Channel-Lands See Few Winners in Net Neutrality Ruling

Like the rest of the world, the Channel-Lands’ questions about how the Federal Communications Commission (FCC) would act on the Net Neutrality issue were finally answered. Unfortunately, few people were happy with what the feds said. For what was supposed to be a slow week leading into the Christmas holiday, Net Neutrality was just one of the big news stories to hit the Channel-Lands this week.

Net Neutrality Ruling Makes Few Happy

The FCC made official its much-anticipated ruling that prohibits Internet carriers from discriminating or impeding lawful traffic crossing their networks, but does allow for “reasonable management” of network traffic. In other words, carriers can charge content providers for priority traffic.

Net Neutrality has been a hot button issue for years as carriers have repeatedly floated trial balloons to either block or impede high-bandwidth content providers’ traffic crossing their networks. Net Neutrality proponents want the Internet to remain open and for traffic to pass to pass unimpeded regardless of its content.

Carriers, on the other hand, say video and multimedia traffic are congesting their networks and need to charge content providers and consumers surcharges to cover the expense of upgrading networks. Opponents charge that these surcharges and the ability to throttle traffic could be used to keep carriers – particularly TV cable companies – from losing subscribers to companies such as Netflix.

The most recent Net Neutrality spat happened this fall when Comcast throttled the traffic of Level 3, a hosting company for Netflix. As much as 20 percent of U.S. Internet traffic is now generated by Netflix, and Comcast wanted concessions for allowing traffic to cross its network. Netflix increasingly is turning the Internet to stream video, and that’s costing Comcast subscribers. The two companies quickly settled the dispute.

While the FCC ruling prohibits carriers from blocking traffic, it does allow premium services. The reasonable maintenance and provisions for enforcing security also provide the carriers leeway. The ruling completely excludes wireless networks from governance.

Generally, all sides in the debate are disappointed. Critics charge the ruling does little to stop carriers from creating different tiers of service, and potential access charges could stymie innovation.

The next question is whether the FCC has the authority to set these rules. Previous attempts by the commission to regulate the Internet have been struck down in court. Even Congress has warned the FCC not to create these rules. Observers say a court case is likely with the first FCC enforcement action.

Microsoft Makes Windows Version for ARM

Apple has sold tens of millions of iPhones and iPads. Samsung made a big splash in the tablet market by selling a million Tabs out of the gate. And Google is reportedly readying a tablet for debut next year. Largely left out of the tablet story is Microsoft. But that’s might change.

Last week Microsoft announced a partnership with ARM to develop a full version of its Windows 7 operating system for processes that dominate the mobile device market. The potential impact of the partnership is huge, since it would make nearly full functionality of Windows available to mobile users and make Windows more competitive in the mobile device arena.

Microsoft has lost ground in the mobility market with the failures of Windows Mobile 6.5. Tablet, and smartphone manufacturers have flocked to Android as the choice for powering mobile devices. Microsoft has begun to make up lost ground with the successful launch of Windows Phone 7, which has sold more than 1.5 million units. ARM versions of Windows 7 could power a greater mobility rebound for the software giant.

HP Launches Trade-In Program Against Cisco

Hewlett-Packard, officially the world’s largest technology company, is fighting both offensive and defensive battles on several fronts, but probably none more interesting that the war with former ally Cisco. This week, HP turned up the heat by targeting Cisco’s core switch business with a competitive trade-in program.

The “Catalyst for Change” program provides solution providers an additional 20 percent discount off the list price of HP A- and E-series switches when customers are “trading in” qualifying Cisco Catalyst or Nexus switches.

Cisco has dismissed the trade-in program as marketing fluff that will not deter customers who appreciate the performance and innovation of its products. Even HP isn’t coy about admitting the limited impact of the program, stating that it’s mostly designed to draw attention to alternative network offerings. Behind the scenes, HP is making a full-court press in core networking, providing partners with training, marketing tools, rebates and spiffs for leading with its ProCurve products.

The impact of increased competition cannot be understated. While Cisco remains the clear market leader in every segment of switching and routing, its lead is being eroded by HP, Juniper, Brocade and other alternative vendors.

Scandal Lingers over HP, Hurd

Hewlett-Packard can’t get out from under the dark cloud known as the Mark Hurd scandal. It probably comes as little comfort to the HP leadership team that Hurd, now co-president of rival Oracle, is stuck under that cloud with them.

The Securities and Exchange Commission is probing the circumstances of Hurd’s departure last August amid allegations of inaccurate expense filings and inappropriate relationship with a female contractor, Jodie Fisher. The sudden resignation of Hurd caused HP’s stock value to tumble 10 percent, and it has yet to recover.

The lost stock value and the cloak of secrecy around Hurd’s departure have spawned several shareholder lawsuits. The SEC is reportedly looking into the inaccurate expense filings – the official reason Hurd was asked to resign – and whether Hurd told Fisher, who acted as a hostess at corporate meetings, about the EDS acquisition prior to its official announcement.

Ironically, the chronic rekindling of the scandal is precisely what the HP board of directors had hoped to avoid by pushing Hurd out of the CEO post.

The latest round of this scandal doesn’t end at the SEC. Hurd is fighting to keep documents related to Fisher’s sexual harassment claims sealed. A Delaware judge is reviewing requests by shareholders to break the seal and reveal the nature of Fisher’s allegations that precipitated Hurd’s departure.

The probes are not hindering either HP or Oracle. HP is pushing ahead with the integration of recent acquisitions, such as 3PAR. Oracle is racing new integrated software/server packages to market that compete directly with HP.

McBain’s Journey Ends in Albany

Last week started with surprising news that Jay McBain, director of Lenovo’s SMB channel, was leaving the Chinese PC maker for parts unknown. By Wednesay, his new home was announced: Albany. He is going to work for Autotask as senior vice president for strategy and market development.

McBain, considered a forward thinker in channel models and technology adoption, believes the next decade will be one of migration to cloud computing and solution providers will be at the center of that migration. Autotask, whose software enables solution providers to better track cloud services, will be a catalyst of that migration, he says.

McBain’s announcement comes just days after Autotask founder Bob Godgart turned the CEO post of the company over to Mark Cattini. Godgart is now the company’s “chief visionary officer,” and McBain will report directly to him.

Well, that’s all the week’s news from Channel-Lands where all the technology works, all the deals are profitable and all of the companies are above average. Happy Holidays, everyone.