DSL Prime News: The Inside Source — continued

CopperCom: No more Voice over DSL
Hopes for their Class 5 switch, new CEO Mike Myers
Coppercom's abandoning VoDSL, although Martin Taylor promises to continue to support all existing customers (Broadview, Sprint local in Las Vegas, Choice One), and has stockpiled spare parts for them. Coppercom now is concentrating solely on the switch business they acquired. Taylor was very proud that their softswitch now "is shipping with true Class 5 features." Mike Myers is taking over as CEO, leaving Alcatel as Europe exercises more direct control. Cynthia Ringo remains Chair.

General Bandwidth lays off 60 percent
Coppercom's not alone in struggling; even part-ownership by SBC hasn't brought General Bandwidth enough customers, so they had to cut back to extend their cash. Their original plan was to win the business of two or more big carriers, back in 2000 when SBC thought they'd have to fight cable companies by offering four voice lines at home. But AT&T pulled back, wireless went to flat rate and started taking down line demand, earnings shortfalls destroyed capex, and the Bells decided to wait till 2004 or later to respond. By then, VoIP should be ready; Craig Lee of Nuera tells me he's seeing customers for VoIP in Asia, and of course Cisco is selling volumes of VoIP into enterprises worldwide. Today, General Bandwidth is looking for a new customer base, perhaps for voice over T1 or IP instead of VoDSL.

Dave's big error: VoDSL was going to be big
I made a major mistake, joining the industry consensus in 1999 and 2000 that VoDSL was going to be "the next big thing." I reported it was the hit of SUPERCOMM 1999, and that SBC, Verizon, Rhythms, and others were close to large deployments. Coppercom, Jetstream, and Tollbridge were turning down billion dollar offers expecting more from an IPO. After all, they were far ahead of Accelerated Networks, which had a market value over a billion dollars.

The business case looked great: run 4, 8, or 16 voice circuits over a single copper pair. I was so convinced, I hinted to one of them I'd give up DSL Prime if they wanted to hire me. I too dreamed of options making me millions.

The problem wasn't technology. Technology problems have been solved, although some latency and signalling problems proved tricky. But CLECs died like flies, taking that market away. The ones who remained discovered that VoDSL carrying the calls to the switch was just the first step toward telephony, with billing, OSS, customer support, and marketing being far more difficult. Remaining CLECs (Broadview and Network Telephone in the U.S., QSC and Versatel in Europe, Hanaro and some others soon in Asia) are a much smaller market. Alcatel's VoDSL board, Paradyne's remnant of Jetstream, and TdSoft from Israel are still in the market. VoIP and softswitch vendors are all looking to fill the gap as well.

Video over DSL in the future?
Livingstone Telephone in Texas is deploying a video system with Videotele servers and AFC DMAX's. Riverstone supplied the metro routers at 75 percent less then they would have cost not long ago. Costs for every step of the video chain will keep coming down. I believe video is often cost-effective today, but telco folks with the money to invest obviously disagree—for now. Video on Demand (VOD) has become much more affordable, according to a cable company recently costing servers and headends. Gigabit Ethernet (over their own fiber) is another big cost improvement

Copyright 2002 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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