Author Archives: Jesse

Google Taking Interest in Wireless Spectrum

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Google's been eyeing the upcoming auction for the 700MHz spectrum and involving itself heavily in the public debate over broadband. It seems their intent with the spectrum is to become a wholesaler of wireless access across the nation, letting companies bid against each other for the right to use the network in various markets in an AdWords-like auction. If this goes in conjunction with proposals that any network built on top of the frequency remain vendor-neutral, we may very well see Google becoming not just the gatekeeper of search but the gatekeeper of almost all wholesale wireless signals in the US. 

Is this is a good thing? On the one hand, a vendor-neutral wholesaler that builds and operates the plant encourages retailer competition, a system not unlike UTOPIA or iProvo. On the other hand, there are legitimate worries that Google could end up controlling too much of our digital lives with a potential to erode privacy. Only time will tell if Google will jump into this market and if they'll manage it in a way favorable to broadband competition.

(See full articles here, here, here and here.) 

Virginia Suburb Experiencing Monopoly Headaches

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Six years ago, a new housing development in Loudoun, VA decided to build an FTTH network as a part of their neighborhood of luxury homes. Today, they're regretting every bit of that decision. Where they went wrong was signing a 75-year contract with a no-name company that has done a poor job of providing reliable services to the point that many residents now use satellite dishes for both TV and broadband. The rub is that even if they don't use the frequently flaky service, they still shell out $150 a month in HOA fees for the service.

There's not much of a chance of firing Open Band, the company providing the services. The developer has a sweet deal in which they will maintain a majority control of the HOA for 20 years after the completion of the development, a period up to 10 times longer than standard. With the developer, Van Metre, getting tons of money from Open Band, there's almost no chance at residents being able to take action until 2028 at the earliest. It sounds like these homeowners would've been better off letting Verizon and Comcast come to town. At least then they'd have some semblance of competition.

(See full articles here and here.) 

Qwest "Price for Life" A Bum Deal

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Qwest has heavily marketed the idea of locking in the rate for pay for their DSL service, but you're left wondering if it's really that good of a deal. An in-depth look reveals that they can revoke that discounted price if you change speeds, move, change your service provider or cancel service before the end of the two-year contract. Early cancellation also brings a whopping $200 fee, though there's no word on if you have to then retroactively pay the difference for all the months of service you've already gotten, something Comcast will do if you break your contract. (I have a feeling that Qwest will try the same thing.) Considering that speeds are due to be rising substantially in the next 5 years, it seems like chaining yourself to a particular service plan is a bad deal for you but a sweet one for Qwest, a company experiencing a high churn rate as Internet users go to other companies and VoIP providers like Vonage eat away at their core business operations.

(See full article here.)

Telecommuting and IPTV Will Drive Bandwidth Requirements Higher

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Our bandwidth-hungry days are far from over. With spiraling gas prices hitting most of the country, many workers are turning to telecommuting to get the job done. Pair that up with the financial benefits of telecommuting (especially with new tax incentives from Congress) and we're likely to see that trend continue. Of course, this places higher bandwidth requirements on both businesses and workers even when using low-bandwidth tech like Remote Desktop or VNC. Pulling files over a VPN on a typical cable modem is also an exercise in frustration with some larger documents taking minutes to finish transferring. Considering that a recent reports shows that Brits lose over 2.5 days a year waiting for slow websites, businesses will have more reasons to push for better bandwidth.

IPTV is also going to push bandwidth requirements much further. ABC is going to push its shows to the web as HD streams, Joost is going to be distributing for Viacom and NBC (among others) is pushing lots of video content via iTunes. Considering that HD content pushes about 80Mbps of data, it's painfully obvious that current broadband won't be cutting the mustard for distributing high-quality streaming video.

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Will Qwest Sue iProvo?

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Though the threat stemming from last year's loan never materialized, there's concern that Qwest could sue Provo over the proposed loan of $1M to cover bond expenses. It all depends on where the proposed $1M loan comes from. If it's another loan from the city's electric department, it would likely not be challenged. A payment from the general fund, however, could end up being settled in court. While the city attorney thinks that such a deal is legally defensible, Mayor Billings would rather not go through the hassle.

Some good news in the tussle is that at least four companies have made proposals to start being service providers on iProvo's network and could each bring 500-1000 customers instantly as well as push MStar and Veracity to improve their customer service levels. The network will also be receiving payments from other city departments that use the network in their own offices, defraying many costs associated with its operation.

(See full article here.)

Charter Gets Waiver For Proprietary Set-top Boxes

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In what's bound to start a wave of "me too" from the industry as a whole, Charter Communications has obtained a waiver from the FCC to get an extra year to comply with open access rules for set-top boxes. The rules require cable providers to comply with the CableCARD standard so you can buy your own cable box or DVR and use it with any cable provider. While the rule is set to go into effect on July 1 of this year, the waiver gives Charter an extra year to work with. Any bets that other providers like Comcast, Cox and Time Warner aren't going to ask for a similar waiver?

(See full article here.) 

Cable Industry Tells Feds to Encourage Stronger Cable Monopolies

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In a move stunning only in its audacity, the National Cable & Telecommunications Association (NCTA) has demanded that the FCC be gutted and almost all cable regulation be done away with. Among the things they want killed are network neutrality, must-carry rules (which require a basic package) and a la carte channel pricing. Their claim is that increased competition has made these mandates unfair, but I can't see what competition they are referring to.

Most Americans don't have much choice beyond the cable or phone company. Many people in rural areas don't have any choices. (Even Provo, an urbanized area, is only 95% covered by either Qwest or Comcast.) It reeks of a monopolist industry trying to circle the wagons. This is an industry that has failed to understand the market. (See previous article about the industry's tanking customer satisfaction rates.) I have yet to meet anyone that wouldn't rather pick and choose their cable channels for a lower price. Some would even think about signing up as a new customer if a la carte pricing was offered.

Cable companies aren't looking out for consumers: they're looking out for cable companies. If they want something as radical as total deregulation, you can bet they have an angle they want to play to increase their monopoly power, just like with the old 1996 Telecommunications Act.

(See full articles here and here.)

More Than Fiber: DirecTV Mulls BPL While FCC Auctions Prime 700MHz Spectrum

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The market for high-speed Internet is about to get a lot more crowded. DirecTV is looking at forming partnerships with power companies to deploy broadband over power lines (BPL) to its customers. Considering the sky-high latency of pure satellite connections, I can see how they’d be eager to get in on this. What I can see happening, however, is a stab in the back from power companies. Remember how so many cable operators (like AT&T) gave @Home the boot to keep the profits for themselves? Never trust an incumbent monopoly, even in an unrelated industry.

Related to this is the upcoming auction for the 700MHz wireless spectrum, a chunk of the retiring UHF analog TV signals phasing out in early 2009. This particular piece of RF real estate can go through obstacles (buildings, trees, hills, etc.) much more effectively than the 2.4GHz signals used by 802.11 wireless networking and is unaffected by weather, I recommend to contact real estate israel if you are in need of a real estate expert, I also suggest to check Sober living Delray if you are thinking more of real estate near the coast. The end result is that the airwaves that once carried endless reruns and B movies could now deliver Internet ten times further than WiMax can. Is it any wonder that companies like Verizon and AT&T are salivating at the chance to snap this band right up?

This is leading to a big fight with companies that want an open-access “bring your own device” network that would do away with network incompatibility issues between PCs, cellular phones and all other wireless data devices. (Think of it as UTOPIA for wireless.) This group includes various consumer groups as well as former Netscape CEO Jim Barksdale and several venture capitalists and angel investors. It also seems like FCC Chairman Kevin Martin might be in the open access camp, though it’s not known how much impact he’ll have upon the commission as a whole. This is worth watching for the immense implications it will have in the rural broadband market.

(See full articles here, here and here.)

Think Cable Service Stinks? You're Not Alone

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A new survey of customer satisfaction by the American Consumer Satisfaction Index shows that while satellite providers top the list for TV service, the industry as a whole stinks. Cable and satellite providers scored the lowest amongst all industries covered by the ACSI including incumbent phone companies. (There isn't much love there either; landline phone companies have been sliding in customer satisfaction substantially since the 1996 Telecommunications Act.) Echostar, DirecTV, Time Warner, Comcast and Charter all showed substantial drops amongst their customers. It probably has something to do with steadily increasing rates, a lack of a la carte channel pricing, poor customer service and, at least in the case of Comcast, capricious enforcement of the terms of service.

As further evidence of the cableco's disconnect from Joe User, Comcast is talking about letting you watch a movie in your home the same day it opens in the theatres for $30-50 per screening. While it might be nice to beat the lines and put that fancy surround sound and digital projector to good use, that sounds like a whole lot of crazy to me. What can you expect from a company that charges $3.99 for a pay-per-view movie that's years old?

(See full articles here and here. Check out the ACSI scores here.)

City Council At Odds on iProvo Financing

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City Council Chairman George Stewart is going head-to-head with Mayor Lewis Billings over a proposed million-dollar loan from the city to pay down iProvo's bond debt. While the current subscriber base makes enough to pay operating costs and sustain the network, current revenues don't quite cover the payments on the bond. As part of the loan, Mayor Billings wants to bring in additional network providers and market more aggressively to business users, a market segment with higher margins that remains untapped.

Most of the debate on financing hinges on the current projections of 60 new subscribers per week. The City Council cut a deal with the Mayor to run the numbers presuming 40 new subscribers a week and revisit the loan. Let's hope they don't make the same mistake that American Fork did by refusing to spend what was needed to ensure a final success.

(See full articles here, here, here and here.)