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Viodi View Newsletter - March 16th, 2005

Local Content Workshop

VON to Fast Forward

By Ken Pyle, Viodi, LLC

The Fast Net Futures conference featured an interesting mix of operators, suppliers and analysts. Dave Burstein and Jennie Bourne, the producers, cajoled and pushed the speakers to give a BIG IDEA. He had some very impressive speakers that discussed most aspects of the network and many aspects of content for the network at his three day conference within a conference. I was honored to speak at his event. My big idea was, “youth are the present.” I will explain that concept in a later issue.

In the meantime, here are some of the big ideas I took away from the speakers:

• Diversify – William Lawver of SureWest made the correct argument that a telco can no longer rely on its traditional revenue streams. They need to expand both their services as well as their geographic areas if they are to have any chance of battling declining revenue brought about by access line reduction.
• Faster – Dr. Michel Guite of Vermont Telephone gave a persuasive argument that telcos need to innovate faster, if they are going to compete with cable. Cable is setting the standard and he is concerned that the telco industry is not keeping pace because of the, “instability in platforms.” Their limitations they have found with ADSL2+ is causing Vermont Tel to take a serious look at Fiber to the Home.
• Simplify – Steve Mckay of Entone, David Markowitz of Zhone Technologies and Gary Hoffman of Coaxsys emphasized the importance of reusing existing in-home coaxial cable to speed installation and reduce customer hassle. As evidence that telcos are starting to embrace this approach, Coaxsys just announced their 20th independent telco customer of their broadband over coax adapters.
• Local – Steve Scharf of Ringgold Telephone and Jennie Bourne underscored the importance of local programming as a differentiator. Scharf explained how they film local football games and have produced a cooking show with home-grown talent.
• Personal – David Howard of UTStarcom, Craig Bender of Tut Systems and Tom Hammer of Akimbo pointed out that people’s behaviors are changing and, thanks to the Personal Video Recorder, they are beginning to expect content at the time and on the device of their choosing. Teresa Sperry of Paradyne discussed how this sort of nicast-type approach could have huge impacts on the networks and the network components, such as DSLAMs [kudos to Teresa for an excellent job, as her slides were lost in the ether and the topic was different than what she expected].
• Bind – Phil Thompson of Mphase suggested that operators need to do things that bind customers to their system. He suggested the Wednesday night Bingo that DishTV has as an example. Yahoo! has done an excellent job of binding customers.
• CART – Pete Chow of TI gave an interesting analysis of the drivers of the market for high-speed services. He suggested it is Competition, Applications, Regulations and, finally,Technology that drives the business. There were some pretty impressive demonstrations of 100 Mb/s upstream/downstream data tranfers over 700 feet of 26 gauge copper by Meta-Link and Ikanos. There is a big debate, as always, as to whether QAM or DMT should win. Chow pointed out that a big carrier, such as SBC, will not deploy non-standard equipment. Therefore, it is very important to get the carriers fully engaged in the standards process.
• Compression – Aggressive compression will happen, but it will take time. David Price of Harmonic, Inc. pointed out that it took 8 years to get live action MPEG-2 encoding from 6 Mb/s to 2 Mb/s. Chuck Van Dusen of Tut Systems agreed and gave a real world example of how, “simple things like the grass and dimples on the golf ball need high definition and good compression.”
• Catharsis - Brian Hinman explained that the box 2Wire is producing will immediately get telcos to a competitive position with cable. The real change in the industry will be when there are a significant number of fiber pipes with high-speed upstream paths. He believes this will cause wide spread sharing of video files. Like the audio industry, he suggests a Steve Jobs will be need for the video distribution industry.
• Variety – Brad Kayton of Prismiq told of a number of new content services, such as RipeTV that have launched or will be launching soon. He made the pointed out that new content options will also mean new models, such as immersive advertising (advertising that is, say, wrapped around the actual content).
• BAS – Broadcast Anxiety Syndrome. Ok, this has not been diagnosed by physicians yet, but it is how Dr. John Pickens feels when his PVR does not work. The point is that Personal Video Recorders change people’s behavior. My take-away from this; every independent telco General Manager should acquire a PVR, to experience where television is going.
• Elimination – Balan Nair, CTO of Qwest, suggested that when you get to a big enough pipe, the middleman may be effectively eliminated. He called the future one big single play. He also suggested that ARPUs may not always increase with FTTH networks. Qwest has not been able to prove-in FTTH in rebuild situations.
• Change – Pip Coburn of UBS Securities looks at change and why it happens. He assumes that change is difficult for people and that most people need help finding their epiphanies. He suggested that when, “the perceived crisis is greater than pain of adoption, people might switch, especially if there is a 10x difference.” He pointed out that the government provides ubiquity of service. He cited Korea as an example of broadband ubiquity fostering a vibrant economy. The biggest shift will be caused by the maturing of the Digital Natives.

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