Attention broadband providers: There's gold behind that demarc point

There's been a lot of clamoring lately around how the speed of broadband should be defined in the U.S., and according to a Wall Street Journal article, the FCC is looking for clarity on how to define broadband as it drafts its new broadband plan for Congress.

Previously, the FCC had defined "high-speed Internet" as a service that could deliver, gasp, 200 Kbps. Last year, the FCC revised its definition of "basic broadband" to be a minimum 768 Kbps to 1.5 Mbps.

By comparison, a study done by the Organization for Economic Co-Operation and Development, reports that other countries such as Japan and South Korea have average broadband speeds of 92.8 and 80.8 Mbps, respectively.

Still, I am not saying that speed does not matter. Indeed it does. Copper-based ADSL2+ and even VDSL2 have their obvious distance and rate limitations the further you are situated from the Central Office or Remote Terminal cabinet.

The need for telcos to offer greater speeds via deep fiber FTTN or Fiber to the Premises-based deployments is being driven by obvious cable competition. There's been no shortage of major MSOs such as Cox, Comcast, and even Rogers launching DOCSIS 3.0 with speeds of up to 50 Mbps over their existing Hybrid Fiber Coax networks.

A good illustration of cable competition was seen last week when Cox Communications launched its DOCSIS 3.0-based service in Arizona to combat Qwest's growing FTTN rollout.

Even though speed is important, I think the real value for broadband providers and their customers is what they can bundle with that connection.    

This became a more apparent to me when I recently met with Juan Vela, director of solutions marketing & strategy for Occam Networks, a company that has made a name for itself selling mainly to rural independent ILECS. We concurred that while broadband speed does matter, it's the services over the connection rather than the connection itself that will really make service providers money.

Vela should know. In a previous life, Vela worked in the former US West/Qwest lab that not only trialed but helped build the Bell's VDSL-based telco offering with the former Next Level Communications, now CTDI. As we all know, Qwest decided to get out of the TV business and instead is putting its focus on how it can build value on top of its Fiber to the Node (FTTN) deployment with online video options and new incentives such as discounted netbooks.

Adding value to a broadband connection, however, does not require a major investment or cost to the end user or the telco for that matter.

"Broadband providers need to make money and monetize the service they are delivering over the broadband pipe," Vela said. "They can do that by providing something as simple as online data storage for let's say just $3-$5 a month."

Over the past year, various telcos have begun to offer value-added services such as online storage, security and even PC repair services to their broadband subscribers for an additional small fee.

Two telcos that have made progress in this area include Qwest and AT&T. Qwest offers its Digital Vault service for online storage to broadband subscribers, while AT&T, through its ConnecTech service division, offers not only PC services, but an entire suite of home theater installation services.

Just the same, independent telcos are also touting the network management and diagnostics drum. Oreg.-based Canby Telcom, which is in the process of replacing its entire copper network with Fiber to the Premises, has been conducting a trial of ClearAccess' TR-69-based modems. Initially designed for the large telcos, TR-69 allows any service provider to remotely manage and troubleshoot issues on any IP-enabled device (STB, modem or even a PC).   

Of course, not everyone I know agrees that the U.S. has a broadband availability problem. FierceTelecom's historian/columnist Mike Noll opined in a column he wrote for me prior to joining the FT team, thinks that, similar to a study done in the 1970s about digital switching, the studies that say the U.S. is behind in broadband are flawed.

While the FCC and industry pundits will continue to debate the merits of broadband speeds and those who don't have it, without some value going into the house, it won't be nothing more than a dumb pipe.  

-- Sean

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