The 'Prince of Wales,' one of Inter-Island Ferry Authority's boats that connect the island to the mainland (Courtesy: Inter-Island Ferry Authority)

Providing broadband to 6,000 residents of Prince Wales Island, located along the western strip of Alaska that borders on British Columbia, Canada is the ultimate challenge.  Parts of the island don’t even have access to traditional landline phone service, relying instead on fixed wireless service.

Residents have complained loudly about the poor quality of phone service on the island for years, particularly when it is provided to the 1,000 residents of Klawock, Craig, and several adjacent communities served by Alaska Communications Systems (ACS).  Ten percent of ACS customers are stuck with fixed wireless, which guarantees no Internet access, and sub-standard phone service.  What perturbs many of them is the fact another phone company’s landlines are within the sight of their homes and communities, but they can’t get service from that company.  Those lines are owned by ACS competitor Alaska Power & Telephone (AP&T), an employee owned utility that serves many areas ACS doesn’t.

Friends and neighbors served by AP&T are happy with their telephone service.  Residents served by ACS are not.

The Alaska Dispatch tells the story:

Every three months Ron Fitch drives five miles down a state highway so he can use a friend’s telephone to monitor his pacemaker.

Fitch, who lives on Price of Wales Island, has a phone at home, but he gets his service via fixed wireless, which is similar to a cell phone signal but is routed through a box mounted in the house. Since you can’t recalibrate a pacemaker over a wireless signal, Fitch makes the drive four times a year.

“Times have changed, and it doesn’t seem right that we can’t get Internet or a fax or anything over our phones,” said Eric Packer, a builder who lives outside Klawock. “It’s like living in the dark ages.”

ACS customers on the island have been complaining about their phone service for years, and for some the frustration is sharpened by the view of lines — owned by ACS competitor Alaska Power and Telephone — running near their homes. Two years ago the Regulatory Commission of Alaska opened an investigation into ACS service on the island, citing numerous customer complaints and a request from Sen. Lisa Murkowski.

With all of the negative press focused on ACS, the company relented, telling the Regulatory Commission it will offer to connect those fixed wireless customers to landline service, but will only pay for up to 1,000 feet of wiring between the nearest ACS junction box and the customer’s home.  ACS will bill customers the balance of costs beyond 1,000 feet if a customer insists on landline service.

ACS is a major recipient of universal service funds which subsidizes phone service in rural areas to keep it affordable.  ACS receives about $4 million a year.  ACS fixed wireless customers on the island pay about $26 a month.

ACS customers perennially without broadband have complained to the Regulatory Commission, according to the Dispatch, suggesting it hurts the island’s economic development.  Some customers have managed to switch to cell phone service and dropped landline/fixed wireless service, and a select few are trying to rely on satellite Internet service, which customers characterize as expensive and slow.

Pricing for landline DSL service from either ACS or AP&T is itself slow and expensive, and AP&T service is usage limited:

ACS promotes the fact their service is unlimited.  Includes local and long distance telephone service.  One year contract term required.  Pricing may be higher in rural areas not specified on the ACS website.

The 1Mbps service tier is currently available in select areas dependent upon local infrastructure.  Each additional gigabyte of usage is pro-rated at $5.00/GB.  AP&T provides wireless broadband in selected rural areas.

One of the frustrations communities filing for federal grant money often face are the onerous terms and conditions that arrive with the application.  In many cases the rules are so complex, an entire industry of paid consultants to advise would-be grant applicants has grown up with the bureaucracy.  Miss one qualification and your potentially worthwhile application gets an automatic rejection.  Hiring an expensive consultant (often formerly employed in a government agency as an application processor) can often work miracles for a potentially dubious application.

Although some terms and conditions are included to prevent potential waste, fraud, and abuse or are intended to close potential loopholes, many others are influenced by elected officials trying to steer funding into projects they want to “pre-qualify.”  Often the intentions are obvious to would-be applicants, who discover only one company in their midst is capable of meeting all of the requirements of a grant program.  It never hurts to have a powerful member of Congress sign a cover letter of support for an application either, especially if that member of Congress helps oversee your agency’s annual budget.

And so we come to the broadband stimulus program, which has its own bureaucratic red tape and pre-conditi0ns to be met before funding becomes available.  Big phone and cable interests have already been rigging the system through broadband mapping projects that magically show broadband service in areas where none exists.  That’s critically important, because an application can be rejected out of hand if it seems to duplicate or overlap an existing broadband provider’s service area.  Incumbent players have wasted no time filing objections to thousands of broadband grant applications, often citing broadband maps which show a would-be applicant wants federal tax dollars to compete against them.

Mount Washington Resort – Bretton Woods, New Hampshire (left), Town Office – Minneiska, Minnesota (right)

Larger players sat out most of the first round of broadband stimulus applications, which often involved “last mile” projects which would deliver real results to those stuck on dial-up.  These projects actually provide service to individual homes and businesses where none existed before.  Many of the largest telecommunications companies are seeking a better deal for themselves from so-called “middle mile” project grants which allow them to improve their broadband infrastructure without actually hooking up a single new customer.

The collateral damage of this high stakes poker match is visible in rural communities in states like Minnesota, where some found their stimulus applications rejected because they couldn’t afford a requirement for 50 percent in matching funds.  That won’t be a problem for a New Hampshire community that did win $1 million in stimulus funding.  They are lucky enough to host the Mount Washington Resort at Bretton Woods, which will have broadband available in every room, in part thanks to taxpayers.  The resort, now undergoing a $50 million dollar luxury renovation, encouraged the local phone company to apply.  A single night booked for this weekend at the Omni Mount Washington Resort starts at $259 on the economy rate.  The “Winter Wonderland Inclusive Package” will set you back at least $569 a night.  At least now you can Twitter about it with all of your followers.

In contrast, Minneiska, Minnesota (population 116) doesn’t have a hotel, or broadband access, but you can drive down the road to the Winona Days Inn and get a room this weekend with a queen-sized bed for $65 a night. If the bed has a mattress similar to that on the purple mattress review, then it’s comfortable enough.  Winona is big enough to get DSL service, so Days Inn throws in Internet access for free.  You can contemplate that over your free hot waffle breakfast.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CNN Wiring the Wrong America 3-12-10.mp4[/flv]

CNN asks the question, are we wiring the wrong America for much-needed broadband service?  Before you answer, yes we noticed CNN used the sounds of a fax line to simulate the sounds of a dial-up connection, too.  (3 minutes)

Frontier's headquarters in Rochester, N.Y.

Frontier Communications has dismissed the proposition of Google constructing a 1Gbps fiber-to-the-home network, telling readers of the Rochester Democrat & Chronicle that most users don’t need ultra-fast Internet access.

Ann Burr, chairman and general manager of Frontier Communications of Rochester made the remark in response to news that citizens and business leaders are excited about promoting Monroe County as a potential test location for Google’s fiber network experiment.

Frontier, which serves Rochester and most of the 585 area code, accused Google of having “a poor track record of following through on such proposals and that creating a fiber-optic network from scratch would be enormously expensive.”

Pot to kettle.  Frontier’s illusory promises for fiber optic connectivity in states like West Virginia, where it seeks to take over the majority of the state’s phone customers from Verizon, never seem to include specific assurances such projects will reach customer homes.

“If Google built its own network, we estimate it would cost $5,000 per household,” Burr told the newspaper.

That’s as exaggerated as Frontier’s DSL speed claims.

Verizon Communications, which is in the business of providing fiber connectivity to the home, disclosed the true costs are far lower than that, and continue to decline.  In the summer of 2008, Verizon’s Policy Blog noted:

Capital Costs
– We said our target per home passed was $700 by 2010, and we are ahead of plan to achieve that objective. In fact, we’ve already beaten the target.
– We said our target per home connected was $650 by 2010, and we’re on plan to hit that target.

No wonder Frontier doesn’t contemplate providing fiber service to customers.  It created its own sticker shock.

Still, the local phone company didn’t want to slam the door entirely on Google’s foot, suggesting it would be willing to talk about leasing space on Google’s network if it launched in the Flower City.

Frontier’s claim that customers don’t believe fast broadband service is important is a remarkable admission, particularly for a company that increasingly depends on broadband service to stop revenue loss from customers dropping traditional phone lines.  That philosophy should be carefully considered by state officials and utility commissions reviewing Frontier’s proposal to take over Verizon phone lines in several states.  Do communities want to receive broadband from a company that dismisses faster broadband speed as irrelevant for the majority of its customers?

Perhaps the remarks came with the understanding Frontier isn’t capable of delivering 21st century broadband speeds over its antique network of copper telephone wire anyway.

That’s the point Time Warner Cable has made repeatedly, especially in the Rochester metro area.  The cable operator routinely promotes its Road Runner cable modem service’s speed advantages over Frontier’s DSL product.  Frontier promises up to 10Mbps, but often manages far less (3.1Mbps was my personal experience with Frontier DSL last April.)  Time Warner Cable promises up to 15Mbps, and often exceeds that with its “PowerBoost” feature.  In rural areas, the phone company tops out at “up to 3Mbps.”  Time Warner Cable notes most of its new broadband customers come at the expense of phone companies like Frontier.  DSL customers switch because they do care about broadband speed.

Judging from the excitement in Rochester over Google’s proposal, Frontier’s dismissal of a fiber optic future seems out of touch, and potentially a drag on the local community’s economic future.

Rochester increasingly will become a broadband backwater because of anemic broadband competition from Frontier Communications.  Its reliance on ADSL technology, more than a decade old, to deliver distance-sensitive broadband service looks out of place compared with the rest of New York State.  Major cities throughout New York are being wired with fiber optic service by Verizon Communications.  Verizon FiOS delivers up to 50Mbps service.  Frontier maxes out at far lower speeds and defines an acceptable amount of broadband usage on its DSL service at just 5GB per month. Using Verizon’s FiOS fiber network, you’d exceed Frontier’s entire month’s ‘allowance’ in less than 15 minutes at Verizon’s speeds.

Rochester is one of many communities challenged by the transition away from a manufacturing economy towards a high technology future.  A world class fiber optic network doesn’t just benefit big business.  It spurs revolutionary growth in medicine, education, software development, telecommunications, and more.  That means good paying jobs.  For consumers with fiber to the home, it opens the door to telecommuting on a whole new level, distance learning opportunities, new ways to access information and entertainment, and allows home-based entrepreneurs to develop new businesses.

With Verizon FiOS unavailable to Rochester indefinitely, and Frontier unwilling to make appropriate investments to keep this city competitive with the rest of upstate New York, those jobs and economic benefits can go to Buffalo, Syracuse, Albany, Westchester County, and metropolitan New York City.  We’ll be held back on the frontier with Frontier and its ideas of rationed broadband service.

[flv width=”360″ height=”260″]http://www.phillipdampier.com/video/WROC Ontario County Makes Bid for Super Fast Internet 2-11-2010.flv[/flv]

WROC-TV in Rochester reports that Ontario County, to the southeast of Rochester, may have a built-in advantage with an already-installed fiber loop covering much of the county.  The county has a team working on a formal application to Google to provide service in communities like Geneva and Canandaigua.  Frontier’s claims that consumers don’t care about fast broadband speed are belied by the excitement of residents of both counties. (2 minutes)

Metro Vancouver residents will have access to Canada’s fastest residential broadband service next Friday when Novus Entertainment launches its Net 200 tier providing 200Mbps service over a fiber optic network for $279.95CDN per month.  Customers currently paying $179.95 for the company’s 60Mbps plan will also receive a free upgrade to 100Mbps service on that same date.  No word yet on what the new usage limits will be, but Novus previously limited its 60Mbps plan to 360GB per month, unfortunate for a plan that carries such a premium price.  Novus charges 50 cents for each additional gigabyte above their various plan allowances.  Novus’ upload speeds are the same as its advertised download speeds.

Novus Entertainment has wired fiber optic cable in 33,000 large multi-dwelling units in parts of greater Vancouver, providing broadband, telephone, and television competition for incumbent cable provider Shaw Communications.  The two companies were embroiled in a nasty price war last year, with Shaw slashing prices to as low as $10 per month for video, phone, or Internet access.  To date, Novus has 9,000 subscribers, 8,200 of which subscribe to the company’s broadband service.

“We noted a recent survey by Harvard University which found that Canadians’ access to superior broadband performance and infrastructure ranked poorly among developed countries,” said Donna Robertson, Co-President and Chief Legal Officer of Novus Entertainment Inc. “While these results are disappointing, this provided Novus with the opportunity to not only take this challenge head on and provide customers with superior Internet speeds, but to also set us apart from the competition.”

Vancouver is the home of Novus Entertainment

Novus’ Net 200 will be available in selective buildings that are configured for 200 Mbps technology. With the vision of becoming one of Metro Vancouver’s major Internet and communications service providers, Novus continues to expand its service in Vancouver and Burnaby and plans to launch services in Richmond in 2010.

“Canadians want a service provider that delivers a fast Internet connection to meet their growing needs at a reasonable cost,” said Doug Holman, Co-President and Chief Financial Officer of Novus Entertainment Inc. “Yet they’re paying among the highest prices for some of the lowest speeds. Novus’ superior fibre-optic network allows us to provide our customers with best-in-class, reliable and consistent transfer speeds that the incumbents simply can’t offer.”

Shaw probably cannot match Novus’ 200Mbps service tier on their non-fiber optic cable network, but will likely continue to compete heavily on price with discounts that stun Canadians outside of metro Vancouver.  Shaw’s pricing in Novus-wired buildings is as much as $60 less than in other areas where Novus does not compete.

Novus also owns some wireless spectrum covering Alberta and British Columbia, so eventually the provider could mount a competitive challenge in the mobile telephone market, at least in western Canada.  There are rumors the company could partner with an eastern Canadian spectrum holder like Public Mobile, which owns spectrum covering southern Ontario and Quebec.  Neither company has launched service, and probably won’t for the rest of 2010, but could eventually provide additional competition in the overpriced Canadian mobile phone market.