Sean Buckley

Federal Communications Commission Chairman Tom Wheeler’s business data services proposal is facing opposition from the Schools, Health, Libraries Broadband (SHLB) Coalition who say that the proposal needs to regulate Ethernet pricing, a key factor for its cash-strapped constituency.

A key point of content for SHLB is that Wheeler’s proposal only applies to TDM-based services. The organization has asked the FCC to consider developing a technology-neutral regulatory construct that takes into consider IP-based Ethernet and existing TDM services. “The record evidence shows that TDM and IP services are not two separate markets -- they are substitutable services,” SHLB Coalition said in a letter to the FCC. “The very first paragraph of the Commission’s Tech Transitions Order discusses how IP-networks are replacing TDM-based networks and calls for a “technology-neutral” policy. SHLB pointed out that “Ethernet services are sometimes delivered over TDM circuits illustrates the difficulty of establishing different regulatory rules for these two technologies.” Not surprisingly, a particular concern SHLB cites is service cost, which is a major issue organizations that reside in rural markets. Schools and rural anchor institutions in rural markets often are limited to just one provider, inhibiting their choice for competitively priced services.

Chattanooga’s EPB says that while it is still limited by Tennessee law to selling 1 Gbps FTTH service within its defined borders, the municipal fiber provider is confident that growing demand for higher speed broadband could drive a change to current legislation.

Despite the legal barrier, the service provider continues to get requests from nearby towns to get their broadband service. At the same time, local incumbent telcos like AT&T have not made any moves to upgrade their facilities to offer faster speeds that consumers want. “We have a defined electric power footprint and the state of Tennessee only allows us to offer internet service within that defined electric power footprint and our answer has always been no,” said Danna Bailey, VP of corporate communications for EPB. “We’d like to serve you because Tennessee law prohibits it and it’s become a statewide issue as we hear more stories in not-always rural parts of the state who have access to little or no broadband at all.” The service provider has begun working with six other communities in Tennessee that have built out similar FTTH networks. As part of that work, the communities have continued to petition the state general assembly to get the law changed, but no progress has been made. “We haven’t been successful in working with the Tennessee general assembly to get this law changed,” Bailey said. “I expect that will come up again on the docket this winter when general assembly goes back into session.” EPB and the other communities continue to hear about more voters telling them stories about how students have to drive to a local restaurant to use Wi-Fi to complete homework assignments.

Comcast may have been one of the most vocal opponents to the fiber-to-the-home moves by Chattanooga, Tennessee-based utility EPB, but the company’s efforts over the past year to wire the city with fiber-based 2 Gbps services for residential and businesses is giving customers more choice. While Comcast has not revealed how many customers have signed up for its 2 Gbps service in Chattanooga -- a much smaller market in comparison to other ones it serves like Chicago -- its moves are a likely response to EPB’s efforts to offer the community 1 Gbps and even 10 Gbps fiber-based services.

Comcast has increased its network investments and launched new products in the city, including Gigabit Pro, Comcast’s 2-gigabit internet service, and installed hundreds of Xfinity Wi-Fi hotspots in its markets. Gigabit Pro is a FTTH-based service, which requires a special installation at the home. The cable MSO has been no less aggressive on the business front. In June, Comcast Business completed a multi-million dollar fiber optic network across greater Chattanooga capable of delivering up to 10-gigabit speeds to local businesses. Even though Chattanooga is not a Tier 1 city, Comcast and even incumbent telecom AT&T are bringing better broadband into the area, responding to a competitive environment.

AT&T has begun a hybrid millimeter wave (mmWave) wireless and wireline technology trial, targeting apartment complexes outside of its wireline service area to deliver up to 100 Mbps in areas where it has not been able to reach potential broadband users. But 100 Mbps is just the start of its bandwidth ambitions.

AT&T indicated that it plans to make faster speeds available, including a possible 500 Mbps tier that it will test through this fixed-wireless solution. To deliver the service to each user, AT&T is using mmWave wireless technology to send a multi-gigabit signal from a central building connected to fiber to neighboring locations, and then is connecting each unit over the existing in-building wiring. When a neighboring building receives the multi-gigabit mmWave wireless signal, AT&T converts it to a wired internet connection. The telco then uses existing or new wiring in the property to offer internet access directly to each unit. When customers that reside in these properties sign up for service, they can plug their Wi-Fi router into an existing wall outlet to get internet service in their apartment. AT&T did not specify what millimeter wave spectrum band it is using for this trial.

Georgia’s lawmakers are working together to find a way to enhance broadband service in the state’s rural areas by asking residents to take an online survey about their service experience. After tallying the survey results, state Sen Steve Gooch (R-Dahlonega (GA)) said a joint committee of state lawmakers will make a set of recommendations, including developing tax incentives to further broadband investment and getting rid of certain government regulation. State Sen Gooch said that substandard Internet service creates a barrier to economic development in rural parts of Northeast Georgia. State Sen Gooch added that businesses say broadband weighs heavily on whether they will locate their business in a particular town or city.

CenturyLink said that as it extends broadband services to rural areas via the Federal Communications Commission’s Connect America Fund-II program, it can attract a larger amount of customers that reside in 1.2 million homes with 10/1 Mbps speeds. In 2015, CenturyLink accepted $500 million in the second phase of the FCC's Connect America Fund (CAF-II), enabling it to deliver broadband services to about 1.2 million rural households and businesses in 33 states over the next six years. By accepting the 33 CAF II statewide offers, CenturyLink will be able to deliver up to 10/1 Mbps to locations in FCC-designated, high-cost census blocks that today can get at best between 1.5 to 3 Mbps speeds. Stewart Ewing, CFO of CenturyLink, said that as its technicians begin building service in a community, more users will sign up. “There are numerous examples of places where we have gone out and enabled locations that did not have service before,” Ewing said. “With door hangers left by the technicians and word of mouth, basically you can quickly get penetration of 50 percent.”

Verizon and Incompas’ joint business data services (BDS) proposal has gotten the support of several state and local trade associations which say it will enhance network investment and provide greater choice to businesses and non-profit organizations. The letter was signed by the Midwest Association of Competitive Communications, CALTEL, Michigan Internet & Telecommunications Alliance, Northwest Telecommunications Association, and CompSouth.

“The beneficial effects of BDS reform will reverberate throughout the economy,” said the group of organizations. “Competitive wireline and wireless providers will be able to invest more in their own networks and innovative products and services, benefitting customers and competition throughout their communities. Indeed, one study shows that the spill-over effects of price reductions in the broader economy are substantial and an annual boost to GDP 2.6 times as great as the direct reduction in prices.” The group said that it agrees with the Verizon-Incompas proposal that implementing a “competitive market test using three bandwidth tiers is appropriate” because “it recognizes where it makes economic sense for competitors to build and where it doesn’t.” Additionally, the trade groups said that by implementing a 15 percent price cap reduction for TDM, the FCC can achieve its goals to ensure greater competition in the BDS market.

Google Fiber may have lit the fiber-to-the-home (FTTH) fire, but network construction company Dycom said that AT&T and CenturyLink’s ambitious FTTH expansion plans represent the consumer and business customer’s demand for higher speed bandwidth. Steven Nielsen, CEO of Dycom, told investors during this week’s DA Davidson 15th Annual Engineering & Construction Conference that AT&T and CenturyLink’s FTTH aren’t directly linked to Google Fiber’s actions. “Google Fiber is responding to the same factors for consumer demand for high bandwidth that the incumbents are,” Nielsen said. “They are the effect of the consumer demand and not the cause of other people spending because they are all reacting to the same environment.”

Nielsen added how a number of Canada’s key incumbent telecommunication and cable operators – a list that includes Bell, Telus, Shaw and Rogers – all stated they will enhance their fiber and broadband footprints. “In Canada where Google Fiber is not present, you have the exact same dynamic as you have here in the U.S.,” Nielsen said. AT&T and CenturyLink have set some ambitious targets for their FTTH deployments, a process that will represent potential new revenue streams for Dycom. During the second quarter, AT&T had only 2.2 million homes passed with fiber, a figure the telecommunication company expects to ramp to 2.6 million by the end of 2016.

Consolidated Communications said a large portion of its footprint it passes can get 20 Mbps, enabling the company to surpass the Federal Communications Commission’s 10/1 Mbps Connect America Fund-II requirement. To participate in the CAF-II program, service providers had to commit to delivering up to a minimum of 10/1 Mbps to their target set of homes and businesses.

Steve Childers, CFO of Consolidated Communications, told investors during the Drexel Hamilton Telecom, Media & Technology Conference that its long track record in building out networks in rural markets makes it easier to bring higher speeds to harder to reach customers. “We’re already well above what the FCC standard is and we feel like we have been investing in rural America for a number of years,” Childers said. The service provider breaks out broadband availability into three main buckets: Speeds of 20 Mbps, 100 Mbps and 1 Gbps.

AT&T has become a major stakeholder in the US Department of Housing and Urban Development’s (HUD) ConnectHome initiative to connect low-income families with internet services, but critics question the availability of its new offerings. As part of its work with HUD, the service provider plans to host 30 events across 15 ConnectHome pilot communities located within AT&T’s 21-state wireline service area. During these events, AT&T will provide information about Access from AT&T, a low-cost internet service it launched in April. AT&T will also provide up to 100 Udacity Nanodegree program scholarships to select participants in designated HUD communities. Nanodegree programs are self-paced, online curricula that provide students in-demand skills to help obtain tech-related jobs. The courses will focus on web development, mobile development and data analytics. Set to start on September 10, the events will spread ConnectHome pilot communities in several cities across ten states: New York, Georgia, Louisiana, Oklahoma, California, Missouri, Arkansas, Tennessee, Illinois and Texas.

Households that qualify for Access from AT&T will be able to access three speed tiers: 10 Mbps, 5 Mbps or 3 Mbps available at their address. Speeds of 10 Mbps and 5 Mbps will cost $10 a month while 3 Mbps will cost $5. AT&T will waive installation and internet equipment fees for participating households. However compelling AT&T’s intentions are to bridge the so-called digital divide, the National Digital Inclusion Alliance (NDIA) said in a report that many of its affiliates that tried to help SNAP participants apply for Access were told the program was unavailable.