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Cable Tech

Broadband Growth Is Brisk

New data shows that recession or no, broadband is as popular as ever.

More people signed up for broadband services during the third quarter than any previous quarter, according to analysts John Hodulik and Aryeh Bourkoff at UBS Investment Research.

About 796,000 new DSL subscribers and about 1.1 million cable modem users signed on during the third quarter, states the report, which cites figures from the nation's 16 largest broadband providers.

More than half of U.S. households have Internet access and, with some 20.7 million high-speed data subscribers in the U.S. now, the UBS analysts reckon that 18.7 percent of all U.S. households have a broadband connection of some sort.

SBC Communications Inc. (NYSE: SBC) has the highest percentage of data subscribers among the large incumbent telecom carriers. Nearly 13 percent of SBC's primary residential lines are also delivering DSL service.

SBC stands out because it saw its seventh quarter of consecutive growth in broadband subscribers. The company added 365,000 DSL subscribers during the third quarter, giving it 3.1 million subscribers in all.

These healthy growth numbers may raise new questions about DSL services, and how they relate to fiber to the premises (FTTP). SBC, in fact, shows how RBOCs can find themselves in a quandary regarding triple-play services and FTTP.

FTTP is enticing for high-bandwidth applications (see IDC Sees Modest FTTP Growth). But with advances in video and data compression -- and more mature DSL technologies -- the life of installed copper plants is being extended.

Table 1: Selected Broadband Service Standards
Type of Service Maximum Downstream Capacity Maximum Upstream Capacity Maximum Distance
ADSL 1.5 Mbit/s to 6.1 Mbit/s 16 kbit/s to 832 kbit/s 9,000 to 18,000 feet
ADSL2+ Up to 25 Mbit/s 1 Mbit/s 6,000 to 16,000 feet
VDSL 106 Mbit/s 43 Mbit/s Up to 13,000 feet (4 km)
PON (FSAN standard) 622 Mbit/s shared up to 32 ways (about 20 Mbit/s per user) 155 Mbit/s to 622 Mbit/s 20 km
HFC 1 to 3 Mbit/s 125 kbit/s to 512 kbit/s Depends on how many users are sharing the network
Source: Light Reading Insider


As the most recent Light Reading Insider, "FTTP Reality Check," points out, this is likely to make RBOCs less enthusiastic about FTTP plans, especially when they have already spent substantial amounts of cash on DSL equipment, support, and marketing. If DSL is just coming into its own, won't they want to make some money on it before moving to the next thing?

Like its peers, SBC has spent loads of money building out its DSL capabilities and, given DSL's growth, it tough for those carriers to pursue FTTP buildouts with much enthusiasm, despite the blessings of the FCC (see DSL Fuels Second Thoughts on FTTP). "We don't think it's economically feasible to deploy FTTP on a large scale," says SBC spokesman Michael Coe.

Not only is DSL more feasible to the big carriers, it helps them hold onto their eroding base of traditional telephone subscribers. Coe says that once a customer starts using SBC's DSL service, that customer is far less likely to buy their phone services elsewhere.

Meanwhile, as the incumbents wrestle with how to push forward with DSL without discarding FTTP entirely, the cable companies are still turning up subscribers faster than the phone companies.

Overall, cable remains the dominant broadband access media; about 1.4 cable modems were installed for every new DSL subscriber, according to the UBS analysts' report. The four Tier 1 cable operators -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable, Cox Communications Inc. (NYSE: COX), and Cablevision Systems Corp. (NYSE: CVC) – which all have between 22 percent and 33 percent of their basic cable customers subscribing to broadband data service.

— Phil Harvey, Senior Editor, Light Reading



For more on this topic, see the latest Light Reading Insider report: FTTP Reality Check. Annual single-user subscriptions to Light Reading Insider – which include access to the current report, the complete archives, and each of the monthly reports issued over the next 12 months – are available for $1,250.

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opca2004 12/4/2012 | 11:12:43 PM
re: Broadband Growth Is Brisk Bells can keep their local customer by bundling DSL with local phone service. But, one DSL has 1.4 cable, so cable will way more than DSL. If cable company add much cheaper VOIP than traditional local phone and long distance. So, can bells count on DSL? Can bells add VOIP on their DSL? Then, customer will have regular local phone and VOIP?
technonerd 12/4/2012 | 11:12:41 PM
re: Broadband Growth Is Brisk 24 new communities deploy FTTH services
The recent FTTP (fiber to the premises) RFP by the RBOCs may be the buzz of the fiber world, but it's the smart communities that are really making FTTH tick. This week, the FTTH Council and the Telecommunications Industry Association (TIA) announced 24 new communities have deployed FTTH broadband services to customers, bringing the total to 94 communities in 26 states.


None of the applications mentioned in this article justify the buildout of FTTH. All of what was mentioned in the article can easily be accomplished over HFC at far lower cost. Once ILECs lose their residential voice revenues to the cellular carriers (this will begin apace within a few years and be unstoppable within five years), you can forget about ILEC FTTH, even for demonstration projects.
zeno 12/4/2012 | 11:12:41 PM
re: Broadband Growth Is Brisk Funny how LR tout DSL - while the FTTP/H is growing faster and faster here in Europe and in soon enough also in USA

In the Neighborhood
9-29-2003
24 new communities deploy FTTH services
The recent FTTP (fiber to the premises) RFP by the RBOCs may be the buzz of the fiber world, but it's the smart communities that are really making FTTH tick. This week, the FTTH Council and the Telecommunications Industry Association (TIA) announced 24 new communities have deployed FTTH broadband services to customers, bringing the total to 94 communities in 26 states.
"We're seeing unprecedented RFP activity and feasibility projects,
providing momentum that should make 2004 a banner year for FTTH projects," says Mike DiMauro, president of the FTTH Council. The list
includes only communities where FTTH actually serves customers; projects under construction are not included. "There are feasibility studies, pilot programs and construction projects occurring all over the country," says Michael Render of Render, Vanderslice & Associates, which prepared the list of FTTH communities.
While developments like Daniel Island, S.C., and Mission Bay-San Francisco have received lots of media and industry attention, one of the more progressive developments is in Provo, Utah, where city officials are reviewing plans to make FTTH services available to all of the city's 32,000 homes and businesses by the end of the year.
After a recent trial, Provo already is delivering voice, video and data services to about 1,100 homes. Among other things, the city is using the FTTH network to deliver IP video-on-demand services, including elementary school musical performances, graduation ceremonies, city council meetings and local university lectures. New states entering FTTH trials and deployments are Illinois (with deployments covering the entire municipalities of Paxton and Salem);Indiana (with deployments in the Bay Creek and Gateway Crossing developments in McCordsville and in the entire municipality of
Rochester); Louisiana (in the Squire Creek Gomes development in Ruston); Maine (trial in Norway); Montana (in the Baxter Meadows development in Bozeman and the Ironwood development in Billings); and Wisconsin (the Berkseth and Prairie View developments in Baldwin and the entire community of Reedsburg). Texas continues to lead FTTH deployments with 13, followed by Kansas and California (nine each) and Minnesota (seven).
NetworkMercenary 12/4/2012 | 11:12:40 PM
re: Broadband Growth Is Brisk A note of correction. The matrix showing the different broadband options shows the last section as maximum distance for each technology type. The matrix incorrectly shows that HFC (hybrid fiber/coax...cable modem option) as being limited to the number of users attached. The maximum distance has nothing to do with the number of users, but instead relates to the shared bandwidth consumption. The benefit of HFC is that it has been designed to offer cable modem service to the end-point on the plant, just like video services today - NM
MECA 12/4/2012 | 11:12:39 PM
re: Broadband Growth Is Brisk Can you provide a link to "In the Neighborhood" article?
ftthexpert 12/4/2012 | 11:12:39 PM
re: Broadband Growth Is Brisk And this is not time they missed it.
Actually the Municipalities and IOC are the pioneers but now the big guys are joining. Verizon is consistant with its plan to have 1,000,000 FTTP home pass in 2004 and probabely more than double of that in 2005. They are going to upgrade 100 CO sites for FTTP in the second half of 2004 and another several hundreds CO sites in 2005. AFC, ZHONE, ECI, Entrisphere and Catena joined the BPON access vendors during 2003. They have install based both in the IOCs and the ILECs. You can not cheat them all. There is real story behind FTTP.
NetworkMercenary 12/4/2012 | 11:12:38 PM
re: Broadband Growth Is Brisk I believe there are 2 significant reasons why a provider makes changes in the network. 1) New or expanding services drive infrastructure changes. 2) Eroding customer numbers due to competition from other providers. These are the high-level reasons. Others could be age/reliability of existing network equipment (life of optics, etc).

With respect to the RBOC strategy, I think it's quite safe to say that they would like to leverage their existing resources to offer services. A simple example would be using DSL to offer more attractive services on existing copper...leveraging the existing infrastructure. The challenge for the RBOC is that the last mile for them doesn't have a bright future with respect to increased bandwidth, in sharp contrast to the MSO.

The RBOC is seeing significant erosion in voice services on the west coast from the MSO. Currently, 7 out of 10 broadband data customers choose cable modems over DSL. Bottom line is that they need to provide an access strategy to stay the erosion.

Their copper doesn't have what it takes so FTTx or wireless (future) is the hope...or perhaps power company resources or coax overbuilds. All of this is very expensive and the MSO has the infrastructure in place today. Perhaps MSO open-access will prove to be another option if regulations are put in place to support this model - NM
firstmiler 12/4/2012 | 11:12:38 PM
re: Broadband Growth Is Brisk
Technonerd wrote: None of the applications mentioned in this article justify the buildout of FTTH. All of what was mentioned in the article can easily be accomplished over HFC at far lower cost. Once ILECs lose their residential voice revenues to the cellular carriers (this will begin apace within a few years and be unstoppable within five years), you can forget about ILEC FTTH, even for demonstration projects.

Techno, if one is to build new plant and go through the expense of doing so, are you suggesting they put old generation equipment in place? Do you have any idea what the cost difference is between an HFC deployment and FTTH? Its about as much as your hypothesized retail rate for voice in 5 years, nearly $0?

If ILECs don't do something in next five years, I agree they will be in trouble. Certainly you don't expect them to sit idly by. The types of applications enable by FTTH will far surpass the view of $0 voice you continually harp upon.

FM
materialgirl 12/4/2012 | 11:12:38 PM
re: Broadband Growth Is Brisk I thought the RBOC strategy was to grow fiber from the COs incrementally. DSL deployments do cost money, but by adding new services that cost $40/month do they also pay for incremental fiber builds? If I had a giant network and thousands of people to employ and billions of dollars in unpaid debt, I would go one step at a time too. Go from the CO to the neighborhood with fiber, and goose that remaining copper to see how much money I can get from what service. If speed pays, then put in more fiber. Is this not what they are trying to do?
optical Mike 12/4/2012 | 11:12:37 PM
re: Broadband Growth Is Brisk ENMR-Plateau Telecommunications provides local exchange access and long-distance phone services, as well as wireless and Internet access services in 14 counties in eastern New Mexico and three counties in the Texas panhandle. It also provides customer premise equipment. Area farmers, ranchers, and other residents founded the company in 1949 as Eastern New Mexico Rural Telephone Cooperative.

They will be the first to deploy Fiber to the home in New Mexico


http://www.enmr.com/FTTH%20P%2...
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