Friday, 28 November 2008

Alice / BBNed will disconnect me, can you help?

Just found out that my ISP, Alice / BBNed in the Netherlands has made an error with our move to a new home. We're moving end of next week, but Alice is disconnecting me by the 30th of November at the current location and connecting me by the 1st of December at my new location. This leaves me without phone and internet for almost a week.

Anybody know how I can have BBNed not disconnect me on Sunday?

Much obliged for any help that can be offered :-) Will think of a proper way to say thanks too :-)

Monday, 24 November 2008

KPN/Reggefiber offer fiber for €12 euro/month

The  Dutch will get wholesale fibre for between €12 and €17,50 a month. OPTA has just released its opinion on investments in fibre networks where a party with significant market power is involved. You have until january to voice your objections and then the digging starts. That's what tonights published document says (more or less).To find out much more about this proposed deal and its background and how KPN and Reggefiber fit together see these ubervalued , super-duper , hi-James-we-copy-your-style , multi-talented, scoop-hunting , fellow-bloggers and my own  stuff. I hope those guys will go into comparisons on price etc as I'm now going to go to sleep.  (Update the morning after: Yves Blondeel has a good analysis of the proposed regulation too)

To start with the sweet stuff in the back of the document. In the annex you can find the prices for the Optical Distribution Frame service of  Reggefiber as the passive operator of the FTTH-network. The offer is for a wholesale service. The annex is written as the contract that operators of the active services on the network will have to sign. All costs are excluding VAT (19%) and applicable discounts.

The monthly fees are:
Depending on the area type there will be different CAPEX. The monthly fee per customer is dependent upon the area type and CAPEX. Normally the price should be at the first price, but it may go up by as much as €2,50 if certain penetration rates aren't reached to satisfaction etc. If an area has a higher or lower CAPEX, every 50 euro's is another bracket and another 75 cents. There is a discount for bringing in more customers in a specific area. The discounts are as follows: Vincent correctly saw that this all suppliers get this discount if the active fiber pairs in a region hit this number!
This sounds like a good teaser for KPN as it will give them discounts in their retail side when they bring customers over from the DSL offers to the new environment. There are some connection, disconnection fees, Pop-fees etc. Most are one-off, some monthly. Energy is outside the scope. In the accompanying letter OPTA says it agrees with the Reggefiber's pricing. It will formally say so on December 19th and explain its reasoning after which it will notify Brussels and give you time to voice your objections. The Dutch Competition Authority NMA will start this week on a market test. 
The main bit of the letter however is the market consultation of the proposed policy rules for price regulation for unbundled access to fiber optic networks. You have until December 8th to have an opinion. This bit is full of legalese.  So I'll try to condense it. Everything is done in conjuction with the Proposed decision for the unbundled access to the wholesale level of November 5th. In this proposed decision KPN is designated as a party with Significant Market Power. 
OPTA nicely adheres to the stated goals of infrastructure competition. On paper it looks good, but realistically we won't see a second, third and fifth party rolling out a ftth network under these conditions. The Netherlands is stuck with Cable vs KPN forever and wireless will play a minor role too. 
Opta will regulate the offer done by Reggefiber and KPN as it would with a copper network. So there are protections against price squeeze, discriminator pricing and excessive prices. Nothing on delaying tactics, which is a bit of a pity as I would think that KPN's All-IP plans have already sown Fear Uncertainty and Doubt in the investors community and this plan just ups the ante. 
The regulation will be by creating a ceiling for he prices Reggefiber can ask for its wholesale offer. The calculation of the price is done by using a variable All-Risk Weighted Average Cost of Capital. The WACC consists of the standard WACC for the copper network, with on top of it:
  1.   an extra fiber WACC as fiber is a risky investment by itself. This one is thought to be variable and decreasing over time as the investors know better what they got themselves into.
  2. a regulatory risk WACC, which is stable as regulators are notoriously unstable and investors want to be compensated. 

If the internal rate of revenue goes over the WACC than Opta will either lower the ceiling or Reggefiber will need to quikckly invest more into less profitable regions. OPTA will evaluate the ceilings every three years based on the entire business case. Nice thing is that the Reggefiber is allowed to increase prices in accordance  with the official Dutch inflation numbers. (Now how does that work in a time of deflation). Unfortunately there are no numbers on the height of the WACC etc yet. 
Opta does promiss to be vigilant and guard that Reggefiber won't make excessive profits by misrepresenting potential penetration rates, Capex per region etc etc. 

Firewalls prohibiting working at home

I've been working from home quite alot recently and the corporate VPN my boss provides has been quite helpful. However I think we need a bit of a paradigm shift before we all can truly enjoy working from home when we want to. And it doesn't even fibre for all, just a different kind of corporate IT-security department. I also had a word with some colleagues and some of Logica's IT-architects are arguing against firewalls and defining a strict internal and external view of company IT.

The result of not having an internal or external view of company IT, would be that a system is either safe and trusted and can be accessed from anywhere by authorized users or a system isn't safe and it doesn't matter whether it's in the corporate perimeter or not. (one of the assumptions is that if you run a large company like some of our clients, inside is almost as hostile as outside as corporate espionage is a risk)

The effect may be that it doesn't matter where personnel lives/works as long as they can access the systems. Of course there are other objections against not seeing your colleagues, but on a day like today when we were supposed to be snowed in, being able to work from home can be a production saver.

An example, my wife works as a credit management consultant for different clients every 3 to 6 months. She always has to drive to the client as they don't trust her to tele-work (you know corporate IT security). Yet she has complete access internally... Now how is that different?

Sunday, 23 November 2008

Regulators blog too (in Espagnol) + Dutch Radio on KPN/Reggefiber

The Spanish Regulator CMT blogs ! Their CMT blog actually linked to my blog. I actually found them looking for post's on the Reggefiber/KPN story, via the British Fibrevolution , which ofcourse got its name from Benoit's Fiberevolution . The Spanish also link to Tim's Communication's Breakdown and how everything depends on a Regulator! (BTW according to Tim's twitters OPTA will publish the long awaited FTTH paper at 7PM tomorrow)

BTW on the Reggefiber/KPN story; you should have already seen James' Eurotelcoblog piece where he answers my question of where KPN got the money for the investment.

Dutch Radio 1 also has an item on the Reggefiber/KPN story. They have an interview (in Dutch) with Gaby ter Keurs, the marketingdirector of Reggefiber. Absolutely no denying Vincent's story . Congratulations Vincent! Good scoop! Usual words on how it costs between 1000-1500 euro per sub

Ziggo is also in the broadcast. They're giving the usual story on how their network is 80% fibre. How they will reach 300Mbit/s. (great marketing btw, fibre should go with standard 1Gbit to every house as 100Mbit just sounds lame) But interestingly enough, they don't deny that fibre is the end game and kind of acknowledge that. (must have been a slip of the tongue)

Good question is whether the fiber network will be cheaper. No real answer to that question. However the marketing guy of Regge could have been a bit more confident there. Their investment of 1000-1500 might give lower prices as it is significantly lower than the €1560 per connection paid by Ziggo's owners. Plus the owners KPN and Regge seem to have a longer term view than the owners of Ziggo. (UPC is in better shape as said previously)

Wednesday, 19 November 2008

Voda-NL: UMTS is useless

Voda-NL has just come out with the message that UMTS is useless. Well, not literally, but that is how I interpret Vodafone capping new and renewed Vodafone Careless Internet Blox to 256kbps instead of the current 3600kbps. There is absolutely no reason for users to buy an HSDPA enabled phone anymore as GPRS is all you get. Literally Vodafone's spokesperson has said that 3600kbps is overkill for end-users as they only surf to and use E-mail.(According to them this is what other market parties were offering).

Voda was offering a Blox subscription at 3600kbps for €9.50/month. It baffles me why Vodafone has taken this blunt route. It seems to me they have made a PR/marketing/financial blunder:
  1. The change was announced without a viable alternative being introduced. So now everybody sees them as short changing customers. 
  2. Voda has said they will come with a new subscription, that would offer the old speed back. What they should have done is introduce 2 new subscriptions, next to the old one, on day one. One that is much slower and has a low cap. Say 128k down and 50 meg cap for 5 euro, one 256k 150 meg cap for 10 euro and one unlimited for 20 euro/month. Nobody would have been the wiser. (I trust Voda could come up with a better plan that even someone with a degree in finance wouldn't be able to understand)
  3. I don't see how capping download speeds is good for Voda. The best thing that could happen to them is customers going over their cap and paying a bonus. That is what hapens with bundles of minutes. Its very simple to go over a 50MB cap if you have 3.6mbit/s available. At 1 euro per meg you go over your cap, this could be a real money maker. 
So, badly communicated and it may be bad for  business too.

Update the day after: Voda has just said the speeds will remain 3600kbps for all users. Bad PR was killing them.

Breaking news: KPN Reggefiber 7 billion in FTTH and regulatory approval

James Enck beat me to it: KPN and Reggefiber are going to invest 6 billion in FTTH for everybody in The Netherlands. Plus NMA/OPTA seem to be cool with the KPN/Reggefiber joint venture. That is news! For those of you who want the original article... you need to wait for the archive of Trouw, probably tomorrow. Update (13:19): The article is now available online and so is Vincent's blog posting on the subject.

Some interesting questions:
  • KPN announced this morning that they will also be doing a stock buy back worth 1 billion. Where are they getting the money?
  • What will be the effect on competitive networks, like BBNed. Will they have a place in the Dutch landscape? The answer is probably yes. Reggefiber is thinking of fiber as a real estate play. (Light/beer, whatever you want to push through the fiber is your problem).  Regulators (in their right mind) should see it the same. So mandated unbundling and access for BBNed/Tele2 should be the norm. 
  • What will be the effect on Cable? UPC is probably in better shape than Ziggo. Liberty/UPC got a free network when they converted the bonds to stock when the bubble burst. Ziggo paid €1560 per sub and is in much more difficulty when it comes to being competitive in the market. 
  • Will this prove to be a pre-emptive strike by KPN/Reggefiber to create Fear, Uncertainty and Doubt in the market? Whether or not it was aimed to discourage others to invest in the market, the effect will be the same. Investments in competitive networks are already more difficult ever since KPN's All-IP plans. This will have the same chilling effect. All KPN needs to do now is work 2 years tirelessly and then nobody will invest in new networks anymore. 
  • Is KPN's deal with Reggefiber exclusive? Could we see other financiers step into this market? Pension funds should be interested?
Oh well  this time next year I'll have FTMH (Fiber To My Home) as I'll be moving to Almere in  december and my street is scheduled for November 2009. (pictures will follow). I don't need to Bring my own Broadband

Monday, 17 November 2008

BT shareholders don't like broadband

The Inquirer runs the story with the following great quote from BT's CEO Livingstone.

"There are some shareholders who say 'you know something, don't do that, don't do a whole lot of other things. That leaves you with a lot more cash and cash today is worth a lot more than cash in a few years' time'."

And let us be honest. Right they are. BT should only do a defensive move into investing where it might loose market share to Virgin. Maybe some investment where the OPEX decrease warrants the CAPEX increase. Because all in all, shareholders are not there for the public good. Their only interest is self-interest. 

Regulators are to blame for this as well. It seems the return on the local loop is good enough that there is no reason to invest in anything new. Said differently, why invest for the coming 50 years if the last 50 years makes enough money.

This is what I tried to get across in the presentation below at the OECD's fibre conference in Stavanger. 

Dig Now
View SlideShare presentation or Upload your own. (tags: investment ftth)

Thursday, 13 November 2008

The Netherlands the greatest nation in the world bar none

Gordon Cook asked on his excellent list about the reasons for The Netherlands success in the telecoms arena. Here is my answer.

Here are some items that make The Netherlands the greatest nation in the world bar none (specifically towards telecommunications).

First of all, the Dutch are pragmatists. Whatever they do, it should work. It's less important what the dogma is, as long as it works. This has it's effects everywhere:

  • Administrative processes and regulation should just work (making The Netherlands quite efficient, with for instance the best looking tax forms and money)
  • Technological choices are based on what works
  • No winner takes all mentality. Everyone can leave a negotiating table feeling that both parties have benefitted
    • Unions and employers get along quite well. The employers are not too stingy and the unions don't ask too much money.
    • Solutions to societal problems are generally thought through quite well as all sides get a say
    • The Netherlands (like Switzerland) can be a neutral solution between big nations.
  • Dutch Creativity/Design is an example of designs that generally are simple, witty and work. Think Koolhaas, Wanders, airport signage by Mijksenaar, TomTom
Second, the Dutch always have this fear of not being taken seriously by the rest of the world because of our small size as a nation. (As individuals we fare better size wise) The result is that we put alot of effort in being among the best.
  • The Dutch can't stand being in the bottom of an (OECD) list. Top 10 is the least.
  • The Dutch always wonder why they are not part of G7/G20 meetings
  • In international negotiations we want to be heard and so try to find the pragmatic middle between the various nations.
Third, the Dutch have been traders (transporters) since the middle ages.
  • Traders need flexibility. Tomorrows success is something different than todays
  • Traders see solutions everywhere in the world and adapt them for their own situation
  • Traders need communication to execute trades and to track shipment
So how does this work out for the position of the Netherlands in the Telecommunications world?

  • Dutch academics in the nuclear particle physics community in the 70's and 80's always ambitious to be among the best, so needing communication with the rest of the world
    • KPN wasn't as pro European/anti-American as other Euro incumbents
    • Dutch Networks easily allowed to connect to both European countries with European communications standards and the Americans with their own communications
    • Netherlands (Amsterdam) became the hub between the Europeans and the Americans
    • Meetings were easily set up in Amsterdam, good connections by plane.
  • Always active in whatever standardization organization was important. Be it ETSI, ITU, IETF, IEEE etc.
    • Whatever needed standardizing, the Dutch were there with a pragmatic, just get it working approach.
    • When you help standardize it, you want to trial it (and not wanting to be the dumbest kid in class, The Netherlands did quite early generally) 
    • Many technologies developed in The Netherlands or influenced heavily by developments in the Netherlands. Bluetooth and Wifi come to mind, but also the DNS community, IP (adresses by RIPE) 
  • Entrepreunerial people helped to develop good ideas into practical realities that just worked, or adapted to changing situations.
    • Think of the start of the commercial internet in Europe (EUnet and NLNet)
    • KPN dealing with the reality that they weren't the monopolist anymore and actually "allowing" competition. This was a different reaction than many of their competitors east and south of The Netherlands. 
    • Start of internet with companies like XS4ALL, who supported the greater good and not only their own bottom line.
  • Regulatory environment that supported the growth of telecommunications
    • Government tax credits for buying a PC via your employer, resulting in high PC penetration --> resulting in a high uptake of internet
    • Regulations that gave telecommunications companies the freedom to lay fiber backbones throughout the country without negotiations with every municipal government.
    • Regulations that allowed competition in the telecommunications market. 

Wednesday, 12 November 2008

Question: What can an IPTV/VOD provider do with viewing data?

A student asked me what the legal problems were with selling data on viewing habits with digital TV/IPTV (both broadcast and on demand). I must say, I don't know.

- Can a provider of digital TV resell information on whether a user has ordered certain (naughty) television channels?
- Can a provider of digital TV resell information on all regular viewers of BBC Top Gear (name your programme?)
- Are they allowed to store all viewing data?
- etc etc

Anybody have any good pointers to academic papers on the topic? What laws do apply (preferably Netherlands, Europe, rest of world (in that order)

Addendum November 13th: Read the super addition on the Italian situation by Eugenio!

Thursday, 6 November 2008

Started Twittering

I really don't know why, but I all of the sudden had an urge to start Twittering. Given all the buzz that twitter will fail in the coming year/years, I at least want to know why and what it actually was. To me it looked a bit like IRC without conversations, just people shouting into an echo pit. Oh well, we'll see if it is something that is useful or not. I've already found out that most people I know don't Twitter at all for my twitters (or see the sidebar next to the blog page)

Mobile content makes money in Korea

The Inquisitor reports on two mobile media moguls in Korea. Their company DirectMedia is hugely succesful in the Korean mobile content market. The article is a bit sketchy on the why and how of the Korean market. The positive things are:
  • that its DRM-free mostly, 
  • short release periods for all content. (so the movie comes out this week, but you don't have to wait half a year for the mobile accessible version),
  • 60% of music downloads are to mobile, compared to 15% elsewhere,
  • they create new and original content for mobile as an extra next to the official movie/soap (can you imagine Heroes comic episodes? (GRMBL... I forgot to tape the new episodes of Heroes yesterday on BBC)
  • the Telco invests in them and provides a billing platform. 
  • and the killer, they don't see themselves as a content company, but as an applications company that provides multiple applications for users. Revenue share on content (b2c), operator fees for
    supplying the platform (b2b) and shared data charges on sporadic
    special events, such as a Korea Vs Japan Baseball game. Incidentally the only time
    their servers have gone down.
What I didn't get was the revenue that they have. $15 million is kind of bleak next to the "Crazy Frog" people who have $300-$500 million. Korea's country size is 49 million, so allowing for size of the US and EU markets, it might not be a very bad number, but it does sound lower.