I just got a postcard from Verizon telling me FIOS will soon be available in my neighborhood. While I’m probably one of the last residential CLEC subscribers in the United States, I’m a firm believer in the idea that fiber is better and have been waiting for FIOS to become available so I can look at switching.
Then I saw the prices. Yuck. Verizon prices its FIOS as “competitive” with cable and other providers in my region — for a premium service. But it takes more than competitive to get me to go through the hassle of switching, especially when I am reasonably comfortable with my service right now. Switching doesn’t just mean spending several days going through hook up Hell and having Verizon install some super duper power pack on my premises. It also means changing a whole bunch of things tied to my (or my wife’s) current email address. That’s no small deal.
Meanwhile, as everyone knows, the cable operators did better at gaining new broadband customers in Q2, although uptake for broadband was generally anemic. Not surprisingly, Verizon defends its performance on its policy blog. Besides the usual (when you do poorly) inveighing against looking at a single quarter. Verizon points to a number of indicators that its FIOS system is the top dog system in the U.S., with possible top speeds of up to 50 MBPS and usually providing its advertised speed (I love that as a selling point!). Still, analysts argue that Verizon is pricing itself out of the market, and should go back to DSL.
I have a different take. I think VZ needs to get people addicted to speed.
More below . . . .
In an interesting turn of events, industry analyst Craig Moffett takes a look at the growth of cable broadband and overall subscriber growth, as compared with that of telcos and satellites, and comes to this interesting conclusion: Cable is a natural monopoly in the making — and has been on course to do so since about 2005.
What is interesting to me is this is the same Craig Moffett who, during the fight last year on whether cable penetration had triggerred the 70/70 rule that would enable the FCC to significantly regulate cable by reaching 70% penetration, rushed to Commissioner Adelstein (the swing vote in last year’s fight) to explain that cable penetration remained stuck at 60% and would never reach 70% because of all the amazing competition.
Mind you, we all make bad predictions (I still remember with considerable heartbreak my Great Google Prophecy). But Mr. Moffett has a habit of telling Wall St. what a great investment cable stocks are while telling Washington how wildly competitive the market is, how cable can’t possibly exercise market power, and how in no way shape or form should anyone even think about regulating this market.
With Kevin Martin repeatedly saying he is unlikely to act on a proposal by small cable operators to unbundle expensive cable programming and retransmission rights for broadcast signals at the wholesale level, the coast no doubt looks clear to start explaining why cable is such a great investment and will crush its competition. But I will be curious to see what happens if, for example, Congress holds hearings on the FCC’s decision in the Comcast complaint and asks whether we need to regulate broadband. Will Mr. Moffett stand by his “natural monopoly” analysis — even if he argues for deregulation for other reasons? Or will he suddenly discover new life in FIOS, WiMax, and other potential broadband competitors?
Stay tuned . . . .
It is quite possible that the most important piece of campaign finance reform to pass in 2006 will be Senator Wyden’s “Internet Non-Discrimination Act of 2006.” Until now the internet did not require candidates to raise huge amounts of money to pay for the ability to reach voters. Without Net Neutrality, all that changes. The internet will increasingly come to resemble radio, television and cable, where the well-funded buy their way onto your screen and the rest get crowded out. Not because of any evil corporate conspiracy or antidemocracy cabal, but because of the iron rules of economics.
If companies can make money charging political speakers for premium access, they will. If that’s bad for democracy and free speech, too bad. Companies aren’t in business to promote democracy, but to maximize value for shareholders. If that means that well-funded candidates and talk radio hosts can buy “premium” access while independent bloggers and pod casters can’t, that’s what will happen. Too bad about that democracy and free speech thing. Nothing against it you understand but, y’know, it’s just business.
Sorry to go dark so long. I was on the West Coast pretty much all last week, then came home in time for the Jewish New Year. Lots of stuff to blog about and will try to do updates over the next week or so.
Last week, I was at the amzing and cool conference put together by Esme Vos of muniwireless.com. Esme is proof of why the Internet is such a wonderful tool. With nothing more than interest and dedication two years ago, she created the muniwireless website which is now a central news source and repository of information about municipal wifi.
I’ve attached below the speech I gave at the conference last week. It’s 6 pages, so it’s kinda long.
Stay tuned . . . .
Sometime real soon now (perhaps as early as tomorrow), the FCC will reclasify DSL as an “information service” and the same rules that right now apply to cable broadband (i.e., none) will apply to DSL.
I have been very happy as a residential phone and telco subscriber to Cavalier Telephone. I’ll sure miss them when they’re gone . . .