Will devices be the next victim in the net neutrality debate?

Remember that whole network neutrality fight in the U.S. from 2009 and 2010? Well back then the issue was over applications hogging precious bandwidth, and ISPs hoping to charge the likes of Google, Netflix and others for the increasing traffic running across wireline and wireless pipes. Korea Telecom in South Korea has taken an interesting twist on the idea, and decided to block Samsung’s Smart TVs from accessing the Internet, according to this article from the Maeil Business Newspaper, a large S. Korean daily. That’s right, net neutrality isn’t just for applications anymore.

According to the story, KT cut off Samsung’s Smart TVs Friday morning after a dispute over how much data those TVs consume. From the story:

The dispute has been festering for a while as KT insists smart TVs share the costs of quality maintenance of the internet as they tend to hog the networks, while TV makers argue they have no obligation to do so.

The argument is familiar. Remember this quote from Ed Whitacre when he was the CEO of AT&T?

“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?”

Or what about this quote from John Petter, managing director of BT Retail’s consumer business?

“We can’t give the content providers a completely free ride and continue to give customers the [service] they want at the price they expect.”

But this angle of attacking a device seems new and troublesome. It’s unclear if this is a problem in Korea because Samsung is based there and KT feels like it might have less success going after a content provider like Netflix or Google. However, if other ISPs follow suit, would Roku, Boxee or even Smart TV makers such as LG or Vizio be next in line for some form of blocking?

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected world: the consumer technology revolution
• Report: The Connected TV Marketplace
• TV Apps: Evolution from Novelty to Mainstream

alt=''
border='0'
/>

GigaOM

We’ve been talking about initiatives with the potential to change how we watch TV and now, one of them is finally ready to launch. We spent a lot of time going over Microsoft’s new dashboard for the Xbox 360 and what it could, but probably won’t, do to the market. Of course the folks in Redmond aren’t the only ones with something to show as we also cast an eye towards new iPad apps from Dijit and Cox, as well as the possibility we’ll see DirecTV’s HR34 Home Media Center DVR this week. Other topics include the cable companies getting out of wireless, Lovefilm switching from Flash to Silverlight, and Time Warner’s tablet app arriving on Android. As usual we close out with our picks of what to watch this week, so press play and see if you agree with our choices,

Get the podcast
[iTunes] Subscribe to the Podcast directly in iTunes (MP3).
[RSS - AAC] Enhanced feed, subscribe to this with iTunes.
[RSS - MP3] Add the Engadget HD Podcast feed to your RSS aggregator
[Zune] Subscribe to the Podcast directly in the Zune Marketplace
[MP3] Download the show (MP3).

Hosts: Ben Drawbaugh (@bjdraw), Richard Lawler (@rjcc)

Producer: Trent Wolbe

00:03:09 – Xbox 360 Dashboard update review (fall 2011)
00:03:50 – Xbox 360′s new video services won’t all launch right away; Comcast, Verizon, and HBO Go delayed
00:12:15 – Xbox Companion app for WP7 will launch alongside the new dashboard December 6th
00:39:00 – DirecTV’s new five tuner HR34 Home Media Center DVR ready to launch December 8th?
00:45:29 – Hands-on with Dijit’s universal remote app for iPad
00:51:07 – Cox TV Connect app brings more live cable TV streaming to iPads
00:55:00 – Time Warner Cable’s tablet app available for Android, live TV streaming still iPad only
00:53:56 – BBC brings global iPlayer iPad app to Canada, one step closer to the US
00:55:09 – Lovefilm’s movie streaming will switch from Flash to Silverlight on PCs in 2012
00:57:53 – Verizon scores new spectrum from Comcast, Time Warner and Bright House for .6 billion (update)
01:00:29 – Kogan advertises Samsung LCDs in its HDTVs, Samsung would rather not take credit
01:02:09 – Lenovo trudging into the smart TV arena, plans LeTV launch in Q1 2012 (update: aka IdeaTV)
01:04:39 – Must See HDTV (December 5th – 11th)

Hear the podcast

LISTEN (MP3)
LISTEN (AAC)

Engadget HD Podcast 277 – 12.06.2011 originally appeared on Engadget on Tue, 06 Dec 2011 10:00:00 EDT. Please see our terms for use of feeds.

Permalink   |   | Email this | Comments
Engadget

There are plenty of WiFi-connected remote control apps for tablets, dongles for IR control and even an IR blaster built into Vizio’s tablet, but here’s a Motorola slab purpose-built for the coffee table. The Verge has received several pics of the Motorola Corvair (and its packaging), a “dedicated controller for the connected” …something, which is apparently in testing with unnamed cable companies right now. It’s a 6-inch tablet running Android 2.3, that the box shows working as a remote control and apparently mirroring its display on the TV screen. Other notes indicate it’s optimized for low cost, packs a healthy 4,000mAh battery, and can communicate with other devices via IR or Zigbee’s RF4CE spec (where’s Android@Home?). That would line it up perfectly to tie in with home automation systems like the one Motorola and Verizon just launched, as well as potentially provide a sweet platform for content discovery. The only downside? Unless Moto goes against type, this will probably never see retail and we’ll have to wait on our cable company to figure out a way to charge extra for one and slap their own ugly software on it — here’s hoping that’s not the case.

Motorola Corvair 6-inch Android 2.3 tablet outed, destined for the home automation set? originally appeared on Engadget on Sat, 05 Nov 2011 16:57:00 EDT. Please see our terms for use of feeds.

Permalink   |  The Verge  | Email this | Comments
Engadget

When you apply the innovator’s dilemma to the broadband market, you might end up with a company like Sonic.net. A California ISP serving about 36,000 customers, Sonic.net has taken an outsider’s view to selling broadband, and may end up disrupting the industry more than Netflix and Google combined. Today Sonic.net’s brand of disruption is limited to California, but Dane Jasper, the company’s CEO, says that will change. Before the end of next year, he said, Sonic plans to expands outside California.

Already the 17-year-old ISP is building out networks outside its Bay Area home base, with plans to begin serving Los Angeles and Sacramento this year, says CEO Dane Jasper. He won’t disclose where he plans to build, but stresses that dense populations are important for his economic model. “Look to the top 20 MSAs in the country, and some of those we will be likely to build in first,” he said. “We need to look at the cost to cover a certain number of square miles and whether there’s 50,000 people or 5,000.”

Sonic doesn’t sweat its assets.

The rest of the country should get excited, because his company is a fairly unique broadband provider; it doesn’t cap speeds. It’s currently in the news for fighting a government request for subscriber information. And it’s much, much cheaper than most wireline broadband services provided by the large cable and telecommunications firms.

Sonic.net offers customers wireline voice and 20 Mbps broadband connections for , or two phone lines and 40 Mbps down for . Most cable companies charge about -80 for a single digital voice line and some form of 12-14 Mbps service. Of course, for a little more, the cable company will also throw in TV. Many will also seek incremental revenue in the form of additional features as they seek to raise the amount subscribers pay each month. Jasper explains that for incumbents who have invested in physical assets over time and need to grow revenue from an existing base of customers, they’re stuck trying to squeeze their customers for more money in order to get their growth.

“If you don’t engage in market segmentation, if you offer uncapped, unlimited and the fastest broadband at the entry-level price point, that is not economically efficient [for incumbents],” he said. “It’s not the way to ‘sweat your assets,’ which is what the dominant incumbents with limited customers need to do.”

For Sonic.net, growth comes in the form of new subscribers, who are attracted by the lower price points. Because he doesn’t have this expensive triple play revenue to protect and grow, he can afford to charge such low prices. It’s not the capital expenditures of building out a network, but the operational ones that force the incumbents into protecting their video business using caps or offering metered service, he says.

“Our products are profitable at their current price point, and fundamentally if you adopt a simple product design, you have a lower cost of customer acquisition and operations,” Jasper says. “The cost structures around a simplified product are substantially lower and we are willing to accept lower margins. But [Sonic.net's products] are wildly profitable either way.”

Preparing for broadband’s Sonic boom.

Jasper’s business started out reselling service from the existing telephone companies after the Telecommunications Act of 1996. However, unlike a lot of the other companies that got into that business and were thwarted by uneven enforcement of the law, Sonic.net managed to build a base of customers. And since it doesn’t have a TV business to protect, its policies are a lot more consumer-friendly than those of Time Warner Cable, Comcast and AT&T.

However, caps do make sense for businesses that can look ahead and see the future of TV and music is streaming content over the web. “ISPs are using caps and congestion as an obstacle on the track miles down the road to derail the over-the-top video train,” he says. “But if you’re a triple-play operator, that’s the right thing to do.”

Much like Google and its fiber to the home effort, Jasper is looking for those next generation applications such as TV and trying to build out an infrastructure that requires customers to buy higher speeds and can support his profit margins. And despite all the FUD from ISPs, he’s not concerned about the cost of access and is fine building out infrastructure to match his customers’ demand. It’s not breaking his bank. “The cost of transport is moving to zero,” he says.

Jasper’s company doesn’t offer TV yet, although it has applied for a video franchise from the California Public Utilities Commission. It has also started overlaying fiber to the home on top of its existing ADSL2 network to offer 100 Mbps speeds and gigabit speeds for the exact same price it’s offering the ADSL service. It will upgrade homes with fiber after take rates in its markets get above 30 percent, and it’s beginning in San Sebastopol, Calif. It’s possible that some areas won’t make it, but that’s not stopping him from continuing to expand his ADSL2 network to more cities in California and to those beyond.

He wouldn’t give out his revenue or profit details but he did assure me that he does make money selling broadband, which he puts back into the business to pay for expansion and network upgrades. So today, he says that the company’s network reaches 60 percent of the homes in the Greater Bay Area with construction occurring in Sacramento and in Los Angeles. After that he’s taking on other parts of the country. Broadband lovers should stay tuned.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Big Data, ARM and Legal Troubles Transformed Infrastructure in Q4
• Smart Energy Emerges as a Layer of Telco’s Smart Home
• In Q3, E-books and White Spaces Ruled

alt=''
border='0'
/>

GigaOM

Much of the discussion about Internet Service Providers centers around the nation’s largest players in the telecommunications and cable fields, but there are a number of smaller ISPs and it’s worthwhile to talk to them to discover how competition is faring in the U.S. and what might happen if more flourished. Royster Tucker, the COO of North State Communications, an ISP serving a 600-mile area in North Carolina highlighted the importance of fiber to the home, but also indicated that metered billing isn’t just for the big guys.

Fiber is the future, and North State is on board.

North State, which includes Greensboro in its service area, began deploying fiber to the home in 2009 because it was losing out to the cable companies with its DSL-only option. Tucker declined to tell me how many customers it currently has, but he says that it’s now the No. 1 provider of broadband in a region that includes Time Warner Cable and AT&T as well as smaller cable companies. “We said we want to be the broadband market leader and the way to do that late 2009 was with fiber to the home,” Tucker said.

Now North State offers an 80 Mbps down/30 Mbps up for consumers at a 12-month introductory price of a month, which is about what I pay for 12-13 Mbps down/ 2Mbps up cable broadband from Time Warner here in Austin. However, the most popular package North State sells is a 30/30 Mbps symmetrical package, although he did not disclose penetration or take rates. Tucker also noted that the company is still supporting its 10 Mbps DSL business in its service area, but he doesn’t plan on making more investments in the technology. “Back in 2003 and 2004 and 2006 we were out there shortening loop lengths, building out fiber to the node and all that, but now we’re going to stick with maintenance,” Tucker said.

To cap or not to cap? That is the question.

North State doesn’t currently have a broadband cap as Tucker believes the fiber network can withstand the speeds that today’s traffic requires. However, Tucker says, “We believe ultimately that is the direction the broadband market will go.” When pressed on the subject, Tucker says, “As over-the-top video becomes more and more prevalent and there’s more HD and bigger broadband requirements, the broadband market will move to some kind of cap or metered service.”

However he couldn’t explain precisely why this would need to happen. “The networks are expensive. We are providing bandwidth for all these wonderful things that are showing up on the Internet and that is costly,” he said. “This market is highly competitive and we have to get some money from somewhere to pay for these networks. All of it is not falling on the user.” But when asked if his financial models could support the delivery of more traffic he said that, “in a multi-product scenario, yes it does. We look at the whole household and the revenue we’re getting out of the households.”

When I asked if that meant North State could only recover costs and make money off a user that subscribed to multiple services, Tucker appeared to backtrack. A user that subscribed to broadband alone would suffice, he said. He then implied that part of the issue around capping was because some people use so much more than others. “All the rich content that’s showing up on the Internet is driving tremendous demand on our network, and we want our customers to have access to that.” He continued, “There are those that are more bandwidth-heavy users, and we need to strike a median on who’s paying for what, and that’s where we see that capping may come in.”

However, Tucker was very clear that North State wasn’t capping service now — and that it may never cap or meter service. However, one could hear the amazement in his voice when we discussed what people were doing over the network.

“I don’t think anyone could see what we would drag across these pipes, and people thought the unlimited model would be fine,” Tucker said. “But this is evolving and it’s something that we’re all having to deal with. We’re a broadband company and we want people to do what they want to do, and we want to deliver value to our shareholders.”

As people consume more bandwidth, it may well be smaller ISPs such as North State that are answering to private shareholders in highly competitive markets, that show us exactly what networks are capable of, both in terms of technology and in delivering profits.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How Online Video Is Shaping the Next Round of Retrans Fights
• In Q4, Data Was Mobile’s Hot Spot
• The Ultimate Guide To TV Everywhere

alt=''
border='0'
/>

GigaOM

DSL is on the ropes, and cable companies are seeing their broadband numbers rise, according to data on broadband sign ups during the second quarter. Leichtman Research Group found that the top 18 providers in the U.S. acquired about 350,000 net additional high-speed Internet subscribers in the April-June period. Net broadband additions in the quarter were the second fewest of any quarter in the ten years LRG has been tracking the industry.

That’s pretty significant. It means that new subscribers are hard to come by, so gains for providers will come from the competition — and so far cable and fiber products are the winners there. For every consumer that added service from a telecoms provider, cable providers added three. The top cable broadband providers have a 56 percent share of the overall market, with 8.9 million more subscribers than the top telephone companies – compared to 7.85 million this time a year ago.

But all is not lost for telecom companies — at least those that are upgrading to fiber. AT&T and Verizon added 628,000 fiber subscribers in the quarter (via U-verse and FiOS), while losing 578,000 net DSL subscribers. No wonder Time Warner Cable’s CEO thinks broadband is his company’s future and AT&T’s CEO says DSL is obsolete.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The Ultimate Guide To TV Everywhere
• Report: The Ongoing Battle for the Digital Home
• Big Data, ARM and Legal Troubles Transformed Infrastructure in Q4

alt=''
border='0'
/>

GigaOM — Tech News, Analysis and Trends