IP Capsule E-newsletter, January 4, 2007

IPso Facto…

Proudly they hailed
There isn't a businessman or a politician in the land who does not understand news cycles. If you want a lot of press, you announce whatever it is early in the day, and the earlier in the week, the better. You want to downplay something? Announce it later in the day, on a Friday. Preferably near a holiday. Better yet, two holidays. Say, just for example, the Friday between Christmas and New Year's Day.

The FCC announced its approval of AT&T's $85 billion takeover of BellSouth last Friday, shortly after Christmas and leading in to the New Year's weekend.

AT&T on Thursday, Dec. 28, delivered to the FCC a document (PDF here) offering concessions designed to assuage the concerns of the two Democratic FCC appointees who had previously withheld approval of the deal. These two were able to extract the concessions because, with the fifth FCC commissioner having recused himself, they threatened a 2-2 voting deadlock, which could have killed the deal.

The concessions were so darn good the FCC, in a fit of seasonal rejoicing or something, decided to render a judgment within a day of receiving them. On a Friday. Leading into the New Year's weekend. Here are some of them:

Access: AT&T/BellSouth promised to provide broadband to 100% of the people in its combined coverage area.

That promise has been made by Baby Bells several times before to justify previous mergers. Not one of them is there yet.

AT&T further says it will make DSL available to 85% of its wireline coverage area and that it will use WiMAX to cover the rest.

Some analysts say AT&T is already at 85% coverage with DSL. But with WiMAX, the company could conceivably actually deliver on 100% coverage.

GET HOSED: A major concession… on the Chesapeake boardwalk. Source: Maryland State Archives

Costs: Consumer groups are concerned about broadband pricing. So the merged company is offering 768 kbps DSL for $10 a month (plus applicable taxes and fees) to new customers in what it's calling its "Wireline Buildout Area." The company didn't say whether or not that was a bundled rate.

Naked DSL: AT&T said it would offer ADSL alone without circuit-switched phone service for 30 months after implementation dates, which will vary from market to market. The company pledged to offer naked DSL "at a rate of not more than $19.95 a month."

In San Antonio, by the way, AT&T's 768 kbps package goes for $14.95.

And since AT&T elected to specify circuit-switched telephony, one can't help but wonder what AT&T will do about packaging voice and data should it start transitioning to VoIP sometime in, say, the next 30 months.

Jobs: AT&T made a promise to repatriate 3,000 jobs, including at least 200 in New Orleans, which, if it follows through, means AT&T will have done more for that city post-Katrina than the Bush Administration.

Net neutrality: This is the big issue, the one supposedly holding up the deal. AT&T's big promise was to observe the niceties of network neutrality as defined by the FCC here, in a document so completely lacking in specifics it's a bit of wonder AT&T's lawyers had the audacity to refer to it. Oh, wait, they're lawyers. But I digress…

Anyway, AT&T was actually more specific than the FCC document it cited. It said it "commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet access service" (which it said in a footnote also includes WiMAX connections).

AT&T goes on to say, however:

This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service. These exclusions shall not result in the privileging, degradation, or prioritization of packets transmitted or received by AT&T/BellSouth's non-enterprise customers' wireline broadband Internet access service from the network side of the customer premise equipment up to and including the Internet Exchange Point closest to the customer's premise, as defined above.

I admit upfront that I sometimes find stuff written by lawyers ambiguous if not impenetrable, but if I read that correctly it means that:

a) AT&T won't impede any other provider's traffic, but it won't provide QoS for anyone else's traffic either, which appears to undermine the spirit of net neutrality, and;
b) AT&T will observe net neutrality only on DSL and WiMAX, but not on U-verse.

Well, there you have it. What most people have been describing as "major concessions" and what at least a couple of news sources have described as "caving."

The FCC has extracted its pound of flesh, and a hobbled AT&T/BellSouth will now have to devise some way to be competitive as it limps forward into the future as only the 17th largest company in the world and the largest communications services company in terms of revenue, at an estimated $120 billion a year, or about the size of the entire U.S. cable industry – in 2015 (according to Kagan Research).

Thank goodness for AT&T the Justice Department decided there aren't any competitive concerns about a merger with BellSouth. Can you imagine the hoops the company would have had to jump through to get merger approval if that were the case?

—Brian Santo, IP Capsule Editor, and CED Magazine Senior Editor

Dakota telco picks Optibase to deliver IPTV
North Dakota Telephone Company (NDTC) has selected Optibase's MGW 5100 carrier-grade IPTV streaming platform to deliver local television channels to its subscribers.

NDTC, which serves approximately 18,000 lines in 25 exchanges in Devils Lake, N.D., is a partner with two other companies in the Dakota Video Network (DVN), an IP video headend. NDTC plans to locally augment video/audio services available from DVN with Optibase's head-end to produce H.264, MPEG-4 Part 10 compressed video/audio content. Services will be distributed through both ADSL2+ and active FTTP networks.

MyTVpal.com to launch broadband VOD service for TV
MyTVPal.com is branching out from the PC to the television set, using IPTV technology developed by Matrix Stream.

MatrixStream claims its IMX IPTV platform includes all the network technology necessary to encode, encrypt, watermark, manage, store, and deliver multimedia content over any broadband network. The company says it can deliver HD quality video over any broadband network, including those lacking quality of service (QoS). MyTVPal.com will use the MatrixStream IMX 1020 HD IPTV set-top box to deliver video directly to TVs.

MyTVPal.com at the same time said it intends to launch a new video on demand service. The first long-form item available is "North America's Best Independent Animated Shorts," an 84 minute compilation.

MyTVPAL.com also has long had a downloadable viewer that allows users to view HD streams on their PCs. Content currently available includes streams of HD channels from Russia, China, Hungary, Argentina and Aruba.

PC-based VOD is due later this month, according to the company. MyTVPal promises a series of obscure titles including "Born To Win," "If Tomorrow Comes," "Wake," and classic thrillers like "Night of the Living Dead", and "Bad Lieutenant" (misidentified in the company's press release as "Corrupt Lieutenant"). Films will be available for a monthly subscription fee.

AT&T continues rolling out U-verse
In the last two weeks of December, AT&T introduced its U-verse service in limited areas of Muncie, Bloomington, Indianapolis, and Anderson, all in Indiana, and in Hartford, Stamford and New Haven in Connecticut. AT&T had been insisting through at least early December that it would meet its target of introducing U-verse in 15 cities by the end of 2006. The company appears to have missed that mark.

Covad completes network build; signs United Online
Covad Communications said it has completed the build-out of its next-generation telecommunications network, and now claims to have the nation's largest ADSL2+ network.

Within Covad's footprint are 14 million homes and businesses in Atlanta, Chicago, Dallas, Los Angeles, New York, Miami, Philadelphia, San Diego, San Francisco, San Jose, Seattle, and Washington, D.C. Covad is offering broadband up to 25 Mbps, and said it plans to introduce higher-speed broadband access and new business-class services such as bonded T1.

Separately, United Online plans to expand its NetZero DSL broadband service using Covad's network, starting near the end of the first quarter. United Online said it estimates that the deal with Covad will allow it to offer broadband services to approximately30% to 35% of its current customer base. The company said that pricing and other terms of services will be made available closer to the time of launch and may vary based on geographic locations.

IPTV ops hit Intellon 'Turbo' button
Intellon said a dozen service providers in Europe and Asia are using the company's HomePlug silicon for in-home distribution of IPTV signals over existing powerlines.

Intellon cited the following service providers: 1&1, ChungHwa Telecom, Club Internet, France Telecom, Free, Hanaro Telecom, neuf cegetel, PCCW, Simmin, Tele2, Telecom Italia France and TPSA.

In these cases, the service providers are using "Turbo," a proprietary element Intellon has added to its HomePlug 1.0 platform. Turbo, the company claims, supports a physical layer throughput of about 85 Mbps. Earlier, the company had said Turbo handles true application throughput of between 20 Mbps to 25 Mbps, and that it is compatible with the forthcoming HomePlug AV gear, which looks to push a raw PHY rate of 200 Mbps.

HomePlug AV and Intellon's Turbo iteration aim to distribute high-bandwidth video signals over powerlines in homes that are not equipped with Ethernet wiring. Other advanced home networking platforms/standards that compete in this category include the Multimedia over Coax Alliance and HomePNA. Pulse~LINK is also preparing to come to market with a speedy home networking scheme designed to support actual peak throughputs of 600 Mbps, but the company doesn't expect to reach commercial production until Q2 2007.

Intellon said operators were reporting customer IPTV service cancellations of between 10% to 30% when new Ethernet wiring was required for the installation. Churn has dropped to less than 1% when Intellon's HomePlug solution was added, the chipmaker said.

Autonet Mobile to launch Wi-Fi for cars
Autonet Mobile plans to debut at CES next week a new wireless service that turns cars into WiFi Hotspots. The company also plans to announce an agreement with a leading car rental company – reported to be Avis.

The AutoNet Mobile Unit

Passengers – certainly not drivers, right? – will be able to check email, surf the web, play games or communicate via any WiFi-enabled device.

The company has created a Wi-Fi receiver based on proprietary technology to provide connectivity the company said should work on 95% of U.S. roads, regardless of driving conditions or location.

The company says its TRU technology provides intelligent, dynamic automatic session management between high/low speed networks. The Autonet Mobile Unit is priced to retail at $399 with a monthly service charge of $49.

Qwest playing catch-up?
Reports are circulating that, late last year, Qwest issued an RFP for next-generation fiber network systems. Qwest remains mum on the subject.