No Author (6.12.2007)
http://www.teleclick.ca/2007/06/embarq-keeps-an-eye-out-for-rural-telecom-acquisition-targets/
Embarq looking to advance their competitive position
Regional telephone provider, Embarq Corp., is positioning itself to acquire smaller competitors in the months and years to come, as the telecommunications sector continues to consolidate.
Buying up small rural phone carriers would help Embarq to slash costs and increase efficiency, said the company’s CEO, Daniel Hesse, in an interview late last week.
“Today you have roughly 800 local exchange carriers in the U.S., and we’re competing with much larger competitors — the wireless companies, the cable companies,” Hesse said. He acknowledging, however, that Embarq had yet to find any specific deals where cost benefits outweighed the likely premiums.
“We’re very well positioned to be an acquirer,” he explained, “but in today’s market, a lot of the prices are too high. And we have a very disciplined approach to looking at acquisitions.”
Embarq — which was spun off by wireless giant, Sprint Nextel in May 2006 — has experienced significant growth in the past year, with its stock price rising over 20% since debuting on the market. Hesse believes that a further increase in value could help his company put together an attractive acquisition proposal.
“The stock has moved up a lot in the past year, not only in absolute terms but relative to the industry. If we continue to perform that well, then all of a sudden our equity can become a currency,” the CEO said, referring to the possibility of an all-stock deal.
Embarq offers local, long distance, and broadband internet services in 18 states, primarily in rural areas, and faces strong competition from major cable and wireless providers.
Tuesday, June 12, 2007
Tuesday, June 5, 2007
Telcos Enter The Video Village
Sean Buckley (5. 29. 07)
http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3210
Success Is Predicated On Consistent User Experience
Whether the video signal comes into the home over fiber, DSL, or hybrid coax/fiber, video delivery poses a number of technical and business challenges for telcos entering the video village.
One independent service provider perhaps summed up the challenge of delivering IPTV the best during last year’s TelcoTV conference: “Video is hard; it’s very hard and the first six months are terrible,” said Mike Knoll, CTO for Greenfield, Ind-based Hancock Telephone (see Hancock Telephone Takes on Video).
Hancock Telephone’s experience is far unusual. For one, the telco not only faces the challenge of delivering a better service than cable, but they also have to deal with acquiring content and building a profitable video service. On the technical side, the challenges are just as fierce. Telcos are faced with a dizzying array of network technologies to integrate, in addition to a diversity of home wiring environments to deliver video in a home and ensuring proper quality of experience (QoE).
Still, with cable operators eating away at the service providers’ cash cow voice service revenues, telcos are moving fast on the IPTV challenge.
In the U.S., all eyes are upon the two largest carriers’ IPTV efforts: AT&T and Verizon. Taking a walk before they run approach to IPTV, Verizon—clearly one of the most aggressive FTTP (fiber to the premise) advocates—is using an RF overlay architecture for its FiOS TV service, while putting in place the hooks to get to IPTV when ready.
Thus far, Verizon’s bet is paying off. In Q1 07, Verizon added 141,000 new FiOS customers. Ok, so an RF overlay might not be as exciting as IPTV, it does give Verizon a running start.
While AT&T has taken on more of a conservative approach to its access network choice--using FTTC/FTTN with VDSL2 bonding in existing markets and FTTP in Greenfield builds--Ma Bell plans to have the service available in 30 additional markets by the end of this year.
IPTV is not just for the big boys, though. Along with Hancock Telephone, VA-based NTELOS, an integrated ICP that’s using GPON-based FTTP, will launch its IPTV service later this year. While NTELOS might not be the size of an AT&T, the threat of Comcast coming into their RLEC territories drove it to move to launch new services such as IPTV and SIP-based voice services (see NTELOS’ Common Service Platform). If one thing’s for sure, the consumer appetite for TV is insatiable and users won’t tolerate any service degradation. At a time when the cable operators are set on delivering a quad play service package, not to mention IP-based video, a new telco video customer could become a former customer if they can’t deliver a consistent user experience.
http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3210
Success Is Predicated On Consistent User Experience
While IPTV is certainly a compelling method to deliver a full set of interactive content services to end users, the market is still relatively nascent. According to Infonetics Research, there were only 7 million IPTV subscribers worldwide in 2006, but that number is growing quickly and will jump to nearly 48 million by 2010, says the analyst firm.
Whether the video signal comes into the home over fiber, DSL, or hybrid coax/fiber, video delivery poses a number of technical and business challenges for telcos entering the video village.
One independent service provider perhaps summed up the challenge of delivering IPTV the best during last year’s TelcoTV conference: “Video is hard; it’s very hard and the first six months are terrible,” said Mike Knoll, CTO for Greenfield, Ind-based Hancock Telephone (see Hancock Telephone Takes on Video).
Hancock Telephone’s experience is far unusual. For one, the telco not only faces the challenge of delivering a better service than cable, but they also have to deal with acquiring content and building a profitable video service. On the technical side, the challenges are just as fierce. Telcos are faced with a dizzying array of network technologies to integrate, in addition to a diversity of home wiring environments to deliver video in a home and ensuring proper quality of experience (QoE).
Still, with cable operators eating away at the service providers’ cash cow voice service revenues, telcos are moving fast on the IPTV challenge.
In the U.S., all eyes are upon the two largest carriers’ IPTV efforts: AT&T and Verizon. Taking a walk before they run approach to IPTV, Verizon—clearly one of the most aggressive FTTP (fiber to the premise) advocates—is using an RF overlay architecture for its FiOS TV service, while putting in place the hooks to get to IPTV when ready.
Thus far, Verizon’s bet is paying off. In Q1 07, Verizon added 141,000 new FiOS customers. Ok, so an RF overlay might not be as exciting as IPTV, it does give Verizon a running start.
While AT&T has taken on more of a conservative approach to its access network choice--using FTTC/FTTN with VDSL2 bonding in existing markets and FTTP in Greenfield builds--Ma Bell plans to have the service available in 30 additional markets by the end of this year.
IPTV is not just for the big boys, though. Along with Hancock Telephone, VA-based NTELOS, an integrated ICP that’s using GPON-based FTTP, will launch its IPTV service later this year. While NTELOS might not be the size of an AT&T, the threat of Comcast coming into their RLEC territories drove it to move to launch new services such as IPTV and SIP-based voice services (see NTELOS’ Common Service Platform). If one thing’s for sure, the consumer appetite for TV is insatiable and users won’t tolerate any service degradation. At a time when the cable operators are set on delivering a quad play service package, not to mention IP-based video, a new telco video customer could become a former customer if they can’t deliver a consistent user experience.
Broadband Subscriber Base to Double by 2011
Broadband subscribers to double over the next 5 years.
The number of broadband subscribers worldwide will nearly double over the next five years to more than half a billion, according to research analysis firm In-Stat.
About 65 million new subscribers signed up in the past 12 months, bringing the total to 285 million, In-Stat said. By 2011, the total will be 567 million.
By that time, 58% of all broadband connections will be delivered via DSL, In-Stat said. Nearly 10% will be delivered via fiber-to-the-home.
Today, however, about 92% of broadband connections come through either DSL or cable.
Wednesday, March 21, 2007
Court Backs FCC on VoIP Regulation
Ted Hearn (3.21.07)
http://www.multichannel.com/article/CA6426491.html
The court backs FCC in keeping telecommunications laws from applying to VoIP providers.
A three-judge panel of the U.S. Court of Appeals for the Eighth Circuit Wednesday upheld Federal Communications Commission rules that banned states from applying their telecommunications laws to a class of voice-over-Internet-protocol providers, such as Vonage Holdings.
The court concluded that the FCC acted reasonably in pre-empting state regulation and that the agency could assert its jurisdiction without first having to determine whether VoIP is an information service or a telecommunications service as those terms are defined in federal law.
The FCC’s rules were adopted in late 2004 under former FCC chairman Michael Powell, who wanted to shield nascent VoIP providers from complex and inconsistent state regulation. Minnesota’s effort to regulate Vonage triggered Powell’s moves at the FCC.
There is still a question about whether IP video should be treated as a traditional cable service subject to local franchising authority or whether it’s not a service subject to Title VI in the same way that voice-over-IP isn’t traditional telecommunications subject to all of the [common-carrier] regulations,” Martin told a telecommunications forum.
http://www.multichannel.com/article/CA6426491.html
The court backs FCC in keeping telecommunications laws from applying to VoIP providers.
A three-judge panel of the U.S. Court of Appeals for the Eighth Circuit Wednesday upheld Federal Communications Commission rules that banned states from applying their telecommunications laws to a class of voice-over-Internet-protocol providers, such as Vonage Holdings.
The court concluded that the FCC acted reasonably in pre-empting state regulation and that the agency could assert its jurisdiction without first having to determine whether VoIP is an information service or a telecommunications service as those terms are defined in federal law.
The FCC’s rules were adopted in late 2004 under former FCC chairman Michael Powell, who wanted to shield nascent VoIP providers from complex and inconsistent state regulation. Minnesota’s effort to regulate Vonage triggered Powell’s moves at the FCC.
There is still a question about whether IP video should be treated as a traditional cable service subject to local franchising authority or whether it’s not a service subject to Title VI in the same way that voice-over-IP isn’t traditional telecommunications subject to all of the [common-carrier] regulations,” Martin told a telecommunications forum.
“I think the decision [that] will come out of that [Vonage] case will be critical in trying to craft whether or not the commission’s authority to deal with all of these IP services will continue to be affirmed,” he added.
More reading:
Judges Back FCC Over Attempts To Regulate Internet Phones (Provides a nice history of the ruling)
Judges Back FCC Over Attempts To Regulate Internet Phones (Provides a nice history of the ruling)
FCC Asked To Keep Hands Off IP Video
John Eggerton (3.20.07)
http://www.broadcastingcable.com/article/CA6426258.html?display=Breaking+News
Network 2 has petitioned the FCC to stand down on IP Video regulation.
http://www.broadcastingcable.com/article/CA6426258.html?display=Breaking+News
Network 2 has petitioned the FCC to stand down on IP Video regulation.
Whether or not IPTV is left unregulated will effect the direction of television broadcasts in the future.
Internet TV company Network2 has asked the FCC to declare the commission has no authority to regulate video over the Internet.
The company has asked for an FCC ruling that its IP Video service is free of Title III regulations--broadcast regulations rooted in the scarcity argument--and Title VI regulations--multichannel video regulations rooted in the "gatekeeper" argument. Neither apply to Internet video, the company argues.
Jeff Chester, executive director of the Center for Digital Democracy, says such a ruling would be premature. "Multiplaform access rules will be needed for political speech on mobile and IPTV platforms," he says. "Rules protecting news and public affairs and advertising safeguards will be needed, including protecting children," he said.
Thursday, March 15, 2007
Ericsson: Tandberg Is Key to IPTV
Ray Le Maistre (3.9.07)
http://www.lightreading.com/document.asp?doc_id=119124&site=cdn
Ericsson is looking to purchase Tandberg Television and secure a hold in the IPTV market.
http://www.lightreading.com/document.asp?doc_id=119124&site=cdn
Ericsson is looking to purchase Tandberg Television and secure a hold in the IPTV market.
The successful acquisition of Tandberg Television would help Ericsson play catchup with some of its main telco TV rivals in terms of technology, customers, and deployment experience, says one of the executives behind the bid for the encoding systems specialist.
In addition to the high-capacity video encoding and compression systems for which it is best known, Tandberg TV also has important applications-focused technology, such as headend-based advert insertion capabilities.
Those capabilities would significantly bump up Ericsson's portfolio in terms of video-specific technology, integration experience, and reference customers, areas where Ericsson has some catching up to do.
Ericsson has also been working with its mobile handset partner, Sony Corp. , to develop IPTV user interfaces that "have the same look and feel as the Sony Playstation in terms of the look and feel for navigation. We're going to do a lot of customer research to find out exactly what consumers want."
All eligible for TV converter discount
Rachelle Youglai (3.12.07)
http://www.reuters.com/article/technologyNews/idUSN1235374420070312
Funding dollars are being allocated to keep free television free. This has implications mainly on low income families and broadcast emergency services.
All U.S. households with televisions that use analog technology will be eligible for $40 discount coupons to buy digital converter boxes, the Commerce Department said on Monday.
U.S. television stations are required to switch to only digital broadcasts by February 17, 2009. An estimated 20 million households now rely solely on free over-the-air television.
Some industry sources have estimated the price of a converter box could range between $50 to $60.
All households will be eligible to request up to two $40 coupons to be used to buy up to two digital-to-analog converter boxes until the $990 million program is exhausted. At that point, Congress could approve another $510 million for the program, but the discount coupons would be limited to households that rely on over-the-air analog TVs.
http://www.reuters.com/article/technologyNews/idUSN1235374420070312
Funding dollars are being allocated to keep free television free. This has implications mainly on low income families and broadcast emergency services.
All U.S. households with televisions that use analog technology will be eligible for $40 discount coupons to buy digital converter boxes, the Commerce Department said on Monday.
U.S. television stations are required to switch to only digital broadcasts by February 17, 2009. An estimated 20 million households now rely solely on free over-the-air television.
Some industry sources have estimated the price of a converter box could range between $50 to $60.
All households will be eligible to request up to two $40 coupons to be used to buy up to two digital-to-analog converter boxes until the $990 million program is exhausted. At that point, Congress could approve another $510 million for the program, but the discount coupons would be limited to households that rely on over-the-air analog TVs.
Wednesday, March 14, 2007
What the Verizon Verdict Means for Vonage
Olga Kharif (3.9.07)
http://www.businessweek.com/technology/content/mar2007/tc20070309_887320.htm?chan=technology_technology+index+page_today%27s+top+stories
887320.htm?chan=technology_technology+index+page_today%27s+top+stories
More on Vonage patent lawsuit, the larger implications for Vonage.
After a weeklong hearing in the U.S. District Court for the Eastern District of Virginia, a jury ruled that Vonage Holdings must pay Verizon Communications $58 million in damages and a 5.5% licensing fee per subscriber per month. Vonage's costs per line would increase by about $1.6 per subscriber, or almost 20%.
The company's stock fell 3.86%, to $4.85, an all-time low, the day the verdict was announced.
With its financial position corroded, Vonage, long rumored to be shopping around for a buyer, could finally become cheap enough for an acquisition by a cable company, or even a telco like Verizon, whose VoiceWing Web-calling service has so far failed to take off. Indeed, Verizon's 19-page complaint notes: "Vonage's expanded marketing and advertising of its infringing services threaten to shift more customers and goodwill to its business at Verizon's expense"
This decision carries huge implications for the $4.4 billion U.S. VoIP-services industry as a whole. "The message this sends to the VoIP industry is, if you build a patent portfolio, it helps you negotiate in these situations," Rabena. The number of VoIP-related lawsuits mounted by telcos and other entrenched players could rise. According to the U.S. Patent & Trademark Office, there are 2,273 patents related to VoIP, many of them belonging to telecom old-timers like Verizon, AT&T, Motorola, Broadcom, and Cisco. http://www.businessweek.com/technology/content/mar2007/tc20070309_887320.htm?chan=technology_technology+index+page_today%27s+top+stories
887320.htm?chan=technology_technology+index+page_today%27s+top+stories
More on Vonage patent lawsuit, the larger implications for Vonage.
After a weeklong hearing in the U.S. District Court for the Eastern District of Virginia, a jury ruled that Vonage Holdings must pay Verizon Communications $58 million in damages and a 5.5% licensing fee per subscriber per month. Vonage's costs per line would increase by about $1.6 per subscriber, or almost 20%.
The company's stock fell 3.86%, to $4.85, an all-time low, the day the verdict was announced.
With its financial position corroded, Vonage, long rumored to be shopping around for a buyer, could finally become cheap enough for an acquisition by a cable company, or even a telco like Verizon, whose VoiceWing Web-calling service has so far failed to take off. Indeed, Verizon's 19-page complaint notes: "Vonage's expanded marketing and advertising of its infringing services threaten to shift more customers and goodwill to its business at Verizon's expense"
And that spells more trouble ahead for small Web-calling service providers looking to retain their foothold on the market. In his closing arguments on Mar. 7, Vonage's lawyer said, "this case is about choice." Thanks to the Verizon victory and other potential legal action in the future, the choices for Vonage will be far fewer.
Vonage to pay $58 million in Verizon patent case
Marguerite Reardon
http://news.com.com/Vonage+to+pay+58+million+in+Verizon+patent+case/2100-1036_3-6165747
.html?tag=html.alert
Internet phone provider Vonage has been ordered to pay $58 million to Verizon Communications for infringing on three of the company's patents.
Vonage, which provides a service that turns broadband connections into phone lines, was found by a Virginia jury to have infringed patents that cover the technology used to connect these VoIP calls to the regular phone network, as well as some features for implementing call-waiting and voice-mail services.
The monetary damages and the ongoing royalties awarded Verizon could have a significant impact on Vonage, if it doesn't come up with a solution that doesn't infringe the patents. The Internet phone service provider has yet to turn a profit.
But the biggest risk for Vonage is that the company could also be forced to shut down its service. In addition to the damages, Verizon is asking the court for an injunction. On March 23, U.S. Judge Claude Hilton will hear arguments to decide whether Vonage's service should stop offering service until an acceptable licensing agreement can be worked out. Vonage said in a press release that it doesn't expect any interruption in service.
"Even though the damages could have been worse, the royalty fees and ongoing legal battle, will add more expenses," Moran said. "And that could impact the future profitability of the company."
http://news.com.com/Vonage+to+pay+58+million+in+Verizon+patent+case/2100-1036_3-6165747
.html?tag=html.alert
Internet phone provider Vonage has been ordered to pay $58 million to Verizon Communications for infringing on three of the company's patents.
Vonage, which provides a service that turns broadband connections into phone lines, was found by a Virginia jury to have infringed patents that cover the technology used to connect these VoIP calls to the regular phone network, as well as some features for implementing call-waiting and voice-mail services.
The monetary damages and the ongoing royalties awarded Verizon could have a significant impact on Vonage, if it doesn't come up with a solution that doesn't infringe the patents. The Internet phone service provider has yet to turn a profit.
But the biggest risk for Vonage is that the company could also be forced to shut down its service. In addition to the damages, Verizon is asking the court for an injunction. On March 23, U.S. Judge Claude Hilton will hear arguments to decide whether Vonage's service should stop offering service until an acceptable licensing agreement can be worked out. Vonage said in a press release that it doesn't expect any interruption in service.
"Even though the damages could have been worse, the royalty fees and ongoing legal battle, will add more expenses," Moran said. "And that could impact the future profitability of the company."
Wednesday, March 7, 2007
FCC rules speed telco video
Carol Wilson (3.5.07)
http://telephonyonline.com/home/news/FCC_video_rules_030507/
FCC finalized rules to speed up the local franchising process to a 90-day cap with mixed reactions.
The Federal Communications Commission today issued new rules designed to speed up the local video franchising process. The rules set a 90-day limit on the local government’s decision and prohibit extraordinary requests for deployment of hardware or for tying in of unrelated requests.
Major telecoms are excited about the news stating it will provide choices and create competition. FFC chairman Martin claims this increased competition will fight rising cable costs. Democratic Commissioner Michael Copps said the rules failed to promote genuine broadband competition and said he favored a provision which would have retained local franchise authority rights to impose specific build-out requirements and public programming.
Republican Commissioner Robert McDowell said, however, that the new policy seeks to address both sides of the issue. “This order strikes a careful balance between establishing a de-regulatory national framework to clear unnecessary regulatory underbrush, while also preserving local control over local issues,” he said.
The new rules may also face a legal challenge, either from the cable industry or groups representing local governments.
The FCC has agreed to announce within six months whether the 90-day rule will apply to incumbent cable operators that are seeking to renew their local franchises.
Further reading:
http://www.multichannel.com/article/CA6421729.html?display=Breaking+News
http://telephonyonline.com/home/news/FCC_video_rules_030507/
FCC finalized rules to speed up the local franchising process to a 90-day cap with mixed reactions.
The Federal Communications Commission today issued new rules designed to speed up the local video franchising process. The rules set a 90-day limit on the local government’s decision and prohibit extraordinary requests for deployment of hardware or for tying in of unrelated requests.
Major telecoms are excited about the news stating it will provide choices and create competition. FFC chairman Martin claims this increased competition will fight rising cable costs. Democratic Commissioner Michael Copps said the rules failed to promote genuine broadband competition and said he favored a provision which would have retained local franchise authority rights to impose specific build-out requirements and public programming.
Republican Commissioner Robert McDowell said, however, that the new policy seeks to address both sides of the issue. “This order strikes a careful balance between establishing a de-regulatory national framework to clear unnecessary regulatory underbrush, while also preserving local control over local issues,” he said.
The new rules may also face a legal challenge, either from the cable industry or groups representing local governments.
The FCC has agreed to announce within six months whether the 90-day rule will apply to incumbent cable operators that are seeking to renew their local franchises.
Further reading:
http://www.multichannel.com/article/CA6421729.html?display=Breaking+News
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