DSL Prime: Sony's Unlimited P2P Deal

Now that content from Sony (and the BBC too) is finally available for broadband, surely residential users will be allowed true fiber speeds?

by Dave Burstein of DSL Prime and Future of TV [August 29, 2005]

"Five years from now you're going to be saying Verizon was really right putting in fiber. It's going to revolutionize the industry."
—Larry Babbio, Verizon (Reuters)

Babbio's fiber will sweep the field, based on Jim Odum's experience. "The provider with the best pipe, closest to the customer, usually wins." Odom, CEO of Martin Group, is working with a dozen of the smaller telcos that began fiber deployment before Verizon, often with remarkable results.

One telco talks of 60 percent take rates, adding, "Whoever is first bringing fiber to a community is likely to sweep the market." Good omens for Verizon, I believe, although the early experience of Verizon's next 12 months is likely to have more problems (and lower take rates) than people expect. Randall at SBC is already wondering whether he'll have to drop Lightspeed and go fiber all the way, in an interview with Leslie Cauley read by everyone in the industry.

A key chip executive confirms DSL continues to grow worldwide at a rapid rate. Europe is booming, China growing rapidly, and North America slightly disappointing. Irrational exuberance is China seems to be tempered, with the equipment inventory working down. Steve Nozik of Dell'oro reports DSLAM/DLC ports shipped rose 63 percent in Asia compared a weak prior quarter, 18 percent in Europe, and very little in North America.

Another DSL Prime is due ASAP, focusing on DC mythology. Meanwhile, glad to have new employment ads from Calix and Carrier Access. It's still mean out there for too many. For job ads, visit the DSL Prime website.

Sony licenses everything to PlayLouder
15 percent of world's commercial music included with ISP fee
Use Bit Torrent, Kazaa, or anything else. Download any Sony/BMG owned song from anywhere. Be completely legal and licensed, with a modest fee paid automatically by your ISP. Unlike the Yahoo/SBC, Real and similar services, you can do anything you want with the music except upload it to users of other networks. PlayLouder, an established UK music service, will monitor traffic using Audible Magic and covers the payment to Sony out of their marketing budget. The (unreported) fee is low enough to fit on the marketing budget of a reasonably competitive ISP fee.

Cory Doctorow raves, "This is such stupendously good news that I frankly didn't believe it. This is what EFF has been calling for for years now, a Voluntary Collective Licensing Scheme that will break the file-sharing deadlock and give the majority of Internet users who file-share today the chance to get legit while compensating rights holders. … I'm prepared to say that this is the best thing to happen to the copyfight all year—maybe all century."

Cory himself is proof downloading doesn't prevent commercial success. His extraordinary novel, Down and Out in The Magic Kingdom, is a free download but selling well. I bought a copy.

PlayLouder explains, "Basically, the deal is this—you'd pay 20-odd quid per month for top quality broadband, about the same as BT, and with that you'll have filesharing access to the back-catalogues and new material of indie like Beggars, XL, V2, Ninja and more. That's not paying 79p per download or anything, it's the same price every single month. PLUS PlayLouder MSP has announced that Sony BMG has just come on board, for all your Beyonce, Presley, Outkast, Bowie, George Michael, Clash, and Jamiroquai needs. Nice."

PlayLouder also has deals with British song publishing agency MCPS-PRS and leading indie record labels in the Association of Independent Music. Sarah Deutsch of Verizon has been besieging the music companies for a deal like this, with a government mandated compulsory license as a logical step if the record companies resist. The numbers are attractive: $2 per month per U.S. broadband user would soon move $1 billion to the record companies.

Director Grahame Davies co-founded Demon Internet and managed Easynet for six years. As Chairman of the London Internet Exchange, he knows peering from the inside, including that the cost of moving traffic to his peers is less than $5/megabit/month, or about a sixth of the cost of Internet transit on the London market. That cost decline and the serverless nature of P2P traffic is what makes deals like this finally practical. The network costs are so low (once the consumer has a DSL line) that the service is mostly profit to the rights holder.

"The ISP says that it is negotiating with other major labels and hopes they'll come into the fold soon. They'd be crazy not to: this is free money, just for letting music fans go on doing what music fans have always done," Doctorow notes at BoingBoing. "PlayLouder MSP is live at the end of September if their schedule holds. I'm subscribing," he adds, as he waits for MCA and Buddy Holly to also be available.

Conexant's big VDSL2 win at Alcatel
?$40 million for SBC Lightspeed alone
Ikanos was first with VDSL2, but it's clearly now a horse race as Conexant wins the crucial sockets at Alcatel North America and presumably SBC's Project Lightspeed. That contract is large enough to turn around Conexant's Globespan operation, ironically after Armando Geday and other veterans have been displaced. Close cooperation between Globespan's VDSL VP Bernard Debbasch and SBC's Tom Starr in the T1E1.4 standards committee presumably helped the company understand the customer's needs.

I believe Alcatel is supplying Belgacom with Ikanos chips. Presumably Ikanos has been getting a premium price, while Globespan had spoken of delivering VDSL2 at an ADSL2 price. Carriers tell me Alcatel is offering them the choice of which chip to go with. The very limited field experience is making the decision hard, especially because the natural tendency when the companies keep information so close is to assume the results are discouraging.

Copyright 2005 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.