Entries in Wireless Broadband (5)

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.

Sunday
Dec112011

Cultivating Broadband: Group Works to Connect Kentucky


In a recent opinion piece on the ever-provocative Huffington Post, writer Timothy Karr declared “America's Internet—Now as Good as Angola's!” Hyperbole? Of course. But according to the U.S. Department of Commerce's “Exploring the Digital Divide” report, released last month, some states are just not living up to their connectivity potential. Alabama, Arkansas, Kentucky, Mississippi, and New Mexico have the dubious distinction of being the five worst states for broadband adoption—with percentages of 55%, 52%, 58%, 51%, and 58%, respectively. Overall, the average broadband penetration rate for the entire U.S. is about 65%. But in the bluegrass state, the public-private partnership ConnectKentucky has been working since 2002 to address the state's need for broadband—taking a county-level holistic approach to promote “a statewide technology acceleration program.” The vision for ConnectKentucky started out in response to the Kentucky Innovation Act of 2000; it has since become a national model for broadband deployment and the basis for the Broadband Data Improvement Act, which was funded as part of the American Recovery and Reinvestment Act of 2009.

According to ConnectKentucky's Executive Director René True, the Commerce Department report is an accurate portrayal of what is occurring in Kentucky. The lower rates are mostly due to the state’s rural nature and relatively low per capita income. As a result, True believes that ConnectKentucky needs to work on “a project-by-project basis,” in order to tap into the potential of wireless broadband and design networks that fit individual community and county needs.

It would be an understatement to say that ConnectKentucky has its hands in nearly every rural town and county in the state; in fact, in many of those areas, ConnectKentucky has led wireless broadband initiatives by mapping broadband gaps, assisting with wireless network design, drafting requests for proposals, and overseeing broadband network build-outs. True explained that ConnectKentucky is an organization that targets unserved and underserved areas, then works to bring broadband to those communities.

Rather than a one-size-fits-all approach, ConnectKentucky is able to suit broadband services to the needs of individual areas. In some cases, that means going with AT&T (NYSE:T) or Windstream (NasdaqGS:WIN) for network build out, but often the group works with providers who are already in place in those areas, such as Altius Communications, Q-Wireless, KY Wi-Max, and Foundation Communications. According to True, “Connect Kentucky has been involved with some of the smallest broadband communications players serving rural Kentucky.” In fact, he said, “from a pure deployment of services to rural unserved areas, ConnectKentucky is much more likely to be talking with small local companies rather than bigger multi-state companies.”

One such initiative includes “Coal to Broadband”—an innovative project that is funded by a grant from the Appalachian Regional Commission (ARC) and matching multi-county coal severance funds. ConnectKentucky oversees the initiative by providing technical assistance and project management, from conducting research and public awareness campaigns to assisting with network design proposals. This September the group announced it had selected wireless broadband provider Altius Communications for Coal to Broadband's ConnectBELP network build out; the fixed wireless microwave network will connect Breathitt, Estill, Lee, and Powell counties in eastern Kentucky. “The sparse population and rugged topography of the four counties make it difficult for residents to receive broadband services were it not for a public/private partnership,” True said. He also noted that “original funding amounts from ARC and Kentucky Department for Local Development coal severance grants totaled $630,600.”

In other counties of the state, ConnectKentucky has worked to secure broadband for a seven-county region of the state in the ConnectGRADD project. At the outset Daviess, Hancock, Henderson, McLean, Ohio, Union, and Webster counties had next to no broadband access, particularly in the most rural areas. The rolling hills and sparse population made the regions unappealing to larger providers and traditional wired broadband, but it was a perfect proving-ground for wireless broadband. The seven constituent county governments asked ConnectKentucky to assist them in finding vendors who would build a network reaching nearly 100% of households and businesses. The completed network coverage included nearly 100% of existing industrial parks, more than 93% of residences, and offers free wireless hotspots for public use. According to True, “The ConnectGRADD project is serving over 1,800 customers, starting from a zero base.”

Danville-based KY Wi-Max was the local broadband provider of choice for ConnectKentucky's project in Washington County, and True recently said that Glasgow-based South Central Rural Telephone Cooperative plans to team with Windstream to build broadband networks affecting small portions of Warren County.

In addition to a county-by-county approach, ConnectKentucky also assists in bringing broadband to individual towns. Such was the case in Prestonburg and Williamstown, where local cable providers didn't reach outside town limits and residents were left without broadband services. With a fixed wireless broadband system now in place, not only do rural residents surrounding Williamstown enjoy broadband connectivity, but Grant County now has a 94% broadband footprint, up from 58%.

Each of these wireless broadband initiatives echo the competitive growth rates our own Richelle Elberg predicted back in November. She wrote that, in the next few years, “we think the wireless substitution factor and higher overall penetration [will] force wired broadband connections into a slow decline. Admittedly wireless isn’t a perfect solution for all broadband applications, but on the other hand, it’s likely to get better and it’s mobile.” For certain rural areas, of course, wireless broadband is the most cost-effective and the most practical in terms of infrastructure build out—and one can't help but note how partnerships between local providers, national providers, city governments and other municipalities are becoming the norm in areas like rural Kentucky.

But does build out always equal adoption? It seems every broadband penetration study notes that those who aren't connected don't necessarily want to be, nor do they feel that broadband is useful to them. In these cases, True said changing the adoption rate is going to require showing the relevancy of broadband, providing it affordably and increasing technology literacy. “It’s going to require real grass-roots, community-level efforts,” he said.

For ConnectKentucky, such grass-roots efforts are manifest through public relations campaigns and community involvement projects. True noted ConnectKentucky's Computers 4 Kids program, which “brings together public and private partners to help disadvantaged children and their families join the Information Age.” He said that the program has “successfully placed over 3300 computers and other technology with disadvantaged kids and families, not-for-profit after school programs, community centers, libraries, and schools.” These computers and the (hopefully) accompanying broadband availability is crucial to areas of Appalachia, True said. “Without broadband availability, rural communities will fall further behind economically, educationally, and from a total quality of life view.”

As an example of a community-specific technology development program, True also mentioned the work accomplished through ConnectKentucky's Connect Equestrian View initiative. Focused on the Equestrian View neighborhood—a low-income area of eastern Kentucky—this project not only brings hardware like computers and printers to disadvantaged families, but also “subsidizes up to six months of broadband access, technology training and other technology resources to increase access, adoption, and use of technology by residents,” according to True. The project is a partnership with the Kentucky Housing Authority, Lexington Housing Authority, and Lexmark.

While ConnectKentucky's community involvement doesn't necessarily provide a monetary return-on-investment or follow a typical business strategy, it does work on closing the broadband gap in its own way—by addressing unserved and underserved areas and, at least for a time, providing opportunities for residents to see broadband's potential. For True, this is central to ConnectKentucky's overall mission to foster broadband growth in the state through an abundance of partnerships, all with varying but complementary goals. True calls broadband “the killer app” for rural areas and hopefully, for ConnectKentucky and all its partners, their efforts will be enough to one day deem Kentucky “broadband's most improved.

Monday
Oct312011

Energy Industry Boom Fuels Growth at ERF Wireless

Wireless Provider Taps Vertical Markets

As a wireless communications company boasting a 212% YoY growth in revenue, ERF Wireless stands out as a success story in today's difficult and competitive market. The key to the company's business plan lies in something we've been highlighting for a while: the power of vertical markets. According to ERF founder and ceo Dr. Dean Cubley, the company's strength is its diversified business, which supplies high-capacity wireless services to three main sectors—WISP services for rural business and residential customers, secure wireless communications services for the banking industry, and “nomadic communications solutions” for the energy industry. With this model, Cubley says growth in one sector can counter stagnation in another sector. Right now, ERF's sustained commitment to providing wireless communications services for the energy industry has allowed ERF to be profitable over the last two to three years. When so many other companies are reporting losses and laying off employees, Cubley says ERF is “just having a hard time keeping up with all of the business.”

Cubley founded ERF back in 2004, after decades in the wireless industry. Since then ERF has acquired 16 companies—mostly wireless companies in rural areas and, most recently, in oil and gas producing regions. Now, Cubley says, “anywhere there's oil and gas, we're interested in networks there.” Not only can ERF supply wireless to the energy companies, but as people come into the regions, rural banks and rural customers also look for services, which ERF can supply off of the same networks. “We use a little bit of everything: licensed spectrum, unlicensed spectrum, and what we use depends where we are,” Cubley said. The company uses 6 GHz licensed spectrum on the backbone, typically, but also uses 3.65 GHz in rural areas if there is interference on unlicensed spectrum.

Based in League City, Texas, ERF is well-positioned, geographically, to grow alongside the booming oil and natural gas industry. The nearby Permian Basin spans from west Texas into New Mexico and represents one of the largest oil and natural gas fields in the country. It's a 55-county area where the number of oil rigs has tripled in the last two years, where oil companies have rented hotel rooms a year in advance for their employees, and where the need for manpower seems insatiable. This surge in production and influx of people brings with it the need for wireless connectivity, both for day-to-day business operations and for personal communications. “Our customers operate in very remote areas,” Cubley says, “where it can be a hundred miles or more to the nearest landline, with no towers for wireless connections.” This is where ERF comes in, as a close partner supplying communications services to the oil and gas companies.

ERF operates about 150-200 mobile broadband trailers, each equipped with a 50-foot tower that can be erected by a technician. The trailers can be driven to any remote drilling site and, by connecting back to the company's network, enable powerful high-bandwidth, low-latency wireless broadband in any location. In the past, Cubley says that communications “had been provided by VSATs (satellite), but software designers have developed programs that will not run over VSAT. They [the programs used by oil and gas companies] need high capacity and low latency, and we can provide that kind of system at the same cost as a VSAT.”

Right now, ERF provides this “nomadic solution” in the Southwest and southern Midwest, but Cubley says ERF is opening an office in North Dakota next month. The Williston Basin region of the Dakotas is enjoying a similar (but more recent) energy industry boom, and Cubley said ERF's plan there is to build their own network. “We will be one of the first WISP networks in the area,” Cubley said, “and we chose to build our own network since there are none in the area to buy.”

Cubley said that ERF's business strategy has been to buy and then improve small wireless networks in rural areas—tapping into new sectors of business that can make the networks profitable again. “We can buy a company that is unprofitable and make it profitable almost overnight,” Cubley said. “One of our company's original goals was to set out to acquire wireless in rural areas and use it in ways it hasn't been used before,” with a prime example being wireless networks in oil and gas producing areas.

“We operate as a WISP and have thousands of residential customers scattered throughout the U.S., but that is only 50% of our revenue. For a lot of companies, that is the only thing they're doing. If that is your only service, you have to have extremely large networks, because the margins are so thin. If a company can improve its economies of scale, those margins are much better,” Cubley said. “We're not trying to be the largest network, but use the networks for different purposes to generate more revenue.” According to Cubley, “the margins are 80-90% for the energy industry” and a bit less for the supplying communications services to the banking industry, which ERF also does through its wireless CryptoVue network security system.

Although ERF is sometimes in direct competition with local ILECs and RLECs, Cubley said they do often partner with traditional telcos and small wireless companies. “If we can't buy it or build it, we'll contract for it,” he said. In most cases, ERF will buy wholesale broadband bandwidth and re-sell it to the energy industry. “The problem is,” Cubley said, “sometimes the energy industry has higher standards for capacity and latency, so in some cases we have to pay to upgrade existing carriers' networks.” Right now, ERF has 14 such contracts in the U.S. and Canada, with more likely in the future.

Tuesday
Sep202011

Tech Savvy U.S. Farms: A Promising Telecom Market?

USDA Report Details Internet Use and Availability on America's Farms

With so much attention focused on rural broadband these last few months, it's difficult to imagine why last month's “Farm Computer Usage and Ownership” report by the U.S. Department of Agriculture went virtually unacknowledged among rural telecommunications analysts. And yet, the USDA's detailed findings reveal an as-yet unsaturated sector in wireless and broadband technology: the American farm. In the last decade, the number of farms with an internet connection rose by 20%, and more than half of American farms now have access to the internet. But a closer look at the numbers reveals that, of those connected farms, only 11% connect through cable, 38% use DSL, 15% use satellite, 20% use wireless, and 11% still turn to dial-up. Availability is not equal regionally, either, with the West and Northeast enjoying the best coverage and the South suffering from the least opportunity to connect (a little more than half of farms there have computers with internet access).

For the communications provider industry, these farms represent an important “vertical” market, where clever partnerships, federal funding, and local investment can come together to meet sector-specific needs. In the next few months, I'll be taking a closer look at the ways precision agricultural and farming communications technologies are affecting the telecommunications provider industry. I'll also profile companies who are servicing these farms or expanding to provide service there, as well as farmers and other industry insiders who understand the promise of a technologically-connected agriculture sector. Then there's also the recent battle between the widespread use of GPS technology on farms and the potential interruptions from cellular service—as evidenced by the recent Lightsquared uproar we've been following.

The bottom line is that, in communities where internet connections are possible and have even become essential for agriculture, farmers are prepared to make good use of fast, reliable broadband, and they are often frustrated when DSL or dial-up are their only options. In July, RUS Administrator Jonathan Adelstein acknowledged the need to connect rural areas—farms among them—and even gave his rousing speech from a family farm in rural Iowa. Our Cassandra Heyne remarked that Adelstein's sentiments were part of a growing chorus of governmental leaders who hailed broadband as beneficial and even necessary to what I call the Rural Triumvirate: Education, Health Care, and yes, Agriculture. But too few of us in the telecom industry understand how farming communities represent an important vertical market, what they do with internet connectivity, and how investments (public and private alike) are revolutionizing an industry that's as old as this nation.

According to Mike Smith, a farmer who operates a small 40-acre farm in California, “The internet means survival to a lot of small farmers.” Smith says that he and other farmers in his area sell crops directly to customers online, adding “If you don't have a Web site, nobody's going to know about you.” Similarly, Alec Smith (no relation) says that pest control is one of the most important uses for the internet on his farm. He's able to upload pictures of diseased plants to plant specialists across the country, who email him back with suggestions on how to combat the disease or pests. In recent weeks other farmers in Oregon, Iowa, and South Carolina have attested to seemingly immeasurable uses for wireless and broadband on their farms—everything from measuring rainfall and crop fertilizer needs, to checking crop prices and trading agricultural commodity futures.

In fact, the USDA's report underscores what many in the agricultural community take for granted: that one of the keys to more productive and more profitable farming (along with successful farming communities, more broadly) is better Web access. About 40% of smaller U.S. farms are online, with 72% of the largest farms using the internet for farming technologies and farm-related business. The gap in service is a telling one, as precision agriculture technologies—many of which use internet connectivity to store and access data—are becoming the new norm and even proving essential to maintaining profitability and viability. Just this month Purdue University and Crop Life magazine published a survey of 2,500 agricultural dealerships, concluding that precision agriculture is on the rise on United States farms and stating that, in some cases, precision ag resources are now “so common place that they aren't thought of as unique anymore.” As precision technologies become more advanced, better connectivity is crucial.

When it comes to wireless, farmers are beginning to turn to their smart phones and similar mobile devices to check weather forecasts, research farm equipment before buying, get advice on pest control, and communicate with other agriculture specialists. According to PrecisionAg Editor Eric Sfiligoj, “the increasing use of iPhones and Blackberries among agricultural experts [is] one of the up-and-coming trends.” He writes that, “Based upon the evidence, the popularity of smart phones and tablets has grown substantially during the past 12 months, with multiple apps now available covering everything from commodity prices to weather reports. And more are on the way.”

Technology specialist for Crop IMS Jeremy Wilson states that “One of the most significant trends I have seen in the precision ag industry is the increased use of tablets or mobile tools.” These mobile tools allow farmers to be connected globally, even while in the cab of their tractors, so that information can be communicated in a much more timely manner. According to Wilson, “Once the equipment is connected, the sky is the limit to the new functionality that a precision ag manufacturer can design to improve the user experience for the operators.” In other words, precision ag allows the farmer to take to the field what “was once limited to the office where he had an Internet connection.”

The question that remains is what platform will farmers rely on for internet connectivity and when will these services expand to cover underserved areas? The answer likely depends on the region, the cost, the available funding, and the infrastructure already in place, which is why it will be useful to look at examples from across the country and investigate Adelstein's claim that, in rural areas, “recovery is underway.”

Wednesday
Dec222010

Is Broadband the Next Purview of Cord-Cutters?

4G Offerings Will Further Dampen Wired Broadband Growth

Time was the term “cord-cutter” referred to the nearly 30% of Americans who have cancelled their landline voice service, relying solely on their wireless phone for voice communication.  In response to this trend, for a decade or more, ILECs and RLECs nationwide have invested in broadband and video technology, looking to build communications bundles that will create “stickier” customers and generate incremental revenue as an offset to the decline in landline voice accounts.

More recently, we hear “cord-cutting” associated with those consumers who are cancelling their subscription video services, opting instead to rely on “over-the-top” (OTT) video solutions like those offered by Hulu and Netflix.  Admittedly, most of the research indicates that the actual number of video cord-cutters remains low, but the trend has both the cable and ILEC industries worried—and, we think, for good reason.  Generational differences in the habits of younger consumers are sure to perpetuate video cord-cutting, and the Great Recession may have accelerated the shift. (For more on generational segmentation, refer to our Mindshare article in the September, 2010 issue of The ILEC Advisor).  But with 4G wireless service now a reality in dozens of cities nationwide, and based on the data we’ve collected regarding price and speeds, we’re now concerned that broadband access will be the next communications industry segment to be associated with the dreaded “cord-cutter” label.

Granted it’s the early days for the latest generation of mobile wireless services, but following an exhaustive survey of major 4G services now available and a comparison of prices and data speeds with wired broadband solutions, we’ve come to the sad conclusion that, while wireless can never (never say never?) be a complete Internet access substitute (due, for now, to spectrum constraints), broadband cord-cutting is likely to become an increasing reality.  It will begin to happen over the next couple of years in major markets where Sprint/Clearwire, Verizon, MetroPCS and others have already launched 4G, and, over time, it could happen in all but the most rural markets nationwide.  AT&T, which hasn’t even launched a 4G offering yet, reported more than 7.8m ‘connected device’ subscribers at the end of the third quarter, and Clearwire had 2.8m at that time and projects 4m subscribers by year-end—up from initial 2010 guidance of just 2m.

We’re not suggesting that a majority of broadband Internet subscribers will cut the cord tomorrow and opt for a 4G solution instead, but considering that wired broadband penetration gains have not accelerated for two years now, we think the advent of 4G wireless options will simply further retard growth.  That combined with the Net Neutrality rules the FCC is voting on today (12/21), which have more relaxed regulations for wireless providers (this is why Verizon’s lawyers and lobbyists make the big bucks!), will make wireless broadband a force to be contended with in coming years.

Wired broadband penetration has been creeping higher quarter by quarter, but for the public ILECs that we track, the growth has been modest.  In 3Q10, broadband penetration of ILEC access lines rose 111 basis points, to 31.4%.  But if you consider that the number of voice lines has been falling each quarter, the “growth” is really minimal.  Cable broadband penetration (calculated as broadband connections/ basic cable subscribers) rose 171 basis points, to 74.4% over the same period.  Here too, the denominator is shrinking, overstating somewhat the increase in overall broadband customers.  The public cable companies have lost more than half a million subscribers in each of the past two quarters.

      At the end of the day, consumers will evaluate the value proposition offered by wireless broadband providers, and go where they get the most bang for their buck.  Data speeds matter, but the new wireless offerings appear to stack up reasonably well with all but the fiber-based offerings like FiOS—and we believe there may already be more homes passed nationwide by 4G offerings than by fiber-to-the-home services.

Furthermore, the price/ value propositions are compelling.  At the low end, a Clearwire Base Home service can be had for $35/ month and the average WiMax speeds are competitive with DSL—for which the average ILEC was generating $70 or more per broadband sub per month based on a study of monthly ARPU we conducted last spring. 

Broadband cable revenue is generally lower per user—in the $40-$50 range—and the speeds are competitive with WiMax.  Simple lethargy and attachment to those subscription video services will prevent those customers from changing provider rapidly, but in the long run those seeking to replace their $80/ month video package with Netflix’ $9/ month streaming option may opt to end the relationship with their cable provider.  We don’t believe this happens quickly, but Clearwire’s rapid subscriber growth demonstrates a certain amount of pent-up demand.  Ironically, cable providers Time Warner and Comcast are partners in Clearwire and are bringing some of that wireless broadband subscriber growth to the company. 

 

LTE speeds are even stronger than DSL or cable, but the price points are generally higher and metered pricing is likely to become a bigger factor as these new networks are loaded up.  Will the consumers place a premium on mobility?  Some will; early adopters and road warriors with their tablet devices will be the first to try the new services; over time those of us who’ve gotten used to tapping 3G networks via our smartphones will decide it’s time for a faster connection.

The device selection for LTE networks remains limited, and somewhat expensive, but as with everything, those prices will fall.  Verizon, which launched its LTE network on December 5, 2010 with just two USB modem options, will have LTE handsets in volume by the middle of next year.

And let’s not forget about “Apps.”  The major wireless carriers are taking a proactive interest in attracting developers to create the type of applications that have fueled the iPhone’s popularity.  With data speeds averaging between 5 Mbps and 12 Mbps, some pretty cool apps are possible over the LTE network. (I tested my data speeds online while writing this article and found that I’m working with a dismal 1 Mbps download speed and 250 kbps upload speed—and I still manage to view the Youtube videos my mother emails regularly!)

As mentioned above, spectrum issues are the most obvious constraint to wireless carriers as their 4G networks load up, but we don’t underestimate the ability of the industry’s suppliers to engineer more and more capacity out of limited airwaves.  At the same time, the FCC is planning to auction more spectrum and some carriers—Clearwire most notably—have excess capacity and are looking to sell off some chunks in order to raise cash.

The bottom line?  We think it’s still a long time coming—especially in rural markets—but we think the ILEC industry would be ill-advised to discount the long-term ability of next-generation wireless broadband offerings to cut into its revenue growth.  Those investing in fiber networks will benefit from the explosion in backhaul needs, but DSL growth potential is unquestionably limited if you look out beyond the next decade.  And while fiber-based services will compete favorably with wireless broadband, particularly in the enterprise market, not all markets will provide a satisfactory ROI on fiber deployments.