Barrack Interesting. It would really be interesting to hear from the folks at USF. They have taken quite a beating from this forum. Maybe a good idea to listen to them and get a feel of where they are at and what sort of challenges they face. Ali Hussein Principal Hussein & Associates +254 0713 601113 / 0770906375 Twitter: @AliHKassim Skype: abu-jomo LinkedIn: http://ke.linkedin.com/in/alihkassim "Discovery consists in seeing what everyone else has seen and thinking what no one else has thought". ~ Albert Szent-Györgyi Sent from my iPad
On 13 Apr 2016, at 10:46 AM, Barrack Otieno via kictanet <kictanet@lists.kictanet.or.ke> wrote:
Listers,
In light of Walu's write up on Universal Access, this might provide an interesting comparison.
Thank you
Best Regards
---------- Forwarded message ---------- From: Dave Burstein <daveb@dslprime.com> Date: Wed, 13 Apr 2016 02:48:29 -0400 Subject: [Internet Policy] Universal service fund in the U.S. has failed badly. Despite $billions, U.S. has close to the worst coverage in the developed world. To: Richard Hill <rhill@hill-a.ch>, "internetpolicy@elists.isoc.org" <internetpolicy@elists.isoc.org>, Alejandro Pisanty <apisanty@gmail.com>
Folks
I changed the subject to avoid getting entangled in the debate about the particular report and focus on the issue of achieving access. Based on the U.S. experience, I believe USF funding is inefficient at best.
The U.S. has about 5M homes that can't get landline broadband despite $7B in our stimulus and billions more over the years in Universal Service money. (FCC data) That's 7-10X the unserved rate in much of Western Europe.The greater land area is only a partial explanation. See the work of Professors Rosston and Hazlett as well as Scott Wallsten, who was chief economist of our broadband plan. I did two workshops for our Broadband Plan.
I don't have depth on the issues in other countries but what I know suggests USF isn't performing well most places. I believe the Kurth Solution, named after the German regulator, is strongly preferable.
Unserved rural areas by their nature are scattered and have limited local infrastructure. In most places, only the incumbent has the local facilities and backhaul required to serve the area at competitive cost. This became obvious when almost none of the applications for our broadband stimulus were from new entrants looking to connect the unserved, although that was the primary goal of the funding.
The result was that the local phone company could and did claim their costs were far higher than they needed to be. Add on the political power of the phone companies (regulatory capture) and the system is spending what I estimate is easily twice what an efficient subsidy would be. (Limited hard data.)
Kurth in Germany covered most of the "white spaces on the map" at a much lower cost. In a spectrum auction, the carriers were required to cover white spaces before they use the spectrum in the big cities. While the companies could reduce their bids, WIK Consulting told me the impact was very small.
Vodafone and Deutsche Telekom, spending their own money covered those small towns rapidly and what I believe was far less than any USF subsidy would have been. LTE speeds are now 50-100 megabits, enough for most purposes. The caps on the rural wireless were much too low but technology is rapidly improving that. Today's LTE gear has 3-4X the capacity of the earlier systems, mostly through carrier aggregation. More advanced MIMO and MU MIMO are likely to deliver 10X the current capacity in the next few years, according to leading wireless experts such as Stanford's Paulraj. That will allow raising the cap to perhaps 100-150 gigabytes/month, probably with unlimited access nights and mornings.
Portugal and others are working with a similar system. ---------------------------------- Unless you have a plan to educate the regulator and enforce reasonable pricing in USF, I think the plans are somewhere between overly expensive or ridiculous. The U.S. couldn't do it despite major efforts since the Broadband plan.
The "Kurth Solution" - indirect competitive bidding as part of the spectrum auction, seems to work well. It's not the only alternative.
Australia is building a National Broadband Network for everyone. Unfortunately, the cost has gotten out of hand, as so often happens with government projects.
India may have a better idea; the government is extending fiber to 10's of thousands of small towns with the expectation private or cooperative efforts can deploy the last mile. The backhaul costs are often the largest expense in rural service. They require so much capital few but the largest companies can finance backhaul.
With mobile phones and WiFi gear now under $50, local businesses or munis can connect to that fiber and serve the area with a small investment. This is very promising, although political entanglement has drastically slowed construction. Some government projects work well (China), others we know are unsuccessful. -------------------------------
Satellite has become much more attractive than before. Mark Dankberg, Viasat CEO, told our broadband plan today's satellites have an order of magnitude more capacity and reduce latency by half. (They haven't solved the 22,000 mile distance but improving the routers and caching apparently makes a huge difference.) No politician would admit it, but the assumption in the U.S. plan was satellite for the last 1%.
All current Universal access programs may have become obsolete on December 21, The Falcon 9 successfully launched a constellation of 11 Orbcomm-OG2 second-generation Low Earth Orbit (LEO) satellites. The first stage returned to Cape Canaveral successfully, which Elon Musk's company says will reduce costs by about 30%. The first two sea landings failed but April 8, 2016, Falcon 9 Flight 23 successfully landed a 1st stage booster on drone ship Of Course I Still Love You.
Low Orbit satellites solve the latency problem but still have a way to go. Small, inexpensive tracking antennas need to be developed. An engineer I respect has studied the problems and expects LEO sats will be the way to go in a few years.
Facebook's drones will probably never be cost-effective just serving extreme rural areas, I believe; I'm anticipating they will need urban customers to cover the costs. Their engineers may be good but the head of the project didn't know the facts on the ground. I haven't researched it but I expect the rapidly dropping costs of LTE will be much less than the drone network. I would guess the same about Google's balloons but the team seems far more knowledgeable.
I've bcc'd this to the experts mentioned. I hope they and any others catch any mistakes I have.
The above is only about access. I'm very encouraged by the new U.S. Broadband Lifeline, a $9.25/month subsidy for the poor where networks are already in place. Broadband networks are a classic case of high fixed costs/low marginal costs. The marginal cost of adding a customer to an existing large broadband network in America or Europe is $4-8/month.
Dave Burstein
Editor, Fast Net News, Net Policy News and DSL Prime Author with Jennie Bourne DSL (Wiley) and Web Video: Making It Great, Getting It Noticed (Peachpit)
-- Barrack O. Otieno +254721325277 +254733206359 Skype: barrack.otieno
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