DSL Prime: Full Length HD Video

With innovative delivery methods and ever-increasing end-user bandwidth, the future of internet video looks nothing at all like the YouTube present.

by Dave Burstein of DSL Prime and Future of TV and the Web Video Summit [July 30, 2007]

"We can deliver high definition television over the net for pennies."
—Gary Croke of CacheLogic, echoed by Pando and other vendors

Rich Lindner, AT&T CFO, confirmed to Wall Street that they don't need more spectrum. To anyone who understands both technology and policy, this is a devastating blow to the telco arguments on the 700 MHz spectrum auction. If they don't need the spectrum, then the only reason they would bid to because they want to block competition in wireless, and and will get the money right back in higher mobile prices. I'm doing a special issue on wireless to follow up this story and a slew of mistakes in the policy debate.

Web video is ready to migrate from 200,000 YouTube shorts to full screens at megabits. This is major. Gary Croke offered to deliver 6 megabit high definition TV over the internet at a modest price around six cents a program. Web video is entering it's third era, TV quality. We wowed the audience at Web Video Summit with a live HD demo supported by Microsoft. Costs to deliver video are coming down 70 to 90 percent over the next 12 months if you can accept a delay of a few seconds. Most connections in France and soon England and Germany will be more than 10 Mbps downstream, with Verizon FIOS and most U.S. cable heading there as well. Xboxes, Playstations, and set tops are connecting the web straight to the TV, and 30 percent of the U.S. already has an HD set.

Even standard definition streaming cost 8 to 15 cents per hour just six months ago, but peer to peer hybrids are working well enough so that major media like ABC are jumping on. Hybrids begin the show within seconds, quickly build a buffer, and if well designed gracefully cut over to host server if the needed video isn't available from a peer. Akamai, #1 stream hoster, invested $15 million to buy Red Swoosh because the service is so attractive. Some of the "love for sale" crowd in D.C. are scaremongering about how video will bring down the net unless the telcos get paid more. The data, even assuming video growth, absolutely do not support the claims. Future articles coming.

Best of luck to new Washington Post telecom reporter Kim Hart and to Laura Holson, taking over telecom at the NY Times. Also luck with the new boss at the WSJ. The WSJ team remains the best in telecom, but Om Malik's posse is ready to dispute that throne. Om is simply the best in the business, and the half dozen reporters he's hired seem inspired by his lead. Also sorry to hear Joe Nacchio is headed to jail. He's smart, interesting and generally one of the most straightforward guys in telecom, although the charges looked very strong.

One of the wonderful things about DSL is the growth of almost everyone's music library. I've been listening to Arthur Schnabel's incredibly expressive Beethoven sonatas, available from Naxos and over the web.

Breaking News:
CEO: EarthLink Isn't Making Money on Muni Wireless
The spectrum sale won't give us much of a third pipe, either
Building another wireless network is worth it just because the redundancy pays off in public safety during crisis. The actual deployment is cheap enough the money is worth finding, but Earthlink is on target that making money is unlikely in the current "Build, give a lot for free or cheap, and make it up on $20 to $30 customers." Some basic revenue, such a municipal anchor tenant, often will be necessary.

"The Wi-Fi business as currently constituted will not provide an acceptable return. We're actively exploring ways to scale this business more economically. We're going to look for municipal government to step up and become a meaningful anchor tenant on completion of a build. That would go a long way in our being able to get an acceptable return on this investment. Until we're convinced that we can build new networks and get an acceptable return we will delay any further new build-outs." New Ceo Rolla Huff, via Esme Vos' extraordinary Muni Wireless.)

Almost four years ago, I told a friend at EarthLink, "you'd better do something soon, because your dialup business will disappear quickly." He replied, "No, I think we have 3 to 5 years." I was wrong, but it's now 3 to 5 years and they moved too slowly.

Wireless as planned simply cannot provide speeds of more than a few hundred Kbps to more than a small fraction of the likely customers. That means it generally can't compete with DSL or cable 3 to 5 Mbps speeds today or the 10 to 100 Mbps speeds coming soon. Neither the new 700 MHz spectrum nor the likely muni wireless are competitive as "a third 'pipe' into the home." They will be extremely valuable for out of the home connection, mobile phone calls, emergency backup, and an option if the telco/cable duopoly overcharges ridiculously. In addition, the marginal cost of adding a subscriber is close to zero, allowing a very low priced or even "free" service to people who can't afford better. Making broadband of some sort available to the poor is worthwhile, even if it's not a service that will sell to people who can afford better.

DSL Prime is strongly in favor of building the networks, with (relatively modest) funding as needed. Yet again, however, starting with the facts is better.

Copyright 2007 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.