ISPs Shouldn't Pretend To Be Content CompaniesShould also embrace the wholesale FTTH model, says analyst... ( old news - 12:22PM Tuesday Jan 13 2009) tags: dsl · Fiber · competition · business · alternatives · telco · world · content · Verizon · QwestA New Yankee Group study of global fiber to the home claims that U.S. telcos are doing a number of things wrong, nursing copper instead of deploying fiber being chief among them. The report also takes telcos to task for trying to be network operators and content/service developers, despite not being very good innovators. The move also creates competitors out of potential business partners. From Telephony Online: "The service providers, for a large part, think they can do it on their own and may even see [potential partners] as competitors, which is ridiculous," Felten said. For example, a service provider could partner with a security company to offer home and business security services over their FTTH pipe. "Or they can crash and burn trying to offer their own security service, after which they would turn to the professionals, who then say, ‘But you were competing with me before,’" Felten said. Verizon and AT&T certainly aren't making friends with many content companies over net neutrality, and AT&T is also certainly spending a lot of money on developing everything from three dimensional browsers to content portals. Those funds could be put back into the network, which AT&T consistently complains (accurately or not) is facing capacity armageddon. Yankee Group analyst Benoit Felten goes on to cite another major problem with U.S. telcos: their consistent prejudices against offering wholesale services over a FTTH network to improve ROI: "Even the financial markets are convinced that if you have to share your network, you are going to make less money. If you look at projects that are financially successful, which I would describe as break-even in five to seven years, these are projects with over 60% take-rate. Today, these are relatively small scale – up to a few million homes past. On the scale of a country or a large region, if you want these take rates, you can’t do it on your own. Wholesale may be a lower ARPU [average revenue per user] business, but it is a higher margin business, because costs are much lower." Of course Felten is commenting from Paris, where the French took our now-discarded 1996 local loop unbundling plan and made it work. Really embarrassingly well. Their success resulted in a highly competitive fiber to the home market where consumers are the biggest winners, able to get 100Mbps/50Mbps fiber service, VoIP and IPTV combined for as low as $40 a month. Here in the States, a 50Mbps connection alone from Verizon or Comcast (assuming you can get it) runs excess of $130 a month. But hey, don't our portals look nice.
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Eat Me
join:2002-09-25
Sussex, NJ | ROI Not everyone has deep pockets like Veri$on. | |
|  | Sammer
join:2005-12-22
Canonsburg, PA
| Re: ROI said by Eat Me  :Not everyone has deep pockets like Veri$on. and $$$_AT&T_$$$. | |
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baineschile
2600
Premium
join:2008-05-10
Sterling Heights, MI
 ·Comcast
 ·magicjack.com
 ·Verizon Wireless B..
| Re: ROI if comcast or att were going to spend 70 billion to lay fiber...even in rural areas, where do you think that cost is going to come from? the consumer. you think prices will go down? never.
maybe it can come from a government subsidized program? the consumers tax dollars at work, plus the government control which will just saturate services. either way, the US is geograpically a big place.
france, has 333 people per square km, but most of those people are centrally located in or around paris (with a larger population in the south of france too)
the us has 180, almost half the amount of people per sq/km, and is 10 times as large as france, which means a LOT more $$$$ to run lines.
fiber may be obselete in 15 years anyways, with laser pulsing technology taking over; so why would a company want to invest in that? | |
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53059959
Temp banned from BBR more then anyone
join:2002-10-02
PwnZone | Re: ROI haha fiber will be obsolete in 15 years?
uninstall | |
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sousademiami
join:2003-02-04
Hialeah, FL | Re: ROI I think fiber may likely become obsolete in 15 years or less because of wireless services. If 4G delivers on it's promise, it could be the end of landline services of any kind, TV, Phone, Internet, etc.
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OASAASLLS | |
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funchords
Hello
Premium,MVM
join:2001-03-11
Washington, DC
 ·Verizon Online DSL
·Skype
| Re: ROI said by Eat Me :said by sousademiami :I think fiber may likely become obsolete in 15 years or less because of wireless services. If 4G delivers on it's promise, it could be the end of landline services of any kind, TV, Phone, Internet, etc. That is what I was thinking, but wireless is still very susceptible to electromagnetic interference. Fiber is not. I've seen 4G. It's a rival for last-generation DSL, and kicks-ass when mobile. It's great, but unfortunately it's not going to take us far into the future.
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Robb Topolski -= funchords.com =- Hillsboro, Oregon -- KJ7RL
...just some more roadkill on the Information Superhighway... | |
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funchords
Hello
Premium,MVM
join:2001-03-11
Washington, DC
·Verizon Online DSL
·Skype
| Re: ROI said by sousademiami :...consumer applications, I'm not saying that business customers... Many of us work where we live and live where we work. Our home is our office and our building is THIS NETWORK.
We need to get out of this 1950's "residential class" and "business class" paradigm.
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Robb Topolski -= funchords.com =- Hillsboro, Oregon -- KJ7RL
...just some more roadkill on the Information Superhighway... | |
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A_Tester_of_4G
@intel.com
| said by sousademiami :I think fiber may likely become obsolete in 15 years or less because of wireless services. If 4G delivers on it's promise, it could be the end of landline services of any kind, TV, Phone, Internet, etc. Oh, please! 
In terms of real world speed, WiMAX is at BEST a competitor for current DSL! I'm working with the stuff right now, and it's not that impressive a technology. I'll take my home cable connection any day!
And the financials are worse. It has very high signal strength requirements to sustain a good connection, compared to conventional cellular, and, in its current incarnation, is situated at a very unfavorable frequency. Therefore, it suffers from very poor building penetration, not much coverage, which all translates to needing a LOT of expensive sites to make it work.
LTE will probably be deployed at a much more favorable 700 MHz, but still, it will require a very good signal to deliver good data rates, which will require a lot of sites.
Then there's the backhaul. You need to get that data stream from the wireless site to the core network somehow. Currently, this is a big concern in the industry.
Wireless may will do well in rural areas where it's just too expensive to run miles and miles of cable (in the same way voice wireless has brought phone service to many 3rd world countries), but it's NOT going to render obsolete any current technologies.
And satellite? A niche market at best. Capacity will always be too low, and latency too high, to make it a mass market data technology. | |
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cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN
| said by sousademiami :I think fiber may likely become obsolete in 15 years or less because of wireless services. If 4G delivers on it's promise, it could be the end of landline services of any kind, TV, Phone, Internet, etc. Lets get 3G service to cover a larger footprint before blessing 4G as the savior to all communication services. | |
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sousademiami
join:2003-02-04
Hialeah, FL | Re: ROI Yes, you pegged it, my use of the words "if" and "could" were meant to convey that I was blessing 4G as my savior!
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OASAASLLS | |
| | | | Skippy25
join:2000-09-13
Hazelwood, MO
1 edit | Review their financials. AT&T alone makes NET PROFIT in the billions EVERY quarter. They can virtually pay cash to install fiber in their entire footprint. They wouldnt even be able to deploy it as fast as they earn the money. This is nothing more than a money grab by the duopolies and their stock jockies with little to no site to the future.
The writer of this is dead on. They are dumbpipes that dont realize it yet and they should be just that and regulated as so. France using our 1996 attempt clearly shows this.
You guys trying to continue to use the density argument are entertaining. Take the most dense areas in the US and compare them to the countries that have even less density and in many cases the US is still behind. | |
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DaSneaky1D
one wall to block them all
Premium,MVM
join:2001-03-29
The Lou
·Charter Pipeline
| "laser pulsing technology"
What in the world? Until you can show me a self motivated laser that can bend around a corner, I don't think the fiber medium is anywhere close to becoming obsolete.
Fiber is a physical carrier. A laser is the logical carrier that contains the signal.
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:: my trivial ramblings :: | |
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mrchris
We don't miss you Bush
Premium
join:2002-10-01
North Babylon, NY | The pipe Be the pipe and nothing else, your worthless portal garbage or other stuff besides just providing access. | |
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baineschile
2600
Premium
join:2008-05-10
Sterling Heights, MI | Re: The pipe If there is money to be made, they will get involved.
For a long time, AOL was the pipe and content, and they flourished | |
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Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..
| Re: The pipe said by baineschile :For a long time, AOL was the pipe and content, and they flourished And then this little thing called the internet came along and they were bled dry.  I wouldn't hold up their business model as a shining example of why the ILECs should get into the content game. If anything, it proves exactly why they shouldn't. | |
| | | | Skippy25
join:2000-09-13
Hazelwood, MO
| Re: The pipe I agree completely. However, to their "benefit" they are also in control of the medium for getting there. AOL did not have this luxury. So the AT&T's and Comcast of the world can place caps, restrictions, and premium content fees with little to no consumer recourse. AOL on the other hand lost out because of those things.
NOTE: Overage charges will fall under the category of premium content fees. | |
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Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..
| Re: The pipe said by Skippy25 :I agree completely. However, to their "benefit" they are also in control of the medium for getting there. AOL did not have this luxury. So the AT&T's and Comcast of the world can place caps, restrictions, and premium content fees with little to no consumer recourse. AOL on the other hand lost out because of those things. NOTE: Overage charges will fall under the category of premium content fees. You definitely bring up two very valid points, but those points are central to what most would consider the net neutrality issue. While it seems caps and throttling may be here to stay, if the companies were to say, not count their VoD against the caps, but throttle and count a competitors service they would (will?) open themselves up to scrutiny by the FTC and FCC. With the current incoming Obama administration very pro net-neutrality and seemingly extremely pro-consumer, and Chairman "Telco-Lackey" Martin on his way out, they may not want to jump in that ring.
That is why we are seeing such a vocal movement toward "protocol agnostic" traffic shaping from folks like Comcast. As soon as Time Warner and AT&T roll out and institute their caps, the wording will be the same. | |
| | | | | | Skippy25
join:2000-09-13
Hazelwood, MO
| Re: The pipe I agree completely and that is kind of my point.
AOL failed because the consumer had a choice to either deal with their "throttling" and "counting" or go to an ISP that gave you the whole internet for the same cost.
This current path will begin to make it a walled off internet like AOL. Sure you will still have access, but it is at their discretion and with any surcharges they apply. Toss in that they are pretty much shielded from consumers going to a competitor because in broadband there really is no competition to speak of. And if they are all doing it, there certainly is no incentive to go from one to another anyway. | |
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NetAdmin
CCNA
join:2008-05-22
| said by baineschile :For a long time, AOL was the pipe and content, and they flourished They flourished because the ability to get to any content outside of AOL's was a drag. when AOL had its heyday, back in the 90s, the internet lacked a lot of the readily accessible content that is out there now. There was no reuters.com or cnbc.com. You almost had to have your provider give it to your with your service.
But as it has already been said, with the internet, that model is unsustainable. People are going to get their content from sources of their own choosing. The walled garden approach doesn't work any more.
And providers like Verizon and ATT getting into the internet content game are going to get thoroughly beaten. Companies that focus purely on content will eat them for breakfast because it is hard to beat someone in their core business, especially when it is not yours.
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"This is a bus. You know how big a bus is?" | |
| | 
battleop
join:2005-09-28
00000 | I bet you are not willing to pay what it costs for a dumb pipe. The "worthless portal garbage" helps to pay for and attract other paying customers how help defray the individual costs of the dumb pipes. | |
| | | Skippy25
join:2000-09-13
Hazelwood, MO | Re: The pipe Really? Because I do not know a single person that choose an ISP because of their HomePage Portal. Nor does a single person come to mind that actually uses one of these portals and I do an a lot of computer support for a lot of people. | |
| | | | rradina
join:2000-08-08
Chesterfield, MO
| Re: The pipe I know of very few who even have a choice. I haven't had a choice for over 10 years. When DSL came on the scene in 1998, I've been on the waiting list. Just a few thousand feet out of range. No movement from SBC(AT&T) in all of that time. The local cable company finally offered service in 2000 and I've been with them ever since. I would love to have a choice but AT&T simply cannot provide it.
Last summer they announced U-Verse in my community. Can I get it? No. Too far from the CO. Of course that would be the CO to which I am connected. Two other COs are under a mile but I guess that's not the way the wires were originally buried!
I have choices if I'm willing to go wireless. So far everything wireless I've seen is unimpressive. High latency, packet loss and slow speeds. Does WiMax fix these problems? I don't have any experience with 3G cell networks so I might be judging them unfairly -- however most have limited speeds, monthly caps, contractual ties to voice service and high prices. Cricket now offers a $40/month no-contract plan but I've read mixed reviews. It depends on the market and folks say that it has started out good and gets worse. (Assuming here that as more customers join, speeds and service levels drop...) | |
| | | | | hottboiinnc
ME
join:2003-10-15
Cleveland, OH | Re: The pipe Wireless and cell network internet are different. Have you ever looked into a WISP? who is an actual Wireless Internet provider? | |
| | | | | | rradina
join:2000-08-08
Chesterfield, MO
| Re: The pipe We use a "wireless" provider in our lab at work. It's really bad. 4 - 7% packet loss. Fine for surfing but makes anything else maddening. They've replaced the radio transmitter on our building's roof several times. They've replaced their end but it still has packet loss. My parents out in the country have point-to-point wireless and it too has packet loss. They are about 3 miles from the "water tower" where the ISP's receiver is. Again, fine for surfing but not much else.
Are these examples of WISPs?
Note: Both of these solutions do not use traditional 802 "WiFi" technology. They are wireless but I don't know if they qualify as a WISP. | |
| | | | | | | hottboiinnc
ME
join:2003-10-15
Cleveland, OH | Re: The pipe They are a WISP but i wouldn't consider them like any like Tim or anyone else that posts here in the WISP Forum from all over. There are a couple WISPs here from MO you should talk to them. | |
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battleop
join:2005-09-28
00000 | Someone must be using them. If they were getting zero hits a day they wouldn't run them. | |
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See 7 replies to this post | |
| | Corydon
Cultivant son jardin
Premium
join:2008-02-18
Denver, CO
clubs:
·Comcast
| You're on the right track. Let's follow the money here, using Comcast as an example (since everyone like to beat up on them).
Comcast puts the expenses of running its portal, plus any income that comes from advertising online or what have you into an entry on its balance sheet called "Corporate and Other". This includes all of the corporate expenses (running that nice big new building full of people in Philadelphia) and Spectacor (which is the entity that owns the Flyers, the 76ers and some other sports related stuff) as well as all of the online stuff (Comcast Interactive Media).
Total revenues for that in the third quarter of '08 were $71 million, with an overall operating cash flow loss of $119 million (and bear in mind that the online stuff is basically carrying the entire corporate overhead here). Meanwhile, overall revenues for the 3rd quarter were $8.5 billion. Operating cash flow was $3.2 billion and the operating income was $1.7 billion.
In other words, all of this online stuff is a drop in the bucket. You might as well complain about Comcast's share repurchases ($2.8 billion YTD) or dividend payments ($180 million on 10/29/08).
Source: »www.cmcsk.com/phoenix.zhtml?c=11···ghlight=
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"2 Strangers + 1 20 minute ceremony + $50 + 10 shots of tequila = Holy Matrimony and 1st Class Protections Under the Law… now that’s crazy!" | |
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NetAdmin
CCNA
join:2008-05-22
| said by battleop :I bet you are not willing to pay what it costs for a dumb pipe. I pay for a "dumb pipe" to my house and the costs are only incrementally higher than the standard, home user oriented version.
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"This is a bus. You know how big a bus is?" | |
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See 8 replies to this post | |
b10010011
Whats a Posting tag?
join:2004-09-07
Bellingham, WA | ISP's should be ISP's not content providers. Just give me the pipe, email, and a little web space. | |
| | | | | b10010011
Whats a Posting tag?
join:2004-09-07
Bellingham, WA
·Comcast Formerly ..
| Re: ISP's should be ISP's not content providers. said by Eat Me :said by b10010011 :Just give me the pipe, email, and a little web space. Don't even need the web space. Just open port 80. Personally I do not want to run my own web server but do agree with you that ports should not be blocked and users should be allowed to run their own servers if the wish. | |
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battleop
join:2005-09-28
00000 | "email, and a little web space."
That's not a dumb pipe. Even email would be considered "content". A dumb pipe is A to Z and nothing else. You would need to provide your own Email, hosting, DNS, etc... | |
| | | b10010011
Whats a Posting tag?
join:2004-09-07
Bellingham, WA
·Comcast Formerly ..
| Re: ISP's should be ISP's not content providers. said by battleop :"email, and a little web space." That's not a dumb pipe. Even email would be considered "content". A dumb pipe is A to Z and nothing else. You would need to provide your own Email, hosting, DNS, etc... No that would be internet services, something that an Internet Service Provider should provide.
Content is web portals like »www.comcast.net containing things like Autos, Dating, Entertainment, Finance, Games, Jobs, Music, News, Shopping, Sports, Travel, TV, Videos, Etc... | |
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Karl Bode
News Guy
join:2000-03-02
Host:
Road Runner
PC gaming GAMES
PC gaming Tech
| Re: Stupid It makes ZERO sense to pass up a profitable venture because it doesn't fit the traditional description of the company. The report doesn't say they should pass it up. It does say they lack the skillset to be content developers on their own. This paragraph in particular I think holds the central point:“Telcos don’t have the innovative structures to launch these things fast on the market,” he said. “What they don’t understand – or some of them don’t – is that the Internet has an ecosystem of services – it acts like a venture capitalist for you. There is one project that is going to soar and 100 that are going to die. If you are going to develop these yourself, you have to be willing to invest for the 99 projects that die to get the one that succeeds. Service providers who insist on doing this themselves haven’t faced the fact that they should partner with these people instead of trying to replicate what they are doing.” | |
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Dogfather
Premium
join:2007-12-26
Laguna Hills, CA
·Cox HSI
 ·Verizon FIOS
·Cox VOIP
·ViaTalk
·RoadRunner Cable
·MegaPath
·Verizon west (ex G..
·Time Warner VOIP
4 edits | Re: Stupid What skill set they don't have, they purchase, eg instead of buying the content, buy the company that is making the content like Comcast bought Fandango.
My point is that ISPs should absolutely be content companies as they are well positioned to take advantage of being the pipe to promote their content. And like other content distributors like television networks, there is nothing saying they can't have a mixture of in-house created content and purchased or licensed outside content.
What has me nervous is ISPs having the lobbying power to stop network neutrality and in turn them abusing their market position to price competitors out of the market with either caps, overage fees, degraded network performance of competitor content, etc.
I think is this last thing that has a lot of people in the "community" not liking the idea of ISPs being content generators, even in the realm of television. Case in point is TechTV. I loved TechTV. Comcast had competing G4. Comcast buys TechTV, merges them with G4 and then kills off the TechTV content. Same thing with overage fees. You have Netflix, iTunes, XBOX Live Video, etc that will be priced out of the market with overage fees while cable/telco video skates by...of course by design. | |
| | | | Skippy25
join:2000-09-13
Hazelwood, MO
| Re: Stupid You last point is the entire issue.
They should not be content providers because they can't / won't do it in a neutral fashion that is beneficial to the consumers. They will do it in a fashion that is beneficial to their bottom line and stock jockies first and foremost. This has been demonstrated over and over and over by them over decades, if not century.
They should be dumbpipes nothing more nothing less and regulated as so. One network Nation wide. If they want to provide content, then they should have separate entities that are treated just as any other entity to gain access to the same customers. No special agreements, no backdoor deals, and no special access. | |
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Dogfather
Premium
join:2007-12-26
Laguna Hills, CA | Re: Stupid Even that won't work though. They'll still be up to no good, simply charging "tolls" to content providers like Google or Netflix for 'priority access'. | |
| | | | | | Skippy25
join:2000-09-13
Hazelwood, MO
| Re: Stupid That would fall under the "No special agreements, no backdoor deals, and no special access" provision.
Those companies (Google, Netflix) will pay. They are a business that need access to the internet. They will purchased bandwidth adequate for their business needs.but they will do it based on bandwidth need that is in accordance to standard pricing that any and every other company can access and pay. | |
| PapaMidnight
join:2009-01-13
Baltimore, MD | Spirit of Competition Ah, the spirit of competition is alive and well here in the United States where my choices for Internet is Comcast, Comcast, and more Comcast! | |
| 
SLD
Premium
join:2002-04-17
1 edit | Portals??? Comcast's portal/website is the biggest piece of junk I've ever used. It screams bloatware at a higher pitch than Nero! | |
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See 7 replies to this post | |
| 
KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·AT&T Yahoo
·AT&T DSL Service
·Cox HSI
·AT&T Southwest
| The most efficient Infrastructure system Has always been one where one company would lay down the network and upgrade and maintain it, while offering open access to all comers (for a fee of course) to anyone who wanted to offer services over it--- be it security, Internet connectivity, Online shopping, TV, VOD services, Telephony/VOIP, etc etc etc
This would allow a powerful, modern infrastructure to be in place and continuously be upgraded--- all paid for by the actual users of said network, and at the same time provide much competition, choices, and employment opportunities for the public at large.
Unfortunately this won't happen because we're faced with the "This is MINE" mentality from our communications companies who feel anything that happens on their networks they need to be the biggest benefactors from. They want to own the pipe and all the content too.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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| tmc8080
join:2004-04-24
Floral Park, NY
| The majority are content providers. There was this paradise idea proposed in telecommunications regulatory reform called: recirocal competition for telco & cableco alike. Cable companies get into Phone Service & internet. Telcos get into cable and develop residential internet. For the longest time, cable companies had the decisive advantage because telco's reluctance, foot dragging, technology blunders and franchise snafu's along the way. It's only as far back as 2003 that Verizon finally put it's money where it's mouth was on "we'll get there" with dsl and changed tracks for FTTP. FIOS is not ideal, but it's as close as you can get because with a bigger telco, you get greed multiplied by the number of companies Verizon is comprised of.
Verizon must walk a fine line here.. they are making money hand over fist in their FIOS internet. Yet, they now sell cable-tv so they're in the content business. They're doubling down on LTE wireless and other projects.. that's alot on their plate.. then bang, a recession hits! They took a very long time to change tracks on POTS over fios as well.. but not too late IMO.
Cable companies actually do have alot to worry about because their core business is selling / reselling content, and it's been hard to figure out how to diversity, specialize and increase revenue without alternative sources such as WIRELESS. The remaining players such as Tmobile, Sprint and Prepaid carriers whom buy surplus network time at wholesale.
That's the state of the market today, but cable must find new ways of bringing in the dollars or they will just have to go Toe to Toe with telco in a broadband war. A war cable loses due to the fact that the killer app is probably going to be unpaid video content. Telco has 4 services it sells, while cable has only 3. Companies such as Cablevision see the future and that does mean having a wireless service in the future, but Sprint and/or Tmobile won't play ball.
Notice I don't discuess Qwest, because by 2010, they'll either be bankrupt, or a sub company of AT&T, with certain assets going to Verizon (you know how these anti-trust things work). Yep, I said it.. you will have 2 major telcos and a handful of cable companies. The worker & consumer will be screwed, because qwest will be last on the Uverse list (with the exception of cherry picked major density metro areas).
It is VERY UNLIKELY that FTTP/H will be a reality for a majority of residential customers. Verizon may just turn a corner in the next 10 years and be what they should have begun what they're doing now 6 years ago (an all IP network with FIOS Internet, VOIP Phone, Wireless, and Cable-Tv in relative order of importance to their long term survival).
I do not feel that cable will get their act together in time for companies like telcos to create the perfect monopoly storm, though Cablevision will give them a good run for their money before TWC come a'callin. The same chance Verizon is taking to begin abaondoning POTS is needed to diversify into a wireless multimedia provider. The longer they wait, the better chance a deal will become something like what TWC did with AOL (AOHELL). | |
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Couldn't Agree More