2009 - Lots of Bandwidth?

Yesterday, Comcast announced 50Mbps service in Baltimore, Chicago, Atlanta, and Fort Wayne, Indiana. The service is being offerred over upgraded DOCSIS 3.0 tiers and will initially cover only parts of the listed cities.

The company is offering two new residential tiers:

• Extreme 50, offering up to 50 Mbps of downstream speed and up to 10 Mbps of upstream speed at $139.95/month.
• Ultra, offering up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed at $62.95/month.

And two new business class tiers:

• Deluxe, offering 50 Mbps / 10 Mbps tier for $189.95/month, which includes a full suite of features and support.
• Premium, offering speeds up to 22 Mbps / 5 Mbps for only $99.95/month.

The company says they will complete upgrading these cities early next year and will continue to roll out high bandwidth (what Comcast is calling wideband ) services at a rapid pace.

With the cable companies rolling out these tier levels we should see the telcos (Verizon and AT&T especially) respond pretty quickly. If you are fortunate enough to live or work in an area where there is this kind of broadband competition 2009 should be a nice year - you'll be seeing some very nice service offerings as the cable companies and telcos go after your business.

Will Verizon Offer A Fiber To The Node Product In 2009?

Yesterday, AT&T president and chief executive of telecom operations John Stankey announced the company was on track to add its one millionth U-Verse TV subscriber sometime next week. Stankey also announced plans to make the service available to 17 million homes by the end of 2009. AT&T's U-verse Fiber To The Node (FTTN) implementation involves running fiber out to a neighborhood node and then completing the connection over a copper connection to provide voice, video and data services.

AT&T has spent considerably to develop FTTN technology and along the way has had a few false starts. Launched in 2006, Project Lightspeed (as U-verse was first called) was a $4.6 billion investment aimed to reach 19 million homes in 13 US states by 2008 using a combination of fiber optic and copper network technologies.

FTTN relies heavily on set-top box techology - you can't get the same amount of bandwidth out of a piece of copper that you can out of a piece of fiber. Bandwidth limitations are made up for using caching. Early boxes had low end 386-based processors and limited memory and storage capacity. Trials in Europe were not favorable and the company had to go back to the drawing board a few times. Costs rose - in May 2007 AT&T announced the capital expenditure of Project Lightspeed would increase from $4.6B to $6.5B and the number of homes passed would decrease to 18 million; down a million homes.

Fast forward to today - the company hung in there with the technology it looks like the bugs have been worked and they've got it scaling!

Around the same time in 2006 and in technical competition (not market since the telcom footprints do not overlap) Verizon decided to go with a Fiber To The Home (FTTH) implementation - what we know as FiOS. FiOS runs an optical fiber directly to a subscribers home to deliver voice, video and data services and I've seen total Verizon investment estimates for the product anywhere between $18 and $23 billion. Initial Verizon plans were to pass 3 million homes per year starting in 2006 until they reached approximately 60 percent of their 2006 customer footprint. Estimates have changed slightly with the Verizon sell-off of Maine, New Hampshire and Vermont to Fairpoint Communications but you get the idea.

Why only 60% of the Verizon customer footprint? It's too expensive to run fiber to every home. I'm a perfect example - I live in a rural small town in Western Massachusetts. My house is on a private 1.5 mile road with copper from Verizon buried down the road along with another 300 plus feet buried under my driveway. There are only 7 homes on my road, all with at least 150 feet of buried copper between the road and the house. I'm guessing but I would say my neighborhood is pretty low on the FiOS list. As an alternative, Verizon is offering me ADSL but..... I'd like a little more data bandwidth and what about video services - you can't do that over ADSL.

My only real option - cable service from Comcast (which I love and probably not give up even if I had a choice). Verizon does not have a voice/video/data product they can even try to sell me unless I go with a Verizon/DirecTV option and put a satellite dish on my house. I don't really want to do that.

Back in June of this year I wrote an entry titled Will Verizon Put More Gas In The Fiber Engine? In that piece I questioned whether Verizon was considering FTTN technology to reach out into the more difficult areas and better compete with the cable companies and their aggressive DOCSIS 3.0 rollout plans. With this recent announcement by AT&T showing FTTN technology works and scales I don't see how Verizon can ignore an FTTN option in neighborhoods like mine.

I'm gonna stick my neck out on this one with my first prediction for 2009 - Verizon will announce an FTTN product sometime next year.

Cable Companies Moving Fast With DOSCIS 3.0 Products and Services

There's been a lot of DOCSIS 3.0 activity recently as the cable companies move rapidly towards bandwidths of 100 Mbps and greater. In April 2007, CableLabs, the cable modem certification consortium, accelerated their certification plan time-line and we're now seeing certified products at deployable levels. Earlier time-lines did not have product reaching deployable levels until late 2008 or early 2009.

Key to this accelerated certification plan was CableLabs decision to "tier" feature availability for product manufactures with the following qualification levels:

Bronze Qualification: Supports IPv6 and Downstream Channel Bonding

Silver Qualification: Adds Advanced Encryption System (AES) and Upstream Channel Bonding

Full Qualification: All DOCSIS 3.0 Features

This tiered level of certification is expected to be dropped in early 2009, when all cable modems will need to have "Full" qualification.

Today (a little over a year later) we're seeing nice results from the accelerated time-line. Here's a couple of quotes from a recent Cable Digital News interview with Time Warner Cable president and CEO Glenn Britt:

Time Warner Cable conducted some Wideband tests in Austin, Texas, last year, "and it works fine."

While 100 Mbit/s seems to be the early sought-after speed benchmark for DOCSIS 3.0, Britt said he's seen it deliver speeds up to 200 Mbit/s, albeit in a lab setting.

Britt also said Time Warner will begin testing Docsis 3.0 in New York "later this year" and roll out DOCSIS 3.0 more widely in 2009 and 2010, "in response to demand." We'll see if Time Warner accelerates the New York City roll-out in direct competition with Verizon's New York City FiOS roll-out.

Comcast is also moving fast with DOCSIS 3.0, having launched the service in the Minneapolis area and working to have as much as 20 percent of its footprint DOCSIS 3.0 ready by year's end.

WiMax Sprint / Clearwire / Comcast / Time Warner Deal Announced

Earlier this week I wrote about it and yesterday Sprint Nextel and Clearwire Corporation announced the combination of wireless broadband divisions to form a single $14.5 billion company that will keep the name Clearwire. Also participating and throwing in a combined $3.2 billion are Intel, Google, Comcast, Time Warner Cable, Bright House Networks and Trilogy Equity Partners. Trilogy is run by John Stanton, a wireless veteran who made billions when he sold VoiceStream and Western Wireless.

Back in 2006, Mike Q and I did a podcast on WiMax, Clearwire and Clearwire's Founder Chairman Craig McCaw. Here's what we said about Clearwire back in September 2006:

Craig McCaw is a visionary, who has had an uncanny ability to predict the future of technology. WiMAX has the potential to do for broadband access what cell phones have done for telephony - replacing cable and DSL services, providing universal Internet access just about anywhere - especially for suburban and rural blackout areas.

Just like in the early 1980's Clearwire's Craig O. McCaw has been buying up licensed radio spectrum. You may not have heard of Craig but in the early 80's he recognized local cell permits being sold by the the FCC were greatly undervalued and he started bidding cellular phone licenses. He did his buying under the radar screen of the telcos and, by the time they recognized what he was doing it was basically too late - Craig had already purchased and owned licenses in most of the major markets.

Today - Clearwire, under Craig's direction, has quietly purchased enough licensed radio spectrum to build a national WiMAX network.

Craig McCaw and Clearwire have the spectrum, the money, the partners, superior wireless broadband technology when compared to services like 3G and the experience to make this work..... think about it..... Intel makes the WiMax radio components for computers, Google creates applications that can use WiMax services, Comcast, Time Warner and Brighthouse bundle WiMax products and services and market to their customers.... ..

According to an AP post yesterday:

The new company plans to make its service available to 120 million to 140 million people in the U.S. by the end of 2010, although company officials acknowledged they'll need to raise or borrow up to $2.3 billion more to make that happen. Alternatively, they said they could shrink the size of the network.

The deal has been approved by all companies but still must be approved by Clearwire shareholders and regulators. It is expected to close in the fourth quarter of this year.

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To read show notes and listen to Mike Q and my 17 minute and 20 second podcast (Sept 2006) titled WiMax - Why Not?, click here. Listen to it directly in your web browser by clicking here. If you have iTunes installed you can subscribe to our podcasts by clicking here.

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Will The Cable Companies Build a Mobile Broadband Network?

Scott Moritz wrote an interesting piece at CNNMoney/Fortune titled Comcast pins hopes on a mobile future. Cable companies Comcast and Time Warner have been negotiating with Sprint, Clearwire, Intel, and Google to launch a joint effort to build a national WiMax network. I've written here in the past about WiMax and the relationships Clearwire, Sprint and Google were building and it makes sense to see the cable companies looking at providing broadband wireless services.

We're seeing some interesting customer movement in the industry - another Fortune piece from May 1 describes Comcast's first quarter earnings, here's a couple of interesting quotes from that piece:

• Comcast lost 57,000 basic video subscribers, but added 494,000 digital cable subscribers.
• The company said 65% of video subscribers now have digital service, up from 55% a year ago, and 43% have so-called advanced services like digital video recorders or high-definition TV, up from 38% last year.
• The company also added 492,000 high-speed Internet users and 639,000 Comcast Digital Voice phone customers.

What's happening? We've got the telcos like Verizon and AT&T chasing new video customers and the cable companies like Comcast and Time Warner chasing new voice customers. Both AT&T and Verizon sell 3G wireless services - it makes sense for the cable companies to add a wireless product and it makes a lot os sense to partner with existing wireless providers like Clearwire and Sprint. JPMorgan analyst Jon Chaplin is quoted in the earlierFortune piece: By creating a joint WiMax venture, "it would cost them a fraction of what it would cost them to build out" their own network or to buy Sprint outright.

Keep watching - the deal could happen as early as this week.

Wideband - It's Not Just Broadband Anymore

On April 3, Comcast launched its first Data Over Cable Service Interface Specifications (DOCSIS) 3.0 service roll-out in the Minneapolis-Saint Paul (Twin Cities) region. The company is currently offering up to 50 Megabits per second (Mbps) downloads and 5 Mbps uploads for $149.95 per month to residents and businesses in the region. Here's a quote from a Comcast press release:

“This announcement marks the beginning of the evolution from broadband to wideband,” said Mitch Bowling, Senior Vice President and General Manager of Comcast High-Speed Internet, Comcast Cable. “Wideband is the future and it’s coming fast. We believe wideband will usher-in a new era of speed and Internet innovation for today’s digital consumers.”

The use of the term "wideband" is interesting here because (in the way it is being used by Comcast) it represents a combination of higher bandwidth along with the types of converged services higher bandwidths allow. As video, high-speed Internet and digital phone services converge we'll start to see services converge and cross devices - the same Comcast press release mentions future applications like Universal Caller ID to the TV and PC, viewable voice mail and the ability to program DVRs remotely.

These applications are just a hint of things to come as downstream and upstream bandwidths continue to rise, prices per Mbps drop and application developers take advantage. Perhaps wideband provides a better description of where we're going.


For more on DOCSIS 3.0:

Read Show Notes and listen to Mike Q and my 34 minute technical Podcast titled The Next Generation Cable Network: DOCSIS 3.0 linked here.
Listen directly in your web browser by clicking here.
Podcasts also free on iTunes.

Tiered Internet Services Coming?

On January 18, Business Week published an interesting article about a trial Time Warner’s cable division will be running in Texas later this year. Here’s a quote from the article:

Time Warner Cable plans to test a multi-tiered price system for high-speed broadband service later this year. New customers in the trial area of Beaumont, Texas, will be charged different rates based on the amount of data consumed in a month, much like a cell-phone plan charges based on minutes used.

Right now Time Warner is saying they will offer plans priced for up to 5, 10, 20, and 40 gigabytes per month, with middle-tiered plans running roughly the same amount average users currently pay (around $30 per month) for high-speed connections. The company also says they will allow customers to go over their limit but they will be billed for the extra.

This actually makes some sense from both a business and a consumer perspective – the ISP’s have always said 5% of users consume as much as 50% of network capacity downloading vast numbers of large files, such as movies, videos, and songs. I think of my parents who use little bandwidth to check email and occasionally surf the web and compare them to our house where my teenagers are often watching and uploading videos on YouTube, uploading to Flickr, downloading Mike Q and my podcasts , etc. I’m certainly not putting my kids in that top 5% but you get the idea – why are my parents paying just as much as us when we’re using a lot more bandwidth?

Companies looking to sell audio and video products on the web (NetFlix, Apple, Amazon, etc) are the ones who could ultimately get hurt. If I’ve used up my 20 gigabytes this month I’m not going to download that movie I wanted to watch on Friday night……… Here’s another piece from the article:

Another unintended consequence of tiered pricing is that it could discourage some companies from launching new services that require large bandwidth, consumer advocates say. The plans could also penalize early adopters whose heavy use of new services helps developers come up with refinements that use up less bandwidth……

According to the Business Week article, Comcast is considering a similar plan. Right now, Verizon does not appear to be.

I’ve written in the past about the Amazon Kindle eBook reader. The Kindle uses a cellular network connection to deliver books purchased by users. The cost of cellular service is bundled into the price of the book by Amazon - users do not need a cellular contract to make purchases on their Kindle. Perhaps the ISP’s should consider similar arrangements with companies selling audio and video products on the web.

Internet Traffic Control Conflict

Yesterday, at the Consumer Electronics Show in Las Vegas, Federal Communications Commission Chairman Kevin Martin announced the Commission will investigate complaints that Comcast interferes with file sharing application Internet traffic. These BitTorrent based peer-to-peer file sharing applications are commonly used to exchange large video and audio files on the Internet. Here's a quote from an Associated Press release:

A coalition of consumer groups and legal scholars asked the agency in November to stop Comcast from discriminating against certain types of data. Two groups also asked the FCC to fine the nation's No. 2 Internet provider $195,000 for every affected subscriber.

The complaint filed by Free Press is linked here.

The Associated Press release continues:

"Sure, we're going to investigate and make sure that no consumer is going to be blocked," Martin told an audience at the International Consumer Electronics Show.

In an investigation last year, The Associated Press found that Comcast in some cases hindered file sharing by subscribers who used BitTorrent, a popular file-sharing program. The findings, first reported Oct. 19, confirmed claims by users who also noticed interference with other file-sharing applications.

The key word in Martin's statement is "blocked". Here's a piece from a DSL Reports release:

Martin's choice of words is telling. If you're a network neutrality supporter eager to see someone clamp down on application throttling, you shouldn't hold your breath waiting for the FCC. The policy statement (pdf) that guides the FCC's hand in matters of network neutrality is not law, and is intentionally vague enough to allow providers to get away with anything short of an outright traffic blockade.

The final footnote in on the FCC policy statement is most interesting:

Accordingly, we are not adopting rules in this policy statement. The principles we adopt are subject to reasonable network management.

I can see both sides of this argument: On one hand it is extremely frustrating to see my broadband data connection significantly slow in the evenings - I've often wondered how much of the slowdown is due to BitTorrent based file exchange along with streaming video, audio, etc. On the other hand BitTorrent is being used by companies that sell video and game content for distribution - if I've purchased a video online I don't want my ISP throttling the speed of my downloads.

I'm hoping the FCC can step in, mediate the disagreement and set a policy that works for all - BitTorrent based file exchange is not going away.

My 2008 Top 12 Prediction List

2007 was a busy year and things do not look like they will slow down in 2008. Here's my personal top 12 predictions for the year in no particular order:

1. Apple announces new 3G iPhone at MacWorld. 3G service will be switchable to conserve battery. New iPhone will also have at least internal storage with SD Card slot.
2. First generation Google Phone will be OK but just OK as the bugs get worked out. However.......... just wait for the second generation!
3. Patriots go undefeated and win Super Bowl - how can I resist this one?!
4. Verizon northern states (Maine, Vermont and New Hamshire) sale to Fairpoint Communications is halted by one of the 3 states.
5. Google wins 700 MHz spectrum auction. First Google "telephone" trucks appear on Bay area highways.
6. Celtics win NBA championship - this one is a stretch!
7. Verizon offers 100 Mbps symmetrical data service to FiOS customers
8. Google Docs, Spreadsheet and Presenter webware become available offline.
9. Microsoft goes on buying and marketing spree in an effort to keep up with Google's webware applications.
10. Red Sox win American League pennant but are upset in the World Series.
11. Comcast launches DOCSIS 3.0 100 Mbps data service to compete with Verizon's 100 Mbps FiOS service.
12. Video and image search will go mainstream..... watch for my video podcast interview with Atalasoft President Bill Bither coming soon - it's been shot and is being edited now!

As much as I love hockey I'll skip the Bruins this year....... Looking at these 12 - minus the Sox, Patriots and the Celtics - the web has become the development platform of choice with high bandwidth access and availability required on any connected device......... You ain't developin' if it won't run in a web browser!

Happy New Year!

Interoperability - The Next Killer App?

Last month I was invited to attend a Cable & Telecommunications Association for Marketing (CTAM) New England Roundtable Event at a Comcast facility in Enfield, Connecticut. Interactive roundtable sessions were led by New England Multiple System Operator (MSO) Leaders on the next wave of changes for the Cable Telecommunications Industry. These interactive sessions were held on new business markets, new technologies. cross-platform content strategies and new products. One of the sessions I attended was on Pivot, a collaborative wireless product that connects Sprint with Comcast, Time Warner, Cox and Advanced/Newhouse Communications.

Pivot integrates a customers mobile phone, home phone, broadband and digital cable services into one interoperable technology and billing package commonly being referred to now as a "quadruple play". At the Cellular Telecommunications & Internet Association (CTIA) I.T. conference last March, Comcast CEO Brian Roberts discussed "killer apps" for products like Pivot. These apps include interoperability, wireless email and place shifted television. Here's a quote from Roberts at the conference:

"Over time [the killer app is] going to be interoperability. Can I take my email and get it on another device? I've been watching my on-demand shows, I've stopped watching at home, I want to finish the last five minutes. Place won't matter." Roberts continued: "There'll be a relationship with the company that will manage my data, my television, my phone, my address books, and my voice mails. The seamless nature of that is what mobility brings.

Robert's comments are right on the mark in my opinion.

Pivot also allows unlimited calling between your cable home service and mobile phones and you can do things like program your DVR using your cell phone. Here's a 45 second commercial you may have seen if you live in Pivot territory:

I was impressed with the first generation Pivot phones and applications I saw at the CTAM meeting last month. I walked away asking myself - Is it cable? Is it wireless? My answer - it's both - it's interoperable!

You can get more info at mypivot.com

Verizon Launches 20 Mbps Symmetrical FIOS Service

On Monday of this week Verizon announced 20 Mbps symmetrical FIOs service in parts of New York, New Jersey and Connecticut for as low as $64.99 a month. There are two things that I find exciting about this offering. First - it's great to see the bandwidths continue to go up. I feel this is just the start and we'll see bandwidths of over 100 Mbps within the next two years in selected areas as the telcos, like Verizon, go head-to-head with the cable companies like Comcast. If you are lucky enough to live in an area where FIOS is available you re in for a real treat regarding bandwidth.

The second exciting thing I see here is a shift to symmetrical services. Broadband products to date, including FIOS, ADSL and cable modem, have always been asymmetrical - the "A" in ADSL is even short for asymmetrical! Asymmetrical services provide more downstream bandwidth than upstream bandwidth. It's been a way for the providers to "cheat" a bit based on traditional Internet usage. Consider the way you traditionally surf the web - you enter a small amount of information in the address bar and hit enter. The address you type ends up going to a DNS (Domain Name Service) server and is looked up. The DNS server sends back the IP address of the site you want and your browser is directed to that site location. The site server then sends your browser the site contents you want to see.

Think about it - in the traditional model - a little information gets sent upstream and lots of information comes back downstream. Recognizing these patterns the providers have designed their networks to provide a little upstream bandwidth and lots of downstream bandwidth. Well...... all this has changed with this new FIOS offering from Verizon. Here's a quote from a Verizon press release:

"Verizon's new symmetric service is a smart response to the changing usage patterns of high-speed Internet subscribers," said Vince Vittore, senior analyst with Yankee Group. "We believe that as user-generated content continues to expand and telecommuting increases in popularity, upstream speed will become just as important as downstream for all users."

User generated content........ upstream speed becoming just as important as downstream for all users...... these are historical times!

Update - 10/31/07 - I found this video product demo on YouTube.