19 Comments

Summary:

When it comes to broadband, it’s the applications, not speed that matters, but by default, then we need to admit our national goal of 4 Mbps broadband probably isn’t fast enough to deliver the up and coming apps, and may doom the U.S. to inadequacy.

istock_000014439456xsmall (1)

A few months ago I challenged the broadband speed goals in the National Broadband Plan. Besides my central thesis that speed had become the tail wagging the dog when it comes to national policy, I also responded to plan architect Blair Levin’s offer to debate the adequacy of 4 Mbps as a sufficient 10-year goal for rural America. From the column:

Blair Levin, chief architect of the national broadband plan and advocate for the 4 Mbps goal, stated in a recent interview, “I’ll be happy to debate this with anybody anytime anywhere if they answer three questions: What should the speed be? What will it cost? And how will we pay for it?”

The first is a trick question. The goal isn’t about speed, it’s about getting to the moon and back at whatever speed it takes to get the job done. With broadband technology, this benchmark is fluid among communities and constituent groups and their respective needs. The answer to the second question is: one hellava a lot, especially if you want to do the job right. The answer to the third question is, we can pay for more of these networks if fewer people had a backward worldview on this issue. Chattanooga, Tenn., Santa Monica, Calif., and Wilson, N.C. are three communities that have already found ways — without broadband stimulus dollars — to build gigabit networks.

I want to take this debate a little further. Being the person who literally wrote the book on community broadband – two books actually – I’ve talked to hundreds of people who represent communities in need of broadband. There are several additional points where I differ with Mr. Levin based on what I’ve heard from the trenches.

Since my last column, Mr. Levin has done several interviews in which some of his comments are now closer to my argument. In a CNET interview he states, “The one [metric] that’s most wrong is speed. We should be thinking about how we use it because the real upside is not in increasing speed, it’s in increasing the applications.” I agree 100 percent. By default this comment says that, if the apps individuals, local businesses and organizations need over the next couple of years demand much greater speeds than 4Mbps, sticking by this goal would condemn rural America to the ghetto of broadband inadequacy.

Mr. Levin makes several additional assertions, though, I find problematic. I feel these views will have a negative impact if adopted as policy.

“Speed is incredibly important, but what we found was for most of the country speeds are actually pretty good. I would say that 4G is going to end up being more important to more people over the next couple of years than increases in wireline speed.” (from PC World)

I’m not sure how much of Levin’s research was hands-on in small towns, the ‘hood, rural counties and barrios, but for a great many places, broadband speeds are not pretty good. In fact, feedback I get straight from some of these communities is that based on what they need and what they will need in the next couple of years, speeds outright suck, availability is spotty-to-nonexistent and quality of services is abysmal. If broadband policy reflects the incumbent propaganda that sugarcoats reality, outcomes from that policy will be flawed.

Furthermore, students of physics will tell you that wireless has speed limits that fall short of individuals’ and organizations’ future broadband needs. And students of history will tell you that, based on tech industry trends related to speed and capacity, that future is much sooner than 10 years. 4G is more a marketing-hyped interim fix than a long-term solution for communities’ broadband needs.

“Having a massive regulatory regime based on the theory that someone may become a monopolist in the future may become very problematic because it may turn out that’s not true at all, and that affects investment decisions.” (from PC World)

Theory? Please. Our history is littered with stories of businesses that, when left to grow un-checked (i.e. unregulated), became predatory, rival-eating, innovation-squashing, customer-screwing, self-preservation-at-all-costs snakes. Consumer protection agencies and truckloads of case law came into being directly because of this corporate predilection for monopolistic behavior. Any broadband policy claiming to benefit the general public, businesses and institutions must include protections of these constituents from that behavior. To believe otherwise is to live in a fantasy world.

“If we don’t get 1 Gbps to every community and if we don’t get a nationwide interoperable public safety network, then we should re-think what we were trying to do.” (from PC World)

Here again, I agree with Mr. Levin 101 percent. But I wonder. Given this statement, does that mean the people promoting the National Broadband Plan are going to stop talking about 4 Mbps as a 10-year goal? Because you clearly can’t get there (broadband with serious cajones) from here (really wimpy broadband goals).

“Mobile broadband is a horizontal industry. This means it is the industry to which every other industry will find new tools for innovation and growth.” (from PC World)

Policymakers need a clear lesson on how to differentiate hype from reality. Hype: mobile broadband (a.k.a. LTE) will carry us to the broadband promisedland. Reality: There are wireless data communication technologies that take us closer to the promised land today, and they aren’t LTE (which, by the way, is a mere imitation of what 4G is truly supposed to be).

Vince Jordan, President and CEO of network management firm RidgeviewTel, explains, “There are wireless point-to-point and point-to-multipoint technologies that serve people who are looking for a seamless experience in which they can’t tell where the platform and application end, and broadband connectivity begins. 4G/LTE will not get us there, whereas these other heavy-duty wireless options do it today, and will continue to do so in the future in conjunction with fiber technology.” Our broadband plan needs to rely more on hefty wireless options currently in play that get us 20 Mbps to 300 Mbps rather than this pseudo 4G that offers 5 Mbps to 12 Mbps.

“Competition is great, but we can’t afford everything. So we have to shift funds to ensure we accomplish our main goal, which is getting service everywhere. That is a  hard choice. And I think the FCC needs to be clear about those types of choices.” (from CNet)

This is, by far and away, where consumers and businesses Internet users got reamed by the National Broadband Plan. It fails to address the lack of competition that is the crux of many of America’s problems in broadband: crappy speeds, high prices, the lack of services that businesses need, poor service quality in small towns and rural areas.

I recently completed a needs assessment for a California town within the shadow of a major metropolis that technically has 11 providers offering services in my client’s area. Yet over one third of the tenants in the town’s industrial park aren’t getting adequate speeds to run several major types of business computing applications. It costs nearly $1,000/month to get less than 10 Mbps of access while businesses in some cities that own their own network pay $350/month for a gigabit. One national incumbent won’t even bring service to the business park at all.

Yes, businesses have “available” options that lobbyists like CTIA thump their chests about, but there are (to date) no providers competing to offer broadband services that businesses need in that park. This situation exists across America, as shown in a recent report from the FCC that says 2/3 of Americans do not have providers that offer the minimal speeds (4 Mbps down, 1 Mbps up) the agency established. And in places that have three or more wired and wireless competitors, that “competition” erodes entirely when you look for true broadband speed. “In those conditions, 97 percent of users had only one or two carriers at most to choose from.”

What’s one main reason we don’t have competition where it counts – offering services that businesses require if they’re going to drive economic development? Too many policymakers and lawmakers from DC to the statehouses lack the guts to take on the incumbents who obstruct both meaningful policy and legislation that would give us the competition we need. And those who do make a stand continually get beat down.

While there are many good things to say about the National Broadband Plan and the great work people did to create it, there’s still some assembly, and disassembly, required.

Craig Settles is an industry analyst, co-founder of Communities United for Broadband and broadband business strategist who delivers on-site training to private and public sector organizations. Follow him on Twitter (@cjsettles) and his blog, “Fighting the Next Good Fight.”

Related content from GigaOM Pro (sub req’d):

  1. Settles, agree with just what you said. Your explanation was certainly the simplest to comprehend. I tell you, I usually get annoyed any time folks discuss issues that these people obviously don’t know about. You were able to hit the nail on the head and spelled out the whole thing with out complication. Perhaps, folks could take a signal. Will likely be back to obtain more. Appreciate it

    Share
  2. hi, i agree Policymakers need a clear lesson on how to differentiate hype from reality. Hype: mobile broadband (a.k.a. LTE) will carry us to the broadband promised land.but you told about Realit there are wireless data communication this technologies truly its taking dissection supposed to us.

    Share
  3. Is the answer to force providers to offer service in certain areas? Is it to increase the already ridiculous subsidies for rural telecom (e-rate)? I’d like some subsidies on my urban area mortgage – could we call it m-rate? Rural residents and businesses have numerous economic advantages – lower rents, lower salary costs, higher standards of living for any given salary, cheaper property, lower taxes. And yet, they have to pay more for broadband, due to the cost of delivering it – is this unfair?

    Broadband access is not a right. If we can’t even make healthcare a right, why bandwidth?

    Share
  4. Daniel, I agree with you on the subsidy part. I was pretty amazed once I started digging into eRate, the Universal Service Fund and then looking at how it turned out many of the broadband stimulus grants were awarded. Our government has, at least in the past decade if not before, thrown truckloads of money out in a way that enables incompetent companies to suck the well dry while delivering the crap so many people now have for Internet services. A lot of broadband stimulus money went to sound public and private sector organizations, but there are early complaints in a few areas about the incompetent once again making out like bandits.

    As much as people badmouth local government and government in general, it has been local communities that created successful broadband networks (almost all of those “muni” wifi failures were networks built and run by private companies with bad business plans). Chattanooga, Santa Monica, CA are among a handful of communities delivering 1 gigabit services through networks they own. Furthermore, many of the dozens of communities that built wired or wireless networks, or made the first credible steps to build networks, saw the incumbents immediately start upgrading infrastructure and start offering lower prices. Why? Because of competition communities themselves created.

    The problem is not that the Feds spend money, it’s that they spend money, provide tax breaks and create policies leading to more spending, and much of it is ass backward. What the Feds need to do is re-direct most of this USF money to communities with sound broadband business plans that present clear needs and a clear path for the networks (through partnerships, vendor/provider relationships, good marketing, etc) to turn those communities around. Stop giving it to incumbents and local providers that will whiz the money away and leave communities with the dregs of broadband.

    Fundamentally, it is at the community level that the best broadband solutions will be created. These will not be frivolous networks for the entertainment of youth and the unemployed, but technology put in place to improve local economies, transform how people are educated and re-trained for a global digital economy, revamp healthcare delivery and other benefits that show a clear value received for tax dollars spent.

    Share
  5. Craig, while I understand the current focus on government stimulus grants to rural America for broadband, I’m left wondering how this investment will actually positively impact the nation’s standing within the Global Networked Economy.

    It seems to me that investing in the U.S. metro areas that are “most likely” to create new jobs would have a more substantial and lasting uplifting impact on our economy.

    Specifically, until the tech-centric urban area residents — such as those in silicon valley — have parity with the symmetrical super-fast broadband services of the leading global metro markets (Tokyo, Hong Kong, Seoul, etc), America’s tech entrepreneurs are at a real disadvantage with their peer group.

    Share
    1. @David

      I think you raise a good point, but one that is hard to deal with. Government investments into rural areas are politically feasible because the private sector has most obviously failed there.

      Too few understand the ways in which the private sector broadband companies have failed urban areas. Until this failure is made more evident, few will support more government investment into urban areas, no matter how much it is needed.

      When I speak with people from these urban areas, I find elected officials as well as staff that don’t feel they have support to take on a major cable/dsl provider with a FTTH network.

      Share
      1. @Christopher, point taken and understood.

        That said, I believe that the “urban parity challenge” can be addressed by private/public partnerships — meaning, federal, state and local government can work in concert with private broadband service providers (as they have done in the recognized broadband leading nations).

        Granted, this could very well be “hard to deal with” — but imagine if the U.S. was ranked 40th in National Defense (military) spending, then would finding a resolution be a high-priority for the nation’s political leadership? Yes, it’s a rhetorical question.

        Share
  6. It is all about community empowerment and having that community utilize their own resources to realize nationally any economic recovery and be a virtual world competitor.

    A community can be rural and remote, or urban or suburban. The business case for service provision, regardless of network speed, can be made in rural areas; consequently the business case in larger demographic areas is much more rewarding. The cloud must be in the community. Otherwise there is going to be such an impact on both cellular networks and the Internet, our information highways will make congestion on our transportation highways seem trivial in comparison. The monopolistic bent marriage of smart phones and cloud computing will seal that fate.

    Bandwidth and competition are secondary to community empowerment. If billions already spent on the National Broadband program were spent on incenting communities the other pieces would fall into place. The drum that I’ve been beating is one of a community development cooperative, similar to a tribal model, where a community utility company, could be controlled by the cooperative and the remaining equity be shared by incumbents, if any.

    Under such a plan, the technology, applications, and business case can be readily established within the community to host local websites, to do local voice, video, and data switching, to establish local broadcast and public safety communications, to do telehealth, to do tele-education, etc. etc.

    What Happen$ in the Community $tay$ in the Community!

    Share
  7. Ridgeview Tel’s CEO is a snake charmer. Totally smoke and mirrors… borrow from Peter to pay Paul. Can’t even get the local wifi in town to work reliably. Don’t buy the hype from that dude.

    Share
  8. Let me point to one glaring, easily provable falsehood of magnificent proportion in Mr. Settles’ blog. He says: “…a recent report from the FCC that says 2/3 of Americans do not have providers that offer the minimal speeds (4 Mbps down, 1 Mbps up) the agency established.”

    The FCC’s recent broadband report says no such thing. It did not measure “offered speeds,” it measured the plans that subscribers actually signed up for. As nearly everyone who cares about broadband networking knows, provider offer a menu of plans differentiated by bit rates, and the people consistently choose the rock-bottom plans. The US is among the world leaders in bottom of the barrel, low rate plans at modest prices. The average American pays more for his cell phone plan than for her wireline broadband plan. The faster plans are available, but this study didn’t look for them.

    By misrepresenting the FCC report, Mr. Settles seeks to create the appearance of underserved Americans clambering for faster broadband that they can’t get for any price, when the data shows just the opposite: In terms of what people are willing to purchase, the broadband networks in this country are actually over-built at the moment.

    Convincing people to move up to higher bit rate plans is the job of application developers, and the one who’d doing the best job at the moment is Netflix.

    Share
  9. One of the reasons I add links to outside sources is to add weight to the comments I’m making. If you follow my link to the story about the FCC’s report, you’ll read “About 68 percent of connections measured at the end of 2009 were below the 4Mbps download and 1Mbps upload speeds.” There’s more interesting details and charts there Larry should check out.

    Share
    1. Sorry, I meant to say Richard. Larry’s always on top of the game.

      Share
    2. The question I raised is whether the connection speeds the FCC measured are the *best available* to those homes. It’s not a subtle distinction. Where I live, for example, Comcast offers a 50 Mbps plan, but few people buy it. Therefore, the FCC report would conclude that there is no 50 Mbps network here.

      If higher speeds are not available, the public policy response is to help make them available. If they are available but people choose not to buy them, the public policy problem is how to encourage people to use them, which takes an entirely different approach.

      Anyone who reads the report can see what the FCC is measuring.

      Share
  10. [...] and Blair Levin, the writer of the National Broadband Plan. The original story can be found here, and Levin’s response can be found [...]

    Share

Comments have been disabled for this post