In the News

Published October 1, 2005

CPUC Wants ‘Naked’ DSL

The California Public Utilities Commission (CPUC) has called for incumbents to offer customers the option of stand-alone, or “naked” DSL apart from conventional voice service. In most markets, the incumbent telephone companies require consumers to purchase standard dial tone service in order to qualify for DSL. Qwest has been an exception, offering naked DSL in various markets.

California is the first state to interfere in this way with telephone companies’ pricing policies.

“Allowing the owners of broadband facilities to use their market power to force consumers into maintaining old, traditional wireline service as a condition of accessing broadband services destroys the very concept of consumer choice in the voice market,” said Commissioner Susan Kennedy.

Phone companies say the CPUC policy statement interferes with their right to set terms of service and meet customer demand. “Market conditions should drive decisions on new product offerings, and consumers, not government, should drive marketplace decisions,” said SBC in a statement.

VoIP, IM Integration Move Ahead

Microsoft has acquired Teleo Inc., a small start-up specializing in Voice over Internet Protocol (VoIP) software. The deal further heats up the race to integrate two-way voice into instant messaging services.

Terms were not disclosed, but analysts see the acquisition as a move by Microsoft to incorporate VoIP into its popular Microsoft Messenger feature. The Teleo technology would likely allow IM connections to carry voice as well as text. It also might allow IM users to make calls to conventional telephones.

The deal comes amid reports in Telephony magazine that AOL is planning to integrate its IM platform with a PC-based VoIP package, called MyNora, made by Carrolton, Texas-based IPcelerate. The software is aimed primarily at college students. Google has launched its own IM service, Google Talk, which features a two-way voice feature.

While most of the attention on VoIP focuses on the technology as a cheaper alternative for phone service, applications that weave point-to-point voice connections into PC applications, at the consumer and enterprise level, continue to gain ground.

Growth in IT Spending Seen

Many small and mid-size businesses say they have increased spending on information technology this year compared to 2004. Some 44 percent of technology decision makers said their spending is higher this year in a survey by Forrester Research. Another 32 percent said their budgets remained stable. Only 21 percent said they decreased spending.

The results show further evidence of the gradual recovery of the U.S. IT sector over the past three years. Forrester reported 64 percent of survey respondents said replacing outdated systems was either very or somewhat important.

When purchasing software, most respondents listed attributes such as features and compatibility over price.

Apple and Cingular Sign Music Deal

Cingular plans to offer a new cell phone that will integrate Apple’s iPod technology, allowing users to play digital music from the Apples iTunes music store.

Apple hopes the partnership will extend digital music sales to a thus-far untapped market. Cingular hopes the service, which will be exclusive to its brand, will add another value dimension. Motorola will supply the iPod phones and aims to have them in stores for the holidays.

While the device will play music transferred from a PC, it was unclear as IT&T News was going to press whether users would be able to purchase and download music from iTunes directly from the phone. The capability would not be difficult, as games and ringtones are delivered over the air today. Download speeds and the user interface, which likely will call for the extra step of saving the music file to an iPod disk in the phone, may create problems.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.