Broadband

I'm back from the Rural Telecommunications Congress Annual Conference in Spokane. It's the oldest and one of the only conferences focused on rural issues related to telecommunications and broadband.

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.

The second speaker is James Baker, from central Pennsylvania, with the Council of Governments--an 11 county area with 300 local government entities of one kind or another. Most communities are under 2500 population, and many are under 1000. Generally a very low density area--20-40 households per square mile as an average.

Broadband services are expanding in the area. However, 98% of Pennsylvania urban areas have some form of broadband, but only 25% of rural areas have some kind of service. Providers view rural areas as not good markets.

The state of Pennsylvania has funded a GIS system that provides service maps for various kinds of services available (i.e. DSL, cable modem, etc). Good tool, but data quality varies, some limitations in granularity of data.

Wireless services were considered for expansion in one county by swapping tower space on an EMS tower with space on a commercially-owned tower in another part of the county. EMS would get better radio coverage, and residents and businesses would get more access and choice in broadband.

Murphy's Law kicked in...the six inch square antenna which was to be put on the county tower would require a $5000 engineering study to make sure it would not add significant wind loading to the 200' tower. No one would pay for the study, so the project got slowed down while a variety of funding sources were pursued. The ARC came to the rescue, but the $5000 grant application required almost the same amount of paperwork as a $150,000 grant.

After the engineering studies were done, it was discovered that the county did have legal control of the tower, and that has required additional effort. Testing by the service provider has shown that nearly the entire anticipated service area will be covered.

In the meantime, the government fiber project is using wireless to expand coverage beyond the ends of the fiber. Some nonprofits are getting service.

Issues include legal problems--one person, the county lawyer, has the power to stop these projects dead in their tracks. If the cable company expands service, the wireless provider may feel it is not worth it to continue expansion--it becomes very important for government to be able to move quickly to help private businesses.

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.

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.

In the Telecomm Cities mailing list, Barry Drogin wrote:

The ugly thing here is that in the short term, these [WiFi] deployments will work,
just like shared-media Ethernet networks worked well in the 1980's. But at
some point, user density gets so high that the protocols break down. They
spend more time recovering from errors than they do transmitting good data.
For Ethernet, switches saved the day. But for wireless, that won't work.

According to an article in USA Today, more than 800 communities in the United States are building their own networks. There is some fascinating stuff in this article, which highlights a high speed fiber network and MSAP (Multimedia Services Access Point) in Danville, Virginia.

Three communities around the country (Palo Alto, CA; Lafayette, LA; and the TriCities area of Illinois) have formed a "Sisters in Arms" network. Each community is interested in getting affordable, widely available broadband to their citizens and businesses, and the loosely formed coalition is trading information on the process, how to move forward, and how to deal with pushback from the incumbents.

MuniWireless has a story about Scottsburg, Kentucky and the importance of broadband to the future of the community.

Scottsburg is a rural community of 6000 north of Louisville. The problem they were facing there is common to rural communities: a T1 line in metro Louisville cost $300/month, and in rural Scottsburg it was $1300/month--that's the difference between a thriving business sector and and an economic disaster.

There is a good news/bad news quality to a set of FCC press releases that went out late last week. The good news is that broadband availability in the U.S. is up significantly. The FCC says the number of broadband lines has tripled from 2001 to 2003. Cable modems have about 75% of the marketplace, with DSL far behind with 15%. All other technologies (e.g. fiber, wireless, satellite) composed 10% of the marketplace.

Over the past couple of weeks, three major cities in the U.S. have announced ambitious plans to extend connectivity of one kind or another. New York and Philadelphia are moving forward with plans to create wireless blankets over most of each city.

New York's plan is more ambitious. The city is looking at making virtually every lamppost available for WiFi and cellular telephone access. Part of what is driving this is money. Even at the modest fees the city says it will charge for the right to mount antennas, it represents new income to the municipal government. What is less clear is if the plan will succeed. Some elected officials and citizen groups have raised concerns about the amount of additional EMF radiation that will be propogated by the plan. Not everyone is keen to have 24 hour/day gigahertz frequency radiation emanating from an antenna just a few feet from their second floor apartment window.

Philadelphia's plan is to create a WiFi blanket throughout the core area of the city, to make the place tech friendly. Both cities will rely on the private sector to spend the money to do the work, and will simply put the ordinances and fee structure in place that will allow those companies to place antennas and equipment on public property.

The third city, Chicago, is planning to put 2000 remote control surveillance cameras throughout its neighborhoods and city streets, with the dual aim of curbing crime and providing better coverage of potential terrorist targets. The system will be tied directly into the 911 system, which will allow 911 operators to pull up real time video of a crime, fire, or accident in progress. In Chicago, some groups have raised concerns about the potential privacy issues related to such comprehensive surveillance. In the end, the city will probably have its way, as we have no constitutional guarantee to privacy in public places.

All these initiatives are mixed news for smaller and rural communities. On the one hand, these initiatives not only raise the bar for what kind of infrastructure is expected in our communities (i.e. WiFi blankets), but as this kind of infrastructure becomes commonplace, smaller communities especially lose any competitive advantage they may have had from early investments. That is to say, instead of touting public WiFi as an economic development advantage that other places do not have, public WiFi is now going to be increasingly seen as part of the base, required infrastructure--imagine trying to promote your community without a public sewer system in place.

If you have been thinking about attending the Rural Telecommunications Congress 8th Annual Conference, Friday is the last day to save $100 on early bird registration. If you are a vendor, it is a great place to meet the representatives of community and regional broadband projects from around the country. If your community is interested in broadband, it's a great place to hear about what has worked and worked well.

For the past eight years, RuralTeleCon – the annual conference of the Rural Telecommunications Congress – has been the premier venue for understanding the issues surrounding the deployment and use of advanced telecommunications in rural communities. Each year, the event focuses on a critical issue facing rural communities and rural residents as they use telecommunications for community and economic development. This year’s theme is “Putting Broadband to Work.”

KEYNOTE SPEAKERS

• Anthony (Tony) G. Wilhelm, PhD., Director, Technology Opportunities Program (TOPs), National Telecommunications and Information Administration, U.S. Dept of Commerce - Find out the latest on NTIA TOPs programs and initiatives.
• Hilda Gay Legg, Administrator, Rural Utilities Service (RUS), U.S. Department of Agriculture - Hear RUS success stories demonstrating broadband applications as rural solutions.
• K. Dane Snowden, Chief, Consumer and Governmental Affairs Bureau, Federal Communications Commission (FCC) - The current status of broadband deployment in rural communities.
• Andrew M. Cohill, President and CEO, Design Nine/Virginia – Discover why community investments in technology and telecommunications often fail to have the hoped-for impact, and how you can integrate technology with other community and economic development goals and objectives.

• Dane A. Deutsch, President and CEO, and Pete Adams, COO, DCS Netlink – Meet “Bobby Blackhat” and learn why we need to take Internet security seriously today and tomorrow.

• Plus more Speakers and Panels including experts on telehealth, e-commerce, entrepreneurship, education, e-government, deploying and maximizing the broadband infrastructure, and economic and community development, all focusing on rural issues.

For more info and to register visit www.ruraltelecon.org.

A new report from Taiwan shows that the country is far ahead of the United States in broadband use, with more than 56% of the population using high speed services, or about double U.S. use. That makes Taiwan the fourth biggest per capita user of broadband in the world, behind South Korea, Hong Kong, and Canada.

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:

Early bird registration for the 8th Annual Rural Telecommunications Congress Annual Conference is still available through September 10th.

If you live in a rural community and are interested in economic development and broadband issues, this is one of the best conferences going. The RTC conference works hard to keep the sesssions focused on best practice, lessons learned, funding opportunities, and solid, practical information.

FCC Chairman Michael Powell is on the side of businesses and consumers when he declared:

“This is about ensuring that high-speed Internet connections aren’t treated like what they’re not: telephones. A successful appeal of this case would ultimately mean lower prices and better service for American consumers. Applying taxes, regulations and concepts from a century ago to today’s cutting-edge services will only stifle innovation and competition.”

USA Today wrote an article about a month ago that I just stumbled across that's worth a read if you live in a rural area. The article details some of the new breed of rural wireless ISPs (WISPs) that are changing the way broadband is delivered in rural communities.

I am constantly surprised at the number of people who believe rural farmers don't want or don't need broadband. It's a myth, pure and simple. An ag agent told me over a year ago that half the cattle in Virginia are sold over the Internet. I met a farmer in southern Illinois last year that had built his own WiFi network to connect up weather and moisture sensors on his three farms. As we sat in his 150 year old farmhouse, he pulled up real time weather information from his sensors; he checks moisture levels every day without having to waste time riding around--he is using technology on a family farm to be more efficient and increase production.

The USA Today articles chronicles the work of big and small wireless firms, with an emphasis on the small outfits. One used an old farm silo to mount the antennas that supplies broadband to his customers. Another got into the wireless business to sell off expensive excess bandwidth he needed to run his own business.

As you read this article, one thing you notice is that these are not typical Manufacturing Economy businesses. They are not building manufacturing plants and office buildings. They are not renting space in business or industrial parks. They are not even renting space in the local business incubator. Many are home-based.

Does your economic development strategy include: a) Identifying these businesses (clue: they aren't relocating to your area and are not in your business park), and b) Providing capital, business planning and management, and marketing assistance?

These are "classic" Knowledge Economy businesses; they don't fit any of the old business stereotypes.

Telstra, the Australian phone company, is putting WiFi hotspots in phone booths.

It's a good idea. The phone booths are underused, with so many cellphones now in use. The booths are already in public places where people tend to gather, and they have the one thing that often makes placing a hotspot costly--a wired connection. Telstra can use the existing cable to deliver a DSL line to the WiFi equipment in the booth, and the booth itself can be used to mount an antenna.

USA Today (Monday) has a front page article (Business section) on AT&T and its decision to get out of the consumer market for local and long distance services. Opinions are mixed on the wisdom of this approach, but the company does not really have much choice. With the FCC decision to allow the regional Bells to charge whatever they like for wholesale access to their infrastructure, AT&T could no longer profitably offer local dial tone service.

As I've said before, I think that the FCC made the right decision. If the Bells are expected to compete with unregulated companies (e.g. the cable and WiFI firms), it does not make sense to hobble them by requiring them to sell their own network to competitors below market rates. It is no coincidence that since that ruling a few months ago that the regional Bells have begun to announce FTTP (Fiber To The Premises) projects--they finally know they can make money doing so.

Buried in the article is a one line reference to the "Cable-Phone Wars." One reason the phone companies have finally jumped on the fiber bandwagon is that the cable companies have captured a large part of the broadband customer base by investing early. DSL is now selling in most of the country for about $15 less than cable service because the phone companies have to do something to get customers back--like actually compete on price and service. Horror stories abound, but generally, the cable companies, which tend to have more local offices and real service people working for them, seem to be winning the service battle.

The phone companies, in a better late than never strategy, are winning the price war right now. This is all good for consumers, up to a point. Quality of Service (QoS) is still shaky for both cable and DSL. Both are copper-based legacy systems that were never designed to deliver high speed data to homes and small businesses. Fiber and wireless can deliver data much better, but can't always provide the content (e.g. cable TV) and/or some services (like dialtone)--yet.

Information Week has an interesting article about SBC and Verizon. The two big phone companies are selling off their rural landlines to raise cash to run fiber to their higher density urban and suburban customers.

So instead of complaining about your local phone company, buy them out! The neat thing here is that if you buy out the lines, the customers come with them, so you have instant cash flow. Here's the business plan: