What Google broadband should mean to your telco business

Craig Settles Successful.comLast week I was in Washington, D.C., to speak an event put on by the Joint Center for Politics and Economic. It was time well spent; not only did it continue the push for net neutrality, but also gave me additional glimpses into an incumbent corporate culture that's making its influence felt on broadband issues.  

After several trips to the Capitol over the past year, I'm convinced by comments heard and overheard that lots of people in D.C. need to get out more. Out to the small towns, the ‘hood, the barrios, the sticks. With a mandate to pay close attention and listen to what's being said.  

Telecom folks react loudly to what they hear, but the industry's not listening, absorbing the details, nuances and hints embedded in what consumers and businesses are saying. You're focused on shaping outcomes, come hell or high water. But you need to do a way better job of meeting consumers' and businesses' needs. It's more profitable. 

As a marketing professional, industry analyst and generally astute observer, I believe the big telco and carrier executives suffer from market myopia due to a lack-of-listening disease that afflicts the rest of their organizations. For example, if I walk into a room full of telco execs and say, "Google," there's an instant, intense Pavlovian attack of apoplexy-generated talking points and sound bites.  

I give the industry an A+ for executing coordinated PR campaigns. But if you actually believe all the anti-Google diatribes you're throwing out, you get a D- for response to market need. What Google has done, regardless of its motives, is tap into a market frustration that is much deeper and broader than apparently you understand. A lot of people feel about their broadband carriers as they do big banks. And by the way, you don't have a perception problem. You have a reality problem. 

To make my points a little pointier, here's my frequent railroads-and-airlines-circa-1946 analogy. Telecom industry, you're the railroads. The 100 or so current community (i.e. built by local public and private entities) broadband networks, and now Google, are the airlines. For points of reference, here are 10 successful community networks.  

Around 1940, the railroads were in their heyday. They had made America great, they still basked in the glow of having helped conquer the West, they had nationwide infrastructure, they had made some wonderful innovations to trains, railroad barons had clout in D.C. and beyond. People even wrote pop songs about them. Railroads made money, lots of it...Continued

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EchoStar teams with TTI

EchoStar Satellite Services announced that Transparent Technologies, Inc. (TTI) has joined the reseller program for its ViP-TV platform, a popular IPTV solution with service providers, particularly smaller independent telcos. In the IPTV market, TTI primarily has been known as a systems integrator for Cisco Systems' IPTV offerings, expertise that will provide a good match with the programming and channel aggregation solutions in the ViP-TV service, according to an EchoStar press release.

For more:
Here's the EchoStar press release

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Google getting closer

Google has been dabbling in the TV sector for almost four years, though it has never been quite clear exactly what role the Internet giant would play. Within the last few months, the speculation has been spiced up by some interesting moves by Google.

First, hot on the heels of success in the mobile industry, the company's Android operating system started to work its way into set-top box developments. Second, Google announced somewhat surprising fiber network ambitions which, more than anything else, seemed like a way of throwing down a challenge to traditional network operators as the Federal Communications Commission readied its national broadband plan. Third, Google reportedly has been testing a TV content search service with Dish Network that may have some relevance to Google's targeted advertising strategy.

That last bit was reported by The Wall Street Journal yesterday, and suggests the evolution that Android-based set-top boxes are likely to take. In most sectors of telecom, companies have been concerned about the Google effect: Will the giant infringe on everything and everyone, or just on their own little corner of the sector?

If Google sticks to its search roots and the core talents of its OS unit, most service providers and vendors will not have much to fear. The main companies that will have to think about Google's affronts are like-minded giants like Microsoft, Apple and Yahoo!, because Google may have a chance to encroach on their partnerships with IPTV carriers and other service providers.

Still, there's a lot left uncertain about where Google is headed and how far it will go. It is not even clear what will come of the reported test with Dish. What is clear is that Google, through Android as well as other efforts, is getting closer to having a real effect on the TV market.

-Dan

P.S.: Read the Wall Street Journal's report on Google

Canvas names STB partners

U.K. joint venture Project Canvas, which involves the BBC, BT and others, has named three set-top box suppliers for the hybrid online TV project--Cisco Systems, Technicolor (formerly Thomson) and Humax--along with another nine--ADB, Amino, Broadcom, Echostar, Intel, LG, Sagem, ST and TVonics--that have lined up for the chance to work with Canvas.

The Digital TV Group also said that Canvas has accepted a role on its steering committee, which as further details on Canvas become available should help to begin smoothing over what had been a bumpy relationship between Canvas and Digital TV group member companies working on a Connected TV standard. Broadband TV News reports that Canvas is expected to bring all of its own technology details into that discussion in the next few months.

Still, as we mentioned last week, Canvas continues to draw criticism, most recently from cable TV player Virgin Media, as it nears a possible final approval by the BBC Trust within the coming weeks.

For more:
- Broadband TV News has this report

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BigBand plays executive shuffle

BigBand Networks, a prominent pusher of switched digital video technology and, more recently, IPTV-over-cable solutions, has made several changes in its executive ranks. The company is seeing its COO David Heard and worldwide sales vice president Sean Rooney resign. BigBand also has transitioned its co-founder, Chairman and CEO Amir Bassan-Eskenazi to focus on being CEO only, while naming existing board member and industry veteran Mike Pohl as the new chairman.

BigBand was an early vendor both on the SDV and IPTV-over-cable fronts. The former segment has been slow at times, but an FCC ruling last year that encouraged support for devices such as DVRs to access SDV content seemed to open up the prospect of better business for SDV companies. Meanwhile, IPTV-over-cable has been one of the most-hyped areas of the TV service provider market over the last year or so.

BigBand just recently reported fourth quarter 2009 revenue and net income that was down from the same period in 2008.

For more:
- Light Reading Cable has this post

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AT&T offers more detail on 3G capital investments

AT&T Mobility issued a flurry of press releases that detail some of its planned 3G investments for 2010 in various markets across the US as part of its plan to spend $18 billion to $19 billion on wireline and wireless capital investment this year.

In New York City, a region of particular concern given the volume of users, AT&T said it plans to add nearly 40 new cell sites and upgrade another 70 sites to 3G. The operator noted it spent nearly $290 million on capital expenses in the New York metro area in 2009.

"Wireless data traffic on the AT&T network has grown more than 5,000 percent over the past three years, largely attributed to today's advanced smartphones that are generating dramatically increasing volumes of network traffic," AT&T said in a release. "In fact, roughly 40 percent of AT&T's postpaid base uses a smartphone today, representing twice the number of smartphone customers than any other U.S. provider."

Other markets on tap for 3G investments include: Pennsylvania, Delaware, Nebraska, Ohio, Iowa, Louisiana, Wisconsin, Oklahoma, Alabama and New Jersey.

For more:
check out AT&T's press releases

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Charter eyeing wireless wholesale opportunities

Cable provider Charter Communications, which has yet to publicly reveal a wireless strategy, indicated it is keeping an eye on what its fellow cable operators are doing in that arena and may consider working with Clearwire, which is heavily embracing wholesale partners, said Chief Marketing Officer Ted Schremp during the company's earnings call.

"We're keeping a keen eye on peers that are working with alternatives such as Clearwire. We maintain the flexibility and the opportunity to join that if and when we so desire," Schremp said. He added that "we have the opportunity to have a wholesale relationship with not only Clearwire but certainly could pursue that with other providers."

Time Warner and Comcast, also investors in Clearwire, are reselling Clearwire's WiMAX service, while Cox Communications is building its own network using spectrum it won at auction.

For more:
- check out this Connected Planet article

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KeyOn’s broadband stimulus apps rejected, stock tanks

Rural wireless broadband operator KeyOn Communications announced that all 11 of its applications for broadband stimulus funds were rejected by the Department of Agriculture's Rural Utilities Service (RUS). Following the announcement, publicly traded KeyOn lost 46 percent of its value.

The company had requested $152 million in funds to build a WiMAX network in the 3.65 GHz band to expand its current rural coverage area from 2.5 million people to 6.5 million across 16 states. For several months in 2006, KeyOn's stock surged on the idea that it would be a big winner of broadband stimulus funding. From May 1 to Nov. 1, the per share value of KeyOn rose from 4 cents to $2.10, representing an increase of more than 5,000 percent.

But it's been clear in the first round that RUS and NTIA are favoring middle-mile fiber projects. Few wireless projects have been granted funds. KeyOn's applications are expected to be forwarded onto the second round.

Emerging Growth Research analyst Joe Noel said the firm "made a substantial investment in restricted shares of KeyOn last year, so we were clearly disappointed to see the rejections. The Company's applications will now be forwarded to the second round of broadband stimulus funds, which is actually slightly larger than the first round. We hope that wireless vendors will be treated a bit better in the second round of the stimulus awards ... Our position remains the same on KeyOn--if they receive federal stimulus funds the stock will boom, but betting on it at this point with new money is probably not a great idea for most investors." 

KeyOn has scheduled a conference call today at 4:15 ET.

For more:
- see this StimulatingBroadband.com article
- see this Emerging Growth Research post
- read this KeyOn release

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Amtrak issues RFQ for WiFi on trains

Amtrak has issued a request for qualifications (RFQ) for a communications platform that would bring WiFi connectivity to passengers and a secure WiFi channel for Amtrak's business needs to support on-board transactions such as ticketing and on-board sales. Amtrak also wants the system to be capable of supporting automated on-board electronic informational displays and announcements, content caching and delivery and other business services. Article

China Unicom may introduce iPhone with WiFi

China Unicom said it is working with Apple to introduce iPhones equipped with WiFi after government regulations forced Apple and Unicom late last year to disable the capability.

It appears Apple and Unicom are now complying with Chinese regulations by incorporating the Chinese homegrown standard called WAPI  alongside WiFi, which is part of revised Chinese regulations. Unicom's Chief Executive Chang Xiaobing announced last week that the company was working with Apple to include WiFi but didn't discuss the regulations or give a time frame in which iPhones will include WiFi.

WiFi is in demand because it's cheaper to use than 3G connections. Xiaobing said the company will consider compensating those iPhone users who lack WiFi if the operator does indeed roll out WiFi-enabled phones. Chinese customers already have to shell out between $730 and $1,020 for an iPhone.

For more:
- see this Wall Street Journal article

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