Bernie Arnason over at Telecompetitor makes the argument that with DOCSIS 3.0 relatively inexpensive to quickly deploy (75 million Americans should have it by the end of the year) and many telcos clinging to aging copper last mile connectivity, the cable industry should have it pretty good competitively over the next few years. Comcast added more broadband customers (608K) in the last two quarters than AT&T, Verizon, and Qwest combined (401K), and cable’s triple play continues to gobble up fleeing copper landline customers. Cable also dominates more than 90% of the VoIP market.

Cable’s traditional weak spot – upstream bandwidth, looks to get some help later this year as cable operators perfect upstream channel bonding. Comcast recently noted that they’re seeing 75 to 100 Mbps upstream in tests. While Verizon’s decision to spend $23 billion on FTTH to the home puts them in a decent position for now, there’s a huge swath of America served by telcos using aging copper infrastructure that many of these companies can’t afford to upgrade to fiber. DOCSIS 3.0 means telcos will up their game somehow:

It all adds up to this perfect competitive storm analogy I referred to early on. This storm compels the telcos who haven’t already done so to respond, primarily with FTTH. Good customer service, local presence, and a solid DSL product are very admirable and noble. But these storm clouds may demand much more.

Can Qwest seriously compete with DOCSIS 3.0 with no money for serious upgrades? Marketing that pretends last mile copper is FTTH can only go so far. When does AT&T decide to stop waiting on VDSL bonding and pony up the cash for the move to FTTH? 3-7 Mbps is the fastest speed offered by Verizon in roughly half of its broadband territories. Luckily for most carriers, they’ll be sheltered from the “perfect competitive storm” Arnason mentions by the simple fact that many of their markets don’t see decent competition. When you’re the only game in town (be it cable, telco, satellite or carrier pigeon), you get to charge whatever you’d like for last-generation service.

Link to the original article…

While Verizon gets most of the attention with their $23 billion investment in fiber to the home deployment, a significant chunk of the fiber to the home deployments in this country is being accomplished by roughly 700 smaller rural telcos, co-ops, and municipal operations. According to a new study by the National Telecommunications Cooperative Association (NTCA), a growing number of rural telcos are moving toward fiber to the node (like AT&T’s U-Verse platform), while many others are moving directly to fiber to the home:

NTCA’s “2009 Broadband/Internet Availability Survey” found that nearly three-quarters (73%) of respondents with a fiber deployment strategy intend to offer FTTN to more than 75% of their customer base by 2011. Fifty-five percent plan to offer FTTH to more than half their customers in that same time frame – more than doubled from just 26% last year. The study says that rural areas are seeing significant gains in broadband speeds, primarily due to the increased fiber availability in their communities. Fifty-three percent of respondents indicated their customers can now receive broadband service of between 3 and 6 Mbps (up from 46% last year), and 39% can receive service in excess of 6 Mbps, which is an increase from just 25% a year ago.

According to the most recent data (pdf) from the Fiber To The Home Council, the total number of homes served by FTTH is now 4.4 million, or 4% of all homes. FTTH service now passes (no last mile drop) 15 million US homes, or 13% of all US Households.

The picture has nothing to do with the article.

Link to the original article…