Broadband providers capex holds steady, questions about network access remain

Private sector investment in national broadband infrastructure totaled nearly $66 billion in 2011 according to new data from the United States Telecom Association (USTelecom), a trade association comprised of private sector providers. Wireline projects required the majority of capital investment.

According to the report, wireline broadband providers invested nearly $27 billion last year. From 1996 through 2011, wireline broadband providers invested approximately $640 billion in broadband infrastructure.

High-speed fixed access and fiber core networks are essential to carry the large volume of data traffic, which has grown from the equivalent of 8.3 million DVDs per month in 2000 to more than 1.4 billion DVDs per month in 2010, and is expected to triple again over the next five years.

At the state and local level, some firms such as Calix, a US-based middle-mile provider, have been gaining ground as states work through several broadband projects with funding from the BTOP program. The BTOP program provides federal funding support for states and municipalities seeking to expand localized access to high speed broadband through anchor institutions such as hospitals, schools, libraries and public safety institutions.  The funding is provided through federal stimulus funds.

The research brief says that the capital investment shows that “the broadband industry remains committed to deploying more and better broadband across the country.” However, these claims are questionable as bills have been put forward in several states by the same companies that comprise USTelecom, to stop municipal broadband networks in areas where the private sector has been open about having no plans to build out this much needed infrastructure.

On Monday, Public Knowledge a group that works to maintain the openness of the internet sent letters to to the heads of the largest landline and wireless companies asking about another access limiting issue – the implementation of data caps which curb the amount of data consumers can use on the network without extra charges.

Letters were sent to the heads of wireless companies AT&T, Verizon, T-Mobile and Sprint, and to landline companies Verizon, AT&T, Comcast, Time Warner Cable and Cox Cable.

The letters followed two other actions designed to bring to light the creation of artificial scarcity of bandwidth by private providers through the use of data caps on consumers.  The Group released a new white paper on Monday, which highlights several concerns and recommendations for how to handle data capping.

Consumers are typically unaware that their data use has been capped, and many times providers do not notify an individual that their use is being restricted. When consumers are aware of the practice it is usually through usage based billing which charges consumers based on what they use and can significantly impact how the network is used overall.  More providers are moving toward this type of billing model.

In a second action, Public Knowledge along with Free Press, the New America Foundation and the Consumers Union also sent a letter to the Senate Commerce Committee calling on Congress to examine data caps and their impact on consumers.

“If data caps had a legitimate economic justification, they might be just a necessary annoyance. But they do not have such a justification. Arbitrary caps and limits are imposed by multichannel video providers that also provide broadband Internet access, because the providers have a strong incentive and ability to protect their legacy, linear video distribution models from emerging online video competition,” the letter said.

The Commerce Committee is set to take up the issue in a hearing today.

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