May 2009

Recap of "Cybersecurity: Network Threats and Policy Challenges"

On Friday, the House Subcommittee on Communications, Technology, and the Internet held a hearing on cybersecurity. Witnesses testified that the cybersecurity chief named to battle Internet viruses and larger challenges facing the information technology networks used by US companies and national defense should be based in the White House. Cybersecurity is important enough to warrant a White House staffer with real authority and a real budget, said Larry Clinton, president of the Internet Security Alliance and one of those who made recommendations to the Obama team. But Gregory Nojeim, senior counsel for the Center for Democracy and Technology, said his group had urged that the task of ensuring cybersecurity be given to the Department of Homeland Security, not the National Security Agency, or NSA, which is responsible for breaking codes and electronic spying. The NSA, he argued, was ill-suited for the job of ensuring that the lightly regulated Internet was kept up and running. "I think it's a very difficult thing for them to handle," he said. Rep Anthony Weiner (D-NY) noted that no witnesses from the Obama administration attended the hearing. "The obvious reason is I don't think they know yet what their policies are," he said.

Broadband Funding Hopefuls Pair Up in Search of Stimulus Dollars

It may be another month — at least — before officials at the Commerce and Agriculture Departments provide grant proposal details for companies and communities hoping to win some of the $7.2 billion set aside for broadband-stimulus funding, but some hopefuls are already beginning to pair up in hopes of increasing their chances of success. Stimulus-funding hopefuls are also in talks about how they can pair up on grant proposals, including Connected Nation, a nonprofit funded by big phone and cable companies which offers broadband mapping services. Earlier this week, Connected Nation said it had teamed up with the Communications Workers of America and the Atlanta-based nonprofit Alliance for Digital Equality in hopes of winning some of the $250 million set aside in the stimulus legislation for encouraging broadband usage. Administration officials haven't offered many details about how they'll judge which applications to fund, but they have said they're looking for projects that bring private industry and public organizations together to increase broadband availability and usage. For broadband backbone companies like Level 3 Communications, that means working with state and local officials on proposals to construct so-called "middle-mile" fiber lines would allow the company to offer wholesale access to multiple local Internet providers in an area.

WildBlue Should NOT Get Stimulus Dollars for R&D (Same With BPL)

[Commentary] Satellite-based Internet access provider WildBlue wants stimulus dollars to "develop" a new satellite broadband service. Not "deploy" but "develop" -- a process that could take three years or more. Is WildBlue kidding? The Broadband Technology Opportunities Program is supposed to be about spurring deployment now, not in a few years. There are even specific provisions saying that the money's supposed to be spent within two years of receiving it. So let me see if I'm understanding this correctly: WildBlue wants tens if not hundreds of millions in government handouts to do R&D for a service that may or may not be ready to start serving customers in three years offering service that may or may not deliver download speeds up to 18Mbps that they haven't disclosed how much upload capacity it will have nor how much the service will cost. To be brutally honest, that sounds like an even more foolish way to spend limited broadband stimulus dollars than investing in BPL (broadband over power lines).

The Coming Broadband Smackdown

The cable industry's ongoing experiment with metered broadband pricing is the single biggest change to hit the media business in recent years. If cable commits to imposing bandwidth limits, the industry could kill the emerging Web video business, said Benchmark Capital's Bill Gurley, echoing the sentiments of Web consumer advocacy groups like Free Press. The good news for consumers, Gurley says, is that the cable operators are considering an alternative to choking off bandwidth: building a smarter channel guide with built in access to web video. The cable industry has resisted the integration of Web video into cable boxes in the past and has struggled to build smart, consumer-friendly technology into their systems. Still, Gurley cautioned that cable might drop their flirtation with new tech in favor of restricting consumers.

DPI: It's Going to Be About More Than Ads

[Comentary] The practice of deep packet inspection has raised privacy concerns among several organizations, including The Free Press and Center for Democracy and Technology. Congress recently heard testimony about ISPs using the technology to target advertising at web surfers. But DPI vendors reveal that advertising is a blunt instrument when it comes to generating revenue. It's likely most carriers will use DPI, which can determine the details of packets traveling over the web, to boost sales in far more subtle ways. Instead of a flat-out metering program, such consumption-based broadband might offer subscribers an emphasis on voice or gaming services and prioritize packets accordingly. Operators could let consumers subscribe to a broad video package that would include prioritization for a service such as online video.

Pay TV needs a differentiator

[Commentary] The TV landscape is changing, and the pay-TV provider — cableco or telco — that adapts will be the one that pulls ahead. Personalization may be the best bet as a differentiator. It can come in many forms, and operators still are in the very early days of experimenting with what works. Personalization can mean widget-based interfaces for improving the TV experience and adding Internet content to the bigger screen.

Vonage: Not a Telecommunications Service

On Friday, the 8th Circuit Court of Appeals ruled in favor of Web-calling provider Vonage in a landmark case. In Vonage Holdings Corp vs. the Nebraska Public Service Commission, the court determined that Vonage and other Voice over Internet Protocol (VOIP) providers whose services can be used nomadically won't have to contribute to the state's universal service fund (USF), because these companies provide an "information service" rather than a "telecommunications" service. Traditional carriers are required to contribute to the fund, used to provide schools with access to telecom services. The decision could have long-ranging implications for national policy that governs USF charges. "This decision is a major victory for the entire VoIP industry who have long fought the states and the FCC on this issue," notes Jessica Zufolo, senior policy director at Medley Advisors. "As a result of this opinion, several states with state USF funds will no longer have legal justification for assessing intrastate USF contributions on VoIP providers." She adds, "This case throws a monkey wrench into the FCC's ongoing process on what kind of access charge regime should apply to VoIP traffic."

Rural broadband growth better than urban

Growth in broadband deployments slowed for all telecom service providers in 2008, but rural telecom service providers had slightly better sequential growth than their urban counterparts. In addition, rural telcos are losing access lines more slowly, according to new research from Pivot Media. In a report released today, "Rural Vs. Urban: Examining Residential Broadband and Access Line Trends, 2008," Pivot also found that across the industry, broadband deployments are weathering the economic downturn. "We may have seen the worst of the recession's impact on broadband," said Bernie Arnason, founder and managing partner of Pivot Media. "It's early to say that firmly, but that is one conclusion you might draw." Pivot looked at broadband access line growth and access line loss by tier-one carriers including AT&T, Verizon and Qwest Communications and compared them to similar 2008 figures from 13 rural carriers including Embarq, Century Tel, Frontier, Alaska Tel, Iowa Telecom, Fairpoint, TDS and others. The research showed broadband access line growth slowed for both urban and rural service providers, but it slowed at a slightly slower pace for rural service providers.

DOCSIS 3.0 To Blanket U.S. By 2013

Research firm Pike & Fischer estimates that US cable operators will have deployed DOCSIS 3.0 to 99% of homes passed by 2013. Of 120 million homes passed nationwide by cable networks at the end of 2008, around 15 million -- roughly 13% -- were passed by DOCSIS 3.0, Pike & Fischer estimated. The firm expects that number to increase to nearly 53 million households in 2009 and to 119 million by 2013. Annual spending on DOCSIS 3.0 equipment will peak in 2010 at $400 million, Pike & Fisher estimated, and will total less than $1.2 billion over the next five years. The main driver behind cable's DOCSIS 3.0 build-outs are operational cost savings and the ability to expand high-speed Internet services to small and midsize businesses, rather than home-based users, according to Tim McElgunn, an analyst with Pike & Fischer's Broadband Advisory Services research group. "In our view, it is not the prospect of vastly increased residential high-speed data revenue that will encourage rapid deployment of DOCSIS 3.0 technology," McElgunn wrote in the summary to the "DOCSIS 3.0 Deployment Forecast" report.

Broadband without Internet ain't worth squat

[Commentary] We communications professionals risk forgetting why the networks we build and run are valuable. We forget what we're connecting to what. We get so close to the ducts and splices and boxes and protocols that we lose the big picture. Somewhere in the back of our mind, we know that we're building something big and new and fundamental. We know, at some level, there's more than business and economics at stake. In the big picture, We're building interconnectedness. We're connecting every person on this planet with every other person. We're creating new ways to share experience. We're building new ways for buyers to find sellers, for manufacturers to find raw materials, for innovators to rub up against new ideas. We're creating a new means to distribute our small planet's limited resources.

Benton

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