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The Second and Middle Mile Challenge

October 8th, 2009 by Rob Curtis - Deployment Director, Omnibus Broadband Initiative.

Many of you may be familiar with the telecom term the "last mile"-the connection between your home (or wireless device) and your broadband service provider.  Somewhat less familiar, however, are the terms "second mile" and "middle mile," the connections between your broadband service provider and the Internet.  A Public Notice (PN) that we released today seeks comment and data on the pricing of second and middle mile connections to the Internet, and we hope that its release will inform us on the crucial-if not gating role-that these connections play.

As we noted in our mid-term presentation to the FCC last week, these connections-effectively high-speed "on-ramps" to the Internet-are critical links between communities and the broadband Internet.  Our workshops have indicated that in rural areas, calling these links a "second" and "middle mile" is somewhat of a misnomer, as these high capacity, multi-megagbit per second connections can be tens, if not hundreds of miles long-and can be very costly.  As a result, any plan to ensure broadband access for all Americans must examine closely whether these on-ramps are adequately available, reasonably priced, and efficiently provided in all areas of the country.

middle mile 2

The PN seeks comment in five general areas:

  • The Network Components of Broadband Availability, which focuses upon the needs and technology options for these second and middle mile links.
  • Availability and Pricing of these high-capacity circuits, based on technology and regulatory treatment.
  • Pricing of Internet Connectivity, which focuses upon the cost of access to the Internet backbone networks and whether that pricing is higher in rural areas.
  • Economics of Deployment, which asks about the extent and cost of self-provisioning and potential pro-active steps that government might be able to do to spur more deployment.
  • Nature of Competition and Availability of Alternatives, which asks questions on the nature and extent of competition for middle and second mile connections.

If you have examples and data that could contribute to the Commission's knowledge on this subject, please read the PN and file comments using either ECFS Express or, if you need to attach a file, our standard submission page.  Please note that your comments are responding to Public Notice #11.  You can also post comments on Blogband, and they will be included in the record for the National Broadband Plan.

8 Responses to “The Second and Middle Mile Challenge”

  1. tekBreryist says:

    The action taken to local and national disasters is awesome but it's a real shame that so many people take advantage of the negative situations.

    I mean everytime there is an earthquake, a flood, an oil spill - there's always a group of heartless people who rip off tax payers.

    This is in response to reading that 4 of Oprah Winfreys "angels" got busted ripping off the system. Shame on them!
    http://www.cbsnews.com/blogs/2009/08/19/crimesider/entry5251471.shtml

  2. Guest says:

    thanks

  3. Guest says:

    I would like to add that small telephone companies are consitently tying land-line phone service to DSL or other Internet access in an anti-trust manner. These companies treat their small population bases (i.e. captive audiences) as cash-cows without fear of the 1996 Telecom Act's provisions to open their market to competition because larger companies will not invest in infrastructure when the population base is so small. A small company can, therefore, require a residence to purchase and maintain a land-line phone account to gain access to the Internet while someone just a few miles away in an area served by a larger company can purchase only the services they desire. With cell phones and Voice Over IP doing for land-line phones what the automobile did for horses and buggies should the FCC not take a hard look at the dissent by Commissioners Copps and Adelstein in the 2003 Bell South decision and realize that the writing on the wall has been there for years now? How much longer will my home in a small town, with a wire from pole to house, continue to be without Internet because I, as a cell phone user, neither can afford nor desire a land-line phone? States and courts have had their hands tied by the FCC in the name of a single regulator, yet the scope of the Bell South decision fails to address changes and advances in technology and consumer behavior. When there is no competitive local exchange carrier in the picture why is a decision based solely on behavior between CLECs used as an excuse to allow what flies in the face of Taft-Hartley, the FCC's stated goals, and common sense? Broadband is already available where I live - there is no need for lofty goals of bringing "Broadband to Every American" in my case or in the case of thousands of Americans like me….just regulate the behavior of small companies who get away with anti-competitive behavior because their market is so small that a larger company has no incentive to step-in. I want to do business with a small, local company, but doing so at the expense of being required to purchase and maintain a monthly service that is not desired or needed is - I thought - illegal. Regulate this behavior and everyone wins. Even the small company will find there are users who don't currently subscribe to DSL or other Internet access because of the tying behavior who will subscribe when those ties are undone.

  4. Brett Glass says:

    The terminology used here is not consistent. Let's see -- if the portion in the middle of the chart is the "second" mile, and the portion closest to the end user is the "last" mile, then the "middle" mile must -- assuming that we are counting in whole miles -- be the first mile. Confusing!

    In any event, no matter what one labels the different portions of the network, it is the middle mile that is the most serious issue for small, competitive, and rural ISPs. Usually owned by a monopoly ILEC, it is by far the largest component of the cost of wholesale bandwidth.

    When my small ISP shops for backbone bandwidth (as we have been doing recently, because video has been saturating our upstream connections from 5 to 10 PM), we find that the ILEC prices it such that no matter which backbone vendor we use, the total cost of the bandwidth is more than if we bought that bandwidth from the ILEC. (The lower the cost per megabit offered by the backbone provider, the more -- anticompetitively -- the ILEC seems to ask for the middle mile.) As a result, the total cost of wholesale backbone bandwidth in rural areas such as ours is between $100 and $400 per Mbps per month.

    This obviously has a great impact on the cost of broadband service. Suppose a customer wants a 1 Mbps link and wants to stream video at that rate at prime time. An ISP must buy enough bandwidth to satisfy users during peak usage periods (even if it sits idle at other times), so we must buy between $100 and $400 worth of bandwidth to serve that customer. We must then add something for overhead, technical support, capital costs, infrastructure maintenance, and all of the other costs of providing service.

    While the FCC has not yet announced an official definition of broadband or indicated whether it should include a specific amount of bandwidth, it's quite clear that even 768 Kbps would likely cost more than many customers would be willing to pay, and more than some economically disadvantaged ones COULD pay.

    The FCC must therefore take action on "middle mile" connectivity. What's more, if it wants to be sure that it helps consumers rather than hurting them, it should make this a higher priority than its proceeding regarding "network neutrality." Here's why: It is reasonable to assume, though we do not yet know the details, that virtually any set of "network neutrality" rules that is imposed by the Commission will require ISPs to supply (and, thus, to buy) more bandwidth. If the Commission does nothing about the cost of wholesale bandwidth (which is actually rising in our area due to transport costs), ISPs in high cost areas will either have to raise prices -- harming consumers and broadband penetration -- or become financially unsustainable and go out of business (likewise harming consumers). Therefore, a proceeding addressing the exorbitant cost of "special access" lines should be completed before any regulations are imposed which might require ISPs to purchase more of it. By doing this, the Commission can ensure that it does not force consumers to pay higher prices for broadband or harm competition in the broadband marketplace.

  5. Guest says:

    another important factor I don't see mentioned here will be security and insulation from attack.

  6. Guest says:

    you start with the prejudice that customers are at the end of the "last mile". That presumes everything originates with the carriers, and unfairly shapes the debate. In the Internet world customers should not be viewed solely as consumers of services provided by some centralized content provider. Start with customers (we do employ you, after all) and call it the "first mile". Then you can begin to recognize that networks need to be symmetrical, and that their utility depends on connections not content.

  7. Guest says:

    The government should build out the (interstate) middle man network. Once it is operational it should fractionally sell off shares of the ownership of that pipe. Access would be open to all but connectivity costs and profits would be fractionally shared between owners. The benefits of sure a proposal would be that, It would get built, and not be owned by the government or a single entity. I do believe that ONLY the government would build out a necessary but not immediately profitable venture such as this. Free enterprise is only interested in making a profit, not in providing a break even or in some instances a short term loss venture.

  8. Michael from NJ says:

    The problem with the semantics and the models is that EVERYONE is viewing the issues from a one or two-dimensional (flat) perspective. The reality is that we have 4 competing network topologies (and a fifth if the electric utility companies are included) and business models that have developed over the past 100+ years: fixed telephony, broadcast media, data packet, and mobility. Until a comprehensive 3-D framework/language is agreed upon that accounts for convergence through and across these networks, nothing substantive will come of the current administration's efforts. It will be worse than the well-intentioned, farcical 1996 Act.

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