Broadband

FCC Commissioner Deborah Tate spoke on the last day of the Broadband Properties conference. She had some interesting statistics that should give pause to anyone who thinks that DSL and cable modem broadband services are "good enough." Commissioner Tate noted that:

• Demand for bandwidth has been doubling every two years for the last ten years.
• By 2015 (just seven years from now), the FCC thinks bandwidth requirements will be fifty times (50x) what they are today.
• In Japan, where they have had 100 megabit connections to homes and businesses available for several years, they are already observing congestion--meaning 100 megabit pipes are already filling up.
• Americans are watching more than 10 billion videos per month over the Internet.

Tate went on to enumerate that choice was important to buyers of telecom services, and she listed that choice should be available for services, for providers, and for equipment.

At the Broadband Properties Summit, there was a case study on IP TV (TV delivered via broadband). DirecTV and an apartment owner in Alexandria, Virginia teamed up to provide competitive TV services in a large, 350 unit apartment building. Some of the highlights of the experiment:

Prior to the introduction of the new service, the biggest tenant complaint was about the incumbent TV provider service. The number one tenant demand was for more choice in selecting a TV provider.

After introducing the competitive DirecTV service, complaints are down and compliments are up.

The case study confirmed my longstanding bandwidth calculations about future network planning. A single channel of HD TV on the system requires 10+ megabits of bandwidth on the system, and live HD events (e.g. sports, racing, etc.) requires 15+ megabits of capacity per channel. This demonstrates the inadequacy of DSL, wireless, cable, and even FiOS to deliver next generation services.

Cat5e or Cat6 cable is needed from a distribution closet to each apartment, where a set top box converts the signal and sends it to the TV. The system performed so well that most residents did not realize it was IP TV. There have been claims that "IP TV doesn't work well compared to satellite and cable." We can put those to rest.

The take away for the talk was really about making sure that new homes and apartments are broadband ready. Most communities still do nothing to encourage builders and developers to build "broadband ready" homes and commercial buildings, which is a missed economic development opportunity, especially given the ease and low cost of doing this.

Bruce Mehlman, from the Internet Innovation Alliance, which is a lobbyist group in D.C., had some interesting statistics on the state of broadband in the U.S. today. He spoke this morning at the Broadband Properties Summit.

293,000 new jobs are created with every 1% increase in broadband availability in the United States. This is a statistic that you might want to pass on to local economic developers and elected officials who may be skeptical about the benefits of broadband. It is easy to do the math to calculate how many new jobs would be created in your community from a community-wide commitment to universal broadband access.

About 66% of the homes in the U.S. are using the Internet, and 50% of those have broadband. This means two-thirds of U.S. home still have no broadband.

There is a $580 billion dollar global market for IT services, indicating there are lots of job and business opportunities for U.S. companies if they have affordable broadband infrastructure.

Think your local economy would benefit from a steel plant? It turns out that the number of people making a full time living from selling things on eBay exceeds the employment of the entire U.S. steel industry. Note to rural communities: this is a work from home opportunity that requires broadband.

Broadband is a green technology. By one estimate, universal access to broadband in the U.S. could create a billion ton reduction in greenhouse gases over a ten year period. Broadband is a net energy saver.

Another study estimates that the healthcare industry could cut costs by as much as 25% by making better use of broadband and IT. Note to rural communities: broadband may cut healthcare costs.

Skeptics of the demand for Internet-based video take note. YouTube did not exist four years ago, and today has 100 million viewers per day.

Broadband will not be affordable in most areas without a business model that creates and sustains competition.

Dan Rogers, an economic developer from Kendall County, Texas, just told a story about a conversation that just occurred last week. A middle manager who lives in Kendall but commutes about an hour to work out of the region related to Rogers that he had negotiated an agreement with his firm to let him work two days a week from home to save on the cost of commuting. He was able to do that because he has fiber to the home and can access the corporate network as if he were sitting in his office at the main company location.

Gas prices are going to start changing the way we make decisions about where we live and where we work. Communities with fiber have a better chance of weathering those changes successfully, as it gives both workers and businesses more options.

The sharp increases in gas and diesel fuel are raising the cost of commuting. Even if fuel prices recede (as they did after the '73 oil crunch), it seems likely that we will never see $2 gas again, and it may be that $3 gas becomes the new normal.

While the cost of fuel affects everyone to some extent, rural communities may be at most risk. Many workers in rural towns drive long distances to work, and a doubling of the cost of such drives may make it too expensive to make those commutes for a $12 or $14 per hour job.

Like the Chinese ideogram that can be read both as "danger" and "opportunity," the fuel crisis may, over the long term, be an opportunity for some rural towns, and could be the end of others. If it is too expensive to drive long distances to work, some workers and families may move closer to the work, further reducing the viability of some rural communities that are already struggling with long, slow declines in population.

But some businesses may decide to move closer to workers, and rural communities with the right economic development strategy to attract such businesses may have an edge--if they have good quality of life, attractive and vibrant downtowns, and .... broadband.

Community broadband projects can have a double impact. Properly designed community networks that extend affordable broadband into residential neighborhoods and along rural roads can bring new kinds of work from home opportunities to a rural workforce--getting them off the road completely and eliminating long commutes entirely. Fiber in business and industrial parks can attract businesses, which won't even consider some communities unless fiber services are available.

Rural communities will have to respond to the fuel increases with well thought out, long term strategies to help reduce commuting costs for their residents. Those that don't will see more workers and families moving away--reluctantly, but leaving nonetheless.

A senior AT&T official has indicated that video is eating up Internet capacity at a rapid rate, and predicted that in three years, the demand for video in all forms, especially HD video, will put enormous strains on the Internet and Internet access providers like AT&T. Here is the key quote:

Video will be 80 percent of all traffic by 2010, up from 30 percent today,"

Communities that are not making plans now to invest in telecom infrastructure will find attracting and retaining businesses far more difficult, as business relocation will be increasingly driven by the availability of affordable broadband services.

The use of BitTorrent, a peer to peer file sharing service, is up 24% in the past four months. Like the big jump in YouTube traffic in December, some it may be related to the writer's strike. The lack of anything new on that old-fashioned TV thingy in the rec room apparently had people headed in droves to the Internet for some mindless entertainment. And of course, the Internet has plenty of mindless entertainment. Sadly, almost any random 2 minute video clip on YouTube is funnier than most half hour TV comedies.

What's coming? I think it is now safe to say that TV is over. It will be a long slow decline, but the writer's strike created the tipping point that economists always look for. The Internet access providers can monkey around with traffic management to try to discourage the use of services like BitTorrent, but that's just silly over the long term. Imagine any other business saying, in effect, "We're glad you love our product. Please stop using it." That's what the Internet providers and the entertainment industry are doing with their lawsuits, "Internet toll booths," and traffic manipulation.

The solution is to start building networks that are focused on delivering services--any services, including things like BitTorrent--rather than just blindly delivering bandwidth by the bucket. That model doesn't work. If it did, we'd all have a fiber connection by now.

The City of Seattle, which selected the open access, open services model as a general direction for its municipal broadband effort last year, is planning to issue an RFP to actually select a fiber to the home vendor. City officials continue to be dismayed with the service offerings from the incumbent telephone and cable companies.

According to a New York Times article, Europe is pulling far ahead of the United States in high performance broadband deployment. European countries, led by Sweden, Denmark, Holland, and Finland, are adding 50,000 broadband lines a day.

In Europe, most countries have required the incumbent telecom firms to allow other broadband firms to lease their infrastructure, which has led to heavy competition and lower prices. While many of the new connections are still copper-based DSL, many places have gone to citywide fiber deployments. In Paris and Vienna, 100 megabit fiber connections are widely available.

Christopher Mitchel of the Institute for Local Self-Reliance has written an article in the current issue of Broadband Properties. It is an excellent analysis of municipal and community broadband that presents a compelling argument that only integrated wireless andfiber community/municipal networks are going to be able to support the kinds of applications and services needed, especially services needed to support businesses and economic development.

Here is a key quote:

Those who expect a future without wires are sadly mistaken. Existing wireless networks are perfectly adequate for voice, email, or Internet surfing, but their limitations preclude high quality videophone applications and other bandwidth-intensive applications."

Mitchell argues, as I and others have, that wireless is a necessary component of any community or municipal broadband effort, but that wireless will evolve (as it already is doing) into primarily a conduit for mobile access to services. Fiber will be required in virtually all residences and businesses because video in all its forms will need the very high capacity that fiber offers.

Read the whole thing; it is well worth printing out and distributing to others who are interested in community broadband.