Broadband Bytes: February 21-27, 2009

Sorry about the late post, folks. I had family in town over the weekend and, well, you know how that goes.

Cable’s been trying to make some waves with online video announcements as The Pirate Bay continues to dominate the prosecution in their trial. There’s also allegations that the US might be #1 in broadband, but it depends on which metrics you use or give weight to. I’ve also got a bunch of stories on online services and home media extenders. All that and more in this week’s Broadband Bytes!

  • Comcast and Time Warner are still beating the drum to put together their own Internet video offering to get more of the channels they offer onto the web, possible as early as this summer. It could, however, be too little, too late. As content producers and service providers continue arguing over how to make money doing it, consumers aren’t wasting a lot of time turning to iTunes, Hulu or even bitTorrent to get their video fix. Viewers are now watching record amounts of video thanks to new online outlets available on PCs and mobile phones. Maybe it’s time to follow the lead of Europe and Latin America with hybrid STBs that combine online video with a traditional product. That way you can keep cord-cutting as myth instead of a somber reality and maybe make some extra money off of it.
  • The Pirate Bay continues to embarass the prosecution and wipe the floor with them. In fact, the defendants were confident enough that they threw a big party after the first week was over. The prosecution’s investigators admitted that they downloaded torrents from TPB and the only evidence they could show were screenshots. The IFPI was apparently so clueless that they almost sued Google for facilitating piracy and had to alter the charges a second time to try and make conviction more likely. ISPs are getting bold enough to tell the music industry to come back with a court order if they want them to block P2P sites. Given how easy it is to keep on circumventing tracking and blocking systems, P2P whack-a-mole is a losing bet for ISPs.
  • We’re… #1 in broadband? Not exactly. Broadband availability and speeds still suck, but Americans are pretty darn good at squeezing productivity out of IT assets including broadband. The survey also includes data of dubious relevance such as SMS, so take the entire thing with a grain of salt. Besides, does it really matter how we compare or how we’re really doing?
  • Verizon will allow you to stream music, pictures, and (soon) video from your PC to any FIOS STB in your house. FIOS MediaManager is available to all double-play video/Internet customers for free and while the initial interface is a bit on the clunky side, it’s that kind of innovative product that keeps customers. Providers can also extend this to offer media streaming outside of the home. If you don’t have to mess around with a HTPC or setup your own streaming solution, why would you? Verizon is also letting subscribers remotely schedule DVR recordings.
  • What’s 400MB, written by John Carmack, and totally changes online gaming? Quake III in a browser, that’s what. Quake Live launched to queues of over 55,000 players waiting to get their hands on what is likely to be the most popular free-to-play non-casual browser game. This isn’t your typical small casual flash game and it’s likely to draw a big crowd. With a success like this, will you be ready for browser-based games pushing gigabytes of data?
  • The first Blu-Ray quality movies for purchase on an STB come from VUDU, not a big-name MSO or media store like iTunes. At between $14 and $24 per title, that’s a considerable discount over Blu-Ray discs, though you do sacrifice some portability.
  • Netflix plans to launch a streaming-only plan this year or next. The powerhouse in mail-order DVDs has seen most of its subscriber growth centered around the 12,000-title strong Watch It Now feature and its availability on everything from PCs to XBox360s to TV sets. The company has proved itself savvy enough to be ahead of what consumers want, a lesson that others could learn from.
  • T-Mobile is rolling out unlimited voice plans for long-time customers at a mere $50 per month. Customers will also be able to tack on data and SMS/MMS for just $35 per month more. With competitive pricing like this, you have to give customers a reason to keep a landline around.
  • If you’re being hit by black hat hackers, it could be personal, not business. About a quarter of malicious activity in 2008 was aimed at making a statement rather than the traditional ID theft or malware planting. I’m sure that’s not much comfort to Time Warner as they ride out a DDoS attack on their DNS servers.

Broadband Bytes: January 17-23, 2009

Just because Kevin Martin was on his way out the door doesn’t mean he couldn’t make noise on the way. The FCC started checking into Comcast’s network management practices yet again and slammed cable pricing. There’s also more talk about the broadband stimulus that just passed the house and it looks like a 4-month delay of the DTV transition is going to pass. All this and more in this week’s Broadband Bytes.

  • Just when Comcast thought it was going to catch a break on its network management processes (which, I must say, seem pretty clear and concise to me), FCC Chairman Kevin “Ma Bell fo’ Life” Martin decided to see if they were using the new system to purposefully degrade competing VoIP offerings. The allegations are that phone calls could get choppy during peak times when bandwidth demands are highest. (For what it’s worth, I haven’t noticed any problems with my Vonage phone on Comcast.) The FCC is also looking at regulating Comcast’s VoIP product like a traditional phone line since Comcast Digital Voice is being given preferrential routing treatment. Comcast has previously worked with Vonage to ensure smooth operation of the competitor’s VoIP service, I think this is a lot of smoke and not much fire, even if consumer advocates are happy to use Comcast and thier lousy customer satisfaction as a big punching bag.
  • Not to be content with just getting in another dig at Comcast, Martin gave all cable companies a special parting gift: an inquiry into video pricing and a big bag of fines. Given that prices have jumped an astronomical 122% since 1995, he might be onto something here, though I hope that satelite and IPTV competitors are included in the inquiry. (I’m looking at you, Dish, DirecTV, AT&T U-Verse and Verizon FIOS.) The complaint also cites moving channels to premium tiers and a lack of data being provided to the FCC. While cable operators are certainly complicit in rising rates because they don’t act as advocates for their subscribers (who have little to no voice in the matter), the real investigation should be into programmers who drop double-digit rate increases for channels that cable operators consider their foundation (ESPN, Disney, MTV, etc). All of this might just be Martin trying to strike back at cable operators who he believes were behind the unflattering report from Congress last month.
  • Microsoft also got into a tiff with Comcast, this time over a soured deal to use MS cable boxes. Comcast bought 500,000 boxes from MS that largely collected dust and only saw usage in Seattle, Microsoft’s backyard. Once Comcast dumped the boxes, Microsoft picked up its toys and went home. It could have had better timing; cable stocks took a real beating over the last year.
  • A House committee passed one half of the $6B broadband spending package and more details as to what to expect are starting to shape up. Network neutrality is in and so is “open access”, though what the latter means is up to the FCC. It could just be a euphamism for net neutrality, it could also include Carterphone-like “bring your own device” provisions or require an open service provider model like UTOPIA. I’m pretty sure that Michael Copps would take the more all-inclusive approach given his past positions, but Genachowski is a wildcard. The bill also strongly favors a grant and loan structure at the exclusion of tax credits, something that is upsetting both Republicans and incumbents. (Republican leadership is basically looking to gut the bill of all speed requirements, build-out requirements, net neutrality language and pretty much every other kind of accountability control.) Even advocates aren’t entirely in agreement over what provisions are the most important.

    You can read some in-depth analysis of the package from AppRising and Blandin on Broadband. And don’t forget that this is just a down payment, not a fix-all.

  • The NY Times, meanwhile, published an op-ed that a stimulus wasn’t needed. The entire thing read like pro-incumbent sock puppetry and the backlash was swift and furious. It’s one thing to be pro-incumbent, but that doesn’t mean you have to be anti-reality. That’s one of my main beefs with the Utah Taxpayers Association.
  • The delay of the DTV transition is all but assured as the Senate and House get ready to vote on a final compromise bill. The transition would be pushed back to June 12 allowing Comcast (among others) to continue to confuse TV watchers about what this means for them. The bill would still need more money for the digital converter box program for all of the procrastinators who haven’t yet picked one up. Stations still have the right to make the switch early, but I doubt many of them will take that plunge and risk losing viewers. Nielson projects that as much as 5.7% of viewers would lose access to TV signals, but that number is a sharp decline from just a month ago. (See: procrastinators.)

    Meanwhile, more voices keep wieghing in on the delay. Verizon changed its tune and now supports the delay, Qualcomm says no way, the TV tower industry isn’t in favor and Ars thinks the government should keep the original date despite botching the transition. One of the biggest concerns is rural access. While analog signals get fuzzy with interference, digital signal experience a cliff effect where the signal is either there or isn’t. Up to 20,000 residents of Hawaii may not be getting signals after that state’s switch and many in rural areas could lose signals while the FCC figures out how to extend their range.

  • Rural residents are getting shafted from another direction as big cablecos and telcos dump their less-desireable rural networks. Hawaii Telecom was one of those experiments and ended up filing for bankruptcy not that long ago. Fairpoint Communications faces the same challenges with the New England networks they have acquired from Verizon. Many of the rural networks are in desparate need of upgrades and the small companies assuming them don’t have the capital to upgrade broadband speeds or, in the case of cable operators, deploy VoIP. Powell, WY is one of those cities that got fed up with the crappy options and built their own FTTH network; it should be operating Real Soon Now(TM).
  • There’s still a lot of hold-outs who want to hang on to their dial-up or not have Internet access at all. A third of non-Internet users just aren’t interested and 19% of dial-up users wouldn’t ever switch to broadband. Price and availability, however, remain the main barrier to about half of dial-up users and about 20% of non-users. So what do we do to drop prices? That depends. A recent study suggests that wholesale rates charges by incumbents are way too high and a lack of competition often reduces your bargaining power.
  • There’s still plenty of throttling and capping news this past week. The CRTC, Canada’s equivalent of the FCC, composed a pretty comprehensive report listing who engages in throttling. Some of the companies never responded, but the largest ones are definitely doing it. Vodafone is trying a different kind of soft cap in Hungary that scales back available bandwidth to heavy users during peak times, a method similar to what Comcast does. Wave Broadband, however, is doing a really good job at illustrating how not to roll out caps. They used to do a 3GB/day limit, and now they publish a different limitation on the top-tier account with an unpublished limit on lower-lever accounts. Moral of the story? Users don’t hate caps or throttling nearly as much as they do a lack of transparency.
  • In gadget news, Verizon is rollout out a device they call Verizon Hub. It incorporates a 7-inch LCD touchscreen to sync calendars, contacts, maps and traffic directions with a wireless phone. The Hub also lets you send text messages or pop directions to your cell phone. It does not, however, integrate a femtocell. At $200 for the device and $35 per month for service, it’s hard to see how such a gadgety phone will end up catching on, especially since many consumers already can’t figure out the features on their wireless phones. Verizon is separately launching a $250 femtocell to support up to 3 CDMA calls at a time over a 5,000 square foot area. If the femtocell were integrated into the Verizon Hub, it might be a better deal.

    Separately, check out Engadget’s Netflix player shoot-out. With video streaming options becoming more of a standard feature than an exotic add-on, ISPs need to be ready to embrace and support users who choose to go Internet-only for video.

The Need for Speed: Comcast's Plans to Squeeze More Bandwidth From Aging Copper

In the quest to prepare for DOCSIS 3.0 without undertaking the necessary step of replacing aging coax with fiber, Comcast has been playing around with several solutions designed to postpone the inevitable and squeeze more bandwidth from their copper turnip. The end result? Freeing up anywhere from 25% to 50% of their available bandwidth on the coax last mile.

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