California dreamin'

We just came back from visiting our daughter and son-in-law in California. They bought their first house about a year ago. They are both professionals, with no kids (yet), so it's a pretty nice house in a nice neighborhood in Elk Grove, Calif., a suburb of Sacramento.

Their home was built in 2005, in a new development, in an affluent suburb of the capital city of the richest, albeit least solvent, state in the union. As such, it is well served with an abundance of broadband connectivity and services.

The local telco serving Elk Grove is Frontier, a large and well-established Tier 2 carrier. Comcast has the cable franchise in Elk Grove. There's a Frontier terminal and a Comcast tap in the front yard. There's also a terminal belonging to another telco, SureWest. SureWest is an Independent telco based in Roseville, another Sacramento suburb. SureWest has expanded its footprint to compete with Frontier and AT&T in many local suburban neighborhoods, including this one.

Our daughter's home is equipped with a full complement of telecommunications equipment. There are two TV sets, one of them a 52” flat-screen HDTV. There's a Wii console connected to the big TV in the family room. There's a computer with a high-speed Internet connection. There's a wired telephone line with a cordless handset. And both my daughter and her husband have cell phones from AT&T.

A couple years back, when they moved from an apartment into a rental house, they decided to go wireless and dropped their Frontier phone line. So I was a little surprised when they ordered a voice line for their new home. There's a cell tower just across the road from the neighborhood, and reception is excellent, even indoors. They patiently explained that now that they are homeowners, they want to be able to dial 911 on a wired line rather than depending on their cell phones. (How's that for a killer application!)

However, they don't get the voice line from either of the two telcos that have wired the neighborhood. They get it from Comcast, along with their high-speed Internet connection. They say it costs only half of what they were paying Frontier, and they get lots of, seldom used, long-distance minutes thrown in. Our son-in-law called SureWest to compare prices and was told that SureWest doesn't offer service in this neighborhood. (What SureWest is doing with those distribution cables running down the streets remains a mystery.)

More surprises. Although they get the voice line and Internet from Comcast, they get their TV services via a satellite dish (DirecTV) on the roof. My son-in-law likes to watch football — lots of football. Although Comcast offers the NFL Network, DirectTV rains down all the games, from wherever they are played, in real time. He can partition that big old 52” screen and watch several games at the same time. He can simultaneously record a couple of them on the DVR that comes with the DirecTV package. He can stop the action and review a play before a coach gets through cussing about it. He loves it! And he tells me that this vastly superior package of services costs about the same as Comcast's service.

There are two things here that say a lot about our industry and its future.

The first is that just bundling multiple services together and concocting some sort of marketing blather is not enough for a telco to win and keep customers. This is especially true if one of the services in the bundle isn't really very good. My daughter and her husband have blithely assembled their own “quadruple play” of voice, Internet, TV and mobile networks, technologies and services from three different service providers.

The second is that none of the three service providers is the local telco. These young people are enthusiastic consumers of telecom services. They spend about $250 per month for network connectivity and services, but the local telephone company isn't getting a dime of it.

If it thinks it ever will, it's dreamin'!