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.)

Clipper Plugs FreeUTOPIA, Cites Delays in UTOPIA Installation

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Yesterday's Davis County Clipper ran an article about UTOPIA's installation delays, plugging FreeUTOPIA in the process. Where does the blame lie for slow installations? Look no further than the Rural Utility Service. Though the RUS approved a loan to UTOPIA for rural broadband development last fall, paperwork has kept the loan from closing in a timely manner. Once closed, however, it opens the door to deployments in Brigham City, Tremonton, Centerville and Payson, at a minimum.

While the delays can be frustrating, it's worth drastically lowering the cost of installation for member cities. That's probably a small consolation for residents in Murray, Midvale, Orem and West Valley City where construction has temporarily stopped to be able to leverage the federal dollars. The money from the RUS has an expiration date and can only be used on cities with a population under 20,000.

Roger Black, the COO for UTOPIA, says that areas where it's been installed are seeing a 21% take rate, slightly below initial projections but above the take rates needed to have UTOPIA run in the black. This good financial news is in stark contrast to the red ink projected to bleed from iProvo for the foreseeable future despite having a significantly higher take rate. The takeaway is that pooled risk is a Good Thing(TM), something that Provo and American Fork apparently didn't get the memo on.

The funniest thing I find about being mentioned in the Clipper is that I had no idea it was coming until I read the article. You'd think they would want to talk to the guy running a website they find useful.

(See full article here.) 

Telecom Analysts Produce Loud "Duh", Say Better Broadband Stats Needed

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I usually find it amusing when so-called "experts" tell us something that's really pretty obvious. In this case, they're criticizing the FCC's pathetic excuse for broadband stats. What are they telling us that we didn't already know? That stats by ZIP code are way too broad and don't paint an accurate picture of availability and that the number of providers is often drastically over-reported.

This follows a survey from the Communications Workers of America showing that the nation's fastest state, Rhode Island, can't compete with high-speed offerings in Japan, Korea or Canada (eh?) despite what seems like a brisk average speed of 5Mbps. (Canada, for comparison, averages over 7Mbps.) Trailing the pack is West Virginia with a dog-slow 1.12Mbps average, not even enough to match a T1 line.

(See full articles here and here.) 

Verizon, Redmoon Each Independently Decide to Be Evil, Find Sneaky Ways to Display Ads

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Here's a pair of head-shakers for you. Verizon is starting to test a service where mis-typed domain names will instead present search results, much like Verisign's SiteFinder service that caused angry mobs to all but go to the company's offices with torches and pitchforks. The service works at the DNS level meaning that Verizon customers would not be able to bypass it. The biggest problem with this is the impact on tools that look for non-existent DNS records as a way to combat spam and could break other search tools you have on your computer. The obvious motivation is to sell ads on the new "Did you mean…?" screens to make a quick buck. (See full article here.)

And speaking of making a quick buck from ads, Texas ISP Redmoon has found a way to insert ads into web pages that never originally had them at the ISP level. You wouldn't be able to bypass this and it would be a wholesale violation of the intellectual property rights of website owners who spend countless hours building content and arranging it just so. These aren't pop-ups: they're displayed right in the page, modifying the source to insert them. It's also worth noting that this is a paid ISP, not a freebie like Juno or Netzero. (See full article here.)

Hopefully both Verizon and Redmoon will realize that they're on the verge of summoning angry mobs and angrier hackers. 

Governor's Group Want Internet Tax Ban to Stay Temporary

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The National Association of Governors warned Congress that making the current ban on taxing Internet access permanent is a Bad Thing(TM). Their contention is that keeping it temporary gives the government a nice big stick to carry around in case any ISPs start acting up. I can certainly see that taking Teddy Roosevelt's advice to heart is usually a pretty good idea, though I have to wonder if a club does much good if you never use it once in a while.

(See full article here.)

FTC Excuses Itself from the Net Neutrality Debate

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In a move that sounded a lot like a collective "not my job, not my problem," the FTC decided to downplay network neutrality concerns and get itself onto solid, er, neutral ground. In a recently released report, the FTC chose to take no position on network neutrality and downplayed it as not really being all that important. In the process, they urged legislators to move with caution on the issue. Even though this doesn't outright cave in to the wants of the telcos, they'd all prefer the status quo of ambiguity so they can quietly start enacting their own two-tier Internet and deny they're up to anything.

Users of UTOPIA and iProvo, however, have little to fear. Both systems have built-in network neutrality requirements for all providers, so you're not going to face the possibility of having to pay for some kind of "premium" tier to get your BitTorrent on.

(See full articles here, here, here, here, here and here.)

Illinois Joins the Ranks of the Crazy, Allows Statewide Franchising

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Despite a few concessions calling for compensation for missed/late appointments, limiting service contracts to one year and requiring some deployment to poorer neighborhoods, Illinois pretty much handed the telecom industry a license to cherry-pick service areas with little in return. This bill, more-or-less purchased outright by AT&T, is the latest in a dose of crazy talk that gives a lying and monopolistic industry free reign to bypass cities it doesn't feel like serving and bring benefits only to wealthy and upper-middle class neighborhoods while bypassing "less desirable" areas. Aside from the minor concessions, the silver lining is that municipalities are allowed to build their own networks, potentially filling the gap left in AT&T's wake.

Utah recently made a narrow escape from the lunacy of state-wide franchising when SB 209 stalled in the last hours of the 2007 legislative session. It did pass the Senate, however, so it's important you make sure that your representatives in the Senate and House know that you don't want state-wide franchising in Utah. Not only would poorer areas like Rose Park be completely bypassed, but rural towns would also receive little to no benefit.

(See full articles here and here.)

FCC Warm to "Dumb Networks", Universal Access

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In comments at a recent telecom conference, FCC Chairman Kevin Martin emphasized the importance of universal access to broadband connections as well as the role of "dumb networks" in ensuring network neutrality. "Dumb networks" are a lot like the wholesale fiber networks offered by UTOPIA or iProvo where retail and wholesale operations are not operated by the same entity. Even amidst these glimmers of hope, Martin made sure he was playing to the audience of big telcos by taking a wishy-washy stance on local franchising and the upcoming 700MHz spectrum auction.

Not everyone in the FCC is content to sit out the spectrum fight. FCC Commissioner Adelstein has openly voiced support for using the 700MHz spectrum to form an open wireless network that anyone can build on top of. With such a heavyweight behind the idea of divorcing wholesale and retail broadband, television and telephone operations, it's entirely possible that the next six months could yield a major win for real competition in these spaces and provide much better service than what we've been stuck with.

Blogger Susan Crawford isn't so optimistic. She's rightfully ticked off at the abuses heaped on us by incumbents and contends that it will take nothing short of a change of leadership in both the FCC and Congress to facilitate change. Here's to hoping she's wrong. 

(See full articles here, here and here.)