For several years now, service providers have been terrified of the so-called “dumb pipe” and its potential to remove them as the gatekeepers to various services. Many of them use protectionism as a way to lock customers in. CenturyLink denies CLECs access to any node upgraded to FTTN, Comcast requires bundling to get their fastest service, and Verizon even goes so far as to snip out the old copper lines when you jump to FIOS. The reality, though, is that the dumb pipe is already here and they are ill-prepared for it.
As of today, XMission now offers their voice service to businesses as a pure SIP trunk. As with any business service, pricing is on a per-case basis and will require a quote. Hopefully UTOPIA business customers currently paying another carrier for voice service will consider switching.
Several months ago, FuzeCore said it was looking into using UTOPIA lines in Tremonton to serve the neighboring town of Garfield Garland. Looks like as of 6 weeks ago, they started doing it over a 6-mile radius that includes the neighboring towns of Elwood, Collingston, Fielding, Bothwell, and Deweyville. (Seriously, I don’t know how I missed the press release and Google Alerts only just now picked it up.)
Per the conversation we had at that time, FuzeCore was planning on connection speeds upwards of 10Mbps up and down with VoIP service. The website shows that they’re advertising 8Mbps+, so this is in about the right range. The best competitor Frontier can do is 3Mbps DSL with no mention of their upstream speeds or if their onerous caps will be making a comeback.
Wireless backhaul is one of the markets that I’ve been hoping UTOPIA would chase since it can greatly extend the reach and revenues of the network. Hats off to FuzeCore for using their wireless expertise from Idaho to make it happen!
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.
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.
Holy moly has the country gone crazy about the impending DTV transition deadline. There’s also more talk about the broadband spending in the upcoming stimulus package (where the money will come from is still a mystery), Charter’s impending implosion, the new FCC Chair, and continuing tech layoffs. We also know who’s going to replace Kevin “Ma Bell is my Homeboy” Martin on January 20.
The DTV transition is getting much, much uglier as Congress prepares an Obama-backed proposal to delay the switch from analog signals until June 12. Verizon isn’t very happy about it since it would delay their planned deployment of LTE, a move that also hurts Qualcomm, the company who makes the equipment. Ars Technica unveiled that an Obama cabinet member proposing the delay may have a conflict of interest as the delay would benefit Clearwire. It’s also not surprising that AT&T is in favor of the delay since it would hurt one of their largest competitors. Public safety groups also don’t want to delay their use of the freed-up 700MHz spectrum for a new public safety radio network. House Republicans have also voiced opposition to the delay citing the increased confusion of moving the date. Dish Network is already trying to capitalizing on it with misleading sales pitches. Wilmington, NC carried out a DTV test with few problems and Hawaii has already gone all digital.Add this blogger to the list of people who thinks that delaying the inevitable is a really bad idea. It’s been in the works for 10 years, we’re been talking about it publicly for at least three and stations have been bombarding consumers with warnings for at least the last 6 months. If you aren’t ready by now, then you just don’t want to watch TV. And if you do, there’s plenty of options available, including calling up local video providers for service.
Speaking of selling additional services, you might want to reconsider coming up with an in-house solution. Telephony Online proposes you start partnering up with companies that already do a really good job at providing services outside of the triple-play such as telemedicine and home security. There’s a lot of wisdom to this embrace of wholesale models since you can focus on your core business instead of being distracted by expensive (and often faulty) products with a high liklihood of being discontinued in a few years. The report focuses on FTTH operators (and part 2 discusses some of the regulatory hurdles that prevent more FTTH systems), but there’s a lot of wisdom in this for HFC, FTTN and POTS systems as well.There’s also looking at The Dark Side to make more money. The RIAA is offering up a portion of settlements with pirates if ISPs will turn them in (most of them aren’t biting) and most of the proposals to cap users are focused on squeezing out additional revenue.
Get ready for more pricing wars. MVNO Boost Mobile dropped a bombshell with a $50 unlimited wireless plan that includes voice, text and walkie-talkie services. That goes head-to-head with offerings from all of the major cell providers (most priced at $100 per month or greater) and even takes on brands like Cricket. The New York Times reports that Sprint did this with their pre-paid value brand to try and utilize more of their Nextel network. Embarq also dropped prices on it’s top-tier DSL product by $10/mo.One area that isn’t falling, however, is pay video services. While promotional rates are very attractive, rates have been rising quickly (no doubt because of higher retransmission fees). Oddly, churn hasn’t yet been affected, but that might be because a lot of customers are trapped in contracts with early termination fees. Many customers have also wised up; they know that calling to cancel can land them the promo rate for a few more months. Despite service complaints, price is the main factor driving subscribers to seek alternatives. Verizon seems to have taken the lead on this in at least one case, something that no doubt improved customer loyalty.
Despite what AT&T and Verizon are doing, Qwest is still going to stay out of the video market. Their rationale? Consumers will end up watching all of their video on the Internet soon anyway. That’s true in a lot of cases (especially for network television content), but there is still a lot of paid content that consumers want, especially as cable networks continue to make big investments in original programming. In the end, Qwest is going to have to come up with something more compelling than upload-crippled FTTN and reselling DirecTV.
As proof that Qwest might be onto something is CastTV, a relatively new site that aggregates content from various other video portals like Hulu, YouTube and others into a clean interface. If that got paired up with an Internet-connected TV, you might be able to ditch (or complement, your pick) your paid programming package. Demand for such a set is very high, over 71%. Microsoft has spent a long time working on an IPTV product for the XBox360 and its Netflix integration is supposed to be top-notch. Blockbuster also realizes the power of streaming video and is trying to push a new streaming product even though they totally flubbed their first attempt. The moral of the story is that providing gobs of bandwidth and not much else seems to be where telecom is heading.
Is Verizon planning to kill off POTS lines in favor of VoIP? It depends on which day you ask. Initial reports said they were going to within 7 years, then they came back and said they had no timeline. On the plus side, VoIP is inexpensive and has made a lot of quality and reliability improvements. On the downside, it’s still not as reliable as a POTS line and, as we learned from the Qwest-SkyWi dust-up, it may fall outside of the purview of your state PUC.
In gadget news, the Supreme Court has asked the DoJ to give them some input on the Cablevision DVR case. Pretty much every content producer in the country has come out against the proposal which would offer up 160GB worth of DVR for an inexpensive $10 per month.
Clearwire is showing off a portable WiMax “hotspot” that acts as a WiFi-WiMax bridge. Any WiFi device could be surfing over the speedy new network (if/when it becomes available in your area) with minimum fuss. Somewhat related to this is the emergence of subsidized netbooks from Dell and Acer for a cool $99 if you pair it up with a $60/mo or greater data plan from AT&T. It’s not a bad deal, but it does inspire memories of the ISP-subsidized PCs of a decade ago that ended up flopping. AT&T is also getting ready to push an in-car satellite TV and radio service – at $1300 for equipment and $22/mo for service. I somehow don’t see that catching on anytime soon.
I think 2009 is going to end up being the year of broadband. Advocates are very well-organized and the new administration is putting a lot of post-election emphasis on telecom policy, an issue that’s typicaly given only election-cycle lip service.
FCC Chairman Kevin Martin decided to up and cancel a vote on what to do about a free nationwide wireless network rather than stare down the angry lobbyists on both sides of the issue. Industry execs want the spectrum free and clear whereas privacy advocates are in a tizzy about the mandatory filtering requirements. Some members of Congress are pretty ticked off and claim that it wasn’t legal to delay or cancel voting on the issue. I’m sure that most of them will be happy to have someone else in charge, whoever he or she may be.
Spending $44B or more on broadband? That’s what Free Press would like to see over the next three years to bring 5MBps+ connections to every home in America with a goal of hitting 100Mbps in the future. The Fiber to the Home Council thinks that we should drop closer to the tune of $100B to get fiber to 90% of American homes. Naturally there’s some distrust; these are the same guys who botched the USF to the tune of billions.
Charter Communications is headlining this week’s bad economic news. The debt-laden cable company hasn’t managed to turn a profit since going public in 1999 and repeatedly gets low customer satisfaction ratings. (On a personal note, I know a lot of disgruntled Charter subscribers who would happily jump ship if something better came along.) Odds are that they’ll sell off chunks of the network to get investors and analysts of their back and stop the talk of bankruptcy. I guess the 8.4% jump in cable ad revenues haven’t helped the company’s bottom line. TV Week has a pretty good round-up of questions about how the industry is going to weather the tough times.
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.
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.
Remember how Broadweave constantly hammered on the importance of owning thier own phone switch? Apparently it’s all talk and no walk. An insider has revealed that Broadweave resells phone service from Veracity for all of the customers they acquired from MSTAR on the iProvo network. With Broadweave unable to control all of the SIP session from one end to the other, it sounds like subscribers should be prepared for more of the finger-pointing game when their voice service experiences issues. That’ll be a great selling point for the marketers from Telerus, won’t it?
This same insider has reported that MSTAR plans to follow suit and switch their customers on UTOPIA from using NGT to Veracity. They would join Nuvont in selling white box services from Veracity and make XMission the only current provider to not do so. This will reportedly result in a loss of dialing features, voice mail boxes and even some toll-free numbers. Subscribers had better prepare for the worst.
The deadline for Broadweave's takeover of iProvo has come and gone without much news or fanfare at all. In fact, other than the phone customers from Mstar, we don't know if any transition has taken place. Neither the Daily Herald nor Deseret News could reach Broadweave for comment and I know that Joe Pyrah has been trying for about a week. Broadweave's website also lacks updates on the current status of the transition. Either one of two things has happened: the sale still isn't finalized or the transfer has gone over so seamlessly that nobody noticed. Anyone care to shed some light on it? (Free tip: when the press is trying to get a hold of you, get back to them quickly. Not responding to a reporter looks really bad.)
Visitor comments on the phone switch have been mixed. One commenter reported a significant degradation of call quality after the switch and blames Veracity's phone switch, one that he alleges to have had problems for a long time now. On the flip side, multiple comments have indicated that customer support is substantially improved and it's easy to reach someone with questions via phone or e-mail, certainly an area where Mstar received a lot of harsh criticism. Certainly the ability to accomplish the emergency port of 1200 numbers was impressive.
I think the real test of the transition will be when the video customers are cut over. Four of the iProvo NOC technicians left prior to the sale being finalized and Veracity is primarily in the voice and data business. Broadweave doesn't bring a lot of in-house video experience to the table either with just a small pilot operating in the Sienna Hills subdivision of Washington City. A lot of complaints about the system video centered on advanced features such as VOD, HDTV and DVR, areas where rapid improvement will need to be made.
Comcast has already been attempting to capitalize on the uncertainty of the transition and if they can push those missing features via their own products, don't doubt that they will. Several commenters have reported receiving promotional offers in the mail pushing triple-play with a DVR for $70/mo for 6 months. Ads have also appeared in the Daily Herald to entice business-class customers, the most lucrative accounts, into switching to Comcast. Given the lack of notice from Broadweave about the switch and the somewhat confusing pricing information concerning package pricing, Comcast may have a winning bet with their FUD campaign.
As usual, any comments that fill in the gaps or relate user experiences are appreciated.
In an unbelievable move, around 200 Mstar customers on iProvo have been without phone service since Friday after New Global Telecom, the VoIP provider that Mstar uses, cut them off. NGT claims that Mstar is behind on their payments for iProvo customers and that UTOPIA customers are not affected. John Hansen, Mstar's interim president, says the claims of non-payment are bunk and blames the problem on iProvo customer service staff.
Broadweave managed to do an emergency transition of most of the affected customers to their network but it is still struggling with the last 200 or so. Phone customers are still able to receive calls and place 911 calls, according to NGT. Customer experiences have been mixed with some reports that the customer service lines are busy and others saying that they've been able to get through. For some odd reason, Broadweave's PR consultant has stated that they're waiting for the affected customers to call them to get the issue sorted out instead of aggressively trying to contact those customers.
While this problem isn't Broadweave's creation, it's their baby now. Mstar doesn't have much incentive to make sure the transition is a smooth one and can easily put egg on Broadweave's face by dropping a problem in their lap that they don't quickly resolve. It makes you wonder how many customers will unbundle services even if it costs more money to do so.
NGT also claimed in their statements that Mstar would be selling off the phone customers on UTOPIA to another provider. Obviously, UTOPIA can't comment one way or the other and there's nothing from Mstar to confirm or deny that claim. Any insiders want to clarify this in the comments?