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Blair Levin's Bombshell: Universal Broadband $10B Total
Friday, 01 October 2010 03:31
Blair_Universal_PlanThat $350B figure people quote is about 30 times higher than the real cost of making broadband available to 100% of the U.S., the head of the U.S. Broadband Plan points out in an important paper. Here's how Blair explains what we'd get for that $10B and why it's so much lower than most people believe.
The Plan's desired result, as reflected in Blair's paper and the CITI Columbia report, would be:
1) ~90% of U.S. homes would be offered 50/20. As CITI reported, this 90% coverage was essentially guaranteed even if there were no broadband plan or government action.
2) ~5-8% of U.S. homes would be offered 4 megabits by the carriers without subsidy.
3) 2-5% of homes would require subsidies to get to the 4 megabit speed terrestrially.
4) < 1/2 of 1% of homes would be served by 5-10 megabit satellite because they would cost between $10K and $100K each to reach terrestrially.
and
5) Additional towers and backhaul would be provided to have wireless available to very close to 100% of the population. Almost all would be 4 megabits as well.
Last Updated on Friday, 01 October 2010 18:43
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Huawei 700 Megabits, 8 Wires, 400 Meters
Tuesday, 21 September 2010 16:58
Cioffi's_paperJohn Cioffi in 2004 gave an electrifying presentationshowing the path to a gigabit with four pair. They said it couldn't be done. Alcatel earlier this year demo'd 300 meg over two pair. Huawei is now demonstrating something darn close to Cioffi's gig, 700 meg over 1300 feet. We now routinely get 100 megabits over a single pair, which would be 400 megabits with simple bonding. Huawei has added DSM noise cancellation (vectoring) and some other tricks to get to 700 meg. From the press release, Huawei's SuperMIMO looks close to Cioffi's 2004 proposals. Here's Huawei's release.
SuperMIMO technology enables operators to build high-bandwidth, cost-effective, and future-proof broadband access networks

[Hong Kong, China, 21 September, 2010] Huawei, a leader in providing next-generation telecommunications network solutions for operators around the world, announced that it has showcased a 700Mbps DSL prototype in Hong Kong – the first of its kind in the world

Last Updated on Friday, 01 October 2010 22:06
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Rory and Tref Move Files Faster Than BT DSL
Thursday, 16 September 2010 21:13
pigeonsarego

Carrier pigeons Rory and Tref set off with several hundred megabytes on MicroSD cards "at 11.05 and clocked in at the loft 1hr 15 minutes later," blogs Trefor Davies, the fellow with glasses in the photo. "At that time the broadband upload to YouTube was only 24% complete, and then only after having to reset it as the connection was dropped. The distance according to Google maps was 75 miles." (Via Ars)

Mike Schuster suggests rural Britons might be "better off with a 2GB thumb drive and a long net on a stick."

Last Updated on Friday, 17 September 2010 00:23
 
Verizon-Vodafone: Who Buys Whom
Wednesday, 08 September 2010 00:44
Vodafone sold its holding in China Mobile for $6B. Press are speculating ivanthey might use the money to buy Verizon out of Verizon Wireless or Vivendi out of SFR, France's #2 mobile. Vodafone today has a $128B market cap and about $60B debt; Verizon $85B with $40B debt and $40B+ in deferred taxes, etc; Vivendi $23B with $15B debt.
    The raw numbers point to Vodafone as the surviving entity. Both Verizon and Vivendi assert if any deals go down they are buyers, not sellers. But both are struggling to cover their dividend with earnings. Verizon just cut wireline capex 24%. Vodafone is rumored to be searching for a new Chairman.
     In March, I wrote (below) that Ivan is getting closer to retirement every day. With a standard employment contract he would probably be tens of millions richer if he sold the company before he leaves. A few days after I reported that, Ivan said no way was he selling.
    Verizon is holding back on almost everything major except the LTE build while they decide who will succeed Ivan. Lowell McAdam from wireless is the outsiders pick, with CFO John Killian also in the game.
Last Updated on Wednesday, 08 September 2010 01:22
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Verizon Turns on ADSL2+ to 1/3
Monday, 30 August 2010 17:14
Adtran_5000Verizon has been installing ADSL2+ in most new equipment for years but not offering speeds above 6 megabits because only a small fraction of their 30M lines were covered. They now are offering 10-15 megabit down to about 4M customers for about $55 to about $70/month. Given that the majority of customers are beyond the 7,000 foot cutoffs for the 10-15 meg service, that means they have ADSL2+ to about a third of the network. Most of the rest are behind remote terminals or connected to DSLAMS 5-12 years old, neither of which are scheduled for volume upgrades.
      Experience from Britain, France and the UK has been that almost no one gets the 20 & 24 megabits possible with ADSL2+ and only a minority can even get 10 megabits down. DSM has improved things some, especially for the lines that were marginal for any given speed, and minor improvements in the chips keep improving performance. Current state of the art is that 15-25 megabits down is typical about half a mile from the DSLAM, less than 10 megabits from around a mile and a half. These are realistic averages, but there's an enormous difference from home to home and office to office. Your speed may well be different than the suggested averages. For example, I heard today of a customer at 5400 feet getting 21 megabits.
     Rob Pegoraro at the Washington Post tested the addresses of 13 friends and co-workers across the District and Alexandria at Verizon's site, and none came up as eligible for its fastest DSL. Six could get only the second-slowest tier of DSL, with downloads of 1.5 to 3 Mbps. Another six qualified for Verizon's 4- to 7-Mbps DSL. One could get FiOS, but none could get the new 10-15 megabit tiers. That may be a glitch, but overall fewer than 1 in 6 lines can get the higher speeds.
Last Updated on Tuesday, 31 August 2010 01:49
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Laughing Loudly at Lawyer & Lobbyist Lies
Friday, 13 August 2010 17:57
Lfalstaff_welles_posterying if it helps your client is expected of U.S. lawyers, codes of ethics be damned. The best in D.C. collect $2M/year because they can convince smart people that 2+2=5. That works exceptionally well in Washington, where today's enemy is tomorrow's ally. There's a code "never make it personal" that prevents plain speaking about obvious lies from another lobbyist. The spirit reminds me of frat boys who help each other getting coeds drunk and uninhibited. Meeting for drinks afterwards, they high-5 each other.
     Duplicity is on all sides of the D.C. debate. Prepping an advocate of neutrality on technology for an FCC hearing, I told him to take an error out of his statement. A few hours later, the word came back "our people tell me that's what will persuade the commissioners so I should leave it in." 
    Karl Bode at DSLR found the latest example. Rick Whitt of Google is no better and no worse than his longtime comrade in arms, Jim Cicconi.
Last Updated on Saturday, 14 August 2010 21:16
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Dado Chops 20% as ADSL Falters at Ikanos
Wednesday, 04 August 2010 15:41
ikanos_velocity_chipsetIkanos wrote down $12.9M of ADSL chips. Sales Q3 will be down 22% or more from $55.6M in Q2. 20% of employees are on the way out. Dado Banatao, legendary chip entrepreneur now in control of the company, has brought in new management from SiRF, another Tallwood VC portfolio company.
    Dado is now a VC looking for a way out of a troubled investment. He pointed out on the call that "VDSL is a growth segment." He sees the future of the company as highly differentiated next generation products. He expects revenue from bonded DSL in 2011, with both the U.S. and Asia interested. Dado claimed "Our vectoring is beautiful compared to our competition," but like then-CEO Mike Gulett he did not provide enough details to confirm that. Dado doesn't expect vectoring out of the lab until 2012.  
   New CFO Dennis Bencala is blunt."ADSL is a declining market. We have decided not to participate in RFPs that do not meet our requirement for margins." That's possibly true on the CO side, but most of the 5.8M new broadband customers in China needed ADSL modems.
Last Updated on Sunday, 08 August 2010 21:27
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Major Increase in U.S. Engineering Grad Schools
Tuesday, 28 September 2010 20:46
Grace_HopperFrom Bill Gates to Barack Obama, U.S. leaders bemoan that engineering and science education is falling behind and an increase is essential. So I was surprised at the NAS report that engineering Ph.D programs had grown by 25% and the number of faculty member almost doubled.
    I'm all for more support for research, but there is not a severe shortage of engineers in the U.S. Far too many engineers struggle to find jobs. That's especially true when every few years we have a wave of cutbacks. A very respected telecom engineer a few years couldn't find a position for nearly two years after cutbacks cost him a director's job. He switched to real estate because he couldn't find anything. A month or so ago, I discovered a chip engineer once responsible for $100M a year in revenue was struggling to find a position after his company also downsized.  
     If engineers could be confident of decent, secure jobs, there would be no shortage of students interested.
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The NAS report also found that women by 2006 were 22% of graduate students in engineering, up 9% in a decade. Ph.D's from "underrepresented minority groups" had doubled to 10%.
Last Updated on Friday, 01 October 2010 22:20
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498 million lines June, > 500M Today
Monday, 20 September 2010 04:25
Tom Starr, head of the Forum, has been there from the early 1990's setting DSL standards. He and many others at the Forum played crucial roles in getting from about 0 to 500M in 12 years. Sorry I wasn't at the Forum meeting in Hong Kong to raise a toast. The story in the data that China is growing so fast (>5M last quarter) that overall world grosth continues strong. Here's the announcement, which is based on Point-Topic data.

One in every five of the world's households now has fixed broadband, Point-Topic estimates and the Broadband Forum is celebrating in Hong Kong. That's 2.63% growth in the quarter and 11.99% in the last 12 months to end of Q2 2010. ...

* China – the powerhouse of global broadband in the 21st century so far was responsible for 43% of all net broadband lines added in Q2 2010 and performed far better than the same quarter in 2009 ('China' includes Mainland China, Hong Kong & Macau)
* In Western Europe many markets did better than the equivalent 2009 quarter.  Germany, the UK, Italy, Spain, the Netherlands, Poland and Turkey amongst others all reported strong numbers
* Central and South American markets have cooled to an extent but many are still reporting good quarterly growth (in the 5%-7% range)
* However North America, the USA and in particular Canada have significantly slowed and - in Canada's case - to levels not seen for a decade

Continuing the trend from previous quarterly figures, Asia increased its share of the overall broadband market by a further 1.2% in the year Q209 to Q210 and by 0.41% in the last quarter alone. The region now accounts for almost 41% of the total, with Europe in second place with 30% and the Americas showing 26%. China is the biggest individual contributor to the Asian growth adding 5,470,888 lines bringing its total to 120,591,488, over 24% of the 500,000,000 lines achieved in the early part of Q3. Elsewhere in the top 10 the real movement is from Russia and Brazil.
 
‘Hang up on Telstra’ - And Century-Qwest?
Thursday, 16 September 2010 21:07
Janelle_SaffinAustralian Member of Parliament Janelle Saffin and the local paper, the Daily Examiner, are leading a campaign to force Telstra not to close the Grafton call centre and fire 100 workers. They have 400 signatures of people ready to "Hang up on Telstra" and they are just getting started. Telstra, like nearly all incumbents, is hurting badly because people go wireless only, a fine alternative for the people of Grafton. Or they can simply use Skype or another VOIP provider over their broadband connection. I make all my calls from home on Skype, for about $8/month across the U.S. and Canada. 
      Compare the Australian response to the empty words of politicians in Denver. 1,400 headquarters jobs likely to fade away when Century takes over Qwest and transfers control to Louisiana. The FCC has solid legal footing to block the merger, but without political pressure it will slide through with mostly meaningless concessions. Post wants the deal which would take him to 20M subscribers. Post would approve job protections (or broadband buildouts, etc) if that was what it takes. 
      But Colorado politicians are essentially doing nothing in D.C. to prevent the expected massive job loss.
Last Updated on Friday, 17 September 2010 00:05
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Verizon: 24% Capex Decline
Tuesday, 07 September 2010 20:07
At Verizon "Capex declined 36% and capex/sales remained at record-low levels," a Merrill Lynch report read, but after adjusting for the Frontier spinoff I come to a 24% figure is more appropriate for this article. The $2B cut in Verizon wireline capex - and another $2B at AT&T - are a painful blow to those who want better networks.
    I've called Verizon's Larry Babbio a "hero" for building FiOS. Verizon's LTE network promises to be among the best in the world. But the sharp drop in Verizon and AT&T's capital spending is a huge issue for D.C. policy. It also puts the lie to the frequent D.C. claim that neutrality is likely to have a large effect on investment. The carriers won a major court victory on neutrality (the Comcast decision) and nonetheless have more than decimated investment.
   Verizon took $2.3B in pretax charges to get rid of 11,000 employees last quarter. $1.9B of that was charged to the wireline operating companies, suggesting nearly all the cutbacks were on the wireline side. AT&T not long ago eliminated an entire layer of management and essentially put the wireless side in charge. Verizon's likely goal is to have a single company that runs both wireless and the remaining wireline.
Last Updated on Monday, 20 September 2010 04:18
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Lantiq's Latest: 16 Channel VDSL, HD-speed 802.11, 2 Gigabit NP
Monday, 23 August 2010 02:25
lantiq_laptop_demoImran Hajimusa of Lantiq demo'd four TV streams going wirelessly across a large room to four HDTV's several months ago. They are now shipping the WAVE 300 in volume. Ulrich Huewels is confident it can support HD video. Lantiq tells me a large U.S. carrier will soon surprise by moving to wireless home networks. They've also doubled the density of their Vinax VDSL linecard chips and are sampling the two gigabit GRX gateway processor.

     Replacing wires has long been the grail for in-home networking. Vendors have been making promises for years, but field tests were not up to carrier grade. Carriers can't accept networks that only work for 95% of homes because the truck rolls to the other homes can be brutally expensive. They need close to 100% real world performance. I'm going to be skeptical until carriers prove the promises in the field, but the buzz for the new beam-forming chips is good.

samsung_TVs

  The new VINAX V3 supports 16 channels for the 50 meg VDSL2 Profile 17a and 8 channels for the 100/100 meg 30a. Power is 0.9W per channel. Bonding is supported and VINAX "is ready to support full System Vectoring, a VDSL2 enhancement that will reduce crosstalk."

Last Updated on Wednesday, 25 August 2010 19:16
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Bouygues Quadplay Sweeping France
Wednesday, 11 August 2010 12:01

25-35% of French broadband net adds are going to Bouygues/Ideo, ahead of stalwarts Free.fr and France Telecom. Last year Bouygues launched a Martin_bouygues45 euro ($60) Quadplay and it's become the hottest product in Europe. Bouygues, France's third wireless carrier, has come from nowhere to among the landline leaders with an offer of about a 25% discount. The land of the 30 euro triple play has become the land of the 40-60 euro quadplay, as SFR and France Telecom have now had to offer quad. 45 euro at Bouygues gets unlimited landline calls to 100 countries, "up to 20 meg" ADSL, 90 (not so popular) TV channels and 120 minutes of mobile calls.

     Frederic Jeanmaire of Merrill Lynch has put a buy on Bouygues. He acknowledges that mobile prices will be driven down by the entry of Xavier Niel and Free.fr in 2012, perhaps 10-25% more.

Last Updated on Tuesday, 17 August 2010 20:40
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China Q2: 5.81M, Not 5.5M
Tuesday, 03 August 2010 12:06
The 5.5M estimate in the last DSL Prime was based on April and May. Lee Ratliff of iSuppli writes the June numbers are in and a strong month raised the actual Chinese total to 5.81M.
     Lee raised his 2014 estimate to 223M because "2009 and the first half of 2010 have been white hot. There's a new trajectory on the curve." He remains concerned about the potential of a melt-down in China’s economy, but notes that kind of thing is almost impossible to forecast.
      Both he and I would very much appreciate data about the rapidly expanding cable industry in China. It's moving to digital, starting to add modems, and I expect it will be a powerful incentive for all companies to invest more and grow.
 
Zeugma Put Out of Business By Moore's Law
Friday, 24 September 2010 01:40
ZeugmaThe Internet isn't slowing down and crashing because of traffic demand, so Zeugma has failed despite a strong management team and $50M of capital. Kevin Walsh may be the best salesman in the business, but no one wanted to buy equipment whose main purpose is unnecessarily slowing down people's net connections. 
    Zeugma expected carriers to buy throttling gear because video traffic would otherwise overwhelm the network. Video is in fact growing rapidly, resulting in an increase in traffic per user of about 30%/year according to AT&T's John Stankey. But Moore's Law is driving bandwidth costs down at a similar 25-40% per year, so carriers are just as able to handle the load today as two or five years ago. Speeds worldwide are actually going up while capex is flat to down. Bandwidth costs on any large wired network are less than 3% of the price of the service. There's no crisis forcing people to dump their systems and buy Zeugma.
    
   
Last Updated on Friday, 24 September 2010 02:16
 
British Telecom: 40 megabits Same Price as 2 megabits
Sunday, 19 September 2010 02:10
bt_booth_ingyThe cost of delivering 40 megabits is almost exactly the same as the cost of delivering 2 megabits once the equipment is in place. The only steep difference is in cost is when additional construction is needed. Regardless of speed, it's one DSLAM port, one modem, and one wire. There's no cost reason to charge significantly different prices. The two or three times difference in price for high and low speeds on Verizon FiOS, for example, comes from weak competition, not ordinary economics. 
 
     British Telecom is rolling out millions of 10-40 megabit DSL street cabinets, just like AT&T U-Verse. Virgin cable is selling 100 meg DOCSIS 3.0 for $42, so BT decided they couldn't charge more. So their 40 meg customers are being charged the same price as their existing DSL customers, many of whom can only get 1-3 megabits and an upstream so slow it can't keep up with carrier pigeons. With weekend phone service included and the line charge, they are charging about 30£ ($45) whether 2 megabit or 40 megabit service and a 40 gig cap. Uncapped with unlimited landline calls is 10£ more.  

      "Almost exactly" is carefully chosen here. In the half of the UK that can't get cable, 30-80% of all homes subscribe. Interference in the binder group has become significant,
Last Updated on Sunday, 19 September 2010 02:56
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Calix Pays the Price for Occam
Thursday, 16 September 2010 14:17
Calix offered a 40% premium ($170M) to buy their primary rival for the U.S. independent telco market, potentially 20M+ homes. The two companies lead the market outside the Bells. Nikos Theodosopoulos of UBS is maintaining his buy on the combined company and expects earnings to go up next year. Adtran is the only active contender of size. Calix with the addition of Occam will be in a very strong market position.
    Occam's success is a story worth telling, and I hope people involved with the company provide material for me to post a better history. They were early on the switch to IP/Ethernet and always made good equipment. Well designed equipment wasn't enough to support many other companies in this business.
    Attending the Occam User's Group meeting in D.C., I met a slew of happy customers who believed Occam understood their needs. I believe the customer connection is why Occam was a survivor. So I'm glad to report Calix CEO Carl Russo tells me he sees the people at Occam as crucial to the growth of the combined company. "The talent is a key reason we bought the company," he tells me.
Last Updated on Sunday, 19 September 2010 02:04
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Dane Bringing High Speed, Low Price to California
Tuesday, 31 August 2010 12:18

Xavier Niel's 30 euro unlimited triple play took 5M customersSonic_network from France Telecom, transformed the European Internet, and made him a billionaire. Dane Jasper's Sonic.net is (finally) bringing the same "low price, maximum speed, high volume" model to California. Sonic.net is offering 100's of thousands of Californians "up to 20 megabits" + unlimited national phone service for $56, about the same price as Verizon is charging for the 10-15 megabit DSL service alone. Verizon charges about $75 for similar and AT&T probably $84, about 50% more.

      Unless you live far from the exchange, Sonic.net offers a better deal than any large U.S. carrier. Dane has some interesting ideas about TV to implement as soon as practical, although I think he's going to be very busy just filling orders for a while.

     The word came first from Paris. Benoit Felten, Europe's most interesting fiber analyst, wrote I should read his interview with Dane. Now that I've reported from the states, look for reporters to check this out and create a storm. I told Dane - who's been asking me for years whether the Free.fr model would work in the U.S. - that the low price, high volume model has proven itself time and again. He hasn't quite brought U.S. prices down to French levels, but this is the biggest move in that direction since Mike Powell's rules killed the last big CLEC in 2003-4.

Last Updated on Monday, 06 September 2010 19:46
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Telco Cloud Computing Shadowed by Project Failures
Sunday, 22 August 2010 23:15

Peter Hall of Ovum just released a report touting AT&T, BT and other nasa_cloudstelcos as natural leaders in cloud computing. Repeated failures on telco projects leave me dubious about such ventures. British Telecom has lost $billions on then-CEO Ben Verwayen's move into "Global Services" and in particular massive overruns and failures in the IT project for the National Health Service.

    Amy Schatz (WSJ) reports AT&T also hasn't been able to deliver on a big government contract. "A $2.8 billion Treasury Department project to update the agency's computer network and telecommunications, which has resulted in 45 data centers that can't support newer Internet technologies" has been targeted by OMB. AT&T is in the center of this one. In 2007, they promised to deliver "a secure enterprise network that will facilitate the convergence of data, voice and video technologies into a single network infrastructure that supports the efficient operation of applications and services across the Treasury's entire operating environment." (Release below)  They failed.

Last Updated on Thursday, 26 August 2010 17:52
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Worst U.S. Broadband Quarter Ever ~350,000
Wednesday, 11 August 2010 09:18

The numbers are clear. AT&T actually went negative. They are getting killed by cable were they haven't done their DSL upgrades (U-Verse), The 1/3rd cut in U-Verse spending in January, 2009 by now leaves them 3M homes behind their earlier plans. Cable did somewhat better, but was significantly down. The numbers are from Leichtman and do not include the smaller carriers.

Last Updated on Saturday, 14 August 2010 21:11
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"It’s hard to believe that basic things like capacitors are in such short supply"
Monday, 02 August 2010 10:50
Ikanos_chips_colorful.joglantiq_chipIt's hard to imagine that in a very weak world economy there's real demand that blows out the whole system. But shortages are widespread. A manager of a very large network emailed "Our biggest problem at the moment is getting equipment from our key vendors.  It’s hard to believe that basic things like capacitors are in such short supply." 
       Shortages often comes from self-fulfilling prophecy. When you fear a shortage, you naturally stock up to protect yourself. U.S. TV host Johnny Carson once made a joke about a toilet paper shortage on the East Coast and by the following afternoon there was one. Shoppers had bought up everything in the stores.
       Lots of datapoints suggest the shortage clears rapidly but currently TSMC, the world's largest foundry, is running 100%.
Last Updated on Monday, 02 August 2010 12:28
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