After attending VON last week, I was unable to go to the CTIA show happening this week at the Moscone Center in San Francisco, but some of my colleagues attending have given me the latest scoop of some of the major developments and announcements at the event.  Among the major developments at the show were:

Intel (Nasdaq:INTC) announced today at the CTIA show that it will make a "significant" investment with Clearwire, a wireless broadband startup funded by Craig McCaw.  The partnership is geared towards accelerating the development and deployment of WiMax networks.  The agreement stipulates that both companies will be actively engaged working collaboratively to develop WiMax products and deploy WiMax networks as the technology matures.  The Intel VC arm (Intel Capital) did not disclose any specific financial terms of the deal. 

Clearwire already offers WiMax service in Jacksonville, FL and St. Cloud, MN.  The company is planning to offer services based on the emerging 802.16e IEEE standard (an extension of the original 802.16 WiMax standard that addresses the mobility aspect).  The plan is for NextNet Wireless (a Clearwire subsidiary) to use the newly unveiled Rosedale Intel chip in new WiMax gear.  The deal will be a catalyst for the fixed wireless broadband industry, and Intel believes that next-gen products supporting mobility and using its chips should be widely available by 2006.

The last few days have kept me quite busy at VON.  It has been the most attended VON event that I have ever been at, and there has been some electricity in the air (perhaps due to the rosier prospects of VoIP or maybe because the Red Sox have come back in dramatic fashion on a couple of occasions to force a deciding game 7 today against the Yankees).

Due to the great attendance at the show, the enterprise panel session in which I participated had a big audience.  This was a bit of a pleasant surprise to yours truly, given the fact that concurrently, Anoop Gupta, the VP of the RTC (Real Time Collaboration) Business Group at Microsoft was delivering his keynote speech (I heard that in Anoop's session, there was standing room only, and that auditorium was much bigger than the room in which the analyst round table discussion was held). 

As suspected, Microsoft (Nasdaq:MSFT) unveiled its unified desktop client, dubbed Istanbul.  I was able to get the details from Ellen Muraskin, who wrote an article in eWeek about that session.  Istanbul, which runs in concert with the new version of the LCS (Live Communications Server), is a client application offering integrated IM, desktop videoconferencing, and IP telephony capabilities.  The product is currently undergoing beta testing and should become generally available in the first semester of 2005.

The key question is: does this mean that Microsoft will finally make a foray into the IP PBX marketplace?  I suspect that the answer to that question is no, at least not in the short term future.  However, in the longer term future, anything is possible, particularly if the traditional PBX/IP PBX model, as we know it today, goes through some changes (particularly for small and medium enterprises - SMEs).  The crown jewel of the PBX is the call processing software: that is the highest margin piece of the product. 

It is conceivable that in the future, some vendors might adopt a software-based model for SME products, and offer platform vendor independence (i.e. standard hardware/servers from vendors such as Dell, IBM, HP, etc.).  In that case, instead of the single, monolithic PBX, we would have call processing functions plus some standards-based hardware.  With this Istanbul move, Microsoft definitely makes a push into trying to control some of these functions.  However, from there to developing a full blown IP PBX, there is a lot of room.  It is more likely that Microsoft will initially want to become a technology enabler for some of these services.  As Gupta said: "We need a sophisticated ecosystem surrounding this. We don't build PBXes".

Much has been already written about the FCC decision on fiber and the impact it will have on the consumer broadband choices. Since I am in Boston for the Fall VON Show, here is a take on the subject by Hiawatha Bray from the Boston Globe.

But I also enjoyed Om Malik's opinions on the topic and its implications.  In one entry, Om states his disbelief that alternative technologies such as BPL or WiMAX can provide the competition necessary to make the duopolistic equilibrium price (i.e. the current set price of MSOs and RBOCs) lower - au contraire, the consumer bills will sky rocket.  In another story, Om focuses about how RBOCs like SBC will proceed with their plans: FTTH (FTTP) in some situations such as greenfields, and mostly, FTTC with ADSL 2+ or VDSL. 

I will zero in on the technical considerations of going with a FTTC with ADSL2+/VDSL solution. As the figure below shows, there is a tradeoff between the loop range and the throughputs (upstream/downstream): the longer the range, the lower the data speeds.  Distance matters for digital service lines, because they represent a "dedicated line configuration".

The implications can be arrived at from loop length analysis (data is available from several sources including DSL Prime, Telcordia, the NCTA, etc.).  Verizon, for instance, has about 50% of its loops in the 11,000 feet and longer range.  SBC has roughly over 50% of its loops in the 11k feet and higher range.  Bell South has about 45 percent in the 11k feet and more and the same is true for Qwest.  So what can be done with that?  One option is another location, sometimes co-located with the DLC.  This is in the Service Area Interface (SAI) or a cross-connect cabinet.  Hence, the rollouts that are being talked about the RBOCs are either FTTH (in a few cases only, for new greenfields, particularly after the FCC ruling) or bringing fiber to the above "neighborhood nodes" instead of to the curb.  Also, FTTC with ADSL 2+/VDSL will be used for the shorter distance loop lengths.

Since Avaya, Proxim and Motorola announced the initial results of their research on seamless roaming between 802.11 (WLAN) and 2.5/3G cellular networks earlier this summer, there have been a flurry of announcements of plans to converge cellular and Wi-Fi networks. Case in point: yesterday, Chris Rice, the CTO of SBC (NYSE:SBC), claimed that the carrier's public Wi-Fi hotspots will be used to carry calls from Cingular users by 2006.  The new modus operandi will be for phones to become aware when a WLAN Access Point (AP) is nearby and automatically handoff the call to the Wi-Fi network (what I call the ABC - Always Best Connected - model) 

Rice said that SBC can improve Cingular's cellular coverage by filling in the gaps, relying on Wi-Fi hotspots in places like restaurants, hotel lobbies, coffee houses, etc. to mitigate some of the spectrum demands on the wireless operator.  Achieving this goal might be a challenge from a timeline perspective, as there are quite a few details that still need to be worked out.  For instance the systems that can support the 3G/WLAN seamless roaming entail special client equipment, only working with APs supporting newer technology (e.g. 802.11e, which is the QoS standard that also enables longer battery life, due to the "deep sleep feature").  What about all the older APs that have already been deployed?  Nevertheless, it was interesting to see SBC give a sneak preview about its future Wi-Fi/wireless strategy.

Motorola (NYSE:MOT) has teamed up with Master Card to develop mobile handsets that are able to perform secure financial transactions.  The phones are being equipped with PayPass, a contactless payment service developed by Master Card and VivoTech.  Master Card is seeking for customers having many low-value transactions that are mainly cash based.  McDonald's, for instance, is one of the restaurants that announced it will accept the transaction system by the end of the year (i.e. in Dallas and NYC, with more cities to be added in 2005).  Master Card is also teaming up with other cellular phone manufacturers such as Nokia (NYSE:NOK) on tests of Pay Pass capable phones in Dallas, TX.

Ellen Muraskin has a pretty thought-provoking article in her latest eWeek column.  The key question is: will Microsoft be making an entry in the enterprise IP Telephony space with SIP and the newest release of its Live Communication Server (LCS 2005, code-named Vienna)? 

Ellen mentions a piece by Mary Jo Foley in Microsoft Watch (interesting to see more on Istanbul, a client that will be able to empower users to change content between text and voice).  So we have a client able to dynamically switch content, a SIP-based server, presence information... all the elements required to build a comprehensive enterprise SIP-based IP PBX.  Can this become a reality?  Maybe so this time around, although it may not be announced at the upcoming VON show.

Note: Just to throw some wood on the fire: Anoop Gupta, Corporate VP of the Real-Time Collaboration Business Unit at Microsoft is delivering a keynote on Tuesday at 11:15 AM.  Since I am participating at an analyst roundtable happening at the same time, I will not be able to attend Anoop's speech, but look forward to hearing feedback later on during the show. 

Mobile Tracker, a widely read blog about mobile communications, had a piece on MobiTV's newest partnership with AT&T Wireless (NYSE:AWE) to allow the latter to offer a $7.99 per month service that enables cellular subscribers to access TV content on their mobile handsets.  The Berkeley, CA based-company (financed by VCs such as Menlo, Redpoint, Gefinor and Sorrento) had previously signed a deal with Sprint PCS (NYSE:FON).  The channel lineup includes quite a few stations.  The AT&T Wireless service is available for either the Nokia 6620 or the Motorola V600.  The article also links to a critique from Russell Beattie, who described his experience on a Nokia 6620.

This past week, WiMAX proponents were bolstered by a couple of announcements: one from AT&T (NYSE:T) and another one from Covad (OTC BB: COVD.OB).  Both companies made their announcements at Web 2.0 Conference that took place in San Francisco last week (Ed. note: Om Malik had a few interesting postings in his blog about the conference).

Ben Charny had an interesting article on the WiMAX announcements on CNET news.  It was not surprising to hear that IXCs such as AT&T or xSPs such as Covad exploring WiMAX as a potential alternative to FTTH/FTTC in offering VoIP and broadband access bundles to consumers.  The end of UNE rules in June has forced IXCs, CLECs and xSPs to make sweeping changes in their strategies and focus on wholesale, enterprise and perhaps some innovation, as weapons to stay competitive against the RBOCs.  Not only that, WiMAX has the promise of cheaper costs ($75 versus $1,500 or more per dwelling).  As mentioned in a few posts here, there are quite a few issues left to be solved for WiMAX, but there is potential for a broadband wireless solution to still emerge as a viable alternative. 

Not only that, but the RBOCs' FTTH exercise will take quite sometime, and within a much shorter time window (i.e. 2-4 years), the prospects of  WiMAX (or even a proprietary broadband wireless scheme) will look a lot brighter.  It might require a bit of creativity, but it is something that could be done.  It will be for instance, interesting to see some electric utility act as a landlord and lease some of its feeder network to act as a backhaul access to a WiMAX network operated by a player such as Covad.  The future will tell whether such partnerships could eventually become a reality.

Note: Mark Goldberg (who authors Occam's Razor, my favorite Euro VC/strategy blog) had a good compilation of WiMAX articles in a previous post in his blog.

David Isen posted in his blog the the VON Magazine article he wrote about Japan, which I highly recommend.  I will not rehash his themes and closer examination of what Japan is doing right to lead the way in the delivering broadband services to the consumer market. 

Instead, I will talk about how some of Japan's neighbors are tackling the best way to deliver FTTP (Fiber To The Premise) to their countries.  Without a doubt, Japan is the leader in broadband in the Asia Pacific (APAC) region, with over 1.5 million FTTH customers currently getting the service.  After getting burned with ISDN, NTT made a slower foray into FTTH, but seems to be picking up speed in delivering the service (competing with the pioneer Usen Broad Networks) and establishing a goal of 2 million FTTH subs by 2005.

But what about the other countries?  Australia also seems to be getting quite serious about FTTH.  One of the first companies to deliver optic fiber in Australia was Bright Telecommunications, offering service to about 200k homes in Perth.  The company has several packages, including video, high speed Internet and voice services bundles.  Telstra is working on an FTTH trial at Brookwater Estate, Greater Springfield, a new housing estate on the outskirts of Brisbane.  Bundling will also be centered on voice, video and broadband access, with a caveat: Telstra will be tuning down the throughput to match that of existing cable and ADSL services.  In Canberra, TransACT Communications will be offering broadband at 36 Mbit/s downstream and 1.6 Mbit/s upstream, relying on FTTC (Fiber To The Curb) and ADSL 2+.

In China, China Telecom (the country's largest broadband Internet provider) plans to try out FTTH services in the future, but for now will primarily rely on DSL to provide broadband access to its customers. Despite that, with the 2008 Olympic Games looming on the horizon, many telecom service providers in Beijing have prepared study plans to further develop the region's infrastructure.  Beijing's metro fiber optical network is projected to connect to other cities and connect contest and non-contest venues.  China Telecom has been quite active, and recently bought some optical infrastructure from Nortel (NYSE:NT).  As well, China Netcom is rolling out a wireless broadband solution using the 3.5 GHz spectrum, relying on Alvarion's WalkAir 1000 platform.

Finally, Korea has already deployed more than 50,000 km of fiber.  Korea Telecom (KT) is rolling out a FTTH pilot service in Kwangju, a southwestern city in Korea, for 100 subscribers.  The aggressive target set was to deliver between 50 to 100 Mbps of bandwidth to about three quarters of the total households by the end of 2010.

Another VC blog that I am a big fan of is Jeff Nolan's (I also happen to like his sense of humor - on the title Jeff has "In the tradition of Dan Rather... Fake, but Accurate!").   

Jeff has a couple of great posts on the Vortex 2004 Conference that he attended.  It was an event that provided great insights into the future of the enterprise and the IT industry.  He posted some very interesting Q&A sessions, including one with Mike Volpi, SVP, Routing Technology for Cisco and previously Cisco's M&A czar.  Read it all here in Jeff's post.  On the exchange, I found the following replies quite interesting:

Keep in mind the disclaimer that Jeff had in his blog (comments were paraphrased and not made "ad literem").  But there are a lot more interesting speeches - Geoffrey Moore, Jonathan Schwartz, Shane Robison, among others.

CNET author Ben Charny had a story on how Cox is rolling out VoIP services across several locations in the U.S., including Oklahoma (Tulsa), Louisiana (Lafayette and Baton Rouge) and Texas (Midland).  The U.S. MSOs are much further ahead than their Canadian counterparts in deploying these services (there are other examples, such as Comcast, which is relying on Cisco gear and Time Warner and Charter, which bought into Sprint's Wholesale VoIP solution, which uses the Nortel gear).

What is the price of Cox's bundle?  $100 a month for voice, video and data.  In the meantime, over here in Canada, Rogers is planning to introduce VoIP services in the first half of next year (there are some indications that the company will use Cisco's gear).  Perhaps the slower deployment of IP by the Canadian MSOs can be partly attributed to the still uncertain regulatory picture.  Despite that, some Canadian MSOs like Rogers have a trump card they can play, namely wireless as a the fourth component of the bundle.

IP World Canada is a Canadian telecom show focused on IP that is going full steam ahead this week in Toronto.  Regretfully, due to a last-minute contingency, I was unable to be there this morning to attend a great tutorial about SIP by Henry Sinnreich (the father of SIP and Distinguished Member of Engineering from MCI), but I will be there tomorrow to catch Mr. Sinnreich and others present various interesting sessions.

Jake Gordon, the conference organizer, has assembled a great lineup of telecom executives (truly a who's-who list of the telecom world in Canada), including the likes of Michael Sabia (President and CEO of Bell Canada), Joe Natale (EVP and President, Client Solutions at Telus), John MacDonald (Allstream President), Don Smith (CEO of Mitel), Isabelle Courville (President, Enterprise Market for Bell Canada), Frank Panza (Director, IP-One Marketing), Phil Edholm (CTO and VP of Network Architecture for Enterprise Networks at Nortel), and Ibrahim Gedeon (CTO Telus Communications), among others.  These and many other speakers will be able to give a good pulse of the true adoption of VoIP thus far in Canada.

The agenda includes several tracks, including technology solutions, enterprise/SMB solutions and customer case studies.  The show definitely looks promising and is generating a lot of attention.  I am therefore pleased to have been invited to speak in a couple of sessions (one is an analyst roundtable discussion on the current state of the industry, and the second one is a longer session on the evolution from TDM to IP PBXs).

NTT DoCoMo and Fujitsu Laboratories have teamed up to develop a prototype micro fuel cell for 3G FOMA phones.  [Ed. note: FOMA is the name of DoCoMo's proprietary 3G network in Japan]  The logic behind the move is to cater to the power demand by heavy-duty 3G cell phone users.  But even normal users will also benefit, given the increasing power consumption of cell phones (which can be also used to play games, store information such as photos, play different music ring tones depending on the caller ID, etc.). 

The greater power capacity is due to the micro fuel cell, which is able to store 10 times as much power per unit weight as a conventional lithium-ion battery.  The fuel cell generates electric power through a chemical reaction by mixing hydrogen and methanol.  CNET reported that Fujitsu was able to increase the methanol concentration in the fuel cell by developing a better membrane.  The prototype unit measures 152mm x 57mm x 16mm and weighs 190g. 

The charging device is shaped like a normal cradle used to recharge handsets, and it meets all the specs of other FOMA mobile phone rechargers besides being compatible with all FOMA handsets as well.  Both companies anticipate that the prototype will be further refined, with development being completed by the end of 2005.  The key question is when the prototype will become commercially available - thus far, the jury is still out on some of these fuel cell initiatives in terms of products actually launched in the marketplace.

Note: TechTree (an interesting Technology Daily from India, which I enjoy reading) also mentions that Fujitsu apparently has another prototype power unit that incorporates the technology.  Perhaps this work can be extended to other devices, such as PDAs and laptops.  A 300 ml. methanol solution can hypothetically charge a notebook for close to 10 hours.

Israeli WiMAX vendor Alvarion (Nasdaq:ALVR)announced earlier this week that it had signed a deal with French operator Altitude Telecom to deploy an advanced wireless broadband network across France.  Altitude will rely on Alvarion's BreezeMAX solution to roll out broadband wireless VoIP services to SMEs in addition to large businesses.  The French service provider is deploying Alvarion's solution to build a nationwide network using their 3.5GHz spectrum, to complement and upgrade its existing 26 GHz wireless telecommunications infrastructure.

This is certainly good news for folks in the WiMAX camp, although the spectrum is still an issue to be considered for a wider uptake.  Case in point: Altitude is the only current operator with a license to operate in the 3.5GHz throughout France.  Globes (an Israeli business e-daily) reports that the BreezeMAX network will be rolled out in four counties (initially in the Loire Valley, with plans for additional counties within a year).