Getting Militant for Broadband

My job takes me to many rural counties where huge geographic areas don’t have broadband. I’ve seen a big change over the last two years in the expectations of rural residents who are now demanding that somebody find them a broadband solution. There have been a number of rural residents calling for better broadband for a decade, but recently I’ve seen the cries for broadband grow into strident demands. As the title of this blog suggests, people are getting militant for broadband (but not carrying guns in doing so!)

The perceived need for broadband has changed a lot since the turn of this new century. In 2000 only 43% of homes had a broadband connection – and in those days that meant they had a connection that was faster than dial-up. In 2000 DSL was king and a lot of homes had upgraded to speeds of 1 Mbps. There have always been homes that require broadband, and I’m a good example since I work from home, and when I moved fifteen years ago my offer on a new house was contingent on the home having broadband installed before closing. My real estate agent at the time said that was the first time she’d ever heard about broadband related to home ownership.

As I’ve cited many times, the need for broadband has continued to grow steadily and has been doubling every three years. By 2010 the number of homes with broadband grew to 71%, and by then the cable companies were beginning to dominate the market. By then DSL speeds had gotten better, with the average speeds at about 6 Mbps, but with some lucky customers seeing speeds of around 15 Mbps. But as DOCSIS 3.0 was implemented in cable networks we started seeing speeds up to 100 Mbps available on cable systems. It was a good time to be a cable company, because their rapid revenue growth was fueled almost entirely by adding broadband customers.

Broadband in urban areas has continued to improve. We’re now seeing Comcast, Charter, Cox and other cable company upgrade to DOCSIS 3.1 and offer speeds of up to 1 Gbps. DSL that can deliver 50 Mbps over two bonded copper lines is becoming old technology. Even urban cellular speeds are becoming decent with average speeds of 12 – 15 Mbps.

But during all of these upgrades to urban broadband, huge swaths of rural America is still stuck at 2000 or earlier. Some rural homes have had access to slow DSL of 1 – 2 Mbps at most. Rural cellular speeds are typically half of urban speeds and are incredibly expensive as a home broadband solution. Satellite broadband has been available the whole time, but the high prices, gigantic latency and stingy data caps have made most homes swear off satellite broadband.

Rural homes look with envy at their urban counterparts. They know urban homes who have seen half a dozen major speed upgrades over twenty years while they still have the same lousy choices of twenty years ago. Some rural homes are seeing an upgrade to DSL due to the CAF II program of speeds of perhaps 10 Mbps. While that will be a relief to a home that has had no broadband – it doesn’t let a home use broadband in the same way as the rest of the country.

To make matters feel worse, rural customers without broadband see some parts of rural America get fiber broadband being built by independent telephone companies, electric cooperatives or municipalities. It’s hard for them to understand why there is funding that can make fiber work in some places, but not where they live. The most strident rural residents these days are those who live in a county where other rural customers have fiber and they are being told they are likely to never see it.

This disparity between rural haves and have nots is all due to FCC policy. The FCC decided to make funds available to rural telcos to upgrade to better broadband, but at the same time copped out and handed billions to the giant telcos to instead upgrade to 10 Mbps DSL or wireless. To make matters worse, it’s becoming clear that AT&T and Verizon are intent in eventually tearing down rural copper, which will leave homes with poor cellular coverage without any connection to the outside world.

The FCC laments that they cannot possibly afford to fund fiber everywhere. But they missed a huge opportunity to bring fiber to millions when they caved to lobbyists and gave the CAF II funding to the big telcos. Recall that these funds were originally going to be awarded by a reverse auction and that numerous companies had plans to ask for the funding to build rural fiber.

It’s no wonder that rural areas are furious and desperate for better broadband. Their kids are at a big disadvantage to those living in towns with broadband. Farmers without broadband are competing with those using agricultural IoT. Realtors report that they are having a hard time selling homes with no broadband access. People without broadband can’t work from home. And rural America is being left behind from taking part in American culture without access to the huge amount of content now available on the web.

Charter Upgrading Broadband

We are now starting to see the results of cable companies upgrading to DOCSIS 3.1. Charter, the second biggest ISP in the country recently announced that it will be able to offer gigabit speeds to virtually it’s whole footprint of over 40 million passings.

DOCSIS 3.1 is the newest protocol from Cable Labs that allows bonding an unlimited number of spare channel slots for broadband. A gigabit data path requires roughly 24 channels on a cable network using the new DOCSIS protocol. In bigger markets this replaces DOCSIS 3.0 that was limited to maximum download speeds in the range of 250 Mbps. I know there are Charter markets with even slower speeds that either operate under older DOCSIS standards or that are slow for some other reason.

Charter has already begun the upgrades and is now offering gigabit speeds to 9 million passings in major markets like Oahu, Hawaii; Austin, Texas; San Antonio, Texas, Charlotte, North Carolina; Cincinnati, Ohio; Kansas City, Missouri; New York City; and Raleigh-Durham, North Carolina. It’s worth noting that those are all markets where there is fiber competition, so it’s natural they would upgrade these first.

The new increased speed won’t actually be a gigabit and will be 940 Mbps download and 35 Mbps upload. (It’s hard to think there is anybody who is really going to care about that distinction). Cable Labs recently came out with a DOCSIS upgrade that can increase upload speeds, but there’s been no talk from Charter about making that upgrade. Like the other big cable companies, Charter serves businesses that want faster upload speeds with fiber.

Along with the introduction of gigabit broadband the company also says it’s going to increase the speed of it’s minimum broadband product. In the competitive markets listed above Charter has already increased the speed of its base product to 200 Mbps download, up from 100 Mbps.

It’s going to be interesting to find out what Charter means by the promise to cover “virtually’ their whole footprint. Charter grew by purchasing systems in a wide range of conditions. I know of smaller Charter markets where customers don’t get more than 20 Mbps. There is also a well-known lawsuit against Charter in New York State that claims that a lot of households in upstate New York are getting speeds far slower than advertised due to having outdated cable modems.

The upgrade to DOCSIS 3.1 can be expensive in markets that have not yet been upgraded to DOCSIS 3.0. An upgrade might mean replacing power taps and other portions of the network, and in some cases might even require a replacement of the coaxial cable. My guess is that the company won’t rush to upgrade these markets the upgrade to DOCSIS 3.1 this year. I’m sure the company will look at them on a case-by-case basis.

The company has set a target price for a gigabit at $124.95. But already in the competitive markets like Oahu the company was selling introductory packages for $104.99. There is also a bundling discount for cable subscribers.

The pricing list highlights that they still have markets with advertised speeds as low as 30 Mbps – and the company’s price for the minim speeds is the same everywhere, regardless if that product is 30 Mbps or 200 Mbps. And as always with cable networks, these are ‘up to’ speeds and as I mentioned, there are markets that don’t meet these advertised speeds today.

Overall this ought to result in a lot of home and businesses getting faster broadband than today. We saw something similar back when the cable companies implemented DOCSIS 3.0 and the bigger companies unilaterally increased speeds to customers without increasing the prices. Like other Charter customers, I will be interested in what they do in my market. I have the 60 Mbps product and I’ll be interested to see if my minimum speeds is increased to 100 Mbps or 200 Mbps and if I’m offered a gigabit here. With the upgrade time frame they are promising I shouldn’t have to wait long to find out.

Cable Systems Aren’t All Alike

Big cable companies all over the country are upgrading their networks to DOCSIS 3.1 and announcing that they will soon have gigabit broadband available. Some networks have already been upgraded and we are seeing gigabit products and pricing springing up in various markets around the country. But this does not mean that all cable networks are going to be capable of gigabit speeds, or even that all cable networks are going to upgrade to DOCIS 3.1. As the headline of this blog says, all cable systems aren’t alike. Today’s blog looks at what that means as it applies to available broadband bandwidth.

A DOCSIS cable network is effectively a radio network that operates only inside the coaxial cable. This is why you will hear cable network capacity described using megahertz, which is a measure of the frequency of a radio transmission. Historically cable networks came in various frequency sizes such as 350 MHz, 650 MHz or 1,000 MHz.

The size of the available frequency, in megahertz, describes the capacity of the network to carry cable TV channels or broadband. Historically one analog TV channel uses about 6 MHz of frequency – meaning that a 1,000 MHz system can transmit roughly 167 channels of traditional analog TV.

Obviously cable networks carry more channels than this, which is why you’ve seen cable companies upgrade to digital system. The most commonly used digital compression scheme can squeeze six digital channels into the same frequency that carries one analog channel. There are new compression techniques that can squeeze in even more digital channels into one slot.

In a cable network each slice of available frequency can be used to either transmit either TV channels or else be used for broadband. If a cable companies wants more broadband capacity they must create room for the broadband by reducing the number of slots used for TV.

It is the overall capacity of the cable network along with the number of ‘empty’ channel slots that determine how much broadband the network can deliver to customers. A cable system needs roughly 24 empty channel slots to offer gigabit broadband download speeds. It’s a lot harder to carve out enough empty channels on smaller capacity networks. An older cable system operating at 650 MHz has significantly less capacity for broadband than a newer urban system operating at 1,000 MHZ or greater capacity.

One of the primary benefits of DOCSIS 3.1 is the ability to combine any number of empty channels into a signal broadband stream. But the task of upgrading many older networks to DOCSIS 3.1 is not just a simple issue of upgrading the electronics. If a cable company wants the faster broadband speeds they need to also upgrade the overall capacity of the network. And the upgrade from 350 MHz or 650 MHz to 1,000 MHz is often expensive.

The higher capacity network has different operating characteristics that affect the outside cable plant. For example, the placement and spacing of cable repeaters and power taps is different in a higher frequency network. In some cases the coaxial cable used in an older cable networks can’t handle the higher frequency and must be replaced. So upgrading an older cable network to get faster speeds often means making a lot of changes in the physical cable plant. To add to the cost, this kind of upgrade also usually means having to change out most or all of the cable settop boxes and cable modems – an expensive undertaking when every customer has multiple devices.

The bottom line of all of this is that it’s not necessarily cheap or easy to upgrade older or lower-capacity cable networks to provide faster broadband. It takes a lot more than upgrading the electronics to get faster speeds and often means upgrades the physical cable plant and replacement of settop boxes and cable modems. Cable operators with older networks have to do a cost/benefit analysis to see if it’s worth the upgrade cost to get faster broadband. Since most older cable systems are in rural small towns, this is one more hurdle that must be overcome to provide faster broadband in rural America.

Cable Company Gigabit

We are starting to get a look at what a gigabit product from the cable companies might look like. Late last year Comcast rolled out a gigabit product in parts of Atlanta, Detroit, Nashville and Chattanooga. They are now rolling implementation across the country and the company says that gigabit speeds will be available in all markets by 2018.

Comcast has elected to make the upgrades by implementing DOCSIS 3.1 technology on their networks. This technology allows the network to bond together numerous empty channels on the cable system to be used for broadband.

In markets where there is competition with Google Fiber or another fiber provider, the Comcast product is being sold at an introductory price of $70 per month with a 3-year contract. Month-to-month pricing without the contract is $140 per month. In reading group discussion websites where Comcast customers chat it sounds like there are already many markets where the $70 contract price is not available. I have read some customers say they have gotten prices at $110 to $120 per month, so perhaps the company is flexible with those willing to wade through the customer service maze and willing to sign a term contract.  

The current Comcast product delivers up to 1 Gbps download and 35 Mbps upload. You can expect Comcast to make future upgrades that will improve the upload speeds – but that upgrade is not included in this first generation of DOCSIS 3.1 technology. For now the upload speeds will be a barrier to any application that needs fast upload speeds.

The new technology also requires new hardware, meaning a new cable modem and a new WiFi router capable of handling the faster data speeds. So expect the price to be bumped higher to rent the hardware.

It’s hard to imagine that many customers are going to pony up more than $150 per month to get a gigabit connection and modem. When Google Fiber first introduced $70 gigabit to Kansas City (and when that was their only product), there were reports that there were neighborhoods where as many as 30% of the households subscribed to the gigabit product. But Google has a true $70 price tag and didn’t layer on fees for a modem or any other fees, like Comcast is surely going to do. It’s hard to imagine many customers agreeing to a 3-year contract for the gigabit product in competitive markets if they can buy it from somebody else without the contract. But perhaps Comcast will offer bundling incentives to pull the real cost under $70.

But we know when there are more choices that most customers will opt for the lowest-price product that they think is adequate for their needs. For example, when Google Fiber came to Atlanta they also had a 100 Mbps product for $50 per month and it’s likely that most customers chose that product rather than paying extra for the gigabit.

The Comcast pricing might reflect that Comcast doesn’t want to implement too many high-bandwidth customers at the same time. While DOCSIS 3.1 increases the size of the data pipes available to customers, it doesn’t make any significant improvements in the last mile network. To the extent that high-bandwidth customers use a lot more data, too many gigabit customers in a cable company node could degrade service for everybody else. But it’s likely that most gigabit customers don’t use a lot more data than 100 Mbps subscribers – they just get things done more quickly. But I am sure that Comcast still has worries about having too many high-bandwidth customers in the network.

Comcast and other cable companies are seeing more competition. For example, CenturyLink is selling $85 gigabit service in many western cities and passed about 1 million homes with fiber last year. Verizon FiOS just increased their data speeds in their fiber markets – not quite to a gigabit yet, but at ranges up to half a gigabit. But in the vast majority of the country the cable companies are not going to have significant competition with any foreseeable future.

FCC Commissioner Michael O’Reilly said a few weeks ago that ultrafast broadband is a marketing gimmick. While he was even referring to 100 Mbps broadband as a gimmick, it’s hard to not agree with him that a residential gigabit bandwidth product priced above $150 per month is more gimmick than anything else. There can’t be that many households in any market willing to pay that much extra just for the prestige of saying they have a gigabit.

But over time the prices will drop and the demand for bandwidth will grow and a decade from now there will be a significant portion of the market clamoring for an affordable gigabit product. Remember that we’ve seen this same thing happen a number of times in the past. I remember the big deal the cable companies made when they first increased speeds to 15 Mbps. The funny thing is that the market has a way of filling faster data pipes, and the day will come sooner than we expect where many households will legitimately want and need gigabit data pipes.     

The Beginning of the End for HFC?

coax cablesWe’ve spent the last few years watching the slow death of telephone copper networks. Rural telcos all over the country are rapidly replacing their copper with fiber. AT&T has made it clear that they would like to get out of the copper business and tear down their old copper networks. Verizon has expressed the same but decided to sell a lot of their copper networks rather than be the ones to tear them down. And CenturyLink has started the long process of replacing copper with fiber and passed a million homes with fiber in urban areas in 2016.

Very oddly, the dying copper technology got a boost when the FCC decided to award money to the big rural copper owners like Frontier, CenturyLink and Windstream. These companies are now using CAF II money to try to squeeze one more generation of life out of clearly old and obsolete copper. Without that CAF II money we’d be seeing a lot more copper replacement.

I’ve been in the telco industry long enough to remember significant new telco copper construction. While a lot of the copper network is old and dates back to the 50s and 60s, there was still some new copper construction as recently as a decade ago, with major new construction before that. But nobody is building new telco copper networks these days, which is probably the best way to define that the technology is dead – although it’s going to take decades for the copper on poles to die.

This set me to thinking about the hybrid coaxial networks (HFC) operated by the cable companies. Most of these networks were built in the 60s and 70s when cable companies sprang up in urban areas across the country. There are rural HFC networks stretching back into the 50s. It struck me that nobody I know of is building new HFC networks. Sure, some cable companies are still using HFC technology to reach a new subdivision, but nobody would invest in HFC for a major new build. All of the big cable companies have quietly switched to fiber technology when they build any sizable new subdivision.

If telco copper networks started their decline when companies stopped building new copper networks, then we have probably now reached that same turning point with HFC. Nobody is building new HFC networks. What’s hanging on poles today is going to last for a while, but HFC networks will eventually take the same path into decline as copper networks.

There will be a lot of work and money poured into keeping HFC networks alive. Cable companies everywhere are looking at upgrades to DOCSIS 3.1 as a way to get more speeds out of the technology – much in the same way that DSL prolonged copper networks. The big cable companies, in particular, don’t want to spend the capital dollars needed to replace HFC with fiber – Wall Street will punish any cable company that tries to do so.

Cable networks have a few characteristics that give them a better life than telephone copper. Having the one giant wire in an HFC network is superior to having large numbers of tiny wires in a copper network which go bad one-by-one over time.

But cable networks also have one big downside compared to copper networks – they leak interference into the world and are harder to maintain. The HFC technology uses radio waves inside the coaxial cable as the method to transmit signal. Unfortunately, these radio waves can leak out into the outside world at any place where there is a break in the cable. And there are huge numbers of breaks in an HFC network – one at every place where a tap is placed to bring a drop to a customer. Each of the taps and other splices in a cable network are sources of potential frequency leakage. Cable companies spend a lot every year cleaning up the most egregious leaks – and as networks get older they leak more.

Certainly HFC networks are going to be around for a long time to come. But we will slowly start seeing them replaced with fiber. Altice is the first cable company to say they will be replacing their HFC network with fiber over the next few years. I really don’t expect the larger cable companies to follow suit and in future years we will be deriding the networks used by Comcast and Charter in the same way we do old copper networks today. But I think that somewhere in the last year or two we saw the peak of HFC, and from that point forward the technology is beginning the slow slide into obsolescence.

Technology Hype

coax cablesI find it annoying when I read short articles that proclaim that a new technology that can deliver faster data speeds is right around the corner. This has most recently happened with 5G cellular, but in the past there have been spates of such articles talking about cable modem speeds with DOCSIS 3.1, and faster copper speeds with G.Fast.

It’s always easy to understand where such articles come from. Some vendor or large ISP will announce a technical breakthrough in a lab, and then soon thereafter there are numerous articles written by non-technical people proclaiming that we will soon be seeing blazing speeds at our homes or on our cell phones.

But these articles are usually premature, and sadly there are real-life consequences to this kind of lazy press. Politicians and policy makers see these articles and accept them as gospel and make decisions based upon these misleading articles. It then is up to people like me to come behind and explain to them why the public claims are not true.

This is happening right now with talk about blazingly fast millimeter wave radios to replace fiber loops. Even if this technology were ready for market tomorrow (which it won’t be), like any technology it will have limits. There are places where wireless loops might be a great solution but other places where it may never be financially or technically feasible. Yet a whole lot of the country now believes that our future broadband is dependent upon gigabit wireless, and this is quashing plans for building fiber networks.

One recent set of these kinds of articles proclaimed that DOCSIS 3.1 is going to bring everybody gigabit speeds over cable company networks. And there is some truth to that, but the nuances are never explained. There are a lot of changes needed in a cable network to bring gigabit speeds to all of their customers. What is really happening in the first upgrade is that cable networks will have limited gigabit capabilities. The companies will be able to deliver gigabit speeds to perhaps hundreds of people in a market. Their networks would have problems if they tried to deliver it to thousands, and their networks would crash if they tried to give fast speeds to everybody.

Consider the list of issues that must be overcome to use a cable network to bring gigabit speeds to the masses:

  • First a cable company has to free up enough empty channels to make room for the gigabit data channels. For many cable system this will require upgrading the overall bandwidth of the cable network, and this can be very expensive. In the most extreme cases it can mean replacing all of the network amplifiers and power taps and even sometimes replacing some of the coaxial cable.
  • Cable bandwidth is shared by all of the customers in a neighborhood (called a node). If a cable company only sells a few gigabit products in a given node there will be some small degradation of bandwidth performance for everybody else. But if enough customers want to buy a gigabit the cable company will be forced to ‘split’ the nodes so that there are fewer homes sharing the bandwidth. Cable companies today have nodes of 200 – 300 customers, compared to fiber network nodes that generally range between 16 and 32 customers per node. A cable company has to build more fiber and install more electronics to get nodes as small as fiber systems.
  • Every network has chokepoints, or places where only a set amount of bandwidth can be handled at the same time. There are several of these chokepoints in a cable network – at the node, on the data pipe serving the node, at several data concentration points within the headend, and with the pipe to the outside Internet. You can’t upgrade speeds without upgrading these chokepoints, and that can be expensive.
  • At some point if enough customers want fast speeds the network would need to be fundamentally reconfigured to a new technology. This might mean converting the whole headend and electronics to IPTV. It might mean moving the CMTS (the device that talks to the data at each node) into the field, similar to a fiber network. And it would mean building a lot more fiber, to the point where there would almost be as much fiber as in a fiber-to-the-premise network.

There is always some truth in these technological pronouncements. But these articles are way off base when they then imply that a given breakthrough is the end-all solution to broadband. Yes, cable systems can be faster now, which is great. But DOCSIS 3.1 does not make a cable network equivalent to a Google Fiber network that can already deliver a gigabit to everybody. And yes, there is great promise in wireless local loops. But even after all of the issues with deploying wireless in a real-life environment are solved, the technology is only going to work where there is fiber fairly close to customers and when a number of other factors are just right. These kind of nuances matter and I really wish that non-techie writers would stop telling us that the solution to all of our broadband speed problems is right around the corner. Because it’s not.

Industry Shorts – August 2016

ATTThe following are a few topics I which found interesting but don’t require a full blog entry:

FCC to Allow Cable Black-outs. The FCC has officially decided that it is not going to intervene in the many disputes we see these days between programmers and cable operators. Only a few years ago this was a fairly rare occurrence, but you can’t read industry press without seeing some new dispute – many of which are now leading to content black-outs when the two sides can’t reach a resolution.

The FCC has always been allowed to intervene in disputes and routinely did so a decade ago. The American Cable Association which represents small and medium cable companies wants the FCC to be more active today to protect against abuses by the programmers, but the agency has decided to let the market work to resolve disputes. There have been over 600 blackouts since 2010 and the frequency seems to be accelerating.

Blogger Loses Life’s Work. Google recently hit the news when it disabled access to 14 years of blogs as well artwork, photograph, a novel and even the Gmail account that was being stored online by Dennis Cooper. The blogger claims he received no notice until his work disappeared and Google won’t tell him why he was cut off or if his content still exists. Cooper’s blog always contained controversial content and was a popular destination for fans of experimental literature and avant-garde writing.

His case highlights the intersection of first amendment rights versus the ability of private corporations like Google to allow or not allow content on their private platforms. Google has slowly been cutting back on storage services such as Google News Drives and Google Groups and Cooper’s content might not even still exist. If anything, this case highlights the importance of backing up content offline. It also raises the issue of how permanent anything is on the web.

AT&T Testing Drone Cell Sites. AT&T has been testing the use of drones as flying cell sites to use during big events. Large events always overwhelm local cellular sites and drones might be the answer to give access to many people in a concentrated area.

The company has already been using a technology that it calls COWs (Cells on Wheels) that are brought to large sporting events to provide more coverage. But the hope is that drones can be deployed more quickly and for a lower cost and provide better service. Of course, this just means more of a phenomenon I’ve seen a few times in recent years where people in the stands at a football game are watching the same game on their cellphone instead of looking at what is in front of them.

Huawei Creates 10 Gbps Cable Platform. We are in the earliest stages of deployment of gigabit broadband using DOCSIS 3.1 on cable systems and Chinese vendor Huswei claims to have already created a 10 Gbps platform using the new standard.

The company faces several hurdles to deploying the technology in the US since the company is under scrutiny by the US for doing business with North Korea and with Iran during the recent embargo. But the biggest issue with a cable company offering gigantic bandwidth over coaxial cable is freeing up enough bandwidth in a cable TV network to do so. Cable companies have to free up at least 24 empty channels to offer a gigabit over coax and it seems unlikely that are willing to try to open up a lot more channels than that for higher bandwidth. The only realistic scenario for going much larger than a gigabit is to migrate a cable network to IPTV and make the whole network into a big data pipe – but this is a very costly transition that means a new headend and new settop boxes. .

Facebook Develops Mobile Access Point. Facebooks has developed a shoebox size access point that can support wireless transmissions including 2G, LTE and WiFi. The box is hardened for the harshest conditions, is relatively low-powered and is intended as a way to expand Internet coverage around the world in poorer areas. Most of the world now connects with the Internet wirelessly and this access point can enable customers with a wide range of devices to gain access.

 

The Real Impact of Network Neutrality

Network_neutrality_poster_symbolThe federal appeals court for Washington DC just upheld the FCC’s net neutrality order in its entirety. There was a lot of speculation that the court might pick and choose among the order’s many different sections or that they might like the order but dislike some of the procedural aspects of reaching the order. And while there was one dissenting option, the court accepted the whole FCC order, without change.

There will be a lot of articles telling you in detail what the court said. But I thought this might be a good time to pause and look to see what net neutrality has meant so far and how it has impacted customers and ISPs.

ISP Investments. Probably the biggest threat we heard from the ISPs is that the net neutrality order would squelch investment in broadband. But it’s hard to see that it’s done so. It’s been clear for years that AT&T and Verizon are looking for ways to walk away from the more costly parts of their copper networks. But Verizon is now building FiOS in Boston after many years of no new fiber construction. And while few believe that AT&T is spending as much money on fiber as they are claiming, they are telling the world that they will be building a lot more fiber. And other large ISPs like CenturyLink are building new fiber at a breakneck pace.

We also see all of the big cable companies talking about their upgrades to DOCSIS 3.1. Earlier this year the CEO of Comcast was asked at the INTX show in Boston where the company had curtailed capital spending and he couldn’t cite an example. Finally, I see small telcos and coops building as much fiber as they can get funded all over the country. So it doesn’t seem like net neutrality has had any negative impact on fiber investments.

Privacy. The FCC has started to pull the ISPs under the same privacy rules for broadband that have been in place for telephone for years. The ISPs obviously don’t like this, but consumers seem to be largely in favor of requiring an ISP to ask for permission before marketing to you or selling your information to others.

The FCC is also now looking at restricting the ways that ISPs can use the data gathered from customers from web activity for marketing purposes.

Data Caps. The FCC has not explicitly made any rulings against data caps, but they’ve made it clear that they don’t like them. This threat (along with a flood of consumer complaints at the FCC) seems to have been enough to get Comcast to raise its data caps from 300 GB per month to 1 TB. It appears that AT&T is now enforcing its data caps and we’ll have to see if the FCC is going to use Title II authority to control the practice. It will be really interesting if the FCC tackles wireless data caps. It has to an embarrassment for them that the wireless carriers have been able to sell some of the most expensive broadband in the world under their watch.

Content Bundling and Restrictions. Just as the net neutrality rules were passed there were all sorts of rumors of ISPs making deals with companies like Facebook to bundle their content with broadband in ways that would have given those companies priority access to customers. That practice quickly disappeared from the landline broadband business, but there are still several cases of providers using zero-rating to give their own content priority over other content. My guess is that this court ruling is going to give the FCC the justification to go after such practices.

It’s almost certain that the big ISPs will appeal this ruling to the Supreme Court. But an appeal of a positive appeal ruling is a hard thing to win and the Supreme Court would have to decide that the appeals court of Washington DC made a major error in its findings before they would even accept the case, let alone overturn the ruling. I think the court victory gives the FCC the go-ahead to fully implement the net neutrality order.

 

A New Cable Network Architecture

coaxial cableThere seems to be constant press about the big benefits that are going to come when cable coaxial networks upgrade to DOCSIS 3.1. Assuming a network can meet all of the requirements for a DOCSIS 3.1 upgrade the technology is promising to allow gigabit download speeds for cable networks and provide cable companies a way to fight back against fiber networks. But the DOCSIS 3.1 upgrade is not the only technological path that can increase bandwidth on cable networks.

All of the techniques that can increase speeds have one thing in common – the network operator needs to have first freed up channels on the cable system. This is the primary reason that cable systems have converted to digital – so that they could create empty channel slots on the network that can be used for broadband instead of TV.

The newest technology that offers an alternative to DOCSIS 3.1 is being called Distributed Access Architecture (DAA). This solution moves some or all of the broadband electronics from the core headend into the field. In a traditional DOCSIS cable network the broadband paths are generated to customers using a device called a CMTS (cable modem termination system) at the core. This is basically a router that puts broadband onto the cable network and communicates with the cable modems.

In the most extreme versions of DAA the large CMTS in the headend would be replaced by numerous small neighborhood CMTS units dispersed throughout the network. In the less extreme version of DAA there would be smaller number of CMTS units placed at existing neighborhood nodes. Both versions provide for improved broadband in the network. For example, in the traditional HFC network a large CMTS might be used to feed broadband to tens of thousands of customers. But dispersing smaller CMTS units throughout the network would result in a network where fewer customers are sharing bandwidth. In fact, if the field CMTS units can be made small enough and cheap enough a cable network could start to resemble a fiber PON network that typically shares bandwidth with up to 32 customers.

There are several major advantages to the DAA approach. First, moving the CMTS into the field carries the digital signal much deeper into the network before it gets converted to analog. This reduces interference which strengthens the signal and improves quality. And sending digital signals deeper into the network allows support for higher QAM, which is the signaling protocol used to squeeze more bits per hertz into the network. Finally, the upgrade to DAA is the first step towards migrating to an all-digital network – something that is the end game for every large cable company.

There is going to be an interesting battle between fans of DOCSIS 3.1 and those that prefer the DAA architecture. DOCSIS 3.1 was created by CableLabs, and the large cable companies who jointly fund CableLabs tend to follow their advice on an upgrade path. Today DOCSIS 3.1 is still in first generation deployment and is just starting to be field tested and there is already a backlog on ordering DOCSIS 3.1 core routers. This opens the door for the half dozen vendors that have developed a DAA solution as an alternative.

While CableLabs didn’t invent DAA, they have blessed three different variations of network design for the technology. The technology has already been trialed in Europe and the Far East and is now becoming available in the US. It’s been rumored that at least one large US cable company is running a trial of the equipment, but there doesn’t seem to be any press on this.

Cable networks are interesting in that you can devise a number of different migration paths to get to an all-digital network. But in this industry the path that is chosen by the largest cable companies tends to become the de facto standard for everybody else. As the large companies buy a given solution the hardware costs drop and the bugs are worked out. As attractive as DAA is, I suspect that as Comcast and others choose the DOCSIS 3.1 path that it will become the path of choice for most cable companies.

Are We Really Funding More DSL?

DSL modemRecently while speaking at the National Association of Regulatory Utility Commissioners (NARUC), AT&T CEO Randall Stephenson told the attendees that AT&T’s DSL technology is obsolete. This is a rare admission of the truth from AT&T, which has been less than forthcoming over the years about its broadband business.

And it’s a pretty interesting quote from a company that last year accepted $427 million in CAF II funding from the FCC to expand broadband in rural markets. That money is supposedly going to be used to upgrade rural customers to be able to receive at least 10 Mbps download and 1 Mbps upload speeds. CenturyLink and Frontier plan to spend their federal assistance money by expanding DSL. I think it’s widely assumed that AT&T will also use the money for DS. But we can’t be certain that they aren’t planning to instead use that money to bring cellular wireless to rural homes, against the intentions of the FCC.

To be fair to Stephenson, his response was answering a question about how regulators should look at new technology cycles. Stephenson pointed out that technology cycles have shortened over the years. When DSL was first introduced it was expected to be good for about 10 – 15 years, but today the cycles for new technology have shortened to 5 years – with his example being the transition between 3G and 4G wireless.

Stephenson is right about the speed at which broadband technologies are improving. Since the introduction of DSL we have seen cable modems go through several generations of improvements and in 2016 we are seeing the first widespread roll-out of DOCSIS 3.1 and gigabit speeds from cable companies. And in that same time frame we have seen the development and the maturation of fiber technologies for serving homes. From a performance perspective DSL has been left in the dust.

AT&T certainly still has a lot of DSL in service. But it’s hard to decipher AT&T’s broadband statistics because they lump all broadband customers together. This has gotten more confusing since they picked up DirecTV, which sells satellite broadband. AT&T has been further making a distinction between traditional DSL customers and U-verse customers, most of which are served by bonding two pairs of copper together and using two DSL circuits. But supposedly within the U-verse numbers are also customers on fiber, which many analysts suspect are MDUs or small greenfield fiber trials that AT&T has done over the years.

In the fourth quarter of 2015 AT&T announced a net gain of 192,000 IP broadband customers, which is a mix of the three different types of broadband customers. If AT&T is like Verizon and CenturyLink they have been losing traditional DSL customers at a torrid pace, so it’s hard to know what to make of that number. Are they finally adding some FTTP customers?

But back to DSL. Stephenson is right. At best, a DSL service on a single copper line can deliver perhaps 20 Mbps of data – but conditions are rarely ideal and in the real world DSL is generally a lot slower than that. But even if people could get 20 Mbps from new DSL it’s obsolete because that is no longer considered as broadband.

It’s a shame that the FCC is going to invest billions in DSL at a time when the large telcos were never going to make those investments on their own. The CAF II funds will channel billions of dollars to the DSL vendors for one last hurrah before the technology hits the dust heap. Without the CAF II money one can imagine the DSL equipment market fading away.

While CAF II is a huge gift to the companies that sell DSL equipment – it’s going to be a long-term curse to people that will be upgraded with CAF II funding. They are going to get upgraded to DSL in a fiber world and the telcos are going to check these areas off as upgraded and needing no more investment. A lot of the first DSL built in the 90s is still working in the network, and sadly we are probably going to find a lot of CAF II DSL still working in rural America twenty years from now.