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AT&T's Broadband Bravado

Phil Harvey
The Philter
Phil Harvey
1/7/2013
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9:30 AM -- LAS VEGAS -- 2013 International CES -- The AT&T Inc. Developer Summit yesterday did not disappoint, and in many ways, it helped me answer the question: Where is AT&T's network going next? Of particular interest to me were the wireline network improvements noted by John Donovan, the former CTO of AT&T. Donovan's title these days is Senior Executive Vice President of AT&T Technology and Network Operations, AT&T Inc. He hopped in a car and left the Palms hotel right after the keynote session Monday morning. I was hoping to get a business card from him to see how large the cards were, given all the verbiage. What was I saying? Oh, yeah. The network ... What Donovan was clear about was that AT&T is bringing IP broadband services to more people as part of its Project Velocity IP, or Project VIP -- a menu of $15 billion worth of wireline and wireless improvements coming between now and 2015. When discussing DSLAM and wireline technologies, Donovan said: "With our plant technology advancements, 90 percent of our U-verse customer locations will have the capability to receive what we project to be 75 Mbit/s. And 75 percent will have the capability to receive up to 100 Mbit/s. "And almost 80 percent of the IP DSLAM customer locations will have the capability to receive 45 Mbit/s, with about half of those [customers] having the capability to receive up to 75 Mbit/s." He added that, in all, "75 percent of AT&T customer locations will have access to either U-verse or IP DSLAMs." Also, he reiterated the deadline, saying that AT&T will "essentially complete this IP broadband build by the end of 2015." Later, during a meeting, Jeff Weber, AT&T's VP of U-verse and Video Products, noted that AT&T already offers 35 Mbit/s to some U-verse customers today. "Our roadmap for broadband is really, really robust," he tells Light Reading. At one point I thought AT&T would run out of road by having U-verse deployed on anything less than an all-fiber network. Donovan and Weber are making the case that AT&T has plenty of technology in its own network, by taking advantage of new video compression techniques, to keep that road stretching out a long, long way. — Phil Harvey, Editor-in-Chief, Light Reading

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alr
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alr,
User Rank: Light Beer
1/11/2013 | 10:54:21 PM
re: AT&T's Broadband Bravado
While I agree with that future deployments should be fiber, I am curious as to what kinds of applications might require more than 100Mbps to the home. That would be enough for multiple HD video streams, enough for most home entertainment, gaming, communication etc. All other futuristic applications people talk about like intelligent homes etc. need-áminuscule-áamounts of data. If you need to host content that needs more bandwidth, that would probably be located in the cloud, rather than at home, and is an entirely different tier of service.

Not being snarky here - I am genuinely curious as to what people think might be drivers for demand of bandwidth. If you look at current uses of the Internet, they are really a new/improved form of communication, entertainment and information services that have been around for a long time (yes, HD VoD is not all that different from a TV with rabbit ears 50 years ago). There is a limit to the bandwidth a human being can consume. Higher resolution TV brings ever diminishing returns, and there are no applications that consume more bandwidth than video.
joanengebretson
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joanengebretson,
User Rank: Light Beer
1/10/2013 | 2:33:59 PM
re: AT&T's Broadband Bravado
It's important to keep in mind that Project Velocity targets smaller less urbanized markets that are costlier to serve because of their comparatively low population density. It would be difficult for AT&T to make a business case for an FTTH deployment in many of these areas.
brookseven
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brookseven,
User Rank: Light Sabre
1/10/2013 | 5:09:43 AM
re: AT&T's Broadband Bravado
Phil,

The easy thing to do is get someone to produce a rate versus reach chart for VDSL2 with vectoring. -áThen have them show you the point at which you get 75 Mb/s or 100 Mb/s. -áThe charts that I generally see show that at a much shorter reach than I understood the u-Verse loop plant to be designed to. -áMore like the FTTC plant in the old Reltec/Marconi/AFC/Tellabs product.

All of those charts assume good quality plant with no extra noise or disturbers. -áThis will lead people to have to rehab copper.

To MMQOS,

Yes, I was heavily involved in FiOS. -áThe extra costs come in laying the F3 fiber. -áONT/OLT/and F1/F2 fiber costs are about the same. -áI argue regularly at low densities that GPON is cheaper than VDSL2 already (and I have said that here often). -áThis is because at some point you reach a very small number of homes per DSLAM and the costs/port go up a lot.

The reason that the DSLAMs were limited to 30 Mb/s (and actually it was 25 initially) was the technology + loop design. -áWhat the claim is (and this is the part I am really struggling with) is that vectoring ALONE can take a 2500' DSL loop from 25 Mb/s to 75 Mb/s. -áI think THAT is a stretch. -áAnd as you point out (well I am not sure you meant to but...), they have to shift to a 30 MHz band plan to achieve these rates. -áWhich means new DSLAM ports and new DSL modems.

Finally, back to Phil's question. -áIt is based on cost and performance. Cable has kept their prices high (relatively) for Cable Modem service and have stayed ahead of u-Verse in terms of performance. -áSo - I think its based on price and value. -áThe one thing I believe and believe strongly (probably in disagreement with many here) is that video bandwidths will go down over the long term. -áThis is because things will move from centralized large screens to personal smaller screens. -áIf the need for high performance HD video goes down then u-Verse could have a place for some time.

seven
Duh!
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Duh!,
User Rank: Light Sabre
1/9/2013 | 9:19:04 PM
re: AT&T's Broadband Bravado
No simple answer to that one.-á-á-á IMHO,-á it can play out in a few different ways.-á

1) Stephenson's successor reverses the strategy and ramps up FTTP to replace DSL in U-Verse.
2) AT&T spins out the wireline business and the new entity ramps up FTTP to replace DSL in U-Verse.
3) This generation or the next or the one after of DSL technology proves unfeasible or uneconomic in AT&T's outside plant
4) Inferior video QOE and lower Internet speeds than cable force AT&T to compete on price alone, shaving margins to the point of having to exit.
5) MSOs match AT&T's pricing with better video QOE and higher Internet speeds and too-good-to-resist special offers, and revenue shrinks to the point that AT&T has to exit.
6) AT&T simply exits.

I can't forecast a timeframe or a line rate.-á Maybe Heavy Reading, with all their access, would be able to do that research and at least SWAG it.
MMQoS
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MMQoS,
User Rank: Light Sabre
1/9/2013 | 7:45:11 PM
re: AT&T's Broadband Bravado
Brook-
I suspect that Donovan was mixing his marketing inspired
buzzwords when using "compression" while discussing transmission
bandwidth.-á uVerse has continued to receive volumes of complaints about
poor HD QoE due to DSL b/w limitations so I'm sure his Labs folks are
promising him better HD quality with HEVC.
But I agree with Brook.-á
Until Stevenson (ex CFO) is replaced with a CEO who has some technical
understanding, at&t has a dead end strategy for video and the b/w
necessary to support excellent QoE.-á John Cioffi is a brilliant engineer
and also a great salesman who has had the ear and the checkbook of
Stevenson for many years.-á It was Stevenson who pushed his exec for SBC
to drop out of the TriBOC FTTH consortium program based on Cioffi's
input that copper was a good as fiber and much cheaper.-á My issue with
John Cioffi's models has always been that his early tests were performed
at the Rose Bowl champion University's labs on copper media of a known
quality.-á The copper media strung on poles or in the ground for many,
many years most likely has differing characteristics.-á This was debated
extensively in the DSL Forum.-á His company and others have since
developed some good analytic tools, however each new subscriber has to
have a truck roll to evaluate the copper capability from the DSLAM to
the residential demarc.-á
In my case when I ordered uVerse when it
was first available and since I was less than a 100 meters from the
DSLAM and my copper was less then 8 years old, why would they only
provide 30Mb/s max.-á I was told that this was the limitation of the
Alcatel DSLAM port.-á That means that those sub cards if not the whole DSLAM will have to be replaced.
So
while Siedenberg had the hide to make the investment up front for FTTH
and continues to do so in spite of the press, at&t has added a patch
here and another function there.-á With multiple truck rolls to "tune"
the media, forward error control, heavy video compression, maybe new
DSLAMs and other tricks to (hopefully) achieve the necessary bit error
rate for good QoE, I've often wondered what is the true cost per sub for
uVerse vs FiOS.

Phil: I'll bet my monkey that FiOS is not much
if any more costly then uVerse, especially as the GPON's can also be
used to support LTE access points.
BTW I dropped uVerse TV because of poor video quality.

mmQoS
Phil Harvey
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Phil Harvey,
User Rank: Light Beer
1/9/2013 | 6:59:54 PM
re: AT&T's Broadband Bravado
The point of writing this wasn't to say that AT&T was faster than anyone else or that 100Mbit/s was some magical threshold. AT&T has, however, provided a path to upgrades (for some set of customers) that's way above what they were talking about a couple of years ago. That's why I felt it interesting enough to pass along. Investors will be interested to hear that, as will vendors who sell gear related to DSL tech.
Phil Harvey
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Phil Harvey,
User Rank: Light Beer
1/9/2013 | 6:57:38 PM
re: AT&T's Broadband Bravado
The sentence should have read: "...-áAT&T has plenty of technology in its own network, by taking advantage of vectoring and new video compression techniques, to keep that road... "

Anyway, if AT&T's strategy is a dead end, what will the dead end number be? At what speed will consumers walk away and go to cable? And when will that happen -- in a decade? Two?
rma153
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rma153,
User Rank: Light Beer
1/9/2013 | 1:17:43 PM
re: AT&T's Broadband Bravado
Woohoo! Stop the presses! Up to 75 Mbps, and almost 100 Mbps-áfor some lucky subs??!!-á This is pathetic considering ironically, the very next story on lightreading, right below this story, talks about the cable companies' ability to do 1 Gbps....

And who came up with 100 Mbps as the Holy Grail of bandwidth, anyways? What-áwill they do-áwhen-áwe want 101 Mbps.-áAT&T better be praying-áfor a faster exit strategy out of wireline, because-áthe brick wall is-ácomin'.-á
brookseven
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brookseven,
User Rank: Light Sabre
1/8/2013 | 9:20:53 PM
re: AT&T's Broadband Bravado
Reading the statements closely....do you think he means that the 75 - 100 Mb/s is really due to compression? -áWhat I mean is "With our plant technology advancements, 90 percent of our U-verse customer locations will have the capability to receive what we project to be 75 Mbit/s."...I remember when dial modems were listed with their compressed data rates on the boxes.

seven
Duh!
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Duh!,
User Rank: Light Sabre
1/8/2013 | 8:18:46 PM
re: AT&T's Broadband Bravado
-áFirst of all, compression is a non-sequitr.-á

It appears that AT&T has as much as announced that they're going to start deploying vectoring in U-Verse.-á Cioffi claims that there is more room, through signal processing techniques, to push copper plant to the boundaries of the Nyquist limit.-á I'm not as confident as he is.-á As we saw with dial-up,-á substituting processing for bandwidth and C/N+I starts to run up against diminishing returns.-á Cioffi and friends have more tricks up their sleeves, but I'm skeptical that they will be cost-effective, or competitive in the long run with FTTH, DOCSIS 3.1 or even DOCSIS 3.0.

Equally to the point, AT&T's copper plant is aging, and significant portions must be reaching the end of their economic life every year.-á Copper commodity prices continue to trend upward significantly, as pricing for optical fiber remain flat and cost differential between fiber and copper construction declines.-á Plus operations and maintenance costs for copper is significantly greater than for fiber.-á Therefore, rehabbing copper plant seems very hard to justify.

So in my opinion,-á AT&T's DSL strategy is a dead-end. -á More a sop to Wall St. analysts than solidly grounded in technology, operations, economics and markets.-á Hopefully, Stephenson's successor will show the same kind of cajones that Seidenburg and his team did a decade ago.
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