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!
The broadband stimulus number has firmed up at $7.2B in total spending and BPL looks like an unexpected back-from-the-dead winner. IBM plans to apply for stimulus funds to roll out BPL service to over 200k rural customers. The challenge is determining just which areas are considered underserved or unserved. Public Knowledge slammed Connected Nation, a broadband mapping group, as nothing more than a front for big ISPs and accused them of making up bogus broadband maps to serve their interests. It’s entirely possible that Connected Nation could score the lion’s share of the $350M in funds for mapping, a scary proposition if the accusations are true. After all, this isn’t the end of federal broadband efforts.
There’s a new attempt in Congress to force ISPs and hotspot owners to keep 2 years worth of access and subscriber logs to assist law enforcement. The justification, as usual, is that retaining the data will help catch people dealing in child porn. Unfortunately, keeping and managing two years worth of access logs is a huge undertaking, especially for wifi hotspots and home owners who choose to share their connection. Such efforts have typically died in committee despite previous pushes from both sides of the aisle.
In what I can only hope is the start of a trend, Linksys will be selling a router with integrated Internet security software. It’s only going to block malicious or suspicious websites for the time being, but future models could integrate anti-spyware and anti-virus. If someone offered such a device, I would definitely buy one. It beats installing resource-hogging security software on every PC.
Recession-influenced special pricing continues as operators struggle to hold on to cash-strapped customers. Sprint rolled out a new “Simply Everything” plan that adds laptop data (but not phone-as-modem) for another $50 a month. T-Mobile is also rumored to be looking at unlimited options of it’s own including a $50/mo unlimited voice plan as well as a $85/mo unlimited mobile voice and data plan. Verizon, though, takes the cake for considering a $5/mo inbound-only landline. Utah, though, is taking a step back. The legislature approved a move to upcap phone service rates for incumbents like Qwest and it is largely expected to be signed off on by the governor.
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.
Bring up the term "regulation" and you're often going to think of heavy-handed mandates, byzantine rules and unresponsive bureaucracies. Despite this popular image of regulation, it sometimes works.
Ars Technica reminds us of the 40-year-old Carterphone decision that the FCC handed down 40 years ago yesterday. The landmark decision allowed third parties to start attaching any device they wanted to the public phone network so long as it did not cause interference. Not only did it let us pick and choose our handsets, it also gave birth to devices as varied as the answering machine and modem.
Even so, regulation sometimes fails us. Some small ISPs are having their day before the Supreme Court to nail AT&T to the wall on wholesale line-sharing rates. Their argument is that the fees were designed to give the incumbent carrier a significant advantage over competitors. Many CLECs and competing ISPs brought up the same allegations throughout the 90s, and with fewer ISPs today than in 1997, the accusation has legs.
There's also the issue of network neutrality hanging up in the air. Big companies like AT&T and Verizon are scared to death of mandates from Congress, especially with how badly Comcast has been skewered over their secretive throttling and booting users who use too much of their "unlimited" Internet. Their angle is to try and get the FCC to approve a plan favorable to their interests before a less-friendly White House takes over. The good news is that the mere threat of regulation has forced them to move pretty far from their original positions, a move that's good for consumers.
When you have a network with competing service providers, interchangable equipment and freely-moving applications, consumers and innovation win. Open platforms like the kind that Carterphone created should be encouraged instead of hampered.