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Welcome to the Cascadeo Rural Broadband Stimulus Newsletter.
Cascadeo Corporation, based in Seattle, Washington and with a team of engineers spanning the globe, works with rural and metro telecommunications carriers throughout the country. We design, implement, and operate a wide range of systems and broadband access solutions.
With over 30 years of collective experience providing strategic guidance, senior-level network engineering talent, and federal grant application assistance to our clients, Cascadeo is uniquely positioned to help telecommunications carriers and ISPs take advantage of the rural broadband stimulus portion of the American Recovery and Reinvestment Act (ARRA). As veterans in the ISP and Internet backbone industries, we understand the rapid growth in demand for bandwidth, last-mile infrastructure limitations, and the backhaul challenges faced by telecommunications companies of all sizes.
In writing this newsletter, our aim is to ensure that each organization chooses the most cost-effective solution for the needs of their constituents. We will be providing updates on the progression of the broadband stimulus bill and strategic ideas to leverage this once-in-a-generation opportunity.
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Rural Broadband Stimulus Program Updates
- The National Telecommunications and Information Administration (NTIA) will issue its rules for grant applications mid to late June 2009
- The NTIA application deadline for 1st round applications 30-45 days after issuance of rules
- The Rural Utilities Service (RUS) announced that applicants have 60 days to submit after call for proposals
- The RUS has repeatedly suggested that first round funding will be concentrated on "shovel-ready" projects.
- Stimulus funds must be spent by September 2010 per the ARRA.
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Wireless vs. Fiber vs. DSL vs. Cable: The Last Mile
Wireless
access technologies are maturing at a rapid pace, and are being
deployed into increasingly rural areas as carriers expand their
network footprint. CDMA-based carriers bet on the wrong horse, backing
a standard that has quickly fallen out of favor as GSM (the global
standard for mobile telecom) has become the technology of choice. The
advent of the iPhone has done a lot to drive GSM adoption in the United
States. Unfortunately, Apple's decision to limit iPhone sales to
AT&T customers has resulted in absurdly high prices and a
dangerously overloaded network. Dropped calls and bandwidth
"brown-outs" are very common to most iPhone customers. Regardless, 3G
GSM is now the wide-area wireless technology of choice around the
world, and rural ILECs in the US need to be aware of the threat this
technology poses to their landline and ISP operations. 4th generation
cellular technology (LTE) and WiMAX promise even more bandwidth than
the 7 Mbps available using today's 3G technology.
DSL was a once-promising technology which, like CDMA, ended up being the wrong solution to a complex problem. Carriers like Qwest who had field trials of VDSL are decommissioning those systems. It is the opinion of Cascadeo's engineering staff that DSL networks will increasingly be abandoned as LECs migrate to FTTX (fiber to the customer) solutions.
Fiber is clearly the best overall long-term bet for non-wireless telecommunications carriers who want to solidify their position as the access provider of choice to their communities. With the per-port cost of Gigabit Ethernet dropping to all time lows, the broad availability of IPTV, VoIP, cloud computing, and other next-generation products, and the rural broadband stimulus funding up to 80% of the cost of fiber construction projects, now is the time for rural carriers to nail down immediate plans for FTTX deployment.
Cable modem technology (DOCSIS 3 in particular) is a stepping-stone for carriers, cable operators, and others who have existing coaxial cable networks. By running fiber to head-end equipment, and leveraging the latest DOCSIS 3 standards, speeds of 50+ Mbps are possible. It should be noted that this is magnitudes slower than what is possible with fiber, and that HDTV IPTV will quickly saturate DOCSIS 3 networks if traffic engineering techniques are not used. It is the opinion of Cascadeo's engineering team that copper cable access networks will be abandoned as carriers upgrade to FTTX.
In short, our belief is that the near-term battle will be fought between cable, fiber, and wireless carriers, but in the long run, the real winners will be carriers with high-bandwidth wireless networks and carriers with extremely high-bandwidth fiber optic networks. Both of these technologies are capital intensive and unfortunately, the wireless industry is and will continue to be dominated by a small number of powerful companies. The real opportunity under the ARRA is the construction of fiber optic networks. Companies who fail to do this face steadily declining revenues as customers migrate to next-generation access technology. The closest parallel to this decline was the demise of the dial-up ISP industry once cable modem access became broadly deployed.
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What's Next: Adapting to the Future
The rural broadband stimulus program provides regional telecommunication companies an opportunity to deploy next-generation technologies that will allow savvier organizations to finally bridge the digital divide, offer the latest high-value products to their customers (IPTV VOD, VoIP, cloud computing and storage capabilities), and link communities that have been under-served for decades.
For many such companies, the primary barrier to expanding services beyond dial-up and the 1-2 Mbps provided through existing DSL networks is the high cost of building a fiber infrastructure, lack of Government support on a local and Federal level, and their continued investment in dead-end access technologies (copper, VDSL). The ARRA is a once-in-a-generation opportunity to move beyond copper and to increase the bandwidth -- and revenue -- to each customer.
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Building Backbone Capacity in Rural America
Many regional telecommunication companies have found that most rural areas lack access to the backbone capacity to justify the cost of building fiber or other high-bandwidth access infrastructure. To resolve this problem, some rural LECs are banding regional telecommunication companies together to create their own local backbones so they will be less reliant on big carriers and the high price of bandwidth.
Others have considered opportunities to freely interconnect, at very low cost, with public Internet exchange points to gain direct access to Google, Microsoft, Akamai, Yahoo, and other major sources of internet content. These strategies, coupled with federal stimulus money, will allow rural telecommunications carriers to significantly increase bandwidth to customers, lower their backbone infrastructure costs, and provide next-generation products to business owners, hospitals, schools, Government entities, etc.
Cascadeo has assisted rural carriers achieve operating cost reductions of up to 70% by leveraging public peering, cooperative bandwidth purchasing, and strategic engineering of their backbone networks.
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Gaining a Competitive Advantage
Gaining a competitive advantage in today's marketplace can be a major challenge. With cellular network operators rapidly building in to markets previously considered "safe" by rural carriers, and the demise of dial-up and DSL access technologies, there has never been a more urgent need for rural carriers to solidify their position as the carrier of choice in their respective markets. Having worked with a number of these organizations over the years, our engineering team suggests the following approach:
- Formulate a strategic vision. Concentrate on next-generations technologies that will help bridge the digital divide and link your constituents. Generally, this means fiber to each customer, as a gradual overlay to existing DSL or DOCSIS cable modem networks.
- Focus on projects that are shovel-ready and can be completed within 24 months. Leverage the rural broadband stimulus package to shift the bulk of the cost to the federal government.
- Focus on using broadband to create telemedicine, e-learning, and national energy projects. These are part of the selection criteria for obtaining grants, loans, and loan guarantees from the federal Government.
- Partner with local or state government agencies. Again, this increases the likelihood that grants and loan applications will be approved.
- Work with legal and engineering resources who understand the technologies and political issues surrounding the stimulus package.
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Making the Pitch
Obtaining Stimulus Money for Broadband Deployment
Access to reliable broadband is no longer a luxury -- it's a necessity. In the global information economy, fast, reliable, secure, and affordable broadband access is critical to economic development and innovations in business, education, and science. Just as rural communities have depended on land-line telephone service for decades, universal broadband access is now the basis of rural and national growth and prosperity. Specifically, there are several areas that will benefit substantially from broadband access, and highlighting the ways your rural broadband stimulus project will help increase the chances that funds will be awarded.
Education
With broadband access, students can quickly and confidently access online data to conduct research for school projects. Adults can take online classes to improve their skills, receive an accredited degree, and to learn about the latest developments in a wide range of fields such as agriculture, electrical engineering, and healthcare. Rural communities would have the unique opportunity to attend top-tier institutions, provide distance learning, and retrain individuals who were previously laid off.
Heath Care
Improved broadband access in rural communities allows hospitals, medical facilities, and doctors' offices to take advantage of new technologies such as telemedicine, medical imaging, and real-time access to experts spanning the globe. Health care professionals in rural areas can consult with colleagues anywhere when diagnosing and treating patients, medical images can be transmitted in a matter of seconds, and patients/doctors have instant access to online medical records. Additionally, doctors are able to attend training courses online, diagnoses are more accurate and timely, and information can be shared between physicians with ease.
Agriculture
Many agricultural communities depend on reliable broadband for access to real-time satellite weather information, to track commodity markets, to keep up-to-date on agricultural science, and to locate new markets both domestically and internationally. Additionally, there has been a significant increase in farms using Internet based systems to run their irritation systems, track shipments of resources, and coordinate deliveries with suppliers.
Job Creation and Retention
In a Michigan State study of the impact of RUS funded improvements to broadband access in select rural parts of Michigan, Texas, and Kentucky showed that most residents quickly signed up for high speed internet service, matching the sign-up rates in large metropolitan cities. In these areas, investment in broadband technology was coupled with education programs aimed at convincing people about the benefits of Internet access. The result was that broadband users were statistically more likely to start businesses, attend online classes, and less likely to relocate from the area.
Broadband can open rural areas to new business opportunities, attract new residents, and provide access to online classes. Companies small and large today seek to do business in areas with affordable and dependable broadband, an educated labor force, and superior communication capabilities for residents. It used to be that businesses would avoid areas with spotty and expensive power, unreliable telephone service, and poor transportation infrastructure. Businesses are now avoiding areas lacking sufficient broadband access. Without broadband, many businesses and communities can't thrive in the digital age. With broadband, jobs are created, and communities are saved.
Build Towards a Clean Energy Economy
Rural communities with highly
educated, healthy, and technologically advanced residents are well
positioned to attract and create AARA mandated "green jobs" and to
attain AARA "green funding." These jobs require "21st century skills"
that broadband access can help provide.
The educational opportunities created by affordable broadband
access can accelerate business demand in rural areas for clean
industries. For instance, rural communities are especially well suited
to participate in building green "smart grid" systems to power the
nation. This is doubly true for agricultural communities, where
biofuel production may soon become a key driver of economic growth.
These systems are built on a basis of having safe, secure, and reliable
broadband access.
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June 3rd Cascadeo Webcast
At 11:00 AM PST on June 3rd, 2009, Cascadeo will be hosting an hour-long webcast that will cover the following topics:
- Next-generation technologies that are ready to be deployed today
- Backhaul technologies, including those that, in many regards, are recoverable expenses
- Last-mile technologies, especially those centered around fiber-to-the-home and Ethernet technologies
- IPTV, particularly HD IPTV, which will radically change end-to-end bandwidth requirements
- A vision for an "open-source," cooperative approach to bringing massive bandwidth at a low cost
- A brief case study of a rural Washington carrier who is implementing these strategies
If you are interested in joining us, please do so here. You are also invited to contact Chris Reimer for any further details regarding this no-cost event.
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