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Internet Access Stimulus

by On Rad's Radar? in December 3rd, 2008   
Topics: , Broadband, CLearwire, Internet, according, bandwidth, digital divide, economy, stimulus     

According to the WSJ, ” The federal government’s economic stimulus package will include investment in broadband Internet infrastructure and funds to upgrade and repair the national power grid alongside more traditional funding for road and bridge repair, a senior aide to House Speaker Nancy Pelosi said Tuesday.”

It’s much needed, since Clearwire/XOHM has decided to slow down (cough!*) its deployment schedule because the $3.2B in cash from Google, Intel, and MSO’s, just is not enough to roll out their whole network. Clearwire needs $2B more.

And apparently, VZ only wants to over-build its affluent DSL areas with FiOS. It ignores or sells off rural routes.

TWC and AT&T are moving to tiered broadband pricing plans. Heck, TWC is even raising its rates on stand-alone Internet. TWC is also vulnerable to customer switching. In recent bundles from former BellSouth, I did not see a DSL price under $30. What happened to Naked DSL at $20 and DSL Lite at $10 (merger conditions)?

The next ones to ask for a bail-out will be the wholesale Internet backbone companies like Level3, Cogent, Global Crossing, Qwest and Savvis, according to this report on Circle ID.

According to the CWA (telecom union), it’s all about new jobs.

Mr. Cohen said 100,000 jobs could be created by immediately investing in more high-speed Internet networks across the country. “Jobs is the best single stimulus,” he said.  The demand for services created by broadband Internet access could create another two million jobs, Mr. Cohen argued.

[Editorial note: * As if Clearwire had an aggressive roll out strategy. $3.2B should be enough IF you actual bring in profitable revenue per tower. I know, not a usual business plan for public internet companies.]

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Bittorrent Kills VoIP - Game Over Man!

by VoIP & Gadgets Blog in December 1st, 2008   
Topics: Bittorrent, Game over man, Internet, SIP, TCP, TMCnet, UDP, VoIP, Vonage, article, bandwidth, com, fring, skype, traffic, uTorrent, users, video conferencing     

utorrent-gui.jpg An interesting article at the Register claims that a recent uTorrent decision to use UDP for P2P file transfers (instead of TCP) to get around ISP “traffic management” restrictions will cause a meltdown of the Internet. Poppycock you say?

It’s worth pointing out that traditionally P2P sharing apps such as Bittorrent,  use TCP not UDP. So why would UDP cause VoIP apps to fail? Well for one huge reason, TCP allows for congestion control.

First, the article explains:

Gamers, VoIP and video conference users beware. The leading BitTorrent software authors have declared war on you - and any users wanting to wring high performance out of their networks… Upset about Bell Canada’s system for allocating bandwidth fairly among internet users, the developers of the uTorrent P2P application have decided to make the UDP protocol the default transport protocol for file transfers.

The article then adds:

By most estimates, P2P accounts for close to half of internet traffic today. When this traffic is immune to congestion control [i.e. TCP], the remaining half will stumble along at roughly a quarter of the bandwidth it has available today: half the raw bandwidth, used with half efficiency, by 95% of internet users. Oops.

Yikes! Say goodbye to VoIP. No more Skype. No more fring, Gizmo5, Packet8, Vonage, Bandwidth.com SIP trunks, and all the rest of my beloved VoIP applications and services. May you rest in peace my good friends. [sniff] Now I’ll have to change my blog to the “Gadgets Blog”.

Game over man, game over!

Click above to hear this famous audio clip from Alien.

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Internet Will be Full by 2012

by On Rad's Radar? in November 24th, 2008   
Topics: Internet, LinkedIn, Politics, bandwidth, capacity, going, net neutrality, people, traffic     

“Nemertes Research continued to throw cold water on the future of the Internet last week, releasing a study projecting that demand for bandwidth on the Web would exceed its capacity by 2012.” [PCWorld.com]

I just don’t see how that can be. With 40G pipes starting to emerge. With Content Delivery Networks (CDN’s) popping up every where.  The CDN’s make most traffic local.  The CDN’s are getting closer to the edge. Does that report mean that the backhaul traffic will overflow? Or the CDN network will exceed capacity?

Nemertes analyst Mike Jude says, “More and more applications are coming online that will drive expectations for service quality even higher,” he said. “I’m not saying that the Internet is going to crash in 2011, but that people’s expectations are going to be throttled. People will stop going to the Internet for those services.” [PCWorld.com]

Jude goes on to say that people expect more reliability and real-time traffic from the Internet (which it was not designed for). And to get thta ISP’s will have tiers of packages to deliver it. That’s where the Net neutrality debate unhinges.

My skepticism tells me that it is just the Duopoly wanting to make as large a buck as possible from consumers to continue to get their 40% margins, despite the fact that their actions stall innovation and the economy. And the capacity can be made available, it is just more expedient to create a supply issue.

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Is the $100 Triple Play viable?

by On Rad's Radar? in November 21st, 2008   
Topics: ARPU, Broadband, Internet, LinkedIn, Marketing, Triple Play, Video, Wi-Fi, Wireless, bandwidth, cableco, duopoly, economy, lower, mso, network, profitable, services, telco, telecommunications, triple     

So on Linkedin, Neal Lachman, asked if the $100 Triple Play was Viable in today’s economic molasses. Neal writes:

Bundling voice, video, data services for a higher ARPU was an obvious, great move when broadband services and advanced digital services were first introducded……  However, the market is moving more towards a lower ARPU for the triple play services. This is especially going to play a big role in future operations. The time of high ARPUs is going, and soon it will be history.

I believe operators have to lower their ARPU estimates from 2010 onward, simply because the customer won’t be willing to pay as much. Today operators generate $100+ revenue per month on their triple play services. In 2010 and later, they should be happy if they can reach ARPU of $50. One example is the FTTH service in Holland, where people do not even want to pay more than €50 for their triple play bundle.

My thoughts on it are here:

Telcos like AT&T and Verizon are actually losing money on triple-play. Think about the fact that they were getting $35 for a phone line and $35 for DSL (averages for consumers 2 years ago). Now they have to upgrade the network to offer TV, which is the least profitable service. And do that for $30.

Install and maintain the network that they will be capping. Install home equipment like ONT and STB. To give it away for $100. Now usually the telcos will add taxes and fees on that to increase their profit.  But its the MSO’s who are making out. They went from the least profitable service (TV) to the more profitable services of phone and Internet.

With all of the CAPEX for DOCSIS upgrades as well as FTTx and WiMax build-outs, these companies won’t be able to lower ARPU for triple play.

The cost of TV content is increasing. Must carry TV channels are now asking for a bite of the pie. You have seen the battle that NFL Network and the other sports networks are having to get carried by the systems — and to be carried in the most popular packages.

I can see how the MSO’s and telcos would have to lower ARPU averages in the face of the economic tsunami we are experiencing, but they won’t be offering triple play for $50.

Remember that for the Bells, RGU’s include security, cellular, and now tech support. Cablevision rolled out a $350M wi-fi network in NY. The duopoly knows that to keep churn down, they have to get sticky with ubiquitous Internet Access and to get close to a quad-play. Surprisingly, while Verizon has the quad play in my town (Tampa) - FiOS TV, Internet, phone and Cell - that is not the package that they advertise to my house Every Single Day.

 The cost of customer acquisition, retention, advertising, tech support, customer care, bad debt, security, upgrades, and maintenance are too high for the triple play ARPU to drop below $99.

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PIKA WARP Appliance Adds FreePBX Support

by VoIP & Gadgets Blog in November 18th, 2008   
Topics: Asterisk, Bandwidth.com, David Clarke, PIKA WARP Appliance, Philippe Lindheimer, SIP, TMCnet, Terry Atwood, Unified Communications, VoIP, appliance, bandwidth, freepbx, freepbx support     

Thumbnail image for pika-warp-appliance-1.jpg
When I met with PIKA Technologies  at ITEXPO they told me support for FreePBX was coming. Well today, PIKA Technologies announced that PIKA WARP the Appliance is now compatible with the Asterisk-based FreePBX GUI (Graphical User Interface) application. I reviewed the PIKA Appliance recently and was pretty impressed with it. Having FreePBX support is a huge milestone for the PIKA Appliance. FreePBX is a popular user-friendly web application  that makes it easy to setup and configure Asterisk.
freepbx-logo.png
According to PIKA, “While customers often develop their own GUIs, many have told PIKA that if WARP were compatible with industry-standard GUIs like FreePBX, they would be much more inclined to adopt the portfolio. With today’s announcement, PIKA has once again demonstrated its responsiveness to the needs of its user base.”

“We are very pleased to have supported the effort to adopt the FreePBX application to run in the PIKA Warp environment,” said Terry Atwood, vice president of sales, marketing and customer care at PIKA Technologies. “Used in many Asterisk implementations around the world, including Trixbox, FreePBX has proven its value, time and again. When the FreePBX team expressed their willingness to work with us to port to the Warp Appliance, we jumped on the opportunity.”

“FreePBX has become the de facto standard for enterprise grade PBX functionality delivered to the SMB business and includes a very rich set of functionality and customization potential,” said Philippe Lindheimer, open source community director of Bandwidth.com and leader of the FreePBX project. “But no GUI is complete without a wide range of hardware options to complete the package. We are delighted that PIKA can now include FreePBX in the PIKA WARP and bring our two eco-systems together.”

Today’s announcement from PIKA follows news of a new partnership between FreePBX and Bandwidth.com, a complete business communications provider offering advanced VoIP, Internet services and managed network services to small and medium businesses. Bandwidth.com will devote significant resources to expand the scope of FreePBX while protecting its charter to remain open source and free.

“The partnership with Bandwidth.com is great news as it gives FreePBX the support it needs to grow while ensuring it remains a free GUI for the entire open source eco-system,” said David Clarke, business development manager at PIKA and director of the PIKA Warp Community. “I know the choice of Bandwidth.com was a decision that Philippe made only after months of consideration and sound input from the key developers and contributors to the FreePBX project.”

Out of the box, FreePBX provides a long list of features including many typically found only in an enterprise-grade PBX, some examples are:

• Unlimited number of voicemail boxes
• “Follow me” functionality
• Ring groups and call queues
• Unlimited number of conference bridges
• Paging and intercom functionality
• and much more

The PIKA WARP Appliance product portfolio is ideal for deploying small- to medium-sized IP-PBX systems, IVR self-service systems, predictive dialling systems, fax servers and many other features typical of a traditional, purpose-built business telephone system that are often lacking in a computerized system. Compatible with a variety of open-source development platforms, including Asterisk and Linux, the Appliance offers a cost-effective alternative to traditional off-the-shelf computers and plug-in-card network connectivity in a smaller footprint.

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Bandwidth Caps

by On Rad's Radar? in November 17th, 2008   
Topics: , Broadband, FTC, Internet, Web 2.0, bandwidth, cableco, caps, companies, customer, duopoly, preserving, telco, telecommunications     

Bandwidth caps have more to do with preserving TV revenues than network management business. Yes, there are issues of last mile and node congestion for both telco and cableco networks. It is also a function of the band-aid approach that these companies take. instead of one huge upgrade (like say Verizon with FiOS), there have been baby step fixes.

It’s also about preserving revenue. If you switch from watching Broadcast TV to just downloading Netflix and Amazon, how do the TV Providers make money from VOD (video-on-demand)? If you are watching shows via Joost and Hulu (and the coming network to replace Showtime), how does the big upgrade get paid for? The duopoly is preserving its content revenue - plain and simple.

Personally, the FTC should be investigating false advertising by the carriers - both on cellular data and broadband. In many cases, it is sold as Unlimited, but isn’t. That’s false advertising.

This will present an interesting challenge as people will switch. The duopoly is doing everything it can to compete on price and not value. Neither company is trying to court customer loyalty.

The ripple effect on this may be to stymie Internet business growth. Software and Application companies (SAAS, ASP), Web 2.0, and entertainment companies will find it hard to maintain customers and grow revenyue under a bandwidth cap.

I wonder how AT&T’s partner, Apple, who makes the Apple TV and owns iTunes, feels about a cap, which will eventually flatten its revenues.

Not for nothing but these companies can’t bill correctly anyway. There are certain to be many folks billed for overages where there are none. An even bigger erosion of customer satisfaction is coming.I guess we forget about Customer Acquisition costs and the lifetime value of a customer.

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The IP Resale Tumble

by On Rad's Radar? in November 17th, 2008   
Topics: Internet, alphared, bandwidth, reseller     

As prices of IP bandwidth sink to new lows, resellers - like Bandcon, AlphaRed, and the rest - are facing pressure. In fact, AlphaRed has apparently closed its doors, which could create problems for other resellers that it buys from and sells to, like BandCon who is the CDN for AlphaRed.  For every reseller that closes, a new one opens up.

(Please note: the other reason that AlphaRed may have closed was that the Washington Attorney General is suing AlphaRed CEO for scareware.)

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Fiber Lit Buildings

by On Rad's Radar? in November 17th, 2008   
Topics: Level3, bandwidth, buildings, fiber, quarter, telco, twtelecom, wonder     

Rob Powell has an update to his fiber list on Telecom Ramblings blog. What is interesting about the chart is that TWT and L3 have about the same number of route miles - 26,000 - but TWT has way more buildings lit that Level3. TWT has 10,700 buildings lit and L3 has about 7550. TWT lights about 250 per quarter. That’s an impressive number. I wonder how TWT does that because 250 buildings times $7000 minimum build comes to $1.75M per quarter of CAPEX.

I also wonder how much overlap there is in lit buildings. For instance, much of XO’s fiber is an IRU on L3, so likely they have a lot of overlap on lit buildings. Cogent is mainly in telecom hotels so that is a redundant lit building. (It’s rare that just Cogent is in a building).

I also wonder how TWT can sell 250 new buildings per quarter, since their channel is not as active as Level3’s. Maybe they have a highly motivated sales force that is told where to sell (as close to the fiber route as possible).

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Bandwidth.com invests in FreePBX

by VoIP & Gadgets Blog in November 14th, 2008   
Topics: Asterisk, Philippe Lindheimer, SIP, TMCnet, Unified Communications, VoIP, bandwidth, com, freepbx, philippe, phillipe     

freepbx-logo.pngbandwidth-logo.gifBandwidth.com has just made an investment in FreePBX, the popular front-end interface to Asterisk-based distros. I discussed this news with Philippe Lindheimer just a couple hours ago. One of the questions I asked was if Bandwidth.com would get “preferred treatment” within the FreePBX interface, since Bandwidth.com offers SIP trunking. Obviously, if FreePBX gives Bandwidth.com a prominent position in the GUI or they make it “easier” to configure FreePBX (i.e. plug-n-play) that could be a huge boon to Bandwidth.com Philippe said that that isn’t part of the investment announcement being made today, however, that is something they are looking at.

As for the purpose of the investment, Philippe said it was mostly due to Bandwidth.com’s desire to grow the market and help build the FreePBX community. The idea is that the more IP-PBXs out there, the more SIP trunks, and hence more revenue for Bandwidth.com. I have some further thoughts on this, but I’m pretty busy today and wanted to share the news.

Philippe Lindheimer said, “Part of assuring the success of FreePBX is to make sure that we continue to have strong leadership, community participation and a thriving eco-system of users and partners. I would like to announce a new partnership that will help the project tremendously. I have joined forces with Bandwidth.com as their Open Source Community Director, where we will be devoting significant resources and effort to expand the scope of FreePBX while protecting its charter to make sure it remains open and strong.”

One significant piece of news is that Bandwidth.com helped protect the FreePBX’s project several months ago when the FreePBX trademark (which FreePBX.org nor Phillipe never owned) was “being shopped around to parties that did not have this project’s best interest in mind” according to Phillipe. Thus, Bandwidth.com preemptively purchased the trademark with Phillipe’s blessing in order to assure FreePBX was not jeopardized.

You can read Phillipe’s blog post about this here which has more details.

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Cisco ASR 9000 High-end Router Launches

by VoIP & Gadgets Blog in November 11th, 2008   
Topics: ASR 9000, Cisco, Cisco Aggregation Services Router, Internet, TMCnet, Triple Play, Unified Communications, Wireless, Zettabyte, bandwidth, router, second, service, video conferencing     

cisco-asr-9000.jpgCisco Systems unveiled a supercharged router called the ASR 9000, which is capable of moving 6.4 terabytes per second of traffic. The router is aimed at service providers with next-generation networks which plan to run bandwidth heavy services such as video, IPTV, mobile broadband, and more. With the explosion of Youtube videos, and other bandwidth-hungry apps, service providers are looking to stay ahead of the bandwidth demand curve. The ASR 9000 hopes to address that need with the ability to support the future “Zettabyte era”. According to CRN, “The Cisco Aggregation Services Router 9000 Series (ASR 9000) is designed to be the carrier Ethernet foundation for the “Zettabyte era,” said Doug Webster, Cisco’s senior director of service provider marketing. According to Webster, Cisco expects IP traffic to reach half of a Zettabyte by 2012.”

Cisco’s Pankaj Patel, senior vice president and general manager of the Cisco Service Provider Technology Group called and left me a message stating that their new hardware took four years and a whopping $200 million to develop.

The ASR 9000 router is capable of transmitting data at a rate of 6.4 trillion bits per second, and it has 10 times the bandwidth capacity of Cisco’s ASR 1000 router.

Pankaj Patel also told the San Jones Mercury Times, “We truly believe consumer IP traffic will more than quadruple by 2012,” He said the new router is capable of delivering 200 movies per second or 250,000 MP3s per second.

Price: It’s expected to go for around $80,000.

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It’s Going to be Limiting

by On Rad's Radar? in November 5th, 2008   
Topics: Broadband, Congress, Internet, Wireless, bandwidth, digital divide, duopoly, fcc     

AT&T is testing broadband caps in Nevada. First, cable now Ma Bell. In both cases, the reason may have to do preserving TV revenue than anything. There is concern. It even popped up as a LinkedIn question.

DSL Prime is outraged over the cap and has a different view of what it means. (See here)

This is just further proof that duopoly competition doesn’t work. The TIA is begging Congress for a Broadband Stimulus bill that they say will generate $1B in economic growth. Meanwhile, WISPA lobbied for a license-lite proposal for the “white spaces” spectrum, which was granted. WISPA members (mainly wireless ISPs) wouldn’t mind some largesse from the government either to build out more towers and wireless links to actually bring broadband to places without it (you know, crossing the Digital Divide) — or to offer a third pipe. (The Clearwire-Sprint-Nextel merger was approved today as well, but that company is funded to the tune of billions. Give th

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Frontier Adds a Cap

by On Rad's Radar? in November 3rd, 2008   
Topics: , Internet, bandwidth, caps, telco     

Frontier Communications has added a download cap to its Internet service. It will charge folks for heavy usage.

The company caused confusion and some dismay among customers earlier this year, when it said it would charge for Internet use above 5 gigabytes per month, starting next year. [tbo.com]

What’s most interesting is the comments. People are not happy about caps.

Caps are not new. We had time limits in the dial up days. (When you can only access at 33K, time is the limiting factor.) Satellite has always had bandwidth caps on its Internet service. It will become more pervasive as revenues for ISP’s decline in this economy.

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Cogent and Sprint De-Peer

by On Rad's Radar? in October 31st, 2008   
Topics: Cogent, Internet, Sprint, bandwidth, peering, telecommunications     

According to Alex Muse, DSLReports and GigaOm, Cogent and Sprint de-peered this morning in a tiff of some kind.  Cogent claimed this year that it was settlement free - coupled with its roots in the PSInet backbone network made it a Tier 1 provider. Cogent has had issues with other backbones including Level3 and Telia.

Cogent is incensed at the move,saying it violates a contractual obligation to exchange internet traffic on a settlement-free peering basis, and is taking legal action. It wants Sprint-Nextel to re-establish the link on the same basis.

So Cogent decided to make an offer:

Cogent is taking the moral high ground, and offering every Sprint-Nextel wireline customer that can’t connect to Cogent’s customers a free 100MBps internet connection until Sprint reconnects, though it says it can’t do the same for wireless users. [IT examiner]

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Bandwidth isn’t free

by On Rad's Radar? in September 28th, 2008   
Topics: , Broadband, Internet, bandwidth, cableco, consumers, net neutrality, network, network management, problem, telco     

“The leaders of three of Australia’s largest ISP’s have declared the Net neutrality debate as solely a U.S. problem–and further, that the nation that pioneered the Internet might want to study the Australian market for clues as to how to solve the dilemma….. “The (Net neutrality) problem isn’t about running out of capacity. It’s a business model that’s about to explode due to stress.” [CNET]

Basically they are saying that someone has to pay for the plumbing, which is exactly what Verizon’s Ivan and AT&T’s CEO were saying last year (but a lot less diplomatically). As prices start to decline for bundles, DSL, and wholesale IP (down to under $10 per MB), the business models are having a problem catching up. Consumers are using the Internet more, especially for entertainment - whether that means video, music, streaming, or what have you. All of that is taxing the US ISP broadband network. Cablecos want to do preferential network management and the FCC says no. Now there are caps.

Here’s where I differ. We in the US pay more than Korea, Japan or France for broadband - and get less of it. (2007 data here or directly from OECD). How come these telcos don’t have network issues? 

Here’s the problem with caps: No one understands what they mean — And the ISP’s are still advertising it as Unlimited! You can’t say Unlimited and then have a cap. That’s dishonest.  

People are encouraged to use the web. It’s the communications medium - email, VoIP, IM/chat. Companies would prefer to support you via the Internet - web, IM/chat, email or forums. The average page size is over 1MB though. Add interlaced videos, pop-ups, flash intros, animated banners, and the like makes for heavy use just with surfing the web. People will switch back to phone use for support, which will tax the corporations to hire more bodies. It will also tax the cellular network as more folks go all cellular.

How about Apple TV, TiVo, and iTunes automatically downloading podcasts and shows in the background? Or Microsoft updates? Those are 300MB a pop at times. If you have more than one PC, that’s a GB per update.

In these tough economic times, families getting hit with overage charges will have problems - as will the ISP’s with bad debt collection.

I don’t think consumers want something for free. I think consumers want what we pay for - and what is advertised to us.

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