Template Tools
DSL Prime
$2B Tax Saving at AT&T, Verizon
Thursday, 21 April 2011 18:46

PenniesAT&T income tax expense went down 37% in Q1 2011 compared to the year before, from $2.863B to $1,802B. Verizon also saved $1B on a drop in income tax provision from $1,622B to $617B, 62%. At AT&T, the tax benefit was nearly a third of earnings and more than the entire growth in net. The same is true at Verizon. Neither reporters nor several wall street analysts referenced the tax savings, which were so large they change the story. 

     I'm not suggesting anything improper or special favors for either company. Each took $20B in losses on their pension funds, which could shelter a heck of a lot of income. This is just one more reason to tread lightly based on quarterly and even single year results.

Last Updated on Thursday, 21 April 2011 23:33
Alcatel Takes Vectoring to Luxembourg
Tuesday, 19 April 2011 15:59
The green bands in the picture are the results in the first Alcatel_luxreported field trial of vectoring for noise cancellation. The results - on loops less than 1,000 meters - are excellent and as predicted by theory. Line speed as much as doubled in the instances noise was the problem. Other lines, which ran faster in the first place, saw gains as little as 20%. The first chart is from Alcatel, working with P&T Luxembourg. This is not production equipment and the chips may still be FPGA's. It's an important proof of concept, while manufacturers compete to be the first with well-tested, production ready gear (?2013.)

   Vectored noise cancellation is the grail of DSL, promising to add 50-100% to the performance on most loops under 1,000 meters. There's little doubt the results will be excellent in new builds, such as the VDSL/FTTN being installed from cabinets at British Telecom. All the lines can be connected to a single line card or otherwise organized to efficiently vector.

    The harder problem is using vectoring to increase speeds in mixed deployments, which includes most of those already in existence. Ikanos is working on "node-scale" vectoring, which works across line cards and is promising. Further Alcatel data, this time working with Swisscom, showed excellent lab results (below) even in mixed binders more typical of existing builds. Results were good, even with 5 ADSL2 lines in the same binder.
Last Updated on Wednesday, 20 April 2011 04:16
"Honest Policy Wonks" Prevented Net Monopolies
Monday, 11 April 2011 22:26

Ray_Tomlinson“Honest policy wonks can play a very useful role,” Prof Shane Greenstein writes http://bit.ly/fA3w6G, explaining why the Internet wasn't monopolized when it went commercial. He goes on to make an important point, that the information superhighway metaphor is “misleading for policy aimed at economic growth through broadband.” Far too many “studies” have only looked at positive effects while ignoring the many negative ones. (Bookstores closing, teachers being laid off, newspapers dying.) Shane makes the provocative comment

“The Internet is everywhere but the economic payoff is not. Urban leadership dominates the geography of economics of the Internet, as it did computing." He adds "Physical capital is not evenly distributed. The Internet enhanced what was already working. Prior investment tended to concentrate in major cities. Skilled human capital abundant in cities. There are Marshallian externalities for IT specialists, who are more abundant in thick labor markets in major cities. The returns to investment depend on finding specialists." Therefore the "Returns to Internet investment are higher in cities. Especially during the first wave of investment."
Last Updated on Thursday, 30 June 2011 15:18
Nikos on Calix: Not Really a Sell
Tuesday, 05 April 2011 07:20
S___ happens. Nikos Theodosopoulos, probably the best equipment guy on Wall Street, did not issue a rare sell on Calix early this morning. His Tuesday morning email said just that, but clicking to the report itself shows his actual opinion is "Valuation: Maintain Buy Rating, Raising PT To $23 From $20." The report goes through several hands before it's sent, and somewhere along the line someone made a mistake. I'm sure they are scurrying at UBS to correct things but I wanted to put this out immediately to prevent confusion as the market opens.
        I'll follow up later today. Researching pointed me to a 58% increase in the Calix stock price in about four months. They've had some good news, but that's a remarkable run. I'll let Nikos tell professional investors whether to buy or sell this one; for anyone without a strong tolerance for losses, I wouldn't put money, long or short, in wireline telecom equipment. It's a tough and declining market, and there definitely will be losers as well as winners.
        Calix's greatest strength is satisfied customers. Thay've now bought Occam, which also has excellent customer relations. Those are strong positives, but it's a tough market for all and caution is indicated.
        1:30 Tuesday The stock fell over $25M by 11 in an up market. It since recovered some. The only other visible news was that Goldman raised their "12-month price target to $21 from $19 based on a target P/E multiple of 19X applied to our new FY12 EPS estimate of $1.11."(Benzinga.com) That pattern is consistent with people initially misunderstanding the UBS report and then learning better. Alternatively, it may be that investors were hoping for even more favorable news and were disappointed. Or it could just be the seemingly random noise that often dominates stock prices.

Last Updated on Tuesday, 05 April 2011 12:39
AT&T's Siegal: Our DSL Network Sucks. He's Lying, I Believe
Sunday, 13 March 2011 17:55
Randall does what Ed wouldn't dareMark Siegal, AT&T's top flack, hung up the phone on me when I said his comment to the Wall Street Journal was apparently a lie. It's prohibitively unlikely their DSL cap "is to ensure the quality of the customer experience" necessary to solve "congestion in certain points of the network and interfering with other people's access." I'm certain that far less than 1% of the time do AT&T DSL customers have any impact from congestion. I'm pretty confident it's less than 1/10th of 1% and probably less than 1/100th of 1%. My sources that wireline congestion on AT&T is minimal include statements from two CTOs of the company. Cheng, now a veteran in D.C., knew the comment was misleading at best. A mantra in D.C. is "wireline may not have congestion but wireless is different." It was Sunday and perhaps hard to factcheck, but he'll easily confirm the problem on Monday.

      AT&T has long maintained they have a more robust network and cable is the one with "bandwidth hog" problems. But Comcast's cap was 60% higher than AT&T and Comcast has said they will raise it. T has gone 13 years without caps on their DSL network because they said they didn't need them. Traffic growth is actually down slightly (Cisco, Odlyzko) so there's only one reason to impose caps now: their video service, U-Verse, has become a $5B business. They don't want people to be able to cut the cord and watch all their video over the net. 150 gigabytes is 40-80 hours of U-Verse quality TV, far less than the average U-Verse user watches.

    Mike Powell, conservative Republican deregulator, hit the ceiling when AT&T (then called SBC) wanted to limit user's video choices. Here's how I reported it then:

"SBC does not plan to give meaningful preference (in terms of bandwidth allocation) to any particular video service or video content provider. We don't plan to limit access from computers or give bandwidth preference to content."—Michael Coe, speaking for SBC on the record.

SBC's commitment to an open network, above, may prove the most important two sentences ever published in DSL Prime. This story goes beyond business and technology, to the heart of freedom of speech. Mike Powell's finest moment was when he affirmed, "consumers should have access to their choice of legal content." I pressed SBC for a clear statement, because the WSJ reported, "SBC and EchoStar plan to restrict the box's Internet access to just a few movie and music sites." Almar Latour, Andy Pasztor, and Peter Grant made the issue clear "Giving subscribers broad access to the Web could make it less likely they would pay extra for premium channels such as HBO and Showtime sold by Dish Network." The same Journal article infuriated the highest levels of the FCC, I learned at the PFF Aspen conference.
Last Updated on Monday, 21 March 2011 21:58
Ikanos Cuts Modem Power, Promises Vectoring
Friday, 04 March 2011 00:13
Ikanos_power_claimsBy going to 65 nanometer chips and improving algorithms, Ikanos' new chips for home gateways reduce power required significantly compared to their previous generation. European carriers are required to adhere to a "Code of Conduct" that reduces power usage. Ikanos's new generation also minimizes power when particular functions on the chip are not being called.  Samples are in customer hands today and volume available very soon.

     Vectoring, which in certain circumstances can double effective speed on shorter loops, is the hottest topic in DSL.  The new Ikanos chips were designed to be fully G.Vector compliant, but I am limiting my reporting anyone's claims of vectoring performance until independently confirmed in the field. Except in certain new builds - think Deutsche Telekom, Bell Canada and British Telecom - vectoring will take years to reach large volumes. However, I've been recommending anyone buying equipment from around now make sure the hardware will support vectoring when the time comes. It will be surprisingly cheap and already is in carriers' long range contingency plans. In particular, AT&T knows they will be facing 50 and 100 megabit DOCSIS with a system designed for 16 megabits and less. So far, U-Verse is holding its own surprisingly well. If cable starts pulling away, T's plan is DSL bonding + vectoring, bringing many lines to 50 meg and better.
Last Updated on Tuesday, 15 March 2011 00:16
1.5M March at China Telecom; 6M China Quarter
Wednesday, 20 April 2011 18:20
China_Telecom_posterIn March, China Telecom added 1,470,000 new broadband subscribers. The total for the quarter at China Telecom was 3.4M adds to 67M. U.S. net adds for the year 2010 were also about 3.4M. China Unicom/Netcom added 2.5M to 50M.
     An increasing percentage of broadband at both companies is fiber home and from the basement, but neither breaks out how much is DSL and how much fiber. GPON is now part of the mix, although EPON figures are probably still higher. Anyone who has data, please share.

Last Updated on Tuesday, 03 May 2011 02:56
DSL "Amplifier" Delivers 8 Meg 14,000 Feet
Thursday, 14 April 2011 19:34

Actelis_broadband_acceleratorsYour mileage will almost certainly differ, but one lucky home saw their speed go from 1 megabit downstream to 8 megabits. More typical is a doubling from perhaps 1 meg to perhaps 2 meg. The current unit is aimed ay low speeds beyond 12,000 feet. It's logical for Actelis to also offer units designed to bring 2-3 megabit lines up to the new FCC broadband definition of 4 megabits.

     Essentially, you plug in a small box around the middle of the line and let it do some magic. It's sized for 1, 2, 5, 25 or more lines and works off the phone line power. Once installed, it's designed to work indefinitely without maintenance. There's little opex after the initial installation and pole-climbing. The components are inexpensive, so the price of the unit itself can be very reasonable if purchased in large quantities.

    Actelis purchased the product IP of Phylogy’s Triplestream, line conditioner/amplifier which has been on the market since 2005. They tweaked the product to reduce interference and are re-launching it as the "Actelis Broadband Accelerator." "We've solved the spectral compatibility problem," Actelis' Eric Vallone tells me. "That's our secret sauce. Most customers getting 1 meg will see a 100% improvement."

    The earlier design has sold over 100,000 lines, many in South America. There are plenty of places this can be very helpful, even if it's not ideal everywhere. Earlier distributor Charles Industries has an excellent 15 page product brief with installation and troubleshooting advice. 

    The first version of this story said "The unit is polarity-sensitive. Don't plug it in backwards." But Vallone writes me the new model has minimized the problem.

Last Updated on Sunday, 17 April 2011 22:17
Telefonica Losing DSL Customers, DOCSIS Gaining in Spain
Wednesday, 06 April 2011 19:29

Spanish_broadband_sharesTelefonica totally dominated Spanish broadband until a few years ago but actually lost 23K DSL customers in February. Since January 2010, alternative carriers have added 667K while Telefonica gained only 138K. The cause is no mystery; the CMT finally revised the unbundling rules to give the competitors a better deal.

    In the first four months after launching 30 meg and 50 meg DOCSIS 4.0, Ono Cable signed up 128K subscribers (bandaancha.eu.) Some were upgrades of existing customers, but Ono has net adds of 65K since last September and Telefonica only 13K. Ono, like Numericable in France and Virgin in Britain, has severe financial constraints and is limited in how effectively it can compete.

       Spain is finally getting some fiber home. 9,000 signed up in January and February, to a total of 66K. Telefonica has made some extravagant promises to fiber the country, including all of Madrid in a few years. The actual build is much slower as Telefonica has diverted investment funds to the faster growing - and more competitive - markets in Latin America. 

       Before we praise CMT, the Spanish regulator, they need to explain why they want to raise the access charge by 7 percent, to €8.32 a month. (NYT) If regulators want fiber, the right move is obviously to reduce the return on copper. Matthias Kurth got that one right, cutting Germany's access charges.

    Update 14 April Telefonica presented to investors a dismal prospect for its business in Spain and up to 6,000 layoffs. That's one way to make the numbers work for a few years but only a temporary solution. 

Last Updated on Thursday, 14 April 2011 17:22
TI VDSL Class H Line Driver Claims 47% Power Savings
Wednesday, 16 March 2011 21:16
TI illustration
I've been hearing for a long time about the potential of Class H amplifiers to reduce power, so I'm reproducing below TI's announcement. I have not researched this and am not pretending this is an article from me rather than pr. However, since the product is already shipping and potentially important, I wanted to report it. In remote terminals such as AT&T U-Verse, power is a serious system limit. If this works as TI claims, it's an important advance. Readers - help me here with perspective, presumably off the record.
Last Updated on Thursday, 17 March 2011 13:08
Wireline Costs and Caps: A Few Facts
Sunday, 06 March 2011 20:27
one_dollarBandwidth costs in the U.S. are between 2% and 5% of what we pay for broadband, a very minor part of the cost. So when the Washington Post suggested "It's expensive to run a broadband network," as a legitimate reason to block Netflix and other video I thought to revisit the actual numbers. 
    Broadband is an extraordinarily profitable service. Top Wall Street analysts John Hodulik of UBS and Craig Moffett of Bernstein both report broadband margins of 90% based on official company filings. My own figure is more like a 75% margin because I allocate additional costs, but either implies running a broadband network is actually inexpensive in relation to the price charged. 
     Bandwidth isn't free. I startled my neutrality friends by writing in 2008 that Comcast's 250 gigabyte cap was fair. Three years later, Moore's Law has brought Comcast's costs down by half, so it's time for them to honor their promise to raise the cap. But even 250 gig is 10-15 hours a day of digital cable quality TV, 10 times more than even active Netflix customers.  Cable networks can inexpensively handle any likely load Netflix users will present. 
     Large European carriers have similar costs to the Americans. Smaller ones, without their own fiber backbone, are sometimes squeezed. Most of Europe has significantly more competition than the U.S. duopoly, including 4-5 carriers in most of France and Britain. The prices therefore lower, often by 30-50%, so margins are not as extreme. Broadband is a highly profitable service at almost all large telcos and cablecos.
    High backhaul and bandwidth costs in some parts of the world are important issues. Africa is just getting fiber connectivity and prices still have a long way to fall. Fewer than 10% of U.S. broadband provided by smaller and rural carriers but some of those face monopoly-like backhaul pricing. Several times at the U.S. broadband workshops carriers reported paying 10 and even 20 times more for bandwidth in some rural areas. The plan recommended solving those problems but so far the FCC hasn't taken action.
Here are some numbers:
2 cents to 5 cents per gigabyte. The actual bandwidth cost to a large carrier like Time Warner or AT&T, depending on how you do the accounting.
$1/month/customer. The industry standard figure for the cost of bandwidth. Fortunately, Moore's Law has been bringing down the cost per bit of bandwidth at 25-40% per year, allowing the industry to thrive as video drives usage. When fiber is in place, the main cost for additional bandwidth is upgrading routers, switches, wave division multiplexers and the like. They've become much cheaper at a predictable rate. Result: the cost per customer of bandwidth has been about $1/month since 2004 or so. Since broadband prices are $20-$50, that's 2-5% of the price charged.
Last Updated on Wednesday, 16 March 2011 21:43
Bellheads 22-23 March Best US Telco Event of the Year
Tuesday, 01 March 2011 20:34
Some people thought Matt Bross of BT was a madman for wanting to "turn off the phone network" and convert everything to IP as quickly as possible for huge savings. I became a believer at SUPERCOMM years back when Bill Smith of BellSouth led a discussion of four Bell CTOs that concluded Bross 21st Century Network was the way to go. Ross Ireland of AT&T agreed and was plainly unhappy that his CFO Randall was holding back the funding that would need.
    All this was at the special once a year event where the  top engineers of the Bells would come together for a public discussion. The official speeches came from the pr department, covered policy and were predictably boring. But when the engineers started answering questions and exchanging ideas sparks would fly, especially in the informal press conference that traditionally followed.
red_book      ATIS at CTIA Orlando is reviving the tradition.John Donovan, AT&T CTO, is joined by his peers from Qwest, Verizon, Clearwire, Spring, T-Mobile, Metro PCS, Telus, and more. Matt Bross is back, now CTO of Huawei. Key suppliers like Bob McIntyre of Cisco join in. I learn from people like this who solve problems every day.
     Where do correct ideas come from? Social practice.
Last Updated on Saturday, 05 March 2011 09:59
More Articles...
<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >>

Page 5 of 11