Sunday, April 1, 2007

Broadband Briefing Paper

Below is a briefing paper has been prepared for the Bronx Hearing. In it, you will find general information on broadband in New York. What is it? What can it be used for? Where is it available?


Broadband technology has made the world ‘flat’ so that, in a growing number of places, anyone with a laptop computer and a broadband connection can now compete in the global economy. Many countries have implemented policies on the local and federal levels to quickly expand broadband availability and adoption rates as well as encourage the development of higher-speed services. However, the United States (U.S.) is falling behind primarily due to the government’s failure to implement policies that promote competition in the areas of affordable access and quality of service. The U.S. dropped in ranking of broadband penetration from being 4th in the world in 2002 to 16th in 2006. The situation in New York City is a microcosm of this problem. The City is one of the most wired cities in the United States, but we are falling behind our international competitors. While the majority of businesses located in Manhattan enjoy multiple options for broadband, many of the businesses around the five boroughs have limited options for obtaining broadband and often find it impossible to access a reliable high-speed connection at all. Most residents have only one or two service providers from which to choose, and many are unable to afford the service. Without broadband and the newest communication technologies, residents are at an immediate disadvantage in this information-based global economy.

1.0 What is broadband? Is it important?

Broadband stands for Broadband Internet Access, which is a high-speed connection to the Internet. The Federal Communications Commission (FCC) defines broadband service as “data transmission speeds exceeding 200 kilobits per second (Kbps), or 200,000 bits per second, in at least one direction: downstream (from the Internet to the user’s computer) or upstream (from the user’s computer to the Internet).” However, the FCC's definition of broadband is much slower than average broadband speeds of DSL and cable modem and many feel it should be revised upward to reflect this reality. Broadband’s high-speed Internet connection is progressively replacing old dial-up Internet connections, and allows users to access new services in line with modern technology improvements. This kind of connection permits consumers to access comprehensive databases, communicate through phone and videoconferencing, and download music, movies and television, all through a computer. Broadband connections also allow people to view streaming media at speeds closer to what might be associated with television because transfer speeds for broadband are up to 50 times faster than dial-up modems. According to a survey by the Pew Internet & American Life project, in 2005, 68% of American adults, or about 137 million people, used the Internet and fifty-three percent of these Internet users had a high-speed connection at home, which is up from 21% of users in 2002. The study also showed that 22% of American adults were offline, 40% were dial-up users, intermittent users, or non-users who live with an Internet user, and 33% of Americans were broadband users. In addition, a U.S. Department of Commerce report stated that while the number of households with Internet connections grew by 6.9 million between 2001 and 2003, the percentage of households with high-speed Internet or broadband connections more than doubled in households during the same time.

In many parts of the world and the U.S., broadband is increasingly viewed as a necessity, just like electricity, clean water, and telephone service, because it is a powerful tool that increases one’s quality of life and improves economic opportunities. Broadband connections can be delivered through various technologies, including standard telephone lines, cable, digital subscriber line (DSL), satellite, fiber, or wireless technologies.

2.0 What is broadband used for? Who uses broadband?

2.1. Broadband spurs economic growth

In 2001, a study by the Yankee Group predicted a $223 billion cost saving with universally available broadband in the United States, while an August 2002 study by Dataquest estimated that the implementation of ‘true’ broadband infrastructure could result in an incremental increase in U.S. gross domestic product by as much as $500 billion annually for the next 10 years. Given how recently broadband has been adopted, there has been little new empirical research on the economic impact of broadband. However, in 2006, the U.S. Department of Commerce released a report measuring the economic effects of already-deployed broadband technologies and addressing the question of future impacts. The Department concluded that “broadband access does enhance economic growth and performance, and that the assumed economic impacts of broadband are real and measurable.” In addition, a 2005 Applied Economic study showed that Lake County, Florida “experienced approximately 100% greater growth in economic activity relative to comparable Florida counties since making its municipal broadband network generally available to businesses in the county.”

More importantly, however, broadband helps build the capacity of entire communities – cities, counties, states, and countries – to compete withother communities and countries in the global information economy and around the world. A strong technology infrastructure is crucial for attracting businesses and highly educated, creative professionals who help drive economic growth.

2.2 Broadband uses for the community and individuals

2.2.1 Broadband is the gateway to the Internet and the newest communications technologies
Broadband enables individuals to take advantage of the Internet, which is quickly becoming the primary source of information for everything from text and sound to image and video. Additionally, broadband gives people the ability to use the newest, most advanced (and usually cheaper) communications technologies, such as VoIP (Voice Over Internet Protocol), video telephone, and IPTV (Internet Protocol Television).

2.2.2 Broadband helps children learn and teachers teach
Access to broadband helps children learn in school as well as after school, allowing for ‘learning moments’ to occur at any time. Studies have shown that access to a computer, in combination with broadband access in the school, can improve children’s engagement in the classroom, increase their personal productivity, and improve their attitude toward writing.

2.2.3 Broadband helps people find employment
More and more, the Internet is becoming the place where employers post job opportunities that are not available through word of mouth or in-person community networks. Of the 92% of Fortune 500 companies that used corporate websites for active job recruitment in 2003, one- third did not give job seekers the option of applying for jobs offline.

2.2.4 Broadband enables e-government and e-democracy
With ubiquitous broadband access, broadband allows all New York City residents to take advantage of more governmental services that are becoming accessible through the Internet, saving residents time and money, and reducing the cost of government services. Also, high-speed Internet access allows people to participate in the democratic process much more easily by making it easier to donate campaign money online, communicating and collaborating with others who share their political views, or by sharing their thoughts with elected officials.

2.2.5 Broadband improves everyone’s quality of life
Broadband saves its us time and money by giving us the ability to bank online, shop online, and find information on just about anything online. Because of this, as of March 2006, 84 million Americans had broadband at home, which is a 40% jump from March 2005.

According to a recent survey by the Pew Internet & American Life project:
• 40 million Americans rely on the Internet as their primary source for news and information about science.
• 92% of respondents qualify the Internet as a good place to get everyday information.
• 85% of respondents say the Internet is a good way to communicate or interact with others.
• 61% of Internet users between 18 and 29 have looked for jobs online, while 42% of those ages 30-49 looked online for jobs.
• 69% think the Internet is a good entertainment resource in everyday life.

2.2.6 Universal access helps level the socio-economic playing field
Universal access to technology narrows the digital divide between high- and low-income residents and can help level the socio-economic playing field. Disadvantaged young people who gain technological literacy through meaningful access to the Internet are better equipped to compete in today’s job market.

2.3. Broadband helps businesses and nonprofits grow

The enormous investment in broadband technology during the bubble, combined with the commoditization of computers, computing power that continues to grow exponentially, and the development of robust software to help computers and people communicate and share information, it is now possible to work from virtually anywhere. Broadband is now at or near the top of ‘must-haves’ for most businesses.

Broadband enables all businesses—for-profit and non-profit—to develop and grow while at the same time becoming more efficient and cutting costs. Businesses become more productive because they can communicate and share files quickly and easily with partners and customers via e-mail and the Web. Broadband helps businesses save on communication costs through the use of VoIP; they can use video-conferencing capabilities and save travel expense; they save on rent through telecommuting programs. Finally, broadband enables businesses to improve their marketing efforts, as companies can reach a larger pool of customers, especially those located in other parts of the U.S. and in other countries.

For nonprofit organizations that provide direct social services, broadband enables them to take advantage of technologies that reduce the time and money spent on administrative tasks, thus freeing up the organization to spend more resources delivering services. Broadband also increases service providers’ ability to share information about their clients, and increases their ability to deliver the right service at the right time to the right person.

3.0 Broadband technologies and speed

Broadband Internet really makes a difference when downloading or uploading heavy documents such as music or movies. With an old dial-up connection, it would take several minutes to take a few seconds.

Modern use of Internet is also about communication: VoIP (Voice Over InternetProtocol), video telephone, and IPTV (Internet Protocol Television). These new technologies make it possible to have a conversation with anyone from anywhere on this planet. Industry experts predict that within a few years, homes will need vastly more bandwidth capacity than is currently available. A recent study by Jupiter Research concluded that by 2009 the average household will need 57–72 megabits per second (Mbps) of bandwidth and ‘tech savvy’ households will require 100 Mbps. Much of this bandwidth will support in-home wireless applications, as well as high-definition television and other bandwidth-rich applications.

4.0 Affordability of broadband

In the U.S. Department of Commerce’s 2004 report, A Nation Online, 38.9% of non-Internet users, or Internet users with only dial-up access, say the main reason why they have not adopted broadband is because it is “too expensive”. Assuming the monthly broadband service fee is $50 a month, over the course of a three-year period, broadband costs at least $1,800—an amount approximately equal to or more than the cost of purchasing and using a computer for three years. According to a study by MuniWireless, there seems to be a gap in Internet access between income levels with “approximately one out of 10 households with incomes below $30,000 reported having high-speed Internet access” compared to six out of ten households with income over $100,000 having Internet access.

5.0 The US is lagging behind

According to the OECD, the U.S. broadband penetration ranking dropped from 4th in 2002 to 12th in 2006, with 19.2 connections per 100 inhabitants. By comparison, Denmark leads the world with 29.3 connections per 100 inhabitants. With such a low penetration ranking, the United States is far behind countries such as the United Kingdom (U.K.) and Iceland, which have made rapid progress in broadband adoption.

The average ADSL connection in the U.S. offers download speeds between 1.5 Mbps and 3 Mbps, and upload speeds between 512 and 900 kilobits per second (Kbps), just enough for streaming video, not for standard or High definition TV. The average cable modem connection provides download speeds between 3 and 10 Mbps, with upload speeds varying between 384 and 1000 Kbps. These connections cost consumers $35 to $45 per month on average.

By comparison, Japanese and Korean consumers have access to broadband connections with speeds up to 100 Mbps, and prices are much lower (average of $35/month). In the U.K., a 24 Mbps connection costs about $50 per month. Additionally, since April 2005, some households in Hong Kong now have access to 1 Gbps connections.

6.0 National perspective

Spending on U.S. citywide wireless networks reached $235 million in 2006 and this number is predicted to almost double in 2007 with $459.6 million in spending. This rise is due to a large push in adoption rates of municipal networks by large cities and counties. In 2005, Philadelphia was the only major city working on implementing a municipal network yet, only a year later this number rose dramatically with large cities such as Chicago, Los Angeles, and Boston pursuing wireless programs. The number one use among large and small cities and counties for these municipal networks is for public safety applications with building inspection and public works coming in second. An example of this public safety aspect is New York City’s selection of the Northrop Grumman Corporation to create a Citywide Mobile Wireless Network for the City’s first responders and other city agencies.

Citywide networks are also being used and paid for in many different ways by constituents. About 48% of networks are free to residents while 46% can be accessed by local businesses for a fee. In some cases the free access is provided at low bandwidths with high bandwidth being accessible for a low rate. Large cities usually provide their networks to constituents in a few ways with different fees types. With costs in mind, ownership of municipal networks has also become a topic of much debate. There has been a significant push in the direction of third party ownership and operation of networks, especially in large cities, with 56% having or expected to have this model of management while smaller municipalities continue to operate their own network. U.S municipal networks today span an average of 39 square miles but this number is expected to rise in the next few years. In addition, network deployment has had a variety of challenges that cities need to overcome. The top challenges for cities consist of performance concerns, topographic problems, political challenges by incumbent service providers, and security concerns.

6.1 U.S. Broadband Initiatives

The following is a list of broadband developments currently underway in the U.S.

Philadelphia, PA – Philadelphia selected EarthLink to build, operate and maintain its citywide wireless network, Wireless Philadelphia. The network is now being tested across the city and is scheduled for full completion by late fall 2007. Wireless transmitters called routers, which use about as much electricity as a 60-watt light bulb, have been installed on light poles and other tall structures throughout the test zone. The full deployment will include subscriptions for wireless high-speed broadband internet service for homes and businesses, roaming capability for outdoor use throughout the city, and free access to "wireless hot spots" covering a total of 10 square miles of public parks throughout the City. In addition, Wireless Philadelphia willallocate discounted accounts to low-income households, also is known as Digital Inclusion. With EarthLink rates ranging from $9.95 to $21.95, the network is expected to generate over $10 million for citizens and create 6,000 new jobs.

Boston, MA – Mayor Thomas M. Menino formed a WiFi Task Force in February 2006 to explore wireless possibilities for Boston. The task force included three local technology experts that were appointed as co-chairs by Menino, and 19 representatives from the business, academic, and wireless communities, as well as members of city government. In July 2006, the task force delivered a 56-page report detailing their research and recommendations. The report recommended that the city identify and partner with a private nonprofit corporation that will be entrusted with the funding, construction, and operation of a carrier neutral wireless network. In March 2007, the Boston Wireless Initiative created, a private, non-profit corporation that will develop, implement and operate a network to provide affordable wireless internet access throughout the City of Boston. The first pilot project will be deployed soon and will cover approximately one square mile.

Los Angeles, CA – Mayor Antonio Villaraigosa outlined plans in February 2007 to blanket Los Angeles with wireless Internet access by 2009, in what would be one of the nation's largest urban Wi-Fi networks. The initiative, that will provide Internet services to the city's four million residents, will cost around 60 million dollars and would be funded by advertisers and telecommunication providers. The City wants to create a public-private partnership and will start seeking bids in the fall. The City is also forming a working group and will hire an expert to help with the details of the project. The winning bidder will pay for the installation and the city will donate space for antennas on city buildings, light poles and other structures.

Chicago, IL –Chicago released a draft Wireless Broadband RFP for comments in May 2006 and released the final RFP in September 2006. The City hopes to provide universal and affordable high-speed Internet access for all Chicago residents, businesses and visitors to the city, with special attention to low-income populations. The city is looking to create a public-private partnership model in which the city will spend no money except providing access to its street light poles, traffic signal poles and other infrastructure on a non-exclusive basis. The winner of the bid must finance, own, maintain, and operate the network while providing access to the network on a wholesale basis.

San Francisco, CA – In April 2006, San Francisco selected a joint bid by EarthLink and Google to provide San Francisco with a wireless citywide network. According to the selection, Google will manage the free 300 Kbps Wi-Fi service, while EarthLink will offer the faster premium service of 1Mbps for up to $20 a month. The free service will be supported by advertisements appearing on computer or laptop screens logged onto the network. In January 2007, an agreeement was finally reached between the two companies and the city yet, before the building of the network can begin, the city Board of Supervisors needs to approve the contract.

Atlanta, GA – The City of Atlanta created the Wireless Atlanta initiative in order to provide wireless Internet access throughout the City through a public/private partnership. The City released a RFP in June 2006 and expects that network deployment could begin as early as the spring of 2007. Wireless Atlanta will be funded by a private service provider and will offer wholesale services to other providers at a competitive rate.

Houston, TX – In October 2005, Mayor Bill White of the City of Houston announced an initiative to make wireless broadband services available throughout the City. The City released a RFP in March 2006 and then selected EarthLink in February 2007 to provide a wireless network that will cover 600 square miles and will be completed by June 2009. With 15,000+ nodes expected to be installed, the network will be open for purchase to other Internet service providers at wholesale rates that cannot exceed $12 per month for the first seven years. Under the deal, EarthLink will invest $40 to $50 million in the network and pay a leasing fee to use city property such as light poles. EarthLink will charge $4 per month to low-income families and pay the city 3% of all subscriber gross revenue on an annual basis. In addition, the city will pay the network provider at least $500,000 per year. In February 2007, the Houston City Council approved the contract with Earthlink.

Mountain View, CA – Google created a free city-wide wireless network in Mountain View, California in August 2006. The network, which covers 12-square miles and almost 72,000 residents, includes 380 access points throughout the city and offers 1Mbps of bandwidth. While Google did not charge the city anything for building the network, the company also covers the maintenance and utility costs itself. In addition, the city stands to receive payments from Google for the placement of equipment on city-owned light poles.

Silicon Valley, CA – Silicon Valley Metro Connect, a group comprised of IBM, Cisco, SeaKay, and Azulstar, announced in September 2006 that they would be providing free wireless broadband throughout 42 cities in the Silicon Valley area. The network, a combination of Wi-Fi and WiMAX , will span 1,500 square miles. There will also be six tiers of service including two free tiers, the first of which will be limited with download speeds of 256 kilobits per second and upload speeds of 60 kilobits per second. The second free tier, called "Kids," will be used by children and will only offer secure filtered content. Advertising will heavily support these free models. The other levels will have anywhere from 400 to 1,000 kilobits per second and cost between $14.95 and $59.95 per month.

Minneapolis, MN – The City of Minneapolis selected US Internet in September 2006, to build and operate a 60-square-mile broadband wireless network. The project, which is expected to take up to a year to build, will provide residents with Internet access from 1 to 3 Mbps download and upload speeds for $19.99 a month with this price capped for ten years. Business customers will receive the same access for $29.99/mo while City government workers will only pay $11.99/mo. The City has agreed to pay US Internet $2.2 million up front and $1.25 million a year so that City services, like police and fire, can become anchor tenants.

Suffolk and Nassau, NY – Suffolk and Nassau counties in Long Island, N.Y. issued a joint RFP in January 2007 in order to find a private partner or consortium to build, own, and operate an outdoor wireless network that will cover approximately 750 square miles and 2.7 million residents, making this network one of the largest of its kind in the US. The counties are willing to become anchor tenants on the network and pay for services and access to wireless Internet for the schools.

California – In October 2006, Governor Arnold Schwarzenegger signed an executive order to create a broadband task force that lets experts from government and businesses work together to identify and eliminate obstacles to making broadband internet access ubiquitous in the state. The task force will also recommend additional steps the Governor can take to promote broadband access and usage.

New York – Governor Spitzer announced in his State of the State speech in January 2007 that, in order to close the digital divide, the state must implement a Universal Broadband Initiative to ensure that every New Yorker has access to affordable, high-speed broadband.

7.0 New York City initiatives

On February 9, 2004, Department of Information Technology and Telecommunications (DoITT) issued a Request for Proposals (“RFP”) to award non-exclusive franchises for the installation of mobile telecommunication equipment and facilities, on City-owned lightpoles. The RFP permits the placement of small, lightweight, mobile telecommunications reception/transmission equipment such as microcell antennas and other types of transceivers and similar equipment, on City-owned street light poles, traffic light poles, and/or highway sign support poles. DoITT received 9 proposals and granted 6 franchises in July 2004.

The New York City Economic Development Corporation released a RFP on June 14, 2006, for a Broadband Feasibility Study to “deliver a thorough, objective, fact-based feasibility study of the current state of broadband in New York City and to explore whether there is a need for a citywide broadband network as a municipal initiative and whether such would be legally, technically, practicably and economically feasible for New York City.” In September, the City selected, through a competitive bidding process, a private firm named Diamond Management and Technology Consultants, to conduct the study.

On September 12, 2006, Mayor Bloomberg and the Commissioner of DoITT, Paul Cosgrave, announced the selection of the Northrop Grumman Corporation to create a Citywide Mobile Wireless Network (CMWN) for New York City first responders and other city agencies. The city of New York, acting by and through DoITT and Northrop Grumman have entered into a $500 million contract to build and maintain the CMWN. This contract has been described as “the most aggressive commitment by any municipality to provide a next-generation public safety network.” The CMWN will give first responders from the NYPD and the FDNY rapid access to extensive data, including federal and state anti-crime and anti-terrorism databases, mug shots, and live video streams.

8.0 Ambitious government policies throughout the world

8.1 Europe

Since 2000, the European Union has been committed to the goal of bringing broadband to its population. European countries have instituted open-access policies for their broadband networks in which governments require national telephone and cable TV companies to allow competing companies to provide service over their broadband networks. This has produced fierce competition in the broadband markets where telecommunications providers compete on speed, quality, and price, not on who controls the physical broadband network. The consequences of these open-access policies have been near universal broadband access, high broadband penetration rates, a wide range of broadband services and applications, faster broadband speeds, and lower broadband prices.

Europe is now at the next step. The European Commission has set up a market development organization, the Fiber-to-the-Home (FTTH) Council, whose mission is to educate, promote, and accelerate the deployment of fiber in access and the resulting quality-of-life enhancements. Municipal FTTH rollout is now rising in northern Europe and elsewhere. European cities such as Paris, Amsterdam and Vienna are among cities planning to offer residents cheap or free broadband access. A few examples of this are:

• Amsterdam – The Amsterdam City Council agreed in January 2006 to launch phase one of Citynet, an FTTH project aiming to cover all 420,000 homes in Amsterdam.
• Paris– Paris is offering tax cuts to companies installing fiber in sewers and other city-owned infrastucture and officials there say they want at least 80% of buildings connected to the Internet through fiber by 2010.
• Germany – NetCologne, a regional telecom company active around Cologne, Bonn and Aachen, launched Germany’s first FTTH network in July 2006.
• Sweden – The Swedish Urban Network Association (SSNF), a trade group for network owners developing broadband infrastructure, is exploring FTTH. Members of the Association include some 150 municipal and 10 or so private local and regional network owners, plus service providers.

However, despite such enthusiasm for FTTH today, the impact on European broadband is likely to be limited in the short term. In the mean time, European countries are quickly expanding their DSL and cable services. Penetration could hit 60-70% in many larger nations in the next 2-3 years.

8.2 Asia

On March 28, 2003, the Japanese Ministry of Internal Affairs and Communications laid down the Asia Broadband Program aimed at “making Asia as a whole an information hub of the world.” The Program is a coalition of Asian countries committed to the goal of enabling “all people in Asia to gain access to broadband platforms including access from various public facilities, and to use applications utilizing broadband advantages to the fullest.”

This initiative has helped Asia remain on top on communication technologies. According to the ITU 2006 World Information Society Report, “The Asian economies of the Republic of Korea and Japan continue to lead in digital opportunity, due to their pioneering take-up of broadband and 3G mobile services.” In 2006, there were more than 78 million broadband connections in Asia (41% of the World’s total broadband connections). 70 million Japanese could access Internet on their cell phone and 69.5% of email traffic went through their mobile telephones. In Korea, nearly all Internet subscribers are broadband subscribers, connected via 100Mbits FTTH networks (with a broadband penetration of 90% among Internet users).

The Asia Broadband Program was revised in August 2006, considering progress in diffusion of broadband platforms and implementation status of measures proposed. The new objectives are defined as:

• Encourage standardization between countries and cities (cooperation on cell phone digital networks between China, Japan and Korea, IPv6 protocols).
• Offer new opportunities for developing countries in Asia, within the framework of Japan’s ODA (Official Development Assistance) and APT (Asia-Pacific Telecommunity), an intergovernmental body comprised of governmental agencies, telecommunication companies, and research centers. Cooperation and assistance projects have been launched to bring broadband access to rural areas (such as in Vietnam, Mongolia or Laos).

The Asia Broadband Program reflects the strong political engagement from both national and local governments to encourage universal broadband access in Asia. In September 2006, Japanese Prime Minister Shinzo Abe announced Japan’s goal to be the digital interface between Asia and the rest of the World. This commitment is a good example of the ability of local or national communities to place themselves at the center of the Global Village.