DSL Prime: SBC, Please Just Do It

DSL Prime has been saying that SBC and could deploy DSL in the U.S. for years. They should get to work in the field and stop focusing on handouts from the government, following the example of BellSouth.

by Dave Burstein DSL Prime [July 3, 2003]

BellSouth Georgia to 100 percent of COs
Why are EU, Australia and SBC still asking for subsidies?
France Telecom just announced they'll offer DSL in "every town over 2,000" because new small DSLAMs have proven the service is profitable wherever the telco has fiber. BellSouth has long been the U.S. leader, reaching every CO in North Carolina a while back and now to Georgia. Germany, Korea, Belgium and others reached almost all exchanges last year or before, and Verizon's 80 percent in 2003 and SBC's 80 percent in 2004 imply similar.

That's little consolation for the many in the U.S. behind unserved remote terminals or more than 15,000 to 20,000 feet from the CO, of course. Many of the remaining 20 percent can be served profitably, but the bells are still holding out for 30 to 50 percent returns on investment and going slowly. Fortunately, the economics of baby DSLAMs and repeaters keep getting better: Verizon's Telus is buying in large volumes, Catena has some sales for upgrading SLICs, and the smaller telcos are far ahead proving repeaters work well.

In 2000, I wrote
Universal broadband service is practical and affordable
The story above, and especially the German and French practice, led me to look back and reprint some of the article.
Every telco, not just SBC, should offer it
The United States is committed to bringing broadband to all its citizens. SBC, one-third of the US, has made that pledge (2003—remind Ed Whitacre), so it's clearly possible. FCC commissioner Gloria Tristani explained "We cannot afford to become a society of information haves and have-nots in a world in which the ability to access and manipulate information is the currency of the day."
Compared to the $300 or so in marketing it costs to acquire a customer, these techniques are inexpensive, with likely added costs per subscriber of $50-$200 They can extend your market 20 to 25 percent, so we think they are good business as well as the right thing to do to serve your communities. Problems remain, but your engineers, if mandated, are good enough to solve them.

Here's how to do it:

DSL can deliver megabits at 25,000 to 30,000 feet with repeaters
$20 of components, or less, is all it costs to build a repeater that can double the reach of ADSL. Because the primary market for this product is telcos, it won't be produced without your support. Given support, it can be produced and installed inexpensively—and bought in telco quantities the cost will be low. But unless you prove this technology is impractical, you're deceitful telling regulators or customers DSL is limited to 12,000 to 18,000 feet.
Millions more can be served if you test their lines
We were skeptical when Teradyne reported that millions more could be served if the telcos changed procedures and tested lines more thoroughly, but have confirmed the story with one of the largest telcos. Currently, an enormous number of potential customers are being told they can't get DSL although the lines are perfectly able to support the service. Our guess is 5-10 percent of customers are mistakenly told they can't get service - more than the actual number with a true distance limit. Cleaning up lines will help millions more, as unneeded load coils and unnecessary bridge taps can often be removed and problems solved.
Every CO has the right DSLAM; DLC Remote terminals are cost-effective
An RBOC vp told us it was "simply too expensive to put a DSLAM in smaller COs" (2003—"Too expensive" was unlikely then and is certainly untrue today. Small DSLAMs are down to a few thousand dollars, and telcos around the world are profitably wiring their smaller offices. Assuming there's fiber capacity in place, true almost everywhere, there's a right sized unit, typically $2-4,000. For remotes, most telcos are following BellSouth's proven model of upgrading with an inexpensive baby DSLAM, or buying inexpensive upgrade boards from Alcatel, AFC, and Catena. France's 2,000 homes or hundred customer threshold is about right; if your calculations are different, put a better cost accountant to work or ask me to check the assumptions.)
Yes, 5 percent will be tough
Some, perhaps 5 percent, are extraordinary distances away or have lines impractical to clear. But satellite is cheap enough to fill in. (Note from 2003—In 2000, I looked at the consumer prices of a satellite connection to justify that claim. Since then, that price has gone up and satellite, while effective, remains disappointing. New satellites with more capacity will help.)

Announcements around the world encourage me to hope I won't have to repeat this article in another three years.

Copyright 2003 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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