FTTH Growth is Brisk Worldwide

While WiFi gets lots of press in the US, fiber seems to be making big splashes abroad. Countries like Lithuania, Slovenia and Norway are rolling out FTTH networks with speeds up to 1Gbps while Asia's FTTH base in Japan, Korea and Singapore is growing at a brisk pace. The number of worldwide broadband subscribers is expected to double in the next 5 years with fiber solutions comprising over 10% of those connections. Old-school pokey DSL, a technology that leverages antiquated copper networks, is expected to still be the world-wide dominator though mainly in under-developed countries that can't invest in new fiber networks.

Currently, the demand for high-speed fiber is rapidly making DSL and cable modems the new dial-up, leaving them in the dust in terms of speed, responsiveness and uptime. Users of Verizon's FIOS usually can't find anything but praise for the service and every UTOPIA and iProvo subscriber I've met is pleased as punch. Users of DSL and cable, however, usually have nothing but complaints about low speeds, poor service and unexplained outages. Them's the breaks of copper.

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Municipal WiFi Failing and Ailing

Plagued by poor signal strength, low subscriber numbers and generally botched installs, municipal WiFi is looking like the monorail of the 21st century. Most subscribers complain that not only do signals often drop or fail to get inside of their buildings, but the speeds experienced are slower than traditional DSL or cable modems. Since WiFi only supports Internet access, the investment takes many more subscribers to break even than do FTTP networks that combine voice, video and data. While some municipalities hope to boost subscribers by luring in cell phone users that can take advantage of built-in WiFi, it's a gamble that some cities just aren't willing to take.

Even with the high-profile failures and big losses reported to Wall Street, Earthlink is plunging ahead with WiFi in Philadelphia despite its uncertain future in San Francisco and cutting back on the number of projects it intends to tackle. With its dial-up business riding off into the sunset and co-branded DSL services not being widely available, you have to wonder how long the well-known ISP can continue to run in the red. 

Let that be a lesson: when you try and do something cheaply as opposed to correctly, it'll get you in the end.

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Congress Pushes Broadband Bill

In a move sure to keep cable and telco execs stocking up on Mylanta, Congress is pushing through a new broadband bill designed to improve speed, access and reporting of availability. The bill borrows from the successful Connect Kentucky program to invest more money in bringing broadband to rural and underserved areas. It also authorizes the FCC to define a Broadband 2.0 standard for connections capable of reliably delivering full-motion high-definition video and collect broadband availability data based on the more granular ZIP+4 rather than ZIP Code alone. Under the old data collection standard, even one broadband subscriber was enough to qualify the whole ZIP Code, hardly representative of availability as a whole. A consortium of tech companies has praised the bill as essential to economic growth, particularly in their industry.

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AFCNet Has a New Potential Buyer

The American Fork city council has voted unanimously to start negotiations with an Orem company to sell off their ailing municipal broadband network. Much like with the Packfront deal, Suphra would be required to upgrade the network to support triple play services and extend service to more homes than the network currently serves. Given the troubled history of the network (including some poor design decisions from the get-go), American Fork was left with few options. Council member Heidi Rodeback put it best:

Much as I love my high-speed connection to the AFCnet– in my part of town, it's reliable — I can't look the taxpayer in the eye and tell him we're leaving roads unfinished because we want to go $1 million in the red on municipal broadband.

The citizens and government officials in American Fork just don't have the stomach to fix a project plagued by a lack of purpose, subscribers and comprehensive service plans. This pretty much automatically precluded joining UTOPIA and making the small investments necessary to bring the network up to spec while automatically having contracts with 4 different service providers.

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Supreme Court Tosses Telco Anti-trust Suit

The Supreme Court has given incumbent telcos a free pass on their abuse of monopoly power by dismissing a suit alleging conspiracy to prevent competitors from offering phone and broadband services. While the legal standard for anti-trust could barely not be met, the suit does show a strong history of industry-wide collusion in not entering each other's markets and offering similar pricing and service options throughout the country in a manner similar to the similarly corrupt payday loan industry. The ruling specified that while there is strong evidence of said collusion, it doesn't pass muster with the Sherman Act. Expect telcos to more boldly hinder local competition now that they know they can more-or-less get away with it.

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Google Taking Interest in Wireless Spectrum

Google's been eyeing the upcoming auction for the 700MHz spectrum and involving itself heavily in the public debate over broadband. It seems their intent with the spectrum is to become a wholesaler of wireless access across the nation, letting companies bid against each other for the right to use the network in various markets in an AdWords-like auction. If this goes in conjunction with proposals that any network built on top of the frequency remain vendor-neutral, we may very well see Google becoming not just the gatekeeper of search but the gatekeeper of almost all wholesale wireless signals in the US. 

Is this is a good thing? On the one hand, a vendor-neutral wholesaler that builds and operates the plant encourages retailer competition, a system not unlike UTOPIA or iProvo. On the other hand, there are legitimate worries that Google could end up controlling too much of our digital lives with a potential to erode privacy. Only time will tell if Google will jump into this market and if they'll manage it in a way favorable to broadband competition.

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Virginia Suburb Experiencing Monopoly Headaches

Six years ago, a new housing development in Loudoun, VA decided to build an FTTH network as a part of their neighborhood of luxury homes. Today, they're regretting every bit of that decision. Where they went wrong was signing a 75-year contract with a no-name company that has done a poor job of providing reliable services to the point that many residents now use satellite dishes for both TV and broadband. The rub is that even if they don't use the frequently flaky service, they still shell out $150 a month in HOA fees for the service.

There's not much of a chance of firing Open Band, the company providing the services. The developer has a sweet deal in which they will maintain a majority control of the HOA for 20 years after the completion of the development, a period up to 10 times longer than standard. With the developer, Van Metre, getting tons of money from Open Band, there's almost no chance at residents being able to take action until 2028 at the earliest. It sounds like these homeowners would've been better off letting Verizon and Comcast come to town. At least then they'd have some semblance of competition.

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Qwest "Price for Life" A Bum Deal

Qwest has heavily marketed the idea of locking in the rate for pay for their DSL service, but you're left wondering if it's really that good of a deal. An in-depth look reveals that they can revoke that discounted price if you change speeds, move, change your service provider or cancel service before the end of the two-year contract. Early cancellation also brings a whopping $200 fee, though there's no word on if you have to then retroactively pay the difference for all the months of service you've already gotten, something Comcast will do if you break your contract. (I have a feeling that Qwest will try the same thing.) Considering that speeds are due to be rising substantially in the next 5 years, it seems like chaining yourself to a particular service plan is a bad deal for you but a sweet one for Qwest, a company experiencing a high churn rate as Internet users go to other companies and VoIP providers like Vonage eat away at their core business operations.

(See full article here.)

Telecommuting and IPTV Will Drive Bandwidth Requirements Higher

Our bandwidth-hungry days are far from over. With spiraling gas prices hitting most of the country, many workers are turning to telecommuting to get the job done. Pair that up with the financial benefits of telecommuting (especially with new tax incentives from Congress) and we're likely to see that trend continue. Of course, this places higher bandwidth requirements on both businesses and workers even when using low-bandwidth tech like Remote Desktop or VNC. Pulling files over a VPN on a typical cable modem is also an exercise in frustration with some larger documents taking minutes to finish transferring. Considering that a recent reports shows that Brits lose over 2.5 days a year waiting for slow websites, businesses will have more reasons to push for better bandwidth.

IPTV is also going to push bandwidth requirements much further. ABC is going to push its shows to the web as HD streams, Joost is going to be distributing for Viacom and NBC (among others) is pushing lots of video content via iTunes. Considering that HD content pushes about 80Mbps of data, it's painfully obvious that current broadband won't be cutting the mustard for distributing high-quality streaming video.

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Will Qwest Sue iProvo?

Though the threat stemming from last year's loan never materialized, there's concern that Qwest could sue Provo over the proposed loan of $1M to cover bond expenses. It all depends on where the proposed $1M loan comes from. If it's another loan from the city's electric department, it would likely not be challenged. A payment from the general fund, however, could end up being settled in court. While the city attorney thinks that such a deal is legally defensible, Mayor Billings would rather not go through the hassle.

Some good news in the tussle is that at least four companies have made proposals to start being service providers on iProvo's network and could each bring 500-1000 customers instantly as well as push MStar and Veracity to improve their customer service levels. The network will also be receiving payments from other city departments that use the network in their own offices, defraying many costs associated with its operation.

(See full article here.)