In between the bread and circus being delivered to us about the Muni Wireless issue and the deploying of fiber by Verizon is one harsh truth, we have pretty much failed to meet a very necessary requirement in our national infrastructure – delivering broadband to everyone who wants it.
Back in 1998 I wanted something better than dialup – slow dialup at that. Where I lived (right next to the last telephone in the universe) we connected at near BBS speeds. This meant that every time I needed a Windows driver, an anti-virus library update or even collecting email I had to wait and wait and wait. As the Internet became more important to by business I had to add in another telephone line so as to not tie up our voice lines and our fax line.
At that time the choices were few in my area ranging from ISDN (at a cost that ran from roughly $150/month for a single channel connection to just above $300/month for a dual channel connection) to either a fractional T1 (about $700/month with IP) or a full T1 that was well above $1,700/month based on a 36 month contract. Obviously, none of those solutions were acceptable for a small computer sales and service company like my own.
As more and more of my customers were asking if there was anything I could do about their Internet connection we decided to research what technologies were out there that might allow us to share a higher bandwidth connection. The rest is history, as they say.
Yet almost a decade later there is still a significant portion of the US that has no access to broadband (as currently defined by the FCC as 200Kbps) if we exclude the current of satellite providers.
How can this be after nearly a decade?
The honest answer is that we have a combination of factors that are contributing to this. From one side we have the regulatory environment that has created a patchwork of confusing rules and regulations that even a telecommunications lawyer has troubler sorting out. On the other side we have the ILECs who between their extravagant lobbying efforts and their complete inability to ethically deal with any form of competition to their monopoly are dooming our country to mediocrity at best and economic failure as the most extreme outcome. All this so they can keep their jobs.
Ask not what your country can do for you, ask what you can do for your country.
Apparently, the ILECs are not the least bit in-line with that statement.
Focusing in specifically on the WISP perception we need to look at what steps could be taken to help assist WISPs to fill in the holes. I heard Rudy Leser (Alvarion) describe this as the Swiss Cheese problem. What we have is broadband coverage (the cheese) and pockets with no coverage (the holes) something that seems to describe the situation here pretty well.
What should we be looking towards to help remedy this problem? I see three possible areas that need to be addressed; regulation, upstream connectivity prices and mandated availability along with hardware costs.
Regulation – Let’s face it, the set of laws that govern the telecommunications industry are nothing short of a nightmare. The ILECs are asking for a level playing field and I am going on record in support of that. This country needs one set of very simple to understand set of rules that makes it easy for anyone to deliver communications services.
The problem is that the ILECs are asking for a level playing field that slants in their favor – something that we cannot allow. Right now the telephone companies receive billions in Universal Service Fund fees to support telephone service in this country.
As we move into an age where more people are starting to connect to the world through the Internet one has to wonder of this program is now being used as it was originally intended.
As quoted from this article,
“The notion of universal phone service dates back to the early 1900s. Theodore Vail, then president of American Telephone & Telegraph Co., convinced President Woodrow Wilson the newly invented telephone would catch on quicker if the country adopted a nationwide system similar to the one used for mail. At the time, a number of companies were building phone networks around the country, but the systems weren’t connected. Allowing one company to consolidate these networks as part of a government-sanctioned monopoly would create uniformity, Mr. Vail argued. He declared his vision “one system, one policy, universal service.”
Add to that the assertion that the telephone network is “owned” by the Telephone companies even though we (the American public “we”) were forced to pay for not only the building but also the maintenance of this mammoth network and we have to wonder exactly how level a playing field the ILECs really want.
Here’s a suggestion, let’s take away the Universal Service Fund, ask each telephone company to reimburse the American public for the cost of building and maintaining this network and we will then give them ownership of the entire network when they have finished paying off the debt. Add to that, no more tax breaks, no more bailouts along with no more subsidies and I think we can put together a deal. Even more interesting is the notion that these behemoths would now have to behave like a real company! That’s right, raise capital, go into debt, earn your business and all that.
What this creates is a motivation for these companies to deliver service efficiently using any method they with to employ to deliver service. The great thing about this is that I can see these companies all of a sudden realizing that they need to partner with WISPs in order to make money and provide service into areas that they might not otherwise be able to provide service. Will the telephone companies accept this deal and then succeed at it? I sincerely doubt it. They talk a big game but without the protected monopoly status and constant massive infusions of tax payer’s money they would collapse in record time.
Upstream connectivity prices and mandated availability -
In this day and age it is ridiculous to ask anyone to pay the money the ILECs expect us to pay for upstream connectivity. The reason they can charge us this much is because of the protection afforded them by the overseeing regulatory bodies (see above) and this very protection is affecting every single provider all the way down the line.
The idea that the ILECs can cross-subsidize services so that we (the independent ISP) help pay for DSL is incredibly short-sighted yet we know that this is allowed with a wink and a nod so that it can be said we are addressing the broadband delivery issue.
What would happen if the cost of a full DS3 throughout the entire United States was mandated at $500? The technology is certainly there as is the infrastructure to deliver it. How about if we demand that anywhere the ILECs have facilities they provide DS3s at that price within a 30 day timeframe? What would that do to the independent service provider’s costs? Would this then translate into a lot more connectivity being deployed into our rural areas? I am sure the increase would be dramatic. I am equally sure that the biggest reason we cannot get this kind of service isn’t that the ILECs couldn’t deliver it – profitably – but that the ILECs understand that this would pave the way for their downfall as the one true monopoly – something they just can’t seem to understand is going to happen anyway. What’s worse, once they do understand it is inevitable, they might begin to understand it would be the best damned thing to ever happen to them.
Stupid is as stupid does…
Hardware costs -
Everybody’s favorite complaint, the price of hardware. Somewhere in the lost passages of time, a wise man once said you need to invest money to make money. I believe this wisdom has also been rephrased to the current “There’s no free lunch.”
Incredibly, just about every WISP I run into seems to believe they should be able to spend almost no money and be instantly profitable! What is this some kind of instant gratification thing that has taken on a life of its own? Where is the annals of business case study does it say this is a sound business practice? Name me one other business that requires no initial investment (or next to no investment) that will blossom into a successful business in no time flat. Please, I’ve been looking for one for most of my life and I can’t find anything like it.
That doesn’t mean that our hardware costs need to be as high as they are – not by a long shot.
Classically speaking, what set of factors can we find that have traditionally had an impact on the cost of manufactured goods. Well, there’s certainly supply and demand. As we know if there are not enough of a certain commodity the price rises and when there are too many of any given product the price drops. We can also add in the dynamic that mass production brings to the equation. As any manufacturer buys in larger quantities the price drops. Think of this as the Walmart effect, if you will.
In order to make the WISP market more competitive we need to lower our costs for our hardware but at the same time the costs won’t come down until the quantities we buy significantly increase – kind of a Catch-22 we are caught in.
One thing that can be said for the hardware manufacturers is that they aren’t asleep at the switch. Whether they saw the handwriting on the wall (take a look at what happened with WiFi) or they just finally listened to what we WISPs have been screaming at them for the last several years, I believe WiMAX was exactly created to deal with this issue.
So, what is cheap?
Without exception every broadband provider out there has costs, the ILECs, CLECs, the cable companies and WISPs. What I can’t understand is how WISPs complain about the “excessive cost of equipment” when they have none of the incredibly high expenses that any of their competitors have. One common complaint is that CPE costs in the $200 to $300 range (sometimes more) and the cable modems associated DSL modems are in the sub-$100 price range.
This completely ignores the reality of the cost of the Central Office, the DSLAM and the maintenance of the copper network – yes, I do realize that other services are delivered over that infrastructure. The same holds true for the cable industry as though the headend is free and all of the costs of maintaining the coax infrastructure is taken care of magically.
WiMAX promises a pretty interesting dynamic to the situation and if it lives up to its mass-produced, extremely low cost potential this might lower the overall cost of delivering bandwidth but it still falls short of the mark of delivering bandwidth to everywhere in the US.
The bottom line, private enterprise has failed miserably in providing universal coverage for our country. What broadband there is (and the discussion still rage about the reality of this) is still pathetic compared to other countries where ubiquitous coverage is available at a reasonable price and at far greater speed than we have even in out best locations.
The cost of this is incalculable but suffice it to say that we are paying for it economically. I am often accused of screaming that “The sky is falling.” To those who say that, you might want to look a up, things are not as rosy as you might remember them. The damage we are allowing to happen while we refuse to acknowledge how far we are falling behind will last for more than a few years.
Remember, being vain, stubborn and ignorant while refusing to do little more than spout someone else’s rhetoric is no way to go through life.