Category: Networking

OECD Urges Governments to Drive Broadband Growth

A new OECD report urges governments to use competition rather than subsidies to promote the growth of broadband in remote areas. Subsidising national operators to roll out broadband in these areas reduces competition and innovation, and may mean that subscribers get stuck with an expensive, yet poor quality, service.

The OECD report, The Development of Broadband Access in Rural and Remote Areas, claims that the arrival of new start-up companies offering wireless broadband at low prices is causing established telecoms companies to speed up their broadband delivery process and cut prices. Indeed, this has already been seen in the UK to an extent, with BT’s suddenly rapid exchange upgrades and dramatic cuts to broadband subscriptions and local loop unbundling.

The number of broadband subscribers in OECD countries is expected to reach 100 million by Q3 2004, up from 82 million at the end of 2004 and 56 million at the end of 2003. Broadband penetration now extends to 75% of OECD household, with 1 in 4 already enjoying a service.

However, the report details that availability will continue to vary widely for at least the next few years:

  • Over 90% of households in Belgium, Denmark, Japan, Korea, Luxembourg, Spain, Switzerland and the United Kingdom can connect to broadband services. Other countries expected to join this group by the end of 2004 include Finland, France and Germany.
  • Countries with larger geographical areas such as Australia, Canada, and the United States are likely to have DSL coverage of between 80% and 90% over the next few years. In Canada and the US, broadband via cable modem already reaches 85% and 80% of households respectively.
  • A number of countries– such as the Czech Republic, Greece, Hungary, and Ireland – have only recently launched broadband services.

The OECD report

BT and Microsoft Team Up to Offer Broadband in Scotland

BT and Microsoft are trialling a new service in Scotland that offering software and broadband to small and medium-sized businesses. Connected And Complete is a package consisting of broadband installation, Microsoft Office Small Business Edition, twice yearly health checks, a help desk and tools for making a website.

Jerry Thompson, BT’s head of business broadband, said: “There are well developed IT and financial services sectors in Scotland and we think they will be early adopters.”

If successful, the service will be offered to businesses throughout the UK.

BT are doing quite well out of broadband at the moment – year end results show a 30% jump in turnover for their new services, bringing in UK£3.4 billion (€5 billion) in revenue.

Nice to see something nice being tried out in Scotland for a change, since other trial runs in the past have included nuclear waste, intercontinental ballistic missiles, the poll tax and Malcolm Rifkin.

Microsoft on Connected And Complete

BT’s 90% Broadband Coverage

BT made a further 22 exchanges broadband-enabled yesterday, taking coverage in the UK to 90% of the population.

BT Wholesale chief executive Paul Reynolds said: “This is a stunning achievement. Nine out of 10 people are now connected up to a broadband exchange and we’ve announced plans to get us to near universal coverage by next summer – well ahead of earlier predictions.

“Our pioneering approach to broadband rollout has been widely recognised, most recently with the OECD rural broadband report putting Britain ahead of the pack for broadband availability compared to the other G7 nations.

“BT has put the UK at 90 per cent ADSL coverage today with our closest competitor countries in the G7 aiming for this level by the end of 2004. By that stage we’ll be past 95 percent and well on the way to topping 99 per cent by summer 2005.”

You can bet that the last 10% will be the hardest – some of of the remaining units are the oldest, remotest exchanges, not nice easy ones in the middle of cities. However, BT is aiming for 99.6% coverage by summer 2005. This represents an enormous amount of work still to be carried out, however: 2,652 exchanges are broadband-enabled, with 2,366 in the programme for next year.

BT’s Press Release

AOL Leaves Japan to eAccess

AOL Japan is being sold to eAccess for 2.1 billion Yen (€15.38 million) in yet another shuffle. The division was once DoCoMo AOL, a joint venture between NTT DoCoMo and the US media giant Time Warner.

DoCoMo pulled out last November as subscription numbers to it’s PC/cell phone link service were thought disappointing.

eAccess says it will keep most of AOL Japan’s 200 employees along with the AOL branding.

Yahoo

Ofcom’s LLU Proposals

UK regulator Ofcom have published proposals intended to open up competition in broadband provision for data, content and voice services.

As predicted, Ofcom have announced a market review consultation of local loop unbundling (LLU) – it was the threat of this review that many believe prompted BT to make huge cuts in its charges for LLU. BT hopes to avoid regulatory intervention by improving access to the local loop and charging fairer rates.

To help with local loop unbundling Ofcom are also proposing the establishment of a Telecoms Adjudicator, who will be entirely independent of Ofcom and the industry.

Ofcom Chief Executive Stephen Carter said: “These proposals, combined with the recent proposals on migration charges, mark an opportunity to accelerate the prospects for sustainably competitive investment in Broaderband Britain. Furthermore, Ofcom particularly welcomes BT’s commitment to both price and process improvements in these key wholesale products.”

Ofcom’s release

New HomeChoice Service Launches

The HomeChoice set top boxVideo Networks have launched the latest iteration of their HomeChoice service, available in the UK from 1st June.

The basic package includes 1mb of broadband (capped at 1gb per day downloaded – about 20,000 light web pages or 200 mp3s), more than 60 TV channels and a video on demand service. Films available on the on-demand service cost between £0.99 and £3.50 (€1.47 to €5.19) for the standard 24 hour rental.

The TV channels available are an extension of the standard Freeview fair, and include channels unavailable on Freeview such as E4, Discovery, CNBC Europe, UKTV Style and UKTV Gold. The are also some music offerings exclusive to Video Networks such as V:MX Hits and V:MX Dance. Interestingly, the service carries Club Zebra – a sort of exercise on demand (EOD – you heard it here first) channel where you can interact with keep fit and health programming.

The broadband component of the service can be upgraded to 2mb for an additional £15 (€22.26) per month – this takes the download cap to 45gb a month. The HomeChoice box comes with an Ethernet port in the back for connecting to your home network, but a rather smart wireless option is available for an extra £125 (€185.53). Including an Ethernet port makes the service a true competitor to existing broadband services. Beforehand, HomeChoice was really “VOD with broadband”, as the broadband connection from the box was USB: this iteration is more “broadband with VOD and content”, a much richer and flexible offering.The service is initially launching in West London to those with a BT phone line.

HomeChoice

VideoNetworks

BT Announce 70% Reduction in Local Loop Price

BT has been under considerable pressure for some time to reduce the cost access to the last mile of copper linking households to telephone exchanges, and it looks like they’ve finally done something about it.

The cost of Local Loop Unbundling has long been accused of preventing rival broadband providers from offering competitive products to BT. Ofcom are on the eve of announcement regarding BT’s treatment of the situation – hence BT’s timing, no doubt. BT hope to reduce the need for regulatory intervention – and this demonstrates that they would have been quite happy to sit there enjoying the status quo had Ofcom not accused them of overcharging.

BT chief executive Ben Verwaayen said in a statement: “Our announcement marks a major move towards the telecommunications market of the future. BT has always argued that a market needs to develop in which those who are willing to invest and innovate can reap the rewards. This is a significant step in that direction.

“We now have a far clearer idea of how Ofcom sees the market developing and we share their view that competition based at the infrastructure level will be good for everyone and for the UK in general.

“Their statements about regulatory certainty are crucial as we have enormously ambitious plans for the networks of the future and require that certainty for shareholders if we are going to invest the huge sums required.

“BT took a bold step forward two years ago when it cut the price of broadband and changed the shape of the broadband industry. This is an equally ambitious move and one we are confident will have long term benefits for both the UK and BT.”

The price cuts will take effect form 1 June – the monthly rental price for the existing LLU product will drop from £4.42 to £2.26 (€6.59 to €3.37), connection charges will now be £83.33 (€174.38), down from £117 (€124.20).

Ofcom

BT on the announcement

Are There Really 1.67 million Illegal Movie Downloaders in the UK?

The British Video Association (BVA) has surveyed 16,000 people between 12 and 74 and extrapolated that there are 1.67 million illegal film downloaders in the UK, as they believe that 4% of the population are indulging in the practice.

We think this gives an inaccurate picture. The entire population doesn’t have internet access, and downloading all of Kill Bill Volume 1 on a dialup is frankly insane, limiting this kind of piracy to broadband subscribers. Ofcom estimates that there are around 4 million broadband homes out there – so perhaps 4% of them are downloading, making it roughly 160,000 pirates (which we feel is more accurate), or perhaps 25% of broadband subscribers are pirates (which we doubt).

The BVA goes on to estimate that this downloaders cost the video industry £45 million (€) in lost revenue. A quick calculation on the back of an HP48 shows that this is roughly two full price DVDs per downloader – yet the BVA goes on to say that the average downloader grabs some 30 films and TV episodes a year. Since many downloaders like to collect and share files for kudos, we suspect the picture in the UK is of around 160,000 pirates downloading 30 films.

Interestingly, according to the survey, the average downloader is under 35, male, and lives in the south of England – presumably because broadband is more prevalent there and not because they’re more prone to thieving.

The BVA’s report

Infinium Labs Sets Launch for Phantom Console

We have covered the on/off, is it real, is it vapour history of the Phantom Console a number of times.

We now learn that Infinium Labs are at E3 showing the Phantom Console on an 8,000 sqft stand and signing up game developer for the platform. They have also released their pricing plans.

The Phantom is essentially a sealed box containing a high spec PC that has been designed for gaming, so comes complete with a high end graphics card. What makes it different is that the games are loaded on to it via broadband, so not only are there no physical distribution cost for it, but the payment models for the games can vary from single play rental to ownership.

Following its planned 18 November launch, it will sell for $199 or for free, if two years of membership to the $29.95 per month broadband gaming service, Phantom Gaming Service, are signed up for. At the start of the service a large number of free games will be available.

The sleek-looking device will be manufactured by Biostar in Taiwan, and will feature a 40GB hard drive, AMD Athlon XP 2500+ central processing unit (CPU), the NVIDIA GeForce FX 5700 Ultra graphics processing unit (GPU) and the NVIDIA nForce2 Ultra 400 platform processor. It will also ship with gamepad, mouse and keyboard that they are labelling the Phantom Lapboard, which they claim gives easy control over the keyboard and mouse even when sitting on a couch.

There is plenty of innovative ideas in the Phantom such as the way the capacity of the hard disk is managed. The unit will notice when the drive is becoming full and will invisibly remove the least played games, automatically uploading them from the central server if the gamer request a play.

Kevin Bachus, president of Infinium Labs previously worked in a senior position at Microsoft in the Xbox division.

It is a brave company that takes of the likes of Sony, Nintendo and Microsoft, and all gaming consoles live or die on the support of the games developers – if there is no strong flow of quality titles, people will not buy. Mr Bachus is not alone in thinking it is a good idea; Infinium has just $46m in first round funding.

Infinium Labs

Softbank losses grow

Japan-based Softbank Corp today announced widening losses for the 2003 year ending March. Declared a net loss of 107.09 billion yen ($94.2m, 79.8m), up from a 99.99 billion yen loss in the previous year, they blame what they called “substantial expenses” to lure customers to its broadband Internet service. Sales rose 27.2% over the period.

Unusually Softbank decided not to announce their financial predictions for the current year. Their stock fell around 10% against the Nikkei Average fall of 4.8%.

The broadband services, Yahoo BB, is a joint venture with Yahoo and has been held up as an example of what broadband could be given their provision of 45mbps coverage to some of their consumers. By March they had over 4 million customers and they are targetting 6m by September 2005.

Softbank (eng)