DSL Prime: Cable Wants a Worldwide Deal

Cable companies seek to standardize the set top box. Some CEOs face charges with substantial evidence, while Congress appears ready to pass a law to let others go free.

by Dave Burstein of DSL Prime and Future of TV [June 23, 2008]

"As the European Union Telecom and Convergence Minister, I want to congratulate Korea for the number of broadband subscribers who get above 100 megabytes per second internet connectivity but we are working hard in Europe to catch-up!"
—Vivienne Reding in Seoul

Dick Green, the head of CableLabs, came to Las Vegas and urged the assembled telcos to work with CableLabs on joint standards. It's an extraordinary opportunity because CableLabs Tru2Way can save literally billions of dollars on set tops. Sony and Panasonic are already building television sets that won't require a set top. (below)

The Two Henrys, Nicholas and Samueli, brilliant engineers, almost became "The Fathers of DSL," but in 1993 their CAP design lost the "DSL Olympics." Instead, 200,000,000 people connect to the net using DMT. The Henrys took their CAP/QAM technologies and defined the cable modem. Their company, Broadcom also produced early VDSL chips, fast and gigabit Ethernet, Bluetooth, 802.11 and enough other breakthroughs to make both men billionaires. Samueli donated $30 million to UCLA, his old school, and hundreds of millions to other charities. They have now been charged with $2 billion in options fraud. The evidence is substantial [.pdf].

Ed Whitacre is a hero to many, risking jail by working in secret to provide information to the U.S. Government without a warrant. Most people believe security requires extraordinary measures like that, even if they are clearly illegal. George Bush has thrown all his power behind a law giving retroactive immunity to telco executives for just about anything they did at the government's request. The word is now the deal has been cut, and a law is about to pass Congress protecting telco execs for whatever it is they did. Joe Nacchio is the only known telco leader in the U.S. to ask for legal authorization. David Isenberg and others are recommending you call your congresscritter ASAP because the vote may be as soon as tomorrow. Takeaway: In the real world, since before 9/11, the U.S.—and presumably most other governments—are monitoring any phone call or internet connection they choose to.

Jennie finished writing Web Video: Making It Great, Getting it Noticed which Peachpit is publishing on July 28. If you work in web video, or are just curious, I think you'll like our book (I helped.) Loaded with practical stuff and inside information about the industry. Jennie and I will happily autograph your copy. I'll go further and personally refund the cost to any DSL Prime reader who orders from Amazon in June or July and doesn't find the book interesting or useful. Jennie did a great job.

Congratulations to Commander Sulu on his coming wedding.

Reporters
The item below apparently had a serious mistake. Apparent Error in DSL Prime. Time Warner Cable CEO Glenn Britt denies that Time Warner Cable New York is for sale. I believe his denial and have withdrawn the item. I had two sources, both credible, both believe Britt's denial. I'm checking back where things went wrong. My best guess is an investment banker is looking to generate a deal without the company's involvement, but I haven't confirmed that.

Some stories to watch:

• Time Warner Cable New York City, one of the premier cable properties in the world, is being shopped around wall street. TWC needs to pay $9 billion to the parent Time Warner as part of the breakup, and the banks have insisted TWC quickly repay the loan that requires. The price they are asking (over $10 billion, I hear) is very high unless the Dolans are crazy, so my guess is they won't find a buyer and will have to find another source of cash.
  
  
• Vodafone is expected to close the purchase of Tiscali (UK and perhaps Italy) and add a million more DSL subscribers. With Arcor and growth in Spain, Vodafone is likely to become the largest broadband carrier in Europe other than the incumbent telcos. They may cut an interesting backhaul deal with Carphone to share the build.
  
  
• Iliad/Free will also be around 4 million subscribers after buying Telecom Italia Alice France. points out that several hundred million in tax credits reduce the price per customer to 550 euros, still pretty high but less than the other reports. (via Fiberevolution)
  
  
• Verizon's FIOS build is going through 2014, they've promised as part of the universal service commitment to New York City, but Mark Wegleitner is talking about doing some form of cheaper DSL after 2010 for others. I hope the Reuters report is just an idle comment, not a plan to provide a second rate internet to one-third their subscribers.
  
  
• The "Seoul Declaration" [.pdf] from the civil society group is setting strong, important public principles. I'm not hopeful the official Minister's statement will be as good. Ars Technica broke the story.
  
  
• Kevin Martin called for ending USF funding for telephony and moving it all to broadband at Walt's and Kara's "All Things D" conference. He almost surely will back away from his remarks, but it's the right trend. It's now cheaper to provide everyone broadband and VoIP than to serve the same people with the traditional PSTN.
  
  
• Adtran's new VDSL 1100 remote terminal is smaller, quieter, and fits right in to AT&T's U-Verse build. Look for them to sell large volumes. AT&T's latest tiff with Echostar suggests they've decide to do their own video to most of their territory. Doing so would require a heck of a lot of boxes like this.

Common Sense
Canada: If you really want competition, simply require it. One third of the spectrum that Canada is auctioning is off-limits to incumbents. The Honourable Jim Prentice, Minister of Industry, took a simple step. "With the government's goals of better service and more choice for consumers and business, 40 megahertz (MHz) of AWS spectrum has been set aside exclusively for new entrants to bid on. Another 65 MHz of spectrum is available to all bidders, for a total of 105 Mhz." Despite that limit, the auction raised far more than expected.

U.K.: Ed Richards insisted on as least four competitors before deregulating BT in an exchange. That's a sensible minimum based on experience around the world. The Canadians and the French have decided they need at least four in wireless, and the Koreans added Powercomm as the fourth in broadband. The Canadians are falling badly in broadband ratings because the cable and DSL companies have found a way to raise prices, much easier with only two major choices.

Copyright 2008 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.