IP Capsule - August 10, 2007

Thu, 08/09/2007 - 8:00pm
Brian Santo
   August 10 , 2007 
IPso Facto...

Q2's telco blues
The second quarter is usually the weakest of the year when it comes to attracting broadband subscribers, what with college students canceling service for the summer, homeowners going Brian Santointo selling mode, and about one-fifth of everyone's engineering departments heading out to the desert for Burning Man, and this Q2 was little different... but for some interesting results from the telco sector.

For the last couple of years, the telcos have been gradually chipping away at the great lead that cable operators established in total cumulative broadband subscribers, but in Q2 telco broadband growth fell off significantly more than did cable modem growth.

Most of the cable operators added at least as many cable modem subscribers in Q2 '07 as they did in Q2 '06, and many added more (Time Warner Cable was the notable counter-example).

Meanwhile, the major telcos did appreciably worse in Q2 '07 than they did in Q2 '06. SBC seems like an exception, but that's a misleading artifact of the way the accompanying chart is built. BellSouth and SBC together totaled 470,000 new broadband subscribers a year ago; now combined as AT&T – but still listed on the chart as SBC – they together totaled only 400,000 adds. The telco numbers include both DSL and FTTx Internet subscribers.

Major Cable Companies
Notes: Bell Canada numbers reflect a spin-off of lines. AT&T remains split into BellSouth
and SBC until Q1 '07, where the total is tallied under SBC.
 Source: Information Gatekeepers Inc.

There's a case to be made that AT&T and Verizon are shifting their attention to U-verse and FiOS, respectively. But still. Look at the breakdown of Verizon's 288,000 adds – 203,000 FiOS Internet subscribers plus only 85,000 new DSL subscribers. You have to go back to 2000 to find such a miserable DSL quarter for Verizon.

Can Verizon really be neglecting DSL that badly? During the quarter, Verizon had been pushing DSL into some really tiny towns, some with populations measured in the hundreds. These were the types of markets that Verizon joined up with DirecTV to reach.

Verizon took some flak for spinning off some rural customers in New England to Fairpoint Communications. The charge was that Verizon didn't want to spend the money to upgrade these customers to DSL – let alone FiOS, so it was cheaper to just get rid of them. Maybe with its DSL rollouts in rural areas elsewhere, Verizon was just trying to deflect some of the criticism leveled by detractors of the Fairpoint deal.

Alternatively, DSL growth could be nearing a limit.

But then wouldn't cable broadband be down too?

My guess is that Information Gatekeepers Inc.'s (IGI) surmise is correct: even with the billions of dollars set aside for FiOS, Verizon is nonetheless spreading itself thin, and the area that's getting short shrift is DSL marketing.

According to IGI, "A customer lost in this game is hard to recover – no one likes to go through the agony of changing ISPs and highspeed carriers. While it is understandable for the telcos to have a focus on the massive undertaking they have going, they cannot afford to drop existing programs!"

Maybe the issue is that Verizon literally can not afford to support all of its existing programs. Time will tell.

Brian Santo, IP Capsule Editor & CED Magazine Editor

Conn. AG pressures AT&T to get franchise license
Following a Connecticut court decision that U-Verse is indeed a cable service, Connecticut Attorney General Richard Blumenthal is moving to force AT&T to apply for a statewide franchise license, according to several press reports.

Blumenthal has filed an emergency petition urging Connecticut's Department of Public Utility Control (DPUC) to order AT&T to acquire a cable franchise for U-verse IPTV. If the DPUC agrees, AT&T would have to stop signing up IPTV customers until it secures a statewide license.

ADB rolls IPTV set-top boxes into Chile, North American telco
Advanced Digital Broadcast (ADB) made it into North America with its HD set-top. NDTCThe ADB-3800W set-top box, featuring Minerva Networks iTVManager software, has been deployed on North Dakota Telephone Company's for a new service that will use SD and HD, as well as both MPEG-2 and MPEG-4 formats. ADB also announced that its ADB-3800SD IPTV set-top box has been selected by Telefonica Chile.

Report: more and more broadband subs can get Internet TV
Research and Markets figures about one in five broadband homes will soon have the capability to watch some form of Internet-based video on the TV set.

By year-end 2007, around 12 million homes will be equipped with one of several Internet video capable TV devices. That's approximately 20 percent of U.S. broadband homes.

This ratio will rise to slightly more than two-thirds of all broadband homes, or around 72.8 million households, by year-end 2017. But, R&M cautions, the mere availability of devices capable of turning TVs into Internet video viewing devices doesn't guarantee that viewers will actually use that capability.

The company's report, "New Video Dynamics: Delivering Internet Video to TV Sets," covers any number of devices that might come into play, including gaming consoles; special appliances and extenders; multichannel video distributors; all-purpose digital TV set-tops; and high-end TV sets, among others.


Cogeco taps Sigma for SIP-based VoIP
Cogeco Cable has tapped Sigma Systems for its deployment of SIP-based services across its Ontario footprint. Cogeco will use Sigma's Service Management Platform (SMP) and Voice Service Package to configure, provision and manage both VoIP and high-speed Internet services on the SMP platform.

RCN arranges to offer SIP VoIP
RCN will begin offering SIP-based voice over Internet Protocol (VoIP) through an agreement with deltathree. deltathree will provide RCN with its private-label consumer A Narrow LossVoIP solution, enabling RCN to expand its phone service well beyond its service areas in New York, Boston, Chicago, Eastern Pennsylvania and metro Washington, D.C. RCN said the VoIP services will not replace but rather supplement the switch-based services it currently provides.

Vonage continued to narrow loss in Q2
Vonage's Q2 revenue soared 43 percent, to $206 million, from $144 million in the year-ago quarter. The company's net loss narrowed to $34 million from a net loss of $74 million a year ago. Vonage added approximately 57,000 net subscriber lines during the quarter and finished with 2.45 million lines in service.

DOCSIS 3.0 vendors can test provisioning with Incognito
Incognito Software is inviting customer premise equipment (CPE) and cable modem termination system (CMTS) vendors to test their products in a multi-vendor, IPv6 environment, using Incognito's provisioning and network resource management systems. Incognito developed its Broadband Command Center solution for DOCSIS 3.0 with Motorola.


Blockbuster snaps up movie download site
In order to better compete against NetFlix Blockbuster will buy Movielink. While Blockbuster said Movielink will continue to operate as separate service, the deal allows Blockbuster to match Netflix's download service that was launched earlier this year.

Another Toughbook works with Verizon Wireless

The Toughbook 52 computer from Panasonic Computer Solutions, introduced last month, has been certified to work with Verizon Wireless' wireless Internet access. The Toughbook 52 comes with built-in access to the EV-DO Revision A-based BroadbandAccess service from Verizon Wireless. Download speeds range from 600 kbps to 1.4 Mbps, and upload speeds averaging 500 kbps to 800 kbps.

Vodafone joins WiMAX Forum
Vodafone has joined The WiMAX Forum. The company said its membership in the group complements its memberships in other industry bodies such as the GSMA, 3GPP and the Next Generation Mobile Network initiative. Steve Pusey, Vodafone's global chief technology officer, said "Vodafone remains technology neutral as far as our future network options are concerned, and joining the WiMAX Forum is a logical step as we seek to evaluate the full capabilities and potential of this technology."

Company: Digisoft
Headquarters: Cork, Ireland
CEO: John Allen

Claim To Fame: Digisoft has pulled together an IPTV solution it says includes everything needed, from headend to set-top.

Recent News Of Note: The company recently teamed with several U.S. companies to present an IPTV system that combines over 200 TV channels provided by CSI Digital, encryption and conditional access provided Verimatrix, VOD and time shifting provided by GoBackTV, with Digisoft's Application Management Server as well as a flexible and dynamic program guide on a Java Set Top Box.


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