We have said several times here that at some point carriers are going to have to choose what they are — an entertainment provider or a data transport provider. In the market you can’t wear both hats. Like cattle, carriers can’t carry more than one brand in the marketplace on their hide. With the market meltdown of the last 2 weeks that decision point is neigh —

American shoppers went into hiding in September, sticking to buying the bare-bone essentials and leading many retailers to report dismal sales for the month as skittish consumers grappled with the financial meltdown spreading around the globe.

The weak reports on Wednesday — an alarming gauge of consumer behavior since the meltdown began midway through last month — are fueling more worries about the holiday season and the overall economy, since consumer spending accounts for two-thirds of all economic activity.

Given the sharp falloff in sales and customer traffic, many retailers, including Target (TGT), J.C. Penney (JCP), Kohl’s (KSS), Saks (SKS) and Nordstrom (JWN) cut their outlooks as they use aggressive discounts to pull in shell-shocked shoppers.

Just the tip of the iceberg folks. Americans will be buying coats and shoes rather then a new XBox for Johnny. The household budget is going to get looked at too. Why carry premium channels, HD, internet and phone? Well the pitch was relative cost averaging to get all those services in one bundle from a single supplier. Well in a downturn that gets thrown out the window. Absolute cost will reign supreme. Premium channels — gone, HD — gone, basic cable — for many gone. They will probably keep the internet access. They need that for email and the job search. Besides if you think about it, a NetFlix account and TVoIP is a rock bottom entertainment choice.

For the carriers, its crunch time! The first decision they need to make is which are they? If they continue with the entertainment play they risk seeing massive swaths of revenue if not down right user base go right down the drain. Changing brand to a data carrier means you survive but at a much reduced revenue level. But at least you survive. Somebody like DirectTV, I don’t see how they make it if the economy is sour for a long period of time.

Content providers like Sony, MGM, et. al. will be looking longingly at cutting the middleman out finally. Keep that slice for themselves. Traditional broadcast suppliers CBS, NBC, ABC could very well say ‘to hell with the affiliates!’ partner with their production providers, ink a deal with Hulu and go direct with TVoIP. Even niche players like BET, CBN might band together as a channel house and go TVoIP. Bottom line, we are likely to see supply chain collapse in the entertainment industry with the channel providers cut out.

Other than raising rates and applying caps what are the carriers going to do? But it is time to choose.

Linky.

Yes Dear Reader the tax man comes early this year. But then I am not saying it is the Gubmint Revenur that’s taxing you. Its Verizon. They are preparing to apply anywhere from a subpenny to multipenny fee on the third party text messaging that you receive. –

In a move that sets a new and potentially major precedent in the text messaging services market, content and messaging companies are going to have to cough up some dough if they want to deliver their goodies to Verizon Wireless customers.

The nation’s No. 2 carrier has informed partners that it will add a 3-cent fee for every MT (mobile terminated) message processed on its network beginning Nov. 1. MT messages typically include text alerts, interactive voting notifications and SMS search responses.

Verizon hasn’t the guts to come up with the fee themselves to their userbase. So they are going to ‘tax’ the content provider who will then pass on the fee to you, on Verizon ‘One Bill’. But who is fooling who here? The texting consumer still ends up paying. Verizon just wants the cover to say is not them charging the customer when it is.

Look if SMS volume is going up and that requires infrastructure upgrades == $$, then so be it. The customer should pay that and they will. But why not be honest about it? A well placed case and proper background as to the need will usually win over customers so long as it is a appropriate win for both ends of the transaction. But these kind of corporate games are what get Americans mad.

This seemed appropriate. –

[Update] More on the Verizon Tax here. Apparently the text providers did not get any advanced warning either!

Linky.

In what has to be close to the end of the road for the carriers the Supreme Court has refused to review several state level appeals . Another words, lacks merit and most likely is established law. ‘No new ground here, move along…’ —

The Supreme Court dealt the wireless industry a setback by declining to review lower court rulings that found T-Mobile USA Inc.’s arbitration clause in service contracts do not prevent subscribers from lodging class-action lawsuits against the No. 4 mobile-phone carrier.

Opening a new term, the high court also let stand an Illinois appeals court decision affirming class certification of a 48-state early-termination fee class-action lawsuit against Sprint Nextel Corp. As a result, class-action complaints against T-Mobile USA and Sprint Nextel will move forward.

The carriers have 2 choices –

1. Move forward with a full scale deployment of MtM plans as many are now doing as an option. In the same motion killing the need for ETF’s and arbitration and the contracts in which they reside. Or…
2. Take their battle to the Congress thru their K Street minions. Only problem here is Congress has just gotten a big case of whoopa$$ about the bailout bill. I don’t think they will have a stomach for another round of corporate welfare to get beat on anytime soon.

My guess is that in the near term in States where the courts have ruled MtM plans will be brought prominently to the table as user choices.

Linky

LiveStream has in the past been a closed model for acessing live content via the web. Well the have changed the model and updated some aspects of the software –

The world’s leading TV channels

There are two types of channels you can watch on the Livestation player, our partner channels and those added by other Livestation viewers.

Partner channels: available in high quality, our partner channels currently include Al Jazeera English, BBC World News, Bloomberg Television, Deutsche Welle, euronews (English, French, Italian and Spanish), France 24 in French and English, Russia Today, BBC World Service radio and Deutsche Welle radio in German and English.

Add your own channels: Livestation also enables viewers to add any web streams to their own personal Livestation player. A Livestation viewer, Bernard Maltais, created this excellent tutorial. These channels may not have the same picture quality as the Livestation partner channels, and, because they are not being streamed by us, they won’t benefit from the features listed above, but they do offer added personal choice.

User-generated rating & alert system: What’s Hot & Chat

What’s Hot enables you to let others know about the content that interests you, with the click of the mouse, as you watch live TV. When you see or hear something interesting being broadcast on the player, you can hit the What’s Hot button and add your comments. If others are buzzing about the same content, the item will rise to the top of the What’s Hot buzz rankings, enabling everyone to see what is popular and, if they like it, to tune in.

Big deal? Well for LiveStation, its a move in the right direction. But this is just another indication of the shift to TVoIP. When TVoIP reaches critical mass then what? –

• TV broadcast licenses will drop in value. Not a little, but a lot.
• Revenues will shift to the content aggregators/providers.
• There will be a supply chain collapse even in the content aggregators as individual production house can now operate their own channels.
• Content will become more diverse and even further fragmented.
• The longtail theory will finally apply to live video. With the ability to call up episodes of shows long since aired they will have permanence.

Please note that though LiveStation is provided free its is not open source product.

Brave new world coming for the entertainment industry.

Linky

I be cruising through some political sites and ran across a very interesting graphic. It give a breakdown by state of households that are cellular only for communications

What I found interesting is the states where the cellular usage was the highest. Those states along the Canadian border make sense. Maybe even Maine. All because of their size and density. But how do you explain Mississippi having higher usage than Virginia? Or New Hampshire?

Its just a hmmmm.

Pollster has more and it makes for an interesting read on usage patterns regardless of politics.

Amazon is getting ready to shake up the business for the likes of Limelight and Akamai. Using the on demand, pay as you go model, the Amazon CDN service could be a big hit with smaller and independent producers who are currently locked out of CDN services by high entry cost.

Amazon has announced a new content delivery system for customers of its S3 storage service. Available by year-end, the new system will provide high-bandwidth, low-latency data distribution across the globe. The new service will rival Akamai, Limelight, and CDNetworks, the dominant players in the $1bn a year content delivery market.

With its existing cloud computing offerings, Amazon has shown that it’s able to provide versatile, high capacity networked services at affordable prices (although not without occasional hiccups). The central premise of these efforts is that location doesn’t matter; the cloud services are accessed over the Internet, and so the computers they are served from could be located one mile way or a thousand miles for all the difference it makes to cloud applications. (Ars Technica)

A small victory for privacy rights has been won. In a court ruling in the western PA federal DC court the court ruled that a court order was required in for release of geographic location data to the government.

Privacy advocates triumphed over the Bush administration in a legal battle in which a federal court affirmed that wireless location information stored by a mobile-phone carrier is constitutionally protected and that law enforcement officials have to secure a search warrant based on probable cause before accessing such data.

“Cellphone providers store an increasing amount of sensitive data about where you are and when, based on which cell towers your phone uses when making a call. Until now, the government has routinely seized these records without search warrants,” said Kevin Bankston, senior staff attorney for the Electronic Frontier Foundation.

EFF was joined by the American Civil Liberties Union, the ACLU Foundation of Pennsylvania and the Center for Democracy and Technology in an amicus brief urging the U.S. District Court for the Western District of Pennsylvania to uphold a ruling by Magistrate Judge Lisa Pupo Lenihan earlier this year.

$1 bet says the DOJ runs this over to DC 1st Circuit on appeal. But for now such data must be treated like any other phone record request from the government.

Linky

A Verizon tech has been tapping into landlines and placing calls to sex lines. Personally I would not care less except for the fact that the tech is making those calls in the name of the subscriber whose phone he tapped into. –

NEW YORK (CBS) ― A former Verizon technician racked up $220,000 in phone-sex calls by tapping into the land lines of nearly 950 customers, authorities charged on Tuesday.

Joseph Vaccarelli, 45, of Nutley, made approximately 5,000 calls, resulting in 45,000 minutes of call time, Bergen County Prosecutor John L. Molinelli said in a news release.

Vaccarelli placed the calls in about 30 municipalities in Bergen County, according to the release.

Verizon estimated that out of a 40-week period, Vaccarelli spent 15 weeks talking on 900 chat lines, authorities alleged.

Vaccarelli was charged with theft by deception and theft of services.
He is scheduled to be arraigned Wednesday in Central Municipal Court.

The tech actually stole more than $220k of service. He also defrauded Verizon the equivalent of 18 weeks pay. About $22,000 at the loaded labor rate for a lineman these days. If you are willing to hire anybody then this is the kind of crud you get attached to your brand.

Linky.

From Wired –

Pay no attention to rumors that the internet is getting full: the internet can eat 50 eggs.

In fact, over the last 12 months, international net bandwidth in backbone grew 62 percent, while internet traffic grew only 53 percent and filled only 43 percent of the tubes’ capacity at peak times, according to a new report released by bandwidth-monitoring firm TeleGeography.

In short, the internet’s tubes are growing faster than even YouTube videos can fill them, and they’re in no danger of filling up anytime soon.

That’s despite the occasional Chicken Little proclamation from ISPs, pending caps on ‘unlimited’ internet usage and hand-wringing over peer-to-peer file sharing of movies such as Cool Hand Luke.

In the same time period — mid-2007 to mid-2008, Latin America and South Asia both doubled the capacity of their backbones — the net’s fiber-optic equivalent of a highway system.

Wholesale prices for sending and receiving data continue to fall, and with the cheapest prices in North America and Europe, where there’s still more abundant capacity, the Global Internet Geography report found.

Sorry I don’t have a copy of the report at hand. Wired’s intent was to lampoon the rationale of Comcast issuing a bandwidth cap. If taken at face value then the report would certainly seem to do that. But what about last leg loop? That’s were the bandwidth is generally the issue. Based on what I saw in the Wired piece that does not seem to be addressed.

[Point to note: I am not a Comcast fan boy. I think the cap was they wrong thing to do. ]

I would also have a bone to pick that the US is cheaper per Mb of transport. All you have to do is look at French or Korean pricing to know thats a false statement. Anybody have a comp copy of the report? I would love to read it.

Linky

We have noted before issues with both FIOS and uVerse installations. Well here we go again. –

The state Public Service Commission has found that more than half of Verizon FiOS installations inspected on Long Island violated national electric standards, raising potential safety concerns and prompting Verizon to offer customer credits.

Of 92 installations in Nassau, 64 had violations related to grounding, according to an April audit by commission staff. No Suffolk locations were audited then.

In an October 2007 audit there were 62 code violations out of 113 installations inspected in Nassau. Of 19 installations in Suffolk, 12 had similar code violations.

Fiber-optic cables, which Verizon says carry more information and provide a better signal than copper-wire phone lines, are made of glass and do not conduct electricity. The service uses a home’s power source to convert laser-generated light pulses to electrical communications signals.

Ok. The fiber optic does not carry any current. But the various components that are part of the FIOS install DO. So my question would be this one — How does Verizon get away with not having personnel that are licensed electrical contractors? If they are adding new wall outlets that would be a minimum requirement per State law.

Linky.