Fast Net News, DSL Prime, DOCSIS Report

One principal conclusion that can be drawn from this report is that by 2013‐4, broadband service providers expect to be able to serve about 95%2 of U.S. homes with at least a low speed of wired broadband service and they expect to offer to about 90% of homes advertised speeds of 50 mbps downstream.3 Service providers expect to provide many homes with access to these higher speeds by 2011‐2012.4 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. In addition to several wireless broadband choices, the majority of American homes will have the choice of two wired broadband services. Upstream speeds for wired and wireless services will generally be significantly lower than downstream.
A second conclusion that can be drawn is that a significant number of U.S. homes, perhaps five to ten million (which represent 4.5 to 9 percent of households)5, will have significantly inferior choices in broadband: most of these homes will have wireless or wired service broadband available only at speeds substantially lower than the speeds available to the rest of the country. Some of these homes will have no choice except satellite broadband, which has some performance attributes that make it less satisfactory for many applications than a terrestrial broadband service.
A third conclusion to be drawn is that adoption of broadband service will continue to lag substantially behind the availability of broadband for the foreseeable future. Investment analysts forecast that about 69% of households will subscribe to wired broadband by 2015, and that 53% of the population will subscribe to wireless broadband services by 2013.6

Analyst forecasts and service provider expectations do not take into account the effect of various broadband stimulus programs or any changes in government policies that may affect deployment or adoption. They also do not consider the possible effects of substantial price reductions that might stimulate greater adoption of broadband by price‐sensitive customers.
Broadband coverage
Wireline Coverage: Industry researchers estimate that fiber to the home (FTTH) was available to about 17 million homes (homes passed) in mid 2009.7 Verizon has announced that it will deploy FTTH systems
2 See Section 3, p. 59.
3 See Section 3: Uncompleted Broadband Plans, p. 51.
4 See Section 3: Uncompleted Broadband Plans, p. 51.
5 See Section 3, p. 59.
6 See Section 3, p. 60.
7 M. C. Render, “North American FTTH/FTTP Status,” RVA LLC, 2009, at 2.
http://www.ftthcouncil.org/sites/default/files/RVAFTTHPreso092809forrelease.pdf.
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capable of serving 17 million locations by 2010.8 A number of other smaller companies, including small rural telephone companies, will be covering additional homes with FTTH. AT&T has announced it will offer DSL from fiber‐fed cabinets (fiber to the neighborhood: FTTN‐DSL) to 30 million homes by 2011.9
AT&T currently offers advertised speeds of up to 18 megabits per second downstream10 (although the actual speed can be much lower), with increases possible as bonding allows doubling total speeds on DSL. Therefore, if just these two largest telephone companies’ achieve their goals, at least 50 million homes will be able to receive advertised speeds of 10 megabits per second or more downstream within the next two years. Other telephone companies will be providing additional similar offerings in their service areas.
Broadband service is currently available from cable companies to 92% of households according to a research firm that tracks the cable industry.11 Cable broadband is being upgraded to the DOCSIS 3.0 standard12 and is becoming widely available at advertised speeds as high as 50 mbps downstream (with one firm advertising 101 megabit speeds).13 Comcast, the largest cable company addressing nearly half the United States, expects to cover nearly all its 50.6 million homes passed14 by 2010. One analyst believes DOCSIS 3.0 will be available by 2013 to “nearly all”15 the homes covered today by cable modem services.16 That would be about 92% of 112 million households, or 103 million homes.
Wireless Coverage: A number of wireless broadband service providers expect to deploy Long Term Evolution (LTE) and WiMAX technologies (so‐called “4G” wireless services) between 2010 and 2013 and, if successful, bring multi‐megabits speeds to a majority of U.S. homes and population.17 The wireless services offer shared bandwidth, so the speeds obtained by users will be dependent on actual traffic loads at each cell‐site, and in particular on how many users are simultaneously using bandwidth intensive applications, such as watching video on wireless Internet connections. As one example, by 2013 Verizon expects that LTE will provide subscribers with 4 to 12 mbps downloads in a deployment planned to reach all of its covered population (at the end of 2008, Verizon’s network covered 288 million people18 or 94% of the U.S. population).19 Other wireless companies cover a smaller share of the population. Entrepreneurial and independent Wireless Internet Service Providers (WISPs) provide WiMAX‐type services to at least 2 million customers20 in rural areas, including many areas not covered by the national wireless companies.
8 See Section 3: Uncompleted Broadband Plans, p. 53.
9 See Section 3: Uncompleted Broadband Plans, p. 51.
10 See Section 1: 1.1 Technology, p. 17.
11 See Section 1: 1.3 Expected Deployment/Coverage Footprint, p. 28.
12 DOCSIS is a standard developed by Cable Labs and stands for “Data Over Cable Service Interface Specification”
13 See Section 1: 1.1 Technology, p. 21.
14 See Appendix A.
15 See Section 1: 1.3 Expected Deployment/Coverage Footprint, p. 25
16 See Section 1: 1.3 Expected Deployment/Coverage Footprint, p. 25
17 See Section 3, p. 52.
18 Verizon Communications, “2008 Annual Report,” Verizon Communications Inc., 2009, at 9.
19 See Section 1: 1.1 Technology, p. 24.
20 See Section 1: 1.1 Technology, p. 24.
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Satellite Coverage: Satellite broadband is available at almost any location in the country that has an unimpeded line‐of‐sight to the southern sky and therefore can provide broadband service to the most remote and difficult‐to‐serve locations. However, the current satellite services have relatively low speeds and latency problems, and cost more than terrestrial broadband services. Two new satellites with greater capacity are expected to become operational beginning in 2011, with the operators announcing that each satellite will be capable of providing 2‐10 mbps21 service. Transmission rates may average 5 megabits per second downstream by 2011,22 but the bandwidth available to each user will vary inversely with the actual traffic load as overall bandwidth is shared among all users.
Broadband Transmission Rates
Faster Wireline Transmission Rates: Most U.S. homes will be served by advertised “50 megabit per second” speed options within the next few years from at least one supplier, as cable is expected to cover nearly its entire footprint (92% of households) with DOCSIS 3.023 and telcos expand FTTH services. DSL/fiber hybrids, called “fiber to the node,” currently are advertised as providing “up to 18 mbps24” downstream by AT&T. DSL bonding, now in commercial deployment, will allow doubling speeds.Including hybrid fiber‐DSL (FTTN‐DSL) and bonded DSL, 60 to 70 million homes will have a choice of providers for advertised speeds of 10 megabits downstream or higher.
Faster Wireless Speeds: Verizon indicates that its LTE deployment will be capable of delivering practical speeds of 4 to 12 mbps. However, wireless bandwidth is shared, and until the networks are tested under substantial load it is not clear whether speeds above 5 mbps can be obtained by more than a few subscribers at the same time.25 The demand for wireless broadband bandwidth has been growing rapidly26 and growth is expected to continue, especially if wireless broadband is used for video over the Internet. Future pricing arrangements for wireless broadband are likely to greatly affect how much video traffic and other bandwidth‐intensive applications are carried on the wireless broadband networks.
Improved satellite broadband data rates: Satellites, like terrestrial wireless systems share the available bandwidth covered by each spot beam so the speed obtained by a user will depend on the simultaneous usage of other users. ViaSat expects to offer shared speeds of 2 to 10 megabits starting in 2011.27
Upstream speeds: Most consumer broadband services are asymmetrical, with downstream speeds significantly faster than upstream speed.28 FTTH offerings currently provide advertised upstream speeds
21 See Section 3: 3.3 Status of Broadband Satellite Plans, p. 57.
22 See Section 3: 3.3 Status of Broadband Satellite Plans, p. 57.
23 See Section 1: 1.3 Expected Deployment/Coverage Footprint, p. 28.
24 See Section 1: 1.1 Technology, p. 17.
25 See Section 1: 1.1 Technology, p. 23
26 AT&T’s mobile data traffic has increased nearly 50 times in the past three years, presumably largely due to the iPhone. M. Meeker et al., “Economy + Internet Trends,” Morgan Stanley, 2009, at 57,
http://www.morganstanley.com/institutional/techresearch/pdfs/MS_Economy_Internet_Trends_102009_FINAL.p
df.
27 See Section 2: Comparison of All Publicly Announced Broadband Plans, p. 48.
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of around 20 mbps,29 although fiber has the capacity for much higher speeds. DOCSIS 3.0 upstream is only in commercial in trials in the United States. Until upstream DOCSIS 3.0 is fully deployed, upstream cable speeds will be in the range of 768Kbps to 5mbps.30
Broadband adoption
Approximately 63% of U.S. homes currently utilize a wireline broadband service, a figure that is expected to increase quite slowly to about 69% in 2014 due to market saturation at current pricing levels.31 Investment analysts estimate that 31% of Americans over the age of 14 currently use wireless broadband (broadband does not include Short Message Service “texting”). This figure is increasing rapidly and analysts expect wireless broadband adoption will probably pass 50% by 2013.
Many households and individuals will subscribe to both wireline and wireless broadband services, just as they subscribe to fixed and mobile voice telephone services. And just as some individuals have “cut the cord” and rely exclusively on a mobile telephone for voice services, some families and individuals may choose to go wireless‐only for broadband.32
The various broadband stimulus plans may influence these adoption forecasts through increased deployment of broadband to unserved areas and encouraging increased adoption of broadband services.
Backbones
Backbone bandwidth traffic volume and capacity will grow roughly at the same pace, with a leading network equipment firm forecasting growth in North American IP traffic of 39% (CAGR) from 2009 to 2013.33 For the same period, capacity is forecast to increase by approximately 44% on major routes so that major route backbone capacity should keep up with demand and significant problems of backbone congestion on major routes are not expected. However, localized congestion may occur on lower capacity routes including connections to cell towers that experience rapid wireless broadband growth.
28 See Appendix A.
29 See Appendix A: Verizon.
30 See footnote 38.
31 Since a computer is a prerequisite to utilizing a wired broadband service, it might be more accurate to measure adoption as a percentage of computer‐equipped households rather than all households. As one investment analysts noted, “We estimate there are 67M broadband subscribers in the U.S., representing 60% of occupied households and ~70% of PC homes. Given broadband availability in roughly 90% of homes, normally distributing PC homes across broadband available homes puts real penetration at almost 80%.” UBS Investment Research,
“Sorting Through the Digital Transition,” UBS AG, 2009, at 5.
32 See Section 3: Cutting the Cord, p. 60.
33 See Section 3: Status of Internet Backbone, p. 53.
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Capital spending
Service providers rarely break broadband out of their capital spending figures among their service offerings so it is difficult to isolate broadband‐specific capital expenditures.34 Much of the service providers’ capital is invested in multi‐purpose (or “converged”) digital networks that carry voice, data (including broadband) and television services simultaneously.
Market researchers and investment analysts recently estimated that as much as two‐thirds of current investments are being made to provide and expand wired and wireless broadband,35 and the trend over the past few years has been growing.
Overall, total industry capital expenditures are forecast by analysts to be about $60 billion for 2009.
Capital expenditures are expected to decrease in the next few years into the mid‐$50 billion range annually as the major new infrastructure deployments come to an end and capital is devoted to expanding the capacity of the deployed systems rather than entirely new deployments.36 With respect to broadband, capex for total broadband is $30 billion in 2009, lower than it had been a year earlier. Looking forward, the capital investments in broadband infrastructure are expected to remain flat at approximately $30 billion per year. At the same time, total capex in all the sectors (Telco, Cable, Wireless, Satellite, and WISP) is expected to decline from $60 to $54 billion.
34 Such a break out would also be subject to allocation of capital among types of services for jointly used facilities, such as back office systems and backbone transport facilities that carry conventional telephone, wireless, broadband and video traffic.
35 See Section 1: 1.4 Expected Capital Outlays/ Operating Expenditures, p. 28
36 See Section 3: Total Capital Expenditures

From: Broadband in America
Where It Is and Where It Is Going
(According to Broadband Service Providers)
Preliminary Report Prepared for the Staff of the
FCC’s Omnibus Broadband Initiative
By
Robert C. Atkinson
&
Ivy E. Schultz

At the Columbia Universaity Graduate School CITI Institute

Note: They used some of my data,