Comcast to Cover 86% to 88% of Locations with 10 Gbps Symmetrical Home Broadband by 2025

Comcast now plans to deploy symmetrical 10-Gbps capabilities to 50 million homes and businesses by 2025. The significance is that Comcast’s networks pass perhaps 57 million home locations--perhaps 58 million--and perhaps 61 million home and business locations. 

So the 10-Gbps upgrade encompasses perhaps 86 percent to 88 percent of locations. 

So Comcast  is going to be a daunting foe for would-be fiber-to-home providers to compete with, when the general thinking is that the first FTTH network in a market has clear advantages.

But that is looking at physical media, not the reality of network capabilities. If Comcast gets there first with symmetrical 10-Gbps services, it will be hard for FTTH providers to catch up, especially as Comcast adds more fiber-accessed locations to serve business users.

I don’t know about you, but I really do not care what the access media is, if I can get symmetrical 10-Gbps service.

Fiber Capex Contrasts at Lumen

The fourth quarter 2022 Lumen Technologies earnings call was in some ways a study in infrastructure contrasts and an indication that further restructuring could happen. 

Lumen is adding about six million intercity fiber miles of capacity by 2026. That supports the part of Lumen’s business built largely around the intercity capacity business in the United States, and global capacity in the northern hemisphere. 

Contrast that with what happened to the fiber-to-home program. “As we've said previously, we hit the pause button during the fourth quarter,” said Kate Johnson, Lumen CEO.  “Now, to be frank, it was more of a stop button than a pause.”

“A natural outcome of our assessment of Quantum is a more focused build target,” said Johnson. “We believe the overall Quantum enablement opportunity is eight million to 10 million locations.”

For Lumen, that suggests up to half the homes in its service territory are the best chances to monetize fiber-to-home investments. Lumen has an estimated 21 million to 24 residential and small business locations passed by its networks in 16 states. 

The latest statements suggest Lumen believes between 38 percent and 43 percent of mass market locations are suitable for FTTH investment over the next half decade or so. 

The issue for Lumen, as was the case for the former US West--which has had the least-dense footprint of all the former Baby Bells--is what to do about the rest of the customer base, assuming copper access is not a long term solution.

Divesting rural assets already has been the answer, as Lumen sold off access assets in 20 states. That raises the theoretical possibility that Lumen sells still more of its rural assets over time, as about 60 percent of its local access locations are deemed insufficiently profitable to serve with FTTH facilities at the moment. 

Keep in mind that 79 percent of Lumen’s revenue is earned serving large and mid-sized business customers. Most of that revenue comes from the intercity network and local connections and services to customers in the larger urban markets. 

Much small business revenue is counted in mass markets, where, increasingly, revenue is anchored in fiber-based internet access (home broadband) of about $60 a month. 

source: Lumen Technologies 

FTTH investments rarely offer a “no brainer” business case. In Lumen’s case, the issue will be what to do about the 60 percent of mass market locations that do not seem amenable.

The Zero Touch, On Demand Telco, and Beyond

PCCW Global's Console Connect is in many ways a bit hard to describe. You might think of it as an automated platform for transactions that today might include two or more enterprises, two or more data centers or entities using applications and application providers. 

You might call it an example of a platform business model, or a two-sided business model. You might think of it as a way of allowing entities to order up resources--bandwidth, compute cycles or apps--on demand. 

You might call it "internet on demand" for enterprises. Some might note that Console Connect is an example of a use case for distributed ledger (blockchain). Some might think of it as "infrastructure as a service." 

It is all of those things. And more, actually. It is a distribution channel for local access providers, data centers and app providers. It is an example of network effects, or communities of interest, not just a sales channel for connectivity, application or data center value propositions. 

It is more than that. 

Will ChatGPT-enhanced Bing be Able to Supply Something Like Footnotes? It Might Matter

ChatGPT as used by Bing might be able to cite sources used to generate the text, a potentially important detail for those hoping to use the generative text function in contexts where sources matter. 

Perhaps the search bar also is replaced by a chat box. 

source: Medium 

Some believe Bing’s version of ChatGPT, possibly branded as the new Bing,  also will be able to use data collected after 2021, which ChatGPT so far has not been able to use. 

Apparently, users will be able to use either traditional search or the AI-assisted version side by side, toggling between them. This will be a useful feature for people testing the accuracy and usefulness of generated results. 

The new Bing reportedly will also use a version of footnotes, showing the sources it used to generate a response to a query. 

That feature will be necessary--or helpful--for people whose work, or use of search, requires identifying sources (journalists, researchers, academics, students in many cases, writers). 

If the reports are correct, ChatGPT just got better, and more useful.

Google Gets Ready to Launch its Own Generative Text Engine

Google is getting ready to release its own competitor to Chat GPT. There are many possible ramifications. Small startups now will face firms far better capitalized, with more scale and developed ecosystems of developers, users, customers, roles and business partners. 

As always is the case, that means many smaller firms will be acquired. Some will simply disappear. Since all generative language engines analyze lots of text, Google should have advantages. It indexes an awful lot of text. The adage that artificial intelligence models benefit from huge datasets is apt. 

Other questions are harder to answer and assess. In principle, generative language engines should find common use as an alternative to use of search engines. So it is not surprising that Google and other search engines will try and marry generative text capabilities to their existing search platforms. 

Just how far the capability might spread in various industry verticals likewise is hard to assess, sometimes because there are legal issues to using the generated text. In other cases, such as health care, the generated text can help point users to other text that can be used in care, without creating ethical or other liabilities. 

We might find that is the pattern for many other industries: generated text might be useful for high-level backgrounding but not useful as a tactical guide to problem identification or solutions. 

On the other hand, in contained use cases, such as customer service, AI-generated text might be quite useful as a substitute for human action. Answering generic questions for which there are structured answers seems easy. Generative text becomes less reliable as the range of possible answers, in context, is required. 

If you have used engines such as ChatGPT, you already know the current state of the art is that high-level summaries can be quite useful. But detailed, in-context tactical information is another matter. 

The other observation is that artificial intelligence now is more rapidly entering mainstream use after many decades of gestation. Useful precisely for allowing conversational answers to queries, generative text engines should quickly be useful for queries that have structured answers. 

But many questions that must include many value assumptions will always have multiple answers, depending on context and point of view. In such cases we might find generative text of some value, but without the context on training models or degree of dispute about “facts", we might not be able to “trust” the generated text. 

If You Have a Choice, Choose a High-Growth, High-Multiple Industry

I once had a management professor give one bit of advice to people just entering the workforce. When choosing an industry to work in, it is better to choose a fast-growing industry rather than a slow-growth or declining industry. 

If one has a choice, it is helpful to be in an industry forecast to show lots of growth, which also often correlates with other valuation ratios, such as enterprise value/revenue. 

Here is a ranking of industries made by Stern School at New York University researchers and updated in January 2023. Looking at EV/Sales ratios, one can see that valuation ratios can routinely vary by an order of magnitude. 

Financial services and real estate investment trusts routinely are valued at 10 to 20 times specialty retailers and as much as 63 times higher than grocers. Compared to fixed network communications services, financial services are an order of magnitude more highly valued. 

IndustryValuation Enterprise Value Compared to Sales Ratio
Industry Name	Number of firms	Price/Sales	Net Margin	EV/Sales	Pre-tax Operating Margin
Financial Services (Non-bank and Insurance)	223	2.18	26.32%	23.49	15.88%
R.E.I.T.	223	6.35	23.77%	11.06	23.20%
Utility (Water)	16	6.43	25.12%	9.18	29.38%
Green & Renewable Energy	19	3.68	17.77%	7.79	24.48%
Software (System & Application)	390	7.14	14.61%	7.59	21.90%
Software (Internet)	33	5.57	-19.07%	6.33	-5.48%
Transportation (Railroads)	4	5.04	27.65%	6.32	39.86%
Information Services	73	5.77	16.62%	6.26	24.21%
Drugs (Biotechnology)	598	5.78	0.65%	6.18	11.87%
Healthcare Information and Technology	138	4.81	-0.33%	5.33	17.00%
Investments & Asset Management	600	4.15	24.93%	5.16	18.15%
Healthcare Products	254	4.73	7.00%	5.15	15.13%
Tobacco	15	4.19	23.46%	5.05	43.97%
Semiconductor	68	4.63	22.74%	4.98	25.44%
Drugs (Pharmaceutical)	281	4.38	18.35%	4.85	27.37%
Beverage (Soft)	31	4.16	14.60%	4.67	19.14%
Bank (Money Center)	7	2.55	26.96%	4.49	0.10%
Brokerage & Investment Banking	30	2.14	16.01%	4.46	0.31%
Banks (Regional)	557	3.2	30.31%	4.34	-0.10%
Utility (General)	15	2.47	12.68%	4.28	18.03%
Hotel/Gaming	69	2.75	1.10%	4.2	4.23%
Beverage (Alcoholic)	23	3.38	5.76%	4.07	20.17%
Restaurant/Dining	70	3.16	9.28%	4.07	12.80%
Real Estate (General/Diversified)	12	3.14	12.67%	4.02	18.60%
Power	48	2.14	9.17%	3.75	15.67%
Computers/Peripherals	42	3.41	16.68%	3.67	21.43%
Semiconductor Equip	30	3.43	22.27%	3.66	27.44%
Household Products	127	3.23	11.25%	3.65	17.12%
Software (Entertainment)	91	3.54	20.91%	3.59	25.65%
Telecom Equipment	79	3.31	13.29%	3.56	18.63%
Precious Metals	74	3.3	7.18%	3.55	10.10%
Shoe	13	3.06	11.17%	3.22	12.83%
Telecom (Wireless)	16	1.98	2.54%	3.18	12.37%
Entertainment	110	2.47	0.90%	3.06	7.44%
Environmental & Waste Services	62	2.44	7.29%	3.03	12.85%
Real Estate (Development)	18	1.42	15.04%	2.81	17.48%
Total Market	7165	1.95	8.89%	2.8	11.60%
Electrical Equipment	110	2.38	7.31%	2.77	10.25%
Machinery	116	2.28	8.51%	2.67	14.00%
Oil/Gas Distribution	23	1.54	2.08%	2.6	10.82%
Aerospace/Defense	77	2.1	4.05%	2.55	8.68%
Diversified	23	2.16	0.98%	2.5	3.59%
Chemical (Specialty)	76	2.05	8.07%	2.48	14.80%
Cable TV	10	1.19	7.91%	2.43	19.52%
Total Market (without financials)	5649	1.93	7.77%	2.35	12.03%
Telecom. Services	49	1.01	12.81%	2.18	19.95%
Insurance (General)	21	1.7	15.21%	2.16	21.86%
Construction Supplies	49	1.72	8.23%	2.15	11.16%
Oil/Gas (Production and Exploration)	174	1.83	26.01%	2.12	35.68%
Food Processing	92	1.66	7.10%	2.1	11.94%
Metals & Mining	68	1.86	9.66%	2.06	22.84%
Business & Consumer Services	164	1.69	4.92%	2.05	9.22%
Advertising	58	1.49	3.79%	1.96	11.11%
Retail (Building Supply)	15	1.64	8.67%	1.96	13.81%
Electronics (General)	138	1.73	6.32%	1.94	9.83%
Retail (Online)	63	1.63	0.64%	1.87	1.84%
Education	33	1.57	2.92%	1.85	5.16%
Auto and Truck	31	1.32	5.02%	1.81	6.49%
Recreation	57	1.22	1.30%	1.77	8.31%
Hospitals/Healthcare Facilities	34	0.85	5.31%	1.57	11.62%
Retail (Distributors)	69	1.06	7.30%	1.45	11.90%
Trucking	35	1.07	1.29%	1.45	9.18%
Coal & Related Energy	19	1.35	20.44%	1.43	22.17%
Insurance (Prop/Cas.)	51	1.21	4.05%	1.39	6.49%
Oil/Gas (Integrated)	4	1.31	15.17%	1.39	17.46%
Building Materials	45	1.1	10.30%	1.36	13.94%
Broadcasting	26	0.6	11.90%	1.33	14.75%
Insurance (Life)	27	0.83	6.07%	1.33	8.39%
Packaging & Container	25	0.79	6.06%	1.25	9.63%
Farming/Agriculture	39	0.94	5.66%	1.22	7.78%
Computer Services	80	0.93	2.53%	1.17	6.89%
Apparel	39	0.81	5.07%	1.16	11.11%
Publishing & Newspapers	20	0.88	2.82%	1.16	7.75%
Engineering/Construction	43	0.87	2.16%	1.08	4.69%
Transportation	18	0.89	6.99%	1.08	9.38%
Shipbuilding & Marine	8	0.82	21.55%	1.07	26.33%
Air Transport	21	0.42	-1.71%	1.02	2.08%
Real Estate (Operations and Services)	60	0.52	-0.76%	1	0.50%
Retail (Special Lines)	78	0.72	3.86%	0.97	5.74%
Office Equipment & Services	16	0.6	2.36%	0.93	6.26%
Chemical (Diversified)	4	0.64	13.16%	0.91	13.56%
Retail (Automotive)	30	0.59	4.07%	0.91	5.73%
Chemical (Basic)	38	0.63	9.70%	0.89	13.14%
Furn/Home Furnishings	32	0.6	2.03%	0.88	7.89%
Homebuilding	32	0.71	13.98%	0.85	18.79%
Auto Parts	37	0.62	2.16%	0.82	5.19%
Retail (General)	15	0.7	2.35%	0.81	4.12%
Electronics (Consumer and Office)	16	0.78	0.54%	0.78	2.11%
Paper/Forest Products	7	0.58	10.23%	0.77	18.59%
Healthcare Support Services	131	0.61	2.01%	0.69	4.00%
Steel	28	0.58	14.70%	0.68	19.89%
Reinsurance	1	0.58	3.54%	0.63	4.64%
Oilfield Svcs/Equip.	101	0.47	5.25%	0.58	7.37%
Rubber and  Tires	3	0.14	4.21%	0.55	5.84%
Food Wholesalers	14	0.29	1.09%	0.41	2.10%
Retail (Grocery and Food)	13	0.24	1.96%	0.37	2.92%
source: https://pages.stern.nyu.edu/~adamodar/pc/datasets/psdata.xls

The point is that, when one has a choice, choose to enter an industry with higher growth rates or higher valuation ratios or both. 

The same sort of relationship also holds for managerial success, once those choices have been made. It is easier to be a “hero” when one has worked in a fast-growing, more-profitable industry to begin with. The same amount of effort and talent is likely to produce consistently higher outcomes compared to the same effort and talent expended in a slow-growth, lower-valuation industry.