Content Creation, Aggregation, Distribution No Longer are Separate Roles

Once upon a time, there was a clear distinction between content creation; content aggregation and content distribution. Today, the roles are blurring.
In the past, there were laws prohibiting film studies from owning movie theaters, for example. Today, the rules are less stringent, but there are clear limitations on the amount of ownership allowed across the value chain.
The major broadcast networks who assemble content are limited in terms of the number of local TV outlets they can own, for example.
The “old media” thinking was that walls had to be erected between content packagers and content distributors. As a corollary, there were rules about mandatory licensing of content to distributors (“must carry” rules for cable TV, for example).
“New media” breaks all those old rules about separating content creation; content aggregation and content distribution.
That is not to imply or suggest that “more regulation” of the new leaders is needed. Business and industry models are changing, a…

U.S. FCC Will Vote to Remove Common Carrier Regulations on Internet Access in December 2017

The U.S. Federal Communications Commission will vote on Dec. 14, 2017 to remove common carrier regulations from internet access services.
The move is called an attack on network neutrality, but the decision is more complicated than many claim.
In many clear ways, Title II common carrier regulation is a separate issue from network neutrality, which some believe should include a prohibition on any quality of service mechanisms for consumer internet access (no “fast lanes”).
Common carrier regulation is more directly concerned with price regulation, terms and conditions of service, not “network neutrality” in a direct sense.
In a formal sense, the original classification of internet access services as a common carrier service applied a utility-style framework on internet access services that always before had been regulated as “data services.”
One practical result was that consumer welfare issues moved from the purview of the Federal Trade Commission to the FCC itself.
Though commonly ref…

How Will CBRS Market Develop?

Will new access capacity (Citizens Broadband Radio Service; use of unlicensed and shared spectrum) allow new entities to compete with mobile operators in the access services business? Some think so.
Rethink Technology, for example, has argued that shared spectrum will trigger new “challengers” to mobile operator revenue models.
Others might point to decades-ago arguments about Wi-Fi replacing mobile networks and conclude that new shared and unlicensed spectrum likely will create new use cases and marginally affect wide area network access providers.
But the development of Wi-Fi, if a valid indicator of what could happen, suggests complementary use cases more than substitution. source: Rethink Technology Research
Caroline Gabriel, director of research at Rethink Technology Research, believes that “enterprise small cells, particularly those operating in unlicensed spectrum, could be the undoing of mobile network operators, relegating them to ‘utility’ commoditization, and falling revenues…

U.S. Internet Access: What Would it Take for AT&T, Verizon to Take 10 Market Share Points?

The largest U.S. cable TV companies have 64 percent share of internet access accounts in the United States, according to the latest data from Leichtman Research Group. But there also is an 80/20 rule at work: the firms that drive most of the activity are Comcast and Charter; AT&T and Verizon.

Charter and Comcast have 81 percent of the cable internet customers. AT&T and Verizon have 67 percent of the telco internet access customers.

Between them, Charter and Comcast got 93 percent of the net account additions in the cable TV internet access provider segment. And while AT&T gained marginally, while Verizon lost marginally, nearly all the telco ISP losses came from CenturyLink and Frontier Communications.

In other words, though cable ISPs continue to get virtually all the net gains in accounts, AT&T and Verizon are roughly flat, in terms of subscriber installed base, while it is the rural operations that are losing share to cable rivals.

There might be some larger implica…

Video Entertainment: Slim to Zero Profits

For most tier-one service providers, video entertainment has lower profit margins than internet access or voice. The issue is how much lower. Gross margins for internet access might be in the range of 20 percent for video, 40 percent for internet access. Net margins for video might be in single digits.

For smaller service providers, video entertainment is a money-loser.

source: Geobrava
For Metronet, an overbuilder operating in Indiana and Illinois, it is literally the case that video entertainment is a “zero margin” service; a feature of a triple-play service, not a direct revenue driver.

Using what it calls a pass-thru pricing regime, Metronet says it makes video entertainment available at exactly what Metronet pays its content providers.

Under that “pass thru pricing” program, consumers are billed exactly what we pay for the television networks in your package,” Metronet says.

That means no mark-up from the actual cost of goods. “We promise that you'll pay exactly what we pay for…

What Will Drive 5G Business Model?

Among the many unknowns about 5G is the business model: where will new incremental revenue sources develop, and will they develop?
The conventional wisdom is that “enhanced” mobile broadband is one of three key revenue drivers. The others are ultra-low latency services (connected cars, for example) and massive machine applications (internet of things).
If that proves to be true, then it also is possible to say that two out of three expected revenue drivers will be enterprise markets (low latency and machine applications), while one will represent consumer mobile broadband.
And, at least at first, consumer internet access is likely to drive incremental revenue growth. The value proposition (10 times faster) is clear, and the market is large (everybody) and well understood (internet access).
And while consumer internet access will continue to be a “horizontal” value (everybody needs internet access), that might not be the case for the other two drivers. It is logical that success provid…