I've been watching a train wreck in slow motion the past few weeks as the state I now call home fumbles away $80 million of federal money to bring broadband to connect the unconnected.

The story is that the Louisiana State University Board of Regents was awarded an $80 million broadband stimulus grant from NTIA to extend LONI, Louisiana's statewide research fiber network, primarily into the northeast part of the state.

In particular the LONI extension was going to bring affordable 100Mbps service to rural high schools across wide swathes of Louisiana.

Only now those schools won't be getting these connections. Why?

Public details are sparse at this point, but NTIA's justification for pulling the funding is that there were serious doubts about whether the project would be able to spend its money fast enough to meet programmatic goals.

The other thing we know is that at some point in the process the Board of Regents asked the Governor's Office to get involved in helping get things back on track.

Only instead of focusing on how to execute more efficiently the plan as originally conceived, LA Commissioner of Administration Paul Rainwater appears to have shifted gears and tried to radically change the plan.

What was originally envisioned as $80 million spent to extend the physical infrastructure LONI into rural parts of the state that aren't currently adequately connected, instead became a plan to use that money on long-term lease with private providers.

Not surprisingly, the NTIA rejected these changes. I say "not surprisingly" not because I'm against public/private partnerships but because of the realities of this broadband stimulus program. There's no way NTIA could let a grantee not only radically change their plan this late in the game, but also do so in the direction away from investing this money directly into building out new infrastructure.

Here are some choice quotes reflecting LA Gov Jindal's perspective:

"Rainwater, whom the Board of Regents asked to help save the funding, said the grant as modeled would have 'basically created a public telecom.'

'The grant as presented would literally have built new infrastructure on top of existing infrastructure,' Rainwater said. 'It would have been a government takeover of what typically is a private service.'"

There is truth to what he's saying here, but he's missing the point. Would there be some new infrastructure built on top of existing infrastructure? Yes, but primarily in two situations.

The first is simply that there is infrastructure that's out there that's either outdated and incapable of delivering the service that's needed, or overpriced and not affordable to schools. In either case, the needs of our community anchor organizations aren't being met.

The second is that there was going to be a small percentage of the money used to replace some local loops of leased fiber within some cities around Louisiana.

The back story on this is that when the Louisiana legislature approved the $30 million to build LONI in the first place, it was touted as having the potential to be a tremendous tool for economic development. Unfortunately what happened is that other than a few runs of Department of Transportation fiber that were given to LONI, the rest of LONI is made up of leased circuits from carriers with very restrictive usage terms.

Basically, the only thing that can run on most of LONI is pure research traffic with no commercial component.

Well, when you're trying to commercialize university research this can create a problem. And I know it's significantly limited the potential use of LONI in general while specifically negating most of the network's potential as an economic development tool.

By overbuilding these leased local loops and becoming a "public telecom" LONI was going to finally be able to realize its potential as an economic development engine for Louisiana's push to be a national leader in the digital media industry.

Making my blood boil even further, check out these statements:

"Rainwater said he won't pursue an appeal to recover the grant."

And,

"Rainwater acknowledged that there are areas in the northeastern Louisiana Delta where there is no broadband infrastructure in place. 'We'll be working with them to create some true public-private partnerships,' Rainwater said."

For starters, how can any state be so nonchalant about losing $80 million to improve their broadband infrastructure? Who cares who's going to ultimately own that infrastructure? If nothing else, think about the dozens of jobs this money would have created both directly and indirectly.

Then for them to make vague references to "true public-private partnerships" is a real insult to rural Louisiana communities. Even if there were serious plans in place with funding identified, which I don't think there are, these communities just went from build out starting tomorrow to in an ideal world not happening for another couple of years. And realistically, these communities just went from the promise of getting connected by 2013 to 2015 at the earliest and likely not until 2020, if ever.

I'm truly appalled at how this whole thing's gone down, though I wish I could say I'm surprised. We continue to have officials at all levels of government refusing to acknowledge the basic tenant of rural broadband: you're either subsidizing deployment or profits.

You're either spending public dollars on building out public infrastructure, or you're spending public dollars on trying to make rural areas profitable enough to entice private providers to build out their own infrastructure.

Has telecommunications traditionally been an area where services were delivered by the private sector? Yes, but isn't the reason rural America isn't connected yet because of a breakdown in this reliance on market-driven forces?

In my opinion the number one question on policymakers' minds should be: "How do I get my communities connected enough to be competitive in the global digital economy?"

Unfortunately, our state lawmakers in Louisiana seem more worried about the question of: "How do we hold as close to the status quo as we can despite the current broadband marketplace being broken in many smaller communities?"

If ever there were evidence of a state prioritizing the protection of corporate interests over the welfare of their constituent communities, this is it.

I just hope that this development doesn't set back rural Louisiana the decade or more I'm afraid it will.

Posted by Geoff Daily on October 31, 2011 8:50 AM | Permalink | Comments (0) | TrackBacks (0)
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Oy, the net neutrality debates just got uglier. Within days of the FCC's net neutrality rules becoming the law of the land, their legitimacy is getting attacked by lawsuits from all sides.

Not only is Verizon calling into question the FCC's authority to regulate broadband at all, even the supporters of net neutrality are calling foul over the FCC's "arbitrary" decision to regulate openness differently between wireline and wireless networks.

What this all leads me to is confirming my belief that the FCC screwed up in taking an approach of trying to find consensus in the crafting of these rules.

Don't get me wrong, I understand why they did it this way. They hoped that a compromise could be found where everyone's a little unhappy, but overall they're satisfied enough to live with the new rules.

Unfortunately I think they misread how polarized the two sides of the net neutrality debates were, and they didn't recognize the politics that have to be played in order to reach anything resembling consensus.

By politics I mean basic things like making sure you have a base of support for what you're doing. There's no way you can get anything of significance done today in politics without at least one side of an issue fervently supporting what you're doing.

Yet the FCC never established that base of support. For the pro net neutrality camp, they were perceived as capitulating to the carriers and not having the will to strive for truly transformational new rules. For the anti net neutrality camp, they never even got them to agree to recognize their authority to regulate broadband in the first place.

And now we're in a position where we have net neutrality rules, but net neutrality supporters are suing because they think they're inadequate, and net neutrality opponents are suing because they don't think the FCC has the authority to implement them in the first place.

Where this is going to leave us is with net neutrality stuck in the courts for an indefinite period of time, and therefore no progress being made to protect consumers or provide regulatory certainty to providers.

The biggest thing that's been missing in this process, in my opinion, isn't just the political savvy required to build a base of support, but also a sense that the FCC has a bigger vision for the future they're trying to enable through these rules. Instead their efforts in net neutrality seem more about making changes around the margins based on the concerns of today in the hopes of quelling malcontents, rather than laying out a plan for where they want to go tomorrow.

The reason I point this out as an issue is without a sense of a bigger picture vision it leaves the FCC's actions open to criticism based purely on their merits as they stand today. If there were a bigger picture, longer term vision, the FCC could frame their actions of the present as steps being taken to get us to a better future.

What I'd love to see them do is to take the time to build upon the national broadband plan to more clearly define what our vision is for the future of broadband in America. Then we can use that vision for the future to define what the best steps to take today are. And the FCC can focus on building consensus first around what that future should look like, and then use that to frame all of their decisions moving forward.

Will this actually happen? If you consider how they're approaching USF reform, the odds are low. Yet again they're plowing forward with rules that don't necessarily have strong support for any one corner and that don't relate to any bigger picture longer term vision for where we want to be in the future.

But ever the optimist, I'm hopeful that it's never too late to recognize the limitations of how business is currently being done, shift gears, and start doing business differently.

Let's just hope that our representatives at the FCC can take a moment to reflect on these lawsuits as not just another example of it being impossible to please everyone, but instead as a learning opportunity to find a new way of going about trying to gain consensus.

Let's stop trying to please everyone right out of the gate. Let's start being bold in laying out a clear vision for the future. Let's build support around specific initiatives to get us there. And let's move forward as a country knowing that you can't make everyone happy in the short-term if you're trying to build a better future for everyone in the long-term.

Posted by Geoff Daily on October 3, 2011 9:56 AM | Permalink | Comments (0) | TrackBacks (0)
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While details are still scarce, I'm delighted to share with you all the recently announced US Ignite initiative, initially described here in this White House blog post.

US Ignite is a joint initiative of the White House's Office of Science and Technology Policy and the National Science Foundation. US Ignite is "designed to promote US leadership in applications and services for ultra-fast broadband networks."

On multiple levels, I find this to be an incredibly significant effort.

As readers of this blog know, I'm a big believer in the power of fiber and big broadband networks, and like most of you I envision a future where a whole host of bandwidth-intensive apps are revolutionizing everything from healthcare and education to government and industry.

But I've long been worried that as a nation we're not focusing enough attention on building the next generation of the Internet. Instead the vast majority of our entrepreneurial energy and press coverage are focused on incremental improvements to the existing Internet.

Now, this mindset makes sense within the context of individual entrepreneurs. They're building businesses aimed at the biggest markets, which today means slow broadband connections and limited performance.

But when you look at the rest of the world at a macro level, a disturbing potential starts taking shape. With countries like South Korea, Japan, and the Netherlands racing forward with universal full fiber deployment, their innovators are being enabled to think beyond what the Internet looks like today and start imagining and building what it can look like tomorrow.

Research has shown that it can take 5 years to realize the full benefits of increases in broadband capacity. Well a country like South Korea's already at least 5 years ahead of us in terms of deployment. The question I have is when are they going to start getting five years ahead of us in terms of the utilization of this new capacity? And when they do, what will that mean to America's future as a leader in the digital economy?

If you look at the current Internet, most of the biggest brands online are American companies. We were the first country in the world to have large-scale broadband networks, and as such our innovators and entrepreneurs were able to cement our leadership in the online world.

The challenge is that that leadership position is not guaranteed in a world where countries are going hard after delivering gigabit service to their citizens while we stay stuck at a few measly Mbps.

But how can we take serious steps to overcome this?

Figuring out a large-scale fiber deployment strategy ala South Korea is next to impossible, especially given current economic conditions.

Thankfully, many communities and private providers have already taken it upon themselves to deploy this crucial 21st century communications infrastructure, and therefore are poised to support this kind of networked innovation.

The challenge becomes how do you make these more limited markets attractive to entrepreneurs to invest in building solutions for, and how do we capture the imagination of our country's innovators to start focusing on dreaming up big solutions to our nation's biggest problems through the availability of high capacity networks.

And it's to these last points that I'm so excited about the US Ignite program. At its core, its purpose is to aggregate sufficient US users connected to high capacity networks to create a large enough addressable marketplace to be able to sustain businesses delivering solutions that leverage these networks. US Ignite in purpose and in name is also intended to be a big sign post to let our country's innovators know that these networks exist here in America and that we want their ideas and energy for how to take greatest advantage of this capacity.

While the Google Fiber project started to move the needle on conversations around the value of investing in high capacity fiber networks, I think that US Ignite has the potential to fundamentally shift our perception as a nation about the potential value of these networks.

Though we may still be years away from large scale deployment of fiber in the US, the US Ignite program is going to play a crucial role in making sure that we don't lose any more ground in the meantime as leaders of the digital economy.

Because I firmly believe that America is still home of the greatest innovators and entrepreneurs in the world, and if we give the opportunity and the resources to do great things that that's exactly what they'll do.

Look forward to reading more coverage of the US Ignite program on this site moving forward as when you're talking about the intersection of broadband networks, applications, and policy there's arguably nothing more exciting going on right now than the potential of this program to move the needle when it comes to expanding our capacity as a nation to develop the next generation of Internet applications.

Posted by Geoff Daily on September 14, 2011 10:36 AM | Permalink | Comments (0) | TrackBacks (0)
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Yesterday Hawaii's governor announced his intentions to be the first state in America to pursue the goal of all its citizens having access to affordable gigabit service in their homes by 2018.

While details are scarce, this will be an official state initiative co-managed by the Department of Commerce and Consumer Affairs and the Department of Business, Economic Development and Tourism.

This is a huge deal, especially for a state that's been ranked 31st by some measures in current broadband connectivity.

Now, there's no specific promises being made yet of public funding coming available, nor is there any sense for how this network's going to get built and who's going to pay for and own it, but I have to give them credit for publicly announcing that they're at least going to try.

What Hawaii Gov. Ambercrombie has realized is that the future of his state's economy as well as the quality of life of his state's citizens relies upon the availability of high capacity low cost bandwidth, and that the only way these networks are going to get built in a rapid ubiquitous fashion is with at least some measure of government leadership and support.

I also like how they're combining the efforts of two significant government agencies in this process. An initiative like this demands cross-department collaboration throughout, so hopefully these agencies can work well together to drive this initiative forward hard.

And drive it hard they will have to. While Hawaii is not a big state geographically, it may have some deployment challenges with its mountainous terrain. But more significantly, no one's gone after a statewide residential gigabit network before, and there are so many questions that need to be answered before the actual design and deployment of the network can even begin.

I don't know a lot about the dynamics of Hawaii's current government, economy, and telecommunications infrastructure, so I can't prognosticate too specifically about whether or not I think this project has a good chance at succeeding.

What I do know, though, is that it is such a relief to see an elected official above the local level step up for this vitally important cause. If nothing else, Hawaii's announcement should draw attention to these issues, and hopefully help spur others at the state and federal level to gain the courage to speak out in bolder terms about what the future of our country's broadband infrastructure needs to be.

With countries around the globe driving hard to deliver gigabit service to their citizenry through fiber, and America standing at a critical juncture in our future as world economic leaders across multiple fronts, we can not afford to take our eye off this most critical of infrastructure for supporting growth in the 21st century.

And with leaders like Gov. Abercrombie, I grow increasingly confident that we can remember and rekindle the greatest that lies within us as a nation to come together to build this crucial enabler of our future.

Posted by Geoff Daily on August 24, 2011 10:36 AM | Permalink | Comments (0) | TrackBacks (0)
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Apple has long been a company on a quest to end our reliance on optical media like CDs and DVDs. But the release of their latest operating system, Lion, has taken things to a whole new level.

The only way you can get Lion today is by downloading it through the App Store. Eventually you'll be able to get it on a USB thumb drive, but you'll pay a premium to do so. So no more boxes with discs on shelves, Apple has evolved into relying pretty much entirely on virtual distribution to get its software and content into the hands of customers.

This is a significant milestone for a number of reasons.

First of all, one of the biggest tech/media companies in the world has decided we've reached a tipping point where it no longer makes sense to distribute software via physical media. While there've been cracks in this dam for a long time with both TV/movies and games, this is arguably the highest profile case of software being taken off the shelves entirely in favor of going online.

As such I think the floodgates are going to open even wider now on the question of how much longer we expect to be able to buy discs off shelves. It often seems like we talk about an all-virtual distribution system for media as something that will eventually happen sometime in the future. I think it's time we wake up and realize that that transition's already well underway and has the potential to kill off physical media in the next five years.

But there's a second significance to Apple's move that relates directly to the viability of these virtual distribution systems becoming a primary means for moving software and content to consumers. And that's the fact that Lion is kind of a heavyweight file to download, almost 3.5GB of data. (Quick factoid, Apple delivered a million copies of Lion on the first day, meaning 3.5 Petabytes of data was transferred in 24 hours for one piece of software.)

Now, for those of us fortunate enough to live somewhere where there's fiber like I do in Lafayette, this may not be a major issue. I decided to go whole hog and plug my computer directly into the ethernet cord coming from the side of the house, speed testing at 60Mbps down and about 30Mbps up. Then I sucked down all 3.5GB of Lion in less than 30 minutes. It took longer for the software to install itself than it took to download the file.

Unfortunately, not everyone can be as lucky as we residents of the fiber nation, and that's where trouble potentially looms for the future of virtual distribution.

Say I'm a Mac user who wants Lion who lives in rural America whose only "broadband" option is satellite. Even if I'm paying for the most expensive residential service, my daily download limit may be less than 500MB, meaning it'll take a week to download this software.

Say I live in urban America and I access the Internet using mobile "broadband" that often doesn't deliver more than 200Kbps with monthly caps of 5GB. Now it's taking me two days to download and I'll only be able to do basic web surfing the rest of the month to make sure I don't go over my cap.

I point these two specific examples out as our elected officials often like to talk as if satellite and 3g "broadband" are sufficient for our nation's rural and low income populations. While Apple is obviously a luxury brand, this trend towards virtual distribution is universal and Lion exemplifies the kind of bandwidth demands all users will have in the future.

Because of this our country needs a universal broadband infrastructure capable of enabling these virtual distribution systems. The files companies want to deliver today are already huge and they're only going to get bigger over time. So simply having access to the Internet isn't enough, broadband needs to be a digital freeway into homes that empowers the delivery of all software and content to all Americans.

Software and content are foundational components of our economy, and their significance should only grow as the global digital economy evolves. Broadband is the transformational force that is going to allow software and content to grow even more vigorously.

So let's not limit ourselves to seeing broadband as simply access to the Internet. Broadband is the ultimate enabler of our 21st century digital economy, but it can only have that impact if its capacity is sufficient to live up to the needs of this new economy.

Posted by Geoff Daily on July 26, 2011 9:28 AM | Permalink | Comments (0) | TrackBacks (0)
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One of the most important intersections where broadband networks, applications, and policy collide is in the area of broadband providers introducing bandwidth caps on their users.

A recent Wired.com article entitled "Comcast Bans Seattle Man From Internet for His Cloudy Ways" has done a spectacular job of painting a detailed picture of one case where bandwidth caps on broadband service are clearly limiting innovation.

This article tells the story of Andre Vrignaud who "committed the foul of using more than 250 GB of data on Comcast two months in a row, triggering the company's overage policy that results in a year-long ban from using its services."

Typically so-called "bandwidth hogs" like Andre are assumed to be illegally sharing movies through peer-to-peer networks, but the article highlights that isn't the case this time.

Andre's crime is simply that of being a technology enthusiast. He takes high quality digital photos, listens to high quality digital music, backs up his computers in the cloud, and watches all of his TV and movies over the Internet.

The issue isn't that he's doing any one of these things, it's that he's using all of them extensively, plus he has roommates who are also consuming bandwidth, and now as a result he's banned from Comcast for a year for crossing his bandwidth cap two months in a row.

So what's he supposed to do? In the immediate term, he's stuck with lesser broadband options like DSL and wireless which tend to have much lower caps than Comcast's 250GB/month. Which points to the longer term issue of how he's going to be able to use or, perhaps more accurately, not use the Internet in the future.

Is he supposed to give up watching movies online, or sharing photos with friends? Listening to music online, or backing up his computer in the cloud? These are the kinds of questions that bandwidth caps force users like Andre to ask themselves and that will inevitably suppress usage of some or all of these applications. Less usage means less demand which will likely mean less innovation.

Yet there's a reason I used the word "conundrum" in the title of this post as unfortunately the issue of bandwidth caps isn't that cut and dry.

From the perspective of broadband providers, power users like Andre represent a real challenge to their business plans.

For one, all-you-can-eat broadband plans provide no mechanism for providers to recoup additional costs associated with supporting power users like Andre. Plus they're understandably a bit bitter that this consumption of bandwidth tends to be associated with some form of commerce and profit-making activity that they're not able to participate in. Their costs go up but their revenue stays flat while others are making money.

Now, this point is actually a bit more nuanced than this as the primary costs to operate a broadband network are related to overall capacity vs. paying for each bit sent and received, which is why many criticize providers for implementing caps that charge based on bits transferred.

But where providers really don't like power users is that what's currently a small segment of the population is trying to force their hand to accelerate improvements in their networks' overall capacity and performance. It's that top 1% of users that can never have enough bandwidth and always want more capacity and better performance.

So from a provider's perspective, power users like Andre are consuming an order of magnitude more bandwidth than average users, are demanding accelerated investments in network upgrades to suppor this usage, and yet in today's world offer no promise of additional revenue.

With this in mind, as a provider, I might actually hope that by imposing bandwidth caps I'm dissuading power users from consuming too much bandwidth and expecting too much from my network. If the vast majority of my customers are fine with what I'm offering, and I've got healthy margins with the way things are, why change trajectories to accommodate a small number of outliers who offer no additional return on my investment?

The problem with this detente is that it seriously risks our country's future competitiveness in the digital economy. It's my belief that with other nations around the world investing in truly next generation networks, there's going to be an explosion over the next decade in innovative applications that take advantage of these high capacity high performance fiber networks. But if America stays stuck in the paradigm of bandwidth scarcity, this explosion of innovation and ultimately economic development is more likely to happen elsewhere.

While power users like Andre may seem like outliers today, they really represent the first fully realized generation of digital natives, which are more likely to become the norm than not in the coming years. What I'm hoping is that through these discussions on the merits of bandwidth caps we can start getting serious about really important related issues like long-term capacity planning for our country's broadband infrastructure.

Solving these problems given the characteristics of the American broadband marketplace won't be easy, and at this point trends seem to be headed in the wrong direction, with bandwidth caps becoming the norm and the debate being about whether or not they're evil rather than how they're symptomatic of larger structural issues in the market as a whole.

But I'm hopeful that if we can start building consensus on the fact that we want a future where guys like Andre are empowered to continue being power users and finding new ways to leverage these next generation networks to improve their lives that we can make forward progress towards finding solutions to this conundrum.

Posted by Geoff Daily on July 19, 2011 10:51 AM | Permalink | Comments (0) | TrackBacks (0)
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Recently South Korea made the kind of announcement that makes me a bit embarrassed to be an American and quite envious of South Korea's ability to consistently raise the bar for themselves and therefore the rest of the world in terms of how they're embracing broadband to revolutionize their society.

This announcement was South Korea's intentions to spend $2 billion over the next five years to transition fully from paper textbooks to digital.

Their vision is pretty straightforward: every South Korean student having their own device (most having purchased it themselves, with subsidized units for the poor) and having access to a comprehensive selection of robust digital textbooks.

As they're planning on most students purchasing their own devices, the bulk of this money's going to be spent on producing the content of the digital textbooks, which is really smart as hardware can be commoditized but without content this whole endeavor's meaningless.

I find this to be a really profound move across multiple levels.

For one there's the obvious potential benefits of moving away from paper textbooks to students. While there's still a lot that has to go right for this to work, assuming it does it'll mean South Korean students will have access to more information presented in more dynamic ways through this initiative, which should improve their learning overall while also continuing to make them more and more comfortable using information technology, plus I bet they have less back trouble as they free themselves from having to lug around stacks of books.

Secondly, there are clear benefits to school systems as they'll no longer have to worry about replacing outdated paper textbooks, which should save them the overhead of purchasing and distributing new books while simultaneously making sure students always have access to the latest information rather than having to balance educational need with the fiscal constraints of schools when deciding how often to update paper books.

Third, I think this could have profound economic development implications. Through these efforts, South Korea's going to become a clear global leader in the production and utilization of digital textbooks. Not only will this create opportunities for companies domestically, but it could position those that are most innovative in South Korea, especially in the creation of interactive content, to grab significant share of the global market, which should boom over the next decade.

All in all this effort has the potential to be a tremendous investment in South Korea's future, both in the direct impact it should have on education and the potential long-term impact on digital economic development.

So how is South Korea embarrassing the US? Well let's compare/contrast our efforts on this side of the Pacific.

While I'm not intimately aware of all that's going on at the Department of Education, a program I am familiar with, which is one of the strongest and biggest when it comes to supporting digital education in the US, is e-rate, a program within the Universal Service Fund (USF) that helps subsidized the communications costs of schools and libraries.

Each year we're spending about $2.5 billion through e-rate, which sounds pretty respectable compared to the one-time investment of $2 billion that South Korea's making. But unfortunately this rosy comparison is only skin deep.

Today pretty much all of that money is being used to subsidize the cost of communications services like broadband or telephone service. How effective has this been? A recent survey showed 80% of e-rate recipients indicated inadequate access to bandwidth, either because it's too expensive or not capacious enough.

Now the buzz in DC telecom policy circles is USF reform. In particular, a proposal has circulated to expand eligibility for reimbursement from e-rate to ebooks. Unfortunately, the proposal makes no mention of expanding the pool of funding available. It's important to note that e-rate's already arguably underfunded as each year there are more requests for subsidies than there's money to give.

So basically, while South Korea's investing $2 billion in establishing a robust digital textbook infrastructure, we're making what will likely be a tiny fraction of that available not through a coordinated national initiative but simply to those individual school systems that are ahead of the curve.

As another point of reference, South Korea is a country of just under 50 million people. That means an equivalent investment by the US in digital textbooks should be more than $10 billion. Yet we'll be lucky if a few hundred million gets invested. Plus, our approach is to be consumers of textbooks rather than producers, meaning fewer economies of scale and less hope of US companies becoming global leaders in the production of digital textbooks.

All in all, this is another example of the glaring, and unfortunately seemingly widening, gap between a country with a clear strategic plan for how to get the most out of broadband to become a leader in the global digital economy and a country that may have once been known for having big vision but today seems only capable of taking half steps forward with no clear direction of where we're going. I'll let you guess which country is which.

Posted by Geoff Daily on July 11, 2011 8:32 AM | Permalink | Comments (0) | TrackBacks (0)
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This morning for the umpteenth time I read about the FCC claiming that making more wireless spectrum available will help solve our rural broadband problems. While I generally roll my eyes at the FCC's obsession with spectrum to the detriment of paying attention to fiber, for some reason today I found myself asking the simple question: will more wireless spectrum really help drive more rural broadband?

The FCC talks about spectrum's impact on rural broadband as if they're tied at the hip, but is that really the case? While not an expert on wireless, let me try to unpack this a bit.

For starters, my understanding is that the need for more spectrum comes from when existing spectrum is jammed with too much additional traffic. If that's the case, then doesn't that mean spectrum scarcity should be more of an urban problem than a rural one? Given the lack of population density, it seems hard to believe that rural America's really suffering from a lack of available spectrum.

The next important point to consider is that spectrum is definitely not the only contributing factor to the rate at which robust, reliable wireless broadband can be deployed. The other two components are the density of towers and the capacity of the backhaul connections to those towers.

While the FCC may talk about spectrum as the chokepoint for wireless broadband, I'd argue the bigger choke points are when too many people are having to share the same tower.

You'd think having too many people sharing the same tower would be a much bigger deal in urban areas, but that isn't necessarily the case as there's such a lower density of towers in rural areas that each tower has to cover users within a much larger radius.

Also, having access to high capacity, affordable backhaul so these towers can actually deliver the traffic that spectrum makes possible can be a really big challenge in rural areas. Plus it's a challenge that requires a lot more effort to resolve than freeing up more spectrum as it means having to invest in laying fiber.

I'm not willing to be so bold as to suggest that a shortage of spectrum is not having some impact on depressing investment in rural broadband, but it seems that spectrum is likely the least of the many barriers to deployment.

As such, I'd ask that our federal government stop trying to force a spectrum crisis down our throats and claiming that it's the most important thing to resolve when what we really need is a more holistic approach to addressing our country's broadband shortcomings.

Spectrum may be important, but it's not the only thing that matters and arguably is one of the things that matters the least, especially to encouraging rural broadband deployment.

Posted by Geoff Daily on June 27, 2011 11:43 AM | Permalink | Comments (0) | TrackBacks (0)
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Enough is enough: the Universal Service Fund (USF) is insane.

To those who haven't heard of the USF, you've most likely paid into it. It's essentially a tax on wireline telephone services that's used to subsidize the availability of telephone service in rural areas.

The big debate around USF today is how do we evolve the program to support increased availability and adoption of broadband in rural areas.

So why do I say that such a right-minded-sounding program is insane?

Let's break things down.

For starters, USF is collected from telecommunications providers as a percentage of their interstate end user revenues generated from delivering wireline, wireless, and VoIP telephone services.

Each year the USF Contribution Factor that determines how much each provider puts in increases, rising from roughly 5% to 15% over the last 15 years.

Each year telecommunications provider pass through this increased cost to their customers.

While USF isn't officially considered a tax, each year the government is taking more and more money from taxpayers and a greater and greater percentage of telephone revenue to subsidize rural telephone service.

So how much money have we, the American people, paid into USF over the last 12 years? More than $80 billion.

That's obviously a lot of money. So what are we getting for our dollars?

We've subsidized rural residential telephone service to the tune of more than $50 billion. We've put almost $30 billion into better connecting our schools and libraries, first with telephone and now increasingly with broadband services. And we've throw almost half a billion dollars into rural healthcare broadband networks.

Those are the numbers, but what's the reality of the impact of these investments?

Unfortunately, there are clear shortcomings across all of them.

We've been subsidizing the build out and maintenance of 20th century copper telephone networks during the first decade of the 21st century when the rest of the world's been investing in fiber.

Our subsidy system is so broken that some telephone providers are collecting more than $20,000 a year to deliver telephone service to one remote household.

A recent survey of schools and libraries that receive USF support through e-rate showed that more than 85% had inadequate access to broadband, either because there wasn't enough bandwidth available or it was too expensive to afford.

An incredible number of schools and libraries are still stuck with T1 lines that can only deliver 1.5Mbps per line and that can cost hundreds and even thousands of dollars a month.

And many of our rural healthcare pilot networks got built exactly the wrong way. Rather than leveraging existing network assets and building multi-purpose capacity that could be leveraged by other facets of society like education, these pilots built new single-purpose networks that can only be used for healthcare.

This brings us to the big debate of the day: how do we expand USF to cover broadband?

To start with, it's kind of embarrassing that we're just getting around to this today as a country. I mean, it's 2011. How can there be any question that we should be prioritizing broadband over telephone service? Especially since you can deliver telephone service through broadband!

Luckily, at least we're to the point where everyone agrees that this is obvious. What's not so obvious is how to go about actually making this transition.

Existing USF recipients say they won't be able to continue delivering critical telephone services to rural communities if they lose their subsidies. So most discussions involve a transitional period, where telephone subsidies will slowly be phased out.

Unfortunately this means even more time and dollars spent supporting 20th century networks when communities need 21st century infrastructure.

But to be honest, that's the least of my concerns. Instead, what makes the whole USF thing insane are two things.

One, the utter lack of self reflection and willingness to admit shortcomings.

The tenor of the USF debate is that while things could be better, that overall they're pretty good, and all we need to do is tweak a few things around the margins and turn the subsidy spigot from telephone to broadband.

Yet looking at the results, it's hard not to see USF as needing anything less than radical change. USF has spent the last decade and tens of billions of our dollars inefficiently subsidizing rural telephone service and inadequate community anchor broadband service, while countries like South Korea have spent the last decade investing in the 21st century infrastructure of fiber optic networks.

The second thing that really makes USF insane to me is the lack of attention put on how to change the economics of the broadband equation in America vs. continuing to subsidize the broken economics of our current situation.

As evidence of this, I point to the recently announced Broadband Affordability Act. It's an early legislative effort to start directly addressing how to evolve the USF to subsidize broadband services.

The reason I think it's insane as it's structured is that it continues down the road of simply subsidizing rural services. Our policymakers seem willing to use our tax dollars to subsidize the often bloated pricing of rural service providers.

What I want them to do instead is ask the question: how can we lower the cost of these services in the first place?

On the one hand the White House and Congress have shown an understanding of this as evidenced by the broadband stimulus program. A large focus of that was on building the middle mile networks that will allow last mile broadband providers to get access to cheaper bandwidth to the Internet, thereby allowing them to sell faster service at a better price to their customers.

Yet I can't help but wonder: why aren't we taking this approach with USF of making strategic investment with taxpayer dollars rather than continuing to subsidize a broken system?

Let's look at this another way. We've spent $80 billion of taxpayer dollars over the last decade plus. What do we have to show for it? A bunch of inadequate, overly expensive 20th century communications networks.

So what if we'd gone another route with that $80 billion? What if we'd invested it directly in building out infrastructure that could deliver dramatically better service at dramatically lower costs?

With that $80 billion, we could have wired every rural school, library, healthcare facility, and government building in the country with fiber.

We could have leveraged that fiber to blanket rural America with a wireless network.

And we could have used some of it as seed capital to help last mile deployers who are already connecting rural America to do so on even greater scales.

I'm not necessarily suggesting that that $80 billion is enough to address all of our rural fiber needs over the last decade. But it could've been a heckuva start that would've put us in the position where today we would be working on how to finish the build out of rural America, instead of being where we are trying to figure out how to get started.

The USF holds so much promise to be a vehicle for good for rural America. But we can't ignore the reality that to date it has not been realizing its full potential.

Those of us who believe in rural America and the promise of broadband and fiber need to make our voices heard. We must let our policymakers know that the status quo isn't good enough. That the evidence speaks for itself that USF has been underwhelming at best and a failure on many fronts.

Now as we begin to debate what to do with USF next, we need to shift attention to how do we build up our nation's 21st century communications infrastructure and away from how do we continue subsidizing the 20th century.

If we can't do that, then USF will continue its insanity, our tax dollars will continue to be squandered, and rural America will continue to suffer.

Posted by Geoff Daily on June 16, 2011 11:31 AM | Permalink | Comments (0) | TrackBacks (0)
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A couple of weeks ago I wrote about how encouraging video literacy is a form of digital economic development given the significance of producing video in the 21st century relative to manufacturing in the 20th century.

One of the ideas shared in that post is that of fiber as the printing press for video. Upon further reflection I've come to realize that that's an idea worth exploring on its own as it could allow us to reframe the debate around the need for fiber in ways more people can understand.

So to rehash some of this last post, I believe that while print then radio then television were the dominant mediums of the 20th century, that video-based communications will be the dominant medium of the 21st century.

Basically what I mean by this is that increasingly the way we convey information as a society will be through the many different flavors of video-based communication. So we're talking about way more than just on-demand YouTube videos. We're talking about live webcasting, two-way videoconferences, interactive videos, and more.

There are just so many ways in which video can be used as a medium, and we've only just begun to scratch the surface of its potential.

The primary reason why we're only just beginning to scratch this surface is that video hasn't had the equivalent of a printing press yet, at least not one capable of unleashing all of this opportunity.

Sure television is ubiquitous but it's a distinctly one-way communications medium with little in the way of dynamic capabilities to allow users to interact with video in new ways. And yes there's already a ton starting to happen with video on the Internet, but where that is limited is in the last mile, otherwise known as broadband.

Unfortunately the vast majority of America's current broadband infrastructure is incapable of fully enabling all that video as a medium makes possible. Low-end broadband can only deliver stuttering low quality playback that harms the value of the message trying to be conveyed. And most broadband doesn't have adequate upload capacity to unlock all the interesting ways in which users can send video rather than just receive it.

This brings us to fiber as the printing press that will enable our video-based economy.

To get us into this, here's how the impact of the printing press has been described in Wikipedia:

"The ready availability and affordability of the printed word to the general public boosted the democratization of knowledge and laid the material basis for the modern knowledge-based economy."

So the printing press made print the dominant medium of the latter half of the second millenium by enabling the written word to be distributed broadly in a cost effective manner. And by providing this capability, the printing press unleashed a multiple generations long wave of innovation in how our communities and economies operate.

This is precisely the opportunity fiber presents us with video. By having the symmetrical, reliable capacity of fiber, we can start distributing video-based communications technologies broadly in a cost effective manner, and we're already starting to see new innovations pop up around video even within the constraints of lower capacity traditional broadband.

While we talk about the value of fiber to our communities in a variety of different ways, often times the analogies fall short of capturing the full breadth of the potential impact fiber can have on society.

By framing one significant aspect of fiber's value proposition in terms relative to the printing press, I think we can start providing greater definition as to just how the potential of fiber will impact our economy.

So the next time someone asks you, why do we need fiber? You tell them that it's because fiber is the printing press that will enable our video-based economy.

Posted by Geoff Daily on May 31, 2011 10:18 AM | Permalink | Comments (0) | TrackBacks (0)
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