By David Sims
[email protected]
The news as of the first coffee this
morning, and the music is Bruce Springsteen’s blistering gospel-rocker “Just
Around The Corner From The Light Of Day,” from his MTV: Plugged In And Turned Up To Eleven, Dammit:
So,
whither SBC’s Project Lightspeed? An on-schedule,
successful project or Project Pronto redux? SBC’s bold entry into useful
consumer innovation or a monumental sinkhole costing 10,000 jobs and counting?
A couple weeks ago Broadband Reports had
a post saying “Responding in part to investor concerns about the company’s TV
plans, SBC today indicated the company would be able to generate enough free
cash flow to cover the additional capital expenses necessary next year for
deployment of its next-gen DSL network (e.g. Project Lightspeed) – which
SBC insists is on schedule. The company says they will have reduced their
workforce by 10,000 positions for the year to help cut costs.”
Posted reader comments ranged from “And
how many jobs is SBC going to lay off to cover the costs of realizing that
implementing hybrid fiber adsl2/vdsl(2?) is a waste of money and has to redo
their system to all fiber?” to snide comments about SBC’s late, unlamented
Project Pronto and such jabs as “REMEMBER SBC said this same thing in 2004 when
it said it was going to have ‘lightspeed up & running by 2005,’ it was ‘in
the testing stages,’ maybe those 10,000 people are the employees that tested
lightspeed & said they didn’t like it,” before the thread dribbled off into
anti-Wal-Mart ramblings.
Frankly First CoffeeSM wonders how SBC will be
able to absorb AT&T and get Lightspeed up and running all at the same time,
but of course the minds that grapple with such issues are far above those of mere
mortals who simply write about them.
Lightspeed: A
Primer
Project Lightspeed is SBC’s project to expand its
fiber-optics network deeper into neighborhoods to deliver SBC U-verse TV, voice
and high-speed Internet access services, using fiber-to-the-node and
fiber-to-the-premises technologies. It’s intended to compete with broadband
access from cable companies, “wireless broadband from companies like Nextel and
other fiber rollouts from firms such as Verizon.”
Using FTTN, the companies plan to bring fiber to within
3,000 feet on average of customers’ homes. It doesn’t guarantee fiber
connections to users’ homes, just backbone with fiber speed. Ah, that pesky
last mile.
Instead of using a traditional broadcast video system, in which all content is
continuously sent to every customer’s home, SBC companies say they’ll use a
switched IP-video distribution system, where only the content the customer
requests is provided to the customer, freeing up bandwidth to be used for other
applications and more content.
They’ll use Microsoft TV Internet Protocol Television Edition software platform
and work with Alcatel to provide access, routing, and aggregation
infrastructure equipment and video system integration services.
“We’re On Track.”
A few days after the Broadband Reports post, Jeremy Reimer
wrote that SBC “reassured a group of telecommunications professionals yesterday
that their Project Lightspeed, an effort to bring high speed fiber-optic
networking to 18 million customers, was still on track despite moving the
deadline for completion ahead by six months.”
According to Reimer, Lea Anne Champion, the SBC executive in
charge of Project Lightspeed, said hey, no problems, we’re on track with all
the plans for IP video, voice, and data services reaching 18 million households
by mid 2008, or half of all households SBC serves: “We have just completed a
successful field trial of IPTV and data and we got the results we wanted. We
are now moving on to the next phase, a controlled trial late this year or in
early 2006.”
Industry analysts “have long predicted that the slow-moving
telcos would inevitably succumb to market pressure from cable and Internet
companies, especially those providing services like Voice over IP that competed
directly with their primary market,” Reimer writes. Project Lightspeed is SBC trying
to make an obligation into a virtue.
And then, being a techie, he throws in the obligatory Star Wars analogy: “Massive spending
efforts like Project Lightspeed seem like an ‘Empire Strikes Back’ from the
massive Baby Bells, but will the delays allow the smaller, nimbler firms to
triumph?”
Fill in your own answer to that rhetorical question.
The Death Star
Fires Back
Yesterday the Death Star – sorry, SBC, but they do have the
most Death Starry-logo – fired back in a press release updating Project Lightsaber
– Lightspeed. Evidently, SBC companies have recently concluded a technical
field trial of IP-based services, which they say “successfully demonstrated
that the technology works in a real-world environment.”
During the two-month trial ending in October, SBC companies delivered
IP-based TV programming, video-on-demand, high-speed Internet access and other
features to employee households in San Antonio in the second of two employee
field trials.
“The conclusion of our field trials and successful delivery of these new
IP-based entertainment services was a significant program milestone,” said Andy
Geisse, chief information officer, SBC Services, Inc. “IP is the next big
thing. We’re going to change the face of television with an IP-based platform
that enables integration, personalization and a high-quality entertainment
experience.”
Addressing a group of industry analysts hosted by IBM in New York, Geisse
confirmed that the next phase of Project Lightspeed – a controlled market entry
– is set to begin around the end of 2005/early 2006 in neighborhoods in San
Antonio with a limited number of subscribers.
SBC companies expect to scale the offerings beginning in
mid-2006, adding features and functionality and entering more markets across
the companies’ 13-state operating region.
Empire I vs. Empire
II
Back in November 2004 the
promise from SBC was that it would begin constructing its fiber network in
the first quarter of 2005 “with the hope of offering fiber-based services to 18
million households by the end of 2007,” and to “start selling video service
over the Internet by the fourth quarter of 2005.”
Of course one motivating factor for SBC is that Verizon’s in the game, too with FiOS,
their fiber-to-the-premises broadband service. “Verizon noted that FTTP penetration
reached 12.4% in the 35 regions where it has marketed the service,” writes
Simon Leopold, a telecom analyst at Morgan Keegan & Company Inc. according
to Unstrung.
“Verizon disclosed total broadband (DSL plus FTTP) net additions of 389,000,
and we estimate that Verizon has 136,000 – 149,000 FiOS subscribers and may
target a surprising 300,000 by year-end.”
SBC says Lightspeed will be ready to serve 2 million
customers by the end of the year. Verizon says that FiOS deployment is on track
to offer service to 3 million potential customers before year’s end.
Light Reading
quotes SBC’s CFO Richard G. Lindner as saying that SBC hopes to have fiber
deployment “out and passed to facilitate 2 million homes on Lightspeed” before
the end of this year. Of course “passing” a home doesn’t mean “getting money
from subscribing, hooked-up customers in” a home.
And SBC’s playing coy with reports back in June of delays to
Microsoft’s TV component of the service over scalability problems, and that
like SBC and Lightspeed itself, has overpromised on how quickly they can turn a
good idea into a commercially viable and profitable reality. (“Scalability in
beta versions is not what it will be in the released version,” notes Ed Graczyk,
director of marketing for Microsoft TV.)
Stay tuned.
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