Thursday, February 26, 2009

$.05 Cents or $183 Dollars? Hmmm?

Now that broadband funding made it into the stimulus package, we’re going to have to address a little known fact: All broadband is not created equal. Broadband is a generic word. Just like road is generic since it can mean gravel road, a two lane street, a four lane highway, or a six lane interstate. The term broadband has the same ambiguity with the difference being that most don’t have enough experience with broadband to know what questions to ask for clarification.

What are broadband characteristics and limitations? Is downloading that blurry, small screen, YouTube video the same thing as a high definition television program? It isn’t, of course. The transporting technology your carrier uses defines the quality and quantity of your voice, video, data and Internet services.

In some chosen communities, phone and cable offer the '$100 triple play', meaning that you can buy voice, TV and Internet in one package. This get’s tricky because sometimes the phone company which can’t carry television programs on its copper wire plant has a side contract with a satellite company for the video portion. And the cable company’s Internet, which can be a little faster than phone, isn’t reliable, because Internet speed varies based on how many people on your street are on line at any given time.

Stimulus package money is intended to make Internet service affordable and available to all homes and small businesses, because it’s so important for commerce, health and education based communications. Our international competitors use Internet universally on fiber lines that have unlimited capacity—transporting information at 100 Megabits (Mbps) per second, a thousand times faster than U.S. Internet at 1 Mbps. Technically, it’s all called broadband, but with 100 Mbps, you can download a video in seconds instead of the five plus hours it takes on 1 Mbps.

U.S. corporations build their own fiber networks which cost millions annually to deploy and maintain. For example, it can cost thousands per month just to connect to the phone company’s, ‘point-of-presence’ or POP, which is connectivity needed to switch signals between users. Obviously, small businesses can’t afford such expenditures.

Underserved and un-served are key terms in the stimulus package. We can simply save all the mapping money. How? By acknowledging that every one without fiber is underserved and those with dial-up Internet are un-served. That’s the whole politically incorrect truth of the matter. Only 1 million+ Americans with access to fiber have any hope of getting sufficient broadband capacity that’s competitive with what’s available overseas. And at this point, few would call existing U.S. fiber to the home service rates affordable.

The industry doesn’t advertise business Internet prices—that’s considered proprietary. Instead pricing packages are custom designed for each client. So I’ll use a personal example. Our cable company just started offering fiber service to a tiny, small business district in an upscale neighborhood—3 Mbps bidirectional Internet for $550 a month. Japan offered its 1 gigabit fiber-based Internet in October of 2008 for $51.40 per month. A G/bps is a hundred thousand times faster than 1 Mbps.

Just for comparison—that’s $183 dollars per Megabit for me in the U.S. and $.05 cents per Megabit in Japan. Or $6,600 annually for 3 Mbps, as much as I pay for renting a small office, while my Japanese counterparts pay $617 per year for 1 gigabit Internet. It’s mind boggling.

Do we care to know who can’t get 1 Mbps Internet from the phone company when copper wire can never, ever be upgraded to 1 G/bps Internet? Are we really going to subsidize the build-out of obsolete copper-based broadband and call it 21st Century infrastructure? Isn’t it time to replace copper phone and cable with fiber-to-the-premise (FTTP) networks?

Elected officials who want to do the right thing are going to remain confused as long as we, pubic-interest, folks play along with the industry game of ‘all broadband is created equal.’ It’s time to say out loud: Replace phone and cable lines with fiber, ASAP.

We know that President Eisenhower saw the German autobahns and built our nation’s interstate highways. Let’s help the Obama administration see the Japanese 1 Gigabit fiber Internet and build it here in the U.S.

Rita R. Stull 2/26/09

Friday, February 6, 2009

Fiber. Cyberbridge to Everywhere

Response to: Internet Money in Fiscal Plan: Wise or Waste?
NY Times, by David M. Herszenhorn, 2/2/09

Mr. Herszenhorn, you are frighteningly misguided in your article: “Internet Money in Fiscal Plan: Wise or Waste?” The U.S. broadband void is real. The country ranks somewhere between 15th and 20th in broadband deployment. Broadband and the Internet are not the same technology. The first rule of technology investment doesn’t happen to be the first rule of investing in broadband infrastructure.

Broadband networks simultaneously transport information generated by multiple technologies. Intertwining technology and infrastructure investment strategies is the same as using new auto investment rules for funding interstate highways.

Technology refers to Internet applications. Broadband is the transporting highway that carries Internet. In the U.S. the problem is that private industry owns the broadband highway needed to transport Internet. Private companies generate much more profit by tweaking a tad more capacity out of old copper networks, rather than investing in the next generation of fiber. Where's the profitability in deploying fiber everywhere when regulations require opening networks to competitors? Broadband investment pits private industry’s profitability against the U.S. economy’s immediate need for last-mile, fiber.

The Internet uses broadband to move bits of information from one point to another. Transporting information is measured in bits per second (bps). Only copper-based phone wires and copper-clad coaxial cables reach all homes and businesses. Copper wire can’t be upgraded to carry Internet at 100 Megabits (Mbps), or gigabits (G/bps) or terabits (T/bps).

Internet carried on phone and cable lines is dirt-road-slow (1.5 Mbps) when compared to fiber, which is thousands of times faster. San Francisco's Fiber Feasibility Study, states “Fiber represents the holy grail of communications networking, unlimited capacity, long life, and global reach.” http://www.internetctc.com

Wireless technology supports user mobility. It’s a complimentary, not an alternative broadband carrier, limited to 50 Mbps transport under the best of circumstances. Wireless speeds are enhanced when fiber is used for signal backhaul. In fact, if fiber-to-the-premise (FTTP) networks are available, wireless companies eliminate towers and use fiber to connect low profile antenna placed on light poles. Think of FTTP/Wireless as the new national interconnected broadband grid.

There’s wonderful economic news about fiber. Unlike interstate highways which destroyed the economy of many small towns, fiber networks conquer distance. The tiny town of Ten Sleep, Wyoming with 350 people put in an FTTP network. Savvy entrepreneur, CEO Kent Holiday, used FTTP to start a new international business. Eleutian Technology teaches English to Koreans over the Internet. Koreans also have FTTP networks. No one can predict the vast impact of entrepreneurial possibilities engendered by world wide, connected access to 1 G/bps Internet.

The Japanese buy 100 Mbps bidirectional, high speed Internet carried on FTTP networks for $40 a month. Americans pay $40 a month for 1 Mbps downstream Internet. No wonder ‘industry experts’ malign rural broadband investment. It's difficult to justify investments in 1 Mbps copper-wire technology that can’t be upgraded to meet 1 G/bps Internet speeds. In the 21st Century, deploying fiber is what makes sense in both rural and urban areas. Fiber is the new cyber-bridge to everywhere.

For example, fiber’s G/bps capacity is needed for medical record transport including x-rays, MRI’s and CAT-Scans. You also need fiber for distance diagnoses via bidirectional, high-definition video. Important fact to remember: all broadband is not created equal.

As to costs, deploying fiber is affordable if installed in conduits during road construction, when the pavement is open. The America Recovery and Reinvestment Act provides a once in a century opportunity to move utilities underground into conduits. If conduits are deployed in every infrastructure project during construction, costs are minimal at $5,000 per rural mile and $15,000 per urban mile. Pulling fiber through conduits costs an additional $5,000 per rural mile and $15,000 per urban mile. Pulling wire through conduits reduces the stand-alone $100,000 project cost of fiber deployment by 70%.

Conduits should be installed as part of routine road maintenance programs until all utilities are relocated underground. Imagine the additional billions of dollars in long term savings realized when FEMA funds won’t be needed to restore outages caused by fallen utility poles.

If new conduit and fiber infrastructure is municipally owned and deployed through public/private partnership, it could be funded by loans from the Infrastructure Investment program. Local governments would pay back loans from conduit occupancy fees and fiber capacity whole sale lease fees.

Phone and cable companies could instantly offer competitive television and Internet services simply by purchasing fiber capacity from local government. Complaints about open networks and slow Internet disappear with fiber’s availability. Fiber isn’t about buying a Cadillac instead of an economy car. Fiber is the highway that transports all Cadillac’s and cars.

Telecom Companies can offer new (previously impossible to imagine or afford) electronic services, and compete in an open market without investing millions in proprietary, duplicative fiber infrastructure. Universal fiber Internet service fosters profitability for existing, as well as hundreds of new, telecom companies that finally, will be able to enter the market. Though a complicated, politically contentious undertaking, revising the national telecom ownership structure is not an insurmountable task; it must be undertaken now.

Is there a precedent for integrating a new telecom highway into the economy? Yes. From 1980-1985, under a local government franchising process and stewardship, cable operators bid on and won franchises and, in five years, wired the nation’s metropolitan areas, including Washington D.C., the largest U.S. city with underground utilities.

Thirty thousand local jurisdictions in fifty states manage four million miles of road rights-of-way that house utility infrastructure. The local regulatory infrastructure is already in place. FTTP, replaces phone and cable; it’s the last broadband mile needed to connect everyone to the world economy.

FTTP networks must be owned locally to ensure that community needs are met and every one receives service at affordable rates. We already have a local, experienced public right-of-way, regulatory structure in place to manage conduits and cable. Let’s use it.

Let’s build the 21st Century nationally interconnected FTTP Network grid. Let’s save billions by moving utilities into underground conduits. There will be naysayers. Please excuse the cliché. Where there’s a will, there’s a way. And it’s way, way past time to act.

Rita Stull, President, TeleDimensions, Inc.

Response to NY Times article: http://www.nytimes.com/2009/02/03/us/politics/03broadband.html?_r=1&hp

Hooey Broadband

Response to: Does Broadband need a Stimulus? Saul Hansell

Hooey Broadband—what a great descriptor for industry sponsored broadband solutions offered to the U.S. In the past fifteen years, the rest of the world put in fiber to the premise networks while the U.S. telecom industry tweaked more capacity out of copper based wire. Today the U.S. ranks between 15th and 21st place in deploying broadband. Is the country really being asked to TRUST that 19 out of 20 homes will have broadband SOON because Comcast came up with Docsis 3 technology? What successful economy relies on ‘soon’ as a time line for delivering essential services? And what telecom engineer who isn’t being paid by the industry will tell you that the U.S. doesn’t need fiber because we have Docsis 3?

Let’s look at the real numbers. Most of us pay $40 a month for high speed 1.5-3 Mbps Internet, downstream only. Businesses pay $550 a month for a T-1 line that guarantees bidirectional 1.5 Mbps Internet. In Japan, homes and businesses pay $40 a month for bidirectional 100 Mbps Internet.

In October, 2008, Japan began upgrading universal fiber-to-the-premise (FTTP) networks to 1 G/bps for $51.40 per month. It’s no surprise to the telecom industry that fiber has unlimited capacity, long life and global reach. Fiber has a capacity of terabits per second. The industry deployed fiber backbone to curbs, nodes and neighborhoods. What’s missing is the last mile of fiber to the premises.

Why would taxpayers want to invest billions in upgrading copper based wire technology that’s rapidly approaching obsolescence? Large portions of the world already have FTTP networks. With the exception of Verizon’s FIOS (which isn’t available to competitors), the entire U.S. falls into the category of being under-served or un-served. It’s difficult to be impressed with 16 Mbps or more Internet on Docsis 3 when the rest of world is moving to 1 G/bps Internet.

When the U.S. funds any upgrading, it must be for fiber-to-the-premise (FTTP) networks. Wireless is restricted to the same upgrade levels as copper wire—with the big exception that it supports mobility. So it’s not a question of wireless instead of fiber, we need fiber AND wireless. Wireless uses fiber for signal backhaul—so it’s a complimentary, not a competitive service. It’s a good interim solution, but in the end every home and business needs access to fiber.

Yes we need broadband – but REAL broadband on fiber-to-the-premise networks owned by local government, built and operated by public/private partnerships, to guarantee universal deployment, affordability and competition. Phone, cable and competitive carriers can lease last-mile capacity from government and offer services everywhere—in urban and rural areas without investing billions in duplicative, proprietary infrastructure.

Only competition will decrease Internet costs. Only government can guarantee that businesses can buy fiber capacity at wholesale rates and everyone has access to 100 Mbps or 1 G/bps Internet or whatever greater capacity becomes the future norm. Deploying fiber universally is an expensive proposition that cannot be justified with typical business models.

The San Francisco Fiber Feasibility Study states, “The business case for FTTP. . . is not limited to such easily-quantified matters as cash flow and capital investment—rather, , , , it includes the less quantifiable financial factors, . . . economic development, small business empowerment, job creation, livability, environment protection, education, increased sales and real estate tax revenues, increased property values and other factors that measure the overall benefit of a next generation communications infrastructure such as FTTP.” http://www.internetctc.com

Fiber has so much capacity that it doesn’t make sense for the private sector to invest in infrastructure that must be shared with competitors. But the U.S. desperately needs affordable universally deployed FTTP networks now. Eighty percent of new jobs are created by small businesses and entrepreneurs—entities that work from home and small towns and store fronts and farms and poor urban communities.

The density for rural areas averages 25 homes and businesses per mile—in urban areas, the average is 100 per mile. Private entities can’t be expected to cast aside profitability to upgrade to universal fiber service and the public can’t be expected to neglect its need for competitive, affordable Internet on fiber that’s upgradeable to terabits speed.

Fiber eliminates distance barriers. You can do business in Japan and China from your farm if you have Internet that matches the capacity of your client. But if your client sends you an 80 Mb document via Internet and you can’t receive it—can you really do business?

Copper-wire technology cannot be upgraded to handle current high-speed Internet, much less support the growth of electronic broadband applications. In the Obama spirit of cooperation, let’s encourage government and the telecom industry to negotiate a new public/private partnership model. Let's institute a 21st Century telecom ownership model that respects the public need for universal, affordable FTTP networks and the industry’s need to make a profit. It’s time.

Rita R. Stull, President, TeleDimensions Inc.

Response to: http://bits.blogs.nytimes.com/2009/01/21/does-broadband-need-a-stimulus/

Psst...I'm Your Cable Company

Response to Press Coverage of State Video Franchising Laws

SSSHHH. DON’T TELL THE PUBLIC—
THEY’RE SO DUMB, THEY’LL NEVER FIGURE IT OUT.

Psst. I’m your cable company. I got your town’s cable franchise about thirty years ago—it’s the only way I could use taxpayers’ land, you know that nine feet on each side of every road. To get into the cable business, I had to pay a 5% gross revenues franchise fee and another 3% for public, education and government access. It was a ‘have-to thingy’ back then—my paying 8% of gross in fees, access channels, equipment, training staff and institutional networks—so I could win the competition to use those dumb taxpayers’ land. They wanted the access stuff for a local network—for boring programs nobody watches like small town news, kids soccer games, council meetings, emergency alerts and saving money on cop communications. Hey, you do what you gotta do to win.

Now, get this fun part. In ‘84, I got together with my buddies, before we even got towns wired. By the way, we really rocked hanging cable—passed every home in the U.S. metro areas in about five years. Pretty impressive, huh? Anyway, after all the cable deals were cut, we wrote a law for Congress that let us pass our lease costs on to subscribers. What could be better—we got Congress to make taxpayers pay us to lease their public land. We cable guys have been celebrating big time ever since. My stockholders went ballistic with joy. Hope you bought some stock.

This is how it works. We get to list our lease costs right on cable bills so it looks like a TAX. Voila, like magic we get an automatic rate increase of 5% of gross revenues annually—in perpetuity. We don’t have any competitors to speak of. We own the satellite guys, too—and we have few costs since we mostly buy our cable programs from ourselves—we keep as much as we can in house.

But the best part is our customers get mad at government for charging us to use their land. AND nobody can stop us. LOL. (Laugh Out Loud in text-ese).

In ‘92, we got Congress to pass another bill that let us put the rest of our lease costs on subscribers’ bills. Now, we get to list public, education and government access lease costs right on subscribers’ bills on top of the 5% franchise fee. Bonus: customers get even more furious at local government for raising taxes. Isn’t this fabulous?

Almost thirty years with no regulation, no land lease costs, no competition—profits through the roof—second only to oil companies. Life is good.

Fast forward to now. Get this. Digital and Internet converge—phone and cable carry the same services. So now we get in bed with the phone guys. We go state by state to pass laws that get rid of local cable franchises completely—because we’re sick and tired of dealing with those local yokels constantly whining about upgrading to fiber, rate increases, customer service, giving everyone access, yada-yada-yada. Talk about butt-in-skees.

You know what else? Those dummy governments in Europe and Asia put in fiber networks that carry 100 Mbps high-speed Internet to meet increased demand for broadband—like high definition TV. They only charge forty bucks a month for 100 Mbps Internet carried on fiber to the home. How profitable is that?

Then, these overseas governments have the nerve to force telecom companies to compete with each other. On the other hand, here in the U.S. me and my telecom buddies successfully keep government out of our business. Comparatively speaking, we spend virtually nada to upgrade our copper networks. We even got the feds to call 200 Kbps—high speed Internet which is thousands of times slower than Mbps fiber service. How sweeeeet it is.

Oh—let me tell you about our high tech financial innovations. When we do get around to upgrading copper plant for a modest investment, it carries about 5-10 Mbps Internet on a good day. AND we still charge $75 a month—twice as much as those international dummies charge for 100 Mbps AFTER the expense of putting in fiber. You tell me, what makes good business sense—$75 bucks a month for 5-10 Mbps or $40 a month for 100 Mbps? When it comes to profitability, we got it all over the aliens. AND WE CAN’T BE STOPPED. Trust me. It doesn’t get any better. Isn’t monopoly capitalism great?

I’ve heard people gripe ‘cause the U.S. is 17th in the world in broadband deployment—guys claim small high tech entrepreneurs can’t afford to come on-line and create new jobs. Oh, boo-hoo. Hey—our stockholders are happy. And we’re getting ready to merge with each other again. Just think, soon there’ll only be one U.S. telecom conglomerate—a true futuristic monolith with no competition! How 21st Century can you get? Will our stockholders be ecstatic or what?

You know, years ago, we had rural towns wanting to reduce cable rates—they actually waived franchise and access fees. The joke’s on them. We not only raised rates anyway, we kept all the fees, too—and they still can’t get high speed Internet. Ho-ho-ho—it’s Christmas every day with few access channels to show folks complaining.

Sooo, next step?—lose access. Now that’s smart business practice. Soon there’ll be no way for those access crazies to sing that old song: ‘Telecom Industry Gouges the Public.’ Let me get my violin.

Oh, and thanks, my press buddies, for carrying our water about this dynamite bill in the state legislature. As my teen would say—totally awesome. You’ve convinced my subscribers that it’s yet another tax—a double tax at that. Couldn’t have said it better myself. As we used to say in the eighties—cha-ching! I owe ya. Let’s do lunch—soon—on me—thumbs up.

Rita Stull, President, TeleDimensions, Inc.