Joeychgo
12-22-2005, 07:09 AM
Online industry optimistic about connecting faster
By Jon Van
Tribune staff reporter
Published December 22, 2005
Led by a surge of people connecting to the Internet at higher speeds, entrepreneurs are fueling another information technology boom that will grow in 2006.
This year, for the first time, a majority of Americans begin using high-speed broadband connections to go online rather than low-speed dial-ups. The proliferation of broadband access provides video and audio to millions of computer users who once obtained them solely from TV and radio sets.
"It looks eerily similar to the boom days," said Gian Fulgoni, Chicago-based chairman of ComScore Networks Inc., an Internet measurement service. "A slew of new Internet companies are competing across a whole bunch of categories. It's really jumping."
Things changed very fast, added Mitch Mitchell, vice president of the telecom practice at the A.T. Kearney consultancy. "Broadband is now just table stakes for any and all content."
Helping to accelerate the spread of broadband, phone companies like Verizon Communications Inc. and AT&T Inc. are spending billions to offer video, Mitchell said. Mobile TV sent to handheld phones and computers over wireless broadband networks will become increasingly popular in the coming year, Mitchell said.
"We're seeing a lot of experimenting," Mitchell said.
A Hinsdale start-up is one of those companies experimenting with new technology enabled by faster speeds.
At January's Consumer Electronics Show in Las Vegas, TDVision Inc. will unveil its digital three-dimension technology. The company's chairman, Manuel Gutierrez Novelo, hopes it will revolutionize the way people view video and play video games.
"Broadband allows TV over the Internet to PCs and cell phones," said Gutierrez Novelo. "It's a great time to add 3D to the picture."
At January's Consumer Electronics Show in Las Vegas, TDVision will unveil its digital three-dimension technology, which Gutierrez Novelo hopes will revolutionize the way people see video and play video games.
Old 3D technology produces fuzzy images requiring special glasses for people to see the special effects that endow scenes with depth, Novelo said. Eventually, many people using the glasses would feel disoriented.
TDVision's 3D images are fundamentally different, he said. Using a special viewer to decode the software used to create the effects, the user gets a crisp 3D image. Without the viewer, a sharp standard image remains. The technology plays on existing TV sets, computers, DVD systems and game machines.
"Our system doesn't trick the brain into seeing 3D," Gutierrez Novelo said. He said the viewer could be added to iPods and mobile phones to overcome the disadvantages of watching video on screens only 2 inches wide.
TDVision also hopes to spark 3D interest at AT&T Inc., formerly SBC, and other phone companies that plan to launch video services in some markets in 2006. To win customers who already subscribe to cable or satellite TV services, AT&T needs to offer attractive pricing and innovative products, Gutierrez Novelo said.
Like TDVision, Spring Grove-based Intermatic Inc. sees a bonanza growing out of the move to broadband. Intermatic is part of the Z-Wave Alliance, which promotes sensors and controllers networked in homes.
Smart homes can help the elderly live on their own by monitoring their health, said Mike Einstein, an Intermatic vice president. It can cut energy costs and enhance convenience.
"If you've got to stay late at the office, you can use your cell phone to reset the thermostat, so the heat won't ramp up until you're heading home," he said. "Broadband provides a continuous connection to your home computer, which controls everything in the house. With dial-up, you couldn't do this."
The increased use of broadband is changing how people use the Internet.
According to ComScore, two-thirds of Internet users obtain streaming audio or video through a portal, such as Yahoo or AOL. In June, 94 million people viewed streaming video online, averaging 73 minutes of content per viewer.
"They look at music videos, news clips and movie trailers," Fulgoni said. "They're not watching many complete shows yet, but that's coming."
Audio content, such as radio broadcasts, are also surging, as 34 million people listened to radio shows online in October, up 62 percent from a year earlier.
All this content, offered in many ways, is leading to more choices for consumers.
Kevin Martin, the chairman of the Federal Communications Commission, recently endorsed a la carte programming for cable television. That would enable customers to pick the channels they want rather than requiring them to buy packages loaded with content of no interest.
Mitchell, the consultant, said market trends also encourage unbundling content as more outlets compete with each other for consumer favor. But even as broadband technology disrupts traditional telecom businesses, executives who head entrenched businesses won't give up their competitive advantages without a fight.
Edward Whitacre Jr., AT&T chairman, has complained publicly about Internet companies like Vonage, Google and Microsoft that use his broadband lines to make money without giving his network a cut.
Whitacre and other telecom executives are backing federal legislation that would allow them to offer the traditional Internet as a standard service with slower speeds. Under this scheme, the carriers would offer their top quality service over a "premium" Internet operated by the phone companies at higher speeds.
This would enable AT&T and other network operators to charge customers more for the "premium" Internet and also let them charge portals--like Yahoo--that want to offer video content. Internet companies are certain to fight against giving phone companies such control over the Internet and they'll continue their assault on the phone companies' core voice service.
Firms like Skype, Vonage and Google will likely offer more free services such as voice calls and e-mail that use broadband and is supported by advertising, said Mark Keeley, managing director of the telecom practice at Diamond Cluster, a Chicago-based consultancy.
Also, many municipalities plan to build wireless broadband networks to serve the public for free or at low cost, Keeley noted. "Look for a regulatory response from the incumbent carriers," he said. "There will be a lot of pushback over where broadband is going."
And the technology itself will keep evolving. Keeley said that Wi-Max, a broadband wireless technology that is a more robust cousin to Wi-Fi, likely will blossom in the coming year, providing another broadband choice.
"We think Wi-Max is a credible alternative," he said. "With speeds up to 70 megabits/second and a range of 30 miles, Wi-Max will be a force."
Source: Chicago Tribune (http://www.chicagotribune.com/business/chi-0512220173dec22,1,3676578.story?coll=chi-business-hed)
By Jon Van
Tribune staff reporter
Published December 22, 2005
Led by a surge of people connecting to the Internet at higher speeds, entrepreneurs are fueling another information technology boom that will grow in 2006.
This year, for the first time, a majority of Americans begin using high-speed broadband connections to go online rather than low-speed dial-ups. The proliferation of broadband access provides video and audio to millions of computer users who once obtained them solely from TV and radio sets.
"It looks eerily similar to the boom days," said Gian Fulgoni, Chicago-based chairman of ComScore Networks Inc., an Internet measurement service. "A slew of new Internet companies are competing across a whole bunch of categories. It's really jumping."
Things changed very fast, added Mitch Mitchell, vice president of the telecom practice at the A.T. Kearney consultancy. "Broadband is now just table stakes for any and all content."
Helping to accelerate the spread of broadband, phone companies like Verizon Communications Inc. and AT&T Inc. are spending billions to offer video, Mitchell said. Mobile TV sent to handheld phones and computers over wireless broadband networks will become increasingly popular in the coming year, Mitchell said.
"We're seeing a lot of experimenting," Mitchell said.
A Hinsdale start-up is one of those companies experimenting with new technology enabled by faster speeds.
At January's Consumer Electronics Show in Las Vegas, TDVision Inc. will unveil its digital three-dimension technology. The company's chairman, Manuel Gutierrez Novelo, hopes it will revolutionize the way people view video and play video games.
"Broadband allows TV over the Internet to PCs and cell phones," said Gutierrez Novelo. "It's a great time to add 3D to the picture."
At January's Consumer Electronics Show in Las Vegas, TDVision will unveil its digital three-dimension technology, which Gutierrez Novelo hopes will revolutionize the way people see video and play video games.
Old 3D technology produces fuzzy images requiring special glasses for people to see the special effects that endow scenes with depth, Novelo said. Eventually, many people using the glasses would feel disoriented.
TDVision's 3D images are fundamentally different, he said. Using a special viewer to decode the software used to create the effects, the user gets a crisp 3D image. Without the viewer, a sharp standard image remains. The technology plays on existing TV sets, computers, DVD systems and game machines.
"Our system doesn't trick the brain into seeing 3D," Gutierrez Novelo said. He said the viewer could be added to iPods and mobile phones to overcome the disadvantages of watching video on screens only 2 inches wide.
TDVision also hopes to spark 3D interest at AT&T Inc., formerly SBC, and other phone companies that plan to launch video services in some markets in 2006. To win customers who already subscribe to cable or satellite TV services, AT&T needs to offer attractive pricing and innovative products, Gutierrez Novelo said.
Like TDVision, Spring Grove-based Intermatic Inc. sees a bonanza growing out of the move to broadband. Intermatic is part of the Z-Wave Alliance, which promotes sensors and controllers networked in homes.
Smart homes can help the elderly live on their own by monitoring their health, said Mike Einstein, an Intermatic vice president. It can cut energy costs and enhance convenience.
"If you've got to stay late at the office, you can use your cell phone to reset the thermostat, so the heat won't ramp up until you're heading home," he said. "Broadband provides a continuous connection to your home computer, which controls everything in the house. With dial-up, you couldn't do this."
The increased use of broadband is changing how people use the Internet.
According to ComScore, two-thirds of Internet users obtain streaming audio or video through a portal, such as Yahoo or AOL. In June, 94 million people viewed streaming video online, averaging 73 minutes of content per viewer.
"They look at music videos, news clips and movie trailers," Fulgoni said. "They're not watching many complete shows yet, but that's coming."
Audio content, such as radio broadcasts, are also surging, as 34 million people listened to radio shows online in October, up 62 percent from a year earlier.
All this content, offered in many ways, is leading to more choices for consumers.
Kevin Martin, the chairman of the Federal Communications Commission, recently endorsed a la carte programming for cable television. That would enable customers to pick the channels they want rather than requiring them to buy packages loaded with content of no interest.
Mitchell, the consultant, said market trends also encourage unbundling content as more outlets compete with each other for consumer favor. But even as broadband technology disrupts traditional telecom businesses, executives who head entrenched businesses won't give up their competitive advantages without a fight.
Edward Whitacre Jr., AT&T chairman, has complained publicly about Internet companies like Vonage, Google and Microsoft that use his broadband lines to make money without giving his network a cut.
Whitacre and other telecom executives are backing federal legislation that would allow them to offer the traditional Internet as a standard service with slower speeds. Under this scheme, the carriers would offer their top quality service over a "premium" Internet operated by the phone companies at higher speeds.
This would enable AT&T and other network operators to charge customers more for the "premium" Internet and also let them charge portals--like Yahoo--that want to offer video content. Internet companies are certain to fight against giving phone companies such control over the Internet and they'll continue their assault on the phone companies' core voice service.
Firms like Skype, Vonage and Google will likely offer more free services such as voice calls and e-mail that use broadband and is supported by advertising, said Mark Keeley, managing director of the telecom practice at Diamond Cluster, a Chicago-based consultancy.
Also, many municipalities plan to build wireless broadband networks to serve the public for free or at low cost, Keeley noted. "Look for a regulatory response from the incumbent carriers," he said. "There will be a lot of pushback over where broadband is going."
And the technology itself will keep evolving. Keeley said that Wi-Max, a broadband wireless technology that is a more robust cousin to Wi-Fi, likely will blossom in the coming year, providing another broadband choice.
"We think Wi-Max is a credible alternative," he said. "With speeds up to 70 megabits/second and a range of 30 miles, Wi-Max will be a force."
Source: Chicago Tribune (http://www.chicagotribune.com/business/chi-0512220173dec22,1,3676578.story?coll=chi-business-hed)
