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Verizon today announced that they will rescind the plan to impose a "supplier surcharge" fee on DSL users.
According to Verizon CMO Bob Ingalls, "We have listened to our customers and are eliminating this charge in response to their concerns". In other words, we tried to pull a fast one, got caught and now we're backing down.
This morning, I received an email from Verizon, concerning my DSL service.
The email alerted me to the fact that the federal tax known as FUSF (Federal Universal Service Fund) was no longer to be collected. Depending upon your level of service, this was a fee of $1.25 or $2.83 per month. This was part of a decision last year by the FCC to stop regulating DSL, therefore eliminating the need for the FUSF fee to be collected. Based upon this, consumers should have expected to see a modest reduction in their monthly bills, due to the elimination of the FUSF.
However, in reading my Verizon DSL email, it appears that they couldn't bear to pass that reduction on to their customers. Instead, they indicate that "Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds." In essence, they've taken the amount of the tax (which they had to remit to the government) and shifted it into a new line item as a fee.
Now, I have no problem with Verizon charging whatever they want for DSL. I believe in competitive markets, and with cable and other competitors entering the market, Verizon should determine its pricing. But, I think its disingenuous to position this as a "fee" rather than part of the service price. It lets them continue to advertise a lower monthly rate than their customers can expect to actually pay.
The big telcos have already been the recipients of huge tax credits to help them build up the Internet infrastructure (as Cringeley has described more effectively than I can). If people can't understand why we need Net Neutrality, this is just another example of how the telcos operate and why we can't let them change the playing field.
Update: Apparently the FCC is not too thrilled with Verizon and BellSouth efforts to mask price increases as fees. Also see comments from TechDirt on the matter.
A few moves of note this week in the content industry.
Dow Jones has recruited Gordon McLeod to serve as President, Dow Jones Online. McLeod, who will report to Todd Larsen, will oversee the Wall Street Journal Online, Barron's Online and MarketWatch.com. McLeod previously held various roles at Time, Inc., most recently serving as General Manager of Time Inc. Interactive. Prior to that, he served as President of Time's SI.com.
According to PaidContent, McLeod's role will be an expansion of the GM role previously held by Nathan Richardson, who left Dow Jones earlier this year to pursue a humanitarian position with the International Rescue Committee's Liberia office.
VNU has named David Calhoun CEO and Chairman of the Executive Board, succeeding CFO and interim CEO Rob Ruijter. Calhoun comes to VNU from GE, where he served as CEO of GE Infrastructure and Vice Chairman of the parent company. At GE, he oversaw a collection of businesses with revenues of more than $47 billion and 85,000 employees. Calhoun came up through the GE management program, spending 27 years with the Company before joining VNU.
Also this week, BusinessWeek has hired Roger Neal as SVP and GM of BusinessWeek Online. Neal previously was director of business development at eBay.
Like the cobbler with barefoot children, sometimes we're so focused on products and client engagements that it's hard to find the time to freshen our own website.
Today, Alacra has launched an updated version of its Alacra.com site.
The new site has an updated look and improved navigation. The content has been enriched with more detailed information about our products, including our newest products Alacra Compliance and Current Awareness. A dynamic company timeline provides highlights of our ten-year history.
A special thanks goes out to Jarid Lukin, Alacra e-Commerce Director, Design Intern Linh Pham, Marketing Manager Carol Ann Thomas and the rest of the team who contributed to this effort. The project went from concept to live in about eight weeks, pretty remarkable for a project of this scope.
When I heard the news this morning that Tower Records was shutting its doors as it declared bankruptcy for the second time in two years, my heart sank. Tower had been a huge part of my music life for many years. The Greenwich Village Tower, on West 4th and Broadway, in particular had been a place to go, not only to buy CD’s, but to discover new bands and even meet new people. Prior to Tower’s opening the Village store in 1983, boutiques like Second Hand Rose and Bleecker Bob’s were my primary sources of music. Then came Tower, with its vastness and diverse collections, and it became my top music source.
Then, I thought about the last time I was actually in a Tower Records store. It was probably about three or four years ago, and then was simply to kill time before meeting a colleague for drinks nearby. I realized that, while I still buy some CDs, I’ve bought them almost exclusively from Amazon for the past 10 years. And today, I’m more likely to download music from eMusic or iTunes than to buy a CD, unless I know that I want the whole thing.
And while Tower once seemed a great place to discover music, that discovery process was mostly serendipitous. No one there knew my tastes, and they certainly didn’t store my listening patterns. Today, I’m much more apt to use Last.fm or the music blogs via Hype Machine to identify new music. While I might have been able to find Lily Allen’s Smile playing at Tower, it’s much easier to browse the blogs, listen to a few samples, then download a track or two.
While someone is likely to buy the Tower name, it’s unlikely that any buyer will retain their brick and mortar stores. And, while part of me wishes they could survive, I also realize that I'll hardly notice it when they're gone.
Content industry analysts Outsell announced today that they'd acquired Electronic Publishing Services, Ltd. ("EPS") of London.
EPS has a 20 year history, providing market intelligence and consulting services, typically for large, international publishers. They publish a Market Intelligence and Advisory Service that crosses STM, education and business information. Founder and Chairman David Worlock leads a team of 14.
Outsell has a team of more than 35 analysts (including those in its extended network), serving sellers and buyers of content, as well as those in the investment community.
According to Outsell CEO Anthea Stratigos, the merged company will serve more than 300 clients globally and have a team of nearly 60 people. The company will maintain offices in London and San Francisco. David Worlock will join the merged company, serving as Chief Research Fellow.
Update: Read Rafat's comments, as well as the official press release from Outsell.
Gartner, today, released its 2006 Emerging Technologies Hype Cycle Report. The annual report which shows where Gartner analysts (if not their clients) will be focused for the coming year, listed Web 2.0, Real World Web and Applications Architecture as the three big emerging technologies.
Within Web 2.0, Gartner focuses on four trends and technologies:
Of these four, Gartner views Collective Intelligence as having the highest potential impact, as a “transformational technology” in Gartner terminology, but with mainstream adoption 5-10 years down the road. Social Network Analysis and Ajax are both considered high impact, with a much shorter time horizon – less than two years. Mashups have only moderate impact (which they already have achieved IMO), again with a less-than two-year horizon.
The challenge for many organizations is that to fully embrace Web 2.0 often means a major change in your business model. While it’s easy to begin using Ajax, it’s much harder to shift from a centralized, controlled environment to an open source or collective intelligence approach. While the early success stories for Collective Intelligence have occurred in the consumer space (think MySpace or YouTube), innovative companies will identify ways to harness this in the enterprise environment.
The key for content providers today is to begin to use these tools and make them a part of their daily routine. Create a development sandbox and see how your users begin to interact with these technologies. Over time, as these technologies move towards mainstream adoption, you’ll be well-positioned to take advantage of them.
For more insights on the Gartner report and Web 2.0, read posts by Dion Hinchcliffe, Paul Kedrosky and Peter Rip.
Via Rafat, Bankrate has announced the acquisition of three websites from East West Mortgage for $4.4M.
The three sites, Mortgage-calc.com, Mortgagecalc.com and Mortgagemath.com, as you might expect, all provide calculators and utilities to help compute mortgage payments, along with supporting articles, white papers and other materials for consumers evaluating loans.
The new sites should provide additional traffic for Bankrate's display and yperlink ad sales.
Bankrate announced 2Q earnings of $0.23 per share for the quarter. Q2 revenues of $19.7M were flat from Q1, but up $7.3M from Q2 of 2005. During the conference call, Bankrate CEO Tom Evans indicated that they continued to look for new acquisitions, leveraging the $90M raised in May for that purpose.
As more and more sites allowing transactions between individuals, buyer and seller reputations become a valuable currency. Your reputation on sites like eBay or Craigslist, is critical if you want strangers to trust you enough to do business.
Those buyer and seller histories are one of the stronger assets of auction and classified sites. It also becomes a huge switching cost for those who might want to move to a different platform. If I have a strong eBay rating, I would be unlikely to switch to a different auction site, where I would have to start building that reputation again.
This concept, of “transactional trust” was the focus of a recent study, commissioned by Rapleaf, developer of a portable reputation system. The survey was developed and run by Scott Allen, author of the Virtual Handshake, and focused on how transactional trust is developed between strangers in virtual markets.
The survey included both online buyers and sellers and focused on what factors each used to assess the trustworthiness of potential sellers or buyers.
Not surprisingly, buyers indicated that the posted ratings of the seller were the top criteria in determining trustworthiness. Second was “reputation of the site or publication”, followed by “payment method you are using”.
For sellers, the number one criteria was payment method. Paypal and credit card users are considered fairly safe by most. Sellers indicated that “posted ratings of buyers” was second, perhaps surprising as these are often less comprehensive than ratings for sellers. Other criteria with a strong showing were the reputation of the site, intuition and email or phone interaction with the buyer.
The survey makes it clear that both buyers and sellers are still struggling to assess trustworthiness of those whom they buy, sell or trade with.
Rapleaf, sponsor of the survey, has developed a portable reputation system for e-commerce transactions. Rapleaf’s aim is to become the independent database of transactional reputation.
The concept of portable reputation is compelling. The challenge for a company like Rapleaf is that it will be difficult to develop a large enough database to make it a trusted source. Ratings are the crown jewels of e-commerce companies like eBay and Amazon and they make it easy for buyers and sellers to rate their counterparts and will surely resist efforts by outsiders to play in their space.
