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Friday, October 03, 2003

 

"Triple Play" over DSL? It's difficult, expensive and lower in quality than alternatives

I just finished reading "Defining the Telco Triple Play", another article in Converge Digest's "Blueprint: Telco Triple Play" series of articles on telco deployment of "triple play" (voice, data, video) services. It paints a picture of just how hard it will be to push video over twisted pair cable. Some excerpts:

"Delivery of video services requires a significant investment in new technology as well as the purchase of the content itself.  One estimate is $1150 per subscriber to cover video head end, network core and CPE and software. This cost, however ignores the upgrade of the network infrastructure to support the higher bandwidths required ..."

"This raises another interesting question about the economics of the Triple Play solution: clearly Triple Play delivers the lowest available quality, on a par with some cable and digital recorders such as "Tivo" and behind satellite and the expanding of HDTV services over cable, if financial models rely on an assumption of the revenue available at the commodity end of the market, and a payback period measured in several years, it significantly raises the risks of a large capital investment ..."

"If Triple Play is the answer, then achieving 16% penetration, or 16 million households, would require an investment of 16*$1150 or $18.4 billion.  Given that the total annual CAPEX of carriers today is below $15Bn, and that none of that investment is going into infrastructure upgrades in the local loop to support Triple Play, the true scale of the investment comes into focus ..."

"TIA loop length data shows that 50% of subscribers have an adjusted loop length on 26AWG cable in excess of 9Kft, which means that ADSL cannot reliably reach them with sufficient bandwidth to enable the Triple Play. The solution is to place DSL electronics closer to the subscriber, and backhaul to the Central Office, but this network model needs to be considered also in the light of the termination of the [Sprint] ION and [SBC] PRONTO projects which sought to do just that ..."

The author, an executive at Actelis Networks goes on to explain how Actelis has products for packet based backhaul that Actelis claims can significantly reduce some of these costs.

Nevertheless, this article just reconfirms (and with some numbers I had not seen) my earlier belief that the Bells' attempts to offer a triple play over copper were going to be costly, difficult and ultimately ill-advised as opposed to using FTTP (fiber to the premises).

I live in the city limits of Rome, Georgia in a new neighborhood presumably with a new copper cable feeding it. BellSouth has yet to offer DSL here. In the meantime, I cancelled two of our three phone lines and signed up for Internet access with the local cable operator; I use my cell phone for business calls. When the cable operator offers phone service in a year or two, I'll likely sign up for it if it's cheaper.

I still fail to discern BellSouth's long-term strategy in letting this happen across its' territory.

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