Why business needs faster broadband

Submitted by acohill on Fri, 06/24/2005 - 08:02

I just had to upload a small ad to a magazine ftp site. The file was about 5 megabytes, which is very small for this sort of thing; a photo heavy full page ad could easily run 100 megabytes or more.

On my "fast" cable modem connection, I had to sit and watch it grind away for nearly three minutes because Adelphia, like all the "broadband" DSL and cable providers, cripples upload speeds. My upload speed is only about 20% as fast as my download speed. These artificial constraints limit the ability of businesses to do client videoconferencing, transfer large files to other workers and clients, prevents medical professionals from looking at X-rays from home, and a host of other business functions that are now routine.

Meanwhile, in the February, 2005 issue of Broadband Properties, Marilyn O'Connor, the Verizon Senior VP for Broadband, stated that copper systems are "fine" and that it "serves what the market needs are."

Verizon is sadly out of touch.

New York City says broadband should be a universal service

Submitted by acohill on Mon, 06/13/2005 - 11:49

The New York City Committee on Technology in Government has issued an excellent and extensive report [link no longer available] on the need for broadband throughout the city. It reaches many of the same conclusions that the City of Seattle reached in its study of broadband. Among the highlights:

The report also reviews the work of other cities like Philadelphia and Seattle. There are not many recommendations, but they do recommend that every new building have telecom duct as a requirement, not as an option. The report is long but readable, and makes a case that local government has a role to play.

Wake up call for elected leaders

Submitted by acohill on Thu, 06/09/2005 - 07:28

James Carlini, who writes in ePrairie, an Midwestern online business and technology magazine, has a terrific article taking Illinois leaders to task for shirking their responsibilities to the the public at large and to businesses and communities in the state.

It's hard to improve on Carlini's thoughts, so I'll include just one item from the article. You can read the entire piece here.

" The big breakthrough that some people are touting is getting DSL for $14.95 a month. I no longer consider that as broadband capability. If DSL was at $14.95 five years ago, I would have said that was something. This is now a fire sale that’s five years too late.

While this is to keep interest in antiquated copper-based services, it’s not giving real bandwidth to the average consumer. Compare it with what’s being offered in other countries. We should be getting one gigabit for $14.95. Now that would be something.

Gigabit technology is based off fiber-optic infrastructure. No incumbent telephone company wants to install that to the house when they can keep milking copper, which has been paid for many times over across the decades.

Until the leaders of states get more up to speed with what’s really viable for securing their state’s global economic position, we will be stuck with half measures and the equivalent of eight-track tapes in an age of MP3 players."

Seattle's plan the antidote to "#1 unwired"

Submitted by acohill on Wed, 06/08/2005 - 11:32

I wrote recently about Seattle's plan to invest heavily in fiber. The work that the city has done now seems even more timely because a list of "Most Unwired Cities" came out recently, and Seattle holds the number one slot, just as the city has identified "wired" technologies like fiber as critical. One of the things everyone forgets is that "unwired" hot spots still have to get access back to the wired network, and fiber is usually the most desirable way to do this.

Their task force has recommended a communitywide digital transport system based on fiber, which the task force notes has a 40+ year life span and the lowest cost per megabyte of capacity of any system (e.g. DSL, cable modem, wireless, satellite). The city has a summary of the issues and a link to the plan online. Here is what the Chairman of the Task Force said about broadband:

"The task force believes Seattle must act now to foster the development of advanced broadband facilities and services for our community. Seattle cannot afford to dawdle. Broadband networks will soon become what roads, electric systems and telephone networks are today: core infrastructure of society. Lacking advanced broadband, Seattle is unlikely to maintain a competitive economy, a vibrant culture, quality schools and efficient government."

Overview of anti-muni broadband legislation

Submitted by acohill on Wed, 06/08/2005 - 11:21

Here is an excellent and relatively optimistic summary of what's happening at the state and Federal level with respect to anti-muni broadband, or as my old friend Gene Crick would say, "...the best laws money can buy."

The telcos and cable companies are simultaneously claiming that communities can't cope with the complexity of broadband (which in fact is a heck of a lot easier to install and maintain than sewer systems or electric systems) while screaming loudly that they need protection from unfair competition.

As Bill Gurley, the author of the article points out, which is it? Are communities a bunch of incompetent, bumbling zealots who are going to waste tax dollars (meaning they can't be much in the way of competition), or if they are serious competition, then it's pretty hard to claim they are incompetent.

$15 broadband from SBC

Submitted by acohill on Thu, 06/02/2005 - 09:16

In what has to be a sign of desperation, SBC has dropped the price of its entry level DSL service to $14.95 a month. Claiming that the online registration "lowers costs," the telco is also giving customers a $99 credit towards home networking gear like wireless access points.

Nationally, DSL only has about 15% of the broadband marketplace, with cable a near monopoly with around 75%. Wireless and fiber offerings make up the other 10%. The biggest problem with DSL is that the ability of the phone company to deliver it to any particular home or business depends on the distance from the telephone switch, the quality of the copper cable plant, the phase of the moon, and local service techs who may or may not be able to fiddle with the line to make it work.

Cable modem service does not have those problems because the cable companies took on enormouse debt to rewire their service areas (and the debt is another issue). The phone companies tell political leaders that they are providing broadband almost everywhere by using the fictional device of counting an area as having DSL if they can provide the service to just one home in a zip code area, which is often huge. They usually know full well that many homes and businesses will never be able to get DSL with the current cable and equipment plant, but count the entire zip code as "having DSL."

So SBC has to do something to attract customers. The one thing the phone companies have going for them is bundling--they can offer local phone service, long distance, and broadband on the same bill, and not all cable companies are ready to do that. Dropping the price on broadband may bring a few people back to the phone company, and SBC will probably make a small profit by selling multiple services.

Seattle says "Fiber--full speed ahead."

Submitted by acohill on Wed, 05/25/2005 - 14:54

The Seattle Post-Intelligencer has an article on a report issued by a City of Seattle task force that concluded that the city has to take broadband seriously, and must begin immediately.

This is a must read article that makes many good points. Rather than rehash them, here are some of them verbatim:

The city task force was originally instructed by the City Council to look at doing a citywide wireless project, but after studying the issue, came back with a different set of recommendations that focused on fiber. One city council member has proposed creating an Office of Broadband to study the problem further.

BPL is no cure all

Submitted by acohill on Thu, 05/19/2005 - 10:13

If your community is looking at Broadband Over Powerlines (BPL) as a cheap way to get broadband out to neighborhoods or rural areas, you should read this article over at NewsForge, which says BPL still has some issues that have to be worked out.

Among the problems this article raises are relatively high costs, the need to deploy a fiber backbone to support neighborhood level BPL, and radio interference in frequencies used by public safety (fire, police, rescue).

In short, BPL is no shortcut, and may not even be a bargain, compared to other entry level broadband systems like wireless.

New Zealand invests in broadband

Submitted by acohill on Tue, 05/17/2005 - 09:16

New Zealand, which is a country smaller than most U.S. states, is investing heavily in broadband, with a budget in the tens of millions of dollars. While too many state legislators (14 states at last count) are trying to limit broadband, we've got countries that are going in the opposite direction.

We don't really have a broadband problem in the United States, we have a leadership problem. When our elected leaders are more interested in maintaining a Manufacturing Economy status quo, rather than helping their own communities and states compete in the global Knowledge Economy, that's not a technology problem, it is an education problem. We need to be helping our leaders understand the issues affecting economic development, and in particular, why we need to be looking at what is happening in other countries. It's not sufficient just to complain that they are not doing their job--we need to roll up our sleeves and help them understand what our communities need, and why.

Utah's fiber rolling out to neighborhoods

Submitted by acohill on Wed, 05/11/2005 - 10:49

This report [link no longer available] from a Utah resident highlights two of the best-known fiber projects in the country: iProvo and UTOPIA (hat tip to Dave Fletcher's weblog). The iProvo muni fiber is 100 times faster than cable modem and 250 times faster than DSL. In other words, it is world class service, of the kind that is common in lots of other countries. Utah gets the connection between broadband and economic development, and the state has the quality of life, especially outdoor sports like hiking and skiing, to be attractive to companies who want affordable housing costs and a great quality of life to go along with affordable broadband.

We're going to increasingly see a Digital Divide between states that get it and states that don't.

Muni fiber: 3x payback the first year

Submitted by acohill on Wed, 05/11/2005 - 10:38

A muni fiber system in Utah's Salt Lake Valley installed to manage traffic throughout the region had an installed cost of $51 million and an expected ANNUAL payback of $179 million in savings.

The Advanced Traffic Management System (ATMS) uses the fiber to manage more than 50 major traffic corridors, coordinate signal changes on more than 600 traffic lights, provide traffic monitoring via video cameras, and hook up truck scales.

The system has provided significant reductions in commuting time (saving time and gas), and over the long term, will reduce the need to build more roads.

Utah got this one right--we need digital road systems to reduce the demand for our old, 20th century road systems. The article does not say, but let's hope they threw in some extra fiber for other uses. Traffic management could become the anchor tenant for fiber projects in many regions, with the transportation savings helping to fund the effort and leveraging the investment for wider community benefit.

Broadband use up again, TV loses

Submitted by acohill on Tue, 05/03/2005 - 08:25

Yesterday's Wall Street Journal (print edition, p. B8) had an article by Brian Steinberg about broadband and its effect on people's habits. According to Steinberg, broadband connections are now used by 48% of Internet users, the same number of people on dialup. This is a big jump from last fall, when data was suggesting that about 35% of Internet users were on broadband (the other 4% are probably using non-standard connections like satellite, cellphones, etc.).

As broadband use increases, traditional analog television is the big loser. Here's an interesting quote from Jeffery Godsick, the executive VP of 20th Century Fox:

"...TV is not their [the broadband users] primary way of finding out about movies or anything."

In a move that must frighten the pants off TV execs, movie studios are planning to release full screen movie trailers over the Internet. Now, you might ask what the big deal is; movie trailers have been available on the Internet for years. But these have been smaller files that play in small to medium size windows on your monitor. What's new is that these upcoming movie trailers are going to be close to DVD quality--massive files that are ready for viewing on big screen and HD monitors.

It's a test of the network, and of viewers--the movie studios, using the trailers, can study the distribution and performance costs of making these big files available, and they can see how many people make the effort to download them. The next step will be to make movies available for download, streaming, and/or sale.

The movie industry is slowing adapting to the new all digital, all IP converged model of entertainment. Apple has shown that you can make money with legal file downloads, and Apple has also shown that most people, when presented with a reasonable DRM (Digital Rights Management) system and fair prices, will download legally.

Within the next twelve months, we are going to see a breakout IP "TV" show become available only on the Internet.

Are cities at war over broadband?

Submitted by acohill on Mon, 05/02/2005 - 14:58

CNet has an article that provides a good summary of some of the current issues surrounding community-financed broadband. On one side, you have the cable companies and telcos, determined to prevent communities from controlling their own destiny. On the other side, you have communities getting limited or no access to broadband services, with those towns and cities at a serious disadvantage in the global economy as 15 other countries have better broadband than the United States.

If the incumbents had their way fifty to seventy-five years ago, we'd have no paved roads, no clean water, no sewer services, no libraries, no sidewalks, no streetlights, and no plowed streets in winter. All of those services could be provided by the private sector. But we decided that for the common good, it was better to have local government provide those.

Microduct and blown fiber movie

Submitted by acohill on Thu, 04/28/2005 - 12:22

I'm a big fan of microduct and blown fiber, and Emtelle is one of the world leaders in the technology. I think it is an ideal solution for community and neighborhood fiber projects, as it works with both passive and active optical network equipment, it's easy to install, and easy to repair--essential qualities for community-managed systems. But it's always been hard to explain without actually seeing it. This movie on the Emtelle site is short and illustrates how it works end to end (you need a Flash player plug-in for your browser).

Note that I have no financial connection to Emtelle; I just think they make terrific products. Emtelle studies show that microduct systems are as much as 44% less expensive than traditional fiber cable. Microduct systems need fewer or no pedestals, no handholes or pullboxes, the duct requires no special handling (cheaper to install), and you typically spend less on fiber.

New York City ties broadband to business

Submitted by acohill on Mon, 04/25/2005 - 11:25

New York City has announced an ambitious plan to boost fiber capacity in the city and to make all public facilities "wireless friendly."

Here is a portion of the press release that illustrates New York understands the importance of broadband to small business. Major recommendations of the report include:

"Working with the private sector to enhance broadband access in all areas of the City is in keeping with the Mayor's commitment to support the members of the industrial and manufacturing sector, the majority of which are small businesses that do not have adequate high-speed Internet access," said EDC President Andrew M. Alper. "This plan delineates the steps the City should take to improve, enhance and ensure network reliability for the entire City."

Digital Cities: Dalton, Georgia Case Study

Submitted by acohill on Wed, 04/20/2005 - 15:06

Ray Buzzard, of Dalton Utilities, spoke about the Dalton, Georgia community broadband project. Dalton's community fiber project, only about two years old, has already had very positive economic development effects by keeping hundreds of manufacturing jobs in the community. The high performance, low cost network persuaded some local manufacturers to stay in the community rather than moving elsewhere.

Local government was a key anchor tenant by making an early commitment to use the system.

Dalton adopted a retail business model, in which the utility sells services directly to customers (voice, video, data). They had to do this because they could not attract service providers with the low number of potential subscribers. The project has achieved a 45% take rate in less than two years, and 47% is their break even point--they expect to meet that before the end of 2005.

Some of the advice Buzzard had included:

Digital Cities: Open Service Provider Networks

Submitted by acohill on Tue, 04/19/2005 - 10:46

The Monday afternoon keynote was by Keith Wilson, the CEO of Dynamic City, which has the contract to design, build, and operate the Utah UTOPIA project (an 18 community fiber project serving 300,000 homes).

The U.S. has the most expensive broadband in the world; the per megabit cost of broadband in Japan is ninety cents. In Korea, it's $2.50. In the U.S., it averages $25-$30 per megabit, or thirty times higher than the lowest. Clearly, the current reliance on incumbents to provide broadband is not working.

Wilson identified four characteristics of a viable communitywide network:

A wholesale business model that allows for many service providers (as opposed to just one voice provider, one video on demand provider, etc.) reduces the risk for the network owner--if a service vendor fails or pulls out, the financial health of the network is less at risk.

Networks are like airports--a shared facility built by the community and used by multiple service providers (airlines) to offer a variety of services. Airports are good for communities because no airline would come to a community and build their own airport.

Communities need a "communications utility," and no less than the future of the community is at stake. A successful network must have widespread availability, must be affordable, and must offer customers choice. A closed network cannot offer all three, because the incumbent providers don't want competition. Private buildouts (the current situation with incumbents) capture the future of a community because no other provider will come, so the community becomes hostage to a single company.

If regulated monopolies have not worked in the past in terms of affordability and choice, why do we think unregulated monopolies (what we have now, in effect) will work better? What is best for a single company is not necessarily best for the businesses and residents of a community.

Digital Cities: Japan Broadband Case Study

Submitted by acohill on Tue, 04/19/2005 - 10:04

Scott Wilkinson, a VP for Hitachi Telecom, gave a talk about broadband in Japan. The typical broadband fiber connection in Japan is 100 megabits/second, and typically costs about $58/month; costs have dropped 66% in the past four years. Most broadband connections in Japan are data only, so the "triple play" is not a big consideration. The connections support video on demand, which is very popular, but there is no broadcast television content. The connections work very well for video on demand, with near real time viewing (i.e. no long wait to download before viewing).

Fiber To The Home (FTTH) is growing rapidly in Japan, and the big loser is cable modem service. The electric companies in Japan are NOT offering Broadband over Powerline (BPL), but instead are selling fiber service, which should be a clue to communities that think BPL is the way to go.

ADSL is seen as a problem in Japan, even though it has a high subscriber base. ADSL and VDSL are both available and offer much higher data rates than typical DSL services in the U.S., but the distance senstivity is a big issue, as subscribers just a few blocks away from each other can end up with very different levels of service.

The typical range of applications in Japan are very similar to the applications and services in the U.S., but the Japanese service providers have found that when people are given more bandwidth, they use it, which refutes the telco argument that no one has a need for high bandwidth connections. One of the trends is more work from home and from remote locations; the high bandwidth supports high quality videoconferencing and actually often provides a better level of service than is available in some business offices. So affordable broadband has become an engine for new kinds of work opportunities.

Services in Japan are driving demand, not connections. As more services ae available, more people sign up for high speed connections. The installation fee for fiber averages $150, so that can be a source of funding to help pay for community fiber builds. Fiber systems in Japan are profitable, with fees distributed this way:

Digital Cities: PacketFront talk

Submitted by acohill on Mon, 04/18/2005 - 14:39

PacketFront is a vendor of network equipment designed specifically for community broadband projects. Matt Wenger, an expert in communitywide broadband and senior analyst for the company, gave the talk.

Wenger strongly advocated a services orientation for community broadband projects. His thesis throughout the talk was the current connection-based model used by the telcos and the cable companies discourages innovation and use of broadband.

Wenger spoke at length at the connection between broadband and economic development, and said, "If you don't have a broadband strategy, you don't have an economic development strategy." He went on to show the connection between small business job growth and the potential for broadband to increase small business jobs in the community.

Wenger had some good case studies that led to his proposition that a focus on services is most likely to be successful. He advocated letting a particular service (like VoIP or video on demand) determine bandwidth needs and quality of service, and those two factors in turn determine price. A wholesale model encourages innovation and service growth, and revenues go up for the network owner (the community) with a service-based model. Wenger illustrated how revenues tend to go down using a connection-based model.

Digital Cities: Morning Keynote

Submitted by acohill on Mon, 04/18/2005 - 14:27

Berge Ayvasian, a VP at the Yankee Group, a technology forecasting group, gave the morning keynote. Ayvasian had some interesting data: the Yankee Group projects that the number of households served by broadband will double over the next three years, from about 30 million to 60 million. Households served by community broadband projects are expected to grow by more than 600%, much faster than DSL growth (100%) or cable modem (75%). Cable is growing slowest because cable companies already have much of the market locked. up. Cable will still have at least twice as many household as DSL.

Ayvasian described the current duopoly problem correctly. The telcos and the cable companies that form the dupolopy in most communities believe they can make more money from existing customers, rather than by increasing the number of customers served. So they have little incentive to expand service coverage. But that businsess mode leaves communities at the mercy of the duopoly.

Ayvasian also mentioned a start up community effort in Fontana, California, where local leaders have declared, "Broadband is not an expense, it is an investment in the future." The Fontana project will use an open access, wholesale service model (the right approach).

Ayvasian also mentioned that other countries are moving fast. Ethiopia intends to have broadband available throughout the country by 2008, so I have a new slogan for communities: "Our town--almost as good as Ethiopia!"

In summary, Ayvasian proposed several principles that he said should drive broadband.

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