5 US Net Giants $7,000,000,000,000 Trillion

Decent people lead Google, Facebook, and the other giants. They are very smart and hard-working. They are no more greedy than anyone else. However, corporate leaders in America put shareholders first. That does not always serve users and the public interest.

Seven trillion dollars of corporate power is unprecedented in my lifetime. These five companies are worth over three times as much as the top twenty-eight telcos across the world (below.) I believe each is now spending over $100 million/year for influence.

Consider a thought experiment. Would the world be better off if the giants were broken into smaller parts, say worth up to $500 billion? 

Capitalism works best with strong competition. If Instagram, Whatsapp, and Facebook how to contend with each other, they would be more innovative. One might even offer a service that didn't abuse your privacy.

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Telefonica Brazil passes AT&T, Verizon with 16M FTTH homes passed

Enrique Blanco, Telefonica CTO, is telecom's strongest believer in fiber. His Brazilian operation has now passed 16 million homes, almost a quarter of the country. The goal is 24 million in a few years. Only 3 million have purchased so far, but fiber generally catches 40% of broadband after a few years. 

From the financial call:

FTTH revenues were up 56% year-over-year, while IPTV was up 26.9% resulting in a combined growth of 47.3%. Analyst Carlos Sequeira noted, "The FTTH operation is growing super fast. Net additions are impressive. So everything is going super well." He went on to ask if Vivo could even speed up the construction.

This is part of a worldwide trend of adding fiber. In the US, Frontier is building again and talks of 3 million as it exits bankruptcy. BT is passing ~2M homes/year, up from almost nothing three years ago. Orange has just announced it's "accelerating fiber." It has 22 million connections available, most shared with Free. That's over 60% of the country. 

Two years ago, almost no one expected this kind of growth. I didn't.

AT&T killing DSL (Dave in USA Today)

AT&T will "phase out outdated services like DSL and new orders for the service will no longer be supported after October 1." Thanks to Rob Pegoraro for including me in his story. AT&T will continue offering the DSL from their field terminals, calling it fiber to the node. It's the central office connections that are being closed, most under 6 Mbps.  

DSL is now often delivering a gigabit with G.fast. Adtran is actually seeing an uptick in G.fast in Germany, served from fiber to the basement. G.mgfast is still moving in standards, for 3 and 6 Gbps. But the faster DSL requires a terminal in the field, normally backhauled by fiber. That cost money the telcos didn't feel like spending.

Verizon and AT&T, around 2011, “basically gave up on fighting cable over a third of its territory,” I told Rob. Both decided they ultimately saved money with a single, wireless network. They continued to milk the territories for whatever they could get, and hemorrhaged subscribers to cable. Bruce Kushnick discovered that both companies are now down to under 700,000 pure DSL customers, losing more every quarter.

I estimated that DSL remains the only landline choice for 3 to 6% of the U.S. LTE is now routinely 50-125 Mbps. Elon Musk is launching hundreds of low orbit satellites with DSL like latencies. There's little need for slow DSL.

Cable is the best choice for the 2/3rds of the US where the telcos haven't built fiber home.

ASSIA Equipe Work-From-Home Manager

John Cioffi pretty much invented DSL and has spent most of the last 30 years making your connections better. ASSIA developed CloudCheck, which delivered optimum Wi-Fi experience. It announced this week EQUIPE, which manages employees' WI-Fi and connection reliability.

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Sao Paulo 10T busiest Internet exchange; Traffic falling despite COVID

Frankfurt DE-CIX has long been the busiest Internet exchange, but Sao Paulo is the first to reach 10 terabits of traffic. I shouldn't have been surprised. 2/3rds of the Internet is in the global South. Brazil is building fiber faster than the U.S. (So are France and Spain. The U.S. fiber record is dismal, perhaps because gigabit cable reaches ~90% of the country.) 

In Frankfurt, traffic is down from the April-May COVID peak. (Chart below.) Traffic in March peaked around 8 terabits, then went up to 9 in May. August peaks were down to about 8.5 terabits, about where they would be with normal traffic growth since 2019.

Scare stories and cheap headlines spread panic, but actually nearly all networks in the developed world handled the traffic without major problems. Cable upstream occasionally hit minor congestion. The cable companies have been holding back on upstream improvements for 5 years, expecting Full Duplex to cheaply raise upstream bandwidth around now. The technology is barely out of the labs, however, and the costs are higher than expected.

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US cable and especially telcos fail miserably on adding new customers

Even conservative Republicans like David Redl believe the pandemic proves the 20 million or so American homes without broadband need to be connected. But in Q2, AT&T reports 114,000 fewer connections and Verizon 23,000 less. Charter came through with 850,000 new homes and Comcast 323,000. 1,243,000 connections is absolutely unacceptable when children have to learn at home. 

The three big phone companies have essentially abandoned consumers in large parts of their territory, leaving about half of America -- including me -- with only one choice for decent broadband. No wonder we have some of the highest prices in the world.

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Live conferences virtually impossible where Corona problems continue

Scott Wallsten included some disheartening analysis in his announcement the TPI Aspen event had to be virtual, even if delayed to October. "Let’s assume that people can converse meaningfully when six feet apart in a space that is unlikely to be quiet. Two people need to stand six feet apart. Easy enough. A conversation with three people requires standing in a triangle with six-foot sides, requiring about 15.6 square feet of floor space. A four-person conversation requires a square with 6 foot sides requiring 36 square feet. As more people enter the group, the shape becomes circular and the square footage required for that conversation increases with the square of the radius." 

He adds, "Social distancing in a group that is together for a multiple-day conference is unrealistic even if it is possible. Social distancing is intended to keep people apart. Conferences are intended to bring people together. People want to talk and mingle. It’s human nature and one of the benefits of in-person events."

The TPI event always features outstanding speakers, including academics the policy people can learn from. I would go every year if I could afford the airfare. 

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"Churn Approaches Zero with Fiber" Carl Russo

"Fixed wireless will sometimes be the right choice and Calix's software supports it. But our telco customers with fiber will lose very few customers. If they provide strong, customer-focused service, no one will have a reason to switch. It's only a slight exaggeration to say customers only churn if they move or die." Russo adds, "This is provided the service provider chooses to “own” the subscriber experience.  A service provider that invests in fiber … but doesn’t further invest in an excellent subscriber experience … is still vulnerable."

Fiber today is routinely a gigabit; ten gigabits add little to the cost, although the demand is unproven so far.

It's been clear for several years that fiber is the right choice in most parts of the developed world where competition matters. Darren Entwhistle at Telus, Canada's #2, has been building fiber home for years because the numbers are very favorable. The reduction in churn and the savings in operating costs pay off the higher cost of fiber in most locations.

France Telecom, Telefonica Spain, and Bell Canada have proven the same.

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