Archive by Carol Wilson

The TV emperor has no clothes

No less a source than Mark Cuban is pointing out the current fallacies of the Internet video model, although he is using Craig Moffett of Bernstein Research to do it. Moffett has become the industry’s supreme number-cruncher, a guy willing to look past the spin to what quarterly earnings and federal regulatory reports actually tell us. He’s the canary in the coal mine about recent access line losses, among other things.

This time, though, Moffett, and now Cuban, are taking on the reality of advertising support for video and how Internet video is undermining the current market, while priming a new audience of viewers to expect to not only get video content for free, without ads, but to also get only the best of what content creators have to offer.

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As good as being there

BT was an early supporter of Cisco’s TelePresence capabilities and today the company announced it had demonstrated the ability to support intercompany TelePresence connections, regardless of who the service provider is. According to BT and Cisco, the capability will be commercially available later this year.

This is obviously the next step in the process of making telepresence more viable for a broader range of customers. It comes on the heels of AT&T’s announcement last week of its network-based telepresence offering.

The momentum is clearly building here, but I think it’s also important to remember that Cisco is not the only player in this space. As my colleague Dawn Bushaus noted earlier this year, there are a number of companies active in this space who are eager to work with service providers.

When I wrote about AT&T and Cisco, and the ability to interconnect TelePresence sites in the network, without dedicated connections, I immediately heard from Teliris, which has been providing its customers with a fully-managed, end-to-end service since 2001, and according to the company, guaranteeing 99% reliability that ensure each meeting takes place on time and for the length of time that is needed.

The point here is that we are seeing momentum building in the telepresence space and while Cisco is driving a lot of that momentum, it is not the only horse in the race. Smaller service providers have options as well.

And for this market to truly take off, there will need to be interoperability among equipment providers. That’s a thornier issue for companies such as Cisco and HP, who believe in their own ability to dominate a market. As Dawn writes today, however,  there are market forces pushing in this direction yet many challenges lie ahead.

From the service providers’ standpoint, lack of interoperability means hitching your star to one vendors’ platform for a managed in-network service, and that carries its own risk, particularly for smaller service providers who may not be able to attract the attention of very large vendors .

Putting words into action

The folks at Tellabs set out to do a survey of telecom industry professionals to determine their opinion of broadband availability. Here’s what they found: more

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It’s a no-brainer, folks

If you listened to my podcast yesterday with Mark McElroy of Connected Nation about their study on the economic impact of pushing broadband into underserved areas of the U.S., you might have been impressed by a big number — $134 billion. That’s the potential economic impact of national deployment of what Connected Nation, a not-for-profit group, has done in Kentucky, with the ConnectKentucky project.

In talking with McElroy, however, I was even more impressed by two other numbers. more

Broadband everywhere?

According the Federal Communications Commission, there are 12 broadband service providers for my home zipcode.

I found that out from Broadband Census, a new Web site I wrote about today that is taking a grassroots look at where broadband services are available today in the U.S. and how much choice U.S. consumers really have.

 I know I’m fortunate enough to live in an area with more choice than most — in addition to AT&T, we have both Comcast and RCN in my little village, and all three have triple play bundles for sale.

But 12 service providers? I don’t think so.

In the pre-bubble days, there were DSL companies such as NorthPoint Communications and RhythmsNet Connections, who installed DSLAMs at the Central Office in downtown Skokie, where I live. Of that crowd, however, only Covad Communications still exists, and even they are dependent on leasing the last mile from AT&T. Qwest Communications once offered business service there, as did Verio, but those were pricey ($150 a month and up) and not aimed at consumers. They also depended on leasing the last line from AT&T.

Given the direction the FCC is moving on competition, will that kind of access be assured, or make economic sense?

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Slow economy doesn’t faze AT&T

AT&T is expecting a strong 2008, with consolidated revenue growth in the mid-single digits, a significant expansion in margins and continued double-digit growth in earnings per share — even if the U.S. economy continues to struggle, Senior Executive Vice President and CFO Rick Lindner told financial analysts today.

The financial markets reacted badly earlier this month, when AT&T CEO Randall Stephenson mentioned a slowdown in the consumer market, and some analysts questioned whether AT&T had taken into account the current economic times when making its relatively rosy 2008 projections. more

Netflix heats up video competition

The Netflix-LG announcement today is just one more sign of what’s coming in the video competition wars. As we head into CES, we can expect a lot more news of this type. Netflix is planning to stream movies directly into LG High-Definition television sets, bypassing any existing service providers with its video content, which includes thousands of movies and TV titles.

While telcos are moving as fast as they can — note the qualification there — to deliver video services, the current sellers of video content are going to stand still and watch their market disappear. Just as AT&T will try to exploit IPTV to make its U-verse service all-encompassing, consumer electronics makers and content distributors will capitalize on the ubiquity of the Internet to extend their reach as well.

The result is likely to be a much more fragmented video entertainment market than already exists today. Cable companies and telephone companies won’t be able to take for granted the appeal of their video-on-demand services, and they are going to have to work harder to sell all the extras and add-ons that many of them are developing now.

Services like the ones Netflix and LG are promising to offer will have greater appeal to a younger audience that glommed onto Netflix first and is already doing much of its video viewing over the Internet. Telcos and cablecos will have to work harder to convince the members of this crowd that they want to pay a major monthly fee and sign two-year contracts for services.

Nielsen DVR survey numbers no shock

Well, there’s a shock.

 A new Nielsen Media survey shows younger viewers are more likely to use digital video recorders or the Internet to catch up on shows they missed than those over 55.

I hope no one paid too much for that insight. The numbers show those under 35 are slightly more likely (37%) to watch a show on a DVR than those ages 35 to 54 (30%) but significantly more likely to catch up on the Internet (16%) than their elders (5%).

The real dropoff in technology usage comes at age 55. Those over that age are much more likely to wait for a rerun (35%) or just watch the next show (20%) than to use a DVR (18%).

None of this is surprising, but it does speak to the need for video service providers to make their technologies easier to use. I suspect older viewers would be happy to watch their shows on their own time, if they could only figure out how. There is a lot of disposable income sitting in the pockets of these older viewers, and for all the focus on the youth market, someone should be smart enough to tap that money pit.

Muni Wi-Fi nightmare

The city of Philadelphia can be generally credited with launching the muni Wi-Fi craze, and is now seeing the down side of that trend. Earlier this week, the City Council held a hearing at which the status of its ambitious municipal network was examined, given the fact that the service provider, EarthLink, has stated it will no longer invest in municipal wireless networks.

EarthLink’s grand plans have run afoul of business realities, and nowhere is that more evident than in Philadelphia. The company said it has spent $20 million to build out Philadelphia’s network, which is still substantial but not complete, more than the $12 million to $15 million expected. The original contract between EarthLink and the city and its Wireless Philadelphia not-for-profit organization was hopelessly one-sided. As noted by the MuniWireless Web site, EarthLink is expected to pay $2 million to the city, $450,000 in inspection fees and rental fees of $2 per month for each streetlight used in mounting antennas, along with 3700 free accounts for city workers to access the network. The contract also calls for 23 free zones and 25,000 reduced price accounts for low-income families that qualify in WP’s digital inclusion program.

All of that, on top of the higher-than-expected cost of actually installing Wi-Fi citywide leaves EarthLink in no position to do anything but bleed red ink. Subscribership is not likely to cover those costs any time soon, if ever. The company did not attend the hearing, sending an unsigned statement claiming confidentiality, but it’s obvious that EarthLink is between a rock and a hard place here.

In a report also issued this week, the New America Foundation blames Wireless Philadelphia for handing its network over to a private concern. I didn’t read the whole report, but here’s a blogger who did and takes issue with it, for reasons I understand.

Rather than parsing out blame, however, it seems to be that some reasonable re-negotiation needs to take place that doesn’t leave Philadelphia’s ambitious plans for bridging the digital divide in limbo but also doesn’t bankrupt the company attempting to make those dreams a reality. The municipal Wi-Fi market has come a long way and much has been learned – the hard way – in the process. Philadelphia pioneered once, and it could do so again.

Content piracy: What’s the MPAA doing about it?

It’s clear there’s a battle brewing over whether service providers can legally filter content, whether it is to prevent piracy, protect applications such as voice and video or keep peer-to-peer traffic from swamping the network. There are multiple approaches to doing this today and more on the way.

Dan Glickman, chairman and CEO of the Motion Pictures Association of America told UBS’s 35th annual Global Media and Communications Conference that his organization is working directly with ISPs and with its own technical arm, Movie Labs, to develop and deploy technology that can detect illegal usage of copyright-protected material. Glickman singled out AT&T as one company with whom the MPAA is working, but also said other ISPs are on the list.

“My prediction is the ISP community is going to be at the forefront of this – they have everything to lose and nothing to gain by not seeing that content is being properly protected,” Glickman said.

Understandably, this has some folks’ shorts in a twist. You can read what Broadband Reports and Ars Technia said.

What most of the reports of Glickman’s speech failed to pick up on, however, were the other ways in which the MPAA is working to stop piracy of copyrighted content. One of those is education, he said – working with schools to explain to a tech-savvy generation why stealing content is a bad idea.

And another is working with its members to “find new ways to deliver content at reasonable prices,” Glickman said. That is especially important for younger viewers, he added, who are looking to get content in new forms other than at the movie theater or on traditional TV.

To the extent the MPAA and content distributors develop a good business model for achieving that latter goal, they could go a long way to address casual piracy by otherwise law-abiding citizens. And that’s something to which no one can object.

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