DSL Prime: Telcos Ready To Scrap Old Iron

The telcos of the world are now ready to admit that IP is cheaper. As the old buildings full of physical switches vanish, a new telecommunications world arrives.

by Dave Burstein of DSL Prime and Future of TV [November 30, 2005]

"A 40 story building full of relays, just a modern version of a junk yard."
—Bob Frankston's description of a (large) telephone exchange.

It is now cheaper to serve a home phone line with DSL than without DSL.

That follows from the conclusion Bill Smith of BellSouth, Matt Bross of British Telecom and Larry Babbio of Verizon have reached: that the time is here to replace everything with IP.

Discussions in Las Vegas with four Bell CTOs—Bill Smith, Mark Wegleitner, Balan Nair and Chris Rice—made it clear any new build or complete phone network designed today will have DSL (or fiber) for everyone. Matt Bross at British Telecom set the model, deciding to replace essentially everything in three to five years, and "turn off the PSTN."

Bill Smith of BellSouth has now confirmed a similar plan, although without the dramatic slogan. "They may still use their old analog phone, but everything on our end will be digital." Transforming a network the size of BellSouth to "everything digital" over five to ten years is a large task, but Bross contends it can be accomplished without raising capex and quickly pay off. The four CTOs agreed today's IP based systems are 30 percent to 60 percent cheaper to run than the old PSTN. The greatest savings, but highest capital cost, will come from Verizon's fiber, set for 15 to 20 million lines of fiber on an IP network by 2010.

Smith, highly respected, will likely inspire others to rethink their current slow conversion. What was denounced as radical three years ago now is driving the deployments of some of the largest companies in the world. Add the switch to wireless to the mix, and we have interesting times.

Jennie and I are headed for the Chairman's Dinner in D.C. on December 8. Please don't laugh at my penguin suit—think of it as a Linux emblem, not formal wear. [Ed. note: Dave, the tux is nothing to be embarrassed about.]

Kevin Martin made an important gesture two years ago when he outlined his projected decisions on major issues in a remarkably candid December speech, and ask openly for comments from all. I'm not sure whether the Chairman, with a new baby on his mind, will speak as expansively this time, but I'm looking forward to hearing him. Jeff Pulver, continuing his crusade to bring the best technologists to Washington, has invited me to join an interesting group. See you there.

Stories to come:

• Broadlight's financing from Motorola and Tellabs suggests Verizon's choices,
• Expanded China IPTV,
• Rupert Murdoch in talks with Verizon for DSL and EVDO backhaul for DirecTV super set tops,
• Huawei building a network across Ireland for Smart
• 90 percent of Swedish teens use Lunarstorm.

7 percent of Japanese People Can't Get DSL
MIC figures differ from company reports
While most Japanese live in dense urban areas, large portions of the country are poor, rural, and losing population, especially in the outer islands. Paradyne, now Zhone, found some success with long reach products on Shikoku Island, but the carriers have left some major areas unserved. The cities are moving rapidly from 10 Mbps+ to 100 Mbps, with two million fiber subscribers and millions of lines of VDSL likely by 2007.

Buildout, Dell Computer Bundle Ups Aliant Canada
Fighting back against strong cable
Add $15 Canadian ($12.60 U.S) each month to your DSL bill, and get a Dell computer. The total, over 36 months, is less than the computer would cost with credit card interest rates, and pushed Eastern Canada's Aliant to 18,434 net adds. That's a 10 percent increase in a single quarter, to 196,000. Over the last year, Aliant has gone from 67 percent to 79 percent coverage. Churn is 2.2 percent, ARPU slightly increased at $33.51.

Eastlink Cable has led a ferocious assault on the Bell Canada controlled Aliant. Chris Li of Merrill reports, "Aliant has lost an average of 33 percent market share in 32 exchanges as of August 2005," and is requesting regulatory relief in that territory. Glen Campbell notes incumbent share is down 8 percent to 72 percent in Halifax. Bell Canada has more sorrow to come; Campbell notes Canadian businesses have not yet moved aggressively to VoIP. I bet they will.

*** Wireless Communications and Universal Service
December 9, 2005 Columbia University Uris ***
Hall A particularly strong program, with Eli Noam, Heather Hudson, Michael Minges, Bob Rowe, Simon Wilkie, Johannes Bauer, Michael Riordan and many more. http://www.ersvp.com/reply/event12825 (psa)

ADSL2+ with HomePlug built in
Aztech asserts 85 Mbps over home power lines
Just plug in Aztech's new router and every computer in your home can connect with a simple plug-in unit. Justin Chieh writes, "We have a number of Telcos/ISP keen to try this out. It has with an integrated 100-250V AC C8 power inlet to plug in the appropriate country power to make it even simpler. "

That's the potential of HomePlug Turbo, darn attractive to this writer, who has had several problems in his own home network. Years of disappointments from home powerline make many skeptical, but Bell Canada just led a $24 million funding round, with investments from Intel, Motorola and Goldman Sachs. The cost to a telco of stringing CAT 5 around the home to distribute video is brutal, but reusing existing home wires (phone or cable) hasn't solved all the problems either.

SercoNet's highspeed home wireless system, Danny Briere tells me, is offering similar ease of use. Briere describes it as "a highspeed home wireless repeater that uses the phone lines for transmission." It worked so well that the longtime industry guru didn't want to return his test unit.

Danny added, "I'm similarly intrigued by the HomePlug stuff. I think within the next 12 months, home networking issues will largely disappear."

Ron Cates of Metalink also believes the 802.11n chips his company has close to market will cover most homes at the necessary video speeds. I hope they prove right.

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

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.