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Approval of AT&T-DirecTV Merger Expected Next Week

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

WASHINGTON (Reuters) – AT&T Inc’s proposed $48.5 billion acquisition of DirecTV is expected to get U.S. regulatory approval as soon as next week, according to people familiar with the matter, a decision that will combine the country’s No. 2 wireless carrier with the largest satellite-TV provider.

The Department of Justice, which assesses whether deals violate antitrust law, has completed its review of the merger and is waiting on the Federal Communications Commission to wrap up its own, according to three people familiar with the matter.

The FCC, which reviews if deals are in public interest, is poised to approve the deal with conditions as early as next week, according to three other people familiar with the matter.

All the sources asked not to be named because they were not authorized to speak with the media. An AT&T spokeswoman and FCC spokesman declined comment. Justice Department representatives were not immediately available for comment.

AT&T’s merger with DirecTV, announced in May 2014, would create the country’s largest pay-TV company, giving DirecTV a broadband product and AT&T new avenues of growth beyond the maturing and increasingly competitive wireless service.

The deal has been expected to pass regulatory muster in contrast with the rival mega-merger between cable and Internet providers Comcast and Time Warner Cable, which was rejected in April largely over the combined companies’ reach into the broadband market.

The FCC and AT&T have been in negotiations over conditions for the merger for several weeks, the people said, adding that none of the conditions are controversial enough to break the deal.

Those conditions are expected to include assurances that both middle-class and low-income Americans have access to affordable high-speed Internet, including an offering of broadband subscriptions as a standalone service without a TV bundle, according to two of the people.

AT&T has earlier committed to expand access to broadband service in rural areas and to offer standalone Internet service at speeds of at least 6 Megabits per second to ensure consumers can access rival video services online, such as Netflix.

FCC officials are also considering ways to ensure that the conditions are properly enforced in the future, possibly through a third-party monitor, according to the two sources.

The FCC is also weighing how to ensure the merged companies abide by the so-called net neutrality rules, which regulate how Internet service providers manage traffic on their networks.

AT&T has promised to abide by net neutrality principles such as no-blocking of traffic, but is challenging in court the FCC’s newest net neutrality regulations that have expanded the agency’s authority over various deals between Internet providers and content companies.

FCC reviewers are weighing what net neutrality-related conditions to apply to the merger and how to address the possibility that the court throws out the latest rules, the two sources said.

Reported by: Alina Selyukh and Diane Bartz

Broadband Excitement Continues in Western Mass.; Big Support for WiredWest

fiber wiredwest

WiredWest is a public co-op seeking to deliver fiber to the home broadband across western Massachusetts.

Despite the dreary drizzle, fog, and unseasonably cold weather that has plagued the northeast since last weekend, 191 residents of New Salem, Mass. crowded into a basement for the town’s annual meeting Monday night, largely with one issue in mind: better broadband.

A reporter from The Recorder noted Moderator Calvin Layton was surprised by the overwhelming vote for fiber broadband — 189 for and only one apparently against.

The town clerk for New Salem typically counts around 60 heads at such meetings, but this night was different because the community was voting to spend $1.5 million to bring broadband to a town completely ignored by Comcast and Verizon. That fact has hurt area property values and has challenged residents and business owners alike. The town is fed up with inaction by the state’s dominant phone and cable company, which has done nothing to expand access in western Massachusetts.

“Our goal is to make this broadband available to every house, not just the places that are easy to wire,” said MaryEllen Kennedy, the chair of the town’s Broadband Committee.

New Salem isn’t alone.

Monterey passed its own bond authorization with a vote of 130 to 19, becoming the 10th consecutive town to vote in favor of bringing 21st century broadband to the region. The community of Beckett followed a day later.

Phillip "There are no broadband magic ponies" Dampier

Phillip “There are no broadband magic ponies” Dampier

Residents in 16 of the 17 towns asked so far to authorize the borrowing necessary to cover their community’s share of the fiber to the home project have usually done so in overwhelming majorities. But it has not been all good news. The town of Montgomery in Hampden County voted down paying its share by just two votes. Supporters claim low voter turnout may have done the project in, at least for the time being. A call for a new vote is underway.

Perhaps the most contentious debate over WiredWest continues in the small community of Hawley, where one activist has organized opposition for the project based on its cost to the community of 347. Hawley is in the difficult position of being a small community spread out across a lot of hills and hollows.  The cost for Hawley to participate in the fiber to the home project would be around $1 million, a figure many residents decided was out of their price range. Participation in WiredWest was shot down in a recent vote and the repercussions continue to this day in the opinion pages of The Recorder as residents fire back and forth at each other, sometimes with strident personal comments.

While easy to vote down participation in WiredWest, finding an alternative for Hawley has proved difficult.

Kirby “Lark” Thwing, a member of both the town finance and communications committees, is trying to find the cheaper broadband solution advocated by Hussain Hamdan, who has led the charge against WiredWest’s fiber to the home service in Hawley.

Thwing has run headfirst into what Stop the Cap! feared he would find — the rosy budget-minded alternatives suggested as tantalizingly within reach simply are not and come at a higher price tag than one might think.

Installing a Wi-Fi tower to bring wireless Internet access to a resort park.

Installing a Wi-Fi tower to bring wireless Internet access to a resort park.

Thwing is looking at a hybrid fiber/wireless solution involving a fiber trunk line run down two well-populated roads that could support fiber service for about half the homes in Hawley and lead to at least two large wireless towers that would reach most of the rest of town. He’s also hoping Hawley would still qualify to receive its $520,000 share of broadband grant money from the Massachusetts Broadband Institute to help cover the alternative project’s costs.

If Hawley can use that money, Thwing predicts it will cover much of the construction cost of the fiber trunk line. After that, each homeowner would be expected to pay to bring fiber from the trunk line to their home, definitely not a do-it-yourself project that will cost at least several hundred dollars, not counting the cost of any inside wiring and a network interface device attached to each participating home. Residents should also expect to spend another $100 on indoor electronics including a receiver and optional router to connect broadband to their home computer and other devices.

But the expenses don’t stop there.

Thwing also has to consider the cost of the wireless towers and provisioning a wireless service to Hawley residents not immediately adjacent to the fiber trunk line. He will be asking residents if they are willing to pay an extra $25-50 a month ($300-600 a year) to pay down the debt service on the town’s two proposed wireless towers. It isn’t known if that fee would include the price of the Internet service or just the infrastructure itself.

As Thwing himself recognizes, if the total cost for the alternative approaches the $1 million the town already rejected spending on fiber to the home service for everyone, it leaves Hawley no better off.

As Stop the Cap! reported last month, we believe Hawley will soon discover the costs of the alternatives Mr. Hamdan has suggested are greater than he suspects and do not include the cost of service, billing and support. Fiber to the home remains the best solution for Hawley and the rest of a region broadband forgot. Other towns that want to believe a cheaper alternative is out there waiting to be discovered should realize if such a solution did exist, private companies would have already jumped in to offer the service. They haven’t.

At the same time, we cannot ignore there are small communities in western Massachusetts that will find it a real burden to pay the infrastructure costs of a fiber network when there are fewer residents across wide distances to share the costs.

That is why it is critical for the Federal Communications Commission to expand rural broadband funding opportunities to subsidize the cost of constructing rural broadband services in communities like Hawley.

At the very least, state officials should consider creative solutions that either spread the cost of network construction out over a longer term or further subsidizing difficult to reach areas.

There is strong evidence voters across western Massachusetts are not looking for a government handout and have more than stepped up to pay their fair share to guarantee their digital future, but some challenges can be insurmountable without the kind of help the FCC already gives to private phone companies that spend the money on delivering dismally slow DSL service. Western Massachusetts has demonstrated it can get a bigger bang for the buck with fiber to the home service — a far better use of Connect America Funds than spending millions to bring 3Mbps DSL to the rural masses.

China to Invest $177 Billion Between 2015 and 2017 to Expand Fiber/4G Wireless Broadband Across the Country

China Mobile, China United Network Communications and China Telecom will invest $177 billion to expand fiber optic service and mobile telecommunications infrastructure in China between 2015 to 2017, according to China’s Ministry of Industry and Information Technology.

At least $70 billion will be spent this year alone to add another 80 million fiber to the home connections and expand the latest generation of LTE 4G wireless Internet to more than 1.3 million cell towers and small cells that will cover almost every city in China. In contrast, providers in the United States only spend an average of $30 billion annually on all broadband technologies, only a fraction of that for fiber optic Internet services for residential customers.

miit

By the end of 2017, every household in a significant-sized Chinese city will be equipped with a minimum of 10Mbps fiber to the home broadband for around $16/mo. First tier cities will get a minimum of 30Mbps Internet speed and second tier cities will receive broadband at a guaranteed speed of at least 20Mbps. Most customers served by China Telecom in Shanghai can already buy speeds up to 200Mbps for about $43 a month.

Chinese providers intend to upgrade their wireless networks to make sure that 4G networks completely cover every urban area as well as even the most rural communities.

Fla. Utility Says Negotiations With Verizon Make It Clear Verizon Will Exit the Wireline Business Within 10 Years

FPL_logo_PMS2925A Florida utility company has told federal regulators it is certain Verizon has a plan to exit its landline and wired broadband businesses within the next ten years to become an all-wireless service provider.

Florida Power & Light argued in a regulatory filing with the Federal Communications Commission it was clear Verizon had plans to exit its wireline business after the phone company suddenly informed regulated utilities like FP&L it no longer seemed interested in fighting over pole attachment fees and pole ownership and use issues. FP&L suggests that is a radical change of heart for a company that has fought tooth and nail over issues like pole attachment fees for years.

“Verizon has made it clear it intends to be out of the wireline business within the next ten years, conveying this clear intent to regulated utilities in negotiations over joint use issues and explaining that Verizon no longer wants to be a pole owner,” FP&L wrote to federal regulators. “Indeed, the current proposed [$10.54 billion sale of Verizon facilities in Florida, Texas and California] proves this point.”

Verizon has fought repeatedly with the Florida power company over the fees it pays FP&L to attach copper and fiber cables to the power company’s poles. Verizon Florida has repeatedly accused FP&L of charging unjust fees and at one point withheld payments to the utility worth millions.

In February, the FCC dismissed Verizon’s complaint for lack of evidence in the first-ever decision in a pole attachment complaint case involving an incumbent telephone company under a joint use agreement with an electric utility. The power company accused Verizon of lying when it promised concrete benefits to consumers if the FCC reduced joint use pole attachment rates. Suddenly, Verizon no longer seems to be interested in the issue.

verizon“Verizon has not increased its efforts to deploy wireline broadband in the last three years; and there is no evidence that Verizon has used the capital saved on joint use rates for the expansion of wireline broadband,” FP&L officials write. “Indeed, all of the evidence shows that Verizon is abandoning its efforts to build out wireline broadband.”

The power company is not about to just wave goodbye to Verizon. It filed remarks opposing the sale, claiming the benefits will end up in the pockets of executives and shareholders while customers get little or nothing. FP&L wants the FCC to enforce concrete conditions that guarantee Frontier will invest in upgrades to Verizon’s network, especially in non-FiOS service areas.

FP&L added it supports forward technological progress for the benefit of consumers, but the price of that progress should not be the abandonment of wireline customers, contractual obligations, and past promises to the FCC. The utility wrote it is not opposed to Verizon becoming a fully wireless company, but it should only be allowed to do so after it ensures that “its wireline house is in order.”

As things stand today, the utility argues Verizon is looking to abdicate on its obligation to deliver universal service and is no longer interested in maintaining its wired networks. FP&L points to Verizon’s efforts in 2013 to discard damaged wired facilities in favor of Voice Link, Verizon’s wireless landline replacement, in states including New York, New Jersey, and Florida.

“There should be no doubt that Verizon’s strategy to abandon wireline service in favor of wireless service extends beyond New York and Florida and beyond storm damaged and rural areas,” argues FP&L.

The utility points to Verizon’s successful effort to relieve itself of obligations to build a statewide fiber network in New Jersey that was supposed to be complete by 2010.

“Verizon, quite simply, has failed to build out wireline broadband in New Jersey because Verizon has no interest in doing so,” said FP&L. “As the sale of wireline facilities in Florida, Texas, and California […] clearly demonstrates, Verizon obviously is no longer interested in the wireline broadband business and sees its financial future in the wireless industry.”

GOP Tries to Slash Rural Broadband Funding in Minnesota: “Wireless/Satellite Broadband is the Future!”

Garofalo

Garofalo

Outrage from Minnesota’s elected officials representing rural districts around the state has embarrassed Minnesota House Republicans into grudgingly restoring a token amount of broadband funding to help small communities get online.

Earlier this month, the GOP majority’s budget proposal completely eliminated broadband development grants, which amounted to $20 million in 2014. Republicans attacked the spending as unnecessary and a wasteful “luxury.” The money was reallocated towards promoting tourism.

Budget point man Rep. Pat Garofalo (R-Farmington) said hardwired Internet access was outdated.

“The future is wireless and satellite Internet,” Garofalo declared, adding these were better, cheaper options for rural Minnesota.

Rural Minnesota strongly disagreed.

The West Central Tribune in Willmar declared the GOP budget proposal very disappointing to everyone in rural Minnesota.

“Rural Minnesota will continue to fall behind in broadband access and, in turn, the critical factors of quality of life, education, economic opportunities, access to health care and many other positive benefits,” the newspaper wrote in an editorial.

Rural Minnesota Broadband: Nothing to write home with a quill pen about.

Rural Minnesota Broadband: Nothing to write home with a quill pen about.

“We are astonished as to why the House would ignore one of the state’s biggest economic development needs,” said Willmar City Council member Audrey Nelsen, a member of the Coalition of Greater Minnesota Cities’ board. “The lack of high-quality broadband affects communities and regions all across the state.”

“We agree,” the paper declared.

“High-speed Internet service is not a luxury, it is an absolute necessity for job and business growth,” said executive director Dan Dorman of the Greater Minnesota Partnership.

House Republicans seem intent on stomping out rural Minnesota’s digital economy. Broadband coverage in these areas is a disgrace: Kandiyohi County is third lowest in Minnesota, at only 13.18 percent, in the percentage of households with access to broadband that meets state-speed goals. Surrounding counties with low access percentages include: Chippewa at 24.47 percent, Yellow Medicine at 25.69, Swift at 30.41, Pope at 31.40 and Renville at 58.29.

In 2013, Gov. Dayton’s Broadband Task Force Report recommended a $100 million infrastructure fund to start addressing the $3.2 billion total investment needed statewide to address this issue. Garofalo seems ready to concede to an $8 million token allocation some Democrats call insulting.

Rep. Tim Mahoney said he believed 10 years of an annual $20 million investment would solve the rural broadband problem in Minnesota in a decade. The St. Paul Democrat believes with the GOP’s budget, it will take forever.

“For them to come up with $8 million is kind of ridiculous,” Mahoney said. “It’s almost a slap in the face.”

Garofalo believes AT&T and Verizon’s forthcoming home wireless broadband solutions will solve Minnesota’s broadband problems, without considering those services are expensive and tightly usage-capped. Satellite Internet is condemned by critics as costly “fraudband,” often speed-throttled and usage capped.

Fiber Internet, in Garofalo’s world view, is “yesterday’s technology,” despite ongoing investments in fiber to the home Internet around the world, including investments from companies including AT&T, Verizon, Google, and others that now offer fiber technology capable of speeds in excess of 1Gbps.

Sober assessments of the different broadband technologies available in Minnesota are already available from the state’s Office of Broadband Development. Garofalo’s budget resolves the ideological conflict between his views and theirs by eliminating the agency.

Garofalo said to save rural broadband, the state government must first kill any plan that might interfere with the private sector.

“The private sector won’t invest if it senses that the government is coming in with something else,” he said.

lousy rural

Without throwing Garofalo totally under the nearest tourist bus, House Ways and Means Committee chairman Jim Knoblach said the state needs rural broadband funding, even if other options such as wireless Internet may be a more efficient way to tackle the problem down the road.

“There are people waiting for broadband now that I think this would help,” the St. Cloud Republican said, supporting the restoration of $8 million in funding.

Google Unveils Project Fi Wireless Service: $20/Mo Voice/Text + $10/GB Data Plan That Credits Back Unused Data

google fiGoogle today unveiled their new wireless service, dubbed Project Fi, the first wireless carrier that combines the coverage of two competing cellular providers — Sprint and T-Mobile — to deliver affordable wireless service and a data plan that rebates back any unused portion of your monthly allowance. There are no term contracts, early termination fees, or overlimit penalty charges.

Google’s calling plan starts with Fi Basics for $20 per month. This includes:

  • Unlimited domestic talk and text;
  • Unlimited international texts;
  • Low-cost international calls;
  • Wi-Fi tethering;
  • Coverage in 120+ countries (Unlimited international texts are included in the plan, Cellular calls cost 20c per minute. If calling over Wi-Fi, per-minute costs vary based on which country you’re calling and you’re charged only for outbound calls.)

There is no unlimited data plan, presumably because neither T-Mobile or Sprint was willing to allow Google to offer one. Google tries to turn that into a plus by telling customers they should only pay for the data they actually use. The 2G/3G/4G data plan is $10/GB, sold in 1GB increments up to 10GB. Whatever data you do not use is converted into a cash amount credited to the following month’s bill. Instead of rolling over data, you roll over dollars. If you exceed your allowance, there are no penalty overlimit fees. Instead, you are charged $10 for an additional gigabyte of usage, with the same privilege of getting a cash credit applied to your next bill for any data you didn’t use.

Google assumes you will spend most of your time connected to Wi-Fi, where it offers free Wi-Fi calling and texting. If you lose your Wi-Fi connection, the phone will connect to either Sprint or T-Mobile’s network without losing a call in-progress. Another unique aspect of the service is that your mobile phone number lives in the cloud, so you can talk and text with your number on just about any phone, tablet or laptop using Google Hangouts.

The Nexus 6 is a real handful. It's also the only phone that will currently work on Google Fi.

The Nexus 6 is a real handful. It’s also the only phone that will work on Google Fi.

Google Project Fi relies on Sprint and T-Mobile’s combined networks to deliver coverage, trying to satisfy customers seeking Verizon or AT&T-like coverage. Google’s service seamlessly chooses Wi-Fi first, followed by Sprint or T-Mobile depending on which offers the best 4G signal at your location.

Although the service has been anticipated for some time, there are some caveats to consider before rushing to sign up.

First, you cannot sign-up immediately, you can only request an invitation. As with many other new Google projects, invitation-only service means it could be days, weeks, or even a month before you can sign-up.

Second, a view of Google’s coverage map shows Project Fi has substantially reduced dead spots, but has not eliminated them. Project Fi would likely appeal to Sprint or T-Mobile customers now frustrated by their suburban coverage. Chances are good that between the two carriers, one will deliver a robust signal even if the other does not. But rural areas have always been bypassed by both carriers and this makes Project Fi a bad choice if Sprint and T-Mobile are not good options where you live or work.

For example, much of eastern Kentucky, virtually the entire state of West Virginia, and western Virginia offer little to no 3G/4G coverage. Google Fi only promises 2G coverage in these areas, through a roaming agreement T-Mobile or Sprint has with a larger carrier.

Third, unless you already own a Nexus 6, you will be spending at least $650 to buy a new smartphone. Google will initially only support the Nexus 6 for Project Fi, because it is the only phone capable of switching between Google’s wireless partners. It comes in your choice of colors, if your choice is “Midnight Blue.” The smartphone offers two storage sizes—32GB ($649) and 64GB ($699). You can buy the Nexus 6 up front or finance your phone at 0% interest or fees for 24 months at $27.04/month for the 32GB option or $29.12/month for the 64GB option. A credit check is required for the financing option.

Fourth, there are no family plan options. Each phone is assigned to its own account. If you intend to switch your family of four, you will be dealing with four individual accounts (and a whopping $2,600 to acquire four Nexus 6 phones). Because of the invitation-only approach now in effect, it may take some time to get all of your family members up and running.

Finally, Google intends that its mobile service effectively sells itself. That means they are not offering promotions to sign up and will not pay your existing carrier to cover any early termination fees. You can port your current landline or mobile telephone number to the service. Google does not disclose any fees for doing so.

http://www.phillipdampier.com/video/Google Project Fi 4-22-15.mp4

Google produced this introductory video about its new wireless service: Google Project Fi. (1:56)

Net Neutrality Rule Changes At FCC May Open the Door to New Surcharge on Broadband Service

fccAs a consequence of reclassifying broadband as a utility service to protect Net Neutrality, the FCC may have unintentionally opened the door for a Universal Service Fund surcharge on broadband service.

Telephone customers have been accustomed to paying “USF” fees as part of their monthly phone bill since 1997. The average household pays just under $3 a month into the fund, which subsidizes four key programs:

  • Connect America Fund: Originally designed to subsidize telephone service in high cost rural areas, the program has increasingly shifted towards subsidizing broadband expansion in remote areas where private telephone companies won’t expand service without monetary assistance from the fund. In 2013, $4.17 billion was paid in the form of subsidies to mostly rural and independent telephone companies;
  • Lifeline: The Lifeline program pays up to $10 a month to a participating telephone or wireless company to subsidize basic telephone service for Americans living below 135% of the poverty line. More than 17 million households take part, most getting basic landline service for around $1 a month;
  • Rural Telemedicine: By subsidizing video conferencing and high-speed Internet access, rural doctors can consult with specialists in larger urban areas to help treat rural patients without the cost and risk of transporting the sick or injured to distant hospitals;
  • E-Rate: A needs-based subsidy program for schools and libraries seeking telecom services and Internet access. The subsidies help defray the cost of the services on a sliding scale, with rural and urban poor areas getting the largest subsidies.

feesThe fund has increasingly shifted towards Internet connectivity and service, but only telephone customers now pay a USF surcharge on their bill.

Net Neutrality critics warned that reclassifying broadband under Title II as a telecommunications service would open the door for new fees on broadband bills, some predicting as much as $11 billion a year in new fees. But because the FCC caps the amount of the fund each year, FCC chairman Thomas Wheeler predicted even if broadband customers are asked to contribute to the USF fund, the amount would be split between phone and broadband service, resulting in no additional out-of-pocket costs. Under that scenario, a phone customer currently paying $3 a month in USF charges would see that amount reduced to $1.50 a month on their phone bill, with a new $1.50 charge on broadband. The end amount is the same.

At least for now.

The FCC has been gradually increasing the size of the fund over the years, up 47% since 2004. Last year the FCC increased the fund by $1.5 billion to raise $8.8 billion from ratepayers nationwide. Most of the increase went to rural broadband deployment.

Industry-funded Net Neutrality critics are pushing a Los Angeles Times story about the potential for new fees, calling them ‘runaway government spending.’ But in perspective, the FCC’s $8.8 billion dollar effort to improve broadband accessibility is a fraction of the amount spent on highly controversial military projects. The F-35 Lightning II aircraft, for example, will cost taxpayers $1.5 trillion, and the Republican Congress approved $500 billion in extra funding this year for the project, funds above and beyond what the Pentagon requested. If that extra funding was spent on broadband improvements, every home in America could be wired for fiber optic Internet access. For $1.5 trillion, every home in the western hemisphere could be guaranteed broadband.

If USF fees are applied to broadband service, it is safe to expect your provider will pass along the fee as a new line item on your bill.

N.Y. Broadband Improvement Fund to Public Broadband Networks: Don’t Call Us, We’ll Never Call You

A $500 million New York State broadband improvement fund is effectively off-limits for would-be community-owned broadband networks trying to deliver broadband service in areas for-profit providers have deemed unprofitable.

New York Gov. Andrew Cuomo’s ambitious plan to revolutionize Internet access for New Yorkers depends almost exclusively on for-profit providers and the state’s largest cable operator, Time Warner Cable – the company that has so far received the largest share of state funds earmarked for better broadband.

Cuomo wants all of New York wired for 100Mbps service no later than 2018. His goal is ambitious because the overwhelming majority of upstate New York barely now receives a maximum of 50Mbps from Time Warner Cable, the only significant cable operator in the region.

The broadband map from N.Y. State shows 100Mbps service is available to most New Yorkers from Verizon FiOS, Cablevision, and a handful of municipal/co-op operators. Time Warner Cable only provides a maximum of 50Mbps service across upstate New York.

The broadband map from N.Y. State shows 100Mbps service is available only from Verizon FiOS, Cablevision, and a handful of municipal/co-op operators. Time Warner Cable only provides a maximum of 50Mbps service across upstate New York. Cablevision and FiOS compete on Long Island, Time Warner Cable Maxx competes with Verizon in New York City, and most of upstate New York is served by Verizon or Frontier DSL competing with Time Warner Cable.

Six months after the program was announced, Capital magazine reports the “New NY Broadband” plan is languishing with no defined guidelines, rules, or any clear sense about how the program will be implemented and the money spent.

Salway

Salway

In fact, one of the only clear statements coming from David Salway, a former telecommunications consultant who now administers the program, is that local governments should not bother applying because he doesn’t want them competing with Time Warner Cable, Verizon, and Frontier. It’s private enterprise only:

“The primary focus of our program is that we’re not going to be in the building business,” Salway said. He emphasized that municipal governments won’t be specifically precluded from receiving funds under the program, but said that the state is “wary” of “the government building and competing with the private sector. We see this as a provider partnership process where an incumbent provider or maybe a new entrant comes in.”

Local government leaders can read between the lines and most will not bother applying for funding if Salway’s vision guides the grant-making process. Instead, Salway wants to funnel money that effectively belongs to New York taxpayers into the pockets of for-profit providers like Verizon, Frontier, Windstream, Time Warner Cable and other providers that have consistently refused to expand their networks into rural areas on their own dime. The money earmarked for broadband is part of a $6 billion legal settlement the New York Attorney General’s office negotiated with Wall Street and commercial banks that helped plunge the country into The Great Recession.

statewide availability 1

statewide availability 2

statewide availability 3

Broadband advocates across the political spectrum are slamming the broadband program for different reasons. Christopher Mitchell from the Institute for Local Self Reliance predicts providers will deliver bait and switch broadband on the taxpayer’s dime and send the proceeds out of the area.

“When you subsidize the private sector, you don’t really know what kind of services they’re going to provide in the future,” Mitchell said. “There’s a fair number that basically rip off consumers,” and they “basically extract resources from the community they serve.”

Mitchell

Mitchell

“The only clear beneficiaries of this program will be cable and Internet providers, who will have a new state subsidy to expand their footprints into areas in which their competitors have demonstrated an inability to operate profitably,” said Ken Girardin of the conservative Empire Center for Public Policy, in a scathing review of the New NY plan.

So far, Verizon has shown no interest in the program. It’s eventual intent is to decommission rural landline service and push existing customers to wireless service, so applying for wired broadband expansion funding isn’t a priority. The most likely applicants include Windstream, which serves a small percentage of rural New York telephone exchanges, Frontier Communications, which dominates Rochester and parts of the Finger Lakes region, and Time Warner Cable, which used earlier funding to connect two rural communities to its cable service. But all three companies are waiting for the program and its grant terms to be better defined.

With incumbent cable and phone companies reluctant to take part, there are several wired and wireless broadband initiatives in rural areas around New York starved of resources to expand their networks. The “white space” wireless broadband project in Thurman, for example, will be seeking funding to expand its wireless high-speed network into other parts of the community. Other initiatives could allow existing middle mile fiber networks in the Southern Tier and Finger Lakes region to explore building out “last mile” service to homes and businesses that now receive only DSL or no Internet access at all.

Salway promises he’ll consider funding networks that deliver the best broadband speeds for the lowest relative price in similarly sized communities. But all the money in the world won’t help if an existing phone or cable company shows no interest in serving unprofitable rural areas even after the state defrays the initial cost of placing the infrastructure to provide the service.

Mitchell believes local communities are best positioned to know what their residents want and many support publicly funded fiber technology rollouts. He points to Longmont, Col., a community that fought off propaganda mailers and a $300,000 marketing effort by CenturyLink and Comcast to defeat public fiber broadband in the city. The residents voted in favor of building their own network to move beyond the “good enough for you” broadband coming from the phone and cable company.

“The Longmonts of the country can decide to wait until these private sector companies decide its in their interest to finally build these fiber networks out, or they can say, ‘You know, we’re always going to be behind the greater technological curve of the nation,’ and do it themselves,” Tom Roiniotis, Longmont’s general manager, told Capital.

Thurman, N.Y.’s Rural ‘White Space’ Wireless Network Debuts; Speed, Capacity Blows DSL and Satellite Away

The national map of available white space channels show plenty are available in rural areas, but designing an urban network might prove challenging because open channels just don't exist.

The national map of available white space channels show plenty are available in rural areas, but designing an urban network might prove challenging because open channels often just don’t exist. In a medium-sized city like Rochester, only 11 UHF channels are available, a number likely to dwindle to close to zero if the FCC successfully reallocates much of the UHF band to wireless providers like AT&T and Verizon.

A dozen homes in the middle of the Adirondacks now have access to Internet speeds far faster than what Verizon and Frontier DSL can deliver and without the usage caps or speed throttling common with satellite Internet access.

Thurman, N.Y.’s public-private “white space” wireless network survived months of political wrangling, debate, and even intentional signal interference created by someone intent on disrupting the project. For a community that some maps depict with zero residents, the 1,200 people of Thurman are now more known than ever, winning national attention for one of the first next generation rural wireless networks to use unused space on the UHF dial to provide Internet access.

A dozen homes are the first to receive the service, with nearly 80 more on the way during phase one of the project. A $200,000 New York state broadband grant helped get the project off the ground and defray the cost of equipment installed in each subscriber’s home. But the initial cost isn’t cheap, even with the grant. New customers pay an upfront equipment fee of $292 for a receiver that costs the project up to $600. The monthly service charge is $50. Despite the price, it’s worth it to a lot of subscribers.

“The white space service is truly amazing,” said John Schroeter of Kenyontown, noting he uses the Internet for genealogical research and relied on dial-up access for the last 15 years. “I can go from one web page to another without waiting forever.”

Schroeter told Denton Publications that web pages often failed to load with dial-up, even after hours of waiting. Now he can manage to complete days of research in about an hour, without having to drive 15 miles to the nearest Wi-Fi hotspot.

Despite the fact Verizon and Frontier Communications both run their own fiber cables on the same utility poles in the region, at least 75% of the 400 homes in Thurman have no access to broadband Internet, living out of reach of even basic DSL. Many end up in the parking lot of the town hall to use Wi-Fi. Others depend on prohibitively expensive satellite access. None of the existing options were ideal. Sheila Flanagan, proprietor of Nettle Meadow Farm complained it took her hours to prepare even a small number of shipping labels to send her cheese products across the country with UPS. Speeds were so slow, she was forced to drop Williams-Sonoma as a client.

thurmanThe concept of white space wireless Internet access has already taken hold in Europe but has dragged in the United States as existing UHF television stations, wireless carriers, wireless microphone manufacturers and others who use the same frequencies white space data services also depend on defend their turf. Since white space services are unlicensed and intended for two-way communications, fears that Internet users would degrade wireless microphones or TV reception meant special care had to be taken to lower the potential for interference.

Since rural areas lack a crowded television dial, are often outside of the coverage areas of wireless carriers, and are unlikely to host many wireless mics, white space broadband would seem like the natural solution.

The project in Thurman faced a number of obstacles to overcome anyway. There were philosophical objections from tea party conservatives who objected to tax dollars paying for the “luxury” of Internet access when satellite service is available. Some residents wanted a fiber to the home solution, one that was likely financially out of reach for the small community. Still others wanted the money spent on a fiber link between the town and Time Warner Cable, that might then be enticed to wire homes in the rural community. In the end, the community decided to go ahead with an advanced wireless network, citing a number of factors familiar to many living in rural areas:

  1. thurman-nySince the town is located entirely within the Adirondack Park, there are prohibitions on placing communications towers on nearby peaks or other high spots that could spoil the view;
  2. The heavily forested and mountainous area made a traditional Wireless ISP project difficult because those networks need line of sight communications. White space wireless signals easily penetrate through trees and can stay intact across hilly terrain;
  3. Although not as bandwidth capable as fiber optics, white space networks are capable of delivering 10Mbps broadband per UHF channel. Most networks bond multiple UHF channels together to support even faster speeds and expand capacity;
  4. The chances of creating interference for other spectrum users was low in Thurman, which is a four-hour drive from New York and far enough north of Albany to avoid interfering with signals from the state capital. Even wireless carriers hug their cell towers along I-87, a respectable distance away;
  5. The network has redundant backhaul access to fiber from both Verizon and Frontier, neither of which show the slightest interest in expanding services into the community on their own;
  6. The grant was limited in scope and white space broadband qualified so it proved the most economical choice for a community that was no stranger to fights over money, engaging in political battles over issues like the cost of building a salt shed and auditing the on-hand count of trash bags.
The Thurman white space broadband project hides base station antennas in the tree canopy.

The Thurman white space broadband project hides base station antennas in the tree canopy.

Tests provided the project managers with an idea where to place needed wireless antennas, often hidden within tree canopies. But at least one disgruntled resident made a point of creating intentional interference on the channels the project managers were testing, committing a federal offense along the way. That was quickly overcome and the equipment has been placed and will soon be joined by installations in nearby neighborhoods, broadening the reach of the service.

Recent advancements in white space technology have also allowed speed and capacity to improve dramatically. Equipment now transmits its exact GPS-identified location to a national database which sends back an authorized list of “white space” channels each transmitter can use to provide the service. If a new licensed broadcaster takes to the airwaves, a database update will lock out that channel in the area, preventing interference.

Although exact speed data was not available at press time, Sally Feihel demonstrated she could successfully stream an episode of a classic Andy Griffith Show on her iPod at the same time a videoconference was underway and someone else was downloading a movie, all without skipping a beat. In fact, there is so much speed and capacity built into the system, its managers say speed throttles and usage caps are completely unnecessary.

Most users agreed the wireless network far outpaced satellite and DSL and some believed it was even faster than Time Warner Cable Internet access they experienced elsewhere. (Time Warner Cable doesn’t come near the community today.)

Constructing the network only took several months, but the politics that often surrounds public-private initiatives and the need for grant funding in income-challenged rural America can tie up projects much longer than that. The need for decent and affordable Internet access often will cross party lines, especially in rural communities.

New York’s state broadband expansion fund could help expand similar projects to other bypassed areas of the state. That investment may actually save taxpayers from paying high broadband bills indefinitely.

Residents are eagerly waiting for the next expansion to begin down Valley, Garnet Lake and Glen-Athol Roads. Moving beyond that may take more grant funding.

“White space is saving us $90 per month, and it’s far faster than satellite ever was,” another resident said.

http://www.phillipdampier.com/video/MetroFocus A New way to Bring Broadband to Rural Towns in Upstate New York 2014.mp4

MetroFocus showed the initial planning and testing phases of Thurman’s new white space wireless network, including interviews with town officials and a tour of the community. (4:23)

http://www.phillipdampier.com/video/Dynamic Spectrum in Action How TV White Space Devices Work.mp4

TV white space wireless broadband networks are designed to avoid interference with other licensed spectrum users. See how the technology works in this short video. (2:27)

FCC Now Defines Minimum Broadband Speed at 25Mbps; Everything Less Is Now “Slowband”

speedThe Federal Communications Commission, over loud objections from America’s largest cable and phone companies, has raised the minimum speed necessary to qualify as “broadband” from 4/1Mbps to 25/3Mbps.

Broadband deployment in the United States – especially in rural areas – is failing to keep pace with today’s advanced, high-quality voice, data, graphics and video offerings, according to the 2015 Broadband Progress Report adopted by the Federal Communications Commission.

Reflecting advances in technology, market offerings by broadband providers and consumer demand, the FCC updated its broadband benchmark speeds to 25 megabits per second (Mbps) for downloads and 3 Mbps for uploads. The 4 Mbps/1 Mbps standard set in 2010 is dated and inadequate for evaluating whether advanced broadband is being deployed to all Americans in a timely way, the FCC found.

Wheeler

Wheeler

Using this updated service benchmark, the 2015 report finds that 55 million Americans – 17 percent of the population – lack access to advanced broadband. Moreover, a significant digital divide remains between urban and rural America: Over half of all rural Americans lack access to 25 Mbps/3 Mbps service.

“The FCC doesn’t just have a statutory obligation to report on the status of broadband deployment; we have a duty to take immediate action if we assess that the goal of deployment to all Americans is not being met,” said FCC chairman Thomas Wheeler. “And act we have.”

The 3-2 party line vote left the FCC’s two Republican commissioners Ajit Pay and Michael O’Rielly siding with the telecom industry.

Commissioner Pai even accused the FCC of aiding and abetting the Obama Administration’s larger plan to regulate the Internet.

“The ultimate goal is to seize new, virtually limitless authority to regulate the broadband marketplace,” Pai wrote in his dissent. “Under its interpretation of section 706 of the Telecommunications Act, the FCC can do that only by determining that broadband is not ‘being deployed to all Americans in a reasonable and timely fashion’ or, more colloquially, by ignoring the consistent progress in Internet connectivity that’s obvious to anyone with a digital connection and an analog pulse.”

Pai

Pai

Pai called the FCC decision “Kafkaesque,” claiming the agency’s recent activist approach on issues like broadband speed, Net Neutrality, and managing wireless spectrum to guarantee robust competition will result in cuts in broadband investment, raise the cost of deployment, and deter competition.

Pai believes the FCC is erecting barriers that will delay or even stop Verizon and AT&T’s plans to ditch rural landline service through a proposed transition to IP-based phone service in urban communities and wireless-only service in rural areas. He also complained about efforts by the FCC to regulate the Internet like a public utility, claiming “that is not what the American consumer wants or deserves.”

But Commissioner Jessica Rosenworcel countered maintaining the status quo and allowing the marketplace to set the agenda risks our digital future.

“I, for one, am tired of dreaming small; It’s time to dream big,” Rosenworcel said. “This is the country that put a man on the moon. We invented the Internet. We can do audacious things—if we set big goals. I think our new threshold should be 100Mbps. I think anything short of that shortchanges our children, our future, and our digital economy. I don’t think reaching a benchmark like this is easy—but nothing worthwhile ever is. Still, the history of technological innovation is rife with examples of the great depths of American known-how. It is time to put that know-how to work and use it to bring really big broadband everywhere.”

The FCC’s changed definition of what constitutes broadband could also have an impact on the current merger deal involving Comcast and Time Warner Cable now before the FCC and state regulators.

COMCAST-MILLIONAIREWith the new definition in place, Comcast’s monopoly control of broadband service becomes more clear as fewer phone companies are able to meet the minimum speed standard to qualify as broadband competitors. Comcast will now control about 50% of all broadband homes in the country, a percentage that could reach even higher if Comcast revamps Time Warner Cable’s broadband tiers.

The report also highlights a growing digital divide on Tribal lands, in U.S. territories, and in schools. At least two-thirds of residents lack access to broadband on Native American reservations and in U.S. possessions including Puerto Rico, Guam, the Northern Marianas, U. S. Virgin Islands and American Samoa. More than one-third of all schools in the United States lack access to fiber broadband connections.

Key findings include the following:

  • 17 percent of all Americans (55 million people) lack access to 25/3 Mbps service;
  • 53 percent of rural Americans (22 million people) lack access to 25/3 Mbps;
  • By contrast, only 8 percent of urban Americans lack access to 25/3 Mbps broadband;
  • Rural America continues to be underserved at all speeds: 20 percent lack access even to service at 4/1 Mbps, down only 1 percent from 2011, and 31 percent lack access to 10/1 Mbps, down only 4 percent from 2011;
  • 63 percent of Americans living on Tribal lands (2.5 million people) lack access to 25/3 Mbps broadband;
  • 85 percent living in rural areas of Tribal lands (1.7 million people) lack access;
  • 63 percent of Americans living in U.S. territories (2.6 million people) lack access to 25/3Mbps broadband;
  • 79 percent of those living in rural territorial areas (880,000 people) lack access;
  • Overall, the gap in availability of broadband at 25/3Mbps closed by only 3 percentage points last year, from 20% lacking access in 2012 to 17% in 2013.

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