DSL Prime News Briefs

DSL news from around the world.

by Dave Burstein DSL Prime [July 14, 2003]

E-Mail

• Chris Wacker of Panhandle telephone wondered why DSL Prime made so much of Telefonica's TV efforts. "Do you realize that there are several companies deploying video over a DSL line? We are just one of the many independent telcos doing this. We have had this deployed for two years come this September. We have over 800 subscribers and are adding 2 to 4 subscribers per day. We are also expanding in 3 other towns this year and 2 more for next. It seems you always focus on what the Bells are doing. You already know how far the Bell companies are behind. How about profiling some of the independent telco's that are working the bugs out of the system for the RBOC's. " He's of course right about the important efforts of two dozen small companies that put the big ones to shame.
  
  
• SBC's doing a lot more right, but Danny Briere of Telechoice wasn't impressed when they installed for him. "SBC/SNET was here installing a new voice phone line. I asked him if he could use CAT-5e for the inside wiring he was running. 'I'm residential. I don't have that on my truck. That's for businesses only. You'd need to call the business data people for that.' How slow some things change."

Briefs

• Glad to hear Focal is emerging from bankruptcy, after a very rough ride. They provide some of the service to Vonage.
  
  
• Alcatel/Shanghai Bell just got another million line order from China Telecom, one of the most demanding customers in the world.
  
  
• BellSouth's $40 price for crippled 256 Kbps/128 Kbps service "isn't much of a deal", George Mannes reports, adding that their 1.5 Mbps service is $15 higher than Verizon. Consider this a direct slap in the face to Kevin Martin, who went out on limb to give the Bells a virtual DSL monopoly. 256 Kbps/128 Kbps would be a great "AOL-killer" at $20 to $25, but would be a joke if we had a competitive broadband market.

Press

• "Verizon ripped a hole in an oft-repeated industry claim that it will cost $1 billion for wireless carriers to upgrade their networks to handle number portability, with annual expenses of $500 million thereafter." Jeffry Bartash reported for MarketWatch, who went on to calculate the likely cost was "$300 million to start, and far less than that on an annual basis." Bartash did good job of tracking down lobbyist lies. The most notorious currently going is that the local competition prices are "below cost." That's a common claim by telcos and the USTA, but simply untrue, and distressing to see picked up by the New York Times. In fact, the UNE rates are carefully calculated by the states to cover costs plus a return on capital. There are certain exceptions about "longrun" and forward costs, but in practice they haven't been a real issue often enough to matter. Accounting has lots of interpretations, of course, but the cost of UNEs have been very carefully calculated by numerous states to make sure they aren't "below cost." A reporter who picked up this one thanked me for the correction, remembering

Chips

• Chip sales rising in Q1 isn't the usual pattern, because Western Q4 holidays and yearend deals generally drive up sales. But Will Strauss noticed DSP shipments were up Q1 because of cell phone sales around the Chinese lunar new year, and suggests the pattern may be changing as China brings the world's key market.

People

• Michael Howard of Infonetics, who's taken over their quarterly figures, is separating out a category of "IP DSLAMs". The difficulty he's going to face is that nearly every DSLAM now calls itself "IP." Manufacturers that designed for IP from the beginning have some bragging rights, but companies like Lucent and Alcatel have boards to add IP functionality to their "ATM". My first assumption was that upgrade boards were dramatically less efficient than the new DSLAM design Lucent cancelled, but they claim that's simply not so. Yet another point where it's hard for a reporter to find the truth, because gear is not objectively compared and tested. Howard writes "the intent is to separate the products designed around ATM from the DSLAMs designed around IP/Ethernet. We will include ATM DSLAMs with IP blades in the ATM DSLAM category, not with IP DSLAMs."
  
  
• Deborah Taylor Tate, new head of the Tennessee regulator, founded Renewal House, a center for mothers with a cocaine problem, probably excellent training to handle the usual course of lobbying. She's also a lawyer with political experience. I'd suggest she put on the top of her agenda bringing Tennessee's DSL coverage up to the level of the Carolinas and Mississippi, where every CO and many remotes are covered.
  
  
• For job ads and a for hire notice, visit the DSL Prime website.

Wall Street

• UTStarcom has jumped nearly 70 percent in the last two months, to a market capitalization of $4 billion. In DSL, as I've reported, they've been doing very well, but most of the company's income remains PAS phones in China, something I can't evaluate.
  
  
• Zyzel has 10 percent of the DSL CPE business, per William Bao Bean of Deutsche Bank Taipei as he picks up coverage with a buy. The majority of their sales are in Europe, with security a product differentiator. He's bullish on the sector, with buys also on Accton and Ambit. The "greatest risk" in the field is "margin compression." In a separate report, Bao Bean points out a problem that recurs in almost every "hot" product area driven by standards. "We believe wireless LAN unit growth will be exponential, but revenue growth and profitability for chip makers, equipment vendors and telecom carriers will be challenged by competition.
  
  
• Nikos Theodosopoulos at UBS also sees cable telephony as driving the Bells, reporting "Verizon has suggested in FCC filings that it has lost 15 percent of residential lines in the past two years in central offices with cable telephony competition." He's just done an intense 30 page analysis of FTTP that is a must read. His surprising thought is that the Bells will choose two suppliers, believing Lucent and Siemens the most likely supplements to Alcatel.

Copyright 2003 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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