Taking steps to fill the relatively long-standing vacancies at the FCC, President Bush today nominated a favorite of Senate Majority Leader Bill Frist (R-TN), Tennessee regulator Deborah Tate, to fill one empty Republican Commissioner seat, leaving one Republican slot at the Commission still unfilled.
The President also renominated Michael Copps, a slightly pro-regulatory, Democratic voice at the FCC. Both nominations must past muster and be approved by the Senate Commerce Committee and the full Senate.
Posted by Cynthia Brumfield at 11:24 PM | Print | Comments (0)
The House Commerce Committee held hearings today on the revised telecom reform bill, a draft that gives greater relief to the phone companies and waters down some of the earlier legislation’s language on network neutrality. During testimony, the most divisive issues raised by a Telecom Act rewrite, disparity in regulatory treatment between cable and phone companies and the idea of imposing network neutrality rules on broadband providers, stood out in stark relief.
As they pursue the video business, phone companies don’t want to be burdened by “legacy” regulations, such as 5% franchise fees applied to gross revenues or full franchise area build-outs, that cable operators have had to follow. SBC Senior EVP and General Counsel Jim Ellis endorsed the second draft of the bill, which reduces franchise fees for telcos to only a portion of total revenues, namely video services.
…the bill would tackle the issue of the extent to which cable franchise regulation, designed for the incumbent cable operators when they entered the market as monopolists, should apply to next-generation video services. By eliminating legacy franchise regulation for these broadband providers, the bill would create incentives for broadband investment, innovation and competition.
Michael Willner, CEO of cable company Insight Communications, toted the cable industry part line by arguing that “like” services should be treated alike.
First, like services should be treated alike, and all providers of those services should play by the same rules. What matters to consumers, and what should matter to policymakers, is not the technology used to provide services, but the services themselves.
Network neutrality got a good airing as well. Chris Putala, EVP of Public Policy at EarthLink, praised the inclusion of net neutrality provisions in both the older and revised draft bill.
Moreover, while a broadband network operator may offer its own high quality services and manage network and routing to do so, it cannot unreasonably impair or interfere with access to or use of other lawful Internet content, applications or services while doing so. These basic consumer empowerment principles will ensure that consumers can continue to have access to the services they want in the broadband marketplace.
But Putala wants Congress to strengthen the net neutrality provisions so that they apply to resellers of broadband service, and not just the network owners. Moreover, Putala raised the profile of a little-discussed but much-feared aspect of the current broadband network duopoly: phone companies and cable companies might not refuse access to competing services and applications, but they might give these competition options lower priority in transmissions.
The Subcommittee should make clear what I believe is the intent - that this provision does not permit, for example, a BITS [broadband Internet transmission service] provider to provide a higher capacity service only if the subscriber uses the BITS provider’s content or application. Moreover, if a BITS provider makes a network management decision (such as to prefer voice packets over video packets), that should apply to all voice packets, not just the BITS provider’s voice packets. Put another way, if a customer decides to purchase the right to use the “fast lane” service, it should be able to use the “fast lane” for all her applications and content, not just the applications and content that the BITS provider would prefer.
SBC’s Ellis was silent in his oral and written testimony about net neutrality rules, but the Democrats on the committee, namely Ed Markey (D-MA) and Rick Boucher (D-VA), pushed Ellis to agree that SBC would not hamper consumer access to competitive services over the “public Internet.” (Ellis kept stressing the “public Internet,” a curious locution that made me think SBC has something up its sleeve, like maybe its own “private” Internet.) [UPDATE on 11/10: Communications attorney extraordinaire Howard Symons, who was seated behind Michael Willner at the hearings and knows the inside baseball moves in this legislation’s drafting, told me that Ellis’ use of the term “public Internet” stems from complicated discussions in the bill’s drafting that have to do with carrier culpability for copyrights on the content transmitted over the Internet. It’s too complext to explain here, but Ellis wasn’t splitting hairs in his use of this term.]
For another take on the hearings, Drew Clark has an excellent summary in National Journal’s Tech Daily.
Posted by Cynthia Brumfield at 10:54 PM | Print | Comments (0)
Microsoft and the Associated Press have teamed to produce an online video news network. While the AP already offers an online news feed to its member companies, typically newspapers or broadcast stations that stream clips from the AP feed, the new alliance will come bundled with a custom-branded MSN video player and will allow AP members to participate in ad revenue generated by the network. MSN will sell the advertising and then split the proceeds with the participating parties.
AP will retain editorial control over its online service, called the AP Online Video Network. At the outset, AP will provide around 50 clips per day of news. In its first foray to provide video content outside the MSN network, Microsoft also plans to develop new products around this relationship, including a local advertising and content syndication system.
Posted by Cynthia Brumfield at 12:06 PM | Print | Comments (0)
Diane Mermigas has penned another long, thoughtful piece that highlights “several mega problems” facing “the powers-that-be in media, entertainment and telecommunications” as they “[fasten] themselves to Internet-connected portable video devices and platforms to be part of the take-anything-anywhere explosion.”
In my last post, I cited Pete Cashmore’s comments on the value of blending the value of algorithms, users and editors in developing Web 2.0 systems for sorting and distributing content. As Mermigas points out, another important thing to add to that equation is the efficient creation (and funding) of genuinely valuable content. And, as her final comment (see below) suggests, another key is to strike a healthy balance between the capabilities of next-generation targeted advertising systems (a la Google), users’ willingness to pay, and the benefits and costs of anti-piracy technologies.
While it looks as though Microsoft could provide the operating systems for many devices and platforms, and that Yahoo! and Google could provide management and search, it is unclear as to who or what will provide the next generation of content and services designed for interactive consumers…
…Although branded content will have a strong draw, interactive consumers are more sophisticated and demanding. They will pay for content and services that enrich and enhance their lives and reflect their personal interests and needs. It’s as much about data as it is about video. They are more impressed with value than with the mode of distribution and device. And, perhaps most important of all and already lost on many, is the fact that there is a limit to what even the most interactive consumer will pay for the content and services they want in different places…
Citing the success of JibJab and the online video game Warcraft, Mermigas points to the potential and unanswered questions surrounding the recent deal between Sprint and leading cable operators, which includes a $200 million investment by the companies:
It was the first sign that media and entertainment giants might begin shifting some of the money they are spending on huge stock buybacks into investing in content and services that don’t exist today. The proof will be in how they actually spend those funds, and whether any will go to supporting grass-roots content creators who can tweak conventional media’s psyche…
…What’s required is a call for a genuine creative awakening not only in Hollywood and New York but everywhere in between where artists, writers, producers, animators and performers reside. The demand will be strong — even as attention spans are shorter — to fill these new devices and pipelines with differentiated content that big media so far has defined only by what it knows best. This innovation will require assigned funds and resources, artistic freedom and a corporate mandate to think outside the box.
The other call must be for a far-reaching, all-inclusive anti-piracy effort on the part of those who make their fortune from content — whether they produce, distribute or service it…As that occurs, the viability of how much or even whether consumers pay for individual content and services on portable videoplayers and any other Internet-connected devices becomes more questionable. If you attach to that the burgeoning Internet advertising business that relies on a solid content and services base, then interactive economics are surely up for grabs.Posted by Mitch Shapiro at 12:02 PM | Print | Comments (0)
As Om points out, the telcos posted their best DSL growth quarter ever during Q3 05, adding approximately 1.2 to 1.3 million net new DSL customers, all a result of the booming growth in SBC’s low-priced DSL promotions and Verizon’s roll-out of Fios, in addition to Verizon’s own DSL promotions.
Here are the numbers that back up Om’s observation:
| DSL Subscribers by Telco | Total Subs 9/30/04 | Total Subs. 12/31/04 | Total Subs. 3/31/05 | Total Subs. 6/30/05 | Total Subs. 9/30/05 |
| Bell South | 1,872,000 | 2,100,000 | 2,300,000 | 2,500,000 | 2,700,000 |
| Qwest | 955,000 | 1,040,000 | 1,120,000 | 1,190,000 | 1,340,000 |
| SBC | 4,679,000 | 5,104,000 | 5,608,000 | 5,968,000 | 6,496,000 |
| Verizon | 3,253,000 | 3,485,000 | 3,864,000 | 4,142,000 | 4,500,000 |
| Total Top Telco | 10,759,000 | 11,729,000 | 12,892,000 | 13,800,000 | 15,036,000 |
| Net Adds DSL | 947,000 | 970,000 | 1,163,000 | 908,000 | 1,236,000 |
Posted by Cynthia Brumfield at 11:47 AM | Print | Comments (0)
In the wake of recent efforts to hack Memeorandum, Pete Cashmore asks the question “Humans vs Algorithms: Who Should Edit Web 2.0?,” which he follows with a second post entitled “Hacking Memeorandum: More Proof That Algorithms Don’t Work.”
As you may already know, my feeling is that humans are generally better at editing than algorithms, but by the same token you could say that the main algorithms in use today (Google PageRank, Memeorandum, Google News) are largely based on human decisions, where a link generally counts as a vote. At the other end of the spectrum, you have sites like Digg and Reddit, which are entirely edited by humans in a distributed way.
But I’m not sure if it’s really a case of humans versus algorithms: I think the future could lie with services like Wink, where Google’s search results are rated, tagged and built upon by human minds. In this way, humans could make up for the obvious failings of algorithms - namely the scourge of spam and splogs.
As Pete suggests, the optimal model seems to be one that strikes the right balance between the speed and precision of algorithms, the collective wisdom of the crowd, and the specialized expertise, insight and experience of some form of “editors.” It also seems that there’s a whole lot of effort focused in that direction from virtually every corner of the web, software, media and telecom industries…and that, ultimately, we’ll all benefit from the race to strike that balance and harvest the value it generates.
Posted by Mitch Shapiro at 11:26 AM | Print | Comments (0)Courtesy of Paid Content, this thorough study commissioned by NBC and conducted by Steve Siwek of Economists, Inc. that quantifies the value to the U.S. economy of intellectual property activity. While it’s well-known that IP [as in intellectual property, not Internet protocol] businesses drive the economy, Siwek puts some pretty impressive numbers around the concept. The report concludes that the IP industries are
- the most important growth drivers in the current U.S. economy,
contributing nearly 40% of the growth achieved by all U.S. private
industry and nearly 60% of the growth of U.S. exportable high-value-add
products and services;
- crucial to the future growth of the U.S. economy; gross domestic product
(GDP) 10-year growth estimates would be approximately 30% lower than
current predictions without the contributions of these industries;
- essential contributors to U.S. GDP, responsible for 1/5 of the total U.S.
private industry’s contribution to GDP and 2/5 of the contribution of U.S.
exportable high-value-add products and services to GDP;
- among the largest and highest-paying employers in the country,
representing 18 million workers who earn on average 40% more than all
U.S. workers;
- increasingly contributing to the U.S. economy—in 2003 the “core”
copyright industries contributed $33 billion in reported net export
revenues, and the patent-dependent aerospace industry reported 2004 net
export revenues of $32 billion; these two sectors are the largest positive
contributors to U.S. balance of trade.
The House Energy and Commerce Committee is holding hearings today on its revised telecom reform bill. One invited speaker, Google’s Vint Cerf, won’t be there because the Internet innovator is at the White House receiving the Presidential Medal of Freedom.
But Cerf submitted a letter outlining his views on the need for telecom reform, which is republished at Google’s official blog. In his letter, Cerf strongly warns of the power broadband providers have to block services unless net neutrality rules are put into place.
My fear is that, as written, this bill would do great damage to the Internet as we know it. Enshrining a rule that broadly permits network operators to discriminate in favor of certain kinds of services and to potentially interfere with others would place broadband operators in control of online activity. Allowing broadband providers to segment their IP offerings and reserve huge amounts of bandwidth for their own services will not give consumers the broadband Internet our country and economy need. Many people will have little or no choice among broadband operators for the foreseeable future, implying that such operators will have the power to exercise a great deal of control over any applications placed on the network.Posted by Cynthia Brumfield at 11:07 AM | Print | Comments (0)
On the eve of his successful reelection campaign, Houston Mayor Bill White said Monday that if he were reelected, he would commit to offering Wi-Fi service throughout the city. White was reelected and now must review his campaign pledge.
White said that the city would review bids from Wi-Fi partners within the first three months following his reelection, and city-owned poles would be retrofitted for the wireless broadband offering. White has named Umesh Verma with the City of Houston Technology Task Force to lead the effort.
Posted by Cynthia Brumfield at 10:49 AM | Print | Comments (0)As Mitch mentioned, the New York Times and Wall Street Journal got a hold of internal Microsoft memos that warn in no uncertain terms of the competitive challenges facing the Redmond giant. Dave Winer worked his contacts at Microsoft and posted what he believes are the full texts of these memos at a site called Hypercamp.
They make for interesting reading not only for the sharp awareness in Redmond of the disruptive wave of web-based services, but also for the articulate exposition that somehow I don’t come to expect from computer geeks (admittedly Bill Gates and Ray Ozzie are not run-of-the-mill computer geeks).
Posted by Cynthia Brumfield at 7:37 AM | Print | Comments (0)
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