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TNO: Top DSL Conference Coming to Dutch Beach
Tuesday, 14 May 2013 17:38

Scheveningen Scheveningen, 17-19 June. With the DSL Tsunami sweeping Europe, it's a great time for all the European leaders to come together. Europe is committed to 35M lines of vectored DSL in the next three years. Very few lines have been actually deployed.

Last Updated on Friday, 07 June 2013 04:33
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In DC: Are There Any New Ideas For Broadband?
Tuesday, 23 April 2013 13:47

ISOC DC forum Friday April 26. Livestreamed from 9 a.m. D.C. time. https://new.livestream.com/internetsociety/dc-broadband I hate boring events where advocates repeat things often said before. I’m moderating an Internet Society panel Friday and am reaching out for ideas that Washington needs to hear. Jodie Griffin is a public interest lawyer and the other three panelists are pros bringing decades of experience. Presentations will be short and at least 3/4ths of the time will be devoted to comments and questions.

   So I’ve asked the panelists for ideas on three topics. I’d welcome your questions as well. Come, watch the webcast, or email me questions in advance.

   Putting more spectrum to use we all agree is worthwhile. How to do it. One suggestion is using a small fraction of home WiFi for others to reduce the demand on cell sites. Fon, Deutsche Telekom, Free in France and now Google are implementing a second ID on WiFi routers. http://bit.ly/11u6CqS

   Is it practical to have more wireline competition? Can we bring to the U.S. what works elsewhere? DC talk is usually about “incentives” but the ones suggested have generally failed miserably at encouraging competition. What might work.

   What are innovative solutions for the last 5-10% who don't have a clear path to 100 meg wired and 20 meg wireless?  I'll put the German auction with requirements to first reach unserved on the table, incredibly successful.

  What are some ideas new to most in DC?

Panelist Robert C. Atkinson of Columbia University wrote in 2009:  

By 2013‐4, broadband service  providers expect to be able to serve about 95% of U.S. homes with at least a low speed of wired  broadband service and they expect to offer to about 90% of homes advertised speeds of 50 mbps  downstream. Service providers expect to provide many homes with access to these higher speeds by  2011‐2012 Wireless broadband service providers expect to offer wireless access at advertised speeds  ranging up to 12 mbps downstream...

    A second conclusion that can be drawn is that a significant number of U.S. homes, perhaps five to ten  million (which represent 4.5 to 9 percent of households), will have significantly inferior choices.” CITI Broadband in America Report for the National Broadband Plan

   See you there.

Last Updated on Friday, 26 April 2013 02:22
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Vectored DSL - How it works
Thursday, 04 April 2013 16:03

Superior Essex 2 pair cableCancelling noise can double short loop speeds. Telco networks are generally built with 25 lines joined together in a binder like the picture. Each active wire generates crosstalk "noise" which interferes with the lines around it, reducing their speed. Cancel the noise and the lines can run faster. In practice, speed doubles to 70-100 meg down, 10-40 meg up, over short loops up to about 300 meters. Up to about 100 meters, a related standard G.fast, promises 200+ megabits. Bond two pair and you inexpensively (less than $125/home) double the speed again.

   As loops get longer, the crosstalk noise becomes less of a factor and the speed is limited more by the resistance of the copper wire itself and other kinds of noise, like AM radio. Over about 1,000 meters, vectoring has almost no impact. So vectoring matters if and only if you have a box fairly close to the customer. These "neighborhood nodes" can be small; you can connect 48 homes with a "pizza box" DSLAM.

   The boxes themselves are usually connected by fiber to the exchange. "Fiber" is a magic word and a brilliant AT&T lobbyist came up with the name "fiber to the node," FTTN. It worked; AT&T's node DSL build, U-Verse, got major government concessions.

   Stanford Prefessor John Cioffi and his former student George Ginis developed the idea back in 2002. The name comes from the vector mathematics used to calculate the noise cancellation. They couldn't demonstrate at the time because the calculations for 25 pairs running at 100 megabits were impractical.

   As Moore's Law improved chip performance, demonstration systems from ECI and Lantiq began showing in 2009. By 2011, Alcatel demonstrated production-oriented systems that were tested in 2011-2012 at carriers including Swisscom and Belgacom. The results were outstanding, confirming the 70-100 meg speeds. European carriers including Deutsche Telekom and Telecom Italia abandoned fiber plans and switched to the much cheaper vectored DSL. 

Last Updated on Saturday, 06 April 2013 12:55
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JG Rejects AT&T's Proposal to Shut Down Phones in ~10% of the U.S.
Tuesday, 19 March 2013 20:11

Even the last 1% need a connection. Jules is getting feisty as he prepares to leave. Before Congress, he rejected the Bells call to switch $1B/year in CAF/USF from extending broadband to paying the telcos for what they built a decade ago. Inaugurating the FCC’s Technology Transitions Policy Task Force March 18th, he proclaimed "The concept of universal access to modern communications is at the heart of our consumer mission and our founding statute."

    AT&T wants to doom millions of Americans to satellite phone only, over something like 20% of the country. Those last 1% of homes are spread over distances that are expensive to serve. AT&T also wants to cut landlines to well over half U.S. territory (25% of homes) even though most of those lines are (modestly) profitable. They know many of those homes will switch to AT&T LTE with high profit margins. Legendary lobbyist Jim Cicconi has done a brilliant job of incorporating AT&T's shutdown desires in the "IP transition" discussion even though it has nothing to do with the topic. Check 20% of U.S.: Satellite or Leave http://bit.ly/Nhmvtq for the details. Of course, AT&T also wants to get rid consumer protection and competition.

Running a telco on IP is much cheaper than the older "circuit-switched" network. Free in France proved that first and distinguished U.S. engineers like the CTO of BellSouth recognized this a decade ago. So every substantial network is converting to IP. Deutsche Telekom intends to convert entirely by 2016 and isn't asking for concessions. CTO Bruno Jacobfeuerborn promises to "leave no customers out in the cold, that's for sure." DT landline network is almost the size of AT&T's. Macedonian Telekom (controlled by DT) is going all-IP by the end of 2013.

JG called also for primacy of protecting competition, consumer protection and public safety needs. (Full speech below) That's totally different from AT&T's proposal, which wants IP networks nearly totally de-regulated. A parade of AT&T advocates (many paid) are shouting in applause, even though none of the demands happen to be related to the shift to IP networks.

The four FCC points - universal service, competition, consumer protection and public safety - are obviously drawn from Harold Feld's "Five Fundamentals of the Future Phone Network."

Last Updated on Wednesday, 20 March 2013 04:08
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Another ISP Hits the Dust: Telefónica Dumps 500,000 Customers at O2 Britain
Friday, 01 March 2013 20:36

Engulf & Devour

~$700 as Britain falls to 3 1/2 broadband players 4 companies - BT with 6+M Sky, Talktalk & Virgin with 4+M - control 20M of Britain’s 22M broadband lines as smaller ISPs can’t compete and get taken over. Telefónica found that even 500,000 customers were not enough to support the necessary national backhaul market to survive. Sky outbid BT, offering £200M for an operation that on its own was losing money. Except for the EE (700K), no one else has even 100,000 subscribers. AOL, Tiscali, Be Broadband, Pipex, Demon and others are gone. 

   Prices have been going up as companies disappear. Previously, Britain saw prices fall by perhaps a third. Structural separation of BT inspired nearly a dozen companies aggressively to chase retail customers. British fees are still reasonable. Sky charges $37 for 5-15 megabit down + a phone line, compared to $60-80 at AT&T U-Verse or Verizon FiOS.

   France has seen a similar decline. FT, Free, SFR, Bouygues are four intense telco players, but Deutsche Telecom, Telecom Italia Alice and local companies like Nine and Kaptech are gone. The 36 euro triple play is still a great bargain, but it was 30 euro not long ago. Germany and Holland are headed in the same direction.

Neelie Kroes’ EU plan to reduce regulation is very badly timed.

Last Updated on Friday, 01 March 2013 20:54
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Report: Unpaid Leave at Alcatel-Shanghai Bell
Thursday, 14 February 2013 17:00

ASB_eventsAlcatel “continued low activity in China.” Chinese publication OFWeek reports that ASB employees returning from the Spring Festival will be required to take between 2 and 5 days of “unpaid leave” each month for the next six months. This is unconfirmed, with an Alcatel spokesman telling me they had no news like this to report. With the Chinese holiday, they couldn’t check further.

Cutbacks at Shanghai Bell are consistent with this comment from Alcatel last week:

From a geographic standpoint, also adjusted for constant currency and compared to the year ago period, North America posted a 10% growth rate. Mixed trends in Asia Pacific resulted in a low double-digit decline, traction in Japan being offset by continued low activity in China. Cautious spending persisted in Europe, which also declined at a low double-digit rate. Rest of world was resilient, driven by continuous traction in Brazil and by Middle East and Africa, which returned back to growth after several quarters of decline.

ASB is majority owned by Alcatel but with a major stake held by local government. It traditionally competes effectively with Huawei and ZTE for Chinese contracts. The big Chinese telcos have been holding capex flat as landlines decline. They continue to demand, and receive, the best prices in the world for their equipment. Fiber home gear in China goes for less than $100/home. Margins in China are so limited that ZTE reported a major loss.

   ASB makes much of the gear Alcatel sells worldwide and sources from China many other items that ship with an Alcatel label. They do a very large share of the Alcatel engineering. AT&T U-Verse staffers were surprised how much of their support was coming from engineers in Chengdu. Alcatel has shifted so much to China they can no longer claim that Huawei is beating them because of lower Chinese labor costs.

   There’s no public disclosure I can find of ASB’s finances. While top management is French, it operates very independently. A Communist party official plays a major role in management. The profitability of ASB is heavily determined by the transfer pricing to Alcatel Paris. The relation of Paris to China has long been difficult to research; apparently Paris doesn’t want investors to look into the finances.

Sources: The “unpaid leave” story comes from http://fiber.ofweek.com/2013-02/ART-210007-8120-28666967.html , who in turn credits Sina Tech but I couldn’t find the original. (Google Translate keeps getting better but it’s still a little awkward to read the Chinese press.) I generally would not pick up a story like this with confirmation, but OFWeek has enough details it feels like more than a rumor.

Last Updated on Thursday, 14 February 2013 17:20
 
Germany Confirms 24M Vectored Lines
Thursday, 07 February 2013 19:14

 ~ 5M for Swisscom + Fastweb, 7M for Telecom Italia, 2M Brazil.  Deutsche Telekom has 24M lines competing with cable, about half of which are ADSL and half earlier version of VDSL. Until now, DT has said contradictory things about whether they would upgrade all of these lines or just the older ADSL lines. In the submission below, DT is explicit they will use new technology - vectoring - for all 24M over the next four years. Separately, Swisscom http://bit.ly/XCzNmm and their subsidiary Fastweb http://bit.ly/WR6tug have announced they are moving forward quickly.

    Telecom Italia has also decided to abandon fiber home. Franco Bernabè told investors their fiber/DSL "will cover well above 30% of the household, reaching more than 125 cities. More than 7.5 million customers could be served at the end of 2015." TI's Brazilian subsidiary will also deploy 2M fiber/DSL lines. This is particularly surprising because TI Brazil has been an exclusively mobile network. They have found that fiber/DSL is so inexpensive to deploy in selected neighborhoods they are adding landlines.

    The announcement below is part of the elaborate performance art that Germany puts forth as part of the BNetzA decision process and should be considered "politician's truth." One probable error that matters is the claim below "However, in order to cancel noise, the operator must have control over all lines at the cable distribution box." Nearly every engineer reviewing the issue believes it possible for DSLAMs - including those from different operators - to communicate and both deliver vectoring. This is unproven in any field trials, however, and management techniques to allow multiple DSLAMs also are untested. Interoperability testing and standards testing would seem a high priority but vendors refuse to agree. 

    The 100+ pages of BNetzA submissions I've read on vectored DSL include so many unlikely comments they are almost funny, but that's another story. 

 

Here's the DT release confirming the 24M. 

Last Updated on Friday, 15 February 2013 01:05
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Lantiq Sampling 3x3 MIMO for Faster VDSL Gateways
Monday, 13 May 2013 11:49

Supporting existing VDSL chip, extending bonding. Imran Hajimusa of Lantiq had a great demo of 4 HD channels streaming over WiFi a while back. They are now sampling and about to ship this improved WiFi, 3x3 MIMO 802.11n, a technology they purchased from Metalink. They've also upgraded their bonding capacity, which now can use VDSL profiles 17 & 30 for two line download speeds of 150-200 megabits over short loops. Their previous VDSL bonding could only do up to profile 8, for speeds under 100 megabits.  

  Telcos are screaming for reliable TV grade WiFi. I've heard claims as many as 50% of service calls are due to WiFi rather than DSL problems. When you carry your iPad to the bedroom upstairs, you don't want to lose the football game stream. Dirk Wieberneit of Lantiq reports raw WiFi speeds normally are fine, but don't often reach far enough into the home. The 3 antennas of their MIMO chips allow further reach with beamforming 

Last Updated on Tuesday, 21 May 2013 02:13
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Dan Artusi: Vectored Chips Shipping this Summer in Volume from Lantiq
Tuesday, 23 April 2013 13:15

After restructuring, progress. Lantiq wowed the industry several years with the first public demonstrations of vectoring, but Broadcom has beaten them to market with production chips. Similarly, their WiFi 3x3 MIMO 802.11n chips, acquired from Metalink, had impressive demonstrations delivering four streams of video but haven’t made it to market. Artusi tells me both are now ready to go.

 

   Artusi has been publicly silent since he took over from Christian Wolff last year, waiting to be ready with product. He came with a mandate from owners Golden Gate Capital to rein in costs and has eliminated both facilities and some staff positions.

 

  “Munich has cold winters compared to Arizona, but I’m liking the job” Artusi tells me. “It’s been quite a challenge to create a lean and mean company, but that’s essential to succeed as a fabless chipmaker today.” Lantiq spun out of Infineon, itself once a giant division of Siemens.  “Carveouts are always challenging because of baggage from the prior owner. It’s very costly to restructure, especially in Europe. Golden Gate has given me the resources to reduce net debt to zero.”

 

  Artusi is shifting the company focus from the chips themselves to becoming “a broadband company.” Lantiq has a large portfolio of packet processing software and firmwire Dan is leveraging into other markets. They have a close relationship with Altair Semi for LTE gateways for fixed wireless, likely soon a massive growth market in Africa, India and Indonesia. They are also working with Qualcomm on 802.11ac, the rapidly emerging next WiFI standard.

 

  Lantiq is also on track with a chip for the potentially popular “fiber to the distribution point,” a way to raise DSL speeds well over 200 megabits. Locally powered nodes with reach of perhaps 100 meters are tempting to carriers like Swisscom, although the market remains unproven.

 

  Lantiq's a private company, not required to release financial details. The below Standard and Poor's release has data I otherwise haven't been able to obtain. I missed it back in December and Artusi has added more details above.

Overview

-- German semiconductor designer Lantiq Beteiligungs-GmbH & Co. KG and its lenders have recently signed an amendment to the credit agreement for its outstanding loans.

-- Furthermore, Lantiq's owner, private equity company Golden Gate Capital, has supported the group with an additional $81 million in capital in the current quarter.

Last Updated on Saturday, 18 May 2013 01:33
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Galvin of BT: Britain’s Going Vectored Late 2013
Thursday, 28 March 2013 04:21

OFCOM needs to sort out competition issues. BT is passing 19M premises with upgraded connections, nearly all fiber/VDSL. Josh Taylor now reports they will begin vectoring later this year. BT’s Mike Galvin tells him “"We see vectoring as one of the cornerstone technologies going forward.” http://zd.net/16ZOA2T

    BT uses ECI and Huawei gear, both of whom made early commitments to vector. ECI told me in 2012 their equipment was “vector-ready” although customers hadn’t deployed the service yet. Huawei has won orders for several million vectored lines from Swisscom and Fastweb, also not yet in production.

   Britain has some of the most active retail competition in the world, something Ed Richards at OFCOM doesn’t want to compromise. Vectoring has been delayed although they recently received presentations on the subject. ASSIA presented the possibility of “multi-tenant” management of a vectored deployment, a constructive step if full unbundling proves impractical. “Bitstream unbundling” is technically easy and the cheapest way to go, but the incumbents have been imposing upside-down pricing that defeats the point of a high speed network.

   DSL local gear is generally non-blocking, which means the cost to deliver the full speed of the line is literally the same as the cost of a throttled connection. So a cost based unbundled price would be the same (? $20) whether the customer takes 7 meg or 70 meg service. Backhaul and transit add only a modest additional cost to competitors with enough scale to have their own fiber. Sky and TalkTalk have their own fiber to exchanges serving over 70% of the British population. Either could offer full speed for say $35, undercutting BT’s plan to charge much more for the higher speeds.

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Genachowski: FCC Will Investigate AT&T, Verizon Price Increases
Wednesday, 13 March 2013 22:32

BlumenthalVerizon hikes ~20%, 55% higher than 2007. Pressed into a corner by Connecticut Senator Blumenthal, Jules promised to work with the Senator on these non-competitive rate increases. JG may be offering just a “politician’s promise,” of course, but Blumenthal as Connecticut Attorney General proved he can make things happen.

   Karl Bode at DSL Reports broke the story of a $5 Verizon increase on existing DSL customers. http://bit.ly/Z0NbB9, most of whom were paying $20-35. That’s 15% to 25%. New customers at Verizon are in even worse shape. After the introductory period, Verizon now wants ~$50 + local taxes for one meg, adding a requirement you take a phone package. It’s at least $60/month for anything faster than one meg. For FiOS, the cheapest service they offer is an amazing $84.95 - and in some FiOS areas they won't sell DSL any more. Bode also reports AT&T increases that appear to be 10-15% but details vary. http://bit.ly/ZB8sSR Neither Cecilia Kang at WashPo nor any other DC reporter has yet picked up the AT&T story, so DSLR was almost certainly the inspiration for the question.

  Here in New York, minimum broadband costs $50 to $85 from Verizon and $55 from Cablevision, although Time Warner does have a 1 meg data service for $30 in some areas. There are some great deals for the first 12 months, but after that the $130-160/month triple play is the main offering. That compares to $37 for 5-15 megabit down + a phone line at Sky in the UK or less than $50 for triple play at any of the five largest French carriers.

  The Senator challenged JG. “AT&T announced a rate hike on their DSL service. This comes just a week after Verizon announced an almost identical rate hike. Both of them trouble me. We ought to pay closer attention.” JG tried to change the subject, saying “We’ve seen much better trends in mobile competition over the last couple of years than we’ve seen before.” With the Senator glaring, he added “I’m troubled by rate increases that aren’t based on competitive factors.” Then Jules said he’d work with Blumenthal investigating prices.

   Julius claims his greatest achievement is “broadband, broadband, broadband.” Deployment has almost stopped on his watch, adding only one percentage point. When Obama took over at the beginning of 2009 telco coverage was 84% and cable 96%, by FCC figures. http://fcc.us/ZBfd7h The latest figures are 85% and 97%, despite $billions in broadband stimulus and major merger promises by several carriers. http://bit.ly/WIHJsz Prices have gone up 10-20% on the cable side, even more on the telco side.

   Legacy?

Last Updated on Friday, 15 March 2013 14:01
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Geddes: Your Network May be Worse Than You Think
Friday, 22 February 2013 13:07

Network skeptics get a hearing. Martin Geddes is making waves with the contentions that many networks have unidentified problems. Most of us assume that networks with consistent speed and reasonable latency are fine but that's not always true. "Bufferbloat" can occur when buffered packets get out of sync with TCP-IP acknowledgement and flow control. http://bit.ly/XQW4No There's related work by John Day at http://rina.tssg.org/docs/JohnDay-LostLayer120306.pdf

Broadband networks in my experience tend to be excellent with congestion problems few on major networks. Martin sees occasional exceptions and suggests a better way to manage networks is to measure and report congestion problems and delays. He writes about "quality attenuation" and sent me this description of the issue.

"There are two ways of thinking about networks, depending on which side of the mirror you stand. The dominant framing is that networks do something positive: they deliver packets. The more packets they deliver, the better. What you need in order to do this is to have lots of 'bandwidth'.

The alternative (and paradoxical) framing is to see them as machines that do something negative: they cause loss and delay to data in transmission. In this model, the job of a network is to supply 'fresh information' between computation processes, and ensure that each flow of information is not delivered with more mouldy delay and rotten loss than the process can tolerate.

This 'freshness' is about quality rather than bandwidth. What networks do is to impair flows, i.e. to create and allocate quality attenuation. It turns out that this model is far more congruent with the reality of networks than the bandwidth model.

Last Updated on Friday, 22 February 2013 15:08
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Big Vector Deployments Delayed Until 2014
Thursday, 14 February 2013 03:16
Early vector resultsThe vendors were optimistic about when the key problems would be solved. Belgacom was the first to say they are slowing down with little beyond trials until 2014. The Swisscom announcement speaks of q$ 2013 but will probably start slowly. Deutsche Telekom’s Philipp Blank emails “We would like to start the deployment of vectoring already this year,” but their regulatory filing suggests the volume deployment begins 2014.

Belgium intends to add vectoring piecemeal while leaving many older lines in place. The vectoring standard was designed to make that possible but effective management tools need to be developed. Belgacom was the first to receive regulator permission to vector because they didn’t have to resolve the problems of unbundling. There are very few unbundled lines in the country. They intend to spend 2013 continuing trials and making sure everything will run smoothly for 2014.

Alcatel had production equipment for the field in early 2012. The early trials at Swisscom, Belgacom and in the labs at nearly all the major telcos were very encouraging. By September 2012, the DSL Tsunami was apparent http://bit.ly/U79yWR. Deutsche Telecom and many others were convinced vectored DSL was the way to go because it was so much cheaper than fiber.

The delay may have been inevitable but is very disappointing.

 
Kinnucan of Broadband Research Jailed Four Years for Insider Trading
Wednesday, 16 January 2013 22:22

KinnucanThreatening the prosecutor didn’t help. John Kinnucan would pay employees at companies like Flextronics and F5 Networks $25,000 for inside information on sales and earnings and promptly pass the information to hedge fund clients. His basic defense was “everybody’s doing it so why are you picking on me.” That’s partly true, of course. The hedge fund business would be very small without inside information, because (almost) no one can consistently beat 2 and 20 without it.

Kinnucan made it tough on himself when he refused to wear a wire and implicate his clients, especially when his refusal made it to the WSJ. Then he ”made nearly 25 threatening telephone calls to prosecutors and agents responsible for the investigation of his unlawful activities. In these telephone calls, Kinnucan made repeated references to genocide, sexual and other forms of violence, and threatened physical harm to one of the prosecutors handling this matter.” His chances in court were dim because he couldn’t afford a private lawyer. He couldn’t even make bail, so he’s been held in jail. Good reporting by Chad Bray and Susan Pulliam http://on.wsj.com/V4A7vR

    A lot of Wall Street have made me their pet geek so I’ve seen a lot. The successful on the street almost all are very smart and hardworking. Most also do “whatever is necessary” to keep their position.

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60 Down, 18 Up as VDSL comes to France
Wednesday, 08 May 2013 17:06

LescauxMany lines do not significantly improve. As predicted, ARCEP is allowing French networks to upgrade to VDSL2. Free.fr has been using VDSL chips in DSLAMs and the Freebox for a while, so instantly could go into testing. One lucky customer tested  “Gross rate: 68420 kbp/s - 17852 kbp/s.” (Freenews) A second customer at 1500 meters actually saw a (small) drop in speed. By ARCEP estimate, only a modest minority of customers will benefit. Update 5/22 FT's Yves Parfait confirms it will be FTTH to 60% of France by 2020. Via CommDay

Last Updated on Tuesday, 21 May 2013 16:52
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Ikanos: Our 192 Port Vector VDSL Chips are in Customer Tests
Thursday, 04 April 2013 22:09

IkanosBuilds custom chassis to show off 100 meg on every port. “Customers probably will delay volume deployments until late in 2014. Our chip is production ready and will be available well before that,” Kourosh Amiri of Ikanos tells me. It’s an impressive chip, designed for node scale vectoring of 384 ports. It does full cancellation of noise in all tones, which Ikanos claims is substantially more effective than the competition’s “partial cancellation.” A ten gigabit serdes is built in to support the high speed interconnect needed for this kind of performance.  

    (The picture shows Ikanos' reference chassis supporting 384 ports at 100 megabits.)

    Contrary to Deutsche Telekom’s claims that it’s “impossible” to unbundle vectored VDSL, Ikanos is perfectly comfortable with two ISPs sharing the binder. “As long as the two DSLAMs are within about 50 meters, we can communicate between them and cancel noise on all lines,” adds Amiri. Telecom Italia and Fastweb have an official memorandum of understanding they will do just that. http://bit.ly/WR6tug Each is passing several million homes with fiber/DSL, often in the same node. Huawei, #2 DSLAM vendor to Alcatel, is understood to have the contract and presumably will choose Ikanos chips.

   Ikanos is serious about interoperability. “If you manufacture VDSL chips, bring a board to our labs and we’ll be glad to test with you.” They claim they are working closely with their lead competitor and expect few problems in interop.

   Promises, promises I’ve been hearing from everyone in VDSL for a decade, so I’ll remain skeptical of everyone’s claims until they are proven in the field.

Last Updated on Friday, 05 April 2013 17:41
 
US 2012: 4% Broadband Growth
Wednesday, 20 March 2013 23:22

 Q4 Cable +536K Telcos +72K. In the slow growing U.S. market, cable now has ~58%, a small change from the 55% five years ago. Cable is far ahead in net adds, clobbering telcos in ~30M homes with DSL that hasn't been upgraded. Telco price increases also hurt, with Verizon raising the minimum price of DSL to ~$50 and FiOS to $85. Upgraded DSL - 30M U-Verse, 7M CenturyQwest - is doing just fine so far, with few consumers willing to pay the high prices for more than 10-15 megabits. The U.S. market has three sectors. Fiber, mostly Verizon FiOS, doing well, partly aided by new customer deals advertised as lower as $85. Cablevision is losing to FiOS. 30-40M homes of older DSL, generally 3-6 megabits, is getting killed. About 40M homes - upgraded DSL/FTTN - is actually doing fine, something DC policymakers generally don't realize. Upgraded DSL, at least so far, is doing fine against cable in most market. Telus and Bell Canada most quarters beat Rogers and Shaw; British Telecom is generally beating Virginmedia. 

    Actual figures for the year include cable +2.4M to 46.8M. Telcos added a measly 300K to 34.6M. Comcast added 1.2M for the year, with over 100,000 poor families benefiting from the $10 offer. AT&T actually went -37K. Batya Levi of UBS actually predicted this decline. In Q4, Comcast added 342K, TWC 89K and  Charter 61K. AT&T was +2K as they began to resume U-Verse build and Verizon +72K. Windstream was - 2K despite new areas covered with stimulus money. Windstream and Frontier have generally not upgraded DSL and poor broadband sales will likely drag on the stock going forward. 

   All these figures are from Leichtman Research, whose data I have checked in the past with company financial filings and found reliable. 5-10% of U.S. broadband is with smaller companies, not included in these figures. There's no reason to think that would change any trends. 

Last Updated on Saturday, 23 March 2013 00:44
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Conexant Flops Into Chapter 11
Tuesday, 12 March 2013 03:27

From $2.1 billion sales in 2000 to just $135 million in 2012 Once a great power in voice and DSL modems, Conexant “is fighting for survival.” (Junko Yoshida) In 2003, Conexant bought Globespan for $860M and aspired to dominate the DSL chip market. Late products, a massive royalty suit won by Texas Instruments, and generally declining prices for DSL chips led to a near immediate sales shortfall of $100M and Dwight Decker took over from Armando Geday as CEO. The remains of their DSL business were sold to Ikanos for $54M in 2009 and continues.

George Soros’ Quantum Fund has put up $15M in DIP financing to give the company a chance at recovery. Quantum was the sole secured creditor and took a writeoff on part of their $197M credit facility. Andy Rappaport of August Capital and John Knoll of Golden Gate bought Conexant for $200M less than two years ago. They now signed the bankruptcy filling http://bit.ly/WjERzN alongside CEO Sailesh Chittipeddi Kodak and Silterra took losses over $1M. Details of the prepackaged bankruptcy weren’t disclosed but presumably Quantum owns nearly all the surviving equity.

Small chipmakers across the world are struggling as the cost of developing a chip has risen well into the tens of millions. Delayed entry or failing to find a market becomes incredibly costly. Venture and Private Equity for chip companies in the U.S. has virtually dried up.

Junko Yoshida’s report on the history and prospects of the company is worth a click. http://bit.ly/YoVwPk. One comment there is

“Conexant had the best engineers, advanced products, and strong financial lineup. Dwight Decker,Dan Artusi, Scott Mercer, Christian Scherp, Sailesh Chittipeddi and its cronies effectively wiped out everything with their financial expertise. Chapter 11 is the best solution for Conexant and put it out of misery. CNXT shareholders and its employees (ex and current) are the only victims, gone with their saving, trust, and retirement. RIP”

 
Huawei's Big Vector Win at Swisscom
Thursday, 14 February 2013 19:02

Fem Switzerland HetaliaNot just Alcatel’s game anymore. 80% of Swiss homes will be offered 80 megabits and up from fiber to their homes or street cabinets by 2020. The street cabinets will come from Huawei, the first big announced win for Huawei in vectoring. Huawei, still #2 to Alcatel in DSL, has put major R & D into vectored DSL and scored a number of firsts in lab tests. This is the first confirmed customer for the equipment.
     Swisscom is already working with several cities and/or power companies to deliver fiber to the home. It’s a nearly unique deployment, with four strands going to each apartment for possible future competition. Outside those cities, they’ve now chosen to run fiber within 200 meters and then DSL. That’s closer to homes than the similar builds in Germany and Britain. While I think of DT’s build as 70+ megabits to most, Swisscom’s shorter distances will deliver 100 megabits to many more. They are calling it FTTS, fiber to the street, instead of FTTC, fiber to the curb or cabinet, because they are deploying deeper. Swisscom is in trials in Charrat (Valais), Grandfontaine (Jura) and Flerden (Grisons) but the major rollout is not scheduled until late 2013 or possibly 2014.
     Swisscom’s results have been among the best among European telcos, holding profits and dividends comparatively stable. They’ve actually been winning customers from UPC cable. Prices are somewhat high - in the 30’s - but the Swisscom service has been excellent and customers have responded. They are increasing investment for higher speeds to keep customers happy.
    They’ve had to take a billion writeoff on the investment in Italy’s Fastweb but they are now upgrading Fastweb as well. They’ll be doing 3.5M lines of fiber/DSL very rapidly, inspiring Italy to propose 7M lines vectored as well. Huawei has the inside track for that contract, especially because Fastweb and Telecom Italia are committed to working together to minimize interference.
    Alcatel continues to maintain such competitive deployments are impossible, echoing the desires of their hoped for client Deutsche Telekom to knock out competition. Huawei instead is working to overcome technical obstacles through “node-scale” vectoring and that presumably was a major advantage winning this contract.
    Swisscom promises some homes will see DSL speeds up to 400 megabits in future years and are actively involved in testing G.Fast.

Last Updated on Friday, 22 February 2013 05:04
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France Telecom and Deutsche Telecom are Being Paid by Google
Saturday, 09 February 2013 14:17

Stephané RichardFree.fr creates crisis by blocking Google ads. Stéphane Richard, CEO of France Telecom, broke the story "There are financial flows between Google and Orange, as well as other operators, in particular Deutsche Telekom. ... there is an overall balance of power. There are areas where Google can not do without us, for example in Africa" (Quotes from Les Echoes in Google translation.) Numerama previously reported that FT and Google had a deal without naming a source.

Presumably, Google’s position was “we don’t pay for termination but let’s see what we can work out.” Google needs fiber throughout the world and France Telecom owns a cable to Africa. Google needs space and facilities in peering points controlled by both Deutsche Telekom and France Telecom. Deutsche Telekom is moving heavily into server hosting.

This is "sender pays," a termination charge, that was opposed strongly by the U.S. and Europe at WCIT as deeply destructive of the Internet. It's a clear violation of net neutrality as defined by those who created the concept. The French government is unsure of how to handle this. On one hand, net neutrality is government policy. On the other hand, they support French telcos who are fighting to collect from mostly foreign content companies such as Google. The issue are fought publicly on policy principles. Behind the scenes, the discussion is "content" is American and "carriers" are European. The Europeans are happy to collect from America, usually ignoring the fact most of the money would go to a few giant telcos.

It’s likely that Google and FT made a deal with Google paying FT for something other than transit. FT got money, Google didn’t set a precedent, and people are happy for now.

Free, trying to get some, went nuclear. Xavi blocked Google (and other) Ads An immediate rebellion by websites afraid of going broke without Google ads got the government involved. Free.fr has been trying to collect from video sites such as Google and Dailymotion for years. Not long ago, he refused ordinary peering with Google. He demanded to be paid. As YouTube traffic predictably grew, congestion grew. As much as half the time, Free’s users couldn’t get their videos.

This was Google’s “nuclear option,” effectively cutting service to Free’s customers if Xavi didn’t give in. It was starting to hurt, especially after consumer publication Que Choisir did a survey that made clear the problem was extreme and asked the government to do something about it. Prominent Internet analyst Taylor Reynolds tweeted he was moving his broadband away from Free.

Last Updated on Friday, 22 February 2013 13:06
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Dunn of Nortel Beats The Rap
Wednesday, 16 January 2013 12:31

Nortel logo“The Mounties don’t always get their man.” Judge Frank Marrocco refused to convict ex-Nortel CEO and team. “I am not satisfied beyond a reasonable doubt that Frank A. Dunn, Douglas C. Beatty and Michael J. Gollogly deliberately misrepresented the financial results of Nortel Networks Corporation,”

   It’s very difficult for me to believe that the CEO and CFO of Nortel were unaware of billions of dollars of fraud going on. As Martyn Warwick notes, Nortel’s market cap at the boom was $400B. A few years later, they went bankrupt. Dunn had good lawyers for the six month trial, and there is no evidence the Judge was improperly influenced.

   Dunn still faces enough civil suits to bankrupt him if he loses. (Quote from Martyn Warwick, http://bit.ly/WdShdW)

Last Updated on Wednesday, 16 January 2013 22:19
 
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