NTIA Reauthorization Legislation Morphs Into Legacy Incumbent Protectionist Measure

NTIA Reauthorization Legislation Morphs Into Broadband Bill - Multichannel: On the broadband front, the bill establishes an Office of Internet Connectivity and Growth within NTIA to do outreach to communities in need of high-speed broadband as well as hold workshops and develop training tools to help expand adoption and access.

And in a move that warms the hearts of ISPs often complaining about overbuilding and potential waste, fraud and abuse in government subsidies, the new office would create a database identifying how federal broadband money was being used, including tracking construction and access to any infrastructure build-out.

Both of these are cynical provisions that will do nothing to support America's urgent need to modernize its legacy metallic telecom infrastructure to fiber to the premise serving all homes, schools and businesses. They are essentially designed to keep the sub optimal status quo in place and protect legacy incumbent telephone and cable companies wishing to preserve control over their nominal, limited footprint service territories without disruption.

Brought to you by broadband: TV viewing via connected devices up 65% since 2016

Brought to you by broadband: TV viewing via connected devices up 65% since 2016: Connected devices have made video streaming easy and ubiquitous -- 74% of U.S. TV households now have at least one internet-connected TV device, including smart TVs, streaming media devices (like Roku, Amazon Fire TV, Chromecast or Apple TV), connected video game systems, and Blu-ray players. Similarly, households with over-the-top video service are expected to exceed 265 million by 2022. Given the tremendous growth of broadband-powered devices, USTelecom remains committed to supporting policies that foster the innovation and investment necessary to keep pace with consumer demand.

This is an important trend driving the vertical integration of advanced telecom infrastructure with content such as this month's merger of AT&T and Time Warner.  It represents the "cable-lization of the Internet" as some have termed it and a return to the "walled gardens" of the early 1990s such as AOL and CompuServe. These services functioned as integrated platforms for content as well as communications such as email for a recurring monthly fee. We are witnessing a revival of the model, this time with bundled video content those early platforms couldn't deliver.

It's a regressive trend and counter to the move toward Internet protocol-based telecommunications since then that enables access to innumerable information and communication services (including Voice Over Internet Protocol or VOIP), obsoleting the walled garden model of a generation ago. It also represents a misplaced emphasis on entertainment over telecommunications. Capital is diverted to purchasing content rather than constructing and upgrading infrastructure. That reinforces neighborhood redlining as the big ISPs concentrate on affluent, high density neighborhoods where they can maximize ARPU and ROI with their video bundles.

Google Fiber doesn't have a wireless alternative because it would require huge technological breakthrough

Google Fiber Broadband Hype Replaced By Delays And Frustration | Techdirt: To be fair, Google's PR folks can't offer answers of what comes next because Google itself doesn't know what the wireless technology that will supplant fiber will look like. But even Google's wireless promises have been decidedly shaky. After acquiring urban wireless provider Webpass two years ago, some of that company's coverage markets have actually shrunk, with the provider simply pulling out of cities like Boston without much explanation. And many of the executives that were part of that acquisition have "suddenly" departed for unspecified reasons. At this point it's certainly possible that once Google Fiber is done with its multi-year, numerous wireless tests it settles on a cheaper (but still expensive and time consuming) alternative to fiber.

There's a simple answer here. It's because Google doesn't have (not yet, as least) an unconventional wireless technology that can replace fiber. That would require breakthrough technology that can get around the physics of radio spectrum that makes it difficult to reliably deliver bidirectional IP data streams to multiple users while penetrating objects and precipitation without interference. In other words, to get fiber's throughput, nothing tops fiber.

Milo Medin, Google's then vice president of access services, said as much at the 2013 Broadband Communities Summit, disabusing the notion that wireless can replace fiber and thus eliminating the cost of building the necessary infrastructure to support it:

Some argue that fiber networks are not really needed because of wireless network growth. As an engineer, quite honestly, this kind of talk makes my brain hurt. Wireless network growth is driven by fiber. All those base stations that smartphones connect to are increasingly connected by fiber because, as speeds go up, fiber is required to carry that kind of traffic.

In other words, wireless needs a lot of what some hope it can more cheaply substitute: fiber.

Public policy likely to shift to regard IP-based advanced telecommunications as a utility, aligning with public expectations

Internet Service Providers have historically regarded their “broadband” offerings as luxury upgrades to basic narrowband dialup service introduced in the early 1990s. Consequently, they upgraded their “last mile” delivery infrastructures to support a range of Internet protocol supported services such as high quality data, video, voice only in select areas where they believed a sufficient number of households would opt for their high end offerings. The working assumption was significantly fewer than half would do so. Hence to hedge their risk, ISPs favored areas with the highest density single family housing and multiple dwelling units (MDUs) to increase the likelihood their investment in upgraded infrastructure would produce a decent return over a relatively short duration in order to satisfy their investors.

Nearly three decades later, ISPs continue to follow this deployment strategy at the same time IP-based advanced telecommunications is increasingly seen as a basic utility service. In the United States, current regulatory policy is aligned with the ISPs “broadband” service-as-luxury business models. ISPs are free of universal service obligations like those that governed voice telephone service of the pre-Internet era, predicated on the policy principle that in a natural monopoly, market forces cannot assure all households requesting service will have their requests honored. That’s consistent with the current public policy that regards advanced telecommunications as luxury and not basic utility service. Why require ISPs to provide service to all requesting it when after all, it’s a luxury? Similarly as a luxury, regulating what ISPs can charge isn’t appropriate. Let them charge what the market will bear. (It will bear quite a lot for a service that consumers see less as a luxury than a basic service.)

The tension between the basic versus luxury service paradigm has been building in recent years and will soon reach a breaking point. As constituent complaints of infrastructure deficits grow more strident, policymakers of every stripe are increasingly describing advanced telecommunications as an essential utility like electric power and water service. Sooner rather than later, public policy will come into alignment with this view. Concurrently, expect a shift away from subsidizing investor-owned ISPs to build the necessary infrastructure to a publicly-led effort. It will be necessary in order to build rapidly enough to cover the persistent infrastructure gaps and to gain a greater degree of control and accountability than has existed in limited subsidy programs for advanced telecommunications infrastructure.

Schumer: Broadband is a Utility That May Require Price Caps | DSLReports, ISP Information

Schumer: Broadband is a Utility That May Require Price Caps | DSLReports, ISP Information: Senate Democratic leader Chuck Schumer uttered some words this week that likely terrified lobbyists and executives for AT&T, Verizon and Comcast. During his floor argument for a Congressional Review Act resolution that would restore net neutrality, Schumer stated that he believes that broadband should be viewed as an essential utility, and that we may need to eventually explore price caps to prevent monopolies from over-charging for services thanks to limited competition.

Schumer's right. And when it's an essential service, the potential for abusive price gouging is enormous.

Democrats and Republicans alike have traditionally avoided price caps on broadband service, in large part because deep-pocketed campaign contributors in the telecom sector have viciously opposed the idea for obvious reasons.  Even when former FCC boss Tom Wheeler reclassified ISPs as common carriers under Title II of the Telecom act he was careful to "forbear" from applying rate regulation onto ISPs.

But Schumer appeared to re-open the conversation of price caps on an uncompetitive broadband market during discussions about net neutrality, even though the likelihood of him actually following through with that isn't particularly likely given historical precedent. "You know, people say, well, let a private company do whatever it wants, let them charge whatever they want," Schumer argued. "But in certain goods which are essential we don't do that. Utilities, highways. The same thing now applies to the internet. It's a necessity and we have to have protections for average folks, for small businesses, for working families." 

Spot on. It's time to end the delusion that a utility market can be a competitive market. After all, how many electric, water and natural gas companies are competing for customers?

Jonathan Chambers on overcoming U.S. telecom infrastructure deficiencies

Overbuilding, aka Competition, is the American Way – Conexon

The following is a non-comprehensive list of rural broadband overbuilders that have announced over the past two years plans to build rural networks:

1. AT&T. Announced Project AirGig to send data over powerlines.
2. Google. Announced Project Loon to use balloons traveling at the edge of space to bring internet access to rural areas.
3. Facebook. Announced conducted tests to use drones to deliver rural broadband.
4. Microsoft. Announced trials to use TV whitespaces for rural broadband.
5. SpaceX/OneWeb. Announced plans to deploy thousands of low-earth orbiting satellites to deliver internet access to rural areas.
6. New T-Mobile. Announced its intention of 5G for all, extending 5G to rural areas.
7. Rural Electric Cooperatives. Dozens of fiber-to-the-home networks under construction.
   
   Which of these initiatives should the government favor?

Only No. 7. It's the only proven technology with headroom to accommodate bandwidth demand that's doubling every few years. And because federal funding of utility cooperatives has a successful record of constructing needed infrastructure in areas not sufficiently profitable for investor-owned providers.

If your answer is the government should not favor any one company or technology, then perhaps you also agree that the government shouldn’t favor telephone companies with their copper networks.

I would agree with the second part of the question. The existing Connect America Fund is regressive and wasteful in that it allows funding of legacy copper telecommunications networks. It's main purpose is to preserve the service area hegemony of legacy telephone companies, not improve infrastructure.

As a small first step, I propose that anywhere one of the overbuilders has already overbuilt a telephone company’s network without any public funding, the government should cease its funding in that area.

Yes, if overbuilt with fiber to the premise, option No. 7 above.

To make the government policy easy to execute, I propose that where 100% of the households in a census block have access to Gigabit service by a company that is not receiving a subsidy in that area, then the government shouldn’t fund any company in that area. That simple policy change would save the public hundreds of millions of dollars,
money that could be used where it is needed.

Let's dispense with the term "Gigabit service." Keep it simple. Fiber to the premise.

 As a second small step, I propose that all future funding follow individual consumer decisions. The telephone companies can continue to get their legacy support, except where a household chooses another carrier with a minimum of 100 Mbps service. In that case, the overbuilder should receive support that is equal to the funding being provided on a per household basis to the telephone company. Such a program should be limited in time, no more than a decade, in order to encourage overbuilders to move quickly and incumbents to improve their networks.

Again, keep it simple. Fiber to the premise infrastructure. That's the real network improvement. Don't fall into the incumbent created trap of focusing on "broadband speed."

U.S. doesn’t have a definitive “rural broadband” problem; it’s all about service area “footprints” and redlining

In the first part of the 20th century, U.S. policymakers appropriated funding to cooperatives and local governments to bring electrical and telephone service to rural America. As the century got underway, these utilities were offered only in cities – where investor-owned providers deemed them sufficiently profitable to build the necessary distribution infrastructure.

Many similarly describe the nation’s advanced telecommunications infrastructure deficiencies as a rural issue as it was for these utilities. It’s not that simple. True, the deficits tend to be greater in rural areas. But it’s not purely a matter of rural geography as it was many decades ago. Back then, entire rural regions lacked electric power and telephone infrastructure.

The situation today is different and more nuanced. Legacy telephone and cable companies first began offering always on “broadband” services using existing infrastructure starting in the late 1990s and early 2000s. It was offered not as a general telecommunications service, but as a premium “high speed” add on service in highly localized “footprints” in urban, suburban, exurban and rural areas compatible with their business models. Those models generally require capital build costs to be recovered in five years or less.

These highly granular "footprints" and the redlined areas outside of them -- passed over due to long durations to ROI and insufficient profit potential relative to the cost of building out infrastructure – cannot be compared to the large rural regions that lacked electrical and telephone service in the early 20th century. Consequently, building out advanced telecommunications infrastructure in the 21st century cannot be undertaken with a 1920s or 1930s perspective, framing it simply as a “rural broadband” issue.

Hence, the inability of “rural broadband” subsidy programs to close the gaps. Rural electrification and telephone subsidy programs were the right approach for their time. But that context does not easily translate to the complexities of modern advanced telecommunications infrastructure. Other factors beyond rurality come into play such as the number of occupied premises per mile of landline infrastructure and average income levels. The former trumps the latter as many high income homeowners in exurban areas without access to landline service can attest.

Legacy incumbent phone companies propaganda canard: Describing a duopoly as "intensely competitive"

Broadband Deployment & Competition Growing: Dedicated Federal Funding Needed to Close Digital Divide | USTelecom: U.S. Broadband Deployment Is Intensely Competitive. Our analysis also examines broadband deployment from the perspective of competition, which is not a focal area for the FCC’s legislatively mandated deployment analysis. U.S. providers have been deploying broadband infrastructure using a range of technologies for more than two decades. As a result, basic underlying competitive infrastructure from multiple providers is available in the vast majority of the country. On top of this foundational infrastructure, broadband providers invest tens of billions of dollars annually to upgrade networks with enhanced technologies, driving a competitive process of ever-expanding network capabilities The data indicate that competitive deployment is strong and growing, even at higher speeds. As of year-end 2016, 97 percent of Americans had at least one wired broadband network platform available to them and 86 percent had at least two wired options. Competitive availability – defined narrowly as at least two wired providers – at 25 megabits per second (mbps) download (DL) and 3 mbps upload (UL) was 50 percent at year-end 2016, up from 31 percent at year-end 2014 and 25 percent at year-end 2012. (Emphasis added).

Claiming that having a choice among two sellers constitutes an "intensely competitive market" is ludicrous. But that assertion is not to be taken literally on its face. The true intent of this propaganda from legacy incumbent telephone companies is to drive a perception that the line delivering telecommunications service to customer premises is somehow fundamentally different from the line that delivered voice telephone service decades before. True, advanced digital telecommunications can deliver data and video as well as voice. But that capability does not fundamentally alter the fact that a single line of fiber can deliver them all just as a copper one did for voice as well as optional custom calling services that came later.

The real goal of this cynical propaganda is to deceive public policymakers into thinking America's telecommunications infrastructure deficiencies can be solved by market forces. That may be true in a competitive market defined as one with many sellers and buyers with relatively equal access to quality and costs. It's certainly not the case for telecommunications infrastructure. Moreover, if market forces truly operated in telecommunications infrastructure, they would drive down deployment costs, making it more widely available on favorable terms to the millions of customers who use it and eliminate persistent infrastructure deficits.