Upstream, without a paddle

A Palladium Club uber-mega-value reader alerts me to yet another good real-world illustration of what a dearth of acceptable upload capacity in the UK (or any other) market means for the economy. In this desperate post to the ThinkBroadband forum, a man with a lot of data is willing to pay a healthy hourly rate to be able to upload it to the CDN his business uses. D'oh, wrong country. But perhaps a diversification opportunity for the likes of Kinkos/FedEx.

Does Facebook cause brain damage?

Over dinner with a friend last night, the conversation inevitably turned to Facebook. We both found that we were experiencing the same quizzical phenomenon. When people that we have communicated with over the years quite happily via email/SMS/IM suddenly turn up on Facebook, they seem to frequently adopt this as their communications platform of choice, in many cases forsaking others. What's even more quizzical is that, when I answer a Facebook message (which forwards to my email) from my email account, substituting the sender's real-world email, they often revert to Facebook once again to reply. Not only are people happy to have their communication siloed in a Facebook cloud, they seem downright determined to keep it there.

Virtual coffee break - 7 July

Much to do, so here's another collection of semi-random shards.

I should post pictures of distressed street cabinets more often. The response has been good judging from traffic, and one equipment vendor's branch office in Germany seems to have ground to a halt for ten minutes or so this morning. The Flickr photo is up to 79 views and counting...

A few minutes ago I happened to catch the end of the BBC World Service's Digital Planet show, coming from Japan. In addition to an interesting segment on home-made game software, there was a (thankfully audio-only) demonstration of Daiwa House's intelligent toilet technology (what it is about companies with Daiwa in the name?). If Graceland had only been equipped with one of these, we might not be King-less today. Joking aside, I think this illustrates pretty well that the range and number of networkable devices is probably a lot greater than most people think, and should not be poo-pooed.

I recall a couple of years ago, James Murdoch made a speech in which he said something along the lines that if OFCOM were efficient in its mission, its offices would eventually be empty. Seems now that the Conservatives want to help in the packing to speed things along. I guess industry consultants may have to move directly into industry in future without the intermediate tenure with a river view. (Okay, I know a fair number of OFCOM folks and respect the job they're doing, but I couldn't resist.)

The British Chamber of Commerce reckons the worst may be over, but note the five key words: "Talk of recovery is premature." Equity market cheerleaders should listen. Meanwhile, Ireland is apparently (Experian, why are your press releases not linkable?) seeing a net contraction in numbers of businesses, with companies going into receivership nearly quadrupling over H1 2008 levels.

Random thought of the morning. I really like what SamKnows is up to in broadband performance monitoring, but I wonder if it's also possible to achieve some of the same objectives at a more macro level via the massively distributed nodes of existing P2P systems such as BitTorrent or, better yet, Skype?

Lastly, and most importantly, I have a value proposition for you. I am honored to have been asked to be on the advisory board for eComm Europe 2009. (Disclosure: I have no economic interest in eComm or any associated entity, nor am I receiving remuneration of any sort. My advisory role is largely one of kicking around ideas, suggesting speakers and making a few introductions.) I think it's shaping up to be yet another great event. The organizers have kindly extended a 20% discount to EuroTelcoblog readers - the promo code is "Enck" (without the quotation marks, obviously). The Super Early Bird offer expires this month, so book now to avoid disappointment.

It's always the unlikely posts...

My earlier post of the photo of a forlorn Virgin Media street cabinet in East Dulwich has generated a surprising level of traffic, and also an email from someone at Virgin asking where it was. I have responded thus:

"Okay then, as a loyal Virgin Media customer, I am expecting a big discount for helping you to take inventory of your network in the way that your own field technicians can't seem to manage. The box is on what I would call Forest Hill Road, but which may in fact be Peckham Rye Road (no signs - probably stolen by the locals), across from Peckham Rye, near the intersection with Barry Road."

Anyone with access to Google maps should be able to find this - just look for the open cabinet with leaves from last autumn trapped in some dense spider webs. Perhaps the reason they haven't noticed it is that there only seemed to be three or four homes connected (whose addresses I could read clearly on the bright yellow tags attached to the coax).

Let me make clear that I am a loyal and happy Virgin Media customer, but when I see things like this I wonder what the hell is going on. If I ran a highly leveraged company whose only differentiating factor was the quality of its access network versus the crippled, neolithic copper pair of the incumbent, I would be outraged to find a local node a) so exposed to vandalism (which miraculously, the local vandals seem to have been too stupid to commit) and b) so under-booked.

On the positive side, I have posted photos of this nature before and received no response at all from Virgin Media. So maybe this is a positive development. Then again, the node in question is half a mile from my home, so why should I care? What's in it for me? Will the company give me three months free service for my civic-mindedness? I doubt it, but I am open to being surprised. So much for "crowd-sourcing."

Similarly, I suspect that the person who contacted me is probably an underpaid Virgin Media employee with a good heart, who actually deserves to be promoted for caring enough to have eyes open in the first place. Sadly, I suspect that being a conscientious employee at Virgin Media may be an experience similar to being a conscientious employee pretty much anywhere else in cultures (the UK being one) which don't value customer service. Like peeing yourself in a brown suit - it gives you a warm feeling, but no one notices.

The most dilapidated Virgin Media box ever

My talk from Manchester last week

Please excuse my appalling Freudian slip, placing Sand Hill Road erroneously in Mountain View rather than Menlo Park. I had Google on the brain. There are a couple of other mindless misstatements here, but on the whole I was pretty pleased with this one (slides are here). Also check out Dirk van der Woude and Benoit Felten - hell, just watch them all!

James Enck @ NextGen09 from MDDA on Vimeo.

Wednesday omnibus

So much to do, so little time. Here is a semi-random selection of bloggables.

Yesterday, I listened in to my friend Benoit Felten's excellent Yankee Group webinar "Fiber to the Home: Making that Business Model Work." Benoit and his colleagues built a high-level, generic model in order to flex the key assumptions (passive connection cost per home, customer uptake, cash margin per customer, ARPU) of the business case and test the impacts on payback periods. Consistent with other business cases I have seen, they found that the greatest sensitivities around payback period were initial passive connection cost and customer uptake levels.

They were up front about the fact that each project will inevitably have unique variables (soil quality/terrain, population density, ratio of MDUs, consumer purchasing power, etc.) which would influence each of the inputs, and consequently payback periods. Which is an obvious and essential point to stress. It's annoying to see sweeping generalizations in the media about the "huge cost" of fiber deployment, because each city, each street, each building, will present its own unique set of challenges and opportunities. In some situations it will make for a robust business case, in others payback will be a long time coming. Them's the breaks - it's physical infrastructure, like it or lump it.

Anyway, it was a good webinar, and I particularly like Benoit's emphasis on wholesale access to third parties. If you're an altnet trying to generate a return on a fiber deployment, and you can only achieve 30% initial uptake on your own retail services, why not open up to third parties? You generate additional revenue and margins in the early days, and if your customer satisfaction levels are superior, you will attract churning customers from the third parties in the long run. Let your wholesale customers do the hard work of converting and educating more risk-averse customers, and then win in the end through being better at customer service. I think it's an idea worthy of investigation, but we haven't seen any examples thus far.

At the more granular end of fiber network planning, my friend Kai Seim in Germany, who can tell you in a heartbeat how the cost per meter to trench fiber can change from one soil type to another (it's infrastructure - the physical world really matters), has published a great study on fiber activities in the German market, which you can purchase here for the nominal fee of €49.90. I have read it, and it's worth every eurocent.

And if you're feeling really gluttonous for market data, check out the OPTA analyst meeting presentation from Monday.

Elsewhere, France Telecom has been busy, joining the refinancing rush, conserving cash through a voluntary partial scrip dividend (I think dividend yields are generally overhyped - if you have genuine conviction on the company's strategy, you should be happy to add more equity exposure rather than suck out more cash during constrained times), and stamping its feet over ARCEP's ruling of last week. I shrug Gallically. Also check out this new presentation from FT on LTE - which once again underlines the backhaul timebomb.

The refinancing stampede continues unabated, with the market more than happy to take part. Word on the street is that Wind's €2.7bn issue is heavily oversubscribed, and SES Global's €650m deal was 5.8x oversubscribed. So much for cash sitting on the sidelines.

Long overdue consolidation in Germany seems to finally be materializing. United Internet/Freenet has been passed by the Cartel Office, the Hansenet auction seems to be moving toward conclusion, and today the FTD reports KDG is interested in another chunk of Orion.

Lastly, and on a down note, I checked out last week's report from Transparency International on corporate anti-corruption practices, and sadly telecom doesn't rank very highly.

Returning from the new Digital City State

I'm on a train returning to London from Manchester, where I was very kindly invited by the Manchester Digital Development Agency to give the opening presentation at the NextGen event. For those who didn't catch the live stream yesterday, I think there is going to be a replay, or perhaps an edited highlights version, or both, available after the conference closes today (I hope so, because all the presentations were of a very high caliber). I will post my presentation slides, once I'm on something better than a temperamental HSPA connection. (UPDATE: The slides are now up.)

Without getting too self-indulgent (now apparently my hallmark) or boring anyone, here were the main points I sought to address:

• The current crisis is a very deep hole, from which we will need a lot of time to extract ourselves.

• Ironically, this gives us greater license to consider strategies which might have been dismissed previously, in the interest of gaining some control over the direction of our future.

• However, history has proven that the future is hard to predict, particularly when pundits have attempted to dismiss new ideas or to predict that certain innovations have no application. Some of my examples are found here. In almost every example I cited, the pundit in question was a genuinely respected and successful leader in his field - but dead wrong about where things were headed.
  

• More frustratingly, some innovations end up being used in a dramatically different way than was originally intended (Warfarin, nitroglycerine, SMS, email), with profound consequences.
  

• Other innovations arise prematurely, only to die (or be killed in this instance) and be revived later.
  

• Expedient, commonsense decisions can often be completely wrong, and sometimes historical revenue models which should be obvious for new businesses (in this case sender-pays data, which commercial broadcasting had used for 60+ years) are initially missed.
  

• So we must be very careful when today we hear that there are no visible applications which could really put 100Mbps symmetrical connections through their paces. Beyond being short-sighted, the Ford vs. Ferrari comparison in the UK is a canard for the ordinary consumer. Your choices are a blue Ford (various shades available, fifth gear often disabled), a red Ford, or staying home.
  

• The process of electrification in the US poses some interesting questions. Here I reproduced a chart from a 1980s study (Tim - this has proven to be the gift which keeps on giving, thanks!) which shows average electricity consumption doubling between 1950 and 1960, and again between 1960 and 1970, though what's really interesting to me in the chart is that sub-categories of consumption increase dramatically over that period. What this really reflects is that entirely new categories of appliance were being created, each with its own parts supply chain, assembly infrastructure, sales, distribution, maintenance, insurance and finance functions - in short, a proliferation of ancillary functions and jobs which made these appliances affordable and mainstream. There is no doubt in my mind that the original architects of universal electrification didn't envisage this happening, nor could they imagine what came after 1970 (set-top boxes, VCRs, DVD players, PCs, portable media players, cellular phones, broadband modems, WiFi routers, game consoles, ad nauseum). We're lucky that they didn't try to plan for the impossible, and I don't seem to be alone in thinking so. Certainly, it would be hard to find many in the industrialized world who would argue that we should have planned our grids not to scale beyond the consumption patterns of 1950.
  

• Thus, the option value of fiber will only be demonstrated definitively after it is in place. Prior to its arrival, it's easy to dismiss its contribution and utility, because it doesn't exist. As any dealer of exclusively red and blue Fords will tell you, no one ever comes in the dealership asking for a Ferrari.
  

• However, I would stop well short of characterizing fiber as a "faith-based initiative" - connectivity policy alone is not enough, as has been demonstrated in more advanced markets (see the postscript [in red] to this post).
  

This final point is what intrigues me about what is happening in Manchester and a number of other northern English cities/regions, representatives of many of which were in attendance at the conference. It is clear that superior connectivity is a key issue in attracting and retaining new economic activity and creating sustainable employment, but it is far from the only one. Public transport, amenities, law & order, educational strategy, tax policy, culture, regulation and the built environment are also important factors which would be among any business' decision criteria. It also helps if there are positive externalities to add to the momentum, in this case the relocation of BBC functions to nearby Salford.

I think the people involved in these cities genuinely "get it," but once again the range of factors at work here is infinitely more complex than the range of issues a telco is interested/experienced in, and the potential benefits to be captured are also well beyond its scope. Which calls for a different framework and approach, and probably leads to misunderstanding and conflict in the short term. Afterall, what we've really got developing here is the new Devolved Digital City States, competing aggressively for new skilled residents, businesses, and an enhanced tax base. Broadband can't be the sole ingredient of the answer, but it will be a significant one. In the Q&A I cited a case study I saw several years ago dealing with St. Louis and Chicago, and the fact that the former was hostile to railway development in order to protect the vested interests in river transport, while the latter became the focus of investment and subsequently reaped the rewards. I like both cities, but there is no comparison between them today. We underestimate and underinvest in the option value of infrastructure at our peril.

Trash to the curb

I'm honored, really. Stefan, over at IntoMobile, deigns to give us insight into what criteria he uses to reduce his RSS bloat in an attempt to become a better blogger, reader, etc. Apparently he has concluded that he should unsubscribe:

"This is a classic case of 'blog that covers a certain niche turns into a blog being more about the author’s life that what it was originally about.' EuroTelco used to ask hard hitting questions about the telecoms industry, now it’s turned into a personal diary."

I think those of us with a respect for English grammar would say "than what it was originally about," but apart from this petty criticism, I'm genuinely sorry that Stefan feels let down. Of course I'm very concerned about the opinion of any blogger who would take the time to selflessly write a series of articles about how they're trimming their RSS feeds, and why. I also enjoy licking sandpaper, eavesdropping on the conversations of self-obsessed gadget bores, and counting in-bound links from IntoMobile (I'm currently up to three).

Not that I owe an explanation, but I'm in the process of starting up an investment company, which is understandably taking the majority of my time. In our potential investment pipeline are a number of situations which would form the basis for many interesting posts on critical issues facing the industry, but in my position, it is inappropriate to telegraph these sorts of things in public, and in some cases the situations are not even public, so saying anything would violate NDAs.

This blog is not, and never has been, a source of income for me (contrast this page with the ad-encrusted IntoMobile), so given the choice of how to allocate my time and energy, I am naturally focusing more on activities which are for the time-being. I've been pretty lucky over the past five years to have a large number of readers who were not only interested in the "hard-hitting questions," but also the person asking them. To think that the two could, or should, be separate in a personal blog is absurd, so I'm happy to see anyone who doesn't grasp that unsubscribe.

Live Monday from Madchester

Turns out the Manchester event is going to be webcast live from 1:30 PM UK time (that's 2:30 PM CET, 8:30 AM EDT, 8:30 PM Hong Kong), with me leading off, followed by Dirk van der Woude from Amsterdam, and a recuperating Benoit Felten from Paris via video link. Should be good fun.

Link to event stream

This treadmill goes to 11

Once again I find myself starting a small post with an apology for the lack of output, but suffice it to say I am struggling with bandwidth issues. Last week I attended two conferences in two days, and they might as well have been on different planets. Both were well-run and very interesting, but the audiences could not have been more different.

Open Mobile Summit: audience - older, very technical; laptops - many; WiFi - yes, free; iPhones - near-ubiquitous.

DB High Yield conference: audience - younger, not very technical; laptops - I counted two; WiFi - none; Blackberries - 99% penetration.

At the DB event, the organizers had very kindly set up a mobile charging station, with sixteen chargers arranged in four rows of cubicle enclosures. Throughout the day, being a keen observer of tedious things, I passed by the charging station several times, just to see who was using it. One quarter of the charger connections were for Blackberries, and always hotly contested. Three or four were "universal", which I used to charge my HTC, but which a number of Blackberry users also eventually figured out would work for them. There were three spots for Sony-Ericsson, which I never saw being used, and four for Nokia, which also had no takers throughout the day, as far as I could see. There was one iPhone charger, which I saw being used only once.

I guess none of this should surprise me, but perhaps because of my visit to the Open Mobile Summit the previous day, it started me thinking about mobile segmentation, brand profiling, and user behaviors, and how non-obvious some of this stuff can be. Ostensibly, the DB conference should have had more iPhone users because of the demographic, and maybe they are iPhone users on the side, but their weapon of choice is clearly the almighty Blackberry. I also continue to be amazed at the lack of participants from the finance world in industry-facing conferences such as Open Mobile.

One other takeaway was the stunning graphic from Kenneth Karlberg of TeliaSonera, on slide seven in his presentation at Open Mobile, which tracked data users and volumes consumed on Telia Sweden's mobile network in December 2008. We knew anecdotally that iPhone users are different, but it must be a profound source of embarrassment to others in the space to see the difference illustrated so clearly, and it underlines a comment from a mobile app developer at the conference that, as far as he can see, the only investment going into the mobile app space is into iPhone apps. The rest have a mighty hill to climb.

Anyway, now on to the original thing which brought me to this post - shameless self-promotion, once again. I am looking forward to presenting at the Next Gen Manchester Euro Conference on Monday. Looks like an interesting program, and I'm looking forward to catching up with a couple of old friends and making some new ones. I have peppered my presentation with some fascinating quotes from history on why certain innovations were impossible, and why no one would want this or that. I think you may know where I am heading with this tactic...

State of the art telephony, 1951

This piece may buffer a bit, and the dramatization at the beginning is very 1951, but the other footage is amazing.

Stranger than (pulp) fiction

Yesterday, I made an offhand but macabre joke to a colleague about the possibility that all the soon-to-be-dormant GM plants could be converted to data centers. Today the same colleague discovered something I had missed - a paper mill to data center conversion in Finland (press release is here, and additional commentary on the last page of this Stora Enso Q1 report), by none other than the Big G. Maybe I'm on to a nascent regeneration trend...

A green (bamboo) shoot

I spent last week with my children in a tent in Suffolk, pretty much disconnected and oblivious to the news. The only green shoots I saw were dandelions. I kept in touch with the news enough to know that, unsurprisingly to me, most of it was bad. The recent reporting season in Europe has confirmed, at least for me, that the Accident & Emergency wards of European capitalism have taken significant pre-bookings for emergency reconstructive surgery on a number of bloated LBO monsters (I could point fingers to various corners of Europe, but will refrain), which should keep lawyers and advisors busy for months and years to come. Just to clarify, in many of these cases, I think that the assets are good or great, but the capital structures look insane with the benefit of hindsight. So, the hard work begins...

Yet, it seems that sanity prevails in at least one small pocket of the globe, far from Europe. If you're feeling jaded and need a bit of relief, consider my friends at City Telecom in Hong Kong, or HKBN, as it is commonly known locally. Here is a company which has long pursued a singular vision of superior connectivity, has come from virtually nowhere to be number two in broadband, has grown both ARPU and EBITDA margin in the past six months, generates cash, pays a dividend, has leverage of only 0.3x and, for its small size, has an extraordinary attitude towards fostering the next generation of - wait for it - people. I was privileged to visit the company on a recent trip to Hong Kong, and can testify that the culture is young, disruptive, frugal, and above all, proud of what it has achieved so far and ready for much more.

And in case you didn't know it, the punchline here is that this company is devoted almost entirely to fiber access. We can argue endlessly about the unique economics of Hong Kong housing density and terms of access for service providers, which are undeniably key to the KPIs behind the story, but if it's the economics alone which are so compelling, why is this the only company starting from technical scratch and sticking to its guns throughout? Favorable economics may be meaningless in the absence of the vision and informed conviction necessary to seize upon them. So, it made me smile last week when I saw the recent results, and once again thought, "Yes, Virginia, there is a business case for fiber."

From a tent in East Anglia

That's where I am - but rest assured it's a family holiday, not a life choice... I have sporadic internet access, thanks mainly to the wonders of 3G and a cheap portable power supply. My intention was to lie low and not do much of a professional nature, blurry as the definition of that has become, but a Palladium Club mega-value reader sent me a link to this blog today, and I thought it deserved "fast-track" attention. It's an intriguing and revealing account, which seems too surreal to be anything other than genuine, of life within a (presumably UK) telco, though I hope for the sake of the author that it does not resemble the Reginald Perrin saga too closely. The accounts of meetings confirm my skepticism around the real prospects for "telco transformation" - it's a culture thing, clearly I wouldn't understand...

Mierda, ventiladores, televisión de pago, y la implosión económica

(Okay, I know I haven't been keeping to my word on posting frequency...)

It's interesting to listen to the differing takes coming out of companies in Q1 on just how defensive pay TV might be in the economic downturn. It seemed to me that UPC, for example, showed much stronger performance in its pay TV numbers than in broadband, and for my money Virgin Media also performed better than I had expected.

Then again, maybe it's a matter of degrees. What might things look like if the economy got really bad, as is the case in Spain? GDP run-rate decline of nearly 8% (quarterly decline, annualized), unemployment heading for 20%, that sort of degree of badness.

Well, a picture is emerging from Spain which is not particularly encouraging for pay TV bulls. I concede there are likely to be all sorts of drivers at work here, such as household creation, repossession rates, etc., which could cloud the numbers, and we may see something different in next quarter's results. However, on the basis of the numbers reported by key players in the Spanish market, pay TV no esta caliente.

Telefonica's numbers showed that ULL and wholesale DSL in Spain grew by 119k, which is 5.6% sequential growth. Telefonica's own retail base grew by 46k, and Orange was flat. ONO, which reported today, added 12k broadband customers in the quarter, which is seqential growth of a little under 1%. However, in pay TV, Telefonica's Imagenio lost 7,700 customers, ONO lost 23k, Orange claims to have grown IPTV subs by 12k (but as it looks like 6Mbps and national calls is priced the same as the above plus IPTV after the special offer period, does this really count?), and Prisa's Digital + satellite offering lost 24k and suffered a 30% decline in pay-per-view ARPU.

So in summary, on the basis of these numbers it looks as though broadband overall grew by 177k, and pay TV contracted by over 43k, at least among the companies cited here. I'm cautious about trying to draw too many conclusions from one quarter, nor am I sure that anyone should really care, except that, in snapshot form, it appears to confirm my own suspicions about consumer behavior when forced by events to confront what they really can and can't live without.

Incalculably crap

A true story:

Four people sitting in an office with their personal laptops. One is running Vista with Office 2007, one running XP with Office 2003, one running Office for Mac, and one (me) running XP with Open Office. Our Office for Mac user opens an Excel spreadsheet (originally created on a Windows machine) which contains several XIRR formulas, and for no good reason, the calculations are borked - everything is hard-coded. The XP Office 2003 user then opens her copy of the same spreadsheet, and gets the same result. Office 2007 man has a go, and also fails. As a final act of desperation, the Open Office user opens the Excel file - and that's right, the formulas work flawlessly. Saves file, sends back to other users, all of whom can now use the sheet as it was intended. 

This has happened twice, and none of us can explain it. 

If not for whatever magical healing fix Open Office seems to have applied, we would have come to the depressing and unavoidable conclusion that the sheet would have to be rebuilt - an unappetizing and time-consuming proposition. Rather than rant about Microsoft, let's just let the facts speak (very loudly) for themselves.

Openly shameless self-promotion

The good people at the Open Mobile Summit have asked me to chair on the first day of their upcoming event in London, June 10 - 11, and I have agreed (you can check out some of the presentations from the previous event here). Hope to see you there, so book now to avoid disappointment! 

Fala Portugeek?

Looking through the ZON Multimedia Q1 results, I came across a reference to a study carried out by the Portugese regulator, Anacom, into broadband performance.  The Anacom website has some awesome material in it, and I have always been perplexed as to why small markets like Portugal and Denmark have regulators devoted to market research, while some notable larger markets produce next to nothing (you know who you are!). 

Anyway, I'm not 100% sure that this is the study they're referring to in the release, but nevertheless I stumbled across this very detailed report from last month, detailing performance of both fixed and mobile broadband. It's in Portugese, but I think most readers will be able to get something out of it, or at least enjoy the nice graphics. For those less adventurous, a summary of the findings is here. I particularly like the observation:

"With regard to upload speeds it is seen that the speeds of mobile technology are higher than those provided by fixed technology."

I've got a 3G dongle which typcially sits idly by at home, as I ponder just how slow a cable modem upload can be. It would be nice to bond the two together somehow.

No bandwidth please, we're British

BT's CEO got the virtual equivalent of a mass Glasgow kiss (definition) for his recent Ford vs. Ferrari comments. But events have proven he's partially right - only 75% of Virgin Media's new customers want 10Mbps or more, suggesting that the other 25% are content with 2Mbps. This segment of bandwidth prudes could be an incremental growth target for UK ADSL players, as ADSL has proven it's fully capable of delivering 2Mbps, mostly (see point 1.8 on page 3). 

But they'd better hurry - Virgin no longer even markets its 2Mbps product, and the remaining 2Mbps customers are going to be dragged kicking and screaming onto 10Mbps packages from this month. 

Nice to see the cable industry finally doing what I have always believed it could and should do: use its network advantages as a blunt weapon to batter telcos with (Telenet results also show a similar trend and tone - 78% of subs are >12Mbps). In cases where the incumbent is unwilling or financially challenged to respond (4.8x leverage is a steep hill to climb), things are going to get very, very ugly. 

This does nothing to bring closer the demise of the bete noir of asymmetry - this person felt strongly enough about the issue to devote a blog entirely to it, but apparently gave up out of despair. (I recently set up a YouTube channel, and people, let me tell you, the upload times are excruciating.)

Still, it's interesting to ponder that telcos who have enjoyed relatively benign financial climes in days-gone-by avoided making the investment in preference for M&A adventurism, share buybacks and dividends, only to find themselves now under duress to play catch-up in much less forgiving conditions. I've heard this story somewhere before. 

More fun with charts

Well, it's Friday afternoon, and if you're being honest with yourself you probably haven't done much work this afternoon anyway. So take a few minutes to re-live the last ten years of trading in Amazon and eBay shares (eBay shareholders won't like the last segment, but then they probably know that anyway). Go to this chart, right click and select "Animate" and watch the lines dance. Apple and Microsoft is another good one.

Five pretty pictures

Internet infrastructure stocks are on a tear, indeed they are veritable "pitbulls on the pantleg of opportunity" following a set of strong Q1 results and broadly encouraging guidance. Bear in mind that if you view these charts after this writing - 30 April, 2009 - they may look very different, but what they show now is Akamai up 10% today, Savvis hanging tough after a 16% rise yesterday and having more than doubled since its March lows, Switch & Data has also doubled, Rackspace up 74% since early March, and Equinix up 68% since its own March nadir. I know a rising tide generally lifts all boats (NASDAQ up 41% over the same period), but these have gone airborne. We're back to "picks and shovels" here, but I think this time the market has it dead right.

The magic of flipping a light switch and escaping the dark is experienced at home, but the real magic takes place in an unseen power station miles away. The magic of Facebook actually happens in a number of deeply un-sexy, harshly-lit, sterile rooms with well-above-average air conditioning. Without the humble server jockey, tending his flock of racks, the code geeks got nothin'. Our dependence on web services of various flavors will inevitably intensify from here (especially if we end up working and studying more from home), and I would be very surprised if the critical infrastructure components of what the father of the internet, Senator Ted Stevens, once sagely called "a series of tubes", did not continue to grow strongly throughout this downturn and beyond. I think this pie could get very high indeed.

Teleporkalypse Now!

Today my elder daughter came home from school with log-in details for an online virtual classroom service, which she had never heard mention of before. It's kind of a private email/virtual homework site, a sort of very low-quality version of Facebook. Part of me suspects that this has been in the works for months, is for purely educational purposes, and that the timing is just coincidental. Another part of me thinks that some bright spark is ahead of the curve and is expecting a lengthy period of school closures. But that may be giving the local government too much credit. Tomorrow will tell, perhaps. Meanwhile, I continue to monitor newsmap and HealthMap with interest. I'm increasingly fascinated by how decentralized news flows can inform, and perhaps mis-inform, in times like these.

UPDATE (in DEFCON 1 flaming red): What's interesting about the Bloomberg article is the observation that Obama wants $1.5bn to deal with an outbreak. So, it takes a paltry $1.5bn, practically a rounding error by recent standards, to deal with something which could cause the deaths of tens of millions, when dealing with the fallout from fictitious bank assets apparently costs $X trillion - and counting. No wonder Mother Nature is out to kick our collective ass. We have achieved Koyaanisqatsi, on steroids.

LSE study on the benefits of investing in digital infrastructure

Put this in your pipes and smoke it (hat tip Jim Baller).

"While the report does not advocate a specific level of investment it models the benefits of £15 billion spent across the three areas:

• £5 billion on broadband networks (creating or retaining 280,000 jobs) with spending focused on getting broadband to unconnected areas, increasing network performance in low-speed areas (3 Mbps or less) and encouraging household take-up of broadband. Spurring more and higher speed broadband would boost business productivity.

• £5 billion on intelligent transport systems (creating or retaining 188,000 jobs). ITS would also improve traffic flows through measures like adaptive traffic signals and electronic tolls and provide travellers with real-time traffic information, The report also finds that extra spending on ITS would deliver environmental benefits and make the country more productive.

• £5 billion on developing a smart power grid (creating or retaining 235,000 jobs). By using two-way communication and sensors, the report argues, a smart grid will deliver power more efficiently and reliably. Houses could be fitted with smart meters which allow people to use electricity at cheaper times of day and which could work with smart fridges or washer-driers to perform high-energy cycles at times of low demand. One US study suggested this could cut 10 per cent from utility bills. The smart grid would also allow the deployment of new greener technologies including plug-in hybrid electric cars."

Unintended consequences

Much crowing from the content industry over last week's Pirate Bay verdict (hardly surprising when you hang out with the judge), but is this really the sort of reaction you want to prompt?

Hey you, get on to my cloud

Check out these piping hot videos just out from Akamai on the environmental benefits of cloud computing.

Semi-random links drive-by - 21 April, 2009

Just dashing off to a meeting, but here's a few tidbits of interest(?).

Take the Design Council challenge and help take the profit out of "mobile theft for fun and profit."

Fitch Ratings (annoying registration required) is concerned that DOCSIS 3.0 deployments could kick some telco butt, at least in the UK, Netherlands, Belgium and Portugal. I agree, though the asymmetry problem is getting worse.

UK consumer misery loves company - more online time devoted to social networking, less to shopping.

Last night I heard a good joke:

Q: How many people work at BT?
A: About half.

If you're looking for something to do over your lunch hour, why not give a listen to some classic songs reinterpreted, excruciatingly, in Esperanto? Volare is particularly scintillating. With support like this, I now understand why I have only met one Esperanto speaker - ever.

Eyes Wide Open

There seems to be some major outrage about the IPR issues surrounding Skype, but I'm happy to say that I reported on this way back in 2006 - as always, read the fine print...

As I quoted at the time:

In November 2003, Skype signed an agreement with a software development company [could this be the one?] which granted Skype a perpetual non exclusive license on its software, with exclusive use of the software for the limited purpose of providing P2P telephony, multi-directional video communications between end users via the internet. The founders of this software company are also founding shareholders (and senior management) of Skype.

The Joltid license is something I have mentioned frequently in presentations, but it has always seemed to me that no one has ever heard about this before, and people have always reacted with astonished expressions. The 2003 - 2005 Skype filings are still up, by the way, you can find them here.

I've always assumed that beyond the long-term commercial rationale for housing the Fast Track IPR in another company, it was also a shrewd defensive move given the legal onslaught against KaZaA at the time. It still doesn't answer the question as to what eBay management were thinking (or smoking) at the time, but it's clear that they felt a $4.1bn level of comfort with the arrangement.

Sharper vision

I know, I've been a baaaaad blogger recently, but I won't bore you with the reasons why. I have, however, resolved to mend my ways, so here's a micropost.

I've been working on a freelance project recently which seeks to explore some of the ways in which broadband, or whatever we end up calling it, can spur innovation. I'm trying to focus on non-trivial examples where broadband is either a critical enabler, but not the end service itself (as in the smart grid), or where the existence of broadband forces innovation elsewhere (as in the prevalence of cloud-enabled applications, which forces innovation in the data center).

My point of departure in thinking about this was a conference I attended a couple of years ago, where the CFO of an incumbent telco in Europe was asked about the rationale for FTTx deployment in the company's home market. The response was that the pay TV market in the country was deemed to be suitably competitive already, so it was difficult to make a case based on return on investment. Ergo, fiber = video. I am trying to write something which prompts a move away from this sort of thinking. Anyway, we'll see how it turns out.

Meanwhile, here's another item for your list of reasons why fiber is good for you - it improves your night vision.

Pimp my grid

This may have been blogged already by one of my esteemed Dutch friends closer to the action, but sadly I have been too absorbed to notice (sorry guys - if you have, send me a link to point to), but I just stumbled across a link to a presentation delivered last month in Italy by the Almere Grid, which I wrote about here in those heady days of 2006. Looks like a predictably interesting piece of joined-up thinking from the Netherlands, combining an access strategy, shared backup services for SMEs, academic research, and city planning. It's ironic to discover that Almere is twinned with Milton Keynes...

Take the U.S. broadband census, wherever you are

One of the email discussion lists I subscribe to has seen some coverage of this site, which claims to be collecting data on US broadband speeds, to what end I know not. Based on what I've seen, I only hope that the data they harvest is not employed in any sort of lobbying or policy-making initiatives. Here's why.

Initially it makes some credible-sounding statements about the role of broadband in American society:

"More and more Americans depend on high-speed internet service for education, commerce and entertainment. Broadband is the gateway to the information superhighway."

Hey, 10 bonus points for using "information superhighway" from the get-go!

It continues:

"BroadbandCensus.com is dedicated to providing the most comprehensive public and transparent collection of data about local broadband speeds, prices, availability, reliability and competition. You can help us fill the broadband data gap by Taking the Broadband Census."

Sounds good, happy to help. How else can I get involved? Maybe I should join the research committee, after all:

"The Research Committee will help the Broadband Census' efforts to map out broadband availability, speed, competition and price in an empirically sound fashion."

I like what I'm hearing. So, feeling patriotic, and in the spirit of courteous driving on the information superhighway, I took the test - twice, once claiming to be a Comcast customer, once as an AT&T customer (selecting "fiber" just for laughs). Here are my results:

Thank you for taking the Broadband Census. Your input is appreciated. It will help educate broadband consumers all over the country.

Promised Downstream Speeds: NA

Actual Downstream Speeds: 3.75299 Mbps

Promised Upstream Speeds: NA

Actual Upstream Speeds: 0.444 Mbps

Go to your ZIP code: 38117

Go to your provider's page: Comcast

Promised Downstream Speeds: NA

Actual Downstream Speeds: 4.33679 Mbps

Promised Upstream Speeds: NA

Actual Upstream Speeds: 0.476 Mbps

Go to your ZIP code: 38117

Go to your provider's page: AT&T

It looks like the data might go straight onto the site with no mediation. I checked out the 38117 ZIP code page after my test, and there was only one result from an AT&T user, who had given the service four stars - the rating I gave it in my second test. I have to assume this was my response. I could repeat the test to confirm, but I'm getting bored now.

There are huge problems here. I am in the UK, which is where I took part in the U.S. "census". As the speed test requires no identity assertion, and clearly does not exclude non-US IP addresses from taking part, I would assume that anyone can submit as many bogus entries as they want to, from anywhere in the world. Not that I would ever suggest or endorse such behavior...

UPDATE: Despite what I initially wrote and pathetic as it may seem, I actually did subsequently go back and take the test for a third time, claiming to be an AT&T subscriber again, but this time giving the service only one star. At this writing, the 38117 ZIP code page contains only two ratings for AT&T - a four star, and a one star, leading me to the inescapable conclusion that both of these results were generated by my bogus entries, taken at face value, despite coming from a legacy ntl.com IP address, which various free analytics tools clearly identify as being based in London. A for intentions, F for execution.

The pipe giveth, and the pipe taketh away

My last rant consciously avoided the symmetrical/asymmetrical connection issue, mainly because it raises my blood pressure to dangerous levels. But the tireless Om has written a nice piece on the issue, and I would like to share the pain. 

I'm on a Virgin Media 10Mbps package, with which I'm very happy on the whole. It is very reliable, and I often get my nominal download speed, and quizzically sometimes higher. I guess it doesn't hurt that if I scan the neighborhood for Wi-Fi routers, I get a lot of BT and Sky SSIDs, suggesting that the contention levels on my node may be low because DSL seems to have won battle for the block. 

In any event, the nominal upload speed on my package is 512kbps, making for a 20:1 asymmetry between download and upload. I have a JungleDisk account, and it's a great service, but my quick and dirty calculation is that my music collection, as it stands now, would take 22 days to back up to the cloud. 

That's painful enough to convince me not to even try, but perhaps I should, because this situation will only worsen as the asymmetry gap widens. Virgin's new 50Mbps package has an upload of 1.5Mbps, or an asymmetry of 33:1. So the consumer has a vastly enhanced capacity to acquire content, but backing it up via the wonder of cloud storage becomes disproportionately more painful, because the rate at which content can be acquired expands faster and in greater increments than the upload. 

Time for a new term?

I've been struggling to keep my head above water, which is a suitably vague explanation for the dearth of posts recently. One project I've been working on has me pondering broadband in the broadest sense. There's certainly no shortage of data to ponder, what with the newly released Akamai report, and last week's WEF Networked Readiness report and updated analysis from Point Topic. 

One thing I have been thinking about is the long-term viability of the word "broadband." As SamKnows has demonstrated in the UK, one man's "broadband" is another man's "dial-up" in practice. When we talk about a global average access speed of 1.5Mbps, as observed by Akamai, we're clearly a long, long way from ubiquitous broadband Nirvana for all. Still, it's faster than dial-up, so technically it's broadband. However, when I see Korea with an average speed of 15Mbps, 69% of all connections at more than 5Mbps, and 94% of all connections at more than 2Mbps, the term seems to be almost meaningless. 

"Broadband", as with terms to describe other previous technology innovations, such as the "horseless carriage" and "wireless telegraphy", currently seems to be defined more by what it isn't, rather than what it is. In a market like Korea, where virtually no narrowband exists anymore, what does broadband mean, exactly? Connected, basically. And more broadly, when a single term can be used in various markets to indicate a range of >256kbps to 1Gbps and above, isn't it essentially a nonsense? And don't even get me started on the asymmetrical vs. symmetrical connection issue. 

The video industry has been extremely successful in carving out a brand identity for HD as separate from SD TV - no one would claim that an analogue broadcast and 1080p are the same experience, though both are broadly defined as TV (okay, I know there's been a lot of marketing fudge in practice, but the standards say either it's HD or it ain't). My sense is that we need to start looking for a new term (or terms) to use in place of "broadband", both because it doesn't mean much today, and is likely to mean even less in future. 

Anyway, I'd be curious to hear any suggestions out there as to long-term alternative descriptors. Now it's time to crank up my broadband, get on the Infobahn and download some "talkies".  

Greetings from Hong Kong

This jet lag is a mo-fo, but what a place! Looking forward to catching up with my friends from HKBN this evening. Meanwhile, their ad campaign continues to deliver hilarious, but pointed, messages.

Let's peel that onion

On Thursday night, I had the pleasure of attending a presentation and discussion with the team from SamKnows, hosted by the Broadband Stakeholder Group. In case you weren't aware of it, it's the SamKnows database which powers availability checkers on broadband consumer comparison sites and some of the sites of individual ISPs in the UK. The discussion mainly focused on the outcome of its study of broadband speeds which form the basis for OFCOM's recent report.

This involved installing Linksys WRT54G routers between the routers and modems of over 2,000 volunteer panel members. Each Linksys router was modified with a client which would run a pre-scheduled routine of diagnostic tests on a number of performance indicators at times when the panelists' networks were judged to be idle, and report this data back to home base for analysis.

The results, as seen in the OFCOM report, show a wide range of variation in maximum and average speeds beyond what could be attributed solely to loop length (pages 30 - 32). Possible explanations include everything from poor customer network configuration and wiring problems, to contention, throttling, and insuffucient backhaul provisioning.

Some of the causes could probably be inferred from the data collected by the Linksys devices, but the mandate from OFCOM was to focus on speed. I find this ironic, in that I have heard members of the OFCOM consumer panel advocating incorporating other KPIs, such as latency, in ISP performance claims and marketing.

Sadly, there was no discussion of individual ISP performance in the session, despite the fact that SamKnows obviously has a high level of insight in this regard. My reading was that OFCOM is keen to avoid this sort of disclosure, because it might somehow distort the market.

I'm intrigued by how the outputs from SamKnows' data could be married with data from other sources, such as the Measurement Lab, Akamai, Level3, and the Internet Storm Center, to build a better-rounded real-time picture of what is actually driving the quality of the customer experience. I'm sure a number of telcos and broadband service providers wouldn't want to subject themselves to that sort of scrutiny for obvious reasons.

On the other hand, if exposed to the end user community, it could also be a powerful marketing and customer care tool. Transparency of performance claims, backed up by hard evidence from a number of sources, would be a great selling point, and if customers have some visibility on what's behind their service problems, presumably they will be less inclined to bombard call centers, especially if they can see that the problem likely lies either in their own CPE/network, or on the other side of the local access network.

Anyway, the thing that really excited me was that the SamKnows team clearly wants to expand their study methodology beyond the UK. I can think of a number of readers of this humble bloglet in various markets around Europe and elsewhere who would make great local partners, so don't be shy.

Not there, but definitely not square

I unfortunately missed eComm again this year, though I remain optimistic that I will make the trek one day. Looks like my friend Martin Geddes was also unable to attend, but sent an impressive video talk, which is definitely worth your time.

A modest proposal

I have a candidate for a new question on the "Life in the UK" test:

"Identify the defining characteristic essential to survival in the UK."

The answer, among the multiple choice options, is, "An enduring and inexhaustible capacity for absorbing disappointment."

Starless and Bible black

It's bad to feel that each sporadic new post on this humble bloglet requires an apology for the yawning gap since the last. But I fortunately have a good excuse, having been stranded in Africa for the past week. I write this from a net cafe in Freetown - please send money, and also the PIN to your bank account and credit cards if possible. 

Sadly, this is not true. I have been absorbed in start-up activities - investor presentations, brainstorming with my wonderful colleagues, work on the pipeline, meetings with external partners, and generally absorbing the astonishingly black newsflow which overwhelms us all (thus the pretentious title of this post - King Crimson, yes, but I had in mind the description of night in the opening line of the original source, Under Milk Wood). Pretentious it may be, but I think it fits, as we are in an economic night both starless (as in no star to steer by), and Bible black, because there are none more black.

If you can detach yourself from the fear and anxiety permeating the world at the moment, it's actually quite exhilarating to think that we, the human race, are in totally uncharted economic waters, though the climate change campaigners would yawn and rightly say that we've been there for years - it's only when there's an abstraction like money at stake that people sit up and take notice. 

For anyone born in the West after 1945, up to now, no matter how bad things were at home, the truly bad stuff always happened elsewhere. Globalization, however, is one hell of a leveller. How we handle the current crisis will define how we see ourselves as a civilization for decades to come, and indeed whether there actually are decades to come as a civilization. 

So far, I'm not encouraged. Seeing Ben Bernanke yesterday being interrogated by a group of Senators whom I would describe collectively as relatively ill-informed and inarticulate at best (one stumbled several times over the word "chaos", which he apparently encountered unprepared in the statement written by his aides, which he was obviously reading for the first time during the hearing) really drove home how little policy-makers seem to grasp the mechanics of the capital markets and banking world - yet they seem all-too-eager to prescribe remedies and feel-good soundbites. 

I also had the dubious pleasure yesterday of reading a note from Bob Janjuah of RBS, who is glumly entertaining to read. Cutting to the chase, he's talking about a 4% contraction in G7 GDP in 2009, followed by 0% in 2010, S&P 500 at 550 (vs. 765, where it closed today), multiple credit rating downgrades for "solid" investment grade credits, etc. I would add that the market still doesn't seem as worried at present as it should be about company pension blackholes, nor does anyone really know where a huge amount of senior corporate debt on the balance sheets of banks is actually marked - my guess is unrealistically high. 

And I had a fascinating meeting today with someone in the restructuring space, who made the interesting observation that the severity of the current downturn may eradicate the relatively rational, consensual niceties which surrounded restructurings in the previous downturn, in favor of more aggressive, irrational behavior and litigation. Good news for bankruptcy lawyers, but I'm not entirely sure what existing investors or other stakeholders can make of all this.    

So what does this mean to the average geek? Apple-obsession, gadget-porn, Google-worship/bashing, et al, are nice pastimes, but sadly they don't count for much in the very difficult meatspace we all occupy now. I have written previously about the defensiveness of telecom and the potential for meaningful reinvention arising from the current nightmare, but reading it again today, nearly six months on, it seems a bit contentious. I also produced a piece a few months ago, which was fundamentally satire, but underpinned by a genuine concern that this problem could end up being much more serious than anyone was willing to admit at the time. 

Between the two pieces, given the evidence to date, I would now have to clearly fall on the side of the latter. In other words, while I firmly would like to believe that mobile and broadband are fundamentally services which should easily displace other forms of discretionary spending under "normal" conditions of duress, what remains highly uncertain is the denominator - i.e., how much consumers will have to spend in the first place. Or, indeed, how many "consumers" there actually will be out there a year from now, and how they are captured and retained. Over to you telecom - good night and good luck.

Fiber, schmiber

In the wake of the Copenhagen fiber love-in last week, a multi-platinum mega-uber value reader alerts me to a review of the event published by NLkabel, the cable trade association previously known as VECAI. My Dutch isn't what it used to be, but my source tells me that the main conclusions are - wait for it - that there are no new services for fiber, that the social and economic benefits are unquantified, and that the main driver of fiber deployment to date has been the competitive dynamic in markets where it has occurred.

I'm more intrigued by the choice of images in the report. Look at the photo on page 2 - don't you think that the attitude of the woman's shoulders betrays an underlying depression, because fiber events are boring and the whole endeavour is ultimately pointless and doomed? Or the picture on page 3 of the man looking wistfully into the middle distance from his perch at an empty display stand, wishing he'd had the foresight to train as a CATV installation technician - instead of becoming a lonely FTTH-loving loser... Or the two photos at the bottom of page 3, which definitively prove that a) video looks blurry over fiber, and b) fiber dudes are misfits who look like they come from the ranks of a ZZ Top tribute band.

It's subtle stuff...

Meanwhile, if you, like me, are skeptical that we will see any meaningful deployment of fiber in the UK before the ending of this song, then you probably won't be any more encouraged after reading this news snippet. I have often heard it said (and indeed have said it myself) that BT is a gargantuan pension fund with a small telco attached, but this really brings things into perspective, or as Spinal Tap would say, too much perspective. Should the worst happen, what do you suppose the government's appetite for a £30bn fiber deployment could be once it has absorbed BT and crystallized its financial obligation under the Crown Guarantee?

Distracted 2.0

Well, mega-uber value readers, it looks like I'm failing miserably in my intention to post more frequently. It just happens that I'm preoccupied with pre-launch preparations, investor meetings, and the like. Very exciting stuff, and I promise to share what I can in due course.

Greetings to all my erstwhile fiber geek friends whom I'm missing this week in Copenhagen. This is the first conference I've missed in four years, so please don't have too much fun without me, though in Copenhagen in February, that may not be too much of an ask...

However bad it might be in Copenhagen (disclaimer: actually it is a wonderful city - I'm just jealous), at least there's more fun to be had than in some corridors of power in Brussels, where it appears that a cat-fight may be developing between Ms. Reding and "Nickel" Neelie Kroes. Dutch version is here, Google translated English here. I have no real insight into the implied allegations contained here, but no doubt if there is any substance to them, then it is pretty explosive stuff.

In any event, given that I have little to say, and that any market commentary from me would be mostly negative, I thought it might be best to focus on the ridiculous, for a change. So, here goes.

Firstly, via the NANOG list, check out this amazing gallery of cabling nightmares. Words fail me.

Secondly, I recently stumbled across this bizarre collection of lovingly-crafted Dictionaraoke tracks. AC/DC fans click here, Black Sabbath fans here, Beatles fans here, Smiths fans here.

Lastly, I have rarely laughed so hard that I both cried and choked at the same time, but this piece of video from the incomparable geniuses at The Onion takes the prize. If you're easily offended by strong language, or are a member of the Sony legal team, you should skip it. For everyone else, and for anyone who has ever struggled with the installation of a piece of consumer electronic paraphernalia (Sony or otherwise), take a deep breath and enjoy.

Watch your back

Happy Friday. If you're finished reading your copy of the Financial Times, whatever you do, don't give it to a friend or colleague - you might find yourself on the wrong end of a lawsuit... Silly me, it looks like dramatically different rules apply between the physical and virtual worlds, to cover identical content. The disclaimer in my physical copy of the paper only talks about copying, not about sharing. Still, this sort of thing is good news for IP lawyers, or at least those who haven't moved over into bankruptcy practice, where all the real fun is. Not that IP lawyers have any shortage of career options, at least not in the US, where government beckons for some. It's intriguing to think about what's going on inside an administration apparently committed to universal availability of broadband and net neutrality (whatever that really means), but with a legal team like this on the bench. How do you spell change?

Taking the fiber challenge

It's not often that I copy and paste an entire press release, but it's not on the site yet, so here goes. This is another very clever (though not entirely unexpected) move by KPN, which is a nice incumbent validation of point-to-point fiber and more generally of open networks. And one has to assume that this is very unwelcome news for UPC, which still derives around 15% of EBITDA (at a nice margin) in the Dutch market, centered on Amsterdam. 

KPN participates in fiber roll-out in Amsterdam

KPN announces that it will participate in the fiber network roll-out in Amsterdam through its Reggefiber joint venture. For this purpose, the Reggefiber joint venture takes a majority stake in Glasvezelnet Amsterdam (GNA), an existing joint venture with the municipality of Amsterdam and several housing corporations. The Reggefiber joint venture does not require additional cash contributions from KPN for increasing its stake.

In the coming years, GNA will be responsible for a further and gradual fiber network roll-out based on Fiber-to-the-Home (FttH). During the first stage, it intends to realize some 100,000 homes passed on FttH in the next years. KPN intends to offer services on this network.

For KPN, participation in GNA via the Reggefiber joint venture is a next step following the establishment of a joint venture with fiber construction company Reggefiber in 2008. This joint venture is focused on the roll-out of FttH networks in the Netherlands and the company will roll out the Amsterdam network as well. Just like Reggefiber’s other fiber networks, the network in Amsterdam will be opened up to KPN and other service providers.

KPN is currently involved in pilots in ten cities for fiber, five of them with FttH. In the second half of 2009, the results of the pilots will be used to determine the speed and direction of a possible further fiber roll-out. After delivering the first 100,000 connections in Amsterdam, it will be assessed if and how a further roll-out in Amsterdam would be appropriate.

The proposed joint venture is subject to approval from the competition authorities. 

Snowy Sunday

Tomorrow may be Stormy Monday (at least that's what they call it), but this evening we are having heavy snow in London, which is quite surprising given that snow has been rationed here since 1943. 

I have been very quiet of late, largely because my focus has been on setting up the new fund. So most of my time in the past couple of weeks has been absorbed in working on the pipeline, doing some writing, and taking in the sheer immensity of the problems facing the market. Without saying too much, I think it's sufficient to note that we are seeing some situations (admittedly not in telecom) which are stunning in the rapidity of their deterioration, and we are also seeing some pieces of capital structures trading which don't trade in normal circumstances - suggesting that there may be a further unwinding of positions (possibly under duress) taking place.

On top of these sorts of capital market-centric indications of what's going wrong, there is plenty of other evidence in support of the view that we are in for many nasty new surprises. Which makes it surprising to me to read that 33% of respondents to a survey on distressed investing seem to think that the bottom is upon us now. 

I disagree, and the moment of epiphany for me last week was reading that NBC's final unsold Super Bowl commercial slot went to a glorified pawn broker. Super Bowl ad slots have historically been a showcase for global consumer brands to make their most memorable statements for the year ahead. During the boom/bubble era of extravagance, the easy-going zeitgeist was reflected in the ads - now we have an interloper in the form of a company serving people feeling frightened and vulnerable enough to sell their gold for cash, despite the fact that the "smart money" is actually doing the opposite. 

I was also somewhat taken aback (though, in retrospect, I'm not sure why) by a release from Equifax (not yet on the site at this writing) suggesting that a large proportion of UK respondents have at most a one-month financial cushion in the event of redundancy. It's not pretty, and thus I don't buy all this talk of a second-half recovery, because I think the stress in the system, at the small business and personal level, is perhaps more negative than many are taking into account at present. And none of this seems to take into account the specter of new nationalism and grassroots anti-globalization, which has never been a particularly positive force.

I am worried, but what the hell, it's a new week ahead. No doubt there will be worse and more ridiculous to come.

If you're finding it hard to get to sleep, here's some recommended reading material:

• Monash University Australia - three winning papers on broadband and the environment;
• Interesting photo essay on FTTH/FTTN in rural Texas

I will endeavour to post more frequently!

And now for something completely insane...

Thanks to a newly-crowned Palladium Club mega-uber value reader, check out this exceptionally detailed pictorial essay on domestic fiber installation in Japan. 

Thursday bummer

I spent today in the West End, beavering away on the project, but my concentration was frequently broken by the torrent of bad news filling the wires today. First BT (oh dear), then Nokia, which ended the day in the Minus 10 Club, nicely matching its 2009 industry outlook. Then came Microsoft, and then Freescale announced it has drawn part of its revolver, which didn't seem to inspire huge confidence. Overall, a hideous day for news, but thankfully not entirely devoid of comedy. As I've always said, when the sun shines out your backside, it's advisable to rest said derriere on a $44,000 chair.

Streaming tears of joy

I'm very busy at the moment. However, in the wake of yesterday's historic events on Capitol Hill, the geek wannabe in me just couldn't help stopping to take note of some of the impressive statistics coming out of the likes of Akamai and Limelight, as well as the associated thread on the NANOG list. Now, back to building my own future...

Virtual late lunch, 14 January 2009

Much to catch up on, but first, a moment of silence for Nortel. The 2009 fun and games have officially begun. 

For the datacenter lover in you, Digital Realty Trust had another set of encouraging numbers yesterday, and the stock had a nice bounce, though the appalling US retail sales numbers and fallout from Nortel are taking their toll today.

Then again, look on the bright side, looks like PCs and game consoles are going to get even cheaper!

Disdain for fund-of-fund managers is the new black, and Telenor is draped in it from head to toe.

If you live in the EU and have been putting off that plasma TV purchase, time may be running out.

Very interesting report on the smart grid and its potential contribution to fiscal stimulus. This is discussed in an upcoming Telco 2.0 post, so I'll just point to it for now. 

On a purely personal point, I continue to be amazed at the power of this web thingie to connect and reconnect people. A couple of days ago, I received, totally out of the blue, a bunch of old photos from a group of schoolmates I haven't seen since or communicated with since 1974, when we moved to Memphis. We are now emailing and Facebooking one another and exchanging stories. In true Woody Allen fashion, it seems that no one has ended up doing what I expected them to do back when we were kids, including myself. And it turns out that a nice, unassuming kid I often played with has ended up as a pretty well-known writer it would seem. It's all delightful stuff, and highlights that without this awesome series of tubes, we would probably all be in the dark about how life turned out for us. Now there is a Facebook group and even some talk of an attempt at a reunion. 

Back to 2009, FTSE -4.4%, S&P -3%. Ho hum...

Broadband bombshells

A couple of mega-uber value readers have pointed me towards a couple of interesting reports hot off the presses:

OFCOM's survey of broadband speed and performance characteristics, carried out by the awesome SamKnows, looks like the most comprehensive study of its type ever produced, and I look forward to reading it.

Likewise, OPTA has released an interesting-looking report (and spreadsheet) commissioned from AnalysysMason comparing costs of various scenarios for fiber deployment in the Netherlands. I have only scanned it very quickly, but if I'm interpreting the cost comparisons correctly, it would seem to point to a significant cost disadvantage for sub-loop unbundling. 

Back in action, mostly

A belated happy new year to all mega-uber value readers. Still trying to locate my brain through a jet-lag fog, but normal posting should resume soon. I'll spare you the typical "2009 predictions" post, because my view is that all bets are off for this year, apart from rising corporate defaults and human misery, which are dead certs. Working through a mountain of email today, I came across a couple of items on companies near the top of Santa's naughty list in 2008, so I will content myself with these for now:

According to this article, Phorm (a company which has succeeded in inspiring a jaw-droppingly unique level of negative press and public disdain) is apparently considering financial incentives to secure user acceptance. I wrote something recently wherein I speculated that this might be one approach, but one which is at odds with the company's business model, which is based on share of incremental ad revenue with ISP and channel partners. I'm not sure I really understand what's going on here, if anything. I think a company like Phorm really only has one incentive to attract users, and that is the promise of greater relevance in ad content, though I think consumers are far from comfortable with this proposition at present. Perhaps advertising fatigue has not reached the critical level yet. 

Elsewhere, Sandvine, the people who brought you the great Comcast Controversy, have started off the year with six major customer wins, though I'm not really sure what constitutes a "tier 1" DSL operator in Japan, where DSL is in terminal decline. If anyone has any ideas about who the European mystery company is, please let me know.

Finally, I've been commissioned to write a report for a major international organization, on the topic of broadband's role in stimulating and enabling innovation. This is a very broad remit, and I have lots of ideas, but I'd be very interested to hear yours, no matter how unusual.  

Season's Greetings

Happy Holidays and best wishes for 2009 (though, if we're honest, I think we all know it's going to suck, barring some intervention from a benevolent advanced alien race)! EuroTelcoblog will be embarking on its 2008 North American Roadshow from 27th December, which in practice means an extended engagement in Memphis, Tennessee, with minimal to nil posting. I know of one amazing story which may break during my absence, so if I miss it, I miss it - but it's a good one. Anyway, back in service on 7th January. All the best until then. God bless us, every one!