Six college towns will benefit from the nation’s first multi-community broadband gigabit deployment, thanks to $200 million in capital funding to get the broadband networks off the ground.

The Gigabit Neighborhood Gateway Program leverages local government, universities, private capital, and the public to jointly support and foster the development of new fiber optic networks.

The new program claims it will offer competitively-priced super-fast broadband through projects that will cover neighborhoods of 5,000-10,000 people and communities up to 100,000 in size.  Selection of the six winning communities will be announced between this fall and next spring.

“Gigabit Squared created the Gigabit Neighborhood Gateway Program to help select Gig.U communities build and test gigabit speed broadband networks with speeds from 100 to 1000 times faster than what Americans have today,” the company said in a statement.

“The United States is behind in the world for Internet speed,” said Mark Ansboury, Gigabit’s president and co-founder. “The goal is to help get us out front for a platform of innovation.”

That platform is certainly not forthcoming from the country’s largest broadband providers, who according to Ansboury have been pulling back on wired infrastructure upgrades in recent years, shifting focus to more profitable wireless networks.

Gigabit Squared defines the next generation of broadband Internet in terms of speed, declaring 2,000Mbps (2Gbps) as the target to achieve.

The winning projects will be sponsored by Gig.U members, which include:

• Arizona State University
• California Institute of Technology
• Case Western Reserve University
• Colorado State University
• Duke University
• Florida State University
• George Mason University
• The Georgia Institute of Technology
• Howard University
• Indiana University
• Michigan State University
• North Carolina State University
• Penn State University
• University of Alaska – Fairbanks
• University of Arizona
• University of Chicago
• University of Colorado – Boulder
• University of Florida
• University of Hawaii
• University of Illinois
• University of Kentucky
• University of Louisville
• University of Maine
• University of Maryland
• University of Michigan
• University of Missouri
• University of Montana
• University of Nebraska – Lincoln
• University of New Mexico
• University of North Carolina at Chapel Hill
• University of Oklahoma
• University of South Florida
• University of Virginia
• University of Washington
• Virginia Tech
• Wake Forest University
• West Virginia University

Blair Levin, executive director at Gig.U, believes private American telecom companies will always be constrained from delivering world class broadband comparable to South Korea or Japan because of Wall Street opposition to the investment required to construct them. In the eyes of investors, today’s slower networks, in their estimation, do just fine.

Gig.U believes that they have a solution, at least for towns with a sizable university system that can serve as host of the next generation broadband network:

First, any community that wants its residents to have access to a network that delivers world-leading bandwidth can do so. The barrier is not technology or economics. The barrier is organization; specifically, organizing demand and improved use of underutilized assets, such as rights of way, dark fiber, or in more rural areas, spectrum. The responses identified a multitude of ways local communities can improve the private investment case by lowering investment and risk, and increasing revenues for private players willing to upgrade or build new networks without budget outlays from the local government.

Second, the responses confirmed that university communities have the easiest organizing task and greatest upside. Their density, demographics and demand make the current economics more favorable for an upgrade than other communities. For example, the high percentage of the population in university communities living in multiple dwelling units makes the economics of an upgrade far more favorable than for communities composed largely of single-family homes. With the growing importance of Big Data for the economy and the society, university communities are the natural havens for such enterprises to be born and prosper. Through the Gig.U process, our communities are already exploring more than a half-dozen paths to achieve an upgrade; paths that will be replicable for others and will deliver a major step forward in providing America a strategic broadband advantage.

Outside of a handful of upstart private competitors like California-based Sonic.net, most fiber broadband expansion come from private companies like Google — building an experimental fiber-to-the-home network in Kansas City, community-owned broadband services coordinated by local town or city government, co-op telecommunications companies owned by their subscribers, or municipal utilities.

While those efforts are typically committed to the concept of “universal service” — wiring their entire communities — the Gig.U project targets funding only for networks in and around university campuses.

The New America Foundation builds on Gig.U’s premise in its own recent report, “Universities as Hubs for Next Generation Networks,” which argues affordable expansion of broadband can win community support when the public has the right to also benefit from those networks. While Gig.U’s approach suggests the project will target fiber broadband directly to the homes qualified to receive it, the New America Foundation supports the construction of mesh wireless Wi-Fi networks to keep construction costs low for neighborhoods targeted for service.

An earlier project in Orono and Old Town, Maine may afford a preview of Gig.U’s vision, as that collaboration between the University of Maine and private fiber provider GWI is already in its construction phase. For those lucky enough to live within range of the fiber project, broadband speeds will far exceed what incumbents Time Warner Cable and FairPoint Communications deliver. FairPoint has fought similar projects (and GWI specifically) for years.

Will private providers object to the Gig.U effort to win local governments’ favor in the six cities eventually chosen for service? History suggests the answer will be yes, at least to the extent local cable and phone companies demand the same concessions for easy pole access, reduced pole attachment fees, and easing of zoning restrictions and procedures Gig.U project coordinators expect.

Levin has stressed Gig.U projects are based on university and private funding sources, not taxpayer dollars. That may also limit how much objection commercial providers may be able to raise against the projects.

[flv]http://www.phillipdampier.com/video/WABI Bangor Orono Maine Getting Faster Service 5-16-12.flv[/flv]

WABI in Bangor previews the new gigabit broadband network being constructed in Orono and Old Town, Maine.  (2 minutes)

What capacity crisis? This is about the money.

Yesterday’s news that Verizon Wireless plans to terminate the grandfathered unlimited data plans of their existing customers, forcing them to choose from a range of potentially more expensive shared data plans, would seem to be part and parcel of the cell phone industry’s need to move away from all-you-can-eat data to preserve what little spectrum they have to handle wireless data growth.

AT&T’s Randall Stephenson is on record stating AT&T has been hiking prices because of the imminent spectrum crisis and its inability to manage it with a buyout of T-Mobile:

“We’re running out of the airwaves that this traffic rides on,” Stephenson said. “There is a shortage of this spectrum. The more competitors you have, the less efficient the allocation of spectrum will be. It’s got to change. I don’t think the market’s going to accommodate the number of competitors there are in the landscape.” Stephenson noted AT&T’s data prices have increased 30% since the deal was killed.

“In a capacity-constrained environment we will manage usage-based data plans, increased pricing and managing the speeds of the highest volume users. These are all logical and necessary steps to manage utilization,” Stephenson said about AT&T’s rationing plans.

Over at Verizon Wireless, the announced end of unlimited data carried no such warnings of imminent wireless spectrum doom.  In fact, chief financial officer Fran Shammo on Wednesday said Verizon was just fine with spectrum and capacity for at least the next two years, if not longer (underlining ours):

“Well, I think prior to the deal that we announced with the cable companies and the acquisition of spectrum, we were saying that we were going to need a spectrum — we were going to need more spectrum by 2015. With the approval of this deal now, with the AWS, we think we are in very good shape here beyond 2015.

“In addition, the way our 3G spectrum is in individual slices, it is going to be very efficient for us to take slices out and re-appropriate that to the 4G technology. So I think that through that spectrum efficiency, also I think that there will be some help from the manufacturers in getting more equipment out there that utilizes spectrum more efficiently, although I don’t think that solves the problem, the industry is going to need more spectrum in the future because of the way that we see the guide path of consumption. But I think right now, we are in pretty good shape for at least the next several years.

[…] “So from a spectrum perspective, I think we are absolutely fine.”

Verizon's banking on more revenue when "unlimited data" is banished for good.

In fact, Verizon Wireless plans to reduce its spending on infrastructure projects designed to expand and enhance its wireless network, starting with its 3G service. Frammo (underlining ours):

“And now what you’re seeing is, if you will, a discontinued investment in 3G. Now we will have to continue to invest in that 3G from a maintenance and reliability perspective because we still have 90 million customers on that, but no more capacity or expansion of the 3G network. Our effort is going into 4G now and what I would say to you is look at Verizon on a total capital basis and I would say flat to slightly down. If you look at the components, what you will see is wireless decreased $850 million in the first quarter and that was because of the 3G buildout last year and not this year. But I think on a year-over-year basis, you could look to flat to down and that trend should continue.”

So what are Verizon’s primary goals in the near future? Increasing revenue. Frammo (underlining ours):

“So obviously, our goal is to increase cash flow. We came out of the first quarter with a $1.7 billion increase in our cash flow year-over-year, managing that CapEx. Our dividend policy is extremely important to us.“

Verizon Wireless handed out this statement this morning regarding the imminent demise of unlimited data:

“As we have stated publicly, Verizon Wireless has been re-evaluating its data pricing structure for some time, Customers have told us that they want to share data, similar to how they share minutes today. We are working on plans to provide customers with that option later this year.

“We will share specific details of the plans and any related policy changes well in advance of their introduction, so customers will have time to evaluate their choices and make the best decisions for their wireless service. It is our goal and commitment to continue to provide customers with the same high value service they have come to expect from Verizon Wireless.”

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WWLP Springfield Verizon Wireless Eliminating Unlimited Data 5-16-12.mp4[/flv]

WWLP in Springfield, Mass. explains to viewers the end of “unlimited data” from Verizon Wireless is near.  (1 minute)

“Somehow in the last 100 years, every time there is a problem of getting more spectrum, there is a technology that comes along that solves that problem. Every two and a half years, every spectrum crisis has gotten solved, and that’s going to keep happening. We already know today what the solutions are for the next 50 years.” — Martin Cooper, inventor of the portable cell phone

Despite the fear-mongering by North America’s wireless phone companies that a spectrum crisis is at hand — one that threatens the viability of wireless communications across the continent, some of the most prominent industry veterans dispute the public policy agenda of phone companies like AT&T, Verizon, Bell, and Rogers.

Martin Cooper ought to know.  He invented the portable cell phone, and remains involved in the wireless industry today.  Cooper shrugs off cries of spectrum shortages as a problem well-managed by technological innovation.  In fact, he’s credited for Cooper’s Law: The ability to transmit different radio communications at one time and in the same place has grown with the same pace since Guglielmo Marconi’s first transmissions in 1895. The number of such communications being theoretically possible has doubled every 30 months, from then, for 104 years.

National Public Radio looks back at the earliest car phones, which weighed 80 pounds and operated with vacuum tubes. Innovation, improved technology, and lower pricing turned an invention for the rich and powerful into a device more than 300,000,000 North Americans own and use today. (April 2012) (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

A traditional car phone from the 1960s.

The earliest cell phones have been around since the 1940s.  St. Louis was the first city in the United States to get Mobile Telephone Service (MTS).  It worked on three analog radio channels and required an operator to make calls on the customer’s behalf. By 1964, direct dialing from car phones became possible with Improved Mobile Telephone Service (IMTS), which also increased the number of radio channels available for calls.

In the 1970s, popular television shows frequently showed high-flyers and private detectives with traditional looking phones installed in their cars.  But the service was obscenely expensive.  The equipment set customers back $2-4,000 or was leased for around $120 a month.  Local calls ran $0.70-1.20 per minute.  That was when a nice home was priced at $27,000, a new car was under $4,000, gas was $0.55/gallon, and a first run movie ticket was priced at $1.75.

With many cities maintaining fewer than a dozen radio channels for the service, only a handful of customers could make or receive calls at a time.  The first “spectrum crisis” arrived by the late 1970s, when car phones became the status symbol of the rich and powerful (the middle class had pagers). Customers found they couldn’t make or receive calls because the frequencies were all tied up.  Some cities even rationed service by maintaining waiting lists, not allowing new customers to have the technology until an existing one dropped their account.

Instead of demanding deregulation and warning of wireless doomsday, the wireless industry innovated its way out of the era of MTS altogether, switching instead to a “cellular” approach developed in part by the Bell System.

[flv width=”412″ height=”330″]http://www.phillipdampier.com/video/ATT Testing the First Public Cell Phone Network.flv[/flv]

In the 1970s, when the first cell phone “spectrum crisis” erupted, the Bell System innovated its way out the the dilemma without running to Congress demanding sweeping deregulation.  This documentary, produced by the Bell System, explores AMPS — analog cell phone service, and how it transformed Chicago’s mobile telephone landscape back in 1979.  (9 minutes)

“Arguing that the nation could run out of spectrum is like saying it was going to run out of a color.” David P. Reed, one of the original architects of the Internet

Instead of one caller tying up a single IMTS radio frequency capable of reaching across an entire city, the Bell System deployed lower-powered transmitters in a series of hexagonal “cells.”  Each cell only served callers within a much smaller geographic area.  As a customer traveled between cells, the system would hand the call off to the next cell in turn and so on — all transparently to the caller.  Because of the reduced coverage area, cell towers in a city could operate on the same frequencies without creating interference problems, opening up the system to many more customers and more calls.

Inventor Martin Cooper holds one of the first portable mobile phones

In Chicago, Bell’s IMTS system only supported around a dozen callers at the same time. In 1977, the phone company built a test cellular network it dubbed “AMPS,” for Advanced Mobile Phone System.  AMPS technology was familiar to many early cell phone users.  It was more popularly known as “analog” service, and while it could still only handle one conversation at a time on each frequency, the system supported better call handling and many more users than earlier wireless phone technology.  By 1979, Bell had 1,300 customers using their test system in Chicago.

AMPS considerably eased the “spectrum crunch” earlier systems found challenging, and subsequent upgrades to digital technology dramatically increased the number of calls each tower could handle and allowed providers to slash pricing, which fueled the spectacular growth of the wireless marketplace.

Yesterday it was voice call congestion, today it is a “tidal wave” of wireless data.  But inventors like Cooper believe the solution is the same: engineering innovation.

“Somehow in the last 100 years, every time there is a problem of getting more spectrum, there is a technology that comes along that solves that problem,” Cooper told the New York Times. “Every two and a half years, every spectrum crisis has gotten solved, and that’s going to keep happening. We already know today what the solutions are for the next 50 years.”

Cooper believes in the cellular approach to wireless communications.  Dividing up today’s geographic cells into even smaller cells could vastly expand network capacity just like AMPS did for Windy City residents in the late 1970s. Using especially directional antennas focused on different service areas, placing new cell towers, innovating further with tiny neighborhood antennas mounted on telephone poles, or building out Wi-Fi networks can all manage the data capacity “crisis” says Cooper.

New technology also allows cell signals to co-exist, even on the same or adjacent frequencies, without creating interference problems. All it takes is a willingness to invest in the technology and deploy it across signal-congested urban areas.

Unfortunately, network engineers are not often responsible for the business decisions or public policy agendas of the nation’s largest wireless companies who are using the “spectrum crisis” to argue for increased deregulation and demanding additional radio spectrum which, in some cases, could be locked up by companies to make sure nobody else can use them.

[flv width=”600″ height=”358″]http://www.phillipdampier.com/video/NY Times Mobile Carriers Warn of Spectrum Crisis.flv[/flv]

The New York Times offers this easy-to-follow primer on wireless spectrum and why it matters (or not) in the current climate of explosive growth in mobile data traffic.  (3 minutes)

“Their primary interest is not necessarily in making spectrum available, or in making wireless performance better. They want to make money.” — David S. Isenberg, veteran researcher, AT&T Labs

Innovation, not wholesale deregulation, allowed the Bell System to solve the spectrum crisis of the 1970s by creating today's "cell system" that can re-use radio frequencies in adjacent areas to handle more wireless traffic.

Spectrum auctions bring billions to federal coffers, but actually deliver a hidden tax to cell phone customers who ultimately pay for the winning bids priced into their monthly bills.  It also makes it prohibitively expensive for a new player to enter the market.  Already facing enormous network construction costs, any new entrant would then face the crushing prospect of outbidding AT&T, Verizon Wireless, Bell or Rogers for the frequencies essential for operation.

As the New York Times writes:

When a company gets the license for a band of radio waves, it has the exclusive rights to use it. Once a company owns it, competitors can’t have it.

Mr. Reed said the carriers haven’t advocated for the newer technologies because they want to retain their monopolies.

Cooper advocates a new regulatory approach at the Federal Communications Commission — one that mandates wireless phone companies start using today’s technology to amplify their networks.

Cooper points to one example: the smart antenna.

Smart antennas direct cell towers to focus their transmission energy towards the specific devices connected to it.  If a customer was using their phone from the southern end of the cell tower’s coverage area, why direct signal energy to the north, where it gets wasted?  New LTE networks support smart antenna technology, but carriers have generally avoided investing in upgrading towers to support the new technology, expected to be commonplace inside new wireless devices within two years.

T-Mobile calls these technology solutions “Band-Aids” that won’t address the company’s demand for more frequencies to manage its network.  But that kind of thinking applied to the mobile phone world of the 1970s would have maintained the exorbitantly expensive IMTS technology discarded decades ago, since replaced by innovation that made more efficient use of the spectrum already on hand.  That innovation also transformed wireless phones from a tool (or toy) for the very wealthy to an affordable success story that now threatens the traditional wired phone network in ways the Bell System could have never envisioned.

[flv width=”412″ height=”330″]http://www.phillipdampier.com/video/Its a Whole New System.flv[/flv]

It’s A Whole New System: AT&T and other wireless phone companies might want to learn the lesson the Bell System was trying to teach their employees back in 1979: Meet Change With Change.  This company-produced video implores the phone company to do more than the same old thing.  No, this video is not “PM Magazine.”  It is about innovation and actually listening to what customers want. With apologies to Mama Cass Elliot, there was indeed a New World Coming — the breakup of the Bell System just five years later.  Don’t miss the diabetic-coma-inducing, sugary-sweet jingle at the end.  Then reach for a can of Tab.  (10 minutes)

Cogeco Cable is cracking down on customers who shop around for a better deal.

After dumping its money-losing Portuguese Cabovisao operation earlier this year, the company is looking to recoup its losses, and Canadian consumers are paying the price.

Chief Executive Louis Audet told investors Cogeco has tightened up promotions, giveaways, and credit standards to weed out bargain hunters and those who ultimately never pay their cable bill.

“If somebody else wants these undesirable customers, they’re theirs for the taking,” Audet said. “There’s too many promotion hoppers out there who are jumping from one supplier to the other.”

Audet

At least 9,000 customers left Cogeco during the second quarter, but that did nothing to hurt Cogeco’s bottom line.  Profits nearly quadrupled to $81.5 million according to Audet, but much of that is due to changes in accounting related to its sold-off Portuguese operation. Closer to home, Cogeco revenue inside Canada grew 12.4% from one year ago to $345.6 million.

Cogeco bought Televisao in 2006 for $465 million.  It sold it in February for just over $59 million.

Cogeco Cable, which serves subscribers in smaller cities and suburbs in Ontario and Quebec, is Canada’s fourth largest cable operator with more than 875,000 cable subscribers. Its biggest competitors are Bell (in Ontario and Quebec) and Telus, which has some landline operations on the Gaspé Peninsula in eastern Quebec.

Most of Cogeco’s promotions and retention offers appeal to customers threatening to take their business to the phone companies. But Audet signaled the promotional pricing had become so aggressive, some customers have learned to bounce back and forth between providers to maintain lower pricing indefinitely.

By tightening up customer promotions, Audet said, the company can achieve a “stable” customer base that pays regular Cogeco prices.

Verizilla

The Communications Workers of America has a new, decidedly low-budget video decrying a spectrum swap between America’s largest cable companies and Verizon Communications that will leave Verizon Wireless stores pitching cable television service from one of Verizon’s cable company competitors.

To the CWA, this is nothing less than the birth of Verizilla, a new monster of a telecommunications company that has capitulated on competing with Big Cable and will instead devour the wireless communications marketplace for itself.  The CWA interest is obvious: many of its employees are responsible for constructing and maintaining Verizon’s now-stalled FiOS fiber to the home network.

From the CWA:

The deal, struck behind the closed doors of America’s corporate boardrooms, poses a threat to consumers and workers. If it goes through, it will be the death knell for competition between cable and telecom companies. Verizon Wireless, Time Warner, Comcast, and other cable companies will become a giant, unregulated quasi-monopoly. Verizon will have no incentive to challenge cable by building FiOS into new areas — meaning less competition, consumer choice, and higher prices for consumers.

Less FiOS also means fewer jobs building, maintaining, servicing, and installing the network. This deal will create a corporate behemoth that will use exclusive quad-play market power to shrink its future workforce.

Worst of all, Verizon Wireless and the cable companies are refusing to come clean about the details of the deal. Even as the FCC and Department of Justice review it, we still don’t know what it means for consumers or workers.

The CWA has so far collected more than 135,000 signatures on its petition opposing the current form of the deal. 

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizilla.flv[/flv]

America, say hello to Verizilla, wreaking reduced investment havoc on Verizon service areas across the northeastern United States.  (2 minutes)