DSL Prime News Briefs

DSL industry news from North America and around the world.

by Dave Burstein of DSL Prime and Future of TV and the Web Video Summit [March 9, 2007]

E-mail

• AT&T's Jason Hillery responded about St. Louis wireless 'Regarding Esme Vos' questions that you highlighted, it is important to note that the AT&T proposal to the city is non-exclusive. Essentially, the proposal calls for the city to provide AT&T access to city light poles for the placement of Wi-Fi equipment. From there, AT&T would build and manage the network. As a non-exclusive agreement, the city is open to discuss similar agreements with other providers." Vos sees independence from the incumbent a crucial part of the new wireless movement. Others are glad to see the new net built, whomever does it.

Briefs

• Alcatel has announced layoffs in Europe outside France, but in an election year has promised no layoffs in France itself. They have also promised to add employees in India and have been hiring in China. That means when the details come out, the U.S. and Canada are likely to be hit especially hard. Russo told the U.S. Congress the U.S. would not get a disproportionate share of cutbacks in order to get the merger approved, but will find it almost impossible to honor that.
  
  
• "Occam Networks' Dov Zimring Appointed DSL Forum Consul" is the kind of press release story DSL Prime usually doesn't cover. People who want to read press releases can get them directly over the net. I'm picking it up because I haven't reported about Occam in a long while, and they continue to do remarkably well in the U.S. small telco market. There's little "news" in companies that simply sell products well and develop happy customers, a reputation Occam is earning.
  
  
• Another company DSL Prime hasn't reported on sufficiently is Ericsson, Peter Lindner and team were early to the western market with IP DSLAMs, including a remarkable small unit that can go almost anywhere. The old model fits 8 ports into the size of a book; Lindner writes they now offer "12 VDSL2 ports and the feeders are a double GigE interface. Still the smallest and right now the most powerful, especially as it has been hardened to go from -40 to +75, i.e. it is optimized for Fiber to the Curb Applications." When BT claimed you can't do DSL in small exchanges, I held up a Ericsson mini-DSLAM and asked "Why the heck not." Now, Ericsson has become one of the top DSLAM vendors as the world has caught up with the idea of IP DSLAMs. Adding Marconi, Redback, Entrisphere, and now Tandberg is costing $6 billion, but gives them a comprehensive line to go after Alcatel, Huawei, and Cisco for the major carriers.
  
  
• Nimrod Kozlovski at Oversi is finding a market for caching servers [ed. note: also see P2P Can Be Your Friend], he told me at the lively Digital Hollywood Media Summit. Asia and countries with expensive international bandwidth are the first big markets, with Europe getting more interested. Keeping p2p exchanges and frequently downloaded pages local reduces bandwidth costs dramatically, with one carrier finding almost a two-third saving. This was part of the original design of the U.S. cable networks in the @Home days, allowing them to affordably offer 10 Mbps (shared) downloads almost a decade ago. Bram Cohen of Bittorrent spoke of the efficiency of caching at Fall VON and has provided software tools. Fear of Hollywood retribution has prevented wider use of caching, yet one more example of how protecting Hollywood is raising everyone's costs.

People

• Sue O'Keefe, Publisher and before that Editor-In-Chief at Telecommunications Magazine, moves to Danny Briere's mBLAST, a media marketing and production tool building a large following. Briere's Telechoice consulting was the hub of the U.S. DSL industry in the boom days, and good to see he's growing again.
  
  
• Juan Villalonga, former head of Telefonica, is being investigated in the Sintel bankruptcy fraud case. Villalonga got the job initially from his boyhood friend, Prime Minister Jose Maria Aznar. Aznar, a former Falangist, "privatized" the company but kept close control. Villalonga's legal troubles may be related to the change in the Spanish government after 2004, as left and right in Spain continue to hate each other.

Wall Street

• Matthieu Coppet at UBS makes the provocative comment, "As France is transitioning away from DSL, the issue of the future of DSL as a viable element of the triple way should be raised, especially in the US, and alternatives analyzed." Actually, France Telecom's "fiber" is to the basement, with VDSL up the risers, but that's 10 Mbps up, 100 Mbps down and close enough to a fiber build to pose a similar threat to ADSL2+.
  
  
• Mike McCormick at Bear Stearns notes Verizon is continuing to reduce equity, targeting $2 billion in share buybacks in 2007, up from roughly $1.7 billion in 2006.
  
  
• "We view the rural telcos as cash generation and return stories," writes David Janazzo, Merrill Lynch. I hope in formulating ICC and USF policy the FCC "follows the money." It's going to shareholders, not rural customers. I wish it weren't so, but 70-90 percent of USF goes directly to investors, not "universal service." One unguarded but not inaccurate comment, "The FCC shovels money in the front door and we shovel out the back to our shareholders." Every time I write on the subject, someone attacks me for "opposing universal service." That's nonsense—I'm in favor of making sure the "universal service" money actually supports consumers, not sharks on Wall Street.

Politics

I held over most of this section, for length and fact checking. Worth noting:

• The Netherlands is struggling with KPN's plan to shut most of the exchanges, replacing them with an IP network based on neighborhood remote terminals. This is the right design today, when you only need a few big central switches for the entire network. But where does that leave competitors, for whom it's economically impractical to collocate in all the field cabinets?
• UK's OFCOM put out a report saying fiber is best, but BT isn't moving ahead. I have an interview to report with Paul Reynolds in which he says he'd be delighted to work with governments to deploy fiber.
• Kevin Martin was in North Carolina, in his "pre-campaign" for the Senate seat Liz Dole may give up next year at age 72. The Republican primary in Carolina will be dominated by very conservative voters, so expect Martin to re-emphasize issues like "indecency."
• In D.C. the smartest people in town were at David Isenberg's conference, Freedom To Connect.
• Quietly, Verizon and AT&T are making a big push to raid the Universal Service Fund, which is designed to help small rural carriers, not immensely profitable giants. They are burying the request in fine print and obscure phrases, using some of the usual fronts, and hoping to get billions in corporate welfare.
• The Missoula plan to move $1 billion+ per year net profit to AT&T in intercarrier compensation remains invisible in the press, making it possible to slip through. The Washington Post has a new telecom reporter Chuck Babington, who is new to the beat but jumping right in. WashPo just did a series on ripoffs in the U.S. agriculture reports that deserves awards; Babington would be ideal to write a similar about the $5 billion to $15 billion waste in ICC and USF.
• Milo Medin and John Muleta's revolutionary proposal to "unwire" 95 percent of the U.S. with free low speed service in exchange for spectrum went out for comment at the FCC. Think how many votes Martin could get if he pushed this through and they did North Carolina first. If that's the political solution to get another U.S. network, I'm for it.

Copyright 2007 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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