Technology Blog

On May 26th, U.S. Commerce Secretary Gary Locke (soon to be U.S. Ambassador to China) delivered a short but impressive keynote address at the Connectivity Week conference in Santa Clara, CA.  The audience didn’t have an opportunity to ask questions, because Mr. Locke’s talk was delivered via a video recording.

Here were his main points;

-Smart Grid could reduce global power demand by 20% or more and significantly reduce carbon emissions.

-Power outages cost U.S. $500 per person per year.  Smart grid technology could reduce number of power failures Gary Gary and quicken time to recover power.

-Economic benefits are expected to be three or four times the cost of building the smart grid (but what about maintaining it, e.g. OPEX?).

-Smart Grid products will be controlled over the Internet by consumers

-Canada, Brazil, European Union, China, and India are all working on Smart Grid projects.

-We must move forward, with all deliberate speed to progress Smart Grid standards, which are essential for interoperability and to drive costs down,

Note: It seems NIST is the Smart Grid umbrella standards organization in the U.S.

During his May 25th keynote, Aneesh Chopra, CTO of the United States, delivered a strong challenge to the audience of Smart Grid innovators, influencers, technologists, and decision makers.

Chopra challenged the audience to find solutions and answers to this question: “How can we safely and securely provide customers electronic access to their energy information, thereby supporting the continuing development of innovative new products and services in the energy sector?”

He spoke to one of the federal government’s key agenda items — fostering innovation around Smart Grid, energy efficiency, and renewable energy. Meeting the President’s goal of 80 percent clean energy by 2035 “demands a modernized electrical grid,” Chopra stated. In the context of discussing the entrepreneurial opportunities in the Smart Grid and smart energy arenas, he said, “My thesis is there’s never been a better time to be an innovator.”

“Aneesh Chopra energized the ConnectivityWeek crowd and delivered a clear message for entrepreneurs here in Silicon Valley and throughout the country,” said Anto Budiardjo, president and CEO, Clasma Events. “We are thrilled to have such a strong commitment to smart energy from the top levels of government and to provide the opportunity for industry-wide collaboration in support of these goals.”

Here are a few network and communications related take aways from this excellent conference (more in follow up articles):

-There are no Smart Grid standards or recommendation for either Home Area Networks (HANs) or the access network the Advanced Meter Infrastructure (AMI) will use for meter reading and control of other utility owned instruments.   The AMI fixed line access network could be proprietary wireless, Broadband over Power Line (BoPL), or other network technology. 

-BoPL is not likely to be used for critical Smart Grid communications.  That’s because it won’t be available when you most need it, i.e. in the event of a power failure.

-AMI access network usually feeds into a proprietary wireless mesh network that may carrier other traffic types, e.g. commands to utility substations.  Most of those networks use lightly licensed or unlicensed spectrum and mesh node topology with either IEEE 802.11n (WiFi) or proprietary OFDM PHY protocol with Ethernet MAC frames.

-Klaus Bender of UTC (Advocate of Utility Telecommunications interests) writes there are several potential smart grid telecom networks: corporate enterprise backbone network, the field force voice dispatch/ mobile data terminal network, the AMI meter reading network, and the command/control network for the power grid itself.

-Many utilities own their own fiber and provide a fiber optic backbone within their city or district.  This is the case for Silicon Valley Utilities (formerly Santa Clara Municipal Utilities).  Very few utilities are planning to deploy Fiber to the Home or Business.

-Most utilities prefer to operate their own network – sometimes hiring a 3rd party to run it for them.  They don’t trust  public network providers and especially  availability/reliability in the event of a natural disaster or emergency.  However, some utes expressed the desire for a hybrid network- one where critical tasks are conveyed over a private network and remedial tasks are facilitated by a public network

-Almost all utillities want to receive meter/ instrument data from customer premises to be processed in the cloud.  This presents stringent requirements for security and such networks must be very reliable and always available.  Yet one company – Heart Transverter in Costa Rico- has taken a completely different approach.  They put all the logic and decision making for control and management of energy systems within the customer premises.  We were impressed with this iconoclastic approach.  It was said that consumers want more engagement when it comes to smart grid meters, instruments, and energy management sytems (whether located on or off premises).

-FCC has been almost singlularly focused on broadband for unserved and underserved areas and neglected utilties need for additional licensed spectrum that could be used for Smart Grid projects.  Utilities currently use licensed spectrum for voice calls and narrowband data transmission/ telemetry readings, but many of them don’t have sufficient spectrum to build a robust wireless mesh network.  Hence, they resort to mesh WiFi over unlicensed spectrum.

http://www.connectivityweek.com/2011/

Since 2004, the Buildy Awards have been presented at Connectivity Week to leaders, visionaries, and implementers of smart devices and smart systems. The five Buildy Award winner are listed by category:

-Smart Buildings: BuildingIQ for building energy optimization, which is helping to reduce energy consumption by more than 30 percent in commercial buildings in Australia. The technology is now available in North America.

-Smart Homes: Heart Transverter for efforts to build the Smart Grid from the bottom up, one house at a time, a truly innovative concept for driving home-to-grid connectivity with integrated energy storage, energy security, and more.

-Smart Industrial: Powerit Solutions for delivering integrated energy efficiency and automated demand response (AutoDR), yielding energy and demand savings for Four Star, a table grape producer in Delano, Calif.

-Smart Grid: The Electric Power Research Institute (EPRI) for the Électricité de France (EDF) PREMIO Project — a collaborative five-year demonstration project with 19 utility members to optimize integration of distributed energy resources, enabling load relief, network support, and CO2 reduction in the southeast of France.

-Connectivity Visionary: The GridWise® Architecture Council (GWAC) for leadership in the following areas: focusing vendor, policymaker, utility, and media attention on interoperability; fostering cooperation among engineers and policymakers to effectively address technical issues in ways non-technical communities understand; raising interoperability capabilities; and educating all stakeholders about interoperability.

“At Connectivity Week, we bring smart energy leaders and visionaries together from both sides of the meter — including the utility side and the consumption side,” said Anto Budiardjo, President and CEO of Clasma Events. “This year’s Buildy Award winners represent the leaders who are driving the smart energy vision to become a mainstream reality. They are true industry role models.”

Future articles on Connectivity Week will cover the Communications oriented sessions.  Here is one of them:

http://viodi.com/2011/06/08/integrated-critical-communications-infrastructure-for-smart-grid-at-connectivity-week/

Please see Daniel Wong’s summary of the Mobile Data Offload Panel Session at Connectivity Week:  https://techblog.comsoc.org/2011/06/06/summary-of-connectivity-week-panel-session-on-mobile-data-offload

The Wireless Communications Alliance (WCA) Mobile SIG organized a session on “Mobile Data Offload” on May 24th co-located with the Connectivity Week 2011 conference. It went from 1:30pm to 3:30pm, not 3:30pm to 5:30pm as advertised. However, engaging and informative discussions occured during those 2 hours.

The moderator was Stefan Pongratz, Financial Analyst at Dell’Oro Group. The panelists were Michael Luna (CTO, SEVEN networks), Steve Sifferman (VP, Advanced Radio Solutions, Powerwave Technogies), Vikta McClelland (VP, Technologies Services for Internet Solutions, Ericsson) and Steve Shaw (VP, Marketing, Kineto Wireless). Greg Williams (BelAir Networks) was on the program but did not show up.

WCA provided an abstract of the panel::
“Service providers need to address annual mobile data growth of 109% with minimal or zero increase in ARPU. To manage this, providers need to leverage mobile data offload. For the operators the main purpose for the offloading is congestion of the cellular networks. Two choke points in the mobile network are the radio access network (RAN) and the core network. RAN build-outs are expensive and constrained by permitting, site surveys etc and core networking needs to include deep packet inspection (DPI) on massive packet streams. This packet processing workload is beyond the architectural capability of most installed systems.

Large established companies and start-ups have innovations to address the capacity and cost issues by routing mobile packets directly to the Internet. The main complementary network technologies used for the mobile data offload are Wi-Fi and Femtocell.

In this seminar, a panel of experts in network infrastructure will discuss the new proposed solutions and their impact on the major wireless carriers. The panel will address the role of mobile packet offload for both currently deployed (3G) and next generation (4G/LTE) systems.”

Pongratz divided the challenges into two categories, namely financial and technical:
a) Financial challenges included the flat ARPU accompanying higher and rapidly growing data usage.
b) Technical challenges: in today’s world to get more capacity, operators would go for more spectrum, more spectral efficiency and more sites. In tomorrow’s world, these would still be the tools plus small cells, and mobile offload from RAN to internet directly. The challenge will also be offset by wifi offload, traffic control, network optimization.

The points raised during the panel discussion included the following:

– We are running out of spectrum, with estimates putting 2013 or 2014 as the time when we really run out. Thus, we need wifi offload. There are more and more smartphones. 700 MHz, 2100 MHz, etc. will be deployed.

– Wifi offload is different from the femto model, which is more for voice.

– Michael Luna said: There will be a capacity problem in the access. Coverage is the second issue, as Wifi coverage is not everywhere. Third layer is that IP is not the same in every network. Many developers only cared about the abstraction of the network. Don’t care about the challenges of data over cellular.

– Steven Shaw said: Offload is behind the scenes, will not be advertised to users. Improve coveraged, drive more capacity, Kineto can direct traffic to any ISP behind the network, viewed by customers as mini BS. They view the huge pipes coming into buildings, plus wifi access, as symbiotic.

– Time square cell access was maxed out. They added wifi, now also maxed out. Users will do more if connectivity is increased. From twitter to photo to video.

– Ericsson perspective: there are heterogeneous networks with wifi, cellular, etc. they need to work together and not interfere with each other. Need new business models, to overcome the scissor effect. Doubling of data every year over the next 10 years. In early 2008, when they were planning strategy as far as voice vs data, data was only 20% of total traffic. By end of 2008, data was the great majority of the traffic. Huawei dongle had been released. There was a great paradigm shift. Now, operators must build for data.

– Kineto. Phone minutes dropping, costs dropping for voice service. A whole new generation doesn’t know what a wired phone is. Now, tmobile incentivizes use of wifi by users: they stopped charging for voice over wifi. This encourages people to turn on their wifi at home. So it is one idea to consider.

– QoS issues are a key aspect. How to provide minimum guarantee?

– How would operators monetize VoIP?

– Ericsson: Have to decide what is free, and what is value added service? Otherwise, carriers will not be able to stay ahead on the billing for all the new models. Consumers have expectations of paying for voice and not data. ISPs need to manage expectations. Kineto disagrees. Hard to segment out. Ericsson on telefonica model. They offer APIs to developers for free, they collect revenues and share with developers. So they work with the over the top organizations. 500 developers signed up. Operators bringing QoS, knowledge of user info.

-How about picocells? Big push starting in 2012?
Ericsson: capacity crunch not there yet. Heterogeneous aspects of managing handoffs is hard. Refarming: Other countries, Europe and Asia have done more refarming. Capacity is not the problem right now. It’s signaling, right now.

– Who would manage WiFi offload? Maybe it would be managed, integrated, controlled by cellular operators.

Reference: From a recent Light Reading post on this topic:

“Recent research conducted in South Korea showed smartphones there were within Wi-Fi coverage areas 63 percent of the time and remained in those coverage areas an average of two hours, an indication that Wi-Fi offload is already widely used on an unmanaged basis, especially in a country with such dense Wi-Fi coverage. Wi-Fi offload is only one option that wireless network operators are pursuing to address the wireless data bandwidth problem. Among the others are use of femtocells and picocells, adding to the cellular network.”

http://www.lightreading.com/document.asp?doc_id=208591&site=mio&

One of the key benefits of IEEE ComSoc membership is to be able to download individual articles or the entire issue of IEEE Communications magazine -ComSoc’s flagship publication.  The magazine was always a good read, but it’s improved greatly in the last year, thanks to Editor in Chief Steve Gorshe.  Steve is a former IEEE Communications Society Director of Magazines and had organized special issues of IEEE Communications magazine in the past.  He has also been editor of several optical networking standards (including SONET and GFP) for ATIS and ITU-T.

While many of IEEE publications have drifted to journals oriented toward academia, IEEE Communications magazine has actually increased articles from industry that highlight new communications technologies.  Practicing engineers and marketing professionals have found those articles of keen interest and value.  We encourage ComSoc members and those with an IEEE Xplore account to browse recent issues of the magazine.

Steve’s goals for IEEE Communications magazine are all progressing very nicely:

1: Establishing proper balance between articles and feature topics targeted at engineers working in industry and those in academia.
2: Continuation of the new history column. edited by long time colleague and ComSoc Strategic Planning Committee Chairman Steve Weinstein.
3: Reducing the time from submission to first decision on standalone (open call) papers.
4: Provide a balanced coverage of both current hot topics, but also emerging topics and less well-known topics that would provide a diverse, broader coverage for the magazine’s readers.
5: Maintain the high quality of the articles through continuing careful peer review of feature topic proposals and all papers. Four of the top five papers from Communications Society publications were from Communications Magazine, according to recent  IEEE Xplore paper download statistics.

Mr. Gorshe writes, “In the past year, there have been a significant number of articles and feature topics from industry, achieving a good balance relative to those from academia.  The balance between hot topics and new topics has also been good.  The popular History Column continues, now edited by Steve Weinstein.  The time from article submission to first decision has been significantly reduced, with more initiatives in the works to further reduce the time.  Download data from IEEE Xplore confirms that the magazine has maintained the high quality of its papers.  My thanks to the hardworking editor team and ComSoc staff.  In the coming year, I am working on better correspondence with authors and implementing several new ComSoc publications initiatives.”    

This author has co-authored standards contributions and worked with Mr. Gorshe at NEC-America and PMC-Sierra.  I have always been impressed with his knowledge, experience and work ethic.  

From 1999-2000, we co-authored several contributions on Virtual Concatenation and mapping Ethernet MAC frames directly to SONET/SDH (that was later to become Generic Framing Procedure or GFP).  In a guest editorial on GFP and Data over SONET/OTN Steve wrote. “The protocol work officially began in American National Standards Insitute (ANSI) working group TlX1.5 in 1999 in response to a contribution from Alan Weissberger.”

IEEE Communications Magazine – May 2002 page 61 

http://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=01000214

Steve’s credentials are impeccable.  He is a Fellow of the IEEE and has 29 years of experience in research and development of telecommunications systems and ICs for PMC-Sierra, NEC America, and GTE.  He is also technical editor for multiple ITU-T standards, including G.7041 (Generic Framing Procedure – GFP) and G.Sup43 (Transport of IEEE 10G Base-R in Optical Transport Networks (OTN)), and has received awards for his technical and editorial contributions to the North American ATIS COAST Committee (formerly T1X1/OPTXS) telecom standards committee.  Mr. Gorsche has 32 patents issued or pending, over 24 published papers, and is co-author of a telecommunications textbook and of three additional book chapters.  Steve obtained a PHD while working in industry, which is quite an accomplishment.

Let’s all tip our hats to Steve Gorshe for the excellent job he’s done to improve the quality of IEEE Communications magazine!

Ever wondered how a contemporary university campus network was planned, designed, built and maintained? How it has evolved to support diverse traffic types (including VoIP, Internet, storage retrieval, OTTP video, IPTV, games, etc), more users and higher bandwidth applications? What a huge impact mobiility has on the network? How the data center works and is accessed by students, staff and faculty? June 8th is your chance to find out about these and all other aspects of Santa Clara University’s (SCU) state of the art campus network and data center. 

Three experts from SCUs IT Department will address how the network evolved, the architecture, design and development challenges, traffic types supported, maintenance issues, security protection (e.g. from DoS attacks), and how to grow the network to meet new user demands and applications. Mobility, video and high resolution imaging posed critical challenges for the network.  How are these being addressed?

We’ll also examine Data Center issues, including how servers are interconnected, how the data center is remotely accessed, impact of hosted virtual desktops and tradeoffs in supporting high resolution imaging apps. Finally, we’ll take a hard look at the motivations and critical issues in migrating the data center to a private, hybrid or public cloud computing environment.

A lively panel session will follow the presentation with audience participation encouraged. Get your questions ready!

Session Moderator:  Alan J Weissberger, ComSocSCV Chairman, x-SCU Adjunct EECS Dept & SCU Osher Member

Speakers

• Carl Fussell — Director of Information Technology, Santa Clara University
• Todd Schmitzer — Manager of Network, Telecom & Security, Santa Clara University
• Eddie Butler — Lead/Senior Network Engineer, Santa Clara University

Don’t miss this extra special event.  It starts at 6pm with food/drinks/networking session with opening remarks at 6:30pm. National Semiconducor Auditorium in Santa Clara, CA

More details and RSVP information at:  http://www.ewh.ieee.org/r6/scv/comsoc/index.php

Sponsorship Opporunity:  ComSocSCVs June 8th meeting offers an outstanding corporate sponsorship opportunity. We have recruited the top brass at SCU IT Dept to talk about their campus network & data center: Managing Director of IT, Head of Network Planning & Operations, and Chief Networking Engineer. Sponsors get a table during networking which attendees tend to congregate around. That’s a chance for corporate image enhancement and additional networking  We list sponsor on our rotating slides, web site, FB page and Linked In group. Great exposure!  Contact: [email protected] if you are interested in co-sponsoring refreshments for this meeting.

Fixed WiMAX operator Towerstream is  building out a dense Wi-Fi zone in New York City, described by Bloomberg Business Week as seven square miles in Manhattan.  This is a new business model for Towerstream, which has up till now only provided fixed broadband wireless links to enterprise customers in large citiies.  For this NYC project, the firm is deploying  WiFi equipment from Ruckus Wireless, including 1,000 routers.  Its using its own Building- top to Building- top fixed wireless connections for backhaul.  That same wireless backhaul, in NYC and other densely populated cities, has proven successful for Towerstream’s point-to-multi-point connections it offers today as a nx DS1 or DS3 wireless replacement service.

While the Muni WiFi business model didn’t pan out- there was no payback to operators for the free WiFi provided- this Metro WiFi project is different.  It’s intended to be used for mobile data traffic offload from 3G and 4G networks.  Data traffic that’s offloaded to a Wi-Fi network doesn’t use local cell towers or capacity on cellular backhaul connections.  In Towerstream’s planned metro WiFi network, wireless data (from iPhones, Android phones, tablets, mobile game players, and other gadgets with built- in WiFi) would be detected by the nearest Wi-Fi antenna, then passed off to other WiFi antennas until it reached one of nine large base stations Towerstream operates around NYC, including one at the top of the Empire State Building.  From  there, the data traffic would be routed to the Internet.

The WiFi antennas are much cheaper and less obtrusive than cell towers. They’re about the size of a football, cost about $800 apiece, and sit on poles or rooftops; cell towers can run upwards of $200,000. Towerstream representatives have fanned out in Manhattan, persuading landlords and building owners to let the company install the devices on their property. The company pays $50 to $1,000 per installation per month, depending on location.

“AT&T, China Telecom, and many others are doing this kind of ‘Wi-Fi offload'” on a smaller scale, says Michael Howard, co-founder of market research firm Infonetics Research and an IEEE member who spoke at an IEEE ComSocSCV workshop on Mobile Infrastructure and Apps last year. 

Both AT&T and VZW have announced they are off-loading 3G/4G traffic to WiFi hot spots.  However, those WiFi zones aren’t as dense or extensive in coverage as what Towerstream is planning for NYC and other large cities (Chicago and SF could be next).  As such, Towerstream could become a vendor-neutral cost-effective alternative to carriers building WiFi zones for high bandwidth mobile data offload.

Bloomberg Business Week reports that there’s little doubt about consumer demand. “Last year, Towerstream conducted a three-month test of a 200-device Wi-Fi network in Manhattan. Without any promotion, the network handled 20 million Web sessions by consumers who happened to spot Towerstream when trolling for a Wi-Fi connection. That’s a fifth of the Wi-Fi traffic generated by AT&T during the same three months at its hotspots, which include most Starbucks (SBUX) and McDonald’s (MCD). Demand is expected to increase, even as cellular networks go from today’s 3G technology to 4G. While 4G is roughly four times faster than 3G, overall data traffic is projected to rise more than 30 percent per year, according to multiple studies. “If any of these estimates are even close to true, those 4G networks will be filled up almost immediately,” says Towerstream CEO Jeff Thompson.”

http://www.businessweek.com/magazine/content/11_23/b4231036687850.htm 

Smart phone and tablet users will likely also benefit from this offloading as they’ll realize a much faster rate of service from a dense, high-speed Wi-Fi network than the comparable 3G or “4G” service.  Equally important, the traffic offloaded to WiFi doesn’t count in the number of bytes/month in most 3G/4G service plans.  Therefore, mobile data subscribers can send/receive much more wireless data without hitting limits or paying overages on their 3G/4G bills.

In a statement accompanying its 1Q2011 earnings release, Towerstream CEO Jeff Thomspon said, “”We continue to achieve significant progress building what we believe is the largest and fastest Wi-Fi offload network in Manhattan.  The NYC network will be ready for customers in the second half of 2011.”  The cost of Towerstream’s Wi-Fi mobile data offload program totaled $1.2 million in the first quarter 2011.

This January, the company revealed it was getting into the Wi-Fi hotzone business with an aim of becoming a wholesale provider to operators desiring to offload heavy mobile data traffic.  Mr. Thomspon tipped off the company’s plans to enter this market in a Wimax360 post last year.  

“Most smartphones now come with built-in Wi-Fi, which is a mature and secure technology that even encompasses Quality of Service (QOS). Wi-Fi is now capable of carrying up to 200Mbps (the older Wi-Fi started at 11MB, 1 MB less than Verizon’s new LTE network, according to them.  The carriers can no longer ignore these extremely fast, inexpensive Wi-Fi networks and chip sets. Certainly, it will take some work. Similar to the network Towerstream is piloting in Manhattan, Wi-Fi networks must allow consumers to use their phones as phones (SMS, calls) and not just to access data. It requires a bit more capital to support a carrier class network that experiences very low latency and can handle QOS.  These networks must also improve in order to allow seamless connectivity and hand-off capabilties. For example, I hate when my iPad constantly prompts me to join a Wi-Fi network. This is not user-friendly.

Finally, let’s talk about the new WhiteFi announcement from the FCC. Building a city wide Wi-Fi network does take a significant amount of hotspots, but they possess far more bandwidth than 4G. In her article, CNET’s Maggie Reardon discusses the limitations of implementing femtocells to offload wireless traffic onto wired broadband connection. She quotes a Nielsen SVP, “You can only split the cell sites so far. There are physical limitations.” The introduction of new white space to carrier class Wi-Fi networks could possibly result in a seamless high-capacity network, a great alternative to which carriers could offload. WhiteFi would enable users to travel long distances on little power.  We are excited to see which hardware vendors develop gear for this initiative. We will be first in line!”

http://wimax360.com/profiles/blogs/the-fcc-helps-align-the-stars?xg_source=activity

On the heals of Towerstream’s mega WiFi hot spot in NYC, we’ve just learned that the city of Santa Clara (my hometown for last 41 years) will be offering free WiFi in the city as part of its IEEE 802.11n buildout later this year.  That mesh WiFi network uses Tropos equipment.  That will be another story for another time.

Introduction

In its latest report on PON, FTTH, and DSL Aggregation Equipment and  Subscribers for 1Q2011, market research firm Infonetics (www.infonetics.com) states that “The overall market’s decline was led by a double-digit sequential drop in DSL infrastructure spending in all regions.”  That huge drop pulled the combined market down, even with a 20% increase in the worldwide PON market to over $1B for the first time ever.

“The major story in the broadband aggregation equipment market this quarter is the dramatic drop in DSL ports in China, which points to operators there continuing their dramatic shift away from DSL. The first quarter is typically one of the slowest for DSL, but the seasonal effect was worsened by Chinese operators’ continued shift away from traditional DSLAM deployments. Also, voice ports (DS0s) on FTTB/MXU MSAPs in Asia dropped significantly, signaling a shift away from adding voice lines to simply installing DSL ports,” notes Jeff Heynen, directing analyst for broadband access at Infonetics Research.

Analysis

Is this finding evidence that service providers throughout the world are perhaps ready to shed their copper in favor of fiber?  We don’t think so!  VZ has been the only U.S. telco that’s serious about deploying fiber to the home (for it’s FiOS triple play service offering)  China and Japan have been much more agressive in this area.  Six years ago, I visited my friend in Tokyo who had 100M b/sec Internet access via Ethernet over Fiber.

With most telcos moving at a glacial pace to deploy fiber to homes and commercial buildins, we think DSL still has a lot of life left in it.  Yet, there are other opinions:

DSL equipment spending plummets: Is DSL finally dying?   http://blog.connectedplanetonline.com/unfiltered/2011/05/24/dsl-equipment-spending-plummets-is-dsl-finally-dying/comment-page-1/#comment-37268

There are two types of DSL deployed by telcos in the U.S.:

1. ATM over ADSL or ADSL2 for Internet access and POTs
2. IP-Ethernet over VDSL2 for delivery of triple play services, especially entertainment video (e.g. ATT U-Verse)

With very few new subscriber additions (with possible exception of new buildouts in rural areas), we think ATM over ADSL is likely to see very little new telco spending. It might even be phased out, i.e. no longer offered to new subscribers by many telcos.

The second version of DSL remains commercially viable, but for how long? Will VDSL2 adequately support 3 compressed HDTV streams + high speed Internet acess? And over what distances?

Meanwhile, Comcast has become much more aggressive than U.S. telcos in providing higher speed Internet to residential customers over its HFC network.  (Comcast’s brand name for residential services is “Xfinity”). Comcast Business is extending its fiber network to commercial buildings. This is being done to attract larger business customers to Comcasts high speed Metro Ethernet service and Legacy PBX (PRI) Trunking service.

Comcast Fiber Network Buildout gives rise to Metro Ethernet and PRI trunking services for SMBs

http://viodi.com/2011/05/23/comcast-fiber-network-buildout-gives-rise-to-metro-ethernet-and-pri-trunking-services-for-smbs/

Do you think DSL is Dead?  That telcos are replacing it with FTTH and GPON?  Or that MSOs higher speed Internet access is taking market share from DSL based Internet?  And what about AT&Ts U-Verse which uses VDSL2 to deliver 3 HDTV channels + high speed Internet + VoIP (or so ATT claims)????

DSL Reports says that AT&T “will virtually stop” its U-Verse build-outs at the end of this year.  U-verse,  which delivers residential triple play service bundles, is one of the fastest growing parts of AT&Ts wireline business.  Much more so than the traditional digital private line and IP VPN services to business customers

During a recent Citibank investor’s conference,  John Stankey, AT&T’s President, said that the service provider is confident it can pass 55-60 percent of the 30 million homes passed in their service region by end of 2011.  But that may be the end of the line for U-Verse.  

Within the broadband data realm, Stankey said that only 25-30 percent of homes in AT&T’s region will be offered ADSL, adding that 20 percent of them are “not a heavy emphasis for investment.”Interestingly, AT&T’s goal comes at a time when U-verse continues to resonate with customers in the regions where it’s available. In Q1 2011, AT&T added 175,000 new broadband subscribers and 218,000 U-verse subscribers to reach 3.2 million in service.  However, the broadband numbers fell short of analyst expectations of 195,000 new subscribers.

AT&T CFO Ritcher told investors “Consumer wireline is growing again, thanks to our U-verse product. We’re really just seeing the benefits of scaling the service and it gives us great momentum. U-verse is transforming our consumer results. Where we offer U-verse, our ARPUs are higher, our churn is lower, our customer satisfaction is better across all of our products.”

DSL Reports’ Dave Burstein, wrote, “I didn’t expect so severe a cutback, and wouldn’t be surprised if they reversed it eventually. I checked with AT&T whether Stankey mis-spoke, but not so according to his pr people. Virtually stopping means that in many cities U-Verse will look like Swiss cheese, with 10-50% of homes in holes that can’t be served. 

I’m guessing that what’s going on is that AT&T decided they had no choice but to raise capex on wireless, accelerating the LTE build to prevent falling too far behind Verizon. Expanding U-verse to 75-85% is almost surely profitable after cost of capital, which to a purely theoretical economist would suggest they would just borrow modestly and do both.”

To stem the loss of traditional DSL customers,  where  U-verse is not available, AT&T is offering a number of special promotions.  These include low-priced DSL offerings to lure dial-up Internet customers starting at $14.99. It is also appealing to its growing wireless custoemr base with a special bundle for qualifying U-Verse TV customers a $45 monthly discount for six months covering the cost of U-Verse Internet Max.

Personal Note:  AT&T trucks and technician’s have spent the last three days at the patch panels outside my condo complex in Santa Clara, CA.  They have been testing resident copper loops for U-Verse compatibility.  During those tests, existing customer phone and DSL based Internet were out of service with no notice given to the customers effected.  I am wating for an AT&T Executive to explain this unexpected outage with no customer notification.  Will report back later.

For more information:  AT&T’s Stankey: U-verse Build Virtually OverCompany Comments Suggest Build Ends at 55-60% of Homes

http://www.dslreports.com/shownews/ATTs-Stankey-Uverse-Build-Virtually-Over-114279

Market research firm Infonetics Research has released its first quarter 2011 (1Q11) Optical Network Hardware vendor market share report, which finds that the optical network market will experience modest growth this year after a mixed 1Q11.  Highlights from the report:

  The global optical network equipment market, including WDM and SDH/SONET equipment, saw a typical seasonal decline in 1Q11, down 12%, following a 10% increase in 4Q10
.    Year-over-year, from the first quarter of 2010 to the first quarter of 2011, WDM optical network equipment spending is up 20% and the overall optical market is up 7%
.    Optical network hardware vendors that are Japan- and North America-centric did well in 1Q11, including Ciena, Cisco, Fujitsu, and NEC, all posting single- or double-digit gains
.    Meanwhile, most other vendors posted slight to significant revenue declines, including market leaders Alcatel-Lucent and Huawei
.    North America optical spending held steady in 1Q11 over 4Q10, bucking normal seasonal trends
.    Optical equipment spending is up year-over-year in all regions except Asia Pacific
.    ROADM spending set another new high in 1Q11, shrugging off seasonal spending patterns to rise 4% sequentially

 “There is concern in the optical industry about the outlook for 2011, but we feel our single digit growth forecasts for 2011 are achievable. Optical equipment for mobile and broadband backhaul is in demand, and carriers are embarking on a multi-year ‘optical reboot’ to 40Gbs/100Gbs transmission over OTN and ROADM based networks. Vendors who service the growing WDM and packet-optical sector should do well, while vendors leveraged to legacy SONET/SDH will not,” foresees Andrew Schmitt , Infonetics Research’s directing analyst for optical.

Here’s a link to a sample chart from this report: 

http://viodi.com/wordpress/wp-content/uploads/2011/05/2011-Infonetics-1Q11-Optical-Ntwk-Hardware-Mkt-Fcst-Chart.jpg

The report tracks optical network vendors, including Adtran, ADVA, Alcatel-Lucent, BTI, Ciena, Cisco, ECI, Ericsson, Fujitsu, Huawei, Infinera, NEC, Nokia Siemens Networks, Nortel, Sycamore, Tellabs, Transmode, Tyco, ZTE, and others. Worldwide and regional vendor market share, market size, and analysis are covered in the report (1Q11 analysis and forecasts will be published by May 26).

Equipment tracked: metro and long haul optical network equipment, including SONET/SDH (ADMs and terminals, metro MSPPs and crossconnects), WDM (transport, ROADM, and long haul submarine line terminating equipment), and packet-optical transport systems (P-OTS). Also tracked: number of ports and revenue per port by speed (Ethernet, SONET/SDH/POS, WDM), from below OC48/STM1 to 100G. Regions tracked: Asia Pacific (with breakouts for China , Japan , India ), Central and Latin America (CALA), EMEA (Europe, Middle East, Africa), North America , and worldwide.

A related Infonetics report on the OTN market is described and analyzed at:  

http://viodi.com/2011/05/16/infonetics-carriers-making-major-push-to-otn-pmc-sierra-sees-healthy-otn-growth-during-next-5-years/

Categories and Definitions
Products
◆ SONET/SDH: ADMs and MSPPs and crossconnects that attach to SONET/SDH rings and/or provide DCS functions
◆ WDM: Transport + ROADM
• Transport: DWDM + CWDM terminals, OADMs, amplifiers

Long haul hardware interconnects COs between metro areas, supporting distances greater than 200km
◆ SONET/SDH ADMs and terminals; switches with or without DCS functions; may have transport capabilities
◆ WDM: Transport + ROADM
• Transport: terminals, OADMs, amplifiers
• ROADM: OEO or photonic switching; may have transport capabilities; includes amplifiers; must incorporate ROADM technology

Packet-optical transport systems (P-OTS) is an “overlay” category; it is a subset of already reported SONET/SDH and WDM equipment (P-OTS is not added into total optical revenue)

Legacy DCS (Digital Cross Connect) optical network hardware is not included in this service.

Ports
◆ Ethernet optical used in WDM and SONET/SDH products only (not in Ethernet switches and routers)
• 10M/100M/1G
• 10G
• 40G
• 100G
◆ SONET/SDH/POS used in SONET/SDH and WDM products only (not in Ethernet switches and routers)
• OC-3/STM1 (155M)
• OC-12/STM4 (622M)
• OC-48/STM16 (2.5G)
• OC-192/STM64 (10G)
• OC-768/STM256 (40G)
• 100G

◆ WDM used in SONET/SDH and WDM products only (not in Ethernet switches and routers)
• Below OC-48/STM1, wavelength, OTN includes OC-3 and OC-12, SAN ports (FICON, ESCON, Fiber Channel)
• OC-48/STM16, wavelength, OTN (2.5G)
• OC-192/STM64, wavelength, OTN (10G)
• OC-768/STM256, wavelength, OTN (40G)
• 100G wavelength, OTN

Metro hardware connects buildings to COs and any locations between (such as CEVs and RTs), and to connect COs, POPs, and data
centers in a metro area, supporting distances of up to 200km

ROADM: OEO or photonic switching; may have transport capabilities; includes amplifiers; must incorporate ROADM technology
SLTE (submarine line terminating equipment): dry hardware only, does not include wet hardware such as festoons and
amplifiers; does not include terrestrial equipment used to drive undersea links; must be purpose built for SLTE applications

2nd gen P-OTS: platforms with an architecture that provides Ethernet switching and circuit switching (SONET/SDH crossconnect and/or OTN) across the chassis; must support connection oriented Ethernet (COE) protocols (e.g., MPLS-TP, PBB-TE, T-MPLS, switched VLANs), WDM, and ROADM at a system level with a single control plane; does not include external ROADM systems

1st gen P-OTS: platforms that provide L2 Ethernet switching and/or aggregation, SONET/SDH ADM (may have crossconnect), and WDM
interfaces; may have some but not necessarily all of the following: the ability to groom and switch both SONET/SDH and Ethernet across the chassis, connection-oriented Ethernet protocols (e.g., MPLS-TP, PBB-TE, T-MPLS, switched VLANs), and OTN G.709 client interfaces

RELATED OPTICAL RESEARCH from Infonetics (www.infonetics.com):

. Optical transceiver market rockets to $1.2B in 2010, forecast to hit $2.8B by 2015

. ROADM WSS component market on pace for 20% annual growth through 2015

. OTN survey reveals huge shift in carrier plans for optical switching

. EMEA optical network hardware market expected to turn around in 2011

. High speed network port market to hit $52 billion in 2015 (1G, 10G, 40G, 100G)

Disclaimer:  This author has no business relationship with Infonetics, but we respect the primary market research that is the basis for their reports

CenturyLink, which is acquiring Qwest, Embarq (former Sprint Local) and Savvis, added over 52,000 new DSL subscribers in the last quarter, bringing it to a total of 2.4 million broadband subscribers.  While DSL subscribership rose in Q1, CenturyLink was able to reduce access line loss to 13.6, an improvement over Q4 2010 and 15.2 percent over Q1 2010. At the end of Q1 2011, CenturyLink had 6,397,000 access lines. 

The carrier reported a 16% drop in profit, which came in at 69 cents a share, only a penny shy of analyst estimates.  Qwest results were not included in CenturyLink’s earnings report, because the telco purchase closed in early April.   Operating revenues for first quarter 2011 were $1.70 billion compared to $1.80 billion in first quarter 2010. The revenue decline was primarily due to the impact of access line losses and lower access revenues, including the anticipated impact of lower universal service fund receipts and wireless and long distance traffic migration. These decreases more than offset revenue increases driven by growth in high-speed Internet customers, data services demand from business customers and data transport demand from wireless providers.

Operating expenses, excluding special items, decreased to $1.20 billion from $1.22 billion in first quarter 2010, driven by lower transport costs due to the migration of legacy Embarq long distance traffic to our internal IP network and lower personnel-related costs.   These decreases were partially offset by higher costs associated with the expansion of CenturyLink™ Prism™ TV into additional markets.

Glen Post III, CEO and president of CenturyLink, said in the earnings release that in addition to “successfully integrating and operating the Embarq properties, slowing the rate of line loss in our business and meeting customer demand for high-speed Internet and high-bandwidth services.” 

“The addition of more than 52,000 high-speed Internet subscribers, expansion of CenturyLink’s Prism™ TV service to additional markets and growing demand for Ethernet and data transport services helped drive strategic revenue growth of 7% in the first quarter this year versus last year,” Post said. “Customer demand for bandwidth intensive services continues to increase, and CenturyLink continues to focus on delivering high-quality, reliable broadband services to meet this growing demand.”

“I believe the recently completed Qwest transaction and the pending Savvis acquisition significantly enhance CenturyLink’s position as a global communications leader and strengthen our ability to drive long-term shareholder value.”
  
Separately, Qwest reported $2.85 billion in operating revenues, down 4.1 percent from $2.97 billion in Q1 2010. However, it did see an uptick in strategic service revenues as a result of increases in Qwest IQ Networking and data transport services, as well as higher broadband revenues driven by subscriber growth and an improving mix of higher speed broadband services.  Qwest also saw a strong rise in broadband subscriptions with the addition of about 46,000 broadband DSL subscribers in Q1 2011. It ended the quarter with 3.0 million total broadband subscribers. As expected, Qwest saw its share of access line loss in Q1 2011. At the end of Q1 2011, Qwest had about 8.6 million access lines. The telco lost 223,000 lines in Q1 2011, which represented a 2.5 percent sequential decline and a year-over-year access line decline of 10.7 percent

CenturyLink won’t be extending its IPTV service to existing Qwest customers anytime soon.  While CenturyLink now offers its Prism IPTV service in a few select markets, Qwest (an early telco TV pioneer) has been delivering satellite TV services and pursuing a hybrid Over the Top video vision.  Without the video component, CenturyLink faces some strong cable competition from cable operators like Cox in it’s local markets.  That MSO offers 50 Mbps- DOCSIS 3.0 based Internet access as part of a triple play bundle in markets like Phoenix, Ariz. 
“We are getting more local — competing with the CLECs and cable companies who have been taking market share from Qwest,” said Karen Puckett, EVP and COO of CenturyLink.

On 04/27/2011, CenturyLink announced a definitive agreement to acquire all outstanding shares of Savvis common stock.  It’s a cash and stock merger valued at $40 per share, or a total of approximately $2.5 billion, plus net debt of approximately $0.7 billion which will be assumed or refinanced at close.   Savvis is a leading provider of cloud based services, colloacation and managed hosting.  They use their traffic engineered, IP-MPLS private network (rather than IP VPNs over the public Internet) to deliver LAN like network performance to its business customers.  In our opinion, this will give the company a huge advantage in delivering cloud computing services.

With the addition of Savvis, CenturyLink will achieve global scale as a managed hosting and colocation provider and will accelerate its ability to deliver quality managed hosting and cloud capabilities to its business customers. The combination of CenturyLink’s hosting and network assets with Savvis’ proven solutions in colocation, managed hosting and cloud services substantially enhances CenturyLink’s capabilities and provides the company with a solid platform for future growth.

“The transaction creates a premier managed hosting and colocation provider with global scale in a high growth sector, and is expected to be accretive to revenue growth and cash flow per share,” said Glen F. Post, III, CenturyLink CEO and president. “Today, businesses are shifting the way they manage their information technology services and infrastructure, and this transaction helps us meet these needs by offering Savvis’ leading products and services coupled with CenturyLink’s network. We look forward to working with the Savvis team to leverage CenturyLink’s significant scale and scope to fully realize the potential of Savvis’ capabilities for our combined customers, while also enhancing value for our shareholders and providing opportunities for our employees.”  

“As migration to cloud-based services continues to accelerate rapidly, a strategic combination was a natural choice to create significant scale and become part of a large global network for the benefit of our customers, stockholders and employees,” said James E. Ousley, chairman and chief executive officer of Savvis. “We believe that combining our proven capabilities in cloud infrastructure and managed hosting with CenturyLink’s hosting assets and large base of business customers will create powerful opportunities to accelerate growth. We also look forward to making the full resources of a much larger network infrastructure available to our customers.”

Together, CenturyLink and Savvis will operate 48 data centers located in North America, Europe, and Asia with more than 1.9 million square feet of gross floor space; a robust, national 207,000 route mile fiber network; a 190,000 mile global access network; and have a customer list that includes a majority of the Fortune 500 and Fortune 1000 companies

For all Century Link Press Releases, please visit:  http://news.centurylink.com/

Comment:  This author has had two interviews with Savvis Network Professionals and came away very impressed with the emphasis the company is putting on their IP-MPLS network to deliver a variety of cloud computing services to business customers.  We are planning a separate article that will look in depth at Savvis’ private network for cloud computing.  Please let us know your interests in that area by emailing the author ([email protected]) or commenting in the box below this article.

TiEcon 2011- “Innovation Reigns”  will take place at the Santa Clara Convention Center, May 13-14th. The conference always brings together a diverse and dynamic group of leaders from business, technology, venture capital, and media for two days of education, inspiration, and networking. This years event will feature session tracks and keynote speeches focused on several key market segments: Cloud, Mobile, Social, Energy and Life Sciences. Fifteen panel sessions will cover the hottest issues for industry participants, customers, and investors in these high profile industry sectors. Six Keynotes and Breakthrough Thinkers, representing the top of their industries, will share presentations and unique views on critical topics.

A session that seems of particular interest to IEEE ComSoc Community readers is The Next BIG Mobile Trends and Opportunities. It will be led by a top analyst- Rajeev Chand, Managing Director, Rutberg & Company.   Speakers will explore the opportunities and challenges that are of most interest to wireless carriers, software platform companies, and investors.

The panel will try to answer key questions like:

-How are mobile operators adapting to the new value chain?
-Where are venture firms placing bets? What are the key technology choices going forward?
-How will mobile ecosystem participants will adapt their strategies as mobile networks evolve to 4G with many more connected smart devices?
-What are the opportunities created by these ecosystem changes?

Session attendees will gain insight on what to expect as mobility becomes ever more mainstream. Expect to gain a better perspective on how the wireless industry will evolve and cope with the expected deluge of mobile data traffic that’s already upon us. Is mobile video (finally) the killer app?

Related Activity:   Mobile Spectrum Re-Allocation has been the hottest topic in the last five years on the IEEE ComSocSCV Discussion list reflector (open to all IEEE members). It will be explored in depth along with other WiFi/3G/4G issues by VPs of Broadcom and Qualcomm at  ComSocSCV’s May 11th meeting. More info + RSVP at: www.comsocscv.org

There are more WIreless/Mobile TiECon sessions as well as panels on Cloud Computing that should be of interest to Communications professionals, especially start-ups.  At this year’s conference, TiE is introducing a new program called MentorConnect where seasoned entrepreneurs from TiE’s base of Charter Members will provide small group mentoring to TiECon attendees.

Another attraction for TiECon 2011 is an expanded  Innovation Expo, which will bring startups, universities, and research labs of large companies to show their innovative products and technologies to TiEcon attendees. We’ve just been informed that the Innovation Expo is oversold!  There will be over 120 booths in the various technologoy verticals. Plenty to see, investigate and learn many new things!

TiE 50, the 3rd annual awards program to recognize the “Top 50 Startup Companies”, will be a prominent part of TiEcon.  The 50 award winners selected from 291 finalists and over 1,600 nominations, represent the most enterprising startups of 2011 in five sectors that are driving today’s economy: Internet/Social Networking, Software/Cloud Computing, Life Sciences, Wireless/Mobile and Energy/Cleantech. The TiE 50 judging process was designed with meticulous planning, screening and judging by over forty prominent entrepreneurs, venture capitalists, corporate executives and other domain experts.  The TiE50 2011 Winners in the Wireless/Mobile space are:
Avnera Corporation, Bump Technologies, Cinemacraft Pte Ltd, E-Senza Technologies GmbH, Luna Ergonomics Pvt Ltd, mFoundry, Inc, Roamware, Inc., SmrtGuard Security, Stoke, Inc., Zenprise

We expect many of these award winners to be rising stars in their respective fields. Previous award winners have done quite well. The complete list of 2011 winners is at: http://www.tie50.net/TiE50Awards/2011Winners_List.asp

For more information about TiECon:

You can find more information about TiECon and register at www.tiecon.org. The keynotes, panel sessions, and other events are all listed there under the agenda along with speakers/moderators.

Note:  IEEE ComSocSCV has had a strategic alliance relationship with TiE-Silicon Valley since January 2010.  We have had 2 joint technical meetings (on networked video and transforming academic research into commercially viable technologies) and one hugely successful workshop (on mobile apps and mobile infrastructure).  IEEE is a marketing partner for TiECon and IEEE members get discounted registration for this conference.