Telecom Giants Terrified of Being Dumb Plumbers

from the jack-of-all-trades dept

Tue, Dec 5th 2006 10:19pm — Karl Bode

Not satisfied with the revenue from their core business, the majority of broadband providers these days are eager to do everything but actually provide bandwidth. Cable providers want to be phone companies, phone companies want to be TV companies, and almost all of them are expanding into the content creation business. Investors are nervous about the stretch, and there's been plenty of people in the industry who have complained that things like portals are a waste of revenue that could be spent elsewhere. Nokia's CEO claims there's a brewing existential crisis in the industry, with some people at carriers starting to think that instead of trying to be YouTube, they should leave content to the more svelte innovators and focus on actually running a network. It sounds like those voices still aren't very loud, however, as the reality is that most incumbent cable and phone providers are doing the exact opposite. Because the biggest fear among many ISP execs is becoming a "dumb pipe" provider and missing out on the kind of revenues they're seeing at Google, don't expect an industry sea change anytime soon. Incumbent broadband providers will likely continue trying to be jacks of all trades, potentially doing none of them particularly well -- at the expense of their core connectivity offering.

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17 Comments

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PhysicsGuy, 5 Dec 2006 @ 10:29pm

bleh...
they also need to stop giving you all that "required software" that seems to be nothing more than trojans. seriously, none of it is needed for a connection... they can already spy on my traffic if they wanted to, they can stay the hell off of my hard drive...
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Chris, 5 Dec 2006 @ 10:35pm

My 2c.
It certianly would appear that most broadband companies out there keep tring to push their business as the front runner in bringing content into the home. What I would like to see is a broadband company start investing in running fiber lines, like they were supposed to do in the early '90s. Some of you might remember the whole "45mb to the home with HD tv programming for everyone." Instead we're still stuck using the old analog copper lines that were run 30 years ago.

To me it seems like they're more interested in over charging for a semi-reliable service, that usualy ends up frustrating their customers. Eventually they're forced to pay out of their contracts, thus creating even more profit than if they let it expire. They should be focusing on delivering what they can, not tyring to add new content to distract from the real problems. Whats the use of being able to watch TV or get sports highlights on your phone if you can never sustain a connection. Whats the purpose of paying $100+ dollars a month for HD programming when it's only in 1080i, not 1080p. If they truly provided quality content, then people might be willing to shell out that extra coin for a service worth investing in.
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claire rand, 6 Dec 2006 @ 1:02am

Re: bleh...
i found the only way to get my fomer bt openworld connection to work was to *remove* the 'special software' and just let XP take care of things.

the last thing i need was a custom browser trying to look like AOL, complete with adverts..

um.. no.

sometimes it may be needed to actually signup but after that i'll use just about anything else, firefox works better, thunderbird works a hell of a lot better...
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Bumbling old fool, 6 Dec 2006 @ 5:54am

FiOS sounds great to me...
But by Verizon's strategy.. I'm supposed to want to puchase phone/video over their fiber lines.

I don't give a crap about phone or video. All I want is a broadband provider who actually realizes that broadband is what people want.

All the verizon ads I have seen so far have been targeting the absolute wrong audience. They are all about convincing customers that their local cable provider has been mistreating them. What? Verizon has NEVER shown itself to have a higher moral standard than my local cable provider.

I have yet to see a single ad (in my local area) from verizon touting the broadband connection speed of their FiOS, but yet every self respecting broadband consumer I know is eagerly awaiting availability. Most have no plans to change phone or video providers. I am eagerly awaiting FiOS launch as well. I will be taking the opportunity to cancel my phone landline, reducing my video to basic service, and moving to the faster broadband connection that fiber delivers.

Every stat I ahve seen on FiOS's rollout shows that consumers just dont want anything but the broadband, but verizon continues, like an idiot, to advertise the weakest services they have to offer.

And for the record, the local cable ISP can offer the same speeds as FiOS, but they won't. They seem to think they shoudl be trying to get me to buy phone service.... They shall lose at least one consumer due to that.

In all seriousness, in an age where the residential phone line is quickly becoming irrelevant, why would you design your entire companies strategy around it?

That just seems... stupid.
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Bumbling old fool, 6 Dec 2006 @ 6:22am

Re: My 2c.
Interlacing was from the beginning a bad solution to a minor problem. Ever since its introduction, it has made everything more complex than it had to be.

No HDTV actually "needed" to include interlacing, and it was ridiculous to include any interlacing at all in the specs.

All interlacing ever did for the world was make editing video more expensive. WHY did anyone think that 1080i was a good idea? Someone please shoot them.
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Derek Reed, 6 Dec 2006 @ 6:33am

RE: FiOS
"In all seriousness, in an age where the residential phone line is quickly becoming irrelevant, why would you design your entire companies strategy around it?"

Because they telecom incumbants are the ones stuck with the expensive copper and they need to maximize the revenue on it in order to not go bankrupt. i.e. Even if they go all out on naked dsl or something like that, their average revenue per line goes down and they can no longer pay for the maintenance on that copper. Before you tell the telcos to give up on the old way, someone needs to tell and convince them of a new way that generates *enough* revenue to pay for their costs. Flat out naked dsl no frills no paid for content no tv will not pay their bills. They are trying, they are exploring other ways to generate that needed revenue (tv/content).
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Dosquatch, 6 Dec 2006 @ 6:50am

Re: FiOS sounds great to me...
Every stat I ahve seen on FiOS's rollout shows that consumers just dont want anything but the broadband, but verizon continues, like an idiot, to advertise the weakest services they have to offer.

Yeah, yeah, sure, sure, I hear what you're saying, but the simple fact of the matter is I'll buy every snarking service available from the first company to actually pull some sort of broadband into my neighborhood.

Hello? Is anybody listening? ANY form of wired broadband - FiOS, DSL, BoP, BoG, WTF-ever. I'm not even asking for competitive broadband - just one lonely old provider would do. Anybody at all.

Pretty please.
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getreal, 6 Dec 2006 @ 6:57am

"Because the biggest fear among many ISP execs is becoming a "dumb pipe" provider and missing out on the kind of revenues they're seeing at Google, don't expect an industry sea change anytime soon."

OK, lets take a look at Verizon Revenues vs. Google. Lets take a look at AT&T Revenues vs. Google. Lets take a look at Time Warner vs. Google.

True, voice is trending to zero, but Verizon's petty cash funds probably are bigger than Google's revenue.

The pipe owners biggest fear is investing billions of dollars in their network only to have the govt. tell them that they have to let competitors offer competing services over their network.
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Bumbling old fool, 6 Dec 2006 @ 7:20am

Re: RE: FiOS
FiOS is fiber optics to the door.

As in: a replacement for the copper.
As in: a replacement for dsl
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Aaron, 6 Dec 2006 @ 7:47am

In my area AT&T doesn't try to directly compete with the cable companies - they sign contracts with people who do, I get my phone through AT&T, TV through Dish Network, and cell through Cingular cell through Cingular. Cingular and Dish get more business, AT&T gets a small cut of it for little extra effort, AT&T gives me a discount from their cut, I get 3 great services from 3 companies who know what they are doing in their respected areas all on one bill.

People in neighboring towns don't get the same option, not sure why, I love it and it seems to be a win-win-win scenario.
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Verizonian, 6 Dec 2006 @ 8:48am

Dumb and dumber
What a waste: I already have Verizon FiOS, Verizon unlimited phone plan (more or less had to get it to get FiOS), already have DirecTV - yet at least once or twice every week I get a mailing from Verizon (sometimes phone spam too) trying to get me to purchase: FiOS, unlimited, and DirecTV. A little targeting for those marketing dollars, Verizon? Makes me feel like you're wasting all those many dollars I'm sending you each month. Have no sympathy for your customer acquisition costs if you're so careless with your marketing dollars.
Verizon is terrible at software and marketing yet that's where they're trying to go, all the while bumbling through their marketing of FiOS. The FiOS web site is all pretty and quite useless, you have to go to places like broadbandreports.com to get any useful info. They buy full page ads all over the local papers pushing FiOS speeds when for most (not me) cable modem speed is good enough - but FiOS is much more reliable; why not market that advantage? Wish they'd just stick to providing boring old bandwidth.
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Unknowledgeable Geek, 6 Dec 2006 @ 8:50am

Re: FiOS sounds great to me...
FIOS .... have it.... dropped it.... Cable is still better. So, IMHO, Verizon can keep on trying to sell this FiOS, but it is slower and less reliable than my Comcast. Enough said...
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David, 6 Dec 2006 @ 9:11am

Isn't this why they should have a different division, hell-bent on competing in the full marketplace, rather than trying to leverage their existing customers into a sub-standard offering? Sure, it's more risky, but the payoff could be huge. Just give an additional benefit to Verizon customers, like higher quality videos than the pleb's get, or something like that. I should apply to be on their corporate strategy team...
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Anonymous Coward, 6 Dec 2006 @ 10:14am

Re: Re: My 2c.
I've threatened to shoot that same man before, whoever he is. The problem is that television engineers are not computer engineers. I dont blame the television engineer.. they live in a different world. What do they care if we have to deinterlace stuff later? Theyre just as happy displaying interlaced signals and even if the TV has to deinterlace that happens on an IC made by the digital guys.

I blame the computer engineer that relented and agreed to provide an interlaced signal. He is a coward. Stand up for what you believe in--and EVERY digital or computer engineer knows that interlaced signals are an abomination.

Or let me offer an alternative. In a given amount of bandwidth... 1080 is a bigger number than 720. Consumers understand the 1080 and 720 in 1080i and 720p but not the i and p. I cant really blame them. They dont even know to tell their dvd player what kind of tv they have so it handles the anamorphic stuff correctly.

So perhaps it is the marketing majors faults
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Anonymous Coward, 6 Dec 2006 @ 10:17am

Re: RE: FiOS
If naked dsl can't pay the bills, then old copper is an incredibly bad and inefficient way to deliver broadband. Who says that this technology is worth keeping around? Maybe it isn't.
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asdfasd, 6 Dec 2006 @ 10:31am

awf
Wow
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|333173|3|_||3, 6 Dec 2006 @ 7:44pm

Not all like that
two of the ISPs in my area have the sense to offer, as thier main business, bandwidth. While they offer the usual Email and web hosting (jsut server space for most options, you have to upload oyur own data and maintain it), thier commercial web hosting and online shopping cart offerings are really just an add-on for thier hosting service, which is itself only minor, and they have the sense to show it. THier main competition point for residential connections is that thay offer faster and cheaper connections thatn the other companies.
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