Infrastructure

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.

PCWorld has a nice summary of fiber to the home projects, mostly from the telephone and cable company perspective.

Some of the key ideas in the article:

In a widely carried AP report, AT&T has announced it is getting out of local dial tone and long distance in several states, and may abandon most other states shortly. There are two things going on here, and only one of them was discussed in the article.

The article correctly notes that the proximate cause for the AT&T pullback is the FCC ruling that allows the local phone companies to charge higher wholesale rates for their antique copper telephone lines. AT&T has been leasing these in bulk to provide local dialtone. The higher rates make it unprofitable for AT&T to do so.

On the face of it, this looks bad for local communities, as there seems to be less competition, and puts the local phone companies back near their previous monopoly status for dialtone.

What was not covered well in the AP article is the fact that AT&T is making a major push for Voice over IP local and long distance services. The company has wisely decided to abandon the antique phone service market and concentrate on selling what is going to count in the future. It's a smart move.

Some of the phone companies are not standing still, however. SBC has announced it will spend billions on fiber to the neighborhood and fiber to the premises, although the latter will be done only in new neighborhoods for now. The new system will have the capacity for a single channel of HD TV--much higher capacity than existing DSL lines, but still not what will be needed in the future. But the fiber has the carrying capacity--SBC is reluctant to put in the electronics, probably because of cost and because they are trying to control access.

Communities getting these new systems may breathe a sigh of relief that they don't need to do that telecom planning after all, but their headaches are simply being deferred to the future. A monopoly is a monopoly, and it does not matter much if it is a legal monopoly (the old, pre-1996 approach) or a de facto marketplace monopoly.

Nintendo's new DS handheld will include WiFi. The successor to the wildly successful GameBoy will allow DS owners to play games with other nearby DS users and/or access the Internet via a WiFi hotspot.

That may sound ho-hum, but kids with WiFi devices will change the way we think about WiFi. Kids will want it at the candy store, at the gas station (download some new games while Dad is gassing up), at parks and recreation centers--in short, everywhere.

Cometa, a startup national WiFi hotspot firm, has shut down. Cometa was bankrolled by Intel, AT&T, and IBM, and planned to create 20,000 hotspots nationwide and wholesale them to other companies who would actually provide the end user service.

It was a good plan, but apparently poorly executed. No doubt the company was stuffed with execs from Intel, AT&T, and IBM, who apparently acted arrogantly and spent too much money too soon.

The problem with all of the firms planning national networks is twofold. First, WiFi will not take off, really take off, until there are widespread roaming agreements in place. Right now, if I'm at O'Hare in Chicago and want to check my mail via WiFi, I probably have to spend $10 for 15 minutes of access. Two hours later, in Omaha, some other company will want $10 for another 15 minutes. Even dumber, T-Mobile thinks I'll happily pay yet another $10 two days later as I pass back through o'Hare.

That's the state of WiFi right now. National roaming agreements, just the way cellphones can roam, where you pay a fixed monthly subscription, is the only thing that makes sense. Why are so many firms in the market despite the lack of roaming? Because WiFi is in a growth phase; for every customer who stops paying T-Mobile $10/day, two new ones pop up. It's exactly like the early days of dial-up modem access. But it won't last. Cometa is the first of many firms that will go out of business after wasting a lot of investor funds.

But I said there were two problems. The second is local, rather than national. Communities need ubiquitous WiFi to make it really useful, and just putting hotspots in hotels and McDonald's is not enough. Rural communities are especially unlikely to get much attention from the big national firms. The sensible approach is for communities to get involved in identifying appropriate antenna locations, mapping out a hotspot grid so that everyone in the community can get service, and in that fashion creating the incentives that will attract local and regional wireless providers to come into the market and sell services.