Phone company Frontier Communications (Etilities Forum) recently received a good deal of media attention when they announced that there would be broadband usage cap above which users would pay by the gigabyte (GB) used per month.  This would turn the current broadband model (unlimited usage for a fixed fee) into the cell phone model, in which the base monthly fee covers a certain amount of usage (minutes for cells and gigabytes for broadband), but any usage over that “soft cap” incurs a cost-per-unit, often at a higher rate than that of your base allowance.

Frontier’s limit will initially be set at 5GB per month.  The heart of the problem is that this number can be both very high and very low – it completely depends on who you talk to.  I know that I am not alone in that I can go through that much bandwidth in just a day or two.  As a matter of fact, anyone watching more than 2 or 3 movies a month with a streaming device like the Apple TV or Amazon (Etilities Forum) Video-on-Demand service would easily clear that threshold.  As explained previously, recent industry trends toward delivering content online rather than on traditional hard media will place an increasing number of customers into the category of “heavy downloaders.”  Yet at the other end of the spectrum, customers who only browse a few web pages and send a couple of e-mails each day wouldn’t reach a 5GB limit in a year.  Given the clear movement toward using the Internet as a content delivery mechanism, though, I suspect that the latter group of consumers will decrease in numbers very quickly.

Clearly, there is a need for pricing models that allow greater granularity in determining reasonable fee-for-usage: it’s understandable that a customer using one hundred times more than another should pay more.  Frontier, however, plans to charge $1 per additional GB used.  Since the average movie downloaded through iTunes (Etilities Forum) Movie Rentals is around 2GB, the total cost of that $4 rental comes to $6 – a 50% increase in cost to the consumer!  Clearly, Frontier will disgruntle their power users faster than it takes to say it, and those bandwidth-hungry consumers will either switch back to hard media or (more likely) change providers.

What will the end result be for Frontier if they stick with the current 5GB cap strategy?  They’ll be left with only their light-duty users, who, by nature, will generate less revenue and be less profitable once pricing models mature to reasonably and affordably bill based on usage.

©2008-2009, Gallop Services, Inc. All rights reserved.

You’re most likely familiar with bundled technology services.  Your cable provider probably offers you “a better value” if you subscribe to their Cable TV, Internet, and Telephone services.  If you’re lucky, you may also have the choice of FIOS service from Verizon (Etilities Forum), which provides the same package deal, just through the phone company.

Now, cable companies are planning to expand their bundled offerings by putting wireless data services into the mix.  Om Malik reports on his GigaOm site that Comcast (Etilities Forum), Cox Communications (Etilities Forum), Cablevision (Etilities Forum), Charter Communications (Etilities Forum), and Bend (Etilities Forum) have all announced some degree of planned wireless service.  Certainly, their competitors won’t be far behind.  In addition, the recent sale of a wide swath of the wireless spectrum to some of these and other providers will boost their ability to provide ever further-reaching coverage to mobile devices at home and on the road.  Since those spectrum purchases cost hundreds of millions of dollars, there’s no doubt that providers will be aggressive in selling services to recoup their expenses quickly.

At first glance, this seems to be a great benefit to consumers, and in many situations that may be the case.  However, the other side of this development is that your choices may be inefficiently limited to those that come with the provider’s specific bundles.  Consumers need to remain far more aware of exactly what services they are paying for and at what cost.  For example, I do not use a landline telephone enough to justify bundling the cable company’s VOIP service with my other services solely because (according to them), it will “save me hundreds of dollars per year!”  Instead, I use a third-party VOIP service that costs a few dollars per month.  This is perfect since the service is to call 911 if ever needed.

Instead, the widening bundle represents a potentially cost-saving mechanism for consumers whose usage of all of those services warrants the consolidation.  There will certainly be those that feel paying a little more for the convenience of fewer bills is worth the cost as well, but in a leveling economy (or whatever it’s being called this week), the number of folks able to take that route are dwindling.

©2008-2009, Gallop Services, Inc. All rights reserved.

According to a wired article, the competition for online services recently grew with Blinkx (Etilities Forum) launching its TV service, Blinkx Remote.  The service provides a text-searchable index of vetted video content, and repackages the resulting video onto the Blinkx site.  Historically, searching video has been a difficult task because the user-created keywords and summaries can be abused by those just looking for a click.  However, Wired reports that Blinkx has 11,000 episodes of 1,000 TV shows indexed and ready for your perusal.

Hulu (Etilities Forum), a similar provider of online video content has been widely successful in the recent past.  TV networks have been more accommodating of these and similar services because the providers are limiting their offerings to those from legal sources, avoiding the perpetual piracy battle.

While it’s arguable whether or not consumers will be open to watching TV on their computers, the advent of both TV-connected computers and standalone, Internet-dependent devices like the Apple TV will certainly play a large part in the future growth of the Online TV market.

©2008-2009, Gallop Services, Inc. All rights reserved.

By now you’ve certainly heard about the recent Netflix (Etilities Forum) outage in which a still-unexplained issue prevented mailing movies to their subscribers.  According to a recent report from wired, it appears that the revenue impact to Netflix will be minimal – roughly between $1.8 and $3.6 million.  The company clearly does not have a reputation for having issues so most customers do not see this a recurring problem.  

So I must ask, with all the coverage of this news (including this one), do you think that Netflix will benefit more from the free coverage and publicity than they lost during the outage?  Could this perhaps be a live example of the old adage “There is no such thing as bad publicity”?

Are you considering alternative means to get you movie fix in the wake of this outage?  Let us know in the comments!

©2008-2009, Gallop Services, Inc. All rights reserved.

Now that you’ve learned about formulating a home data backup strategy, and shopped for hardware to support the local storage component of that strategy, let’s talk about the software you’ll need to make backing up your data a painless, automatic operation.  The goal is to use something that you won’t give a second thought until you need it someday.  As with any technology choice, options range from the simple and free to the elaborate and expensive.  Don’t worry though – there is plenty of middle ground, and this area probably meets the needs of most consumers.  In all cases below, we’re talking about backing up the files on your computer to a storage device somewhere in your home or otherwise in the same location as the computer itself. Read the rest of this entry »

©2008-2009, Gallop Services, Inc. All rights reserved.

Just a quick update to a previous story about Comcast (Etilities Forum) and its network management practices.  Shortly before the weekend, the Federal Communications Commission (FCC) issued a press release (warning: PDF link) explaining its order that Comcast end their discriminatory network management practices.  It goes onto explain that “Comcast has unduly interfered with Internet users’ right to access the lawful Internet content and to use the applications of their choice.”  In its fairly detailed released, the FCC highlighted some key points including that the apparently anti-competitive practices related to blocking peer-to-peer network traffic, while offering a competing offering through their Video-on-Demand (VOD) service.

The narrow 3-2 vote did not lead to a fine for the company but rather to an order for Comcast to cease their current practices and provide a plan for future compliance.  In Comcast’s reply, they note their disagreement with the findings and highlighted the impact that this ban may have on their clients.  Several other broadband providers issued releases in reaction to the ruling including Verizon (Etilities Forum) who made a statement calling on the telecommunications industry to increase their transparency while also stating that further Internet-governing rules from the FCC and the Federal Trade Commission (FTC) “are not needed.”

Certainly, the discussion surrounding the practices of “traffic shaping” or “network management” will continue to become more and more relevant to the average home user, whose needs for fair access to Internet-based content will only increase.

©2008-2009, Gallop Services, Inc. All rights reserved.

You just moved into a new place, and find that your neighbor (maybe 20 of them) has an open, unsecured wireless access point.  Great!!  You don’t even need to pay for Internet access, right?  Not quite…  The use of someone else’s network connection without their express authorization is probably not allowed and may even be a criminal act.

Say what?!  Isn’t the internet just a conduit for the trillions of electrons processed by our computers?  The internet is a lot like a highway: A few lanes are used for e-mail, others for the web, some for file transfers, etc…  And as almost any commuter knows, more cars (Internet traffic) means slower roads (Internet service).

So, back to the topic…  In most countries, and many parts of the United States, “Wi-Fi Squatting” is illegal as the WSJ reported last year. While I’m certainly not here as an attorney, I find this debate fascinating.

Read the rest of this entry »

©2008-2009, Gallop Services, Inc. All rights reserved.