In late 2011, Diffraction Analysis undertook a study of 13 FTTH operators for the FTTH Council Europe to determine optimal approaches to service strategies. The results were presented at the FTTH Council Europe Conference in Munich in February. Next week, I will be leading a webinar organised by the Council to present the results to a wider audience. Here are the details:

Webinar Title: Successful Service Strategies for FTTH Operators

Content: The biggest challenge for service providers contemplating FTTH deployment is choosing between an acquisition strategy (to maximise customer adoption) and a service strategy (to maximise value-added revenues).

Towards the end of 2011, Diffraction Analysis undertook an extensive analysis of 13 FTTH service providers across Europe to understand and articulate how service providers are addressing this issue and how the strategic orientations translate in terms of service portfolios and service innovation. In this webinar the results of this study will be presented.

Presenter: Benoît Felten. Benoît Felten is the CEO of Diffraction Analysis. With 15 years experience in telecoms, including 10 as a consultant and analyst, he has focused in the last 5 years on FTTH and the opportunities it represents to reshape the telecoms industry. He is also an active blogger on http://www.fiberevolution.com and presents on twitter as @fiberguy.

Details: Date: 15 May 2012 / Time: 11:00-12:00 CEST

To join the webinar you just need a PC with an Internet connection.

Please register using this link.

By Teresa Mastrangelo.

The European Commission recently provided an update on the implementation of the national broadband plans in the EU-27 countries, along with Croatia, Norway and Switzerland.

For reference, the Digital Agenda for Europe (DAE) required all Member States to devise and make operational by 2012, national broadband plans which would enable the EU to meet the broadband targets for Europe by 2020.  Those targets are as follows:

• Basic broadband (512kbps to 4Mbps) to all by 2013
• Fast broadband by 2020: broadband coverage at 30 Mbps or more for 100% of EU citizens.
• Ultra-fast broadband by 2020: 50% of European households should have subscriptions above 100Mbps.

To date 22 Member States have national broadband plans, with the remainder either in review or in the drafting process.

Current Status

Table 1 provides a summary of the current status of EU National Broadband Plan Targets

Table 1:  EU NBP Targets

• Basic Broadband:As shown, the majority of Member States will support 100% basic broadband by 2013, with the exceptions of Bulgaria and Romania, which have set 2015 as their target date.

• Next-Generation Access (NGA):To date, 21 Member States have defined quantitative coverage for NGA with downstream speeds ranging from 25Mbps (UK) to 1Gbps (Luxembourg), while 8 have subscribed to full DAE targets.  Little attention was directed towards upstream speeds with the exception of Finland (100Mbps) and Luxembourg (500Mbps).

According to the report, the most quoted reason for lack of NGA commitments was “there are not many applications which would require NGA bandwidths in the foreseeable future”. These same operators also point to low take-rates in areas where ultra-fast connections are already available – such as France where FTTH penetration is at 13.5% and KPN which has penetration of 12.5%.

NGA does not equal FTTH

It is important to note that the EU continues to take a technology neutral approach towards NGA – its does not specify a technology, rather leaving that up to the individual operator to determine the best possible solution based on various factors.

As such, there are multiple technologies that can support the goals of the DAE as shown below and many operators will likely take a multi-step approach towards full FTTH deployment, including interim steps of upgrading to FTTC/N+ VDSL2 with the possibility of implementing vectoring capabilities to increase bandwidth.

Facilitating Investment

Per the report, the EU states that facilitating investment to close the gap between the amount that operators plan to invest in network infrastructure and the investment required for achieving DAE targets is paramount.  As such, many National Regulators are in the process of doing studies that look at the ROI of NGA investments – particularly FTTH.

Of course, the key to all of this investment is take rates - or in the EU’s terminology “demand stimulation”.

Although many countries have been active in implementing programs to increase the availability of broadband services; few have engaged in activities to increase demand (a key failure of the U.S. National Broadband plan) – and this is especially true of NGA networks.

This brings about a Catch-22 scenario.  Operators don’t want to deploy these networks because consumer demand is low – since there are few applications and services that require this type of bandwidth.  Unfortunately, by the time consumers “need” these types of networks – it will be too late or the investment will take even longer to pay itself back.

EU Conclusion

Although the Commission appeared satisfied (I will not go so far as to say happy or thrilled) with the current status of NBPs, there is concern about the sustainability of some of the broadband plans due to the lack of measures aimed at demand.  It is believed that if more plans focused on the demand side – the business case for the investment side would prove to be more viable.

The Commission stated it will perform another analysis of this type by the end of 2013, with a special emphasis on NGA.

The full document may be accessed here.

F2C: Freedom to Connect will be held on May 21 and 22, 2012 at AFI Silver Theatre in Washington DC.

Benoît will be speaking there as a keynote on the first morning, talking about the movement towards Gigabit connectivity and  highlighting some of the research from The Gigabit Race is On!

The line-up of the event is nothing short of astounding: Vint Cerf (who needs no introduction), Cory Doctorow (as great an author as a tech and policy journalist), Blair Levin (of National Broadband Plan and GigU fame), Bill Schrier (CTO of Seattle and digital city luminary), Sascha Meinrath (Internet in a Suitcase and much more), Doc Searls (Cluetrain Manifesto, The Intention Economy), Larry Lessig (Founder for Internet and Society), and these are just a few of the internet luminaries that will be there.

From our point of view, this is the event to attend in the US if you care about the future of the internet. You will therefore forgive us for a bit of endorsement: Registration is open. Admission is $395 until May 7, when it rises to $595.

Finally, here’s the F2C Manifesto:

F2C: Freedom to Connect is a conference devoted to preserving and celebrating the essential properties of the Internet. The Internet is a success today because it is stupid, abundant and simple. In other words, its neutrality, its openness to rapidly developing technologies and its layered architecture are the reasons it has succeeded where others (e.g., ISDN, Interactive TV) failed.

The Internet’s issues are under-represented in Washington DC policy circles. F2C: Freedom to Connect is designed to advocate for innovation, for creativity, for expression, for little-d democracy. The Freedom to Connect is about an Internet that supports human freedoms and personal security. These values, held by many of us whose consciousness has been shaped by the Internet, are not common on K Street or Capitol Hill or at the FCC.

F2C: Freedom to Connect is about having access to the Internet as infrastructure. Infratructures belong to — and enrich — the whole society in which they exist. They gain value — in a wide variety of ways, some of which are difficult to anticipate — when more members of society have access to them. F2C: Freedom to Connect especially honors those who build communications infrastructure for the Internet in their own communities, often overcoming resistance from incumbent cable and telephone companies to do so.

The phrase Freedom to Connect is now official US foreign policy, thanks to Secretary of State Clinton’sRemarks on Internet Freedom in 2010. She said that Freedom to Connect is, “the idea that governments should not prevent people from connecting to the internet, to websites, or to each other. The freedom to connect is like the freedom of assembly, only in cyberspace.” Her speech presaged the Internet-fueled assemblies from Alexandria, Egypt to Zuccotti Park.

The debate around next-generation access in general and Fiber to the Home in particular is dominated by one single overbearing concept: deploying a new fiber infrastructure is prohibitively expensive. We all have this cost figure of around $1000 per home connected as a baseline, and it has become something close to a fact. In this post I won’t address the fact that most of the players actually deploying the infrastructure discover (often to their surprise) that they rarely get even close to that number since Herman is working on a report on that very topic. Let’s assume for a minute that $1000 per home connected is a real cost that applies to say 75% of the population in the developed world.

What I want to address here is the notion itself that FTTH is “expensive”. In the world we live in, there is no such thing as an absolute cost, it’s all relative. Choosing where to spend one’s money, whether you are an individual or an organization is always the result of arbitration. And once you start examining the relative price of FTTH, a number of interesting things emerge. There are essentially three areas of comparison that I find interesting: at state level, at real estate level and at the consumer’s individual level.

At state level, the “relative” view of the investment lies around other infrastructure arbitrations, especially ones involving public subsidies or participation in one way or another. A local government that wishes to accelerate the deployment of quality broadband in its territory might be faced with arbitrating between giving a nudge to next-generation access or giving it to a new road, bridge or railway line. It’s actually fairly easy to compare because most of these large infrastructure projects are public. Here’s an example from a few months ago that really got me thinking. The French high-speed train that connects Paris to Bordeaux will be upgraded in the next few years between Tours and Bordeaux (in French). The line between these two cities is not as modern as it could be and the trains are therefore constrained on speed. Instead of the three hours it currently takes from Paris to Bordeaux, the upgrade of the line could allow trains to get to Bordeaux in 2 hours and 20 minutes by 2017. The cost of the project is 7.8bn €, 44% of which will be subsidized by national or local governments.

Considering that the fibering up of the whole of France (including all the rural areas) has been valued at around 30bn €, the comparison basis is this: French public entities can build a viable project to reduce the travel time between two major cities by 40mn for about a quarter of what it would take to get next-generation broadband to the whole country. On this basis it seems hard to believe that a viable project could not be built for national FTTH. The fact is that deploying next-generation infrastructure, in the grand scheme of things, is much cheaper than roads, bridges, railways and airports. If we had none of these, the arbitration of course should be in favor of them. When it comes to upgrading them or building more, the arbitration becomes viable and NGA should look comparatively better. The main reason it doesn’t, in my opinion, is a lack of understanding of its importance by ageing politicians and established routes to financing for all of the legacy infrastructure projects that the NGA ecosystem still lacks.

At real estate level, the outlook is different: we’re talking private money and well-oiled ecosystems where decision makers focus on what’s most viable for them. It has been established in a number of markets (Sweden and North America among them) that fibering up a property has positive impacts on its lease price, sale price and time to find a tenant. So the cost of fibering up a property should in turn be put in relation to (say) the price of rent. In NYC, an average one bedroom flat rents for $2500 per month, and the prices only go up with size (obviously). That means that if fibering up a flat helped eliminate a few days of lag between tenants, the $1000 investment for FTTH (assuming it was that expensive in NYC, which is doubtful) would be paid for. Of course, NYC is one of the most expensive cities in the world, but it’s also a place where FTTH deployment is happening very slowly and without great involvement from the real-estate owners. So again, why isn’t it happening? Simply because of misaligned understanding. Real-estate people by and large do not understand the benefits for them because it hasn’t been articulated with their goals in mind.

Finally, even at the individual consumer’s level, the cost is relative: the new ipad has sold millions of copies in one week-end, at a price point of roughly $750 per unit. Interestingly, the new retina display on this device is such that the amount of bandwidth needed to stream content to it will be multiplied by 4 compared to traditional HD. There’s now an increasing number of reports that show that tablets in general (and ipads in particular) exist in multiples in more and more households. At what point does the arbitration become “I want decent broadband to use these devices optimally”?

These comparisons are interesting to me because they demonstrate that subscribing to the meme that FTTH is “expensive” is not very productive. In many markets I see service providers hesitating as a consequence of that with little to no thought about how it is not only possible but comparatively cheap to build investment models that make sense for this new infrastructure by reaching accross the ecosystems to those who can benefit directly from it.

FTTH is (relatively) cheap when you look at it this way.

Our new report explores the implication of online video delivery on legacy network management practices and examines potential solutions to the conundrum that the coexistence of online video-delivery and low latency requirements poses. Cloud services increasingly rely on low-latency, but video traffic threatens that, at least with current statistical flow management approaches. The report, entitled Will Video Kill the Cloud Star? is written by Herman Wagter and is a must read if:

• You are an access provider facing recurring congestion issues, especially in backhaul,
• You are a regulator or policy maker looking to understand how exactly online video is changing the scene from a network perspective.

The new edition of our annual ‘state of the industry’ report is out! Last year’s edition was sent to hundreds of readers worldwide, and we’re expecting even more interest this time. It should be noted that in a few weeks time there will be a paid version of the report released which will include quantitative analysis of the market and the important implications of the geographic trends in sales and adoption for vendors and service providers alike.

The free version though, written by Costas Troulos is jam-packed with information already. It examines the developments in FTTP on a country by country basis and highlights the important experiences, the rousing successes and the unfulfilled promises. On the basis of that information, the paper then analyses the deployment models adopted by different players entering the FTTP market and draws important conclusions for various entities involved in FTTP deployment and adoption.

If you have a valid account on Diffraction Analysis, you can download the report by logging on to the website. If you don’t, you can either open an account (we will get them validated as fast as we can) and download the report once the account is validated or you can email contact@diffractionanalysis.com with World of Fiber 2012 as a subject line and your first, last name and company name in the body. We will email the PDF to you.

The New York Times this week-end published an editorial written by Susan Crawford entitled The New Digital Divide. Susan has long been advocating that there is something rotten in the kingdom of US Broadband, and this editorial articulates wonderfully what the issue is and why it’s happening.

The reason we are mentioning this here is not only because it’s an excellent read, but also because some of our numbers are quoted in there on very high-speed broadband pricing amongst other things.

Our latest report Do data caps target the wrong users? A Bandwidth Usage Reality Check is generating quite a bit of attention. Here’s a list of publications covering it:

• DSL Prime puts the results in perspective with some of the reasoning around data caps in the US,
• David Weinberger summarizes the issues on his blog, and was picked up by Boing Boing,
• Bandaancha.eu has the story in Spanish,
• Techcrunch picked it up, as did their Japanese edition,
• Ars Technica’s Policy Blog covered it,
• Wired Epicenter wrote it up,
• Boy Genius Report (BGR) covered it,
• The Sciencelogic Blog has a write up,
• The Broadband Expert Blog covered it,
• My Broadband in South Africa wrote about it,
• AutomatiseringGids in the Netherlands has a story about it (in Dutch)
• Christian Sandvig’s Multicast blog quotes it in a detailed analysis of the issue
• The Fibrestream website has a write up,
• Michael Geist has a very short and to the point comment about it,
• Azi Roven of the Broadband Traffic Management blog wrote it up,
• Bill Snyder’s Consumer Tech Radar puts our results in context,
• Carrier Evolution takes the carrier’s viewpoint in assessing the findings,
• Computer World Portugal has the story (in Portuguese)
• nag.ru has the story (in Russian)
• Stefano Quintarelli‘s blog has some comments (in Italian)

More to come!

Our new report entitled Do data caps punish the wrong users? A bandwidth usage reality check is finally out. It’s been a long time coming, in part because of more complex data analysis than what we originally expected. This is a data driven report in which we analyse real time DSL network usage statistics from a partner ISP on a user by user basis to try and identify which users are the most disruptive, how they can be identified and if commonly used methods of traffic flow management (and data caps in particular) are fair and effective.

This is a must read for:

• Regulators and policy makers looking at assessing traffic management measures implemented by ISPs,
• ISPs considering various means to alleviate congestion in their networks
• Consumer protection associations looking to understand the price impacts of data caps

Here are the slides from Benoit’s presentation in Ghent a few weeks ago.

Our thinking around the leverage that municipal infrastructure enables for digital cities strategies is progressing fast, so if you have any questions related to this, please ask !