With low take rates, political spats and pesky introductory discount rates, Earthlink posted a $30M loss for Q1 blamed on a shrinking dial-up business and expensive WiFi rollouts. With just 2,000 regular subscribers, a handful of government contracts and the upcoming auction of the lucrative 700MHz spectrum by the FCC, Earthlink is poised to bleed serious red ink for some time to come.
(See full article here.)
Provo Mayor Lewis Billings rolled out a new city budget where iProvo funding takes center stage. The city plans to loan an additional $1M to the project to cover bond payments while seeking additional service providers and pushing additional commercial accounts. Signing up businesses for iProvo service will be critical since commercial accounts are willing to pay more for faster Internet thus producing higher margins. Businesses accounts are also far less likely to suffer from the same level of "churn" that hits residential accounts. With these two changes, it seems like the light at the end of the red ink tunnel may finally be approaching.
(See full article here.)
It's earnings report season, and it looks like the short-term thinking of investors has been ruling the day with telcos. Verizon has watched earnings tumble as they make significant investments in their FIOS system while Qwest tripled their profits by building a whole lot of nothing and cutting retirement benefits. Investors have reacted accordingly to drive Qwest stock higher while Verizon stays flat despite their significant investments in an upgraded network they are likely to use for the next fifty-plus years. Meanwhile, AT&T's second-rate U-Verse network is slow but cheap, keeping investors happy while putting on a "we do fiber too" facade for the general public. It's only a matter of time, however, before those last mile issues catch up to them and force the expensive upgrades that Verizon has already jumped on top of.
Diving deeper into Verizon's numbers, we see that the take rate for FIOS is about 13% of homes served with a jump of over 20% in the last quarter alone. Over 42% of Verizon's new broadband customers signed up for FIOS so the demand for the higher-speed connections is definitely there. Verizon has also positioned itself as a triple-play provider with this network and has been entering new markets to aggressively compete with incumbent phone and cable providers. Companies like Qwest and AT&T that refuse to make these kinds of capital investments are going to be stuck in the perpetual state of catch-up with more nimble competitors and networks.
Who knew that big, bad Verizon would end up being the company to lead the charge on making good on the industry's broadband promises? Better late than never.
(See full articles here, here and here.)
A very common refrain I'll hear when it comes to UTOPIA and other municipal fiber efforts is "let the market decide!" On the surface, it sounds like a good idea: let private competitors enter the area and give the incumbent providers a whatfor. Where they consistently fail, however, is in delivering a plan that works to achieve these ends.
Comcast recently posted an 80% increase in quarterly revenue on strong growth of triple-play services and reduced customer churn. This might also have something to do with jacking up my basic digital TV service by about $6 a month. The article also makes no mention of the bad PR they've gotten from cutting off Internet users who "use too much bandwidth" without telling them how much is "too much" or how much they've been using. Rumor has it that if you call in and threaten to cancel or downgrade services, they'll actually give you a big discount, sometimes as much as 25%. Still, I'd be much happier lowering my rates by switching to UTOPIA and saving about $30 a month.
(See full article here. Hat tip to The Consumerist for information on making Comcast give you a discount. More on Comcast shutting off high-bandwidth users found here.)
According to a survey by the Organization for Economic Cooperation and Development, the US has a laggard rate of broadband adoption, we pay too much for it, and we're giving up a ton of economic benefits by not having it. From a high of #4 in 2001, we've dropped to #15 out of 30 industrialized nations and pay over 10 times as much per megabit as other countries in the survey. The need for next-generation broadband is now, and I doubt we can depend on the incumbents to give it to us.
(See full study here.)
They've just posted a heap of criticism for the iProvo project and don't mind taking a few swipes at UTOPIA either. Most of this diatribe is little more than declaring things to be fact with zero citation and I've been taking them to task on it. Why don't you go on over and join the fray?
(Utah Taxpayer: iProvo, the rest of the story)
About once every month or two, The Heartland Institute releases yet another paper lambasting municipal telecommunications networks. This month proves no different with more claims that municipal broadband efforts are financial black holes and renewing the call for market-based solutions. The problems with these reports lies in their blatant manipulation of the facts and complete and total ignorance of why there has been a renewed push for municipal networks in the first place.
At a meeting of wired communities, Gov. John Huntsman had ample praise for the job done by UTOPIA in building out its fiber network. Officials from several foreign countries were in attendance as well as Paul Morris, UTOPIA's executive director. Hey Governor: how about some love for those of us living in the county that can't get service? You already know how to get the legislature to give you what you want (like all-day kindergarten).
(See full article here.)
