Entries in Broadband Developments (12)

Thursday
Jan122012

For ILEC with 210k-Mile Network, IPTV Just "Another Application"

It appears CenturyLink didn't want to miss making an announcement at last week's Citi Entertainment and Media Conference, going with a "me too" approach to IPTV services. The "announcement" was modest, as CenturyLink revealed that they would be extending their IPTV services to one or two new markets in the former Qwest territory. Currently CenturyLink's Prism IPTV service passes 1m homes in select markets and, as of 3Q11, had 50k subscribers. For a telecom provider as large as CenturyLink, however, those numbers are relatively small—but what's interesting is how CenturyLink executive vp and cfo Stephen Ewing characterized IPTV: as just “another application.”

Ewing said, “The incremental cost of us rolling out IPTV is not significant. Once you get a 20 Mbps service out there to a customer the incremental cost of layering IPTV on top we view it as another application.” These sentiments, of course, square with what we've been saying for a while—that since so many providers spent so much time and money on network build-outs and improvements, this was the year to capitalize on those networks with new services, content, and applications.

But CenturyLink's "announcement" seems pretty modest, and offering IPTV in only two markets seems like a paltry "expansion," considering that the company has 210k miles of fiber. With its acquisitions and its expansive network, rollouts like IPTV appear to be an obvious next step. For now, Ewing said that, “The (IPTV) customer base is still small, but we did increase the customer base 25% during the third quarter.”

CenturyLink's network design also makes IPTV easier to distribute, as all of its video content is put into a head end in Missouri and, from there, distributed to each of the 8 markets currently served with IPTV. Each market also has its own mini-head end for local content, and all content is delivered over CenturyLink's fiber network.

Last fall, the company denied speculation that it would expand its Prism service to former Qwest markets. CenturyLink had just inherited Qwest's 1m DirecTV subscribers and was committed to satellite TV. But now the Louisiana-based ILEC says it's following a two-pronged approach to video services: satellite and IPTV. It's a strategy that allows CenturyLink to hedge its bets, capitalize on the satellite subs it's already inherited, and continue to anticipate consumer trends, as greater numbers of Americans access over-the-top video services like Netflix. Ewing said, “If over the top eventually takes some of the traditional TV market, we think we'll be well positioned with the bandwidth with have to our customers to participate in that.”

What is surprising, however, is that CenturyLink does not seem to have an overarching strategy to build out broadband to former Qwest markets. So far the company has just said, vaguely, that it plans to "expand its broadband footprint." Broadband has been a key component to the ILEC's business strategy for a while now, and in 3Q11, the service provider added 57k high-speed Internet subscribers, versus only 12k in 2Q11. Part of these gains, however, come from Qwest's FTTN initiative, which CenturyLink has continued after the acquisition. By the end of this year, CenturyLink estimates that it will pass 5.4m homes with FTTN.

In FTTN service areas, 75% of customers enjoy 20 Mbps speeds, while the remainder of subscribers have speeds of 10 Mbps or higher. As for CenturyLink's big picture, about 20% of subscribers can get 20 Mbps, over half can get 6 Mbps, and two-thirds can get 6 Mbps or higher. According to Ewing, “The speeds will continue to improve over 2012 and future years as we continue to build out the IPTV footprint and the Fiber to the Node footprint in the Qwest markets primarily,” he said.

Of course, CenturyLink will find itself increasingly in competition with LTE services (which we will look into more next week), but for now Ewing said CenturyLink seemed to have an edge, due to its increasing bandwidth. Ewing said that average customer usage is continuing to rise to about 18 Mbps, double where it was a year ago.

Wednesday
Jan042012

A New High Wire Act Along New Hampshire Roads

Sometimes when we discuss the need for broadband in remote or rural areas, it's easy to forget just how much work it takes and how many hours are necessary to complete a fiber build-out. As a case in point, consider New Hampshire, where this winter residents will see more than just snow along the road. There, crews are working demanding hours for Network New Hampshire Now (NNHN), hanging fiber from already-existing telephone poles. Last week, Seacoast Online reported that the BTOP-funded, 750-mile fiber network was “moving into the next phase,” thanks to diligent work and considerable man-hours. But the project is taking time, thanks to a complicated build-out process that involves “stringing cables from pole to pole to pole—over 750 miles in cities, suburban streets and back woods—a lot of hours spent in 'bucket trucks' doing the physical work, but just as many [crew members] figuring out how the cables can fit on the poles, which are owned either by the electric company or telephone company.”

As a public-private consortium, NNHN oversees the $65m project, with $44.5m in grants from the federal stimulus package and $21m in matching funding from other sources. It's an ambitious and far-reaching broadband initiative that, according to NNHN, will “ensure that residents of ten counties in New Hampshire will be able to plug into a powerful future with internet connectivity.”

There are three main components of the network: the middle-mile fiber backbone, last-mile fiber-to-the-premises (FTTP), and a closed middle-mile public safety microwave network.

The middle-mile network will stretch all across the Granite State—from the Seacoast, across the more populated southwest, up to the northwest, and all the way to the remote North Country and mountainous Lakes Region. NNHN says it will “place network access points in or near existing central telephone office locations along the path, allowing all commercial broadband providers to potentially leverage the fiber optic network build across the state regardless of protocol, service or technology.” This portion of the broadband network is being overseen by University of New Hampshire Information Technology—a leader in the initiative.

A variety of partners are coming together to provide last-mile connectivity through what NNHN is deeming an “innovative model called FastRoads,” which will provide fiber-optic connectivity in 35 communities in the southwest part of the state. According to NNHN, these 35 communities translate into 1,300 homes and businesses.

Finally, a closed middle-mile microwave network called NHSafeNet will be made available for public safety, public television, transportation and mobile broadband communications on mountaintops across New Hampshire covering 3,800 square miles.

As with any statewide broadband initiative, the list of partnerships for NNHN is quite long. Last April, Chelmsford, Massachusetts-based Waveguide announced that it would “provide engineering and construction services,” along with New Hampshire Optical Systems, based in Nashua. Additionally, Green Mountain Communications is constructing NHSafeNet, along with other state organizations and departments.

But, despite good planning and an impressive assembly of partners, the issue of actual, physical work remains. And it takes time.

Waveguide president Rob Carmichael described the process of preparing for and hanging fiber to Seacoast Online last week: "We have a right to the space, but the space has to be made available. First we do a survey, walk the pole line with both utilities. We look at the pole, take measurements, engineers in the field decide on this one, power can move up, phone can move down, cable TV can be rearranged, whatever is needed, then you'll have space," he said. "There are no unique issues, other than the timelines. Building 750 miles in this time period is fast.” Completion date for the network is slated for June 30, 2013.

Of course, in addition to deadlines and man-hours in the cold, the network has also faced criticism from existing providers in the area. FairPoint Communications has already built a similar fiber backbone in the area, which it uses to provide its DSL service. In more populated areas like Nashua, in the southern part of the state, FairPoint's FAST provides fiber-to-the-home for residents. But in many “overlooked” regions of the mountainous state, there is no fiber connectivity.

With an impressive scale, NNHN's 750 miles of fiber is just one of many New England fiber builds, as Vermont, Massachusetts, and Maine are all stringing fiber to underserved areas of their states. In Maine alone, 1,100 miles of fiber will crisscross the state, connecting businesses and residents who cannot currently get high-speed service.

But just like in New Hampshire, these networks, too, will be completed in difficult terrain, in a variety of weather—one measurement, one survey, and one cable line rearrangement at a time. No faster.

Thursday
Dec292011

2011's Broadband Bonanza Means New "Explorations" in 2012

While researching for a profile on Paul Bunyan Communications several months ago, I was struck by the cooperative's 60-plus years of underdog status—a fitting 2011 year-end metaphor for many of the companies I talk to across the country. There, in Minnesota, was a cooperative that organized in 1950 to connect underserved areas, and was helped along in its goal by federal legislation that sought to improve rural telephone service. Now, as 2011 draws to a close and we look ahead to what 2012 will bring, many companies I've interviewed this year are still trying to reach underserved areas—this time with broadband—and doing so is part of the larger, national plan to bring valuable high-speed internet connections to every home and business, in every community. With the year ending, these companies and co-ops are also hoping that broadband subs will help offset landline losses; this may be the last year for such a ying-yang balance, too, as broadband growth slows and it becomes less likely these adds will be able to offset the losses going forward.

A sweeping dedication to broadband will certainly continue into 2012, but boy has the game gotten more complex.Thanks to the recent detailed analysis offered by our own Cassandra Heyne, I won't use this space to parse out the specifics of federal funding for broadband or other regulatory hurdles facing rural providers. But I would like to reflect on what 2011 has meant for the rural service providers, cooperatives, start-ups, and advocacy groups I've spent the year researching and interviewing. Whether the goal was to tap into vertical markets, harness the potential of the cloud, or test out new services and platforms, without a question the name of the game this year was broadband—how to build-out fiber networks, how to increase speeds, how to offers services via broadband, how to pool resources and efforts through alliances and consortiums, how to share resources and infrastructure, how to get into the data storage market, and so on. Ultimately 2011 centered on a challenge and a source of opportunity; both are captured in the phrase I heard over and over again—“broadband build-out."

2011: Betting on Broadband

Just last week, new ceo of 3 Rivers Communications David Gibson summed up one of the most fitting characterizations for rural and independent companies. In an interview for the Great Falls Tribune, he said that, without a doubt, “Fiber is the way of the future... When you replace all that copper [with fiber] the service quality is better; you get much faster broadband speeds. You can offer IPTV. It's just good all around, it's where we need to be to position ourselves.” But Gibson went on to note the snags in building out rural broadband—threats to funding by “problems... in the mechanics” of the new Connect America fund and threats of stiff competition from satellite and wireless broadband, encroaching cable companies, municipal-owned broadband and others.

This year, I've talked to rural co-ops, independent providers, advocacy groups and consortiums in Kentucky, Ohio, Minnesota, Tennessee, Virginia, Georgia, South Carolina, West Virginia, Texas and the Dakotas, and for all of them, broadband was central to their goal of providing new services and connecting unserved or underserved rural communities. In some cases, broadband meant better connectivity for local high schools, community colleges or universities; in other cases, there were advances in telemedicine, improvements for tribal communities, or farming technologies. But in every case, the directors and spokespersons I interviewed insisted that broadband brought with it the possibilities for a changed community and more vibrant opportunities for rural residents and businesses. And they had examples of these improvements... many, many examples.

The question remains, however, do these broadband build-outs actually mean more stability for the ILECs and co-ops, many who find themselves in an increasingly competitive market? Will all of the federal dollars in broadband grants and build-outs in 2011 equal more advancements to rural areas in 2012? Will rural providers need to delve more deeply into new options like LTE and cloud services to remain relevant? Or will fiber as the “way of the future” actually mean subscriber retention and added revenue? These are all questions to investigate in the coming year, by talking to the experts on the front lines: the rural providers themselves.

2012: Building on Broadband, Exploring New Territory

Just recently we've seen announcements about IPTV and LTE—two services that are getting attention from rural ILECs and co-ops who consider them potential golden tickets. Most likely, 2012 will bring more in-depth look at what these services might mean for the independent communications provider industry—most specifically for the rural companies I talk to regularly. LTE's potential is up in the air (pun intended), but IPTV has already become a key talking point for ILECs who want to attract and retain customers in their communities. Earlier this year, we ran the numbers and found that, for the companies who disclosed that they provided video services, “their rate of decline in access lines... was sharply lower than those in the survey who did not provide data on video subscribers.”

Several of the companies I profiled to this year—Palmetto Rural Telephone Cooperative and Paul Bunyan Communications, to name two—named IPTV as central to their business strategy going forward. Earlier this month, Texas ILEC Valley Telephone Cooperative announced that it would offer a hybrid IPTV service that combines HDTV, DVR and cloud services through a single TV input and interface. And last month, Griswold Cooperative Telephone Company announced it would use its hefty $12.7m RUS loan, in part, to lay fiber that would support advanced services like IPTV.

As for LTE, it will be interesting to see what comes of the partnership between rural ILECs/ rural cellular providers and Verizon's Rural 4G LTE Program. Just last week, Pioneer Cellular (of Kingfisher, OK-based Pioneer Telephone) announced its first successful end-to-end data test with Verizon's 700 MHz spectrum, and so far Pioneer is just one of 13 rural providers partnering with Verizon for use of its LTE network. The goal, of course, is to provide LTE services in areas where Verizon does not plan to extend coverage, and, through the program, rural partners are allowed to build and operate their own LTE network, using some elements of Verizon's core network. Just as cooperatives and partnerships have helped bring fiber to rural areas, it's possible that partnerships between small, rural providers and the Big Guys could supplement existing services and retain customers. It's possible.

Ultimately the influence of LTE in rural areas remains to be seen, but it is a step toward spectrum use that so many rural providers have looked into but not developed. In my own discussions this year, I have heard numerous company spokespersons say that they were currently “exploring the possibilities” of spectrum for a variety of services, but had not made any definite commitments. Perhaps 2012 will bear the fruit of these, and many other, “explorations.”

Tuesday
Nov292011

Griswold IA Cooperative Looks Forward to $12.7m Broadband Loan

Much-Needed Funds will Help “Ramp up Speed and Bandwidth”

On November 14, JSI Capital Advisors reported that Agriculture Secretary Tom Vilsack announced the recipients of over $400m in USDA Rural Utilities Service broadband funding. 22 rural telecom providers in 15 states will receive broadband loans ranging from $3.7m to $32m “to build, expand and improve broadband in their rural service territories” (The Monitor: Vilsack Announces Additional Telco Funding to Expand Rural Broadband).

One company slated to receive funding immediately jumped out to me—Griswold Cooperative Telephone Company (Griswold, Iowa), which will receive $12,747,000 “to complete a system-wide FTTP network, enhancing broadband service to all subscribers.” I grew up about 20 miles away from Griswold, so I was naturally curious to check in with general manager Robert Drogo and learn more about his company’s plans to expand FTTH near my homeland in Southwest Iowa.

Drogo explained that the Griswold board of directors started discussing their options two years ago, and in order to be successful “we knew we had to look at fiber.” In addition to improving Internet speeds and capacity, the fiber will also support other capabilities like IPTV for all customers (which Griswold currently offers just in the towns it serves). Over the past 18 months, Griswold has been deploying middle-mile fiber and preparing for the end-goal of FTTH, “should we be fortunate enough to get the loan.” Griswold’s $12.7m good fortune will be used to take the company from its current 60% fiber deployment to FTTH for its entire customer base—1,700 lines in the communities of Griswold, Lewis, Elliot and Grant.

The company’s current DSL speeds go up to 3/1 Mbps tops, but with IPTV also running on the lines to the in-town customers, the bandwidth is getting crowded. Once the fiber is fully deployed, Drogo estimates that customers will experience 5/1 Mbps at the low end and 10/3 Mbps at the high end. He also commented that “now speed isn’t an option,” and it is absolutely necessary for the company to keep reaching for higher limits—hence the importance of the RUS loan.

Many RLECs surely hope that deploying high-speed FTTH will attract new businesses to their service areas, and a few new medium- or large-sized businesses would obviously be a real catch for a rural community like Griswold (located about mid-way between Des Moines and Omaha). Drogo wasn’t sure if the project would help attract any significant new businesses to the area. However, he explained, “I don’t see a big draw on the top end, but [the FTTH] will definitely be a benefit to home based, small and agricultural businesses.” As I grew up in this area, I can certainly see the appeal of being able to run a business from home—the hour plus drive to Omaha or Des Moines can get quite monotonous (especially every day for a job), and volatile Iowa winters definitely add an element of uncertainty to a long commute. Griswold’s FTTH may facilitate more teleworkers and home-based start-ups, and it will surely benefit the area’s important agricultural economy.

Companies eager to deploy FTTH are often quick to claim that the investment will bring new business to struggling rural economies, but it really might be just as important to focus on bolstering the community’s current small businesses. Hopefully Griswold’s broadband loan will help ensure that the local businesses (current and future) will have the tools to move forward at a pace that matches economic and business development in urban areas.

The fiber expansion should help Griswold become more competitive on the video front as well. IPTV will become available for the rural consumers, who currently can only receive pay TV from satellite providers. Of course, the FTTH will also give the rural consumers an opportunity to “cut the cord” on traditional video if they desire, since the FTTH connections will be able to handle plenty of Netflix. Drogo speculates that Mediacomm may come to the community in several years, but by that time Griswold could have a significant competitive advantage on video services. Drogo does not see wireless broadband as an immediate competitive threat, but he anticipates that 4G will eventually be available in the area—although that could also be years down the road too. Even so, it is likely that wireless broadband will complement, and not substitute, Griswold’s FTTH service offerings.

Griswold will probably not see the $12.7m RUS loan money for at least 18 months, but the company has been approved for interim investments such as ordering the fiber. Drogo believes that the $12.7m will be enough to complete the entire FTTH build out. He added that this amount is “very conservative” and was calculated to account for various regulatory, legislative and resource uncertainties. Drogo is “not concerned” about the bad publicity that has been hanging over USDA and BTOP broadband loans like a dark cloud in the past few months. For the most part, RLECs have been putting their broadband loans to good use and have not been caught up with any of the various failures or mismanagement catastrophes that some other  loan recipients have encountered.

With this $12.7m broadband loan, it sounds like Griswold Cooperative Telephone Company will be in a position to achieve its strategic goals and bring benefits to the community. The FTTH deployment could solidify the company's competitive advantage if it is completed before cable and 4G competitors start knocking on the door.

Thursday
Nov172011

From Appalachian Stereotypes to Broadband Connectivity

Transforming a Region: Horizon Telcom Partners to Connect Appalachia

In nearly every study conducted on broadband penetration rates, one region of the U.S. is consistently listed as behind the times—Appalachia. Still, despite its debilitating stereotypes and rambling topography, some areas of the region are quietly growing with industry, education, scientific research, and health care. But none of these sectors can thrive without broadband availability, a fact that inspired Ohio Congressman Zach Space to advocate for widespread connectivity in the region. Space collaborated with other smaller broadband advocacy groups in the area and, after several years, Connecting Appalachia finally found public and private sector support to make it a reality. Construction of the middle-mile project began this spring, thanks to combined funding from the NTIA and Chillicothe, Ohio-based Horizon Telcom. Many other organizations, businesses, academic institutions, and healthcare providers joined the effort, and as Brooke Eiselstein, public relations specialist for Horizon, describes it, Connecting Appalachia is “a testimony to partnership.”

The project is also a testimony to perseverance. Originally, Eiselstein said, Horizon Telcom worked with Congressman Space and a group of consultants to obtain an NTIA Broadband Technology Opportunity Program grant that would be a last-mile network. “We wanted every person in Southeast Ohio to receive broadband,” Eiselstein said. “Our grant was denied. They didn't find it practical to fund a broadband network that would carry aerial fiber several miles out to the middle of nowhere when only three houses could get it, and who's to say they [these residences] would even sign with us?”

Eiselstein said they re-grouped and “wrote the grant a second time, although this time we were asking for money to build the network to only the middle mile consortium. This entailed hanging fiber on existing utility poles all down major highways to hit large businesses, K-12s, colleges, hospitals, health care entities, government agencies, MARCS [multi-agency radio communication system] towers, and industrial parks.” The NTIA then agreed to fund 70% of the $100m middle-mile project, and Horizon stepped in to pick up the remaining 30%. The group was formally awarded the grant on August 18, 2010, and they will have exactly three years to have the 10MB synchronous connection network up and running.

But the process of securing funding was just one aspect of Connecting Appalachia's evolution. In many ways, the project is a mosaic of smaller, local efforts, starting with three hospitals that came together and decided they needed a broadband network for health care in southeastern Ohio. “Adena, O’bleness, and Holzer [the hospitals] joined together to form the Southern Ohio Health Care Network, and received a grant for $18 million from the FCC,” Eiselstein said. “Later, Horizon was awarded the contract to construct the network.” News of their efforts spread, and soon, Eiselstein said, local districts came together with Congressman Space to “develop a vision for what would become Connecting Appalachia.”

Eiselstein said that the project enjoyed a lot of press in local, regional, and even national press, and as a result their list of partners is quite extensive: the three lead healthcare providers; educational partners across the state; several state government agencies and the Appalachian Regional Commission; federal groups including the FCC, USDA, NTIA, and BTOP; local development districts; and Connecting Appalachia's consultants, Reid Consulting Group.

Such a wide variety of early partnerships paved the way for a larger broadband backbone, while also ensuring a customer base. Eiselstein said, “While we were writing the grant we had to identify 592 Community Anchor Institutions (CAIs). However, many of those customers needed services 'now' (then) and have already signed with other providers. Some have signed monthly contracts so they can switch providers after the network is built.” 

Before the BTOP grant was awarded, Eiselstein said, “We were awarded the Southern Ohio Healthcare Network grant. This allowed us to connect all rural hospitals in 13 counties. Most of these have already been connected. Now, the BTOP grant allows us to connect another 21 counties, totaling 34.”

When asked about cost and Horizon's concerns for return-on-investment, Eiselstein said “absolutely” the group will bring in new customers, adding, “We have to keep in mind that the grant was awarded because Appalachian Ohio has been left behind in regards to technology. This area has suffered because of the lack of broadband, and this was a great opportunity for Horizon to continue its 116-year tradition of providing good service to its neighbors. Horizon cares about putting Appalachian Ohio on equal footing with other areas of the state.” In order to elevate the area's residents and provide more advanced opportunities, Eiselstein said, “It truly is essential that a fiber optic network be built that would provide world-class, high speed Internet. Customers will finally be able to be on the same playing field as colleagues in more urban areas. New customers will be able to purchase internet connections, point-to-point connections, PRIs, and VOIP lines. We are also offering a business video package in many of the counties.”

As an investment opportunity for Horizon, Eiselstein underscored that the network “has the potential to reach 11m customers with up to 10GB synchronous connection. Of course we will not be reaching this many customers, but that is the potential it has.” She added that it was actually a strength for Horizon to be a small company, making it more “nimble and flexible when it comes to creating a solution-based service specific to our customers’ needs.”

Eiselstein has been an ambassador for Connecting Appalachia, tasked with “going to all the counties, joining the chambers, meeting the business owners, elected officials, mayors, commissioners, chamber executives, and so on. We go to trade shows, luncheons, and banquets. We usually have a table where we can distribute our annual reports, brochures, and giveaways that explain the project and who we are. Our response has been very positive. Everyone agrees there is not nearly enough broadband in the region.”

While the project itself will only affect the Appalachian regions of Ohio, Eiselstein notes that the broadband gap expands to other areas of Appalachia as well. “People in this region have been starving for Internet for years,” Eiselstein said. “When people see our trucks on the side of the roads hanging fiber, they immediately call into the office, or even stop to talk to the technicians about availability. The people of Appalachia are extremely excited and relieved to finally have access to Internet speeds and bandwidths that allow them to run their businesses and their lives more efficiently.”

As for the project's current phase, Eiselstein said the group has begun to construct the network's backbone, and are primarily hanging fiber on existing pole routes. A very small portion will be buried. Connecting Appalachia will be providing some last-mile connectivity to businesses. “These last mile costs are typically built into the quote for the business either in an up-front cost or amortized over the life of the contract,” according to Eiselstein. “We are also providing the last mile connection to the community anchor institutions who sign contracts for services. We are also partnering with WISPs to reach residential customers” since the BTOP grant did not fund the last-mile piece of the project.