An Ignoble Experiment

Tom Wheeler, the FCC's new chairman, wants to get the TDM to IP transition moving and has proposed that the regulator issue an order on the matter at its upcoming meeting in January, a move that AT&T (NYSE: T) applauded. The incumbent's own IP migration has been stymied by the Commission's slow pace on the matter.

Wheeler (Image source: CTIA)

Wheeler said in a blog post on Tuesday that this migration is the "Fourth Network Revolution" and that the Commission needs to stop looking over proposals and make decisions to move the process forward.

The FCC issued a public notice and sought comments from industry players like AT&T last November on the transition and set up the Technology Transitions Policy Task Force.

At that time, Wheeler's predecessor Julius Genachowski said those trials would look at the impact of IP transition in areas like next-generation 911, transitioning consumers from wireline to wireless services, and interconnection of VoIP traffic that's provided by incumbents and competitive providers.

"The Commission sought comments on those proposals and expanded the scope of its examination with the creation by Chairman Genachowski of the Technology Transitions Policy Task Force, which issued a further Public Notice in May," Wheeler wrote in a blog post. "To that, and the earlier proceedings, the Commission has received more than 400 comments, letters, and presentations from companies and organizations, including incumbent carriers; rural carriers; competitive carriers; cable companies; wireless providers; VoIP providers; federal, state and local government entities; telecommunications equipment manufacturers and service providers; public safety entities; and public interest organizations."

During the FCC's next meeting in December, the task force will present a draft order that will focus on what impact transition experiments by carriers like AT&T would have on consumers and businesses, and on collecting data that will supplement the lessons learned from the experiments. Wheeler said another major component of the order should be how consumers are informed and protected.

This new development was applauded by AT&T, one of the lead advocates of this transition.

The telco has expressed frustration over the FCC's slow pace in giving it guidance on the next steps of conducting TDM to IP trials in two of its 4,500 wire centers.

"Our current infrastructure has served us well for almost a century but it no longer meets the needs of America's consumers," said Jim Cicconi, senior executive vice president-External and Legislative Affairs for AT&T, in a blog post. "The transition to broadband and IP services that has already begun is driven by consumers who are moving to the Internet and choosing to connect in ways not imagined just a decade ago. Like any change it requires planning. The geographic trials directed by Chairman Wheeler will provide the real world answers needed to ensure a seamless transition."

For more:
- see Wheeler's blog post
- and AT&T's response

Special Report: The 25 Most Powerful People in U.S. Wireless & Wireline 2013

Related articles:
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IP technology transition trials proposed by FCC met with mixed response
TIA backs AT&T's FCC proposal for TDM-to-IP trials
Taking care of consumers in an IP world
TIA 2013: Discovering the silver lining in the TDM-to-IP transition

Read more about: IP Migration, Tom Wheeler
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2. Verizon's Shammo: We won't buy other providers to expand internationally

By Sean Buckley

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Verizon (NYSE: VZ) sees continual momentum for expanding its enterprise services outside of the United States, but according to Fran Shammo, EVP and CFO, the telco can do it without having to purchase other service providers.

Shammo (Source: Verizon)

"We want to expand with our platforms and our cloud, and Hughes Telematics is one of those platforms, but we don't think we need to own the underlying network to be successful internationally," Shammo said at the Morgan Stanley 13th Annual Technology, Media & Telecom Conference. "You will see us expand internationally but not necessarily buying network companies to do the expansion."

One particular area of growth Verizon sees on the international front is cloud services via its Terremark data center subsidiary, particularly in Latin America.

This trend was illustrated in its Q3 2013 business sector revenue.

Verizon reported that global enterprise strategic services, including cloud and data center services, security and IT solutions, rose 5.2 percent year-over-year.

In tandem with cloud growth, the telco sees great potential with its Hughes Telematics machine to machine (M2M) platform which runs over the Terremark cloud infrastructure.

With two of Hughes Telematics' largest customers residing outside of the United States, Shammo sees new opportunities to grow its international cloud and M2M service presence.

"Our Terremark acquisition allowed us to have data centers throughout the world and that platform now sits in those data centers," he said. "We believe that we can deliver machine to machine, but we can do it outside the States by utilizing other people's networks."

In addition to selling data center space and M2M, Verizon sees potential in virtual cloud services.

Leveraging the assets it purchased from CloudSwitch, this service allows any size business to go online and select their own desired security and service levels. The service is available to select customers participating in a beta trial. Verizon plans to make it commercially available in 2014.

"We think this will be extremely competitive in the small to medium business space and also be appealing to enterprise because it comes with the security side enterprises are looking for," Shammo said.

Regardless of the growth it forecasts for cloud and M2M service, the telco continues to weather a rough storm where enterprises are delaying spending or are not spending at all.

"The good news is it's not getting worse, but the bad news is it's not getting better," Shammo said. "At least in the States, we have too much uncertainty around what the tax reform looks like."

For more:
- listen to the webcast

3. China Unicom deepens North America foothold with new Seattle PoP

By Sean Buckley

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China Unicom Americas (CUA), the North American subsidiary of China Unicom, has established a new point of presence (PoP) in Seattle as a way to extend of its data services to customers in North America and Canada.

Similar to other international providers like Telstra Global, CUA is focused on providing solutions, including T1/E1 and up to 10G waves to multinational corporations based in China and the U.S. that have offices in both regions.

With this new PoP, CUA said it will be able to extend its product and service lines closer to its customers, including access to low latency routes to major financial hubs such as New York and Chicago.

What's significant about this is it enhances the service provider's reach in another key market.

By adding the Seattle location, CUA now has a total of eight North American PoPs, a list that also includes New York, Los Angeles, San Jose, Miami, Dallas, Chicago and Toronto. This creates another hub that MNCs can use to get access to its network in the 100 countries it serves.

Wu Yitao, president of CUA, said in a release that "The Pacific Northwest region in particular is experiencing a surge in its economy, drawing in businesses that require a strong network with an international reach."

In recent months there has been growing activity by Asia Pacific-based service providers expanding their presence in the United States.

Besides CUA, Telstra Global and Pacnet established E-NNI (External-Network to Network Interconnection) agreements with the likes of CenturyLink (NYSE: CTL) and tw telecom (Nasdaq: TWTC) to give their existing and new clients other options to get access to the Asia Pacific market where they are seeing new growth opportunities.

For more:
- see the release

Read more about: China Unicom
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4. NBN Co. outlines plans for FTTB pilot, invites alternative providers to take part

By Sean Buckley

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Australia's NBN Co. has invited the country's retail service providers to take part in a three-month fiber to the building (FTTB) pilot that it plans to start in January.

The service provider plans to build out FTTB-based services to serve up to ten multi-tenant units (MTUs), including a mix of large office complexes and apartment blocks, which will comprise up to 1,000 individual homes and offices.

Under the proposed plan, the service provider will use a hybrid fiber and copper or coax strategy.

It will bring fiber cable to a node, which would typically be located in the building's wiring closet. From that point, it would connect to the existing wiring to deliver services to each office or living space.

Gary McLaren, NBN Co.'s CTO, said in a release that "The pilot is an essential step along the way to determining the right mix of technologies" to deliver faster broadband service "as cost-effectively and as affordably as possible."

This new development is another sign of how the new Australian government wants to examine the idea of replacing current fiber to the home (FTTH) network strategy with what they say is a lower-cost fiber to the node (FTTN) hybrid fiber/copper architecture.

For more:
- see the release

Read more about: FTTB, Australia
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5. AT&T and Verizon add 828,000 broadband subs in Q3, but overall growth slows

By Sean Buckley

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