Viacom and DirecTV Eventually Will Settle; Will Consumers Win?

The contract dispute between DirecTV and Viacom that has at least temporarily yanked Viacom content from DirecTV customers will be solved, eventually. What isn't so clear is whether customers will win. Viacom wants to be paid more; DirecTV wants to pay less. Any eventual settlement will result in DirecTV paying more than at present, though not as much as Viacom wants.

But prices will rise. And that means consumer retail prices will rise, as well. And that is the strategic problem TV distributors have been able to resolve. Programmers understandably want to be paid more. But those desires are meeting a growing wall of opposition from consumers, some of whom just don't want the product at all, and others who want only some of the programming.

To be sure, TV distributors are trying to change the "value" part of the value-price equation by adding additional viewing options on PCs, tablets and smart phones. But "price," in an absolute sense, is becoming a bigger problem every year.

One potential solution is for distributors to pay lower fees, one way or the other, either by offering fewer channels, or paying networks less. The former is more likely than the latter, though.

That is why the preferred network practice of requiring distributors to take a "bundle" of channels, rather than allowing distributors to buy single channels, is a key issue. As consumers indicate they want a la carte options, so do video distributors want a la carte.

No matter how the contracts eventually are structured, consumers will "lose," to the extent that prices will climb, as DirecTV is unlikely to want to do without the Viacom networks forever, and will wind up paying more to Viacom for the right to carry the channels.

It always is possible that this particular set of negotiations is the one that will break the recent industry practices by starting to unravel the way networks get carriage on the distribution networks. Someday it will happen. Whether it happens here, or not, is the issue.

Will AT&T Charge Users of FaceTime?

AT&T appears to be testing a method to charge Apple FaceTime users when they use mobile network bandwidth, 9to5mac.com reports. There is no charge when users are on Wi-Fi networks.

Of course, in some cases that will add value for end users. Nor, it should be noted, is such charging a formal violation of existing network neutrality rules, which apply only to fixed network broadband access.

What Mobile Service Providers Can, and Have Done, To Protect Voice and Messaging Revenues

For many years and in many countries, SMS has been an excellent source of revenue for mobile operators, often generating almost 20 percent of revenue, according to Strand Consult. But those days are almost over, many would suggest. The question is whether there is anything at all that  mobile service providers can do about the situation.

In part, the answer always is to find another new revenue source to replace a source that is in decline. The other, short term answer is to try and shore up the value of the endangered product, or change the way the product is packaged and priced. Service providers will probably try to accomplish both tasks: finding replacement sources for the long term and shoring up the value proposition in the short term.

Data Tsunami Could Wipe Out All Telco Profits

Telecom service provider “costs per gigabyte must decrease by 90 percent every three to four years” just to keep service provider revenues and costs in the same relationship as they are now, according to Norman Fekrat, IBM Global Business Services partner and VP. That illustrates the magnitude of changes many believe must be made in the global telecom business.

And the bad news, says Fekrat, is that, at the moment, service provider costs are “increasing when it needs to decrease.”

“The cost structures need to be reduced significantly,” not incrementally, he says.

Whether DirecTV or Viacom Can "Win" in the Long Term is the Real Issue

You can take your pick about which partner--DirecTV or Viacom--has more leverage in the programming dispute that has taken all the Viacom channels off DirecTV, at least temporarily.

Some might argue it is a mistake for DirecTV to risk consumer irritation when some popular channels “go dark,” the theory being that it is the programming people pay for, so one distributor risks losing customers, eventually, should a major network such as Viacom be dropped on a permanent basis.

Some might argue that no matter the outcome, the whole video ecosystem is becoming unworkable. That, at least, was what Robert Johnson, founder of the BET cable channel, recently warned.

EC Makes Major Regulatory Shift

In a significant “u turn,” telecom commissioner Neelie Kroes seemingly has backed off a plan to increase the discounts offered to third parties who buy wholesale access from incumbent European Union service providers.

That is at least mildly surprising for a few reasons. At least historically, European Commission countries have favored robust wholesale leasing policies, at least in part because, unlike the situation in North America, where two facilities-based broadband access networks exist in most markets, it was expected that only the incumbent network would be widely available.

In order to reach the EU's Digital Agenda goal of at least half of EU residents able to access broadband at 100Mbps or more by 2020, the EC has been looking at how the regulatory environment can support and stimulate investment in next-generation networks.

Global Telecom Industry Has Made a Historic Leap in Serving People in Developing Regions

A high-level study sponsored by Alcatel-Lucent and conducted by the ENPC (Ecole des Ponts ParisTech) illustrates an important and historic change in global communications, especially the decades-long effort to figure out how to provide communications to billions of human beings who had not previously “made a phone call,” much less “used the Internet.”

In recent years, the concern has shifted dramatically to mobile service for the “next billion” people, or Internet for the next billion people, where in the 1960s and 1970s the issue was providing “phone service” to the “next billion” users in developing countries.

What has gone somewhat unnoticed is the truly stunning progress, globally, in getting communications services to users in developing regions, where once policy makers struggled to anticipate how that could be done with legacy technology, namely fixed networks.

Without too much fanfare, the answers have emerged organically from use of mobile and Internet technologies.