This installment of TMCnet's "Executive Suite," a feature in which leading executives in the Voice over Internet Protocol/communications industry discuss their companies’ latest developments as well as providing analysis on industry news and trends.

Technology Marketing Corporation President and Editor-in-Chief Rich Tehrani recently interviewed Faraj Aalaei, CEO of Centillium.

Faraj Aalaei

Centillium’s Faraj Aalaei

Rich Tehrani’s Executive Suite is a monthly feature in which leading executives in the VoIP/IP Communications industry discuss their company’s latest developments with TMC president Rich Tehrani as well as providing analysis on industry news and trends.

Centillium CEO Faraj Aalaei is the guiding force behind the company’s successful track record as a leading innovator of high performance, cost effective semiconductor solutions for “last mile” broadband access deployments. An industry pioneer and holder of two patents, Aalaei has spent over 24 years at the forefront of technical advancements — from helping develop the world’s first broadband modem for CATV networks to the introduction of Centillium’s high capacity convergent technology for DSL, optical and VoIP applications.

Centillium (news - alert) is a provider of broadband access solutions at the systems level. Among other things they make the silicon that manages DSL connections as well as VoIP (define - news - alert). The company’s CEO Faraj Aalaei is quite knowledgeable about communications technology and I have been awaiting the opportunity to get his thoughts on a number of issues as follows.

Status of broadband in the U.S. versus globally

We are falling behind in terms of access to broadband, including availability in all regions and, more importantly, the quality of broadband. We are on dirt roads while other countries are riding on 16-lane highways.

Asia and Europe have much faster service. We have 1.5 megabit best effort type services while, in other countries, FTTH is real. Some of our telcos aren’t even considering it.

We aren’t taking enough leadership in connecting users to best available technology like other countries. Japan, Korea, and China are all actively deploying fiber to the home.

VPON is the standard that Verizon (News - Alert) is using and it uses a lower bit rate and is asymmetrical. They are focusing on buildings while Asian service providers are going to homes.

The two-tiered Internet

Other countries aren’t looking at two tiers. The services over the pipe are yours to win or lose. Telcos are becoming more creative but they aren’t embracing a two-tiered Internet.

I asked Faraj if he thought there was a similar level of competition in other countries.

“There is much more competition in other parts of the world for broadband,” he told me. The CLECs are profitable and are doing well at significantly lower rates than we charge in this country.

Video over DSL, IPTV (News - Alert) , and other triple play capabilities

Many operators in Europe and parts of Asia are providing ADSL2+ at 24 Mbps, and 50 Mbps in Japan. These higher bit rates are offered at lower prices than what we pay in the U.S. For example, in some countries, it costs 20 dollars for 50 Mbps DSL connections. Faraj told me he currently pays $40 for 1.5 Mbps best effort service — he actually gets 200 kbps.

“Why is this the case?” I wondered. One explanation we agreed upon was that there is a lack of U.S. competition and U.S. loops are longer. Fiber to the curb or neighborhood could reduce costs however.

Convergence of wireless and wireline (demystifying IMS)

Users are getting wireline and wireless from different service providers. We currently need multiple devices to get these services. IMS allows blended lifestyle services any time or place. Video anywhere is one of the goals here. The Phone Company’s infrastructure has to be updated to support service delivery.

It makes sense to go to IMS as you need one integrated services platform — not a different network for every device or infrastructure. The goal is to have an integrated services platform, regardless of access technology. This will allow customers to float between service points without feeling the difference.

Furthermore, softswitch-based control allows you to sell users services on the fly, and this is very critical in the relationship with the consumer. If you had IMS ten years ago you couldn’t have done as much with it, but today, the user devices and applications have outpaced the ability for the network to keep up.

The network has to migrate to keep up with the user, so we are now investing in reality — not something for the future. We need upward mobility in terms of solutions. Every service creates a new set of hardware-based investments.

IMS creates a user-centric paradigm as the network adapts itself to what the user is doing. This allows the service provider to continue to sell to users. IMS infrastructure is access agnostic, integrated, and IP-based. We just need to worry about what the user wants.

Last mile technologies

Access technology for 100 years was a piece of wire and never changed. The new services, like Caller ID and three-way calling, brought more money for telcos and didn’t require new infrastructure.

Now, new services are being delivered like a genie coming out of the bottle. Services are defining the access technology; not the other way around. People want to share albums — and pictures are eight megapixels in size. This is driving the need for access networks to improve and upgrade. People find applications where they want to communicate and need that bandwidth. Phone companies will have to supply it or lose the customer.

Users are defining what access technologies service providers need to put in and consumers will pay for the access.

We need an environment where there is no monopoly. The state of the FTTH environment in Asia is incredible. User optical modems are being used in Japan. These devices look simpler than a DSL modem and they have an optical connection coming into them and allow data transfer at 1 Gbps upstream or downstream. The optical box is sold to telcos for $100 a piece.

This sort of bandwidth allows users to choose their applications and allows full-blown video telephony, among other things.

Faraj believes the interface to the home should not be monopolized by cable companies and the like. “You should be able to pick a box on your own. Some boxes could do some things that others can’t,” he said.

“A service provider who controls the box can control everything,” he said emphatically.

We need to define an interface and make it standard and allow people to buy whatever box they want.

“This could break the logjam,” Faraj said, referring to the cable/telco duopoly.

Faraj acknowledges that a competitive CLEC market won’t happen in the U.S., so he wants to free up the interfaces.

He argues that the same thing happens in the wireless industry where the phones are locked so you can’t keep the device.

“You need to throw away the phone. In other countries this is not the case. Opening up the devices needs to happen in the wireless and wireline markets,” he stated.

Faraj finished the thought by saying that, “unless we do this, in the world of IP end-user mobility, we will always be dragging behind other countries.”

The state of U.S. broadband

Some countries enforce broadband rules — saying such things as, you will have 50 percent fiber in the next 10 years. Other countries have a free for all, so entrepreneurs build companies that supply users with services they want and the incumbents must change to keep up.

We are in neither camp. We are stuck in the middle. There isn’t true competition and the government doesn’t push broadband penetration. This is why Faraj wants other changes in the infrastructure so we have competitiveness in service and application layer.

Centillium’s continued growth in the broadband space

Centillium is investing in next-generation DSL technology, such as VDSL 2. They have no product yet, but have announced they are going in that direction and will leverage their experience in the space.

This will allow users higher and higher bandwidth levels and will be a hybrid between fiber and optical. They are still working on Gigabit Ethernet PON.

Service bundling

Our situation is not ideal and bundling is a challenge for competition from new entrants. We should allow providers to compete at the service level. People can pay more but get the service they want. In the end, interesting content still wins out.

IMS applications are coming

One of the things I liked about this interview is the refreshing look at how we can have more broadband competition without a CLEC market. Centillium supplies components around the globe and, as such, Faraj Aalaei is in an excellent position to see how far the U.S. has fallen behind in broadband access. He also has great ideas on how we can restore increased levels of broadband competition to the markets. For more information, please visit Centillium online at www.centillium.com.

Rich Tehrani is President and Editor in Chief at TMC.

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