Viodi View - April 19th, 2006 Issue

In this on-line publication, we share our analysis, opinions and direction on the interactive television news and views that we believe will be of interest and use to our friends associated directly or indirectly with independent telephone companies. For more information as to the various ways Viodi works with independent telephone companies, please go to http://www.viodi.com/alliance/

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The Viodi View [Viodi, LLC] and its associates used their best efforts in collecting and preparing the information published herein. However, the Viodi View [Viodi, LLC] does not assume, and hereby disclaims, any and all liability for any loss or damage caused by errors or omissions, whether such errors or omissions resulted from negligence, accident, or other causes.

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Viodi View Newsletter - April 19th, 2006

Click here to learn more about the C-COR Global IP Summit

By Ken Pyle, ken.pyle@viodi.com, Managing Editor, Viodi View

Local Workshop to Make Brief Stop in MN
Will Broadband Make Us Healthier?
49 Square Miles of Wireless & More
Are We Losing the Broadband Race – Are We?
But Broadband and Other Technology Will Also Improve Our Life
A Content Cornucopia of Abundance and Uniqueness
Create Your Own, Get Lost or Both
AT&T, Eisner – Going Over the Top?
Some Recommended Upcoming Conferences
Krazy Ken's Korner - This One Is for the Annals (uri, that is)

Windshield time is a term often heard in rural America to describe the long distances between places. This past week in Atlanta, I learned a lot about windshield time, but unfortunately, I was stuck in traffic that rivals Los Angeles. In fact, it might even be worse, as it is often difficult to get the big picture in Atlanta as the thick cover of trees block the horizon. Fortunately, I was able to break away from the city and visit two very progressive independent telephone companies.

As I was navigating the back roads of the Georgia Mountains to my destinations, I had a chance to drive through small communities on two-lane country roads as well as those with an interstate or four lane access. Clearly, those on the interstate system have more robust economies with more diversity of opportunity for their citizenry than do those that don’t have that high speed vehicle connection. It’s been said before by pundits much smarter than I, but broadband is truly tomorrow’s 21st century interstate highway system.

Local Content Workshop to Make Brief Stop in MN

The plan right now is to meet up for an abbreviated version of Viodi’s Local Content Workshop. It will be held on May 4th in the Minneapolis/St. Paul area from 10 AM to 2 PM. This will be a great opportunity to learn from other telcos, as well as exchange ideas regarding this great way to provide a differentiated product that improves the community. To register, click here.

Our current state of broadband is probably in a similar position to where the interstate system was in the 1950s. Back then, people probably understood that there would be unintended economic benefits, but few probably realized how this packet-based (vehicles are analogous to packets, as opposed to trains, which are more TDM-like) infrastructure would facilitate commerce and transform an entire economy. The benefits to a broadband network go well beyond the economic and include a stronger national defense (just like the interstate highway system) and improved health care.

Will Broadband Make Us Healthier?

In early April, an economist, Robert E. Litan, suggested to Congress that an expedited rollout of broadband could produce savings in health care costs could amount to $1.4 to $1.8 trillion over a 25 year period or, by my simple math, an average of $60 Billion per year. Assuming an average cost of $1,250 per residence to build a fiber to the home (even less for a WiMAX network) and a total base of approximately 110 million homes, a next generation network could be built for around $140 Billion. Granted this is a real simple, back of the napkin analysis, but if Litan is anywhere close, healthcare savings alone could pay for our broadband infrastructure.

Litan is vice president for research and policy at the Kauffman Foundation and also is a senior fellow in the economic studies program at the Brookings Institution. He recently authored a report, titled “Great Expectations: Potential Economic Benefits to the Nation from Accelerated Broadband Deployment to Older Americans and Americans with Disabilities.” The report states, “Three types of benefits from broadband deployment and use are addressed: lower medical costs; lower costs of institutionalized living; and additional output generated by more seniors and individuals with disabilities in the labor force.”

Ken’s Kommentary

Based on the little I have read of the report, I infer that it is concerned about the intentional or unintentional creation of a “digital divide”. As a society, we cannot tolerate the creation of a digital divide. In order to ensure every U.S. citizen has, in the words of Milton Friedman, equality of opportunity, we must not leave behind any of our rural communities, our urban inner cities or those less fortunate in mind or in body as we transition into this brave new, virtual world. The challenge will be to allocate resources in such a way that inspires innovation, while ensuring widespread rollout of broadband and associated services to all citizens.

Unrelated to the report, but giving it some credence, is an article in yesterday’s Wall Street Journal regarding the use of “telemonitoring” to lower health care costs and improve people’s quality of life. Harry Wang of Parks Associates was referenced in the article when he suggested that the market for home monitoring devices and services is anticipated to grow from $461 Million to $2.5 Billion by 2010. The examples cited in this article show some of the positive, unintended benefits of having a robust broadband network coupled with new applications made possible by new devices and technology.

More Evidence of the Importance of Broadband Can Be Found Right Here

Along the lines of the value of broadband to other applications, such as health and education, videos of the speakers from FirstMile.US’ Spring 2006 conference are now available online. These videos look interesting as they touch upon the topics mentioned in this issue of the Viodi View. Click here to view these videos.

49 Square Miles of Wireless & More

Alan Weissberger provides exclusive coverage of Google’s plans to blanket Mountain View, CA and San Francisco with wireless in the second part of his coverage of a March 21st Wireless Communication Association meeting. Click here to read his insight on this potentially disruptive communications channel.

Are We Losing the Broadband Race – Are We?

As has been widely reported, the FCC’s report on broadband penetration came out recently and, when compared to world leaders, Iceland and South Korea, U.S. is behind in broadband availability and penetration. But, compared to the EU, our 84% (page 25) availability of rural broadband in the compares favorably to the EU’s (plus Norway and Iceland) rural broadband availability of 62% (page 5 of a recent EU report). It is not clear that these two reports even define broadband or rural areas the same, so this may not be a fair comparison. In their report, the EU expresses their concern about closing their digital gap. Maybe what would help Europe is the independent telco infrastructure. North of 90% of OPASTCO member customers can receive broadband, while 96% of NTCA members offer broadband to their customers.

South Korea is the leader in adopting and adapting to new technologies. The technologies themselves become a catalyst for even faster adoption of even newer technologies. It was reported a few weeks ago that the widespread deployment of fast broadband was cited as an enabler that will help spread the mass rollout of robots and associated sensors throughout their society. I hope this doesn’t lead to the scenario I saw a few weeks ago in an old Tom and Jerry cartoon from the 60s. In this particular episode, Tom and Jerry played their cat and mouse games using robots as their proxies.

But Broadband and Other Technology Will Also Improve Our Life

“Why aren’t we giving every school kid a lap-top”, asked Phil Erli, Executive Vice President of Ringgold Telephone? “Instead of text books, they should be able to access the knowledge they need from a lap-top.” As he pointed out, there are too many vested interests in the text publishing industry that would potentially be eliminated in a scenario where the knowledge seekers could communicate directly to those with the knowledge. It is pioneers, like Phil Erli and John Harrison, President of Ellijay Telephone, that have the vision and realize that it is up to them to lead their communities into the future.

The desire to give back to the community is typical of an independent telco and is exemplified by Ellijay Telephone and Ringgold Telephone. Thus, I was very honored to present Content Pavilion Awards to these two companies when I was out there last week. At Ellijay, I had the chance to deliver the award as part of their nightly news broadcast. At Ringgold, I had the opportunity to speak to an assembled group of civic and business leaders at the world premier of the first episode of Ringgold Telephone’s multi-part video history of their region.

Ken Pyle & Huitt Rabel of ETC3

Both Ellijay and Ringgold were extremely generous in their time and sharing of their knowledge regarding local content production techniques. Although they are on the cutting-edge of community-based production, they are just touching the tip of the local content iceberg and I am excited to track their progress as this local content revolution unfolds in the independent telco world. More about what they are doing in the next issue of the Viodi View.

A Content Cornucopia of Abundance and Uniqueness

Content is available for telco’s to differentiate and offer a unique channel via broadband (coax, IPTV, and Internet) or print. It seemed to seek us out at Viodi's Content Pavilion in Vegas. Here’s a great example of how content found its way to Viodi and became available for telcos through a simple encounter. Michael Simon sat next to Roger Bindl in flight to Vegas. They chatted about video in telecom, learned about each others activities and landed with a plan. The result is a serialized version of Simon’s comic strip “Popcorn” that is now available for telcos to license for their web, print or other media properties. Click here to see the first chapter of this content that is reminiscent of traditional comic strips like "Peanuts".

Click to see the full strip

Create Your Own, Get Lost or Both

The concept of “over the top” content was the buzz at the National Cable Telecommunications Association (NCTA) annual conference. There was hardly a presentation that didn’t make some reference to the consumer created content web site, You-Tube. Another over the top topic was Disney’s announcement that they are providing several of their ABC distributed shows, such as Lost, on the Internet at no cost to the viewer.

Despite this bypass of the traditional distribution channel, cable company speakers appeared confident, but not arrogant, in their ability to compete against existing competitors, as well as over the top upstarts. ESPN and Disney also announced that they are going to be creating promotional spots to help promote high definition. Click here to read the impact these and other developments could have on telcos.

AT&T, Eisner – Going Over the Top?

It is official that AT&T will be integrating the Akimbo service as part of its Homezone platform. Using the 2 Wire set-top box, this platform is probably closer to widespread rollout out than AT&T's IPTV approach that gets all of the press. If AT&T is serious about the Homezone platform, it could be a way for them to immediately get around franchising issues and provide a video offering to virtually their entire base and beyond.

In other “over the top” news, Dmitry Shapiro and Veoh are to be congratulated for the investment by and the addition of Michael Eisner to their board of directors. This is another validation of the concept “over the top”, as well as managed peer to peer networks as a way to distribute content.

Some Recommended Upcoming Conferences

Returning to the Radisson in Sacramento, CA, California Communications Association will be holding their Tech Expo next Wednesday, April 26th. This is a great show for learning about the independent telco market, as well as seeing a diverse line-up of suppliers.

The following week, Parks Associates Connections conference will be held in San Jose. As usual, they have top notch speakers. Just added is a company called iControl. iControl has some products and services that could be interesting to independent telcos looking to expand into home monitoring services.

Krazy Ken’s Korner - This One Is for the Annals (uri, that is)

One thing that makes cable shows fun is the creative and unique give-aways and promotions provided by the exhibitors. Over the years, I have been given Ted Turner’s book (Lead, Follow or Get out the Way), free beer at Disneyland and a pillow from some programmer I no longer remember. I think I discovered the most unusual promotion yet at this latest cable show. In fact, I hesitate to even mention what I found, as I am afraid to plunge the Viodi View to a new low.

So, at the risk of too much sharing, please watch and listen carefully to the following video. This story forms the third part to a trilogy that includes cutting journalism on the web site, toiletology.com, as well as a top- secret optical technology that would be the broadband plumbing for an entirely new network. The video will show what I found so shocking in this otherwise normal Atlanta public restroom.