DISH Networks reported disappointing results for the first quarter 2008 in a SEC filing. DISH indicated competition from cable and telecom carriers are main factors in their 89% decline in subscriber growth, which netted only 35K net subscribers. In the 10-Q filing DISH says, “We believe that this declining subscriber growth has been driven in part by competitive factors including the expansion of fiber-based pay TV providers, the effectiveness of certain competitors’ promotional offers, the number of markets in which competitors offer local HD channels, and their aggressive marketing of these differences.” This report offers a strikingly different result from DirecTV’s recent results which reported 275K net new subscribers, a 17% increase. DISH will officially report their quarterly results on Tuesday.

DISH appears to be falling victim to both telco and cable triple play success, and to DirecTV’s continued HD superiority. DirecTV is maximizing its HD lead over all competitors, and in DISH’s case, their advantage appears to be widening. Add telco and cable’s triple play competitive advantage, and DISH looks like it is in for a rough few quarters. They’ll have a difficult time reversing the trend, because their historical value play of low cost is vulnerable to the savings perception of the triple play bundle. Adding insult to injury, they have no trump card like DirecTV does with HD and high end sports programming. They even face a HD setback, whose timing couldn’t be worse, caused by a recent satellite launch mishap. It all adds up to an ugly situation from a DISH investor point of view. Their competitors are salivating at the prospects of luring DISH’s 13.8 million subscribers.

Vonage announced they will begin marketing DSL service through a reseller arrangement with Covad. The new service will be branded Vonage Broadband, and is expected to be offered by the end of the year. Vonage will offer two DSL packages, one at 3 Mbps and another at 6 Mbps. Vonage states in their press release, “This offering will expand Vonage's competitive position in the marketplace by integrating these services for customers who prefer this option.”

Give Vonage credit – they’re not rolling over and playing dead, despite their considerable and well publicized challenges. This new arrangement may help them address one of their most daunting issues – having to depend on their competitors for a broadband pipe into their customer’s homes. Cable and telecom companies provide the vast majority of access for Vonage to their subscriber base. But of course, those same companies offer competing voice services and aren’t exactly willing transporters of Vonage service. That being said, it’s still a significant stretch for either existing Vonage subscribers to switch broadband service providers or new subscribers to accept broadband from Vonage over the status quo of DSL, cable modem, or increasingly, FTTH. Time will tell if this resale arrangement makes any difference. For Vonage, at least it broadens their scope and capabilities, and gives them a bundle to sell. Who knows, maybe the triple play is next for Vonage. Perhaps Jeff Citron and Charlie Ergen of DISH Network are exchanging emails already.

Mediacom announced on their quarterly earnings conference call that they will up their maximum broadband tier to 20 Mbps downstream and 2 Mbps upstream to 98% of their footprint by June 30th. Mediacom joins a plethora of broadband carriers who are raising broadband speeds, with no end in sight. Mediacom says they do not intend to increase pricing for their max broadband tier which is currently $60/month for 15 Mbps down and 1 Mbps up ($75/month as a standalone service). This broadband speed inflation will certainly continue, especially among cable companies who plan to deploy DOCSIS 3.0. While Mediacom is not using DOCSIS 3.0 for this deployment, Comcast has launched DOCSIS 3.0 already. It promises to dramatically increase broadband speeds and introduce other competitive value adds.

Cablevision, a cable triple play pioneer, announced plans to launch a broadband wireless network covering their New York metro footprint within two years. The new network will be based on Wi-Fi mesh technology and will be offered at no charge to existing Cablevision customers and for a fee for non-Cablevision customers. Cablevision has about 3.3 million customers and an industry leading broadband penetration rate of 50%. This launch follows a trend by other smaller cable MSOs and broadband service providers, who see broadband wireless networks as a value add opportunity for existing customers.

This is not just about broadband Internet access though. For example, Multichannel News describes a possible scenario offered by Cisco, where “… a Wi-Fi mesh network could allow a cable operator to offer subscribers ubiquitous connectivity in a metro area for any service. For example, someone watching TV could choose to transfer the video signal to a cellular phone and walk outside if Cisco’s Cable Service Mesh is deployed in the subscriber’s neighborhood.” Applications like that could provide tangible competitive advantage. At least until Verizon integrates a similar service utilizing FiOS and LTE. With announcements like this and the recent WiMAX joint venture featuring prominent cable companies, it appears as if cable is getting their wireless mojo going.

Several blogs including EngadgetHD and UverseUsers.com are reporting on AT&T launching two streams of HD for U-verse subscribers in the St. Louis market. These U-verse customers can receive 2 HD and 2 SD streams, for a total of four streams. Most people who follow DSL powered IPTV recognize that HD is a challenge because of its bandwidth intensity. Most of us also realize that offering HD is a competitive necessity. IPTV providers who utilize DSL as their access technology are at somewhat of a competitive disadvantage against cable and DBS over HD.

Never mind the costs associated with encoding HD content (which, for everyone further down the food chain than AT&T, is a challenge), the challenge with delivering a single HD stream over ADSL2+ (or even VDSL) is significant enough. But in order to compete with cable and DBS, who currently have multi-stream HD capability, delivering two streams (and some would argue even more in the future) is ideal. We are progressing towards HD ubiquity. We’re certainly not there yet, but we will be soon. The concept of multiple HDTV’s in the home, or the desire to watch one HD program while recording another, will become commonplace, and sooner than DSL IPTV providers wish it to. AT&T’s move into two stream HD over their FTTN/VDSL architecture provides a glimmer of hope, It’s too early to tell if they can scale that solution and match their competitors offer. But for them, and for those who look to them for guidance, it’s a start.

A new report from Juniper Research suggests that the burgeoning WiMAX opportunity has the potential to take 12% of DSL customers from existing service providers within 5 years. The report’s author Howard Wilcox says WiMAX will be particularly attractive in “…areas where the existing DSL speed is suboptimal.” Wilcox points out, and rightfully so, that WiMAX deployments will start out as fixed broadband wireless deployments, and WiMAX service providers will aggressively pursue existing broadband subscribers. WiMAX will have a competitive advantage as well – portability. Customers will be able to take their broadband access with them, both locally (where coverage is available), and nationally (assuming adequate roaming relationships get established). That advantage will grab the attention of some existing broadband subs.

Of course, this won’t be a “cake walk” for WiMAX providers either. There are several details to be worked out, the most important of which is proving the technology works on a massive scale and can provide the level of service that customers will expect and demand. Wilcox also points out another important one, “Brand identification and service differentiation are major marketing challenges facing new WiMAX operators.” Predictions like this one are sure to multiply in the wake of the recent news of Sprint and Clearwire joining forces with Intel, Google, and the cable industry for a massive WiMAX boost in the U.S. Assuming the deal consummates and the technology works, WiMAX’s impact on the competitive landscape for both wired and wireless broadband cannot be underestimated.

Update - May 7, 2008: It's official. Sprint and Clearwire announced the formation of the "new" Clearwire, as discussed below in the original May 6th post.

A mega deal which involves Sprint, Clearwire, Intel, Google, Comcast, Time Warner Cable, and Brighthouse Networks is on the verge of being announced according to the Wall Street Journal (subs. req.). The deal will merge Sprint and Clearwire's WiMAX assets into a company valued at $12 billion. The company will retain the Clearwire brand and will be led by Clearwire's CEO Ben Wolff. The cable company investments totaled over $1.5 billion, led by Comcast who ponied up over $1 billion. The deal has been rumored for months. It is expected to be announced as early as Wednesday.

It appears as if WiMAX will now have the foothold it needs to become a 4G wireless force in the North American market. Cable companies including Comcast, Time Warner Cable, and Brighthouse will now have access to a legitimate broadband wireless network and begin the long process of integrating wireless opportunities into their core business. The deal will allow cable companies to sell broadband wireless under their own brand. It's somewhat surprising that cable companies and Sprint are partnering for another wireless venture, given the failure of their previous joint effort, Pivot Wireless. Perhaps Pivot's demise was intentional to make way for Clearwire. It's not clear what this development means for cable's AWS spectrum holdings. Regardless, this new WiMAX momentum will provide interesting competitive observations. Sprint will conceivably gain a considerable 4G lead over their main competitors, AT&T, T-Mobile, and Verizon, who have all tagged LTE as their 4G technology of choice. It will be at least a couple years before we see them bring something to market though. It's some welcomed news for Sprint, which has seen nothing but rumors focused on their troubles swirling for the past few weeks.

Google has petitioned the FCC regarding Verizon’s win of the 700 Mhz C block spectrum. Google pushed hard for, and won, an “open” mandate for the winner of the 700 Mhz C block. The mandate basically says that the winner of the spectrum must provide open access and allow devices from any source to access the broadband wireless network utilizing that spectrum. Google sees this open access mandate as a gateway for its upcoming wireless Android platform, which will potentially drive millions of users towards their products and solutions. Google believes those same potential users may not be able to easily reach and use Google’s wireless focused products without that open access provision. The competitive implications are numerous because most wireless Internet access is now controlled by wireless carriers through restrictions and “walled garden” approaches. Opening it up, would allow competitors to build relationships with wireless subscribers and perhaps create the “dumb pipe” scenario for wireless broadband, where wireless carriers simply provide a pipe to the Internet, and don’t create any additional value/revenue for them. It’s the same issue currently being debated by wireline broadband carriers – should I just provide the pipe, or should I try to build more value around that access for which I can create incremental revenue.

Of course we know that Verizon and other communications conglomerates are quite crafty. According to Google, Verizon interprets the open access rules a little differently, and don’t intend on providing open access on its own handsets. Google also contends that the open access provision, while being offered through non-Verizon handsets, will be offered at presumably much higher access costs to the consumer, thus discouraging its use. Google is asking the FCC to deny Verizon’s winning bid for the C-block spectrum, which Verizon won for $4.7 billion, unless they take a more broad approach to the open access mandate. This will be one to watch, because its outcome will have profound implications on the wireless competitive landscape.

Read more insight on this issue at the IP Democracy blog.