According to the Standard-Examiner, Centerville may be able to spend RDA funds to expand UTOPIA without facing legal action from Qwest. The deal would be to build a telecommunications hub within the city that would be open to all networks and providers willing to offer high-speed services to businesses and residents. Centerville could spend as much as $150,000 to expand UTOPIA to businesses along the I-15 corridor and complete the network hub.
Anyone at the meeting care to share additional insights? I couldn’t make it due to weather and preparing for another activity tomorrow night.
The Centerville city council will vote tonight on using RDA funds to spur UTOPIA construction in business areas. The meeting is at 8:30PM at 250 North Main St. Qwest is still rattling its saber on this one, so having supporters present is going to be really important.
Happy New Year! This Broadband Bytes covers from December 20 through the end of the year. The end of 2008 saw even more retransmission battles (in particular the 11th-hour showdown between Time Warner and Viacom), Qwest trying to unplug a rival that’s suing it for racketeering, and the pending launch of FTTH services in Lafayette, LA. I predict that 2009 will offer up explosive growth in broadband speeds and availability fueled by federal dollars, an increased flight of users from cable to online video streaming and continued greater-than-inflation rises in programming costs.
Qwest’s official company policy appears to compete on everything but having a superior product at a superior price. After small New Mexico ISP SkyWi sued them for anti-competitive practices, Qwest decides to shut down the ISP claiming that they are in arrears by $1.7M. Regulators in New Mexico responded by demanding that Qwest restore service pronto to “critical” customers. Given Qwest’s attitude with Centerville over RDA funds for UTOPIA and their continued efforts to block pole attachments, I think we can see a pattern from America’s least competent ILEC. At least they’re smart enough to slash prices on DSL service across the board.
After years of litigation and construction, Lafayette is finally to launch fiber services in the city next month. Packages are priced very competitively with AT&T and Cox with an $85/mo triple-play package that includes 10Mbps symmetrical Internet service. Lafayette is both wholesaler and service provider, so it makes their financial goals a good deal lower than open networks like UTOPIA that have to share revenue with third-party providers. The Lafayette Pro Fiber blog has a breakdown of pricing options.
It wouldn’t be 2008 without some more bad economic news. The Washington Post reports that the housing slump is hitting homebuilders pretty hard which means you can’t depend on greenfield development to power your growth. New providers will have to look at expensive brownfield development in order to gain new customers. One bright spot is that a think tank has recently called for lowering pole attachment rates as a way to spur broadband deployment. That could spell good news for overbuilds.
As if it wasn’t bad enough that video rates keep on climbing (thank the Governor of New York for some of those increases), text messaging rates are seeing a precipitous climb in overage charges even though it costs fractions of a cent to send each of them. Providers have uniformly increased the cost per message from 10 to 20 cents. Given that a text message is no more than 140 characters, you’re essentially paying over $1400 per MB for texting.
Could big broadband kill Blu-Ray? ZDNet seems to think so citing the growth on online HD video options and the high cost of both players and movies. (h/t: Woods Cross Citizen) A few high-profile flops aside, online HD video has been exploding with manufacturers like Roku and LG integrating Netflix, YouTube and a bevy of other video providers into set-top boxes and DVD players. Even the Wii is getting in on the streaming action. To really compete with Blu-Ray, however, requires a solid 16-24Mbps of bandwidth, something most households only dream of having access to. Will the explosion of on-line video kill cable and broadcast TV? Probably not. Despite some strong warnings to get ahead of the online viewing trend, a recent study showed that online viewers are just as likely to watch live TV as everyone else.
Remember how much TV sucked after the writer’s strike and how some shows (I’m looking at you, Heroes) managed to never quite recover? The Screen Actor’s Guild is getting dangerously close to authorizing a strike after it’s January 12 meeting. If, like me, you’ve been eagerly anticipating new seasons of hit shows like Lost, we might end up waiting a lot longer. Maybe it’s time to get around to watching Jack of All Trades on Hulu.
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.
This week was kind of a slow news week. Most of the telecom world has been focused on President-Elect Obama’s plans for broadband stimulus and the continuing bad economic news from providers, programmers and manufacturers.
Qwest is planning to keep spending flat in 2009 which could mean a halt to construction of its FTTN network. There’s a lot of concern that Qwest won’t be able to meet its 2010 debt obligations which has investors seriously spooked. If Qwest does halt or slow FTTN deployments, it could mean that Comcast will make similar cuts to DOCSIS 3.0 rollouts in shared markets as they get bloodied in FIOS territories. Fiber projects like UTOPIA can capitalize on these stalled rollouts to snap up more customers. Part of Qwest’s problems could be related to its tendency to litigate and legislate its way to success rather than offering compelling products. Its shenanigans have recently gotten it sued by a CLEC in New Mexico.
Wireless also matters… kinda. Verizon is going to make a push to have the first LTE markets ready for service by next year, no doubt spurred on by the Clearwire WiMax juggernaut. It’s mostly a marketing ploy, though it could end up being a very effective one. Clearwire is already facing substantial hurdles and it’s probably safe to assume that even cash-rich Verizon won’t have a solid product for several more years. There’s also the problem of transport from the towers, an area where UTOPIA can shine. In other wireless news, AT&T is planning to stream satellite TV to cars and trucks, yet another move beyond the triple play. Augmenting a wired infrastructure with wireless offerings such as this is going to be critical in the future to increase revenue streams and keep bundled customers, especially if they don’t blend in.
Obama’s plans to allocate a substantive chunk of any stimulus package for broadband is being called a “Broadband New Deal”. The real question is how much of any package will be allocated to broadband and how it will be administered. Obama’s plan is to give states “use it or lose it” grants and let them best figure out how to spend the money. If additional conditions aren’t attached to the grants and vigorously enforced, we could just get a repeat of the Telecommunications Act of 1996. It will be very important that providers start now to get their political ducks in a row and line up for some of the cash.
Add Congress to the list of people who are miffed at the FCC under Kevin Martin. The House released a 110-page report slamming his management of the agency and calling for substantive change. With the White House changing hands in 6 weeks, I don’t think that’s going to be much of a problem. Given Obama’s legit technology chops, I’m optimistic that the new FCC head will do a better job.
Even though households with HD sets have doubled since 2007, only a quarter of homes are using the latest technology. With converter boxes and subscription services that don’t require a new set, plenty of consumers are content to keep using what they have, especially during a pinch. Your standard-definition packages will still be relevant for some time to come.
Speaking of content, you’d better learn how to play nice with local broadcasters. There’s a lot of instances of over-the-air stations flexing their muscle against cable over retransmission issues. CableOne and Dish have both ended up dropping local channels when they couldn’t reach agreements on fees and Lafayette’s fiber networkfound itself in the same kind of squabbles.
Qwest’s business model should be “If you can’t beat ’em, sue ’em.” The Davis County Clipper reports that America’s least competent incumbent is threatening Centerville with a lawsuit if they decide to move forward with their plan to use RDA funds to build out UTOPIA. Qwest’s accusations are, natually, light on specifics and big on puffery. Maybe Qwest should take some cues from Comcast and try competing instead of litigating its way to success.
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.
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.
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.
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.
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.
Have you noticed that video rates have been going up at a painful rate? FCC Chair Kevin “I love Ma Bell” Martin did and he wants answers. Despite also naming Verizon in the inquiry, it’s pretty obvious that cable is the real target. The focus is on the move of more and more channels out of analog tiers and onto more expensive digital tiers, a practice he believes is compelling consumers to pay bigger prices for the same set of channels. We’ve already seen a bunch of cable providers up their rates with Cablevision and Time Warner both getting in on the hikes.
Unfortunately, Martin is not investigating how wholesale rates from programmers have gone through the roof and has more-or-less abandoned “a la carte” programming options. He’s also ignoring caps from both Frontier (5-20GB) and AT&T (20GB) that are designed to boost revenues. Telcom in general is hurting right now and companies may see rate increases as a way to soften the dropping subscriber numbers. Both Qwest and Cox are planning lay off workers and Comcast had disappointing earnings results.
We may, however, see some big changes in store once the new president takes office. Word on the street is that Martin will voluntarily resign to pursue political ambitions in North Carolina. It’s anyone’s guess as to who would take over his spot and what they would do about these out-of-control telcom prices.
Some universities seem to be cutting back on POTS (plain old telephone) offerings to dorms because of lack of use.
Cox and Time Warner were fined for implementing SDV and knocking CableCARD customers offline without proper notification.
It also looks like BPL (Broadband over Power Lines) is dead. Manassas, Virginia where the flagship BPL network was deployed has been turned over to the city who will keep it around until about 2010. For all you amateur radio (PDF) operators out there this is good news.
Apple is rumored to be working on a networked TV. That’s going to require a lot of bandwidth. In addition to normal TV functions, you could stream any content from iTunes like downloaded movie rentals, TV episodes on demand, etc.
Business Week recently did an excellent piece called “The Digital Divide” that talks about just how important broadband is becoming in spurring business in areas that have it, and leaving those that don’t in the dust.
President Bush signed the Broadband Data Improvement Act into law on Oct. 10. The bill will provide for improved data on the status of broadband deployment in the United States by forcing the FCC to make a couple of major changes to the way it puts together broadband information. This includes yearly metrics for “second-generation” broadband that can support full motion HD video and more granularity to for reporting of broadband broken down by ZIP+4 instead of just ZIP (as it is now). The bill also authorizes a program of grants to support public/private public partnerships to stimulate broadband deployment and adoption at the state level. I’m interested to know what this would mean for projects like UTOPIA. Thoughts?