Broadband

In what has to be a sign of desperation, SBC has dropped the price of its entry level DSL service to $14.95 a month. Claiming that the online registration "lowers costs," the telco is also giving customers a $99 credit towards home networking gear like wireless access points.

The Seattle Post-Intelligencer has an article on a report issued by a City of Seattle task force that concluded that the city has to take broadband seriously, and must begin immediately.

This is a must read article that makes many good points. Rather than rehash them, here are some of them verbatim:

If your community is looking at Broadband Over Powerlines (BPL) as a cheap way to get broadband out to neighborhoods or rural areas, you should read this article over at NewsForge, which says BPL still has some issues that have to be worked out.

Among the problems this article raises are relatively high costs, the need to deploy a fiber backbone to support neighborhood level BPL, and radio interference in frequencies used by public safety (fire, police, rescue).

New Zealand, which is a country smaller than most U.S. states, is investing heavily in broadband, with a budget in the tens of millions of dollars. While too many state legislators (14 states at last count) are trying to limit broadband, we've got countries that are going in the opposite direction.

This report [link no longer available] from a Utah resident highlights two of the best-known fiber projects in the country: iProvo and UTOPIA (hat tip to Dave Fletcher's weblog). The iProvo muni fiber is 100 times faster than cable modem and 250 times faster than DSL. In other words, it is world class service, of the kind that is common in lots of other countries.

A muni fiber system in Utah's Salt Lake Valley installed to manage traffic throughout the region had an installed cost of $51 million and an expected ANNUAL payback of $179 million in savings.

The Advanced Traffic Management System (ATMS) uses the fiber to manage more than 50 major traffic corridors, coordinate signal changes on more than 600 traffic lights, provide traffic monitoring via video cameras, and hook up truck scales.

Yesterday's Wall Street Journal (print edition, p. B8) had an article by Brian Steinberg about broadband and its effect on people's habits. According to Steinberg, broadband connections are now used by 48% of Internet users, the same number of people on dialup. This is a big jump from last fall, when data was suggesting that about 35% of Internet users were on broadband (the other 4% are probably using non-standard connections like satellite, cellphones, etc.).

As broadband use increases, traditional analog television is the big loser. Here's an interesting quote from Jeffery Godsick, the executive VP of 20th Century Fox:

"...TV is not their [the broadband users] primary way of finding out about movies or anything."

In a move that must frighten the pants off TV execs, movie studios are planning to release full screen movie trailers over the Internet. Now, you might ask what the big deal is; movie trailers have been available on the Internet for years. But these have been smaller files that play in small to medium size windows on your monitor. What's new is that these upcoming movie trailers are going to be close to DVD quality--massive files that are ready for viewing on big screen and HD monitors.

It's a test of the network, and of viewers--the movie studios, using the trailers, can study the distribution and performance costs of making these big files available, and they can see how many people make the effort to download them. The next step will be to make movies available for download, streaming, and/or sale.

The movie industry is slowing adapting to the new all digital, all IP converged model of entertainment. Apple has shown that you can make money with legal file downloads, and Apple has also shown that most people, when presented with a reasonable DRM (Digital Rights Management) system and fair prices, will download legally.

Within the next twelve months, we are going to see a breakout IP "TV" show become available only on the Internet.

CNet has an article that provides a good summary of some of the current issues surrounding community-financed broadband. On one side, you have the cable companies and telcos, determined to prevent communities from controlling their own destiny. On the other side, you have communities getting limited or no access to broadband services, with those towns and cities at a serious disadvantage in the global economy as 15 other countries have better broadband than the United States.

I'm a big fan of microduct and blown fiber, and Emtelle is one of the world leaders in the technology. I think it is an ideal solution for community and neighborhood fiber projects, as it works with both passive and active optical network equipment, it's easy to install, and easy to repair--essential qualities for community-managed systems. But it's always been hard to explain without actually seeing it. This movie on the Emtelle site is short and illustrates how it works end to end (you need a Flash player plug-in for your browser).

New York City has announced an ambitious plan to boost fiber capacity in the city and to make all public facilities "wireless friendly."

Ray Buzzard, of Dalton Utilities, spoke about the Dalton, Georgia community broadband project. Dalton's community fiber project, only about two years old, has already had very positive economic development effects by keeping hundreds of manufacturing jobs in the community. The high performance, low cost network persuaded some local manufacturers to stay in the community rather than moving elsewhere.

Local government was a key anchor tenant by making an early commitment to use the system.

The Monday afternoon keynote was by Keith Wilson, the CEO of Dynamic City, which has the contract to design, build, and operate the Utah UTOPIA project (an 18 community fiber project serving 300,000 homes).

The U.S. has the most expensive broadband in the world; the per megabit cost of broadband in Japan is ninety cents. In Korea, it's $2.50. In the U.S., it averages $25-$30 per megabit, or thirty times higher than the lowest. Clearly, the current reliance on incumbents to provide broadband is not working.

Wilson identified four characteristics of a viable communitywide network:

• Open and interoperable
• Wholesale access available to multiple service providers
• High quality carrier class equivalent to commercial networks
• Highly scalable bandwidth to meet any kind of service need

A wholesale business model that allows for many service providers (as opposed to just one voice provider, one video on demand provider, etc.) reduces the risk for the network owner--if a service vendor fails or pulls out, the financial health of the network is less at risk.

Networks are like airports--a shared facility built by the community and used by multiple service providers (airlines) to offer a variety of services. Airports are good for communities because no airline would come to a community and build their own airport.

Communities need a "communications utility," and no less than the future of the community is at stake. A successful network must have widespread availability, must be affordable, and must offer customers choice. A closed network cannot offer all three, because the incumbent providers don't want competition. Private buildouts (the current situation with incumbents) capture the future of a community because no other provider will come, so the community becomes hostage to a single company.

If regulated monopolies have not worked in the past in terms of affordability and choice, why do we think unregulated monopolies (what we have now, in effect) will work better? What is best for a single company is not necessarily best for the businesses and residents of a community.

Scott Wilkinson, a VP for Hitachi Telecom, gave a talk about broadband in Japan. The typical broadband fiber connection in Japan is 100 megabits/second, and typically costs about $58/month; costs have dropped 66% in the past four years. Most broadband connections in Japan are data only, so the "triple play" is not a big consideration. The connections support video on demand, which is very popular, but there is no broadcast television content. The connections work very well for video on demand, with near real time viewing (i.e. no long wait to download before viewing).

Fiber To The Home (FTTH) is growing rapidly in Japan, and the big loser is cable modem service. The electric companies in Japan are NOT offering Broadband over Powerline (BPL), but instead are selling fiber service, which should be a clue to communities that think BPL is the way to go.

ADSL is seen as a problem in Japan, even though it has a high subscriber base. ADSL and VDSL are both available and offer much higher data rates than typical DSL services in the U.S., but the distance senstivity is a big issue, as subscribers just a few blocks away from each other can end up with very different levels of service.

The typical range of applications in Japan are very similar to the applications and services in the U.S., but the Japanese service providers have found that when people are given more bandwidth, they use it, which refutes the telco argument that no one has a need for high bandwidth connections. One of the trends is more work from home and from remote locations; the high bandwidth supports high quality videoconferencing and actually often provides a better level of service than is available in some business offices. So affordable broadband has become an engine for new kinds of work opportunities.

Services in Japan are driving demand, not connections. As more services ae available, more people sign up for high speed connections. The installation fee for fiber averages $150, so that can be a source of funding to help pay for community fiber builds. Fiber systems in Japan are profitable, with fees distributed this way:

PacketFront is a vendor of network equipment designed specifically for community broadband projects. Matt Wenger, an expert in communitywide broadband and senior analyst for the company, gave the talk.

Wenger strongly advocated a services orientation for community broadband projects. His thesis throughout the talk was the current connection-based model used by the telcos and the cable companies discourages innovation and use of broadband.

Berge Ayvasian, a VP at the Yankee Group, a technology forecasting group, gave the morning keynote. Ayvasian had some interesting data: the Yankee Group projects that the number of households served by broadband will double over the next three years, from about 30 million to 60 million. Households served by community broadband projects are expected to grow by more than 600%, much faster than DSL growth (100%) or cable modem (75%). Cable is growing slowest because cable companies already have much of the market locked. up.

I'll be blogging at the Digital Cities conference for the next couple of days (Monday and Tuesday). The meeting is being held in Reston, Virginia, near D.C., and promises to be a lively meeting. Stay tuned.

Here is an excellent article [link no longer available] on how the telcos are strangling communities and denying them the economic development benefits that come from affordable broadband.

The Free Press has released three useful reports on broadband that ought to be required reading for any citizen's group trying to convince public officials and economic developers that something needs to be done.

For a sobering look at the future, this article on South Korea is a wake-up for anyone who thinks the United States is technology savvy.

Central California is the location of yet another pointless fight over broadband. Forward-thinking public officials are trying to do something good for their businesses and citizens, and a predictable set of knee-jerk reactions to it pop up.

Fresno County wants to look at increasing the number of broadband access and service providers by building infrastructure and letting private sector companies use it to deliver those services. But the predictable hysteria about how government should not be in the service business has ensued. Last time I checked, the *only* thing governments do is provide services, so I'm not sure that's a very strong argument.

As Lawrence Lessig noted recently, public street lights did not put electric companies out of business. And I will further note that building public roads did not put construction companies and delivery services out of business.

Fresno wants to build broadband roads so that private sector companies can use those roads to deliver access and services. Now there are two ways to pursue that model. Fresno is going to buy access and services from the private sector and resell them to broadband customers. Customers like this because you get a single bill with everything on it, and you have a single point of contact for service and support.

The other way to do it is to let companies sell direct to customers. In this model, you may have several bills (e.g. one for access, one for VoIP, one for email services, etc.). And you have several different companies to deal with in terms of service and support.

Both approaches have some advantages and disadvantages--the former model looks better from a customer perspective for billing and support. The nonprofit network operator makes more money to cover expenses and to build out the network. But it's a more complex way of doing business, since the nonprofit operator has to be the middleman for everything.