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FEATURED TOPICDigital Transition -The term "Digital Transition" describes the process all organizations must go through in the 21st Century, as they leverage new technologies that provide new options for Applications, Equipment, Processes, and Networks that make them more effective. In contrast, the term "Municipal Wireless" is limiting. It puts the network technology ahead of the application and process changes that drive the business case. ORIENTATION |
Fiber = Economic Development
(I have to say, the fiber pictures are way, way cooler than the wireless ones ...WOW)... Back at the Broadband Properties Summit 08 in Dallas two weeks ago ... Joe Savage, President, Fiber-to-the-Home Council, introduced the speaker on the topic of this session: "FTTH Means Economic Growth for Your Town" Dan Rogers, the President of the Economic Development Corporation of Kendall County, Texas (this is a picturesque rural county in the Texas Hill Country, just northwest of San Antonio). Dan Rogers, Pres, Eco Dev Corp, Kendall County, TX Kendall County, whose County Seat is the charming little burg of Boerne, and erstwhile potential wireless city (see Cisco Puts Its Best Foot Forward, Shows Leadership from November 8, 2006), is growing rapidly and is predicted to have a population of 50,000 by 2020 (which gives you an idea of the remaining rural quality of the county - very pretty indeed). Dan described the value of broadband to his Eco Dev strategy, and all I can conclude is that he has struck up a very healthy relationship with Guadalupe Valley Telecommunications Cooperative, the resident telephone company and a strong adherent to fiber, apparently. (such a strong backer of broadband infrastructure really, really helps an economic development strategy, I do believe). According to Dan, the key to a strong economic development strategy is to avoid being eliminated in the competition for Site Selection, when companies decide which cities they will consider for a move or expansion - make it to the Short List, and then you have a chance to negotiate. This is also a good strategy when it comes to March Madness. Quality of Life is a huge component in Site Selection which helps Boerne and Kendall County. Working with the telecom and utilities also helps. Broadband has now become a critical component for site selection, and based on the relationship and partnership with GVTC, Kendall County is well positioned. It's also a good fit for the demographics: commuters in beltway communities require high speed connectivity when they get home, and having the FTTH option provides them with an opportunity to avoid commuting altogether. Dan sees this growing as the price of gas goes up. Have to agree. Connectivity is becoming the key aspect to attract/retain quality employers and residents – they want FIBER! A target market for Kendall county's economic development strategy is Medical Research - and doctors and hospitals need Fiber for X-Rays and MRIs and other high data rate graphic content. Next up, Jeff Mnick, FTTH Council member and VP Sales & Marketing, Guadalupe Valley Telecom Coop, moderated a panel discussion titled "Leading-Edge FTTH in Texas." On the panel were: 1. Trinidad Aguirre, Verizon Focus on DFW area and FTTH strategy - 100% overbuild in network, so no prioritization, as everyone gets it! FIOS TV and FIOS Internet are the two key offers. FIOS Internet FIOS TV By 2010, $18 B will have been invested in fiber (sound of eyes popping) Manufacturers and software development companies will take it to the next level. Key motivator to go to Fiber is Access Line Loss - POTS has well past being a commodity and Verizon cannot depend on its revenue contribution for the future and now, DSL is less and less satisfying - both Verizon and its customers need more speed. 2. Joey Anderson, Nortex Muenster and Valley View are the two fiber communities - both small towns of 1-2000 in size About the company: About the deployments: 3. Charlie Cano, Etex Similar in size to Nortex - highly innovative cooperative with about 18,000 access lines, spread over 1,700 sq mi in E. Texas, providing a full boat of services Started deploying FTTH about 5 years ago, and its been a learning process since then; BPON, now GPON, used all techniques to deploy, etc. Only certain areas get fiber because they have copper as well. So, have to accommodate a service offer for both technologies. Their strategy is to deploy empty conduit as neighborhoods go in, to accommodate future growth. Local content insertion is a key differentiation against the competition - local content is a big deal in small rural territories. There's is a dynamic project with long-term deployment, where broadband was the driver Q&A What about an Open Network Philosophy? Joe - (reality based) "one of the challenges is to keep the services bundled with the access - it's a reality that Open Access is coming" Posted on May 12, 2008 at 09:35 PM | Comments (0) Fiber Rules (when it comes to Capacity)
My notes from the Broadband Properties Summit 08 in Dallas two weeks ago - first batch... One of the first general sessions, researcher Mike Render welcomed the crowd of about 300 and presented new data from the Fiber to the Home Council of North America on Fiber to the Home (FTTH) deployments. Consider these facts for the fiber market in the US, as of March 2008: - 11.7 million homes passed with fiber The number and variety of services over fiber is growing: 8 million households are offered services, and 1.6 million have accepted same (that's a 20% take rate, by my math ...). As for homes offered 100 Mbs connection - the premiere fiber service level - that number has grown from 12,000 in March 2007 to 17,000 in March 2008. FTTH take rates are growing again, after dipping with the introduction of Verizon's mammoth fiber build out in 2004 - from a take rate of 41% in March 2004, the rates dipped, but are now back up to 29% in March 2008. In contract, non-RBOC competition - mostly smaller fiber providers - is much more robust, around a 52% take rate, but to be sure, that's in less competitive areas, mostly rural areas with nothing close to FTTH as competition, so some take rates can go as high as 80%. And in some areas with no competition whatsoever, ILECs that completely replace their copper with FTTH make for a 100% take rate (consequently, the 52% number may be a little skewed). Statistics can be a funny business. There's more, I just needed to catch my breath... Fiber providers are a diverse lot - of course, there are more providers out there than just Verizon, though the big V is most certainly the 800 lb. gorilla in this industry. Verizon has over 2 Million connections while the remaining 593 other providers have only 833,000 connections between them. But interest in fiber is growing: 41% of ILECs (small telecoms) surveyed indicated they are very likely to have a fiber deployment in the next five years. What do fiber projects look like? Well, 83% are "overbuild" projects, where service already exists, leaving only 17% as "Greenfield." New technologies have made it easier to deploy fiber, and cheaper too. When you focus on Master Planned Communities, you see that Brand New Developments have grown from 20% in 2004 to 80% in 2008. According to Render, the current economic "downturn" (note: there is no official Recession yet!) will negatively impact fiber deployments - housing starts have declined - inventory is starting to work off, between 7 and 12 months, so he expects we'll see a turnaround. Nevertheless, you can't dismiss the fact that the economic climate has a dampening effect on fiber world - it's a rather depressing note to end on, if you ask me ... Still, looks like Fiber is here to stay, with lots of room to grow! Great way to kick off a conference! Posted on May 12, 2008 at 08:42 PM | Comments (0) The 747 and the Helicopter
OK, listen closely ..."This is the Infinite Capacity of Fiber / FTTH..."
"This is the Ubiquitous Mobility and Utility of Wireless Broadband ..." We Need Both. I wish I could remember who used this analogy, so I could attribute it. Two weeks ago, I was at the Broadband Properties Summit 08 in Dallas, Texas - it's a good show if you can ever make it, chock full of good information, with a heavy focus on FTTH. I have to admit, as a mostly wireless-focused consultant, at times I felt a little like a fish out of water, but then, it's probably people like me that get the most out of conference like this, because I have so much to learn about fiber. I've made this argument since I launched this site 2.5 years ago: Connectivity is about BROADBAND, not about Wireless...(I've also made the argument that networks are more about METROPOLITAN REGIONS than they are about Municipalities) - thus, my ditching "municipal wireless" in exchange for "metropolitan broadband." We need wired solutions like FTTH, Cable, and DSL for reliable connectivity when we are in a fixed position, like at home or in the office. We need wireless solutions like cellular wireless (voice and/or data) and wireless broadband when we are mobile and away from our normal fixed locations. Hot Spots are a blend - really a portable solution that is not so much mobile as it is an alternative, fixed location. That said, I spend far more time on wireless than I do wired solutions, because wireless is my bread and butter. Until that changes, I'll no doubt keep spending more time on wireless. But that's no reason that we all shouldn't look at wireless and wired broadband as two equally valid and complementary technologies. Asking which is better pre-supposes that there is a certain need being filled and that they are comparable solutions to fill that need - most times, one is better than the other. Having this conversation regarding the need for both FTTH and wireless broadband at the Summit, not one or the other, I recall some people looking at me like I was crazy. But I also remember others nodding, and one expert in particular finishing my sentences for me, saying "Oh, yeah, it's like the 747 and the helicopter..." "How so?" I asked. "The 747 is hard to beat if what you need to do is move a large number of people economically and comfortably over a very long distance, say, over an ocean or between continents. The helicopter is the best solution if what you need to do is to move a small number of people or things from any one location to another, generally over a relatively short distance, irrespective of airports and runways." Huh, hard to argue with that! Similarly, there is no better network for capacity than fiber - FTTH offers nearly infinite capacity and long-term viability because of its physics. But there is no better network for mobility than wireless broadband - IMHO, Wi Fi Mesh offers a relatively low-cost wireless solution that goes up relatively quickly, then provides far more bandwidth than a cellular air card solution to far more people. What was interesting were the conversations I had about which comes first. On the one hand, a small town may opt for a FTTH solution first, because they have very poor alternatives for triple play services, and little need for mobility. But after the network is in place they may grow more interested in a Wi Fi Mesh network, because with fiber widely available, the price of Wi Fi Mesh goes down, and its utility goes up. On the other hand, another town, perhaps a little larger than the previous one, may opt for wireless broadband because they already enjoy adequate competition for triple play service, but their city government operations could benefit from more options for mobile solutions. But after the wireless mobile broadband solution is in place, the value that the community places on broadband goes up, and there may be a more compelling appreciation for the benefits of FTTH. It's a matter of priorities and at some point, after some experience is gained, its about awareness and paradigms. But in every case, we will all need BOTH THE INFINITE CAPACITY OF FTTH AND THE UBIQUITOUS MOBILITY OF WIRELESS BROADBAND, before all is said and done. Some of us will get it sooner than others. And those of us who get one, so goes my argument, are more likely to get the other sooner. OH, one more thing... A hot skillet and a fried egg .. made an impression on me ...a classic, and an inspiration for this post. Posted on May 12, 2008 at 03:45 PM | Comments (0) Full Future for Fiber - from FlatironsThis acc. to GigaOm, a website I don't read nearly enough. Said Jim Crowe, CEO of Level 3 Communications, the Internet carrier's carrier, at the recent Silicon Flatirons telecom conference, re long-term trends in communications: * Internet video use is here to stay, and will only increase going forward The GigaOm article continued: According to Crowe, between 60 and 70 percent of the IP backbone provider's traffic is currently video, a trend that he thinks will only increase, perhaps even substantially should applications like Cisco's Telepresence take off. "It's kind of a full employment act" for backbone providers, he joked. This would have been a good conference to attend, I think. This summary below echoes the analysis I began last week in my white paper On Structural Change. From the Silicon Flatirons website: The Digital Broadband Migration: Information Policy for the Next Administration The transformation of telecommunications from an analog, narrowband network optimized for voice to a digital, broadband network optimized for data traffic has created a myriad of challenges for businesses, policymakers, and academics alike. Consider that, in 2000, when then-FCC Commissioner Michael Powell coined the term "the digital broadband migration," the iPod had yet to be rolled out to consumers and Google was not yet a verb. Seven years later, the iPod has revolutionized the music industry, the iPhone is sending shock waves through the wireless world, and the Apple TV may similarly bring dramatic changes to video programming markets. In 2009, the next President will take office with an array of information policy questions demanding attention. This conference aims to underscore the challenging policy issues that will be high on any new administration's agenda. In particular, we will evaluate questions related to changing broadband and wireless markets; challenges related to protecting privacy and security; and the optimal direction for intellectual property reform. With a thoughtful array of leaders from academic, industry, and governmental circles, we believe that this conference will continue the Silicon Flatirons' tradition of encouraging "bolder thinking" in Boulder. Like its predecessors, the proceedings from this conference will be published in the next volume of the Journal on Telecommunications and High Technology Law. So, that from the academics at Univ. of Colorado at Boulder. And check this out over at Harvard Law School, where there is an actual course on all this stuff - here's the syllabus, in fact: The Web Difference - Syllabus (ever evolving). David Weinberger is the collaborator and co-teacher of the course. Of course, David is the Internet luminary - coauthor of the Cluetrain Manifesto - whose popular blog is Joho the Blog, yet another great website I don't read nearly enough of. I should go back and review that Manifesto, first published nearly nine years ago (April 1999), as no doubt it informed my thoughts On Structural Change. For that matter, I urge you to check it out at their website, here. It's hard to believe the Internet has come so far, so fast. Posted on February 13, 2008 at 06:55 PM | Comments (0) Open Access FTTH: An Alternative, Attractive RealityI'm here at the Broadband Properties Summit 2007 in Dallas. It's at the Hyatt DFW, one of those hotels embedded within the airport. Those flying in today would complain about the weather conditions, rainy and wet, but since I drove in this morning and since I'm locked in here for meetings in a series of hotel conference rooms, I'm kind of glad that it's raining and ugly outside. These conferences are more painful when it's a pretty day. Before I get into the first presentation, see this link to the Agenda for the conference as a reference on presentations and speakers. The conference kicked off with a Keynote Presentation by Matt Wenger, president of PacketFront, a company with a focus on Open Access Fiber to the Home (FTTH) projects. The title of the presentation was Developments in FTTH Business Models Around the World. With more than 200 community broadband deployments worldwide, mostly open-access FTTH, Wenger spoke from considerable experience, and offered some key insights. He spent a lot of time talking about what may be their principal case study, MalarNetCity, an open access FTTH deployment sponsored by the municipal utility in Vasteras, Sweden. There, customers have access to 15 different ISPs for broadband service, five telcos for voice, and three video service companies. That's consumer choice. Wenger put up the MalarNetCity community web portal as a model and highlighted their unique pre-sell technique. Imagine - city leaders addressed the considerable capital requirement of their network by pre-selling the FTTH development to residents, convincing each household to put up $3,500 to have fiber strung to their home. Imagine. That's a bold enough challenge to take on, even visionary, you might add. But what's incredible is that they had over 22,000 residents do just that. If I do the math correctly, that's something like $77 M in capital to finance construction of their network. They were able to implement such creative approaches as pushing that down payment through the mortgage loans of the residences, which must have been a big help. I'm still blown away by those numbers and that level of community participation. One great fringe benefit of a FTTH community with a unified set of subscribers is the LAN aspect: each subscriber gets access to 100 Mbs of intraLAN communication - and Wenger said that this local asset leads to a change in network behavior - much greater percentage of traffic is over the LAN than is over the Internet - it's more efficient. Four Key Lessons Wenger talked about four key lessons he's learned as he's built networks around the world: Triple Play Commoditization The "Goods & Services Life Cycle in a Free Market" graphic is fairly simple - a modified hump, with Average Gross Margin on the Y Axis and Time on the X Axis. Every business tries to extend Phase One Optimization, where margins rise with production levels, and Phase Two Maximization, where market dominance sees the cash roll in. But inevitably, over time Phase Three kicks in, as Competition and Commoditization take their toll and cause margins to drop. Inevitably, that is, except in many of the major US markets, where a "free market" cannot really be said to exist. Consequently, these incumbents postpone the inevitable downturn in margins that commoditization brings. With regard to profit maximization n the US, a strong argument can be made that monopoly / duopoly conditions have enabled broadband providers (telcos and cable cos) to extend their Phase Two Margin Maximization via regional dominance in voice/video, and more recently broadband services. However, now and in the future, all three of these services are coming under increasing competition as the markets mature. Wenger's experience in network building at PacketFront shows that Open Access models accelerate this trend of shrinking margins, presenting a challenge to service providers, but a boon of lower prices for consumers. Wenger explored the Open Access model, which is evolving into three commercial forms. 1. The Original model features retail customers who pay Internet Service Fees to Retail Service Providers, who in turn pay Wholesale Access Charges to a Network Owner/Operator. Other Case Studies In Denmark, a local energy company sponsored a network and used babies and the future in their marketing campaign. In The Netherlands, a community of 8,000 homes used a price promotion (free 10 Mbs for the first year) to sign up subscribers, who were then willing to pay $50/month, which included a $26/month connection fee. They managed a measly 98% take rate. The Bottom Line / Final Conclusions 1. All take rates are over 60% I'll be chewing on this idea for a while ... Posted on September 10, 2007 at 09:25 PM | Comments (0) Qwest v. Verizon on FTTHQwest: Slow is Good Enough? - Why 'Build Highways' when towns 'just need sidewalks' Here's a blog dialogue (a "blogalogue"??) I was tempted to join, but as usual, my comments ran too long to post in that type of forum, so I'm posting them here. But this is a great debate, for many reasons. Check it out and page down to the argument made by G. Poohbah, entitled The Problem is Who Decides. Poohbah then sets up an assumption that it is either Government or Big Business that decides our broadband fate. This is a flawed argument, which leaves out the impact that small businesses and entrepreneurs have on our economy. And another assumption is that fiber as the solution. When the technology is FTTH, yes, the numbers involved cut out a lot of smaller players. But wireless broadband sidesteps that issue and gets us suitable bandwidth in short order. Those critiques aside, this blog is one of the most cogent arguments I read on this list, because it goes to the heart of the matter - expect big business to act in its own interest. The fact can be put quite simply: the RBOCs want to have their cake and eat it too. They want to be deregulated so they can pick their customers and set their own prices, but they want to have government back them to get new competitors (both municipalities and small WISPs, ISPs, etc. who would work with them) to stand down so they have time to implement their strategies unimpeded. And with all their cash and political influence, RBOCs are used to getting their way. And if I were an RBOC shareholder, that would be in my short-term interest as well. But as a matter of public policy and long-term interest for all (including RBOC shareholders) there is a different perspective. The RBOCs have operated under an historical "regulatory compact," just as the electric investor-owned utilities did, wherein they received monopoly territories from the government so they could invest in networks and recover their costs and in exchange they provided quality service at affordable rates so that everyone could have service. Universal service works for all because networks get more valuable the more people join them (Metcalfe's Rule). While the Federal Telecom Act of 1996 tried to address this, it was overtaken by the advance of technology, and the intransigience of incumbent RBOCs. A key point, however, is raised at the end. While RBOCs continue to enjoy the status of effective monopoly or duopoly network access providers in many markets, they are also busy with plans to bundle content and new services to be more competitive. It is this bundling of access and content while controlling network access that creates competitive problems, in my mind. To paraphrase the words of Iowa Qwest President Max Phillips, the people that own the roads don't own the cars also, and who wants a sidewalk when you can have a superhighway? The Internet works better with the highway analogy, an Information Superhighway, than as a railroad. RBOCs have a railroad view, and they want to own the tracks as well as the trains - a good trick if you can pull it off, but long ago the government decided that it was not in the public interest for John D. Rockerfeller and Standard Oil to collude with railroads, and we should see through it today. Either RBOCs are regulated providers with open networks, and the FCC and the Supreme Court just decided they aren't, OR they're competitors that should have to compete and not be able to leverage control of Internet access granted them from their former monopoly status. But we are stuck in this transition period, where they're really neither of those two, so they try to leverage every angle that appears open to them. You got to hand it to them, they are trying to play the hand that they've been dealt. As for FTTH, building a fiber network as a capital project makes sense only if the spreadsheet says it makes sense. If the ROI is unsustainable and it can't get good financing, then local government would be taking a big risk to finance it, and that's not traditionally the way that local governments are advised to do things. Where they can find a private partner to take the risk, then it may make sense and they should be allowed to proceed. Or as in the case of Lafayette, when the public supports it, then it should go forward, for better or worse. In densely populated NY and PA, Verizon thinks it makes sense. In sparsely populated Western states, Qwest doesn't. No surprise there. I'm afraid that "forcing the phone companies" to build a FTTH network like we built the electric and phone networks, as logical an approach as that would be, won't be in the cards for Washington policy makers, however, given the direction they are going to cut RBOCs loose. An alternative that is overlooked in this discussion of FTTH is the growing number of wireless projects that will provide a good-enough, immediate solution at low risk for areas that lack coverage, by a multitude of small players - again, from that website on John D. Rockerfeller, a good quote, if in a different context: "Les petits ruisseaux font les grandes rivieres" - little streams make great rivers. Posted on August 24, 2005 at 12:20 PM | Comments (0) Louisiana: Lafayette Fiber Shows How a Muni Initiative is WonHow David beat Goliath Going straight to the source is always the best. In this article, a local paper goes in depth to describe how Lafayette was successful in taking on the big boys. This is the best, most detailed How-To-Guide article for city network wannabes that I've read in a while. I'd read this, then read it again, then go back and take notes. Posted on August 04, 2005 at 04:37 PM | Comments (0) | TrackBack Great Background on Why Lafayette Vote is SignificantUSATODAY.com - Bells dig in to dominate high-speed Internet realm In this article from January 2005, USA Today author Leslie Cauley does a good job of putting the Lafayette debate in perspective. The bottom line is that Bell companies seek to be both deregulated in treatment from state regulatory commissions and the FCC, but protected from competition by having municipalities, as potential competitors, hamstrung when they seek to build networks to compete with them. Having your cake and eating it too is a good place to be if you can make it happen. Cauley follows up with an article from July 10 Towns battle big companies to expand broadband to update the artguments and analysis. This succinct quote says a lot about why what happened yesterday in Lafayette is signficant. Carlini says the experience of Chicago and St. Louis is instructive: Trying to curry favor with riverboat operators, St. Louis' political machine imposed severe restrictions on railroad entry. Chicago, in sharp contrast, invited the railroads in. The result: Chicago flourished, thanks in large part to the influx of commerce from outside the area. St. Louis, less accessible, became a second-tier city. Carlini sees parallels with broadband. Only instead of fighting over the mode of transportation - riverboats vs. the railroads - it's about infrastructure. Says Carlini: "We're killing ourselves from a global-competitiveness standpoint so that a few companies (like BellSouth) can keep making money on an obsolete business model." Posted on July 17, 2005 at 11:12 AM | Comments (1) | TrackBack Louisiana: Public's Voice Rings Out "I want my broadband!"With turnout estimated at 12%, a full 27% of the registered voters in Lafayette actually turned out to vote yesterday. And the results? A resounding 62 percent in favor of having their city commit to a $125 million project to extend fiber to their homes, thus providing a big fat pipe for the content of the 21st Century. Dispelling any doubt about how the public feels about taking control of their destiny and taking a risk on a large public project, the vote says it all: 62% for, 38% against. The echoes of this vote are likely to be loud and long, as the politicians at state and federal levels debate whether local governments should have the right to bring broadband infrastructure to their constiuencies. The incumbent telecom and cable companies spoke loud and clear by lobbying state legislatures to keep cities out of the picture, in what may come to be deemed Round One of the Great Broadband Revolution. They said, "We have this under control, wait for us to bring broadband to you." Lafayette voters responded, saying, "No thanks, BellSouth and Cox Cable, we can't wait for you, we're going to do it ourselves." Will Lafayette's popular vote prove to be the bellwether on where this war will go, the "shot heard 'round the world" as at Lexington & Concord 230 years ago? Only time will tell, but for now, the margin of victory is compelling, and for the people of Lafayette, LA, the results hold the promise of a broadband content-filled tomorrow. Score one for local democracy! This vote puts Lafayette, LA on the map. Posted on July 17, 2005 at 10:07 AM | Comments (0) | TrackBack DSL: a "Phoney" Broadband Solution?ePrairie.com: Midwest Technology Business News In this rather harsh look at copper line-based DSL technology, author James Carlini offers a good historical perspective on DSL, but then proceeds to tear down DSL as a valid technology on which to base our Internet connectivity future. Check out this article for a good (if skeptical) review of how we got ADSL and for how it may compare to more robust, forward-looking technologies now being deployed. It's not a pretty picture, but it will make you think. It made me think and I concluded that much of what Carlini says makes sense, but everyone has an opinion, and there are two sides to every coin. Consider another way to make copper work - very high bit-rate DSL, or VDSL. See How VDSL Works in How Stuff Works for a more in-depth look at DSL and an alternate viewpoint. You'll want to read the entire article to get the full picture on the potential of VDSL. This is a bona fide resource for understanding DSL as a broadband resource. Posted on July 14, 2005 at 12:03 PM | Comments (1) | TrackBack |
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