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Optical/IP

Cable Still Rules US Broadband

In the United States, asymmetric digital subscriber line (ADSL) and cable-modem use continued growing briskly last year, with DSL continuing to lag cable, according to figures released yesterday by the Federal Communications Commission (FCC).

The report is a mandatory biannual reckoning of high-speed (200 kbit/s or faster) connections in the U.S. It's also got some geographical breakdowns, including figures that reveal which states have the highest and lowest numbers of high-speed connections. (Answers at the bottom; no peeking!.)

Most of the numbers aren't surprising. The number of U.S. broadband connections grew 55 percent last year, to 19.9 million. Cable continues to outnumber ADSL, at 11.4 million connections, compared with ADSL's 6.5 million as of December 2002 (see FCC Posts High-Speed Net Info).

Summary: Both sides are growing steadily, but cable's still outpacing ADSL 2 to 1. And that gives ADSL advocates another chance to rail against the fact that cable isn't regulated like DSL is.

"The FCC numbers show how well the FCC is doing their job at constraining the DSL market," quips Gary Bolton, vice president of marketing for DSL equipment provider Catena Networks Inc..

Help could be on the way, although it might not arrive in time to affect the 2003 figures, Bolton says. For one thing, the Bells got their broadband wishes granted with the Feb. 20 FCC ruling -- although it's debatable whether that's going to catalyze spending (see Will RBOCs Spend More on Broadband?).

Even if it does, Bolton notes that carriers are still waiting for the text of the decision before unlocking the capex flood gates. "You never know how many maggots are in that text," as he tastefully puts it (see New FCC Rules: 600 Pages? ).

Other pending decisions include the debates on whether ADSL is an information service or a telecommunications service (with different legal implications on either side) and whether DSL is a "dominant" service. Given the FCC numbers, Bolton argues DSL is clearly not dominant, which should lift some regulatory obligations from service providers.

"As the handcuffs start coming off and the playing field starts to level, you'll start seeing capex start to take off," he says.

That's nice for Catena, but why would it help DSL's popularity? Because increased spending could improve service availability. Specifically, it could address another finding in the FCC stats: Cable clobbers DSL in "advanced" services -- defined by the FCC as service that offers more than 200-kbit/s speeds in both directions.

Now, a lot depends on what's considered "advanced." For example, Verizon Communications Inc. (NYSE: VZ) is offering residential DSL subscribers 1.5 Mbit/s downstream and 128 kbit/s upstream -- which would feel pretty darned nifty to a lot of users but doesn't count as "advanced" in the FCC's tally. Still, the numbers imply that cable is more consistent about offering high-speed upstream access, which could be a key in pitching to business customers.

Increased spending could help here, because service providers can boost DSL speeds by putting facilities closer to customers. This happens in the form of digital loop carriers and similar boxes, provided by the likes of (gee, surprise!) Catena, as well as competitors including Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Calix Networks, Marconi Corp. plc (Nasdaq/London: MONI), and Occam Networks Inc. (OTC: OCCM).

ADSL also has to contend with trouble zones in the telephone infrastructure, due to bridge taps that degrade performance or lines that just plain suck. There are ways around that as well; chip makers are upping the ante on their signal-conditioning capabilities, trying to make ADSL more resilient (see TI Beefs Up DSL Chip).

As for that state-by-state breakdown -- not surprisingly, California tops the list with 3 million high-speed connections. New York ranks a distant second with a paltry 2 million -- no, wait, it's not even 2 million: a paltry 1.997 million connections.

The state or territory with the smallest number of connections? That would be (drum roll) Wyoming, with 14,696. South Dakota is second, around 18,000, while North Dakota and Montana rank barely above 20,000. (Caveat: Figures for Hawaii weren't included, to protect the confidentiality of the few service providers working that state.)

The FCC report, titled "High Speed Services for Internet Access," can be downloaded at www.fcc.gov/wcb/iatd/stats.html. For now, it's available under the "Recent Reports" link.

— Craig Matsumoto, Senior Editor, Light Reading
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OSPGuy 12/4/2012 | 11:55:17 PM
re: Cable Still Rules US Broadband ADSL actually stands for Asymetric Digital Subscriber Line. Asynchronous may have a nicer ring to it, and letting those melodious sylables roll languidly off your tongue may make you feel like the tall, dark, mysterious stranger you wish you were, but at the end of the day, all of us geeks out here will know you're just another windbag who doesn't own a copy of Newton's Telecom Dictionary.

Just call it ADSL and leave it at that.
opticalwatcher 12/4/2012 | 11:55:16 PM
re: Cable Still Rules US Broadband Actually, the report lists statistics for high speed lines in two directions AND high speed lines in one direction.

To quote the report's description of categories:
"A high-speed line is a connection to an end-user customer that is faster than 200 kbps in at least one direction. Advanced services lines,
which are a subset of high-speed lines, are connections to end-user customers that are faster than 200 kbps in both directions."

Interesting that California has more DSL than Cable penetration.
Pete Baldwin 12/4/2012 | 11:55:16 PM
re: Cable Still Rules US Broadband >ADSL actually stands for Asymetric Digital Subscriber Line.

Oops -- Slip of the tongue, so to speak... i'll put in to have it corrected. Thanks for pointing it out.
BobbyMax 12/4/2012 | 11:55:13 PM
re: Cable Still Rules US Broadband There are primarily three ways of providing broadband services: Cable, DSL and wireless. Let these technologies play against each other without being limited by anybody.
alchemy 12/4/2012 | 11:55:11 PM
re: Cable Still Rules US Broadband Interesting that California has more DSL than Cable penetration.

You can thank AT&T Broadband for that. Most of the cable plant in California was 1-way. Comcast is rewiring now to provide digital set top boxes, video on demand, and cable modem. As you might imagine, the erosion of the AT&T Broadband customer base in California to satellite TV was huge over the last few years.
pusbag 12/4/2012 | 11:55:04 PM
re: Cable Still Rules US Broadband Just ask Hugh Grant -- he can tell you all about California DSL. Can't speak for penetration though...
rjmcmahon 12/4/2012 | 11:55:03 PM
re: Cable Still Rules US Broadband Comcast is rewiring now to provide digital set top boxes, video on demand, and cable modem.

Whose money are they using to pay for that? And why not do the job properly? Satellite covers everything but cable MODEM. Also customers will pay for satellite CPEs and will never pay for cable set-top, no matter the DOCSIS label)

Cable's only way forward is to cozy up with the content refineries. That's why Roberts sits with Karmazin and Parsons in that NYT picture.

(That NYT picture is kinda of foretelling. Reminds me of an Alice Munro short story where all the metaphors in threes suggest conflict. The only things in peace are in groups of four. Unfortunately, 4th man Gates showing up to resolve the cable/refinery conflict seems very, very unlikely. His way for peace is "me, myself, and I.")
rjmcmahon 12/4/2012 | 11:55:02 PM
re: Cable Still Rules US Broadband I hate to admit it but they're sucking something like $140/month out of me for all those services.

The irony is that for a one time cost of around $2-3K you could own your own 1Gbs pipe to a carrier neutral colo and get everything they are offering plus so much more.

The challenge is convincing 40% or so of your neighbors, most of whom don't understand technology, that it's really the best deal for everyone.

Or another way to think about it, for those with kids, $140 per month with 5% return over 18 years yields $48,888.28 towards a college tuition. And the basis provided by a lifetime of real internet access vs. a lifetime of FOX is not quantifiable by any banker's number.

Blue or red pill. We choose.
alchemy 12/4/2012 | 11:55:02 PM
re: Cable Still Rules US Broadband Whose money are they using to pay for that?

Comcast is borrowing some long money while it is inexpensive. They're doing the rest out of cash flow. I get digital cable, cable modem, and telephone from them so I'm doing my part every month to rebuild California's HFC plant. *grin* I hate to admit it but they're sucking something like $140/month out of me for all those services. Verizon finally woke up and is starting to compete so I expect the prices to drop some.

And why not do the job properly? Satellite covers everything but cable MODEM.

Satellite doesn't have an upstream. You can't use it to do internet access or telephony. It's also worthless for true video on demand. I don't know if you're tracking the video jukebox technology that companies like Big Band, Scientific Atlanta, and C-Cor are deploying in the MSO networks these days. There's tons of free on-demand content as well as what you'd expect to see on pay content.

Also customers will pay for satellite CPEs and will never pay for cable set-top, no matter the DOCSIS label)

A DOCSIS 2.0 cable modem will be $50.00 at Best Buy next year with a $50.00 rebate from the MSO if you sign a service contract. It's going the way of cell phones in cereal boxes. I don't have to climb on the roof to set up my telecom services. They also work when it rains heavily or snows. Also, the evril Bill Gates empire is entering the fray. It's not clear whether Microsoft at the set top will leave the industry in a smoking ruin or not but the 800 pound gorilla of buggy and ponderous software is trying to get on the set top again.
jim_smith 12/4/2012 | 11:54:59 PM
re: Cable Still Rules US Broadband Reminds me of an Alice Munro short story where all the metaphors in threes suggest conflict.

...

His way for peace is "me, myself, and I."


That's the only metaphor in three that is peaceful.
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