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Finally: AT&T femtos
Sunday, 28 March 2010 08:00

femtooysterRandall Stephenson will put 10M AT&T femtocells across the U.S., I reported in 2008. He told Wall Street that a half-billion dollar investment in femtos would save him the equivalent of $3B in spectrum. They've now officially launched, but at a high price ($100-150) to limit early demand. Cisco is selling femtos to AT&T for about $50 (very large quantities). They save bandwidth (think reducing iPhone problems) and make customers happy, so T's logical strategy is to include a femto in most  bundles. 2Wire, part owned by AT&T, discussed a gateway with a femto included three years ago.

    Checking with parts suppliers I'm finding that including a femto will only add $20-30 to the cost in the near future, and be a natural to include with every U-Verse order. T has invested in their chip supplier, picoChip, rapidly introducing integrated chips that bring down the cost. Randall has a powerful incentive to move quickly after they resolve the last few bugs; wall street is downgrading for reputation issues due to iPhone problems,

     4-10 devices can connect via each femto. Think several phones, the meter for the smartgrid service, electric appliances to switch on or off for automatic energy savings, and others not yet dreamed of. No one is doing it yet,

Last Updated on Wednesday, 31 March 2010 23:22
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South Africa: Some people got very rich
Thursday, 25 March 2010 03:29
AndilePetrus Potgieter sends great news from Pretoria “the market has apparently been blow wide open this week by one of the big players announcing affordable uncapped service package.” The new cables landing across Africa have allowed MWEB to cut bandwidth prices almost in half. But Telkom's monopoly on the local loop keeps prices above $100/month. Politicians including Andile Ngcaba, former director general of the Department of Communications and presidential spokesman Smuts Ngonyama are getting rich off deals with Telkom. Telkom's monopoly has been protected, allowing them to charge almost $100 (U.S.) for a 4 megabit line - without bandwidth. So while bandwidth costs are now dropping in half - with more to come - South Africa continues to be one of the most expensive countries in the world for fast connections.

In the early 1990's the African National Congress had a remarkable website for the day, hundreds of pages of material about policy and politics. I was working at WBAI/Pacifica radio back then, and the reporters would ask me to download material from the ANC for them. Bringing down the broadband price to stimulate the economy and help those less fortunate would honor the ANC pioneers.
 
Chip capacity tight; No DSL shortages
Wednesday, 17 March 2010 16:00

"Right now our capacity is all taken up, and we don't have enough," Jiang Shangzhou of SMIC tells Reuters. Ulrich Schumacher at Grace Semi  has been operating at 100 percent capacityLantiq_logo since September. Mark Lapedus  in EE Times writes "Not long ago, chip makers could not buy an order amid the terrible downturn. Now, amid the upturn, there are widespread reports of component shortages in the supply chain." Memory chip prices are actually going up, with Samsung doing particularly well.

      My checks across the industry suggest things are not nearly that intense. Don't panic. Everyone has to carefully plan, but it's rare that an order that ordinarily would be filled in 30 days is delayed. Demand for DSL chips is good but not enough to seriously strain supply. Chip demand is ultimately driven by sales of the product that include chips; the world economy simply hasn't expanded that much. It's far more likely the industry situation was caused by companies in previous quarters conserving cash by keeping inventories low and now catching up. John Pitzer of Credit Suisse is strongly optimistic about semiconductor stocks, but also notes "there is double ordering in the current environment." Digitimes reports wafer prices are up, but we're talking perhaps a dime a chip, not huge price increases that need to be hedged. broadcom_logo

      Several times I've watched forecasts of chip shortages become self-fulfilling prophecies. Companies double and triple order "just to be safe." The splash of orders creates a real bottleneck and then chaos when things catch up. I call it the "Johnny Carson" problem. The TV host made a joke about toilet paper shortages on the east coast of the U.S. The next day, everybody bought all they could and there (temporarily) was a real shortage.

Last Updated on Tuesday, 23 March 2010 07:50
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Broadband plan, 4 a.m. Tuesday
Tuesday, 16 March 2010 02:52
3:29 a.m. It looks like the broadband plan will increase prices, not make them more affordable, for most Americans and provide little help for the poor. The 376 page plan came out at ten after midnight and the relevant parts are vague and obscure, so I may have errors here. But since the plan puts "affordable" in the first goal, I think it's crucial the reporters in D.C. get the answers and include them in their reporting. The FCC didn't answer my questions today on affordability. The facts are either buried or simply ignored in the 376 pages, apparently hoping to confuse reporters to miss the price increases. The numbers below are the best I can come up with based on three hours reading and no answers from the FCC. I'll update them throughout the day, especially if the FCC provides any of the relevant facts. 

We already know the plan is hollow on high speed deployment (Before 2020, 100M homes will get 100 megabits without the plan according to Columbia/CITI and the cable companies on wall street) and  take rate (90% will almost certainly be subscribed without the plan because data will be built into every mobile phone).  
 
So improved affordability is the key claim I was hoping to see results on. 2:00 p.m. Tuesday No substantive response to my questions from the FCC or a dozen others I asked. A top D.C. reporter said they were giving her nothing either. One of the most interesting folks in D.C. reminded me that the companies might return some of the increases in other services or price cuts, which is my point #4 below. 
Here's what I found.
 
Net results of broadband plan: $5-10 month increase for many, probably most, families
Although the first and third goals of the plan speak of affordable, the actual plan text indicates that many families, almost certainly including a large majority of the poor, will pay more rather than less because of the plan.
 
It's buried and obscured, and these are only estimates.
Last Updated on Thursday, 25 March 2010 05:43
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China Telecom: 802.11n for standard home gateways
Wednesday, 10 March 2010 22:10
“11n is cheaper than 11g but can run three times as fast,” claims Bomin Wang, President of TrendChip, which has just launched an ADSL gateway design with 11n. "In a competitive market where the three-network convergence policy has been put in place, jennie-smilingChina's telecom operators are considering 11n as an essential specification in their new tenders to allow users to enjoy the convenience of high bandwidth and IPTV anywhere, anytime.”

11n chipmaker Quantenna has just received another $15M from Swisscom and VCs to develop their 4x4 MIMO chip. The prototypes are delivering 100 megabits over 100 feet in their testing, enough for wireless HD TV connections. Netgear has announced a product based on the chip. DSL folks know Quantenna's founder, Behrooz Rezvani, who previously was at Ikanos. The Lantiq-Metalink 11n chips have a nice demo of 4 HD signals carried across the demo room without any dropouts.

Jennie hates wires around our home, a problem these chips hope to solve.
 
No B-52's in My Backyard
Saturday, 06 March 2010 18:51
AT&T's customers have long hated the unfortunately named B-52 cabinets and now British Telecom is facing civil disobedience over the ugly 6 foot by 4 footb-52 neighborhood boxes they are deploying. St. Albans said they are totally unacceptable in a "conservation district" and Sandridge parish councillor Chris Hackett has refused to let them dig foundations. Herts 24 now reports the police hear from a local man "I told them I'm not having this. They are trying to obstruct me from getting in and out of my drive. And anyway I don't intend to look at that eyesore from my house. They can either move it somewhere else or I will." http://bit.ly/cIhPct, including picture      
 
    Fortunately, new generation field cabinets can be half the size as chip densities go up. A nice unit from Ericsson does away with the fan, and quiet fans are available for any enclosure. It's time for BT to find a smaller, quieter box. It was a brit, after all, who promised "we shall defend our Island, whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender."
 
     At least the BT units aren't exploding.   
Last Updated on Wednesday, 10 March 2010 22:14
 
Ikanos,Lantiq: Our chips are best
Tuesday, 02 March 2010 22:41
Ikanos_RRA PR_3.5
Mike Gulett of Ikanos told me they make the best DSL chips when I visited. A few hours later, Imran Hajimusa of Lantiq (formerly part of Infineon) said something very similar. I'm sure I would have heard the same if I had stopped by Broadcom as well. Not being an engineer with a test lab, I'm not qualified to judge. Any chipmaker who's survived the tough DSL market obviously has an outstanding product as far as I'm concerned. Both had some impressive features to demonstrate.

    Ikanos showed me how their rate-adjustment on the fly minimizes the dropouts and retrains that are the bane of IPTV carriers.  Tom, Gavin, and the rest did a remarkable job back around 1993 defining the DSL standards and it's amazing how little problem we have with interference. Back in 2000, some competent engineers believed DSL would crash when the networks became loaded, but that clearly hasn't happened.

    But the occasional interference problem is annoying for IPTV, especially if the dropout happens at a crucial moment in a football game.

Last Updated on Wednesday, 10 March 2010 22:21
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Great Firewall eats Facebook in Chile
Saturday, 27 March 2010 11:18
Robert McMillan reports Facebook, Twitter, and YouTube were all inaccessible at a Chilean ISP great_firewallwho used a root DNS server in China. A censorship tool spread internationally, although it's since been corrected.

     Earl Zmijewski at the very valuable Renesys blog tracked down the details which he calls "Accidentally Importing Censorship" It appears the Chilean and possibly an American ISP peers with China Telecom and followed a route through that peer.  bit.ly/cpZF64

Here's the code
$ dig @i.root-servers.net www.facebook.com A
Last Updated on Tuesday, 30 March 2010 18:34
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Free.fr: Great profits aided by depreciation change
Thursday, 25 March 2010 03:22
Freebox_offerThe 30 Euro triple play remains highly profitable with 2009 earnings at Iliad/Free raising from 100M euro to 176M despite losses on the Alice takeover of the better part of 100M. Free cash flow of € 376 allowed Xavier to reduce leverage despite investing € 112 if fiber running under 70% of Paris. Free.fr added 389K subscribers despite Numericable offering 100 mega DOCSIS and mobile carrier Bouygues offering quadplay for € 45,

Iliad increased the depreciation period on the Freebox from three years to four, reducing depreciation from € 316 to € 295. In many companies, that would be an accounting trick to increase profits, but with churn running under 12% per year a four year life is reasonable. The latest generation Freebox is a full DVR set top with 802.11n and home powerline, which they design and assemble for € 180.
 
"Q: What does the plan mean for me today? A: Not much."
Tuesday, 16 March 2010 22:16
"FCC's plan for broadband Internet access falls short" is Julius Genachowski's nightmare headline from the Washington Post. Rob Pegoraro adds "this set of blueprints doesn't represent much of a change from the existing market for high-speed Internet access.
      Doing little for affordability was widely reported as a great weakness of the plan. Matt Richtel in NYT quoted "They talk, talk, talk about affordability, but when you look at the plan, most peoples’ prices are going to go up,” and noted one opinion that the high speed prices of about $100 in the U.S. are twice similar in France and England.FCC's plan for broadband Internet access falls short

   The Washington Post's Cecilia Kang, rarely critical of the FCC, questioned affordability in "How the FCC's new national broadband plan is expected to affect consumers" in response to the plan. She began with "Q: What does the plan mean for me today? A: Short answer, not much. And maybe not even for years." 

Last Updated on Saturday, 20 March 2010 18:36
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Karl Bode "It's just a sales pitch"
Monday, 15 March 2010 13:48

Karl Bode at DSL Reports yet again is outdoing other reporters in avoiding D.C. spin and reporting closer to the truth. I'm asking everyone in D.C.about any concrete results they expect from the plan and no one - including Jules and Blair - have replied with anything substantial. There will be something, probably just a token, for the poor in lifeline broadband and there are plenty of good things like open set tops. But on the basics, -- better, more affordable broadband for more people -- there's nothing in the plan likely to have major results anytime soon. While I write that up, here's a summary of what Karl Bode has written under the title "FCC Gives Final Sales Pitch For Broadband Plan." I wish there was more substance in the plan, but Karl is on target with his criticism

"The FCC has been very busy the last few weeks selling this plan without getting too specific -- and the agency continued that trend today with a broadband plan preview (pdf). We've stored a copy of the FCC's full plan executive summary here (pdf) for those interested. 

"Connect 100 million households to affordable 100-megabits-per-second service."
This goal is, frankly, show business. (I've reported that will happen without the FCC plan.)
Last Updated on Monday, 15 March 2010 17:16
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FiOS buildout is dying
Wednesday, 10 March 2010 12:57
Seidenberg's on the way out and Verizon is changing. They have now canceled planned FiOS deployments for all new territories such as Alexandria, Virginia. According to Bryant Ruiz Switzky in the WIvan and Daveashington Business Journal, Verizon is "suspending Fios franchise expansion nationwide." They are "indefinitely postponing" building Alexandria after telling the city they would begin construction several months ago. Alexandria is one of the richest suburbs in the world and a natural part of the network with a lower than average likely construction cost. Verizon "will now focus on installing its network and gaining market share within the areas where it already has agreements." Bostonians and 10M other Verizon customers are apparently screwed.

    Verizon has buildout commitments to New York and other cities that will keep some crews working, but had already suggested they might cut FiOS builds by 2/3rds in 2011. This is now a further cutback, canceling areas that for years they had been promising to serve. Verizon's Harry Mitchell sends their perspective. "The bottom line is that Verizon said in 2004 we’d build to pass about 18 million homes by year-end 2010, and we’re on track to do that with the franchises we currently have.  Of course, we will also meet any buildout commitments we made in individual jurisdictions beyond 2010."
   
Ivan in an investor call suggested one reason they may be cutting their investment: the broadband plan and stimulus are reducing company spending. So Seidenberg suggested he might ask for government money, and the broadband plan has many "incentives" for him to spend less company money. Blair should take this as a signal to yank any offers to pay telcos to upgrade broadband where it already is available from cablecos or others. Smelling government money, they are cutting back their own investment and then demanding the government pay them instead. 2009 was almost certainly the worst year in a decade for expanding broadband in the U.S. Comany after company cancelled firm plans waiting for the government to pay them for what they intended to do without subsidy.

     Over the last few years it's become apparent that Seidenberg's personal desire to beat the competition has been the primary reason the U.S. is not further behind. FiOS is the largest new network built in the Western world. Cable's DOCSIS 3.0 was developed as a response to FiOS. Brian Roberts of Comcast tells the story of lookng Ivan in the eyes, deciding he was going ahead, and then giving orders to his team and Cablelabs to go full steam ahead on DOCSIS.

        Euille said Alexandria citizens are “clamoring” for Fios and often don’t understand why it isn’t available. “I’m sure the citizens are just as disheartened by this outcome as I am,” he said, adding that the city will look at alternatives.(Switzky) Alexandria can't afford for the neighboring towns to have better Internet service, so building their own network is the obvious step.
    

 

908-559-6407
Last Updated on Thursday, 11 March 2010 15:49
 
The Broadband Plan, Early March
Thursday, 04 March 2010 03:05
Update March 17: Mostly on target. Microsoft/Dell and the carriers have held off on their discount plans. Original The U.S. broadband plan accomplishes very little for affordability, quality, speed, or availability of broadband in the U.S., although it has other important achievements I describe below.
In particular
The “100 megabits to 100 million homes” is right on target  for what will be achieved by 2015 without any broadband plan. (FCC/Columbia CITI November 2009). Based on cable company's official statements, I reported in August 2009 102 million homes would have 100 megabit capable DOCSIS by around 2013. http://bit.ly/c7jMuJ
Fewer than 4% of U.S. homes that can only get satellite (“unserved”) will be reached because of the plan. It's more likely only 1-2% of homes will be upgraded.
Broadband prices are more likely to increase than decrease because of the plan, especially if a multi-billion dollar Internet tax is included. There's nothing wrong with taxing the Internet like anything else, but this “fee” goes to the shareholders and bondholders of phone companies, not re-opening closed hospitals.
Only a small fraction of the poor will get substantial help according to the best information I can find. In particular, the much-touted cable A+ plan provides “back of the bus broadband” throttled to a tenth the normal speed, available to less than one in five of the poor, and actually more expensive than Verizon's recent promotion. AT&T has offered similar, but I don't know if it's included.  
Since nearly all mobile phones will include broadband in a few years and far more than 90% of families have a mobile phone, the 90% take rate in 2020 would almost certainly be achieved without the plan, probably several years earlier.
Last Updated on Wednesday, 17 March 2010 21:02
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Simple, cheap way to deliver broadband to half of those without
Monday, 22 February 2010 23:29
Alabama_poverty35M or so homes - about 100M people - don't take broadband in the U.S. You could subsidize 15-30M of them for 1/5th of the money spent each year on USF/ICC. Each family enrolled would pay say $7/month. The companies would make a normal profit, say 40% EBITDA. It requires no political tricks, and the economics are derived from top Wall Street analysts. It would be a very good thing, far more important than anything I've heard from the broadband plan. It is probably politically impossible. The FCC is hard to change.
 
I begin with the real economics of broadband. The marginal cost of adding a customer to any large broadband network is about $8 by wall street and my estimates. $8 provides 3 to 10 megabit service; reducing the speed to "back of the bus" speeds saves well under $1 (large carrier). 

$8: The marginal cost/month of broadband in 85+% of U.S., essentially all large carriers. The $8 figure comes from leading Wall Street analyst Craig Moffett, presumably direct from internal numbers at the big cablecos. My own research confirms it, although I speak of a range of $5-12 across the developed world. I have factchecked it with AT&T as well as a senior cabler and a large RLEC, as well as off the record with many CTO types, etc. I come to that figure by adding up the cost of bandwidth, customer support, modems, and the other main inputs required to add a customer to an existing network.

$15 A reasonable price for the government to pay when buying millions of lines for lifeline service. That provides teh companies with a reasonable profit, perhaps 40% EBITDA. It's ridiculous to pay retain for millions of lines. We know $15 is reasonable because both Verizon and AT&T charged $15 price for basic broadband until recently and always said they. were profitable. Many European broadband prices are at that level when bought as a bundle. The cost and profit figures are on target for all the larger carriers.

$7 Customer pays (a bargain)

$8 Subsidy/month to get to the $15 total.

< $100 Subsidy per family per year 

10,000 families served per million of subsidt. 10,000,000 per $B.

20-30B homes for $3B/year. That's a lot of money to you or me, but less than 20% of the current USF/ICC total. Verizon or AT&T annual cash flow, etc. It's practical to identify $billions in waste in USF/ICC that can cover it over time. 
    Important note: 5-10% of the U.S. is rural or otherwise has higher costs, which is why elsewhere I point to reducing high rural backhaul costs etc. as critical.

Why isn't it in the plan already?
Last Updated on Tuesday, 09 March 2010 10:47
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DSL the Great Gamekiller
Saturday, 27 March 2010 10:50

DSL_killed_meJeff Green's DSL line dropped and he tweeted "Booted twice -- and progress lost -- on my single-player C&C4 game because my DSL connection blinked. DRM fail. ...Well. I've tried to be open-minded. But my 'net connection is finicky -- and the constant disruption of my C&C4 SP game makes this unplayable. The story is fun, the gameplay is interesting and different at least -- but if you suffer from shaky/unreliable DSL -- you've been warned."

     Jeff, editor-in-chief of Electronic Arts, added "We need new solutions." DSL reliability, please. (via Neoseeker and slashdot)

Last Updated on Saturday, 27 March 2010 11:05
 
$500M IPO for CALX
Thursday, 25 March 2010 02:29

Goldman Sachs and Morgan Stanley sucessfully brought Calix public on Wednesday for $13/share and ended the day at $15. After the offering they will have over $100M in cash, far more than their total debt. Their primary product is a multi-service access box supporting both DSL and fiber, along with associated software and customer equipment. CenturyLink is their primary customer (38% in 2009) and 90% of total sales are in North America. They have a very strong position in the U.S. Tier 2 market with 2009 sales of $233M

Last Updated on Thursday, 25 March 2010 03:00
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Dave in NY Times Plan doesn't yield affordability
Tuesday, 16 March 2010 21:04

And some analysts said that even if the spectrum ultimately became available, it might create wireless access but fail to create competition for the much higher-speed Net access. Wireless access is roughly one-twentieth of the speed of the envisioned 100-megabit lines, said Dave Burstein, editor of DSL Prime, an industry newsletter.

“They talk, talk, talk about affordability, but when you look at the plan, most peoples’ prices are going to go up,” Mr. Burstein said. It typically costs $100 a month for Net access at speeds of 50 megabits to 100 megabits.

Mr. Burstein said those prices were double the cost in places like France and England and yet the plan, he added, does little to bring those down.

He also asserted that the goal of getting high-speed access to 100 million homes was already within reach. About 50 million homes have access to broadband service of 50 to 100 megabits, and the cable industry says 100 million homes will have such access within five years.

 

March 16, 2010

F.C.C. Calls New Broadband Plan Vital

Federal regulators on Tuesday made public the details of their ambitious policy to encourage the spread of high-speed Internet access. But their 376-page proposal, the National Broadband Plan, was met with a chorus of questions, even from the staunchest advocates of its goals.

Telecommunications companies praised the intent but worried that new regulations might impede rather than encourage their progress in expanding Internet access. Iindustry analysts said the plan was both too ambitious and not detailed enough, and consumer advocates doubted it alone would lead to more affordable broadband service at adequate speeds.

Last Updated on Tuesday, 16 March 2010 21:08
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TrendChip now dangerous enough to get sued
Wednesday, 10 March 2010 23:47
TrendchipAlthough TrendChip is near the top in volume of DSL chips shipped, until last week the attitude of the other three DSL chipmakers was “ignore them. They only are at the low end.” As Jonathan Schwartz just blogged “suing a competitor typically makes them more relevant, not less.” At Sun, Schwartz stared down both Steve Jobs and Bill Gates when they threatened patent suits. But Sun lost one to Kodak  in a trial in Kodak's home town of Rochester.  

Lantiq apparently now considers TrendChip a threat, especially if Trendchip goes ahead with their merger with 802.11n chipmaker Ralink. Lantiq is asking a German court to stop Billion Electric from selling modems with TrendChip inside in Germany. I wouldn't want to be defending a Chinese company facing a German chipmaker in a German court.

Lantiq while part of Infineon was a champion of standards aimed at minimal royalties, so I was surprised they chose to sue. They promoted their VDSL QAM chips as preferable to DMT chips in standards because they were royalty-free. Perhaps because they were treated so shabbily by the standards committees
Last Updated on Wednesday, 10 March 2010 23:52
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Bravo, Verizon: "No Bandwidth Caps. Period!"
Tuesday, 09 March 2010 00:38

FiOS_is_betterCustomers hate bandwidth caps, Verizon's market research shows, so "No Bandwidth Caps. Period!" is the highlight of their latest DSL ad campaign. There's no technical or cost reason a cap is needed on any large, wireline network; it's a way to block competitive video and efficiently raise prices.

Internet transit is down to $2/megabit at major peering points and costs of deploying broadband continue to drop steadily. Bandwidth growth continues, which Bill Smith of AT&T tells an FCC workshop has slightly raised his cost per customer. That's important information for DSL Prime readers whose job is to manage network costs, but I'd estimate any increase in the last year is less than 1% of the price of the service. The usual industry figure is the total bandwidth cost is about $1/month, 2-4% of the price charged.

Congressman Eric Massa became a hero to voters by fighting a Time Warner bandwidth cap. Fighting caps – and unreasonable prices – is a natural move for politicians and regulators worldwide who want public support. There's nothing immoral or even fattening about a cap that's reasonably related to costs. Iheard from my consumer-favoring friends for writing about a reasonable one, http://fastnetnews.com/docsisreport/163-c/53-comcasts-fair-250-gig-bandwidth-cap . But it turns out so few people are affected by the Comcast cap it saves very little money.

 
Latest DSL Primes
Wednesday, 03 March 2010 00:00
Grey_aristotle_300_halfinchJan 7 2011 Reply "subscribe" to be added, "un" to be dropped
Last Updated on Monday, 10 January 2011 00:44
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Like a Conquered Province
Friday, 12 February 2010 22:35
Like_the_Sabine_women34% of West Virginia homes can't get DSL, one of the lowest deployments in the developed world, according to the new FCC stats. Jay Rockefeller should have called in Verizon's lobbyists years ago and told them they'd never get a bill through the Senate if they didn't bring his state up to standards. Mountainous Wales is 99% covered and most rural areas of Europe are over 90%, so the argument this is because of impractically high cost comes out of the rear end of a male cow. The smallest rural carriers in the U.S. reach all but 8%, proving what's practical in rural areas. (All states below). 37% of New Hampshire,  31% of Virginia, 28% of Vermont, 27% of Maine, 26% of Michigan, 24% of Maryland and Mississippi, 22% of Arkansas, 21% of Alaska (despite massive subsidies) and New York all can't get DSL. Cable generally is better, but the FCC data is limited and doesn't include homes not passed by cable for TV. (Phone lines pass all homes but cable only about 96%.)
     This data makes clear the largest problem in DSL deployment is where Verizon virtually stopped all upgrades around 2002 when they decided to sell
Last Updated on Monday, 15 February 2010 01:04
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