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Broadband's Impact

Broadband Competition and Pricing: Lessons Providers must Learn

I believe everyone can agree that Broadband Competition and Pricing are high on their lists of (all things broadband). Yes, consumers and businesses alike want a high quality broadband experience with dynamically fast upload and download speeds, and with seamless and unbridled applications to fill their Christmas wish lists.

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I believe everyone can agree that Broadband Competition and Pricing are high on their lists of (all things broadband). Yes, consumers and businesses alike want a high quality broadband experience with dynamically fast upload and download speeds, and with seamless and unbridled applications to fill their Christmas wish lists.

It seems as though we are going in that direction, at least on the applications front, with innovators like Apple, Cisco, Motorola, and others, where competition is a daily fact of life; where CEO’s champion innovation, and speed to market, while continuing to find cost savings ways to offer a competitive product.

How are the incumbent land-line Broadband ISP’s fairing in the realm of innovation, speed to market, and cost innovation in producing a high quality product at a competitive price? I will give them a (C) on any standardized testing metric. And the reason remains that without sufficient competition, see (New FCC Report Boosts Case for More ISP Competition), a company’s desire or motivation to innovate; to produce a high quality product; provide the best customer service, at the lowest possible price, is just not there.

This kind of mindset can permeate throughout an organization where the (status quo) is accepted and championed; where being first to market with a great product is not needed, with no significant competition to worry about, see (ISPs Raise Broadband Costs — And Advocates’ Ire), and where a mature and declining linear programming market is continuing to produce significant returns, albeit in the short term. But wait, these companies built their networks with private funding and made them hard to emulate, while producing their innovations (during their day), and are now enjoying the spoils.

However, incumbents must act as though they have competition, simply because they will at some point – maybe sooner than later, and this must be drilled into every employee throughout the organization; not just in the isolated places where some level of competition exists. They must model themselves after the Apple’s, Cisco’s, and Motorola’s, and other innovators of the world.

This is a defining moment for the industry, as legislatures through the mantra of the FCC look for ways to create a Broadband competitive market, either through legislation or competitive factors, see (What Would Broadband Competition Look Like?). Now is the time to let go of the status quo and create new markets defined by innovation and price competitiveness. It is happening with the likes of Apple, Netflix, Boxee, Hulu, YouTube and others that value customer service and retention. So, roll up those sleeves and get to work; time is running out.

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Len Grace is a technology industry veteran with over 18 years experience with Comcast Corporation. His insights into pertinent and relevant issues within the Broadband/Telecom/Cable/Wireless and Mobile sectors both inform and enlighten readers on current industry trends, analysis, business strategy, competitive landscape and legislative agendas. Len is the founder & editor of The Cable Pipeline, a technology blog who contributes to various technology websites including Light Reading, BroadbandBreakfast.com (Expert Opinion), SiliconAngle, Cisco Community: Service Provider Mobility, Amdocs: InTouch Community Portal, Bloomberg's bx Business Exchange, CircleID, and Sys-Con Media/Utilizer. Also see his reporting.

Broadband's Impact

Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units

What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?

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Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”

Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?

Panelists:

  • Sandra Howe, Board of Directors, Minim
  • Pierre Trudeau, President and Chief Technology Officer, Positron Access
  • Other Guests have been invited
  • Drew Clark (moderator), Editor and Publisher of Broadband Breakfast

Drew ClarkEditor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Education

National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap

EducationSuperHighway is signing up partners and will launch November 4.

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Evan Marwell, founder and CEO of Education Super Highway.

WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.

On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.

The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.

The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.

The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.

The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.

“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”

Over 120 regional and national carriers have signed up for the initiative.

The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.

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Broadband's Impact

Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services

The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.

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The author of this Expert Opinion is Steve Lacoff, general manager of Avalara for communications

The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.

Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.

Cloudification is a game changer

This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.

Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.

The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.

In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.

Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”

Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.

Don’t let communications tax take you by surprise

One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.

Here are some of the key pitfalls to keep an eye on:

  • Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
  • More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
  • Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail.  They must be filed in a timely, accurate cadence to avoid additional audit risk.

Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.

It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.

Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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