Verizon Accused of Ignoring Copper Infrastructure to Focus on FIOS

Some of Verizon's union workers are accusing the telco giant of letting its older copper lines rot while it builds fiber optics elsewhere. The accusers have alleged that training and repair equipment have been almost exclusively focused in areas where FIOS is being built out. Based on Verizon's history in Virginia, where the complaints emanate from, it seems that lengthy repairs of old copper lines aren't unusual for the company.

As happy as I am that Verizon is building FIOS (better late than never), doing so while letting the poor and rural copper customers get second-rate service just can't fly.

(See full articles here and here.)

Is "A la carte" Cable Coming Soon?

A new bill in the House, introduced as a way to force the offering of "family-friendly" content, also includes provisions for being able to cancel one channel at a time to save the cost of distribution. The bill would require such a new tier of content to not show any TV-MA or TV-14 content between the hours of 6AM and 10PM for all expanded basic channels. The bill could also restrict when "obscene" content could be shown.

Even with the emphasis on a la carte, only about 53% of consumers would be interested and their pricing expectations are steep. Many would want to pay just $24/mo for 26 channels compared to twice as much for 100 channels with most packages. The proposed bill would allow customers to only save the costs of distributing a channel when canceling it, something I would imagine cable and satellite companies don't want floating out in the wild.

It gets pretty complex once you consider how cable operators pay for channels. ABC, for instance, usually offers a discount for carrying the local affiliate in exchange for carrying some of the Disney stations that aren't nearly as popular. Given deals like that, cable operators might actually be in a hard spot between consumer demand and content producer's demands.

(See full articles here and here.)

Net Neutrality Still Under Assault

In a move that surprised pretty much nobody, AT&T's CEO, Ed Whitacre, took a few more potshots at Net Neutrality in a speech that used alarming candor. Referring to getting anti-neutrality legislation passed, he said it's not 'cashing in', it's 'deregulation'. It seems that his replacement is taking a similar tack, wanting to double-dip content providers and destroy the "inter" part of Internet.

Time Warner hasn't wasted a lot of time on scrapping Net Neutrality before legislation goes through. They're recently implemented packet shaping to slow down certain kinds of traffic. Tops on their list are data-intensive applications like BitTorrent and Joost. Essentially, Time Warner is selling high-speed connections with the promise that you get fast downloads… right up until the point you actually want to use it. That smells like lawsuit in the air with a hint of false advertising.

Even cell phones aren't safe. Despite AT&T just about getting its head chewed off for blocking certain numbers in Iowa, T-Mobile has started blocking calls to numbers from a competing provider in the UK. So far, the block seems to only extend to users in the UK, but it'll be a matter of time before they start trying to pull the same stunt in the US. 

Maine, however, isn't content to sit this one out. In response to the assaults on Net Neutrality, they've passed a resolution demanding that more be done to ensure that all data is treated equal. Given Maine's history as a maverick state, this is none too surprising.

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

White City Community Council Meeting – June 6, 2007

The day before the meeting, I got a call from the chair of the Council to offer the spot on the agenda I had been speaking. It was pretty short notice, but I was glad to have some real time to speak to them about bringing UTOPIA to the neighborhood. I quickly put together a PowerPoint presentation and drew up a map of the potential aerial run from the backbone along the UPRR to White City. It also helped that I was able to borrow a projector from work to show off my handiwork.

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Salt Lake City Lacks Broadband Vision

Salt Lake City is home to major fiber optic cables, a renowned university… and a city government that has no idea what to do to get better broadband. Three years after rejecting UTOPIA membership, candidates to succeed Rocky Anderson as mayor can't say what exactly they'll do about increasing speeds or lowering prices. It seems that Ralph Becker is the only one to speak up and support reconsidering UTOPIA, though it comes in the form of a "put it to the voters" cop-out, a fancy way of saying "I don't want to personally commit to it before I get some poll numbers." Even then, the council has already shown that it favors bringing in private competitors, neglecting that building a universal network to rival Comcast or Qwest requires a deep-pockets company like Verizon or AT&T. Is that really progress?

(See full article here.) 

iProvo Gets Tax Money to Cover Bond Payment

The Provo City Council voted 5-1 to pay down part of iProvo's debt using a surplus of sales tax revenue. This replaces the previous proposal to fund another loan from the city's electric utility to make the remainder of this year's debt payment. The Council felt that it was wiser to pay down debt now rather than incur more of it in the form of additional loans. Now that iProvo can pay its debts for the year, what's it going to do to pull itself out of debt?

Current, the project is able to cover operating costs and about 2/3 of the debt service, so it's not like it's that far from being able to break even. Most of the drive, though, is built around the idea that additional subscriber growth will somehow make up the 6,000-8,000 subscriber shortfall. While adding additional service providers and pushing to get more high-margin commercial accounts will certainly help, it's about time they started raising prices just a little bit.

With $1.2M in red ink to cover between 10,000 subscribers, they only need to come up with another $10/mo per subscriber. Adding $5/mo per service would immediately put the project on break-even ground and is a necessary step until the subscriber numbers improve and the loans from the electric utility are paid back. Even with the price increases, iProvo services would still be less expensive than comparable offerings from the incumbent carriers. I'm hoping that someone over there will get past the "if we build it, they will come" mantra and start trying to get on more solid financial ground. In addition to being expensive, the bad press distracts from doing the job right.

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

Will WiMax Be Patent-Encumbered?

San Francisco is intent on using WiMax to reach more rural areas around the Bay Area's numerous hills. Clearwire has bought access from AT&T to start operating a national WiMax network and Qualcomm is set to laugh all the way to the bank. In a move all too reminiscent of Rambus sneaking their patented bits into memory standards, Qualcomm owns a series of patents covering the 802.16 WiMax standard after purchasing a small company that was involved in defining those standards. With that club in hand, they'd had no issues with threatening companies looking to deploy services with heavy royalty fees. With this case of patent trolling likely to drag on for years, WiMax seems like the wrong technology for new wide-spread broadband platforms.

(See full articles here, here and here.)

North Carolina Municipal Networks Could Be On The Rocks

Just as Wilson, NC has been ramping up to build their own municipal broadband network, the state House has passed a bill from committee severely restricting their ability to enter the market. Unsurprisingly, Time Warner Cable is the chief backer of the bill. It should also come as no surprise that a talking head from a think tank (in this case, John Hood from the John Locke Foundation) is using partial quotes and half-truths to back up the opposition. It's very hard to make a solid case when you can be caught lying out in the open.

(See full articles here, here and here.)

iProvo Break-Even Still Five Years Away?

iProvo might still be some time away from breaking even, or so says the "we'll print anything negative about iProvo" Deseret News. According to the article, a miscalculation places the break-even point with current projections as far away as 2012. The original calculation failed to take into account repayment of funds borrowed from the city's electric department. In the meantime, iProvo plans to increase revenues more quickly by adding one or more additional service providers, marketing more aggressively to individual homes and businesses and exploring new services such as security monitoring and teleconferencing.

Personally, I think they need to bump wholesale rates up slightly for some of the services, especially the Internet service, to reach a break-even point faster. Even paying $45/mo for 15Mbps is a steal at just $3 per megabit and that's still lower pricing than what Qwest or Comcast can offer for the closest comparable service. It'd also pump an extra $600K per year into the project just from higher Internet fees. Tack a few dollars each onto the phone and television and the project could be paying off debt early, lowering rates as the revenues increase.

Whatever they do, they need to start erasing the red ink more quickly. All the bad press is going to soften the resolve of the city in holding onto the network.

(See full article here. And remember, it's the Deseret News: they hate iProvo.)

Questar Gas Seeks to Shut Out Public Comment

In a move only a die-hard monopolist would dare engage in, Qwestar Gas is moving to keep individual consumers out of rate hearings. The move is designed to prevent upset customers from criticizing the company and questioning its witnesses at Public Service Commission hearings. This is all despite very few people actually appearing at the meetings and has been prompted by a citizen activist raising Cain over some proposed rate increases.

What does this have to do with broadband policy, you might ask? The Public Service Commission also oversees telecommunications companies. I'm betting that Qwest and Comcast won't waste too much time in supporting Questar's efforts.

(See full article here.)