Elon Musk will be launching low orbit satellites

The Washington Post reports…

SpaceX has received official permission from the U.S. government to launch a fleet of satellites designed to beam high-speed Internet signals down to Earth.

The decision marks a major milestone for chief executive Elon Musk as he pursues a dream of putting 12,000 small satellites into low Earth orbit, connecting rural and developing parts of the world to the Internet.

In more-connected areas, the technology could inject a new competitor into markets that have historically been dominated by one or two Internet providers — potentially driving down prices, increasing speeds and improving service.

They say the network will be different that what folks are used to…

The proposed satellite network would differ from current satellite data technology, which is slow and expensive. Under Musk’s plan, SpaceX’s satellite fleet would orbit much closer to Earth than traditional communications satellites that stay in geostationary orbit high above Earth. That means data will travel to and from the satellite much more quickly — increasing the speed and reliability of the connection.

Better broadband is always awesome. Satellite might suffer from a history of upgrades that while improved, have not impressed all customers. So I wanted to look into the low orbit solution a bit. This is what I learned from Wired

Traditional satellite communications systems float in what’s called geosynchronous orbit, around 22,000 miles1 above the Earth. These satellites can provide internet access to remote parts of the Earth, as well as airplanes. But the connections can lag, which isn’t good for real-time applications like online gaming or video conferencing. SpaceX and OneWeb both aim to overcome this problem by launching satellites into what’s called low Earth orbit, which ranges from roughly 100 to 1,250 miles above Earth.

The problem is that in order to reach the entire world from low Earth orbit, these companies need hundreds or thousands of satellites, raising the system’s cost. Previous attempts at building low Earth orbit networks ended in bankruptcy, including the Bill Gates-backed Teledesic and satellite-phone companies Globalstar and Iridium.

SpaceX and similar companies, like Jeff Bezos-backed Blue Origin, are trying to reduce the costs of launching rockets, which lower the cost of building such a network. But it’s not yet clear whether these companies could offer internet access at rates that subscribers can afford, and skeptics worry this will end up costing more than just trenching fiber and building cellular towers.

It sounds like cost may still be an issue, especially for the hardest to reach areas.

Cable is surpassing telecom as broadband provider across the US

Tech Dirt reports…

Cable providers like Comcast and Charter continue to quietly secure a growing monopoly over American broadband. A new report by Leichtman Research notes that the nation’s biggest cable companies added a whopping 83% of all net broadband subscribers last quarter. All told, the nation’s top cable companies (predominately Charter Spectrum and Comcast) added 2.7 million broadband subscribers in 2017, while the nation’s telcos (AT&T, Verizon, CenturyLink, Frontier) saw a net loss of 625,000 subscribers last year, slightly worse than the 600,000 subscriber net loss they witness in 2016.

The reason for the change in market share…

Oddly Leichtman can’t be bothered to explain why the cable industry has become so dominant: a total refusal by the nation’s phone companies to upgrade their networks at any real scale. …

You’ll note from the chart above that the only telcos still adding subscribers are those that are actually trying to upgrade to fiber to the home (AT&T, Cincinnati Bell).

The author notes the impact on rural communities…

The result is a massive gap between the broadband haves and the broadband have nots, especially in rural markets and second and third tier cities these companies no longer deem worthy of upgrading (they will, however, back awful protectionist state laws banning towns and cities from serving themselves, even when no incumbent ISP wants to).

And questions the role of wireless to solve the problem…

While many people like to argue that wireless (especially fifth generation, or 5G) will come in and save us all with an additional layer of competition, that ignores the fact that wireless backhaul services remain dominated by just a few monopolies as well, ensuring competition there too remains tepid and often theatrical in nature. And with many cable providers now striking bundling partnerships with wireless carriers, the incentive to actually compete with one another remains notably muted, as nobody in the sector wants an actual price war.

Learning from a Metro broadband provider about how coax a provider to your area

Last week I met with CTEP (Techie AmeriCorps) members and Travis Carter from US Internet (USI). The CTEP crew is looking at equitable, affordable broadband in Minneapolis. USI is a piece of that puzzle because where they offer access, it is affordable and they have a 4.7 star rating on Google. I look forward to the CTEP findings.

In the meantime, I wanted to share some of the things I learned in the conversation that I thought might be of interest to communities in rural areas.

USI is a private company. They have no outside shareholders. They don’t get state or federal funding. They did get a contract to deploy a wireless network for the City of Minneapolis (around 2007). That gave them a relationship with the City and with many customers. Their goal is to provide FTTH to every inch of Minneapolis in 5-6 years. So inquiring minds want to know – how to get them to my neighborhood first?

Sounds a lot like the conversations I hear in rural Minnesota. “I know that provider is growing? How can I get them to come to me/us?” The following might help.

Here’s what I learned about the barriers to broadband deployment:

  • Contiguous networks are easier – seems obvious enough that building from the network you have means you have backhaul access, you have people on the ground and people near (if not in) the community know you.
  • The Minneapolis Park Board is hard to work with – especially because they don’t have a right of way concept to use in decision making. Their goals do not include broadband. They don’t have a “regular way” to deal with requests. Their incentives aren’t high.
  • It’s good to have an anchor tenant (such as the City) to help pay the bills.
  • There needs to be demand. USI needs a 30 percent take rate to break even. (Rural areas need a higher rate because population density is lower and costs are often higher.) Some neighborhoods take longer to get to that 30 percent.
    • In Minneapolis, the wealthier neighborhoods are not the best for USI. The people are older, more set in their ways and the prospect of saving money on a month bill is not compelling enough to get them to switch providers. (Even USI still has 2,900 dialup customers!)
    • The best customer is a household with two working parents and kids. They know they want access; they are interested in lower costs.
    • There are people who aren’t online and aren’t interested.
  • USI cannot get access to poles in many areas – due to policy restrictions. So, they bury all of their fiber and that takes longer.
  • Many multi-dwelling-units (apartments) have exclusive contracts with existing broadband providers. Once those contracts expire, USI will be able to approach the units about offering services.
  • Word of mouth advertising works best. Because the service is offered on a block-by-block basis larger scope advertising is impractical. (They don’t want calls from people they can’t serve.)
  • They want to grow – but they need to grow at a manageable pace to mitigate risk of debt and quality of service.
  • Minnesota winters are a killer for deployment!

So how does a neighborhood or community help a provider overcome these barriers (and get picked first)? Some items are easier to address than others. Here are three ideas:

  • Extending the network is helpful. USI is deploying service in St Louis Park because has made it easy for USI. They have dark fiber, they have conduit, they will lease fibers. Dakota County has made an effort to get ready for third party providers for years.
  • Smoothing regulatory barriers is helpful. (We saw the State do that for wireless providers in time for the Super Bowl.)  A community may not have power to make regulatory change but they might be able to build partnerships to help build incentive with agencies or local landlords.
  • Building demand is also helpful. Travis mentioned that one industrious hopeful customer got a petition/database of 600 customers near her interested in fiber. (That pushed that neighborhood to the shortlist!) We’ve heard stories from Paul Bunyan and HBC on the impact of community demand too.

Zayo sells Scott-Rice Telephone to New Ulm Telecom

I’m catching up on “old” news from February. Telecompetitor reports…

Zayo Group Holdings, Inc. today announced that it has entered into an agreement to sell Scott-Rice Telephone Co., a Minnesota ILEC (incumbent local exchange carrier), for $42 million to New Ulm Telecom, Inc.

Zayo is moving away from “non-core assets” – New Ulm will grow with the acquisition…

“New Ulm Telecom, Inc. is very excited about the acquisition of Scott-Rice Telephone Co.” said Bill Otis, President and CEO of New Ulm Telecom, Inc. in a statement.  “The additional connections, geographic location and strong relationships with customers position us well to continue our growth strategy.”

New Ulm, Minnesota-based New Ulm Telecom operates several ILECs as wholly-owned subsidiaries, offers a triple play bundle and is a wireless reseller. The closing of the transaction is subject to regulatory approvals and customary closing conditions, and is expected to occur in the June 2018 quarter.

Congrats to two smart MN providers: CTC and Arvig for recent accolades from NTCA

Happy to see Minnesota represented

NTCA Announces Smart Rural Community Grant and Showcase Award Recipients

Austin, Texas (February 26, 2018)—NTCA–The Rural Broadband Association today announced four Smart Rural CommunitySM Collaboration Challenge grants and recognized four SRC Showcase Award recipients as part of the association’s initiative to highlight efforts that make rural communities vibrant places in which to live and do business.

The goal of the NTCA Smart Rural Community initiative is to foster the development of smart communities throughout rural America and Canada by encouraging innovative implementation of broadband solutions and access to next-generation applications for distance learning, telehealth services, public safety and security. Smart Rural Community provides educational programming, matching grant resources and an award program to recognize top-performing communities.

The Collaboration Challenge grants promote development of broadband-enabled solutions for communities and support collaborative efforts in economic development, education, energy, health care and public safety.

The SRC Collaboration Challenge grant recipients are:

  • Consolidated Telecommunications Co. (Brainerd, Minn.) received a grant to enable a full classroom to experience virtual reality (VR) tours of distant significant sites, scientific endeavors, and natural resources.
  • GRM Networks (Princeton, Mo.) received a grant to support a business incubator facility designed to train area high school students in business development; the facility will be staffed by senior citizen volunteers.
  • Panhandle Telephone Cooperative, Inc. (Guymon, Okla.) received a grant for the installation of an HD surveillance and security system at a 32-acre public park; the system will also support public WiFi access.
  • Star Communications (Clinton, N.C.) received a grant to support the implementation of digital literacy and interactive learning programs for pre-K students at a local preschool and day care center.

The SRC Showcase Award recipients are:

  • Arvig (Walker, Minn.)
  • Atlantic Telephone Membership Corp. (ATMC) (Brunswick County, N.C.)
  • Bledsoe Telephone Cooperative, Inc. (Pikeville, Tenn.)
  • Bruce Telephone Co. (Bruce, Miss.)

In addition to receiving national and local recognition for their extraordinary efforts, the selected Smart Rural Community award recipients will join recipients of prior year awards to formulate best practices and assist other rural communities in the implementation of innovative broadband-enabled solutions to drive economic and community strength in rural areas throughout the nation.

For more information about the initiative, visit www.ntca.org/smart.

 

ISP sales and use taxation exemption (HF 3245) introduced in the MN Legislature

The bill was introduced March 1, 2018  …

Quam, Drazkowski, Davids and Hoppe introduced:

  1. F. 3245,A bill for an act relating to taxation; sales and use; providing an exemption for Internet service provider machinery and equipment; amending Minnesota Statutes 2016, section 297A.68, by adding a subdivision.

The bill was read for the first time and referred to the Committee on Taxes.

Here’s the proposed text

A bill for an act
relating to taxation; sales and use; providing an exemption for Internet service
provider machinery and equipment; amending Minnesota Statutes 2016, section
297A.68, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 297A.68, is amended by adding a subdivision
to read:

Subd. 46.

Internet service provider machinery and equipment.

Internet service
machinery and equipment purchased or leased for use directly by an Internet service provider
primarily in the provision of Internet service that are ultimately to be sold at retail are exempt,
regardless of whether purchased by the owner, a contractor, or a subcontractor. For purposes
of this subdivision, an “Internet service provider” means a business or person that provides
individuals and other companies access to the Internet and other related services such as
Web site building, cloud storage, virtual hosting, and similar data processing and information
services through one or more points of presence on the Internet.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2018.

Frustration in Orr with Middle Mile access not coming to the door

The Timberjay reports…

We see the headlines all the time. A new broadband initiative, funded by the state or the feds, is investing more taxpayer dollars to lay fiber optic cable to small towns out across rural America. We’ve certainly seen our share of fiber optic cable buried across northeastern Minnesota in recent years— indeed, well over $100 million has been invested in bringing fiber to area communities in just the last few years.

And, still, most residents of our region continue to suffer with the same poor-quality Internet access they’ve had for years.

They look specifically at Orr, Minnesota, where middle mile fiber has been installed but residents are not able to access it. The Timberjay asks how this is possible..

Here’s how: There’s a fundamental disconnect between the promises we hear with each new broadband investment, and the service that actually gets delivered to the end users, whether they’re residential or business customers. The publicly-funded projects that we hear about are enhancing the capacity of what’s known as “the middle mile.” Essentially, these projects provide a solid infrastructure with the “potential” to bring advanced broadband capacity to our communities, but they stop short of actually connecting with the businesses and homes they’re supposed to serve. The final mile of these projects is supposed to be completed by the private sector, companies like Frontier and CenturyLink, who are ostensibly partners on these projects.

These fiber installations are massive public subsidies that we provide to these telecommunications companies, with the supposed understanding that they will then provide a matching private contribution to enhance their switching capacities and upgrade their connections to the end users.

But as we’ve seen, these companies simply aren’t interested in making such investments in our communities. Which means we lay a lot of fiber in the ground that, essentially, serves no purpose.

We see this all the time when government interfaces with the private sector. Unfortunately, the politicians are more than happy to throw money at the problem du jour, but there’s little to no follow-up to make sure that the promises made at the press conference, when the money is approved, are converted to promises delivered six months or a year down the road.