DSL Prime: 30 Mbps Is Not Enough

If you're an RBOC looking to the future, you're rolling out 30 Mbps access right now.

by Dave Burstein of DSL Prime and Future of TV [September 9, 2004]

"SBC does not plan to give meaningful preference (in terms of bandwidth allocation) to any particular video service or video content provider. We don't plan to limit access from computers or give bandwidth preference to content."
—Michael Coe, speaking for SBC on the record.

SBC's commitment to an open network, above, may prove the most important two sentences ever published in DSL Prime. This story goes beyond business and technology, to the heart of freedom of speech. Mike Powell's finest moment was when he affirmed, "consumers should have access to their choice of legal content."

I pressed SBC for a clear statement, because the WSJ reported, "SBC and EchoStar plan to restrict the box's Internet access to just a few movie and music sites." Almar Latour, Andy Pasztor, and Peter Grant made the issue clear "Giving subscribers broad access to the Web could make it less likely they would pay extra for premium channels such as HBO and Showtime sold by Dish Network."

The same Journal article infuriated the highest levels of the FCC, I learned at the PFF Aspen conference. In the next issue of Future of TV, Jennie will report Larry Babbio's comments, including business reasons to offer the world's best choice of video on his network. Some telcos, we fear, will instead try to recreate a cable style "walled garden" through QOS and other technical mechanisms. Their technical and business planners are deaf, dumb, and blind to the fear of "media concentration," a hot issue in Rome, London, and Washington D.C.

Philadelphia has remarkable plans to build a $10 million Wi-Fi net covering the entire 113 miles of the city. Yet one more example of harnessing the low cost of today's equipment for universal service; networking the entire city fits into their public library budget. Greg Brooks wonders, "What Comcast thinks of this. Philadelphia is home turf for the company; it's hard to believe they won't fight this tooth nail, donation and lobbyist." Municipal services are often less efficient, but become very attractive when the private market doesn't step up. Boston and New York next?

Jennie and I are headed to Boston, the World Science Fiction Convention. Who better to ask about the future of television than a science fiction writer? In general, we expect to find far more truth and insight at an SF con than at either of the political conventions. Where do you think we get the ideas, did you ask?

Dismayed to hear of the tough choices facing Copper Mountain, a prime example of a well managed company that is losing out in the today's smaller market. They believed in the bell intent to "manage" their networks with BRAS, which they have mostly postponed. Best of luck also to the 150 dropped at Z-Tel, one of the most spirited of U.S. telcos. The number soon to go at AT&T and MCI will make painful reading as well. IDS/rural telco IPOs, priced at a level that assumes massive subsidy, may be coming soon—see Wall Street below for more warnings. [ed. note: See also Red Herring.]

Fortunately, job notices continue to come in, including several positions at Infineon in Munich.

Larry Babbio: 30 Megabits Isn't Enough
$15 billion ready to speed on fiber build
"We have to look out 15 and 20 years. ... That's why we are looking at bandwidth in the 30 megabit and more range in the next year or so." (emphasis added)

Babbio took my question in Aspen, with a joke about hand grenades from the audience. Everyone was surprised I began by calling it the best speech I've heard in the industry in years, but what else could I say after an eloquent call for a fiber build as rapidly as his engineering team could deliver it? Specifically, Babbio said he would ask his people if they could raise next year's 2 million homes passed to 3 million or 4 million, and that he is ready to spend $15 billion to reach most of the Verizon customers. The first $3 billion fits within Verizon's current $12 billion capex budget without stretching, because other wireline capex is down so far. Even an increase of $3 billion per year still leaves Verizon spending considerably less than in 1999-2001.

The first customers going live in Keller, Texas are enthusiastic, although most of the services are still far off. On DSL Reports, a woman offered to marry one of the first guys who got the speed, although I assume that was a joke. The project remains enormous, however, with every resource being stretched to meet the 1 million deadline for the end of 2004.

Babbio's comments, combined with what I hear from two senior bell engineers and many others, suggest that Verizon will soon change the design of the fiber network. Currently, it's BPON designed for 19 Mbps down and 5 Mbps up, with a separate dedicated wavelength for a cable style video. Ralph Ballert of SBC explained that choice to me a while back. "It was the best available on the market when we made our plans." John White, until recently key to Verizon's efforts, added separately, "BPON already is an accepted international standard. It does what we set as our goals, and is designed to hit our cost needs."

Since then, however, EPON and other Ethernet networks (EFM), have shipped millions of lines. That's mostly in Japan, but 100,000 just went to Taiwan and Utah is building in the hundreds of thousands. The IP set top boxes are well under $100, and promise more potential than the designs Verizon is first using. Switching designs while installing millions is a problem not to be underestimated, however, and would be hard to accomplish before 2006-2007.

"If anyone can build this network on that deadline, it's Verizon's Paul Lacouture," commented his peer, Qwest CTO Balan Nair. But the "DSL H_ll" experience makes me hope Verizon will take the time to do things right. The payoff from the project assumes a drop in operating expenses, and every month the methods and the equipment are getting more reliable. If the capital is available, I suspect improving the user's experience is a better place to spend it initially. Jennie and I busy imagining "the greatest video offering in the world," which will be Verizon's ultimate sales driver. More of Babbio's thoughts, including the opening of the network, in the next issue of Future of TV.

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

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