News Blog

Our friend at Cox is about to get selectively friendly toward Internet content.

(Credit: Dong Ngo/CBS Interactive)

Net neutrality fans, grab your chairs; I have some rocking news.

Cox Communications, the third-largest cable Internet provider in the U.S., announced Tuesday that starting February, it will begin testing a new method of managing traffic on its high-speed Internet network in Kansas and Arkansas.

This means during the times the network is congested the company will--to put it bluntly--discriminate between Internet content and regulate the bandwidth accordingly.

The company divides Internet traffic into two categories: time-sensitive and nontime-sensitive, with the former taking the priority during the congested hours.

Here's the company's break-down of these two categories:

The time sensitive category includes:

• Web (Web surfing, including web-based e-mail and chat embedded in Web pages)
• VoIP (Voice over IP, telephone calls made over the Internet)
• E-mail
• IM (Instant messages, including related voice and Webcam traffic)
• Streaming (Web-based audio and video programs)
• Games (Online interactive games)
• Tunneling & Remote Connectivity (VPN-type services for telecommuting)
• Other (Any service not categorized into another area)

The nontime-sensitive category includes:

• File Access (Bulk transfers of data such as FTP)
• Network Storage (Bulk transfers of data for storage)
• P2P (Peer to peer protocols)
• Software Updates (Managed updates, such as operating system updates)
• Usenet (Newsgroup related)

Cox says the new congestion management plan only kicks in when congestion levels reach a certain high. It also insists the company will ensure that its customers continue to have a good online experience.

Personally, I don't really mind this, because I live in California and games are categorized as time-sensitive. For those who are more concerned, you can learn more about Cox's congestion management plan here.

Alcatel-Lucent's CEO and chairman are stepping aside as the company continues to face big losses and increased competition from Asian suppliers.

The telecommunications equipment giant said Tuesday that CEO Patricia Russo and Chairman Serge Tchuruk will leave later this year. Russo will finish out the year as she helps the company look for a new CEO, and Tchuruk, who helped architect the mega-merger between Lucent Technologies and Alcatel, will leave October 1.

The company said the two executives had stepped down on their own accord. It is a move, however, that shareholders have urged for months.

And who could blame them. Since the combined Alcatel-Lucent started operating as a single company in December 2006, it has lost more than half its value. It has faced six consecutive quarters of losses and has shed critical market share in several telecom equipment categories.

Executives sold the merger to investors two years ago as a great way to cut costs and compete more effectively with emerging rivals in Asia. But the reality has been much different. Combining any two large companies rarely goes smoothly. But the task of combining the U.S.-based Lucent and France-based Alcatel was further complicated by cultural differences between the two companies, which analysts say remain unresolved.

As the company tried to combine forces despite the hurdles, its competitors rallied and began stealing customers. In addition to facing competition from the usual players, such as Ericsson, Nortel Networks, and Nokia Siemens, the company also faced increasing competition from new players like Chinese rivals ZTE and Huawei.

These competitive forces, combined with the company's inability to make decisions quickly enough or to retain key executives, have fueled major losses. The company has issued profit warning after profit warning.

Despite promises from Russo last year that a turnaround was in the works, the company's shareholders and board of directors apparently have lost confidence.

For the second quarter, the company reported sales and profits slightly ahead of expectations. It also reported a major loss due to writedowns.

Its immediate future looks bleak amid concerns over the economy. As a result, the company has cut its forecast for third-quarter sales, saying it expects revenue to remain flat or decline compared with the previous quarter. Investors had hoped for a 2.5 percent increase in sales. The company also expects 2008 revenue to fall "in the low to mid single-digit range."

In addition to the departures of Russo and Tchuruk, Henry Schacht, who preceded Russo as Lucent's CEO prior to the merger, will resign from the board immediately, the company said.

New Yorkers will now officially be able to get Verizon's Fios TV service.

Verizon employees were at Grand Central Terminal in Manhattan Monday to market the new Fios TV service.

(Credit: Marguerite Reardon/CNET Networks)

The phone company launched the new service Monday in what is the largest launch of Fios TV to date. Initially, about 300,000 of the city's roughly 8 million residents will have access to the service. But Verizon plans to be able to offer the service to at least three million homes and businesses in New York City by year's end.

Verizon representatives were on hand all day Monday at the busy Grand Central train station in midtown Manhattan to get the word out about the launch.

Verizon, which will be competing head on with Time Warner Cable and Cablevision, is offering its basic triple package that includes 20 Mbps downstream and 10 Mpbs upstream data, phone service with unlimited local calling, and Fios TV service for an introductory rate of $94.99 for the first year of service.

Exactly how much it will cost after the promotion ends is somewhat of a mystery, if you talk to representatives at Grand Central Station. Representatives I talked to at Grand Central couldn't tell me how much I could expect to pay after the promotion. But given the competitive nature of the New York market, it's likely that consumers will not pay much more than the introductory rate and could even pay less if Verizon slashes prices to compete with Time Warner Cable and Cablevision, which also offer triple play services in different parts of New York City.

But price won't be the only differentiator for Verizon. The company also announced Monday that it will offer 100 high-definition channels in all its markets. And the plan is to increase that number to 150 channels by year's end.

Verizon launched its Fios TV service a couple of years ago and is now offering it in parts of 13 states. While the company had a banner 2007 and racked up thousands of new subscribers in the first quarter of 2008, it missed some analyst expectations for the second quarter.

But Maura Breen, Verizon's general manager for New York City, said she expects the third quarter to bring in many new subscribers. She attributed the dip in subscriber growth in the second quarter to a slowdown in marketing and promotions offered to get people to sign up for the service. And she expects the company's aggressive launch in New York City to lead the charge for the third quarter.

"I think we are going to see a knockout third quarter," she said. "We've already seen some very good presale numbers for New York City. And we expect it to be at or ahead of what we see for the rest of the Verizon territory."

New York City is a crucial market for Verizon, she added. Not only is it the biggest city in Verizon's territory, but the company has been providing phone service to New Yorkers for more than a 100 years.

"It sounds kind of corny, but we are the hometown team," she said. "We needed to be able to provide a full suite of products and services here. And New York is the toughest and most complex market, so if we can do it here, we can do it in any city."

One of the biggest challenges for Verizon has been negotiating with individual building landlords and real estate developers. The company has worked with bigger developers to sign on entire portfolios of buildings. And in March it began wiring Stuyvesant Town and Peter Cooper Village, one of Manhattan's largest apartment complexes.

But Verizon has made strong commitments to the city to have its build out complete by 2014. The deal it struck with New York's Franchise and Concession Review Committee calls for the company to make Fios available in 57 percent of Manhattan, 13 percent of the Bronx, 15 percent of Queens, 12 percent of Brooklyn, and 98 percent of Staten Island by the end of 2008.

Breen said the company has already covered 25 percent of city with fiber. And it will simply be a matter of building on that footprint and extending fiber to individual buildings. Breen said the company is committed to reaching residents in buildings both large and small. She said people interested in the service can check to see if Fios is offered in their neighborhood, and if it is and is not yet offered to their apartment building, they can request that Verizon contact the building owner to set up some kind of deal.

Verizon's Fios TV is coming to New York City starting Monday.

The phone company sent a media advisory on Friday about the launch and will provide more details about the service during a Webcast press conference Monday morning. New York City granted Verizon its TV franchise back in May. And on July 16th, the company won final approval to offer its TV service from the New York Public Service Commission.

Verizon has been aggressively marketing its Fios Internet and TV service in the New York City suburbs for the past couple of years. And the company has offered the Fios high-speed Internet service in some apartment buildings in New York City. Now the company will be able to offer a complete package of telephony, TV, and broadband services to New Yorkers, helping it compete head-to-head with Time Warner Cable, the predominant cable operator in the city.

Verizon's Fios service uses a new fiber network that extends directly into people's homes to deliver nearly unlimited bandwidth capacity.

Technology blogger Dave Zatz reported earlier this week that Verizon will soon offer Web-based videos as part of its Fios TV offering through its set-top boxes. Initial Internet video partners include YouTube, Veoh, Blip.tv, and Break.com, the post said.

A new undersea fiber-optic cable being laid between Cuba and Venezuela will help provide high-speed Internet access to Cuban citizens by 2010.

Earlier this week, Wikileaks published documents that were signed in 2006 by officials in Cuba and Venezuela describing plans for the new undersea cable that will connect the two countries.

The United States economic embargo against the island nation has forced the communist country to rely on slow and expensive satellite links for Internet connectivity, according to the Wikileaks article. Even though it would cost less and be more efficient to lay a new cable between Cuba and the U.S., which are only 120 kilometers apart, Cuba is working with Venezuela to lay a 1,500-kilometer cable to get high-speed Internet connectivity.

The proposed cable, which is being deployed by CVG Telecom (Corporacion Venezolana de Guyana) and ETC (Empresa de Telecomunicaciones de Cuba), will also provide high-speed Internet access to Jamaica, Haiti, and Trinidad.

According to the Wikileaks article, the new undersea cable is being built as a strategic partnership between Cuba and Venezuela to encourage an interchange between the two governments; foster science, cultural and social development; and increase economic relationships among Cuba, its South American neighbors, and the rest of the world.

Cuba has traditionally kept a tight lid on Internet access in the country. In 2003, the government cracked down on ordinary Cuban citizens, who were accessing the Internet over the government's painfully slow phone network.

But recently since Raul Castro has taken power from his brother Fidel Castro, the government has loosened many restrictions on average citizens. In March, a ban prohibiting ordinary citizens from owning cell phones was lifted. And in May, the Associated Press reported that Cubans are now allowed to buy desktop PCs.

Talk about an odd couple. Cable giant Comcast said Wednesday that it will work with Vonage to help ensure Vonage's Internet phone service works well over its broadband network.

The Comcast/Vonage alliance follows other similar announcements made with other Internet companies, as the cable operator tries to convince customers that it's not looking to kill competitive services that run over its network.

Last year, Comcast was discovered slowing down peer-to-peer traffic on its network. At first the company denied it was filtering traffic. Then it admitted it had slowed down some types of traffic to manage congestion on its network. Net Neutrality proponents and consumer advocates were outraged and feared Comcast's actions were attempts to control content flowing over its network.

The outcry against Comcast has been so strong, that the company said it would work with peer-to-peer companies BitTorrent and Pando Networks to find new ways to manage its traffic. And in March, it said that it would move to a protocol agnostic network management solution by the end of the year. And in June it began testing a network management system that will slow down during times of congestion for heavy bandwidth users regardless of the application they are using.

"This collaboration with Vonage, and our outreach to many key participants in the Internet community, demonstrate that we are committed to provide network management solutions that benefit consumers and competition" Tony Werner, Comcast Chief Technology Officer, said in a statement.

But what makes the alliance with Vonage interesting is that Vonage is a direct competitor to Comcast. Vonage sells a voice over IP phone service that competes directly with Comcast's own VoIP phone service.

"Although we're competitors with Comcast, this understanding helps our two companies work together to balance the needs of network management with consumers' ability to freely access the services, applications and content of their choice," Louis Mamakos, Vonage Chief Technology Officer, said in a statement.

Video may have killed the radio star, but it doesn't have to kill the Internet.

That is if Internet service providers can figure out how to keep up with the video-driven bandwidth demand on their networks. Peer-to-peer technology provider BitTorrent says it can help.

Video consumes more network resources than any other media distributed on the Web. Even poor-quality video from YouTube eats up more bandwidth than e-mail, music downloading, and voice over IP services. And when you throw full-length high-definition video into the mix, you're talking about even more bandwidth. Depending on the compression used, a single HD video stream can eat up 20 megabits per second worth of bandwidth.

And as consumers subscribe to faster and faster broadband connections at home and sites like YouTube and Hulu come online offering all kinds of video choices, more people are watching video on the Web. According to ComScore Video Metrix, Americans are currently watching upward of 10 billion videos online a month. By the end of 2007, online viewers averaged more than one video a day.

This is just the beginning. ABI research forecasts the number of viewers who access video via the Web will nearly quadruple in the next few years, reaching at least 1 billion in 2013.

This summer's Olympic Games in Beijing marks the first real test of online video as NBC embarks upon the most ambitious online video project ever. NBC plans to offer 3,600 hours of live programming from Beijing, which translates to about 212 live hours for each of the 17 days of the Olympics. The majority of this viewing will be delivered online.

All this video is great for viewers, who are able to pick and choose what they watch and when. But for Internet service providers like the phone companies and the cable operators, it represents a massive challenge. Some providers, such as Comcast and Time Warner Cable, are testing out new ways to deal with "bandwidth hogs" or individual users who use an inordinate amount of bandwidth.

Last month, Comcast began testing a new system that will throttle back or slow down traffic during times of congestion for heavy bandwidth users. The new system was developed after Comcast faced stark criticism for singling out and slowing down peer-to-peer traffic.

Meanwhile, Time Warner Cable, which says it faces the same capacity headaches, also began testing a new billing system that charges customers who exceed their limit for uploading and downloading material.

P2P as a solution, rather than a problem
Eric Klinker, chief technology officer for BitTorrent, which has commercialized the peer-to-peer technology, says that what the cable operators are doing is a good start. But more can be done to help operators deal with the onslaught of video.

For one, peer-to-peer protocols, such as BitTorrent, which are often cited as major headaches for network operators because of the big file transfers they enable, need to be utilized rather than singled out as a source of the problem, he said.

"I think what Comcast and Time Warner Cable are doing is a great first step," Klinker said. "It gets ISPs out of the business of deciding which applications are important and which aren't. But there are enhancements to the peer-to-peer protocol, in particular, that can make it easier on all ISPs."

Peer-to-peer technology has gotten a bad rap for years. Since the days of file-sharing networks like Napster, which allowed people to exchange songs on their computer hard drives with others on the Internet, peer-to-peer technology has been demonized in the press. But the truth is that peer-to-peer technology actually allows large files like videos to be distributed more efficiently. And as more video makes it way onto the Web, it's increasingly being used. In fact, peer-to-peer traffic accounts for about 43 percent of all traffic on the Internet, according to a recent study by the network management company Sandvine.

The way peer-to-peer works is that when a user requests a video, the peer-to-peer network queries other users in the network and takes pieces of the file from different peers and sends it to the user requesting the file. This distributed architecture means that content owners don't have to assemble large and expensive data centers. It also means that a content distributor doesn't have to pay for expensive high-speed links to serve up an entire file from a single server farm.

That said, peer-to-peer protocols in the wild can eat up lots of bandwidth because peers on the network can silently and continuously upload pieces of files from their computers all day and all night, seeding dozens or hundreds of file requests. And because upload capacities are generally much slower than downloads, it can create bottlenecks and capacity crunches on the last mile of service providers' networks. For network operators that are already capacity-constrained, this phenomenon can dramatically affect performance for all users.

The enhanced version of peer-to-peer
Peer-to-peer companies, such as BitTorrent and Pando Networks, have recognized this problem and have been working with service providers, such as Verizon Communications, Comcast, and others to come up with solutions. Verizon and Pando Networks have been working on a project called P4P, which advocates ISPs share information about their network topography and use an enhanced version of peer-to-peer to locate peers in close proximity to the file request. Getting files locally can help reduce the expense associated with carrying peer-to-peer files over long distances.

BitTorrent, whose founder created one of the most popular peer-to-peer protocols used today, has also been working on a solution. The company has developed its own enhancement to the peer-to-peer protocol that tells peer-to-peer applications to stop seeding the network with content when the network is congested.

For example, if a teenager starts playing an online video game at the same time his mother makes a voice over IP phone call and his little sister is downloading music from iTunes, the protocol will tell the peer-to-peer movie application that is running in the background on their family computer to stop uploading bits of the Spider-Man movie that had been ordered from an online movie rental service and is now stored on a hard drive in their home. Instead, the network will search for the content on another peer that is on a network that is less congested.

"If there is contention in the network, my application will back off," Klinker said. "And it will automatically and seamlessly find someone else in the network to complete uploading that content. The video quality is never disrupted, and the user never knows where the content is coming from."

BitTorrent has already tested the enhancement with more than 10 million users and it's currently working with the Internet standards body, the Internet Engineering Task Force, to standardize the technology so that other peer-to-peer companies can embed it in their software client.

Klinker said that new technologies, such as the one developed by his company, as well as efforts on the P4P enhancements will help ISPs manage and control their networks so that even more video can make it to the Web without crippling the infrastructure delivering it.

And once service providers learn how to harness peer-to-peer, they will be able to develop business models that reap the benefits of the technology. For example, Comcast, Verizon, or any other TV provider could add peer-to-peer software to the set-top boxes sitting in their customers' living rooms to create a distributed peer-to-peer movie network. Instead of serving up on-demand movies from their own servers sitting in expensive-to-run data centers, these TV providers could leverage the content already stored on their customers' set-top hard drives.

"The cable and phone companies are already spending capital to put set-tops in everyone's home," Klinker said. "They could use that same hardware as part of their content distribution model. Then the user pays the electrical bill. And they pay for the bandwidth. It's just much more efficient."

Klinker said a solution, such as this one, requires a slightly different business model from BitTorrent's current business model. But he said that it's something the company is investigating.

"It's interesting enough that we're in discussions and testing some scenarios with ISPs," he said. "In general, service providers move slowly. So nothing will happen overnight. But I think we'll see some interesting changes within the next three years."

Got dial-up and don't want to give it up? You're not alone.

An estimated 10 percent of Americans are surfing the net via dial-up connections, according to a report released Wednesday by the Pew Internet and American Life Project.

And a lot of those people apparently see no compelling reason to change. The report indicates that those users are not itching to make a change to a speedier broadband connection in large part because, they say, broadband is too expensive.

Of this dial-up group, 35 percent cited the cost issue, while 19 percent say nothing will ever prompt them to change. Another subset--14 percent--say they're still on dial-up because broadband is not available in their neighborhoods

The Associated Press, in its posting on the report, cited this assessment by the report's author, John Horrigan: "That (resistance to change) suggests that solving the supply problem where there are availability gaps is only going to go so far."

The survey collected information from 2,251 U.S. residents, between April 8 and May 11.

Earlier this week, AOL said it would be raising the subscription fee for its dial-up service by 20 percent, starting at the end of July.

Satellite TV provider Dish Network said Tuesday that AT&T will end its agreement to bundle its TV service with AT&T's broadband and phone service at the end of the year.

AT&T and Dish have had a joint marketing deal since July 2003, which allows AT&T to package the Dish TV service with AT&T's phone and Internet packages. But AT&T has decided not to renew the agreement, and as required by the contract between the two companies, AT&T is giving Dish six months notice that the deal will expire December 31, 2008.

The move is likely a way for AT&T to negotiate a better deal with either Dish or its competitor DirecTV. In April, AT&T expanded its partnership with Dish in the old BellSouth territory. (AT&T bought BellSouth in 2006.) And it stopped marketing a similar package with DirecTV.

At the time, it looked as if AT&T had dropped DirecTV for Dish. But AT&T has always maintained that it's discussing partnerships with both companies. And now it looks like the company is free to pit one company against the other to get the best possible price.

AT&T said in a statement that it will continue to discuss options with Dish even though it has terminated the current agreement.

Video is a key part of AT&T's strategy. The company has spent millions of dollars over the past few years to upgrade its network with fiber so that it can deliver TV over its IP network. The new U-Verse service is up and running in parts of AT&T's network. But the company isn't able to deploy U-Verse everywhere, so it has been relying on deals with satellite TV providers to deliver a so-called triple-play bundle that includes TV, phone, and broadband services in a single package.