Feb 28, 2012

ACCC gives green light to Telstra separation

The Australian Competition and Consumer Commission (ACCC) has given the National Broadband Network (NBN) its tick of approval with the acceptance of Telstra’s Structural Separation Undertaking (SSU) and draft migration plan.

Australia’s number on telco submitted the SSU and draft migration plan to the ACCC in August, which commits Telstra to structurally separate by 1 July 2018. It also maps out the measures Telstra will put in place to provide transparency and equivalence in the supply of services to wholesale customers during the transition to the NBN.

ACCC chairperson, Rod Sims, said the acceptance of the SSU marked a significant milestone in the structural reform of the telecommunications sector.

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"This SSU has been the subject of extensive consultation and public discussion. The ACCC acknowledges contributions from industry, as well as the preparedness of Telstra and NBN Co to modify the undertaking in response to legitimate concerns,” he said in a statement.

The telco submitted its final SSU to the watchdog recently, to address concerns raised by the watchdog. Changes included clarification on the operation of the overarching pricing equivalence commitment, and also how wholesale customers access reference prices for regulated services. "In particular, Telstra has made substantial improvements to its interim equivalence and transparency commitments, which are intended to ensure that wholesale customers gain access to key input services on an equivalent basis to Telstra's retail business units during the transition to the National Broadband Network."

In the SSU approval document released by the ACCC, the regulator said the SSU specified a range of measures to apply to Telstra’s supply of fixed line access services to its wholesale customers.

“Of particular significance is the commitment that Telstra has given to providing equivalent outcomes for wholesale customers as are achievable by Telstra’s retail businesses.

“The inclusion of this commitment provides additional assurance that the equivalence and transparency measures will remain appropriate and effective for the duration of the migration period.

“The SSU also specifies measures that will enable the ACCC to monitor Telstra’s compliance with its various commitments.”

Telstra has also sought to renegotiate existing wholesale ADSL contracts following the watchdog’s recent interim access determination if requested by a wholesale customer. The interim wholesale price will be in place for 12 months, as a final access determination is established.

According to Sims, NBN Co and Telstra have also addressed some issues regarding commercial arrangements, with restrictions on Telstra promoting wireless services as a substitute for fibre services replaced with a requirement that it meet existing Australian consumer law requirements.

“Any subsequent amendments to the commercial arrangements that would restrict either party from competing will now be subject to ACCC oversight – this is effected by a joint undertaking that NBN Co and Telstra have given to the ACCC.”

Telstra chief executive, David Thodey, said the telco could now work with the government to finalise the processes to implement the definitive agreements.

“There are a small number of matters left to finalise with the Government, including NBN Co shareholder approval and Telstra receiving Ministerial waivers from the legislative requirement to divest our HFC network and our share in FOXTEL,” Thodey said in a statement.

“The SSU comes into force once these waivers are received,” Mr Thodey said.

Both the SSU and migration plan will become effective once the Minister has exempted Telstra from the requirement to give undertakings on its subscription television broadcasting licence and its hybrid fibre-coaxial (HFC) network.

There will be a two month period for the telco to implement interim equivalence and transparency measures before they become enforceable.Chloe Herrick (Computerworld)28 February, 2012 12:36Comments

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Apple expected to unveil iPad 3 on March 7

Apple (NASDAQ:AAPL) issued invitations to the media for an event in San Francisco next week where it is expected to release its next version of its popular iPad tablet.

The event will take place March 7 at 1 p.m. ET at the Yerba Buena Center for the Arts Theater, where Apple has held previous product launches. The invitation only says: "We have something you really have to see. And touch." However, it has been speculated for some time that the company will introduce its latest iPad in March and that it will include an LTE modem, the first LTE product for Apple. An LTE tablet could be a presage to an LTE iPhone later this year.

AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) will launch an LTE version of the iPad, according to a report in the Wall Street Journal from earlier this month. AT&T and Verizon have been the only two U.S. carriers so far to offer the iPad, though Sprint Nextel (NYSE:S) started selling the iPhone last fall.

Apple has historically held off on supporting new wireless network technologies until the networks provide ample coverage, and thus a positive user experience. Currently, Verizon's LTE network covers more than 200 million POPs and AT&T's LTE network covers more than 74 million POPs. Additionally, the iPad's larger battery and customers' penchant for using the iPad on Wi-Fi networks could have made the addition of LTE more palatable to Apple--critics have noted that LTE connections quickly burn through users' smartphone batteries. According to multiple reports the device will also have a 2048×1536 Retina Display and a faster processor.February 28, 2012 — 12:24pm ET | By Phil Goldstein

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Gigabit Internet for $70

SEBASTOPOL, CALIFORNIA—Two things set a one-block stretch of Florence Avenue apart from other American streets. One is the quirky metal sculptures planted in front of most homes; the other is the Internet traffic coursing through recently-strung fiber-optic cables on the block’s utility poles. They offer each house up to one gigabit per second in bandwidth, making this one of the fastest streets in America.

While some other cities can also brag about gigabit access, in this Sonoma County town it costs only $69.95 a month.

The service comes courtesy of Sonic.net, the18-year-old Internet provider based in the neighboring city of Santa Rosa. And Sonic even throws in two phone lines with unlimited long-distance calling when you sign up.

Despite living on one of the best broadband streets in the country, almost none of the few dozen residents on Florence Avenue bother with the highest-end gigabit service, though. And why should they? Sonic's everyday 100 Mbps fiber offering costs just $39.95 a month, the same price Sonic used to charge for its 20 Mbps DSL connections (It includes unlimited phone, too.)

Compare Sonic’s 100 Mbps price to the two better-known area options for broadband—Comcast's Xfinity Extreme 105 Mbps service runs $199.95 a month, while AT&T's U-Verse tops out at 24 Mbps for $49.95.


It's actually much faster than this
Rob Pegoraro
Gigabit access is fast—fast enough at one Sebastopol subscriber's house to perplex Ookla's Speedtest.net. The service incorrectly reported the person’s connection at a mere 134 Mbps. Downloading the current release of Ubuntu Linux didn't help, either; on two different tries, the server simply couldn’t provide the 695-megabyte file as quickly as the connection allowed.

But there was no mistaking the speed of Sonic’s system when I pulled up a YouTube clip and saw the entire video buffer instantly, even on a “mere” 100 Mbps connection.

Even better, Sonic does not place any data caps on its service.

As ISPs often note, people keep using more data; what they usually neglect to mention is that the costs of providing it have dropped dramatically. "It's reasonable to say that consumer bandwidth consumption went up,” Sonic chief executive and co-founder Dane Jasper said when I stopped in for a visit at his Santa Rosa office late last year. “But at the same time, the cost of clearing those bits keeps going down."

Wondering "why can't somebody else do this?" You're asking the right question. But you may not like the answer.

The twilight of DSL

Privately-held Sonic is an unlikely survivor. As a small digital-subscriber-line (DSL) service, one might have expected it to go extinct like most of its brethren after the Federal Communications Commission largely deregulated the DSL business.

The FCC's 2005 decision to reclassify DSL as an "information service" (PDF) came after several bruising years for upstart ISPs that saw overleveraged firms like NorthPoint Communications and Rhythms NetConnections implode, abruptly disconnecting subscribers as they tumbled into bankruptcy. When the FCC ended incumbent carriers’ obligations to sell last-mile access to competing ISPs at regulated rates, things got even worse for independent DSL providers.


One of the Patrick Amiot sculptures on Florence Avenue in Sebastopol
Chris Willis
Those that survived were stuck with a growing competition problem: they couldn't provide DSL at speeds faster than the incumbents, and they were now more expensive, too.

"We were on this dead-end street… all essentially selling the same thing," said Jasper.

One way Sonic could stand out, however, was through customer service. Its consistently high reviews on DSLReports.com speak to its success there. But with cable services getting faster, Sonic had to get more out of DSL technology if it wanted to compete. In 2008, Sonic began rolling out the faster ADSL2+, finally offering speeds competitive with cable to customers who were close enough to a phone company’s central office (prices ranged from 6 Mbps for $45 to 18 Mbps for $80).

The company increased speeds while cutting costs, taking advantage of cheaper upstream connectivity. A year later, the cost of 18 Mbps service fell to $55. Sonic, having obtained a phone service license from the California Public Utilities Commission (PUC) in 2006, added voice calling as an option. It then made voice a standard feature in 2010, with unlimited nationwide calling in a $50, 20 Mbps bundle. (That plan is now down to $39.95.)

The tradeoff for relying on ADSL2+ is limited coverage. The service's reach is fairly extensive in San Francisco but, in towns like Sebastopol and Santa Rosa, it doesn't get far outside the downtown.

Customers beyond that perimeter (about half of Sonic's less-than-50,000 subscribers, Jasper included) can only access the older, slower form of DSL that cable providers like to mock in their ads: 3-6 Mbps for $39.95 (although that's cut to $19.95 for the first year.)

If Sonic were to not just survive but succeed, it needed a plan for the future that wouldn't be tied up in somebody else's copper telephone wire. It settled on fiber.

The jump to fiber

Deploying fiber-to-the-home service is a big step. Sonic kicked off this buildout on favorable ground: a reasonably dense neighborhood in Sebastopol, a compact town of 7,397 that may be best-known as the home of tech-book publisher O'Reilly and Associates. Sonic began contacting DSL subscribers there last year with an absurd-to-resist offer: five times their current speed for the same price.

But why did Sonic also offer gigabit access at only twice the price of its 100 Mbps service? Said Jasper: Why not? "The cost differential between a customer who's connected at all and one who's connected at one gigabit [per second] is nominal." Calling the $69.95 service "a headline product," he noted one key reason for Sonic to offer it: because others can't.

The math behind Sonic's marketing is not so absurd. Once the company moves a DSL customer to fiber, it can stop renting the copper loop from the local phone company office to their home, which costs about $12 a month. From there, the company begins the countdown to recover the "sub-$500" cost to deploy fiber to that home.

"On paper, the model is viable," wrote Diffraction Analysis CEO and co-founder BenoĆ®t Felten. He noted Sonic's advantages of being able to start in customer-rich neighborhoods served by cheap overhead lines instead of more expensive to deploy underground conduit. He also emphasized the importance of getting enough customers to upgrade. "If you get in the 40 percent plus [range] it starts to look golden, and if you're in the 60 percent range,” he said, “you've built a cash printing machine."

But expanding on a much larger scale might create financing issues. "On the scale that Sonic.net is currently considering, they can self-finance,” he added, “but if it works and they want to go beyond that, they will need a lot of capital that, as far as I'm aware, they don't currently have."

Jasper confirmed the suspicion; Sonic will have to take on debt if it continues to expand—as it hopes to do so. In a few more months, he said, it will start to advertise the service; by the end of this year, Sonic aims to pass about 2,500 homes in Sebastopol with fiber, plus some 20,000 more in San Francisco's Sunset District.

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Feb 27, 2012

Google fiber edging device could help it rapidly connect homes in Kansas City to 1-Gig

Google (Nasdaq: GOOG) has developed a fiber deployment method and device that could allow it to rapidly connect homes to its 1 Gigabit network in Kansas and Missouri without having to dig trenches in the yards of subscribers, according to a patent application obtained by FierceCable.

Rather than bury fiber optic cables in yards or gardens, which Google notes in the patent application "requires significant effort and time," Google has developed a narrow edging strip similar to decorative wall molding that would conceal fiber run from demarcation points in streets to subscriber homes.

"The edging device may have decorative color or pattern on the outside surface for aesthetic purposes," Google says in the patent application, adding that "different styles of coatings may be separately available to the customers." A diagram Google includes in the application shows an edging device that is concealed at the edge of a subscriber's driveway, running from the street to an optical network terminal (ONT) attached to the side of a home.

Google began construction of its fiber network in Kansas City earlier this month, noting in a Feb. 6 blog post that it would focus initially on building a "solid fiber backbone" consisting of thousands of miles of cable. The patent application shows how it may be able to prepare homes for its ultrafast broadband service before it extends the fiber backbone to all neighborhoods in Kansas City.

"Tubing suitable for installation of air blown fiber may be installed in an edging device without embedding fiber cables in the tubing," Google states in the patent application. "Later, when the FTTx (fiber-to-the-home, or fiber-to-the-premise network) is available in the area, the fiber cables may be air blown or otherwise inserted into and guided through the tubing or the duct inside the edging device."


A diagram of Google's fiber edging strip from its patent application.

Google will challenge incumbents Time Warner Cable (NYSE: TWC) and AT&T (NYSE: T) with its 1 Gbps network, which may also include a subscription TV offering. Cable overbuilders such as Verizon (NYSE: VZ) and AT&T occasionally receive criticism for scarring the lawns of subscribers in order to offer new high-speed Internet and pay TV services. In addition to helping it quickly connect homes to its fiber network, Google's approach could help it reduce damage caused by burying cables underground. It could also allow Google to easily remove fiber cables from customer homes after it completes the pilot project in Kansas City.

"Aspects of the invention provide a low-impact, convenient, time-efficient and cost-saving optical fiber deployment technology," Google states in the patent application, which is titled "cable edging systems and methods."

The edging strips would be 5 to 7 centimeters wide, and 1 to 5 millimeters thick, depending upon the number of cables they contain, Google says in the patent. The edging strips could be pressed into the ground, placed into a slot that would be cut into the ground, or run along cracks in a driveway.

"Various locations may be selected to install the fiber-optic cable from a demarcation point to the ONT. One of the locations to install the edging device may be along the boundary line of the driveway and the lawn. Existing cracked slots in the customer's property, for example, a slot along the driveway, may be utilized to deploy the edging device," Google writes in the patent application, which was published by the U.S. Patent & Trademark Office on Dec. 29.

Google spokeswoman Jenna Wandres declined to comment on questions regarding the edging device and how it relates to the fiber rollout in Kansas City. February 27, 2012 — 8:56am ET | By Steve Donohue

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Feb 26, 2012

TDS Telecom bets on broadband, video drive up Q4 2011 revenue

Buoyed by strong gains in consumer triple play and managed business services, TDS Telecom's operating revenues increased 4 percent to $206.8 million in the fourth quarter of 2011.

TDS Telecom's parent company Telephone and Data Systems (NYSE: TDS) reported $1.3 billion in operating revenues for Q4 2011, up from $1.2 billion in Q4 2010.

For the year 2011, TDS reported $5.1 billion in operating revenues, up from $4.9 billion in 2010, while net income was $200.5 million, or $1.83 in diluted earnings per share.

"TDS increased revenues and improved profitability in 2011, despite very competitive industry environments for both U.S. Cellular and TDS Telecom," said LeRoy T. Carlson, Jr., TDS president and CEO. "Both companies are making significant investments in their networks and operational infrastructure to enhance customer experiences and improve operational efficiency."

Here's a quick breakdown of the ILEC's key metrics:

Landline Losses: During the quarter, TDS as expected lost 8,100 access lines, ending the quarter and year with 754,400 total lines.
Business Services: In the business segment, the growth engine is centered around its managedIP offerings, which it delivers via both its ILEC and CLEC divisions. ManagedIP stations during the quarter grew to 43,100 from 27,400.
Broadband and video: Although broadband service continues to be a hot seller, TDS Telecom only added 600 new customers during the quarter.
Looking into 2012, the key areas of growth will be around expanding broadband speeds and availability, business managed services and IPTV.

Leveraging emerging technologies including Fiber to the Home (FTTH) in select markets and hybrid copper/fiber VDSL2 technology, the service provider plans to increase broadband speeds in its existing markets and extend IPTV service to an additional 19 markets. What's more, the service provider said it's on track to complete a number of broadband stimulus projects to extend services in areas that were traditionally hard to serve.

It will be no less aggressive on the business side with plans to expand the hosted managed services footprint and service portfolio.

From a revenue standpoint, the service provider forecast $810-$840 million for its ILEC and CLEC operations. February 24, 2012 — 9:53am ET | By Sean Buckley

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Feb 14, 2012

FTTH/B subscribership rose to 54 million by the middle of 2011

Fiber to the Home (FTTH) may not be the universal last mile access service yet, but according to Idate, fiber-based broadband subscribers increased 54 percent to nearly 67 million worldwide by the middle of 2011.

During the six month period, the amount of buildings and homes that service providers passed with fiber networks increased over 47 percent to almost 179 million.

By taking into consideration other fiber-based technologies, including the telco's hybrid copper/fiber-based VDSL2 and the cable industry's coax/fiber-based fiber to the last amplifier (FTTLA) architectures, and FTTX+LAN, service provider's last mile fiber deployments passed 112.7 million subscribers and 361.7 million homes/businesses at the end of June 2011.

From a country perspective, Japan leads the FTTH/B market, but Idate forecasts China, whose three main service providers--China Telecom, China Mobile and China Unicom--are aggressively rolling out FTTH/B, will soon surpass it. China Telecom, for one, is moving ahead with building out a FTTH network that can handle 18 million lines with 100 Mbps capabilities in major cities.

Holding onto the number three spot was South Korea, followed by the United States, Russia, Taiwan, Hong Kong, India, Sweden and France.

Overall, Asia-Pacific made up 68.6 percent of all FTTH/B subscribers as of the end of 2011, a figure that will grow to 72.8 percent by 2015.February 14, 2012 — 11:37pm ET | By Sean Buckley

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Feb 10, 2012

Cincinnati Bell's Q4 wireline revenue gets boost from data center, fiber-based broadband

Cincinnati Bell's (NYSE: CBB) wireline story in the fourth quarter was once again buoyed by growth in its data center business and fiber-based Fioptics service.

The ILEC reported overall revenue of $365 million, versus $363 million in the fourth quarter of 2010, while operating income declined to $9 million from $65 million in the fourth quarter of 2010, due primarily to a $50 million goodwill impairment loss in the fourth quarter.

For the year, company revenue was $1.5 billion, exceeding guidance of $1.4 billion.

"In terms of both revenue and adjusted EBITDA, this has been the company's best year since 2003, and we are particularly pleased with the growth momentum of our data center business and the strong and stable performance of our legacy communications business," said Jack Cassidy, president and chief executive officer of Cincinnati Bell, in the company's earnings release.

Data Center Colocation continued to be the shining star in Cincinnati Bell's service portfolio, generating revenue of $49 million, a 21 percent increase over the last quarter of 2010. To keep up with demand, the service provider's data center unit CyrusOne added 27,000 square feet of data center space and sold 43,000 square feet, increasing the segment's utilization to 88 percent.

In 2011, Cincinnati Bell built out 124,000 square feet of additional data center space, increasing total capacity to 763,000 square feet, and sold 110,000 square feet. The service provider announced this week that it's now considering structural, capital and financial alternatives for the data center business.

Although Cincinnati Bell continues to see traditional voice revenue losses, the increasing demand for its Fioptics product suite helped drive up wireline revenues to $180 million, narrowing losses to one percent year over year. These results enabled the wireline division to achieve adjusted EBITDA margins of 49 percent in both the full year and the fourth quarter of 2011, comparable to the full year in 2010.

During the quarter, the wireline segment passed 19,000 additional homes and businesses with its Fioptics product suite, bringing the total number of premises passed with the service to 134,000. This year the service provider has set a goal of passing another 40,000 new units.

As expected, the growth of Fioptics helped offset its loss of 11,000 traditional DSL subscribers in the quarter. It added 2,000 new Fioptics entertainment subscribers in the quarter, or 12,000 during the year, driving the total base to 40,000 customers. At the end of 2011, Cincinnati Bell had 257,000 high-speed Internet subscribers.

On a yearly basis, wireline revenue declined only one percent to $732 million, while operating income and adjusted EBITDA both decreased by 2 percent to $229 million and $355 million, respectively.

Looking towards the rest of 2012, the telco has forecast $1.5 billion in overall revenue and about $530 million in adjusted EBITDA.February 10, 2012 — 10:57am ET | By Sean Buckley

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Feb 8, 2012

Alcatel-Lucent Selected by Telmex as a Key Supplier to Build Latin America's Largest and Fastest Broadband Access Network

MEXICO CITY and PARIS, Feb. 6, 2012 /PRNewswire/ -- Alcatel-Lucent (Euronext Paris and NYSE: ALU) announced the launch of one of Latin America's largest broadband access networks with Telmex. Alcatel-Lucent has been selected as a key supplier for the deployment of a superfast broadband access network based on VDSL2 and GPON technologies in Mexico, to meet growing demand for connectivity, super high-speed Internet and high-bandwidth applications, such as video-on-demand, entertainment, social networks and other services.
Telmex has engaged in an aggressive effort to expand VDSL2 and fiber-optics network coverage to connect millions of homes to super high-speed Internet services. The operator is seeking to deliver increased benefits for end users including higher speeds, increases in available bandwidth and access to a wide variety of multimedia content.
Alcatel-Lucent is Telmex's strategic supplier for this effort, providing a wide range of technology solutions, including:
The latest generation of VDSL2 broadband access technology (Very High Bit-rate Digital Subscriber Line), deployed in street cabinets throughout cities and municipalities to deliver super high-speed access.
State-of-the-art GPON (Gigabit Passive Optical Networking) technology to deliver more bandwidth to subscribers, improve the performance of current applications and prepare the network for the fast introduction of new services and applications.
Alcatel-Lucent's advanced IP/MPLS Carrier Ethernet solution, which will allow a more efficient traffic management and support the delivery of broadband services to a dramatically greater number of subscribers.
"This is a strategic project that reinforces our long-term and very successful relationship with Telmex," said Mr. Pierre Chaume, CEO of Alcatel-Lucent in Mexico. "With our advanced broadband access technologies, the new network will allow Telmex to reliably move huge amounts of traffic and multimedia content to remote areas, with better quality signals, ultra high speeds of up to 100 megabits per second per subscriber, and substantial savings in maintenance costs."Posted February 6, 2012

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