Tag: broadband

America’s Intentional Broadband Duopoly


Michael Powell

When was the last time someone offered to sell you Broadband over Power Line (BPL)?

BPL was one of the FCC’s five “modes” of competitive access, and the FCC traded this flawed concept of “intermodal” competition for true open market competition.

In 1996, Congress passed The Telecom Act, a major update to the previous 1934 telecommunications law. The updated Act set out to foster true competition in local communication services, and, by extension, broadband. And, it almost worked.

The Act separated services – voice, data, etc – from the physical infrastructure they ran over (copper wires) and allowed competitors uniform access to the cabling to deliver these services. The incumbent sold access to the copper lines, at a profit, to multiple competitors who deployed the equipment connected to the ends. This recognition of the copper lines themselves as a natural monopoly, while services over them were competitive, was the key to the goal of vibrant and open competitive access.

This innovative Act spurred the widespread deployment of DSL services, and a tumultuous period of competitive over-construction and subsequent bankruptcies. These failures don’t condem the concept of competition, but were an over-exuberance of investment ahead of demand. Startup telcos also suffered during the dot-com crash in 2001; as funding dried up, large cash consumption rates caught up with reserves for many of these companies.

In the late 1990’s, most other developed nations followed the U.S. example in separating structure from services. They have stayed the course, and in Europe and Asia today competitive access has driven up broadband speeds, at lower costs.

But, in global broadband rankings, the U.S. isn’t even in the top ten! This is because despite Congress’s expressed intention of creating competition with The Act, the FCC decided that five competitors was enough. And, three of them were non-starters.

With the appointment of FCC Chairman Michael Powell, and lobbying by incumbents, a new theory was born: Intermodal competition was better than true open competition. The modes: Cable, Telco, Power Line, Satellite and Wireless. Each, an effective state-created monopoly. This was done under the banner of the free market, a topsy-turvy way to look at the elimination of actual competition.

With the shift away from the 1996 Act’s open competition model toward this constrained intermodal goal, the FCC began to make a series of decisions to clear the decks of meaningful competition, freeing Cable to spar with Telco, with Broadband over Power Line and Wireless. Satellite would bring up the rear for those unlucky enough to live in a region not worth investing in by the designated modal monopoly.

To create these modal monopolies, the FCC began to foreclose meaningful competition. First, they set aside access to available idle incumbent fiber optic lines for competitors, meaning the the suburbs, which are served by fiber-fed digital loop carriers and remote terminals, were out of reach. In their Triennial Review Remand Order of 2004, the FCC wrote:

In our Triennial Review Order, we recognized the marketplace realities of robust broadband competition and increasing competition from intermodal sources, and thus eliminated most unbundling requirements for broadband architectures serving the mass market

Robust broadband competition? Really?

Then, in the Brand X decision, they ruled that Cable would not be required to allow competitors to lease their lines either. The FCC did this by reclassifying broadband Internet access as an “information service”, rather than a “telecommunications service”. As a result, common carriage rules could be set aside, allowing for an incumbent Cable monopoly. This decision was challenged all the way to the supreme court, who ruled in 2005 that the FCC had the jurisdiction to make this decision.

To close out Powell’s near-complete dismantling of competitive services in the U.S., the FCC took up the issue of ISPs resale of DSL using the incumbent’s equipment, also known as wholesale “bitstream” access. If Cable is an information service under Brand X, why shouldn’t Telco have the same “regulatory relief”? The result: the FCC granted forbearance (in other words, declined to enforce its rules) from the common carriage requirements for telco DSL services.

As for robust intermodal competition, the fact is that BPL hasn’t worked. And Wireless is slow and expensive. And of course satellite, with its round-trip to outer space and back really isn’t a contender.

So, much of the U.S. has ended up with exactly what the FCC intended: intermodal competition, an effective duopoly. The predictable result: the U.S. is no longer a broadband leader.

There are pockets of competitive offerings. Most businesses can choose telephone and Internet service from a competitive company. And, in metropolitan regions, there may also be competitive choices like Sonic.net’s Fusion service, or Covad ADSL2+.

For those in the suburbs, competitive prospects are pretty dim. That was the intention.

Why U.S. Broadband is So Slow

Cheap, Ultrafast Broadband? At Least Hong Kong Has It. By Randall Stross.

Today The New York Times wrote about Gigabit fiber broadband in Hong Kong, which is available there for only $26 per month. The article includes mention of Sonic.net, and the Google fiber project.

In the article, author Randall Stross wrote,

“In the United States, we don’t have anything close to that. But we could. And we should.”

Here is why we don’t:

In 1996, the US Congress kicked off the broadband revolution when it passed the Telecom Act. The 1996 Act created a level playing field for competitive carriers, and brought about widespread deployment of DSL and other broadband technologies.

Then in 2003 and 2004, the then Republican led FCC reversed course, removing shared access to essential fiber infrastructure for competitive carriers and codifying instead a policy of exclusive use and “multi-modal competition”.

This concreted our unique US duopoly: cable versus telco, the two broadband choices that most Americans have today.

In exchange for a truly competitive market, the US received promises of widespread deployment. And, to some degree this has worked. Unfettered by significant competition or price pressure, broadband in at least in its most basic form can now be delivered to most homes in America, albeit at a comparatively high cost to the consumer.

What was given up in exchange for this far-reaching but mediocre pablum was true competition and innovation.

Elsewhere in the world, regulatory bodies followed the lead of the US Congress and separated essential copper and fiber infrastructure from the services and providers who used them, and the result has been amazing. In Asia and Europe, Gigabit services are becoming common, and the price paid by consumers per megabit is a tiny fraction of what we pay here at home.

I won’t deny the innovation that has occurred in the telco/cable duopoly. They’ve got TV, Internet and telephone bundles designed to serve up prime time network shows in over-saturated HD glory, with comparatively middling Internet speeds, all offered with teaser rates and terms that would baffle an economics professor. The clear value of the bundle is to baffle, and pity the consumer who wants to shed a component. At least during the intro periods, it’s often cheaper to take the whole package than just a component or two.

For cable companies, the entrenched interest in the television entertainment portion creates a clear conflict: why should they offer an uncapped broadband connection that can deliver enough video entertainment to allow consumers to cut the TV cord? And if you do drop the TV, up goes the price for even this slow and capped Internet connection, so you pay more either way. And now that telcos have gotten into the television business too, their interest in slowing the pace of increasing broadband speed is aligned as well.

This has yielded a competitive truce in America.

In a slow tide, back and forth, cable delivers a slightly better product, then telco slightly better again, all at the highest possible cost. It is iterative, not innovative, and Americans deserve more. After all, we invented the Internet, right?

Sonic.net can reach nearly half of the homes and businesses in the Bay Area today with our Fusion Broadband + Phone service. Fusion offers the latest ADSL2+ broadband, with speeds of up to 20Mbps per line (with two line bonding available if you want to double your speed!), plus home land line voice with unlimited calling, all for $39.95/mo for one line, or $69.95 for two.

Fusion is innovative technology and innovative pricing.

This is possible because the skeleton of the 1996 Act, copper lines, are still available as a shared resource for all competitive carriers. But the reach of copper is limited to just a couple miles. (You can see if Fusion reaches your location here.) This limited reach creates islands of competition around the old telephone exchanges.

For the rest of you, a bit over half of the households in the Bay Area who are located too far from the shared telephone offices, I am afraid you are out of luck for now. We must build new fiber all the way to your home, passing by along the way the idle fiber infrastructure that the FCC set aside nearly a decade ago.

Related articles:

Fusion Broadband + Phone Price Drops Again

We just dropped the price of our Fusion Broadband + Phone service for residential customers! Previously $50.00, Fusion Broadband + Phone is now priced at just $39.95!

This is an unbeatable deal for Broadband at up to 20Mbps plus land line voice with unlimited nationwide calling. If you’re not already a Fusion Broadband + Phone customer, you can check for service availability here.

Two line residential Fusion (up to 40Mbps and two phone lines) has also dropped, from $100.00 to $79.95. Sonic.net has reduced Fusion prices twice before, opposing the trend of annual price increases by other carriers.

Existing customers will automatically see the new rate reflected in their bill shortly. We appreciate your selection of Fusion at the $50.00 rate, and I know you’ll like it even more at $39.95.

This is part of our commitment to continue to improve our flagship Fusion service. We would certainly appreciate it very much if you’d tell your friends (online and offline), neighbors, blog readers, Yelp/DSLReports reviews, etc. Your positive endorsement is the best way for us to grow. As you can see, we’re passing along cost savings as rate reductions to you!

This new rate applies to Fusion Broadband + Phone. If you have a Fusion “Standalone” service that doesn’t have voice, you can retain that product at your current rate. If you would like to take advantage of the new rate, you will need to activate voice. If you’d like to do this, please call us now to start the process. You can reach our customer service group at 707-547-3400.

We have decided not to add voice automatically for all customers for a number of reasons. First, we can port a number from another carrier for you, or let you choose a new telephone number, and we would like you to make this choice. Second, there are taxes and fees associated with voice, and we’d like to assure you understand them. Estimated voice tax and fee information is available, listed by city. Third, Fusion Broadband + Phone requires a credit, debit or pre-paid debit card for payment, so we need to collect that information if we do not already have it. Finally, and most important, we must validate that your physical address is accepted by the 911 system when we activate voice.

I’m very happy to see the customer excitement about our Fusion product. I really appreciate everyone’s positive feedback and the great reception we have had for the service. Thank you! Please spread the word.

Micro-trenching at Sonic.net

As part of our next-generation Fiber to the Home (FTTH) efforts, Sonic.net has been working on various fiber installation methods in an attempt to drive down costs and increase the speed at which fiber deployment can be completed.  Micro-trenching is anticipated to be a part of this in areas where utilities are underground.  

Here are a few photos of some of the early trial work we have done here in Santa Rosa in the past months.

This week I visited Fibrecity UK in Bournemouth in the Southwest of England to see them using the Marais SideCut system in their project. They are currently using three Marais SideCut saws as they build out to serve 80,000 homes in that community.

It was very inspirational to see the Marais saw in daily use there in a production deployment. The Marais solution is fast, cutting about 15ft per minute. (Marais RC50 pictured, Fibrecity actually uses the RT80 model.)

In a parallel universe, Google has been testing micro-trenching techniques as part of their Google Fiber for Communities project. We had heard from common contacts in the industry that Google had held a race, and I was very pleased to see that they have now released a video “Micro-trenching at Google” this last week showing the results.

Google’s video is a nice introduction to micro-trenching, and it’s exciting to see Google also pushing the envelope on new construction methods.

Sonic.net Fiber

Photo by Kent Porter / The Press Democrat

We are working on construction of next generation all-fiber optic networks, as the next step after our Fusion Broadband service.  We announced two weeks ago at the Ignite event in Sebastopol that we would be building a residential test network there as the first fiber optic deployment.

For more details on our progress on this project, please read the Press Democrat article which was published this weekend.

The primary driver for deployment will be customer interest. We have not set the thresholds at this time, but we will deploy fiber optics in each community when a certain percentage of households are on our copper network.

We will be publishing percentages for various communities in the next few months so that you can spread the word and gauge progress toward fiber construction in your area.

San Rafael deployment complete

San Rafael

All: FlexLink Green/Yellow: Fusion (approximate)

We’re now taking orders for new Fusion Broadband and FlexLink Ethernet & T1 services in the main San Rafael SNRFCA01 central office.  This site is one of our big new fiber signal regeneration sites, so it’s got an amazing amount of bandwidth passing through.  Scoop some of it up for yourself as it passes by if you are located in the San Rafael serving area.

Cotati, Sonoma Fusion/FlexLink availability

We have deployed equipment in two new central offices on our new technology platform. Both Fusion and FlexLink products are now available to customers served by the Cotati and Sonoma central offices.

Cotati and Sonoma were left out in the initial wave of deployment last year because both are awkwardly situated with relationship to many of the customers in the serving area. For example the Sonoma central office is actually in Agua Caliente, and this limits the availability of Fusion services for many Sonoma residents. (Agua Caliente residents on the other hand are very well situated.)

That said, for our business clients, broad FlexLink availability is important, so it’s nice to have wrapped these two locations up. Many wineries in the Sonoma area for example have previously had only expensive T1 or wireless options available, and can now take advantage of the speeds and low prices of FlexLink symmetric products.

These two offices complete our near term Sonoma County coverage, and we are now focusing construction efforts in Marin, Napa and the East Bay.

A little bit extra

As mentioned in this system status message, we have re-profiled all Fusion Broadband customers to deliver a higher maximum sync speed. We have added 10% on top of the advertised maximum speed of all of our Fusion speed tiers.

The idea is to over deliver a little bit extra to Fusion customers who are obtaining the maximum speed in their selected tier. So, a customer who buys “up to 6Mbps” Fusion now is actually set to a profile of 6592kbps in the DSLAM, and an “up to 18Mbps” customer is set 19776kbps.

Maybe racing stripes really do make things go faster!

Fusion DSL Broadband static IP blocks

A little diagram of an IP address (IPv4)
Image via Wikipedia

We have been getting push-back from customers on the policy that Fusion is only available with a single static IP. While we’d hoped that NAT & PAT would allow for whatever capabilities people need, the bottom line is that customers want more than one static IPs.

So, in the near future we’ll begin offering four and eight IP blocks with Fusion. We cannot do this immediately because we simply don’t have enough IP address space; it eats up a lot because we must allocate at least a full /24 to every single CO, which we haven’t done at this point, and we simply don’t have enough address space.

(Sidebar: Today we route each CO a /25 (half a class C) for statics, and had planned to accommodate 125 static IP broadband users in that block. With eight IP blocks, we can only fit 14 customers in a /25. Because of this, we have to get bigger blocks to each CO before we can begin these larger allocations.)

Pricing is to be determined – it is likely to be a slightly different price point for each level of IPs.

If you want more than one static IP address, I encourage you to wait to order Fusion until the product is defined, priced, and integrated into the ordering tools.

Thanks everyone for the feedback!


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