Ouch, KPN forgets it offers FTTH in Almere

KPN has launched a new website called "internetvergelijken.com", which is a website to compare internet subscriptions. The website only shows KPN DSL-subscriptions of KPN brands; KPN, Telfort, Het Net and XS4All. It however omits KPN's FTTH offers.

As all of you know Reggefiber has built an FTTH-network all the way into my house in Almere and KPN is the sole provider at the moment on that network. KPN has invested in a 41% stake in Reggefiber, so I thought I would be able to see the KPN fiber offer in my home.After all at 1000 euro/house connected it is quite a sizeable investment. Unfortunately this isn't the case. KPN seems to dislike people moving away from DSL to fiber and doesn't promote it's offer at all on this website (or by any other means as far as I can see, except for kpnglasvezel.nl).

The site also excludes providers who use KPN's network to offer their services, resellers and those that use KPN's copper but through Local Loop Unbundling (BBNed, Tele2 etc) and of course offers of cable providers like UPC, Ziggo or Kabel Noord are not shown. I can understand omitting cable as KPN doesn't get any money from customers going to these networks, but LLU and wholsale broadband access is real money for KPN. I once heard someone at KPN say: "I don't care who sells the copper as long as it gets sold. When they  move to cable, that is when I get angry"


So my question to you Are the margins on DSL so good that it is more profitable not to get a return on a sunk investment in FTTH?

But of course I will promote Virgin Broadband for free on my blog.

It seems like Virgin UK broadband's ad agency spammed the blogosphere with its new ad and asked for feedback on it. Where feedback means; "could you please post it on your blog and be nice about it". James Enck already put a review up: "Cute, but pointless, and it does nothing to convey the sort of message this company should be telling regarding its competitive strengths." I can only say that I am glad that I got an e-mail explaining the ad, as otherwise I would never have known that:

We’ve recently been working on a new video to promote Virgin’s 50Mb broadband service, following on with the ‘Powerful Stuff’ idea. For the video, we’ve recreated the famous ‘When Harry Met Sally’ diner orgasm scene, but with a slight twist!

The video was shot with all the men in the diner thinking they were just extras in an advert. The reactions are genuine, which hopefully gives it a funny edge.

Unfortunately for Virgin I don't like When Harry met Sally, it makes me cringe everytime it is on TV. This ad, though more original than UPC's ad for Fiber Power makes me want to switch away as quickly as possible. Imagine this coming on tv, when you're on the phone with a friend. Nope, if they want funny, they should go to Hong Kong and see how real fiber is promoted.

Virgin's ad agency should have a look at what KPN does with its commercials. The current series of Generation KPN are quite good in promoting KPN.

WARNING: Virgin's ad is Not Safe For Work (with audio on)

From GigaOm: What a daughter's broken leg tells about broadband

This is just one of those stories that explains how our world changes through the internet, through access to highspeed broadband. There is no business case, there are just billions of examples.

http://gigaom.com/2009/08/17/what-my-daughters-broken-leg-taught-me-about-broadband/

OECD publishes Communications Outlook 2009

UPDATE the next morning: Tad Reynolds of the OECD commented below and on the OECD Facebook page. The OECD Facebook page contains a bit more stats. I knew I should have called Tad at midnight, just to ask him to clarify, but I didn't otherwise I would have written a totally different article (something along the lines of OECD publishes unclear chapter in Comms Outlook 2009. Here are Tads comments.

Thanks Rudolf. The OECD basket methodologies define a number of calls (rather than minutes) which then can vary in terms of duration. So the high basket covers 1680 calls (which works out to 2952 minutes per year) using the methodology. This works out to around 4 hours a month of outgoing calls which is a good size in Europe but on the low end of typical consumption patters in Canada and the United States.

We will work to correct and clarify the situation in the PDF version.

Original: It's here, it's full of statistics! Statistics we can all fight over! The OECD Communications Outlook 2009 (in online PDF) is every telco business/regulatory geeks best friend! And boy have I found some statistics to fight over already on page 280.

It aren't even the broadband stats, sorry haven't looked at them yet. Nope, the mobile pricing stats are the one's I want to start a fight over. I don't know who, but someone in the mobile industry convinced the polite and naive OECD that 760 mobile minutes (outgoing) per year is medium usage and 1680 minutes per year is high usage. That is respectively 65 minutes and 140 minutes per month. As I wrote in a previous post the average usage in most of Telenor's countries of operation is higher then that. Developing nations like India, Pakistan, Sri Lanka, Malaysia and Thailand all reach these numbers. Only Serbia doesn't.

In the USA (as the OECD reports as well) the average usage is 5-6 times this number. And as the US is a country with high fixed an low usage costs, it gets an especially bad deal in this comparison. The OECD acknowledges this, but I hope that next year the medium usage will be at least at the medium usage of countries like Sweden, Denmark or The Netherlands (200-300 minutes).(and now I will take my medication and calm down again)

Basic truths about broadband speeds (reaction to Kevin Walsh on GigaOm)

On GigaOm Kevin Walsh has written down some basic truths about broadband, as he sees them. He sees a big problem with politicians wanting the wrong things when it comes to guarantees on bandwidth speeds. As he says:

Many believe that broadband service providers selling, say, a 5Mbps service should be required to set aside the same amount of capacity in order to fulfill that implicit service-level agreement (SLA). In other words, if you pay for 5Mbps, it’s there when you need it. But the reality is that networks, just like hotels and airplanes, are almost always oversubscribed — the owners of these assets sell more capacity than they have available.

Unfortunately this article messes things up just as badly as the politicians criticized. I reacted in the comments and post the comment here too. There are the important elements that need considering.

1. The speed of the line from the end-user to the local aggregation point (switch, cable head-end). DSL and wireless technologies are particularly crappy, as the speed the end-user can have is a function of the distance the end-user is from the DSLAM or the antenna. Unfortunately there are still telco’s that sell up to 8mbit or up to 20mbit subscriptions that can only attain 4-8mbit/s because of distance limitations. The really nasty one’s try to upsell the customer to a top tier 20mbit/s line where only 4mbit is achievable and so a 4mbit/s subscription would have sufficed
2. The speeds that can attained between 6pm and 10pm and the speeds that can be attained between 2am and 6am. These can be limited by oversubscription on:

• a. the local segment (cable and wireless) and
• b. on the ISP’s WAN
• c. from the ISP to the rest of the world

Oversubscription on the local segment is a fact of life on cable and wireless networks. It is a shared medium. This should be clear to end-users. It is not bad, it is a fact of life. It’s effect is that between 6pm and 10pm the speeds can be erratic. between 2am and 6am the listed speeds can quite often be attained.

Oversubscription on the WAN is part of the problem you’re describing above. Oversubscription on the WAN is not an economic fact, it is a result of crappy network planning. Oversubscription on the WAN can be completely unnoticed by the end-user if the network operator builds enough bandwidth into it’s WAN. If the network owner and the ISP are the same entity, this shouldn’t be a problem. With traffic growing 50% per year proper network management dictates that an oversupply of bandwidth is necessary anyways. Statistics from the AMS-IX in Amsterdam show that peak traffic is about 50% higher than average and three times higher than the bottom. So next year your average is the same as today’s peak and in 2.5 years even the bottom is at today’s peak. WAN Bandwidth is a problem in some countries like the UK and the USA where the costs of backhaul to and from smaller communities are extremely high because of regulatory and/or competitive problems. Mind you, technical and cost limitations are often not important here, as the costs of installing faster equipment is often not prohibitively high. (DWDM, 10Gbit/s ethernet etc) This also means that you don’t have to build your network in a fashion where everyone can achieve max speeds at the exact same moment. Just carefully planning it. Like the highway system, where we don’t expect all car drivers in the US to show up at the Brooklyn Bridge at the same moment (or to start driving at the same moment at all, regardless of location).

The costs of traffic from the ISP to the rest of the world is governed by the economic laws of peering and transit. For an explanation see my article on Ars Technica. Whether enough is available to the end-user is dependent upon how easy it is for an ISP to get peerings with the most important networks (Google, Microsoft, Yahoo, Akamai etc) and the local costs of transit. Many developing nations find that their biggest problem lie here:

• The national incumbent monopolizes transit traffic and charges outrages amounts for it.
• No local internet exhanges to keep local traffic local.
• No possibilities for local peerings with Google, Microsoft, Yahoo etc meaning that the transit link gets hit harder.) 

Amsterdam, London, New York are places with low costs for transit ($4/mbit/s/month) and many peering opportunities, so any network operating there should be able to get enough traffic for their end-users. Dave Farber once mentioned that traffic costs were only between 1%-5% of a subscription.
So, to conclude:

• Politicians are right to complain when listed speeds on the local loop cannot be attained because of distance problems. Providers of DSL and wireless should be put in the doghouse for this. The should inform their customers properly of what speeds can really be achieved.
• Cable networks and wireless networks could be required to publish the mean and median speeds users can attain between 6pm and 10pm.
• Problems on the WAN and on the interconnect to the rest of the world are either a result of bad investing in backhaul or because of regulatory and competition problems. If that is the case the ISP should inform its customers of the situation, explain why this is the case and show how it deals with distributing a scarce resource among all the users. A good example is the Plusnet DSL network in the UK who are very clear on how they prioritize network traffic between different classes of customers.