connecting all americans
TRANSCRIPT
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Connecting All Americans Link Hoewing
VP, Internet and Technology PolicyJuly 15, 2007
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Broadband Penetration Rankings – By Household
EU25: 39% Internet, 23% Broadband
US50: 70% Internet, 42% BroadbandSource: 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 StatesTop 3 US States
Page Page 22
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Platform Competition – Lacking in Europe
Country Total
country DSL lines
Cable Internet broadband
connections (total)
Total Other BB infrast. (FttH, Sat., WLL, other)
Belgium 1,351,482 630,000 0
France 10,219,301 600,000 0
Germany 11,305,352 284,250 76,600
Italy 7,038,612 0 343,000
Netherlands 2,727,121 1,550,000 63,000
UK 8,173,113 2,870,354 8,500
Europe Total / Average 40,757,959 5,934,604 491,100
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.
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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
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Broadband penetration in the U.S., 2000-2007
Home Broadband & Dial-Up Penetration (% of adult Americans)
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Broadband Dial Up
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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
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Customer Time Spent in Selected Forms of Electronic Communication
33%
16%
9%
9% 2%
31%
Traditional Phone Talk
Cell Phone Talk
Using IM on PC
Sending Email
Texting on Cell Phone
VoIP Cable or B'band
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.
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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
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Verizon FiOS Strategy
FTTH/FTTP Update – April 1, 2007
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.
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 Page 99
Verizon CapEx spending on FiOS will total of $23 billion by
2010
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Percent of Residents with No Choice inInternet Service
0%
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Suburban
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Source: Pew Internet and Society Project
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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
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Connect Kentucky - Mapping
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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
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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