Tag Archives: NBC Universal

Between visiting family in Sacramento for Thanksgiving and a business trip to Montreal (where the hotel apparently didn’t believe in reliable Internet service), I got a bit behind on the Broadband Bytes feature. Never fear: I’ll make it up to you with a special double feature to get caught up on the previous two weeks.

• A recent study shows that 18% of HDTV owners can’t tell the difference between standard and HD programming. This may be why DirecTV can get away with claiming over 150 HD channels when they include 480p digital broadcasts. Also of interest is that 38% of all HDTV buyers are motivated by a broken/old TV set or are buying an additional set. A scant 22% bought their set for the better picture quality. There’s also a significant number of people who won’t upgrade to an HD set until well after the digital cut-off in February. Standard-definition video will be a significant player for some time to come.
• So just what are folks watching on those HDTV sets? Fewer of them will be buying premium packages from satellite and cable providers, so bet big on basic video packages and over-the-air signals. With online video sites such as Hulu and YouTube expanding their selection of HD content and Blockbuster making an entry into set-top boxes (albeit very lackluster), few may see the value in the ever-increasing cost of paid video packages. You can even find NFL games (though sometimes of questionable legality) using your PC. Internet hasn’t killed the video star as TV viewership continues to rise, but it is creating a challenging advertising market for video providers. Comcast is already seeing predictions of increased video churn.
• It’s no wonder subscribers are shedding video packages. Price increases have been as regular as Yellowstone’s Old Faithful with Comcast, Time Warner and Bell Canada continuing to jack up the rate you pay. Qwest has decided to go in the other direction and extend their $15/mo offering (1.5Mbps/YourGuessIsAsGoodAsMineKbps). Comcast also upped the speeds on their value tier (from 768K/128K to 1M/384K), but it’s not as competitive as Qwest’s offering and was a direct response to Verizon making the same speed changes. Consumers are taking it into their own hands and finding ways to negotiate lower rates with thier providers. The French, however, are laughing all the way to the bank. Fierce competition has resulted in a triple-play package with 100Mbps data, VoIP and 120 channels of video for $38/mo.
• All of these problems are driving customers to defect to other ISPs. Or at least they would if they thought a better option was available and it wasn’t such a torturous process. A recent survey shows that as many as 75% of current broadband subscribers would jump ship if the process were quick and easy. That makes for easy pickings for competitors and new entrants.
• All of these industry woes are capped off in some massive industry-wide layoffs and financial problems. AT&T decided to issue 12,000 pink slips, Windstream is lopping off 170 and looking at ways to trim pensions, Hawaii Telecom declared bankruptcy (I can’t imagine that Fairpoint will be too far behind), Comcast is closing call centers in Indiana and media companies Viacom and NBC Universal and also lowering thier headcounts. It’s not just telecom in the US either: Telecom Italia is looking to layoff 4,000 while it looks to sell off various divisions. Qwest is also feeling the heat as it settles with disgruntled investors for $445M and the CFO tries to assure everyone that they can manage their debt load. Verizon doesn’t escape the bad news either: regulators in Florida are considering heavy fines for neglecting the old copper infrastructure as they roll out more FIOS. These layoffs and financial troubles present opportunities for small and growing providers to pick up experienced employees on the cheap and capitalize on the uncertainty with entrenched incumbents.
• A broad group of telcos, cablecos and broadband activists have decided to put aside most of their differences and join together to call for a national broadband strategy. While these kinds of things aren’t new, the biggest players in the industry have decided to join in this time, no doubt inspired by sagging bottom lines and the chance at a bunch of federal dollars. Of course, not everyone is happy at the idea of incumbents getting a slice of the federal pie and I can’t blame them. After all, these jokers are the same guys who managed to get nearly $1B in bogus USF funds over a one-year period. That sure would have paid for a lot of broadband. Saskatchewan isn’t standing still: the Canadian province plans to drop nearly $200M to promote universal access. Vermont also has a plan of its own.
• Next year will be a mixed year for broadband. Reports say that shipments of DOCSIS 3.0 gear have dropped like a rock and cable operators are holding off on selling off some of their markets. Clearwire is also slowing down its deployment schedule in the face of tight credit markets. Despite a fierce race to the 100Mbps threshold (Verizon may be there next year and Europe is totally handing our collective posterior back to us), the higher speeds are more likely to be available to existing footprints as system expansions either slow or halt. Now would be a good time to figure out where the competition has DOCSIS 3.0 and FTTx and market outside of those areas to lock in the customers, especially if they have to spend a lot of time making repairs due to increased copper theft. Of course, you could always take matters into your own hands and build your own personal fiber connection.
• There’s big money to be made in backhaul. Cox Communications is looking to use its network to link cell towers and provide big bandwidth to medium-sized companies. Deals between carriers and cell companies aren’t the only source of wireless traffic. Research shows that explosive growth of femtocells could increase cellular capacity over 10-fold. Cell companies would really like to go this route since the customer bears the cost of this equipment and their ISP bears the backhaul costs. Don’t worry about bandwidth, though. The coming “exaflood” has been debunked as pure myth.
• Verizon continues to draw blood by not-quite-overbuilding AT&T U-Verse service areas. If the incumbents get into a full-scale war for customers down in Texas, you can bet consumers will be the winners. In other overbuilding news, it seems that BPL isn’t quite dead yet. While it’s a poor choice for end-to-end connectivity, it shows promise as the last mile of a FTTN system. With speeds of up to 400Mbps, it could very well spur even fiercer competiion.
• Even as Cox chases wireless backhaul, it’s also working on a wireless network of its own to move its voice, video and data products into the mobile world. Analysts are, er, “pessimistic” about cable companies moving into wireless, but AT&T and Verizon have been using wireless revenues to subsidize building fiber with great success. Given the growth in cross-device viewing and predictions that the wireless data market will be recession-resistant, I think that the analysts have pegged this one incorrectly, especially as speeds ramp up. Wireless has already proven popular in emerging markets where wireline options are scarce and could prove strong in rural areas.
• Keep your eyes on Cablevision. Not only could they end up busting heads at the Supreme Court over their network DVR product, they’re also trying to get programmers to ease up on their byzantine requirements for carriage. Feel lucky that Cablevision is the one brave enought to pick these expensive fights.
• The FCC is still trying to push a nationwide porn-free wireless network. The latest incarnation allows adults to opt out of the filtering, but, as usual, pretty much everybody is going home unhappy and nobody knows how the carrier that will eventually operate the network can end up turning a profit.
• In transfer cap news, Comcast is going to roll out a meter to let you check your bandwidth. (You know, that thing that XMission has been doing for many, many years?) AT&T, meanwhile, has chosen to join Time Warner in punishing the poor folks of Beaumont, TX with more low-ball transfer cap trials. T-Mobile has also resurrected caps, except they won’t really tell you how much is too much.
• And from the “holy crap” file: Embarq has chosen to have real, live people answer the phones when you call, just like the days of yore. It’s so crazy that it just might work, especially since telecom manages to do so poorly in customer satisfaction.

There’s still a lot more going on in the industry, but that covers the big highlights.