DSL Prime News: The Inside Source  
March 4, 2002

Dave Burstein
DSL Prime

E-mail

• An Asian group about to buy DSLAMs wrote for advice on acceptance tests/field trials for DSLAMs. They're considering a standard model from an established vendor, so what kind of things should they consider? I wasn't sure what to recommend, suggestions welcome.
  
• Another company was looking for a used DSLAM. I know many units have come on the market, but am not sure where to recommend they look. Again, advice welcome.
  
• "Why would anyone need more than 3 meg, except for HDTV?" wrote one of the folks I respect most in the industry. He's right that movies can be effectively be pre-encoded to a meg or so (ask Intertainer), but live events encoded on the fly suffer if reduced to less than 4-6 meg. "The World Cup" was my answer, which Michael Rahier pointed to as a likely breakthru video on demand event. This year's matches in Asia are at totally the wrong time for European viewers, and VOD a natural market.
  
• Also, a company like his, installing equipment today, has to anticipate it will be in use for a decade. I already reject most movies on VHS, preferring DVD quality, and expect in five years many others will have raised their expectations. Odlyzko is right—superfast "Internet time" was a myth—but growth likely over 3-7 years belongs in every telco buying decision.
  
• Ron Stein of Paradyne is enthusiastic about their ADSL/R after the licensing deal with Alcatel, with others interested in joining to make an open standard. Paradyne is the first technology proven to deliver better performance on long loops. An Auto Mode feature will automatically select the best service method within seconds through a training sequence between the DSLAM and CPE.

Briefs

• Telechoice always has the most accurate numbers, and reported 4,363,000 U.S. DSL subs at yearend 2001. That was 542,000 more than the prior quarter. DSL Prime's number last issue was too high, because I forgot to subtract Rhythms.
  
• Our own DSL went down, and our trying to solve the problem apparently made things worse. So we learned a lot about the frustrations common in tech support, and also how welcome a good support can be.
  
• mPhase's new iPass works with any central office splitter and allows test equipment at the DSLAM to by the splitter. Instead of needing a field technician, it can be managed from your network control center.
  
• Q1 of 2002 looks disappointing at the telcos. Verizon has dropped the $29 three month promotion, and BellSouth has predicted a slowdown. SBC is overdue for a pickup.
  
• Net to Net's IP DSLAMs found another customer in German city carrier Pulsaar in Saarbrücken. They will officially release their gig-E backhaul at Cebit next month.
  
• Globespan joined Alcatel, ST, Ikanos and Zarlink in promising DMT VDSL interoperability before the end of 2002. Folks like John Cioffi have long contended DMT has advantages in compatibility and performance, but without working silicon that's remained theoretical. Ikanos and Zarlink actually have chips, but Alcatel has not yet publicly demonstrated their chip originally announced for 2000. Alcatel's DSLAM division needs a VDSL offering to compete with Lucent's, although few are deploying yet. TI was not a member of the new group; they had promised working silicon for last year.

International

• Matthias Kurth of Germany's RegTP backed off a confrontation with DT, instead continuing indefinitely an investigation of unbundling problems. That won't save the remaining CLECs, who need strong action, nor prevent DT from it's rumored slowdown in service expansion, now that the competition is decimated.
  
• South Africa is ready to begin ADSL deployment, and we hope the continuing privatization struggle does not slow things down.

Competition

• Comcast has begun tracking the Web browsing activities of its 1 million high-speed Internet subscribers without notifying them, AP reports after the story broke on Dave Farber's list and slashdot. Comcast made the dubious claim it is "part of a technology overhaul designed to save money and improve the speed of cable Internet service to its customers and was not intended to infringe on privacy." They have not answered specific questions about the data and how it is handled. I urge all providers to have a clear, meaningful policy that could become your sales edge over cable.

Chips

• Broadcom and Infineon/Savan have made strong progress on interoperability testing for VDSL, targeting Long Range Ethernet (LRE) and the EFM spec.

People

• Jeff Blumenfeld, who fought AT&T in one of the antitrust cases of the century, and his associates at Blumenfeld and Cohen are now affiliated with Silicon Valley law firm Gray Cary, with whom they intend to dramatically grow the D.C. practice.
  
• Todd DeBonis jumped from ishoni to Centillium, both places with a key gateway-on-a-chip product.
  
• Vivek Ragavan, ex-Redback CEO, has raised $75M more for metro optical Ethernet company Atrica. Wachovia reports investors BellSouth, Bezeq (Israel), France Telecom, Telecom Italia,and Telia as well as trials with Deutsche Telecom, France Telecom, and Telefonica.
  
• Enzo Signore, one of the most charming men in our industry, has moved over to be director of marketing for Cisco's network edge and aggregation routing group. James Collinge is now manager of product marketing for Cisco's DSL business unit. Enzo told us Cisco has a large worldwide customer base in DSL, but refuses to sell at unrealistic prices.

Wall Street

• Tim Horan at CIBC found a poison pill of tax liability if AT&T were purchased within two years of the Comcast deal.
  
• Pip Coburn of UBS is "modestly bearish" on tech stocks because "the forward P/E for tech as a whole stood at 44x as at the end of January, at the high end of the 10-year historical range of 20-44x." Telecom in particular has discouraging years ahead with "capex forecast to 17 percent decline in 2002 and a 5 percent decline in 2003". UBS sees wireline spending, both voice and data, declining $60B, a third, between 2000 and 2002. "Business momentum is horrid. Capex outlook from the carriers is showing no signs of improvement for the foreseeable future." That's continuing such a strong downturn nearly every equipment manufacture will struggle.
  
• DSL Prime, as always, avoids endorsing either recommendation. There have been massive drops already in prices—SBC is down $35B—so maybe the market has already reflected the negatives the analysts are pointing to.
  
• SBC's James Callaway sold $6M in company stock. Insider sales are usually overplayed, but I include this one because when I checked SBC at Yahoo, no insider at the massive company has been buying for several quarters. The dog that didn't bark.

Employment

• Ads are free for two issues to any company in the field looking to hire. Just send a short ad with a dedicated contact to jobs@dslprime.com. To view ads, visit the DSL Prime website.

Copyright 2001 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.