The Inquisitr » verizon

Tiered broadband – Not because they have to but because they can

Steven Hodson — Wed, 18 Nov 2009 02:38:16 +0000

There is this inane belief that at some point the Internet will be everywhere accessible 24/7 no matter where you are or what device you might be using. Everything will be streaming video and instantaneous news all weaved together by the ever increasing real time web.

It’s an illusion. A nice illusion but an illusion all the same.

AS much as we might want this to become a reality the truth is that as long as broadband access is controlled by companies like AT&T, Verizon, Comcast, or TimeWarner we will not see that dream. The simple reason is that in order to have that kind of Internet we must have always on access with out any kind of restrictions over speed or usage.

Except this isn’t what these companies want because by providing such a service they won’t continue making the enormous profits that they are and neither would they be able to continue to pull the wool over regulator eyes and padding their pockets with whatever hand-outs they can finagle for themselves.

It is interesting that at the same time that we are starting to see the speeds that can truly provide high quality streaming video of a quality that makes it worth watching these companies are trying to bring in tiered access. Under the guise of supposed customer service of providing access at a price anyone can afford these providers are setting us all up for either over-priced premium services or hidden surcharges that will inevitably show up on our bills as we move to an Internet based video entertainment lifestyle.

Stacey Higginbotham has a good post at GigaOM today where she raised the point of tiered services with Brian Whitton, executive director of access technologies at Verizon.

Why would Verizon, which is building out a fiber-to-the-home network, plan to eventually move to some sort of consumption model?

The answer is because it can. I spoke with Brian Whitton, executive director of access technologies at Verizon, about the FiOS network in an effort to get some clarity regarding the rumor that even it would eventually face constraints under the onslaught of video. Whitton quickly disabused me of that notion, pointing out that the network is built to be upgradeable for decades to come by replacing electronics at the ends of the pipe. He basically told me that Verizon didn’t spend $18 billion (it spent $23 billion in total but some of that would have been spent anyhow) in additional upgrades to its network only to rip it out a few years later, and explained how the fiber stretches from the customer home all the way back to the fiber-based long-haul network.

So any notion that these tiered services are because of a pending network congestion of video traffic is basically bullshit. It is because the providers have found that the majority of people don’t understand that streaming video counts against any caps you might have on a tiered account. As well we have the problem of increasing straight downloads of video with its incredible large file size – that will only get larger as video quality goes up – can eat up your account faster than you can shake a stick at.

This idea of tiered service has nothing to do with network capabilities but everything with lack of true competition and using any trick possible to increase profit margins at the expense of consumers for whom the Internet is becoming more of a necessity than a luxury.

Motorola Droid Tops 100,000 Sales In First Weekend

James Allen Johnson — Tue, 10 Nov 2009 16:09:50 +0000

With critically lauded appeal, a mobile operating system that continues to grow in popularity and a sleek design supported by a advertising heavy campaign, it doesn’t surprise me that the Motorola Droid did well in terms of opening week sales, now it’s just up to Verizon to keep supply on par with demand.

According to a recent Bloomberg report, Verizon depleted half of their 200,000 unit supply over the weekend, with Motorola and Verizon expecting to move one million Android based handsets before the end of 2009. Although those predictions include other Android handsets on the horizon instead of focusing solely on the Moto Droid.

The numbers make for a good weekend for Motorola who moved much of their staff into their newly formed Google Android department, while largely banking on the success of the Android OS. It’s a very nice first release and their devices can only get better from this point moving forward.

The Independence Day delivery of the DROID

Steven Hodson — Wed, 04 Nov 2009 03:38:10 +0000

Market share in the mobile phone market is fought by percentage points and exceptional products. Up until this point there is no denying the fact that Apple’s iPhone has been gaining ground percentage point by percentage point. Combined with an exceptional product that has left the other mobile phone providers eating their dust Apple has been a disruptive force in the market place.

Android based phones held out early promise that they would be able to take on the the Big A and take back some of that market. The only problem was that the product didn’t live up to the hype and no matter what advertising they tried Apple kept marching forward.

Then came word of Android V2.0 and a whole new phone from Motorola that rumor had it could be the phone that could not neessarily stop Apple in it’s tracks it could slow it down. For the most part we have been seeing anything to do with the Droid phone, as Motorola is calling it in the US, has been pretty piecemeal.

The advertising campaign around the phone has been cryptic and offering only the smallest glimpse of what is to come. Now if the company was to win any points for creative advertising the newest offering definitely deserves some major points for attention getting.

Courtesy of the crew over at Boy Genius here is the latest advertising from Motorola and appears to have just hit the web. Enjoy.

Verizon to cut the copper umbilical cord

Steven Hodson — Fri, 18 Sep 2009 04:20:00 +0000

The telephone business has been built around the copper wire that flows through our communities, cities, and countries like a communication blood stream. However those landline phones that have been an integral part of our homes are headed the way of the Dodo bird – it is just a matter of time.

For Ivan Seidenberg, CEO of Verizon Communications, that time is now. As more and more people are cancelling their traditional landline phones Verizon has decided to not be “like the dog chasing the bus”. Part of this is the selling off most of its rural operations and spending billions to wire the rest of its territory with its FiOS fiber optic network,

FiOS, of course, offers voice calling as well as video and Internet service, but from now, on traditional phone service will be more of an add-on than the centerpiece of Verizon’s offerings to consumers (much as voice service is treated today by cable firms).

“Video is going to be the core product in the fixed-line business,” Mr. Seidenberg declared. And the focus will move from selling bundles of video and landline to video and cellphones, he added.

By converting most of its landline operation to FiOS, Mr. Seidenberg said Verizon has a new opportunity to cut costs sharply.

Source: Bits Blog – Verizon Boss Hangs Up on Landline Phone Business

Mr. Seidenberg is just beginning to work through all the implications of these changes as well as starting to reorganize Verizon in order to emphasize this shift in strategy.

Verizon to cut 8000+ jobs in next 6 months

Paul Short — Mon, 27 Jul 2009 19:51:55 +0000

U.S. telephone company, Verizon, has announced that it will be eliminating more than 8000 jobs over the next 6 months.

Most of the Verizon job cuts will be from the Wireline side of the company, which uses hardwired land lines to provide telephone and data services to it’s customers. The Wireline division has been slowly shrinking for the past several years, but that will now be accelerated. The company’s Wireless division has been expanding and will continue to expand in the future.

Verizon CFO John Killian, told BNO News on Monday:

“I have been very focused on the cost side since taking over as CFO. Although we are taking steps to mitigate the negative impacts of the economy in the short-term, we also need to more significantly reduce the wireline cost structure over the next 12 to 18 months. As part of our ongoing program to resize and reduce the cost structure, we reduced headcount by more than 8,000 over the last 12 months. We plan to do more than 8,000 in force and contractor reductions in the second half of this year. We are also attacking all other cost categories, including network integration, travel, sourcing, rationalizing our real estate portfolio, and all other areas.”

Source: BNO News

The Verizon iPhone: Could It Be?

JR — Mon, 27 Apr 2009 15:47:18 +0000

The iPhone may be coming to Verizon, if recent reports are to be believed. Apple has been “discussing” the idea of offering the iPhone on Verizon’s network, a story published in USA Today suggests, citing unnamed “people familiar with the situation.”

The Verizon iPhone?

The Verizon iPhone discussions have moved into “high-level” status, USA Today says, though the paper’s sources do indicate the talks began while Steve Jobs was still actively involved with the company’s day-to-day decisions.

According to the sources, a Verizon iPhone could become a reality as soon as 2010. That’s the same year Apple’s exclusive contract with AT&T is said to expire.

This is far from the first time rumors have come up about the iPhone heading to other networks. Just a couple of months ago, an Indian blog cited “deep throats” within Apple as saying a Verizon-iPhone announcement would be made “soon.”

Verizon, remember, passed on the iPhone when the device was first under development. At the time, reports suggested the company felt Apple was too “demanding” over marketing and pricing and control.

So could this one be the real deal? As we all know, iPhone rumors are a dime a dozen. The timing with the end of AT&T’s contract is close enough that this could be believable, but as with all Apple rumors, it still has to be taken with a grain of salt.

Do you buy it?

Lies, Damn Lies, and Twilight Download Statistics

Duncan Riley — Wed, 15 Apr 2009 11:38:57 +0000

Stacey Higginbotham at GigaOm yesterday received a lot of attention for a post she wrote arguing that that metered broadband suffers a “Twilight Problem” based on a series of calculations based around downloading the movie Twilight. Our own Steven Hodson said that it highlights that “metered broadband will kill online video.”

As I’m lying here typing this, with my son and friend in another room streaming a movie, and my wife lying next to me in bed streaming a TV program, all on one of these “evil” metered plans, I though I might take a look at these “online video” ending statistics.

Higginbotham uses as her example the HD version of Twilight that she clocks in at 3.8gb. I doubt very much if Apple is the most efficient at file delivery (and I’ve argued before that scarcity drives innovation, in this case more efficient delivery) but lets use the 3.8gb as our starting figure.

Higginbotham says that a user on Time Warner’s cheapest plan of $15/ month for 1gb, with $2 for each additional gb will pay a headline grabbing $20.60 in download costs.

Sounds scary doesn’t it. Only two tiny little problems: first, she presumes people who download movies would be retarded enough to sign up to a 1gb plan to begin with; it doesn’t take Sherlock Holmes to work out that if you’re renting movies online, that you’d be better off on a higher plan. But here’s the even better part she didn’t mention.

That 1gb/ $15 plan only comes with speeds on 768 KB/128kbps. Even presuming that you got precisely the maximum 768kbps on your download (and I’ve never seen an internet connection yet that delivers the maximum it promises), this poor person paying $20.60 for their download would also have to wait 11 Hours 48 Minutes 22.28 Seconds (calculated here) for the file to download. Even allowing for a stream starting while the file was still downloading, you’d still have to buffer it for 9 hours to watch it in one sitting.

This is not to say that there are some severely mentally challenged people out there who would find this acceptable, but for the 99.9999% of the population who rents movies online, this is not going to happen because they wouldn’t sign up for it. Nice headline figure, complete BS in real world application.

Hidden Costs

Higginbotham then goes through and allocates the costs of downloading Twilight based on other plans, simply by allocating the percentage of the cap used by the download against the total cap cost.

There’s a problem with that: it presumes that the cap will be used in full. Example:

we’ll use AT&T’s U-verse rate of $55 per month divided by the 150 GB cap it’s said it will implement. That nets out to AT&T charging 36 cents per GB, which means the bandwidth for “Twilight” will cost $1.37. Adding in that $3.99 rental fee means my vampire fixation will cost me $5.36 to watch without leaving my couch.

The problem is that caps rarely are used in full, particularly at this level. Comcast claim that only 0.1% of their users use more than 250gb per month. One figure quoted regularly (example here) says that the average user uses only 2-3GB per month; obviously that won’t be a person who regularly downloads HD movies, but it’s an important point.

Pinning down average downloads of movies is a statistical challenge; in Australia for example, one major online DVD distributor says its “up to” 5 videos a month. If that applied to downloaded movies in the AT&T example, that’s 19gb per month. If it’s 10 movies, that’s 38gb per month. 20 goes to 72gb, 40 goes to 144gb, so you’d be watching 1.3 HD movies every day downloaded from the net to get up to your cap. Given that for a select few 40 movies a month is unlikely, the real cost of each download is actually higher, because the cost of the download would be the percentage of data used for the month, not the cap.

But the same economics apply for unlimited plans.

The equivalent 10mbps unlimited plan on Verizon costs nearly the same as AT&T’s 150gb capped plan (AT&T is $59.90, Verizon $59.90 without phone, $57.90 with phone without a one year contract.)

The only way you would save with the uncapped plan is to watch more than 40 HD Twilights, or to consume enough bandwidth doing other things (online gaming is surprisingly efficient despite claims otherwise) to use MORE than 150gb.

And yet this is what Higginbotham writes:

Verizon: Since Verizon doesn’t meter or cap its service (or plan to), the cost to watch Twilight only reflects the $3.99 rental fee. A user still pays for broadband (as they do even without a metered plan), but without a limit on data downloads, its impossible to calculate a per-GB cost for downloading content.

You can calculate the cost if you make a presumption about how many movies will be watched and draw a figure for non-movie consumption, not exactly challenging stuff, particularly given the other presumptions. But here’s where it gets better. Lets say you only want to watch your five movies (presumably all in HD), do some regular surfing, maybe some VOIP. Will you still save money with a uncapped plan?

Time Warner offers its Road Runner Standard package for $31.95/ month unbundled, or less in a bundle. It comes with 40gb per month. If you downloaded 5 HD movies, played some games, did some surfing, watched some videos on YouTube, you might just get to 40gb if you were trying really hard. You instantly save $28 over the “uncapped” plan with Verizon.

But is 40gb a month enough? As I’ve written previously, despite living in a house with 3x more internet connected devices than people, waking up to streaming radio on my Chumby, working from home online, including uploads of videos (note in Australia they count uploads to a cap), my son comes home from school and watches YouTube videos and plays online games, and then nearly exclusively we only consume online media of an evening, on a busy month we might hit 50-60gb. On average we do 30-40gb per month. But we’re not average: very few households would have anywhere near the non-stop internet usage we have across as many devices.

The world is not ending, and statistics can always be what you want them to be if you ignore certain facts that get in the way of the picture you are trying to paint, as is the case of the Twilight problem stats.

In an ideal world, there would be no caps; however in a free market where the cost of wholesale access is not unlimited, retail providers are free to pick their models. If people really feel so strongly about the rates being charged, don’t pay for them; if you’re in a large city, you’ll usually have a choice. But note this one thing: a one size fits all isn’t necessarily the superior model for all consumers. Uncapped plans can actually end up costing significantly more, and I’m yet to see a decent argument stating why users who consume the most should be subsidized by those who use little.

Daughter’s texting cost family $4,756.25 – Damn!

Steven Hodson — Fri, 10 Apr 2009 21:32:49 +0000

Texting has become something of our next social disease but in most cases doesn’t much more damage that give you sore thumbs especially if you are in the habit of sending out 10,000 text messages. The real problem is when you suddenly find yourself with a hefty bill at the end of the month as Gregg and Jaylene Christoffersen did recently.

It turns out their daughter, Dena Christoffersen, got a little over active at school with her texting habit on a phone that her parents had thought the texting had been disabled. Well it turns out that it wasn’t and Verizon was good enough to send them a bill for $4,756.25.

Not only that but during this time Dena’s grades went from As and Bs to solid Fs right across the board. Combine the two things together and Gregg Christoffersen did the only thing a father could do – he took a hammer to the phone. Dena has also been grounded until the end of the school years, but since she has lost her phone her grades have made a marked recovery.

On the money part of it Verizon was good enough to take the ax to the bill and reduce it down to a more reasonable level.

[via 9NEWS.com]

Verizon Suffers Security Slip in Security Seminar Invites

JR — Fri, 10 Oct 2008 17:05:05 +0000

Talk about awesome irony: Verizon accidentally included the private e-mail addresses of 1,200 IT professionals in a mass-mailed invitation for a seminar about protecting personal data.

The communications company sent more than a dozen e-mails containing the addresses, according to technology professionals who contacted Network World. The messages touted a series of upcoming events, including one called “Secure the Information, Secure the Infrastructure,” and another called the “Data Breach Investigations Report Road Show.” The Verizon employee who sent them put all the e-mail addresses in plain view in the “To” field, rather than obscuring them in the “BCC” field as most mass mailings would do, the recipients say.

When one IT worker responded to point out the problems, Verizon wrote back and apologized for the “lapse in judgment,” he tells Network World. The worker says he received 17 different messages from Verizon within the day, each with hundreds of e-mail addresses listed at the top.

Let’s hope Verizon saved a front-row seat at the seminar for its employee to attend.

Rhapsody Goes Mobile With Verizon

JR — Mon, 30 Jun 2008 14:48:03 +0000

RealNetworks’ Rhapsody music service is going mobile with a new Verizon partnership launching today.

The deal — branded as V CAST Music — will give users the option of getting unlimited music downloads to their phones for $15 a month. The charge includes the option to download on two other compatible phones or PCs. There’s also a per-song download option, costing $1.99 a pop.

The service is now available on the LG Decoy, LG Dare, MOTO W755, Samsung SCH-u550, Samsung Glyde, and Samsung Juke phones. Some other phones can get a store-initiated software upgrade to gain support.

Real Networks

ISPs Eye Bandwidth-Based Charges

JR — Wed, 07 May 2008 15:46:50 +0000

A big bandwidth could soon cost you.

Broadband Reports quotes a Comcast insider as saying the company may instate monthly data caps for its internet users. Right now, the insider says, executives are looking at limiting you to 250 gigs per month, then billing you $15 for every additional 10 gigs you transfer.

It wouldn’t be the first time such a plan has been tried. Verizon recently added new plans that charge by the meg, albeit only for mobile broadband customers. And Canadian company Rogers Communications already has caps for its home- and office-based DSL customers.

The Gannett News Service predicts more and more providers will soon look at similar restrictions. One expert they spoke with compares the concept to other common household billing procedures.

“If you use more electricity, you pay for more electricity,” GNS quoted Internet Innovation Alliance Co-Chair Larry Irving as saying.

“This is no different,” he added.