Re: Next Level(sym:NXTV) VDSL Trials and Plans- US West
Thread- If you click on post #6000 above, you'll find and article about VDSL television delivery being a, "here and now," technology for US West. The article below also references a test done by GTE which I happen to know was actually working. A year ago, I didn't think VDSL was possible. Now I'm changing my mind. Apparently NXTV with a market cap of $11 billion has a lot of investors convinced it's for real.
I pasted the article below because it's nice overview related to a subject that Nevin just brought up. How are the RBOCs going to fit into the new data world.
Has anyone wondered if Qwest can become a network television studio? If VDSL works, then they have a lot of local customers, have the backbone. Maybe they will buy a content company and deliver entertainment. They could even use all those datacenters, they recently announced building, to hold the content.
I guess it's a lot like AOL/Time Warner, but on the twisted copper side. I guess AT&T could do the same thing come to think of it. And everyone has speculated they will. But few speculate any incumbent LECs to do something similar. Wonder when that will start to happen? -MikeM(From Florida)
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Next Level's VDSL service to battle cable TV
By Jessica Hall
NEW YORK, March 20- Next Level Communications Inc. plans to transform simple, copper telephone wires into a powerful weapon to arm telephone companies in their battle against cable television operators.
Rohnert, Calif.-based Next Level's VDSL (very high-speed digital subscriber line) equipment turns traditional telephone lines into high-speed pipes able to transmit television, data and voice services.
The VDSL technology, which remains unproven on a broad scale, would allow the Baby Bell local telephone companies to offer packages of voice and entertainment services and to directly battle the cable television operators.
AT&T Corp., which will become the No. 1 U.S. cable television company through its purchase of MediaOne Group Inc, plans to offer local telephone and entertainment services over cable television wires.
AT&T's move will force the Baby Bells to fight back and expand their product portfolio to include video and entertainment services in order to preserve their customers and find new areas of growth, analysts said.
"We think the economics of staying in the voice business are not going to justify the market caps of these RBOCs (regional Bell operating companies). The AT&T factor is going to cause them to want to do it (VDSL services)," Next Level Chief Executive Pete Keeler said in an interview.
"If the (local telephone companies) are to truly compete with cable companies in the consumer market, it is imperative that they integrate voice, high-speed Internet access and video at a reasonable price point," research firm Dataquest said in a recent report.
"The real full-featured capability ultimately lies in VDSL, which still has some technological bumps to get past," the Dataquest report said.
Next Level supplies VDSL equipment to local telephone company U S West Inc, which provides the service in Phoenix and aims to expand VDSL to about 10 additional markets.
U S West's VDSL expansion plans, however, remain on hold temporarily. U S West's merger partner Qwest Communications International Inc said investment for the VDSL expansion must wait until their $40 billion merger closes, which is expected in the third quarter.
Qwest and U S West also have been in talks to acquire a minority stake in Next Level, sources familiar with the situation previously told Reuters.
Buying a small stake in Next Level would allow Qwest and U S West to benefit from the growth in the technology and to guarantee priority service in getting VDSL equipment, sources said. The three companies declined to comment.
Next Level, which had $57.6 million in 1999 revenues, would see a substantial boost in sales if the combined Qwest-U S West moved forward with the VDSL expansion, analysts said.
U S West already is the largest of Next Level's 29 customers, comprising about 75 percent of its busine
France Telecom, meanwhile, is testing Next Level's equipment in its labs, while Bell Canada International Inc. recently launched a field trial. Next Level also sees strong customer potential in the Asia-Pacific region.
GTE Corp., which plans to merge with No. 2 U.S. local telephone company Bell Atlantic Corp., has been using Next Level's equipment in a trial in Clearwater, Fla., Next Level said.
"We're hopeful that when the merger ends, that GTE and Bell Atlantic will want to be a video provider in some market areas. GTE was quite active in those areas," Keeler said.
"Three years from now, we think that most of the market areas in the United States will have competition by a twisted pair (telephone wire) offering full services," Keeler said.
The VDSL market, however, remains immature and the success of the technology depends on the local telephone companies expanding the reach of fiber optic networks closer to consumers' homes.
The Baby Bells must also see realize a payoff for their costly fiber upgrades. The local telephone companies would have incentives to upgrade their networks in markets threatened by cable competition, but rural markets likely will remain unserved by VDSL, analysts said.
Next Level, which is majority-owned by Motorola Inc, currently leads the emerging VDSL market but faces competition from other equipment makers such as France's Alcatel and Texas Instruments Inc, which recently announced VDSL products, analysts said.
In addition to VDSL, Next Level also is developing on privacy protection features for entertainment and marketing services and specialized optical networking services.
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