Today's Top Stories While Google's (Nasdaq: GOOG) second quarter earnings report last week for the most part disappointed Wall Street, details of the Internet giant's spending on its data center footprint may have given chills to other data center operators. According to the earnings report, Google spent $1.6 billion in the second quarter alone on its rapidly expanding data center footprint. This outlay comes after Google invested about $1.2 billion in its data centers in the first quarter of 2013. With $2.8 billion put into its data centers through the first half of the year, the company is on pace to spend more on its data centers in 2013 than in any previous year. That is impressive, considering it invested $3.43 billion in data center buildouts in 2011, and then roughly $3.45 billion in 2012. In the last two years or so, the data center market has been growing beyond anyone's wildest expectations, as telcos have joined Internet giants like Google, Amazon (Nasdaq: AMZN) and Apple (Nasdaq: AAPL), as well as other independent data center operators and wholesale telecom providers. Some telcos have bought their way into the market, but after getting a glimpse at Google's billion dollars-plus expense every quarter, they may gain some new perspective on where they rank in the data center world. For more:
-see this Data Center Knowledge report Related articles
Telx recently opened a new data center in New York City
A mystery operator is building a giant new data center in Iowa Read more about: second quarter earnings 2013, Google
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The Federal Communications Commission will be seeking comments from the public on the myriad issues revolving around E-rate, the government's 18-year-old subsidy program that brings Internet services to schools and libraries, following a Friday vote in favor of modernizing the program. "Today, the Federal Communications Commission initiated a thorough review and modernization of the E-rate program built around three goals: increased broadband capacity, cost-effective purchasing, and streamlined program administration," the commission said in a statement. Launched in 1997, E-rate has connected 97 percent of U.S. libraries and schools to the Internet, the FCC reports. But many need to update those connections to meet 2013 demands. "According to a 2010 survey of E-rate applicants, half had slower connection speeds than the average American home and 39 percent cited cost of service as the greatest barrier to better meeting their needs," the FCC release said. "And according to a recent American Library Association survey, one quarter of libraries still have broadband speeds of 1.5 Mbps or less, and only 9 percent of libraries have speeds of 100 Mbps or greater." Maine State Librarian Linda Lord said in her testimony before the Senate Commerce committee on Thursday that 77 percent of Americans surveyed consider these access services "very important." "In Maine, the public library is the only place people can go for free Internet access in 77 percent of our communities. Nationwide, 62 percent of libraries report this is the case," Lord said. "When so much of what we do today is dependent on having a high-quality Internet connection, the library has become a lifeline. Our libraries could not provide this basic service without E-rate." In schools, the rise of digital learning is changing the way kids learn, making faster Internet a necessity. "The program should be aligned with today's technology," Margaret Spellings, former education secretary, told the Commerce panel on Friday. How the program will be revamped remains to be seen. Commissioner Ajit Pai has warned against expanding E-rate, urging the FCC to focus on "efficiencies" instead, a Reuters story reports. Public comment could help guide the FCC in its rulemaking process. Goals in the current proposal include improving broadband capacity, improving the funds application and FCC review processes, and making cost effective purchases. For more:
- Reuters has this story
- here's the FCC announcement
- Broadcasting & Cable has this article Related articles:
5 wireline issues Wheeler will face if he becomes FCC chairman
Fatbeam's EMAN acquisition ups Washington State fiber presence
Verizon renews MSA contract with MiCTA
Windstream lights up 1G fiber network for Richmond, Va. school district
FCC considers revamp of E-rate funding program Read more about: Education
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Frontier Communications (Nasdaq: FTR) employees in West Virginia are stepping up efforts for their voices to be heard as the carrier negotiates with the Communications Workers of America on a new contract that would affect about 1,600 Frontier workers in the state. Just a few days after employees rallied at Frontier's state headquarters in Charleston, workers and their supporters came out for another rally this weekend in Fairmont, W. Va. The current union contract, the first to come up for negotiation since Frontier acquired wireline properties in West Virginia from Verizon Communications (NYSE: VZ), expires on Aug. 2. Frontier earlier this year agreed to a deal with the IBEW union in Illinois that extended by one year the current contract for Frontier employees there. Frontier is just one of several large telcos that continue to face increasingly difficult contract talks with unions that are attempting to protect their pay and pensions. The latest activities come about a week after the employees had a town hall meeting with CWA President Larry Cohen and other union officials regarding progress toward a new deal. However, The State Journal reported this weekend that there has been little progress thus far in the negptiations. The West Virginia union members also are planning another rally this Saturday, July 27 in Charleston. For more:
-read The State Journal story on this weekend's rally Special Report: The battle for union contracts: AT&T, Hawaiian Telcom, others hash out wireline benefits Related articles:
Frontier recently met performance requirements of its Verizon lines acquisition
AT&T and the CWA last month ratified a new contract for Connecticut employees Read more about: West Virginia
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Onetime cable TV industry giant John Malone said in an exclusive interview with the Denver Post late last week that the U.S. broadband service provider sector should go the way of the wireless industry, eventually offering broadband packages under tiered pricing models based on data consumption, similar to how mobile data plans have evolved.  | | Malone (Image source: Liberty Global) | That was just one nugget from an interview which also implied that Malone could be the driving force behind a coming wave of consolidation in the cable TV industry. The industry pioneer who sold one-time cable TV market leader TCI to AT&T recently bought a 27 percent stake in Charter Communications through his Liberty Global business, and could be plotting other investments and deals.
Usage-based pricing has been a hard sell in the wireline broadband world. It has been discussed for years, dating back to some initial trials of the concept as early as 2008. But in several cases, trials and rollouts were delayed or aborted because of rampant criticism. More recently, some service providers have started to implement broadband usage caps, which in many cases go hand in hand with tiered and usage-based pricing. For more:
- read this Denver Post story Related articles
CenturyLink usage caps reportedly caused customer confusion
AT&T initially applied usage caps only to DSL users Read more about: John Malone, usage based billing
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It appears that U.K. regulator Ofcom has a solution to the recently-reported shortage of new phone numbers in the region, and it is a measure that U.S. customers will recognize. Ofcom has proposed that landline customers in markets where phone number reserves are especially shallow be required to dial area codes for local calls. That is something they don't have to do now, and which would allow more new phone numbers starting with 0 or 1 to be assigned. That idea is reminiscent of one of the initial changes U.S. phone companies began making more than 20 years ago under the North American Numbering Plan when numbers began running out in many U.S. markets. The U.K. number shortage has been projected in recent years to become worse, and other nations, such as Canada are beginning to have the same problem. A final decision has not yet been made, but after a comment period, Ofcom expects to issue a ruling on the matter this fall. Ofcom would then implement a new system for allocating new phone numbers in the neediest markets by October 2014. The U.K. markets where the number shortage has hit especially hard include Aberdeen, Bradford, Brighton, Middlesbrough and Milton Keynes. For more:
- see this Telegeography post Related articles
Ofcom has taken a hard line against service contract termination fees
Ofcom recently said it would look into a dispute between BT and BSkyB Read more about: number shortage, number plan
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Wireline telecom earnings in the second quarter of 2013
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