The migration of consumers from video to broadband viewing and the subsequent change in subscriber numbers in different segments of providers' quarterly reports, is telling: cable operators are losing video subscribers, slowly but steadily. But the raw numbers may not tell the whole story. Editors Jim O'Neill, Sean Buckley, and Steve Donohue take a closer look at the subscriber numbers issue, what those numbers mean for telcos offering broadband and IPTV services and where cable MSOs really stand financially as their video subscriptions drop. Special Report

Time and again Google has made the claim they are not a carrier and thus shouldn't be succeptible to the same regulations as phone companies. In the past we've covered the call termination debate where companies pushed for Google to follow regulations other companies had to follow. Now with the new calling available in Gmail, should Google be even more afraid of being regulated like other companies providing phone service?

A group of analysts come together in a recent eWeek article to chime in on this issue and the issue seems to really come down to what Google is actually offering. Google is providing an end point for calls through a free software based messaging platform, but broadband services are still being provided by telecom companies. Of course even with that being the case, it's not like telephone companies can manage the phone service Google is providing over their wires--which is often what the FCC regulations are meant to affect.

One analyst at Gartner thinks that if the FCC does decide to classify Google as a carrier of sorts, the company might just drop its offerings rather than go down that road.

For more:
- read the whole debate at eWeek

Related news:
Google VoIP offering makes 1 million calls in first 24 hours
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AT&T finds Google Voice blocking calls to convent
AT&T and Google spar over Google Voice

I stand corrected. Every report that shows subscribers dropping from telco rolls has had me thinking that they've just switched to using VoIP service over broadband or their cell phones. The broadband move to me usually meant that when a telco subscriber jumps, they really just jump to the telco's broadband offer. Apparently, that is not true anymore... It looks like the VoIP loving cable companies are stealing them all. Article

Research and Markets has debuted a new report offering some insights into the growth of the VoIP market. The "US Business VoIP Overview: Optimization Trumps Expansion" report takes In-Stat's recent claim of 79% penetration of VoIP in businesses by 2013, and states that much of the focus in the industry will be on optimizing current systems and upgrading headquarters rather than bringing more VoIP systems to satellite offices.

The 79 percent figure represents company's having VoIP deployed in at least one of their location, meaning the universal use of VoIP throughout these companies is not being implied. The study also found that Hosted IP Centrex is now the leading revenue generator over Broadband IP Telephony for carrier-based business VoIP solutions.

For more:
- read this release

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MetaSwitch announced it signed more than 200 new ILEC customers in the second-quarter and now has deployed its IP communications software to more than 200 ILECs. The company said the strong growth in this market shows that while some providers are hesitating to deploy new network equipment during the recession, others are going forward with IP transitions to position themselves to grow when the economy recovers.

Carol Daniels, director of marketing for MetaSwitch, said the company's reputation with other ILECs will position it well to try to win business from ILECs receiving broadband stimulus grants.

"It's (broadband stimulus) definitely an opportunity, and we're assisting customers with information about it whenever we can," Daniels said. "There are a lot of different sources for information, so our carrier customers are still deciding, but momentum is building, and with more info later in the year coming, I think they'll get the answers they're looking for soon."

Daniels said that when Tier 2 and Tier 3 carriers are considering a network upgrade, MetaSwitch is almost always one of the companies invited to bid, because of positive references from existing ILEC customers. While competitors surely will balk at that assessment, MetaSwitch's solid customer acquisition in this space is difficult to ignore. 

For more:
- see the press release here 

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TeliaSonera subsidiary NextGenTel announced it purchased 23,000 VoIP subscriber lines from Tele2 Norway. NextGenTel will pay roughly $15.5 million for the VoIP lines and 74,000 additional broadband subscriber lines.

The acquisition, which is pending approval from a Norwegian regulatory body, also will give NextGenTel technical assets and supplier contracts. 

For more:
- see the voip.biz.news.com article here 

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TeliaSonera taps Infinera for U.S. network

Signals Telecom Consulting released the second edition of its "Analysis of VoIP Services: Latin America," which predicts that though regulation and low PC and broadband penetration have slowed VoIP growth in the area, the VoIP services market will surpass $10.2 billion in revenues by 2014. The report, which details VoIP regulation, adoption and projections of VoIP revenues in Latin and South American countries, predicted that Brazil will still be the market leader in 2014, accounting for 38 percent of the area's VoIP revenues.

Signals predicts strong growth for wireless VoIP and estimates that revenues for these services will cross the $1 billion mark in Brazil and Mexico in 2012, and Argentina and Venezuela in 2014. The report also found that VoIP proliferation has led to the establishment of three operator types in the region: facilities-based, non-facilities-based, and hybrid partnerships between the two.

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SinglePipe, a wholesale VoIP provider, announced it has closed $5.1 million in Series B funding from Chrysalis Ventures, Kentucky Science and Technology Corp. and Meritus Ventures. SinglePipe, which is based in Louisville, Ky., said it will use the funding to expand its customer base of cable companies and broadband providers.

SinglePipe separates itself from other wholesale VoIP operators by owning its own voice network. It expects to reach profitability this year.

"SinglePipe stands alone in the unique position to deploy and deliver customized and scalable Digital Voice solutions to cable and other broadband providers," said  Matt Phillips, CEO of SinglePipe Communications. "Our services require minimal investment and create consistent streams of additional revenue for our customers, and at the same time, meet the complex demands of today's telecommunications marketplace." 

For more:
- see the Venture Beat article here 

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SaskTel is terminating its WebCall VoIP service after five years. The company said that there were only 130 WebCall customers in Saskatchewan and 270 outside of the province.

A spokesperson for SaskTel said WebCall had "limited marketing success" and had been operating "at a significant loss" as a result.  WebCall customer were informed of the service termination in January and were told to find an alternative solution prior to March 1. 

Customers may have some headaches transferring their numbers, depending on where they live and who they transfer service to; doubly so if they have waited until the last minute to find another provider.

SaskTel joins a number of larger phone companies that have pulled the plug on VoIP services, but given the small number of customers that were using its service, it is unlikely the company will be launching a new service under a different brand and/or infrastructure. Both AT&T and Verizon closed out their initial stand-alone consumer VoIP offerings last year and launched distinctly different offerings more aligned with their broadband services.

For more:
- Leader-Post story.

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By Carl Ford

When I presented to the staffers at the NARUC meeting last week, I suggested that given the rural initiatives, the states were the ones to know where the money was most needed. {Slides available upon request}

The stimulus bill was a boom for rural broadband, except the guidelines are subject to discussion. The National Telecommunication and Information Administration was given $4.7 billion to administer, and it's allowed to allocate a portion of it to the FCC. The Rural Utilities Service in the Department of the Agriculture is the second beneficiary of the stimulus, receiving $2.5 billion.  There is also a $200 million initiative in the stimulus that allows Fiber to the Library with a Wireless network available for the citizens. It's also possible that broadband strategies work their way into some of the shovel-ready strategy.  

All of this is good, and it's technology neutral, which lets networks be developed based on the local needs. This is not going to be an FCC tops-down approach in the end.  The administration has its hands full with the pressing problems in other places. I have nothing but respect for the people working with the administration that I know, and I believe we will see good policy decisions in the future.

But the opportunity right now is local.  And if all politics is local, so is access.

Mark Hewitt shared with me some slides his partners have been presenting on getting the bandwidth build-out through out all portions of each state. As someone who was around when the Internet first became commercial, I have been very aware of holes in the network. So I commend this initiative and hope that they find the appropriate people in each state to listen to their approach. 

If you are a user you will not sit there and say to yourself, "I know there is a hole in the Internet." With apologies to UPS, the Internet is designed to show you "what brown can do for you." As in brown outs. When Taiwan suffered a Digital Tsunami in 2007 with seven of the eight undersea cables cut, the Internet was still there, slow, but there.

That's the beauty of a best-effort network. It gave its best effort to find the way through. The fact that the cables were cut did not mean that bandwidth tools were put in place to block some traffic. Instead the Internet suffered the tragedy of the commons as it was designed to do.

Now the question gets reversed, when all this bandwidth gets put in place how can everyone benefit.  A build-out at the edge that comes back to a single backbone is not a strong or self-sustaining answer. The goal has to be to expand the core's ability to support the rural connectivity. My hope is the parochial build out will find balance in a cohesive national and international strategy.

So I vote for state rights to help form a more perfect union of access.

With billions of dollars earmarked for broadband stimulus, Skype wants Silicon Valley to know how spending should be tweaked to "protect the innovation" for which the area is known. Currently, NTIA is slated to distribute $4.5 billion, while the Department of Agriculture will get to hand out $2.5 billion.

In an op-ed piece published Feb. 12 in Mercury News, Skype President Josh Silverman says the broadband build must "adhere to openness standards" to truly be effective. Skype wants net neutrality requirements as a condition of government grants and tax credits, otherwise there will be an "inevitable trend" toward closed networks. After all, the original Ma Bell - AT&T before the breakup - once kept the Mickey Mouse phone off of its network, so who knows what its descendants might do.

Of course, the most interesting irony here is that while Skype is owned by eBay, the company's corporate headquarters is in Luxembourg and a lot of its executives are based in London. Regardless where it calls home, Skype wants to make sure that U.S. taxpayers build a broadband network open to its best interests.

For more:
- Mercury News runs Skype op-propaganda piece. Article.

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The day before the Hub VoIP phone hits the shelves at more than 2,500 stores throughout the land, Verizon Wireless has announced pricing on both the gear and the supporting VoIP plan.

A VoIP calling plan through Verizon Wireless will cost around $35 per month and includes unlimited calling in the U.S., Puerto Rico and U.S. Territories and Canada, plus unlimited messaging to and from Verizon Wireless phones with Unlimited Messaging. The Hub will cost $199.99 after a $50 mail-in rebate with a two year agreement. Yes, you have to sign up for two years of VoIP service and pay $200 for the gear. Additional DECT cordless handsets are available for $79.99 each.

Verizon says The Hub will support service through any broadband connection--an interesting statement on many levels. Does this put Verizon into the Net Neutrality camp? Users will also need a wireless router so the Hub can talk to the rest of the Internet world.

Once connected, it serves as a smart device to interface with Verizon Wireless services such as VZ Navigator, Chaperon and V CAST video entertainment.

For more:
- Convergence run amuck! FierceWireless writes about wireline VoIP.

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By Carl Ford

I want it to be understood from the beginning that this is not an attack on our new president!  President Obama, if you are reading this, I feel for you as you navigate the hopes of our pluralistic society. This is about my little parochial part of the pluralism you face.

I remained quiet this last month and watched as friends started working for the administration transition team. 

The VON Coalition submitted a document about the boost to the economy that VoIP and broadband investment could provide and claims these investments could create 2.4 million jobs. On Gordon Cook's Cook Report mailing list, we were informed we could impact the future commissions thinking on the USF. The USF is considered a feather in the cap of the people who worked on it in the Clinton Administration, I am afraid. The laurel was not well-treated by the group.

So, I listened intently to the inaugural address for indications of where the federal stimulus funds might go within the industry.

I realized that Roosevelt did not speak of the WPA and the TVA when he did his inaugural address, but I was listening for a priority for the Internet. Here is what I heard: "We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together." Fourth on the list!  And what a list! 

A former Russian leader said jokingly, "politicians are the same all over, they promise to build bridges even where there is no river."  Perhaps "the bridge to nowhere" was on his roadmap. It's easy for politicians to fund a bridge that's tangible and allows everyone to feel like Robert Moses.

And the electric grid! With Al Gore and T-Boone Pickens fighting for the cause, who can argue with that? As a matter of fact, it would be anti-American to not be in favor of energy.

So that brings me to our portion of the pie, and I've got to say, it feels pretty slim. When I heard, "that binds us together," I immediately thought of rural initiatives, which put me back into USF. So while I expect an administration that is Internet and VoIP friendly, I do not expect the gold rush of 1996 to bring new carriers into our world. The economy is too sick for a "Field of Dreams," "if you build it, they will come" mentality. I expect VoIP will find its way as part of bigger initiatives.

On Gordon Cook's list, I advocated that E-Rate was the best part of the USF and should be expanded to enable local integration of wireless services from schools and libraries. I believe that High Cost USF can be pitted against E-Rate to enable local community solutions. It would also allow the industry to support education and telemedicine, which fits into the next line of the Presidents speech, "we will restore science to its rightful place and wield technology's wonders to raise health care's quality."

Given what we heard, I believe this is the best we can hope for at this time.  It does not promise a boom, but it's change we can live with.

With a flourish of dramatic language, Verizon Wireless (yes, the cell phone guys) announced "the new touch screen home phone system" -- a.k.a. Verizon Hub.  You should be able to get one at a storefront on February 1, with more details on pricing to be announced soon.

"In a dynamic move sure to rattle devotees of plain old home phones," says Verizon Wireless in its Friday press release. "...Only Verizon Wireless can launch a new touch screen home phone system designed to replace old-style home phones with a souped-up home communications system."  The release goes on to say that the device will plug into any broadband connection, be it FiOS or Verizon DSL or "any other high-speed service provider" and will bridge wireless and wireline connectivity.  Hub also "reinvents" the home phone on your kitchen counter and ... well, you get the picture.

The reason why Verizon Wireless is peddling this gizmo is easy: It has Verizon's biggest consumer-facing "footprint" in terms of stories and selling hardware. The landline guys dismantled their storefronts and consumer hardware sales years upon years ago.

Hub will work with "virtually any" broadband provider anywhere in the U.S. and comes out of the box with visual voice mail, contact list management, plus messaging options including text message calendar alerts and audible turn-by-turn directions delivered to Verizon Wireless phones from the Hub.  If that's not enough excitement, Hub can connect to Verizon Wireless apps including VZ Navigator directions, Chaperone GPS cell phone tracking, and access V CAST video content.

PC Magazine got a first look at the underlying Hub-ware at CES a couple of weeks ago. It's a VoIP-based Linux device that has the capabilities to mange a family calendar, "limited' web browsing, message center, digital picture frame and a phone. The device is based upon OpenPeak's OpenFrame design and is an 8 inch, 800x480 touch screen device with a single DECT 6.0 cordless phone that snaps into the base.  Web-based widgets deliver calendar and other types of functionality, including caller logs and visual voice mail.

Verizon has put its own proprietary services on top of OpenFrame, but it isn't clear if the cmpany has discarded access to OpenFrame widgets such as an RSS reader, YouTube, and Flickr clients.  Buttons on the OpenFrame panel allow it to sync with contact lists and calendars, send an IM or SMS, check the weather, play music, watch streaming media or whatever else you might want to do within the ranges of the hardware and Verizon's forbearance. 

Under the hood, Hub has a pair of ARM processors. PC Magazine says the device has a hacked Linux kernel and OpenPeak is more than happy to offer a full API for developing third-party apps - to carriers. All the software on top of the Linux kernel is proprietary.

For more:
- Verizon Wireless press release on the Hub
- PC Magazine got a look at the Hub-ware at CES.  Article.

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Verizon is doing a lot of "correcting" these days, after an apparent erroneous Bloomberg interview conducted out at CES last week said the company would "do away with" traditional phone lines within seven years.

The remarks, attributed to Verizon CMO John Stratton, were officially de-blogged, er debunked, by Verizon's head PR guy Eric Rabe Tuesday afternoon.  In the blog post, Rabe states:

"... neither John nor anyone else here thinks that the traditional, circuit-switched phone network will be a thing of the past in seven years.  What's often called the public switched telephone network (PSTN) is the world's most reliable, high quality, landline voice communications system. The Verizon traditional phone system will serve customers for a long time to come...John's point was, and there's not a lot of new news here, that we see that voice can and is becoming an application called VoIP on broadband networks."

Rabe goes on to say: "...the quality of VoIP voice calls and the reliability of VoIP networks are in no way superior to the quality and reliability provided by the Verizon PSTN network.  In short, there is no logical reason for a company like Verizon, with a terrific voice network already in place, to dismantle that network and replace it with VoIP... But don't expect the landline circuit-switched network to magically blink out in seven years. For many customers, the traditional phone network may be the best solution for years to come."

Bottom line: Verizon is not phasing out its copper network in seven years and has no plans to move everyone currently on the PSTN to VoIP. However, Verizon will begin moving its FiOS voice customers to a VoIP offering "very soon," according to Carol Wilson at Telephony. Moving to VoIP on FiOS will enable Verizon to deliver some additional services.

For more:
- Verizon head PR guy blogs a rebuttal.
- Telephony and Carol Wilson gets clarity from Verizon. Blog.

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Verizon FiOS getting VoIP in early 2009 - FierceVoIP

 By Carl Ford

Looking back on 2008 and its personal impact, I can safely say it was the worst year ever for me.  And yet, even in this winter of discontent, I have hope for a new broadband policy that enables new entrants and focuses on delivering high-speed Internet services throughout the country.

Jim Baller and Casey Lide have been working hard to form the U.S. Broadband Coalition (see http://bb4us.net/index.html) with the noble goal of having associations and companies agree to a common framework for measurable delivery of national broadband services.

To join the effort, a call to action must be agreed upon that includes a commitment to participate in the forum and attest to: "The undersigned, representing a diverse array of America's communications providers, high technology companies, manufacturers, consumers, labor unions, public interest groups, educators, state and local governments, utilities, content creators, foundations, and many other stakeholders in America's broadband future, call on President-elect Barack Obama and the next Congress to make the development and initial implementation of a comprehensive National Broadband Strategy a high national priority in 2009. "

The declaration then makes broadband more important then any bailout strategy with the statement that innovation, economic growth, job creation, educational opportunity and global competitiveness, and several other benefits are at stake. Then the declaration points out that we, the country that started the Internet, has fallen behind.  And then they set forth these goals.

a) Every American home, business, and public and private institution should have access to affordable high?speed broadband connections to the Internet.

b) Access to the Internet should, to the maximum feasible extent, be open to all users, service providers, content providers and application providers.

c) Network operators must have the right to manage their networks responsibly, pursuant to clear and workable guidelines and standards.

d) The Internet and broadband marketplace should be as competitive as reasonably possible.

e) U.S. broadband networks should provide Americans with the network performance, capacity and connections they need to compete successfully in the global marketplace.

With these goals in mind they have put together a framework that aims to stimulate accountability, adoption, assessment and investment. Their goal is to present their efforts sometime in the spring of 2009.

I can also point out the FCC's decision on White Space as a highlight. The Wireless Innovation Forum, with Rick Whitt from Google and other representatives from companies like Dell, Microsoft and Motorola, deserves credit here.

Tom Evslin sees this as being popular in urban areas, but I speculate that adoption by local broadcasters (either TV or Radio) in rural areas could be more competitive strategically with the support local online advertising.

While I may sound like a U.S.-Centric "homer," I have also been hopeful for policies in countries around the world, including India. 

As the season gives us lessons of endurance, renewal and hope, I wish you all peace on earth and good will to mankind.

There's a lot of short-sighted glee in the prospects of money for broadband buildouts across America. The money would be part of an economic stimulus package, but all parties better step back and think long and hard as to the consequences here.

With strings being attached to the financial sector bailout and the in-process auto manufacturing bridge-loan bailout, it's hard to see a scenario where federal dollars are offered without some clear performance criteria in exchange. And maybe some other kickers.

And what would those criteria be, hmm?  This would be a fun question to ask Kevin Werbach, but since he's hunkered down at the FCC looking at the skeletons in Kevin Martin's closet, I'm going to have to speculate on my own.

Widening out broadband reach is an obvious goal, so expanding the reach of networks beyond their initial build-outs sounds reasonable. However, you want to have a sustainable business model - not a black hole for more money - once a buildout is complete. No sense in building a broadband bridge to nowhere.

Accelerating builds may be another option to examine. Verizon's FiOS builds in Washington D.C. and Philadelphia are currently projected to take around seven years, with the most economically sustainable (i.e. profitable) areas being built first. This is just good business sense; if you can't make a profit, you can't afford future investments. Can providing a one-time lump sum cut the build time in half?  It's an interesting question.

Will a pledge to Net Neutrality be required?  Or no bandwidth caps? Suddenly, federal money might look a little radioactive.

Expect to see a lot of sustained lobbying from the telcos in the coming months. They'll want to get as much cash as they can without a lot of strings attached, but I can't see the incoming Obama administration providing a free lunch for anyone.

- Doug

Across the pond, cable operators and fiber-to-the-home operators are offering triple-play services that include 100 Mbps service for prices as low as $38 a month. France's Numericable's $38 service also includes phone service and 120 TV channels, and can be upgraded to 100 Mbps downstream capabilities and unlimited national calls for $25.26 per month.

Pricing is higher in other nations - as there is less competition than in France -- but cable broadband service is making a significant impact in the Netherlands, Finland and Spain. In Finland, a basic triple play service offered by Welho is around $63.41 per month and includes 100 Mbps downstream/10 Mbps upstream, a basic TV services package and some voice services. 

It is tempting to call voice services as "too cheap to meter" at prices like these, but we're not quite there yet.

For more:
- Light Reading talks about Europe triple play competition. Article.

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France ISP offers $40 triple play - FierceVoIP