Broadband

Michael Copps, an FCC commissioner and consumer advocate, had an op-ed piece in the Washington Post last week. Copps says American broadband is too slow and too costly, and that it is going to cripple our economy and our ability to compete in the global economy. I could not agree more.

If there was one thing everyone was talking about at the annual Rural Telecommunications Congress conference, it was open service provider networks. My talk discussed why they work financially (demand aggregation, across a whole community or an entire region, really pays dividends--literally). But vendors were also talking OSPN systems, and it is great to see systems coming into the marketplace that have been designed specifically for communitywide broadband use.

There are some basic priniciples that define a true open access system:

As Design Nine does more and more financial analysis of the benefits of Open Service Provider Networks (OSPN) for our clients, the news continues to be very good. In an OSPN network, the local government does not sell any services. Instead, local government builds a digital road system that any service provider can use. In return for access to the road system, service providers pay a portion of their revenue back to the network owner. This revenue pays for both the initial build out and ongoing maintenance, support, and operations.

Here are some of the things we are finding:

AlGore's Current TV, a cable channel with limited distribution, has announced a partnership with Yahoo to create four new broadband channels.

A San Diego start up company has announced plans to sell broadband delivered by gas pipelines.

The gold of the Knowledge Economy is dark fiber. Those that have it have something of great value. Those that don't are in trouble. It is really a currency of sorts, but much better than gold. Gold's value fluctuates up and down, but fiber's value will continue to go up indefinitely. How? As the network electronics that light dark fiber improve, you can expect to be able to continually increase the capacity of dark fiber strands, creating value each time.

Here is a very short article about the falling price of DSL service in the U.S. Usually, when prices fall, it is a possible indicator that people are not buying enough of whatever is for sale, or that they supplier has "too much" of something. In the case of DSL, both is probably true. The phone companies have been investing heavily in upgrading their local phone systems to handle DSL, but with limited success, apparently, or they would not be cutting prices.

The City of Boston has decided to develop an open access wireless network for the city. This project might actually succeed where many other communitywide wireless projects have struggled. Boston has decided to do some things differently.

Prepare to be depressed. French Telecom has just announced that it is rolling out fiber service in major cities with download speeds of 2.5 Gigabits/second and upload speeds of 1.2 Gigabits/second. The cost? Seventy Euros, or about $85 US.

Meanwhile, in the U.S., the heads of the major telecoms are patting us on the head and telling us we don't need superhighways to our homes, that DSL sidwalks are just fine. A typical DSL connection in the U.S. is about two thousand times slower than the Gigabit service being rolled out in France.

As Design Nine works with more and more communities on broadband development, I have become convinced that the only financial model that is going to work over the long term is the Open Service Provider Network (OSPN). What this means is that the network is designed, constructed, and managed specifically to allow and support a marketplace of service providers that compete for subscribers.

This article reports on a financial study that suggests community broadband projects could cut telecom and cable TV costs in a community by up to 48% because of increased competition. This is a pretty compelling reason for a community to invest in broadband--everyone saves money. The article also indicates that telcos and cable companies could benefit from community broadband because they could reach more customers more quickly.

While at the Digital Cities conference in Reston, Virginia earlier this week, I was able to get some detailed information about Vasteras, Sweden, where they have implemented the kind of open service provider communitywide broadband I advocate for communities in this country. Vasteras is a medium-sized city of about 80,000 people. In past eighteen months, they have run fiber to 7000 homes, 23,000 apartments, and 2000 businesses.

There was an article in the Roanoke Times this morning about a local businessman who sold his private water utility company to the city of Roanoke--in 1949. So as recently as fifty-five years ago, we had local leaders taking on privately owned utility services.

South Korea continues to be far more visionary than the United States when thinking about broadband and how it should be used. The city of Seoul, South Korea's largest city, has committed $830 million to the u-Seoul project. The 'u' stands for 'ubiquitious.'

Back in 2000, I began promoting the idea that one way communities should finance broadband was by selling shares in a stock ownership corporation. In this way, the entire community could participate in the ownership of a Knowledge Economy business. A stock ownership approach to community broadband has several advantages.

The Christian Science Monitor has an article about the emerging two tier Internet. It is a good overview of the political and technical issues that are driving this problem. The big broadband access companies (e.g. the phone and cable firms) are determined to wrestle control of their customers away from the open Internet.

The broadband access providers (aka the telephone and cable companies) are shocked, just shocked, that their customers are actually using broadband.

Their response?

According to this article in The Register, the big companies are already installing software that slows down much of what people want to do, to the point of making them give up and/or buying the service from the access provider.

The number of rural people using broadband more than doubled between 2003 and 2005, but that is still just a little more than half the number of urban broadband users. A new Pew Foundation study says availability seems to the primary factor--no surprise to anyone that lives in a rural area of the U.S.

Here is yet another marketing study that thinks broadband take rates (how many people sign up for broadband service) are affected primarily by price of the service. The study, done by The Yankee Group, shows just how wrongheaded both the analysts and their customers (mostly telcos and cable companies) are.

Add AT&T to the growing list of broadband access providers who are making noises about charging for access to their broadband networks (and customers).