Verizon Increases Fiber Upstream Speeds

Light Reading has published an article describing how Verizon is increasing the upstream speeds of its FiOS FTTH service.

Tier Old New Old New
Upstream Upstream Downstream Downstream
Entry-level 2 Mbit/s 5 Mbit/s 10 Mbit/s 15 Mbit/s
"Flagship" mid-level 5 Mbit/s 15 Mbit/s 20 Mbit/s 25 Mbit/s
Entry-Level (NY area) 2 Mbit/s 15 Mbit/s 10 Mbit/s 25 Mbit/s
"Flagship" mid-level (NY area) 5 Mbit/s 20 Mbit/s 20 Mbit/s 35 Mbit/s

Verizon is taking advantage of the the technical advantages of fiber vs. cable modems to respond to an aggressive Cablevision in the New York area in particular.

Cox Cable's Traffic Management Strategy

Light Reading published an article describing Cox Cable's strategies for traffic management. Cox's pilot approach divides traffic into "time-sensitive" (e.g., Web pages, voice calls, streaming videos, games), and "non-time-sensitive" (e.g., file uploads, peer-to-peer, and Usenet) categories. The system will delay the upstream, non-time-sensitive traffic when network congestion is detected. All traffic returns to normal when the congestion abates.

This is the right approach - classifying traffic by its response time requirements and delaying lower priority traffic during periods of congestion. This is a much more reasonable approach than the monthly usage caps that other operators are implementing.

Cisco Introduces Connected Consumer Electronics Devices

Cisco introduced a line of audio and video connected media systems for consumers. At the same time Cisco introduced Eos software platform that lets content provider create web sites that can provide content to these systems. Cisco also announced a licensing program that allows other consumer device manufacturers to offer devices that can operate in this environment.

This announcement appears to be a major step forward in making the Internet the central source for entertainment media. Internet content will become very important during the next decade. The Internet will give the cable TV, the satellite TV, and the Telco IPTV providers a real run for their money.

Is Wireless Important to Cable Companies?

A Light Reading article discusses comments by a financial analyst who believes that wireless is not an important element to add to cable bundles. His point is that bundles require discounts, which reduces revenues.

I think he is probably right about adding wireless to cable bundles. Wireless probably will have less effect on consumer decisions than the other elements of these bundles.

However, in the long run as carriers offer wireless and broadband wireline services based on a single, integrated IMS infrastructure to deliver VoIP services there will be tremendous opportunities to integrate wireless and wireline services into a single offering. The cable companies will have to be in a position to offer similar integrated wireless and wireline services to stay in the game.

The moves that the cable companies are making with Clearwire today are a good step to prepare for that day.

DOCSIS 3.0 to Provide Fiber Push

An article on Light Reading cited a statement by Charter Communications that it will cost about $8 to $10 per subscriber to bring DOCSIS 3.0 services to a home, including the new cable modem termination system (CMTS) equipment and the routing systems. It does not include the cost of the new DOCSIS 3.0 cable modem or the cost of provisioning the service.

Verizon has said that it costs them $800 to $1,000 per home to make its FiOS fiber service available with a maximum 50 Mbps data service today. The cable companies can accomplish the same thing for one percent the cost.

DOCSIS 3.0 will provide the cable companies a strong defense against FiOS and be a very strong offensive weapon against ATT's VDSL U-verse service. Verizon will need to improve the performance and lower the price of its FiOS high speed data services. ATT will need to move from VDSL to GPON to be competitive.

White Space: Taking the Internet Back to the Future?

The FCC decision this week to open up the TV "white spaces" to unlicensed wireless services has great potential to break the hammer lock that the cable and Telcos have on the consumer Internet business today.

Ten years or so ago, before the advent of cable modem and DSL services, there where hundreds, if not thousands, of ISPs providing dial up consumer Internet access. There were a few large ones such as Prodigy and AOL along with many, many small providers. It was easy and inexpensive to set up a dial up ISP service. Get a T1 line and attach a dial up mux, and you were in business.

The advent of broadband services brought this to an end. The cable modem and DSL services had the ISP service bundled in with them. This gave the cable companies and the Telcos a strong strategic advantage. AOL continues to exist, but is a shadow of its former self. EarthLink provides Internet services on top of Telco DSL services, but has a very small share of the market. Almost all broadband Internet users subscribe to cable or Telco Broadband services.

The white spaces spectrum is the UHF TV spectrum that is not being used to broadcast TV content. There is generally 100 MHz of vacant spectrum that can be used for white spaces applications in the major metro areas. There is 200 MHz or more of vacant spectrum in more rural locations. This is enough to support several ISPs that want to offer services.

WiMAX and LTE 4G technologies can support wireless broadband data services that will provide a 1 to 5 Mbps. This will compete well with broadband cable and DSL services. These wireless services will share the conveniences of mobile voice service that have made them popular. These white spaces services have the potential to dominate the low end of the broadband data market. People will like their personal nature and their go anywhere convenience.

This will drive the cable companies to DOCSIS 3.o and the Telcos to fiber, which will give us all that still want them much higher performance on our home broadband services. Enabling start ups to compete will be a good thing for all of us consumers.

Cox Clarifies Wireless Plans

Light Reading published an article that clarified Cox Cable's wireless plans a bit.

• Cox will have autonomy on the Sprint network, controlling the backoffice, customer service, product integration, branding, supported devices, packaging, and product plans.
• Cox will use its AWS spectrum that it acquired in 2006 to support a 3G network based on EV-DO Revision A.
• It plans 700 MHz spectrum LTE field trials sometime in 2009.

This approach means that Cox's own AWS 3G service and its Sprint-based service will both be based on CDMA. It is likely that it will be able to offer handsets that can run on both networks. It is less clear how LTE will fit in, but Verizon's commitment to LTE is likely to produce handsets that support both CDMA and LTE. It will be interesting to see how this works out.

Cox historically has taken the leadership on new technologies such as cable telephony. It has taken a strong technical approach in the past that has led to the deployment of robust services. It looks like it is taking the same approach with wireless.

Cox Cable to Offer Wireless Bundle in 2009

Cox announced that add a wireless component to its bundled offering that includes TV, high speed Internet, and telephone services today. Cox will utilize Sprint's wireless network to enter the market in 2009. At the same time, Cox is building its own 3G wireless network for additional market launches in 2009. Cox will also test 4G technology utilizing LTE. Cox acquired 700 MHz spectrum in about 10 areas in the U.S., including Los Angeles, Phoenix/Tucson, Las Vegas, New Orleans, and Atlanta.

Cox partnering with Sprint is no surprise since it is one of the partners in the Clearwire deal. However, its strategy is not clear. It seems to have the following options:

• Sprint's CDMA service on a national basis
• 3G in the 10 areas where it has 700 MHz spectrum
• LTE later in the 10 areas where it has 700 MHz spectrum

It will be interesting to see how Cox weaves all of this together in a way that makes sense to its cable customers. There is no compatibility between CDMA, WiMAX, and 3G. It does not seem likely to me that they will find any handsets that can support all of these serves.

Even with all of these problems, this is a key trend. The cable companies will have to develop strong wireless service offerings in order to be competitive in 2020.