It’s always fun to see industry friends face-to-face and last week’s NTCA Southeast Regional Meeting in Savannah, GA was the perfect venue for catching up with folks I hadn’t seen in a while. It was an honor to moderate a tech talk panel on the topic of video services. This video summarizes the opening comments I made and set a baseline for the presentations that followed from Mark Chambers of NRTC and Bob Saunders of Skitter.
Growth was definitely the vibe of this week’s NTCA’s Southeast Regional meeting in Savannah. Operators and vendors provided examples and ideas for how to generate new revenue through the introduction of new products and services that complement the broadband infrastructure. Although one of the panels referenced the idea of “out-of-the-box” thinking, it is clear that operators want to build a bigger box by complement their broadband offering with services that help their customers and result in new revenue.
It’s one thing to talk about or even see pictures of rural America, but it doesn’t compare to experiencing it first hand. Last April at the ACA 2014 Convention, I had a chance to catch up with the lone Representative from the very rural state of Vermont. Interspersed in the above interview with Representative (D-VT) Peter Welch are some images captured from my brief visit to Vermont from a couple weeks ago. The images reinforce Welch’s points about the unique nature of rural America.
The following video interview captures the spirit of the folks who built a new industry decades ago. Most people in the telecom industry are probably aware that the cable industry sprung to life in rural areas that were too isolated to receive off-the-air broadcast signals. No doubt, many have heard about the guy with an appliance shop that was attempting to sell TVs and had to figure out a way to bring the signal from an antenna on top of a mountain to display the wonders of television to prospective customers.
Unfortunately, Viodi won’t be able to cover next week’s Independent Show in Kansas City celebrating the NCTC’s 30th anniversary, but the above video is an example of the many stories that could be told by long-time attendees to that event.
“It’s time to think about the built environment,” said Shannon McDonald, an architect and Assistant Professor at Southern Illinois University in Carbondale, IL. McDonald was referring to the impact that autonomous vehicles will have on the design of streets, buildings and associated infrastructure. She indicates that this is an important and timely discussion to have, as she compares autonomous mobility to the rapid changes to cities and the explosion in suburbs that resulted from the introduction of the car 100 years ago. She is in an expert in that transition, as she literally wrote the book on one aspect; parking and how it changed cities.
Joseph Hui is on a world-changing mission; to help people live a comfortable and renewable lifestyle. This Arizona State University professor wants to help solve big problems, such as access to clean water, climate control, healthy food, information and transportation. Hui’s company, Monarch Power, is his vehicle for tackling these weighty challenges.
At International CES 2014, Monarch demonstrated some relatively low-cost solar power solutions; think less than $1 to $2 per Watt versus $5 per watt for a typical roof-mount system. Monarch takes a system approach to lowering the cost of technology to make it economically practical. As an example, in addition to providing shade, the Monarch window awning, shown in the above video, also generates solar electric power (280W) and heats water.
Click here to view and read more about how to use the hot summer sun to lower energy bills.
Growth was definitely the vibe of this week’s NTCA’s Southeast Regional meeting in Savannah. Operators and vendors provided examples and ideas for how to generate new revenue through the introduction of new products and services that complement the broadband infrastructure. Although one of the panels referenced the idea of “out-of-the-box” thinking, it is clear that operators want to build a bigger box by complement their broadband offering with services that help their customers and result in new revenue.
Video has always been a challenge and some operators and vendors demonstrated some out-of-box thinking in marrying web technologies with local expertise to come up with offerings that provide a win-win for the rural consumer, content providers and the operators’ efforts to promulgate broadband. NeoNova and Skitter discussed and demonstrated their solutions, while Star Communications explained why, even though they already are a provider of CATV and IPTV, they see Managed Broadband TV as a way to expand their video reach.
Local Management and People Are the Key to Making Broadband Relevant
Understanding the unique needs of customers is one of the advantages that local operators have, compared to conglomerates where management decisions are often made thousands of miles from the customer and/or the decisions that are made not tailored to a particular locale. Jimmy Blevins, CEO of SkyLine Membership Corporation provided several examples of how local knowledge can create broadband demand.
He and his staff noticed that people with second homes weren’t signing up for telecommunications’ services and were presumably bringing their wireless devices from their first homes to fulfill their telecommunications’ needs.
As they dug into it, Blevins and his staff found that people still wanted the reliability and speed of a terrestrial network, but they only wanted to pay for the network when they were at their respective get-away homes. SkyLine came up with what they call a “Weekender Plan” that provides a lower cost ($15 for 12 Mb/s solution with options for phone and unlimited long-distance) for those who are at their homes only on the weekends.
Unique Broadband Solution for Students in Low Income Households
Blevins described a unique way to reach low-income households without subsidies or devaluing their existing broadband plans. The local school superintendent had come to Blevins with the challenge of reaching students from low-income households who had been given tablets by the school district, but couldn’t do their home work on them because their families couldn’t afford broadband.
SkyLine and the school district devised a low-cost, monthly broadband plan, whereby SkyLine routes Internet traffic through the School’s Internet connection. This is an off-peak time for the school district, so it doesn’t add to its costs. At the same time, this technique lowers the cost of connecting to the Internet for SkyLine, which they can pass on to the low-income household.
The Video Exchange – A Dream Realized
Local content is a proven driver for broadband and video services. The challenge is producing content on a consistent and ongoing basis. As Jimmy Blevins suggested,
“It’s easy to produce several hours of local TV sports programming each week, but what do you do the rest of the time?”
SkyLine saw this challenge as an opportunity to help not only its own community, but the community of independent operators. SkyLine has developed thevideoexchange.com. In a nutshell, this is exactly the sort of content exchange that has been promoted in various forms on these virtual pages for the past decade. They have done an impressive job with this web portal which allows content producers to upload and sell their content to local channels.
The objective of the video exchange is to help an operator program their local content channel with content that complements what the operator is already producing and airing. The exchange collects the content, stores associated metadata and serves as the clearinghouse between sellers and buyers. With a fee of 15%, it is very affordable.
The fact that it was started by an independent operator to address their long-term need is an indication that they are in this for the long-term. Look for ViodiTV content to be on the site in the near-future.
[Note, there are four more chances to check out one of NTCA’s excellent regional meetings this summer and fall, including next week in Denver. For the full schedule, click here.]
An automobile industry executive and subject matter expert, who wishes to remain anonymous, wrote the article that follows this preface. It is in response to my June 2nd article that speculated on Google’s long-term plans for the autonomous vehicle. This article provides additional insight into the AV market with some excellent references, while having some more fun imagining the type of vehicles we may see in the future.
This article also introduces images from ED Design’sMichael Robinson, a Hall of Fame vehicle designer and leader in “Experiential Design”. He is at the forefront of determining what autonomous vehicles (whether on wheels, rails or wings) will look like and their impact on society. He wants to ensure that, in addition to achieving a safety goal of zero accidents, the autonomous vehicle doesn’t kill the love affair people have had with their cars (check out the presentation he gave to the Passenger Experience Conference in April of this year).
More importantly, he wants the autonomous vehicle to be an extension of the future digital home; an environment that stimulates emotions and thoughts and not one that is simply a mobile couch potato transporter. As he points out, removing the steering wheel changes everything as far as vehicle design and he even suggests a scenario where regulators outlaw steering wheels and driver-less cars are mandatory in 2040 (coincidentally, the same year as my story takes place).
It is important for broadband providers to stay abreast of the direction of the AV market and the thinking of visionaries like Robinson and the anonymous author of the following article, as this mobile Internet of Things, known as autonomous vehicles, will have an impact on broadband networks at some level. Broadband providers will either find new opportunities in this arena or let the Googles of the world grab the opportunity.
The Autonomous Vehicle and What It Means by Anonymous Contributor from the Automobile Industry
Ever since the Google Car made its debut in May, we have been inundated with articles on the autonomous vehicle (AV), for good or for bad.
The fact of the matter is that the AV is here to stay. This is most definitely confirmed by Carlos Ghosn in his address to the French Automobile Club on Tuesday, June 3. Mr. Ghosn lauded the UN’s accomplishment of successfully pushing through an amendment to Article 8 of the 1968 Convention on Road Traffic which allows for AV driving if, and only if, AV “systems can be overridden or switched off by the driver.” In his address he stated that “the problem isn’t technology, it’s legislation, and the whole question of responsibility that goes with these cars moving around … and especially who is responsible once there is no longer anyone inside.”
Knowing that the AV is not going away, governments have begun addressing the AV legal framework, such as California in the United States. More recently, UK Science Minister David Willets has called for a change in UK road laws to accommodate the AV. Therefore, if governments are using monetary resources to develop legal frameworks, then the AV is not a passing fad, but a paradigm shift in the way we will live and view transportation for the next one-hundred years.
With that said, what the AV means to our way of life is very simple. The automobile will no longer be viewed as a status symbol because most people will not own automobiles. Instead, the AV will be looked at as a service. We will reserve our AVs through reservation service providers based on the litmus test of Time, Place, and Occasion (TPO). For example, I have made a short list of AVs which could be available based on a TPO for Yokohama, Japan:
No Thrills (Basic AV to get you to/from Points A and B. Has reclining sofa chairs and relaxing music and images so you can sleep well during the commute. Imagine going to work in an Enya video.)
Shopping Mall (Large Size AV with security compartments for valuables. Great for people who enjoy shopping at different stores but who don’t want the worry of getting anything stolen.)
Family Trip (For families who want to go somewhere for a weekend or holiday. Has essentials for short trips, such as refrigerator, food storage, Internet, DVD, and Radio.)
Work Commute (For people working during their commute. Has all the desk essentials, TV Conferencing Equipment, plus coffee maker, tea pot, toaster, and breakfast, lunch, or dinner foods)
Business Meeting (Same as Work Commute but a larger size AV arranged in boardroom style)
Car Pool (Same as Work Commute but a larger size AV so people have room to work and not disturb one another. Great for people working in the same office building or business area.)
Tea Time (The tea time AV could come in three sizes: S, M, L. It would be like a restaurant booth equipped with all the tea time essentials, such as water, pot, cakes, sandwiches, scones, and a variety of tea and coffee. For those traveling in Yokohama’s China Town, it could be equipped for Chinese tea time.)
Game Center (Japanese love to play video games. This AV could come in three sizes: S, M, L)
Karaoke Kar (A Karaoke AV complete with its own Karaoke system and beverages. For those at the legal drinking age, it would come with alcohol.)
And for the #1 Japanese AV……
LOVE MOTEL (Yep, You got it! A Japanese-style love hotel on wheels. Equipped with a waterbed and all the love hotel essentials. Need I say More.)
On May 29th, House Commerce Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) wrote to Federal Communications Commission Chairman Tom Wheeler to streamline the approval process for upgrading existing wireless facilities. The letter asks Mr. Wheeler for clarification of Section 6409(a) – the spectrum provisions of the Middle Class Tax Relief and Job Creation Act of 2012. That section was intended to speed the approval of eligible requests for new wireless broadband facilities.
“We urge you to take swift action to clarify the terms of Section 6409(a) consistent with the intent of the statute to deliver the benefits of wireless broadband access to all Americans. To ensure that 6409(a) achieves its goal of streamlining the approval of eligible facilities requests the commission should adopt rules that provide consistency for applicants and reviewing authorities alike.”
Note: Section 6409(a) of the aforementioned act states that “a State or local government may not deny, and shall approve, any eligible facilities request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station.”
The two congressional leaders also expressed the urgency for the commission to identify ways to foster broadband infrastructure deployment.
“Facilitating both the deployment of small cells for targeted capacity and the use of temporary towers for short, sharp spikes in usage are part and parcel to meeting national broadband goals. Both are important tools for providing the robust service upon which consumers, businesses, and public safety rely.”
We think the Congressmen are right on the mark with their requests. New FCC rules and procedures are urgently needed to get wireless broadband deployed in more of the US, especially in rural areas that are currently un-served or under-served.
Beware of the Unseen Competitor was a title of an article written many years ago that warned broadband operators of the rise of competitors from completely different market sectors. Of course, it is the Internet and the intelligence of the things that helps turn products into mere features and brings in competition from seemingly disparate industries. In the Korner below, there is an example of this sort of disruptive development that could signal a revolution in the transport industry.
On May 15th the FCC Commissioners narrowly voted to approve a framework for rules that would create an Internet fast lane, while trying to patch up the loopholes that would make that fast lane possible. The proposal from FCC Chairman Tom Wheeler would ban broadband providers from blocking or slowing down websites, but leaves the door open for them to strike deals with content companies for preferential treatment, or fast lanes to customers.
Click here to read the rest of Weissberger’s article and add to the lively discussion that follows.
CBO (Community Broadband Operator) might be a better term to describe operators traditionally described as CATV (Community Antenna TeleVision). The vision of Steve Weed, CEO of Wave Broadband, and his team has become reality as they now have more broadband customers than video subscribers. With that context, he looks forward to the day, in the not-too-distance future, when a new form of Over-the-Top video provider – a virtual MSOs (Multichannel System Operators) – ride over Wave Broadband pipes, giving consumers more choice in video packages and bringing more value to the broadband connection.
“All the intelligence and all the value is moving into software in the cloud,” said Andy Randall, GM Networking Business Unit & SVP Corp Development of Metaswitch. Randall talks about the transition to using commodity hardware with software defining how that hardware is used. Ultimately, a software-based approach will allow for operators to be more nimble in responding to customer and market demands.
For quite some time, Cisco and Qualcomm have used the term Internet of Everything (IoE) to describe what almost everyone else refers to as the Internet of Things (IoT). McKinsey Global Institute’s Disruptive Technologies report calls out the Internet of Things (IoT) as a top disruptive technology trend that will have an impact of as much as $6 Trillion on the world economy by 2025 with 50 billion connected devices!
TiE Silicon Valley President Venk Shukla kicked off TiECon (The Indus Entrepreneurs annual conference) by stating that “wealth creation through entrepreneurship” was TiE’s principal mission (or reason for being). Also, that TiE was “deeply ingrained in Silicon Valley” through its members (over 11,000 from over 50 countries) which are at start-ups, established companies, VCs and private equity firms. The surprising announcement at TiECon is that the U.S. Dept of Commerce and TiE have entered a partnership to promote TiE U.S. member companies products and/or services that are sold abroad.
As simple and as safe as a car combined with the benefits of a motorcycle is what LIT Motors promises with its C-1 electric vehicle. With a projected range of almost 200 miles, a top speed of over 100 miles per hour and anticipated pricing in the mid-20 thousands (before tax credits), the C-1 (working name) has potential to be a game-changer for transportation in urban areas.
The real revolution, however, may be in the way this company has done so much to turn one man’s vision into reality a relatively small investment (measured in the millions) and short amount of time. A handful of people created the prototype on display at CES. They are set up more as a Web 2.0 company, than an automobile company, as evidenced by their use of crowd-funding (for their $6,000, electric cargo scooter,Kubo), use of social media and direct relationship with the end customers.
And although they still have to set up manufacturing for mass-production, their relatively small investment gives them the flexibility to try new business models (e.g. think licensing, maybe open sourcing, etc.) that allow others to manufacturer and even market their vehicle designs. The interesting thing is that a brand that would license such a vehicle might not even be from the automobile space.
Comcast had a series of impressive demonstrations at the cable show. One presentation dealt with Comcast’s new techniques for troubleshooting and predicting cable plant issues, which has improved efficiency for their customer service and given a better experience to their customers. What they are doing in this regard would definitely benefit other cable operators and would be an obvious efficiency they could bring to a Time-Warner merger.
Along those lines, Comcast showed the near-future with enhanced software apps for its X1 Operating System. One such app will allow customers to do things such as easily limit Internet viewing by parameters, such as time, family member and device within and outside the home (via Xfinity hotspots, for instance). Although similar to services already included in retail routers, Comcast has the advantage of being able present these options via an easy-to-use interface on the TV screen.
One current sticky point that should be resolved (pun intended) is that Open DNS (a freemium service that allows a customer to filter sites going to their broadband router and home network) doesn’t currently work with the latest X1 Cable Modems from Comcast. This is a real disappointment, as this author found Comcast’s integrated wireless modem to provide better coverage than his existing wireless router.
Figuring out the issue and the solution wasn’t trivial and required significant time on the Internet and then a call to Comcast Customer Support to disable their wireless router. A software selection, allowing the customer to choose which DNS the broadband router points to, would be probably the best for customer and Comcast (reduced customer support).
Based on conversations with various Comcast staff, this issue is an oversight and doesn’t appear to be an intentional effort to thwart a potentially competitive feature from another service. To get in front of this issue, it would be wise for Comcast to provide an easy way for customers to choose their DNS service (web filtering experience). They should also figure out how to create such a setting without disrupting their plan to create a network of home WiFi hot spots.[/dropshadowbox]
Is it a Revolution or More of the Same
The comments from the richest hip-hop personality, at least for now, were sincere and it was clear that he knows he has to work to earn the distribution eyeballs of cable operators with his relatively new TV network, Revolt TV. Sean Combs sees an opportunity to remake the music video experience for a new generation. He said the reason he launched Revolt TV is that, “Music was homeless”. His intent is to build a worldwide brand. It is clear that Combs is a master of cross-channel promotions (brilliant move appearing in the Fiat commercial with his Revolt brand in the background – kind of ironic as well, since his former girlfriend also was a Fiat spokesperson).
Although it is more than a linear TV network, it seems like it will be a challenge to build a brand that reaches today’s teenagers who are growing up on YouTube and selfies (e.g. Instragram, Vince, Snapchat, etc.). In my informal poll of four teenage boys, only one had heard of Revolt TV (and he hadn’t seen it). In today’s day and age with media everywhere, it is a huge challenge to replicate the disruptive path of MTV and its, “I want my MTV campaign,” which was as much as driving new cable subscribers to the distributors as it was brand awareness for the channel. Still, Combs is a smart guy who is savvy enough to adjust to or create the market.
Freedom to be Creative
Matthew Wiener, the successful Executive Producer of AMC’s hit show, Mad Men, provided insight as to why we are in TV’s Golden Age, with respect to creativity. He echoed what we have heard about local content; that is, people are willing to work for less, if they can realize their creative vision. Cable networks allow this freedom and, as pointed out in a recent Wall Street Journal article, are changing the way broadcast TV develops and airs their content.
Tap a WiFi Hopspot
What a great and somewhat obvious idea; a multitap that features an integrated WiFi hot spot. An integrated DOCSIS modem creates a broadband back-haul link and DC power is supplied from the distribution cable. A representative from the South Korea-based Net Wave, Co. Ltd, suggested this patented device could be had for approximately $500 (although a web search suggests prices closer to $800).
Although the price of this is expensive compared to a traditional passive, multitap, it is a relatively inexpensive way to fill-in WiFi dead zones (e.g. for those areas where customers opt-out of the cable-supplied home WiFi hot spot, as noted above with the Open DNS issue). It could also provide opportunities for new business models. For example, it isn’t too hard to imagine this sort of thing being adopted by cable operators to offer a radically different service offering, such as a low-cost, drop-free, WiFi broadband-only service to low-income households.
4K, 4K, 4K
4K displays were in multiple booths. Surprisingly, I ran into at least one industry executive whose first 4K viewing experience of these lifelike displays was at this Cable Show. 4K is coming on fast as there were multiple booths displaying cable set-tops that will soon (year-end?) support 4K.
Evidence of the growth of UHD TV is found in a new report from research firm IHS Technology which estimates that worldwide, “UHD TV panel shipments amounted to 1.1 million units in March, nearly a threefold increase from 384,300 units a month earlier in February.”
Stay tuned for exclusive ViodiTV interviews from the show, including:
Interview with Viamedia on their approach to programmatic advertising buying
Home monitoring and security in a box
Demonstration of a WiFi transfer of data of nearly 2 Gb/s
An interesting app that points to the evolution of cable operators from broadband providers to a broadband ecosystem.
On May 15th the FCC Commissioners narrowly voted to approve a framework for rules that would create an Internet fast lane, while trying to patch up the loopholes that would make that fast lane possible.
The proposal from FCC Chairman Tom Wheeler would ban broadband providers from blocking or slowing down websites, but leaves the door open for them to strike deals with content companies for preferential treatment, or fast lanes to customers. The Democrat-majority FCC voted 3-2 along party lines to open the proposal to public comment for 120 days, with an eye toward voting on final rules later this year. However, the timing of actual rules will depend on what the agency decides to do after the four-month comment period expires.
Frankly, we don’t understand why there are objections for content providers and consumers paying more for higher speed delivery of broadband Internet content. Doesn’t every ISP charge more for higher speed Internet access? Don’t pay TV providers charge more for premium content with tiered service offerings? And an extra charge for HBO, Showtime, STARZ, Cinemax, etc?
The FCC is proposing that it should use the authority that it has under Section 706 of the 1996 Telecommunications Act to regulate net neutrality, which leaves the rules open to the possibility of “paid prioritization” of Internet traffic. While FCC Chairman Tom Wheeler said that those rules don’t allow paid prioritization and is vehemently against allowing any bifurcation of the Internet, it’s also something that the agency can’t enforce if the ISPs offer a creative legal challenge to its no-blocking rules or the wording of the eventual net neutrality rules.
“The potential that there would be some kind of a fast lane has many concerned,” Wheeler said. “I don’t like the idea and I will work to see that does not happen. We specifically ask whether we can and how to prevent an internet fast lane.”
While broadband providers like Comcast, Verizon and AT&T are firmly against stronger regulatory oversight of the industry—a possibility that the commission opened up for comment—they have indicated that Mr. Wheeler’s proposal as it stands is something they could live with.
The content providers disagree vehemently. Google, Facebook, Amazon.com, and many web content startups are vehemently opposed to any arrangements that allows broadband providers to charge content companies extra for preferential treatment.
Netflix, whose streaming service is responsible for a substantial share of overall Internet traffic, said it is “concerned that the proposed approach could legalize discrimination” in how broadband providers treat Web traffic, “harming innovation and punishing U.S. consumers.” The statement added, “Netflix is not interested in a fast lane” on the Internet.
Another key issue is whether the FCC should reclassify broadband as a public utility service that’s regulated. Currently, Internet Service Providers (ISPs) are classified as information services, which means the FCC cannot regulate them as it would landline phones which are considered telecommunication utilities and under the FCC’s purview. Reclassifying ISPs as utilities (like common carrier telephone services) would potentially give the FCC far greater control over ISPs and, potentially, help the FCC ensure an open Internet.
The problem with defining broadband (not including mobile Internet access) differently than land-based common carriers, which are governed by Title II in the original 1934 U.S. Telecommunications Act, is that the FCC doesn’t have the right to regulate broadband or truly protect net neutrality.
When the FCC sought to censure Verizon’s efforts to manage its own Internet traffic, the D.C. Court of Appeals found it had overstepped its bounds and struck down the net neutrality rules the FCC essentially built as a bulwark against Internet access abuse. The rules it was applying to Verizon’s Internet services were not covered under Section 706 of the 1996 Telecommunications Act, which governed the FCC’s oversight of broadband.
Section 706 of the 1996 Telecommunications Act didn’t give the FCC that kind of power. Redefining broadband Internet services a utility would allow the FCC to bring to bear all the rules and power found in Title II of the 1934 Telecommunications act.
“The fact is that reclassification doesn’t mean any additional regulation at all,” said Free Press Research Director S. Derek Turner who added that industries like wireless and carrier Ethernet currently classified under Title II “are thriving.” So what’s the problem?
Net neutrality proponents believe officially designating broadband as a utility to be regulated is the only way to ensure an open Internet. “It is exactly what the bulk of activists are supporting, as the recent court decision made it clear that it is the only way in which true net neutrality regulations can be applied,” said David Segal, executive director of Demand Progress.
Some would like the whole Internet designated a public utility. “The Internet is a public utility and the FCC must regulate Internet providers as common carriers. Anything short of undoing the George W. Bush-era deregulation of broadband industry is fake net neutrality, and we’re not falling for it this time,” said Becky Bond, Political Director at CREDO Mobile.
“Tom Wheeler spoke passionately about the open Internet, but his rousing rhetoric doesn’t match the reality of his proposal. The only way to accomplish the chairman’s goals is to reclassify Internet service providers as common carriers,” Craig Aaron, CEO of the open-media advocacy group Free Press said.
Broadband (wire-line) providers, though, say reclassification would be devastating for their industry. Former FCC Chairman Michael Powell (now the CEO of National Cable and Telecommunications Association) said: “Treating broadband as a utility-like Title II service would reverse years of settled precedent, dry up investment in broadband deployment and network upgrades, and result in protracted litigation and marketplace uncertainty. We (the NCTA) will continue to reiterate our unwavering opposition to any proposals that attempt to reclassify broadband services under the heavy-handed regulatory yoke of Title II.”
The FCC’s proposal is open to months of debate before a final document is voted on at the end of this year. Whether the Title II reclassification concept survives that long is open to conjecture and debate. Mr. Wheeler emphasized that his proposal is only a draft, and that he is open to changing it before a final vote later this year.
Mr. Wheeler has repeatedly vowed to use all tools at his disposal to prevent Internet providers from striking deals that would shut out startups and smaller companies that can’t afford to pay for preferential treatment. He said consumers pay for a specific amount of bandwidth when they subscribe to broadband Internet access, and that the commission won’t allow broadband providers to throttle that connection or limit how consumers use it.
“The potential for there to be some kind of ‘fast lane’ available to only a few has many people concerned. Personally, I don’t like the idea that the Internet could become divided into have’s and have-nots,'” Mr. Wheeler said. “I will work to see that doesn’t happen.”
“There is one Internet. It must be fast, it must be robust, and it must be open,” Mr. Wheeler added. “The prospect of a gatekeeper choosing winners and losers on the Internet is unacceptable.”
That remains to be seen. This is going to be one heck of a balancing act for the FCC. For sure, they won’t be able to satisfy all the stakeholders in the broadband Internet (content providers, ISPs, consumers, public interest/ consumer advocate groups, etc).
We’ll update you with our perspective, comment and analysis as this controversial proposal and ultimate ruling progresses. We think it will be a “battle royal.”
Here’s how to submit a comment to the FCC:
[Editor’s note: Mr. South’s first article provided a brief history of AT&T as as a regulated monopoly and the forces that drove to the 1984 break-up of “Ma Bell”. Part 2 examines the aftermath of the break-up, particularly its impact on telecommunication services to rural areas.]
AT&T was immediately thrown into a competitive world, having to formally “interconnect” with its previous corporate subsidiaries and others. The Bell Operating companies would continue their local regulated monopoly services with all the requirements (Carrier of Last Resort, etc.) associated with that position. But the handwriting was on the wall…..the word of the day was competition and even the individual Regional Bell Companies soon looked at the other regions (and everyone else in the marketplace) as competitors.
Bottom line; the telecommunications world was turned upside down. Local Access and Tandem Areas (LATAs) were designed….“Access Charges” was added to the industry glossary of terms… Organizations were created, such as NECA, ECSA, etc., to assist in the management of interconnecting carriers. The complexity of this event was compounded due to the number of other participating carriers & companies, such as the 1,000+ non-Bell independent and cooperative exchange companies, the new long-distance carriers, wireless providers and the equipment manufacturers.
This far-reaching action was another step in what was an obvious movement to a competitive operating environment for the entire telecommunications landscape. Now that the Bell companies could control their own destiny, they began to venture into other areas and test their freedoms; i.e., they could not offer competitive services in their territory; but they could offer competitive services outside their individual region territory. Wireless or cellular service was of particular interest and the Baby Bell companies were successful in grasping a major foothold in that arena.
What was a closed marketplace with a limited number of participants was changed into a semi-open market with many providers (telcos, long distance companies, CATV, wireless, internet providers, satellite, etc.) and you could not tell a player without a scorecard…and even then it was tricky. The convergence of services over the facilities provided by some companies compounded the complexity; Digital Subscriber Line (DSL) internet access service over the voice grade copper facilities of telcos; Voice Over Internet Protocol (VOIP) provided by internet service providers, etc.
It was becoming abundantly clear that there would be some winners and some losers. What happened next were a significant number of mergers and acquisitions…each was an attempt to gain a stronger position in the market by increasing its footprint and enhancing its product line offering…. Even the very large Regional Bell companies were not excluded from consolidations.
The marketplace was partly competitive and partly regulated….The lines of demarcation were very fuzzy. To say it was chaotic would be an understatement. Regulators were constantly changing rules; putting out fires with little long-term direction for planning purposes. It was evident that something had to be done to protect the American consumers and ensure that all consumers would realize the numerous benefits from this technological explosion.
Congress was compelled to step in to attempt to crystallize the telecommunications landscape for everyone; regulators, companies, consumers. The effort would prove to be herculean and consumed lengthy discussions, hearings, comments, arguments and positions from all interested parties. After various draft bills, congress produced “The Telecommunications Act of 1996” which was signed into law by the President. The stated objective of the law was
”To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies”.
The message was crystal clear; advanced services were critical to the economic growth of America and that competition was the vehicle to deliver those benefits. When before the signals were cloudy and piecemeal, America was now focused on a direction that offers the greatest benefit to all consumers. This very significant congressional action sent the message that all future decisions would be measured against what is best for all American consumers.
This national debate went far beyond just Plain Old Telephone Service (POTS). Historical discussions had dealt with, “Who was going to provide POTS to a certain community.” Now it is, “What provider can offer me with all my telecommunications, Internet & broadband services….today”. This new debate further continued on with, “What provider can provide the required services to assist my community with education, health care, security, etc.”
It will not only be based on who is the provider (telcos, ISPs, CATV operators, satellite providers, private companies, etc.), how it is financed (private or public funded); or who manages the operation., but it will be decided on the ability to offer the most advanced services at the best prices in the timeliest manner to serve the consumer and the community.
If one company is not in a position to offer satisfactory responses to these issues for the community and its consumers; then these services will be provided by an organization(s) that step forward and is ready, willing and capable of the task(s).
Economic development and Consumer interests are the prime movers in these current debates……
The entire industry became under a magnifying glass; externally by media interests, Congress, regulators, consumer groups and policy makers. Internally, industry players studied the market for more self-serving reasons.
Reports indicate that approximately 100 million Americans do not have broadband in their home. Internationally, America has fallen behind other countries in the deployment of broadband services. Domestically, consumers continue to demand advanced services/faster speeds; educators want better service (especially in rural areas); health care providers indicate that enhanced services could improve health care (especially in rural areas). These type of reports are getting significant media attention and many policy makers continue to express concern.
Because Congress, the FCC, the NTIA and state agencies began to place a focus on telecommunications and advanced services, various activities were initiated to investigate and analyze the current state of affairs. Various studies were undertaken….from a National Broadband Mapping project… to a study of where we are today and what is needed for the future.
In 2009, Congress charged the FCC with developing a National Broadband Plan to ensure every American has access to broadband capability. The FCC conducted a hearing in November, 2009 to discuss specifically identified “barriers” that exist in formulating a new national broadband policy plan. One major barrier was the Universal Service Fund. The FCC Task Force believed that …
“the fund should also be used to help subsidize the cost of deploying broadband in rural areas.”
A second barrier that was identified by the FCC Task Force was….
“the fact that broadband service providers tend to favor higher-income regions in more populated areas over low-income areas. The data suggests that many low-income people in these parts of the country are offered only one broadband service option. The data also suggests that these consumers who have only one option tend to pay higher prices for service.
What this means is that lower-income people, who have less disposable income, are often the ones forced to pay higher prices, while people who have more money pay lower prices for service.
Deployments in rural areas are often affected by the high cost of building infrastructure and providing service. The task force noted that “middle mile” costs are almost three times higher than general network operations costs. This high cost is often a serious barrier to rural broadband deployments, the group said.”
The FCC Task Force conducted an extensive analysis and investigation into what would be required to implement a national broadband policy that would provide high-speed internet access to every American.
The results of the FCC efforts were documented in a comprehensive report unveiled on March 16, 2010 entitled:
Government can influence the broadband ecosystem in four ways:
Design policies to ensure robust competition and, as a result maximize consumer welfare, innovation and investment.
Ensure efficient allocation and management of assets government controls or influences, such as spectrum, poles, and rights-of-way, to encourage network upgrades and competitive entry.
Reform current universal service mechanisms to support deployment of broadband and voice in high-cost areas; and ensure that low-income Americans can afford broadband; and in addition, support efforts to boost adoption and utilization.
Reform laws, policies, standards and incentives to maximize the benefits of broadband in sectors government influences significantly, such as public education, health care and government operations.
The plan also recommended that the country adopt the following six Goals:
At least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second by the year 2020.
The United States should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation.
Every American should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose.
Every American community should have affordable access to at least one gigabit per second broadband service to anchor institutions such as schools, hospitals, and government buildings.
To ensure the safety of the American people, every first responder should have access to a nationwide, wireless, interoperable broadband public safety network.
To ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption.
The release of the National Broadband Plan (NBP) received significant media attention and great anticipation from the entire telecommunications, Internet & broadband segments of the marketplace. Market participants reviewed all their plans and strategies to measure any impacts on their operations. Existing broadband providers studied their markets to make investment decisions on the most attractive locations to allocate resources; i.e., where they need to move quickly and where they could delay deployment. These decisions could be based on a variety of factors such as density, cost to install facilities, current competitors in the area and where it was believed they had a sense of control over that market area.
New entrants in the market conducted similar analysis; but they were starting from a position of limited information; they did have the Broadband Mapping information, but lacked consumer demand and cost data. But they did believe that time was critical….”first in the market, and so on…”.
Some encouraging good news was that some necessary financing capital was available. The President had made universal broadband access a key goal for America. Economic Stimulus money was available in the form of grants and loans to approved providers. Numerous applications were prepared and submitted for approval from existing providers and new entrants.
The other good news for the American consumer was that individual communities, in the form of local municipal or county organizations, became well aware of the importance of advanced services to their constituency and its economic growth. In the past, when consumers complained about the lack of available services in the area, local government officials believed that their hands were tied. Now, they saw what was taking place in other parts of the country and around the world and said…Why not us and why not here.
This community awakening was contagious and many community activists and organizers (including the general public, businesses, schools, and medical institutions) joined this very active movement. The battle cry was…”What can we do to secure advanced services for our community”. They did not want their taxpaying public consumers to become “second class citizens” and in certain situations the communities had run out of patience in being last in line for advanced services from competitors providing service in the area. Municipal and county officials believed that they were doing their job and this is one of the reasons why their constituency trusted them with the responsibility to protect their interests.
The municipalities and / or counties established organizations, reviewed their existing situations, analyzed alternatives, met with constituencies, sought voter approval (if warranted), developed a strategy, prepared documentation, filed paperwork, sought financial assistance (grants or loans from federal government), established contracts with consultants and construction companies….and scheduled installation.
Of course, this activity met with some opposition from competitors in the area; who believed that they had the right to that area. The answer to that issue is simple….If the perceived competitors had been providing acceptable level of advanced services in the area; it would not have been necessary for the municipality or county to take that action. The fact is that a lot of existing companies have assumed “ownership” of the area and they believed that these consumers were obligated to wait until the competitor was ready to upgrade facilities in the area to provided advanced or broadband service.
Well, contrary to their opinion, today’s consumers just do not want to wait indefinitely….and educators, health care administrators, business operators, police forces and economic development councils do not want to wait at all….especially in Rural America !
Gene R. South Sr. is a telecommunications and broadband professional with 45 years of experience including positions as EVP for Panhandle Telephone Cooperative in Guymon, OK; CEO / GM of Lakedale Communications in Annandale, MN and currently the V.P. & Director of Governmental Affairs for Lake Communications in Two Harbors, MN.* Mr. South served as Chairman of the Board of USTA, RTFC and MART; he also has held Board memberships for OPASTCO and MTA. In addition, he has testified before congress and state legislatures.
*Lake Communications, a private company, is building and operating Lake Connections for Lake County. Lake Connections is a local fiber-optic broadband provider owned by Lake County and formed to bring High-Speed Internet, Digital TV, and Voice services to Lake County and Eastern St. Louis County in northeastern Minnesota starting in 2014.
That a 55 person company with probably no physical infrastructure can have the approximate market capitalization of one of the Baby Bells (an outdated term, no doubt) is another indicator of our new hyper-productive era where a small team can do what would have taken thousands in years past.
Certainly the disruption of apps, like WhatsApp, point to the challenges the FCC faces as it tries to figure out the role of regulation. What are some of the larger short-term and long-term implications of their recent IP Transition Order? What are the potential opportunities and dangers for small carriers? These are just some of the questions I am going to ask panelists Paul Feldman, Attorney, Fletcher, Heald & Hildreth and Sam Harlan, VP-Engineering at CHR Solutions on this Friday’s Team Lightbulb webinar The FCC’s IP Transition Order: What Do the Trials Mean?It will be an interactive discussion, but feel free to send me questions ahead of time.
Was it fate or just a coincidence that one of the first tests of TV White Space (TVWS) broadband would also be at the location where regularly scheduled radio broadcasting began? That Charles D. Herrold opened the Herrold College of Wireless and Engineering and later began broadcasting at 50 West San Fernando in San José was a surprise to Adaptrum’s Darrin Mylet. Herrold’s launch of his radio station in 1909 was a precursor to an explosion in radio transmitters, which led to interference and, eventually, government rules for allocating and the use of spectrum.
Click here to read more about this unlicensed technology that could be a good tool for getting broadband to the nooks and crannies for both rural and urban applications.
“You really should have a policy that deals with all aspects of technology,” said Megan Anderson an attorney with Gray, Plant and Mooty. The challenge for employers is keeping workplace rules in step with rapid technology changes. In this interview, Anderson provides useful insight into some of the challenges that technologies, such as social media and BYOD (Bring Your Own Device), present to employers. Activities that seem harmless, such as social media endorsements or using personal devices for work tasks, can create situations that violate employment or privacy laws.
Relaxation television is how Tim Larson, Vice President of Distribution of eScapes Network, describes their service. eScapes Network provides a backdrop of high-definition videos and background music. With operators receiving 2 minutes of the 4 minutes per hour of advertising time and the ability to program 15 minute segments with local sights and sounds, eScapes has an interesting local content angle.
The recently released YuMe/Interpret Ad Effectiveness Studies suggests that the connected viewer is the engaged viewer. For instance, in one of their studies, “Survey respondents who recalled ads on connected platforms were significantly more likely to ‘definitely consider’ future purchase (lifts of 82% for smart TV / Blu-ray and 50% for PS3 app) and “definitely recommend” (lifts of 45% and 11%, respectively) the brand.” This points to both the importance of multi-screen for creating a more engaging experience for those who choose to engage, as well as an environment that provides more accurate measurements that traditional broadcast approaches.
Measuring what one watches is the objective of eyetech Digital Systems with its developer kits it has recently begun shipping. These developer kits will bring the technology used in high-end consumer study groups to the masses by tracking where the eye is looking via Smart TVs. This could be a boon to advertisers, as they could better understand the effectiveness of their commercials (e.g. do people turn away when the commerical appears). It could also have implications for the user interface, making it more accessible as well as have the potential to dynamically change scenes based on what a person is watching.
One of the trends of International CES 2014 is the number of products created by small teams or, in the case of the above video, one person. Foretold by the likes of Tom Peters many years ago, entrepreneurs are assembling dynamic teams to make their visions reality with little capital and little formal organizational structure.
In the case of professional drummer Prescott Ellison, the problem he was trying to solve was how to maintain a consistent workout while on the road. As he points out, not all the hotels where he stays are accommodating to his workout routine. To solve this problem, he invented the body bench.
His is a story of determination of transforming his vision to reality and helping others become fit, like he is. His initiative is inspirational and a model for entrepreneurs everywhere.
In his January 8th speech at the Computer History Musuem (CHM), F.C.C. Chairman Tom Wheeler said we were in the midst of a transition to a “4th Generation Network” which had an “Open Internet” as it’s foundation. The concept of net neutrality– where there are no privileges or added costs or special deals for high bandwidth media/content delivery companies- was clearly implied.
”Not unlike how the radio stations of the 1920s needed to be protected from technical interference, today’s entrepreneurs need to have a fair opportunity to reach their customers over the biggest technological channel of them all—the Internet,” Wheeler said during his prepared remarks at the CHM.
”No one in Silicon Valley needs to be convinced of the importance for innovation and overall societal welfare of our broadband networks. Keeping them open for any and all lawful uses is a major policy imperative. It is essential in the public interest of our
country that the government, and by government I mean the FCC, have the power to oversee the broadband networks and to intervene to forestall their exploitation by unacceptable acts,” Wheeler added.
That Open Internet policy is now in jeopardy. On January 14th a federal appeals court tossed out the FCC’s Open Internet rules, permitting Internet Service Providers (ISPs) to make deals with streaming media and web content companies (Netflix, Amazon, Apple, or Google) for faster content delivery at a higher price.
The US Court of Appeals for the DC Circuit ruling stated that the FCC’ s Open Internet Order is invalid and that the regulator had overstepped its authority when (in 2010) it classified broadband as an ‘information service,’ not a ‘telecommunications service.’ Having done that, the FCC could not then impose its “anti-discrimination” and “anti-blocking” rules on ISPs, the court ruling stated.
The court stated: “Even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”
The FCC had tried to prevent those deals, saying they would give large, rich content/media companies an unfair edge in reaching consumers. But since the Internet is not considered a utility under federal law, the court said, it is not subject to regulations banning such arrangements. That paves the way for ISPs like Verizon to cut a deal with Netflix, Amazon or other content providers for higher speed Internet delivery services.
For consumers, the ruling could usher in an era of tiered Internet service, in which they get some content at full speed while other websites appear slower because their owners chose not to pay up.
According to the NY Times broadband Internet providers (like Verizon) that have spent billions of dollars building their networks, said the ruling confirmed their right to manage their networks as they saw fit.
“Verizon has been and remains committed to the open Internet, which provides consumers with competitive choices and unblocked access to lawful websites and content when, where and how they want,” the company said in a statement. “This will not change in light of the court’s decision.”
Much of the argument over net neutrality has been theoretical. Verizon noted in its court papers that the F.C.C. documented only four examples over six years of purported blocking of Internet content by service providers. The issue came into focus in the agency’s review of the purchase of NBC Universal by Comcast. As a condition of approving the deal, the F.C.C. made Comcast promise that it would abide by the Open Internet rules for seven years, even if the rules were modified by the courts.
Consumer advocates warned that higher costs to content providers could be passed on to the public, and called the ruling a serious blow against the concept of a free and opens Internet. “It leaves consumers at the mercy of a handful of cable and phone providers that can give preferential treatment to the content they profit from,” said Delara Derakhshani, policy counsel for Consumers Union.
“I would not be surprised if business development folks in ISP’s around the country were now looking for ways to partner with content creators,” said Michael Weinberg, acting co-president of Public Knowledge, a consumer advocacy group. The companies’ goal is “to make sure their unpartnered service is bad enough that a paid partnership is attractive.”
“It takes the Internet into completely uncharted territory,” said Tim Wu, a Columbia University law professor who coined the term “net neutrality.”
Mr. Wheeler said the FCC might appeal the ruling. In a statement, he wrote that he was “committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment.” He added, “We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”
“If this ruling stands, broadband providers would be free to strike deals with companies like Netflix and Apple to pay to have their movies, software and other data streamed to customers faster than or ahead of other content. Such deals would hurt smaller businesses or start-ups that cannot afford to pay for preferential treatment.”
“Ideally, Congress would pass a law prohibiting broadband companies from discriminating or blocking content, but that is unlikely to happen given industry opposition. That’s why it’s important for the commission to reclassify broadband as a telecommunications service.”
“I really think this court decision puts at risk so much of what we love about the Internet. With these rules being invalidated, it really leaves consumers at the mercy of phone and cable companies, who are now free to block websites if they want to, interfere with traffic, favor certain sites and services over other sites and services. And I think that’s bad news for the average Internet user, that the agency that is supposed to be protecting them has been told it has no oversight of the most important communications network of the 21st century.”
But not everyone dissented. Former F.C.C. Commissioner Robert M. McDowell (who voted against adopting the Open Internet rules in 2010) told the WSJ: “The Internet was working beautifully before these rules were implemented. It will thrive even more now that they have been struck down. In the meantime, ample laws already exist to protect consumers should market failures occur.”
CNET is attempting to gauge public perceptions of the new network neutrality rules by conducting a poll: “How concerned are you about Net neutrality? The FCC’s Net Neutrality rules got wiped out in a court ruling, leaving some people unimpressed and others predicting Internet Armageddon.” You can read all about it and cast your vote here
Stay tuned for a follow up article that will preview the F.C.C.’s January 30th open commission meeting, which will cover topics described in this meeting announcement.
Those issues will be contrasted with the policy agenda Mr. Wheeler described during his January 8th CHM speech.