Broadband Stimulus: Can It Ever Work

The more I read about the Broadband Stimulus the more I am concerned that this is just a waste of billions. Let me simply address the implementation issues:

Fact 1: There are a limited number of ways to provide broadband.

They are:

1. Fiber to the Home
2. Wireless: Licensed
3. Wireless: Unlicensed
4. Satellite
5. BPL: Powerline applications

Fact 2: If Fiber is used then is is necessary to obtain a Franchise.

You see in all the existing Franchise Agreements, or at least almost all, there are clauses that albeit non-exclusive, that the next public way provider, namely anyone using the public access, like telephone poles and buried systems, have terms at least as onerous of the cable provider or worse. Thus this means that unless we also abandon due process and equal protection clauses of the Constitution, yet we have already destroyed contract and corporate law, so why not the Constitution, the new entrant needs an equitable Franchise, and I would assume that towns and municipalities could not claim Sovereign Immunity protection. As we all know, or should know if we get into this business, the process for Franchising is costly, not covered by RUS financing, and worst of all takes years!

Thus we cannot see how any of these new players will ever get to deploy FTTH in an reasonable and cost effective manner.

Fact 3: Wireless which is licensed, like WiMax, requires a license.

This is a tautology that many people forget. Thus is you desire to deliver a broadband using a wireless system which is wide area effective such as WiMax then you need the license. That means you must buy the license from someone. hat is unlikely and if possibly quite expensive. It also takes time. Thus we see that any licensed system for any new entrant is highly unlikely. In physics one would call it impossible, namely zero probability!

Fact 4: Unlicensed Wireless requires significant local infrastructure for local interconnectivity. It may be quite costly for rural locations as specified by the law.

The Meraki systems and other mesh networks work well in some urban and many suburban markets. However they really do not work well in rural areas. The best effective radius of coverage is 500' and when homes are in wooded areas and there is a low density of homes per mile, this means that this system does not function either well or at all.

Fact 5: Satellite systems require satellites.

This is another tautology. Wild Blue is one of the systems using satellites. They also have limited capacity and they have delay problems as rates increase with TCP/IP protocols.

Fact 6: BPL requires power lines and this means that distribution is limited to rural power companies. BPL also suffers from significant interference with the Amateur Radio bands and is the subject to continuing litigation.

BPL has been proposed for years now as a major means for rural broadband. It has advantages and significant disadvantages. There is ongoing litigation from the ARRL trying to stop its deployment. The providers are usually the local power companies who really are late 19th century firms in nature who have not come to develop capabilities of 21st Century broadband companies. The culture mismatch is quite extensive. IBM recently announced its intent to try and serve 200,000 homes with BPL but one suspects this is a trial.

The conclusion from these above facts is simple; rural broadband may just be downright impossible. Perhaps there is some way to do it which gets around the above Facts but we have not seen it. We have performed over three dozen detailed Feasibility Studies in towns of the type in the Stimulus package and have had to just walk away. They are either physically un-doable, economically un-doable or politically un-doable. Colebrook, NH and Rindge, NH are typical of the economically and physically un-doable type. Unless you own the license for WiMax. Hanover, NH is politically un-doable, we have discussed our experience there.

Of course the legal and political limitations may be just written off if one selects the right politicians in the right towns and then one may get the desired results, albeit not in a manner which may be economically viable. Politically controlled businesses lack rack records of long term viability, just look at Fannie and Freddie.