The Widening Rural Broadband Gap

FunkstownThe gap between urban and rural broadband is widening quickly these days. Up until the late 1990s access to the Internet was the same for everybody using dial-up. But within a short period of time in the late 90s both DSL and then cable modems hit the market.

I remember back in the early 90s how jealous I was of friends who had Internet access at work using a T1. But then DSL became available and all of a sudden we could all get the equivalent of T1 access at our homes. At the time DSL felt amazingly fast, and it was at 20 – 30 times the speed of dial-up. The big limitation with dial-up was that it took several minutes to see a picture that accompanied a news story and it could take hours to download a software update. But DSL and cable modems fixed those problems and images became much faster and file downloads didn’t take half of the night.

But these new technologies were only available in towns and cities and that was the start of the urban / rural broadband gap. Over the years both technologies got faster. In most big cities it became routine to be able to buy DSL at speeds up to 15 Mbps, a nice improvement over the first generation. But cable modems improved even more and over the last decade became capable of speeds much faster than DSL.

What I found odd was that for the longest time the cable companies didn’t take advantage of their extra capabilities. They offered cable modem speeds that were just slightly faster than DSL. I can remember the CEO of Comcast telling people that they would supply the speed that people ‘needed’. But even at 15 Mbps the speeds were 250 times faster than the dial-up that many people rural people were still stuck with.

But over the last five years the cable companies woke up and started unilaterally raising speeds to be faster than DSL, and in doing so they started capturing the vast majority of the market. It was hard to justify staying on 6 Mbps DSL if you could get a 25 Mbps cable modem for the same price. The cable companies have generally offered speeds over the last five years up to 100 Mbps, although the vast majority of urban customers have opted for something slower. But even 25 Mbps is 450 times faster than dial-up.

Not all rural people have had dial-up as their only option. There have been several satellite companies that offered faster speeds, but the service was really expensive and there was so much latency in the signal that a lot of things other people could do on the Internet are not possible on a satellite connection. So a lot of rural people still use dial-up – or often just go without a connection – because on today’s web, dial-up can do little more than read emails.

In the last year or so the cable companies have really kicked it up a notch and they clearly now are competing with speed – probably as a way to fight off having somebody else build fiber. Late last year Comcast doubled the speed on my home connection from 50 Mbps to 100 Mbps, an eye-opening 1,800 times faster than dial-up.

And the cable companies aren’t finished. They are now talking about upgrading to DOCSIS 3.1 which will enable them to offer speeds up to a gigabit. But that is not the real news concerning the new technology, because Comcast says that they plan to increase speeds across the board again. So my 100 Mbps connection might become 150 Mbps to 200 Mbps. Or 3,500 times the speed of dial-up.

But there are cities that are really lucky and which have widespread gigabit speeds. Google and a few others are using fiber to provide a real competitor to cable modems. And customers on a gigabit are nearly 18,000 times faster than dial-up.

So rural folks with no broadband alternative have seen the people in the towns and cities around them climb over time from 20 times faster up to many thousands of times faster. I really don’t think most urban people understand how colossally terrible it is to be on dial-up. They remember all of the things that they could do on dial-up in the 90s and they don’t stop to think how the whole web has migrated to video. Imagine trying to look at Facebook or Pinterest or any other popular site on dial-up, or even on 1 Mbps rural DSL and you can quickly understand why rural areas are getting desperate and are willing to do almost anything to get faster broadband.

Telecommuting and Broadband

BeetleI was looking into telecommuting and ran across a large survey done last year by FlexJobs that asked how people feel about telecommuting. As somebody who telecommutes (CCG is a virtual company and we all work at home) the results are not surprising.

The survey showed that over half of workers said that they could be most productive at home and this is where they would go to work on important projects. They cited the major reasons as fewer distractions, minimal office politics, reduced stress and a more comfortable environment.

Less than a quarter of employees thought they were most productive at an office. (When CCG went virtual we had one person who said they could not be productive in the home environment, and it’s important to recognize that telecommuting isn’t for everybody)

Interestingly, a third of the respondents thought that telecommuting was better for their health. Avoiding the stress of commuting, being able to eat their preferred diet and the flexibility to more easily make medical appointments all contribute to this.

OnlineMBA.com has put up some substantial information on telecommuting. Some of the more important points they make about the topic include:

  • A Stanford study shows that home-based customer service reps are 13% more efficient than those that work in a call center.
  • Another study by the University of Texas showed that telecommuters worked an average of 5 – 7 hours more per week than office-based employees.
  • Telecommuting can reduce turnover. 73% of telecommuters report being happy with their jobs as compared to 63% for office workers.
  • A Penn State study showed that telecommuters feel more valued. They feel less stress and they show gratitude for the flexibility they are given.
  • The Consumers Electronics Association calculated that telecommuting in 2013 saved enough energy to power one million homes. I’m always a bit leery of such calculations, but there is no doubt that saving on commuting is a huge benefit for society. And it’s also not bad for employees as can be witnessed by my two-and-a-half year old truck that has only 10,000 miles on the odometer.
  • Several studies have shown that employers save considerable money from allowing telecommuting and it’s been calculated in a few studies that the cost of housing an employee at the typical office costs between $10,000 and $15,000 per year. And employees who telecommute save on commuting costs, lunches and attire for the office.

Finally, Global Workplace Analytics analyzed over 4,000 studies on telecommuting and reported the following:

  • 2/3 of people would like to work at home.
  • 36% of employees would choose telecommuting over a pay raise.
  • A survey of 1,500 technology professionals showed that 37% would take a 10% pay cut to be able to work at home.
  • 14% of Americans have changed jobs to shorten commute times.
  • Almost half of employees feel that their commute is getting worse.
  • 78% of employees that call in sick really aren’t. Unscheduled absences cost employers $300 billion per year.
  • Sun Microsystems says that telecommuting employees spend 60% of the saved commuting time working for the company.
  • A number of companies report that telecommuting reduces discrimination and lets people be judged by what they do instead of what they look like.
  • And my favorite – telecommuting cuts down on wasted meetings. Web meetings tend to be better organized and shorter.

This is only a partial list of the benefits and there have been numerous studies from companies that have introduced telecommuting. But one thing is true for every telecommuter – they must have adequate home broadband. Communities without good broadband are missing out on the great benefits from telecommuting.

CenturyLink Announces Data Cap Trials

centuryLinkIn a move that probably surprises nobody, CenturyLink said that they are going to start trials of data caps later this year. This was mentioned by Stewart Ewing, the company’s chief financial officer, during the last quarterly investor call.

I have to say that I am disappointed by the announcement because I guess part of me hoped that CenturyLink was somehow different than the rest of the giant ISPs. After all, they started out as a regional independent telephone company that did the right thing for customers far more often than not.

But this announcement clearly shows that they now think like a duopolist, and that they really won’t fully compete against the big cable companies. CenturyLink is in the process of building a significant amount of last mile fiber and they say they will pass over 700,000 homes by the end of this year. I was just in Tacoma where CenturyLink has already overbuilt fiber to a large portion of the city and it looks like they are doing just what they promised.

CenturyLink (and formerly Qwest) has fared extremely poorly with their DSL product in major markets. The cable companies have largely won the broadband battles in the cities and have the lion’s share of broadband customers. And now that the cable companies like Comcast are really stepping up the speeds they offer, one has to think that urban DSL has to be in its dying days. It’s hard to imagine customers that will pay for a DSL connection that can get 15 Mbps or a lot less when for the same price they can get something far faster from the cable company.

So now CenturyLink is building fiber and this puts them back in the game and ahead of the cable companies again. One would think that CenturyLink would take advantage of Comcast’s data caps and advertise against them as a way to win quick market share. After all, once they have sunk money into a new fiber network, profitability becomes all about gaining as many customers as possible.

But instead CenturyLink is acting like a duopolist and will probably match Comcast’s data caps. I know that they will claim that this is only a trial of data caps, which is the same thing that Comcast is saying. But the lure of the extra revenues from data caps is just too attractive to all the big carriers.

Unfortunately, the big telcos and cable companies are almost all publicly traded companies. As such they are under tremendous pressure from Wall Street to show increased revenues and increased earnings year after year and quarter after quarter. This is getting harder and harder for these companies to do. For the last decade the big carriers have thrived from the ever-growing number of broadband customers. But it appears that overall growth of broadband customers is nearing an end. Several recent polls suggest that everybody that can afford broadband now has it. There is only a small percentage of households that don’t want broadband, but everybody else either has it or can’t afford it at the big company prices.

And so if broadband customers aren’t going to keep growing, and if cable TV and telephone customers are falling, then a big ISP only has a few places to go for revenue to continue to please Wall Street. Comcast is exploring a few new areas such as selling security, home automation and even cellular service. But it’s hard to think that those revenues will be enough to replace the torrid historical pace of broadband revenues and margins gained over the last decade. This means that the only realistic place for future revenue growth has to be from broadband.

That means raising the broadband rates every year, but it also means implementing tight data caps to be able to penalize people who actually use the broadband they buy. It’s clear that this is where Comcast is headed. A part of me hoped that companies like CenturyLink would not drink the same kool-aid and that they might just be happy taking the many disgruntled customers from the cable companies. But I guess that any duopolist has a hard time not doing what comes naturally. I fear we will have cities that finally have what everybody has always hoped for – a fast cable network competing against a fiber network – and yet there still will not be any real price competition.

Highlights from the NTCA PPP Panel

ppp_logoI was just on a panel at the NTCA Spring Convention looking at the topic of Public Private Partnerships (PPPs). The audience was mostly independent telephone companies and cooperatives. I was one the panel with Curtis Dean of Smart Source Consulting, and Dan Olsen and Ben Humphrey of Finley Engineering. Together this particular group has a lot of day-to-day operational experience working with or for municipal telecom companies.  Following are a few of the major points made during the presentation and the follow-up questions:

Cities are Different. Cities don’t think the same way as commercial companies. They have different goals. They have a number of issues that make working with them a challenge such as slow decision making, open records laws, public purchasing practice, and of course, politics. They even have a different idea of what a successful venture looks like and any business that can cover costs and not need a subsidy is considered successful.

A Good Partnership Can be Harder to Maintain than a Good Marriage. In general, it’s hard to find a good partner, commercial or municipal, that you will feel comfortable with working over a long period of time. The recommendation was to take the time up front to ask the right questions to make sure that you understand the differences in working with a city, and to figure out an operating structure that will let both sides be comfortable with the differences over many years.

Don’t be Afraid of PPPs. There is no reason to be afraid of PPPs. There are numerous examples of successful PPPs already in existence and the parties in those ventures found ways to make it work. While cities and commercial companies are very different, if you do the hard work up front in creating a sustainable partnership it can work.

Shield a PPP from Politics. Probably one of the most harmful things that can happen in a PPP is for politics to influence decision-making after it’s up and running. You need to find a governance structure that isolates the business to some extent from direct political interference. A PPP should not require government approval to raise rates or to make operational changes needed in the business.

Have an Exit Plan. One thing that is often missing in the creation of a PPP (and in the creation of commercial partnerships as well) is for both sides to have an exit strategy. When negotiating a new partnership the two sides should always talk about what happens if things go south, and the contractual arrangement should allow both partners a way out of the partnership if it isn’t working for them.

Rural America is Growing Desperate for Broadband. Towns that don’t have great broadband today are seeing a huge gulf opening between them and neighboring towns that have good broadband. Cities are growing fearful that without broadband they will lose jobs, lose population as kids move elsewhere for work and will not attract new housing or businesses. Broadband has grown from something that is nice to have to an economic necessity and places without broadband are fearful that their towns will become irrelevant and disappear.

Municipalities Need to Put Skin in the Game. Cities are waking up to the fact that in order to get the broadband they want that they are are going to have to help pay for it. The numerous RFPs that are asking somebody to show up and build broadband are falling on deaf ears and they are realizing that they are competing against tens of thousands of other cities in the same situation and with the same need. Cities and citizens are getting more willing to put taxpayer money into the pot to find a good broadband solution. And municipal money can make it easier for a commercial partner to make the desired returns.

Seek Help. If you are considering a PPP, then seek advice from those that have already done this right. There are many things that can wrong, and no partnership is assured of long-term success or harmony. It’s worth the extra time and cost up front to make sure that you are not making one of the fatal mistakes that will be a problem five years down the line.

Starry Shooting for Wireless Last Mile

StarryChet Kanojia, the man behind Aereo, is back with another industry play. He has founded Starry, a company that promises to deliver very fast internet speeds – up to a gigabit – wirelessly. Where his last play took on cable TV competition, he is now going after broadband providers.

Starry intends to tackle this by combining multiple frequencies to provide a direct link between a customer and a tower. It’s a really intriguing idea, but I can think of a number of challenges the company has to overcome:

  • This is going to require a complicated antenna array capable of receiving a bunch of different frequencies. But so did Aereo, although this is lot more complicated.
  • The company says it will be using ‘millimeter’ frequencies and short frequencies don’t travel very far. The company says they will need to have towers that are no more than a kilometer apart, and to support this kind of bandwidth those towers will need to be fiber fed. That sounds like a challenge in a world where people fight against new towers. But this might work well in a downtown with plenty of highrises to use as transmitter locations. Starry says they are shooting to cover 20% of the public and that infers only bringing service to major metropolitan areas.
  • Those kinds of frequencies and bandwidth don’t travel well through walls or much of anything else. The Starry website shows their receiver will sit in a window. These kinds of frequencies will require a direct line-of-sight and in an urban area that can get problematic since it’s easy for a building to be in a radio ‘shadow’ if there is another building between it and the tower. Starry is going to rely on customer self-installation and I foresee a number of customers who go through the process only to find out that they can’t see the transmitter. Rooftop outdoor antennas would enable a lot more customers to get service, but would also require a fleet of technicians.
  • Distance really matters with very high frequencies and a customer close to a tower will be able to get much faster speeds than one only a relatively short distance further away (like a quarter-mile).

This is obviously only an urban solution because the network needs multiple fiber-fed transmitters. The first market is going to be Boston. The company says that they will sell broadband for significantly less than the competition but has not yet announced the pricing. The company will require customers to buy a $350 proprietary router that enables the technology. Their only product for now is broadband so this is going to be aimed at those who want a lot of speed and aren’t dependent on the cable company bundle for cable TV. If they can make this work they ought to get a lot of interest.

I saw a few other articles about Starry that worried that their would be regulatory pushback from the cable companies. But as long as Starry uses frequencies in ways that the FCC has approved, then there doesn’t seem to be any potential way to push back against this. Their biggest regulatory hurdle will be getting cities to agree to the many needed towers, but there are no state or federal rules that I can think of that can be used to stop such a wireless deployment. The country is already full of WISPs and they are relatively free to deploy wherever they want.

The company has some significant financial backers including FirstMark Capital and Barry Diller’s IAC, Tiger Global, KKR, HLVP and Quantum Strategic Partners. So certainly they have convinced those investors that the technology works. The concerns I listed above are mostly about deployment and if the company can find a make this easy to use for enough customers then they might have something.

Certainly nobody is going to be upset (other than the cable companies) to see another broadband competitor in urban markets. It’s something the country badly needs. We have entered an era where the big ISPs are competing on speed but not on price. In fact, the introduction of data caps is threatening to jack up the prices a lot more for large data users. It would be good to see a low cost alternative as a way to bring some price competition into the market.

Broadband CPNI?

FCC_New_LogoA group of consumer and privacy groups has asked the FCC to begin enforcing customer privacy rules. In the industry this process is called CPNI (customer proprietary network information) when applied to telephone and cable TV.

Now that the FCC has classified broadband as a common carrier service, they have the authority to investigate and regulate broadband privacy issues. This is something that the industry needs. Until now there has been very limited regulation of broadband by the Federal Trade Commission since the FTC authority was drawn only from the Children’s Online Privacy Act. But the FCC now has much stronger authority.

Current CPNI rules for telephone and cable TV are focused to a large degree on billing issues and on protecting private data like social security numbers, credit card numbers or other sensitive customer information. There is also a prohibition against disclosing the details of what customers do with those services – such as the calls they make or the channels they watch. (Of course, I guess we now know that the NSA is immune from the obligation to protect telephone records).

As sensitive as privacy matters are in those areas there are larger concerns with broadband. What people do online is extremely personal and the vast majority of Americans think that details of their online life should not be recorded or sold to others.

There are a whole lot of places that the FCC could go with broadband CPNI over and above the normal protections of billing data. For example, what are the obligations of companies to notify people when there has been a data breach and customer information has been compromised? Should ISPs have to disclose to customers if they use their data for any purposes or sell it to others in any form? And if so, how much do companies have to disclose?

An ISP is in very powerful position with a customer. If they wish to record what a customer does online they know everything that the customer isn’t somehow encrypted. They are the first in line to see outgoing bits and the only one to see all of the incoming bits.

The FCC has already started some internal work on the topic and held a workshop. From there the FCC has a number of options. They can first solicit comment and ideas from the public to see what kinds of sentiments are out there. It seems for almost everything the FCC does there are two sides of opinion, and there will be those that are in favor of very strong rules and those in favor of a very light touch. But the FCC would do well to hear all of these opinions before trying to formulate specific rules.

But they do have the option to go straight to a rulemaking. They could propose specific CPNI rules and let everybody take pot shots at them. I’m suspecting that for something this new and different that they are going to want to hear all sides of the arguments first before developing rules. The FCC also might be slow-rolling this. The whole Title II regulatory process is under appeal in the courts and they might not want to go too far down any path until they feel more secure that the courts believe they have the authority to regulate broadband in this manner.

One thing that we can probably expect from the FCC is that whatever they do is going to apply to ISPs but not to what they call edge providers. That would be all of the companies like Google and Facebook that operate on the web and that are not under the Title II regulatory regime. I know that consumer groups are going to want that kind of protection because I think it’s generally assumed that it’s the edge providers – and not the ISPs – that are using and misusing people’s data today.

Video and Cable TV Trends

television-sony-en-casa-de-mis-padresFrom time to time I make a list of the current trends in the various industry segments. It’s really interesting to read the old ones from time to time, and in the cable world trends from a decade ago seem almost quaint in today’s topsy-turvy cable market. There are few industries anywhere that are seeing as much disruption as cable TV. Here are what I see as the current trends:

Live Viewing is Fading. The amount of time watching live TV as it is broadcast is dropping dramatically. Nielsen reported that in the fourth quarter of last year that the percentage of people watching TV live had dropped nearly 12% over earlier last year. People are watching other content like Netflix, or are watching television on a delayed basis using TV Anywhere, DVRs or a service like Hulu. This is playing havoc with figuring out ratings, but is of even more concern to TV advertisers who are losing viewers in droves.

Migration to Skinny Packages. A very recent trend is skinny bundles – a much smaller lineup of the most popular channels that people want to watch. This got started last year by Sling TV, but every major television provider is jumping on the bandwagon. Verizon FiOS reported that a majority of the customers they signed up in the fourth quarter of 2015 chose the skinny bundle over the larger traditional bundles. Comcast is also trialing a skinny bundle and everybody is scrambling to get one. These bundles are of huge concern to the programmers because it means that cable companies and customers only want to watch and pay for the most popular channels and not for the other hundreds of channels in the typical big cable bundle.

Original Content is Exploding. It seems that almost anybody even marginally related to the content industry is now producing original content. It’s almost getting easier to list who isn’t making content than it is to list the many that are. Original content is being created for several reasons. First are the obvious financial gains and it’s easy to see how original content benefited Netflix and AMC. But secondly, this is part of the race to survive and be relevant in the future. The general wisdom is that original content is what will attract viewers and keep people coming to a given platform.

Popularity of OTT Content. We were all amazed a decade ago to watch the wild popularity of the iPod and how Apple had captured the music market. But OTT providers like Netflix, Hulu, Amazon Prime have done even better and it’s been reported that over 60% of households now buy a monthly subscription to at least one of these OTT services. I can’t remember this being on anybody’s list of predictions ten years ago. If OTT grows much more there will be more OTT subscribers than cable subscribers.

Continuing Programming Rate Increases. Programmers keep increasing rates at a torrid pace, even as it’s becoming obvious that price is one of the primary drivers of cord cutting and cord shaving. Many of my clients report annual cost increases of 12% or more, and in recent years this has averaged over 9% per year. Interestingly, a lot of the programmers don’t seem to care how this affects the US market because many of them are selling massive amounts of new content overseas. But any network that is US-centric (like ESPN) has to be worried since they are now losing customers.

Video Going Mobile. There is a huge amount of content being shown on smartphones, including a lot of content created just for the medium. This is causing all sorts of disruptions. Cell companies are having a hard time keeping up with broadband demands at busy cell sites. Cellular providers have devised zero-ratings plans to excuse some video content from rate caps, which is sure to be challenged as a violation of net neutrality. And while customer data use is increasing, AT&T and Verizon don’t seem to have any plans to loosen the existing tight data caps.

Viewer Age Really Matters. There is a growing and significant disparity between the viewing habits of the various generations. The younger a viewer the more likely it is that they have eschewed traditional cable packages and conventional ways of viewing content. This is of major concern for advertisers, but also for content providers. For example, the average age of a viewer of various network TV programs keeps climbing and it appears that the age of the average viewer of network TV is sixty years old, or older.

Cord Cutting Not as Bad as Advertised. Last year it was impossible to read about the industry without seeing a mention of cord cutters. But the best estimates are that this is about 6% of viewers, and – while growing – it is not nearly the threat that was advertised. It seems more likely that cord shaving (downsizing the size of cable packages or migrating to skinny bundles) is much more of a trend, but big cable companies are remaining mute about the changing nature of their customer base.

I will be speaking this Sunday

NTCAat the NTCA Convention at Lake Buena Vista here in Florida. I’ll be part of a panel with two sessions on Sunday talking about Public Private Partnerships.  If you’ll be there give me a yell. I’m open to chat on Monday and you can reach me on my cell phone at 202 255-7689.

Using City Conduits and Fiber

innerduraFuturePathGroupI’ve seen a number of cities enact ordinances that require that empty conduit, or even conduit with fiber be put into open trenches. Some of these ordinances even insist that carriers use these assets rather than dig up the streets to put in new fiber. I can understand where the cities are coming from that do this. They are running out of underground rights-of-way in many places. Inevitably when somebody builds a new underground utility they end up cutting and disrupting the existing utilities. Cities also are getting tired of seeing the streets dug up over and over again to put in more fiber and streets are often not restored to their original condition after fiber construction.

But these city assets are not always as valued by carriers as much as cities might hope. Consider conduit. Having empty conduit can save the most expensive part of the cost of constructing a new fiber network. Trenching to install fiber under streets is incredibly expensive. But having empty conduit is of no use to a carrier unless there is access into and out of the fiber where carriers need it.

City-built conduit is probably very useful for a carrier that wants to build a fiber ring, But if a carrier is building fiber-to-the-home they need a lot of access to the fiber and want to have fiber splices multiple times per city block. They will want a handhold or some other way to tap into the fiber in the conduits wherever they have a customer. If conduit is just laid in the trenches without these multiple access points, then it is of limited use for a fiber-to-the-home system. Unfortunately, putting conduit with many handholds is a lot more expensive for a city compared to just dropping empty conduit into trenches when they are open.

Carriers have many more issues when it comes to sharing city fiber. Carriers share fiber all of the time. You can find examples in almost every sizable city where carriers have gone together to build fiber. They either band together to pay for a new fiber route, or else one carrier builds a route and then sells or leases dark fibers to other carriers.

So if this is a common occurrence, what is wrong with a city offering shared fiber? The big difference is that with private fiber somebody is clearly in charge. There is generally only one carrier that has actual physical access to the fiber, and this is done to help guarantee network integrity. Carriers love the idea of sharing the cost of building fiber, but they are uninterested in sharing fibers in a situation where they feel there aren’t iron-clad network controls on who has or doesn’t have access to the fiber.

Carriers have learned over the years through painful experience that when multiple companies can get access into fiber that bad things are eventually going to happen. Some technician is going to snip the wrong pair of fiber to make a splice, or in the worst case some renegade technician is going to sabotage a competitor. This is clearly a case where too many cooks will spoil the pot. For these reasons carriers are very careful about who they will share fiber with. I’ve seen carriers build second, duplicative routes rather than share fiber with somebody they don’t trust.

When carriers share fiber the sharing is accompanied by thick contracts that clearly define the rights and obligations of all of the parties involved in the sharing. There are almost always a guarantee for the quality of service on the shared fiber, expressed in terms of the maximum amount of downtime that can be expected – and this guarantee is generally backed-up by specified cash damages.

But governments don’t do that. When cities share fiber there are very few rules about how that is going to work. I can’t think of a carrier that would consider using a fiber without the accompanying controls on quality and integrity. Nobody wants to be on a fiber they don’t control and for which there are no guarantees of up-time or guarantees about how quickly outages will be fixed.

Before enacting these kinds of ordinances the city ought to have a long discussion with the existing carriers in their city. There are probably ways to make what they have in mind work. But to do so would probably mean partnering somehow with a carrier who would then act as the master controller of the fiber network.

If cities insist on forcing carriers to use city-provided conduit or fiber, they are going to be surprised when carriers don’t seem very interested. My fear is that there are a lot of city-built conduit and fiber that is going to end up like that bridge in Alaska that went nowhere. If a city builds builds something that carriers don’t want , then they have built something that might never be used.

How We Wire Our Homes

Phone jackOver the years builders have changed the way that they wire homes for communications. A good telco guy can tell you approximately how old a home is just be seeing how it was wired. I’ve noticed a recent change in wiring that reflects current homeowner preferences.

There was a time not too many decades ago when the telephone company and the cable company owned the wire inside of homes. I recall that sometime in the 80s the FCC gave ownership of inside telephone wire to homeowners, and they did the same for cable TV wiring in the mid-90s. Before that time builders did not typically put wires in new homes and the telcos and cable companies were expected to come and put the wire in at their cost. I recall that in some cases the telco or cable company would come and install wiring while a home was under construction, particularly in new subdivisions.

But after the FCC gave the wires to homeowners this all changed. The telco or cable company would still install wiring, but only after a customer asked for it, and typically by stringing the wires along baseboards, and usually for a fee. Since people wanted the wires hidden inside the walls, builders began offering wiring as an option. And over time this grew from option to an expectation. There was a twenty year period where a builder just routinely wired a home for telephone and cable and they generally put outlets all over a new home.

Back in the late 90s when cable modems and DSL became popular many builders started providing an option to wire homes with category 5 cables for broadband. And in upscale homes this soon became a standard feature.

What is interesting over the years was the assumption of how homes ought to be wired. For instance, in the old days Ma Bell assumed that a house wanted one telephone and would put it where it was requested. Those old phones didn’t have jacks and the phones were hard-wired into a big thick telephone cable. The cable company was similar and for many years they assumed homes needed one cable outlet, generally in the living room. If customers wanted more than that they had to pay for it.

At the other end of the spectrum, a home build in 2000 probably had phone jacks and cable outlets all over the house. The way that people used communications had changed a lot from the 60s and people wanted option on where to place phones and TVs.

Today we are moving back to seeing wiring as an option again. Less than 50% of homes in the US have telephones and builders don’t want to spend money for telephone wiring if it’s not needed, so homes are not automatically being wired for phone any longer. My home was built 4 years ago and it has one phone jack in the kitchen wall, and that jack is not even wired to a telephone cable. I guess it’s there to make it easier to put in phone if I want it.

In the data and TV worlds we’ve seen a big shift to using WiFi in the last few years. And that is making it obsolete to wire a  home with category 5 cable because the day of hard-wiring computers is gone. We have three apple laptops in our house that don’t even have an RJ411 jack. And our one desktop connects wirelessly. Most homes are still wired with coaxial cable, although in looking online I can find builders who are now making this optional. My home is wired with coax, but we don’t use it.

Fiber overbuilders are now using category 6 wire because category 5 wire is not adequate for gigabit speeds. It’s interesting that almost no homes are wired today for gigabit capabilities. The ideal set-up for a home would be category 6 wiring to the primary WiFi router and then more category 6 wiring to the ends of the home allowing for easy installation of additional networked WiFi routers. I’ve written several blogs talking about how a single WiFi router is already inadequate for a large percentage of homes.

It’s probably going to take builders a while to catch onto this because carriers are just now figuring it out. I talked to the engineers at one of the mid-major cable companies who estimated that 20% of their customers wanted more capacity than can be supplied by a single WiFi router, and that problem is going to quickly mushroom. We are only a few years away from when the networked WiFi routers will become the standard, and, if done right ought to be able to handle our home bandwidth needs for decades to come. And in doing so, pre-wiring homes will become a thing of the past.