In the battle for broadband supremacy, at least how the duopoly define it, it very maybe that the majors are missing a large target market In a recent Pew Poll of broadband there were a few key points –

• 62% of dial-up users say they are not interested in giving up their current connectionfor broadband.

When asked specifically what it would take them to get them to switch to broadband:

• 35% of dial-up users say that the price of broadband service would have to fall.
• 19% of dial-up users said nothing would convince them to get broadband.
• 14% of dial-up users – and 24% of dial-up users in rural America – say that
  broadband service would have to become available where they live.

And of noninternet users….

When asked why they don’t use the internet:

• 33% of non-users say they are not interested.
• 12% say they don’t have access.
• 9% say it is too difficult or frustrating.
• 7% say it is too expensive.
• 7% say it is a waste of time.

Another words roughly 20% of the population that they could get to use broadband have not been provided with a compelling reason to swtich, even if it is available to them. When someone says that it is hard to use. Are they referring to the internet or possibly the website to figure out what the options are? When on says that the Internet is a waste of time. They could be right. Many is the day I have seen my daughter burn her life away on FaceBook. 7% say that broadband is too expensive, and they would be right it is.

What is most striking is that 24% of those dialup user polled said broadband would have to be available to them. That folks is the equivalent of the California Gold Rush. The firm that can tap into that market cheaply and at a profit will have a license to print money. The Majors are not going after that market. They are sticking with the urban/suburban markets.

Full report here.

That is, Starbucks is shutting down 600 stores. Your favorite hangout might be one of them unfortunately. High gas prices have had major impacts on their revenue numbers. Consumers havea choice — cut out the double latte or put a couple of gallons of gas in the tank to get to work. Its the luxury given up for the essentials in bad times. —

Starbucks Corp. said Tuesday that it has drastically increased the number of stores it plans to close and could eliminate as many as 12,000 full- and part-time positions as a result.

The company said it now plans to close 600 company-operated stores in the United States, up from its previous plans to close 100 stores.

Starbucks was a great hangout. I couldn’t justify the expenditure for a 3.99 cappo though it was fun to splurge from time to time. There are folks I know who were 2 and 3 cuppers every day. Crazy.

Regardless, for those that were used to the WiFi access; you might have to look for alternate digs. ‘Bucks has not provided a list of closing locations. I sort of doubt that they will either. Not their style to announce closings. This will cut into AT&T penetration level with them as well.

Linky.

I’ve long  had the suspicion that the heartburn AT&T and the cable guys get from P2P is more about getting paid more for content delivery and avoiding the necessary investment in infrastructure to accommodate users demands. The fact is ISP revenue is up and the cost of capacity is in free fall. This makes providing more capacity at current prices levels very profitable, just not as profitable as raising prices without making new investments.

In the connected world, bandwidth capacity must continuously increase. At the same time we must find ways to do more with less. Anyone within minimal understanding of technology can look at P2P vs server to client content delivery will discover that P2P is an exponentially more efficient way of delivering a large file or stream. That takes us back to the debate about getting paid more to deliver content and avoiding new investment, which seems to be what the cable guys and the death star are really interested in.

Mark Wegleitner, Verizon’s senior vice president of technology agrees with me on the efficiency of P2P:

Peer-to-peer is a distribution enabler. But often when people talk about P2P, it gets lumped into a category with things that are bad, mainly because it takes up so much capacity on the network. But whether it’s a good thing or a bad thing, there is underlying technology for P2P that can be used to everyone’s advantage to get content like video, which everyone is asking for, distributed in the most efficient way.

We conducted some tests with the P4P group and Yale University, and showed that customers have a better experience, and we use fewer resources, when we used the P2P technology. It’s really a win-win situation for us and the customer.(Cnet)

Could it be there is a battle about to be waged in real high speed access? Since the cable guys won’t actively compete against AT&T, will Verizon? It sounds like V is actually testing that idea now.

Verizon is apparently preparing to overbuild AT&T U-verse territory with Verizon FiOS service. This is a first, at least that I’m aware of, where large incumbent “baby bells” enter each other’s territory with competing landline services. Apparently, the rules have changed, and dramatically so. Verizon appears to be taking advantage of statewide video franchising rules (as Texas provides), and acting as a cable overbuilder, as opposed to a traditional telecom CLEC. The development was reported in this OneTrack post. I guess the gloves are slowly coming off. (Telecompetitor)

There are times you almost want to cheer for Verizon. So far, we’ve heard nothing about bandwidth caps from them. I sincerely hope they really shake things up for AT&T and the cable guy. Maybe they’ll make a fiber run out to my Fort Worth suburb soon.

Here’s a little known factoid: In the early days of electrical power, you paid a monthly charge based on the carrying capacity of the transmission line entering your premises. Electric service began as a luxury, and prices fell rapidly as companies began to rush to connect new customers. Electric meters arrived after just about everyone was connected. There wasn’t really any lack of capacity, there was a lack of new revenue growth. The occasional massive power failures began long after the electric companies began to manage use. Yes, by then we had many more devices that used electricity, and capacity was necessarily increased. The electric companies had no competition, so while economies of scale were realized in adding capacity, lower prices for consumers never came.

While states like Texas are making efforts to encourage competition in electric service, we seem doomed to repeat the same mistake with broadband access. There is some level of service available to just about every easy to reach customer, and often there are two providers to chose from. New customer growth has peaked, and the tiered service level opportunity has already been employed to boost revenue. What’s left? Usage billing. The cable guys started it, and now AT&T has signaled they are ready to run with the pack rather than compete. Why? Competing usually means you have to lower prices and improve service.

From a Wired interview with AT&T’s new chief technical officer, John Donovan, he stated:

……. AT&T will begin testing usage-based pricing starting this Fall. That’s driven by the economics of building network capacity, he says, not by an attempt to make more money. According to Donovan, one percent of the company’s customers account for 20 percent of the network usage; the top five percent account for 40 percent of the usage. Because the network must be able to accommodate peak traffic loads, AT&T — like other network providers — finds itself building far more capacity than most users need, just support the most prolific users.”It’s almost a taxation issue,” Donovan said, comparing the overhead required to support the top 1 percent with the annual taxes the corporation must pay. “Traffic on our backbone is growing 60 percent per year, but our revenue is not,” he said.

Usage-based pricing trials will be, he says, an attempt to encourage greater efficiency in the way customers use capacity.

It would seem the death star is on board with the plan to charge us more with no improvement in service. The need for new cash to meet demand is a paper tiger. The cost of delivering service is tiny, maybe 10% of the retail price. The balance is more than enough to build a more robust network if only adequate competition existed to foster it. Plus, new network infrastructure requires less power, upkeep and fewer man hours to operate while delivering exponential increases in capacity.

With Time Warner, Comcast, and AT&T on board with this new effort to further bilk the customer, will Verizon join the party? Bet on it. If our esteemed representatives in Washington and the state capitals were not so well bought off by the duopoly, we’d see charges of the duopoly operating as an illegal cartel being made.

AT&T has agreed to a settlement on third party billing and services. The settlement covers the span of time from 2004 to May of this year. This settlement covers all AT&T wireless customers in the period specified.

AT&T customers who have seen mysterious charges for ringtones and other content show up on their cell-phone bills will be eligible for refunds as part of the settlement of a group of class-action lawsuits, a lawyer for the class said Monday.

Customers will able to claim refunds for spurious charges that appeared on up to three of their monthly bills between Jan. 1, 2004, and May 30, 2008, according to Jay Edelson, lead counsel for the plaintiffs.

It is the first nationwide settlement over the business of third-party content, Edelson said. AT&T spokesman Marty Richter said he knew of no other similar settlement.

Edelson’s firm has filed similar suits against Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA.

Since Edelson’s firm has cases pending against the other carriers, the AT&T settlement will be the template used. AT&T will now require that anyone signing up for third party services will have to respond to a confirming text message. Most likely this will be the solution applied by the other carriers.

Does this solve the problem? No. The confirming text message should be directed to the primary number. Why? Family plans. Kids are the biggest ringtone demographic. Under a family plan most likely the primary number holder is mom or dad. They are probably also the one paying the bills. So why shouldn’t they be the ones to approve the ‘purchase’?

More to come on this topic.

Linky.
Refund request form.

In what is a far reaching non-action by The Supreme Court; they have decided to not hear a case steeming from a class action against T-Mobile and AT&T and rendered by the CA SC. –

The U.S. Supreme Court on Tuesday dashed a bid by T-Mobile and AT&T to stave off a class-action lawsuit challenging the carriers’ policies against unlocking mobile phones.

The justices declined to review an October decision by the California Supreme Court that cleared the way for a lawsuit that attorneys claimed could represent “millions” of California customers.

In response to similar lawsuits, Verizon and Sprint, both CDMA carriers, have agreed to provide the software code to unlock cellphones after customers nationwide have completed their original contract, attorneys said. “That was the compromise we ended up with to get the cases settled,” said California attorney Robert Bramson, one of the lawyers suing carriers T-Mobile and AT&T.

As a consequence the CA SC ruling in favor of the plaintiffs suit stands unchallenged. So now the carriers in CA must proceed to trial or settle out of court for some agreed terms. My gut says they settle and agree to unlock phones. If they do that opens the door like the Carterphone decison of the 1980s for serious competition in the handset market in Calif. Calif is the biggest handset market of them all. Representing the biggest chunk of revenue for all of them on a State by State basis. The landscape is going to change very quickly I figure.

Trend? Biggest I see is internet handset sellers/resellers in CA offering unlocked handsets around the country. Once that cats out of the bag the carriers are going to have to open up.

Linky.

Previous posts here., here

AT&T with new contracts is prorating the ETF’s. From DSL Reports –

Back in April I noted that AT&T will now be pro-rating their early termination fees. Just as a reminder: that new policy started yesterday. Instead of paying the previous $175 penalty no matter when you cancel, new and renewing AT&T customers will now see that $175 total reduced by $5 for every month they’re under contract. Sprint, AT&T and Verizon all changed their plans after facing massive ($1 billion, in Verizon’s case) lawsuits for misleading customers. The carriers are currently trying to wiggle out of those suits by lobbying the FCC.

I say that is a positive development but a little too late. Why is it a Yank can go into any cell store in Bangkok, plunk down his money, and have an active no contracts phone in sight of 15 minutes? The contract idea is passe.

AT&T is finally catching up with Verizon and Sprint for higher speed wireless data. The service is neither faster nor cheaper and breaks no new ground. I suppose that it will open the door for Mr. Jobs to sell a new handset to his personality cult making the two “A” companies quite a few dollars in the process.

The telecommunications company said the remaining six markets would be connected to its HSUPA technology, which delivers up to 800 KB per second in upload speeds and 1.4 Mb per second in download capabilities.

The service will be available to customers who have supporting devices, such as notebooks with AT&T’s Laptop Connect wireless modems. However, such high-speed services among carriers are expensive with rates of $60 a month or more. (Yahoo)

Ques: What is the number of free AT&T hotspots? Yep. Nationwide. This includes Starbucks and Barnes & Noble as well. Now the ‘free’ Is targeted at iPhone users. But with a little tech jockeying anyone with a WiFi enabled laptop can too. LifeHacker provides a mini-HOWTO here.

This is actually good news for the consumer. It will be interesting to see how the Wifi — EVDO — WiMax battle plays out. Verizon right now is dong a big push for EVDO using a ‘WiFi captive’ marketing campaign. Expect fur to fly in the next couple of years.