Tax Breaks To Stay at Home

Ga. Gov. Sonny Perdue has just signed a bill giving companies a $1200 per employee tax break if they institute a teleworking policy. I am very pleased to hear this. Just as the govenor tried to alleviate gas prices in this state after Katrina with no state taxes or stringent requirements on gas, this bill will also help lower the insatiable demand for gasoline.

With the $3/gallon mark being seen in Atlanta and its suburban areas, any measure done to curtail the exponential growth curve for gas prices is a positive. I am beginning to feel the hurt. Between Thursday and Sunday I had to fill up twice for a total of $60+ (and that is with a car that gets 25-27 mpg). My one-way commute is 49.8 miles, that equates to 498 miles per week, average. Since my tank is only 12 gallons, I fill up 1.66 times per week! Each tank is $30+, so on any given month I will spend $200-250 on gas alone, or if you prefer $2400-3000 per year on gas just to go to and from work!!!!!!

Unfortunately, though, my job is not one I can do from home. However, if companies begin instituting teleworking programs, and more professors begin podcasting their lectures, I think gas prices will respond to a slowed demand and begin to drop.

Yet, it won't be until the economy comes to a crashing halt that federal government will begin to respond, or as they call it, "come up with a comprehensive plan". Brazil though is a perfect example of energy independence. Their vehicles run off of an ethanol mixture made from sugar, a home-grown commodity, and by summer they will be totally free from OPEC and gasoline.

If they can do it we can too. Brazil is not a poor country, but by no means do they control as much wealth as the U.S., so it can be done and relatively cheaply as well. Sadly though, it has taken them from the 1970s when the Brazilian government signed the energy bill into law. I don't think we have 30 years to deal with the problem. Again, I should refer you to my previous post about GM entitled, "Offer Me Fuel Economy, Not a Stereo" from March 5, 2006.

The GM mixture is 85% ethanol, from corn, yes corn. We harvest sooo much each year that the Federal government pays farmers to not grow or sell it to market, for fear that the flood of product might crash the profit from the corn. Here's a thought...let them grow it, but use the excess as fuel for further research, though at this point GM seems to think the ethanol solution is good enough to be used in their newer vehicles and have therefore concluded their research.

So why aren't we doing it now????? Some would suggest that GW and Cheney are still reaping the benefits of earnings from gas companies. Although that may be part of it, the truth is that Congress is so full of oil company money, on both sides of the aisle, that if they act against such a large donor, they lose campaign funds necessary to keep those cushy government jobs.

Truth be told, nothing will come about unless car manufacturers see a serious decline in gas hogs, and a rise in more efficient and ethanol vehicles. At that point, and only then, will they, the manufacturers severe the ties with the oil companies and begin producing energy efficient autos.

So let the marketplace dictate the next steps. Gov. Perdue has started what will hopefully become a more commonplace occurrence, teleworking. Hopefully other states will see what happens and adopt similar measures, and soon enough we can break free from the intoxicating stranglehold oil companies have on us and our everyday lives!


The article on the new tax breaks can be found at:
http://www.ajc.com/friday/content/epaper/editions/friday/business_448445d716ec42460011.html

Free Content Will Become New Standard

I was amazed to see Disney, once again, leading the pack when it comes to television and new forms of media and media consumption. Earlier in the year, ABC, one of the many holdings of the Disney empire, announced a working relationship with Apple's iTunes store, allowing users to download shows like "Desperate Houswives" to their video-capable iPods.

The original downloads were $1.99, and were commercial free. However, as predicted by industry analysts, free content was made available with a mandatory commercial which is viewed before the show can be seen.

I also think that this free content will help drive down the cost per episode to $0.99 from its current figure. Now time-shifted media consumption will become the 'norm' for the 25-44 year-old generation and their kids.

Interestingly I wanted to see the article touch upon the rise in DVR usage among consumers. According to S&P's Equity Research, by the year 2010, penetration of DVRs in U.S. homes will be as much as 35 percent. However, the research was unclear as to what effect this would have on the advertising revenues to the large network TV channels. VCRs, however, originally marketed as a means for TV viewers to record programs for later viewing, never had much impact on revenue dollars from TV advertisers.

"The VCR came in as a potentially disruptive technology, but as a result of poor usability design, its impact on television viewing was generally limited to movie watching," according to Dr. Bruce Klopfenstein's online blog post on March 6, 2006 (http://emergingnewmedia.blogspot.com).

The future with regard to the proliferation of technologies which allow users to control when and what they are exposed to in the media and entertainment market is quite clear. These technologies will continue to matriculate into the general population. The least likely consumers of these technologies are senior citizens, those people in the 65 year-old and higher category. As those people begin to leave the marketplace as potential consumers, and the current 25-44 year-old market begins to expand, the On-Demand media forecast is strong. As this age bracket begins, or as the case may be, continues to have children, and as those children are exposed to an environment in which they have some or total control over their media consumption, just as the current 25-34 year-old age bracket experienced with the rise of cable and multiple channels, the idea that TV or other entertainment options should be limited to a finite number of channels, or a concrete time schedule will be foreign to them. They will not have had the experience of being held to a block of time dedicated to airing a program.

However, I am predicting that a rise in time-shifted viewing will not be a downfall for network channels. The attention given to programming which calls for some level of response, in terms of interactivity, from the viewer may be the perfect way advertisers can reach their target audiences. Just as cable channels narrowed the specific make-up and demographics of an audience from the large national audiences that watched the major broadcast networks, so to will interactive channels and programming that is recorded to DVR or other personal On-Demand media device. The more specific the program, the more specific the audience will be. Advertisers may see this as a shift from trying to buy large national or regional ad spots, to purchasing fewer, but far more effective and receptive ads at the individual program level.

Find the article about free Disney programs at :
http://www.ajc.com/tuesday/content/epaper/editions/tuesday/living_44a3df88801e32d90075.html

Monopoly Cable Providers Opposed to IPTV Services

Cable companies, long known for their stranglehold on the American consumer due, in part, to their exclusive franchise rights in a city, are now fighting phone companies like AT&T, Bellsouth and Verizon.

So why are they fighting them?

It is because these companies want to enter the market for video service. They offer IPTV, internet protocol television, which streams video through an internet connection, then to the television screen. The monopoly cable companies see this as a source of competition, not only could these companies take potential cable customers away, but could drive down the cost of the monthly cable bill as a result!!!!!!

A bill, which is in the House, could potentially break up the "old system" of granting monopoly franchises to individual cable companies. This is, of course, backed by the phone companies who want to get a little piece of the pie, while it is opposed by the cable giants.

The grant for a franchise has, thus far, meant that a provider would pay a fee to the local government, provide those lovely community access channels (which politicians love to talk about, even though the cost of those channels is passed on to the individual consumer's monthly bill, seriously...look @ your bill, you will find a section marked "franchise fees", this is to pay for the local access channels, as well as the fees the cable provider "pays" to the local government. However, in essence all it is is another way for local governments to collect a tax from the citizens, without having to do the politically unpopular thing...raising taxes.)

Cable providers claim that the phone companies want to bypass these regulations by sending up a "smokescreen about the lengthy process of acquiring a franchise". The cable operators suggest that the phone companies would also not provide service in poorer areas of the community, which is a violation of the franchise agreement. This suggestion is spurred by the fact that IPTV uses a large bandwidth and that running fiber optic cables to each house averages $1,000/house. That means that in order to recoup the cost the IPTV providers will only lay cable in wealthier neighborhoods. Unfortunately, according to the Cable advocates, this would only drive down the cost of cable bills in the areas which are least affected by the steep price of service.

I have a simple solution. Release cable providers from their franchise contracts, and allow the marketplace to dictate itself. Competition always drives down cost, while increasing services. This will benefit everyone. There is no need for the Federal Government to regulate that IPTV must be at every curb of every house. Let the people, who "can afford it", absorb the startup cost, since adoption always spurs cheaper prices, and wealthy people are usually the ones who can afford to be "first adopters", they will, in turn cheapen the cost of laying the fiber to the communities which may choose to use cheaper service bundles.

Cable companies have begun the transition of providing telephone service over the internet, VOIP, now it is time for telephone companies to transition into providing video service.

Find the story about the House Bill at:
http://www.ajc.com/friday/content/epaper/editions/friday/business_44c23c2b564d216e0044.html