Fast Net News, DSL Prime, DOCSIS Report

April 1st selected stories

• The Russians are Coming
• They're taking over the Internet according to FCC Commissioner Rob McDowell.
• CEO Frank Esser fired at France's #2 for not dropping prices fast enough
• Watch What You Say
• Gigabit wireless working in Sweden
• Crime blotter: Death penalty in China, Philippine ex-Pres in jail, In U.S., CEOs untouched
• Gigabit fiber for $35/month in Vermont
• AT&T - Let them use Satellite Phones
• Telcos New Profit Center Police and Surveillance
• iPad 4G works on 10% of 4G networks.
• Telcos New Profit Center Police and Surveillance
• “FCC Chairman does what Jim Cicconi tells him too” Commissioner
• Verizon "Follow your conscience"

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The Russians are Coming
They're taking over the Internet according to FCC Commissioner Rob McDowell.
In testimony before Congress, McDowell warns that the Russians, fronted by ITU and supported by the BRICs and Eastern Europeans, want to take over the Internet.
"Today, however, several countries ...want to renegotiate to:
• Subject cyber security and data privacy to international control;
• Allow foreign phone companies to charge fees for ‘international’ Internet traffic, perhaps even on a ‘per-click’ basis for certain Web destinations
• Impose unprecedented economic regulations such as mandates for rates, terms and conditions for currently unregulated traffic-swapping agreements known as ‘peering;’
• Establish for the first time ITU dominion over ICANN
"These efforts could ultimately partition the Internet while devastating global free trade and rising living standards."  http://bit.ly/HKwG7v


CEO Frank Esser fired at France's #2 for not dropping prices fast enough
CEOs are expected to squeeze every bit of profit, so cutting prices is usually career-limiting. In Paris, that turned upside down with Frank Esser's firing for "not doing enough to anticipate Free Mobile."  Xavi turned on France's fourth network and cut prices in half to 20 euro for "unlimited" voice, data, and texts. SFR is hemorrhaging  25,000 customers a week.  http://reut.rs/HG3W1t
   Drastically cutting prices is the only way he could have made a difference. He might have been fired for that, however.

   
Watch What You Say
Deep in the Utah desert, the National Security Agency is building the country's biggest spy center. It's the final piece of a secret surveillance network that will intercept and store your phone calls, emails, Google searches ... http://bit.ly/H8NuEy

Additionally, “The government will be able to monitor the calls, emails, texts and website visits of everyone in the UK under new legislation set to be announced soon." http://bbc.in/H8Rb0I

Gigabit wireless working in Sweden
12 megabit LTE is nothing compared to what's starting to deliver in the field. Ericsson's delivering 900 MHz in Stockholm, the proof is in the video http://bit.ly/HLeBVs (worth clicking to) Speeds will go up to nearly a gigabit and a half when full standard LTE Advanced reaches production in 2-3 years. Using eight small antenna (8x8 MIMO), up to 100 MHz of spectrum and a slew of improved techniques will increase network speeds 1000% over the best current LTE networks in four years or less. While that gigabit is shared, the performance will be awesome.
    Telcos whose engineers are still struggling to meet demand are strategically thinking "relative surplus" in the near future. Reducing competition is top priority to keep prices up, worth $39B to AT&T.

Crime blotter:
China Mobile Vice Chairman Zhang Chunjiang  has been sentenced to death for taking bribes http://nyti.ms/HLsbb6
Philippine ex-president President Gloria Macapagal-Arroyo and her husband Jose Miguel were allowed to post bail in the $329M ZTE broadband bribe case. http://bit.ly/H80DAJ
CEO Randall Stephenson and other AT&T officials face no jail time for $16M of abuse in the Nigerian scam http://on.wsj.com/HGgaHo Deutsche Telekom CEO René Obermann faces no sanctions after apparently perjuring himself before the U.S. Congress http://bit.ly/H359N1 as well as a home search under warrant in Germany.

Gigabit fiber for $35/month in Vermont
Chattanooga offering $350 gigabit fiber is impressive but Vermont Tel's $35 makes this an "every home" offering. With stimulus funding for much of the construction, VTEL has begun building true gigabit point to point fiber to 22,000 homes for $35. The first local residents are now hooking up. The gigabit equipment costs about the same as 15 megabit fiber gear and the extra bandwidth averages maybe a buck or two a month. So the cost to deliver a gig is actually little different than 15 megabit over fiber. http://bit.ly/HMru09

AT&T - Let them use Satellite Phones
March 15th, Kentucky was set to pass a bill to eliminate any phone coverage (except satellite) for thousands of homes. The fix seemed to be in with both parties as the bill went through committee 9-1. Shutting down phone service anywhere cell phones don't work reliably would only pass if the legislature were stupid or corrupt. Maybe burying the move in jargon (Carrier of last resort COLR) was enough that the lawmakers didn't understand what they were voting for. Or maybe the 31 AT&T lobbyists, loaded with cash,  AT&T had persuaded them. Complaints to House Speaker Greg Stumbo from families who might lose their phone service put the bill aside.
   One week later, AT&T introduced a similar bill in Ohio. http://bit.ly/HdrKIc

Telcos New Profit Center Police and Surveillance
At $2200 for a wiretap and several hundred dollars for a cell phone location, police departments are becoming important and extremely profitable customers. Carriers can charge what they like and are issuing catalogs of "surveillance fees" to actively find customers. Some police departments are ordering dozens of  traces each month. Ogden quote
   It's all on the QT and very hush-hush. As a Nevada police department notes "It is outside the scope of the law." http://nyti.ms/Hfixf2

iPad 4G works on 10% of 4G networks.
Apple’s offering refunds to everyone in Australia who bought an iPad 4G because it does not work on any Australian 4G network. They hope to avoid large fines for false advertising. http://wapo.st/HKuA7v Nor does the "LTE iPad" work in Sweden, Arabia, and almost all of Asia and Europe. They built two models, one locked to AT&T's spectrum and one to Verizon's. A few 50 cent parts and fractions of a square inch could allow operating on many more networks. This would have been much cheaper than the extra inventory and operations costs of have more parts. The assumption is they've deliberately crippled the units so the carriers can lock in customers for the life of the device.

    iPhone problem coming.

Telcos New Profit Center Police and Surveillance
At $2200 for a wiretap and several hundred dollars for a cell phone location, police departments are becoming important and extremely profitable customers. Carriers can charge what they like and are issuing catalogs of "surveillance fees" to actively find customers. Some police departments are ordering dozens of  traces each month. Ogden quote
   It's all on the QT and very hush-hush. As a Nevada police department notes "It is outside the scope of the law." http://nyti.ms/Hfixf2

Inside Washington:

“FCC Chairman does what Jim Cicconi tells him too” Commissioner
Jim Cicconi of AT&T has won something like 30 out of 34 major decisions from Jules at the FCC despite being a diehard Republican political operative in a Democratic administration. The only ones he's lost were totally outrageous, like wiping out T-Mo, one of the few competitors left.  It isn't just the public interest types who think Jim is so powerful. An FCC Commissioner, unhappy with the Chairman, amazed me one day a while back saying "The FCC Chairman only does what Jim Cicconi tells him to." 

Verizon "Follow your conscience"
Tom Tauke is always one on the world's most effective lobbyists, but doesn't share Cicconi's "by any means necessary" methods. He told a top staffer "If anyone pressures you do something you think is wrong, say no. I'll back you up all the way."
    Verizon's lobbying team is so good they win almost every time despite not abusing the truth.

March 28

• Russia leads the world with 37% growth http://bit.ly/HePtEj Ukraine 32%, India 24%, China 20%, Brazil 19%
• China broadband: 2.5M more in January to 150M http://bit.ly/Hgx7b2 Mobile over 1B subscribers.
• U.S. 2011 - Up 3-4M http://bit.ly/GX0WJu AT&T went negative Q4
• Telebyte first with VDSL vectoring test equipment http://bit.ly/Hnpiik Looking for objective answers on what works.
• Sharing: The revolution in spectrum policy http://bit.ly/HlRRuP Shared spectrum, as WiFi has demonstrated, often yields 3-10x the capacity
• RUS Writeoffs: Easily $300M, possibly $3B http://bit.ly/H1gRKn More than just the USF cutbacks.
• Briefs: Google, Facebook and 8,000 websites were cut off on Danish ISP Siminn after a policeman accidentally added them to the list of child pornographers to ban. PLDT Phillippines gave up on BPL powerline, Steve Vogel at Strowger, Karl Bode at DSL Reports, Stacey Higginbotham at Gigaom, John Pitzer of Credit Suisse, Craig Moffett, Rob Frieden

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“We'll never see the end of bad corporate behavior.” Bruce Schneier. Randall needs to be held personally responsible for AT&T’s $17M Nigerian scam.

Vladimir Putin's Russia added over 5M new subscribers in 2011 in an economy booming with high oil prices. China is running at 2.5M/month, adding every six weeks as many as the U.S. adds in a year.

   These results are only natural if "all men are created equal." I was born in the U.S., not Russia, because my grandfather got out just before WW1. I'm not essentially more able or productive than my remote cousins who stayed in Russia. The income disparities will lessen over time in a global economy and broadband take rates should follow.

    Women, of course, are more than equal to men.    

Russia leads the world with 37% growth http://bit.ly/HePtEj
Ukraine 32%, India 24%, China 20%, Brazil 19%
66M new broadband connections in 2011 brought the world total to 597M,  up 12% on the year. China added 27M and the U.S. 4M. DSL continues to dominate everywhere except the u.s. and Canada, with 61% of the market while cable has less than 20%. Below the full chart with the largest broadband nations first. Here's the same data sorted by % growth.
Russia      37%
Ukraine      32%
India      24%
China      20%
Brazil      19%
Mexico      10%
France      8%
Poland      8%
Japan      7%
Taiwan      7%
Germany      7%
Netherlands      7%
Turkey      6%
UK      6%
Spain      5%
U.S.      5%
Canada      5%
Korea      4%
Australia      4%
Italy      3%

     The vigor of the emerging economies gave us the best growth in five years. China's 27M net adds are almost 40% of the world total. Russia's 5.6M are more than France, Germany, and Britain combined. Add Brazil and India, both 2.6M, and that's well over half the year's 59M net adds.

All data from the ever-invaluable Point Topic via the Broadband Forum.http://bit.ly/HePtEj  for the full chart

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China broadband: 2.5M more in January to 150M http://bit.ly/Hgx7b2
Mobile over 1B subscribers.
China continues to add broadband subscribers at a rate of about 30M per year. MIIT puts the January growth at 2.5M to a total of 152.5M. Of those, about 1.5M were DSL. They don't realease fiber counts, but Jeff Heynen of Infonetics is reporting tens of millions of lines of fiber gear are in the pipeline. China has been consistently at 2-3M net adds per month.

  Two key policy moves are likely to maintain or even increase the growth rate. The government is leaning hard on China Tel and China Unicom to drop prices. They've begun the first major antitrust action against state-owned companies since the beginning of the Communist era. (The government continues to own over 70% of each telco.) China Telecom responded by promising to cut prices in half, but some of that is empty rhetoric. http://bit.ly/xPwPOA As China goes through a government transition, forceful action is on hold. Evidence around the world is that nothing increases customers nearly as effectively as lowering prices.

  China Mobile jumping into landlines, hard, with an investment in the emerging national cable operator, Marbridge speculates. At the highest levels, government has also been calling for more competition through "convergence" of telcos, broadcasters, and cablecos. The central government continues to make proclamations that would allow the cablecos into data while the political power of the telcos holds them back. A series of maneuvers, some orchestrated by the media regulator SARFT, are consolidating cablecos across the industry into the China Radio and Television Network and allying them with the powerful "media groups." The companies in turn are expressing interest in huge purchases of equipment. If the political problems clear, over 100M cable customers will soon have new, attractively priced broadband choices.

    10M new “subscribers” purchased mobile in January to reach 996M. China passed 1B subscribers sometime in February. Like mobile figures everywhere, the totals are distorted by the large number of customers with multiple phones or just multiple SIM cards. More http://bit.ly/Hgx7b2

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U.S. 2011 - Up 3-4M http://bit.ly/GX0WJu
AT&T went negative Q4.
UBS predicts telco broadband will go negative in 2012, led by a 400K drop at AT&T. With U-Verse and FiOS mostly ended, cablecos are pulling ahead. Net adds overall are so few - about 5% - that the total share has only moved about 2 points despite a huge lead in net adds for cable in 2011. The data below are from Leichtman, who estimates the listed carriers represent 93% of the market. UBS numbers are similar. There aren't that many smaller carriers so I have to determine why the Point-Topic figures are somewhat higher.

    The gain at Charter makes sense as they've enlarged their buildout after coming out of bankruptcy. Jay Rolls, one of the industry's top engineers, has nearly completed the DOCSIS 3.0 downstream rollout. FiOS is showing strength compared to U-Verse, although not enough to pay back the higher deployment cost. Full company data http://bit.ly/GX0WJu

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Telebyte first with VDSL vectoring test equipment http://bit.ly/Hnpiik
Looking for objective answers on what works.
One leading company claims vectoring delivers almost no gain unless you vector everything in the node. A leading expert says that's hogwash, and most of the benefits can be achieved with a simpler and much less expensive retrofit.  The DSL Forum has defined test methods that should provide some answers and Telebyte’s Michael Breneisen is now shipping early units with a 48 line emulator built in.
    The unit fits in a standard rack. It’s been under development for two years in the high-tech zone of Hauppauge, Long Island, an hour outside New York City. Long Island remains something of a tech hub although the aviation and defense industry cut back years ago.
      In 2004, a large roomful of engineers were amazed when the notion now called “vectoring” was first proposed and some were skeptical. In 2012, the doubts are gone but the practical how tos need answers. Until we have real world results, no one will be certain of the quality of the emulation or for that matter the practical limits of vectoring itself. Those answers are clearly very close, so much so that I’ve been recommending vectored gear for almost all new builds.
   Tracespan released a vectored VDSL  module for their VDSL Xpert analyzer a few days after I write the above.  I've neither the facilities nor the expertise to evaluate the differences, so I'm arranging interviews with some experts who can clarify for me. Meantime, I'm including below the pr from both companies. If you have expertise you're willing to share, presumably far off the record, please email me.http://bit.ly/Hnpiik

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DSL bonding: Yes for business, no for homes at Sonic.net http://bit.ly/GWaGIE
Fewer than one in twenty consumers buy bonded.
Dane Jasper brought the price of two lines bonded down from $80 to $70 but consumers just didn't bite. On the other hand, businesses are buying the double line DSL, two unlimited phone line offering. Sonic.net has now simplified their offering. Consumers get "up to 24 meg" DSL and unlimited voice with full features for ~$40. Business get double speeds and two full-featured phone lines for ~$90. Typical download speeds are 5-15 megabits for one line and 10-30 megabits for two.
   Dane blogged that some customers with long loops were buying the two line service hoping for much higher speeds and were disappointed. There's no magic here. If you only get a few megabits with a single loop, even doubling the speed with bonding doesn't bring you close to 20 megabits. Customers were disappointed and cancelled service. Dane is an unusual CEO; his blog suggested those homes should probably look to his cable competitor. For businesses he's continuing to sell the two line service for $90, including a ZyXel modem. The second phone line makes that offering attractive. More http://bit.ly/GWaGIE

briefs

• Google, Facebook and 8,000 websites were cut off on Danish ISP Siminn after a policeman accidentally added them to the list of child pornographers to ban. Part of the problem with censorship is that most censors do a stupid job.
• PLDT Phillippines, one of the last holdouts, gave up on BPL powerline. PLDT owns 20% of Meralco, an electric company. They've perserved in developing BPL even after almost everyone else has decided either the technology or economics aren't right.  http://www.malaya.com.ph/03262012/busi5.html
• Steve Vogel at Strowger is working hard on choices to meet the new FCC requirements of reasonably reliable 4 megs down, 1 meg up to qualify for rural funding. Early “Annex A” ADSL theoretically can do 1 meg up but rarely reaches that speed in the real world. That’s why it’s rarely sold as more than 768K. But Annex M is often just a software switch and can easily meet 1 meg and even 1.5 meg upstream requirements. He also sells inexpensive loop extenders that solve many problems. Telcos are screaming for changes in the requirements; better they consult a good engineer about how to inexpensively meet them.  http://bit.ly/GVxrLv

press

• Thanks to Karl Bode at DSL Reports  http://www.dslreports.com/shownews/ATT-May-Sell-Off-Many-DSL-Markets-118709 for linking our report on AT&T dumping phone and DSL lines. He adds “The complete lack of interest in upgrading DSL lines in more than half of the United States is great news for cable companies, who'll be able to jack up rates for a decade as the only ISPs in many markets capable of anything close to next-gen speeds.” Stacey Higginbotham at Gigaom also linked from her report bit.ly/zfxrFf on Verizon’s killing cheap DSL. She notes the LTE Fusion Cantenna offering is “Faster, Pricier and Not Better.” But it’s also more profitable for VZ.

Wall Street

• John Pitzer of Credit Suisse reports revenue shortfalls from Texas Instruments, Cypress Semtech, and Altera. The likely source is disappointing sales for everyone in mobile except Apple, from phones to tablets. It may be the bloom is off the Kindle fire, at least until they repair the glitches in the first version.
• AT&T as we’ve reported has been quietly upgrading 1999 era DSLAMs (limited to 6 megabits and often with inadequate backhaul) with IP DSLAMs. Craig Moffett now provides an estimate they’ve upgraded about 10M lines, a quarter to one half of their territory not covered with U-Verse.  While they can support up to 24 megabits, loop length limits them to an average of 5-10 megabits with many lines still 2 megabits and under. This isn’t enough to support video in competition with U.S. cable and satellite.

People

• Rob Frieden of Penn State has an important paper, The Mixed Blessing of a Deregulatory Endpoint for the Public Switched Telephone Network http://bit.ly/GRhgAq . The “AT&T Bill” in Kentucky would allow shutting down voice service even where people have no choice except prohibitively expensive satellite. It passed committee 9-1 before people realized what was going on. http://bit.ly/GN4y1V

policy

First Look: Sharing: The revolution in spectrum policy http://bit.ly/HlRRuP
Shared spectrum, as WiFi has demonstrated, often yields 3-10x the capacity
Exclusive use is now obsolete. In a move sure to be watched around the world, the U.S. NTIA is now proposing a new standard of “minimal degradation” rather than “no interference whatever.” Larry Strickling and Doug Sicker deserve enormous credit for understanding the technological change and transforming policy.
NTIA discovered that many of the current DOD users of the spectrum could not easily move, even with $18B in cost subsidies. But their needs are extremely limited, often in a tight geography around military bases. One application is “smart bombs”, radio guided munitions which need to be tested and used in training. Rebuilding the U.S. arsenal to use a different frequency than the current precision munitions would be difficult and very expensive; continuing this very limited use in the existing band far more practical.
    Radio waves don’t actually interfere with each other http://bit.ly/HlEM3x. The problem in the last century was that receivers were inadequate to tell them apart. That’s no longer true, as demonstrated by millions of 2×2 MIMO 802.11n WiFi boxes. The technical community realized this a while back; both the FCC Technical Advisory Committee and the staff of the Broadband Plan were strong on sharing.
    The political people are now catching on but it isn’t easy. “You have no idea how difficult it was to change the mindset to accept that this is the way forward,” writes one on the inside. Putting more spectrum to use is a good thing, but the payoff is even larger from more efficiently using the spectrum we have.
    “NTIA also believes that spectrum sharing is a vital component of satisfying the growing demand for access to spectrum and that both federal and non-federal users will need to adopt innovative sharing techniques to accommodate this demand,” is a major breakthrough in policy thinking.
http://www.ntia.doc.gov/files/ntia/publications/ntia_1755_1850_mhz_report_march2012.pdf http://bit.ly/HlRRuP

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RUS Writeoffs: Easily $300M, possibly $3B http://bit.ly/H1gRKn
More than just the USF cutbacks.
A third of the small telcos will go bust the next few years, one of their advocates claims, unless the USF/ICC cutbacks are reversed. Some very intense lobbying is urging the White House to restore the old subsidies, no matter what the cost. Some waivers are appropriate for the truly brutal high cost areas, but after hours reading submissions I find no doubt doubt the FCC reductions are good government work. The companies simply haven't provided any solid data otherwise.
     Whatever the details of the USF/ICC program, wireline telephony is a declining business. Many companies have large debt or high operating costs and will fail at any plausible level of subsidy. A decade ago the FCC forecast that loss of long distance revenues and wired lines would bankrupt many of the rurals. Robert Pepper, head of the Office of Policy and Plans, had figures that made clear a day of reckoning was coming. Every landline only company in the world is struggling, including British Telecom (dividend cut), Frontier (dividend cut), Hawaiian Tel (bankruptcy), and Fairpoint (bankruptcy, with a second bankruptcy hard to avoid.) Both Century-Qwest and Windstream have earnings below their dividend payments, propped up by capex far below depreciation and ultimately unsustainable. The smaller rurals are facing the same objective problems but don't report publicly so I can't provide firm numbers. Tweaking the details of USF might postpone but won't prevent wide distress.
     Some of the coming RUS losses are clear cases of abuse. Sandwich Islands, with $116M in loans approved, has told the FCC they will default unless they get a huge (and totally inappropriate) change in the new FCC CAF/USF  regulations.   Sandwich Islands is a secretive outfit with close ties to Democratic politicians exposed by the local press. Lobbyist Mike Powell helped them out when he was FCC Chairman. It looks like they spent $100M on running unnecessary fiber between the islands. USF was showering money on them: somewhere north of $25,000 per home passed, although they refuse to provide the figures. (The FCC is considering my FOIA request for the basic data to report this story.)
     RUS is already liquidating a $200M loan to Open Range gone bad. In the guise of reaching unserved, Open Range got funded for $267M. This was deceptive; in fact, most of their deployment was wireless to mid-sized metros that already had both DSL and cable. It was a mistake to fund it initially, especially because the FCC knew there were highly credible allegations of fraud against the CEO. (I know they were aware because I asked them about it in 2007 or 2008 before the loans was granted. The agency stonewalled me and I'm sorry I didn't push harder. Adelstein since he took office has watched them carefully and shut them down before all the money was disbursed.) A large loss is inevitable. I urge a full forensic audit because the company statements as they hit the skids were misleading.
    Another large borrower with a few hundred rural high cost homes borrowed extravagantly to run fiber to the home to a suburban area that already has cable. In an official filing, it also projects bankruptcy if its subsidy is cut to "only" $3,000 per year per home - including many homes that are reached by cable without subsidy.
   Whatever the details of the USF/ICC program, wireline telephony is a declining business. Many companies have large debt or high operating costs and will fail at any plausible level of subsidy. A decade ago the FCC forecast that loss of long distance revenues and wired lines would bankrupt many of the rurals. Robert Pepper, head of the Office of Policy and Plans, had figures that made clear a day of reckoning was coming. Every landline only company in the world is struggling, including British Telecom (dividend cut), Frontier (dividend cut), Hawaiian Tel (bankruptcy), and Fairpoint (bankruptcy, with a second bankruptcy hard to avoid.) Both Century-Qwest and Windstream have earnings below their dividend payments, propped up by capex far below depreciation and ultimately unsustainable. The smaller rurals are facing the same objective problems but don't report publicly so I can't provide firm numbers. Tweaking the details of USF might postpone but won't prevent wide distress.
   There's no reason to suspect fraud at Big Bend, which I believe also has RUS loans. They've graphically described their likely bankruptcy in another FCC filing. Without doing much research, I've found two more companies, one with an 8 figure RUS loan, that are contemplating bankruptcy.  The honorable outfits - I know many in rural telephony - are getting squeezed out because of the far too many abusers. Julius hides the data necessary to estimate accurately, but most estimates are that 1/3rd to 2/3rd of the $4B subsidy would be unnecessary based on the cost of moderately efficient rural operators.
    I'm a strong supporter of universal service but not blind to the massive overspending in the current system. Low densities and long distances do add costs. There are several million lines that need a modest subsidy to pay their way.But except for half a million lines the excess operating costs are wildly overestimated by nearly everyone in the public discussion.
    Continuing subsidies higher than the necessary costs of service is simply bad policy. The intent of the FCC based on their recent proposals is to reduce subsidies to a generally more reasonable level but allow exceptions for truly high cost areas that would be otherwise unserved. That seems only common sense, but is totally different than the past two decades of "nearly anything goes."
   Adelstein needs to review every loan in light of the USF subsidy changes and step in before trouble is uncontrollable. They need an operating team ready to go or operators ready to take over failing telcos just as the banking authorities do for failed banks. They also need a team of forensic accountants. False statements and contradictions from one of the largest likely defaulters suggest it probably was looted and the carcass will be turned over to RUS. D.C. reporters need to ask Jonathan Adelstein  what's he's doing to prevent $B in government losses. He's an honorable public servant in a tough spot. The right thing to do is accept the reality and manage the crisis, starting yesterday.
-----------------------------
Thoughts on resolving the rural crisis (first draft)
Throwing taxpayer money at the problem should be the last measure.
    First, we need to bring down the high rural costs every other possible way. The most important step is to reduce the often absurd rural backhaul costs. Many small carriers pay $100 and even $200/megabit/month when the going rate is $5-15. That's because there is local monopoly-like pricing. Fixing this was one of the most important recommendations of the broadband plan, which found high backhaul was often the largest contributor to high costs. Speaker after speaker at the Broadband Plan workshops insisted that Genachowski use "special access" rules to reduce the problem. He's failed.
    Second, most of the smallest companies need to be merged into larger ones. In broadband, the minimum economic size is about 20,000 lines. I don't think voice is very different. It probably costs twice as much per home to serve 2,000 homes as 20,000. Protecting rural service is important; $B's in subsidies to keep 1,000 companies independent isn't wise public spending.
    Third, unnecessary spending needs to be ruthlessly reduced. For example, a switch can serve 15,000 - 50,000 users, easily. It's ridiculous for every small company to have their own switch (and switch operator.) Time to share.
     Fourth, small telcos are paying far above the world price because they don't have purchasing volume. Since the government is paying so much of the cost, it should negotiate volume purchasing. This could be direct or through the existing coops.
     Fifth, we need disclosure of the real costs. The carriers demanding the $B's in subsidies need to open their books. One reason the figures are so high is that all the calculations are done in the dark. Any carrier who refuses to make basic finances public shouldn't be given government money.

    more to come.

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Volume 12, #3 February 28

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Misinformation may be a dirty trick, but it works. Cary Sherman, lobbyist

Tony Melone's team at Verizon deserves laurels for being well ahead of schedule with LTE. They cover 70% of the U.S. now and in a filing said they will reach 294M, 95% of the U.S., by the middle of next year. Darts to Randall Stephenson of AT&T, who hasn’t telephoned yet to apologize for his mistaken 30-40% wireless growth figure. I’ve withdrawn my story http://bit.ly/AwFuyc. CTO John Donovan blogged about 100% growth last year and AT&T confirmed to WSJ the CEOs figure was an error. 30-40% was the increase in usage per smartphone. Add in the increased percentage of smartphones and AT&T is now reporting about 75% total demand growth. 75% is a significant drop from 100% and Donovan’s comments make clear growth will fall towards 40-50% fairly rapidly. Half of mobile data growth is the switch to smartphones, now 57% of AT&T customers. http://bit.ly/yv7J6y
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I don't pick stocks. If I did I'd be very, very cautious on any telco - wired or wireless - where competition can intensify. I’d put a Sell on any company that hasn't already seen a big drop in market cap. Although we’re in a trillion dollar business, revenues and earnings in the developed markets will be flat to down for years.
----------------
AT&T has another huge breaking story: somewhere between 15M and 50M lines are likely to be sold. Randall has tasked John Stankey to make a quick decision on whether to upgrade or dump 10-20M “rural” lines, essentially all of AT&T not reached by U-Verse. The whole deal could be called off if someone convinces Stankey upgrading phone lines to compete doesn’t have to be so expensive. Below, a first look.
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There’s a separate issue coming dedicated to wireless, led by Divide to Conquer: 3 LTE iPhones not 1 model for the world. It will have the details from AT&T’s numbers, why Cisco is confident there’s no serious spectrum crunch for at least five years, and much more. Take a look at http://fastnetnews.com/a-wireless-cloud for the articles if you don’t want to wait for the email.
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Stories to come: 50-100 meg DOCSIS 3.0 now reaches 80% of U.S. homes. France is showing how “bottoms-up” wireless networks resolve spectrum problems at half the cost. Do send tips and errors to daveb@dslprime.com

*** ASSIA. is proud to announce 50 million DSLs under management including 90% of the lines in the U.S.A. http://www.assia-inc.com/

China 20M ports in three months
10M+ fiber while the west looks to cable for high speed.
Chinese carriers bought an amazing 20M ports last quarter, Jeff Heynen of Infonetics reports. Ten million or more appear to be fiber, enough to build a network like Verizon FiOS every four or five month.
50-100 megabit cable is the West’s alternative route to high speeds. I’m calculating 77-82% of U.S. homes are now served by DOCSIS 3.0. 50-100 megabits are available to most of the 50% of Germans and Brits who can get cable.
Except for British Telecom upgrades to fast DSL (soon 80 meg) are limited in Europe. France Telecom, Telfonica, and now Vivendi have cut dividends, which were based on monopoly prices for landlines and cartels for wireless. Most of European telcos have dangerously low capex do prop up short term cashflow.
Vectoring DSL is a no-brainer for new builds, but outside of Asia new builds are few. Can existing lines be vectored efficiently? One expert tells me it’s absolutely doable and AT&T would be an ideal candidate. I’d welcome informed opinion.
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British Telecom DSL clobbering cable http://bit.ly/xkbxbz
BT added 145K, Virgin cable 15K.
British Telecom’s DSL aggressive marketing is essentially beating 50-100 megabit cable, especially in the 30% or so of the country upgraded to FTTN/DSL cabinets at “up to 40 megabits.” Virgin remains financially challenged and isn’t doing nearly as well as the cablecos in the U.S. In the U.S., cable is taking 83% of the net adds, although it will be years before the absolute share moves very far.
Virgin covers about 50% of the Britain, including many lines where BT only offers 3-6 meg DSL. In the U.S., Verizon and AT&T are getting clobbered by cable in the one-third of their territory they haven’t upgraded. The effect is much smaller in Britain, and the upgraded (FTTN/DSL) BT is winning customers away from cable despite generally slower speeds.
Takeaway: Very few customers will pay much for speeds over 10 megabits, enough for 2 or 3 HD TV signals. In 2012, upgraded DSL/FTTN, which covers 1/3rd of the U.S. and a similar share of England, is doing fine against cable. Company strategy and marketing, not technology, determines who gets the customer. This is confirmed by how well Telus and AT&T U-Verse are doing against cable. More from Britain http://bit.ly/xkbxbz

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First Look: Randall is close to shedding 15M-50M AT&T lines http://bit.ly/zccI3a
Stephenson tasked John Stankey to make a quick decision on whether to upgrade or dump 10-25M “rural” lines. That’s essentially all of AT&T not reached by U-Verse. Stankey is “doing a rapid tech evaluation” of whether they can upgrade their DSL + wireless to “a competitive broadband product.” But Randall “doesn’t see a solution.” If that’s confirmed, “we’re looking for others who might want the properties.” Stankey’s competent. Looking at bonded/vectored DSL he may change the company’s plans. Randall’s mantra, however, is “We are a wireless company.”
It’s unclear if any of the “rural carriers” – Century, Frontier, Windstream – have the financial ability to make an attractive offer. If operators can’t raise the money, T would need to make a financial transaction. A complicated spinoff retaining the growing parts of the company is one possibility. There’s probably an interesting way to lose pension and deferred tax liabilities if they make that choice. All the big private equity firms are looking at bids.
If private equity jumps in, it makes sense for them to bid for the whole wireline operation. T claims operating segment income of $7.3B on revenues of $59.8B. Natural P/E bids would be $40-55B, up there with the RJR Nabisco deal for the largest of all time. More, mostly speculation http://bit.ly/zccI3a

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95% of U.S. getting Verizon LTE by next July bit.ly/zzbnnC (First look)
Well ahead of schedule.
Verizon confirms “294 million people, or 95 percent of the U.S. population” should be covered by their LTE network by “mid-year 2013, roughly 15 months from now.” The build won’t freeze there, of course, meaning the Obama goal of 98% coverage is almost guaranteed. Verizon since 2009 has been saying they want coverage everywhere and they are now well over 200M homes passed. No one except the engineers believed my reporting U.S. LTE 2016: 96-98% Likely http://bit.ly/AnPV6e but Verizon is already surpassing my projections.

*** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http://
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Frontier's profitable Unbonded second line for $20 http://bit.ly/xdN9yR
Think one line for downloading teenager, one for adults watching Netflix.
Frontier has found a very lucrative niche product: a second DSL line to the same household, without bonding. Bonding of 2 three megabit lines yields six megabit service to the home. Unbonded second lines max out at 3 megabits each, but the TV watchers on one line aren’t affected by the TV downloads on the other line.
It costs something like $8/month, all in, to add a new connection to an existing broadband network. So at a price of $20, this is a very profitable. Bonding the two lines is now a routine offering at many carriers but the bonded offering does add a moderate extra complexity to the network. An additional modem type needs to be stocked and the OSS needs to have an additional offering. Today’s DSLAMs are designed to bond easily, but a company like Frontier has many 10 year old obsolete units in the field. more http://bit.ly/xdN9yR

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Frontier's down 40%, Century, Windstream not http://bit.ly/yuYtSd
Stock moves should be similar.
Frontier, Century, and Windstream are U.S. mostly landline carriers in very similar businesses. They all have declining landlines, very modest broadband growth, and the problems of a wireline carrier in a world gone wireless. Until recently, their stocks mostly moved in similar directions. Over the last five months, Frontier's stock price has gone down 40% ($4.36) while the other two are flat. Goldman Sachs has now downgraded the stock. Something is wrong in this picture. The blue line in the chart is Frontier, and ordinarily it would be moving similarly to the red and green lines. After I wrote this, the stock spiked 10% when Maggie cut the dividend, but has drifted down since.
I am not predicting a further drop in the stock price. It's quite possible the low valuation relative to comparable companies means the stock price is too low. None of these companies have had leadership changes or obvious business changes that offer an easy explanation. The difference, I believe, is the market perception of the stocks, not the underlying businesses.
The price move in Frontier is so large it inevitably will have an effect on the company and raise questions about the CEO. The diminished equity cushion could precipitate a ratings downgrade. Employee options are underwater. Maggie herself owns 2.3M shares (Yahoo finance) so has lost about $6M personally. She purchased 50K shares at $5.25 in November, making concrete her belief the company has good prospects. Also purchasing above the current market price were directors Ed Fraioli, Jim Kahan, Jeri Finard, Pamela Reeve and Mark Shapiro. A stock drop that extreme means the board will be reviewing management. Almost all the board members were vetted by Wilderotter and she seems liked on Wall Street, so I don't expect any changes. Wilderotter declined an interview about her future.
Financial weakness at the rural carriers means there's no obvious buyer for the 15M line AT&T is imminently deciding whether to dump. That makes a spin-off or other financial transaction more likely.

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Russia passing U.S. in "fiber" http://bit.ly/zMANEE
All in the name.
Korea’s #1 in penetration if 100 megabits on copper from fiber to the basement is “fiber.” Japan is #1 if only fiber all the way to the apartment is considered. The U.S. is far behind in either case, with the larger countries of Europe - except Russia - even further behind. Nearly 60% of Korean homes subscribe to one or the other and over 40% of Japanese. So do 27% of Lithuanians.
Yes, Lithuania leads Europe. They, the Russians and other Eastern Europeans generally deliver broadband by fiber to the basement and copper to the apartment, Speeds are often 100 megabits; Russia often is near the top in average Internet speeds.
"Fiber" in the U.S. only reaches 8% of homes. The vast majority are Verizon, which has essentially stopped building. Russia is at the same level, expanding rapidly. China is only at 4%, although they are expanding at a rate of 10M a quarter.
The charts from iDate and the Fiber to the Home Council, are worth a look. http://bit.ly/zMANEE
Analysts have almost all agreed that "fiber" described a connection that was fiber to the apartment or building. That could easily deliver 50-100 megabits, even if the last few hundred feet were copper. Cable until widespread DOCSIS 3.0 topped out at 10-20 megabits.
Nearly all of us agreed that AT&T's brilliant relabeling of DSL from a field terminal was "fiber to the node" was fundamentally misleading. With DOCSIS 3.0 now proven to deliver 50-100 meg fairly reliably, analysis and policy becomes more difficult. Similarly, as vectored DSL becomes common at 40-80 megabits in several European countries, the line becomes harder to draw.
Is fiber necessary?
I still think fibering the world a good idea in the long run, but there’s no denying both DSL and cable are getting darn good. Graham Finnie points out Europe can reach 2020 goals drawing heavily on “cable broadband and DSL lines with vectoring.” http://bit.ly/xM9F7j Europe intends to bring 100 Mbit/s to 50%. DOCSIS 3.0 does that fairly well by bonding four 8 MHz channels to share 200 megabits and bonding eight channels is already built into some gear. Since about half of Britain and Germany has DOCSIS already, only a limited number of lines will need upgrading. Vectored and bonded DSL will bring 100 meg only to those very close, but can easily deliver 30 meg - the EU goal for everyone - widely.
Fiber has far more headroom. Today’s fiber is routinely a gig down and far faster than anything else on the upstream.

corrections: AT&T's wireless growth is only down about a quarter, not half. See above.

briefs
Bravo, AT&T. (A headline I’d like to use more often.) AT&T named Best Place to Work for Lesbian, Gay, Bisexual and Transgender Employees, with a 100 percent score from the Human Rights Campaign. This is the eighth consecutive year they’ve been honored.
Aware was a DSL pioneer before setbacks. I am glad to see they are still in the game and have added TDC Denmark as a customer for their DSL diagnostics.
La Poste in France has signed up half a million customers for resold wireless and is expanding into ADSL and quadruple play.
Press
Karl Bode is disappointed to see ex-representative Rick Boucher preening for AT&T http://bit.ly/ycKHyx The formerly respected Boucher should probably be added to the “don’t feed the troll” list alongside Scott Cleland and others whose telco advocacy not worth reporting.
Martyn Warwick’s latest stand-out headline: WiMax: Going the way of the dodo.
Junko Yoshida and the EE Times team won 2011 a "Gold" Eddie Award for "The Day the Lights Went Out in Japan," remarkable reporting after the Earthquake. EET will never be the same after the cutbacks, but those remaining are extraordinary reporters.
Le Monde’s series “La fin de la librairie” bemoans the struggle of France s many small bookstores in the age of the Internet. Paris seems to have ten times as many bookstores as New York does, to me a wonderful thing. But 40% of the market has switched to buying books from large chains and supermarkets. The Internet has only taken 10% so far, but as $79 Kindles emerge in France that’s sure to increase.
Samantha Bookman at Fierce writes Broadband stimulus scandals: Missteps in the buildout, and what's at stake. http://bit.ly/AwFuyc It’s an important story the D.C. reporters should be following. The data is all on the web in the quarterly reports at NTIA and RUS.
wall street
Jason Armstrong at Goldman “will look to changes in upgrade policies as perhaps the most influential metric in wireless in 2012.” He notes “net handset subsidies on average are 12% of industry service revenues. More problematic is the incremental, where growth in subsidies equaled 20% of the growth in service revenues in 2010, and over 40% in 2011. This reinforces the necessity of pushing down the upgrade rate. For perspective, extending the average upgrade period 10% has an outsized (+12%) impact on subscriber NPV.” Providing a new iPhone after 24 months costs the carrier $400 in subsidies, about $15/month. Apple’s profit is skyrocketing while AT&T struggles. Unfortunately for the carriers, the iPhone software is so much better in most people’s opinion they insist on iPhones. Apple intends to stay on top, so they are constantly improving and inspiring demand for new phones. Free Mobile sells the iPhone but doesn’t subsidize it, keeping prices for service so low people don’t mind. T-Mobile is doing similar experiments. But dropping subsidies customers expect will be hard to sell.
policy

Puerto Rico, home of the great unserved http://bit.ly/zKkWaR
Perhaps 600,000 unserved homes, nearly all cheap to reach.
Julius promised that CAF “will bring broadband to more than 600,000 Americans who wouldn’t have it otherwise” by November 2012. That’s about 200,000 homes. Windstream, Frontier and other big telcos are boycotting his program, demanding to be paid without building to the unserved. The obvious answer is “Go south, Jules.”
43% of Puerto Rico can’t get DSL or cable according to the official National Broadband Map, ten times the national rate. It’s a small, densely populated island with an extensive wireline phone network easy to upgrade to DSL. PRTC doesn’t release data, but probably 200,000 of those homes could be offered service within months for less than ~$200 home because they are within reach of an exchange or large remote terminal. Almost certainly, 400,000 of those homes can be reached for under $500/home, generally at 25 megabits or more, using remote terminals like AT&T’s U-Verse. U-Verse, according to AT&T comments to Wall Street, cost $300-400/home and is video grade.
If Julius wants to deliver broadband to the unserved without abusing the U.S. treasury, he needs to use the deal-making skills he used to make millions as a lawyer. Slim will ask for more but Julius holds the cards. Slim made firm investment commitments to get approval of the purchase of PRTC from Verizon. I’ve looked at the PRTC network today and it’s almost impossible he lived up to the spirit and letter of the deal. If they had, many of these lines would have been upgraded years ago. A good audit would find where his promised investment (didn’t) go and probably result in major liabilities.
Smarter for Slim to take a reasonable deal and connect hundreds of thousands of homes with a generous but not exorbitant subsidy.
--------------------
The dark side of this recommendation is that the reason Puerto Rico has such poor coverage is that Slim and Verizon before him treated the island like the Romans treated the Sabine women. That's why it's so crucial the costs be controlled. USF/CAF is about bringing services where they are needed, not a billionaire's entitlement.

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Editorial: Time for Julius and Larry to disclose their stock sales
Julius Genachowski at the FCC and Larry Strickling at NTIA can strike a symbolic blow for open government by quickly publicly disclosing their stock trading even before the bill goes through requiring them to do so. Both are multimillionaires who had extensive holdings when they took office. Both strike me as people who would not take advantage of their insider knowledge so have nothing to fear from disclosure. Both can earn respect and show leadership.
The Senate passed a billing forbidding insider trading by legislators and included a provision by Richard Shelby that senior federal employees also disclose their stock sales. Robert Pear (NYT) expects the House to go along and the President to sign. This should have been become law long ago.
Don’t wait for the bill to pass. Just do it.

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First looks in policy

The big telcos, led this time by Windstream and Frontier, are trying to blackmail the FCC into diverting the CAF money meant to reach the unserved. Meanwhile, hundreds of the existing small companies face bankruptcy because the USF subsidies are being brought under (limited) control. They are losing lines and revenue. Some should be protected where a subsidy really is needed because of high rural costs. Others should be allowed to die because they’ve taken advantage of the system. RUS needs to turn around and protect the taxpayer from losses. FCC and the states need to ensure service continues even if bankruptcy occurs.


Big Telcos: FCC should fake reaching unserved, give them more money http://bit.ly/A82wbL
Julius doesn’t want to welch on his promise of reaching the unserved but may not even realize what’s being proposed in his name. Carol Mattey at the FCC is listening closely to the big telcos demanding that the CAF funding should go to areas already served rather than fulfill his promise to reach 600,000 unserved Americans by November 2012 and millions more in the next few years.
The telcos want to do that by arbitrarily reclassifying areas marked served on the broadband map. Instead of fixing the broadband map, they want to use their own judgment of which “contain locations that are not able to receive adequate fixed wireless service.” Find a few – of which there always are some in wireless networks in ordinary terrain – and then Century, Frontier and Windstream want massive federal subsidies to overbuild the whole area.
There’s absolutely no reason to change the CAF rules suddenly to throw money at these companies. Each has plenty of truly unserved lines to keep them busy and use the CAF money for the next few years. The obvious move is to ask the companies to work with NTIA to make sure the map is accurate before making any changes in the rules.
In addition, I’ve looked at the cost estimates of these carriers and they are totally out of line. DSL gear costs $50-250 and even with small units and field installs the strong majority of the unserved can be reached for far less than the thousands demanded by these carriers. It looks like they use the costs for the last 1/2 of 1%, which everyone agrees will be reached by satellite. Then they are demanding that amount for lines that are far less expensive to serve. more, including a reporter who may need to issue a correction http://bit.ly/A82wbL

Pepper: You're needed to save the WISPs http://bit.ly/xjLB2I
Robert Pepper at the FCC was the key supporter of local wireless providers who have now gone on to serve a million rural Americans. Now, the same phone companies that refused to serve many of these homes want to pervert CAF broadband funding to overbuild already served areas. You’re the right man to protect the network you built. A few phone calls to Sharon, Carol, and maybe Jules may be all it takes to keep them on the right path. You’re out of the agency for seven years now but still are enormously respected. Julius promised the money would go to reach 200K of the 4-7M unconnected American homes. ... Remind them to hold firm. more http://bit.ly/xjLB2I

We who are about to die salute you! http://bit.ly/xmX0D2
Big Bend Telephone, serving 200 miles of the Texas border region, joined the many carriers telling the FCC they’ll go bust unless the USF/CAF rules are changed. They can’t survive on a subsidy capped at $3,000/line/year and will imminently default on their loans. This spells big trouble for their lenders, of course. Big Bend warns that telephone and Internet connections to 200 miles of U.S. border posts will disappear if they default on their loans, as well as connections to all local hospitals and schools. That’s unlikely. The creditors will recover more by selling the assets in place to a new operator; the existing management will likely do better in a Chapter 11 than in a forced liquidation. Either would keep service running.
Big Bend has a politically connected DC law firm trying to get them a larger subsidy. That might be right if the costs to serve the territory really are so off the wall. It's a mistake to the extent the high costs are inefficiency or past high spending. It's particularly difficult when the high costs are mostly due to the small size of the company. Anything under 10-20,000 lines is wildly inefficient, but there's no obvious way for the regulator to require larger companies to serve these customers. That may need changing. more, but not answers http://bit.ly/xmX0D2

FCC giveaway watch Part I
Verizon is looking for a loophole in their Alltel merger agreement to get them more money than deserved under the new USF rules. General counsel Austin Schlick brought a team of five to negotiate with them. Verizon says the new rules are ambiguous and suggests an interpretation that gives them $millions. If that’s not the right way to interpret them, they want the rules changed to match their expectation. The obvious thing for Schlick to do is to clarify the rules to make sure Verizon doesn’t get a windfall instead. http://apps.fcc.gov/ecfs/document/view?id=7021753215

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Calix Expands Fiber Access Leadership in 2011
Kicks off 2012 with introduction of new innovations to the industry's premier fiber access portfolio

PETALUMA, CACalix, Inc. (NYSE: CALX) today announced continued momentum in the fiber access market with another record-breaking year in 2011, and introduced two new optical line terminal (OLT) cards to its Unified Access portfolio. More than 70 percent of Calix's over 1000 customers globally are now deploying fiber access services across the B-Series, C-Series, and E-Series platforms and nodes and industry-leading portfolio of optical network terminals (ONTs). With the addition of the GPON-8x line card to the E7-20 multi-terabit Ethernet Service Access Platform (ESAP) and the B6-318 point-to-point gigabit Ethernet (GE) line card to the B6 Ethernet Service Access Nodes (ESANs), Calix customers now have powerful new gigabit passive optical network (GPON) and point-to-point GE solutions available to help them to transform their networks, their service offerings, and their business models. The North American fiber access leader in OLT port shipments for the last eight quarters (Infonetics Research), Calix was recently identified in the Infonetics Research report "Next Gen FTTH and PON Deployment Strategies: Global Service Provider Survey" as one of the top three FTTH vendors globally by 67 percent of the respondents.

Reply "subscribe" to be added, "un" to be dropped
Volume 12, #2 February 2012

July 31

• May in Spain: DSL -645, Fiber +10K, Cable +9K http://bit.ly/q5k80O
• VDSL: Booming in Europe, Flat in U.S., Losing to Fiber in Asia http://bit.ly/nZklei
• A Special Report: The End of Universal Service
• 1,000,000 Homes: Let Them Eat Satellite http://bit.ly/ntLtCM
• Approximately 0% Additional Homes Will Get Broadband http://bit.ly/oDwfF9
• Impact of Big Telco Plan on Consumers: At Least $2B, More Likely $5-10B http://bit.ly/omtohK
• Unlikely and Perhaps Utterly Unbelievable: $80 Cost Per DSL Line Already in Place http://bit.ly/nzZ84U
• AT&T, Verizon Find Broadband Map Data Unusable http://bit.ly/qr8kcr
• How Many Corporate Jets Are Buried in the Model
http://bit.ly/oNnr1O

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May in Spain: DSL -645, Fiber +10K, Cable +9K http://bit.ly/q5k80O
With 20% unemployment amid the financial crisis, it's no surprise growth is slow in Spanish broadband. DSL has long had a 5-1 lead over cable, but in April and May did very poorly. Telefonica, the DSL leader, has made ambitious promises to upgrade, including fiber for all of Madrid in the next few years. They've actually deployed very little.
DSL was well ahead in the first quarter, so I doubt this reflects an extreme shift in customer preference. It's more likely a result of temporary marketing and pricing factors. Nonetheless, the negative DSL figure is a bad omen.
Spain, Italy, and Ireland have just over 20 broadband lines for each hundred people, a third lower than richer countries like France and Germany. (OECD, end 2010) Economics and demographics play a role, but it's telling that these countries had a near monopoly carrier and weak regulation until recent years.

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VDSL: Booming in Europe, Flat in U.S., Losing to Fiber in Asia http://bit.ly/nZklei
"VDSL Port Shipments Grow to Record" was the headline of Dell'oro's release, great news to report. Steve Nozik attributed the growth to multiple carriers in Europe upgrading: Deutsche Telekom, British Telecom, Belgacom, Swisscom and KPN Holland among them. All are seeing major losses to cable and feel they have no choice but to upgrade. Each is doing some fiber home and some DSL from cabinets. Nearly all the cabinets are VDSL, for much higher speeds at short reach.
    Asia on the other hand is seeing a drop off in VDSL, where most new builds are fiber all the way to the apartment. Until recently, half of Japan's "fiber to the home" actually terminated in the basement. 100 megabit VDSL went up to the apartment. Bendable fiber has lowered the fiber installation cost and little VDSL is being added. North America was mostly AT&T's U-Verse, which was flattish.
   The majority of ports are still expected to be ADSL - but given the lower price for ADSL, the revenues should be close to equal in 2012.
    I've reported that John Stankey of AT&T says the U-Verse build will virtually end this year, so VDSL to North America won't grow. AT&T's enduser growth is likely to slow when the U-Verse build ends, Craig Moffett projects. The impact of that will more likely be 2013 than 2012, I believe, because bonding will allow 5M+ homes, already passed by U-Verse, to actually reach the solid 25 megabits the TV service is designed around. More, including the release http://bit.ly/nZklei

Correction

• Running rural fiber on poles costs about $20K/mile, I wrote a while back based on actual bids to a telco. For the stimulus projects, I'm hearing costs as high as $40K/mile. Some of that difference is due to Davis-Bacon wage requirements and other regulations, but that doesn't explain all the variance.

*** Lantiq: 20 years' track record of leading industry innovation. Our semiconductor solutions are deployed by major carriers and found in home networks in every region of the world. http://www.lantiq.com (ad)   

A Special Report: Ending Universal Phone Service, Doing Nothing for Broadband
This is a big one. To my amazement, the Bells wrote a plan that provides them $Billions, ends universal service, proposes cutting 1M phone lines, and actually doesn't produce any additional broadband. It is based on almost surely spurious data, including “consumer benefits” that assume MCI, Sprint, and AT&T are actively competing for U.S. long distance. (Shame on MIT Professor Hausman)
    It will not go through untouched, so this is important to follow. If Julus has any guts, he'll throw most of it away. I hope my friends at the telcos don't shoot the messenger. It's your Washington people who are the problem, not the reporter who breaks the story.
   Apologies to International readers for a U.S. focused issue.

1,000,000 Homes: Let Them Eat Satellite http://bit.ly/ntLtCM
End of universal service
For nearly a century, U.S. telcos served every home in the country. They now demand that end and that the FCC, pre-empting the states, end "carrier of last resort" requirements. They project this would apply to 728,000 homes in the big carrier territory. Adding the small carriers takes the figure to about a million. Since the Bells get relatively little USF money for these homes, the subsidy todoay is not excessive: about 1/50th of their annual profit/cash flow. There's no reason they couldn't continue to serve these homes and still remain among the most profitable companies in the world. This is not mentioned in the press release of the summary; you have to look to page 95 of a very dense document to find it. But this is one of the biggest telecom stories of the decade, and reporters won't be deterred.
   With time, I planned a companion article "Why 400 Congressman Will Refuse to Support the Big Telco Plan." When I get back from Montana, I intend to hire an assistant/paid intern whose first responsibility will be to ask "Do you support the Plan?" When they realize it means a million homes will lose phone service, I don't think even Bell lobbying power will get them to endorse it. I'll also ask as many of the state commissioners as possible. http://bit.ly/ntLtCM


Approximately 0% Additional Homes Will Get Broadband http://bit.ly/oDwfF9
Already planned LTE only
No matter how cynical I am, I wouldn't have guessed that the Bells want $2.2B in direct subsidy and $2B-10B more in increased prices in the name of broadband, but do not propose offering any additional service. They define broadband as 4 down, 768K up and make a point of including wireless. LTE easily reaches those speeds, and Verizon and AT&T have promised to deploy to 97-99% of the country. That will include most and possibly all the 2M homes they say their plan will reach.
    Repeat, this plan has no provision to extend broadband to anyone who wasn't already going to get it. It's just counting already planned LTE builds. LTE Advanced may well be the right technology for these homes. If so, we don't need any subsidies. That's why the plan proposes to lock in subsidies based on the 2011 map of what's served. Otherwise, there would be nearly no subsidy needed. $10B, the proposed subsidy, is not far different from the total cost of the national LTE build, including the first 95%.
    How stupid or gutless do they think Genachowski actually is.  More http://bit.ly/oDwfF9


Impact of Big Telco Plan on Consumers: At Least $2B, More Likely $5-10B http://bit.ly/omtohK
The Big Telco Plan proposes an increase in the "Subscriber Line Charge" which would all go to the carrier. It may be up to $3.75/month, although in somes cases the telco won't be able to get the increase in practice. The increased charge on wireless customers is unclear. The first column is $3.75/line/month and the second at $2/line/month. Under different assumptions, that yields an increased consumer cost of between $2.8B and $18B. My opinion is that the most likely figure is $5-10B I've done an estimate for both 300M lines and 400M lines, wired and wireless. To reach the 400M figure, a fair number of people would need to pay for two phone plans.
    In addition, the decrease proposed for intercarrier compensation lowers the cost of providing long distance service. Some of that may be passed on to customers in lower prices. A few years ago, customers had many choices in LD service, including MCI, Sprint, and AT&T actively marketed. It was reasonable to assume that much of that would be passed on to consumers. Today, nearly all of us buy LD from our wired or wireless voice provider as part of a bundle. Competition is less. Columns 3-6 have assumptions of 40% offset and 70% offset.
    Some folks, including Congressman Boucher, have wanted to add USF to broadband. At the current 15% rate and a $35 average monthly price, that would add about $60/year. As we move towards 100M broadband homes, that's a whopping $6B/year. Last year, it looked like the fix is in on this; now, it's unclear. I don't think the FCC would tax broadband with an election on the way.
    There are sophisticated techniques economists use to estimate things like this, but there are so many complicated pricing plans I don't think there's any way to come to an exact answer. In addition, much of the data that would be required to measure demand curves and pricing competition is proprietary.
    All things considered, it's almost certain consumers will pay $billions more per year. Most of that would accrue to those carriers who now pay the most for intercarrier compensation and are unlikely to pass on the full savings to consumers by lowering prices. Those are AT&T and Verizon.
    Improvements to this analysis welcome, but let's avoid sophistry. More http://bit.ly/omtohK

Unlikely and Perhaps Utterly Unbelievable: $80 Cost Per DSL Line Already in Place http://bit.ly/nzZ84U
All data hidden.
The Big Telco Plan asserts about 5M homes cost $80 or more per month to serve and therefore need a subsidy. It's almost impossible for this to be true under any appropriate measure. The standard cost for a large carrier with equipment in place is about $8/month. That figure is confirmed by the most respected on Wall Street, John Hodulik and Craig Moffett. It's more costly to serve less dense regions, but for locations with equipment in place I can't see any legitimate way to justify a number above $15-20/month. That's about half the homes claimed as costing over $80/month.
     Where new equipment needs to be deployed, the broadband plan data implies dramatically less capital to reach the unserved homes if the last 1% is excluded. Over 72 months, that's $15-35/month. The total for those needing new facilities is therefore between $30 & $55 per month, way under the $80-250 in the plan figures. Subsidies are appropriate, but only at a fraction of the level proposed.
     Unfortunately, the Big Telco Plan does not include the model used to calculate their figures.
     Takeaway: The figures here contradict the Broadband Plan, the best on Wall Street, and typical costs of bandwidth, routers, support calls, DSLAMs, and the other components of broadband cost.. They might be fine, but I believe it should be tossed aside until the data is verified. More http://bit.ly/nzZ84U

Billion Dollar Incentive Not to Build Broadband http://bit.ly/oNnr1O
Prefer money without investing.
The Big Telco Plan puts a cap on what the big telcos could collect of $2.2B, about $1B more than they grab now from USF. (Chart below for 2010 does not reflect the scheduled drop at Verizon.) They almost certainly will set the rules and numbers to collect the full amount, which they claim is reduced from $9.7B. They are not actually required to build to any additional homes. If they build no additional broadband, they'll almost surely manage to collect the full $2.2B, perhaps by referencing the almost certainly inaccurate cost claims.
     If my projection they will collect the $2.2B is correct, they'd be fools to invest in any further broadband. Investment costs money. Any subsidy related to the investment would reduce what they collect on the already served lines.
     The solution is obvious and probably worth $10B over as many years: don't subsidize lines that already are served. The Big Telco Plan salls for not subsidizing lines where cable has broadband because obviously they don't need a subsidy. Apply the same rule to lines that already have DSL to them.
   President Obama promised to bring broadband to those unserved, not give away billions to the U.S. telcos, among the most profitable companies in the world. More http://bit.ly/oNnr1O


AT&T, Verizon Find Broadband Map Data Unusable http://bit.ly/qr8kcr
If reporters advance this story, NTIA boss is in trouble
Creating the model for the Big Telco Plan for USF/ICC, Jim Stegman found the data in the National Broadband map so unreliable he couldn't use it. Instead, he filled in many of the gaps by "augmenting the NTIA data on cable provided broadband coverage with Warren Media data." The number of homes unserved by cable according to NTIA is nearly twice reliable numbers from other sources. I estimate that if the six companies had used the NTIA map data, subsidies demanded would have been $billions higher.
    Everyone in the business - including FCC staffers - know the data is garbage and needs to be extensively revised. Reliable sources tell me the next version will be better, although according to what NTIA is telling me it will still be far off.
    Kathleen Grillo, Bob Quinn of AT&T, Kathleen Abernathy of Frontier, Steve Davis of Century, and Michael D. Rhoda of Windstream all signed the proposal,
   Many industry and regional newspapers have been covering this. I wrote Many "Unserved" Apparently Missed on Map , U.S. State Broadband Data Implies 4-5% Can't Get 3 Meg, 2% Not Even 1.5 , Broadband Map: 1.5M Californians Lost Broadband , NTIA Map: 10M Homes Lost Cable Modem Availability?



How Many Corporate Jets Are Buried in the Model http://bit.ly/oNnr1O
Begging for public money with private jets to DC.
AT&T/SBC is believed to maintain two jets just to take executives to sporting events around the world because ex-CEO Ed Whitacre didn't want to share his jet. BellSouth, now part of AT&T, kept a jet in D.C. just to ferry Congressman home and win their favor. I'd bet that these expenses are buried in the Big Telco Plan model, probably under SG&A. For $50B companies, it's an insignificant number. But other possibly buried items, like the $10's of billions of underfunded pensions and retiree health benefits, amount to a significant fraction. Without access to the data that went into the model, I can't estimate how big a factor this is.
    I don't believe public money should pay for private jets to the Superbowl.

From ABC News, outrage when the automakers did similar.
Big Three CEOs Flew Private Jets to Plead for Public Funds
By BRIAN ROSS (@brianross) and JOSEPH RHEE
November 19, 2008
   The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.

Germany: 50 Gigabytes of LTE 89.95 euro http://bit.ly/ni2jsU
DT is selling "up to 40 megabit" LTE, 50 gigabyte cap, beginning in Cologne and soon in 100 other cities. Verizon has essentially the same network - 20 MHz LTE - but is conservatively setting speeds of 5-12 megabits. With decent latency and likely good reliability, DT's offering is clearly a decent substitute for many with DSL. 80+% of DSL users draw less than 50 gigabytes each month. The average user in the U.S. draws about 20 gigabytes, but that's a mean and the median is lower.

     89.95 euro (~$125) is a very steep price, three times as much as similar DSL and perhaps four times as much as German cable. Vodafone's LTE service starts at €39.99 ($51.) "Up to" 50 meg down with a 30 gig cap costs €69.99. 30 gig is less than 90 minutes a day. LTE is great fast wireless, but the early German offerings are very expensive as an alternative to landlines. Some people who buy LTE because they need mobility will find they no longer need a landline, but at these prices I’m guessing we'll only see a modest amount of substitution.

    LTE Advanced, coming soon, networks easily triple the capacity at about the same cost. LTE tops out at 20 MHz; LTE Advanced can use 100. Much more, including how Germany is getting to almost 100% LTE very quickly http://bit.ly/ni2jsU

30-40% Will Pay (A Little More) For Faster than 10 Megabits http://bit.ly/n2Sh8k
Between 21% and 40% of Britain's Virgin cable customers are paying extra for speeds faster than 10 megabits, Merrill Lynch calculates. But not much. Virgin charges £13.50 for 10 megabits and £18.50 for 30 megabits. The £5 ($8) difference is enough to dissuade 61% of new customers from taking the higher speed. Only 8% take the 50-100 megabits service, although the price (£25-£35) is half what U.S. cablecos demand for similar
    The real but modest demands for higher speeds correspond to empirical data since 2008. In Japan, 26% were willing to pay about $5 more. In the U.S., nearly no one is willing to pay $99 for 50 megabits. Cablevision, facing FiOS, has lowered the premium for high speeds from $50 to $10, because nearly no one was buying at the higher price. Results aren't in yet, but I hope one of the analysts asks Dolan in the next call.
   On the other hand, cable at 10 mbps has long led DSL at a typical 3 mbps in the U.S. The ratio is 56-44% and (slowly) increasing despite generally higher prices for cable. Virgin has 42% of the broadband customers in the half of the U.K. they serve, despite facing more competition. Britain has 4+ major carriers, the U.S. only two.  The result: prices 20-50% lower than the U.S., but not quite as low as France.

18 Months, No Improvements in U.S. Broadband Deployment http://bit.ly/nPbVoa
June, 2011. Columbia University CITI is publishing the second edition of Broadband in America, the most careful independent survey of U.S. broadband ever produced. The first edition was prepared at the request of the Broadband Plan and extensively quoted by Blair Levin and team. The conclusion in October 2009 (below) was that about 95% of the U.S. would soon have high speed wired and LTE wireless connections available, whether or not the government did anything for broadband.
     20 months later, the good news is that prediction continues on track.  50-100 megabit DOCSIS 3.0 cable will soon reach 90%. 5+ megabit LTE looks likely to be at 94% in 2013-4 and 97-98% in 2016 or so, whether of not AT&T/T-Mobile is approved. FiOS and other fiber is now at 21M homes passed. 10-25 megabit FTTN/DSL is at about 30M. Combined, telcos are bringing 10 megabits+ to about half the country.
     During the last 18 months, the U.S. has developed a broadband plan and begun spending $7B on broadband from the stimulus. FCC Chairman Julius has set "affordable broadband" as his highest priority. The results: no effect. "The updated forecast included in this Second Report has not significantly changed,"
        5-10% will only have second rate choices without better policy.
·      The report is 176 pages of detail about U.S. broadband deployment and what will be. The first edition (October 2009):http://bit.ly/qIVpNb Second Edition (June 2011): http://bit.ly/nPbVoa Bob Atkinson, Ivy Young and team did solid work.

$21M for Faraj' Aquantia 10G Ethernet http://bit.ly/qKiiQG
Faraj Aalaei at Centillium was King of the Asian DSL chip market, with a near-monopoly as Japan built the best network a decade ago.  They were delivering 15 and even 30 megabit speeds (very short loops) while most of the world was still topping at 6 megabits. Eventually, they weren't a survivor in the very competitive DSL chip market.
     Faraj is back, shipping a small quad-port 10GBASE-T PHY aimed at reducing cost and especially power consumption in large data centers. LSI Logic joined a group of Tier 1 VC's in the round. The twelve 25mm x 25mm chips in the board above switch almost half a terabit. More, including some DSL chip history http://bit.ly/qKiiQG 

Common Sense: Uncertainty, But Little Evidence on Brain Tumors from Mobile
Dr. Nora Volkow, a world class neuroscientist, uses a headpiece for her mobile phone. I don't because I believe the evidence of harm is very weak. A team of epidemiologists in a review article concludes "Although there remains some uncertainty, the trend in the accumulating evidence is increasingly against the hypothesis that mobile phone use can cause brain tumours in adults."

Which seems sensible to me, although I second AT&T's Ralph de la Vega's call to do the research to come closer to certainty. The pictures at left, from JAMA and the New York Times, make clear cellphones do have an effect on the brain. It may well be totally benign. More, including the abstract of the paper http://bit.ly/qp3tbE

Femto Failure Frustrating AT&T at DSLR http://bit.ly/rhViaZ
AT&T has indefinitely postponed their plan of 10M femtocells, Ralph de la Vega comments. The femtos are causing interference except at the further reaches of the cell sites. Ralph reports great results where the signal is weak. WiFi offload will therefore be their obvious spectrum strategy. Femto engineers think the problems have been solved and point to other carriers like Vodafone who are happy. I've invited them to follow up with articles here. But Ralph one of the most respected folks in the industry so I take this seriously. More in an article I wrote at DSL Reports, http://bit.ly/rhViaZ


Cordcutters: Roku, WD, Playstation or??  http://bit.ly/qRxNT9
We made a mistake buying the Roku box. It's great for Netflix, but doesn't play AVI's and other common formats I get often. Dan Rayburn, the guru of Streaming Media, had a wall with more than a dozen boxes. Jennie asked him how to choose. His answer, alas, was "It depends ..." I learned we probably should have bought a Western Digital if we needed flexibility, or perhaps an Xbox, Dan's favorite. Next to the add-on boxes was another choice: Samsung's Connected TV.  The video interview http://bit.ly/qRxNT9


Fundamental Change "Shoot on the iPhone, Edit on the iPad, Upload from There" http://bit.ly/nDbFBp
Famed film professor Norman Hollyn tells us, "With YouTube, Vimeo and the like, it's so much more possible to get your message out. Not just from Hollywood but worldwide. … There are new people coming in all the time."
    Hollyn thrived in the studio system, working with Francis Coppola, Oliver Stone and other greats before settling down at USC Film School. Now, "It's so much easier now. There are so many ways to rise above the crowd due to the decrease in the price of technology."
    Jennie believes Hollyn's "Lean Forward approach" works as well for Internet filmmakers as for Hollywood traditionalists.  She jumped at the chance to interview him at EditFest New York, two days of top editors sharing what they've learned. The video interview http://bit.ly/nDbFBp

Press
Great headlines: Martyn Warwick Nokia and Siemens: Dying for a divorce but stuck with one another No one wants to buy them; Kaja Whitehouse Falcone begs FCC: His $3B bet on LightSquared at risk All lobbyists are beggars in fancy business suits, but this one is particularly desperate
Anton Troianovski, the new telecom reporter at WSJ, reports wireless carriers in the U.S. dropped 20,000 employees in the last two years and 40,000 in the last four. That's 20% overall and 40% in the call centers. That's a simple explanation for why the service keeps getting worse.
Ron Nixon NYT quotes Robert Bixby on unneeded government giveaways. “These programs are like vampires, you just can’t kill them. Just when you think there are dead, they manage to rise up.” The best way to protect universal service is by eliminating waste, but it's a tough fight. Most in D.C. think Sharon will make a bad compromise,

Wall Street
Wilton Fry downgraded Virgin to underperform after the stock has climbed from a low of $3.50 to above $30. He sees "looming structural issues." People are abandoning landlines, there's little room to grow triple play because they've sold it to most customers already, and BT's "up to 40 megabit" upgrades are becoming a factor.
Policy
Spectrum for LTE Advanced: Crucial for Rural Broadband http://bit.ly/pyamxp
The current average U.S. home draws about 20 gigabytes/month, already 2 to 10 times what carriers with LTE offer. So raising the wireless capacity is a high priority for wireless to be a real alternative. In rural areas, there are typically 10cow0's of MHz unused, enough spectrum to offer far more robust wireless service. Today's best technology, LTE, can only use 20 MHz; the 2013 version, LTE Advanced, can use 40 or even 100 MHz. That will be great, iff the politicians find a way to make it practical. Today's licensing rules get in the way and it's time to change them.
    There's massive unused spectrum in most low density areas, far more than LTE knows how to handle. LTE is designed for up to 20 MHz, which limits the total capacity to 30-70 megabits per second. (More right by the transmitter, less if many are on the outskirts.)
     Germany's leading the way to near 100% coverage with LTE, with Vodafone already covering 1,000 small towns. The speeds go "up to 50 megabits" although few homes get that speed. The problem is the capacity. Even the 70 euro (~$100) service is capped at 30 gigabytes, not enough for families that want to watch much video.
      Chris Neisinger of Verizon intends to actively deploy LTE Advanced in 2013. We are not talking science fiction here but a near term product. The standard is complete and leading manufacturers are promising the base stations today they are shipping today will only require a software upgrade.
      Unfortunately, there's no easy way for a private company or local government to aggregate that bandwidth. AT&T, for example, has 5 ten megahertz carriers in New York City, using 50 megahertz. In most of upstate New York, they need only one or two carriers, leaving 30 megahertz totally unused.  The last thing they want to do is lease at a fair rate their unused spectrum to anyone else that might in any way compete. http://bit.ly/pyamxp


House Spectrum Bill: Must Carry (Yes), Rural Broadband Limits (Needs Revising) http://bit.ly/ruKGV2
Extending cable must-carry rules when stations give up spectrum for auction will make obtaining spectrum easier. Today's technology, especially switched digital video (SDV), means the cost is minimal. But one section potentially cripples the effective use of spectrum for rural broadband, likely significantly raises the future cost of wireless, and leads to very inefficient spectrum use.  That's my plain reading of section 18, although the memo explaining the bill implies something totally different. The Republicans want to prohibit net neutrality and unbundling requirements, but the draft is so general a court might throw out crucial requirements.

    Germany will be close to 100% LTE coverage in 2013 when the U.S. will be far behind. Kurth in the last auction required the winning bidders first deploy to the unserved areas. Deutsche Telekom has connected 1,000 small towns previously not reached. The cost was remarkably little and far less than proposed USF subsidies. Vodafone explained that they found efficient ways to reach everywhere they were spending their own money. It was a requirement of their license, so their best engineers found affordable solutions. The bids in the auction were only slightly lower, and Germany will get almost 100% wireless coverage without future subsidies.

     Every regulator in the world watched Germany's success in rural areas, and that's the obvious choice in the U.S. as well. It will save many $billions. But the general prohibition on auction rules in the proposed bill might prevent the FCC requiring a buildout to most of the last 2-3%. That would be a mistake that would add $billions to the universal service requirement in future years.

     The second important step for rural broadband is to make sure all spectrum is efficiently used. That will become practical with second generation LTE Advanced, soon to be an exciting alternative in rural areas. LTE Advanced is crucial to good wireless broadband, I've learned from engineers at Verizon and the FCC. The current first generation LTE has severe capacity limits, demonstrated by low caps and high prices. That can improve, but the real breakthrough comes when LTE Advanced breaks the current barrier of 20 MHz. See Spectrum for LTE Advanced: Crucial for Rural Broadband. Putting together 40 MHz and even 100 MHz will allow raising the capacity 3-10 times. For the last 5%, that will bring wireless offerings much closer to what the rest of us take for granted today. This isn't science fiction. Verizon has announced deployments for 2013.

    Unlike crowded cities, there's plenty of spectrum in these extreme rural areas. But much of it belongs to Verizon and AT&T, who typically will have 40 MHz+ of spectrum they don't need for their own service in such low density areas. The last thing they want to do is release it to competitors for a dedicated high-capacity rural offering. The FCC needs creative rules, including use it or lose it on spectrum, is it is serious about reaching rural areas with affordable broadband.

    Bravo to Neil Fried and House colleagues for making the discussion draft public. I believe a good lawyer could use the language of the bill to go much further than the Committee intends. It's worth revisiting if we really care about rural broadband.  

I also believe that letting the two dominant companies buy more spectrum is a mistake. Canada and France are seeing mobile prices come down 15-20% because they reserved spectrum for competitors. Nearly every country except the U.S. has similar rules.

Reply "subscribe" to be added, "un" to be dropped
Volume 11, #31 July 17, 2011

June 30

       Say hello to the round fellow with a beard at the Montana Telecom Association at Rock Creek, August 1-3. I always learn when I meet people actually running networks.

*** 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)     

Telstra Intimidated by 5 Teenage Hackers http://bit.ly/iyf69e

 

Telstra was reported backing off from a plan to block suspected child porn sites "because of fears of reprisals from the internet vigilantes behind a spate of recent cyber attacks. It is understood the unstructured collective of hackers that identifies itself as Lulz Security, which has an agenda to wreak havoc on corporate and government cyber assets, claiming this is to expose security flaws, is one of Telstra main concerns." Andrew Colley, The Australian, a Rupert Murdoch paper. http://bit.ly/k6ZrXA

 

Update 6/28 Perhaps because of the embarrassment of the news reports, Telstra has changed their minds and agreed to block Interpol's list of sites. A hacker tale http://bit.ly/iyf69e

 

*** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http://www.assia-inc.com/DSL-technology/assia-blog/2010-11-29/go-green-with-ASSIA-power-management.php by Wonjong Rhee (ad)

Asia's Great DSL & Fiber Quarter http://bit.ly/jmVpgP

 

The Forum/Point-Topic figures show Q1 as the "fastest global broadband growth since 2009." The heart of the story is China, whose 6M new subscribers were 40% of the 15M worldwide. Fiber is about half of the new connections in China according to one estimate, but I haven't been able to find an official source. China's growing at twice the rate of Europe or the U.S, The Internet is not yet "a Chinese lake," but China's (135M) lead over the U.S. (89M) now is about 10M more than the count in the third largest, Japan (35M). In another year at the current pace, China's count will be as much as the U.S., Japan, and #4 Germany (28M).
Q2 in China looks slightly slower. China Telecom + China Unicom did about 3.5M in April and May. I predict the growth will accelerate when the political obstacles to cable modems are overcome, likely soon. Interesting charts and more data http://bit.ly/jmVpgP

 

*** Real-time diagnostic information about subscribers’ home networks that lets service providers optimize performance even in highly complex subscriber environments ? Lantiq XWAY PROBE (LXP)  (ad)

Kuwait "relentlessly calling on ISP's to lower internet service prices" http://bit.ly/jJvd0v

 

The popular sentiment, even in wealthy Gulf States, is that Internet prices need to come down. Some of the most interesting carriers, Etisalat in particular, come from the region. Abu Dhabi is the first capital city to approach 100% fiber to the home and soon nearly all the UAE will be fibered. Al-Mazidi sounds good in this statement, but like all politicians, Al-Mazidi should be judged on results, not rhetoric. From the official Kuwaiti news agency: Abdulmuhsen Al-Mazidi stressed Wednesday the importance of decreasing internet service prices, calling upon by the ministry to open up the country's market for other Internet Service Providers (ISP). The official added that his ministry is relentlessly calling on ISP's to lower internet service prices.

*** Spectrum management technology that maximizes performance of VDSL and G.hn networks operating side-by-side? Lantiq XWAY HARMONY (LXH) (ad) http://bit.ly/dL4DTR  
 
Uganda, Australia Getting HD Voice http://bit.ly/iVxysy
Mobile calls in Moldavia or Uganda will often be better than anything in the U.S. France Telecom/Orange is bringing mobile HD to Uganda, Armenia, and the Dominican Republic, as well as to their main European branches. Verizon and Comcast are planning for HD in the U.S. but little is likely before 2013-2014. http://bit.ly/jlUBQu,

 

http://bit.ly/kb47gK

 

   CTIA President Steve Largent cancelled his subscription after I wrote Deutsche Telecom, Verizon: Our Voice Quality Won't Suck Much Longer. http://bit.ly/kb47gK

 

Tony Melone of Verizon understands why I believe all wireless networks suck until they move to HD voice. "You really, really see a quality difference with high-def Voice over IP, which we plan on implementing." Decide for yourself at Telstra's demo, which uses an improved codec but not a higher bit rate. http://bit.ly/l1Bb9w

 

put on headphones unless you have superior speakers on your computer.
    Landlines as well can and should sound better, with France Telecom/Orange leading the way. They are releasing the Samsung SMT W3510 high definition voice fixed phone, using cordless CAT-IQ phones. (That's the replacement for DECT.) They expect "in 2013, interoperability between the various operators, based on common standards, such as CAT-IQ 2.0 for fixed HD Voice or WB-AMR for mobile HD Voice." They are launching fixed HD voice in Tunisia, Spain and Poland.
    France Telecom is proving again how great competition can be; they had to do this because Xavier Niel included HD in the Revolution FreeBox which is winning subscribers almost as fast as they can be produced.
    Telstra in Australia also is jumping in with what they call "The first major advance in mobile voice quality in 20 years." Buy any of four handsets and HD is included at no extra charge. "Telstra expects a large percentage of new devices to be launch with HD Voice support in the coming year."

** ASSIA Software-as-a-Service option for high-Speed, dynamic DSL management will improve your network management without requiring an investment. A cost-effective, easy to implement solution for regional DSL operators. (ad)

Fifty Cents/Megabit for Big Bandwidth http://bit.ly/ma1bON

 

“You can buy a megabit today for fifty cents. In five years, it could be ten megabits for the same price.” Hunter Newby of Allied Fiber was answering questions at the Telecom Exchange event at Cipriani's. Fifty cents is the price if you’re the size of an MSN buying 100 gigabits, maybe. For a small customer buying 1 gigabit, he said you could expect a price as low as a dollar or two at a major connection point, $5-10 at a regional hub. He doesn’t sell bandwidth but is in the middle of the market every day and well-informed. Asian and European prices are often 50% higher than the U.S.
      The continuing price drop is great for everyone except those selling bandwidth. The drop in transit costs allows carriers to keep prices level despite the 25-40% growth in Internet traffic every year. Here's how to convert from costs per continuous megabit to other contexts. These are based on industry rules of thumb, and vary based on traffic patterns, etc.
     $1/customer/month on a large cableco or telco.
     $2-5/customer/month for an efficient small telco
     $5-20/customer/month if too small to buy bandwidth efficiently
more at http://bit.ly/ma1bON

 

Briefs  some big ones this time

• iPhone Lite iPhone 5 looks nice but the iPhone Lite could transform the industry. Apple's iPad is sweeping the market because they came in at $499, showing Steve's learned his lesson since the original Mac failed to sell at $2,500. iPhone Lite could be profitable at $299 (unsubsidized) compared to about $700 for the iPhone. $200 Android phones from Huawei and ZTE are sweeping Asian markets and about to make a huge impact in the U.S.  They will be under $100 in 12-18 months.
• Australia Fiber deal done 93% of Australia will almost definitely get fiber to the home as the $11B Telstra/NBN deal probably will sweep aside obstacles. Telecom New Zealand is moving ahead on structural separation, where 90% of the country will get fiber home.
• 50% of Italy will get fiber by 2020 according to a new government plan. That's about twice the U.S. and comparable to Britain and Germany  if they deliver.
• Net Neutrality is now law in the Netherlands. The public was so outraged that KPN was tracking everything people texted from network applications that the government fast tracked the bill. They join Chile.
• 2011 chip sales will be higher. 2011 chip sales will be lower. Digitimes headlines both, with Gartner cuts 2011 chip forecast & IHS iSuppli raises 2011 chip forecast, pointing out the discrepancy. A reporter looking for the truth will always look to confirm analyst forecasts rather than blindly echoing them.
• “The continuation of Moore’s Law is assured for at least a few more years.” Bruce Rayner, EE Times reviewing chip progress. Moore's Law is bringing down the actual cost of delivering bandwidth over landlines about as quickly as bandwidth demand has been growing, making fools out of those who thought the Internet would be seriously congested. My take is the situation in wireless is similar, but that's a complicated question.

email

• On HD Voice, Glenn Fleischman writes “Skype has had a very high dynamic range codec for years. I nearly always use Skype-to-Skype to talk with colleagues, and increasingly am able to use it for interviews as subjects are much more likely to have it installed and know how to use it. By capturing the full range of the human voice, you have a more human conversation.” I do all my work on Skype as well. Sometimes it's great, as you note. It certainly proves what a good codec can do. On the other hand, sometimes it isn't.

Press

• Matt Richtel was in Denver June 25 to read from his new novel, The Devil's Plaything, at legendary bookstore The Tattered Cover. Matt won the Pulitzer Prize for his NY Times reporting on the dangers of driving with cellphones. He teases the book

“The number of people suffering acute memory loss is doubling every fifteen years.
Shipments of computer memory are doubling every two years.
Are these two statistics related?
More than you dare imagine”
 It's $9.99 in paper and cheaper on Kindle at http://www.amazon.com/Devils-Plaything-Matt-Richtel/dp/0061999695

 

; expect every pr person in telecom to buy a copy.

Wall Street

• Fairpoint has lost 60% of their market cap and is losing money even after the bankruptcy restructuring. Stimulus money is building fiber across most of Vermont and Maine and several aggressive CLECs intend to put it to use. I have not done the research to make any projection of Fairpoint's future, but at the current rate they are out of cash within 3 years. I therefore think it absolutely prudent for the FCC and the states to immediately develop contingency plans. Repeat: I am not predicting anything but the risk is unmistakable and the time for regulators to get ready is here.

One Viewpoint: 60 Meg "Adequate for Every Conceivable Application" http://bit.ly/lgeanO
Australia's Shadow Communications Minister Malcolm Turnbull believes the national fiber network is too expensive and only cabinets should get fiber because 60 meg is more than any home would need. Many disagree. Dean of communications scholars Eli Noam writes “There is no doubt in my mind that within 20 years virtually all American households will use bandwidth well above 200 Mbps.’

     That 50 megabits is enough for most people was the underpinning of the U.S. National Broadband Plan. No one would say it directly, but the decision was made early on that the cost of fiber was too high. Unlike Australia, the U.S. has cable to 96%, nearly all of which is upgrading to 50 and 100 megabits down and 20 megabits up. Deciding that was enough, the plan moved on to other things, including the last 5-10%. There are a number of similar decisions made by the planners and at the heart of FCC policy. Julius is comfortable abandoning the last 1-2% to satellite. Rural telephone carriers will be allowed to go bankrupt where cable is serving. Several at the top of the FCC want to extend that "we won't subsidize phone wires" to areas served by wireless.

    60 megabits from "fiber to the node" is an amazing claim to most of us, even limited to 750 meters. AT&T gets 25 megabits and British Telecom is hoping for 40 megabits. Vectoring, now in early trials, is working well on new networks with short loops. The 60 megabits 750 meters should be achievable. Existing builds with complicated interference and cross-binder hook-ups are proving tough, but a clean new build like Turnbull hopes for the NBN should reliably go 50-60 meg the 750 meters.

Turnbull's opinions from delimiter.com.au . I'm glad the NBN is moving forward, although the costs need to be controlled very effectively.

“With a fibre-to-the-node configuration like that, if the last segment of copper was 750 metres or lessand we had this confirmed only today by one of the leading telecommunications companies in the worlda download speed of 60 megabits per second would be very achievable, along with an upload speed, depending on whether it was 750 metres or closer, of five to 10 megabits up to an effectively symmetrical speed of around 50 to 60 megabits per second,” he said.

     “That type of bandwidth is more than adequate to cater for every conceivable application that a residential user would need. To go from 50 megabits per second to 100 megabits per second in a residential context would be imperceptible; the user experience would be no different. You would not be able to tell the difference because there are simply not the services and the applications to take advantage of that higher speed.” More from Turnbull http://bit.ly/lgeanO

*** ASSIA is proud to be selected as a Red Herring Top 100 North America Tech Startup.  The Red Herring Awards honor the most promising new business models in North America, and celebrate these startups’ innovations and technologies across their respective industries.  http://www.assia-inc.com/

Australia: Rats Eating the Lines
"There is a hell of a rat plague," Telstra confirms, as 50 customers in Birdsville have lost service. Diamantina Mayor Robbie Dare tells ABC this "has been going [on] there for four or five months and they don't seem like they are letting up either." Chewed up cables are letting water in. Some of the faults are intermittent and hence especially hard for Telstra to diagnose. The problem has become severe across Queensland since the flooding.
     The Broadband Forum has not yet released a protocol for testing DSL lines for rodent damage.

*** Lantiq invites you to a presentation by Dr Martin Schenk, our CTO, speaking Conlife, the connected home conference in Cologne June 30. The topic will be "Network Infrastructure for the Intelligent Digital Home.  http://www.conlife-cologne.de/de/conlife/home/index.php (ad)

AT&T U-Verse Build Essentially Ending http://bit.ly/kAIbd1
My article at DSL Reports is straight from AT&T President John Stankey at Citibank: after reaching the 2011 goal of 30M homes passed, there will be very little additional U-Verse buildout. He announced 55-60% as their ultimate goal - about the same 30M homes. He suggested that 25-30% of AT&T homes will only be offered ADSL. 20% are "not a heavy emphasis for investment," i.e. 5-10 million of AT&T's 50 million homes are screwed unless they have a decent cable alternative. (Yes, rounding means not necessarily equal to 100 %.)
    U-Verse is holding and winning customers much better than I and others expected. CFO Ritcher told investors "Consumer wireline is growing again, thanks to our U-verse product. We're really just seeing the benefits of scaling the service and it gives us great momentum. U-verse is transforming our consumer results. Where we offer U-verse, our ARPUs are higher, our churn is lower, our customer satisfaction is better across all of our products." I'm guessing that what's going on is that AT&T decided they had no choice but to raise capex on wireless, accelerating the LTE build to prevent falling too far behind Verizon. Expanding U-verse to 75-85% is almost surely profitable after cost of capital, but any competent CFO today would tell his boss "Don't raise capex if you can help it." More at http://bit.ly/kAIbd1 I'd guess Stankey is slightly off and they will do a little more.

*** Martin Geddes, Dean Bubley Telecoms Strategy Masterclass: Future of Voice
Santa Clara, Thursday, Jun 30 2011. A custom, interactive, expert-led learning and networking event that provides you with the best available map across the new ‘mobile, social, cloud’ communications landscape. It proposes an alternative to dumb pipes and decline: happy pipes and helpful phones.
   We promise radical provocative ideas based on our deep experience as analysts and consultants stimulating conversations. http://www.amiando.com/fov1.html Martin Geddes is one of the most interesting folks in the business, loaded with ideas. I often disagree but always listen.

$30 To Double Modem Speed with Bonding http://bit.ly/lmT1Gi
David Thompson of ZyXEL intends to sell millions of bonded gateways and is pricing to make it so: he'll happily sell double-speed bonded gateways to telcos for about $30 more than a regular gateway. That provides 80 megabits a very short distance with the 12 megahertz VDSL2 and 25 megabits thousands of feet further than a single line. Bonding has been included in DSL standards for a decade, but numerous practical problems have meant very few actual customers. Gateway and modem processors now typically have enough processing power to keep up with two lines. ZyXEL needs only a single VDSL chip for two 12 megahertz connections, further reducing cost. I doubt the incremental bill of materials is more than $3-5. On the other end, DSLAM ports are also coming down in price, often to about $30.
     Doubling speed now costs less than $100/home, including the extra DSLAM port, the bonded modem, and the extra labor for connection. That's about $2/month over 48 months, plus a few dimes per month (at most) for the additional bandwidth itself. There's plenty of unused copper almost everywhere as wireless replaces landlines. Any telco who chooses to offer double speeds has no technical obstacles.
     Most telcos do not and will not offer double speeds, unfortunately, unless required by regulators. Nearly every telco has fired so many engineers and field staff they are afraid to complicate their networks with any non-standard component. The crucial exception is carriers selling IPTV, who now can offer TV to many more customers.
      AT&T has about 5 million homes passed by U-Verse that can't buy TV because they are too far for the minimum 25 megabit service. That's why AT&T has been promising customers bonding since 2007 and becoming increasingly frustrated with unfulfilled promises from manufacturers. When they choose vendors, the volume could be huge.

*** ASSIA service provider benefits achieved include:
Up to a 60 percent  reduction in calls, dispatches, and churn related to physical layer issues
Up to a 40 percent increase in speed and service reach
Up to $500,000 savings per year in energy costs using the power management module in a 1 million line network without compromising speed and reliability
Automatic, high-speed repair and optimization of all network lines
Support for bonded lines, which allows an operator to double speeds by utilizing 2 lines to serve a consumer’s home  http://www.assia-inc.com/  (ad)
Deutsche Telecom, Verizon: Our Voice Quality Won't Suck Much Longer http://bit.ly/kb47gK
Verizon CTO Tony Melone gets it "You really, really see a quality difference with high-def Voice over IP, which we plan on implementing." About 30 seconds after you hear HD Voice, you realize the phone quality you've been listening to all your life sucks compared to what's possible. With CTO Tony Werner of Comcast also promising HD Voice http://bit.ly/jlUBQu, all the other carriers in North America will now need to make plans to upgrade.
    Neither of the Tonys put a time frame on deployment, but Verizon intends serious deployment of Voice over LTE in 2013 and it would be natural to deliver HD from the beginning. Either the first or second LTE iPhone will almost certainly have HD built in. It requires the phone to have a better microphone, but otherwise any 2013 era smartphone should easily be able to process a wideband codec. 
     Deutsche Telekom has just begun deploying millions of home gateways designed for HD cordless handsets. Daniel Hartnett of Lantiq is supplying the COSIC chip that brings the latest DECT cordless standard, CAT-iq 2.0 and allows connecting two DECT phones. Nearly all gateways today have enough processing power and memory to run the high-bit-rate codec for HD; the primary additional cost is just the $2 chip. Free.fr has HD CAT-iq 2.0 in the new revolution gateway, and France Telecom is providing the same function on a USB stick. France Telecom is in general deployment of HD, first in Moldavia and soon in Spain, Poland, Switzerland and Paris. Mahony reports France Telecom has sold 1M HD capable handsets and has active plans to connect their wireless HD with wireline.
        HD Voice uses an improved codec with wider dynamic range and a higher bit rate than ordinary voice calls, wired or wireless. It's typically 32 kilobits, an insignificant network load in a megabit era. The added gear is now so cheap - ? $3 - it's almost a no-brainer to include it.
    It will likely spread across Europe in the next 2-3 years, where DECT phones are popular. The U.S. is behind, but as soon as either of the Tonys deploys expect a mad rush to match them. Networks with millions of subscribers take years to change, so if you will need to match Verizon or Comcast you need to begin engineering work yesterday. 
   Interoperability - so that a Comcast customer can make an HD call to a Verizon customer - is still little more than a dream.
 
*** 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)
  
Dado Back in Charge at Ikanos http://bit.ly/jHsBaS
Dado Banatao worked miracles in the chip business over the decades, but so far hasn't been able to pull any rabbits out of the hat for Ikanos. His VC firm took control of the company a while back and Dado did a turn as CEO. He passed the job on to John Quigley from SiRF another of his companies. That hasn't worked out.  John is now leaving and "will now be pursuing interests more aligned to my passion for change management and enabling both individuals and organizations to explore the unfettered art of the possible.”
    Dado's first action was to Company confirm revenue and earnings for the second quarter. Revenues will be between $31.0 million and $34.0 million. VDSL, the company's strength, is booming in Europe. Germany, England, KPN in Holland and Belgacom are deploying.
     Ikanos Vice President of Vectoring Technology, Kevin Fischer, recently brought a 32 line demonstration of node-scale vectoring to the TNO conference in Leiden. Ikanos believes "Line-card only vectoring provides only marginal benefits," at least in some real world examples. They believe that noise needs to be cancelled across the binder to be effective in large-scale network deployments. I'm waiting for field trials and actual deployments to prove what works. Without a doubt, vectoring VDSL can dramatically reduce noise and increase speeds on short (less than 1,000 meter) loops.
     Bonding + vectoring = 100 megabit DSL. Some places, someday. Probably soon.

*** Broadband Communities is the new name of Broadband Properties magazine. The magazine offers in-depth news, expert insights, and practical know-how on the technical, business, financial, legal and regulatory aspects of deploying Fiber-to-the-Home and other leading-edge broadband solutions. Subscribe at https://www.cambeywest.com/subscribe/?p=bbp&f=new (ad) Steve Ross does some of the very best reporting on fiber, well worth paying for. Since the magazine is free, it's a no-brainer to subscribe. db

Quick: 1 and 4.5 Gig DOCSIS Explained http://bit.ly/mQE15K
I've been reporting since 2005 that (shared) gigabit cable would come so this is no surprise. John Chapman and Anton Wahlman provided the roadmap at Fast Net Futures. ARRIS at the 2011 cable show demo'd 4.5 gig down by eliminating any TV programming and using the full bandwidth (128 6 MHz channels) for data. Comcast bonded more than 25 channels and showed 1 gig down and 300 meg up. These are improvised demos, not close to production equipment. It will take two to five years for gear that would make this practical for regular customers; lots of other obstacles beside the technical mean you will not see these speeds at home for a very long time.
    Coaxial cable by design carries robust signals, divided in the U.S. into typically 128 channels. In DOCSIS 3.0, every 6 MHz channel delivers about 40 megabits downstream.
4 channels bonded give you the shared 160 megabits now available to 70% of the U.S. It's all done on standard chips and needs no special hookup, so 160 meg gear costs little more than 10 meg gear.
8 channel bonded chips are now coming from TI and Broadcom and were used in the demonstrations. They will cost little more in modems and soon will allow 320 meg (shared) connections.
25 channels, bonded, yield a gigabit. It would take extra chips today but is completely possible. When in 2008 Singapore demanded a gigabit broadband system, both Cisco and CableLabs put top engineers to work on a gigabit over cable. The conclusion: perfectly practical but too expensive at the time. Moore's Law has brought down the chip cost, and commercial cable modems should be capable of a gigabit in 2014-2015.
100 channels bring capacity to 4 gigabits. ARRIS used 16 8 channel bonded modems to demo 4.5 gigabits in Chicago.
300 channels and over 10 gigabits are practical with better amplifiers and other field components. Cox did some experiments with 3 MHz cable equipment and they were a technical success.
EuroDOCSIS, based on European television standards, uses 8 MHz channels and hence carries 1/3rd more data per channel.
Takeaway: Coax can carry gigabits, although that will rarely be a commercial product. The gigabit (shared) capacity will become important later this decade as data usage grows. Raising the shared capacity to a gigabit can maintain solid performance for all users at 50 and 100 megabits. My guess is some nodes will need upgrading from today's 160 shared in 2015-2018. The increased capacity will support 50 meg service well into the 2020's.
 
*** Interested in “End-to-End Carrier-Grade QoS over Anything” (including G.hn, Wi-Fi, Ethernet, DSL and PON)? Lantiq XWAY STREAM (LXS) (ad) http://bit.ly/dL4DTR

$10 More Gets 50 Meg DOCSIS, 400 Gig Cap at Shaw http://bit.ly/iFEIjA
Shaw's $99 triple play now includes 50 meg DOCSIS. Including 50-100 meg at about the same price is working wonders for cable in Britain and France, pulling Virgin and Numericable well up in net adds. This isn't an introductory teaser rate but the new standard price; slower modem service only saves $10. On the other hand, 50 meg standalone is $75, 50% higher than slower speeds. Presumably, that's because the bundle buyer is not cutting the TV cord, as Karl Bode notes.
     Except for Cablevision ($15 additional) and now Shaw, U.S. and Canada cablecos and telcos charge about $100 for 50 meg, twice the price of Britain or France or their own price for 10 meg. Because of the incredible cost-efficiency of DOCSIS 3 gear, 50 meg today cost the carrier less than 5 meg did a few years ago. Where competition is not totally hobbled, 50 meg today would therefore cost no more than 5 or 10 did. Most places, the U.S. telco/cableco duopoly has a “separate peace” that keeps prices high. Shaw is rapidly losing video customers to Telus' IP TV, where the intensifying Canadian wireless battle is producing spill-over effects.
    From Japan to Germany, and all stops in between, we're finding customers are willing to pay only a modest premium for speeds faster than 10 megabits. Many will pay $5-10 more. At $50 extra, almost no one is buying. http://bit.ly/iFEIjA
     At $10 additional, high speeds may prove a killer against ADSL.

press
Martyn Warwick thinks MySpace “irrelevant, old-fashioned and bleeding what's left of its once huge user base like a haemophiliac woolly mammoth after a particularly bad accident with a scythe.”
Scott Woolley at Fortune asks the right question: “Cell phone use is way up. So why did brain cancer ratesfall?” http://bit.ly/lD6yth U.S. brain cancer rates are slightly lower than in 1991 or 2001.  He adds “The chart's clear disconnect between radiation dose and cancer rates does not conclusively prove cell phone are safe,” per epidemiologist David Savitz. “It's possible there is simply a huge delay between a person using a cell phone and that exposure causing a brain tumor.  Yet Savitz also finds the utter lack of an increase in total brain cancer following the massive increase in (low-level) radiation very reassuring. Even if the average lag between exposure and symptoms was 30 years, there would almost certainly be outliers who develop symptoms after just 20 years -- outliers who would be showing up in the data by now.” Personally, I'm not afraid to hold a cell phone to my ear because the evidence of harm is so limited. On the other hand, I've reported serious scientists who are worried. Ralph de la Vega of AT&T is right to call for extensive study, especially on kids. His trade group, CTIA, should echo that call and back away from strident denials. CTIA should also withdraw their lawsuit against testing and labeling phones.
Thanks to Reinhardt Krause at IBD http://bit.ly/jDNkMP  for including me in a story saying that the AT&T/T-Mobile deal,” will come down to Julius' personal vote, with the other Democratic members willing to say no if he does." But Burstein added in an email that blocking the deal would be "a tough decision to make politically."

people
Laurie Gonzalez of the Broadband Forum did a great job in the latest press webinar. Her enthusiasm about record gains was infectious.
Marius Schwartz, the new FCC economist, hasn't answered my question about how much he has been paid for his advocacy for a large carrier. I hope he chooses to make that information public.



policy
I'm working on, and welcome data about: public safety & multiband phones, Germany's advancing rural broadband, the multi-billion dollar giveaway the Bells are demanding from USF, how much AT&T/T-Mobile reduces investment, WTF happened to the crucial Allvid proposal in the broadband plan, Mexico/Canada/France limiting incumbent spectrum purchases, likely loan defaults at CoBank & probably RUS, and the America Tax demanded by France and Deutsche Telekom.


From our advertiser Lantiq
G.hn Moves from Specification to Reality
HomeGrid Forum, Broadband Forum and Multiple Silicon Vendors Celebrate Resounding Success at the Close of the First Open G.hn Interoperability Plugfest
Beaverton, Ore., June 7, 2011  In a win for the wired home networking industry, four G.hn chipset manufacturers converged in Geneva, Switzerland for the world’s first open G.hn Interoperability Plugfest. A joint effort of HomeGrid Forum and the Broadband Forum hosted at the ITU-T’s global headquarters and organized by University of New Hampshire InterOperability Laboratory (UNH-IOL), the event presented the first open opportunity for silicon vendors to test the interoperability of their products, based on the G.hn home networking standard, which will be globally deployed by many service providers, PC manufacturers, appliance manufacturers and consumer electronics companies.
    Lantiq, Marvell Semiconductor, Metanoia, and Sigma Designs participated in the interoperability event with their G.hn silicon test platforms. The success achieved highlights the maturity of the various vendors' designs as well as the completeness of the G.hn standard. G.hn interoperability is critical as it ensures a common standard for very high speed home networking options across different wired media.
“G.hn is here. It’s now,” said Matt Theall President of HomeGrid Forum. “Service providers are excited we have concluded this event and we are thrilled to report the successful completion of the testing. G.hn is already a reality with silicon now ready for deployment.”
    “The Broadband Forum is very happy that the first G.hn Interoperability Plugfest has been completed successfully. We look forward to the next steps in completing the test plans required to enable interoperability of G.hn products,” said Robin Mersh, CEO of the Broadband Forum.
     HomeGrid Forum is rolling out its Compliance and Interoperability certification program in 2011, allowing HomeGrid Forum certified products to be brought to the market this year and establishing a new industry benchmark of technology excellence for wired home networking.

Reply "subscribe" to be added, "un" to be dropped
Volume 11, #29 June 15, 2011

June 4, 2011
Is DSL finally dying?" No! http://bit.ly/klETuM
1.5M March at China Telecom; 6M China Quarter http://bit.ly/iRPgCM
Ericsson's Near Million Port DSLAM Quarter http://bit.ly/kwyrTM
AT&T Redoubling Outreach for Latino Employees http://bit.ly/kggEch
Reliability is Job #1: ASSIA Upgrades Espresse DSM http://bit.ly/kfEEiL
Reason ATT-MO Could Be Good; Unfair AT&T Criticism. Part 1
AT&T-T-Mobile Could Fail http://bit.ly/mniqdy
AT&T'S Quinn: We May Renege on 80%, 95% LTE Buildout. ?Satire http://bit.ly/jd9omB
For the Record: Dave Filing on AT&T-T-Mobile http://bit.ly/kw6PkA
I'm Not Paid to Bash ATTMO & Other Disclosures http://bit.ly/kZxYgB
Briefs: Correction LTE iPhone unlikely this year, No heels in Tokyo, BT clogged ducts delaying fiber home, Julia Angwin/Nick Wingfield/Scott Thurm and Yukari Iwatani Kane privacy reporting, Juliana Gruenwald. Joe DiStefano, Nate Anderson, Jeff Baumgartner's Chasing Voldemort ... er, Xcalibur, George Soros dumped VZ & T, Calix or Adtran for Century/Qwest, Caraza Alexis Milo, Greg Rosston, Brian Fontes, Phil Weiser back to Colorado, Mike Powell (Good cop) & Kyle McSlarrow team
Reply "subscribe" to be added, "un" to be dropped

“Technology will make it harder for Israel to defend itself.” Barack Obama

Chang Xiaobing at China Unicom is paying $1/port for quality GPON fiber units. That's Huawei's bid for OLT system units; with the ONT home unit, it's still well under $100. Fiber gear is now so close in price to copper there's no question fiber is the right choice for new builds. Ericsson got part of the contract with a similar low price. If you're buying thousands instead of millions of units, the price is more likely $200-$400.
      DSL isn't “dying,” however and will likely reach over 300M lines. Three-quarters of North America and probably similar in Europe will be DSL for the next decade and longer. As wireless grows in data, having a DSL/cable WiFi gateway in almost every home becomes crucial to every wireless network. British Telecom, AT&T and others see WiFi offload as indispensable for their wireless network. China Telecom is adding a million hotspots.
     Randall Stephenson of AT&T is running scared. Usually docile Republican Congressmen are asking tough questions. Nearly all DOJ and FCC leaders who have to approve the deal believe turning it down is the right thing to do, an insider affirms. He agrees with me they may not have the political courage, however. (Policy, at end)  
   

Is DSL finally dying?" No! http://bit.ly/klETuM
Jeff Heynan at Infonetics reported a double-digit drop in DSL equipment sales, inspiring Dan O'Shea at Telephony to headline "Is DSL Finally Dying?" Both note that DSL sales in Q1 were actually ahead of the same quarter last year. Yet Dan writes "Fiber is the future." Given that less than 30% of the U.S. is likely to be served by fiber this decade, that's quite a statement. Europe's figure is similar. There's little reason to expect much change next decade, as wireless gets increasingly central. John Cioffi was told to forget about DSL in 1990 because "fiber was the future." I think I remember John say "fiber is the future and it always will be." But DSL is the present for the vast majority of North America outside of Verizon territory. Europe varies by country, but DSL is likely more common than fiber across the continent for at least another decade.
     Heynan does report one crucial trend: more and more PON going into China. The Chinese reality is hard to establish, but major fiber volume is consistent with what I've seen. The Chinese telcos are 80% or so government owned and the ministry has shown they can CEOs at will. They mostly run as though they are private companies, with executive careers dependent on profitability. The government wants "fiber" because "fiber is the future," of course. The carriers have a shorter time horizon and are resisting the investment. Fiber in new builds makes sense and is becoming standard in most of the world. There are enough new builds in China to add millions of lines. It's hard to separate fact from rumor about how much fiber is replacing DSL; readers with insight, please write or call.
          Deutsche Telekom, British Telecom, AT&T, Bell Canada, Century/Qwest and many other carriers have made clear they will use DSL, not fiber, for the majority of lines because it's cheaper. Increasingly, that's DSL from a neighborhood DSLAM (FTTN) with short loops that will soon be capable of 100 megabits through bonding and vectoring. http://bit.ly/klETuM

*** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http://www.assia-inc.com/DSL-technology/assia-blog/2010-11-29/go-green-with-ASSIA-power-management.php by Wonjong Rhee (ad)

1.5M March at China Telecom; 6M China Quarter http://bit.ly/iRPgCM
In March, China Telecom added 1,470,000 new broadband subscribers. The total for the quarter at China Telecom was 3.4M adds to 67M. U.S. net adds for the year 2010 were also about 3.4M. China Unicom/Netcom added 2.5M to 50M.
     An increasing percentage of broadband at both companies is fiber home and from the basement, but neither breaks out how much is DSL and how much fiber. GPON is now part of the mix, although EPON figures are probably still higher. Anyone who has data, please share.


*** Lantiq's XWAY STREAM (LXS) delivers  “End-to-End Carrier-Grade QoS over Anything” (including G.hn, Wi-Fi, Ethernet, DSL and PON).  http://bit.ly/i0DRPw (ad)

Ericsson's Near Million Port DSLAM Quarter http://bit.ly/kwyrTM
Ericsson reports a "Strong quarter for DSL as a result of VDSL2 upgrade and network modernization programs. In central offices, voice is migrating from Class 5 to softswitches while adding broadband via multi-service access nodes (MSANs), using a common IP uplink for both voice and mobile broadband traffic." That's up 85% over last year. Nearly all of the 885K ports shipped went to Europe, where several big carriers are running VDSL from field nodes.
      They are also finding some success with GPON in China. China Telecom and China Unicom, formerly EPON shops, are doing significant quantities of GPON. China Mobile/Tietong, until now a very small factor in landlines, is beginning major GPON investments. Ericsson told me 18 months ago they could bring GPON prices into striking range of EPON, which has been selling in million quantities for under $100/home. The orders are now coming in, with most of the >10K ports of GPON going to Asia.
      I hope the other companies making market share claims follow Ericsson's example and supply actual numbers rather than vague claims. http://bit.ly/kwyrTM

*** Lantiq XWAY HARMONY (LXH) Spectrum management technology maximizes performance of VDSL and G.hn networks operating side-by-side. http://bit.ly/i0DRPw (ad)

AT&T Redoubling Outreach for Latino Employees http://bit.ly/kggEch
AT&T is right to highlight their Latino executives. "Alicia Abella PhD, executive director, AT&T Labs, gave the commencement address at the University of Minnesota’s College of Science and Engineering on May 6, 2011. ...Thaddeus Arroyo, chief information officer, has been named to Hispanic Engineer and Information Technology’s 2011 Most Influential in Technology list ...  Carmen Nava, senior vice president, Consumer, has been listed in Hispanic Business magazine was as a finalist for the Hispanic Business Woman of the Year award." The Bells have long been known for hiring groups shunned by some other companies. AT&T calculates that 12% of their workforce is Latino, and the quotes are from a press release encouraging more Latinos to apply for jobs. For decades, blacks have known they have a better chance of success at the telcos than at many other companies.
    Ralph de la Vega, born in Cuba, is president of AT&T Mobility and Consumer Markets and running much of the company from Atlanta, the old Cingular base. Ralph started with very little and rose to the top based on ability. He's an extraordinary executive who wrote a book, Obstacles Welcome, intended to inspire others. I reread it recently and noticed that in a plain spoken way there's a great deal of business wisdom passed on. It's definitely worth reading even if you're not part of the target group.

*** Lantiq XWAY PATH FINDER (LXF) offers automatic path selection across the home network, using real-time link quality information to choose the optimal communication path and dynamically avoid line noise that creates network bottlenecks. http://bit.ly/i0DRPw (ad)

Reliability is Job #1: ASSIA Upgrades Espresse DSM http://bit.ly/kfEEiL
In one minute, a tech in the field can get a full diagnostic across all the tones of a DSL signal, with instructions not to leave the home until it's fixed right. On the phone, a full diagnostic can run before a customer help call is assigned to a tech, directing true hardware problems to a tech able to work them rather than the first level support.
   ASSIA's new Expresse 2.3 reduces diagnostic inaccuracy from perhaps 20% to less than 10% and provides real time reporting for trouble shooting. That doesn't sound as exciting as doubling and quadrupling speed with bonding and vectoring, but is very much appreciated by managers needing to reduce operating expense. Reducing truck rolls and repeat visits yield enormous savings.
    2.3 features a new, improved noise model; separate testing of each tone; ability to discover multiple bridge taps; and geocoding/binder management. I'm on the advisory board of ASSIA which means I see the internal data. It's working very well.

Correction
At DSL Reports, I wrote of an LTE iPhone as likely later this year. Since then Will Strauss, an analyst I respect, has predicted delays in LTE + 3G chips will put the LTE iPhone into next year.  http://bit.ly/jd9omB
briefs
In Tokyo, there's been a spike in sales of flat shoes for women, after disruptions to the city's usually clockwork public transit system since the Tsunami. (NYT) The suits are back on Wall Street, however. At the Ericsson event, I was one of perhaps half a dozen not wearing a jacket. Before the recession, the less formal “west coast” style was becoming common. Now it's back to the grind, although as many as a quarter didn't wear a tie.
British Telecom has delayed their fiber to the home by six months to the end of the year because of practical problems in the field. David Mayer reports http://bit.ly/l6f7BZ a huge problem of "dirty ducts;" perhaps 1 in 5 ducts need to be "cleaned" before the fiber is blown through. That's an expensive consequence of bad design and poor maintenance, no surprise given how many engineers BT has been firing the last decade.
Press http://bit.ly/lGwTxM
Julia Angwin, Nick Wingfield, Scott Thurm and Yukari Iwatani Kane were short-listed in three separate categories for Loeb awards for their extraordinary reporting of “What They Know” in The Wall Street Journal. I'm in the business and much of what they found startled me. Maybe next they will examine the big push by telcos to track you at home via “smart grid” energy programs.
Juliana Gruenwald reports Anna Eshoo and Henry Waxman are trying again with their bill to require fiber ducts in new road construction. The chances of such a sensible bill making it through Congress continue dismal, as the incumbents don't want competition driving down prices. http://bit.ly/lA93dF
Joe DiStefano at the Philadelphia Inquirer wonders why "mobile service - and cable TV - costs so much less in China than here?"  Basic cable is only a few dollars per month and iPhone data prices are now down to $10/month. One reason is greater competition. Another is "If you raised prices there, people would revolt." http://bit.ly/lAXzNr
Nate Anderson solidified his position as one of the best tech reporters with Copyfight: EFF Co-Founder Enters e-G8 ‘Lion’s Den,’ Rips Into Lions http://bit.ly/lEFair. He captured the spirit of John Perry Barlow of EFF, the Grateful Dead, and marijuana busts was a token on a panel at Sarkozy's e-G8 control the Internet event and devastated the corporate hype of Bertelsmann and Murdoch. Barlow, "seated on a stage looking like a sleek spaceship, perched on a chair in front of a wall filled with corporate logos and delivering pleas for a new approach to creation based on an era of abundance." http://bit.ly/lEFair.
Jeff Baumgartner's Chasing Voldemort ... er, Xcalibur links to the seven articles he's written since 2009 tracking Comcast's move to all-IPTV rather than traditional cable. If you followed Jeff, an excellent reporter, you wouldn't have been surprised by the WSJ article this week that they are trialing an entire new network with MIT that is designed to offer their programming to anyone, anywhere.  Comcast's Sam Schwartz blogged Looking to the "Cloud" to Build a Better TV Experience http://bit.ly/jckGWR. Back around 2005, Comcast CEO Brian Roberts told me he was talking with Verizon's Ivan Seidenberg about offering his full programming package over Verizon's FiOS. Here in New York City, I could watch Comcast over FiOS rather than Time Warner Cable. There was no technical reason it couldn't be done, we both agreed. "It depended on the economics of the deal." Using FiOS or U-Verse to bypass the local telco and cableco offering would dramatically increase video competition. One of the most important parts of the Broadband Plan was Allvid, a box that would let the consumer choose alternate home systems to the cable box. It's a tragedy Julius didn't have the courage to make this happen. http://bit.ly/ihYojI
wall street
George Soros dumped the better part of a million shares of VZ & T, per Investment Underground at Seeking Alpha.
At the Ericsson event, I was twice asked whether Calix or Adtran would dominate the DSLAM orders at Century-Qwest. (I don't know.) When word gets out, watch for a move in the stocks.
People http://bit.ly/k50dB0
Caraza Alexis Milo, new commissioner at Mexico's regulator COFETEL, is an under 40 technocrat with both political experience and a Yale Ph.D. in economics.
Greg Rosston of Stanford and Brian Fontes of NENA are the chairs of the new Commerce Spectrum Advisory Committee (CSMAC.) There are outstanding people on the Committee, including Marty Cooper, an inventor of the mobile phone; Dale Hatfield, Robert Pepper, Mike Calabrese, Mark McHenry, Dennis Roberson, and Susan Crawford, as well as some of the usual lobbyists. D.C. reporters should find an opportunity to meet those people; they are far more likely to steer you to the truth than the usual D.C. sources.
Policy

Best of luck to Phil Weiser, leaving the White House to return to the University of Colorado as dean of the Law School.  Like predecessor Susan Crawford, he avoided the spotlight but was enormously influential behind the scenes. Phil's paper in 2008 led directly to the National Broadband Plan's “incentive auction” of the broadcast spectrum. Phil's original plan mollified the broadcasters by requiring “must-carry” even if they give up their broadcast spectrum. That makes even more sense today, as switched digital in most of the country has eliminated practical limits on how many channels cablecos can offer. Most of Washington doesn't realize that technology changes make practical previous plans like “must carry low power TV.” Kevin Martin, one again, was ahead of his colleagues on the commission. 
    Mike Powell has begun work at NCTA with a friendly statement about the Eshoo-Markey bill that would require fiber ducts in new road construction. http://bit.ly/lvqAVV  Cable now has a powerful combination in D.C. The well-liked Powell gets to play good cop for NCTA, while political operative Kyle McSlarrow leads Comcast in the hardball lobbying. McSlarrow had been hoping to get out of the political game and actually run something. I'm guessing Brian persuaded him to stay in the political game with a large paycheck. It may be even higher than the $2M/year Kyle collected from the cable association, although I doubt Mike is making the $7M/year Verizon paid Griffin Bell.

Unfair AT&T Criticism. Part 1 “Rep. Darrell Issa, R-Calif., expressed concern that a merger between AT&T and T-Mobile would harm competition in [backhaul.] 'We're reassembling a duopoly in the back end,' Issa said” National Journal http://bit.ly/jQhV1p That's stretching. There is an issue emerging about backhaul competition, especially after Level 3 swallows Global Crossing. But T-Mobile and DT's role in backhaul is modest.  

AT&T'S Quinn: We May Renege on 80%, 95% LTE Buildout. ?Satire http://bit.ly/jd9omB
In an article at DSL Reports, http://bit.ly/jd9omB, I wondered whether AT&T Senior Vice President Bob Quinn believes the recent FCC decision on mobile data roaming will "discourage investment and build out of broadband facilities" or was just telling a "politician's truth." The only AT&T investment in broadband left to cut is the LTE network. With U-Verse builds winding down, everything else is just maintenance, like replacing DSLAMs more than a decade old. Suggesting they might pull back on the buildout is risky given the likely struggle to get the T-Mobile approved. Because they are about a year behind Verizon on LTE, I don't think they can afford to cut that back. AT&T refused to answer questions about just what they intended to cut.

Reason ATT-MO Could Be Good
“AT&T has a strong commitment to diversity and inclusion at all levels of the company, including key leadership roles. The company’s workforce is currently 41% female and 39% people of color. While the top 50 companies for diversity boast a 13% African American employee base on average, AT&T has a 20% base.” MMTC 
       I also note that AT&T workers are unionized and T-Mobile workers not. The CWA thinks this is a good thing, as do I.

AT&T-T-Mobile Could Fail http://bit.ly/mniqdy
Randall Stephenson of AT&T is running scared. Usually docile Republican Congressmen are asking tough questions. Nearly all DOJ and FCC leaders who have to approve the deal believe turning it down is the right thing to do, an insider affirms. He agrees with me they may not have the political courage, however. California and New York State are ready to say no. Word is getting around the deal is not unstoppable. That's exceedingly dangerous for T. Folks speaking out - like Bob Goodlatte - were holding back their personal doubts because they feared resistance was futile.
     Wall Street's take that it's two to one the deal goes through still seems right to me. Cicconi is able to spend over $B to get the deal through, enough for an almost unbelievable amount of political power. Money is the mother's milk of U.S. politics, a California Commissioner reminds me.
     T needs a new strategy. Randall looked incredibly stupid saying ATT=-MO is essential to 97% LTE coverage. They already have all the spectrum they need in rural areas and President de la Vega tells Walt Mossberg AT&T must keep up with Verizon's LTE plans  97+%. The Broadband Plan CITI-Columbia Report estimated 94% for 2013-2014. It's unbelievable that AT&T would have stopped at 80% as Randall told the House. They can't afford to be destroyed by Verizon's LTE build in the remaining 1/5th of the country.  In addition, the FCC staff has the facts to decimate the argument that the deal solves the spectrum issue. (It helps in a small way.) Randall had no other reasons the deal is in the public interest.
     The notoriously reclusive Randall is personally going to the July 17 NARUC state commissioners' event in LA. By then, he'll have some new ideas, I'd hope. Maybe he'll spend ten minutes with me and answer real questions. 

I'm Not Paid to Bash ATTMO & Other Disclosures http://bit.ly/kZxYgB
My reporting on the merger is being noticed in DC so I'm sure someone is saying I must be paid by Sprint or someone. Most of DC works like that, unfortunately. No one has even offered; I may have a reputation for saying no to that kind of thing, as one of the largest carriers in the world might recall. The only money I make anywhere near ATTMO is the (three figure) fee DSL Reports pays me for the articles I write for them.
 The latest conflict I should disclose include a modest (low four figure) consult with a New York CLEC on how they can market their WiFi. Five years ago, I wrote the below disclosure when accused of taking payoffs to bash Verizon. Since I wrote it, I actually did one short consult with a big telco. Bell Aliant brought me up to talk about experiences of cablecos and telcos competing and paid me low four figures. Vermont Tel has provided a couple of four figure consults as well. The Wisconsin State Telco Association paid me low four figures to present about broadband as did a private group of independent telcos. I have to earn a living and welcome consulting and similar work. I turn down "consulting" when it smells like a payoff for me to write or kill a story, which happens occasionally. I include modest consulting in packages for advertisers, such as the advisory board position I have at ASSIA. I could use more like that.
For the record: Dave Burstein isn't paid by cablecos to bash Verizon (2006)
It's right to ask where the money comes from
DSL Reports picked up my opinion that it is a scandal that Verizon is only offering DSL to 60 percent of their customers in Maine. The comments came furiously, some accurately pointing out Maine is a relatively rural state and some customers are far enough away to be hard to serve. The "too far" customers may be 5 to 15 percent of the population (only Verizon has the data), but 20 to 30 percent of Verizon's Maine customers can't get DSL and don't have a distance problem. … One comment suggested I was paid by cablecos to criticize Verizon, and I believe it's absolutely fair to ask where people's money comes from. I'm about to report about some telco (and cableco) payments to influence people in D.C. I think improper. I like to refresh the record occasionally on how I earn my living. I sell ads to chipmakers who want to reach DSLAM manufacturers and other industry companies in my newsletter and occasional books, speeches, conferences and the like. I do some consulting, which I report to readers, and intend only to take real consulting gigs while turning down ones that feel more like payoffs.  As it happens, except for a few hundred dollars of Google supplied ads, I've never been paid a penny by any large telco or cableco, although I've had modest consulting gigs with small telcos. I have taken expenses for a trip to Bell Canada under non-disclosure (they picked my brain on cable strategies), and if the timing worked out would have welcomed more work with them. I also agreed to do some work for Deutsche Telekom on strategy, which didn't work out because I was tied up on Jennie's film. I once turned down an offer of support from a big phone company, because it came in the middle of their attempting to persuade me to kill a story about a conflict of interest on their board. A little more http://bit.ly/kZxYgB


For the Record: Dave Filing on AT&T-T-Mobile http://bit.ly/kw6PkA
If I know something in this field that I think is valuable to policy I present it as many places as possible, including FCC filings. Some people think reporters should never have opinions in order to reduce bias. Increasingly, reporters are pointing out they are human and have opinions. I believe it my job to acknowledge and recognize my bias. It's also my job to overcome my bias and report as close to the truth as I can.
 My first filing was unusual. It began "I am filing AT&T's latest 10K because I believe many of the claims in other filings, including AT&T's, are refuted by a reading of the AT&T SEC filings. In particular, I note that AT&T's capital expenditures dropped by $3B from 2008 to 2009 and even in 2010 were still below 2008. That's a good explanation of their service problems." FCC Chair Bill Kennard at a Wall Street event many years ago explained he was there because they told wall street truths the same companies denied in D.C. I believe an enormous amount of misleading information in D.C. would be ignored if regulators and reporters simply read the wall street filings.
 I also filed:
AT&T has made three claims on behalf of this merger that are almost certainly bogus.
    The claim that this deal is essential to reaching 95-98% of the U.S. with LTE is bogus. The CITI Columbia report prepared for the Broadband Plan found "Wireless broadband service providers expect to offer wireless access at advertised speeds ranging up to 12 mbps downstream (but more likely 5 mbps or less due to capacity sharing) to about 94% of the population by 2013." Since Verizon and other carriers indicated they would continue past 2013 towards full national coverage, it's almost certain the nation will be at 95-98% by 2015-2016 without AT&T, deal or no deal.
    The claim that this deal will have a major impact on any "spectrum crunch" is unsupportable. While combining any two carriers' spectrum and customers improves the utilization of that spectrum, the effect is small. T-Mobile claims their spectrum capacity will soon be strained by their existing 30M+ customers, all of whom would be absorbed by AT&T. The additional T-Mobile spectrum will be needed for the former T-Mobile customers. In addition, AT&T President John Stankey has told wall street they really don't have a major spectrum problem for many years and in fact speeds on their network are going up significantly and congestion down.
    The claim that this deal will yield increased investment and jobs is gibberish, as far as I can tell. AT&T has said they will increase their investment by about $8B compared to what it would have been, perhaps $2B/year, which would create jobs. However, T-Mobile currently invests about $3B/year and would almost certainly continue investing at least $2B/year if independent. If this is correct, the deal will result in lower investments as well as firing tens of thousands of T-Mobile employees. (Synergies.)     I believe it is wildly improbable that AT&T would have stopped investing in LTE after reaching 80% in 2013. Verizon is on track to be at 92+% in 2013 and continue building.I cannot believe that AT&T's plan for 2014-2017 did not include upgrading their existing towers for LTE, increasingly inexpensive. Stopping at 80% would leave Verizon with a compelling advantage across 20% of the U.S. The additional cost of going from 80% coverage to 96% is between $1B and $4B by inference from AT&T filings. That's between 2% and 4% of their annual capex.
    In this filing, I am discussing data that is often in error in the D.C. discussion and not my opinion about the merger. The goal is to keep the facts straight. Elsewhere, I've expressed the opinion the deal should be rejected immediately.
------------
As always, if I have any mistakes please let me know ASAP. http://bit.ly/kw6PkA


From our advertiser
ASSIA DSL Espresse 2.3 Revolutionizes the Power of DSL Networks
The latest release of ASSIA’s award-winning solution supports the growth of next-generation services, including IPTV and increased mobility
Redwood City, Calif. - May 11, 2011 - ASSIA® Inc., the leading provider of high-performance Dynamic Spectrum Management (DSM) software tools that are revolutionizing Digital Subscriber Line (DSL) networks, today announced the availability of Release 2.3 of its award-winning product, ASSIA DSL Expresse. New features include fully automated, real-time diagnostics that can integrate with a service provider’s IVR for increased customer satisfaction, and that let onsite engineers confirm line fixes; and neighborhood analysis tools with geo-location capabilities to facilitate highly targeted marketing programs and provide improved reporting capabilities.
     ASSIA DSL Expresse 2.3 is now available worldwide, and coincides with recent industry statistics that show the growth of DSL continues to outpace both fiber and cable combined. As service providers respond to increased consumer demand for next-generation services, ASSIA DSL Expresse 2.3 is providing the software management tools to help them keep pace without high capital expenditure.
    "TELUS provides a wide range of telecommunication services, including IP data, entertainment and video, designed to ensure our customers have the best possible user experience,” said Bob Sinclair, senior engineer at Canada-based TELUS.” ASSIA software solutions for improving the speed and reach of DSL are key enablers, helping give us the broadband DSL performance we need to continue to push the envelope with services such as our flagship Optiktm TV.”
    With more than 45 million lines under contract, ASSIA has leveraged the success of its DSM solutions to post a compound annual growth rate of more than 70 percent over the past five years. “ASSIA continues to drive the future of DSL technology with DSL management enhancements that advance next-generation consumer DSL broadband demand,” said Dr. John Cioffi, Chairman and CEO. DSL’s growth combined with the success of the ASSIA platform-agnostic DSM solution has resulted in ASSIA recently opening an office in China and expanding its worldwide sales organization.
    “ASSIA DSL Expresse 2.3 is providing the software management tools to help service providers keep pace without a high capital expenditure. ASSIA’s scalable solution incorporates bonding, vectoring, and DSM techniques that allow communications service providers dramatic, cost-effective results over the existing network.” David Emberley, research manager at IDC.

Reply "subscribe" to be added, "un" to be dropped
Volume 11, #28 June 4 2011

April 29

• DSL "Amplifier" Delivers 8 Meg 14,000 Feet http://bit.ly/iwLQb2
   
• Alcatel Takes Vectoring to Luxembourg http://bit.ly/iKazns
   
• Virgin UK 1.5 Gigabit Cable is not a Typo http://bit.ly/dHGBON
   
• 5M Lines of Gigabit+ UK Fiber Home http://bit.ly/jnDdqp
   
• Nikos on Calix: Not Really a Sell http://bit.ly/k4B1Ka
   
• Editorial: Freeze FCC PR Hiring
• $2B Tax Saving at AT&T, Verizon http://bit.ly/lHQSHY
   
• Ralph "AT&T's Network Performance is Getting Better" http://bit.ly/kh518f
   
• Prices Going Up As #1 Level 3 Buys #2 Global Crossing? http://bit.ly/iRqsMc
   

Reply "subscribe" to be added, "un" to be dropped

"We have 89 customer product tape-outs at 28 nanometers." Morris Chang, TSMC. Think quad-core performance on smartphones and tablets in 2012.

AT&T President Ralph de la Vega just told investors "The network performance today is getting better. We saw an increase in national broadband speeds over the last six months." Ralph has always told the truth in the dozen years I've known him. I have slews of data points AT&T's network is getting less congested and they will keep improving for several years. That's great news for everyone except lobbyists exaggerating the spectrum issues.

Duncan Tait of Fujitsu vows to deliver 5M lines of gigabit+ fiber home to small town and rural Britain, perhaps the largest fiber build in the Western world this decade.

It's about 20% of the country. Fujitsu will provide gear, build and finance the network, withprobably a $200-300/home subsidy.  U.S. owned Virgin Cable will be the anchor tenant, expanding beyond the urban half of the country it now serves. 80-85% of Britain could have a gigabit with a $3-6B subsidy if spent this wisely. The U.S., five times the population, could bring gigabit fiber to 80-85% for $15-30B, about 18 months of USF/ICC money.  Folks with a subsidy agenda are the source of the $100B and $350B figures for fiber flashed around D.C…

     This is not a typo: Virgin is delivering 1.5 gigabit DOCSIS to a few British businesses.  DSL is also getting faster. Alcatel has a field trial of vectoring, bringing speeds to 60 meg at about 2,000 feet. They've also begun doubling speeds with bonded VDSL for Etisalat/Pakistan. Combine the two technologies and telcos can offer 100 megabits 2,500-3,000 feet. That's several hundred million homes, including easily 20M at AT&T alone.

    If regulators have smarts and courage.

 
*** ASSIA invites you to join us at the Broadband World Forum Asia, May 10-11, 2011 Kuala Lumpur http://bit.ly/fhf3We

(ad) DOn't miss CEO John Cioffi's presentation

DSL "Amplifier" Delivers 8 Meg 14,000 Feet http://bit.ly/iwLQb2

 

Your mileage will almost certainly differ, but one lucky home saw their speed go from 1 megabit downstream to 8 megabits. More typical is a doubling from perhaps 1 meg to perhaps 2 meg. The current unit is aimed ay low speeds beyond 12,000 feet. It's logical for Actelis to also offer units designed to bring 2-3 megabit lines up to the new FCC broadband definition of 4 megabits.
   Essentially, you plug in a small box around the middle of the line and let it do some magic. It's sized for 1, 2, 5, 25 or more lines and works off the phone line power. Once installed, it's designed to work indefinitely without maintenance. There's little opex after the initial installation and pole-climbing. The components are inexpensive, so the price of the unit itself can be very reasonable if purchased in large quantities.
    Actelis purchased the product IP of Phylogy’s Triplestream, line conditioner/amplifier which has been on the market since 2005. They tweaked the product to reduce interference and are re-launching it as the "Actelis Broadband Accelerator." "We've solved the spectral compatibility problem," Actelis' Eric Vallone tells me. "That's our secret sauce. Most customers getting 1 meg will see a 100% improvement."
 
*** Lantiq XWAY PROBE (LXP) provides real-time diagnostic information about subscribers’ home networks that lets service providers optimize performance even in highly complex subscriber environments. http://bit.ly/i0DRPw (ad)

Alcatel Takes Vectoring to Luxembourg http://bit.ly/iKazns

 

The green bands in the picture are the results in the first reported field trial of vectoring for noise cancellation. The results - on loops less than 1,000 meters - are excellent and as predicted by theory. Line speed as much as doubled in the instances noise was the problem. Other lines, which ran faster in the first place, saw gains as little as 20%. The first chart is from Alcatel, working with P&T Luxembourg. This is not production equipment and the chips may still be FPGA's. It's an important proof of concept, while manufacturers compete to be the first with well-tested, production ready gear (?2013.)
     Vectored noise cancellation is the grail of DSL, promising to add 50-100% to the performance on most loops under 1,000 meters. There's little doubt the results will be excellent in new builds, such as the VDSL/FTTN being installed from cabinets at British Telecom. All the lines can be connected to a single line card or otherwise organized to efficiently vector.
     The harder problem is using vectoring to increase speeds in mixed deployments, which includes most of those already in existence. Ikanos is working on "node-scale" vectoring, which works across line cards and is promising. Further Alcatel data, this time working with Swisscom, showed excellent lab results (below) even in mixed binders more typical of existing builds. Results were good, even with 5 ADSL2 lines in the same binder.

*** Interested in “End-to-End Carrier-Grade QoS over Anything” (including G.hn, Wi-Fi, Ethernet, DSL and PON)? Lantiq XWAY STREAM (LXS) (ad) http://bit.ly/dL4DTR

Virgin 1.5 Gigabit Cable is not a Typo http://bit.ly/dHGBON
John Chapman of Cisco astounded the industry in 2004 by predicting gigabit cable, bonding 25 channels. Virgin in the UK is now trialing 1.5 gig down, 150 gig up, with several commercial customers. Typical coaxial 860 megahertz coax can deliver up to 4.5 gigabits but the vast bulk of the capacity is used for TV. Often more than half the bandwidth is used for analog TV and only a few hundred megabits available for data. As switched digital and retirement of analog free up capacity, nearly all cable systems will have room for 8 channels of data downstream (320-400 megabits shared) and 4 channels upstream (80-150 megabits shared.)
     It's not clear whether Virgin has dedicated coax to the businesses or just a node with relatively little video. I've asked Cisco for a technology update. http://bit.ly/dHGBON

 

 
*** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http://www.assia-inc.com/DSL-technology/assia-blog/2010-11-29/go-green-with-ASSIA-power-management.php by Wonjong Rhee (ad)
     
5M Lines of Gigabit+ Fiber Home http://bit.ly/jnDdqp

 

Duncan Tait of Fujitsu vows to deliver 5M lines of gigabit+ fiber home to small town and rural Britain, perhaps the largest fiber build in the Western world this decade. It's about 20% of the country. Fujitsu will provide gear, build and finance the network. U.S. owned Virgin cable will be the anchor tenant, expanding beyond the urban half of the country it now serves. Super salesman Charlie Dunstone (Carphone/Talk Talk) will also sell the network, with Murdoch's Sky and Vodafone also welcome to use an “open access” network.
     Nearly all this build will be in the half of Britain where British Telecom now has a monopoly. The economics of being the second network in an area are very different from being the third, overbuilding where there already is a telco and a cableco. While fiber overbuilders coming third to market have generally struggled, Virgin/TalkTalk/Fujitsu has much better prospects.
    Fujitsu, with support from Cisco, is fine with the relatively modest $200-$300/home subsidy offered. This team is betting $billions fiber is profitable over time based on the real world costs and experience of Verizon, NTT and others. Communication Minister Ed Vaizey is so enthusiastic he joined in the press release. Vaizey, to make the deal final, needs only to require BT to share existing ducts and poles at cost + a generous profit, standard unbundling terms.
   80-85% of Britain could have a gigabit with a $3-6B subsidy - or less - if spent this wisely. The U.S., five times the population, could bring gigabit fiber to 80-85% for $15-30B. Folks with a subsidy agenda are the source of the $100B and $350B figures for fiber flashed around D.C… A tenth of that  18 months USF/ICC  could provide a worldclass upgrade for the U.S. (Yes, DOCSIS and fast DSL are part of the story.) http://bit.ly/gDKroJ

 

*** 4GWE Austin September 13-15
We will explore how best to enable and exploit the mobile Internet. 4GWE is the gathering place for Mobile Network Operators, fixed carriers, handset manufacturers, mobile internet device manufacturers, application providers, and venture capitalists. Register http://bit.ly/lUTYof (ad) Carl Ford, the best event programmer in telecom, will have a strong program.

Telefonica Losing DSL Customers, DOCSIS Gaining in Spain http://bit.ly/mdlqLV

 

Telefonica totally dominated Spanish broadband until a few years ago but actually lost 23K DSL customers in February. Since January 2010, alternative carriers have added 667K while Telefonica gained only 138K. The cause is no mystery; the CMT finally revised the unbundling rules to give the competitors a better deal.
 In the first four months after launching 30 meg and 50 meg DOCSIS 4.0, Ono Cable signed up 128K subscribers (bandaancha.eu

 

.) Some were upgrades of existing customers, but Ono has net adds of 65K since last September and Telefonica only 13K. Ono, like Numericable in France and Virgin in Britain, has severe financial constraints and is limited in how effectively it can compete.
   Spain is finally getting some fiber home. 9,000 signed up in January and February, to a total of 66K. Telefonica has made some extravagant promises to fiber the country, including all of Madrid in a few years. The actual build is much slower as Telefonica has diverted investment funds to the faster growing - and more competitive - markets in Latin America.
   Before we praise CMT, the Spanish regulator, they need to explain why they want to raise the copper access charge by 7 percent, to €8.32 a month. (NYT) If regulators want fiber, the right move is obviously to reduce the return on copper. Matthias Kurth got that one right, cutting Germany's access charges.
 Update 14 April Telefonica presented to investors a dismal prospect for its business in Spain and up to 6,000 layoffs. That's one way to make the numbers work for a few years but only a temporary solution.

*** Lantiq XWAY PATH FINDER (LXF) offers automatic path selection across the home network, using real-time link quality information to choose the optimal communication path and dynamically avoid line noise that creates network bottlenecks. http://bit.ly/i0DRPw

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Nikos on Calix: Not Really a Sell http://bit.ly/k4B1Ka

 

S___ happens. Nikos Theodosopoulos, probably the best equipment guy on Wall Street, did not issue a rare sell on Calix that morning. His email said just that, but clicking to the report itself shows his actual opinion is "Valuation: Maintain Buy Rating, Raising PT To $23 From $20." The report goes through several hands before it's sent, and somewhere along the line someone made a mistake. The stock fell over $25M by 11 in an up market. It since recovered some. That pattern is consistent with people initially misunderstanding the UBS report and then learning better. Alternatively, it may be that investors were hoping for even more favorable news and were disappointed. Or it could just be the seemingly random noise that often dominates stock prices.
   Following up later that day: Researching pointed me to a 58% increase in the Calix stock price in about four months. They've had some good news, but that's a remarkable run. I'll let Nikos tell professional investors whether to buy or sell this one; for anyone without a strong tolerance for losses, I wouldn't put money, long or short, in wireline telecom equipment. It's a tough and declining market, and there definitely will be losers as well as winners.
   Calix's greatest strength is satisfied customers. They've now bought Occam, which also has excellent customer relations. Those are strong positives, but it's a tough market for all and caution is indicated.



Editorial: Freeze FCC PR Hiring
Spending $200K/year to hire an additional FCC pr person is the wrong signal to send a budget-cutting Congress that nearly shut down the government. Since Jen Howard moved on as Julius' spokesperson, the remaining FCC pr people have demonstrated they were up to the task. The Chairman's #2 advisor, Josh Gottheimer, is a world-class communicator from Burston Marsteller and Ford Motor Company.
 Not the right message to send when the budget deal is cutting $890M from community health centers.
 Update, since someone asked. No, the salary for the job is not $200K. That's the grossed up cost of the position. Second Update: Rob Kenny, who has been filling the post on an "acting" basis, resigned to go to private shop Mercury. Living well is the best revenge. 


$2B Tax Saving at AT&T, Verizon http://bit.ly/lHQSHY

 

AT&T income tax expense went down 37% in Q1 2011 compared to the year before, from $2.863B to $1,802B. Verizon also saved $1B on a drop in income tax provision from $1,622B to $617B, 62%. At AT&T, the tax benefit was nearly a third of earnings and more than the entire growth in net. The same is true at Verizon. Neither reporters nor several wall street analysts referenced the tax savings, which were so large they change the story.
     I'm not suggesting anything improper or special favors for either company. Each took $20B in losses on their pension funds, which could shelter a heck of a lot of income. This is just one more reason to tread lightly based on quarterly and even single year results. Verizon carries $24B of deferred income taxes on their balance sheet and AT&T $22B. Those numbers dwarf their annual bills. There's also $billions in reported capital spending that doesn't fit any common sense notion of what capital investment really is. There's capitalized interest and software required for running the daily business, and many other items I haven't found. Steve Levy of Lehman Brothers used to try to calculate network investment but the companies wouldn't even release to Wall Street the needed information.
     Craig Moffett, the most visible bear, puts Verizon's stock price in an interesting perspective. "Verizon looks to us to be priced for perfection. These results are good, and Wireline offers reason for optimism, but they're not good enough to warrant Verizon's current valuation."  Other senior analysts take the opposite point of view. I don't pick stocks, but am confident enough about telco prospects to say they certainly shouldn't be priced on an assumption of rapid growth.
    Earnings off by a penny or three don't mean much when factors like this are ten times the size.


Ralph "AT&T's Network Performance is Getting Better" http://bit.ly/kh518f

 

Ralph de la Vega is a straight shooter and I have confirming data that "The network performance today is getting better. We saw an increase in national broadband speeds over the last six months. We've had solid improvement in voice metrics thus far this year, and we improved both voice retainability and voice accessibility." They still have problems with dropping voice calls, although much of that is a GSM iPhone problem, not an AT&T network problem. But overall, the AT&T network problems have been wildly exaggerated. T cut capex a whopping $3B in 2009 while selling loads of iPhones, a recipe for trouble, but they are catching up rapidly.
      On the wired side, U-Verse is rock solid at 25 meg and is perhaps the most technically advanced DSL network in the world. (AT&T has promised me the technical details I need to write that story.) The non-U-Verse DSL also has almost no congestion, except in a very, very few places where they haven't yet replaced some decade old equipment. President Stankey has said they will be upgrading 15M non-U-Verse homes to ADSL2+ and IP DSLAMs soon, a build I believe is already far along but hasn't been announced.
      There's something like 10,000 towers being upgraded to GigE backhaul and most to LTE. Ralph promises, and I expect, continuing improvement across 2011. The improving network performance is despite reducing capital investment. 2010 capex was slightly below 2008. Both Jason Armstrong of Goldman Sachs and Philip Cusick of JP Morgan are predicting reduced capital spending in 2011 and 2012.
     Ralph, Randall, and the rest of the team are proving exceptionally able managers. There's a 10-11% drop each year in local voice lines, one of the most profitable businesses in history. Keeping profits and revenue up despite that is actually a huge accomplishment. With profits flat, they've struggled to continue the expected annual dividend increase. The company will be more profitable in the long run if they cut the dividend, but they'd be crucified.” Broadband lines" in Q1 were up 175K. Since U-Verse TV was up >200K, Craig Moffett believes they are actually losing lines in the half the network without U-Verse. With the U-Verse build near its end (per Stankey), growth will be hard in 2012.
    After I wrote this, AT&T filed sworn statements from the CTO and a senior network guy that their wireless network is in near-desperate shape. http://bit.ly/fZNCe0

 

No one should be surprised that people will lie to get a $39B transaction through. It's a reporter's job to find the truth. There are plenty of datapoints that T's service is getting better, not worse.

    AT&T in the first quarter dumped another 6,000 employees. http://bit.ly/fbnM7L

 

Dave at DSLR: The Truth Could Kill the AT&T T-Mobile Deal
Wall Street sees darn good chance deal will fail.
Only one major telecom merger has been blocked in the last decade: DirecTV-Dish. AT&T could be the second failure." I begin an article at DSL Reports http://bit.ly/h5QPd4

 

.Reporters around the country have been savaging AT&T's claims the deal must go through because of spectrum issues. Wall Street sees a one-in-three chance the deal will be blocked. I'm glad to work with the DSLR people, who do good reporting. http://bit.ly/h5QPd4

 

Prices Going Up As #1 Level 3 Buys #2 Global Crossing? http://bit.ly/iRqsMc

 

(This story is yesterday's news, but I'm including it because so few reports realized this was a merger of #1 and #2. DC needs to understand the risk.) Both Roger Cheng at WSJ and Evelyn Rusli of the NY Times warn of higher backbone prices if the government allows the merger. There's no other logical reason to pay $3B for a company that has lost money for each of the last four years. Pricing dynamics on the backbone are sufficiently complicated I put the question mark in the title. It's almost definitely right to stop the deal but that's highly unlikely. One of the fortunate accidents of policy is that we've had enough players on the backbone to allow competition to do its magic. If that's no longer true, in the absence of strong regulation we'll see high prices and diminished Internet growth.
    Jim Crowe of Level 3 is one of the great salesmen of the era. He has a reality distortion field among investors although he's lost big money for a decade. One of Jim's problems is self-delusion. Long after Andrew Odlyzko had proven the Internet was not doubling every 120 days, Jim was touting that error to Wall Street. I think he believed it.

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Volume 11, #27 April 29 2011

   Spectrum won't make a difference for years. In the long run, using already available spectrum more efficiently will support many times more bandwidth than any likely increase.  Backhaul, capex cuts and bad iPhone design create network issues today, not spectrum shortages. That's why AT&T is increasing backhaul capacity 500% in 2011. LTE coverage in 2016 will be 94-98% according to a Broadband Plan report with or without any AT&T deployment. Being smart about school and library money can produce results far greater than spending more at USAC.

    Engineers are working darn hard and darn well to build great networks we can hold in our hands, as this special (mostly) U.S. wireless issue demonstrates. The issues have become explosive as AT&T bets D.C. ignorance will grease their T-Mobile merger approval. Much of what I've written below comes directly from the top people in the industry and I've spent extra time factchecking. I'm personally a strong Obama supporter and hate what I'm reporting from NTIA & FCC.

    The biggest favor you can do a reporter is find the errors. The stakes are extra high right now so please let me know if I miss something.

*** ASSIA invites you to join us at the Pennsylvania Telephone Association Spring Conference April 13-14, 2011 State College, Pennsylvania Register at http://bit.ly/hBSUvW (ad) Wallace Rowan of ASSIA will deliver a keynote.

Correction of earlier DSL Prime story 40 Gigabit WDM PON from LG-Ericsson. The original of this article was a huge error based on my misreading the press release. This is a 1.25 Gig WDM PON, with 32 wavelengths, not 40G per wavelength.

Cisco: U.S. Mobile Data Growth Falling 60-80% http://bit.ly/dHjDlG
Current 92% and 120% are wild, unsustainable growth rates for mobile data. The U.S. will soon fall to a significant but more manageable 30-40%, about what wired networks have been handling since 2002 or so. That's according to the Cisco Visual Networking Index, universally agreed as the best predictor of bandwidth. Cisco measured traffic growth of 120% in 2010 from a very low base as smartphones took over the market. In a few years, nearly everyone will carry a smartphone and growth then should fall. They predict U.S. mobile growth will fall to 46% by 2015. The growth is clearly not exponential, and a simple projection of their data takes the rate closer to 30% for 2016-2017.
     That's still pretty fast growth and will require good engineering and continuing capital investment to meet. On wireline, Moore's Law brings down equipment costs by 25-40%/year. Wireless costs include tower building and spectrum, where Moore’s Law doesn’t apply. The gear on the towers and in the network will keep up with the wireless growth rate, but how much capital the other costs will demand is a hard question.
     One of the few willing to speculate on the required capex in a few years is AT&T Wireless CFO Pete Richter. He believes the current capital spending on wireless is a "spike" and that wireless capex as a percent of revenue will come down in a few years.  More, including a dramatic chart http://bit.ly/dHjDlG

*** Lantiq XWAY HARMONY (LXH) Spectrum management technology maximizes performance of VDSL and G.hn networks operating side-by-side. http://bit.ly/i0DRPw (ad)

Germany's 100% Coverage with Telefonica O2 http://bit.ly/frhtBU
Mathias Kurth, German regulator, seems to be effectively eliminating the remaining "white spaces" on the map. Purchasers of 4G spectrum were required first to build in those areas before they could deploy in the more profitable cities. Vodafone was the first to deploy, reaching 1,000 small towns. http://bit.ly/hQmAWtTelefonica O2 is now matching that deployment, covering the rural areas as quickly as they can with help from Nokia Siemens. CEO René Schuster's statement explains why they will move fast. “Covering these ‘white spots’ is only the first step. As soon as the requirements of the Federal Network Agency are being fulfilled, we will also offer LTE800 in the cities. This could even happen in only a few months.”
   Vodafone's LTE service starts at €39.99 ($51) "Up to" 50 meg down with a 30 gig cap costs €69.99. Since the total bandwidth at the edge of many cell sites is likely to be about 30 megabits, only those close in will get the higher speeds. This is better than today's satellite offers but more expensive and limited than DSL. The caps are low if you regularly watch video, plausible if your net use is light.
   That's probably the long run expectation of LTE and LTE advanced: moderate but not terrible speeds, not enough capacity for many to watch quality video, (30 gig is less than 90 minutes a day.) This is a reasonable but not great offering for the last few percent that are expensive to reach with landlines. 
Previous $50 Minimum For German Rural LTE  http://bit.ly/hQmAWt

*** Lantiq's XWAY STREAM (LXS) delivers  “End-to-End Carrier-Grade QoS over Anything” (including G.hn, Wi-Fi, Ethernet, DSL and PON).  http://bit.ly/i0DRPw (ad)

U.S. LTE 2016: 96-98% Likely http://bit.ly/eOhlm8
18 February, 2009, CTO Dick Lynch of Verizon changed the wireless world by announcing Verizon was going to bring 5-12 megabit LTE to 92% of the U.S. in 2013 and "we expect to aggressively expand this footprint, with a goal of covering all of our 700 MHz licensed territories by 2015." (Their data footprint in 2009 was 92%.) Verizon has a nationwide 700 MHz license and has repeatedly said they will continue building past 2013. Lynch spoke of "nationwide deployment" so It's reasonable to predict they will be at 95-98% coverage by 2015-2016. They are right on schedule and have deployed over a third of the U.S. The network is working extremely well for data but they haven't launched voice over LTE. (4G phones use Verizon's 2G voice network for now.)
     The Columbia University - CITI report to the Broadband Plan confirmed Verizon's plans and estimated 94% LTE coverage for 2013-2014. Among other builds, the RUS stimulus funded 100% of the state of Vermont. AT&T was beginning its LTE build and others were announcing.
     Using those 92-94% figures as a base, I project 2016 deployment of 96-98%. This is the same assumption the FCC used when recommending that Obama set a national goal of 98% for 2016. Although the pr material spoke of it as "ambitious," FCC experts were confident 98% or something very close would be reached.
     I look for confirming datapoints to decide whether reporters are on target. There are plenty of reasons it's logical to expect nearly the entire country to be upgraded to LTE:
Economics: LTE is so much more efficient and cheaper per bit than anything else it will pay off to upgrade essentially all of the 98% covered by towers.
Company strategy:  Verizon scored a major marketing coup showing maps of wider coverage than anyone else. That's one reason they are going for the widest practical coverage. That also means AT&T has little choice but to do similar. 
Checks on the ground: Folks in places like North Dakota are telling me that anywhere there's a tower and backhaul at a plausible cost VZ is putting a radio.
Confirmed by technology cost: LTE radios, with Huawei and ZTE major players, are very competitive and coming down in price rapidly.
Commercial customers demand coverage everywhere:
 Look for mid or high 90's around mid-decade.
More at  http://bit.ly/eOhlm8

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AT&T LTE Result on U.S. Coverage: ~ 0% http://bit.ly/e9Z1Rd
AT&T says it will cover 46M more people with LTE by about 2015-2016 if allowed to swallow T-Mobile than their previous plan, which only went through 2013. That's about 95% of the U.S. population. Based on what AT&T leaders have been saying, I believe their 2015-2016 plans would have been very similar to 46M more, but I have no way of proving that. 
    The net result in improved U.S. LTE coverage: 0%-2%, probably closer to 0%. The U.S. is on track to have 94% LTE coverage in 2013-2014 per the Broadband Plan CITI Columbia University report. Verizon alone is committed to 92%. Since Verizon and other companies plan to continue deploying after that, it's almost certain the U.S. in 2016 will be at 96%-98% without any government subsidy or merger approval. About 98% of the U.S. is covered by towers.  LTE is 2x to 10x more efficient and cheaper than what is on the towers today, so it's reasonable to expect nearly all of them to be upgraded. As AT&T President Ralph de la Vega notes, LTE has "the best spectral efficiency at the lowest cost."
      When T reaches 95% in 2016, the country will likely be at 96-98%, with Verizon easily at 95% alone. Carrier coverage will likely be highly overlapped.  They all seek population density, tower availability, and road coverage. So nearly all of T's 95% coverage will already be served by others. My guess is that AT&T will provide less than an additional 1% of coverage, and probably less than 1/2 of 1%, which will round down to 0%.
      They've done a brilliant job confusing people into believing the 46M would otherwise not be served with LTE.  A little more, including Randall's comments http://bit.ly/e9Z1Rd

*** ASSIA invites you to join us at the Broadband World Forum Asia, May 10-11, 2011 Kuala Lumpur http://bit.ly/fhf3We (ad) Looks like a good show. Wish I could go.

Government Accountability Office Requests http://bit.ly/hwhHmb
An interesting email came:

Hello,

        My team at the U.S. Government Accountability Office is reviewing the FCC's management of commercial spectrum for the House of Representative's Committee on Energy and Commerce. I read with interest your story from 22 January 2011 entitled "Julius' Scandal: Manufacturing Spectrum Crisis" I would like to investigate this further.  Can you ask your two sources at the FCC whether they would mind speaking with me?

        Thanks, David Goldstein

Which I discreetly forwarded to my sources, none of whom wanted to put their career at risk by speaking publicly. I replied with plenty of reasons for the committee to doubt the policy, but nothing juicy about how the FCC came to this policy.  The article that caused the uproar, reporting that FCC employees were hushed when they disagreed with inaccurate spectrum claims, http://bit.ly/f3sNey

Previous: Absolutely No Wireless Spectrum Shortage in 2010 Feb 2010 article based on comments from AT&T President John Stankey and Merrill Lynch research http://bit.ly/dKX4Pw
John Stankey Is Not a Big Fat Liar Follow-up confirmation http://bit.ly/fIWPGU


*** Regulatory 2.0 Workshop April 12, 2011 Washington https://www.tmcnet.com/scripts/itexpo/tx11/registration.aspx?theplan=RW(ad) Carl Ford, the best event programmer in telecom, is bringing DC ideas they need to hear.

Lindner: AT&T's Backhaul +500% in 2011 http://bit.ly/hqaDLZ
"We expect 65%, 70% of our traffic to be covered under fiber backhaul as we get towards the end of '11. We're in the low to mid-20s in terms of deployment currently." CFO Rick Lindner was answering Tim Horan's question on the quarterly investor call. That's huge, enough by itself to eliminate for a couple of years most, if not all, of the problems with AT&T network capacity. (Most of the iPhone problems appear to be the phone, not AT&T data capacity.)
     The typical 3G cell site is today served with T-1's, often 4-5 T-1's with 6-8 megabit capacity. AT&T's fiber is based on Gig-E's, with 100 meg a typical provision. That's about a 13x increase for almost half the network, which represents about a 500% increase in total network capacity. That's on top of a 2-4x increase in the last two years, yielding a 2009-2012 increase in tower backhaul of probably 2,000%.  The Gig-E's can be upped to 200 and 300 meg without any construction, i.e. very cheaply and quickly.

         Darn impressive in any case.

*** Lantiq XWAY PROBE (LXP) provides real-time diagnostic information about subscribers’ home networks that lets service providers optimize performance even in highly complex subscriber environments. http://bit.ly/i0DRPw (ad)

Calabrese: Spectrum is Sexy http://bit.ly/gWQNPz
"In Washington, spectrum is sexy" comments Mike Calabrese of the New America Foundation. "It got the centerfold of the National Broadband Plan. Spectrum has the money, thanks to proposed auctions, and every budget hawk is swooping down." Calabrese is one of the most influential analysts in D.C. At 4GWE, he spoke about the necessary next steps: using spectrum more efficiently. More spectrum is good but more efficiency is even better. My guess is that likely gains from efficiency are four or five times as large as what will be gained from more available spectrum.
    Freeing more spectrum, from broadcasters, government, and others is a good move but not sufficient for the wireless broadband future we hope for. "Exclusive licensing falls short over time. There is simply not enough new spectrum that can be cleared of current uses. Yet most frequency bands are grossly underutilized. We need to open bands for more shared access using dynamic spectrum techniques such as cognitive radio. We need certainty that there will be continued unlicensed access to some of the TV White Spaces spectrum after any auction and repacking. ...
   With the single-minded focus on auctions, we're not laying the foundation for band sharing. When you go out and measure the use of the spectrum, even in urban areas, 90% of the good spectrum is not being used in most places and most times.  We have tremendous unutilized capacity.  We have to build on the broadcast white spaces database by adding many other frequencies, Intensive spectrum reuse, low power locally, is the way we are going to meet the problem of broadband capacity. We need more efficient use."

     Michael's whole presentation is on video at http://bit.ly/fK6eb7

*** Lantiq XWAY PATH FINDER (LXF) offers automatic path selection across the home network, using real-time link quality information to choose the optimal communication path and dynamically avoid line noise that creates network bottlenecks. http://bit.ly/i0DRPw (ad)

Connecting Schools at Hundreds of Megabits Dramatically Cheaper With Microwave http://bit.ly/hHR5oj
The U.S, government believes "most schools need a connection of 50 to 100 Mbps per 1,000 students." But "two-thirds of surveyed schools subscribe to speeds lower than 25 Mbps." Amir Makleff of Bridgewave makes gear designed for hundred meg+ connections for hundreds rather than thousands of dollars per month. Fiber today can do gigabits so is ideal when readily available but is prohibitively expensive in many locations. Where running fiber is expensive, microwave now is a proven technology for hundreds of megabits. With proper design, microwave downtime can be less than a few hours per year.  
   I believe something is profoundly wrong with the Schools and Libraries program of USAC if they aren't actively making sure schools choose the least expensive reliable technology. Far too often, school districts just buy what the local telco recommends without investigating less expensive choices.
   The right choice will vary based on facilities available. It will sometimes be fiber, sometimes microwave, and sometimes bonded DSL or cable. Anytime a school proposes spending more than $20K/year on connectivity, it's right to ask if they are spending public money efficiently.
     Jennie Bourne's short interview with Makleff has more specifics. http://bit.ly/fK6eb7

70-90% of AT&T Spectrum Capacity Unused http://bit.ly/gVMiwo
AT&T has enough spectrum today to deliver 150-200 megabits from most towers. Comparing that to the 10-12 because of backhaul. Some of the spectrum is also used for 2G voice, and can easy carry twice as much voice or loads of data when AT&T switches to voice over LTE/IP. Other spectrum is used 2G/3G data carrying a fraction of what the same spectrum carries with LTE.
     Across the vast bulk of the country, T has plenty of spectrum not used at all right now. Across the country, the figure is probably 20-60%, but that's a wild guess. Upgrade inefficient uses and put the fallow spectrum to use, and T can easily handle five times the current demand and probably ten to twenty times without adding spectrum. More spectrum is a good thing, but engineers at AT&T, Verizon, and almost all the other big carriers are confident they can handle anything likely for years without breaking the budget.
    FCC sources tell me there's a massive efficiency improvement possible if more carriers shared spectrum but none were willing. AT&T Wireless & Cingular did a joint build in New York City that saved $100's of millions according to CFO Ron Dykes. AT&T and T-Mobile could do the same and get most of the spectrum advantage of the merger while staying independent.

Understanding how I calculated used and unused capacity
I'm reporting 70-90% of the capacity is unused, not 70-90% of the spectrum. Reflecting on the comments this article provoked, I suspect the act ratio of available bandwidth to potential capacity may be as low as 5%. Much of that spectrum is in use for 2G-3G voice and some for data, at a fraction of what the spectrum will handle when upgraded to LTE. I'm working from a comparison of what the spectrum could carry with current technology (LTE, HSPA+) compared with the capacity in use.
    AT&T has 80-110 MHz of spectrum, depending on whose figures you choose. You get 1.5-2.5 megabits/megahertz, depending on whether you're measuring average versus edge of cellsite, fixed antennae, etc. That's 120-260 megabits in most markets. Let's call it 200 megabits average.
   Currently, the heavy majority of AT&T cellsites are still served by T-1's carrying a total of less than 12 megabits, often far less. It's typically used for "up to 7.2 megabit" data and lots of voice. Some percentage is completely unused - surprising high, but not 70-90% - is currently unused. (?20-60% on average as a wild guess, but that's unprovable without internal AT&T data.)
   Much of the spectrum is currently used for voice, using older technologies that are far less efficient than today's. Glen Campbell of Merrill Lynch estimates that by refarming that spectrum and using it efficiently (if only for voice) you double the carrying capacity. Similar is true for the entire spectrum being used for 2G and even 3G data. They only use 10-?50% of the capacity of the spectrum using today's technologies.
     Carriers around the world have begun this "re-farming" for more efficiency, including UK and Canada. Everyone has it in their plans because it's more efficient and hence cheaper. Sprint intends to do that with the Nextel spectrum and AT&T has discussed similar. It takes several years, because you have to change out all the handsets, but using existing spectrum more efficiently saves so much money the carriers are doing it almost universally.
     Across the carriers, much spectrum lies purely fallow, about enough to carry us without upping capex about 5 years (FCC figure, badly calculated) or 10+ years (Ivan Seidenberg of Verizon and most technical people as opposed to lobbyists.) Most of the rest is used by older 2G and 3G tech (both voice and data) and has 2-10x the capacity with today's technology.
     Hence, T (and almost every one else) is using only 10-30% of the capacity of their spectrum. They know this and are rapidly upgrading backhaul (2010-2011's primary problem) and radios. They are discussing plans to switch users from 2G voice - still what's in 3G and 4G handsets - to 4G voice over IP/LTE over the next few years.
     AT&T's announced 2011 backhaul upgrades - from 20% GigE fiber or 100 meg microwave to 70% - that will yield 500% more capacity for data this year alone. http://fastnetnews.com/a-wireless-cloud/61-w/4073-lindner-atats-backhaul-500-in-2011 They are using it to go from 7.2 meg to 20 and 40 meg HSPA+ and LTE.
 
    A 300% improvement in bandwidth implies 75% of capacity was unused.

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Volume 11, #26 March 31 2011

March 22

• Germany's #1 Provider: Government-Owned NetCologne http://bit.ly/gl72Qp
   
• Ikanos Cuts Modem Power, Promises Vectoring http://bit.ly/gr8O0r
   
• TI VDSL Class H Line Driver Claims 47% Power Savings http://bit.ly/efoocV
   
• iSuppli: VDSL Taking Share At Last http://bit.ly/gDrCbI
   
• AT&T Doesn't Suck:
• Lindner: AT&T's Backhaul +500% in 2011 http://bit.ly/fSre7E
   
• Bellheads 22-23 March Best US Telco Event of the Year
• 70-90% of AT&T Spectrum Capacity Unused http://bit.ly/fFGgFC
   
• AT&T LTE Result on U.S. Coverage: ~ 0% http://bit.ly/fyqWWX
   
• Julius's Take on Spectrum
• Briefs: Sprint-Clearwire spectrum, Ray Le Maistre, Rich Tehrani, Pete Svensson, Amy Schatz, Joe Mullin, Wall Street over-optimism on cable

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“Blowups happen” Robert Heinlein

The Fukushima Fifty are hard at work knowing some or all may lose die. We all hope never to have to make that decision and that we would have courage if faced with such a choice. My reporting on lobbyists' distortions, official negligence and bureaucratic ineptitude costing taxpayers hundreds of $millions seem minor compared to issue of war, peace, and lives directly at stake. 

Randall Stephenson is gambling a $3B breakup fee that the FCC will roll over and play dead on the T-Mobile merger. The unconfirmed rumor in D.C. is that Julius has already given Randall a wink and a nod the deal will go through but antitrust still may raise issues. Ironically, that means the company hates me this week for writing about how well their network is doing.

     CFO Ron Lindner inspired the article AT&T's Backhaul +500% in 2011, http://bit.ly/fSre7E which concludes backhaul and other upgrades should solve most of the network problems for several years. Very positive, but now AT&T is spending $millions claiming their network sucks unless they swallow T-Mobile. 70-90% of AT&T Spectrum Capacity Unused http://bit.ly/fFGgFC supports AT&T's frequent claim spectrum is not a problem for years.

    AT&T LTE Result on U.S. Coverage: ~ 0% is obvious to anyone who knows that Verizon is on track for 92% in 2013. The broadband planners worked with a 94% number for 2013-2014. The U.S. should be at 96-98% by 2015-2016, when Randall projects getting to 95%. AT&T matching VZ is great even if nearly all of that 95% will already have LTE available.

     Some companies can't take a compliment.

     Coming next issue: D.C. on the OK Corral: Noam vs Levin come out shooting on the Broadband Plan

*** 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)

Germany's #1 Provider: Government-Owned NetCologne http://bit.ly/gl72Qp

 

5,300 readers of Computer Bild voted NetCologne the best ISP in Germany, outpolling DT, several large competitors, and the many emerging cablecos. Across Germany, Bild reports, "DSL customers are still angry about lousy service. Not even one in two customers would recommend their provider." (Google translation) NetCologne, with 500,000 customers, was an exception, leading in both speed and service.

     NetCologne is rapidly transitioning customers to their own fiber network. Their current lead offer is 35 euro - about $50 - for 50 megabit down and voice calls. That includes the much-liked Fritzbox from AVM for the home network. They are offering service to other carriers and recently struck a deal with Vodafone.

     Other cities on the Cologne Bonn region are clamoring to join because they want a great Internet. There's a myth in some circles, especially in the U.S., that government broadband is inevitably a failure.

*** ASSIA introduces Software-as-a-Service option for high-Speed, dynamic DSL management. Visit ASSIA at the Pennsylvania Telephone Association Spring Conference April 13-14, 2011 State College, Pennsylvania (ad) A Assia customer told me last week how effectively ASSIA reduced trouble tickets. It works.

Ikanos Cuts Modem Power, Promises Vectoring http://bit.ly/gr8O0r

 

By going to 65 nanometer chips and improving algorithms, Ikanos' new chips for home gateways reduce power required significantly compared to their previous generation. European carriers are required to adhere to a "Code of Conduct" that reduces power usage. Ikanos' new generation also minimizes power when particular functions on the chip are not being called.  Samples are in customer hands today and volume available very soon.

    Vectoring, which in certain circumstances can double effective speed on shorter loops, is the hottest topic in DSL.  The new Ikanos chips were designed to be fully G.Vector compliant, but I am limiting my reporting anyone's claims of vectoring performance until independently confirmed in the field.  One of Ikanos' competitors made claims that did not prove out in field testing by one of their customers, so I'm being particularly cautious.

     Except in certain new builds - think Deutsche Telekom, Bell Canada and British Telecom - vectoring will take years to reach large volumes. However, I've been recommending anyone buying equipment from around now make sure the hardware will support vectoring when the time comes. It will be surprisingly cheap and already is in carriers' long range contingency plans. In particular, AT&T knows they will be facing 50 and 100 megabit DOCSIS with a system designed for 16 megabits and less. So far, U-Verse is holding its own surprisingly well. If cable starts pulling away, T's plan is DSL bonding + vectoring, bringing many lines to 50 meg and better.

     What Ikanos brings to the table is software and processing designed to work with existing DSLAMs and larger deployments. John Quigley of Ikanos believes this "node-scale" vectoring will be the right choice for telcos. "If you need more than the 24 or 48 ports of a linecard, only full node-scale will give you the performance you need."  They discuss the advantages of their approach in an extensive, free presentation http://bit.ly/gzYpm3

 

.

     It's been a tough restructuring year for Ikanos, but Quigley is confident things are looking strong going forward. The cash position is good and new products on the way. Their announcement and more http://bit.ly/gr8O0r

 

*** Regulatory 2.0 Workshop April 12, 2011 Washington https://www.tmcnet.com/scripts/itexpo/tx11/registration.aspx?theplan=RW(ad

 

) Carl Ford, the best event programmer in telecom, is bringing DC ideas they need to hear. See you there, I hope.

TI VDSL Class H Line Driver Claims 47% Power Savings http://bit.ly/efoocV

 

I've been hearing for a long time about the potential of Class H amplifiers to reduce power. I have not researched this. However, since the product is already shipping and potentially important, I wanted to report it. In remote terminals such as AT&T U-Verse, power is a serious system limit. If this works as TI claims, it's an important advance. Readers - help me here with perspective, presumably off the record. A great deal more from TI's announcement and data sheet http://bit.ly/efoocV

 

*** Annual Broadband Properties Summit: April 26-28, Dallas. With the mission of Building the Fiber-Connected Community, the Summit attracts network builders with a program of 45 sessions and 150 speakers. Includes one-day program on Broadband and Economic Development. Use VIP Code DSLPRIMEVIP to register for $450 at http://bit.ly/fY37lr

 

(ad) A friend made a contact at this show that resulted in an eight figure contract. Really. Strong program and definitely worthwhile.

iSuppli: VDSL Taking Share At Last http://bit.ly/gDrCbI

 

Lee Ratliff of iSuppli/IHS estimates new VDSL subscriptions were up 7.9M in 2010 to 23.3M. That figure strikes me as high but not impossible. The total net DSL subscriptions were only about 30M, but a reasonable number of current subscribers at AT&T, DT, and BT were upgraded from ADSL to VDSL. In addition, as many as half the "fiber" subscribers in Japan are fiber to the basement and VDSL to the apartment.

   The trend is clear, as nearly all new builds today are "VDSL." Ikanos is the lead vendor, with Lantiq and Broadcom finding market. Now, the remarkable RALINK/Trendchip has announced a VDSL chip. They've been the price leaders in the huge Chinese market, building what they estimate is a 23% share of the worldwide market. Ratliff expects "a new level of cost competitiveness to the VDSL market," removing one of the obstacles to using VDSL.

   Builds such as the 25M ports of AT&T U-Verse were VDSL from the start. Qwest, Century, Bell Canada, BT and others now are moving to VDSL from field cabinets at 25-50 megabits down. They need the speed for IPTV. AT&T has startled everyone by proving that Microsoft IPTV + 6-10 meg data is competing well against the overpriced U.S. cablecos. The other carriers are hoping that works for them as well.

    VDSL2 by design falls back to ADSL over longer distances or when connected to an ADSL modem. That now works with only a minor performance penalty. Back around 2005, industry leaders like Behrooz Rezvani believed the industry would rapidly shift from ADSL to VDSL. It would work fine with existing ADSL modems and offer improved performance with VDSL modems at short reaches. I had that wrong as well. All the early VDSL2 modems had serious performance shortfalls at the longer ADSL distances. When Deutsche Telecom tried VDSL2 DSLAMs, the homes with ADSL modem saw an unacceptable drop in performance. Since VDSL2 DSLAMs ran hot and had fewer ports per rack, few converted, especially with a large price gap. Since I had an error five years ago on this, I don't want to endorse any forecast. But VDSL is certainly looking up.

Possibly interesting articles held over
For a special wireless issue
Connecting Schools at Hundreds of Megabits Dramatically Cheaper With Microwave http://bit.ly/dLpsxZ

 

Proven: Cellphones Affect Human Brains. Harm, If Any, Unproven. http://bit.ly/g6FI7K

 

Significant Wireless Telemedicine Success in Heart Failure http://bit.ly/hu0NMk

 

The Economist's Take: U.S. Wireless "Highly Concentrated" http://bit.ly/gUMVSb

 

and an article on Cisco's projection for wireless growth going down dramatically.
-----------
How NTIA's Map is off by 50% in crucial data http://bit.ly/fMUU13 , http://bit.ly/hfawTd , http://bit.ly/hLYFvt

 

Refuting AT&T's claim that there DSL network can't handle the traffic (Note: rude) http://bit.ly/dX8nCi

 

Wireline Costs and Caps: A Few Facts http://bit.ly/hq0RTL

 

Four Years of Cable/Telco Battle: No Change http://bit.ly/fMUU13

 

Czech Fiber @ $840/home http://bit.ly/fu6626

 

Briefs:

• Sprint-Clearwire have so much spectrum they are trying to sell some and receiving few offers. Yet one more reason to doubt an “imminent spectrum crisis.”

Press:

• Ray Le Maistre reports Infonetics data that showed Alcatel passing Juniper in large routers with sales of $1.5 billion.

Rich Tehrani, CEO at telecom media conglomerate TMC, is personally doing a free webinar on Building Communities Online: Reduce Marketing Spend While Boosting Sales, Search and Social Initiatives Wednesday, 30 March http://bit.ly/eeT4CK Rich is in the middle of this and has plenty of experience to share. Of course he hopes you'll become his customer, but I'm sure he'll have plenty of solid information.

• Pete Svensson of AP points out that $200M spent on the broadband map is $20 per “unserved” home by NTIA's press release. It's more extreme than that if, as I believe, NTIA's press release tripled the number of “unserved” in the actual data. Karl Bode adds “Our user consensus as to the accuracy of the new broadband map: LOL.” (LOL = Laugh out loud.)
• Amy Schatz of the Wall Street Journal reminds us “Speaking truth to power, no matter how awkward or painful it can be, is why journalism matters.”
• Joe Mullin of Paid Content doesn't like Judge Buchwald's decision to shut down IVI, an attempt to create a cable-like TV experience over the Internet. He writes the story Ivi TV Loses Major Court Decision­But Shouldn’t Have. I think he's right. A plain reading of the law suggests that IVI was entitled to carry programs under the laws protecting cablecos.

People:

• Jim Cicconi is already going down in history as one of the greatest lobbyists of this era. But if he pulls off AT&T/T-Mobile, he belongs alongside legends like Tommy the Cork. http://amzn.to/hbWuAx
   

Wall Street:

• Something is wrong in most sellside cable analysis. Broadband is nearly saturated, voice is going to turn negative because of wireless substitution, and we all know the video issues. But most are projecting continued increases in sales/net. Hard to see.

AT&T Doesn't Suck
Held over from a month ago, Lindner: AT&T's Backhaul +500% in 2011 says AT&T's network is doing much better than most people believe. With supply shortages over, dramatic improvements are going on.

    Almost every major network has a lot of spare spectrum capacity right now as technology advances. The limit (today) is very rarely spectrum. It's backhaul and capex. So an article that AT&T has four to ten times more wireless capacity than in use would normally pass unnoticed. Much of it comes from a seminal Merrill Lynch report of more than a year ago. Of course more spectrum helps, although in the U.S. more spectrum will have almost no effect for five years and possibly little for a decade. Reporting that AT&T will do LTE to 95% by 2016 would also normally be ho-hum. Everyone in the business knows Verizon CTO Dick Lynch in 2009 promised 92% LTE by 2013 and something like 95% by 2015-2016. The Verizon build is right on schedule and LTE working great. Most of Wall Street hears that AT&T will do about the same, about a year behind but trying to catch up.

   Suddenly, AT&T wants everyone to believe their network sucks and no one else is likely to offer LTE to 46M Americans. The misdirection is almost working, evidence of the extraordinary competence of Cicconi, the Brunswick Group, and the rest of the AT&T influence team. I'm confident in the facts I present below, but if I have anything wrong please let me know.

Lindner: AT&T's Backhaul +500% in 2011 http://bit.ly/fSre7E

 

"We expect 65%, 70% of our traffic to be covered under fiber backhaul as we get towards the end of '11. We're in the low to mid-20s in terms of deployment currently." That's huge, enough by itself to eliminate for a couple of years most, if not all, of the problems with AT&T network capacity.

   The typical 3G cell site is today served with T-1's, often 4-5 T-1's with 6-8 megabit capacity. AT&T's fiber is based on Gig-E's, with 100 meg a typical provision. That's about a 13x increase for almost half the network, which represents about a 500% increase in total network capacity. That's on top of a 2-4x increase in the last two years, yielding a 2009-2012 increase in tower backhaul of probably 2,000%. The Gig-E's can be upped to 200 and 300 meg without any construction, i.e. very cheaply and quickly.

   The radio capacity on the typical tower is also growing nicely. That was typically 1.5-3 megabits in 2008-2009 plus voice circuits. The current 3G is 7.2 megabits going to 20 megabits this year. T has sped up their LTE deployment and will be able to put 60-100 megabits on a typical tower between now and 2014, using less than half the spectrum they have in most places. That's a 20-65x potential increase in capacity but there's a huge leap between potential and actual field deployments.

   Darn impressive in any case. http://bit.ly/fSre7E

 

Bellheads 22-23 March Best US Telco Event of the Year
Some people thought Matt Bross of British Telecom was a madman for wanting to "turn off the phone network" and convert everything to IP as quickly as possible for huge savings. I became a believer at SUPERCOMM years back when Bill Smith of BellSouth led a discussion of four Bell CTOs that concluded Bross' 21st Century Network was the way to go. Ross Ireland of AT&T agreed and was plainly unhappy that his CFO Randall was holding back the funding that would need.

    All this was at the special once a year event where the top engineers of the Bells would come together for a public discussion. The official speeches came from the pr department, covered policy and were predictably boring. But when the engineers started answering questions and exchanging ideas sparks would fly, especially in the informal press conference that traditionally followed.

   ATIS at CTIA Orlando is reviving the tradition. John Donovan, AT&T CTO, is joined by his peers from Qwest, Verizon, Clearwire, Sprint, T-Mobile, Metro PCS, Telus, and more. Matt Bross is back, now CTO of Huawei. Key suppliers like Bob McIntyre of Cisco join in. I learn from people like this who solve problems every day.

   Where do correct ideas come from? Social practice.

70-90% of AT&T Spectrum Capacity Unused http://bit.ly/fFGgFC
AT&T has enough spectrum today to deliver about 150 megabits from most towers, most of which deliver less than 10-12 because of backhaul. Some of the spectrum is also used for 2G voice, and can easy carry twice as much voice when AT&T switches to voice over LTE/IP. Some goes for 2G/3G data carrying a fraction of what the same spectrum carries with LTE.

     Across the vast bulk of the country, T has plenty of spectrum not used at all right now. In a very limited number of places, there's little. Across the country, the figure is probably 20-60%, but that's a wild guess. Upgrade inefficient uses and put the fallow spectrum to use, and T can easily handle four times the current demand and probably ten times.

    FCC sources tell me there's a massive efficiency improvement possible if more carriers shared spectrum but none were willing. AT&T Wireless & Cingular did a joint build in New York City that saved $100's of millions according to CFO Ron Dykes. AT&T and T-Mobile could do the same and get most of the spectrum advantage of the merger while staying independent.

    I'm reporting 70-90% of the capacity is unused, not 70-90% of the spectrum. Much of that spectrum is in use for 2G-3G voice and some for data, at a fraction of what the spectrum will handle when upgraded to LTE. I'm working from a comparison of what the spectrum could carry with current technology (LTE, HSUPA+) compared with the capacity in use. Hence, T (and almost every one else) is using only 10-30% of the capacity of their spectrum.

   A 300% improvement in bandwidth implies 75% of capacity was unused previously.

AT&T LTE Result on U.S. Coverage: ~ 0% http://bit.ly/fyqWWX

 

AT&T says it will cover 46M more people with LTE by about 2015-2016 if allowed to swallow T-Mobile. That's about 95% of the U.S. population. (They probably would do about 95% anyway to keep up with Verizon, but that's a different story.) The net result in improved U.S. LTE coverage: 0%-2%, probably closer to 0%. The U.S. is on track to have 94% LTE coverage in 2013-2014 per the Broadband Plan CITI Columbia U. report. Verizon alone is committed to 92%. Since Verizon and other companies plan to continue deploying after that, it's almost certain the U.S. in 2016 will be at 96%-98% without any government subsidy or merger approval. About 98% of the U.S. is covered by towers, nearly all of which will be upgraded because LTE is 2x to 4x more efficient and cheaper than what's on the towers today. AT&T President Ralph de la Vega notes LTE has "the best spectral efficiency at the lowest cost."

    CEO Stephenson says the schedule will be to cover about 80% by the end of 2013, which he believes is about as fast as practical. That's on track, with thousands of towers upgraded already and service beginning this year. That leaves T about a year behind Verizon, scheduled for 92% in 2013.  Randall says they will then work on the next 15% and apparently will reach 95% in 2015-2016.

      When T reaches 95% in 2016, the country will likely be at 96-98%, with Verizon easily at 95% alone. They all seek population density, tower availability, and road coverage. So nearly all of T's 95% coverage will already be served by others. My guess is that AT&T will provide less than an additional 1% of coverage, and probably less than 1/2 of 1%, which will round down to 0%.

Julius's Take on Spectrum
A pr guy asked me a fair question. “Why should I believe you on spectrum. Didn't the Chairman of the FCC say the opposite today at CTIA.” Julius said “This explosion in demand for mobile services places unsustainable demands on our invisible infrastructure – spectrum.  Spectrum is the oxygen that allows all of these mobile innovations to breathe. … But while American ingenuity and our appetite for wireless technology is limitless, spectrum is not.  And the coming spectrum crunch threatens American leadership in mobile and the benefits it can deliver to our country. … This explosion in demand for spectrum is putting strain on the limited supply available for mobile broadband, leading to a spectrum crunch.”

    The Chairman of the FCC is a great guy who should be far more credible than I am. Unfortunately, none of the several dozen engineers I've discussed this with agree with Julius that we have a “looming spectrum crisis.” Ivan Seidenberg, with forty years experience, thinks we'll do just fine for a decade. More spectrum is a good thing, but even folks at the FCC think Julius is being “silly” as ace reporter Stacey Higginbotham reports. http://bit.ly/e6d6mj

 

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Volume 11, #25 March 23 2011

Since 1999
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Jennie could connect at 2 gigabits from her ninth floor apartment under the new Triple-V DSL design. My mother's old attached home and 25 of her neighbors would be able to each get well over a gig. France Telecom inspired the work, looking for an alternative to running fiber in some buildings. 2 Gig DSL is years away from lab tests, requires 4 copper pairs and falls off rapidly after 150 meters, but it's exciting to consider. I also report below that fiber home is getting to 10 gigabits and higher. 

    The U.S. Broadband Map is extraordinary. It lets anyone enter their address, city, county or state and generally get useful information. The 25M record database is accessible through an easy report tool, can be supplemented with demographic data and offers 36 APIs for the geeks among us. Fabulous, but the data on who can't get service contains very serious anomalies. More reporting after I factcheck the details. The Republican Congressmen were right: we shouldn't be spending any more money on broadband except where we're darn sure there is no service otherwise. If the data are close to accurate, the U.S. has 20-60% fewer “unserved” than the broadband plan and all previous work assumed. They report only 2% of U.S. homes can't get 1.5 advertised meg service and 4-5% can't get 3 meg. The FCC’s latest figure is 8% and the plan about 5%.

   Lots of wireless news in a coming special issue. The Bells will love me for reporting Verizon HD Voice (yes!) and AT&T's 500% increase in backhaul capacity http://bit.ly/hqaDLZ . T & VZ will hate me for pointing out the government might collect more by excluding them from most wireless auctions and related reasons why spectrum should not go to the dominant carriers. Germany's Kurth is getting ~100% LTE coverage without paying a subsidy, http://bit.ly/frhtBU . Cisco is predicting a dramatic decline in wireless data growth rates and Michael Calabrese on why spectrum is suddenly sexy. http://bit.ly/hi240j .

    Keep the news tips coming to daveb@dslprime.com

Theory of 2 Gigabit Triple-V DSL http://bit.ly/hRsyhD

 

They doubted when John Cioffi outlined in 2004 how four wires could deliver a gigabit one day. In 2010, Alcatel and others demonstrated 700+ megabits. Now, his ASSIA colleague Ken Kerpez shows a path to two gigabits. It requires 300 MHz, four wires and goes only a short distance. Presumably it's many years away. But Triple-V could deliver 2 gig to Jennie's 9th apartment from the basement. France Telecom is looking for an alternative for buildings they hope not to run fiber to each apartment. My mother in her old neighborhood and 20 attached homes could receive a gig and a half.  ADSL originally used only the first megahertz of spectrum and was limited to 6 megabit service. In VDSL2, as much as 30 megahertz is used and 100 megabits practical. Full DSM including vectoring doubles that speed to 200 megabits/copper pair, close to the 250 megabits John envisioned.

    Ken's "Triple-V" proposes extending signal to 300 megahertz. He introduces it with a paper "Initial simulations of Very Short, Very Simple, Very Fast metallic access, 'Triple-V.'" It will take first-rate engineering and several iterations of Moore's Law before it will be practical to vector that signal. The power levels need careful shaping to meet interference requirements, limiting the throughput. The full 300 megahertz travels less than 500 feet at -80 dBm/Hz. I haven't heard of anyone even close to a lab test, much less deployable systems. A little more http://bit.ly/hRsyhD

 

*** Annual Broadband Properties Summit: April 26-28, Dallas. With the mission of Building the Fiber-Connected Community, the Summit attracts network builders with a program of 45 sessions and 150 speakers. Includes one-day program on Broadband and Economic Development. Program http://www.bbpmag.com/

 

Use VIP Code DSLPRIMEVIP to register for $450 at http://bit.ly/fY37lr

 

Alcatel 10G GPON: Now on Sale http://bit.ly/i8ctaF

 

Very few of the million or so installed GPON hubs have congestion problems so it's early to see much demand for 10 gig GPON. But when Huawei did a demonstration with Verizon of 10G, I believe Alcatel needed an answer. They now are the first to announce commercial availability of 10G GPON on their ETSI model.

  GPON architecture has proven cheap and reliable, so carriers with GPON experience are using it for jobs like backhaul from remote DSL terminals and mobile cell sites. That's a niche market but an expanding one. For example, AT&T this year intends to run fiber to 15,000 cell sites and GPON is one of the architectures they've looked at. Extra capacity from 10G may be valuable there.

  Alcatel and Huawei are generally the first two in most broadband markets, including GPON and DSL. They struggle for mindshare as well as customers. In bonded DSL, the dueling press releases almost became a joke. More, including the Alcatel details http://bit.ly/i8ctaF

 

*** ASSIA's Power Management module can save up to $500,000 per year in energy costs in a 1 million line network without compromising speed and reliability. Read http://www.assia-inc.com/DSL-technology/assia-blog/2010-11-29/go-green-with-ASSIA-power-management.php by Wonjong Rhee (ad)

xxx40 Gigabit WDM PON from LG-Ericsson http://bit.ly/eU5TIh

 

The original of this article probably was a huge error based on my misreading the press release. This probably is a 1.25 Gig WDM PON, with 32 wavelengths, not  40G per wavelength.   10 GPON is nothing compared to the 320 gigabits (8 colors) or 640 gigabits (16 colors) promised by LG-Ericsson's 40 Gigabit "wave division multiplexed" PON. That's literally enough to serve a medium-sized country today.  Phil Winterbottom of Ericsson contends that kind of capacity "will become essential in applications like mobile backhaul for LTE," but each individual 40G wavelength is enough to support 200 cell sites at double the 100 megabits today provisioned.  Especially because 40 gig wavelengths typically require expensive "coherent detection" gear, the cost will be high enough this seems to me a narrow niche product.  I think this product is being announced "because they can" rather than because they expect to find a market. Sure is impressive, however.

     WDM PON has been next year's technology for almost a decade, with the Korean government a long time supporter.  The technology is proven but they haven't been able to beat the remarkable drop in GPON costs. Outside of a government promoted 150K users at Korea Telecom, few systems have been sold.  More, including Ericsson's details http://bit.ly/eU5TIh

 

*** New Digital Economics Executive Brainstorm & Developer Forum, 6-7 April, Palo Alto
New Growth Opportunities at the intersection of Communications, Media & Entertainment
250 senior execs gather to debate: Telco 2.0, Mobile Apps 2.0, Digital Entertainment 2.0, Personal Data 2.0: http://www.newdigitaleconomics.com/Americas_April2011/index.php (ad) The Telco 2.0 group has some of the most interesting ideas in world telecom. They run great shows.
 
British Telecom Ordered to Cut Rural Prices 10%-14% http://bit.ly/fDyjHy
Ed Richards of OFCOM required BT to lower wholesale prices an average of 12% in the areas of Britain that have no competition. Across most of the UK, three providers offer DSL from the exchange. TalkTalk is on the way to 93% unbundled and Sky not far behind.  The result is broadband prices 20-50% lower than the U.S. duopoly. But prices are higher in rural areas not yet unbundled. Retail competition is strong enough most of the savings are likely to be passed on to consumers.

    Richards has allowed BT to raise the line rental to about $19, more than a complete voice service in much of the U.S. Virgin Cable only covers about half the country, leaving the other half no choice but to pay the line rental. The result is that British prices are typically about $10 more than France. The 12% cut is after an "inflation adjustment." That's a naive mistake, because telecom inflation is usually much less.

    Richards, perhaps the best paid regulator in Europe, runs OFCOM as a "quasi-nongovernmental organization" or quango. David Cameron campaigned on a platform to cut back on quangos and singled out Richards’ $500K salary as an obvious abuse. A little more http://bit.ly/fDyjHy

*** Interested in “End-to-End Carrier-Grade QoS over Anything” (including G.hn, Wi-Fi, Ethernet, DSL and PON)? Lantiq XWAY STREAM (LXS) http://www.lantiq.com/products/home-networking/ghn/xwaytm-hnx100/ (ad)

Surewest Looking to Life After Home Phone Business http://bit.ly/f1jA1U

 

Roseville Telephone Company was a sleepy local phone company outside Sacramento, California that decided a decade ago to lead the way to fiber and triple play. They changed their name to SureWest, overbuilt nearby SBC/AT&T territory and were a high-flier during the boom. They now have 50,000 homes passed. In early days, they were the third largest fiber network in the U.S. Now, only 15% of their revenue comes from residential voice. 51% comes from residential broadband and the rest from business and wholesale. The transition has been tough - they lost money in a few quarters - but Chris King of Stifel believes they now will remain cash flow positive and may be undervalued.

    Cincinnati Bell thinks Surewest has the right idea. They've passed 79K homes with fiber, about 10% of their territory in two years. 27K have already signed on despite the short time and ARPU is $115. The results are strong enough they are speeding up the deployment to 70K more homes passed in 2011.

*** Spectrum management technology that maximizes performance of VDSL and G.hn networks operating side-by-side? Lantiq XWAY HARMONY (LXH) http://www.lantiq.com/news/press/161-ghn-standard-for-home-networking-applications/ (ad)

Progress on Sony Linux Bugfix
The Sony Playstation 3 was ahead of its time with a remarkable 8 core CPU so it was welcome news when a way was found to run Linux. Sony's automatic update procedure is badly broken, regularly interfering with improvements people make to the machines they own. "Kevin Butler" of Sony tweeted the USB dongle ID generator key 46 DC EA D3 17 FE 45 D8 09 23 EB 97 E4 95 64 10 D4 CD B2 C2. That makes it difficult for Sony to sue those who reproduce the code, as I just did.

  Microsoft has taken the opposite approach with Kinect. Alex Kipman, Xbox Director of Incubation, onScience Friday pointed out they by design did not protect the USB connection which now has an open source driver. Shannon Loftis of Microsoft added “I'm very excited to see that people are so inspired that it was less than a week after the Kinect came out before they had started creating and thinking about what they could do.” (Via Digitizer.com)

     The Kinect is the hottest product from Microsoft in years and drove Xbox sales past Sony last quarter.

*** Real-time diagnostic information about subscribers’ home networks that lets service providers optimize performance even in highly complex subscriber environments ? Lantiq XWAY PROBE (LXP) Real-time diagnostic information about subscribers’ home networks that lets service providers optimize performance even in highly complex subscriber environments ? Lantiq XWAY PROBE (LXP) (ad)
     
"Teenage Octopus" TalkTalk UK Down 25k to 4.224m; Sky +204K, BT +188K http://bit.ly/h4d8Yl

 

As DSL growth ends in developed nations there are losers as well as winners. Sky, on the other hand, had a record quarter with 204K net adds and BT added 188K.  CEO Dido Harding has a colorful description of what went wrong. TalkTalk, she said, resembles a “teenage octopus. Like companies that have grown very fast, we don’t have control of our arms and legs, like a gangly teenager. And we have a lot of arms and legs. The teenage octopus will take a while to grow up.” (FT)

    One primary problem was severe customer service problems after they took over Tiscali UK. "Customers ... have had a pretty rotten experience," Harding says. "We have described buying Tiscali as being like a snake that has eaten a goat. We are busy digesting an enormously complicated business."

    One promising fact is that they have 85% of customers on their unbundled network. They are well along on a plan to unbundle 93% of the British population. Their network is now dark fiber and Gig-E, dramatically lowering their cost per bit. That allows them to include "unlimited" bandwidth in their $25/month service, which typically is 8-15 megabits (up to 24 megabits max.) Voice line required.  A handsome octopus and a little more http://bit.ly

 

Corrections:
It's Stacey Higginbottam, not Higginbottom, at GigaOm. She is earning a reputation as one of the best reporters at the FCC and in telecom. And I meant, of course, Republican leader Boehner, not Boucher. Thanks to John Windhausen for catching my mistake.

Briefs

• Free Press was one of the few in D.C. to realize Obama's wireless proposals are shameful. “AT&T and Verizon are already building out their networks and expanding coverage, and they don’t need a handout from the federal government to achieve the president’s goals.” The folks there are strong Obama supporters, as I am, but the proposed $5B for wireless broadband is far more likely to become a corporate handout than to actually produce additional coverage. That doesn't have to be so, but it's unlikely the people spending the money will have the courage to only use government funds where is truly needed.

Press

• Brendan Greeley from the Economist joins Bloomberg Business Week working out of D.C. on tech policy stories. Most of the tech reporting out of D.C. has been narrow pickups of FCC and similar news, not depth on policy. Far too much is stenography, not reporting, with the “reporters” reproducing what the officials and lobbyists say without bothering to research who is lying.  Greeley's background includes blogging for Public Radio International. BBW also hired NY Times tech writer Ashlee Vance, a place where until recently few were recruited.
• Karl Bode has an early candidate for telecom policy story of the year with “Why Obama's 98% Wireless Goal Is Empty Rhetoric.” http://www.dslreports.com/shownews/112429
   
  He notes the FCC itself estimates “98.5 percent of the population nationwide resides in areas with access to 3G services,” and that nearly all of them will be upgraded to Obama's promised “latest wireless technology” even any government program. The Broadband Plan CITI Columbia report predicted that LTE coverage would reach 94% by 2013-2014, which also implies that 96%-98% will be LTE covered by Obama's target of 2016 without the $5B Obama wants in the budget.
• Ray Le Maistre at Light Reading photographed Matt Beal of CenturyTel chatting up Matt Bross of Huawei. They were close colleagues at the top of British Telecom's 21st Century Network so it may have just been old friends getting together, but Ray wonders if this portends another Huawei breakthrough in the U.S. market.  Huawei's Android phone is making waves with a $179 retail price from MetroPCS with a $50 rebate to $129. It's better than Jennie's old iPhone, although no match for the current one. Since the phone isn't subsidized, Metro will let you connect at a low price and without a contract. The $150 smartphones from Huawei, ZTE, and soon others will profoundly change the market, especially when the price drops to $100 in a year. Beal's been quiet but he's a world-class engineer presumably upgrading Century's technology planning. 

People

• Krista Jacobsen, who led TI's xDSL standardization activities from 2001-2004, is now a patent attorney at Covington and Burling in San Francisco. She was one of the first engineers working on DMT while she took her Ph.D. under John Cioffi at Stanford.  
• Mary Evslin has moved on from her job as Vermont broadband chief and is now consulting. She's an old friend to most of us in the industry, very knowledgeable, and now experienced with state politics. She's a natural choice to advance projects at the state level.

*** Washington, March 18 The National Broadband Plan: One Year Later
Presented by Columbia University CITI and Georgetown
First speakers include Blair Levin, Ruth Milkman, Aneesh Chopra, & Harold Feld.
Room 395, Walsh Building  Georgetown University  http://www4.gsb.columbia.edu/citi/events/nbp2011reg (PSA) Modest registration fee

Extraordinary Access to the Broadband Data http://bit.ly/gInw9H

 

The FCC and NTIA have done a remarkable job making most of the data available, whether you're a consumer just looking for your neighborhood or an analyst extracting trends. At broadbandmap.gov

 

, you can see your county, state, metropolitan areas or even local census tract. Just input your address. You can add demographic data for analysis. You can get answers on a map or a web page. You can download the data in several common formats, including to take right into a spreadsheet. You can even send it via Facebook, Twitter and more. I extracted a state-by-state chart which is turning out to be interesting. http://bit.ly/fRAvNE

 

      The overall project is a model of how to present data. They offer three dozen "RESTful" APIs at http://www.broadbandmap.gov/developer

 

so you can extract almost anything you want. The raw dataset has 25,000,000 records and you can download the whole thing if you want it. Michael Byrne of the FCC was very proud they had done all the work with open source tools. Everything is running on Wordpress. Computech deserves kudos for the programming.

      If only the politicians weren't spinning the conclusions.

*** Automatic path selection across the home network, using real-time link quality information to choose the optimal communication path and dynamically avoid line noise that creates network bottlenecks.: Lantiq XWAY PATH FINDER (LXF) (ad)

Broadband Map: 4-5% Can't Get 3 Meg, 2% Not Even 1.5 http://bit.ly/fRAvNE
I took the percentages of "unserved" in each state, multiplied by population, and came to about 13M who can't get 3 meg advertised. From another NTIA chart http://bit.ly/eEaLRp , I see that about half of those can get 1.5 meg and that by the NTIA data about 98% of the U.S. can get 1.5 meg. There are anomalies in the data that need explaining before any of this is used for policy about the unserved.

   I put this together trying to understand the data and there are some surprises. In particular, in 2007, California did a fairly careful study and found 96% broadband coverage. The NTIA map shows 91.7% in 2010. While some of that may be that the federal map has a 3 megabit cutoff, there are very few broadband providers that offer less than 3 megabits. Cable is listed as not serving 18% but that figure is almost certainly too high. If it were accurate, some major cable operators submitted fraudulent SEC reports. I'm researching more.
 
   Indiana, with 6M people, seems the worst served of the larger states at a measured 72%. Wisconsin at 88% and Virginia at 93% are the other two large state with issues. Puerto Rico at 46.5% is below much of Latin America and other countries far poorer than the island. http://bit.ly/fRAvNE for the full chart.

From our advertiser Lantiq

HomeGrid Forum Tells Smart Energy Summit Audience of Breakthrough Year Ahead with Roadmap Towards Widespread Adoption of G.hn

Landmark year provides cornerstones for success: G.hn specifications approved, Forum membership doubled and first silicon demonstrated

Beaverton, Ore., January 25, 2011 - The HomeGrid Forum, speaking at today’s Smart Energy Summit in Austin, Texas, unveiled an exciting and ambitious roadmap towards the widespread adoption of G.hn as the de facto standard in wired home networking.

Speaking at the Summit, the Forum’s co-Chair of Marketing, Chano Gomez of Lantiq, said that first deployments of G.hn products will occur during 2011 and the organization’s Compliance & Interoperability (C&I) Roadmap outlines a range of practical steps for service providers and equipment manufacturers. This roadmap includes the appointment of accredited test houses, the first interoperability plugfests, and the first shipments of certified products.

There have been also key developments in G.hnem  the ITU-T standard for energy management  during 2011, enabling cost-effective SmartGrid applications such as smart meters, smart appliances and advanced re-charging systems for electric vehicles.  While participating in a panel on home gateways, Gomez said that consent of G.hnem is expected during the first quarter of 2011 by the United Nations International Telecommunications Union (ITU-T).

Gomez is Director of Business Development at Lantiq North America and has more than 10 years of experience in home networking and SmartGrid applications semiconductor industry, with a special focus on powerline communications for voice, video and data transmission. Since 2008, Chano has been actively involved in the development of ITU-T standards G.9960 and G.9961 (G.hn). He currently serves as co-chair of HomeGrid Forum Marketing Working Group, and previously as chair of the HomeGrid Forum G.hn Contributions Working Group.
January 31

• 4 Phone Calls Shut Down Egypt, 12 Would Come Close in the U.S. http://bit.ly/igsrvq
   
• $200,000/Home to Upgrade Broadband http://bit.ly/hxXLhK
   
• Julius' Scandal: Manufacturing A Spectrum Crisis http://bit.ly/f3sNey
   
• The "Julius Tax" and the Great Fear http://bit.ly/h26qGR
   
• Why Auctions Likely Fail for Unserved Areas http://bit.ly/eTO4ac
   
• Let Them Eat Satellite http://bit.ly/fb3JMr
   
• 9 Big Things That May Need Fixing in USF/ICC http://bit.ly/eHR45Y
   
• ?$100M Giveaways to Carlos Slim, Billions to Glen Post, Ivan Seidenberg & Randall Stevenson http://bit.ly/eHR45Y
   
• Editorial: Cui Bono, Give Us the Data
• Briefs on German wireless, Triple Networks, Larry Strickling, Michael Calabrese, Dale Hatfield

Reply "subscribe" to be added, "un" to be dropped
 
 

 

*** Friday Feb 4 Live From Miami 4GWE and Policy for 4G. Free.
A live stream from 9 a.m. to 1 p.m. with top people from NTIA, Google, AT&T, Microsoft and more. Carl Ford promises "This is not your father's telecom event." http:www.4gwe.mobi

 

(ad) That's Jennie behind the camera
 
 4 Phone Calls Shut Down Egypt, 12 Would Come Close in the U.S. http://bit.ly/igsrvq

 

"It can't happen in the U.S.," everyone's saying, after four official phone calls shut down Egypt's Internet in about 15 minutes. The U.S. is larger. It would take 12 phone calls and that would only shut down about 90%.
 

     Four calls - Comcast (17M), AT&T (16M + wireless), Time Warner (10M), and Verizon (8M + wireless) - would take down 51M lines, 60% of U.S. landline and most wireless data. Four more - Century-Qwest, Cox, Charter, Cablevision - would pull down 15M more, half the rest. A third group of four - T-Mobile, Sprint, Level 3 and Cogent - bring down most of the rest of wireless and the major backbones. All the major carriers have procedures in place for emergencies and designated federal officers they work with. Another two dozen calls would leave only a few percent of connections working.
 
    It might take an hour to bring down 90% and a few hours more to reach 97-99%. http://bit.ly/igsrvq

 

*** Automatic path selection across the home network, using real-time link quality information to choose the optimal communication path and dynamically avoid line noise that creates network bottlenecks.: Lantiq XWAY PATH FINDER (LXF) (ad) http://bit.ly/dL4DTR

 

$200,000/Home to Upgrade Broadband http://bit.ly/hxXLhK

 

The 26 families in McCarthy can only get satellite broadband. Four of them have children. As part of the stimulus, the Rural Utilities Service is providing a $2,613,975 grant as well as a $2,613,975 loan. That's $100,000 per home in grant and as much again in loans.
 
      The Copper Valley Telephone Cooperative proposal claims the project will create 56 jobs, a figure that surprised me. Dave Dengel of Copper Valley explained the road is "gravel, (most of the time). The sites are remote and will require helicopter access and remotes camps during construction.  Everything will need to be airlifted to the sites. Concrete for the foundations will be mixed on site, which requires aggregate, water and cement to be lifted to the site.” Dengel adds "The region receives about 15,000 visitors annually. In fact it is the largest (area wise) national park in the United States.  While there may be only 24 permanent households there are many more seasonal residents there.  Also there are many businesses that operate out of McCarthy/Kennecott on a seasonal basis and their customers are contacting them via the internet and telephone.”
 
    Most of the homes have a total value of less than $200,000 based on the average household income of $17,000. More, including the proposal summary http://bit.ly/hxXLhK
 
 
 
*** 4GWE Miami Feb 2-4
We will explore how best to enable and exploit the mobile Internet. 4GWE is the gathering place for Mobile Network Operators, fixed carriers, handset manufacturers, mobile internet device manufacturers, application providers, and venture capitalists. Use code DB for a 15% discount. Register NOW
 
http://bit.ly/eafdEe
 
(ad) Carl Ford, the best event programmer in telecom, will have a strong program.
 
 Julius' Scandal: Manufacturing A Spectrum Crisis http://bit.ly/f3sNey

 

"There was a big push to manufacture a spectrum crisis," came the email from inside the FCC. "It's a lie that's being perpetuated to the uncertain benefit of a few and definite detriment of the rest." A second senior source confirmed. I even found a highly suggestive document trail. Releasing more spectrum is a good thing in the long run, but one of the least important issues for many years.  Five carriers - Verizon, AT&T, Sprint, Clearwire & LightSquared - have more spectrum across most of the country than they need for five and probably ten years. Verizon CEO Ivan Seidenberg told D.C. "I don't think we'll have a spectrum shortage," AT&T President John Stankey explained to Wall Street they could meet any likely traffic demand with the spectrum they have.
 
     A bureaucrat playing CYA and shutting down criticism seems an unimportant story until you realize how many crucial things Julius isn't doing. Making broadcast spectrum the #1 priority allows him to distract attention from what actually needs to be done for "affordable broadband" and more.
 

      It's unclear whether Julius realized he was telling a "politician's truth" when he said at CES "demand for spectrum will soon outstrip supply." It could be that the folks at the FCC who recognize the error were unwilling to say "the emperor has no clothes" on something he's made his highest priority for 2011. Or Julius may be playing a politician's game. Pepper explains "Washington doesn't understand anything that doesn't fit on a bumper sticker." It may be that Julius believes creating a false crisis is the only effective way to achieve something worthwhile, spectrum for the long haul.
 
    Clearwire is finding very little demand for the spectrum it's trying to sell. No one except T-Mobile faces serious spectrum limits for years and the DT owned company is also looking at LightSquared and other options. From AT&T to the cablecos, carriers are sitting on huge stores of unused spectrum.
 
         However, "Femto/wifi offload worked against the idea of a spectrum crisis. Same with acknowledging that back-haul is a bottleneck. Same with cognitive radios, directional antennas, underlay, and all forms of existing spectrum re-use. The idea seems to be to get the military, the broadcasters, etc., to make their spectrum available to the private sector. It's a straight real estate metaphor. It's replacing many things that need to be done and obscuring/confusing lots of stuff that should be much more clear."
 
        Kevin Martin was excoriated because Cathy Bohigan may have pressured a staffer for a particular opinion on a la carte cable pricing. Congressman Bert Stupak tore into him with a vociferous tirade and report. This is directly comparable, with staffers pressured to hide the facts.
 
 
 
  The "Julius Tax" and the Great Fear http://bit.ly/h26qGR

 

"Le tax Baroin" they called it in France when Minister Baroin added a very unpopular VAT to Internet service. "The Julius Tax" would be the natural name if Genachowski goes ahead with a plan to tax every Internet connection and give most of the money to the phone companies. The FCC is already spinning it as a tax to bring broadband to the poor and unserved, but every indication I can get of the numbers is that's not where most of the money will go. While they are talking <about a buck> most families will have one landline and several mobiles, suggesting $3-5/month or about $50/year per family. That could go up without needing to go through Congress.  Most poor Americans don’t get lifeline. My unconfirmable guess is that the broadband tax will take more from the poor than the total of new money for lifeline broadband.
 
The Republicans called the original "school & library" support the Al Gore Tax and made it a campaign issue. An FCC staffer tells me Republican leader Boucher has threatened to do the same with the new proposal, one reason it's been in limbo for two years. More http://bit.ly/h26qGR
 

 
** Meet ASSIA at the NTCA 2011 Annual Meeting in Dallas, Booth #406, February 13-16. Ask how ASSIA's Software-as-a-Service option for high-Speed, dynamic DSL management can dramatically decrease your operating costs. (ad)
 
Let Them Eat Satellite http://bit.ly/fb3JMr

 

The February 8 USF/ICC proposals set a policy that perhaps 1% of the U.S. should get satellite, I've inferred. I have not seen the latest drafts of the program, however. Fortunately, new satellites offer 5 megabit service and somewhat improved latency.
 
   Landline broadband to 100% of the U.S. would cost $20-35B, the planners calculated. Use satellite for 4/10ths of 1% and the cost drops in half. In that last half of 1% are many homes that would cost $10,000 and even $100,000 to connect. Unofficially, the planners decided that was just too much to spend, especially when the new satellites can offer 5 meg service. They decided government money should go first to areas that could be served for a few hundred or a few thousand dollars. What everyone understood was that the more expensive areas would probably not be reached, but no one said that aloud. I expect the same will be true in the new USF/ICC proposals. The details in practice will offer only satellite to the most remote, but that won't be stated.  One policy expert thinks they will ultimately use satellite for 2% or 3%. If so, the cost of efficiently reaching everyone else by land will be under $5B. More http://bit.ly/fb3JMr
 

 
** Annual Broadband Properties Summit: April 26-28, Dallas. With the mission of Building the Fiber-Connected Community, the Summit attracts network builders with a program of 45 sessions and 150 speakers. Includes one-day program on Broadband and Economic Development. Program http://www.bbpmag.com/

 

Use VIP Code DSLPRIMEVIP to register for $450 at http://bit.ly/fY37lr 

 

 
Why Auctions Likely Fail for Unserved Areas http://bit.ly/eTO4ac

 

The $7B stimulus failed the unserved so abysmally that neither RUS nor NTIA is willing even to estimate how many unserved homes they reached. Many, probably most, auctions to reach those "unserved" with broadband will have poor results because there are rarely more than one or two likely bidders. Most will be more like "sole-source" contracts, which require a totally different and more complicated strategy.
 
  "Unserved" homes are rarely clustered in towns of 500 or 5,000 that might make sense for a new entrant to serve. Most are in clusters of a few dozen and only the local phone company and perhaps the cableco has facilities in place. 96% of homes that can get cable TV service can get modems as well, so only occasionally will a cableco be a second natural bidder.
 
The maps aren't in yet, but I doubt there are even a dozen clusters of 10,000 unserved homes, about the minimum for efficiency. More typical is McCarthy, Alaska, where RUS is providing $5M for backhaul to 26 homes. There’s a minimum cost for backhaul and cell tower/DSLAM that you can't cover without hundreds and more likely thousands of customers.  The local telco can extend out from the facilities they have. Far more http://bit.ly/eTO4ac
 

 
There aren't any simple answers how to do better. 19 out of 20 homes are already served so the remainder are "black swans" that often don't fit patterns. The plan discovered that about 1/2 of 1% actually were so far from existing facilities that the costs were prohibitive. That's only the third or fourth most important factor why homes aren't served. Ten times as many are not primarily held back by distance/density.  
 
*** 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)
 
Correction

• “Without,” not “with” should have been in last week's story. “Oberman is planning on delivering 14 gigabytes/month per customer in 2015, which wouldn't have been possible without Kurth moving hard to free spectrum.”

Email

• “Looks right to me” was the encouraging response on my triple network story http://bit.ly/hJs6ZO
   
  from an engineer responsible for tens of millions of lines. LTE is great, but it works best when combined with WiFi/femto in the millions and landlines for offload. I think I've captured what the best engineers are independently deciding, but I'd love to hear much more.

Brief

• Good news from Cairo: “Your Armed Forces affirms that freedom of expression through peaceful means is guaranteed to everybody. It will not use force against this great people.”

People

• Larry Strickling has two outstanding folks, Dale Hatfield and Michael Calabrese, playing an important role in NTIA spectrum policy. Mike's work at New America has informed much of my thinking about how more efficient use is even more important than more spectrum, probably by a factor of 5-10x. Dale's a legend. 

Next week's tech issue will cover the end of the component shortage, implications of Intel's three 22 nanometer fabs, AT&T's massive deal for tower upgrades, and the latest wireless news from 4GWE. See you there.
 
*** Silicon Flatirons Boulder Colorado 13-14 February The Digital Broadband Migration: The Dynamics of Disruptive Innovation Aneesh Chopra, Phil Weiser, Dale Hatfield, Susan Crawford, Doug Sicker, Vint Cerf, Paul de Sa  ... http://www.silicon-flatirons.org/events.php?id=857
 
(psa) Always one of the best events of the year for the wonkish. Wish I could go. db
 
9 Big Things That May Need Fixing in USF/ICC http://bit.ly/eHR45Y

 

?$100M Giveaways to Carlos Slim, Billions to Glen Post, Ivan Seidenberg & Randall Stevenson
Carlos Slim of Telmex, the richest man in the world, is a smart businessman who wouldn't have paid nearly $2B for Puerto Rico Telephone if it didn't make a lot of money even without a USF subsidy. But the lure of "free government money" is strong and he hired Henry Rivera to get his share. He bought the company from Verizon for $1.89B without any subsidy and now says he can't afford to provide decent service. Many in Washington want to give him the money, because they think it's helping the poor people in Puerto Rico. Kevin Martin refused to go along even though it was his old law firm, Wiley Rein, leading the charge. They orchestrated a deceptive campaign that "the poor and rural people of Puerto Rico" were suffering because "they" didn't get USF subsidies. This is pure gibberish; the money goes to the company and there is no effective means to ensure it creates additional investment.
 

Jan 27

• 1,000,000 WiFi Hotspots for China Mobile http://bit.ly/fReBBH
   
• Gigabit Homes in Rural Broughton http://bit.ly/h08K80
   
• Timotheus Höttges: Deutsche Telekom in Serious Straits http://bit.ly/e68fyJ
   
• Good Government Work: Protecting the New Wireless http://bit.ly/eaNcdu
   
• Ruth Milkman's (Implicit) Promise: Affordable Broadband, Somehow http://bit.ly/fxbrgO
   
• 21st Century Triple Networks: Ubiquitous 4G, WiFi, & Wires  http://bit.ly/hJs6ZO
   
• Briefs on China Mobile, Reinhardt Krause, Craig Moffett, Jeff Fan, and Wall Street clothing trends

Reply "subscribe" to be added, "un" to be dropped

"Enhanced investment in the network, both in 4Q and in the forward outlook, is the right move," Jason Armstrong, Goldman Sachs, reversing Wall Street consensus

Wang Jianzhou of China Mobile is building 1,000,000 WiFi hotspots, including 20,000 to blanket Beijing. “Building out the Wi-Fi network is the fastest way to meet rising Web demand by phone users.”  Top engineers around the world have decided the best mobile network combines 3G/4G for wide coverage and WiFi/femto for far more capacity in local areas.  The Triple Network also requires landlines  DSL, cable, fiber  to which the traffic is offloaded as quickly as possible.  I'd very much welcome improvement of the Triple Network comments at the end.

     Most “mobile” calls actually are from home or office, not in the park or from trains speeding at 80 miles an hour. The home-based concentration is even higher for video. Jennie finds it's often more convenient to watch on her iPad even with a 50 inch TV in the next room. A second implication is that profitable wireless requires wired networks in place as well. Randall Stephenson of AT&T explains “You're always going to have to have a fixed line capability to offload this traffic.” Which is good news for the DSL Prime readers delivering DSL.

Quickies:

• GPON prices in China have plummeted to well under $100, almost matching EPON
• Texas Instruments is “in volume production now with OMAP 4,” their dual core processor for cellphones and tablets. Nvidia's Tegra2 (in the Motorola Zoom) beat them to market. With Qualcomm coming hard as well, prices on dual core phones/tablets should be aggressive.
• AT&T U-verse added 246K customers Q4 although older DSL was down 36K.  Verizon FiOS added 197K but DSL was -145K. Time Warner Cable had only 94K. Cable has important strategic advantages but fears of imminent monopolies are overblown.  

** Meet ASSIA at the NTCA 2011 Annual Meeting in Dallas, Booth #406, February 13-16. Ask how ASSIA's Software-as-a-Service option for high-Speed, dynamic DSL management can dramatically decrease your operating costs. (ad)

1,000,000 WiFi Hotspots for China Mobile http://bit.ly/fReBBH

 

Wang Jianzhou of China Mobile is building 1,000,000 WiFi hotspots, including 20,000 to blanket Beijing. “Building out the Wi-Fi network is the fastest way to meet rising Web demand by phone users.” Plenty of WiFi is also the strategy discussed by AT&T, although they aren't moving as quickly as the Chinese.

    Masayoshi Son has taken a different route to creating millions of hotspots for Softbank Mobile in Japan, taking advantage of the DSL/fiber network they built for Yahoo BB. Each mobile subscriber gets a Fonera WiFi router or femtocell, designed to allow part of the landline bandwidth to be shared with other wireless users. The customer can turn off the sharing, but most allow it in return for being allowed to roam themselves.  Result: nearly all the usage at home, and much of the use out of home, is quickly diverted to the landline network with 10x or more the capacity.

     British Telecom, Comstar, ZON, and Neuf are also working with Martin Varsavsky of FON to create instant WiFi clouds with the co-operation of their customers. It's a good deal for everyone. FON's software/router handles authentication and sets limits on how much of the user's bandwidth is diverted so the burden is modest. The consumer gets reciprocal rights when they are traveling to millions of other hotspots. The carrier gets an enormous amount of bandwidth for minimal cost, freeing 3G/4G network capacity. It's now proven with millions of active users.  http://bit.ly/fReBBH

 

*** Lantiq XWAY STREAM chips support the Global ITU-T G.hn standard for home networking applications http://bit.ly/dL4DTR

 

(ad) Ready now

Gigabit Homes in Rural Broughton http://bit.ly/h08K80

 

Aidan Paul writes “I look after Vtesse Broadband. My mission is to bring fast, reliable and affordable broadband services.” He just installed 1 gigabit service to homes in Broughton, about 30 miles northwest of Cambridge. Vermont Tel and Singapore are also going for a full gig up and down, while SSP Yhtiöt Oy in Finland, Portugal Tel, and Australia's NBN are stretching GPON towards a gigabit down. The natural speed of fiber today is a gigabit; cable 100 megabits and bonded DSL 50-100 megabits. The economics make sense and anything less is a second rate Internet.

     Vtesse sells fiber speed connections to businesses using a backbone across the country. They are looking for communities ready to work with them for residential service as well. “If you think we may have got it right, and you'd like Vtesse Broadband in your community, join our action groups on the Community pages. You can contact me personally at http://www.vtessebroadband.co.uk/index.cfm/home/contactus.” He

 

adds a promise, “I will get back to you.”

     Gigabit announcements in 2011 will number at least dozens and possibly hundreds.

*** 4GWE Miami Feb 2-4
We will explore how best to enable and exploit the mobile Internet. 4GWE is the gathering place for Mobile Network Operators, fixed carriers, handset manufacturers, mobile internet device manufacturers, application providers, and venture capitalists. Use code DB for a 15% discount. Register NOW

 

http://bit.ly/eafdEe

 

(ad) See you there and that's Jennie behind the camera.

Timotheus Höttges: Deutsche Telekom in Serious Straits http://bit.ly/e68fyJ

 

DT CFO Timothy Höttges paints a dismal picture of company prospects in a January 14th presentation. He leads with a slide showing the company finances are "highly exposed" with a debt to equity ratio worse than France Telecom, Vodafone, Verizon, AT&T and even Telecom Italia. The stock price has gone down 30% compared to the index in the last two years. Earnings the last five years haven't always covered the dividend. 

   Slide 10 is really scary for investors.  "In order to develop our business, we need long-term oriented equity markets." Staking the company future on unlikely revolutionary changes is risky. Sure, the market overplays quarterly and annual earnings like a mad crowd, but Höttges has no reason to think he can change that. He shouldn't be dependent on living "the best of all possible worlds."
    Höttges says DT also requires a "reliable fiscal policy with a sense of proportion." It's hard to think of any country with more reliable finances than Germany. I don't see why he thinks we don't have "fully functional debt capital markets." Despite all the problems of the last few years, DT is still a very rich company with favorable borrowing terms so I don't see what he has to fear.
     I spent some time with DT financials. They are uglier than I expected, although they are still managing to pay 3.4B euros/year in dividends. One disappointment was how far their capex is below depreciation. Now that cable is moving in Germany, low investment is hurting DT badly. More http://bit.ly/e68fyJ

 

Correction:
It was Qualcomm, not Broadcom, which bought Atheros. I briefly had that wrong on the web.


email

• A senior FCC staffer shared her enthusiasm for Comcast's $9.95 offer for poor families. “Comcast’s broadband adoption program will be available to households (once they are signed up during the three year period  and note that the three year period is based on school years, so beginning with the school year 2011-12) as long as the child is eligible for the federal lunch program and is in K-12. This is a long-term commitment to serve eligible households, possibly up to 13 years, if the child is in K and the household remains eligible until the child graduates from high school.”
• A reporter moving on from a major newspaper wrote, “You are the best. I tweeted the $9.95 thing. Listen, bubbe, tomorrow is my last day here but the new gig looks good.” I always share files/info with reporters who ask and many have been generous with me in turn. 

briefs

• China Mobile now has an amazing 584M mobile connections, China Unicom 167M and China Telecom 91M. (Reuters) With customer overlap, that's more than 700M subscribers. With iPhone3 quality Android phones down to $150 and going to $100 in a year, hundreds of millions with connect to the net with mobile.

press

• Reinhardt Krause of Investor's Business Daily observes “Although Genachowski released a much-trumpeted national broadband plan in March, most of it hasn't been carried out.”

wall street

• “The average hedge fund gained just 10.49% last year, well below the 15% gain of the Standard & Poor's 500 stock index,” WSJ reports. The magic is over for VC's as well.
• Jeff Fan of Scotia sent over a report on video over the top in Canada, which has one of the highest viewership levels for net video. He concludes “caps set on bandwidth usage by ISPs represent a key factor in limiting the amount of video content that Canadian consumers are likely to view on the Internet.” Bandwidth is so cheap that Comcast offers 250 gigabytes while Verizon and AT&T are totally unmetered. So I believe the natural way for the CRTC to increase video competition is requiring the Canadian broadband duopoly to raise their caps to international standards. Someone tell that to von Finckenstein. 
• Craig Moffett likes what the iPhone will bring and was impressed by how well FiOS is doing (197K net adds for the quarter, while Verizon DSL is down 145K.) But he believes the good news already in in the stock price. “At 17x earnings, Verizon appears to us to be priced to perfection… and then some. We estimate warranted value to be $25, more than 25% below current levels. We rate Verizon underperform (target $25.) Other analysts strongly disagree. I don't pick stocks.
• Ten years back, Wall Street was comfortable with the West Coast style of casual dressing, at least in the technology sector. More recently that's changed. I'm now typically one of the few without a jacket and tie. Courtney Comstock says the informal rules for women at Goldman are even tougher. “Hair must be neat, and pulled back or at least out of your eyes. Nails must be manicured red, pink, or nude. Trimmed short and round. Skin must be smooth, even-toned and fresh-looking skin. No heavy eye-liner, ideally none. Light lipstick.”

Policy

*** Silicon Flatirons Boulder Colorado 13-14 February The Digital Broadband Migration: The Dynamics of Disruptive Innovation Aneesh Chopra, Phil Weiser, Dale Hatfield, Susan Crawford, Doug Sicker, Vint Cerf, Paul de Sa  ... http://www.silicon-flatirons.org/events.php?id=857

 

(psa)

Good Government Work: Protecting the New Wireless http://bit.ly/eaNcdu

 

The best thing Julius did since he took office is to enable LightSquared, a potential fifth major wireless carrier. They have 46+ MHz of spectrum that was dedicated to satellite and the FCC gave them permission last year to use it for mobile broadband. Larry Strickling of NTIA jumped in two weeks ago and forwarded a multiagency request to the FCC to defer a needed approval. Given Harbinger may not be able to raise the money as it is, that would probably kill the whole deal. The ostensible reason: GPS receivers (which use an adjacent frequency) had lousy filters and were sensitive to out of band interference.

 Julius made the right call and issued the needed waiver with conditions they deal reasonably with the interference issue. Getting more competition and making full use of spectrum is a sensible policy goal. Michael and Kevin made a mistake allowing Nextel and AT&T Wireless to be taken over, reducing the U.S. from 6 to 4 majors. For years, competition had knocked prices down every year and the U.S. had some of the best wireless prices in the world. Post those two acquisitions, prices "stabilized" at $40/month for a standard package. Merrill Lynch calculated wireless prices were $B's more than they would have been.
 
 In this case, badly built receivers may have an unfortunate problem, although the FCC tech review found any problem likely to be minor. That's not enough reason for 50 MHz to lie virtually fallow. That's enough spectrum to build two networks similar to Verizon's LTE.

  I sent Larry a copy of the seminal David Reed/David Weinberger article "The Myth of Interference."  Reed points out the 1950's assumption of unavoidable interference is now out of date. Decent receivers on the GPS would have prevented this. With today's cognitive radio and spread spectrum, interference can be virtually eliminated up and far more data carried.

     Thanks to Strickling and Moira Vahey for factchecking and catching a major error.

*** Annual Broadband Properties Summit: April 26-28, Dallas. With the mission of Building the Fiber-Connected Community, the Summit attracts network builders with a program of 45 sessions and 150 speakers. Includes one-day program on Broadband and Economic Development. Program http://www.bbpmag.com/

 

Use VIP Code DSLPRIMEVIP to register for $450 at http://bit.ly/fY37lr

 

Ruth Milkman's (Implicit) Promise: Affordable Broadband, Somehow http://bit.ly/fxbrgO

 

The FCC claims "affordable broadband is its single highest priority." So I didn't expect Ruth Milkman to turn down the M2Z wireless proposal. It would have provided free wireless Internet to perhaps a million kids at no likely cost to the government. M2Z promised to combine John Doerr's money, Milo Medin's engineering and John Muleta's DC experience with flexible time payments on currently unused 2155-2180 MHz spectrum. M2Z would build a new network covering 95% of the U.S. that provided free service at 768K as part of its license terms. I believe killing M2Z implied apromise on her part to otherwise solve the affordability gap.

"Reform to the Universal Service Fund" won't reach even half the poor who can't afford broadband. As Milkman and everyone in D.C. know, the existing "lifeline" program does not reach the majority of the poor. Relying on "lifeline" to make broadband affordable is simply fraudulent unless you include a plan to get everyone enrolled. They aren't going to fix that because if everyone qualified were signed up the USF budget is short $billions.
M2Z, with a million free connections, would have been an important step. Killing M2Z also undermined the FCC's goal of more competition and desire to get more bandwidth into use.It was one of the few chances to add a competitor.  More http://bit.ly/fxbrgO

 

*** 4GWE Miami Feb 2-4
We will explore how best to enable and exploit the mobile Internet. 4GWE is the gathering place for Mobile Network Operators, fixed carriers, handset manufacturers, mobile internet device manufacturers, application providers, and venture capitalists. Use code DB for a 15% discount. Register NOW

 

http://bit.ly/eafdEe

 

(ad) The Super WiFi sessions help explain the Triple Network.

21st Century Triple Networks: Ubiquitous 4G, WiFi, & Wires  http://bit.ly/hJs6ZO

 

(Version 0.1. Improvements welcome) The best engineers on the planet are coming to the same conclusion: a hybrid 4G/WiFi/landline network is the way to meet mobile demand. Folks like John Donovan of AT&T and Masayoshi Son of Softbank in Japan had this vision around 2007-2008. As the iPhone/iPad/Android made the coming demand clear, networks planners around the world evolved similar strategies. 

• 4G gives wide coverage but is limited in capacity.
• WiFi actually provides far more capacity, because the range of perhaps 100 meters means the spectrum can be reused thousands of times in a major city. (China Mobile is putting 20,000 WiFi hotspots across Beijing.)  A network builder tells me "WiFi is a solution to off load 'portable' traffic where possible and rely on 3G/4G for 'mobile' traffic." Femtos and perhaps small cells will play a significant part.
• Landlines effectively have 10x the capacity of a similar wireless network and are already ubiquitous from both telco and cable. A top engineer tells me "The general rule is the quicker you can get the byte of information onto a hard facility (copper, fiber) the cheaper it is to operate the network." Randall Stephenson of AT&T explains “You're always going to have to have a fixed line capability to offload this traffic.”

   LTE networks are proving out remarkably well and the engineers building them are excited. Verizon is consistently getting the 5-12 megabits expected with low latency. Telia customers in Sweden are often seeing 15 and even 20 meg. The cost per bit is 60-90% lower than 3G and the capacity easily 10 times the older generation. (3.5G HSPA+ and similar are also doing well.) For now, there's enough LTE capacity Verizon is launching their network without caps and Clearwire WiMAX is also uncapped. Millions of light and rural users will save money using LTE to replace DSL and cable.

    Verizon will begin switching to LTE advanced in 2013, but at some point and in some places even LTE will face limits. The first choke point is crowds: we're about to have the first Superbowl with 10,000 iPhones with video cameras in stands. AT&T put WiFi in Times Square before New Year's Eve and the results were good.

     So cell tower 3G/4G ideally is supplemented with local WiFi/femto. Cell towers cover large areas, allowing comprehensive coverage except for a few dead spots. They offer limited bandwidth over that entire area, with a network like Verizon's LTE offering perhaps 35 megabits to share. WiFi is much lower power, limiting range to a typical 100 meters or so, less with obstructions. Within that range, the capacity is high; 3x3 MIMO 802.11N can carry 100's of megabits in a small area. Locally, 802.11 uses spectrum more efficiently, incorporated a limited set of "spread-spectrum" type features.

      WiFi was in few phones two years ago because it ran down batteries too quickly and cost too much. Moore's Law now enables low power, low cost WiFi. The latest chips from RALINK/Trendchip, for example, cost less than $5. Off mode power consumption is 0.012 mw, transmit power is 19dBm, and the chips are 5 to 7 mm square. Easily 3/4ths of the phones sold by a carrier like Verizon will soon have WiFi as do just about all tablets. As Qualcomm, Broadcom and others include WiFi on their primary cellphones chips it will become ubiquitous.

    Whether cell site or home WiFi, the data moves as quickly as possible to landlines. A neighborhood with 200 homes has typically a gigabit worth of copper for DSL. Cable is shared, but almost always has shared capacity. Once you get to the local exchange, there's fiber to the core with essentially unlimited capacity, usually inexpensive. Incumbents like AT&T recognize the landline network gives them a crucial edge for the profitable wireless business. AT&T five years ago declared "we are a wireless company," and held back on fiber investments. But as mobile data demand developed, even "a wireless company" discovered how crucial the landlines are.

    Deep thinkers, like MIT's David Reed, are looking at spread spectrum and other network architectures that overcome congestion problems up to far beyond the likely demand for decades. Reed's seminal article, with Dave Weinberger, The Myth of Interference, shows the way to think about even more advanced architectures. Well worth considering for future networks.

     Carriers are choosing different strategies to get from where they are today to triple networks. Vodafone, Europe's largest wireless company, is adding millions of DSL customers through unbundling and giving them femto+WiFi gateways. Sky in Britain is buying a WiFi network named "The Cloud." Free.fr enables WiFi on their millions of DSL connections and bought a wireless license. AT&T is putting WiFi hotspots from Times Square NY to San Francisco with expansion plans.  China Mobile is adding 1,000,000 hotspots. More and William Blake's picture of Cerberus, the 3 headed dog http://bit.ly/hJs6ZO

 

(More to come. Thoughts very welcome.)

*** Friday, February 4 Miami Beach SIP Tutorial with Henry Sennrich, "The Father of SIP." SIP drives voice on the net and is often the best tool for video as well. A full day with Sinnreich and Professor Alan Johnston. From the basics to the latest in cloud computing and web-based standards. http://bit.ly/g9sEyP

 

(ad) Alongside Carl Ford's 4GWE. Say hello to Jennie and me there.


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"We do not expect the number of unserved housing units to change materially between now and 2013.

• U.S.: Cable Clobbers DSL, U-Verse, FiOS http://bit.ly/b0nZ5O
• Verizon cuts 2010 FiOS by 2M homes bit.ly/9vAZOz 
• "We are an urban wireless company" Seidenberg http://bit.ly/9rHCTR
• Frontier: 10M Americans must not watch TV over the net http://bit.ly/bfg3tT
• Policy special Common Sense: NN Rules Will Make Little Difference For Years http://bit.ly/bcpv9F ; Kissing Julius' Ring http://bit.ly/biLPr1; No Spectrum for Competition; Why Ivan Reversed http://bit.ly/btgCqA ; Senator Shaheen "Federal regulators are wasting taxpayer dollars" http://bit.ly/9aO16u Qwest's Sensible Stimulus Request: 173K Unserved http://bit.ly/dvwP2J Adelstein's courage http://bit.ly/c0l2DI Guam's very odd grant   http://bit.ly/chv3zQ 61 of 67 Stimulus Grantees Possibly Breaking Law, Could Risk Funding http://bit.ly/b8hbrg Editorial: Freeze BTOP Funding Until the Facts Are Public http://bit.ly/b0k0d9