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May 29
Michel Guité of Vermontel asked me, “Is there any network anywhere in the world doing something better we should learn from? Maybe in Hong Kong or Singapore?” 1,000 homes now can connect at a true gigabit - up and down, with 15,000 more homes soon to follow. That’s as good as it gets, especially as broadband stimulus funding has brought the price down to $35/month. I should move to Vermont.
June 20th, please join me at Columbia’s CITI for a full day’s seminar on “The Future of the Internet.” http://bit.ly/13YsiNu Hamadoun Touré of the ITU will keynote and is always worth listening to.
“Look Out Google Fiber, $35-A-Month Gigabit Internet Comes To Vermont” http://bit.ly/10Jewct
The cost to build the network in a mostly rural territory is $3,000 to $5,000 per home. The promise by VTel to pass most of the subsidy to consumers in low prices was surely one reason they were awarded the funds. “I’m moving to Vermont,” was a comment on one of the news stories.
*** ASSIA SMART VECTORING MAKES 100 MBPS DSL PROFITABLE
*** 20 June New York Columbia CITI THE FUTURE OF INTERNET GOVERNANCE AFTER DUBAI:
60 Down, 18 Up As VDSL Comes To France http://bit.ly/19YOYgw
*** ASSIA Smart Vectoring Software allows prequalification of the speed gain and profitability of any copper line’s conversion to vectoringhttp://bit.ly/13ZuRiv (ad)
*** ASSIA enables retention and increase of service provider’s current investment through the performance improvement of all DSLs (newly vectored, as well as existing DSLs) as vectoring is introduced incrementally or en masse,http://bit.ly/13ZuRiv (ad)
*** ASSIA software normalizes high vectoring performance gains regardless of which DSLAM/equipment is selected by a service provider http://bit.ly/13ZuRiv (ad)
Lantiq Sampling 3x3 MIMO For Faster VDSL Gateways http://bit.ly/16HYf0c
Ikanos: Our 192 Port Vector VDSL Chips Are In Customer Tests http://bit.ly/12qPIZ8
*** ASSIA Smart Vectoring deals with the remaining network-trashing noises that vectoring exposes but cannot cancel or address. http://bit.ly/13ZuRiv (ad)
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March 26 Smartphone Wars: $50 In China For Iphone 4 Performance http://bit.ly/16UficY Reply "subscribe" to be added, "un" to be dropped “Daddy, now that you’ve gone to the Moon, when are you going to take me camping…like you promised?” Gene Cernan’s daughter after Apollo 10 returned. Leo Li of Spreadtrum claims the $50 Chinese smartphones using his chips are as fast as the iPhone 4.. He may be slightly exaggerating but by the next spin of Moore's Law $50 will buy you a remarkably capable phone. One result: Africa will soon have more Internet users than the U.S. -------------------
*** Gigabit Australia: April 11 Sydney Australia. Technology choices the next five years
Do sign up. http://bit.ly/TqNFRu or http://www.commsday.com/ Big Vector Deployments Delayed Until 2014 http://bit.ly/15AaYin *** ASSIA is the proud sponsor of DSL Acceleration 2013 Paris La Defense 23-24 April Huawei's Big Vector Win At Swisscom http://bit.ly/XCzNmm *** Building the Optimal NGA Service Portfolio; A crucial new report from Benoît Felten on surviving and thriving with next-generation networks. How to build a portfolio that balances attractiveness (to maximise take-up) and profitability (to optimise payback). http://bit.ly/YT74ui It's priced for professional users at 1000 € but worth every centime if it's your job to plan telco futures. db Galvin Of BT: Britain’s Going Vectored Late 2013 http://bit.ly/ZAGM3w *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world.http://www.lantiq.com (ad) France Telecom And Deutsche Telecom Are Collecting From Googlehttp://bit.ly/11ZcmME *** ASSIA's George Ginis blogs on "The Vectoring Tsunami: More and More Service Providers are riding the next wave of broadband. DSL remains strong. http://bit.ly/XkR2hM The French Secret: Fiber Will Happen Because The Ducts Have Roomhttp://bit.ly/VSwEVM *** JUST TWO WEEKS TO GO: BOOK NOW Gigabit Easy With GPON And 10G PON For Decades http://bit.ly/11ZcFXN *** Broadband Communities Summit 2013 Tuesday, April 16 - Thursday, April 18 Susan Crawford’s Captive Audience: “The Most Important Volume In The Last Few Years [About The] State Of The U.S. Telecommunications Market.” For the record, I signed the White House petition urging Susan’s nomination as FCC Chair.wh.gov/yG4i if you want to do the same.
France in Mali: Two Headline Views Le Monde, the next day. http://bit.ly/VSUC0e Holland: Operation Mali "has no purpose other than the fight against terrorism" The little I know about the insurgents in Mali suggests resisting their takeover is the right policy. But let’s not be naive about geopolitics or the economic component of national interest. From Le Monde, a warning. Let us draw lessons from a decade of lost wars in Afghanistan, in Iraq, in Libya … In Mali, we will fight blindly for lack of clear war objectives. And we will fight alone for lack of a solid Malian counterpart. Their president was ousted last March, their prime minister in December, a divided Malian army has fallen apart; on whom shall we lean? This Isn't the Petition Response You're Looking For
Shawcross went on to deliver a homily about U.S. efforts in space and recommend “pursuing a career in a science, technology, engineering or math-related field.“ As I report continued layoffs in engineering across the western world, I think the D.C. push for more engineers is hypocrisy. Ask any recent science Ph.D about job prospects for her peers and you get a similar story. The problem is lack of support for science and engineering, not lack of young people interested. Corrections
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Comprehensive Solutions Include Software, Professional Services, and Proven Best Practices ASSIA, Inc., a leading solutions company for broadband service providers, today announced the launch of ASSIA Expresse Solutions, a new portfolio of software and professional services fully integrated to empower service providers to grow revenues, increase customer satisfaction, and improve operational efficiencies. ASSIA has crafted a suite of Expresse Solutions designed to enable service providers to build competitive advantage and improve customer loyalty. ASSIA Expresse Solutions are available immediately. To learn more, contact ASSIA sales atsales@assia-inc.com. Reply "subscribe" to be added, "un" to be dropped December 29
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*** Lantiq invites you to meet at CES, Las Vegas, January 8 – 11, 2013.
*** BBC Summit 2013 Tuesday, April 16 - Thursday, April 18
Adtran: Vectored VDSL Is Ready, $200-375/Home http://bit.ly/U4sipz
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Press
November 14
Reply "subscribe" to be added, "un" to be dropped Manhattan: A short walk in Central Park during Sandy was surprisingly pleasant. The winds were high but didn’t knock me down and the rain much less than expected. Verizon and the other wireless carriers have done abysmally; emergency backups have fallen victim to the cuts at telcos around the world. U.S. Q3 Cable Fine, Telcos Morose http://bit.ly/Upu7dT *** ASSIA INTRODUCES THE WORLD’S FIRST COMPREHENSIVE HOME WI-FI MANAGEMENT SERVICE Expresse Wi-Fi Designed to Improve Consumer Wi-Fi Performance by 100 Percent, Helps Users Enjoy the Wireless Experience They Desire http://bit.ly/T3sMxr (ad) Ikanos: Our Vectoring Is Faster Than Their Vectoring http://bit.ly/THAsmN ASSIA: Fixing WiFi Often Fixes “DSL” Problems http://bit.ly/RUh5bE Corrections
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Fiber to Half the Commercial Buildings in Territory No real increase in consumer broadband LTE to 99% in Territory in Three Years LTE Out of Territory to ~91/92%. Vectoring to 75 Megabits for a Few LTE Coverage Doesn’t Mean 5-10 Megabits for All Voice over LTE is Better than Landlines; Data has Capacity Limits. Sum up Reply "subscribe" to be added, "un" to be dropped 9/27/2012
*** Economical Gigabit Broadband Access Using DSL and WiFi.16 Oct Amsterdam Broadband World Forum Leadership Insight by ASSIA CEO John Cioffi. Don't miss it. (ad) *** Mobility Tech Conference and Expo, Oct 3-5, 2012, Austin, Texas
Alcatel Data: Vectored Upstream 20-40 Meg To 500 Meters http://bit.ly/UmbOqF
*** JUST TWO WEEKS TO GO: BOOK NOW
Alcatel Adding "Hundreds" Of Engineers With Russian State Companyhttp://bit.ly/MJJ7Tn
Press
Sept 14
“Ho-Hum” iPhone 5 great, but ... Niek Jan van Damme of Deutsche Telekom is promoting the largest network build in the West in years: 20M lines of vectored DSL. DT calculates they can deliver 70-100 meg down for $300/home, 75-90% less than their figure for fiber home. A DSL Tsunami is sweeping Europe. In France, Jean-Ludovic Silicani is allowing France Telecom to use VDSL rather than fiber home in many communities. In Italy, Fastweb/Swisscom, which has Europe's largest fiber home deployment, is switching. Austria, Belgium and Holland are already moving; Spain and Sweden are rumored. I call it the Cioffi Flip, because John's been an outspoken advocate for years. Stefaan Vanhastel, Paul Spruyt and team at Alcatel have done a remarkable job beating everyone else to market with vector gear. Alcatel has customers actively deploying while others have mostly talk and demos. Stefaan could be the next Basil Alwan, who rode the success of the 7700 routers close to the top of Alcatel. Alcatel has another 8K layoffs in process but still has many great products and researchers. ---------- All men are mortal. Tim Cook is a man. Ergo, Tim Cook is mortal. Tim’s iPhone5 will be great and do extraordinarily well. Apple’s lead over everyone else has to come down to reality. Rolfe Winkler in WSJ is probably early calling “dump Apple shares,” but great people at Google, Samsung, AT&T, France Telecom and even beseiged Nokia will narrow the gap. Bandplan problems mean Verizon LTE iPhones probably won’t work, ever, on AT&T or many other carriers, unlocked or not. I made a lucky guess back in February there would be three incompatible iPhone5's. The problem is now top of the news so I've reprinted those stories at the end. ----- Best of luck to world class optical engineer, Mustafa Abushagu. The former RIT and University of Alabama Professor has taken on a new job, Prime Minister of Libya. The Assembly vote was close, 98-96, implying a country that allows open disagreement settled peaceably. Let's all hope that election, and not the other news from Libya, is what history remembers. His son Ousama Abushagur masterminded a new cell phone network for Libyan rebels that bypasses Gadhafi's state-controlled network, which had jammed dissident communications. (Huntsville Times) Wireless broadband is now working well enough to be nation-changing. ----- Hacked! A scam redirect hit Fastnetnews.com anddslprime.com, probably because one of the non-profits I host didn’t update their software. Thanks to Googe for catching the problem even before I did and Sucuri.net for help fixing it. Stuff happens. *** Amsterdam. October 16th Broadband World Forum 20 Million Vectored DSL Lines For Germany (First Look)http://bit.ly/QOPF5F
$300/home. 100 megabits downstream, “up to 40 upstream” for many. The savings are enormous. $300/home to get to 100 megabits is DT’s figure for upgrading to Advanced DSL. (5-6B euro for 20M.) DT floated a “up to 4,000 euro” estimate to regulators for fiber. The successful field trials of vectored DSL at half a dozen carriers convinced engineers across Europe vectoring would meet the government goal of 100 megabits for most homes. Many others will get close to that, 50-80 megabits, sold as “up to 100 megabits” and enough to satisfy politician’s promises. German competition is hurting DT so they have to upgrade by whatever means necessary. DT/Congstar just lowered the price of the 50 meg + phone service to 35 euros, about $46. (Heise) That’s a third to a half less than AT&T or Verizon for service generally half the speed. DT has 12M DSL lines, just over half of the German DSL market. Vodafone, Telefonica O2 and United Internet each have about 3M. Cable is killing them. I just spoke with Kabel Deutscheland CTO Lorenz Glatz. Kabel D.’s policy is "twice the speed for the same price" and they are building a DOCSIS network to deliver 100-200 megabits 99% of the time. There are 39M homes in Germany, nearly all covered by DSL. About 11M of them are already upgraded to VDSL but without vectoring. About 65% also can get cable, which was only a few years ago upgraded to digital. Since then, cable has been very successful taking customers. Kabel Deutscheland, the largest, grew 19% in the last year to 1.7M internet subs. DT traditionally was run by technically superb engineers who were too proud to adjust to a competitive market. They’ve been replaced by folks from wireless and outside who understand they need to think differently. http://bit.ly/QOPF5F *** New York September 24 Columbia University CITI DSL Tsunami Rolling Over Europe (First Look) http://bit.ly/U79yWR 20M lines at Deutsche Telekom and French approval confirm an almost unbelievably rapid switch. Fiber home across Europe is not the future; 80%, maybe 90% of new lines constructed will be vectored VDSL. Telecom Austria and Belgacom have already begun and their field results are convincing almost every European telco to go with vectored VDSL. $300/line costs (5-6 billion euros for 20 million lines) were determined by DT’s engineers. Top management threw out five years of plans for fiber and brutally won regulatory concessions because they believe full fiber would cost upwards of 40B. In France, France Telecom and Iliad/Free will continue fiber in the major cities but regulator Jean-Ludovic Silicani has accepted vectored VDSL for other areas. KPN has already switched plans and Telia, Telecom Italia, and Telefonica are looking closely. Poland is controlled by France Telecom and most of East Europe by DT, so likely to follow. British Telecom is following closely, trying to cut a deal with competitors and get this through the regulator. The 10+ megabit upstream is also a key selling point. Most of us except heavy downloaders rarely would use 50 megabits or even 20 meg down. But we’ve all been frustrated by the typical 1 meg uploads. The map of Europe’s broadband future has changed remarkably in the last few months.http://bit.ly/U79yWR *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world.http://www.lantiq.com (ad) U.S. Worst Broadband Quarter Ever http://bit.ly/PWT69S AT&T negative, Verizon flat on price increases. U.S. 260K net adds were down nearly a third from the same quarter last year. AT&T lost nearly 100K broadband customers; U-Verse construction is nearly frozen and they are getting clobbered in the areas they haven't upgraded. FiOS fiber home added 134K customers but Verizon's DSL lost 132K. Overall, telcos lost ~70K subscribers according to Leichtman in the table below. Teresa Mastrangelo of Boadband Trends believes the smaller telcos have added enough customers, especially fiber home, that the actual telco total is plus 44k. Since most of these companies are private, they fall out of most estimates. In Canada, DSL did better than cable. Telus, which has mostly upgraded, added 20K DSL customers while Shaw Cable actually went negative. Rogers cable only added 9K. This confirms the data from France and Britain, where upgraded and attractive DSL offers are handily beating cable. Virgin cable in the UK added only 4K customers while BT added 85K. Comcast's $9.95 offer for the poor reached 91K homes total, helping them to 156K, a little up from last year. This month or next, Comcast will reach 100,000 homes in the program, more actual success than all the talk promotions the government is spending hundreds of millions on and should simply end. Verizon raised prices as much as 30% and the other carriers have all been creeping prices up. Company results http://bit.ly/PWT69S *** BBWF October 16 DSL EVOLUTION presentations by senior executives from Telecom Argentina, Belgacom, KPN, Telkom South Africa, TeliaSonera, Magyar Telekom, Telecom Italia, Telecom Austria, British Telecom, Telekomunikacja Polska, Telus, BH Telecom and Telekom Slovenije http://www. Samueli: Another Good Decade For Moore’s Lawhttp://bit.ly/PF0OpY
After that, breakthroughs required. Henry Samueli, latest recipient of the $100,000 Marconi Award, was a DSL pioneer before he and Henry Nicholas went on to build the chips in most cell phones and much more at Broadcom. He echoed what my research had concluded: chip performance rapidly doubling is assured for the next decade or two. After that, it will require some fundamental breakthroughs. “The biggest issue we all worry about is the end of Moore’s Law,” EE Times quotes Samueli. “I think we have a reasonable runway to get below 10 nm and that will carry us another 10-20 years, then someone along the line will need to invent something new and engineers just do that.” Most chip engineers are confident that progress will be made after that although others like economist Dale Jorgenson are more skeptical. For the next decade, the chip engineers are assuring us we can count on regular performance improvements and cost reductions. Story after story in EE Times tell of progress on 22 nanometer, 14 nanometer and even 12 nanometer production gear. That’s several generations beyond today’s chips. Samueli added, “We probably won’t ramp [28 nm products] until the end of next year.” Very few of today’s chips are produced at less than 40 nanometers. Henry Nicholas and Henry Samueli in 1993, working with Pairgain, produced one of the first DSL modems using QAM technology. At the Bellcore “DSL Olympics” in 1993, John Cioffi’s DMT technology significantly outperformed QAM and became the DSL standard. QAM won on the cable side, however. The rest is history. Nicholas and Samueli were always considered a team and would likely have shared the award. Nicholas’ personal problems caught up with him a few years ago and he’s drifted away from the chip world. Color on Nicholas. There’s no doubt the Henrys were full partners in many ways, including the Broadcom-SEC confrontation. John Bingham, Jean-Jacques Werner and Joe Lechleider also made early contributions and rarely get credit. The Super WiFi Summit, Oct. 3-5 For Almost Nothing, Calix Buys Ericsson-Entrispherehttp://bit.ly/Oo8KrH From $290M to immaterial in five years. Carl Russo’s Ericsson deal is an enormous step toward his goals of expanding internationally and accessing the world’s largest telcos as customers. In one swell foop, Calix working with Ericsson as distributor has the potential to sell anywhere. The product line they acquired, the old Entrisphere, brings a state of the art fiber box. They didn’t release the price paid, but in response to a question said it was “not material.” The rumored price Ericsson paid in 2007 was $290M. AT&T was mad as hell at Alcatel, the primary U-Verse supplier. The project was over a year late and $B over budget. They liked the Entrisphere equipment and soon after the deal announced Ericsson as a major U-Verse supplier. Somehow, Alcatel patched things up and they and Adtran remained AT&T’s main suppliers. Adtran stock plummeted on the Ericsson-Calix deal, especially after a mention that the Ericsson-Entrisphere fiber box was deployed at AT&T. AT&T has deployed almost no fiber home, however; I’m guessing it’s being trialed for LTE backhaul. AT&T has announced U-Verse is essentially over, but Randall suggested that might change if the bids don’t come in high enough for the non-U-Verse lines AT&T is trying to sell. To everyone’s surprise, RS said DSL is now coming in “below budget” and is proving competitive with cable. Vectoring is about to double (short-range) DSL speeds and there’s a surge in telcos choosing fiber-backhaul DSL over fiber home. (DT, BT, KPN, Austria, and more.) The states have warned AT&T selling the lines will meet a lot of opposition and they may instead upgrade them with Advanced DSL. Ericsson had invested easily $5B to achieve a strong position in wireline triple play. They bought Tandberg TV, Redback and its switches, and Entrisphere (in 2007), with fiber and DSL offerings. Just over a year ago, Hans Vestberg was very enthusiastic about the Redback switches and hopeful about selling into the landline market. But earlier this year came the word they were abandoning the effort. Vestberg was especially discouraged by low margins. I congratulated him on selling a million lines of fiber in China and he replied I wouldn’t be so celebratory if I knew the price he had to meet. Fiber in China in huge quantities is going for under $100/home, including ONT. That’s the challenge Calix faces going internationally. They’ve earned a good reputation for product and service in the U.S.. Much more at http://bit.ly/Oo8KrH Mobility Tech Conference and Expo, Oct 3-5, 2012, Austin, Texas Google, Reaching 89%, Dodges Discrimination Charge In Kansas City http://bit.ly/PF0SpL Bodies on the street get $10 deposits. Early maps of Google's "fiberhoods" in Kansas City were ugly. Affluent, mostly white areas on the west side (green in the map) were scheduled. Poorer, mostly black, neighborhoods on the east side (yellow) were not likely to be covered. Scott Canon at the Kansas City Star reported “many neighborhoods chiefly the least prosperous pockets of the metro area remain far behind the pace needed to hit the Google-established thresholds of customer penetration.” Google had offered a generous deal for the poor: $25/month for the first year for a gigabit to cover some of the install costs, then nothing for the next six years. Despite that, few of the east side neighborhoods reached minimum signup levels. Google adjusted the levels, reducing them in areas with vacant homes. They did major press outreach, aided by almost every local politician. Most important, they put both paid staff and local volunteers out in the neighborhoods. They went to almost every community group meeting and even went door to door. Initially, as Canon noted, “Even a cursory glance at the map showing which neighborhoods are likely to get Google Fiber more than 80 have met Google’s requirements shows a strong correlation between rich and poor Kansas City.... Places where incomes are lower seem to have little chance of getting Google’s Internet service.” Until the last minute, 30-50% of the city hadn't qualified. Fiber economics are wildly different between areas with high and low take rates, so it’s natural for a provider emphasize the neighborhoods that will buy. There’s no easy solution to the important problem Scott raises. The results are clear that this kind of ‘demand aggregation’ may be a good business model but likely to exclude the poor. Google intervened strongly and saved things. Briefs
Reprint of February article.. Government, except for FCC Commissioner Mignon Clyburn, mostly hasn’t caught on to the competitive issues. I first wrote Divide To Conquer: 3 LTE IPhones Not 1 Model For The World http://bit.ly/xHQZs4 A World iPhone? Fuggedaboutit. There will be separate versions for Asia, Europe & U.S.. Each will work as 3G iPhones while visiting other parts of the world. 3GPP defines 25 different frequency bands to fit the spectrum owned by carriers in different countries, with different bands chosen by each country/carrier. A world iPhone would be a half-inch or more longer than a regional model. For each of 10-15 bands, the phone would require saw filters and other passives. It would be bigger, heavier and a battery hog.Neither Steve Jobs nor Tim Cook would accept that choice. Verizon is using 700 MHz; Deutsche Telekom 800; AT&T 850; Sweden 900; Deutsche Telekom, France Telecom 1800, and TeliaSonera 2600. Much of the spectrum coming to the European market will be around 900 MHz. Japan uses 1500 MHz and 2300 MHz. The U.S. is looking at 1900 and others. Hundred of engineers worldwide are working to reduce the size of the passive components and combine them into efficient modules. Software defined radios are still too large and power hungry. Barring a virtual miracle, no appropriate multi-band technology will be ready for the first iPhone due near the end of 2012. Few expect that to change for years. Apple as usual is mum on the subject. But later article retraction: I’ve learned that AT&T and Verizon are pressuring Apple to hardware lock the LTE iPhone to their networks. It’s therefore incorrect to speak of "an" U.S. iPhone. Most likely, there will be several, each effectively unable to be used on other LTE networks. LTE phones require SAW filters and other RF components for each different frequency band. Based on engineering recommendations, I thought the U.S. LTE iPhone would cover 4 or 5 bands. While it's impractical to cover all 35 LTE bands in a small phone, small cheap components that cover 4 or 5 bands would cover most of U.S. LTE. It's cheaper to have a single model. But I hear - unconfirmed - that the Big 2 want to make it impossible to, for example, use the phone you get from Verizon later on on T-Mobile or Sprint's network. Unbreakable phones are obviously anti-competitive but I doubt JG will do anything about this. Rather than the 3 phones the original article expected, there will be more models locked to carriers by frequency. Reply "subscribe" to be added, "un" to be dropped Volume 12, #8 September 14, 2012 August 16
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Harold Feld asks “They're really up to date in Kansas City. But have they gone as far as they can go?” Not nearly - wait until they turn on the public WiFi from every box. A little more http://bit.ly/Npo47S
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policy Volume 12, #7 August 15, 2012 July 20
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From the BBF and Point-Topic press release, I've included a detailed chart of the data from the top 20 countries athttp://bit.ly/QpaeEd
ITU: "Members Free To Publish Any Documents" - And They Will, I'm Toldhttp://bit.ly/LDeqRx On behalf of everyone at ASSIA, I’m delighted to welcome China Telecom Jiangsu to our growing list of customers worldwide. Volume 12, #6 July 27, 2012 Reply "subscribe" to be added, "un" to be dropped May 16
“Verizon capital expenditures in the first quarter were down more than 18% “ Fran Shammo, CFO Always check actual investment numbers against what their lobbyists claim. *** ASSIA. is proud to announce DSL Expresse 2.7. Powerful multi-tenancy features prepare for vectoring in unbundled environments. Advanced diagnostics and industry-first real-time line optimization allow service providers to slash costs and improve revenue. (ad) http://www.assia-inc.com/news-and-events/press-releases/release/2012-05-08-dsl-express-2-7.php Middle of England: DSL live speeds of 80-120 megabits http://bit.ly/KILd52 Origin Broadband, in Sheffield and Doncaster, is installing their own field cabinets and published actual data from their first installs. Many customers are getting actual speeds of 80+ megabits down and 20+ megabits up, depending on how close they are to the cabinet. Origin's prices range from about $28 for 24 down, 2 up to Origin Max, as fast as they can get you, for less than $60. Install fees are a little high, $85-$120. Neil Hart writes me "It's an initiative part funded by the EU and the city councils in the area. It doesn't rely on BT infrastructure (except the wire to the home) and is entirely independent. We are able to offer all of our customers a service free of any restrictions, limits, caps, contention or fair usage policies. We are a local company set up by local entrepreneurs determined to do things differently to the big players. We can offer speeds of up to (and in some cases over) 100mb." Actual data, from a lightly loaded Origin network: 171 meters 121 down /27 up; 392 m 82/20; 612 m 56/22; 857 m 32/9; 1372 m 22/1.7. As users join the network, the speeds will go down; vectoring will raise them substantially at shorter distances. More data http://bit.ly/KILd52 *** Lantiq launches industry's highest integration ADSL2/2+ system-on-chip for broadband home gateways. Offering the first-in-industry GigE switch and PHY plus WLAN integration on an ADSL SoC, the XWAY ARX300 family scales from cost-optimized to full-featured systems. http://www.lantiq.com/news/press/210-lantiq-adsl-wifi-wlan-gige-soc/ VDSL/Fiber: Tens of Millions of Lines in Germany and Italyhttp://bit.ly/KoQuPQ 50 meg target for 13M homes in Germany, expanding and 30 cities in Italy. 36% of German homes are now served by VDSL, Timotheus Höttges said in the financial call, nearly all of them in the 2/3rds of Germany served by cable. They intend to extend that across most of the footprint served by cable. They hope to bring vectoring out of the labs soon. Höttges promises to invest more, probably offering VDSL at 50 meg or more to most of the cable homes. In Italy, Marco Patuano promises to roll “FTTC” to thirty cities within a year. As usual, he blames the regulator for the delay, which had far more to do with TI reducing capex to support the dividend. Watch France. Although Xavier Niel inspired a national commitment to fiber, he’s now cut back any further extension. His Free Mobile is struggling with extraordinary growth that has produced service problems and there are rumors the install costs are going over budget. France Telecom never wanted to spend the money for fiber and is close to persuading ARCEP to let them use VDSL instead. Original quotes http://bit.ly/KoQuPQ *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad) Ericsson dropping the DSLAM line http://bit.ly/JWc8uX Commsday reports pulling out by end of year. Ericsson has been a leading maker of DSLAMs at least since 1998, selling about $100M/year recently. Their market share has been modest as Alcatel and Huawei fight it out for the lead. Ericsson has told multiple ISPs they are phasing out the product and not seeking customers after the end of this year. Ericsson bought Entrisphere because they were confident they would win much of the 30M line AT&T U-Verse contract from Alcatel. AT&T soon announced Ericsson-Entrisphere as a supplier but ultimately sourced most units from Alcatel. That was a surprise, because Alcatel (and Microsoft) were two years late according to a presentation I have from Alcatel to AT&T. They also went $B over budget, including $hundreds of millions that Alcatel claimed for "changes" and AT&T believed were covered by the initial contract. Ben's new management at Alcatel patched things up somehow. They did sell nearly a million ports in one quarter last year but to do so had to meet extremely aggressive pricing. About a year ago, I congratulated CEO Hans Vestberg on winning a contract in China for VDSL. He replied "If you knew the price we had to offer, you wouldn't be so enthusiastic." At the time, he was confident that the new edge routers from the old Redback division would become a hot product and pull up sales for the wireline division. It hasn't worked out that way. Two years ago, Ericsson and Huawei made opposite decisions. Ericsson is concentrating almost everything on wireless and LTE, where they remain at the very top tier. Huawei is branching out, investing $billions in enterprise routers, smartphones, and the cloud. Inevitably Huawei will far surpass Ericsson in sales but Ericsson expects to be more profitable being less diverse. LTE sales are booming, with AT&T, Vodafone, and now France Telecom building quickly. But Verizon is winding down and AT&T has guided to flat capex. LTE Advanced is a huge advance - 5 and 10 times the speed - but is already designed into most LTE gear shipping. In competitive countries, LTE Advanced will inspire a wave of network upgrades but the network requirements are relatively modest. Sad to see Nokia and Ericsson abandon the DSLAM business. *** DC, Monday 21-22 Freedom to Connect, a can’t miss event for anyone in policy. Vint Cerf, Susan Crawford, Blair Levin, Michael Marcus, Michael Copps, Larry Lessig, Eben Moglen, Cory Doctorow, and a dozen others worth listening to. These are the best of the best in policy; any DC reporter or policy person not attending simply isn’t doing their job. http://freedom-to-connect.net/agenda-2/ (psa) DSLAM shipments up 10% Q4. VDSL + 25% Y/Y http://bit.ly/Kqbrrc Dell’oro finds VDSL now 31% of ports. Steve Nozik of Dell’oro sees a strong trend to VDSL as customers are demanding higher speeds. Years ago, I reported chipmakers expected ADSL to rapidly fade away because VDSL chips were faster for short loops while identical to ADSL for longer loops. It didn’t play out that way; the ADSL mode in VDSL chips had performance problems. Power and space requirements were much greater. VDSL DSLAMs still cost about $20 more per port. Nozik believes that ADSL will still lead in unit sales but VDSL in 2012 will pull ahead in revenue. With DSL coverage well over 90% of the developed world, I believe unit growth will predictably drop. Although China’s 35M ports of fiber this year is a factor, saturation is the primary reason DSL sales will almost certainly be flat to down. DSL gear remains a multi-billion dollar per year market. Dell’Oro shares much of the primary data with me, allowing me to confirm, yet again, they do a superb job gathering the data. http://www.delloro.com/services_access.htm. *** Linley Tech Carrier Conference 2012 June 5 - 6 DoubleTree Hotel, San Jose, CA This two-day, single-track conference will focus on system design for wired and wireless infrastructure including Carrier Ethernet, optical transport, broadband infrastructure, and wireless base stations. The conference is targeted at system designers, network-equipment vendors, OEM/ODMs, carriers/service providers, press, and the financial community. for whom registration is free. http://www.linleygroup.com/events/register.php?num=19 (ad) Wednesday June 6, I'll survey what carriers around the world will build and buy the next five years. Do come. Alcatel: Vectoring in the wild http://bit.ly/J3Qh21 3 customers, 15 trials complete. Alcatel's first to the field with announced deployments at Belgacom and Telecom Austria. Stefaan Vanhastel writes " - we now have 3 customers: Belgacom, Telecom Austria pilot deployment in Korneuburg, + 1 other tier-1 in Europe (not yet public) - we expect more customer announcements in the next 3-6 months - we have 15+ trials completed, and many planned. (trials not only in Europe and NAR, but also in the Middle East, Latin America, and APAC)" In the lab, vectored noise cancellation (John Cioffi's DSM Level III) doubles speeds on short loops. Those results are common but not universal in the trials, with lots of issues everyone is working hard to resolve. Since I first wrote this, I've confirmed KPN will start vectored deployments end of the year. The potential of vectored speeds is a key reason both British Telecom and Deutsche Telekom have changed their plans to nearly all FTTN/VDSL from a more mixed build with more fiber home. Australia's likely next government plans for same. Until large carriers invest in more remote terminals and updating the networks, only a very few lucky customers will get vectored speeds. *** Calix No. 1 U.S. fiber access vendor by 2-to-1 over all other vendors Calix' leadership in U.S. fiber access deployments continues to grow. In its latest survey of U.S. fiber access vendors, Broadband Communities magazine reports that Calix leads all other vendors by more than 2-to-1. Calix has 417 U.S. service provider customers deploying its fiber access systems. The total for all other vendors is 198. http://calix.com/solutions/fiber_access. (ad) It's the Microfilter, Stupidhttp://bit.ly/J70YVd Vectoring’s cool, fiber is fast, customer support and maintenance is boring. But bringing down operating expenses may have more impact on broadband economics than exciting technology. One large European carrier is finding big savings changing the call center scripts to emphasize the most common problem. The ASSIA presentation for their new release (below) identified the microfilter problem, which they are addressing with diagnostics. The flashiest feature in ASSIA’s new DSL Expresse 2.7 is the ability of a field technician to use her iPhone for “real-time line optimization.” While at the customer premise, the tech can adjust the DSLAM parameters for the line and see if it resolves the problem. So can the call center operator. ASSIA’s extending that to Android phones as well. Expresse now can support unbundled VDSL, crucial to several European rollouts, especially of vectoring. British Telecom and Deutsche Telekom, the largest VDSL/FTTN rollouts in Europe, can’t use vectoring until they make it compatible with regulatory policy. Expresse now supports “Multi-tenancy,” allowing each ISP access to their own customer information and support. This is now supported on Alcatel DSLAMs and will soon cover Huawei as well. KPN confirms they will deploy vectoring by the end of the year, as reported by Telecom Paper. They join Telecom Austria, Swisscom and Belgacom in public announcements of vectoring. Vectored DSL will be common in new builds later this year or next. ASSIA’s release added http://bit.ly/J70YVd Irrelevant: Al-Queda’s very capable engineers Kip Hawley, former head of U.S. airport security, writes "Taking your shoes off for security is probably your least favorite part of flying these days. Mine, too. I came into office dead set on allowing people to keep their shoes on during screening. But, contrary to popular belief, it isn't just Richard Reid's failed shoe-bomb attempt in December 2001 that is responsible for the shoe rule. For years, the TSA has received intelligence on the terrorists' footwear-related innovations. Some very capable engineer on the other side is spending a lot of time improving shoe bombs, which can now be completely nonmetallic and concealed in a normal street shoe. There's still no quick way to detect them without an X-ray." http://on.wsj.com/KoZPqH
Watch for a special issue. Meanwhile http://fastnetnews.com/dslprime/42-d/4785-right-question-for-philipp-roesler-qwhat-about-the-other-40-of-germansq http://fastnetnews.com/dslprime/42-d/4784-the-us-position-make-almost-no-changes http://fastnetnews.com/docsisreport/163-c/4772-first-look-comcasts-honorable-3-megabits-for-10-for-the-poor http://fastnetnews.com/policy/177-p/4747-telecom-money-for-astroturf-heartland-money-steve-largent-jim-cicconi-mike-rose - http://fastnetnews.com/dslprime/42-d/4771-deutsche-telekom-renationalized-union-says-yes http://fastnetnews.com/policy/177-p/4775-for-the-record-dave-to-state-department-on-reducing-internet-costs http://fastnetnews.com/dslprime/42-d/4769-cispa and there will also be a piece on why Australia may shift from Fiber home to fiber/DSL for the NBN. Volume 12, #5 May 15, 2012 April 1st selected stories
The Russians are Coming They're taking over the Internet according to FCC Commissioner Rob McDowell. In testimony before Congress, McDowell warns that the Russians, fronted by ITU and supported by the BRICs and Eastern Europeans, want to take over the Internet. "Today, however, several countries ...want to renegotiate to: • Subject cyber security and data privacy to international control; • Allow foreign phone companies to charge fees for ‘international’ Internet traffic, perhaps even on a ‘per-click’ basis for certain Web destinations • Impose unprecedented economic regulations such as mandates for rates, terms and conditions for currently unregulated traffic-swapping agreements known as ‘peering;’ • Establish for the first time ITU dominion over ICANN "These efforts could ultimately partition the Internet while devastating global free trade and rising living standards." http://bit.ly/HKwG7v CEO Frank Esser fired at France's #2 for not dropping prices fast enough CEOs are expected to squeeze every bit of profit, so cutting prices is usually career-limiting. In Paris, that turned upside down with Frank Esser's firing for "not doing enough to anticipate Free Mobile." Xavi turned on France's fourth network and cut prices in half to 20 euro for "unlimited" voice, data, and texts. SFR is hemorrhaging 25,000 customers a week. http://reut.rs/HG3W1t Drastically cutting prices is the only way he could have made a difference. He might have been fired for that, however. Watch What You Say Deep in the Utah desert, the National Security Agency is building the country's biggest spy center. It's the final piece of a secret surveillance network that will intercept and store your phone calls, emails, Google searches ... http://bit.ly/H8NuEy Additionally, “The government will be able to monitor the calls, emails, texts and website visits of everyone in the UK under new legislation set to be announced soon." http://bbc.in/H8Rb0I Gigabit wireless working in Sweden 12 megabit LTE is nothing compared to what's starting to deliver in the field. Ericsson's delivering 900 MHz in Stockholm, the proof is in the video http://bit.ly/HLeBVs (worth clicking to) Speeds will go up to nearly a gigabit and a half when full standard LTE Advanced reaches production in 2-3 years. Using eight small antenna (8x8 MIMO), up to 100 MHz of spectrum and a slew of improved techniques will increase network speeds 1000% over the best current LTE networks in four years or less. While that gigabit is shared, the performance will be awesome. Telcos whose engineers are still struggling to meet demand are strategically thinking "relative surplus" in the near future. Reducing competition is top priority to keep prices up, worth $39B to AT&T. Crime blotter: China Mobile Vice Chairman Zhang Chunjiang has been sentenced to death for taking bribes http://nyti.ms/HLsbb6 Philippine ex-president President Gloria Macapagal-Arroyo and her husband Jose Miguel were allowed to post bail in the $329M ZTE broadband bribe case. http://bit.ly/H80DAJ CEO Randall Stephenson and other AT&T officials face no jail time for $16M of abuse in the Nigerian scam http://on.wsj.com/HGgaHo Deutsche Telekom CEO René Obermann faces no sanctions after apparently perjuring himself before the U.S. Congress http://bit.ly/H359N1 as well as a home search under warrant in Germany. Gigabit fiber for $35/month in Vermont Chattanooga offering $350 gigabit fiber is impressive but Vermont Tel's $35 makes this an "every home" offering. With stimulus funding for much of the construction, VTEL has begun building true gigabit point to point fiber to 22,000 homes for $35. The first local residents are now hooking up. The gigabit equipment costs about the same as 15 megabit fiber gear and the extra bandwidth averages maybe a buck or two a month. So the cost to deliver a gig is actually little different than 15 megabit over fiber. http://bit.ly/HMru09 AT&T - Let them use Satellite Phones March 15th, Kentucky was set to pass a bill to eliminate any phone coverage (except satellite) for thousands of homes. The fix seemed to be in with both parties as the bill went through committee 9-1. Shutting down phone service anywhere cell phones don't work reliably would only pass if the legislature were stupid or corrupt. Maybe burying the move in jargon (Carrier of last resort COLR) was enough that the lawmakers didn't understand what they were voting for. Or maybe the 31 AT&T lobbyists, loaded with cash, AT&T had persuaded them. Complaints to House Speaker Greg Stumbo from families who might lose their phone service put the bill aside. One week later, AT&T introduced a similar bill in Ohio. http://bit.ly/HdrKIc Telcos New Profit Center Police and Surveillance At $2200 for a wiretap and several hundred dollars for a cell phone location, police departments are becoming important and extremely profitable customers. Carriers can charge what they like and are issuing catalogs of "surveillance fees" to actively find customers. Some police departments are ordering dozens of traces each month. Ogden quote It's all on the QT and very hush-hush. As a Nevada police department notes "It is outside the scope of the law." http://nyti.ms/Hfixf2 iPad 4G works on 10% of 4G networks. Apple’s offering refunds to everyone in Australia who bought an iPad 4G because it does not work on any Australian 4G network. They hope to avoid large fines for false advertising. http://wapo.st/HKuA7v Nor does the "LTE iPad" work in Sweden, Arabia, and almost all of Asia and Europe. They built two models, one locked to AT&T's spectrum and one to Verizon's. A few 50 cent parts and fractions of a square inch could allow operating on many more networks. This would have been much cheaper than the extra inventory and operations costs of have more parts. The assumption is they've deliberately crippled the units so the carriers can lock in customers for the life of the device. iPhone problem coming. Telcos New Profit Center Police and Surveillance At $2200 for a wiretap and several hundred dollars for a cell phone location, police departments are becoming important and extremely profitable customers. Carriers can charge what they like and are issuing catalogs of "surveillance fees" to actively find customers. Some police departments are ordering dozens of traces each month. Ogden quote It's all on the QT and very hush-hush. As a Nevada police department notes "It is outside the scope of the law." http://nyti.ms/Hfixf2 Inside Washington: “FCC Chairman does what Jim Cicconi tells him too” Commissioner Jim Cicconi of AT&T has won something like 30 out of 34 major decisions from Jules at the FCC despite being a diehard Republican political operative in a Democratic administration. The only ones he's lost were totally outrageous, like wiping out T-Mo, one of the few competitors left. It isn't just the public interest types who think Jim is so powerful. An FCC Commissioner, unhappy with the Chairman, amazed me one day a while back saying "The FCC Chairman only does what Jim Cicconi tells him to." Verizon "Follow your conscience" Tom Tauke is always one on the world's most effective lobbyists, but doesn't share Cicconi's "by any means necessary" methods. He told a top staffer "If anyone pressures you do something you think is wrong, say no. I'll back you up all the way." Verizon's lobbying team is so good they win almost every time despite not abusing the truth. March 28
“We'll never see the end of bad corporate behavior.” Bruce Schneier. Randall needs to be held personally responsible for AT&T’s $17M Nigerian scam. Vladimir Putin's Russia added over 5M new subscribers in 2011 in an economy booming with high oil prices. China is running at 2.5M/month, adding every six weeks as many as the U.S. adds in a year. These results are only natural if "all men are created equal." I was born in the U.S., not Russia, because my grandfather got out just before WW1. I'm not essentially more able or productive than my remote cousins who stayed in Russia. The income disparities will lessen over time in a global economy and broadband take rates should follow. Women, of course, are more than equal to men.
Russia leads the world with 37% growth http://bit.ly/HePtEj Ukraine 32%, India 24%, China 20%, Brazil 19% 66M new broadband connections in 2011 brought the world total to 597M, up 12% on the year. China added 27M and the U.S. 4M. DSL continues to dominate everywhere except the u.s. and Canada, with 61% of the market while cable has less than 20%. Below the full chart with the largest broadband nations first. Here's the same data sorted by % growth. Russia 37% Ukraine 32% India 24% China 20% Brazil 19% Mexico 10% France 8% Poland 8% Japan 7% Taiwan 7% Germany 7% Netherlands 7% Turkey 6% UK 6% Spain 5% U.S. 5% Canada 5% Korea 4% Australia 4% Italy 3% The vigor of the emerging economies gave us the best growth in five years. China's 27M net adds are almost 40% of the world total. Russia's 5.6M are more than France, Germany, and Britain combined. Add Brazil and India, both 2.6M, and that's well over half the year's 59M net adds. All data from the ever-invaluable Point Topic via the Broadband Forum.http://bit.ly/HePtEj for the full chart *** Calix No. 1 U.S. fiber access vendor by 2-to-1 over all other vendors Calix' leadership in U.S. fiber access deployments continues to grow. In its latest survey of U.S. fiber access vendors, Broadband Communities magazine reports that Calix leads all other vendors by more than 2-to-1. Calix has 417 U.S. service provider customers deploying its fiber access systems. The total for all other vendors is 198. http://calix.com/solutions/fiber_access. (ad) China broadband: 2.5M more in January to 150M http://bit.ly/Hgx7b2 Mobile over 1B subscribers. China continues to add broadband subscribers at a rate of about 30M per year. MIIT puts the January growth at 2.5M to a total of 152.5M. Of those, about 1.5M were DSL. They don't realease fiber counts, but Jeff Heynen of Infonetics is reporting tens of millions of lines of fiber gear are in the pipeline. China has been consistently at 2-3M net adds per month. Two key policy moves are likely to maintain or even increase the growth rate. The government is leaning hard on China Tel and China Unicom to drop prices. They've begun the first major antitrust action against state-owned companies since the beginning of the Communist era. (The government continues to own over 70% of each telco.) China Telecom responded by promising to cut prices in half, but some of that is empty rhetoric. http://bit.ly/xPwPOA As China goes through a government transition, forceful action is on hold. Evidence around the world is that nothing increases customers nearly as effectively as lowering prices. China Mobile jumping into landlines, hard, with an investment in the emerging national cable operator, Marbridge speculates. At the highest levels, government has also been calling for more competition through "convergence" of telcos, broadcasters, and cablecos. The central government continues to make proclamations that would allow the cablecos into data while the political power of the telcos holds them back. A series of maneuvers, some orchestrated by the media regulator SARFT, are consolidating cablecos across the industry into the China Radio and Television Network and allying them with the powerful "media groups." The companies in turn are expressing interest in huge purchases of equipment. If the political problems clear, over 100M cable customers will soon have new, attractively priced broadband choices. 10M new “subscribers” purchased mobile in January to reach 996M. China passed 1B subscribers sometime in February. Like mobile figures everywhere, the totals are distorted by the large number of customers with multiple phones or just multiple SIM cards. More http://bit.ly/Hgx7b2 *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad) U.S. 2011 - Up 3-4M http://bit.ly/GX0WJu AT&T went negative Q4. UBS predicts telco broadband will go negative in 2012, led by a 400K drop at AT&T. With U-Verse and FiOS mostly ended, cablecos are pulling ahead. Net adds overall are so few - about 5% - that the total share has only moved about 2 points despite a huge lead in net adds for cable in 2011. The data below are from Leichtman, who estimates the listed carriers represent 93% of the market. UBS numbers are similar. There aren't that many smaller carriers so I have to determine why the Point-Topic figures are somewhat higher. The gain at Charter makes sense as they've enlarged their buildout after coming out of bankruptcy. Jay Rolls, one of the industry's top engineers, has nearly completed the DOCSIS 3.0 downstream rollout. FiOS is showing strength compared to U-Verse, although not enough to pay back the higher deployment cost. Full company data http://bit.ly/GX0WJu *** ASSIA service provider benefits achieved include: Up to a 60 percent reduction in calls, dispatches, and churn related to physical layer issues Up to a 40 percent increase in speed and service reach Up to $500,000 savings per year in energy costs using the power management module in a 1 million line network without compromising speed and reliability Automatic, high-speed repair and optimization of all network lines http://www.assia-inc.com/ (ad) Telebyte first with VDSL vectoring test equipment http://bit.ly/Hnpiik Looking for objective answers on what works. One leading company claims vectoring delivers almost no gain unless you vector everything in the node. A leading expert says that's hogwash, and most of the benefits can be achieved with a simpler and much less expensive retrofit. The DSL Forum has defined test methods that should provide some answers and Telebyte’s Michael Breneisen is now shipping early units with a 48 line emulator built in. The unit fits in a standard rack. It’s been under development for two years in the high-tech zone of Hauppauge, Long Island, an hour outside New York City. Long Island remains something of a tech hub although the aviation and defense industry cut back years ago. In 2004, a large roomful of engineers were amazed when the notion now called “vectoring” was first proposed and some were skeptical. In 2012, the doubts are gone but the practical how tos need answers. Until we have real world results, no one will be certain of the quality of the emulation or for that matter the practical limits of vectoring itself. Those answers are clearly very close, so much so that I’ve been recommending vectored gear for almost all new builds. Tracespan released a vectored VDSL module for their VDSL Xpert analyzer a few days after I write the above. I've neither the facilities nor the expertise to evaluate the differences, so I'm arranging interviews with some experts who can clarify for me. Meantime, I'm including below the pr from both companies. If you have expertise you're willing to share, presumably far off the record, please email me.http://bit.ly/Hnpiik *** Calix’s 4 new ONTs: cost-effective support for advanced business services The 741GE, 742GE, 743GE, and 744GE ONTs provide cost-effective support for mobile backhaul and advanced business services. Highlights: Industry-standard Ethernet operations, administration, and management (OAM) – for demonstrating conformance with service level agreements (SLAs). A full gigabit of symmetrical bandwidth http://bit.ly/zxbBPf (ad) DSL bonding: Yes for business, no for homes at Sonic.net http://bit.ly/GWaGIE Fewer than one in twenty consumers buy bonded. Dane Jasper brought the price of two lines bonded down from $80 to $70 but consumers just didn't bite. On the other hand, businesses are buying the double line DSL, two unlimited phone line offering. Sonic.net has now simplified their offering. Consumers get "up to 24 meg" DSL and unlimited voice with full features for ~$40. Business get double speeds and two full-featured phone lines for ~$90. Typical download speeds are 5-15 megabits for one line and 10-30 megabits for two. Dane blogged that some customers with long loops were buying the two line service hoping for much higher speeds and were disappointed. There's no magic here. If you only get a few megabits with a single loop, even doubling the speed with bonding doesn't bring you close to 20 megabits. Customers were disappointed and cancelled service. Dane is an unusual CEO; his blog suggested those homes should probably look to his cable competitor. For businesses he's continuing to sell the two line service for $90, including a ZyXel modem. The second phone line makes that offering attractive. More http://bit.ly/GWaGIE briefs
First Look: Sharing: The revolution in spectrum policy http://bit.ly/HlRRuP Shared spectrum, as WiFi has demonstrated, often yields 3-10x the capacity Exclusive use is now obsolete. In a move sure to be watched around the world, the U.S. NTIA is now proposing a new standard of “minimal degradation” rather than “no interference whatever.” Larry Strickling and Doug Sicker deserve enormous credit for understanding the technological change and transforming policy. NTIA discovered that many of the current DOD users of the spectrum could not easily move, even with $18B in cost subsidies. But their needs are extremely limited, often in a tight geography around military bases. One application is “smart bombs”, radio guided munitions which need to be tested and used in training. Rebuilding the U.S. arsenal to use a different frequency than the current precision munitions would be difficult and very expensive; continuing this very limited use in the existing band far more practical. Radio waves don’t actually interfere with each other http://bit.ly/HlEM3x. The problem in the last century was that receivers were inadequate to tell them apart. That’s no longer true, as demonstrated by millions of 2×2 MIMO 802.11n WiFi boxes. The technical community realized this a while back; both the FCC Technical Advisory Committee and the staff of the Broadband Plan were strong on sharing. The political people are now catching on but it isn’t easy. “You have no idea how difficult it was to change the mindset to accept that this is the way forward,” writes one on the inside. Putting more spectrum to use is a good thing, but the payoff is even larger from more efficiently using the spectrum we have. “NTIA also believes that spectrum sharing is a vital component of satisfying the growing demand for access to spectrum and that both federal and non-federal users will need to adopt innovative sharing techniques to accommodate this demand,” is a major breakthrough in policy thinking. http://www.ntia.doc.gov/files/ntia/publications/ntia_1755_1850_mhz_report_march2012.pdf http://bit.ly/HlRRuP *** New York May 15-16 Streaming Media East Real information you can apply immediately in your business Get Hands-On With More Than 50 Over-The-Top Video Devices & Platforms, All In One Room http://bit.ly/xPqgaT (ad) Dan Rayburn delivers a show with a very high signal to noise ratio. RUS Writeoffs: Easily $300M, possibly $3B http://bit.ly/H1gRKn More than just the USF cutbacks. A third of the small telcos will go bust the next few years, one of their advocates claims, unless the USF/ICC cutbacks are reversed. Some very intense lobbying is urging the White House to restore the old subsidies, no matter what the cost. Some waivers are appropriate for the truly brutal high cost areas, but after hours reading submissions I find no doubt doubt the FCC reductions are good government work. The companies simply haven't provided any solid data otherwise. Whatever the details of the USF/ICC program, wireline telephony is a declining business. Many companies have large debt or high operating costs and will fail at any plausible level of subsidy. A decade ago the FCC forecast that loss of long distance revenues and wired lines would bankrupt many of the rurals. Robert Pepper, head of the Office of Policy and Plans, had figures that made clear a day of reckoning was coming. Every landline only company in the world is struggling, including British Telecom (dividend cut), Frontier (dividend cut), Hawaiian Tel (bankruptcy), and Fairpoint (bankruptcy, with a second bankruptcy hard to avoid.) Both Century-Qwest and Windstream have earnings below their dividend payments, propped up by capex far below depreciation and ultimately unsustainable. The smaller rurals are facing the same objective problems but don't report publicly so I can't provide firm numbers. Tweaking the details of USF might postpone but won't prevent wide distress. Some of the coming RUS losses are clear cases of abuse. Sandwich Islands, with $116M in loans approved, has told the FCC they will default unless they get a huge (and totally inappropriate) change in the new FCC CAF/USF regulations. Sandwich Islands is a secretive outfit with close ties to Democratic politicians exposed by the local press. Lobbyist Mike Powell helped them out when he was FCC Chairman. It looks like they spent $100M on running unnecessary fiber between the islands. USF was showering money on them: somewhere north of $25,000 per home passed, although they refuse to provide the figures. (The FCC is considering my FOIA request for the basic data to report this story.) RUS is already liquidating a $200M loan to Open Range gone bad. In the guise of reaching unserved, Open Range got funded for $267M. This was deceptive; in fact, most of their deployment was wireless to mid-sized metros that already had both DSL and cable. It was a mistake to fund it initially, especially because the FCC knew there were highly credible allegations of fraud against the CEO. (I know they were aware because I asked them about it in 2007 or 2008 before the loans was granted. The agency stonewalled me and I'm sorry I didn't push harder. Adelstein since he took office has watched them carefully and shut them down before all the money was disbursed.) A large loss is inevitable. I urge a full forensic audit because the company statements as they hit the skids were misleading. Another large borrower with a few hundred rural high cost homes borrowed extravagantly to run fiber to the home to a suburban area that already has cable. In an official filing, it also projects bankruptcy if its subsidy is cut to "only" $3,000 per year per home - including many homes that are reached by cable without subsidy. Whatever the details of the USF/ICC program, wireline telephony is a declining business. Many companies have large debt or high operating costs and will fail at any plausible level of subsidy. A decade ago the FCC forecast that loss of long distance revenues and wired lines would bankrupt many of the rurals. Robert Pepper, head of the Office of Policy and Plans, had figures that made clear a day of reckoning was coming. Every landline only company in the world is struggling, including British Telecom (dividend cut), Frontier (dividend cut), Hawaiian Tel (bankruptcy), and Fairpoint (bankruptcy, with a second bankruptcy hard to avoid.) Both Century-Qwest and Windstream have earnings below their dividend payments, propped up by capex far below depreciation and ultimately unsustainable. The smaller rurals are facing the same objective problems but don't report publicly so I can't provide firm numbers. Tweaking the details of USF might postpone but won't prevent wide distress. There's no reason to suspect fraud at Big Bend, which I believe also has RUS loans. They've graphically described their likely bankruptcy in another FCC filing. Without doing much research, I've found two more companies, one with an 8 figure RUS loan, that are contemplating bankruptcy. The honorable outfits - I know many in rural telephony - are getting squeezed out because of the far too many abusers. Julius hides the data necessary to estimate accurately, but most estimates are that 1/3rd to 2/3rd of the $4B subsidy would be unnecessary based on the cost of moderately efficient rural operators. I'm a strong supporter of universal service but not blind to the massive overspending in the current system. Low densities and long distances do add costs. There are several million lines that need a modest subsidy to pay their way.But except for half a million lines the excess operating costs are wildly overestimated by nearly everyone in the public discussion. Continuing subsidies higher than the necessary costs of service is simply bad policy. The intent of the FCC based on their recent proposals is to reduce subsidies to a generally more reasonable level but allow exceptions for truly high cost areas that would be otherwise unserved. That seems only common sense, but is totally different than the past two decades of "nearly anything goes." Adelstein needs to review every loan in light of the USF subsidy changes and step in before trouble is uncontrollable. They need an operating team ready to go or operators ready to take over failing telcos just as the banking authorities do for failed banks. They also need a team of forensic accountants. False statements and contradictions from one of the largest likely defaulters suggest it probably was looted and the carcass will be turned over to RUS. D.C. reporters need to ask Jonathan Adelstein what's he's doing to prevent $B in government losses. He's an honorable public servant in a tough spot. The right thing to do is accept the reality and manage the crisis, starting yesterday. ----------------------------- Thoughts on resolving the rural crisis (first draft) Throwing taxpayer money at the problem should be the last measure. First, we need to bring down the high rural costs every other possible way. The most important step is to reduce the often absurd rural backhaul costs. Many small carriers pay $100 and even $200/megabit/month when the going rate is $5-15. That's because there is local monopoly-like pricing. Fixing this was one of the most important recommendations of the broadband plan, which found high backhaul was often the largest contributor to high costs. Speaker after speaker at the Broadband Plan workshops insisted that Genachowski use "special access" rules to reduce the problem. He's failed. Second, most of the smallest companies need to be merged into larger ones. In broadband, the minimum economic size is about 20,000 lines. I don't think voice is very different. It probably costs twice as much per home to serve 2,000 homes as 20,000. Protecting rural service is important; $B's in subsidies to keep 1,000 companies independent isn't wise public spending. Third, unnecessary spending needs to be ruthlessly reduced. For example, a switch can serve 15,000 - 50,000 users, easily. It's ridiculous for every small company to have their own switch (and switch operator.) Time to share. Fourth, small telcos are paying far above the world price because they don't have purchasing volume. Since the government is paying so much of the cost, it should negotiate volume purchasing. This could be direct or through the existing coops. Fifth, we need disclosure of the real costs. The carriers demanding the $B's in subsidies need to open their books. One reason the figures are so high is that all the calculations are done in the dark. Any carrier who refuses to make basic finances public shouldn't be given government money. more to come. Reply "subscribe" to be added, "un" to be dropped Volume 12, #3 February 28 Feb 29
China 20M ports in three months British Telecom DSL clobbering cable http://bit.ly/xkbxbz First Look: Randall is close to shedding 15M-50M AT&T lines http://bit.ly/zccI3a 95% of U.S. getting Verizon LTE by next July bit.ly/zzbnnC Frontier's profitable Unbonded second line for $20 http://bit.ly/xdN9yR Frontier's stock down 40%, Century, Windstream not http://bit.ly/yuYtSd Russia passing U.S. in "fiber" http://bit.ly/zMANEE Puerto Rico, home of the great unserved http://bit.ly/zKkWaR Editorial: Time for Julius and Larry to disclose their stock sales Big Telcos: FCC should fake reaching unserved, give them more money http://bit.ly/A82wbL Pepper: You're needed to save the WISPs http://bit.ly/xjLB2I We who are about to die salute you! http://bit.ly/xmX0D2 (Some rural carriers going bust.) Briefs: Bravo, AT&T. (A headline I’d like to use more often.), Aware, Karl Bode, Martyn Warwick, Junko Yoshida, Le Monde on the death of bookatores, Samantha Bookman on stimulus failures (many coming), Jason Armstrong at Goldman
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Misinformation may be a dirty trick, but it works. Cary Sherman, lobbyist
Tony Melone's team at Verizon deserves laurels for being well ahead of schedule with LTE. They cover 70% of the U.S. now and in a filing said they will reach 294M, 95% of the U.S., by the middle of next year. Darts to Randall Stephenson of AT&T, who hasn’t telephoned yet to apologize for his mistaken 30-40% wireless growth figure. I’ve withdrawn my story http://bit.ly/AwFuyc. CTO John Donovan blogged about 100% growth last year and AT&T confirmed to WSJ the CEOs figure was an error. 30-40% was the increase in usage per smartphone. Add in the increased percentage of smartphones and AT&T is now reporting about 75% total demand growth. 75% is a significant drop from 100% and Donovan’s comments make clear growth will fall towards 40-50% fairly rapidly. Half of mobile data growth is the switch to smartphones, now 57% of AT&T customers. http://bit.ly/yv7J6y --------------- I don't pick stocks. If I did I'd be very, very cautious on any telco - wired or wireless - where competition can intensify. I’d put a Sell on any company that hasn't already seen a big drop in market cap. Although we’re in a trillion dollar business, revenues and earnings in the developed markets will be flat to down for years. ---------------- AT&T has another huge breaking story: somewhere between 15M and 50M lines are likely to be sold. Randall has tasked John Stankey to make a quick decision on whether to upgrade or dump 10-20M “rural” lines, essentially all of AT&T not reached by U-Verse. The whole deal could be called off if someone convinces Stankey upgrading phone lines to compete doesn’t have to be so expensive. Below, a first look. ------- There’s a separate issue coming dedicated to wireless, led by Divide to Conquer: 3 LTE iPhones not 1 model for the world. It will have the details from AT&T’s numbers, why Cisco is confident there’s no serious spectrum crunch for at least five years, and much more. Take a look at http://fastnetnews.com/a-wireless-cloud for the articles if you don’t want to wait for the email. ------ Stories to come: 50-100 meg DOCSIS 3.0 now reaches 80% of U.S. homes. France is showing how “bottoms-up” wireless networks resolve spectrum problems at half the cost. Do send tips and errors to daveb@dslprime.com *** ASSIA. is proud to announce 50 million DSLs under management including 90% of the lines in the U.S.A. http://www.assia-inc.com/ China 20M ports in three months 10M+ fiber while the west looks to cable for high speed. Chinese carriers bought an amazing 20M ports last quarter, Jeff Heynen of Infonetics reports. Ten million or more appear to be fiber, enough to build a network like Verizon FiOS every four or five month. 50-100 megabit cable is the West’s alternative route to high speeds. I’m calculating 77-82% of U.S. homes are now served by DOCSIS 3.0. 50-100 megabits are available to most of the 50% of Germans and Brits who can get cable. Except for British Telecom upgrades to fast DSL (soon 80 meg) are limited in Europe. France Telecom, Telfonica, and now Vivendi have cut dividends, which were based on monopoly prices for landlines and cartels for wireless. Most of European telcos have dangerously low capex do prop up short term cashflow. Vectoring DSL is a no-brainer for new builds, but outside of Asia new builds are few. Can existing lines be vectored efficiently? One expert tells me it’s absolutely doable and AT&T would be an ideal candidate. I’d welcome informed opinion. *** Calix No. 1 U.S. fiber access vendor by 2-to-1 over all other vendors Calix' leadership in U.S. fiber access deployments continues to grow. In its latest survey of U.S. fiber access vendors, Broadband Communities magazine reports that Calix leads all other vendors by more than 2-to-1. Calix has 417 U.S. service provider customers deploying its fiber access systems. The total for all other vendors is 198. http://calix.com/solutions/fiber_access. (ad) British Telecom DSL clobbering cable http://bit.ly/xkbxbz BT added 145K, Virgin cable 15K. British Telecom’s DSL aggressive marketing is essentially beating 50-100 megabit cable, especially in the 30% or so of the country upgraded to FTTN/DSL cabinets at “up to 40 megabits.” Virgin remains financially challenged and isn’t doing nearly as well as the cablecos in the U.S. In the U.S., cable is taking 83% of the net adds, although it will be years before the absolute share moves very far. Virgin covers about 50% of the Britain, including many lines where BT only offers 3-6 meg DSL. In the U.S., Verizon and AT&T are getting clobbered by cable in the one-third of their territory they haven’t upgraded. The effect is much smaller in Britain, and the upgraded (FTTN/DSL) BT is winning customers away from cable despite generally slower speeds. Takeaway: Very few customers will pay much for speeds over 10 megabits, enough for 2 or 3 HD TV signals. In 2012, upgraded DSL/FTTN, which covers 1/3rd of the U.S. and a similar share of England, is doing fine against cable. Company strategy and marketing, not technology, determines who gets the customer. This is confirmed by how well Telus and AT&T U-Verse are doing against cable. More from Britain http://bit.ly/xkbxbz *** New Digital Economics SILICON VALLEY Executive Brainstorm, 27-28 March, San Francisco: Big Data, Cloud, M-Commerce, Digital Entertainment and M2M. Google, AT&T, Fox, Warner Bros, Sony, T-Mobile, Visa and many others: http://bit.ly/xX0HCC. (ad) From STL Partners, one of the most interesting consultants in Europe. First Look: Randall is close to shedding 15M-50M AT&T lines http://bit.ly/zccI3a Stephenson tasked John Stankey to make a quick decision on whether to upgrade or dump 10-25M “rural” lines. That’s essentially all of AT&T not reached by U-Verse. Stankey is “doing a rapid tech evaluation” of whether they can upgrade their DSL + wireless to “a competitive broadband product.” But Randall “doesn’t see a solution.” If that’s confirmed, “we’re looking for others who might want the properties.” Stankey’s competent. Looking at bonded/vectored DSL he may change the company’s plans. Randall’s mantra, however, is “We are a wireless company.” It’s unclear if any of the “rural carriers” – Century, Frontier, Windstream – have the financial ability to make an attractive offer. If operators can’t raise the money, T would need to make a financial transaction. A complicated spinoff retaining the growing parts of the company is one possibility. There’s probably an interesting way to lose pension and deferred tax liabilities if they make that choice. All the big private equity firms are looking at bids. If private equity jumps in, it makes sense for them to bid for the whole wireline operation. T claims operating segment income of $7.3B on revenues of $59.8B. Natural P/E bids would be $40-55B, up there with the RJR Nabisco deal for the largest of all time. More, mostly speculation http://bit.ly/zccI3a *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad) 95% of U.S. getting Verizon LTE by next July bit.ly/zzbnnC (First look) Well ahead of schedule. Verizon confirms “294 million people, or 95 percent of the U.S. population” should be covered by their LTE network by “mid-year 2013, roughly 15 months from now.” The build won’t freeze there, of course, meaning the Obama goal of 98% coverage is almost guaranteed. Verizon since 2009 has been saying they want coverage everywhere and they are now well over 200M homes passed. No one except the engineers believed my reporting U.S. LTE 2016: 96-98% Likely http://bit.ly/AnPV6e but Verizon is already surpassing my projections. *** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http:// www.assia-inc.com/DSL-technology/assia-blog/2010-11-29/go-green-with-ASSIA-power-management.php by Wonjong Rhee (ad) Frontier's profitable Unbonded second line for $20 http://bit.ly/xdN9yR Think one line for downloading teenager, one for adults watching Netflix. Frontier has found a very lucrative niche product: a second DSL line to the same household, without bonding. Bonding of 2 three megabit lines yields six megabit service to the home. Unbonded second lines max out at 3 megabits each, but the TV watchers on one line aren’t affected by the TV downloads on the other line. It costs something like $8/month, all in, to add a new connection to an existing broadband network. So at a price of $20, this is a very profitable. Bonding the two lines is now a routine offering at many carriers but the bonded offering does add a moderate extra complexity to the network. An additional modem type needs to be stocked and the OSS needs to have an additional offering. Today’s DSLAMs are designed to bond easily, but a company like Frontier has many 10 year old obsolete units in the field. more http://bit.ly/xdN9yR *** Calix’s 4 new ONTs: cost-effective support for advanced business services The 741GE, 742GE, 743GE, and 744GE ONTs provide cost-effective support for mobile backhaul and advanced business services. Highlights: Industry-standard Ethernet operations, administration, and management (OAM) – for demonstrating conformance with service level agreements (SLAs). A full gigabit of symmetrical bandwidth http://bit.ly/zxbBPf (ad) Frontier's down 40%, Century, Windstream not http://bit.ly/yuYtSd Stock moves should be similar. Frontier, Century, and Windstream are U.S. mostly landline carriers in very similar businesses. They all have declining landlines, very modest broadband growth, and the problems of a wireline carrier in a world gone wireless. Until recently, their stocks mostly moved in similar directions. Over the last five months, Frontier's stock price has gone down 40% ($4.36) while the other two are flat. Goldman Sachs has now downgraded the stock. Something is wrong in this picture. The blue line in the chart is Frontier, and ordinarily it would be moving similarly to the red and green lines. After I wrote this, the stock spiked 10% when Maggie cut the dividend, but has drifted down since. I am not predicting a further drop in the stock price. It's quite possible the low valuation relative to comparable companies means the stock price is too low. None of these companies have had leadership changes or obvious business changes that offer an easy explanation. The difference, I believe, is the market perception of the stocks, not the underlying businesses. The price move in Frontier is so large it inevitably will have an effect on the company and raise questions about the CEO. The diminished equity cushion could precipitate a ratings downgrade. Employee options are underwater. Maggie herself owns 2.3M shares (Yahoo finance) so has lost about $6M personally. She purchased 50K shares at $5.25 in November, making concrete her belief the company has good prospects. Also purchasing above the current market price were directors Ed Fraioli, Jim Kahan, Jeri Finard, Pamela Reeve and Mark Shapiro. A stock drop that extreme means the board will be reviewing management. Almost all the board members were vetted by Wilderotter and she seems liked on Wall Street, so I don't expect any changes. Wilderotter declined an interview about her future. Financial weakness at the rural carriers means there's no obvious buyer for the 15M line AT&T is imminently deciding whether to dump. That makes a spin-off or other financial transaction more likely. *** Calix’s 4 new ONTs: cost-effective support for advanced business services The 741GE, 742GE, 743GE, and 744GE ONTs provide cost-effective support for mobile backhaul and advanced business services. Highlights: Industry-standard Ethernet operations, administration, and management (OAM) – for demonstrating conformance with service level agreements (SLAs). A full gigabit of symmetrical bandwidth http://bit.ly/zxbBPf (ad) Russia passing U.S. in "fiber" http://bit.ly/zMANEE All in the name. Korea’s #1 in penetration if 100 megabits on copper from fiber to the basement is “fiber.” Japan is #1 if only fiber all the way to the apartment is considered. The U.S. is far behind in either case, with the larger countries of Europe - except Russia - even further behind. Nearly 60% of Korean homes subscribe to one or the other and over 40% of Japanese. So do 27% of Lithuanians. Yes, Lithuania leads Europe. They, the Russians and other Eastern Europeans generally deliver broadband by fiber to the basement and copper to the apartment, Speeds are often 100 megabits; Russia often is near the top in average Internet speeds. "Fiber" in the U.S. only reaches 8% of homes. The vast majority are Verizon, which has essentially stopped building. Russia is at the same level, expanding rapidly. China is only at 4%, although they are expanding at a rate of 10M a quarter. The charts from iDate and the Fiber to the Home Council, are worth a look. http://bit.ly/zMANEE Analysts have almost all agreed that "fiber" described a connection that was fiber to the apartment or building. That could easily deliver 50-100 megabits, even if the last few hundred feet were copper. Cable until widespread DOCSIS 3.0 topped out at 10-20 megabits. Nearly all of us agreed that AT&T's brilliant relabeling of DSL from a field terminal was "fiber to the node" was fundamentally misleading. With DOCSIS 3.0 now proven to deliver 50-100 meg fairly reliably, analysis and policy becomes more difficult. Similarly, as vectored DSL becomes common at 40-80 megabits in several European countries, the line becomes harder to draw. Is fiber necessary? I still think fibering the world a good idea in the long run, but there’s no denying both DSL and cable are getting darn good. Graham Finnie points out Europe can reach 2020 goals drawing heavily on “cable broadband and DSL lines with vectoring.” http://bit.ly/xM9F7j Europe intends to bring 100 Mbit/s to 50%. DOCSIS 3.0 does that fairly well by bonding four 8 MHz channels to share 200 megabits and bonding eight channels is already built into some gear. Since about half of Britain and Germany has DOCSIS already, only a limited number of lines will need upgrading. Vectored and bonded DSL will bring 100 meg only to those very close, but can easily deliver 30 meg - the EU goal for everyone - widely. Fiber has far more headroom. Today’s fiber is routinely a gig down and far faster than anything else on the upstream. corrections: AT&T's wireless growth is only down about a quarter, not half. See above. briefs Bravo, AT&T. (A headline I’d like to use more often.) AT&T named Best Place to Work for Lesbian, Gay, Bisexual and Transgender Employees, with a 100 percent score from the Human Rights Campaign. This is the eighth consecutive year they’ve been honored. Aware was a DSL pioneer before setbacks. I am glad to see they are still in the game and have added TDC Denmark as a customer for their DSL diagnostics. La Poste in France has signed up half a million customers for resold wireless and is expanding into ADSL and quadruple play. Press Karl Bode is disappointed to see ex-representative Rick Boucher preening for AT&T http://bit.ly/ycKHyx The formerly respected Boucher should probably be added to the “don’t feed the troll” list alongside Scott Cleland and others whose telco advocacy not worth reporting. Martyn Warwick’s latest stand-out headline: WiMax: Going the way of the dodo. Junko Yoshida and the EE Times team won 2011 a "Gold" Eddie Award for "The Day the Lights Went Out in Japan," remarkable reporting after the Earthquake. EET will never be the same after the cutbacks, but those remaining are extraordinary reporters. Le Monde’s series “La fin de la librairie” bemoans the struggle of France s many small bookstores in the age of the Internet. Paris seems to have ten times as many bookstores as New York does, to me a wonderful thing. But 40% of the market has switched to buying books from large chains and supermarkets. The Internet has only taken 10% so far, but as $79 Kindles emerge in France that’s sure to increase. Samantha Bookman at Fierce writes Broadband stimulus scandals: Missteps in the buildout, and what's at stake. http://bit.ly/AwFuyc It’s an important story the D.C. reporters should be following. The data is all on the web in the quarterly reports at NTIA and RUS. wall street Jason Armstrong at Goldman “will look to changes in upgrade policies as perhaps the most influential metric in wireless in 2012.” He notes “net handset subsidies on average are 12% of industry service revenues. More problematic is the incremental, where growth in subsidies equaled 20% of the growth in service revenues in 2010, and over 40% in 2011. This reinforces the necessity of pushing down the upgrade rate. For perspective, extending the average upgrade period 10% has an outsized (+12%) impact on subscriber NPV.” Providing a new iPhone after 24 months costs the carrier $400 in subsidies, about $15/month. Apple’s profit is skyrocketing while AT&T struggles. Unfortunately for the carriers, the iPhone software is so much better in most people’s opinion they insist on iPhones. Apple intends to stay on top, so they are constantly improving and inspiring demand for new phones. Free Mobile sells the iPhone but doesn’t subsidize it, keeping prices for service so low people don’t mind. T-Mobile is doing similar experiments. But dropping subsidies customers expect will be hard to sell. policy Puerto Rico, home of the great unserved http://bit.ly/zKkWaR Perhaps 600,000 unserved homes, nearly all cheap to reach. Julius promised that CAF “will bring broadband to more than 600,000 Americans who wouldn’t have it otherwise” by November 2012. That’s about 200,000 homes. Windstream, Frontier and other big telcos are boycotting his program, demanding to be paid without building to the unserved. The obvious answer is “Go south, Jules.” 43% of Puerto Rico can’t get DSL or cable according to the official National Broadband Map, ten times the national rate. It’s a small, densely populated island with an extensive wireline phone network easy to upgrade to DSL. PRTC doesn’t release data, but probably 200,000 of those homes could be offered service within months for less than ~$200 home because they are within reach of an exchange or large remote terminal. Almost certainly, 400,000 of those homes can be reached for under $500/home, generally at 25 megabits or more, using remote terminals like AT&T’s U-Verse. U-Verse, according to AT&T comments to Wall Street, cost $300-400/home and is video grade. If Julius wants to deliver broadband to the unserved without abusing the U.S. treasury, he needs to use the deal-making skills he used to make millions as a lawyer. Slim will ask for more but Julius holds the cards. Slim made firm investment commitments to get approval of the purchase of PRTC from Verizon. I’ve looked at the PRTC network today and it’s almost impossible he lived up to the spirit and letter of the deal. If they had, many of these lines would have been upgraded years ago. A good audit would find where his promised investment (didn’t) go and probably result in major liabilities. Smarter for Slim to take a reasonable deal and connect hundreds of thousands of homes with a generous but not exorbitant subsidy. -------------------- The dark side of this recommendation is that the reason Puerto Rico has such poor coverage is that Slim and Verizon before him treated the island like the Romans treated the Sabine women. That's why it's so crucial the costs be controlled. USF/CAF is about bringing services where they are needed, not a billionaire's entitlement. *** Announcing F2C: Freedom to Connect 2012! DC/Maryland May 21-22 Confirmed keynote speakers include Vint Cerf, Michael Copps, Cory Doctorow (probably via telecon), Rebecca MacKinnon, Eben Moglen, Mike Marcus and Aaron Swartz. http://freedom-to-connect.net/ (ad) This is David Isenberg's event and loaded with interesting people. Register now for a great rate from $295. http://f2c.eventbrite.com/ Editorial: Time for Julius and Larry to disclose their stock sales Julius Genachowski at the FCC and Larry Strickling at NTIA can strike a symbolic blow for open government by quickly publicly disclosing their stock trading even before the bill goes through requiring them to do so. Both are multimillionaires who had extensive holdings when they took office. Both strike me as people who would not take advantage of their insider knowledge so have nothing to fear from disclosure. Both can earn respect and show leadership. The Senate passed a billing forbidding insider trading by legislators and included a provision by Richard Shelby that senior federal employees also disclose their stock sales. Robert Pear (NYT) expects the House to go along and the President to sign. This should have been become law long ago. Don’t wait for the bill to pass. Just do it. *** New York May 15-16 Streaming Media East Real information you can apply immediately in your business Get Hands-On With More Than 50 Over-The-Top Video Devices & Platforms, All In One Room http://bit.ly/xPqgaT (ad) Dan Rayburn delivers a show with a very high signal to noise ratio. First looks in policy The big telcos, led this time by Windstream and Frontier, are trying to blackmail the FCC into diverting the CAF money meant to reach the unserved. Meanwhile, hundreds of the existing small companies face bankruptcy because the USF subsidies are being brought under (limited) control. They are losing lines and revenue. Some should be protected where a subsidy really is needed because of high rural costs. Others should be allowed to die because they’ve taken advantage of the system. RUS needs to turn around and protect the taxpayer from losses. FCC and the states need to ensure service continues even if bankruptcy occurs. Big Telcos: FCC should fake reaching unserved, give them more money http://bit.ly/A82wbL Julius doesn’t want to welch on his promise of reaching the unserved but may not even realize what’s being proposed in his name. Carol Mattey at the FCC is listening closely to the big telcos demanding that the CAF funding should go to areas already served rather than fulfill his promise to reach 600,000 unserved Americans by November 2012 and millions more in the next few years. The telcos want to do that by arbitrarily reclassifying areas marked served on the broadband map. Instead of fixing the broadband map, they want to use their own judgment of which “contain locations that are not able to receive adequate fixed wireless service.” Find a few – of which there always are some in wireless networks in ordinary terrain – and then Century, Frontier and Windstream want massive federal subsidies to overbuild the whole area. There’s absolutely no reason to change the CAF rules suddenly to throw money at these companies. Each has plenty of truly unserved lines to keep them busy and use the CAF money for the next few years. The obvious move is to ask the companies to work with NTIA to make sure the map is accurate before making any changes in the rules. In addition, I’ve looked at the cost estimates of these carriers and they are totally out of line. DSL gear costs $50-250 and even with small units and field installs the strong majority of the unserved can be reached for far less than the thousands demanded by these carriers. It looks like they use the costs for the last 1/2 of 1%, which everyone agrees will be reached by satellite. Then they are demanding that amount for lines that are far less expensive to serve. more, including a reporter who may need to issue a correction http://bit.ly/A82wbL Pepper: You're needed to save the WISPs http://bit.ly/xjLB2I Robert Pepper at the FCC was the key supporter of local wireless providers who have now gone on to serve a million rural Americans. Now, the same phone companies that refused to serve many of these homes want to pervert CAF broadband funding to overbuild already served areas. You’re the right man to protect the network you built. A few phone calls to Sharon, Carol, and maybe Jules may be all it takes to keep them on the right path. You’re out of the agency for seven years now but still are enormously respected. Julius promised the money would go to reach 200K of the 4-7M unconnected American homes. ... Remind them to hold firm. more http://bit.ly/xjLB2I We who are about to die salute you! http://bit.ly/xmX0D2 Big Bend Telephone, serving 200 miles of the Texas border region, joined the many carriers telling the FCC they’ll go bust unless the USF/CAF rules are changed. They can’t survive on a subsidy capped at $3,000/line/year and will imminently default on their loans. This spells big trouble for their lenders, of course. Big Bend warns that telephone and Internet connections to 200 miles of U.S. border posts will disappear if they default on their loans, as well as connections to all local hospitals and schools. That’s unlikely. The creditors will recover more by selling the assets in place to a new operator; the existing management will likely do better in a Chapter 11 than in a forced liquidation. Either would keep service running. Big Bend has a politically connected DC law firm trying to get them a larger subsidy. That might be right if the costs to serve the territory really are so off the wall. It's a mistake to the extent the high costs are inefficiency or past high spending. It's particularly difficult when the high costs are mostly due to the small size of the company. Anything under 10-20,000 lines is wildly inefficient, but there's no obvious way for the regulator to require larger companies to serve these customers. That may need changing. more, but not answers http://bit.ly/xmX0D2 FCC giveaway watch Part I Verizon is looking for a loophole in their Alltel merger agreement to get them more money than deserved under the new USF rules. General counsel Austin Schlick brought a team of five to negotiate with them. Verizon says the new rules are ambiguous and suggests an interpretation that gives them $millions. If that’s not the right way to interpret them, they want the rules changed to match their expectation. The obvious thing for Schlick to do is to clarify the rules to make sure Verizon doesn’t get a windfall instead. http://apps.fcc.gov/ecfs/document/view?id=7021753215 From our advertisers ASSIA Achieves a Broadband Industry Milestone, Exceeding 50 Million DSLs Under Management ASSIA Now Commands Management of More Than 90 Percent of DSLs in the United States and Continues to Grow Worldwide as Its Platform-Agnostic Solutions Help Service Providers Keep Up With Broadband Demand REDWOOD CITY, CA ASSIA, Inc., the leading provider of high-performance software tools for dynamic spectrum management (DSM) of digital subscriber line (DSL) networks, today announced that it has surpassed 50 million DSLs under management globally. This achievement comes as more and more DSL service providers recognize the value of ASSIA's unique solution and marks the first time a DSL solutions provider has reached such critical mass. With the increase, ASSIA today manages more than 90 percent of the DSLs in the U.S., according to research firm Point Topic. ASSIA DSL Expresse remains the only DSL management system globally acknowledged for digital subscriber line access multiplexer (DSLAM) "vendor neutrality," enabling service providers to manage their heterogeneous DSL equipment effectively. This, together with the comprehensive management capabilities of ASSIA DSL Expresse, has led major service providers around the world to entrust DSL management to ASSIA. ASSIA DSL Expresse enables service providers to maximize delivered bandwidth, improve quality of service, reduce operating expenses, and improve customer service, while leveraging existing networks for delivery of a new generation of multimedia content, including high-bandwidth IPTV and video services. "ASSIA is taking over the DSL world," said Peter White of London-based Rethink Research. "The company's growth comes by way of its innovation and original research, in addition to its technology. ASSIA CEO John Cioffi, who pioneered the original DSL market, has more recently pioneered DSL management techniques to remove crosstalk from copper lines, making possible the next generation of 100Mbps DSL." http://www.assia-inc.com/ Calix Expands Fiber Access Leadership in 2011 Kicks off 2012 with introduction of new innovations to the industry's premier fiber access portfolio PETALUMA, CACalix, Inc. (NYSE: CALX) today announced continued momentum in the fiber access market with another record-breaking year in 2011, and introduced two new optical line terminal (OLT) cards to its Unified Access portfolio. More than 70 percent of Calix's over 1000 customers globally are now deploying fiber access services across the B-Series, C-Series, and E-Series platforms and nodes and industry-leading portfolio of optical network terminals (ONTs). With the addition of the GPON-8x line card to the E7-20 multi-terabit Ethernet Service Access Platform (ESAP) and the B6-318 point-to-point gigabit Ethernet (GE) line card to the B6 Ethernet Service Access Nodes (ESANs), Calix customers now have powerful new gigabit passive optical network (GPON) and point-to-point GE solutions available to help them to transform their networks, their service offerings, and their business models. The North American fiber access leader in OLT port shipments for the last eight quarters (Infonetics Research), Calix was recently identified in the Infonetics Research report "Next Gen FTTH and PON Deployment Strategies: Global Service Provider Survey" as one of the top three FTTH vendors globally by 67 percent of the respondents. Reply "subscribe" to be added, "un" to be dropped Volume 12, #2 February 2012 January 2012
AT&T's Randall & Stankey: Wireless data growth half the FCC prediction http://bit.ly/yyGsTG 40%, not 92%-120% Free Mobile: Paris cloud, Bottoms-Up design, LCHV profit http://bit.ly/xqfQrw Xavier Neil's 20 euro ($27) unlimited voice, data, and SMS deal is drawing a million customers a week to Free Mobile. HD Voice Live in Germany, France and coming to Comcast http://bit.ly/wBgG6V Gateways without HD and MIMO already obsolete. Arcadyan: Emerging Asian Gateway Giant http://bit.ly/xiF8PA Millions sold to Deutsche Telekom. Everyone on Earth Connected by 2018: The 550 Challenge http://bit.ly/wuo6Hl Phone or net, wired or wireless. Alcatel's Vanhastel: Strong Sales, Soon for Vectoring http://bit.ly/Am7gOq 70-100 megabits 400-500 meters. China Telecom promises 35% price drop, (no - see correction) http://bit.ly/xPwPOA Tens of million fiber lines Aware's DSL Patents for Sale http://bit.ly/y6iBMw Brussels, October 3: Big European Operators Asking for Bit Tax http://bit.ly/yUPpSS Found: $Millions in saving from universal service. (?satire) http://bit.ly/wsCs78 Multi-Billion ICC Windfall for Big Telcos http://bit.ly/yZ6s32 A huge story so far unreported. Briefs: Japan fiber may not be profitable, Botswana, Stefano Galli of ASSIA, Italy saw an actual drop in broadband landlines, ZCorum, Jeremy Owens, Julia Angwin, John Eggerton, Brendan Sasso on nothing doing at the FCC, Craig Moffett, Brett Feldman, Doug Mitchelson, Jonathan Epstein of Deutsche Bank, Randall Stephenson, Vanessa Hessler, Ariel Masilos and Dror Salee, VP, are among those gaining as Anobit is purchased by Apple. They were GPON chip pioneers at Passave, now part of PMC-Sierra, before they became Reply "subscribe" to be added, "un" to be dropped “You have to make decisions knowing you never can satisfy everyone. Otherwise, you don’t get anything done.” Matthias Kurth, German regulator, who is bringing LTE to some of Germany's smallest towns Randall Stephenson of AT&T dropped a bombshell: mobile traffic growth is down by more than half. The spectrum crisis has abated although we still need smart policies. Even bigger news comes from Paris. Xavier Neil's 20 euro ($27) unlimited voice, data, and SMS deal is drawing a million customers a week to Free Mobile. He's changing the mobile world by selling at half the price of any major operator in the U.S., France, or Canada. Paris is proving giving all the spectrum to big incumbents is the worst way to go. Technology has moved beyond monopolies. Free can be cheaper because they have a more efficient network built on WiFi, femtos, and small cells. Sharing spectrum is 300% to 1,000% more efficient and is the way to get capacity. Towers will carry only a fraction of the traffic and with MIMO will have soon have far more capacity as well. DSL has excitement as well. Now shipping vectored noise reduction nearly doubles speeds on short loops, to 50 and 100 megabits. FTTN/DSL builds are now considering when, not if, to make vectored gear standard in new builds. Alcatel is first to market with equipment with many to follow. The excitement obscures that the majority of phone lines are too long for vectoring to have much or any effect. Britain is building a new network with shorts loops and Germany had intended to, good opportunities for vectoring. But even short loops among the existing 300M DSL lines won't benefit unless the existing gear is replaced and that may never happen. Great engineering advances may not reach many homes. Millions of customers - and telco profits - will soon benefit from MIMO WiFi fast enough for HD Video around the home. 4x4 MIMO is shipping from Quantenna and 3x3 from several. Swisscom, Deutsche Telekom, and everyone in France are shipping new gateways and often distributing HD video with wiring the house. Anything less than 3x3 MIMO and HD Voice is already obsolete. Just watch what Free is doing in France, Deutsche Telekom and soon Comcast. This issue is for the 17,000 losing their jobs at Nokia Siemens. *** 4G Wireless Evolution , Feb 1-3 in Miami, Fla., focuses on how to monetize the Mobile Internet. Sessions will address network strategies, service roll outs, 4G spectrum issues, integration of all services onto single network, regulatory issues and more. http://bit.ly/zDtVjW (ad) Another remarkable event from Carl and Scott AT&T's Randall & Stankey: Wireless data growth half the FCC prediction http://bit.ly/yyGsTG 40%, not 92%-120% “Data consumption right now is growing 40% a year,” John Stankey of AT&T told investors http://bit.ly/xn79YL. and his CEO Randall Stephenson confirmed on the investor call bit.ly/zfFHAV That’s far less than the 92% predicted by Cisco’s VNI model or the FCC’s 120% to 2012 and 90% to 2013 figure in the “spectrum crunch” analysis. http://fcc.us/xxXw2h. AT&T is easily a third of the U.S. mobile Internet and growing market share; there’s no reason to think the result will be very different when we have data from others. With growth rates less than half of the predictions, a data-driven FCC and Congress has no reason to rush to bad policy. Wireless technology is rapidly moving to sharing spectrum, whether in-building small cells, WiFi, White Spaces, Shared RAN or tools of what the engineers are calling hetnets - heterogenous networks. The last thing policymakers should do is tie up more spectrum for exclusive use; shared spectrum often yields three to ten times as much capacity. Bad compromises on the video spectrum are unnecessary because plenty of spectrum is unused. That includes the 20 MHz that M2Z would be building out today if Julius hadn’t blocked them; the 20 MHz the cable companies are sitting on and want to sell to Verizon; and the 30 MHz or so Stankey identifies as fallow at AT&T. http://bit.ly/xn79YL 40% growth is still substantial, but wireless technology is improving at a breathtaking pace. LTE has about 10x the capacity of 2.5G and 4x the capacity of 3G. LTE Advanced, deploying beginning 2013 at Verizon, is designed for 10x the capacity of LTE. Putting more spectrum to use would be great, but let’s do it right. Wireless speeds are actually going up dramatically, with AT&T delivering 2-5 megabits to most of the country and Verizon’s LTE delivering 5-12 megabits to 2/3rds of the population. Verizon is ahead of schedule to bring 5 megabits+ to 92% of the country in 2013 and 96-98% in 2015-2016. AT&T and Sprint have raised capex to catch up. 80%+ of the U.S. will have a 5 megabit offering in 2013-2014, 90%+ by 2015 or sooner. That’s without any additional spectrum. Today’s wireless networks are designed to be shared: towers, WiFi, White Spaces, DAS and small cells all working together. The best engineers in the world are working on RAN sharing, SON, hetnets, 8x8 MIMO and techniques I’m writing about in my next book, Gigabit Wireless. AT&T in fact is one of the world leaders in DAS, WiFi and femtos and behind the scenes a key thought leader. There’s wonderfully exciting stuff I’ll be doing my best to translate for non-engineers. Takeaway: The future is sharing the airwaves so let’s get the policy right. *** Calix No. 1 U.S. fiber access vendor by 2-to-1 over all other vendors Calix' leadership in U.S. fiber access deployments continues to grow. In its latest survey of U.S. fiber access vendors, Broadband Communities magazine reports that Calix leads all other vendors by more than 2-to-1. Calix has 417 U.S. service provider customers deploying its fiber access systems. The total for all other vendors is 198. http://calix.com/solutions/fiber_access. (ad) Free Mobile: Paris cloud, Bottoms-Up design, LCHV profit http://bit.ly/xqfQrw Xavier Neil's 20 euro ($27) unlimited voice, data, and SMS deal is drawing a million customers a week to Free Mobile. He's changing the mobile world by selling at half the price of any major operator in the U.S., France, or Canada. It's not a gimmick. Xavi understands that wireless costs per minute go down dramatically with volume. Free's low cost, high volume model will net half a billion a year if he runs it well. High cost, low volume carriers like Stephane Richard's France Telecom can bluster but that won't be enough. Brian Williamson of Plum Consulting has a good look at wireless costs that suggests Free Mobile will do very well. Every honest official is thinking how to copy France. Every operator in the world is scared they will succeed. Every investment analyst is trying to decide which carriers are vulnerable and need to be downgraded. Xavi's trump card is that his "Bottoms-up" network design is years ahead of almost everyone else. He has 5M WiFi and femtocells to serve his mobile customers. Paris is now a Free WiFi cloud. Jennie, I and iPad had a wonderful two weeks in Paris in September. We rented an apartment in the Marais with Free DSL that came with WiFi. Everywhere we went, including Chartres, we could log on to Free WiFi, WiFi and femtos aren't "tower offload" in the Free network design but are the primary connection. Less than half the traffic will ultimately go to the towers, saving both construction and spectrum. Everyone including AT&T and China Mobile has been talking for several years about building networks "Bottoms-up." Xavi revolutionized the Internet once with the 20 euro triple play. He is about to do it again to mobile. *** New Digital Economics Silicon Valley Executive Brainstorm, 27-28 March, San Francisco: Big Data, Cloud, M-Commerce, Digital Entertainment and M2M. Senior execs from Google, Amex, Fox, Warner Bros, Sony, AT&T, T-Mobile, Mastercard and many others: http://bit.ly/SV2012 (ad) These are the Telco 2.0 group from London, some of the most creative analysts anywhere. HD Voice Live in Germany, France and coming to Comcast http://bit.ly/wBgG6V Gateways without HD and MIMO already obsolete. Jeff Lewis of Comcast speaks on HD voice in Amsterdam February 14th. I don’t think he’s ready to announce HD voice for millions of homes but his CTO Tony Werner has told me HD is on the way at Comcast. http://bit.ly/xjT2D4 Ulrich Grote of Deutsche Telekom, also there, is shipping millions of HD gateways. Also speaking will be Philippe Calvet and Alain Orsot of France Telecom which has already launched HD on mobile in a dozen countries. They aren’t going to the DECT Conference as an excuse to gaze at Rembrandts or enjoy the special pleasures of Amsterdam cafes. HD is a major product, sweeping Western Europe. Verizon Wireless and several cable companies in the U.S. are only 6-18 months away. HD with today’s codecs sounds dramatically better than regular telco voice, although most people are so used to mediocre sound they have to hear both side by side. People aren’t running to pay more, but it’s a clear advantage most competitors will need to meet. My friends at Lantiq sent me one of DT’s new Speedport W 921V gateways, the kind of device that’s rapidly becoming standard. Besides the HD voice, DT has included “300 megabit” WiFi, 802.11n with 3x3 MIMO. That’s fast enough that DT, following the lead of Swisscom, is sending HD TV around the home wirelessly for many customers. AT&T and Verizon are planning wireless HD homes in the near future. It’s perhaps $3 more expensive to add HD to your gateway. The new phones - CAT-IQ, the upgraded DECT home wireless standard - remain few but that will change rapidly. On wireless and cable, better HD codecs add almost nothing to the cost while better microphones/speakers are inexpensive. The new version of the LTE standard, 3GPP Release 12, includes HD codecs with even greater range. *** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad) Arcadyan: Emerging Asian Gateway Giant http://bit.ly/xiF8PA Millions sold to Deutsche Telekom. Invisible to me and most others in the West, Arcadyan has been selling 10's of millions of units under some of the most prominent brand names. They are now opening offices around the world and seeking direct sales. I sought them out at BBWF because the Deutsche Telekom box is one of the most advanced gateways in the world in volume production. 3x3 MIMO WiFi, HD Voice, USB for home storage server and many other features that carriers around the world will soon make standard. The volume of products in their booth surprised me, including all flavors of WiFi, femtocells, and set top boxes. They have a strong engineering team and have developed their own software stack for gateways. The Microsoft Mediaroom set top drew the attention of a North American carrier at the show. Mediaroom is doing amazingly well, actually beating cable even over FTTN/DSL. The costs are high, however, especially the license and the set top. Until recently, only Motorola and Scientific Atlanta/Cisco were certified by Microsoft. AT&T wanted a broader choice of suppliers, so Pace/2Wire and Tatung are well along on the path to certification. Arcadyan recently purchased a controlling interest in the division of Tatung that makes that set top. While CEO Hong-Yuh Lee didn't discuss pricing with me, their natural strategy as a new entrant will be to offer low prices to win a share of the market. Arcadyan has roots in Europe at Philips Electronics. In 2003 a Philips division joined with Accton to form Arcadyan. A controlling interest was sold to Compal in 2006. The Compal Group is one of the largest computer makers in the world. You may well own a Compal computer, although the name on the unit is Dell or Hewlett-Packard. I’m watching Xiaomi and Meizu, two Chinese smartphone makers ready to expand internationally. Both offer slick Android phones ready for 4.0 Ice Cream Sandwich. Xiaomi http://www.xiaomi.com/ provides strong support to the easily upgradable Miui Android ROM http://en.miui.com/ Meizu’s http://en.meizu.com/ MX phone may not lie up to the ad claim of “beyond extraordinary” but has features comparable to the best. Everyone on Earth Connected by 2018: The 550 Challenge http://bit.ly/wuo6Hl Phone or net, wired or wireless. Kicking off Friday Feb 3 in DC, the 550 Challenge has a goal of connecting all 7.5B people by 2018, the 550th anniversary of the death of Gutenberg. While that seems ambitious, both China and India are approaching 1B connections. A revolution is sweeping Africa, with countries like Nigeria almost 70% connected. "The challenge of connecting everyone on earth to the Internet requires overcoming a long list of issues already engaging public and private sector initiatives. While there is no shortage of obstacles, it is not impossible." The Friday event oti.newamerica.net/events/2012/550_challenge. I'm honored to be one of the initial signers, alongside Vint Cerf and many others. *** ASSIA service provider benefits achieved include: Up to a 60 percent reduction in calls, dispatches, and churn related to physical layer issues Up to a 40 percent increase in speed and service reach Up to $500,000 savings per year in energy costs using the power management module in a 1 million line network without compromising speed and reliability Automatic, high-speed repair and optimization of all network lines http://www.assia-inc.com/ (ad) China Telecom promises 35% price drop, (no - see correction) http://bit.ly/xPwPOA Tens of million fiber lines Correction 12/15 China Telecom promised a 35% increase in speed without raising prices, not a drop in price. Since speeds go up almost everywhere over time, this is a symbolic gesture, not a significant price drop. But it's mostly pr, it turns out. I.F. Stone taught a generation of journalists “Governments lie.” Forgetting that lesson, I reported that state-owned China Telecom would cut broadband prices 35% over 5 years to settle an antitrust issue. That was the headline from China, but reading the documents more closely I discovered I was wrong. China Telecom merely promised to increase speeds without a price hike, something almost every carrier in the world is doing without government intervention. Bandwidth isn’t free but it’s cheap and becoming cheaper. The cost of broadband is the wire and connection, not the bits. So the natural behavior, even of monopolies, is to allow you more bits, faster. Here' my original article Facing $100’s of millions in antitrust fines. Monopoly fighter Li Qing of NDRC November 9 promised broadband prices would come down 38% if China Telecom and China Unicom/Netcom faced more competition. This was historic; Government agency NDRC had never before taken on major state owned companies The telcos have decided not to fight and offered intense self-criticism. Xinhua reports “China Unicom said that it found improper price charges from Internet service providers … [and] has submitted a plan to correct its practices to the NDRC. … China Telecom also said in an online statement that it found improper charges.” They probably will accept a fine at a level insignificant for companies with annual sales of $60B. China Telecom controls most of the southern two thirds of the nation and China Unicom/Netcom most of the northern third. China has 150M broadband subscribers and adds 30M or more per year. That’s 50M more than the U.S. and as many as the combined total of Japan, Germany, France, Britain, South Korea, Brazil and Italy, the next seven broadband leaders. Fiber home is now the standard for new buildings and the two companies are upgrading 10’s of millions more to fiber every year now. That’s a remarkable achievement for a country where even the most developed areas have family incomes less than half the U.S. or Western Europe. The press speculates that SARFT and China Mobile, working with selected academics, inspired the NDRC plan. Government at the Politburo level remains unsatisfied with broadband pricing, speeds, and growth. National policy is “convergence” on “tripleplay.” Cable competition led by SARFT would be the broadband driver while telcos would create television competition in turn. Cable could go from very few modems to 50M in a few years if unleashed. China Mobile has a broadband subsidiary, China Railcom/Tietong, which is a potential third player. SARFT just banned advertisements during prime time TV dramas, a very popular move that should give them some political leverage. If the 35% price cut comes through, Li Qing joins the short list of regulators who have made a difference. (Thanks to Xinhua, Caixin, and People’s Daily/Global Time for reporting.) *** ASSIA DSL Expresse 2.5 Helps Maximize Bandwidth and Quality of Service, Reduce Costs, and Prepare for 100 Mbps Service Offers service providers the first mobile application for DSL network management and tools to plan conversions from ADSL to high-bandwidth VDSL. http://bit.ly/zxFeEd (ad) Alcatel's Vanhastel: Strong Sales, Soon for Vectoring http://bit.ly/Am7gOq 70-100 megabits 400-500 meters. Prototypes are in production at Belgacom. They are seeing 30-70% performance improvement, occasionally more, albeit only on short loops. Stefaan Vanhastel tells me Alcatel intends to price their vectored equipment low enough to ensure substantial sales in 2012. Telecom Austria is the first to announce they are deploying. The consensus is that volume sales of vectored DSL will be delayed until 2013-2014, when several vendors are in the market. Big telcos are notoriously slow to make decisions. Vanhastel intends to do better than that. Lantiq - advertiser release below - also believes 2012 is the time for new deployments to go vectored, even if it will require a software update down the road. Vanhastel tells me that generally field results are 100 megabits about 400 meters and 70-90 megabits at 500 meters. That’s not quite double what most lines are getting without vectoring. Vectored noise cancellation is particularly effective at short distances and falls off rapidly after that, yielding more like a 30% improvement at 1,000 meters and even less at 1,500 meters. Deutsche Telekom and British Telecom are deploying something like 10M lines of FTTN/DSL from neighborhood terminals that will bring many - perhaps half - of the homes involved to distances that can benefit from the vectoring. It’s natural for builds like that to use vectored gear for all new installations. Alcatel’s not revealing costs, but for new gear the difference should be well under $50/line, a dollar per subscriber month for much higher speeds. Alcatel addresses the crucial problem of working well with existing deployments in several ways. For example, AT&T U-Verse has already deployed around 30M of the 31M lines Ralph de la Vega says are in the plan. While those lines could be connected to new vectored line cards, there's no indication AT&T or any other deployed networks will undergo a major system overhaul. Even worse, “unvectored” lines in the same binder with “vectored” lines can cause serious interference and reduces the effectiveness of vectoring. How well the existing lines integrate with the newly vectored lines will be a key differentiator of the new systems. As results come from the field I'll be watching closely. Vectoring minimizes cross talk, the most important source of noise on loops under 1,000 meters. A side effect is that other disturbers, such as impulse noise, now become more important than they had been. Today, these generally minor noise sources are often drowned out by primary crosstalk. With that crosstalk defeated, previously unnoticed noise becomes more noticeable. Problems like this will continue to make some lines do considerably worse than expected. It's great to see real deployments are close after six years. *** Calix’s 4 new ONTs: cost-effective support for advanced business services The 741GE, 742GE, 743GE, and 744GE ONTs provide cost-effective support for mobile backhaul and advanced business services. Highlights: Industry-standard Ethernet operations, administration, and management (OAM) – for demonstrating conformance with service level agreements (SLAs). A full gigabit of symmetrical bandwidth http://bit.ly/zxbBPf (ad) Aware's DSL Patents for Sale http://bit.ly/y6iBMw Avoid war. Reasonable and non-discriminatory, please. Aware did pioneering work in DSL, including design work crucial to several chipmakers. As DSL chipmakers dwindled to the current four, demand for independent design dried up and Aware sold the business to Lantiq. They’ve retained the Dr. DSL diagnostic business and some royalties from earlier work, but revenues are declining. Their board now is “reviewing its strategic options, including a potential spin-off, sale, or licensing of patents.” Aware’s patents have long been difficult to monetize. There are dozens, perhaps hundreds of patents related to DSL, making the value of any individual patent hard to prove. In addition, the total value of DSL chip sales is dramatically down and likely to continue dropping over time as such a large proportion of phone lines are already equipped. Texas Instruments won a large judgment against Globespan that was so questionable they settled at a major discount. Otherwise, patent lawsuits have primarily been tactics to tie up competitors, an abuse of the system. The standards bodies have been incredibly negligent about enforcing the “reasonable and non-discriminatory” clauses in the standards. Corrections: An analyst I respect writes “the headline on Japanese fiber is misleading. FTTH is not profitable in Japan. NTT's annual reports show that revenues just slightly higher than expenses (though how they allocate across different parts of the business is, of course, inscrutable). KDDI's fiber is consistently unprofitable.” I was working from a published report and apparently should have looked further. Doug Jarrett thought I was too positive about the FCC Spectrum Dashboard, which I found very useful tracking the holding of AT&T compared to Verizon. ”The Spectrum Dashboard masks the significant downside of spectrum auctions. Apart from the 5-8 largest carriers that acquire spectrum and deploy systems, spectrum auctions are dominated by speculators. Due to the focus on revenue generation and the FCC's chronic inaction on technical standards and in developing meaningful construction or substantial service standards, auctioned spectrum at 2.3 GHz and 1.4 GHz, among other bands, remains grossly underutilized.” briefs Botswana, the land of the #1 Female Detective Agency, sought consultants to formulate a national broadband plan. Unfortunately, they seem to want local bidders only; even the bid documents must be picked up in person. Details http://htmlnews.balancingact-africa.com/Tender_for_Broadband_Strategy.pdf (I’d love to be part of a team on this). Stefano Galli of ASSIA has an interview about Smart Grid for the IEEE. http://bit.ly/AnOgOX Galli believes we need far more fundamental research on “how to design a reliable and robust system to control and manage communications on such a wide geographic scale for a system that is becoming increasingly stochastic and that pretty much often operates near a state of instability. It's a problem that has not been solved.” Smart Grid has true potential, but I believe most of the actual projects are more about grabbing subsidy money than fundamental improvements. Something little reported is the crucial role of the big telcos in the Smart Grid policymaking. AT&T in particular hopes to use smartgrid work as a way to expand. That’s one reason privacy controls are de-emphasized in U.S. smartgrid policy. I’ve reported AT&T hopes to profit from selling the information developed. Italy saw an actual drop in broadband landlines in Q3, from 13,516,000 to 13,333,000. The terrible economy is a key factor, but Christopher Emsden of Dow Jones thinks cordcutting is coming to broadband significantly. ZCorum, an Alpharetta, Georgia company that offers managed ISP services is adding TR-069 support to their TruVizion network maintenance software They issued a press release at OPASTCO seeking DSL customers with the surprising headline “ZCorum Working on Narrowing the Broadband Diagnostics Gap Between Telcos and Cable.” Funny - cable guys for years have been telling me they envy what the DSL Forum did with TR-069. ZCorum adds “Company will offer telcos a modem management and diagnostic capability that to this point has only been available to cable providers.” That surprises me, because I’ve been reporting for years on modem management products from companies like Calix, 2Wire, and Xyzel. The company is apparently the older firm ISP Alliance although their About page doesn’t say so. press Jeremy Owens at the Merc is on target “Apple's astounding quarter and its unbelievable numbers.” No tech company - anywhere, ever - made as much as Apple's $13B. The new iPad in a month or two will be incredible, the $300 iPhone is on the way, and when the LTE iPhone is ready - not long from now - 220M Americans will want to buy. Julia Angwin’s WSJ Page One article http://on.wsj.com/pPlixt reports the feds routinely get “emails, cellphone-location records and other digital documents without getting a search warrant or showing probable cause that a crime has been committed.” She added a sidebar http://blogs.wsj.com/digits/2011/10/09/the-little-isp-that-stood-up-to-the-government/ “The Little ISP That Stood Up to the Government” about Sonic.net. They resisted in court although were ultimately unsuccessful. Sonic is succeeding on the business side, bringing the “French Bouquet” of maximum services at a minimum price to Northern California. For $45, you get “up to 20 megabit” DSL plus unlimited phone calls across the U.S.. Angwin kindly included my comparison ““Essentially every large carrier in the country charges at least $50 and as much as $80 for a similar service,” Sonic is doing full local loop unbundling (UNE-L) across most of Northern California, proving it’s not impossible. John Eggerton at Broadcasting and Cable is reporting more good stories than any other communications focused reporter in D.C. these days. The Reynolds Center for Business Journalism is offering a free training course http://bit.ly/nygTLk How Not to Be Bamboozled by Local Economic Studies. DC is inundated by studies from well-credentialed and well-paid economists that are total garbage.Some journalists report them. Brendan Sasso at The Hill writes “The FCC is not expected to take up any particularly contentious or partisan issues in the next several months.” Almost anything worth doing at the FCC costs some companies money and hence becomes contentious. Brendan’s implication is that Julius will accomplish almost nothing before becoming a lame duck. I hope Sasso is wrong. wall street "A rational investor would conclude that a long Comcast/short verizon positioning makes sense." Craig Moffett writes, but he then warns investors to be wary of what seems like a good idea. Craig notes that "mis-valuations will inevitably be closed. But when? When?” He explains, “Fundamentals are being drowned out by other factors. A thirst for yield that has led investors to overlook other more fundamental valuation metrics in favor of dividend yield alone.” Verizon's price to earnings ratio is much higher, which would only make sense if Verizon's profits were likely to grow much faster than Comcast's. As Moffett notes, that isn't either the current or historical trend. Verizon in fact is barely covering the dividend when you adjust earnings as Moffett does. Brett Feldman, Doug Mitchelson, Jonathan Epstein of Deutsche Bank did a detailed and very useful analysis of the spectrum holdings of each U.S. carrier. They found that except for Clearwire, the major carriers are currently using most of the spectrum they own but that 47% of licensed spectrum is barely being used. This is the first in a multipart series and I’m looking forward to the rest. Feldman also has a report on U.S. prepaid wireless that demonstrates how Lifeline subsidies are the crucial driver. He notes lifeline spending is currently going up at a rate of ~$40M/quarter, although tighter eligibility checks will slow that down. people Reclusive Randall Stephenson of AT&T is the surprise winner of the Total Telecom poll as CEO of the Year Vanessa Hessler first lost her lover and then her job as spokesmodel for Telefónica Germany. Mutassim Gaddafi died in the fighting in Libya alongside his father. "We, France and the United Kingdom, financed the rebels but people don't know what they are doing," Hessler told Italian magazine Diva e Donna. Meanwhile, a dozen telecom suppliers are in Libya looking for contracts and European carriers are hoping to take over the Libyan phone network. Ariel Masilos, co-founder, and Dror Salee, VP, are among those gaining as Anobit is purchased by Apple. They were GPON chip pioneers at Passave, now part of PMC-Sierra, before they became involved in improving flash memory. policy (much abridged) Brussels: Big European Operators Asking for Bit Tax http://bit.ly/yUPpSS Huge telco push to tax the net A remarkable dozen CEOs of Europe's largest companies went to Brussels October 3 to ask Neelie Kroes to allow "new models involving traffic - or quality dependent payments at wholesale level." In other words, the telcos want to collect from Disney, Netflix, Google, Hulu and anyone else who wants to deliver bits to people in Europe. "To 'ell with net neutrality" is the message, which the companies believe will "enable a sustainable digital society." more http://bit.ly/yUPpSS Found: $Millions in saving from universal service. (?satire) http://bit.ly/wsCs78 Sandwich Islands lawyer finds strong competition. High-powered D.C. lawyer Rick Joyce of Venable provided a clear case for withdrawing all USF support to his client in an FCC note. “These services are subject to competition from multiple mobile wireless carriers, in addition to digital voice service provided by a cable company. If the information requested were disclosed to Sandwich Isles’ competitors, Sandwich Isles would suffer substantial competitive harm.” He was opposing my freedom of information act request for the blacked out parts of a Sandwich Island petition. SI is appealing the new FCC regulations that limit then to a subsidy of only $3,000/year for each line. more http://bit.ly/wsCs78 and http://bit.ly/x1I32J This one is particularly ugly. There may be as much as $400M in RUS loans liable to go into default. RUS & the FCC need to move immediately to have an aggressive team ready to assume management of telcos going bust, of which there will be many. They also need some good forensic auditors to make sure assets haven't been looted and taxpayers left with a shell. For the record: Dave to DC on Costs http://bit.ly/zIqcof The FCC is making $50B in decisions on universal service, mostly in the next few days. I sent over some data I thought might be relevant for someone at the FCC to judge how reasonable some beltway claims may be. This is quick, off the cuff stuff. Anyone who notices anything wrong please get back to me. db Max practical LTE cap for under $50 service - probably 15-20 gigabytes (Germany and other sources). LTE Advanced in 2014-2017 can raise that 5X. Likely cost of 4.8M from remote DSLAMs - At least half closer to $500 than $1500. Total more likely closer to $6B than $16B. Time frame for DSL buildout: 24-36 months for 90% is easy. Relevant gear is off the shelf and in good supply, as are contractors. This is all standard stuff. Relevance of DSL vectoring - None. No practical impact over 1,000 meters. Relevance of DSL bonding - High. $150 or so all in to double speed of any connection. Relevance of DSL repeaters/amplifiers - Interesting. They can bring 1-2 megabits 20-30K feet for $250/line. Hard for them to get to 4 megabits. For the record: January 18, our home page went black with the message, “Today, websites in America are turned black to protest SOPA and PIPA. These laws would distort and thereby endanger the structure of the Internet.” h (The petition itself will probably become moot when the FCC discovers the claim “there is no satellite available in Hawaii” is no longer true. Viasat confirms they now offer service. But the precedent that policy material should generally be public remains important. Multi-Billion ICC Windfall for Big Telcos http://bit.ly/yZ6s32 A huge story so far unreported. Follow the money and you discover that the Big Telcos - mostly Verizon and AT&T - net a billion or more each year from the new FCC changes. Begin by examining the reduction in ICC termination payments of about $4B and asking Cui Bono? Thoughtful analysis in the USF/ICC Report concluded that about $2B would likely pass thru to consumers, much as lower wireless prices. The $2B balance would mostly go to Verizon and AT&T, who have spent $100’s of millions lobbying on this. The report has a good discussion of how we can estimate where the money will go in Appendix I on page 632. The size of the Big Telco windfall has long been a key issue in ICC/USF. Kevin Martin’s USF/ICC proposal of 2008 - which was in many ways better than what Julius offered three years later - initially floundered on the issue of the size of the windfall to the Bells. Much more, including some details I couldn't report in 2008, http://bit.ly/yZ6s32 Josh Gottheimer, Jules' spin doctor, deserves enormous credit for keeping the D.C. reporters away from this. Jules this week is going to claim he's "expanding broadband" even though he is adding $0 for the poor. Will any in D.C. compare that $0 with the $2B for the big telcos buried on page 632. C'mon, C. & A. From our advertiser Lantiq Announces Industry First VDSL2 Vectoring Chip Enabling Full System-Level Crosstalk Noise Cancellation http://bit.ly/yH0Yed Munich/Neubiberg, Germany January 9, 2012 Lantiq, a leading supplier of broadband access and home networking technologies, today announced first customer shipments of its VINAXTM IVE1000 System-Level Vectoring Engine chip. Lantiq’s new VINAX IVE1000 demonstrates a breakthrough in full system-level vectoring capability, scalability and expandability up to 384 ports. Used in Central Office (CO) or neighborhood/in-building cabinets, the VINAX IVE1000 uses advanced signal processing techniques to cancel Far-End Crosstalk (FEXT) between any of the VDSL2 lines in a copper bundle. By eliminating crosstalk service providers are able to achieve 100 Mbps symmetrical and beyond. With VINAX™ V3, carriers can install “vectoring ready” VDSL2 line cards (which support ADSL2/2+ through VDSL2 30MHz standards) today, requiring only a remote software upgrade when the VINAX IVE1000-based central vectoring card is added at the CO or in a local cabinet. Connected to a vectoring standard-compliant CPE device such as the Lantiq XWAY™ VRX200, this combination allows the implementation of a complete end-to-end vectoring solution. Lantiq’s XWAY VRX200 CPE device is “vectoring ready” today, as such only a simple software upgrade is necessary for full vectoring functionality. The VINAX IVE1000 is sampling now. http://bit.ly/yH0Yed Reply "subscribe" to be added, "un" to be dropped Volume 12, #1 January 2012 September
40 IPTV Set Tops, Quantity 3 Million http://bit.ly/pTv5Jr Recall! Recall! Germany Replacing Speedport Power Supply http://bit.ly/r9HYi8 Arab Spring, British Spring, China Spring? http://bit.ly/oxPsgx Fiber Home Turns Profitable in Japan http://bit.ly/pTo25U Pirate Party Wins 56 Places in North German Election http://bit.ly/nI4nlj Good Government Work: Very Useful FCC Spectrum Dashboard Jules Brings Back the Internet Tax http://bit.ly/qCkLQz AT&T-TM: Why Cicconi Failed or 2 + 2 does not always equal 5 Cawley: Big Telco ABC Plan "Fiction Worthy of James Bond" http://bit.ly/qoFiUC $5M Of Lobbyists Demand Secrecy for Big Telco Plan Model http://bit.ly/pLTv2h Reply "subscribe" to be added, "un" to be dropped
“AT&T is going to be fine whether the merger happens or not.” Ralph de la Vega, President
De la Vega has earned a reputation for honesty. AT&T is an extremely able company and will remain among the most profitable on earth. But in D.C. the Big Telcos $10+B subsidy could be derailed because their data is bogus. They also do not have plans to actually build 2 million more broadband homes as they promise. http://bit.ly/qzBYHR. Far too much policy at end but its important stuff
I'm rushing for the plane to Broadband World Forum in Paris. There's also a special "state of the industry" report in your mailbox.
*** September 27 Paris Broadband World Forum Noon ASSIA CEO John Cioffi keynotes an extraordinary afternoon of DSL discussion. Featuring AT&T, Belgacom, BH Telecom, Bouygues, BT, DT. Telekom Polska, Telus, Turk Telecom and others. (ad) See you there. It’s a remarkable program, part of a very strong conference.
40 IPTV Set Tops, Quantity 3 Million http://bit.ly/pTv5Jr
With basic IPTV selling for less than $3/month, China Telecom can't afford an expensive set top. To bring prices down, they are requesting bids for 2.83 mln SD STBs and 880,000 HD STBs (Marbridge). They expect prices for simple SD boxes well under $50. Huawei, ZTE, and UTStarcom have been the primary vendors for the first 9M IPTV homes that China Telecom has rolled out. Alcatel-Shanghai Bell and almost a dozen other firms have sent units to China Telecom Labs for testing. "The price is very low," a vendor tells me, "but not impossible. There's almost no margin." Winning bids like this usually requires close cooperation by every step of the supply chain. Not merely does the chip vendor have to agree to a very aggressive price, they often request the chip foundry also make concessions to win the order. It's a dangerous game; if costs aren't well-controlled, large losses are possible. I remember Alcatel bidding so low to win a Chunghwa contract they demanded a re-negotiation midyear from a very unhappy customer. Shanghai is the early leader, with over 1.5M homes connected. Internationally oriented Shanghai Media Group paved the way and UTStarcom provided equipment at a loss for several years to kickstart deployment. As much as possible, China Telecom is using WiFi rather than wiring apartments. Celeno has been supplying the chips in China. As 3x3 and 4x4 MIMO and beam forming become standard technologies, carriers around the world are hoping WiFi is becoming reliable enough to expand beyond trials. While the national government up to the level of the Central Committee has been strongly supporting "triple-play" and "convergence," politics until now has slowed IPTV. There's been a huge turf battle between SARFT, the television regulator, and MIIT, the telco regulator. Expect explosive growth as that resolves. If politics doesn't interfere, the cablecos will respond with tens of millions of cable modems and pass the U.S. as the largest cable market later this decade.
*** Lantiq XWAY HARMONY (LXH) Spectrum management technology maximizes performance of VDSL and G.hn networks operating side-by-side. http://bit.ly/i0DRPw (ad)
Recall! Recall! Germany Replacing Speedport Power Supply http://bit.ly/r9HYi8 ADSL gear is rarely a safety problem, but Deutsche Telekom is now recalling the power supplies for its Speedport W 700V routers because of danger due to an electrical shock. The case could crack or the cover detach, exposing live elements. The unit is made by respected Taiwanese manufacturer Leader Electronics. Google doesn't show me any problems with other Leader products.
The Speedport also had a major security problem in early days. Details http://bit.ly/r9HYi8
*** CITI Columbia University Friday October 14 Ultra-Broadband Wireless. With Chief German Regulator Mathias Kurth, Simon Flannery and Craig Moffett of Wall Street, and many more http://www4.gsb.columbia.edu/citi/events/SOT2011Reg Sure to be a strong event. Only the engineers believe that a gigabit on wireless is not just possible but only a few years away. (shared) See you there.
Arab Spring, British Spring, China Spring? http://bit.ly/oxPsgx
The quote above is from Xinhua. Cameron wants to cut off those "plotting violence, disorder and criminality." I doubt cutting off Facebook would have handicapped Bernie Madoff of the many criminals in London's City, but who knows. Sarkozy is cutting off folks for copying; perhaps he thinks Samsung should not just be sanctioned for copying the iPad but also removed from the net? The Chinese saw the irony. As The Guardian reported, “The Chinese government official news agency, Xinhua, welcomed the suggestion, saying it marked an improvement from Cameron's comments in February. Then, he had urged Egypt and other North African nations to allow freedom of expression after they tried to restrict the operation of social media. “Xinhua said: 'For the benefit of the general public, proper web monitoring is legitimate and necessary. We may wonder why western leaders, on the one hand, tend to indiscriminately accuse other nations of monitoring, but on the other take for granted their steps to monitor and control the internet.'” http://bit.ly/qc3IzK Did anyone else see the irony of the U.S. working actively to delay Egyptian elections after the disorders because we thought the Muslim Brotherhood might outpoll the folks we prefer?
*** Broadband World Forum 2011 held from the 27th 29th September in Paris is the world’s largest Broadband event attracting thousands of decision-makers from across the globe. With 300 speakers, 215 service-provider case studies and 200 exhibitors, the event is bigger and better than ever! For more information visit www.broadbandworlforum.com (ad)
Fiber Home Turns Profitable in Japan http://bit.ly/pTo25U
Kei Takahashi at Merrill Lynch Japan has a buy on incumbent NTT, a company struggling since 2002. Takahashi believes “growth in IP services such as FTTH are offsetting the decline in legacy services such as telephone revenue.” He sees FTTH revenues as stable and is optimistic about the company in both the short and intermediate term. Masayoshi Son shocked NTT a decade ago with low priced DSL, coming in at $20 when NTT was at $40 and soon adding inexpensive VOIP calls. He took millions of customers and set a model which was confirmed by the incredible success of Free in France. NTT’s first response was to cut prices just to stay in the game while they built the world’s most extensive fiber network. The Japanese regulator allowed NTT very favorable pricing on fiber unbundling, leaving minimal margin for broadband competitors. Over time, customers have been abandoning DSL for the faster fiber despite higher prices. NTT has a dominant position in fiber and also captures most of the value added in fiber resold to competitors. Son’s Softbank has done very well in wireless as the first with the iPhone in Japan. Takahashi reports “Growth is slowing [as] earnings continue to decline in the broadband and infrastructure divisions due to a decline in ADSL subscribers.” He rates the other Japanese giant, KDDI, underperform. While the low prices in Japan led to remarkable early growth in broadband take rates, that leveled off years ago. Today, fewer in Japan take DSL, fiber, or cable than in many Western countries. The prices in Japan, especially when measured as cost per megabit, continue relatively low. One possible explanation was the early growth in wireless data at NTT Documo, but I remain puzzled.
*** Small Cells Berlin 11-12 October Informa, the company behind BBWF, is bringing together senior representives from nearly all major European carriers including BT, DT, FT, Vodafone, Telecom Italia and Telefonica.
http://smallcellsevent.com/conference/speakers/ (ad)
Pirate Party Wins 56 Places in North German Election http://bit.ly/nI4nlj
To my amazement, the Pirate Party won numerous seats in the Lower Saxony election and 9% of the vote in Berlin. Around Hanover, they pulled about as many votes as the traditional FDP, part of the governing coalition. Even 3% is a remarkable result, especially with a surging Greens party attractive to many of the same voters. Lower Saxony, unlike many other parts of Germany, does not require a 5% minimum to win seats under proportional representation. This is yet more convincing evidence we need to find a better way to support creators than threatening people with jail and excommunication. Most of the population - I'd bet 80% - either copies music or thinks it shouldn't be criminal. Despite that, the power of industry money has brought "IP" near the top of U.S. policy concerns. It's a perfect example of "special interest" money inciting politicians to vote against their constituents. When Hilary Clinton goes to Beijing to discuss cooperation about North Korean nuclear weapons, it's disgusting to complicate her visit with arguments over royalties to four giant record companies.
Correction
An extremely limited percentage of the exchanges of Century and Windstream do not have fiber connections that can be inexpensively upgraded shouldn’t have been included in Unlikely and Perhaps Utterly Unbelievable: $80 Cost Per DSL Line Already in Place http://bit.ly/nzZ84U 90M Nigerians now have cellphones. http://online.wsj.com/article/SB10001424053111904279004576524742374778386.html That’s more than the population of any European country except Russia. North Carolina’s widely respected e-NC broadband authority was “de-funded” despite many achievements. I can’t prove it, but this one smells like dirty politician buying by Time Warner and AT&T. Director Jane Patterson has a national reputation and is a natural short list candidate for any job opening in broadband. Vermont community group ECTEL deployed its first fiber homes just before the state was flooded out. With backing from a dozen towns and strong local support, they are developing a model of community-funded fiber builds that is attracting national interest. Ubiquiti will be an IPO I’m watching. Their $159 Nanobridge and similar unlicensed wireless products are favorites both for rural U.S. WISPs and around the world. The electronics are built into a modest sized antenna unit that’s easy to deploy. Using MIMO, they are get speeds of 10’s and even 100’s of megabits or distances of kilometers. Calix will be supplying the gear for a major expansion of FTTN/DSL at Cincinnati Bell. Justice Dube of Bell tells me they plan 60,000 lines for IPTV. AT&T is close to 30M lines of similar and there are several million more at Qwest/Century and other carriers. 1/3rd of the U.S. will have a 25+megabit choice from the phone company, compared to only about ¼ with fiber available. So far, AT&T is doing remarkably well against cable despite the lower speeds. Customers love the Microsoft Mediaroom interface. I long believed that cable would pull far ahead because of 50-100 speeds of DOCSIS 3.0, and Craig Moffett wrote similar recently. Because AT&T has been doing so well, I’m watching this closely for new trends. To date, few customers are willing to switch or pay much more for speeds above 10 megabits. Press Om Malik on Steve Jobs “It is incredibly hard for me to write right now. To me, like many of you, it is an incredibly emotional moment. I cannot look at Twitter, and through the mist in my eyes, I am having a tough time focusing on the screen of this computer. I cannot hear the sounds of the street or the ring of my phone. The second hand on my watch moves slowly, ever so slowly. I want to wake up and find it was all a nightmare. … A few years ago, I compared Steve to Howard Hughes using the line, ‘Some men dream the future. He built it.’” Om is the best technology reporter in the U.S., now that Saul Hansell and Dan Gillmor have moved on to other things. Some of us were close in fields like broadband, perhaps, but as Om built GigaOm he moved into the center of covering what is now “the cloud”, infrastructure, and the most innovative of the Internet companies. Om is a few years younger than I, I believe but never asked him and has blogged his heart attack. I hope I never have the need to write something like this for my friend.
Briefs
Wall Street The emerging tech bubble echoes on Wall Street, Susanne Craig reports in NYT. Douglas Anmuth was lured to JPMorgan Chase earlier this year with a pay package valued at roughly $2 million. Heather Bellini landed at Goldman Sachs with a remarkable pay package worth almost $3 million. JPMorgan offered Mark Mahaney about $3 million. John Paulson is considered one of the top hedge fund managers in the industry, Kelly Bit reports at Businessweek. He runs $34B. But he’s lost 34% in the last eight months on his largest fund. Most extraordinary returns on investment are luck, no matter how hard that is to believe.
Policy
Good Government Work: Very Useful FCC Spectrum Dashboard
I needed an example to explain why “non-contiguous carrier aggregation” is crucial to LTE Advanced gigabit performance. Five minutes at http://reboot.fcc.gov/spectrumdashboard gave me what I needed for the article. I found that AT&T had 84 MHz across multiple bands and T-Mobile 70 MHz. AT&T wants to buy 12 MHz of prime spectrum from Qualcomm.
Jules Brings Back the Internet Tax http://bit.ly/qCkLQz
While the government around him is torn apart by fear of default, Jules has just brought back the hated "Internet Tax." A few months ago, the FCC denied they would order this tax, euphemistically called "broadening the USF contribution base." I had added up what Jules had promised the different companies and the numbers simply didn't work without a tax increase somewhere. They told me I had it wrong. Now it's back. While telling the Washington Post he would achieve "affordable broadband," Julius has actually presided over a pattern of increases that have raised the price of broadband. Now, he wants to raise the price even further by adding a tax. The other commissioners seem inclined to go along. Deceptively, he calls this "Bringing Broadband to Rural America: The Home Stretch on USF and ICC Reform." Anyone who looks at the actual proposed spending knows most the money is a subsidy to phone companies for what they already will do. It will have almost no effect on actual deployment of broadband. Most egregiously, the big telcos are asking for an additional $B/year or more for the broadband they already have in place. They want another $billion for extending LTE where they already planned. AT&T in the T-Mobile merger says building to 97% LTE is good business. In the Big Telco Plan for USF, they and Verizon insist they would never do that build without $billions in subsidy. Let's believe AT&T that they don't need the subsidy and save $billions.
AT&T-TM: Why Cicconi Failed or 2 + 2 does not always equal 5
Although I wrote "The T-Mobile bid is on the brink of failure," emotionally I still expected Cicconi to win and assumed I was tilting at windmills. Under Genachowski, AT&T has won something like 28 out of 30 major decisions, with the two losses (LightSquared spectrum, compulsory roaming) only partial. A few days ago, one of the best journalists covering the FCC wrote "I feel like I am talking in a vacuum. Sigh." Ultimately, the merger failed because everyone realized eliminating a major competitor would hurt consumers. Here are some steps along the way you may have missed. AT&T inadvertently pressured Obama's people to kill the deal now rather than going through the expected year of reviews. There was an implied threat that if Obama blocked the deal he would be denounced as "anti-business." This was powerful incentive to take care of business this year, well before the 2012 election. Obama needed to stop the merger, soon, because it would have devastating results on next year's spectrum auctions. T-Mobile and AT&T likely will now be aggressive bidders. Without them, the auction proceeds would probably have been $billions less and hurt the budget. AT&T made a very bad mistake in a filing when they said the deal would give them the spectrum they needed. That implied that if the deal went through, they wouldn't need to buy at the auction. False claims lost AT&T's credibility. Nobody who knows the industry believed that T would stop their LTE deployment at 80% and give Verizon a massive advantage. Nor was it credible that T couldn't afford to do 95% or so without this deal because Verizon was already committed to 98%. Yet Randall twice before Congress and AT&T literally hundreds of times said they would stop at 80%. AT&T also claimed they needed T-Mobile towers because otherwise they couldn't expand their network rapidly. But there was no reason AT&T couldn't have just rented space on most of the same towers and been live in less than the year the deal would take. Greg Rosston of Stanford, a good economist, was brought in to lead the FCC review. FCC Chief Economist Marius Schwartz had taken so much money from AT&T in the past he thought it wasn't right to take part. Rosston's an establishment type with many corporate financial ties, but he's demonstrated he can put the public interest first. I reported that in an academic paper he had established the U.S. wireless industry is "highly concentrated." AT&T, of course, brought in the usual "distinguished economists" who for $500-$1,000/hour will "prove" anything the company desires. Greg has the skill to make mincemeat out of them and did. Gene Kimmelman was a crucial part of the Justice Department team. Gene for decades has been among the most articulate consumer advocates in D.C. and specialized in telecom. Very few know the issues as well as he does or make arguments as passionately. When I saw his name on the court papers, I knew none of the usual falsifications would get by. Laury Bobbish at DOJ emphasized in a 2008 presentation "Access to credible information is critical." AT&T fought bitterly with the FCC about releasing key information. What were they hiding? The team at DOJ has decades of experience with telecom mergers and related battles including the Microsoft antitrust case. They will be very hard to beat. http://bit.ly/qoFiUC $10B Mistake The Big Telcos $10+B subsidy could be derailed because their data is bogus. They also do not have plans to actually build 2 million more broadband homes as they promise. http://bit.ly/qzBYHR. Courageous Pennsylvania Commissioner Jim Cawley rips into the claimed costs. http://bit.ly/qoFiUC. Kim Hart at Politico scooped the Washington Post with the first story on what “the Republicans are surely going to call the Obama tax” which Genachowski is considering, raising the price for most of the poor who buy broadband.
USF/ICC
My previous reporting: A Special Report: Ending Universal Phone Service, Doing Nothing for Broadband http://bit.ly/qzBYHR
Cawley: Big Telco ABC Plan "Fiction Worthy of James Bond" http://bit.ly/qoFiUC
Pennsylvania Commissioner Jim Cawley calls the Big Telco ABC plan "Beyond outrageous. It has nothing for customers except higher bills. It would raise local rates as well as the SLIC and is a one sided deal" The heart of the Big Telco Plan is a claim they are massively losing money on rural lines they have in place. It's backed up by "model" they refuse to release. The "model" is obvious nonsense for existing lines, while contradicting the AT&T filings in the T-Mobile merger, numerous Verizon statements, and common sense. Cawley, the lead state commissioner on the FCC Joint Board, recognizes "No responsible regulator would use this data until they release the actual model. It is fiction worthy of James Bond." He adds "We are going to have failed rural carriers and massive consolidation. There will be a major job loss in rural areas." Nebraska Commissioner Anne Boyle said it like it is. "A lot of state regulators agree this isn't right. The Plan has no cost analysis. Industry does not have the right to take advantage."
$5M Of Lobbyists Demand Secrecy for Big Telco Plan Model http://bit.ly/pLTv2h
Hank Hultquist of AT&T just smiled as senior state regulator Jim Cawley warned the Big Telco "ABC" plan was based on "Fiction worthy of James Bond. No responsible regulator would use this data until they release the actual model." Hultquist responded with a $5M, 12 person lobbying team pressuring Steve Rosenberg of the FCC to keep things secret. Hank's commissioned model implied that AT&T and Verizon were losing $50/month on each of a million existing DSL lines and would abandon them without $billions in subsidies. This is wildly implausible, given unchallenged Wall Street estimates that their average DSL line cost $8/month to service. The big carriers have modest backhaul costs because they have fiber in place to nearly all rural exchanges. The copper and DSLAMs are already in place with only modest maintenance costs. The folks running the big telcos would have been very stupid if they had invested so much in DSL lines where they were losing fortunes even after the investment. Randall and Ivan are extraordinarily capable executives who aren't stupid. I've discovered since that the need for subsidies for the (extremely modest) number of LTE lines to be added was highly exaggerated as well. AT&T in a T-Mobile merger filing said there was a good financial case for 97% LTE buildout, which would include most if not all of the deployment promised. I chose to believe that filing, which is another nail in the coffin of the model. They are now making limited information available if I sign a non-disclosure. I hope that’s enough to tell whether the model is totally bogus.
For the record: Dave filing on Big Telco Plan Because Jules Genachowski deserves the truth about the subsidies he is proposing for the Big Telcos, I submitted this filing in 10-90. The data justifying the Big Telco ABC Plan are b______ . Pennsylvania’s State Commissioner Jim Cawley's comments below call them "Fiction worthy of James Bond." I inserted the Cawley article. I speak confidently after 12 years of reporting DSL and writing a book about it. The model is at least 200% higher and probably 500% higher than the actual costs of deploying 4 megabit broadband by these companies in these territories. Because it's secret, I don't know what errors or false assumptions are involved, but the difference between the costs here and those calculated by the national broadband plan are obvious. There is a small exception possible for a fraction of the Windstream and Century territory. If those filing this proposal are maintaining this is a reasonably accurate model of the likely costs for the six companies involved, they are almost surely committing fraud and the FCC General Counsel should be investigating whether they should be barred from any FCC work. (I cannot prove anything because the data are secret.) Their companies should be significantly penalized. They are Robert Quinn, Steve Davis, Kathleen Abernathy, Kathleen Grillo, Michael Rhoda
From our advertiser
True Universal Convergence Selects ASSIA to Increase Speed and Reduce Costs
Thailand’s Largest Broadband Provider Deploys ASSIA DSL Expresse Over its Home and Business DSL Networks After Trial Shows Major Performance Gains
REDWOOD CITY, Calif. September 13, 2011 ASSIA® Inc., the leading provider of high-performance Dynamic Spectrum Management (DSM) software tools that are revolutionizing Digital Subscriber Line (DSL) networks, today announced an agreement with True Universal convergence company Limited (TUC) in Thailand to deploy the ASSIA DSL Expresse® solution across more than 1,200,000 lines in its home and business networks. The agreement comes after a three-month trial provided significant gains in performance for the largest ISP in Thailand.
“TUC has established itself as a lifestyle leader by offering high-quality products and services to our customers, and constantly seeking new ideas and innovations to enhance value,” said Mr.Vichaow Rakphongphairoj, President. “Through a carefully conducted trial, ASSIA DSL Expresse proved it can help us triple the number of marginal lines that can be upgraded to 7Mbps. This improvement, combined with other network performance gains, makes us confident that ASSIA can help us boost speed and reduce costs so we can focus on providing the next-generation services our customers expect.” “ASSIA is honored to welcome TUC as a customer and pleased that TUC’s leadership recognized the value of the performance and cost benefits of ASSIA’s powerful Dynamic Spectrum Management software,” said Dr. John Cioffi, Chairman and CEO of ASSIA. “Thailand is one of the world’s fastest growing broadband markets, and we are delighted to work with our Thai partner OGA, whose local expertise and knowledge is of vital importance in this important project. We’re confident that many other service providers in the region will recognize the value ASSIA brings and take similar steps to upgrade their DSL networks.” The goal of the initial ASSIA trial at TUC was to improve speed, diagnostics, stability, and line rate prediction as well as reduce customer support calls and dispatches. ASSIA DSL Expresse was able to demonstrate notable improvements in each of these areas. (ad)
Reply "subscribe" to be added, "un" to be dropped Volume 11, #33 September, 2011 July 31
Reply "subscribe" to be added, "un" to be dropped *** Spectrum management technology that maximizes performance of VDSL and G.hn networks operating side-by-side? Lantiq XWAY HARMONY (LXH) (ad) http://bit.ly/dL4DTR May in Spain: DSL -645, Fiber +10K, Cable +9K http://bit.ly/q5k80O With 20% unemployment amid the financial crisis, it's no surprise growth is slow in Spanish broadband. DSL has long had a 5-1 lead over cable, but in April and May did very poorly. Telefonica, the DSL leader, has made ambitious promises to upgrade, including fiber for all of Madrid in the next few years. They've actually deployed very little. DSL was well ahead in the first quarter, so I doubt this reflects an extreme shift in customer preference. It's more likely a result of temporary marketing and pricing factors. Nonetheless, the negative DSL figure is a bad omen. Spain, Italy, and Ireland have just over 20 broadband lines for each hundred people, a third lower than richer countries like France and Germany. (OECD, end 2010) Economics and demographics play a role, but it's telling that these countries had a near monopoly carrier and weak regulation until recent years. *** ASSIA DSL Espresse 2.3 Revolutionizes the Power of DSL Networks The latest release of ASSIA’s award-winning solution supports the growth of next-generation services, including IPTV and increased mobility (ad) VDSL: Booming in Europe, Flat in U.S., Losing to Fiber in Asia http://bit.ly/nZklei "VDSL Port Shipments Grow to Record" was the headline of Dell'oro's release, great news to report. Steve Nozik attributed the growth to multiple carriers in Europe upgrading: Deutsche Telekom, British Telecom, Belgacom, Swisscom and KPN Holland among them. All are seeing major losses to cable and feel they have no choice but to upgrade. Each is doing some fiber home and some DSL from cabinets. Nearly all the cabinets are VDSL, for much higher speeds at short reach. Asia on the other hand is seeing a drop off in VDSL, where most new builds are fiber all the way to the apartment. Until recently, half of Japan's "fiber to the home" actually terminated in the basement. 100 megabit VDSL went up to the apartment. Bendable fiber has lowered the fiber installation cost and little VDSL is being added. North America was mostly AT&T's U-Verse, which was flattish. The majority of ports are still expected to be ADSL - but given the lower price for ADSL, the revenues should be close to equal in 2012. I've reported that John Stankey of AT&T says the U-Verse build will virtually end this year, so VDSL to North America won't grow. AT&T's enduser growth is likely to slow when the U-Verse build ends, Craig Moffett projects. The impact of that will more likely be 2013 than 2012, I believe, because bonding will allow 5M+ homes, already passed by U-Verse, to actually reach the solid 25 megabits the TV service is designed around. More, including the release http://bit.ly/nZklei Correction
*** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad)
A Special Report: Ending Universal Phone Service, Doing Nothing for Broadband This is a big one. To my amazement, the Bells wrote a plan that provides them $Billions, ends universal service, proposes cutting 1M phone lines, and actually doesn't produce any additional broadband. It is based on almost surely spurious data, including “consumer benefits” that assume MCI, Sprint, and AT&T are actively competing for U.S. long distance. (Shame on MIT Professor Hausman) It will not go through untouched, so this is important to follow. If Julus has any guts, he'll throw most of it away. I hope my friends at the telcos don't shoot the messenger. It's your Washington people who are the problem, not the reporter who breaks the story. Apologies to International readers for a U.S. focused issue. 1,000,000 Homes: Let Them Eat Satellite http://bit.ly/ntLtCM End of universal service For nearly a century, U.S. telcos served every home in the country. They now demand that end and that the FCC, pre-empting the states, end "carrier of last resort" requirements. They project this would apply to 728,000 homes in the big carrier territory. Adding the small carriers takes the figure to about a million. Since the Bells get relatively little USF money for these homes, the subsidy todoay is not excessive: about 1/50th of their annual profit/cash flow. There's no reason they couldn't continue to serve these homes and still remain among the most profitable companies in the world. This is not mentioned in the press release of the summary; you have to look to page 95 of a very dense document to find it. But this is one of the biggest telecom stories of the decade, and reporters won't be deterred. With time, I planned a companion article "Why 400 Congressman Will Refuse to Support the Big Telco Plan." When I get back from Montana, I intend to hire an assistant/paid intern whose first responsibility will be to ask "Do you support the Plan?" When they realize it means a million homes will lose phone service, I don't think even Bell lobbying power will get them to endorse it. I'll also ask as many of the state commissioners as possible. http://bit.ly/ntLtCM Approximately 0% Additional Homes Will Get Broadband http://bit.ly/oDwfF9 Already planned LTE only No matter how cynical I am, I wouldn't have guessed that the Bells want $2.2B in direct subsidy and $2B-10B more in increased prices in the name of broadband, but do not propose offering any additional service. They define broadband as 4 down, 768K up and make a point of including wireless. LTE easily reaches those speeds, and Verizon and AT&T have promised to deploy to 97-99% of the country. That will include most and possibly all the 2M homes they say their plan will reach. Repeat, this plan has no provision to extend broadband to anyone who wasn't already going to get it. It's just counting already planned LTE builds. LTE Advanced may well be the right technology for these homes. If so, we don't need any subsidies. That's why the plan proposes to lock in subsidies based on the 2011 map of what's served. Otherwise, there would be nearly no subsidy needed. $10B, the proposed subsidy, is not far different from the total cost of the national LTE build, including the first 95%. How stupid or gutless do they think Genachowski actually is. More http://bit.ly/oDwfF9 Impact of Big Telco Plan on Consumers: At Least $2B, More Likely $5-10B http://bit.ly/omtohK The Big Telco Plan proposes an increase in the "Subscriber Line Charge" which would all go to the carrier. It may be up to $3.75/month, although in somes cases the telco won't be able to get the increase in practice. The increased charge on wireless customers is unclear. The first column is $3.75/line/month and the second at $2/line/month. Under different assumptions, that yields an increased consumer cost of between $2.8B and $18B. My opinion is that the most likely figure is $5-10B I've done an estimate for both 300M lines and 400M lines, wired and wireless. To reach the 400M figure, a fair number of people would need to pay for two phone plans. In addition, the decrease proposed for intercarrier compensation lowers the cost of providing long distance service. Some of that may be passed on to customers in lower prices. A few years ago, customers had many choices in LD service, including MCI, Sprint, and AT&T actively marketed. It was reasonable to assume that much of that would be passed on to consumers. Today, nearly all of us buy LD from our wired or wireless voice provider as part of a bundle. Competition is less. Columns 3-6 have assumptions of 40% offset and 70% offset. Some folks, including Congressman Boucher, have wanted to add USF to broadband. At the current 15% rate and a $35 average monthly price, that would add about $60/year. As we move towards 100M broadband homes, that's a whopping $6B/year. Last year, it looked like the fix is in on this; now, it's unclear. I don't think the FCC would tax broadband with an election on the way. There are sophisticated techniques economists use to estimate things like this, but there are so many complicated pricing plans I don't think there's any way to come to an exact answer. In addition, much of the data that would be required to measure demand curves and pricing competition is proprietary. All things considered, it's almost certain consumers will pay $billions more per year. Most of that would accrue to those carriers who now pay the most for intercarrier compensation and are unlikely to pass on the full savings to consumers by lowering prices. Those are AT&T and Verizon. Improvements to this analysis welcome, but let's avoid sophistry. More http://bit.ly/omtohK Unlikely and Perhaps Utterly Unbelievable: $80 Cost Per DSL Line Already in Place http://bit.ly/nzZ84U All data hidden. The Big Telco Plan asserts about 5M homes cost $80 or more per month to serve and therefore need a subsidy. It's almost impossible for this to be true under any appropriate measure. The standard cost for a large carrier with equipment in place is about $8/month. That figure is confirmed by the most respected on Wall Street, John Hodulik and Craig Moffett. It's more costly to serve less dense regions, but for locations with equipment in place I can't see any legitimate way to justify a number above $15-20/month. That's about half the homes claimed as costing over $80/month. Where new equipment needs to be deployed, the broadband plan data implies dramatically less capital to reach the unserved homes if the last 1% is excluded. Over 72 months, that's $15-35/month. The total for those needing new facilities is therefore between $30 & $55 per month, way under the $80-250 in the plan figures. Subsidies are appropriate, but only at a fraction of the level proposed. Unfortunately, the Big Telco Plan does not include the model used to calculate their figures. Takeaway: The figures here contradict the Broadband Plan, the best on Wall Street, and typical costs of bandwidth, routers, support calls, DSLAMs, and the other components of broadband cost.. They might be fine, but I believe it should be tossed aside until the data is verified. More http://bit.ly/nzZ84U Billion Dollar Incentive Not to Build Broadband http://bit.ly/oNnr1O Prefer money without investing. The Big Telco Plan puts a cap on what the big telcos could collect of $2.2B, about $1B more than they grab now from USF. (Chart below for 2010 does not reflect the scheduled drop at Verizon.) They almost certainly will set the rules and numbers to collect the full amount, which they claim is reduced from $9.7B. They are not actually required to build to any additional homes. If they build no additional broadband, they'll almost surely manage to collect the full $2.2B, perhaps by referencing the almost certainly inaccurate cost claims. If my projection they will collect the $2.2B is correct, they'd be fools to invest in any further broadband. Investment costs money. Any subsidy related to the investment would reduce what they collect on the already served lines. The solution is obvious and probably worth $10B over as many years: don't subsidize lines that already are served. The Big Telco Plan salls for not subsidizing lines where cable has broadband because obviously they don't need a subsidy. Apply the same rule to lines that already have DSL to them. President Obama promised to bring broadband to those unserved, not give away billions to the U.S. telcos, among the most profitable companies in the world. More http://bit.ly/oNnr1O AT&T, Verizon Find Broadband Map Data Unusable http://bit.ly/qr8kcr If reporters advance this story, NTIA boss is in trouble Creating the model for the Big Telco Plan for USF/ICC, Jim Stegman found the data in the National Broadband map so unreliable he couldn't use it. Instead, he filled in many of the gaps by "augmenting the NTIA data on cable provided broadband coverage with Warren Media data." The number of homes unserved by cable according to NTIA is nearly twice reliable numbers from other sources. I estimate that if the six companies had used the NTIA map data, subsidies demanded would have been $billions higher. Everyone in the business - including FCC staffers - know the data is garbage and needs to be extensively revised. Reliable sources tell me the next version will be better, although according to what NTIA is telling me it will still be far off. Kathleen Grillo, Bob Quinn of AT&T, Kathleen Abernathy of Frontier, Steve Davis of Century, and Michael D. Rhoda of Windstream all signed the proposal, Many industry and regional newspapers have been covering this. I wrote Many "Unserved" Apparently Missed on Map , U.S. State Broadband Data Implies 4-5% Can't Get 3 Meg, 2% Not Even 1.5 , Broadband Map: 1.5M Californians Lost Broadband , NTIA Map: 10M Homes Lost Cable Modem Availability? How Many Corporate Jets Are Buried in the Model http://bit.ly/oNnr1O Begging for public money with private jets to DC. AT&T/SBC is believed to maintain two jets just to take executives to sporting events around the world because ex-CEO Ed Whitacre didn't want to share his jet. BellSouth, now part of AT&T, kept a jet in D.C. just to ferry Congressman home and win their favor. I'd bet that these expenses are buried in the Big Telco Plan model, probably under SG&A. For $50B companies, it's an insignificant number. But other possibly buried items, like the $10's of billions of underfunded pensions and retiree health benefits, amount to a significant fraction. Without access to the data that went into the model, I can't estimate how big a factor this is. I don't believe public money should pay for private jets to the Superbowl. From ABC News, outrage when the automakers did similar. Big Three CEOs Flew Private Jets to Plead for Public Funds By BRIAN ROSS (@brianross) and JOSEPH RHEE November 19, 2008 The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy. July 18
Germany: 50 Gigabytes of LTE 89.95 euro http://bit.ly/ni2jsU 30-40% Will Pay (A Little More) For Faster than 10 Megabits http://bit.ly/n2Sh8k Femto Failure Frustrating AT&T at DSLR http://bit.ly/rhViaZ 18 Months, No Improvements in U.S. Broadband Deployment http://bit.ly/nPbVoa $21M for Faraj' Aquantia 10G Ethernet http://bit.ly/qKiiQG Common Sense: Uncertainty, But Little Evidence on Brain Tumors from Mobile Cordcutters: Roku, WD, Playstation or?? http://bit.ly/qRxNT9 Fundamental Change "Shoot on the iPhone, Edit on the iPad, Upload from There" http://bit.ly/nDbFBp Spectrum for LTE Advanced: Crucial for Rural Broadband http://bit.ly/pyamxp House Spectrum Bill: Must Carry (Yes), Rural Broadband Limits (Needs Revising) http://bit.ly/ruKGV2 Reply "subscribe" to be added, "un" to be dropped Mathias Kurth is rapidly bringing near 100% LTE coverage to Germany, including literally thousands of small towns being connected by the end of 2011. LTE at 5-40 mbps is faster than DSL in many places and has decent latency. DT is charging three times as much, $125 with a 50 gigabyte cap. At these prices, I wouldn't expect more than 10-15% of wired broadband users to switch. Next in rural areas: LTE Advanced around 2014. LTE Advanced can easily triple the capacity at nearly no additional cost but requires more spectrum. If the carrier can put together 40-100 MHz, they can offer 10-20 megabit service with a 50-150 gigabyte cap at a cost similar to today's DSL & cable. Regulators have to be strong and smart to bring this service where it's needed. AT&T and Verizon, for example, will have 40 MHz or more in most low density areas they don't need. But the last thing they want to do is share that spectrum with competitive operators. I believe “Use it or lose it" regulations the best way to put spectrum to work. One professor suggests declaring poorly served regions as "special enterprise zones" with more liberal usage rules. Creativity needed, but changing spectrum rules for more efficient use is the best hope for better rural service. Urban LTE could do similar but with spectrum constraints would require far more cell sites. Little boxes like the Alcatel's 2 inch square lightRadio could go on every lightpost and offer incredible wireless, but that's unlikely without a government mandate. The wireless carriers don't want their landlines bypassed and have enormous incentive to avoid the best network. Pity. I'm off to Vermont this week and Montana for the state conference the beginning of August.
Germany: 50 Gigabytes of LTE 89.95 euro http://bit.ly/ni2jsU DT is selling "up to 40 megabit" LTE, 50 gigabyte cap, beginning in Cologne and soon in 100 other cities. Verizon has essentially the same network - 20 MHz LTE - but is conservatively setting speeds of 5-12 megabits. With decent latency and likely good reliability, DT's offering is clearly a decent substitute for many with DSL. 80+% of DSL users draw less than 50 gigabytes each month. The average user in the U.S. draws about 20 gigabytes, but that's a mean and the median is lower. 89.95 euro (~$125) is a very steep price, three times as much as similar DSL and perhaps four times as much as German cable. Vodafone's LTE service starts at €39.99 ($51.) "Up to" 50 meg down with a 30 gig cap costs €69.99. 30 gig is less than 90 minutes a day. LTE is great fast wireless, but the early German offerings are very expensive as an alternative to landlines. Some people who buy LTE because they need mobility will find they no longer need a landline, but at these prices I’m guessing we'll only see a modest amount of substitution. LTE Advanced, coming soon, networks easily triple the capacity at about the same cost. LTE tops out at 20 MHz; LTE Advanced can use 100. Much more, including how Germany is getting to almost 100% LTE very quickly http://bit.ly/ni2jsU 30-40% Will Pay (A Little More) For Faster than 10 Megabits http://bit.ly/n2Sh8k Between 21% and 40% of Britain's Virgin cable customers are paying extra for speeds faster than 10 megabits, Merrill Lynch calculates. But not much. Virgin charges £13.50 for 10 megabits and £18.50 for 30 megabits. The £5 ($8) difference is enough to dissuade 61% of new customers from taking the higher speed. Only 8% take the 50-100 megabits service, although the price (£25-£35) is half what U.S. cablecos demand for similar The real but modest demands for higher speeds correspond to empirical data since 2008. In Japan, 26% were willing to pay about $5 more. In the U.S., nearly no one is willing to pay $99 for 50 megabits. Cablevision, facing FiOS, has lowered the premium for high speeds from $50 to $10, because nearly no one was buying at the higher price. Results aren't in yet, but I hope one of the analysts asks Dolan in the next call. On the other hand, cable at 10 mbps has long led DSL at a typical 3 mbps in the U.S. The ratio is 56-44% and (slowly) increasing despite generally higher prices for cable. Virgin has 42% of the broadband customers in the half of the U.K. they serve, despite facing more competition. Britain has 4+ major carriers, the U.S. only two. The result: prices 20-50% lower than the U.S., but not quite as low as France. 18 Months, No Improvements in U.S. Broadband Deployment http://bit.ly/nPbVoa June, 2011. Columbia University CITI is publishing the second edition of Broadband in America, the most careful independent survey of U.S. broadband ever produced. The first edition was prepared at the request of the Broadband Plan and extensively quoted by Blair Levin and team. The conclusion in October 2009 (below) was that about 95% of the U.S. would soon have high speed wired and LTE wireless connections available, whether or not the government did anything for broadband. 20 months later, the good news is that prediction continues on track. 50-100 megabit DOCSIS 3.0 cable will soon reach 90%. 5+ megabit LTE looks likely to be at 94% in 2013-4 and 97-98% in 2016 or so, whether of not AT&T/T-Mobile is approved. FiOS and other fiber is now at 21M homes passed. 10-25 megabit FTTN/DSL is at about 30M. Combined, telcos are bringing 10 megabits+ to about half the country. During the last 18 months, the U.S. has developed a broadband plan and begun spending $7B on broadband from the stimulus. FCC Chairman Julius has set "affordable broadband" as his highest priority. The results: no effect. "The updated forecast included in this Second Report has not significantly changed," 5-10% will only have second rate choices without better policy. · The report is 176 pages of detail about U.S. broadband deployment and what will be. The first edition (October 2009):http://bit.ly/qIVpNb Second Edition (June 2011): http://bit.ly/nPbVoa Bob Atkinson, Ivy Young and team did solid work. $21M for Faraj' Aquantia 10G Ethernet http://bit.ly/qKiiQG Faraj Aalaei at Centillium was King of the Asian DSL chip market, with a near-monopoly as Japan built the best network a decade ago. They were delivering 15 and even 30 megabit speeds (very short loops) while most of the world was still topping at 6 megabits. Eventually, they weren't a survivor in the very competitive DSL chip market. Faraj is back, shipping a small quad-port 10GBASE-T PHY aimed at reducing cost and especially power consumption in large data centers. LSI Logic joined a group of Tier 1 VC's in the round. The twelve 25mm x 25mm chips in the board above switch almost half a terabit. More, including some DSL chip history http://bit.ly/qKiiQG Common Sense: Uncertainty, But Little Evidence on Brain Tumors from Mobile Dr. Nora Volkow, a world class neuroscientist, uses a headpiece for her mobile phone. I don't because I believe the evidence of harm is very weak. A team of epidemiologists in a review article concludes "Although there remains some uncertainty, the trend in the accumulating evidence is increasingly against the hypothesis that mobile phone use can cause brain tumours in adults." Which seems sensible to me, although I second AT&T's Ralph de la Vega's call to do the research to come closer to certainty. The pictures at left, from JAMA and the New York Times, make clear cellphones do have an effect on the brain. It may well be totally benign. More, including the abstract of the paper http://bit.ly/qp3tbE Femto Failure Frustrating AT&T at DSLR http://bit.ly/rhViaZ AT&T has indefinitely postponed their plan of 10M femtocells, Ralph de la Vega comments. The femtos are causing interference except at the further reaches of the cell sites. Ralph reports great results where the signal is weak. WiFi offload will therefore be their obvious spectrum strategy. Femto engineers think the problems have been solved and point to other carriers like Vodafone who are happy. I've invited them to follow up with articles here. But Ralph one of the most respected folks in the industry so I take this seriously. More in an article I wrote at DSL Reports, http://bit.ly/rhViaZ Cordcutters: Roku, WD, Playstation or?? http://bit.ly/qRxNT9 We made a mistake buying the Roku box. It's great for Netflix, but doesn't play AVI's and other common formats I get often. Dan Rayburn, the guru of Streaming Media, had a wall with more than a dozen boxes. Jennie asked him how to choose. His answer, alas, was "It depends ..." I learned we probably should have bought a Western Digital if we needed flexibility, or perhaps an Xbox, Dan's favorite. Next to the add-on boxes was another choice: Samsung's Connected TV. The video interview http://bit.ly/qRxNT9 Fundamental Change "Shoot on the iPhone, Edit on the iPad, Upload from There" http://bit.ly/nDbFBp Famed film professor Norman Hollyn tells us, "With YouTube, Vimeo and the like, it's so much more possible to get your message out. Not just from Hollywood but worldwide. … There are new people coming in all the time." Hollyn thrived in the studio system, working with Francis Coppola, Oliver Stone and other greats before settling down at USC Film School. Now, "It's so much easier now. There are so many ways to rise above the crowd due to the decrease in the price of technology." Jennie believes Hollyn's "Lean Forward approach" works as well for Internet filmmakers as for Hollywood traditionalists. She jumped at the chance to interview him at EditFest New York, two days of top editors sharing what they've learned. The video interview http://bit.ly/nDbFBp Press Great headlines: Martyn Warwick Nokia and Siemens: Dying for a divorce but stuck with one another No one wants to buy them; Kaja Whitehouse Falcone begs FCC: His $3B bet on LightSquared at risk All lobbyists are beggars in fancy business suits, but this one is particularly desperate Anton Troianovski, the new telecom reporter at WSJ, reports wireless carriers in the U.S. dropped 20,000 employees in the last two years and 40,000 in the last four. That's 20% overall and 40% in the call centers. That's a simple explanation for why the service keeps getting worse. Ron Nixon NYT quotes Robert Bixby on unneeded government giveaways. “These programs are like vampires, you just can’t kill them. Just when you think there are dead, they manage to rise up.” The best way to protect universal service is by eliminating waste, but it's a tough fight. Most in D.C. think Sharon will make a bad compromise, Wall Street Wilton Fry downgraded Virgin to underperform after the stock has climbed from a low of $3.50 to above $30. He sees "looming structural issues." People are abandoning landlines, there's little room to grow triple play because they've sold it to most customers already, and BT's "up to 40 megabit" upgrades are becoming a factor. Policy Spectrum for LTE Advanced: Crucial for Rural Broadband http://bit.ly/pyamxp The current average U.S. home draws about 20 gigabytes/month, already 2 to 10 times what carriers with LTE offer. So raising the wireless capacity is a high priority for wireless to be a real alternative. In rural areas, there are typically 10cow0's of MHz unused, enough spectrum to offer far more robust wireless service. Today's best technology, LTE, can only use 20 MHz; the 2013 version, LTE Advanced, can use 40 or even 100 MHz. That will be great, iff the politicians find a way to make it practical. Today's licensing rules get in the way and it's time to change them. There's massive unused spectrum in most low density areas, far more than LTE knows how to handle. LTE is designed for up to 20 MHz, which limits the total capacity to 30-70 megabits per second. (More right by the transmitter, less if many are on the outskirts.) Germany's leading the way to near 100% coverage with LTE, with Vodafone already covering 1,000 small towns. The speeds go "up to 50 megabits" although few homes get that speed. The problem is the capacity. Even the 70 euro (~$100) service is capped at 30 gigabytes, not enough for families that want to watch much video. Chris Neisinger of Verizon intends to actively deploy LTE Advanced in 2013. We are not talking science fiction here but a near term product. The standard is complete and leading manufacturers are promising the base stations today they are shipping today will only require a software upgrade. Unfortunately, there's no easy way for a private company or local government to aggregate that bandwidth. AT&T, for example, has 5 ten megahertz carriers in New York City, using 50 megahertz. In most of upstate New York, they need only one or two carriers, leaving 30 megahertz totally unused. The last thing they want to do is lease at a fair rate their unused spectrum to anyone else that might in any way compete. http://bit.ly/pyamxp House Spectrum Bill: Must Carry (Yes), Rural Broadband Limits (Needs Revising) http://bit.ly/ruKGV2 Extending cable must-carry rules when stations give up spectrum for auction will make obtaining spectrum easier. Today's technology, especially switched digital video (SDV), means the cost is minimal. But one section potentially cripples the effective use of spectrum for rural broadband, likely significantly raises the future cost of wireless, and leads to very inefficient spectrum use. That's my plain reading of section 18, although the memo explaining the bill implies something totally different. The Republicans want to prohibit net neutrality and unbundling requirements, but the draft is so general a court might throw out crucial requirements. Germany will be close to 100% LTE coverage in 2013 when the U.S. will be far behind. Kurth in the last auction required the winning bidders first deploy to the unserved areas. Deutsche Telekom has connected 1,000 small towns previously not reached. The cost was remarkably little and far less than proposed USF subsidies. Vodafone explained that they found efficient ways to reach everywhere they were spending their own money. It was a requirement of their license, so their best engineers found affordable solutions. The bids in the auction were only slightly lower, and Germany will get almost 100% wireless coverage without future subsidies. Every regulator in the world watched Germany's success in rural areas, and that's the obvious choice in the U.S. as well. It will save many $billions. But the general prohibition on auction rules in the proposed bill might prevent the FCC requiring a buildout to most of the last 2-3%. That would be a mistake that would add $billions to the universal service requirement in future years. The second important step for rural broadband is to make sure all spectrum is efficiently used. That will become practical with second generation LTE Advanced, soon to be an exciting alternative in rural areas. LTE Advanced is crucial to good wireless broadband, I've learned from engineers at Verizon and the FCC. The current first generation LTE has severe capacity limits, demonstrated by low caps and high prices. That can improve, but the real breakthrough comes when LTE Advanced breaks the current barrier of 20 MHz. See Spectrum for LTE Advanced: Crucial for Rural Broadband. Putting together 40 MHz and even 100 MHz will allow raising the capacity 3-10 times. For the last 5%, that will bring wireless offerings much closer to what the rest of us take for granted today. This isn't science fiction. Verizon has announced deployments for 2013. Unlike crowded cities, there's plenty of spectrum in these extreme rural areas. But much of it belongs to Verizon and AT&T, who typically will have 40 MHz+ of spectrum they don't need for their own service in such low density areas. The last thing they want to do is release it to competitors for a dedicated high-capacity rural offering. The FCC needs creative rules, including use it or lose it on spectrum, is it is serious about reaching rural areas with affordable broadband. Bravo to Neil Fried and House colleagues for making the discussion draft public. I believe a good lawyer could use the language of the bill to go much further than the Committee intends. It's worth revisiting if we really care about rural broadband. I also believe that letting the two dominant companies buy more spectrum is a mistake. Canada and France are seeing mobile prices come down 15-20% because they reserved spectrum for competitors. Nearly every country except the U.S. has similar rules. Reply "subscribe" to be added, "un" to be dropped Volume 11, #31 July 17, 2011 |
