Discarded copper wire

Fixed line DSL service is at risk of obsolescence in Asia and the Pacific thanks to the widespread deployment of fiber optic cable.

According to a report from the industry analyst firm Ovum, fiber broadband will surpass DSL’s market lead in the Asia-Pacific region by 2014.

Study co-author Julie Kuntsler says Hong Kong, Japan, Korea and Taiwan has already achieved more than 25 percent penetration of fiber to the home in those countries, and the People’s Republic of China’s accelerated fiber deployments mean that country is also on track to retire millions of miles of obsolete copper wiring in favor of fiber-delivered broadband.

With China’s enormous population, even today’s small percentage of Chinese citizens with access to fiber, currently 4 percent, still delivers a staggering number of customers now in excess of 74 million.

But fiber broadband growth is not just limited to those countries.  Fiber expansion projects are underway in  Australia, Bangladesh, India, Indonesia, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Thailand, and Vietnam — growth that will deliver faster broadband expansion than found in North America, where most phone companies continue to rely on traditional DSL, especially in rural service areas.

Factors that help promote fiber broadband deployment include cohesive national broadband policies from governments that insist on more than incremental broadband expansion, financial incentives for providers who install fiber broadband for consumers, and a population that wants fiber-fast Internet speeds.

The Fiber to the Home Council – Asia-Pacific predicts that 129 million customers in the region will dump copper wire DSL for fiber to the premises by 2014. Cable broadband will also increase its market share.  Combined, the two technologies will shove traditional DSL to second place, as the technology is expected to see no market share growth for the foreseeable future.

The Canadian Radio-television Telecommunications Commission is investigating Canadian ISP practices all week in a series of public hearings.

The Canadian Radio-television and Telecommunications Commission (CRTC) opened the first day of hearings on the practice of usage-based billing for Internet usage, advocated by the country’s largest wholesale provider of Internet bandwidth, Bell Canada.

These hearings are a follow-up to earlier ones that ultimately allowed Bell to mandate usage billing not only for its own customers, but for all independent ISPs that purchase bandwidth from the company.  Since the vast majority of independent providers purchase bandwidth from Bell, the CRTC ruling would have mandated the end of “unlimited use” Internet plans across the country.

Nearly a half-million Canadians disagreed with the CRTC ruling and created a political firestorm earlier this year, demanding that the government step in and overturn the CRTC ruling.  Bell temporarily withdrew the usage based billing mandate pending the outcome of hearings expected to run from today until early next week.

Appearing at today’s hearing, executives from Bell continued to defend usage-based pricing and plan pricing that forces consumers to guess at how much Internet usage they will need each month.

In more aggressive questioning than earlier hearings, CRTC chairman Konrad von Finckenstein questioned Internet pricing plans that do not “rollover” or rebate consumers for unused usage, but still penalizes customers for going over their plan limits.

von Finckenstein also questioned Bell’s pricing for independent ISPs, particularly penalty rates ISPs who underestimate their wholesale usage needs would face under Bell’s advocated pricing model.  The chairman seemed suspicious of the fact Bell does not charge its own ISP unit penalty rates, only independent providers.

The hearing will also explore why companies like Bell can deliver “unlimited viewing” on their Fibe TV IPTV service, but cannot deliver unlimited Internet access to end users.

Interested in following the hearings live? Visit the CRTC live stream hearing page.

[Updated 10:20am ET: Bell Canada executives just admitted in this morning’s hearings its Internet Overcharging scheme involving usage pricing many times higher than the actual cost of provisioning the service was driven by “competition” and not by “congestion” issues.  In other words, Canadian consumers are paying very high Internet pricing and overlimit fees because of the pervasive lack of competition, not because companies need the extra money to “upgrade their networks.”]

Toronto

Except for South Korea, nobody uses the Internet more than Canadians.  That’s an important finding in a new report produced for Canada’s telecommunications regulator to better understand the current state of the broadband market in the country.

According to recent reports from the Organization for Economic Cooperation and Development, the country generates 2,288 terabytes of data traffic per month per 100,000 residents.  That’s among the highest in the world and comes from avid web browsing, watching online video, and a love affair with smartphones.

But like many relationships, this one is also expensive.  You pay all of the money you have to spare, and your provider delivers you just enough of a usage fix to keep you from running to Ottawa to demand change.

Canadian broadband pricing is in the top third of all OECD-measured nations, with the average price for High Speed Internet running $55.18.  The average median price across all OECD members runs a lot less — $39.23 per month.  If you want to pay less, you have to bundle your landline, cell phone, television, and Internet service with the same provider, or make due with a slow speed “lite user” plan, where average pricing had been running lower until this year.

The average monthly price of the Level 1 basket increased to roughly $35 in 2011, up considerably from $31 the previous year.

Similarly, average monthly price of the Level 2 basket increased this year as well to roughly $50, up from $48 last year.  The average advertized download speed of the services included in the Level 2 basket is close to 6.5 Mbps, which is similar to the average speed in last year’s study.

The average monthly price of the Level 3 basket also increased slightly to $63, but still remains well below the 2008 price of $69 per month.  The average advertized download speed of the services included in the Level 3 basket is roughly 14 Mbps, which is slightly higher than in last year’s study (where the average speed was 12.5 Mbps).

Lastly, the average price of the new Level 4 broadband service basket is roughly $78 per month.  The advertized download speeds for the Level 4 broadband services included in the study range from 25 to 50 Mbps – the average is close to 30 Mbps.

Roughly half of the Canadian broadband service plans surveyed for this study included monthly usage caps.  For those that do, they range from 1 to 13 GB on the Level 1 service basket – the average is 7 GB per month.  The range for the Level 2 service basket is from 25 to 75 GB – the average is 55 GB per month.  The range for the Level 3 service basket is from 75 to 125 GB – the average is just over 90 GB per month.  There has been little change in these monthly usage caps, on average, compared to last year.

In the case of the new Level 4 broadband service basket, for those service providers applying data usage caps, the caps range from 75 to 250 GB per month – the average was close to 140 GB per month.

The Canadian pricing and usage study was developed by Wall Communications for the Canadian Radio-television and Telecommunications Commission.  The best news for Canada?  Your broadband pricing remains relatively stable, with some package pricing reducing the cost of the broadband component.  Standalone service appears to have increased in price only slightly in many markets.  Increased foreign investment in the wireless marketplace is shaking up wireless pricing, as the hegemony of Bell, Telus, Rogers, and Quebecor are under increasing competitive pressure.  It’s a much sunnier outlook than what is taking place in the country to your south.

For Americans, pricing is headed in only one direction: up.

All charts courtesy of Wall Communications, Inc.

Is this a T-Mobile priority coverage zone?

One of the “benefits” AT&T’s lobbying team claims will come with a merger between AT&T and T-Mobile is improved wireless service for rural America.

But an investigation into T-Mobile’s urban-focused coverage, and AT&T’s own recent rural past prove those claimed benefits simply don’t make any sense.

Although rural and small town America is increasingly aware of AT&T, that comes mostly from the company’s recent acquisitions, not from mass expansion projects to blanket rural America with AT&T iPhones.  AT&T has been on a shopping spree for smaller regional wireless carriers for the last five years, picking up resources through acquisition, not from independent investment.  But a buyout of T-Mobile will bring no new assets for AT&T’s presence in rural America.  It will simply reduce competition in larger communities the same way AT&T cut out competitors in rural markets.

Just ask customers of Dobson Cellular.  In 2007, AT&T bought the rural provider, doing business as Cellular One, for $2.8 billion dollars and converted customers to AT&T.  Dobson was the largest cell phone company around in Alaska and rural Michigan.  In fact, the company provided roaming capability to customers of AT&T and T-Mobile who ventured into the rural areas Dobson specialized in serving.

After the conversion, did service improve for the newly acquired AT&T customers?

“No way,” says ex-Cellular One customer Jim Duncan who lives in a former Dobson service area in Michigan. “AT&T ruined cell phone service when they got here with dropped calls and phantom busy signals, turning a friendly local-focused company into one where you are just an account number reaching some national call center.”

Acquired by AT&T in 2007

Duncan says AT&T never cared one bit about rural Michigan before buying Dobson, and in his view, still doesn’t.

“Smaller markets are an afterthought for AT&T and T-Mobile has zero impact (and customers) in my area, so I have no idea what great improvements a merger will bring to our part of Michigan that neither company paid much attention to,” Duncan says.

That same year, AT&T also grabbed spectrum worth $2.5 billion with its acquisition of Aloha Partners, which spent time at FCC auctions buying up 700Mhz spectrum and then eventually reselling it at a profit to wireless carriers.  AT&T didn’t just buy some of Aloha’s spectrum, it acquired the whole partnership.

Acquired by AT&T in 2008.

In April 2008, Edge Wireless customers in southern Oregon, northern California, southeastern Idaho and Jackson, Wyoming discovered they were well on their way to becoming AT&T customers, too.  AT&T acquired Edge and rebranded it AT&T. That hardly represents investment and dedicated expansion into rural Rocky Mountain states — AT&T simply bought up another company that did.

Also in 2008, AT&T snapped up Centennial Communications, a considerable-sized regional player in the central United States.  Centennial delivered service in less urban areas in Indiana, Ohio, and Michigan in the north, and Louisiana, Texas, and Mississippi in the south.  One million customers, Centennial’s spectrum and name all became part of AT&T.  Did service improve for Centennial customers with that merger?

“Overall, it stayed the same when it was Centennial and switched to AT&T,” says our reader Kevin, who now lives in Ft. Wayne, Ind.  “We did get access to the iPhone, but along with it came AT&T’s infamous dropped calls and lousy customer service.”

Acquired by AT&T in late 2008.

Kevin switched to Verizon Wireless earlier this year.

“If I was the FCC, I wouldn’t approve this merger because it promises nothing for rural America or anyone else,” says Kevin. “AT&T had a presence in Indiana before they bought Centennial, so all the deal did was reduce competition in this state.”

Centennial’s service areas were not exactly among T-Mobile’s priority coverage areas, either.

Acquired by AT&T in 2011?

“T-Who?,” Kevin asks.  “We’re aware of them now, but I don’t know anyone who has service with them.”

The real unanswered question is what AT&T is doing with all of the rural spectrum it already owns, controls, or has acquired.  How will an acquisition of an urban-focused carrier help deliver improved service in the rural markets both companies have traditionally ignored?

Answer: It won’t.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WANE Ft Wayne Centennial Joins ATT 10-09 and 02-10.flv[/flv]

WANE-TV in Ft. Wayne, Ind., covered the merger of Centennial and AT&T back in 2009 and early 2010.  Fort Wayne was the home of a major regional office for Centennial.  (4 minutes)

Economically-challenged western New York will take any new high-tech jobs it can find, which is why local politicians threw parties when Verizon announced interest in building a multi-billion dollar data center on the shores of Lake Ontario, in the Niagara County community of Somerset.

Covered last fall by Stop the Cap!, the project would have created up to 200 high-paying jobs, representing a feather in the cap for economic development efforts upstate cities have been engaged in even before the Great Recession.

Verizon’s Wish List

Just a few things seemed to be standing in the way, according to Verizon’s lobbyists.  Among them, an unfavorable piece of legislation that was pending in 2010, introduced by Assemblyman Richard Brodsky (D-Westchester) and Senator Brian X. Foley (D-Blue Point).  New York Assembly Bill 2208/Senate Bill 7263 came in response to watching Verizon selling off pieces of its landline network to Frontier Communications, and both Albany politicians did not want to see a repeat of that in New York State, unless Verizon shared the wealth with ratepayers in the form of credits on their monthly phone bills (or expanded broadband rollout in rural areas of the state).

That bill languished and eventually failed to be adopted by the legislature, so Verizon ultimately had few worries from Albany.  But Verizon’s wish list grew longer even as the fall days grew shorter.

The proposed site for Verizon's data center in Somerset, N.Y., which will now continue to offer a clear view to Lake Ontario. (Courtesy: WIVB-TV Buffalo)

The company sought a 20-year payment-in-lieu-of-taxes, or PILOT agreement, getting Verizon off the hook for high New York State taxes — particularly western New York’s property taxes, recognized as the highest in the nation.  The company would also be able to obtain cheap hydropower, an important proposition in an area charged some of the highest electricity rates in the country.  Verizon even sought a sales tax exemption on building materials and technology to be used inside the new data center.  That’s nothing to sneeze at either, considering Niagara County’s 8% sales tax rate.

In all, Verizon would have saved at least $330 million if their wish list of taxes waivers and benefits was approved.

With the help of state senator George Maziarz (R-Newfane), Verizon seemed well on its way to winning those concessions from the state.

And Then Came The Neighbor Across the Street, Ms. Mary Ann Rizzo

As the state worked to fulfill Verizon’s checklist, all seemed on track to break ground until one Somerset resident in her 70s, Ms. Mary Ann Rizzo, began asking some hard questions.

Rizzo owns 116 acres of land across the street.  She wondered what kind of impact a multi-billion dollar project like this would have on her and other neighbors, and wanted the state to complete due diligence on an environmental impact review that somehow magically got cut short within five weeks of the application being filed.

She hired attorney Art Giacalone to make sure New York State was following its own procedures in approving the largest project ever proposed for Niagara County in more than a half century.  Giacalone found a lightning-fast approval by Somerset town officials and one of the fastest reviews by state officials he’d ever seen.

Rizzo filed suit, but it was dismissed by a judge back in January.  Rizzo’s attorney filed a notice of appeal, and Verizon’s attorneys asked the court to speed up the process, something the Rochester judge hearing the case refused.

Within days of that, Verizon announced it was pulling the plug on the data center in Somerset, and Maziarz promptly laid blame at the feet of Ms. Rizzo.

Maziarz - 'It's all that woman's fault.'

The Misdirected Blame Game

“It just shows you how one person who owns property across the street, doesn’t even live on the property, but just owns property across the street has killed this up to $5 billion project,” Maziarz said.  “She is totally responsible for [Verizon’s] decision.”

That set local talk radio afire as local residents vilified Rizzo, as did some in the Buffalo and Niagara Falls press.

Verizon said it was considering taking its data center to Wyoming instead.

While Rizzo was in court and Maziarz was spending time cutting red tape for Verizon, the company acquired Teremark, a very large provider of data hosting services and cloud storage.  So large and important that Verizon touted the acquisition as providing at least $500 million in “synergies,” allowing cost-cutting and Verizon to transfer some of its data center needs to Teremark facilities, which is exactly what happened.

Nope, it's not being built in Laramie, Wyo. either.

In fact, while Verizon was complaining about New York’s foot-dragging, company officials were planning to close several of Verizon’s existing data centers, making the need to break ground for a new one on the shores of Lake Ontario unnecessary.

Wyoming officials rolled out a similar red carpet for Verizon, with Gov. Matt Mead budgeting $14 million towards a data center incentive package.  That’s a considerable sum for a state with only a half-million residents.

This week, we learned Wyoming was the second state to be left behind by Verizon, who abandoned plans for the data center proposed near Laramie.

“As a result of the acquisition, we do not have plans at this time to build a data center in Wyoming,” Verizon spokeswoman Lynn Staggs told the Laramie Boomerang. “The Terremark acquisition, announced earlier this year, provides Verizon with the chance to accelerate its data center and cloud strategy.”

In other words, Verizon bought its own solution.

Even if New York delivered on all of the legislative and tax abatement changes Verizon wanted, and Ms. Rizzo never existed, Verizon would still not be spending time on the beach at Somerset or wandering the wide open spaces of Laramie.  But they might have walked away with some nice deregulatory parting gifts without having to show a thing for it — gifts that the state of Wyoming already budgeted for companies like Verizon, all for a data center they won’t build.

A tip for rational living: Before handing everything a large telecommunications company wants on a silver platter, get the commitment in writing and be prepared to rescind those offers if the company pulls out.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Buffalo Media React to Verizon Data Center Project Canceled 3-2011.flv[/flv]

Watch as Buffalo’s TV newscasts opened the floodgates for a wholesale blame game over a failed multi-billion dollar project Verizon was unlikely to ever build after acquiring Teremark.  (WGRZ/WIVB/WKBW)  (15 minutes)