Verizon: US Broadband Is Really Competitive, If You Just Redefine The Market The Way We Want...

from the that-whole-'and-wireless'-bit dept

Almost all of the issues facing broadband in this country (our slow speeds and high prices relative to other countries, questions about "neutrality" and things like customers being forced into broadband tiers) are really symptoms of a lack of significant competition in many markets. Many customers really only have one or two options, neither of which they like (I'm in that camp myself). Yet, the broadband providers want to make everyone believe it's a really competitive market. That's why they've done everything possible to block the FCC from getting accurate data about actual broadband deployments and competition over the years. Their most recent plan has been about pitching the idea of an organization called "Connected Nation" to "map" broadband penetration. However, as has been discussed previously, Connected Nation seems more like a front for the big telcos to try to pretend there's significant competition... and an increasing number of doubts are being raised about Connected Nation's efforts -- even as it seems to remain a darling of DC politicians. However its "mapping" still won't look at house-by-house penetration and competition (by demand from the broadband providers) and the collected data will remain proprietary, rather than open.

Meanwhile, Verizon has put up a video claiming to explain why there's plenty of competition in broadband in the US, but it does so by pulling a neat little trick: rather than defining the market as DSL and cable providers, it dumps wireless providers into the mix... So when you add mobile data providers, yes, there are more players in the space, but that ignores the fact that (1) many of the mobile players and broadband players are actually connected (i.e., AT&T has both, as does Verizon) and (2) that the cellular wireless broadband providers are all greatly limited, and use terms of service that tend to forbid using the data account as a primary connection. In other words, they're not really part of the same market at all.

But, most importantly, the video fails to back up its thesis that the US is "one of the most successful broadband markets in the world." It says there's lots of competition, investment in new technologies and consumers are getting more as prices go down. That suggests there is, in fact, some competition in the market -- a point pretty much everyone agrees on. But it does nothing to compare the US to other markets around the world that have much more competition, much more investment and much greater consumer value per dollar spent. Just saying that because there's some competition, the US is one of the most successful in the world, doesn't back up the thesis at all. It's like saying that you won a baseball game because you fielded nine guys. You forgot about the actual game.

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BT Blocking Pirate Bay; Claims It's Part Of A Voluntary Self-Regulation Code

from the say-what-now? dept

Slashdot points us to the news that BT is blocking its mobile broadband subscribers from accessing The Pirate Bay, claiming that it's a self-regulation effort in order to remain in "compliance with a new UK voluntary code." It appears to have something to do with the already controversial self-censorship program being managed by the Internet Watch Foundation, which has already blocked access to parts of Wikipedia and the Internet Archive's Wayback Machine. At what point do people realize that any such demand to "block" certain types of content will overblock and harm perfectly legitimate sites and technologies?

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Telcos Resisting Broadband Stimulus Because They're Worried It Might Force Them To Compete

from the if-they're-all-upset,-that's-a-sign dept

We've had a lot of concerns about the broadband stimulus package, since it was shaping up to look like little more than a handout to incumbent operators who have a long history of grabbing public money, then not living up to the promises they made to get it. The real problem underlying most issues having to do with broadband in the US is a lack of competition, so any stimulus needs to address that, instead of just throwing money blindly at broadband providers. Mobile operators have already complained about anything that might force them to compete interfering with the government broadband giveaway; now BusinessWeek reports that several incumbent telcos are holding back from the stimulus, because they're afraid the government will attach strings to it to try and increase competition. Most of all, they're worried they may have to allow line-sharing, which, of course, they worked very hard to get tossed out in 2005. The rules are still under discussion, but we're optimistic that the opportunity to effect some positive change on the broadband market won't get left behind in the rush to throw money at it.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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If You Stand On One Leg, Twist Yourself Around And Squint Into This Light... The US Is #1 In Broadband. Maybe

from the sorta dept

Well, US telcos who are sick and tired of people pointing out how far behind the US is in broadband, is certainly happy to hear about a new report that claims the US is actually #1 in broadband. But, of course, the devil is in the details and the details look pretty ridiculous. Apparently, the guy behind the study built a bizarre and somewhat meaningless "connectivity scorecard," where he measured five different factors in a variety of countries, from overall internet penetration to online banking usage to voice minutes (both wired and wireless) to SMS usage per capita and, finally, consumer spending on software. From that, he ranked the countries with the US being number one.

Of course, looking over those factors, it's difficult to see why those specific factors should be the ones measured. Or how the relative weights of those factors should be measured to have any say at all in overall connectivity. SMS usage per capita? Does that really say anything about broadband connectivity? I actually use SMS less when I'm around a broadband connection. And, consumer software spending? That would mean that a hypothetical country that relies mostly on open source technologies is considered less connected than one that buys Microsoft. Even worse, as we see more and more free "cloud" offerings, it would mean those that use something like Google Docs, rather than paying for Microsoft would be seen as less connected, even as it likely means they're more connected.

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Kevin Martin Agrees To Drop Filters From Free Wireless Web

from the still-doesn't-have-much-support dept

M2Z's big plan to provide wireless internet to the entire country, if the FCC would just hand over free spectrum, never made all that much sense to us. Yes, the country could have a much better broadband infrastructure, and there are some interesting possibilities in the wireless space, but simply handing over a bunch of spectrum to a single startup company with a promise to provide free wireless to most of the country just seems like a boondoggle. There's little evidence that the plan would work or that it is even necessary. So, it seemed good that the plan went down in flames earlier this month -- though, most of the criticism was focused on the pointless requirement for anti-smut filters on the free connectivity.

However, Kevin Martin is making some news today by telling everyone who will listen that he's willing to drop the filters part if he can get the rest approved. This is a little surprising from Martin, as he's been a pretty big anti-smut crusader in his role at the FCC, but perhaps he's looking to leave a legacy beyond "AT&T lackey" now that he's about to leave the FCC. It still doesn't appear that he has the support to push this through, but that could change. Still, it would be good if someone (anyone?) could explain why it makes sense to just give a single company this spectrum without any clear reason why it should get the spectrum or proof that it can provide what it wants to provide in a reasonable manner? We've seen tons of promises about broadband wireless over the years from upstarts and very few have gone anywhere. Before just handing over valuable spectrum to one provider, why not see if (a) it's actually necessary and (b) if the company in question can actually provide what it claims it will provide.

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Mixed Signals: Is There A Broadband Price War? Is It A New Thing?

from the depends-on-who-you-ask dept

Remember just two years ago, when there were all sorts of stories about a supposed "broadband price war" in the US, where prices of DSL were even dropping below the cost of dialup lines? While that was somewhat misleading, it's difficult to see how the Wall Street Journal can suddenly claim that the idea of cut rate promotional pricing for broadband is suddenly new. That seems to go against what was being reported just a few years ago. Broadband providers have had such promotions going for quite some time -- and while the specifics of the promotion (and the ease of actually getting the promotion pricing) change over time, it's hard to see how the latest efforts are all that different. And, in the meantime, just as the WSJ is claiming that broadband prices are in some sort of freefall due to this competition, Richard Bennett is trying to make the case that we're all about to get broadband price increases thanks to the FCC's wrist slap on Comcast.

So, apparently, broadband providers are extending all sorts of promotions with cheap pricing to get people onto their network, but if you actually want to use the network, you should expect much higher pricing. That seems like a recipe for disaster.

Of course, the truth is somewhere in between. The so-called "price war" is exaggerated for effect -- as it's often nearly impossible to get the actual advertised prices in many cases. Meanwhile, Bennett exaggerates the claim that we're seeing price increases due to caps. Broadband caps will eventually be recognized as a hindrance to innovation, but they're hardly a price increase in most cases. And, if they really do end up being a huge price increase for users, then won't that create incentives for the other providers (the ones that the WSJ claims are itching to steal customers away) to get rid of the caps or change them? That is unless there really isn't competition in the market -- and Bennett himself was just suggesting that there's plenty of competition in the broadband market.

So, based on these various stories, it seems that, thanks to the FCC's deregulatory efforts, we have tremendous competition in the broadband market that is driving down prices, except for the fact that it's driving up prices due to the lack of competition in the market created by bad FCC rules. Clear?

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Overly Optimistic: Analysts Predict Cellular Broadband To Surpass Copper Broadband By 2010

from the yeah,-right dept

There's just something about new wireless technologies that seems to make analysts over-estimate their impact. I still remember when people were talking about how GPRS was going to be a real DSL replacement. GPRS, of course, was an incredibly unreliable and ridiculously slow update on GSM wireless technology. Yet, before it was used, there were stories predicting how it would be a wireless revolution. And then people started using it. And pretty much the same thing has happened with each advance in cellular technology. I remember people saying that EDGE, EV-DO, and HSDPA (all network upgrades) were going to be good enough to replace DSL or cable modems. Yet, even though EV-DO and HSDPA get decent speeds (still much slower than your average DSL or cable), the real problem is how these networks simply don't have the capacity to be a real home broadband replacement. That's why all of the contracts have ridiculous limits, suggesting you can't do very much with them, and often placing exceptionally low usage caps on the services.

Of course, don't tell that to the analysts, who can't resist making the same exact prediction about cellular broadband replacing home broadband. The latest such report is focused on the UK, and says that cellular based broadband for computers will surpass DSL or cable as the primary connection for users by 2010. That's not very far in the future. Now, certainly, mobile technology has improved greatly over the years, and there's still plenty more to come. However, the only really consistency in the mobile world is that many analysts over-estimate both the speed with which these new networks are adopted and the quality of these mobile networks. It would certainly be great, if true, but consider me skeptical.

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Dear T-Mobile, The Point Of 3G Is For Data Speeds

from the you-can't-be-serious dept

T-Mobile was the one national US mobile operator who really didn't have much of a strategy when it came to upgrading its network. While Sprint, Verizon and AT&T all were working on 3G options, T-Mobile kind of sat around twiddling its thumbs. Then it finally realized that it was way behind and made an effort to catch up. Years after everyone else got around to launching stuff (and as they're all now setting plans for their 4G options), T-Mobile is finally launching its 3G wireless service. But in a move that makes absolutely no sense, it's only for voice -- not for data. If it's only for voice... there's no reason to move to 3G. The very purpose of the 3G mobile network was to enable higher bandwidth for data. This is like building an entire highway next to a perfectly good bike trail... and then saying the highway is only for bicycles. Why bother? Update: Well, phew. Turns out the original story was simply not true. T-Mobile launched with voice and data...

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Would You Want Broadband-By-Soviet-Spy-Plane?

from the sign-me-up dept

For many years, we've been hearing all sorts of bizarre and crazy ideas for different methods of offering broadband. A popular one tends to be with flying devices of some sort. For a while we heard all sorts of stories about hideous-looking floating blimps called stratellites that would get press every six months or so, but which never actually launched anywhere. That's been going on for about five years. Another company tried something similar, but called its offering aerostats. Then there was the company that tried to use an acronym instead, referring to "HAPs" or "high altitude platforms." No matter what you call them, though, they haven't actually done much. However, that won't stop some people from trying. The latest such case isn't even a blimp. The idea is to take Russian unmanned spyplanes and turn them into flying broadband providers. Perhaps they'll double as spyplanes as well, though that's not clear. What is clear is that the economics of such an offering, combined with the likelihood of it being reliable (i.e., almost no chance), means that this is another plan not destined to be competing with your DSL connection any time soon.

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FCC Releases Its Bogus Broadband Data Once Again

from the must-be-that-time-of-year dept

By this point, everyone knows that the FCC's data on broadband penetration in the US is totally bogus. Early in 2006, a GAO report slammed the FCC for using such bogus data. It uses a very low hurdle for what counts as "broadband" and then measures broadband based on zipcodes only. So if one broadband provider provides 200kbps service to a single house in that zipcode, the FCC considers broadband to be available to everyone in that zipcode. That, of course, is ridiculous -- as even right here in the heart of Silicon Valley it's difficult for some people to get broadband. When the FCC did little to respond, the GAO came out with a second report slamming the FCC again. When the FCC still did nothing, Congress got into the act, pushing forward a bill that would require the FCC to more accurately count broadband penetration. How did the FCC respond? By writing an editorial insisting that there's competition... even if it doesn't have any numbers to back it up.

With all that as background, it should come as no surprise whatsoever that the latest FCC report on broadband penetration appears to use the same bogus methodology. It makes you wonder who they think they're fooling. With such a pointless methodology the results are pretty meaningless. After all, it suggests that 80% of zipcodes have at least four broadband service providers. Those who want to say that there's strong competition in broadband will falsely assume this means 80% of households have four providers to choose from, but it would probably be pretty difficult to find very many people who have four different providers available. There is one amusing point in the report. The FCC used to insist that after handing over monopolies to incumbents, new broadband options would come from other technologies, with broadband over powerlines being the "great hope" for broadband competition despite years and years of failed trials. It seems the FCC isn't talking much about broadband over powerlines any more... perhaps because its own report shows fewer subscribers than at the beginning of the year. So much for that plan.

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Wal-Mart Broadband Looks A Lot Less Impressive Than First Envisioned

from the not-quite-what-you-expected dept

Three years ago, we discussed the possibility that Wal-Mart could eventually enter the broadband business. At the time, the discussion was around Wal-Mart using its massive network of stores to act as WiMax access points, coating much of the nation with wireless internet access. The idea didn't seem likely for a variety of reasons, and with the news that Wal-Mart actually is entering the broadband space, we can easily see why the WiMax plan never made sense for Wal-Mart. Rather than taking the route suggested three years ago, Wal-Mart is simply partnering with Hughes to resell satellite broadband access. As many people know, satellite broadband access is the last refuge for the broadband addict who simply has no other choice. The speeds aren't great, the latency is a huge pain, and the reliability is often a problem. So, there are already some hurdles to overcome. Second, unlike the original suggestion, Wal-Mart appears to have nothing to do with the offering, other than slapping its brand on it (and even then it's not entirely clear from the article how the service will be branded). That means that Wal-Mart won't be able to have much say in how the service is run. Even if the stories of Wal-Mart losing its technology edge are overrated, this deal is going to involve existing infrastructure and existing service models -- meaning that it won't shake up the industry very much at all. Basically, what was envisioned three years back was Wal-Mart routing around other providers and offering up something entirely new, which it could control. Three years later, the best the company can do is piggyback its brand on a weak legacy offering. That's hardly going to shake up the industry.

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Broadband Speeds Averaging About 1/3 Of The Speed On The Box

from the up-to dept

By this point, everyone should know that broadband providers always provide "up to" speeds with the connections they sell. By "up to" they usually mean under perfect conditions that you will never, ever see. But just what kinds of speeds should you actually expect? A new study in the UK found that broadband speeds tend to be about a third of the "up to" speed. The worst speeds were about one-eighth of the promoted speed. As the article linked here notes, is it really any surprise that only 30% of people claim they're satisfied with their broadband? While it still seems like this should be false advertising, so far various regulatory bodies have said that the "up to" language is perfectly legal, no matter how misleading it may be. How hard would it be for an ISP to advertise expected speeds? I would imagine it would have happier, more loyal customers who know that the ISP is actually being honest, rather than hyping up speeds that will never be delivered.

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