DIRECTV Broadband Shuts Down

Phroggy writes "Effective today (Friday the 13th), DIRECTV Broadband is officially out of business. The company will remain partially operational for the next 60 to 90 days, and we will work to transition our roughly 160,000 customers to another provider. Details are still sketchy. So, anybody gonna be hiring in the Portland area in a couple months?" There's a press release about the shutdown.

Comments

Doesn't look good for anyone

[SteweyGriffin]

I got to reading some other headlines about broadband companies. This got me to thinking -- is anyone doing well in this market right now?!

This is really upsetting because broadband is so important to so many people these days. Geeks, eBay'ers, etc. need to be connected, and ISPs, telcos, etc. don't seem to be able to provide fairly cheap, reliable service.

Hughes shutdown strands broadband users
CNET News.com - 8 minutes ago ... Satellites, digital subscriber lines and cable modems are the three
major ways Web providers deliver broadband to homes and offices. ...

Hughes to close terrestrial broadband operation
Bizjournals.com - 1 hour ago ... DirecTV Broadband, based in Cupertino, was acquired by Hughes in April ... it's working
toward transitioning existing customers to alternative service providers. ...
Hughes Shuttering a Fast ISP Unit - TheStreet.com

Broadband prices to rise in early 2003
ZDNet.co.uk, UK - 7 hours ago ... help ISPs stimulate the UK broadband market, which has already boomed over the last
12 months. "Recent advertising campaigns from BT and its service providers ...
BTw in new year ADSL promo - The Register

AOL's Iffy Broadband Deals
InternetNews.com - 12 Dec 2002
But the hefty carriage fees it faces from cable providers add up to iffy
prospects for making money off broadband, consumer advocates say. ...
The Layoffs That Stole Christmas - Washington Post
AOL's Iffy Broadband Deals - InternetNews.com
AOL's Parsons: "This Isn't Terminal" - BusinessWeek

Local cable TV, Internet choices debated
Hampton Union, NH - 7 hours ago ... necessary because he has heard residents complain about the lack of options from
AT&T Broadband and Comcast, the town's current Internet and cable providers. ...

BT fails to make the connection
CW360.com, UK - 14 hours ago ... why doesn't BT act as a branded reseller for third-party cable service providers? ... Instead
of waiting until the local level of demand for broadband justifies an ...

Re:Doesn't look good for anyone

[hudsonhawk]

Sure, someone's doing well - the LEC's. Its their obscene fees that keep anyone but them from providing affordable broadband. DSL should be affordable - cable just has too high of a rollout cost, and too many points of failure. But since the FCC has pretty much decided to just ignore the laws mandating local competetion, there's little that can be done.

Other than giving your location-mandated baby Bell even more money for shitty customer service and outdated equipment.

Scott

Re:Doesn't look good for anyone

[dissy]

I think your comment hits the problem on the head...

> Geeks, eBay'ers, etc. need to be connected, and
> ISPs, telcos, etc. don't seem to be able to provide
> fairly cheap, reliable service.

You cant have everything for nothing.
You want expensive services for cheap? No one can do it.

As long as T1's and T3's cost the price they do, _someone_ has to bear that. The customer complains it shouldnt be them it should be the ISP. But why is that exactly?

The only reason in the past for an ISP to do this is to get a T1 and share it with say a number of dialup ports.

Unless you want your DSL/Cable to be 64k or less each way, the numbers dont make finantual sence to the ISPs to not raise prices to charge accordingly.

You want a megabit down? That costs an ISP $1500/month. You people want that for $40/month and not have it shared with 40 or more other people, yet there is no other way to break even, let alone make money.

<rant>
I would love to have that too, but I would also love free art, obtainable medicines for those that need it, not charged to use the airwaves around me, to be able to travel into space, and to be able to modify my own DNA at my whim, and a large number of other things.
As of yet, none of this is happening even though it is all very possible and we are just as capable of doing right now.

<bigger rant>
As long as governments allow the raping of the people by providing one company with a monopoly, and outlawing all competition, all we can do is fight them to give us our USA back. But too many people dont care and are fine with it, so nothing will change except for the worse.
</rant></rant>

That is the problem that needs fixing.

Now on to phase two.. Ideas. Got any? I sure dont :(

Re:Doesn't look good for anyone

[nelsonal]

I think there are two reasons. First the current users of broadband use a lot of bandwidth. Companies were hoping that the eventual subscribers would be a cross section of narrowband customers, not high bandwidth users. This drives up the company's network costs, T1's and above are not cheap.
Second, adoption rates have not been good at all, the companies were expecting much higher penetration rates by now, and most of them spent too much money on capital equipment. Now they aren't running at capacity, and are unprofitable. This compbined with the new investment focus on cost cutting, means that they are leaving quickly. Sprint probably took the DSLAM from your area, to an area that was already operating at capacity, so they didn't have to buy another one.

Duhh

[Anonymous Coward]

Well, golly gee another DSL provider going under....

There is no money in DSL because of the crap that you need to do to get into a CO, and then on top of that you are at the Mercy of the LEC (Ma Bell) to get new customers......

Hughes/EchoStar merger collapse killed it.

[brickbat]

I'm surprised no one has picked up on the fact that DirecTV DSL's demise was largely due to the failed merger between Hughes and EchoStar (owner of the Dish Network). Anytime a large merger fails, the losers have to jettison the dead weight that might have otherwise been supported through the strength of the combined companies. DirecTV's broadband operations are expected to lose more than $100 million this year, so it's not surprising that Hughes pulled the plug. Especially when you consider the service did not share infrastructure with the satellite operations (essentially Hughes bought Telocity a year and a half ago and repackaged it with the DirecTV service).

Re:Serves You Right!

[Anonymous Coward]

I can never understand why people pay bills they do not owe.

Did you complain to the BBB?
Did you write a letter to the President of DirecTV?
Did you sue in small claims court?

Re:this is no good

[techluvr]

I use Earthlink and haven't had any problems with them. I used to use Telocity which got bought out by Direct TV. When this happened Direct TV informed me that they could not give me service in my area. After some shopping around I hooked up with Earthlink.

After using Earthlink for a few months Direct TV started billing me again for service. They had decided to hook me up again without telling me and then billing me for service that I was not using. They did this to me several times. I ended up having to raise hell to get this fixed.

I've called Earthlink a couple of times for support and they're rock solid. The only drawbacks are that you have to pay an extra $15 to have a static ip address on top of the $50 per month.

The only thing that sucks about the news concerning Direct TV is that people will be loosing their jobs and that's the last thing this crappy economy needs.

Re:Sad, but necessary

[Loki_1929]

"A proper business plan would have included a limit. For example, 10 Gigs for $50."

No.

If we're going to take this simplistic view of their business model, let's at least think it through to a minimal level. First of all, you lose a number of potential customers who fear going over the limit (or know for a fact that they will). Secondly, you have additional costs associated with such things as having to constantly tell people how close to the limit they are and having customers dispute how much they've transfered in a given time period. You'll then lose those customers who you don't give in to and they'll generate significant bad press. You can also forget collecting the last month's bill from many of those who leave who will decide that since your company is so incredibly greedy, you deserve nothing. Next, for the few customers you have left, most of them will switch as soon as an otherwise comparable service without the 10GB limit becomes available to them.

So, after cutting off potential revenue, alienating otherwise loyal customers, racking up huge numbers of "uncollectable"'s, and generating enough bad press to make Arie Flischer cry, your company's offices are raided by your creditors just before your disgruntled former customer burn your offices to the ground. Congratulations.

Caps work in very specific situations: when you have a monopoly on high-speed internet access, when your customers are perfectly happy to take limits on their use, and when any potential competitors also have similar limits. A better idea would be to introduce a tiered pricing scheme with limits on speed, as opposed to data transfer. A service at around $20 per month with speeds only slightly higher than dial-up would slaughter the dial-up market (same cost, better speed, no dialing up/missed calls/annoying modem noises), a $50 tier with speeds similar to what we see today in home broadband, and one or two higher end services with speeds that go up along-side the price; perhaps in the $100 and $200 ranges. This effectively limits your customers' total monthly data transfers without imposing limits that would increase costs to you while alienating your customer base.

But then again, any business with a single and specific method of generating revenue is pretty much doomed to fail anyway. Diversification is a necessary component in any business model, along-side strong management and adaptability. While you may wish to turn a cold shoulder to the so-called "power users", I would much rather solve the situation by putting a well thought out tiered pricing scheme in place, and modifying it once a year to ensure costs stay in line with revenue.

Then again, I'm a "power user" who eats up plenty of bandwidth (no comments about pr0n/warez/etc necessary, I'm talking about dBase transfers), yet I pay Comcast twice as much as their average home user, and do so without complaint - as I suspect many "power users" would do if offered the chance. The simple lesson to be learned is this: don't restrict your customer, give them more options to choose from and ensure that any choice they make benefits you. You come out looking like the good guy while still maintaining a strong revenue foundation.