“Comcast does not block access to any Web sites or online applications “ followed by “Comcast occasionally – but not always – delays some peer-to-peer file transfers” a false statement to Brad Stone at the New York Times. Comcast has definitely been blocking Bittorrent in some circumstances. Karl Bode at DSL Reports broke the story, and Peter Svensson of AP ingeniously advanced it by trying to send a public domain copy of the bible. The “major public relations problem” could have been easily avoided. I wrote in September “Kevin Martin, call Joe Waz of Comcast and tell them to fix the bug that's blocking bit torrent significantly before they create a problem for you.” Small changes in how they configured their traffic shaping would have minimized the issue. Far more important, Deutsche Telekom's Wolfgang Schmitz. explained they intend to sell priority on their new network, likely the most significant global net neutrality breach publicly discussed. They will watch "Every session, of every customer, all of the time." The equipment can degrade or block content that does not pay them for priority. They also plan to make money from highly targeted advertising. I'll let others get the facts on privacy and net neutrality. DSL Prime's story is that the DT network is designed for the 1980's, when bandwidth was expensive and congestion a major problem. Mathias Kurth, the very smart and powerful German regulator, discussed the issue when he was at Columbia CITI Friday, but didn't disclose what his policy will be. Kurth should show courage by declaring that if DT advertises 16 megabits, they should reliably deliver that speed. Actually, if they deliver only half of the promised speed, net neutrality issues mostly disappear. Few services, including HD video, need more than 8 megabits. If 8 megabits is reliable, very few would have any reason to pay for priority; the issue, and DT's expected profits, would diminish. (continues at end for length). Martin so far hasn't shown the common sense or courage to prevent the AT&T Echostar merger. Competition is a good thing, and AT&T buying a satellite carrier would reduce competition by almost a third across half the United States. Martin could simple say “We have to look at the deal very closely, although we'll try to say yes or no as quickly as possible.” The resulting uncertainty would probably be enough to block the deal. Kevin – speak up now and avoid a year of painful battles you don't need to face. Coming in DSL Prime is the news KPN in Holland is junking their “fiber/DSL” for true GPON fiber all the way home capable of delivering hundreds of megabits. British Telecom has essentially made the same decision, but is trying to get concessions from Ofcom's Ed Richards first. Richards has told me he's trying to get the fiber without spending taxpayer money. Verizon's doing it without subsidy, and the Wall Street Journal reports the results are now outstanding. BT has distinguished spokesmen urging a subsidy as “incentive.” I suggest a better “incentive” is to review the rates BT is getting from their depreciating copper lines. Richards could hint he would lower copper charges and BT's CFO would be insisting the company switch. Both KPN and BT face fiber competition from companies deploying 120 megabit shared downstream systems, capable of supplying 50 megabits to users most of the time. Eli Noam compared international broadband and concludes that the key driver to better results is cable competition. If you're on the East Coast, do register for Web Video Summit. The free part in the afternoon will include Andrew Baron of Rocketboom and many new companies and products. The paid program will be very strong. I picked the speakers, and I have a lot of first rate people. . http://www.webvideosummit.com/conference/sessionsbyday.php (There's room on the schedule to add “Hot new companies” and “Hot New Products.” Get to me quickly.) Comcast Blocking: What's Actually Going On Cuts off Bittorrent seeds Robb Topolski had the main facts when he posted on DSL Reports in May. “The interruption is accomplished by sending a perfectly forged TCP packet (correct peer, port, and sequence numbering) with the RST (reset) flag set. This packet is obeyed by the network stack or operating system which drops the connection. In other words, the Sandvine box intercepts the communication, blocks it, and sends a forged message to stop. I believe Comcast sets this to occur when a user is sending a file but not receiving it simultaneously (seeding), especially on packets going off their network. News reports say Comcast is also blocking IBM's Lotus Notes package and others. I and others have been reporting on the Sandvine technology for years. Sandvine actually is the least obtrusive of the "traffic shapers" at the edge, and a while back I recommended to a cable company that if they bought anything this was preferable. They were the first to design systems that left the connection live when you were going p2p to someone on the same network (which is much of the time). Their competition had a habit of blocking everything. The CEO of P-Cube, now part of Cisco, bragged to me, “I can block Vonage. I can block video.” Bandwidth is now generally so cheap ($10 for 100 gigabytes, one hundred hours of DVD quality video) that the shaping is only necessary where there specific bottlenecks. The average cost per user for the broadband bandwidth is less than $1/per month for a $20-50 service. The edge shaping boxes are almost always used where bandwidth is expensive (Singapore and India to the U.S., UK ISPs because BT charges ten times what it should cost.) Others use them to save any penny, or to defer modest upgrades when they are saving capex. Cable upstream is today often a bottleneck, downstream rarely in a decently maintained network. Most are essentially 1999 era designs. Their networks are built for about a 30 to 1 downstream to upstream load, partly because the old cable plant was never designed for an upstream return channel. The best solution is to rapidly move to DOCSIS 3.0 and shut off the analog channels. That allows cable upstream to go to 12o meg upstream (shared) or higher. Blocking p2p is not just about pirated material; the ABC Desperate Housewives at 1.9 megabits is hybrid p2p. It isn't really HD, but it looks great. The Comcast spokesperson talking to the Times may have made a simple mistake because he isn't technical and didn't understand what is going on. They should let Tony Werner or one of their other first rate engineers answer the questions next time. 50 Meg Downstream “12,000 Feet” 8 asymmetrical pair bonded Aktino's Hossan Salib is hooking up 25-50 megabit service to customers as much as 12,000 feet from the telephone exchange. Aktino's system doubles the downstream speed of their symmetric system, appropriate for applications including copper fed remote DSLAMs and mobile phone sites serving large volumes of data. The upstream is reduced to 10-20 megabits. One actual installation tested at 50+ meg down, 15 meg up, while the symmetric speeds would have been 25 megabits in each direction. VDSL2 allows changing the PSD mask to utilize more of the frequencies available for downstream. Asymmetry reduces the noise in the circuit, allowing higher speeds. For Aktino, this is only a software upgrade to their system. DSLAMs going to Deutsche Telecom, AT&T and China Upgrades pending at Verizon, BellSouth and possibly British Telecom 11M DSLAM ports shipped in Europe, the Middle East, and Africa, Margaret Miles of Dell'Oro writes me. Unbundled networks are being built from England to Slovenia. Deutsche Telekom has moved to the next stage of their 50/10 VDSL build, installing DSLAMs in many mid-sized cities. They have installed 33,000 remote DSLAMs, from Siemens, ECI and now Ericsson. AT&T is rapidly deploying U-Verse in the old SBC territory, and will make gestures in BellSouth territory. They are unlikely to hit the 19M they promised Congress for 2008, but the volume is adding up. Verizon is ready to move on their 100 megabit VDSL connected to fiber in the basement for Manhattan apartment buildings. There are 1.5 million lines close to fiber in BellSouth territory the company claimed would be upgraded to 50+ meg this year, but the latest word is that AT&T has killed the project. China Telecom and Netcom forecast flat subscriber growth of a combined 3M per quarter, but DSLAM sales in China remain high. China is the largest share of the 8M DSLAM ports shipped in Asia-Pacific. Close to a million Chinese have bought IPTV, which may be forcing an upgrade to ADSL 2+ and explain the demand. India is growing in DSL, but has fewer than 25M servable phone lines and will never be a market driver. India is adding 7M mobile phone accounts per month, a remarkable achievement. Landline counts are actually going down and they will almost certainly not expand the landline network. Margaret Miles of Dell'Oro allowed me to share DSLAM port shipment detail, which were up 22%. North America added 2,250K, including the remotes for AT&T. Europe and the Middle East were over 11M, as DT, KPN, and Swisscom rebuild their networks while unbundlers are winning millions of new customers. Asia/Pacific were over 8M, with China continuing strong. Taiwan and Korea are continuing the 100 meg upgrades. The rest of the world took 2M ports. 50-100M DSLAM ports are now obsolete, topping out at 6-8 meg down. Gear shipping in the last four years is designed for 15-100 meg, uses far less space and power, has better test capability, performs better, and is cheaper to operate. That's a $2-5B replacement opportunity, even as subscriber growth slows. The next big thing is only a one-day conference away. Come to the first-ever NewTeeVee Live in San Francisco on November 14, where we'll discuss topics like "The network makeover," "Is there money in long-tail video," and "Crossover hits: Web video meets TV." http://live.newteevee.com. WiMAX Future: One Day, Equipment Cost Similar to DSL Waiting for the chipsets Wimax modems are typically three times the $25-$40 cost of basic DSL gear, keeping growth slow. Mania Brooks pf ZyXEL, who won the contract to supply Sprint in the U.S., expects dramatic change when Intel and others ship their chipsets promised for late 2008. "Except for the chipset, WiMAX equipment is little different from DSL. The costs go up because most customers want WiFi, 2 channel VOIP, and other features, but the basic ships are the main reason prices are still high." She predicts that prices for basic models will rapidly fall below $100 as the new chips arrive, although $50 pricing is still far away. Sprint and Clearwire are spend $4B or so to run WiMAX across the U.S., with plans to include VOIP for telephony from the beginning. They'll be looking for revenue ASAP, so I believe they will subsidize the handsets/modems. Builds in Taiwan and elsewhere are already driving CPE revenues towards the $hundreds of millions. Some really big drivers (India, Indonesia, Africa) will probably be slow until 2009-2010, when the price drops. History Lesson: AOL’s VOIP Failure CTO explains adding customers cost too much Vonage and all independent VOIP are now totally marginalized because the ridiculous U.S. patent system allowed the empires to strike back. The royalties demanded – 12% of revenues – are about ten times as much as would be reasonable. Vonage may be able to cut advertising and survive, but the increased costs mean VOIP will remain at most a marginal player. The successful competitors around the world (Iliad, Softbank, Fastweb) sell both access and phone service. Standalone VOIP is only for niches. When SunRocket failed, John McKinley blogged about his experience as CTO and President of Digital Services at AOL. He “was to launch a Vonage-like competitor to the market by 3Q/2005. Luckily, I had a really talented team and a passionate leader (Gil Weigand) running the effort. In an 8 month period, they built a carrier-grade telephony company. This went well beyond the base technology development. It meant establishing a call center, building a fulfillment solution for the product, and navigating a litany of regulatory issues (including the new E911 requirement imposed by the FCC). Lots of 90+ hour weeks and cases of Red Bull. TotalTalk was a really elegant solution and the first fully E911-compliant solution in the market. …. We launched, and several things became immediately apparent: Customer acquisition costs were really high ($250-300), and nothing was happening to change that dynamic The major cable players were beginning to become real juggernauts, acquiring phone customers at low costs through really compelling double and triple play bundles The regulators were no fans of the alternate carriers (VoIP players), and that attitude was not going to change anytime soon The traditional phone companies were going to fight back, offering their own “all you can drink” calling plans at competitive monthly prices ($39-$49/mo), more to fight the attack by the cable industry than the VoIP industry, but there was material collateral damage to the VoIP sector as well There was inherent channel conflict in having a cable company and AOL under the same roof wanting to sell alternate versions of primary line service in the market at the same time, and due to the importance of Time Warner Cable’s growth to the stock price, any issues were logically going to go the cable company’s way (a painful but pragmatic reality). WE RAN OUR MARKET TRIALS, AND 3 MONTHS AFTER LAUNCH, I MADE THAT LONG WALK DOWN THE HALL TO OUR CEO AND CFO AND TOLD THEM I WAS SHUTTERING THE OPERATION. WE MADE THE TOUGH CALL.” PRESS HENNY SENDER DIDN稚PULL PUNCHES REPORTING IN 2002, 鍍 WORST MIGHT NOT BE HE OVER FOR THE TELECOM-EQUIPMENT SECTOR . NO ONE IS PREDICTING THE IMMINENT BANKRUPTCY OF THE BIGGEST OF THE EQUIPMENT MAKERS. AND WENT ON FROM THERE. SHE'S BEEN OFF THE TELECOM BEAT FOR YEARS, BUT SHE WAS THE FIRST NAME JIM ATTWOOD REMEMBERED WHEN HE MET A WSJ REPORTER. Carol Matlack demolished Alcatel-Lucent in a BusinessWeek article, with sources predicting Pat Russo is on the way out. She picked up a Les Echos report that Russo was ordered to present a turnaround plan by Oct. 30 to the board, likely with massive layoffs. The Alcatel GSM business "is hemorrhaging more than $1 billion a year in red ink," unable to compete. The analysts she quotes think Russo will dump Lucent's U.S. wireless business, the core of the company she ran, opening the question of what value, if any, remains of the Lucent they spent $10B to buy. DSL Prime readers know Alcatel remains the world DSLAM leader and has held market share despite attacks worldwide. Michael Wolff and Highbeam have created an edited alternative to Google News, newser.com. It looks very good, proving to my satisfaction that human beings can select pictures better than anything Google has come up with. On the other hand, this news junkie editor was seriously disappointed at the quality and depth of the stories chosen. They'll have to do better by the time they launch to get a high spot on my book marks. (via SAI) OWEN THOMAS AT VALLEYWAG IS INCREDIBLY SNARKY, WRITING THAT AOL FOLKS ARE NOW CALLING CEO RANDY FALCO AND COO RON GRANT AS "SMITHERS AND BURNS," AFTER SIMPSONS CARTOON CHARACTERS. HE LABELED COMPETITOR'S TECHCRUNCH40 CONFERENCE WEB 2.0'S 登 FFICIAL JUMPING OF THE SHARK. BUT HE'S ALSO A GOOD REPORTER, PICKING UP FROM BRAZIL WHY NEGROPONTE'S 徹 LAPTOP PER CHILD ISN'T NE FINDING BUYERS, SO WE ALL READ HIM AND NOT JUST FOR THE GOSSIP. PEOPLE LO・ LE MEUR痴LEWEB3 IS ONE OF THE BEST EVENTS OF THE YEAR, WHICH JENNIE & I THOROUGHLY ENJOYED LAST DECEMBER WHEN WE WERE TWO OF THE FEW AMERICANS. LO・ BROUGHT THE BEST OF THE EUROPEAN WEB CREATORS TOGETHER, ADDED A FEW STARS FROM OTHER FIELDS, FED US INCREDIBLY WELL, AND DIDN稚MIND THE JOKES ABOUT SMELLY CHEESES. (GREAT CHEESE, INCIDENTALLY.) IT WAS A GREAT OPPORTUNITY TO MEET THE EUROPEAN WEB-BUILDERS. A SLEW OF WELL-KNOWN FOLKS FROM THE U.S. ARE HEADING OVER THIS YEAR, INCLUDING DAVE WINER, CLAY SHIRKY, ESTHER DYSON, CHRIS SHIPLEY, JASON CALACANIS, JEFF PULVER, DAVID WEINBERGER, MICHAEL ARRINGTON, OM MALIK, AND MARC CANTER. WE壇DEFINITELY BE GOING BACK IF WVS WEREN稚THE SAME WEEK. PIERRE PRINGUET HAS JOINED THE BOARD AT ILIAD/FREE, AND I'M SORRY I MISSED THE TOASTS. HIS COMPANY, PERNOD RICARD, PRODUCES MUMMS AND PERRIER-JOU・ CHAMPAGNE. AT&T'S BOARD MEMBER AUGIE BUSCH CAN BRING HIS BUDWEISER BEER TO THE MEETINGS, BUT IT'S NOT THE SAME. "LARRY BABBIO ISN'T ON THE WAY OUT," THE LOYAL PR PERSON CLAIMED LAST YEAR. I REPORTED LARRY'S SIDELINING WAS THE LOGICAL CONSEQUENCE OF GINNY RUSTERHOLTZ TAKING OVER THE VERIZON WIRELINE BUSINESS. READING VERIZON'S 10K FOR THE BOOK VALUE OF THEIR WIRELESS SPECTRUM, I FOUND "LAWRENCE T. BABBIO JR. (62) SERVED AS VICE CHAIRMAN AND PRESIDENT AND AS AN EXECUTIVE OFFICER THROUGH DECEMBER 31, 2006," AND IS NO LONGER A MANAGER. THE LIST OF SENIOR EXECUTIVES IS INTERESTING. EVERY ONE HAS BEEN WITH VERIZON FOR AT LEAST THE LAST FIVE YEARS. DENNY STRIGL, FORMER WIRELESS HEAD NOW #2 TO IVAN, IS 60 YEARS OLD, SAME AS HIS BOSS, AND DOREEN TOBEN IS 56. SO IT'S FAR MORE LIKELY SOMEONE LIKE RUSTERHOLTZ (45), CIO SHAYGAN KHERADPIR (46) OR PERHAPS 52 YEAR OLDS JOHN LILLIAN OR LOWELL MCADAM WILL TAKE OVER. IVAN HAS BEEN ALMOST INVISIBLE IN PUBLIC SINCE THE NEW YORK TIMES MADE HIM A POSTER BOY FOR OVERPAID EXECUTIVES, BUT THERE'S NO REASON TO THINK HE'S ABOUT TO LEAVE. (HE'S RIDICULOUSLY OVERPAID BY ORDINARY MORTAL STANDARDS, BUT FAR LESS EGREGIOUSLY SO COMPARED TO SOME OTHER CEOS. HE IS ALSO MORE COMPETENT THAN MOST.) UK WALL STREET THE COLUMBIIA CIITII EVENT WAS RIICH WIITH PERSPECTIIVES FROM THE THE COLUMB A C T EVENT WAS R CH W TH PERSPECT VES FROM THE FOLKS WHO MAKE THE MARKET,, NOT JJUST TALK ABOUT IIT.. ,, CHIIEF FOLKS WHO MAKE THE MARKET NOT UST TALK ABOUT T CH EF STRATEGIIST AT FAYEZ SAROFIIM,, BLUNTLY STATED U..S.. PROVIIDERS ACT STRATEG ST AT FAYEZ SAROF M BLUNTLY STATED U S PROV DERS ACT LIIKE A “MONOPOLY”,, AND THE RECENT CABLE/TELCO PRIICE IINCREASES L KE A “MONOPOLY” AND THE RECENT CABLE/TELCO PR CE NCREASES ADD WEIIGHT TO HIIS OPIINIION.. ADD WE GHT TO H S OP N ON POLICY DEUTSCHE TELECOM IS WATCHING YOU "EVERY SESSION, OF EVERY CUSTOMER, ALL OF THE TIME." IN FRONT OF 1,000 PEOPLE, W OLFGANG SCHMITZ OF DEUTSCHE TELECOM IMPLIED HIS NETWORK WAS INADEQUATELY PROVISIONED AND FALSELY ADVERTISED. IN PARTICULAR, HE SUGGESTED HIS VDSL NETWORK CANNOT RELIABLY DELIVER TWO MEGABIT VIDEO STREAMS. THAT IS AMAZING GIVEN THAT DT IS ADVERTISING SPEEDS OF 16 TO 50 MEGABITS. "IT DOESN'T SCALE," HE EXPLAINED. HE WANTS THE BERTELSMANS, BURDAS AND GOOGLES OF THE WORLD TO PAY DEUTSCHE TELEKOM TO DELIVER VOICE AND VIDEO TO GERMAN CUSTOMERS. DT DOESN'T HAVE CABLE COMPETITION AND THE REGULATOR MAY LET THEM GET AWAY WITH IT. . SCHMITZ IS BUILDING THE ULTIMATE "INTELLIGENT NETWORK" SPENDING HUNDREDS OF MILLIONS TO CAPTURE "EVERY SESSION, OF EVERY CUSTOMER, ALL OF THE TIME." HIS SUPPLIERS (MOSTLY SIEMENS) LOVE HIM, BECAUSE THEY CAN CHARGE FIVE TIMES AS MUCH FOR "SMART" NETWORK GEAR. ONE EXPLAINED 妬 NEEDS A LOT OF T CYCLES TO DO ALL THIS WORK. DT IS A YEAR BEHIND THE FRENCH OFFERING VIDEO AND THEY ARE STILL DEBUGGING THE NETWORK AND MICROSOFT IPTV. A COMPLICATED NETWORK COSTS MORE TO BUILD AND IS FAR HARDER TO MAINTAIN. IT'S VIRTUALLY A JOB GUARANTEE FOR THE MANY ENGINEERS RUNNING THE SYSTEM. THAT A DIFFERENT WAY IS POSSIBLE HAS BEEN OBVIOUS SINCE DAVID ISENBERG'S SEMINAL "RISE OF THE STUPID NETWORK" ESSAY IN 1997. WITH MORE EXPERIENCE, WE'LL IN PARIS A FEW DAYS LATER, I SAW THE 21ST CENTURY ALTERNATIVE TO DT'S GRAND EDIFICE. FREE HAS TAKEN NEARLY THREE MILLION CUSTOMERS FROM FRANCE TELECOM BY OFFERING UNLIMITED DATA, FREE PHONE CALLS TO 30 COUNTRIES, 80 CHANNELS OF TV, WIRELESS HOTSPOTS AND MORE FOR 30 EURO, PROFITABLY. FREE'S SUCCESS IS BUILT ON A REMARKABLY SIMPLE NETWORK THAT SIMPLY ADDS STANDARD EQUIPMENT WHERE THEY HAVE CONGESTION. XAVIER NIEL HAS 2 CISCO CRS-1'S AT THE CENTER, WHICH ARE DOING EXCEPTIONALLY WELL. THEY HANDLE EVERYTHING HE THROWS AT THEM AND HAVE PLENTY OF RESERVE CAPACITY. THIS "STUPID NETWORK" WORKS WELL BECAUSE ADDING BANDWIDTH IS CHEAP WHILE MANAGEMENT IS EXPENSIVE. AN ALMOST UNBELIEVABLY SMALL TEAM OF ENGINEERS IN PARIS MANAGE THE ENTIRE NETWORK AND EVEN DESIGN THE DSLAMS AND THE FREEBOX. THE NETWORK DOES ONE THING WELL: DELIVER PACKETS RELIABLY. THAT ALLOWS VOICE AND VIDEO TO BE SIMPLE APPLICATIONS, EASY TO ADD INEXPENSIVELY. SCHMITZ WAS SPEAKING IN ANGER AND ALMOST CERTAINLY MADE A MISTAKE. HE CLAIMS HE NEEDS TOTAL CONTROL TO DEAL WITH CONGESTION, MAKING SURE THE PRIORITY APPLICATIONS GET THROUGH. I HAD JUST POINTED OUT TO HIM THAT I HAVE NO PROBLEMS WATCHING A SUPERB QUALITY 1.9 MEGABIT VIDEO OVER THE INTERNET ON EITHER VERIZON OR TIME W ARNER CABLE, AND HE'S ADVERTISING THREE TO TEN TIMES THEIR SPEED. 展HAT WAS WRONG WITH HIS NEW NETWORK? I ASKED. 展 CAN'T HY HE SOLVE THE CONGESTION INSTEAD BY ADDING THE NECESSARY ROUTERS AT LESS THAN HALF THE COST?” HE DIDN'T EXPECT THAT QUESTION, BUT IT WAS A FAIR ONE. HIS OWN PEOPLE HAD TOLD ME ABOUT CAPACITY ISSUES LIMITING SOME SERVICES. SCHMITZ RESPONDED HE HAD DESIGNED THE SYSTEM, AND IT DOESN'T HAVE CAPACITY PROBLEMS. IF HE DOESN'T HAVE CAPACITY PROBLEMS, HIS STATEMENT THAT INDEPENDENT VIDEO WAS IMPRACTICAL TO CARRY IS NOT ACCURATE. IN PRACTICE, I'D BET DT ACTUALLY PROVISIONED ENOUGH CAPACITY THAT A DVD QUALITY VIDEO STREAM DOES JUST FINE. IF SO, THERE WILL BE NO REASON FOR THE CONTENT PROVIDERS TO STOP AT HIS TOLLBOOTH. W ALT DISNEY AND MOVE NETWORKS ARE PROVING QUALITY VIDEO CAN GO "OVER THE TOP" WITH A FEW SECONDS OF BUFFER AND SOME GOOD SOFTWARE. IT'S ONLY HIS OWN TV SYSTEM, WITH MICROSOFT SOFTWARE, THAT HAS SUCH EXTREME PROBLEMS. SCHMITZ IS A WORLD CLASS ENGINEER AND I'M JUST A REPORTER, BUT HE'S HAVING PROBLEMS THINKING DIFFERENTLY AFTER DECADES OF SUCCESS THE OLD WAY. CISCO AND ALCATEL ARE PRESSING HARD FOR THE CARRIERS TO BUY FANCY GEAR. FREE ARE EXISTENCE PROOFS A BETTER WAY IS POSSIBLE. ONE OF THE OTHER CTO PANEL MEMBERS SPOKE WITH ME LATER AND SAID I WAS ASKING THE RIGHT QUESTION.