January 2010

NCTA: Free Press Crying 'Collusion' In Crowded, Competitive Marketplace

National Cable & Telecommunications Association President Kyle McSlarrow issued an extensive statement Monday branding Free Press' suggesting that TV Everywhere is collusion "strange" at best, and vigorously defending what he called an effort to come up with a business model for compensating programmers for online content. Free Press and other advocacy groups said they were not opposed to pay models for content, just not ones that included companies getting together to create an anticompetitive model of exclusive delivery of Internet content. Free Press wants Congress and the Justice Department to investigate TV Everywhere for possible collusion among its cable, satellite and telecommunications participants. "The call for an 'investigation' of TV Everywhere has no factual or legal basis no matter how many times Free Press and its allies repeat the words 'collusion,' 'cartel' and 'illegal.' In the name of protecting competition, they would actually reduce the amount of online content available to consumers," McSlarrow said.

Rules Set For BitTorrent Case

The U.S. Court of Appeals for the D.C. Circuit has slated Comcast's appeal of the Federal Communications Commission's BitTorrent decision as the third of three cases to be heard Jan. 8. According to Comcast, each side has been given 25 minutes — actually a lot of time, as these arguments go, and a possible indication that the court has a particular interest in the issue. Arguments could be extended even beyond that span, at the judges' discretion, as there is no case scheduled for after it. The FCC found back in summer 2008 that Comcast violated its Internet open-access guidelines by blocking BitTorrent peer-to-peer traffic. Comcast took the FCC to court over the decision, challenging the legal underpinnings as well as the findings that Comcast was in violation, which it said "were not justified by the record."

Heed the Schumpeterian power of the mobile phone

[Commentary] What will the mobile phone devour next? It permanently crushed the gadget that defined the beginning of the last decade - the personal digital assistant - and is eating through the landline telephone, digital camera, iPod and even the watch. The creative destruction has just begun. Investors should heed the mobile phone's Schumpeterian powers. When the century began, bankers 'beamed' each other information via the now-quaint infrared technology of the Palm Pilot, whose maker boasted a $92 billion market value. Palm shifted into mobile phones but lost 97 percent of its value along the way. This should provide a cautionary tale to other industries standing in the cell phone's path. The most obvious target is the traditional telephone. Almost a quarter of all American households, and counting, no longer have a fixed-line phone. That's a drag for operators like AT&T and Verizon who must continue to run their expensive copper-based infrastructure despite running the biggest wireless networks, but terrifying for providers without wireless operations, like Qwest and Frontier. Even the iPod faces obsolescence. Unit sales are in decline. Although that's not a problem for Apple as long as its customers listen to music on their pricier iPhones instead.

CES To Highlight Over-The-Air Innovation

The National Association of Broadcasters is showcasing the consumer benefits of some of the many innovations being delivered through digital over-the-air broadcasting at a gathering this week at the annual Consumer Electronics Show. Attendees will hear about and experience innovations made possible only through broadcasting such as Sezmi, set to bring advanced television services at very low cost to consumers in 2010, and mobile television solutions presented by the Open Mobile Video Coalition. Mobile television is expected to see growth this year through the adoption of digital broadcast-based services.

Universal Service Comments Due January 28

On December 15, 2009, the Federal Communications Commission released a further notice of proposed rulemaking regarding high-cost universal service support for non-rural carriers, in response to the decision of the United States Court of Appeals for the Tenth Circuit in Qwest Communications International, Inc. v. FCC. The Commission set the comment and reply comment deadlines as 30 and 45 days, respectively, after publication of the summary of the further notice in the Federal Register. On December 29, 2009, a summary of the further notice appeared in the Federal Register. Accordingly, comments will be due on January 28, 2010, and reply comments will be due on February 12, 2010.

The Triumph of VoIP Could Spell Doom for Voice

[Commentary] Voice calling has been the engine of profit for the telcos for a century, and most of it has been old-fashioned switched voice -- what's called "plain old telephone service" (POTS). When VoIP was first introduced, everybody predicted that voice on the Internet would destroy the old POTS model. Now, with even service providers buying VoIP companies, it looks like that's about to happen. And the changes on the Internet could be profound. Imagine for a moment that your voice services were all replaced by Skype or a similar service. If you open your calling to everyone, you can expect zillions of telemarketing calls with no hope of relief, because regulators can't trace or even authenticate the user names. Same with harassing calls. And if you call 911, maybe somebody will come -- maybe even to the location where you made the call -- but you probably can't be certain. Forget wiretaps on criminals and potential terrorists, because there's no guarantee lawful intercept will work. Nobody is going to tolerate this sort of thing, but that's what the future would look like if we simply transferred our voice calls to current IP-based services without additional steps and safeguards. To get some protection, we'd have to regulate these new voice services.

Technology not as advanced by 2010 as some had hoped

Despite iPods, genetic sequencing, the Internet and Twitter, nearly a third of Americans said they thought there would be more technological advances by the year 2010. Not everyone expected to be living like The Jetsons, the space age television cartoon series of the early 1960s, but the Zogby International survey of more than 3,000 adults in the United States showed many were less than enthusiastic about how far we have come by the dawn of a new decade. "The age group most likely to be disappointed with the current level of technological advancement are 35 to 54-year-olds (36 percent)," Zogby, which conducted the survey commissioned by the website ScoopDaily, said in a statement. About 21 percent of people believe we are more technologically advanced than they thought we would be by 2010, while 37 percent believed we are on target for their expectations.

(12/31)

2010: The Year of the Successful Online News Paywall?

Sweeping aside the controversy and nonsense surrounding the issue of online news content paywalls, the Financial Times has stepped up to the mark to note 2010 will see income from paywalls surpassing ad revenues. The FT Group's chief exec John Ridding is responsible for the news, unequivocally stating "we reckon [2010] will be the first year that revenues from content overtake revenues from print advertising." Since the online content is protected by a partial paywall, and many corporate subscribers pay for physical editions of the paper to keep abreast of financial news, its these figures that represent what Ridding is referring to as "content revenues." And though the news seems small, it's pretty amazing stuff: Advertising revenues are, for many, the one and only way to make money in a world where physical newspapers readership figures are dipping, and where the online publishing market is dominated by a free-for-all philosophy for access. So, will 2010 be the year of the successful news site paywall? Not for everyone, perhaps, though it might work for some. The physical newspaper also isn't quite dead yet, so don't expect to see them disappearing this year. Unless, that is, some upstart newcomer with revolutionary digital content distribution on a paradigm-breaking piece of hardware comes along. Apple Tablet anyone?

Gov. Quinn makes pro-consumer choice in naming Flores new ICC chief

By naming Chicago Alderman Manuel Flores the new chairman of the Illinois Commerce Commission, Gov. Pat Quinn (D) has met expectations that he would remake the state's utility regulatory agency into a pro-consumer body. It just took him longer to do it than many observers expected. Outgoing ICC Chairman Charles Box's term ended roughly a year ago. Gov Quinn was expected to replace Chairman Box, who has sided with utilities on a number of issues during his term, within months of his ascension to the governor's post last February. The appointment of the 1st Ward alderman, along with the naming of community organizer John Colgan last year to an open ICC post, puts the governor's pro-consumer stamp on a body that he has long complained is too easy on the utilities it oversees.

Innovation Inspired by Economics: 2010 Health IT Forecast

[Commentary] Health information technology is one of the fastest-growing business sectors, expected to grow by 11% annually through 2013, according to Scientia Advisors. That's a bullish expectation, especially in the context of continued financial challenges for U.S. health providers. Health IT purchases will be made despite fiscal constraints such as reimbursement pressure, inflationary costs for labor, supplies and other operating expenses, as well as high patient bad debt expenses. Necessity being the mother of invention, a constrained economic environment will lead to health IT innovations in two ways. First, lower cost technologies are emerging in health IT, such as open-source software, software as a service, and cloud computing, all of which will be priced lower than traditional health IT offerings. Cloud computing (the use of the Internet to store, manipulate and deliver data already existing on the Web) is seen by some health IT consultants as a useful tool in health, especially for small medical practices. Necessity is the mother in a second respect. The financial risks and opportunity costs of health IT adoption will be managed with innovative deals struck by vendors and third parties who see this segment as a growth opportunity.

Benton

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