Benner on Tech: Cablevision Targets Telcos and Happy Hours Run Amok

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

Pity the poor cellular network operator.

Cablevision says that it’s going to introduce a new, low-cost, wi-fi based mobile phone service called Freewheel that’s only $9.95 a month for existing Cablevision internet service subscribers. If you’re not a customer, you can get the service for $29.95 a month. It won’t work everywhere, but it will work in areas like college campuses and cities where there are lots of wi-fi hotspots. (The Wall Street Journal notes in a piece about challenges for the wireless carriers that wi-fi networks already carried more than 90 percent of all mobile data traffic in the U.S. in 2013.)

Here’s another way to look at the news.  Right now I give Verizon $120 every month so that I can connect my phone to the Internet via the company’s network every so often and connect via wi-fi far more reliably pretty much all of the time. Cablevision will soon give me pretty decent connectivity for a quarter of the price.

Freewheel is far from a Verizon killer. It won’t be truly reliable until we have something akin to a nationwide wi-fi network, so lots of people will find it tempting but ultimately worthless. And the service only works with one phone, the Motorola Moto G, which knocks out users who love their iPhones and Galaxy devices.

Even so, Cablevision’s intent to encroach on cellular turf is notable. The cable operators are already winning the broadband war. They have a series of discrete regional monopolies, so if Cablevision, Time Warner Cable, Comcast and Charter have any broadband competition, it’s usually just a content-less phone company like Verizon, T-Mobile, AT&T and/or Sprint. The phone companies, thanks to some architectural constraints, can’t deliver broadband everywhere anyway. Unsurprisingly, customers usually choose cable for their broadband connection and the telcos fight over the scraps.

But mobile phone plans are another story. The phone companies control them (and the rates we pay to stream data into our devices.) This setup is reinforced by the idea that wireless carriers subsidize the phones and tablets that we buy in order to lock us into their networks. Now a cable guy wants a piece of the mobile data action too – the market where the telecom companies have a big advantage. 

I see this and wonder, in the near term...

  • Does the specter of net neutrality make cable companies more tempted to break into the mobile market?
  • How long before the telcos find a way to offer content too?

Ventureland

Commercial license plates may not be necessary for drivers that work with ride-sharing apps like Uber and Lyft, the San Francisco Chronicle reports.

Coinbase will launch the first licensed U.S. bitcoin exchange on Monday, the Wall Street Journal reports.

Transferwise, a UK-based peer-to-peer money transfer company, raised a $58 million Series C round led by Andreessen Horowitz, TechCrunch reports. (Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.)

Product Hunt threw a happy hour and 3,700 people showed up. The story by GigaOm’s Carmel DeAmicis reads like a blast from the past.

Top 40 music pulses in the background as founders, techies, PR people, salesmen and reporters mingle. “I didn’t know what it was, but I saw the Facebook event group and thought I should find out,” a social media professional in pointed heels and a tailored dress tells me. When I ask a co-founder of an online music merchandise service why he came, he says, “I don’t know. It’s a viral thing. People feel like they have to be a part of it but they’re not sure why.”

People and Personnel Moves

Greg Wyler may beat Elon Musk to the satellite punch. According to Ashlee Vance’s profile of the OneWeb CEO in Bloomberg Businessweek, Wyler preached the gospel of connecting the world with satellites long before Google invested in SpaceX.  

Companies

AOL…

The company is dramatically reorganizing its sales staff and the plan will likely include layoffs as well as selective hiring that’s designed to strengthen the company’s programmatic advertising technology, Re/code reports.

Apple…

Apple Pay is only three months old, but its relative success is fueling the idea that consumers could adopt mobile wallets, reports the Wall Street Journal.

Google…

** YouTube will now air NFL highlight clips, Re/code reports. The clips will also show up in Google search results.

**Kirt McMaster, the CEO of Cyanogen, said during an event held by the Information that he wants to build an open version of Android to fight against what he characterized as Google’s “tyrannical” control over the operating system.

** The company recently revealed it gave the U.S. government emails and other data that belonged to three WikiLeaks staffers, the Guardian reports.

Qualcomm…

The company plans to get a new version of its Snapdragon chip to Samsung following reports that the chip overheated, the Wall Street Journal reports.

Cybercrime Blotter

Verizon Wireless’ use of cookies could make consumers vulnerable to secret tracking and other privacy concerns, the New York Times reports.

Journalist and activist Barrett Brown was sentenced to five years and three months in prison for interfering with a federal investigation into a 2011 hack of Stratfor (and for threatening a federal agent), Time reports. Journalist Quinn Norton says Brown’s sentencing shows just how perilous it is for those reporting on hacking and data breaches.

Media Files

Sling TV, Dish’s streaming video subscription service, now offers select cable content for just $20 a month. Re/code’s Peter Kafka has all the details. 

Messaging apps may get a boost from media and other companies that want to create buzz beyond the homepage, the New York Times reports. Publishers, game companies and even retailers are trying to find creative ways to use Instagram, WeChat and Snapchat as portals for mobile content and commerce.

News and Notes

HealthCare.gov will now share less of our data with private companies that could profit from our personal information, the Associated Press reports. The Obama administration made the change following an earlier AP report about the website’s questionable privacy practices.

(Corrects source of Apple Pay report in paragraph about Apple in column published Jan 26.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Timothy L. O'Brien at tobrien46@bloomberg.net