Selling data consumption tiers rather than connectivity

Net neutrality makes comeback in California; lawmakers agree to strict rules | Ars Technica: Wiener's office told Ars that the compromise version will remove a ban on "application-specific differential pricing," which the bill defined as "charging different prices for Internet traffic to customers on the basis of Internet content, application, service, or device, or class of Internet content, application, service, or device, but does not include zero-rating." That means an ISP could sell add-ons to data plans that let customers buy extra data just for a certain type of website or online service. A customer's base data plan would still allow browsing to any kind of website or service in this scenario, but the package of extra data could be restricted just to social media sites, or some other category, Wiener's office explained. The effect would be similar to zero-rating, but Wiener's office said it wouldn't involve exempting any traffic from the customer's base data plan. (Emphasis added)

Mobile device users are familiar with their carriers' business models: selling tiered plans based on the amount of data consumed. The more consumed, the higher the price tier. As well as functional costs such as throughput being throttled back once a certain consumption threshold is exceeded.

This story suggests the expansion of this pricing model to landline-based service. And that the development likely motivated providers of advanced telecom service providers to successfully lobby the U.S Federal Communications Commission to recently scuttle its 2015 Open Internet rulemaking that would have made doing so problematic. If landline like mobile providers can sell finite "bandwidth by the bucket" (or scoop of ice cream to use the Verizon Wireless analogy), that provides them a pricing rationale to offer discounted or better service to end users accessing their proprietary content -- the "walled garden" consumer facing model that characterized the early days of the Internet with ISPs like CompuServe and AOL. And telephone service for decades before, when calls were billed based on minutes used and distance of the call.

The real policy issue here is whether providers of advanced telecommunications services should be able to maintain vertically integrated business structures and product offerings based on those business models of the past and whether doing so is good for consumers. At a time when Internet protocol-based telecommunications can provide so much more than the bill per unit voice phone call of legacy POTS (Plain Old Telephone Service) or distant TV channels of the legacy CATV model.

Comcast to build FTTP telecom infrastructure in 2 Michigan townships after tax measure fails

According to the Holland (Michigan) Sentinel, Comcast cites lower deployment costs due to improved carrying of fiber vs. COAX cable:

As Laketown finally gets internet, rural access still a prevalent issue elsewhere: Traditional coaxial cables use radio frequencies as the medium to transmit data, which means there is a larger amount of signal loss compared to fiber technology. This loss of signal that comes with traditional coax has made it difficult to serve Laketown and Saugatuck townships in the past because of large-size properties and widespread homes.
Now Comcast can build fiber to each home without building or extending main facilities to each one at about the same cost as using traditional coax cables to build the network out, Gilbert said.

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."