We are the government and we are here to help!

Last year, the FCC implemented its Net Neutrality rules that prevent Internet Providers (IPs) from blocking, throttling, or prioritizing apps or websites delivered via mobile or wired networks.  The basic principle is that all content should be treated equally.  Sounds reasonable.  But, is it an unreasonable and/or unnecessary overstep by the government? 

IPs have figured out ways to circumvent the rules.  Sponsored data plans allow content providers to “pay for” their programming so it doesn’t count towards customers’ data caps.   As long as the IPs extend the offer to all content providers on the same terms isn’t that fair and reasonable?  At what point, do attempts by regulators to catch up to (and interfere with) the competitive forces of a market become wasteful and even counter-productive?

What about FiOS?

Verizon FiOS was the first major deployment of Fiber To The Premises (FTTP) in the United States.  The FTTP network architecture terminates optical fiber (replacing cable) at or outside the customer’s home (not just to the node).  While it expanded quickly initially, the subscriber count for FiOS internet and TV seems stalled at about 6M each.

(See map: http://fiberforall.org/fios-map/)

How will Verizon FiOS respond to Comcast’s gigabit service (via DOCSIS 3.1) launch in markets where the two firms compete?  Will they give up the wireline market because of costs, regulations, and declining demand?  For now, that appears to be the writing on the wall.

http://www.telecompetitor.com/comcast-gigabit-footprint-begins-to-grow/

Google it!

Alphabet is considering entering additional tech-hub markets in 2016/2017 with Google Fiber, its 1-gbps broadband service.  (See map)  Market expansion, at an estimated cost of $500/home, is based on several considerations including the city government’s willingness to streamline regulatory hurdles.  With Comcast so entrenched in Philly, will Alphabet stay away from the City of Brotherly Love?  Chances are they will.  That becomes even more likely if Comcast successfully rolls out its 1-gbps service using DOCSIS 3.1.  The good news is that we will have access to super-fast high speed broadband here.  The bad news is that, without competition, it may be priced out of reach for  many of us.

Where are we with high speed broadband?

In its review of 2014 fixed broadband deployment (via DSL, cable, fiber, satellite, and wireless internet service providers), the FCC found that 10% of Americans did not have access to its new standard of high speed broadband (25 Mbps download and 3 Mbps upload).  The good news is that this is half of what it was just two years earlier.  The bad news is that 10% represents 34 million people; a number way greater than zero and one that is inconsistent with the FCC’s objective of ensuring that broadband is available to ALL Americans in a “reasonable and timely fashion.”  

And, while the digital divide between rural and urban areas narrowed a bit, it remained strikingly large because of the cost (profit) differences in deployment.   In 2014, 39% of Americans living in rural communities lacked access to 25/3 broadband speeds.  This is down from the 55% in 2012, but significantly higher than the 4% of the urban population.  

http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0107/DOC-337173A1.pdf

When it comes to speed: Cable v. DSL

In its recently released 2015 Measuring Broadband America Fixed Broadband Report, the FCC found that the maximum advertised download speeds among the most popular service tiers offered by ISPs using cable technologies more than tripled between 2011 and 2014. (The average speed jumped from 12-30 Mbps in 2011 to 50-105 Mbps in 2014.) A major factor contributing to the rise in average speed by cable ISPs is the adoption of DOCSIS 3 technology.  By contrast, ISPs using DSL technology reported lower and generally unchanged maximum advertised download speeds.

https://www.fcc.gov/reports-research/reports/measuring-broadband-america/measuring-broadband-america-2015

It’s no secret or surprise that…

Comcast is [again] the lowest ranked internet service provider in the country.  As the only viable broadband provider in some markets, customers pay up but do not necessarily shut up.   

Jealousy could be a factor in their anger.  In Google Fiber markets like Kansas City, Austin, and Provo, subscribers pay $70/month for 1-gig internet access (or $130 for internet and TV).  In AT&T GigaPower markets, 1 gig internet speed is available for $70/month or $110/month.  (The price is lower in markets where Google Fiber is a competitor.)

Where is Comcast with its mega-speed internet service?  Well, in 2015, it rolled out GigaPro in just six markets [to counter Google Fiber and/or AT&T’s GigaPower and/or a municipality like EPB in Chattanooga].  The 2-gigabit per second service, however, costs customers $1,000 upfront and $300/month for 24-months, and its only available to customers who live in close proximity to the company’s fiber network.  But, this strategy appears to be a stop-gap measure to stem erosion of share in vulnerable markets.  The grander plan is the widespread deployment of the DOCSIS 3.1 modem that, in early testing, has shown the ability to substantially increase the amount of data transfer Comcast can manage over its existing cable TV network.  If the modem change-out works successfully, Comcast will be able to launch the service nationwide much more quickly and much more cost effectively than building/upgrading its network.   Will Comcast price and deliver the service in a way that will finally make customers happy?   Let’s see.

That didn’t take long…

The FCC’s Net Neutrality rules that went into effect last summer are intended to prevent mobile and fixed-wire Internet service providers (ISPs) from blocking, throttling, or prioritizing apps or content delivered over their networks.  The ISPs are once again challenging the rules in court.  (U.S. Appeals Court heard oral arguments in early December.)

But, in the meantime, the ISPs are testing the legal limits of the rules by introducing new streaming services that exempt “some” content from data caps (T-Mobile’s Binge On, Verizon’s Go90), allowing third parties to sponsor data (AT&T),  or using the cable portions of their networks instead of the internet to deliver services (Comcast’s Stream). 

How will regulators and lawmakers respond?