FTTH
Squirrels Ate My FiOS
It’s not just a catchy title. I lost my FiOS connectivity Saturday morning, rendering my Verizon tripe-play package of voice, data, and television inoperative. The culprit? Squirrels. Continue reading
Verizon Opens the FiOS Kimono
Historically, Verizon (VZ) has held it’s FiOS FTTH subscriber numbers close to the vest, and has not provided detailed information about penetration rates or success metrics. Today, they opened the kimono.
What’s Going On in Optical
OK, since I’ve been called out by Om Malik, I’m going to let rip with a stream-of-conciousness monologue on optical. No backspace key, no delete key, spelling corrections ex-post-facto. Here goes.
Verizon GPON Selection
From Telephony Online:
In a research note issued this morning, UBS analyst Nikos Theodosopoulos said Verizon (VZ) is likely to pick Alcatel (ALA), Motorola (MOT) and Tellabs (TLAB) as its GPON suppliers in a twist on the carrier’s traditional dual-sourcing practices.
Typically the Bells would select two vendors, with a 70:30 deployment split between the two over the life of the contract. Who got the 70 was usually determined by technology and pricing in the early stages of the contract, establishing relative incumbency for one supplier.
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The Future of FTTH in China - Part V
What we’ve learned
- Part One - A radical change in demographics is creating an optimal situation for a fiber build out in China
- Part Two - GE-PON has taken hold in other countries with similar demographics
- Part Three - The economic and market conditions appear to favor GE-PON
- Part Four -The activities by the largest Chinese Telecom actor reinforces this choice
In this fifth and final installment we will examine what questions remain that prevent accurate forecasting of PON deployments in China.
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The Future of FTTH in China - Part IV
This is part IV in a continuing series. Part III can be found here.
Enter the Dragon
China Telecom (CHA) recently assembled a very quiet, closed door session of suppliers in order to orchestrate implementation of several extensions to the IEEE 803.3ah GE-PON standard. This event has gone totally unreported in the press. Obviously, knowing which companies attended would be valuable- this is what I have been able to conclude.
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The Future of FTTH in China - Part III
This is part III in a continuing series. Part II can be found here.
We believe China Telecom (CHA), as well as other Chinese actors, will choose GE-PON. They are motivated by factors that transcend technical specifications, factors that matter most to the selection process.
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Blogging a FiOS TV Franchise Meeting
I attended a Winchester, MA town meeting tonight. The sole purpose of the meeting is to vote on cable franchise application from Verizon for FiOS TV. Meeting ran from 7:30PM to 10PM. Other than a small zoning meeting I once attended, this is my first town meeting.
I am a FiOS customer and follow FTTH issues from a financial and technical basis pretty closely.
THESE ARE RAW NOTES. I reserve right to change them if I get my hands on a transcript from the meeting.
Analysis to follow in a later post.
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Guy from Comcast sitting next to me taking notes. Keeping tabs on the competition. Very friendly, do I detect even some sympathy for what Verizon is about to endure?
Lots of people here… they all know each other. They are all Verizon employees who live in Winchester. A little grass roots corporate push.
Board kicks off Meeting
FiOS TV Rollout and Franchise Approval
This weekend was Town Day in the Boston suburb where I live. One of the street vendors was Verizon (VZ), who was promoting their FiOS service. Comcast (CMCSA)was there too.
I took the opportunity to quiz the Verizon rep on how deployment was going. The rapidity and completeness of his answers was either the result of rehearsal or intense pride.
He indicated that the surrounding towns, where FiOS TV was available, FiOS penetration was at 20%. I asked him what 20% meant and he said “One in every Five Homes”. I asked - “No tricky accounting?”. He said no, and that things were going very, very well. I asked about my town, where FiOS TV is not available and he said that penetration was about 10%, and that the lack of video impacted penetration in a big way. Towns with Video service see much higher subscriber take rates.
I was in disbelief - 20% penetration after six months of service was astounding. I pressed him for a few more minutes and he stood firm on his answers.
I then asked him when they would be getting the franchise approval in my town and he said - the Town Meeting is this Wed. Today.
Should be interesting to see what machinations are required to secure a video franchise. I’m going to go.
The Future of FTTH in China - Part II
This is part II in a continuing series. Part I can be found here.
Technology Selection – GE-PON vs. G-PON
Chinese carriers will be forced to select between two competing standards for Passive Optical Networks (PON) for Fiber to the Home (FTTH) Deployments.
The Future of FTTH in China - Part I
Fiber to the Home (FTTH) and Passive Optical Networks (PON) in particular have received an inordinate amount of attention from the financial community in the last year. Attention has been focused at every level of the value chain, from component companies that make chips and optics to Telecom Equipment and Set-Top box makers to Carriers who are deploying services like IPTV over a new fiber infrastructure. The resurgence in the market performance of optical stocks was (incorrectly we believe) attributed to FTTH and other broadband services.
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PMC-Sierra - More on the Passave Acquisition
I covered the PMC-Sierra Inc. (PMCS) acquisition of Passave 6 days ago.
While I was not given the opportunity to ask questions during the conference call, I did receive a written response to questions I phoned in and left on voice mail.
Question #1 What products are expected to benefit from the acquisition, and what type of revenue multiplier is expected - i.e. for every $1 in Passave MAC’s sold we expect to sell $x.xx in existing PMC products.
We have not closed the acquisition yet and our team and Passave are working on combined roadmaps and pull-through opportunities. We are not commenting further on this, and you may see some of our CEOs comments in the transcript below referring to VoIP-related and Res Gateway-related opportunities going forward.
AT&T Project Lightspeed and the Jedi Mind Trick
The Death Star is looking vulnerable these days.
AT&T (T ) COO Randall Stephenson, speaking yesterday at Bank of America’s 2006 Media, Entertainment and Telecommunications conference attempted to exercise his marketing skills with a poor attempt at a Jedi Mind Trick.
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Verizon uses MoCA to reduce FiOS costs
An article appeared in ZDNet yesterday that provides a clear explanation about the modifications Verizon (VZ) is making to its FiOS FTTH rollout. It’s big news for MoCA and Entropic Communications, a private chip firm that I believe has this key FTTH design win. Continue reading
FiOS Update from Verizon CTO
The Optical Keyhole posted the full text of an interview with Mark Wegleitner, SVP - Technology and CTO at Verizon.
I was hoping for a little more, perhaps something that elaborated on exactly how Verizon is driving down the deployment cost of FiOS to a residence from $2600 to $1605 a user (Figures include cost to pass + cost to connect prem). This is incredible but also unbelievable considering labor is the dominating input.
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Net Neutrality - Tragedy of the Commons
The New York Times writes an editorial on Net Neutrality, thereby launching the issue into the mainstream. In typical Left leaning fashion, the NYT comes out for government regulation of ISPs, and argues that consumers should be guaranteed service regardless of application.
Net neutrality is about big media against big telecom, not big telecom against the consumer, though that is not what the NYT and digital elitists would like you to believe. The reality is that different types of internet consumers exist, and they should pay different amounts for different types of service. Just as the Tragedy of the Commons parable shows:
Benefits of exploitation accrue to individuals, while the costs of exploitation are distributed between all those exploiting the resource.
The telcos have done an awful job of arguing for net neutrality, and have caused such an uproar that Congress cannot back away without extracting a pound of flesh. One of the more sensible things Verizon (VZ) or AT&T (T”) could have presented at the congressional hearings is some recent insightful data ( .pdf link ) on internet use in Japan, where high-bandwidth services are most deployed.
The presentation clearly shows the following has happened in Japan once bandwidth speeds are increased:
- 4% of the fiber internet users account for 75% of traffic usage
- These ‘heavy-hitters’ are no longer an exceptional extreme, and appear in larger numbers when the offered bandwidth increases
- The dominant application driving high bandwidth use is peer-to-peer media downloading
A closer look at the data clearly shows that internet consumers already fall into two tiers.
Note this is a logarithmic chart, the consumers in the upper right are orders of magnitude above the main cluster. The model that ISP’s use ( x mb/s down, y mb/s up, always on, regardless of whether you use it or not) is clearly being exploited by some.
The American carriers must see exactly the same patterns and they are frightened. Big telco comes from a background where every single call, every bit of data must be delivered. Quality of service is paramount, but to keep this promise to all users they will need to increase backbone capacity.
The carriers are seeking a way to recover additional costs from consumers who make the decision to behave in a certain way by downloading very large amounts of media (Video, Audio, software). As peer-to-peer goes legit through paid media downloading services, and more people start taking on usage characteristics like the folks in the upper right-hand corner of the picture, someone will need to pay for more connectivity.
The other option is that one class of users is required to subsidize the usage of a smaller class - i.e. currently 96% of the users pay for the usage of 4%. The result? The price of broadband goes up, and fewer people subscribe - an outcome everyone would agree is not desirable.
In short, a small fraction of users engaging in peer to peer networking is dictating the capital expenditure requirements for backbone bandwidth. If net neutrality becomes law here in the US, carriers will be forced to pass these capital expenditure costs along to all users, regardless if they are a member of this 4% class.
Why doesn’t it surprise me that the traditional political boundaries (and newspaper editorial pages) frame the issue perfectly?
This isn’t an issue about protecting the rights of consumers. The media providers like Google (GOOG) and Yahoo (YHOO) are dead-set against this as it is money out of their pocket. They would rather have the consumers who don’t use their services pay for those who do.
Tiered usage already exists so why is it wrong to charge for it?
Other related posts on this popular topic:
- More Government != Better Broadband
- Fred Wilson on Net Neutrality
- IPTV and the Rising Sun
- AT&T and Whitacre on Net Neutrality
- Verizon Network Hog Nonsense
You can also browse the sidebar related posts, or use the livesearch box at the upper right.
Hat Tip: .pdf link courtesy of MuniWireless
Teknovus and Passave at a Crossroads
Teknovus recently announced a new GE-PON chipset, and it appears they have been able to add features required for NTT’s network. It also appears to be shipping now. From a recent Linley Group newsletter.
These enhancements allow Teknovus to compete with Passave for design wins at NTT, Japan’s largest service provider and the biggest customer of EPON in the near term.
NTT has requirements above and beyond the IEEE GE-PON spec that have been a barrier to entry to companies trying to capture their business. Continue reading
Verizon Network Hog Nonsense
There has been an awe inspiring amount of uninformed chatter with regards to Vinton Cerf (works for Google now, don’t forget) pointing a finger at Verizon for reserving 80% of their network bandwidth for themselves. It all started with this Businessweek Article. I really need to stop writing about Verizon, Net Neutrality, etc but the prevailing public opinion on these subjects have me all jacked up…. and my friends know that when I get jacked up I can’t shut up.
Businessweek’s hit piece said the following:
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Verizon to offer symmetric FiOS?
The Washington Post had an engaging interview with Verizon CEO Seidenberg on Tuesday. One item stood out in the extended excerpts made available by the Post. It sounds like symmetric access is on Seidenberg’s mind.
AT&T Manhattan Investor Conference
Those of you interested in AT&T should check out this monster 169 page presentation (warning, .pdf link) made yesterday at their analyst conference.
The specifics on Project Lightspeed can be found on pages 86 - 113.
Highlights:
- Homes Passed in 2006, 2007, 2008 - 3M, 9M, 18M
- $4.4B in capex to reach all 18M customers
- $700M in annual Opex savings (huh?)
- Only 6% of revenue at risk due to cable telephony (pg 123)
I have a hard time buying the reductions in opex. The reality is AT&T is going to have MORE, not less hardware in the field that can break. This is where the FiOS all optical approach really shines ( ha ha -rimshot-).
