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Current News The Industry

The State of the Internet

The Mozilla Internet Health Report is packed with interesting statistics about the state of the Internet. Reports like this one remind us that broadband is a worldwide issue that is much larger than the US broadband industry I write about every day.

The report contains a lot of interesting facts:

  • A little more than half of the planet is still not connected to the Internet. As a planet, we still have a long way to go. While the largest percentage of a region still not online is in Africa, by sheer numbers, most of those still not connected are in Asia.
  • Worldwide, men are 21% more likely to be online than women.
  • Much of the world connects to broadband through cellphones, and the cost of broadband is a huge issue in many parts of the world. In Middle Africa, a gigabit of cellular broadband costs almost 12% of the average monthly income. In Western Africa, it’s over 8% and in Eastern Africa, it’s over 7.4%. Closer to home in Central America it’s 4%.
  • Much of the world can’t afford smartphones. For example, in Sierra Leone it takes six months of an average salary to buy a smartphone. In India it takes 63 days of the average salary.
  • Seven of the top ten largest companies in the world, by market capitalization, are Internet companies – Apple, Microsoft, Amazon, Alphabet (Google), Facebook, Tencent, and Alibaba.
  • Five of those companies – Amazon, Microsoft, Alibaba, Google, and Tencent – control 80% of all of the cloud traffic in the world, meaning that most other web applications run through these companies.
  • Four of the top six social media platforms, in terms of users are owned by Facebook – Facebook, WhatsApp, Facebook Messenger, and Instagram.

The report also contains many stories about some of the negative aspects of the web. A few include:

  • The states of Rakhine and Chin in Myanmar have been blacked out from Internet access for over a year. Governments routinely block Internet access as a way to punish or control people. In addition to these two places, there was at least one other place in the world with blocked access every day in 2020.
  • 2020 might go down as the year when Internet disinformation was weaponized with governments all over the world using social media to spread propaganda.
  • The pandemic magnified the extent of the digital divide across the world. In many parts of the world, the education systems have effectively shut down for rural and poor urban students.
  • Government data has been hacked. A good example is a hack in Chile where over 19 gigabytes of citizen data including passwords and personal identifying data was stolen.
  • There are practically no binding guidelines anywhere in the world that set limits or define ethics for the newly developing artificial intelligence technology.

Of course, there are also positive things happening with the Internet:

  • In the US and Europe, there is a major push to tackle antitrust abuses by the largest web companies.
  • Europe is leading the world, but others are catching up in creating rules to enforce consumer privacy.

It’s easy to forget that the web only became a real thing in the mid-1990s. While there are clear problems associated with the web, it’s also amazing that in a little over 25 years we’ve connected half of the people on the planet.

Categories
Current News The Industry

The Need for Training Telecom Technicians

Eleven different industry trade associations have written a joint letter to Congress and the new administration asking that any new infrastructure funding include training for telecom technicians. I can’t recall a time when so many associations aligned like this on any issue.

The letter included support from the Competitive Carriers Association (CCA), the Fiber Broadband Association (FBA), INCOMPAS, NATE: The Communications Infrastructure Contractors Association, NTCA – The Rural Broadband Association, Power & Communication Contractors Association (PCCA), the Telecommunications Industry Association, USTelecom – The Broadband Association, the Wireless Infrastructure Association (WIA), the Wireless Internet Service Providers Association (WISPA), and the CTIA.

The letter says that the industry expects to create 850,000 new technician jobs by 2025 to support wireline and wireless deployments. To put that number into perspective, the industry currently employees 672,000 technicians with an average salary of $77,500. The industries also collectively expect to add another 2.1 million jobs to support the new industries like 5G and new fiber ISPs.

The associations are asking for the federal government to expand existing apprenticeship programs and create new ones that combine class learning along with field experience. There are some such programs in the country, but nearly enough to handle the upcoming needs of the telecom industry. To letter asks that in order to promote diversity that training programs be established at Historically Black Colleges and Universities and Tribal Colleges and Universities along with community colleges, public universities, and other institutions.

The industries suggest that training institutions form public/private partnerships with the industry to help develop the programs in a timely manner and to make sure that training is covering state-of-the-art technologies and techniques.

We are not currently prepared to double the number of fiber technicians – but we’re going to have to find a way to do it. There are some formal training programs for fiber technicians, mostly being done by trade schools or technical colleges that sponsor apprenticeship like the CFOT or CPCT certification process sponsored by the Fiber Optic Association. But the majority of fiber technicians today are trained on the job with new employees starting as hands-on journeymen.

I’ve written about this issue before. We’re facing a shortage of technicians for several reasons. First, the large telcos have been downsizing technician workforces for the last two decades, meaning they did not train a lot of new technicians. These big ISPs have historically been the primary drivers for training new technicians. Unfortunately, this also means that a lot of the technician workforce are baby boomers who are now retiring, causing additional shortages.

We must find a way to make this happen or the wireless and broadband industries will be forced to cut back on expansion plans. We’ve been building fiber and new small cell sites at a furious pace for the last few years and are likely to continue to do so as long as we have the technicians needed to construct the new networks and to maintain them after they are built. Fiber and wireless technicians are the kinds of solid middle-class jobs our economy needs and hopefully, we can kick training programs into high gear in a hurry.

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Regulation - What is it Good For? The Industry

Another Idea for Federal Broadband Funding

It’s obvious that we need better broadband in the country, and much of that broadband is in rural places that are going to require financial assistance to build. The new White House and Congress are finally talking about the need for an infrastructure package that will create jobs and that will build rural broadband along with fixing roads and bridges. However, deficit hawks worry that too much spending will increase the deficit to an unsupportable level.

There is an idea from our past that can build better broadband while not increasing the permanent deficit. As a nation, we solved a similar problem when we figured out a way to bring electricity to everybody in the country. The challenge of bringing broadband to everybody is amazingly similar to what happened with electrification.

Franklin D. Roosevelt campaigned on the issue during his 1932 presidential campaign, and after he won, he worked with Congress to create the Rural Electrification Administration (REA). Rather than the government directly funding electric infrastructure, the REA offered 30-year loans to electric cooperatives to electrify rural America. Citizens from all over the country came together and formed cooperatives, borrowed the federal money, and electric grids sprang to life all over rural America.

There is no reason this same idea can’t work for rural broadband. The challenge is nearly identical. The best long-term infrastructure solution for broadband is fiber. Fiber provides enough broadband capacity to meet the needs of homes today and will meet broadband needs decades from now. No other technology can scale to the needed bandwidth demands over the next century.

The basic funding method used for electrification still makes sense, as does the idea of doing this through cooperatives. Cooperatives owned by the customers are willing to take on the long-term debt needed to make this work. Cooperatives are largely non-profits since any profits generated by the business must be rolled back into the business. It makes far less sense for the government to subsidize the giant for-profits ISPs like AT&T, CenturyLink, or Frontier – those big companies care about the bottom line and are not willing to operate a business with slim margins. We’ve seen these companies in the past improve rural profitability by cutting back on staff and maintenance.  That’s not the kind of stewards we want operating rural broadband networks for the next hundred years.

There are a few differences between now and the 1930s that we have to recognize. There has been a lot of years of inflation since 1932 and it doesn’t look feasible in many cases to build broadband networks and repay the money with 30-year loans, even at low interest rates. A new program would need to consider longer loans like 40 years, and maybe even 50 years. There is no reason a coop wouldn’t accept longer loans if it means getting fiber broadband. It’s also likely that in the highest-cost places that there would have to be some grant funding to accompany the loans.

These loans could go almost immediately to existing telephone and electric cooperatives. In areas where there are no cooperatives, or where the existing cooperatives don’t want to tackle broadband, the government could help with the formation of new cooperatives, just like they did in the 1930s. I’ve been working in rural areas all over the country and I can’t think of a community that would not be excited about this idea.

One of the best features of this plan is that most of the money spent by the government is in the form of loans that will get repaid. That means that the expansion of broadband doesn’t have to be a big burden on the taxpayer.

There are some obstacles to overcome to make this work – but mostly it just requires the will of the White House and Congress to solve the rural digital divide. There will be lobbyists from all of the big ISPs moaning about how this unfairly competes with the private sector. That argument falls apart quickly when you visit a rural county and can’t find even one rural home that has broadband speeds of 10/1 Mbps. The big companies have completely failed rural America and their lobbyists must be ignored.

There will also be a lot of silly discussions about which rural places should be eligible for this money – and those discussions will be couched in terms of talking about the number of homes that have access to broadband speeds of 25/3 Mbps. These speed discussions are a red herring because urban residents have access to far faster broadband. In the 2020 broadband report to Congress, the FCC said that 82% of homes already have access to broadband speeds of 250/25 Mbps. Hopefully, policymakers will agree that rural broadband ought to be as good as urban broadband and that we can stop using speed thresholds – everybody in America deserve good broadband.

Funding cooperatives should not be the only government solution because the solution won’t work everywhere for everybody that needs better broadband. But I can’t think of any reason why the this shouldn’t be part of the solution.

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The Industry

States Get Serious About Broadband Funding

One of the consequences of the pandemic is that states are getting a lot more serious about funding broadband solutions, as evidenced by recently announced proposals to increase state funding for broadband in 2021. I’ve seen proposals from states of more than $2 billion in new funding. These are newly proposed funding amounts that don’t include money already allocated for existing state broadband grant programs.

Few of these proposals are a done deal – most have been suggested by governors or legislators and still must go through the legislative process. But even at the proposal level, this is a far greater amount of state broadband funding than anything we’ve seen in the past and reflects the serious nature of the rural broadband divide. Politicians at all levels are being assailed by people who have struggled through the pandemic due to a lack of broadband. Every governor recognizes the huge economic downside from a failed education system or from businesses crippled when employees can’t work from home. I see these state proposals as a cry for help to solve broadband gaps.

Here is the list I’ve assembled. I’m sure there are other states I’ve missed or states that have not yet announced plans for new 2021 broadband funding. If anybody knows of other proposals, please leave in the comments to this blog.

  • Iowa – $450 million over 3 years
  • Ohio – $250 million
  • Tennessee – $200 million
  • Wisconsin – $200 million
  • West Virginia – $150 million
  • Oregon – $118 million
  • Indiana – $100 million
  • South Dakota – $100 million over 5 years
  • Kentucky – $50 million
  • Minnesota – $50 million
  • Utah – $50 million
  • Washington – $45 million
  • Arizona – $43.1 million
  • Nebraska – $40 million
  • Idaho – $35 million
  • Arkansas – $30 million
  • North Carolina – $30 million
  • South Carolina – $30 million
  • Georgia – $20 million
  • Vermont – $20 million
  • Virginia – 15 million
  • New Mexico – $10 million
  • Missouri – $5 million
  • Maine – $1.8 million

One of the best things about this list is that money is being allocated to broadband in both red and blue states. Broadband should not be a partisan issue, although there are only a few state legislatures where it is. In most states, practically every rural politician is desperate to solve the rural digital divide, and broadband funding bills get bipartisan support.

This funding augments any federal grants. That includes the $9.2 billion that was recently announced at the end of the RDOF grants, $1 billion recently allocated for Tribal areas, and $300 million provided by the NTIA for grants.

While $2 billion might sound like a huge amount of money, it is just a start to permanently solve the rural broadband gap. This article from the Alabama Daily News describes a statewide study done by CTC Technology and Energy that estimates that it will cost between $4 billion and $6 billion to build fiber to all underserved areas of Alabama. I’ve also seen estimates nationwide that vary between $60 billion and $100 billion.

States are clearly saying that they are not going to sit around and wait for federal funding to help solve broadband gaps. Hopefully, most of these proposals make it through the legislative process – and perhaps when states see where they fall on the list above, some of them will step up the amount of funding even more.

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The Industry

Broadband Usage Explodes in Fourth Quarter of 2020

OpenVault just released its Broadband Insights Report for the 4th quarter of 2020. The report shows continued staggeringly fast growth of broadband usage in the country. The growth has been so fast that OpenVault applies the word ‘exploded’ to describe the giant increase in customer usage.

The monthly average household usage leaped to 482.6 gigabytes – which is a combination of both the upload and download usage in the average home across the whole country. It’s impossible to put that number into perspective without comparing it to the average household usage in recent quarters, as follows:

1st quarter 2018           215 Gigabytes

1st quarter 2019           274 Gigabytes

4th quarter 2019           344 Gigabytes

1st quarter 2020           403 Gigabytes

2nd quarter 2020          380 Gigabytes

3rd quarter 2020           384 Gigabytes

4th quarter 2020           483 Gigabytes

The fourth-quarter number is up 26% from the third quarter this year and up 40% from the fourth quarter of last year – the last time that usage wasn’t impacted by the pandemic. These are growth rates that network engineers can’t really grasp – how does one design a network to be ready for a 40% growth in traffic volume in a single year?

OpenVault also saw that there wasn’t a big difference between homes with data caps at 472.3 gigabytes per month and homes with unlimited usage at 496.6 gigabytes per month. You might expect homes with data caps to try to curtail usage, and the numbers show they only do so moderately.

Median usage has also grown significantly over the last year – this is the level at which 50% of homes use less broadband and 50% use more. Median broadband usage per home was 190.7 gigabytes at the end of 2019 and grew to 289 gigabytes by the end of 2020. The median usage in the US is going to remain a lot lower than the average usage due to homes with exceedingly slow rural broadband that are incapable of using a lot of data.

The number of households that are heavy users of broadband continues to explode upward. At the end of the fourth quarter, 14.1% of homes consumed more than 1 terabyte of data per month (1,000 gigabytes), up from 7.3% of homes just a year earlier. OpenVault has started also counting what they call extreme users or homes using more than 2 terabytes per month – 2.2% of all homes were extreme users at the end of 2020, up from 1% only a year earlier. There is no mystery about why Charter wants to start billing for data caps – there is a lot of money to be made from homes that use a lot of data. Looking back four and five years, and the cable companies claimed that homes that used a terabyte of data were anomalies and should pay extra. That argument loses steam when 1 out of 7 homes is routinely using more than a terabyte of data.

Of all of the statistics gathered by OpenVault, the fastest-growing category is the number of homes subscribed to a gigabit-speed service. At the end of the fourth quarter that has grown to 8.5% of all households, triple the 2.8% of homes that were buying gigabit products at the end of 2019.

Finally, the statistic that best defines broadband during the pandemic is the growth of average household upload usage each month. At the end of 2019, the average US homes uploaded 19 gigabytes of data per month. By the end of 2020 that had grown to 31 gigabytes. It’s likely that the demand for upload has grown even more than this, but huge numbers of homes report being restricted on the upload path. There are stories everywhere of homes still unable to connect to school or work servers, or home broadband connections that won’t support multiple people using the upload path at the same time.

Broadband is seasonal it’s likely that usage will drop some by the end of the second quarter in 2020 when school is out for most students. It’s going to be really interesting to see how usage changes by the end of 2021 as we hopefully leave the pandemic behind us.

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Current News The Industry

Solving the Urban Digital Divide

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We suddenly have a new way to tackle the urban digital divide. The Consolidated Appropriations Act of 2021 allocated $3.2 billion to bring broadband to homes that need it during the pandemic. Further, a recent editorial in the Washington Post suggests that we expand this program and make it permanent. I have conflicted feelings about the plan.

It’s wonderful for the federal government to finally recognize that there is a huge digital divide in urban America. The FCC has rightfully concentrated its effort on rural homes that have no broadband option, but this means there is barely any official acknowledgement that an urban digital divide even exists. Finally recognizing the issue is a great step towards starting the process of finding permanent solutions to the problem.

This feels like the absolute right solution for 2021 while we are still under the pandemic. The proposed solution would pay $50 for a home broadband connection for homes that need it. There are still millions of homes with students struggling with schooling from home and millions more were sent home to work. Broadband is also essential for the millions who have lost jobs during the pandemic. $3.2 billion will pay for broadband to 10 million homes for six months or 20 million homes for three months. I wonder if anybody even knows how many homes need broadband right now – I’m guessing it’s far more than 10 million.

But I can’t help feeling like this is a big giveaway to the biggest ISPs which are likely to claim most of this money. It’s impossible for Washington DC outsiders to understand where ideas like this came from. I’d feel better about this idea if it came from digital divide advocates than if this idea was hatched by big ISP lobbyists who see a way to snag billion in federal money.

That’s a legitimate concern because this plan largely ignores the other two issues faced by homes without broadband. Many such homes don’t have a computer and many people don’t know how to use computers. Urban digital divide proponents will tell you that we need to solve all three issues before a home can meaningfully take advantage of getting broadband.

I also hope that any money used this way goes towards real broadband. It will be maddening if Comcast can charge the federal $50 monthly for what it already provides with its $9.95 Internet Essentials program. Comcast has crowed loudly about the good done by this program, but Comcast recently announced it is upgrading the program for 25/3 to 50/5 Mbps – a speed that is still inadequate for multiple people to use at the same time. I thought that was a decent program before the pandemic, but it no longer delivers what a home needs to stay connected during the pandemic.

I also hope that none of this money goes to AT&T DSL since the company stopped offering DSL to the public in October. None of this money should go to DSL in general since most DSL connections have upload speeds even slower than the Comcast Essentials.

I have reservations against making this a permanent solution. I might be wrong about this and perhaps I can be convinced that this is the best solution for the urban digital divide. I can’t help but wonder about what happens the day this subsidy ends and millions of homes lose their broadband connection. Perhaps the big ISPs already envision that day and know the temptation will be for the government to continue funding the program endlessly. My other big concern is that if this is made permanent that it will always be an annual target for politicians to eliminate.

My gut tells me that billions could be better spent by building a permanent broadband solution for poor urban neighborhoods. Before we make $50 payments into a permanent solution, as has been proposed by the Washington Post, I’d like to at least explore using federal funds to create urban broadband cooperatives or non-profit ISPs that could bring permanent broadband to neighborhoods that most need it. We already have a great historical example of how this can work. Rural America basically got electricity because the federal government loaned money to cooperatives to build electric networks. My guess is that we’d see the same thing happen in urban America if the government offered the oans. It makes a lot more sense to loan the money needed to let neighborhoods help themselves than to create a permanent subsidy.

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The Industry

Keeping Up With Broadband Upgrades

It’s been clear for many years that the US has an infrastructure problem due to having not put money into roads, bridges, dams, and other key public infrastructure. Those of us in the broadband industry also understand we have a huge infrastructure deficit when we look around at the state of broadband that’s limping along on sixty-year-old copper networks. An article was published in the Washington Post in December that points out that the bandwidth deficits affect a lot more than home broadband.

The article points out that the National Weather Service admits it has a bandwidth problem and is seeking to throttle back the public’s ability to gain access to real-time weather data. The NWS is the collector of the huge amount of weather data that is reported from numerous weather stations, sensors, and satellites.

Numerous other businesses collect data from the NWS and disseminate weather information to the public. Airline pilots rely on real-time data in plotting a course around bad weather. We use real-time data to know when to pause sporting events from little league games to pro sports. People rely on real-time weather information during bad weather – it’s vital for folks living in or near the path of a tornado to see where the storm is heading in real-time. And we all have built real-time weather forecasting into our daily lives. The weather apps we use don’t just tell us that it’s going to rain later today, they tell us it’s likely to start raining in 14 minutes, allowing us to plan appropriately. Society is clearly harmed in we no longer have access to real-time weather information.

It turns out the National Weather Service problems are solvable by updating computers and broadband connections. It’s a shame that the agency didn’t figure out a way to solve the problem before it was time to start rationing weather data, but the same statement can be made about all of our infrastructure problems.

For example, the telephone copper networks in Germany are roughly the same age as the ones in this country, and perhaps even a little older on average. Where the big telcos in the US simply stopped maintaining and upgrading copper networks, German telcos have continued with maintenance programs and continued to upgrade the electronics. Where DSL speeds in the US are generally under 30 Mbps (and often far slower) in towns and are often at speeds far under 10 Mbps in rural areas, the German DSL networks deliver much faster broadband. It’s not unusual to find DSL in cities at 100 Mbps and rural broadband at speeds up to 40 Mbps in Germany – all due to the fact that there was a push to get the best possible speeds out of the networks.

The Germans know that copper networks are near to the end of life and are in the process of upgrading to fiber, but rather than suffer from slow broadband speeds in the meantime the German telcos are milking the best speeds they can out of the old copper networks.

I am asked at least several times each month why upgrading to fiber is important. Underlying this question is the fear that the speeds on fiber will be obsolete in a few years in the same manner that has happened to DSL. After all, DSL has only been around for twenty years and went from state-of-the-art technology to become obsolete in a relatively short period of time. Communities don’t want to invest in fiber technology if it has the same path forward.

My answer to this question brings both good news and bad news. The good news is that fiber is almost infinitely upgradeable. I have no doubt that scientists will keep finding ways to milk more speeds out of laser technology. A new fiber network today can be built to deliver a symmetrical gigabit to everybody, and the sky is the limit on fast the network can go – the glass is capable of multi-terabit speeds.

But my answer also comes with a warning. Anybody that operates a fiber network has to be prepared to upgrade the electronics periodically. If somebody builds a fiber network and treats it the same way that big telcos have treated DSL, then that network is going to start having problems in a decade and might be barely limping along in twenty years. This is one of my biggest concerns about the big telcos taking grants to build rural fiber networks – are they going to keep up with the needed maintenance and upgrades? Their broadband history would indicate otherwise. Fiber is not automatically a great technology – it can be a great technology when operated by a great ISP.

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The Industry

5G a Fizzle With Consumers

The cellular companies have made an unprecedented push to get customers interested in 5G. Back in November, I recorded a college football game which enabled me to go back and count the twelve 5G commercials during the game. Advertising during sports events is relatively expensive, so these ads were not purchased at bargain-basement prices. The amount of money being spent to advertise 5G must be gigantic.

It looks like all of that advertising is not having the impact that the cellular companies want. JD Powers conducted a series of large surveys near the end of 2020 and found that the public was less than enamored by 5G, even after all of the advertising.

In good news for the cellular carrier, the advertising has created awareness of 5G and 92% of those surveyed had heard of 5G. However, only 26% believe that 5G is faster than existing 4G cellphone broadband. The response that cellular carriers will find troubling is that only 5% of those surveyed would pay more to get 5G. Only 4% are willing to switch cellular providers to get 5G.

The only companies that are making money on 5G are the cellphone manufacturers. Throughout the fall all of the big cellphone companies put a big push on having 5G in the phone. However, that advertising might not be having the desired impact and I’ve noticed that recent cellphone ads focus on the cameras in the newer phones instead of 5G.

None of this is particularly surprising because the web is full of stories about how 5G speeds are disappointing. Numerous reporters have compared 4G and 5G coverage in the same locations and often found that 5G is slower than 4G.

But there is a more fundamental question that the cellular companies have never addressed with customers. Why do customers need faster cellphone data speeds? The biggest bandwidth functions performed on most cellphones are watching a video or playing games – and 4G data speeds are more than adequate for these needs. Cellphones don’t suffer from having multiple users trying to use the bandwidth at the same time. Unlike with home broadband connection, I can’t recall hearing of people complaining that cellphone data speeds are too slow. People complain about coverage gaps where they can’t get service, but there doesn’t seem to be any groundswell asking for faster cellphone data.

Most people don’t realize that the cellular companies have no choice in the way they are rolling out 5G. The 4G cellular networks are swamped and overloaded, and if the cellular companies didn’t act, they were facing the collapse of the 4G network during busy hours.

The carriers have taken some of the stress off the 4G network by deploying small cell sites. But like with many other things, small cell site deployment slowed down during the pandemic. The carriers have introduced new spectrum bands, and that is what they are currently labeling as 5G. The real point of the 5G advertising is to lure people to buy and use phones that use the new spectrum bands, which reduces the pressure on the traditional cellular spectrum.

Eventually, the carriers will deploy the real 5G, which means using the 5G specifications. That will complete the third leg of cellular improvements. Some of those 5G features will significantly improve cellular networks. For example, a single cell site will be able to eventually handle up to 100,000 connections at the same time. Cellphones will not only try to connect to the nearest cell site but will be able to connect to other cell sites and will even be able to connect to more than one cell site at the same time. The 5G improvements are all aimed at helping urban cellular coverage and won’t make much difference in rural markets.

For now, the only new 5G feature that has been deployed is dynamic spectrum sharing (DSS). This feature lets a carrier mix 4G and 5G customers in the same spectrum bands. This feature is allowing the cellular companies to shuttle customers away from busy spectrum to relieve pressure on the network.

I don’t know that we’ll ever learn the extent to which these various efforts are helping the cellular networks. The cellular companies have been careful for years to not publicly discuss the 4G crisis and they are not now likely going to divulge the details of how they are fixing network problems.

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Regulation - What is it Good For? The Industry

Mediacom Threatens ‘Excessive Uploaders’

Far too often in this industry I read something that makes me roll my eyes. The latest comes from a warning by Mediacom to subscribers about excessive upload usage. The company is calling and writing to customers who use upload bandwidth and warning them that they will be throttled or disconnected if they use too much bandwidth.

This is outrageous during the pandemic. The vast majority of upload traffic is coming from those who work from home or have students working from home. The heaviest users are households with two or more people trying to work simultaneously – something that millions of households are trying to do. Upload bandwidth means connecting to school and work servers and getting on Zoom calls – something that is hard for anybody working from home to cut back on. The next biggest use of upload bandwidth is backing up data on local hard drives into the cloud – something that is universally recommended to anybody working from home.

Mediacom already uses data caps as a way to throttle heavy usage. The data caps on a 60 Mbps broadband connection is one of the stingiest in the industry, with monthly data caps starting as low as 200 gigabytes of data per month. However, the data caps on speeds greater than 100 Mbps are larger – the cap for 300/30 Mbps is 2 gigabytes and for a gigabit download product can be as high as 6 gigabytes. These data cap plans put a cap on total download and upload traffic – but it appears there is also a secret unpublished cap placed on upload data usage.

Like all cable companies, Mediacom has slow upload speeds which are proving to be inadequate during the pandemic. The advertised upload speed for 100 Mbps download broadband is only 5 Mbps. That’s likely the most popular product being sold by Mediacom, and a 5 Mbps upload path is not adequate to support multiple family members working and schooling at the same time.

During the pandemic, it’s been reported that millions of households nationwide have upgraded to more expensive broadband products in order to get an upload data path that will work. In the case of Mediacom, subscribing to a gigabit broadband product comes with a 50 Mbps upload speed – a speed that ought to be sufficient to support people working from home. But now the company is punishing customers that pay more for the extra speed and then try to use what they’ve purchased.

This is the kind of ISP behavior that cries out for broadband regulation. If the FCC regulated broadband, it could step in and tell Mediacom to stop this anti-customer behavior. This is a company that undoubtedly accepted a lot of upgrade orders from customers wanting faster broadband during the pandemic and then turned around and told those same customers they couldn’t use what the extra fees had purchased.

Mediacom could offer faster upload speeds but has decided not to. I have no doubt that Mediacom is still using the upload technology that came with DOCSIS 3.0 from 2006. That technology deploys upload bandwidth in the band of frequency inside the cable transmission between 5 MHz and 42 MHz. This is a relatively small band of frequency and doesn’t support much bandwidth. It’s also the noisiest frequency inside of a cable network and is subject to a lot of ambient interference.

Since Mediacom is offering gigabit broadband it means it upgraded the download path to DOCSIS 3.1. But the company clearly elected to not upgrade the upload bandwidth speeds. DOCSIS 3.1 allows for using what is labeled as a mid-split option to enable frequency as high as 204 MHz to be used for better upload speeds.

I’m sure the company elected to not undertake the upload upgrade to save money. Like most of the cable industry, Mediacom didn’t think customers needed more upload speed. But now, during the pandemic, the public clearly needs faster upload speeds and is even willing to pay more to get it. Mediacom could have spent 2020 making the upgrade to the mid-split to meet increased customer demand. Instead, they are threatening and throttling customers who actually use what they have purchased. For those that are keeping tabs – this is what monopoly abuse looks like. I hope the new FCC finds a way to stop this nonsense.

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The Industry

Taking the Long View

I have to wonder if this year is making the big ISPs rethink their business plans. For years, many big ISPs have foregone making long-term investments in broadband and instead chased the quick return.

A good example is CenturyLink. Before the merger with Level 3, the company had started a program to aggressively replace the copper plant in urban markets with fiber. At the peak, the company built fiber to pass 700,000 homes a year. This was not a surprising direction for a company that had its roots as a rural telco. The company’s executive team understood the huge benefits of building a business that spins off cash year after year. The company clearly envisioned growing to tens of millions of satisfied urban fiber customers.

But that strategy stopped dead cold when the company merged with Level 3. Within a year, the Level 3 team wrestled away control of the company, and I recall a quote by new CEO Jeff Storey that the business was no longer going to chase growth with ‘infrastructure returns’. Like most big ISPs, the new CenturyLink management started chasing the quick hit returns. For the last few years, CenturyLink press releases have highlighted the number of urban buildings that the company has added to the network.

And then the pandemic turned that strategy on its head. Everything I read in the business press says that many companies are not going to be returning in full force to downtown offices. The business real estate market is likely facing a bleak upcoming decade of vacant spaces until the industry right-sizes itself. The likely big downturn in the business real estate market also means a big downturn in the urban broadband market – a strategy for selling to downtown businesses can’t be as effective when the businesses are sending staff permanently home to work.

What is so odd about the strategy of the big ISPs is that they would love broadband customers that spin off big piles of cash. That is the precise business plan that most fiber overbuilders are chasing – make the big investment in fiber-to-the-premise, and then reap the rewards for decades with good cash returns.

Most big ISPs share the same philosophy as CenturyLink, where quarterly earnings and short-term investments are preferred over capital intensive but long-term steady returns. AT&T has built tiny clusters of fiber in markets all over the country instead of replacing all of its copper in its historic market. Verizon has always been the most disciplined ISP and has only built broadband in neighborhoods that meet its cost profiles. This has resulted in a hodgepodge of FiOS fiber scattered throughout the northeast. It’s hard to think the company won’t use this same discipline in building its fiber-to-the-curb wireless product – some blocks will get the new network while adjoining neighborhoods will be bypassed.

The only big ISP that seems determined to expand by grabbing every possible customer is Charter. The company has clearly recognized that it has won the battle against DSL and is becoming a de facto monopoly in most of its markets. But rather than sit back and collect cash, Charter is aggressively planning to grow to the outer suburban and even rural areas surrounding its markets. To some degree, Charter seems to be the only big ISP that is pursuing a strategy of maximizing economy of scale, where efficiency and profitability are maximized by getting as many customers as possible in a geographic region.

It’s interesting to compare AT&T and Charter. AT&T has a few thousand fiber customers in practically every market in the country. Altogether that adds to millions of customers on fiber, but it also means a widely dispersed technician base to service the customers. That’s drastically different than Charter which seems to want to serve every customer within big circles around major markets. My experience in building business plans tells me that the Charter strategy will be far more profitable in the long run.

None of this would matter much except for the fact that a handful of giant ISPs control most of the broadband customers in the country. The combination of Charter, Comcast, AT&T, and Verizon currently serve 72% of all broadband customers in the country. The decisions of these few big ISPs determines the only broadband options available to millions of us.