Thursday, December 22, 2005
I had hoped during this year that Vonage customers would have seen many new services like those that their competitors are offering. Wired’s recent pronouncement that BroadVoice was the #1 VoIP service prompted me to check them out. After reviewing their feature line up and included calling countries, I promptly signed up. A week later my Sipura 2100 ATA arrived via FedEx. I quickly set it up and two minutes later I had dial-tone. No special configuring was required on my cable modem, router, ATA, or PC. Just plug it in and it works! This is how VoIP should be.
I could easily place calls on my analog phone and voice quality was good. My MOS comparisons against Vonage gave BroadVoice a slight edge by more than 0.2 points. The web portal allowed me to easily configure selective ringing, do not disturb, and anonymous call rejection. All features Vonage does not offer. I could even provision the second line of my ATA for another VoIP provider like Free World Dialup (FWD). After further digging I found out that BroadVoice supports VoIP peering with FWD, so I can call FWD users directly from my phone with a special dialing code and they can call me. At this point it was clear to me that it was time to put in my local number portability request.
I filled out the form and faxed it to BroadVoice. Their LNP group promptly e-mailed me back confirming submission to Vonage. Committed; now the little problems begin. While on a business call, I lost one direction of my conversation. I called back and it happened again. Later that day, the whole call was dropped. I called customer service (611) and they moved me to a new server. I only experience the problem once since then. It happened because I changed the proxy server on the ATA and not on the application server side. Occasionally the calls are choppy or have too much echo. This problem is not due to bandwidth issues on my cable modem side. There must be bottlenecks somewhere else in the network.
Four weeks after submitting my LNP request, my primary home number is still with Vonage. At least the call quality has improved. Not all of the BroadVoice features are better than Vonage. Vonage sends a WAV file with each voice mail message. BroadVoice only sends an announcement that there is a voice mail, but it contains all of the CID information. Vonage’s Click-2-Call feature works great with Outlook and Firefox. BroadVoice has yet to offer a similar capability. They have their Call Manager that can pull numbers from an Outlook contact list. It only works with Internet Explorer and I cannot get it to work on my desktop computer. BroadVoice Customer Service cannot figure out the problem. Besides I use Firefox. I don’t want to use IE just to use their Call Manager. BroadSoft offers direct integration with Outlook. Hopefully BroadVoice will offer it to their customers soon.
My main concern is that my LNP request has not been fulfilled. Four weeks have passed since I submitted the request. Wireless carriers are required to fill a LNP request within 72 hours. Why not wireline carriers? The FCC is so concerned with E-911 why not with LNP for VoIP? Again we are witness to inconsistent and outdated regulation of this industry.
I have been a loyal and dedicated Vonage customer, but loyalty only goes so far. As a consumer, BroadVoice provides me the calling features and flexibility that Vonage cannot touch. They will probably continue because they use BroadSoft’s products. My main concern is reliability and call quality. They too will improve with time. I subscribed to Vonage at about the same point in their development and lived through it. The marketplace for voice services is becoming competitive again. Let’s hope that we can keep broadband access open and competitive.
Tags: Vonage, BroadVoice, VoIP
Friday, November 18, 2005
Sunday, November 13, 2005
Tags: Vonage, VoIP, Sprint
Tag: on-demand, TV, cable
In the eyes of the recording industry, podcasters are stealing their property and depriving them of licensing royalties. Most podcasters do not make a dime from what they are doing. They are doing it for the love of the music they play. This myopic view will cost them in the long run because consumers will spend their dollars on podsafe music instead of the music we are fed by the record labels. The recording industry should embrace this new broadcast medium instead of alienating it. Podcasting offers the ability to time-shift programs just like TiVo. Also, it breaks the shackles of traditional broadcasting by enabling anyone with a computer, headset, and Internet connection to create a show. If the record companies have not figured it out, their infrastructure is becoming obsolete. The Cheap Revolution allows musicians to produce and distribute quality art without an expensive recording studio and equipment. Artists can sell and publicize their music through live performances and the Internet. Podcasters introduce listeners (i.e. customers) through their podcasts just like radio stations. Who needs the record companies with some podcasts reaching a million downloads? Internet music distributors will emerge much like Amazon did to provide an alternative to the traditional distribution process. More record company executives should read The Innovator’s Dilemma because their industry is about to be disrupted.
The second bone-head move of the week comes from Sony’s BMG Entertainment Group. Much has been said this week about Sony installing a rootkit on computers as a method of copy protection. It is bad enough trying to protect computing resources against viruses, worms, Trojan horses, spam, and several other threats from unknown assailants. Now a supposedly trusted source installs malicious software behind your back that allows them or any hacker unfettered access to your computer. This present is all in the name of trying to protect their intellectual property. The news quickly spread and a boycott of all Sony BMG products was initiated. In a CYA move Friday, Sony executives stated that they will stop producing the CD with the rootkit installation. The damage control was a little too late. The impact of their initial decision to install the rootkit will cost Sony sales and consumer trust. What amazes me is how could executives at a once-renowned technology company ever permit the production of these CD in the first place.
This continual trust eroding behavior by the industry is creating a measurable impact on music sales by consumers. As they keep eroding consumer confidence, consumers will look towards alternate sources for their music. The VC community is quietly funding companies that are building an alternative industry to the traditional recording industry. Big technology companies like Microsoft and Apple are investing in them as well. Podcasting is attracting the attention of advertisers. Musicians embrace a new distribution source because it offers them the chance of keeping a greater portion of the revenue from the sales of their work. The recording is not as invincible as it thinks it is. This new disruptive business model will succeed as long as the traditional recording industry keeps making anti-consumer moves like the two this week. I wish Adam Curry and the rest of them the best of luck. It is time for a change anyway.
Tag: Sony, Curry, podcast, rootkit
Sunday, November 06, 2005
Just a day or two after I finished my first draft of my previous article, Ed Whitacre, CEO of SBC Corporation, demonstrated the arrogance prevalent in the executive management of so many carriers. Before I alienate many of my friends and colleagues in SBC and the other RBOC, there are many enlightened managers in these companies and some of the top executives get it. I wish I could say the same for Mr. Whitacre. I do admire how he as amassed SBC into a dominate telecommunications force when his parent company (AT&T) dwindled away due to mismanagement. Watching it as an ex-AT&T employee broke my heart. Also, I look forward to a new AT&T emerging from the shadows of SBC. He needs a bit (well, maybe a ton) of enlightenment as to where the industry is now and where it is going.
Mr. Whitacre was interviewed in Business Week about AT&T and moving the new company forward. During the interview he was asked about competitors such as Vonage, Yahoo!, Google, and Microsoft. When asked the question, “How concerned are you about Internet upstarts like Google (GOOG), MSN, Vonage, and others?” Mr. Whitacre responded,
“How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes? The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!”
He must think that he is the 800 pound gorilla. The combined market capitalization of those four companies is 6 times that of SBC. He will be in for a real battle if he wants to close his network to other content and service providers. SBC is providing IP transport over DSL; no more, no less. Any customer of SBC Yahoo! DSL knows that they rely solely on Yahoo! to deliver and support the content. This is equivalent to selling a TV and saying to the customer that they can only watch a test pattern on channel 6. SBC no longer has a monopoly on access. A duopoly exists in most areas, and technology is enabling more access providers to set up shop. Wi-Fi, EVDO, and WiMAX are enabling access technologies that offer customers alternatives to the oversubscribed, twisted-pair DSL lines of SBC. There is nothing stopping Microsoft or Google from building their own networks with these technologies. Google may even get a shot at building their own Wi-Fi network in San Francisco right in SBC’s backyard. Shut down their access to their customers and watch how fast these true 800 pound gorillas find an alternative way to reach customers.
Furthermore, Mr. Whitacre wants to continue to regulate the industry to his company’s advantage. That strategy may have worked in the past, but the landscape is changing and the content providers know how to work the government as well if not better. His behavior is perfectly understandable based on his heritage, but the industry has changed. Tom Evslin goes into detail about the mentality behind the old regime (link). While he believes that he is operating in the best interest of SBC, he is missing the opportunity to get the company out of its earnings slump.
By continuing to focus on controlling the pipe, he is missing the chance to turn SBC/AT&T into a service and content powerhouse. The company can leverage the network assets of SBC, Cingular, and AT&T and the world renowned brand of AT&T to package content and services to customers worldwide. Instead he would rather wage war against Vonage or Google in Galena, Illinois. With that prevailing attitude, he will relegate his company to the same future as AT&T.
Watch out Ed or Google just may buy SBC. They know that the network is just an enabler and delivering content is where their growth lies. The message is simple: use your assets to deliver world-class services and content or face being extinct.
Tag: telecom, SBC, Whitacre
Saturday, November 05, 2005
Broadband penetration numbers in OECD states
|Penetration, number of lines per 100|
|1||Korea||13.9||8.9||2.7||25.5||12 260 969|
|2||Netherlands||13.6||8.9||0||22.5||3 642 315|
|3||Denmark||13.2||6.1||2.4||21.8||1 176 637|
|5||Switzerland||12.7||7.2||0.4||20.3||1 515 446|
|6||Canada||9.4||9.7||0.1||19.2||6 142 662|
|8||Belgium||11.0||7.3||0||18.2||1 899 652|
|10||Sweden||11.3||2.7||2.5||16.5||1 482 843|
|11||Japan||11.0||2.4||3.0||16.4||20 953 090|
|12||United States||5.5||8.0||1.1||14.5||42 645 815|
|13||United Kingdom||9.7||3.8||0||13.5||8 095 000|
|14||France||11.9||0.8||0||12.8||7 935 900|
|15||Austria||7.0||5.4||0.1||12.5||1 025 036|
|17||Australia||8.5||2.4||0.1||10.9||2 183 300|
|18||Germany||9.9||0.3||0.1||10.2||8 439 732|
|19||Italy||9.4||0||0.6||10.0||5 783 319|
|21||Spain||7.0||2.2||0.1||9.3||3 949 234|
|22||New Zealand||6.4||0.3||0.3||6.9||283 798|
|25||Poland||2.5||0.7||0.1||3.3||1 250 000|
|26||Czech Republic||1.8||1.0||0||2.8||284 200|
|27||Slovak Republic||1.2||0.3||0.1||1.6||86 958|
|29||Mexico||0.8||0.2||0||1.0||1 051 854|
|OECD Total||7.2||3.8||0.8||11.8||136 651 000|
preneurial spirit. Instead they are using over-
regulation of the industry to suppress competition. Divestiture, Telecom Act of 1996, FCC, state utilities commissions, and even the Supreme Court (Brand X Decision) have been the tools used to prevent the growth of broadband services and the creation of new industries in this country. Let’s face it. Our country is now a service based economy, and we need to develop new service based industries to maintain our global leadership. We could continue on this path to protect access to the customer and what rides over the networks to continue down the slippery slope or realize that there is a whole new economy out there to provide content and services.
Some of this regulation made sense for TDM-based networks, but the economics change with IP. Unfortunately telcos and MSO in the U.S are still more focused on the pipes than the services that they deliver. They know that if they can control what rides over the network then they can distribute the content which is where the real revenue and profit lies. What they are forgetting is that consumers have more choices for access these days. Companies that lock down their network are going to see customers go to networks that allow their customers choice of services. In a couple of years WiMAX will enable multiple new carriers to provide access to consumers.
Carriers should focus more on developing and packaging a superior service portfolio to consumers and less on keeping others out of their networks. The ROI would be greater than having a cadre of lawyers and lobbyists at the FCC and state utility commissions. Companies like Vonage decided that they can focus on providing consumers a better voice service and forgo worrying about the pipe. In a few short years they have attracted over one million customers worldwide. Consumers like simplicity. Vonage offers them simplicity. They have two service packages with all of the features that 90% of the consumers use. Carriers should take a cue from Vonage and act as service providers and distributors instead of bandwidth providers. The revenue is three times greater for content than providing bandwidth. This figure will only increase over time. Customers will stick with a carrier that provides a better user experience. What constitutes a better user experience? One that creates simple bundled package with video, voice, and mobility services very reliably. Providing the transport is simply a service differentiator. Carriers can still charge consumers for bandwidth transport and let subscribers purchase services from anyone ala carte, but many will chose to stick with the provider that delivers the superior user experience. An added benefit to carriers is that they may be able to offer these packages worldwide instead if just in their current operating territory; thereby, greatly increasing their addressable market.
Telcos and MSO should think more like distributors than network providers. The auto industry uses a distributor network to deliver its products. Usually the car dealerships make more profit per customer than the manufacturer. Telcos and MSO have the same opportunity before them. They know their customers, and they should be able to offer services packages better than anyone else. Do not worry about the pipe. Concentrate on delivering the services over the pipe. The cost per bit of transport will continue on its decline enabling less capital expenditure on building the network. The network should be seen as a value added part of the service offered. Consumers will still have to purchase access to the Internet, but the service they buy can be cheaper and higher quality if bundled from the carrier. Good marketing will demonstrate a better user experience. Many consumers will resonate with that message.
New service providers will still pop-up that will capture revenue of the carriers’ customers, but the carrier can turn around and provide the same or better service. Consumers then have the choice where to purchase that service. Many will come back to the carrier. Everybody wins. The secondary effect is more consumers will want to purchase more services and consume more bandwidth. This spiraling effect will drive the broadband penetration to customers. By focusing on services, carriers grow stronger and broadband penetration will increase.
Incumbent carriers and MSO along with the rest of the industry should lobby Congress to rewrite telecom legislation that will free the industry of its regulatory and statutory shackles. A minimalist position is best. Just how confused Justice Clarance Thomas was on the Brand X opinion. State utility commissions should be eliminated because this is a global industry. With the slate clean to focus on quality content and innovative services, the telecom industry in this country will flourish and we will see our prominence in broadband rankings increase as well.
I just activated my mobile blog so I can send blog with text and pictures from my phone. I snapped this precious moment while driving in the car today. Our daughter Madisen is sound asleep in the car enjoying the warm sun. I will use this tool to capture pictures from industry events and post my comments to them.
I am going to deviate a bit from my blog topic today to mention how big government has let the oil companies reap excessive profits from the American public. They have taken advantage of this year’s hurricane season to gouge us at the pumps. Gas prices in Colorado are at least 10 cents higher per gallon than the national average and 30 cents higher than the mid-west. Oil companies, one after another, report record profits for their last quarter. Why is it when their supplies are supposedly cut and facilities damaged by hurricanes they are racking in humongous profits? Before you flame me for being anti-business or anti-capitalist, those of you that know me know that I am far from it. As our government intrudes further and further in our lives, they are neglecting one of their basic responsibilities: prevent cartels from controlling any part of industry. Like it or not, the oil industry operates as a global cartel. Why is Congress more obsessed with Scooter Libby and Supreme Court nominations and not protecting the American people? Because the Democrats are more intent on destroying Bush’s image than doing their jobs. On the other hand, the Republicans are not doing much better.
At least last week Senator, Chuck Grassley, from my home state, wrote a letter to oil companies reminding them of their responsibilities, and next Wednesday two senate committees will be holding hearings on the topic. Talks of a windfall profits tax reminiscent of the Nixon-era are floating around inside the Beltway. In a Republican dominated Congress, I doubt whether such a tax would ever pass. Personally I am against taxing a company just because they did exceedingly well. That’s taxation without representation in my opinion. What Congress should investigate whether the oil companies manipulated the supply of oil and gas to increase profits and colluded to keep prices artificially high. If the oil companies broke any of these laws then they should go after the oil companies and have them distribute the profits to consumers through a rebate. The punishment will have a chilling effect; thereby, lowering prices in the future.
These are short-term solutions to our energy problem. If we don’t address the long-term problem of finding new reserves, building new refineries, conservation, and alternate energy sources, we will find ourselves with high energy costs again in a year or two. Already oil and gas dependent industries are leaving the United States for places where they are much cheaper. Plastics manufacturers like Dow Chemical are shutting down plants in the U.S. for more economical ones in the Middle East and Asia. If Congress and the President does not take action now, then the recovery the U.S. telecommunications industry is enjoying will vanish shortly.
Tag: telecom, oil, profit
Friday, October 21, 2005
Tag: telecom, IMS, VoIP
What do I want to be when I grow up? A service provider (i.e. carrier) or content provider. That is an easy question to answer: a content provider. While Verizon, SBC, and other carriers go to court and argue in the press about keeping their networks closed, it is the people selling the content over these networks that are growing their revenue streams by leaps and bounds. The economics are simple enough for my 6th grader. The cost per bit is decreasing faster than the bit rate of the pipe into the home or business. That means that carrier revenues are decreasing for bit delivery. Sure there is money to be made in providing bigger and higher quality pipes, but there is even more money to be made selling or distributing content.
As a consumer, I spend more money purchasing content than I do for the pipe. My Comcast pipe costs me about $45 per month. Assume that $5 is for content that they directly provide like NHL games and some audio programs as well as their web hosting. Vonage gets the largest share per month at $27. Next comes iTunes at $10, then Real Networks at $6. I may make other various impulse purchases like albums or movies that add another $25 per month. When Netflix goes U.S. Postaless add another $16 per month. There is $89 for content versus $40 for the pipe. It’s a telling tale.
Owning the pipe gives the carrier the ability to deliver a consistent user experience to deliver content. It is a differentiator that can be used to attract and retain customers. As we figure out more ways to pipe bits into the house, the less important the pipe provider becomes. Is there a difference to the viewer between a movie on-demand or downloaded from Netflix to a DVR over the Internet? Maybe, because the DVR responds quicker to the remote control. Technological innovations will find ways around bottlenecks.
Smart carriers will focus on delivering content to their customers like movies, TV programming, audio programs, music, games, interactive voice (a.k.a. phone) and video, and many other services we have yet to develop. The real question will be whether the content provider will sell services direct or through distribution. Apple will wrestle with that question very soon. The record companies see the success of iTunes and want a bigger piece of the pie. Jobs wants to keep the prices low to drive the volume and sell more iPods. Traditionally the record companies rely on indirect channels like Sam Goody or Wal~Mart to sell their products. iTunes is just another channel from that point of view unless the record companies feel that they can set up their own Internet store fronts and sell direct; thereby, making more profit. It is the Cheap Revolution coming into play.
Should BMG or Sony attempt to go direct, why not the TV networks or movie studios? ABC affiliates are already up-in-arms over Disney/ABC providing content to Apple for the video iPod. If content providers go direct to consumers, then we will face the battle of the pipe. Carriers will begin to restrict what runs over their networks so they can attempt to sell as much content as possible and the cost of the pipe will increase. The last step is legal and regulatory battles like we are seeing with VoIP.
I prefer the distribution model. Content providers can focus on delivering the best content that they can produce. This is especially important to the music industry which is producing some of the lowest quality content. Distributors can focus on bundling and delivering the content to the user. By keeping each end of the supply chain focused on their core business, they can maximize their revenues and profits. The corollary is that consumers win as well because they will have a greater choice of content and ways to receive this content.
Tag: telecom, carrier
Thursday, October 20, 2005
Skype is more of a phenomenon and not a disruptive business concept. Skype’s developers realized that they could not turn it into a profitable business so the sold it to eBay. Vonage is using disruptive technology to enable Rich Karlgaard’s Cheap Revolution, but it is questionable whether it is a disruptive business. If they were to merge with a wireless company to overtake business voice service, then they will be disruptive.
What does all this have to do with the title of the article? Nothing. The previous two paragraphs are epilogs to my Vonage articles. I really intended to write about the challenge of having your blog recognized by the public. To date, I have had about 20 unique visitors and I don’t even know if they were interested in my topics. I put META tags in the blog to get search engines and Technorati to recognize me. I registered the URL with Google, and I have been commenting on articles in Light Reading, News.com, Jeff Pulver’s Blog, and other places. Hopefully I will start to show up in search engines. It would be nice to get some links on other sites as well. Maybe Jeff will be kind enough to include me with the other VoIP blogs he tracks. In the mean time, I’ll keep writing and trying to learn the tricks of being recognized by the cyberworld.
Tag: telecom, VoIP
Wednesday, October 19, 2005
Over the last year, Vonage has focused on building a good POTS replacement service. They pushed the E-911 issue making the FCC become involved. Most of the RBOC were dragging their feet with the exception of Qwest that was working with Vonage to offer fair E-911 access. Most remarkably they expanded their footprint into the U.K. and Canada as well as picking up over 1 million subscribers through an aggressive advertising campaign. There is no question that Vonage is the leader in residential VoIP service. Subscriber growth has boosted not only their top-line but also their bottom-line. They are clearly on the road to profitability which makes them poised for an IPO or acquisition.
Vonage has left feature innovation to other VoIP startups like SunRocket and VoicePulse much to the disappointment of this author. Their R&D budget is dedicated on E-911 service roll-out and market expansion. Forget features like subscriber name for called party, calling party name in voice-mail e-mail messages, ACR, and distinctive ringing. Features like IM integration with presence and PC active call management are out of the question. As a subscriber, I am disappointed that I probably will not see any significant new features this year. As someone in the industry, I completely resonate with their chosen business direction.
EBay’s $2.6 billion purchase of Skype has to have Citron and company salivating at the possibilities of a sale. A sale would be the best exit strategy because I do not see a pure-play VoIP provider surviving in the future unless they had a very creative and innovative expansion plan. The most logical purchasers of Vonage would be an ILEC or MSO. BellSouth makes sense as does Qwest with their struggling OneFlex service. Qwest makes more sense because they have a nation wide presence and network. BellSouth would have to rely on Sprint’s MPLS network for out-of-territory service; thereby, reducing profitability. A MSO like Comcast would have a ready-made VoIP service. Most customers are running Vonage over cable modems so the transition by the customer would be negligible. These are the most obvious suitors for Vonage. What we are missing are the dark horses that can really shake up how we perceive voice service.
For years, wireline carriers have been seeing their wired voice minutes decrease while wireless voice minutes increase. Verizon and SBC have recognized this trend and doubled-down with increased investments in their wireless properties. Sprint has also recognized that their growth is in their wireless business. In the last year, the U.S. wireless carriers’ strategy has been to offer more entertainment services to increase ARPU. There is no question that ring-tones have been a rousing success but watching TV on a postage stamp screen at 10 fps will not cut it. Why aren’t they looking more at the business customer to drive their revenue?
Sprint gets it. They purchased Nextel to get a better footing in businesses. Why not purchase Vonage? More businesses are relying on wireless services for their employees. How many times have you called a colleague’s office phone and not been shuffled off to voice-mail? Calling their cell phone results in reaching the contact more often. That is why the cell phone is quickly replacing the office phone. Mix that with Blackberry for mobile e-mail and you have most of your office on the run. Businesses with a mobile workforce are spending as much on mobile services than wired services. That is why today’s wireless carriers are perfectly poised to take over business voice services.
The distinction between wired and wireless is an artificial one in my view. IP Multimedia Subsystem (IMS) is the fabric that can sew together business voice, and even data, services. Today, businesses provide their mobile workers with a desk phone, mobile phone, and one or two computers. Some even give Blackberry’s and other PDA type devices. The capital and operational expenses are large when you factor in all of the back-office software and support required. With IMS, employees can be issued one mobile phone that rings in their office or on the road integrating with the corporate data network. Wireless carriers are poised to offer businesses a complete voice solution for all of their employees. One handset is all that is necessary. Mobile workers can be given a tri-mode phone supporting VoWi-Fi, CDMA/GSM, and AMPS. Stationary workers can be issued a VoIP desk set. Next add on value added services to increase carrier revenue.
Wireline carriers are seeing VoIP erode their traditional business by commoditizing voice service. They are getting into VoIP as a survival strategy. The wireless carriers should get into VoIP as an expansion strategy which makes Vonage a hot property. They can offer businesses seamless voice and data services which is something that most wireline carriers cannot. Sprint and Verizon are the most logical suitors in my opinion. They have wireline and wireless nationwide networks with business and residential subscribers. T-Mobile is also a contender since they are increasing their investment in the U.S and have a nationwide Wi-Fi network. They can offer a complete residential subscriber package through their retail outlets and expand into business voice service.
Where are the wireless carrier suitors? Purchasing Vonage would be a great way for T-Mobile to gain equal footing with Verizon. For Sprint it would be a way for them to realize value in their wireline network. Verizon and SBC could use it to continue their national domination, if only they could get out of their wireline mentality. Seidenberg should let Strigl take the reigns and run with them. The more that the wireless carriers focus on delivering a service instead of the pipe the more that they will grow. Viewed in this light, Vonage is worth much more than Skype.
For the next article, I will continue on with the theme that service delivery is more important than the pipe. As long as U.S. carriers continue to focus on the pipe, we will continue to languish in broadband penetration.
Tags: Vonage, VoIP
Friday, October 14, 2005
After some rough starts, it seems that their IPTV experiment is working. Their IP network has not come crashing down, but they are only providing one streaming channel. IP multicast helps off-load the burden of millions of users hitting the server simultaneously. Let’s take it to the next step and offer a few different channels. That will be the real test.
I have yet to hear how many people are watching the hockey games, but I can imagine that the number is in the several tens of thousands. Hopefully they will add the other content that they promised soon so we can see how the web can enhance TV viewing. Maybe the next step is adding their OnDemand programming to HSI subscribers. With a 6 Mbit/s pipe into the home, we can expect to see more IPTV from Comcast.
Tuesday, October 11, 2005
Comcast announced on October 4th the availability of live NHL games for their 7.7 million Internet service subscribers. For hockey starved fans this is a great way to watch games that they would normally not see or have to pay extra through the NHL game package. The press release states that 300 games will be shown throughout the season including the Stanley Cup Playoffs. Also, Comcast plans to provide archived games, clips, and a hockey community on the Comcast.net web site. All users need is Windows Media Player 9 or later and Internet Explorer 6.
At first blush this event seems like a nice extra benefit for Comcast Internet subscribers, but it is really Comcast’s trial attempt at IPTV. They are using the same technology that telcos, such as SBC, are using in their IPTV trials. The video streams will be encoded using Windows Media 9 with Digital Rights Management (DRM) and sent over their HFC network. The customer will use similar software on their PC as will be embedded in newer set-top boxes. The head-end will utilize media servers with the WMP CODECs. The only thing that will be different is that the NHL streams are being delivered over a DOCSIS connection.
Comcast has built a small test-bed to trial the delivery of broadcast TV over IP. NHL programming is available to a little over a third of their TV subscribership. They can test the scalability of IPTV without the risk of an expensive trial. Comcast can test the strength of DRM without exposing a large quantity of material. In addition to a technology trial, it is also a marketing trial to build an interactive community around the programming. If it works they can claim that they have successfully executed the largest IPTV trial to date. If it fails, they have some great ammunition against their RBOC competitors who are dependent on IP to deliver video programming. They have nothing to loose really.
How is it working so far? I wish I knew. I have not been able to access any of the programming since it started on October 5th. I have the latest version of everything necessary to play the streams. I have no problem playing other streaming Windows Media content from the Comcast or other web sites (Light Reading). I have only been able to reach Comcast’s contract technical support in Canada which cannot verify that the streams are even working or if they are over subscribed. Their national support team in Denver is equipped to verify if they can access the stream, but I have not been able to reach them during a game. I’ll try again tonight. At this point, I am under the impression that their servers cannot handle the subscriber load.
What about the other content? I thought that I could at least try to view an archived game to see how it worked. The archived content is no where to be found on the Comcast.net web site. A call to customer service yielded the response that more content will be posted by the end of the month. Forget about clips of the game highlights or previews and the fantasy hockey league. By the time they are posted, the season will be well under way.
A cynic would think that Comcast is trying to show that IPTV will not scale to support a large quantity of users. That would certainly be a shot across the bow to all of the telcos and associated equipment vendors. Think of the billions of dollars invested in bringing IPTV to market. Comcast does not need IPTV to be successful. They have a 1 GHz broadband plant with digitization underway that will buy them a tremendous quantity of channels. On the other hand, the telcos have no alternative but rely on IPTV. Their narrowband/wideband plant can only handle a couple channels at a time. Their triple-play depends on video to add a new revenue stream. MSO will add telephony services without a significant impact to the loading of their plant.
So what is really happing here? Chances are that it is just a poorly executed trial and by the end of the month all 7.7 million Comcast High-Speed Internet users can access live NHL games and all of the rest of the content advertised. Success with the NHL games will allow Comcast to demonstrate that IPTV works so they can deliver content to any household media device alleviating the need to network DVR and Media Center PCs. Once again it is all about who will own the customer.
One day later, I still cannot watch games, and technical support has been little help. I polled others in different Comcast markets and they indicate that they are having similar problems. Hmmmmmm, does it scale?
Saturday, October 01, 2005
I have been a customer and evangelist of Vonage for over two years. While living in the San Diego area, I had two POTS lines: one with AT&T and the other with SBC that was required for my DSL. I used the AT&T for residential calls and outgoing long distance. The SBC line was used for faxes and incoming business calls only. I was paying at least $75 per month for both lines just for POTS and a few CLASS features. In a fit of fiscal conservancy and to be on the bleeding-edge, I decided to see if Vonage could replace my primary line.
The sign-up was easy and a few days later my first ATA arrived. Excited, I quickly hooked it up to my cordless phone, and few minutes later, I was making calls. I loved it. I could control all of my features through a web interface plus see all call activity almost instantaneously. Not more than a day later, submitted the form to have my primary phone number transferred to my Vonage line. Three weeks later my AT&T residential service was terminated and we were using Vonage for everything. My POTS bill was a consistent $27 per month plus another $16 for the required SBC line. My next step was to connect the ATA to my home wiring so my family could use the service with any phone. Since there was no QoS on my DSL, I threw bandwidth at the problem. The DSL service was upgraded to the next tier for $5 per month to get 256 kbit/s upstream. The service worked fine except for the occasional echo, garbled speech, and constant clicking.
In January 2004, we moved to Boulder and ran the service over Comcast’s High-Speed Internet. We were able to keep the same San Diego phone number and get a new local number. The transition for our friends and family was minimal. What we noticed was a marked increase in the voice quality on Comcast’s network. I had plenty of upstream bandwidth and there was no 200:1 oversubscribed DSLAM to block my packets. I was elated. We moved from hotel, to condominium, to our home without any service interruption. A few months in our new home, I put a UPS on the cable modem, router, ATA, and office phone. Now we have at least 8 hours battery backup on our service. Due to the unreliable nature of Xcel Energy’s service, I have been able to test our backup power on several occasions.
Vonage has been a great replacement for traditional POTS. I have had almost no problems with the service since moving into our home, and the voice quality has steadily improved. I attribute this fact to Comcast’s Internet service and improvements at Vonage. They have introduced two new features in 2005: 7-digit dialing and Click2Call. Click2Call is a handy little program (developed by a Vonage customer) that runs on a PC enabling users to call from their contacts in Outlook or by cutting-and-pasting a number in a dialog box. It could use SIP to do it instead it sends a HTTP message to a Vonage server. Dialing 911 gets me to my PSAP without any ANI or location information. I should have complete E-911 capabilities sometime in November.
Now that VoIP is maturing, I would expect Vonage to start releasing more features to keep up with the 1,100 other competitors out there. I would also expect little bug fixes like calling name being sent to the called party and the calling party name in the subject header for e-mailed voice mail messages. Nothing. Everyday I am enticed by Microsoft and some partner’s announcement of presence integration with a VoIP service; IM integration with VoIP; VoIP peering with Skype and other providers; thoughts of voice over Wi-Fi; and new features like anonymous call rejection; distinctive ringing; PC call announcement/selectivity; and incoming ANI name replacement. Other VoIP providers are offering these features. Why not Vonage the market leader and innovator?
That question will be the topic of tomorrow’s blog and the point of this discussion. I didn’t intend to go on and on about my experience with Vonage, but I was on a roll. Next week I will get to the point and discuss their transition from offering a great new service to a POTS replacement and how it plays into their business strategy. Hopefully I can get it out before any more of my predictions, like being sold to BellSouth, are out in the press.
- Vonage Who?
- Decoupling Services from the Pipe: It’s the Content, Stupid!
- The Wireless Companies Could be Poised to Win the Business Market