Moco.news had the scoop on this development last night, but ESPN is throwing in the towel on its Mobile ESPN service as a stand-alone mobile virtual network operator (MVNO). The company plans to stop selling its ESPN-branded phones (which sold for a pricey $500 each) and continue licensing its mobile content to other providers, as well as look for a provider to license its own proprietary application to other providers.
The failure of Mobile ESPN, after less than a year in operation, could be a signal that the MVNO model, under which providers such as Amp’d and Helio sell proprietary phones and services to customers who pay top dollar for the privilege of the unique services, is headed for the junk-heap of failed concepts. (Amp’d, however, seems to be making a go of it.) No wonder Apple isn’t that eager to move on its iPhone.
Posted by Cynthia Brumfield at 4:52 PM | Print | Comments (1)The New York Times’ Ken Belson has this piece today about the downside of Verizon’s sale of local access lines. Belson took a trip to New England, Vermont to be precise, to get a look at the dismal broadband access situation for the predominately rural state, a situation that’s bound to worsen now that Verizon plans to sell off the 1.6 million local phone lines it sells in Vermont, New Hampshire and Maine.
In a classic example of the rich-get-rich and the poor-get-poorer, Verizon plans to sell off the low-margin lines to give itself financial head room for the fiber optic upgrades it plans in already broadband-rich urban markets…and there’s no blaming the telco for this fiscally sound decision. But, chances are good that the purchaser of Verizon’s lines won’t deploy broadband any more widely than Verizon has.
The economics of providing broadband in rural areas are discouraging, too. The cost of upgrading an existing copper line that runs from switching stations to remote homes can be as much as $5,000, according to the National Exchange Carrier Association. Such costs are prohibitive for phone companies, which typically want to make back their money within three years, said Victor Glass, the director of demand forecasting at the carrier association.
Part of the problem is that as a big company, Verizon gets so much less from the universal service fund, a federally mandated source of phone company subsidies in rural areas, than do small companies and a potential acquirer would, apparently, inherit Verizon’s lousy subsidies. One part of the telecom reform bill that will not likely pass this year provides for $500 million in subsidies for broadband deployment in rural areas, not a huge amount of money given the high costs of stringing wires along low-density byways, but a step in the right direction as part of universal service reform.
Barring some new move by the feds, it looks like Vermont and the rest of rural New England is stuck. Even Wi-Fi networks need help for these less-than-profitable areas.
Alternative broadband providers who could fill that gap face problems, too. Jake Marsh, who runs Island Pond Wireless, a company that beams high-speed Internet signals over strings of antennas, has signed up 250 customers and has a waiting list just as long. But to expand, he is counting on towns getting state funds to help defray the installation costs.Posted by Cynthia Brumfield at 3:43 PM | Print | Comments (1)
Little-discussed online video sharing start-up VideoEgg has landed $12 million in venture funding, according to this scoop by Business Week’s Steve Rosenbush. Maveron, a $600-million VC founded by Starbucks Chairman Howard Schulz along with August Capital and unnamed private investors have plunked the funds into the barely one-year old venture.
VideoEgg’s big selling point is that it can read up to 100 video formats and will even accept video from a camcorder. According to the BW piece, VideoEgg is used to download 15 million videos per day and given the assist of recent deals with Bebo, Dogster, AOL, CurrentTV and others, plans to generate 50 million downloads per day by year-end.
But the volume of free downloads can’t be the big draw for the investors. The company must have a golden plan to sell advertising, and the BW piece hints at this.
The company’s next step is to bring video-based marketers and advertisers into the fold. “We think that if we can develop a platform that’s useful for users, and if we can integrate it with advertising that doesn’t detract from the user experience, that we can build something that’s valuable,” [Co-founder Matt] Sanchez says.
With this latest affirmation of the power of web-based video, and video-sharing in particular, it’s clear that some kind of race is on to capture the early momentum in this hot sector.
Posted by Cynthia Brumfield at 8:41 AM | Print | Comments (0)
In a postscript to the Supreme Court’s Napster decision last year, U.S. District Judge Stephen V. Wilson ruled yesterday against Streamcast, the distributor of Morpheus P2P software, saying that the company encouraged users to violate copyright laws. In his decision, Judge Wilson granted a coalition of entertainment companies and organizations summary judgment, saying there is more than enough evidence for “massive infringement” taking place on Streamcast’s network.
Wilson’s decision yesterday stands in polar contrast to his 2003 decision in the same case. In his earlier ruling, Wilson likened P2P networks to the VCR, which had been determined in the Supreme Court’s landmark Betamax decision to be immune to copyright infrinement liabilities.
But, in the Grokster case the Supreme Court set a standard for deterimining liability for P2P networks, namely whether they induced their users to commit copyright infringment. In so doing, the Court sent Wilson’s case back to him for a new look. In his decision yesterday, Judge Willson said “in the record before the court, evidence of StreamCast’s unlawful intent is overwhelming.”
Sharman Networks, owner of Morpheus rival Kazaa, already settled its case with the record companies, paying $115 million and agreeing to work out deals for authorized content distribution.
Posted by Cynthia Brumfield at 8:03 AM | Print | Comments (0)
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