Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
FCC may move to knock down state laws banning muni broadband
FCC head Tom Wheeler says the FCC may move to preempt state laws that make it difficult or impossible for local governments to create competitive broadband networks.
It is good news that the FCC is beginning to more openly support competitive municipal projects, but we will have to wait and see if this actually has any real effect. There is going to be pushback from some states, and there will be vigorous lobbying by the incumbents at both the state and Federal level to stall this initiative.
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"U-verse stinks"
"U-verse stinks." That's not me, that's Netflix, according an article from Lightwave. Here's the interesting quote from Netflix:
"The surprising news is that AT&T fiber-based U-verse has lower performance than many DSL ISPs, such as Frontier, CenturyLink & Windstream..."
This was in a letter from the CEO of Netflix, Reed Hastings, to stockholders. While this little spat between AT&T and Netflix is amusing, it highlights the vast divide between incumbent attitudes about what constitutes good service and what the customers of those incumbents regard as good service. The incumbents believe that good service is whatever they decide they want to give their monopoly-captive customers, while the customers think good service is being able to use Over The Top (OTT) services like Netflix without constant stuttering, re-buffering, and stalling out.
I mentioned this in an earlier post, but I was recently in a community that told me no one wants to live there anymore because of poor Internet service from the incumbent phone and cable companies. It's created an economic development crisis, because senior business managers that are being brought by existing companies in the town are choosing to live hours south of the community. And to make things worse, those same existing businesses are saying they can't expand and add jobs because their business Internet service won't support expansion.
Communities are at a crossroads: You can let the incumbent providers decide your economic development growth potential, or you can take control of your future and make some basic investments in competitive broadband infrastructure.
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Death of TV: Part LXIII: Amazon announces Amazon Fire TV
Amazon announced yesterday their "Fire TV" product, which is a $99 Internet to TV box that follows in the footsteps of Apple TV, Roku boxes, and Google Chromecast. All of these products connect directly to a late model TV and give you easy access to a wide variety of Internet-based content. The Amazon Fire offers Netflix, Hulu, NBA, AOL, Showtime, iHeart radio, Amazon Prime shows and movies, and Pandora, among other offerings. The box also gives you access to Amazon cloud storage for your own pictures and videos.
In terms of competing boxes, the Fire TV probably comes closest to the Apple TV box, which offers direct access to the iTunes store (movies, TV, music) and Apple's iCloud personal storage service.
I remain kind of ho-hum about all these devices, because I can access all the same stuff right on my computer at home, and simply watch the content on a large screen monitor. I have a hard time getting excited about a box that duplicates what I already have. But these boxes can deliver higher quality video, and if you have a large screen TV that you want to use for entertainment, these boxes deliver a lot of value. I dumped my cable subscription years ago, but even with Netflix, Amazon Prime, and Hulu subscriptions, I just don't watch much TV...perhaps a couple of hours a week at most.
I see two significant things with this announcement. First, Amazon continues to deliver incredible value to its customers, and this box really ties together their other services like Prime video and cloud storage. This puts pressure on Apple, Google, and Microsoft to offer more and better products--always a very good thing. Second, it is getting easier and easier to cut the cable/satellite TV subscription. Comcast seems to have finally begun to agree with me that the old cable TV model is about dead, and is more focused on delivering improved Internet access to its customers. But a monopoly is a monopoly, and even if you save money in the short term by dumping your TV subscription, expect the cable companies to keep increasing their fees for Internet...because they can.
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Apple buys Radio Shack
In a surprise announcement this morning, Apple CEO Tim Cook announced that the giant computer and phone maker has purchased the Radio Shack Corporation. Radio Shack has attracted a lot of attention recently for the company's clever "The eighties want their store back" ads that attempted to highlight Radio Shack's shift in marketing strategy. But industry analysts have been uncertain that the changes were enough to bring some momentum back to the company.
When interviewed about the move, Cook had some interesting comments. "With the continuing success of our Apple stores, we wanted to dramatically expand our retail footprint, and we've nearly exhausted the big city venues. Radio Shack's most valuable asset are the thousands of stores in smaller towns and cities. This gives us an opportunity to expand quickly."
Cook went on to reveal a stunning new product line that could dramatically alter Apple's future direction. Cook explained, "We kept looking at the huge success of Maker Spaces and of products like the Raspberry Pi single board computer. Personally, I just got tired of hearing there is no innovation left at Apple. So we said, "To hell with it, let's go for broke." We are renaming the Radio Shack stores as "Apple Shacks," and the flagship product is going to be a keystone item in an entirely new Apple product line aimed at Maker Spaces and experimenters: The Apple Pi."
Norman Feisterburger, Apple's new head of the Apple Shack line of business, provided more detail about the new product. "The Apple Pi is a single board computer designed for the huge surge in interest that Maker Spaces are bringing to the hobbyist market place. The Apple Pi comes with everything you need to get into programming, house control, media control, and "maker" projects. The board has HDMI, Ethernet, and USB interfaces, and comes with 32 Gig of storage space in a micro SD card. And best of all, the Apple Pi comes loaded with the command line version of Unix and the Mach kernel that runs on all Mac, iPad, and iPhone products. We're opening up the Mac platform to a whole new generation of "makers," and we expect that the Apple Pi will become the dominant platform for development in the "Internet of Things."
When asked about the cost of this new venture, Tim Cook brushed off the financing issues. "Radio Shack has been struggling for so long, we were able to pick up the whole company, including all the stores, for a little less than $7 billion. And to tell you the truth, we came up with the idea when an intern was cleaning out some filing cabinets in Steve Job's office and she found $14 billion stuffed in a bottom drawer in an assortment of international currencies. We looked at the cash and said to ourselves, "We are getting slammed in the press for not being innovative. What this calls is a really futile and stupid gesture be done on somebody's part!" So we all shouted, "Let's do it!" I got on the phone with the CEO of Radio Shack and we closed the deal in less than a week.
Cook indicated that the rebranding of the stores will take place on April 1st, 2014, and he also hinted that a Retina-based 12" iPhone may be released at the same time.
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Fiber or die: The rural challenge
I was in a rural community recently that is already in crisis because of poor broadband service. What they told me is that new hires for businesses in the town simply won't live there. Instead, they are locating their families about an hour and a half away and enduring two to three hours of commuting each day to work.
What are the issues? The kids can't do their schoolwork at home because of poor connectivity. The stay at home spouse can't effectively use online shopping to support living in a rural area with limited bricks and mortar stores. The kids feel cut off because social media sites like Facebook, Pinterest, and many others run slowly or not at all. Families can't use services like Hulu and Netflix and there are no video stores left. Home-based workers and home-based business development is completely stalled out because the very poor quality DSL and cable modem services in the area simply won't support two way video (e.g. Skype, GoToMeeting, Webex), moving large files back and forth, and efficient access to cloud-based services.
I still have some economic developers who look at the Netflix stats (video on demand services are using over a third of all the bandwidth in the U.S. on nights and weekends) and don't see the connection to economic development. But if you can't attract workers to your community, you also are going to have problems attracting businesses to your community. It's all one problem.
The businesses that were already in the community were screaming for more bandwidth and desperate for both more than one service provider and more than one cable path out of town. Redundancy has become a huge issue even for small and medium sized businesses as more and more business data is moved in real time between the businesses and off-site servers (i.e. the "cloud").
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Comcast wants to buy Time Warner
Comcast and Time Warner have agreed to merge, with Comcast buying Time Warner. Although this merger has to be approved by Federal regulators, the article suggests that since the two companies don't have overlapping territories, it may well be approved.
The merger would combine Comcast's 22 million subscribers with Time Warner's 11 million subs, and Comcast has said it would sell off 3 million subscribers to keep the new company below 30 million customers. Supposedly that is some threshold that determines if the company will have too big an influence on the market.
This smells of desperation to me. Cable TV is dead, dead, dead, with Over The Top (OTT) services like Netflix and Hulu killing off cable and satellite TV. I was in a rural community for a week recently. There were three complaints:
- The lack of bandwidth is killing our Main Street businesses.
- No one can work from home because the bandwidth available is too limited.
- We are having a hard time attracting families because services like Netflix and Hulu are unusuable, and the kids are revolting.
Aside from the fact that copper-based coaxial cable is grossly inferior to fiber, the cable companies simply can't provide business class symmetric services over their "entertainment" networks in any sort of consistent way, and they know it. So they are going to merge to give them market clout on the content side, and they are going to continue to try to buy laws at the state level, like they just tried in Kansas.
In less than ten years, most American homes will have fiber. It is as inevitable as flush toilets, which were once considered a luxury. And when the dust settles, the communities that introduced competition by creating shared digital road systems are going to be doing much better economically.
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How fiber supercharges economic development: Lafayette, Louisiana's success story
Broadband Communities magazine has a story that should be required reading for every community wondering if there is linkage between Gigabit fiber and economic development. Lafayette's municipal Gigabit fiber network has brought Hollywood special effects jobs to the community, more than a hundred, because the high performance Gigabit network lets Pixel Magic move the computer files back and forth between Lafayette and California quickly.
Pixel Magic brought jobs to Lafayette because the local economic developers created a 3D visualization facility (Louisiana Immersive Technologies Enterprise, or LITE) that was designed specifically as an economic hub. LITE has been a huge success that has attracted several new companies to Lafayette. You don't think of Gulf Coast Louisiana as a high tech destination, but the combination of Gig fiber and a broad economic development vision has been successful.
Lafayette's success also demonstrates that you can't rely on the Field of Dreams model: "If we build it, businesses will come." Lafayette has been successful because they linked their fiber network to a carefully thought out economic development strategy. Be sure to read the whole article. It's an eye-opener for those arguing that communities should not be investing in fiber.
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Health applications are going to be the killer app
In the nineties, as the Internet became more popular, there was a long-running and often tedious discussion of what the "killer app" was going to be that would make everyone get Internet access. I always thought the whole discussion was a waste of time, because it was obvious to me that at that time, email WAS the killer app. People signed up for Internet access because they recognized the value of email for business use, personal use, or both.
There is a similar discussion underway for broadband and particularly broadband over fiber (i.e. fiber to the home). I think it will be health services and applications. The Internet has already begun to disrupt the way health services are delivered, but we have barely begun to see what is possible. Today, services like Fitnet provide personalized interactive work out sessions, along with related products like the Nike collaboration with Apple that tracks runners and joggers. Apple watchers suspect that the company is going to roll out sophisticated new apps for both iPhones and Macs.
Other companies are preparing to offer doctor visits via HD webcam-enabled software, and if companies like Apple lower the cost of sensors that monitor your health (e.g. blood oxygen levels, heart rate, blood sugar and insulin levels) we could see significant changes in the way health care is provided.
The most potential is for improvements in the management of chronic health problems like diabetes and heart disease, where the ability of low cost sensor to provide hourly and daily monitoring of key information could lead to early diagnosis and better treatment.
Most of these services are going to require a broadband connection, and cutting out just one $80 copay for a doctor visit per month will easily cover the cost of a fiber connection to the residence. Communities with aging populations and/or are desirable retirement locations will want fiber everywhere to deliver health care services where they are needed.
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Showdown and slowdown in Kansas over muni broadband
An old friend of mine once remarked, "In Texas, we have the best laws money can buy." Apparently, folks in Kansas can make the same statement, as a blatantly anti-muni broadband bill was introduced in the legislature last week. The bill was so stringent that it would have made the Kansas City/Google deal impossible, which is a good example of a public/private partnership that brings a lot of benefit to the residents and businesses of the city.
But the Internet exploded, and the bill has been tabled for the time being." You do have to give Kansas Senator Julia Lynn some credit for honesty, as she remarked, ""I visited with industry representatives, and they have agreed to spend some time gathering input before we move forward with a public hearing," she said."
At least she is not shy about admitting that the incumbents are telling her what to do, rather than the citizens that she supposedly represents.
These kinds of bills are going to continue to pop up, because the incumbents have been successful in states like North Carolina, where a slightly less stringent bill was passed about three years ago.
I remain an optimist in spite of these attacks on communities, because there are ways to get Gigabit networks into communities even if the state legislature has made it difficult to do so. Over at WideOpen Networks, we're already well on the way to solving this problem for good.
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Net Neutrality court decision: No telling how this will turn out
A couple of weeks ago, a U.S. Appeals Court told the FCC that their net neutrality rule was invalid. This has caused a huge debate among broadband industry folks about what comes next. The court ruling hinges on the way the FCC categorizes services like TV, phone, and Internet as either a "telecommunications service" or an "information service." To make things even more complicated, the FCC definition of "common carrier" also factors into the rules.
I have read at least two dozen opinions about what all this means, and I have yet to see even one address what I think is the core problem: the FCC is trying to make rules about Internet use based on two definitions (information service, telecommunications service) developed decades ago when cable TV was based on a technology completely different from voice telephone service.
When we can deliver literally hundreds of services from competing providers over a single fiber strand to a customer, why are we trying to make rules based on outmoded and antiquated service classifications.
I have always been a contrarian with respect to net neutrality; despite protests from the incumbents over the FCC's net neutrality rules, I have always thought the incumbents were the biggest beneficiary of net neutrality, as it makes it more difficult to build a business case for a competitive network in a community. There is going to be some pain associated with migrating away from the current de facto incumbent monopolies that exist in most communities today. Better to get it over with sooner rather than later, and get more businesses and residents connected to a truly competitive fiber network, rather than trying to prop up the incumbents.
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