Michael's Insight

Decreases in landline phone customers create quandry for telephone companies

A Dying Landline Business Sounds a Lot Like Static [GigaOM]

Ma Bell's landline telephone service is definitely not a growth industry these days. In the first quarter of this year, AT&T lost 1.6 million landline phone customers. That's nearly 18,000 AT&T customers who are canceling the phone company's core product offering every day. Although investors seem to believe that phone companies can absorb this decline because the lost customers are simply moving to wireless, many are becoming customers of a cable operator's phone service.

GigaOM raises an interesting question -- whether the shrinking of the landline customer base will eventually catch up to phone company's maintenance of their phone lines. If the lines are not generating the revenue to offset the costs of keeping them up, how will phone companies cope with providing reliable service for their remaining phone customers? One analyst quoted in the GigaOM post indicates that the per line cost of maintaining Ma Bell's phone infrastructure increased from $43 in 2003 to $52 in 2007, driven up mainly from the decline of customers. And while AT&T and Verizon have wireless revenues to offset their losses in the landline business, I wonder how smaller phone companies that don't have these offsetting revenues plan to provide the same levels of maintenance on their phone lines while customers continue dropping their service?

Broadband customers avoid dial up switch despite economy

So Much For Dial-Up's Recession-Driven Resurgence [Broadband Reports]

Despite the recessionary economic conditions, cable broadband users aren't fleeing to cheaper and slower dial-up providers. Broadband Reports cites a number of press reports that predicted that dial-up ISPs like Earthlink were going to grow subscribers during the recession due to the number of customers that would drop broadband but want to keep an Internet connection. Now that Earthlink's first quarter earnings have been released, the reality is that dial-up customers are fleeing, while broadband customers continue to grow for companies like Insight. In the first three months of this year, Earthlink lost 160,000 customers or 9 percent of its dial-up customer base.

While consumers are cutting back on luxuries as a result of the downturn in the economy, research indicates that more and more customers view broadband Internet as a necessity. According to a recent Pew Research Center study, fewer Americans consider air conditioning and microwaves a necessity now than did in 2006. It's just the opposite for broadband Internet, with more Americans considering it an essential service now than did in 2006. And as a result, most are not opting to drop their fast Internet connection in favor of a slow one to save a few bucks a month.

Minnesota requests ISPs block online gambling sites

Novel effort in Minnesota seeks ISP gambling block [Associated Press]

Internet service providers that do business in Minnesota have received a request from that state's Department of Public Safety requesting that they block their users from accessing 200 online gambling web sites. In an attempt to restrict the usage of the Internet for gambling by Minnesota residents, the state has adopted a novel (and potentially misguided) legal argument. They cite a federal law that restricts common carriers - which usually applies to phone companies - from allowing their telecommunications services to be used for wagering. The question is, whether the federal law can be applied to ISPs, since the law's original intent was to prohibit the use of telephones to place bets.

The author of this article asked several ISPs whether they planned to comply with the state's request. All either declined comment or indicated that they were reviewing the request. Many states are looking to get their arms around online gambling sites, which are nearly all based outside the U.S., and not subject to U.S. jurisdiction. Recently in Kentucky, the state filed suit against a number of offshore gambling web sites. A Kentucky judge allowed the state to seize the domain names of those web sites, effectively shutting them down for a time.

Will ISPs comply with Minnesota's request? And, if not, will Minnesota file their own lawsuit based on the federal law they cite in their request?

Mobile data roaming results in a $62,000 bill for one customer

Oh Look, Another Insane 3G Data Bill [Broadband Reports]

Here's hoping that you're not relying on your mobile phone carrier to serve as your broadband provider. Otherwise, you may be in for a nasty surprise similar to what the customer in this story experienced - in the form of a $62,000 mobile phone bill. CNN and Broadband Reports profile the travail of a mobile phone customer who used his mobile data plan to download the entire Disney/Pixar feature Wall-E while he was traveling in Mexico.

Based on the international roaming charges for data usage, the next month, this customer was greeted to a $62,000 mobile phone bill when he went to the mailbox. A subsequent complaint to the customer's mobile phone provider yielding a reduction of the bill to a still stratospheric $17,000.

Bandwidth has a marginal cost that is higher on wireless networks than on their wireline counterparts. And while I don't recommend using your 3G wireless data card to download HD movies from iTunes (your Insight Broadband connection will be much faster) a $62,000 bill for a download of 2-4 GB of data sounds like a ridiculous error. It is important that when companies have consumption based billing plans for bandwidth usage that they make the plan terms transparent and easy to understand. If this customer realized that he was paying a data roaming surcharge for international data usage that would result in a $62,000 bill, he probably would have waited until he returned to his home broadband connection to download the movie.

Adobe aims to make online video searchable

Adobe Wants to Reshape Online Video [NYT Bits Blog]

In the same way that Google built an empire on serving up relevant search results from millions of cataloged web pages, Adobe views a search application for online video as the next big thing for the web. Last week, at the National Association of Broadcasters conference, Adobe previewed the beginnings of what it is calling Adobe Story. While it's still in private testing, Adobe Story aims to make online video content searchable by users. And, while some might say that online video is already searchable by tags and text-based descriptions, Adobe Story is much more ambitious than simply allowing search on pre-existing textual information.

Story aims to have the ability to read movie and television scripts, decode the content of each script and accompanying video, and allow the video to be searchable by keywords within the script - forwarding the video to the exact position the word appears within the video. Want to watch video of your favorite actor or character? What about searching for your favorite movie lines? Adobe Story looks to categorize and make it all searchable by users.

With the exponential increase of video content available on the web and the increase in the amount of video that the average user consumes, creating another layer of searchability of video is an important step in online video's proliferation and ease of use.

Scammers use swine flu as spam social engineering tool

Phishing with Swine Flu as bait [CNET News]

The outbreak of swine flu has many people concerned, and it also has spam email scammers working overtime to prey on the public's fear of the virus. CNET profiles three scam emails that purport to offer information about the swine flu, but are masquerading malicious code. Two of the emails are phishing emails with links to web sites that ask the user to complete a form with personal information. The third contains a PDF document that is entitled "Swine influenza frequently asked questions.pdf." The document contains malicious code that installs a keyboard sniffer on any user's computer on which the document is opened. The sniffer records the user's keystrokes, stealing personal and financial information.

Also, according to this article, spam preying on the fear of swine flu accounted for 4 percent of global spam yesterday. If you need information about the flu virus, the most up-to-date information is available from the U.S. Centers for Disease Control web site. Never rely on unsolicited email to provide information about breaking news events, as it has a high likelihood of containing attachments or links that contain malicious programs.

Google finds itself in net neutrality predicament

In Developing Countries, Web Grows Without Profit [New York Times]

Large social media and online video portals are facing a growth dilemma, according to this New York Times article. It's a problem that may have some large supporters of net neutrality shifting course on their own neutrality principles in order to put the bottom line in the black. For sites like Facebook and Google's YouTube, much of their current growth is coming from large numbers of Internet users in developing countries. Because of the tremendous growth and bandwidth usage of users in the developing world, these companies are pouring resources into their site's bandwidth in places where there is a lack of interest by web advertisers in purchasing advertising that targets users.  I guess it's their turn to feel the pinch of investing huge resources for little or no return. 

Video sharing site Veoh recently addressed the developing country issue by blocking users from these countries from its site. The costs of serving up videos to every corner of the globe simply wasn't economical for Veoh. For online video leader YouTube, which is owned by Google, the pinch has caused Google to slow international development plans. Google, which has been a major proponent of net neutrality legislation in the U.S., is considering limiting YouTube bandwidth in countries that are too large a drain on resources, according to this article. If you live in a country that drives the YouTube profit margin, you can expect a first-class experience. But if your country consumes more bandwidth than advertising can pay for, you'll be relegated back to the YouTube version of coach.

It's an interesting predicament that Google finds itself when you compare it to its vociferous support for domestic net neutrality while the company plans network discrimination for its YouTube product internationally.

Facebook opens stream to developers

The latest from Facebook: 'Open Stream API' [CNET News]

Facebook has taken another step toward Twitter's capabilities, with yesterday's release of a new developer framework called the Open Stream API. One of Twitter's strengths is the ability for developers to access tweets via the Twitter application programming interface or API. Those developers can then create a whole new application to allow users to use Twitter in a whole new way - whether its a mobile Twitter interface or a specialized search interface for tweets. Facebook has made the strategic decision to open its users' news feed content to be accessed in the same way tweets are on Twitter. And they're not calling it the "feed" anymore. Now, it's called the "stream."

Already Facebook has wooed Adobe and Microsoft to develop Facebook applications in their respective Air and Silverlight products. Imagine being able to embed a Facebook application in any web page. That's the future of Facebook with the Open Stream API. Of course, it will be up to developers to decide how to implement the API, but if Facebook's experience with creating a development platform for applications a couple of years ago is any indication, there should be plenty of interesting developments in this space in the coming months.

Cablevision confirms 101 Mbps speed tier

Cablevision To Blast Out 101-Mbps Internet Service [Multichannel News]

Confirming a earlier report, Cablevision, the nation's fifth largest cable provider, has announced that next month it is launching a new 101 Mbps speed tier for its broadband service. The company's DOCSIS 3.0 tier will be the fastest cable broadband speed available anywhere in North America, passing five million homes in New York, Connecticut and New Jersey. Upstream speeds will be available up to 15 Mbps.

Cablevision plans to call the new speed tier Optimum Online Ultra, and it will be priced at a $99.95 monthly charge. Cablevision competes with Verizon's fiber-to-the-home FiOS product across much of its footprint, but FiOS maximum speed is 50 Mbps which will be more than doubled by Optimum Online Ultra. According to this article, Cablevision plans to offer the new speed tier without a usage cap.  Cablevision's strategy (not to set caps) is not as contradictory as it seems to the Time Warner plan to test packaging higher speeds with tiered usage.  The nation's number 2 cable company said they would also launch an ultra high speed, unlimited usage plan at around $140 per month.

With speeds like Optimum Online Ultra that blow the competition away, it's no surprise that over 52% of the homes passed by Cablevision are subscribers to its broadband service, nearly twice the national average. And the super-fast speeds that DOCSIS 3.0 brings to cable broadband mean that you can stay tuned here for continued announcements of speed increases from America's cable companies.  We're watching the roll-out of these new speeds closely while we prepare our network for new advanced services like DOCSIS 3.0.

Insight's digital migration in Louisville

Analog viewers lose Faith Channel [Louisville Courier-Journal]

Over the weekend, the Louisville Courier-Journal reported on two channel changes - one that has already happened and one forthcoming - that involve the migration of analog channels to digital. The Faith Channel was changed to a digital signal after working with us to accomplish the conversion.  In the words of Reed Yadon, the Faith Channel's general manager:

"With the competition being what it is for viewers, (we felt) we needed to have the best technical presentation that we could," Yadon said.  "At some point, analog is going away anyhow."

By moving the channel to digital, 30 percent of our subscribers who subscribe only to analog service need an option to receive the Faith Channel.  For those subscribers, Insight is offering, for one year, a specially programmed set-top digital converter that will allow analog subscribers to continue to view the Faith Channel. Analog customers with a digital television can receive the Faith Channel by performing a channel reset on their TV.

In addition to the Faith Channel, Insight will be converting Univision, the Spanish-language channel, to digital on Wednesday of this week with the same opportunities available for analog customers who wish to continue to receive the network.

These changes are not related to the current broadcasting digital transition. That's the ongoing transition of broadcast television stations to digital, which is ongoing until June 12th of this year. The digital migration that Insight is performing will allow us to free up bandwidth that is currently being used by analog channels. By reclaiming that bandwidth, we can offer our subscribers enhanced programming options like more standard and high definition video channels and faster cable broadband speeds. The bandwidth that one analog channel takes up can be replaced by up to a dozen standard digital signals.

These types of changes will continue to be made on cable systems throughout the country as the cable industry proceeds with its own digital transition, unrelated to the broadcast transition that is now scheduled for completion on June 12. 

Conflicting information from AT&T on behavioral advertising

AT&T Doesn’t Want to Follow You (Except When It Does) [NYT Bits Blog]

Last week, I wrote about congressional hearings on the issue of addressable advertising. Based on this article at The New York Times Bits blog, it appears that one AT&T executive that testified at the hearing might be doing some verbal jumping-jacks when it comes to exactly how much behavior-based advertising that AT&T is directing toward its Internet subscribers.

At the hearing, AT&T's chief privacy officer, Dorothy Attwood, testified that AT&T would not engage any behavior-based advertising system without giving its customers notice.

"The first thing that AT&T is doing to address the challenge of behavioral advertising — its promise and potential pitfalls — is to avoid thoughtlessly lurching into this realm without proper due diligence."

As the post points out, AT&T has been long been a user of a company that's a leader in the area of behavioral advertising. In fact, until last week, that company had advertised its products with the endorsement of another AT&T executive on its web site. And in 2006, AT&T was the subject of an article in the Times about its Cingular Wireless division using behavior-based advertising to target potential mobile phone buyers.

It's possible that in a company as large and labyrinthine as AT&T, the chief privacy officer wouldn't be familiar with each and every time the company has used behavior based advertising. And this episode definitely wouldn't be the first time AT&T lurched into an issue without much forethought. But with references to AT&T mysteriously disappearing from the behavioral advertising vendor's web site, I wonder if there's not more to this story than a simple misunderstanding.

After the sinking of The Pirate Bay -- What's next?

Future of P2P: What Comes After The Pirate Bay [NewTeeVee]

Now that the administrators of notorious peer-to-peer file sharing site The Pirate Bay are facing jail time and fines for a conviction of violating copyrights in Sweden, NewTeeVee asks what the future holds for P2P enthusiasts. The post doesn't hold much optimism for The Pirate Bay, indicating that the legal problems that the site's administrators face will likely either force the site's shutdown or will result in a competing P2P technology taking over The Pirate Bay's user base with a superior P2P technology. Much of the speculation is based on the demise of the first popular file trading application - Napster. After the legal battle that shut down Napster, several similar applications sprung up to take its place. This evolution eventually spawned BitTorrent and The Pirate Bay as a Torrent tracker.

NewTeeVee speculates that both search and social media will be major influences on the next "Pirate Bay" P2P technology. But, it makes me wonder why P2P enthusiasts invest so much time and money into a non-sustainable business model. Look at Napster and The Pirate Bay - while they attracted a large number of users for a time, eventually the authorities caught up to them, and now they're no more. Legal content distribution models - like Hulu and Comcast On Demand Online are already creating sophisticated search and social media components into their products - no pirated material necessary.

Panasonic advances 3-D standards creation

Panasonic: 3-D Is Critical [NYT Gadgetwise Blog]

At the National Association of Broadcasters conference in Las Vegas this week, Panasonic is making it clear that it would like to see the adoption of a set of standards for 3-D television by the end of this year. The television and Blu-ray player manufacturer has determined there is a significant market for 3-D TVs, and is hoping to be able to put a 3D television on store shelves some time next year.

According to this article, Disney is one of the key partners in Panasonic's push for 3-D standards, as Disney looks to create home theater versions of its 3-D animation features. Panasonic's preferred 3-D standard involves a set of 3-D glasses that are called active glasses. Active glasses have shutters that open and close automatically, based on signals sent from the 3-D device. The opening and closing of the shutters over the eyes creates the appearance of image depth. Panasonic indicates that if the technology is incorporated into the 3-D standards, the manufacturer would ship each 3-D television with several pairs of active glasses.

And if everything goes as planned for Panasonic, the company hopes that 10 percent of all television sales within three years are 3-D ready.

Google's Chrome browser has security flaw patched

Google fixes severe Chrome security hole [CNET News]

Google's entry into the browser space, Chrome, had a major security flaw repaired yesterday. The flaw threatened to allow malicious code to be run on Chrome users' computers if they surfed to an infected web site. Chrome's most recent security hole was reported by a security researcher at IBM, and is described in this article as a flaw that allowed cross-site scripting attacks using malicious JavaScript.

Mark Larson, Google Chrome product manager describes a possible exploit that an unpatched version of Chrome could allow.

If a user has Google Chrome installed, visiting an attacker-controlled Web page in Internet Explorer could have caused Google Chrome to launch, open multiple tabs, and load scripts that run after navigating to a URL of the attacker's choice. Such an attack only works if Chrome is not already running.

If you're running Google Chrome, the browser's automatic update feature should have already patched the security flaw. The browser does need to be restarted for the patch to take effect.

Yahoo's GeoCities to close down after 15 years

Yahoo Quietly Pulls The Plug On Geocities [TechCrunch]

If you've been using the web for a while, you may remember the web's first popular web page hosting resource for everyday users. It was back in 1994 when GeoCities launched - long before today's popular blog hosting sites. GeoCities provided free web hosting to any web user that was willing to register. In 1999, Yahoo acquired GeoCities for $2.87 billion.

But with declining visitor numbers and a plethora of competitors with larger shares of the marketplace, ten years later, Yahoo is pulling the plug on GeoCities. Currently, the service is closed to new accounts and current account holders have been instructed to await instructions from Yahoo about the future of the site. GeoCities is unique in that it is almost as old as the web itself, but with the advent of easy-to-use blogging sites, GeoCities just couldn't keep up with the changing habits of Internet users.

House subcommittee holding hearing on addressable advertising privacy

Canoe Ventures Part Of House Hearing On Online Privacy, Targeted Marketing [Multichannel News]

The U.S. House Communications, Technology & Internet Subcommittee is holding hearings today focused on Internet and television viewers' privacy rights, specifically privacy when it comes to addressable advertising. With the advent of products like Google's behavioral-based AdWords web ads and the cable industry's Canoe venture, which aims to provide relevant, addressable advertising to cable television viewers. Testifying at today's hearing on behalf of the cable industry is NCTA President and CEO Kyle McSlarrow.

Its important to note that Canoe doesn't track usage habits to determine which ads are most relevant to display (like Google's AdWords). Canoe's addressable advertising technology delivers ads to groups of households based on third-party market research data. Here's Canoe's response to the congressional inquiry about user privacy.

"Community addressable messaging does not use deep packet inspection, personally identifiable information, nor set-top box data," said the company. "Cable subscribers already are notified about the general use of third-party demographic data via cable operator privacy notices. As we build a common foundation for advanced advertising capabilities that TV networks can use to make ads more relevant, useful and engaging for customers, all of our products are being developed with consumer privacy protection at the forefront."

It's important that in creating and implementing new technologies to deliver more relevant ads for users, that those users' privacy of personal information is respected. Canoe's ad-serving technology plans involve a process that is transparent to users and protects their private data.

Insight user receives scam email

Recvd Email From Insight - A Scam? [Broadband Reports]

I often check the Inside Insight forum at Broadband Reports. Last night, I noticed one user asked about a suspicious email received from a sender purporting to be Insight. The email asked that the user reply to the email by providing his broadband account's user name and password.

Dear insightbb.com,

We have noticed an unauthorized attempt to change your insightbb.com password from a foreign IP. This was going to result to your inability to access your account due to the password change. If you know you are the authorized owner of this account, kindly reply by providing your original username (*******) and PASSWORD (*******) so as to protect your ID and password from unauthorized access.

Failure to do this will violate the insightbb.com email terms & conditions.

Thanks for using insightbb.com

The insightbb.com Tech Support.
All content (c) Copyright The insightbb.com

The Broadband Reports forum user suspected that the email was a fake, phishing for account information. That suspicion is correct.

Insight never sends emails requesting personal or account information (in this case, username and password) to its customers. Whenever you receive an email like the one above, ignore and delete it. If you have a question about whether an email is legitimate, feel free to give us a call. A good rule of thumb for emails like these, whether they purport to be from Insight, your bank, your online retailer of choice or anyone else you seem to know, is to ignore it if asks you to send personal or financial information in a reply.  It's also a good rule of thumb not to click on a link contained in an unsolicited email.

By the way, I received the same email on Tuesday and I immediately deleted it.

Online HD video growth expected to be 200 percent for the next three years

HD Video to Be Worth $2.2B by 2012 [NewTeeVee]

As if there were any doubt that online video (and HD online video in particular) will take off exponentially across the web in the next few years. A recent report conducted by Akamai indicates that HD online video revenues will grow nearly 200 percent per year over the next three years to $2.2 billion. According to the report, all online video revenue is expected to grow from around $2 billion this year to over $9 billion in 2012. That growth is driven by a demand by consumers for more online video.

Another IDC report surveyed online video users, and found that 35 percent of those users want online video moved to their television screens, while 65 percent either didn't want the ability to access online video on their televisions or didn't know whether they would. It will be interesting to watch whether those percentages change as more and more people turn to the web for video content.

The dramatic and continuing growth of online video is one of the most significant driving forces of ISPs attempting to find ways to fairly distribute the costs of providing the additional bandwidth needed to deliver streaming video to heavy consumers of that type of content. Time Warner, AT&T are among those Internet providers looking to metered broadband as a method of distributing those costs. If fairly distributing the cost of bandwidth improvement is not addressed by some methodology, the rising consumption of heavy bandwidth applications, like online video, will threaten to degrade the experience of all users on each providers' network.

Amazon video service to begin providing HD content

Amazon Video on Demand goes high definition [ArsTechnica]

For Roku set-top users, Amazon announced yesterday that its Video on Demand service will now offer HD movies and television shows for purchase or rent. Amazon's HD library is set to start with around 500 titles, which is dwarfed by the HD content available from other online providers, like iTunes, and the HD Video On Demand library available to Insight digital customers. Nonetheless, Amazon wants to compete with other providers in this space, and will likely grow its HD library over time.

In addition to the Roku, a few other consumer set-tops are listed in this post as being Amazon Video on Demand compatible. For iTunes users, there's only one set-top that will move HD content from the computer to the television - the Apple TV set-top.

Adobe Acrobat becomes a major target for hackers

F-Secure says stop using Adobe Acrobat Reader [CNET News]

The chief research officer for F-Secure, a web security firm, made a recommendation yesterday to all Internet users that they temporarily abandon the use of Adobe Acrobat Reader due to the number of targeted exploits that have been launched against the most popular PDF reader. According to F-Secure, over 47 percent of security exploits launched against a particular piece of software targeted Acrobat Reader so far this year.

While F-Secure's advice may be an outlier among web security experts, it does point to the trend of malware programmers and hackers continually searching for new targets of opportunity. Adobe has recently patched one Acrobat vulnerability, and likely has many more to patch to keep exploitable opportunities at bay. One problem that Adobe faces, according to this article, is that most users don't expect to have vulnerabilities in Acrobat, thus neglecting installing necessary software updates.

Until Adobe resolves the Acrobat vulnerabilities, F-Secure has recommended that users download and install an alternative PDF viewer, a list of which is available in this article.

AT&T proceeds with metered billing tests

AT&T's Own Metered Billing Plans Move Forward [Broadband Reports]

Lost in last week's news about Time Warner Cable's metered broadband tests is the news that AT&T is proceeding with its own tests of metered broadband in two trial markets. While opponents of metered broadband launched protests of Time Warner's plans after the company announced the plans to its customers, AT&T instituted service caps, avoiding any public protests because they didn't tell customers about usage-based billing until after they signed up for Internet service.

Even more interesting is the fact that AT&T's "monthly bandwidth usage allowance" tiers are remarkably similar to the sizes proposed by Time Warner Cable, starting at 20 GB. At the same time Time Warner Cable is posting pro-active communications to its customers about metered billing plans and asking customers for their comments, GigaOm reveals that AT&T provides no notice to customers in online marketing materials or terms of service.

As I said in yesterday's post, the controversy that Time Warner encountered on metered broadband was largely due to their transparency and active communications to customers about their plans. Opponents of Time Warner's tests were alerted, prompting a campaign of misinformation against the tests. Ultimately, Time Warner decided to postpone the tests until they've had an opportunity to clear up confusion about metered billing. AT&T is proceeding with their tests, absent any campaign from metered billing opponents.

Double standard anyone?

Twitter worm replicates itself by encouraging users to click on tweet URLs

Worm a problem for Twitter [Sherman on Security]

The popular microblogging service Twitter may now be able to count Oprah Winfrey as a member, but it's still experiencing growing pains as an attractive nuisance for malware programs. Sherman writes about a worm that has infected Twitter, posting updates to infected Twitter accounts that include a link that, when clicked, infects that user's Twitter account.

According to this article, a 17 year-old created the worm to illustrate the shortcomings of Twitter, and it did exactly that. Over 10,000 Twitter updates were posted by the worm, which apparently did not contain any code that attempted to steal confidential personal or financial information. It just lived for the purpose of replicating itself.

Twitter brings a who new battleground to the fight against malware programs. While this one might have been relatively benign, what happens when a group of hackers release a similar worm on Twitter designed to encourage users to click links that launch serious malware programs? In the same way that users shouldn't click on links in email or open email attachments from untrusted sources, links in Twitter messages should be treated the same.

Adobe Flash platform coming to television screens

Adobe Flash platform for HDTVs & connected devices on display at NAB [EngadgetHD]

Adobe Flash, the platform that many web sites use to power applications like streaming video, is coming soon to a television screen near you. Adobe and a list of partners that include Comcast announced that the Flash platform is being readied to run on a variety of broadband connected home theater components including HDTVs, Blu-ray players and set-top boxes. Adobe looks to bring the media-rich applications that Flash has become known for on the web to a variety of devices.

With the advent of broadband connected televisions, Flash has the potential to provide users with widgetized applications like news and weather directly from the TV screen. Some of the partners in the Adobe announcement are content providers, like the New York Times Company and Disney Interactive, which could provide content for Flash applications on the TV. With cable operators working to bring interactivity to the television screen via the tru2way standard, it will be interesting to watch a software developer's attempt to create TV interactivity by porting a popular computer platform to the television.

Time Warner places consumption-based billing test on hold

Time Warner Cable announced late last week that they would postpone their test of consumption-based billing for broadband service.  Flat-rate proponents may be reveling in the belief that they won the mother of all battles and if this was a permanent nail in the coffin of consumption-based billing, I'd say that might be true.  But Time Warner announced a postponement, not a cancellation, in order to hear more from customers.

Here's part of what CEO, Glenn Britt said in announcing the delay.

"...we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met," Britt continued. "While we continue to believe that consumption-based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process."

Unfortunately many broadband customers, both in the Time Warner Cable test markets and elsewhere, have only heard the misguided arguments of opponents of metered broadband. In an attempt to communicate the other side of the issue, let me explain, in bullet-point form, why consumption-based billing is actually pro-consumer.

• Networks would be more aggressively upgraded for new and advanced services
• ISPs could stop or reduce managing their networks during peak periods
• Online video would be more available and deliverable on upgraded networks
• Legal P2P services would be faster and more available
• Only a small percentage of customers would pay more (those who use the most bandwidth)
• Light users would pay less
• Most would see no change in their bill at all

Ironically, America's second-largest cable operator got into this situation partially because they were being totally transparent about their plans at a very early stage of their thinking.  Perhaps it was too early because their plans hadn't be finalized. Indeed, they were still listening to consumers as they were developing the program.  They also were totally unprepared for the onslaught of misinformation and misunderstanding that would swirl up around their plan.

Even without starting their test, I think the folks at Time Warner already have learned a lot.  Unfortunately, it has nothing to do with the fairness, accuracy or acceptability of usage-based billing.  The only way to answer those critical questions is by going forward with the very test Time Warner delayed. 

Customers have become accustomed to paying a monthly bill for unlimited broadband and if ISPs are going to change that paradigm, it's incumbent upon them to explain the benefits to customers.  Time Warner did learn some things though -- that ISPs have to be much clearer on what they are planning, and carefully and must simply explain why it would be beneficial to consumers. ISP's also need to be much clearer about who would pay more, who would pay less and who would pay the same when considering such a change.  

If this emotion-charged issue results in a prohibition of usage-based billing, an ISP's ability to aggressively keep up with demand will be financially compromised.  That will limit the speed of important upgrades thus limit the expansion of new bandwidth-consuming new services.  At the end of the day, everyone ultimately will pay more for extremely heavy usage by a small minority of customers.   

Also AWOL from this conversation -- consumption-based billing creates an environment that encourages consumers to become responsible self-regulators of network resources.  That's a really good thing because it means that ISPs won't need to manage consumption for their customers.  I've previously written that 5% of our customers would use over 80% of our network resources if the network was left unmanaged.  Indeed, some of the leading critics of Time Warner's plan previously endorsed metered billing as a solution to the need to manage Internet traffic. 

I suppose there's also a bigger thing going on here.  Americans are sick and tired of the recession and they blame big business for it.  Although there is plenty of blame to go around, there also is plenty of evidence to suggest that a lot of industries, particularly financial institutions, were terribly out of control, leading up to our economic woes.  A new era of regulation is both popular and probably necessary. 

But let's not go crazy either.  Broadband is dynamic, job-creating and increasingly a central part of the future of communications and entertainment. 

And it's very competitive.  Fact is, if customers didn't like Time Warner's billing policies, they could call up Verizon, AT&T or anyone else that competes against them in their markets. 

So, let's not knee-jerk react to regulating everything that moves.  History consistently has proven that real innovation is born out of entrepreneurship and free markets. 

This issue will take a rest for a while.  But it's important that we keep talking about it.  Time Warner was not looking to gouge their customers without regard for their ability or desire to pay.  They simply were  seeking an answer about how to cope with the rapidly changing nature of broadband services that are being launched today.  We either have to be flexible or we will seriously lag the rest of the world in broadband acceptance for years to come. 

And that's not good for anyone.

Pirate Bay defendants found guilty, sentenced to one year apiece

Pirate Bay defendants found guilty [CNET News]

The founders and two other employees of the notorious peer-to-peer web site The Pirate Bay have been found guilty in a Swedish court of violating copyright laws, and have been sentenced to a year in prison each and fines totaling $3.6 million. The web site, which was the number one jumping off destination on the web for users seeking illegally copied content via the BitTorrent application. And even though the site only linked to other sites hosting the content, the judge and the Swedish equivalent of a jury found the four defendants guilty of illegally sharing copyrighted works.

This is a big win for content producers - it is possible that the verdict will hamper the continued operation of The Pirate Bay site. But even larger is the message that the verdict sends. Sweden has long taken a laissez-faire attitude toward file-sharing, and only recently did the country enact copyright laws designed to combat the online stealing of copyrighted content. It was anything but a sure bet that the court would find the defendants in this case guilty. Now, P2P'ers anywhere in the world will be watching over their shoulder when sending or receiving illegally copied materials.

Though the defendants will likely appeal the verdict and The Pirate Bay may stay online for now, Sweden has sent a powerful message that these types of activities are just as unwelcome in that country as they are in the United States.