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Verizon talks about expanding access to broadband in rural areas, wirelessly: Cnet's Marguerite Reardon interviews Verizon Wireless's CTO, who says that his company's plan for LTE will extend far beyond its current CDMA cellular footprint. The missing piece in this interview? The fact that Verizon is obligated to build out a significant footprint in the 700 MHz band about which the CTO is speaking; more on that in a moment.
The 700 MHz band has so much bang for the buck, perhaps offering four times the coverage area with a single base station than an 1700-2500 MHz base station (3G or U.S. WiMax). And that's in urban areas. In rural locations without obstructions and with less dense usage, I would imagine a single base station could cover an enormous area. Backhaul is still an issue, of course, but Verizon has a variety of frequencies it can use for long-distance point-to-point wireless feeds. And while LTE could deliver a pool of 50 Mbps in urban areas with 5 to 10 Mbps or more available per user, rural performance could be lower and still far exceed what's currently available.
Verizon Wireless's CTO speculates that Verizon could offer fixed wireless offerings to homes, much like Clearwire's WiMax. Clearwire can't provide such service across large areas outside of densely populated areas because its bandwidth portfolio is centered in the 2500 MHz (2.5 GHz) band, which is going to be unaffordable to deploy in less-populated areas. Clearwire could cover an entire town with one base station, but it wouldn't make sense for them to cover the area between small towns. In fact, Clearwire's pre-WiMax offerings were originally in lower-tier smaller-city markets that had poor DSL and cable broadband availability.
According to research last year from the Pew Internet & American Life Project, 38 percent of rural households in the U.S. have broadband access, and 12 percent of all American households use fixed wireless for access. This shows the great potential for selling service into the rural market in two ways: it's underserved, but those with service are likely paying too much for what they get.
I contacted that report's author a few days ago to ask about the wireless stat, as it seemed incredibly high to me. He explained that it included satellite and all forms of fixed wireless. I found some more recent confirmation of the number from a University of Vermont poll released just two days ago. Vermont has a rural population, but still sees most people in towns and cities. Internet access is Vermont, the poll said, is split out as: dial-up, 18 percent; cable, 24 percent; DSL, 42 percent; satellite, 7 percent; wireless Internet, 6 percent; fiber or other, 3 percent. That 13 percent combined wireless number neatly tracks the Pew's research.
Satellite Markets & Research estimates 731,000 satellite Internet subscribers as of 2008's second quarter. With a bit over 100 million households in the U.S., that's not even one percent of the market, but the Vermont numbers show how that skews in less-populated areas. Pew research puts just 55 percent of households online, with a relatively large number that want broadband. (Some significant number will never want it for reasons of costs or utility, of course.)
As we know, satellite Internet is a kind of marvelous, ugly, and expensive compromise to bring broadband to the hinterland. People who would otherwise be restricted to dial-up service, if they could even get a decent 56K signal, can have far higher rates. But the cost is high, upstream rates low, and satellite services weren't designed to offer pinpoint residential access.
Thus Verizon has a defined market, and it won a large number of licenses covering these rural markets in the 700 MHz sale a year ago; so did AT&T, which also bought up many previously auctioned 700 MHz licenses. Verizon captured the coveted national license, but both firms purchased a patchwork of regional licenses that let them build country-wide 700 MHz networks.
But what Cnet's Reardon doesn't mention, and Verizon's CTO deftly avoids, is that 700 MHz licenseholders are obligated to build out service across the licenses they won. The FCC, tired of awarding licenses that aren't used, attached some modest but significant installation requirements on Auction 73.
While there are several classes of licenses, each class has a 4-year check-in mark for signal coverage. In some classes, that's 35 percent of the geographic area regardless of population, ideal for rural areas; in others, it's 40 percent of the population. If that mark is met, then licenseholders have a full 10 years to build out to 70 percent of the geographic area or 75 percent of the population. Failure to hit a 4-year mark shortens the license term and remaining build out to 8 years. Failure to meet the final target at 8 or 10 years results in the likely loss of the license. Licenses were carved out so that even the cheapest have significant population centers, making it less than optimal for a licenseholder to abandon the coverage area.
Verizon's national licenses (the C Block) require population-based buildouts, which is fair for the scope of the licenses. But some significant spectrum in the A, B, and E blocks require geographic-based deployment. (The public/private D Block didn't have a winning bidder, and is now in limbo after the withdrawal of a significant partner in the public partnership.)
I don't believe Verizon is being disingenuous in pushing the rural message, but the company is also talking up how stimulus money could be used for rural buildouts after the company had, essentially, already agreed to cover 75 percent of the population of the U.S. and 75 percent of the population or area of licenses it purchased.
FCC Commissioner McDowell strongly encourages rural telcos to adopt wireless broadband: An increasing number of reports show that the universal service fund (USF) that derives its fees from urbanized telephone use to subsidize rural telephony is off the tracks, and likely to change significantly in structure. McDowell said to the National Telecommunications Cooperative Association's annual meeting that free markets failed for rural American telephony, and the USF was once an effective mechanism for fixing what was broken. With USF drawing from fewer people--VoIP providers get some exemptions, for instance--rural providers need to adapt.
He urged the providers to participate in the upcoming 700 MHz auction. It's very sweet spectrum--it penetrates well and goes long distances--and licenses in rural areas are likely to be available at reasonable prices, but the infrastructure to build out won't be cheap.
More bad news for customers outside of cities: Verizon will lose 1.6m phone lines, 234,000 data customers, and 600,000 long-distance customers in Maine, Vermont, and New Hampshire, and own 60 percent in the new venture formed with FairPoint. FairPoint operates just 308,000 phone lines today, and is generally the incumbent local exchange carrier in these mostly tiny exchanges of less than 2,500 phone lines. By spinning these lines off, Verizon gets to take some of the cost of operating rural exchanges off its books, and the new entity may benefit from universal service fund fees, which provide significant revenue to rural exchanges.
Sprint Nextel spun off its access lines into a company called Embarq last year, as did smaller telco Alltel, which sold its lines to Valor Communications, which operates the new entity as Windstream. FairPoint, Embarq, Windstream, and a fourth firm, CenturyTel (a previous buyer of rural Verizon lines) represent a large, consolidated hunk of rural callers.
These markets may be ripe for more wireless, as wireline services have enormously lagged in these areas compared with the rest of the US. (Remember that the FCC counts broadband as 200 Kbps in either direction, and it counts a Zip code as having broadband service if there's a single provisioned line and a single customer for that line.
Sprint Nextel and Clearwire have licenses that likely cover a large rural area, and the question will be whether they can find it cost effective and efficacious to deploy for those underserved residents.
Satellite is often the only option for rural or exurb broadband Internet: The New York Times reports that Hughes, Starband, and WildBlue have over 390,000 consumers subscribing between them by year's end (240K, 30K, 150K, respectively); WildBlue is adding 15,000 home users and HughesNet 8,000 each month. Installation costs can run $500 with monthly service $50 to $130 per month. The installation costs can be reduced through long-term commitments. Satellite broadband reaches 463,000 households and businesses in all, but will double by 2010.
About 15m U.S. households cannot get broadband service from the local incumbents, this article says. My guess is that number is actually higher, because service availability is usually estimated over broad areas. I have attempted to get DSL service in many places that the line tested as "available," but the service was either marginal or non-existent. This has happened many times to my colleagues as well, and I don't believe we're rare cases, often looking for access in the middle of a city.
The two firms plan to launch new satellites to provide better coverage and access, the Times reports. WildBlue has waiting lists in the midwest and central U.S. where they need more capacity to serve demand. And satellite customers are being slowly picked off as incumbents expand their own coverage as they see demand for wireline service.
Update: This original post stated 150,000 subscribers, but that unintentionally excluded the HughesNet numbers! Thanks to Hughes PR firm for correcting my math.
Verizon is apparently considering selling its telephone lines in Vermont, New Hampshire, and Maine: The 1.6m local phone lines in those areas are expensive to operate, and as a large firm, Verizon doesn't receive subsidies that smaller carriers do, which allow small carriers in these markets to remain in business. Any buyer of the lines would not receive higher subsidies, according to this New York Times article.
Rural and town residents in these three states already have developing-world quality broadband service. There's a fear with a smaller firm with less capital that even less effort towards improving data services will be made.
One potential buyer of these phone lines is CenturyTel, however. The firm won the contract to build out Wi-Fi service in Vail, Colorado, and just signed up to deploy a 1,700-square-mile network in Pierce County, Washington, covering mostly rural areas and small towns, with Tacoma as the only large city in the mix. There's a slight glimmer of hope for the rural New England market in that outcome if Wi-Fi and other wireless data networking becomes part of CenturyTel's arsenal of tools in making these rural and small-town markets profitable.
A few weeks ago, I noticed that a second broadband wireless ISP was announced in midcoast Maine: I wrote about this at the time, as it seemed remarkable that an area with just tens of thousands of residents could support two firms. The companies' founders both commented on that post, and that's interesting reading, but I wanted to hear some additional detail. I got Jim McKenna, the founder of the newer firm, on the phone to chat about the advantages of wireless mesh in areas where real estate rights are easier to obtain, mountains abound, and customers have few other options. That's featured in today's 20-minute podcast. (Yes, I kept a podcast under 40 minutes.) [20 min., 10 MB, MP3]
He pointed out in the interview that the numbers for Maine are pretty staggering bad for broadband adoption, and he thinks it's about price. He said that one survey showed that only 10 percent of households passed by DSL or cable subscribed to that service. Maine is not only a poor state, it's largely rural, and I would guess that out of 1.3m residents and over 500K homes, that perhaps only 30 to 40 percent are passed by DSL or cable.
The largest cities in Maine--Portland, Augusta, and Bangor--have about 20 percent of the state's population. Everyone else is spread out. In Knox County, where Red Zone Wireless and the 1995-founded Midcoast Internet Solutions have their headquarters about two blocks from each, there are only 40,000 residents, and about a quarter live in and around Rockland, the county seat.
McKenna says that $20 per month is the right price point, and Red Zone offers a residential Wi-Fi-based service with broadband rates for that price and $50 setup; no contract, no cancellation fees, either. That's 500 Kbps down and 128 Kbps up, or about 10 times the download and four times the maximum speeds of a 56K modem. (Although when you get to some of the towns in Red Zone and MIS's coverage area, you're not seeing modem rates that high, either.)
I have a query out to talk to Midcoast Internet Solutions's founder, too, to compare notes. They started as a dial-up provider in 1995, and added Breezecom (now Alvarion) wireless gear in 1997.
The Dalai Lama offers his support for the conference: The summit, taking place in the Tibetan government in exile's home in the Himalayas, happens Oct. 22-25. The Dalai Lama released a letter in support of the event, which will focus on the advantages of wireless networks for rural communities in bringing better education, health-care information, economic development, and a host of other potential enhancements to life. The local wireless mesh network was recently highlighted in the US by BoingBoing editor and NPR Day to Day correspondent Xeni Jardin who trekked out to see many-mile-high Wi-Fi. She writes over at Wired News about the summit. [link via BoingBoing]
Wireless Week reports on Sen. Charles Schumer (D-NY) proposal: The Senator would like to get $50m added to an existing Department of Agriculture rural broadband program to provide funds or tax breaks to get more Wi-Fi built out in smaller towns and rural areas. Wireless Week wonders if this would affect EarthLink or other metro-scale network contractors, but notes that the funds would go to towns almost certainly below these companies' scale of operations.
In a recent podcast with Don Berryman, EarthLink's head of municipal networking, he said that the company has to work by the number of houses passed as a metric for whether to bid on contracts. That metric led them to give a pass on the Smart Valley wireless project in Silicon Valley.
I'm trying to make sense of Ruckus's rural strategy for its IPTV products: The company uses multiple-antenna technology combined with proprietary streaming algorithms to provide voice, video, and data (802.11b/g compatible) across a home. The rural angle is intriguing, because rural telephone companies want to bring newer services (and higher per-customer revenue for the same wired infrastructure), but they can't afford to rewire homes to handle the network for multimedia and VoIP traversing a house.
Enter Ruckus. They say that because their system can carry streaming video and deliver other services, they're the perfect complement for rural telcos. The telco still does a truck roll, but Ruckus claims its MediaFlex system of gateways and adapters takes under an hour to install, and future additions can avoid a truck roll.
An hour is a pretty nice bar to set to keep costs low, and compares favorably to other home installs. A DirecTV installation at my house required two installers and about an hour to mount a satellite antenna, set up the receiver, and train us on the system. Obviously, the satellite industry considers an hour a profitable installation when factoring in lifetime customer value.
By contrast, in a DSL textbook I read nearly a decade ago, new telco services weren't considered profitable by large phone companies until they reached the point when only five percent required truck rolls. It took DSL and cable years to reach the point where most installs involve just sending a modem out. This has changed completely again with triple-play services, as Ruckus notes.
The latest press release from Ruckus notes 16 more rural telcos in addition to several they'd already signed.
NuTel's plan is to work with existing ISPs or entrepreneurs to set up wireless broadband in small and medium sized communities: The company will handle the backend--accounts and support--while the local firm will own the customer. The plan is to organize a separate company in each community with Nutel as the managing partner. NuTel will handle bringing in broadband and mounting gear; they'll use SkyPilot equipment. They want partners who are qualified to handle truck rolls.
NuTel appears to be also following SkyPilot's original dream of customer-mounted mesh networks. Rather than negotiate with cities and utilities, SkyPilot--when it was a mesh network builder that made its own equipment rather than solely an equipment vendor--wanted to use each customer's location as a possible extension to the mesh. Their equipment supports this, but the companies that deploy their gear haven't pursued this original dream to that extent. NuTel appears to want the right to mount mesh extenders on customer buildings and houses.
The company has 8 to 10 operating partners lined up, they say in this Wi-Fi Planet article, and think they could hit 200 by the end of 2007. They wouldn't compete with municipal networks; this is a final-mile play in broadband-scarce areas.
Pricing could run about $60 per month for 1.5 Mbps access and VoIP service or as little as $15 per month for a 200 Kbps dial-up replacement. Other rates will be available. They expect to work in a 14-state area, including parts of the Mississippi Valley, the upper Midwest, Texas, and California.
Their VoIP service isn't Internet-traversing telephony, but VoIP to their network operation center where traffic is segregated out. This is how some DSL and cable firms handle VoIP, too, providing a much more predictable quality of service from home to PSTN.
A pair of bills introduced in Congress last week want to leverage unused television channels: The two bills want to move forward on allowing wireless broadband over television channels in areas in which stations aren't broadcasting. The New America Foundation, which promotes multiple uses of existing frequencies and open spectrum policies, says 40 to 80 percent of TV spectrum is empty in rural areas. The bills differ in how much of this spectrum they'd allow to be used. When the digital television transition is complete, now mandated for Feb. 2009, the remaining analog frequencies will be auctioned off, and thus if a pre-existing "white space" use were in place, that might reduce the spectrum's nationwide value.
The LA Times weighs in with another story on the 700-square-mile Wi-Fi network in Eastern Oregon: The details don't appear much different from the Associated Press's October filing on this subject, although the emphasis on the chemical weapons emergency communications system is emphasized. (Nancy Gohring first noted the cloud and it's chemical weapons connection after receiving a press release back in Feb. 2004 on Wi-Fi Networking News.)
The AP story said that Fred Ziari, founder of EZ Wireless, footed the $5 million bill himself. Sam Howe Verhovek--the former Northwest bureau chief for the New York Times--writes in the LA Times that "The wireless network, which cost about $5 million to set up, is almost entirely paid for from federal, state and local emergency-preparedness funds." Those statements are probably not as inconsistent as they sound: it's the difference between capital expense and operating income.
Onion farmer Bob Hale is a poster child in both articles.
UnWired: Rural Wireless Conferences runs Nov. 1-2 at U of Georgia, Tifton: The conference will focus on the use of wireless technologies to enhance farm operations and rural life. I was asked to attend, but it's a bit geographically and topically far off from my usual haunts. Still, there's a lot of intrigue in statements like, "representatives from Cattlelog will show how radio frequency identification can help the cattle industry run smoothly and safely."
Off the beaten path and off the wireless revolution: The New York Times writes about how people's pursuit of a little peace and quiet might bring them too much quiet. No cell phone service unless they contort themselves, and no wired broadband Internet. Newer gated and resort communities are factoring in the cost of bringing out high-speed service--without it, they're not a sell.
The article mentions several projects close to my interest, including Wi-Ran, the rolling WLAN installed on Hampton Jitneys that I wrote about for the Times a year ago July (it's about fully installed on buses now); Fire Island Wireless, a tireless effort by Wi-Ran and CEDX's Craig Plunkett to bring one element of the 21st century to that not so distant place; and Nantucket's WiBlast, pushing broadband wireless across Melville's old stomping grounds.
There's an argument that comes up whenever one discusses bringing broadband to places people go to escape: isn't the whole point of escaping disconnecting? It's true. But there's another part of this, which is that smaller communities are more likely to thrive these days when people can remain connected to the rest of the world while they're there. Many communities further and further afield from urban centers--so-called exurbs or even pure small town--have better economies because of telecommuters or small businesses that don't need to be in the middle of it all.
Researchers at Intel Research Berkeley are working on way for remote people in developing countries to use the Internet and email: End users in a village without an Internet connection would write an email and hit send but the requests to send would be bundled and saved. When the bus, equipped with an antenna, travels through town, its antenna picks up all of those requests and also drops off email or even requested Web sites. When the bus reaches a bigger town that has a connection to the Internet, it exchanges information there.
The application sounds exactly like one being used in Cambodia but with motorcycle mail delivery people. That solution has been commercialized by First Mile Solutions.
Columbia Energy plans to use Vivato access points to serve rural customers in eastern Washington: The counties currently have no broadband access options.
Rural utility companies in Washington State have been very forward thinking in bringing broadband to residents. They can use some infrastructure that they already have such electrical towers and backhaul to build the network. In some cases, the law prevents them from selling the services directly to end users so other service providers lease the access. Broadband access could dramatically affect the way that farmers in the region do business.
Update: An InfoWorld article offers additional details on the installment. Columbia Energy hopes that farmers can use the network for remote control and monitoring of irrigation pumps and other farm technology. The price is right for access. For a symmetrical 256 kbps service, customers will pay $39.95.
Seattle-area firm focuses on towns under 50,000 to bring data at affordable price: By partnering with local utilities in these smaller towns, Maverick can reduce its capital risk and focus entirely on service. The company charges $25 to $60 per month for rates from about 128 Kpbs to 1 Mbps. They may be in 23 markets by fall 2005, including their current deployments being built out in Kennewick, Silverdale, and Poulsbo.
Although this brief company overview doesn't mention it, an important application for having these kinds of robust Internet connections is for Internet telephony. If you're in a rural area, "local calling" is quite local. A VoIP line from Vonage or Packet8 could dramatically decrease the charges for calling within the state as well as for long distance.
Nepalese community wireless network helps sell, trade yaks: Villagers in remote Nepal are using a wireless network to communicate between where they live and where others take care of the yaks. They find out whether the tenders need medicine or assistance, and the herdspeople use NetMeeting to videoconference with their families. Several villages are hooked up with each other and out to the Internet. Distance learning is in the future.