A research report sponsored by the National Cable & Telecommunications Association, the nation’s largest cable lobbying group, has concluded that millions of broadband stimulus dollars are being wasted by the government on broadband projects that will ultimately serve people who supposedly already enjoy a panoply of broadband choice.

Navigant Economics, a “research group” that produces reports for its paying clients inside industry, government, and law firms, produced this one at the behest of a cable industry concerned that broadband stimulus funding will build competing broadband providers that could force better service and lower prices for consumers.

• More than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers. In one of the project areas, more than 98 percent of households are already passed by at least one of these modalities.

• In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high. When existing mobile wireless broadband coverage is taken into account, the $231.7 million in RUS funding across the three projects will provide service to just 452 households that currently lack broadband service.

Navigant’s report tries to prove its contention by analyzing three broadband projects that seek funding from the federal government.  Northeastern Minnesota, northwestern Kansas, and southwestern Montana were selected for Navigant’s analysis, and unsurprisingly the researcher found the broadband unavailability problem overblown.

The evidence demonstrates that broadband service is already widely available in each of the three proposed service areas. Thus, a large proportion of each award goes to subsidize broadband deployment to households and regions where it is already available, and the taxpayer cost per unserved household is significantly higher than the taxpayer cost per household passed.

The cable industry funds research reports that oppose fiber broadband stimulus projects.

But Navigant’s findings take liberties with what defines appropriate broadband service in the 21st century.

First, Navigant argues that wireless mobile broadband is suitable to meet the definition of broadband service, despite the fact most rural areas face 3G broadband speeds that, in real terms, are below the current definition of “broadband” (a stable 768kbps or better — although the FCC supports redefining broadband to speeds at or above 3-4Mbps).  As any 3G user knows, cell site congestion, signal quality, and environmental factors can quickly reduce 3G speeds to less than 500kbps.  When was the last time your 3G wireless provider delivered 768kbps or better on a consistent basis?

Navigant also ignores the ongoing march by providers to establish tiny usage caps for wireless broadband.  With most declaring anything greater than 5GB “abusive use,” and some limiting use to less than half that amount, a real question can be raised about whether mobile broadband, even at future 4G speeds, can provide a suitable home broadband replacement.

Second, Navigant’s list of available providers assumes facts not necessarily in evidence.  For example, in Lake County, Minnesota, Navigant assumes DSL availability based on a formula that assumes the service will be available anywhere within a certain radius of the phone company’s central office.  But as our own readers have testified, companies like Qwest, Frontier, and AT&T do not necessarily provide DSL in every central office or within the radius Navigant assumes it should be available.  One Stop the Cap! reader in the area has fought Frontier Communications for more than a year to obtain DSL service, and he lives blocks from the local central office.  It is simply not available in his neighborhood.  AT&T customers have encountered similar problems because the company has deemed parts of its service area unprofitable to provide saturation DSL service.  While some multi-dwelling units can obtain 3Mbps DSL, individual homes nearby cannot.

Navigant never visited the impacted communities to inquire whether service was actually available.  Instead, it relied on this definition to assume availability:

DSL boundaries were estimated as follows: Based on the location of the dominant central office of each wirecenter, a 12,000 foot radius was generated. This radius was then truncated as necessary to encompass only the servicing wirecenter. The assumption that DSL is capable of serving areas within 12,000 is based on analysis conducted by the Omnibus Broadband Initiative for the National Broadband Plan.

Frontier advertises up to 10Mbps DSL in our neighborhood, but in reality can actually only offer speeds of 3.1Mbps in a suburb less than one mile from the Rochester, N.Y. city line.  In more rural areas, customers are lucky to get service at all.

Cable broadband boundaries were estimated based on information obtained from an industry factbook, which gathered provider-supplied general coverage information and extrapolated availability from that.  But, as we’ve reported on numerous occasions, provider-supplied coverage data has proven suspect.  We’ve found repeated instances when advertised service proved unavailable, especially in rural areas where individual homes do not meet the minimum density required to provide service.

We’ve argued repeatedly for independent broadband mapping that relies on actual on-the-ground data, if only to end the kind of generalizations legislators rely on regarding broadband service.  But if the cable industry can argue away the broadband problem with empty claims service is available even in places where it is not (or woefully inadequate), relying on voluntary data serves the industry well, even if it shortchanges rural consumers who are told they have broadband choices that do not actually exist.

Navigant’s report seeks to apply the brakes to broadband improvement programs that can deliver consistent coverage and 21st century broadband speeds that other carriers simply don’t provide or don’t offer throughout the proposed service areas.  The cable industry doesn’t welcome the competition, especially in areas stuck with lesser-quality service from low-rated providers.

United Arab Emirates

While North American broadband providers complain about the costs of wiring America’s rural expanse, the United Arab Emirates is on track to deliver 100 percent of its citizens with high speed broadband service by the end of next year.

The UAE made fiber optic broadband a priority, despite the fact the individual emirates that make up the federation are often separated by vast, rural salt pans, sand dunes, and mountain regions.

Sultan Bin Saeed Al Mansoori, UAE’s Minister of Economy told attendees at the Abu Dhabi Telecoms CEO Summit that despite the fact the country is already a mature market for telecommunications products, healthy competition is driving providers to temporarily reduce revenue expectations as they invest heavily to deliver better service to the UAE’s 8.3 million residents.

Broadband providers in the UAE already deliver a vastly superior experience than most customers in North America receive, and the country is currently measured as the world’s fifth fastest by Akamai.  The average broadband connection speed in the UAE exceeds 25Mbps, and that is before fiber-to-the-home service becomes available to nearly every home in the Emirates.

Al Mansoori

Providers are spending considerable sums of money to improve their networks to deliver faster, more reliable service to even the most rural communities.

”Customers definitely have gained from this diversity,” noted Al Mansoori.  “For operators, revenues have dropped in the short term but I understand this was something anticipated, and which the industry is well-equipped to eventually absorb.”

The Telecommunications Industry Association (TIA) reports 2011 may be the biggest year ever in communications spending, with the world’s fastest growing telecommunications markets being in the Middle East and Africa.

The UAE’s largest phone company, Etisalat, is now a major player in 18 markets across the Middle East and North Africa and has over 100 million customers.

Al Mansoori noted that fiber-to-the-home service was best equipped to deliver UAE world-class broadband service at an affordable rate to consumers.  He further recognized that robust competition inspired the country’s telecommunications companies to choose that technology to best compete with other players in the market — wired and wireless.

“Superior infrastructure that enables social and economic growth that keeps the UAE in the forefront of technology is an integral part of our development vision,” he declared.

Telefonos de Mexico is known as Telmex, the country's largest telecommunications provider.

Mexico’s largest phone company Telefonos de Mexico SAB is not about to allow themselves to be outgunned by upstart competitors like mobile-phone carrier Grupo Iusacell SA, which is installing fiber to the home broadband service in up to 40 cities offering 100Mbps speeds.  Now they are working on a fiber to the home network of their own, planned to reach up to one million Mexicans by the end of this year.

Mexico’s broadband expansion is coming on all fronts.  Cablevision (no relation to the U.S. company with the same name) is delivering cable broadband service to an increasing number of cities.  But news that consumers will soon have the choice of not one, but two fiber to the home networks has the country buzzing with excitement.

“Fiber-to-the-home is the best technology that exists,” Martin Lara, an analyst at Corp. Actinver SAB in Mexico City told Bloomberg News. “It’s going to be good for the consumer.”

The broadband speeds in Mexico will rapidly exceed those in the United States if the two fiber providers end up in a speed and pricing war .  For now, Telefonos plans on offering packages of 10, 20 and 50Mbps to subscribers.  That may increase to 100Mbps if competitors make an issue about maximum available speeds.  That’s quite a change from traditional DSL packages from Telefonos, which range from 1-5Mbps in most areas.

Upstart Iusacell is Mexico's third largest cell phone provider, but it has big plans for fiber-to-the-home service.

Iusacell, mostly known for its cell phone service, is building its own quad-play of wired fiber broadband, television, and telephone service — wireless and wired.  It’s Totalplay package risks Telefonos’ decades of dominance in the Mexican telecommunications marketplace, so the phone company is investing to compete.  The company’s Telmex landline customers are switching to wireless just like customers in the United States and Canada, so developing an attractive multi-element package is critical to keeping customers.

Mexico’s telecommunications laws are different from those in the United States.  Mexico’s dominant phone company has traditionally been prohibited from offering video services to their customers — a policy designed to protect cable providers and other competitors from heavyweight competition.  Those policies are likely to be revisited as a result of competitive fiber initiatives.  Additionally, Mexican providers have not been required to wire entire communities as part of operating agreements, and many don’t.  Instead, most cable and fiber providers build in lucrative neighborhoods where higher income residents live, often leaving poorer neighborhoods unwired. Foreign investment is also common in Mexico, with American and British companies joining Mexican super-billionaire Carlos Slim in financing and/or building out the advanced networks.

Mexico’s decision to adopt the latest fiber technology straight to customer homes increases questions about why American providers are mostly unwilling to do the same.

It’s time for every consumer across the country to help our friends in North Carolina, who are now facing the prospect of a Broadband Dark Age with the passage of a cable-industry-written bill designed to protect their monopoly prices and deliver America’s worst broadband experience.

The grand lie that is the Level Playing Field/Local Government Competition Bill (H.129) claims it will protect broadband competition in the state.  It will, if you are Time Warner Cable facing top-rated, super-fast service from community broadband networks that compete with them in communities like Salisbury and Wilson.

The power to protect North Carolina’s broadband future is now in the hands of Gov. Bev Purdue.

The North Carolina Senate abdicated their responsibility to serve the interests of state residents.  On Tuesday, they voted 39-10 for this consumer atrocity:

Yesterday, the House added insult to injury voting 84-32 for the bill custom written by and for Time Warner Cable:

Not a single Republican in the House stood up for you.

Faison

Several legislators that still remember they represent the interests of voters and not out of state big cable and phone companies were appalled.

Rep. Bill Faison (D-Caswell, Orange), who has been a champion of better broadband across North Carolina, reminded the Assembly the bill should have been named the Time Warner Cable Anti-Competition Bill, written by a New York City-based company that will prevent cities from using their collective buying authority to provide themselves (finally) with the broadband service the private sector has steadfastly refused to deliver.

Faison noted Time Warner Cable CEO Glenn Britt made $27 million in compensation last year — the same as the entire cost of Wilson’s GreenLight fiber-to-the-home cable system.

Faison openly pondered what the cable company has been paying to employ the six full time lobbyists who have been trolling the halls of the state legislature for months, and exactly how much next year’s rate increase will be to pay for their services.

Even the former chairman of the state Republican party called H.129 an enormously arrogant piece of legislation.

Luebke

Another hero for consumers, Rep. Paul Luebke (D-Durham), noted the bill’s immediate impact will be to keep rural North Carolina a broadband desert.  Luebke called H.129 a bad bill that denies service even to communities where no broadband service exists.

But Rep. Marilyn Avila (R-Time Warner Cable) wanted to ensure no one could say there was a broadband problem in North Carolina, so she supported an amendment that allows areas to be declared served if even a single home has broadband service in a particular census block.  That provision delivers beneficial protection to CenturyLink, who can spend their time, money, and attention on a merger with Qwest, the last remaining independent Baby Bell.  While they focus on making themselves bigger through mergers and acquisitions, the phone company faces no competitive pressure to expand service in rural North Carolina, and will face no meaningful competition for the indefinite future.

While Gov. Purdue’s office has made noises about vetoing this bad legislation, it is essential that we let the governor know we need an absolute commitment on her part to veto H.129.  We’ve seen how Big Telecom plays their dirty pool, so we cannot afford to sit back and allow their lobbyists to wear the governor down.

Gov. Purdue

When Time Warner Cable tried to slap an Internet Overcharging scheme on consumers in New York, North Carolina, and Texas in 2009, Stop the Cap! made a commitment to join forces with all of the impacted communities to present a united consumer front against provider abuses.  H.129 qualifies.  That’s why we urge everyone to contact Gov. Purdue and let her know she must veto H.129, an anti-consumer, anti-broadband bill.

Please call -and- e-mail her office:

• E-Mail: [email protected]
• Phone: +1 919 733 2391

Minor Correction Made 5/6 – 5pm ET: We made an error referring to a census tract instead of a census block in the original piece.  One of our readers dropped us a note correcting us, which we are happy to do.  A “tract” actually has many “blocks” in it.

While AT&T is placing limits on their broadband customers, the people of Lithuania are celebrating news that the part-state-owned telephone company — Teo LT — is increasing broadband speeds for their customers at no additional charge.

Effective May 16th, Internet speeds of up to 300Mbps will be available from the phone company ISP – Zebra.

Teo LT has installed fiber to the home service for nearly half of Lithuania’s million-plus households, and expects to serve the majority of the Baltic nation with fiber within the next decade.  Much of the rest of the country gets DSL service.

With the speed upgrade, Lithuanians will be able to access foreign websites at the same speeds as international websites.

Lithuania is one of three Baltic states north of Poland, formerly annexed as part of the Soviet Union.

Currently, Lithuania considers its lowest quality light user plan 10/10Mbps, which it sells for a paltry $14.72 a month, for unlimited access.  But international websites used to arrive at much slower speeds under this plan — 1Mbps.  That’s why many Lithuanians chose higher speed offerings.  Now, for around $55 a month, they’ll receive 40/40Mbps service, potentially less when bundled with other products.

Lithuania sees fiber optics as their path to broadband prosperity, and seeks to retire copper wire DSL circuits as quickly as possible.  The company’s fiber network now reaches 86 percent of the capital city Vilnius, 95 percent of Klaipeda, 75 percent of Kaunas, and more than 50 percent of Panevėžys and Šiauliai.  The company, with its Swedish-owned partner Telia Sonera, has invested more than $140 million in building the network, designed to replace the country’s old copper wire telephone infrastructure now deemed obsolete.

Lithuania, formerly a Soviet Socialist Republic, declared its independence from the USSR in March, 1990 — the first Soviet Republic to do so.  Today, the country is a member of NATO and the European Union.  Lithuania has a long history of recognizing the importance of infrastructure tied to economic development, and has an extensive and modern transport system.  The country is treating broadband development much as they would treat roads and railways — as a long term investment.

The administration of President Dalia Grybauskaitė sees Lithuania’s future as a knowledge-based economy, and has restructured away from heavy industry and simple agriculture towards biotechnology and information technology businesses.

With the renewed telecommunications infrastructure, IBM built a major research center inside the country and last year Lithuania opened its first solar cell plant.  Lithuanians culturally are increasingly turning away from their former Russian occupiers and looking west, especially towards western Europe, Scandanavia and the United States.  At least one-third of Lithuanians have learned English a second language, according to a Eurobarometer survey conducted in 2005.