Showing posts with label FiOS. Show all posts
Showing posts with label FiOS. Show all posts

Monday, October 24, 2011

Is "4G Plus DirecTV" a Viable Alternative to FiOS?


Verizon Wireless seems to be cooking up an out of market “video plus broadband” plan, working with DirecTV. During its recent quarterly earnings report, Fran Shammo, Verizon Communications EVP said that the company was working on such an effort.

“You're going to see that come in the fourth quarter with the what we now call the Cantenna, which is not a commercial name obviously, but it's the antenna that we actually trialed with DIRECTV, which was extremely successful,” said Shammo.

Some will legitimately wonder whether that approach might even wind up being used in some Verizon markets where FiOS has not already started to be deployed. LTE plus DirecTV

There are some significant Verizon markets including cities like Boston, Buffalo, N.Y, Baltimore and Alexandria, Va. where FiOS construction has not started.

The obvious new question is the rational approach Verizon should take to upgrading its fixed-line network. There isn’t much doubt about optical access media being more resistant to some weather-related impairments than copper networks, nor is there much doubt that new optical facilities cost less to maintain than older copper networks.

But the business question is how much incremental investment ought to be made in the fixed network,  if video and broadband services can be provided using the wireless network. One might rationally argue that the cost of maintaining the fourth generation wireless network is lower than the cost of maintaining the FiOS network.

Obviously, if that is true then the avoided capital investment in new optical facilities is significant as well. That isn’t to argue that fixed and wireless networks are in any way equivalent in terms of absolute bandwidth. But there is a financial question.

If the expected revenue and operating cost advantage of FiOS, compared to 4G, does not provide the optimal financial return, then a wireless solution might be the most-rational way to invest new capital.

The problem is that voice is a negligible contributor to incremental revenue on a FiOS network, while video, though an important contributor of revenue, is not such a great contributor to profits. That leaves broadband, and revenue upside is tough.

That is not to say fiber to home facilities are unimportant, merely to say that they might not be the best use of capital for a provider that also is investing heavily in mobile broadband.

In fact, there is an interesting bit of data in the latest report from Akamai on global Internet usage. The global average fixed-line connection speed was 2.6 Mbps, and the global average peak connection speed was 11.4 Mbps.

Looking at mobile broadband connections, average connection speeds on known mobile providers ranged from 5.3 Mbps down to 209 kbps, while “average” peak connection speeds ranged from 23.4 Mbps down to 1.2 Mbps.

The interesting observation is that wireless broadband has the higher peak speeds, about double that of fixed line connections, with a variable “average” speed that in some cases also is twice as high as fixed-line connections, though such sessions are highly variable. When mobile broadband is slow, it is an order of magnitude slower than fixed line connections. Global broadband speeds

Thursday, April 21, 2011

FiOS Now 54% of Verizon Fixed-Line Revenue

Though wireless lead Verizon's quarterly highlights, as typically is the case, the company also reported continued progress with its FiOS business. In fact, FiOS revenues now are 54 percent of total fixed-line revenues. Some observers might well note that it has proven harder than anticipated to convince customers of the value of fiber to the home service.

Verizon recorded 6.3 percent year-over-year increase in wireless service revenues in the first quarter of 2011, with data revenues up 22.3 percent. Service revenues in the quarter totaled $14.3 billion. Data revenues were $5.5 billion, up $1 billion year over year, and represent 38.1 percent of all wireless service revenues. Total revenues were $16.9 billion, up 10 percent year over year.

Retail postpaid ARPU grew 2.2 percent over first-quarter 2010, to $53.52. Retail postpaid data ARPU increased to $20.51, up 17.3 percent year over year. Retail service ARPU also grew 2.2 percent, to $51.88.

Verizon added 1.8 million net new accounts, including 906,000 retail postpaid net customer addition. Retail postpaid churn was one percent.

Verizon also added 207,000 net FiOS Internet and 192,000 net FiOS TV additions, for a total of 4.3 million total FiOS Internet connections and 3.7 million total FiOS TV connections.

FiOS consumer retail revenues now represent approximately 54 percent of total Verizon consumer revenues. The company also saw a 12.8 percent increase in "strategic" enterprise revenues, which now represent approximately 46 percent of total global enterprise revenues.

FiOS Internet penetration (subscribers as a percentage of potential subscribers) was 33.1 percent by the end of the first quarter, with the product available for sale to 13 million premises. This compares with 29 percent penetration at the end of first-quarter 2010.

FiOS TV penetration was 29 percent by the end of first-quarter 2011, with the product available for sale to 12.6 million premises. This compares with 25.4 percent and 11.5 million, respectively, at the end of first-quarter 2010.

Broadband connections totaled 8.5 million at the end of first-quarter 2011, a three percent year-over-year increase. FiOS Internet connections more than offset a decrease in DSL-based broadband connections, leading to a net increase of 98,000 broadband connections from fourth-quarter 2010.

These are the most broadband net additions since the second quarter of 2009. Total voice connections, which measures FiOS Digital Voice connections in addition to traditional switched access lines, declined 8.2 percent to 25.5 million -- the smallest year-over-year decline since first-quarter 2008, the company said.

read more here

Friday, January 7, 2011

Verizon FiOS TV: IP Migration Enables Multi-Device Consumption

Verizon executive Joe Ambeault says there are some clear multi-device implications for migrating Verizon FiOS TV to IP delivery.

Consumers watching traditional FiOS TV should never see a difference, but by transitioning to IP, Verizon will have an opportunity to deliver its television service to a wide range of web-connected gadgets in the form of an app.

In other words, FiOS TV could become another service a consumer can buy in an app store, accessible across multiple screens and delivery platforms. In theory, consumers could even bring their own broadband to the table (FiOS or otherwise) and just layer FiOS TV on top, some might argue.

Friday, December 24, 2010

Verizon FiOS TV Changes Coming?

Thursday, October 28, 2010

Why Don't All Users Buy the Broadband Equivalent of a Lexus?

Faster is better, where it comes to broadband. But so is a Lexus, right? But there's a reason we have vehicles in all sizes, optimized for different applications, at different price points.

We do different things with vehicles, and for most of us, money is not unlimited. Were it not so, perhaps most people would drive a Lexus. If one assumes there is very little a single cannot do with 15 Mbps, then a family can well benefit from 50 Mbps, if it believes it will have three or four users online, all at the same time, all watching video at the same time.

Lots of households will find that overkill, at least for the moment. In some cases, users can buy 50 Mbps service from Comcast, for about $100 a month. That's a better deal than $145 a month. But the issue for many users will be how much those users really want to spend for service, when they are paying their own money.

Wednesday, September 15, 2010

Will Third Quarter Confirm Notion that Multichannel Video Business has Peaked?

The second quarter decline in multichannel video subscribers--the first ever in industry history--might not have been a statistial abnormality.

Rob Marcus, Time Warner Cable CFO says Time Warner Cable is on track to lose customers in the third quarter, with the weakness attributed to the economy. If that winds up happening at some other leading cable, satellite or telco companies, we could have a trend developing that could suggest the multichannel video industry finally has hit the wall, and has stopped being a growth industry.

According to researchers at SNL Kagan, the multichannel video entertainment market, which basically has grown in virtually unbroken fashion for decades, suffered its first-ever decline in the second quarter of 2010.

There was some continued shift of market share from cable and towards satellite and telco providers. But those shifts also were accompanied by an apparent net loss of 216,000 subscribers in the multichannel marketplace as a whole, compared to a gain of 378,000 in the second quarter of 2009.

Observers who have been watching what has been happening in some other legacy businesses, especially fixed-line voice services, are familiar with similar processes: gains for competitors and losses for the top incumbents. But there is more at work that market share gains and losses. Over the last decade, the total number of customers available for anybody to get has been dropping.

"Cable TV" has been a mature market for some time, but still has managed to eke out small gains, year after year, despite gains by satellite and telco competitors. But that appears to have hit a possible inflection point in the second quarter. More data, over more time, will be needed to confirm the possible trend, but it would be a historic watershed if the market actually shrank for the first time.

Cable was down a combined 711,000 subscribers, with six of eight top cable companies recording their worst losses ever. By contrast, satellite providers added a combined 81,000 subs and telcos netted 414,000.

Cable's combined share of the market was down to 61 percent from 63.6 percent in the second quarter of 2009.

Telcos now claim six percent of the video market, up from 4.3 percent year over year. It is tough at this point to figure out how much the economy and moribund housing market had to do with the results. Both those trends would normally be expected to slow the market.

But most observers also are watching for signs that alternative channels, ranging from online video to DVD rentals, are having an effect as well. So far, there has been scant evidence of any significant shift of viewing habits.

Some people, for all sorts of reasons, seem willing to live without paying for cable, satellite or telco-provided multichannel video entertainment. But most people appear not to see the advantage of cord cutting.

To be sure, there is an argument that the second quarter was a statistical anomoly. There has been no break in the growth trend line for multichannel video subscriptions, argues Michael Turk, a political and communications consultant. He chalks up the second quarter decline of 711,000 total industry subscribers as an artifact of "artificially" higher sign-ups as the broadcast digital TV transition occurred, a process that lead to higher-than-typical signups, followed by slower demand in the aftermath, but well within the historical growth profile.

The digital TV transition a year ago caused cable operators to offer temporary subscription discounts as a way of luring formerly-resistant consumers. It is possible that the expiration of deeply-discounted offers has lead some customers to churn off.

More likely, the temporary offers had similar effects as auto and housing credits recently have had: demand was simply pushed forward, leading to a decline of growth rates in subsequent quarters as the promotions expired.

If one subtracts out those who dropped cable when their discount expired, cable actually netted about 100,000 new subscribers in the second quarter of 2010.

But Time Warner Cable's guidance about the third quarter suggests there might be something to the notion that the video business has topped out.

Marcus said that Primary Service Units (or PSUs, a measure of voice, video and data customers) will likely fall below second quarter levels, for example.

"Video in particularly has been challenged," Marcus said. "Video net losses are pacing ahead of where they were in last year's Q3, voice growth is slower than it was last year and HSD [high-speed data] while the strongest performer, is still lower than last year. The net-net of all of that is that we may actually see a PSU loss for Q3."

link

Wednesday, August 4, 2010

New Motorola Tablet PC Might Support Verizon Multichannel Video

Motorola reportedly is developing a tablet device in conjunction with Verizon Wireless that will allow users to watch television on it, including the sort of multichannel video fare Verizon fixed network customers can watch, the Financial Times reports.

The device, which will have a 10-inch screen and operate on Google’s Android software, could launch as early as this autumn in the U.S. market. The Financial Times report suggests the video features will "tie closely to Verizon’s FiOS digital pay-television service."

As typically is the case for such innovations in the video business, content rights discussions will be key. Perhaps the most-logical offering is a "TV Everywhere" service similar to what U.S. cable operators are developing, where a Verizon FiOS TV service subscriber could watch the same content on devices powered by the Verizon Wireless network, either within the Verizon wired network geographical footprint or perhaps within the Verizon Wireles footprint, which exceeds the fixed network footprint substantially.

What remains unclear is whether Verizon Wireless can rework rights agreements enough to be able to offer the equivalent of its FiOS services over the Verizon Wireless network to customers who do not live within the fixed network footprint. That of course would tend to conflict with other distribution agreements programmers have with satellite and other terrestrial providers.

Technology really isn't the issue here: content rights arrangements and compensation are the key issues.

more here

Wednesday, June 23, 2010

Verizon Tests 10 Gbps to Home

Verizon says it has managed to push 10 gigabits per second through its FiOS trunking network, including 2 gigabit per second service to a customer’s house with two simultaneously-used PCs.


The XG-PON field trial connected a FiOS customer location with 10 gigabits per second downstream to the home and 2.5 Gbps upstream.

The test demonstrates the capability of the Verizon's FiOS network to accommodate a wide array of new and emerging video services and the growing demand for streaming video content and other bandwidth-intensive applications.

The latest field trial was conducted in May in Taunton, Mass., with a XG-PON system developed by Motorola, a supplier of BPON and GPON optical networking equipment to Verizon.

At the customer's home, the optical network terminal (ONT) received the 10/2.5 Gbps feed and used two data communication ports to simultaneously provide transmission speeds of close to 1 Gbps to each of two PCs inside the home. Combined, the two ports delivered approximately 1.85 Gbps in aggregate bandwidth in each direction.

Tests were designed to simulate what two different customers might experience while using their PCs to download, upload or share files to the Internet when served by a 10G PON system.  In addition, speed tests were performed to Verizon's speed test server located more than 400 miles away in Reston, Va., realized speeds of up to 915 Mbps between the PC and the speed test server.

"XG-PON can provide the capacity needed to support the explosive growth in bandwidth envisioned for new and emerging services such as 3DTV and Ultra HD TV, and the growing demand for streaming video content to the PC and TV, as well as the increased use of concurrent applications," said Vincent O'Byrne, director of technology for Verizon's FTTP architecture and design effort.


Verizon trumpeted the test as proof that its gamble on building out a large fiber-optic network will pay off in the future, as user needs for bandwidth outstrip the capabilities of cable and DSL.

The test appears aimed to reassure investors that Verizon made the right decision to deploy the fiber-to-home network, and to assure observers that Verizon can keep up with any new bandwidth initiatives cable competitors may deploy.

Friday, June 4, 2010

Verizon Marketing "Digital Voice" in 11 States and District of Columbia

Verizon now is marketing "FiOS Digital Voice" in FiOS markets in New York, New Jersey, Massachusetts, Rhode Island, Florida, Texas, Virginia, Maryland, Washington, D.C., Delaware, Pennsylvania and California, marking Verizon's initial wave of efforts to transition customers off the legacy voice network and onto the packet voice network.

The transition process could easily last a decade or more, requiring Verizon to maintain dual access and switching infrastructures for the interim period, before being able to decommission the old switching network completely, along with the legacy copper access network.

Verizon touts an easy-to-use, online account-management tool as a key element of FiOS Digital Voice, enabling customers to conveniently use a broadband-connected computer to access and manage the service's integrated features. Customers also have the option to add another FiOS Digital Voice line, with its own assigned number and all the same features, for $9.99 a month.

The service comes standard with 22 features including "Live Voice Mail Screening," which allows users to hear voice mail messages as they arrive and then decide whether or not to take the incoming call.

Call logs list the caller name, telephone number (if available), date, time-of-day, location and duration of every incoming and outgoing call. Users can easily transfer contact information directly into their FiOS Digital Voice personal address book.

"Caller ID on TV" allows FiOS TV customers to see incoming caller ID information displayed for several seconds in the corner of their TV screen.  They can decide to pause their TV programming to answer the call or let it go into their FiOS Digital Voice mailbox.  The feature can be turned on or off from the customer's set-top box.

"Locate me" allows users to program up to three numbers where they might be reached when not at home, and incoming calls will ring at each of those numbers, one at a time. Unanswered calls are sent to voice mail.

Simultaneous ring, do not disturb, voicemail with email notification and virtual numbers also are available.

New customers who sign up by July 24 for FiOS quad- or triple-play bundles that include broadband, TV and FiOS Digital Voice also will receive a guaranteed monthly rate for two years and a $20 monthly discount.

Friday, March 26, 2010

Verizon Slows FiOS Build: Implications for National Broadband Plan?

Many things have changed since Verizon Communications first began its FiOS construction program in 2004, and in the years leading up to that decision, when hot debates were held about the wisdom of fiber-to-neighborhood versus fiber-to-home networks.

Mobile broadband, especially the faster 3G and new 4G networks, now will begin to offer a serious alternative for a signficant number of end users.  Consumer resistance to paying higher prices for higher-speed fixed broadband (50 Mbps and above) has not lessened.

Cable companies have solidified their position as specialists in the consumer services segment, with the exception of wireless. Given cable's position in consumer video and voice, financial returns from fiber-to-home deployments, in the mass market, are getting harder to justify, not easier.

In many ways, leading U.S. telcos have found that their strengths in wireless and enterprise services are matched by relative cable strength in the mass market video and voice product segments.

Also, opportunity costs arguably have risen over the last 10 years, opportunity cost representing the potential gains a company might have made if capital had been deployed elsewhere,, such as wireless or software, instead of high-capacity fiber access.

In the background are concerns about the long-term relative value of multi-channel entertainment and voice revenues as well, which dampen financial returns from those two core services.

Take all of that into account and the apparent lessening desire on Verizon's part to continue investing in fiber to the home is logical, perhaps even prudent.

Given capital scarcity, burgeoning wireless and mobile broadband opportunities, as well as the slower growth for legacy services such as entertainment video, fixed access and voice, it would be hard to argue with an argument that effort is better placed squarely in the wireless arena, rather than fixed line services.

For that reason, it is not a complete surprise that Verizon seems to be slowing its FiOS program, which had been nearing the end of the major construction phase, in any case. The company says it no longer will seek to build FiOS in communities where it has not already gotten video franchises issued.

That means Verizon apparently will not undertake FiOS builds in Baltimore and downtown Boston, for example, a scenario many of us would not have predicted.

Verizon is still negotiating for franchises in some smaller communities, mainly in New York, Massachusetts and Pennsylvania, but it is not working on securing franchises for any major urban areas.

Verizon never committed to bringing FiOS to its entire local-phone service area, originally planning to make service available to about 18 milliion households by the end of 2010, a goal it will reach. Since the program began, however, Verizon also has been selling assets in less-populated areas in the Midwest and West Coast.

The recruitment of new FiOS TV subscribers slowed last year. In the fourth quarter, it added 153,000 subscribers, little more than half of the number it added in the same period the year before.

At the end of last year, Verizon had 2.86 million FiOS TV subscribers and 3.43 million FiOS Internet subscribers (most households take both).

Investors never have liked the FiOS program, which will wind up costing an estimated $23 billion. FiOS likely has been a key reason Verizon has been able to compete with cable companies.

Verizon is the only major U.S. phone company to draw fiber all the way to homes and the only one to offer broadband speeds approaching those available in Japan and South Korea. But the financial returns have not been so overwhelming that the decision to expand the program is completely clear.

Verizon's experience might be an implicit warning to policymakers that although the goal of 100 Mbps service, provided to 100 million U.S. homes, by 2020 is a fine stretch goal, but might face trouble if it means consumers have to pay significantly more for such service. Consumers might prefer 20 Mbps to 30 Mbps for $50 to $60 a month, rather than 50 Mbps for $100 a month, and certainly more than 100 Mbps for $150 to $200 a month.

related article

Thursday, January 28, 2010

Is Verizon a "Wireless" Company as AT&T Is?

Is Verizon now a "wireless company with a wireline business"? Some might argue that is the case. Others might argue Verizon is a company with significant wireless and broadband businesses. At AT&T, it is easier to make argument that the company really now is a wireless company with wireline businesses.

Part of the reason for the difference is Verizon's decision to go to a "fiber to the home" access network, while AT&T has chosen a less-costly "fiber-to-neighborhood" approach. But those decisions are conditioned by the different potential customer bases in each telco's territory. AT&T is less dense, so FTTH is aq more expensive choice. Verizon also has more business customers, and fewer consumer customers, relatively speaking.

Analysts at Trefis, for example, estimate that mobility counts for 34 percent of Verizon's equity value, with broadband access contributing 36 percent. Services to larger businesses and organizations account for 17 percent of Verizon's equity value.

The consumer and smaller business revenue stream accounts for just 10 percent of Verizon's equity value.

At AT&T, wireless accounts for a whopping 51 percent of equity value, while Internet and television services account for 16 percent. Services to business customers, plus wholesale, accounts for 12 percent of equity value. The landline voice business accounts for 12 percent of equity value.

AT&T really is a wireless company with a wireline business.

VZW added 2.2 million net wireless subscribers in the last three months of 2009. Verizon remains the marker leader in size, quickly approaching the 100 million-sub mark with 91.2 million total mobile customers.

Total wireless service revenues remained flat quarter-over-quarter at $13.5 billion and were up only five percent year-over-year.

But wireless data revenues continued to balloon, increasing $200 million over the third quarter to $4.3 billion and 26.6 percent  year-over-year. Data now accounts for 31.9 percent of all service revenues.

Wireline service revenues fell $100 million quarter over-quarter to $11.5 billion, representing a 3.9 percent drop year-over-year. On the residential side, access line loss showed no signs of improving with Verizon posting a further 12.3 percent decline.

Verizon also is losing digital subscriber line accounts as it switches customers over to the FiOS service. Verizon lost 107,000 broadband lines, primarily DSL accounts, as its FiOS service grew by153,000 net new customers, including both broadband access and video customers.

FiOS now has 2.9 million TV subscribers (25 percent penetration) and 3.4 million Internet customers (28 percent penetration).

But wireline figures also were distorted by the addition of Alltel assets.

Wireless profit margins also are higher than wireline. Wireless had 45 percent margins in the fourth quarter of 2009, while wireline margins fell to 23 percent.

Wednesday, November 11, 2009

Metered Internet Access Plans Coming?

Time Warner Cable CEO Glenn Britt says in a CNBC interview that the question of how consumers pay for their broadband is "an evolving thing." Britt still does not believe the existing flat rate for unlimited usage pricing plans are going to exist universally, indefinitely.

Verizon EVP Dick Lynch also has noted that Verizon would have to consider some form of tiered or metered bandwidth in the future.

One might argue that such plans will be available, with a premium price. But many, if not most other plans likely will move to some pricing format more nearly resembling the way people now buy buckets of wireless minutes or text messages. Consumers nearly universally dislike true metered usage plans, but have shown a level of comfort with "buckets." That suggests buckets will be the path forward for broadband services that must take some account of drastic bandwidth consumption patterns imposed by video content.

Some idea of the need for such plans, sure to be initially unpopular with some consumers, is the cost of continually providing more bandwidth, with modest increases in new revenue. At least some independent service providers have argued for years that fiber-to-home investments cannot be justified in tradtional "five year return on capital" criteria.

In that view, operators need to invest in FTTH "to keep their businesses," essentially. Yankee Group analyst Vince Vittore says that sort of refrain was current at the most recent Fiber to the Home conference.

Cable competition is a primary motivator in that regard. But experience so far continues to show that the financial return from an FTTH network is not assured nor easy. Nobody expects a return on invested capital in five years, as once was possible for many types of network investments.

Nor does anybody seem to believe it is possible to earn a return on FTTH networks based principally on incremental revenue from optical access, or even from providing video entertainment services. One need look no further than that to discern the industry emphasis on new applications, services and revenue.

Usage that is more closely tied to actual usage will happen. That doesn't mean it will be as strictly metered as electricity or water. But think about wireless buckets of use and one can conceive of metered service plans that consumers do not find inherently objectionable.

Friday, October 30, 2009

FiOS Does Not Sell Itself

Even FiOS Doesn't Sell Itself

Verizon's third quarter FiOS revenues totaled more than $1.4 billion, up 56 percent year over year. And FiOS average revenue per user also hit more than $137 per month.

Verizon also added about 18 percent more FiOS TV and Internet customers than in the same quarter last year, including 191,000 FiOS TV and 198,000 FiOS Internet customers, increasing Verizon's penetration to 25 percent for TV and 29 percent for Internet.

Still, net adds were less than the record adds of the last two quarters, Verizon says. Gross sales were lower primarily due to a change in promotional activity, the company says.

"As it turns out, we had a couple of promotions that worked, didn't work as well," says Ivan Seidenberg, Verizon CEO. "What happened is we had a couple of better quarters and we toyed with how we could sustain that and found that it was difficult in light of maintaining a fiscal discipline against it."

In other words, Verizon probably did not spend as much as it could have on marketing FiOS services, and the results probably slowed because of that conservatism.

The point, perhaps, is that as powerful a marketing platform as FiOS represents, the value proposition appears to remain less obvious to consumers than we inside the business sometimes think.

Verizon remains committed to adding about one million new FiOS customers every year, on a base of homes passed that stands at about 45 percent of all Verizon residential passings, with video available to about 34 percent of total households passed.

That illustrates part of the problem. Whatever Verizon does, it potentially can sell video services to about a third of all residences, though it can sell FiOS broadband to about 45 percent of homes. It always is tough to market services when a third of homes can buy them, not all.

And as service providers have learned in the past, easing up on promotions, or banking on the wrong promotions, can have significant effect on results. Not even fiber-to-the-home service, in and of itself, seems to "sell itself" to most customers, as powerful as those sorts of connections always have seemed to people in the business.

Friday, April 10, 2009

Internet Video Complementary to Cable, Satellite and Telco Video, Study Indicates

Fears that the recession will encourage more and more people to drop cable or satellite TV service and rely on free online video services appear to be exaggerated, Pike & Fischer researchers say. Some might say grossly exaggerated. In a recent survey, less than half of one percent of respondents indicated they would cancel a multi-channel video subscription.

That said, about 15 percent of respondents said they intend to downgrade to a lower-priced video subscription this year, through such means as giving up premium channels. Both the findings are consistent with consumer behavior in past economic recessions.

Typically, consumers hang on to their subscriptions and do not disconnect. They do however tend to downgrade premium services or postpone upgrades.

About eight percent of respondents said they plan to upgrade their service to receive expanded numbers of channels or advanced services such as high-definition TV.

Although there are no signs yet that the Web is on its way to replacing traditional TV, a substantial number of respondents said they are turning to the Web to watch video, Pike & Fischer says. About 32 percent of respondents to the survey said they regularly watch video from Web sites such as Hulu, YouTube and iTunes.

"The results indicate that consumers appear to be willing to continue paying for cable or satellite TV, despite the fact that they can get a vast amount of shows for free or very low cost on services like Hulu and Veoh," says Scott Sleek, Pike & Fischer director. "But they don't appear to be willing to spend any extra money for premium channels or on-demand movies. And they're increasingly willing to go to the Internet to watch their favorite shows."

Thursday, April 3, 2008

at&t VoIP for Austin

U-verse IP-based voice service is being introduced in the Austin area. So those of you who wonder when incumbent service providers will get on the VoIP bandwagon have an answer. VoIP makes most sense for an incumbent provider when the basic service package includes other IP-based video services.


Even when IP isn't extended completely to all the end points, the adoption pattern will mirror the ways IP and optical fiber was introduced into the rest of the network. IP made first sense in the network core. So did fiber. Over time, fiber extended into the metro trunking plant. That same sort of thing will happen as soft switches replace older TDM switches.

VoIP features will be made available at the central office, with media gateways between the end user analog equipment and the CO. Over a period of time, the gateways will migrate deeper into the access network.

But there will not be a complete flash cut to VoIP as the voice platform until some critical mass is reached. At some point, half the customers will be buying IP-based video or data services. Sometime around then, it starts to be feasible to decommission the older networks.

But not much before then will it make lots of sense.


Sunday, March 16, 2008

Broadband Users Generally Satisfied


U.S. consumers generally seem to be aware of the importance of bandwidth as a determinant of their Internet experiences, says Mike Paxton, In-Stat analyst. For the most part, they also seem satisfied with their current access speeds.

Anecdotal evidence suggests many consumers are aware there is a difference between theoretical bandwidth and the actual bandwidth they get when lots of other users are on the network at the same time.

For that reason, consumers increasingly are receptive to higher-bandwidth offers, In-Stat argues. Most consumers probably are not aware that, at peak load, the average bandwidth they may be able to use is as much as an order of magnitude less than the theoretical bandwidth.

That said, more than 83 percent of respondents to a recent In-Stat consumer survey, which included a speed measurement, said they either were "very satisfied" or "somewhat satisfied" with their current connection.

In large part, that finding is testament to generally enhanced access speed offerings by virtually all suppliers.

The survey of 700 users found an average downstream speed of 3.8 Mbps, while the average upstream speed is 980 kbps.

The average downstream fiber-to-home speed was 8.8 Mbps, while cable modem connections averaged 4.9 Mbps and DSL averaged 2.1 Mbps, In-Stat says. Those findings are generally congruent with research published by the Communications Workers of America in 2007.

The average monthly price for broadband service is a bit over $38.

Thursday, February 7, 2008

Price Per Megabit: Japan and France Lead

When observers talk about places where broadband access is both fast and affordable, Japan is certain to come up. Maybe they should talk about France. As this chart created by the Wall Street Journal shows, French users can buy broadband at prices per megabit that are quite close to what users in Japan are able to do.

Also, despite all the whining about how far behind the rest of the world the U.S. providers are, it doesn't really appear such sentiments necessarily are based in fact. Over the last year, cable and telephone companies have been boosting capacity while holding prices steady. And that provides a much better "price per megabit" relationship.

Wednesday, February 6, 2008

Verizon, at&t Take Different Approaches to Bandwidth Caps

For an industry that in decades past has tended to move in lockstep, it is refreshing to see an ever-increasing divergence in strategies and marketing positions. Consider the matter of bandwidth caps and content filtering.

at&t has decided to filter non-authorized content on its broadband access networks. The move is an attempt to reduce the peer-to-peer bandwidth load on its networks.

Verizon, on the other hand, doesn't want to do so and says it will not. Many policy advocates will cheer that stance.

One might credit Verizon's decision to move to a fiber-to-home network for that laudable move. Simply, Verizon has a lot more headroom than at&t will to support today's heavy users, and ultimately, heavier use by nearly all users as more video moves to Internet delivery.

Beyond the policy stance differences, and the customer goodwill Verizon will garner, the notable difference stems from fundamental decisions each carrier has made. Verizon made a risky bet in the face of nearly-universal investor opposition. at&t took a less-risky path that was rewarded by investors.

But each of those decisions now has repercussions in other areas where technology now conditions the marketing decisions each company can make. I've said it before and will say it again: Verizon did the right thing sticking to its FiOS program, in the face of intense financial community pressure.

In the years to come, that technology and financial decision is going to give Verizon many options other contestants may not have.

Monday, January 28, 2008

Is FiOS a Different Product?

Verizon says it has 8.2 million broadband access subscribers. During the fourth quarter, Verizon added 245,000 net new FiOS Internet customers and 19,000 net DSL subscribers. So here's the question: is T1 (1.54 Mbps) a different product from a DS3 (45 Mbps) connection? Is T1 a different product from an asymmetrical cable modem or Digital Subscriber Line service? I suspect most people who create and deliver such services would say "yes."

So if a customer buys a FiOS fiber to home service, is that a different product than the alternative it replaces? If Verizon added just 19,000 DSL subs and an order of magnitude more FiOS subs, what does that suggest? Right now it is hard to tell what it means, as Verizon does not appear to be providing detail on DSL penetration as distinct from FiOS Internet.

So far, Verizon says it has 21 percent FiOS Internet penetration where it can sell the service.
Presumably that includes virtually all of the DSL subs who converted over to FiOS. At the end of March 2007 Verizon said it had overall broadband penetration of about 16.8 percent.

So it is conceivable that FiOS availability boosts broadband access penetration by something slightly less than four percent of marketable homes, as well as garnering 16 percent of homes as video subscribers.

For the moment, FiOS Internet appears largely to be a substitute for DSL. That should change over time, as nearly all major market consumers in Verizon's footprint have a chance to buy Ethernet services ranging from 10 to 50 Mbps. It's hard to imagine that not emerging as a differentiated product.

Verizon: 2.7% Consumer Wireline Revenue Gain


In football, they'd call his "tough yards on the ground." Verizon's four percent increase in fourth-quarter profit came primarily from the mobile business, as traditional land-line metrics continue to drift lower, despite gains in FiOS broadband access, Digital Subscriber Line sales and FiOS TV services.

Still, quarterly revenue in the consumer segment was up 2.7 percent, a significant achievement against a backdrop of share losses in the legacy consumer wireline voice business.

Verizon added about two million net wireless customers in the quarter, offsetting wireless declines of about 616,000 lines. For the full year 2007, Verizon lost about three million residential lines, or 10.6 percent of total, while business lines dropped 3.7 percent.

In essence, Verizon is getting higher average revenue per unit in its wireline business, even as the total number of customers is dropping. If you wanted any proof about the revenue impact product bundling has, Verizon is providing the evidence.

Though there are important churn reduction effects, the primary reason dual play, triple play and quadruple play offers work is that they raise ARPU dramatically, allowing service providers to build businesses based on scope (selling more things to customers) rather than scale (selling the same thing to more customers).

The company added 245,000 net FiOS broadband access customers as well as another 226,000 net FiOS TV customers in the most recent quarter.

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

Modern computing has some virtually-universal reference metrics. For Gemini 1.5 and other large language models, tokens are a basic measure...