Expert Opinion
Alexander Goldman: Broadband Expert Andrew Odlyzko Warns Telecom Investors That Industry Has Its Math Wrong, Again
November 4, 2014 – Nearly a year-and-a-half ago, Verizon Communications CEO Lowell McAdam claimed in an editorial in The New York Times, “The United States built its lead because companies invested nearly $1.2 trillion, over 17 years, to deploy next-generation broadband networks.”
That number is meaningless: over a period of 17 years, much of the infrastructure would have to be replaced at least once. Internet progressed from dialup to digital subscriber line (DSL) to cable and fiber today. Cell phones went through at least two generations of change in this time. McAdam may be quoting meaningless numbers because meaningful numbers don’t make Verizon look too good.
You can find meaningful numbers for investment and profitability in the latest paper by Professor Andrew Odlyzko, a mathematics professor at the University of Minnesota who has a history of getting internet statistics right when the rest of the world gets the numbers wrong. In 1998, when telecommunications industry boosters were claiming that traffic was doubling every 100 days, Odlyzko said it was growing by 75 percent to 150 percent each year. The difference between 1000 percent each year and 100 percent each year turned out to be the difference between telecom boom and telecom bust. He gets his numbers from authoritative sources such as the OECD and CTIA.
Today, when the cellular telephone industry claims that it is burning cash, Odlyzko says it’s not true. When the cellular telephone industry says its business is driven by demand for high bandwidth video, Odlyzko says that industry growth is driven by demand for communications, and that the interesting trend is that texts are replacing voice calls.
In his new paper, Will smart pricing finally take off? (available here), Odlyzko prints the following table:
Table 2: Voice to text substitution (US)
year | voice minutes billions | texts billions |
2005 | 1,495 | 81 |
2006 | 1,798 | 159 |
2007 | 2,119 | 363 |
2008 | 2,203 | 1,005 |
2009 | 2,275 | 1,563 |
2010 | 2,241 | 2,052 |
2011 | 2,296 | 2,304 |
2012 | 2,300 | 2,190 |
The cell phone companies are pleased because texts are where the profits are, as explained by table 1, price per megabyte (the table shows approximate numbers, but those approximate numbers show where the profits are):
SMS | $1,000.00 |
cellular voice | 1.00 |
wireline voice | 0.10 |
residential Internet | 0.01 |
backbone Internet | 0.0001 |
The reality is that cellular networks don’t need to invest in platinum-plated networks. Their customers merely require a network that can deliver text messages. Cell phone network companies (if you can believe their SEC filings) are incredibly profitable, and are spending relatively little on infrastructure:
year | revenues in $ billions | capex in $ billions | capex/revenues |
2004 | 102.1 | 27.9 | 27.3% |
2005 | 113.5 | 25.2 | 22.2 |
2006 | 125.5 | 24.4 | 19.4 |
2007 | 138.9 | 21.1 | 15.2 |
2008 | 148.1 | 20.2 | 13.6 |
2009 | 152.6 | 20.4 | 13.3 |
2010 | 159.9 | 24.9 | 15.6 |
2011 | 169.8 | 25.3 | 14.9 |
2012 | 185.0 | 30.1 | 16.3 |
Odlyzko estimates that it would cost only $240 billion to replace the equipment in every cell phone network in the U.S. He reasons:
In wireless, industry statistics show that cumulative capital investment, from the start of service three decades ago, came to $365 billion by the end of 2012. Much of that investment has of course been written off, as old equipment gets replaced. So to replace everything (and it is far easier to replace telecom installations, even cell towers, than it is to replace electric power plants), would probably not cost more than half of the cumulative total, or about $180 billion. But just to be safe, let’s assume it would take $240 billion.
He thinks it is shocking that Verizon had to pay $130 billion to buy out Vodafone’s 45% share of Verizon Wireless. It makes sense only because “modern telecom is less about high capital investments and far more a game of territorial control, strategic alliances, services, and marketing, than of building a fixed infrastructure.” Verizon must be assuming that Vodafone’s high profit margins will continue but that is only possible if the cellular telephone market in the U.S. has already succumbed to the market failure known as monopoly.
This blog post does not describe the focus of the paper, which argues against an assumption by many industry analysts that telecommunications companies should charge based on usage instead of charging a flat fee. The numbers, which are a mere excerpt, are useful because once again, Odlyzko is warning the industry that it has its numbers wrong, and the last time Odlyzko had the numbers right and the telecommunications industry got its numbers wrong, telecommunications investors lost $1 trillion.
Alexander Goldman is a recent graduate of Brooklyn Law School, and recently passed the New York Bar Examination. He worked at ISP-Planet and ISPCON, was Chief Analyst for CTI’s American Recovery and Reinvestment Act grants, and had internships at the Federal Communications Commission and the Internet Division of the NY State Attorney General. At Brooklyn Law School, he was a Trade Secrets Fellow and won CALI awards in Contracts and Antitrust.
BroadbandBreakfast.com accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@broadbandcensus.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of BroadbandBreakfast.com and Broadband Census LLC.
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Expert Opinion
Craig Settles: Believe in the Healing Power of Telehealth
Healthcare organizations are seeing telehealth as an opportunity to enhance connectivity with patients and improve healthcare outcomes.

Listening to many politicians and National Telecommunications and Information Administration officials, you’d think “broadband” is practically synonymous with “telehealth.” So let’s go with it! Make telehealth front and center, the marketing hook of your NTIA Broadband Equity Access Deployment and Digital Equity Act grant applications.
Do a medical needs assessment of NTIA’s eight populations (target markets): 1) low-income urban dwellers, 2) rural communities, 3) Native American communities 4) veterans, 5) seniors, 6) people with disabilities, 7) those for whom English is a second language, and 8) the incarcerated. Low-income Americans have high rates of heart disease, diabetes, stroke, and other chronic conditions compared to higher-income Americans.
How many people would we help with telehealth and how many people would go home with a computing device? A marketing win-win – attack the disease, attack the digital divide.
By the numbers
The Centers for Disease Control and Prevention reports 4 of 10 adults live with two or more chronic diseases. That’s 103.2 adult human beings. Imagine if we leveraged those $45 billions from NTIA, the thousands of all staff people, and the hosts of volunteers to treat, cure, or prevent chronic conditions?
In 2020, 1,603,844 new cancer cases were reported and 602,347 people died. About 695,000 people in the U.S. died from heart disease in 2021 and the disease costs us about $239.9 billion each year in 2018 and 2019. 37.3 million people have diabetes.
Many more millions suffer from and die from lung disease, strokes, Alzheimer’s disease, obesity, and kidney disease. What’s more, many these of chronic diseases are driven by unhealthy lifestyles – smoking, minimal physical activity, poor nutrition, and excessive alcohol use.
Make sure the numbers include the dramatic disparities. For example, African Americans make up 12% of the U.S. population, but twice as many die from strokes (100,000) as all other ethnic groups combined. Studies have found that Black people between the ages of 45 and 54 die of strokes at a rate that’s 3 times greater than their White counterparts. Being overweight or obese increases your risk of stroke. About three out of four Hispanics are overweight.
Telehealth making a difference: Gilda Radner’s legacy
Gilda’s Club Twin Cities, part of the Cancer Support Community global non-profit network providing free social and emotional support for those impacted by cancer, offers telehealth to medically underserved Minnesota urban and rural residents. The club partnered with telehealth firm Equiva and ISP Infinti Mobile to enroll members in the Federal Communications Commission’s Affordable Connectivity Program, to sign them up for Internet access, and send them tablets preloaded with special content.
“CSC organizes the telehealth content in a way that makes sense for their constituents,” says Beth Strohbusch, head of marketing for Equiva. “Members learn about cancer treatment options, digital support groups, and free psychosocial services if members are having problems with depression.”
Strohbusch believes it’s not just hospitals and support groups pursuing broadband and telehealth. Healthcare organizations, nursing homes, and financial risk-bearing organizations are seeing telehealth as an opportunity to enhance connectivity with patients and improve organizations’ financial and chronic healthcare outcomes.
Jason Welch, Infiniti president, says, “Equiva has a reach we don’t have – the healthcare communities, the cancer support community, those in elder care, the larger healthcare organizations. Infiniti saw a natural, practical fit. The Equiva ACP Connect Program is a practical combination of services that are easily explained. Our customers understand accessing healthcare and related resources from their computers and is the data transport mechanism allowing them to do so.”
The eyes have it
Age-related macular degeneration affects the central part of the retina that allows you to see fine details clearly. AMD causes damage to the macula and results in blurring of your central vision. It is a leading cause of blindness among older Americans and is more common in individuals of European ancestry.
Ocutrx manufactures an augmented reality corrective devices that tackles AMD and doubles as patients’ cell phone with Wi Fi, 4G, and 5G capabilities. CEO Michael Freeman says, “We build circuit board in our headsets that enables them to do everything that cell phones do, control seven cameras, and creates the six degrees of freedom where patients can pose virtual objects out in front of their eyes.”
The user puts on the headset and continually does a field test in each eye. Software signals the device when the user can’t clearly see an object, which triggers the cameras that starts projecting real-time on the lens a live 60-frames/second video. Augmented reality moves pixels from the peripheral to the front of the user and within 13 milliseconds the user can see the object.
Ocutrx has a headset for patients with chronic disease. Patients and their doctor each has a headset and cell phone capabilities for talking real time over an encrypted network. This headset measures temperature, respiratory rate, heart rate and other readings. Freeman adds, “Its camera can be disconnected so you can show the doctor your arm or leg.” To treat ‘lazy eye’, AI in the headset let’s patients play a game virtually. It frosts the lens of the good eye and makes the lazy eye work harder and tracks how well the eyes work together when they’re doing the exercises.
The fruits of telehealth
Telehealth vender Fruit Street delivers digital therapeutics for addressing bad habits that have medical consequences. CEO Laurence Girard says, “digital therapeutics may be programs that deal with sleep, stress, and resiliency, others may focus on opiate addiction or general mental health.
One in three adults have prediabetes in which someone’s blood glucose (sugar) level is too high but not high enough yet for a diagnosis of type 2 diabetes. Fruit Street’s Digital Diabetes Prevention Program combines group telehealth sessions, wearable devices, and dietary tracking in the vender’s mobile application. Besides lowering the risk to develop type 2 diabetes, the program can also lower the risk of having a heart attack or stroke, improve health overall, and help subscribers feel more energetic.
Consider nonprofits marketing core digital therapeutics within a community. Imagine teams of “Life Changers” whose main goal is to embed broadband, smart home, cloud, and telehealth infrastructure that keeps residents healthy while reducing asthma, diabetes, hypertension, and other chronic illnesses.
Craig Settles conducts needs analyses with community stakeholders who want broadband networks to improve economic development, healthcare, education and local government. He hosts the radio talk show Gigabit Nation, and is Director of Communities United for Broadband, a national grass roots effort to assist communities launching their networks. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Expert Opinion
Kristian Stout: Red Tape and Headaches Plague BEAD Rollout
States must overcome numerous hurdles before BEAD will be able to succeed.

As part of the $1.2 trillion Infrastructure Investment and Jobs Act that President Joe Biden signed in November 2021, Congress allocated $42.45 billion to create the Broadband Equity Access and Deployment program, a moonshot effort to close what has been called the “digital divide.” Alas, BEAD’s tumultuous kickoff is a vivid example of how federal plans can sometimes become a tangled web, impeding the very progress they set out to champion.
In the weeks since the BEAD initiative was rolled out by the National Telecommunications and Information Administration, state officials have been voicing mounting concerns over what they see as bureaucratic roadblocks to implementation. Tamarah Holmes, director of Virginia’s Office of Broadband, recently called BEAD “the most burdensome federal program” she’s ever encountered. Given that she previously worked for the U.S. Department of Housing and Urban Development, an entity notorious for extensive bureaucracy, that’s saying something.
One frequently cited problem has been NTIA’s preference for fiber-optic connections, which finds itself in tension with realities on the ground. While fiber connections often provide the best solution, implementing them can be challenging in rough terrain and remote areas. Other technologies like fixed wireless and satellite often make better sense in such territories. Here, the one-size-fits-all approach that NTIA has preferred is proving detrimental to a more tailored, location-based strategy.
This should not be news to NTIA. As Sen. John Thune, R-S.D., and his colleagues noted in April, states must overcome numberous hurdles before BEAD will be able to succeed—from labor stipulations that are more prescriptive than inclusive to the program’s inexplicable favoritism for government networks over private enterprises. Coupled with requirements like the middle-class affordability option, which will essentially function as a form of rate regulation, the entire implementation push has been creaking under the weight of its own red tape.
In its initial notice of funding opportunity, NTIA also required a preference for noncontract labor when an internet service provider rolls out a network. Unfortunately, there are not nearly enough fiber-optic technicians available in the United States to keep up with the demand created by BEAD. Thus, creating impediments to quickly bringing technicians online only saddles the program with further costly problems.
So, where does this leave America’s ambitions of broadband equity and access?
For one, there’s a compelling need to reassess the BEAD initiative’s guiding principles. The rigidity that’s currently the program’s hallmark needs to be replaced with adaptability. Each state, with its unique geography and challenges, should be given the flexibility to chart its own digital course. The federal role should be that of facilitator, not gatekeeper or, worse still, roadblock.
Moreover, implementation should be guided by a principle of technological neutrality; preferences for particular technologies simply do not make sense. Above all, realities on the ground must shape deployment strategies, not overarching directives that may be disconnected from the local context. The impending workforce challenges must also be addressed proactively. The most obvious solution would be to remove requirements that frustrate the onboarding of technicians as expeditiously as possible.
America’s broadband aspirations will only be realized through a commitment to adaptability and putting the demands of reality ahead of political preferences.
Kristian Stout is the director of innovation policy at the International Center for Law and Economics. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Expert Opinion
Scott Sampson: How Fiber Can Build a Work Culture in a Remote World
Greater reliable and secure broadband bandwidth is necessary to support a quality remote culture and work environment.

With the increased popularity of working remotely, organizations are being challenged to create and maintain a positive culture in a virtual environment. While elements of creating a strong, collaborative work culture have not changed, technology has taken on a more vital role during the surge in remote work.
A core necessity needed to support remote workers is high-speed Internet connectivity. Remote workers count on their Internet service provider to deliver the connectivity needed to keep up with and manage the applications required to have a successful workday in a remote environment. Fiber Internet is the best solution to provide the “enterprise-level” performance and reliability needed to support this paradigm shift.
Why is a strong remote work culture important and what are best practices?
Just like the work culture in the office, there are many benefits to developing a work culture that considers the remote nature of the environment:
- A strong and consistent remote work culture can unite employees and give them a shared sense of purpose.
- Remote work culture prepares organizations for future success.
- Remote work culture can build long-term relationships using the right environment.
Since the pandemic, companies have been working hard to create a remote work culture and a lot of best practices are coming out of that work:
- Create an environment of trust — To create a healthy remote work company culture, it’s important to communicate all the high-level decisions with teams to show employees that they are trusted completely to manage their work and are not being left out of the conversation just because they are not in the office.
- Share the company’s mission and goals — Creating an optimum and high performing remote teamwork culture becomes easier when everyone understands the mission and goals an organization is trying to achieve. It can work as a constant reminder for employees to always know what they are trying to accomplish as a team.
- Define the company’s remote work policy — Remote work or flexible work can mean different things to different people. As a result, a company needs to be as specific as possible about the organization’s remote work policy so the employees know exactly what to expect. More clarity will only lead to smoother remote work and better culture.
- Make face-to-face meetings a priority — While there is no replacement to meeting your team members directly, regular video calls can help close the communication gap. Team managers should hold regular one-on-one meetings with employees to build better connections, establish trust, and celebrate their individual accomplishments. Another simple thing — encourage team members to switch on their video during team meetings. Face-to-face communication helps workers get to know each other in a better way.
- Collect regular feedback and make changes accordingly — It is always a good idea to ask remote employees for their feedback regularly so that they can tell you what’s working for them and what just isn’t. Many are new to the remote work culture so feedback is invaluable.
- Use the right tools — The long-term success of remote work also depends on whether you’re using the right tools to manage work. Such things as video conferencing, a digital workplace platform for collaboration, or instant messaging are essential to supporting the remote culture workers’ needs. Having the right tools makes a difference, but just as important is having high performing bandwidth to make those tools perform optimally.
Broadband connectivity is the technological backbone for building a remote culture
All kinds of technology tools are popping up to better support the remote worker from online video conferencing to digital workplaces to cloud-based data management tools. As a result, greater broadband bandwidth that is reliable and secure is necessary to support the delivery of a quality remote culture and work environment. There are four reasons why:
- Performance Needs to Be Comparable to That in the Office – Just because one is remote doesn’t mean poorer network performance than the enterprise is okay. Companies are demanding commercial grade Internet performance at home, too.
- Remote Enterprise Applications Demand More Bandwidth — New, advanced applications requiring greater network speeds that could only be available at the office need to be attainable by remote workers.
- Scalability Is Paramount — Broadband connectivity needs to be able to scale as more remote workers require access and applications require greater bandwidth and performance.
- To Duplicate In-Person Culture, Bandwidth Needs to Do More — Bandwidth needs to be fast enough to support technologies that can more closely duplicate in-person culture, such as AI, real-time interactive streaming, and human resources applications that analyze unique types of data about the employee experience and interaction, often in real time.
While technological innovations will continue to change and improve the cultural experience for an organization regardless of where an employee works, the demand for higher performing, more reliable, and more secure bandwidth will be needed. Fiber is the only technology that can meet these demands today and scale to meet even greater demands in the future.
Scott Sampson is an experience executive with extensive knowledge in all aspects of telecommunications and IT and is one of the industry’s leading experts on fiber to the home. He has worked with companies such as Arrow Electronics, ULA, and Rio Tinto, as well as a successful sale of a company he co-founded. Sampson is known for building high-achieving teams. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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