Fast Net News, DSL Prime, DOCSIS Report

Smartphone Wars: $50 In China For Iphone 4 Performancehttp://bit.ly/16UficY
Smartphones cheap enough for the poor are changing the world.
Africa in a few years will have more Internet users than the United States. So will India, as cheap smartphones reach nearly everyone. Indonesians, nearly invisible on the web because they never developed copper networks, will become common.
   Jenna Wortham in NYT was one of many who predicted the $100 smartphone two years ago. At that price, carrier subsidies in the developed world become unnecessary on low end phones and "sim-only" billing natural.   Junko Yoshida of EE Times, one of the world’s best tech reporters, writes, “The story of the mobile market globally in 2012 was the big surge in demand for smartphones in China. ... handsets purchased by China’s first-time smartphone buyers are cheaper, usually under $50 per handset, and feature typically a 3.5-inch screen." She offers an estimate  China will sell 240 million smartphones, roughly one third of global shipmentsm and the U.S. 125 million. “
    There’s still a huge gap between the $50 phone or $70 seven inch tablet and the best. Reliability is unproven.   Spreadtrum CEO Leo Li claims “Our 1-GHz low-cost smartphone platforms can process data as fast as that of iPhone 4. Our Geekbench score is as high, or even better than that of iPhone 4.” Which is certainly enough to check Weibo or Facebook, access any news site, watch porn, and text/Skype without paying your carrier's regular charges.
  Spreadtrum and another remarkable company, Mediatek, dominate the low end mobile chip market. For prices like $7, they offer chips that include almost everything necessary for the phone.$150-$250 high end phones are likely later this year as Spreadtrum promises a quadcore processor and LTE at an unbeatable price (? $15.) A little more http://bit.ly/16UficY

*** Gigabit Australia: April 11 Sydney  Australia. Technology choices the next five years

• In this unique deep-dive workshop, learn about the telecom technology choices emerging over the next five years:
• FTTH, gigabit ready and available now
• Vectored DSL/FTTN: coming online next year
• HFC DOCSIS 3.1: ramping to a gigabit now
• LTE Advanced: heading toward a gigabit in 2 years

 Do sign up. http://bit.ly/TqNFRu or http://www.commsday.com/commsday-events/gigabit-australia

Big Vector Deployments Delayed Until 2014 http://bit.ly/15AaYin
The vendors were too 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 q4 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.

*** ASSIA is the proud sponsor of DSL Acceleration 2013  Paris La Defense 23-24 April 
Leveraging VDSL2, Vectoring and Pair-Bonding to Deliver Cost-Effective Superfast Broadband. Created by Informa, the producers of Broadband World  http://dslconference.com/ Very strong speakers, led by Tom Starr of the Broadband Forum db

Huawei's Big Vector Win At Swisscom http://bit.ly/XCzNmm
Not 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.
     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; they are working with Telecom Italia to co-ordinate their vector builds, something DT and Alcatel are still claiming is imposible. Swisscom promises some homes will see DSL speeds up to 400 megabits in future years and are actively involved in testing G.Fast.

*** 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
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.  “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.
   British Telecom is really rocking with their cabinet deployment. Taylor reports they are passing 100,000 homes per week, intending to reach 19M very quickly. Cable covers about half of Britain and BT’s upgraded network is beating back cable very effectively. The cost is remarkably low: £2.5 billion, or about $200/home.
    Taylor’s interview is part of a ZDNet report, Fibre to the world, well worth a clickhttp://zd.net/16ZOA2T

*** 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
Free.fr created 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. 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. Minister Fleur Pellerin stepped in and “persuaded” Xavi to set the adblocker “off” by default. For now, the crisis is over. Much more at http://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
No digging most places per France Telecom. 
Marc Lebourges of France Telecom writes “there is enough availability in existing ducts to
accommodate fibre deployment” in France. That’s not true in the Netherlands or all of Britain, Lebourges observes, but makes sense. Fiber takes less space than copper, at least in PON deployments. 
   Because the fiber doesn’t require digging, it’s practical in most of France to have two or more competitive fiber carriers. The last loop, from the customer to the basement or neighborhood box, would be built by one carrier and shared. Behind that, each carrier would run their own fiber back to the exchange. He believes all but ~20% of the homes can have two fiber choices, many 3-5 carriers competing.
   Those networks are now being actively built by FT & SFR and the fiberization of France is finally gaining steam. ARCEP has separately accepted that less dense or otherwise expensive areas will get VDSL for now, not fiber.
“Conventional wisdom mainly considers fibre rollout as a manpower activity, workers digging kilometres of trenches. This is not an accurate image, in particular where there is enough availability in existing ducts to accommodate fibre deployment, as it is the case in France. Lebourges paper http://bit.ly/11Zd7oX

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Gigabit Easy With GPON And 10G PON For Decades http://bit.ly/11ZcFXN
Harstead and Sharpe of Alcatel base forecast on conservative traffic projections.
10’s of millions of homes, including millions at Verizon, have GPON connections easily capable of delivering a gigabit downstream to each home 99+% of the time. While the total is only 2.4 gig shared, almost never is the actual demand more than 1 gigabit. Any user needing their own gigabit is easily accommodated.
   Hong Kong Broadband Network happily sells the gigabit service for about $30 but most are holding back. Australia’s National Broadband Network intends to offer the gig to millions starting in 2014. Verizon won’t sell more than 300 megabits.
   That 2.4 gigabits shared, the GPON total, delivers a gigabit reliably surprises most people. The 2.4 gigabits is shared up to 32 ways, an average of about 70 megabits/home. In practice, the total demand is almost never even a single gigabit, leaving more than a gig for any user who demands it. Harstead and Sharpe examine the question of likely change over time as homes require more bandwidth. They believe looking at the peak throughput, not the average, is a much better measure of GPON.
    Actual data is the average home draws an average of 100k-200k today, with the Alcatel paper sourcing that figure to Gartner/Cisco and some semi-official Japanese figures. Other estimates from actual networks are similar. Alcatel is presumably informed by the actual demand on the hundreds of carrier networks they support.
  Peak usage is higher but still not enough to strain 2.4 gig GPON. Even assuming each of the 32 homes is watching Netflix and has several others in the home online, demand is only 5-10 megabits. Adding some HD video calls and the like doesn’t change that substantially. 10 megabits by 32 users (320 megabits) is less than 1/7th of the capacity of GPON. Much more, including a projection GPON will hold up to ultra HD and comments about TDM PON http://bit.ly/11ZcFXN

*** Broadband Communities Summit 2013 Tuesday, April 16 - Thursday, April 18
InterContinental Hotel – Dallas 
The Summit has an unsurpassed record as an outstanding networking venue. Each year the show gets bigger and better. The 2013 Summit program will feature more than 45 sessions and 125 presenters http://www.bbcmag.com/2013s/ (ad) A friend of mine made a connection here that proved essential in winning a $100M contract. db

Susan Crawford’s Captive Audience: “The Most Important Volume In The Last Few Years [About The] State Of The U.S. Telecommunications Market.”
Time Magazine raves about the book. 
Susan Crawford is so smart she stands out in a group of brilliant people. I met her first in a seminar loaded with MIT professors and Internet pioneers. When she spoke she took over the room. She impressed colleagues on the first Obama transition team so much they persuaded her to stay in D.C. to be the President’s lead on telecom. She came to believe the U.S. would suffer without strong government action, as has proven true. During my recent trip to Brussels, I discovered U.S. policy is now held up as “what not to do.” Speaker after speaker pointed to our prices as “twice as high,” which is only a slight exaggeration.
    No one has been more eloquent than Susan about how much better the U.S. Internet could be. Her book has been anxiously awaited. Sam Gustin’s in Time Magazine writes, “Crawford’s book is the most important volume to be released in the last few years that describes the sad ­ some might say embarrassing – state of the U.S. telecommunications market. Reasonable people can and do disagree about policy solutions, but the facts are not in dispute. Americans have fewer choices for broadband Internet service than millions of other people in developed countries, yet we pay more for that inferior service.”
    “Truly high-speed wired Internet access is as basic to innovation, economic growth, social communication, and the country’s competitiveness as electricity was a century ago, but a limited number of Americans have access to it, many can’t afford it, and the country has handed control of it over to Comcast and a few other companies.” Gustin quotes Crawford. “Shareholders are doing well. The rest of the country, not so great.”
    I’ve become skeptical about the consumer interest in getting the highest speeds over 50-100 megabits, so I’m less certain than Susan that the 40% of the U.S. getting upgraded DSL (including AT&T U-Verse) will become further cable dominated. I’ll find other disagreements as well. But Susan is fighting the good fight and I’m glad to see the press is responding. Now at Amazon for $18. http://amzn.to/139oNmS

    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. 

Germany Confirms 24M Vectored Lines http://bit.ly/139LlW6
~ 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. 
   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. More, includng the DT announcement,  http://bit.ly/139LlW6 

France in Mali: Two Headline Views
France has “strategic interests” in Africa
Nick Wood wrote for Total Telecom 11 Jan "France Telecom reaffirms interest in growing West Africa footprint
Operator keeping close watch on Burkina Faso, Gabon, Mauritania; still keen on growing presence in Mali, Morocco." (presumably before word came of the French military intervention.http://bit.ly/X2GC0A)

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
Irrelevant but irresistible
In response to a petition with over 25,000 signatures at White House.gov that the U.S. build a Death Star, Paul Shawcross of the science staff replied. 
"The Administration shares your desire for job creation and a strong national defense, but a Death Star isn't on the horizon. Here are a few reasons:

• The construction of the Death Star has been estimated to cost more than $850,000,000,000,000,000. We're working hard to reduce the deficit, not expand it.
• The Administration does not support blowing up planets.
• Why would we spend countless taxpayer dollars on a Death Star with a fundamental flaw that can be exploited by a one-man starship?"

    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

• Apologies to Yves Blondeel, one of the best European analysts, for leaving an “e” out of his name. His site, http://www.t-regs.com/, is a primary source for policy. At the ECTA conference, I observed how close his relationships are with top policymakers.

Briefs

• John Legere introduced T-Mobile's new pricing with a slew of cursing that would have made Dick Nixon proud. http://bit.ly/YJMRYF for Legere, http://nbcnews.to/WX5JG8 for Nixon. Anyone paying AT&T's high prices is <expletive deleted>. They're just <expletive delated> ... and on and on. NY Times has a more polite way of discussing this, simply reporting U.S. prices are twice as high as European.
• Alcatel Shanghai Bell is requiring employees to take between 2 and 5 days of unpaid leave each month according to OFWeek and other Chinese reports. I have not been able to definitely confirm this but OFWeek has enough details they likely have an accurate report.. http://bit.ly/12VLgFA
• http://files.wcitleaks.org/public/T13-SG13-C-0108!!MSW-E.pdf
• Deutsche Telekom is pushing out 1,200 managers, about 10%. René Obermann, who’s already resigned effective later this year, is taking the heat rather than leaving the tough work to successor Timotheus Höttges
• Mediatek postponed its takeover of Mstar because of antitrust issues in mainland China and Korea. Mediatek has taken much of the Chinese DSL market after their takeover of Ralink and are massively expanding their base in mobile chips. China’s antitrust authorities have become notably more aggressive in the last year or two and few mergers anywhere will be unaffected. 

press

• Eric Savitz, one of America's best tech reporters, has left Forbes for heavy-duty PR agency Brunswick Group, which stage manages more M&A deals than anyone else. His last blog, So Long, And Thanks For All the Fish explained “In a dark place we find ourselves, and a little more knowledge lights our way” and ended –30–
• Ray LeMaistre of Light Reading, one of the best tech reporters in Europe, also has moved on, He's become Editor-in-Chief. He beat me on stories time and again, writing with remarkable accuracy.
• Todd Spangler, a good tech reporter, left MultiChannel News for Variety. MC turned around and hired the outstanding Jeff Baumgartner (the Bauminator) from Light Reading.
• Eric Eyre has an important West Virginia Gazette story http://bit.ly/Z5XdV2 about how $126.3 NTIA Stimulus funding created an "unintended monopoly" and "unusable network except for Frontier." Eyre reports an official state consultant determined "the project has 'no practical use for the public or competition.'" The state, to its shame, refused to release the report under a Freedom of Information Act request. Few accept my opinion that $billions of the Broadband Stimulus dollars have been wasted but there are a dozen more abuses like this still being covered up. 
• Best of luck to Lee Goldberg, a great friend to most of the tech reporters in America. His new website, All Things LED, sponsored by UBM and Philips, opens with 4 Things the SSL Industry Must Learn From the Solar Industry’s Growing Pains. http://bit.ly/158LlEm
• Good news for the news business. NY TImes is making a profit with good digital growth. So much that they even have a tax bill. “The Company had income tax expense of $75.8 million (effective tax rate of 39.2 percent) in the fourth quarter and $103.5 million (effective tax rate of 39.3 percent) for the full year of 2012. “
• China Daily suggests a doubling in thyroid cancer rates is due to “ever-increasing radiation exposure from widespread use of mobile phones.” I’ve looked at the data on mobile phones and cancer several times over the years. The number of negative findings on phone/cancer makes this conclusion highly unlikely despite attribution to a reputable authority. China Daily and Xinhua are valuable sources but like DC tech reporters need to doublecheck sources who make improbable statements.Dean Bubley believes “Ultimately, telcos have no more justification for analysing contents of a user's Internet traffic, than for analysing their voice content. Surely only a matter of time before Apple defaults to putting all iphone data through a VPN for security & privacy reasons.” Dean tweeted "Anyone who forecasts '$254.3m in 2016' etc. shouldn't be dealing with numbers in any form more complex or important than spaghetti shapes " and "If anyone at #MWC13 shows you a forecast with 3+ digit accuracy, a few years out, laugh loudly & walk out of the room at maths incompetence" @disruptivedean 
• Connie Guglielmo, in Forbes, reports former AT&T CEO Ed Whitacre “didn’t even use email when he was CEO.” Today, Big Ed enjoys playing Ants Smasher on his iPhone.

people

• Benoît Felten won a well-deserved award from the FTTH Council Europe for his work and advocacy for fiber at Diffraction Analysis. Benoît's latest is "Building the Optimal NGA Service Portfolio," an intense look at how telcos can change and even thrive with today's high speed networks.  He observes, "HKBN’s success proves that a no-frills but high quality service portfolio offered at very aggressive prices can not only work but open new opportunities over-the-top for future development." But he's sharp enough to know low price/high volume is not the right approach for everyone, no matter how attractive it is for customers.  http://bit.ly/YT74ui
• Jerry Brito, an interesting libertarian, has edited Copyright Unbalanced: From Incentive to Excess. He writes “Conservatives and libertarians, who are naturally suspicious of big government, should be skeptical of an ever-expanding copyright system. They should also be skeptical of the recent trend toward criminal prosecution of even minor copyright infringements, of the growing use of civil asset forfeiture in copyright enforcement, and of attempts to regulate the Internet and electronics in the name of piracy eradication.”  Brito includes an essay from Eli Dourado, with whom he created the invaluable WCITLeaks. At Amazon, where the paperback is $12 and the Kindle $4.http://amzn.to/106Nh1a

wall street

• ASSIA raised $25M in a preferred stock offering in a very tough market for small tech companies. Telefónica S.A., Swisscom Ltd., and Deutsche Telekom joined in as well as a Qatari investment group. I'm on the advisory board of ASSIA and under non-disclosure, but I believe I'm allowed to say their sales and earnings make them a fine investment.
• A Wall Street source pointed me to the increase in factoring that is improving Alcatel’s cash flow. Their release notes, “The level of receivables sold without recourse amounted to Euro 1,111 million, compared to Euro 958 million as of September 30, 2012.”  I’d also be concerned about pension and related. “Alcatel-Lucent reminds that according to the regulatory perspective – which determines the funding requirements- and to preliminary assessment of the company’ US plans, no extra funding contribution will be required through at least 2016.”

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Volume 12, #12 March 27, 2013

December 29

• France Telecom, Free To Google YouTube: You're Blocked Unless You Pay http://bit.ly/RYAsCL
• 100,000 DSL Lines In Nepal http://bit.ly/W4PH8n
• DT: At Least 14M, Possibly 35M, Vectored Lines http://bit.ly/TpBPc3
• Alcatel’s Spruyt: Multi-DSLAM Is Technically Possible http://bit.ly/VoNPIb
• Lisa Di Feliciantonio: FastWeb Quickly Deploying 3.5M Vectored Lines http://bit.ly/WR6tug
• Adtran: Vectored VDSL Is Ready, $200-375/Home http://bit.ly/U4sipz
• Sweden: Community-Built Fiber, Professional Operation http://bit.ly/UtelCI
• Italy's Aethra Announces Customer Powered Field DSLAM http://bit.ly/UewlxU
• Briefs: Spectrum auctions are obsolete, Remarkable drop in wireless traffic, Dan Gillmor, Amy Schatz, Broadband Forum

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At the end of 2013, Google's penetration of homes passed in Kansas City will be high teens and Google fiber will be running a nationwide process to select 3 more cities/metro areas. Carlos Kirchner prediction. 

Stéphane Richard of France Telecom is blocking YouTube unless they pay. Millions of French homes are finding web video nearly impossible to watch as FT and Free/Iliad hold back peering capacity needed as traffic increases. A quiet deal is still possible, but this could be an explosive test for Sender Pays/NN. The content is all coming from the U.S., the European carriers are demanding a cut and ETNO is tapping sentiment to tax the U.S. giants. 

    France’s competition authority has given FT and Free/Iliad a sign to start charging. John Kerry, new U.S. Secretary of State, has been a strong web advocate. A serious trade war is possible. I believe this is a newsbreak in the English language press. (Policy, at end.)

-----------
Dubai: Two weeks at WCIT/ITU conference about the Net reporting for Australia’s Commsday. An incredible experience. Nearly all homes have 100 megabit fiber. 

Brussels:  Vectored VDSL will bring 100 megabits to 65-80% of Germany, Belgium, Ireland and others. Neelie Kroes at the ECTA regulatory conference is very worried about how to protect competition if vectored DSL is hard to unbundle. In Brussels, $73 buys you 100 meg Internet, unlimited calls including most international, and 132 channels. That’s below the price of Verizon New York’s cheapest FiOS internet-only service, ($70+ fees)

Paris: The home of the 36 euro ($50) triple play, where 120 minutes of mobile and unlimited sms now costs 2 euro. That’s probably a little too low to sustain, but ain’t competition great.

New York: I return to a backward country. Verizon’s cheapest Internet only plan (15 meg) is about $77 in FiOS areas, Time Warner a relative bargain at $58. From either, triple play is $130-150 after the first 12 months. The U.S. has some of the highest prices in the developed world.

    Time to do something, D.C. 

-----------
Deutsche Telekom has now provided details on the largest broadband build planned in the Western World. At least 14M lines of vectored DSL and possibly over 30M. As usual, they are asking government for for a subsidy and a bar to competition. DT projects a 90% increase in the wholesale price. They are obviously bluffing when they suggest they will cancel the plan if government give them what they want. Mathias Kurth, then the exceptional President of BNetzA, five years ago determined they needed to do this build, similar but faster to AT&T’s U-Verse. Cable competition leaves them little choice but to upgrade. Kurth’s successor, Jochen Homann, is strong but DT has great political power.

100,000 DSL Lines In Nepal http://bit.ly/W4PH8n
16M wireless subscriptions, 5M wireless data subs. 
DSL subscriptions have doubled in two years in Nepal, the kind of feel good story in an unlikely place I’ve often included. But looking at the rest of the Nepalese figures reminded me how minor a role DSL - no matter how successful - is likely to play in most countries without wires already in place.

    3G mobile offered speeds of several hundred kilobits, as much as typical DSL plans in bandwidth starved countries. 3.5G is often in the megabits; LTE runs faster than 10 megabits in the U.S. and 50-75 in some other countries. Wireless now offers the performance of most DSL, although it still doesn’t have the capacity needed to watch most video. 

    Almost half of Nepal’s 26M people have mobile phones. As smartphones become cheaper, more and more will connect to the net. The capacity will be fine for Facebook, surfing, email and VOIP calls. Video will be limited and it will be years before most mobile networks have the capacity to support a video service like Netflix.

   In a few years, more people in Nepal will connect to the net than in Belgium, population 11M.

*** 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 Desirehttp://bit.ly/T3sMxr (ad)


DT: At Least 14M, Possibly 35M, Vectored Lines http://bit.ly/TpBPc3
Innovative DSL + LTE box could take peak speeds to 200 megabits. 
DT confirmed they will upgrade 12M German homes to vectored VDSL for speeds of "up to 100 meg" down and "up to 40 meg" up. Field experience from vectoring suggests most but not all of these homes will get 60-100 meg down. Most of this build will be in 2014-2016 based on their capex projections, although a 2015 date for finishing the 12M is also discussed. Almost all of these homes are also covered by cable offering twice the speed at the same price. Kabel Deutschland has taken about 1M customers.

   An additional 12M homes, already served by VDSL without vectoring, may be upgraded to vectored. DT statements on this are contradictory.  The total investment is placed at 6B euro, something like $350-500/home. They offset that with a substantial (1B+) reduction due to capex they would otherwise have to spend on these lines. 

   DT has also suggested they would offer vectored service to about half of the remaining 16M German homes if the government gives them a subsidy. Many of these homes would cost the same or less to serve than the homes already planned.  Homes without cable are mostly accidents of history and many are not far from telco facilities. Because DT has less competition here, the lines will be significantly more profitable than those they are upgrading without subsidy. DT is politically very powerful so they may get the money anyway. 

  Beyond the 20-30M they probably will upgrade in Germany, DT owns networks in Greece, Hungary, Romania, Albania, Croatia and other Eastern countries with an annual turnover of 10B euro. I estimate at least 2M vectored lines will be upgraded, and additional are certainly possible. 

  Vectored VDSL is so inexpensive DT projects they can do all this while maintaining capex at the 2010 level of 9-10B euro. (2011 capex fell.) They also are extending LTE to 98% of Britain, 85% of Germany and 65% of the U.S. within that budget. Depreciation is above 10B, which means some would say DT is continuing to "disinvest." The practical demonstrations of vectoring reaching  "up to 100 meg" at modest cost have totally changed the regulatory discussion. All but the last 5-15% can be offered high speed without high spending.

  DT is projecting they will be able to raise prices 90% on reselling vectored lines, from 11-12 euro to 20 euro. Jochen Homann of BNetzA needs to decide whether to raise the German broadband price to bail out DT shareholders.  DT has lost billions on expansion into Greece, just wrote off eight billion from T-Mobile USA, and has huge losses, easily five billion and probably more, expanding into computer services (T-Systems).

  DT is demanding an end to unbundling, claiming it's technically impossible to vector if some lines are unbundled. While non-vectored lines do restrict performance, some argue the effect is small. The extent of the problem will be unproven until the companies involved do field testing. In addition, numerous schemes allow two companies to cooperate on vectoring while serving their own customers. Telecom Italia and FastWeb are doing that, which will be an existence proof of a possible solution. 

   More http://bit.ly/TpBPc3

*** Lantiq invites you to meet at CES, Las Vegas, January 8 – 11, 2013.
We will showcase our portfolio of products in a private meeting room at the Aria Hotel, and will give an exclusive insight into our digital home technologies, including our exclusive new LTE and AnyWAN Technology. Please drop Monika Udri-Wetzel  an email marketing.communications(at)lantiq(dot)com (ad)

Alcatel’s Spruyt: Multi-DSLAM Is Technically Possible http://bit.ly/VoNPIb
Could be very difficult, he believes. 
Deutsche Telekom claims it’s impossible for others to share their new vectored DSL network. No one wants to believe DT because competition is working so well and they are determined to protect it.. Neelie Kroes and speaker after speaker proudly noted European prices are half those in the U.S. because competition can work. Top analyst Yves Blondeel reminded the ECTA audience “They said number portability was impossible. Then we found a way. They said unbundling was impossible. It wasn’t. I’m sure we’ll find a way to solve this as well.”

    The magic of vectoring is dependent on reducing noise, which is obviously more difficult when more parties are involved. John Cioffi of ASSIA contends that with proper management the problem can be minimized; DT and Alcatel are dubious. There are no results from the field, so everyone is extrapolating from models with different assumptions.

    Paul Spruyt of Alcatel is a DSL pioneer with twenty years experience. Alcatel is the first to ship vectored DSLAMs and has high hopes of a DT contract in the hundreds of millions so has every reason to agree with them. Nonetheless, at the ECTA event he said that “multiDSLAM vectoring was technically possible.... In addition, cross-DSLAM vectoring requires very close operational alignment between the operators involved. Such conditions are certainly not trivial, and might be prohibitive in many markets.” ...

   Then Lisa Di Feliciantonio of FastWeb took the podium and totally changed the debate by announcing 3.5M lines of vectored VDSL with an understanding from Telecom Italia they will work together.

Lisa Di Feliciantonio: FastWeb Quickly Deploying 3.5M Vectored Lines http://bit.ly/WR6tug
Working closely with Telecom Italia. 
“Telecom Italia insisted installing our own cabinets would be impossible but our engineers disagreed. So we announced we would move ahead. With the regulator watching, Italia agreed to a Memorandum of Understanding. We are going to deploy.” Lisa stopped cold the ECTA session on DSL with that comment. Others had just said such a deployment was very difficult or even impossible.

    They intend to finish the 3.5M lines by the end of 2014 and leapfrog Telecom Italia. Italia for almost five years has been promising to begin millions of lines of fiber but has stalled out while seeking government funds. Italia is due to announce some form of structural separation very soon.

    FastWeb made their reputation with what is probably still the largest fiber build in Europe. Led by the brilliant Silvio Scaglia and with money from the power company, they quickly became the second largest landline company in Italy. Swisscom bought the company in 2007 and has been selling fiber and unbundled DSL connections.

    Swisscom has budgeted 400M euro, just over 100€/home. That figure may be particularly low because of the existing FastWeb fiber, very low prices from their expected supplier Huawei, or an under-estimate. What is becoming clear is that veciored VDSL in urban and most suburban areas is coming in incredibly cheaply. The Deutsche Telekom figure is 300-400, AT&T estimates similar.

   Fiber plans are being abandoned across Europe in favor of vectored VDSL. http://bit.ly/WR6tug

*** BBC Summit 2013 Tuesday, April 16 - Thursday, April 18
InterContinental Hotel – Dallas 
The Summit has an unsurpassed record as an outstanding networking venue. Each year the show gets bigger and better. The 2013 Summit program will feature more than 45 sessions and 125 presenters http://www.bbcmag.com/2013s/ (ad) A friend of mine made a connection here that proved essential in winning a $100M contract. db

Adtran: Vectored VDSL Is Ready, $200-375/Home http://bit.ly/U4sipz
Ready to support multiple competitors sharing bundle. 
Jochen Homann, German regulator, is looking for vectoring “procedures to use vectoring even without an exclusive right to the control box.” With 12-20M lines planned at Deutsche Telekom, Adtran’s positioning their product as compatible with a multi-provider system. Multi-DSLAM “can work if the same vendor provides both DSLAMs”, Ryan McCowen of Adtran notes.There’s “no technical reason why you can’t do that,” he adds. “We and other vendors are looking at it.”

   Adtran is successor to NokiaSiemens, hence a contender for the German contract. Huawei is hopeful as well, already committed to supplying 3.5M vectored lines to FastWeb that will cooperate with Telecom Italia’s network. Alcatel and Deutsche Telkom initially claimed that multi-DSLAM was impossible; DT’s “Highlander” network would have to be exclusive. Homann is actively looking for alternatives.

   Ryan McCowen of Adtran supports both VDSL and GPON equipment, so was ready with an answer about the relative costs of fiber home versus fiber/DSL. Fiber/DSL (FTTN) in a typical U.S. suburban market requires running only 15% as many miles as fiber to individual homes. The result is the total cost is 20-25% as high. While he didn’t specify the fiber home costs, Verizon’s figure is $1,000-1,300. Stephen Conroy of Australia tells me the cost of fiber home to the National Broadband Network’s 9% of Australia is $1100-1500/home.

   Applying McCowan’s 20-25% guideline to those ranges yields a cost of $200-375. Deutsche Telecom’s own figure is slightly higher. Teresa Mastrangelo reports DT estimates a “FTTH rollout, in its most efficient manner, costs 1000€ per household, while FTTC + VDSL2 vectoring will cost between 250€ to 350€ per household – a 70 percent reduction in CAPEX.” This corresponds to press reports of DT budgeting $400 per home. AT&T’s figure is somewhat less.

   The average cost of a VDSL DSLAM port is $40 worldwide, brought down by fierce Chinese competition. More and a chart with a 72% gain from vectoring http://bit.ly/U4sipz 

*** F2C Freedom to Connect March 4 & 5, 2013 Washington, DC
The program of F2C features advocates for community communications infrastructure, advocates of open public Internet protocols, and activists against the enemies of community and openness. http://www.freedom-to-connect.net/ (ad) From the Chief Scientist of British Telecom to the founder of Cheezeburger.com, speakers D.C. can learn from.

Sweden: Community-Built Fiber, Professional Operation http://bit.ly/UtelCI
Skanova/Telia makes long term deals. 
From Vermont to Lapland, communities wanting fiber connections often band together when telcos refuse to serve them. Some do well, especially those connected to successful municipal utilities. Others flounder because lack of management skill drives brutal costs. Two larger builds, Burlington and UTOPIA, have gone bust.

   Ove Alm of Skanova/Telia offers an alternative. If the community will build the ducts and bear the main construction cost, Skanova is happy to maintain the facilities. They in turn lease to operators, including the parent TeliaSonera, who provide services. “We’re not the only company offering management,” Alm tells me. “That competition is one reason the system works.” Skanova’s common arrangement gives them an option to buy the system after seven or eight years, which they will probably exercise.

  Operators in Sweden are looking at vectored DSL but hesitant. “We have multiple service providers on our system whom we need to work with. We need a solution to the problem of sharing vectored systems. We also have some very old plant, often 60 years old. Running new fiber eliminates the problems we sometimes have when it rains.”

*** ASSIA DSL Expresse enables 100 MBPS with an industry-first vectoring management solution. DSL Expresse 3.1 allows service providers to upgrade lines seamlessly to 100 Mbps vectored VDSL without conversion of all lines to vectoring simultaneously.http://bit.ly/TxIq2Q (ad)

Italy's Aethra Announces Customer Powered Field DSLAM http://bit.ly/UewlxU
FTTdP draws power from customer modem. 
The concept is intriguing. Run fiber to the basement but don't bother connecting to the power company. Instead, draw a few watts from each of your customers VDSL modems or small power plugs. That saves money on the telco power bill and avoids the delay often required to get new electric lines installed. VDSL in building can usually do 100 down, 100 up or even faster, for a total of as much as 250 megabits for 100 meters or so.

   "Reverse power" (FTTdP) is a crucial part of G.Fast, the forthcoming 250 megabit down, >200 meter specification. Power in phone networks come from the exchange, which is why phones work when the electric goes out. "Reverse power" comes from the customer instead. That would work to basements but also to small field boxes in neighborhoods of small homes. Getting power to points like that on poles or in ducts is often expensive.
 
    What's not known is whether carriers will actually deploy these networks or find other ways to deliver the highest speeds. Lantiq is working with them and had demonstrations in their booth at BBWF.

*** COMMSDAY Summit 2013. Westin Hotel, Sydney 9 & 10 April 
The leading event for the Australian telecommunications industry http://bit.ly/12WL2LM (ad) Looks like I'll be able to come in 2013. db

corrections - please send

email

• Jonathan points out the crucial PCAST report provides for future spectrum auctions. “Are you saying that PCAST moves discussion away from auctions and toward sharing? But auctions are still part of that report, non? And isn't PCAST a policy document itself?” So why did I write “Virtually stopping auctions and thinking differently is the right choice, but nearly no one in policy around the world is thinking this way” while discussing PCAST? In PCAST and especially in the discussion behind PCAST the technical people came to consensus about how policy should shift. My sources are two members, distinguished technologists. The political people understood where that was going and signed off on the idea in principle, I'm told. But the political people, as you note, clearly haven't turned the oil tanker of policy momentum and continue mostly thinking the old way. So their plans for auctions remain in the report as well. There’s so much momentum for auctions change will be very slow.
• Andrew Odlyzko, the world expert on telecom traffic projections, wondered “In your latest issue, you wrote
• "Wireless growth in the U.S. dropped to 20% in the first half of 2012. That's half the 100% annual growth many expected."
• One has to be careful with those CTIA figures.  The decline in growth rates may very well be due largely to things such as imposition of data caps.  But some of this decline may very well be seasonal.  In wireline, where I have a lot of data, it has been true since the mid-1990s that growth was far higher in the Sep - Nov period than in the rest of the year.  (December tended to see a substantial slowdown, surely due to the holidays.)
• In recent years this trend has become even more pronounced.  If you look at the statistics of AMS-IX, one of the world's largest Internet exchanges, https://www.ams-ix.net/technical/statistics/historical-traffic-data you will see that this year, there was no growth at all from January to July, and a spurt in Aug - Oct.  The previous years show this trend strengthening.
• The bottom line is that I do expect growth rates to moderate from the 100+% per year we had seen before, but the 20% figure may not hold on an annual basis.” Andrew is absolutely right and in the original article I speculated the rate of decline was surprisingly high.

Briefs

• Congratulations to Tom Starr, Kevin Foster and especially Robin Mersh for the Infovision Award at BBWF for Outstanding Contribution to Broadband Success. The Forum has been crucial to the industry since 1994.

Press

• Dan Gillmor, pioneer digital journalist, has optimistic hopes for the new year. “Journalists in all arenas ­ politics in particular ­ will stop quoting “both sides” of issues when one side is lying, or at least they’ll feel obliged to tell their audiences that one side is lying. Their sources will be upset in many cases, but there will be an added benefit here as well: Once it becomes clear that news media plan to hold the powerful accountable, journalists will forfeit their coziness with the powers-that-be in politics, business, and other fields.” http://www.niemanlab.org/2012/12/do-the-math/
• At the Wall Street Journal, Amy Schatz is on maternity leave with Sarah Portlock covering telecom in DC. She’s one of the most important reporters in policy.

policy

France Telecom, Free To Google YouTube: You're Blocked Unless You Pay http://bit.ly/RYAsCL
Government backs “Sender Pays” termination charge. 
Millions of French netizens discover their YouTube streams sputter and die or never begin in the first place. Other video services, including TF1, are also struggling. The effect varies, sometimes randomly and sometimes by time of day. Respected consumer organization UFC-Que Choisir found between 20% and 50% of users surveyed online.

    French networks, with France Telecom in the lead, are refusing to accept growing traffic from Cogent, a major backbone carrier that services Google. They demand payment to accept all the streams their customers request. The independent French competition authority (Autorité de la concurrence) on September 20 approved the charging plan, leaving no doubt this is a precedent-setting neutrality dispute. 

“The decision issued today by the Autorité de la concurrence regarding the dispute between the US operator Cogent and France Télécom is the first decision to be issued by a competition authority anywhere in the world in relation to an issue that is currently a focus for discussion in the context of the Internet neutrality debate: are network operators entitled to charge for opening additional capacity?” (emphasis in the original, which placed this statement in a prominent black box.) (Ruling below)

    Free’s customers are the hardest hit, presumably because they are growing the fastest. Xavier Niel confirms the problems "pipes between Google and we are full at certain times, and each pushes the responsibility to add pipes. This is a classic problem happens everywhere, but more often with Google." (PC World). If Google continues to refuse to pay, the problem will get much worse as traffic grows. Free is already losing customers. I discovered this story after Taylor Reynolds tweeted “Cancelled my 2 free.fr subs today b/c tired slow network and YouTube peering problem.” Actually, I believe Free’s network is neither tired nor slow, but appears that way because of the artificial problem at the connection edge.

   The five French networks (FT, Free, Bouygues, SFR, Numericable) are holding firm, providing a collective front against the mostly foreign content companies. Google is counting on public protest to force them to stand down. ARCEP, the regulator, and several legislators are jumping in. Free is adding the most customers and hence has higher traffic growth and the most problems. Press reports emphasize the Free-Google conflict, but apparently all the other ISPs as well as other video providers are affected.

   Ironically, France stood strong with the United States opposition to “Sender Pays” at WCIT (the ETNO proposal.) U.S. Ambassador Kramer believes sender pays “would have a chilling effect on the whole Internet base.” Kramer promised to refuse to sign the treaty if necessary (http://bit.ly/VkEvs5 ) and in the event the U.S. didn’t sign. The Africans are furious because they want to make up for the lost revenue from international long distance. America will lose a great deal of credibility if after refusing Africa’s demand - where the money is needed - the U.S. allows France to impose a similar termination charge.

   None of the parties are speaking plainly on the record (except Autorité de la concurrence.) Everyone’s hoping a private solution will make the problem go away. Lots of obfuscation about peering rules, traffic growth, precedents and more. The situation is much simpler than that. The carriers, obviously with an understanding to work together, are threatening to close the French market to Google unless they get a cut. Google is currently fighting back, letting the service degrade. If only one carrier was demanding payment, Google’s tactic would drive consumers to alternatives. When they work in (probably silent) collusion, the result is less clear.

   If the lid blows, this is the battle between the net and the telcos we’ve long feared.

   There's much more to this story, some of which I report http://bit.ly/RYAsCL 

Reply "subscribe" to be added, "un" to be dropped
Volume 12, #11 December 29, 2012

November 14

• AT&T: Turning Off Copper To More Than Half Territory, 99% POPs LTE In Territory, 90% Out, Fiber To Businesses http://bit.ly/QdU6Kb
• The spectrum “crisis” is dead before it begins, the data suggest.
• U.S. Q3 Cable Fine, Telcos Morose http://bit.ly/Upu7dT
• Vint Cerf To ETNO: "Adapt Or Die" http://bit.ly/RD8HM8
• Ikanos: Our Vectoring Is Faster Than Their Vectoring http://bit.ly/THAsmN
• ASSIA: Fixing WiFi Often Fixes “DSL” Problems http://bit.ly/RUh5bE

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“Africa leap-frogs when it comes to technology” Alessandro Tucci of Fox. Africa will soon have more broadband connections than the U.S., almost all wireless 

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.  
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AT&T's plan to shut done the phones line to half their territory is the biggest change in telecom since the Internet. Many details below. Don't ignore this one.

------------------  

Wireless growth in the U.S. dropped to 20% in the first half of 2012. That's half the 100% annual growth many expected but predicted here a year ago. 

-------------

The DSL Tsunami continued at BBWF. 50-100 megabit DSL is sweeping Europe because it’s a cheap and easy upgrade. British Telecom announced they are an amazing 18 months ahead of schedule on their “Superfast” broadband with 75% of Britain expected by 2014. (DSL cabinets) Lots of new technology coming, especially as the DSL networks integrate with home WiFi. 

U.S. Q3 Cable Fine, Telcos Morose http://bit.ly/Upu7dT
 44K net adds at CenturyLink almost match -42K AT&T and Verizon -8K
T & VZ have been too busy raising prices to add new subscribers, but Century-Qwest proves that telcos don't need to give up. Comcast benefits from a growing program of $10 for the poor.  They were up 287K.  Full dataset from Leichtman 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)

Vint Cerf To ETNO: "Adapt Or Die" http://bit.ly/RD8HM8
"sender pays/termination charge/enhanced quality of service... fails.”
 ETNO - the big European telcos - wants a share of online video revenue. Deutsche Telekom and France Telecom, like most Euro telcos, are struggling because landline voice is disappearing and they still haven’t adjusted to competition. Earnings at both are below the dividends they pay. They are looking for revenue wherever they might find it. 
    Vint Cerf has been following this issue since Dave Farber and Vint’s partner Bob Kahn created the first Internet peering arrangement. He made some comments on an Internet Society list and I asked if he’d explain his point of view on the record. He responded:
    "Sustainability is essential for the Internet's continued utility. That means that all its costs need to be paid for. This does not necessarily dictate any particular business model and one can find many in the loosely-coupled Internet ecology. ETNO has proposed that application service providers pay ISPs everywhere in the world for ‘better service delivery’ for users of Internet access provision. 
   It is generally the case, in the Internet, that all users (including application service providers) arrange for access to the Internet. Essentially the users (and I apply this term to application providers also) get access to the Internet under local terms and conditions and then proceed to use the Internet for whatever purpose suits their interests. ETNO seems to want to return to the ‘sender pays/termination charge’ model of the past. Recently, it has introduced a variant in which the "sender" pays for ‘enhanced quality of service.’ 
   This notion fails on two counts. First, it suggests that the income from users paying for local access is insufficient to compensate for the cost of providing access. The obvious solution is NOT to charge every source of traffic on the global Internet. Rather, local costs should be reflected in access prices (possibly modified by local subsidy decisions). Second, it implies that the "ordinary" service isn't good enough quality and that the traffic sources should pay (every access provider) for "enhanced quality of service." 
   The shadow of "monetizing scarcity" looms in such proposals. Taken to an extreme, costs for every user and application provider would rise in such a model. In the Internet, demand is driven by the users on the receiving side. Since the Internet operates in a symmetric way, both sides have an obligation to defray local access costs and the intervening networks need to work out bilateral interconnection agreements. 
  Old business models and the companies that revolve around them are often challenged by new technology. Darwin was right, there are only two choices: adapt or die.” 
  Personally, I don’t think Deutsche Telekom or France Telecom is going to die. But the solution isn’t to tax the net. First step is to follow Telefonica and sell off some corporate jets.


*** November 15 DC The USTelecom Voice Innovation Summit examines the intersection of voice technology, business considerations, and consumer demand arising in the transition to all-IP networks." http://bit.ly/ZuSBZi(ad) It's organized by friend Dan Berninger, who at Pulver organized some great events.

Ikanos: Our Vectoring Is Faster Than Their Vectoring http://bit.ly/THAsmN 
“Node-Scale” works across DSLAMs and line cards. 
Arun Hiremath of Ikanos believes their method of vectoring will yield as much as twice the performance in some deployments. The Ikanos system works across line cards and even across DSLAMs to vector up to 384 ports. Bonding also works across boxes. This becomes particularly important when upgrading existing facilities, where not all lines in the binder are conveniently connected to the same line card. Changing that is potentially an operational nightmare.

    Ikanos applies vector logic to all 4,000 DMT tones of the 17A profile, which they also believe provides a competitive advantage. Some proposed vectored systems apparently only cancel the crosstalk from a subset of lines and tones; I’m asking the other vendors if that applies to their system; I hadn’t previously heard of that performance compromise.

   The new chips include a 10 gigabit serdes for very fast communication between the vectoring chips. Vectoring 384 ports requires both massive processing power and exceptional backplane performance. The new chips have specifications to match. 
Despite the advanced features, Omid Tahernia of Ikanos says the bill of materials for a DSLAM will be little changed. The line card cost will be similar to the previous generation. Thernia believes the cost of the additional vector processor card is “insignificant in the context of overall Capex, resulting Opex savings and additional ARPU.” For now, with only one vendor shipping production gear, there’s still a price premium. A little more http://bit.ly/THAsmN 

*** LANTIQ AND ASSIA ANNOUNCE COLLABORATION ON VECTORED VDSL NETWORKS Management is Key to Vectored VDSL for Next-Generation Broadband Speeds of 100 Mbps http://bit.ly/U03AaZ (ad)

The spectrum “crisis” is dead before it begins, the data suggest. 
Glen Campbell of Merrill Lynch in 2009 predicted wireless networks would easily meet demand for many years. He was right. U.S. traffic growth in the first half of 2012 was 20%; about 15% comes from new smartphones. Most users traffic growth was in single digits.  Data from Tim Farrar. More next issue.
      France Telecom’s CEO Stéphane Richard has “almost never seen saturation 3G communications, even during peak traffic.” NY Times blamed disappointing Ericsson sales on “new, faster networks whose ability to handle data far outstripped current demand,” quoting Martin Nilsson.  
      There is a one time wave of growth as we go from almost no smartphones to nearly everyone carrying one. That’s nearly over. Meanwhile, LTE, MIMO, carrier aggregation, small cells, spectrum refarming and much more are improving what current networks can handle by something like 50x in a few years. Almost everywhere, speeds are going up significantly and congestion is down. People are learning not to watch video outside of WiFi range to avoid the high prices.
       Capital spending is actually down $1B at both AT&T and Verizon this year. It’s flat at France Telecom. Deutsche Telekom cut capex over a billion between 2009 and 2011. At nearly every major telco, capex is less than depreciation. In that sense, most big carriers are “disinvesting.” Maintaining the network and expanding capacity today costs less than similar cost five years ago.
    There’s a clear technology path to better wireless at reduced cost for the next five to ten years. The challenge is different and tougher where there are few landlines, India, Indonesia and Africa. There we need even faster wireless capacity growth to bring the next four billion people online. Benign neglect policies that may work in rich countries with powerful networks are not enough for the last two or three billion. That’s part of the reason the U.S. “do nothing” policy at ITU/WCIT is so strongly resisted by the Africans.
------------
    Sharing all spectrum is the answer for increased demand beyond 5-10 years. The engineers are confident that effective throughput per megahertz goes up 3-10 times. The politics are tough; established carriers want to exclude others. 
    Craig Mundie, Microsoft’s uber-geek, believes broadband spectrum auctions a "fundamental mistake." No one with policy power is even thinking like that. Some of the best engineers in the world contributed to the U.S. PCAST report. The PCAST report I believe is the tipping point for the tech discussion. Virtually stopping auctions and thinking differently is the right choice, but nearly no one in policy around the world is thinking this way.  
    Engineers, time to educate the politicians. 

*** New York Nov 15 Internet Society and its New York Chapter to Host Open Forum Discussion on the New Copyright Alert System INET New York will initiate a discussion on the new Copyright Alert System (CAS) aimed at warning Internet users about illegally downloaded content http://bit.ly/TEXBUu (ad) Major event, top speakers, Watch the webcast if you're not in NY 

ASSIA: Fixing WiFi Often Fixes “DSL” Problems http://bit.ly/RUh5bE
Jennie thought her DSL was slow. ASSIA’s new Expresse Wi-Fi offers telcos multiple tools to troubleshoot and fix home WiFi, remarkably often the real problem when customers call saying “My DSL is slow.” Jennie’s Netflix almost never had a buffering delay until recently, so she initially thought something was wrong with her Verizon DSL. I tested the DSL and it was solid around the promised 3 megabits, so I looked elsewhere. Bringing in a new WiFi router solved the problem. I don’t have data, but I believe congested or malfunctioning WiFi is the most common problem in IPTV delivered wirelessly in the home. The carrier may believe the home network is the customer’s problem, but it becomes very expensive whether they dispatch a tech or lose the customer to a competitor. 
    WiFi systems provide an enormous amount of data, which ASSIA software can collect and analyze. Often, the system can automatically correct the problem. ASSIA’s experience in early tests is that WiFi system speeds can often improve 20% to as much as 100%. Even more important for the TV dropout problem, by testing the system over time to discover problems reliability goes up considerably. Nothing is more frustrating to the customer than having the tech claim everything is OK and then have problems recur a few hours later. ASSIA’s servers in the cloud automatically test at frequent intervals and hence diagnose problems that only occur at certain times - like when the kids are home in the evening. 
    The new Expresse DSL 3.1 adds powerful features for managing vectored DSL networks, now sweeping Europe. Deutsche Telekom, Swisscom, Belgacom and KPN plan about 30M lines of vectored DSL, if they can persuade the regulator they are not unduly handicapping competitors. Britain, France and Sweden are holding off until there’s a solution. ASSIA claims “DSL Expresse 3.1 Allows Service Providers to Upgrade Lines Seamlessly to 100 Mbps Vectored VDSL Without Conversion of All Lines to Vectoring Simultaneously.” Their simulations find that “80 Mbps is possible for 99% of customers at 500 meters and 100 Mbps possible at 300 meters.” Older VDSL lines in the binder will be able to achieve 45 Mbps. That’s crucial, with tens of millions of legacy VDSL ports in Europe. More at http://bit.ly/RUh5bE

Corrections

• Bell Aliant is, of course, in East Canada, not West. Careless error. Aliant, minority owned and controlled by Bell Canada, has quietly been fibering much of its territory. They are now around 600,000 homes passed, probably second in North America after Verizon.

Briefs

• “A lot of the service providers are going south because of Universal Service changes.”Mike Ashby, Calix. Some subsidies are needed, some are waste that should be cut. Some  operators are prudent, others borrowed far too much. Even Solomon’s wisdom can’t make the appropriate cuts without putting some out of business. RUS and the FCC need to be ready with debt workout specialists to protect taxpayer dollars and experienced operators ready to take over and ensure service if needed.http://bit.ly/ZuWrBJ

Press

• Alessandro Tucci’s comment at top about Africa is from an IP & TV News interview with Jamie Beach of Informa, the folks who produce BBWF. Now that Jeff Pulver has moved on to other things, they are the best conference company in this business. http://bit.ly/Rzh75y
• Charles Arthur details in a lively style the rules underneath the patent sillinesshttp://www.guardian.co.uk/technology/2012/oct/22/smartphone-patent-wars-explained He explains the difference between FRAND and RAND, fighting SED and whether trade dress is small and black. The article was checked by patent attorney  Darren Smyth, a sensible move that few reporters like to admit. Reporting mistakes go down dramatically in tech articles if an expert checks.
• “802.11ac standard” modems are already shipping, Mike Miller reports at http://bit.ly/T7J6bnalthough the standard is probably a year away from ratification. While the 1 gigabit theoretical maximum will rarely be achieved, the performance is significantly better than 802.11n.Sigurd Schelstraete of Quantenna has a thoughtful but very technical paper on .11ac at http://bit.ly/Re7Anf
• Jeff Baumgartner at Light Reading Cable broke the story that Time Warner put out an RFP for IPTV set tops compatible with Comcast’s Reference Design Kit. The two companies cover about 2/3rds of the U.S. and this essentially guarantees the RDK will be the standard design for cable going forward. There’s now no doubt cable is going to IP video, although the transition will be very lengthy some places. 

People

• Kyle McSlarrow after a year and a half is getting his wish to become an executive at Comcast instead of a lobbyist, John Eggerton reports. McSlarrow after six years at the Cable Association wanted to be something other than a “begger in a business suit,” but was induced to take over when Joe Waz retired. He presumably was paid more at Comcast then the $2M/year he drew at NCTA, but much less than Comcast’s senior executives. (David Cohen drew $16M according to a recent filing.) Meredith Baker is likely taking over as Comcast’s woman in DC, reporting to Cohen.

Wall Street

• Craig and Robert Kaufman closed Kaufman Brothers in January after a 15 year run as broker specializing in smaller technology stocks. They are now at National Alliance Securities. Craig writes they are continuing, “our neverending love of trying to help investors and companies find their way through the technology landscape.  We are offering Institutional Research and full investment banking services.” They’ve long been a key connection between growing companies and Wall Street.

Policy

In Baku at the Internet Governance Forum, Hamadoun Touré, Larry Strickling and the usual cast said mostly predictable things. Everyone believed in “multi-stakeholder.” The ITU maintains they are the most multi-stakeholder of all, disputed by the U.S. Everyone ignores that “multi-stakeholder” organizations are mostly corporate dominated, with everyone else rarely more than a token presence. A good summary athttp://bit.ly/SHzVjj, the very useful dot-nxt service. Subscribe there to the weekly email. Now that the U.S. election is over, the real horse trading for WCIT has begun. 

“Why Isn’t Everyone Copying Germany’s Strikingly Effective Policy to Require Spectrum Bidders to Cover Empty “‘White Spaces on the Broadband Map’” 
The right question to ask at ECTA Brussels November 26-28
Germans in extreme rural areas have the most comprehensive LTE network in the world because of Mathias Kurth. The “white spaces” on the German broadband map are rapidly filling in after Kurth added to the last German auction a requirement to build white spaces first. Before doing major cities like Hamburg, Vodafone and Deutsche Telekom had to cover the small towns in each region.  They moved fast; by June, nearly every small town in 11 out of 16 Länder was covered with LTE. 
    While presumably the bids on the auction came in a little lower, the difference was a fraction of the amount telcos would have asked in subsidies. The telcos would be spending their own money on the build and hence incented to keep the costs down. Ordinary subsidy programs, like the U.S. USF, pay wildly inflated sums because no one has found a way to keep the amounts actually related to the extra cost of the rural build.
    The conference is bringing together the people who count in European telecom policy. Neelie Kroes and a dozen top regulators lead the politicians, Maxime Lombardi of Iliad/Free the operators, and top analysts Yves Blondeel and Robin Bienenstock the commentators. Their frenemies Roland Doll of DT and Luigi Gambardella of the Big Telco group will be on hand. So will Christian Engstrom, MEP of the Swedish Pirate Party. Wish it were practical for me to fly over. 
www.ectaportal.com/regulatory2012 

Terry Kramer's Remarkable Opening of the U.S. State Department
Multi-Stakeholder meaningless if stakeholders all corporate
By joining ITAC - free and open to all - you can be a meaningful part of the process and have impact on U.S. policy. All the big tech companies - Microsoft, Cisco, Google, AT&T, Verizon and two dozen more - use the ITAC meetings and mailings to have a say. Over 100 independents are getting the once secret documents of the ITU, regular briefings from Ambassador Terry Kramer and top State officials (Dick Brainerd included) and questions answered. 

   With Kramer’s encouragement, I and Mike Masnick at Techdirt publicized how to join and the response was remarkable. Three prominent professors, a former board member of ICANN and many more signed up. ITU Secretary-General Hamadoun Touré at Columbia pointed out ITAC as an ideal example of how governments can get all ITU documents to their citizens.

   Terry’s likely to move on after December and the State Department staff will take back control. These include the same people who a few years ago set a firm U.S. opinion that civil society not play a role at ITU. Far too often, I found myself in discussions where I was the only voice outside government that was not corporate. With luck, the success of Kramer’s actions has changed their opinions and they will stay effectively open going forward.

More coming separately as Net Policy News

Special report on AT&T's plan to shut down half the network
AT&T: Turning Off Copper To More Than Half Territory, 99% POPs LTE In Territory, 90% Out, Fiber To Businesses http://bit.ly/QdU6Kb
Project VIP, if approved, means more than half of the U.S. will lose landline phones when Verizon follows. No cutback like this has ever been proposed anywhere in the world since Elisha Gray and Alexander Graham Bell invented the telephone.
    1% of the population, about 20-30% of the area, would not have wireless and in danger of depending on satellite for every phone. Jim Cicconi writes me, however, ““no one we're unable to reach with broadband under this plan will lose their voice service.” 20-25% will lose landlines and have to depend on mobile. That’s probably half the land area, because the cuts will be the less dense areas. Fortunately, Voice over LTE is almost ready to take over and will have better call quality than the old phone system. 
It’s vital that the FCC ensures prices are fair and service good. There’s an enormous potential saving if wired networks are cut (shutting off the PSTN.) Major changes are required to prevent negative consequences. That won’t be easy. AT&T’s cheapest wireless plans are now $70-100, far higher than landline charges. The capacity of today’s LTE means you can’t watch much video over the net; it could be many years before the greater capacity of LTE Advanced and beyond are deployed unless required. 
    If consumers are protected, it’s right to go ahead.

Fiber to Half the Commercial Buildings in Territory
Businesses are willing to pay more than consumers, so retaining them as customers is worth the $1-3B additional that AT&T committed. Cable has been gobbling corporate customers for the last two years and offers 50-100 megabit service cheaply. This was not a market to give up. 

No real increase in consumer broadband
First reports were mistaken. AT&T does not intend to “offer its U-verse TV, Internet and Voice over IP plans in 8.5 million additional customer locations” for a total of 33.5M. Don’t blame the reporters; the press release suggested that interpretation. AT&T again and again has said U-Verse had reached 30M homes. That includes in financial reports, where companies can be penalized for material inaccuracies. In addition, AT&T has always planned to go to ~33.5M in the near future. The current build contains many irregular, irrational holes like much of San Francisco and Indianapolis. They’d be stupid not to fill them in, and John Stankey isn’t stupid.
    AT&T found some way to characterize 6M homes they’ve been reporting as served as now unable to get service. One or the other figure is wrong. It may be that the new figure of 24M currently reached was achieved by subtracting 6M current homes they need to bond a second line (already in place) for best TV coverage. AT&T has said they are doing bonding since at least 2009 for those U-Verse homes, but I haven’t seen orders for that many bonded modems.
    Stephenson also made much of the plan to upgrade to IP DSLAMs most of the 8-13 year old units. Those have long been obsolete and AT&T is already systematically replacing them. Improvements in power, space, and manageability of the newer DSLAMs will likely pay for the entire cost of the upgrade. Many customers will will be able to get downstream speeds of 5-15 megabits instead of the previous limit of six, which has been standard on most networks since 2003-2006. A very limited number will be able to get much higher, including some “up to 45 megabits” There will be many who can’t get five megabits and some two and below. Nothing was said about upstream but it’s probably very low. 

LTE to 99% in Territory in Three Years
AT&T, knowing they would have to offer something to almost all their present wireline customers, has decided to expand LTE to all but the last 1%. The natural deployment, based on the current towers and backhaul, would leave twice as many without service. Verizon announced in 2009 they would go to 98% nationwide and AT&T was always going to come close. The statements they would only cover 80% were for the politicians. We all know about politicians and truth.

LTE Out of Territory to ~91/92%. 
95% overall leaves twice as many unserved as Verizon
The whole game in U.S. wireless changed in 2009 when Verizon announced they would match their 2G footprint with LTE, about 98% of homes. AT&T now announces they would cover the homes of 300M people in 2014, when the national population will be about 315M. It’s 311M now and increasing about 1% per year. 
So their plan leaves 15M uncovered, about 5%. If it’s 99% in territory (about 40% of the country), out of territory would be about 91-92% covered. That leaves them somewhat behind Verizon, but not too far.
The last 1% is 20-30% of the territory
AT&T’s man in DC Jim Cicconi writes “no one we're unable to reach with broadband under this plan will lose their voice service.” That’s a crucial commitment because otherwise a quarter or so of the land area would have no voice service except godawful and expensive satellite. 

Vectoring to 75 Megabits for a Few
From now on, every new build that’s mostly under 3,000 feet should be vectored. Up to 300 meters, speeds are proving out at 70-100 meg down, 10-40 up. AT&T hasn’t suggested they would upgrade the existing 30M lines, so only the last 10% of U-Verse is likely to benefit. It should add less than $200M to the overall U-Verse cost. Existing vendors Alcatel and Adtran hope for the contract, while Calix is trying to edge in. Only Alcatel is publicly shipping vectored DSLAMs, but Adtran and Calix are working to catch up.
     In Germany, there are 12M or more homes to upgrade; Britain, France and Italy also have many non-upgraded lines that would be natural. At this year’s BBWF, it was clear the technical problems are fast being solved. But Britain and France are holding back on vectoring because it’s not clear how it will work with unbundling. The three countries have prices 30-50% lower than the U.S. because they have four wireline competitors. They don’t want to give that up.
     AT&T has for years had a contingency plan to use vectoring and bonding if customers in volume leave for 100 megabit cable. That isn't in the data, and Randall publicly says "20-30 megabits will be competitive for many years." In fact, AT&T has been holding market share in U-Verse areas where they only offer 10-15 megabits.
Cable’s the Savior for High Speeds in More Than Half the Abandoned Areas
92% of U.S. homes can get cable modem service, nearly all soon at 50-100 megabits. 5-10% of the U.S. has a broadband problem, but unless you need more than 100 megabits you have a highly capable connection.
     If AT&T drops lines to 20-25%, as indicated, at least half of those homes have a cable modem alternative. Many of them have already done so, a key reason AT&T is giving up the territory.

LTE Coverage Doesn’t Mean 5-10 Megabits for All
Verizon is consistently delivering 5-12 megabits down in most tests. But the usual maps of “coverage” are somewhat exaggerated and include areas with weak coverage and hence lower speed. Both AT&T and Verizon claim 100% coverage of Manhattan, which I factchecked a while back with AT&T. In reality, some dead spots remain and frequently areas of weak coverage and sharply diminished speeds. (I believe AT&T in particular has improved coverage from two years ago.)
The FCC wants to expands the objective testing of performance to wireless. That’s even more important now, when many will depend on LTE for broadband. AT&T strongly opposed the testing, claiming the company reported all necessary information accurately. Because I knew there were problems in my hometown, I thought their claims likely unfounded. Now that LTE performance is even more critical, I hoped AT&T will abandon their opposition and the program move forward. 
Jules Genakowski measured actual broadband speeds with the very effective Sam Knows measuring tool. 

Voice over LTE is Better than Landlines; Data has Capacity Limits.
Voice calls will sound better over LTE than they ever did on copper and far better than today’s mobile. The iPhone5 and most quality mobiles today have HD Voice built in, although the U.S. hasn’t turned HD on yet and may only experiment until 2014-5. Even HD VoLTE uses only a small portion of the available capacity and can easily serve all the voice needs of rural areas. Copper is more resilient in disasters and carries power for the handset. Mobile failed miserably during Hurricane Sandy and clearly needs upgrades for reliability. AT&T is already selling a small box to connect your existing “landline” phone to the mobile network; it’s a $10 addon if you have an AT&T mobile account and they are selling it aggressively in Verizon territory. It might be worth including a battery or at least a connection that lets users plug in their own. 
    Data over LTE currently is severely restricted, with 2-10 gigabyte caps common.Since the average broadband user already is drawing over 20 gigabytes/month, living with LTE broadband is a major compromise. LTE Advanced, some of which is already available, has 10x the capacity. Part of the approval process for AT&T’s copper shutdown should be rapid deployment of Advanced, realistic in 2016-2018. Without a special push, most of these areas probably would not get Advanced capacity until next decade.

Sum up
If you take care of those not reached with LTE and price capacity reasonably, it's a good plan overall to eliminate the copper. In theory, turning off copper is plausible. In practice, it could very easily be disaster. If broadband for all is important public policy, those rates needed to be set by law or similar at a much lower rate before this plan is approved. The FCC can’t be “technology neutral” but will have to insist AT&T be a pioneer upgrading to LTE Advanced at a high profile and then rapidly move the unwired areas beyond Advanced. The homes without wires will have a seriously inadequate service in the current generation of LTE. 
    Fortunately, Bob Quinn of AT&T writes “We know that there are important policy issues that have to be addressed that are just as important as the technical and technology questions, and we are eager to engage in that discussion.” In fact, they are deeply committed to this for business reasons so will do what the FCC requires. Time for the commission to put consumers first. More at http://bit.ly/QdU6Kb

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Volume 12, #10 November 14, 2012 

9/27/2012

• Woz: NBN Is Not Why I'm Going Australian http://bit.ly/PEQjSf
• Gigabit Cable Close http://bit.ly/OwF40R
• France: Probably Unvectored VDSL For Now  http://bit.ly/R45YvH
• Alcatel Data: Vectored Upstream 20-40 Meg To 500 Meters http://bit.ly/UmbOqF
• Sckipio: 400+ Megabit G.Fast Chips http://bit.ly/SBTlu2
• Verizon’s Mike Ritter: Upload Becoming More Relevant  http://bit.ly/UjZWd0
• Alcatel Adding "Hundreds" Of Engineers With Russian State Company http://bit.ly/MJJ7Tn
• Fiber Economics - Quick And Dirty http://bit.ly/TFRamO

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Carlos Slim, the richest man in the world, and Hamadoun Touré of the ITU sat together in front of the Broadband Commission meeting chatting amiably and showing obvious mutual respect. Anyone calling Touré “anti-capitalist” is questioning the judgment of the most successful businessman in the world. ...Report from the Broadband Commission and much more in the first issue of Net Policy News, coming soon. 
---------------

John Chapman of Cisco in 2005 defined the path to gigabit (shared) cable, meeting general acceptance by the best engineers and little notice from nearly everyone else. Kabel Deutschland demonstrated 4.7 gigabits this spring on commercial equipment. John is back, with Mission is Possible: An Evolutionary Approach to Gigabit-Class DOCSIS. The gigabit will soon be practical for massive field deployment.

  It was an extraordinary time when Chapman presented the Gigabit Cable at Fast Net Futures in 2005. John Cioffi showed how DSL could get to a gigabit (vectored, 4 pair bonded, short distance.) Verizon was passing millions of lines with fiber, soon upgradeable to 2.4 gig (shared) GPON. The technology was coming to give everyone an extraordinary Internet. The two Johns expected major progress by 2010, but it hasn’t been that quick. Actually rebuilding national networks takes years at best, a decade in some cases.

  As Chapman predicted, “It is time for Round three, the Wideband wars with multi-megabit and gigabit speed connections.”  The technical solutions are clear. The battle now is to actually deliver this performance to nearly everyone. 

Newsbreak as I go to press: Broadcom is promising 2013 delivery of 300 megabit DSL chips, range 150 meters. That's a salesman's promise, results to be proven. Presumably, that’s G.Fast, similar to what’s described by Sckipio below. 

*** 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)

Woz: NBN Is Not Why I'm Going Australian http://bit.ly/PEQjSf
Can’t get high speed in Los Gatos, California but that’s not the story.  
It was too good to be a true story. Headlines around the world included ‘Wozniak likes NBN so much, he's applying for citizenship” http://bit.ly/QkouR4 and “Woz Wants to Become an Aussie Citizen Because of Country’s National Broadband Network” http://bit.ly/P3dCCG. Half of the story is true - the Apple co-founder is hoping to become an Australian citizen, although he isn't giving up his U.S. citizenship. He does think NBN is good, and said so. He is unhappy that in the heart of Silicon Valley cable won’t come up his hill and Verizon can’t deliver more than 1.5 megabits. Reporter after reporter copied the original AFR story, including CNBC in the U.S., Slashdot and the Telegraph in England. They should have checked with the source. When I did, Steve emailed

“I am taking the first steps toward my goal of Australian citizenship, which is to apply for an extended visa so that I can reside here. I have desired to find the path to accomplish this for decades. It has nothing to do with NBN (faulty reporting) although I'm always a staunch advocate for technology and bandwidth and sharing and internet freedom. But the two things are not connected. NBN is good in my mind and is a side benefit but that's all.”

 Sorry to disappoint you, Steve Conroy.

*** The Super WiFi Summit, Oct. 3-5
Hear from the foremost experts on how White Spaces and shared spectrum technologies can be used to deliver advanced, ubiquitous wireless broadband services. Opportunities, challenges, technical issues and current state of the market will all be discussed. To register go to www.superwifisummit.com and enter discount code DSLP to receive a 20% discount (ad) Sharing spectrum, including White Spaces, is the way to end the spectrum problem. Great group of speakers.

Gigabit Cable Close http://bit.ly/OwF40R
Simple, straightforward, and not terribly expensive 
John Chapman has been promising since 2005 to deliver a gigabit over cable. Nobody but the engineers believed him then and even John knew it would be years away. Production systems were 36 megabits (shared) and DOCSIS 3.0 still years away. (John played a key role on DOCSIS 3, incidentally, using some of these concepts.) By 2008, CableLabs CEO Dick Green made a trip to Singapore to see whether cable could meet the requirements of Singapore.s planned gigabit network. He confirmed to me a gig was definitely possible but the needed processing power was too expensive back then. DOCSIS 3 was reaching the field, sharing 160-200 megabits by bonding 4 channels. Working with some of the best engineers, John has co-authored “Mission is Possible: An Evolutionary Approach to Gigabit-Class DOCSIS.” 

The basic concept is very simple. A common 860 MHz cable system if used all for data can carry 4-6 gigabits. Until recently, 80 channels, (480 MHz in U.S.) was used for analog TV and the digital TV required most of the remaining space, especially with HD. There simply wasn’t enough room for a gigabit of data. Switched digital frees some room and is widely deployed. Giving the remaining analog TV viewer a cheap DTA box allows a full digital conversion, freeing half the spectrum. With DTA prices around $30, many systems have shut off analog and have plenty of new capacity. The 36 megabits of early U.S. DOCSIS used only one 6 MHz channel. The 160 megabits of today's U.S. DOCSIS 3.0 bonds four of those channels and adds some efficiency improvements. By 2012, DOCSIS 3 modem chips bond eight channels, raising the  the download speed to 400 megabits (shared) in Europe although that’s just beginning to be distributed.

Use 25 of the 120 channels for data, and a gig is possible. 25 channels are easily found after the analog switchover in Europe, where they carry fewer TV channels. (Note U.S. DOCSIS uses 6 MHz per channel, EURO DOCSIS 8 MHz. On most modems in use, that's about 36 megabits per channel in the U.S. but about 48 megabits in Europe. We all get confused on these numbers.)

May 2012, Kabel Deutschland, working with Arris, showed 4+ gigabit (shared) speeds in production-type gear. They used twelve ARRIS 8 channel bonded modems to achieve the 4 gigabits, the maximum today. Broadcom, Intel and perhaps others are racing to make chips that can bond more than 8 channels. Word just came in from Arris that they will show a 24 channel bonded modem capable of 800+ megabits at IBC in September. They aren’t shipping soon but see no obstacles to going into production soon. Initially, price will be high for a cable modem, but recoverable with just a few months of customer service.
      Abstract, pr, and link to the full paper  http://bit.ly/OwF40R

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Mobility Tech Conference will focus on how carriers, service providers, equipment manufacturers, vendors, and others, will meet unprecedented demand for mobile broadband services and how to balance service delivery with 4G/LTE and Wi-Fi technology options. Register TODAY and receive a special DSL Prime discount of 20%. Use code DSLP to get your savings. (ad)

France: Probably VDSL, Unvectored For Now  http://bit.ly/R45YvH 
Silicani's official speech only targets 50 megabits. 
Press reports of 100 megabits and more from VDSL in France implied to me they would be using vectoring. Chief regulator Jean-Ludovic Silicani has now given a speech with details that speaks only of 50 megabits. That speed can be reached over modest distances without vectoring. I'm inferring that ARCEP is looking to approve VDSL but not vectoring, at least for now, and my initial report was mistaken.
    In either case, Silicani sees actual VDSL deployments a year away. They are waiting results from testing to come from an expert group and them France Telecom has 6 months before they have to allow VDSL. Rival Free mentioned VDSL in a financial presentation and FT typically delays rivals as much as possible.
     Alcatel and Deutsche Telekom are claiming that vectoring performance are severely compromised by unbundling and therefore rivals must be excluded from networks with vectoring. Advocates of DSM believe the problem is solvable. Unbundling has been crucial to the remarkable offerings in France, which for years have been the best for consumers in the Western world. It would make sense for ARCEP to withhold approval for now.
     Time to solve this problem.  More, including Silicani’s speech, http://bit.ly/R45YvH 

*** 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.broadbandworldforum.com (ad) Sponsored by ASSIA, Booth C23

Alcatel Data: Vectored Upstream 20-40 Meg To 500 Meters http://bit.ly/UmbOqF
Downstream 70-100 meg 
Stefaan Vanhastel and Jan Verlinden combined data from 17 field trials  http://bit.ly/Px6sc3 . The results are so impressive that nearly all European incumbents are moving away from fiber home and a DSL Tsunami is rolling over Europe. http://bit.ly/U79yWR Downstream is typically 70-120 megabits to 500 meters and above 40 megabits to 1,000 meters. Upstream, which we rarely have had vectored results previously, tested at 20-40 megabits to 500 meters. Alcatel added a few tricks to the system, such as using G.inp rather than FEC, but they shouldn’t have distorted the results seriously. Do look at the charts http://bit.ly/UmbOqF 

*** 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) 

Sckipio: 400+ Megabit G.Fast Chips http://bit.ly/SBTlu2
Will FTTdp be the new buzzword if distances are < 200 meters? 
FTTdp - Fiber to the distribution point - is the premise of G.Fast, currently mostly a fascinating idea hidden in the information blackout of the ITU standards group. Tom Starr of AT&T was an early champion of G.Fast, Swisscom had friendly things to say about a Huawei demo and Telecom Italia is considering it for future deployments. That said, the extent of the actual carrier market is unproven.

   Dudi Baum at CopperGate developed HomePNA chipsets now networking over coax millions of homes. After selling to Sigma Designs, he;s brought the CopperGate team together at Sckipio - Dudi, Oren Mansour, Rami Verbin and Ron Sterenson. He promises to soon deliver a chipset for G.Fast. G.Fast is a very short range technology (< 200 meters) that potentially can offer up to a gigabit in combined upstream and downstream speeds. Look for silicon early in 2014.

 Sckipio has just emerged from stealth mode, proclaiming on their website “Sckipio is the first semiconductor company focused on the exciting new ITU standard, G.Fast. “


Verizon’s Mike Ritter: Upload Becoming More Relevant http://bit.ly/UjZWd0
Vanhastel: VDSL’s 10-40 meg upstream is strategic. 
Mike Ritter believes FiOS’s upstream is crucial against cable. “With most cable offerings, their maximum upstream is around 5 Mbps up and they are limited on what they can do on the uplink. We believe that as the cloud becomes more prevalent, the upload becomes even more relevant. When we think about applications like video calling, you can do it on your computer via Skype, but if I want to do it off my high def TV then the pipes become critical if you want to have that sort of experience. “We think that maybe the hidden sauce is that download is important today, but upload becomes more important in the future. We'll position it as, you're future-proofing your decision. Even though you may not need all of that today, we believe in two or three years it's something that becomes critical for you.” (Interview with Sean Buckley at Fierce. http://bit.ly/NFQIp0 )
   Alcatel’s Vanhastel tells me the Europeans are also very interested in the 10-40 megabit upstream possible for many with vectored VDSL. “Of course, meeting the 100 megabit EU goal is paramount for our operators. Beyond that, many are also excited by the higher upstream speeds.” Vectored VDSL is sweeping Europe like a tsunami, I’ve written. It dramatically improves performance at a price that doesn’t break capex budgets.
  Cable has the technology for upstream to tens of megabits but isn’t deploying yet. http://bit.ly/OwF40R

*** JUST TWO WEEKS TO GO: BOOK NOW
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Hear from Telstra, Optus, iiNet, VHA, NBN Co and more on what's happening in the world of telecom. Also policy updates from the ACMA, TIO, Comms Alliance, ACCAN and more. http://bit.ly/QfYhzw (ad) 

Alcatel Adding "Hundreds" Of Engineers With Russian State Companyhttp://bit.ly/MJJ7Tn
Lucent in U.S., Shanghai Bell in China.
France’s “national champion” Alcatel is the most effectively “localized” company in telecom. Lucent in the U.S. is politically potent and a key security vendor. They played a crucial role defining the Broadband Stimulus. Shanghai Bell is part locally government owned and has an active branch of the Communist Party with close ties to management. They just announced “a far-reaching research and development pact with Rostechnologii (SC Rostechnologii), Russia’s largest high-technology corporation. The new center in Moscow, expected to employ several hundred highly-skilled engineers drawn from both organizations... will be managed by Alcatel-Lucent and will be fully integrated into Alcatel-Lucent’s global network of R&D centers.”
  Nicolas Sarkozy, always anxious to promote commercial ties,  awarded Rostech CEO Sergey Chemezov the French National Order of the Legion of Honour. Alcatel hopes the deal will make them pre-eminent in Russia’s LTE and broadband markets while also engineering products for international markets. Rostech is looking to exports as they consider privatization. Rostech has already done $10’s of billions of deals with Boeing, Siemens, Fiat and other Western companies. Rostech consolidated 340 defense companies, many effectively bankrupt a few years ago. They are one of the largest arms exporters in the world. They also make wind turbines, service a fleet of 50 Boeing jets, and work in nanotech.
Think moving Bell Labs to the Volga. More on Alcatel and Rostech http://bit.ly/MJJ7Tn (This article didn’t fit the last few newsletters but remains topical given Alcatel’s choice to fire 7,000-8,000 people.)


Editor’s note. Our Policy: If There's Time, Sources Welcome to Review - But Not Edit
I often let people and companies referenced in articles "fact-check" them in advance, which just seems common sense. That's often prevented me from making errors and improved many articles. This is considered bad form in U.S. newspaper journalism. The NY Times has just declared an official policy, "reporters should say no if a source demands, as a condition of an interview, that quotes be submitted afterward to the source or a press aide to review, approve or edit. ... The practice risks giving readers a mistaken impression that we are ceding too much control over a story to our sources." I disagree, and am happy to let anyone involved review their quotes and usually the whole article, unless I'm pressed for time. 

    The typical response from a pr person is to argue about everything they don't like, an annoyance I'm happy to accept because some of the comments improve my article. If they make a reasonable suggestion that doesn't affect the substance of an article, I'm inclined to go along. If they want I change I disagree with, I simply say no.


Corrections: France: Probably VDSL, Unvectored For Now, above corrects my previous report that VDSL for France would include vectoring.
Linley Gwennap pointed out I was careless saying "very few of today's chips are produced at less than 40nm." He reminded me Intel is shipping millions of PC processors in leading-edge 22nm technology. While not that many designs are shipping in quantity below 40nm, they include Qualcomm's 28nm MSM8960 processor and chips from  Altera, AMD, Nvidia, and Xilinx. In addition, both the iPhone 5 and Samsung's popular Galaxy III use 32nm chips. He adds “Regarding the future of Moore's Law, Intel is already testing its 14nm process, which is due to enter production in 2014. Intel is due to hit 10nm in 2016, with TSMC likely to follow within a year or two. So Samueli's comment that 10nm will carry us another 10 or 20 years surprised me. 10nm represents less than a decade of progress. I think he meant to say 10 years and got a little carried away with the 20-year comment.”


People

• Aaron Swartz faces 13 felony counts for breaching a website’s detailed terms of service and downloading scholarly articles. Andrew McLaughlin writes "The persecution of @aaronsw is a travesty. And the US Atty's misuse of our computer crime laws is a disgrace.” David Kravetz has the details at Wired http://bit.ly/S2ZUjuAaron did a Stanford Law Review study that peered through thousands of law review articles looking for law professors who had been paid by industry patrons to write papers. He was a major author of the RSS syndication protocol and co-founded Reddit. Not a guy you want to put in jail.

Press

• Thanks to Malcolm Turnbull, Australian Shadow Cabinet Minister for Communications and Broadband, for tweeting my story about Germany's choice of vectored DSL rather than fiber. http://bit.ly/QOPF5F I wrote that story based on press leaks and other sources, not an official announcement from DT, with a figure of 20M lines. DT has now made an official statement, 12M lines, with 8M more if given a subsidy. The pleading for a government handout in this case is unjustified if you examine the actual costs.
• Thanks also to Scott Canon for including my comments in his article in the Kansas City Star about Google fiber.http://bit.ly/UvP1su I told him "Google knows that what’s good for the Internet is good for Google, ... The problem is it costs a lot of money to climb all those poles and dig all those trenches to make it happen. You don’t make money in three years, but you make money in 10 years.”

Here’s one I put on the web to explain Google’s Kansas City fiber economics. 

Fiber Economics - Quick And Dirty http://bit.ly/TFRamO
~$1,000 per home passed to build, $5/month to operate. 
Assuming they get a decent take rate and meet their construction budget, Google will be profitable charging $70/month in Kansas City. But the payoff requires thinking more than three to five years, unlike most corporations. Here’s the data behind that conclusion.

Construction costs, typical city or suburb
Bell Alliant in Western Canada has now passed over half a million homes with fiber home, the largest deployment in North America after Verizon. Their latest financial report showed capex of less than $500 per home passed. Verizon reported costs fell below $700/home passed several years ago and headed to $600. Add the cost of actually installing a large fraction of those homes, and your cost per home passed by the network comes closer to $1,000. Installing each home at Verizon added $500-600. Digging lawns and drilling holes into the homes is labor intensive.
  That includes equipment whose price is rapidly dropping. Early Verizon gear cost $300-400/home, but today they are probably paying half that. Very large fiber builds in China are paying less than $100/home. Google has designed their own gear, GigaOm reports, and is going to the least expensive sources for components and assembly. They should be achieving something close to the large volume China price.
 Fiber itself cost $20K or so per mile, mostly labor. Rural areas with fewer homes per mile can be brutally expensive. often $3-5K. Undergrounding the fiber also adds costs.
 
Operating costs:
Bandwidth isn’t free, but it’s darn cheap. A moderately sized carrier pays less than $1/month/customerhttp://bit.ly/N3kVKS. Google pays much less, while small and rural carriers sometimes pay much more. Bandwidth use goes up only modestly with higher speeds; the industry rule of thumb is about 1/3rd more usage if you give the customer higher speeds. A Netflix movie will come in at 2-4 megabits whether you have 12 megabit service or a gigabit. You don’t get more email because your connection is faster.
Line maintenance and repair should be extremely modest. Google’s fiber architecture has no active components in the field. Verizon’s expectation was that fiber would bring down maintenance by 80%. Their experience was very different, as it took several years to get the customer installs reliable. Five years later, most of those problems should be solved. Google in particular has reduced network complexity to keep opex down.
Support costs for broadband have gone down dramatically. New broadband customers typically make as many support calls in the first 90 days as they will later in a year. Most customers today are well down that learning curve.
Power is a factor, but current equipment keeps that well below $1/month/customer

The crucial factor of take rates:
The cost per home passed is very different than the cost per paying subscriber. The majority of the cost is building the network, not the home hookup. If you have only a 20% take rate, the per home passed figure has to be multiplied by 5. At 33%, that drops to a multiplier of 3. At the likely Australian 70-80%, only 1.5. (In Australia, the NBN is paying Telstra and others not to compete and ensuring something close to a monopoly.)
  At $600/home passed, it costs $1-$1.5K/subscriber in Australia, $2-3K/subscriber with a 33% take rate (Google’s hope for Kansas City) and $4-5K/sub if you only get 20% of the market.
   $1K/sub is $16/month over 5 years, little more than the cost of unbundling. $2-3K - likely Google expectation in KC - it’s $40-55/month. At $5K it’s $80/month. Even at $70/month, you have to be thinking 10 years for a good payback.
    Governments paying 4% on long term bonds can think 10 years out, especially with the external returns to having a better Internet. Private telcos rarely think beyond 3-5 years, one reason nearly no telcos are willing to invest in fiber unless they have strong competition or a government push. VDSL from field cabinets is now delivering 50-100 meg in many locations and has become the near exclusive choice of British Telecom, AT&T, and Deutsche Telekom for the faster payback.

These numbers vary enormously depending on neighborhood conditions and the efficiency of construction. Burlington Vermont’s muni fiber came in with excessive construction costs and now is a scandalous bankruptcy. Australia’s NBN budgeted $5,000/home and is already over budget. Free in Paris is very disappointed at the hookup costs per home.

 Milo Medin of Google built America's cable modem networks 15 years ago and knows how to do this right, so I'm optimistic for Kansas City.

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Volume 12, #9 September 27, 2012

Sept 14

• 20 Million Vectored DSL Lines For Germany (First Look) http://bit.ly/QOPF5F
• DSL Tsunami Rolling Over Europe (First Look) http://bit.ly/U79yWR
• U.S. Worst Broadband Quarter Ever http://bit.ly/PWT69S
• Samueli: Another Good Decade For Moore’s Law http://bit.ly/PF0OpY
• For Almost Nothing, Calix Buys Ericsson-Entrisphere http://bit.ly/Oo8KrH
• Google, Reaching 89%, Dodges Discrimination Charge In Kansas Cityhttp://bit.ly/PF0SpL
• Divide To Conquer: 3 LTE IPhones Not 1 Model For The World http://bit.ly/xHQZs4
• Shorts on: Viacom stupidity, Google pricing dataset, FCC Broadband report shows Puerto Rico least served, Craig Timberg, Paul Budde, Rick Whitt to Motorola, Sam Lucero to IHS, Ubiquiti continues wild

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*** Amsterdam. October 16th Broadband World Forum
ASSIA is proud to sponsor the DSL Evolution stream. Our CEO John Cioffi will presentLeadership Insight: Economical GIgabit Broadband Using DSL and WiFi. http://www.broadbandworldforum.com (ad) Make sure to visit ASSIA in Booth C23

*** New York September 24 Columbia University CITI 
ITU head Hamadoun Touré  headlines The State of Telecom – 2012
The telcos - France Telecom, Deutsche Telekom, Swisscom, Telecom Italia
The politicos - Conroy of Australia, Strickling of the U.S. 
Some of the best of Wall Street 
All come together as the Broadband Commission comes to the U.N. http://www4.gsb.columbia.edu/citi/ (psa)

*** 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) 

*** 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.broadbandworldforum.com (ad) Sponsored by ASSIA, Booth C23

The Super WiFi Summit, Oct. 3-5
Hear from the foremost experts on how White Spaces and shared spectrum technologies can be used to deliver advanced, ubiquitous wireless broadband services. Opportunities, challenges, technical issues and current state of the market will all be discussed. To register go to www.superwifisummit.com and enter discount code DSLP to receive a 20% discount 

Mobility Tech Conference and Expo, Oct 3-5, 2012, Austin, Texas

Mobility Tech Conference will focus on how carriers, service providers, equipment manufacturers, vendors, and others, will meet unprecedented demand for mobile broadband services and how to balance service delivery with 4G/LTE and Wi-Fi technology options.Register TODAY and receive a special DSL Prime discount of 20%. Use code DSLP to get your savings.

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Volume 12, #8 September 14, 2012

August 16

• Internet Transit Costs Down 50% In Last Year http://bit.ly/N3kVKS
• $70 Price Means Google's Planning 10's Of Millions Of Gigabit Fiber Line IFF http://bit.ly/Npo47S
• Telehealth Results Modest http://bit.ly/MC3iUq
• HD Headed Under 2 Megabits: H.265 High Efficiency Video Coding http://bit.ly/MXMi6J
• Madness of Crowds? $500M Stock Drop on Ubiquiti Counterfeits http://bit.ly/R4uHAb
• ITU Secrecy Disappearing as U.S. ITAC Open to All http://bit.ly/QGuCCK
• State Department Actively Reaching Out to Public Knowledge & Others http://bit.ly/RVFKLQ
• Blackberry Gives Indian Government Full Decryption Keys? http://bit.ly/NpnQOe
• First Look: Another $30M RUS Loan Hits the Dust http://bit.ly/Prmzqz
• Briefs: Small telco problems, Arizona price hikes, Teresa Mastrangelo, 60M Chinese cable modems?, Hamid Lalani, Craig Moffett, Infineon

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"Over half of all mobile phones sold this year in China will be smartphones, rising to 76% next year" Nomura, via Forbes. That's 500M Internet phones in three years.  

U.S. Ambassador Terry Kramer is an unlikely revolutionary but he just destroyed the secrecy of the ITU/WCIT diplomacy. 300 million Americans can simply email “join” to ITAC_Listserve_Requests@state.gov and get the forbidden documents. (see policy at end.)  
-----------
Malcolm Turnbull in Australia wants Advanced DSL rather than fibre home for the NBN. Google’s Milo Medin is exciting the world with gigabit fiber, bringing everything up to date in Kansas City. With vectored DSL at 50-100 megabits, the choices are changing.

    France Telecom, British Telecom, Deutsche Telekom, the Greeks, the Czechs  and now some rural U.S. carriers have also chosen Advanced DSL. AT&T CEO Stephenson believes 20-30 megabits remains “competitive.” Others are cheering Google’s Gigabit fiber for Kansas City. I’d certainly prefer a gigabit, although no one - not even Google - is sure most families want to pay an extra $20-40 for the speed. If a quarter or a third of homes passed are willing to buy in at $70, Google is ready to expand to tens of millions and even hundreds of millions of homes. 
--------------
Telefónica said it would reduce board members’ compensation by 20 percent and cut senior executives’ pay by 30 percent, per NY Times. Imagine if that spread.

     This issue is for Kodi, Former Canine Outreach Coordinator at the Electronic Frontier Foundation. RIP 2012 Donations to EFF are always in order. A shoutout also to the 900 doctors in Spain who are refusing a government austerity order to stop treating sick people who don't have the right papers.

Internet Transit Costs Down 50% In Last Year http://bit.ly/N3kVKS
Less than $0.50/broadband customer/month in New York or London. 
Telegeography's respected survey reveals a price of $3.50/megabit in New York and  $3.13 in London, both down over 50% in the last year. I've reported from market makers like Hunter Newby they charge less than $1/megabit in large quantities.The U.S. price has been going down 26% compounded annually for the last 5 years. 
   Router and switch prices have been going down at a Moore's Law pace of 25-40% per annum, driving down the cost of transiting bits at a similar rate. With Cisco seeing traffic growth falling towards 22% (U.S.) and 30% (worldwide), the primary cost of Internet traffic per customer is falling. 
   Prices in Hong Kong are closer to $18/megabit and San Paulo almost $30, although most broadband loops are served by large carriers who connect directly at much lower prices. Small carriers and rural ones, especially in the U.S., tend to be charged much more. Kreifeldt adds, 'Prices in central and much of eastern Europe resemble those of western Europe. You need to get out to Moscow, Istanbul, and Athens to see a categorical change in price. Moscow is $4.80 per Mbps. The Hong Kong price of $16 and São Paulo price of $27 are pretty good representations of the next two pricing bands. Next level might be Mumbai, with a median GigE monthly lease price of $38 per Mbps. Sydney should be a bit higher, but roughly in the same price category as Mumbai.'' more

*** Amsterdam. October 16th Broadband World Forum
ASSIA is proud to sponsor the DSL Evolution stream. Our CEO John Cioffi will present Leadership Insight: Economical GIgabit Broadband Using DSL and WiFi. http://www.broadbandworldforum.com (ad) Make sure to visit ASSIA in Booth C23

$70 Price Means Google's Planning 10's Of Millions Of Gigabit Fiber Line IFFhttp://bit.ly/Npo47S
IFF the take rate is high enough. 
It’s completely unannounced and until the Kansas City details came out I didn’t believe it myself. Sergei Brin and the team at Google want to move ahead on a plan to run fiber to 10’s of millions, maybe hundreds of millions of homes. That’s implied by the $70/month price, which is high enough to be quickly profitable if 20-30% of homes sign on. Google’s research says they’ll get that high a rate, but no one is sure until they actually offer the service to 170,000 homes in Kansas City. 
     Jason Calaconis (a friend) writes “Everyone who would pay $70 for Google Fiber, raise your hand,” and predicts “[95% of folks raise their hands ].” I hope he’s right, but it’s not certain. Around the world people offered more than 10 or 20 megabits have very rarely been willing to pay much more for it.  Overwhelmingly where given the choice of speed for more money, most people have gone for the cheaper service. Very, very few people except heavy downloaders have been willing to pay much more for over 10 meg. 
     With two HD channels fitting in 7 meg and almost no sites effectively downloading at more than a meg or two, it's rare for most people to max out at 10 meg. For the small amount of time they might use higher speeds, many aren't willing to pay. I have empirical examples of surprisingly low high speed take rates from Sweden, France, Britain, Hong Kong, Japan, Korea, and California.  
  “Mark my words: Google Fiber is not a test, it's a takeover plan,” Jason writes. But Google’s way is to test, I learned from Steve Levy’s excellent book “In The Plex,” well worth the $16 from Amazon. So it makes sense they are waiting for confirmation from actual orders before pulling the trigger. 
     Some less reported datapoints about Google fiber:

• he box has two terabytes, enough for 500-1000 hours of HD video and/or a fine home music collection.
• It also has eight tuners, so it’s almost impossible to have a problem with too many simultaneous shows.
• ESPN, HBO and other networks are refusing to sell to Google at a price Google considers reasonable.
• It will not be close to the originally announced open access model, Stacey Higginbotham reports in an important article  http://bit.ly/PpVsw0. Scott Canon of the KC Star confirms that directly from Kevin Lo of Googlehttp://bit.ly/PltraJ. Jeff Baumgarten quotes Steve Effros open access “disappeared before they even dug their first trench" http://bit.ly/MzbPIU

   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
     I also wrote a Quick and Dirty Look at Fiber Economics. To summarize ~$1,000 per home passed to build, $5/month to operate. Assuming they get a decent take rate and meet their construction budget, Google will be profitable charging $70/month in Kansas City. But the payoff requires thinking more than three to five years, unlike most corporations. More data points http://bit.ly/TFRamO

*** New York September 24 Columbia University CITI 
The State of Telecom – 2012
The telcos - France Telecom, Deutsche Telekom, Swisscom, Telecom Italia
The politicos - Conroy of Australia, Strickling of the U.S. 
Some of the best of Wall Street 
All come together as the Broadband Commission comes to the U.N.  http://www4.gsb.columbia.edu/citi/ (psa)

Telehealth Results Modest http://bit.ly/MC3iUq
Were costs higher than benefits?
A 3,000 patient study of those chronically ill found hospital costs £188 lower and death rates probably reduced with telehealth monitoring.  The costs were carefully not revealed, but the cost/benefit ratio clearly disappointed the research team.
    Broadband “studies” often claim enormous financial benefits for telehealth. These typically are paid for by the carriers and used as arguments for large subsidies or other government favors. These “economists for hire” are often capable and articulate with strong academic credentials, although most of their work falls apart when closely examined. You can prove almost anything if allowed unsupportable assumptions, arbitrary choices of examples, or bad source data. This garbage flourishes because lazy reporters and policy advocates don’t check sources.   
   Clare Horton in The Guardian writes “The estimated scale of hospital cost savings is modest and may not be sufficient to offset the cost of the technology.. She goes on to quote Adam Steventon, one of the researchers “Investment in telehealth is often justified on the basis that it will reduce hospital cost. However, in this trial, the reductions in hospital admissions translated into only modest reductions in costs. These differences were not statistically significant, so could have been the result of chance.”
   My instinct is current telehealth methods are modestly valuable, although no more so than many other public health measures.  More, including the study abstract http://bit.ly/MC3iUq

*** 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)  

HD Headed Under 2 Megabits: H.265 High Efficiency Video Codinghttp://bit.ly/MXMi6J
4K Ultra HD also coming, for sets over 80 inches.
Those who think we need 50 meg and more for home TV haven't been tracking the improvements in video encoding. Most HD video watched in the U.S. is less than 4 megabits. A well-encoded Netflix version of The Tudors looks great at under 3 meg on Jennie's 50 inch TV . (I wouldn't have believed it either until I watched.) Two HD channels + plenty of web surfing fit fine in 12 meg; 20 meg easily handles three.
 The soon to be ratified HEVC standard is expected to double efficiency and further reduce the need for video bandwidth. The improvements are greatest at even lower bit rates, aimed at delivering video to mobile while using less capacity. Rick Merritt in EE Times thinks ratification may come in a few months although an MPEG press release targeted January. As far as I know, there is no reference encoder yet developed and practical chips are several years away. Merritt also reports chipmakers may hold back on design because as many as 500 patents may be involved. He notes Mediatek, Qualcomm and Samsung  are not interested in joining MPEG_LA and have essential patents. HEVC also includes coding for 4K "Ultra HD" screens, which will find little use at home for many years. Video expert Andy Setos believes few humans can distinguish between 720p and 1080i on a 40 inch monitor; the improvement from a 2048 line Ultra HD screen won't be visible except on much larger screens.
  Separately, the state of the art of H.264 continues improving. ATEME is releasing a new encoder, EAVC4, which they claim is 20% more efficient. Expect a slew of similar announcement as we approach IBC. http://bit.ly/MXMi6J

*** 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.broadbandworldforum.com (ad) Sponsored by ASSIA, Booth C23

Madness of Crowds? $500M Stock Drop on Ubiquiti Counterfeits http://bit.ly/R4uHAb
41% stock fall on Friday August 10. 
An ex-distributor has sold ~$40M of counterfeit Ubiquiti gear in an amazingly short time. Sales are falling dramatically below forecast. The speculators/analyst myth of guaranteed exponential growth is dead. Just a few months ago, Ubiquiti had a market cap of $3B, 10x annual sales. CEO Robert Pera emails me " Ubiquiti has been profitable every quarter since inception and just completed a $100mm+ earnings fiscal year.  I am confident we will improve on this in the years to come."
    Unlike most companies with market stories like this, Ubiquiti has outstanding products that are doing well. They make WiFi like radios that reliably deliver 1-4+ megabits amazing distances for $100-$300/pair. In the U.S. small wireless ISPs, mostly using Ubiquiti gear, have almost certainly connected more previously unserved homes with broadband than $billions of stimulus and infinite hot air from the FCC. Brazilians and Africans also are putting the radios to good use. Their new AirFiber is 100+ megabit wireless for backhaul at less than $3,000/pair.   
     Before the news broke, I had written but not yet published ‘It’s a very dangerous stock to play with wild price swings unrelated to the underlying business. The latest is price swings of over 10% in a day both up and down with no obvious news. That usually means a gang of hedge funds and other sharks are manipulating the stock. Some “pros” get rich that way; most “pros” fail when their luck runs out. Almost all others should keep away, except long run investors who have good reason to believe the stock price is well below the real value of the company. That certainly wasn’t true a few months ago, when the market cap was over $3B; the current market cap of ~$1B is more sensible but I haven’t done enough research to evaluate it.’ Glad I hadn’t published something that optimistic. While I suggested avoiding the stock, I certainly hadn’t predicted this.
    None of which may be conclusive given how cheaply and effectively small Ubiquiti radios connect people in rural areas. 

corrections: do send

email

• A small telco CEO writes about the problem of many U.S. telcos. “When talking yesterday to a well regarded Colorado broker who sells spectrum, works with little telco's, he said one third of his many rural telco clients are underwater, worth less than their RUS debt, with cash flow insufficient to pay RUS loans, selling spectrum to raise cash. Scary, but under-recognized. He said many are coops, who aren't sophisticated enough to see the trouble they are in. Meanwhile FCC Chairman is in fat city, because the rural companies he has so badly f,..d are silent.” I replied “The problem is no one in D.C. can figure out how to separate appropriate from inappropriate subsidies. There's some places you need the subsidy and many others (Century, Frontier included) where it's an abuse of public money.”

briefs

• Maybe competition isn’t such a good idea?! The Arizona regulators voted 4-1 to let Century-Qwest raise rates 25% in three years because they found the state was “competitive.” Wasn’t the point of competition to bring down rates? Maybe they should listen to Alabama Commissioner Twinkle Andress Cavanaugh. “I call myself the working commissioner because I am at work every day striving to keep Alabama’s utility rates some of the lowest in the nation.” Arizona’s Sandra Kennedy voted against the increase.

press

• Teresa Mastrangelo at Broadband Trends traces Verizon’s plans to off copper and DSL back to 2005. Well and good, but we need to make sure to take care of the customers involved. http://bit.ly/O4Y2VZ
• 50M cable modems for China in 3 years? Tony Brown of Informa found that prediction in government plans for Broadband China, which allocated 20% of 250M broadband homes to cable. Brown also expects  the main driver will be an alliance of the new CRTN aggregated cable distributors and China Mobile. The 150M Chinese cable subscribers - nearly none of whom have modems - have long been the sleeping giant of world broadband. But despite talk of “convergence” including cable modems at the Central Committee level, little has happened. The general explanation is that MIIT - which controls the telcos - has blocked SARFT, the TV regulator. I’ll wait for results before believing any of this. http://bit.ly/RjMRQU

people

• Hamid Lalani won for Alcatel one of the largest contracts ever awarded in broadband, SBC’s Project Pronto in 1999. He went from Alcatel to Aktino and now has signed on to market Talescent. Their primary product is LightStitch, an fiber optic automated patch panel capable of switching 1008 x 1008 ports. Talescent has Verizon as a reference customer and with Hamid is ready to make a big splash.

wall street

• Craig Moffett writes “The thirst for yield has already pushed the large cap TelCo stocks to unreasonably high valuations that are out of touch with any fundamentals, real or imagined.” He’s writing about the U.S.; several Euro telco prices plummeted so far the current rally may have legs.
• Infineon apparently isn’t investing in its future or advancing their customer’s products. Per Marketwatch, “Infineon to cut investments to safeguard margins.” The chip business is so competitive you can’t do that without paying a price. But CEO Peter Bauer doesn’t care about the year after next; he’s retiring the end of this year and the stock price now probably affects his retirement income.

policy

ITU Secrecy Disappearing as U.S. ITAC Open to All http://bit.ly/QGuCCK
Join me and make a difference. 
303,000,000 Americans have just been offered access to the notoriously secret ITU WCIT documents. Just join ITAC, the State Department International Telecommunications Advisory Committee, and enjoy access. “It takes a simple email to Mr. Julian Minard, with a request to be placed on the ITAC listserv, based on some material interest in a given topic,” Paul Najarian of State writes. Simply send an email to join ITAC_Listserve_Requests@state.gov and you automatically have access to ITAC. That's actually proving true, and email me if you need details how to make this work for you. Until now, no one knew about it so almost no one applies except insiders. It’s really that simple. I’ve recommended three people and they were all treated respectfully.
    Uncle Sam wants you, as  Ambassador Terry Kramer confirmed to me in a brief phone call. “We welcome all interested stakeholders to participate in our WCIT preparatory process and help the U.S. Government form positions in advance of the conference.  We solicit this input and feedback through the United States International Telecommunications Advisory Committee (ITAC).” His colleague, Ambassador Phil Verveer testified to Congress, that ITAC is “open to all interested parties to review and advise on the regional and national contributions to WCIT as they are submitted.” 
   To my amazement, the discussions are substantive. With almost no one outside the system, it's become a convenient forum for State to share information with NTIA, FCC, and others, as well as two dozen or so corporate people who are on the inside. So it's actually a useful point to express your opinion. Being on ITAC gives you access to the main ITU and WCIT documents, along with a painful number of exceedingly boring emails. The meetings are in D.C. at State and generally have call-ins. 
   Until recently, I was the only person speaking at most meetings who wasn’t part of government or have strong corporate ties. No one else spoke up, for example, when U.S. proposals for NGN resembled a blueprint for the Great Firewall of China. (Our security agencies have similar requirements.)
More, including Kramer's note http://bit.ly/QGuCCK 

*** New York September 24 Columbia CITI The State of Telecom – 2012
The telcos - France Telecom, Deutsche Telekom, Swisscom, Telecom Italia
The politicos - Conroy of Australia, Strickling of the U.S. 
Some of the best of Wall Street 
all come together as the Broadband Commission comes to the U.N.  http://www4.gsb.columbia.edu/citi/ (psa)

State Department Actively Reaching Out to Public Knowledge & Othershttp://bit.ly/RVFKLQ
Looking for civil society support at ITU. 
“The USG did reach out to us and that is good,” Rashmi Rangnath of Public Knowledge emails. “They are certainly interested in hearing what we have to say.” Another key D.C. public interest group confirmed to me State was reaching out to them as well. 
     AT ITU and WCIT discussions, the U.S. "multi-stakeholder" model is just a veneer on corporate interests. A Verizon lobbyist sits on the board of ISOC, where’s he joined by a Comcast engineer; Comcast went to court to oppose even the very weak U.S. neutrality rules and led a massive lobbying campaign against neutrality.  Another Verizon lobbyist is on the official U.S. delegation to WTPF.  The U.S. ITAC until recently had dozens of corporate representatives and essentially no one from civil society.
   Terry Kramer, the head of the U.S. delegation to WCIT comes from Vodafone/Verizon. The State Department lead, Ambassador Phil Verveer, is a former Verizon/AT&T/USTA lawyer, although Verveer is rumored to be a lame duck these days. His telco ties certainly didn't hurt his chances for the job. Probably more important was that he and his wife were friends since college with Bill and Secretary of State Hillary Clinton. 
     Visibly good relations with NGOs is crucial for U.S. credibility. More, including a reprinted commentary from Gigi Sohnhttp://bit.ly/RVFKLQ

*** At the Broadband World Forum, make sure to visit ASSIA in Booth C23. Delivering the Broadband Future with DSLhttp://www.assia-inc.com/ (ad)

Blackberry Gives Indian Government Full Decryption Keys? http://bit.ly/NpnQOe
RIM denies corporate Blackberries are tappable.
India has wanted total wiretap ability on Blackberries since the Mumbai attacks in 2008 but the company has been resisting. Since RIM obviously provides similar to the U.S. government - we wouldn’t allow them to operate otherwise - the grounds for resisting the Indian government demands were unclear. According to the Economic Times, RIM is now providing “encryption keys for its secure corporate emails and popular messenger services ...  satisfies India's core demand that RIM provide intelligence and security agencies with automatic solutions to monitor all communication on BlackBerry smartphones on a real-time basis.” Their source was inside the Indian government. 
    RIM denied this story to Reuters, which is why I added the question mark to the headline.  Truth is elusive on most deep security issues. Blackberry has fallen far behind iPhone and Android. Asia, especially India, is the only strong market for RIM. It’s hard to imagine they continued to resist the government threat to totally shut them down. They have ambitious plans to come back, which Jennie documented for them at http://www.blackberryappsproject.com/ 
    This kind of security  issue underpins the real fight at WCIT over who controls the net. 

First Look: Another $30M RUS Loan Hits the Dust http://bit.ly/Prmzqz
WiMAX provider Mainstreet Broadband shuts down suddenly. 
1,200 homes in Decatur County, Georgia may be shut down at any time, as Broadband South LLC d/b/a Main Street Broadband ceased August 1st without notice. They've apparently been in trouble for a while, as I expect to confirm if RUS releases the data. Jonathan Adelstein, who has to clean this one up, didn't make the loan. He inherited it from Hilda Legg, who made a slew of loans valuing rural wireless providers at $3-5K/likely subscriber. Many are unsustainable. 
    In March, I wrote that RUS writeoffs could easily reach $300M, hoping to be proven wrong. A friend in rural telephony forwards a comment "one third of his many rural telco clients are underwater, worth less than their RUS debt, with cash flow insufficient to pay RUS loans, selling spectrum to raise cash. Scary, but under-recognized." I suspect that's exaggerated, but clearly we're not out of the woods. 
   Decatur County added $2.5M for local service, which despite a big marketing push only attracted 1,200 customers. That's possibly not even enough to pay for the tower rentals and backhaul, although Justin Schuver at the local paper reports they are trying to salvage the network. Most of Mainstreet customers appeared to be in small cities where they had the choice of DSL, cable or both. It's very, very hard to win customers to fixed wireless in that case. 
   Congressman Cliff Stearns was right subsidy money is best spent on reaching the unserved.

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Volume 12, #7 August 15, 2012

July 20

• McAdam Of Verizon: We Will Turn Off Almost All Copperhttp://bit.ly/O3WoHC
• 20% Of U.S.: Satellite Or Leavehttp://bit.ly/Nhmvtq
• Adtran, Calix: Clobbered By Unrealistic Wall Street Expectationshttp://bit.ly/NDh48o
• ECI: Essentially Every Telco RFP Wants Vectoringhttp://bit.ly/MXLPBB
• Q1 Ukraine Surges To Top 20 Growth Lead http://bit.ly/QpaeEd
• Ireland's Crisis Leads To DSL Drophttp://bit.ly/Li3SDK
• Three Kings Deposedhttp://bit.ly/MA6n9N
• ZTE, Huawei Convicted In Absentia Of Algerian Bribeshttp://bit.ly/QhWAp7
• Retracted: Divide to Conquer: 3 LTE iPhones not 1 model for the worldhttp://bit.ly/xHQZs4
• ITU: "Members Free To Publish Any Documents" - And They Will, I'm Toldhttp://bit.ly/LDeqRx
• Briefs: It's Fiber And Always Will Be. Sure, Ian Blaine, shout out to Point-Topic, 41 megapixel Nokia 808 phone, typical hacker 'ages out', Graham Finnie om unbundling, Marguerite Reardon, Times “At some level Wall Street, too, is a confidence game."

“All Member States are free to publish any documents they see fit” An ITU official. I hear the secrecy around the ITU and the new Internet treaty is about to break down dramatically. at end 

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Lowell McAdam of Verizon is joining AT&T in looking to shut down rural landlines, even where there is no wireless. Several million people live in the 20% or so of the U.S. without wireless coverage and deserve protection. With satellite the only choice, some will instead move from their homes. Allowing VZ & T to abandon these people without providing a decent alternative is unconscionably bad policy. 
   Verizon also wants to eliminate copper to 15M urban homes in FIOS territory. Sounds reasonable until you discover that Verizon has raised the minimum FiOS broadband price to $70/month. That's equally unconscionable. Government setting basic prices is a bad alternative, but the market is clearly broken. It's unacceptable for government to do nothing when U.S. telcos and cablecos signal each other to raise prices to twice the level of many other countries.
-----------------------------------------
Meanwhile, British Telecom, Verizon and many others have significantly cut investment. That's leading to agony at telecom equipment makers. I write below of Adtran and Calix. ZTE, Huawei, Alcatel and now Ericsson are showing dismal results. Bob Atkinson at Columbia wrote two years ago that telecom spending would be flat and down as most companies went into "maintenance mode." Call him Cassandra. Call CEOs that assumed growth would never stop foolhardy. The ubiquity and speed of the downturn is extreme, however; this is more than a secular trend. My first thought is profound income problems at the telcos, being covered up by capex cuts, but that’s not confirmed. 
   This issue is dedicated to Eskinder Nega, journalist/blogger jailed for 18 years. http://bit.ly/MKW7WY 

McAdam Of Verizon: We Will Turn Off Almost All Copper http://bit.ly/O3WoHC
New York, Washington and 20M+ Lines “Killed.” LTE at $60 minimum rural, FiOS at $70 urban. 
“Every place we have FiOS, we are going to kill the copper. We are going to just take it out of service,” CEO McAdam is completely clear. “Areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there.” 
   Verizon is going to shut down the copper phone network for 18M homes with FiOS and millions more in rural areas they serve with LTE. I believe they also intend to shut down the copper network where neither they nor anyone else offers a wireless alternative.  “It is not sustainable to keep having copper plant out there,” says CEO McAdams. “We have got parallel networks in way too many places now, so that is a pot of gold in my view. So margins can improve.” 
    Lowell is right it's illogical to continue the copper network where fiber is available. Far better to save money for everyone while efficiently sharing the single network.Under present rules this sensible change would be a disaster for many. DSL prices have been from $15-35 for most people, although Verizon has recently raised their minimum to about $50 by requiring a voice line. FiOS prices now begin at $70. This makes a mockery of "affordable broadband," especially when Verizon and AT&T are boycotting the plan for discounts for poor schoolchildren. The detente between telcos and cablecos means the prices of modest Internet speeds (3-15 megabits down) are typically going up from $30-45 to $55-70. 
    In addition, competitors who now share the copper network will typically be totally $@$#$@.  morehttp://bit.ly/O3WoHC


20% Of U.S.: Satellite Or Leave http://bit.ly/Nhmvtq
"Buffalo Commons" as people leave? 
Lowell McAdam of Verizon is echoing AT&T’s plan to shut down millions of rural lines, many where wireless service isn’t available. “Areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there.... It is not sustainable to keep having copper plant out there.” What Lowell didn’t say, but is almost certainly true, is that they will also shut down the phone lines where neither they nor anyone else offers local service. As far as I know, this will be the first large area anywhere in the developed world without terrestrial service. Anyone who’s ever used a satellite phone knows it’s awful for primary communication.
    AT&T’s $100M/year lobbying machine has succeeded in eliminating “carrier of last resort” in Florida, North Carolina, Texas, and Wisconsin.   Somewhere between 10% and 30% of the land area of the U.S. is not planned for LTE or other wireless coverage. The "satellite or leave" area is huge but secret. Verizon’s LTE is planned for 97-98% population coverage, a great thing. But the remaining 2% is millions of people and an enormous area. Tom Evslin of the FCC Technical Advisory Committee has it right. “Make sure that everyone has the Internet and/or cellular service as an alternative. Everybody means everybody who today has access to the phone network. Everybody, not just 95%.”
   High prices, unacceptable service choices and further rural depopulation are bad policy.
Update 7/17: Tom Evslin writes "I think the article somewhat misunderstands the message of the TAC (for which I am NOT a spokesman). We didn't recommend that the FCC kill the PSTN; we recommended that it recognize that it is dying for the very important reason (covered in your article) that many people will be lefty without coverage. A sunset date for the PSTN is the date by which everyone who now has PSTN service must have some alternative; it's a deadline for action. I totally agree with you that satellite is NOT a viable alternative. http://bit.ly/Nhmvtq

*** On behalf of everyone at ASSIA, I’m delighted to welcome China Telecom Jiangsu to our growing list of customers worldwide. John Cioffi, CEO, ASSIA. (ad and below.)

Adtran, Calix: Clobbered By Unrealistic Wall Street Expectations http://bit.ly/NDh48o 
CALX - 33%, ADTN - 21% in two days. 
Profits dropped at Adtran followed by a sales warning at Calix. The problem is disappointing orders from several U.S. telcos. Both are respected for good products and good support but some quarters like this have been inevitable for a while. U.S. telcos are cutting wireline spending to well below depreciation. The price drops aren’t proportionate to the news. 
   The price moves are best explained as implying the street had unrealistic expectations.  I’ve been reporting for several years that wireline capex is dropping and further broadband builds limited. Some investors may have been confused by the rhetoric from D.C. about support for more broadband. That’s just politician talk. Verizon essentially ended FiOS and U-verse currently is ending at AT&T. Even worse, the $7B broadband stimulus is mostly being squandered, judging by how little is actually built or even planned. 
    Both companies have the resources to bounce back after weak quarters. Adtran is a solid company with total debt less than cash on hand and short term investments. The “miserable” second quarter showed a profit of $21M.  They’ve been profitable each of the last fifteen years. Capital spending is low ($11M in 2011). That may be because much of the R & D is treated as a current expense, a good conservative practice. 
   Adtran’s solid products and reliable traditionally allowed them to charge above-market prices. That’s much harder now.  Shadgan Kheradpir at Verizon was so aggressive using their clout to bring down supplier prices Tellabs turned down FiOS contracts. AT&T also toughened up on suppliers. With almost half of the U.S. market, they offer suppliers “take it or leave it” price demands. Supplier margins across the industry have been going down.
   Adtran long has relied on a very profitable but obsolete product - T-1 lines for big carriers. much more about the companies http://bit.ly/NDh48o

*** 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)  

ECI: Essentially Every Telco RFP Wants Vectoring http://bit.ly/MXLPBB
Shipping vectored DSLAMs to Latin America carrier. 
Only a few thousand customers around the world have vectored service but the results are promising. Ariel Caner and Danny Benchaim of ECI tell me essentially all major international bids today require vectoring capabilities. If the boxes are close enough to customers, they easily deliver the 100 megabit speeds the EU has set as a 2020 target. The extra hardware to vector is primarily a dedicated processor or two. As competition develops the per line premium for double-speed vectored gear will become small. It makes sense to future-proof even if vectoring isn't a near term offering. 
   Israeli company ECI is supplying many of the DSLAMs for British Telecom. Even without vectoring BT is selling "up to 40 meg" and even "up to 80 meg" and by being careful where they sell it have generally delivered closed to the promised speeds.  Vectoring in England faces a tough regulatory battle because if not done carefully competitors will be squeezed. Similar fears are relevant and need to be addressed in Germany, France and Poland.
   Any reader willing to give me an off the record briefing on Brazil/Latin American DSL market? I hear from many exciting things are happening but there isn't much reported in English.  Email daveb@dslprime.com if we can do a call.http://bit.ly/MXLPBB

*** 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)

Q1 Ukraine Surges To Top 20 Growth Lead http://bit.ly/QpaeEd
16M net adds to 600M. 
Ukraine saw 27% annual growth to 5.5M connections according to the latest figures from Point-Topic and the Broadband Forum. Some highlights:

• China, Russia, Brazil and India as well as Ukraine. All grew between 18% and 27% in a year.
• Chinese growth continues extraordinary. 6.8M in the quarter, 26.3M for the year.
• At current growth rates, Russia will pass France within the year and Germany in about two years to reach #4 in the world, behind China, the U.S. and Japan.
• DSL had 4 times as many net adds as cable.
• Point-Topic has 21M net adds for FTTx for the year and only 3M FTTH. The only way that figure makes sense is if a huge percentage of China's connections are fiber to the basement and some kind of copper to the apartment, which they now include in FTTx. I'm checking with them if that is so. Quarterly growth of about 16M is similar to the prior quarter.
• Italy and Spain were below the European average, consistent with economic problems. But the difference is slight, one more datapoint that broadband is becoming so crucial that most people will pay whatever it takes to be connected.

    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

*** 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/

Ireland's Crisis Leads To DSL Drop http://bit.ly/Li3SDK
14.8% unemployment, youth emigration. 
The drop was only a few thousand lines, which could be explained by the 10,000 or so Irish who emigrated during the quarter. Ireland had long been a broadband backwater, as (closely involved) governments protected Eircom’s near monopoly and high prices. After years of stock manipulation and underinvestment, Eircom finally couldn’t pay their debt and went broke. UPC cable has doubled their market share to over 20%, as slow DSL wasn’t enough to compete.
     Eircom is now emerging from bankruptcy with Blackstone as largest shareholder. About $2B in debt was wiped out. They are about to fire 1,000 workers but have promised to invest in upgrade both DSL and wireless networks. Ireland has beautiful countryside but the bulk of the population is just a few cities not particularly difficult to serve with advanced DSL. If Blackstone wants to hold on to customers, they will likely soon propose a VDSL/fiber build; with vectoring, that could quickly bring 50-100 megabits to half or more of the homes. More, including the government data http://bit.ly/Li3SDK 

Three Kings Deposed http://bit.ly/MA6n9N
Out: Christian Wolff of Lantiq, Kevin DeNuccio of Metaswitch & Dado Banatao of Ikanos. In: Dan Artusi, John Lazar & Omid Tahernia. 
Christian Wolff, one of the most respected executives in the chip business, couldn’t deliver on the hopes of his buyout partners. Kevin DeNuccio, brought in to lead an IPO at Metaswitch, ran into a tough IPO market and customer order cutbacks. Dado Banatao, now a VC, didn’t match his near legendary record running chip companies as he hands off to Taheria as permanent CEO. 
     A slowing telecom market in a slow world economy is the real reason these companies are struggling, not the weakness of the people involved. When Kevin was hired at Metaswitch only two years ago, they predicted “"As the economy eases out of recession, Metaswitch is poised to emerge as a significant player with global scope. This is a tremendously exciting prospect.” Kevin had shaped Redback into an attractive takeover candidate and sold it to Ericsson. The economy has gone into deeper recession. The IPO didn’t occur. John Lazar, a 25 year company veteran, has taken back the CEO job. 
     Dan Artusi, taking over Lantiq, not long ago was CEO at competitor Conexant. Wolff had been optimistic about rapid development of G.Hn and 802.11n 3x3, both of which have been disappointing. Cycles are getting longer in chip design with increased complexity and high costs. When a mask set costs millions, you need to spend additional time eliminating problems. The high cost of a redesigned mask makes fixes slower in turn. Meanwhile, the key Chinese customers have been moving some of their deployments from DSL to fiber, reducing the overall market. 
     Dado passing on the job at Ikanos is no surprise. He’s spent decades running companies and obviously prefers investing rather than the day to day grind. Terhernia, like Artusi, is a 20 year veteran of Motorola. It will be interesting to see them compete.  
     A Juniper engineer just told me, “we’ll be fine as soon as things get back to normal.” That made me fear for his company, because the old “normal” may never come back. Growth in Internet traffic has definitely slowed. Per user, it’s closer to 25% instead of the historical 35-45%. Moore’s Law continues to drive down the cost per bit at a similar rate, so dollar growth in sales is limited.   http://bit.ly/MA6n9N
    There’s still plenty of opportunity in a business that generates $hundreds of billions every year, but counting on a growing pie is foolhardy. 

ZTE, Huawei Convicted In Absentia Of Algerian Bribes http://bit.ly/QhWAp7
$12M laundered through Luxembourg, British Virgin Islands. 
Dong Tao, Chen Zhibo and Xiao Chuhfa face ten years in jail in the unlikely event they are extradited to Algeria. ZTE and Huawei have been banned for two years from Algerian government contracts. Mohamed Bukhari, once an aide to the CEO of Algerian Telecom, has been sentenced to 18 years. The charges date back a decade, to a period when Alcatel, Siemens and Lucent were massively bribing officials and executives around the world. The Chinese presumably believed they had no choice if they wanted to compete and did what so many Western businessmen do.

 El Watan adds that Algerian customs authorities are seeking almost $50M from ZTE. Reporters across Africa are retelling stories of Huawei difficulties from Uganda to Angola, some undoubtedly inspired by a backlash against Chinese success in Africa. The news stories also highlight how Huawei was blocked from Australia’s NBN. NBN is led by Mike Quigley, who once led a division of Alcatel that paid tens of millions of bribes. 

  Hard to believe Quigley, a hands-on manager, never know where so much money was going.



Retracted: Divide to Conquer: 3 LTE iPhones not 1 model for the worldhttp://bit.ly/xHQZs4
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.
From the original: 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. … http://bit.ly/xHQZs4

Briefs

• It's Fiber And Always Will Be. Since 1988, the common wisdom is that copper will be replaced by fiber nearly universally in a couple of decades. It's now 25 years later, and 400M homes get broadband over copper rather than fiber. Jochen Maes reviews some distinguished earlier contributions. Great illustration at http://bit.ly/N5KYyx
• "Big deals are being struck between content holders and distributors that maintain the [pay-TV] model for the foreseeable future, so that means you won't see something that replaces it.”- Ian Blaine, CEO of online video distribution suite provider thePlatform, in an interview with Jeff Baumgartner, Light Reading, June 21, 2012 Via Bernstein
• A shout out to Point-Topic for the extraordinary data they provide on broadband. Working on my “what will be” I for the first time looked closely at their five year forecasts. Good, sensible work. They are priced for corporate users, but compared to other analyst firms their rates are reasonable.

Press

• Chris Davies of Slashgear got a chance to work with the 41 megapixel Nokia 808 phone. It’s a lousy phone but he found the camera so extraordinary he compared it to a DSLR. Sony’s billion dollar new CMOS sensor factory is almost certainly being built to provide Apple with something competitive for the IPhone. 1080P will be just the starting point for the Iphone, although the new Sony sensors will probably not be ready for the iPhone 5 now entering manufacturing.
• From Slashdot, a perspective. "Hackers/crackers who get arrested are typically male and young adults ­ if not minors. Why is that? According to research by online psychology expert Grainne Kirwan, it's because the typical hacker 'ages out' once they get a girlfriend, job, kids, and other responsibilities that make it difficult to maintain their hacking/cracking/hacktivist lifecycle. Could that finding offer a way to help keep more young hacking enthusiasts out of jail?" http://www.informationweek.com/news/security/management/240003767  
• Graham Finnie of Light Reading is a tech analyst, not a policy advocate. In Europe, however, even tech analysts are clear about how crucial unbundling has been for competition. DSL unbundling in Europe has been “highly successful,” Finnie notes. “64% of EU lines are fully unbundled.” He fears advanced DSL “is not well-aligned with LLU,” and sub-loop unbundling “has failed to find a market except in small niches.” 
• Marguerite Reardon picks up a very odd company claim, that “Verizon is working hard to monetize the capital it's spending on its fiber-to-the-home Fios network” as the reason they are raising prices. Verizon has virtually ended building FiOS, of course, and cut overall capex. Verizon is raising prices for a simple reason: they want to make more money and competition is too weak to stop them. If capex determined prices, they would be falling.   http://cnet.co/LgCsfB

Wall Street:

• Andrew Ross Sorkin writes in the Times “At some level Wall Street, too, is a confidence game.” He goes on to speak of “the highly sophisticated, often endemic, fraud that still lurks on Wall Street.” My reporting takes me close to many of the best on Wall Street. They are proud when their analysis leads to even small advantages over the market averages. Anyone who claims to be able to do much better than that without inside information is a cousin of Bernie Madoff’s. If they have a record which “proves” they earn far more than the averages, it’s almost guaranteed to be luck, leverage, and risk.

ITU: "Members Free To Publish Any Documents" - And They Will, I'm Toldhttp://bit.ly/LDeqRx
First Look. Despite government doubts, Touré looking to open. 
Credible rumors are that several countries will release all the WCIT documents even if the ITU Council refused to do so.  This is a smart move to defang opposition to the WCIT treaty, coming in force from both right and left in the United States. Opposing a powerful treaty being conceived behind closed doors is easy for anyone. It will be far harder to rally support against the actual provisions, nearly all of which are cloaked in obscure diplomatic language. Most will be so abstract no one can be sure what they mean or why to oppose them. Few will read all the documents because they are incredibly boring.

    A spokesperson emailed me “all Member States are free to publish any documents they see fit as part of their national consultation process.” Emphasis in the original. She added “ all ITU members have always been free to share any of the WCIT docs as part of their own consultation process, entirely as they see fit. Conservative FCC member Rob McDowell is leading the charge on the right. Cynthia Wong, director of the Center for Democracy & Technology's Project on Global Internet Freedom, has brought together civil society and consumer advocates. The U.S. House of Representatives unimously passed a resolution and Vint Cerf himself wrote an NY Times     Touré’s primary concern is getting consensus on the new treaty, with the details less important. The treaty establishes that the ITU should set the rules for the net. They have neither the power nor the staff to enforce the regulations. To the extent they will “rule” it will be indirectly through national governments. The latter lets them claim “We won’t be regulators” although the whole exercise would be meaningless if they weren’t confident many nations would follow the ITU lead. 

  The ITU is also opening up to direct participation by non-governmental civil society organizations. This hasn’t been publicized but “It should be noted that all civil society organizations, of an international nature and who are working on issues related to information and communication technologies are entitled to join the ITU as members. Indeed several such additional entities were welcomed into ITU this year, and their membership fees were waived; this was supported and endorsed by the ITU Council.“is official policy.

    ISOC, The Internet Society, is already at the table. I urge anyone concerned with Internet governance to immediately join ISOC and the ITU 2012 mailing list. It’s free to become a member. Then go here. Check the box subscriptions, members only, and there ITU 2012. 

From our advertiser:

ASSIA WELCOMES ITS FIRST CHINESE CUSTOMER, CHINA TELECOM JIANGSU

On behalf of everyone at ASSIA, I’m delighted to welcome China Telecom Jiangsu to our growing list of customers worldwide.

China Telecom Jiangsu has begun to use ASSIA DSL Expresse software to manage millions of DSLs across Jiangsu Province as part of its continuing effort to provide the best possible service to its customers.

ASSIA solutions bring the latest technology to this leading telecommunication provider and support the fiber-to-the-home mandate with powerful features that help optimize existing DSL and identify priority lines for fiber deployments. 

Currently, there are nearly 120 million DSL subscribers in China, according to the World Broadband Statistics report for Q3 2011 by Point Topic, and ASSIA can help ensure they have access to high-speed broadband.
 John Cioffi,  CEO and Chairman, ASSIA, Inc.
July 17th, 2012

Volume 12, #6 July 27, 2012  Reply "subscribe" to be added, "un" to be dropped

May 16

• Middle of England: DSL live speeds of 80-120 megabits http://bit.ly/KILd52
• VDSL/Fiber: Tens of Millions of Lines in Germany and Italy http://bit.ly/KoQuPQ
• Ericsson dropping the DSLAM line http://bit.ly/JWc8uX
• DSLAM shipments up 10% Q4. VDSL + 25% Y/Y http://bit.ly/Kqbrrc
• Alcatel: Vectoring in the wild http://bit.ly/J3Qh21
• It's the Microfilter, Stupid http://bit.ly/J70YVd
• Briefs: Sandwich Islands, Calix, Zhone, Vint Cerf, Jeff Gerth, Robin Bienenstock

“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.

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Hamadoun Toure of ITU will likely become czar of the net in December. The BRICs - Brazil, Russia, India, China and the South - are demanding ITU replace the U.S. institutions that have nominal authority. There’s a war brewing. The U.S. is fighting back with a public manifesto http://bit.ly/IWz6xQ and private diplomacy. From an insider comes word, “WCIT will almost certainly approve a new management structure for the Internet. It seems unstoppable.”
   Most of us want governments as far away from the net as possible. We, and many governments, also believe in universal broadband, help for the poor, better security and privacy protection. No easy solutions. Much more to report, beginning with a special policy issue next week.  http://bit.ly/IWk2Sd
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VDSL/fiber is heavily replacing planned fiber all the way home in Germany and Britain. While DT and BT continue to talk as though fiber home is a major part of their build, it’s become an increasingly small fraction. Vector-doubled speeds make VDSL/fiber ever more attractive, often reaching 50-100 megabits. Next, France Telecom is lobbying hard at ARCEP to do similar. Malcolm Turnbull, likely within a year to become Minister in charge of the NBN, made a speech at BBWF urging Australia make the same change. (Details, next issue) It’s always been cheaper to use copper the last 500-1000 meters, keeping capex down. I call this the Cioffi Flip, because John Cioffi of ASSIA has been urging all the fiber builds to include more DSL. My bias is for the gigabits of full fiber wherever practical, but the savings in using existing copper are also attractive. 
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DC, Monday 21, a can’t miss event opens with Vint Cerf, goes on to Susan Crawford, Blair Levin, Michael Marcus, and Michael Copps. Network builders and others join the panels. David Isen’s labor of love, the Freedom to Connect Conference, continues Tuesday with 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/

     Join me June 6th at the Linley Carrier conference in San Jose. I’m leading a two hour panel on what carriers around the world will be doing the next five years that I intend to load with surprising data. It’s free for system designers, network-equipment vendors, OEM/ODMs, carriers/service providers. Do come http://www.linleygroup.com/events/register.php?num=19

*** 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

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Jules Genachowski has the opportunity to go down in history as the man who shut down a million families' telephones and ended universal service. On a fast track to be rammed through in 90 days, the Big Telco Plan proclaims "Let them eat satellite!" If the telco determines reaching you is too expensive, they can say "fuggedaboutit" on both voice and broadband.
      That's invisible in the press releases and six page letter to the FCC from 6 big telcos so not in the first news reports but is clear if you read the 159 page proposal. I can't believe the D.C. reporters will ignore this one; if so, expect a firestorm.
    Especially since it doesn't actually propose adding more broadband, raises phone bills by $Billions, and produces a windfall to the Bells of additional $Billions from eliminating intercarrier compensation.
   Carol Mattey, the $150B woman in charge at the FCC, has said she will not accept the proposal unless it helps consumers. Shutting down a million phone lines and raising prices by $billions does not help consumers.
   As always, happy to share notes and sources with any interested reporter. There's much more to the story than I could write without missing a flight to the Montana State Telco Association Conference. They promise to teach me fly fishing.