Not A New Year's Resolution

I'm not the type of person to make New Year's resolutions because why should a person pick just one time of the year to say that they are going to evaluate how they are going to live their life or run their business. This philosophy comes from my grandmother that use to say, "Why should I wait until your birthday to give you a present to show my love? I love you all of the time so anytime is a good time to give you a gift." So while I tend to evaluate my plans and life on a continual basis, the beginning of a new year is a psychological new beginning for many people. More importantly for most of us in the business world it the beginning of a new fiscal year for many of our customers.

The start of a new fiscal year is my motivator for implementing the plans that I made last year. I previously lamented about the malaise in the telecommunications industry. My assertion was that all of the excitement was in the equipment attached to the network. Looking at the excitement surrounding the CES that just ended, one could agree with my statement. Instead of an either/or option for intelligent network/intelligent CPE, the truth is that they have to operate synergistically to achieve their desired aim. There is a tremendous amount of heavy lifting behind returning your "OK Google" request or bringing you a Uber car. It may be the application developers that appear to create magic on smartphones and tablets, but it is that work of thousands of telecom network professionals like us to make it look like magic.

Although today's mobile device has more computing power than a supercomputer from 1980, that device cannot do everything necessary to deliver information or intelligence from the far-flung reaches of the Earth. There are thousands of protocols and API designed to allow systems to interact with each other to assemble disparate pieces of information into a simple result displayed on a screen. We use catchy marketing terms like Big Data and Internet of Things to make these interactions understandable by the layperson and to sell products and services to our customers. Although I cringe every time I hear buzzwords like these or cloud, I know that they are euphemisms for a complex set of interactions taking place in the network on the user's behalf.

So there are exciting things left to do in telecommunications afterall. They may not be as straightforward as the creation of DSL or SDH/SONET technology, but we have built that layer of the network and it is mature. We are in the phase of more complex interactions between different layers of the network to automate and simplify how services are delivered. For those veterans that built the foundation of today's broadband optical network, it may appear that there is not much left to do, but that is not the case.

The industry will continue to develop the SDN-based network and take advantage of powerful inexpensive computing to virtualize more functionality (NFV) into the cloud (ouch that hurt). As we continue to optimize the transport network to add more connected devices like doorbells (Ring), lights (LIFX), and cars, we will need the added sophistication that the network provides to provide near real time interactions with us.

There are still plenty of problems to solve such as ubiquitous connectivity. With only 40% of U.S. rural population having access to wired broadband and much less connectivity in many other parts of the world, there is still a tremendous effort needed to make broadband universal worldwide.

Security of data and information is another significant concern. Up to now, everything that we have done is just treating the symptom. Personal information is being stolen and sold every day from governments and private enterprises. No organization is immune to a data breach. Privacy goes right along with data security. Privacy is a basic human right that is constantly being violated globally by governments, corporations, and individuals. I question why my identity was compromised by a company that I never did business and used against me by the government. This situation is inexcusable, and it demonstrates the fact that security has not been a priority in our industry. Our liberty depends on these two tenants which is why the industry's brightest minds must develop a holistic solution that includes end-to-end encryption of all information on devices and traversing across the network. There can be no backdoors for any reason.

Millions of new devices being connected to the network monthly requires scalability. With increased scalability comes increased power consumption. We need to put our minds on how to grow these networks without exponentially increasing power consumption. Actually power consumption should be decreasing.

I could go on and on but those are the big three topics that I see the industry addressing in 2016 and beyond. Closer to home, I will continue to be involved in the larger trends in the industry while solving some of the more tactical problems to get us there. ComTech Sales and myself can be relied upon to work with service providers to develop and implement solutions to expanding broadband penetration, security, and power consumption. We will continue to grow our business on the telecom side of the industry that we started in the fall of 2015. Please rely on us for solutions to your equipment needs.

A Time for A Transition

Almost a year has passed since I last written a blog, why? Maybe after almost three decades in the industry I'm not excited by the technology these day. Maybe it has been the associations with my last two companies that have deflated the once full sails that I had for navigating through the industry. Or maybe it is the malaise that has wandered into the industry after the deflation of the bubble. Most of the innovation has migrated to the services delivered and customer equipment and out of the network. The pendulum has swung back to intelligent CPE/dumb network. Of course there are those that will argue with me that there is more intelligence in the network than ever with bandwidth on demand, SDN, NFV, IP-centric data transport, and the cloud. All of this technology are just techniques to optimize data transport from point A to point B. Exciting as it may be, we are just at the asymptote of the Moore's Law curve.

After reading this first paragraph you may begin to think that I am jaded. I prefer to think of it as experienced. I believe that the industry will still create breakthroughs in technology but they will be focused on the customer experience more than the network experience. There is still much work to do making access to the network ubiquitous and inexpensive. The creation of Inphotonics Research was to leverage the concept of open-access broadband infrastructure to increase customer choice and broadband penetration outside urban and suburban areas, but we were a bit ahead of our time. I know that open-access infrastructure would be the best alternative for consumers and municipalities, but I am not going to fight that fight again unless some unforeseen circumstance were to unveil itself.

When I started my telecommunication career in the mid-80 at AT&T Bell Laboratories, I was fascinated by the possibilities of fiber optic communications, and I chose to be a part of it all the way from basic research on III-V materials to make better laser diodes and photodetectors to the systems that used those devices. I was a part of many industry firsts though the innovation that myself and my colleagues created and delivered. As my career progressed, I evolved from a development/technical role to a business/management role but I still stayed on top of the technology because it was my differentiator. I continually educated myself on the latest technology and standards to remain on the leading edge of technology. My companies and customers benefited from this skill.

After the bubble broke, I made some decisions that were more family than career oriented. I was disillusioned with the industry because of the corruption and ineptness that I witnessed firsthand. Maybe I would have been less disillusioned if I had cashed in on some of the spoils, but despite my best recommendations our owners decided to take a different course. Still I ended up working with some great people over the last decade and a half while at Accedian Networks and even Sunrise Telecom. Through it all it was my customers that kept me going. It was the satisfaction that no matter what happened that I was giving them the best recommendations and value that I could provide.

All is not doom and gloom though. I have been involved in many industry firsts, and gained extensive knowledge and experience along the way. I have had the privilege of working with some great people both as colleagues and customers. A few months ago, I was contemplating what I should do for the next stage of my career. I am in Boulder, Colorado which I love and have ties to my family and community. The Denver/Boulder area is not known for being a hot-bed of telecom activity these days and investors are more interested in mobile applications and social media over investing in big infrastructure companies. A Sphero-like device has a better chance of being funded over an inexpensive device that can deliver broadband services to remote areas. It is a shame because we have a vibrant communications services industry in the region still the money is going elsewhere.

What to do? Fortunately my industry colleagues and friends are always there for me, and I reconnected with one of my best manufacturer representative to expand his business into the telecom sector. Charlie Fajardo built ComTech Technologies to serve the cable TV (a.k.a. MSO) industry. Charlie and his team have been extremely successful building a relationship with MSO customers over the years to build a great business that not only sells a wide variety of products to these companies, but is a unbiased and reliable technical source to provide recommendations to these service providers.

I have joined ComTech Sales to start the telecom practice to provide the same services to customers in the telecommunications industry. We will build on the already extensive list of manufacturers that we have partnered to service our telecommunications service provider customers. I am excited to embark on this new venture with Charlie and the team to grow ComTech Sales business to the level the team has done in the MSO space. I look forward to continuing to build relationships with my existing customers plus add many more as well as forge new and stronger relationships with our manufacturer partners. We are here to be a reliable resource to all communications companies to serve your needs from the customer all the way through the network. This will be an exciting new journey that I am thrilled to do.

Obama Proposes Overriding the Tenth Amendment

Obama’s speech at Cedar Falls, Iowa was like most of his speeches; much to do about nothing. He is proposing nothing short of allowing municipal governments to use taxpayer funds to compete against private enterprise, and he is encouraging the FCC to override 20 state laws in contradiction to the Tenth Amendment. I make no bones that I am a free market capitalist and I am strongly against the government taking over or competing against private enterprise. What Obama is proposing is not only anti-capitalism but also illegal.

I have written here that our current duopolies are not optimal for consumers, but replacing them with a subsidized government bureaucracy is a move in the wrong direction. I support municipal governments determining their own broadband destiny as much as I support removing restrictions allowing new entrants into the market by removing obstacles that municipalities and states have created. Twenty states have created laws to protect taxpayers from having to pay for cities failed attempts into the broadband services markets. These states realized that the communications market is competitive and fast moving. They have seen how over 50% of all municipal broadband efforts have failed leaving taxpayers to pay off creditors and bondholders (link, link). Proponents of government broadband, including the press, are quick to point out the few successes like EBP in Chattanooga and Cedar Falls, but they don’t bring up UTOPIA or Longmont, Colorado that is going for its forth attempt to provide residential broadband services. There are a variety of reasons that municipal broadband efforts fail which is why it is better to leave the risk to private enterprise.

Obama cannot instruct the FCC to just override the 20 state laws enacted to protect taxpayers. The Tenth Amendment gives states the ability to make its own laws without the federal government overriding them except for powers expressly granted by the Constitution and states. The Supreme Court has already upheld the authority of the states to prevent municipalities from providing telecommunications services in Nixon v. Missouri Municipal League by a 8 to 1 decision. He can say what he wants but case law is already pretty clear on states’ authority granted by the Telecommunications Act of 1986.

There is no question to the value of broadband services to a community, but it should be delivered in a competitive environment to enjoy all of the value that it brings. Either industry partnerships or cities should be allowed to come together to build open-access broadband fiber infrastructure as done in many cities and countries outside the United States. Sharing a common infrastructure will reduce the barrier to developing a profitable business model for a service provider; therefore, promoting competition that will benefit everyone in the community. This is the direction that Obama should be encouraging states to go.

Technorati Tags: broadband,municipal broadband,open access,telecom,FTTH,broadband penetration,FCC,Obama

There May Be Hope Yet

Over the past couple of weeks, I have been encouraged that there are more people discussing open-access infrastructure than before. Maybe it is because they have started to read Title II and realize that it is not the panacea once thought. By definition more government intervention/regulation means less freedom, and the hundreds of pages contained in the Telecommunications Act of 1934 is no exception. Title II is jam packed with regulations designed around telephone service in the 1930’s when we were under the control of the Bell System. Needless to say that it will control every aspect of our Internet services. The Internet was founded based on a loose federation of networks survivable if any one link disappears. It was meant so any node could reach and freely exchange information with another node. Even the technical aspects that the Internet was designed were not called standards or regulations, they are called Request for Comment that implies they are fluid and optional. Imposing laws and regulations on the Internet is contrary to its founding principles.

The FCC has indicated that if they impose Title II regulation, it will chose which parts to enforce. If you expect the FCC to exercise any forbearance of any section, you have not been living in America long. Bureaucracies live to grow and expand their power. Eventually piece-by-piece the FCC will implement parts of Title II over the years. Also included in Title II is the allowance of paid prioritization which is a no no for many net neutrality wonks. People that support this heavy handed move either are ignorant of what it will really means or have ulterior motives such as lobbying to influence control of the Internet for their business advantage (i.e. crony capitalism).

Thankfully some people are waking up and realizing what regulation will really mean to the Internet, and they realize that competition is the real solution to the yet to be encountered net neutrality issue. Karl Bode wrote an article yesterday on Techdirt that concluded that open-access broadband is a superior choice to regulation. Leo Laporte had a well-balanced panel discussion about net neutrality on TWiT that touched on the fact that competition would be superior to regulation. My neighbor to the north, Brett Glass, delivered intelligent arguments against regulation and for open-access on TWiT. These intelligent and technical discussions are ones that we should have had two years ago when net neutrality reared its ugly head. Broadband competition can be achieved if we remove the barriers that are preventing it from happening.

Fortunately there are solutions that can be adopted that eliminate the need for heavy-handed FCC regulation: open-access fiber infrastructure. I am not discounting other means of access such as wireless, but there are impediments to wireless access as well such as spectrum allocation which is also under FCC control. I have already extolled the virtues of open-access in other posts so I will refrain from being repetitive. Suffice it to say that there are a few different models for open-access. Network unbundling is the least favorite of mine but in a pinch that will work. Most of the incumbents don’t have fiber that deep into the network to make unbundling an option. We need to build fiber to every home and well as provide spectrum to do it as well. The FCC should be working to support those efforts and eliminate barriers for new and existing entrants that want to provide infrastructure. Working on some convoluted semi-regulation scheme is a fools-errand that will only lead to lawsuits and more complaining. Let’s work on providing a competitive broadband environment instead.

Technorati Tags: broadband,municipal broadband,open access,FCC,net neutrality

Avoiding the Pitfalls of Municipal Broadband Networks

I just posted an article on municipal broadband from Forbes that is one of many that points out the pitfalls of municipal broadband. Lest we forget all of the muni-WiFi follies of the last decade. It is not the purpose of government to compete with free enterprise in a capitalist economy. Government should only step in when private enterprise will not or cannot financially serve a market.

This article touches on the fact that fiber-based broadband networks are extremely costly to build. That last-mile access is the most expensive because it is the portion of the network least shared. Add to it the fact that we have a much lower housing density in the United States than in most countries, and you have added even more to the cost of providing service to a single home. Now consider the fact that the electronics that power the network will be replaced typically every 5 years to keep up with the demand for more services and bandwidth and you have offset most of the benefits of the 40-50 year life-cycle of the fiber. Do not forget the pressure to lower cost due to competition and the increasing costs for content. Now maybe you can see why there are only two providers at best in each market.

The business case for broadband services (i.e. voice, video, and data) works for at most two providers if they build and operate their own networks. Most areas of the United States are currently in this situation. A duopoly does not promote competition; hence, the desire for a third player. Google has chosen to stir up the pot in several markets by competing with the incumbents but their business objective is to use these captive eye-balls to push more Google advertising. I personally applaud Google for taking a long-term and different approach to provide true competition in some markets. The down side to what they are doing could be the "walled gardens" that so many net-neutrality wonks are afraid with managed services on the Internet. What's to prevent Facebook from doing the same as Google? Why not? The problem is if Facebook and Google start limiting content to competing services. It could happen. Remember AOL and CompuServe?

These fears and the fact that Google has only announced a limited number of markets it is entering. In Google's defense what is limiting the speed of their penetration is the byzantine regulatory environment that they have to navigate. Many cities and towns do not want to wait for Google or someone else to come so they have turned to government to fill in where private enterprise will not. A persuasive argument could be made for wanting municipal broadband which citizens of Chatanooga and around Salt Lake City have bought.

Cities have not considered out-of-the-box solutions such as they lay and manage the fiber infrastructure and allow service providers to lease the fiber access from a centralized location to the subscribers' home. Locales in Europe and Asia have successfully implemented this model. Where they have open-access broadband infrastructure, competition has flourished. I have challenged several municipalities to try open-access but they had employees more interested in building and running their own little networks. Civic leaders need to reach beyond their own bureaucrats or desire for bigger government and look for solutions that will work for the economic growth of their cities.

Common Sense at the F.C.C.

Federal Communications Chairman Thomas Wheeler (Brian Fung/The Washington Post)

After a few months of comments by the Chairman of the F.C.C., Thomas Wheeler, that the Commission would consider allowing companies to pay for special arrangements for access to their customers.  They will propose a new set of rules in their May meeting that will allow content providers to pay broadband carriers for better access to customers.  In this statement they included another proposed rule that would prevent any carrier from inhibiting, limiting, or denying access that would limit the openness of the Internet.  The Commission was not specific on how the details of this so-called fast lane could be implemented, but most likely it will be increased bandwidth at peering points, improved content caching, and traffic prioritization (i.e. Quality of Service).  The F.C.C. was specific in stating that broadband providers “may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

The F.C.C.’s action is based on a January decision by the U.S. Court of Appeals for the District of Columba Circuit that struck down the FCC’s 2010 net neutrality rules.  This still left the commission with the authority under the Telecommunications Act of 1996 to regulate broadband services.  The F.C.C. would still have to look at each agreement on a case-by-case basis as required by the D.C. court.  Also they will act on any broadband company that engages in harmful conduct that threaten the openness of the Internet.

The F.C.C. has properly covered its’ bases here by preserving the value of the Internet that allows any device to freely connect to any other device, but they also wisely recognize that all bits are NOT created equal.  Since the arrival of Thomas Wheeler at the commission, the analysis and reports from the staff engineers have triumphed over the politics of the bureaucrats and outsiders.  They realize that best-effort Internet access is not sufficient to promote true content competition.

Since divestiture we have strived for a competitive telecommunications market in this country, but we have been unable to achieve it because the business case is untenable for each service provider to build high bandwidth fiber networks to homes and small businesses.  It is affordable to run fiber to business customers that spend thousands of dollars a month on services which is why we have approximately 40% of all businesses now served by fiber.  For the residential subscriber that spends less that $50 per month the cost is prohibitive. This fact is why we now have triple-play services offered by a duopoly with an ARPU over $100 per month offered by the incumbent broadband carriers.  Service providers need at least a 40% market share to provide a reasonable ROI to build a network which is why you don’t see small start-ups building alternative networks.  Investors are smart enough to realize that it takes too much capital to build these networks and it is a losing proposition to take on the incumbents.

Fledgeling startups like Vonage or Netflix could never afford to build their own network, but they can leverage the Internet to provide competing services to the incumbent carriers.  The incumbent carriers control the quality of their services by utilizing bandwidth outside of their Internet service to deliver their voice and video services.  Over-the-top (OTT) service providers do not have any ability to control the quality of their services since currently the Internet is a best-effort where all bits are created equal.  Before delay and jitter critical services like voice and video traversed the Internet, best-effort was good enough because no one really tell if their web page or e-mail was arriving a few milliseconds later than it did last time. Slow performance was usually related to the last-mile access bandwidth.  Throw a few more Mbit/s at a customer and the problem was gone. 

Now that video dominates the Internet, the backbone frequently becomes saturated at peering points and access;  thereby, affecting all traffic.  Customers of OTT companies are complaining that the quality of the service is poor, and they eventually go back to the incumbent service provider.  The OTT loses while the incumbent wins.  The customer loses too because there is less competition in the market.

The conclusion is that best-effort packet delivery is not good enough for services like voice and video.  Businesses have known that for over a decade which is why they purchased managed Ethernet services where they can prioritize their voice traffic over video over web surfing and e-mail.  There are two standards by which traffic can be prioritized end-to-end and several implementation agreements that the industry uses for interoperability.  These same mechanisms can be applied to the Internet to level the playing field for OTT service providers.

The F.C.C. is smart to recognize that true service provider competition will take a few more decades to come to the residential market.  Of course open-access municipal broadband could deliver true competition as I have written about many times, but allowing content providers to negotiate special peering arrangements and traffic prioritization will offer consumers a real choice in services other than that forced upon them by the duopolies.  OTT service providers like Netflix, Hulu+, Amazon, Google, Vonage, etc. will soon be able to deliver the same quality of service as the incumbent carriers at competitive prices.

Unfortunately this common sense technical solution to enable capitalism has been extremely politicized.  Many of the articles written over the past few months are vehemently against this proposed change in policy, but their fears are fueled by their ignorance and vested interests.  Surprisingly The New York Times and PC World each wrote very good and non-biased articles on today’s announcement that accurately presented the F.C.C.’s proposed new rules.  The usual tripe was spewed by outlets such as The Verge, NPR, The L.A. Times, and CBS’ own CNET decrying the end of the Internet and quoting any number of Soros funded front groups.

Their arguments are based on the egalitarian philosophy that all bits should be treated equal.  They trot out anti-capitalist rhetoric and class-warfare arguments.  What they do not realize that while they think they are sticking up for the little-guy (the consumer and OTT providers) they are actually supporting the big guy (the incumbent).  Maybe I am not giving them enough credit and their support is intentional. 

A prime example of the the misinformation that is propagated was on today’s The 404 Show hosted by CNET.  Bridget Carey (@BridgetCarey) incorrectly states that the little guy cannot afford to pay the toll to Comcast that the large companies could easily pay.  Well Netflix was and still is a little guy compared to companies like Comcast, but they charge an order of magnitude less than the big guy so adding a couple of bucks a month for superior quality of service insignificantly impacts their value.  She leaps to the conclusion with the support of her cohort Jeff Bakalar (@JeffBakalar) that there will be an Internet ghetto for those companies and people that cannot afford to pay. What they are missing is that only companies with time-sensitive content will want to pay for prioritization, and that companies just serving up web pages like Amazon, Facebook, LinkedIn, etc. can still survive on a best-effort service.  Jeff believes that the Internet should be free and that all service and content providers are inherently evil.  Their arguments were thinly veiled slams at Comcast which is no surprise since they are paid by Viacom/CBS.  This is the problem when you have journalism majors applying their political philosophies to the technical domain.  They certainly should not be issued a journalism license.

The problem is that arguments like these will be presented as opposition to the common sense rules proposed by the F.C.C.  They will be guided by emotions and fear and not facts which seems to dominate today’s political domain.  Thomas Wheeler is the first Commissioner in more than a decade that actually understands the industry that he is attempting to regulate.  Let’s hope that the rest of the Commission understands reason so we can have a truly competitive content market.

Technorati Tags: FCC,FTTH,Internet,broadband,net neutrality,differentiated services,Silicon Flatirons,No Agenda,Comcast (CMCSA)

Qwest’s Request for Statewide Video Franchise Has a Weakness

The proposal by Qwest for statewide franchising for video services is not necessarily a good move for consumers unless communities have options to ensure their broadband future.  By simplifying the franchising process, Qwest/CenturyLink and others can easily re-enter the video market in Colorado without negotiating with every city they want to provide service; thereby, allowing competitors to satellite and cable TV companies.  I personally welcome Qwest’s re-entrance into the market.  Local franchise negotiations are often fraught with requests for community TV stations and equipment, free or reduced charges to schools and other institutions, municipal network access, and that pesky universal service requirement.

Elimination of these individual negotiations will reduce the cost of providing services to consumers and speed time to market.  Wireline providers such as Qwest and Frontier Communications will be able to develop successful business cases to deliver video services in communities enabling more competition and choice.  The problem is that there are still a limited number of competitors for video services in the state, and without a universal service requirement new entrants will likely serve only the markets that can be reached for the lowest cost and highest probability of market penetration leaving some suburban and rural areas with limited or no choices.  Additionally it gives new entrants an advantage over current municipal franchise holders like Comcast that are required to provide service to all households in the franchise territory.

I support Qwest’s move to simplify the franchise process with the caveat that allows communities to have control over their broadband destinies.  If a community can no longer guarantee that they will have video (and broadband) services that meet their needs, then they should be able to offer alternatives for their community.  A few years ago the legislature passed SB-152 that prevents communities from building their own broadband networks for public use.  The intent was to keep communications services in the hands of private enterprise and not divert taxpayer money for these purposes.  What is does is prevent many communities from having advanced broadband services that many of their urban counterparts have.

Building broadband networks to every home is a very expensive endeavor.  The economics to build these networks for just a single carrier use is not feasible for public companies except in the densest metro areas which is why you see Verizon’s FiOS in only major metropolitan areas.  A community could build that last mile network and lease access to multiple service providers and see it break even in 5-7 years.  Google is trying to institutionalize this model in their Fiber for Communities project.  These open-access last mile networks have proven to be economically feasible in many cities throughout the world, but in Colorado cities are prevented by law from building them.

Any proposed change in franchising and lessening of the “universal video service” requirement should come with a repeal of SB-152.  This change would allow municipalities to form public/private partnerships to build and operate network infrastructure where private service providers could purchase network to deliver voice, video, and data services.  Communities would then be assured that their citizens would have a choice of service providers and the revenue from the network would replace franchise fees.  Eventually Qwest and Comcast would see the benefits of municipal broadband infrastructure and begin purchasing capacity as well.

Denver Post Article

Technorati Tags: CenturyTel (CTL),Colorado,Comcast (CMCSA),Google Fiber for Communities,Qwest (Q),Verizon (VZ),broadband penetration,rural broadband,telecommunications,video

The Wrangling on Net Neutrality Continues This Week

The debate on net neutrality rages on this week with AT&T checking with their position on the topic.  Not only did they effectively state their case for differentiated services, they also addressed the inaccuracies in the positions of the political opposition groups.  Mr. Hultquist noted, in his blog post, that the position of net neutrality groups like the Church of Extreme Net Neutrality (CoENN) will make the Internet a “dumb network.”  I applaud AT&T for coming out in support of differentiated services and backhandedly supporting the Verizon/Google principles.  Their article took the direct approach to dispel the myths of political opposition groups.

Declan McCullagh of CNET wrote a rather objective piece on AT&T’s announcement covering the basis for AT&T’s position.  In the article he presented an opposing views from groups like Free Press.  Mr. McCullagh shows the astute reader that AT&T’s position is based in technical facts while the Free Press’ position is based on opinion with no historical or factual basis.   I hope that CNET and the rest of the press will continue to provide objective reporting on the topic and continue to produce well researched articles like this one.

The FCC took some action this week requesting more data from Google and Verizon as reported by ARS Technia.  Anti-differentiated services proponents chastise the FCC for dragging its feet, but I think that it is giving industry time to align itself and reach an agreement.  I am sure that they will not public admit to this strategy, but their passive role and quiet support of differentiated services in their Broadband Performance report seems to support my supposition.  The FCC is treading lightly because it knows that net neutrality is a political hot potato, and if they take no action, then the political opposition groups will utilize the President to put pressure on the FCC.  They realize that their legal authority to implement net neutrality is weak so they will drive the industry through their inquiry process.  If they push the industry to address wireless networks as well then they can claim credit for being an active participant. 

Companies continue to come forth in support of differentiated services.  Hopefully in the coming weeks more content companies will release statements.  I would like to see a content provider like Vonage, Netflix, or Disney chide in the debate.  If these companies realize how differentiated services can allow them to compete and create new content delivery models, then the political opposition groups will not have much ground to stand on.

Technorati Tags: FCC,Google,Verizon (VZ),broadband,differentiated services,net neutrality,politics,wireless

The FCC Has Recognized the Need for Differentiated Services

Last week the FCC published its’ report on U.S. broadband Internet usage entitled Broadband Performance: OBI Technical Report No. 4.  The press chose to report on the sensational claim in the Executive Summary that actual measured bandwidth was half of the advertised bandwidth.  If they would have taken the time to read past the Executive Summary or not copy the other articles written about the report, they would have noticed that the report supports Quality of Service (QOS);  thereby, implicitly endorsing differentiated services.  They even dedicated Appendix 3 to a cursory discussion of QOS.

In Section I, the concept of QOS is first mentioned when profiling the different types of traffic users download.  In the quote below, The FCC states that high definition video needs bandwidth and QOS.

At the high end of the range, an application such as enhanced high definition (HD) video teleconferencing could require 5–10 Mbps, or more along with significant quality of service (QOS) performance (see Exhibit 9, where “Symm.”—short for symmetrical—indicates that the download speed is also required for upstream traffic).

In the next paragraph they reveal the other parameters that are required for HD video conferencing.

Download speeds are only one measure of broadband performance.
For example, HD quality videoconferencing requires very fast upload speeds to allow a person to transmit her image and voice while simultaneously receiving the image and voice of another person. In addition to upload and download speeds, measures of QOS such as availability, latency and jitter (variation in latency among different packets) may be important. Some applications, like e-mail or text-based Web surfing, are generally insensitive to these other measures of network performance, but for other applications, such as videoconferencing, these measures may be important (see Exhibit 10).

These statements introduce the reader to the concept that bandwidth alone may not be sufficient for certain types of services.  Later in Exhibits 9 and 10, services are classified by their need to be experienced immediately along with the need for QOS to determine user experience.  The FCC is unequivocally stating that all bits are not created equal.  They identify real-time and near-real-time traffic as needing lower packet loss, latency, and jitter from typical web browsing or e-mail reading.  The FCC’s quiet endorsement of differentiated services came in the beginning of Section III by stating:

The NBP therefore relies on a National Broadband Availability Target defined in terms of quantified download and upload speeds, with qualitative reference to a QOS consistent with the delivery of voice and video applications.

Perhaps the reason why the FCC was dragging their feet on net neutrality regulation was that internally they actually support differentiated services.They realize that it can improve overall user Internet experience and provide real competition to the incumbents.  By letting Google and Verizon publish their principles of net neutrality, they let those two take the flack for supporting differentiated services instead of staff having to deal with the political fallout.  Whatever the reason, I am glad that the bureaucrats recognize how the application of QOS will benefit the Internet.  Too bad the press missed it. 

Technorati Tags: broadband,differentiated services,FCC,Google,Internet,ISP,telecommunications,Verizon (VZ),QOS

True Progress on Net Neutrality from Verizon and Google

Monday Google and Verizon released their joint framework for an open Internet.  While the press and digiratti expressed their outrage that two leaders in the industry too the initiative to make a proposal, it was a major step forward in reaching consensus by the largest access and content providers.  Condemnation was generally universal from expected sources like Wired, This Week in Tech, the George Soros funded MoveOn.org, the technical press in general, FCC, and even the Wall Street Journal.  Other carriers, such as AT&T and  Level 3, were generally timid in their acceptance of the progress.  The reasons for the condemnation were varied and often overstated.  Most of the denunciation resulted from a lack of knowledge in how the Internet and telecommunications networks work.  This ignorance causes fear that results in calls for government intervention even though there is yet to be a problem.

Presently all Internet traffic is classified as a “best-effort” service.  That means that all packets travel independently through the Internet with no preferences given to them.  The packets are not even guaranteed to arrive at their destination if there is congestion at network nodes which is why TCP was invented to tell the sender to resend lost packets.  The truth is that most non-business Internet traffic uses the same equipment and bandwidth as business services that are already prioritized.  Carriers may already be slightly delaying best-effort Internet when their router becomes congested with business services.  Therefore, the concept of “all packets being equal” is already a misnomer.  Even content providers like Google prioritize their internal traffic over Gmail sessions or search queries when they may be comingled. Carriers have been selling “differentiated” services to businesses for several years to ensure the quality of video and voice traffic over e-mail, web browsing, and other applications that are tolerant to a few hundreds of milliseconds delay.  It is about time that residential users have access to those same capabilities if innovative services like Over-the-Top Video (Hulu Plus, Netflix, etc.) and VoIP are going to compete with Cable TV and “digital phone services."

Several articles prophesized that the introduction of differentiated services would create two Internets because carriers would dedicate almost all of their bandwidth to the more profitable differentiated services or split networks.  This statement is false because operating parallel networks is not an economically viable solution.  Duplicating equipment would drive the costs up of all services.  In reality network operators are always trying to converge their networks to a single network for economies of scale.  We are reaching the 1950’s goal of the Bell System that all services will ride over a single network.  The Internet Protocol (IP) and inexpensive Ethernet has made that goal possible.  Carriers are increasingly migrating their network to IP to yield both capital and operational cost savings.  As these networks merge, Internet access will ride right along with the voice and video services also offered by the carriers.  Services like FiOS, U-Verse, and Xfinity are based on this shared network concept.  Carriers of these services dedicate bandwidth to each service.  If a competitor like Netflix wanted to offer a service to you they could not purchase bandwidth from Comcast, AT&T, or Verizon.  They have to do it over the Internet where their movies are subject to potential degradation through the normal course of transit.

Differentiated services would simply introduce priority bits to the traffic that may be sensitive to delay and jitter like a Netflix movie.  Best-effort traffic would continue to have no priority.  In most cases the end-user would not even know that their traffic was being delayed.  If that same end-user purchased a Hulu Plus Plus service that was differentiated, they would no longer see the excessive buffering, stopping, and block errors that they typically now see.  The result is a better Internet experience for all.  Throwing more bandwidth at an end-user does not necessarily solve the problem as Molly Wood of CBS Interactive (CNET) and others have postulated.  Routers, servers, and other transport equipment can slow down traffic if too much hits it at one time no matter how much bandwidth is available.

Net neutrality is a vague term that means different things to different people so saying someone is for or against net neutrality means nothing.  Most everyone including the carriers will agree that they want an open Internet, but what does that really mean?  Verizon and Google each have some of the Internet’s pioneers working for them, and they have the technical know-how to best evolve the Internet.  Al Gore, Ted Stevens (RIP), George Soros, Rupert Murdoch, Jason Calacanis, the FCC, and many others did not invent the Internet nor do they engineer it on a daily basis.  They should leave the engineering of it to the many companies and people that build and manage it.  The Internet Engineering Task Force (IETF) is composed of those individuals which make it a perfect body to decide the tenants of net neutrality.  The Internet is a global phenomenon because it was designed and built by these people, not bureaucrats, politicians, and do-gooders.  By deviating from that formula we risk polluting the Internet with restrictions that will stifle innovation and the entrepreneurs that net neutrality proponents are claiming to represent.  That is why I believe that this shared statement of principles should not serve as a basis for legislation by Congress or regulation by the FCC, but as a request for comment (RFC) by the IETF so the Internet can truly be left free and open globally.

Verizon and Google arrived at a major milestone by agreeing that they will not block or impede traffic/services from any particular lawful source.  Both parties agreed that network management techniques or traffic prioritization was allowed by service type and not service provider.  The implications of this agreement is that YouTube could compete against FiOS on a level playing field.  The small additional charge for a guaranteed quality of experience is well worth it.  Revenue gained would be used to continue to invest in continued Internet improvements and a better user experience.  It is a pity that the technical press does not grasp this fact.  Instead they are intent on listening to governmental organizations trying to expand their control over the Internet or third-parties spreading their socialist agenda.  None of these groups have a true financial interest in the Internet.  The astute observer will notice that true content providers (mainstream media excluded) are absent form the cacophony of descent.  Could it be that they are siding with the largest content provider in the world?  Perhaps they realize that these principles could allow them to compete with the large carriers.

Verizon and Google took the initiative to form an agreement between content provider and carrier.  The media assumes that any time private companies get together that they are doing evil.  They would be wise to keep in mind that private companies, research institutions, and universities built the internet, not the FCC or Congress.  Google and Verizon did what bureaucrats and the politicians could not do: take an initial step at defining net neutrality for wireline networks.  There are some items that could be refined a bit as other content providers and carriers come on board, and they must tackle wireless networks.  Exempting them was their biggest mistake, because they are just as an important Internet access method for many Americans.  The IETF should take this draft proposal and expand it to cover all access methods including wireless.  Global adoption by carriers and content providers is crucial so innovation and competition can continue on the Internet.

Note:  The author does not work for or compensated by Verizon, Google, or any other carrier or content provider.  These opinions and facts are based on my two plus decades of experience in the telecommunications industry.

Technorati Tags: AT&T,broadband,Comcast (CMCSA),Google,net neutrality,politics,telecommunications,YouTube,Verizon (VZ),IETF

What the 1,099 Communities Not Selected by Google by Google Should Do

The past month has been crazy ever since Google announced that they are going to build an open access fiber-based network in one or a couple communities from 50,000 to 500,000 in population.  Over 1,100 communities submitted responses to the Google Fiber for Communities Request for Information including my own Boulder and Longmont, Colorado.  Those communities took the time to thoroughly understand how broadband infrastructure could benefit their community.  So what should the 1,099 or so communities that are not selected do?  They should build the open-access broadband network anyway.

Why?  Communities that responded to the RFI realize that a broadband infrastructure will not only offer their citizens greater choice of service providers, but also provide economic growth to their community.  Studies in Europe, Asia, and North America have confirmed the benefits that will come to these communities (link and link).  Some cities conducted their own surveys asking businesses how a broadband infrastructure could benefit their business.  Boulder’s results can be found here and here.  So now that Google has stimulated this awareness of the benefits, why should a community take it on themselves to build the network?  Obviously one of the incumbent carriers will build it eventually, right?

Communities need to realize that incumbent carriers are not going to make any multi-billion dollar investments in infrastructure in the next couple of years no matter how hard they squeeze them during franchise negotiations.  Verizon has publicly announced that they have completed their FiOS buildout passing approximately 18 million homes and gathering 2.86 million TV and 3.43 million Internet subscribers.  AT&T’s U-verse service only reaches 2.1 million subscribers and it based on a FTTN architecture that only provides limited speeds.  Comcast has been the most aggressive with hitting more than 80% of its service territory with DOCSIS 3.0 by the end of the year and reclaiming spectrum for more data use via Project Calvary.  Comcast is offering speeds up to 50 Mbit/s for Internet.  The bottom line is that if you do not live in a major metropolitan areas that these providers already hit, you can only expect incremental or no improvements in service.  Most of these communities will not see Internet speeds greater than 50 Mbit/s or a choice of more than two video providers. 

The economics of building a single carrier infrastructure are not suitable for these companies to undertake.  Verizon spent $23 billion building out its FiOS network which equates to over $7,600 per subscriber.  Ivan Seidenberg, CEO, stated that they would like to achieve at least 7.2 million subscribers;  thereby, cutting the cost per subscriber in half.¹  Assuming that the company nets $50 each month per subscriber, which is generous, and that Verizon achieves its 7.2 million subscribers, it will take over 5 years to see a positive return on investment.  Investors in public companies do not want to see payback periods beyond 2 years even though the investment’s lifetime is greater than 20 years.

The economics for a open-access infrastructure are much different because there are multiple service providers utilizing the infrastructure that improve the fill rate and cash flow.  Successful open-access networks enjoy a fill rate of greater than 60%.  Some of the installation issues that plague large companies like Verizon are mitigated in municipal networks.  Smaller carriers have reduced installation costs down below $1,500 and even lower.  Just taking these two factors into account and allocating $30 per month to pay for the infrastructure moves the payback time to 5 years, and that figure does not include the revenue from any business customer that definitely improves the economics.  This article, published on the Gerson Lehrman Group site, takes a look at the economics with a smaller adoption rate but does not separate the service from the infrastructure.  They conclude that the payback time is much less.  Our company, Inphotonics Research, has more detailed case studies that indicate a payback period closer to the 5 year period factoring in all of the expenses and incomes which is far too long except for the patient investor.  On the other hand, the municipal bond investor may see a compelling investment opportunity and communities may even be able to enjoy a net positive revenue flow into their general fund.

Now that communities realize the the economics are feasible and that such a network provides numerous benefits to the community, how will they do it?  The purpose of Google’s grand experiment is to show communities how they could build their own infrastructure.  Their objective is not to build these networks in every community, but share the results so other communities could do it themselves.²  Understanding the formula will get a community started.  It does not give them the expertise to build and operate the infrastructure as well as attract service providers.  Companies exist that will assist communities to plan, build, and operate their infrastructure such as Inphotonics Research.  These companies have the relationships with appropriate industry players to make the project successful for a community.  So if you are one of the communities that does not end up selected by Google, go ahead and leverage Google’s work and build the network yourself.  You can do it with a little help.

Technorati Tags: broadband,broadband penetration,Comcast (CMCSA),AT&T,DOCSIS,FTTH,telecom,Verizon (VZ),#boulderfiber

Is The Court of Appeals Decision in Comcast v. FCC Good for Net Neutrality?

Much was written this week about the U.S. Court of Appeals for the District of Columbia’s decision against the FCC fining Comcast for blocking BitTorrent traffic in 2008.  Most of those articles missed the point of the decision and declared that the FCC cannot regulate the Internet.  This decision said one thing, and one thing only:  the FCC overstepped its enforcement authority in telling Comcast how they can manage their network.  It did not vindicate Comcast in blocking BitTorrent traffic nor say that the FCC cannot create regulations and enforce them on Internet services.  It just set a limit on where the FCC’s enforcement ends based on their past actions.  Specifically the court stated that the FCC did not have ancillary authority to regulate Comcast's network management practices.¹  It is expected that the FCC will appeal the case to the Supreme Court.²

On the surface it may appear that Comcast and other Internet Service Providers (ISP) are winners and the public is a loser.  That interpretation is not entirely accurate when you take a longer-term perspective.  The backlash from the decision may be worse than the decision itself.  The court itself made it a point to support the necessity of a free-and-open Internet as noted from this statement by the FCC:

"The court in no way disagreed with the importance of preserving a free and open Internet, nor did it close the door to other methods for achieving this important end," said FCC spokeswoman Jen Howard.³

The court’s decision prompted an immediate backlash from the press, consumer groups, and lawmakers for Congress to take action to remedy the situation.  That remedy could range from having Internet service reclassified as a telecommunications service which gives the FCC the necessary authority or a law defining “net neutrality” and other aspects to regulate the Internet.  All of them come with consequences that could restrict innovation and unfettered use of the Internet.

The FCC itself thwarted its own ability to regulate Internet services when it classified them as the less regulated Title I services.  I believe that this was the most appropriate action for them to take because it limited their authority to regulate.  If it would have kept them at a Title II service, then they would have been within their jurisdiction to regulate Comcast’s and other ISP’s traffic management techniques.  This action would have stifled innovation and the delivery of new services because the service providers would have opted for more restrictive services and information providers like Google would have had to fight it out at the FCC and courts.  If the FCC attempts to reclassify Internet access as a Title II service expect to see this type of behavior.

The alternative is to get Congress involved and have them legislate the definition of net neutrality and expand the FCC’s powers even more.  Although this may be what the EFF and other consumer advocates want, the most likely scenario is that the resulting legislation is something that nobody wants, and even could be contradictory to the principles of net neutrality.  Almost every Congressman does not understand the nuances of the issues that distinguish an application/site/service from data transmission.  I have written at length on my belief of net neutrality and the FCC has come out with a higher level statement that does not contradict my principles. 

I clearly believe that this issue should stay under the jurisdiction of the FCC and that the FCC needs to clearly define the rules of net neutrality with the hands-off approach that made the Internet what it is today.  The Congress does not have the expertise nor is it the proper forum for industry, regulators, and consumers to come together to define how to keep innovation and commerce flowing on the Internet.  The FCC needs to go through the proper rulemaking procedure so it can enforce these principles.  Service providers need the ability to manage traffic on their network to ensure a quality experience for all customers and consumers need the ability to access any lawful service over these networks equally whether they are provided by the network provider or a third-party.  The best way to achieve this balance is to have true competition in the access network.  Regulation is a last resort when there is no competition and apparently I am not alone in my opinion. 

My next article will discuss how Google is doing more to stimulate competition than  the National Broadband Plan.

Technorati Tags: bittorrent,broadband,Comcast (CMCSA),EFF,FCC,Internet,net neutrality,Sandvine,Google

Comcast Cranks Up DOCSIS 3.0

A month ago Comcast upgraded my head-end for DOCSIS 3.0.  I had some backwards compatibility problems so Comcast gave me a new DOCSIS 3.0 cable modem.  My problems went away and my bandwidth increased dramatically.

I must say that I am getting quite use to the extra bandwidth.  Windows 7 download in only a few minutes, and I enjoy the quicker upload speeds for posting pictures and blog posts.  The 3 Mbit/s upload is pretty consistent in my neighborhood.  The only time I wish I had more upstream bandwidth is when I am moving large PowerPoint files or synchronizing to the cloud. 

Having this much bandwidth exposes two deficiencies.  The first deficiency is that my home network can now be a bottleneck.  I have one 10 Mbit/s device, 2-100 Mbit/s device, a 1 GigE device with a 802.11g/n network.  My machine-to-machine transfer rate tops out at 20 Mbit/s.  The second deficiency is latency. It takes 27 ms to go round-trip to local Comcast servers.  The latency to some of the SBC approaches 100 ms which introduces echo into my VoIP calls. 

I can fix the first problem by buying a new Ethernet swtich and more GigE devices.  After all it is only money.  The second problem is not something that I can fix because after all this is a best-effort service. 

I am delighted that all of the computers and game consoles in the house has enough bandwidth to do what they want, but our phone calls still suffer from echo.  I would really like to see Comcast offer different classes of service for their High Speed Internet.

Technorati Tags: Comcast (CMCSA),cable modem,broadband,net neutrality

Taking Ownership of the Rural Network

I read two stories today that affirm my commitment that local governments should build their own network infrastructure and sell access to private service providers.  The first article from TelecomTV discusses how the two largest LEC in the U.S., AT&T (T) and Verizon (VZ), are reducing investment and even neglecting their rural networks.  Verizon’s sale of their land-line assets in rural areas to Fairpoint and Frontier are witness to their strategy.

So what are we to do?  Should the FCC reinitiate Universal Service and force the LEC to serve these smaller, less profitable markets?  Do we institute unbundling to all LEC like the second article suggests?  These heavy-handed government solutions are just taxes that produce minimal results in a marketplace that is trying to be competitive.  The best solution is to let municipalities or other local government entities build and take ownership of their infrastructure.  It is commonly done with roads, sewer, water, and electric utilities.  Why can’t we do it with telecommunications?  It is the next infrastructure.

Allowing local governments to build their own infrastructure means that they can take advantage of their long-term financing capabilities where a private corporation’s shareholders would expect a quicker payback.  The municipality in turn sells access to this network on a non-discriminatory basis to any service provider that would like to sell services.  This open access network enjoys a >65% utilization bringing down the time to a positive ROI to 5-7 years.  At that time the governmental entity starts making money.  Cash flow becomes positive in just a couple of years enabling them to build out the entire area over time.  This objective can be completed while being taxpayer neutral.

The city enjoys the increased economic benefits provided from the network and true competition from service providers.  Traditional service providers such as Verizon, AT&T, Comcast, Time Warner Cable can still provide services to the community just as they would with their single-purpose network.  Additionally new service providers can now offer services to compete with the traditional service providers.  Imagine Verizon offering FiOS in Boulder.

This approach reverses the trend from looking at a solution from the national level to the local level.  Localities are free to choose an architecture, technology, and implementation plan that suits their needs; not have one dictated to them by the FCC or some other federal agency.  Yes there are challenges to funding, planning, constructing, and operating these networks.  Subsequent articles will address those issues.

It is time for the U.S. to take a new approach to its broadband strategy and enable communities to take their destiny into their own hands.  There are already several instances where such a business model is already working in the U.S.  The problem is that many cities face legal challenges from incumbent providers trying to protect their outdated business models.  It is time for them to realize that the service is not the network.  Take a lesson from Google where their services are utilized over 3rd party networks exclusively.

If the FCC has to exert a heavy hand, let it be to abolish any restrictions preventing localities from building and operating open-access broadband infrastructure.  Private enterprise will step in and assist these communities to build these networks just as it did in the early 20th century when electrifying America.

Technorati Tags: broadband,AT&T (T),Verizon (VZ),FCC

It’s All In How You Market It: Loosing the Case for Competition

A few years back, I was working with Longmont Power and Communications (LPC) to take advantage of the fiber ring and FTTH capabilities that they have.  Longmont, Colorado is a city with a population of 100,000 just north of Boulder.  They are in an economic transition into a knowledge-based community.  Their tax base is eroding as retail shops close up to make way for the big-box stores.  Providing the community with low-cost broadband services from more than just the two incumbents would give the town a much needed economic shot in the arm.

LPC and other departments in the city saw the value in trying to utilize these virtually stranded assets unfortunately state law prevented them from taking advantage of them.  The only way to get around this law was to let the voters decide if the city should get into the telecommunications business.  At that time the political will was not there because they were embarking on another ill-fated venture for municipal Wi-Fi and the newly elected mayor was a Qwest-lifer.  I moved on.

Several months ago, RidgeviewTel in Longmont thought that they could utilize the city’s assets to provide broadband services to the community.  Much like before, they were not asking for the city to actually sell the services, but lease access to the existing fiber network so they could provide the services.  They went through the effort to have Question 2C placed on the ballot for yesterday’s election.

Big telecom and cable caught wind of the effort and started a very effective marketing campaign backed by a conservative grassroots organization.  They accurately brought up the past attempts of the city’s failed ventures, but they failed to mention that the city ended up with some very valuable assets without any taxpayer expenditures.  Also, this group failed to mention that the city is not going to be the service provider just lease the infrastructure of which will generate revenue.  They painted a picture of another government takeover of the private sector like is being proposed for healthcare. 

The voter’s bought the cleverly marketed campaign and overwhelmingly defeated the measure by 12%.  What they also bought was a loss of a third and possibly more service providers in the city that could offer a variety of voice, video, and data services in competition to Qwest and Comcast.  The City was not proposing government provided services to compete with the incumbents.  They were just going to provide non-discriminatory access to infrastructure for another company.  The secondary benefit would have been to taxpayers in the revenue that RidgeviewTel would have paid to lease the bandwidth on the network.

Although this ballot question seemed counterintuitive to voters because it asked them to let the government do something which sounds like the domain of private enterprise, it was really a vote towards keeping the status quo for a duopoly. 

The battle in Longmont will be a battle we will see time-and-time again as the federal government disperses the stimulus money to small telecom companies wanting to build broadband networks.  Some of these networks are based on a public/private partnership like was being proposed in Longmont.  My only hope is that voters in other communities are not swayed by the tactics used in Longmont.

In subsequent articles I will discuss the value of the public/private partnership as a business model for building broadband open access last-mile networks.

Technorati Tags: Longmont,Colorado,Qwest,Comcast,fiber,broadband

I’m Back

Okay, so it has been quite a while since I have last written anything on my blog.  I have lost most of my followers, but I was immersed in a start-up venture and did not have much free time to write.  It was another learning lesson where I gained some valuable experience that I will transfer into the next venture.

As many of you know, I have been intimately involved in driving fiber-based broadband networks most of my career.  Although I was always very close to the carrier in the implementation, I was always the vendor providing the equipment.  Still I gained a keen appreciation of the economics, business models, financing, architecture, operations, and services of those networks.  Now it is time for me to move to the other side, and be the person building those networks.

In the coming months, I will write articles describing the launching of this venture and the challenges that will be posed by Big Telecom.  Net Neutrality will be discussed from the perspective of who are the real friends of the consumer.  The resurrection of Palm and Sprint will be mentioned as well because I really enjoy my Palm Pre.

I hope that you choose to follow me on this journey and provide feedback and recommendations for topics.  I welcome your participation.  Thanks for sticking with me.

Technorati Tags: broadband,Sprint (S),Palm,telecom

AT&T Needs More Money

AT&T decided yesterday to increase the price of DSL service by $5 per month for subscribers that do not purchase U-verse (AT&T jacks up DSL price $5 per month | Tech news blog - CNET News.com) except in the old BellSouth territory where they promised the FCC and regulators that they would not raise prices for a certain period of time.  Apparently revenues are not increasing enough for them in their wireline and wireless businesses, and they are fearing a slowing economy.  Expect a similar price increase shortly from the cable companies in AT&T's territory.

Instead of offering some value like a speed increase, AT&T just raises the price.  There is almost no incremental cost of providing greater bandwidth because customers will not change their surfing behavior much.  Competition is suppose to create greater value for customers and lower the price; therefore, I conclude that AT&T does not have any significant competition other than MSOs.  Duopolies function similarly to monopolies in most cases.  AT&T should be finding new and innovative services to offer customers that increase their revenue.  This price increase may help AT&T's financials in the short-term only.

Lack of true competition for residential services is why the U.S. continues to lag in broadband penetration which will manifest itself in other ways throughout the economy.

Technorati tags: AT&T, broadband, DSL

80% of Americans Use the Web Daily

Happy Thanksgiving readers.

A Harris Interactive poll finds that 80% of all adult US citizens regularly use the Internet.  Almost 200 million Americans spend an average of 11 hours a week online.  The demographics of online Americans are beginning to mirror our population in general.  With broadband penetration nearing 50% of the population, a little over 30% are still using dial-up and mobile phones as a way to access the Internet.

This upward trend demonstrates the pervasiveness of the Internet in American life.  As more people have access to the Internet from multiple rooms in their homes, office, and even on-the-go, this number will increase further;  thereby, driving the need for greater bandwidth and innovative applications. 

I am writing this article from my over 65 year old mother-in-laws home connected to FiOS.  Nine percent of people in this age group are regular Internet users representing 16% of the total population.

Technorati tags: broadband, Internet

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Broadband Penetration Projected to Reach Half of U.S. Households by 2008

Parks Associates today released their estimate that the U.S. may finally reach that 50% mark for broadband penetration by the end of the year. High Speed Internet connections grew by 20% last year hitting 47% of all U.S. households. While it is good news that broadband penetration is becoming a mainstay in the American home, we still lag behind Denmark, the Netherlands, Iceland, Korea, Switzerland, Finland, Norway, Sweden, Canada, the UK and Belgium in per-capita broadband deployment. The U.S. still lags greatly in the number of fiber connections with just over 500,000 while countries like Japan have 6 million or more. Although Verizon is driving FTTH deployment in big numbers, AT&T and U S West are not contributing much. Surprisingly enough independent telephone companies and municipalities are not waiting for the telcos or cable companies. Many of them are building their own open access broadband networks like Bend, Oregon. We still have a long way to go. Remember that fiber glut we had coming out of the bubble? Funny how we do not hear much about it any more. Could be because we are exhausting it in many places.

Technorati tags: Verizon (VZ), broadband, FTTH