Tag Archives: ftth

$351 billion U.S. consumer tech 2018 forecast built on broadband

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Source: Consumer Technology Association, 7 January 2018. Click for the full presentation.

The Consumer Technology Association (CTA) predicts that connectivity, particularly via mobile networks, will fuel industry growth, with total U.S. retail sales hitting $351 billion in 2018, up 3.9% from last year. .

Traditional consumer hardware categories are flat or declining, while connected devices and services are booming – for example “smart speakers”, which are tied to artificially intelligent, voice recognition services such as Amazon’s Alexa, are predicted to hit $3.8 billion in 2018, a 93% increase.

This forecast was released yesterday at CES, which used to be the Consumer Electronics Show and which is produced by CTA, which used to be the Consumer Electronics Association. Increasingly, the industry is defined by software, content and networks, and not by gadgets and gizmos. Hence the rebranding from electronics to technology. That shift is also showing up in revenue figures.

The $351 billion predicted U.S. industry total includes $20 billion in music and video streaming services, a 35% jump from 2017. If you back out that revenue, the predicted growth in retail revenue in 2018 will only be 2.5%. Hardware growth is probably even lower. Only a few, top line category forecasts were released, and some – arguably all – are a mix of digital bits and physical products.

All eleven of the categories that were broken out rely on broadband connections. Without connectivity, speakers and homes aren’t smart and virtual reality is virtually nothing. So it’s no surprise that CTA analysts spent more time talking about 5G mobile networks than televisions, or even smartphones.

“We’re in the connected era”, said Steve Koenig, senior director of research for CTA. “We understand the importance of connectivity, not just to to the industry but to the global economy”.

Many of the really cool things to come that Koenig talked about will depend on the fast, low latency bandwidth that 5G networks will deliver in urban areas. Without it, the promise of technologies like self driving cars, augmented reality or robotics won’t be fully realised. But it’s important to remember that residential wireline networks will continue to do the unglamorous heavy lifting in a connected, consumer technology-enabled world.

Koenig predicts that five years from now, nearly 800 million “consumer tech connected devices” will be sold annually in the U.S. For that to happen, we need modern networks. Of every kind.

AT&T still fails at FTTH, but slowly figures out how to make it work

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AT&T hasn’t fully embraced fiber to the home service yet. At least not judging by my experience setting it up in a newly built, fully fibered apartment complex. But they are making progress.

Originally, AT&T only offered homes in FTTH islands the same service packages that they offered to surrounding copper customers. That still might be going on in single family home developments or in redlined neighborhoods, but they’ve developed genuine fiber packages of up to a symmetrical gigabit for multi-dwelling units. Unfortunately, their customer service reps and installers aren’t all onboard.

Since this wasn’t for my primary residence, I wanted AT&T’s cheapest, bare bones Internet service, in this case, 50 Mbps download and 10 Mbps upload with no contract, at $50 per month and a $99 installation fee, as their website led me to believe. No surprise, AT&T made it hard for me to buy it. As it turned out, they didn’t even sell it.

No contract service isn’t available online, even when you try to order it via an online chat. The call center reps are nearly as clueless. After the obligatory up sell attempt, The first rep I spoke with took my order and told me it would cost $40 per month. That set off alarm bells, since that’s the 12-month contract price. I asked her if that’s the no-contract price and got an uh-hum in return.

Anytime a call center rep answers with uh-hum, it means I don’t know but I’d like you to assume I’m saying yes.

I asked to speak to a supervisor and, after some argument, finally got one. He confirmed what I thought: the $40 rate came with a contract and no-contract service was $50 for 50 Mbps, symmetrical as it turned out. Done deal. A installation appointment was set.

I could expend a couple thousand words describing what came next. The highlight was a surprise early morning service call from an installer who tried to tell me the optical network terminal he had was the WiFi equipped modem I’d ordered. When I pointed out he was installing it in a metal cabinet without an ethernet connection, he just said “it’s pretty powerful”. Right.

Six truck rolls later, I had Internet.

A week after that, I had a bill for $70. It took several phone calls, each more unpleasant for all involved than the last, to establish that 50 Mbps symmetrical service is $70 on a no contract basis, and all $50 gets you is 5 Mbps symmetrical.

Which is what I now have. And it works, although how it will perform when the complex finally fills up is an open question. AT&T’s FTTH service is a good product. They just need to learn how to sell and install it.

Google Fiber gives up on video, and maybe fiber too

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Google Fiber is throwing in towel on video service. In a blog post, the company announced that it won’t be offering a cable-like lineup of television channels along with gigabit Internet service in Louisville and San Antonio…

We’re trying something new in our next two Fiber cities. When we begin serving customers in Louisville and San Antonio, we’ll focus on providing superfast Internet – and the endless content possibilities that creates – without the traditional TV add on.

If you’ve been reading the business news lately, you know that more and more people are moving away from traditional methods of viewing television content. Customers today want to control what, where, when, and how they get content. They want to do it their way, and we want to help them.

Two years ago, a top Google Fiber executive, Milo Medin, said “if you don’t offer a good TV service your ability to compete with incumbents that bundle Internet and TV together is significantly impaired”.

So, what changed? A couple of things.

It’s certainly true that the availability of unbundled video content available directly via the Internet has grown considerably in the past two years, and there’s no sign of it slowing down. Declaring linear video subscriptions to be a legacy business and letting cable and satellite companies wrestle over its (slowly) dwindling remains simplifies Google Fiber’s operations and business model, and eliminates a lot of headaches. That alone could be a good trade for the potential subscribers they might lose as a result.

But something else changed, too. In the past two years, Google Fiber has become, in effect, Google Fiber and Wireless. Technically, it’s easy to add a hundred or two TV channels to a fiber-based service, but impossible on a terrestrial wireless system that has orders of magnitude less total bandwidth available. Google’s announcement should also be treated as another indicator that in the future the company is going to be even more selective about where it builds fiber to the home infrastructure. If it even installs any more fiber at all.

Legislative games put $2.2 million Riverside FTTH project in peril

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Red zone is where federal subsidies pay for slow broadband service.

Anza Electric Cooperative is giving another push to its proposal for a $2.2 million California Advanced Services Fund (CASF) grant to pay for expanding its fiber to the home system in rural Riverside County.

It sweetened its application yesterday by promising a low cost tier of service – $25 per month for symmetrical 10 Mbps service – to households that are eligible for any one of a long list of public assistance programs. Combined with offers of free service to a short list of non profit groups and discounted service to others, and low cost (sometimes no cost) computers, it’s a way to raise the profile of its application a bit, and perhaps move it through the California Public Utilities Commission’s vetting process more quickly.

That’s important because if a commission vote doesn’t come soon, the Anza project might be killed by assembly bill 1665, which is awaiting a vote in the California senate.

AB 1665 would change the rules for CASF, which is the state’s primary broadband infrastructure subsidy program. The bill would make it effectively impossible to award CASF grants for high speed fiber projects where an incumbent telco – in this case, Frontier Communications – might eventually use federal subsidies to pay for minimal upgrades to low speed, 1990s vintage DSL technology.

Because it had to get around legislative deadlines, AB 1665 was declared to be an urgency bill, which means it takes effect the moment it’s signed by the governor. If it makes it that far, it’ll go into effect no later than mid-October.

This sudden death clause was added to the bill by its nominal author, assemblyman Eduardo Garcia, who turned over writing responsibilities to telco and cable lobbyists early in the process. He’s a democrat and, ironically, represents Riverside County, although not the part that includes the project area. Anza is in the assembly district next door, which is represented by republican Randy Voepel, who sent a letter of support for the project, but has otherwise been missing in action as AB 1665 slithers through through the legislature.

In the past, the CPUC has taken the position that what counts are the rules that are in effect when the application is filed. But that’s not firm ground in any case, and for the Anza project, it’s very thin ice. Frontier has been aggressively litigious – at times, egregious – in opposing state subsidised broadband upgrades. Except, of course, when it’s getting the subsidies. And attitudes towards competitive projects are hardening at the CPUC. If AB 1665 becomes law before the CPUC votes on whether or not to fund it, the outlook for the Anza project is very bleak.

California upgrades Altice’s fiber, but the favor isn’t returned

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California didn’t make the cut for Altice’s fiber to the home upgrades, but it has upgraded one town here to gigabit-level cable modem service. In a press release praising its own FTTH ambitions, Altice was careful to point out that only three contiguous northeastern states are on its fiber list. States which also happen to be where it faces competition from Verizon’s FiOS FTTH service…

Design and construction have commenced for several hundred thousand homes concurrently in areas of New York, New Jersey and Connecticut. The Company is on track to reach one million homes constructed by year end 2018.

That’s also a region that Altice picked up when it purchased Cablevision last year, in its second, and by far its largest, acquisition of U.S. cable systems. Its first was Suddenlink, a much smaller operator that has a few scattered outposts in California. Although Altice left the door open to upgrading Suddenlink systems when it first unveiled its FTTH plans, so far it hasn’t walked through it.

What it has done in Suddenlink’s territory is boost the capacity of some of its hybrid fiber-cable systems. So far, the press release says, Altice has upgraded “more than 60 percent of its Suddenlink footprint” to gigabit levels, presumably via DOCSIS 3.1 technology.

That 60 percent only includes one Californian community, Mammoth Lakes. What’s different about it? Altice doesn’t say, but I’ll make a guess. Mammoth Lakes is in Mono County, and Digital 395 runs right through it. It’s an open access fiber network that stretches 500 miles from Reno to Barstow along the eastern slope of the Sierra Nevada, paid for by grants from the California Advanced Services fund and the federal stimulus program. Long before it was a gleam in Altice’s eye, Suddenlink hooked into it and boosted service speeds in Mammoth Lakes by a factor of ten, at no extra cost to its subscribers.

Fast and cheap middle mile access makes a difference.

G.fast isn’t so gee whiz compared to fiber, Verizon exec says

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G.fast technology, which in theory allows telcos to push gigabit speeds over existing copper wire, isn’t a good substitute for fiber upgrades, according to Verizon’s director of network planning. Vincent O’Byrne, quoted in an article by Sean Buckley in FierceTelecom, said that even in multi-tenant office buildings or apartments, it’s more cost effective to install fiber all the way to the customer, than it is to bring fiber in or near a building and then use G.fast to close the gap…

“It’s a bit more expensive to put the single family unit fiber connections out there, but we have the same kind of service as the rest of the network,” O’Byrne said. “We also found that the trouble report rate is less on the fiber all the way to the living unit.”

“At Verizon we were finding the trouble reports on the copper were two to three times more than when we had fiber to the living unit,” O’Byrne said. “For a long time, the copper plant in the Verizon network was not as good as it was in some locations so if we went to G.fast it would be low volume and we would have the same issues five years down the road.”

Of course, if Verizon maintained its copper plant, instead of letting it rot on the poles and then selling it off, as it did in California, some of these issues might not have come up. But it’s true that copper circuits carrying G.fast traffic need to be relatively pristine in order to work over any real distance. If a lot of work is needed, there’s not much of a cost difference between refurbishing copper and replacing it with fiber.

Rapid and constant changes in technology are also a problem. O’Byrne said that as equipment hits end-of-life, it can’t always be replaced with compatible gear, and the mix of different generations of technology can be costly to maintain and difficult to support.

Rural Michigan voters approve higher taxes for faster broadband

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Voters in a Michigan town overwhelmingly approved adding about $22 a month to their tax bills, in order to pay for the construction costs of a municipal fiber to the home system. Lyndon Township is in a rural area of southern Michigan, where broadband service is described by a local news site as “almost entirely lacking” (h/t to MuniNetworks.org for the pointer). According to a story in the Chelsea Update by Lisa Allmendinger, the vote was 66% to 34% in favor of the property tax hike

Based on currently available taxable valuation data for Lyndon Township, the average cost per property owner for this construction will be about $21.92 per month. Estimated costs for basic internet access will be between $35-45 per month. This internet service will provide a basic speed of 100Mb, with no caps on data usage, with 1Gb (gigabit) speeds available for about $60-70 per month.

The average combined cost of the millage for infrastructure and monthly fee for basic service will be between $57-67 per month.

On the face of it, this muni FTTH project is credible. It’s small town – about 900 homes – and a small system, which means even a small disconnect between the business plan and reality can have big consequences for taxpayers. But the $22 per month tax hit is in the same ballpark as estimates elsewhere, including in San Francisco and for the Utopia project in Utah. It’s estimated to be a $7 million project, in other words right around $8,000 per household, which is a realistic figure for a rural build. If there are cost overruns or take rates don’t match projections, taxes might go up, but probably not by a huge amount.

It’s an honest approach to municipal FTTH financing. Instead of pie-in-the-sky promises, a realistic price was presented to voters and they agreed to pay it.

Economics of fiber favors rural cable upgrades

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If your local cable system is in bad shape, you might be in luck. According to an analysis done by Daniel Frankel at FierceCable, the economics of upgrading cable systems that were last upgraded (or not) in the 1990s to the next generation of service favors replacing coaxial cable with a full fiber to the home build. That explains some or all of the reasoning behind Altice’s decision to convert some of the Suddenlink and Cablevision systems it acquired to FTTH.

As quoted in FierceCable, Robert Gessner, president of Massillon Cable TV (MCTV), a small cable system in Ohio, explained that earlier hybrid fiber coax upgrades were not done with broadband service in mind, which meant more coax and less fiber…

“We debated it for a long time,” he said. “The decision starts to some extent with our last upgrade. When we transitioned our plant from coax to HFC in 1995, we built it for television, and we built out the largest node sizes we could”…

“If we had waited five or six years and did our HFC upgrade in the early 2000s, after cable modems became ubiquitous, we would have built smaller nodes,” he explained. “If you did your HFC upgrade early, you have a lot of fiber to run.”

Consequently, DOCSIS 3.1 upgrades, such as Comcast is beginning to roll out, aren’t much cheaper than a fiber build, which delivers more long term benefit. MCTV is offering 100 Mbps down and up to homes with fiber now, and has the plant to offer even faster service in the future, if it chooses.

That could be good news for rural Californian communities where independently-owned cable systems can still be found. Whether it’s good news for Californians who rely on the scattering of small systems Altice purchased from Suddenlink is another question, though. Altice will be factoring competition and economies of scale into its FTTH upgrade decisions, and its acquisitions are concentrated in the northeastern U.S., where it goes head to head with Verizon fiber. The math is likely to come out differently in California, where Altice is thin on the ground and faces little threat from Frontier and AT&T.

CPUC debunks Frontier’s service claims, approves FTTH grant in Phelan

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The high desert community of Phelan, in San Bernardino County, will get gigabit class fiber to the home service. The California Public Utilities Commission voted four to one yesterday to approve a $28 million grant to Race Telecommunications, which will cover 60% of the cost of building the project. The single no came from commission president Michael Picker.

The decision had been delayed two weeks, while Race and Frontier Communications explored ways they might work together. That discussion came at the request of commissioners, who were trying to avoid spending state money in an area that was also getting federal subsidies, albeit for relatively minor upgrades to ageing DSL systems that will not meet the CPUC’s minimum standards.

The CPUC also did some ground truthing and discovered Frontier’s service claims did not line up with reality, according to commissioner Clifford Rechtschaffen…

Since our last meeting [CPUC staff] has gone down to Phelan’s central business district and established that they are in fact going forward with their upgrades to some households and businesses. They also though, and this I think is quite significant, they determined based on the engineering constraints of the project, that Frontier’s upgrade would not reach nearly 100% of the community not even the 85% that we thought before, but more like 60%. So 40% of the community would not be served. And that’s very significant. That means that we have a significant portion of the community would not be served in an area that we have identified as our highest priority.

But Rechtschaffen also warned that the Phelan project shouldn’t set a precedent, and other pending projects should be looked at differently.

The backlog of proposals for California Advanced Services Fund subsidies is being whittled down. Four grant applications are still pending, and only one of those – a middle mile project proposed by Ducor Telephone in the Tulare County mountain community of Kennedy Meadows – is completely outside of the current phase of the federal Connect America Fund subsidy program. Although, as a small rural telephone company, Ducor has access to money from related federal programs.

The other pending projects – Connect Anza in Riverside County, Vandyland in Santa Barbara County and Las Cumbres in Santa Cruz County – are, like Phelan, in the former Verizon territories acquired by Frontier and share some overlap with federally funded areas.

Net neutrality, San Bernardino FTTH endorsed by CPUC

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A $28 million grant for the Gigafy Phelan fiber to the home project in San Bernardino County and a statement opposing plans to roll back net neutrality rules were approved this morning by the California Public Utilities Commission. The exact comments to the FCC as it considers scrapping common carrier status for broadband service are still to be determined. After first trying to delay the filing, commission president Michael Picker opted for another round of editing before Monday’s deadline.