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In a National Leadership Vacuum, Local Leaders Slowly Emerge

Here's an excerpt from a February 2005 interview with FCC Commissioner Michael Copps on Why our broadband policy's still a mess (Hint: It's STILL a mess, 3 years and some change later! Copps is expressing a minority opinion - no power to change things given the current make up of the FCC).

What makes sense in terms of a national broadband policy?

I think Congress is going to have to work through that. If we are going to fix the Universal Service system, which is predicated on the idea that everybody should have access to comparable communications at comparable and reasonable prices, we have to ask, is our advanced telecommunications part of that or not? Is broadband a part of that or not? So before we start fixing every little problem with universal service I think we ought to have some kind of a philosophical or national purpose or national objective discussion about where does broadband fit in.
I think we may be probably the only industrial country on the face of God's green earth that doesn't have a national plan for broadband deployment.

And when I talk about central-infrastructure challenge, you know it seems like each generation faces an infrastructure challenge. Before the Civil War, we had infrastructure challenges and building internal improvements of highways and turnpikes and canals. After the Civil War, it was building transcontinental railroads. With the Eisenhower years, we built the national highway system. I think our (challenge) is broadband.

At the same time, the state legislature in Indiana recently shot down a bill that would impose significant restrictions on municipalities for launching their own broadband infrastructure services.

It's not an easy thing if you're the leader of a hard-pressed, cash-strapped municipality - as all of them are in this day and age - to take on additional burden of providing broadband to your people.

I think we do a grave injustice in trying to hobble municipalities. That's an entrepreneurial approach, that's an innovative approach. Why don't we encourage that instead of having bills introduced - "Oh, you can't do this because it's interfering with somebody's idea of the functioning of the marketplace." And then the marketplace is not functioning in those places.

This interview states the problem well, but there's no other way to put this, we have a de facto policy to let the duopoly cable and telecom companies provide us broadband, and we get what they give us, in essence. But that's not always enough, so we are seeing metropolitan networks emerge, ever so slowly, against great odds.

The economic opportunity cost of such policy neglect is high. This well-written, in-depth article from a year after that Copps interview (more than two years ago), Let there be Wi-Fi: broadband is the electricity of the 21st century - and much of America is being left in the dark describes the problem well.

The economic ramifications are profound. "Asians will have the first crack at developing the new commercial applications, products, services, and content of the high-speed-broadband era," writes Bleha. Already, South Korea, which leads the world in the percentage of its businesses and homes with broadband, is the number one developer of online video games - perhaps the fastest-growing industry today. What's more, societies in which broadband use is near-universal will adapt to its uses much more quickly than those where access is available only to the well-to-do few.

The countries surpassing the United States in broadband deployment did so by using a combination of public entities and private firms. The Japanese built their world-class system by ensuring "open access" to residential telephone lines, meaning competitors paid the same wholesale price to use the wires. The country is also establishing a super-fast, nationwide fiber system via a combination of tax breaks, debt guarantees and subsidies. But of particular note, the Japanese government also encouraged municipalities to build their own networks, especially in rural areas. Towns and villages willing to set up their own ultra-high-speed fiber networks received government subsidies covering approximately one-third of their costs.

Unfortunately, the United States has pursued the opposite policy. President Bush has called for "universal, affordable access for broadband technology by the year 2007," and FCC Chairman Kevin Martin claims broadband deployment is his "highest priority." But they have made no progress toward these goals; in fact, they have rewarded their corporate cronies for maintaining high prices, low speeds and lackluster innovation. Federal policies have not merely failed to correct our broadband problems, they have made them worse. Instead of encouraging competition, the FCC has allowed DSL providers and cable companies to shut out competitors by denying access to their lines. And whereas the Japanese government encourages individual towns to set up their own "Community Internet," Washington has done nothing. Fourteen states in the United States now have laws on the books restricting cities and towns from building their own high-speed Internet networks. No wonder America is falling behind its Asian competitors.

Hmm, that is a grim picture ... well, maybe it will improve in time? Not so much, I'm afraid, although there are glimmers, as noted in this article, Broadband: It's a Community Thing, written two months ago, nearly two years after the previous article. This article also focuses on FTTH, rather than Wi Fi.

Overcoming challenges

FTTH access has been mostly relegated to the larger urban and suburban communities. Looking to get a good return on their investments, service providers target communities with higher densities. Unfortunately, this leaves most rural communities without much more than a dial-up connection.

That's not saying bringing broadband into rural towns isn't fraught with challenges.

Take Minot, N.D.-based SRT Telecom. Like many independent telcos, SRT's territory spans both metro and rural areas and varied service domains (it offers everything from ADSL2+ data, voice and cable TV to wireless service).

Taking part of its name from the Souris River, one of the telco's main challenges is its diverse service territory. In its traditional metro network area, it plans to continue leveraging its existing copper plant via ADSL2+, bonding and VDSL2, while using active Ethernet-based FTTH in its rural sections.

"We have targeted FTTH in our rural areas," said Shawn Grosz, SRT's director of network technology. "I am not talking rural towns, but the very rural: out to the farmsteads where, in some cases, we have loops of 20 miles where broadband is very difficult to reach. We [serve] those customers who can't be served with fiber."

While Grosz admits carrying fiber out to these remote locations is initially expensive, SRT believes making targeted investments in both its existing copper plant and FTTH will pave a high-speed path to future services such as IPTV when ready.

Along with paving a road for future services, community-based initiatives - despite the legal challenges they face from incumbent operators who take issue with public entities providing telecom services - can become an economic attraction to local businesses.

As one of the first U.S.-based utility companies to offer FTTP services, Bristol, Va.,-based BVU Optinet was able to attract large government systems integrators such as Northrop Grumman.

What’s more, businesses with FTTP-based access are able to offer their employees more effective teleworking opportunities. Teleworking not only can reduce the amount of office space a company needs, but also cut down on automotive emissions since it reduces the amount of cars traveling on the roads. (See: Green to go for fiber)

Finally, there's this summary out today,
Cities get into the broadband business to bolster their economies, from the Wall Street Journal, reprinted in my hometown newspaper.

As a result, in most markets in the U.S. there have been only two broadband providers, one telecom and one cable company. While some countries were aggressively trying to catch up to the U.S. Internet lead, "not much changed in the U.S.," said Susan Crawford, a professor of Internet governance at the Benjamin N. Cardozo School of Law.

Change is finally starting to happen, as cable and telecom companies compete more aggressively in each other's traditional businesses. Bills are now making their way through Congress to remove the state barriers to municipalities offering broadband.

Verizon Communications Inc. is in the midst of a $23 billion project, called FiOS, to bring fiber to the homes of more than half of its 33 million customers in 28 states by 2010.

Comcast last month began boosting speeds on its network, and estimates 20 percent of its customers will have access to faster speeds by the end of the year.

Still, these ultrafast networks are destined only for certain parts of the country, such as major urban areas, at least for the foreseeable future. In large swaths of the U.S., providers consider deploying broadband less profitable.

In downtown Chattanooga, James Busch, a radiologist and medical-software entrepreneur, said when he opened his business, he couldn't find an Internet service that was fast enough. Comcast's plan was too slow, and AT&T said it would take three months to build a dedicated higher-speed connection to his business, Busch said. AT&T said it now offers small businesses a download speed of 6 megabits a second, and upload of 512 kilobits a second.

Busch's clinic consists of 10 radiologists who provide remote diagnoses for rural hospitals. Transmitting the high-resolution medical imagery often requires a very fast speed, which he said the power board's network provides.

"Information technology means a smaller country with fewer people can now do the same amount of work as a larger country," said Busch. "If we don't become more efficient, we lose our big-country advantage."

Last month, the power board raised $219 million through municipal bonds, which it said will primarily be used to upgrade its existing electrical system. The upgrade will involve laying a fiber network to create a so-called smart grid, which will allow the utility to remotely monitor and control how power is distributed, DePriest said.

As we can see from these four articles, the broadband theme has evolved over time, even as many aspects have remained constant. Where there was much focus on wireless four years ago, now there's more interest in Fiber, it seems. Economic development more than connectivity for social purposes has emerged as the driving factor for communities to get active. And applications drive the business case these days.

But resistance from incumbents remains a constant, as does the lack of national broadband policy and the absence of national leadership, or even, for that matter, any sense of urgency in the Congress or at the FCC.

Absent the activity we've seen at the local level, we would have little to rejoice in when it comes to progress on national broadband infrastructure, as the big boys would continue to move at their own pace and the US would fall ever more behind their global competitors. It's not too late, and I'm banking on a resurgence of interest in broadband infrastructure after the presidential election in the fall. Let's hope.

Posted on June 02, 2008 at 11:32 AM

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