In the News

Published January 1, 2005

Average Consumer Telecom Cost: $159/month

U.S. consumers pay an average of $159 per month for telecommunications service when wireline, wireless, cable TV, and Internet services are factored together, according to research firm TNS Telecoms, according to a report in the Chicago Tribune, December 12, 2004.

TNS studied 32,000 bills from households nationwide.

The study provides critical baseline data for what consumers pay for basic and premium communications services in the current environment, where rules often regulate services differently or require service providers to sell them separately. Because these costs are often spread over a number of providers, it is often difficult for regulators to get a handle on what consumers pay for telecommunications services or an adequate measure of what constitutes economy or value.

In the same article, SBC Chairman Edward Whitacre says his company aims to provide an all-inclusive service bundle of wireless, video, high-speed Internet, and Internet-based voice calling for $100 a month. Such a bundle, which crosses a number of services regulated in different ways, would be difficult under current rules. Using the TNS measure, as well as other studies that might confirm it, SBC and other service providers would be able to demonstrate considerable consumer benefit if they were given greater freedom to tie together services and technologies.

Number of Fiber-Connected Homes Doubled in 2004

The number of homes in the United States connected to fiber-to-the-premises (FTTP) networks more than doubled in 2004, and the number of homes passed by such networks grew more than fourfold, according to a new study published by Render Vanderslice and Associates and cited by TelephonyOnline, November 30, 2004.

Homes passed were projected to reach 970,000 by the end of the year, up from 189,000 in October 2003. Connected homes were projected to grow to 146,500 from 64,700.

Render Vanderslice further predicts connected homes will grow more than 400 percent in 2005.

The news comes as regulators clarify the landscape for commercial broadband platforms. The Federal Communications Commission (FCC) has exempted new fiber optic networks from line-sharing requirements it placed on copper access lines. Incumbent telephone companies now can make a business case for integrated broadband services thanks to new high-end consumer video and entertainment services that will use the massive 100 Mb/s FTTP provides. SBC, for example, has committed to a $4 billion FTTP rollout and hopes to serve more than 18 million customers by 2007.

IBM Sells PC Business to China’s Lenovo

In a deal that marks the end of one era and the potential beginning of another, IBM has sold its personal computer business to Lenovo, a Chinese manufacturer of high-tech products.

The agreement marks IBM’s exit from an industry it pioneered in 1981, but one where product value came to be derived from software, not hardware. Desktop PCs have long since been a commodity, with the market dominated by Dell and Hewlett-Packard. IBM has since re-oriented its business toward the corporate server and computer services business, where it remains a leader.

Lenovo, meanwhile, represents a coming out of sorts for China’s high-tech industry, which has been following the same curve of Asian neighbors Japan, South Korea, and Taiwan. Lenovo and other Chinese manufacturers, including Huawei Technologies, little-regarded six to seven years ago, have emerged in recent years as world-class players in telecom and IT manufacturing.

Pennsylvania Restricts Muni Networks

Pennsylvania municipalities will be prohibited from funding competitive broadband networks under a new law signed by Gov. Edward Rendell in late November. The law passed with strong support from commercial wireline, wireless, and cable carriers who feared municipalities–who often control local taxes, licensing, and franchising rules–would be pressured to tilt the competitive climate in favor of municipal operations.

The law is similar to measures in a number of other states. Henceforth, Pennsylvania municipalities will have to show commercial carriers have failed to follow through on commitments to deploy broadband in underserved areas. Carriers will have 14 months to begin deployment before a city can proceed with its own build.

Compiled by Steven Titch ([email protected]), managing editor of IT&T News.