Eldo Telecom

Obama cites America's "incomplete" telecom infrastructure in State of Union address

2012-01-28T07:54:00.005-08:00

Since this blog was created in 2006, it has been dedicated to the exploration of strategies and methods for the build out of America's incomplete digital telecommunications network that leaves millions disconnected from the Internet because modern telecommunications infrastructure does not reach their homes and small businesses.

It was thus very encouraging to hear President Barack Obama call out the nation's "incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world" in his State of the Union address to Congress this week. Millions of Americans are painfully aware of just how incomplete Internet infrastructure is as they look only a couple of miles away or even just down the road or street to neighbors who have access while they do not.

The president also used his speech to call upon Congress to fund telecom and other critical infrastructure. Congress should respond to Obama's urging by providing technical assistance and construction funding for community-based networks to finish the job where investor-owned providers such as legacy telcos and cable companies cannot make a business case for doing so. This is what was done in the 1930s when market failure led to a similar problem with telephone service and electrical power and cooperatives and local governments filled in the gaps.

It's no longer 1996: Outdated perceptions of the Internet persist

2012-01-17T20:29:00.010-08:00

There remains a major misapprehension in the United States -- in the nation that invented it -- that the Internet is only about email and websites when in fact it delivers Internet Protocol TV and movies. It's also the updated version of Plain Old Telephone Service (POTS) over copper to Voice Over Internet Protocol (VOIP). And that's not even mentioning videoconferencing, telehealth and distance learning. All can be delivered simultaneously over a single fiber optic connection.

Nevertheless, there remain many media accounts such as this one from Minnesota Public Radio that would have readers believe it's still circa 1996 when the Internet was a relative novelty (then mostly accessed via AOL over dialup connections). A decade and a half ago, it was understandable that as this January 17, 2012 MPR story reports there were "Many people don't believe there's anything on the Internet they need." That was a relevant perception back then. But it's badly outdated in 2012.

Why "wireless broadband" will remain in mobile market segment

2011-12-23T11:59:00.014-08:00

This article in CED magazine explains why 4G cell service can't substitute for premises wireline Internet service:

Even if you’re a light user or a millionaire, you might still think twice about going entirely wireless. Allen Nogee, principal analyst for In-Stat, says he actually tried an LTE modem as his sole Internet connection for about four months. He was pleased with the service; however, he did eventually go back to a fixed line for a number of reasons.

Nogee says that while price is certainly an issue, depending on usage, spectrum is the truly prohibitive element that will prevent LTE from becoming an in-home solution. Nogee says that eventually the cell towers currently pumping out LTE will get crowded, and that’s when things get complicated.

“It’s a shared resource, with a set amount of spectrum, and operators only have so much spectrum,” Nogee says. “If we had no wired Internet in the United States and everyone attempted to use LTE, it just wouldn’t work. There’s just not enough capacity there.”

Another analyst, Strategy Analytics, predicts fixed wireline will remain the primary premises Internet connection and will not be displaced by 4G wireless connections where wireline infrastructure exists and serve as an alternative means of access where it does not.

“We see two parallel markets for 'Mobile Only' in the US: users in remote or underserved areas where dependable fixed broadband is unavailable, and cost-conscious casual users, who are unlikely to exceed imposed data caps, and for whom mobile data rates are ‘good enough,’” said Ben Piper, Director of the Service Provider Strategies program at Strategy Analytics.

What about tablets? Might tablet users cut the cord to these devices and instead rely exclusively on mobile wireless connections, especially since tablets are so portable? Not likely. Nearly all tablet data traffic will be transported via fixed premises Internet service, Sandvine says in its broadband predictions for 2012.

Documentary explores challenges and alternatives to getting sorely needed Internet infrastructure

2011-12-21T20:37:00.005-08:00

Rob Osborn of Sacramento, California-based shibuya-tv, LLC has released his long awaited documentary, Broadband Blindness, that discusses the challenge of building adequate digital infrastructure to deliver premises Internet connectivity to meet exponentially growing bandwidth demand.

Also covered are alternative business models to construct the necessary infrastructure to customer premises including telecom cooperatives such as the one I formed in my community, the Camino Fiber Network Cooperative.

Susan Crawford on the state of U.S. Internet access

2011-12-04T10:51:00.017-08:00

Susan Crawford has penned an excellent overview of the current state of Internet access in the United States in The New York Times, The New Digital Divide.

As the title of her piece suggests, Internet access is highly fragmented. Cable companies provide limited wired access in discrete, monopolistic markets in densely populated metro areas for those able to afford the $100 monthly cost (when bundled with voice phone and video) that these cablecos can increase at will absent the check and balance of market forces and rate regulation.

Meanwhile, lower income Americans who can't afford both wired and wireless access rely on wireless smartphones for Internet connectivity that costs half as much as bundled wired access. So must those who can afford wired access but can't get it at any price because of incomplete build out of wireline infrastructure. But it's not full access and comes with major disadvantages versus wired premises service. Crawford explains:

The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.
It is not just inconvenient — many of these activities are physically impossible via a wireless connection. By their nature, the airwaves suffer from severe capacity limitations: the same five gigabytes of data that might take nine minutes to download over a high-speed cable connection would take an hour and 15 minutes to travel over a wireless connection.
Even if a smartphone had the technical potential to compete with wired, users would still be hampered by the monthly data caps put in place by AT&T and Verizon, by far the largest wireless carriers in America.

FCC issues proposed order creating Connect America Fund

2011-11-19T15:35:00.010-08:00

The U.S. Federal Communications Commission has released its proposed order revamping the Universal Service Fund (USF) that has for decades subsidized plain old telephone service (POTS) in high cost areas. The USF will now be directed to support Internet connectivity as the Connect America Fund (CAF). The CAF will instead subsidize telecommunications infrastructure to serve what the FCC estimates to be 18 million Americans who involuntarily remain off the Internet “grid” because it costs too much to connect them.

Whether the proposed order would achieve that and do so in a timely manner is an open question. The executive summary of the rather inscrutable 759-page document states that “[w]hile continuing to require that all eligible telecommunications carriers (ETCs) offer voice services, we now require that they also offer broadband services.” But a close reading of the order shows no indication the FCC will expand the telcos’ existing common carrier obligation to provide voice service to all (and not just some) premises in their service areas to encompass Internet. For example, paragraph 1090 on page 398 of the proposed order:

Under section 214 of the Act (the federal Telecommunications Act of 1996), the states possess primary authority for designating ETCs and setting their “service area[s],” although the Commission may step in to the extent state commissions lack jurisdiction. Section 214(e)(1) provides that once designated, ETCs “shall be eligible to receive universal service support in accordance with section 254 and shall, throughout the service area for which the designation is received . . . offer the services that are supported by Federal universal service support mechanisms under section 254(c).” Although we require providers to offer broadband service as a condition of universal service support, under the legal framework we adopt today, the “services” referred to in section 254(e)(1) means voice service, either landline or mobile. (Emphasis added).

That sounds like POTS and not Internet. In addition, there is no reference in the proposed order to Title II Section 214(e)(3) of the Telecommunications Act of 1996 that empowers the FCC to "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for that unserved community or portion thereof." So it appears that telcos could continue to not serve some areas even while accepting CAF subsidies to serve others -- thereby perpetuating the existing problem of broadband black holes.

It’s also unclear from the proposed order how unserved areas in states where the incumbent telco has relinquished its carrier of last resort status would be able to benefit since these carriers would appear to be ineligible for CAF subsidies. Or whether telcos, even if eligible for CAF subsidies, would accept them. In California, for example, telcos have generally shunned generous subsidies available through the California Public Utilities Commission to offset the cost of constructing infrastructure to provide Internet connections to premises in unserved and underserved areas of the state.

Finally and perhaps most importantly, given that many people have and continue to “cut the cord” to landline voice service, will there be enough money to be had from phone bill surcharges that have historically funded the USF to sustain the CAF?

AT&T and Verizon’s Deteriorating Legacy Landline Networks

2011-11-14T21:20:00.010-08:00

Phillip Dampier has posted an excellent piece summing up the current dreary state of commercial premises telecommunications service in the United States. Dampier depicts telcos as caught between the old world of central office switched plain old telephone service (POTS) and its aging and increasingly obsolete copper cable and today's world where fiber optic infrastructure delivers voice, video and data over the Internet.

Telcos can't afford to make the change over from the old world to the new. So they're trying to limit their losses by keeping their old copper POTS cable plants functioning with bubble gum, bailing wire and trash bags while boosting their bottom lines with smartphone services delivered over more lucrative mobile wireless networks that don't have the carrying capacity to substitute for fiber to the premises infrastructure.

Dampier's post makes a powerful case for community owned fiber networks. There's simply not enough money in the fiber to the premise architecture to support an investor ownership model even for large corporations and their favorable economies of scale. Without community fiber networks, much of the U.S. will remain disconnected from the Internet for the foreseeable.

Cable emerges as dominant commercial ISP

2011-11-02T09:12:00.019-07:00

As the Internet becomes the all purpose global telecommunications medium delivering voice, video, the web and email, cable companies have emerged as the dominant Internet Service Provider (ISP).

As Susan P. Crawford explains in this Harvard Law & Policy Review article The Communications Crisis in America, compared to incumbent telcos and wireless and satellite ISPs, only cable offers sufficiently robust bandwidth and headroom going forward. Telcos can't keep up since they would incur unabsorbable costs to replace their obsolete copper cable plants with fiber -- costs that would also make their generous stock dividends obsolete.

That's not likely to change despite the Federal Communications Commission's recent reforming of the Universal Service Fund (USF) from subsidizing plain old telephone service (POTS) in high cost areas to Internet. The Connect America Fund (CAF) requires telcos merely provide first generation DSL-level connectivity of 4Mbs for downloads and 1Mbs up and allocates only $4.5 billion a year -- hardly enough to meaningfully offset the cost of changing out decades-old copper plant for fiber.

In the wireless realm, the physics of radio spectrum hamstring wireless ISPs while satellite Internet -- on the verge of obsolescence from the day it was introduced -- has clearly reached its expiration date.

With cable now the dominant commercial Internet provider for most Americans, Crawford argues for increased government scrutiny of its monopoly market power. Crawford's position may draw support from community networks that have gone up against cable companies that pull out all the political stops to preserve their monopolies. The cable guys don't always win as Longmont, Colorado showed this week and as reported by Christopher Mitchell of Community Broadband Networks . Community networks also have a technological carrying capacity edge over the hybrid coax/fiber cable plant employed by cable companies since they typically deploy full fiber to the premises networks.

Show me the infrastructure: Missouri lags on Internet access

2011-11-02T04:58:00.002-07:00

Missouri’s digital divide is growing, a trend that threatens to leave farmers and agribusiness ventures at a disadvantage unless federal policymakers make concerted efforts to improve technology infrastructure in rural communities and small towns, according to a new study by the Community Policy Analysis Center (CPAC), located in the Truman School of Public Affairs at the University of Missouri. The study shows that Missouri is significantly behind national averages for overall statewide broadband Internet access.

Tom Johnson, the director of CPAC and co-author of the study, analyzed data from multiple sources, including the U.S. Department of Agriculture (USDA) and the Missouri Broadband Business Survey by the state’s MoBroadbandNow initiative, and found that Missouri is lagging behind other states on broadband access, a gap that may have serious implications for the future development of the state’s $12.4 billion agriculture industry.

Click here for the rest of this news release from the University of Missouri.

Community networks should be eligible for CAF subsidies

2011-10-13T08:52:00.016-07:00

U.S. Federal Communications Commission (FCC) is about to release details of its Connect America Fund (CAF) that will reform the current Universal Service Fund that subsidizes switched voice service to instead subsidize Internet connectivity in high cost areas.

The FCC faces a significant challenge in how it defines those areas eligible for CAF subsidies given that wireline Internet access is highly granular. Incumbent investor-owned cable and telephone companies parse their service areas very tightly when it comes to determining what is and what isn't a high cost area for providing Internet service. A given home or business may have access while another just down the road or street is deemed too costly to serve and is relegated to dialup or satellite. These premises can't be described as situated in remote, isolated areas since they are almost on top of areas that have wireline Internet access.

Targeting CAF subsidies to the most remote regions of the United States won't help these folks. They comprise many of the 24 million Americans that FCC Chairman Julius Genachowski noted in a February 7, 2011 speech "couldn’t get broadband today even if they wanted it. The infrastructure simply isn’t there." It's there for their neighbors -- but not for them.

Many communities have responded to this widespread problem by building their own fiber to the premises networks to fill in the gaps. These networks must necessarily overlap the footprints of the incumbent's incomplete, Swiss cheese infrastructures since telecommunications infrastructure like other utilities must cover sufficiently large geographical areas in order to be economically viable. The FCC should designate these community networks as eligible for CAF subsidies if they meet certain requirements such as providing voice and 911 emergency service at standards that meet or exceed those placed on existing wireline providers.

Telehealth Market To Hit $6.28 Billion By 2020

2011-10-02T11:47:00.003-07:00

The global telehealth market is headed for explosive growth over the next decade, according to a new report from InMedica, a division of IMS Research. The main reasons are increasing disease prevalence, an aging population, and governmental pressure to hold down healthcare costs.
"Many public healthcare systems now have targets to reduce both the number of hospital visits and the length of stay in hospital," said Diane Wilkinson, research manager at InMedica, in a press release. "This has led to a growing trend for healthcare to be managed outside the traditional hospital environment, and as a result, there is a growing trend for patients to be monitored in their home environment using telehealth technologies once their treatment is complete.

It's not only the aging population but also its massive numbers as the Baby Boom generation enters maturity. As one of the sources quoted in this article points out, there aren't enough doctors and institutions to care for them nor sufficient funds to pay for that care. Home-based care however will require an extensive revamp of our outdated and incomplete telecommunications infrastructure so that every home is served by big fiber optic pipe with the capacity to carry large amounts of data necessary to support remote diagnosis and monitoring.

American Jobs Act misses on modernizing, building out nation's outdated telecom infrastructure

2011-09-08T21:24:00.015-07:00

The Obama administration's American Jobs Act unveiled today misses the opportunity to build out the nation's outmoded wireline telecommunications infrastructure at a time when millions of Americans remain disconnected from the Internet. The White House instead continues to propose mobile broadband as the means of bridging the gap:

Expanding Nationwide Wireless Internet Services For the Public and the First Responders, in a Fiscally Responsible Way: The plan follows the model in the bipartisan legislation from Senators Rockefeller and Hutchison in including an investment to develop and deploy a nationwide, interoperable wireless network for public safety. The plan includes reallocating the D Block for public safety (costing $3 billion) and $7 billion to support the deployment of this network and technological development to tailor the network to meet public safety requirements. This is part of a broader deficit-reducing wireless initiative that would free up public and private spectrum to enable the private sector to deploy high-speed wireless services to at least 98 percent of Americans, even those living in remote rural and farming communities.

It's a major misapprehension on the part of the Obama administration to propose mobile wireless broadband as the means of connecting American homes and businesses to the Internet. Mobile broadband as its name implies is primary intended for mobile access and not to serve fixed premises locations. That's why it comes with preset caps on how much bandwidth is allotted to each customer as this post by Community Broadband Networks explains. Wireless Internet providers don't want customers using it for regularly accessing the Internet and particularly downloading high bandwidth demand video content.

Instead of taking this misguided approach, the administration should as part of its American Jobs Act fund fiber optic to the premises infrastructure and provide technical assistance grants to local governments and consumer telecom cooperatives to help them deploy it to homes and businesses where a business case cannot be made by investor owned providers to build out their incomplete networks.

Migrating from DSL to FTTP

2011-09-07T05:29:00.004-07:00

More indications that providers are winding down DSL and migrating to fiber to the premises (FTTP) per this gigaom item on North State Communications of North Carolina:

North State offers an 80 Mbps down/30 Mbps up for consumers at a 12-month introductory price of $49 a month, which is about what I pay for 12-13 Mbps down/ 2Mbps up cable broadband from Time Warner here in Austin. However, the most popular package North State sells is a 30/30 Mbps symmetrical package, although he didn’t disclose penetration or take rates. Tucker also noted that the company is still supporting its 10 Mbps DSL business in its service area, but he doesn’t plan on making more investments in the technology. “Back in 2003 and 2004 and 2006, we were out there shortening loop lengths, building out fiber to the node and all that, but now we’re going to stick with maintenance,” Tucker said

Verizon misses on price points for higher tier FiOS service

2011-08-27T06:03:00.007-07:00

There are four key elements to a successful business offering: product, price, promotion and distribution channel. When it comes to the high end of its FiOS fiber to the premises (FTTP) Internet service, Verizon has most but not all of those elements.

The missing element? Price. At $200 a month for service providing downstream connectivity of 150 Mbit/s and 35 Mbit/s on the upside, "nobody's buying," reports Kathy Brown, Verizon's senior vice president for public policy according to this Light Reading story. Even in university towns, where Aspen Institute fellow and former government broadband policy guru Blair Levin wants to explore bringing gigabit service through his Gig.U project. Consumers, Brown notes, instead opt for cheaper service tiers providing connectivity at lower speeds.

Of course few are interested in buying Verizon's higher end service at $200 a month. That's an unacceptable price for most consumers. It's also an expected consequence of telco marketing strategy that rations bandwidth, creating an economic disincentive for customers to use more. Products and services cannot be successful when price points are set unrealistically high. It is also pointless to blame consumers for not buying when they are.

Telcos propose reforming USF to subsidize legacy DSL

2011-07-31T07:06:00.018-07:00

A half dozen first and second tier telcos including America's largest, AT&T and Verizon, are proposing to replace the existing Universal Service Fund that subsidizes switched voice service with two new subsidy programs to provide Internet connectivity in high cost areas. The proposal was made in a July 29 filing with the U.S. Federal Communications Commission.

One program would support wireline service, the Connect America Fund (CAF). The other, the Advanced Mobility/Satellite Fund, would subsidize wireless and satellite service in the least populated, highest cost areas of the nation. The CAF subsidy would be highly granular -- down to the census block level served by an existing telco central office.

The CAF is aimed at subsidizing buildout of the telcos' legacy Digital Subscriber Line (DSL) service using fiber to feed remote DSLAMs that serve premises using the existing copper cable plant. The CAF plan proposes approximating the FCC's current asynchronous minimum definition of broadband, 4 Mbs for the download side of the connection and 1 Mbs for uploads. (The CAF proposal calls for an upload speed of 768 Kbs)

The filing comes just one week after AT&T CEO Randall Stephenson declared DSL obsolete technology. Apparently it's not for those parts of AT&T's service area where the company has opted not to invest in building out its VDSL-based U-Verse service. For those areas, legacy ADSL that offered throughput at the current FCC minimum that was state of the art technology a decade ago will have to suffice.

If these telcos had been smart and exercised even a slight degree of foresight, they would have made this proposal in the late 1990s when they first began to roll out DSL service. Or by 2000 at the latest. At that time, they clearly knew a business case couldn't be made to deploy DSL in large swaths of their service territories without some form of subsidization.

This proposal is not only tardy by a decade or more. It sets the throughput bar too low by fixing it on today's current minimum definition of broadband. With Internet bandwidth demand growing at a rapid pace to support increasingly bandwidth hungry applications -- most notably video -- today's 4 Mbs down and 1 Mbs up standard is by definition the edge of tomorrow's obsolescence. Some would argue it's already obsolete.

The incumbent telcos' proposal also comes as community broadband projects are taking off and building out in many parts of the nation that provide far faster, future proof Internet connectivity using fiber to the premise connections.

Copper vaporware as AT&T chief declares DSL obsolete

2011-07-23T11:17:00.012-07:00

Every couple of years or so, an article like this one by Tara Seals of V2M appears arguing legacy copper telecommunications infrastructure designed for a pre-Internet analog era is far from obsolete. Technical innovations can extend its lifespan, even as bandwidth demand is increasingly challenging its carrying capacity, particularly from Over The Top (OTT) video content:

Telcos are seeking cost-effective solutions to maximize their legacy infrastructure. Reducing crosstalk across copper bonded pairs using the ITU-T G.vector standard (G.993.5), introducing software solutions to maximize network logistics and using caching in the network are all solutions that are occurring right now, as telcos position themselves to meet the rapidly growing consumer OTT demand.

If that's the case, then why did AT&T CEO Randall Stephenson declare this week that the workhorse technology that has transported Internet protocol content over AT&T's copper network for the past decade and a half -- Digital Subscriber Line (DSL) -- is obsolete?

What about that innovation to stave off copper obsolescence? If it were for real instead of vaporware hype, it would truly provide AT&T tremendous opportunity to offer more wireline Internet services to a lot more customers over its legacy copper plant. Clearly for AT&T, that's not the case as the telco shifts away from residential wireline and is instead concentrating capital expenditures on personal wireless services.

Managing by eyeballing butts in chairs instead of work product comes with $900 billion lost opportunity cost

2011-07-08T16:53:00.010-07:00

Despite the rapid growth of the digital economy and the Internet that makes the specific time and location for getting work done less and less relevant, "management attitudes that were born in the days of sweatshops and typing pools still dominate" the American workplace, according to a June 2011 paper authored by Kate Lister and Tom Harnish of the Telework Research Network.

It estimates that if 50 million potential telecommuters in the U.S. worked from home for half the work week, the savings to their employers, communities and themselves would would total over $900 billion annually. As framed by Lister and Harnish, that represents part of the lost opportunity cost of retaining the pre-digital economy management model.

The authors also call for ubiquitous Internet access. "Without uniform access, telework will not be available to those who need it the most," they state.

Horsepower to improve the business case for aerial fiber deployment

2011-06-29T12:34:00.002-07:00

One of the toughest nuts to crack in the business case for deploying fiber optic cable plant is the cost of labor, which by some estimates accounts for 70 percent of the price tag.

Now an old world method -- horsepower -- is helping aerial fiber deployments pencil out, as this Reuters story out of Vermont illustrates.

"It just saves so much work - it would take probably 15 guys to do what Fred (a Belgian draft horse) and Claude (his human owner) can do," said Paul Clancy, foreman of a line crew from FairPoint. "They can pull 5,000 feet of cable with no sweat."

On a recent June day, the tall, burly man and his muscular workhorse toiled 10 yards off of a desolate dirt road in hilly Hardwick, Vermont. They were assisting a work crew manning trucks and together they lashed cable to existing aerial utility line strung along wooden power poles.

Motorola CEO, FCC agree: Wireline is for premises Internet connectivity, wireless for mobile access

2011-06-18T10:03:00.002-07:00

With telco wireless providers rolling out 4G service, some have raised hopes that it has the bandwidth to rival facilities-based customer premises wireline infrastructure to deliver the full spectrum of Internet service.

Motorola CEO Sanjay Jha dismisses that notion as unrealistic. Wireline will continue to be the optimum method of providing Internet connectivity and high bandwidth video content for “a long time to come,” Jha was quoted as saying this week by The Wall Street Journal.

Jha added that wireless spectrum in the U.S. remains “very limited,” and wireless providers will continue to be the primary supplier of Internet access to consumers outside their home.

Jha's perspective on the respective roles of wireline and wireless is shared by the U.S. Federal Communications Commission. In a May 20, 2011 report to Congress on the availability of advanced telecommunications capability as mandated by the Telecommunications Act of 1996, the Commission rejected arguments by some mobile wireless providers claiming they can provide sufficient bandwidth to substitute for wireline service.

Incumbents’ strategy to lock down underserved, unserved territories could backfire

2011-06-18T09:31:00.003-07:00

Telecommunications infrastructure costs a lot to build and maintain. In that regard, it’s like roads and highways. Roads and highways are typically publicly owned and operated because the upfront cost to plan and build them added to the significant expense of ongoing maintenance can’t attract capital. The return on that major investment takes too long. Investment capital can earn a quicker and more certain profit invested elsewhere.

Under the same rationale, legacy telephone and cable companies build and upgrade their networks to provide today’s advanced telecommunications services utilizing Internet protocol on a limited basis— only where they can generate fast returns for inpatient investor capital.

The result is an incomplete telecom infrastructure. Or to use the transportation metaphor, it’s like having thoroughfares in the central part of town with outliers forced to rely on dirt and gravel roads. Investing additional funds in cable plant and other facilities to provide these services would take too long to cover the cost and begin generating profits on that investment.

But that doesn’t mean legacy providers see those dirt and gravel roads as outside of their transportation system. Since telecom infrastructure is a natural monopoly, investor-owned legacy telcos and cablecos want to keep it locked down as if it were their exclusive franchise.

That underlies the debate over public versus private ownership of telecom infrastructure. Incumbent providers decry public or community owned and operated infrastructure as duplicating their own proprietary networks, constituting unfair competition. Winning that competition from their perspective isn’t about traditional business competition: gaining and retaining market shares. Rather, it’s all about preserving hegemony over their self-declared service (or more accurately, “unservice” territories.)

That’s a zero sum game that produces many losers, condemning millions to an indeterminate future of dirt and gravel roads. According to a recent Federal Communications Commission report, an estimated 26 million Americans are offline and unable to obtain Internet access at a time when the Internet is rapidly replacing the single purpose legacy telephone and cable networks as an all purpose, global telecommunications system capable of simultaneous delivery of voice, data and video services.

Because of its high construction and operating costs, telecom infrastructure is a natural monopoly. However, a deliberate strategy to oppose community-based efforts to build a more complete and sustainable telecom infrastructure to reach those neighborhoods typically served solely by POTS (Plain Old Telephone Service) copper plant and shunned by cable providers could be construed by regulators and the courts as monopolistic and unfair market conduct.

It would be easy to argue citing the recent FCC data on Internet disconnected America that such conduct produces measurable damage and deprives consumers of telecommunications services and choices. For the incumbents, attempting to keep a lock on an unserved or underserved service territory may be more of a liability rather than an asset in the long run.

Attention Netflix: Coordinate your business model with office space

2011-06-02T06:54:00.002-07:00

Netflix is running into local government opposition in Los Gatos, Calif. over its plans to build 550,000 square feet of office space in the town.

Netflix is transitioning its delivery platform away from DVDs delivered to customer's homes via postal mail to delivering movies over the Internet.

Why doesn't it do the same with its office space and use a distributed workforce working out of their homes and otherwise remotely instead of relying on a 1950s pre-Internet business model that requires its staff to work in central office buildings?

“Muni broadband” debate based on false premise of “competition”

2011-06-01T21:04:00.008-07:00

Connected planet has posted an account of a debate between advocates and opponents of telecom infrastructure built by local governments.

I submit this is a debate based on a false premise. Telecommunications infrastructure tends to be a natural monopoly due to its high CAPex barriers to entry as well as substantial operating and maintenance costs.

By definition, there is no true competition in a monopoly. Nor is competition robust in a duopoly of just two owner/operators of telecom infrastructure that exists throughout much of the United States: a telco and a cable company. A healthy, competitive market by contrast has many buyers and sellers. That does not and cannot describe telecom infrastructure, so any debate over “competition” is a nonstarter.

If the position of the incumbent legacy telcos and cable companies is they should have exclusive ownership and control of telecom infrastructure, I strongly disagree. The incumbents are NOT entitled to a monopoly or duopoly by virtue of their incumbency. Particularly when so many homes and small businesses remain disconnected from the Internet in much of their service territories as the U.S. Federal Communications Commission recently reported, noting that an estimated 26 million Americans remain offline.

Local government and community-based providers such as telecom cooperatives must step into the gap and address this market failure with alternative, nonprofit business models that can function to provide Internet access where investor-owned ones cannot.

FCC: "Significant and persistent" Internet infrastructure deployment gap leaves 26 million Americans offline

2011-05-21T16:32:00.004-07:00

The Federal Communications Commission reports this week that a "significant and persistent deployment gap" in Internet telecommunications infrastructure deprives as many as 26 million Americans from Internet access.

"This significant and persistent deployment gap is particularly concerning in light of the substantial and growing costs of digital exclusion: Being unable to subscribe to broadband in 2011 is a much bigger obstacle to healthcare, educational, and employment opportunities that are essential for consumer welfare and America’s economic growth and global competitiveness than it was even a few years ago," the FCC notes in its seventh annual report to Congress on the availability of advanced telecommunications capability as mandated by the Telecommunications Act of 1996.

"We thus must conclude that broadband is not being deployed to all Americans in a reasonable and timely fashion, and we underscore how much work remains before we can conclude that all Americans are served by broadband."

In addition, the FCC rejected arguments by mobile wireless providers that their service constitutes Internet infrastructure that's sufficiently robust at at time when the Internet is becoming an all purpose telecommunications system transporting an exponentially growing amount of voice, data and video traffic.

"While use of mobile broadband is growing, that growth to date is mainly in lower speed ranges that may not be able to support the applications and services identified by Congress, such as high-quality video," the FCC's report states. "MetroPCS and others ask the Commission to reverse its conclusion, given the prevalence of wireless technology," the report continues. "While MetroPCS and others have noted the general expansion of mobile wireless across the country, they failed to demonstrate that wireless broadband is provided at 4 Mbps/1 Mbps actual speed (or reasonable proxy) in the unserved areas."

Most importantly, the FCC identifies the key reason why so many Americans remain disconnected: investor owned providers can't profitably earn a return on their investment -- mostly upfront and ongoing labor costs -- in order to justify building out their networks to serve more premises. "In the absence of programs that provide additional support, the private sector will not bring broadband to Americans living in areas where there is no business case for operating a broadband network," the report states.

Short of labor costs declining dramatically, that will continue to be the case. And unless communities explore alternative nonprofit business models such as municipal and cooperatively-owned open access fiber to the premises infrastructure, the FCC will continue to report on a "significant and persistent" infrastructure gap next year and subsequent years.

Battling over accuracy of broadband maps plays into hands of legacy providers

2011-05-13T21:11:00.002-07:00

Readers of this blog know that I've long regarded so-called "broadband mapping" as well as as focusing on "broadband adoption" as strategies cooked up by the PR shops of the big legacy telco and cable companies to divert attention away from the lack of advanced telecom infrastructure. As long as people are battling over the accuracy of "broadband maps," they aren't taking matters into their own hands and money isn't being invested to construct fiber to the premises telecom infrastructure to fill in the availability gaps the mappers are attempting to document.

The Associated Press reports Vermont Gov. Peter Shumlin is steamed that existing "broadband maps" -- probably including the useless National Broadband Map paid for by our federal tax dollars -- show his home near Putney, Vermont has DSL service. Not true, the guv says. So he's countered with his own state-run mapping program, BroadbandVT.org

Instead of trying to see who can most accurately map broadband black holes -- an exercise about as useful as mapping the celestial variety -- Vermonters should call upon their independent New England spirit and create cooperatives to build fiber to their homes and businesses. That spirit is apparently alive and well in western Massachusetts, where the Wired West announced this week that several towns voted in favor of moving forward to formalize creation of a municipal telecommunications cooperative to build sorely needed fiber to the premises telecom infrastructure.

Despite growth of Internet telecommunications, majority of employers don't allow telework

2011-05-11T17:43:00.000-07:00

We may be living in the era of Internet telecommunications where most any generation, analysis and manipulation of words and numbers can be done from most anywhere having adequate telecom infrastructure.

But for most American businesses, that fact hasn't yet fully registered. Most still believe this type of work can only be done in office buildings and cubicles, which in turn reinforces that time sucking activity known as commuting. At a time when people are strapped for time and want to reduce their carbon footprints. And exercise more and perhaps lower their employers' soaring health care costs in the process.

The results of a random telephone survey of nearly 10,000 businesses in a dozen states last year found only 23 percent allow telework. The results are reported in a white paper issued today by Connected Nation, Leveraging Technology to Stimulate Economic Growth.