Connecting All Americans
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Connecting All Americans Connecting All Americans Presentation Transcript

  • Connecting All Americans Link Hoewing VP, Internet and Technology Policy July 15, 2007
  • Broadband Penetration Rankings – By Household EU25: 39% Internet, 23% Broadband US50: 70% Internet, 42% Broadband Source: Pew Internet & American Life Project, “Home Broadband Adoption 2006”, May 28, 2006 Source: European Commission, “E-Communications Household Survey”, July 2006 State Data Source: Render Vanderslice & Associates, September 2006
    • Key Takeaways:
    • US Internet & Broadband Adoption Significantly Higher than EU Overall
      • Internet US 70% vs. EU 39%
      • Broadband US 42% vs. EU 23%
    • On a state-by-state basis:
      • The most penetrated US states compare favorably with the most penetrated EU countries (US States would be 8 of the top 10)
      • The least penetrated US states are above the EU average (23%).
    Bottom 3 US States Top 3 US States Page
  • Platform Competition – Lacking in Europe The majority of European markets have a small non-DSL infrastructure, and cable penetration – particularly – for most of Europe is at less than 21%. Unbundling of DSL throughout the EU is, in large part, to compensate for a lack of platform competition. European Competitive Telecom Association (ECTA), ‘Scorecard’ 1st quarter 2006. 491,100  5,934,604 40,757,959 Europe Total / Average   8,500 2,870,354 8,173,113 UK   63,000 1,550,000 2,727,121 Netherlands   343,000 0 7,038,612 Italy   76,600 284,250 11,305,352 Germany   0 600,000 10,219,301 France   0 630,000 1,351,482 Belgium Total Other BB infrast. (FttH, Sat., WLL, other) Cable Internet broadband connections (total) Total country DSL lines Country 
  • Record Year for BB Growth
    • 20 largest cable and telco providers in the U.S. combined added over 10.2 million new BB subscribers in 2006
    • For 2006, Verizon added 1.8 million new BB subscribers
    • These providers now serve over 53.3 million BB subscribers, with cable controlling ~55%
    Source: Leichtman Research Group
  • Broadband penetration in the U.S., 2000-2007
  • Today’s U.S. Broadband Market is Highly Competitive Most households can get broadband: 82% DSL 94% Cable 50,000 WiFi Hotspots exist nationwide Broadband over powerline now competing in dozens of locations The percent of households subscribing to broadband has exploded: More than 50% of all homes have broadband Carriers are offering lower entry prices for their broadband services: Verizon offers $14.95 DSL Carriers are improving the high-speed options available to customers: Verizon FiOS 50 Mbps Cablevision 16 Mbps Mobile carriers have introduced new services and networks: EVDO (700 kbps average speed) available to 255 million Americans
  • Customer Time Spent in Selected Forms of Electronic Communication Consumers daily total use is 5.25 hours! Multitasking plays a role. No one form dominates. Sources: (1) “Multitasking Drives Consumer Consumption of Media”, Yankee Group, Jan 26, 2007, Exhibit 1 "Average Media Consumption (Hours per workday) in the United States… " (excerpts) (2) Households in US, 2005 - www.census.gov/population/socdemo/hh-fam/hh1.xls (shows 113M HH in 2006) (3) “The VoIP Evolution Continues: Forecasting Broadband VoIP and Cable Telephony”, Yankee Group, Aug 2006, Exhibit 3 shows 8.5M VoIP HHs (4) “Worldwide Email Usage 2005-2009 Forecast”, IDC, Dec 2005, Table 15 North American and Worldwide Average Daily Person to Person Email Messages Sent – shows 11.97 person to person emails sent. (5) “Daily Internet Activities”, www.pewinternet.org/trends/Daily_Internet_Activities_1.11.07.htm shows 93M Adults use the Internet on any given day.
  • Verizon’s Broadband Strategy Includes . . .
    • Fiber-to-the-premises (FTTP)
      • Next generation network technology
      • 9 million homes passed by end of 2007
      • 5/2 Mbps; 15/2 Mbps; 30/5 Mbps; 50/5 Mbps (in some markets) – Advancing now to GPON and potentially 100s of megabytes to homes
    • DSL
      • Continue to deploy as ubiquitous data network
      • Speeds of 768 kbps and 3 megabytes available
      • Deployed to over 80 percent of all our customers
    • Wireless
      • 3G deployed today
      • 255 million Americans (5/6s) can access today
      • Up to 700 kbps on average available
      • EVDO Rev A now being deployed in dozens of cities with upload speeds in particular several times higher than current EVDO
      • Moving toward 4G - other wireless technologies (WiMax) in trials
  • Verizon FiOS Strategy
    • FiOS – began in 2005 – an all-digital fibre-optic network that extends to the customers’ premises (FTTH / FTTP)
      • FiOS TV – now offered in 400 cities to over 3.5 million customers
      • “ Triple play” – also supports voice and high-speed Internet at up to 100/10 Mbps in more than 1,600 cities in 16 states
      • More capacity for digital & HDTV, and unparalleled IP bandwidth for on-demand & niche programming
      • Unprecedented interactivity to support new business opportunities in voice, data, video, conferencing, etc.
    FTTH/FTTP Update – April 1, 2007
    • 2Q’07 Deployment Status:
    • Over 7 M premises passed
    • 1 M FiOS high speed customers
    • 350,000 plus FiOS TV customers
    • Nearly 1 million TV customers in total (satellite/FiOS)
    • 2007 Deployment Objectives:
    • Pass 9M premises passed
    • 2010 Deployment Objectives
    • Pass 18M premises by 2010
    What is Verizon Doing? Page Verizon CapEx spending on FiOS will total of $23 billion by 2010
  • Percent of Residents with No Choice in Internet Service Source: Pew Internet and Society Project
  • Connect Kentucky – the Model
    • Private-public partnership managed by a non-profit organization
      • Trust, reliance on private sector wherever possible
    • Focus on BOTH supply and demand – build it and they will come not enough
    • Must find out where the “holes” are where broadband is not – mapping
      • Work with companies to get data – strong non-disclosure agreement and non-profit not subject to FOIA
      • Develop effective GIS mapping system
    • Continuously report progress to political leaders
    • Create eCommunity leadership teams
      • Teams consist of local members from nine different groups (listed in next slide)
      • Conduct economic and business analysis
    • Promote deployment – focused on private players first
      • Aggregated demand and market analysis developed through eCommunity work
      • Private players may decline and if so, other options – including RUS loans working with local governments – are used
  • Connect Kentucky - Mapping
  • The Connect Kentucky Model Works Kentucky went from among the bottom states on deployment to one of the top five Kentucky will be at 100% deployment by year’s end Kentucky has reached 42% penetration of broadband
  • Connect Kentucky Model Produces Results
    • U. S. model – platform competition, remove constraints on investment – has worked and is working
    • Mapping is important but it alone does not produce results
      • In fact it can be harmful if not linked to effective programs focused on encouraging deployment and use
    • Non-profit led, private-public partnership is results focused
      • Community based with objective to “fill the holes”
    • Data comes in many formats – gathering it and effectively teasing out key conclusions is not easy
      • GIS systems are almost rocket science
    • Focusing on the demand/uptake side of the equation is critical too
    • Connect Kentucky results speak for themselves