DSL Prime News Briefs

DSL news from North America and around the world.

by Dave Burstein of DSL Prime and Future of TV [April 12, 2005]

In the works

• Brusca and Kingdom team at the DSL Forum, video on 100 Mbps VDSL, Dave Dorman's campaign speech for SBC president, the Kevin Martin project, Agere and other new network processors, Don't risk the college fund in small DSL companies, Covad's choices, lots of TV stories, bonded ADSL2+ shipping, and much more. If you have information you would like to share, please visit the DSL Prime website.

Corrections and clarifications

• My note that John Atterbury remained senior at SBC Project Lightspeed was out of date last issue; he retired last month.
  
  
• Three readers, including a senior FCC official and one of the best reporters in Washington, pointed out to me that the BellSouth N_k_d DSL ruling was on procedural grounds, that the feds ruled they, not the states, should make the decision. I knew and should have included those facts, even though I believe them a total cop-out. Before the feds ruled, people in four states could buy connectivity without paying for an unwanted, over-priced phone service, and other states were ready to follow. After the ruling, N_k_d DSL was no longer available. Results count more than rhetoric. The details of the law are murky enough honest judges could have gone either way on the technicalities, as several states already had. More to the point, the Chairman could have whispered to Duane Ackerman at BellSouth that the result of the petition could well be a federal mandate to offer a plain connection at a reasonable price. Ackerman is smart enough to withdraw if he heard that. But perhaps the Notice of Inquiry squeezed into the decision in the long run will bring results.

e-mail

• I couldn't agree more with M., a fellow reporter, who writes the cable plan for 1 gig down and 100 meg upstream "might limit the types of communication services available from cable operators and independent service providers relying on cable modem connections, and the penetration rates and business models these services can support .... One could argue that this situation leads to a bias toward treating broadband customers as consumers of content vs. creators and suppliers of content and services, since large-scale expansion of the latter role (particularly if it included bandwidth-heavy high-res video) could cause acute bottlenecks in cable upstream capacity." At Fast Net, we raised that question with John Chapman of Cisco, who explained the asymmetry was driven by operator's plans to sell services. Bill Huang of UTStarcom didn't think that wise; the Japanese experience was that consumers want the upstream for P2P.

Briefs

• Telmex is ordering 130,000 home gateways from 2Wire, indicating continued strong growth, Todd Kaufman of Raymond James reports.
  
  
• For job ads, visit the DSL Prime website.

Press

• "This drives a stake into the heart of Qwest," is Pat Commack's colorful description of the Verizon-Carlos Slim deal, picked up by Ross Wehner. Wehner also got right the price is more like $27 or $28, including the value of the future payment. The Journal, NY Times, and Washington Post missed "Verizon will pay the Slim entities an adjustment at the end of one year in an amount per MCI share equal to 0.7241 times the amount by which the price of Verizon's common stock exceeds $35.52 per share" in the press release.

Wall Street

• Anton Wahlman broke the story that SBC was choosing Scientific Atlanta for their headend system more than a month ago, making me wonder why reporters gave so much ink to the press release.
  
  
• Mark Sue of RBC expects U.S. 3G sales to drop, and reduces sales estimates for Lucent, emphasizing how much Lucent has become a wireless equipment company.
  
  
• Lehman's Steve Levy considers Lucent "the most attractive investment in our universe. ... the core thesis for Lucent remains intact—that is: sustainable 5 percent top line growth combined with aggressive cost reductions resulting in 25 percent EPS growth over the next several yrs. ... Lucent now generates more than 70 percent of its sales from Wireless Infrastructure and Services revenues, segments of the market that should be able to grow. ... Verizon Wireless and Sprint PCS ... represent an extremely solid underpinning for Lucent and we estimate they generated about 28 percent of the company's total 2004 sales." I've been reporting the struggles Lucent is having in what I cover, DSL and fiber. Levy is suggesting they are doing well enough in other areas to more than compensate.
  
  
• Call John Hodulik of UBS "billion dollar John," reflecting the price rise in BellSouth the day he put a "buy" on the stock. (Verizon and SBC didn't move and there was no other news, so the market gain was almost surely due to the recommendation.) SBC a year ago fell $5 billion after Adam Quinton at Merrill put a "sell" rating, which was given enormous credence because of how rarely they dare say "sell" on such a large prospective banking customer. Hodulik has consistently pointed to long term issues at telcos, with access lines going down and cable competition increasing (memorably writing "Sayonara to voice"), but saw a short term opportunity in BellSouth because of good news at Cingular.

Copyright 2005 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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