Look for the cable guys to get a little more aggressive adding wireless to service packages. After selling spectrum to Verizon Comcast and Time Warner entered into agreements to sell wireless products that will utilize V’s network. Customers connected via Clear’s network will be transitioned to Verizon, ending the Clearwire partnership.
While this will be a big revenue hit for cash burning Clearwire, it also frees it from the product and price restrictions the cable guys had imposed. Unfortunately Clearwire, it’s probably too late to take advantage of this new freedom even if it’s management was up to the task. I expect for Clearwire will go bust early next year with Sprint absorbing most of its assets and customer base.
The new Verizon arrangement does give the cable guys tremendous opportunity to innovate and disrupt. I don’t expect we’ll see much of either. Cable management tends to drive looking through the rear view mirror. Nothing that could be seen as a threat to the walled garden pay TV package will ever see the light of day. Only monopolies can survive doing business this way.
As for Verizon, look for more deals like this one. While quality of service has much more to do with tower density and backhaul, Verizon and AT&T are on a quest to lock up all available spectrum. Unless they control virtually all spectrum, their broken wireless business model can’t be sustained.
Folks the days of channel programming as a component of the entertainment complex is rapidly drawing to a end. You see I finally have a media box running XBMC operational. Not a real big shucks, for the geeky, but there is a considerable amount of configuration work that has to be done post install.
Some 600 channels delivered via the Internet. No channel provider need apply. All those channels are on-air programming. RTE1 & 2, BBC 1,2,3, SyFy, Several Russian channels as well which is delighting my wife.
But those are still channels Dog. Granted. But I can go over to YouTube and download free movies. Add them to my library. The same with several other feeds that can be found. Work is already afoot by the team to integrate XBMC with NetFlix. The short story of all this is, the free tech already exists to automate your viewing pleasure without spending a dime.
Like the networking and telephony fields, the intelligence is moving to the edge of the network for entertainment as well. Centralized channel deploys will be a thing of the past. A very smart movie studio is going to figure this out.
I could see a XBMC addon provided by the studio. You install it, enter your provided identity code and have access to that studios back list of movies for $5mo. $50/year to have access to the MGM or WB back list. I would go for it at that price. Don’t have to include DRM either. Codecs exist that lock the stream route so it can’t be copied without all the pain of true DRM.
You will excuse me, my wife wants me to turn up the volume.
This blog has been up nearly 4 years. In that time we have been beating the drum that its the governemnt – telecom axis that has delayed US deployment of faster, better, cheaper services. Don’t take our word for it –
Why is European broadband faster and cheaper? Blame the government
If you’ve stayed with friends who live in European cities, you’ve probably had an experience like this: You hop onto their WiFi or wired internet connection and realize it’s really fast. Way faster than the one that you have at home. It might even make your own DSL or cable connection feel as sluggish as dialup.
You ask them how much they pay for broadband.
“Oh, forty Euros.” That’s about $56.
“A week?” you ask.
“No,” they might say. “Per month. And that includes phone and TV.”
It’s really that bad. The nation that invented the internet ranks 16th in the world when it comes to the speed and cost of our broadband connections. That’s according to a study released last year by Harvard’s Berkman Center for Internet & Society on behalf of the Federal Communications Commission.
It’s not surprising that we lag behind such hacker havens as Sweden (number one worldwide, according to the study) and Finland (number seven), nor densely-populated Asian nations like Japan and South Korea (numbers three and four). But the U.S. also trails countries that are poor by European standards: Portugal is just ahead of us in 15th place; Italy is number 14. (The full rankings are on page 81 of the study.)
We’re barely behind of Portugal folks and by next survey we will have sunk even further. Count on that. We as a nation are sinking in the morass of a cabal that likes it the way it is. Its, the 4th of July, Ben Franklin would be pissed if he saw our current state of affairs.
A little over 2 years ago, I predicted the the world would soon establish 1GPBS as a standard for top tier broadband. In the US, a few tiny patches of 1GBPS capable services have already emerged, until now all fiber based. Now that relatively cheap gear to make it happen over coax has become available, Comcast is joining the 1GBPS club.
Comcast CEO Brian Roberts today hit the stage at the cable industry’s annual Cable Show to demonstrate a 1 Gbps broadband connection. During his presentation, Roberts demonstrated a live 11 mile 1 Gbps connection, downloading an entire season of 30 Rock in HD — in just 1 minute and 39 seconds. (DSL Reports)
It’s time for a few new predictions. Roll out of this service will be slow. Comcast might even have to light up an extra backhaul fiber or two to hand the extra demand (no big cost here, it’s already in the ground). Expect the service to be very expensive. Don’t expect Comcast to enter markets that have existing comparable service it would have to compete with. At 1GBPS, Comcast’s current usage caps make no sense at all, but it’s not going to be a $70 a month service. In contrast, in more competitive markets, providers expect to be offering 1 Gig for about the same price their upper tier customers pay now.
It’s good to see US broadband advancing. Unfortunately, it is advancing at a pace the is lagging farther behind the world’s leaders than a year ago. Cable is becoming a fixed line monopoly as the telcos focus on mobile service. As we enter the midpoint of the duopoly’s second decade, it’s time to consider a new restructuring often referred to as Divestiture II. The first Divestiture of AT&T might have worked had the FCC managed it responsibly, added cable to the fold and not backpedaled on rules. V2 needs to address shared right of ways and infrastructure that will insure a competitive market. Acting now could be the big boost our economy needs as competitors rush to market and other new services are enabled. Failure to act is pushing us closer to becoming a second tier technology nation every day.
In the U.S., if you want a 50- to 100-Mbps connection, it is going to cost you plenty: about $105 with a triple play plan. On the other side of the planet, however, you can buy a 1 Gbps broadband connection for $20 a month, as long as you sign-up for a 24-month triple play contract with Hong Kong Broadband Network Limited, a division of local Internet service provider, City Telecom.
The same company had launched 100 Mbps to the home back in 2005. In February 2010, you could buy the 1 Gbps connection for $215 a month. According to the Akamai State of the Internet report, at the end of 2010, Hong Kong was the fastest place in the world when ranked by average peak connection speeds of 37.9 Mbps.
The reason it can offer at such low prices is the low cost of passing each home with fiber — it’s about $200 per home. Hong King is an extremely dense environment, and that lowers the cost of the network buildout. At present, HKBN has about a million homes passed for its fiber network and is on target to hit 2 million homes passed by end of 2011.
In the U.S., there are a few pockets that will or do have access to
low cost1 Gbps fiber connectivity — the cities of Chattanooga, Tenn. and Kansas City, Kan., for example. Netflix CEO Reed Hastings in an interview with GigaOM said that fiber is the key to future Internet innovation.
Now I will grant, Hong Kong is a high density area, so that favors the providers as far as mile cost per household, but not at the rates being quoted. in the article above. New York, Chicago, Boston have some of the same urban densities in sections.
The point is, the consumer is not being fairly served by either the carriers or the FCC. We are being taken and we should not take it.
The Evil Eye was an early proponent of metered broadband, but back pedaled when a public outcry had the pols in Washington threatening regulation. With AT&T and Comcast’s new capped plans in place with no resistance, Time Warner has announced plans to follow suit.
….there’s only so much room for Time Warner to grow by adding new broadband customers — especially since the company already offers the fastest service in many markets. After that, the company obviously hopes to recoup the money it stands to lose from cord-cutters is by charging more for broadband connections.
Of course, Time Warner has made no secret of its desire to impose pay-per-byte pricing. Two years ago, the company caused a stir when it announced a plan to expand tests of consumption-based billing to four new markets. The plan at the time was to offer tiered service ranging from $15 a month for 1 GB to $150 a month — the approximate cost of the company’s triple-play service — for unlimited bandwidth. (Examiner)
In principle, I think true metered billing at a competitive rate is a good idea. Since a gigabyte on the competitive backbone is a couple of pennies, a fair price seems to be a 10 to 20x multiple plus a basic connection charge – say $10. Equate it with an electric kilowatt hour, only that kilowatt hour generally sells for a 2 to 5x multiple of what it costs to produce and deliver it. Broadband gigs are far less expensive to produce and the infrastructure to deliver them is far less costly in comparison. There is no cost of production since broadband is purely a delivery service. Even at a far higher multiple, gigabytes sold on a retail price structure comparable to kilowatt hours would cut the average cable subscriber’s bill by more than half. Under a fairly priced per GB plan, even heavy users would pay less. If pricing were truly based on usage, Time Warner would realize incremental revenue gains by encouraging subscribers to use more rather than penalizing them for it. Unfortunately, this is not what Time Warner has in mind.
It’s no secret that cable cutters are responsible for lower gross revenues at Time Warner. At the same time, faster speeds that the telcos seem unwilling to invest to compete with have made Time Warner a monopoly in virtually all of the markets it serves. The monopoly provider of an essential commodity can and will charge whatever it wants. What it wants is the same revenue per broadband customer that it currently gets from triple play customers. That means broadband subscribers could be paying substantially more.
In the vast majority of markets, cable broadband is now a monopoly. Being a monopoly that is also completely free to set service levels and prices is damn good work if you can get it. Don’t blame the cable providers. They are obligated to act in the interest of their shareholders, not the public. To be very clear, this is not a natural monopoly, but one that has been created by lawmakers. The time has come for those lawmakers to correct the problem they created: Either open the market to competition, or regulate cable like a utility. Regulation is the worst option and should be only the path of last resort.