Verizon Turns On ADSL2+ To 1/3

Verizon has been installing ADSL2+ in most new equipment for years but not offering speeds above 6 megabits because only a small fraction of their 30M lines were covered. They now are offering 10-15 megabit down to about 4M customers for about $55 to about $70/month. Given that the majority of customers are beyond the 7,000 foot cutoffs for the 10-15 meg service, that means they have ADSL2+ to about a third of the network. Most of the rest are behind remote terminals or connected to DSLAMS 5-12 years old, neither of which are scheduled for volume upgrades.
Experience from Britain, France and the UK has been that almost no one gets the 20 & 24 megabits possible with ADSL2+ and only a minority can even get 10 megabits down. DSM has improved things some, especially for the lines that were marginal for any given speed, and minor improvements in the chips keep improving performance. Current state of the art is that 15-25 megabits down is typical about half a mile from the DSLAM, less than 10 megabits from around a mile and a half. These are realistic averages, but there's an enormous difference from home to home and office to office. Your speed may well be different than the suggested averages. For example, I heard today of a customer at 5400 feet getting 21 megabits.
Rob Pegoraro at the Washington Post tested the addresses of 13 friends and co-workers across the District and Alexandria at Verizon's site, and none came up as eligible for its fastest DSL. Six could get only the second-slowest tier of DSL, with downloads of 1.5 to 3 Mbps. Another six qualified for Verizon's 4- to 7-Mbps DSL. One could get FiOS, but none could get the new 10-15 megabit tiers. That may be a glitch, but overall fewer than 1 in 6 lines can get the higher speeds.
I guess every little bit helps as cable is pulling far ahead, with speeds that start at 10 meg for less than Verizon's new offering and usually go to (overpriced) 50 meg. Tony Werner of Comcast tells me to watch for a rapid rollout of 20 meg upstream cable, which DSL can't come close to except from the basement.
John Schommer tells me Verizon has been careful about oversubscription so there should very rarely be congestion-related speed drops. Schomer came to Verizon with the GTE purchase and now has moved up to Dir - Broadband Product Development. GTE was ahead of Verizon at the time of the takeover and Ivan's team was smart enough to take advantage. Bobbi Henson also goes back to GTE and many of the early Verizon FiOS trials were in Texas GTE territory.
Here's the press release:
Verizon High Speed Internet Now Available at 10 to 15 Megabits per Second
New Copper-Based Broadband Tier More Than Doubles Existing Maximum Download Speeds for Consumers and Small Businesses
News Release ShareThis
NEW YORK – August 30, 2010 –
Verizon's High Speed Internet entered a new realm on Monday (Aug. 30) with the introduction of a 10 to 15 megabits-per-second (Mbps) downstream and 1 Mbps upstream* service initially available to more than 4 million households and small businesses.
"Consumers and small businesses everywhere have a need for speed," said Shawn Strickland, Verizon's vice president of consumer strategy. "With our new 10 to 15 Mbps speed tier, downloading files, photos and other content will be faster, plus our High Speed Internet customers will have peace of mind because our service is backed by a 30-day money-back guarantee policy."
The new 10 to 15 Mbps speed tier is the latest addition to Verizon's existing suite of High Speed Internet speeds - 4 to 7 Mbps, 1.5 to 3 Mbps' and 768 kilobits per second to 1 Mbps downstream for consumers, as well as similar business packages. All HSI services include a dedicated connection to the home or business over the company's copper network, so service won't slow down when neighbors are online at the same time.
"This new, faster Verizon High Speed Internet service has the potential to attract business and residential customers who value the affordability, reliability, and everyday performance of their broadband connection," said Amy Lind, consumer broadband research manager for the global technology market intelligence firm IDC.
"One of the issues with cable Internet is that its bandwidth capacity is shared by multiple users at a node, so the speed a customer actually receives can vary considerably depending on how many cable customers are online simultaneously," said Lind. "DSL-based High Speed Internet, on the other hand, offers each end user a dedicated connection, so its performance is more consistent all the time."
Pricing for the 10 to 15Mbps/1 Mbps service is $49.99 per month for residential customers with voice service from Verizon, and $59.99 per month for those without voice service. Small-business pricing for the new, higher speed tier begins at $89.99 per month as a stand alone service with a two-year agreement, and $99.99 per month with no term contract. Equipment fees and other charges apply.
For new residential customers, consumer bundles of Verizon Freedom Essentials that include unlimited nationwide calling, voice mail, popular calling features and 10 to 15 Mbps/1 Mbps HSI service begin at $69.99 monthly.** Comparable packages are available to small and medium-sized businesses, beginning at $84.99 monthly** for 10 to 15 Mbps/1Mbps HSI service and unlimited nationwide calling.Written by Dave Burstein


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Steve Wozniak: Use A Verizon MiFi As Backup For Your IPhone

Apple founder Steve Wozniak loves his iPhone but recommends carrying "a second Verizon phone for backup” or to “carry a MiFi and rely on Skype on your iPhone,” he told dealer Henk van Ess when ordering a Mifi 2352 to use in Europe. Woz was angry after getting a $7,000 bill from AT&T for a half day's use of his iPhone, especially because he was supposed to be on an international unlimited plan.
Woz wrote "If you can afford it, carry a second Verizon phone for backup. Another option is to carry a Verizon mifi and rely on Skype on your iPhone. I have used this mifi technique to rescue my own, and others’, iPhones on occasion. If you buy a Verizon Palm Pre, you get free mifi on it so that is possible the best ‘compromise’ solution, to carry a Verizon Palm Pre along with your AT&T iPhone 4. ... I was in Germany 1 year ago for the World Segway Polo championships and after half a day got notified that I had a $7000 bill for data.
I called AT&T’s customer support and told them that I always had an international plan as I travel a lot and it must have accidentally been removed when I bought my iPhone (3 GS ?)."
In particular, "They keep trying to take my unlimited plans back when they think I’m not looking. I was expecting them to do this....I went to the AT&T store and they swore up and down that I would not lose my plans and they knew what they were talking about. ...
I’ve heard of that sort of problem countless times, from friends and in the press. I had done everything a person could have done to be safe about this, but they still tried to take my plan away behind my back, figuring I wouldn’t notice it for months."


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Dado Chops 20% As ADSL Falters At Ikanos

Ikanos wrote down $12.9M of ADSL chips. Sales Q3 will be down 22% or more from $55.6M in Q2. 20% of employees are on the way out. Dado Banatao, legendary chip entrepreneur now in control of the company, has brought in new management from SiRF, another Tallwood VC portfolio company.
Dado is now a VC looking for a way out of a troubled investment. He pointed out on the call that "VDSL is a growth segment." He sees the future of the company as highly differentiated next generation products. He expects revenue from bonded DSL in 2011, with both the U.S. and Asia interested. Dado claimed "Our vectoring is beautiful compared to our competition," but like then-CEO Mike Gulett he did not provide enough details to confirm that. Dado doesn't expect vectoring out of the lab until 2012.
New CFO Dennis Bencala is blunt."ADSL is a declining market. We have decided not to participate in RFPs that do not meet our requirement for margins." That's possibly true on the CO side, but most of the 5.8M new broadband customers in China needed ADSL modems.
China's adding fiber, but they will require millions of DSL chips every quarter for a long time.
John Quigley, who joined in June, will take over as CEO and Dado will remain in charge for Tallwood Capital. Michael Kelly and Jim Murphy are also coming from SiRF.
October in Paris at the BBWF, Ikanos will be joined on a panel by AT&T, Swisscom, and Alcatel. Good time to get more answers.Written by Dave Burstein

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Get Real: Bring Down the Price of Rural Internet Backhaul

Everyone agreed. It’s time to bring down the cost of rural backhaul where its exorbitant. When I went to the OPASTCO meeting of rural telcos, their leader, John Rose, told me this was a crucial issue for them and that “OPASTCO would be at the FCC every day to get this done.” I got the message.

Last September, the broadband plan presentation to the commissioners pointed out these excessive backhaul costs were 25%-40% of the problem. I made a bad mistake not moving on this immediately because I didn’t understand the issue. If I had, hundreds of thousands of homes would be connected by now and prices across rural America would be falling. And it wouldn’t require a penny of public money.

Stupid. So I’ve asked the wireline bureau to use special access where wholesale Internet connections cost more than 3x the national average.

We have an open proceeding called special access with enough of a record that we can come to a decision any time — even next week. Internet connectivity costs $5-15/megabit in most of the country, but far too many rural carriers have to pay prices of $100 and even $200/megabit. This came up time and again at the broadband plan workshops.

The explanation is simple: in many areas, there are only one or two fiber connections to the net and they can charge monopoly-like prices. It costs little more to deliver a 1 gigabit backhaul connection in the most remote part of the country, as long as fiber is in place. Fiber is in place to phone company offices almost everywhere. It was paid for decades ago in telephone rates and is typically fully depreciated. Most areas have spare capacity and dark fiber; for others the cost of upgrading with WDM gear is paid for in a few months.

This is a classic market failure. So I’ve asked the wireline bureau to immediately draft regualtions incorporating these principles recommended by the broadband planners.

1) If the price for wholesale Internet connectivity in any area is more than three times the national average, there is a rebuttable presumption of market failure. If there are special high costs – like a requirement to run more fiber – then the case needs to be examined individually.

2) Where there is apparent market failure, we will ask all the parties to engage in 90 days of mediation to come to an equitable rate. This will resolve most cases without any formal regulation.

3) After 90 days, if no agreement is reached, we will ask either the wireline bureau or an administrative law judge to set a rate based on the evidence. Because the results of a proceeding like that are unpredictable, I expect most parties will reach an agreement and avoid the process.

4) Anyone who receives a reduced rate under this program must file a simple form every six months for the first two years and every year thereafter. It will report the availability, pricing and take rates for broadband in their territory.

—————————

The best thing about using special access is it will dramatically reduce Universal service costs. Rural carriers getting reduced rates will be able to reduce costs with less expensive IP transit and therefore will need less of a subsidy. The schools, libraries, and health clinics supported by universal service will save money because their bandwidth costs will go down as well.

The right amount of regulation is as little as practical but no less. This is natural.On August 18, 2010, in Jules, by notjulius


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Company Behind MagicJack to Banish Calling Costs

NEW YORK (AP) — The company behind the magicJack, the Internet phone gadget heavily advertised on television, has another trick up its sleeve: free phone calls from computers, smartphones and iPads.

The cost of phone calls routed over the Internet has been on a long slide. There are already a multitude of programs that allow free calling between computers, and some that allow free, but short, calls to regular phone numbers. Another alternative, Google Voice, provides "free" calls to the U.S. and Canada, but you need a phone to use it, and if you're using a cell phone, it uses up minutes.

MagicTalk would go one better by eliminating fees for calling landline and cell phones in the U.S. and Canada, with no time limits on the calls.

The software will be available next week for Windows and Mac computers. Versions for the iPhone, iPad, BlackBerry and Android phones will follow in September or October, said Dan Borislow, the CEO of VocalTec Communications Ltd.

Each magicTalk user gets a phone number that's associated with the software. Users will also be able to move their existing phone numbers to the service, for a fee, a feature that will be extended to magicJack users soon as well.

The reason the calls can be free is that VocalTec operates as a phone company, so it can charge other phone companies for calls placed to magicTalk and magicJack numbers. It also charges its users who dial phone numbers abroad.

Still, magicTalk will likely have slimmer profit margins than magicJack, which costs $40 and comes with a year of free calling in the U.S. and Canada (an extra year costs $20).

Although magicTalk calls won't be limited in duration, Borislow said it's not intended for nonstop calls around the clock. The company hasn't quite decided if the smartphone versions will run over "3G" cellular broadband or if it will be restricted to Wi-Fi for better sound quality.

Borislow said magicTalk won't be advertised on TV as the magicJack has been, nearly unavoidably. Slightly bigger than a matchbox, the magicJack plugs into a computer's USB port. A regular home phone can be plugged into it. MagicJack then routes the calls over the computer's Internet connection.

Borislow said the company is working on a standalone version of the magicJack, one that wouldn't need to be connected to a computer. That would make it similar to the Internet phone adapters sold by Vonage Holdings Corp. and some other companies.

The magicJack's sound quality can be shaky, and not all users are happy with it. In a few tests with magicTalk, however, the sound quality was excellent, even on an international call.

In January, Borislow showed off another prospective second act for the company: a small device that would connect wirelessly to cell phones in the home and route their calls over the Internet, without costing the user any minutes.

It was an audacious idea, because the devices used wireless spectrum owned by phone companies, who weren't likely to look kindly on gadgets that allowed their customers to call for free. The phone companies have their own devices that extend a wireless signal inside a home, known as "femtocells," and charge for their use.

Borislow said plans for the device are now on hold. The device had to use low signal power levels to get around legal restrictions on the use of licensed spectrum, but that also shortened the range and reduced sound quality. He's now looking for a carrier partner that would allow him to turn the power up.

Borislow launched the magicJack as the founder of YMax Corp., which was based in Palm Beach, Fla. It was privately held until July, when it merged with VocalTec, an Israeli company listed on the Nasdaq.

Formally, VocalTec was the acquirer, but in reality, YMax's owners contributed the majority of the equity and were left in control. This means shares of the company behind the magicJack are now publicly traded. It has market capitalization of about $300 million, and the combined company expects to have $110 million to $125 million in revenue this year.

VocalTec was the first company to release commercial PC-to-PC calling software, which it called Internet Phone, in 1995. However, many competitors soon followed, and the company wasn't able to parlay its technology into a success of the kind enjoyed by Skype SA, and even Skype doesn't make much money from it. More recently, VocalTec has been selling Internet calling services to businesses.By Peter Svensson, AP Technology WriterMonday, August 16, 2010

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Australia's Gigabit: Cheapest Upgrade In History

Australian Minister Stephen Conroy announced the National Broadband Network would offer speeds of 1 gigabit without spending a penny more of capex. Sounds like the usual politician's promise. The NBN is a huge issue in the election in 8 days. The opposition wants to kill the $43B project as too expensive; the government warns that a vote against them will condemn Australians to a second rate Internet for a decade or more. Both are right.
Conroy wasn't lying. The shared 2.4 gig down, 1.2 gig up GPON Mike Quigley has chosen can in fact deliver a gigabit to the home - as along as your neighbors aren't doing much on the Internet. If three of the 32-64 users on a node want a gigabit, it can't deliver. Today, so few web services deliver even 100 megabits I'd guess you could get the 800+ megabits gigabit 95% or even 98% of the time. Even in five years, likely traffic patterns would allow actual speeds of 400 megabits or more most of the time. (Assuming GPON's shared bandwidth can be efficiently divided, which hasn't even been proven in the lab.)
The capital cost to the Australian taxpayer will be almost the same because the OLT in the exchange is the same standard Alcatel GPON. It will require more robust switches and routers from the exchange to the Internet peering point at modest expense.The OLT in the home may be slightly more expensive, but the chipmakers are making progress integrating the silicon. Charging the customers who want the gigabit $5-10 more per month would easily cover the increased operations costs.
We've learned that in practice even dramatically faster speeds produce surprisingly modest increases in total demand. HD TV at 3-8 megabits is the only high volume use. It streams at the same rate whether the connection is 10 megabits or 800 megabits. It's a joy to get your 150 megabit Microsoft update in seconds with high speeds, but you don't do more updates because of it.
Hong Kong Broadband Network is the only carrier I know doing customer experiments with a gig over GPON and hasn't discussed the results yet.
The efficiency of sharing at high speeds over GPON is unproven. I'd very much like to hear, probably off the record, from any well-informed engineer.
10GPON, four times faster, was demonstrated a few months ago by Huawei and Verizon. Commercial units are years away however. Active Ethernet inexpensively provides a full gigabit. It's being deployed at that speed in Sweden, Singapore, and the Vermont Tel network I consult with. It requires a strand to every home and more lasers, but is a simpler network to manage at high speeds.
For any fiber network built in 2011 or later, the natural speed is a gigabit.
Written by Dave Burstein


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Pace buys U.S. broadband company 2Wire

LONDON (Reuters) - Pace (PIC.L: Quote, Profile, Research), the world's largest set-top box maker, has agreed to buy U.S. broadband technology firm 2Wire for $475 million (306.6 million pounds) to broaden its customer base beyond cable and satellite into the Internet TV market.
The British company, which overtook Motorola (MOT.N: Quote, Profile, Research) to claim the top spot in May, said 2Wire had an established relationship with tier-one North American telecoms providers including AT&T (T.N: Quote, Profile, Research), and the deal would catapult it to number three in the global telecommunications home-hub market.
Neil Gaydon, chief executive of Pace, said: "We have built a strong position in the U.S. with cable and satellite operators and 2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of U.S. operator requirements."
2Wire is owned by a consortium including Alcatel-Lucent (ALUA.PA: Quote, Profile, Research), AT&T, Telmex TLX.SN and Oak Investment Partners.
Yorkshire-based Pace, which makes set-top boxes for BSkyB (BSY.L: Quote, Profile, Research), Canal+ (CNLP.PA: Quote, Profile, Research), and Comcast (CMCSA.O: Quote, Profile, Research), also on Monday reported a 46 percent rise in first-half pretax profit, and said it was close to achieving its 8 percent operating-margin target.
The company posted pretax profit of 45.4 million pounds on 21 percent higher revenue of 635.2 million pounds in the six months to end-June.
It said given its strong market position and ongoing demand for digital television, it should deliver mid-single digit revenue growth over the medium term.
(Reporting by Paul Sandle; Editing by Sharon Lindores)


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