While the big carriers continue to scale back fiber deployment,  the smaller independent telcos are pushing speeds higher over new fiber networks. How can this be done without the massive economies of  scale? It’s never been cheaper, and costs continue to decline. Consider the case of a rural telco with 9000 subscribers delivering 60/30 MBPS connections. That’s something we can only dream about here in AT&T’s Dallas-Fort Worth DSL ghetto.

At the end of 2009, Canby had brought Fiber to the Home-based services to about 1,000 homes-a major milestone given the fact that the ILEC has only 11, 000 access lines and 9,000 customers.

Since it pulled out its higher speed fiber products out of National Exchange Carrier Association (NECA) it has been able to offer a number of speed tiers under its Fiber Optic Zone (FOZ) brand, including on the high end a 60/30 Mbps service in addition to a 40/20 Mbps and 20/10 Mbps service tier. Alternatively, other telephone cooperatives are restricted to offering 3-5 Mbps broadband services.  Keith Galitz, Canby Telcom’s President, said that as it rolls out its GPON-based fiber network, its biggest challenge is keeping apace of bandwidth demand. “It was only a year and a half ago that we introduced 10 Mbps on our fiber network,” Galitz explained. “That’s how fast this thing is moving where the demand is there.” (Fierce Telecom)

I believe the small telco is the model for a better broadband future. With large protected territories, and laws written to squash competition, the large telcos and cable operators have no incentive to offer more bandwidth at a fair price. It’s not from lack of capital. It’s how the capital is used. The smaller independents tend to stay focused on their home markets instead of investing in acquisitions, wireless and pay TV.  They also tend to employ locals and are more responsive to local market needs. I’m not suggesting that we divide cities into a patchwork of small monopolies, but rather open the infrastructure to allow for small providers to enter urban markets as competitors.

With the world economy in a pervasive funk, it’s worth noting that the internet continues to grow. Both in terms of TLD’s and traffic, exponential increases continue. Even with artificial bandwidth limits, this demonstrates people want to interact, learn and do more business online.

According to the latest Domain Name Industry Brief from VeriSign, the total base of registered Top-Level Domain Names (TLDs) grew in 2009.

VeriSign reported that in 2009, the base of TLDs expanded by 15 million domains names to a total of 192 million domain registration across all TLDs. (internet news)

The online marketplace wants to grow. Not even outrageous prices and stagnant bandwidth imposed by a duopoly can impede it. Imagine a free market with gigabit connections at priced lower than the megabit connections we have.

Here’s proof that the first world standard for broadband is moving to 1GBPS.The technology is ready and cheap. In markets with actual competition, it’s an upgrade that fits right into the maintenance cycle.

My friend David Isenberg, who organizes the wonderful Freedom 2 Connect (F2C) conference, sent me a link to a story this morning. The gist of the news is that ReggeFiber, in partnership with Dutch incumbent KPN, will make 1 Gbps the standard connection speed for all FTTH customers. The company currently has more than 300,000 customers and is on target to grow to a million subscribers. Zeewolde is the first city that will get the service.

How can Reggefiber do this? The company has seen steep declines in the price of equipment — from modems to central office stuff — which has allowed it to offer this service. (Gigaom)

In light of this news, the FCC’s draft broadband plan becomes even more laughable. What’s not laughable about allowing a duopoly to control US broadband is how this will continue to erode economic opportunity.

Previously we had pointed out that the Telcos can take care of their own. They have a revenue stream (well used to, it is getting a little frayed), that is mostly never ending. The resource is finite but better than what anyone else has. So why do they want to do this to their more lesser mortal peers? —

In the dead of night, just before the latest draft of the Stevens bill came out, a helpful Telco lobbyist inserted a little provision to stack the deck in the case of judicial review. Section 1004 of the Stevens draft now places exclusive jurisdiction for all decisions by the FCC in the D.C. Circuit. This includes not just network neutrality, but media ownership, CALEA, wireless issues, anything.

Why would anyone do that you ask? Because the D.C. Cir. is, without doubt, the most activist court in the land when it comes to pressing its vision of media and telecom policy. More than any other court, the D.C. Cir. can be credited with destroying hope of telecom competition in the United States by perpetually reversing and remanding the FCC’s efforts at rulemaking and enforcement until the FCC finally gave up and effectively deregulated. The D.C. Cir. is also responsible for vacating (eliminating by judicial fiat) the rule preventing cable companies from owning television stations where they have cable systems, and overturning much of the FCC’s cable and broadcast ownership limits. Finally, through the legal doctrine known as “standing”, the D.C. Crcuit has done its best to make it impossible for regular people to challenge FCC decisions or bring individual cases on antitrust grounds.

Source: WetMachine

Why? Well to make it more costly to litigate telecom policy. So if you are a small coop outside to Duluth and are being destroyed by some arcane rule your choice would be under this suggestion having to hire a high priced heavy weight from Georgetown.

There is something else that bothers me about this that has nothing to do with Telecom. Consistency. In the history of this country we have applied the mindset that one tries a case in the jurisdiction of either the defendant or the place where the infraction occurred. Even at appellate, you remand to the closest circuit district from which the original case issued. And NOW we are going to turn this on its ear? The system as envisioned has worked reasonably well, there is no need to change it at this late date.

This provision needs to be removed. Verizon can afford to get on a damn airplane like anybody else.

I’ll be blunt — this stinks!

“People are paying money in to go to college,” she said, “I don’t think any of that money should be used to subsidize the broadband effort that really is competing with the private sector.”

– Sen. Lisa Marrache, the assistant Senate majority leader

Oh, you are asking what’s the argument? The Univ of Mass is considering going into partnership with several communities and private enterprise in rural Maine locations to get broadband to these localities that are not being served now. The beef of course is that the University is competing with private enterprise. —

Marrache said constituents raised the issue with her after charges were leveled this summer that UMS is competing with private companies in the broadband business.

Severin Beliveau, an Augusta attorney representing FairPoint, blasted UMS at a meeting of the State Broadband Advisory Council, arguing their participation in a group seeking federal funds was improper competition with the private sector.

“I am concerned at what the university is proposing here, because it is receiving a form of subsidy, no they are in fact receiving a subsidy from taxpayers, in competing with the private sector,” he said.

Jeff Letourneau, associate director of information technology at UMS, said the university is part of a private-public partnership created to provide broadband capacity at a “wholesale” level and the university’s role is minor.

“The grant from the federal government went to GWI [Great Works Internet] and two private investors,” he said. “As for tuition subsidizing our broadband efforts, that does not happen and will not happen.”

I am a dirty stinking capitalist of the first order. There are not many $$ deals I won’t turn down. (Though there are moral ones I won’t touch.) But if private companies don’t want to service these areas; and that has been the case for Verizon, now FairPoint for years, then by God you have no right to complain. You were offered a franchise there Telcos, decided it was not worth your effort and now complain when your unopened candy bar is taken away from you. Pffft, tough. Capitalism works best when there is fair exchange going on. Capitalism does not work where monopolistic haunch sitting goes on and the citizenry suffer as a consequence.

Which brings me to the title of this missive. You have to ask yourself whose ox gets gored if UofMaine went thru with the deal? Why the resident Telco is who. That ladies and gentlemen has to be the back story. As a fellow conservative I know says — flare drops. This is only a cover to prevent competition.

Serve your constituents Marrache.

Link.
HT:WetMachine.

At the the risk of playing my same old drumbeat, competition is absent from the hope and change national broadband plan. Without competition, we will have neither hope or change. With the federally protected broadband duopoly controlling nearly all fixed line access in the United States, there will never be a competitive market. The FCC only made that situation worse by allowing the same duopoly players to control most of the radio spectrum devoted to two way communication. It also appears that this duopoly has assumed complete control of the FCC based on a broadband plan that has no goals for improving much of anything:

Blair Levin, the FCC’s chief designer of the broadband plan, this week seemed to reinforce the notion that the agency’s plan may be many things when it’s finished — but ambitious won’t be among them. Levin tells Amy Shatz of the Wall Street Journal that any return to line sharing is likely out, despite rumors to the contrary. Levin also shoots down Senator Rick Boucher’s suggestion from last week, requesting the FCC aim high (like around 50 MBps) when crafting broadband goals (Levin prefers 2-4 Mbps). Oddly, Levin also takes a moment to, of all things, complain about consumer group criticism of the broadband plan:

Mr. Levin also dismissed criticisms last week from public interest groups unhappy the plan may not propose some ideas for encouraging competition, such as rules that would require Internet providers to share their lines with competitors. “I find their criticism not very productive,” Levin said Monday. (DSL Reports)

On of the most used marketing ploys in in the telco suit’s bag of tricks is raising revenue by tinkering with rates, billing or repackaging existing technology into higher priced offerings. That sort of tinkering has evolved into a fine art in the wireless biz, with AT&T as the master.

Recent growth in wireless data use has eroded the quality of service AT&T’s infrastructure has been able to provide to many of its customers. AT&T  has responded with a commitment to invest in upgrades, along with usage based price tweaking that amounts to a price increase for many of AT&T’s wireless data customers. According to a report on Neowin, this so called investment may have been a ruse with the expectation that a price increase alone will reduce usage, therefore improving performance.

As seen in the images below, AT&T’s “commitment to improving their network” claim could not be further from the truth. Since the release of the original iPhone,  AT&T has consistently spent less money on network construction. This seems very strange, considering they beefed up construction right before the iPhone’s initial release. With such a high demand phone,  AT&T should be expected to continue investing in their network, especially considering the fact that the iPhone was upgraded twice already, allowing it to consume more data, and ultimately bring more customers to the carrier.

Since the release of the iPhone, AT&T’s revenue has consistently increased. They now make approximately 80% more revenue from wireless data than they did when the iPhone was initially introduced. This increase doesn’t seem to be slowing down anytime soon, as it has been steadily inclining for the past two years. The post also shows stats regarding the economy’s negative effects on AT&T’s net income. Guess what? There weren’t any. AT&T was able to increase their cash, and cash equivalents on hand by 4.375 billion dollars since the start of 2009. They’ve seemed to keep profits fairly steady, considering the times. (more on Neowin)

We have a new FCC on board that is busy meddling in every sector of the communications market, save one. That one item is the choke hold of the duopoly and is the single largest growth limited in the US economy after the taxes and federal debt. Yes,  I’m about to rant on the virtues of a strongly enforced unbundlind of the local loop again.

While the rest of the world is preparing for 4G mobile wireless to augument its fatter fixed line access, in many major American cites, 4G will meet or surpass the fixed line capacity. The reason is the lack of investment from a telco /cable duopoly that has no real competition.

In France, the last mile is open to any competitor and no matter what you hear fromthe duopoly suits and thoer fed lap dogs, all of the players in that competitive market are making money. The real eye openier is how much the average French househould gets for far less than we spend here:

French broadband providers like Free.fr, Numericable, and SFR have just one offer. It costs €30/$45, and for that you get everything:

• Cable and DSL internet at 20-30Mbps (and DOCSIS3 or fiber at 100Mbps in some towns)
• Free telephony to 100 nations (mostly to fixed lines; calling mobiles costs more)
• HDTV with a HD-DVR

(Some ISPs like Numericable and France Telecom/Orange have offers for €20 for Internet + telephony, or Internet + TV, but the majority of customers choose a €30 pack.)

This isn’t all you get. More is included, like free access to WiFi hotspots, music jukeboxes, computer games, your own personal television channel for live TV, etc. We’ll touch upon these innovations in more depth below.

The pioneer of this business model was Free.fr. Led by its maverick CEO Xavier Niel, it introduced the plus simple model in 2002 into what was then considered a lagging broadband market. Now Free is the second largest ISP in the country, it is profitable (with 4 million subscribers), and it boasts extremely low churn rates below 0.01 percent a month. One could almost say that Free’s subscribers only give up their subscription upon death or moving outside of the service area. (Ars Technica)

If the new FCC chair really wants to make a difference in broadband, he’ll work to reinstate local loop unbundling in the United States.  No stimulus pork, broadband maps or net neutrality laws needed. In a truly competitive market, the bad business practices of the duopoly will change instantly. Of course that also require  less central planning and control in Washington DC. No one really believes the FCC or our current Congress and President is interested in that. Far easier to draw very expensive maps and put a shiny new “net neutrality” clown suit on the inadequate system we already have.

If you’re a regular reader, you’re already well informed on the end of voice as a viable wireless business. Sprint and Verizon had invested heavily in national 3G data services for years, while AT&T lagged. Now that 4G is coming online and 3G matters to to a growing number of customers -  like those who grossly overpaid for iPhones, AT&T is playing catch up. It hurts if you’re AT&T and one of your competitors that has been out investing you in 3G calls attention to that fact in advertising.  True to AT&T’s track record it continues to prefer competing in the courts over upgrading. Perhaps AT&T customers who are experiencing poor data service should be careful about what they say publicly too.

AT&T earlier this month filed a lawsuit claiming that Verizon is misleading customers by suggesting that AT&T subscribers cannot access wireless Internet services throughout its network. In the opening paragraph of its legal rebuttal to the suit, Verizon very plainly surmised its argument: “AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.”

The rebuttal filed on Monday in a Georgia district court was in response to two complaints AT&T filed with the court asking that the Verizon advertisements be pulled from the airwaves. AT&T has called the claims in the advertisement “false” and “misleading.” And the company claims it has caused “irreparable harm” to AT&T’s wireless business. (Cnet)

Verizon representatives have responded to the press on these claims. But now the company has filed its official response to the court in a 53-page document that lays out the company’s defense.

It’s also worth mentioning that if Verizon really wanted to put the hurt on AT&T, all it would really need to do is dramatically drop 3G  prices. Since the wireless space is a cartel of spectrum licensees, that isn’t likely to happen. Still, a little competitive sparring is a good thing, There should be more of it. I’d bet even the lawyers agree.

While it’s king of the residential access hill in select areas where it’s deployed FiOS fiber service, most of Verizon’s broadband customers connect via DSL over it’s tired old twisted pair infrastructure. It could be that the Cable guys have been eating away at V’s market share. When you do not have the best offering, you compete on price. Since a price drop is bound to send Wall Street into gyrations the dark helmeted V has decided to give new customers half of a year free with a  contract.

What’s truly amazing is how little the cable guys have invested to enable them to take more market share. It’’s more like demand has driven consumers to a bigger pipe, and the cable guy is the only game in town. Meanwhile back at the FCC, “stimulus” dollars are being spent on pretty new maps. So much for big government help with broadband. How about undoing the duopoly instead?

Verizon Communications will try to boost the numbers in its DSL business by offering six months of free service to customers who commit to a one-year agreement, and the telco also announced price breaks and three months free multiroom DVR for new FiOS bundle subscribers.

The six-free-months offer is available until Jan. 16, 2010, for Verizon’s 1-, 3- or 7.1-Mbps DSL tiers service as part of a one-year agreement. In addition, customers who order new DSL bundles online also will receive a free modem and an additional $5 off qualifying bundles. (Multichannel News)