Broadband is dead?

R. Daneel Olivaw

http://www.pbs.org/cringely/pulpit/pulpit20011011.html

taken from:
http://slashdot.org/article.pl?sid=01/10/13/0853210&mode=thread

Now /. is a load of whoring trolls for the past year and is mostly worth avoiding these days, but there is some good info on the US broadband situation.

Eircom could easily use all this negative publicity as a reason to delay rollout here ("not profitable to invest", etc., ). So once again, FRIACO should be the 1st and foremost objective so that if the worst happens, the basic PSTN service is country wide.

I blame the advent of all these crappy "free" ISPs. I don't know how any of them even can exist if I don't pay them any money. Smells like Eircom really own them all...............

d-j-k

Except for UTV net /DNA net

Eircom =
Indigo / Eircom.net

Esat:
Oceanfree.net, iol, esatnet, esatclear, what was cis.ie, and a few other small ones that were swallowed up

There is a serious lack of competition in the ISP market in Ireland, it is strange that the regulator didn't look at these aquisitions more carefully at the timee.
If say Tesco bought Centra/Supervalu and Superquinn there'd be a huge investigation and they'd prob. be blocked!

So why did they allow esat & eircom to swallow up all of the independent ISPs??

Shinji

I'm amused at his curt dismissal of cable rollouts... We've all known for ages that DSL isn't a viable option in the broadband market, but cable providers are doing quite nicely out of cablemodem. They have the infrastructure already there, the additional equipment needed to do high speed data over the network is ludicrously cheap, and most importantly, the companies already have the experience of integrating new services into their product - such as the inclusion of phone lines along with TV a few years back, and subsequently dial-up net access over those phonelines.

Also, er, correct me if I'm wrong, but since when has Excite@Home been a cable company? AFAIK that was an ADSL provider...

hudson806

Originally posted by Shinji
I'm amused at his curt dismissal of cable rollouts... We've all known for ages that DSL isn't a viable option in the broadband market

Err, really? I hadn't heard that.

, but cable providers are doing quite nicely out of cablemodem. They have the infrastructure already there

Emm, nope. In the US this is usually true-ish. Try upgrading a legacy cable network(such as in Ireland and parts of Europe and the US) to provide broadband though - you almost need to replace the entire thing.

, the additional equipment needed to do high speed data over the network is ludicrously cheap

Good God! Where do you shop for broadband upgrade equipment? NTL would probably love to know!

and most importantly, the companies already have the experience of integrating new services into their product

Unlike the telcos which have developed from PSTN voice phone call companies 10 years ago to being ISPs, Data storage houses, Data Service Providers, DSL, ISDN, ATM, STM, SDH; the list goes on and on.

Also, er, correct me if I'm wrong, but since when has Excite@Home been a cable company? AFAIK that was an ADSL provider...

Err, they've been a cable Internet provider since always.

All that said however, I agree with your basic premise that Cable modem is a very attractive option and that decent cable modem service can kick DSL's ass. Its just that its not quite as simple as you appear to believe.

SkepticOne

If you look at any survey of broadband usage, you will find that, in countries where broadband usage is high, you also have high cable modem usage. In general cable broadband is more common than ADSL (with a few exceptions).

I believe that ADSL and similar technologies were developed by telcos as a means of getting back some of the home broadband business. Cable Internet is certainly older than residential ADSL as a commercially available technology.

The problem in Ireland is that cable television is a mature market. It started when people did not want to be limited to just one channel about 25 years ago. Very few people in Ireland are aware that the technology is capable of anything other than rebroadcasting television and take for granted that Internet access involves a phone call.

Cable Internet requires two things:

1. A higher grade of cable running along the houses. This is fairly common in the US anyway where 50-60 channels are not unusual in an analogue system. With digital you get hundreds of potential channels.

2. Fiber to each node. This requires fresh digging up of the streets. With pure rebroadcasting (including digital), all you need is amplifiers at each node.

Take for example NTL, they already have a basic CATV system which they bought from Cablelink. Because it is so old, it is just about capable of one-way analogue TV (in some areas digital). But since people are happily paying £10/month (now more) for extremely crude technology, where is the financial incentive to upgrade? The fact that the ODTR is rigid in it's desire for non-interactive 35 channel digital TV does not help.

Since NTL (or Chorus) are not interested in competing with Eircom, Eircom retain the (wholesale) monopoly on Internet access. Consequently, from a marketing point of view, they are not forced to bring out ADSL at prices which are competitive with cablemodem Internet. This is deliberately ingnoring the actual cost of delivering the service which is not inconsiderable.

ADSL at £60 per month would only attract the heavy Internet users and these are already paying upwards of £100 per month on PSTN and ISDN anyway. Without competition therefore, Eircom will price ADSL in such a way that there is no net loss when people migrate from ISDN and PSTN.

Unfortunately, this means that the market is very small and Eircom will be aiming for the Business niche. It will be interesting whether the market is big enough to rollout nationwide.

If Chorus and NTL were serious about cable and wireless internet, Eircom would be forced to offer ADSL at something approximating the European price. It is unfortunate that a requirement for cable Internet and telephony was not written into the cable operators' licence requirements instead of non-interactive digital TV. I think this would have been a reasonable requirement in return for exclusive licences and would have made the market more competitive at the 'local loop' level.

Now it will be a perpetual battle between the regulator and Eircom to force competition over Eircom's network. No company willingly allows competitors to use its own assets.

yellum

the broadband is dead, long live the boadband !

I'm sorry I couldn't resist.

SkepticOne

[Duplicate post]

NeilF

Broadband IS dead, or certainly dying. By this, I mean that the industry for providing homes and individual users with Internet access at speeds in excess of 500 kilobits-per-second is not generally viable

No smart answers, please, but what is the average user going to do with broadband?

Eircom.net have a 'broadband' portal with links to 'multimedia content' such as CNN and BBC. The idea, I presume, is that in a world with broadband we'll log on and watch the news in RealVideo whenever we want. When I first read about the WTC attack (on Slashdot, of all places!) I tried going to CNN.com, news.bbc.co.uk etc. None were responding. After that I just watched Sky News.

Most people here should be familiar with the history of the Internet. I think it performs at its best when it is used purely for the exchange of information and data: email, web pages in simple HTML, USENET etc. I started using the net with a 14.4 modem. Now, six years later with a 56k modem (and broadband in college) I'm doing the exact same things on-line such as using email, using the web for research and downloading the odd program. That's the Internet to me. It won't replace my television, stereo or toaster.

All most of us want is just to keep doing what we are doing and pay less for it.

American arguments cannot be applied here. People in Ireland will choose ADSL because it will reduce their phone bill and not on technical merit or need or a desire to have broadband. Until we have a FRIACO product in Ireland any statistics on ADSL will be skewed because there will be hundreds or thousands with it to do the most mundane things. Does a business need ADSL to check a POP account a few times a day, to upload or work on a website etc.? Does a home user need ADSL so they can send emails, do some research, catch up on some news or buy a once-off item (like a book from Amazon)? Seem like overkill to me.

We will need ADSL (and broadband) at some point in the future but we have to learn to walk before we run and what is important now is getting the population of Ireland on-line cheaply so that, in time, there will be a demand for broadband. Does anyone remember a Dilbert cartoon where he has a videophone but can't use it because no one else has it? Broadband is the same. We either all have it or don't have it.

SkepticOne

Originally posted by NeilF
We will need ADSL (and broadband) at some point in the future but we have to learn to walk before we run and what is important now is getting the population of Ireland on-line cheaply so that, in time, there will be a demand for broadband. Does anyone remember a Dilbert cartoon where he has a videophone but can't use it because no one else has it? Broadband is the same. We either all have it or don't have it.

I agree with this. FRIACO is far more important in bringing proper use of the Internet to the bulk of people. By proper use I mean being able to surf the net and not worrying about the clock.

Will Eircom be in favour of it? I don't think so. It is down to legislation to change regulatory power in such a way that the regulator can order Eircom to provide a certain product at a certain price. Currently, all they can do is monitor negotiations between Eircom and an OLO and when the negotiations break down, they can choose to intervene. If Eircom are opposed to something, then the negotiations will break down and so the intervening negotiations were pointless although it seems very reasonable on the surface.

Eircom have said that they are not, in principle, against FRIACO. Obviously [they say] it must be cost effective. They further add that it should not be regarded as a means of cheap Internet access but simply as a means of providing certainty of cost to the user.

That was said at the IrelandOffline meeting. However we cannot evaluate the statements without figures. If it is not going to be "cheap", how much will it cost? £50, £60 per month? Eircom realise that heavy Internet users will be migrating over to FRIACO based products. As we have seen on another thread, some of these users spend hundreds per month on Internet access. So, to avoid a net loss, Eircom are going to price FRIACO high. Probably so high that it is not worth ISPs taking up the product. It certainly won't achieve the social goal that is desired.

So the only option is to impose FRIACO on Eircom. This involves the State interfering in business and Eircom will protest. I think it is perfectly acceptable ethically. Eircom have hold of so much of the national infrastructure, and the country is so small that they are unlikely to ever lose the dominance over the market even in an upturn in international finances. Eircom know this and naturally wish to take advantage of it. However, it is not in the country's interest to have a single company milk Irish consumers simply because the Internet is becoming increasingly important. The network was never built up with that in mind.

The example of Britain and other countries proves that it is technically feasible. Will it cost Eircom a lot? Only if you believe they have the right to charge by the minute in the first place. FRIACO won't cost Eircom because the Irish people, through the regulator, are telling them that they have no right to charge more; that they have been unfairly charging people prior to this and that it is now stopping. As the Internet becomes more and more important, Eircom should not be making more and more money simply because they own the lines and users have no other choice.

The other advantage with FRIACO is that it will encourage Eircom to roll out DSL faster and at a more reasonable price than before, since this will be the way to make more money out of Internet access. That, in addition to more competition with cable, has been the case in Britain. It is very much the 'stick' as opposed to the 'carrot' in terms of encouraging broadband. But the stick can be very effective; particularly a big one.

R. Daneel Olivaw

SkepticOne:

That was said at the IrelandOffline meeting. However we cannot evaluate the statements without figures. If it is not going to be "cheap", how much will it cost? £50, £60 per month? Eircom realise that heavy Internet users will be migrating over to FRIACO based products. As we have seen on another thread, some of these users spend hundreds per month on Internet access. So, to avoid a net loss, Eircom are going to price FRIACO high. Probably so high that it is not worth ISPs taking up the product. It certainly won't achieve the social goal that is desired.

But, the users paying loads every month for net use have been said to number *not that many* as an excuse for not providing either FRIACO or ADSL......so the profit from them is marginal really.

I would say the person who spends £5 a month on checking email once a week (you know, the type who logs on and then starts writing email....), would probably be happy to pay £10-20 a month to be guaranteed a fixed amount. That more than anything would increase takeup from the 95% who don't use the net very much due to not thinking in terms of 60p/hour (like everyone here does probably).

NeilF:

American arguments cannot be applied here. People in Ireland will choose ADSL because it will reduce their phone bill and not on technical merit or need or a desire to have broadband. Until we have a FRIACO product in Ireland any statistics on ADSL will be skewed because there will be hundreds or thousands with it to do the most mundane things. Does a business need ADSL to check a POP account a few times a day, to upload or work on a website etc.? Does a home user need ADSL so they can send emails, do some research, catch up on some news or buy a once-off item (like a book from Amazon)? Seem like overkill to me.

No they don't, but then again, does a Mondeo driver *need* a car that can do 110mph? It's almost twice the legal limit.......heck, a Micro can hit 90mph on a good day. Need/want is not something you can easily quanitify (and not something that anyone, especially Eircom, have the right to), as at some stage people said "well why would I *need* a house, this cave/tent is just fine".

I know a few people who don't use the net for much besides email and news in the US and they all very very very much like it; ask anyone you know would they rather give it up, and pay maybe £5/month minimising calls (like here) or would they as average home users like to continue to pay a flat $40 a month for highspeed 24x7 uncapped 512/128Kbit/sec ADSL connections.

Do you really *need* a large fridge? You can easily make do with a smaller one and just shop more often....

What would an average home owner *need* for a computer anyway.......


"I think there is a world market for maybe five computers." — Thomas Watson, chairman of IBM, 1943.

"There is no reason anyone would want a computer in their home." — Ken Olson, president/founder of Digital Equipment Corp., 1977.

Shinji

Err, really? I hadn't heard that.

It's not viable for the telcos under the current profit model. The figures just don't add up; DSLAM equipment is far more expensive than cable equipment, which is problem number one, but the real problem is the lost revenue from other areas created by broadband. Telcos would have to charge through the nose for ADSL (more than Eircom are planning to do for Irish ADSL) to actually make money off it, otherwise they will turn losses - and go bust, like the American ADSL companies.

Emm, nope. In the US this is usually true-ish. Try upgrading a legacy cable network(such as in Ireland and parts of Europe and the US) to provide broadband though - you almost need to replace the entire thing.

Well yes, naturally if you're running off a truly legacy system, there's not a lot you can do with it. However, the cable companies generally need to bring their networks up to speed in order to provide digital cable and iTV services, which represent their core businesses; so ultimately the networks HAVE to be upgraded.

In the US and many parts of Europe, including Ireland, this is doubly true because even where the cable is outdated, the frame relay telephone network makes it look like something out of Star Trek...

Good God! Where do you shop for broadband upgrade equipment? NTL would probably love to know!

Sarcasm aside, the equipment at a cable node to accept cable connections costs only a fraction of the price of DSLAM gear. Go check it out if you don't believe me. It's down to technical complexity - cablemodem gear is very very simple indeed at heard, DSL is not. Jesus is simple, Satan is complex

Unlike the telcos which have developed from PSTN voice phone call companies 10 years ago to being ISPs, Data storage houses, Data Service Providers, DSL, ISDN, ATM, STM, SDH; the list goes on and on.

Oh come on. 99.9999999% of what telcos provide to the home is PSTN. Stuff like DSL and ISDN hardly counts; ISDN is just PSTN 1.1, and DSL hasn't made any kind of impact yet. ATM, STM, SDH... Not aimed at the home market and not widely rolled out on business level either. Telco ISPs are the only part of your argument that holds water, and I'd argue that the introduction of telco ISPs hasn't been anywhere near as smooth and seamless as the introduction of voice, digital, interactive and broadband services on cable networks.

All that said however, I agree with your basic premise that Cable modem is a very attractive option and that decent cable modem service can kick DSL's ass. Its just that its not quite as simple as you appear to believe.

I don't believe that it's simple, but my own work and research within the field has convinced me that it's a much more sensible option than DSL. The only issue for cable right now is geographical; in the UK, Telewest and NTL (who are liable to merge within 12 months) only cover a certain percentage of the country, and in Ireland NTL only cover small areas of Dublin. Uncabled areas may well have to find other alternatives, be they RADSL or wireless...

SkepticOne

Originally posted by R. Daneel Olivaw
But, the users paying loads every month for net use have been said to number *not that many* as an excuse for not providing either FRIACO or ADSL......so the profit from them is marginal really.

Well, with some statements from Eircom, you have to reverse them to get at the truth. We know that at 20,000 users, Esat stopped taking on more users. As time went on and the Internet became more mainstream, this number might well have doubled. They got rid of 2,000 "heavy" users, but the potential over time is probably double that. Although 4000 is small in number, the actual call minutes must quite high. These are really rough estimates, I know, but I believe that Eircom were saying "not that many" mainly in order to isolate the campaigners.

I would say the person who spends £5 a month on checking email once a week (you know, the type who logs on and then starts writing email....), would probably be happy to pay £10-20 a month to be guaranteed a fixed amount. That more than anything would increase takeup from the 95% who don't use the net very much due to not thinking in terms of 60p/hour (like everyone here does probably).

I agree that it would be attractive to many of these people. On a side note: I have found that people can be paradoxical in their attitude to Internet cost. I mentioned the "nolimits" package to a number of people and they would say that £20 is a huge amount to be paying for Internet access even though they know there are no additional phone charges. Then, a couple of months later they are saying they need to cut down their internet access due to £45 phone bills. People seem to take the phone bill for granted when they sign up for "free" internet access but complain about the phone bill afterwards. They don't associate the phone bill with the cost of Internet access in the first instance.

sceptre

Originally posted by SkepticOne
On a side note: I have found that people can be paradoxical in their attitude to Internet cost. I mentioned the "nolimits" package to a number of people and they would say that £20 is a huge amount to be paying for Internet access even though they know there are no additional phone charges. Then, a couple of months later they are saying they need to cut down their internet access due to £45 phone bills. People seem to take the phone bill for granted when they sign up for "free" internet access but complain about the phone bill afterwards. They don't associate the phone bill with the cost of Internet access in the first instance.

Don't think that's quite a side note at all, it's fairly relevant. I also mentioned NoLimits to people who were spending large amounts on net phone bills - a small few of them could not reconcile the idea that 20 nicker a month might be cheaper than "free".

And as R. Daneel Olivaw said, some people really do like the idea of a fixed cost for Internet access - my girlfriend's household would be paying about six or seven quid a month for the amount they use the Net if they were paying as they used it. But they do really like the idea of paying a fixed amount every month (mind you, Esat haven't taken the money out of their account for seven months for some reason so they're effectively getting it for nothing - hey what can you do (go on esat, check out who I am - you'll never find out who they are - it's the one number that isn't linked to my account anywhere)

hudson806

Originally posted by Shinji


It's not viable for the telcos under the current profit model. The figures just don't add up; DSLAM equipment is far more expensive than cable equipment, which is problem number one, but the real problem is the lost revenue from other areas created by broadband. Telcos would have to charge through the nose for ADSL (more than Eircom are planning to do for Irish ADSL) to actually make money off it, otherwise they will turn losses - and go bust, like the American ADSL companies.

This is not true. At a port density of 1000/DSLAM, the per port cost is under 200 euro for ADSL (or about euro300 for Copper Mountain SDSL - top of the range stuff). The only recurring cost is backhaul (cheap as none of it is handled over the last mile and because it terminates at a POP)

With costs like that, you're saying that telcos need to charge about IEP100/month to have a chance of breaking even?

There is only one reason why ADSL is priced at the higher end of the market in most countries: the Incumbent has priced it in such a way as to minimise cannibalisation. In countries where there is a Flat-rate dialup option, teh Incumbent always puts the price of DSL through the floor. Why? Because Flat-rate dialup is far, far more expensive to provide than cheap-and-cheerful DSL.

Well yes, naturally if you're running off a truly legacy system, there's not a lot you can do with it. However, the cable companies generally need to bring their networks up to speed in order to provide digital cable and iTV services, which represent their core businesses; so ultimately the networks HAVE to be upgraded.

Kinda. NTL don't feel any real need to. And don't forget that Incumbents also have to upgrade their netowrks to carry data so that the weight of PSTN data calls doesn't crush them.

Sarcasm aside, the equipment at a cable node to accept cable connections costs only a fraction of the price of DSLAM gear. Go check it out if you don't believe me. It's down to technical complexity - cablemodem gear is very very simple indeed at heard, DSL is not. Jesus is simple, Satan is complex

Yup, people would have you believe that. But the truth is that DSL is only fiddly - it isn't even slightly complex (in fact, its rather simpler than cable data networks). For highish volumes, cable is somewhat cheaper than ADSL. For lower volumes and very high volumes, DSL is less expensive.

However, there can be no doubt that DSL represents an attempt to squeze the last bit of juice out of a legacy network, whereas cable modem is more like a first step into a true broadband service. The only thing they have in common is that neither is particularly good.

Oh come on. 99.9999999% of what telcos provide to the home is PSTN.

Just as 99.9999% of what cable companies provide is Television?

Stuff like DSL and ISDN hardly counts; ISDN is just PSTN 1.1

Yeah right. ISDN networks are just version 1.1 of circuit switched voice PSTN networks. I guess its not all that obvious in Ireland, since the backhaul on the PSTN networks went digital a long time ago, but PSTN and ISDN are totally, totally different things (even if Eircom pretend that the difference if that 'its like having 2 phone lines' )

The only issue for cable right now is geographical; in the UK, Telewest and NTL (who are liable to merge within 12 months) only cover a certain percentage of the country, and in Ireland NTL only cover small areas of Dublin. Uncabled areas may well have to find other alternatives, be they RADSL or wireless...

This I agree with: a combination of DSL, cable and wireless is teh only way that a reasonable amount of coverage is ever going to be achieved. But to dismiss any one of those services as too expensive, too limited or 'not a viable option for the broadband market' is just ludicrous.

BoneCollector

I think the only solution to the problem is the do it our selves
by whatever means possible.

small community based networks eventualy linking up in to a much larger network.

we need to get pro active asap or we are just kidding ourselve here.

Heres a question.....
What happens if you connect some BNC to your tv cable and the guy down the road does ithis too??
will you seen the other pc on the network???

Moriarty

Originally posted by BoneCollector
I think the only solution to the problem is the do it our selves
by whatever means possible.

small community based networks eventualy linking up in to a much larger network.

we need to get pro active asap or we are just kidding ourselve here.

Others came to the same conclusion about a month ago. Since, we have set up www.irishwan.org. The goal is to provide broadband internet access to as many people as possible - at cost. It will be a wireless network, for more info goto the site and check out the FAQ.

Dustaz

anyone know what he means by this?:

So our only real choice is to redefine "broadband" as something that can be profitable and useful at the same time, and that is what will happen over the next couple years as we apply more and smarter computing power to bringing broadband-type services to plain old dial-up modems. I'll be telling you more about this in future columns.

i have no idea what hes talking about but surely its the perfect solotion for this market.

hudson806

Originally posted by Dustaz
anyone know what he means by this?:


i have no idea what hes talking about but surely its the perfect solotion for this market.

Its not really, unfortunately. Accessing the Internet using legacy networks such as PSTN or ISDN is hideously expensive for the telco, (unless they're charging per-minute ), which is part of the reason why telcos in countries where unmetered access is available are so anxious to push heavy Internet users onto Broadband services in the first place.

There's no doubt that BB is the way to go - its better for the telco, and better for the consumer. Cringely is talking through his arse, basically