Covering the Conference

Some of our attendees are blogging the conference:

• David W: http://www.johotheblog.com

Photos from the conference are at:

• http://www.flickr.com/photos/akma/tags/f2c09/ (AKMA)
• http://www.flickr.com/photos/docsearls/sets/72157616205843715/ (Doc Searls)

We will be reviewing the speaker presentations and video streams to see if we can post that shortly.

Conference Notes from Philip M. Neches

From: Philip M Neches
Subject: F2C Conference, part 1

Municipal Fiber Panel

Tim Nulty, CEO East-Central Vermont Fiber:

• ~38 going full service municipal fiber utilities
• “wholesale only” business model doesn’t work, those doing it are in financial trouble
• ~45 million Americans in rural areas, conventional wisdom says will never have broadband
• cheaper to run fiber than copper was 80 years ago, inflation adjusted
• no fundamental reason that rural fiber broadband can’t work
• fiber is cheaper and more economic than wireless — if you intend to offer universal service
• wireless works economically if it is an add-on to fiber — but “sucks” if it’s done first
• his area: $70M for fiber; $35M for wireless first, but 1/4 the revenue and poor service; $10M for wireless as an add on to fiber and much better service (billing, back-haul, etc., already in place)
• financing with tax-exempt municipal debt is a key advantage — much cheaper than equity, cheapest debt
  • Any attempt to get private equity into the picture loses advantage of tax exempt muni bonds
  • (This is what Gil Williamson, former CEO of NCR, used to call a “one ton point”)
• non-profit corporation organized to develop and operate network, but municipalities finance and own network
• rural fiber can pay its own way — rural wireless can’t
• his example: 1,000 square miles, 16,000 miles of road; 200 wireless access points, 400 miles of fiber for wireless back-haul, 1,400 miles to bring fiber to all

Dick van der Woude, City of Amsterdam fiber project

• used municipal program to spur major incumbents to do open fiber
• in the blunt, confrontational way that is so very Dutch
• fiber needed as back-haul for wireless
• need access within building — to get to customer on top floor, need to get to all floors

Lev Gonick, CIO Case Western Reserve University

• 1M end users, 1,800 facilities, health care facilities, schools, libraries, museums, governments
• 501c(3) not-for-profit corp.
• 5,000 wireless access points
• layered solution: fiber as base layer, WiFi as overlay
• poor urban areas equivalent to rural areas in lack of broadband access
• governance entrepreneurial, not big company or government, light-weight organization
• partner with incumbents for last-mile service (but not residential)

Bill Schrier, CTO City of Seattle

• Municipal WiFi doesn’t work economically, fiber does (City commission report)
• $500 M, comparable to sports stadium, small compared to major highway project
• Electric utility is a key partner (they have the poles!)
• HDTV videoconferencing is the killer app! (not possible on wireless; also needs symmetrical bandwidth)

Panel on Net Politics

Tim Karr, organizer, blogger

• critical juncture in media world: mainstream media -social media
• align: media reform, free culture, open government
• old media, particularly television, still the dominant experience for most people

Nathaniel Jones, Media and Democracy Outreach Foundation

• Politicians need same media to reach public, regardless of party

Ellen Miller, Sunlight Foundation

• Looking for connections between campaign contributions and earmarks
• Use the Internet for “scavenger hunts” for information
• 15M searches on USASpending.gov in 2 years
  • rapid launch because OMB licensed Sunlight Foundation’s database
• “Outed”: Dennis Hastert, Ted Stevens, Charles Rangel
• Executive branch now responsive to openness; legislative branch lagging
• Real-time (e.g. daily) reporting of political contributions would be helpful

From: Philip M Neches
Subject: F2C Conference, part 3

Experiences from Burlington, VT, fiber network

Larry Keyes, IT guy for project described in talk

• tele-class for seniors who have had — or fear having — a fall
• 3X week for 15 weeks on-line Tai Chi Chuan class
• TV STB — living room — need large area for exercise
  • use any broadband network: DSL, cable, muni fiber
• patients see instructor full screen; instructor sees up to 12 patients in windows
• controller manages bandwidth, audio, video
• problems:
  • cable installers — sub-sub-sub-contractors don’t care if it works
  • DSL — distance
  • echo cancellation
• it works — trying to expand to group treatment for other conditions

Eva Sollberger, Seven Days, local weekly newspaper in Burlington VT

• does video journalism for Seven Days web site
• bring new audience from UTube postings
• 122 5-minute videos over 2 years; highly edited
  • 20 – 30 hours of editing per 5 minute video
• many focused on non-profits, who embed video on their own sites

From: Philip M Neches
Subject: F2C Conference, part 4

Muni Network Failures Panel

Esme Vos, MuniWireless

• hot zones (big cities) and small towns looking for broadband (no incumbent)
• believes muni wireless private efforts failed because companies did not get city support — financial or anchor tenant
• 50% of devices are Apple OS — think mostly iPhones (Philadelphia experience)
• wireless meter reading

Sascha Meinrath, New America Foundation

• providers didn’t meet community needs
• who will control local connectivity?
• Post Office was 75% of federal employees — de Tocqueville
• history of telecom, told from the very far left
• connectivity should be a benefit from living in a civil society

Ken Biba, Novarum

• measuring wireless: WiMax, muni WiFi, 2G/3G cellular
• problems with “muni wireless 1.0″
  • no free lunch
  • indoor access not feasible
  • free is not a sustainable business model
  • EarthLink under-covered: about 40% of needed coverage
  • 50 nodes/square mile needed
• what went right?
  • video surveillance, public safety, parking meters, internal municipal communications: have good business cases
  • hybrid fiber/WiFi networks outperform WiMax — 802.11n has 5:1 cap cost advantage over WiMax with more RF capacity
• Cell data performance doubled vs. 2 years ago
  • best muni WiFi about 2-3x better than cellular; 802.11n better still
• Mobile 802.11n is a WiMax killer [my conclusion]
  • 5 GHz 802.11n adds 500 MHz for 802.11bg with no new regulation
  • Good that it doesn’t penetrate walls — outdoor and indoor networks unlicensed and don’t interfere with each other
• Applications with business cases drive deployments
• Why police going WiFi vs. 3G/4G?
  • price $60/police car too much (for budgets)
  • can’t do uplink video
• Unlicensed bands have bigger chunks of bandwidth than licensed — creates advantage for unlicensed
  • all heading for 3 bits/hertz due to semiconductor technology

L. Aaron Kaplan, Vienna Community Mesh Network

• failure resistance should be better
• started with remains of failed commercial wireless ISP

Dewayne Hendricks, Tetherless Access

• “The tools make the rules”: technology is better now
• Remember MetroComm? $1B investment, 150 kb, gone and forgotten
• Radios on light poles — run into problems with local permits — happens every time!
• Bottom line: play the regulatory game better this time
• “Welcome back to the fight. This time, I know our side will win.”
  • Shades of Paul Henreid in the AFI Silver Theater!

From: Philip M Neches
Subject: F2C Conference, part 5

Session on Regulation

Chris Savage, attorney

• Intelligent Regulation and the Death of the Chicago School
• market forces — like gravity, indisputably there, but not inherently good or bad
• revealed preference theory: actually wrong (behavioral economics shows)
• post-Chicago school: if competition (market) doesn’t always maximize benefit, what does?
• 6 – 18 month window of opportunity starting now
• Comment from audience: government should write the rules so that private enterprise makes the most money doing the right things.
• Regulators learn faster than courts

Derek Slater, Google

• broadband policy analyst, works in Mountain View with Google engineers
• how to sustain health, open, innovative Internet
• MLAB — Google operation to test Internet measurement tools
  • Distributed servers to help researchers deploy tools widely enough to get useful data: MLAB
  • 36 by end of April — want to recruit more to work with them.
• Why are you not getting the speed you expect?
• Infrastructure is special — we are reawakening to this notion

John Peha, CTO, FCC

• The Mythology of Rural Broadband
• Less demand? No, less availability, so less penetration
  • 1/3 of rural households do not have access to terrestrial broadband at any price
• Broadband deployment has externalities: small business creation, job creation, property values
  • not accounted for by a market-only approach
• Reverse-network effect: reducing the size of a network (dial-up) reduces the network benefit to remaining members
  • as broadband becomes the norm, dial-up users are harmed
  • also non-Internet services: newspapers, airline reservations, tax forms, etc.
• Government solutions, especially one-size-fits-all, can have more cost than benefit

Thomas Friedman, New York Times

• Hot, Flat, and Crowded is about America, not energy, how we lost our groove and can get it back
• America is exploding with innovation from the ground up — experience from last 6 months of book tour
• There are too many “Americans” in the world today — we have to re-define that lifestyle for the rest of the world
  • 2.5 “Americums” 300 million people living like America to ~9 today, and growing
• Petro-states: inverse relationship of oil prices and freedom
• Not global warming, but global “weirding”: extremes get more extreme
  • don’t know the difference between an act of man and an act of God
• Energy poverty: 25% of world population do not have electricity
  • will fall behind exponentially
• Loss of bio-diversity — Age of Noah, save/see last of species
  • the word “later” will disappear from the dictionary
• Incredible opportunities masquerading as unsolvable problems
  • Common solution: cheap clean electricity (energy)
  • ET – next big industry – country that dominates ET will dominate world — has to be USA
• To name as issue is to own an issue: “green” is owned by the opponents, not the advocates
  • green is geopolitical, patriotic, entrepreneurial, etc.
  • green is the new red, white and blue
• Green is really a revolution when someone gets hurt.
  • Change or die
  • Make “green” disappear because it becomes the norm
  • ecosystem for innovation
  • need correct price signals
• IT was a greenfield, ET is not
  • every innovation has to compete with cheaper, dirtier, established technology
  • oil, coal — commodities: as demand goes up, price goes up
  • solar, wind, etc: technologies: as demand goes up, price goes down
  • e.g.: carbon pricing is a must
• Change your leaders, not your light bulbs

From: Philip M Neches
Subject: F2C Conference, part 6

Muni Fiber Session II

Geoff Daily, app-rising.com

• creating new organization: Rural Fiber Alliance
  • fiber to every building; wireless everywhere
  • we’re Americans – we can do it

James Salter, Atlantic Engineering

• Smart Grid and Fiber to the Home
• motivating reasons: environment, economics
• per-household electricity usage 3x in 50 years; more peaked 47% to 39%
• smart meters 2007: 6% of meters, 4% demand reduction, out of 902GW
• capital/customer: $12.5K/customer: 7.5K generation, 4K distribution
  • telecom is about $2K/customer
• experiment: $0.30/kwh peak $0.03/kwh off-peak, results
  • 30% peak reduction, 20% bill reduction, 5% total kwh reduction
• smart meter in every home — less than AIG bailout
  • at $2500/home, includes fiber-to-the-home at $1000
• 10% peak reduction in demand would cut enough coal usage to make a significant impact on CO2 emissions
• obstacles: standards, policies, pricing, disjointed industry (3,200 different utilities)

Terry Hurval, LUS (Lafayette Utility System)

• City established electricity & water utility in 1896; first fiber for utility use 1998; started selling fiber bandwidth wholesale & government customers 2000; added fiber as a utility in 2004
• cable, telco tried to block; using negotiations and lawsuits; LUS spent $3.7M on lawyers and elections; prevailed; ratepayers saved that much or more since cable co. restrained rate increases; positive press for city
• Fiber runs parallel to electrical power lines, use substations for minihubs; 3 rings of 96 fibers each (Lucent-Alcatel passive optical system; in-home box at demark converts fiber to coax, POTS, ethernet, IPTV, etc.
• Bonds issued 7/2007; construction started 8/2007; first customers 2/2009; full deployment 2011
• Typical residential package video, Internet, phone $85/$137/$199/month depending on bandwidth (10/30/50 Mbps symmetrical), premium channels, phone features, etc.; all service includes 100Mbps peer-peer; business packages up to 100Mbps for $199/month
• 70% residential + 80% of businesses want service, per survey
• $110M tax exempt bonds
• businesses cite benefits to community: keep jobs, people in town
• Q: will you allow open access (e.g. just connectivity, w/o phone, cable, etc, services)? A: not until bonds are paid off.
• Q: where does LUS get backbone? A: AT&T and Qwest, $50/mbps

Tim Denton, Commissioner, Canadian Radio & Television Commission (CRTC)

• equivalent of US FCC:
• 3 legal regimes:
  • Broadcast Act (licensed, regulated)
  • Telecommunications Act(unlicensed, regulated)
  • Commerce Act (unlicensed, unregulated)
• pushed through access to underlying infrastructure over objections of large carriers (different from US), carriers still contesting at cabinet level
• broadcasting over Internet: pushing through notion of exemption — claim jurisdiction but choose; not to use it
  • issue is taxing Internet broadcasting to fund Canadian content
• business community against it — don’t interfere
• artistic community for it
• not a single comment on freedom of speech (unlike US)
  • Net Neutrality next topic for CRTC

From: Philip M Neches
Subject: F2C Conference, part 7

Networks Here and There

Herman Wagter, CEO Citynet (Amsterdam)

• Schopenhauer: stages of truth
  • Ridiculed
  • Violently opposed
  • Accepted as self-evident
• High connectivity, within Amsterdam, within Netherlands, 660Gbps recent switching peak
• Natural desire for connectivity can be obstructed by social convention, laws
• No poles, high density, wires underground (lots of mud): how to avoid digging again in less than 30 years?
• passive fiber, star topology
  • 10,000 home-run connections per POP
  • much easier than with a Cu plant
  • multiple technologies/protocols/services over same fiber plant
  • ~$1,200 capex, fiber 10% labor 70% in cities: in suburbs more for fiber less for labor, result same
• regulatory regime: unbundled local fiber loop, central office access, back-haul access for competitors
• killer app: can I play cards with 4 friends? [e.g. HDTV video conferencing]
  • people want bandwidth to achieve low latency
• Q: pay for like streets, not by usage? A: regulators not ready for that notion
  Kevin Werbach, Obama FCC Transition Team
• Quasi-hostile takeover of a $14T corporation (US government) with minimum staff in 77 days
• What are the issues, what are the challenges, what are the options going forward?
• Agency was run by Chairman Martin in a closed, politicized way, not trusting of staff, silo, hostile to new ideas, top-down management style
• Titanic change happening in industries of concern; agency was established in a previous era
  • (so were most of the companies!)
• Get the FCC ahead of the curve:
  • spectrum as a pool of capacity rather than as discrete small allocations
  • was very creative under Chairman Powell, shut down under Chairman Martin, look at re-opening under new Chairman
• Embarrassment of riches in new administration: more care about technology issues vs. prior administration
• Q: direction with federal spectrum, NTIA? A: step 1 – inventory usage, federal, other; step 2 – develop plans, coordinate white-space database;
• Q: AT&T/Bush administration re-monopolized, re-verticalized industry, now what? A: change in last 2 years to more open access, not all the way, FCC can shine a light on the business dynamics & policy issues
• Q: should US have [cabinet-level] agency to roll up all spectrum issues from FCC, DoD, etc? A: could waste political capital w/o accomplishing much; use Internet for co-ordination with leadership from White House & agency heads
• Q: standards for smart grids? A: regulators need to think of themselves as standards bodies — push, delegate, advocate
• role for FCC as think tank, communications starter

Benoit Felton, Yankee Group

• perspective on fiber in Europe
• Sweden leading in fiber: 900k homes passed, 400k subscribers, 200 municipal utilities, 450 registered service providers (expect consolidation); also Norway, Finland
• Denmark: deployment driven by energy utility, not comm utility, low subscription rate, no coherent offering
• France: cable companies deploying fiber, poor uptake due to fight on in-home standards, history of poor service by cable providers
• Germany, UK, Ireland lagging
• Europe as a whole lagging US, Asia — but diverse results
• A couple of cases the operator voluntarily announced open access on passive and active fiber layers
  • regulator reacts by negotiating, rather than imposing rules
• Need 40% penetration to get less than 10 year payback (assumes EUR 1000 capex 45% GM)
  • best way to get take up is competition on services
  • open access actually in incumbent operator’s best interest, because it drives faster adoption, which drives faster break-even and sooner decommissioning of copper network
• Forms of open access
  • open ducts: second deployer only in very dense areas (Spain, France)
  • open dark fiber:
  • open lit fiber: US, Netherlands
  • open services: Sweden — maybe net neutrality is adequate, maybe not
• Applicability of experience to US? Arguments that US is unique don’t hold up under examination.
• Conclusions:
  • open access makes economic sense for private players everywhere in the world
  • vertically integrated NGA deployment doesn’t make investment sense, can’t achieve 3-5 year payback
  • profitable wholesale model crucial to NGA deployment
  • net neutrality is first step to service competition

From: Philip M Neches
Subject: F2C Conference, part 8

Internet and Planet Earth

Jim Baller, attorney

• introduced next speaker as “father of municipal broadband”
• 15 years ago, talked about link between energy and communications
• most popular program on Glasgow KY municipal cable system: small claims court

Billy Ray, Glasgow, KY

• 14,000 people in south-central KY
• 1986 initiated city-owned cable system to support electrical grid
• treated infrastructure as part of the electrical grid, cable tv rented from electrical utility
• folksy history of utility moving into cable, phone, Internet, fiber, etc.
• cable company followed utility street-by-street lowering price
  • publicity from this put city utility on the map!
• load shape determined by thermostats: control the thermostats =control demand
• key element that needs to be created: software to reflect generating profile to distributed thermostats
• less capital to build broadband to every customer than new generating capacity
• Q: what could make more towns do this? A: carbon tax would induce innovation

Andrew Revkin, New York Times

• moderated panel
• implementation of cap/trade: could be just trade and not have much climate impact

Bill St. Arnaud, Canarie

• reducing carbon is a business opportunity
• carbon tax: difficult political sell
• cap and trade: hidden tax on supply side only
• carbon neutrality: by mandate, in
• another approach: carbon rewards rather than carbon taxes — akin to loyalty programs
• virtualization: replace physical product, transportation, with networking
  • US is the leader in virtualization: Hollywood, Silicon Valley applications, university innovation, culture of early adoption/Internet
• consumers responsible for 60% of CO2 emissions, 40% direct, 20% indirect
• examples:
  • free WiFi on busses
  • free broadband in home, bundled with energy (gas, electricity)
• network operator gets revenue based on energy reduction

PMN Note: nobody talked about using cold storage to time shift electrical demand for air conditioning to off hours. Also, nobody talked (much) about distributed generation. I think these are big deals.

From: Philip M Neches
Subject: F2C Conference, part 9

Spending on Infrastructure: American Recovery and Reinvestment Act (a.k.a. stimulus bill)

Sharon Gillett, State of MA, Commissioner, Telecom & Cable

• MIT researcher, economic impact of broadband
• recruited to commission in 2006 by new governor’s administration
• 351 towns, 32 with no commercial broadband, ~50 more with partial service (MA map)
• RFI for public/private broadband initiatives — just before economic meltdown
• stimulus bill: $4.7B through Dept. of Commerce – NTIA, $2.5B through Agriculture (Rural Utility Service – RUS) — $3.9B for infrastructure — $10M for IG to insure rules follow, no waste/fraud — obligate 1/2 of money by September
• BTOP: broadband technology opportunity program, comments due 4/13, then issue rules, then solicit first proposals; NTIA retains all decision making
• Q: where did map come from? A: survey of town administrators
• other issues: business (fat pipe) services, back-haul (middle mile)

Thomas Cohen, Attorney, Fiber-to-the-home Council

• firm filed proposed rules to BTOP and RUS on behalf of clients, including FTTH Council
• Agencies under tremendous pressure — first oversight hearings this week
• driving forces: get people to work, create infrastructure, do it quickly
• first $ out the door in the fall?
• looking for projects that meet purposes of the act, are pre-packaged, will work, applicants have experience
• Rural Utility Service: 100X their regular budget; 75% rural with insufficient access to high-speed broadband
• BTOP: bring access to unserved areas, under-served areas, public awareness, public service, training/education
• Q: were filings technology neutral? A: yes
• think of application as a full blown business plan, packaged from beginning, make the granting agency look good, show that the project can really be accomplished
• success will encourage Congress to fund more programs in the future
• look at what CA has funded already for examples

Jim Baller, Attorney, Broadband Coalition

• discuss funding opportunities in other parts of stimulus bill
• $48B transportation funds, $4B for smart grids, $8B public safety, etc.
• bill intended to be first inning in a 9 inning game
• bill requires FCC to develop a national broadband plan by Feb 2010
• puts many things in play years before it might happen otherwise, encourages cooperation among groups
• dialog stimulated on longer term broadband policy, stimulus bill does not set policy, more work in years to come
• mood in the country is challenging, but it encourages innovation: very optimistic

Harold Feld, Attorney, Public Knowledge

• blogger Tales from the Sausage Factory
• shift in how people are thinking about the role of government
• reaffirmed values from original Communications Act: universal access, community institutions (libraries, etc,), data driven policies (vs. ideologically driven)
• parts of government working with each other: NTIA, RUS, FCC, etc.
• broadband ecology: value it for what it does for people’s lives
• message to carriers: it’s not all about you!
• private entities can apply, but must show that grant is in public interest
• network neutrality, value of competition, interconnection
• new way of doing business in Washington: conventional wisdom didn’t work (against the bill)
• enormous opportunity, don’t get complacent

Joanne Hovis, CTC Communications

• broadband must serve local concerns
• areas of concern: rural vs. metro debate — a fight along these lines would not serve either rural or urban interests, but would help entrench incumbents
• central government involvement (in broadband): US now getting involved, Europe/Asia have done this for years, reason why they got ahead of US; stimulus bill implementation sets example
• definition of broadband: 50 to 100 Mbps scaling to 1 to 10 Gbps — incumbents talking in terms of 1 – 5 Mbps — need to keep pressure on keeping definition aspirational and forward looking, not backward looking (result in falling further behind world)
• role of states: concern for conflict-of-interest as advisor to communities and potentially competitive applicant for funds; potential for private interest influence (15 states bar localities from broadband service)