Net Neutrality Friday

This week had a couple pieces of news of interest. First, AT&T closed its deal with DirectTV. This is of interest from a video standpoint. AT&T bought a significant number of Video Customers outside its core territory. On top of that, DirectTV can be bundled with DSL in rural areas of AT&T to provide triple play services. I think it is also a hedge against a network upgrade to Fiber To The Home (FTTH). In most homes, video and video streaming takes up a huge portion of the bandwidth that a consumer uses. If you can get them moved over to Satellite, then U-verse moves from being a 25 Mb/s shared between video and data to a 25 Mb/s data service. This could be viewed as a network upgrade for consumers as they no longer have to share their bandwidth. This whole activity gives AT&T a huge leg up in the video distribution business. The challenge is that video distribution is a not a high gross margin business. What we have yet to see from AT&T is any move into the content side of the business. Verizon bought AOL for its advertising network, which is at least the way to monetize content. I suspect AT&T is not done buying assets because of that.

Second, there are upcoming changes to the Re-transmission Rules. These rules are around the rights and rules for carrying local broadcast stations on Cable Systems and other Multi-Channel Video Programming Distributors (MVPDs). As you recall, these are the rules that got Aereo put out of business earlier this year. Many governments require that local MPVDs carry local television broadcasts. There is a need to negotiate a price that the MPVD pays for this privilege. Essentially the local TV station gets paid for the delivery of the content that it provides for free Over The Air (OTA). If you go back 30 years, there were TV antennas everywhere on rooftops. Now they are extremely rare to see. That is because most people get their local TV broadcasts from their MVPD. This has been an awesome deal for local TV stations as they got a bunch of money for not doing anything new. Expect a lot of back and forth through the law and regulatory process. The FCC is starting an Notice of Proposed Rule Making (NPRM) on this topic. If you remember it was an NPRM that caused the whole "Fast Lane" controversy. Stay tuned for lawyers to make a lot of money!

Finally, there was an announcement around Software Defined Networks (SDN) by AT&T. AT&T announced that its "Network On-Demand" Carrier Ethernet Service has cut provisioning times by 95%. This is an interesting case study on how automation around SDN might save a lot of time for specific services. In the old days, Flow Through Provisioning (see OSMINE) was a traditional way of issuing work orders. The more standard implementations that can be done with services the better that this will be. One thing that I want to note here is that this was implemented on a specific service. This makes sense as it will be too complicated to implement a multi-service SDN at this time. It makes sense to pick a simple single service with few changes possible (in this case bandwidth) and learn about how the automation works. I am not sure how much money this saves AT&T. Probably not much. But it is a live technology trial at a Tier 1 carrier that is making money on a service that customers want.

Have a great weekend. Jim Sackman Focal Point Business Coaching Business Coaching, Executive Training, Sales Training, Marketing

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