On the wide ranging and ever changing competitive front, several things have occurred this busy broadband week.
Verizon filed a petition with the FCC alleging that cable companies unduly complicate matters for consumers seeking to switch video providers. There are rules governing what can and what cannot be done when consumers want to switch telephone companies, taking their number with them – Local Number Portability – and so one might call this concept “Video Customer Portability.”
Also this week, activity heated up for Wi-Max, with a number of the cable companies, Intel and Google, seeking to align with Sprint and Clearwire on their on-again-off-again collaboration to build a Wi-Max network. The cable companies have their eye not only on Verizon and AT&T, but also on what offensive/defensive moves the satellite providers may be thinking about.
In this regard, and not to be left behind: rural areas: the US Department of Agriculture’s Rural Utilities Service (RUS) granted a $267 million broadband loan to the appropriately named Open Range Communications, Inc., to bring broadband services to 500 rural communities around the country, serving 6 million people.
Open Range previously signed a deal with satellite voice and data provider Globalstar, and the arrangement contemplates using Globalstar's spectrum to provide “dual mode mobile satellite based and terrestrial wireless Wi-Max services” to these underserved areas.
Echostar successfully bid on 168 E Block licenses in the recently concluded FCC 700 MHz Spectrum Auction, as FCC Chairman Martin’s statement on the auction results from a week or so ago indicates, along with observing the salient fact that we have a complicated mix of potential broadband network providers coming down the pike, which will be good for consumers.
According to an article in Wednesday's Wall Street Journal, Echostar's new spectrum may enable it to deploy broadband in rural areas as well.
The rapidly changing carrier/provider dynamics, in turn, spur some surprising deals in other areas, as on the applications side, as may be inferred from yesterday’s announcement that BitTorrent and Comcast had settled their feud over throttling of peer-to-peer technologies used by consumers to share large files, particularly video files.
Panelists repeatedly emphasized in the FCC’s en banc field hearing on Network Management Practices, held in Boston in late February, that video is driving all sorts of changes on both the network side, where capacity issues loom, and on the applications side, where innovators seek to respond to how businesses and consumers use the Internet.
As FCC Commissioner Michael Copps notes in his statement on the resolution of the BitTorrent/Comcast dispute: “If it had not been for the FCC’s attention to this issue earlier this year, we would not be having the conversation that we are having now among network operators, edge content providers, consumers and government about the best way to implement reasonable network management.”
AT&T and Verizon can’t embrace their newfound Open Network status fast enough. AT&T has scheduled several events at the big Las Vegas wireless trade show (CTIA), and has even created a new website to show the company’s hospitality to both developers and customers.
The new site has a vaguely “green” quality about it, with a background of lush green and sky blue punctuated by some old technology (colorful hot air balloons) and new technology (a stark white wind tower) – but then again, everyone is going green these days.
On the site, consumers are invited to create their own mobile experience, by opening one tab, while a link for developers provides information about how to create and market their own applications.
Meanwhile, Verizon is holding a developers’ conference for its own “Any Application, Any Device” network initiative, which it announced in late November 2007, just prior to the quiet period surrounding the FCC’s 700 MHz wireless spectrum auction, which the FCC concluded on Tuesday.
So let’s put this all together: the FCC’s auction raised $19 billion, significantly above the estimates. FCC Chairman Martin noted as such in a statement about the other day about the auction results. The spectrum will be used by various carriers to build wireless broadband networks; the just announced winners include Verizon and AT&T.
On that score, the FCC today issued an order de-linking the 700 MHz D block from the rest of the licenses in Auction 73, in order that the identities of winners for the other spectrum blocks could be revealed. The FCC also has to decide what to do with the D block, which under rules adopted by the agency last summer, proposed dual use of the spectrum by private broadband users and public safety officials.
The open networks initiatives noted above result from efforts by a number of companies, including Google and Skype, urging changes in the business practices of the major wireless carriers. A Google-led coalition urged the FCC to adopt rules ensuring that spectrum offered in the C Block be subject to open networks requirements provided that bidders met the reserve price for this portion of spectrum.
While the major wireless carriers did not exactly rush to embrace the new rules, there is no doubt that the wireless market – and indeed the consumer electronics market in general – is rapidly evolving, with a number of developments occurring simultaneously. Wireless is poised to follow developments on the wireline side, where the telcos are locked in a war with cable to provide more bandwidth with more services to consumers, forcing the combatants to invest in their infrastructure.
The applications and services sides are innovating as well, driven in part by video sharing and the growing ability of consumers to tailor their online experience. As the sales of laptops and other portable computers show, though, today’s broadband users also want to take their show on the road, and they want the mobile version customized, too – which is what that little tab on the new AT&T site is supposed to help them achieve.
A witness in the FCC's field hearing in Boston last month noted the development on the applications side; while there is considerable talk about investment in the network, there also is investment in new applications that cannot be stifled nor ignored. Both are needed in order for consumers to benefit.
Chairman Martin noted the importance of adequate disclosure for developers - in addition to consumers - in remarks he made at a conference at Stanford Law School earlier this month, whereas most commenters have tended to focus on consumers in discussing disclosure.
In an unexpected move, AOL has agreed to pay $850 million for social networking site Bebo, which appeals to 18 to 34 year olds and features a fair amount of user generated content. It's anybody's guess what this is worth, though people certainly are trying.
If Video Killed the Radio Star – the Buggles nostalgic look at the passing of an era when radio was the dominant medium for mass entertainment – surpassed by television and technological change in the 1960s, one wonders where we might be positioned now.
We cannot know what tectonic shifts in media are underway, given the collision and combination of various business models: it's one thing to pit wireline broadband against cable, with different network architectures and capabilities, and legacy policy goals suited to address the original competition (e.g., the interrelationship of television and cable); but quite another thing to layer other business models on top, such as gathering eyeballs for viewing "pay per click" ads or the like, and know where this is heading.
The Internet’s mass utility, which enables anyone to reach a worldwide audience, surfaced at a congressional hearing earlier this week when the lead singer of the pop band OK Go discussed how a series of off-the-cuff videos became a YouTube sensation, viewed some 31 million times – and spoofed by fans sending their own versions of the bands’ brilliant treadmill routine from all over the world.
(A member of another band pointed me to the video some time ago; it’s one of YouTube’s most viewed, with the comically expressionist “The Evolution of Dance” still topping the charts at 77 million views.)
The occasion for his testimony was a discussion of free speech and Net Neutrality, and whether tomorrows’ users and artists will have the same access they currently have to promote themselves and make their content available to whomever wishes to obtain it, should network operators (or content aggregators) determine they need to exert controls or censor materials they deem inappropriate.
There are many wrinkles to this, as yesterday’s cover of USA Today suggests, with employers limiting access to the wildly popular NCAA tournament due to concerns over bandwidth consumption on their internal networks, while Denver's airport decided to limit access to certain sites when their Wi-Fi network was made available free for travellers in November. Given that the Interent is a network of networks, both public and private, that may be accessed from many locations, there are lots of moving parts to this fascinating puzzle.
Finally, here’s a clip and a quote on the AOL Bebo deal from The Week, invoking the 1990’s “not your father’s Oldsmobile” well-intentioned marketing campaign, which boomeranged and may in fact have turned off the largest potential group for buying a new Olds – those whose parents owned one. As for video, it purportedly had nothing to do with killing off the now-defunct brand, which appears in numerous films, including the recent Oscar Best Picture winner, “No Country for Old Men.”
Sprint, which has had a bit of bad news lately, announced yesterday it will market a phone capable of taking advantage of higher data rates using EV-DO Rev. A technology, essentially allowing customers to access the Internet at something close to DSL speeds while on the go. The announcement adds another layer of complexity to the $99 dollar unlimited wireless voice plans unveiled by all of the major carriers a month or so ago: only Sprint tossed in some data benefits to boot.
The phone is called the Mogul and is made by Taiwan-based handset maker HTC, which is also affiliated with Google's Android project, an open source mobile wireless initiative that has had some impact on the market.
While the lines in this 2.5 Generation area are not so brightly drawn, Sprint's move also offers a good example of continually improving capabilities of terrestrial wireless networks. The EV-DO Rev. A technology is also used by Verizon to allow consumers equipped with USB modems to connnect wirelessly over their laptops wherever the technology is supported.
Think of a large Wi-Fi hotspot without boundaries, and slightly slower data rates. Sprint's move ups the ante on the mobile side, by allowing consumers to access the network using a phone instead of a laptops, though other phones allow Internet access over Wi-Fi networks.
None of the other carriers are standing still. This week Verizon will hold a developers' conference to provide more details about the open network model the company announced last November (with a nod to Google), and AT&T also is looking to add some pizzaz to its applications lineup by reaching out to developers at CTIA's annual trade show in Las Vegas in April.
Meanwhile, the FCC's spectrum auction - "broadband beachfront property" - appears to be coming to a close. The spectrum, returned to public use by broadcasters transitioning their operations from analog to digital format, is expected to be used for wireless broadband deployment.
