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July 20, 2005 • 11:43 am 0

How to Bring an Affordable Broadband ISP into New York City

I was recently asked by a colleague how an ISP like Earthlink can provide low cost broadband in New York City. The truth is that without help, they can’t. Let’s look at the two possibilities that exist: using existing infrastructure and building new infrastructure.

*Existing infrastructure*

There exist a handful of wires that enter most businesses and homes: copper/phone, coaxial, and electrical wiring.

Copper cabling is owned by Verizon. Because of an FCC requirement they must provide “common carrier” access at a competitive rate to other ISPs, which means that Earthlink can gain access to the copper and provide DSL. Earthlink would have to pay Verizon an access rate somewhat equivalent to (but probably a little less than) Verizon’s own DSL service, about $30 a month. Earthlink would need to charge at least this much in order to make any revenue on the service, so there’s no way they could underbid Verizon’s service. Earthlink, by the way, offers DSL in New York City at a rate of $19.95 for the first 6 months, and $45.95 per month for the second 6 months, which is an average of $32.95 per month for the minimum 1 year of service.

Coaxial cable is owned by either Time Warner Cable (TWC) or Cablevision, depending on which area of the city you are in. Over cable, Earthlink currently provides a cablemodem service at $44.95 a month. This service is essentially a rebranding of the Time Warner Cable Road Runner service, and as such, Earthlink must pay TWC an access rate that is close to TWC’s own cablemodem service, which is $44.95 per month. Furthermore, due to the recent “Brand X Supreme Court decision”:1, TWC is no longer required to let Earthlink provide this service.

Electrical lines are owned by ConEd. While technologies like Broadband over Powerlines (BPL) are starting to be deployed, they are still in their infancy. Even if such technologies were to be made available over ConEd’s power lines—and there are indications that much of New York City’s power lines and in building wiring won’t support this technology—ConEd the electric company is new to broadband service provision, and it is likely that they either will not allow a third party ISP like Earthlink to offer service, or will charge an uncompetitive rate for providing access.

*New Infrastructure*

Earthlink can build its own infrastructure to provide service. There are generally two components to a broadband service: internet connectivity/backhaul and last mile connectivity. Generally, the last mile connectivity—the line that brings the internet into your residence or business—is the most expensive part. There are options for backhaul that Earthlink can already use, such as dark fiber or leasing communications lines from a number of providers (Verizon included).

Last mile connectivity, in the case of wired service, requires digging up streets and sidewalks, bringing one or more cables into the basement of a building (in New York City, at least), and then bringing that cable up to the apartment or store that is receiving the service. This is expensive because it requires a significant amount of human labor, and because it requires lots of construction and politicking to get permits to do the work. It is unclear what such a network would cost to the end user subscribing to Earthlink service, but it would require an enormous investment on EarthLink’s part to even get 1 person hooked up. Furthermore, with the exception of perhaps fiber, such a network would just be a duplication of an existing copper, coax, or electrical network. Many buildings in downtown Manhattan already have a fiber line, so this might be a starting point, but fiber lines are absent exist from most residences in New York City.

The alternative is wireless last mile service. In this case, Earthlink would have to both select a technology—there are plenty out there that would work, including WiMax and Wi-Fi, and Earthlink is trialing them in other cities—and deploy the antennas. New York City, which is a large land area (303 square miles), has a secondary difficulty that isn’t shared by any other city in the USA: height. You can read a bit more about height issues that New York City presents in a “previous blog post”:2. These issues mean that there would have to be sufficient density of antenna deployment throughout the City in order to provide service.

Wireless solutions, however, are vastly cheaper than any wireline solution. Orders of magnitude cheaper. So much cheaper, in fact, that even a full City-wide deployment might be made available at an affordable (read $20 or so per month) rate to every resident.

Where can these antennas be placed? One option is to use the same deployment strategy that cellphone networks use, contracting with private land owners in the City and mounting them on buildings. This would work, but prices for antenna location rental are high, residents don’t want antennas nearby their apartments (the “not in my backyard” problem that plagues most infrastructure deployment), and there just aren’t enough enough locations. In fact, antenna deployment is so difficult that New York City has “_horrible_ cell phone service”:3. This is the primary reason why DoITT, New York City’s government IT organization has created a plan to lease City light-poles. Earthlink could use City light-poles for their network (they have already suggested that they’d like to), but the cost of doing so is still too expensive and too onerous to make it a viable option, at least under DoITT’s leasing requirements (the reasons for this are saved for another blog entry).

*Solutions*

In the end, the only way to bring affordable broadband to New York is to involve the Government. Either through requirements that prevent existing network owners from price gouging and other monopolistic behaviors, or through programs that enables cheap infrastructure to be created by new network providers. In the latter case, we can solve the problem for one or a couple of private companies by reducing the cost of leasing public space, but this really discounts the value of the investments we as residents of New York City have made in our public infrastructure.

Really, the best solution is for us, as a City, to invest in building more public, shared infrastructure. We have already done so by “laying down lots of fiber cable”:4 (there’s still lots that has gone unused). We should invest in more infrastructure that will enable lots of companies to compete to provide broadband to New Yorkers. This way, we don’t create another monopoly broadband provider, but rather create a means for lots of market competition.

[1]http://www.washingtonpost.com/wp-dyn/content/article/2005/06/27/AR2005062700415.html
[2]http://www.wirelesscommunity.info/2005/06/22/why-mesh-based-wireless-networks-are-ideal-for-new-york/
[3]http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/PR01333.html
[4]http://www.nysernet.org/about

Filed under: Community Wireless, Mesh, Muniwireless, New York City, Urban Wireless

July 20, 2005 • 10:27 am 0

USA Today Editorial: Let them have broadband

There is a great “editorial on public broadband”:1 in today’s USA Today. Its short, and to the point. You should just go read it.

[1]http://www.usatoday.com/printedition/news/20050719/edit19.art.htm

Filed under: Muniwireless, News

July 19, 2005 • 4:25 pm 0

FCC Chairman Martin's "Policy" for Broadband

It often impresses me that people who are so “pro-free market” and “pro-competition” are able to completely ignore these beliefs when faced with the pleas of a large company (or several large companies). FCC Chairman Martin talks today in an article in the Wall Street Journal, “Fighting a Broadband Battle”:1 about how he believes universal broadband should be central to his agency’s agenda:

bq. In an interview, Mr. Martin, a 38-year-old Bush loyalist, says his top goal is to increase Americans’ access to high-speed Internet. Late last week, he began circulating plans to loosen rules so neither phone nor cable companies will be required to share their Internet connections with competitors like America Online, a change that essentially would create a duopoly in many local markets. He also embraces the idea that local governments should be allowed to offer wireless Internet services, at least in rural areas where some phone and cable companies balk at providing high-speed service.

bq. Mr. Martin’s theory is that phone and cable companies will be more inclined to expand broadband connections to consumers if they don’t have to help foot the bill for their rivals. “If you have to share your network at marginal costs with your competitors, going forward you won’t have an incentive to invest in your network,” he says. Last month, the Supreme Court deferred to the FCC on the matter, handing Mr. Martin an invitation to write new rules.

There is a simple tenet of basic economic theory that says that a company will always perform to maximize its profit. Accordingly, it would be illogical for a phone or cable company to refuse to offer broadband service if there is profit to be made. This is easy to understand. What’s not so easy to understand is why Mr. Martin is under the mistaken impression that (a) sharing a network necessarily reduces profits, and (b) that this is the *only* reason why phone and cable companies are not building more broadband.

The truth of the matter is that Commissioner Martin’s economic basis for policy is fundamentally flawed. He is basing his policy on the requests of the largest players in an industry that is known for “lying”:2, “cheating”:3, and “taking money from government without delivering on promises”:4. He is taking this industry’s statements about *why* there isn’t more broadband penetration in this country at face value. He *isn’t* questioning why a big and successful company cannot figure out how to make a profit in a properly competitive market.

The phone and cable companies that are behind this FCC policy shift aren’t doing their best to compete in an open marketplace. They are doing their best to ensure that there is no open marketplace at all. There is another simple tenet of basic economic theory that says that the maximal amount of profit can be derived from a market when there is pure monopoly power, where prices can be set artificially high, and competition can be blocked.

Unfortunately, this is the type of anti-competitive marketplace towards which we are heading, and Commissioner Martin is driving us there at full steam. We are heading towards a marketplace where there are only one or two companies (the definition of monopoly or duopoly, indeed). Thus far, where such a marketplace exists in this country—and there are *plenty* of cities and towns where this is true—broadband penetration is *low* and prices for broadband are *high*. Where there is a “healthy marketplace”:5 — and this is primarily due to entry by a third competitive entity, the municipality — broadband penetration is *high* and prices are *low*.

[1]http://online.wsj.com/public/article/0,,SB112173373313488959-JpI_vcLMbGZTAj9LoC0ior_4zEg_20060719,00.html?mod=blogs
[2]http://www.newnetworks.com/NYCspeechfin.htm
[3]http://www.rpa.state.nj.us/onj.htm
[4]http://www.newnetworks.com/Bellsfailedfiberopticdeployments.html
[5]http://www.newamerica.net/Download_Docs/pdfs/Doc_File_2245_1.pdf

Filed under: Community Wireless, News, Policy

July 14, 2005 • 2:10 pm 0

Verizon high-speed network in Syracuse, NY

According to the article “Syracuse is newest wireless hotspot”:1 in the Post Standard, Verizon is rolling out its EVDO service in Syracuse, NY. This is a good thing, since EVDO represents an upgrade to existing cell data service.

However, Verizon is also calling this service a “Hotspot”:

bq. “This service basically makes all of the Syracuse area … one big hotspot,” said John O’Malley, a Verizon Wireless spokesman.

EVDO service is *not* a Hotspot. A Hotspot is high-speed, meaning at least 1mbps downstream (and some similar bandwidth upstream). EVDO provides *at best* 400-700kbps.

And while Verizon claims that EVDO is secure, this has little to do with the wireless technology. A Wi-Fi transmission can be made secure with any number of software technologies, including an office VPN.

And Verizon EVDO is 2-3 times more expensive then the most expensive Wi-Fi subscriptions.

Unfortunately, this article merely regurgitates misleading statements by Verizon.

[1]http://www.syracuse.com/business/poststandard/index.ssf?/base/business-0/1121157611143530.xml&coll=1

Filed under: News

July 11, 2005 • 1:18 am 0

Times Ledger Interview on Verizon Fiber FiOS and Competition

The Times Ledger recently ran an article about “Verizon’s Fiber FiOS deployments in New York City”:1, in which I was interviewed.

I am very much in favor of any deployments of faster broadband speeds in New York City. We certainly need whatever we can get. Its great that Verizon is building its FiOS system in our backyard.

However, as I talk about in the article, we have to be careful about *how* and *where* broadband is deployed:

bq. Dana Spiegel, executive director of NYCwireless, a wireless advocacy group, called fiber optic technology a “double-edged sword.”

bq. He said the replacement of the copper wires to the homes by fiber optic would reduce competition, because of a Federal Communication Commission regulation that requires telecommunications companies to provide universal access for competitors on their copper, but not fiber optic, wires.

bq. “When you remove competition, prices go up,” he said. “There will be no competitive pressure.”

Verizon has chosen a high-income area of New York City to do its first deployment, and they certainly have their reasons for this. We must ensure that FiOS comes to *all* parts of New York City, to ensure that we don’t create yet another uneven service and set of underprivileged areas.

We also must be careful about ensuring that competition exists in the broadband marketplace. What FiOS brings is an unregulated pipe into our residences and businesses. This means that, especially given past performance, only Verizon will be able to use the FiOS system to provide broadband services. So we have a single vendor on FiOS, a single vendor on Cable, and a phone line that falls into disrepear, preventing the multitude of DSL providers from proving service. FiOS, while promising the next generation of broadband speeds, also brings with it a reduction in broadband competition.

[1]http://www.timesledger.com/site/news.cfm?newsid=14784437&BRD=2676&PAG=461&dept_id=542415&rfi=8&xb=govew&xb=xokaq

Filed under: Interview, News

July 7, 2005 • 2:02 pm 0

Man Arrested in Florida for "stealing" Wi-Fi

“The St. Petersburg Times reports”:1 that a man has been arrested for parking outside of someone’s house and using their Wi-Fi network connection to access the internet. The article states:

bq. “It’s so new statistics are not kept,” said Special Agent Bob Breeden, head of the Florida Department of Law Enforcement’s computer crime division.
But experts believe there are scores of incidents occurring undetected, sometimes to frightening effect. People have used the cloak of wireless to traffic in child pornography, steal credit card information and send death threats, according to authorities.

This is blatant fear-mongering. While it is possible to do all of those things mentioned in this paragraph, there have been no documented cases of this taking place. To maintain that unsecured wireless networks are trafficking mechanisms for credit card theft and child pornography is pure speculation.

Furthermore, the use of someone else’s internet connection is by no means illegal. Most ISPs do have contract requirements that prevent a subscriber from sharing their internet connection. There are plenty that do not, such as “Speakeasy”:2 and “Bway.net”:3. Sharing internet in this way, with such an ISP, is not only perfectly legal, it is condoned by the service provider as well.

[1]http://www.sptimes.com/2005/07/04/State/Wi_Fi_cloaks_a_new_br.shtml
[2]http://www.speakeasy.net
[3]http://bway.net

Filed under: News

July 5, 2005 • 12:57 am 0

Universal Access and Fiscal Responsibility

In a great post, Sascha Meinrath, a fellow Community Wireless proponent talks about the “Pros of Community Networks”:1.

If Universal Access is a key component of a community’s mission, then it can be achieved 3 ways:

# *Via laws and regulation* — This is the least likely to succeed, since laws change, and can often times be trumped by state and federal legislation. National or even local for-profit companies are very good at fighting against such laws, both politically and via public opinion.
# *Via subsidies and tax breaks/credits* — This is expensive. Consider what it might cost in terms of tax dollars to convince a for-profit company to provide universal access. The company is in a position of power, in this case, and the price that a community will pay is proportional to how much they want the service. This is standard supply/demand economics.
# *Via municipal networks* — This may or may not be expensive, and has clear benefits over the medium and long term (as well as other benefits above).

The key here is that muni-networks are very often (always?) cheaper than the alternative, which is #2. Also, such projects (a) keep money in the local economy, and (b) creates local jobs, whereas solution #2 (and #1 for that matter) moves money out of the community.

The clear fiscally responsible choice for universal access is a muni-network, assuming that a sound plan for the operation of the network is created.

[1]http://www.saschameinrath.com/node/165

Filed under: Community Wireless, Muniwireless, NYCwireless, Urban Wireless

July 3, 2005 • 3:32 pm 0

Wi-Fi in Wilkes-Barre, PA

“Glenn Fleishman”:1 points to an “article in the Times-Ledger in Wilkes-Barre, PA”:2 about a municipality that wants to provide a city-wide Wi-Fi network. Pennsylvania is one of the dozen or so states that has enacted a law banning such networks, unless certain requirements are met, such as the permission of the incumbent telco provider. Interestingly, Mayor Tom Leighton is gung-ho on the idea of a city-wide Wi-Fi network, and perhaps rightly so, though he may be fighting an uphill battle due to the State Law.

There are two important things that I feel need to be clarified in the article, which does a decent job of painting the two sides of the issue. First, there is the the issue of competition:

bq. In Philadelphia, communications giants Verizon and Comcast have already set up lots of broadband infrastructure in certain parts of the city, and had argued that shouldn’t be allowed to knock them out of the business.

Overwhelmingly, municipal network service is not intended as a replacement for existing broadband, at least for the majority of residents. Verizon, Comcast, and Time Warner have little to really worry about, especially since they offer service that is (a) faster than municipal wireless, and (b) has more features like content (this is the reason why content companies own media outlets, after all), network protection, backup dial-up access, etc.

Municipal networks also target markets and areas that are ignored or overpriced by large telco and cable companies. As I have written about in the past, even New York City, one of the most connected locations on Earth, has “entire segments of the City where broadband infrastructure is poor and non-existent”:3.

Second, there is the telco’s expectation about not having competition. Imaging Verizon saying that some other company shouldn’t build a broadband infrastructure because they “have already set up lots of broadband infrastructure in certain parts of the city, and [some other company] shouldn’t be allowed to knock them out of the business.” Well, who gave them preferential treatment? Who says that Verizon has a right to be the exclusive provider of telecom and broadband infrastructure?

The truth of the matter is that Verizon, Comcast, and Time Warner all don’t like competition of any kind. This is not surprising. However, if they provided a useful service, and were responsive to market changes, they wouldn’t have much of a problem with competition. Furthermore, most communities have provided huge subsidies and tax breaks to these companies specifically to “help” them build their infrastructure. Often, this money comes with the requirement to build out infrastructure in all areas of a city or town. Often, telcos and cable companies fail to deliver on their requirements, but take the money nonetheless.

The problem is that they have built themselves up in such a way that they view *any competition*, municipal or otherwise, as a death sentence.
We as consumers should welcome competition, especially in telecom infrastructure. In fact, it has been “shown that even the thread of municipal networks results in better, faster, and cheaper broadband service for everyone”:4.

It is one of the responsibilities of responsible government to help service its residents. If Verizon and Comcast don’t provide service to a portion of a municipality’s area, then the municipality should have the right to secure the service in those areas in any way it sees fit. I certainly don’t know exactly where the internet service has issues in urban Philly, but I’m sure that the Philly government does.

So in the end, any real restriction, state or nationally sponsored, that removes municipal service from the picture, is doing nothing more than supporting the monopoly or duopoly that is currently failing these cities.

[1]http://www.wifinetnews.com/
[2]http://www.timesleader.com/mld/timesleader/news/local/12040064.htm
[3]http://www.nycfuture.org/content/reports/report_view.cfm?repkey=144&search=1
[4]http://www.freepress.net/docs/mb_telco_lies.pdf

Filed under: Muniwireless, News

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