July 13, 2012
Time Warner Cable remains the dominant provider of pay TV and Internet service in Kansas City. Ever since Google Inc. said it is bringing ultrafast Internet connections to the market - and left strong hints it will bundle the service with television packages - Time Warner has publicly acted nonchalant. Yet this week, blogs, beginning with GigaOM, took notice that internally the cable guys aren't quite so chilled. Rather, posters directed at Time Warner employees in Kansas City seek information on the new player in town. "Share tips, rumors and rumblings about Google construction or launch activity," the poster states. It says "multiple tips are encouraged" and notes the company is rewarding employees with three $50 gift cards weekly for sharing leads.
The posters "are hanging in our offices," Time Warner spokeswoman Marci Pelzer confirmed Thursday. "This is a competitive industry. Kansas City is a hypercompetitive market." Indeed, in addition to the availability of satellite services, the cable company competes with SureWest Communications in some neighborhoods. In recent years it has seen AT&T's U-verse service pose a significant challenge. Now comes Google, announcing more than a year ago that it will build a network of high-capacity fiberoptic wires running all the way to customers' homes. And it promised Internet speeds of up to 1 gigabit per second. That would deliver downloads about 100 times quicker than the national norm and uploads 1,000 times faster than the U.S. average.
Since that decision, however, Google has given almost no details of what it will offer, when it will arrive or which neighborhoods will get it first. It has said the cost will be comparable to what most consumers pay now for Internet access. Meanwhile, various patent filings and license applications suggest strongly that the Internet service will be paired with a TV package - something analysts say will be critical to luring folks away from their familiar cable and telecom bundles. A spokeswoman for the California-based tech titan declined to comment for this article.
Google has been consistently coy about its plans. It has twice missed publicly announced schedules for starting its service. Most recently it has only promised a "major announcement" this summer. That has left a void. And Time Warner Cable wants to know more about what's coming. "We're looking for construction activity," Pelzer said. "We want our employees to be alert. ... We would be doing this with any other new competitor." Kansas City Star
West Virginia bought more than 1,000 expensive Internet routers with federal stimulus funds as part of an ambitious plan to create a long-lasting, high-capacity broadband network throughout the state, the official overseeing that spending has told a congressional inquiry.
Jimmy Gianato responded to questions about the spending from two U.S. House Energy and Commerce subcommittee chairmen, John Shimkus of Illinois and Greg Walden of Oregon. The Republicans posed eight questions to state officials regarding the pursuit of the Broadband Technology Opportunities Program grant. Most focus on the decision to buy 1,064 high-capacity Cisco routers for locations including small schools and libraries, following articles in The Charleston Gazette regarding those purchases. But it's not clear whether Gianato's answers have satisfied the chairmen. Walden and Shimkus are currently reviewing Gianato's response, said Debbee Keller, a spokeswoman for the Energy and Commerce committee.
Gianato's June 28 written response says West Virginia applied for the $126 million stimulus grant to fund a three-prong plan to bring the latest broadband and telecommunication gear to a state where hilly terrain, low-income residents and other factors have stymied previous efforts. "For a private sector provider, the costs are too high to reach too few customers who have not proven historically likely to purchase broadband services when provided," the response said. "Left to pure market forces, West Virginia, and other rural areas, will have inferior technology or none at all."
The state's plan envisions a network of fiber optic cable anchored by schools, libraries, hospitals public safety agencies and other locations deemed community institutions. Under the plan, the state would also build 12 towers to fill a gap in the microwave communication system for law enforcement and other first responders. That part of the plan involves upgrading that system to withstand disasters while expanding its features. The plan's other main goal is a broadband connection between the sprawling National Radio Astronomy Observatory in Greenbank and West Virginia University, to relay the massive amounts of data it collects with the rest of the world in real time. When the state applied for the stimulus grant in August 2009, Greenbank shared its data by shipping disks to WVU by truck, Gianato's response said.
Gianato wrote that the state has so far spent $56.4 million from the grant, with $26.6 million going to the microwave system and $29.6 million devoted to the broadband network. That later spending includes $1.1 million to Frontier Communications as the successor company to the state's contractor for telecommunications, Verizon Communications. Shimkus and Weldon specifically asked why this part of the plan relies on a single type of router instead of differing models related to the size or population of its location. Gianato wrote that officials considered that option. Cisco had suggested a suitable router but noted it was phasing out that model. The state ended up choosing a newer, more capable type of router that Cisco offered at the same price as the older model, the response said. "The application was not based on the usage levels or number of workstations at the (community institutions) today, but instead on the concept that we should be equipping our citizens to fully embrace enabling future technology," the response said. The response also says that these anchoring institutions "have always been intended to be hub locations at which multiple providers of broadband services or applications can interconnect in order to provide connectivity and service offerings to the surrounding community."
But critics of this approach include the West Virginia Cable Telecommunications Association, which represents providers that offer such services as high-speed Internet access. While welcoming broadband stimulus funding, the trade group disagrees that the state is as lacking in access as officials contend. In a November 2009 letter on the issue it provided to AP, the association argues that the plan outlined in the grant application won't create hubs. "These 1,064 institutions constitute end users that will use the broadband connections themselves, rather than serving as conduits or interconnection points for last-mile providers," the letter said.
Gianato's response also explains that state has since received another 100 routers for free from Cisco after learning it qualified for a discount. Shimkus and Weldon had asked about those additional devices. The congressmen also asked Gianato to report how many routers remain in storage, and why, another topic of the Gazette articles. He did not answer that question directly. His response said 383 routers are on their way to being installed, and that all will be in place by February. Bloomberg
DirecTV has received a show of support from an unusual source in its feud with Viacom over a new deal to carry the media giant's cable channels including MTV, Comedy Central and Nickelodeon. Cox Communications Inc., the nation's fifth-largest cable operator with almost 5 million subscribers and a competitor to DirecTV, says the satellite broadcaster is right to fight Viacom's push to raise the price tag to carry its networks. In a statement, Bob Wilson, a senior vice president of Cox Communications, said the fight is indicative of bigger market forces at work that need to be addressed. "This is a reflection of an unbalanced multichannel video business model that has two major effects: continued significant increases in the cost of programming that are the main driver of rising cable and satellite TV service bills, and wide disparities between what large and small distributors pay for programming, resulting in similar disparities in what respective customers pay for service," Wilson said in a statement.
Often when a distributor is dueling with a programmer leading to channels being dropped, a rival distributor will try to use it as an opportunity to snag frustrated subscribers. Cox does not appear interested in going down that road. Viacom's cable networks including MTV, Nickelodeon and Comedy Central have been off of DirecTV since Tuesday night. The two sides are trying to negotiate a new deal but are haggling over price. Los Angeles Times
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