Vermont's failure to ensure universal premise Internet service demonstrates need for national telecom infrastructure initiative

Some Vermonters Are Still Stranded In A Broadband 'Wilderness' | Vermont Public Radio: The importance of good broadband for work and education has been stated many times. Yet, as many clamor for faster speeds, there are hundreds of Vermonters still without anything the state considers broadband service.

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Most have satellite broadband but aren’t satisfied with it. They say at
the prices they’re willing or able to pay, slower speeds and limits on
downloads keep them from doing much more than checking email.

* * *

But nearly two years after Gov. Shumlin’s self-imposed deadline for providing broadband to every address in Vermont, there are still those who are stuck in the wilderness.

This situation isn't likely to change in Vermont and other states anytime soon unless as I discuss in my recent book Service Unavailable: America's Telecommunications Infrastructure Crisis, the federal government steps in with an aggressive and well funded national telecommunications infrastructure initiative. Given how far the nation has fallen behind in the generation since the Internet came into popular use, a crash program is needed to catch up.

Mobile wireless service won't solve America's telecommunications infrastructure crisis

Congress Seeks to Bolster Nation’s Broadband: (TNS) -- A draft bill making the rounds among Senate lawmakers would require selling even more airwaves than initially agreed to in the recent budget deal.

The language is part of a proposal that would move forward several bipartisan efforts aimed at boosting high-speed Internet access nationwide. The wide-ranging discussion draft bill in the Senate Commerce, Science and Transportation Committee comes after a series of hearings in recent weeks by the committee and its House counterpart where Republicans and Democrats have called for auctioning government-held airwaves to the private sector to increase the amount of wireless spectrum available to carry voice and data over the air. (Emphasis added)

"Boosting high-speed Internet access nationwide" isn't solely about mobile wireless as this story suggests. The biggest component of the United States' Internet access problem is landline-delivered premise -- and not mobile -- service. According to a U.S Federal Communications Commission estimate issued earlier this year, approximately 55 million Americans – about 17 percent of the population -- live in areas unserved for basic Internet service capable of supporting high-quality voice, data, graphics and video. Meeting this need requires fiber to the premise infrastructure. It can't be served by mobile wireless services alone because they can't offer adequate bandwidth to meet premise needs given the multiple connected devices used in the home.

A Last-Ditch Attempt to Start a 5th U.S. Telecom

A Last-Ditch Attempt to Start a 5th U.S. Telecom: Social Capital’s Chamath Palihapitiya, a former Facebook executive, said on Tuesday that he intends to build an American mobile carrier called Rama. It’s good timing—the window for building a fifth major American telecom is closing, and soon, it may not be possible anymore.

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Even if Rama ends up winning the spectrum it needs, it faces an uphill
battle. First, the company will have to start the slow and expensive
process of actually building the towers and infrastructure that make up a
wireless network. Palihapitiya said he wants to use “microcells,” or
tiny cell towers installed on people’s homes, to help build the network
quickly and provide better coverage. (Emphasis added)

The apparent strategy here is to use telco and cableco residential landline to backhaul the microcells. That of course will generate strong resistance from the large incumbent telcos and cablecos that also play or want to play in the mobile wireless space and prompt them to put restrictions in their residential service contracts disallowing the use of premise Internet service to support commercial mobile networks.

Massachusetts town case in point why federal government (and not state and local government) should finance telecommunications infrastructure

Montgomery voters reject high speed internet | WWLP.com: Monday night, more than 200 residents voted on whether to connect every Montgomery home to the World Wide Web as part of the “wired west movement.” Wired west is an initiative to connect all under-served Massachusetts communities to a high speed fiber. The state covers 35% of
the cost, with the town having to cover the rest.

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Only 140 people came out to vote on this issue last June, and it was rejected. A group of residents petitioned to hold another vote.

“It’s been difficult, for example I work at home, I’ve had problems with the speed of the internet. It’s actually affected my ability to run my business out of my home so that’s been a frustration,” said Sonia Ellis, a Montgomery resident.

128 people were for high speed internet while 103 were against it, but It required a two thirds majority. The project would have required the town to pay more than $600-thousand.

This is a case in point showing that relying on state and local government to finance the construction of universal fiber to the premise telecommunications infrastructure isn't good public policy. Many billions of dollars are needed to ensure every American home and small business has an FTTP connection that they should have had by 2010 but for the absence of sound policy and planning. As I argue in my recent eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, it's a job that requires the federal government to fund like building roads and highways in the pre-Internet era.

Bath Twp. man battles for broadband connection | www.daytondailynews.com

Bath Twp. man battles for broadband connection | www.daytondailynews.com: Malogorski wants to be able to show photos and videos of his work to the world online, but he has been struggling to get reliable broadband internet service for himself and his neighbors for years.

“I can’t figure out why we’re living in this hub of technology for the Midwest — Wright-Patt is the most important employer around here, so it’s very technically oriented. It doesn’t make any sense that we don’t have it,” said Malogorski, who lives on Ohio 4 between Upper Valley Road and Bath Road.

“Wright-Patterson Air Force Base is right beyond the treeline across the four-lane highway,” he said as he stood in his front yard pointing to the base, then the utility pole on his property, with AT&T and Time Warner Cable lines clearly visible above him.

This is a common example of telecommunications infrastructure disparities in the United States. Oftentimes people are located close to existing infrastructure that doesn't extend to their neighborhoods, discrediting the notion that rural areas lack infrastructure. They do have infrastructure. It's just arrayed in an incomplete, vexing crazy quilt of small "footprints" of neighborhoods with landline service and those without. That situation remains unlikely to change given the U.S. Federal Communications Commission's lack of enforcement of its policy adopted in 2015 classifying Internet service as a common carrier utility and thus mandating providers fill in the unserved pockets.

Combining two flawed subsidy programs won’t build FTTP infrastructure

Fellow blogger Steve Blum of Tellus Venture Associates suggests coordinating the U.S Federal Communications Commission’s Connect America Fund (CAF) Internet telecom infrastructure construction subsidies with a state subsidy program administered by the California Public Utilities Commission to multiply the amount of money available for such projects. (See Blum's blog post here)

Combining two fundamentally flawed subsidy programs, however, won’t produce a beneficial result considering the underlying weakness of both. Each is primarily structured to subsidize bandwidth, not infrastructure. They do so by defining subsidy eligible areas based on existing low bandwidth levels supported and delivered by legacy infrastructure rather than subsidizing the construction of modern fiber to the premise (FTTP) infrastructure in high cost areas. If an incumbent provider is providing that minimum bandwidth level, the area is deemed ineligible. That furthers the goal of the legacy telephone and cable companies to preserve the status quo by making it more difficult for others to finance FTTP builds in their service territories.

This is a key shortcoming because the primary problem in California and the nation is outdated and inadequate telecom infrastructure that needs to be replaced with FTTP infrastructure. Also, incumbent local exchange carriers (ILECs) are not motivated to construct FTTP infrastructure in high cost areas regardless of the availability of subsidies. Their business strategy is to focus on more profitable mobile wireless services and on cherry picking high end private communities and parts of low cost, urbanized areas for very limited FTTP builds.

Blair Levin's "broadband competition" fantasy

Achieving Bandwidth Abundance: The Three Policy Levers for Intensifying Broadband Competition | ISOC-DC: The trial and many errors of my own work have led me to believe in the following bottom line: that the highest priority for government broadband competition policy ought to be to lower input costs for adjacent market competition and network upgrades. Today I will make the case for that bottom line and illustrate where I think the greatest opportunity is; to create a virtuous cycle of upgraded mobile stimulating low-end broadband to upgrade, which in turn causes an upgrade of high-end broadband which, by using its assets to enter mobile, accelerates the need for mobile to accelerate its upgrade further.

Blair Levin, a Brookings Institution fellow who drafted the U.S. Federal Communications Commission's National Broadband Plan issued in 2010, somehow believes boosting mobile wireless "competition" to offer greater bandwidth will generate synergistic "competition" among landline premise Internet service providers and result in "bandwidth abundance." 

It's utter hogwash for the simple fact that telecommunications infrastructure -- regardless of whether it supports mobile or premise service -- is not a competitive market. Never has been and never will be due to high cost barriers to entry and uncertain return on investment as a mathematical expression in Levin's presentation illustrates. 

Levin's fantasy scenario would have us believe that if Verizon deploys next generation 5G mobile service, that would somehow spur Comcast or AT&T, for example, to upgrade and build out fiber to the premise (FTTP) infrastructure in areas where Verizon has rolled out 5G mobile. It's wishful economic sophistry. Levin offers no explanation as to how or why that would occur.

Market forces cannot address U.S. telecom infrastructure needs -- because infrastructure is not a market

Lawmakers eye broadband deployment issues | TheHill: When asked about that contention, witness Deb Socia, Executive Director of NextCentury Cities, argued that broadband was essential enough that government should step in to improve access.

She said that she believe “we’re coming to the place where we need to think of it in the same way, that it is essential infrastructure and that we need all hands on deck.

“And if the market can’t solve the problem then we need to figure out how to solve the problem.”

Socia's point goes to the nub of America's telecommunications infrastructure problem. Telecom infrastructure is not a competitive market and never will be. Market forces therefore cannot offer a solution. Indeed, as I posit in my eBook Service Unavailable: America's Telecommunications Infrastructure Crisis, the nation's excess reliance on market forces has in fact brought about the issue of inadequate infrastructure wherein large numbers of Americans lack sufficient infrastructure to reliably deliver modern Internet-based telecommunications services to their homes and small businesses.

Tennessee cooperative official compares 1930s electrification to today's telecom infrastructure challenge

Officials Urged To Let Local Utilities Cooperate On Providing Broadband - Chattanoogan.com: Mike Knotts, director of government affairs, Tennessee Electric Cooperative Association, brought a somewhat different perspective to the conversation when he said, “Advanced telecommunications will be as important to the next 100 years of electric system operation as steam power was to the first 100 years.”

He said the number one barrier to providing adequate Internet access is “purely customer density” and suggested looking at the model of rural electrification in the 1930s. “What cured the problem of rural electrification was the ability to create nonprofit entities that were able to amortize those expenses over much, much longer periods (than private companies). That was the very simple magic that took, in 10 years, less than 10 percent of American farms being electrified to 100 percent — not much more in the secret sauce other than that.”

Actually, Mr. Knotts, there is a another ingredient that's missing today: capital. Unlike today, in the 1930s the federal government stepped up with significant funding and not just talk, window dressing and "funding leads."

Time to stop whining about lack of competition and build national telecom infrastructure

No 'Bundle' of Joy: Cost of TV, Internet and Phone Service Rising - NBC News: "What we're finding is that consumers in the U.S. pay more for less … than their peers around the world," said Sarah J. Morris, senior policy counsel at think tank New America's Open Technology Institute.

In a 2014 study, the institute found that home broadband connectivity at every speed was more expensive on average in the U.S. than in Europe. It also found that major American cities lag in both speed and pricing compared to overseas counterparts like Seoul, Hong Kong, Paris and even Bucharest, Romania.

"A lot of this breaks down to competition … even though the ISPs like to claim the market for broadband Internet access is competitive, when you really break it down, it's not," Morris said. "This exacerbates low speed for high cost."

Morris is correct. Telecommunications infrastructure and its vertically integrated, bundled service offerings by telephone and cable companies is a naturally monopolistic market. But complaining that a monopolistic microeconomy lacks competition isn't going to make it competitive. It's about as productive as complaining about the weather.

An example of a highly monopolistic form of infrastructure is roads and highways. They cost so much to build and maintain that with the exception of some privately operated toll roads, most are owned and operated by the government. Having a private competitive market with many road builders and operators would be uneconomic and wasteful. For drivers, it would make no sense to have a choice to take Road A, Road B or Road C from a given point to a given destination. One well maintained road with sufficient capacity would do just fine. Same thing with Internet service. One fiber highway and many fiber trunks and lines reaching all American homes, schools and businesses -- a national telecommunications infrastructure -- is what America needs, as I argue in my recently published book Service Unavailable: America's Telecommunications Infrastructure Crisis.

Obama flat wrong, at odds with FCC in framing telecom infrastructure as competitive market

Municipal Broadband Battles | Al Jazeera America: Amid concerns in some markets that big telecoms and cable companies are providing service that is too slow and too expensive, some cities are starting their own Internet services, spending millions of dollars to bring super-high-speed, or gigabit, Internet service to their communities through a new fiber-optic infrastructure. Proponents call it the single most important piece of infrastructure of the 21st century, attracting businesses, bolstering education and raising property values.

President Barack Obama has declared community broadband, as it’s called, a key to economic prosperity. “Today I’m making my administration’s position clear on community broadband. I’m saying I’m on the side of competition,” he said. (Emphasis added)

The problem with the president's framing telecom infrastructure as a competitive market is he's just flat out wrong. It can never be a truly competitive market with many sellers and choices for consumers due to the high cost of deploying fiber to the premise infrastructure. Those high costs have kept telcos and cablecos from upgrading their legacy infrastructures and building out fiber to all customer premises in their service territories to replace the outdated metallic cables designed for voice telephone and cable TV service of decades past. Instead, they've built limited fiber to the premise in selected high density "footprints" and redlined countless American neighborhoods, leaving many still on dialup that was state of the art technology when Bill Clinton was serving his first term as president.

Moreover, by furthering the notion that telecom infrastructure is a competitive market offering, Obama is at odds with the Federal Communications Commission that -- at Obama's urging -- adopted a common carrier regulatory framework early this year predicated on telecom infrastructure as a monopolistic market. Consequently, the FCC's Open Internet rulemaking requires Internet service to be offered to all customer premises requesting it -- as telephone service before it -- under the universal service and nondiscrimination provisions of Title II the federal Communications Act.

Title II universal service obligation could bolster cities' case in Verizon FiOS buildouts

Like NYC, Pittsburgh Claims Verizon Didn't Meet FiOS Promises | DSLReports, ISP Information: While Verizon long-ago froze further FiOS deployments, the company did strike sweetheart deals with numerous east coast cities that gave the city a citywide franchise and numerous tax benefits, in exchange for the promise of full city FiOS coverage. But as we noted at the time, most of those agreements came with fine print that allowed Verizon lawyers to wiggle over, under, and around any uniform fiber deployment obligations. Shockingly, cities like New York City are now thinking about suing the telco for missing deployment promises.

You can add Pittsburgh to the list of cities who believe they were swindled by Verizon. Pittsburgh Mayor Bill Peduto has, several years later, started noting huge coverage gaps in the city's FiOS coverage. Peduto was one of 14 Mayors that recently wrote a letter to Verizon begging the company to upgrade its lagging DSL networks.

The U.S Federal Communication's Commission recently promulgated regulations classifying Internet as a common carrier telecommunications service and subject to universal service obligations under Title II of the Communications Act could strengthen the cities' case against Verizon. Local governments have successfully asked the FCC to intervene on their behalf when legacy incumbent providers used state laws to bar municipalities from building their own fiber telecom infrastructure. They could do so in this instance as well in a major test of the FCC's willingness to hold big incumbents accountable under its new rules.

Local governments seek federal preemption of Internet regulation

In the early 2000s as legacy cable companies contemplated offering Internet-protocol (IP) based services including Voice Over Internet Protocol (VOIP), they feared local governments that franchised their decades-old cable television services would demand they offer IP services to all neighborhoods within their jurisdiction. That prospect was very real possibility given their residents had other options for television service including over the air broadcast and satellite, but would need landline infrastructure built out in order to provide universal Internet access as demand for Internet service jumped. Also, by offering voice service via VOIP, cablecos began emulating telephone companies that are required to offer universal service to any premise requesting it.

To head off what to them appeared to be a costly prospect, cablecos heavily lobbied state governments to preempt the locals by giving state public utility commissions franchise authority over IPTV. While nominally limited to video services, for both cablecos and phone companies the move forestalled for many years any local requirements they upgrade and build out their Internet infrastructure since their video services are typically bundled as part of landline premise Internet service.

Now more than a decade later, local governments are getting in on the preemption game. Since their oxen were gored by their states at the behest of the legacy incumbent cablecos and telcos, they are looking to the federal government for relief. An example is the Federal Communications Commission’s order earlier this year to preempt statutes in two states barring local governments from building their own infrastructure. Doing so would allow local governments to get around the state sanction of the incumbents’ redlining practices.

In Arizona, local governments appear to be looking to the feds to resolve a dispute involving the city, a legacy cableco and Google Fiber over the city’s regulation of video services. “The City believes these questions will more likely be resolved more definitively in the future by the Federal Communications Commission or a similar authority,” said Scottsdale Chief Information Officer Brad Hartig in a statement. (H/T to DSLReports).

In California, two legacy telcos are making an argument that would place Internet services in a regulatory non man’s land, subject to neither state nor federal jurisdiction. Frontier and Verizon contend regulation of Internet service falls under federal jurisdiction per the FCC’s order classifying Internet as a common carrier telecommunications service under Title II of the federal Communications Act. But at the same time, they argue that order does not preempt California law giving the California Public Utilities Commission jurisdiction over legacy (non IP-enabled) telephone service but not Internet services. (Item here at Steve Blum’s Blog)

U.S. facing telecom infrastructure crisis due to poor policies and planning, according to new book

A generation ago, it became clear that telecommunications was shifting to the Internet. However, as a nation, the United States failed to build the infrastructure to reliably support and deliver it to all Americans.

Today, the nation is paying the price for its lack of an orderly transition plan to move from legacy metal cable systems designed to support the analog voice telephone and cable television service of decades past to fiber optic-based infrastructure optimized for the Internet in the 21st century.

According to a new eBook, Service Unavailable: America’s Telecommunications Infrastructure Crisis, the United States – the nation that innovated the Internet – now stands at least two decades behind where it should be and requires a crash federal infrastructure initiative to catch up.

In much of the nation, many locations have no Internet service options due to inadequate infrastructure -- and have little prospect of obtaining service in the foreseeable future. According to the U.S Federal Communications Commission, as of 2015 approximately 55 million Americans – about 17 percent of the population -- live in areas unserved for basic Internet service capable of supporting high-quality voice, data, graphics and video. Meanwhile, demand for Internet bandwidth is growing exponentially as U.S. residential and business premises use multiple Internet-connected devices, straining the capacity of legacy landline infrastructure and wireless services.

Consequently, the nation now faces a telecommunications infrastructure crisis. As time passes, the crisis deepens as Americans grow increasingly reliant upon robust and reliable Internet connectivity that only fiber can accommodate now and into the future.

Just as the interstate highway system supported commerce in the twentieth century, the United States needs an information highway bringing fiber connections to all Americans no matter where they live in the information-based economy of the new century.

Authored by longtime telecommunications blogger Frederick L. Pilot, Service Unavailable drew praise from Michael Copps, who served on the U.S. Federal Communications Commission from 2001 through 2011:

“Pilot digs deep in the facts and emerges with a spot-on, realistic assessment of America's stultifying broadband shortfall,” Copps wrote in a foreword to the book. “He shows how two decades of federal inaction permitted huge telecom incumbents to ration scarcity rather than build bandwidth abundance. And he demonstrates beyond a shadow of doubt that without a true national mission to build this essential infrastructure, we will continue to stifle economic opportunity for millions of citizens and shackle America's global economic performance, too.”

Service Unavailable is offered through Amazon.com and iBooks.