Light Reading

Could Cable, Telco Unite on Gig Services?

Carol Wilson
12/12/2013
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I've heard a lot and written a fair amount about the problems faced by small cities and towns and the carriers that serve them in bringing broadband to the masses in an affordable way.

Just yesterday, I shared Mediacom Communications Corp. Business VP Dan Templin's thinking that municipalities wanting broadband should be turning first to their local cable operator, and that cable operators serving these smaller munis and more rural areas need to be working together on bringing gigabit services to businesses, schools, governments, and, eventually, residences. (See Forget Google Fiber, Think Cable Fiber.)

But even Templin was taken aback a bit when I asked him if he would consider working with a small telco that served a nearby rural community or town. After all, telcos are also trying to boost the bandwidth they deliver in less populated areas for the same reasons cable companies and municipalities are: economic development, better quality of life via education and healthcare and, in some cases, the very survival of a rural community. And public-private partnerships could embrace network operators of all types.

Templin's response was candid: He admitted he hadn't thought about cable-telco cooperation and that no one had ever asked him about it before I did.

Certainly there would be challenges to linking cable and telco networks -- even as both offer Ethernet services and deliver wavelengths over fiber, they do it in different ways, usually employing fundamentally different access technologies. Is it impossible then to consider a gigabit consortium that links willing players on both sides of the cable-telco divide?

Public-private partnerships make sense in this arena. You can even argue that this is essentially what Google has in Kansas City, where it gets free access to rights-of-way, central office space, and power. But could those partnerships include multiple types of operators?

I continue to believe that, despite the US devotion to competition in all markets, the notion of competing fiber-to-the-home or even fiber-to-the-business networks in smaller cities and towns and certainly in rural areas is far-fetched. Many of these areas are home to the 15 million Americans who can't get any broadband at all, according to the Federal Communications Commission (FCC) .

But we may be too far down the balkanization path to retrace our steps back to a point where it's rational to talk public-private cooperation a level that includes both cable and telco operators. It may be enough to just figure out how one or the other would work with local government officials to solve the gigabit challenge, possibly in an open access way that ultimately benefits everyone.

— Carol Wilson, Editor-at-Large, Light Reading

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victorblake
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victorblake,
User Rank: Light Bulb
12/18/2013 | 11:42:17 AM
Re: Tried and died
Agreed. But this is like saying that McDonalds and Five Guys are selling the same product. OK, technically yes they are both burgers, but I think we all know they are quite different -- as is the culture of the two companies.

If munis REALLY want to encourage broadband investment and development they need to (I've said this before) GET OUT OF THE WAY. The principal obstacles to FTTH are construction costs. While these include labor and insurance, they also include ridiculous government procedures for ROWs, attachments, permits, etc. Here are some very specific things munis could do:


(1) wave permit fees for any fiber deployment period. That includes drops and feeders.

(2) expedite permits

(3) eliminate all franchise requirements

(4) transition public access to online means such as livestream or YouTube (which now supports live broadcasting)

(5) eliminate pole attachment fees or at least suspend fees for a given number of years

(6) purchase services from the companies that they expect to be successful. If they help them be successful, they will be.

(7) eliminate any property taxes on the use of telecommunications equipment or assets within their localities (in this includes towns, cities, counties, and states). It's just ridiculous to tax these assets. Taxing a building, that's fine, trucks- fine, but OLTs ? Really ? That's no way to encourage the purchase of new assets ....


There are many other things they can do. Excepting 6 there is no COST for these things. And eliminating permit fees is not (as I am sure some will argue) a cost because govnerments are notsupposed to be profiteering from permits.

-Victor
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/18/2013 | 10:41:54 AM
Re: Tried and died
Interesting, thoughtful comment and your points are well-taken. According to Mediacom, there are even difficulties connecting different cable networks for some of the same reasons. 

But the cultures are very different and remain so, even as there are fewer differences in the services and products they deliver. 
victorblake
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victorblake,
User Rank: Light Bulb
12/18/2013 | 10:39:29 AM
Tried and died
This concept has been tried before here in the US. Remember M-ISP or MISP ? Miserable failure. It has also failed before that under the names of UNE and open access. Why:


1. Telcos and cable companies do not get along. They have different operating models and cultures, and would require order entry, repair order, work order, and other systems integration for a unified outside plant.

2. While there is some theoretical cost savings (this has been economically studied), the cost savings do not include the additional costs of connecting to the POIs -- much as was the case for UNE.

3. The provider that owns the plant has little incentive to share, after all the fees collected for sharing are smaller than the actual cost of fiber build and are not guaranteed for the fiscal life of the asset (typically 30 years).

4. Most important, on fiber networks, you must use compatible gear. You can't just willy nilly mix gear even on different wavelengths. There are complex optical issues which are difficult even for a single operator to manage.  That means the only possible unbundled solution is to have dedicated fiber to each premise -- like the NBN project in Australia. A HUGE failure. Why? It is incredibly expense and inefficient.


It is cheaper for a cable or telephony company to build a FTTH PON then for each of them to contribute (50/50) to a dedicated fiber build. Just to be clear, a PON is less than 1/2 of the fiber construction cost of P2P. The ONLY PLACE that is NOT true is in a multi-tennant deployment such as may be the case in apartments or condos where there are at least N tennants and N is the high split ratio (typically 32 or 64 -- possibly 128 if the distances are short enough as may be the case within a building).
brookseven
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brookseven,
User Rank: Light Sabre
12/13/2013 | 9:37:47 PM
Re: Cable, telco unite
Excellent, next to your fiber I want a 4 pair dry contact....chop chop as Carrier of Last Resort you MUST provide it.  Expect fines if I don't get it in 30 days.

Thanks!

seven

 
Richard from MA
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Richard from MA,
User Rank: Light Beer
12/13/2013 | 9:32:43 PM
Re: Cable, telco unite
Brookseven:

It is not if we did that, We are doing exactly that!   Frankly we would welcome the Carrier of Last Resort status (why is it that you telcom folks never defiine your arcronyms) and would urge the regulator to withdraw all public utility status from Verizon including all subsidies for (not) providing universal service and building out under served areas. Unlike the incumbants Municipal system are dedicated to serving their communities.

As far as turning off your equipment and walking away goes, If you did that I would urge the regulator to strip you of Public utility status and make you clean up you mess on the way out  of town.  It is not as though the incumbants had any intention on doing anything other than turning off their equipment and walking away anyway. Verizon and AT&T can not wait to abandon rural and underserved areas so who are you kidding? it certainly is not the rural customer base.

 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/13/2013 | 5:55:24 PM
Re: Cable, telco unite
Who would be brave enough to sponsor it?
albreznick
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albreznick,
User Rank: Blogger
12/13/2013 | 5:39:12 PM
Re: Cable, telco unite
MAybe we should put together a panel to discuss this topic at the small cable and telco shows. Might make for some interesting talk and even deals. 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/13/2013 | 5:29:49 PM
Re: Cable, telco unite
If by community owned, you mean co-ops, then I see what you are saying. But a lot of rural and small-town, small-city telcos are owned by founding families or investors or some combo of those two. I still think there is room for these guys to work with munis. 
brookseven
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brookseven,
User Rank: Light Sabre
12/13/2013 | 5:04:21 PM
Re: Cable, telco unite
Since the smaller telcos are already community owned...then there is no need for a NEW public/private partnership.

Which is why I suggested IOCs.

seven

 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/13/2013 | 4:40:42 PM
Re: Cable, telco unite
Seven, 

I share your impression - the "no-broadband" spots are generally owned by larger incumbents. But we were discussing gigabit networks - or at least faster broadband than the DSL options many smaller telcos are still offering. That's what the munis want. 
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