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

Lions, Tigers and Blogs OH MY!!

Politicians are becoming more aware of the potential that blogging, and other non-traditional media present. Though the efforts of Rep. Kingston (R-GA), who is promoting non-traditional media as a sounding board for influencing and informing younger voters about political issues, are being taken into consideration, many politicians are holding back.

Why, you may ask?

Well, the answer is multi-fold. First, voters age 18-34 are the least likely to cast a ballot. Why expend time on a voting block that won't show up to keep you in, or vote you out of office...they just don't care enough to act. Secondly, the new media is a place where they are not familiar. TV and radio have been around for enough time so that a politician can come to an interview prepared enough to answer questions without sounding too unintelligent. The interviewer usually will ask questions that concern the audience which is tuned to their program. This audience has specific demographics, especially for the major networks (ABC, CBS and NBC), in which audience members are 50 and older. The questions directed to the interviewee will mainly cover the issues most apparent to those people, Social Security, Taxes, War, and maybe Eminent Domain. Issues regarding the privacy rights of users of the popular search engine, Google, will not even be addressed. Those politicians who enter the world of the Daily Show, and other similar media which is directed towards a mainly younger demographic, will be asked questions more unfamiliar to them, and perhaps run the risk of sounding, dare I use the word, "uncool".

Hopefully, though, the politicians in Washington, and even local government, will see the benefits of addressing people via alternative forms of media. Of course one of the benefits of this forum is the fact that a politician can be sitting at home, or in the office, not having to spend hours in a make-up chair, and losing time from the "real issues" (better known as raising campaign money).


The AJC article appears at the following link:
http://www.ajc.com/thursday/content/epaper/editions/thursday/news_4422c3c39270f13d00d2.html

Offer Me Fuel Economy, Not a Stereo

Recent dips in car companies sales have sparked a new promotion to entice consumers to purchase new cars. The new promotion will allow consumers to opt into a premium sound system. The new systems contain more speakers, up to 19, in a single vehicle. However, the speakers are limited to the 8 to 10 inch size, hardly the largest available in the market today.

Lagging sales figures are the cause of the newest car dealer "trend". As the end came for the "employee pricing" sales for smaller vehicles dropped. Similarly, larger vehicles, SUVs and vans, became less popular as gas prices rose. What does this tell me? That consumers go into dealerships with a preset notion of what is a fair market price for a new vehicle, and having not found that price, they leave to go to the used car dealer. Likewise, gas guslers are less and less popular because of the price at the pump.

The most obvious question I pose to the manufacturers...Why don't you look at the data you just cited and come up with an SUV that gets decent gas mileage, and (most importantly) still looks safe enough to drive (apologies to anyone who loves their bicycle-tire wielding hybrid)? As a potential consumer I am telling you right now that I am willing to accept a slightly higher gas bill for the feeling of safety on the roads of Atlanta. However, I am also willing (if the price is right) to discard those fears for a cheap (in terms of price) car, so long as it provides decent gas mileage. Ideally, though, I would like to be the proud owner an SUV (feeling of safety) with great gas mileage ($$$).

The only car manufacturer with the foresight of this dilemma is GM which has introduced SUVs and trucks capable of using ethanol as a fuel. These vehicles can operate on both traditional gasoline, and ethanol mixtures. Most importantly though is that they are carbon copies of other GM vehicles. They look, feel, drive, and tastes (?) like their previous models from years past.

The only problem with the offer from GM is that ethanol is not readily available to the consumer. That means, at least for the short run, those vehicles will have to remain powered by traditional gasoline. The main reason ethanol and ethanol-capable vehicles are not mainstream is that the government is still busy trying to take money from every interest group that offers gas alternatives before deciding on which alternative is best. Hopefully this move from the largest car manufacturer will speed up the decision. And why not ethanol? It is made from corn, an agriculture product readily available in our country (just think of us becoming the "new" OPEC...$$$). This move can reduce our dependency on oil and jolt our economy into an even greater boom than we are seeing now.

Way to be ahead of the class GM!!

The original article, "More Vehicles Sport High-End Stereos", can be retrieved at the following link: http://www.ajc.com/friday/content/epaper/editions/friday/wheels_4470a40bf3dbf0260069.html

Bundling Services is Good for Business, Consumer

Earthlink has entered the market of providing television to its customers through its new business arrangements with Echostar (Dish Network) and DirecTV. This is a good move for businesses in this area. I have always disliked having to write three or more checks each month for my TV, internet, and phone service. A company that can provide all three, and is willing to discount the price as you use more and more service from them, will likely see a jump in customers, as well as revenue from existing customers. The bundling will benefit consumers with lower rates, and (hopefully) better service as the competition among rival businesses such as Earthlink and Bellsouth continue to grow and threaten the local-monopoly cable franchise. Eventually "true" competition will cause many providers to lower their rates, while increasing their customer service satisfaction. Hooray for free enterprise!

The original article, "Satellite TV Services, Earthlink Team up" can be seen at the following: http://www.ajc.com/tuesday/content/epaper/editions/tuesday/business_34af29fcc3024135000d.html

Competition Among ISPs Can't Be Bad, Right?!?!

When was the last time you got up in the morning singing the praises of the service you are provided from your local monopoly Cable/Internet franchisee? Never, right? Well, in some major cities the local municipalities are "allowing" ISPs such as Earthlink to set-up and manage, at little or no cost to the taxpayer, wireless internet. So what we have now is competition, a great and necessary thing for the success of a capitalist economy! Then who would be complaining? Of course, it is the local monopoly franchise, customer no-service (We Don't Care 'Cause We Don't Have To) cable and internet providers. For too long they have been given the exclusive right to be the sole provider of tv and internet service for the local community. The lack of competition has given rise to unreasonably high rates for service, and lax (at best) customer service, because, honestly, where else do you have to turn. In a city like Athens you are too far from ATL to receive any good antenna signals, and satellite service, which requires the installation of a dish on your roof, is for-the-most-part restricted by landlords. This situation is similar to many college towns and more geographically isolated areas surrounding large cities.

So the problem has been identified, what then is the best approach for finding a solution? Incorporate competition into the industry. However, the local governments seem to think this means bankrolling portions of the project for the ISP providers, who then, in turn, allow government to "own" the service. I say that if you are going to use my money to pay for the service, just cut out the bureaucracy and let ALL service providers compete in any given market. This will drive down cost, allow for better customer service, and allow people to choose the service that is right for them. Of course this will also mean that the kickbacks local politicians get from the monopoly franchisee will be gone...You didn't think that Charter airs the Athens School/Government Public Access channels just because they love you?!?! No, they do it to remain exclusive providers, and politicians can return to their district saying that they were able to get the cable company to provide "at no cost to the taxpayers" local access channels. Of course this is also untrue, just look at your next cable bill and you will see what is called a franchise fee. This fee is what is going to pay for the cost of the local public access channels.

But I digress.

Obviously competition is the solution to monopoly cable/internet service, but government owned ISP is not the way to go. True competition among business is what drives the economy and innovation. Without it we get into a situation similar to China, where the government decided what ISPs could and could not display during searches. This is not a road we want to see ourselves heading down.



The original article can be viewed at: http://www.ajc.com/wednesday/content/epaper/editions/wednesday/business_342fcae5a1a631230012.html