broadband

Verizon CEO comes out swinging against net neutrality

I gotta say, any trade show that opens the ceremonies with some trash talkin’ has my attention.

After giving up a little hip-hip-hooray for Verizon’s long-awaited 4G network (ready for 60 devices thus far and expected to be in 25-30 markets next year) at the opening keynote of SuperCOMM 2009 on Wednesday in Chicago, CEO Ivan Seidenberg shelved his warm and fuzzy feelings there.

The Federal Communications Commission was on the cusp of releasing its proposed net neutrality regulations — a hard sell for the SuperCOMM crowd, to say the least.  Seidenberg pretty much stopped short of calling the net neutrality proponents (and their sympathizers on the FCC) lefty wingbat commies.

“If this burdensome regime of net regulation is imposed on all parts of the Internet industry, it will inject an extraordinary amount of bureaucratic oversight into the economy’s main growth engine for the future,” he said.

Seidenberg said his main beef with net neutrality proponents was their suggestion “that network providers like Verizon and applications providers like Google, Amazon and others occupy fundamentally different parts of the Internet ecosystem — a binary world of ‘dumb pipes’ on the one hand and ’smart applications’ on the other.”

Verizon Wireless and Google — who has been at the front of Team Net Neutrality — are partnering to release a smartphone that runs on Google’s Android system.

“This is a mistake, pure and simple: an analog idea in a digital universe,” he said. “We can’t create smart economy by dumbing down our critical infrastructure.”

BT wants content providers to pay to play. Well, duh!

BT wants content providers to share the cost of providing their content, which makes total sense from BT’s point of view and doesn’t much interest content providers. As my mother always said: Why buy the cow when you can get the milk for free? (a handy metaphorical construct for so many occasions).

In the last few weeks, BT faced accusations that it was limiting download speeds for the BBC’s video content player, the iPlayer. After some stalling, a BT spokesman came clean to silicon.com: Yes, BT was limiting video-steaming content on its basic service package. In truth, the truth makes a better point on BT’s behalf than keeping it quiet.

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Wi-Fi: You can take it with you

Being neither 3G nor 4G, Wi-Fi, with its “no G” status, is much in the news these days, which goes to show that beyond the next-gen hype, there’s life (and competition) in Wi-Fi yet.

First let’s look at Qwest, which is offering its high-speed Internet customers a good deal — free Qwest Wi-Fi access at 17,000 hot spots nationwide. Qwest Wi-Fi is actually rebranded AT&T Wi-Fi, so there’s no doubt a wholesale deal in place. Some years ago, this deal would have been unthinkably anti-competitive, but both of the former Baby Bells operate in completely separate wireline territories, and Qwest doesn’t own any wireless assets. So why not?

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Mobile broadband forecast: There’s no joy in ARPU

The good news, according to global consulting firm Ovum, may be that users accessing mobile broadband-enabled laptops and handsets will increase revenue by more than 450% in 2014 compared to 2008. Mobile broadband adoption, of course, means 3G and 4G mobile data technology adoption. Projected revenue? $137 billion globally.

But wait, there’s a downside. Mobile broadband growth refers to increases in the number of users and the amount of data traffic. But the joy doesn’t spread to average revenue per user (ARPU), Ovum says. Instead wireless ARPU is expected to drop significantly during mobile broadband’s meteoric rise, with projected growth of only 44% of the rate of total users — a dilemma also faced by wireline network carriers.

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Broadband stimulus: A universal service?

Like the housing bailout, the telecom industry has its very own hot-head issue. It’s a little like crazy radio, but the people taking up the airwaves are talking about the $7.2 billion in broadband stimulus funds earmarked to help build out infrastructure for rural and underserved areas. Economists at a recent American Enterprise Institute seminar in Washington D.C., batted it back and forth: Are rural residents deserving of broadband? And would they even know what to do with it if they had it?

Drawing the most fire, former FCC economist Michael Katz bashed rural life to the extent that it got the attention of NPR’s well-modulated Morning Edition. And New York Times blogger Saul Hansel weighed in with his opinions on various economists’ views.

With its Broadband Connection Highs and Lows Across Rural America, The Daily Yonder website is keeping it rural, and offered what appears to be the most knowledgeable analysis of broadband in exurban areas, complete with a map of which counties have the highest broadband concentration. We’ll have plenty of time to point fingers on this one, but even I couldn’t help but comment given my rural background. Any type of country-wide infrastructure buildout has had some kind of government help, and in my view, this is the next universal service.

Alcatel-Lucent’s earnings: Moving to half-full

It’s much harder to see the glass as half-full when you’re used to half-empty — or completely empty. Enter Alcatel-Lucent’s 2008 year-end financial results and its $6.2 billion loss. So it may not sound like it at first, but there’s something in that glass, and CEO Ben Verwaayen, who took the top post in September 2008, is starting to hear the Perrier fizz.

Alcatel-Lucent stock went up after the Q4 ‘08 earnings report (released Feb. 4) -– which isn’t easy to do this year. The new chief sees positive signs in things like cash flow being at its highest level in two years, as he explained his view of the company in a BusinessWeek interview. The company plans to make good on promises made last December to reorganize and refocus its strategy, and that means less emphasis on traditional products (read telephone switching equipment).

Verwaayen is shifting the company’s focus to services and Internet-related technologies, while placing less emphasis on traditional products like telephone-switching equipment. The analyst community sees Alcatel-Lucent as doing what it promised.

As part of its new strategy, Alcatel-lucent isn’t trying to do everything itself. To address certain hardware maintenance and expense, Verwaayen said the company may outsource legacy equipment servicing to established vendors that could “co-partner” with Alcatel-Lucent.

And to gain some nimble startup advantages — which is like turning the Titanic for a company the size of Alcatel-Lucent — Verwaayen said the company has asked its Bell Labs research division and its carrier product group to keep an eye out for innovative startups and work with them.

In December, Verwaayen said Alcatel-Lucent would focus on four broad areas in 2009: IP, optical, fixed-line broadband and mobile broadband (particularly Long-Term Evolution, or LTE).

In terms of strategy and services, Tom Nolle’s commentary, Telecom operators need vendor help to justify new investment benefits, discusses how Alcatel-Lucent is one of the main vendors that could help service providers sort out their next-generation network architectures. But only if it can get out of its own way and move forward with the new strategy.

Proposed FCC head is an FOB

The rumored new head of the FCC is an FOB. That’s “Friend of Barack,” people, as in a former Harvard Law School classmate of the president-elect, who definitely knows his way around Washington D.C. (Yes, he’s on Facebook, but has he friended you?)

The nomination of technology exec Julius Genachowski is still an official secret, which is obvious because it’s been blasted all over every website and publication that has any interest in communications policy. The Genachowski nomination will be no big surprise, as he is already Obama’s chief technology advisor already.

Genachowski already knows the FCC drill, as he was chief counsel for Reed Hundt, the FCC chairman under former President Bill Clinton, and has worked at IAC/InterActiveCorp and other technology companies. He also co-founded LaunchBox Digital, a venture capital firm in Washington, D.C.

What policies does Genachowski favor? We’re hearingnet neutrality (government mandated?, cheap broadband for everybody, and media ownership rules that favor diversity.

Even before Obama’s inauguration, telecommunications policy and regulation has been in the spotlight, as the new Commissions will need to immediately deal with the conversion to digital television and the Obama universal broadband strategy.

The FCC is supposed to ensure that the digital television conversion on Feb. 17 goes smoothly (only an estimated 20 million people to switch and the government fund that provides conversion box coupons running out of money). The Obama transition team made it clear that the president-elect would like to push the conversion deadline back to the summer, citing readiness and funding concerns.

In the longer term, building out broadband is part of Obama’s economic stimulus package. The new FCC chairman will hear every possible viewpoint on how to accomplish a broadband buildout and arguments who should be allowed to get tax credits or other incentives to do so. Navigating that free-for-all alone will show us what Genachowski is made of. Stay tuned.

Broadband stimulus: Let’s get it done, not repeat history

I live in the policy belt where there’s no rust in sight and the river of policy statements flows with honey. There’s never a recession in the policy-wonk biz, so with that setting, let’s talk about President-elect Obama’s broadband stimulus package.

As the new administration works with Congress to get a potential $1 trillion economic stimulus package in place, telecom and cable lobbyists will be pressing the flesh over talk of broadband expansion as one-part U.S. economic revival and one-part show the world the U.S. isn’t a has-been in a global economy.

What’s good news for telecom is that unlike the automotive industry, product demand is growing. Obama has been clear that he wants to make sure broadband access is universal so inner cities and rural areas are served as well. Harsh but true, most telecom providers offer broadband in the most lucrative locations. And why wouldn’t they? Again, unlike the automotive industry, they have to pay for their own network infrastructure, so to build every where, even if they lose money doing it, they’re going to need incentives.

A broadband stimulus package that would extend network coverage or increase speeds in existing areas may be in the $20-to-$30 billion range, if reports are true. It sounds like infrastructure-building tax credits are on the table, anywhere from 60% for new builds and 40% for speed increases.

Already, the scramble for who can benefit from potential tax credits has begun. There are always public interest groups that cry foul about giving an advantage to companies that already have and know how to build and run networks. Weighing in already are organizations including Public Knowledge and Free Press. That’s their job.

The behind the scenes rumor-mill says that for the ObamaAdministration, this isn’t about increasing competition. Bravo. I’ll take network expertise any time. Verizon, AT&T, Cox Communications and Comcast — to name only four in what appears to be a working cable/telecom broadband duopoly — know how to build broadband networks. So let them do it, with tax credits if it gets it done faster.

I don’t want to sound like Father Time or anything, but, did we not learn a lesson in the 1990s when anyone with a backhoe decided to build a high-speed, fiber-optic network? Lest history repeat itself so soon, let’s remember who went bankrupt and who ended up picking up those new fiber optic networks for a song. Building, maintaining and running a broadband network isn’t a no-brainer, so I’m all for keeping the hyperbole down and getting the job done.

U.S. telecom and cable companies are already struggling to figure out how to monetize their networks, and they’re still cutting jobs. Maybe this demand-driven industry can even create jobs.

The bottom line is, broadband in the U.S. needs to grow, and if the plan gets bogged down in bickering about who should be allowed to get a tax break in this often razor-thin profit business, I swear I’ll be blogging on the Capitol steps in protest, and I hope I see you there.