Tag: "federal"

Posted October 9, 2009 by Christopher Mitchell

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check.

Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans.

Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

But it would probably be more than that because some areas - Montana, Alaska, Wyoming, and other beautiful places will need...

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Posted September 18, 2009 by Christopher Mitchell

In all the wrangling over how we should define broadband, I wanted to step back and remember why the definition is important.

Information networks have become essential for business, education, and entertainment. The broadband definition originally meant something faster than the dial-up speeds that topped out at 56kbps. In the late 90's, any connection faster than dial-up pretty much supported all Internet activities.

Over the years, some connections got faster while the slower connections were expanded to more people across the United States. In 2009, people who remain stuck with dial-up would be happy to get the slow speeds that first became available when DSL and cable modems debuted. On the other hand, many no longer consider those connections (often in the neighborhood of 200kbps to 768kbps for download speeds and even slower for upload speeds) to be capable of supporting many modern applications.

When the broadband definition supported all the applications users wanted to run, it was useful for subscribers. However, as the broadband definition has lagged farther and farther behind modern applications, it has become only useful to large companies like Comcast, AT&T, Verizon, and Qwest because they could brag that they were delivering "broadband" to most of their customers.

The result is a country that can claim x% of the population has access to broadband without that number really telling us anything. We do not know how many home users have access to connections that will support working from home or two-way video chat. We do not know how many businesses can access the speeds they need to be competitive in a real-time world.

When the FCC revises the broadband definition, it must make it more stringent for the following reasons:

  1. Subscribers need accurate information to make informed decisions. If they subscribe to "broadband," they should immediately know if it will actually support modern applications. This means incorporating common usage scenarios: multiple devices concurrently using a connection for browsing, e-mail, games, video-chats, media downloads, and large file uploads (online backup is becoming more popular and easy and people increasingly want to work effectively from home).
  2. Large companies, particularly telephone carriers, claim that there is no need for government intervention in broadband because almost everyone has access under the...
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Posted September 15, 2009 by Christopher Mitchell

This is a slightly older story, but I wanted to make sure it made the rounds.

In "FCC Hires Industry Shill to Develop US National Broadband Plan," OpenLeft.com's Chris Bowers details the shady history of Scott Wallstein, the economics director of the FCC broadband task force.

His past affiliations and quotes regarding the state of broadband in the U.S. are quite troubling. He has said that the U.S. does not have a broadband problem and has a long history of working with "coin operated" think tanks like Progress and Freedom Foundation (so named because they tend to produce reports justifying whatever their corporate funders desire).

This is deeply troubling as his past positions run directly counter to many of the values espoused by President Obama and his FCC Chairman, Julius Genachowski - particularly on the important issues of open access and network neutrality.

Posted August 17, 2009 by Christopher Mitchell

When it comes to the National Broadband Plan that the FCC is tasked with developing, we at muninetworks.org have a red line. No matter what the federal policy, all communities must reserve the right to invest in and own their own networks. These networks are essential infrastructure; no community must be left incapable of securing its future prosperity.

FDR recognized this important community right:

I therefore lay down the following principle: That where a community--a city or county or a district--is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service.

That right has been recognized in a good many of the States of the Union. Its general recognition by every State will hasten the day of better service and lower rates. It is perfectly clear to me, and to every thinking citizen, that no community which is sure that it is now being served well, and at reasonable rates by a private utility company, will seek to build or operate its own plant. But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.

We believe a national broadband policy could go much farther to strengthen communities by spurring fast networks everywhere, but we also recognize a political reality: incumbents providers have little to gain from a national broadband plan (especially one that goes so far as to encourage actual competition) and while their networks fall behind the times, they are able to pump all kinds of money into DC (and state legislatures around the country).

Therefore, we stand by our red line. We will hope for more, but early signs are not good. Karl Bode offers 5 signs the broadband plan is already in trouble. I want to highlight one, but the whole post is a must-...

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Posted August 7, 2009 by Christopher Mitchell
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Posted July 8, 2009 by Christopher Mitchell

I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country.

Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it.

We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts.

Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.

This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences.

The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.

If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it.

Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):

I am in the minority in thinking they played this right. There are too many good projects...

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