Category: LUS

NPR Download: Feufollet

NPR today provided the nation with a look a the hot young band Feufollet with an Acadiana swamp story that gratifyingly contrasted with the recent news out of the red hills of Bogalusa.

Feufollet is the revered band of “youngsters” that that started playing the festival circuit together at ages like 8 or 12 and have matured into one of the most respected bands in the region. The story nicely captures both their respect for tradition and their willingness to expand the boundaries.

This is the sort of tale that displays NPR is best at: a bright, sharp, fond look at a bit of lived culture. It’s also an example of the quality multiple media that you can only find on the net. A user can check out the story page, which contains an edited textural version of the radio story. There you can find links to listen to the full story, and you can listen to 3 full songs from the band that illustrate some of the points made in the story. And, if you are so moved, travel to the artists pages and buy some songs. This is what is meant by “rich media.”

One of the advantages of a community-owned fiber-optic network is that we could make it dead-easy to do this sort of thing for ourselves and not wait around for occasional good publicity from the national media. Every ISP (Internet Service Provider) that you care to name puts up a server and gives its subscribers storage space on the network. Sometimes this is mainly a server to handle the email accounts that are given to subscribers and some online storage to keep the email. They do it because it brings in users by boosting the value of being on their network—and because, frankly, it costs next to nothing to offer it. Cox, AT&T and every other provider understands that providing services that add value to the network and are cheap when spread out over the subscriber base is a huge win for them. It’s so cheap that organizations like Google and Yahoo provide free email, massive storage, and even free applications over the web.

There is no reason that a community-owned network couldn’t do a much better and more thorough job of providing on-network services. After all providing service is not an incidental part of the job of making money (like it is for Google or Cox) but is the core reason that a utility like LUS exists. We can, and should, offer every community member a place on the network and the tools to work with. With 100 megs of internal bandwidth serving real applications—and even a full virtual desktop—would be easy. And it would differentiate Lafayette’s service and make its competitive advantage clear. No one would consider using an ISP that didn’t offer email. If you got hassle-free web space and the tools to use them from Lafayette’s network I’d bet good money that it would soon become a must-have part of having a network connection locally.

If LUS didn’t want to offer that directly (and I can see a few valid reasons why it might not) then pass the responsibility over to a funded nonprofit built on the PEG model—like Acadiana Open Channel—give it bandwidth and funding and make it an independent, nonpartisan, open resource for the whole community.

We talk here in Lafayette, based on Richard Florida’s work on the creative class, about how necessary it is to pushing Lafayette ahead to build a community around the synergies of Talent, Technology and Tolerance. We’ve even made some strides toward that goal. The Feufollet article suggests that we could go much further toward harnassing the creativity and talent of the local community if we made the technology to present it to the world (and each other) much more available.

Hell, it would even be good business—and a development project to boot.

(A hat tip to the Independent’s blog where I found this tidbit.)

LUS to buy user-produced electricity

Lafayette has yet another opportunity to step out front by leveraging its new fiber network. Tuesday’s City-Parish Council meeting put in place rules that will enable citizens to sell electricity back to LUS. With the new ordinance and an LUS supplied bi-directional meter customers can get credit for electricity that they supply the grid—effectively getting paid the going rate for electricity they produce.

The Good
That’s pretty neat; a recent story line in the Advocate focused on solar panels and other green energy with a solar power system at Lafayette Middle School playing the star role in the discussion.

Louisiana actually has some of the more encouraging laws in the nation with state tax credits that can pay half the cost of a new solar system worth $25,ooo dollars; so if you want a gadget-guy dream system the state will eventually pay for half. Even so the raw economics are not quite there yet; at least not in the city:

…Bercier said, LUS rates are low enough that the economic incentive is not great at this time.

“LUS is a hard one. They are still relatively cheap,” he said. “We are definitely never going to put them out of business.”

Of course, the price of oil will be more next year than this and the cost of solar energy continues to drop. We’re very near the break-even point nationally right now from what I read and even with the good deal we get from LUS Lafayette’s turn can’t be far behind.

The Better
All that is good green, conscientious, community-oriented, money-saving stuff. Beyond that, though, lie some pretty exciting opportunities for Lafayette to leverage its new network to do an do an even better job of reducing our carbon footprint and lowering the costs of providing power to the community.

As good as they are those bi-directional meters are the crudest and least efficient way to allow customers to take some of the burden off the electrical grid. We’ve already noted here that the real cost savings come from dealing with “peak demand”—there are huge costs associated with providing a lot of extra capacity that is only used for a week or two during the hottest—and hence most AC-intensive—days of the year. With active metering instead of merely static bi-directional recording LUS could 1) turn off high energy consuming devices (do you really need to heat your water to 150 while the temperature is 102?) 2) charge more for power at peak times–such power costs us all more to generate—and also pay more for power that is produced by individuals. (Your solar panels are likely to be producing real power while that August sun is beating down.) 3) Turn on and off small home generators. (How many Lafayette homes have a natural gas generator sitting on a pad near the AC unit post-hurricanes? Plenty.) We in Lafayette just built a brace of very expensive natural-gas fired electrical plants chiefly to supply peak demand. In fact those two plants cost twice as much as our fiber network. A cost-benefit analysis would, I suspect, reveal that firing up those residential generators very occasionally would be cheaper than building more such hugely expensive capacity. All that is something you can only do if you have your own communications network in place.

Lafayette could well lead the country in devising innovative ways to both lower the use of electricity and lower its costs by using our new network to full capacity.

Interested?

Langiappe: KLFY has also produced a short story on this.

“Cox to launch cellphone service” (updated)

Cox wants to be your phone company…cellular that is. (Or so says USAToday.)

There’s been a real question for quite a while now as to what Cox was going to do with the (expensive) wireless bandwidth it bought in the 700 mhz band. The possibilities bandied about have ranged from advanced data services to mobile TV to, well, cellular service. That last is what Cox is leading with but makes it clear that it intends to do bits of the others:

Cox, which expects to eventually manage all aspects of its service, also will test faster 4G technologies that use the international Long Term Evolution (LTE) standard…

Cox also says that subscribers will be able to watch TV shows, and possibly full-time channels, on their handsets. The company wouldn’t say what video will be available, how much consumers will pay for cellphone service, which markets will get it first, or how long it will take before it’s available in all its territories.

So what does that mean in Lafayette? Well, it’s pretty clear that Cox, as I’ve been saying for some time, is shaping up to be the Verizon of cable companies, that is: the company which is willing to invest real money in an intelligent long-term vision. Moving into the wireless space is smart and a will be a real challenge to LUS and the community’s new network. I do think an even smarter play for Cox, especially in Lafayette but everywhere, would have been to emphasize data and go with broad, open data structures like WiMax rather than tie themselves to a one wing of a narrow, cell-industry standard (LTE). Data is where the future is and flexibility is the key to success in the long run. Cox is apparently still locked in to their “old-world” mentality of providing “services” rather than access or communications. If they push much video at all over their wireless connection they will eat up bandwidth with proprietary, costly-to-consumer content. The cable model…in a world where they are competing against any real data-driven competitors it is a model with limited life. (And in Lafayette, though in few other places currently, they will have a data-driven competitor.)

Wireless services will enable integration with Cox’s other phone and video services; in addition to watching some TV shows on their mobile phone:

..subscribers will be able to use the phones to program home DVRs. They’ll also be able to access e-mail and voice mail that they receive at home.

Network integration is the holy grail of modern networking. It increases overall usages and tends to lock consumers into your product line. (Oh, and real people find it useful.) Just how that integration is accomplished is the question: via proprietary pipelined services or via open networkable data standards. Cox is going with proprietary services, as one would expect given their history and DNA.

LUS and Lafayette will also, readers will recall, have a wireless play. In Lafayette that will be a wifi network hung off the fiber and made available to all who purchase network connectivity from the new division. Current testing shows the wifi network pushing high bandwidth–in the neighborhood of 10 megs. That’s a lot of bandwidth, more than enough for 2-way video at mobile device resolutions for instance, and there’s no reason it couldn’t be more. LUS’ play will be a pure data play, the basic internet protocols will be the hook on which the whole thing will be hung. As such it will be robust, flexible, and adapative. LUS has been pretty coy on just when this will officially launch and how much additional (if any) it will cost. Getting that sort of information along with what protocols the new network will support in terms of infrastructure will be crucial to encouraging development for the new fiber-n-wireless network we’ll be seeing in Lafayette.

All very interesting.

Update: Mike passes on the URL to a Light Reading article on Cox’s wireless ambitions in light of the recent announcement. If you’re interested in the topic it shows the signs of being written by a reporter with real background knowledge; understanding what other cable companies are doing and what the history of wireless moves has been in the cable world…worth the click.

App-Rising on CampFiber

Mea Culpa, folks: I’ve fallen far behind in my posting. One thing I must get to soon is some reflections on Saturday’s CampFiber. It was both invigorating and informative—”in” in the best sense.

Happily, Geoff Daily over at App-Rising has had a series of commments trying to come to grips with the event. (1,2,3) His last post, though, comes really close to hitting it on the head. Geoff’s long been an advoate of Big Broadband and has recently refocused on the idea that filling the big pipe is a “problem.” Discussion at CampFiber has had the effect of making him rethink that basic question once again:

…one of the more interesting takeaways I got from CampFiber. It made me realize that the goal isn’t filling up the pipe, it’s figuring out how not having to worry about capacity constraints can free the minds of developers to worry less about compression and squeezing things down and more about the functionality, usability, and overall impact of their apps on improving society.

That comes very close, IMHO: Big Broadband is all about, or should be all about, destroying the constraints we currently suffer under—reconfiguring the playing field to make it more radically generative. A big fiber pipe is only a precondition and enabler for the fuller transformation. A necessary precondition, without any doubt, but a waystation on the path, not the final end in itself.

The next steps really need to be aimed not at filling a pipe or spending X amount of dollars to generate some mythical “killer app” but to increase the numbers of people that are participating and dramatically enhance the utility of the network for them. We’ve got a big leg up here in Lafayette on that score and it is not surprising that Lafayette developers immediately focused on some issues that initially surprised Geoff: the settop box and mobile computing….the big pipe is already accepted as a done deal here in the city. We will have that. We trust LUS to follow through. We trust LUS to lower the cost as much as possible so as to build usage in the most obvious way. Onto: “Next problem.” And the next problem is expanding the user base and expanding the range of things that can be done over the network: Set top box and wireless. Penetration and ubiquity.

We’re shockingly far down the road. But we need to recognize just how far out front we are least we squander our lead by imitating those who won’t really catch up for a decade.

But more on this in my next post……….I promise.

Terry Huval Video on LUSFiber @ App-Rising

Geoff Daily of App-Rising has posted a video interview with Terry Huval that focuses on Lafayette’s community-owned fiber-optic network. I’ve embedded the Viddler video below but you really should travel to Geoff’s blog and get his comments.

It’s a great interview that lays out the basics of the project, explores the history of Lafayette and the network, and ends with some thoughts about what can be done with it…

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Some highlights to further entice:

  • LUS will build a true Fiber To The Home network; those of us in Lafayette are too close to it but that’s the most impressive “feature” to those outside our community and Louisiana.
  • Cheapest internet tier 10 megs up and down
  • 100 meg intranet—which Terry notes is an idea that came out of the community—brings everyone up to the same high level
  • largest, fastest network in the country…building extra capacity on the front end, preparing for gigabit speeds
  • The history of Lafayette, its 1896 vote to build an electric utility, the wildcatter heritage called on to explain why the city was willing to step out
  • the evolution of the network from supporting LUS, to providing governmental services, to wholesale sales, to finally a fiber to the home and business network
  • the hope is that Lafayette can become a testbed for big bandwidth application developers
  • particularly near and dear to me—Terry closed out by talking about the “cultural ensemble” and the potential for local culture and the arts.

Cox Marketing in the Field

Cox, as the Independent notes in this week’s issue, is in the field with a marketing survey. I started hearing about a survey about 3 weeks ago and I gather that something had been in the field a bit longer than that from subsequent discussions.

The current survey is, by all accounts, a straightforward marketing survey that is unabashedly aimed at figuring out how to get and retain customers in the face of competition from LUS. (This is in pretty marked contrast to the push polling that set the citizens of Lafayette’s teeth on edge during the fiber battle.1,2) As it is recounted to me the most interesting questions were “hypotheticals” about how best convince Lafayette’s citizens to sign contracts to lock them into Cox before LUS’ competition actually appears. One question asked if giving a 10% price break would lead a customer to sign up for a 12 month contract and another asked if doubling internet speeds for the same price would convince the user.

The story, which is illustrated by Sharon Kleinpeter standing in front of an empty server rack, gets at least one fact seriously wrong and a quick trip to the internet would have prevented the mistake. The IND compares LUS’ cheapest, slowest speed (10 mbps up & down!) to Cox’s second highest of 4 tiers: 9 mbps down and a measly 786 kbps up. Cox’s cheapest, slowest tier is actually 786 kbps up (that is .786 mbps.! –the numbers don’t start till after the decimal place!) and 256 Kbps down. That’s a better than 10:1 contrast in download and a whopping 40:1 in upload.

That gaffe aside there are interesting tidbits in the article. LUS will have 3 internet tiers to Cox’s 4. Levels 1 and 2 will both be more than 20 megs…Cox’s highest speed is 15 mbps. Huval also touted the 100 meg intranet (my favorite feature) and:

“We’re not going to require a contract,” Huval adds. “We’re not going to bind anybody. Somebody takes our service one day and decides to swap then that’s what they’ll do. We’re trusting that the people of Lafayette are going to see the benefit of what we bring to the table, which is going to be more than a pricing benefit. It’s also going to be the capability and the and the clarity.”

Real competition might actually be coming to Lafayette and it’s ironic proof of the pro-fiber position that Cox is so unfamiliar with real competition that it has to run a survey to figure out what might work against a superior network. As soon as the marketing department figures out just what it should offer expect a new round of 6 month specials…especially in the first build area.

LUS has its response in place and it’s surprisingly low key:

As for pricing, LUS is still shooting to offer its triple-play package of phone, cable and Internet service for 20 percent less than Cox’s standard rate, which remains about $105 a month. This puts LUS’ price at around $85 a month. While Huval suspects Cox may be able to beat that price with some of its promotional plans, LUS is counting on many Lafayette customers looking at more than price. “I think there are going to be some people who are looking at price and price only,” Huval says, “who are going to fall for [promotional offers]. I think most customers, most people in Lafayette, realize the only reason why Cox is offering any of this now is because there’s a competitor in town. And we’ve gotten a lot of support, both at the polls and otherwise in the community for our project.”

I’m not signing any long-term contracts…

(A thanks goes out to Nick who first alerted me to the survey.)

Promo Pricing Unwise

Well, the “experts” have weighed in, and according to an article in Telephony Online the sort of promotional pricing that we’ve seen from the local incumbents and especially Cox are said to be unwise:

“I personally think the U.S. broadband industry and U.S. mobile industry need some sort of mindset change – which is the hardest to achieve – to get away from thinking that new customer acquisition will solve all your problems,” Weber said. “At the end of the day, it is the existing customers that provide 80% of the profit but they only get 20% of attention.”

And, of course, it is the good, solid customers who pay for promo pricing. If a company has to have its 30% margin it simply figures out how much it has to charge the 80% of its loyal customers to offer a raft of deals to the 20% that aren’t going to stick with them anyway.

One of LUS’ long-time commitments is that it isn’t going to float a raft confusing, 6 month package super specials that entice people to buy more than they really want and lock them into much higher costs down the road. That’s a strategy that carries risks when you’re trying to break into a nearly saturated market but the promotional strategy creates real problems of its own as this article notes. To wit:

The typical approach is to offer new customers a special price on a triple play bundle or a new phone for free or at low cost in exchange for a service contract. When the promotional price expires, and regular prices kick in, customers have incentive to look elsewhere for the next new deal. Service providers may not like this price-shopping behavior – which was the death knell of the long-distance voice business in the 1990s – but “they have educated their customers to behave like that, so they can’t complain now,” Weber said.

Of course what will happen in Lafayette, or so I anticipate, is that as people hit the end of their promotional period they’ll be hit that sudden big bill and suddenly LUS’ 20% cheaper price will look good. Moving over will make sense and the trick then will be to keep ’em with real local support and great services. I don’t think that will be all that hard. But the “expert” in the article makes one more suggestive remark re keeping those loyal, revenue producing customers:

One more intelligent possibility is to offer existing profitable customers special promotions or price breaks on new services . . .

Hey now, that would be cool. Offer your loyal customers the extras other companies charge for (ridiculously, I might add). The way that LUS has talked about its services is to offer a simple solid set of base tiers in the phone, cable, and internet sides and then let folks choose to add on from a menu the set of, say, three “extras” they want (e.g. call waiting, caller ID, etc.) These are dirt cheap in truth. At the end of the first six months the loyal customer could be offered an extra service. And after a year, another. For being a good customer. For helping the community succeed.

I think it’d go over big. And would draw a bright line in the sand.

Zydetech & LUSFiber

I attended Zydetech’s rebirth at LITE yesterday evening and healthy rebirth it was. The snacks and conversation were good, the attendance great, and the presentations better. Congratulations go out to David Goodwyn, the driving force; Keith Thibodeaux, CIO of LCG; and Erin Fitzgerald of LITE, all of whom I happen to know worked hard to make it happen and happen right. Similar high fives to those who labored beyond my view. Zydetech was long the premier association of techheads and tech businesses in Acadiana and active in promoting both tech and the region.

Zydetech was at the heart of much Lafayette’s tech explosion back in the day, as demonstrated by a huge chart locating the “tipping points” in Lafayette’s development as a tech center that stretched across the LITE main theatre screen. Its return augurs well.

The Advertiser has an article on the event — and you should click through to get their overview — but my take here is going to focus, as you might suspect, on what was revealed about our fiber network. (Incidentally, even if you have read the printed version, click through to the online one. The printed version cuts off abruptly after Louis Perret’s presentation. The online version has an overview of the others as well. Maybe the Advertiser figured that stuff would only matter to the geeky sorts and that they’d get it online anyway.)

Among the gathered tech types, the LUS presentation was clearly the hit of the evening. After the applause died down following Mona Simon’s presentation, Logan McDaniel, who represented the school system, got up and, tongue planted firmly in cheek, thanked the organizers for putting him after LUS . . . which got him a nice bit of laughter to launch his bit.

LUS presentations are all of a type, whether the presenter is at a civic organization or at technical gathering: a charge through the major characteristics of the network with a staccatto list of highlights for each. The term “bullet points” was invented for these guys. But it goes so quickly that it does make it hard to keep good notes.

Some highlights. (Using bullet points, of course.)

What’s Done:

  • The public schools are connected with a 1 gbps backbone and each school is connected with a 100 mbps connection. (McDaniel made it clear that the system was very happy with that, describing it as “rock solid.”)
  • 250 of the 800 miles of fiber that will be built are completed.
  • The head end is completed and the electronics are being tested.
  • The huts housing field electronics are being built.
  • The launch schedule is holding. Still looking for a launch in the first section of January, 2009 and completion of the city by 2011.

What’s Coming:

  • 20% less. LUS is still saying that they will launch their triple play at 20% less than their competitors. They were originally only promising to charge less than the incumbents were charging at the time they announced the plan, but that’s kept shifting to a current time frame. Caveat: LUS’ price will be the “real” price – no 6 month specials – and their competitors’ real price is the one they promise to beat.
  • Lots o’ channels on video.
  • DVR–Digital Video Recorder, like TiVo.
  • VOD–Video on Demand, download TV through the TV interface.
  • VOIP–Voice over Internet Protocol, aka phone, aka nifty integration.
  • 10 mbps symmetrical will be the lowest, cheapest internet tier you can buy.
  • The cable service will be IP-based and Mona was direct in saying that they were going to make use of that to intro new features and integration.
  • The Peer to Peer intranet will run at 100 mbps. No matter how little you spend on internet connectivity with LUS, you will be able to communicate at 100 mbps with every other citizen in the city that has purchased the service. This has emerged as the signature feature of the new public network and Mona actually paused for a few seconds to emphasize they expected folks to do really interesting things with all that capacity. By which, I think she meant that she expected the people in the room to do really interesting things and write the apps to let anyone else do so as well. (CampFiber anyone?) This is the part of the presentation where the crowd murmur really got loud.
  • The video service Digital Set Top Box will be used for Digital Divide purposes. After a bit of a hesitation she said that she’d say that. I gather that there is still some question about that or about just how it will work. (I’ve fretted about this pretty often. It’s not the perfect alternative that it should be just now, but the upside is that it would get a NAD-Network Attached Device into every house that bought cable.)
  • Simultaneous wireless deployment is ongoing. LUS is wiring up and lighting up a wireless system as they deploy the fiber. Right now it is only open to their employees but the intent is to open it as a retail product — a free or very cheap feature of internet service. (Done that way, they wouldn’t have to worry about pushing signal to the interior of houses or businesses; if you have fiber service you’ll have plenty of in-home bandwidth. So they can just concentrate on getting high bandwidth rates going. TRULY ubiquitous, TRULY high-speed connectivity throughout the city would be available. (3G? Paugh. I spit on your 3G. ;-))
  • Connections to LONI and the Lambda Rail are in place.
  • Energy: this has been a low key but constant emphasis of LUS – which is, after all, an energy company. But the recent energy crisis has made this topic newly salient to the public. Being considered are: demand-side appliance management (lower peak demand costs, saving capital costs and fuel costs), time of use metering (get lower costs if you use off-peak electricity). Mona also pointed out that teleconferencing will be dead simple over the LUS intranet and that has the potential to save transit time and money. (And maybe even help unclog Johnson Street? Nah, technology can only do so much.)

During the question and answer period most of the questions went to LUS. While several were about just how soon the questioner could get hooked up, the most consequential one was on the uber-geeky topic of static IP addresses: Would customers get static IP addresses? As I understood from across the room: Business accounts would. If I heard right, that’s a disappointment. The concern is with some users abusing their bandwidth. IMHO that’s not the best solution. Cap uploads if you must, but with IPV6 there is no technical reason not to give every household a unique address and a whole host of applications and communication tools that I could imagine would be facilitated by static IPs. (If you’re whacky enough to think so too, I urge you to contact LUS. They’ve already heard from me on this one.)

It’s a fun and exciting list. And very few people have any sense of what we are about to get. LUS needs to get that information out there and create a sense of excitement.

CampFiber: October 4th

So now that you’ve got it, what are you going to do with it?

That mildly threatening challenge pretty much describes the status of Lafayette’s new fiber network: we fought for it, the install trucks are rolling now, and come the new year we’re going to have a shiny new, state of the art, fiber-optic network that will shortly run up to every home and business in the city. It’ll be stunningly fast. It’ll be cheap. And you will own it can have a say in what we do with it. The capacity will be enormous. In comparison to what is available almost anywhere else we’ll have capacities that are pretty literally futuristic—the future is now in Lafayette.

It’s a great start. But we haven’t decided what to do with those capacities.

It’s time (past time) to think about what we can do with our network.

Geoff Daily, Terry Huval, Abigail Ransonet and a few of the usual suspects are cooking up an event that hopes to get the ball rolling. That event is the first “Lafayette CampFiber.” You can get your info on the event straight from the source at the Lafayette CampFiber web page. If you are interested in attending you can sign up at its EventBrite page. Mark your calendar’s for October 4th at the Travis Technology Center.

This first event focuses on two groups of people here in Lafayette: first, the developer community, and, secondarily, it will sponsor a roundtable of community leaders in education and other areas that will put their greatest network needs and hopes before the community and the attending developers. For developers there will presentations on their latest and greatest from folks here in town, a chance to collaborate and a talk with one of Louisiana’s premier venture capitalists—all your resources in one place.

The time for getting creative and supporting our community’s decision is now. So if you can, and especially if you are interested in development or have suggestions for new and innovative uses of our community’s fiber-optic network please plan to participate.

This, friends, is the payoff to the long fight and the long wait. Now we can begin to do great things. —And so this is the mildly threatening challenge: it is up to you.

Home Networking, Verizon, and Lafayette

Food For Thought Department
[What follows is lengthy and starts out with arcana but I think the implications are significant—perhaps especially for Lafayette. I ask that you stay with me…]

According to TelephonyOnline Verizon is radically upgrading the gateways it installs in homes served by the fiber-to-the home-based FIOS service. —FIOS customers can buy a triple play internet/cable/phone package from Verizon based on technology that is very similar to that being constructed in Lafayette by the community’s Lafayette Utility System.

The new in-home devices have a number of interesting characteristics; they will:

  1. bump “speeds over coaxial cable in the home from 75 Mb/s to 175 Mb/s”
  2. “have double the processing power” compared to the current gateways
  3. allow “users to create up to four separate wireless networks, each with different security settings”
  4. allow “remote Verizon technician management”

Understand that an upgrade like this is costly. Customer Premise Equipment (CPE) is costly. Putting a piece of relatively pricey equipment in every home (on top of the set-top boxes you’ve installed for video and any VOIP equipment) really adds up. CPE is where every company tries to pinch pennies and extend the life of its equipment. So upgrades are rare. And they are never done without a damn good reason.

So why would Verizon invest in new hardware with the hopes of using the new capacities in “the next three to four years?”

My best guess: to ride the wave of big bandwidth in the home…Big bandwidth inside the home has recently emerged as an issue. (I’ve just recently caught on. See my recent post, FTTD (Fiber To The Desk, for some background musing on how really big in-home transfer might be accomplished. What Verizon is doing validates the idea but is pretty small potatoes compared to what is coming. Don’t miss the comments–good stuff there.) Verizon clearly thinks that its current model which provides 75 mb/s will prove inadequate for in home use in the next 3-4 years. Pause to let that soak in please: the next 3-4 years. Tomorrow.

That is a near-future time frame. Nobody spends the amount of money that Verizon will spend even gradually moving over to new equipment without a very compelling plan to make back their investment. And Verizon knew what it wanted in these boxes. These are not off-the-shelf pieces; they’ve been designed to Verizon’s specs and the company has contracted two independent providers that meet those specs in order to assure itself of supply.

So the difference between the previous standard and the new equipment should strongly hint at what Verizon thinks folks will do that makes the upgrade pay out. Let’s unwrap those specs looking for clues:

The Analysis
—Faster speed, from 75 to 175 mb/s, means that Verizon is expecting a lot of internal traffic on home networks. That is lot-—especially since Verizon won’t offer you more than 50 megs of connectivity to the internet itself so it’s not video downloads they’re trying to accommodate (of course not 😉 ).

So for what do you need massive amounts of in-home networking speed? Take a gander at the processing power for a partial answer.

—”Doubling the processing power”–if you dig around a bit (1,2) you’ll see that that phrase refers to moving from a 32 bit chip architecture to a dual core 64 bit chip. That’s the way my fancy laptop is built. That’s real processing power even if the clock speed turns out be a bit lower. It allows the onboard computer to coordinate more in-home devices. Most obviously multiple set-top boxes for the cable video service are in the mix; it takes a lot of bandwidth to push HDTV around especially if one or more set top boxes is acting like a DVR/video server and pushing video out to secondary screens. In fact the “doubling” phrase clearly understates the added computational capacity. On top of chip architecture the gateways can serve out eight (8!) Quality of Service (QOS) controlled channels. At a minimum that means that Verizon can push 8 separate protected streams to multiple TVs. But eight seems like more than homes really need. Of course there are Xboxes, and Wiis, and Apple TVs and the like in addition to a raft of reasons that users or companies selling to users might want a protected stream…So eight makes sense. . . If (and only if) you are planning to do something beyond video.

Ok, its faster and more powerful…

—What’s with that feature: allow “users to create up to four separate wireless networks, each with different security settings?” Well, that allows you to set up a buncha different networks, some with QOS, some without, some that are slow, some that are public…..hmmn, whats with that? Again, it seems like overkill for current services. Wireless is hard to maintain for the QOS that video requries. They are probably wisely sticking with wires (coax) for that function given the eight protected streams on the wired side. By any measure the capacity for 12 separated streams is pretty astonishing.

Faster, more powerful, many separate streams, eh?…

—Finally: allow “remote Verizon technician management.” That means that Verizon can modify the thing from their headquarters. That alone isn’t too new—most “modems” can be upgraded by the company or at least reset to clear glitches and given the clearences it needs to access the ISP’s network. But in this context “remote management” surely means the ability for Verizon to enable and assign all those streams and to install some management software or special access codes on unit. And, sell that capacity to third parties who would like to use the in-home network that Verizon’s fancy new gateway creates.

Faster, more powerful, many separate streams, that can be controlled by the network owner…extending its control of the last mile into your rooms.

Chew on that for awhile. I did.

The Conclusion
Some folks might think all these bells and whistles are just over engineering. I can’t believe that a traditional telco like Verizon, one that is already straining its financial capacity to pay for a fiber build, is investing that kind of cash unless they really think this amount of capacity will be valuable to them within 4 years and pay for itself rapidly at that point.

My guess is that Verizon wants to control your home network and all the things that you are shortly going to want to run on it. Things which you might want today if only it weren’t so hard and costly to get the service up and running.

What Verizon wants to sell you directly is only the base. Video and video serving is likely only the beginning from Verizon’s point of view. The corporation has two profit centers currently: data and wireless. (Video shows promise but isn’t there today. Old style telephone lines are shrinking.) Convincing you to buy more data capacity and their wireless service is a proven cash cow. Wireless’s Achilles heel remains coverage and the most persistant irritation. In-house and in-building coverage is a big problem and one that is hard and expensive to solve by popping up more cell towers. The emerging solution is to use “femtocells” —to set up a small base station inside the building that is hooked up to a wired network and provides a mini “tower” that dramatically improves service. An in-home gateway like the ones described could help service and manage the bandwidth and protocols necessary to easily deploy this service to those that need it. And potentially radically reduce expensive customer turn over.

But, as popular as video and wireless retention has to be with the accountants who like old services and guaranteed returns, the real goal is likely broader: providing a platform for other, secure, protected services. Services which people can be sold but for which each provider currently has to figure out how to provison. A truly capable gateway like the ones that are described would let a lot of service providers play without installing their own in-home network and/or controller device.

All Verizon would want is, say, 20% off the top.

And providers would probably find that cheap compared to installing their own network.

Here’s an unordered list of things which would be much more commercially viable if the infrastructure/platform were already installed in the home and could be activated and managed remotely:

  • Gaming can eat local bandwidth too.
  • Virtual Private Networks (VPN).
  • Video telephony and intercomms.
  • A local high school sports “network’s” video stream and pay per view.
  • National professional and college sports “channel” versions of streaming video and downloads direct to your DVR.
  • Sophisticated security networks and security cameras.
  • “Telepresence” and other video conferencing/telephony.
  • Allowing all your electrical devices AC, refrigerator, hot water, etc to communicate and lower energy costs.
  • “Smart home” sensor and activity networks.
  • “Satellite radio” channels.
  • A myriad of music rental services could play directly through your connected sound system.
  • And many more…..add your own in the comments

Many of these “long-tail” sorts of uses will be “gotta have it” for some subset of users. The 2 dollar USL sports network will lock in users who will spend the next 200 monthly dollars on Verizon. Suppose only 1% of users has gotta have each of the above functions. That’s 11% of the market right there. Locked into your company from the start. I think Verizon could make a pretty penny by controlling the gateway device that made such home functions easy to buy, install and provide.

I think any network could.

The Take Home
Understand that the current incumbents know very well that the only thing that keeps them from becoming cheap, commodified transporters of other people’s expensive bits is their monopoly-based control of the last mile architecture. If we had six connections to the outside world all networks would be running cheaply and competing on how fast and reliably they could provide us with bits. (But that ain’t in the cards…which is why wise communities will follow Lafayette’s lead.) The incumbent’s stranglehold on the last mile is crucial to their profit profile. With it they are Gods of the network age. Without it they are the guys who sweep the roads and fill in potholes—and will be paid appropriately. They’d rather be Gods. That last mile control is the key to being invited in to control the network in your home too and the key that will give them huge new sources of revenue by controlling the toolbooth that they hope that new gateway will become.

It’s a pretty damn good plan.

Lafayette
No Lafayette Pro Fiber blog post would be complete with a comment on the local implications. IMHO this is another place where Lafayette could lead the way.

Verizon is poised to extend its fiber-based advantage into the home by controlling access to big bandwidth inside the home and by easing the entry of services that critically depend upon accessing a robust home network. In some places the cable company has already partnered with security firms to provide robust networking that rides on the coax installed for cable. Other incumbents surely will see the writing on the wall; they’ll have to follow suite or watch companies like Verizon generate the revenues that will enable them to become more and more dominant. Verizon has the big bandwidth advantage in fiber. But that advantage is purely theoretical until the public can see that the more capable network can provide not only “more of the same” but actually “different and better” services. The gateway can be the key that unlocks that potential.

A gateway or something similar can do the same for Lafayette’s network.

I’ve been hearing a lot of background buzz lately about trying to encourage tech development in and for Lafayette. Meetings in various places, varying level gurus flown in from various places to attend the meetings. Dinners in posh private homes. Talk about establishing an “x-prize” for Lafayette. An attempt to organize a meeting for developers. Desultory attempts at secrecy. (My list is surely incomplete.) The usual influentials’ names are bandied about. You know, the works. No one knows whether any of it will come to fruition. But the point is that Lafayette is beginning to wake up to the fact that it will be well served to actually do something to encourage development. A “build it and they will come” attitude only works in the movies. In the real world if you want something to happen you’ve got to do something special to encourage it. Building LITE and LUSFiber and ramping up LCG’s example are great starts but they won’t, alone, be enough to make Lafayette the mecca many of us would like to see it become.

So far most of the Lafayette discussion on this topic has been couched in terms of somehow convincing (or bribing) developers to make us something special. As much as I like the idea—and hope it succeeds—I think we’d have better chance at success if we instead tried to do something special ourselves.

Like Verizon is evidently doing.

The heart of Verizon’s apparent plan is to make it possible, even easy, for developers to do something great and different. They are poised to eliminate the barriers to “getting things done” by providing the platform over which these things can be accomplished. Verizon lays out all the tools on the table (albeit tools that lock you into their network) and will surely even handle billing for you. But they won’t pay you. Instead they’ll charge you…and your customers. Frankly, that’s a better way. Opening the door is always a better plan than subsidizing the battering ram!

The right box in the house could do for Lafayette what Verizon’s gateway is poised to do in the homes of it FIOS users. But Lafayette’s could be based on ethernet and open IP standards instead of the clunky cable-oriented and proprietary network hardware and protocols that serve Verizon but are unfamiliar to most developers. Lafayette could do a better job of facilitating access to the Local Area Network (LAN) that is the home than any of the competitors is willing to do.

But Lafayette could go further. It could do the same for its MAN (Metropolitan Area Network) by building in the resources that make access easy. Make available storage. Make available the kind of computational power represented by LITE and Abacus. Embed modern protocols. Pack up some servers to enable within network serving of various kinds of data (streaming video, for instance).

In short Lafayette could make its networks, both inside the home and inside the city, playgrounds for the easy, fluid kind of development that developers love.

And we might, eventually even make a few pennies off it. But quickly and surely we could make Lafayette a tech mecca, give LITE a clear purpose in the community, and make LUSFiber a roaring success.

You want to be that shining city on the hill? The path is open.