Down the rabbit hole

Google has quietly announced an indefinite suspension of further fiber expansion as it prepares to downsize fiber division employees and re-evaluate its fiber business model.

In a blog post tonight from Craig Barratt, senior vice president of Alphabet and CEO of Google’s Access division, it becomes clear Google is rethinking its entire fiber strategy and is likely moving towards fixed wireless technology going forward:

Now, just as any competitive business must, we have to continue not only to grow, but also stay ahead of the curve — pushing the boundaries of technology, business, and policy — to remain a leader in delivering superfast Internet. We have refined our plan going forward to achieve these objectives. It entails us making changes to focus our business and product strategy. Importantly, the plan enhances our focus on new technology and deployment methods to make superfast Internet more abundant than it is today.

Barratt outlines the immediate implications of Google’s dramatic shift:

• In the cities where we’ve launched or are under construction, our work will continue;
• For most of our “potential Fiber cities” — those where we’ve been in exploratory discussions — we’re going to pause our operations and offices while we refine our approaches. In this handful of cities that are still in an exploratory stage, and in certain related areas of our supporting operations, we’ll be reducing our employee base.

Barratt

Barratt himself is jumping ship (or was pushed). He announced in his blog entry he is “stepping away” from his CEO role, but will remain as an “adviser.”

Observing Google’s recent fiber efforts and acquisitions, it seems clear Google no longer thinks fiber-to-the-home service is an economically viable solution in light of competitors like AT&T rolling out increasing amounts of fiber and the cable industry is on the cusp of launching DOCSIS 3.1, which will dramatically boost internet speeds without a substantial capital investment.

Google’s investors have been lukewarm about the company’s economic commitments relating to its fiber broadband networks. Often built from the ground up, Google’s fiber construction complexities also include trying to navigate costly roadblocks established by their competitors (notably Comcast and AT&T), dealing with bureaucracies and red tape even in states where near-total-deregulation was supposed to make competition easy. Google Fiber has also not proved to be a runaway economic success, and now faces more challenges in light of upgrades from their competitors. Cable companies have slashed prices for customers threatening to cancel and have added free services or upgrades to persuade customers to stay, and Google’s proposition of selling consumers $70 gigabit access has proved tougher than expected.

It is highly likely the future of Google’s Access business will be deploying wireless broadband solutions powered by Webpass, a company Google acquired earlier this year. Webpass uses a high-speed point to point wireless transmission system the company claims can deliver gigabit broadband access to customers in multi-dwelling buildings and other urban areas. Webpass sells access for $60 a month (discounted to $550/yr if paid in advance) for 100Mbps-1,000Mbps speed depending on network density and capacity in the customer’s building. So far, Webpass has not been able to guarantee speed levels, and some customers report significant variability depending on their location and network demand.

Webpass’ wireless infrastructure costs a fraction of what Google has coped with building fiber to the home networks, and the installation of point-to-point wireless antennas on participating buildings has been less of a regulatory nightmare than digging up streets and yards to lay optical fiber.

But despite Webpass’ claim its performance is comparable to fiber, its inability to guarantee customers a certain speed level and its tremendous performance variability from 100 to 1,000Mbps exposes one of the weaknesses of fixed wireless networks. At a time when capacity is king, only fiber optic networks have shown a consistent ability to deliver synchronous broadband speeds that do not suffer the variability of shared networks, poor antenna placement/signal levels, or harmful interference.

There is room for wireless technology to grow and develop, as evidenced by the wireless industry’s excitement surrounding future 5G networks and their ability to offer a home broadband replacement. The emergence of 5G competition is almost certainly also a factor in Google’s decision. But even AT&T and Verizon acknowledge a robust 5G network will require a robust fiber backhaul network to support both speed and user demand. The more users sharing a network, the slower the speed for all users. No doubt Webpass has made the same assumption that cable operators did in the early days of DOCSIS 1 — current internet applications won’t tax a network enough to create a traffic logjam that would be noticed by most customers. The phone companies also learned a similar lesson trying to serve too many DSL customers from inadequate middle mile networks or traffic concentration points. (Some phone companies are still learning.)

Whether it was yesterday’s peer-to-peer file sharing or today’s online video, capacity matters. That is why fiber broadband remains the gold standard of broadband technology. Fiber is infinitely upgradable, reliable, and robust. Wireless is not, at least not yet. But technology arguments rarely matter at publicly-traded corporations that answer to Wall Street and investors, and it appears Google’s backers have had enough of Google Fiber.

Stop the Cap!’s View

At Stop the Cap!, we believe these developments further the argument broadband is an essential utility best administered for the public good and not solely as a profit-motivated venture. The path to fiber to the home service in rural, suburban, and urban communities has and will continue to come from a mix of private and public utilities, just as local public and private gas and electric companies have served this country for the last century. Where there is a business model for fiber to the home service that investors support, there is a for-profit fiber provider. Where there isn’t, now there is often no service at all. So far, the FCC in conjunction with Congress has seen fit to solve broadband availability problems by bribing private providers into offering service (usually low-speed DSL that does not even meet the FCC’s definition of broadband) with cash subsidies, tax write-offs, or occasional tax abatement schemes. Imagine if we followed that model with the nation’s public roads and highways. We would today be paying tolls or a subscription to travel down roads built and owned by a private company often financed by tax dollars.

Not every product or service needs to earn Wall Street-sized profits. Nobody needs to get rich selling water, gas, and electricity… or broadband. Public broadband networks can and should be established wherever they are needed, and they should be priced to recover their costs as well as expenses that come from support, billing, and ongoing upgrades. Naysayers like to claim municipal broadband is socialism run wild or an instant economic failure, yet the same model has provided Americans with reliable and affordable gas, electricity, and clean water for over 100 years.

Maine was made for municipal broadband.

In New York, publicly owned/municipal utilities often charge a fraction of the price charged by investor-owned utilities. In Rochester, where Stop the Cap! is headquartered, one need only ask a utility customer if they would prefer to pay the prices charged by for-profit Rochester Gas & Electric or live in a suburb where a municipal provider like Fairport Electric or Spencerport Electric offers service. RG&E has charged customers well over 10¢ a kilowatt-hour when demand peaks (along with a minimum connection charge of over $21/mo and a “bill issuance charge” of 72¢/mo). Spencerport Electric charges 2.9¢ a kilowatt-hour and a connection charge of $2.66 a month, and they issue their bills for free. There is a reason real estate listings entice potential buyers by promoting the availability of municipal utility service. The same has proven true with fiber-to-the-home broadband service.

The economic arguments predicting doom and gloom are far more wrong than right. Municipal utilities are often best positioned to offer broadband because they already have experience providing reliable service and billing and answer to the needs of their local communities. Incompetence is not an option when providing reliable clean water or electricity to millions of homes and customers have rated their public utilities far superior to private phone or cable companies.

Google’s wireless future may prove a success, but probably only in densely populated urban areas where a point-to-point wireless network can run efficiently and profitably. It offers no solution to suburban, exurban, or rural Americans still waiting for passable internet access. Clearly, Google is not the “free market” solution to America’s pervasive rural broadband problem. It’s time to redouble our efforts for public broadband solutions that don’t need a seal of approval from J.P. Morgan or Goldman Sachs.

Only half of CenturyLink’s customers in well-populated areas formerly served by Qwest can buy broadband service at 40Mbps or higher, while rural customers fare considerably worse with less than 25% able to get High Speed Internet at those speeds.

Customers have noticed and at least 65,000 canceled their broadband service with the phone company in the second quarter of this year, most presumably switching to their area’s cable operator.

“CenturyLink is by far the most abysmal telephone company I’ve ever had to deal with and I’m 63 years old,” shares Glen Canby in Arizona. Canby is a retired telephone company engineer that spent 40 years with a larger phone company serving the midwestern U.S.  “Their reviews online echo my own experiences, which have ranged from being quoted one price while being billed another, being locked into a term contract you didn’t ask for, and getting only a fraction of the speed they claim to sell.”

Canby is counted as one of CenturyLink’s 40Mbps-qualified customers, yet he actually receives less than 6Mbps service.

But that isn’t what CenturyLink tells the Federal Communications Commission. In a semi-annual broadband deployment report, the company claimed 51 percent of their customers in urban and suburban former Qwest service areas can subscribe to 40Mbps DSL or higher. But whether a customer is “qualified” to buy 40Mbps service is not the same as actually getting the speeds the company markets.

CenturyLink attempts to cover their claims with fine print attached to their FCC submission: “The numbers shown in this chart reflect the percentages of households served by DSLAMs that are capable of providing the specified broadband speeds.” (A DSLAM is a network device typically used to extend faster DSL speeds to customers by reducing the amount of copper wiring between the telephone company’s central office and the customer’s home. Customers in a neighborhood typically share space on a DSLAM, in effect sharing a single connection back to the phone company.)

“That’s clever of them, because of course the DSLAM is just one link in the chain that ends with the ‘last mile’ between that equipment and my home, and that is where CenturyLink’s phone plant is at its weakest,” Canby writes. “I spent 20 years at a phone company dealing with last-mile DSL speed issues, so they cannot fool me.”

Canby blames the condition of CenturyLink’s infrastructure between the DSLAM serving him and his home for the problems, as well as overselling DSL service by packing too many customers onto a single DSLAM.

“It might be 40Mbps service at the remote end, but it drops to around 6Mbps on a good day by the time it reaches my house,” Canby complains. “Once the sun goes down, the speed drops to 3Mbps, which is a classic case of overselling to me because too many people are trying to share one connection at the same time. It has been this way since 2008 according to my neighbors.”

Back then, phone service was provided by Qwest, the former Baby Bell providing service in 14 sparsely populated western U.S. states — Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. Qwest was acquired by CenturyLink in 2011.

CenturyLink has promised to improve broadband speeds for former Qwest customers, but much of what counts as progress has been in more urban areas, while rural customers continue to languish. The company admits just 21.9 percent of rural households can get 40Mbps service. Only 47.6% can buy 12Mbps, 61.3% can get 5Mbps, and 83% can subscribe to 1.5Mbps. That leaves 17% of former Qwest customers with no broadband options at all. CenturyLink did not break out the percentage of customers that meet the FCC’s 25Mbps minimum speed definition of broadband.

“This is why CenturyLink loses customers to cable operators who have no problems trying to deliver internet access over their network, because it was built to support more bandwidth,” Canby shares. “They can usually deliver the same internet speed to customers no matter how far out they live while phone companies deal with a network built for making phone calls, not data.”

Company officials recognize they could do better and have promised investors another 2.5 million customers will be able to reach 40Mbps by the end of 2017. By the end of the year after that, CenturyLink hopes to reach 85% of customers with VDSL2, bonding, and vectoring technology to achieve 40Mbps service for most customers in their top 25 markets. But rural customers are likely to left waiting longer because of the costs to upgrade Qwest’s copper-based network, especially in smaller states like Idaho, the Dakotas and Wyoming.

“The only answer is cable or fiber broadband, and if you live in a small community it could be years before CenturyLink gets around to you,” Canby writes. “If it’s the same story all over town, I’d start advocating for a community-owned fiber network and not sit around and wait for CenturyLink to act, especially if there is no cable company in town.”

Rep. Calfee

“The sheer audacity of Charter Communications’ offer of free airtime to legislators following the defeat of a broadband access bill is breathtaking,” wrote the editors of the Knoxville News Sentinel in a heated editorial this week. “The spectacle of lawmakers accepting the offer would be revolting.”

The newspaper was responding to the optics of Charter Communications’ generous offer of free airtime for politicians willing to record “public service announcements” just a day after the Tennessee House Business & Utilities Subcommittee killed a bill that would have allowed public utilities to expand fiber broadband service outside of their current electric service area. If that bill became law, it had the potential of giving Charter the formidable competition AT&T, Frontier Communications, and CenturyLink have failed to deliver in Tennessee.

In an election year, anything that gives politicians exposure to voters is worth its weight in gold, which is why taxpayer-sponsored “newsletters” and “voter updates” fill voters’ mailboxes a few months before Election Day. Charter’s plan to saturate subscribers with dubious “PSAs with Politicians” during ad breaks is harder to ignore than another piece of campaign junk mail destined for the recycle bin.

Rep. Daniel

Charter’s vague explanation it was going to offer the airtime before the Subcommittee vote only makes the scandal worse, because it means lawmakers were given advance notice they could be as well-recognized as Henry “The Fonz” Winkler selling reverse mortgages, circus animals and cheerleaders drumming up business for local car dealerships, and kids night at the local family restaurant — all too common tenants of the “local ad insertion” space cable companies get to make more money (or in this case win/reward influence) on the side.

But Charter’s plan appears to be backfiring, drawing unwanted attention on a cable operator Tennessee loves to hate. But more importantly, it gave the Knoxville press an opportunity to remind voters who the real villains of competition are: Republican Reps. Kent Calfee of Kingston and Martin Daniel of Knoxville — two local lawmakers on the Subcommittee voting with Charter, AT&T, and Comcast against their constituents pleading for more cable competition.

The local hero? Rep. Art Swann (R-Maryville) who voted yes (e-mail him a thank you note). He predicts the bill will be back.

The News Sentinel regards the love affair between Charter and lawmakers as compelling as a lunch date with Limburger cheese:

Actually, the stench emanating from the Capitol would indicate something worse than just bad appearances. Tempting lawmakers with free airtime during an election year — even if the commercial technically would not be a campaign ad — is like waving a treat above the snout of an obedient dog.

Charter has not commented on the matter, but its offer certainly gives at least the appearance of trading airtime for votes; surely legislators know better than to take him up on the offer. Tennesseans must hold lawmakers accountable if they do.

Readers can start by telling Reps. Calfee and Daniel they are watching them very closely on this issue and expect them to support public utility broadband expansion when the issue comes before them next time:

Entrenched telecom industry lobbyists and a legislature enriched by their campaign contributions chose the interests of AT&T, Comcast, and Charter Communications over the broadband needs of rural Tennessee, killing a municipal broadband expansion bill already scaled down to little more than a demonstration project.

The Tennessee House Business and Utilities Subcommittee voted 5-3 Tuesday to end efforts to bring much-needed Internet access to rural Hamilton and Bradley counties, long ignored or underserved by the state’s dominant telecom companies. Rep. Kevin Brooks’ (R-Cleveland) original bill would have allowed Chattanooga-based EPB and other publicly owned utility services to expand fiber broadband and television service to other electric co-ops around the state.

Realizing his bill would be voted up or down by members of a committee that included one former AT&T executive and others receiving substantial campaign contributions from some of Tennessee’s largest phone and cable companies, he reduced the scale of his own bill to a simple demonstration project serving a limited number of customers.

The bill failed anyway, in a vote that took less than a minute.

The Chattanooga Times Free Press described the scene:

Rep. Marc Gravitt (R-East Ridge) voted for Brooks’ amendment and Rep. Patsy Hazlewood (R-Signal Mountain), a one-time AT&T executive, voting against it.

As Rep. Kent Calfee (R-Kingston), the subcommittee’s chairman, prepared to move on to the next bill, he suddenly realized the original bill remained before the panel.

“I’m sorry,” Calfee, who voted against the amendment, told Brooks as the Cleveland lawmaker turned to leave. “It’s the amendment [that failed]. Is there any need to vote on the bill?”

Brooks replied, “The amendment makes the bill. I’d love a vote on the bill.”

“Sorry about that,” Calfee said.

And that was that.

Residents and business people alike in northern Hamilton and portions of Bradley counties say they either have no service, lousy service or wireless service that makes it very expensive to upload and download documents for work and school.

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tenn.

“It’s a testament to the power of lobbying against this bill and not listening to our electorate,” Brooks told reporters. “The voice of the people today was not heard. And that’s unfortunate.”

Brooks’ bill did attract considerable interest – from telecom industry lobbyists who flooded the state legislative offices with a mission of killing it. The Tennessee newspaper said a “platoon of lobbyists and executives, including AT&T Tennessee President Joelle Phillips,” poured into the House hearing room or watched on nearby video screens to scrutinize the vote.

“I heard they hired 27 lawyers to fight,” Brooks said.

Rural Tennessee Republicans were disappointed by the outcome, which leaves substantial parts of their districts unwired for broadband.

“[This] was the perfect opportunity for EPB to be a pilot and to prove they can do what they say they can do,” said Rep. Dan Howell (R-Georgetown). “And if they can’t do it, it’s a perfect opportunity to put it to rest forever. They wouldn’t even let us do a pilot to prove that EPB can do what it claimed.”

Brooks

Rep. Mike Carter (R-Ooltewah), also has a bill being held up in the legislature that would allow expansion of public broadband with the consent of citizen members of co-ops and elected leaders of the rural utilities.

Carter didn’t seem too surprised municipal broadband bills like his were being delayed or killed in the state legislature at the behest of AT&T and other companies.

“You just don’t go up against Goliath unless you have your sling and five stones. I just didn’t have my five stones today,” Carter said.

AT&T declared the bill was flawed, arguing in a statement it was not opposed to municipal broadband, so long as it was targeted only to customers unserved by any other provider. AT&T complained Brooks’ bill lacked language protecting them from unwanted competition.

“None of the bills considered … has any provision that would limit government expansion to unserved areas or even focus on those areas,” AT&T wrote.

Less than 24 hours after the vote ended Charter Communications had a special message for members of the legislature.

The cable operator sent invitations to Tennessee lawmakers giving them free airtime to star in their own “public service announcements” that will blanket the screens of Charter cable TV customers, giving the politicians free exposure.

Rep. Calfee’s second largest contributor is AT&T.

Charter’s director of government affairs for Tennessee was the executive extending the invitation.

“As a leading broadband communications provider and cable operator serving customers in Tennessee, Charter is committed to providing compelling public affairs programming and public service announcements,” said Nick Pavlis, Charter’s chief lobbyist in the state and a Knoxville city councilman. “We hope you will take advantage of this opportunity to speak directly to your constituents. Taping times are available on a first-come, first-served basis, so we encourage you to schedule yours as soon as possible.”

“Right now it would appear to those watching from the outside that big business won and big business is now reciprocating,” said Brooks.

Sen. Todd Gardenhire (R-Chattanooga) called the invitation inappropriate.

“Charter has done everything they could possibly do to deny rural Bradley broadband, Internet/content service,” Gardenshire told the Times Free Press.

“Well, my first inclination is to say I’m surprised, coming the day after they killed the broadband bill in committee,” added Howell. “[It is] kind of ironic now that they’re asking people to come forward and make public service announcements about how good their service is. I’m kind of stunned.”

The original DOCSIS 3.1 standard offers up to 10/1Gbps speeds. Adding “full duplex” technology could boost that upstream speed as high as 10Gbps.

The cable industry is seeking to confront one of the strongest selling points of fiber broadband – identical upload and download speeds – by enhancing the DOCSIS 3.1 standard to support “full duplex” technology.

Since inception, cable broadband has been designed to deliver asymmetrical speeds, with priority given to download speeds. To this day, cable systems typically offer customers only a fraction of those fast download speeds for uploads. Cable broadband engineers originally assumed that since the majority of customer broadband usage would be on the download side, less bandwidth was needed for upstream activity. During the late 1990s, it was not uncommon to receive 6-10Mbps of download speed, while being offered just 384kbps for uploads. Today, 1-5Mbps is more typical for entry-level broadband upload speed, but that may no longer be sufficient.

The ongoing buzz for fiber broadband has called out this speed disparity. Most fiber to the home networks offer identical upload and download speeds, which can be as fast as 1,000Mbps or in some cases even faster. That marketing advantage may be costing some cable companies broadband customers. CableLabs, the engineering association of the cable industry, has been tasked with closing that gap and this week announced symmetrical speeds using the newest DOCSIS 3.1 specification are on the fast track and a release schedule could be announced as early as mid-2016.

Dan Rice, CableLabs’s senior vice president of R&D, told Multichannel News “full duplex” will be an extension of DOCSIS 3.1, not a replacement, which guarantees a faster rollout of the enhancement.

The delivery of symmetrical Internet speeds will likely require some cable operators to make hardware changes to their infrastructure. Key to that may be ridding cable plant of multiple amplifiers and filters installed between the cable company’s nearest fiber node and the customer’s home. As cable operators push more reliable fiber further out into their networks, reducing the amount of coaxial copper cable in use, network advancements become easier and less costly.

Whether cable companies will use the enhanced upstream broadband capacity to match their download speeds or just moderately improve them isn’t known. The completion of the enhanced specification will likely give engineers and accountants at each cable company a better idea of how much upload bang for the buck makes the most sense.