Week 28 in Telecoms, Media, Internet

CORPORATE

Orange

Appoints Julien Ducarroz CEO Orange PL (from Orange Moldova) and Mari-Noëlle Jégo-Laveissière Head of Orange Europe (Romania, Slovakia, Moldova, Luxembourg)

Telefonica

Telefónica Innovation Ventures invests in Nozomi (cybersecurity)

Proximus

To merge Unbrace (app development) into Codit (IT)

Orange BE

Appoints Xavier Pichon CEO (from BCG; formerly Orange)

Tele2

Appoints Kjell Morten Johnsen (formerly VEON, Telenor) Pres & CEO to replace Anders Nilsson

Zain/Etisalat

Zain & Mobily (Etisalat) plan tower JV in Saudi Arabia

Alphabet/Google

GCP ordered by Deutsche Bank, 10 yr - Rumor: cancelled cloud project for China etc (project Isolated Region) - GCP ordered  by Renault

Amazon

Reuters: to invest $100m in stock awards for Zoox employees (900), may cancel acquisition if large number of employees refuse job offer; to pay $1.3b, to close Sep 2020

Facebook

Sustainability Report: GHG emissions reduced 59% from 2017, 86% of ops powered by renewable energy, total energy usage 2019 +50%

Axios: Facebook boycott organizers share details on their Zuckerberg meeting, generally disappointed (not yet ready to address the vitriolic hate on their platform)

Delays Oversight Board to 20Q4 [see 200506]

Internal Civil Rights Audit report: doesn't do enough against hate speech & disinformation

Microsoft

Rumor: considers offer for Warner Bros games division

Spotify

Ad deal from Omnicom (agencies Hearts & Science, OMD, PHD), $20m: ads around podcasts

Sony

Acquires 1.4% stake in Epic Games (makes Fortnite, Unreal Engine), $250m; valuation $17.86b; total raised $1.83b

Sells Sony Pictures Television France (unscripted activity & Starling) to Satisfaction (renames to Satisfy)

Quibi

[History] - Sensor Tower: <10% of April 2020 sign-ups converted to paying subs (72k of 910k) - Denies

fuboTV

Sells stake to Credit Suisse Capital, $20m (2.1m shares at $9.25); 20Q1: reaches 287k paying subs (+37% yoy)

Nielsen

Plans 3500 job cuts

WPP

3 Units to merge into Finsbury Glover Hering (FGH), WPP to own 50.01%, FGH 49.99% through buy-back

Thomson Reuters

Rumor: Reuters plans paywall from Feb 2021

NPO

Minister finalises plans [see 190606]: to end advertising online & around children's programming 210101, extra state funding rises to 40m EUR/yr; to reduce ad load/income 20% per yr 2022-2027 (total reduction 50%); to add local programming to NPO 2 TV, NPO 3 TV remains youth focused

Vivendi

Canal+ fined EUR 3-5m for opt-out sale 2017

(NETWORK) EXPANSION

Deutsche Telekom

Magenta Telekom extends reach to >50 communities in Tyrol providing services over cablecos & munifiber    

T-Mobile PL expands RSP coverage to full Fiberhost (= Inea) coverage: 1m HH

Iliad IT

Iliad IT to provide services on Open Fiber's FTTH network by 2024

Euskaltel

Euskaltel to provide services over Orange ES 1.8m FTTH lines

Google

Loon launches service (4G) in Kenya (31k miles^2, incl Nairobi) with Telkom Kenya (35k beta users); 35 balloon at 12 miles; down record 19 Mb/s, up record 4.7 Mb/s, latency 19 ms

Google Fiber plans FTTP in West Des Moines (Iowa), city to invest $35-42m in open access conduit network; Google Fiber to rent access for 2.25 $/mo (minimum $4.5m over 20 yr) - Confirms    

5G

Elisa expands 5G in Helsinki

TDC plans Private 5G at Grundfos (pump manufacturer DK), with Ericsson

AT&T plans Private 5G for Phillips 66 (refinery), with Accenture

Fortum Power & Heat plans Private 5G in 2.3 GHz band (20 MHz) based on owned spectrum

Zain KSA expands coverage to 30 cities (in all districts)

Groupe ADP, Hub One, Air France plan Private 4G/5G at Paris-Charles de Gaulle, Paris-Orly, Paris-Le Bourget airports.(1k employers, 120k employees), with Ericsson

India

India plans nationwide fiber (BharatNet) at panchayat (village council) level

Zambia

Fibrecom (= Zesco = gvt) to invest $50m in fibre in 2 yr

Ghana

Vodafone Ghana to migrate subs from copper to FTTH

Spotify

Rumor: to expand to Russia 200715

DAZN

To resume int expansion 200724 (beta)

SERVICES

Amazon

AWS launches AWS IoT SiteWise: managed service that collects data from the plant floor, structures and labels the data, and generates real-time KPIs and metrics to help industrial customers make better, data-driven decisions; first customers: Volkswagen, Bayer Crop Science, Pentair, Genie (= Terex), TensorIoT, Softing Industrial

Twitter

Rumor: plans subscription platform (codename Gryphon)

Disney

Fox Sports NL ends support for Smart TV apps (Samsung, LG) & Apple TV

Comcast

Peacock to focus on AVOD tiers; reaches 1000 employees; to invest $2b in 2020-21; target $2.5b rev in 2024 on 30-35m subs

Peacock content deal with NBU for free matches of NBC Sports’ Premier League from 200715, total 175 mathes in 2020/21 season

Sky Q adds features: new UI, voice discovery, bring together TV & apps more seamlessly, adds sports centers

AT&T

HBO Max to expand to Latam 2021

Crunchyroll orders new original series

Amazon

Prime Video adds user profiles (max 6 per account), with parental controls

Adds tuner to Fire TV Cube for OTA channels in US, Canada, UK, DE, FR

Naspers

Showmax adds live sports

TDC

YouSee (MSO, = TDC) plans stand-alone OTT service YouTv: live TV channels + 3rd-party OTT services

5G

Cable & Wireless Seychelles plans 5G launch July 2020 for smartphones, first in capital Victoria, Roche Caiman district & the airport; with Huawei

Taiwan Star plans 5G commercial launch Aug 2020, with Nokia

Traffic

ACM (NL) Telecommonitor 20Q1: mobile data usage (3G & 4G) 214b MB (+35% yoy), 20.257m mobile lines (+4% yoy), fixwed voice (PSTN & ISDN) 340m minutes (-21% yoy), #SMS -10% yoy, M2M connections 7m (+35% yoy), 7.45m BB lines, 2.76m FMC bundles (+8% yoy), fixed-only bundles 4.17m; market shares mobile data: T-Mobile #1 (>50%), KPN #2 (20-25%), Vodafone #3 (15-20%)

TECHNOLOGY

KPN

KPN demos 8.5/8.5 Gb/s (1 ms latency) over XGS-PON in real-world setting in Amersfoort

Compression

Fraunhofer Heinrich Hertz Institute (with Apple, Microsoft, Qualcomm, Ericsson, Intel, Huawei) developed H.266 = Versatile Video Coding (VVC); to halve bitrate requirement of H.265

2G/3G

GSMA: emerging markets will rely on 2G & 3G for another 5 yr

5G

3GPP finalises Release 16, adds or enhances NR–Unlicensed (NR-U), Integrated Access Backhaul (IAB), Sidelink (C-V2X, device-to-device), Time Sensitive Networking (TSN, replaces ethernet & cabling, suited for Industry 4.0), Precise Positioning (without GPS; based on round-trip delay, angle of arrival & other; precision <1 meter); enhances Release 15 (MIMO/beamforming, power efficiency, latency); [equipment based on enhanced Release 15 & Release 16 to be launched early 2021]; Release 17 (Dec 2021) may be delayed

Samsung launches vRAN for 5G (fully-virtualized); replaces dedicated baseband hardware with software elements on a general-purpose computing platform (scale capacity & performance more easily, add new features quickly, have flexibility to support multiple architectures), reduces maintenance costs (moves to a COTS (commercial off-the-shelf) x86-based platform)

Motorola launches Moto G 5G Plus, EUR 350 (4GB RAM, 64GB storage) or EUR 400 (6GB RAM, 128GB storage) - VinSmart (= Vingroup, Vietnam) launches 5G smartphone Vsmart Aris 5G, based on Qualcomm Snapdragon 765G - OnePlus plans One Plus Nord 5G 200721, rumored price EUR 290

Verizon plans migration to SA core 5G 2020

PLATFORM (SELF) REGULATION, LITIGATION, LICENSING

Platforms

WSJ: EU plans platform regulations aimed at moniopolistic behavior, tax evasion & content liability (hate speech)

Google, Facebook, Twitter halt processing Hong Kong government requests for user data; TikTok blocks usage in Hong Kong (operates as Douyin in China) - US considers TikTok ban - Microsoft Telegram, Zoom also pause data requests; Apple considers - Amazon orders employees to delete TikTok app over security risks - Amazon says order sent by mistake, will not ban TikTok

Indonesia launches 10% VAT on Amazon, Google, Netflix, Spotify

Facebook and Twitter ban posts promoting conversion therapy

Alphabet/Google

Rumor: California plans antitrust investigation

Facebook

Rumor: considers blackout on political ads in the days running up to the US presidential election

Twitter

Bans >50 accounts linked to Identitarian movement (white nationalist)

Apple

Plans to require apps to seek additional permission from users before tracking them across other apps & websites

Amazon

Amazon, authors (John Grisham, Scott Turow, R.L. Stine, Sylvia Day etc) & publisher (Penguin Random House) sue Kiss Library (pirated e-books)

Spectrum auctions

Mexico to delay 5G auction to 2021

FCC: 271 bidders for Auction 105 (3.5 GHz band: 3550-3650, 7 Priority Access Licences (PALs) per county, 10 yr licenses), to start 200727

PTS (SE) proposes combined 2.1 (expires end 2025) & 2.6 (expires end 2023) GHz auctiom, consultation until 200901

China

FT: UK Prime Minister Boris Johnson to demand phasing out Huawei from UK 5G networks

Backdoor accounts discovered in 29 FTTH devices from Chinese vendor C-Data    

Google Fiber for Kansas City (Kansas), more towns to follow

Google Fiber has chosen Kansas City (Kansas) for its first (or: second) project, but the first Google Fiber for Communities (not be mistaken with nearby Kansas City, Missouri). Here are some details, and here are the specs, which are few, so far:

• Population: 146,000.
• Service launch: early 2012.
• Partners: Kauffmann Foundation, KCNet, University of Kansas Medical Center.
• Service will be free to schools.

Google adds: "We’ll also be looking closely at ways to bring ultra high-speed Internet to other cities across the country."

Short look back at the entire project:

• Feb. 10, 2010: launch; target 50-500k people, open network, 1 Gb/s, one or more towns, RfI through March 26, 2010. Winner t.b.a. toward the end of 2010. Google dismisses plans to be an ISP itself, so it should be wholesale-only.
• March 26, 2010: RfI closes, 1,078 (1,077?) applications, over 194,000 comments.
• July 13, 2010: website Google Fiber for Communities opens.
• July 14, 2010: micro-trenching competition.
• October 21, 2010: separate from the Communities project, Google plans a network in Stanford, at the university campus (850 homes).
• December 13, 2010: Sonic.net is invited to operate the Stanford network; open access.
• December 15, 2010: selection delayed, Milo Medin named VP of Access Services.

Looking forward, what is left open?

• Technology: PON or Active Ethernet?
• Business model: wholesale only? Passive assets only, or active network as well?
• Service provision: who will sign up as service providers?
• More generally: Google plans to find out the best way to do the job.
• More cities: theoretically, another 350,000 people could be brought into the project.
• Google also plans to find out what the effects (economic, social, etc.) will be.

Google TV meets Google Fiber and YouTube Live

This is an update to the series of posts on Google Fiber, which ended up focusing on two key characteristics of several NGA networks:

• 1 Gb/s. The 100 Mb/s bar is gradually being left behind (Docsis 3 doing 120, Comcast 105, Bell Aliant 170) and there are several 1 Gb/s services around now. Most recently, it was launched by EPB Fiber Optics of Chattanooga (Tennessee). It comes at 350 $/mo. Other 1 Gb/s service news relates to Costa Rica and Hong Kong.
• Open access. Wholesale-only business models are springing up rapidly. LightSquared (US) and CenterNet/Mobyland (Poland) are planning LTE networks, Allied Fiber is into fiber backhaul, the Australian NBN is making progress, so is the New Zealand UFB network, while eircom is planning trials and Covage is rolling out in France.

In the meantime, Google is trialing Live on YouTube (live streaming), while ever more details are made public on Google TV. Google TV is to launch in the Fall, Google Fiber will be decided (perhaps with a shortlist as an intermediate step) by year-end. It is therefore supporting to see 1 Gb/s and open access proliferate, while YouTube is expanding its options:

• YouTube Leanback is an optimised version for Google TV.
• YouTube.com/movies will offer movies.
• YouTube HD was launched some time ago.

This is our 1,000th post, which coincides nicely with all the 1,000 Mb/s news.

FTTH and LTE help increase focus on wholesale

Three weeks of holidays create a truck load of catching up to do. Results, LTE, MVNO, FTTH, VoIP, WiMAX - every possible new item crossed our mail boxes. They can best be categorised at the next higher level: Corporate, NGN, Wholesale and OTT.

Corporate:

• Results: incumbents (KPN, DT, BT, Telefonica, Belgacom, FT, Bell Aliant), mobile (Sprint), cablecos (Liberty Global, Telenet, Ziggo, Virgin Media, ONO, Comcast).
• Financing: Reggefiber got its desired EUR 130m loan from the EIB.
• IPO: Skype's $100m plan.
• M&A: possible buyers (Telefonica, PT, Vodafone, FT, TI) and sellers (PT, TI, Vodafone).

NGN:

• FTTH: lots of deployments announced (inclusing China and India).
• NBNs and NBPs: Australia expands coverage plans to 93%, New Zealand receives 15 bids, the US awards another round of funds.
• LTE: several deployments announced.
• 4G: Clearwire moving closer to switching from WiMAX to LTE and the WiMAX2 standard gets ready for a 2012 launch.
• 1 Gbps: several MSO and telcos are now going beyond 100 Mbps, while ever more are eying 1 Gbps as the new frontier for bandwidth.

Wholesale:

• Structural separation: proposal from Telecom NZ in order to be able to bid for the Crown Fibre plan.
• MVNO: KPN reports success with foreign MVNO operations (2G, 3G); Econet plans launch on the Everything Everywhere network (3G); Best Buy will do the same on the Clearwire network (WiMAX); Airspan is LightSquared's first wholesale customer (LTE); Tele2 NL started offering CATV on the networks of Ziggo and UPC (analogue TV); Chile considers a wholesale-only network (mobile and digital TV).
• BT was not allowed to raise wholesale prices to help stem the pension fund deficit.

OTT:

• Apps: Google ended the development of Google Wave and acquired Slide; Samsung announced a developer contest.
• Net neutrality: Google and Verizon struck an agreement.
• Hybrid TV: Apple was rumoured to rework Apple TV into iTV, Cox partnered with TiVo and the Virgin UK/TiVo partnership added Cisco.

Conclusions:

• The focus in the sector is shifting to Wholesale and OTT; FTTH and LTE are ongoing; wholesale is established as an important new business.
• M&A is focused on emerging markets, esp. Latam.
• Many incumbent telcos are still assembling global empires in order to be able to show growth. KPN is continuing on the wholesale path for growth.
• A telecoms network can be looked at as a vital piece of national infrastructure. If structurally separated, its cash flows can be seen as a vital element of the governments budget (incl. retirement funding).
• Cablecos are outperforming telcos. If you split the business three ways, it becomes clear why. 1. Connectivity (access): Docsis 3 outperforms xDSL and provides cable with a growth engine. Utility rates are close to 80% in the Netherlands, still much higher than FTTH's. 2. Communication: a nice add-on for growth and loyalty, hitting incumbent telcos in their hearts. 3. VAS (incl. content): here cable is the incumbent and benefits from a considerable head-start on multiple fronts (network, digital services, content deals). The foremost risks include FTTH and non-linear TV/hybrid TV/OTT.
• NGNs (FTTH, LTE) are exploring their advantages: 1. Maximum symmetrical bandwidth. 2. Lowest opex, highest score on the green scale. 3. Options for open access and wholesale.
• OTT is a complex and uncertain field, but hybrid TV seems to be a promising direction.

Final conclusion: while areas such as Latam may provide telcos with some more growth, wholesaling (open access) appears to be the way to maximise the value of a network. FTTH and LTE carry the lowest possible technology risk. OTT is a promising but complex development.

Integrated operators should be prohibited to provide VAS

Some traditional network operators claim that open access (unbundling or WBA) is not necessary to establish competition, since subscribers are free to choose any over-the-top service they like. Sounds crazy, buy maybe it can be made to work.

The familiar 3 layer model (passive, active, services) can be extended by splitting the lowest and the highest levels:

• Layer 0: trenches, ducts, PoPs
• Layer 1: fiber
• Layer 2: equipment
• Layer 3: access services
• Layer 4: value-added over-the-top (OTT) services

Both at the lower end and at the higher end, this raises problems: natural monopoly and net neutrality, respectively.

Few people will maintain that multiple fiber networks can be laid in a financially viable way. You don't want to build a complete network for a 50% (or even 33%) maximum penetration. Hence, the natural monopoly.

Also, few people see OTT as a viable model for competition. They want open access at layer 1, 2 or 3. The trouble is: the network owner competes with the OTT players, but has all the goodies (billing relation, presence and location information). OTT players have one big asset only: brand name. Hence the net neutrality issue.

Suppose the natural monopoly would lead to a single vertically integrated network, with competition played out only at the OTT layer, then net neutrality issues can be resolved by prohibiting the network operator of providing any value-added services (VAS) - just basic Internet access, which is not a VAS but a basic access service (although business providers usually describe it as a VAS). In other words, a monopoly operator should be prohibited to provide any broadcast, video or voice services. Or spin-off the services devision; not Internet access, but just the VAS and content services.

Google Fiber update #11: over 1,100 communities

Product manager James Kelly for the Google Fiber project through a blog post communicates that over 1,100 communities have responded to the RfI, issued February 10. "Over the coming months, we'll be reviewing the responses to determine where to build. As we narrow down our choices, we'll be conducting site visits, meeting with local officials and consulting with third-party organizations. Based on a rigorous review of the data, we will announce our target community or communities by the end of the year."

Google Fiber update #10: Candidate cities, towns, counties and states

This is the latest overview of Google Fiber candidates for today's deadline:

• 233 entries across 45 states/territories.
• States/territories: Hawaii, Michigan, New York, Washington DC.
• States absent: Arkansas, Delaware, Mississippi, New Hamspire, North Dakota, Wyoming.

My guess: Jackson, Mississippi.

Google Fiber update #9: Wrap-up

Google Fiber from Benjamin Schmanke on Vimeo.

Here's a follow-up to the Google Fiber coverage - and I'm sure we are missing a lot. Tomorrow is the deadline: March 26.

Open access. In the Netherlands, a Task Force of the Ministry of Economic Affairs recommended municipal funding to be granted to open access networks only.

1 Gb/s. Ars Technica has an article on the Case Western Reserve University in Cleveland. Its open access point-to-point network is in fact a trial similar to Google's, running for one year. CPE is from Netherlands-based Genexis.

Cities. Since our previous update, we picked up another 32 towns planning an application. Multiple towns from California, Arizona, Michigan, Idaho, Iowa, Alaska, Georgia, Washington. Most conspicuous are Milwaukee and Detroit.

Overview. Looking back, we counted around 190 towns across 40 states/territories, as well as several counties and entire states/territories (Hawaii, Washington DC, Michigan, New York). States missing in the list are: Arkansas, Delaware, Maine, Mississippi, New Hampshire, New Mexico, North Dakota, Ohio, Rhode Island, South Dakota and Wyoming. States contributing the largest number of towns are:

• California: 24 (ao San Francisco and several Silicon Valley towns: Cupertino, Mountain View, Palo Alto, Sunnyvale).
• Michigan: 16 (ao Detroit).
• North Carolina: 12.

It's anyone's guess now. I suppose Google's Minnie Ingersoll and James Kelly will have a hard time. There are no details yet beyond the original statement. The three states mentioned here may have a slighly higher chance, esp. California being the home state to Google. Apart from that, perhaps a city will be picked that shows a diverse geography and demographic, because Google intends the whole thing to be a trial of changing user habits on the availability of a 1 Gb/s connection. The survey mentioned here doesn't really seem to be relevant.

Google Fiber: update #8

Google's Fiber trial plans are drawing to an end. Applications are due March 26.

There are overviews available here and here, but nowhere as extensive as on this blog.

Open access: Not a word in the US National Broadband Plan, but you can read Herman's piece on the Amsterdam case here.

Cities and towns:

• Michigan: Kalamazoo, Genesee County, Saline/Pittsfield, Ypsilanti, Canton.
• California: Fresno, Mountain View, Long Beach, Berkeley, San Mateo
• South Carolina: Spartanburg, Greenville County
• Virginia: Richmond, Charlottesville
• New York: Rochester/Monroe County, Tri-Lakes area (Harrietstown, Lake Placid, Saranac Lake, Tupper Lake, North Elba)
• Massachusetts: Worcester, Shrewsbury, Westborough
• Indiana: Anderson, Chesterton
• Other: Gainesville (Fla), Reno/Sparks/Washoe County (Nevada), Apple Valley (Minn), Pleasant Prairie (Wisc), Houston County (Georgia), Vancouver (Wash), West Des Moines (Iowa), Tulsa (Okl), Hickory/Newton/Lenoir (NC), Fort Collins (Col), Park City (Utah)

Google Fiber update #7

Since the previous update, many more cities have launched plans to be included in the Google Fiber trials. A lot of activity in Virginia (Williamsburg, Hampton, Virginia Beach, James City County, York County, Albemarle County and Alexandria (see this post)). The state of Michigan is campaigning, and several towns independently (Birmingham). Next, several towns in Montana (Missoula, Bozeman, Butte), Missouri (Springfield, St Louis), Texas (Woodlands, Longview), North Carolina (New Hanover County, Wilmington), Pennsylvania (Allentown, Bethlehem), Florida (Leesburg, Palm Coast) and Iowa (Iowa City, Cedar Rapids, Ames).

Other cities include: Tempe (Ariz), Boulder (Col), Petaluma (Cal), Memphis (Tenn), Bloomington (Ind), Louisville (Ken), Concord (Mass), Garrett County (Md), Galesburg (Ill), Renton (Wash), Gresham (Ore), Morgantown (WVa). In other words: large and small cities alike.

There's a short overview with videos here.

When it comes to 1 Gbps, wireless isn't standing still (see previous post).

Google Fiber update #6: Duluth Mayor takes a cold dip

Google Fiber, update #5

Cities: Since the previous update, many more cities have sought publicity over Google's fiber plan:

• In California (Merced, Ventua, Chico, Rancho Cucamonga), Massachusetts (Newburyport, Brookline, Fitchburg), Wisconsin (Superior, Appleton), New York (Tompkins County, Rochester), Michigan (Lansing, Flint), New Jersey (Jersey City, Montclair).
• As well as Lehi (Utah), Burlington (Vt), Huntsville (Ala), Twin Ports (Minn), Palm Bay (Fla), Quincy (Ill), Des Moines (Iowa), Johnson City (Tenn), Prince George (Wash), Omaha/Council Bluffs (Nebr/Iowa), Columbia (Missouri), Bristol (CT), Asheville (NC).

Open access: Telecom NZ's former CEO, Theresa Gattung, has written a book on the events leading up to her departure in 2007, after the government forced separation between network (Chorus) and services. It will be published by Random House March 12. I wonder what went wrong there ....

Name changes: The Topeka Golden Giants changed their name to Google Golden Giants for the month of March. And the city itself wants to be known as Google, Kansas, for the same period. Sarasota (Fla) wouldn't stay behind and renamed City Island Google Island. Rancho Cucamonga (see above) finally is also in for a name change: Rancho Googlemonga.

Background stories: The subject is picking up steam, running up to the March 26 closing date for applications. See Ars Technica, Business Week.

Google Fiber update #4: coming to Holland?

The latest developments around the four pillars of Google's OA FTTH trial plans.

1. Technology. Costas has a funny map, turning PON upside down. Meanwhile, Cisco is preparing an event March 9 for a "significant announcement that will forever change the Internet and its impact on consumers, businesses and governments". According to the Financial Times, they are working with US carriers. Would that be exclusive arrangements, or could Google buy the same technology from Cisco?
2. Bandwidth. Apart from another move toward 1 Gb/s (FibreCity in Bournemouth, but only as a 'power boost'), there are also several intermediate steps to 200 Mb/s (XMS in the Netherlands; Virgin Media expanding its trial in the UK; Novus in Vancouver).
3. Cities. US candidate communities seem to be concentrating in a select number of states. Newcomers again are mainly in North Carolina (Greensboro), Michigan (Ann Arbor, Holland) and California (the expected Palo Alto, Saratoga, Sunnyvale, La Jolla, Redding). Others include Washington DC, Baltimore, New Orleans, Topeka (Kansas), Mason City (Iowa), Peoria (Illionois), Charlottesville (Virginia).
4. Open access. Last week it was ETI, this week ECI Telecom making the case for open access. Further, HeLi Net teams with PacketFront to market open access FTTH in Germany.

Google Fiber: Update #3

New developements regarding the four basic specs of Google's OA FTTH trial plan:

1. Technology. Gordon Cook presented his latest Cook Report (Building A national Knowledge Infrastructure - How Dutch Pragmatism nurtures a 21st Century Economy), which draws on SURFnet's mission in the Dutch science sector and beyond, as innovation is its mission. I recently spoke with the newly appointed CTO about SURFnet's hybrid optical network. Would Google be interested in these new developments?
2. Bandwidth. Shaw Communications, an MSO in Canada, is planning FTTH for new appartment buildings, providing up to 1 Gb/s, which is rapidly becoming the new standard.
3. Cities. Facebook holds dozens of grassroots plans. Communities that have expressed interest so far include: Seattle, San Francisco, UTOPIA (16 towns, 500k pops), Somerville (Mass), Austin (Tex), Columbia (Missouri), Winston-Salem (NC), Fayette County (Georgia), Hawaii, Duluth (Minnesota), Madison (Wisconsin), Pittsburgh, Portland (Ore), Bellingham (Wash), Muskegon (Mich), Raleigh (NC), Durham (NC), Auburn (Alabama), New York State, Chapel Hill (NC), Carrboro (NC). More initiatives at: Grand Rapids (Mich), Kirksville (Missouri), etc.
4. Open access. See ETI's report in the previous post.

Wholesale regulation stimulates investment

Here's a report, "Regulation, Investment and Jobs", from Economics and Technology Inc. (ETI), sponsored by PAETEC, Cbeyond (see this cute little post), Covad Communications, Integra Telecom, tw telecom and Public Knowledge, submitted to the FCC. There is a similar report from ETI for MTS Allstream. They kind of support the findings of the Berkman report: "elimination of many vital wholesale regulations of the Bell Operating Companies resulted in less investment and significant job reductions in the telecommunications sector over the past several years." Re-introducing wholesale would contribute "a conservative estimate of a $66 billion improvement in the Gross Domestic Product and the creation of 234,000 jobs in the US economy."

"Similar to the recent announcement by Google that high speed fiber networks that it proposes to trial in a few communities on an open access basis to promote a choice of service providers for end users, regulatory policies should promote open access for broadband networks."

Second thoughts on Google's open access FTTH plans

The dust hasn't even begun to settle, but here are some 'second thoughts' on Google's FTTH project.

• Topology/technology. Looks like point-to-point, but who knows what Google will come up with, and who the suppliers will be.
• Bandwidth. 1 Gb/s is quickly becoming a new benchmark.
• Cities. I suppose towns that unsuccessfully ran munifiber attempts in the past are most likely to be included. Possibly Palo Alto - and Seattle has already enlisted.
• Open access. Apparently, Google has no plans to become an ISP or include voice or video; it wants to build just an IP data pipe. This raises lots of obvious questions. It looks like a huge bet on over-the-top (OTT) for all services. FTTH would be the last step, combining all previous efforts into voice (Google Voice), video (YouTube) and other applications. And it looks like YouTube is only just beginning to provide video-based content. Also: imagine a traditional triple play provider seeking access to the network ....

Google plans open access FTTH trials

This is probably the single most exciting announcement for some time: Google plans one or more FTTH trials in the US, working with municipalities. They will be open access networks offering 1 Gbps (so that looks like a next-gen point-to-point network) at 'competitive prices', reaching 50-500k people. Google asks states, counties and cities to respond to an RfI (until March 26).

Google's goals: see what can developers and users do with it; learn new ways to build FTTH.

Some thoughts:

• Google already has extensive infrastructure, mostly backbones and datacenters. Adding the last mile would be the final piece before Google can actually turn into the Internet.
• There will be a lot of people worrying over Google becoming too powerful and too much in control. Hence open access, but will that be enough? Who will object? Apple perhaps. Verizon and Comcast will be worried, but not be able to cry foul.
• Google itself is clearly frustrated with the level of competition and pricing, the speeds available, the reach of current high-speed networks, the ARRA Act and the lack of open access.
• Once markets are chosen, community efforts may be launched because penetration makes the business case fly. To offer 100x more bandwidth effectively rules out markets where Docsis 3, FTTC/VDSL or FTTP are offered. Hence, it may stimulate Comcast, AT&T and Verizon to quickly roll out their own version of an NGA network. This will lead to a price war.
• Google has hoards of cash. At the recent Q4 earnings it was announced that cash and equivalents stand at $24.5 billion. At 1,000 $/home, connecting 500,000 homes would cost $500m - and the network will be cash flow positive way before they burn through it all, turning the network self-financing and able to connect the entire country.
• Saying it will be 1 Gb/s, implies point-to-point since current GPON implies 2.5 Gb/s down (and 1 Gb/s up) shared among 32, 64 or 128 subs. No explicit mentioning symmetrical connections though, but I am sure Google is going for the ultimate thing.
• The Bill & Melinda Gates Foundation recently proposed connecting all institutions in the US to fiber. Could the arch-enemies work together to fight the cable (Docsis)/telco (FTTN or non-open FTTP) duopoly?
• The RfI to states, counties and cities has unclear implications. Is Google asking them only to be a candidate, or could Google want deeper involvement, such as co-investment? Most likely cities that had munifiber plans in the past, which were shot down by the cable/telco lobby, will have a new chance to connect to fiber. They will be lining up. How about Palo Alto, California?
• Google plans to experiment with the latest techniques. They can build on international experience and do things first-time-right. However, the US is a unionised country, isn't it? And you need construction firms to do the dirty work.
• Open access, hence access to any service provider. This could mean that Google will build both the passive and active layers. In theory, Google could also be a service provider itself (after all, they say "We plan to offer service at a competitive price"), but that would mean competing with its own wholesale customers. I suppose they will need to be an ISP themselves - unless their wholesale prices are low enough to attract competing ISPs.
• Offering open access flies in the face of the FTTH Council NA, that is supposed to protect the interests of its members. Yeah right. It was about time that somebody with a long-term view and focus on customer happiness entered the market. Now we only need Google to make a trip around the world.
• What will the regulator do?
• Google wants to move quite fast. The RfI runs until March 26.
• The Google stock ended the session down just 1.5% (this by the way equates to $2.5bn). That is encouraging. Investors are not scared off by Google plans. Incumbents worldwide should take a lesson and be less afraid to 'dig in'.

Open access coming to another HFC operator

CAI Harderwijk, one of the nation's 26 or so cable companies, has decided to open up to third-party ISPs. In the Dutch cable sector, this is not quite the first time; Kabel Noord has UPC and Ziggo as service providers. And Ziggo provides services over several non-owned private networks. CAI Harderwijk itself offers voice and internet services form CAIW, another small MSO. But now, an FTTH-focused ISP will launch services on CAI Harderwijk's HFC network: Solcon - which had a few conditions of its own: high-speed symmetrical bandwidths and full fiberisation of the network.

Obviously, we need some answers on how CAI Harderwijk is tackling these issues. On their website, they claim to offer symmetrical services, which should be possible through channel bonding, of up to 100 Mb/s. It's a Dutch first.

Here is another rift in the cable ranks, normally quite outspoken against both FTTH and open access (OA). It will be interesting to see how the cable lobby group NLkabel will respond. After all, CAI Harderwijk and Kabel Noord are both members.

IMHO: the question is not if, but when Liberty Global will adopt FTTH and Ziggo will adopt OA.

FTTH Council North America opposes fiber unbundling

The FTTH Council North America and the Telecommunications Industry Association (TIA) of the US filed comments to the FCC, asking it not to follow up on a petition from Cbeyond, aimed at unbundling FTTH/FTTC.

This is appalling on different levels:

• The Council should be very careful taking sides in a regulation debate. Obviously, it is controlled by the large US telcos, which explains a lot. The question now is: what will the other FTTH Councils say? I cannot imagine the FTTH Council Europe agreeing on this issue. And more importantly: what will the FCC do?
• Open access is not just good for the broadband market, it is good for operators as well. Fortunately, the number of telco's understanding that in an IP world telecoms is a volume-business, not a price-business, is on the rise. Switzerland has been taken down, and recently Australia. Belgium wil be next. Obviously, it is good for vendors as well because open access means a larger addressable market.
• Verizon is the only major ILEC doing FTTH. There are several dozen local telcos and municipalities, but at the current rate, the US will not reach 100% FTTH before the 22nd century.
• The Berkman study from Harvard is dismissed, which makes one frown, to say the least. The study concluded, from international research, that open access leads to higher penetration, lower prices, more capacity and higher speeds.

True innovation arises at the active layer

My daughter was out horseback riding over the Easter weekend. Her teacher is new to the village where we have our country home and the business model deployed is really interesting.

The teacher rents space from an old farmer, who decided to take it a little easier. He was never into horses; his business was both milk and growing corn and wheat. Now, all he has left is a bunch of pigs. In other words MoF (milk over farm), PoF, CoF and WoF, but no HoF. He is still in control of the farm (the passive network of meadows, water, fences, etc.) but the young woman who co-locates at the farm, brought her own horses (active equipment, so to speak). She also does the teaching (the retail services) and the whole thing really works well. Right now, she is the only person co-locating, but I suppose the farm is big enough to be able to host a few more animal (horse, donkey, whatever) keepers. Or a service provider who knows how to teach the pigs a few tricks and sell the service.

So here is what is going on:

• Complete separation of passive and active elements.
• Vertical integration of active elements and services.
• No cannibalisation of legacy income streams. All interests are perfectly aligned.
• It remains to be seen what will happen once the farmer decides to allow another (horse) keeper to co-locate at his farm. There doesn't seem to be a reason for the farmer to keep the newcomer at a disadvantage, so it looks like this will lead to some competition.

Catching up on some old newspapers, a story about the Dutch railway system caught my eye. There has been structural separation between the passive elements (tracks, safety system, etc.), which are controlled by state-owned ProRail, and the active elements (stations, other real estate), owned by NS. However, there is still integration of the active level and a service provider (NS). Also, NS provides wholesale services to competitors.

Generally, the model seems to be working fine, but recently, new service providers have started to complain. They have a hard time competing with NS because the latter controls the active layer and provides wholesale services. Newcomers, that typically run services over regional lines, are at a disadvantage viz-a-viz NS as a service provider when it comes to renting office space at stations, the use of stations for consumers (competing trains are often at the far end of the platform, sometimes hundreds of meters away) and infomation to travellers.

A committee has proposed to take away wholesale service provision from NS and create a new company for that purpose or ask ProRail, the network owner, to perform this service.

To summarize:

• Complete separation of passive and active elements.
• Vertical integration of active elements and services.
• Full cannibalisation because there is just a single service: travel. The 'pie' most likely isn't growing very much, unless service levels at competitors are higher, which may draw travelers away from their automobiles. Right now, this doesn't seem to be happening, as witnessed by competitor complaints. To be sure: the pie is growing somewhat because competition has urged NS to raise its level of service.
• Vertical integration of the active elements operator and the dominant service provider seems to be an inhibitor for the system to really work. (Art Price would say: You can't compete with your customers.)
• Adding wholesale service to ProRail would effectively collapse the passive and active layers into a single network layer. It doesn't seem to be a bad idea, because there doesn't seem to be room for a competing active operator anyway.

Transporting these events to the world of telcos, my conclusions would be:

• Meaningful innovation arises at the active level (HoF is new to the farm). Innovation at the service level probably has more to do with service levels (railways are about taking people from A to B - no more, no less).
• Newcomers co-locating compares to xDF access (MDF, SDF, ODF).
• Newcomers not in control of active elements, are sold wholesale broadband access (WBA) by the operator.

If co-locating horses is like buying xDF access from the farmer (owner), and if providing travel services is like buying WBA from NS (operator), then what would it be to ...:

• ... buy WBA access from the horse keeper (operator)? A newcomer wouldn't bring his own horses. Service levels may rise, but innovation is questionable. If a new service provider wants to sell new services, it is dependent on the horse keeper to teach the animals new tricks. But then the new tricks could become available to all service providers.
• ... buy xDF access from ProRail (owner): A newcomer would bring along his own stations. It could be possible in theory, because many stations are too small anyway and serve as bottlenecks, degrading service levels. How about this for a stimulus plan?

Final conclusion:

If there is scope for true innovation, xDF access must be available (wholesale service provided by the owner); if innovation is merely about raising service levels, WBA is sufficient (wholeale service provided by the operator).

That's the question!