Author Archives: Jesse

FCC Unveils Rules for 700MHz Auction

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Despite Google flashing cash and lobbying prowess and pleas from technologists, the FCC has decided that the upcoming 700MHz auction will not require network neutrality provisions or operate as a wholesale network. Consumer groups are calling it a mixed bag since the winner cannot restrict which devices can be used on the network but there will likely be no competing providers. Despite these setbacks, Google still wants to make a play for this valuable slice of spectrum. I suppose we should just be glad the FCC isn't giving this one away.

Robert Cringley thinks it's a foolish thing to bet the farm on, but not so much so if you connect the dots. Google's money-maker has always been selling advertising. To that end, they want to extend the reach of their ad network as far as they can. It could be in the form of expensive "partnerships" with mobile carriers. More likely it's a Google-branded phone. Take Google's announcement of a prototype cell phone, a device no doubt designed to increase its reach beyond the PC. An open 700MHz network works in their favor since they could sell a single phone to multiple carriers and capture a gigantic market.

Google's smart enough to hedge their bets. The partnership with Sprint comes amid the cellular provider's partnership with Clearwire to jointly build a nationwide WiMax network, one they promise will be competitive with the 700MHz spectrum.

Report: White City Community Council Meeting, August 3 2007

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Wednesday night was the monthly meeting of the White City Community Council, and it looks like I'm going to have to appear to a higher body for some help. First, the rep from UTOPIA didn't show and I never got an e-mail or call to indicate such. This, however, is the minor setback. The major setback is that the future of White City's township designation might be in jeopardy based on what I heard at this meeting, so the council rightly must focus on issues other than broadband policy. I'm going to try and setup a time to present to the Salt Lake County Council to see if they'll appeal to legislators to re-write the law and allow counties to directly participate in UTOPIA.

The other option is to start a private company to bring UTOPIA to this area. I don't have the experience, time or money to do something that ambitious (but if any of you are, please let me know) so that seems like a dead end. It seems like I'm back to square one. 

Fiber Networks Drive Telecommuting, Home-Based Business

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A survey conducted by the FTTH Council shows that many FTTH subscribers use it for telecommuting or home-based businesses. About 13% of respondents indicated that they were using it to telecommute an average of one day per month more than they normally would while 10% indicated they were using the high-speed connections to run home-based businesses. Figuring the take rates for systems like UTOPIA, that means that with the projected take rates and a full build-out, the system will take an average of over 1,000 commuters per day off the road, a significant impact on transportation policy in the Beehive State. This is a major public policy impact that goes far beyond the improved economics from spurring new home-based businesses, a segment that lead the stratospheric growth of Las Vegas' local economy.

It also seems that FTTH users report a higher satisfaction with the service compared to DSL and cable with over 85% of subscribers saying they're pleased with the service. This might have to do with the median download rate of FTTH connections being over 2.5 times higher than the national average. Speed matters.

Bad Competition: Verizon Shuts Out Copper Competitors, Comcast Purchases More Rivals

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Typical of monopolistic incumbencies, Verizon has cut off copper lines in homes with FIOS to prevent customers from "downgrading" and having the option of picking their service provider. Their reading of the Telecommuncations Act of 1996 is that they are not required to lease lines to competitors on the shiny new fiber optic network like they were with the old copper infrastructure. This has left CLECs in a position of a shrinking potential market as Verizon aggressively builds out the fiber optic network, now serving over a million customer in their service areas and passing over 10 million homes. Given their past of neglecting copper infrastructure, it seems like Verizon is hoping to get everyone onto the more expensive service while shutting down as much competition as possible.

Meanwhile, Comcast has started buying out small cable operators to take over the last few markets not served by themselves, Time Warner, or AT&T. They've purchased a pair of systems in Colorado and one in Pennsylvania to add a measly 3,000 customers. The Colorado acquisition plays well with their dominance in nearby Denver. It may come that the day of the truly local cable or phone company will be dead before too much longer.

Open Spectrum Auction Backed by FCC Chairman

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In a move that immediately gave AT&T and Verizon a case of bunching panties, FCC Chairman Kevin Martin has announced that he is in favor of the Google-backed plan to require the 700MHz spectrum to stay open for any compatible device to use any service. This no doubt makes the group behind the open-source OpenMoko phone pleased as punch as they search for a market for the highly-hackable device. Consumer groups are calling for it to go one step further and become a truly wholesale network allowing multiple service providers to compete for business. Former FBI Director Louis Freeh, however, is backing the Frontline plan to seize the spectrum to make a public safety network, essentially getting commercial operations in the band for free.

This news goes hand-in-hand with renewed Congressional pushes to require that cell phones be able to seamlessly move from provider to provider, the so-called "cellular Carterphone" regulation named after a ruling that wireline phone systems had to accept any outside device that did not interfere with operations. In conjunction with that are an increasing number of groups calling for the wildly popular iPhone to be unlocked so they can jump ship to other GSM providers.

With these rapid developments in the wireless world, it's not much surprise that San Francisco's City Council chose to delay voting on their high-profile wireless project until a future meeting. Maybe they're thinking it would be best to bide their time for the moment.

Report: White City Community Council Meeting, July 11 2007

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I got to do a follow-up presentation on the financial aspects of UTOPIA at tonight's White City Community Council meeting. This included estimated participation rates and the impact on housing values. While it's not a slam dunk, it looks like a very solid picture for meeting the debt obligations by the end of the first year.

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White City Community Council Meeting Tomorrow

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Don't forget that the White City Community Council will be meeting tomorrow. UTOPIA is on the agenda and I will be following up with some answers concerning the cost and value of the project. I spoke with UTOPIA COO Roger Black yesterday and there may be a representative from UTOPIA on hand to help answer questions about the project. The meeting will be held at 7PM at Eastmont Middle School (at the intersection of Sego Lily and 1300 E) in room 105 on the lower level. The parking lot entrance is on Sego Lily (take the west entrance).

Vineyard Mulls UTOPIA Membership

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With the expiration of a ban on new members, the small town of Vineyard is now considering joining UTOPIA. The city is considering becoming a pledging member meaning that they will promise tax money to cover the debt service should it not be covered by revenues from subscribers. Becoming a pledging member means that they will be guaranteed a build-out of the network. Non-pledging cities, such as Cedar City, will have to wait until there is enough excess revenue to cover the build-out of the network in their city.

Roger Black, COO at UTOPIA, says that the deployment could raise home values by around $5,000 just by having the service available. Vineyard is eager to join sooner rather than later so that lines can be installed in new major developments without having to tear up existing roads. Vineyard is now waiting for a cost assessment prior to committing to joining the network.

(See full article here.)

Telco Consolidation Shutting Down Competitors

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In a rash of related stories, it appears that a mixture of telco consolidation and lawsuits against VoIP providers is going to lead to fewer choices for broadband and phone service. Earthlink has been bleeding money for some time since dial-up subscribers have been fleeing in droves and it doesn't look to get much better as they lose access to DSL customers and the related copper infrastructure. In the process, they're betting the farmhouse on some high-profile WiFi deployments, most notably in Philadelphia. This is the same scenario at Covad, a provider of bandwidth to competing DSL carriers. The company recently announced that they would be laying off about 8 percent of their workforce as business lags.

Meanwhile, VoIP provider Vonage is still embroiled in Verizon's "we own the Internet" lawsuit, putting a damper on the company's future prospects. This is no doubt playing into SunRocket's decision to lay off about a quarter of their staff including several executives. It's also disheartening for these companies as more and more of the fees and regulations associated with normal phone lines are being mandated by the FCC, this time expanded to 711 for TTY and relay services. Combine that with aggressive expansion by both Verizon and AT&T, and it looks like we're heading for an even worse competitive environment than prior to the 1984 "Baby Bell" breakup.

With incumbents getting more and more entrenched and entering new markets a la Standard Oil, the need to keep infrastructure and retail services separate seems more necessary than ever.

(See additional articles here, here and here.)

Cable Companies to Charge More For Set-Top Boxes, Lay Blame on CableCARD

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Expect your TV bill to jump a few bucks by the end of the year. Citing the "new" CableCARD requirement from the FCC, the cable companies are claiming increased costs from supporting the 11-year-old standard first proposed under the Telecommunications Act of 1996. While most brand new TVs and other video devices include a CableCARD slot, most cable operators are hopelessly clueless on how to get the things to work and many give up in frustration, going back to renting the set-top boxes.

Charter Communications has already applied for and received a waiver for enacting the CableCARD requirements that went into effect on July 1 and Verizon is currently pursuing one for its FIOS operations. Anyone want to take bets on how many other companies are going to apply to be the exception to the rule?

(Read more articles here, here and here.)