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Telecom Policy

Dave's note to the planners
Tuesday, 23 February 2010 03:38
I believe strongly in open process, so I'm posting this on DSL Prime although it is far too rough to be an article. A leader on the broadband plan asked me "So what would you do/" Working as fast as I could, I brought together some of the possibilities. I've had no specific reply other than "some are in the works, others wrong, and I wish I had enough time to chat."

The most important five things I see are
  • bringing down rural backhaul, which has a huge impact on cost to community anchor institutions, local competition,  and even wireless for the last 5%. A rebutable presumption of market failure if local bandwidth prices are three times  the national average seems worth fighting for. There's a record, an opening proceeding, and Sharon's expert tells me you have clear statutory authority  Because only a few percent of the country is involved, the total cost isn't that much and probably less than the office building part of special access.
  • getting the real costs studies on USF/ICC and making it all explicit USF (Huge dollars. I bet a tough auditor could find $5B with a few sensible rule changes, good enforcement and sunshine.
  • Directly eliminating low-priority/wasteful things in USF. I'd start by going back to your original purpose - internet to classrooms - and phase out the amazing high spending on things like Centrex phones. I'd put everything substantial out for bidding, with no bars on bidders. (Let WISPs serve local schools with 10 and 100 megabit microwave), and allow opt-in to any government (including federal) contract where it saves money. Note that #1 lowering backhaul in rural areas is big for high speed school/library/hospital connections.
  • Targeted interventions for high local broadband prices. Verizon charges $20 for basic; Frontier, $42 for similar. All but the smallest have costs within a dollar or three, but some are taking advantage of weak competition. I'd threaten a USF/ICC cut to any carrier above 20,000 lines with DSL prices more than 30% above the national average.
  • The four million or so homes with cable TV but not data are by far the cheapest way to provide better rural choices. Bringing down rural backhaul costs #1 is key here, but there are several other opportunities. Letting small cablecos access RUS loans is a good idea. Charter as of last quarter reduced 600K unserved to 500K. They plan to do more, which could give you a nice bit. There are half a million at the other big cablecos they refuse to provide me info on.
Editorial: Thank you Commissioner Clyburn
Sunday, 21 February 2010 19:16
clyburn_fall2008_320x448_pxMignon Clyburn is staying out of the limelight but providing thoughtful comments. She was particularly cogent at MMTC addressing what really affects broadband costs for poor people. There's a lot of lobbyist's lies circulating in D.C. on this, and she steered the conversation  back to important issues. She's now commented on new ex parte rules about what lobbyists and others tell the public , many of which are totally meaningless. "We discussed opinions consistent with our previous filings on the subject" is a typical comment. She now is forceful on the secrecy of most presentations to the FCC and improved disclosure rules. "I am particularly interested in receiving comments on our Notice concerning the Commission’s ex parte rules." My comment on her remarks below is simple: right on.
   "It is essential that the substance of ex parte presentations are made public in an accessible manner. This is imperative not only for purposes of judicial review, but also to encourage meaningful public participation. If we are serious about increasing transparency – and I believe each of us is – it is critical that we give the public a window into the information we receive. That window must not only illuminate exactly what was covered in those meetings, but must also be opened in a timely fashion."
  Some ex partes are very helpful. Dell and Microsoft came in to discuss computer subsidies they are likely to present as part of the plan. They brought with them One Economy and Connected Nation, who they presumably will propose to administer things.  One Economy is a non-profit that in New York is supporting good work bringing free wireless toHarlem and the South Bronx; I haven't looked at their projects in depth. 
Failure of Demand = Insulting the poor
Friday, 29 January 2010 04:36

The evidence is overwhelming that telling people why broadband is good has little or no effect. The thought that there isn't enough demand because "they just don't understand how useful broadband is" is pretty obviously a crock and an insult.

    The 30% of families who don't take broadband know what the internet is. You can't be a functioning person in our society and not have some notion the Internet is pretty important for many things. The people without broadband aren't ignorant savages in our midst. For many, there is no reason why they "need" to give phone companies $300-600/year for an internet connection. It's a lot of money and effort for something that isn't as important as other things the family needs. Too many children go to bed hungry in the richest country of the world; millions are thrown on the street every years because they can't pay the rent or the mortgage. Ask anyone who knows old folks living on social security, or a single mother just getting by. They'd welcome a net connection, perhaps, but very, very few would see their life change because they get broadband.

    It's insulting to think that poor and old people - the majority of those reasonably compos and unconnected - need middle class people to tell them what to do. That's essentially what all the "demand stimulus" programs are, except those that lower the effective cost of getting online. There's no evidence - none - that preaching has more than a very marginal effect.

US Rules for Australian Unbundling?
Thursday, 21 January 2010 20:32
Australia_by_my big blue gorillaAlthough the U.S. FCC has killed most unbundling, Primus wants the U.S. Trade Representative to demand stronger DSL unbundling rules in Australia. They are probably right on the law, although there's little reason to think the U.S. FCC will reverse the Bush-era exemptions that keep most broadband free of unbundling. Most U.S. broadband is exempted from regulation by calling it an "information service" exclusively. Obviously, it's both. The U.S. Australian "Free Trade Agreement" requires

"Each Party shall ensure that major suppliers in its territory accord suppliers of public telecommunications services of the other Party treatment no less favorable than such major suppliers accord in like circumstances to their subsidiaries, their affiliates,

High speed affordability dropped from Obama Broadband
Wednesday, 06 January 2010 12:35
I have pulled this for the moment. Someone I've known to be reliable for years tells me there are important things I am missing. I was working from NTIA/DOJ filings and other normally reliable sources, but this is someone usually very well informed.

Apologies. If you are someone active in policy, email me and I'll send you the current draft.

I have pulled this for the moment. Someone I've known to be reliable for years tells me there are important things I am missing. I was working from NTIA/DOJ filings and other normally reliable sources, but this is someone usually very well informed.

Apologies. If you are someone active in policy, email me and I'll send you the current draft.

Great Things Possible in the Plan
Sunday, 21 February 2010 23:53

The last 2-5%: Obama promised to bring broadband to all Americans, a good thing. There are about 5% of homes that can only get satellite, and these have been a prime focus for Stagg Newman, Rob Curtis, and Jim Stegeman. Early on, they (and the broadband stimulus people) discovered very few of them were in towns or areas of even a few hundred homes, natural for a new build of broadband. Most are 6 her, 20 there, and sometimes 3 on an island. there's no public information about what the plan will propose. I'd guess 1% or so will be offered the new 5-10 megabit satellite service. Where cable TV but not broadband is available, that's a cheap upgrade especially if the plan solves the backhaul ripoffs (below). Wireless will play a large role, although I don't know whether they will clear the 100 MHz or more of spectrum that would be ideal in rural areas for broadband. Look for a thoughtful move, probably tied into USF funding.


Open set top boxes: Verizon has been talking about this since 2003 but done nothing, and D.C. hasn't even been thinking about it. Put a gigE connection and a decent browser on the set top, and suddenly I can watch everything over the net. Add a USB port for expanison and ideally Linux like the Sony Playstation and the possibilities are remarkable. Cable quietly has been demonstrated that the program protection can be downloaded and done in software. That's an important breakthru, promised for many tears as part of Tru2way, etc, that should allow people to buy/build their own set top with capabilities far beyond what the company includes. Cable isn't very resistant, because customers buying their own set tops saves them a great deal of capex.

"Extending outage reporting to broadband service providers:" Good for reliability and requiring reporting identifies problems and possibly persuades teh companies to reduce them.


Ending the huge backhaul ripoffs. Bandwidth costs $5-15/megabit in most of the developed world, but rural carriers often report paying $100 & $200 even when fiber is in place and the cost of delivering that bandwidth is only a little higher than in cities. By one of the broadband plan, this is as much as 1/3rd of the problem for extreme rural carriers. The impact varies widely. For some it's the most important problem; others are lucky enough to be near a major switch point, have an efficient state coop, etc. It turns out overbuilding the existing fiber isn't the solution, because it would be brutally expensive and in most of the extreme rural areas there are so few customers even covering the opex would be tough.


. This can be very narrowly tailored,perhaps with a rebuttable presumption of market failure if local costs are more than three times the national average. Only a few percent of the country would be affected, but these are critical places for extending broadband. This turns out to be politically practical, because the backhaul costs in a few percent of the country are a fraction of the dollars involved in "apecial access" to city office buildings. It can easily be squeezed into that. http://fastnetnews.com/dslprime/42-d/2363-backhaul-3rd-of-the-problem-actually-solvable I don't know if this made the last draft, but it's so clearly true to the planning team it would be a bad mistake if it didn't/

"Ensure survivability of critical infrastructure." In particular, as half the population drops landlines it becomes critical that wireless continues working in emergencies. Most cell sites have severely limited batteries and no generators. CTIA, to their shame, is fighting the FCC in court to prevent sensible requirements. After Katrina, we all know how critical keeping the lines live can be.


"Require participating institutions to meet outcomes-based performance measures" Right on.This will immediately kill most of the "demand stimulus" programs because the results simply haven't been there. I wish it were otherwise, but most accomplish little.


"Address networks’ preparedness to deal with pandemics or incidents of high network stress/overload" To save what's comparatively pennies, many networks simply don't have sufficient reserve capacity. We're seeing that now as modest success selling iPhones is causing major problems for AT&T. They are exaggerrated but real. At least since 2003, SBC/AT&T top tech people have been warning management they are cutting capex too far. Most years, it's actually below depreciation.

All the old time engineers are afraid the cutbacks in reliability the last decade is inviting disaster. "Commercial data networks are not ubiquitous or universally reliable during emergencies" is important.


"Creating a nationwide interoperable broadband wireless public safety network" Carlos Kirjner of the plan did the post-mortem on the communications during 9/11. The belief in New York was that lives were lost because the police and fire departments had trouble communicating. This should be a no-brainer, but hasn't happened. I pay particular attention to the word "nationwide". One of the biggest gaps in broadband coverage is the last 2-3% where there are no cell towers. Erecting towers with backhaul for public safety purposes can also provide broadband wireless for the last few %.


"Improve program efficiency" Between 40% and 90% of the money in ICC/USF is wasted or corporate welfare, depending on whose figures you believe. This has all been under a veil of secrecy at USAC, NECA, and state regulators. I believe that you could save enough to give 10 megabits to all the poor in the U.S. by cutting waste, but I can't get the solid information to be sure

Coming in the U.S. Broadband Special issue
Sunday, 14 February 2010 22:36
Congressman Serrano Low Speed Lifeline "Absolutely Unacceptable"
"Is it acceptable that the proposed lifeline broadband program only offer low speeds," I asked Jose Serrano, pointing our the cable and AT&T sponsored plan runs at a tenth the regular speed. "Absolutely not!" the Congressman replied. "Our students need the highest speed possible." NCTA, the cable association, calls their plan "Adoption Plus" or "A+" but it only offers the lowest tier of service, too slow for ordinary TV quality More at http://bit.ly/a4eGXm

The Basics: By 2013, 90% covered 50 meg by land, 95% 5 meg wireless
To me, that means the broadband plan should be about availability for the last 5-10% and focus on affordability for the 90%. From the Columbia CITI study to the FCC, the crucial conclusion.
“By 2013-4, broadband service providers expect to be able to serve about 95%2 of U.S. homes with at least a low speed of wired broadband service and they expect to offer to about 90% of homes advertised speeds of 50 mbps downstream.3 Service providers expect to provide many homes with access to these higher speeds by 2011-2012.4 Wireless broadband service providers expect to offer wireless access at advertised speeds ranging up to 12 mbps downstream (but more likely 5 mbps or less due to capacity sharing) to about 94% of the population by 2013. ... a significant number of U.S. homes, perhaps five to ten million (which represent 4.5 to 9 percent of households)5, will have significantly inferior choices in broadband: most of these homes will have wireless or wired service broadband available only at speeds substantially lower than the speeds available to the rest of the country.
Nellie Kroes' weak stand on broadband almost lost EU Commisionership
Monday, 25 January 2010 23:46

nellie_kroesBroadband for all is the goal of the EU, but “the commissioner-designate didn't speak concretely on the social challenge for a guaranteed development of Internet, respecting fundamental rights and freedom of expression,” French Socialist MEP Catherine Trautmann tells Carolyn Henson. Kroes led the EU competition drive against Microsoft, so power wants her scalp.

    Austrian conservative Paul Rübig led the opposition. If the left also remained unhappy, Barroso needed to find a replacement. So Kroes went back for some private meetings, told people what they wanted to hear, and held the post.

   Kroes took strong action when she saw outrageous behavior but generally is pro-business. At her hearing, she angered even conservatives by her weak endorsement of Viviane Reding's cut of the ridiculous telco roaming charges, believing “it is up to the market to do the job.”

Kroes “I am for net neutrality.”

The consensus at the European Parliament for NN is so strong that Nellie Kroes was very clear. “I am for net neutrality. The Commission must protect it. There are many reasons to remain vigilant with regard to new threats to the net’s neutrality.” Britain's telecom regulator, Ed Richards, in practice takes the opposite opinion. He believes that competition is strong enough to prevent any issues. Matthias Kurth of Germany was also skeptical of the need for NN regulations. ISPs "shouldn't be allowed to limit the access to service or content out of commercial motivation, but only in cases of security issues and spamming", David Meyer quotes at ZDNET

Cheat sheet on the broadband plan (Draft)
Wednesday, 06 January 2010 16:53

I have pulled part of this for the moment. Someone I've known to be reliable for years tells me there are important things I am missing. I was working from NTIA/DOJ filings and other normally reliable sources, but this is someone usually very well informed. Apologies. If you are someone active in policy, email me and I'll send you the current draft. Some things I have confirmed include:

What's in

  • More spectrum. "Doubling available spectrum is practical and top of agenda for Obama's tech people." I wrote back in December, 2008. http://bit.ly/1aohhP That wasn't because of any inside leak. Kevin Werbach and Susan Crawford of the transition team had been writing on the subject for years.  Many of the suggestions in that article have been echoed in D.C. lately, but I don't know which of the many choices will make it into the final plan.
  • Some of that spectrum might be reserved for new entrants. Mexico, Canada, and France are doing this, but it's not been part of U.S. policy. Both DOJ and NTIA mentioned the idea. If that's included, it may or may not be sufficient for new competition to thrive. As it is, Sprint and T-Mobile have enough spectrum but they are falling far behind AT&T & Verizon. NTIA notes “A key question looking forward is whether emerging 'fourth generation' (4G) wireless services will have price and performance characteristics that might make them a viable alternative to wireline services for a significant number of customers.16 Although early projections from industry are encouraging, it is premature to predict when, or even whether, these wireless broadband services will provide the competitive alternatives that can benefit consumers of all services, including wireline.It remains to be seen, for example, whether WiMax and Long Term Evolution (LTE) technology services will be offered at prices and on terms (e.g., speed and quality) that make them attractive to wireline users” The experts in my broadband delphi are more certain, predicting that in 2015 wireless will substitute for between 5% and 25% of wired broadband connections. The speed/capacity limits of wireless mean it's only a partial substitute, but how partial is a very tough call.
  • Better information for consumers, which in principle can significantly improve the way any market works. This actually can be very helpful, although the details have to be constantly watched. In particular, the usual terms of service of "up to" and "might" need to be replaced with "the measured average is" and "will, no more than xxx hours/month on average. Incidentally, better information and eliminating false advertising was a theme of Kevin Martin's since 2003 and the lack of disclosure was part of the reason he disallowed Comcast's throttling. There's much more to do, however.
  • Lifeline extended to broadband,
Blind Leading the Blind
Wednesday, 30 December 2009 16:35

Ray_CharlesIn D.C. they call it "Beltway Blindness" but the affliction is common elsewhere as well. Folks - especially paid advocates - who don't know the facts about networks simply don't recognize their errors and they get repeated by others until they become common wisdom. We all make mistakes, and if honorable correct them when we discover them. So ordinary mistakes don't belong under this heading. This is about continuing errors of fact, not disagreements of opinion.  Please send me examples.

AT&T Wrong About ~Half the Broadband Unserved

"The customers who are easiest to serve already have access to broadband; the remaining unserved customers overwhelmingly live in sparsely populated, high-cost areas that cannot economically be served absent government support", from AT&T seems to make sense and similar is often said in D.C. Actually, it turns out that something like half the remaining unserved do not "live in sparsely populated, high-cost areas that cannot economically be served absent government support."  Getting this right leads to policy that would reach the unserved at billions less than the commonly estimated cost. Combined with using improved satellite for perhaps 1%, the $20B and $35B projections in the September broadband plan can easily be cut in half. So this is important.

  • Between 25% & 70% of the "unserved" do not cost prohibitively much because of sparse population but instead are hard to serve because backhaul locally is not competitive and costs 5-20 times what backhaul costs in competitive markets. I can buy transit for $5-15/megabit across several hundred U.S. cities, but some rural carriers are asked to pay $100 and even $200/megabit because there aren't competitive suppliers. This came up time and again at the FCC broadband workshops. This is not because of a shortage of fiber capacity; fiber in place can easily handle any likely increased load at very modest cost. Sometimes, this is monopoly suppliers "charging what the market will bear" when there's no effective market. Other times, the sole fiber supplier is the telco who does not want to make backhaul available to a possible competitor at a fair price.
    This is the whole "middle mile" problem so visible in D.C. these days. There are some places without fiber, but they turn out to be amazingly few. The problem is cost. As I explain elsewhere, overbuilding to create a little competition is rarely the right policy. I believe the FCC will use "special access" to get rid of the worst examples. Bringing reasonable prices for backhaul to a very narrow set of poorly served rurals is the single most important thing Jules can for rural broadband. Really.
  • Between 10% and 25% of the unserved are not "high-cost" but are held back by problems at their local carrier. Earlier this year, there were 600K probably "unserved" at Charter alone, which was in bankruptcy. So they couldn't make even ordinary upgrades. That's perhaps 10% right there, an obvious target of opportunity. There are a significant number of similar but smaller cases.
  • A substantial number of the "unserved" are on systems held back because the carrier wanted to sell them. That applies to the better part of 1M in the territory Verizon wants to spin off with Frontier, and presumably others.
  • AT&T & Verizon refuse to use well-proven modest cost technologies if they only apply to a scattered few percent of homes. They don't want the operational problem. My source on this is former AT&T CEO Ed Whitacre, who told me he was able to serve "100%" with inexpensive DSL repeaters.
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