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Connecting All Americans Link Hoewing VP, Internet and Technology Policy July 15, 2007 PowerPoint PPT Presentation

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Connecting All Americans Link Hoewing VP, Internet and Technology Policy July 15, 2007. Broadband Penetration Rankings – By Household. Key Takeaways: US Internet & Broadband Adoption Significantly Higher than EU Overall Internet US 70% vs. EU 39% Broadband US 42% vs. EU 23%

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Connecting All Americans Link Hoewing VP, Internet and Technology Policy July 15, 2007

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Connecting All Americans

Link Hoewing

VP, Internet and Technology Policy

July 15, 2007

Broadband Penetration Rankings – By Household

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%).

US50: 70% Internet, 42% Broadband

Source: Pew Internet & American Life Project, “Home Broadband Adoption 2006”, May 28, 2006

EU25: 39% Internet, 23% Broadband

Source: European Commission, “E-Communications Household Survey”, July 2006

Top 3 US States

State Data Source: Render Vanderslice & Associates, September 2006

Bottom 3 US States

Page 2

Platform Competition – Lacking in Europe

European Competitive Telecom Association (ECTA), ‘Scorecard’ 1st quarter 2006.

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.

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

Mobile carriers have introduced new services and networks:

EVDO (700 kbps average speed) available to 255 million Americans

Carriers are improving the high-speed options available to customers:

Verizon FiOS 50 Mbps

Cablevision 16 Mbps

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 - (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”, 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

Verizon CapEx spending on FiOS will total of $23 billion by 2010

  • 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 9

FTTH/FTTP Update – April 1, 2007

Percent of Residents with No Choice inInternet 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 has reached 42% penetration of broadband

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

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

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