Posts Tagged Yankee Group
Home Is Where the Fiber Is
Really interesting article from Tim Lee of Ars Technica about customer owned residential fiber. Yes you read that right — a pilot program in Ottawa ran fiber to 400 homes, and the residents own the last mile. Sure gives Fiber to the Home (FTTH) a whole new meaning:
http://arstechnica.com/articles/culture/customer-owned-fiber.ars
While this could insert a fascinating wild card into the broadband access/net neutrality debate here in the States, Lee is realistic about the challenges and the time frame:
It’s a tantalizing prospect, but a lot of practical difficulties will have to be overcome to make it a reality. Incumbent telecom firms may not like the prospect of increased competition, and they’ve never been shy about using regulatory barriers to strangle potential competitors in red tape. Meanwhile, promoters of the concept face a kind of chicken-and-egg problem: a customer-owned fiber strand is only useful if there is robust competition among ISPs at the other end, but companies aren’t going to enter the residential ISP market until there’s a critical mass of customer-owned fiber.
Most importantly, it’s not yet clear how the economics will work. The Ottawa trial suggests that a fiber connection can cost less than $3000 per household, but the exact cost depends heavily on site geography and the rate of customer uptake. It will take several years for the concept to prove itself. And, if it does, it will take a number of additional years for it to be widely adopted.
Right now there is a battle going for these kinds of affluent residential customers, but only in specific zip codes. Back in March I wrote about an interesting Yankee Group report that highlighted telcos and cable companies battling fiercely to offer triple play services in the most lucrative urban neighborhoods. If an appreciable number of such homes started owning their own fiber connections, and if that fiber reached to a peering point serviced by multiple ISPs, choice could be greatly increased and the cost of service greatly decreased.
http://cparente.wordpress.com/2008/03/06/iptv-turning-gorillas-into-guerrillas/
Two huge ifs of course, and nothing will happen soon. And choice for those who can afford the estimated $3,000 cost doesn’t do anything for those who don’t have broadband access for economic reasons. But consumer ownership of the last mile at some point could be part of a more comprehensive policy discussion that acknowledges both the essential nature of broadband access and the cost involved in providing it.
Add comment July 31, 2008
IPTV — Turning Gorillas Into Guerrillas
Tom Burton at FierceMarkets brought an interesting new study to my attention via his FierceIPTV e-newsletter Tuesday. Tom’s an experienced tech journalist who recently relocated to the States from Australia, and I’ve gotten to know him over the past few months. He writes good commentary that goes easy on the jargon and gets into the business issues driving the market.
In this one he’s crediting the Yankee Group report for challenging the conventional wisdom that the incumbent position of cable MSOs makes IPTV primarily defensive and/or niche play for carriers. Telcos will use IPTV to go after the best customers in the most lucrative urban markets, turning a formerly mass market into a battle of hypercompetitive micro-markets. Many counties, towns and neighborhoods will be unaffected, while others will see intense competition. In the process, both telcos and MSOs will need to change from very centralized, 800 pound gorillas to nimble, insurgent guerrillas to win the battle. (Credit for clever title goes to Yankee Group)
All that said, Tom takes Yankee to task for missing how this still could end up being a mass market after all a bit down the road:
A curious absence from the Yankee report is the lack of discussion of the impact of over-the-top or online video. IPTV may cause material change in the distribution rules, but Internet TV–streamed and downloads direct to the TV–is expected to take off. One prediction is that 160 million homes world wide will connect their TVs to the web in the five years from 2007. Think of the Internet as a giant TiVo machine and you start to get the picture. In that scenario all things pre-recordable live on the Internet and all live programming–sport, competitions (eg. American Idol)–come down whatever pipe (or air-wave) works best. The latter still looks very mass market to me.
Personally I think time to market is critical. Cox Communications just got me to bite on a low-priced digital upgrade (yes, I know not upgrading from analog until now is very late adopter of me) combined with a DVR. And if I eventually succumb to the VOIP phone offers from that seem to come weekly, I’ll then be the much sought after triple play customer. At that point, getting me to switch to a competitive bundle will require a very low price, horrible customer service from Cox, or a combination thereof.
Click here for Tom’s full editorial. And here for a link to an abstract of the Yankee Group report.
1 comment March 6, 2008
