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

New US "mega kill bill" would give President and DHS even more power to control the Internet

Laws like this is the reason that I am against the FCC or Congress getting involved in any regulation of the Internet especially net neutrality.  This bill, if passed, would give the President and Department of Homeland Security (DHS) sweeping powers to shut down parts and the whole Internet or even terminate specific users they deem are threats by executive fiat.  There is no Congressional oversight.  There is little definition of what IS a cyber-threat.  Once again is proves that the current Administration and Congress does not understand the Internet. 

There are several things wrong with this proposed legislation not to mention that it is probably unconstitutional without “war power” authority to go along with it.  This power would allow the Executive branch to interfere with commerce and suppress free speech.  Wasn’t this administration suppose to be “open” and “transparent?”  They are actually more totalitarian than they claimed of the previous administration. 

Next, the legislation allows continued unwarranted surveillance of “suspects” that are deemed “threats” to national security which is an extension of the Patriot Act.  Finally the legislation barely takes into account the fact that the Internet is a global network and not just a U.S. network. 

The philosophy of the bill can be summed up by Senator Joe Lieberman’s comment on CNN that the U.S. needs the same ability to shut down the Internet as China.  So it looks like the current administration and Congress is benchmarking ourselves with the Peoples’ Republic of China.  God help us all. 

The Internet is a global network for commerce, information dissemination, and communications.  There may be a need during war to manage ingress and egress to the United States, but it should not be wholly shut down.  The NSA is better equipped to understand and manage this job than DHS.  The government should recall that open communications did more to bring down Communism than anything else we did during the Cold War.

Senator Lieberman’s legislation is ill conceived and needs to be killed immediately.  This is not a partisan issue, but one of freedom and openness.  Also, there must be checks placed on the application of such a power.  It must not be given unilaterally.  Contact your Senators and urge them not to support S.3480.  When will our industry and tech community realize that as a whole the government does not really understand the Internet and any attempt to control it will have disastrous effects?

Technorati Tags: Internet,eavesdropping,net neutrality,politics,president,telecom,wiretapping,terrorism

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

Copps Is Out of Touch With FCC Staff

Michael Copps should spend more time talking to FCC staff and less time playing politician. The FCC's latest report on broadband performance recognizes and defines different service types, and they state that QOS plays a role in their performance. The FCC staff even goes as far as to recommend the use of differentiated services.
in reference to: FCC member blasts Google-Verizon plan, says it favors the rich - The Hill's Hillicon Valley (view on Google Sidewiki)

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

Why Richi Jennings Is Right About Net Neutrality

Out of the hundreds of articles written about the recent set of principles released by Google and Verizon, this article written by Richi Jennings correctly points out two reasons why the egalitarian net neutrality concept will not work.   He realizes that packet prioritization is necessary to create a good experience for all Internet users.  The Internet’s architecture has changed much from the early days when it just pushed around short notes, e-mail, file transfers, terminal sessions, and net news.  The services have increased to real-time and near real-time traffic like voice, video, instant messaging, and webcams.  The backbone has changed from cobbled together private line connections to a complex backbone connecting many different carriers with both paid and neutral peering points.  Its’ ability to adapt to the increase of users, services, and complexity is a credit to the many people that contributed to its architecture. 

One of the reasons that the Internet has been so successful and extensible has been an absence of governmental interference.  True that some countries have outlawed it or prevented access to certain types of material, but they have not meddled into its fundamental design.  If the U.S. government intervenes by not allowing companies to add new capabilities or manage their networks, then the Internet as a whole will suffer.  Every time the government creates a new law there are always unintended consequences.  This time we can see them before they happen (is that possible?).  Any carrier should not block or inhibit access to any lawful content provider.  That is/should be a basic Internet tenant.  That tenant should not exclude the classification/prioritization of traffic types as long as it is applied equally to any content provider. 

Richi is one of the few people in the technical press that has enough of a technical understanding of the Internet to acknowledge that Google’s and Verizon’s principles are a good start.  Holman W. Jenkins Jr. wrote an op-ed piece in today’s Wall Street Journal that acknowledges the need for traffic differentiation and recognizes that wireless is the true battlefield.  I wish more of the technical press was as enlightened as these two.

Why Andrew Orlowski is wrong about net neutrality - Computerworld Blogs
AT&T Sees Hope on Web Rules – Wall Street Journal
End of the Net Neut Fetish – Wall Street Journal

Technorati Tags: Google, Verizon, Computerworld, net neutrality

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

The Future of the Internet: Net Neutrality

Manish Mamidanna of Scatter Tech writes a complete argument (The Future of the Internet: Net Neutrality) on net neutrality covering the deficiencies with the ISP, but he does not make a case for legislated net neutrality. We have been living under de facto net neutrality for years. There have been almost no instances of violation except for a few cases where the appropriate legal remedies were applied. ISP in the U.S. do not block content and they allow us to use any type of equipment we wish. ISP employ traffic management when required so a few excessive users do not completely degrade access for the rest of us. There are several cases where the network becomes saturated with traffic during peak hours so users start seeing long latencies that affect voice and video. By limiting those users cranking up P2P during peak times, all users enjoy a pleasant Internet experience. The ISP are adding bandwidth to their networks but not fast enough to keep up with demand. Even if we had unlimited bandwidth, traffic management is still necessary. Access bandwidth is limited whether it is DSL, cable modem, or mobile. The place I want the ISP to innovate is in offering greater bandwidth and the ability to prioritize services. The ISP got is right that all bits are not created equal. We need to be able to say which content is more important to maximize quality of experience. I want the content providers to innovate on how content is delivered. More competition between ISP and access providers will keep the net neutral. If any legislation is required, it is to prevent any legislation blocking the building of competitive access networks. Making profits is not evil and neither ISP nor content providers should not be vilified for trying to do so. It is these profits that spur the innovation and jobs that Manish would like to see. Our economic system is based on private companies providing the products and services we need. It sounds to me like he is advocating the Venezualean economic system. Once again I go back to driving ISP competition. Two or less providers does not make a competitive market. A true free marketplace would be where there is more access competition because legislated net neutrality will actually hurt those same people Manish thinks it is trying to protect.

More Evidence That You Can't Stop That Demand for Bandwidth

VeriSign's Project Apollo to increase their root domain infrastructure to meet a surge in Internet bandwidth of 1,000 is further proof that the future demand for greater bandwidth is real. This and other empirical data is contrary to the results published in the National Broadband Plan and touted by incumbent service providers. Consumers' consumption of more digital content will only increase as they access 3D and high definition content. The tying together of the power and communications infrastructure will consume even more bandwidth. What we are missing is access to greater speeds for the connection to the consumer.

in reference to: VeriSign's goal: Bump up internet bandwidth 1,000 times | Emerging Tech | ZDNet UK (view on Google Sidewiki)

Palm Will Live On at HP

NEW VIDCAST: A Message to the Palm Developer Community from HP PC on Vimeo.

The interview of HP CTO Phil McKinney by two of Palm's developer relations team reassures Palm owners that HP will continue to invest in Palm devices and WebOS under the HP umbrella. Palm will continue to exist as a subsidiary of HP in their mobile products division and Jon Rubenstein will continue to run Palm with responsibility for WebOS. It is clear that HP has other ideas for WebOS beyond just smartphones into tablets, slates, and even printers.

HP is demonstrating their support of Palm in several ways. They have lowered barriers for developers to submit apps to the App Catalog by eliminating their $50 fee for App Catalog submission.  Now even casual developers like me may finish and submit and app.  McKinney offered to provide free Pres to the first 1,000 employees that develop WebOS apps. He said that the response was overwhelming.  They are investing in WebOS development to get it on par with Android. A new release will fully create a protected sandbox for PDK applications such as 3D gaming, and Flash is eminent.  Hopefully we will seen updated API for the phone, sound, and camera so we can have voice search, visual voicemail, Skype, and video chatting.  I would expect that GPU acceleration will be coming as well.  Ars Technia, Engadget, and other sites have rumored that HP will release a WebOS slate this fall with WebOS-enabled printers not far behind.  Let’s hope that HP leverages the Touchstone for the slate too.  HP’s CTO hinted at both items in his interview with Ben and Dion. 

One of Palm’s greatest weaknesses, due to lack of budget, has been in marketing.  After CTIA two years ago, Palm lost mind-share.  I’m sure that Palm blew a ton of money on the “spooky lady” ads, but they have not been successful in raising the visibility of the phones or WebOS.  Needless to say, Palm's marketing has been very anemic. The modest success they have enjoyed has been through mainly through the carriers that sell their phones. It is almost as if the people running the channel program were disjoint from the marketing people. Palm had the opportunity to retain mind-share before Android, and they failed to do so. Their limited number of devices and carriers at that time allowed Motorola, Google, and HTC to obtain greater visibility.  Palm has a very loyal following that they failed to capitalize except for the development community.  They failed to convert all of the Treo users to Pre and Pixi users as they left for Blackberries and iPhones.  Positioning of the Pixi was a bit off too.  Instead of pidgin-holing it as a “soccer mom” device (which it is), they needed to expand it as a starter smartphone for kids and baby-boomers that are just buying their first smart phone.  I still contend that Palm should have hired me for their marketing, but that’s another story. 

Palm restarted their marketing and awareness campaign about the time of the HP announcement.  Their $1 million Hot Apps contests are a great way to excite the development community, and their advertising is more Apple-like.  Even though the Treo market has evaporated, HP needs to win-over Blackberry users for corporate use.  HP has already started down this path by adding the Pre and Pixi to their SMB store and marketing it as a no-brains enterprise device.  The next step is to create public awareness for WebOS devices.  Think eco-system HP.  If I have a Pre then I would want the slate so my apps can run on it as well.  Now if I could take a picture on my Pre and print it directly on my WebOS printer wirelessly or make a movie on my slate and store it on my home server to watch later on the TV and simultaneously send it to YouTube, I would not even need to interact with my PC unless I wanted to edit the video.  These examples are the easy ones that can lock customers into HP products and develop that loyal following similar to Apple. 

As the largest computer manufacturer in the world, HP has the clout to be just as visible as Apple and Google. The first place to start is by winning over the geek community with demos of new WebOS features and devices.  Build that grassroots support through the geek community first then building to carrier excitement by demonstrating some of these applications through HP Labs.  Dan Hesse, CEO of Sprint, is out touting his HTC EVO as the world’s first 4G phone.  Get Verizon to really push a LTE-capable Pre2 before they get locked in to Motorola, and do the same for a couple of international carriers.  Show the vision and sell what you have today, but keep the vision based on reality that the common consumer can relate.  Let's hope that HP starts putting some of that creativity to work to demonstrate the beauty of WebOS. Now the battle for mobile OS will be interesting to watch.

in reference to: HP CTO Phil McKinney sits down with Ben and Dion | PreCentral.net (view on Google Sidewiki)

Technorati Tags: Palm,WebOS,Rubenstein,Android,Apple,Hesse,Sprint,Verizon

Elimination of Discounts May Spur Fiber Deployments

Frank Simone has a point here. Carriers utilizing these discounts are using the legacy network to boost their bottom line. Why put in fiber when they can bundle a few copper pairs to provide 10 Mbit/s at $13 per pair typically? The price hike will impact SMB the most when carriers like Covad, IP5280, and Integra Telecom boost their prices. We cannot continue to milk our copper infrastructure indefinitely. Solutions like open-access municipal networks are an alternative.

http://inphotonicsresearch.com/

in reference to: BroadbandBreakfast.com: NoChokePoints Coalition Slams AT&T for Rate Hikes (view on Google Sidewiki)

Vendors Picking Up the Slack

The shift of vendors assuming a greater responsibility started occurring when carriers started reducing costs by offering early retirement packages to their most experienced employees. This left an experience void with many carriers that the vendors filled with their employees' expertise. In reflection, the vendor community sees this as an opportunity to "partner" with their customer to deepen the relationship.

in reference to: Shifting Ground, Changing Roles (view on Google Sidewiki)

US Senate committee approves Internet close-down bill by vocal acclaim. Well, saves the fuss of a vote, doesn't it?

Leave it to a bunch of Brits to point out how we continue to circumvent our democratic system.  TelecomTV, along with many other publications, reported that the Senate has passed a bill that will allow the president to shut down the Internet in the United States for up to 120 days without any Congressional approval.  The passage of this bill occurred with no mention in the mainstream media, which is not surprising since they still view the Internet as a threat to their arcane business models.  The bill was passed with a simple voice vote despite protests from many civil libertarian groups and the fact that the majority of the public is against giving the president this level of control without any checks.  Once again it just proves that the current Administration and Congress are not in office to represent the American people and what is best for the economy.  I find it hypocritical that Joe Lieberman and Hillary Clinton publically denounce China for having that same control over the Internet that they are pushing through Congress.  Let’s hope that we can persuade the House not to pass their version of the bill.

Technorati Tags: net neutrality,EFF,politics,president,telecom

Circumventing Due Process for the New World Order

I like to keep this blog more analytical and less political, but there are times when we need to use our industry expertise to shed light on policy issues when they impact our industry.  Entertainment copyright holders for well over a decade have been seeking greater powers to stop digital piracy despite the fact that the GAO has debunked the figures the enforcers throw around on the damage to the economy.  The Motion Picture Association (MPAA) and Recording Industry Association of America (RIAA) have failed to convince Congress to pass laws stronger than the Digital Millennium Copyright Act (DMCA), so they have turned to the United Nations for help.  For the past year, a committee of the UN has been secretly working on an agreement that will hold Internet Service Providers (ISP) accountable to content copyright holders for policing the Internet. 

Courtesy Forex Video

The Anti-Counterfeiting Trade Agreement (ACTA) is being prepared secretly within the UN as a treaty to avoid scrutiny and proper vetting by country’s legislative bodies.  It has even escaped the transparency of the Obama Administration probably because they are in agreement with the principles contained in the agreement and keeping in-line with the vision of Obama and is ilk of “one world government.”  A draft of the agreement was leaked out by of all sources the EU Trade Commission.  Provisions contained in the agreement make ISP liable for damages and legal action should they not comply with blocking and take-down notices from the copyright holders.  There is no due process to ensure that copyrights are actually being violated.  The ACTA forces the ISP to be the watchdog instead of pursuing the offender directly through proper law enforcement.  This new tactic resulted from the MPAA’s and RIAA’s ineffectiveness suing copyright violators directly. 

The fact that the ACTA provides policing powers to copyright holders is scary enough but couple it with the fact that this agreement can be enacted through bypassing the democratic and legislative process in many countries is even scarier.  The United States use to be a bastion for personal privacy, freedom, and due process.  It is amazing that they are a party to the secretive and undemocratic process of ACTA.  If this event would have happened during the Bush Administration, left-wingers would have been screaming fascist.  Since it is occurring during the Obama Administration, it is hardly being mentioned.  The result is no different; private organizations are being given policing powers by circumventing national sovereignty. 

Yes piracy is illegal, but is it as damaging as industry protectors say?  No.  May it even help sales of media?  Perhaps.  Do we need to discard privacy, rule of law, and sovereignty to protect the wealth of companies?  NO.  Individual rights and freedoms are being taken away increasingly for the financial gain of other parties.  As an industry we are enabling this erosion through the use of our technology.  We need to stop it and take a stand for liberty.  The Internet and communications technology has been a great tool that has speed liberty and democracy throughout the world.  Let’s not destroy this great forum at the behest of monetary interests. 

Read More:  TelecomTV | News | Secret treaty will impose draconian US Internet-blocking legislation on rest of the world

Technorati Tags: ACTA,piracy,DMCA,MPAA,RIAA

Incumbent Carriers Use Political Muscle to Stifle Competition

Time Warner Cable and other incumbent communications carriers in the state of North Carolina are pushing for a bill that would prevent municipalities from building or even repairing broadband networks.  An article in Indy Week states that state senator David Hoyle is introducing a bill in the NC senate that would prevent municipalities from building their own broadband networks unless they spent taxpayer dollars for a referendum on the issue.  This bill is backed by Time Warner Cable, AT&T, and Embarq (CenturyLink).  I am all for transparency in government, and I believe that any use of taxpayer money should be fully vetted, but requiring an election on the issue could add more than a million dollars to the price of the network.  The resulting impact would stop most municipalities considering building their own infrastructure.  If a city was bold enough to put the issue on the ballot, such as Longmont, Colorado did in 2009, the incumbents would campaign hard to defeat the issue.  The bill is clearly aimed at erecting as many roadblocks to municipal broadband deployment as possible.  The cost of a ballot measure is equivalent to wiring at least 1,000 homes.  Please read the article then come back for the rest of my analysis.

I do not like this bill for two reasons.  The first reason is that large public corporations are using their money and political muscle to stifle potential competition from smaller companies.  We need to stop allowing big corporations from manipulating the law for their own benefit.  You would have thought we would have learned our lesson after the telecom and housing bubbles, but we did not!  Corporations continue to buy influence through PAC and other organizations.  The second reason I do not like this bill is that the incumbents are not making the investments in infrastructure to remain globally competitive.  Structurally they cannot make these investments and provide a decent ROI to their shareholders.  Municipalities are realizing this fact which is why they are pursuing building of these networks themselves.

This last reason is why incumbent carriers should embrace municipal broadband networks instead of fearing them.  They can leverage the long-term investment capabilities of local governments to build the infrastructure in which they can deliver their services.  Cable and telephone companies frequently refer to the cost of building these networks as reasons why they cannot offer more channels and higher speeds or greater download capacities.  By working with municipalities in the design of this open-access infrastructure, they can lease their last-mile access instead of spending the capital to build it which looks better on their balance sheets.  True they will face competition from other carriers, but they can use their size for economies of scale and innovation.  The problem is that they like the stasis that a duopoly provides. 

State and federal governments must not be swayed by the political contributions and lobbying from big telcos and cable and allow competition to flourish.  Once again we have to look to public/private partnerships to rewire America.  One hundred years ago it was cost prohibitive to wire every house so the FCC and state governments made a deal with AT&T for them to provide service to every household in return for a monopoly.  This public/private partnership gave AT&T the economies of scale to economically wire 80% of homes and rate-of-return regulation enabled them to wire the rest of them.  Now it is time to enter into new public/private partnerships to rewire America that encourages competition.  Enlightened local governments realize the benefits that an open-access broadband network brings to their community.  On one hand the process should be open and transparent so the community understands how the network will be financed and built.  It should not be cross-subsidized by other sources unless taxpayers agree.  On the other hand, governments should not be swayed by vested interests that may block competition just to preserve their own revenue sources.  Elected officials work for their constituents not the corporations.  Open-access networks can be built taxpayer neutral that can serve incumbent service providers and competing service providers alike.  We need to eliminate barriers to spur competition, not erect them.

Technorati Tags: AT&T (T),broadband penetration,Longmont,politics,Time Warner Cable,North Carolina

Why Boulder Is Ideal for 1 Gbit/s Broadband Network from Google

I started this article weeks ago before the RFI was due and never found the time to finish it.  The problem was that there was too much content to keep confined to a short article.  After looking at my draft and realizing that readers, including Google, did not want to read a 10,000 word explanation, I condensed it to a bullet list.  So here are the reasons that Google should choose Boulder, Colorado to for their Google Fiber for Communities Project:

1. 69% of our residents have bachelors’ degrees or better
2. We have the highest per capita number of software developers in the nation
3. Boulder ranks #3 in the number of inventors
4. Boulder ranks #7 in the number of entrepreneurs
5. 10% of our businesses are home-based and over 25% of people work from home
6. Home to the $100 million SmartGridCity™, the nation’s first fully integrated electricity system
7. Seven federally funded laboratories
8. University of Colorado at Boulder
9. Industries such as green energy companies, biosciences, health care, foods, clothing and footwear, outdoor and biking companies, electronics manufactures, computer companies, storage companies, defense contractors, venture capitalists, and several other industries but let’s not forget Google!
10. Silicon Flatirons Center as a center for telecom and technology debate and discussion
11. Telecom companies with several decades experience building last-mile fiber networks including working with leading edge vendors and operation of these networks
12. Many Existing facilities to support the build-out of the network
13. 96% broadband penetration so we know how to use bandwidth
14. Headquarters to a few globally known advertising, public relations, and media firms
15. More Asian restaurants per capita than San Francisco or New York

Technorati Tags: Google,Google Fiber for Communities,Boulder,#boulderfiber

CenturyTel Acquires Qwest: What’s In It for Qwest?

The unwanted step child of the Baby Bells has finally found a suitor to help it beyond its awkward years, but is this acquisition good for Qwest?  After the previous CEO’s failed attempts to sell the lumbering giant to AT&T and Verizon, CenturyTel (CTL) finally a agrees to purchase Qwest (Q) for $22.4 billion including debt.  Although this is big news for CenturyTel and Qwest, the purchase will not have any major impact on the telecommunications industry or their customers.  The transaction is rather ho-hum after thinking about it.  CenturyTel’s growth has come through acquisitions of smaller players and purchasing access lines from Ameritech and Verizon.  The previous growth spurt came through the purchase of Embarq (history).  The Qwest purchase brings it from the fourth largest local phone company to the third largest with 17 million access lines and 5 million broadband users.

The advantages to CenturyTel are obvious.  It goes from a $2.6 billion per year revenue company pre Embarq acquisition to a $20 billion per year revenue company, and it increases its presence to 37 states.  The larger jewels are Qwest’s business and government customers which will more than offset the loss of land line customers all local providers experience.  CenturyTel’s business customers are mainly small and a few regional medium sized companies.  Larger companies purchase business services from AT&T, Verizon, and other carriers.  The addition of Qwest’s business services and government customers provides new and growing revenue sources.  Additionally, combining the business assets of Embarq and Qwest make the new CenturyLink a formidable competitor to AT&T and Verizon in their territories.  Once the mergers are complete and cost savings mostly realized, expect CenturyLink to make a significant wireless purchase.  Leap Wireless comes to mind.

For Qwest the advantages are difficult to find.  Qwest is clearly the acquired party with the name changing to CenturyLink and Glen Post remaining the CEO.  Watch for other executive retirements and departures in the next few months.  CenturyTel is known for its frugality so expect it to squeeze out every penny of the announced $625 million in cost reductions from mostly the Qwest assets.  Qwest employees should expect large staff reductions in marketing, accounting, operations, and engineering.  Denver and Minneapolis will be hit the hardest.  Local telephone operations will undergo a major restructuring with activities centered in Monroe, LA.  Although no one will call Qwest an innovator, CenturyTel’s services are definitely farther on the right side of the technology adoption curve.  Expect a simplification of residential and small business services to cut costs.  Also at stake is Qwest’s relationship with DirectTV since CenturyTel uses DISH.  Many of the long-haul assets will be written down in value and retired because least 33% of Qwest’s long-haul fiber routes cannot support 80-channel DWDM.  CenturyTel will leave business and government operations will remain mostly intact because those are not duplicated by the current operations and they do not want to tamper with the revenue flow.  For shareholders, the result will be a much leaner, efficient organization with a solid cash-flow.

Consumers will be impacted by the name change and a potential switch of video providers when the DirectTV contract is up; otherwise, things will stay mostly the same.  There will be no net negative impact to Qwest customers.  On the other hand, no one should expect any new innovative services or major investments in network upgrades like fiber-to-the-home or faster Internet services until the debt load is dramatically reduced.  The combined companies are firmly entrenched in DSL and will continue delivering industry average speeds at competitive prices.  This service strategy allows them to continue to milk the profits out of the old copper in the ground to pay down on the debt.  If communities are looking for faster Internet or video competition, they need to look elsewhere.

All in all, Qwest shareholders and CenturyTel benefit the most from this acquisition.  Qwest employees not in government or business services will be impacted the most and consumers are no better or worse off. 

Related Article:  Qwest Deal Is Risky Bet for CenturyTel's Chief - WSJ.com

Technorati Tags: Qwest (Q),CenturyTel (CTL)

Telecom Pragmatics Calls Google Effort “Token”

Telecom Pragmatics recent press release and report stating that Google’s Fiber for Communities project will be just a token effort misses the objective of Google’s project.  Google has been very clear through its minimalist communications of its objectives for this project.  They want to stimulate new applications, test new deployment techniques, and drive competition beyond the current duopolies.  They do not want to become a carrier or service provider.  They do not want to get into the business of building networks.  Google simply wants to find a business model for building last-mile networks that will stimulate the deployment of ultra-high speeds at reasonable costs through competition.  Whether they will do that in one or a couple communities is still up in the air.  Google clearly states that they do not have the expertise to come up with a solution to the U.S.’s broadband deficiencies, but they are betting on the telecommunications industry and capitalism to find one.

Google is currently vetting over 1,100 RFI submissions to find the few finalists that assembled the appropriate players to test out a model for building an open-access municipal network.  Their approach is different that the bureaucratic direction of the FCC with the National Broadband Plan.  They know that they do not have all of the answers and are looking to the experts to develop some solutions.  I applaud Google in their efforts and whether they select Boulder, Colorado or not, I will support their efforts to the fullest.  Sam, Mark, and David at Telecom Pragmatics are smart guys and I know that they understand what Google is trying to accomplish.  I trust that their report fully divulges Google’s true intentions.  As a community that has been driving FTTH for two decades, we need to fully open our experiences to Google to make their little experiment a success. 

Technorati Tags: broadband penetration,Google,#boulderfiber,Boulder,Google Fiber for Communities,Telecom Pratmatics

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