Joost Signs Off

Joost, the online video service that preceded Hulu but has since been overshadowed by it, has announced it is shifting priorities away from serving online video to consumers, to serve cable operators and other media companies with their own ready-made online video platforms instead.

Joost’s failure comes as a result of the difficult advertising marketplace.  Like Hulu, and many other ad-supported websites, the ongoing recession has made it difficult to attract advertisers to support the costs of licensing and distributing television shows and movies.  As a result, the company today announced it would be refocusing itself on selling its services to other media providers.  Joost tried to market itself to cable companies earlier this year, reportedly talking with Time Warner about buying out the service.  But no deals were forthcoming, and the financial picture at Joost appeared bleak.

Joost still will maintain its website with some of the content it continues to hold licensing agreements to stream to viewers.  But once those agreements expire, the future of the site itself becomes an open question.

In simplified terms, Joost plans to sell a ready-to-run video platform to any media company that wants to deliver online video to customers, subscribers, or the public.  The media company simply has to customize its website’s look, and Joost’s streaming technology will run underneath it.  Joost already uses copy protection and authentication technology to “pre-authorize” viewers to permit them to access content based on their Internet address and location (licensing agreements often are for individual countries only, not worldwide), so their platform is already capable of restricting access to authorized viewers only.

Joost was the brainchild of Niklas Zennström and Janus Friis, the duo that also founded the music swapping service Kazaa and the popular Skype calling service.  All three services originally relied on a peer-to-peer distribution platform, which meant while you swapped music on Kazaa, make phone calls on Skype, or watch videos on Joost, the software quietly shared some of your bandwidth with other users to help transport music, phone calls, or video.  Joost required users to download a software application to access the service, something that proved unpopular with the Internet masses.  Hulu soon appeared and allowed people to watch video right from their browsers and quickly overran Joost in popularity.

By the time Joost came up with their own browser-based service, dumping the peer-to-peer distribution model, it was too late.  Most major networks and content producers had already signed their allegiance to Hulu, and Joost’s content selection stayed largely stagnant.  At one point, Joost tried to bring in user-created content and short form video, but most viewers weren’t interested.

It’s the second failure among online video services this month.  Microsoft announced in mid-June it was “scaling back” Soapbox, its attempt to rival YouTube with user-generated video content.  Soapbox had actually been around since 2006, but was often used to post copyrighted video content hassled off of YouTube.  By 2007, Microsoft stopped accepting new users until it got copyright violations under control, but by the time it returned, nobody outside of Microsoft’s Redmond, Washington campus cared.  The service now primarily exists to host Microsoft-generated video content.

Verizon is concerned about potential risks for data hacking and security breaches associated with mergers and acquisitions in undertakes.  The Verizon Business Risk Team reported that 13% of the breaches studied in 2008 involved companies undergoing transition as part of a merger or acquisition.

Verizon signaled caution to prospective Frontier Communications territories about to be spun away from Verizon:

“Mergers and acquisitions bring together not only the people and products of once separate organizations, but their technology environments as well. Integration rarely happens overnight or without a hitch.”

TheDeal.com writes Verizon has the experience to understand the risks, as both a buyer and seller.

Verizon’s selling of its operations in New England to FairPoint Communications was particularly noted, because of ongoing billing, customer care, and other transition problems, some of which are still unresolved to this day.

Charter Communications is going to have some major competition in the Massachusetts city of Groton over the next year as city officials signed a 15-year franchise agreement with Verizon Communications to bring the fiber-to-the-home service to area residents.

Verizon promised to introduce FiOS service to area residents immediately, with a build out to nearby communities taking place over a four year period.  The deal brings competitive choice to Groton, which until now has relied exclusively on Charter Cable for cable television service.

Verizon agreed to spend $112,500 to outfit four locations with broadcast equipment and provide three public access channels.  Equipment will be installed at the Town Hall for local government coverage, the local public library, the middle school Performing Arts Center and a nearby senior center.  The franchise fee will be 4.2% of local earnings and a 50 cent fee per subscriber per year, all paid to Groton’s local government.

The loudest complaint came from one resident who wanted to know why service might not be immediately available on his street.  He told local officials Charter had the “worst service” on his street and wanted the Verizon alternative immediately.

While residential customers face the threat of Internet Overcharging schemes designed to ration their use of the Internet with excessive pricing combined with usage limits, business customers are finding the opposite:  providers rolling out several new innovative services designed to control costs and increase broadband flexibility.

Verizon Business‘ Ethernet Virtual Private Line Service customers, who enjoy enormously fast speeds over a fiber-based network, will now have the ability to customize their bandwidth on-demand, through an online control panel.

Verizon EVPL Dynamic Bandwidth enables customers to raise or lower their broadband speeds as needed, and pay for their broadband service based on the speed they select.  The service is designed to maximize savings for businesses that have a periodic need for higher bandwidth, but don’t feel justified paying for a higher tier of service that will go unused at other times.  A customer accesses an online control panel, reviews pricing for different levels of speed, and then selects the option that best meets their needs.

Customers can raise or lower both the upload and download speeds once every 24 hours.  The requested capacity is provided within 60 minutes, and the control panel lets customers schedule bandwidth needs in advance.

The Dynamic Bandwidth service supports speeds between 1Mbps all the way up to 1000Mbps, depending on available facilities in your area.

“There is an insatiable hunger for bandwidth as technologies such as video transmission become more widely adopted by enterprises,” said Blair Crump, worldwide president of sales with Verizon Business.  “Our self-service dynamic bandwidth capability allows our EVPL and Private IP customers to make the most of their networks, at their convenience.”

David Hold, senior analyst, network services with Current Analysis, said: “Verizon Business is delivering a unique value proposition to the Ethernet services market with their new dynamic bandwidth capability.  With the proliferation of sophisticated, bandwidth-intensive applications, most organizations are demanding greater network capacity, and this new capability will help customers improve their return on investment in EVPL by only paying for greater speed when needed.”

Speed-based tiered pricing is familiar to consumers, and does not raise the same level of concern that consumption-based billing schemes do.  It is based on the premise that those heavy users of broadband will naturally gravitate towards higher speed, more expensive tiers of service to enjoy faster speeds.  The provider’s premium pricing also guarantees premium profits.

While residential customers bear the brunt of Internet Overcharging experiments based on data consumption, most business-class customers curiously escape such limits and fees.  Indeed, if the rationale for such pricing is based on demands placed on the network infrastructure, business customers, who face pricing commensurate with their anticipated higher usage, should be the natural first candidates for experimentation, not the ones exempted from it.

Verizon Business’ new speed based tiering demonstrates that there is money to be made providing customers with their choice of speed, without alienating them with unwarranted usage limits and the penalties and fees that follow those who exceed them.

Sunflower Broadband Pricing - Note a $10/month surcharge applies for customers not subscribing to Sunflower's video package.

We’ve covered the story of Sunflower Broadband before here on Stop the Cap! This dubious provider has become well entrenched with its Internet Overcharging schemes in and around the Lawrence, Kansas region, charging top dollar pricing while imposing ridiculous limits on usage.  One Mac owner in the Lawrence area is fed up with Sunflower’s 3GB monthly usage limit for broadband users, charging a ludicrous $27.95 a month for standalone broadband service (that’s $9.32/GB!).  He’s calling on Apple Corporation to get involved in the opposition to price gouging and Internet Overcharging by providers like Sunflower.

Sunflower’s a big proponent of these pricing schemes.  Patrick Knorr, who works for Sunflower and is also ex-officio chair of American Cable Association, wants this kind of pricing for everyone.  No matter how much you consume, you are probably paying too little for your broadband account.  Sunflower’s pricing of its most deluxe Gold plan assumes you’ll never use more than 50GB per month, and for that charges customers $59.95 a month if all you want is broadband service.

Dave Greenbaum, writing for theAppleBlog, considers these kinds of limits to be abusive.

Apple is the leader in multimedia content creation; new Mac users are always pleasantly surprised by how easy it is to buy from the iTunes store, or create their own content. A common question we get in our local user group is “I’m not sure what I did wrong, but all of a sudden I have a substantial overage bill from my cable company.” Of course, the user did nothing wrong, other than subscribe to a few podcasts, and perhaps download a new Apple software update and buy some shows with iTunes! The Mac is also blessed with great online backup services like MobileMe, yet when our user group did a presentation on backup strategy, I had to warn novice users to be careful lest their backups end up costing them an arm and a leg in bandwidth overage fees!

Sunflower Broadband claims, with absolutely no independent verification, that nearly 50% of their customers consume less than ONE gigabyte per month and 98.9% of users had less than 40GB of bandwidth usage.  Of course, despite updates to its website, it curiously only provides statistics from April 2007, more than two years ago.

Greenbaum informs readers of Rep. Eric Massa’s proposed legislation, HR 2902, the Broadband Internet Fairness Act.

Ultimately, without an end to abusive broadband pricing, the implications for consumers go well beyond their own pocketbook:

Unfortunately, using the Internet normally with bandwidth metering is also unsustainable. When Mac owners are worried about downloading movies, doing backups or performing system updates, that hurts the Apple brand. Apple is continually innovating new ways to make the Mac OS the best Internet operating system, creating a whole ecosystem with iTunes, MobileMe and iLife. All of these great products rely on the ubiquity of the Internet. When Internet providers start making normal Internet use an expensive proposition, Mac users lose.

Apple should lead the way and come out against bandwidth caps. Given that many of the offerings on the iTunes store actually compete with cable TV, Apple should be vigilant that cable companies do not use bandwidth metering as a way to stifle alternative ways of viewing content.

Summer in western New York has been usage capped.

As alleged summer continues here in endlessly rainy and dreary western New York, and our basement suffers from the trickling of water ingress from the never-ending rains, I’ve had plenty of indoor time as of late, pondering various issues and strategies.

I wanted to bring everyone some updates on where we have been, where we are, and where we are going (in part to take care of some questions which I receive regularly from readers):

ISP Subscriber Agreement Change Notification Tracker

In private beta at the moment, this system is nearly ready for its first testing phase.  We’ll be running a special website that will track any changes to ISP Subscriber Agreements, terms of service, or Acceptable Use Policies, and automatically notify those who wish to subscribe to the updates.  We’ll also be calling out major changes right here on Stop the Cap! This has proven necessary because ISPs are not always consistent about informing their customers about changes to these agreements, and many others do not timestamp the date of changes.  We will, along with a representation of what exactly has changed.  When the test goes public, we’ll have a form up to allow readers to inform us about any ISP’s you would like us to track.

Rep. Massa’s Bill: The Special Interests Want Revenge!

As we suspected, Rep. Eric Massa has been targeted for takedown come the next election in 2010.  In fact, his opponents are going to make his district a hot target, with a ton of special interest money and outsider cash flooding in to force him out of office.  We cannot allow this to happen.  If he has our back, we have to have his, and we’ll be calling on everyone to help do what it takes to keep Congressman Massa right where he is — doing the business of the people, not the special interest telecommunications lobbies.  I will be putting up a contribution link this week for his re-election campaign and putting some of my money where my mouth is, and I hope anyone concerned with the Internet Overcharging issue will do the same.  We need to get started early and stick with him all of the way.

Naughty Phone Companies Need Their Own Special Site

I’ve heard from just about everyone on the issue of FairPoint, and our 13-part series on the nightmare that never seems to end for people in New England who are stuck with this god awful phone company.  Even regulators are dropping e-mail my way, some in other states facing the prospect of Verizon pulling out of their communities as well.  Everyone wants to know what happened, what’s being done to really fix it, and how they can prevent this from ever happening again.

Because this issue starts to diverge away from the mission of Stop the Cap!, a new pro-consumer website is forthcoming that will be the home for news and information about telephone companies behaving badly on pricing, service, and viability.  We’ll still bring all of the news that relates to Internet/broadband issues here, but some of the other deeper issues will work better on a different site.  Stay tuned for more details.

Not every phone company is evil, and some do a fine job for their customers.  But the days of rubber-stamped business deals that leave consumers out in the cold need to come to an end.

My Personal Ramblings

You will also find an eclectic mix of stories, opinion, and rantings about the telecommunications industry, the media, politics, and life in the Flower City on my personal blog.  It’s become more active as a place where I can cover stories and issues that won’t fit anywhere else, and allows people to figure out where I’m coming from on an entire range of issues.  It will look familiar to readers here, as it has the same basic look.

Tweets, Twitter & The Social Networking Thing

Stop the Cap! Official Twitter Channel

Phillip Dampier’s Personal Twitter Channel

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Helping to spur additional competition, AT&T announced the availability of its U-verse service in parts of Corpus Christi, Texas and the communities of Springfield, Champaign, Danville and Decatur, all in central Illinois.

“Today’s launch of AT&T U-Verse reflects our commitment to make the investments necessary to bring consumers across central Illinois a new era of true video competition,” AT&T Illinois president Paul La Schiazza said in a statement.

In Illinois, dissatisfied Comcast customers were tearing up one of the local newspaper’s message boards.  Here’s a sampling:

• Now maybe Comcast will get better service and lower their OUTRAGEOUS prices.
• Comcast: Can you hear the sound of competition and angry customers? Can’t wait to get a cable carrier that actually plays all of the available Cardinals’ games.
• Will they have it in Chatham? I will be ready to sign up to get rid of Comcast! What parts of Springfield will get U-Verse, and what parts will be left out in Comcast’s cold?
• I can’t wait to get rid of Commiecast.

Troy Wolverton had a problem.  He wanted to send 170 pictures to Kodak to arrange to have them printed in time for Father’s Day.  It turned out to be a true labor of love, as he waited hours to send the 800 megabytes of imagery to Kodak’s online processor.

Troy Wolverton writes tech news for the Mercury News in California

As more than three hours passed, Wolverton began to ponder why the upload seemed some poky.  He subscribes to Earthlink, which supplied him with a 3Mbps connection.  Assuming that speed was available for both uploading and downloading, it would have taken less than an hour to get the job done.  But as virtually every customer of an Internet service provider finds, your download speed is many times faster than your upload speed.  In this case, Wolverton was suffering with a 384kbps upload speed to get those photos to Kodak.

In fact, while download speeds have been increasing at a steady clip, many have discovered upload speeds have barely budged, if at all, since broadband service became available in their area, often more than a decade ago.  Rochester, New York is one such example.  Time Warner Cable’s Road Runner service was introduced officially in 1998 with a download speed of around 5Mbps, but the upload was just 384kbps.  Today, standard Road Runner service provides 10Mbps for downloads, but the upload speed has remain unchanged, despite more than a decade having passed.

Networks were originally designed to provide more speed for downloading, and less for uploading, based on the presumption subscribers would take more than they “gave” to the Internet.  That remains essentially true today, but subscribers are increasingly relying on their upload connection to send pictures, movie clips, and other larger files to their friends, family, or work.

But broadband companies seem oblivious to this trend. If you look at the plans offered by the Bay Area’s two main providers, Comcast and AT&T, it’s all but impossible to find one in which the upload speed comes anywhere close to the download speed. To get an upload speed that’s faster than a slow download rate, you have to subscribe to one of the pricier plans, like Comcast’s Extreme 50, which gives you a 10 megabit per second upload connect — at a cost of $100 a month.

Comcast and AT&T officials say they are watching consumer Internet usage trends. They note that as their companies have ramped up download speeds, they’ve tended to increase upload speeds as well and will continue to do so. The download and upload speeds they offer are simply a response to market demand, they say, claiming that the vast majority of their customers still download far more data than they upload.

“We’re designing our products based on how we see consumers using them,” John Britton, an AT&T spokesman, told me.

Wolverton thinks the lack of competition also has a lot to do with it.

In terms of Internet access providers, the Bay Area essentially has a duopoly. There are numerous small players such as EarthLink, but Comcast and AT&T dominate — and duopolies tend to not have a good read on real market demand. People often buy one of their products because they don’t have any other choices — not because they meet their needs.

In other words, if the market were more competitive, a company might be able to build a successful business by catering to people who want faster upload speeds.

Just because consumers use their connections to download more data than they upload isn’t proof that they don’t want to upload more. The slow speeds could well discourage folks from doing more uploading. And they may well find a use for faster upload speeds — if they had them.

I’d love to be able to back up the videos, songs and documents on my computer to a server on the Internet. But with my slow upload connection, that’s not really an option because it would take days of uninterrupted uploading to back up any significant portion of my hard drive.

AT&T Rate Increases Coming

AT&T is jacking up phone rates for residents of Alabama, one year after state officials deregulated the Alabama telephone service marketplace based on the premise that competition would bring about lower rates for consumers, not higher.

Darrell Baker, director of the Alabama Public Service Commission’s telecommunications division, said telephone companies heavily promoted the price deregulation plan by claiming competition would keep rates down.  An industry-friendly deregulation bill was passed in 2005 over PSC objections, and another bill the Alabama Legislature passed this spring expanded deregulation further.

Alabama residents will now pay for that free-market construct in a state with limited local line competition.

AT&T spokesman Hood Harris said customers with Basic Service, a single-line home phone, will see their bill rise 3 percent, from $16.95 per month to $17.45.  Approximately 15 percent of AT&T’s Alabama customers have basic service.

Customers with AT&T’s deluxe plan, the Residence Complete Choice Package, will see an increase of 9.5 percent, from $21 per month to $23.

Harris blamed the increases on inflationary costs.

Baker was unimpressed with the rate increase announcement.  “It doesn’t sound like the competitive market is having much impact,” he said.  Baker expects other telephone companies in the state to quickly follow suit.

AT&T increased rates in 2008 by 4.1%.

No Myth: AT&T Huge Wireless Data Bills

In between the wall-to-wall coverage of the passing of Michael Jackson last week, Stop the Cap! reader Lou discovered Twitter was all-a-tweet about yet another person who got stuck with an enormous mobile data bill from AT&T Mobility.  This time it was Mythbusters’ Adam Savage, who spent five days in Montreal and discovered the most expensive part of the trip was the $11,000 bill from AT&T.

The story here isn’t really about AT&T’s math, or the remarkably expensive Canadian data roaming rate of $0.015 per kilobyte, it’s the fact AT&T will let your bill run into the ionosphere before alerting you, or giving you the option to automatically shut yourself off before you go over a plan limit.

Savage’s tweet to his 50,000 followers all but guaranteed a rapid response (and credit) from AT&T for the $11,000 in fees charged to his account (and they turned his phone back on.)  Unfortunately, company policies remain unchanged, leaving those who encounter similar kinds of overlimit fees who don’t have tens of thousands of followers on Twitter, stuck paying those bills or begging for credit.

AT&T should automatically notify any customer entering into a roaming area with a text message explaining the rates and fees charged when inside that roaming area.  Customers should have the right to choose a setting for their account that best meets their needs:

1. No roaming access/No overlimit fees: This would suspend service on your phone automatically until you contacted AT&T to remove it at your request;
2. No Overcharges: This would turn your service off when your plan limit is reached, requiring the customer to opt-in to any overlimit fees;
3. Free and Open: The current standard — roaming and overlimit rates apply automatically.

AT&T claims it will send a text message and/or contact customers who substantially exceed their normal usage, but there has been scant evidence that policy is applied uniformly.  Customers should have the right to make their own choices about their wireless usage, and the responsibility to select an option that best protects them from the heart attack in the mail, a/k/a the bill.