Horse and buggy broadband in the slow lane.

One of Australia’s largest broadband suppliers has declared the country’s satellite solution for rural broadband hopelessly overloaded to the point of being “almost unusable” and has stopped selling access.

iiNet announced this week it would no longer sign up new customers of NBN Co’s rural satellite network because the service is oversold in their view.

“We could not continue to offer a service markedly below both our own and our customers’ expectations,”  iiNet’s chief executive Michael Malone said in a statement. “During occasional peak periods the service was so slow as to be almost unusable. As more people are added to the network, quality will only decline further. In the absence of any action by NBN Co to increase transmission capacity, I call on the rest of the industry to respect their existing customers and also cease sale.”

NBN Co, however, claimed it still had room for an extra 5,000 customers — mostly on its spot beam targeting central and western Australia. A spokesperson for the satellite venture did admit satellite beams covering NSW, Tasmania and Queensland were near capacity. NBN Co is investigating leasing more bandwidth on board the satellite, but cost concerns may make that impossible.

The venture claims 48,000 Australians can satisfactorily share the interim satellite broadband service, which is supposed to offer 6Mbps speed. But as Australians join others around the world favoring online video and video conferencing over services like Skype, those original estimates have to be scrapped. In the evenings, some customers report speeds drop below 56kbps or the service simply freezes up and stops working altogether. In response, NBN has adopted a strict monthly usage limit of 9GB and has told customers they will likely have to wait up to two years for a capacity increase.

The government is planning to launch two new custom-made satellites in 2015 to ease capacity concerns. NBN Co claims the two satellites will deliver 25/5Mbps service for 200,000 rural Australians, assuming usage estimates of today’s average broadband user.

Critics contend satellite broadband is not a good long-term solution except in the most rural of sparsely populated areas. Although providing wired service may be too costly, ground-based wireless services could be the most capable technology to contend with future demand and capacity concerns.

iiNet and other ISPs may already be headed in that direction. Some are advising customers to choose fixed wireless options from Australia’s cell phone providers, although those plans are heavily capped and very expensive.

Broadband availability has a direct impact on property sales in rural Australia. A couple that purchased a home in Mount Bruno, near Wangaratta in north-east Victoria discovered only after closing the deal that NBN Co would not sell them satellite broadband because the spot beam targeting Victoria was full.

The couple needs Internet access for work and their telephone line is unsuitable for ADSL. Mobile broadband in the Mount Bruno area is sub-par and expensive as well. As a result, the couple will have to rent office space in Glenrowan or Wangaratta that qualifies for wired broadband until at least 2015, when the next NBN satellite is launched.

iiNet regrets having to turn customers away.

“At its peak, we had 500 customers signing up every week for our NBN satellite services. There is clearly a significant demand for higher quality broadband in remote Australia, and we’re absolutely gutted that we’ve had to withdraw this crucial service from sale,” said Malone.

The WiredWest Cooperative
Towns shown above are official voting members of the WiredWest Cooperative. The town of Montgomery has also recently become a member. Requirements for new towns including being contiguous and directly accessible by road from another WiredWest member town, and less than 50% served by cable broadband.

Although plans to offer publicly owned fiber to the home service in 42 western Massachusetts communities are moving forward, a proposed $10 million taxpayer-funded incentive to encourage Comcast to expand cable service in western Massachusetts could mean the cable giant might get to some of those communities first.

Reps. Stephen Kulik (D-Worthington), Paul Mark (D-Cuba) and Sens. Stanley Rosenberg (D-Amherst) and Benjamin Downing (D-Pittsfield) have filed an amendment to Gov. Deval Patrick’s $40 million community broadband bond bill requesting a $10 million incentive be included to underwrite Comcast’s expenses to expand cable service into areas the company has long declared unprofitable.

“It’s challenging, because you cannot overbuild a new broadband network where there is existing service,” Kulik told The Recorder. “What we’re proposing is to add language to this bill, to provide incentive money to expand cable service.  The partial cable towns aren’t eligible for federal funds. Carving out a way to reach out to these towns and extend cable seems a better way to do this.”

The dozens of communities participating in the WiredWest community broadband consortium have waited years for better broadband service. Rural western Massachusetts has been largely bypassed by Verizon, which only offers limited DSL service to some customers. Dominant cable provider Comcast primarily serves denser neighborhoods in selected towns.

Life is particularly complicated for the handful of communities that have some service from Verizon and/or Comcast, because almost all federal broadband grants are available only to communities that don’t have Internet access. These partially served areas, dubbed “cable towns,” are frustrated by government grants that only direct funding to areas where no service is available and are on the receiving end of endless complaints from local residents suffering broadband envy, knowing a neighbor up the street has had cable service for 30 years while many others are left in limbo.

Kulik

In August, Chris Saner of Huntington told the newspaper Comcast’s cable line ends 1.4 miles down the road from his house. The cable company would be happy to extend service to the roadway in front of his home for $24,000. If Saner had to sell his home, that investment might be mandatory to help find a buyer. Saner should know, as he works in real estate. Prospective buyers tell him, “don’t even show me anything where there’s no cable.”

Broadband access has become so critical, some don’t care whether they get it from WiredWest’s future fiber network or Comcast’s coax.

Fiber broadband “is lobster and filet mignon. Cable is hamburger, but give us hamburger —we’re starving out here,” Saner said.

The $10 million proposal from the four Massachusetts Democrats could bring faster cable Internet service for some residents, but could also potentially undercut fiber access down the road.

Comcast isn’t likely to expand service on its own, citing Return On Investment formulas that make expansion unprofitable. A $10 million incentive could resolve some of those cost concerns, but critics call it corporate welfare.

Robbie Leppzer, a Wendell documentary filmmaker who has been involved in the struggle to improve broadband in western Massachusetts for years, suggests that taxpayer funds would be better spent in the public sector, “where towns and their residents have more say in the process.”

“Personally, I would love to see a nonprofit, community-based solution because it would be a more effective use of money, and it would keep it in the fiber-optic realm,” Leppzer told the newspaper. “While [coaxial cable] may be adequate for now, it will not meet the needs of the 21st century.”

Ironically, western Massachusetts may eventually get the fastest Internet speeds in the state from the Massachusetts Broadband Institute’s $71.5 million middle-mile network, now 95 percent complete. MBI’s priority is to build the regional fiber network and provision it for institutional customers including municipal buildings, schools, hospitals, libraries, fire and police departments. Once complete, the network’s second phase involves expanding access to the public.

The WiredWest consortium will be the public-facing part of the project, responsible for marketing high-bandwidth, affordable Internet, phone, high-definition television services and ancillary services to residents and businesses. WiredWest wants to build a 1,952-mile fiber-to-the-home network off MBI’s regional fiber backbone and institutional network.

One of the most common questions from eager would-be customers is exactly when the fiber network will be finished and open for business to the public. Funding remains the biggest impediment. The cost of wiring residents for fiber service across the 42-town consortium ranges from $70 million to $130 million. It’s a substantial sum for small communities to cover, but the project does enjoy economy of scale that could ultimately save taxpayer dollars.

In Leverett, which has been building a fiber-to-the-home network on its own, the price tag for the 1,900 residents is $3.6 million — the amount of the bond secured to launch the project. Leverett residents will cover the costs of the fiber network through a tax increase that will amount to $295 a year over 20 years for a home assessed at $278,700.

The state can continue to budget about $40 million annually to gradually connect residents to the WiredWest fiber network or find Comcast expansion a better choice at a quarter of the price in some communities. It could even fund both. For some elected officials, getting broadband to communities using any means necessary is the primary goal. Downing thinks the western half of the state has waited long enough for broadband, noting the improvement initiative started in 2008. He wants the project finished before Patrick leaves office.

“We should all recognize that 18 months from now is the end of this administration,” Downing said. “And there is no guarantee that the next governor will share the same commitment for this project.”

[flv]http://www.phillipdampier.com/video/Viodi Broadband – Unique to Each Locale 11-13-13.mp4[/flv]

The western Massachusetts middle-mile/fiber to the home project is being developed in cooperation with Axia Technology Partners, a consulting, engineering, and construction firm. Tim Scott talks to Viodi.tv about Axia’s role as the operator for the Massachusetts community network. (7:45)

The median bandwidth use slowdown (Image: BTIG Research)

Despite perpetual cries of Internet brownouts, usage blowouts, and data tsunamis that threaten to overwhelm the Internet, new data shows broadband usage has leveled off in North America, undercutting providers’ favorite excuse for usage limits and consumption billing.

Sandvine today released its latest broadband usage study, issued twice yearly. The results show a clear and dramatic decline in usage growth in North America, with median usage up just 5% compared to the same time last year. That is a marked departure from the 190% and 77% growth measured in two earlier periods. In fact, as Richard Greenfield from BTIG Research noted, mean bandwidth use was down 13% year-over-year, after the second straight six month period of sequential decline.

Companies like Cisco earn millions annually pitching network management tools to providers implementing usage caps and consumption billing. For years, the company has warned of Internet usage floods that threaten to make the Internet useless (unless providers take Cisco’s advice and buy their products and services).

“Demand for Internet services continues to build,” said Roland Klemann from Cisco’s Internet Business Solutions Group. “The increasing popularity of smartphones, tablets, and video services is creating a ‘data tsunami’ that threatens to overwhelm service providers’ networks.”

Providers typically use “fairness” propaganda when introducing “usage based pricing,” blaming exponential increases in broadband usage and costly upgrades “light users” are forced to underwrite. A leveling off in broadband usage undercuts that argument.

A Cisco White Paper intended for the eyes of Internet Service Providers further strips the façade off the false-“fairness” argument, exposing the fact usage pricing has little to do with traffic growth, pricing fairness, or the cost of upgrades:

In 2011, broadband services became mainstream in developed countries, with fixed-broadband penetration exceeding 60 percent of households and mobile broadband penetration reaching more than 40 percent of the population in two-thirds of Organisation for Economic Co-operation and Development (OECD) countries.

Meanwhile, traditional voice and messaging revenues have strongly declined due to commoditization, and this trend is expected to continue. Therefore, operators are now relegated to connectivity products. The value that operators once derived from providing value-added services is migrating to players that deliver services, applications, and content over their network pipes.

As if this were not enough, Internet access prices are dropping, sales volumes are declining, and markets are shrinking. The culprit: flat rate “all-you-can-eat” pricing. Such a model lacks stability—sending service provider pricing into a downward spiral—because it ignores growth potential and shifts the competition’s focus from quality and service differentiation to price.

While Klemann was spouting warnings about the dire implications of a data tsunami, Cisco’s White Paper quietly told providers what they already know:

Maximum Profits

“[Wired] broadband operators should be able to sustain forecasted traffic growth over the next few years with no negative impact on margins, as the incremental capital expenses required to support it are under control.”

If usage limits and consumption billing are not required to manage data growth or cover the cost of equipment upgrades, why adopt this pricing? The potential to exploit more revenue from mature broadband markets that lack robust competition.

“In light of the forecasted Internet traffic growth mentioned earlier and competitiveness in the telecommunications market, Cisco believes that fixed-line operators should consider gradually introducing selected monthly traffic tiers to sustain [revenue], while a) signaling to customers that “traffic is not free,” and b) monetizing bandwidth hogs more sustainably.”

Cisco makes its recommendation despite knowing full well from its own research that customers hate usage-based pricing.

“The introduction of traffic tiers and caps—especially for fixed broadband services—is not welcomed by the majority of customers, as they have learned to ‘love’ flat rate all-you-can-eat pricing. Most customers consider usage-based pricing for broadband services ‘unfair,’ according to the 2011 Cisco IBSG Connected Life Market Watch study.”

Cisco teaches providers how to price broadband like trendy boutique bottled water and blame it on growing Internet usage.

But with competition lacking, Cisco’s advice is to move forward anyway, as long as providers initially introduce caps and consumption billing at prices that do not impact the majority of customers… at first. In uncompetitive markets, Cisco predicts customers will eventually pay more, boosting provider revenue. Cisco’s “illustrative example” of usage billing in practice set prices at $45 a month for up to 50GB of usage, $60 a month for 50-100GB, $75 for 100-150GB, and $150 a month for unlimited access — more than double what customers typically pay today for flat rate access.

Usage billing arrives right on time to effectively handle online video, which increasingly threatens revenue from cable television packages.

Sandvine’s new traffic measurement report notes the increasing prominence of online video services like Netflix, YouTube, Hulu, and Amazon Video.

“As with previous reports, Real-Time Entertainment (comprised of streaming video and audio) continues to be the largest traffic category on virtually every network we examined, and we expect its continued growth to lead to the emergence of longer form video on mobile networks globally in to 2014,” Sandvine’s report noted.

Sandvine found that over half of all North American Internet traffic during peak usage periods comes from two services: Netflix and YouTube. YouTube globally is the leading source of Internet traffic in the world, according to Sandvine.

An old excuse for usage caps on “data hogs” – peer-to-peer file-sharing, continues its rapid decline towards irrelevance, now accounting for less than 10 percent of total daily traffic in North America. A decade earlier, file swapping represented 60 percent of Internet traffic.

Cisco’s answer for the evolving world of popular online applications is a further shift in broadband pricing towards “value-based tiers” that monetize different online applications by charging broadband users extra when using them. Cisco is promoting an idea that well-enforced Net Neutrality rules would prohibit.

Citing the bottled water market, Cisco argues if some customers are willing to pay up to $6 for a liter of trendy Voss bottled water, flat rate “one price fits all” broadband is leaving a lot of money on the table. With the right marketing campaign and a barely competitive marketplace, providers can charge far higher prices to get access to the most popular Internet applications.

“Research from British regulator Ofcom shows that consumers are becoming ‘addicted’ to broadband services, and heavy broadband users are willing to pay more for improved broadband service options.”

Wharton School professors Jagmohan Raju and John Zhang concluded price is the single most important lever to drive profitability.

The political implications of blaming phantom Internet growth and manageable upgrade costs for the implementation of usage caps or usage-based billing is uncertain. Even the “data hog” meme providers have used for years to justify usage caps is now open to scrutiny. Sandvine found the top 1% of broadband users primarily impact upstream resources, where they account for 39.8% of total upload traffic. But the top 1% only account for 10.1% of downstream traffic. In fact, Apple is likely to provoke an even larger, albeit shorter-term impact on a provider’s network from software upgrades. When the company released iOS7, Apple Updates immediately became almost 20% of total network traffic, and continued to stay above 15% of total traffic into the evening peak hours, according to Sandvine.

Some other highlights:

• Average monthly mobile usage in Asia-Pacific now exceeds 1 gigabyte, driven by video, which accounts for 50% of peak downstream traffic. This is more than double the 443 megabyte monthly average in North America.
• In Europe, Netflix, less than two years since launch, now accounts for over 20% of downstream traffic on certain fixed networks in the British Isles. It took almost four years for Netflix to achieve 20% of data traffic in the United States.
• Instagram and Dropbox are now top-ranked applications in mobile networks in many regions across the globe. Instagram, due to the recent addition of video, is now in Latin America the 7th top ranked downstream application on the mobile network, making it a prime candidate for inclusion in tiered data plans which are popular in the region.
• Netflix (31.6%) holds its ground as the leading downstream application in North America and together with YouTube (18.6%) accounts for over 50% of downstream traffic on fixed networks.
• P2P Filesharing now accounts for less than 10% of total daily traffic in North America. Five years ago it accounted for over 31%.
• Video accounts for less than 6% of traffic in mobile networks in Africa, but is expected to grow faster than in any other region before it.

The cable industry believes the majority of America not using the Internet remain offline by choice.

The National Cable Telecommunications Association (NCTA) says the digital divide is not their fault. Price have very little to do with it, according to an NCTA infographic showing just 6% cite “cost” as the main reason they are not signed up for Internet service.

“Cable has made extensive efforts to connect all Americans to the Internet. And while high-speed Internet adoption has rapidly increased in the United States, still too many low-income families remain unconnected and are at risk of falling behind in the global information economy,” writes NCTA blogger John Solit. “Connecting all Americans in order to bridge the digital divide and expand the availability of broadband service remains a national goal embraced by cable companies. In a recent blog post, David L. Cohen, Comcast Executive VP & Chief Diversity Officer said, “[I]n just over two years through our Internet Essentials program, Comcast has connected an estimated 1 million low-income Americans, or more than 250,000 families, to the Internet at home.”

The “digital divide” — broadband have’s and have-nots — has been a regular topic among regulators and legislators for more than a decade. A suspicion that cost is a major factor keeping people from signing up could result in legislation compelling providers to offer low-cost Lifeline broadband service to the income-disadvantaged. In the last three years, the cable industry has tried to fight off that type of approach with voluntary programs that selectively target non-customers.

Comcast’s Internet Essentials provides 5/1Mbps service for $9.95 a month, but signing up isn’t easy.

The discounted service is available only to families with school-age children that qualify for the school lunch aid program. Comcast often promotes its discount program to legislators and others in the industry as an example of the voluntary effort the cable industry is making to solve the digital divide. Target customers who most likely qualify for the service are not going to learn about it through television ads or cable company mailers targeting low-income zip codes. Most of Comcast’s marketing effort is in cooperation with area schools.

Ironically, Comcast’s Internet Essentials actually forces some people to temporarily give up Internet access if they want to participate.

Customers must be current on their Comcast bills and must not have a subscription to any Comcast Internet service for the last 90 days to receive consideration. If you already have Comcast broadband service, you must disconnect it for at least three months before you can apply for Internet Essentials.

This requirement is designed to protect Comcast’s bottom line. Why offer a discount to customers already willing to sacrifice for home Internet service at Comcast’s regular price?

“How is this helping me and my family out,” asks one Tennessee customer who tried to sign up for Internet Essentials but couldn’t because they were already paying for Comcast Internet service. “The Comcast representative said that if I wanted to be enrolled in the program I would have to discontinue my Internet service for 90 days and then reapply. We have the Economy Internet Promotion and pay $19.95 per month. After the promotion ends our fee will increase to $26.95 a month. In our current economy and financial situation saving $17 per month would greatly help our family to keep our service. I will not rest until I find a solution to this problem. My children at least deserve that.”

Comcast also makes it its business to check your household to make sure at least one child still qualifies for the National School Lunch Program. The company reserves the right to immediately cancel service if you miss a payment or move. Participants also must not upgrade, alter or change Comcast service for any reason or risk being removed from the program.

Comcast’s Wi-Fi Ban

Shapiro

One of the most annoying conditions of the Internet Essentials program is that it does not allow Wi-Fi access.

Phil Shapiro, who refurbishes donated computers and distributes them to needy families regularly runs into Comcast’s Wi-Fi ban — a significant issue for larger families that need to be online concurrently.

“I’ve taken three donated computers to [one] family and I was expecting to get them all online with this cable modem service,” Shapiro tells The Hechinger Report.  “But not so fast. Comcast’s telephone tech support tells me that Internet Essentials users cannot use Wi-Fi with their cable modems. Nowhere in Comcast’s printed literature or on the website is this limitation mentioned. Naturally, families who sign up for Internet Essentials get confused about this, but they are not well positioned to advocate for their needs.”

Charlie Douglas, a Comcast spokesperson, confirms that Internet Essentials does not offer Wi-Fi service, although he noted a customer could theoretically buy a wireless router themselves and use that to provide wireless connectivity. But that isn’t what Comcast’s technical support team recommends. Any deviation from the terms of the service offered to Internet Essentials customers could lead to an immediate disqualification. Comcast defines Internet Essentials as a wired service, including one outlet and a basic (not wireless) modem.

“The family that I was helping patiently waited for me while I talked on the phone,” said Shapiro. “They could see that I spoke very politely with the tech support person. They also saw that I had reached the end of my patience.”

A representative told Stop the Cap! Internet Essentials accounts have insufficient bandwidth and speed for Wi-Fi service, so it is not offered.

Shapiro dismisses Comcast’s explanation. Many public Wi-Fi networks offer even slower service than Comcast.

Douglas defended Comcast’s policy noting families served by the program don’t miss Wi-Fi and don’t need it.

But those using tablets might disagree, and with an increasing number of students using them as school textbooks are gradually phased out, Wi-Fi will only grow in importance.

Many large school districts, including Los Angeles, are introducing Wi-Fi only tablets for student use because they are cheaper and easier to support. When Internet Essentials participants ask about Wi-Fi access with the discounted broadband service, Comcast representatives are trained to up sell customers out of the program and sign them to a more costly plan than includes built-in Wi-Fi support.

Customers can successfully, if covertly, connect a router with Wi-Fi capability to the basic cable modem supplied by Comcast and configure wireless Internet Essentials service. But there are no guarantees Comcast will not give customers grief about it, if they wish.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Comcast Internet Essentials Key Milestones 11-13.mp4[/flv]

Comcast produced this video marking the start of the second year of its Internet Essentials program. Chicago Mayor Rahm Emanuel gushed Internet Essentials was “top of the line” Internet access. He was joined by other recognizable political leaders and the former chairman of the Federal Communications Commission Julius Genachowski. (2:47)

Just a few years after cable systems began upgrading to DOCSIS 3.0 to improve broadband speeds and performance through channel bonding, CableLabs is set to formalize next-generation DOCSIS 3.1 by the end of this month, allowing cable broadband speeds to reach well into the gigabits.

“We made a fairly bold assertion in October of last year that we would have them substantially complete and publicly issued by the end of 2013,” Matt Schmitt, director of DOCSIS at CableLabs said this morning. “This is quite a bit faster than we have ever pulled off before. It’s not a small project to do a new DOCSIS with a new physical layer underneath. It was an industry-wide effort and I tell you what, they’ve been busting their tails.”

Schmitt

Schmitt discussed the new standard at the DOCSIS 3.1 Engineering Pre-conference Symposium held in Atlanta.

The new standard for cable broadband was designed to protect the industry from competing technologies — notably fiber to the home service which offers immediate gigabit broadband capacity. DOCSIS 3.1 was designed to support up to 10/1Gbps speeds using larger spectrum bands cable operators are opening for data services after switching off analog cable television channels.

Cable operators are not expected to offer gigabit broadband service in most areas. Many operators still dedicate the largest amount of their available bandwidth to analog cable television channels. But DOCSIS 3.1 provides scalability as operators move towards digital television delivery. It also offers 50 percent more data capacity over DOCSIS 3.0 over the same spectrum.

DOCSIS 3.1 uses a new modulation scheme coupled with more robust forward error correction (FEC) to improve efficiency and performance. The new standard dumps Reed-Solomon FEC in favor of low-density parity check (LDPC) technology. DOCSIS 3.1 relies on orthogonal frequency division multiplexing (OFDM), also used by wireless carriers to boost performance over limited spectrum.

Despite the new standard, DOCSIS 3.1 will be fully backwards-compatible with DOCSIS 3.0, which means customers buying their own cable modems will not find them obsolete anytime soon. When a customer decides they want faster broadband speeds, the cable operator can advise if a new DOCSIS 3.1 modem is needed. In most cases, it will not.

Most cable operators are expected to take at least a year lab testing the new technology and waiting for vendors to incorporate support for DOCSIS 3.1 in future generations of cable broadband equipment.

Comcast, one of the more speed-aggressive cable operators likely to be an early adopter of DOCSIS 3.1, indicated it would probably be 2015 before customers can buy DOCSIS 3.1-powered products. But Comcast will begin trials next year, according to Jorge Salinger, vice president of access architecture.

Time Warner Cable plans to use the next generation of DOCSIS as they migrate from conventional MPEG-based video delivery to IP video transport on a Converged Cable Access Platform (CCAP). But Time Warner Cable customers don’t usually get the fastest possible broadband speeds. For most of the country, the cable operator’s top speed is 50/5Mbps.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Speaker Interview with Ralph Brown of Cable Labs at Cable Congress 2013 in London 3-11-13.mp4[/flv]

Ralph Brown, chief technology officer of CableLabs, talked about DOCSIS 3.1 and the cable industry’s future technology needs in this interview from March 2013. (5 minutes)