North Carolina Municipal Networks Could Be On The Rocks

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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?

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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

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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.)

VoIP Hit With USF Charges, Blocked Access

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It's a bad week to be Vonage. A federal court has ruled that all VoIP providers must start collecting and paying into the Universal Service Fund (USF), adding about $1.30 a month to the average bill. Vonage had sued the FCC to protest not only having to pay but having to pay so much compared to wireline and wireless providers.

To top it all off, South Korean telcos have blocked all access to VoIP services not provided by a company registered in South Korea. This would be such a big deal except that US servicemen stationed in Korea use Vonage lines with US numbers to call home without paying through the nose. The shutoff occurred on June 1 after a one-year delay in enforcement.

(See full articles here and here.)

IPTV is the Future of Television

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As new entrants into the cable TV market look for more efficient means of delivering video compared to the broadcast signals of coax, more and more of them are turning to IPTV. AT&T is pushing U-Verse while Verizon pushes FIOS, but a number of smaller RLECs are getting into the game too. The advantages? By streaming only a few channels at a time, the compression isn't as aggressive leading to better quality signals and lightning-fast channel changes. As telephone companies seek more creative ways to push new kinds of data over aging copper, turning the whole thing into an IP network to cram as much voice, video and data as possible is the Next Big Thing(TM) until they can afford fiber… or get pummeled int he market, whichever comes first.

(See full articles here and here.)

ISP Bandwidth Shortage May Lead to Video Restrictions

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Reports from the UK show that some ISPs are engaging in "packet shaping" to restrict the use of peer-to-peer video services, even if they're legal. Given the net neutrality debate in the US, we might very well see such things coming to our shores soon, especially since telcos and cablecos can't keep up the connection speeds. Compared to other nations, the US is in the slow lane when it comes to broadband. While the Japanese enjoy an average rate of 61Mbps and our Canadian neighbors zoom along at 7.6Mbps, Americans have an average speed of anywhere from 1.9Mbps to 4.8Mbps depending on who you ask. It's enough to have Congress ask the GAO to get on the task of figuring out where we've gone wrong.

While some will openly question projects like Verizon's FIOS as more bandwidth that we could ever need, it's worth noting that 20 homes in 2010 will transmit more data than the entire Internet did in 1995. With all of the bandwidth crunches and the stopgap measures like U-Verse (which can manage a measly 24Mbps), fiber is truly the only option left to make ourselves competitive again.

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

Municipal Wireless Has a Place

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I'm not a fan of most municipal wireless systems. They're usually greatly over-budget while delivering weak indoor signals and low speeds. Earthlink has been learning the hard way that municipal wireless is bad business, significantly scaling back the number of projects it had planned to handle.

Wireless does, however, go right from time to time. Witness the police department in Providence, Rhode Island. They took advantage of federal grants to install a city-wide WiFi network that has most cops only visiting a station for repairs, bookings and dropping off evidence. Now that the first responders have embraced it so fully, the city is now looking at ways to roll out the service to other departments as well as providing some public access.

That's where municipal wireless needs to go: build the network for internal use and gradually allow the public to have a slice of the bandwidth pie. Municipal fiber networks could also improve their financial outlook by building for the city first and residents second.

(See full articles here, here and here.)

(UPDATE: Another article here.)

Illinois Pushing for Universal Rural Broadband

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Rural areas are found to be woefully underserved when it comes to broadband options, a condition that could stunt economic growth. It's no wonder then that Illinois is aggressively pursuing universal access for everyone in the state. Lt. Governor Pat Quinn is one of the main cheerleaders for rural broadband, pushing the DOT to install fiber lines whenever they do a road repair. That's not a bad idea considering that trenching is the bulk of your expense. They're taking some leads from Virginia, a state that has spent millions to install fiber-optic lines to rural communities. Already it's paid off with over 700 new jobs in the town of Lebanon, population 3,000.

(See full articles here and here.)

FTTH Growth is Brisk Worldwide

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While WiFi gets lots of press in the US, fiber seems to be making big splashes abroad. Countries like Lithuania, Slovenia and Norway are rolling out FTTH networks with speeds up to 1Gbps while Asia's FTTH base in Japan, Korea and Singapore is growing at a brisk pace. The number of worldwide broadband subscribers is expected to double in the next 5 years with fiber solutions comprising over 10% of those connections. Old-school pokey DSL, a technology that leverages antiquated copper networks, is expected to still be the world-wide dominator though mainly in under-developed countries that can't invest in new fiber networks.

Currently, the demand for high-speed fiber is rapidly making DSL and cable modems the new dial-up, leaving them in the dust in terms of speed, responsiveness and uptime. Users of Verizon's FIOS usually can't find anything but praise for the service and every UTOPIA and iProvo subscriber I've met is pleased as punch. Users of DSL and cable, however, usually have nothing but complaints about low speeds, poor service and unexplained outages. Them's the breaks of copper.

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

Municipal WiFi Failing and Ailing

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Plagued by poor signal strength, low subscriber numbers and generally botched installs, municipal WiFi is looking like the monorail of the 21st century. Most subscribers complain that not only do signals often drop or fail to get inside of their buildings, but the speeds experienced are slower than traditional DSL or cable modems. Since WiFi only supports Internet access, the investment takes many more subscribers to break even than do FTTP networks that combine voice, video and data. While some municipalities hope to boost subscribers by luring in cell phone users that can take advantage of built-in WiFi, it's a gamble that some cities just aren't willing to take.

Even with the high-profile failures and big losses reported to Wall Street, Earthlink is plunging ahead with WiFi in Philadelphia despite its uncertain future in San Francisco and cutting back on the number of projects it intends to tackle. With its dial-up business riding off into the sunset and co-branded DSL services not being widely available, you have to wonder how long the well-known ISP can continue to run in the red. 

Let that be a lesson: when you try and do something cheaply as opposed to correctly, it'll get you in the end.

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