telecompetitor

Verizon CEO: Half of Base Chooses FiOS Bandwidth Upgrade

Half of Verizon FiOS Internet customers have opted for a FiOS bandwidth upgrade, said Verizon CEO Lowell McAdam.

Verizon uses the brand name Quantum for its higher-speed data services, which offer data rates as high as 500 Mbps. Upgrades to Quantum are being driven by increased use of video and the proliferation of WiFi-capable devices within customers’ homes, McAdam said.

McAdam added that Verizon could easily raise FiOS data rates to a gigabit per second but has no near-term plans to do so. For residential users to need gigabit connectivity, the industry “has to come up with new apps besides video and more devices,” he said.

Previously FiOS data and FiOS video had similar take rates, but more recently the company has been signing up 20% to 40% more broadband customers. This shift may be driven, in part, by customers shifting toward over-the-top video options. But McAdam isn’t concerned about the possibility of more customers moving in that direction because margins are better on broadband.

“If they convert over, that’s fine,” he said. “The more traffic into the home, the better for us because we’ve got the technology that’s future-proof. We’re in the best position to capitalize on high-volume traffic going into the home.”

CEO: Frontier Emergency Phone Service Will Target Rural Areas, VoIP on Tap Too

Frontier Communications plans to offer a landline phone service designed for emergency use only, said Frontier CEO Maggie Wilderotter. He said Frontier is planning a residential VoIP product to be launched in the second half of 2014.

Frontier’s planned emergency phone service targets rural areas, which represent a large portion of Frontier’s customer base.

Like all local phone companies, Frontier is seeing customers canceling landline service and moving to cellular or other alternatives. But as Wilderotter noted, rural areas experience frequent power outages. And because traditional phone service is powered from the phone company’s central office, it could provide a reliable communications method even during an extended outage.

Frontier believes there is a market for an emergency landline phone, which would be capable only of dialing Frontier or a 911 operator. The service will have “four nines” reliability, Wilderotter said, using telecom jargon for a service that is available 99.99% of the time.

Communications Preference Survey: 56% Choose Phone, 25% Choose Text

We can text or email, but a phone call remains by far the preferred form of communication for Americans, especially when a special moment or event is the motivation, according to results of a new survey conducted for Vonage by ORC International.

Fifty-six percent of US adults said they prefer a phone call when asked what type of communication they use most. Texting, chosen by 25 percent, was a distant second. And despite the fact that millennials (18-34 year-olds) text more than they call, 67 percent “stop texting and start calling when it comes to sharing special moments,” Vonage highlights.

Report: Internet of Things Communication Dominated by 2G

With machine-to-machine (M2M) services, aka the Internet of Things, “now scaling to be a significant business” for a growing number of telecom and Internet service providers, Infonetics on May 14 released the results of a global survey of M2M service providers’ market expectations and strategies.

With each providing at least 1 million M2M connections to customers, M2M is a “sizable” business for over half the 20 service providers Infonetics surveyed for its “M2M Strategies: Global Service Provider Survey.” Collectively, businesses in the automotive/transport/logistics and utility sectors account for nearly half, Infonetics states in a news release.

“Service provider focus and prioritization of the M2M segment has been a relatively recent phenomenon, but as our latest M2M service provider survey shows, M2M is now scaling to be a significant business for a good number of providers around the world,” Infonetics’ Godfrey Chua, directing analyst for M2M and The Internet of Things, was quoted as saying.

Charter Set-Top Box Technology Could Be an Important Breakthrough

Charter Communications is working on some important new set-top box technology, Charter Communications President and Chief Executive Officer Tom Rutledge revealed.

The goal is to use IP communications to the set-top box, which will act as a thin client that can be updated from the head-end to support new capabilities, including security system functionality.

Charter is working on technology that would enable any set-top box the company has deployed to act as a thin client that the company can easily upgrade through an IP connection. The company hopes to have the technology deployed throughout its network by 2015. “From an investment perspective and a capital intensity perspective it [makes things] a lot easier,” said Rutledge of the new approach.

The thin client approach also will enable Charter to “leverage the interactivity of our network,” said Rutledge, adding “that’s what differentiates us from satellite.” Using a thin client “enables you to stay state-of-the-art and it’s also customizable,” Rutledge noted. “Whatever interfaces you think are attractive might not be what somebody else thinks is attractive and you have all the different demographics,” he said. “I could see a world where everybody could make up their own user interface.”

Cable vs Telecom Operating Costs: Who’s Really Better?

It has been a rule of thumb that US cable TV operators have operating costs lower than their major telecommunications competitors. But on one metric -- revenue per employee -- AT&T and Verizon arguably perform much more efficiently than US cable TV operators.

Between 2007 and 2012, AT&T eliminated 67,620 jobs, almost a quarter of its workforce. At least in part, that accounts for average sales per AT&T employee of $495,000 in 2012, up from $209,000 in 2006. Over the same five-year period, Verizon eliminated 48,000 jobs. Industry wide, employment in the entire telecom industry has fallen by almost 200,000 since 2007, according to the US Labor Department.

Most of those cuts have come in the fixed network business, as mobile segment headcounts have been roughly flat between 2001 and 2008, and have been declining since 2008. Between 2008 and 2010, the mobile segment lost about 40,400 jobs overall, by some estimates. By other estimates, US mobile business jobs dropped by only about 10,000.

The point is that, by any estimate, most of the lost US communications jobs have come from the fixed network business. Still, it remains the case that US cable operators have operating cost structures lower than the leading US telecommunications companies.

Netflix: Canadian ISPs Beat US Providers in Netflix Performance

Canadian Internet Service Providers (ISPs) are now among those rated by Netflix for speed and performance, and hence their ability to “provide the best prime time Netflix streaming experience.”

Bell Canada and Bell Alliant’s fiber optic network services, at an average 3.19 and 3.10 Mbps respectively, ranked highest among Canadian ISPs in the April edition of the monthly Netflix ISP Speed Index. Following closely in third was cable provider Shaw with an average bandwidth of 3.00.

As a country, average Netflix performance speeds in Canada beat those of US ISPs but ranked below those of most European nations, Netflix elaborates in a post on its “US and Canada” blog.

Cablevision, at an average 3.00 Mbps, rated tops in the US in Netflix’s April “USA ISP Speed Index,” followed by Cox at 2.90 and Comcast at 2.77.

Municipal Broadband Opposition Laws: Pros and Cons -- and Legality

[Commentary] With Federal Communications Commission Chairman Tom Wheeler vowing to take action against state-level laws that block municipal broadband networks, we are seeing considerable debate about the pros and cons of those networks. Nineteen states currently have laws limiting and in some cases effectively prohibiting municipalities from offering commercial services on broadband networks constructed by the municipality, according to the Institute for Local Self-Reliance. I thought it would be a good idea to review the arguments on both sides.

Supporters of municipal broadband opposition laws
Chairman Wheeler’s opponents, including industry research consultancy The Precursor Group, say the FCC would be overstepping its authority if it were to take the sort of action Wheeler has threatened. “Municipalities are legal creations of the state, not the federal government,” argued Scott Cleland, president of The Precursor Group, in a blog post.

Opponents of anti-municipal broadband laws
Municipal network supporters, including the Institute for Local Self-Reliance’s Community Broadband Networks Initiative, dispute the claim that “the vast majority” of community networks have been failures. Noting that there have been more than 400 municipal projects to date, Chris Mitchell -- director of the ILSR’s Community Broadband Networks Initiative -- said there were some projects that didn’t work out but others that have had major benefits. As for FCC authority, Mitchell said the recent Net Neutrality court decision said that the FCC had the authority to remove barriers to broadband network deployments.

What happens next?
In taking action against anti-municipal network legislation, Mitchell believes the FCC will go after the “most egregious” state-level laws. He cited North Carolina as one state with such laws, noting that the North Carolina law totally prohibits municipal networks. But if the FCC makes such a move, Cleland argues that it will encounter substantial opposition.

CEA: Despite Reluctance to Pay, Average Amount Spent on Apps Approaches $40/yr

In a new report, the Consumer Electronics Association (CEA) forecasts app usage will continue to increase through 2014, as US households download a greater number of apps to smartphones, tablets and smart TVs, among other devices.

Each app-enabled device category evaluated by CEA in its “16th Annual CE Ownership and Market Potential Study” registered year-over-year growth in the first part of 2014. Gaining at least six percentage points in app-ownership over 2013, smartphones, tablets and smart TVs were the fastest growing device categories, according to a CEA news release.

There were over 1 million apps on both Apple and Google Android’s app markets at the beginning of 2014. Generally speaking, app users are interested in apps that have compatibility across a range of devices (61 percent), and a high level of functionality, such as the ability to control other devices (52 percent), CEA found. Two-thirds (67 percent) said they enjoy using apps, 59 percent said the number of apps available is overwhelming. Less than half (46 percent) of respondents agreed that apps “remove the need to purchase separate electronic devices.”

As much as they like using them, consumers don’t like to pay for apps. Just one-third (32 percent) of those surveyed said they are willing to pay for apps.

Survey: 87% of US Smartphones Connect to Wi-Fi at Home

Obtaining a good, strong cellular mobile connection inside homes anywhere in the world can be a challenge. Wi-Fi-enabled smartphones may offer a readily available solution, according to the results of a global consumer survey released by mobile industry telecommunications over-the-top solutions provider Kineto Wireless.

Kineto found that 89 percent of respondents who said they had “poor-to-no mobile voice coverage at home” also owned Wi-Fi-enabled smartphones. The Kineto-sponsored survey also found:

  1. 12 percent of all respondents classified mobile voice coverage within their home as poor (e.g. dead spots within their home) to non-existent
  2. 25 percent of all respondents indicated they had switched mobile service providers due to a home coverage issue
  3. In the US, 87% of respondents with poor to no mobile voice coverage at home indicated they were smartphone users that regularly connect their phone to a home Wi-Fi network. That same number was 89% in the UK and 84% across Asia.

FCC E-Rate Modernization Workshop: $750 Per Gigabit Target Suggested

Schools and libraries nationwide should be able to get gigabit connectivity to their service provider’s central office for an average of $750 per gigabit per month, said Evan Maxwell, CEO of Education SuperHighway, at a Federal Communications Commission workshop about E-rate modernization.

The E-rate program is part of the Universal Service program, which covers some of the costs of broadband connectivity for schools and libraries. The target speed for connectivity from the central office to the Internet should be three dollars per megabit per month -- a substantial decrease from the average $22 paid today, Maxwell said.

Education SuperHighway is a research and advocacy group that aims to improve broadband connectivity to the nation’s schools. Maxwell based his comment on research conducted by Education SuperHighway, which has been collecting cost and speed data from schools nationwide.

“We know these prices are possible,” Maxwell said, noting that the top half of schools pay an average of just under $600 per gigabit per month for local connectivity. “Every school with over 100 kids should get fiber,” added Maxwell. He added, however, that the nation will have to subsidize deployment where deployment would not otherwise be commercially feasible.

Digital Life in 2025: Experts See Positive Impact on Society Amid Some Signs of Trouble

Envisioning the future of the Internet and its impacts on society and the world we live in, nearly 1,500 experts agree that the Internet will become less visible even as it becomes more central and important in daily life.

And although they believe the ramifications of the Internet’s evolution on society and the larger world will be positive on balance, they also see signs of trouble.

Trends towards ubiquitous Internet access across wireless and wired networks, skyrocketing growth in sensors and machine-to-machine (M2M) network connections, and ever-greater information processing power and capacity foreshadow much of what the consensus of experts surveyed imagine the Internet will look like and the ramifications it will have across societies worldwide in coming years.

The Pew Research Internet Project and Elon University’s Imagining the Internet Center compiled the results of their survey of experts into the “Digital Life in 2025” report. In the coming years out to 2025, the research partners summarize, experts believe that the Internet “will become more ‘like electricity’ and produce vastly greater human and machine connectivity that will change everything from personal interactions to the decisions made by governments around the world.”

According to most of the respondents, by 2025 there will be:

  • A global, immersive, invisible, ambient networked computing environment
  • A continued proliferation of smart sensors, cameras, software, databases and massive data centers in a world-spanning information fabric known as the Internet of Things
  • Portable/wearable/implantable technologies that will allow people to “augment reality”
  • Disruption of business models established in the 20th century, most notably impacting finance, entertainment, publishers of all sorts and education
  • Tagging, databasing and intelligent analytical mapping of the physical and social realms

CFO: Verizon 300 Mbps Wi-Fi Coming Soon

Verizon plans to offer an in-home router that will support Wi-Fi connectivity at speeds up to 300 Mbps beginning this summer, said Verizon Chief Financial Officer Fran Shammo.

The device supporting Verizon 300 Mbps Wi-Fi is proprietary, Shammo said, and is expected to drive increases in subscriber broadband speeds as end users consume more bandwidth within the home.

Verizon also plans to phase out set-top boxes, Shammo said. Beginning this summer, the company will provide video customers with a single video media server per home and will distribute video content in IP format.

“We will deliver everything through IP to FiOS,” said Shammo. Customers “won’t need a set-top box,” he said. “For televisions that are not IP capable, we will have an attachment.”

The new approach will cut installation time 50%, Shammo said. Installers will attach the media server to the optical network terminal and won’t have to test coaxial cables, he noted.

Windstream on TDM-to-IP Transition: AT&T Should Offer Special Access Equivalent

Windstream isn’t satisfied with how AT&T has proposed to handle wholesale customers in its proposal for TDM-to-IP transition trials and is asking the Federal Communications Commission to establish rules to govern this aspect of the IP transition.

Windstream, an AT&T wholesale customer, wants the FCC to require AT&T to continue to offer high-capacity circuits including IP equivalents to DS-1 and DS-3 special access circuits -- a requirement that isn’t likely to sit well with AT&T.

In its proposal for the TDM-to-IP trials, AT&T said it would discontinue certain TDM-based offerings but would continue to make copper loops available to other network operators. The company noted, however, that it would not provide electronics, instead expecting the other carriers to provide those electronics -- and what Windstream is asking would require AT&T to provide electronics.

“In the post-IP world, competitors still will need equivalent access to last-mile facilities and services to continue offering business services to millions of customers,” argues Windstream in a letter sent to the FCC.

Netflix and Opponents: Deciphering Paid Peering and Dueling Diagrams

[Commentary] Netflix and Entropy Economics have issued dueling network diagrams aimed at supporting opposing points of view on paid peering -- an issue that has been hotly debated since Netflix signed a paid peering deal with Comcast earlier this year.

Yet the diagrams have a striking similarity when it comes to showing how Netflix connects to Comcast. It’s possible that by keeping up the pressure about traffic exchange, Netflix is hoping to pressure regulators into imposing some sort of obligations on Comcast and Time Warner Cable as a condition of approval of Comcast’s acquisition of Time Warner Cable.

Now that Charter is involved in that deal as well, it may not be exempt either. And conditions written into merger approvals sometimes have a way of gaining traction beyond the merged companies.

Regulators should tread carefully before imposing any major new traffic exchange requirements. Considering the complexity of the issue and how quickly practices change, it’s difficult even to determine what those requirements might be. The true cost of interconnection is dependent on a wide range of factors. And only the network operators know and understand the dollar values underlying these factors.

JD Power: Buyers are Paying More Attention to Smartphone Pricing

Smartphone pricing is becoming more important to buyers as the smartphone technological playing field has leveled, according to Volume 1 of the JD Power 2014 Wireless Smartphone Satisfaction Study.

Just over one-fifth (21 percent) of smartphone owners cited price as the main reason they chose to purchase a particular smartphone, up from 13 percent in JD Power’s 2011 study.

AT&T ranked tops among US telecompetitors in terms of smartphone-device customer satisfaction, scoring 844 out of a possible 1,000 points.

Sprint ranked second at 839, T-Mobile third at 835, and Verizon Wireless fourth with a score of 829.

Overall satisfaction among smartphone owners totaled 837, according to a JD Power press release, with Apple ranking highest among smartphone original equipment manufacturers among Tier 1 wireless carriers.

Consumer Watchdog: Google Lobbying Budget Outpaces All Other Tech Heavyweights

High-tech and telecom companies continue to spend ever-greater amounts to win friends and influence people in the US government, hoping to push their agenda, according to the latest analysis of lobbying disclosure forms by Consumer Watchdog.

At $3.82 million and up 14 percent from $3.35 million in the year-ago period, the Google lobbying budget ranked the highest on Consumer Watchdog’s list of the top 15 technology and telecommunications companies in terms of spending on federal government lobbying in 1Q 2014.

Comcast, as it seeks to gain approval for its merger with Time Warner Cable, ranked second, spending $3.09 million on federal lobbying in 1Q. Noting that AT&T and Verizon typically outspend their high-tech counterparts, Consumer Watchdog said AT&T spent $3.67 million and Verizon $3.55 million on lobbying in 1Q.

The vast amounts of money companies are spending to influence federal lawmaking and regulations poses serious threats to American democracy, Consumer Watchdog argues.

“These companies continue to spend whatever they think necessary to buy the laws and regulations they want,” said Consumer Watchdog project director John Simpson. “These disclosure statements don’t include payments to trade associations or the sort of ‘soft’ lobbying that has become a Google trademark -- funds to think tanks and academic research centers. When all that is factored in, the amounts are staggering.”

AT&T/ Chernin Group Deal: Another Take on OTT Video Monetization

[Commentary] AT&T is trying a new approach toward the over-the-top video opportunity, announcing that it has created a joint venture with media company The Chernin Group to focus on over the top (OTT) video.

The companies said they would jointly invest $500 million in the venture with the goal of “investing in advertising and subscription VOD channels as well as streaming services.” OTT is both an opportunity for and a threat to the nation’s largest pay TV providers -- including AT&T, Verizon and cable companies such as Comcast and Time Warner Cable.

OTT video offerings such as Netflix and Amazon Prime threaten the pay TV providers’ subscription and VOD revenues. But Netflix and Amazon Prime don’t have their own networks -- and those networks could become increasingly important as TV Everywhere gains in popularity, giving consumers the ability to watch video on a variety of devices. And as that happens, companies such as AT&T and Verizon that have mobile as well as landline broadband networks may have an edge.

Based on the press release announcing the AT&T/ Chernin Group venture, the venture partners appear set on capitalizing on that edge.

Comcast-Netflix Debate Illustrates Implications of Comcast-TWC Merger

[Commentary] Netflix appears to be positioning itself as a major voice against the Comcast-Time Warner Cable merger.

Sen Al Franken (D-MN) has indicated he intends to invite Netflix’s participation in the regulatory approval debate and Netflix confirmed they intend to take him up on his offer. Needless to say, Comcast isn’t pleased.

Broadband Access Services for the Internet of Things Generates $3B in Revenue

At its core, building ‘the Internet of Things’ means building machine-to-machine (M2M) connections, and those will nearly triple between 2014 and 2018, with cellular-WAN wireless M2M connections expanding from 220 million to nearly 630 million, according to a new report from Infonetics Research.

With nearly 1.7 billion M2M connections worldwide, revenue for the global market for M2M services totaled just over $16 billion in 2013, according to the research firm’s “M2M Connections and Services by Vertical” report. Infonetics forecasts that will increase at an 18 percent compound annual growth rate (CAGR) from 2013-2018. Key findings from Infonetics’ report include:

  • A growing list of global tier 1 players are supporting more than 10 million M2M connections each;
  • M2M “access” services—where operators’ broadband services function as M2M access solutions—make up over 16% of M2M service revenue, around $3 billion;
  • 80% of M2M devices in 2013 were connected via personal area network (PAN) technologies such as Wi-Fi, Bluetooth, and ZigBee
  • For technology vendors, it is increasingly important to build networking solutions that take into consideration the architectural requirements of the various M2M use cases that are proliferating, as well as the portfolio of emerging connection technologies.

NPD: Growth in Mobile Broadband May Push Greater Tablet Subsidies

The number of active mobile broadband devices in Americans’ hands will increase 50 percent to 34 million by year-end 2015, and two-thirds of them will be tablets, according to new market research from The NPD Group.

Today, tablets account for 40 percent of mobile broadband connections. Carriers will have to boost adoption of connected tablets as use of mobile hotspots and USB sticks decline. With the shift, the price of embedded cellular tablets should decline rapidly, according to NPD’s “Connected Intelligence Mobile Broadband Market Share and Forecast Report.”

“Tablets are the next subscriber battleground for the carriers,” NPD director, Connected Intelligence Brad Akyuz was quoted as saying. “The decline in ASPs [application service providers], coupled with the intensified pricing competition, will further boost connected tablet adoption in the coming years.

Pay TV Subscribers to Increase (Just Barely) in 2014

The rapid emergence of over-the-top (OTT) and Internet TV alternatives, as well as cloud services, has posed stiff challenges for US pay-TV service providers in recent years.

Having experienced a 0.58% decline in subscriber numbers in 2013, the pay-TV subscriber base will grow in 2014, albeit at a tepid pace, according to a new report from Strategy Analytics. Pay-TV subscriber numbers will increase 0.14% in 2014, Strategy Analytics forecasts in its “North America Digital Television Forecast: 1Q 2014.” IPTV “will be the bright spot” in the pay-TV market, with subscriptions rising 17.5% year-over-year. The growth will continue, the market research company continues, with US pay-TV’s IPTV subscriber numbers increasing at an 8.3% compound annual growth rate (CAGR) through 2019.

The two leading US IPTV providers -- AT&T and Verizon -- “are approaching the future with different strategies, but both are focused on driving advanced services and multiplay bundles with digital television and high-speed Internet at the core of their packages,” Strategy Analytics notes. Turning to cable pay-TV providers, the rollout of the Xfinity X1 platform has reversed a downtrend in Comcast’s subscriber base.

NTCA Report Quantifies Broadband Benefits, Adoption Challenges

Three in 10 US adults do not use the Internet at home -- and getting them online will be considerably more challenging than connecting the first seven, notes a paper released from NTCA -- The Rural Broadband Association.

But the effort would be worthwhile, argues author and NTCA economist Rick Schadelbauer in the paper titled “Conquering the Challenges of Broadband Adoption.” In the paper Schadelbauer also makes a case for why he believes smartphones are not a suitable replacement for landline broadband services.

The 30% of US adults who are not currently connected at home is comprised of roughly equal measures of people who use the Internet somewhere else and those who do not use it at all, according to Schadelbauer. It would be particularly challenging to get the latter group online because a Pew Research Center survey found that 92% of those people said they had no interest in getting online. Others likely do not connect because they cannot afford it or because it is not available to them.

AT&T Gigabit Broadband Likely Coming to North Carolina

AT&T took the unusual step late last night of announcing that it is “in advanced discussions” to bring a gigabit network to parts of the Triangle and Piedmont Triad regions of North Carolina.

Normally companies like AT&T wait until a deal is iron-clad before announcing it. The unusual announcement illustrates just how competitive the gigabit business is becoming -- in the right markets, at least. Austin, Texas for example now has three network operators offering or planning to offer gigabit service and a fourth that has increased its broadband speeds to 300 Mbps.

And in North Carolina, a local news outlet reported that eight service providers are negotiating with North Carolina Next-Generation Network (NCNGN) about the gigabit network. One of these appears to be Google Fiber, which early 2014 mentioned Raleigh-Durham (NC) and Charlotte (NC) as two of the nine communities where it was considering building gigabit networks.