Thursday, March 25, 2004

Bush Comments on National Broadband Goal

In a campaign speech in New Mexico that was otherwise mainly focused on home ownership trends, President George Bush issued a call for affordable high-speed internet access to be available for all Americans by 2007:



"This country needs a national goal for broadband technology, for the spread of broadband technology. We ought to have a universal, affordable access for broadband technology by the year 2007, and then we ought to make sure as soon as possible thereafter, consumers have got plenty of choices when it comes to purchasing the broadband carrier. See, the more choices there are, the more the price will go down. And the more the price goes down, the more users there will be. And the more users there will be, the more likely it is America will stay on the competitive edge of world trade."



Regarding the possibility of taxing Internet access, Bush also commented "Let me say one thing about broadband -- we don't need to tax access to broadband. The Congress must not tax access to broadband technology if we want to spread it around."



Some industry reaction



Michael K. Powell, Chairman of the FCC, said "The president has set out a bold vision for broadband investment and deployment over the next four years. I look forward to working with my commission colleagues, Congress and the administration to deliver on this vision for the American people. Universal and affordable access to broadband is vital to the health and future growth of our economy."



John Chambers, Cisco Systems' CEO, commented: "I applaud President Bush for his vision of universal, high-speed broadband access in the United States. The Administration understands that broadband is a key driver of productivity and a vital component of economic growth. http://www.whitehouse.gov/

Azea Networks Develops Submarine Optical System

Azea Networks, a start-up based in London, unveiled an upgrade solution for undersea cable systems that are nearing the "glass ceiling" of their original design capacity limits.



Cable systems deployed in the mid to late 1990s were designed for relatively low bandwidth -- typically between one and eight wavelengths at 2.5 Gbps per channel, yielding no more than 20 Gbps total capacity per fiber pair.



Azea said that because these cables employ no electrical regeneration, in principle higher capacities could be achieved by using more sophisticated terminal equipment. In practice, however, the legacy wet plant imposes significant transmission penalties when compared with state-of-the-art multi-terabit cables.



Azea said its advanced electronic and optical technologies, including forward error correction and dispersion management, overcomes these limitations to deliver multiple 10 Gbps channels over existing cables, enabling undersea cables to achieve upgrade capacities more than 10 times the original design. Azea's solution comprises the following elements:

  • the Azea NX10 Submarine Line Terminal Equipment (SLTE), which leverages modulation techniques, Forward Error Correction (FEC) coding, and end-to-end control loop optimization


  • the Azea Element Manager (EM) and Craft Terminal (CT) that integrate with existing Operational Support Systems; and


  • a set of pre- and post-deployment services.
http://www.azea.net
  • Investors in Azea include Accel Partners, Atlas Venture and Quester.

FTTH Council Urges Federal Funding for Rural Broadband Loans

The FTTH Council is lobbying Congress to ensure full funding of a federal program providing broadband loans for rural communities. The loan program, administered by the U.S. Department of Agriculture's Rural Utilities Service, was authorized by Congress in 2002 for a six-year period, but has been targeted for reduction by the Bush Administration.



A similar industry effort last year was successful in forestalling cuts to the program in Congress' FY 2004 appropriations legislation. http://www.ftthcouncil.org

Verizon Response to S&P

Verizon Communications issued an immediate response to Standard & Poor's ratings announcement:



"Despite the general industry issues cited by S&P, we do not believe this watch is warranted given our strong business results and progress with debt reduction. We have confidence in our business model, which continues to generate healthy cash flows, including $6.4 billion in free cash flow last year. We have already reduced total debt by more than $18 billion over the past two years," said Doreen Toben, Verizon CFO. http://www.verizon.com

Standard & Poor's Foresees Greater RBOC Risks

Citing changing wireline industry dynamics and lack of clarity regarding key regulatory and competitive issues for RBOCs, Standard & Poor's placed its long-term ratings for Verizon Communications on its CreditWatch list with negative implications. Verizon Network Funding Co. also was placed on CreditWatch with negative implications.



On 17-Feb-2004, S&P placed SBC Communications and BellSouth on CreditWatch with negative implications, following the announcement that Cingular had agreed to acquire AT&T Wireless. These companies remain on CreditWatch with negative implications due to the potential credit weakening associated with the debt that SBC and BellSouth (Cingular's respective 60% and 40% owners) will incur to fund the AT&T Wireless transaction ($41 billion in cash plus net debt assumption). In addition, Standard & Poor's said the CreditWatch listings for SBC and BellSouth now include the additional potential for a rating downgrade as a result of increased business risk for these companies' wireline businesses.



In a conference call and press statement, Standard & Poor's observed that while these RBOCs maintain solid business positions and dominant market shares in most of their wireline sectors, "it is clear that their business positions have weakened to some extent in recent years and are likely to continue to be under increasing competitive pressure." S&P said the main challenges to the RBOCs' historical core business are threefold:

  • continued loss of access lines to wholesale lessors;


  • wireless substitution; and


  • cable telephony.


"Standard & Poor's recognizes that the three investment-grade RBOCs will continue to demonstrate many solid business and financial characteristics. Their business positions, though weaker than in the regulated monopoly days, are still solid. They have strong balance sheets and significant free cash flow, which enables potential deleveraging. Each has a major ownership position in a strong, nationwide wireless company."http://www.events.standardandpoors.com

Bharti and IBM Announce Telecom Partnership

Bharti Tele-Ventures Ltd., India's leading telecommunications conglomerate, and IBM India announced a long term on demand business transformation agreement targeting the telecom industry. The deal encompasses three components:

  • an initiative to consolidate, transform and manage comprehensive Information Technology (IT) infrastructure and applications.


  • the joint development and marketing of IT and telecommunications solutions and services for India.

  • Bharti Tele-Ventures to be a preferred supplier of telecommunications services to IBM India.
http://www.bhartiteleventures.comhttp://www.ibm.com/services

Sprint and Truckstop.net Sign Wi-Fi Deal

Sprint entered into a bilateral Wi-Fi roaming agreement with Truckstop.net covering more than 500 Truckstop.net wireless-enabled truck stops and travel plazas in the United States and Canada. The deal will also allow Truckstop.net service subscribers to connect to Wi-Fi ZONES compatible with Sprint service nationwide at many airports, convention centers, hotels, shopping malls and other public venues. http://www.sprint.comhttp://www.truckstop.net