EuroTelcoblog

  Honjitsu wa, seiten nari
Honjitsu wa, seiten nari...

Labels: fuyuukai, risutora

  Hello friends, long time no see. Hope you are all well. I've received a couple of strangely menacing emails recently from our good friends at Google, reminding me of my log-in details. I assume this is some sort of Orwellian suggestion that this URL may be re-purposed if it remains dormant, so, like an old car, I am firing up the engine to make sure it starts, just in case...

 

Mega-uber value readers of the world, by now it is probably blindingly obvious to even the most forgiving among you that the volume of posts to this blog has dropped dramatically since early February. As you may have detected from some relatively unsubtle hints, there is a reason for this, which I have already shared with many of you with whom I have more direct contact. I am now ready to come clean, as all the t's are now finally crossed.

After six-and-a-half years, I left Daiwa eleven days ago, and will next week take up a new role within the principal investing team of a well-known Wall Street investment bank. One reason I find this a particularly gratifying turn of events is that, just as I may be no ordinary analyst, this is also no ordinary team. It has developed deep industry expertise and generally applies a greater level of focus in its investment process. It has been very successful in recent years investing in metropolitan fiber assets and portable/mobile broadband (two areas, you probably realize, which are near and dear to my heart). I think it's clear that my future colleagues do their homework and get involved early, well before the consensus has formed specific views on a space, and they take a broad thematic view across the full value chain (another nice area of fit) for investment opportunities, and search far and wide to find unique sources of information and market views. Perhaps most interestingly to me, the team has the mandate to invest in both public and private securities.

To say that I am very excited by this opportunity would be an understatement of epic proportions. However, one side effect of this move is that this humble bloglet, which ironically celebrated its third birthday on 30 March, the same day I said goodbye to my fellow Daiwans, must cease publication.

Judging from the reactions from those of you whom I have already briefed on this development, there may be a fair amount of dissatisfaction about this turn of events. I consider this to be a wonderful compliment. To think that (judging from the Bloglines subscription data I have, and my own tracking of site traffic) several hundred of you per day have given even a few precious minutes in your busy days to my ramblings over the past three years is more than enough – the thought that the blog might actually be missed is almost inconceivable to one who started with essentially no expectations. Recall that in my inaugural post I stated that the blog was essentially an experiment, an expression of frustration, a cry for help. That it has ended up being anything more significant to any of you is, if I'm honest, pretty damned surprising, and extremely gratifying.

However, lest we get caught up in the potentially negative interpretations of the move to a non-blogging me, let me explain a little about why I think this development is actually a very positive outcome within the confines of the "Web 2.0" weltaunschaung.

About six months after EuroTelcoblog moved from being an email blast to an online point of presence, I got an email out of the blue from the fund manager who was ultimately responsible for bringing me onboard at my future employers. He had stumbled across the site and found it useful. At the time it was just one of many interesting contacts which were coming my way from the blog – bright, inspired people with whom I would have almost certainly never had any contact if not for the fact that I had, via the blog, become visible (and accessible) to the world outside the confines of the investment banking research walled garden.

However, as was thankfully the case with many of the contacts which came my way via the blog, this particular dialogue became a sustained exchange of information and opinions. This process eventually led to some face-to-face meetings and culminated in a formal recruitment process, which brings us to the current situation. I hope that the other ongoing dialogues which have also arisen from this adventure in the blogosphere will also continue in the days ahead. Indeed, for those individuals and companies intent on innovation and disruption, there is probably, now more than ever before, a rationale for us to connect and share ideas and opinions.

But back for a moment to my statement that my current situation constitutes a positive outcome within the confines of the "Web 2.0" weltaunschaung. My view is that none of this would have been possible in the absence of a parallel social dynamic, and the tools which have accompanied/enabled it, towards a decentralization of information flows. The effects of this ongoing trend are pretty much impossible to predict from a macro perspective, but from where I sit, very much at the micro end of the spectrum, the message seems to be all too clear. Whoever you are, whatever your situation, if you have ideas which you are passionate about, and if you can find a voice with which to adequately express them, then the tools are there in abundance to do so, and the results may end up being surprising and life-transforming, so you might as well have a go and see where it leads.

So, that's pretty much it in a nutshell. I want to extend my respect and eternal gratitude to each and every one of you who has ever been kind enough to drop in, even to those of you who have vehemently disagreed with what I have said. I genuinely, literally, could not have kept this up for the past three years without your suggestions and ideas. I also wish to thank those individuals at Daiwa (you know who you are/were) who were supportive of some fairly unconventional research approaches on my part over the past four years, once I awoke to the need to do things differently.

As a parting gesture, I will be upgrading all mega-uber value readers to full Palladium Club status at no additional charge, as a sign of my undying appreciation. :-) Ping me if you're interested, and I'll let you know my future coordinates and contact details. Hopefully, at some future date, I may return to the blogosphere, and if so, trust that I will find some way to make my presence known. Until then, many thanks to all of you for a most wonderful and enriching three years. I've never known anything like it. It's had a profound effect on my life, and that's the whole point.

UPDATE on 11 April: When I was a kid, my mother used to regularly lecture me about always wanting to have the last word, but this really is the last word. I am truly humbled by the huge number of emails coming in, many from people I have never communicated with before. Thank you, and stay in touch! JE

  My last remaining grandparent died last week, and I spent the week in the States for the funeral, entirely offline. So I know there was a lot I missed (my bet is on Deutsche Telekom), much of which is past its shelf-life for commentary. However, in catching up with my emails, the following items have caught my eye, FWIW:

• A mega-uber value reader in Finland alerts me to a tender (Swedish) underway in the tiny island municipalities of Brando and Kumlinge for an open FTTH network. Apparently it's envisaged that customer premises will only be connected to the network if they agree to subscribe to at least one service on offer from one of the service providers who are hoped to materialize. Entry level pricing is said to be EUR16 per month. Yet another example of local activism looking to plug the holes in incumbent broadband rollouts.
• I notice with interest that the Tor project has secured funding from Google for a handful of developer spots at Summer of Code. Interesting contrast in light of anxiety over a Net Neutrality about-face from the Big G. A good friend also points out that it's counterintuitive for Google to be investing time and money in something which could facilitate skamming AdSense - maybe this is about threat intelligence.
  
• Jeremy Penston at IPDevNet has been on a bit of a hotstreak, producing a couple of interesting and informative pieces on online video. Well worth the read.
  
• Adobe has gone live with a public alpha of Apollo, a video preview of which I linked to here. I agree with Dean that there is some very exciting stuff ahead.
  
• UNESCO has published what looks to be an interesting report on the ethical implications of new technologies, now added to my pile of must read material.
  

  I know I haven't posted anything in some time. I've had a lot of loose ends to tie up and have been otherwise distracted, so apologies. On the bus to a meeting today I passed a lot of very prominent Sky advertising like this, which highlights that Virgin Media customers in the UK are to lose content like "Lost" and "24" due to the public bust-up between Virgin and Sky. One other billboard I saw pulled no punches: "Get Jack Back," it screamed, followed by a succinct explanation about Virgin's apparent decision to drop Sky content and ending with the message "To subscribe to Sky, call..." What amazes me about all of this is the sheer speed with which Sky has been able to move. What was a public spat a week ago has been turned into a national ad campaign virtually overnight. At lunch today someone reminded me that this is exactly the sort of advertising at which Richard Branson excelled ten years ago during his bitter war with British Airways.

  This is a test. Apparently some people are experiencing problems with Blogger.

  A Platinum Club mega-uber value reader points me to this interesting study published last week by Dr. Jonathan G. Koomey of Stanford University, which attempts to assess the power consumption of the servers which power our beloved internet. Power consumption by servers worldwide doubled between 2000 and 2005, and the total cost for the world in 2005 (including cooling and associated infrastructure costs) was $7.2bn. Not covered by the findings is the cost of energy consumed by delivering connectivity to end-users, which must certainly be even more staggering. The report notes that power consumption by servers and associated infrastructure in the US in 2005 accounted for 1.2% of the national total, an amount comparable to the total installed base of color television sets in the nation. Also of interest to me is the fact that the cut-off point for the data, 2005, really predates the net video/virtual world explosion we're seeing now, so I would love to know how the current situation differs from the growth trend observed here.

  Lately I've been a bad blogger, but with good reason. All will be revealed. Anyway, here are four things which came my way today, all of which caught my interest:

• NeufCegetel ups the French FTTH stakes with the acquisition of fiber specialist Erenis. With aspirations of achieving 15k subs by March of this year, Erenis is clearly not the kind of acquisition which brings serious scale. But that's not the point - I think it's about tapping into the limited pool of people with true expertise in fiber deployments, as Iliad did with its October acquisition of Citefibre. No transaction value is stated, but I have to assume this deal makes a nice return for Iris Capital, et al, who funded Erenis just over a year ago.
• My friend and Palladium Club mega-uber value reader, Lee Dryburgh, spent several days last week locked away in ITU meetings, which seem to have produced, somewhat remarkably, some hopeful-looking ideas on how telcos can position themselves as vital links in the chain of identity and reputation management. Check out the slides here. Will those of us who have spent the past four years (or more) chanting the mantra "telcos just don't get it" find reason for a re-examination in late 2007? As always, I'm skeptical, but nonetheless this is something to follow with interest.
• A Pollonium Club mega-uber value reader points me to an apparently popular but still little-known corner of UK geekdom - the free cable TV via Linux phenomenon. Seems that a growing number of people are buying Nokia dbox2 set-top boxes from Germany with a Linux hack which allows them to do all sorts of cool things, including decrypting premium cable channels for free. Watch those RGUs, Virgin Media!
• This interesting survey from japan.internet.com and goo Research covers awareness in Japan of Second Life. As usual, the research covers a sample group of 1,073 internet users ranging in age from 10 to 60, and discovers that nearly 19% of them have at least heard of Second Life. I agree with the authors' conclusion that, for a US-based virtual world with no Japanese language support at this point, this is quite an impressive number. Only 1.1% claim to have actually used it, however, but given the tendency for the Japanese to come up with homespun adaptations of ideas from abroad, I wonder whether this low uptake points to an opportunity for a domestic rival?
  

  Hello, mega-uber value readers. Apologies for my recent silence. I have been busy and very distracted with some major news, which I will share with you in coming days. Meanwhile, my cyberfreund Keith has been doing such a wonderfully irreverent job of covering the quarter's results, M&A foibles, and other oddities, that I am nearly speechless.

Nearly, that is. I am inspired by Telenor's results today to break my recent silence. How extraordinary it is that the best performing company in the European sector over the past two years finds itself in the position of having to publish estimates of the results of its own largest source of EBITDA, due to a court injunction over releasing financial information resulting from legal action by a partner (Storm LLC, which holds 43.5% of Kyivstar and is controlled by Altimo). Up to now the ongoing disagreements have been an area of concern, but without any visible impact on the share price. Altimo seems to have demonstrated powerfully today that throwing stumbling blocks in Telenor's way to cause uncertainty and a lack of visibility is enough to do serious damage after all - in this case a 9% decline in market cap.

  The good and clever people over at Stratix Consulting in the Netherlands have put together an exhaustive survey of the current state of FTTH in the Dutch market, which you should download and read now. I will too, once I finish breakfast.

  At last, a Pollonium Class mega-uber value reader pings me with news which we have been anxiously awaiting/expecting: an apparently open network FTTH deployment to a nearly 10k unit new-build development in Kent. If anyone out there has any additional info, please get in touch.

  How fitting that, being here at the FTTH Council Europe event in Barcelona, where all 1,200 delegates are debating how much bandwidth is enough and how fast, while simultaneously jockying for position near scarce power sockets for a quick recharge of depleted laptops, today my friend and Palladium Club mega-uber value reader Vincent Dekker of Trouw in the Netherlands, breaks the story of a massive new data center being built in the northern Dutch backwater of Eemshaven. Though no official confirmation is forthcoming, the word is that this new data center's primary tenant will be Google, with space for 100k servers, and conveniently located near a 2.4Gigawatt power plant, a windfarm, a "green" power cable making landfall from Norway, and a harbor which will in future house an LNG terminal. Do we see a pattern here? What's also interesting is that Google is reportedly the largest occupant of the current largest server farm in the Netherlands, Zernike, just up the road in Groningen. Looks like when planning for its future bandwidth and power demands, Google is a believer in the immortal words of Jerry Lee Lewis, "Enough is good, more is better, and too much is just about right." Except that "too much" continues to prove very difficult to gauge.

  Step right up! The kind people at Fon have offered EuroTelcoblog readers in the UK (sorry, only UK readers need apply) an exclusive claim to a free Fonera while supplies last. Head here to claim yours. Be quick and good luck. (Disclaimer - I have no connection, financial or otherwise, with Fon. I simply like what they are doing, and they are keen to engage with bloggers. I am honored to be chosen.)

UPDATE on 7 February: The folks at Fon inform me that the initial response to their offer is over four times what they expected. I always knew my mega-uber value readers were value-conscious!

  I'm jetting off to Barcelona early tomorrow to hang out with the fiber geeks for a couple of days, at the FTTH Council Europe's annual trench-dig. Fun though that may sound, I hear that the real Fun will be taking place to the southwest, in Madrid, where Fon will be celebrating its first birthday. Remember that this feisty contender requires from the end user a hardware, not just a software, commitment, so don't expect anything like Skype user numbers after year one. But then consider that we're talking about viral access here, and an opportunity for some mainstream carriers to assert themselves virtually in the wireless domain. We've already seen it with NeufCegetel in France and a host of other, smaller players. What might lie ahead in 2007? Ignore at your peril...

  A friend pointed out a blog called voipniche, which has some interesting posts in it. Like this one, this one, and even this one. If they look familiar to you, it's because they have lifted them from this blog, verbatim, with no attribution.

Let's see if this is an automated process, or if there is a real live thief behind this AdSense scam.

VOIPNICHE.COM REPOSTS ITEMS FROM EUROTELCOBLOG WITH NO ATTRIBUTION AND WITHOUT PERMISSION

I'll be curious to see if this post turns up there later today.

UPDATE: Less than two minutes later, the post indeed appeared on the site. Looks like voipniche is a direct RSS-reader-to-splog bot of some sort. What a wickedly ingenious development! I used Centralops to look up the domain. Seems to be registered to someone in Mumbai, but the traceroute ends in Brazil. Who knows, who cares? Enjoy that AdSense money, whoever you are!

  A mega-uber value friend alerts me to this very clever viral marketing tool based on Carphone Warehouse's TV ad campaign. Here's my first effort, entitled "Come back, Arun." I don't know how much this will do to change people's perceptions of the broadband product after the beating it has taken in the UK press, but at least perhaps it will give people a way to amuse themselves while they wait on the customer help lines.

  A Palladium Club mega-uber value reader points me to the latest broadband scorecard from ECTA. I used to get ECTA press releases, but it seems that they don't love me anymore... Anyway, my friend out there in cyberspace points out that the most fibered country in Europe is Estonia (17% of total connections in Q3 2006). After second place Sweden (14%) comes, that's right, Lithuania (6.2%), and Latvia is giving Italy a run for its money at 2.2%. In this Eurovision bandwidth contest, there's an awful lot of big countries scoring nul points.

  This week seems to have gone in a flash, what with the Vodafone/Sky double-header on Wednesday and France Telecom yesterday. Still playing catch-up today, but here are a few things which caught my eye.

Keith has a nice write-up of the Vodafone results, which he refers to accurately as the quarterly game. I can't think of many other companies where the management consistently start the presentation by repeating that they think the KPIs they are about to report are of diminishing relevance in gauging performance. In that case, why not report quarterly results with a full set of financial statements? Surely that's preferable to the current system.

As for Sky and FT, there were a lot of interesting facets to their respective results, but the thing that really struck me most was the sharp contrast between the two broadband deployments. Sky has clearly ramped up the rate at which it is connecting new customers quite dramatically (from c.11k per week in the December quarter, to over 16k per week in January), 87% of its subs are unbundled, and 70% of that group has opted for a product carrying an additional charge (i.e., a higher bandwidth package). Orange UK, on the other hand, added only 34k broadband subs in Q4 (a connection per week rate of less than one quarter that of Sky's), and only 16% of its subscriber base is unbundled. On top of that, the company only added 50k net contract mobile subs, so clearly whatever the appeal of free broadband for contract spend of over GBP30 per month, it is not really having any visible impact. Keep in mind that Sky is concentrating on its existing base for the most part (only 18% of new broadband customers were completely new to Sky), while Orange's addressable market is arguably the entire contract mobile subscriber base of the UK, yet it seems to be making very feeble headway.

One other thing about the Sky presentation which I found impressive was James Murdoch's comments on positioning the brand in terms of social and environmental responsibility. I'm sure a lot of people would have some reservations about accepting this at face value given the source, but leaving Murdochophobia aside and taking a neutral view, it's a brilliant line to take. Committing to this is not only the right thing to do ethically, but it's the right thing for consumers to see you doing. Brands which don't position themselves adequately here may indeed risk creating a gulf between themselves and the consumers they aim to engage. As with so many other things, I think Sky is ahead of the curve here, and many others will follow in its wake.

Now back to my bandwidth obsessions.

The fact that 70% of Sky's unbundled customers take a higher bandwidth product, for which they have to pay an additional charge, seems to underline again that demand is indeed on the rise. I think James Murdoch must have used the word "bandwidth" at least 50 times in the course of the presentation. I wonder if he had seen the news that, only a couple of weeks after the HD DVD bombshell, Blu-Ray has also fallen victim to the tireless efforts of cryptogeeks, the first file weighing in at a healthy 22GB. What a bruiser.

A friend and Prix D'Or mega-uber value reader also drew my attention for the first time to some stats tracked by the Australian Bureau of Statistics, which show bandwidth consumption among business and residential internet users. Notice that between March 2005 and June 2006, the number of broadband households nearly doubled, but data consumed nearly trebled. The next update is due on 16 February, and should be interesting.

  This item doesn't seem to have found its way on to KPN's corporate website yet. KPN's German fiber assets (presumably dating back to the good old Bubble 1.0 days of KPNQwest) are to be jointly marketed with those of Wingas, which happens to be 50% owned by Gazprom and apparently has aspirations of being a pan-European long-haul fiber player.

  Just got an intriguing press release from Motorola, which states that its venture unit has made an investment in Dart Devices, heretofore unknown company (to me anyway), which describes itself as being in stealth mode. The release states that Dart will be making a demo at Demo 2007, so if anyone there has anything to share, I'm all ears. I stumbled into the customer area of the Dart site and found an interesting list of companies (including Vodafone, misspelled) there, along with more description, which sounds very much like a piece of the vision I heard from Motorola's own John Waclawsky back at Telco 2.0:

"DART combines a group of connected devices into one virtual device with all the collective software, hardware and content of the devices available to all the devices. Any device running the DartPlayer middleware can run Dart software applications, called "dapps," which can securely spread their execution across heterogeneous devices, operating systems and communications protocols.

The net effect is truly seamless interoperability between devices without any need for prior knowledge about the other devices or what software they contain. DART makes it easy to build new types of self-distributing software 'Social Applications' which can synchronize content and operations across any number of devices. This adds an important new dimension to existing interoperability technologies and standards."

  If I ever get a break from the day-to-day grind, I'm going to get caught up on my reading. Add to the already long list this 203-page feasibility study on FTTP in San Francisco kindly sent in by a Palladium Club mega-uber value reader. Interestingly, one conclusion is that the initial FTTP deployment in the enterprise district be extended city-wide, as an open network, which would be "competition-enhancing." This last bit seems to pretty well capture the mood both Stateside and increasingly in Europe.

Should you manage to make it through the document and still have energy for a bit more, these are the slides (torrent) I presented at the Telecom Finance conference late last Friday afternoon, as Deutsche Telekom was no doubt discussing the most awkward timing for this year's first profit warning (yes, Sunday mid-day was a lovely choice). Due to a late start and an increase in panel size from three to five, I basically had to try to get my message across in seven minutes or so. The best moment for me was when I said that telcos should expect that everyone is in competition with them. As an example, I asked for a show of hands from those who thought that Adobe should be counted among the field of telco competitors. Not a single hand rose, but later, when I touched on the deal with Verisign, I could see some wincing going on, and when I closed with the Acrobat 8 news (which no one seemed to have clocked), I was rewarded with the smiling and head-shaking disbelief that I usually aim to see at least once in a presentation.

  If you're either a bull or bear on FTTN, take some time and read this exceedingly detailed and interesting first-hand review of AT&T's U-Verse service, including tons of screengrabs. No matter what your view, you'll probably find something that confirms it here - there are plenty of positives, but also some glaring negatives (single HD stream only, highly compressed VOD signal) which I, as a bear, focus on. Despite the pretty balanced views of the reviewer, the final assessment is a damning one:

"This is still a beta service and for some reason they decided to roll it out unfinished. They should not be charging for the service as it is now... U-Verse is just a band aid for what AT&T really needs to do, and that would be fiber to the home."

(Thanks to the Mother of All Palladium Club mega-uber value readers for drawing my attention to this.)

  Another busy day looms ahead of me, but I wanted to draw your attention to the excellent piece which our EuroTelcofriends at T-Regs have done on OPTA's letter of yesterday outlining its current thinking on the KPN all-IP migration. If you're not a Dutch speaker, but interested in developments in the Dutch market and regulatory complexities of next-gen network deployment, then you will find this immensely helpful.

It would appear that OPTA has come to the same conclusions that others and I (perhaps somewhat uncharitably) expressed doubts about previously:

"...the studies conducted, and input received from alternative operators, indicate that it is not sufficiently clear that a fully fledged alternative [to copper MDF access] would be sufficiently guaranteed..."

and

"...it seems clear that the study concludes that the threshold for economic viability for an alternative operator using sub-loop unbundling from street cabinets is unlikely to be achieved by any alternative operator unless it reaches an enormous market share (in a market that is characterised by major presence of cable networks) or can operate on the basis of sub-loop unbundling very selectively whilst having a larger global broadband market share than Dutch alternative operators currently control, and under the assumption of considerably increased average revenue per user."

I am also personally puzzled by the reference made to OPTA's unexplained decision to back away from a focus on coordinated infrastructure deployment, which, indeed as T-Regs notes, is completely at odds with the stance of the French regulator (and possibly common sense, in my humble opinion).

Lastly, I'm looking forward to the publication next month of OPTA's study of the Openreach model and its possible implications in the Dutch market.

UPDATE: My cyberbuddy and coopetitor Tim Poulus has made a very fine post on this issue, where he goes through the views of each market participant. Check the bombshell at the end, where Vodafone is apparently urging OPTA to examine the case for structural separation.

  I see that Golden Telecom's Moscow WiFi network is set to go live next week. They claim 50,000 signed up for the beta, with 20k active and 6k per day on average. Coverage of the staggering 6,700 access points is claimed to be 800k households, of which the company aims to take 300 - 400k as customers by 2010. Coming only a month after the company's FTTH acquisition, this is looking to me like Iliadsky. I occasionally get mega-uber value readers from Moscow - if you have any first-hand experience to share, then please get in touch.

  An eagle-eyed mega-uber value reader alerts me to developments in, of all places, Walsall in the West Midlands. I've never considered living there previously, but the idea is starting to appeal.

  As bad as yesterday was for a certain French company, the sun shone on at least a few parts of Paris (namely the communes of Bagnolet, Bobigny, Drancy, Le Blanc-Mesnil, Le Pré-Saint-Gervais, Livry-Gargan, Nanterre, Nogent sur-Marne, Noisy-le-Sec, Romainville, Thiais, Villeneuve-le-Roi, Villemomble), as NeufCegetel group company LD Collectivités announced a 20-year program of FTTH deployment. These 13 communities house 500,000 inhabitants, and phase one of the build will aim to connect 22,400 households in the next two years. (Thanks to the Prix D'Or mega-uber value reader who tipped me off!)

  Trying to dig myself out of a pit today, so blogging takes a backseat - unless something really interesting happens. So here are a couple of things to keep you busy. A Platinum Class mega-uber value reader points to the recently added English translation of an article on approaches to fiber written late last year by ARCEP member Gabrielle Gauthey. The salient passage for me, is unsurprisingly:

"It is necessary to understand that the passive network involves a long-term investment with a long-term rate of return (more than 20 years). This can pose a problem for the private operator who derives his profit from an active network and needs to turn a short-term profit (3 to 5 years). Operators must control and own their active network equipment because it’s only at the active level that operators can differentiate themselves and be competitive. However, private operators can easily share the passive network – ducts and dark fibre.

The ways of implementing network sharing can lead to very different investment models, which might risk in some cases recreating monopolies, even local ones. [EuroTelcoblog - this local monopoly scenario is a potential regulator headache I have previously written about - glad to see it being echoed here.]

In one model, the operator is vertically integrated and installs a closed network, or a slightly open network with only resale offers. This is the preferred model of incumbents in the United States.

In another model, long-term investors, who are associated if necessary with local governments, from the start adopt an open-access model, sell passive network capacity without necessarily becoming themselves operators."

You might also want to have a look at the latest from the folks at BackChannel, who have turned their sights to the US primary dedicated access market, to find it more concentrated than in the UK (registration required).

  Wish I'd been in Amsterdam today, where I am told that a couple of hours ago there was a press briefing around the release of the Fabplayer beta. A mega-uber value reader previously pointed me to this example - unfortunately, I can't see it, because the IT Nazis have locked down MySpace, but I look forward to checking it out at home. Anyway, this is a brilliant piece of viral thinking for Fabchannel, using the interface familiar to users via Flickr! badges, etc., to allow users to personalize the video streams they want to broadcast to the world - expanding awareness of Fabchannel in the process. I will try to embed one on Chaotica and see how it looks. Exciting stuff from Europe!

UPDATE: I have installed the player on Chaotica. Depending on your display size and resolution settings, it may end up at the bottom the screen. I think the video quality is stunning.

UPDATE 2: Back at home this evening and watching the player through the Chaotica site, even on my pathetic 4Mbps cable connection, I am very impressed by the stability of the streams (better than in my office, I have to admit). Looking at my bandwidth meter, though, they do seem very bursty - I'm seeing everything from 300kbps to over 4Mbps during a given clip. This sort of observation feeds my growing bandwidth obsession.

  I got an invitation to the Babelgum beta yesterday. Here are a few first impressions. I'd be interested to hear anyone else's comparisons with Joost.

  Calling out to all mega-uber value readers everywhere (I find this map incredibly gratifying), the good people over at Telco 2.0 central have kindly extended to me five (5) tickets to the upcoming Telco 2.0 event, at a 25% discount. (They've even been so kind as to put a picture of me on their website, though they apparently used some sort of bizarre distorting lens which makes my face look chubby, when we all know that I really look like this). They've been working hard day and night on putting together a killer cocktail of presentations and workstreams to rival the first event, which I think everyone in attendance agreed was something truly special. Anyway, the fastest five fingers claim the discounted tickets on a first come, first served basis.

  A Palladium Class mega-uber value reader in the Netherlands alerts me to the fact that UPC's appeal of the previous negative ruling in its petition for a standstill of the Amsterdam fiber project has been rejected today. Given Liberty Global's recent tendency to exit mature markets which have gotten too hot and redeploy capital where returns might be better, I have to wonder if this is another step towards an eventual exit from the homebase? I know it sounds ridiculous, but with the other two cable majors having taken the private equity exit, and with fiber hell breaking loose around it, how long does one wait before valuations really take a beating?

UPDATE: A Palladium Club mega-uber value reader points out that indeed rumors of a super-troika merger between UPC and the PE-backed Casema and Essent were spreading even as I wrote the above.

  A while back I made a couple of partially tongue-in-cheek posts about environmental concerns which bring me back to earth when I get too excited about the wonderful world of web services. A few mega-uber value readers wrote in to respond that they thought it was a very significant point, particularly when we consider the potential externalities of the situation - e.g., the carbon impacts of a popular service might fall disproportionately hard on the residents of California when the user base is actually global. Now I see that the nice folks at the Cavell Group are building a practice around the issue of telecom/IT and their environmental impacts. Very interesting statistics on page 7. Now stop reading this blog and switch your computer off.

  There are quite a few financial institutions which turn up in this site on a regular basis, which I find interesting and gratifying, but today I saw one I haven't seen before from the Bulge Bracket all over the site like a bad rash. Hello from the impoverished edge!

  A couple of previous posts on this blog were intended to give a flavor of how conventional bandwidth demand projections might be upset, or their time frames compressed, by "unforeseen developments". As one example, BSkyB has publicly stated a working assumption that end-user bandwidth demand may double every five years. Yet I have to question how these kinds of assumptions are arrived at, and how closely connected the forecasters are to the end-user behaviors driving the changes (check out this article on Joost from NRC Handelsblad, in which the CTO complains that provisioning fiber to the development office in Leiden took an eternity because the vendor couldn't grasp why anyone would possibly need so much bandwidth).

Just looking at the issue from a historical perspective also makes me very uneasy with some of the projections out there. (Here I am uncomfortably reminded of other previous industry predictions which proved wide of the mark - "no one will ever need or want their own computer," "SMS has no potential as a consumer service," "mobile penetration will peak at 20%," "the public internet will never support acceptable quality for voice," etc.) Five years ago, broadband in most of Europe meant typically 512k or 1Mbps, but today in France it may mean 28Mbps. It's still hugely asymmetrical, which is a big problem in my view, but nevertheless, theoretical downstream capacity has grown by a factor of as much as 56 times.

Capacity is not the same thing as consumption, but it is still noteworthy that the "capacity to consume" has grown many times faster over the past five years than the rate projected by BSkyB for the next five. I'm not singling out Sky for abuse here, rather it's just a convenient example, but I don't understand why future expectations should be more conservative than has been the case historically, when the evidence I have seen seems to point to something more steeply linear. Nor do I think there is any fundamental difference between French and UK internet users which suggests that the UK needs less bandwidth. Yet one view in the UK is of demand doubling every five years, while in France we already see a case for jumping straight to FTTH.

I think the attempt to measure rates of change, to define the critical tipping point, will be a hotly debated issue over the next couple of years. And where there is fodder for debate and industry/investor anxiety, there will be dramatic research, such as this newly released survey from ABI Research, which appears to cover different approaches to addressing the "bandwidth crunch," and concludes that MSOs will need to spend $80bn globally to remedy it.

I certainly agree with the drivers they identify, and I am not in a position to confirm or dispute the numbers, but the last sentence caught my eye: "In practice, says the study, network upgrades will naturally start in the major urban centers and gradually spread to less densely-populated regions." This may be true for the established players in cable, but this very bias would seem to offer incentives for projects of the kind we have seen in the smaller Dutch towns of Hillegom and Nuenen - where entrepreneurial capital and local consensus have converged to leapfrog offerings by the telco/cable duopoly, and apparently generate fiber envy in neighboring areas.

So let's add to the list of potential "unforseen developments" driving higher bandwidth consumption the idea, often covered on this blog, that local self-determination also has a role to play. (Incidentally, I recently came into contact with a company with a very interesting model for addressing just this space - please contact me if you are interested in speaking with them.)It's not necessarily all in the hands of the incumbents to determine what our demands will be and deliver supply in an incrementalist trickle.

UPDATE: Interesting article from Level3 here seems very much in line with my sentiments.

UPDATE ON 25TH JANUARY: Read this one and weep!

  This BBC article on Joost mentions another P2P TV startup, called Babelgum. So I Googled it and found that, interestingly, it is founded by none other than Silvio Scaglia, the man behind Fastweb, the first entrepreneurial European exponent of both FTTH and IPTV, who has sold down some of his stake in the company to finance Babelgum. The Italian political scene is very familiar with no confidence votes, but for an integrated-services-over-fat-pipe veteran of this stature to become a convert to the "parasitic applications" camp is amazing.

UPDATE: Eurovalley has an interview with Babelgum's CEO which is worth reading.

  Well, another year means another few thousand industry events, and as usual I will be making the odd appearance here and there. On the near term radar screen are Telecom Finance, where I'll be testing the endurance of the audience in the final session on the final day, and the FTTH Council Europe's shindig (I guess being fiber, that should be trenchdig) in Barcelona, where I will be sharing the podium with three friends - collectively we are being billed as "Four Horsemen of Telepocalypse". Come and join the fun - this conference thing can't last forever!

  The Venice Project has a new name - Joost - and more importantly, is open to further beta testers. Yesterday a mega-uber value reader and fellow beta tester alerted me to the fact that he had received 25 additional tokens, versus two at a time previously. This backs up Fredrik de Wahl's email statement which I received this morning: "We've been somewhat conservative about expanding our beta - but that's going to change pretty rapidly now." I assume the plan is to get the network as robustly seeded as possible ASAP, then bring on much more content (I have heard about deals which are not visible yet), and then to increase picture resolution. In the age of HD by any means necessary, I don't believe the current resolution offers a sustainable competitive advantage (even though the client itself rocks), but I also assume that the Joost architects have understood and anticipated this from day one. Oh my aching backbone!

  About nine months back, I published a note for clients which focused on some trends in bandwidth consumption, and went through a list of factors which could make current projections of demand appear far too conservative. One of these was my expectation that HD content would inevitably flood onto BitTorrent aggregation sites - a serious bandwidth issue for telcos given the massively larger file sizes involved. Well, it's only the 15th day of this new year, the HD DVD crypto has been compromised, and the first HD DVD has been ripped and uploaded. File size - 19.6GB - 10x the typical file size of a standard definition feature length film. Ouch! [via TorrentFreak]

  Some people say that the Swedes don't possess much of a sense of humor. I would argue that, in fact, their sense of humor is alive and well, if highly sophisticated and very, very dry. The Pirate Bay seeks to become a country. Inspired. I only hope they have their immigration policy ironed out, and have enough money to hire some traffic cops.

  Just a couple of thoughts on a busy Friday to illustrate that it may be overly simplistic to assume that Net Neutrality is a zero-sum game, as it is often framed.

Last night I fired up the Venice Project client for the first time in a few days, and was prompted to download the new build (which, it turns out, appears to launch without displaying the "lobbycard" style credits which I covered here). Anyway, after the preview piece runs (which I presume gives the client time to contact other nodes and cache some of the most popular content in anticipation of viewer demand?), the sponsorship bumper came up to reveal - wait for it - "brought to you by T-Mobile."

I nearly fell off my seat, as, I assume, did any T-Com manager who might have seen the same. This followed the discovery, thanks to a comment by one of the Venice Project engineers in an online forum (which I refrain from linking to in respect for the contributor's wishes), that Venice's main transit provider is none other than BT Group. (Probably little comfort in this knowledge for the team launching BT Vision.) This confirms some recent traffic analysis done by a mega-uber value reader, who observed that he was connected to several nodes identified as "Infonet Belgium" (BT owns Infonet).

So, in the haze of a Friday mid-morning, I'm thinking that the most draconian incarnation of Net non-neutrality only works if all the pieces of the telco are pulling together - which has never been the case, even in the companies which attract the most scorn. My gut feeling is that Venice and similar applications actually increase the organizational polarization exponentially, possibly to the point of irreconcilable differences, which usually culminates in divorce.

  I've been messing around with the ISP comparison tool available for the UK market, which uses customer ratings to rank up to six players at a time. It yields some interesting results. (By the way, wherever you are in the world, if a similar tool exists for your local market, please send in a link, regardless of the language.)

So let's start with the top six incumbent players in the space: BT, NTL/Telewest, AOL (I know it's been sold), Tiscali, Orange, and Pipex. Keep in mind that this chart may look different when you access it, assuming it is going to continue to be updated. The result: NTL and Pipex fare the best here overall, but notice that ratings generally are nothing to write home about - particularly customer service, where 60% approval is a real triumph.

Next a group I guess we could consider challengers: Be (Telefonica), Demon (Thus), Eclipse, Sky, TalkTalk, and Virgin. The result: Telefonica seems to have bought a strong franchise, and Demon and Eclipse both perform well.

I also think it's interesting to compare the relative ratings of acquirers and their acquired franchises. TalkTalk/AOL shows, as we would expect, a significant disparity in customer views. Ditto for Tiscali/HomeChoice, particularly on customer care. Pipex/Bulldog show a similar relationship, though there is an alarming convergence here, in the wrong direction. Also of interest is Sky/UKOnline - significant differences despite being the same company. BT/PlusNet appear strikingly similar, and I guess well-suited.

Lastly, and most provocatively, let's look at six smaller, perhaps nimbler, names: altoHiway, Be (again), Clara.net, supanet, Twang.net, and Zen. The result: recall all the 40 - 60% scores we saw in the earlier examples. Here 70% speed ratings and 80% levels for reliability and customer care are the norm. To put things in perspective, contrast three from this group with the top three in the market.

Admittedly, this is not the most scientific of exercises, but it intrigues me nevertheless. Is broadband customer satisfaction really a scalable proposition?

UPDATE: A fair-dinkum Australian mega-uber value reader rises to the EuroTelcoblog challenge and submits the local consumer broadband resource site for our perusal.

UPDATE 2: A Norwegian mega-uber value reader submits the local comparison site here.

  If you happen to be in Sweden and looking to pick up a butt-load of TD-CDMA kit on the cheap, try here. I gather that A2C Accelerated Wireless has gone into liquidation, but I don't actually know anything about the company. I see references in the regulator website from late last year, but Swedish is, well, Greek to me. Any Swedish mega-uber value readers willing to lend a hand would be warmly welcomed.

UPDATE: A number of mega-uber value readers have chipped in on this one. The clearest version of the story runs like this: "Accelerated Wireless built a UMTS-TDD network in the southeast part of Sweden, covering the municipality of Kalmar with surroundings. The Swedish government has been funding a lot of broadband network buildouts in the last couple of years and AW were supposed to get 60 MSEK in subsidies for their network. The project was severely delayed and in the end the municipalities cancelled the agreement with AW and went with TeliaSonera instead, freezing the subsidies and forcing AW into liquidation. The initial idea was to find a buyer for the network that was already deployed, but it seems like nobody was interested in that..."

  The teams at Redmonk and Freeform Dynamics have started an open source and alternative analysis wiki which looks really interesting. Brokers - time to get out the garlic and crosses.

  Good old Keith McMahon - in my opinion the greatest addition to the telcoblogorama in 2006 - continues to tirelessly devote himself to proper open-source analysis. Check out his latest post on Carphone Warehouse mobile sales, which has some interesting analysis and conclusions indeed. One interesting follow-on question arises - where does this data come from? The answer, which I find very amusing, is that if you open up the Powerpoint version of slides, such as these from the last set of annual results, go to slide 12 ("Free broadband - recruitment channels"), and click on the chart, you will find a treasure trove of data behind, which I assume the company would probably rather not have you see. But get it while it's hot, I expect we may see some alterations to these slides in the near future.

UPDATE: It's now 3:15 PM and if you're wondering why the link to the Powerpoint no longer works, it's because the company has pulled them from the site.

  Over the wires this morning came the news that Telio's CEO Arild Nilsen has resigned, to be replaced on an interim basis by CTO Alan Duric. I count Alan among my friends from the VoIP-o-sphere, and I consider him to be one of the brightest, and rightly one of the most respected, minds in the business. From my knowledge of him, however, he is happiest as an innovator focused on projects, so I don't envy his having to take on the responsibility of day-to-day operations. For his sake and the sake of innovation in the VoIP space, I hope Telio lands a full-time CEO quickly. Innovation matters more now than ever, not least because my Norwegian sources tell me that the Norwegian regulator's decision to relocate operations to a remote backwater has been greeted by mass resignations, which some sources put at up to (unconfirmed) 95% of total staff.

  There's an old joke I heard many years ago from a World War II veteran which went something like: "How can you tell an Italian tank? It's the one with reverse lights." I keep running into speculation that Telecom Italia is looking to sell BBNed in the Netherlands, though I see no evidence of that, and when I see the deal with QSC to expand ADSL 2+ coverage to another 100 cities/towns in Germany on top of the AOL Germany acquisition, it appears to me that Telecom Italia's European DSL strategy is indeed a serious one. I wonder if something is on the cards in the UK market at some point, say Tiscali, for example?

  My cryptic reference in the previous post was to the fact that I expected to be part of this Channel 4 evening news story on mobile VoIP. Certainly when I accepted their invitation to be interviewed I believed that to be the case, but when I arrived home last night, my elder daughter greeted me with the news that I seem to have been edited out. Then again, I can understand the editorial imperative - it was a busy news day with lots of British class warfare issues to delve into ad nauseum.

This is sadly indicative of much of my recent contact with mainstream media. More than once have I agreed to lengthy interviews with print journalists working on a major feature piece, only to be edited out subsequently. What I have noticed invariably is that the content of these interviews nevertheless turns up in the final version as useful, unattributed "background," thus making the sometimes clue-challenged journalists look better informed than is actually the case.

That's all part of the game, obviously, but what I find irksome is the sheer time-wasting aspect. C4 contacted me last week, saying they would turn up at my office at 9:30 AM. Over the weekend the segment producer called to ask if I could go to Canary Wharf instead. I said no. Then yesterday I got a call saying they would need to push back until 10:00 AM. Fine. Then another call to say they were running behind. Eventually they arrived. After the cameraman indiscriminately unplugged the computer of one of my colleagues without asking and set up his kit, we started shooting at 11:45, did about 20 minutes of what I thought was decent footage, and they were gone by 12:15 - but so was half of my day.

I don't think I'll bother with this sort of trivia in future, and to be honest I'm appalled that I allowed myself to fall for the allure of an appearance on broadcast TV. I guess I'm showing my age here. Anyway, it's certainly good coverage for the Truphone team, and is certainly good for promoting general awareness of what's possible in an IP world.

  If you're in the UK, or otherwise have access to UK terrestrial TV from outside the country (by whatever means), there's a chance you may see me tonight for a few seconds between 7:00 and 8:00 PM, hopefully edited so that I appear to be making sense. Let me know if you happen to see it.

  My friend Dean Elwood has written a very interesting and informative piece on how to build a VoIP network, based on both his own experience with VoIPUser, as well as observations of others in the industry. While it's actually quite technical in nature, he stresses some very down-to-earth messages, my favorite being: "...the majority of people that build VoIP networks as a business fail because they either do not have a Unique Selling Point, or they over-value the one that they do have. Don't let it be you."

  I have received two more Venice Project invitation tokens, for the first two mega-uber value readers to get in touch.

UPDATE: Both tokens have now been claimed, establishing two new nodes on the Venice network in the UK and Northern California. I would very much like to ensure that more exotic corners of the globe get their fair share next time around. Should I receive any more tokens, I'll once more offer these up on a first-come, first-served basis.