In Select Markets, Comcast Doubles 25 Mbps, 50 Mbps Access Services, Bumps 105 Mpbs Services to 150 Mbps

Comcast has doubled Internet access speeds that it has increased Internet speeds for customers in almost all of its residential service areas in California, as well as select markets in Kansas, Missouri and Texas.

Comcast has increased the speeds of three Xfinity Internet tiers: "Performance" now offers speeds up to 50 Mbps, up from 25 Mbps; "Blast" is now 105 Mbps, up from 50 Mbps; and "Extreme 105" has been bumped to 150 Mbps. The changes impact all California customers (except those in Santa Cruz, Scotts Valley, Isleton, Lodi and Rio Vista), as well as those in the Olathe, Kan., Independence, Mo., and Houston, Texas markets.

Those speed boosts will be provided at no charge for Comcast customers, and are a response to increased competition from Google Fiber.

The change in retail packaging is not surprising, Once Google Fiber reset expectations about what $70 a month buys, it became inevitable that all other Internet service providers competing against Google Fiber, or any other ISP offering a gigabit access for about $70 to $80 a month, other offers would have to be adjusted.

Overstetched Analogies Now Threaten Net Neutrality Arguments

There is a growing danger that network neutrality supporters are going too far in creating analogies to the "treat all apps equally" position. 

For starters, the analogy is being applied on a broader basis in ways that probably are not helpful. Network neutrality, over time, as swept up so many concepts that it is in danger of becoming "anti-consumer" in its application, the opposite of what its supporters intended.

For example, the extension of the concept to sponsored apps, where mobile consumers in many developing nations get access to social media apps such as Facebook, without having to buy a data plan, now is cited as a violation of network neutrality. If so, some of us would say, go ahead and violate at will, because people like and benefit from the practice.

Likewise, there now is an argument, advanced in support of net neutrality concepts, that sees danger in managment of the flow of electricity under conditions of high load. That also is a potential overstep.

Electrical utilities already know what they must do when demand exceeds supply. They cut off access to some, as required, to preserve the integrity of the grid as a whole. That is called a brownout, a planned and rolling disruption of power supply under extreme conditions, to preserve the functioining of the electrical grid as a whole. 

The point is that denying all access, not just to some apps, sometimes is a step a utility supplier must take, under extreme load. Telcos have done the same. When voice circuits became overloaded because of holiday calling, for example, users were denied admission to the network and got a message instructing them that "all circuits are busy now, please try your call later."

Networks have to be managed under conditions of high load. There is an intellectual trap network neutrality supporters are in danger of falling into, namely overplaying the analogy in too many settings, to the point where the value of the original premise is damaged.

Yes, sometimes the flow of electrons to your house could be throttled or blocked, for entirely understandable reasons. Sometimes that is done with your permission, as when you allow temporary shutdown of your air conditioning, in the summer, to help your energy supplier manage load. 

Either way, network managment is valuable and necessary. Allowing the whole network to go down isn't so smart. That's one value of smart grids. 

Blocking or throttling sometimes might be necessary, under conditions of high load. That is different from blocking specific competitive and lawful apps. That is an antitrust issue, though. 

Zero Rating: Does Consumer Benefit Outweigh Impact on Supplier Revenue Model?

But many oppose the notion of subsidized use of apps, including zero rating, which allows use of some apps without the purchase of a data plan. That has proven quite popular with consumers in many parts of the developing world. 



But some say zero rating is unfair to app providers, as it "turns the Internet into cable TV." It sometimes is hard to know what to make of such arguments. 



Every app and service must have a viable revenue model to survive, even assuming there is clear value for end users. Content services, such as cable TV, subscription radio, streaming video services, subscription websites, magazines, newspapers, 



And the Internet arguably is chaniging. Many of the new apps are content related. And content businesses have a few reliable revenue models, including subscriptions, advertising and sponsorship. 



The argument against zero rating essentially is that any app provider should not have the right to choose a sponsorship model for business reasons of its own, just as it might choose a commerce, advertising or end user fee revenue model.



Some think that is a form of application blocking.



The problem these days is that nearly every dispute between Internet domain providers, content providers and access providers, mobile app store owners and app suppliers is viewed as some form of "application blocking." 



How about viewing zero rating as a consumer-friendly choice with direct benefits for consumers who get to use valuable apps at lower cost than otherwide would be possible? 



For millions of consumers in the developing world, zero rating is anything but a problem. 

Google Disappers as Part of Microsoft Update

If you own a Windows Phone 8.1 device, once you install the GDR1 update, the new software update removes all search options except for Bing, according to documentation for the update.

For all the attention paid to Internet services providers "not treating all apps equally," how about app providers and operating system providers? Facebook has blocked rival apps, for example.

Nor are the ISPs, necessarily bigger financial actors than app providers, and therefore a bigger threat to use of lawfual apps or exercise of market power.

AT&T’s market capitalization now is about $184.8 billion to Facebook’s $188.9 billion.

There always are gatekeepers in communications, content and information businesses, retailing, transportation and logistics, to name only a few industries. But relative ability to act as a gatekeeper changes over time.

For decades, executives debated whether "content or distribution was king." Depending on the decade, the answers have varied, sometimes favoring distributors and sometimes content providers. 

These days, new actors have appeared. 

In fact, some would argue, the new gatekeepers are the platform owners — companies like Apple, Google, Twitter, Facebook, Amazon, and even Spotify, the companies that shape information availability and access. 

One might note that European Union antitrust officials have been investigating and challenging both Microsoft and Google for years. 

One doesn't have to agree with many of these complaints or actions to observe, empirically, that gatekeepers in any market can, and do exist. But the key gatekeepers can change over time. 

What Next in T-Mobile US Effort to Gain Scale?

Deutsche Telekom reportedly does not consider Illiad’s bid to buy a majority stake in T-Mobile US to be a reasonable alternative to a purchase by Sprint. What happens next is key.

Illiad is considered a long shot bidder, even if T-Mobile US parent Deutsche Telekom benefits from a bidding war for T-Mobile US.

If you assume Illiad will have to find some other bid package that does rise to the level of serious competition for T-Mobile US, then a financially strong partner would have to be enticed to bid with Illiad.

It probably would not be Carlos Slim, the Mexican telecom magnate on the lookout for expansion opportunities. Slim has said the U.S. market requires too much capital, and Slim's friendship with AT&T CEO Randall Stephenson likely is an issue as well.

It won’t be Comcast, which is otherwise occupied by its effort to buy Time Warner Cable. Having recently exited the U.S market, Vodafone, which as the cash, likely does not have the interest.

Deutsche Telekom wants to exit the U.S. market as well, and Orange would not likely want to partner with its fiercest rival in the French market.

Some other U.S. firms likely have the resources, but not the immediate appetite. It is easy to toss around the names of firms such as Google, Microsoft or Apple, all of whom have handset and device interests in the U.S market,

The problem is constructing a value proposition that makes sense. All of those firms arleady could buy wholesale access if they wanted to run branded mobile Internet access operations of some sort. They wouldn’t need to own stakes in one of the underlying providers to achieve that goal.

Still, with T-Mobile US in play, some other combination of bidders could emerge. The investment bankers would like that. So would Deutsche Telekom.

Will Microsoft Cloud Revenues Pass Amazon Web Services Revenue?

Microsoft and IBM lead revenue growth in cloud infrastructure services, according to Synergy Research Group.

Amazon Web Services was in the second quarter 2014 still the largest single provider, but Microsoft has a blistering 164 percent revenue growth rate.

At such rates, if Microsoft can sustain it, Microsoft inevitably will pass AWS in cloud computing market share, as AWS is growing at perhaps a 49 percent rate.

Synergy Research estimates that quarterly cloud infrastructure service revenues (including infrastructure, platform, private and hybrid cloud) have reached $3.7 billion, with trailing twelve-month revenues comfortably exceeding $13 billion.

That figure excludes the value of software-driven cloud revenues, typically the largest single category of cloud services.

With the total market growing at over 45 percent, Microsoft and IBM have gained market share over the last four quarters while the share of AWS and Google is essentially unchanged from a year ago.

Total Amazon AWS revenues are now well in excess of $1 billion per quarter, with nearly all of that coming from cloud infrastructure services, Synergy Research estimates.

IBM and Microsoft also both claim quarterly cloud revenues of around $1 billion, but in their cases much of the cloud revenue comes from software, cloud-related hardware products or associated professional and technical services.

Financial Implications of 30% Market Share and Triple Play

Municipally-owned U.S. access or telecommunication networks always have been contentious, for obvious reasons: these are instances where tax-supported non-profit institutions compete with private firms.

Between 2001 and 2011, the number of such municipal telecommunications initiatives grew from about nine to 108, an order of magnitude expansion in a decade.

Supporters might simply argue that “non-profits” compete with “for-profits” all the time. Museums, hospitals, gas, water and electrical utilities provide examples. Opponents say it is unfair for tax-advantaged entities to compete directly with non-subsidized entities.

The issue is “live” again since Federal Communications Commission Chairman Thomas Wheeler has promised he would stimulate more broadband competition by overriding state laws that presently restrict or ban municipal broadband networks.

The issue remains unsettled, though. Some believe the FCC has no authority to do so, and others think Congress could bar the FCC from taking such action.

The historical record is mixed: some efforts have succeeded, while others have failed. Even those which have succeeded can leave big debt burdens for taxpayers.

Ignoring the policy issues, the level of risk for gigabit networks has grown, as the risk for fixed networks of all types--private or public--has grown.

There are several reasons. Structurally, markets with multiple competitors inherently mean the cost per customer grows dramatically, increasing risk.

Networks that are built with an expectation of 80 percent to 100 percent customer adoption rates have far lower stranded asset problems than networks where a reasonable assumption is that maximum adoption rates will be in the 30-percent range.

Basically, costs per paying customer are about three times higher in the 30-percent scenario, than in the 100-percent business case. That risk is the same whether the provider is a cable company or telco, a municipal broadband or an upstart ISP, especially if a network must reach all potential customers in a municipality.

Risk is mitigated if suppliers are able to “spot build” only where there is higher demand. That, for example, is why many competitive local exchange carrier operations can survive: they target clusters of business customers, and do not aim for ubiquity.

The triple-play (voice, video entertainment and high speed access) is important for marketing reasons. It also is important for financial reasons. Without the ability to sell three products to a customer, a service provider with 30 percent household adoption would be in grave danger of failure. At 33 percent household adoption, and three products to sell each customer, a service provider mimics the financial results one would expect of a 100-percent take rate for one service.

        source: National Taxpayers Union

source: National Taxpayers Union

  source: Internet Innovation Alliance