Predictions of adoption rates of nominal data rates.

As quoted from this study,

"According to a report by Technology Futures Inc. (TFI), by 2006, one-half of U.S. households will subscribe to broadband access, and a shift to much higher data rates in the range of 24 Mb/s to 100 Mb/s will have begun. By 2010, U.S. broadband penetration of 75% is likely, and 10% to 20% of U.S. households will subscribe to very high-speed-broadband. In the process, most of the local exchange carriers current investment in copper cable will be made obsolete."

In that one paragraph (above) there is a mountain of information critical to every single person that reads this blog. The first and probably most crucial point is that somewhere around the end of this year 50% of the US households will have adopted broadband. (as defined by 200Kbps or higher)

We also are informed that we will also see a dramatic shift towards "much higher data rates" as described as 6Mbps, then 24Mbps and later 100Mbps. In the study (linked above) there is an estimated timetable as to when this is projected to happen but the incredible thing is that within the next 4 1/2 years we will only have connected approximately 75% of US households to broadband while somewhere between 10% and 20% will be connected to speeds as high as 100Mbps!

This is truly the redefinition of the term Digital Divide!

The final sentence in this amazing paragraph states that in that same timeframe the current copper infrastructure will be made largely obsolete! Even the most optimistic estimates I have read seem to indicate that we will be nowhere close to a 100% fiber deployment by that time.

Of course, this forecast (like any other forecast) can be easily dismissed as a best guess estimate, only as good as the quality of information it is based on and the quality of the person reading the information through their crystal ball. We all need to filter what we can accept in our view of reality and disallow that which might cause us to have to re-examine how we look at the world around us. I look at it as my job to ferret out these articles, examine their credibility and bring them to you for your enrichment.

The need for speed.

While reading up on the news that is related to our industry I found the following two stories that I thought needed to be mentioned and commented on.

As quoted from this article,

"Charter Communications, Inc. (NASDAQ:CHTR) today announced that it has begun offering video mail as part of its Charter High-Speed(TM) Internet bundle of services. Charter Video Mail(TM) is available free of charge to customers, regardless of the speed of their connection. While a webcam is required to send video mail, no additional equipment is required to receive it."

Further down in the article is this paragraph,

"Ms. Hedges said the constantly-evolving high-speed product is designed to meet the needs of customers and stay ahead of the competition. 'Internet service is a highly competitive offering,' she said. 'We compete on price, speed, security, content, features and functions. 'Video mail is a feature that will prove to be very popular with a certain segment of the high-speed market.'"

Later in the same article we find this,

"Charter Video Mail -- using the Vibe Solutions Group platform -- provides for up to 45 seconds of recording time, with ease of recording through VCR-like (stop/record/preview) functionality. For customers with speeds of 3 Mbps and higher, the service also comes with Greeting Card and Story Teller applications. Greeting Card includes more than 40 different video greeting cards that can be customized with a special message. Story Teller enables a user to assemble and record pictures in a video slideshow to share with friends and family.

For the receiver of video mail, retrieval simply requires clicking on a link. Rather than being stored in the recipient's inbox and taking up capacity, the video mail is stored on a server for a full 30 days."

So, this is a bandwidth hungry application that is being rolled out by Charter who believes that it will appeal to a "certain segment of the high-speed market."

Next we have this article and the following quote,

"Owners of Portable Media Centers, smart phones and pocket computers will be able to download daily programs and other video content from MSNBC.com, Food Network, Fox Sports, IFilm and other content providers, Microsoft said. The company had announced plans for the MSN Video Downloads service at the Consumer Electronics Show in January.

Microsoft said about 20 content partners, including CinemaNow, MTV, Napster and TiVo, have agreed to make video formatted for devices using Windows Mobile since the launch of Portable Media Center last year."

A little further down in the article is this quote,

"Microsoft said subscribers will be able to select content such as sports clips, news headlines and music videos from the MSN Video Downloads Web site. Some content can also be downloaded to PCs running Windows XP. The service is available in the United States for an annual subscription of $19.95. Some free content also be available without a paid membership."

We keep talking about customer usage patterns as though they are static. The idea that information from 2002 might be useful in predicting anything in 2006 other than what the historical values were seems ridiculous to me. As these two articles clearly indicate, we are not in a field that is linear, far from it. Rather than a slow evolutionary climb we are more faced with a punctuated equilibrium where we will see sharp climbs that plateau for an indeterminate amount of time before we see another sharp rise again.

To illustrate this I would like to point out what happened when Napster first became mainstream. (Let's leave the legality issue out of this, we don't need any red herrings introduced in this discussion.) In a matter of a few months dialup ISPs noticed a steep rise in both bandwidth usage and duration of connection time. This one application caused a number of people to become disenchanted with dialup and convinced them to make the move to broadband.

We keep talking about what the next "killer application" will be as though this would be just one thing that would all of a sudden capture the entire population and cause a huge surge in traffic. What if the next "killer app" turns out to be a number of smaller applications that all converge over a short timeframe?

The real questions that needs to be asked is, does anyone really believe the demand for bandwidth will go down? I submit that there is nobody out there who can put forth a qualified argument stating it will. The issue is how fast will the rise in bandwidth happen and how fast can we accommodate it.

The blocking services discussion.

A rather interesting discussion has been taking place in a couple of the WISP/ISP professional forums I belong to. The issue has been brought to a head because of the charges recently leveled by Vonage claiming that their service is being blocked. Alternately there is also discussion about their service being prioritized last in the queue making it unusable for all intensive purposes.

I am puzzled by some of the comments that have surfaced, many along the lines of, "It's my network and nobody should be able to tell me how to run it or what services I need to allow."

This amuses me as I have to wonder if there is any minimum requirement for being an ISP. Would it be allowable for me to block all traffic that I felt isn't suitable for my network like, web surfing, email, P2P, download videos, streaming video, on-line gaming, etc? Why not? All of these services (except email) require me to use a measurable amount of bandwidth.

There is also the idea that "nobody" has the right to tell us what to do. Last I checked, the FCC has every right to tell us what to do as this is exactly what they are their for - to protect the American public from inadequate communications infrastructure. I would have to think that if the FCC didn't feel as though an ISP was providing true "Internet service" they would have a lot of options.

We seem to forget that we WISPs operate by the good grace of the FCC and should they deem we are not operating in the public's best interest they can pull the plug on us any time they decide to.

It is readily apparent that the FCC is solidly behind VoIP. Many of their recent decisions and public speeches have made that clear. What kind of businessperson would risk the angst of the FCC blocking a service that the FCC has championed? What sense would it make to force the FCC to take measures ensuring that the American public will get the necessary access to use a service that they have paid for?

This leads to another set of questions. Why would a business knowingly make it impossible for one of their customers to use a service that the customer wanted enough to take some of their hard earned money and pay for it? This defies every law of business known to man.

One thing for certain, when the service doesn't work the customer will call the tech support number at the VoIP company and be told that they need to switch Internet Service Providers. When the customer leaves their current ISP and signs up with the competition finding that the service works beautifully, what are they going to think about their previous ISP? What will happen to that initial ISP's reputation when word gets out that you need to switch from Company A to Company B because Company A's network can't provide adequate service to use VoIP?

The same argument could be presented that VoIP is similar to P2P but even that comparison begs to ask why any business would deny a customer any service they might want to avail themselves of. To be successful we need to provide the customer with the very best service available. This is not something that is limited to answering the telephone or dealing with hardware issues, this means that the customer never experiences anything that would disappoint them.

To do anything less is to have already made the decision you are leaving the business but you don't know exactly what day that will be.

In this world, the only thing we have to worry about is our incompetence being leveraged by the competition.

Try not to forget that!

Discouraging spam

This morning I decided to take a close look at the spam folder in my GMail account. I had purposely been letting it grow so as to gather inspiration for this piece. Incredibly, in a three-week period I have managed to collect 374 pieces of some of the funniest email solicitations I can imagine.

Three members of the Douglas family (mike34 douglas, mike02 douglas and mike08 douglas – I guess this is like the naming convention of the George Foreman family) emailed me to tell me that their father, Paul Douglas, had been murdered and that they would like to have me help them get the money into a different back account. He tells me he trusts me and that he is willing to give me 20% of the money (just over $2 million dollars) for my trouble. I guess he is anticipating I am going to have a lot of trouble.

Katie Cody emailed me (along with roughly a dozen other nice folks) to tell me about her picks for the stock market. I thought this was nice of all of those busy stock brokers because if they knew me they would know I don’t invest in the stock market, I own my own company and place all of my gambling money there effectively cutting out the middleman (or in this case the middlewoman)

Several people (actually, too many to quickly count) emailed me with fantastic deals on software. I am reliably told that I can buy software packages that retail for several hundred dollars for pennies on the dollar because these nice people apparently are not interested in making all that profit for themselves.

I was also nothing less than amazed that I could grow some appendages bigger, wider and firmer while at the same time losing weight! I would have thought this a scientific impossibility but I am amazed what I learn everyday on the Internet so why should this be any different?

The winner, hands down, had to be all of the nice people who want to lower my mortgage, something I find amazing because I don’t have a mortgage. Apparently, that isn’t a problem as these people can also perform what I though was scientifically impossible by lowering zero!

ENOUGH!

My GMail account is less than a year old and already the spammers have found me to the tune of 100 plus emails per week. The funny thing is I don’t blame them; I blame the idiots that click on these solicitation and BUY from them. Let’s face it, the spammers do this because there is a payback – and a large payback it is.

Congress decided to take some action on this problem by passing what is affectionately known as the “can spam” act. Has this really done anything worth mentioning? Well, if my inbox is any indication, I am going to have to say no. Why? Because Congress targeted the wrong end of the transaction, the spammer. If they wanted to really have some effect on this problem they would have made it illegal for anyone to buy from these jackasses. Of course, if you are stupid enough to believe that some pills are going to make your appendage longer, or someone you don’t know can prescribe medications for you, you probably deserve what you get. How many people have been taken for large sums of money (some even killed) by answering an ad to help some soul remove millions of dollars from their country? Are these idiots really so gullible as to believe there is someone they don’t know out there trying to give them several million dollars?

I guess this might actually be a Dawinism because if these people are willing to buy medicines from disreputable establishments and swallow them, this will certainly become a self-correcting problem.

Now, let’s assume that did pass just such a law in conjunction with the can spam act. It would now be easy to find out the financial information of every spammer out there and seize it. Let’s face it, spam is driven by greed and if there were no money in the business we would also see very little spam in short order.

However, this doesn’t really address the entire problem. The real culprit is that the email system we all are used to isn’t capable of handling many of the challenges we face today. In my collection of spam I had several phishing experiments, including a couple “from” Ebay, one from Paypal and several from banks that aren’t in my area not to mention that I don’t have accounts with. Once again, people click on these messages (because they instinctively trust email?) and provide their personal information to very realistic looking sites. I suppose if we want to discourage that we would allow these people to lose their money. After a few idiots have their story about losing their life’s savings in the media I would think the American public would take this seriously. We can give them their money back after the story gets out; I’m not that heartless.

What we really need is a new mechanism for delivering messaging. Many people now use Instant Messaging as their preferred method of choice for text but this medium is now seeing spam infiltrating it in a very pronounced way.

How can we effectively out this to an end, once and for all? I think we probably could do this quite easily if we wanted to. This is what I suggest, we offer a large reward (say $10 million) to any credible entity to develop and release the next generation of text messaging that is completely secure. Where does this money come from? I would guess that the ISP industry would be thrilled to put this money up considering the very real cost in both bandwidth and the expense involved in trying to filter out spam from their customer’s inboxes.

To make this interesting, we need to structure the contest in such a way that the new program get introduced and set up on a testing ground while another reward (like $1 million is offered to anyone that can crack into the applicant’s security) If after a reasonable time period the software resists all attempts at being cracked we release it to the public for free. The world will quickly adopt this if it is released as a free program.

Do I think this will happen? To be honest with you, I don’t. There is too much money being made here for anyone to really want to change this. We have the spammers along with the companies that are working to stop spam, we have the consumers who seem to want to receive these messages or they wouldn’t be buying this stuff and last of all we have the criminals who are making a living off of these scams – even though I am not sure how much of an influence they have on the entire process.

One thing we could do that I am sure would work quite well, let’s start hacking into spammer’s databases and publishing the names of everyone who buys enlargement medication. I would be willing to bet once that makes it to mainstream media nobody would want to risk being “outed” even if the claims did live up to their promise.

The FCC provides a UWB waiver.

As quoted from this article,

"The FCC's granting on Thursday of a waiver to the WiMedia Alliance set off spin campaigns from both UWB camps.

The recently-merged *WiMedia Alliance* and MultiBand OFDM Alliance Special Interest Group announced Thursday that the FCC has granted their request for waiver of certain measurement procedures for the multiband orthogonal frequency-division multiplexing (OFDM) standard for ultra wideband (UWB)."

The above article is then linked to this press release from Freescale.

Here is the relevant quotes from the press release,

"Relative to the original rules, under this waiver, DS-UWB can now enjoy 4x greater data rate across a network, or deliver a stream using 4x lower power from the battery, or deliver the same data rate across the network but at double the distance and with greater robustness. The capability to burst at 4x data rate over the same range, and “sleep” more, generates significant additional battery savings for the already very low power DS-UWB solution, an ideal benefit for future DS-UWB applications such as cell phones, digital camcorders and portable hard drives. As important, with a simple firmware update, Freescale’s current UWB chipset, the XS110, can now be re-certified to take advantage of the benefits of the new waiver and deliver multiple HD video streams at double the distance – up to 20 meters."

And also in the same press release we hear,

"Indeed, our aggressive UWB product roadmap will be further expanded in terms of data rate and range as we move to multi-gigabit products over the coming quarters.”

So let's see, we have a press release that is stating that Freescale will be releasing multi-gigabit radios capable of an effective range of just over 60 feet (with a potential of 4X the range) without the use of any high gain external antenna. Additionally, these chips are going to be mass produced for the PAN market and are expected to be sold in quantity pricing that is close to WiFi.

Now, if we could only use this legitimately in a mesh style network, we might really be on to something.

Did WiMAX miss the mark?

Let’s start off by clearing the slate and understanding that I am not bashing the WiMAX Forum in this discussion. I think the WiMAX Forum has done nothing short of an amazing job – not perfect by any stretch of the imagination – but any group that can manage to get most of the active players in an industry to work together deserves some applause in my book. I am not directly addressing the technology even though the concept is not what I would have done – but then I am not always right either. What I am concerned about is the vision – or lack thereof.

In my daily jog around the Internet (I have to keep in shape somehow) I ran across an article that projected the shift in population from rural to metropolitan as reaching a critical point in the next five years. I had heard about this some years ago so I decided to do a little more reading on the subject and become more familiar with these projections.

In study after study the realization is that people in droves are abandoning the rural areas to move to the urban areas in search of jobs, infrastructure, culture with probably each individual having their own reasons. This holds true everywhere I could find credible data.

The world is steadily becoming more urban, as people move to cities and towns in search of employment, educational opportunities and higher standards of living. Some are driven away from land that, for whatever reason, can no longer support them. By the year 2005, urban areas are expected to be home to more than half of the world’s people.

Already 74 per cent of Latin American and Caribbean populations live in urban areas, as do 73 per cent of people in Europe, and more than 75 per cent of people in Australia, Canada, New Zealand and the United States. In both Africa and Asia, urban dwellers represent about a third of the total populations. However, there are significant variations between individual countries. In Africa, for example, more than 50 per cent of the populations of Algeria, South Africa and Tunisia reside in urban areas.

The above quotation was taken from an article located here:

The challenges this will present are enormous. Leaving aside everything else, I thought this would impact how communications will be served to this steadily increasing group.

If we take any large city, New York, Sao Paulo, Mexico City, etc we find that the density per square mile mandates that an enormous amounts of connectivity needs to be provides to a relatively small area. We can also be assured that this demand will significantly increase for the foreseeable future. At the same time the demand seems to be rising at a faster rate than the necessary infrastructure can be built.

Take New York City as an example. It is my understanding that it is a minimum of three years from concept to finished deployment for a fiber project of any size to be completed there. From the initial proposal, through the planning, budgeting, engineering studies, permitting process and continuing right through the actual construction this is a very expensive and time consuming effort. During that same three-year period the demand for more communications infrastructure have increased and the local population is not being adequately serviced.

What does this have to do with WiMAX? The reality is that the WiMAX standard has been designed to provide relatively small amounts of data for reasonably long distances – exactly what we don’t need in the above areas. As metropolitan populations increase their demand for connectivity and should the trend toward urbanization continues who the heck is the WiMAX Forum targeting as their intended market, the rural areas? I would suggest that based on the migration patterns presented above that is a losing proposition.

Instead, what is needed is a MAN standard that allows for huge amounts of data to be transported across relatively short distances coupled with the ability to be put in place very quickly. In addition, this infrastructure needs to be able to support a nearly infinite amount of radios with next to no degradation from interference.

The reality is that this is the overwhelming portion of the market, the one segment that seems to be being ignored by the wireless manufacturers and the one that presents the biggest challenge along with the biggest rewards.

To put this in perspective, the city of Sao Paulo has an estimated population of 27 million people and growing. The needs of a population base this size for a reliable communication infrastructure is astronomical. The ability of any traditional telecommunications provider to keep up with this ever-increasing demand has reached a point where the copper/fiber deployments cannot be deployed in a time frame consistent with the level of population growth as I mentioned in my example citing New York City above.

There is one more factor that enters into this discussion, cost. If we look at the real cost, including labor, to deploy a fiber network we find that cost to range anywhere from a low of roughly $3K/mile for rural areas that have extremely low labors rates to a high of $400K/mile in Manhattan.

That’s one heck of a range.

At what point does it become economically feasible to deploy wireless technology instead of fiber? Certainly this number would depend on the location, labor rates, demand along with a number of other factors. However, we can easily see if these ultra high-speed radios had a retail sale price of $10/each the adoption would be astronomical.

So, what are the applicable technologies we might apply to this need? Certainly the millimeter wave bands could be employed and show some serious promise as does Ultra Wide Band. In locations where the weather conditions permit Free Space Optics could allow for even more capacity to be added as radio and FSO could coexist in the same environment without degrading each other’s performance.

Amazingly, these technologies are reasonably inexpensive to produce once a critical mass is reached.

If we take millimeter wave as an example we find that if the production demands exceeded 10,000 radios per month we would see a drop in prices that would bring these radios in line with the least expensive fiber deployments we can cite. If the number was then raised to 100,000 radios per month we would see prices that would near the cost of telephone cable per mile. Continuing forward at the production levels of 1,000,000 per month we would now see prices not quite as low as the current WiFi levels but close enough that nobody would care.

How about UWB as a comparison? The projections are that the first generation of UWB to be released to the public will initially be mass-produced in such quantities for use in PAN (Personal Area Networks) so as to make the introductory price in the sub-$20 range. These devices have extremely low power output (as mandated by the FCC) but with the use of relatively high gain external antennas we might expect to see their range increased to levels that would allow metropolitan deployments in a mesh style configuration without adding too much self interference into the area. Imagine, we could quite easily produce near 1GHz mesh nodes for a under $200/each!

Finally, we look at Free Space Optics as a potential technology. Some of the early attempts to harness this technology produced some rather awkward devices that were capable of gigabit speeds across reasonable distances. One of the drawbacks to this technology was the incredibly high cost coupled with restrictions mandated by weather patterns that prevented the large scale adoption of this technology. Airfiber was one of the companies that manufactured this equipment and had refined their designs to a point where the equipment was both reliable along with desirable. But from a personal perspective the design used by them were much too large and expensive to be of practical use.

Things have come a long way in the last few years. I am in regular contact with someone who is now ramping up a manufacturing base to produce modified 10Mbps full duplex Ronja FSO equipment inexpensively. There is also a design currently on the test bench that can deliver 100Mbps full duplex connectivity but this is still a long way from production.

I believe this will be one of the technology adopted especially in areas that make wireless (RF) illegal. If the invisible spectrum was employed as opposed to visible light this technology becomes almost impossible to trace making it nearly invulnerable to restriction. I can also see this as being used to cross international borders skirting the insane regulations that tend to crop up.

The question isn’t if this will happen but when. The realization is that one of these days a group of savvy investors are going to embrace the right group of engineers and realize that this vision is necessary to make the future of communications come together. I look forward to that day as being the day when the current telecommunications industry gets put out to pasture and becomes looked upon as the dinosaur that it is. That day is coming probably much faster than many of us expect but as sure as the demand is outstripping the supply innovation will answer the need.

The Tipping Point

Something is happening, something disturbing and potentially capable of radically changing a critical infrastructure we all depend on, telephone. I am kind of amazed that nobody is talking about this as the change could certainly mean the eventual collapse of the copper/fiber infrastructure. Maybe, you’re thinking this is Chicken Little screaming that the sky is falling and perhaps you’re right. It is quite possible I am reading the signs incorrectly and I am sure that anyone with a differing opinion will certainly let me know.

So, what am I talking about? Well, according to this article, the ILECs are losing an enormous amount of landlines to VoIP every week. In the article I linked above, Time Warner alone has been adding somewhere in the neighborhood of 11,000 new VoIP users per week! Adding to the discussion, this article claims that Vonage is adding 10,000 new users per week. I realize that every single one of these customers isn’t necessarily abandoning their landlines but I suspect that a sizeable portion of these users are getting rid of their landlines. Personally, I know several people who ditched the landlines in favor of a cell phone. Many of these people are also picking up a VoIP account to leverage their broadband connection while cutting down on their residential long distance bill.

The question before the house is, why is this important?

The short answer is, there are only so many lines that a single ILEC afford to lose before the entire copper/fiber network ceases to become profitable. What that number is I am sure the public isn’t going to be told.

Let’s look at the numbers, shall we?

According to this information provided by the FCC, as of December 2004 there was roughly 180 million end user switched lines in the US. That is an incredibly massive number. However, if Time Warner and Vonage are converting 21,000 users per week this is a trend that has to concern the ILECs, I would assume.

To keep things simple, I am going to just use these two companies and I am going to make the assumption that each new VoIP subscriber is a real loss of a landline to the ILEC. Based on the number of 21,000/week we are looking at just over 1 million lost lines per year if this number doesn’t accelerate (which it very likely will) Please note – nowhere in this calculation are we taking into account the amount of conversion from landline to cell phone, residential customers dropping their second phone line when they convert to broadband or any of the other VoIP companies like Packet8, Lingo or the services offered by entities like Comcast. In this article we are told that Cablevision Systems is adding more than 1,000 new cable VoIP users every single day in its New York market alone! I think it is prudent to assume that the real number of lost landlines to the ILECs could be as high as two to three million per year as a very conservative estimate.

Even at the highest number I estimated above (three million lines lost per year) when you have 180 million lines this isn’t an immediate threat – not by a long shot. If the trend stayed flat it would take 60 years for all of the landlines to be completely abandoned. That 60 year figure is deceptive though. If this trend stayed flat (and I don’t think anyone would even consider that as a possibility) at what point does it no longer make financial sense to continue the network? What happens when we hit below 100 million? How about 50 million lines total? Will the conversion be unequal meaning if areas that have great cell phone coverage drop a higher percentage of their landlines at a far faster rate? What about Vo-WiFi in areas that roll out a free WiFi cloud like Philadelphia is trying to do? Is this why the ILECs are so concerned about this kind of municipal model?

I don’t know let’s look at a few other scenarios.

If we can accept a couple of admittedly completely invented premises, let’s take a look at what a worse case scenario might look like.

For the sake of discussion, we are going to assume that VoIP catches on in such a large way as to double the number of users that convert each year while discontinuing the use of their landline. Starting from the 3 million user number we assumed to be the conversion rate this year we get the following:

2006 – 6 million users switch
2007 – 12 million users switch
2008 – 24 million users switch
2009 – 48 million users switch
2010 – 96 million users switch.

Guess what? In another five years a total of 186 million users have abandoned the ILECs POTS network! Okay, we can all assume that this scenario won’t happen, right? Let’s face it the ILECs aren’t stupid, if they saw something like this starting to happen they would react to the situation and stem the hemorrhaging one would think.

Recently, The Economist ran an excellent article that talks about this subject. I found this graph derived from this study from American Technology Research to be excellent.


Let’s look at the options or at least the ones I can see.

They could lower their price but that is self-defeating, as they need to maintain an earnings level that will be able to support the network. Since they are always telling us that they are broke I am going to have to assume that they can’t really drop their rates too far without it seriously hurting themselves.

Well, they can make it more attractive for us to stay by adding in services or bundling services. This cost money so once again they are losing the revenue stream and as we discussed above there is only so much to give.

This brings us to the crux of the matter. What they can do is to completely invest in a new technology that will allow them to create new revenue streams. This is a pretty serious gamble on their part – especially if we factor in the necessary capital they would need to invest. Remember, we know the ILECs are broke, they have repeatedly told us so and I believe I can speak for everyone when I say we know they are telling us the truth, they always do!

Based on the information provided by the CIA Fact Book the US has just over 4 million miles of roads inside our borders. If we use that figure as a rough guide and multiply the total miles of roadways time the lowest credible number we can find for the installation of fiber ($5K/mile) we come up with an answer of $20,000,000,000. Overall, that doesn’t seem like a lot of money except we haven’t connected a single customer to the fiber yet. I am not sure how to even go about estimating the number to assign a cost to connect every residence and business to this fiber backbone but I am sure it will be equal to the number we just arrived at above.

Let me share with you how I arrived at that number.

The least expensive estimate I have heard mentioned to connect a building to fiber is $200/installation. Based on this information from the US Census Bureau we find there is 120 million plus homes in the US. Using the $200 figure cited above (and to be honest with you I believe this number to be very low) we get a number of $24,000,000,000 and that would bring the total up to $44 billion dollars.

The next two questions I have are where is this money coming from and when will it ever return a profit?

Where is the money coming from? I would have to speculate that the money is coming from several different sources, including the revenue the ILECs generate. But, if we are to take anything I have written here seriously (Don’t worry, I’m not even sure I take myself too seriously.) then we understand that the ILECs are seeing a steeply diminishing revenue stream from losing their customer base to both VoIP and cell phones.

This (one might think) would also scare off any investors from wanting to inject huge amount of cash into this venture. If we also factor in the fact that the Telecommunications Industry as a whole is in pretty tough shape one would have to wonder who in their right mind would invest in this plan. Of course, there has to be a profit, all we need to do is amortize this plan over a century or so and everything looks rosy!

All in all, this leaves all of us in an uncomfortable position. We are now forced to choose between backing this plan (a plan that doesn’t seem too well thought out) or being faced with the threat that the telecommunications network might go dark – if they don’t get a huge influx of money.

What I don’t understand is how the ILEC can believe they will win in this situation. Do they believe that fiber transport will be so valuable to the American public that we will forsake satellite TV and all other forms of communications so that we will uniformly adopt their product offerings alone? Could this be why there is a huge lobbying effort to wipe out the independent ISPs and to halt the progress of municipal broadband deployment? Is this the last act of desperation from a huge entity that is just now starting to realize that their technology and business model is no longer relevant in this new age?

If this is the case, what the heck are we going to do with this elephant? Perhaps, the name WorldCom was more appropriate than any of us understood.

Credit to David Isenberg and Roxane Googin without their work to reference I never would have been written this piece.

Let's face it, if you're not getting the right information, you can't make effective decisions.