deal: You cannot deploy any small cells in an urban environment until all the rural markets are covered. Until we can make that deal, I'm calling foul” on the assertion 5G will help close the digital divide.

The deal here is the essentially the same one local governments proffered to cable companies that wanted a franchise. Serve all premises within our jurisdiction or no deal. No cherry picking and neighborhood redlining. Cable companies didn't want to have to meet universal service demands in franchise negotiations and went over their heads to state governments in the mid 2000s and lobbied them to preempt the localities and take sole authority over so-called "video franchises." That preempted local government leverage.

Now local governments are pressing big telcos for universal service such as Lincoln is here. The telcos don't like the demands for universal service and are once again seeking preemptive relief from federal and state governments. Large telephone and cable companies also successfully lobbied the U.S. Federal Communications Commission to scuttle its 2015 Open Internet rulemaking classifying Internet service providers as common carrier telecommunications utilities, subjecting them to universal service and anti-redlining requirements.

Playing the preemption card again to avoid universal service obligations and continuing to leave many homes, schools and small businesses without connecting infrastructure to advanced telecommunications services will likely backfire on big telcos (and cablecos looking to get into mobile wireless services). Angry voters who have gone more than a decade with limited or no service options are increasingly likely hold elected policymakers who side with them in this fight accountable at the polls.

Google Fiber reconnoiters, seeks 10x advantage over incumbents with fiber deployment

Ruth Porat on Google Fiber pause: At the Morgan Stanley Technology Conference, where Porat was speaking, an analyst asked about Fiber's change in strategy and the company's new milestones. Porat said that Fiber's rollout has been paused until the company finds a way to make the service 10 times better. "As we were looking at our rollouts going back to 2015, 2016, our view was that we had not done enough," Porat said. She said that Fiber hadn't achieved its "10x moment," which is Google-speak for getting a 10-fold improvement over existing technology.

It's been a tough couple of years for Fiber. Launched in 2010 with the promise of bringing fast and affordable internet service to municipalities across the country, the initiative has endured cost-cutting measures, layoffs and two CEO resignations since becoming part of the Alphabet unit Access. Porat said that Alphabet was holding off on pushing Fiber into new markets until it could find a better way to "bring technology to bear in a meaningful way." She said that the company won't start "accelerating the rollout" again until it can prove that it has a valuable new deployment and delivery method.

Google Fiber faltered because it offered no overwhelming technological, cost or marketing advantage over legacy incumbent telephone and cable companies. AT&T even mocked it as a bumbling rookie as it paused fiber infrastructure deployment in several U.S. metro areas last year. Now it's reconnoitering until it can find one.

Last October, Phil Dampier of Stop the Cap! penned this post mortem on Google Fiber's ill fated initial foray into fiber to the premise (FTTP). To achieve that 10x deployment advantage, Google Fiber will have to develop an innovative FTTP deployment methodology that is far less labor intensive given labor accounts for the vast majority of fiber deployment costs. And one that doesn't involve the ponderous mass digging up of streets and front yards to bury fiber conduit.

As former Google advisor and co-founder Larry Page put it in Dampier's blog post, "There’s no flying-saucer shit in laying fiber." But it will have to find some (and maybe enlist the help of some of those flying saucers) in order to achieve the radical workaround it needs to rocket past slow moving incumbents as well as new entrants hobbled by high construction costs.

Barring extraterrestrial technological assistance, Google Fiber might look at more conventional albeit cutting edge technology to reduce the labor cost of hanging fiber on utility poles such as employing UAVs to lift fiber spans between poles as installers make the connections and splices.

Google, Netflix, YouTube, Facebook responsible for funding advanced telecom infrastructure, telco asserts

As net neutrality repeal nears, WV providers say internet won't change | Business | wvgazettemail.com: Frontier, West Virginia’s largest internet service provider and often the only option in rural areas of the state, sent a letter to the FCC in July applauding the commission’s proposed repeal, saying the regulations are outdated. In the letter, Frontier said it has a core commitment to “treating all Internet traffic the same regardless of content.” “Indeed, the combination of competition in the broadband market and consumer expectations would significantly discipline any company that sought to micromanage a user’s content,” the letter said. “The fundamental Internet freedoms will remain as strong as ever, whether or not they are backed by outdated Title II regulation.”

According to Frontier, internet service providers aren’t the problem when it comes to the issue of net neutrality — it’s major content providers such as Google, Netflix, YouTube and Facebook that need to be looked at. Frontier complained these companies don’t “help fund the upgrades their traffic is requiring,” adding that current FCC rules prevent negotiations relating to that from happening. The company claimed this issue prevents it from investing further in rural broadband access.

Frontier's position mirrors the that of then AT&T CEO Ed Whitacre who proclaimed in 2005 that content providers like Google, Netflix, YouTube and Facebook shouldn't be able to ride over "my pipes" without paying. Naturally AT&T like other legacy telephone and cable companies would prefer a business model based on a two sided market: assessing consumers monthly service charges for voice, video and data services on the delivery side and content providers like the aforementioned for access to their "pipes" as Whitacre put it.

That two-sided market is the fully vertically integrated business model telcos and cable companies desire because of the obvious revenue enhancement possibilities. Since telecom infrastructure is a naturally monopolistic offering, the prospect of telcos and cable companies abusing their monopoly power to exploit those opportunities concerns advocates of retaining the U.S. Federal Communications Commission's 2015 Open Internet rulemaking that regards Internet-delivered telecommunications services as a common carrier utility open to all content providers free of charge. 

New Google venture plans neighborhood "built from the Internet up."

In 2016, Google Fiber began reconnoitering away from its plan to overbuild legacy incumbent telephone and cable company infrastructure with fiber to the premise telecom infrastructure in select metro areas of the United States. Taking on incumbents in existing parts of these metros proved too slow and costly and Google Fiber had no overwhelming technological or marketing advantage relative to them.

Another Google venture takes a different tack. Rather than overlaying fiber optic telecom infrastructure on an existing neighborhood, it would build an entirely new “smart” neighborhood where there are no incumbent providers. One that’s “built from the Internet up… merging the physical and digital realms,” according to a description of the project – dubbed Sidewalk Labs – in this Slate article. A pilot to roll out the concept in an undeveloped portion of Toronto, Canada Eastern Waterfront kicked off in late 2017. (Click here for news release).

Forecast of holographic interactive video within five years a pipe dream

Magic Leap CEO thinks volumetric video will be a part of live TV in five years - The Verge: In an interview with The Verge, Abovitz said that within “two to five years,” it will be technically possible for people wearing Magic Leap goggles to watch an NBA game (or other media) live, but in a holographic, interactive form. “You can stream over the top and to the screens, the virtual screens — you can do that now,” he said. “We’re looking at, how do you derive the information to move the volumetric stuff from that? And then, how do you do volumetric live-streaming as well ... if you time where processing power is going, particularly backends, you’re single-digit years away from that happening.”

Processing power indeed continues as it has to increase. But Abovtitz neglects to consider telecommunications infrastructure deployment advances far more slowly. According to the U.S. Federal Communications Commission, many millions of American homes lack telecom infrastructure capable of supporting high quality data, voice and video.

Too many remain embarrassingly served by 1990s DSL over aging copper lines, satellite Internet and even dialup. An interactive holographic experience will require enormous bandwidth only fiber optic lines can deliver. But most premises lack fiber connections and there's no coordinated national effort to modernize America's aging and outdated legacy metallic telecom infrastructure to fiber.

Trump budget proposal re telecom infrastructure likely an opening gambit

President Donald Trump's $200 billion infrastructure proposal released Monday includes $50 billion in funding for rural communities, but nothing specific for broadband deployment. Even though Trump has talked about the importance of expanding broadband in rural areas, he has not committed any funding to help build networks. Instead, his efforts have been aimed at eliminating red tape and regulation to get infrastructure built. The proposal, which makes no mention of broadband infrastructure, is meant to spur the investment of at least $1.5 trillion in infrastructure, according to a White House fact sheet. Under the plan, the feds would contribute a total of $200 billion over the next 10 years. About half that money would be used as part of an incentive program to entice private investors as well as city, state and local governments to invest in infrastructure projects.

Trump's infrastructure plan offers no funding for rural broadband - CNET

This CNET story is incorrect. The Trump administration's budget outline on infrastructure spending does in fact propose appropriations for the construction of advanced telecommunications infrastructure as detailed here.

The pushback from various stakeholders is because the proposal doesn't provide dedicated funding for a badly needed modernization of the nation's telecommunications infrastructure from the metallic networks of the telephone and cable TV era to fiber optic connections capable of handling ever growing bandwidth demand generated by digital content and services. The money is allocated in one big bucket for all types of infrastructure and not just telecommunications. The concern is states and localities might give priority to roads, highways, airports and government facilities, leaving little if any for telecommunications infrastructure.

Another big concern is Trump's plan offers too few federal dollars and would require states and local government and the private sector to shoulder the bulk of the cost -- a difficult proposition they continue to claw themselves back to fiscal health following the economic downturn a decade ago that severely reduced tax revenues. And a task made more challenging as a public pension funding crisis emerges in the states and localities.

It's best to view the administration's proposal as just that -- an opening gambit that will surely result in intense negotiations in the coming months as states and locals push their funding interests. It's quite likely given the large number of governors and local officials citing the need for advanced telecommunications infrastructure as critical in the 21st century economy -- including some in attendance at a White House meeting where the administration's infrastructure plan was announced -- that it will assume greater priority as negotiations move forward.