Salt Lake City may be debut of Google Fiber 2.0

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Critical mass.

Google has launched what might be its last fiber project. Or maybe it’s the first deployment of Google Fiber 2.0. Residents and small businesses in the densely populated central area of Salt Lake City can now sign up for service, if they are in reach of the fiber plant that’s been installed.

As it typical, Google is hazy on the details of exactly where service is available, or what future expansion plans might be. However, one clue is the emphasis that Google is placing on apartments, condos and office buildings. According to a story in the Salt Lake City Tribune, apartment complexes had a head start on construction

In terms of residential customers, [Scott Tenny, head of Google Fiber business operations in Utah] said, single-family homes will require a visit from an on-site installer, while many apartment dwellers will be able to switch on service more simply.

Google Fiber has taken advantage of a steep increase in apartment building in recent months, Tenney said, and wired a large number of new residential complexes during construction for easier access once tenants move in.

At this point, Google’ Salt Lake City deployment has more in common with its limited plans for San Francisco, where it is specifically targeting multiple dwelling units within reach of existing fiber that it can lease from other carriers, than it does with full city builds in, for example, Kansas City or Austin. Or the full city builds in Silicon Valley and Portland that were put in a deep freeze while Google evaluates fixed wireless service via magic radios.

A mix of fiber to the premise builds in areas that are sufficiently densely packed to make a business case and wireless as far as it will go elsewhere is a rational strategy for maintaining hopes of an acceptable return on investment somewhere down the road. It’s a strategy that AT&T embraced a few years ago, when it decided to focus wireline investment on high potential areas, and then followed it up with an aggressive and ongoing push to move less profitable wireline subs to wireless-based service.

It’s a sharp departure from the vision of a fully fibered future that Google dangles in front of communities it’s courting. The gigabuck realities of fiber builds seem to have changed that vision.

Telecoms lobby pushes California lawmakers to muzzle local government

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Watchdog?

City councils and county boards of supervisors in California have an annoying habit of listening to residents and questioning the broadband marketing hype spun in out-of-state corporate headquarters and spread in Sacramento, where perks and campaign cash buy an attentive audience. Keeping local government out of any meaningful oversight role is a high priority for cable and telco lobbyists, and their successful efforts are evident as the final texts of key legislation begin to take shape.

Senate bill 512 by senator Jerry Hill (D – San Bruno) began as a response to the natural gas explosion that devastated his constituency, and the ensuing backchannel finagling between PG&E and CPUC commissioners. It’s still part of a package of California Public Utilities Commission reforms pending at the capitol, but provisions that would have given local governments more clout, and the money to wield it, were severely pruned back in the face of fierce – sometimes bitter – opposition, particularly from AT&T and the cable industry’s lobbying front.

Those lobbyists can also take comfort in the elimination of new rules for CPUC proceedings, that would have allowed local governments to enter “reports and analyses” into evidence. And a top level review of the CPUC’s role in regulating the telecoms industry no longer specifically includes an assessment of local agencies “that provide consumer protection and ensure the safety of telecommunication services”.

Local governments have virtually no regulatory authority over telecoms. The last meaningful remnant – cable franchises – was eliminated ten years ago. What’s left is a truth telling role. Incumbents defend their service monopolies by maintaining a information monopoly and using it to drive a narrative that suits their interests. Cities and counties are often the only source of credible facts and independent broadband advocacy. The California legislature should expand that role, not work to fence it in.

Caltrans buries dig once conduit bill

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Too much work.

Under a veto threat from governor Brown, a bill that would have required Caltrans to cooperate with, and even participate in, broadband infrastructure development has been trimmed back to the point where it’s largely symbolic. Not completely: as currently drafted, assembly bill 1549 would still require Caltrans to allow all interested parties – independent Internet service providers and local governments included – to add conduit to state highway construction projects…

For the purpose of supporting fiber optic communication cables, after receiving notification from the department, a company or organization working on broadband deployment may collaborate with the department to install a broadband conduit as part of the project.

“Organization” specifically includes “local governments and nonprofit organizations” as well as telephone and cable companies. Independent ISPs aren’t particularly called out, but it would be hard to argue that they too aren’t companies “working on broadband deployment”. Not impossible, though. Conduit access rules in California largely turn on whether or not an ISP has been certified by the California Public Utilities Commission as a telephone company. It’s a bureaucratic distinction that Caltrans might be inclined to embrace.

The draft language also requires Caltrans to publish project information on its website and consult “with stakeholders” to “develop guidelines to facilitate the installation of broadband conduit on state highway rights-of-way”. It sounds nice, but Caltrans claims it’s already doing that. At least to its own satisfaction, which is an unworkably low standard.

But it’s sufficient for governor Brown, who gave the bill’s author, assemblyman Jim Wood (D – Healdsburg), a take it or leave it choice. In its previously tougher form, AB 1549 enjoyed unanimous, bipartisan support from both houses of the legislature and it is still bouncing between the assembly and senate floor. But further changes are not in the cards. What we see is very likely the best we’ll get for the next couple of years.

I’ve advocated for and helped to draft AB 1549. I’m involved and proud of it. Take it for what it’s worth.

CPUC votes to let telcos fine themselves, keep the money

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Miss me yet?

In the most cynical decision I’ve ever seen the California Public Utilities Commission make, telephone companies will be allowed to pay fines to themselves, if they fail to meet service quality standards.

Fines, it seems, are just another cost of doing business for telecoms companies and don’t matter anyway. So why not let them keep the money?

Boiled down, that’s CPUC president Michael Picker’s rationale for establishing new telephone voice service level requirements backed up by a swingeing schedule of penalties and then saying but we’ll let you keep the money if you invest it in infrastructure or pay staff. Or something. Anything.

No kidding. That’s what last week’s decision says

Carriers may propose, in their annual fine filing, to invest no less than twice the amount of their annual fine in a project (s) which improves service quality in a measurable way within 2 years.

Commissioner Mike Florio was quick to – correctly – point out that the policy is unenforceable. Even hefty fines are trivial compared to, say, AT&T’s annual capital and operating budgets in California. Concocting an “incremental expenditure” two years down the road, based on last year’s budget, is a trivial accounting exercise. AT&T will leave it to the summer interns to figure out.

A rational alternative was offered by commissioner Catherine Sandoval. She proposed a system of simple fines and a more granular reporting system, to make sure big outages in small rural communities, like Selma in Fresno County, don’t disappear under an avalanche of average results from Los Angeles or San Francisco.

Picker didn’t even bother to bring Sandoval’s alternative up for a vote. He knew he had yeses from commissioners Carla Peterman and Liane Randolph in his pocket, so he put his version on the table and called the roll: Picker, Randolph and Peterman, yes; Sandoval and Florio, no.

With that three to two vote, the matter was closed and AT&T, Frontier and the scattering of rural telephone companies in California will be left to slap their own wrists when service doesn’t measure up to the standards that remain.

I was never a summer intern for AT&T. I was a summer intern for Bell Labs, which was only half owned by AT&T. The other half was owned by Western Electric. Which was owned by AT&T. Which also owned Southwestern Bell. Which AT&T had to divest so Southwestern Bell could buy AT&T. Which proves I was never a summer intern for AT&T.

Cable, telco lobby hack more meat out of California telcoms reform

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Lobbyists from telephone companies largely prevailed in their fight to block meaningful release of information about what they do at the California Public Utilities Commission. And the cable lobby has, for the moment, maintained an Internet access chokehold on people who live in public housing.

Senate bill 1017 was pushed by San Bruno senator Jerry Hill, after a PG&E gas pipeline exploded with fatal results for his constituency. As originally conceived, it would have reformed archaic laws that allow utilities – including telephone companies – to stamp pretty much anything confidential and keep it hidden from local governments as well as the public. The bill was rolled into the CPUC reform package negotiated with governor Brown and tweaked a bit, but those changes did not mollify utility lobbyists, particularly and vociferously those from AT&T.

A new version of SB 1017 was published this weekend – the legislature’s session has nine days of life left in it and closed door dealmaking is in overdrive. Hill’s original language has been slashed out of it and, as currently written, it reiterates CPUC secrecy while tossing in a meager bone that allows a city or a private citizen to challenge a decision to withhold information – but only under very limited circumstances.

Senate bill 745, by senator Ben Hueso (D – San Diego), extends a program that pays for broadband equipment – but not service – in public housing. Cable companies think that offering low cost or free Internet access to the 75% or so of public housing residents that can’t afford their services will dent the broadband and TV revenue they squeeze out of the other 25%. The latest version of SB 745, also released over the weekend, bans subsidies for Internet facilities if cable companies or other ISPs have wired a building.

On Friday, there might have been hopes of something like a even battle between community broadband advocates and deep pocketed industry monopolists – there were wins and losses on both side. This morning, after the whirlwind of weekend disclosures, it’s looking sadly lopsided in favor of the side with the most cash.

When does a duopoly collapse into a monopoly?

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Event horizon.

Comcast and Charter Communications own nearly half of the U.S. broadband market. That’s the result I get from crunching the second quarter 2016 high speed subscriber counts compiled by Leichtman Research Group. Comcast has a quarter of the market – 25% – and Charter has almost as much – 23%. After accounting for rounding, the combination of the two totals out at 47% of U.S. Internet service subscriptions.

AT&T is the only other Internet service provider with double digit market share, but still lags far behind at 16%. Verizon, CenturyLink and Frontier get 7%, 6% and 5% respectively. Cox at 5% and Altice with 4% are only other two in the same, small ballpark. The rest – Mediacom, Windstream, WOW, Cable One, FairPoint and Cincinnati Bell – are at 1% or less.

But that only tells half the story of cable’s market dominance. Charter, Comcast and other major cable companies do not compete against each other: they deliberately avoid going head to head in any given market. So when you compare the shares of the seven biggest cable companies with the seven biggest telephone companies – which is the only significant battle line of competition in the U.S – cable overwhelms telcos by a 59% to 36% margin, with the remaining 5% falling into the “other” bucket.

That gap is getting wider. Leichtman’s figures from last quarter show big cable getting bigger by half a million subs, mostly at the expense of telephone companies, which lost about 300,000. It’s bad enough that the U.S. broadband market is in the grip of a duopoly. The prospect of it being choked down into an effective monopoly looks increasingly inevitable.

Cable broadband business grows while telco subs fade

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Cat videos included.

Overall growth in broadband subscriptions is slowing but is still in positive numbers in the U.S. That’s the conclusion of a tabulation by Leichtman Research Group. Looking at the fourteen largest cable and telco broadband providers, which account for “about 95% of the market”, the aggregate count grew by only 190,000 high speed subscribers in the second quarter of this year. According to Leichtman, that’s the lowest quarterly figure since they starting keeping track of Internet service providers fifteen years ago.

It’s not a fluke. The past seven quarters are the quarters with the lowest net subscriptions adds over those years.

A deeper dive into the numbers, though, shows that the bad news is mostly coming from telephone companies. Cable companies are still posting respectable growth figures. The seven on Leichtman’s list – Comcast, Charter, Altice, Mediacom, WOW, Cable One and Cox – added 523,000 high speed subs, which was “the most in any second quarter since 2008”.

That’s not bad for a quarter that’s known for heavier than average churn figures, although it’s about half of the one million net new subs cable gained in the first quarter of 2016. Over the last year, cable broadband subscriptions have grown by 3.5 million units.

Detailed review of Californian telecoms policy slashed from bill

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I’ll show you gut and amend.

An examination of telecommunications responsibilities at the California Public Utilities Commission has gone from being a specific study of agency duties, technological issues and, critically, broadband’s place in the regulatory mix, to being the sort of high level gloss that will gather dust on a shelf. The threat of a useful result no longer looms over cable and telephone incumbents.

As it was proposed last week, assembly bill 2903 had a long check list of broadband and other telecoms issues that the California research bureau was supposed to investigate by the end of next year, including…

  • What gaps, if any, exist in the state’s regulatory authority that are not otherwise addressed by federal law or regulation over telecommunications services, including, but not limited to, consumer protection and safety.
  • The state and local agencies in addition to the Public Utilities Commission that provide consumer protection and ensure the safety of telecommunication services.
  • The extent to which it is necessary for utility pole safety regulation to be governed by one regulatory structure regardless of the type of utility attachment.
  • How to ensure the effective administration of the Digital Infrastructure and Video Competition Act of 2006 [DIVCA].
  • The extent to which competitive telecommunications services are available in California and to what extent there are regions within California that lack competitive alternatives.
  • The role of the Public Utilities Commission in regulating the wholesale telecommunications market.

A bill that began as a classic gut and amend maneuver has instead been gutted itself.

The deletions are sure to please the incumbents. There will be no specific examination of the self-serving fiction woven by cable lobbyists that broadband, voice and video services delivered by cable companies are so radically different from the broadband, voice and video services offered by telcos that they need a completely separate – and toothless – regulatory regime of their own. That’s why the bits about unified utility pole regulations and DIVCA were taken out.

Eliminating requirements to look at competition in California’s telecoms industry is another gift to the telco and cable lobbies. They’re well on their way towards converting government granted monopolies on analog services into comprehensive control of the digital realm, and an independent investigation would be oh so inconvenient.

AB 2903’s author, assemblyman Mike Gatto (D – Los Angeles), has built an impressive record this term as an advocate for monopoly telecoms interests. These latest amendments will maintain that legacy as the legislative term – and Gatto’s career as a lawmaker – enters its final days.

This week’s version of assembly bill 2309
Last week’s version of assembly bill 2309

California broadband projects up for review at CPUC

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UPDATE: The CPUC approved the Occidental project and the consortia and public housing grants, and rescinded subsidies for the five dormant CASF projects in a unanimous, consent agenda vote this morning.

Occidental, a small community in rural Sonoma County, will get gigabit broadband service for $100 a month, if the California Public Utilities Commission approves a $7.7 million construction grant at its meeting later the morning. The fiber-to-the-home project was proposed earlier this year by Race Telecommunications and originally specced at serving 757 homes. That number was reduced to 458 after agricultural land and vacant lots were factored out. That didn’t change the total price tag, so the per household subsidy from the California Advanced Services Fund would be $16,800.

But what the CPUC giveth, it can taketh away. Five previously approved projects are about to have $4.5 million in funding rescinded. More details on those are here. Only one of the recipients objected. In a the dog ate the homework sort of letter, WillitsOnline asked to keep its $149,000 grant for a DSL upgrade in the Mendocino County town of Westport, but hinted it would need more money to get it done. The resolution in front of commissioners today would reject that request but encourage WillitsOnline to reapply for what was looking like a significantly different project.

Three regional consortia are up for grants totalling $737,000 that would allow them to carry on their broadband development work, for two years in Tahoe, three years in the East Bay and five years on the Central Coast.

A dozen public housing communities in San Francisco and the Sacramento area are up for a total of $507,000 in grants to run digital literacy programs. That resolution would also change the rules and allow the programs to give out refurbished computers that are up to five years old – the current limit for CASF subsidies is two years.

I’m the project lead for the Central Coast Broadband Consortium, and the East Bay and Tahoe consortia are my clients. I’m not a disinterested commentator. Quite the contrary. Take it for what it’s worth.

FCC preemption loss is muni broadband win

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One more vote, and you’re mine.

Waving the magic federal wand and erasing state restrictions on muni broadband seems like a wonderful idea, until the wand waves the other way and muni broadband disappears. That’s why last week’s federal appeals court decision overturning the FCC’s preemption of Tennessee and North Carolina laws limiting muni broadband systems was welcome news.

The current Federal Communications Commission majority tried to preempt the state restrictions during a burst of presidential community broadband populism a year and a half ago. But majorities and popular enthusiasm shift with the political winds. It’s not hard to imagine another president and a different majority lining up with current FCC commissioner Michael O’Rielly, who wrapped up his endorsement of the court’s decision by saying

Contrary to some beliefs, municipal networks are not panaceas to solving any lack of ubiquitous broadband, but instead unfairly distort the marketplace.

It’s no great intellectual leap to reckon a distorted marketplace to be the kind of barrier to infrastructure investment that the FCC is obligated to remove, under the interpretation of federal telecoms law that the appeals court judges rejected last week. Fortunately rejected.

Most states allow cities to operate muni broadband systems with few or no restrictions. Even Tennessee and North Carolina allow it – the beef was about cities offering broadband service beyond their borders.

The restrictions that do exist should go, but the right way to eliminate them is to take the muni broadband battle to state capitols. Telephone and cable company lobbyists are as thick on the ground in Sacramento and Nashville as they are in Washington D.C., but it’s harder for them to hide, and harder for legislators to ignore constituents. Not impossible, but difficult enough to make the fight for community broadband winnable more often than not.

In the long run, last week’s verdict will be a victory.