Verizon Challenges Comcast in Washington County Pay-TV Market

Verizon Communications quietly turned on its FiOS TV service in parts of Washington County, Oregon this week, giving customers in the area an alternative to cable television incumbent, Comcast.

The presence of another pay-TV provider will allow viewers to choose between different subscription plans and channel lineups, competing Video On Demand libraries, and varying levels of HDTV programming. The monthly cost of cable TV, however, isn’t likely to change much, according to Washington County’s cable regulator.

“Rates probably will not fall (but) they may be constrained,” commented regulatory affairs manager, Fred Christ, of the Metropolitan Area Communications Commission.

Even without a big drop in rates though, competition is sure to benefit subscribers. Verizon is offering dozens more channels, and more high-definition content than Comcast, in a standard package costing around $48 – that’s $3 cheaper than its cable rival’s most popular package.

Verizon and Comcast have been competing nationally for a greater share of the regional telecommunications and video market ever since Comcast launched its own digital telephone service two years ago.

Rogers Communications Accused of ‘Hijacking’ Web Traffic

Canada’s biggest cable company, Rogers Communications, is under fire this week for what critics call a violation of net neutrality principles.

Los Angeles-based technology consultant, Lauren Weinstein wrote on his blog last weekend that Rogers had spliced into an “hijacked” customers’ web traffic, by inserting its own service messages into pages that customers are visiting.

Weinstein received a message from a “concerned customer” showing a Rogers-Yahoo branded customer service message embedded at the top of Google’s homepage, warning the subscriber that they are approaching their monthly download limit.

“What the blazes is all that ISP-related verbiage taking up the top third of the page? Why would Google ever give an ISP permission to muddy up Google’s public face that way?” Weinstein wrote, saying that the warning was evidence that ISPs are spying on customers and modifying how they use the web. “Google didn’t give this ISP any such permission. The ISP simply decided to modify Google on their own.”

A Rogers spokeswoman confirmed on Monday that the cable giant is experimenting with this new technique as a customer notification system. “We’re trying different things, and we’ll test customer response,” she explained.

Google, meanwhile, was clearly not impressed by Rogers’ actions.

“We are concerned about these reports,” the search giant said in an emailed statement to the Toronto Star. “As a general principle, we believe that maintaining the Internet as a neutral platform means that carriers shouldn’t be able to interfere with Web content without users’ permission. We are in the process of contacting the relevant parties to bring this to a quick resolution.”

Blogs and internet chat groups were alive with criticism for Rogers actions this week. Customers have accused the carrier of violating Telecommunications Act, which states that “a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.”

Growing Number of Customers Dump Landlines for Wireless

A growing number of American cell phone users are ditching their fixed-line telephones, and close to a quarter of current landline subscribers would consider using wireless only, according to a recent report by In-Stat.

Researchers found that most “cord cutters” are less than 35 years old, and have a lower income than the average landline subscriber. These people apparently use 22% more wireless airtime than the average survey respondent, and 40% more than those who had no interest in canceling their fixed-line service.

As one might expect, cord cutters tend to spend considerably more than average on wireless service, with an average phone bill of $111 per month.

“The largest number of current cord cutters — those who do not have a landline, but rely solely on their mobile phone — are those one might expect: young, single, living alone or sharing quarters such as a dormitory or rooming house,” said Jill Meyers, In-Stat analyst in a release announcing the findings. “In many cases, these are people who are the least-likely candidates to have a landline phone.”

FMC and Smartphones to Fuel Dual-Mode Cell Phone Market

Revenue from Wi-Fi-enabled cell phones will show strong, double-digit growth every year through 2010, at which time it will top $145 billion, according to a recent report by Infonetics Research.

The increasing popularity of fixed-mobile convergence (FMC) and Wi-Fi-enabled smartphones should drive the dual-mode handset market upwards at a compound annual growth rate of 31% between 2006 and 2010, Infonetics predicts. Growing availability of multimedia smartphones for the consumer sector will be an especially important factor in this growth.

“To date, smartphone purchasers have been largely business power- users, but the launch of Apple’s iPhone and Samsung’s BlackJack media-playing smartphones that appeal to consumers is giving the smartphone segment a boost, and could change the dynamics of the mobile phone market,” explained Richard Webb, the directing analyst for wireless at Infonetics Research. “Vendors will design more consumer-oriented smartphones, and cause fierce competition among incumbent players.”

AT&T Launches New Enterprise VoIP Transition Tool

American telecommunications giant, AT&T Inc., has released a new product for the small- and medium-sized enterprise market, to smooth the transition to VoIP.

AT&T IP Flexible Reach, as the new tool is called, allows businesses to converge their existing voice and data networks over a single IP connection, without having to replace their legacy communications systems.

Once signed up for VoIP, companies can make unlimited local and long distance calling within their own networks, and access competitively priced long distance and international calling plans.

“IP Flexible Reach allows smaller businesses — even those with traditional key analog systems — to easily and affordably migrate to VoIP calling plans,” commented AT&T’s vice president of business marketing, John Regan.

Telecom Argentina Profits Strengthened by Wireless

Argentina’s second-largest telephone company, Telecom Argentina SA, posted a huge increase in second-quarter profit, after selling its phone book business and adding more wireless subscribers.

Net income almost tripled to 252 million pesos ($80 million), compared to just 96 million pesos in the same period a year earlier. Quarterly revenue was up 23% to 2.1 billion pesos.

Ongoing expansion in Argentina’s economy has fueled massive growth in the country’s mobile phone sector in the past few years. Approximately 82% of Argentinians now own at least one cell phone, compared to just 53% a year ago, according to Tllaria Ledesma y Cia analyst, Guido Bizzozero.

“Telecom Argentina not only increased its subscriber base, but customers are also using their telephones more,” Bizzozero explained in a telephone interview before the Buenos Aires-based company’s results were released.

Telecom Argentina’s shares closed down 3.7% on the Buenos Aires stock exchange Thursday, but has gained 71% in the past year, compared with a 28% gain in the benchmark Merval stock index.

CVT Prepaid Solutions Settles Lawsuit with IDT

In a private settlement reached this week, CVT Prepaid Solutions, the most outspoken company against this lawsuit, surprisingly agreed to adhere to the “true minute” program that IDT is pushing. While no details of the settlement were revealed, it is estimated that CVT will join Locus, Dollar Phone, Epana and others who have already agreed in principal to follow ethical marketing practices and promising to deliver actual advertised minutes.

Virgin Mobile USA Faces Class Action Lawsuit

Having just gone public in October of this year, Virgin Mobile USA now faces a class action lawsuit from many of it’s shareholders who are extremely disappointed with the poor performance of the stock. The lawsuit alleges that Virgin Mobile USA withheld many actual losses prior to it’s IPO and as a result mislead investors into believing the stock was worth more than it actually should have been.

The stock, when first made public in October, was trading at around $15 and now less than two months later it is trading at almost half of it’s original value, last trading at $7.28.

Unfortunately this seems to be a trend with many telecommunications companies in recent years, going out high and quickly falling. Vonage went through the same trend when it came out last year. Hopefully this is not an omen for the industry as a whole!

International Calling Destinations on US Phone Cards

While not the most up to date information (the numbers are from 2004), the following data still remains fairly indicative of the current market:

Breakdown by Continent:

• North and Central America = 30% (this has no doubt decreased since 04)
• South America = 19% (this has no doubt increased since 04)
• Western Europe = 13%
• Asia = 10%
• Eastern Europe = 7%
• Caribbean = 6%
• Africa = 6%
• Other = 9%

Breakdown Of Minutes Made Using US Calling Cards by Country:

• Mexico 2,033.3 million minutes
• Canada 948.9 million minutes
• Columbia 801.3 million minutes
• Brazil 629.6 million minutes
• UK 489.5 million minutes
• Dominican Republic 489.0 million minutes
• El Salvador 406.7 million minutes
• Guatemala 361.5 million minutes
• India 331.4 million minutes
• Germany 293.7 million minutes