300 Million Text Messages New Year's Eve: Verizon

This New Year’s Eve, Verizon Wireless expects its customers to send and receive more than 300 million messages in the 16 hours between 12 p.m. today and 4 a.m. ET New Year’s Day. This forecast of SMS use by Frost & Sullivan shows how expectations have grown over the past couple of years as Frost & Sullivan analysts raised their forecasts.

Australian ISPs will Have to Filter Web Content

Australian Telecommunications Minister Stephen Conroy says Australisan Internet Service Providers will be required to provide filtering of pornography and violent Web sites as the default option for schools and consumers. Senator Conroy says anyone wanting uncensored access to the internet will have to opt out of the service.

Firm Acquires 10 Percent of EarthLink

Steel Partners, a New York-based investment firm, has acquired nearly 10 percent of the shares of EarthLink Inc., or 11.9 million shares. Steel Partners said the total purchase price of the shares is $97.3 million.

Steel Partners is controlled by Warren G. Lichtenstein, a young corporate raider and associate of investor Carl Icahn. Steel Partners may now be EarthLink's largest shareholder.

Vonage, Nortel Settle Patent Dispute

Vonage Holdings Corp. and Nortel Networks Corp. have settled their intellectual property dispute by cross licensing their VoIP patents.

The settlement involves a limited cross-license to three Nortel and three Vonage patents, and dismisses claims relating to past damages and the remaining patents. The settlement is subject to final documentation.

The licensing concerns technology used to make emergency calls or dial 411. Neither company will pay the other anything for any alleged unauthorized use of its technology.

The settlement points up the increasing importance patent portfolios seem to be assuming in the service provider space, mirroring the enhanced importance such portfolios have assumed in the hardware and software space, where cross-licensing deals are a standard way suppliers settle such disputes.

This year Vonage has faced--and lost--several suits from other service providers over use of VoIP-related patents. At some level, one has to wonder whether any independent service providers using anything other than standard hardware and software sold by the largest providers is protected from similar threats. Vonage appears to have placed itself at greater risk precisely because it developed at least some of its own technology, instead of buying it.

In December Vonage agreed to pay AT&T Corp. $39 million as part of its settlement. Vonage has also agreed to pay Sprint Nextel Corp. and Verizon Communications Inc. a total of $200 million to settle their respective lawsuits.

Vonage sued Nortel in August, claiming three patents Nortel held were mistakenly granted to the company. Nortel counter-sued, claiming Vonage is violating a total of 13 of Nortel's patents, and asked that Vonage be kept from using the technology.

Internet Access Big Library Attraction

Generation Y "Millenials" (age 18-30) are most likely to turn to libraries for problem-solving information of all generational groups, say researchers at the Pew Internet & American Life Project.

Faced with a problem in the past two years that they needed to address, about one in eight adults (13 percent) say they turned to their local public library for help and information. And it appears computer availability is a reason.

Some 65 percent of adults who went to a library for problem-solving help said that access to computers, particularly the Internet, was key reason they go to the library for help.

Also, 62 percent of adults who went to the library for help actually used the computers at the library. At the same time, 58 percent of those with problems to solve said they used library reference books.

About 42 percent of those with problems to solve said they read library newspapers and magazines.

The problem most likely to be cited by those who went to libraries seeking information was an educational issue such as making a decision about a school, getting more training, or finding financial resources to do so. That reason was cited by 20 percent of the adults who went to libraries for help.

Asked whether they would go to a library in the future to help them solve problems, 40 percent of Gen Y respondents said it was likely they would go, compared with 20 percent of those over age 30.

About 53 percent of American adults report going to a local public library in the past 12 months. The profile of library users shows an economically upscale, information-hungry clientele who use the library to enhance their already-rich information world, Pew researchers say.

Public library patrons are generally younger adults, those with higher income and
education levels, and those who are Internet users. Parents with minor children living at home also are very likely to be patrons. There are no significant differences in library usage by race or ethnicity, Pew researchers say.

RIAA Suit: Not as Bad As First Thought

Engadget has done some digging and reports that the Recording Industry Associaton of America's lawsuit against Jeffery Howell is not for ripping CDs to an MP3 player, but to pedestrian illegal downloading. While we might disagree about the practice, RIAA is within its rights to pursue that sort of action.

So it appears the difference is the public assertion, as part of the suit, that MP3s ripped from legally owned CDs are "unauthorized copies." That remains the more critical issue. Is that sort of thing, done for personal use by the legal owner of a music CD, fair use or not?

New Rules for Li-Ion Batteries on Planes

Effective January 1, 2008 there are new rules on lithium-ion batteries used with PCs, iPods and mobile phones, particularly spare batteries.

The Transportation and Security Administration says the new rules apply only to spare batteries, not the installed batteries.

Spare lithium batteries cannot be packed in your checked baggage, but can be carried on board in carry-on luggage.

Battery size limitations also apply, expressed in grams of “equivalent lithium content.” (8 grams of equivalent lithium content is approximately 100 watt-hours; 25 grams is approximately 300 watt-hours).

Under the new rules, fliers can bring batteries with up to 8-gram equivalent lithium content. All lithium ion batteries in cell phones are below 8 gram equivalent lithium content. Nearly all laptop computers also are below this quantity threshold.

Users also can bring up to two spare batteries with an aggregate equivalent lithium content of up to 25 grams.

For a lithium metal battery, whether installed in a device or carried as a spare, the limit on lithium content is 2 grams of lithium metal per battery.

Almost all consumer-type lithium metal batteries are below 2 grams of lithium metal.

Level 3 Sues Limelight Networks

Level 3 Communications has filed a patent infringement suit against Limelight Networks, alleging that Limelight's content delivery network infringes four Level 3 patents.

The filing cits patents 6,185,598; 6,473,405; 6,654,807 and 7,054,935, according to Dan Rayburn, streamingmedia.com EVP. Level 3 says it notified Limelight of the potential violations in February 2007, but that Limelight did not redesign its network to avoid infringing.

Given the notification by Level 3 and lack of response by Limelight, one has to assume Limelight thinks it is not infringing.

These days, it does not seem to be enough to have the right assets, people, channels, partners and technology. One often has to own intellectual property as well, if only to use as bargaining chips for cross licensing.

Hardware and software suppliers have known this for years. What is new is that service providers have to do the same.

MP3 Challenges Business Model

We assume iSuppli is not far off the mark in publishing this forecast of MP3 player shipments. And since the Recording Industry of America seems intent on declaring war on sideloading of music, one assumes the goal is to take control of the revenue model for MP3 downloading, forcing users to pay for downloads rather than sideload.

While acknowledging that there are copyright issues involved, there also are technologial issues. Precisely to avoid its use as a mass copying device, every Apple iPod, for example, allows linking to each iPod to just one PC and its hard drive. Which is fine if one's hard drive or CPU or input devices never fail. If a user's PC does become unusable, any iPods linked to that PC now have a problem. They no longer can sync. Which means the devices are permanently loaded with exactly what is already on them, or must be erased and synced to whatever new PC a user designates.

That means reloading all of the original collection of music.

Alternatively, if one loses the use of the MP3 on which purchased downloaded music has been loaded, there might be no legal way to move the music to an alternate MP3 player when the original MP3 player itself dies.

Both of these sorts of technical issues must be confronted by MP3 music users. In essence, the Recording Industry of America argues one should be able to buy a music CD, but only be able to play it on one device: a home audio system but not on one's vehicle audio system, for example.

There are copyright issues here, to be sure. But there also are major end user technology issues dealing directly with personal use of legally-obtained music. And the ability to copy is essential is a "purchase" is to be anything other than a "rental." In other words, if a user "buys" a song, but then cannot transfer the song to another playback device when the original hard drive dies, is that really "ownership" or simply a "lease of unspecified but limited duration."?

Music Industry Fights Legal Music on iPods, PCs

How long can an industry that sues its own paying customers thrive or survive? In what appears to be an escalation of on-going legal efforts, the Recording Industry Association of America has sued Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 purchased music recordings on his personal computer, reports Marc Fisher, Washington Post staff writer.

The RIAA argues it is illegal for someone who has legally purchased a compact disc to transfer that music into his or her own computer. By extension, one would assume the RIAA also opposes sideloading music onto an MP3 player.

That is going to be problematic if digital music downloading continues to grow, as iSuppli and virtually every other research outfit argues.

The RIAA argues that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.

The Howell case was not the first time the industry has argued that making a personal copy from a legally purchased CD is illegal, says Fisher.

But lawyers for consumers point to a series of court rulings over the last few decades that found no violation of copyright law in the use of VCRs and other devices to time-shift TV programs; that is, to make personal copies for the purpose of making portable a legally obtained recording, Fisher notes.

Digital media has proven to be a headache for copyright holders, to be sure. In a previous era where only imperfect analog copies could be made, and recording was cumbersome, the issue was inherently limited in scope. Digital technology of course creates an infinitely-bigger problem, in part because copies are identical and because it is much easier to copy.

The problem is that common sense suggests one should not have fewer rights in a digital domain than in the analog domain being displaced. That is to say, one should not find that legal personal uses of media in the analog domain are illegal in the digital domain.

That's essentially what the RIAA is arguing. There' a "moral hazard" here, as economists might describe it. If any established code of conduct, law, regulation or practice is routinely violated often enough, behavior changes. What formerly was seen as "prohibited" now is seen as "right."

While it is understandable that the RIAA wants to protect a business model, it isgoing about things in an ultimately destructive way by making war on its customers. The RIAA might think it is within its rights to restrict copying of a single user's legally-bought music to that user's own MP3 player. Users do not agree.

So by insisting on defense of its rights, seen as a violation of fair use by users, the RIAA creates a climate of greater "lawlessness," as users simply will lose all respect for the RIAA's position.

Open Mobile a Game Changer

There arguably are as many threats and opportunities as mobile carriers move towards more-open networks and terms of use. Not all customers will want all that much control over their experience, devices and services. Walled gardens work well where optimizing a complicated user experience is necessary. iPod offers a salient current example of that approach.

Others will want nothing so much as a mobile version of the Interent. But most users will be found in between those two poles. For many consumers, the ability to unbundle the device purchase decision from the service provider will be change enough, as has been the case in European markets where such unbundling is commonplace.

The open networks trend will more troubling for carriers to the extent that more users may want to use their mobiles just like they use their PCs to access apps and services delivered by the Web.

The business challenge there is the same one carriers have faced in the wireline broadband access market. They have a pipe business based on "access." Beyond that it has been tough to monetize the access.

It isn't clear yet how the user expectations about payment models change over time. For some, there will be a permanent change in thinking about devices. People will own the devices they want and then select access and transport services separately, much as they buy their own PCs and buy broadband access from any number of suppliers.

Just as clearly, some will prefer to have their handsets subsidized in exchange for service contracts.

It is clear enough that mobile applications will explode, much as they did when the broadband-accessible Web was popularized. Carriers will sell lots more data plans, and bigger data plans. Beyond that is where the business models will have to be developed. Right now, it's hard to determine whether this is primarily good or bad for carriers, as much as it is clearly good for end users. Obviously there is new thinking by carrier executives that the trend now is inevitable in any case, and offers the possibility of rapid applications development that will drive the attractiveness of mobile broadband access itself.

AOL Shuts Down Netscape

In what might be seen as a successful open source transition, AOL is shutting down its support efforts for the Netscape browser and encouraging Netscape users to switch to Firefox, the Mozilla-powered browser.

AOL acquired Netscape Communications Corporation in 1999. By 2000 AOL had launched the Netscape Communicator Web suite, otherwise known as Mozilla. The Netscape 6 browser, the first Mozilla-based, Netscape-branded browser in 2003 was supported by the independent Mozilla Foundation.

AOL was a major source of support for the Mozilla Foundation and the company continued to develop versions of the Netscape browser based on the work of the foundation. Perhaps AOL has succeeded.

By most estimate Microsoft Explorer holds about 66 percent market share while Mozilla has about 25 percent. Netscape currently has one percent or so share.

Video Penetration Higher than We Think?

By some estimates U.S. cable video penetration is in the mid-60s, at the upper level at 70 percent. Satellite video is said to be between 25 percent and possibly 28 percent. And yet at the same time some estimates show "no provider" other than over-the-air transmissions for as many as 26 million homes, something on the order of 23 percent of U.S. households.

The numbers don't square, and there are few explanations other than false reporting by cable and satellite operators; incorrect housing statistics or much-higher-than-expected numbers of homes where consumers are buying multiple subscriptions. False reporting of those sorts of numbers is so unlikely as to be implausible. One has the impression that consumers tend not to buy both satellite and cable video service. Try and think of someone you know who does this.

One can make the argument that multichannel video subscriptions are nearly 100 percent, or as low as 75 percent. So things are better or worse than we might think. It is hard to tell which is the case.

HDTV Transition Issues: How Big?

This summer, the Consumer Electronics Association estimated mid-year 2007 that 16 million high-definition televisions would be sold during the year, bringing the total number of HDTVs sold in the U.S. to 52.5 million.

Thirty percent of U.S. households had an HDTV in the early summer of 2007, likely rising to 36 percent by the end of this year. Among these HDTV households, almost a third own more than one high-definition set.

The issue is what happens as the analog TV broadcast shut off occurs in February 2009. Most surveys show a fairly high degree of consumer confusion about the coming change. That, in turn, has some observers calling for more vigorous programs to prepare the market.

The problem might not be as big as most people assume, irrespective of "awareness." For starters, most TV watchers in the U.S. market get their video from a cable or satellite provider.

Estimates of overall cable penetration range from 67 to 70 percent. Satellite providers have 25 percent penetration or more. Telcos aren't much of a factor yet, but the salient point is that these providers have a vested interest in making sure their customers remain customers, and will undertake most of the actual customer notification and equipment upgrade tasks when the time comes.

Some of those customers already get 100-percent digital signals using a decoder already in the home. Others already are outfitted with HDTV decoders as part of the upgrade process cable operators actively are pushing for "digital TV" tiers of service.

True, there are some viewers who get their signals over the air, and who will not own HDTV tuners by the analog shut off date. That's an issue, but affects a sub-set of over-the-air TV viewers.

User Generated Content Catches On

Some 40 percent of 2,200 U.S. consumers between the ages of 13 and 75 surveyed by Deloitte & Touche are making their own entertainment by editing movies, music and photos. You might not be surprised that 56 percentof all Millennials (ages 18 to 24) do so. But you might find it interesting that a quarter of users (65 or older) do so.

More than one in 10 Millennials are actively uploading their own videos on the Internet and 51 percent of all survey respondents are watching or reading content created by others. Some 71 percent of Millennials watch or read content created by others while 56 percent of Gen Xers do.

About 53 percent of Millennials say they would download more videos if connection speeds were faster.

But the survey also shows that traditional media, including television and magazines, remain part of the user mix. About 58 percent of Millennials say magazines help them learn about what’s “in.” Also, about 64 percent of users say they tend to pay greater attention to print ads in magazines or newspapers than advertising on the Internet.About 58 percent say they use magazines to find out about what's "cool and hip," such as clothes, cars and music. Perhaps more important, almost three-quarters (71 percent) enjoy reading print magazines even though they know they could find most of the same information online.

Millennials, though, are most receptive, as you would guess, in just about any area of "converged" or "new media" experience. About 64 percent want to easily connect their television to the Internet for viewing videos and downloading content to their television. About 60 percent want the ability to move their content to any device they own without any problems. Some 57 percent want an entertainment and communication device that lets them "do everything." Nearly half (49 percent) want a computer or similar device that will be the center of their household media experience.

Wal-Mart Closes Video Download Service

Wal-Mart shuttered its video download service Dec. 21. Videos purchased and downloaded as part of the service still are playable, so long as the original PC the movies were downloaded to remains operational. Due to licensing restrictions, those videos cannot be copied or transfered to a different computer.

That's an obvious measure to protect copyrights, but points to one objection some users may have to buying downloads. Some of us go through a PC a year, so "buying" really means viewing until the hard drive or PC dies.

Having learned the hard way this will happen, some of us now store iTunes collections on external hard drives, so we can lose the CPUs without having to reload all the music again.

DVDs, Concerts, CDs: Attention Deficit

Alliance Bernstein Research reports that DVD sales were down 4.1 percent in December, year to date, and that the fourth quarter declined 2.1 percent, based on Nielsen VideoScan tabulations.

That makes 2007 the first negative sales growth year-over-year since DVDs came to market. Which drives one to speculate that multi-tasking and attention sharing now is beginning to show. There are other possible explanations, of course.

The high-definition format battle might be a factor. Consumers might be waiting until the dust settles before beginning a switch to HD format disks.

As retailers blame the weather for slower than anticipated sales, we might this year point to a tougher economic climate and consumer unwillingness or inability to spend on such things, as well.

The total North American concert industry also posted its slowest year since 2004. According to Pollstar, the top 20 tours generated $996 million, down 15.6 percent from 2006 totals.

Amazon to Sell Some Warner Music Without Encryption

Warner Music is making its entire back catalog, free of copying restrictions, available for purchase through the Amazon MP3 store. New releases won't be part of the deal.

Amazon therefore will be able to sell 2.9 million songs in encryption-free MP3 format. Music copyright holders obviously don't like the MP3 format. As a user, I wouldn't buy any music that isn't in MP3 format. Let them flail around some more. No MP3, no sale. That simple.

Many music industry executives probably still are kicking themselves for not "getting" digital distribution, then not "getting" iTunes.

Apple Fox Deal: Blockbuster and Netflix Impact

Apple has a deal with News Corp's Fox for a movie rental downloads. So far, the viddeo download business has been called a "hobby" by Apple CEO Steve Jobs.

Disney has had its catalog available on iTunes to allow for purchases, and other studios have partial movie and partial video content catalogs already available. It isn't clear how much impact the new "rental" capability will have. Apple probably doesn't expect much revenue lift for the moment.

Blockbuster and Netflix, of course, will be watching closely, as both of those firms want to dominate the video download business.

If Apple succeeds, it will illustrate one interesting thing about "disruptive" innovation. Normally, one expects more innovation from smaller companies. But sometimes it takes a big, influential company to really shake things up.

Google and Apple are those sorts of companies.

at&t FTTH, FTTN Marketing Issues

Marketing operations, as much as anything else, will mean at&t customers who actually have fiber-to-the-home will get the same bandwidth and services as customers served by the U-Verse networks, which use very-high-speed Digital Subscriber Line as the drop wire. That means 6 Mbps data access and one high-definition TV stream at a time, even though FTTH networks are capable of more.

About a million at&t customers actually will have fiber drops by the end of 2008.

The marketing issue is analogous to what happens when a citywide broadband network has to be build and marketed. In the early stages, it isn't really possible to use mass media such as radio or television because the service provider simply generates lots of calls for service which it cannot meet. Early on, door hangers and direct mail work better.

To market U-Verse with scale economies, at&t wants to avoid confusing the market by touting offers that one out of 18 customers actually can get. So at&t has to "dumb down" the fiber access pipe. It makes total operational sense, even if some users who know the difference will be disappointed they can't take advantage of the optics.

Android Phones in February?

One would assume that Android phone developers will want to show prototypes of possible devices at the Mobile World Congress in February. This screen sort is supposed to be one of the concepts.

Keep in mind that this is supposed to be a functional prototype on which the developers and engineers can do their work, not a polished industrial design. That sort of thing almost has to be done before February, if Google is to gin up much buzz.

Google Patent Infringement: One Win and Overtime

The U.S. Court of Appealrs has ruled that Google’s AdSense program does not infringe on any Hyperphase Technologies patents related to contextual linking and presentation of information. Google won the initial decision, which was appealed. However the court overturned the part of the initial decision covering the AutoLink browsing tool, ruling that there may be infringement of two patents, and sent the case back for another look.

The AutoLink browser tool parses Web pages for fragments of text in certain formats, and then transforms them into links to relevant Web pages.

One senses that something is wrong with the patent system. Fostering innovation by protecting inventions is a good thing. But some patents seem so generic, covering entire processes, not simply the expression of a process, that the patents are overly broad, and seem examples of prior art.

Google Increases Storage

Gmail will increase the amount of free storage it provides to 5 Gytes. Some users already have seen the increase. Everybody will notice in January. In October the amount of free storage was something on the order of 4 Gbytes.

From January 4 on, users will get an additional 3.3 MBytes every day, an expontential rate of increase. Pretty amazing.

Google Apps mail accounts will have the same quota as standard Gmail accounts, while Google Apps Premier Edition will have 25 GB mail accounts. Previously, Google Apps accounts had 2 GBytes of storage, while the business edition offered 10 GBytes per account.

Gmail's paid storage option will feature around 50 percent more storage for the same price: 10 GB for $20 a year, 40 GB for $75 a year, 150 GB for $250 a year and 400 GB for $500 a year.

DoCoMo to Feature Google Apps

Japanese wireless provider DoCoMo, which is said to be in the running to sell the Apple iPhone in the Japanese market, also is moving to feature Google applications including search, Gmail, calendar and photo apps, according to "The Nikkei."

DoCoMo is also said to be weighing development of a next-generation handset using Google's Android OS for mobile devices.

It isn't unusual for mobile providers to feature applications on their phones, of course. What is new: making it easy for end users to access mobile-optimized and formatted third-party Web-based apps.

Cbeyond Eyes Pittsburgh: Thank FCC

Pittsburgh is on a short list of new markets Cbeyond now is is reviewing. And the recent Federal Communications Commission decision that several Verizon markets were not yet sufficiently competitive to relax wholesale special access rates (broadband access services such as T1s and DS3s)can be credited, in part, for the interest.

The FCC ruling means Cbeyond can buy T1s at discounted rates, and that's quite helpful for Cbeyond's business model, which typically involves provision of voice and data services to small businesses over one or two T1 lines.

Cbeyond apparently has been considering Pittsburgh for some time but the FCC ruling was pivotal, Cbeyond Vice President and Corporate Counsel Bill Weber says.

"Had that FCC decision gone the other direction, in all likelihood we would have never come to Pittsburgh because it would no longer be possible for us to make money," Weber said.

Cbeyond might not begin operations in Pittsburgh, should it decide to expand there, for as much as two years. Typically a fierce competitor in the small business market everywhere it operates, Cbeyond will run into Comcast in Philadelphia as well as Verizon and other providers.

SME Smart Phone App Gap

As you might expect, 65 percent of heavy smart phone-using small and medium-sized organization associates say access to corporate applications and data anywhere and anytime would most benefit them in their work roles, according to a survey undertaken by the Yankee Group. Smart phone-centric employees generally have jobs that require more remote working and therefore find some value in smart phone technology.

Excluding corporate email, the most-used applications by employees who have smart phones are Web browsing, business
productivity suites such as Microsoft Office, customer relationship management, project management and corporate instant messaging.

However, no more than a quarter of SME employees are using these applications on their smart phone in the office. Also, in most cases, no more than a handful of SME employees are using these smart phone-enabled applications outside the office in work-related venues such as airports and hotels.

Considering only those SME associates whose primary mobile device is a smart phone, material requirements planning and supply chain management applications are top applications.

However, none of the SME employees in the Yankee Group survey in this segment use MRP and SCM applications on their smart phones regardless of workplace venue.

Both MRP and SCM applications are valuable tools for operations-based employees to track flows of raw materials, pre-finished goods and finished goods at various stages in the supply chain and manufacturing process. Non-office use of these applications is stymied today by a lack of mobile-enabled solutions, Yankee Group researchers argue.

Things might be improving. The Apple iPhone helps with Web browsing. User experience for productivity apps is hampered by small screens, formatting issues and device processing power. Salesforce.com helps with CRM, but the need to support multiple IM clients is cumbersome.

The point, Yankee Group analysts say, is that there is lots of room for further refinement of user experience that could boost use of mobile apps by small and mid-sized business associates.

Fairpoint Buy Rejected by Vermont Regulators

Fairpoint Communications, a provider of rural telephone service, has had its bid to buy some rural Verizon landlines rejected by the Vermont state government. Verizon and Fairpoint announced the deal, which consists of 1.6 million landlines in Vermont, Maine and New Hampshire, nearly a year ago.

The deal has also faced opposition from regulators in Maine. The Vermont Public Service Board's decision doesn't terminate the deal, but it forces the companies to reach a new agreement, which could mean lowering the sale price.

It's just another reminder of how much regulators shape and condition the telecom market.

The Trouble with WiMAX

The "trouble" with WiMAX, I've maintained, has nothing to do with performance, or necessarily with network cost. The technology will work. The issue is how and where WiMAX fits in the business environment. In developed markets where lots of competition already exists, the issue is figuring out where WiMAX plays in the applications environment. As a fixed alternative to cable modem, fiber-to-customer or Digital Subscriber Line services, the issue is how big a market exists. As a mobile broadband platform, the issue is how it competes with 3G networks and Long Term Evolution, the GSM-based fourth generation network alternative.

There's less contention in rural areas or less-developed broadband environments. Where it is too expensive to deploy a terrestrial broadband network, WiMAX has a clear logic. Even there, though, there might be questions about how more-established mobile voice and 3G networks factor into the competitive equation. One certainly can argue that WiMAX will provide much more bandwidth than 3G, today. The issue is how long it will take to create robust revenue models for 3G services, let alone providing those services more effectively over a faster 4G network.

It is, in short, a business issue, not a technology issue. To be sure, one can argue that a new market for broadband-enabled devices other than mobile phones is coming to fruition. But the issue there remains whether WiMAX necessarily or primarily provides access to those devices in ways that 3G cannot, let alone 4G. One might argue that WiMAX has a shot at providing access to all kinds of consumer devices other than "phones." But one might also argue that such connectivity has to be much cheaper than anything we've seen so far.

WiMAX networks might be half as costly as a 3G network to build. But that's not enough. They also have to be less than half as costly to operate, or prices won't be low enough to entice users to pay for connections to cameras, music players, game or entertainment platforms, for example. Those functions also are enabled on 3G networks, in many cases, combining the text and voice functions with the very services WiMAX might enable.

WiMAX might not prove to have the market traction its supporters hope for, in other words, at least in developed broadband markets where there is robust competition from cable modem, DSL, fiber to home, 3G mobile, fixed wireless, Wi-Fi hotspot and satellite broadband alternatives. The difference could come if WiMAX becomes the mobile provider 4G platform or if mobile WiMAX access is priced well below current mobile rates, allowing customers to access enable more devices than they now do.

It is not unthinkable for users to consider simultaneous broadband subscriptions. But it does require a more-compelling value/price relationship. We can assume standard-issue mobile phones, increasingly of the "smart" variety and optimized for Web experiences. We also can assume greater penetration of wireless data cards to support notebook PC use in nomadic fashion. What is not yet clear is the potential demand for broadband-connected music players, cameras, game players, dedicated navigation devices or video players. How many different subscriptions are users willing to pay for?

There is some thinking that WiMAX will be used especially heavily by mobile PC customers, as WiMAX is seen as powering a good chunk of the access card business.

“In 2010, the forecasted WiMAX subscriptions in North America will represent two percent of that for mobile 2.5G/3G and 66 percent of the subscriptions for mobile data cards,” say Philip Marshall, Yankee Group vice president, and Tara Howard, Yankee Group analyst.

Yankee Group estimates the number of WiMAX subscribers will increase from 1.3 million to 7.8 million between 2006 and 2011 and that in 2011, 7 million subscribers will be using 802.16e technology. Some percentage of that use will be for fixed broadband access, of course.

Assume such forecasts are correct. The percentage of WiMAX subscribers relative to residential broadband subscribers in the North American market then will increase from 2.2 percent to 7.4 percent between 2006 and 2010. Whatever else one might say about this level of adoption, it certainly doesn’t represent some sort of full-blown challenge to cable modem, DSL or fiber-to-customer access technologies. In fact, WiMAX, if it is adopted as Yankee Group researchers now forecast, will be yet another ancillary or niche form of broadband access.

So in mature markets, the major upside opportunity for WiMAX is expected with mobile personal broadband services, with fixed and portable services gaining moderate early market traction. In some Asian markets, such as Korea, it is conceivable that WiMAX-based mobile broadband could succeed, despite the existence of robust 3G and mobile video alternatives.

Still, the ultimate role of WiMAX in the wireless market is debatable, says a recent Organization for Economic Cooperation and Development report. “Large supporters such as Intel have a vision that WiMAX will change the way we all access the Internet in a matter of years,” says the report.

“Detractors claim that the economics of large-scale WiMAX networks are simply not justified,” the OECD report suggests.

Mobile WiMAX technologies may have the most profound impact in some urban areas because they could fill a connectivity void between 3G data networks and Wi-Fi, though.

Ultimately, this will not be a matter of technology, but of commercial issues and creation of new niches. It's hard to see GSM mobile operators going with WiMAX as a full-blown replacement for 3G, when LTE is coming. And it isn't simply a matter of technical performance. Smooth migration paths are important for large carriers. WiMAX might be too abrupt a transition for many. That might not be the case in undeveloped broadband markets, where a fixed broadband capability is reason enough to deploy it. Mobile broadband is a tougher matter, though.

Right and Wrong, But for the Wrong Reasons

In its story on "Technology in 2008," The Economist makes three predictions, one that will not happen in 2008, one of which could--but won't--happen and one which already happened. The three:
1. surfing will slow
2. surfing will go mobile
3. networks will go open

Oddly, the article predicts the Internet will clog because of spam. The article also says access pipes operate "symmetrically." If only it were so! The article is more apt when it says user-generated content, especially of the video sort, will stress the networks. "Gridlock" is the prediction. But it won't happen. Pipes are being upgraded and "reasonable use" policies are going to change. Traffic shaping is coming and access pipes are getting bigger. "Surfing" isn't going to slow.

The article is correct in noting that wireless access is coming. But the article implies that it is the 700-MHz auctions that will drive the change. Keep in mind, these are predictions for 2008. There is no way any new network using 700-MHz spectrum is going to be operating in 2008. And the tier one mobile providers are doing everything they can to convince more users to buy data access plans, with modest success so far. It's coming, no doubt about it. But it's been coming for years.

Use of data cards, browsing plans and email access plans will grow incrementally, and at a faster rate, to be sure. But there's no "big bang" coming in 2008. The trend began years ago.

In predicting that we'll see more "openness" in mobile networks, the article is on track. Perhaps the article focuses a bit too much on open operating systems and not enough on unlocked phones and access, but of the three predictions, this one is most nearly correct. But a new operating open network in the U.S. market at 700 MHz, in 2008. Absolutely no way.

Web services are going mobile and open, no doubt. But neither trend is specific to 2008.

Motorola Details WiMAX Progress

Motorola says it increased to 15 the number of contracts for commercial WiMAX networks and demonstrated the historic first live mobile WiMAX 802.16e handoffs between continuous WiMAX cells supporting voice, data and multimedia applications during WiMAX World USA in Chicago.

The company also increased to more than 57 the number of WiMAX engagements in 38 countries worldwide, including 44 active trials.

Motorola says it is on track to support the Sprint Xohm soft launch in Chicago by year end 2007 and is on schedule with deployment for the planned commercial launch in the second quarter 2008.

The company also says it has completed the deployment of the first 802.16e commercial WiMAX network in Pakistan for Wateen Telecom and has completed the first phase deployment of two additional commercial WiMAX systems in France and Germany.

Senza Fili Consulting says WiMAX is due for some growth.

Is VoIP Significant?

Some years ago, many observers were convinced VoIP would be "disruptive" to the global telecommunications industry. There's much less certainty now. In fact, one might ask: is VoIP mostly a better way to do voice, or just a new way? Mobile clearly is a new way, and might be disruptive in many ways. So is VoIP. But "different" isn't the same thing as "disruptive."

The global industry made a transition from analog to digital switching, as it earlier made a transition from mechanical to electronic switches. New services and efficiencies were gained in each of these transitions. But one can question whether the differences were transformational.

Likewise, most of the U.S. competitive local exchange carrier industry thought it was doing something revolutionary in buying its own Class 5 switches to compete with incumbents. As it turns out, that wasn't hugely disruptive.

These days, most tier one carriers earn only about 20 percent of total revenues from consumer voice, and not significantly higher percentages even if enterprise voice is included in the total.

The point is that "voice," though still hugely important as an end-user value, is less and less the revenue driver for the global industry. So VoIP is in many ways a much-better way to use voice, but such a smaller part of total revenues that it cannot strategically change industry dynamics, one way or the other, so long as a transition away from reliance on voice revenues is predictable.

There are precedents for that as well. Long distance revenues have been declining, in terms of revenue per minute, if not volume, for decades. But the industry had time to transition away from long distance as a driver of profits.

At this point, it certainly looks as though VoIP is more nearly the latest enhancement to basic voice, rather than a disruption. If anything, it is mobile that represents the big "disruption."

at&t Says It Will Provide CDN Services

Earlier this year Level 3 caused a stir when it said it would enter the content delivery network (CDN) market with a radical pricing model: essentially offering the quality of service features at no incremental cost to what customers expect to pay for simple IP transit. And if you think about it, that's precisely what a CDN does: provide QoS features on top of dumb pipe. All of which should have, and did, raise fears about the health of the CDN market.

After all, if a contestant says it will give customers for free, what they today pay for, that's disruptive. Most recently, at&t itself said it was getting into the CDN business as well. Which should have caused another shudder: remember Northpoint, Rhythms Netconnections and Covad? They were the three independent providers in the nascent Digital Subscriber Line broadband access market. Of course, when the incumbent telcos decided broadband access was a business they had to "own," they simply moved to do that.

So are Level 3 and at&t a threat to market-leader Akamai? Right now it's hard to say much, beyond the obvious fact that competition is increasing in the space. One issue could ultimately be the size of the market opportunity, the reason for that being that a smallish market will favor specialists, while a large market will favor the larger telcos.

And it is not necessarily simply because scale economies might kick in. It is more a matter that large telcos tend not to do well in market segments that are small. Small markets never get the attention they might deserve in a large organization. So unless the market gets fairly sizable, a large telco simply will not invest enough to keep pace with smaller specialists.

So how big is the market today? As it turns out, that's a guesstimate of sorts.

Some things are hard to count. Unified communications software is an example. People who track these things like concrete measures: ports, servers, licenses sold. So how do you track "presence" features that simply are embedded in the basic functionality of an IP PBX?

Other markets aren't quite that hard to track, but still are fuzzy because mutltiple revenue categories get lumped together in the reporting. Streaming media services, as distinct from application acceleration, provides an example of that sort.

Dan Rayburn,StreamingMedia.com EVP, provides a reasonable way of current approaching the U.S. market size, though. Working backwards from benchmarks, Rayburn suggests the market for CDN services (but not P2P apps) currently is less than $800 million.

Internap's 2007 revenue is about $24 million. Limelight Networks generated about $105 million for 2007 and about $95 million of that was earned in the U.S. market.

Akamai probably generates $400 million to $450 million of its $625 million total revenue comes from their CDN services. Rayburn further guesses that U.S. CDN revenues amount to $300 million.

Level 3 wasn't in the market for much of the year, but might have earned $2 million or so.

VeriSign might have earned about $8 million for the year in the U.S. market.

Mirror Image, CacheLogic, Panther Express, CacheFly and Advection.NET taken together will do about $20 million in the U.S. market.

EdgeCast, CDNetworks and BitGravity combined did about $5 million for the year. Again, these are new services that didn't have a full year of operation to measure.

PEER 1, NaviSite and Ignite Technologies together collectively generated about $8 million.

All other smaller regional service providers providing small and medium sized businesses outsourced video delivery services sold under $20 million in 2007.

Can iPhone Overtake BlackBerry??

Now that I've had a chance to look at Research in Motion's most recent quarterly results, which were robust, one can make a comparison between what RIM did, and what 9to5mac.com expects Apple to announce it has done. Namely, 9to5mac.com expects Apple to announce sales of five million iPhones in February.

RIM sold 3.9 million Blackberries in its most recent quarter across more than 100 carriers and 13 product lines. It isn't an apples-to-apples comparison. The two companies have different quarterly "endings," RIM finishing Dec. 1 and Apple Dec. 31.

Plus, it isn't clear what time period the five million iPhones were sold over. 9to5mac.com does not indicate a belief that all five million were sold in one quarter, and one suspects that isn't the case. Make it 3.5 million or so devices in the quarter.

What is interesting is how well Apple would have done, should it report anything like five million devices over even two quarters, given its early status in the market.

Apple has been selling one model of a GSM iPhone in four countries with just four carrier partners; while RIM, with a huge head start, is sold by more than 100 carriers, and features 13 different product lines.

Firefox Goes Cloud Computing

Firefox has taken a step towards cloud computing by releasing the first version of Weave, a way to blend of the desktop and the Web through deeper integration of the browser with online services.

Basically, Weave pushes browser metadata (bookmarks, history, customizations into the cloud so it can be retrieved and used on any machine. The metadata is transparently reflected everywhere an individual gets online. Weave also will provide a basic framework for easily sharing and delegating access to this metadata to friends, family and third-parties. And it's a Mozilla product so there will application program interfaces for developers.

Mozilla intends to provide the infrastructure and an consistent model for how a user can open up their browser metadata to friends and third-party applications.

Bye Bye TDMA

at&t Wireless and Alltel finally are shutting down their old analog and first-generation cellular (TDMA) networks in February 2008. Verizon Wireless says on its Web site that it will retire its analog network on Feb. 18, 2008, and will not provide analog service after that date.

Almost nobody will notice. The carriers say a million phones out of 250 million in use might be affected. No phone capable of text messaging uses analog technology. No Sprint or T-Mobile phones use analog, either.

Carriers have been telling analog customers about the shutdown and offering them new digital service plans and phones, so it isn't clear that any active users will experience issues. There might be some "phones sitting in drawers" that users keep around for emergency 911 calling, without plans, that could be affected.

But at&t, which had the largest number of analog customers at one time, has been phasing analog out since 2001, and with the high rates of phone replacement, can't still be supporting many users on the older system.

Separately from the analog shutdown, Alltel and AT&T will finish phasing out networks that use a first-generation digital technology known as D-AMPS or TDMA (for Time Division Multiple Access).

Google Growth Uneven

Some observers caution that Google is over-estimated where it comes to innovation. "Not everything Google does succeeds," that line of thinking goes. And of course that is quite correct. Lots of things Google has done have not been runaway successes. Some initiatives have failed, plain and simple. GTalk hasn't caught on, and Google bought YouTube because Google's home-grown video site wasn't getting traction.

Perhaps the implication is that potential competitors shouldn't fear Google as much as they seem to, as Google fails often enough. Perhaps the other way to look at matters is the frequency with which Google does, in fact, succeed, compared to the number of attempts. And given the number of attempts, the more Google fails, the more it will discover things that work.

Sure, Google seems to go off on tangents now and then. Google defends these explorations as attempts to find other really big businesses. Maybe. And maybe Google just goes off on tangents now and then. Either way, the attempt to start new things is going to lead to lots of failures, if Google tries enough new things. Some of us might argue that is precisely what makes Google so fearsome: it innovates so fast for a firm its size.

Still, the observation that Google does not succeed with much of anything outside of search might be premature. Even "search" took a while to catch on. So, no, Google does not immediately dominate "every" market or segment it enters. It experiments. It fails. If it succeeds 10 percent of the time, and fails often enough, it just might discover some significant-sized new businesses.

Christmas Humor

MEMO: December 1st
TO: ALL EMPLOYEES

I'm happy to inform you that the company Christmas Party will take place
on December 23rd at Luigi's Open Pit Barbecue.
There will be lots of spiked eggnog and a small band playing traditional
carols... feel free to sing along.
And don't be surprised if our CEO shows up dressed as Santa Claus to
light the Christmas tree!
Exchange of gifts among employees can be done at that time; however, no
gift should be over $10.
Merry Christmas to you, and your family.
Patty Lewis, Human Resources Director


MEMO: December 2nd
TO: ALL EMPLOYEES

In no way was yesterday's memo intended to exclude our Jewish employees.
We recognize that Hanukkah is an important holiday that often coincides
with Christmas (though unfortunately not this year). However, from now
on, we're calling it our "Holiday Party."
The same policy applies to employees who are celebrating Kwanzaa at this
time.
There will be no Christmas tree and no Christmas carols sung.
Happy Holidays to you, and your family.
Patty Lewis, Human Resources Director
MEMO: December 3rd
TO: ALL EMPLOYEES

Regarding the anonymous note I received from a member of Alcoholics
Anonymous requesting a non-drinking table, I'm happy to accommodate this
request, but, don't forget, if I put a sign on the table that reads, "AA
Only," you won't be anonymous anymore.
In addition, forget about the gifts exchange -- no gifts will be allowed
since the union members feel that $10 is too much money.
Happy Holidays to you, and your family.
Patty Lewis, Human Researchers Director


MEMO: December 7th
TO: ALL EMPLOYEES

I've arranged for members of Overeaters Anonymous to sit farthest from
the dessert buffet and pregnant women closest to the restrooms.
Gays are allowed to sit with each other.
Lesbians do not have to sit with the gay men; each will have their own table.
Yes, there will be a flower arrangement for the gay men's table.
Happy now!?
Patty Lewis, Human Racehorses Director

MEMO: December 9th
TO: ALL EMPLOYEES

People, people! -- Nothing sinister was intended by wanting our CEO to
play Santa Claus!
Even if the anagram of "Santa" does happen to be "Satan," there is no
evil connotation to our own "little man in a red suit."
Patty Lewis, Human Rat Race Director

MEMO: December 10th
TO: ALL EMPLOYEES

Vegetarians -- I've had it with you people! We're going to hold this
party at Luigi's Open Pit whether you like it or not, you can just sit
at the table farthest from the "grill of death," as you put it, and
you'll get salad bar only, including hydroponic tomatoes. But, you know
tomatoes have feelings, too. They scream when you slice them. I've heard
them scream.
I'm hearing them right now... Ha!
I hope you all have a rotten holiday! Drive drunk and die, you hear me?!
The ***** from Hell

MEMO: December 14th
TO: ALL EMPLOYEES

I'm sure I speak for all of us in wishing Patty Lewis a speedy recovery
from her stress-related illness. I'll continue to forward your cards to
her at the sanitarium. In the meantime, management has decided to cancel
our Holiday Party and give everyone the afternoon of the 23rd off with
full pay.
Happy Holidays.
Terri Bishop, Acting Human Resources Director

IBM Blue Cloud: Internet Style Data Centers

IBM’s Blue Cloud is a platform for cloud-based computing, expected to be available to customers in the spring of 2008, supporting systems with Power and x86 processors.

“Blue Cloud" will allow corporate data centers to operate more like the Internet, enabling computing across a distributed, globally accessible fabric of resources, rather than on local machines or remote server farms.

It is, along with Amazon's Elastic Compute Cloud, a seminal step towards network-based computing architectures. Sun Microsystems was ahead of its time in declaring that the "network is the computer." But cloud computing is going to fulfill the prediction.

Call it "software as a service" if you like. The point is that we are nearing an era where resources will be invoked from the computing cloud using a Web browser. Policies still will be needed to authorize use of specific resources, to be sure. But the larger point is that computing, storage and application resources will reside "in the cloud," and be invoked as required by users at the edge of the cloud.

There are all sorts of practical advantages. Distributed or mobile workers can simply invoke their services and information from where they are, using a standard Web browser. Everyone always will have the latest version, the latest patch, the latest version or update.

Computationally intense activities can be handled by clusters of machines designed for such intensity. Storage can be invoked, not carried; used rather than built.

If a developer needs expensive resources, they can be gotten on a sort of "time shared" basis, rather than on a "build your own computing center" basis.

Blue Cloud will be based on open standards and open source software supported by IBM software, systems technology and services.

The interesting speculation is about how cloud computing might change the way enterprises think about their application and storage architectures. Given the massive increase in the scale of IT environments, one wonders how they'll assess the trade-offs between "building data centers" and "renting reources."

Up to this point, the enterprise data center has been the penultimate computing resource. Might the "cloud" surpass even local and networked data centers?

Has the Web Killed Enterprise Intranets?

Between emerging social networking tools and Web browser front ends, it is conceivable that the need for enterprise "intranets" is not so urgent anymore. As the Internet was seen as an external network, intranets were supposed to make internal data bases, information and communication available to enterprise associates.

But email, instant messaging, texting, mobile phones, Saleforce.com and other Web-based tools arguably not allow organizations to do those things without building dedicated intranets.

Instead, we've flipped everything inside out. The big movement now is towards software architectures that allow internal resources to be exposed to users with access to Web browsers.

Airline Exec for Red Hat

Sometime big has changed when a former Delta Airlines COO takes over as the CEO of a technology company like Red Hat.

Red Hat isn’t a little startup trying to convert people to Linux. It’s a business selling to big corporations. It needs leadership used to selling enterprises.Also, if Red Hat can reasonably expect to compete to supply half of the worldwide server market by 2015, it will really have to scale. Companies like Delta are about systems and logistics, the sort of things one needs to really scale.

James Whitehurst, of course, wouldn't be the first non-technology executive brought in to head a technology company. Lou Gerstner transformed IBM into a services company, using a background of RJR Nabisco and American Express.

The choice shows how mainstream open source has become. Red Hat needs to sell to enterprise executives, with huge scale.

Vonage, AT&T Settle VoIP Patent Dispute

Vonage and at&t have finalized the settlement of a dispute between the companies. No details were released. But $39 million had been mentioned earlier.

IP Multicasting Coming?

Not being a "techie," I first became aware of "IP Multicasting" in 2000, when working with some folks developing a streaming media service. As somebody who spent some time in the cable TV business, it made a huge amount of sense. Basically, the idea is that for popular content, say a TV show that millions of people want to watch, one uses multicasting to launch a single stream that all those viewers can watch, rather than millions of discrete streams. Those of you who are network engineers will appreciate the elegance of the way this conserves bandwidth, in the same way that satellites deliver a single stream that millions of viewers can watch. That's the beauty of all multicasting: highly efficient sharing of downstream bandwidth.

Carriers proved resistance to enabling multicasting, however, for all sorts of other reasons, not the least of which was the fear that control over available bandwidth would be lost. But technology journalist Mark Stephens (Robert X. Cringely) argues multicasting is the future of television. Well, at least the future for some sorts of television: the highly-viewed, synchronous sort.

Multicast was built into the structure of the Internet from the very beginning but was generally not turned on because network administrators view it as a resource hog (local storage and resources, not bandwidth, per se).

Cisco long has been a huge supporter of multicast because it requires ever bigger and more powerful routers. That might be true, but multicasting still makes eminent sense as a way to distribute highly-popular video. Sure, there are other sorts of video that have to be unicast because demand is low. But multicasting is quite efficient of bandwidth for highly-popular streams.

Stephens uses a simple example. Say a user wants to see Seinfeld episode 60, and is entitled to do so. That event gets assigned a multicast address.
When the show is made available on a server anywhere on a part of the net that supports multicast, the user receives it. All the routers between here and there look for multicast subscriptions and enable them and the episode is is cached locally.

In order to lower their bandwidth bills, ISPs are trying to take greater control of the way we, their customers, use our "unlimited" bandwidth, says Stephens. But IP multicast offers another tool to do so, and is less bothersome.

Both Comcast and Verizon are rapidly rolling out IP multicast, Stephens notes. The reason is that IP multicast remains a highly-efficient to deliver popular programming, and means most of the linear cable channels. ESPN demands as part of its contracts that much of their programming on MPEG-2-equipped cable systems must delivered at 5 Mbps to 8 Mbps, compared to the 2 Mbps used for most other channels.

Contracts are similiar for premium cable services such as HBO or Showtime.

Internal audience studies at Comcast have shown that 90 percent of the customer base watches 10 percent of the available channels.The problem is that each of use might have a different seven favorites. Also, even if few people actually are watching, cable companies can't turn them off because programming contracts with the studios require carriage.

Multicast solves this problem because it allocates no bandwidth to channels that aren't being watched. It's an interesting business issue: the signals are "carried" but maybe not "broadcast" to consumers who aren't actually "tuned" to the channel.

IP Multicast is an alternative to P2P, in other words.

Has Apple Sold 5 Million iPhones?

Cleve Nettles at Mac9to5 thinks so. Nettles expects Apple to say so in January, at Macworld. The issue is how those sales relate to the announced goal of selling 10 million iPhones. Some people recollect Steve Jobs, Apple CEO, promising sales of 10 million phones in calendar year 2008 alone. Others seem to think he meant 10 million by the end of 2008, in total.

Rivals at Nokia and Research in Motion probably aren't excessively worried either way, given the installed base of devices each of those firms has, and the number of new devices they ship every month. Of course, Apple has a distinct advantage. It gets recurring revenue from the sales of each of its phones.

RIM and Nokia do not. So one iPhone sale is worth a lot more revenue than the sale of a new BlackBerry or Nokia handset.

Cable Targets Small Business

The coming year is when we see just how formidable U.S. cable companies will be in the small business communications market. To be sure, many veterans of the business communications market don't think cable will much of a factor in the enterprise market. Maybe not. That's not where cable companies are going to focus, which is the small business customer.

Comcast Corp. apparently plans to spend $3 billion to sign up 20 percent of small companies in its territories by 2012. Time Warner Cable Inc. is also pursuing businesses with fewer than 1,000 employees. And Cox Enterprises has been signing up lots of business customers for years.

Phone companies dominate the $25 billion annual market, which can generate profit margins about 10 percent higher than services offered to consumers or enterprises.

On the other hand, large telcos don't generate nearly as much money from phone lines and calling as they used to. In fact, small business lines provide only about five percent of at&t's revenue these days.

Cable providers, with less than five percent of the small business market, may seize one-third by 2012, saus Sanjeev Aggarwal, AMI-Partners VP.

So two things are going to happen. In some cases telcos will cut their own prices to match the discounts cablers are expected to offer. They'll keep share but sacrifice margins. Or, telcos can simply accept the loss of some share to maintain margins for a while longer.

Anticipating the onslaught, Verizon and at&t seem to be prepared to cut prices and bundle services to keep small-business customers who sign up on contracts.

Verizon offers 20 percent off Internet access for companies taking unlimited local and long-distance calling plans for one year. Customers buying voice services from at&t pay roughly 40 percent less with an annual Internet service contract.

About 54 percent of AT&T's small and mid-sized-business customers in areas where cable may compete have might already have signed new contracts, some observers suggest.

Blogging Tops New York Times, Sort of...

According to ReadWriteWeb, a five-year-old bet was settled recently. The bet, between New York Times executive Martin Nisenholtz and Web 2.0 Founding Father Dave Winer, was about blogs topping the New York Times in Google search results for the top five news stories of 2007.

Rogers Cadenhead has done the tabulation and found that Winer, and blogging, have indeed won. Sort of, ReadWriteWeb notes.

According to the Associated Press, the top 5 news stories of 2007 were Chinese exports, oil prices, Iraq war, Mortgage crisis and the Virginia Tech killings. Obviously this is a list for US news markets and not the entire world.

Today, a Google search for those terms brings up a blog higher than the New York TImes for Chinese exports (Blogging Stocks 19th vs. NYT 20th), Iraq War (a blog was 17th, NYT 20th) and Virginia Tech killings (Newsvine coverage of the AP's top stories of the year is 9th in Google vs. the Times at number 30.) So blogs topped the Times in 3 out of 5 top stories.

Wikipedia, however, ranks higher than both blogs and wikis according to Candenhead.

The three blogs that topped the Times in the Google results in question don't tell such a simple story. Two are stories from the AOL-owned Blogging Stocks and one is from social news site Newsvine, now owned by MSNBC.

Mobile Web is About the Big Brands

You'd be hard pressed to find a more significant year in the U.S. mobile business than the one that is passing. We witnessed the entry of a major consumer and computer electronics retailer--Apple--into the mobile business. We saw the emergence of an unprecedented revenue model for the iPhone.

We saw Google put together an open source community around Android that includes tier-one mobile service providers. We saw Google make at least an opening bid for actual spectrum, and cement development deals with Sprint and Clearwire for WiMAX handsets.

We saw the Federal Communications Commission mandate an "open networks, open devices" regime for the 700-MHz C block spectrum, the best quality mobile spectrum yet to be made available, because of its wall-penetrating abilities signals in the 700-MHz range possess.

We saw Verizon Wireless declare its support for "open" networks as well. Taken together, all the developments signal the emergence of the mobile Web. And that is going to create new space for contestants, including the most-popular Web brands.

That is not to say networks are unimportant. It is to say that now handsets and brands become much more important in the wireless business. That's a huge change.

Word of Mouth, Internet Key for Breaking News

Even though television plays a key role in alerting and updating people about big news stories, the initial awareness often comes by word of mouth or the Internet.

After the April 16 Virginia Tech massacre, Frank N. Magid Associates polled Millennials; Gen Xers; and Baby Boomers about how they first got the news.

Television coverage was the primary source to which all three groups turned for information on the shooting spree, but nearly a quarter (23 percent) of the adult Millennials first learned about the story on the Internet, compared with 19 percent of Gen Xers and 16 percent of Baby Boomers.

About 29 percent of Millenials heard about the Virginia Tech story by word of mouth, which includes text messaging.

In fact, in all three target demos, word of mouth was the number one source of alerts to those who weren't at home.

On the other hand, 37 percent of Millennials first learned about the story from TV, as did 43 percent of Gen Xers and 50 percent of Boomers.

Who Will Sue Google for Incorrect Traffic?

Spain's top media company Prisa said Monday it had taken legal action against Nielsen for miscounting traffic to its ElPais.com Web site as well as readers of its newspaper.

Prisa said its Internet arm Pisacom and El Pais were suing Nielson "based on the damage caused by the unjustified downward revision in the number of unique visitors of ELPAIS.com during the current year."

"The lawsuit argues that due to the serious negligence on the part of Nielson in its measurement of audience figures for ELPAIS.COM, El Pais and Prisa suffered serious damages due to lost advertising this year."

Data from marketing firms like Nielsen are important in determining the amount websites charge for advertising, with sites with high viewing figures being able to charge higher fees to sponsors. Networks sometimes have such disputes with the firms doing the counting.

One has to wonder when somebody will sue Google for mishandling a search ranking.