Tag Archives: broadband stimulus

Yes, BTOP is Broken

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Geoff Daily recently took BTOP out to the woodshed over its glacial pace, poor oversight, and severe underfunding. Today, I got some personal confirmation that BTOP is likely entirely broken and won’t accomplish much, at least not on this first round.

Way back on September 17, I sent the following e-mail:

Hello,

I’m curious to know what state entity will be responsible for reviewing BTOP
applicants and applications, specifically in the state of Utah. Please
advise.

Just today, I get the following response:

Thank you for your interest in Broadband Technology Opportunity Program (BTOP). The BTOP application process encourages collaboration with the states in order to identify and fund the best possible broadband projects in America.  A representative from a state may contact an applicant to request additional information contained in the application because of the state’s interest in making a recommendation to NTIA. Promptly replying to a state’s request allows the representative to carefully consider applications before commenting to NTIA.  As a reminder, all Round 1 grant awardees will be determined by the end of the year.

Again, we appreciate your interest in the BTOP program to help bridge the technological divide and create jobs by expanding access to broadband throughout the nation.

Best Regards,
BTOP Team

There’s a few very glaring problems with what just happened here.

  1. The response is a canned form letter with no relevance whatsoever to the question asked.
  2. The response came 5 weeks after the original e-mail was sent.
  3. There is no longer an opportunity to communicate with the relevant persons at the state level because the deadline for their review has now passed.

Is this really the best that the NTIA can do? If so, I doubt we’re going to see any kind of meaningful federal effort to improve telecommunications infrastructure in this country.

Qwest's Sneaky Stimulus Play

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From reviewing the list of stimulus applicants, you’d think Qwest decided not to partake in the feeding frenzy. Think again. Instead of applying directly, Qwest chose to allow an intermediary to make the application, an intermediary that would then spend the money on Qwest infrastructure and services. I’m referring to the applications from the University of Utah.

You may think hey, what does the U plan to do with Qwest? The reality is that the application from the university was on behalf of UEN. UEN contracts with several companies to build and operate 10GbE and 1GbE links to educational facilities, but the lion’s share of the money goes to Qwest. Should the application get approval, it is nothing more than a hand-out to Qwest to build a network with taxpayer dollars and charge their normal exorbitant rates for service with no real strings attached.

I hope that whoever is reviewing NTIA applications at the state level sees right through this ruse.

Broadband Stimulus Applicants Revealed

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As of a couple of days ago, applicants for broadband stimulus funds are now listed on the NTIA’s website. Utah has a number of applicants including the University of Utah, The Utah Transit Authority, and, not surprisingly, UTOPIA.

Several rural ILECs have also gotten into the game including Emery Telecom and Manti Tele Communications. Emery is apparently looking to deploy FTTP to beef up their triple-play offerings and replace their existing HFC CATV network. The finished product would be active Ethernet like iProvo and UTOPIA with up to 1Gbps at each address served. A separate request would use FTTN and wireless to reach more remote areas. Manti, meanwhile, is looking to use WiMax to reach more remote areas that currently do not have broadband service. Both of these projects are good news for Utahns.

Ogden City has also made an application to provide broadband access to government services and underserved residents. There is also an application for what appears to be a city-wide WiFi network. Given their reluctance to join UTOPIA, it’s rather surprising that they have done an about-face on city-provided services. My best guess is that they were holding out for someone else to pay for it.

So what about UTOPIA? They made three separate applications totaling around $54M. The only thing available is a general overview, but the requests appear to be targeted at Orem, Murray, Midvale, West Valley City, Layton, and Centerville. One of them hints at using a special assessment area (SAA) to triple the impact of at least $10.5M of the money applied for. Depending on how fast NTIA can review and approve applications, we may soon know if there will be more money for UTOPIA construction in the near term.

With applicants asking for 7 times what’s available in the first round, it will be interesting to see who makes the cut.

Layton Languishing: No New UTOPIA Construction for 1-2 Years

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I received word from a reader that an engineer with Layton City has indicated that new UTOPIA construction in the city will be on hold for at least a year, possibly as long as two years. That’s right, up to two years without the men in work boots, that’s is going to retard progress. The existing fiber will be served, but new installs will now entirely depend on either developers or members of a special assessment area to foot the bill. The city blames the slow economy and lack of federal funding for the halt in construction. Given that the first tranches of broadband stimulus funding from the feds is meant for rural and underserved areas, I wouldn’t count on any federal assistance to get things moving anytime soon.

(h/t: Dan Langford)

Broadband Bytes: March 7-13, 2009

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A new study shows that broadband growth is starting to level off while a separate study claims we’re paying as much as $3 per minute for our cell phones. We’re also getting more details of the broadband stimulus package (sparse as they may be), Comcast claims to have more phone customers than Qwest (seriously!), and Google finally takes the wraps off of Grandcentral to rebrand it as Google Voice (phone operators, go ahead and wet yourselves). All that and more in this week’s Broadband Bytes!

  • Broadband is still growing, just not like it used to. With 59% of American households now on better-than-dial-up connections and a sagging economy, the broadband market is looking a lot like the cellphone market in that almost everyone who wants it has it. And how do you get the last little bits of the market? I’ll give you a hint: follow the wireless industry’s lead. They swooped in with cheap plans, pre-paid phones, and multi-line service to make sure that everyone became their customer. ISPs can do wild things like, say, offer WiFi service with fixed broadband plans.
  • How much do you pay per minute for your cellular phone? A recent survey in California says you’re paying an average of $3 per minute for your peak minutes. Even lopping off the top users takes the cost down to anywhere from $0.50 to $1.00 per minute. Granted, this study doesn’t factor in your “free” night, weekend, or in-network minutes, so take it with a grain of salt.
  • The NTIA held a kick-off meeting to discuss the upcoming broadband stimulus package, but they apparently came to the meeting without much in the way of answers. All the same, attendees were reportedly generally pleased with the kick-off and the NTIA would really like to know your opinion. The House is even thinking about rewriting USF rules to allow for the money to be spent on broadband. It’s not all sunshine, though. IPI, a “stink tank” much like The “Reason” Foundation, is trying to block any efforts to fund muni efforts. Because, you know, incumbents did such a bang-up job deploying affordable and widely available broadband.
  • Comcast says that it’s picked up enough phone customers to be the third largest phone company in the country right behind AT&T and Verizon. (Sorry Qwest, but we knew this day would come.) They’ve been very aggressive at marketing phone service (unlike Qwest), offering competitive pricing on triple-play packages (unlike Qwest), and doing a lot of work to improve their company image (three strikes; guess who’s out). Not satisfied with their current numbers, Comcast is suing the feds so they can get bigger. The FCC currently prohibits any cable operator from owning more than 30% of the national market.
  • Remember Grandcentral? You know… phone number for life, rings all of your lines, intelligent forwarding, hasn’t done anything for the last two years as Google sat on their purchase. Sound familiar? Well, Google finally unveiled Google Voice, the successor to Grandcentral. In addition to all of the other great calling features of Grandcentral, they also tossed in SMS forwarding and automatic voicemail transcription, both searchable with Google’s own search technology. They aren’t open to any new users just yet, but the feature-rich services they offer are something worth copycating. Oh yeah, and they’re going to do super-cheap international calls. Think that phone companies may be a bit edgy?
  • Sprint is moving one step closer to dumb pipe operator by hinting that despite betting the farm on WiMax via Clearwire, they haven’t ruled out using LTE in the future. Despite the impression that WiMax and LTE are day and night, the difference is more in the software than the hardware. I think Sprint is getting ahead of the curve and realizing that operating the wholesale pipe is a lot more stable than trying to please end users, a task it has proven ill-suited at handling. Given the massive vertical integration of landlines, video, fixed data, wireless, and mobile broadband from giants AT&T and Verizon, Sprint’s exit from the telco business by spinning off local operations as Embarq, and further pressure from Cox Communications, Time Warner, and Comcast as they ramp up wireless products, Sprint may have seen the writing on the wall.
  • Verizon’s big FIOS builds aren’t just benefiting dense East-coast towns. Their insatiable demand for fiber has dropped equipment prices substantively allowing smaller telcos to go fiber-to-the-home. Even Utah’s own Manti Telecommunications Company is reported to be getting in on the action. This FIOS upgrade comes Highly recommended for Verizon offers and users. With equipment costs dropping like a rock, now you just have to worry about the high cost of trenching and being obstructed by your “friendly” local incumbent.

Broadband Bytes: February 14-20, 2009

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Headlines this last week have been dominated by the DTV switch, The Pirate Bay’s trial, and a finalization of the broadband stimulus amount. There were also announcements on 4G wireless from AT&T and Verizon as well as more movement towards online video (and a big step back for Hulu). All this and more in this week’s Broadband Bytes!

Broadband Bytes: February 7-13, 2009

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Congress passed the broadband portions of the stimulus package and just barely dodged some really nasty provisions while the DTV delay looks less than crystal clear. We’ve also seen Qwest’s abuse of monopoly power to shut down a rival ISP, both good and bad economic news (including Charter’s bankruptcy) and Fairpoint’s big bucket of fail in taking over Verizon assets in rural New England. All this and more in this week’s Broadband Bytes!

Broadband Bytes: January 31-February 6, 2009

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It feels like the summer TV season as most of the news this week is reruns from last week. The DTV delay and broadband stimulus continue to dominate the news headlines. We also saw the launch of Lafayette’s fiber project, some new gadget news and more bad news from device manufacturers and SPs. All this and more in this week’s Broadband Bytes!

Broadband Bytes: January 17-23, 2009

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Just because Kevin Martin was on his way out the door doesn’t mean he couldn’t make noise on the way. The FCC started checking into Comcast’s network management practices yet again and slammed cable pricing. There’s also more talk about the broadband stimulus that just passed the house and it looks like a 4-month delay of the DTV transition is going to pass. All this and more in this week’s Broadband Bytes.

  • Just when Comcast thought it was going to catch a break on its network management processes (which, I must say, seem pretty clear and concise to me), FCC Chairman Kevin “Ma Bell fo’ Life” Martin decided to see if they were using the new system to purposefully degrade competing VoIP offerings. The allegations are that phone calls could get choppy during peak times when bandwidth demands are highest. (For what it’s worth, I haven’t noticed any problems with my Vonage phone on Comcast.) The FCC is also looking at regulating Comcast’s VoIP product like a traditional phone line since Comcast Digital Voice is being given preferrential routing treatment. Comcast has previously worked with Vonage to ensure smooth operation of the competitor’s VoIP service, I think this is a lot of smoke and not much fire, even if consumer advocates are happy to use Comcast and thier lousy customer satisfaction as a big punching bag.
  • Not to be content with just getting in another dig at Comcast, Martin gave all cable companies a special parting gift: an inquiry into video pricing and a big bag of fines. Given that prices have jumped an astronomical 122% since 1995, he might be onto something here, though I hope that satelite and IPTV competitors are included in the inquiry. (I’m looking at you, Dish, DirecTV, AT&T U-Verse and Verizon FIOS.) The complaint also cites moving channels to premium tiers and a lack of data being provided to the FCC. While cable operators are certainly complicit in rising rates because they don’t act as advocates for their subscribers (who have little to no voice in the matter), the real investigation should be into programmers who drop double-digit rate increases for channels that cable operators consider their foundation (ESPN, Disney, MTV, etc). All of this might just be Martin trying to strike back at cable operators who he believes were behind the unflattering report from Congress last month.
  • Microsoft also got into a tiff with Comcast, this time over a soured deal to use MS cable boxes. Comcast bought 500,000 boxes from MS that largely collected dust and only saw usage in Seattle, Microsoft’s backyard. Once Comcast dumped the boxes, Microsoft picked up its toys and went home. It could have had better timing; cable stocks took a real beating over the last year.
  • A House committee passed one half of the $6B broadband spending package and more details as to what to expect are starting to shape up. Network neutrality is in and so is “open access”, though what the latter means is up to the FCC. It could just be a euphamism for net neutrality, it could also include Carterphone-like “bring your own device” provisions or require an open service provider model like UTOPIA. I’m pretty sure that Michael Copps would take the more all-inclusive approach given his past positions, but Genachowski is a wildcard. The bill also strongly favors a grant and loan structure at the exclusion of tax credits, something that is upsetting both Republicans and incumbents. (Republican leadership is basically looking to gut the bill of all speed requirements, build-out requirements, net neutrality language and pretty much every other kind of accountability control.) Even advocates aren’t entirely in agreement over what provisions are the most important.

    You can read some in-depth analysis of the package from AppRising and Blandin on Broadband. And don’t forget that this is just a down payment, not a fix-all.

  • The NY Times, meanwhile, published an op-ed that a stimulus wasn’t needed. The entire thing read like pro-incumbent sock puppetry and the backlash was swift and furious. It’s one thing to be pro-incumbent, but that doesn’t mean you have to be anti-reality. That’s one of my main beefs with the Utah Taxpayers Association.
  • The delay of the DTV transition is all but assured as the Senate and House get ready to vote on a final compromise bill. The transition would be pushed back to June 12 allowing Comcast (among others) to continue to confuse TV watchers about what this means for them. The bill would still need more money for the digital converter box program for all of the procrastinators who haven’t yet picked one up. Stations still have the right to make the switch early, but I doubt many of them will take that plunge and risk losing viewers. Nielson projects that as much as 5.7% of viewers would lose access to TV signals, but that number is a sharp decline from just a month ago. (See: procrastinators.)

    Meanwhile, more voices keep wieghing in on the delay. Verizon changed its tune and now supports the delay, Qualcomm says no way, the TV tower industry isn’t in favor and Ars thinks the government should keep the original date despite botching the transition. One of the biggest concerns is rural access. While analog signals get fuzzy with interference, digital signal experience a cliff effect where the signal is either there or isn’t. Up to 20,000 residents of Hawaii may not be getting signals after that state’s switch and many in rural areas could lose signals while the FCC figures out how to extend their range.

  • Rural residents are getting shafted from another direction as big cablecos and telcos dump their less-desireable rural networks. Hawaii Telecom was one of those experiments and ended up filing for bankruptcy not that long ago. Fairpoint Communications faces the same challenges with the New England networks they have acquired from Verizon. Many of the rural networks are in desparate need of upgrades and the small companies assuming them don’t have the capital to upgrade broadband speeds or, in the case of cable operators, deploy VoIP. Powell, WY is one of those cities that got fed up with the crappy options and built their own FTTH network; it should be operating Real Soon Now(TM).
  • There’s still a lot of hold-outs who want to hang on to their dial-up or not have Internet access at all. A third of non-Internet users just aren’t interested and 19% of dial-up users wouldn’t ever switch to broadband. Price and availability, however, remain the main barrier to about half of dial-up users and about 20% of non-users. So what do we do to drop prices? That depends. A recent study suggests that wholesale rates charges by incumbents are way too high and a lack of competition often reduces your bargaining power.
  • There’s still plenty of throttling and capping news this past week. The CRTC, Canada’s equivalent of the FCC, composed a pretty comprehensive report listing who engages in throttling. Some of the companies never responded, but the largest ones are definitely doing it. Vodafone is trying a different kind of soft cap in Hungary that scales back available bandwidth to heavy users during peak times, a method similar to what Comcast does. Wave Broadband, however, is doing a really good job at illustrating how not to roll out caps. They used to do a 3GB/day limit, and now they publish a different limitation on the top-tier account with an unpublished limit on lower-lever accounts. Moral of the story? Users don’t hate caps or throttling nearly as much as they do a lack of transparency.
  • In gadget news, Verizon is rollout out a device they call Verizon Hub. It incorporates a 7-inch LCD touchscreen to sync calendars, contacts, maps and traffic directions with a wireless phone. The Hub also lets you send text messages or pop directions to your cell phone. It does not, however, integrate a femtocell. At $200 for the device and $35 per month for service, it’s hard to see how such a gadgety phone will end up catching on, especially since many consumers already can’t figure out the features on their wireless phones. Verizon is separately launching a $250 femtocell to support up to 3 CDMA calls at a time over a 5,000 square foot area. If the femtocell were integrated into the Verizon Hub, it might be a better deal.

    Separately, check out Engadget’s Netflix player shoot-out. With video streaming options becoming more of a standard feature than an exotic add-on, ISPs need to be ready to embrace and support users who choose to go Internet-only for video.

Broadband Bytes: January 1-9, 2008

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Heartburn over the pending DTV switch, CES 2009 and a local retransmission battle are the main headlines of the last week. There’s also plenty of sour economic news and a few rays of hope for providers willing to grab onto innovative ways to deliver content. And, as expected, incumbents are trying to get in on the broadband spending bonanza.

  • Now that nobody can afford to buy an HDTV and the money for DTV converter boxes is completely gone (not to mention all of the nasty digital signal gaps), politicos and lobbyist are trying to push back the digital conversion date from February 17. So far, president-elect Obama is on-board as are several former chairmen of the FCC and Consumer’s Union. Draft legislation, however, does not move the date, instead choosing to assume a DTV coupon redeption rate of 70% instead of 100%. With anywhere from 2 million to 11 million people unprepared for the digital switch in just 5 short weeks, this could end up being a big issue in the 2010 mid-term election; some folks are rightfully pointing out that with the 10-year lead on this transition, the unprepared should suck it up. A delay in switching could spell problems rolling out services on the freed-up 700MHz spectrums, including delays in LTE deployment. If you still need a DTV converter box, sign up even though the money is gone; the feds will put you on a waiting list until they have more money.
  • Ah, CES. A time of releasing all kinds of gizmos you didn’t even know you needed until you knew they existed. For instance, LG is rolling out a TV with Netflix integrated into the set. That could set a trend of more set-topless boxes that can stream video from online providers. If the sets support flash-upgradability, they could even add more providers after you’ve already purchased the set. Sony already provides a module for many of its Bravia line that add sources such as YouTube and Sports Illustrated to the set and Samsung is working on it. This will fuel the projected growth in Internet viewers who use their TV.

    Another app worth mentioning is the Pogoplug, a network device that can turn any USB hard drive into an uber-NAS. In addition to the traditional NAS functions, it will also share your files over the Internet and includes both a iPhone app and a robust API. This can easily create an app promotion campaign. Transferring gigs of stored data means even more demand for bandwidth.

  • Are you a DirecTV subscriber? You may have noticed that you no longer have access to KJZZ, the primary source of Jazz games and an exclusive source for USU and WSU games. Despite getting retransmission fees from Comcast and Dish for the previously free channel, DirecTV said the cost was too high and has been attempting to negotiate a lower rate since March. When that failed, DirecTV dropped the station. The messy fight is drawing ire from viewers and causing black eyes for both DirecTV and Larry Miller, owner of KJZZ. With ad revenues sagging, it’s no surprise that broadcasters have turned to retransmission fees as a source of additional revenue. Retransmission revenues climbing at a precipitous rate: 32% in the first 9 months of 2008 with a projected tripling by 2012. With those kinds of rate increases, more subscribers will be driving into the arms of free Internet video.
  • Broadband subscriber growth is projected to drop about 12% this year with cable gobbling up about 75% of the growth. Why, you may ask? Because DSL is much slower and next-generation broadband options are few and far between. Verizon is already unsure that it will expand past the initial 18M-home footprint for FIOS, especially since it ends up being Verizon’s biggest competitor to its shrinking DSL subscriber base. Time Warner also dropped a bombshell when it wrote off $25B worth of AOL, an asset that continues to drag the company down. Both AT&T and Verizon at looking at some poor revenue forecasts with global telecom spending to inch forward a meager 1%. Don’t cry too hard for them, however. US companies topped worldwide broadband revenues with a nearly $9B lead over second-place Japan, a country that enjoys wide-spread 100Mbps service. US companies still charge a lot more per megabit than any other first-world country.

    Clearwire can’t get away from the bad news either. Despite launching service in Portland, Chicago has been delayed until the second half of this year. Comcast had to write off a significant chunk of its investment in Clearwire and Intel is hurting from the slow adoption of WiMax as handset vendors sit this one out.

  • Qwest is already trying to get in on the broadband spending bonanza. Their proposal is to give the money to the states and let them administer it, just like they did with the Telecommunications Act of 1996 that screwed over Americans to the tune of over $200B. Unsurprisingly, they also want broadband defined as 7Mbps downloads, about what their current FTTN system can support. It’s not just the obvious industry shills we have to worry about either; sock puppets and astroturfing are going to be as rampant as they’ve ever been. Given how pooly these companies have done with broadband already, some are rightfully asking if we should give money to the same folks who created the problem in the first place, especially since we so often see rising rates. While the details of the upcoming broadband spending are up in the air, it will include spending for smart electrical grids and improvements in medical IT systems, both of which should result in big job gains. A competing idea that should be thown into the mix is using loan guarantees instead of just giving the money away. At least then we could be guaranteed some some return on investment.
  • Remember how Qwest is using FTTN upgrades to degrade ADSL service and poach customers from other ISPs? Apparently other providers think it’s a pretty good idea. AT&T decided to downgrade 2G EDGE service to make way for faster 3G service, a move that forces many to seek a new handset. That spells a lot of angry 1st gen iPhone users who paid big bucks for a device that’s already woefully outdated. AT&T and Verizon have both used delays in moving phone and DSL service as an opportunity to upsell to U-Verse or FIOS. Customers increasingly fed up with incumbents are ready to bolt and Consumer Reports recommends going with a fiber provider. Will you be there to pick them up?
  • Speaking of dirty tricks, the fallout from the dispute between Qwest and SkyWi has the latter claiming that Qwest cost the company a bunch of customers that switched to other providers. State regulators in New Mexico slammed both companies for putting their differences before the best interests of customers. New Mexico’s AG also lambasted Qwest for “unfair billing and business practices” when dealing with CLECs. (He’d better watch their northern neighbor; Qwest decided to sue Colorado when it didn’t get the rate increases it wanted.) Idaho’s PUC didn’t get involved in the matter on behalf of that state’s affected customers since SkyWi is a VoIP provider and the PUC doesn’t believe it had authority to act. Small providers would likely be eager to jump to another transport given the opportunity, especially as Qwest flexes its muscle.
  • IPv4 is rapidly running out of addresses with another 200M snapped up in 2008. Developing countries such as China, Russia and Brazil had the biggest percentage spikes with most of the new addresses being used in North America and Asia. Google had already started a migration to IPv6; you should too.
  • Comcast has flipped the switch on its new throttling system and it appears to be solid engineering as opposed to a cheap grab for more subscriber dollars. (I’m looking at you, Time Warner.) If a particular network segment is congested and you’re part of the problem, your traffic bumps to a lower priority regardless of what protocols or programs you’re using. This is much better than using forged TCP reset packets or cutting off customers for using too much of an undisclosed amount of bandwidth. They still aren’t disclosing what happens when you hit the magic 250GB cap or how exactly we’re supposed to keep track of it, but this is a step in the right direction.
  • Broadcom is now offering up 8-channel DOCSIS 3.0 bonding which should be able to support up to 320Mbps downloads. That’s all fine and dandy, though cable operators have been slowing their DOCSIS 3.0 single-channel deployments, not to mention that most of them can’t spare 8 channels as they beef up HD offerings.