Fierce Telecom reports…
Verizon (NYSE: VZ) is apparently taking part in the move by incumbent carriers to shift customers away from the PSTN. First with its policy to move “chronic” customers off of copper; then with the deployment of Voice Link, a wireless service targeted at voice-only customers in rural areas where the carrier has not laid fiber.
Often I might leave this topic alone, since the impact on Minnesota is limited at this point – but the move sets a precedent that will have an impact rural areas in Minnesota.
On the one hand it makes sense. Customers are giving up their landlines in droves so why support it? On the other hand, this has the potential to leave a whole swath of the country without service or at least without choice.
The move brings the broadband conversation to old debates – should broadband be a utility or is it a commodity? And what’s broadband? Does broadband just relate to a speed definition? Are there expectations of reliability? What about data caps?
Utility versus Commodity
The difficulty with thinking of broadband as a utility is that it implies (and probably would introduce) a range of regulations that few providers want. But the problem with not thinking about it as a utility is that it has become a necessary infrastructure. I’ve written about the range of activities that require broadband – online job applications, access to telemedicine, remote and online education. It seems as if there’s a push to make better use of these online tools – especially by governments and government agencies from Civic Hack events to broadband in the courtroom. But is it fair to shift services online without ensuring that all citizens have the infrastructure to access those services? Or maybe more to the short term question, can the US government afford to maintain online and traditional services? And if not, is it fair to shift services to only those who have access to broadband especially since we’ve seen that the folks on the far end of the divide tend to be older, to have less education and lower incomes – folks who may be in greater need of public services. Perhaps an investment in infrastructure opens the door to cheaper online-delivered services in the future!
This might be an opportunity to come up with some public-private partnerships that have been touted both by the National Broadband Plan and the Minnesota Ultra High-Speed Task Force report. Maybe there’s room for the ubiquity and reliability of a utility with the value added service of a commodity. But it starts with asking some hard questions – of communities and providers. (I am reminded of statistic heard at the TED conference this summer of the global population shift to urban areas. Communities that don’t ask the hard questions may find the shift happening around and despite them.)
In March I wrote about the importance of definitions in terms of funding…
The definition of broadband has been used to calibrate funding mechanisms. So even though the topic is dry and wonky – the outcome is important to folks on the street, especially in rural areas, because it defines the speeds that the government (state or federal) might subsidize. For example, Minnesota is shooting for ubiquitous broadband at speeds of 5-10 Mbps upstream and 10-20 Mbps down. The National Broadband Plan is looking for 100 million homes to have access to 100 Mbps; and 1 Mbps upstream and 4 Mbps down for the rest.
Verizon is following the lead of the National Broadband Plan and following the funding of the USF (which supported wired infrastructure) progression to CAF (which supports a lot of wireless infrastructure). Or maybe not following the money but definitely moving away from services that are no longer receiving subsidies that support a business case. Last summer, Kevin Beyer (from Federated/Farmers Telephone) described the issue with funding wireless as opposed to wired infrastructure. Kevin’s issue related to the interconnected nature of wireless access. It’s tough to have wireless access without wired Middle Mile support.
For the end users, I think there are other differences that will be felt more acutely – I think of rural advocate on The Range (Aaron Brown) and his $1000 annual bill for satellite and issue of data caps. A recent survey in the UK indicated clearly that consumers would give up wireless access before wired.
One of my biggest concerns with the shift to wireless is that will leave many rural areas in a future limbo because providers will abandon plans to upgrade wired access with wireless options. Last fall TeleCompetitor ran an article on innovative ways to boost access through copper – in response I spoke to Brent Christensen at MN Telecom Alliance…
In my mind, fiber is the ultimate “end state”. There are many in the wireless world that would seriously disagree. Regardless, there is no way you can successfully build a fiber network and supporting infrastructure from scratch with no existing revenue. You start out so far in the hole you can never dig out to operate the new network, say nothing of repaying the borrowed money. That is why you no longer see private CLEC’s starting up the way they did after the 1996 act.
Brent is not the first (especially independent provider) to say that fiber is the end game plan. But will that continue to be feasible if wireless replaces copper? Or will that make the business case even more difficult? Which gets back to the other debate – is broadband a utility? Does wireless meet all of the definitions of a broadband utility.
And I always feel like I need to add that there is definitely a place for wireless! There’s a reason people are giving up their landlines – so much more convenient to use a Smartphone. But wired means more than home phone – it means infrastructure.