Technology Futures

Bob Rowe, from the Montana Public Service Commission, is the first speaker in this session.

Rowe says that states have a role in assisting regional deployment of infrastructure and to coordinate facilities permitting.

Local governments have much potential, and can do training, form buying pools, encourage local government investments in infrastructure, and promote egovernment.

The FCC Section 706 Report from September, 2004 notes that the FCC defines broadband as 200 kilobits/second or faster, that the US still lags the rest of the world in broadband deployment, and that the FCC has a mission to encourage "reasonable and timely deployment."

Bill Gillis, from the Center to Bridge the Digital Divide, is the next speaker. Gillis says that we can learn from "innovation businesses."

He says that an innovation business is knowledge intensive, makes extensive use of technology, is creative and flexible with respect o workforce functions, has a global business perspective, and has entrepreneurial management.

Gillis says that states can facilitate exchange of ideas, help the last 30% of residents that do not have broadband service, can help prepare the workforce for the innovation economy, and provide flexible gap capital. Innovation businesses are driving demand for broadband in rural areas.

The final speaker is Al Hammond, from the Santa Clara School of Law and the Alliance for Public Technology.

Hammond says that large parts of rural America lack adequate broadband services, with smaller towns at a real disavantage--only 5% of towns of 10,000 population or less have broadband.

BPL (Broadband over Power Lines) is getting a lot of interest. There are more electric lines to homes and businesses than phone lines, so BPL potentially can be widely deployed. At least 5 companies are manufacturing BPL equipment.

25 million homes have no cable modem or DSL service, and satellite broadband is becoming more affordable, with Wild Blue, a new statellite company, will be offering Internet access for about $50/month. TV programming will also be available, unlike some other satellite broadband systems.

BPL issues include whether or not public utilities are cross-subsidizing BPL (and/or should be allowed to), universal service, open access issues (open vs. closed network), right of way issues, and whether a BPL provider is a utility, a telecomm provider, or a broadband provider.

Dave Nelson is the first speaker, from Chelan County, WA. The PUDs in the state can provide wholesale broadband (not retail). Chelan decided to do a PON (Passive Optical Network) pilot project.

The project turned out well--high take rate, costs were close to estimates, and technology worked well. This led to a broader build out.

Take rates for the optical service is between 25% and 50%. By 2003 fiber had been placed by more than 3000 homes, and dial tone services were added to the network. In 2004, an additional 5000 drops are being added. Cable TV services are being studied--primarily a policy and administrative issue, not a technology issue.

By 2008, goal is to have 75% of county with fiber, or about 30,000 homes and businesses. This is an open access network with 12 ISPs offering access on the network. One provider offers fully E911 compliant telephone service. Television should be available in 2004; content and franchise issues have made this more difficult. Alcatel's B-PON system is being used.

The cable companies have been offered access to deliver programming, but so far, they have not been interested. Service providers pay the PUD for each port (Ethernet, phone line, etc) for which they deliver a service. PUD operates on a nonprofit basis. DSL and cable modem service is available in most areas of the county.

Take rates are ahead of projections. The PUD maintains the right of way and fiber distribution. The biggest problem is not being able to build out fast enough--"a million phone calls a day" about when fiber is getting past someone's house. The PUD had to design a real time Web site that shows construction progress on a daily basis to help ease the phone calls.

Wireless has been provided in some areas where it was going to be some time before fiber arrived. Customers have actually cried (true) when the fiber arrived, they were so happy. The PUD has a good relationship with the service providers (12!).

BPL pilot is also underway; there are some distance/repeater issues. Visit http://www.chelanpud.org/fiber/ for more information.

I am at the Roanoke Airport, on the way to the Rural Telecommunications Congress Annual Conference in Spokane. I have a Delta flight to Cinncinati, then switch to Northwest for the rest of the trip.

Delta can't give me a boarding pass at the check-in counter. I have to go upstairs to the gate. Huh? If they can assign seats at the gate, why can't they do it at the ticket counter? Apparently the Delta electrons, used in their IT system, are tired on Sunday morning and can't make it from the counter to the gate. This is beyond comprehension. It's all one system--if they can assign seats upstairs, they should certainly be able to do it downstairs. It creates twice as much work for Delta.

I then walk over to the Northwest ticket counter and try to check in for my other two flights. They can only give me seats, but cannot check me in. They have no explanation other than "the system won't do that." Huh? If you can assign a seat, why not just print out the bloody boarding pass? Another utter and complete IT failure.

This is particularly irritating because it means I have to start my trip without being checked in. If my Delta flight arrives late in Cinncinati, I could lose my Northwest seats. Nice treatment of customers by Northwest.

The papers have been full of stories this week about the suspension of eRate payments to schools and libraries. The FCC suspended the program because of chronic abuses by some recipients of the payments. That aside, let me point out some structural shortcomings of the effort.

• Any time some companies have to become the tax collector for the Federal government and others don't, you've created a structural and competitive inequity. Erate does exactly that.
• Erate really keeps phone bills higher than they would be otherwise, and essentially increases costs for everyone. It would be interesting to do an analysis of what a typical community pays into eRate and actually gets back in eRate payments. What if it turns out most communities pay more in than they get back? Now, one can make an argument that needy communities get more help than they would otherwise. But see my next point.
• Erate payments disaggregate the ability of the community to pool their broadband demand and negotiate lower prices. Erate takes broadband anchor tenants out of the buying pool, thereby forcing other nonprofits and businesses in the community to pay more than they would otherwise. Again, what we need are some studies that look at how much broadband is being purchased by a community in total and the potential cost savings that could be gained by communitywide broadband aggregation (note: this is an activity that should be part of a technology master plan).
• The higher cost of broadband due to disaggregation puts businesses in the community at an economic disadvantage, and affects local tax payments and the ability of those companies to grow and expand job opportunities.
• Erate delays the inevitable, which is what do the eRate institutions do when eRate goes away? Erate will go away because it is a tax on legacy phone service. Legacy phone service is dead, dead, dead. I can have a voice conversation today without using ANY kind of phone company--I don't even need a VoIP service if my calling party has compatible software.

Erate has no future, and schools and libraries are naive in not making plans to move on. A better strategy for schools and libraries would be sit down with all the broadband users in the community and pool their buying power, make some modest community investments in infrastructure, and take control of the economic future of the community, rather than hoping the "free" money continues (and it won't). Erate was a great success--it helped get schools and libraries online. But it is structurally doomed--this has nothing to do with political philosophies or which party you belong to. It just won't work going forward.