A separate rumor says that Broadweave is in negotiations with ServerPlus for the same thing. That would be bad news for anyone currently in a customer service position with the company.

Mstar’s involvement in the process, however, is rumored to be very different from how it is portrayed in this article. Word on the street is that once they caught wind of the sale and were denied based on their account being in arrears, they quickly made a deal with Broadweave to sell the customer list and have their debt forgiven. The rumor mill says that Broadweave then double-crossed Mstar when board member Fraser Bullock threatened to pull business from the law firm that employed Mstar’s principal investor and demanded payment to settle the matter.

The major dailies reportedly are all aware of these shenanigans but have gotten a lot of pressure to keep it all under wraps. I’m privvy to only the surface details of the matter, but any current or former Mstar employees who’d like to fill in the gaps is invited to call or e-mail me.

• Remember how pinched consumers are more likely to drop video service than data service? A recent survey shows that unhappy people watch a lot more television than happy people do. With economic times getting tough, it may be a smart move to come up with innovative low-cost video packages to snag/retain these customers. Comcast is already trying out a $50/mo data/voice combo and is offering free basic cable for a year for anyone who subscribes to either voice or data services.
• Comcast is looking at sneaking in data rate increases after all. Their plan is to upgrade various tiers of service to higher speeds with accompanying higher rates. If you want to downgrade to a lower-priced package, tough noogies: speeds under 12Mbps will be gone except for a 768Kbps “value” tier. Competing providers should be able to snap up a lot of customers by offering a slower and cheaper tier between the two. T-Mobile is also raising rates on data packages, but with a 10GB monthly cap and terrible ping times, few are likely to use it for primary access.
• Copper is dead? Multichannel is pretty sure that DSL is DOA and the subscriber numbers back that up as cable dominates. (Ars Technica offers some excellent commentary on the Multichannel article.) AT&T, while still clinging to FTTN with U-Verse, is already using WiMax as a DSL replacement in rural areas and could very well push voice over WiMax. Businesses are also seeing the light (bad pun, I know) and choosing Ethernet and big-pipe services (think OC-3/OC-12+) over T1 and T3. The price of T1 lines is also leading many small businesses to look at business-class DSL and cable options. Some are going so far as to say that copper landlines could be dead by the end of Obama’s first term as customers flock to VoIP and cell phones.
• Telcos are hurting but cable could stick around for a while as coax offers a good chunk of bandwidth. They do, however, feel the pinch from the massive amount of bandwidth eaten up by video services. Even as SDV and DTA boxes ease some of that up, the demand for higher-quality signals to all of these shiny new HDTV sets will eat up a lot of the gains as cable operators are forced to move from 480p to 720p and 1080p signals. Competing providers will need to move quickly to offer true HD signals with low compression and superior data rates while the cable companies perform system-wide upgrades over the next 18-24 months. There’s something said for being first to market.
• Speaking of HD, incumbents are still making agressive inroads with their HD channel counts. Comcast and Time Warner announced more HD channels this week and Dish Network is agressively adding OTA HD to many of their markets. HD isn’t the only content being expanded; both Verizon and Dish are adding more international programming as well.
• Video isn’t just for your TV. Netflix is rolling out HD streaming with coincides with Watch It Now movies on the XBox360. YouTube is also doing a trial of high-quality video. Of course, streaming isn’t everything. Bright House is also pushing customers towards online video, just of the pay variety. They’ve inked a deal with RoadRunner to sell via their online store. All of these things is going to increase demand for greater bandwidth. And speaking of “content” delivery, you can now use your TiVo to order a pizza from Dominoes.
• Comcast apparently feels bold enough these days to blow off the FCC. FCC Chairman Kevin Martin asked for data on the operator’s policy of moving channels out of analog tiers and into more expensive digital ones, but Comcast was bold enough to give him only partial data even as threats of fines loom.
• It also appears that DTA boxes could be a sticky subject. CableONE asked the FCC for a waiver for a HD-capable DTA box with integrated security. This could shut out CableCARD (and possibly Tru2way) as well as a number of third-party devices like TiVo DVRs. Manufacturers are already pushing these boxes which could very well kill the Carterphone of video before it gets off the ground. Competitive operators will see the opportunity to be fully interoperable with CableCARD and Tru2way and ensure that customer DVRs will work on their systems.
• Local programming is in high demand, but there are some chinks in the incumbents’ armor. Since local programming options like high school sports, General Conference and rebroadcasts of local news are so popular, competing operators should mimic what Comcast is doing and look into an old-school public access channel.
• Online college classes are starting to show serious promise. Minnesota is pushing to get a quarter of college credits completed online by 2015. A collection of Utah colleges and universities headed by USU is pushing OpenCourseWare, entire courses in digital format that are free to reuse and distribute. These kinds of initiatives could drive demand for metro area networks between the universities and students.

• Here’s an interesting post about a guy who regrets his decision of moving to an area where there is no broadband (rural southwestern Wisconsin).
• A sparsely populated town of 350 in Wyoming is now a major English teaching hub, doing “outsourcing” in the opposite direction.  How did this happen?  The local telco coop that serves their area upgraded to fiber and now residents are doing business with people all over the world.
• The new mantra in real estate? Location, location, broadband. From this AP Article: “In less than a decade, broadband has gone from a luxury to a must for many people, and for some of them, it’s started to influence their real-estate decisions. Homes that have broadband are winning out over more remote ones that don’t. Areas with better and faster broadband are becoming more desirable than ones with slower access.”
• Akamai has released the 2008 3rd quarter report on the State of the Internet.  The U.S. is in 8th place in terms of speed, and just 26% of users have download over 5 Mpbs.  Upload speeds are far more dismal.
• Another telecom expert says the U.S. “needs more broadband competition”.  We certainly aren’t going to get that in Utah with a Qwest and Comcast duopoly.  We need UTOPIA and it’s accompanying open access principles to succeed.

Finally, Jesse already talked about this in his post, but the city of Monticello is moving forward with their own fiber network despite the legal appeal from TDS Telecom.  The bond money has been locked in escrow by the courts, but they are moving ahead anyway with liquor store reserve funds.  I guess they consider broadband that important.

I think we are seeing a trend here: fast broadband is becoming vital to businesses and individuals.  It truly is becoming the “railroad” of this century.  In the last six months, I personally know of three businesses that chose to locate in Murray because of UTOPIA and at least two friends that moved to Layton in the hopes of eventually getting UTOPIA.  And can you believe I am in an area in west Ogden where neither Comcast nor DSL is available, it’s unbelievable!

• Lax physical and logical security
• Poor customer service
• Preferential treatment of VIPs such as city council members
• No accurate record of which customers to bill and multiple changes of the billing system
• Little oversight from the corporate office
• Sexual harassment and hostile working environment

A current Broadweave employee wrote that most of the allegations were either untrue or half-truths. Given their explosive nature, the letters themselves shouldn’t have even gone up in the first place. It was dumb on my part and I should have just summarized the key points.

The only one that I have any kind of confirmation on is the security. I’ve had at least three sources confirm that there was a significant theft of long-distance services (6-figure, one of them says). I initially thought it was just bad luck, but a lack of appropriate security would make me reconsider that. Everything else? That’s anyone’s guess.

• Cable’s move to digital signals is resulting in higher prices and reduced channel selection for many video customers. While it will ultimately improve their HD and VOD offerings, customers on the lowest-prices tiers are likely to end up being forced to switch to more expensive digital cable tiers. Many consumers place a higher value on broadband than on video and may find themselves dumping video in favor of online video sites like Hulu or Joost. MGM is fueling the fire by offering full-length movies on YouTube. Increasing prices will also fail to play well with price-concious consumers.
• On the DVR front, AT&T has finished deploying whole-home DVR in 69 markets. This will allow customers to watch recorded programs on any TV in the house and is a smart move on AT&T’s part to drive DVR adoption. While there’s no fee for this service, AT&T does charge for the STBs for each set. Dish Network, meanwhile, will be deploying a new kind of DVR next week that can record from satellite broadcasts, analog over-the-air and HD over-the-air and function as a digital-to-analog converter box. Not all is good in DVR news, however. The Supreme Court is going to hear appeals in the Cablevision networked DVR case and the content cartel is aggressively lobbying to make sure it gets outlawed. This will be an important case to watch as it will have a lasting effect on video innovation.
• Video providers are trying to capture some of the online watching audience. DirecTV is working on its own “web on demand” portal similar to Hulu/Joost/Fancast/etc. while also finding ways to let DVR owners watch that content on their PC. Verizon also made news a few weeks ago by announcing that it would stream videos from YouTube and Blip.tv to STBs.
• With the presidential election behind us, attention has focused like a laser on where President Obama and the Democratically-controlled Congress are going to go with the FCC. Congress is likely to pursue aggressive agendas on Net Neutrality and maybe finally pass the Community Broadband Act that’s been languishing for years. The new president is also likely to tap political veterans to help run the FCC and shape technology policy. Whie I’m sure that cable companies are eager to see FCC Chairman Kevin Martin out, the new FCC will probably continue to keep cable under its thumb while applying equal pressure to telcos, something Martin hasn’t been very good at doing. Cable may have spent millions on lobbying, but it likely isn’t going to buy them any breaks. CTIA seems to have recognized this new reality when they dropped their complaint against open access requirements on the 700MHz C-block spectrum.
• Forget triple-play: welcome to the quad. Cox Communications plans to use recently-purchased spectrum to deploy cell-phone serivce in its markets. Since Cox can leverage its existing infrastructure to keep transport costs low, the profit margins should be substantial. They will also deliver video services to handsets for existing video customers as they had tried to do with Pivot. AT&T and Verizon have been using wireless revenues to help subsidize the construction of their next-generation networks for quite some time with a lot of success. Qwest, meanwhile, has had poor financial performance as it does not offer its own video or wireless products.
• Cable and phone companies are making a big deal about holding the line on broadband prices, except that they aren’t. While the monthly cost is staying the same, the introduction of caps and overage fees (often with a markup of 1000% or more) is likely to start making your broadband bill look more like your cell-phone statement. While bandwidth caps aren’t necessarily evil when done correctly, a really low cap results in significant negative publicity, especially when your overage fees are many times the cost of the bandwidth. The reality is that offering ever-increasing speeds is what’s driving this increased usage and refusing to perform necessary network upgrades to compensate for it is hurting incumbent carriers, particularly cable. Just ask Hughes how it likes being raked over the coals for its “Fair Access Policy”.
• Unupgraded networks are hurting telcos big time. Cable has been stealing away landline customers and consistently offers better speeds leaving some industry analysts to wonder if DSL will survive too much longer. While pair-bonding can improve DSL speeds (both AT&T and XMission are doing it), it’s a stop-gap measure in a world dominated by FIOS and DOCSIS 3.0. Even Verizon is feeling the heat in markets not yet upgraded to FIOS. While ISPs keep on talking about the high speeds they can hit in tests and use smarter network management to keep traffic on their network, such measures are not a cure.
• BPL is dead; long live BPL. IBM is working to deploy broadband over power lines in rural markets not served by DSL or cable. While the speeds fall shy of traditional wireline services, they are much better than resorting to satellite services.
• Quick: who has the best land-line service? According to a study, Comcast takes the crown on quality while AT&T picks up the reliability award. Troubled VoIP operator Vonage didn’t do so well, likely one of the reasons that the company experiences really high churn.
• Content is still king. Verizon has picked up new deals with Major League Baseball, Cablevision is bringing a big selection of Bollywood movies to their VOD and Comcast continues to understand that local programming is a win. This will be especially important as telcos move into the video space and continue to invade cable territory.
• The municipal fiber fight in Minnesota isn’t over just yet. TDS wasn’t so happy about losing its fight with Monticello and decided to appeal the loss. The real losers in this fight are the residents who have to wait for next-generation services. In positive muni fiber news, Chattanooga’s network is moving forward with plans to offer video serivce.

On Monday, I was approached with an offer to do part-time consulting work for a UTOPIA independent contractor who also plans to pursue work with several other fiber optic systems. Their proposal was that I spend a couple hours a week putting together a “reading list” of what’s happening in the telecommunications space to inform UTOPIA staff of industry developments and help keep the project on-track. This feature will also be published weekly on this site (I’m gunning for Saturdays) under the Broadband Bytes banner. Jonathan Karras and Mike Taylor will still be contributing authors on the site, though they will probably tend more towards traditional articles and essays.

I was also asked by an author at a national telecommunications magazine to consider petitioning the magazine’s editor for a position as an article contributor on subjects related to fiber networks in Utah. Paid or not, I’m interested in bringing more information about UTOPIA to a wider audience and followed his advice to inquire about it. We’ll see if it goes anywhere.

So does this mean I’m selling out? I hope not. Much to my wife’s chagrin, I have been steadfastly opposed to running advertising on Free UTOPIA since it benefits me and me only. I don’t want the site itself to be a revenue generator no matter how tempting the paycheck may be. I don’t, however, have any problem with offering paid consulting services to contacts I’ve made via all of this work that I’ve done. I won’t lose any sleep at night over accepting this offer and aside from who’s writing most of the Broadband Bytes features, it should be the same old site.