Cable Broadband
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The bandwidth speed battles between Cablevision and Verizon are getting bloodier. Cablevision has been pushing the envelope and is forcing Verizon to do things a Bell typically doesn’t like to do - offer real broadband level speeds.
Verizon has announced that it will sell a 50 megabits down and 10 5 megabits up connection for $90 a month. (Thanks Tom, for pointing out that the business offer was 50/10.) The service is available where Verizon FiOS network is live in the states of New York, New Jersey and Connecticut.
This is an interesting move -does this mean Verizon is now just a pipe provider (and there is nothing wrong with that.) I have argued this is the best recourse for the phone companies is to sell more bandwidth at premium prices - turn the Moore’s law to their advantage.
Written by Om Malik on July 18th, 2006 with no comments.
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Comcast Interactive, a division of Comcast, has snapped up ThePlatform, a digital media services company based in Seattle, according to sources close to the company. While I was typing this up, PaidContent published the details of the deal.
The purchase price is pegged at between $70 to $80 million and the company will likely continue working with existing clients such as Verizon’s VCast and Scripps. The six-year-old company had raised about $8 million from Spark Capital. I guess, Comcast is getting serious about this whole digital media thing and is trying to develop some more Internet properties for its broadband users.
Written by Om Malik on June 27th, 2006 with no comments.
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Cablevision, a Bethpage, NY (Long Island really) based cable company has announced that it is increasing the speed of its standard broadband connection to 15 megabits-per-second and 2 megabits per second upstream, without any additional costs to the customers. In comparison, the company used to offer speeds of 10 Mbps downstream and 1 Mbps upstream as a standard previously.
The company is also announcing Optimum Online Boost, a new 30 megabits per second service, at a higher cost. Optimum Online Boost is available for an additional cost of $14.95 per month, $9.95 per month for residential customers who also subscribe to Optimum Voice. Okay I know there is this whole competition thing with Verizon FIOS, but still, I am glad to see Cablevision increase the speeds, in keeping with the demands of today’s digital life. I wish my cable company, Comcast got its act together and gave us San Francisco people a bit of a speed boost.
PS: In case you were wondering about the LIE comparison - You cannot drive faster than 30 miles per hour during week days and 15 miles per hour on the weekend (with the rich Manhattan moving en-masse to the Hamptons) on LIE.
Written by Om Malik on June 21st, 2006 with no comments.
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Dave Burstein, who writes the very influential DSL Prime e-mail newsletter, and one of the earliest champions of DSL and Broadband has some interesting observations to make about the future of DSL.
His words, not mine: “ADSL is so last century. Today, it’s fiber home or fiber + VDSL at 50 meg or more. Japan is the first country to see a major drop in DSL as 5 million switch to fiber.” Now that is telling, because the man makes a living tracking this industry, so he knows the clock is ticking. He says that Comcast head honcho Brian Roberts is betting that the cable giant will go “50 meg down, 15 meg up pre-DOCSIS 3.0…in selected markets” by 2007. (Cablevision already is offering those kind of speeds.)
Meanwhile, Australia, Canada, and more than half of the U.S. are likely to spend the next decade with a second-rate Internet, 60% to 90% slower than leading countries.
Written by Om Malik on June 8th, 2006 with no comments.
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Cablevision reported impressive growth in its broadband and voice telephony business in the first quarter of 2006.
High-speed data customers up 112,289 or 6.6% from December 2005 and 366,044 or 25.4% from March 2005.
Voice(IP) customers up 133,967 or 18.3% from December 2005 and 500,828 or 137.4% from March 2005.
UBS analyst Aryeh Bourkoff estimates that now Cablevision’s Voice subscribers represented 19.2% of homes passed as of 1Q06 and will reach 26.4% by the end of the year, which implies about 1.2 million voice subscribers by end of 2006.
The company says it will increase its spending in 2006 on equipment that will help with broadband upgrades to compete with Verizon FiOS service.
Written by Om Malik on May 10th, 2006 with no comments.
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“While the phone companies are only just starting to dig up your yard, cable is already in your house,” Dick Parsons, CEO of Time Warner laying down the smack on the phone companies. He has a point…
On the data side, phone companies added 1.513 million broadband connections, while cable companies added 909,000 connections so far, with Cox and Cablevision yet to weigh in .. my guess is that the quarter will be a tie for the two companies.But cable companies are hitting phone guys where it hurts the most…the voice business.
- BellSouth - total access line declined 6.1% (238,000), residential lines declined 8.8% (120,000) to bring down the total access lines were 19.8 million.
- AT&T saw 6% (600,000) drop in access lines to bring down the total to 48.8 million
- Verizon lost 7% (830,000) access lines to bring the total down to 47.97 million
- Qwest lost 5.2% of total access lines.
That works out to about nearly 1.75 million lines. I suspect some portion of it is going to wireless providers (which are mostly Bells without wires…) because people just want a cell phone. Still, in comparison to phone companies, cable guys added 550,000 voice customers. Cox/Cablevision are yet to report.
- Time Warner Cable added 270,000 VoIP customers.
- Comcast added 211,000 (lost about 70,000 old voice connections bringing the total net new adds is 141,000)
- Charter added about 69,600 Voice customers.
- Vonage added 283,000 new customers.
Hat Tip, Keith
Written by Om Malik on May 3rd, 2006 with no comments.
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The big broadband providers ( TW, Cox, Qwest and Cablevision are yet to report) have added close to 1.9 million broadband subscribers in first quarter of 2006. That works out to approx. 19.5% of the 9.63 million who signed up for broadband in entire 2005.
- Verizon added 541,000 broadband subscribers bringing their total to 5.7 million. UBS says about 100,000 were FiOS customers.
- BellSouth added a record 263,000 DSL net adds in the first quarter bringing the total to 3.1 million total customers
- AT&T added 511,000 new DSL users and now has 7.432 million broadband subscribers.
- Comcast added 437,000 broadband subscribers, to take their total to 9 million subscribers.
- Charter added 126,000 subscribers to bring the total to 2.322 million
Written by Om Malik on May 2nd, 2006 with no comments.
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No, I have not gone on vacation. Instead, I am busy writing the next cover story for the magazine, along with a couple of other short pieces, and am horribly late. So posting is going to be light for a couple of days. And if I haven’t answered your email, don’t take it personally - there are 600 messages that have piled up in just day. Still, couple of things which have been sitting in my inbox and are worth sharing.
- Future of The Bells Is DSL
Did anyone notice that AT&T introduced a three tier DSL pricing structure and are now offering a 6 megabits per second connection for $28 a month. (1.5 Mbps and 3 Mbps cost $13 and $18 a month respectively.) That’s twice as much as what BellSouth is charging for the same speeds. In other words, either AT&T will raise its prices after the deal with BellSouth closes or BellSouth will drop the prices.
Nonetheless, BellSouth added a record 263,000 DSL net adds in the first quarter equating, while AT&T added 511,000 new DSL users for the same period.
John Hodulik of UBS thinks that while voice might be making them the most money, it is DSL which is strategically more important and is now the “anchor product of the consumer bundle.” In other words, it is going to be the proxy for their future (residential) market share.
Talking about the new Ma Bell, AT&T will soon start offering “Vongo” Internet movie-delivery service to its DSL customers. The companies will feature a co-branded AT&T and Vongo Web site and special promotions. Vongo works only on Windows-PC and costs about $10 for unlimited access. PPV is $4 a month. First Akimbo, and now Vongo, I tell you that either someone is having a change of heart over in San Antonio, Texas or that IPTV this isn’t going too well.
- For Comcast, Broadband, VoIP are hot
So just to ensure a little balance, a quick take on Comcast’s earnings report for the most recent quarter - they added 437,000 new broadband subscribers, better than most analyst estimates of 345,000. Average revenue per unit (ARPU) - $43.14. Doesn’t look like the competition is having any impact, because it is higher than fourth quarter ARPU of $42.38. Broadband revenues: $1.1 billion. Forget all that - the biggest news is that Comcast added 211,000 VoIP subscribers, though 141,000 are “net new customers.” And this when VoIP is not even available in the entire footprint of Comcast. Someone should be extremely worried... don’t you think?
[Clarification from Comcast PR: we added 211K net new Comcast Digital Voice (VoIP) voice subscribers, and lost 70K customers for our circuit switched phone business (this was expected – we’re not trying to grow or expand). Netting those two out, we gained 141 K total voice customers (digital voice and circuit switch combined)we added 211K net new Comcast Digital Voice (VoIP) voice subscribers, and lost 70K customers for our circuit switched phone business (this was expected – we’re not trying to grow or expand). Netting those two out, we gained 141 K total voice customers (digital voice and circuit switch combined) ]
Written by Om Malik on April 27th, 2006 with no comments.
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By Cyrus Farivar
While I may not be a cheap graduate student anymore, I still try to pinch my pennies as much as possible. As such, as far as Internet service goes, I’m more sensitive to lower prices (for lower service), than I am to getting double or triple the bandwidth for $10 or $15 more.
My AT&T (formerly SBC) DSL costs me $40 a month for DSL service and a landline phone that I never use. My contract is up in early June, so I decided to explore my options for DSL in the area. I’m not interested in cable Internet, as I don’t have a TV. I asked around to some of my journalist buddies and called a few companies for quotes. Om suggested that I see what Comcast would charge for just Internet. They quoted me $60/month. As Om said, “Not bad for six megabits.” (Om adds: I am getting a 6 mb/s downlink though the service officially says 3 mb/s.) True dat, but still the most expensive quote that I heard. For me, I’d rather save $20 and cut that service by one third.
I tried Speakeasy, which seems to have become the cool kids’ ISP. Heck, even Paul Boutin endorses it. They quoted me 1.5 MB down/384k at $56 for naked DSL. A good deal to be sure, but if Om’s six megabits/second is right, then four dollars is a pittance for greater than three times the speed. One benefit of using Speakeasy is that they will let you share your connection without violating their terms of service. So that way I can be a Fonero in good conscience.
I also checked in with Covad. They quoted me the same service as Speakeasy, but for $10 more. No thanks. So what’s the secret, then, to super cheap DSL? Stick with AT&T. When I called them on the phone they said that they could renew my current service (at 384k down if you must know) at their current promo rate of $26/month (for a one year contract), plus what I currently pay for the phone line at $20/month.
But a quick visit over to their website illustrates that their online deals are better than that: $12.99/month for a year contract, or $5 more for 1.5 down/384k up — which is exactly what Speakeasy is offering. If I want the cheapest deal, I think it’s clear which one I’ll pick.
Cyrus Farivar is an assistant editor at Macworld. He is also the host and
producer of the Macworld Podcast
Written by Om Malik on April 12th, 2006 with no comments.
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Forrester Research just released a new report, The State Of Internet Access, based on a survey of more than 4,500 US households and here are some of the key findings.
- More than 50% of online US households are using broadband.
- DSL is gaining ground on cable.
- Consumers are still more interested in price than speed.
- Broadband users show little desire to switch providers.
- ISPs will have to re-orient their marketing programs to simpler pricing, product offerings, and distribution in order to attract less tech-savvy mainstream consumers.
The report indicates that when it comes to broadband, we are moving towards the base of the pyramid and making money is going to be tougher, and both the phone and cable companies will have to come-up with a simpler way of selling broadband. In addition, the burden of sale is going to fall on cable guys who frankly have not done a good job of selling a cut-rate service.
Take for instance, Cox which is selling a lame 256 Kbps synchronous link for $24.95 per month in middle Georgia. Why would you buy that when DSL is cheaper! If cable cos don’t start pushing the budget offerings don’t, then perhaps they will lose the chance of stealing customers from the Bells. For the Bells, well, another sign, that despite all the talk about cool technology, the IPTV thing is not going to be that easy.
Written by Om Malik on April 11th, 2006 with no comments.
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When Carl Icahn was needlessly hounding the Time Warner management (my employers), I urged caution and asked them to stay the course. A few weeks ago, a chart in The Economist showed that despite a checkered past, there is web life in this conglomerate called Time Warner.
It needs some work, according to my colleague Erick Schonfeld who has just published a piece, Five Ways To Fix Time Warner. It is a very Web 2.0 centric “quick-fix” recipe, and while I agree with the overall premise, I disagree with Erick’s contention –dump the distribution.
Time Warner should dump its capital-hungry distribution businesses — its cable operations and the dial-up part of America Online — and become a pure content company.
I tend to believe more in pipes and networks than in the new new mantras that preach that content and distribution should be independent of each other.
I think we have to be very careful about preaching radical change without taking into account the fact that we are living with an effective duopoly when it comes to the Internet access in the US. Time Warner Cable is one half of that duopoly, which puts it at an advantage. Giving up on distribution is giving up on a good thing.
Let me explain why. Given that about 70 odd analog channels bring in around $50 a month, the per-channel value is pretty low. However, that very same channel when used for broadband brings in about $40 a month. On an average, the cost of offering broadband is about $10 a month per subscriber.
Compared to the cost of content creation in a TV channel, and what Time Warner has to pay to say MTV or whomever; broadband is the cheapest and most effective use of spectrum available inside the cable system. Add voice to the mix, and the revenues increase to about $80 a month. Distribution, aka pipes, is a pretty good business. Even AOL dial-up makes money. AOL sells dial-up for $25 a month, but since the whole modem banks and management of the whole network is outsourced to Level 3, it really costs about $8 a month. Do that math: it may be dying a slow death, but dial-up is still cash money. It helps pay down the debt.
The problem with Web 2.0 is the one dimensional thinking. It only thinks about the web. The world has transformed - on one network rides voice, video, data and mobile. They are not discreet networks, but instead part of an big IP-mash-up. Any company which plans to remain relevant in the future has to treat these as features of a big network. And content is the glue that brings them together. Voice, for instance is the cheapest and unending user generated content, that only enhances the value of that “one network.”
Viacom is making all these herky-jerky digital moves because it doesn’t have the pipes. Similarly, News Corp. has that very same problem. TW on the other hand is not that much of a problem. With network neutrality in bit of a jeopardy, TW Cable can ensure that the company is first among equals - Comcast, AT&T, Verizon and Qwest. That pipe is going to ensure that rest of Erick’s suggestions actually get to see the light of the day. I could go on about this, but I will stop. Still, what is Erick’s best suggestion?
Meanwhile, the remaining AOL.com content business — which includes such underutilized assets as AOL Instant Messenger and MapQuest — should relocate from Dulles, Va., to Silicon Valley. That way it can cross-pollinate with the true innovators of the Web and possibly pick up some entrepreneurial zip that it has sorely lacked.
Written by Om Malik on March 23rd, 2006 with no comments.
Read more articles on VoIP (the New Phone) and Wired and Cable Broadband.