DSL Prime: SBC's 100 Percent Pledge

SBC finally finds that it's economically possible to deliver 100 percent broadband coverage, but it's easier to make a promise than it is to deliver on that promise.

by Dave Burstein of DSL Prime and Future of TV [October 14, 2004]

Whitacre Honoring 100 percent Broadband Pledge
Extenders solve broadband availability
Ed Whitacre gave me a moment after his speech to the Goldman Sachs Communacopia audience, where half the questions seemed to be about broadband and the video it will carry. I asked him when he'd reach his 100 percent goal. His answer delighted me and I'm sure will be welcome news at the FCC as well. "We're there already."

In 1999, Whitacre promised universal broadband for SBC customers. Pronto would reach 80 percent by 2002. He also said SBC would determine the right technology for the remaining 20 percent during those first three years, and deliver broadband to all customers soon after 2002. Fixed wireless might be part of the mix, satellite appropriate for others. In 1999, the best technical solution wasn't yet clear.

I very aware that a CEO's comment is one thing, and execution the next day throughout the company may be very different. But even if some areas aren't "there already" in practice, Whitacre deserves credit for making the move, and I know his company has the talent to deliver what he promised in short order.

Cheap Remote Gear Makes 100 Percent Practical
Small telcos achieved in 2003
Back in 2001, Avi Vaidya, CTO of Charles Industries was delivering repeaters that easily doubled DSL reach. 2Wire brought wire spools of 30,000 feet to SUPERCOMM so they could prove that on the show floor. In 2002, I reported a Clovis, New Mexico telco used GoDigital extenders to reach a customer 72,267 feet away. The GoDigital unit is line powered with remotes about the size of a shoebox.

Dozens of smaller telcos have been installing them since then, believing the cost was worthwhile to maintain customer relations. I reported then the only remaining problem was the price. Vaidya told telcos how to solve that problem, in DSL Prime, "give us the volume, we'll give you the price." He added, "we believe it will cost less to use repeaters and sign up more customers than what many companies are spending to acquire customers through marketing. You make more money by not turning away customers."

Installation costs also count. While the small companies were telling me it was quick and easy, a senior bell technologist told me, "It takes us two men and half a day." I didn't reply, "I don't believe your company is that incompetent or mismanaged." But I did report dozens of smaller companies weren't having the same issue. Glad to see SBC doesn't have a problem like that.

While repeaters are the right technique when just a few scattered customers need to be served, small line-powered field units and remote DSLAMs are ideal when dozens need to be supported.

100 percent is right for us, too
Private comment of another Bell senior technologist
"I'm speaking for myself, not my company. But I think it's good business for us to go to 100 percent as well. The technology is there, and the cost actually quite small. In most places, it's an investment that's profitable, just takes five or six years to pay off. In a very few cases, the costs are higher, but never prohibitive. " The speaker is one of the most experienced technologists at a world-leading telco.

I asked if he really meant 100 percent, given that a handful really are too far away for economical repeaters, have obscure technical problems, or aren't located where backhaul is affordable. DSL Prime believes in "DSL Everywhere," but previously reported that a small number really are hard to reach, perhaps 3 percent. "It's always the case some customers cost a little more to serve, and every business accepts that. But the extra cost is surprisingly little. Where DSL isn't right, we can bring in satellite at a good cost. Buying satellite connections in bulk, and providing the rest of the customer's requirements directly, retains the customer at modest cost."

"Reaching everyone will only help us when we look for government support of our other priorities. The good will payback will be far greater than the extremely modest cost. A small loss on satellite resale and occasional hard to serve remotes would be a very small fraction of the cost of our overall broadband program. It will reduce our wireline losses."

His CFO is not yet convinced, but Whitacre setting the example at SBC may change that.

BellSouth going beyond 85 percent, Verizon 90 percent
British Telecom and France Telecom going over 95 percent
SBC's 100 percent is a major step forward compared to other large telcos. DSL Prime earlier this year reported Babbio at Verizon wanted 90 percent availability in 2004, and that BT and FT, under more government pressure, would do 95 percent. (BT talks about enabling exchanges serving 99.6 percent, but I use 95 percent as the actual number reached.) Ackerman of BellSouth, at GS, broke the news they will go from the 76 percent-80 percent they've been at to over 85 percent, corresponding to the earlier DSL Prime story they were installing more remotes. 2004 plans are modest, presumably waiting for ADSL2+ bonded gear and the capex budget. Ackerman didn't give a time frame; it could be mid 2005, or even a year later if they delay on some ADSL2+ deployments.

What SBC has added to the mix is the willingness to install a repeater for customers not otherwise reached by their build. As many as 70 small telcos do that now, proving it practical, but SBC will be the first giant carrier. The economics are quite reasonable, with a repeater installed for under $200 if they are efficient and buying in large volume. With a DSL customer paying easily $1,000 over three years, that's a reasonable investment. They are separately planning to upgrade their DSL network with remote ADSL2+ DSLAMs within 5,000 or 6,000 feet of most homes. The repeaters will only be for those who aren't otherwise reached.

September: BT 250,000, Japan Officially 190,000
Real Japanese figures higher with VDSL
'The rate of broadband connections in the UK is growing faster than Germany, Spain or Italy,' said Alison Ritchie, BT's chief broadband officer, to the Daily Mail. Great news, as rates fall under OFCOM and competitive pressure. She adds 'Broadband sales are seasonal. The quarter before Christmas is the biggest of the year as people look at getting new computers.' I remain unconvinced it's as simple as that, given some great Q1 numbers this year and other anomalies.

The Japanese 190,000 figure is from the Ministry of Public Management, Home Affairs, Posts and Telecommunications, but doesn't include VDSL served from fiber to the basement of Japanese apartment buildings. That's increasingly the standard mode in Japan. This becomes a question of semantics, with fiber to the curb/basement and VDSL hard to place.

Copyright 2004 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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