Duck Season! Wabbit Season!
AT&T long ago unilaterally proclaimed it does not need franchise agreements for its U-verse IPTV service. Some local governments, who think they know pay TV when they see it, disagree. Among them are several small towns outside of Chicago, which tried to negotiate franchise contracts with AT&T. In response, AT&T is suing some of those municipalities to compel them to accept U-verse without a franchise.
Franchise contracts are useful for a lot of reasons. One of the more important is to force TV providers to offer the service to entire communities, not just to the affluent sections of communities. AT&T denies it is redlining with U-verse, but when SBC first introduced Project Lightspeed (the network upon which U-verse runs), its explicit plan was to target affluent neighborhoods. The same people running SBC then are running AT&T now.
Given that AT&T has earned some skepticism on redlining, the cities of Racine and Milwaukee and several nearby towns in Wisconsin have joined in a suit against AT&T to force AT&T to enter franchise agreements. This is according to the Journal Times of Racine and the Journal-Sentinel of Milwaukee. The cities and AT&T say they're making progress toward settlements…
Meanwhile, AT&T is signing agreements with at least some local governments, according to the Elgin (Ill.) Courier News, in which AT&T is agreeing to pay fees that would be franchise fees if what AT&T was getting was a franchise, but since no actual franchise was granted, therefore they're not. Franchise fees, that is. It's sort of like settling without admitting guilt.
At the same time, AT&T is lobbying the legislatures of at least two states (Missouri and Tennessee) to pass laws that will allow those states to grant statewide franchises. To AT&T. Which says it doesn't need them. Even though it's lobbying for them.
I don't know about you, but that kind of makes my head spin. Not in a Linda Blair sort of way. More like an Elmer-Fudd-just-shot-me sort of way.
But I digress...
Who could clear this up? The FCC. The Powell and Martin versions of the FCC have had a clear and common agenda: eliminate regulations at the federal, state and local levels, ostensibly in order to simplify a complicated and, the telcos complain, onerous regulatory environment.
In the process, the last couple of incarnations of the FCC have rendered a number of decisions that have made the regulatory situation, once as clear as mud, as clear as something they want you to believe isn't mud.
For example, the FCC decided that VoIP is not a telecommunications service, a decision so clear the FCC had to issue a notice last week (story here) telling some small LECs that even though they don't have to connect with anything that is not a communications service (such as VoIP), they still have to connect the phone calls of Time Warner Cable's subscribers.
Which are VoIP.
Then on Monday, the FCC proclaimed that franchise fees ought to be capped at 5 percent.
Okay, show of hands: who recently signed a multi-year franchise agreement? Okay, now of those of you who just raised your hands, how many of you are paying more than 5% in franchise fees? I see a few hands still up. Seems like AT&T and Verizon will be getting an unfair advantage with license fees, eh?
So AT&T is suing several cities to avoid franchise contracts and franchise fees. Verizon is going to be paying 5 percent or less when it signs long-term franchise contracts. AT&T will probably bring up Verizon's example in those instances where it agrees to pay fees-that-are-not-franchise-fees.
Prior to its breakup in 1984, AT&T had been sued for monopolistic practices so regularly you could set your watch to it. There's a current of thought that suggests the breakup might not have happened if the company hadn't been so arrogant while persistently going out of its way to abuse its power.
Those onerous regulations which recent incarnations of the FCC have been trying to get rid of? Many were put in place to check a company that frequently veered out of control. Many more were enacted after the breakup to force the Baby Bells to actually compete with each other, which they steadfastly refused to do while repeatedly promising that they would.
Since 1984, the Baby Bells have suffered few consequences for failing to comply with regulations. In fact, since the break-up, the Baby Bells prospered by dispatching lawyers and waiting out anyone who disagreed with them.
The last few versions of the FCC have rarely disagreed with the phone companies on anything substantive. You think this version of the FCC is going to clarify the U-verse franchise question, and force AT&T to take a consistent approach to the matter? Keep dreaming.
Envivio picks up three IPTV customers
Envivio said it has delivered IPTV video headends, featuring the Broadcast Series of SD and HD MPEG-4 AVC/H.264 encoders, to three Tier-1 telcos in the Europe, Middle East and Africa (EMEA) region. The company did not identify its customers. Envivio said the three IPTV deals represent over 200 channels of live programming that are expected to reach over half a million subscribers.
U-verse to add three channels from Ion
AT&T has added a set of channels from Ion Media Networks (formerly Paxson Communications), to its U-verse lineup. AT&T will carry ION Television, ION's flagship network, which features a mix of series, movies, sports and specials targeted to families. AT&T U-verse TV will also offer ION's recently launched channel called qubo, a bilingual, educational children's network, and ION Life, promoting active lifestyles, personal growth and wellness.
U-verse touches down in Dallas
U-verse, AT&T's VDSL-fed IP-based video and data offering, has entered the Dallas-Fort Worth area, where it will go head-to-head with cable incumbent Time Warner Cable. AT&T said the service initially will be offered to "limited areas" in the metro region, but it will be expanding the U-verse footprint there "on an ongoing basis."
IPTV to help drive video market over $277B by 2010
Revenue generated by the premium video services market - pay-TV, mobile video, DVD, broadband video and theater/box office receipts - is expected to rise to $277 billion by 2010, up from less than $200 billion in 2006, according to projections from iSuppli Corp. Pay TV represented $120 million of the 2006 total, and much of the projected growth will be driven by increasing revenue from pay-TV services, particularly IPTV.
If advertising revenues are added to the premium video sales, the total market amounted to approximately $370 billion in 2006.
|Worldwide Subscription Revenues for Pay TV - Satellite, Cable and IPTV|
|Total Pay Television
|(Numbers millions of U.S. dollars)|
Source: iSuppli Corp., February 2007
Tivo, Earthlink combine on TV/Internet bundle
TiVo Inc. and EarthLink Inc. plan to combine Tivo video service and via EarthLink's dial-up, DSL or digital voice services into a bundle, available to subscribers with a TiVo Series2 Dual Tuner DVR.
Bundle subscribers will also get traditional TiVo features such as Season Pass recordings, WishList searches, online scheduling, TiVo KidZone, TiVoToGo transfers and TiVo's online services, the company said.
EarthLink said it will begin marketing the bundle later this year. Specific pricing and financial terms of the agreement were not disclosed
Report: MSOs to prosper offering business VoIP
While the commercial sector has long been considered low-hanging fruit for cable operators to pluck, as a group they have generally kept the focus on the residential market. But with the residential market nearing saturation, MSOs are turning their attention to the small business market, and hosted VoIP is the offering of choice.
The global market for hosted services will exceed $34 billion by 2012, of which the North American portion - and most of the cable operators pursuing the small business option are located there - will amount to $11.6 billion, according to a new study from ABI Research.
Over 2M subscribers call on Comcast for VoIP
Comcast passed another milestone with its VoIP service by exceeding the 2 million customer mark. The company celebrated by awarding a customer in southeast Michigan with a digital home makeover to take advantage of the new integrated features that are available through its Triple Play package of phone, high-speed Internet and video services.
ARRIS gets a foothold in Japan
ARRIS' reputation for enabling VoIP has paid off again, this time in the form of an order for its C4 CMTS placed by Katch Networks, a cable operator in Japan. Katch Networks, which provides primary line service to 227,000 homes in Aichi Prefecture, plans to implement the KDDI Cable Plus Primary VoIP service. KDDI is one of Japan's largest telecom providers; cable service providers use KDDI's network to provide primary line VoIP telephony service over HFC, ARRIS explained.
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2006 another record year for U.S. HSD providers
High speed data (HSD) service may be approaching saturation in the U.S, but that isn't slowing the pace of getting to that point. The twenty largest cable and telephone providers tallied a record for HSD additions in 2006. Combined net additions for the year totaled over 10.2 million subscribers, a total that exceeded the previous record set in 2005 by about 500,000 subscribers, according to Leichtman Research Group.
As of the end of 2006, the top broadband providers - which represent about 94% of the total market - accounted for over 53.3 million high-speed Internet subscribers
The top cable broadband providers now have a 55% share of the overall market versus telephone companies, with 29.3 million high-speed Internet subscribers compared to 24.0 million for phone companies. Phone companies continue to whittle away that lead. Together, they netted 54% of the broadband additions in 2006.
The top telephone providers added a record 5.5 million broadband subscribers in 2006, about 230,000 more than in 2005. Cable operators added a record 4.7 million broadband subscribers in 2006, about 270,000 more than the previous year.
"Despite an increasingly penetrated broadband market, both cable and telephone companies were able to add more broadband subscribers in 2006 than in any previous year," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. "With over 53 million broadband subscribers in the U.S., it is increasingly important for providers to focus on gaining profitable subscribers, rather than attempting to set a new record in 2007 for net broadband additions."
Calix claims #2 spot in North American DSL market
Calix has claimed second place (up from fifth) on the list of North American DSL port shipments during the fourth quarter of 2006, behind only a pre-merger Alcatel. Calix is relying on data compiled by broadbandtrends.com, which also shows that Calix remains the top supplier in North America for the fastest-growing DSL segment: broadband loop carriers. Calix shipped 220,776 DSL ports in North America during Q4 '06, a sequential increase of 24 percent and a year-over-year increase of 124 percent.
U.S. FTTx subs to reach 18 million by 2011
The number of U.S. households subscribing to FTTx (fiber to the node, curb, or home) will increase from 3 million in 2007 to 18 million by the end of 2011, driven by aggressive deployment plans from the telcos and increased consumer demand for new data, voice, and video services, according to Parks Associates.
"While fiber is a small percentage of total U.S. broadband household subscriptions today, it will achieve a faster growth rate than what DSL and cable did after their inception," said Chris Roden, research analyst at Parks Associates.
The projections roughly compare with those in another recent report which notes that although FTTx will be successful, in three years it will still be available only in pockets (story here). That study said it expects it to reach fewer than 14 percent of all homes; assuming 120 million U.S. households in 2010, that works out to about 17 million homes passed - or fewer homes passed in 2010 than Parks Associates expects likely to be subscribers in 2011.
Homezone adds wireless component...for a price
Homezone, AT&T's hybrid service that teams DSL connectivity with digital satellite video from EchoStar Communications, said customers can now make and manage DVR recordings via their wireless phones. AT&T said the capability, which costs Homezone customers an additional $9.99 per month (plus any additional data usage charged by the carrier), is offered via any Web Access Protocol 2.0-compliant cell phone or other handheld device.
Blockbuster in Talks To Acquire Movielink
Speaking of filling the ol' data pipes, Blockbuster is negotiating to buy Movielink, the online downloading company owned by the major Hollywood studios, according to the Wall Street Journal (story here, subscription required). The price is likely to be less than $50 million in cash and stock, the WSJ reported.
The acquisition would be mutually beneficial. Blockbuster needs to compete against Netflix, which announced its downloading service in January, and MovieLink needs some marketing muscle to rise above the growing pack of movie download services from everyone from Apple to Wal-Mart.
Microsoft expects to rake in $billions from VoIP
Microsoft sees the shift by business organizations to VoIP running on Microsoft software to generate billions of dollars in revenue for the company.
Microsoft's new server software will transform the telecommunication systems industry the way its Windows operating system changed the computer industry, Jeff Raikes, president of Microsoft's business division, told Reuters.
Raikes predicted the cost of a Web-based phone system will come down by 50 percent within three years.