TFI: New Telecom Report - Transforming the Local Exchange Network: Fourth Edition

FOR IMMEDIATE RELEASE

PRESS CONTACT
Ms. Carrie Vanston,
Media Relations Director
(800) TEK-FUTR, (512) 258-8898
E-mail: cvanston@tfi.com

READER CONTACT
Ms. Helen Mary Marek,
Publications Sales
(800) TEK-FUTR, (512) 258-8898
E-mail: info@tfi.com

New Telecom Report by Technology Futures, Inc.

Transforming the Local Exchange Network: Fourth Edition

AUSTIN, TX, February 2009--Technology Futures, Inc. (TFI) forecasts continued modernization of the local exchange network with completion of all fiber, all packet networks by 2015-2020. This and other key findings are documented in the fourth edition of TFI's flagship publication Transforming the Local Exchange Network by Lawrence K. Vanston, Ph.D. and Ray L. Hodges. The report is sponsored by the Telecommunications Technology Forecasting Group, comprised of AT&T, Bell Canada, Qwest, and Verizon.

According to author Dr. Vanston, "The transition by local exchange carriers from a narrowband network of circuit switches and copper cables to a broadband network of packet switches and fiber optics is well underway. This transition will largely be complete for the U.S. industry between 2015 and 2020." (See Graph 1: "Deployment of VHS Broadband Fiber.")

Other Key Findings:

* Demand for very highspeed (VHS) broadband will accelerate. (VHS = 10 Mb/s and above.) By 2013, the majority of broadband households will subscribe to VHS broadband. By 2016, 50 Mb/s and 100 Mb/s service will serve the majority of broadband households. (See Graph 2. "U.S. Broadband Households by Nominal Data Rate.")

*Dramitic access line loss to wireless, cable telephony, and VoIP will continue, resulting in more stranded plant. (See Graph 3: "U.S. Narrowband Access Lines by Carrier Type.")

* Technology change and access line losses are accelerating the obsolescence and reducing the lives of telecommunications equipment.

For a table of contents and list of figures please see below or visit Transforming the Local Exchange Network

We would be pleased to have this report reviewed by your publication and/or be cited for articles examining the subject matter. We would also be glad to be interviewed and quoted for articles relating to the subject matter. For press information, please see our Press Room.

Lead-author Lawrence K. Vanston, Ph.D., is an internationally- recognized authority in the use of technology forecasting in the telecom industry. His research reports and forecasts are used and referenced extensively worldwide. His forecasting track-record is legend. The September 21, 1998 issue of "The Wall Street Journal" featured an in-depth interview entitled "Consultant's Call: Lawrence Vanston Makes Some Pretty Bold Predictions for the Future of Telecommunications. He Has Been Right Before." The predictions therein have come true as well.

Co-author Ray L. Hodges brings over 30 years of telecom expertise and experience to his work at TFI, including 25 years with GTE Telephone Operations. Mr. Hodges' views and the results of his research have been cited by such publications as "Telephony," "America's Network," "Lightwave," "Wired," "Inter@ctive Week," and "Wireless Systems Design."

For 30 years, TFI has helped organizations plan for the future by offering outstanding technology forecasting, strategic planning, trend analysis, and strategic market research services and publications in high-technology and telecom technologies. Drawing on proven, quantifiable forecasting methods and strategic applications, we combine the vision of the futurist with the down-to- earth judgment of the technologist. Let us be "Your Bridge to the Future."

PRESS CONTACT: Please contact Ms. Carrie Vanston at (800) TEK-FUTR, (512) 258-8898, or cvanston@tfi.com, with questions about the report and/or to arrange an interview with Dr. Vanston or Mr. Hodges. They and the TFI staff are also always happy to comment on technology forecasting principles and technology and telecom trends.

PURCHASING CONTACT FOR YOUR READERS: Report details and ordering information are available at Transforming the Local Exchange Network. Readers interested in purchasing a copy may also contact Helen Mary Marek, Technology Futures, Inc. at (800) TEK-FUTR or (512) 258-8898, fax (512) 258-0087, or send email to info@tfi.com. The report is $2,495.

Thank you for your attention.

# # #

February 2009
Technology Futures, Inc.
13740 Research Boulevard, Building C
Austin, TX 78750
(800) 835-3887 or (512) 258-8898
Fax: (512) 258-0087
www.tfi.com

New Telecom Report by Technology Futures, Inc.

Transforming the Local Exchange Network: Fourth Edition

Table of Contents:

Chapter 1: Introduction and Summary

Chapter 2: ILEC Access Line Losses

Chapter 3: Very-Highspeed-Broadband

Broadband Internet Access
Increasing Data Rates
Forecasts for IP Video
Online Video
Internet TV
IPTV

High-Definition Television
Chapter 4: Metallic Cable

Deployment of VHS Broadband Fiber
Metallic Feeder Cable
Metallic Distribution Cable
Metallic Distribution Cable, FTTP ILECs
Metallic Distribution Cable, FTTN ILECs
Metallic Distribution Cable, Industry Composite

Chapter 5: Non-Metallic Cable

Chapter 6: Circuit Equipment

Transport Circuit Equipment
Narrowband Circuit Equipment
Standard Broadband Circuit Equipment
VHS Broadband Equipment
Circuit Equipment Composite Lives
Chapter 7: Switching Equipment

Chapter 8: Conclusion

List of Figures and Featured Graph [back to top]

2.1 U. S. Narrowband Access Lines by Carrier Type

2.2 U. S. Wireline Access Line Displacement

2.3 U. S. Wireless Only Households

2.4 U. S. Adults in Wireless Only Households by Age Group

2.5 U. S, Cable Telephony Access Lines

2.6 U. S. Forecast ILEC Narrowband Access Lines and Broadband Connections

3.1 U. S. Broadband Households

3.2 U. S. Market Shares of DSL, Cable Modems and Fixed Wireless for Standard Broadband

3.3 U.S. Broadband Households by Nominal Data Rate

3.4 Trend in Residential Access Data Rates

3.5 Minimum Availability of 24 Mb/s and above Broadband (VHS Broadband)

3.6 U. S. Online Video Users and Internet TV Users

3.7 Comparison of Internet TV and 6Mb/s and Above Broadband Forecasts

3.8 U. S. HDTV Households

3.9 U. S. Internet HDTV Households

3.10 Comparison of Internet HDTV and 24Mb/s and Above Broadband Forecasts

4.1 Deployment of VHS Broadband Fiber

4.2 Comparison of Deployment of VHS Fiber and VHS Broadband Availability

4.3 Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Base Scenario)

4.4 Substitution of Metallic Feeder Cable by Fiber Feeder Cable (Base Scenario)

4.5 Percentage of Access Lines on Metallic Feeder Cable (Base Scenario)

4.6a Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Base Scenario) (Duplicate of Figure 4.3)

4.6b Metallic Feeder Cable Survivor Curves (Base Scenario)

4.7a Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Late Scenario)

4.7b Metallic Feeder Cable Survivor Curves (Late Scenario)

4.8a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTP ILECs (Base Scenario)

4.8b Survivor Curves for Metallic Distribution Cable - FTTP ILECs (Base Scenario)

4.9a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTP ILECs (Late Scenario)

4.9b Survivor Curves for Metallic Distribution Cable - FTTP ILECs (Late Scenario)

4.10 Scenarios for FTTN to FTTP Transition - FTTN ILECs

4.11 Comparison of FTTN to FTTP Transition Scenarios and VHS Broadband Fiber Deployment - FTTN ILECs

4.12a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Early Scenario)

4.12b Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Early Scenario)

4.13a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Middle Scenario)

4.13b Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Middle Scenario)

4.14a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Late Scenario)

4.14b Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Late Scenario)

4.15a Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber (Industry Composite)

4.15b Survivor Curves for Metallic Distribution Cable - ILECs (Industry Composite)

5.1 Age-Survivor Curve for Fiber Optic Cable

5.2a Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Early Scenario)

5.2b Survivor Curves for Standard Single-Mode Fiber Optic Cable (Early Scenario)

5.3a Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Middle Scenario)

5.3b Survivor Curves for Standard Single-Mode Fiber Optic Cable (Middle Scenario)

5.4a Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Late Scenario)

5.4b Survivor Curves for Standard Single-Mode Fiber Optic Cable (Late Scenario)

6.1 Surviving Value and Depreciation Lives for Transport Circuit Equipment

6.2 Survivor Curves for Narrowband Circuit Equipment (Base Scenario)

6.3 Survivor Curves for Narrowband Circuit Equipment (Late Scenario)

6.4a Standard Broadband Circuit Equipment (Base Scenario)

6.4b Survivor Curve for Standard Broadband Circuit Equipment (Base Scenario)

6.5a Standard Broadband Circuit Equipment (Late Scenario)

6.5b Survivor Curve for Standard Broadband Circuit Equipment (Late Scenario)

6.6a Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Base Scenario)

6.6b Composite Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Base Scenario)

6.7a Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Late Scenario)

6.7b Composite Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Late Scenario)

7.1 Voice and Data Traffic

7.2a Substitution of Packet Switching for Circuit Switching (Base Scenario)

7.2b Survivor Curves for Digital Circuit Switching (Base Scenario)

7.3a Substitution of Packet Switching for Circuit Switching (Late Scenario)

7.3b Survivor Curves for Digital Circuit Switching (Late Scenario)

7.4 Access Lines Converted to Packet Switching (Base Scenario)

7.5 Access Lines Converted to Packet Switching (Late Scenario)

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2.1	U. S. Narrowband Access Lines by Carrier Type
2.2	U. S. Wireline Access Line Displacement
2.3	U. S. Wireless Only Households
2.4	U. S. Adults in Wireless Only Households by Age Group
2.5	U. S, Cable Telephony Access Lines
2.6	U. S. Forecast ILEC Narrowband Access Lines and Broadband Connections
3.1	U. S. Broadband Households
3.2	U. S. Market Shares of DSL, Cable Modems and Fixed Wireless for Standard Broadband
3.3	U.S. Broadband Households by Nominal Data Rate
3.4	Trend in Residential Access Data Rates
3.5	Minimum Availability of 24 Mb/s and above Broadband (VHS Broadband)
3.6	U. S. Online Video Users and Internet TV Users
3.7	Comparison of Internet TV and 6Mb/s and Above Broadband Forecasts
3.8	U. S. HDTV Households
3.9	U. S. Internet HDTV Households
3.10	Comparison of Internet HDTV and 24Mb/s and Above Broadband Forecasts
4.1	Deployment of VHS Broadband Fiber
4.2	Comparison of Deployment of VHS Fiber and VHS Broadband Availability
4.3	Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Base Scenario)
4.4	Substitution of Metallic Feeder Cable by Fiber Feeder Cable (Base Scenario)
4.5	Percentage of Access Lines on Metallic Feeder Cable (Base Scenario)
4.6a	Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Base Scenario) (Duplicate of Figure 4.3)
4.6b	Metallic Feeder Cable Survivor Curves (Base Scenario)
4.7a	Access Lines Converted from Metallic Feeder Cable to VHS Fiber Facilities (Late Scenario)
4.7b	Metallic Feeder Cable Survivor Curves (Late Scenario)
4.8a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTP ILECs (Base Scenario)
4.8b	Survivor Curves for Metallic Distribution Cable - FTTP ILECs (Base Scenario)
4.9a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTP ILECs (Late Scenario)
4.9b	Survivor Curves for Metallic Distribution Cable - FTTP ILECs (Late Scenario)
4.10	Scenarios for FTTN to FTTP Transition - FTTN ILECs
4.11	Comparison of FTTN to FTTP Transition Scenarios and VHS Broadband Fiber Deployment - FTTN ILECs
4.12a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Early Scenario)
4.12b	Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Early Scenario)
4.13a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Middle Scenario)
4.13b	Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Middle Scenario)
4.14a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber - FTTN ILECs (Late Scenario)
4.14b	Survivor Curves for Metallic Distribution Cable - FTTN ILECs (Late Scenario)
4.15a	Access Lines Converted from Metallic Distribution Cable to VHS Broadband Fiber (Industry Composite)
4.15b	Survivor Curves for Metallic Distribution Cable - ILECs (Industry Composite)
5.1	Age-Survivor Curve for Fiber Optic Cable
5.2a	Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Early Scenario)
5.2b	Survivor Curves for Standard Single-Mode Fiber Optic Cable (Early Scenario)
5.3a	Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Middle Scenario)
5.3b	Survivor Curves for Standard Single-Mode Fiber Optic Cable (Middle Scenario)
5.4a	Substitution of Full Spectrum Fiber for Standard Single-Mode Fiber Optic Cable (Late Scenario)
5.4b	Survivor Curves for Standard Single-Mode Fiber Optic Cable (Late Scenario)
6.1	Surviving Value and Depreciation Lives for Transport Circuit Equipment
6.2	Survivor Curves for Narrowband Circuit Equipment (Base Scenario)
6.3	Survivor Curves for Narrowband Circuit Equipment (Late Scenario)
6.4a	Standard Broadband Circuit Equipment (Base Scenario)
6.4b	Survivor Curve for Standard Broadband Circuit Equipment (Base Scenario)
6.5a	Standard Broadband Circuit Equipment (Late Scenario)
6.5b	Survivor Curve for Standard Broadband Circuit Equipment (Late Scenario)
6.6a	Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Base Scenario)
6.6b	Composite Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Base Scenario)
6.7a	Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Late Scenario)
6.7b	Composite Survivor Curves for Circuit Equipment, excluding VHS Broadband Equipment (Late Scenario)
7.1	Voice and Data Traffic
7.2a	Substitution of Packet Switching for Circuit Switching (Base Scenario)
7.2b	Survivor Curves for Digital Circuit Switching (Base Scenario)
7.3a	Substitution of Packet Switching for Circuit Switching (Late Scenario)
7.3b	Survivor Curves for Digital Circuit Switching (Late Scenario)
7.4	Access Lines Converted to Packet Switching (Base Scenario)
7.5	Access Lines Converted to Packet Switching (Late Scenario)