september 2008 by paul brigner executive director, internet and technology policy verizon...
TRANSCRIPT
September 2008September 2008
ByBy
Paul BrignerPaul Brigner
Executive Director, Internet and Technology PolicyExecutive Director, Internet and Technology Policy
Verizon CommunicationsVerizon Communications
September 2008September 2008
ByBy
Paul BrignerPaul Brigner
Executive Director, Internet and Technology PolicyExecutive Director, Internet and Technology Policy
Verizon CommunicationsVerizon Communications
Communications Communications Industry Trends – A Look Industry Trends – A Look
AheadAhead
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Major Paradigm Shifts Redefine Telecom MarketMajor Paradigm Shifts Redefine Telecom Market
The Wireless Paradigm— Anytime/anywhere/high bandwidth connectivity— Lifestyle/business personalization— “On-net/off-net” vs “Local/LD” pricing — Consumer electronics lifecycle for handsets are shorter than
traditional telco product lifecycles
The IP Paradigm— Universal connectivity and standards— Greater control by users at the “edge”— Voice as an IP application vs basic service — Value creation through broad-based investment
The Broadband Paradigm (wireline and wireless)— Accelerates and intensifies the impact of wireless and IP— Extends high-capacity capabilities from hubs to endpoints— Drives interactive applications and services – platform to help
address key social concerns – energy efficiency, environment, education, health care
— Convergence
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Communications MetricsCommunications Metrics
54 percent of all homes now have broadband
82 percent of all Americans have a cell phone
16.1 million African American homes had broadband in 2007– 40.2 million African Americans in total
— Increased from 5.6 million in 2005 to over 16 million last year— About 40 percent of all African American homes had broadband –
more than 54 percent of white homes
Number of poor (those making less than $30,000 annually) connected to broadband – 10 million last year
— Thirty percent growth last two years
71 percent of African Americans, 74 percent of whites and 84 percent of Hispanics have cell phones
— Yet half of all African Americans do some sort of non-voice data service every day and only 38 percent of whites do
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The World Has ChangedThe World Has Changed
To…From…
Mobile and Converged
Broadband
Multi-media
Packetized
Optical Infrastructure
Open architecture
Market-based regulation
Wireline
Narrowband
Voice-centric
Circuit-switched
Copper infrastructure
Proprietary architecture
Traditional Regulation
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Telecom Sector ChangesTelecom Sector Changes
POTS – plain old telephone service
“Old World”— Common carrier regulation – no competition
Today – Competition in communications markets
Evidence? Line loss by telephone carriers Wireless cannibalization VoIP offered by cable operators 8-10% annual line loss across sector In 2007 VZ had 4% lines loss to cable VoIP plus another
4% lost to wireless– 33M Households in Verizon footprint– 2M lines per year lost
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U. S. Market is VeryCompetitive in BroadbandU. S. Market is VeryCompetitive in Broadband
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Verizon’s StrategyVerizon’s Strategy
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Verizon Largest Cap ExInvestor in the U. S.Verizon Largest Cap ExInvestor in the U. S.
Capital Expenditures (in US$ billions)
Year Ending Sept./Dec.
Source: Yahoo Finance data
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Verizon’s Broadband DeploymentVerizon’s Broadband Deployment
No company has committed more resources to network upgrades – more than $63B in since 2004
FTTP – Undertaking a very ambitious roll-out of passive fiber optic cable to customer’s homes and businesses
DSL – Continuing to extend the reach of DSL— Nearly 80% of our lines are DSL-capable; 90% in urban areas
EV-DO (wireless broadband) – Reaches 228 million people today— LTE by 2010 with possibly 75 megabits down
Other technologies – exploring innovative and cost-effective ways to bring broadband to more customers
— Partnerships with non-profits such as One Economy to bring broadband to low income customers living in subsidized housing
— New highly-flexible fiber from Corning allows tighter bends for installations in cities
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Upstream DownstreamMbps
Applications and Media BandwidthApplications and Media Bandwidth
5 10 15 20 250 100510152025100
File Sharing, Home Video Sharing/Streaming
Multi-Player Gaming, Interactive Distance Learning
Large File Sharing
HDTV Video-on-Demand
Network Hosted Applications and Storage
Video Conferencing, Premises Surveillance, Two-way Signing
Telemedicine
SDTV Video-on-Demand, Telecommuting
Premises Web Hosting
Next Generation 3D TV
Web Surfing
Real-Time SDTV, Network PVR
FTTPCable Modem
ADSL
Dial-Up
Platform for current and future content and applicationsPlatform for current and future content and applications
Upstream Speed Increasing in Importance!
FiOS Fiber to the Home
FiOS Redefining InteractivityFiOS Redefining Interactivity
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FTTP/FiOS Bandwidth – A Quantum LeapFTTP/FiOS Bandwidth – A Quantum Leap
Niagara Falls
•100 Meg Service Being Trialed•50/20 Meg Service available •20/20 Meg Service available•15/15 Meg Service for $65
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Power &
Battery
ONTONT
Data
POTS
OLT
FTTP - FiOS ArchitectureFTTP - FiOS Architecture
Internet
Video
Super Head End
BroadcastServices
SER
VideoHub
Office
VerizonBroadband Network
InteractiveServices
TDMSwitch
NetworkTransportSwitching/Routing
Local CO(Video Serving Office)
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Voice
Streaming VideoVideo ConferencingVCastHigh Speed AccessVideo ConferencingMusic and Video Content Multi-MediaMulti-Player GamingLarge File Transfer
Text MessagingPhoto Messaging E-Mail and PIM Small File Transfer
CDMA EV-DO(300-500 Kbps)
1XRTT(40-80 Kbps)
2007
2004
Today
Richness & Complexity
Wireless Evolving to AnEver Faster PlatformWireless Evolving to AnEver Faster Platform
Platform for mobile content and applicationsPlatform for mobile content and applications
Compatibility, Simplicity
LTE(Multi-
megabits)
2010
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Key Metrics Will ChangeKey Metrics Will Change
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Open Development Initiative:a Key Driver of InnovationOpen Development Initiative:a Key Driver of Innovation
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How is the U. S. Doing?How is the U. S. Doing?
The World Economic Forum ranks the U.S. 4th in “networked readiness,” which measures ICT development, taking into account the environment and individual and corporate usage and readiness. Denmark is 1st, Japan is 19th.
The Fiber to the Home Council estimates that North America has 2.91M fiber connections and has been growing annually at a rate of 97 percent. The number of FTTH connections continues to almost double annually in the U. S. This compares to just 1M subscribers in all of Europe. Japan has far more subscribers but has been deploying fiber for far longer than any other country.
More than 12 million homes in the U. S. and Canada are passed by fiber networks compared to only five million in Europe. Nevertheless, as IDATE, a major European analyst firm put it “fiber to the home is still concentrated in only a few countries as Europe remains far behind leaders such as Japan and the US (emphasis added)”.
Verizon has more than 70% of the North American fiber connections and accounts for more than 11 million homes passed in the U. S.
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Over 1 Billion Internet Users Worldwide; growing by 10 million each month.
In 1996, 1.5 million gigabytes traveled through major U.S. Internet connection lines per month. By 2006, 700 million gigabytes traveled through major U.S. Internet connection lines per month.*Daily email traffic is expected to grow from 90.4 billion emails in 2007 to 102 billion emails in 2009.** Half of all email contains image spam, which is five times the size of traditional text spam.***Backbone traffic is doubling every 12-15 months
The amount of traffic, type of traffic, number of users and length of connection time are all increasing so traffic is expanding rapidly.
*the University of Minnesota Digital Technology Center
**IDC
***MSNBC
What Kind of Traffic Does What Kind of Traffic Does Today’s Internet Handle?Today’s Internet Handle?
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Broadband is a Platformfor Helping Solve Key ChallengesBroadband is a Platformfor Helping Solve Key Challenges
Health Care – Ninety percent of medical records are still paper
Energy Efficiency – Thirteen percent reduction in energy use from real time information on energy usage
Education – Truly individualized approaches and “learning communities”—Thinkfinity a major leap forward in this regard
Environment - Prudent use of technology could reduce human-induced global emissions by 15 per cent by 2020