With the FCC’s broadband baseline set at a paltry 4MBPS, Europe’s recently announced 30MBPS standard should be sounding alarms.  There’s much more to the story than just the minimum acceptable broadband speed arbitrarily set by bureaucrats. The back story is competition and the role it plays.

European broadband has been lead by healthy competition in the most unlikely of places like France and the UK. That open market that includes last mile line sharing for  competition has raised the standard urban connections to some of the world’s most robust at some of the world’s lowest prices. Competition has forced the old school telcos to upgrade infrastructure and streamline operations. New networks cost considerably less to run. And ….. we hear no whining about the need to recover investment in decades old infrastructure.

With the sea change that has made free and accessible information and media the fuel of economic development critical to economic security, broadband competition should be a top priority. At the risk of bending Third Pipe editorial policy on political posts, I have a question for the Obama administration: While you are so eager to emulate all failed aspects of European socialism, why do you shy away from emulating what the Europeans are doing well?

The grand master plan for European broadband is out, and one target leaves the United States in the digital dust—a goal of 30 Mbps “or above” for all Europeans by 2020. So says the European Commission’s Digital Agenda for Europe, which also wants 50 percent of EU households subscribed to links of 100Mbps or more by that year.

….Needless to say, Europe isn’t jealously comparing itself to the United States, high-speed Internet-wise. Here our supposedly bold and fearless Federal Communications Commission thinks it’s cool by setting a pokey universal broadband goal of 4Mbps, sans fiber, which the agency says costs too much. (ARS Technica)

So far, FCC regulation has made US  internet access less competitive than most of the free world. In the pre FCC days of dial up, any and all providers had equal access to the PSTN network, and while telcos enjoyed an advantage, competition for subscribers was robust. Prices fell as low as free (with advertisements).  When broadband came along, the same open access rules enabled competitors to deliver DSL Service over that same network. Exhibiting it’s extreme cronyism, the FCC declared a duopoly to be a competitive market and ended fair (paid) access to last mile to consumers homes. This effectively rubbed out fixed line competition. When the FCC opened new wireless spectrum for a competitive “Third Pipe” to the Internet, it waived rules that would have prevented Verizon and AT&T to buy the spectrum in most major markets (They already controlled most of the communications frequencies in these areas).

Now we have a new chair at the FCC, who has all of the credentials to be called a duopoly super crony. His determination to gain the authority to regulate the Internet should be sounding alarms everywhere. Unfortunately, most big media and tech media are also an agenda media.

Federal Communications Commission Chairman Julius Genachowski on Thursday plans to lay out a roadmap for regulating broadband. This step has been eagerly anticipated since a federal court ruling last month cast doubt on the agency’s authority over high-speed Internet access.

The FCC now regulates broadband as a lightly regulated “information service” and had maintained that this gave it legal authority to act on its national broadband plan, which it released in March, and to mandate net neutrality. But the U.S. Court of Appeals for the District of Columbia rejected this argument.

Since then, the FCC has been trying to decide whether to reclassify broadband as a more heavily regulated telecommunications service, which would be subject to “common carrier” obligations to share networks and treat all traffic equally.

Late Wednesday, the agency said it will seek a “third way” approach that strikes a balance between “weak” rules for information services and “needlessly burdensome” rules for telecommunications services. This approach, the FCC said, would apply a “small handful” of telecommunications regulations on broadband providers and would include “meaningful boundaries to guard against regulatory overreach.” (Yahoo)

Anyone who believes giving the FCC new authority to regulate the pipes needs to objectively review the agency’s past behavior and the professional connections of  it’s board. An open market would be the best way to insure good behavior by access providers. Not only has the FCC stifled competition, Genachowski has publicly stated the last mile line sharing is not on the table. While he advocates opening new wireless frequencies, he also advocates auctioning them to the highest bidder over open public access. If you really think the FCC’s “neutral net” will really be neutral you’ll be very disappointed if the FCC gets what it wants. Don’t say I didn’t warn you.

If I were writing the FCC’s extension request it would go something like this:

Dear Congress, we need another 30 days to put a better clown suit on the duopoly’s wish list so we can spin it to the public  as a broadband plan. We’re also going to need a little extra time to get all of your individual earmarks carefully spun as a benefit for all Americans, even if they have nothing to do with broadband. If you would like to see the offiicial document instead of my speculative interpretation, go here.

What will the final plan include? The buzz coming out of the industry, FCC hints and from Congress all points to a continued duopoly lock on last mile access and a new reallocation of spectrum. I predict we’ll be sold on the idea of putting new spectrum on the auction block that will be largely consumed by the current duopoly and wireless cartel. Will be get a better pipes? Maybe a little better mobile one. Reality is if the wireless cartel can lay its hand on more spectrum it can deliver more bandwidth from fewer towers. If the spectrum is auctioned, only players with deep pockets will have a chance of winning. That means no new competition, and no real innovation. It also means a new invisible tax as the cost of auctioned spectrum will be passed to the consumer through higher charges.

If this predictable path is followed,  we’ll have very much the same broadband as we have now, controlled by very much the same people who have been satisfied with putting the United States in a race to last place when it comes to average end user bandwidth at the highest prices in the developed world.

Sick of it? You can write your representative and the President and tell them you will vote them out if something does not change. I’m doing that every few days and you should too. Remind them we need less “help” from Washington and a lot more competition.

Here’s another lab measurement that will probably make it to the real world, but it does give us some idea of what is possible if the marketplace were competitive enough to motivate providers to offer more.

Verizon yesterday said it tested a fiber technology in its labs and a customer home that delivered 10 Gbps downstream over its FiOS network and 2.4 Gbps in upload speeds. The technology, called XG-PON, delivers insanely fast speeds and is part of Verizon’s efforts to make its $23 billion investment in fiber grow with the demand for better broadband.

If you read our blog in mid-November, you already knew about this, but we didn’t have details on the standard Verizon was using. The XG-PON standard won’t actually become official until mid-2010. The current Verizon technology is GPON which delivers 2.5 Gbps downstream and 1.2 Gbps upstream. Currently Verizon splits those speeds among about 30 homes. Brian Whitton, executive director of access technologies at Verizon, who originally told us about these tests, explained what people might do with such blazing web connections, which mostly involves better video technologies.

My guess is that we will be seeing Gigabit connections showing up in consumers homes at reasonable prices in the next couple of years. That will be terrific for those living in Japan, Korea, and some European countries.  As for the US, don;t look for much to change as long as our regulators belong to the duopoly.

We’ve been telling you that the lackluster, overpriced duopoly broadband with no alternatives is a product of  underhanded lobbying in Washington. Duopoly friendly regs that make competition impossible along with a complete lack of oversight makes for an environment where price increases and caps could be our future rather than gigabit connections. Want proof? Try this:

The Philadelphia Inquirer takes a casual stroll through the lobbying numbers of the largest phone and cable companies. Comcast’s lobbying budget jumped from $570,000 in 2001 to $12.5 million in 2008, while cable lobbying group the NCTA doubled its lobbying budget to $14.4 million during the same period. Verizon’s lobbying rose to $18 million in 2008 from $8.2 million in 2001, while AT&T’s budget fattened to $15.1 million in 2008 from $6.1 million. (Dsl Reports)

Sadly, if we just  keep electing either of the two major parties, very little will change. The money and perks are  too big for the established players to willingly walk away from. Thinking locally and pushing state governments to open the markets are our best last hope.

Emboldened by no resistance from regulators in it s Beaumont, TX test, Time Warner is readying new caps and overage charges for more of its broadband customers. While the market is starved for real competition, the cable guy will continue to ration while charging more at will. The new caps will come in tiers.

They will create a “super tier” that offers up to 100 GB before overage charges apply, but they haven’t yet decided how much it will cost. Also, Time Warner will monitor downloads starting in April but the actual metered billing in San Antonio and Austin, Texas, will begin in September. Three months before they plan to charge folks under the tiered plans, they will notify customers, offer them a meter and let them see how the metered billing will affect them. Read the official statement.

Time Warner is joining other ISPs in trying to squeeze more money from their broadband pipes, generally in the name of needing to upgrade the network or to stop bandwidth hogs.  But in truth, caps and tiered plans are about limiting competition (especially from online video), and squeezing customers, because a lack of competition means they can. Here’s the money quote from the BW article:

“We need a viable model to be able to support the infrastructure of the broadband business,” Time Warner Cable CEO Glenn Britt says in an interview. “We made a mistake early on by not defining our business based on the consumption dimension.”  (Giga Om)

Now, by the virtue of maximum speeds the service was already sold in tiers with limits. In effect TW is adding a new tier of charges. Perhaps they should open a customers pipe to a maximum speed and just charge by the bit if usage is really the issue. The reality is that it’s not. Infrastructure keeps getting cheaper and needs ever fewer people to keep it working. New subscriber growth is slow, and this is a predictable reaction by the cable guy to grow revenue. When there’s no real competion it’s easier to raise prices instead of creating new value or winning new customers with better service.

It’s been more than a year since I brought the idea forward that we need to establish a 1 gigabit symmetric connection as the new gold standard for consumer broadband. Cable Modem inventor Rouzbeh Yassin seems to be in agreement with this idea, although he’s trying to push the envelope on coax cable to get the job done. If you are burying cable today, only fiber makes sense looking ahead to the future.

As Comcast begins rolling out DOCSIS 3.0-based “wideband” services that provide up to 50 Mbps, he is already anticipating Gigabit-per-second broadband connections that deliver more than 20 times that. Yassini, founder and CEO of YAS Broadband Ventures, which engages in consulting, research and investments, spoke recently with Multichannel News technology editor Todd Spangler (Multichannel News)

Why do we need a gigabit? It’s a Field of Dreams scenario. If the pipe exists, it will be filled, creating nearly unlimited opportunities to enrich our lives as well as creating a conduit for abundant economic growth.

The time has come to quit looking to traditional service providers like the cable /  telecom duopoly to build for the future. Federal government policy is still stuck in the 1960’s and is unlikely to produce any advances with a new “connected” administration beyond more regulations for the incumbent providers. Those of us who can see beyond what we have today need to work locally and create the new connected world ourselves. Call it the mother of all open source projects.

As misguided pols prepare to pacify the US’s under served, over charged broadband consumer with “net neutrality” and greater oversight of the existing duopoly, most of us want other options. A new survey on customer churn shows that 3/4 of US broadband consumers are looking for a better deal. I’m betting most of us would flee our current current provider for faster and/ or cheaper quicker than a duopoly lobbyist can say Superbowl tickets.

Three out of every four US broadband subscribers would be willing to leave their current Broadband Service Provider (BSP), according to a survey just published by analyst firm Strategy Analytics. Within this average, Time Warner Cable is the most susceptible to customer defections if a price war breaks out. AT&T and Verizon are both vulnerable to rival offers of faster broadband speeds, while Cox Communications has the most secure customer base.

The survey, “Broadband Satisfaction and Customer Churn: US 2H’08,” focuses on the so-called “three pillars” of customer churn: customer satisfaction levels, propensity to churn, and perceived obstacles to defecting. Respondents were presented with various broadband speed and price scenarios to gauge sensitivity. (Marketwatch)

The more left leaning of the tech media is gleefully predicting the return of net neutrality legislation once their team takes over the helm in Washington next year. I advise them to be careful what they wish for. The duopoly is even more deeply embedded in the bowels of Congress than they are at the FCC. I’ll even predict that by the time bills are voted on they’ll be hardily endorsed by the telcos and cable guys. Why? Net neutrality assumes that there will be no competition for customers. Since the duopoly has so effectively manipulated lawmaking to crush any competitor in the past, its equally certain that new “net neutrality” laws will only reinforce their position. More central control regulation will never fix a problem that is caused by the lack of robust competition.

While the FCC has addressed what it saw as net neutrality violations on a case-by-case basis in recent years, a law passed by Congress would provide customers, investors, Web-based companies and broadband providers with certainty about the rules of the road, said Frannie Wellings, telecom counsel for Senator Byron Dorgan, a North Dakota Democrat and cosponsor of a bill introduced in 2007 that would have created a net neutrality law. (PC World)

Our readers are well advised to remember that congress likes to put very attractive names like “net neutrality” on nightwarish legislation. Remember the DMCA that was supposed to “fairly manage” intellectual property? Out old friend Joe Isuzu could not do better. Bottom Line: If you order a birthday cake from Congress, you are likely to receive a cow pie with a candle in it.

Seemingly oblivious to the need to upgrade their broadband capability, AT&T is investing in yet another rural wireless carrier. Why? I’m betting that USF money that should either be sunsetted or devoted to broadband is a big part of the reason. AT&T’s wireless business is riding high today, but with the US cellular market at the saturation point, so that could change in a instant.

AT&T (T) this afternoon announced it will buy Centennial Communications (CYCL) for $8.50 a share, or $944 million in cash. The total value of the deal, including assumption of debt, is $2.8 billion. Centennial provides wired and wireless phone services in rural areas of the Midwest and Southeast and in Puerto Rico and the U.S. Virgin Islands. The deal includes 1.1 million wireless subscribers. (Barrons)