Up Front - March 2011
SHAW EXPERIMENTS WITH A LA CARTE
Shaw Communications subscribers are now able to build their own bundles, including ordering channels a la carte. Shaw appears to be the first major North American MSO to offer a la carte selection. Subscribers will not be able to build a full a la carte lineup, but they will be able to supplement Shaw’s basic channel package with a fully customized line-up of additional channels.
Time Warner Cable CEO Glenn Britt is on record saying he expects that the industry will have to move in that direction eventually with broadband, but neither TWC nor any other major MSO appears prepared to even entertain the possibility of a la carte pricing for video.
A la carte has been the subject of bitter arguments. The FCC under Michael Powell declined to impose a la carte on video distributors, concluding that it would probably be even more expensive for consumers. The FCC under Kevin Martin nonetheless tried to impose a la carte pricing but failed.
Shaw calls the new service the “Plan Personalizer,” and the a la carte service “Pick and Pay.” The Plan Personalizer site leads customers through multiple options for TV, Internet and phone service. The “shopping cart” is always visible, showing options selected and total price, including bundle discounts.
Subscribers can select from among several TV service tiers, and then they are presented with options for additional pre-set bundles of channels, with bundles of both HD and SD channels. Each bundle wraps together channels that fall under different categories – for example, education, entertainment and sports (those are the HD options).
The site offers SD channel bundles (called “packs”). Select a pack, and you get all the channels in the pack for a set price. The packs typically have eight or more channels each. But customers can also supplement Shaw’s basic channel package with a fully customized lineup..
Experimenting with the site, it appears that ordering a la carte is frequently cheaper than the full pack price, provided the customer selects four channels or fewer. It appears to be consistently more expensive to order more than four channels but fewer than the full number in the pack.
DONE DEAL: MEDIACOM GOES PRIVATE
Mediacom Communications officially became a private company in early March.
Minority shareholders overwhelmingly voted in favor, by a 97 percent margin, of selling the remaining class A and class B common stock that Chairman, CEO and founder Rocco Commisso did not already own. The shareholders voted together as a single class, and now Mediacom is a private company wholly owned by Commisso.
“I was gratified to see our public stockholders overwhelmingly approve the going-private transaction at today’s meeting,” Commisso said. “Our management team and fellow employees can now focus full time on delivering the best experience to our customers. I am excited for the company and our employees as we enter a new chapter in our history.”
Commisso first proposed taking Mediacom private in June of last year, with a bid of $6 per share, after some back and forth between Commisso and the shareholders, including Commisso withdrawing his offer in August. Commisso and the shareholders agreed in November to complete the deal for $8.75 per share in cash.
Meanwhile, Mediacom recently tried something other U.S. Internet service providers have shied away from: It has inserted its own ads into Web pages as its subscribers surfed.
Ads for Mediacom’s home phone service have shown up on the normally ad-free home pages of Google.com and Apple.com, according to subscribers.
There are only a few reports of the ads showing up, starting in late February, and many Mediacom subscribers on Web forums said they had not seen any. That leaves the possibility that the ads were part of a test run rather than a full-fledged rollout.
The company won’t say.
THE WIRELESS INDUSTRY LOOKS AT SMALLER CELLS
As cell phones have spread, so have large cell towers – those unsightly stalks of steel topped by transmitters and other electronics that sprouted across the country over the last decade. Now the wireless industry is planning a future without them, or at least without many more of them. Instead, it’s looking at much smaller antennas, some tiny enough to hold in a hand. These could be placed on lampposts, utility poles and buildings – virtually anywhere with electrical and network connections.
If the technology overcomes some hurdles, it could upend the wireless industry and offer seamless service, with fewer dead spots and faster data speeds.
Some big names in the wireless world demonstrated “small cell” technologies in mid-February at Mobile World Congress in Barcelona. Case in point: Alcatel-Lucent’s 9361 Home Cell X-Series devices.
For cell phone companies, the benefits of dividing their networks into smaller “cells,” each one served by something like the cube antenna, go far beyond aesthetics. Smaller cells mean vastly higher capacity for calls and data traffic (see “Mobile backhaul: Opportunity knocks for cable operators” on page 24).
Instead of having all phones within a mile or two connect to the same cell tower, the traffic could be divided between several smaller cells, so there’s less competition for the cell tower’s attention.
Back at Mobile World Congress, Alcatel-Lucent launched its 3G small cells approach for indoor and outdoor high-traffic “metro” areas, as well as the second generation of its 9362 Enterprise Cell.
And the vendor’s 9361 Home Cell X-Series, mentioned earlier, are a compact range of USB-powered small cells able to deliver high-capacity data and voice for up to eight users simultaneously.
“In the context of the light-Radio approach, there is a strong continuum between the deployment of small and macro cells in order to establish converged, IP-based, flexible and smart networks,” said Wim Sweldens, head of Alcatel-Lucent’s wireless activities. “Our ongoing small cells innovations are crucial to the creation of this new, more powerful mobile network architecture – bringing major coverage, capacity and services benefits to service providers and subscribers alike.”
LETTER TO THE EDITOR
I am writing in response to the article “Calm promises less noise” from the February edition of CED. I couldn’t disagree more with Paul Erickson’s assessment that the burden of complying with the CALM Act should fall on the headend (be it a cable, telco or satellite headend). My understanding of digital audio loudness is that the FCC accepted ATSC audio standards (ATSC A/52B) way back in 1997 and gave the broadcaster the responsibility to normalize their audio levels to meet the ATSC standard, mainly by properly applying dialnorm settings. Unfortunately, this rule was never enforced.
The proper place to set audio levels is in production, before the channels are multiplexed together and sent to the satellites. The headend would prefer to pass through digital audio unprocessed. The cost and technology of individually processing each digital audio stream in real time would be prohibitive. A correct FCC/ATSC-compliant digital audio stream originated by a broadcaster such as HBO will mean a correct audio level for the cable, telco and satellite subscriber, without forcing hundreds of headends to purchase and install special audio equipment.
That said, making advertisement commercial audio levels match program audio levels is a tougher issue. Again, it is the responsibility of the broadcaster to correct commercial audio levels so as to match their normal program audio level prior to broadcasting to the public. Simply matching dialnorm settings alone will not do the trick. Commercial audio is still mostly “analog,” meaning heavily compressed with little dynamic range. When matching audio levels of a commercial (with 10 dB of dynamic range and a dialnorm setting of -24 dB) with a modern TV production from TNT (encoded in Dolby 5.1, dynamic range of 100 dB, and its dialnorm set to -24 dB), the commercial audio will surely win the loudness war. Excessive dynamic range in modern audio production may be part of the problem (just my opinion).
If the broadcasters had followed the ATSC requirements for program and commercial loudness, we might never have needed the CALM Act. To shift the burden of compliance onto the content distributor is unfair, as well as inefficient. I would like to commend the engineering team at Scripps Networks in Knoxville, Tenn. Their channels HGTV, DIY Network, Food Network, Travel Channel, Cooking Channel and GAC are all CALM/ATSC-compliant. – Mike Lilly, Time Warner Cable
SURVEY: COST OF A MEGABIT CONTINUES TO DECREASE
A recent survey from Point Topic revealed a continued decrease in the cost of a megabit: Broadband households today pay on average just half the amount they were paying in early 2008 for their bandwidth.
The ongoing reduction to the price of bandwidth tariffs is due to increased competition as operators look to move into new markets for DSL and fiber.
“DSL prices in particular are being squeezed. Competition between operators and access technologies is driving the search for more markets, and DSL is well placed to capture customers who don’t need full-speed 24/7 bandwidth,” said Oliver Johnson, CEO of Point Topic.
He added: “Many users do not use their broadband for more than a couple of hours a day, and when they do, it’s often for applications that use relatively little bandwidth. They care much less about the cost per megabit, where fiber has the edge, than about the upfront and monthly charges, and DSL wins that battle hands down.”
Countries like Japan, Korea and, in the near future, Australia, where there are highly concentrated populations and endto-end fiber is available, are seeing significant technology substitution, with DSL in particular being replaced by fiber.
The result is that the drop in DSL prices is not worldwide; in Asia Pacific, costs have increased over the last two years.
“Subscriber behavior is changing. The increasing popularity of high-bandwidth applications, particularly video, means that low cost per megabit carries more weight than low subscription costs. Operators are seeking ways of fulfilling existing needs and scrambling to create new ones.
“The developing broadband markets will continue to see rapid growth, particularly in DSL subscriptions in 2011. However, the advent and spread of connected TV is going to be the real news in the mature markets. Enabling consumers to watch streaming video on their TV sets will drive bandwidth demand up significantly, and where fiber is available, we’ll see appreciable growth in its market share,” Johnson said.
SURVEY: IMPROVED PRODUCTIVITY NEEDED IN INDUSTRY
Communications service providers acknowledge a strong link between field productivity and subscriber satisfaction and retention, according to recently released market research from Sunrise Telecom.
While 100 percent of survey participants confirmed the importance of subscriber satisfaction and retention, 81 percent of them also stated that improving field productivity is very or extremely important to their organization.
The survey, which polled CSP decisionmakers, revealed that the industry is lacking in both the techniques and processes to improve productivity. Fifty percent of respondents said their organization has not implemented a productivity initiative for field operations within the last 12 months. In addition, 48 percent of participants said that productivity metrics in their organization are either non-existent or need vast improvement.
“The findings reveal a dire need for raising productivity in the industry, particularly in field operations,” said Bahaa Moukadam, Sunrise Telecom’s CEO.
Key highlights of Sunrise Telecom’s survey
The top two issues most impacting productivity in field operations are:
- Eliminating repeat service calls by getting them done right the first time
- Providing field staff with additional skills and training
Other issues that rated high in impacting productivity include:
- Technicians need smarter field tools and platforms to help increase productivity
- Managers need better metrics and ways to track their team’s productivity status
- Field operations’ processes need to be streamlined
STUDY: VIDEO IS THE NEXT STEP IN EVOLUTION OF MOBILE
Consumers have video chatted on PCs for more than a decade, and they’re eager to take video communications mobile, according to a recent iGR consumer survey commissioned by Syniverse Technologies. But not everyone who wants to communicate via mobile video can – yet.
Incompatibility across mobile networks and devices is slowing mainstream adoption of mobile video communications, based on iGR’s August 2010 survey of more than 2,000 U.S. consumers. Many end users also lack video cameras on their mobile devices. As a result, 76 percent of respondents said they had never used peer-to-peer (P2P) video communications – the act of sharing video between two or more individuals – on any device, with 38 percent citing their devices’ lack of a video camera.
“As smartphone proliferation continues, video is the next logical step in the evolution of mobile services,” said Tony Holcombe, president and CEO of Syniverse. “The key to widespread mobile video uptake is interoperability. That’s what enabled anytime, anywhere communications, regardless of network or device for voice, text and picture messaging, and the same will be true for mobile video.”
According to the latest Cisco Visual Networking Index, two-thirds of the world’s mobile data traffic will be video by 2015. Mobile video will more than double every year between 2010 and 2015, and it has the highest growth rate of any application category.
Despite PCs currently being the most popular devices for video calling (88 percent), 71 percent of iGR survey respondents identified the smartphone as one of the best devices for video communications. In fact, 13 percent of those surveyed who owned a new smartphone with a front-facing camera had used it for some form of P2P video within the first three months.
“The problem with PC, even laptop-based video calling, is that it typically is more of a fixed-location experience,” Holcombe said. “In other words, you have to be in a location where a consistent Wi-Fi connection is available to initiate or receive the video call. By eliminating these constraints, mobile video communications – especially services that are interoperable across networks, applications and devices – liberate a consumer to share real-time video communications, regardless of location or any other barriers.”
The iGR survey revealed that P2P video interoperability likely will be the technology advancement that pushes widespread consumer adoption of mobile video communications across all devices. While nearly one in four respondents (24 percent) already have experienced P2P video communications, 57 percent are very interested, or somewhat interested, in a video calling application that permits connection to and from a variety of devices, not just the PC-to-PC capabilities predominately available today.
From a demographic perspective, Americans aged 18 to 34 encompass 71 percent of consumers using P2P video communications today, with those aged 25 to 44 about 20 percent more interested than the average consumer in network- and device-agnostic video calls. And there was little variation in interest when defined by current income, ARPU, rate plan (prepaid/postpaid or family) or education levels.