DSL Prime News Briefs

DSL news from North America and around the world.

by Dave Burstein DSL Prime [January 5, 2004]

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• From a reporter in Philadelphia: "I'll be more than happy to tell Comcast they can keep their exorbitant, high-priced service and go over to DSL. Presuming, of course, Verizon ever gets its act together and moves into my suburb." Hear that Verizon? Finish the build.
  
  
• From Australia comes a request for more details on my report that Japanese competition is built on inexpensive unbundled fiber. "We're now trying to rollout DSLAMs about half a million people, but backhaul costs are our largest single cost and severely limit us. There is currently an Australian government inquiry into broadband competition and I would like to give them some accurate information." Can readers help me with particulars on how Japan and elsewhere keep fiber costs low enough to allow more than one carrier to serve? Ireland and Michigan are working on solving that problem, subsidizing competitive fiber builds.

Briefs

• Randall Stephenson, SBC CFO, two weeks ago pointed out that cost drops are large enough to allow price cuts. "Costs are dropping so rapidly that we are maintaining margins despite cutting our prices." Previously he's said that where they have good DSL volumes, like California, the margins on DSL are very good, similar to telephony around 40 percent. SBC is down to $26.95 for a twelve month contract, a step BellSouth has not followed. A key question is whether a monopoly would maximize profits at high prices, or whether lowering prices broadens the market enough to more than compensate. Andrew Odlyzko and I both guess the low prices are more profitable in the long run, but that's a tough one to be sure about. Smart people, including BellSouth, disagree.
  
  
• "Cable broadband providers lose on average 2 percent of their customers every month, a hefty loss," Richard Wolniewicz writes in Billing World. North American telcos wish they had figures that low. They run so hard when I ask that question I suspect churn must be disastrously high.
  
  
• "High-definition digital television is beginning to take off in the United States," Markoff claims in the NY Times, as he reports Intel's chips will drive costs down dramatically. Is your network of 2005 and 2007 ready, or would you rather lose your most profitable customers?
  
  
• Brava to SBC for being one of only a handful of major companies with a board that's a quarter female.
  
  
• Also happy to hear that Verizon is "committed to deploy broadband service throughout our Pennsylvania service territory."

People

• Bruce Kushnick, the Bells' most intense critic, has a new manifesto, Telecom Riot Act of 2004: 29 Reasons To Not Celebrate The 20 Anniversary Of The Baby Bells. What You Didn't Get For Your Money. Kushnick's attacks make me sound like an apologist, and I've wound up defending the telcos on two public panels I've shared with him. (I wish I had tapes for Eric and Selim, who I'm sure find that hard to believe.) But his research is often on target.
  
  
• Amir Leshem, previously at Metalink, joins the faculty at the new School of Engineering of Bar-Ilan University. Research will include signal processing, communications, and optics.
  
  
• For job ads and the DSL Prime event code, see the DSL Prime website.

Wall Street

• Anton Wahlman at Needham has written an extraordinary analysis of why a smart provider will make more money on the Internet connectivity than on high-priced proprietary content. I'll be excerpting it in a future issue, but meanwhile he's allowed me to forward a copy if you ask.
  
  
• CEOs will be in New York next week for the Needham conference: Covad's Charlie Hoffman, Carrier Access's Roger Koenig, MIPS' John Bourgoin, Netopia's Alan Lefkof, Terayon's Zaki Rakib, Transmeta's Matthew R. Perry (without a penguin), Tut Systems' Salvatore D'Auria, Zhone's Mory Ejabat, ARRIS's Robert Stanzione and many others. Probably not too late for investors to check with Vik Grover for admission.
  
  
• Cody Willard of thestreet.com made AFC his top pick, pointing to the upside of their FTTH win at Verizon. Confirms that it was right to go after that contract at virtually any cost, because the stock price benefit will outweigh any short term losses on the bid. The rumored $300 is probably more than the first generation of gear is costing, but that will come down rapidly.

Copyright 2004 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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