Charter tells New York regulators it’ll upgrade redlined residents if it’s allow to buy Time Warner


As in California, Charter Communications is asking New York state regulators for permission to buy Time Warner cable systems. New York Public Service Commission staff have identified markets where both companies operate, but have not fully built out digital systems, and are recommending, among other things, that Charter be required to upgrade all of its customers – old and new – if the deal is allowed to go through

New Charter should be required to develop a strategic implementation plan to build-out its all-digital network to the remaining unserved or under-served Charter and Time Warner franchise areas in New York. This type of substantive commitment would serve three key objectives: 1) expanding service to rural communities and other unserved areas; 2) expanding service to industrial parks and businesses; and, 3) expanding service to community anchor institutions (e.g., schools, libraries, community centers, municipal buildings, public facilities and hospitals).

The PSC’s authority to do so is based, according to the staff report, on both New York law and on the same section of federal telecoms law that’s central to California’s consideration of the deal. Not surprisingly, Charter disagrees

There is no basis for concluding that reading Section 706(a) [of the federal communications act] to empower 50 different State Commissions to assert regulatory authority over broadband service in connection with any transfer affecting broadband facilities would further the statute’s goals of encouraging removing barriers to infrastructure or encouraging deployment of advanced telecommunications capability. To the contrary, such a circumstance would be flatly inconsistent with the Federal scheme of broadband regulation reaffirmed by the FCC in the Open Internet Order…

The prospect of 50 different State Commissions regulating broadband service via transfer authority creates precisely the type of conflicting regulatory patchwork the FCC sought to avoid, and would clearly deviate from Federal policies aimed at establishing a comprehensive national framework for broadband service.

Nevertheless, Charter did promise in its reply to upgrade an analog-only cable system that it currently operates in New York so that residents “receive the same benefits of all-digital systems that New Charter intends to bring to all other Charter and TWC customers in the State”. That promise is exactly what people in California communities also redlined by Charter are seeking.

New CPUC rules spell out proper behavior for commissioners


No chewing gum, either.

Follow the law, do your job and be polite. That’s the boiled down substance of most of a six page code of conduct that was approved last week by the California Public Utilities Commission. It applies to the commissioners themselves and they voted unanimously in favor of it, after developing it in committee meetings over the past few months. The document repeatedly admonishes commissioners to be respectful, to be civil and professional, and to “refrain from belligerent comments, shouting, or actions that could be construed as threatening or intimidating”.

On the one hand, you’d think that sort of advice goes without saying, at least outside of a first grade classroom. On the other, the commission is trying sooth feelings in Sacramento and elsewhere after twelve years of the often arrogant attitude and combative demeanor of former president Michael Peevey. He’s facing the possibility of criminal charges, because of what appears to be a consistent pattern of back channel dealings with some of the utilities the commission regulates. According to emails that were made public, one incident involved asking PG&E for a $100,000 contribution to help pay for a 100th birthday party for the commission.

That kind of arm twisting is now forbidden…

Even as Commissioners are frequently active in community organizations and charitable activities, they should refrain from soliciting political, charitable, or other financial support, business, or other favors from Commission staff, employees of regulated entities, parties to Commission proceedings, or entities seeking to do business of any kind with the Commission, where such solicitations could be perceived as an attempt to influence behavior or are directly related to matters before the Commission.

The new code of conduct barely touches on the broader issue of when commissioners can have private conversations with people involved in disputes or regulatory issues that are on the CPUC’s agenda, also known as ex parte contacts. Those rules could become more restrictive soon, depending on what governor Brown does with a handful of bills currently sitting on his desk.

Don’t put all your fiber in one conduit, study says


A study by four researchers – Ramakrishnan Durairajan, Paul Barford, Joel Sommers and Walter Willinger – comes to the conclusion that the more conduit is shared by different fiber optic network operators, the greater the risk of disruption, essentially due to the fact that one careless backhoe operator can take out several key routes all at once. It’s a counter-argument, they say, to those (such as myself) who push for policies that encourage installing as much and as many fiber strands as possible any time a street is cut open

A striking characteristic of the constructed US long-haul fiber-optic network is a significant amount of observed infrastructure sharing. A qualitative assessment of the risk inherent in this observed sharing of the US long-haul fiber-optic infrastructure forms the second contribution of this paper. Such infrastructure sharing is the result of a common practice among many of the existing service providers to deploy their fiber in jointly-used and previously installed conduits and is dictated by simple economics—substantial cost savings as compared to deploying fiber in newly constructed conduits…

We show that both robustness and performance can be improved by deploying new fiber routes in just a few strategically-chosen areas along previously unused transportation corridors and [right of way (ROW)], and we quantify the achievable improvements in terms of reduced risk (i.e., less infrastructure sharing) and decreased propagation delay (i.e., faster Internet). As actionable items, these technical solutions often conflict with currently-discussed legislation that favors policies such as “dig once“, “joint trenching” or “shadow conduits" due to the substantial savings that result when fiber builds involve multiple prospective providers or are coordinated with other infrastructure projects (i.e., utilities) targeting the same ROW.

They’re right, in that you can have too much of a good thing. Their paper is very valuable, both for the mapping work they’ve done, and for the quantitative analysis techniques they bring to high level fiber network planning.

Federal broadband funding guide is mostly old news


A new booklet published by the National Telecommunications and Information Administration outlining ways to finance broadband projects contains no surprises. It’s a summary of federal programs that fund, or might fund, broadband infrastructure and it’s useful as a reference. But there’s no new money on the table, and many of the programs listed are either restricted in scope – Appalachia or tribal areas, for example – or are narrowly focused on specific users, such as libraries or public housing residents.

The list is also heavily weighted toward rural areas, which are served by federal programs that tend to ignore California. The best opportunities for urban infrastructure support comes from either the Economic Development Administration (EDA) or a few indirect money sources, such as the E-rate program for schools and libraries, which provide operating subsidies that might be spent with new service providers. As far as EDA is concerned, though, it’s good news that there’s a clear statement that broadband is moving up the priority list…

EDA’s mission is to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy. Given that broadband is an important ingredient in economic development strategies, EDA funding may be used to support broadband infrastructure projects under EDA’s Public Works and Economic Adjustment Assistance competitive grant programs, within certain parameters.

One troubling aspect is that the list of broadband-friendly federal programs in the booklet is shorter than the report published by the white house a couple of weeks ago. For example, it doesn’t list the agriculture department’s rural community facility program that was highlighted in that report and accounted for about a quarter of the $10 billion that the white house claimed was available for broadband infrastructure projects.

The booklet is a nice resource for beginners, but if you’re already actively involved in trying to develop broadband infrastructure, it’s not nearly as helpful as you probably want.

Wireless local loop is looking faster, says AT&T


Might work fine here.

AT&T is starting to position its wireless substitute for wireline broadband service as able to meet the Federal Communication Commission’s 25 Mbps download and 3 Mbps upload standard. According to a story in FierceWireless

AT&T said it is currently testing fixed wireless local loop (WLL) technology in select areas of the country with local residents who want to try the service, including in Alabama, Georgia, Kansas and Virginia, and is seeing speeds of around 15 to 25 Mbps.

Up until now, AT&T had only said that it expected speeds for it calls wireless local loop (WLL) service to top out in the 15 Mbps to 20 Mbps range. It uses mobile broadband infrastructure and technology, along with professionally installed equipment on customers’ homes, to deliver service via what it says will be 20 MHz of dedicated spectrum, evenly split between upload and download segments.

WLL service figured prominently in AT&T’s acceptance of $2.6 billion in FCC subsidies to serve rural areas. According to an SEC filing (thanks again to FierceWireless for the link), WLL capacity is limited and it’s suited for areas with 250 or fewer people per square mile. In California that pretty much rules out cities and larger towns in rural areas, but it could include smaller, unincorporated communities. Farm and ranch land population densities, though, usually fall far below that limit.

The SEC filing makes it clear that not everyone can expect 15 Mbps to 25 Mbps. At the edge of coverage, 10 Mbps is more likely, although not certain, depending on how heavily it’s being used at a given moment.

FCC muni preemption decision could limit California broadband oversight


CPUC’s broadband authority depends on federal law.

Tennessee and North Carolina are challenging the FCC’s ruling earlier this year that preempted state restrictions on municipal broadband. The central argument is whether congress gave the FCC sufficient authority to override what is usually reckoned to be the ironclad state responsibility of telling local governments what they can and can’t do. The FCC based its ruling on section 706 of the telecommunications act of 1996, which says…

The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans…by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

There are two ways to read that section. Telecoms companies argue that it’s intended to guide how the FCC and state regulators, including the California Public Utilities Commission, implement more specific sections of the law. In other words, it only offers advice and does not grant any additional authority.

In the muni preemption ruling and other decisions, the FCC has – recently, at least – taken the words of the law at face value and declared that it actually grants wide ranging power to do pretty much anything that removes “barriers to infrastructure investment”. That assumption was tested once at the federal appellate level, when Verizon successfully challenged the FCC’s first attempt at imposing net neutrality rules in 2010. Even though the FCC lost (on other grounds), the decision in that case generally supported the commission’s reasoning regarding section 706, but left open the question of the full extent of its authority. The FCC accepted the decision, so it never got to the U.S. supreme court.

The Tennessee case is another opportunity, at either the appeals or supreme court level, to define the limits of section 706. If the ultimate decision takes a narrow view, it will curtail the wide ranging regulatory review that the CPUC is taking of major broadband transactions, like those proposed by Comcast, Frontier and Charter. The CPUC needs section 706 to justify using broadband considerations as criteria for approval: without federal authority, state law bars it from getting involved with Internet services.

Charter CFO paints rosier than real merger schedule for investors


Sure, dude. How fast do you want it?

You gotta love optimists. Christopher Winfrey, the chief financial officer of Charter Communications, is telling investors that the proposed purchase of Time Warner Cable and Bright House Networks will be done and dusted by the end of the year. That jet propelled schedule is fuelled by the assumption that the Federal Communications Commission and the California Public Utilities Commission know everything they need to know already, because it’s the same bunch of companies that were involved in the failed Comcast mega-merger, minus Comcast.

According to a story in FierceCable

“Regulators have had the vast majority of the information from Time Warner Cable and Charter for the last year and a half,” Winfrey said at the Deutsche Bank Leveraged Finance Conference, remarking on disclosures that were part of the earlier review of Comcast’s failed attempt to acquire TWC.

“We learned what were some of the key drivers for why Comcast didn’t close,” Winfrey added. “And we were able to come out very quickly and address a bunch of issues that were in the public interest.”

The problem is, he’s wrong. The FCC’s nominal timeline calls for a decision by early March 2016, if there are no delays, which would be unusual. And there’s no guarantee, of course, that the answer will be yes.

Moreover, the FCC clearly doesn’t think it has enough information. It sent a 58-page, tightly typed request for information to Charter, along with 19 additional attachments, and asked for nearly as much from Time Warner and Charter.

The CPUC appears headed down the same path, with the potential for taking even longer to decide whether to approve the deal. At a hearing on Monday, Charter proposed a schedule that would lead to a decision by mid-December. The administrative law judge hearing the case did not seem enthused by the idea. The pack of lawyers representing the three companies eventually suggested a February 2016 deadline, but even that’s ambitious.

I’m assisting the City of Gonzales with its effort to upgrade broadband service via the CPUC’s review of the Charter-Time Warner-Bright House deal. I am not a disinterested commentator. Take it for what it’s worth.

No surprises as CPUC begins review of Charter-Time Warner-Bright House deal


Charter Communications is asking the California Public Utilities Commission for permission to buy cable systems belonging to Time Warner and Bright House Networks. Yesterday saw the opening round of wrangling over the transaction, with a CPUC administrative law judge hearing from lawyers representing the companies involved on the one side, and representatives from the CPUC’s office of ratepayer advocates, consumer lobbying groups and a couple of cities on the other (full disclosure: one of those representatives was me).

Charter claims that the merger will bring great benefits to everyone in its prospective new service area, particularly because of the wonderfulness of its broadband service. Except that not everyone in its service area – old or new – can get broadband access from Charter. The company has redlined tens of thousands of low income people in California, leaving them with just low quality, analog television service. That includes the City of Gonzales in the Salinas Valley, which asked for and received permission to become a party to the proceeding.

According to its formal motion…

The City of Gonzales intends to request the California Public Utilities Commission condition the pending action to insure the intent of DIVCA is met, correct the record regarding the extent of Charter’s broadband Internet access service footprint and condition the pending action on a binding requirement that Charter immediately upgrade all of its analog and otherwise substandard systems to be capable of providing broadband Internet access service at the same level of service it misleadingly claims to offer to “virtually all of its current customers in California.”

Charter’s attorney pushed the judge for quick approval, saying that there really isn’t much for the State of California to worry about since the major issues will be thrashed out at the Federal Communications Commission. Not surprisingly, there was fast and emphatic disagreement from people on the other side, who offered essentially the same arguments made in opposition to Comcast’s failed mega-merger earlier this year: the deal is potentially anticompetitive, it could have negative consequences for consumers and, critically, that state and federal law allow, if not require, the CPUC to consider a wide range of factors in its eventual decision, including the impact on broadband service in California.

No decision was made, nor was one expected. The judge did order Charter to pay for an evaluation of the deal’s effect on broadband competition in California. The next step will be to set a timeline for the process, which is expected to last well into next year.

I’m assisting the City of Gonzales with its effort to upgrade broadband service for all its residents. I am not a disinterested commentator, and I’m also guilty of quoting some of my own work above. Take it for what it’s worth.

Santa Cruz muni fiber threat forces Comcast upgrade


After years of blowing off customers, sandbagging local governments and stonewalling regulators, Comcast has finally upgraded its Santa Cruz County service area to what appears to be the same broadband speeds enjoyed to the north in Silicon Valley and to the south in Monterey County. All it took was a single word: competition.

Comcast hasn’t said so, but it’s no coincidence that the upgrade came barely six weeks after the Santa Cruz City Council voted to move ahead with building a city-wide fiber-to-the-home (and business) system in a public/private partnership with Cruzio, a local Internet service provider. It’s the second time that Comcast has responded this way to a direct competitive threat in Santa Cruz. The first was two years ago when Surfnet Communications applied for a state grant to build a fiber system in the Santa Cruz mountains, where Comcast had refused to go until then. Other cities, such as Provo, Utah, have similar stories.

Before the upgrade, the best that Comcast could reliably deliver in the Santa Cruz area was less than 25 Mbps download and somewhere between 1.5 Mbps and 3 Mbps upload speeds. That was in stark contrast to the service it offered elsewhere in California, which was in the 100+ Mbps download and 25 Mbps upload range, at least according to the reports it submitted to the California Public Utilities Commission. The map below shows a blotch of green across the northern two-thirds of Santa Cruz County (the south is Charter territory), denoting a maximum reported download speed below 25 Mbps, while surrounding counties are colored blue, which means 100+ Mbps speeds.

Contrary to what it told the CPUC, Comcast routinely advertised and sold Santa Cruz subscribers its faster 150 Mbps service. According to a story in the Santa Cruz Sentinel, when pushed to the wall, Comcast gave refunds and discounts to customers, but apparently only to those who went to the trouble of complaining to the district attorney, the CPUC or other regulatory agencies.

Good Times, another Santa Cruz County newspaper, reported similar customer experiences prior to the recent upgrade

For two years [Comcast] has been telling users they were getting 105 mbps, and charging $39 extra per month for the “Blast!” high-speed service, but an internal document released to Good Times shows the area was only capable of receiving 29 mbps—more of a fizzle than a “blast.”

“We’ve been complaining to the company in Philadelphia for years, asking them to stop promising something they weren’t delivering,” says a Comcast technician whose identity is being withheld to protect his job. “But they ignored us.”
The technician was so frustrated that he gave customers an internal document saying that speeds in the county were limited to 29 mbps, despite the company’s sales promises of the 105 mbps Blast! service.

That all changed after the City of Santa Cruz and Cruzio turned up the heat with plans for a new FTTH network, at least within the city limits. The competitive fires had already been lit earlier this year by Santa Cruz County, which, after urging from Aptos supervisor Zach Friend, floated plans for a publicly-owned fiber backbone that would serve some of the more densely populated unincorporated areas, and by assemblyman Mark Stone, who introduced a bill in Sacramento that would raise the bar for minimum broadband service in California to 25 Mbps down and 3 Mbps up. By doing that, he would have made Comcast’s service area in Santa Cruz County (as well as uncabled communities in rural areas of the state) eligible for broadband infrastructure subsidies from the California Advanced Services Fund.

Now, people living in Santa Cruz – city and county – can get Comcast’s Blast 150 Mbps plan for an introductory price of $40 per month, $10 less than it costs in Monterey County. The price goes up to somewhere between $75 and $79 after a year, and the fine print includes the standard weasel warning “actual speeds vary and are not guaranteed”.

The City of Santa Cruz has high hopes for its fiber project, believing that it will make Santa Cruz a better place to live and work. But even before a single strand has been hung, the initiative – along with parallel efforts at the county and state level – has already succeeded in improving broadband service for locals residents and businesses.

Tellus Venture Associates is assisting the City of Santa Cruz with its FTTH project and helped Surfnet with its CASF grant application. I also provided support for Mark Stone as he sponsored assembly bill 238. I’m not a disinterested observer. Take it for what it’s worth.

There’s more network traffic at 4K levels, but can growth be sustained?


Home field advantage.

The prospects for widespread adoption of 4K television technology and programming – often referred to as ultra high definition – are slowly getting better in the U.S. According to Akamai, which just released its State of the Internet report for the second quarter of 2015, about a fifth – 21% – of U.S.-based users on its network are running at 15 Mbps or better, which ranks 18th best in the world. That’s the minimum service level needed to stream 4K programming.

California does better than that with 26% of Internet connections on the Akamai content delivery network measuring 15 Mbps or faster, which would put us at 14th internationally, with about the same adoption rate as Finland and the Czech Republic. As with Internet speeds, South Korea, Hong Kong and Japan rank first, second and third respectively.

South Korea is particularly strong when it comes to 4K capable homes, more than half – 53% – clear the 15 Mbps benchmark. That gives South Korean manufacturers in general and Samsung in particular a big competitive advantage. The ability to field test new products in the home market, where high speed broadband adoption is robust enough to support significant content production as well, will boost development of the technology.

The U.S. and Californian figures are encouraging, but might also be misleading as well. The more people that buy service packages at or above the 15 Mbps level, and the more they start streaming high bandwidth 4K programming, the more clogged local and long haul infrastructure will become. It’s one thing for a relatively small fraction of users to occasionally hit high speeds. If that becomes the norm for streaming traffic, though, core infrastructure, from the neighborhood level on up through connections at Tier 1 Internet exchanges will have to be upgraded to handle the volume and avoid complete logjams.