Caltrans agrees to add conduit to highway projects

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Slow is a lot better than Stop.

More broadband conduit might be going into California highway projects over the next few years. A deal was struck between a north coast assemblyman – Jim Wood (D – Healdsburg) – and Caltrans: Wood drops his current effort to write conduit obligations into law, and Caltrans promises to rewrite its policies to be more accomodating to broadband infrastructure. According to a press release from Wood’s office…

“Caltrans has been a willing participant in discussions during the past two years as we have tried to move the needle on expanding Californian’s access to broadband,” said Wood. “Adopting a ‘dig once’ policy for these priority areas is an important advancement and we could not have done it without recognition by Caltrans that they play a meaningful role in facilitating expanded access to broadband.”

“In addition to improving mobility, we realize many benefits to communities and businesses can be realized through collaboration,” said Caltrans Director Malcolm Dougherty. “While performing our primary duty of maintaining California’s transportation infrastructure, it makes sense to achieve economies of scale where we can in order to maximize the benefits to Californians.”

By Caltrans installing conduit during planned road work, the cost of installing cable at a future date can be mitigated – often reducing costs to pennies on the dollar because trenches would only be opened once, rather than multiple times…

Last year, progress was made when AB 1549 established the “Broadband Task Force,” a process by which Caltrans brings together stakeholders to identify opportunities where companies can collaborate to install broadband conduit as part of future Caltrans projects. The first and very productive meeting was held with more than a dozen stakeholders earlier this month and regularly scheduled meetings will continue.

I participated in that meeting with Caltrans a couple of weeks ago. There was a genuine desire to cooperate with broadband infrastructure development efforts. But it’s a big organisation that moves slowly and doesn’t always implement policy on a statewide basis – Caltrans’ regional districts have a lot of autonomy.

This agreement is progress. If it means that Caltrans is moving – in its slow but inexorable way – toward being a broadband development player, it’s a win for everyone.

No secrets in California’s self driving car race

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Autonomous cars will be networked cars, manufacturers will maintain constant contact, and make themselves and onboard data available to the cops. That’s one of the takeaways from a draft set of new rules for testing them on California’s public streets that was published by the department of motor vehicles. If – when – manufacturers get to the point that self-driving vehicles can be tested on the open road without someone on standby in the driver’s seat, or even without a steering wheel or other old school controls, then they’ll have to make sure that…

There is a communication link between the vehicle and the remote operator to provide information on the vehicle’s location and status and allow two-way communication between the remote operator and any passengers if the vehicle experiences any failures that would endanger the safety of the vehicle’s passengers or other road users, or otherwise prevent the vehicle from functioning as intended, while operating without a driver. The certification shall include:
(A) That the manufacturer will continuously monitor the status of the vehicle and the two-way communication link while the vehicle is being operated without a driver;
(B) A description of how the manufacturer will monitor the communication link; and,
(C) An explanation of how all of the vehicles tested by the manufacturer will be monitored.

The two-way communication requirement would remain even when autonomous vehicles go into actual service. Police would also have to be able to get in touch with whoever is monitoring the vehicles remotely, and have access to a required on-board data recorder.

That requirement isn’t as Big Brother-ish as it might be – the black box would only has to hang onto data for 30 seconds before and 5 seconds after a crash. Of course, you don’t know in advance when the crash was coming, but even so there wouldn’t be a need to keep more than minute’s worth of data at any one time. But there’s nothing preventing car makers from keeping all the data collected or particularly limiting government access to it.

The DMV is taking comments on the draft rules, and will hold a workshop in Sacramento next week..

FCC steps back from broadband regulation, steps on local government

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The weed whacker was whirling at full tilt yesterday as the Federal Communications Commission decided to take on local limits on cell sites and utility poles, and roll back regulation of wholesale broadband services. The voting was largely bipartisan. Democrat Mignon Clyburn concurred with republicans Ajit Pai and Michael O’Rielly on opening two major enquiries, one on whether wireless permit shot clocks should be given deemed granted teeth when they expire and the other on a range of wireline issues, including limits on how long local governments can take to review construction permits and how much they can charge. Pole attachment procedures and rules regarding replacing legacy analog voice service with Internet protocol technology are also open for comment.

Clyburn dissented, though, on backing away from common carrier-style regulation of middle mile and other wholesale broadband service. She particularly objected to the word games the decision plays with its definition of effective competition…

In the rush to deregulate, the leadership, providing as much notice as a run-away train, opts to adopt a framework that relies on faulty data and lackadaisical market analysis to come up with an ineffectual competitive market test, calibrated to deregulate as broadly as possible. The order upends decades of competition analysis, by defining a particular market as competitive when there is only one provider in a market and the mere possibility of a second entrant. Unfortunately, this is not a “typo.” The mere presence of a second nearby potential business data service provider that is located a half a mile away is deemed a competitor whether they plan to serve an area or not.

The wholesale service decision was in fact a decision – that’s done and dusted. The wireless and wireline infrastructure items, on the other hand, were just opening shots. Draft versions were published, and there’s no indication of major changes. Once the final texts are published, there will be ample opportunity to comment. Whether anyone will hear you over the whine of the weed whacker is another question altogether.

Verizon buys enough fiber to reach Mars, sorta

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Make it quick.

Verizon is pumping up the volume about its three year deal with Corning to spend $1.05 billion on “fiber optic cable and associated hardware”. It even got a congratulatory (and self-congratulatory) press release from Federal Communications Commission chairman Ajit Pai. As it should It’s a big commitment and will add a considerable amount of potential bandwidth to the U.S. supply.

Verizon also claims that it will be buying “up to” 20 million kilometers (12.4 million miles, it helpfully adds) of “optical fiber” each year, from 2018 through 2020. That’s enough optical fiber to wrap around the Earth almost 1,500 times. It could circle the Sun almost 100 times. It’s even enough optical fiber to build a middle mile line from Earth to Mars. Until it snaps off a few minutes after closest approach, anyway.

It is truly a big deal, but not as big a deal as a quick glance might lead you to believe. Verizon is careful to distinguish between “optical fiber”, which is a strand of glass, and “fiber optic cable”, which is a bundle of optical fibers. Cables come in many sizes, but 432-strands are typical for mobile carriers these days. Cables with 864 strands are not unheard of, and 288 is probably as small as you’re likely to see from them (granted, there are unlikely builds out there). But let’s say 432 strands.

That implies a build of 29,000 miles a year, or 87,000 miles total. At a total cost of $1.05 billion and allowing a bit for “associated hardware”, that comes to somewhere in the neighborhood of $2 a foot, which is in the volume discount ballpark for 432-strand cable. I’m sure it’s more complicated than that, but in round numbers it looks like Verizon is planning to build something like 80,000 to 100,000 miles of fiber plant over the next three years.

That’s a lot of backhaul, and a lot of cell sites.

Cable companies will double broadband prices because they can

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Source: New Street Research, via *FierceCable*

In a competitive market, pricing is dynamic – you can’t reliably plan more than one or two moves ahead. But in a de facto monopoly – either a single seller or a duopoly with a weak second banana – you can lay out a long term roadmap and follow it relentlessly.

That’s what one noted financial analyst thinks the two big U.S. cable companies are doing. According to a story in FierceCable, Jonathan Chaplin, an analyst at New Street Research, thinks cable broadband prices will double in the coming years…

“Comcast and Charter have given up on usage-based pricing for now; however, we expect them to continue annual price increases,” Chaplin said. “As the primary source of value to households shifts increasingly from pay-TV to broadband, we would expect the Cable companies to reflect more of the annual rate increases they push through on their bundles to be reflected in broadband than in the past. Interestingly, Comcast is now pricing standalone broadband at $85 for their flagship product, which is a $20 premium to the rack rate bundled price.”

Chaplin estimates that cable companies have 65% of U.S. broadband customers now, and that share will grow to 72% over the next three years.

That kind of market dominance is something that cable companies want to keep out of the public eye. It’s why they push back hard against raising broadband standards: if, say, California adopted the Federal Communication Commission’s 25 Mbps download/3 Mbps upload speed standard as the minimum necessary to participate fully in the digital economy, then cable companies would have an effective, and easily documented, monopoly on broadband service. That would invite regulation, which is something that cable companies aggressively – and rationally – lobby to avoid.

But government-set standards are a poor substitute for market realities. If cable operators have gained a controlling market share by being the only option for the service levels that consumers demand, then it’s game over. They will have – do have, as Chaplin implies – the power to set rent-extracting prices without regard for troublesome competitors.

Broadband service subsidies not popular in rural areas

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“Local governments should be able to build their own high-speed networks if the service in their area is too expensive or not good enough”, say 70% of people in the U.S.. According to a survey done by Pew Research, the concept of municipal broadband gets overwhelming bipartisan support: 74% of people identifying themselves as democrats and 67% as republicans agreed with that statement.

Care should be taken not to read too much into this ringing endorsement, though. People’s opinions changed radically when asked about spending government money on broadband service and whether it, in fact, costs too much or runs too slowly…

Fewer than half of Americans (44%) think the government should provide subsidies to help lower-income Americans pay for high-speed internet at home. A larger share (54%) says high-speed home internet service is affordable enough that nearly every household should be able to buy service on its own…

Americans have different levels of support for broadband subsidies based on political affiliation. Six-in-ten Democrats and independents who lean Democratic say the government should help lower-income Americans purchase high-speed internet service, but that figure falls to just 24% among Republicans and Republican-leaning independents. These partisan differences stand in stark contrast to attitudes toward municipal broadband networks.

The divide is almost as stark between rural and urban residents. Half of people in urban areas think subsidising broadband service is okay and more than half think it’s not affordable for everyone. On the other hand, in rural areas, where broadband service tends to be slower and dearer than in cities, only 36% thought it should be subsidised and 63% think it’s fast and affordable enough for everyone.

Philosophically, Americans are comfortable with the idea of adding broadband to the list of services a city might or might not providing. In that respect, they seem to put it into the same bucket as water or electricity, which are delivered by both municipalities and private companies, depending on local circumstances and history. But the Pew study also indicates that it’s likely to be an uphill battle to convince them that their tax money should be spent on cheaper or faster Internet service. Particularly in communities most likely to lack it.

Subsidise what we’re already doing, telecoms companies tell CPUC

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Give me the money!

Big telecoms companies don’t want California broadband infrastructure subsidies to go to potential competitors, and they don’t want to be pushed into spending any more capital on upgrades than they’ve already budgeted. AT&T, Frontier Communications and the cable industry’s California lobbying front took a defensive posture in comments regarding broadband development priorities drafted by the California Public Utilities Commission. It was in response to a staff white paper that took a first shot at a quantitative analysis of how to get the greatest benefit out of the roughly $60 million still available for infrastructure grants in the California Advanced Services Fund.

AT&T wants the CPUC to put middle mile projects at the bottom of the list and to turn a blind eye to last mile technology. The former is not surprising, since last mile competition flows from middle mile projects, and competition is the last thing that AT&T wants in rural and inner city markets where it has monopoly control. With that kind of dominance in rural and inner city areas, AT&T plans to rip out copper networks and replace them with wireless systems, which is why it wants the CPUC to look kindly upon that kind of technology. If it loses its monopoly grip, though, competition would severely dent, if not kill, its wireless local loop business model.

Both Frontier and the cable industry’s Sacramento lobbyists also want the CPUC to back away from funding potentially competitive projects, although they express it in terms of avoiding areas where promises have been made to eventually upgrade service or where federal programs will subsidise broadband infrastructure. Substandard broadband service, it should be noted. The 10 Mbps download/1 Mbps upload speeds allowed under the Federal Communication Commission’s program are below the CPUC’s current minimum, and far less than the FCC’s own 25 Mbps down/3 Mbps up standard for advanced service. Which is what the, um, California Advanced Services Fund is supposed to be about.

Rural telephone companies, aka small LECs (local exchange carriers), take a warmer approach to the CASF program overall, and had generally good things to say about the criteria and methodology used in the white paper. Echoing others’ comments, including the response I wrote on behalf of the Central Coast Broadband Consortium, the small LECs asked the CPUC to apply any new criteria to future projects, and not toss out the current batch of proposals, most of which have been languishing for more than a year. They urged a more qualitative approach – not surprising since the quantitative, bang-for-the-buck analysis in the draft largely leaves out their sparsely populated service territories.

T-Mobile leads 600 MHz auction, DISH slips easily in behind

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T-Mobile is the big winner, or at least the big spender, in the Federal Communication Commission’s $20 billion incentive auction, walking away with more than half the 600 MHz band licenses up for grabs – 1,525 licenses, 55% of the total. Second place went to DISH, which paid $6.2 billion for 486 licenses, 18% of the total.

Who came in third depends on how you’re figuring it. Comcast bid the third most money – $1.7 billion – but ended up with only 73 licenses, a mere 3%. U.S. Cellular – the distant number five mobile carrier in the U.S. – was number three in the license race, paying $329 million for 188 licenses (7% of the total, but not prime real estate).

AT&T plunked down nearly a gigabuck – $910 million – for 23 licenses, a 1% share. Verizon, on the other hand, was shut out, winning zero licenses but, on the other hand, paying zero dollars.

Sprint didn’t participate, or at least not under its own flag. There will certainly be further wheeling and dealing. Many of the winning bidders appear to be have transaction motives rather than action plans.

DISH is top of that list. Chairman Charlie Ergen made the leap from millionaire to billionaire after placing a low cost, high return bet on direct broadband satellite slots back in the 80s, and has been playing the spectrum sweepstakes ever since. He’ll light up frequencies himself when there’s an open field – as there was with DBS once it got going in 90s – but otherwise manages his licenses as an investment portfolio.

Don’t expect anything revolutionary from anyone in the near term. It’ll take a few years to move TV stations off of the frequencies they’re giving up in exchange for $10 billion. And which they, or at least the original license holders, paid exactly zilch to acquire.

Apple goes public with self-driving car plans. Sorta

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Apple has finally admitted that it has a self-driving car project in the works, but isn’t saying much else. It now has a permit from the California department of motor vehicles to test autonomous vehicles, which was issued, or at least posted, yesterday. According to the Wall Street Journal, its fleet consists of three Lexus SUVs which will be driven by six registered test drivers.

According to a story by Oscar Raymundo in Macworld, Apple’s business model might have shifted from making self-driving cars to developing software that’ll be offered to other manufacturers…

In 2016, however, Apple seemed to have pivoted the initiative, opting for creating just the self-driving software to license to established car-makers instead of assembling an entirely new Apple vehicle. This is a departure for Apple, which has created a legacy by developing both hardware and the software aspects of all its products.

He’s right, that would be a major strategic departure for Apple, which is why it would be a good idea not to bet the ranch that you won’t see an iCar, or whatever they’re going to call it, sometime in the future. Elon Musk expects Apple to get into the manufacturing game, and he has as much insight into what they’re doing as any outsider – in other words, no hard data but enough knowledge about the business to make an educated guess.

DMV registration carries with it an obligation to file public reports about any accidents, and to submit information once a year about whenever there a “disengagement of the autonomous mode caused by the failure of the technology or when the safe operation of the vehicle requires the test driver to take immediate manual control of the vehicle”. So we won’t have to wait too many months for a window into Apple’s development process.

In the meantime, if you’re cruising Cupertino, look for a tricked out Lexus.

California broadband subsidies should build, not follow, business case

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More than twenty companies and organisations offered their critiques of the first draft of a bang for the buck analysis of where the California Public Utilities Commission might focus its dwindling broadband infrastructure subsidy money. Many of the comments can be summed up as give me the money, with incumbent telcos and cable companies laying down defensive fire aimed at heading off potential competition – more about that on Monday.

Three of the commenters – the Karuk Tribe, and the CPUC’s office of ratepayer advocates and the consumer group TURN in a joint submission – made a fair point about the overall approach: by prioritising communities with bigger, denser populations, the analysis paralleled the sort of market evaluation done by Internet service providers when they decide whether or not to serve a particular area. As the ORA/TURN comments put it…

Taking a “think like an ISP” approach may duplicate efforts by ISPs that are already pursuing areas with their own capital expenditures. For example, at the [workshop held by the CPUC to discuss the draft], AT&T commented that it already deploys in areas where it sees population growth. Taking this approach may neglect areas which ISPs would not target and therefore are areas most in need of the CASF program’s funds.

A major reason CPUC analysts took that approach was to try to reach as many Californians as possible, partly because more people will benefit, but also because the California Advanced Services Fund – the source of the money – has a legislative mandate to bring sufficient broadband service to 98% of the state. You need to reach lots of people to do that.

Another reason to “think like an ISP” is to increase the likelihood that private sector companies will bear the financial and opportunity costs of applying for CASF money and, ultimately, build successful systems. The economic realities of building both broadband infrastructure and a sustainable business have to be considered.

But there’s more to the calculus than economic viability. As TURN, ORA and the Karuk Tribe correctly point out, broadband infrastructure subsidies should also be spent in a way that make bad business cases into good ones. That doesn’t mean ignoring more densely populated areas, but rather recognising that those are the cherries – if you want them, take the whole tree.

Download the comments…

AT&T
Bolinas Fire
Bolinas Utilities
Caltel
CCBC
CCTA
CETF
Charter
Frontier
Greenfield Communications – sorry, secret
Humboldt County
Karuk Tribe
Las Cumbres
Marin County
Mendocino County
Office of Ratepayer Advocates/Toward Utility Rate Normalization
Race
Sierra Business Council
Small LECs
Surfnet