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!
- Congress is working on some compromise legislation that keeps somewhere in the neighborhood of $6.7B for broadband and manages to preserve the “open access” language that guarantees net neutrality and possibly open-access networks. The package dodged a few bullets, however, such as allowing ISPs to play copyright cop using deep packet inspection. It also nixed the tax break language which would have been a $1.6B windfall to Verizon in exchange for practically nothing. A bigger concern, though, it how to identify the unserved and underserved areas since data on broadband availability is, er, “lacking“, a task that’s been given $350M. Now it’s our job to ensure that the money is watched very carefully.
- President Obama signed the DTV delay bill only to see 491 stations, about 40%, swarm the FCC with requests to switch early. Just over 70% of those requests have been honored which leaves us in a messy patchwork of DTV switches. Just as I’ve said before, those who haven’t switched were just procrastinating as long as possible. Now hurry up before all of the DTV converter boxes are gone. If all else fails, you can try swapping for a coupon from someone else.
- The Qwest vs. SkyWi fight got even uglier as the CLEC sold off its VoIP business citing the problems it has had with Qwest. The incumbent’s willingness to throw around its weight was no doubt designed to put other CLECs on notice as to who exactly is in charge. This certainly highlights a stronger need for competing transport options like UTOPIA.
- As has been speculated for Months, Charter Communications filed Chapter 11 bankruptcy to try and wipe our $15B in debt. That’s not all of the bad news. Embarq posted lower revenue and Clearwire may not be able to line up the $2B in financing needed to finish building their WiMax network. Not all is bad, though. Netflix, as usual, is doing great and has passed the 10M subscriber mark, much of it fueled by streaming on the XBox360. Level 3 also posted its first profit in six years and DirecTV posted big subscriber gains. A common trend with ILECs is that wireline losses are being offset with wireless gains. Carriers without wireless operations (that’s you, Qwest) can expect continued weakness.
And speaking of Qwest, they’re not doing so well. Net income fellalmost 50% and they announced 1700 layoffs, but they still plan to build a bunch of new fiber rings. Earthlink is also a real head-scratcher. They’re actually making money now, but they don’t seem to really have any idea what it is they want to be when they grow up. The ISP has abandoned the municipal WiFi market and BPL has gone nowhere, they can’t gain access to ILECs next-gen networks which slowly kills their DSL business, their efforts to be an MVNO failed and now they’re saying that they want to ditch dial-up. I think their profitability is a temporary happy accident.
- Fairpoint has managed to make a fine mess of their takeover of Verizon’s rural New England network assets. Not only did they manage to screw up a bunch of e-mail accounts, they also seem to not be paying employees for overtime owed as a part of the transition. Not exactly a good first impression, is it? Unfortunately for them, Verizon’s last network spin-off in Hawaii ended in bankruptcy. Hopefully Fairpoint can avoid a similar fate.
- As The Pirate Bay prepares to go on trial for copyright infringement and faces the possibility of shutting down, some have started wondering if it could lead to a collapse of bitTorrent as a whole. The website currently indexes over 50% of all torrents and the remaining torrent sites would probably be unable to handle the load created by the resulting vacuum. I’m sure that would make Cox’s planned network management a bit easier.
- Good idea: trying to retain customers. Bad idea: using LNP requests to do it. The US Court of Appeals told Verizon that using LNP requests to convince customers to not switch their phone service is a big no-no. That means that the time for retention is before you get the Dear John letter.
- Now that TV.com is offering up streaming video, it looks like Hulu has a big-time competitor. CBS has promoted it heavily after adding a bunch of their own content to the site. (Don’t worry about Hulu; it looks like their dominance will be extended to Windows Media Center soon.) This gives cablecos more incentive to hurry up with plans to offer STBs that stream Internet video. On-demand video is also getting a boost as studios plan for more simultaneous releases of movies on DVD and on-demand. That’s good news for Vudu as they drop prices on their movie-streaming box to spur adoption.
