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Management Report
Published: February 2009
Pages: 216
Tables: 116
From: GBP 621.88   Buy Now!
Research from: Paul Budde Communication Pty Ltd.
Sector: Broadband & Fixed

For those seeking high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

· Forecast growth in select telecommunication markets.

· The emerging trends and convergence in the USA voice, broadband and digital TV sectors.

· How the USA is faring in terms of global broadband development.

· The current and emerging broadband technologies and their long-term projections.

· The growth of wireless voice and data and the deployment of 3G and 4G technologies.

· Key information on the major telecommunication operators.



Researcher:- Lawrence Baker

Current publication date: February 2009

Next publication date: February 2010

EXECUTIVE SUMMARY

BuddeComm’s annual publication, USA Telecoms, Wireless, Broadband and Forecasts, profiles the fixed-line, wireless (mobile) and broadband markets in the USA. The publication also examines the convergence of these technologies with each other and with digital media such as digital TV and the emergence of new telecommunication services such as VoIP and IPTV.

The cable companies continued to be the beneficiaries of the telcos’ wireline losses, with cable VoIP subscriber numbers expected to continue growing strongly in 2009. In addition, cable companies retained the lead in broadband market share, as cable modem subscriber growth exceeded DSL subscriber growth in 2008, reversing the trend of recent years. This was partly explained by the fact that the telcos were concentrating on their FttH network deployments.

In the wireless market, the WiMAX and LTE open access 4G platforms, to which Sprint-Clearwire and Verizon Wireless respectively have committed; both offer significant scope for increased convergence among services and devices.

The country’s telecommunications industry had yet to feel the full effect of the economic downturn, with total industry revenues growing at approximately 10% during 2008. Now faced with a deepening recession, in January 2009 the new Obama administration put to Congress the American Recovery and Reinvestment Bill which designates $6 billion for wireless and broadband in underserved areas and a further $11 billion assistance for the development of smart grids.

This report contains overviews, analyses and detailed statistics of the US fixed-line, wireless and broadband markets including their sub-markets such as DSL, cable, FttH, wireless broadband, utilities broadband, the Internet, VoIP and IPTV.

Key highlights:
• Total revenue for the telecommunications industry grew by around 10% in 2008 to reach over $1.1 trillion. Growth in 2009 will continue to be underpinned by broadband uptake and wireless data revenues.
• During 2009 the number of traditional fixed-line customers will continue to fall, following a nearly 10% decline in 2008. Conversely, VoIP will continue to post strong gains.
• The FttH network deployment will continue to gather pace in 2009, allowing Verizon and AT&T to become notable competitors in the TV market. IPTV subscriber numbers will maintain strong growth, having reached nearly 2 million for Verizon FiOS TV and 1 million for AT&T U-Verse TV by late 2008.
• Broadband continues its strong growth, achieving a penetration of nearly 25% in 2008, although the US still has only the 15th highest penetration rate in the OECD, down from 4th place in 2001. The total number of broadband subscribers is expected to continue to grow solidly over the next five years, although at a declining growth rate as household penetration approaches saturation. DSL is expected to return to higher growth rates as a deepening recession makes the price competitive offering of DSL more attractive.
• WiFi had become commonplace in the USA during 2007, with a burgeoning hotspot network and WiFi moving beyond the laptop to cellular handsets. The significance of the WiFi market was highlighted in 2008 with the purchase by AT&T of WiFi hotspot operator Wayport for $275 million, giving AT&T the largest number of WiFi hotspots in the country. For more information, see chapter 5.7.4, page 95.
• Wireless subscriber growth will slow during 2009 as penetration exceeds 90%. Despite declining subscriber growth rates, the significance of the wireless sector will continue to strengthen, with the percentage of wireless-only households having reached approximately 15% by early 2009. For more information, see chapter 8.1, page 153.
• In 2009 Verizon Wireless completed its acquisition of Alltel Corp, making Verizon Wireless the largest wireless operator in the country with over 30% market share and giving the top-three providers nearly 80% of the wireless market.
• During 2009 wireless revenues will continue to enjoy strong growth, following growth of nearly 50% in 2008, underpinned by robust wireless data revenue growth. By early 2009 wireless data revenues accounted for approximately 25% of total wireless service revenues, up from around 18% in 2007. Significantly, the majority of wireless data revenues are now being generated by non-messaging applications and services such as music downloads, mobile TV, video blogs and Internet-accessed entertainment services. For more information, see chapter 8.5, page 183.
• The deployment of 4G wireless technologies will gain significance in 2009, following the 2008 launch by Sprint Nextel and Clearwire of their WiMAX network and the announcement by Verizon Wireless that it will start deploying LTE from late 2009.
• The transition to digital TV gathered pace with mandatory analogue switch-off scheduled for February 2009. Nevertheless, in January 2009 President Obama requested Congress to postpone the switch-off date as substantial numbers of households had not reached digital TV readiness.
• While it was originally thought BPL would grow out of the need for broadband services in underserved rural and regional areas, in 2008 it became clear that the urgent need to address climate change through measures such as smart grids will be the main force for deploying BPL networks. In California alone it is estimated that approximately 17.5 million smart meters will be deployed between 2008 and 2010. For more information, see chapter 5.6, page 76.
• In the area of policy, President Obama has indicated his support for a net neutrality law and for stronger antitrust enforcement. He appointed a new FCC Chairman, Julius Genachowski, which gives the FCC a greater mandate to regulate in the interests of competition and the consumer. For more information, see chapter 2.1.2, page 4.

Forecast homes passed by fibre – 2009 - 2015
Year Non-RBOC1 Verizon AT&T2 Total
Homes passed
2009 4,000,000 15,000,000 18,000,000 37,000,000
2010 6,000,000 17,000,000 20,000,000 43,000,000
2011 8,000,000 19,000,000 24,000,000 51,000,000
2012 9,000,000 21,000,000 28,000,000 58,000,000
2013 10,000,000 22,000,000 34,000,000 66,000,000
2014 11,000,000 23,000,000 37,000,000 71,000,000
2015 12,000,000 24,000,000 40,000,000 76,000,000
(Source: BuddeComm forecasts)
Notes:
1Non-RBOC includes CLECs, ILECs, Municipalities and Qwest, although Qwest is formally an RBOC.
2Includes FttH and FttN.


Lawrence Baker
February 2009


Data in this report is the latest available at the time of preparation and may not be for the current year.
The following notes provide some background to our scenario forecasting methodology:
• This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
• The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
• All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.



For those seeking high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:
• Forecast growth in select telecommunication markets.
• The emerging trends and convergence in the USA voice, broadband and digital TV sectors.
• How the USA is faring in terms of global broadband development.
• The current and emerging broadband technologies and their long-term projections.
• The growth of wireless voice and data and the deployment of 3G and 4G technologies.
• Key information on the major telecommunication operators.

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Table of Contents

1. KEY STATISTICS 1
2. REGULATORY ENVIRONMENT 3
2.1 Analysis 3
2.1.1 Unbundling
2.1.1.1 Battle began in the late 1980s
2.1.1.2 Local Loop Unbundling (LLU) launched in 1996
2.1.1.3 Linesharing abandoned
2.1.2 Net neutrality
2.2 US regulatory environment 6
2.2.1 Overview
2.2.2 Regulatory authorities
2.2.3 Regulatory milestones – 1969 - 2008
2.2.4 Brief historical overview
2.3 The Telecommunications Act 1996 10
2.3.1 Overview
2.3.2 Key pro-competitive provisions of the Telecom Act
2.3.2.1 Interconnection and unbundling (sections 251 and 252)
2.3.2.2 Universal service (section 254)
2.3.2.3 InterLATA market entry (section 271)
2.3.2.4 Bell company structural separation (section 272)
2.3.2.5 Advanced service deployment (section 706)
2.3.3 Kay market participants
2.3.3.1 IXCs and CLECs
2.3.3.2 RBOCs
2.3.3.3 Cable companies
2.3.3.4 Other regulations/bodies
2.3.4 Impact of the Act
2.3.4.1 Court challenges to the Act
2.3.4.2 RBOCs offering interLATA long-distance
2.3.4.3 Universal service fund
2.4 Foreign competition 15
2.5 The FCC and satellite services 15
2.6 Merger and acquisition activity 16
2.7 Access and unbundling 17
2.7.1 Unbundling network access
2.7.2 RBOCs ordered to share Internet lines
2.7.3 FCC unbundled network triennial review order of 2003
2.7.4 Cable broadband and DSL confirmed as information services
2.8 Regulation of converging technologies 19
2.8.1 VoIP
2.8.1.1 Convergence and the new competitors
2.8.1.2 VoIP regulation
2.8.2 Video and TV
2.8.2.1 Franchise laws
2.8.2.2 TV white spaces
3. MAJOR TELCOS – STATISTICS & ANALYSIS 22
3.1 US telecom industry 22
3.1.1 RBOCs, ILECs, CLECs and IXCs
3.1.2 Cable MSOs, VoIP and other competition
3.1.3 Analysis – 2008/09
3.2 Major players 25
3.2.1 Overview
3.2.2 AT&T Inc
3.2.2.1 BellSouth Corporation (historical)
3.2.3 Verizon Communications
3.2.4 Qwest Communications
4. INTERNET MARKET 35
4.1 Analysis 35
4.2 Overview 35
4.3 Internet statistics 36
4.4 US broadband 37
4.4.1 Broadband development
4.4.2 Broadband connectivity
4.5 USA Internet usage 39
4.5.1 Internet usage patterns and demographics
4.5.2 Web surfing statistics
4.5.3 Online advertising and e-commerce
4.6 ISP market 44
4.7 Email 46
4.7.1 Spam, viruses & other malware
4.7.2 Anti spam legislation
4.8 Instant Messaging (IM) 50
5. BROADBAND MARKET 52
5.1 Key highlights 52
5.2 broadband market 52
5.2.1 Broadband market overview
5.2.2 Regulatory overview
5.2.3 Broadband statistics
5.2.4 Cable MSOs versus telcos
5.3 Cable broadband 60
5.3.1 Market overview
5.3.2 Cable broadband statistics
5.4 Digital Subscriber Line (DSL) 62
5.4.1 DSL overview
5.4.2 DSL statistics
5.5 Fibre-to-the-Home (FttH) 63
5.5.1 Overview
5.5.2 FttH network rollout
5.5.3 Policy and regulation framework
5.5.3.1 Federal policy
5.5.3.2 Network regulation
5.5.3.3 Video franchise rules
5.5.4 Choice of FttX technology
5.5.4.1 Why fibre?
5.5.4.2 FttN
5.5.4.3 FttC
5.5.4.4 FttH/FttP
5.5.4.5 Which FTTx?
5.5.5 Non-RBOC FttH networks
5.5.6 RBOC FttH roll-out
5.5.6.1 Verizon
5.5.6.2 AT&T
5.5.6.2.1 BellSouth (historical)
5.5.6.3 Qwest
5.6 Smart grids & BPL 76
5.6.1 Overview
5.6.1.1 Background
5.6.1.2 Smart grids
5.6.1.3 BPL
5.6.2 Smart grids
5.6.2.1 Introduction
5.6.2.2 Smart meters
5.6.2.3 GridWise
5.6.2.4 Smart grid developments
5.6.3 Broadband Powerline (BPL)
5.6.3.1 BPL technology
5.6.3.2 BPL opportunities
5.6.3.2.1 Smart meters and smart grids
5.6.3.2.2 Broadband and triple play
5.6.3.2.3 Home networking and consumer electronics
5.6.3.3 BPL deployment issues and obstacles
5.6.3.3.1 BPL technology hurdles
5.6.3.3.2 BPL competition issues
5.6.3.4 BPL regulations
5.6.3.4.1 FCC regulation
5.6.3.4.2 State-based regulations
5.6.3.5 BPL trials
5.6.3.6 BPL standard setting bodies
5.6.3.6.1 HomePlug Powerline Alliance
5.6.3.6.2 United Power Line Council (UPLC)
5.6.3.6.3 IEEE Standards Association
5.6.3.6.4 Universal Powerline Alliance
5.7 Wireless broadband 91
5.7.1 Overview
5.7.2 700MHz auction
5.7.3 Analysis – 2007 - 2008
5.7.4 WiFi
5.7.4.1 WiFi statistics
5.7.4.2 Major WiFi hotspot providers
5.7.4.3 Municipal WiFi
5.7.4.3.1 Overview
5.7.4.3.2 Muni WiFi analysis – 2007 - 2008
5.7.4.4 WiFi and cellular convergence
5.7.4.5 WiFi standards and certification
5.7.5 WiMAX
5.7.5.1 WiMAX market overview
5.7.5.2 WiMAX Forum
5.7.5.3 WiMAX and WiFi
5.7.5.4 WiMAX versus competing 3G and 4G technology
5.7.5.4.1 3G/HSDPA
5.7.5.4.2 Long-term evolution (LTE)
5.7.6 Satellite broadband
6. VOIP 109
6.1 Market overview 109
6.1.1 VoIP statistics
6.2 VoIP regulation 110
6.3 VoIP technology in the US 112
6.3.1 Overview
6.3.2 History
6.3.3 IP telephony gateways
6.3.4 Value-added features
6.3.5 Hosted VoIP solutions
6.3.6 Circuit-to-packet network migration
6.3.7 IP-based private networks and computer telephony integration
6.3.8 Mobile VoIP
6.4 Major VoIP providers 117
6.4.1 Cable VoIP
6.4.2 Alternative providers
6.4.3 Telco VoIP
7. CONVERGENCE 122
7.1 Market overview 122
7.1.1 Key developments
7.1.2 IP networks
7.1.3 Regulatory issues
7.2 Telco triple play 125
7.2.1 Triple play over fibre
7.2.2 Alliances with satellite TV
7.3 Cable triple play 127
7.3.1 Triple play over HFC
7.3.1.1 Cable TV
7.3.1.2 Cable broadband
7.3.1.3 Cable VoIP
7.4 Satellite over IP 129
7.5 Quadruple play 129
7.5.1 Verizon
7.5.2 AT&T
7.5.3 Sprint Nextel – cable initiatives
7.5.3.1 Pivot Joint Venture
7.5.3.2 Clearwire WiMAX
7.5.4 Qwest
7.6 Overview of the broadcasting market 132
7.6.1 Analysis
7.6.1.1 Satellite versus cable versus telco IPTV
7.6.1.2 High Definition TV (HDTV)
7.6.1.3 DVRs to impact US TV advertising market
7.7 Regulatory issues 136
7.7.1 Analogue switch-off
7.7.2 À la carte
7.8 Digital TV 139
7.8.1 IPTV
7.8.1.1 IPTV market overview
7.8.1.2 FttH/FttC/FttN networks
7.8.1.3 Verizon’s FiOS TV
7.8.1.4 AT&T’s U-Verse Video
7.8.1.5 Video-on-Demand (VoD)
7.8.2 Cable DTV
7.8.2.1 Overview
7.8.2.2 Cable statistics
7.8.3 Satellite Direct Broadcasting Service (DBS)
7.8.3.1 Overview
7.8.3.2 DISH Network
7.8.3.3 DirecTV
7.8.4 Digital Terrestrial TV (DTTV)
7.8.4.1 Overview
7.8.4.2 HD over-the-air
7.8.4.3 National FTA broadcasters
7.9 Consumer electronics 151
7.9.1 Digital TV sets and HDTVs
7.9.2 DVRs
8. WIRELESS COMMUNICATIONS 153
8.1 Market overview 153
8.1.1 Market analysis
8.1.2 Market consolidation
8.1.3 Market convergence
8.2 Wireless statistics 156
8.2.1 Market statistics
8.2.2 Wireless carrier statistics
8.2.3 ARPU statistics
8.3 Market trends 160
8.3.1 Mobile Virtual Network Operator (MVNO) market
8.3.2 Prepaid market
8.3.3 Third Generation mobile (3G)
8.3.4 WiMAX and VoIP versus 3G
8.3.5 WiFi and cellular convergence
8.3.6 Sprint/MSO joint venture
8.3.7 Key trends in 2009
8.4 Major wireless operators 168
8.4.1 AT&T Mobility (formerly Cingular Wireless)
8.4.2 Verizon Wireless
8.4.3 Sprint Nextel Corporation
8.4.4 T-Mobile USA
8.4.5 Alltel Corporation
8.4.6 US Cellular Corporation
8.5 Wireless Data 183
8.5.1 Mobile TV
8.5.2 Mobile music
8.5.3 Non-voice messaging
8.5.4 Mobile Internet
8.5.5 Wireless Local Number Portability (WLNP)
9. FORECASTS 187
9.1 Forecasts – Internet market to 2013 187
9.2 Forecasts – broadband subscribers to 2015 188
9.3 Forecasts – fibre networks to 2015 189
9.4 Forecasts – VoIP market to 2013 190
9.5 Forecasts – wireless market to 2013 191
10. GLOSSARY OF ABBREVIATIONS 193

For full details, please email keithw@cmsinfo.com

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