This, the first of our regional blogs, is authored by the technology and financial journalist Dominic Basulto. Dominic is a New York native, has been a senior editor at Corante since day one and has written for a number of online and offline media companies. Send tips or story ideas to: basulto@gmail.com.
About this weblog
Here we'll report daily on the latest tech and business developments in New York City. Impossible we concede: comprehensive coverage of the city's every story. What we hope you'll find: tips, tidbits and perspectives you won't find elsewhere. As well as unique insights, original interviews and more that should be of interest to New York's vibrant community of technologists and those who track, invest in and report on them.
ZDNet has details on the $600 million Vonage IPO -- the surest sign yet that the area of voice-over-Internet communication is hot. Make that sizzling hot, considering that Google is jumping into the market. The Edison, NJ-based company did not provide any juicy details on the offering, but that hasn't kept bloggers from speculating about the ramifications the deal. Suffice it to say that the company has already raised $400 million in VC funding and now provides close to 800,000 U.S. households with Internet-based phone connections. With another $600 million, the company will be able to blanket the airwaves with its "People Do Stupid Things" commercials.
Over at Gigaom, Om Malik has assembled blogosphere reaction to the deal, with Mark Evans noting that the company probably made a "strategic mistake" by waiting too long to do the IPO, while TechDirt questions why the company needs to raise so much capital. Om Malik also weighs in:
"I find the timing of this news pretty interesting! There is clearly lots of competition, including cable companies which are just cranking their sales machine and pushing VoIP like crazy. Skype, Yahoo, Microsoft and Google’s Voice-over-IM offerings are going to put some if not a lot of deflationary pressure on the prices. Price pressure is going to be rampant. Good time, to re-read my Telecom Death Spiral essay. And that’s not even taking into account some of the problems incumbents can create for all indy-VoIP people (without risking the ire of FCC, of course!)"
According to the New York Times, Verizon is making a pre-emptive strike in the city's broadband Internet market, offering a watered-down version of its DSL service at half-price ($14.95). The new DSL service will be 10 times faster than dial-up, but only about one-fourth that of Verizon's main DSL service, which costs $29.99. The half-price offering is intended as a way to entice dial-up Internet users to make the move to broadband -- and to win over these customers before cable providers snare them:
"Every dial-up customer we convert to D.S.L. takes one customer off the table for cable modem. We have a price for every budget."
In a related announcement, the company unveiled plans to form a marketing alliance with Yahoo, which has created a Web portal for Verizon customers.
Yesterday, Public Advocate candidate Andrew Rasiej released a new report ("Can You Gouge Me Now?") showing that New Yorkers are being over-charged for broadband Internet access in their homes and businesses. Instead of paying $15-$20/month, New Yorkers are paying what amounts to a "hidden Information Tax," according to Rasiej, who has been vocal about bringing free Wi-Fi Internet access to the city.
Media Citizen has details on the rally outside Verizon headquarters in Manhattan, where Free Press campaign director Timothy Karr voiced his disapproval about the high rates charged by Verizon and other broadband providers and talked up efforts by Andrew Rasiej to make community Internet access a reality. According to Karr, Verizon's attempts to monopolize the broadband Internet power through "political influence-peddling" has resulted in "fewer choices, higher costs and slower speeds" for New Yorkers.
For those of you following the Rasiej campaign, the first wave of TV ads are now running.
The Bronx will be the launch venue for a nationwide $1 billion Internet initiative (access@home) from Local Initiatives Support Corp. (LISC), the National Equity Fund (NEF) and One Economy. On hand will be Senator Hillary Clinton and former Treasury secretary Robert Rubin, both of whom are working to bridge the digital divide across the state.
Hillary explains what the new $1 billion Internet initiative means for New Yorkers:
"Today, one of the greatest catalysts for fostering economic opportunity and opening up new markets is the Internet, but for too many people, the digital divide is still too wide. All New Yorkers -- from the Bronx to Buffalo and beyond -- need to be wired with next-generation broadband technology in order to succeed in the global marketplace. With access@home, LISC/NEF and One Economy will help bring the power of technology into thousands of households so that every family can have the tools for success in today's technology-rich economy."
Last month, the New York City Council Committee on Technology and Government held another hearing on affordable broadband Internet access for all New Yorkers. Over at Government Technology, John M. Eger (the former telecommunication advisor to Presidents Nixon and Ford) follows up with a concise look at why broadband Internet access is "as necessary as water, electricity and a telephone in an earlier era, and indeed, such broadband Internet service maybe the missing link to reinventing and renewing our cities for the global knowledge economy."
The only problem, says Eger, is that "traditional cable and telephone companies are preventing municipalities from developing their own aggressive broadband strategies. The telecom industry, long dominated by AT&T, now the so-called Baby Bells, together with the large and equally powerful cable communications companies, have joined forces to prevent any municipality from providing wired or wireless infrastructures of any kind."
Peter Rojas of Engadget interviews Jeffrey Citron, chairman and CEO of Vonage. In a wide-ranging interview, Citron discusses the big picture view of VoIP, the emergence of Skype as a potential rival, the new generation of Wi-Fi phones, and E911 calling.
In partnership with Movielink, Verizon is rolling out a new service for broadband customers that will allow Verizon DSL customers to download movies directly to their laptops. The cost of "renting" a movie from Movielink will be $2.99 to $4.99, with a selection offered at 99 cents per download. Once a movie has been downloaded, customers have the option of watching it as many times as they want during any 24-hour period. After 30 days, the movie disappears from the computer.
As a Verizon DSL customer, I haven't been offered this deal, but I hope to test-drive the service sometime in the near future. From the CNET article, it sounds like the all-in cost of watching a movie will be at least $3.98 (99 cents to download, and then $2.99 to rent), which is comparable to what Blockbuster charges ($3.99) at the neighborhood rental store.
