Joan Engebretson

Rural telecommunications providers continue to see gains in broadband availability, average broadband speeds and take rates, according to a survey of rural telecommunications members of NTCA-The Rural Broadband Association.

The vast majority of the nation’s small rural telecommunications companies are NTCA members, and 27% of those members participated in the survey conducted in late 2013. Nearly two-thirds (65.5%) of respondents’ customers can receive broadband at speeds exceeding 10 Mbps, indicating that providers have made substantial progress in installing fiber to the home or to a neighborhood node to improve on the relatively slower rates that can be delivered over copper loops connecting the central office to the customer.

Currently only about 8.5% of customers subscribe to service at rates above 10 Mbps, and the most popular category -- chosen by 34% of subscribers -- is between 3 and 4 Mbps. But as the NTCA notes in the report, “This gap should shrink as customers begin to realize all that can be accomplished online, and as new applications are developed which will require increased bandwidth.”

One of the more impressive data points from NTCA’s survey is that respondents are seeing average broadband take rates of 72%, up from 69% in a similar survey conducted in 2013. Whenever one of the publicly held regional or Tier 2 telecommunications companies sees broadband take rates above 40% or so, some industry observers generally begin to question the remaining upside potential. But such concerns don’t seem to be merited yet in the rural telecom market, despite the high take rates.

Judging by three separate announcements recently, gigabit broadband certainly seems to be catching on in smaller markets. TDS Telecom said that it has made gigabit Internet service available in Hollis (NH). And Comporium, which earlier announced plans for gigabit service in Rock Hill (SC) released additional details about those plans.

Comporium said its gigabit service will be available in a re-development zone planned for the former textile town. And in a pre-briefing about the announcement, Comporium public relations director Paul Kutz told Telecompetitor that the company expects to turn up its first gigabit customers around June 1.

The TDS and Comporium small market gigabit announcements come on the heels of an announcement from Bolt Fiber Optic Services, which said it plans to offer gigabit Internet service in northeastern Oklahoma.

Until now gigabit broadband projects in metro markets have garnered the most attention. But Bolt Fiber Optic Services, a unit of Northeast Oklahoma Electric Cooperative, said it plans to offer gigabit broadband service in its rural Oklahoma serving area.

Bolt Fiber Optic Services plans to offer high-definition video services as well as high-speed Internet over the gigabit passive optical network (GPON) that it plans to build using equipment from Alcatel-Lucent. Customers also will be able to use third-party voice-over-Internet protocol offerings, the company noted in the announcement.

The company plans to begin offering service in the fourth quarter of 2014 and to complete the deployment by April 2017.

As a utility company, Northeast Oklahoma Electric Cooperative is not entitled to Universal Service funding. And some readers may be surprised that the company is able to make a business case for ultra-high-speed broadband deployment without that funding.

People in any part of the country covered by AT&T’s wireless network can now get a wireless-based home phone and Internet offering from the company, said an AT&T executive.

As the executive explained, customers signing on for the service, dubbed AT&T Wireless Home Phone & Internet, get a device that acts as a Wi-Fi hotspot using AT&T’s cellular network for connectivity to the Internet -- and customers also can plug a traditional landline phone into the same device, enabling the phone to also work over the cellular network.

The nationwide launch of AT&T Wireless Home Phone & Internet comes at a time when the company is gearing up for trials in which all landline voice customers in an area will have their service replaced with a cellular alternative or, where available, with a voice offering running over the company’s fiber-fed U-verse infrastructure.

The company’s ultimate goal is to phase out traditional landline voice service – and when it does that, it may want to also phase-out lower-speed DSL service, which runs over the same copper connection as the voice service. Eliminating DSL as well as landline voice in areas not targeted for U-verse upgrades would let AT&T abandon the copper connection between the customer and the central office, thereby eliminating the cost of maintaining that infrastructure.

Lincoln, Nebraska has joined the ranks of cities offering free Wi-Fi access. In an announcement the City of Lincoln said Wi-Fi is available in public areas in and around the Haymarket and Railyard areas of the city.

Longer term the city has considerably more ambitious plans.

“Our long-term goal is to make Lincoln one of the most connected cities in the nation,” said Lincoln mayor Chris Beutler in the announcement, which noted that the rollout will occur in multiple phases. Lincoln’s deployment uses a cloud-based approach that moves some of the infrastructure underlying the Wi-Fi network to a data center operated by Ruckus Wireless.

Cox Communications provided details about the plans for deploying gigabit broadband service that Cox CEO Pat Esser initially revealed in late April -- and although Cox isn’t the first cable operator to announce gigabit broadband plans, it is inarguably the most ambitious.

According to the announcement, Cox plans to roll out gigabit Internet speeds across all of its markets nationwide, beginning with new residential construction projects and new and existing neighborhoods in Phoenix, Las Vegas and Omaha. The announcement says Cox “will begin market-wide deployment of gigabit speeds by the end of 2016.”

Cox also said it plans to double the speeds on its most popular Internet tiers for all customers. This includes customers that currently receive 25 Mbps and 50 Mbps service -- and according to Cox, those two service tiers represent more than 70% of the company’s high-speed Internet customers.

Half of Verizon FiOS Internet customers have opted for a FiOS bandwidth upgrade, said Verizon CEO Lowell McAdam.

Verizon uses the brand name Quantum for its higher-speed data services, which offer data rates as high as 500 Mbps. Upgrades to Quantum are being driven by increased use of video and the proliferation of WiFi-capable devices within customers’ homes, McAdam said.

McAdam added that Verizon could easily raise FiOS data rates to a gigabit per second but has no near-term plans to do so. For residential users to need gigabit connectivity, the industry “has to come up with new apps besides video and more devices,” he said.

Previously FiOS data and FiOS video had similar take rates, but more recently the company has been signing up 20% to 40% more broadband customers. This shift may be driven, in part, by customers shifting toward over-the-top video options. But McAdam isn’t concerned about the possibility of more customers moving in that direction because margins are better on broadband.

“If they convert over, that’s fine,” he said. “The more traffic into the home, the better for us because we’ve got the technology that’s future-proof. We’re in the best position to capitalize on high-volume traffic going into the home.”

Frontier Communications plans to offer a landline phone service designed for emergency use only, said Frontier CEO Maggie Wilderotter. He said Frontier is planning a residential VoIP product to be launched in the second half of 2014.

Frontier’s planned emergency phone service targets rural areas, which represent a large portion of Frontier’s customer base.

Like all local phone companies, Frontier is seeing customers canceling landline service and moving to cellular or other alternatives. But as Wilderotter noted, rural areas experience frequent power outages. And because traditional phone service is powered from the phone company’s central office, it could provide a reliable communications method even during an extended outage.

Frontier believes there is a market for an emergency landline phone, which would be capable only of dialing Frontier or a 911 operator. The service will have “four nines” reliability, Wilderotter said, using telecom jargon for a service that is available 99.99% of the time.

Charter Communications is working on some important new set-top box technology, Charter Communications President and Chief Executive Officer Tom Rutledge revealed.

The goal is to use IP communications to the set-top box, which will act as a thin client that can be updated from the head-end to support new capabilities, including security system functionality.

Charter is working on technology that would enable any set-top box the company has deployed to act as a thin client that the company can easily upgrade through an IP connection. The company hopes to have the technology deployed throughout its network by 2015. “From an investment perspective and a capital intensity perspective it [makes things] a lot easier,” said Rutledge of the new approach.

The thin client approach also will enable Charter to “leverage the interactivity of our network,” said Rutledge, adding “that’s what differentiates us from satellite.” Using a thin client “enables you to stay state-of-the-art and it’s also customizable,” Rutledge noted. “Whatever interfaces you think are attractive might not be what somebody else thinks is attractive and you have all the different demographics,” he said. “I could see a world where everybody could make up their own user interface.”

[Commentary] With Federal Communications Commission Chairman Tom Wheeler vowing to take action against state-level laws that block municipal broadband networks, we are seeing considerable debate about the pros and cons of those networks. Nineteen states currently have laws limiting and in some cases effectively prohibiting municipalities from offering commercial services on broadband networks constructed by the municipality, according to the Institute for Local Self-Reliance. I thought it would be a good idea to review the arguments on both sides.

Supporters of municipal broadband opposition laws
Chairman Wheeler’s opponents, including industry research consultancy The Precursor Group, say the FCC would be overstepping its authority if it were to take the sort of action Wheeler has threatened. “Municipalities are legal creations of the state, not the federal government,” argued Scott Cleland, president of The Precursor Group, in a blog post.

Opponents of anti-municipal broadband laws
Municipal network supporters, including the Institute for Local Self-Reliance’s Community Broadband Networks Initiative, dispute the claim that “the vast majority” of community networks have been failures. Noting that there have been more than 400 municipal projects to date, Chris Mitchell -- director of the ILSR’s Community Broadband Networks Initiative -- said there were some projects that didn’t work out but others that have had major benefits. As for FCC authority, Mitchell said the recent Net Neutrality court decision said that the FCC had the authority to remove barriers to broadband network deployments.

What happens next?
In taking action against anti-municipal network legislation, Mitchell believes the FCC will go after the “most egregious” state-level laws. He cited North Carolina as one state with such laws, noting that the North Carolina law totally prohibits municipal networks. But if the FCC makes such a move, Cleland argues that it will encounter substantial opposition.