Month: January 2016

Categories
Improving Your Business

Managing Your Time

hourglassThis blog is a little off the beaten path because it doesn’t talk specifically about the telecom industry. But I have to assume that the majority of my readers either own or work at a telecom provider of some sort. As part of my consulting practice I occasionally provide what I would call mentoring advice to those clients that seem to need it.

As a consultant I face the same kinds of daily work pressures that most people do. In a typical day I work on a wide array of projects involving a diverse range of topics. I also have the typical daily interruptions from having calls with clients and my staff. Because CCG is a virtual company and we all work out of our homes we don’t have meetings to attend, but my schedule is frequently peppered with conference calls. And like most people these days I get deluged with emails that require a response.

Over the years I have developed some time management techniques that work for me. My particular solutions might not work for everybody, but there are always techniques that can make your day more productive. And being productive means not having to work late to catch up on those things that you didn’t get done during the work day.

My first technique is that I have a morning ritual to get my day started off right. I try very hard not to schedule conference calls too early in the workday to eat into this time. I am an early riser and I often start very early. But no matter what happens I make sure that I am at my desk by 7:00 in the morning.

I use the first hour to take care of what I call repetitive housekeeping tasks. I read the emails that arrived overnight and will respond to the more urgent ones. I take time during this hour to either write one of these blogs or else to at least think about future topics. And I use this hour to try to keep current with what is going on in the industry. Over the years I have developed a list of news sources that I trust to tell me about things I ought to know. During this hour I am not doing client work, but am instead taking care of housekeeping. I found that if I am not this disciplined then the housekeeping never gets done right.

The other technique that has worked really well for me is that I schedule production work time in the same manner that I schedule conference calls. I don’t actually put these time periods on my calendar, but I look ahead each day and designate some blocks of times for getting work done. As a consultant I produce a lot of work in the form of complex spreadsheets, long reports or detailed memos. These are the things that I tackle during these work hours. Of course, I tackle them any other time I’m not busy, but during these work hours I block off outside influences. I don’t read email or answer the phone, just as I wouldn’t if I was talking to a client on the phone. I’ve found that when I know I won’t be interrupted that I can be at my peak of productivity. It seems, at least to me, that worrying about being interrupted is almost as bad as an interruption.

The last technique I use might best be called mindfulness. I just started using that word recently because I saw an article that said that Google and a bunch of other large corporations had formal mindfulness programs. In my case, what I mean by this is that I set aside time every day to just think. I am either trying to solve a specific problem for a client or else I think about some industry topic that interests me.

Because I work at home I tackle mindfulness while tackling very routine chores. I might go and load the dishes in the dishwasher, walk the dog, or clean the cat litter. But while I am doing these tasks I am generally deep in thought and this is something I do deliberately. My wife says that she always knows when I am in this contemplative mood and she stays out of my way. And she might as well because I never remember a word she tells me when I am lost in thought. But she doesn’t seem to mind the chores I get done! Again, this is something that I do deliberately. I don’t usually schedule these in the same way that I do work time, but this is something that I do every day at least once each morning and afternoon. If I was in an office environment I would likely just walk around the building or somehow get away from the desk and give myself the time that I need to think. I solve many of the problems I face this way and if I didn’t do this I would be a lot less productive

When clients tell me that they are too busy to accomplish their work goals I generally tell them about my own habits. The fact is that we are all different and my techniques might not work for you at all. But I do know that being productive is something that can be scheduled and managed and that if you control your day you are going to be a lot happier.

Categories
The Industry

OTT News January 2016

January has already been very busy with news about programming and OTT content on the web. Here are just a few of the more interesting tidbits already this year:

ESPN. A survey showed that 56% of cable subscribers would drop ESPN if that meant they could lower their cable bill. Considering that ESPN has lost 7 million customers over the last year this cannot be good news for them. ESPN’s biggest worry has to be the millions of customers flocking to the various small OTT packages and skinny bundles offered by the telcos that don’t include ESPN. The one positive note for them is that Sling TV – which includes ESPN – seems to be gaining new customers.

YouTube and Non-traditional Video. A recent survey in the UK showed that millennials that use YouTube and other non-traditional sources of video are not reverting to traditional sources of video like cable TV as they get older and settle down. The survey hints that the video habits you learn when young might heavily influence your video preferences for life. US cable companies know that many young people have abandoned traditional cable, but they have always figured that as people age and get their own place that they would then buy traditional TV. If that’s not true then it’s another major factor that’s going to chip away at cable TV viewership.

Seeso. NBC Universal launched a new ad-free web service called Seeso that is a huge collection of comedy programming. The platform is carrying the whole historical pile of Saturday Night Live as well Monty Python and Kids in the Hall. It also is carrying a lot of original new comedy content from hot young comics. The product sells for $3.99 per month. NBC says that they are developing six other niche-targeted video products, but haven’t announced what the other content might be. This is a very different way of offering OTT by building libraries of specific types of programming for a small fee.

Vidgo. Vidgo is a new OTT service that claims it will be launching within a month or so. It claims it is going to carry hundreds of channels and will look more like a traditional cable line-up, including local broadcast network channels. The first launch will be in 15 major markets like New York, Atlanta and Los Angeles. The main selling point is that the content will be available on any Android or iOS device which frees viewers from the restrictions of standard cable. The product has apparently been developed in anticipation that the FCC would rule at the end of 2015 to require programmers to sell to OTT companies in the same manner as traditional cable companies. However, that ruling has been postponed and one has to wonder how the company plans on obtaining the giant pile of content. This product is not aimed at cord cutters and is expected to be priced in the same range as traditional cable. It’s more a platform to give people access to programming from anywhere with a web connection.

Netflix. Reed Hastings announced at CES that viewers had watched 12 billion hours of Netflix programming in the 4th quarter of 2015. That’s up from 8.25 billion hours a year earlier. Hastings says that he thinks that faster internet connections are one of the main factors that are contributing to growth as his content is available to more people each month.

Cox. Cox Cable bailed on launching a new OTT product they had branded as Flare MeTV. The company decided to instead license the X1 platform of TV anywhere from Comcast. This is news because it shows that we should expect OTT providers and packages to both pop up and disappear quickly while companies search for a formula that will work. We are soon going to need a guide of OTT options as the number of packages change rapidly.

Categories
Regulation - What is it Good For?

Is the FCC Squelching Web Innovation?

I am always intrigued when politics enters the telecom realm, because the vast majority of issues we wrangle with are still handled in the traditional way. Engineers innovate and regulators regulate and generally, in the telecom world, the best technical solutions have always made it to the top and good ideas have generally won their way to the market.

Recently there was a guest editorial written for Forbes by Senator Steve Daines of Montana and FCC Commissioner Michael O’Reilly. This editorial took the FCC to task for squelching innovation by creating what they called a ‘permissionless culture’ of overregulation that is stopping innovation from happening on the web. The editorial goes on to talk about how web innovation has created a trillion dollar annual economy in the US and praises such ventures as Uber, Facebook and the iPhone. They go on to talk about how companies like GroupMe didn’t require any regulatory approval to try new ideas.

What seems to have them incensed is that the FCC recently called in Comcast, AT&T and T-Mobile to talk about each of their zero-rating schemes where they favor certain content by not making it part of their data caps. And this is where their analogy starts to break apart. It starts looking like a stretch to me to call Comcast or AT&T innovators. Comcast and the other large cable companies are very close to being broadband monopolists in the vast majority of their markets, and are at best a duopolist in other markets. AT&T and T-Mobile are two of only four wireless companies with any national reach in a market that is clearly an oligopoly.

If the FCC isn’t supposed to regulate the monopolists, duopolists and oligopolists then who are they supposed to regulate? It’s clear these two guys don’t like net neutrality, and probably not regulation in general. It also seems a bit extraordinary to me to see a sitting FCC Commissioner so heavily lobbying against his own agency in public.

The key accusation they have made is that the FCC is somehow stopping innovation by discussing net neutrality with these three large carriers. Is there any chance that they are?

I think it’s a huge stretch to compare Comcast and AT&T to GroupMe and the iPhone. The particular issues that prompted the editorial are essentially billing issues and these carriers aren’t being innovative and haven’t created anything new with zero-rating.

The huge number of filed comments in the net neutrality case made it very clear that the innovators in Silicon Valley are worried about the power of carriers like Comcast and AT&T. They fear that those companies who act as the ISP for most Americans can pick winners and losers among the GroupMe’s of the world by favoring a handful of large established web companies over everybody else. Those comments made it clear that the people who are the actual innovators want the FCC to insure that new web companies and new ideas be given a fair chance in the marketplace.

And so this is where politics enters the argument. Probably one of the oldest techniques used in politics is to call something the opposite of what it really is. Do that loudly enough and often enough and many people will start believing the opposite of what is really true.

In this case the FCC is doing exactly what it is supposed to do. They haven’t taken any actions yet, but they might. They are looking into whether the various zero-rating schemes of these three companies are anti-competitive. There is no guarantee on what they will decide since the three companies are trying different ideas. But what is clear is that companies like these three have the power to pick winners and losers among web content providers.

I find it disingenuous to be calling the FCC anti-competitive and accusing them of squelching competition when the FCC is investigating companies that actually have the power to do exactly that. I guess these kinds of editorials are written to stir up people outside of the telecom industry, because I suspect most industry insiders understand the issue clearly and just shake their heads when politics enters our universe.

Categories
What Customers Want

The Marketing Challenge for Smart Home Products

In reading all of the press releases out of the Consumer Electronics Show you would think that all of our homes are going to get flooded with smart devices in the next year or two. There is a huge range of devices being shown there that have at least some connectivity and that can be categorized as smart devices.

One has to wonder how much the American public is really ready for smart home devices. A survey late last year by the Demand Institute showed that there is still a relatively low interest in smart homes by the general public. The survey showed that 36% of the public was willing to incorporate smart technology into their homes and but that only 22% thought that smart home technology was of any real importance. This survey estimated that about 20% of homes already have some sort of smart home device.

The trouble with a poll on this topic is that you have to wonder how much understanding a lot of people have about the question. I would guess that the responses might be different if people were asked about specific applications – like using wireless speakers, a washer that senses the size of the load, or some similar device that many homes might already have. My guess is that interest in smart devices varies according to the type of device; people likely think differently about a smart thermostat versus a smart lightbulb versus a smart door lock, because each of these has a different value proposition – and a very different set of risks.

As you would expect, age plays a big factor in how open consumers are to smart home devices. 53% of those under 34 are open to the idea of smart homes while less than 20% of those over 65 are. And this perhaps might be a good way to highlight the confusion of the general public on the topic because I’ve seen several other polls that show a large percentage of elderly people would be interested in smart devices that would allow them to stay in their homes to an older age. These would all be smart home devices and yet nobody is thinking of these devices when asked the question.

As might also be expected, renters, being statistically younger, are more open to the idea in general than homeowners – although the age of a given person looks to be more of the determining factor.

The specific smart application that got the most attention was a way to cut down on energy usage. 71% of homeowners said that they would be interested in something that could do that, which varies significantly from the responses for smart home devices in general. Again, another example showing that the public might not have a good picture of what the term smart home device really means.

This poll and similar polls showing the same sorts of results should be of value to companies who are in, or thinking of getting into, the smart home business. It’s obvious that one of your biggest challenges in that business is educating your customers about what you are selling and why they ought to spend money for your solution.

I think these polls suggest that you should be careful about how you label smart home products and that, at least for now, you don’t want to be selling a ‘smart home solution.” Rather, the polls suggest that you would do a lot better in selling specific solutions – energy management or security. People might be interested in those without even realizing that they are smart home solutions.

One good news about this and other recent polls is that a significantly large percentage of people say that they expect smart home technology to be widespread within the next five years. If they aren’t interested now their disinterest is likely due to not understanding what “smart home” means. But the average person, at least, can foresee the coming change in technology and that a large percentage of the devices we buy in the future might be smart devices.

Categories
The Industry

Fighting Back Against the Programmers

Some of the biggest cable providers are finally fighting back against the high cost of programming. Programmers have been aggressively increasing the costs of buying their contentfor over a decade, and the cable companies have been passing on those cost increases to their customers. My clients report programming costs have increased historically at 7% to 9% per year and say that it’s been even higher the last few years.

The first big provider to take an exception to programmers was Verizon. Last April they moved ESPN from the basic to the digital line-up. For them this meant a significant savings. If a network is carried in the basic line-up then a cable company must pay the programming fees for every cable customer. But if a program is shifted to the digital tier then the programming fees only apply to customers that buy the higher-priced digital tier. The percentage of customers that buy digital tiers varies widely, but most cable companies have between 40% and 60% of customers electing the higher tiers.

So if Verizon had a 50% penetration of digital tiers, then moving ESPN to the higher tier would have cut their ESPN bill in half. Some programmers try to make up for this sort of shift by charging more for the same network if it’s carried in the digital tier instead of the basic tier.

Comcast just joined the same fray. Earlier this month they moved Spike, CMT, and POP (the TV Guide Channel) into the digital tiers. Viacom instantly complained about that and there is certainly going to be a lawsuit over the issue. Viacom says that their contracts require those channels to be carried in the basic tiers.

And that highlights another reason why cable rates keep rising. The programming contracts have tightened up over the last decade and programmers now demand to be carried in lower tiers as part of renewing a contract. They also often demand very specific channel placement, which is why you don’t see a lot of differences between cable line-ups in different markets.

This insistence that programming be carried in the basic tier (which maximizes the revenue of the programmer) has gotten out of hand. I helped a client set up a new cable system just a few years ago and the programming contracts insisted on 85 channels being in the basic tier. A decade earlier the basic tier generally had no more than 60 channels, but more and more networks are being jammed into the more expensive placement.

Cable companies have been complaining about this for years and I can recall several pleadings to the FCC asking them to stop the practice. But the FCC hasn’t tackled the programmers yet and so nothing ever came of this.

A company the size of Comcast might be able to beat this in court. I would imagine that this was something that was forced down their throat and that they fought this during contract negotiations. But from what I’ve seen the programmers are completely unwilling to negotiate and their programming contracts are mostly take-it-or-leave-it. At some point it’s not a negotiation when one side won’t budge.

Companies smaller than Comcast have no ability to take this on other than to decide to omit certain programming from their line-up. I reported in another blog how small cable companies had dropped the whole Viacom line-up after a huge rate increase in 2013. This removed the Viacom channels from over 600,000 homes.

So maybe Comcast and Verizon can shove a small wedge into the leverage currently held by the programmers. If the FCC won’t take on this issue (and I’m not sure they have a legal way to do so), then it’s going to take these big public fights between the cable companies and the programmers to change the paradigm.

Categories
Regulation - What is it Good For?

Complaining to the FCC

Ars Technical recently looked at complaints about ISPs in the specific categories of availability, billing, and speed that were filed with the FCC during the first eleven months of 2014. Probably in what is not a surprise to anybody, Comcast got more complaints than any other carrier. But there were complaints filed against all of the major ISPs.

The FCC complaint process is interesting. In the new system a filer is given a tracking number so that they can see the progress of their complaint. Somebody at the FCC’s Consumer Inquiries and Complaints Division looks at every complaint and they might contact a filer if they want more information about the complaint. If the FCC decides that the complaint is actionable – meaning that it’s something the carrier should know about, they forward the complaint to the carrier. The carrier must then respond in writing to the complaint within 30 days and must copy the consumer on the response.

The FCC reports that carriers usually take a stab at resolving complaints when that’s possible. If there has been a billing dispute, an FCC complaint can get the carrier to examine the records and hopefully correct the problem.

As can be imagined, people often complain about policies that are not really actionable. Ars Technical saw that the issue with the most complaints is the trials of the new Comcast data caps. Other than complaints about how Comcast is supposedly measuring data usage poorly, there are no specific rules being broken by just having the data cap. One would expect for complaints about the existence of the cap that the customer will receive a nice form letter from Comcast telling them how the caps are all about fairness.

A few of the complaints I read were about people hoping that the FCC could bring broadband access to their neighborhoods. They are generally from people who live just outside existing networks and who can’t understand why their neighbors have broadband and they don’t. There is little the FCC can do with this complaint other than to log them in the category of folks without hope of broadband.

A number of the issues found in specific complaints are the same kinds that often make consumer web sites. These might include billing issues that haven’t been cleared up in years. This seems to be the one category of complaint where it is effective to complain to the FCC since that will often finally clear up a persistent billing issue.

There are complaints from customers who are getting data speeds that are a fraction of what they have subscribed to. The FCC can’t really fix this, but they are in the process of requiring ISPs to be more honest with their customers about the speeds they deliver. You have to feel sorry for the folks who say they are paying for a 30 Mbps data product and who get speeds just barely above dial-up.

In preparing to write this blog I did a quick poll of a dozen of my larger clients and asked them if they had ever gotten a complain through the FCC process. These were all ISPs with more than 25,000 customers and a few quite a bit larger than that. I was not surprised to find that none of them could ever recall getting such a complaint, at least not in recent years. This reaffirms my belief that smaller companies do a much better job of customer service than larger companies. They may not always satisfy a customer, but they don’t shuttle them off to endless and frustrating calls to customer service and they try hard to try to solve their issues.

For any of you that have ever been tempted to file a complaint, the new online process is really easy to understand. The FCC’s web site provides easy instructions on how to complain. It asks the consumer to choose a category for the complaint. These are wide ranging and don’t just include ISPs but cover the entire wide spectrum of issues regulated or monitored by the FCC. But it’s hard to think that any category gets more complaints than ISP broadband issues since that has grown in such importance to the majority of households.

Categories
Regulation - What is it Good For?

The Rural Exemption

I was recently surprised when I saw a small telco in Minnesota invoke the rural exemption. This is a set of rules that was created by the Telecommunications Act of 1996. In those days the rural telephone industry had an effective presence in Congress and this was added to that legislation as a protection for small rural telephone companies.

The Act created CLECs and made it possible for anybody to create a competitive telephone company and compete against the incumbent providers, who were all heavily regulated monopolies at the time.

The purpose of the rural exemption was to provide a pause in the process of allowing a competitor telephone provider into rural markets. The big fear was that there would be markets where a competitor would come in and cherry pick the market and make the remaining company unviable. This was a real concern. For instance, I had one client at the time that made over 60% of their revenues from one very large factory. They didn’t think that if they lost that factory as a customer that they could remain viable and continue to serve everybody else. Their fear was that competition would wipe out the only telephone company in their small community.

This was a legitimate fear. But it turns out the rural exemption was not really the right answer to their problem. It became quickly obvious that they would eventually lose that customer and that the rural exemption wouldn’t really protect them. So I helped that company to branch out into the surrounding towns to offer their own competitive product. They needed to have a customer base that was big enough to survive losing the big factory.

And sure enough, it worked. They lost that factory as a customer a few years later when a competitor offered cheap broadband to the factory that they couldn’t match. But when they lost the factory they didn’t fold. In fact, they are doing better today than they were before they lost the big customer. They beat competition by becoming competitive themselves.

In the 90s there were a number of small companies that invoked the rural exemption. This forced the the state regulatory commission to have a formal hearing before allowing in a competitor. The small companies were in the unenviable position of having to argue that competition was bad for their community. And as you might guess, I don’t think a small company ever won a rural exemption case and the competitors were always granted the ability to serve their markets.

Over the next decade there was a huge increase in competition in the rural areas as cable companies got the technology that allowed them into the telephone and data business. Competition from the cable companies was so inevitable that almost nobody wasted the legal fees needed to invoke the rural exemption. And I think that after enough of these cases were filed and always lost I think small companies got the message that being against competition sent the wrong message to their customers. There were still a few rural exemptions invoked into the 00s but most of these were nothing more than a feeble attempt to keep competitors at bay for a few extra months.

It’s possible that there have been some cases filed in the last few years that I missed, but I can’t recall having heard of a rural exemption being claimed for many years. The law is still on the FCC rulebooks, but it’s obvious by now that every regulatory body is pro-competition. There is basically zero chance of a rural telco convincing a regulator that they should be exempt from competition. Particularly since the rural exemption only looks at voice competition and we have move to a world where it’s all about broadband.

This current case is a perfect example of why the rural exemption ought to be obsolete. The competitor in this case is a new cooperative that is building gigabit fiber optics to everybody in the community including the farms. The farmers in this area either had very slow DSL, or if they were too far from town they had no broadband at all other than dial-up or satellite. The telco that filed the rural exemption has known about this coming competition for at least five years.

This small telco should have taken the same advice I gave my small client with the factory in 1997 – they should have found a way to participate in the innovation. This telco could have taken a lesson from the hundreds of other rural telcos that have built their own fiber to customers. Nobody is going to build a second fiber network in a rural community and this company could have built fiber and ensured their prosperity for decades to come by being the first with fiber. But instead, they now are going to have to go to the state regulatory Commission and tell the citizens of their community why they would be better off without fiber and faster broadband. I’m glad I’m not their consultant or lawyer because I don’t think anybody can make that argument these days with a straight face.

Categories
The Industry

The Future for Cord Cutters

I read an article by Nathan McAlone in Business Insider that opined that people are going to look back five years from now and wish for the good old days of the big cable packages. I suspect for many people he might be right.

Right now cord cutters are definitely happier with dropping out of the big packages and finding smaller solutions that fit them specifically. As a family that hasn’t had a cable package in years, the recent emergence of online content feels wonderful to my family. Even with my few paid choices of Netflix, Hulu, Amazon Prime, and Sling TV I have far more options than I know what to do with. I have found myself liking to binge watch obscure series like Death in Paradise on BBC that is about a detective on a fictional island in the Caribbean. Even with the big cable package I would not have been likely to have found or watched this kind of programming.

But there are going to be long term consequences of cord cutting and of the big cable companies migrating to skinny packages. Verizon FiOS recently reported that a majority of their new customers are choosing their small skinny package rather than the traditional big package.

The main consequence is going to be to programmers. Every customer who cuts the cord or downsizes to a skinny package stops paying fees to a big pile of networks in the traditional bundle. We now know that ESPN has lost 7 million customers over the past few years and they cannot be the only one. One has to think that the same is happening to all of the sports networks like the Big Ten Network or Tennis TV. And it’s likely that over time the same thing is going to happen to any network that doesn’t have worldwide appeal such as religious networks, weather networks, music networks, or even the smaller networks such as Discovery Health that are only carried in the big cable packages.

I see several long term consequences of the shift to skinny bundles. First, I see it returning some of the negotiating power to service providers for those networks that are only in the big packages. Cable companies are going to become more and more willing to say no to programmer demands that they must carry the full suite of everything offered by a programming company. The programmers will still be in the driver’s seat for the most popular networks – those channels that everybody wants to put into their skinny bundles like the Food Network or the Travel Channel. But the programmers are going to lose leverage with their less popular networks because cable systems will be more and more likely to push customers to smaller bundles rather than be held hostage to huge payments for content.

I also see some of the less popular networks folding. The only thing that keeps a lot of these networks going is that they get a few cents per month from 100 million households. When that audience retracts a lot of them are not going to be economically viable.

Interestingly I think skinny bundles will mean more profits to cable providers. The margins on the 300-channel line-ups are getting thinner all of the time. There is the possibility of being able to make more money selling 30 channels than there is for selling 300.

And finally, as the article that prompted this blog suggests, I think eventually it will get very expensive for the cord cutter who wants to buy a lot of different content. It might well cost more to put together the channels that you really want than buying today’s big packages. It’s not hard to imagine a world where ESPN costs $20, AMC costs $10, and a regional sports network might cost $15. Before you know it, if you have a wide interest in different programming, you could pay more than today for many fewer choices. But I think in the long run that the average person is going to do what I do today. They are going to buy a pile of programming and then learn to be happy with what they have bought. I find myself watching things now that I would never have considered years ago – and it works for me. I don’t miss the channels that I can’t see.

Categories
Technology

A Network Without Wires

There is an emerging trend in the industry to try to create home networks without wires. ISPs and cable companies are all putting a lot of faith into WiFi as an alternative for wires running to computers and settop boxes.

It’s an interesting trend but one that is not without peril. The problem is that WiFi, at least like the big ISPs deliver it, is not always the best solution. The big cable companies like Comcast tend to provide customers with a cable modem with a decent quality WiFi router built in. This router is placed wherever the cable enters the home, which might not be the ideal location.

A single strong WiFi router can be a great device in a home with a simple network and uncomplicated demands. A family with two TVs, one computer, and a few smartphones is probably going to do fine with a strong WiFi router as long as the house isn’t too large for the signal to get where it’s needed.

But we are quickly changing to a society where many homes have complex data needs scattered throughout the house. People are likely to be demanding video streams from all over the home, and often many at the same time. There are bound to be a few computers and it’s not unlikely that somebody in the house works at home at least part of the time. Demands for big bandwidth for things like gaming and the new virtual reality sets that are just now hitting the market are increasing. And we are on the verge of seeing 4K video streams at 15 Mbps. On top of all this will be a variety of smart IoT devices that are going to want occasional attention from the network.

When a home gets crowded with devices it’s very easy to overwhelm a WiFi router. The new routers are pretty adept at setting up multiple data paths. But with too many streams the router will lose efficiency as it constantly tries to monitor and change the bandwidth for each stream it is managing. When this happens a home network can bog down, dropping the efficiency of the router precipitously.

There are a few solutions to this problem. First, you can run wires directly to a few of the bigger data eaters in a house and remove them from the WiFi network. Just make sure in doing so that you also disable having them search for a WiFi signal. But people don’t really want more wires in their home, and ISPs definitely do not like this idea.

The other solution is to add additional WiFi hotspots in the home. The simplest example of this are WiFi repeaters that simply amplify the signal from the base WiFi hotspot. However, repeaters don’t improve the contention issue, they simply bring a stronger signal closer to some of the devices that need them.

A more complex solution is to set up a network of interconnected WiFi hotspots. This consists of separate WiFi routers that all feed through one base router, a configuration that is familiar to any network engineer but alien to most home owners. The main problem with this solution is obvious to anybody who has ever operated a network with multiple routers – getting them to work together efficiently. Setting up a multiple-router network can be challenging to those unfamiliar with networks. And if configured poorly this kind of network can operate worse than one big hotspot.

But these kinds of interconnected WiFi networks are the cutting edge of home networking. I was recently talking to an engineer from a mid-size cable company and he admitted that as many as 20% of their customers already need this kind of solution. It’s a bit ironic that the demand for WiFi is mushrooming so soon after the ISPs went to the one-router solution. The percentage of homes that need a better solution is growing rapidly as homes jam more devices onto WiFi.

So there is an opportunity here for any ISP. Customers need better networks in their homes and there is a revenue opportunity in helping them to set these up. The downside, at least for now, is that this is labor intensive and there may be a lot of maintenance to keep these networks running right. But there are a number of vendors looking into solutions and one would hope that home WiFi networks will soon become plug and play.

Categories
Current News

Congress Supporting Comcast Data Caps?

There is currently a bill in the House, HR-2666, that will do two primary things – stop the FCC from regulating broadband rates and exempt smaller ISPs from some of the reporting requirements from the net neutrality law.

For the life of me I can’t understand why nobody in the press sees this as a bill that would stop the FCC from regulating data caps like the one that Comcast is currently trialing. The Comcast data caps are massively unpopular and there have already been nearly 10,000 complaints about the data caps at the FCC even though the trials are only in a few markets. Since most people aren’t going to go to the trouble to officially complain, there are undoubtedly a whole lot more people unhappy with Comcast’s data caps.

And they should be. The data caps are being peddled by Comcast as a fairness issue when they are just a blatant price increase. I actually would be a little less incensed about what Comcast is doing if along with raising rates for large data users they also lowered the rates for smaller users. That would be rate rebalancing and could be argued as something fair. But since rates can only be increased this just means a lot more revenue for Comcast with practically zero additional costs to justify it.

I guess it’s not surprising that Congress would support the large ISPs over people since that seems to be the trend these days. This bill would also stop any action at the FCC against the very unpopular data caps on cellular data. While there is no guarantee that this becomes law, this seems to have bilateral support, so there is a good chance this could become law.

As also seems typical these days, the bill bundles something distasteful with something that few people are  against. The bill will excuse small ISPs from complying with the detailed customer notice requirements which are intended to tell people the truth about their broadband connections.

If you are a small carrier and have a good network you should not be afraid of this requirement, and in fact you ought to comply to point out the difference between you and your competitors. I certainly will be advising companies to comply with this requirement even if this law excuses them. If you have a good network and offer an honest broadband product you ought to crow about it in every way imaginable.

Interestingly, some of the small companies complaining about the notice regulations are WISPs, or wireless ISPs. While there are many very good WISPs, I also get reports from rural communities of WISPs who lie badly about broadband speeds. If I was a rural customer and a WISP was my only option, I don’t know that I would be happy that Congress wants to give them an out from telling me the truth.

And the bill is not only about data caps. All of the big cable companies have made announcements over the last year or two that they now consider themselves as ISPs rather than cable companies. Since they are almost all publicly traded firms they are under tremendous pressure to keep increasing revenues and margins year after year. The only way they are going to be able to do that is to start regularly raising broadband rates in the same manner that they have historically raised cable rates. This bill will give them permission to raise rates as much as they like and and I think we can expect broadband to be much more expensive in the future.

In a free economy companies are generally allowed to charge whatever they want and the market is supposed to punish the greedy ones. The problem with broadband is that there are too many markets in the country where a given broadband provider has a virtual monopoly. Cable companies have mostly won the speed war, and in most markets their only competitor is much slower DSL that is being sold at low prices to those willing to accept slow speeds for low rates. For most households the cable company is the only broadband alternative – and that makes them a monopoly.

The FCC is supposed to regulate monopoly abuse in the telecom world. They have eased up on regulations of telephone service as it became more competitive. But we are in the opposite situation with broadband with the cable monopoly currently growing stronger day by day.

I am certainly going to complain to my own representatives about this bill, but if this is going to be stopped, then a whole lot of people need to be yelling in a hurry. I can sense that the big ISPs want to get this enacted before people figure out what this bill does. And Comcast surely would like this passed before they introduce their very unpopular data caps everywhere – because then the outcry might be too great to get it passed. But hopefully the red flag can be raised before it’s too late to do anything about this. This is the day I wish my blog had 100,000 readers!

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