Congress Pushes Broadband Bill

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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.

(See full articles here, here and here.)

AFCNet Has a New Potential Buyer

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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.

(See full article here.)

Supreme Court Tosses Telco Anti-trust Suit

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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.

(See full articles here and here.)

Google Taking Interest in Wireless Spectrum

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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.

(See full articles here, here, here and here.) 

Virginia Suburb Experiencing Monopoly Headaches

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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.

(See full articles here and here.) 

Qwest "Price for Life" A Bum Deal

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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

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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?

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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.)

Charter Gets Waiver For Proprietary Set-top Boxes

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In what's bound to start a wave of "me too" from the industry as a whole, Charter Communications has obtained a waiver from the FCC to get an extra year to comply with open access rules for set-top boxes. The rules require cable providers to comply with the CableCARD standard so you can buy your own cable box or DVR and use it with any cable provider. While the rule is set to go into effect on July 1 of this year, the waiver gives Charter an extra year to work with. Any bets that other providers like Comcast, Cox and Time Warner aren't going to ask for a similar waiver?

(See full article here.) 

Cable Industry Tells Feds to Encourage Stronger Cable Monopolies

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In a move stunning only in its audacity, the National Cable & Telecommunications Association (NCTA) has demanded that the FCC be gutted and almost all cable regulation be done away with. Among the things they want killed are network neutrality, must-carry rules (which require a basic package) and a la carte channel pricing. Their claim is that increased competition has made these mandates unfair, but I can't see what competition they are referring to.

Most Americans don't have much choice beyond the cable or phone company. Many people in rural areas don't have any choices. (Even Provo, an urbanized area, is only 95% covered by either Qwest or Comcast.) It reeks of a monopolist industry trying to circle the wagons. This is an industry that has failed to understand the market. (See previous article about the industry's tanking customer satisfaction rates.) I have yet to meet anyone that wouldn't rather pick and choose their cable channels for a lower price. Some would even think about signing up as a new customer if a la carte pricing was offered.

Cable companies aren't looking out for consumers: they're looking out for cable companies. If they want something as radical as total deregulation, you can bet they have an angle they want to play to increase their monopoly power, just like with the old 1996 Telecommunications Act.

(See full articles here and here.)