Is CenturyLink About to Ditch Copper?

CenturyLinkIt’s no small secret that Verizon has been working really, really hard to ditch copper access lines. In areas where they haven’t rolled out FIOS, they’re letting older copper plants rot on the vine, ceding the wired space in those communities to the local cable companies. In areas of New York where Hurricane Sandy wiped out the copper plant, they’re flat-out refusing to rebuild any landlines, instead offering a high-margin fixed wireless service.

AT&T hasn’t been too much better. Their anemic speeds on FTTN constantly lag behind their cable counterparts. Like Verizon, most of their money comes from wireless operations, so that’s where their efforts have been focused. In fact, when was the last time you heard anything about U-Verse in the news?

It seems to me that CenturyLink is ready to follow suit. They recently announced that they would be building fiber to 19-20K cell towers in their service areas. I can’t say I blame them. This is a highly profitable business, one that I wish UTOPIA or its providers could crack. Given the slow and steady loss of both landlines and broadband customers (the latter due to a lack of network upgrades), I’m sure they’re looking at whatever boosts the bottom line.

You’ll note, however, that upgrading DSL users to ADSL2+, their FTTN solution, is a footnote. Their CFO and SVP more-or-less states it outright:

“We try to design the routes to bring fiber to the towers to where they can serve other needs that we have to in terms of providing fiber closer to business customers and closer to residential customers to provide some of the higher bandwidth services,” Ewing said.

That’s right: CenturyLink is stating rather plainly that their main concern is to get fiber to those cell towers, then, if it’s “feasible” (read: dirt cheap), you can have the leftover table scraps. Cable companies (and most other phone companies) have posted subscriber gains in broadband, yet CenturyLink, who hasn’t upgraded speeds past 40Mbps since 2009, is losing thousands of customers per quarter. Odds are good that any areas getting this fiber will just now be moving off of vanilla DSL to the same 40Mbps speed (or lower) that they’ve been pushing for the last four years. When Comcast is pushing 105Mbps and UTOPIA and Google Fiber are doing gigabit, how is it anything but a giant middle finger to current and potential customers?

CenturyLink is choosing to let copper customers loose for the same reasons that Verizon and AT&T are: it’s expensive to provide service, and they can make the same or more money from wireless (albeit on different ends) with lower costs and a lot less competition. The copper network has paid for itself many times over, so writing it off as it continues to degrade is no big deal. The money they invest in cell towers has a much better ROI than investing in wireline services, so what limited funds they have will be going there.

This isn’t just a problem for CenturyLink customers. As they slowly back away from consumers and shift their core business to wholesale transport for other businesses, most users in Utah will be left with just the cable company, Comcast, to fill the void. With only a single wireline provider in most of the state, speeds will stagnate, prices will rise, and service will worsen. When there’s no incentive to compete, why would you?

Does Windstream’s Acquisition of PAETEC Spell ILEC Wars?

A week and a half ago, ILEC Windstream Communications announced that it would be acquiring business telecommunications company PAETEC, a current UTOPIA provider. As of yet, nothing has been said as to if that arrangement on the network will continue. As you may recall, AT&T had planned to join UTOPIA as the flagship provider until SBC purchased the company in 2005. That got called off because incumbent providers, both in the telco and cableco space, have a long-standing gentleman’s agreement to stay out of each other’s territories. While Verizon and AT&T fired a few shots in some Texas suburbs a few years ago, this arrangement has continued to stand for decades. The question now is if Windstream is willing to risk competition in its own backyard to keep access to UTOPIA.

I think the answer might be yes. Business telephone companies regularly both compete with and buy wholesale services from incumbent providers. Veracity, for instance, does this all the time. This would be a rare occurrence that a company is both, and I find it highly unlikely that CenturyLink would set up shop in Windstream’s backyard (mostly because they don’t have the money, but I digress). Even with what I assume are relatively few accounts on UTOPIA, Windstream may be ready to make the calculated decision to open up an ILEC-on-ILEC war right here in Utah. It may even expand to the residential market now that the merged company is no longer focused on business accounts.

The implications are huge. If Windstream pulls it off, Verizon and AT&T, both of whom are cash-rich, may decide to start picking off bits of CenturyLink’s business. Before long, incumbent territory won’t matter anymore. UTOPIA’s open access model would be ideally positioned to capitalize on the willingness to cross the anti-competitive artificial boundaries and provide quick market access.

The Coming of a New Duopoly

For a very long time, detractors of UTOPIA have pointed to the wireless market as a shining example of how the private sector provides superior competitive choice and great consumer benefit. Now we’re watching as that example starts to look a whole lot like the wireline business, locked up in relatively few choices with little product differentiation between them. Once AT&T completes its purchase of T-Mobile (and nobody seriously expects the deal to fall through), two companies will control over 65% of wireless lines in the United States, both of which are nasty players in the wireline duopoly business. This is just the beginning.

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Broadband Bytes: March 7-13, 2009

A new study shows that broadband growth is starting to level off while a separate study claims we’re paying as much as $3 per minute for our cell phones. We’re also getting more details of the broadband stimulus package (sparse as they may be), Comcast claims to have more phone customers than Qwest (seriously!), and Google finally takes the wraps off of Grandcentral to rebrand it as Google Voice (phone operators, go ahead and wet yourselves). All that and more in this week’s Broadband Bytes!

  • Broadband is still growing, just not like it used to. With 59% of American households now on better-than-dial-up connections and a sagging economy, the broadband market is looking a lot like the cellphone market in that almost everyone who wants it has it. And how do you get the last little bits of the market? I’ll give you a hint: follow the wireless industry’s lead. They swooped in with cheap plans, pre-paid phones, and multi-line service to make sure that everyone became their customer. ISPs can do wild things like, say, offer WiFi service with fixed broadband plans.
  • How much do you pay per minute for your cellular phone? A recent survey in California says you’re paying an average of $3 per minute for your peak minutes. Even lopping off the top users takes the cost down to anywhere from $0.50 to $1.00 per minute. Granted, this study doesn’t factor in your “free” night, weekend, or in-network minutes, so take it with a grain of salt.
  • The NTIA held a kick-off meeting to discuss the upcoming broadband stimulus package, but they apparently came to the meeting without much in the way of answers. All the same, attendees were reportedly generally pleased with the kick-off and the NTIA would really like to know your opinion. The House is even thinking about rewriting USF rules to allow for the money to be spent on broadband. It’s not all sunshine, though. IPI, a “stink tank” much like The “Reason” Foundation, is trying to block any efforts to fund muni efforts. Because, you know, incumbents did such a bang-up job deploying affordable and widely available broadband.
  • Comcast says that it’s picked up enough phone customers to be the third largest phone company in the country right behind AT&T and Verizon. (Sorry Qwest, but we knew this day would come.) They’ve been very aggressive at marketing phone service (unlike Qwest), offering competitive pricing on triple-play packages (unlike Qwest), and doing a lot of work to improve their company image (three strikes; guess who’s out). Not satisfied with their current numbers, Comcast is suing the feds so they can get bigger. The FCC currently prohibits any cable operator from owning more than 30% of the national market.
  • Remember Grandcentral? You know… phone number for life, rings all of your lines, intelligent forwarding, hasn’t done anything for the last two years as Google sat on their purchase. Sound familiar? Well, Google finally unveiled Google Voice, the successor to Grandcentral. In addition to all of the other great calling features of Grandcentral, they also tossed in SMS forwarding and automatic voicemail transcription, both searchable with Google’s own search technology. They aren’t open to any new users just yet, but the feature-rich services they offer are something worth copycating. Oh yeah, and they’re going to do super-cheap international calls. Think that phone companies may be a bit edgy?
  • Sprint is moving one step closer to dumb pipe operator by hinting that despite betting the farm on WiMax via Clearwire, they haven’t ruled out using LTE in the future. Despite the impression that WiMax and LTE are day and night, the difference is more in the software than the hardware. I think Sprint is getting ahead of the curve and realizing that operating the wholesale pipe is a lot more stable than trying to please end users, a task it has proven ill-suited at handling. Given the massive vertical integration of landlines, video, fixed data, wireless, and mobile broadband from giants AT&T and Verizon, Sprint’s exit from the telco business by spinning off local operations as Embarq, and further pressure from Cox Communications, Time Warner, and Comcast as they ramp up wireless products, Sprint may have seen the writing on the wall.
  • Verizon’s big FIOS builds aren’t just benefiting dense East-coast towns. Their insatiable demand for fiber has dropped equipment prices substantively allowing smaller telcos to go fiber-to-the-home. Even Utah’s own Manti Telecommunications Company is reported to be getting in on the action. With equipment costs dropping like a rock, now you just have to worry about the high cost of trenching and being obstructed by your “friendly” local incumbent.

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: February 14-20, 2009

Headlines this last week have been dominated by the DTV switch, The Pirate Bay’s trial, and a finalization of the broadband stimulus amount. There were also announcements on 4G wireless from AT&T and Verizon as well as more movement towards online video (and a big step back for Hulu). All this and more in this week’s Broadband Bytes!

Broadband Bytes: February 7-13, 2009

Congress passed the broadband portions of the stimulus package and just barely dodged some really nasty provisions while the DTV delay looks less than crystal clear. We’ve also seen Qwest’s abuse of monopoly power to shut down a rival ISP, both good and bad economic news (including Charter’s bankruptcy) and Fairpoint’s big bucket of fail in taking over Verizon assets in rural New England. All this and more in this week’s Broadband Bytes!

Broadband Bytes: January 31-February 6, 2009

It feels like the summer TV season as most of the news this week is reruns from last week. The DTV delay and broadband stimulus continue to dominate the news headlines. We also saw the launch of Lafayette’s fiber project, some new gadget news and more bad news from device manufacturers and SPs. All this and more in this week’s Broadband Bytes!

Broadband Bytes: January 24-30, 2009

This week saw the DTV transition delay get, uh, delayed (though not for long), Cox’s new traffic management plan, and a competing version of the broadband stimulus package that offers 50% more cash for 90% fewer conditions. Qwest also renewed its fight with SkyWi, Charter dropped a 60Mbps gauntlet, and Google launched tools to find out if you’re being throttled by your ISP. All that and more in this week’s Broadband Bytes!

  • The DTV delay got stalled up as the House failed to consider the bill for a fast-track passage despite unanimous support from the Senate. The Senate later passed a second DTV delay bill that the House should vote on next week; it’s widely expected that it will pass and President Obama has already said he will sign the bill as soon as it hits his desk. Now Congress just needs to figure out if/how to fund the 3.2 million (and growing) backlogged requests for DTV converter box coupons. I think the whole thing is kind of silly since Hawaii made the switch and there was no TV armageddon. Besides, interim FCC Chairman Copps says that a seamless transition is impossible.
  • Cox Communications is the latest large ISP to implement some kind of network management, opting for a system that’s a lot like what Comcast did. Unlike Comcast, however, they plan to throttle specific “low-priority” traffic types once the congestion gets too high including FTP file transfers, torrents and newsgroups. Predictably, there are a lot of people calling bunk on the plan, but I don’t think it’s so bad. Comcast is getting ripped by the FCC since their protocol-agnostic version would degrade competitor’s VoIP traffic if you end up being one of the hogs, so it makes sense to try and only smack around the data types that generate a lot of packets and a lot of transfer. Most users are fine with network management schemes so long as they are transparent and generous; the complaining just happens to be very, vey loud.
  • The US Senate has put together a competing version of the House’s broadband stimulus plan. The good? It ups the funds by 50% to $9B. The bad? It strips out all of the open access language and allows anyone to get in on the action. DSLReports rightly calls it a giveaway to Verizon since they can become eligible for money at the flick of a switch without having to really do much of anything differently and, as expected, Qwest doesn’t like how the plan is shaping up either. The House has already passed the $6B version and kept open access provisions intact. It also keeps the money restricted to rural and underserved areas and will only be available via loans and grants, not tax breaks as incumbents had hoped for. GigaOm has a great breakdown of who wins or loses in the various proposals.Telco lobbyists are already launching a multi-pronged attack. They want to scrap special access rates for competitors, up the spending, drop the speed requirements, get more tax breaks… pretty much anything they think might stick. Incumbents, though, seem to have missed the memo that the goals of this plan are to increase availability of braodband AND increase competition, not entrench the incumbents. I suppose they’re too used to abusing the USF and getting their way.
  • Qwest decided to ignore an order from New Mexico’s PRC and disconnect some of SkyWi’s customers without the required 10-day warning. Qwest has likely figured that whatever the penalty is, it’s worth it to kill off a competitor and SkyWi might not be around to finish its lawsuit. The company tried to pass it off as a clerical error. Expect New Mexico’s PRC to give Qwest a serious smackdown (provided it can survive Qwest’s army of robot lawyers) and keep an eye open for possible FCC involvement. Spurned CLECs like SkyWi are prime companies to recuit onto open networks like UTOPIA.
  • Charter, despite its severe financial problems, stole the St. Louis speed crown from AT&T by launching a 60Mbps DOCSIS 3.0 service at a wallet-busting $140/mo. This bests Comcast and Verizon by about 10Mbps, but it far faster than anything AT&T can do with ADSL2+. Verizon took the opportunity to make fun of DOCSIS 3.0 and its limits as compared to fiber. Users on UTOPIA are likely very “ho-hum” about the announcement since 50Mbps service has been available for quite some time.
  • Speaking of Verizon and AT&T, they announced earnings this week that reveal that DSL and landline users are being cannibalized by their FIOS and U-Verse systems, respectively. Both systems are picking up a lot of video users, but the margins on most television packages are very slim. Wireless revenues were the real shining spot, but it didn’t stop AT&T from posting a large drop in revenues and announcing a sharp decrease in spending for system upgrades. Guess the iPhone wasn’t enough to save them as AT&T also froze executive compensation (including bonuses) and brought a lot of jobs back to the US from India. Verizon is also rumored to be contemplating layoffs despite a good quarter.
  • Google fired a shot at ISPs who employ any kind of throttling or traffic management by offering up free tools to test for it. Even if your ISP isn’t engaging in these kinds of practices, the presence of these tools will help keep them honest. In the debate over network management, it’s very important to be clear and upfront about any caps or network management policies you plan to employ. Comcast got a PR black eye by hiding its policies for months as angry users took to the Internet and flooded forums with complaints. They get kind of stabby when you mention it after the fact (and for good reason).
  • I imagine users on Comcast and AT&T will appreciate these new tools. All three ISPs have signed on with the RIAA to disconnect users who are sharing copyrighted files. It’s part of the RIAA’s broad approach to turn ISPs into their copyright cops in exchange for a cut of the action, something they have successfully pulled off in Ireland. Given the lack of an appeals process and frequent ISP mistakes, you can bet that this opens the market for competing providers to snap up those customers.In the UK, they’re debating a different approach: a £20/mo “piracy tax”. Such a tax has already been implemented in Isle of Man which allows residents there to pirate as much as they want for under $1.50/mo. The RIAA would probably do better to offer an “all you can download” music service or some kind of “piracy license” that gives you the right to download whatever you want.
  • Comcast is thinking about offering WiFi to subscribers, but no word yet on if they plan to charge for it or use it as a perk to lure in customers. They’re currenting testing it out in New Jersey in a partnership with Cablevision. Cox Communications really took the lead on this by snapping up a lot of regional 700MHz licenses so that they can start offering wireless services as well, including leasing tower space to cell phone carriers. Thinking beyond the triple play to include these kinds of services is a smart move for any service provider.
  • Smart companies also focus on customer service. Charter has taken up permanent residence on the DSLReports forum and, like Comcast, has a customer service team assigned to Twitter. And while Sprint has announced that they will layoff 8,000, they plan to avoid sacking anyone in a customer service position even as subscribers decline sharply. High customer satisfaction leads to low churn and lots of free word-of-mouth advertising. I recently got support from Sprint’s Twitter team and got my issue resolved in record time.
  • Guess who’s making money hand over fist? If you guessed Netflix, give yourself a red envelope. Or don’t, since most of the company’s revenue has come from users switching from mailed DVDs to streaming on their PC or TV. Even with the switch to streaming, Netflix is going to start shipping DVDs on Saturdays to help speed up processing and delivery times. (No word on how the post office’s plans to drop Tuesday service will affect this.) I wouldn’t be surprised if the secret sauce in Netflix’s bottom line is customer satisfaction. The few times I’ve had an issue, I had a short hold time to talk to a live person who was empowered to make me happy.

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.