In case you are having trouble sending and receiving email on your at&t Wireless smart phone, or are unable to get connected using your data card, there is a wireless network outage affecting at&t Wireless users in the Midwest and Southeast.
Thursday, January 31, 2008
One way of looking at the impact of the overpayment is to analyze the former Nextel's contribution to Sprint Nextel's overall business. In the most-recent quarter, Sprint Nextel reported $8.04 billion worth of service revenues, of which the former Nextel business contributed 35 percent, or about $2.6 billion. On an annualized basis, call that $10.3 billion of gross revenue.
Sprint's profit margin on wireless services is about 32.4 percent. So call the former Nextel profit as $3.3 billion a year. The magnitude of the overpayment is 9.4 times the annual profit from owning the business.
The coming write down essentially means Sprint overpaid $31 billion to acquire Nextel. Blunders of that magnitude often are enough to spell the end of independent life for any corporation that makes such a sizable mistake.
Those cable cuts took out much voice and Internet communications in many parts of Asia, as well as 60 percent of capacity between Asia and the United States.
The 2006 Hengchun earthquake occurred on December 26, 2006 at 12:25 UTC (20:25 local time), with an epicenter off the southwest coast of Taiwan, approximately 22.8 km west southwest of Hengchun, Pingtung County, Taiwan, with an exact hypocenter 21.9 km deep in the Luzon Strait ( [show location on an interactive map] 21.89° N 120.56° E), which connects the South China Sea with the Philippine Sea.
In the winter of 2000, Telstra, Australia's biggest Internet service provider had a cable cut of its own on Nov. 19, when its Internet backbone cable, sitting in less than 100 feet of seawater about 40 miles off Singapore, was damaged by unknown causes.
Telstra at that time relied on the cable, known as SEA-ME-WE 3 (for Southeast Asia, Middle East and Western Europe) for more than 60 percent of its Internet transmission capacity.
About 23,600 miles long, the cable connected 33 countries, touching places as diverse as Singapore, Malaysia, Thailand, India, Saudi Arabia, Egypt, Djibouti, Turkey, Greece, Italy, Portugal, France and the U.K.
Clearwire touts its vision of the future as mobile Internet. But so far, its customer base is a replacement for dial-up, cable modem or Digital Subscriber Line service. Just four percent of its customers appear to substituting a mobile service for WiMAX.
That isn't to say the customer base and apparent value proposition will remain as it currently is. WiMAX someday may compete more directly for the broadband-equipped mobile customer base.
That isn't the case today, where Clearwire seems to be competing with cable and telco fixed broadband services. At some point, the mobility play is supposed to have Clearwire and WiMAX competing more robustly for the data card and smart mobile phone customer. But lots of challenges remain.
WiMAX might someday primarily be a platform for mobile broadband. In Sprint's case, it might primarily be the next-generation replacement for 3G broadband. If the former winds up being the case, cost control will be more important. If the latter, feature richness will be more important.
The reason cost control is more important for a mobile broadband network is that the revenue sources will be less robust, on a "dollar for bit" basis, compared to networks that make lots of revenue from voice and texting services, which are highly efficient, on a "revenue for bit" basis.
Advertising also is more important if mobile broadband winds up being the primary attraction for WiMAX users. That suggests content access is more important than communications, and that in turn means media, and media always means advertising.
It could take a week or two to fix the cables, in part because of bad weather, some executives say.
Users in India, Egypt, Qatar, Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain are affected by the outages.
Observers think an anchor might have snagged the cables. At least that's what Flag Telecom Group Ltd. now believes. The incident took place 8.3 kilometers (5.2 miles) from Alexandria beach in northern Egypt.
Emirates Integrated Telecommunications Co., the United Arab Emirates' second-biggest mobile-phone company, is working with the cable operators, Flag Telecom and SEA-ME-WE 4, to find out why the cables were cut and to determine when service can be restored.
The outage is a reminder that physical infrastructure, however mundane, underlies all of modern computing and communications. It's also a reminder that if your business or life depends on Internet-based communications, commerce and content, you need a diversity strategy. It costs more money. But so does inability to do your work.
A growing computing architectural theme is the move of functions out of proprietary data centers and "into the cloud," a return in some ways to the days of time sharing as a computing architecture. So it is that 330,000 or so developers have registered to use Amazon Web Services, up more than 30,000 from the prior quarter.
And those users are driving traffic and compute cycles. Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (S3) consumed more bandwidth in fourth quarter 2007 than was consumed in the same period by all of Amazon.com's global Web sites combined.
At some point, the availability of cloud computing resources is going to fundamentally alter the tradtional "build versus buy" equation that has had enterprises and other large entities building and maintaining their own data centers. At some point the computing framework used by smaller entities and individuals is going to change as well.
To the extent that servers, air conditioning, power, space and communications are the underpinning for applications, and to the extent that enterprises and individuals typically only care about infrastructure to the extent that it enables use of applications, one is lead to ponder the notion of outsourcing of infrastructure.
To what extent must even a large provider "own" its own conduits, routes, physical media, servers and software of an infrastructure sort? To what extent can those things be sourced more extensively on a "buy" basis rather than a "build" basis? In how many more use cases will it make sense to source wholesale capabilities from other providers instead of building, owning and operating facilities?
To the extent that it is the "computing" that matters, not the "computers," one also might ask whether it is the "communications" rather than the "network" that matters.
Revenues from Packet8 Virtual Office hosted business phone service now contribute 48 percent of total 8x8 revenues, up one percent from the previous quarter. Virtual Office revenue grew eight percent over the prior quarter. That's important given 8x8's intention to focus on business customers, even as it fills out its revenue with consumer customers.
In the consumer segment, revenue was flat, and declined by three percent year over year. So the consumer business appears stable.
During the December quarter, 8x8 gross margins were 65 percent, an improvement 8x8 attributes to improved scale. Overall service margins rose to 70 percent. Packet8 Virtual Office service margins increased to an all time high of 83 percent, an impressive figure rivaling the sort of return an efficient provider gets from far-simpler T1 services.
Wednesday, January 30, 2008
Many years ago, wireless and wireline minutes of use were sold on a metered basis. These days voice and texting are sold by the bucket. There's now more experimentation with that sort of model for broadband access as well.
It might seem odd, but changing the way broadband access is priced at retail, using a model similar to wireless minutes of use and texting, might be beneficial for end users, not simply for Internet Service Providers.
The reason is that if a user wants to buy a bigger bucket to move more packets for peer-to-peer video, the user is happier and so is the provider, who is able to match revenue with use of network resources.
That's arguably a better solution that having ISPs deploy sniffing and packet inspection capabilities so they can inspect all packets (as happy as some solution providers would be to sell all that capability).
Since deep packet inspection has to impose some overhead and latency, the user's applications arguably should work better as well (also avoiding privacy concerns). If any user is found to be shipping around video bits in violation of copyright, there are other remedies.
That's the way enterprises and businesses buy bandwidth, by the way. They pay more money but have unrestricted right to use the bandwidth they've purchased. Pricing consumer access in the same way wireless text and voice now can be bought would allow users to make their own choices about what applications they want to use, and how much.
It isn't metered usage in any way more objectionable than buckets of minutes or texting are. And it might allow ISPs to avoid the DPI effort.
Two international submarine cables in the Mediterranean Sea were damaged on Jan. 30, causing significant disruptions to Internet and phone traffic in Egypt, Saudi Arabia, India and all of the Gulf states.
The two damaged cables are the FLAG Europe-Asia cable, operated by FLAG Telecom, and SeaMeWe-4 (South East Asia-Middle East-Western Europe-4), a consortium cable owned jointly by fifteen telecommunications companies. These two cables account for the majority of international communications capacity between Europe and the Middle East.
The two cable cuts leave the older SeaMeWe-3 system as the only cable in service connecting Europe to the Middle East via Egypt.
The cable cuts have reduced the amount of available capacity on this direct route to Europe by 75 percent (620 Gbps). Until service is restored, many carriers in Egypt and the Middle East must now route their European traffic around the globe, through South East Asia and across the Pacific and Atlantic oceans, or use satellite transport to some extent.
Global capacity executives are watching to see whether a new boost in undersea capacity on some routes across the Pacific will disrupt trans-Pacific pricing. Some also have expressed concern that new routes between Europe and India might have the same effect. The latest undersea cable disruption shows how important multiple and diverse routes have become, though.
If you go to the Dell Web site and try to buy a Dell Axim, a Windows Mobile-powered personal digital assistant, you can't. So maybe Dell simply is coming out with a new version of the device.
Still, 3GSM happens in February. And 3GSM is the place you'd want to be at if announcing anything important in the wireless space.
Of course, the Axim was a PDA, not a phone. But 3GSM is a phone show. And many of us stopped using our Palms some time ago when our smart phones provided all that functionality inside the phone itself.
If Dell were to introduce a mobile, 3GSM is where they'd want to do it.
So it appears Richards seeks prices significantly lower than the £4.11 per megabyte level that tends to be the average now. European mobile carriers probably will hope to stave off such regulation by voluntarily dropping their tariffs in time for an announcement at Mobile World Congress meeting in February.
The moves would be good for consumers, and obviously financially damaging for carriers. As always is the case, the lower tariffs also would make it harder for upstart competitors to grow their companies by undercutting the high tariffs.
Functionally separating retail operations and network functions might make sense in this case, given the other pressing demands for capital Sprint also faces. It isn't clear that Sprint derives significant competitive advantage from retaining ownership of the transmission facilities.
Best Buy might also be more inclined to invest in the new WiMAX network if such wholesale access were built into the investment agreements, as Best Buy might want to brand its own services.
Google is more interested in fostering an open networks environment and might not be that interested in any sort of Google-branded service. But wholesale access might be interesting if Google wants to experiment with applications that require such access, and wants to do so in a "real world" environment.
Tuesday, January 29, 2008
A new optical transport layer also will emerge, Infonetics believes. This new layer will be a fused Ethernet-WDM packet transport with circuit-like capabilities via Ethernet transport tunnels, also known as COE, or connection oriented Ethernet. That means more adoption of T-MPLS and PBT, Infonetics believes.
There was a time when some argued that "connectionless" protocols such as IP would replace "connection oriented" protocols such as time division multiplex, SONET and asynchronous transfer mode. As it turns out, there's a reason why connection-oriented protocols, or at least protocols that emulate connections, are important. Some traffic types, especially video and voice, are susceptible to impairments that can arise when connectionless protocols are used.
But with the advent of IP-delivered video services, service and application providers have a chance to price services in a more natural "value to me" basis. If one looks simply at retail pricing and "bandwidth consumed," text messages "cost" the most based on bandwidth consumed, with voice second. Video and Internet services "cost" very little on a "bandwidth consumed" basis.
But that isn't the point. Text, voice and other communications applications are valued one way; video entertainment or simple Web access another way. In other words, in the communications space, "cost" is not the same thing as "price."
Target and Wal-Mart sell some products as loss leaders to get traffic into the store, so people buy lots of other products with varying profit margins. Communications services aren't any different. Some have have margins for providers, others have slim margins. The key, though, is value to the end user, not "bandwidth consumed."
Text messages "cost" very little, as the network to enable sending and receiving them is a sunk cost. But cost isn't price. Users demonstrate by their behavior that they value text messaging highly, on a "bandwidth consumed" basis. If one letter of a text message requires one byte, then sending or receving 6,553 messages consumes about a megabyte of data.
So a 160-character or smaller message might "cost" 10 to 15 cents. So a megabyte worth of text messaging represents as much as $655 to $983 for domestic usage. International messages obviously "cost" more.
A month's unlimited usage of entertainment video might cost $50, consuming more than a megabyte in a single second of use.
The point is that the retail price of any particular message or service has little to do with the actual "cost" of providing it, any more than the "price" of perfume, luxury automobiles, shoes or applications.
"Price" for a video service has to be vastly lower, on a "bandwidth consumed" basis, than texting, instant messaging or voice. That has little to do with user-perceived value, though.
Mobiles need to acquire the ability to run Web applications, and need to do so in ways that are similar to the use of those apps on a PC, so users don't have to relearn a behavior. Cross-platform support also means Nokia can benefit from the huge numbers of developers working in the C, Flash, Java and other environments, for example.
One year after the passage of a law designed to ease the entry into the cable market of competitive providers in Michigan, only 110 of 2,000 communities in the state have a choice of cable providers, according to Multichannel News.
That is to be expected. Cable choice requires construction of brand new networks, not just the granting of a franchise. That takes immense amounts of capital and time, as well. A single new network in a single community can take three years or more to build, if there are no competing demands on construction and installation resources.
And there is history to consider. New video service providers have been attempting to so just this sort of thing for several decades, using a variety of methods, of which the most successful so far has been the use of direct broadcast satellite. There have been scattered regional efforts to duplicate cable networks, but overbuilders have not been notably successful, in large part because it is difficult to justify building a network that gets less than 30 percent penetration, which is what overbuilders largely have been able to attain.
Voice and cable modem services have helped the business case, but overbuilding remains a challenging financial proposition, and few expect widespread new competition in the terrestrial space from any other than incumbent local telephone companies.
The point is that nobody should be surprised nothing much has happened in just a year. New ubiquitous broadband networks take time to build, as well as lots of capital. If it were easy, lots of people would be doing it.
Operating income was up 15.1 percent compared to the same quarter of 2006, while churn was down to 2.0 percent from 2.3 percent in the third quarter of 2006.
Contract customer net additions in the third quarter of 2007 made up 65 percent of customer growth, down from 80 percent in the second quarter of 2007 and 96 percent in the third quarter of 2006. Prepaid additions are the reason.
Contract customers represented 84 percent of T-Mobile USA's installed base.
Blended churn, including both contract and prepaid customers, was 2.9 percent in the third quarter of 2007, up from 2.7 percent in the second quarter of 2007 and down from three percent in the third quarter of 2006.
Blended ARPU was $53 in the third quarter of 2007, the same as the second quarter of 2007 and up from $52 in the third quarter of 2006.
Contract ARPU was $57 in the third quarter of 2007, the same as in the second quarter of 2007 and up from $56 in the third quarter of 2006, driven by increasing data services revenues.
Data services revenues were $666 million in the third quarter of 2007, representing 15.4 percent of blended ARPU, or $8.10 per customer, compared to 14.7 percent of blended ARPU, or $7.80 per customer in the second quarter of 2007, and 11.3 percent of blended ARPU, or $5.90 per customer in third quarter of 2006.
Text messaging still is the most significant driver increasing data ARPU. The total number of short message service and multimedia messaging service messages increased to almost 21 billion in the third quarter of 2007, compared to 18 billion in the second quarter of 2007 and 10 billion in the third quarter of 2006.
Monday, January 28, 2008
SureWest, which operates triple play services in Roseville, Calif. and Kansas City, seems to have decided that mass market wireless is a scale business inefficiently operated by a purely local operator. Also, now that SureWest operates in more than one geography, it is unable to offer the same set of services in Kansas City that it now offers in Roseville, complicating the firm's marketing efforts.
Necessity often is the mother of invention, and SureWest seems now to be betting its future on broadband services, not wireless and broadband. In similar fashion, Qwest has decided to take a similar posture, having outsourced its wireless offerings to Sprint and its video entertainment to DirecTV.
It's worth keeping in mind: business strategies appropriate for scale players do not often make as much sense--if sense at all--for niche players. It is less a matter of what one would like to do and more a matter of what one practically can do.
So if a customer buys a FiOS fiber to home service, is that a different product than the alternative it replaces? If Verizon added just 19,000 DSL subs and an order of magnitude more FiOS subs, what does that suggest? Right now it is hard to tell what it means, as Verizon does not appear to be providing detail on DSL penetration as distinct from FiOS Internet.
So far, Verizon says it has 21 percent FiOS Internet penetration where it can sell the service.
Presumably that includes virtually all of the DSL subs who converted over to FiOS. At the end of March 2007 Verizon said it had overall broadband penetration of about 16.8 percent.
So it is conceivable that FiOS availability boosts broadband access penetration by something slightly less than four percent of marketable homes, as well as garnering 16 percent of homes as video subscribers.
For the moment, FiOS Internet appears largely to be a substitute for DSL. That should change over time, as nearly all major market consumers in Verizon's footprint have a chance to buy Ethernet services ranging from 10 to 50 Mbps. It's hard to imagine that not emerging as a differentiated product.
In football, they'd call his "tough yards on the ground." Verizon's four percent increase in fourth-quarter profit came primarily from the mobile business, as traditional land-line metrics continue to drift lower, despite gains in FiOS broadband access, Digital Subscriber Line sales and FiOS TV services.
Still, quarterly revenue in the consumer segment was up 2.7 percent, a significant achievement against a backdrop of share losses in the legacy consumer wireline voice business.
Verizon added about two million net wireless customers in the quarter, offsetting wireless declines of about 616,000 lines. For the full year 2007, Verizon lost about three million residential lines, or 10.6 percent of total, while business lines dropped 3.7 percent.In essence, Verizon is getting higher average revenue per unit in its wireline business, even as the total number of customers is dropping. If you wanted any proof about the revenue impact product bundling has, Verizon is providing the evidence.
Though there are important churn reduction effects, the primary reason dual play, triple play and quadruple play offers work is that they raise ARPU dramatically, allowing service providers to build businesses based on scope (selling more things to customers) rather than scale (selling the same thing to more customers).
The company added 245,000 net FiOS broadband access customers as well as another 226,000 net FiOS TV customers in the most recent quarter.
C3IP Communications, a privately-held VoIP provider based in Scottsdale, Ariz., has integrated its communications functions with the Act! customer relations management software. As a result, C3IP clients using Act! have access to customer histories, account information and other resources whenever customers call in.
These days we might call the availability of communication features inside an application a "mashup." Decades ago we would have called this an example of computer-telephony integration. By either name, the idea is roughly the same: embed communications inside a business process.
So the issue now is how well Verizon will do in the market share battle with cable companies, as each swaps share in their legacy businesses while trying to gain the upper hand in the broadband access business. Up to this point cable has had the advantage, gaining more voice customers than Verizon and at&t have gained video customers.
Depending on whose data one wished to cite, telcos either have closed the gap with cable or are taking more new share in the broadband access business than cable companies are. The installed base generally is seen as reflecting a lead for cable, but the installed base gap is expected to close over the next couple of years, by most estimates.
Sunday, January 27, 2008
They might be right. But there is something more than bandwidth at issue here, and that is the marketing platform. If you have Millenial children, ask yourself what their preferences are in the area of broadband and video entertainment providers (You know they all rely on their mobiles).
Up to this point, though, it has been the common pattern to buy both video and broadband from the cable company. What we need to watch is what happens when services such as Verizon's FiOS fiber to home service are available. The issue is not just how much bandwidth they need or will pay for.
The issue is whether FiOS or fiber to home services are a more compelling product than cable modem services.
That effort failed. Similar spectrum then was touted by the likes of Winstar, Teligent and others as a solution for high-speed access in the business market. The effort failed.
Much spectrum then was acquired by firms such as Sprint Nextel, BellSouth and MCI and spend years essentially languishing. Now Clearwire and Sprint say the former MMDS spectrum will be the foundation for WiMAX.
We shall see. A smaller new company, Towerstream Corp., is selling 8 Mbps broadband connections for $1,000 a month in eight markets, and currently plans to operate in 20 cities within two years.
In its Seattle market, starting February 1, new customers will be able to buy 3 Mbps connections bandwidth for $499 a month, with free installation. Towerstream offers businesses a range of bandwidth options including T1, T3, 100 and 1000 Mbps connections
The company has established networks in Los Angeles, Miami, Chicago, Seattle, the San Francisco Bay Area, and the greater Boston, Providence and Newport, R.I.
Using WiMAX technology, the company can “light" a city with just a few antennas. Its New York City network uses four antennas, including one on the Empire State Building.
TowerStream undercuts competitor prices for a T1 line by 50 percent or better. The small antennas that the company locates at the customers’ premises are installed by contract DISH or DirecTV installers.
Provisioning intervals normally are two or three days, compared with three to six weeks for a T1 line from a telephone company or competitive local exchange carrier.
Mid-band speeds in the 8 Mbps to 10 Mbps range seem to be the "sweet spot."
TowerStream appears to be using both telesales and direct sales approaches. It is said to have a 180-seat telemarketing center and is in the midst of expanding its sales force to 160 people, according to Morgan Joseph analysts, who say the company won 27 contracts in eight days, on the strength of 58 proposals. The company appears to have 100 or so direct sales reps trained and ready to call on prospects.
So far, however, no single entity has managed to build a big business on the backs of fixed wireless broadband in the small business, medium-sized business or enterprise markets. And it may be that the path to success is precisely to operate as a niche provider, in high-density markets, without getting grandiose. That's typically where operators have stumbled in the past. But we'll have to watch and see.
In many cases the business case rests on prosaic concerns. LMDS operators found they had trouble getting access to rooftops once landlords decided they were sitting on a gold mine. It wasn't, but the incremental real estate access charges were enough to kill the business case.
Then there is the availability of riser and conduit space, access to it and the cost of new cabling. Assuming those sorts of issues can be managed, TowerStream might have a shot, at least in some markets, such as New York.
Bandwidth in the 8 Mbps to 10 Mbps range is a bit more than the 4 Mbps to 6 Mbps mid-band Ethernet service some other providers are finding attractive.
So when Google CEO Eric Schmidt says the recreation of the PC and Internet stories are before us, he's right about the direction. When he says it is "very likely it will happen in the next year," he's most likely wrong about the timing.
The mobile Web will be a "huge revolution", as Schmidt argues. But it isn't going to reach the tipping point next year. Proclamations of the "year of the anything" are universally incorrect.
Obviously a consumer device has to be priced lower than a "business class" device. But one thing I do notice, as a "business" BlackBerry user, is that the keyboards being supplied on devices such as the Pearl and Curve have a distinctly unpleasant feel. RIM might be doing this on purpose, but the feel of the keyboard is as important to this user as the keyboard is on a PC.
Every other element of the experience is outweighed by this one fact. Again, RIM might be doing that on purpose, to differentiate the market segments each device appeals to. If so, it's working. The 8800 class of devices are the only ones with a tactile experience I can tolerate. That's one way to create differentiation of user experience, I will say.
The omission of cameras and so forth also are design features intended to make the 8800 appeal to enterprises. But sometimes it comes down to other simple features. Like the feel of a keyboard.
To some extent, the rise of the cable industry was an early and crude form of on-demand viewing, to the extent that viewers began to break away from the "three networks" experience, starting a process of audience fragmentation that continues today in much more diverse forms.
But movie downloading isn't the only future. In fact, the way new visual media are being used suggests that consumers are taking an "all of the above" approach to media.
People might continue to rent DVDs as well. But maybe not in the same way. "Unless video stores are reinvented, it may be that in five years, there are tens of thousands of kiosks, millions of online DVD renters and very few video stores," says Reed Hastings, Netflix CEO.If you look at any sort of DVD media as an example of "sideloading," as people sideload music onto their iPods and MP3 players, you get the idea. People download songs. But they also may stream or sideload. And though one often thinks online delivery is the only viable business format, one can imagine other ways to do things.
Price, for example, might be one way to differentiate the market. Online or to-the-TV downloads or streaming will have a higher price point, with a more "immediate" delivery format. But mailed DVDs will have a much-lower price point, with less immediate delivery. But the point is that the delivery time might not matter.
On the Netflix unlimited three DVD plan, can have as many as three movies "checked out" at any one time. And if a person is busy enough, viewing of those movies only happens on weekends. So "immediate" availability isn't required. The three selections have to be available on the weekend.
Release windows still are a factor as well. If you want to see a movie, and missed it in the theaters, you can view it about a month to 45 days sooner than any "on demand" outlet has the content, if you watch on a DVD. On an unlimited rental plan, the cost of any viewing is arbitrary.
Cable and Internet VOD costs something on the order of $4.00 per movie, and the content has to be viewed within a certain period of time, sometimes within 24 hours.Selection probably will be an issue as well. It is hard to imagine an equivalent lineup of online titles as the Netflix catalog represents, especially in the "long tail" area of niche content.
"Despite the growth of VOD over the last five years, DVD rental has been stable, with online rental and kiosk rental making up for store losses," says Hastings. "In the United States, DVD spending, including purchase, is still approximately 20 times larger than cable and Internet VoD combined, according to Adams Media Research."Just about everybody thinks this will change, at some point. The issue is whether online delivery is the only choice, or whether other delivery methods still will remain a significant part of the mix. Price, release windows, immediacy, and depth of catalog suggest there is room for multiple consumption modes.
Google OneBox is an example of how search will change as mobile queries increase. In an enterprise setting, OneBox delivers real-time information from enterprise sources, such as CRM, ERP and business intelligence systems, based on a user's search query. In a consumer application, entering a movie title might yield a top result showing screening times for that movie at the closest theater.
The search algorithms have to anticipate what need a user has for a particular bit of information based in part on what device is used to make a query. In a mobile setting, it is a fair bet that a query for any type of product is related to some immediate need for using that product. Starbucks coffee, Italian food or bagel, perhaps.
So adapting applications such as search for a mobile use case requires more than adapting the display for a smaller screen, oriented in a different horizontal-vertical dimension and often with limited navigation tools and less bandwidth than a wired environment provides.
The reason for queries, as well as the types of queries, arguably are different in a mobile context. One is more likely to be querying a customer or inventory database in the office. One is more likely to be looking for someplace to eat when out of the office.
And then there's there the time of day, day of week dimension. People will be asking different questions on weekends than weekdays. They'll be seeking different answers after 5 p.m. or 7 p.m. than at 10 a.m.
All of which increases the value of locational knowledge and mapping. But you probably already had that figured out.
At some point, as much more video starts to be delivered using IP networks, network marketers and engineers are going to have to come up with ways to entice people to use alternate means of delivery, when it is feasible to do so. At some point, it simply will not make sense to chew up valuable voice and interactive data bandwidth for relatively low value YouTube clips, as entertaining as they might be.
Consider for example what Qwest is doing: it has esentially decided to keep all traditional linear video programming, including high definition TV and on-demand programming intended for TV screen viewing, off its IP pipe. It is doing so by delivering linear TV in the most bandwidth efficient means possible, namely by satellite, streaming point-to-multipoint.
As would be the case for IP multicasting, the idea is simple" launch one single copy of each program to a virtually unlimited number of users who can view the stream at the same time or on a store-and-watch-later basis (TiVo or another digital video recorder).
That will reserve the IP connection for unicast video and other interactive applications. The same sort of "offloading" principle is used by Netflix with its "DVD in the mail" approach. The point is that we do not have to force everybody to use IP bandwidth for watching unicast video when multicasting, sideloading, satellite, physical media or some other approach, including time-shifted delivery, might work just as well.
The baleful alternatives will find service providers unable to meet customer demand for bandwidth because there no longer is any money to be made; a dramatic increase in monthly prices; or both. Consumers are smart. Given a reasonable set of different ways to get video, at discrete prices for different delivery times and media, they'll make choices that relieve pressure on access bandwidth bottlenecks.
Friday, January 25, 2008
The news that Dell now will be selling the Fonality VoIP Phone System through its global SME sales organization, as well as its channel is simply more confirmation of the trend.
At the same time, there is abundant evidence that not all providers are equally advantaged in the SME space as the technological complexity of services intensifies. Some providers used to selling connectivity services with a clear network demarcation are going to find the going much tougher as the demarc moves to the desktop and the handset.
VoIP, in particular, requires more active assessment, management, monitoring and installation activity and support. And that's just at the network layer. As voice and communications become more embedded in actual end user applications, the level of complexity will take another leap. So, going forward, every provider inevitably will wind up more involved than perhaps desired in all sorts of implementation, optimization and management activities.
More skill and more cost are the inevitable result.
On the heels of Verizon's new lawsuit against Cox Enterprises for VoIP patent infringement, we might be seeing the materialization of the threat. Executives in the competitive VoIP community have privately worried about just such a turn of events for some time. It now looks as though those fears are justified.
Justin McLain, Endeavor Telecom CEO, partly in jest (but only partly) recently said at a panel at the Internet Telephony Expo that any independent, "over the top" VoIP provider had better have all the funding they need for 24 months, because if not, the companies will fold within that period. "You might want to look for another job," McLain said, again partly in jest, but only partly.
Competing against well-established providers who own their own access facilities and have huge customer bases, plus the ability to bundle entertainment video and broadband access or mobile services simply is going to be too tough, at least in the consumer market segment.
"No bring your own broadband provider really is successful," McLain said. In fact, a good part of any independent provider's success in the consumer market is driven to a large extent by customers who recently have immigrated to the United States and have high needs for international calling back to their home countries, McLain says.
Some other part of the market is composed of price-conscious callers, but the problem is that the average revenue per user a provider can generate from that segment is not enough to support a business, says Sanford McMurtree, RNK Communications VP.
Among the other possible changes in strategy are a shift to multi-level marketing on the Amway pattern, says Gary Coben, deltathree director. "For all the money spent marketing VoIP services, there aren't that many customers," Coben says. "That means people aren't comfortable buying."
It looks to be a tough year for independent VoIP providers who cannot reposition from a consumer focus to serve smaller business customers.
Thursday, January 24, 2008
Not to count chickens before they hatch, but Japan's DoCoMo says it has begun a process leading to Android-powered devices being offered to customers, according to reporting by InfoWorld writer Martyn Williams. "We are starting discussions to offer handsets that will have the ," says Takeshi Natsuno, managing director.
The talks include getting support for I-mode, 's hit mobile Internet service, on the Android platform. Nearly 48 million of DoCoMo's 53 million customers subscribe to I-mode, so having it on Android will be key to the platform's success in Japan.
The availability of Android-powered phones on the DoCoMo network of course was expected. The point is that tangible steps now are being taken to make that a reality. Since nobody is going to be able to assess how important Android might be until people actually get to use devices running the new operating system, it's an important step.
However meaningful the change, it seems fairly clear that the terrain now is shifting in a subtle way. In the old days "telephone service" "dial tone" or even "messaging" was a discrete point solution, not requiring understanding of what the end user actually was doing at the use site, Martin Suter, Objectword president says.
By definition, a supplier has to understand much more about what a user or organization actually has to accomplish at a site, and what software is used to support those tasks, to "communications enable" those processes.
Almost by definition, value added resellers and other technology support organizations have had to know more about what users wanted to accomplish, compared to retailers of "voice" services. And that probably will be telling over the next several years as the CEBP or "next acronym" business moves forward.
In the meantime, expect to hear lots more about how communications can affect everyday business or organizational processes, ranging from safety to inventory management and customer management. It isn't "old wine in new bottles," though some will rush to try that. It's a new role for communications: enabler of better software.
Sprint Nextel faces big problems. New CEO Dan Hesse is wasting no time "doing something." First Sprint announced significant headcount reductions (4,000) and closing of a number of retail operations (125 stores and 4,000 retail partners) Now Sprint says CFO Paul Saleh, Chief Marketing Officer Tim Kelly and Mark Angelino, president of sales and distribution, are leaving the company.
The executive changes involve officials most responsible for building the telecom company's brand and customer base, or more accurately, a declining customer base. The earlier set of moves will help Sprint reduce its overall and cost structure. The resignations allow Hesse to bring in a new team to change course. The issue now is what course Sprint Nextel will take.
For starters, billing and operations support software firms are starting to be more active. That suggests their carrier customers finally are thinking about generating revenue from deploying IMS features (IMS is a platform allowing services providers to rapidly and cheaply create new services, test and then deploy them).
Carrier chief financial officers also seem to be asking tougher questions, which suggests carrier technologists are asking for authority to buy platforms. Many of the questions seem to be of the "you bought ATM 10 years ago, soft switches five years ago and now you want to buy IMS?"
IMS backers also now seem to be more aware that it really is infrastructure, and that the search for services will have to follow. "You don't have Google until you have the Internet," Vexler notes. Up to this point some have worried about identifying some "killer app" that would justify IMS deployment. Now there may be more awareness that until the platform is in place we won't really know what apps will resonate.
It probably still is a fair bet that wireless apps will be early candidates, as IMS originally was created by mobile carriers.
The company says it is confident about sustained double-digit growth in adjusted earnings per share in 2008. Some of that will be delivered by merger synergies or other cost cuts, as revenue will be growing at a mid-single-digit range in 2008. Growth in 2009 and subsequent years is expected at about that same rate: at mid-single-digits, possibly better.
Mid-teens wireless service revenue growth is expected in 2008, but again that partially is driven by the acquisition of Dobson Communications.
Enterprise revenue growth is expected to be in the mid-single-digit range by 2010. In-region consumer revenues will "be positive." In-region business services will grow in the mid-single-digit range as well.
So the company says it is "confident" it has the ability to deliver sustained double-digit growth in adjusted earnings per share and strong growth in free cash flow in 2008 and on an ongoing basis.
Some of that performance is driven by cost savings over the next few years because of the BellSouth merger. Company executives say they wrung about $2 billion in cost out of the company in 2007 and will save $5.9 billion in 2008 as well. Savings will grow to "more than $7.0 billion in 2010."
The forward-looking guidance arguably is more important than the fourth-quarter results themselves, which obviously were driven by acquisition-inflated numbers.
The company's net gain of 2.7 million wireless subscribers was the highest quarterly subscriber increase ever for any U.S. wireless provider, up 13.5 percent from 2.4 million net adds in the year-earlier fourth quarter.
But that performance includes the impact of the acquisition of Dobson Communications, which added 1.7 million subscribers.
That's not to denigrate at&t's performance. It was a good quarter. The point is that we all need to separate out organic rates of change from those wrought by the impact of acquisitions. Lots of companies in communications hide slow or lagging internal growth by buying other companies, with a predictable growth in revenue or customer base. That sometimes is a sign of weakness, not strength.
The VoIP AddOn developed by C3IP seamlessly integrates ACT! with BroadSoft’s BroadWorks platform Basically, BroadWorks users now can access those features directly from Act!
That means the ability to "click to dial" from the database, automatic logging of calls and screen pops on inbound calls, for example. So far, voice mashups largely have been developed as a way to improve the efficiency or effectiveness of current business processes.
That's just the way such innovations are introduced, because in a business context there has to be some measurable benefit on either cost or revenue fronts. The easiest way to demonstrate such effects is to "save money" or "save time" doing things that already must be done.
It will be a while before people start to redesign whole processes in light of ubiquitous communications embedded inside the applications themselves.
Wednesday, January 23, 2008
EarthCaller is said to run the calls over the Public Switched Telephone Network, with obvious call quality benefits. That's really a teaser for international calling, offered on a prepaid basis.
EarthCaller currently is PC-compatible at the moment.
About 76 percent of respondents say customer profiling is important, closely followed by identity management. (64 percent of respondents say that is important. That sort of knowledge is important since 67 percent of respondents say "personalization of services" is a key revenue opportunity for IP and data services
The situation won't be too surprising to anybody who has been in the service provider industry long enough. The problem arguably is easier to deal with in the IP realm, but even there network service providers might not have access to as much granular data as IP application providers do.Some observers continue to think that demographic information is helpful, and it is, up to a point. More significant, others think, is actual user behavior expressed in application use, and what users do inside those applications. Since telcos and cable companies don't have much useful information on their customer demographic profiles, ability to capture clickstreams, when legal, is much more useful.
That's another reason why the drive to capture Internet access account is so important. It isn't simply that broadband access is becoming the foundation service for a landline services provider, it is that the ability to personalize a user experience comes from knowledge about clickstreams, not calling patterns or street addresses.
Under FCC rules, the identities of daily bidders will be kept secret although bid amounts will be posted on the agency's Web site on a daily basis. So we'll know soon enough.
Most observers saay the requirement to support any technically compliant device on the C block national network, as well as any lawful applications, has contributed to a recent "embrace" by Verizon and at&t Wireless of open-network policies even on the existing mobile networks.
At least so far, many observers say Verizon Wireless is the most motivated bidder as it needs additional spectrum more than at&t, for example. Some think at&t will look to the regional allotments in other blocks as a way of filling in its footprint.
A $40 monthly fee provides unlimited domestic calling while a $20 a month plan provides 1,000 long distance minutes. The service includes an online call manager portal, unified messaging, click to call from the TV, and simultaneous ring of up to four separate telephone numbers.
So the long march towards VoIP by dominant telcos begins. As just about everybody now recognizes, VoIP will in some cases represent an incremental change in user behavior, in some cases a replacement for traditional calling and in some cases a better way to do traditional calling with a better user experience.
Pretty soon we'll start to get some insight into the ways VoIP helps traditional telcos, in addition to representing a threat to established revenue streams. Without widespread fiber-to-customer networks and a complete shut-off of traditional time division multiplex infrastructure, it will be hard to say for certain.
But Verizon executives think they will save operating expense when they are able to shut off the TDM voice network and shift everything over to IP.
“The study shows that 15 percent of employees make at least one international trip per year, which translates into costs of more than $950,000 annually per 10,000 employees," says Jeff Wilson, Brightroam general managers. Voice accounts for about 80 percent of the charges while data charges for Web browsing or testing represent 20 percent of total roaming charges.
About 62 percent of calls are made directly for business purposes while the balance of calls are personal, at 38 percent. Cell phones account for half of the devices being used to make those calls while 29 percent are originated from landlines.
The average number of calls is nine to 10 calls a day. About half of business users have smart phones rather than traditional wireless phones, the survey finds.
About four out of five companies surveyed say cell phones or smartphones are the primary communication tool used when employees travel internationally and 57 percent of all calls made on a trip are made on these devices. Users also are more likely to use a cell phone rather than a land line phone whether they are calling locally, to another country or calling back to the United States from abroad, the survey finds. If not using their cell phone, 60 percent will use a calling card and half will use the hotel phone.
Half of calls are placed back to the United States while 40 percent are local calls within the country traveled to.
With a change of presidential administration, and the high possibility that the White House will be occupied by a Democrat, all bets are off where it comes to the composition, leadership and therefore direction of Federal Communications Commission policy. But it is fair to say that a more heavily regulated approach is likely if Democrats win the White House. Incumbent tier one U.S. telcos won't like that. For other reasons, cable industry leaders will be happy as well. Competitive providers might well think their chances improve as well.
So it might be all that significant that Commissioner Michael Copps, a Democratic member of the FCC, seems to want to give incumbent wireless providers a bit of time to make good on their recent pledges to move towards more open networks, allowing any devices or applications compliant with their networks to be used.
That's an obvious counterweight to any thinking by an eventual owner of a new national broadband network that construction and activation of that similarly open network should be built as slowly as legally possible, essentially "warehousing" spectrum as long as possible. The motivation obviously is to extend the life of current revenue models as long as possible.
Pressure to keep those promises about openness on the Verizon and at&t Wireless networks will remain high if Democrats win the White House. In fact, pressure to open up wireless networks more than before is likely unstoppable if Republicans retain the White House as well. The 700-MHz auction rules about openness were pushed through by a Republican FCC chairman and the market seems to be shifting inevitably in the direction of open devices because of the market force exerted by the Apple iPhone and Google, in any case.Dominant wireless carriers really would prefer not to deal with more openness. But it appears they no longer have a choice. That's going to be good for some new handset providers, application developers and end users, both consumer and business.
Bidden or unbidden, openness is coming.
Given the growing importance of product bundling, as well as wireless, it might make sense for Comcast to have its own wireless assets, it is argued. Comcast is a part owner of some wireless spectrum through SpectrumCo and also uses the "Pivot" offering developed by Sprint to offer a branded wireless service to cable customers.
Then there is the fourth-generation WiMAX asset Sprint could provide. But there are lots of arguments why Comcast can't, or shouldn't consider buying Sprint. Start with the WiMAX network, which obviously would operate outside Comcast's cable franchise territory. There is one big unstated "no no" among leading cable operators, and that is that one never competes with another cable operator. "I have mine, you have yours" has been the rule since the industry began in the late 1940s. Comcast would not likely want to be first to break the taboo.
Comcast shareholders also seem to be terrified that Comcast might embark on just such an expensive acquistion. The last time Comcast tried, attempting to buy Disney, the stock was pounded. Any Sprint acquisition would likely have the same effect this time, and Comcast's stock price already is beaten way down.
Comcast also says it continually monitors what is happening in the wireless industry, and one could make the observation that as crucial as wireless has been as a revenue growth engine, slowing has to occur as the market reaches complete saturation in just a few years. Nor is it clear that cable customers see wireless as a "natural" part of a bundle. That's arguably not the case for buyers of "phone service," who may well see a wireless-broadband-voice bundle as "natural" and "logical."
Google, on the other hand, might also be seen as a logical consolidator. It clearly wants mass in the wireless market, and control of Sprint's customer base would be helpful. The price tag is really low. The 4G network makes much more sense for Google than it does for Comcast, and the cost of the spectrum is already baked into Sprint's share price.
On the other hand, Google wants to work with all the major wireless carriers, and becoming a competitor doesn't help. Nor will Google want to mess with operation of three networks or Sprint's marketing challenges. Still, to the extent that ownership of a national broadband wireless network might be helpful, and if the eventual owner of the 700 MHz C block spectrum is a company like at&t or Verizon, who might drag their feet putting that spectrum into service, Google and other supporters of a mobile Web approach untethered from legacy considerations about voice might want a chance to move ahead with WiMAX using a new business model.
Perhaps Google could even work out a pre-planned buy of all of Sprint, and then immediately spin off the non-WiMAX assets, to avoid becoming a competitor to at&t and Verizon. Other scenarios obviously will make sense to people if Sprint's share price doesn't climb soon.
It's going to be easier to read and respond to text, attachments and image-formatted documents on Research in Motion BlackBerries sometime later this year. RIM says it will upgrade its software so users can edit documents directly from the device and to view messages in their original formatting. That sort of functionality is obvious on Windows Mobile devices, so RIM has to keep pace. Apple's growing presence and market share also might be an issue, as the "easy to use, the whole Web" philosophy has got to be changing user expectations about what they ought to be able to do, and how, on their smart phones.
In the third quarter of 2007, Apple captured 20 percent of all U.S. smart phone shipments, Gartner Inc. says. RIM got 39 percent.
Monday, January 21, 2008
Enterprise iPhone users now have a specific set of plans and a financial inducement to sign up for a minimum two-year enterprise iPhone plan. The inducement is a $25 a month discount through December 2008 for new accounts. Users can sign up for the typical voice plans, and then pay a new enterprise data fee. At least that appears to be the case. The Web site isn't crystal clear about the matter.
The enterprise data plans include visual voice mail, unlimited data with both email and Web inside the United States, plus a bucket of text messages.Data plans range from $45 to $65 a month. For users requiring data access outside the United States, at&t also offers data global roaming plans costing $24.99 a month with 20 megabytes of global data access, and a $59.99 a month plan offering 50 Mbytes of data access in 29 countries outside the United States.
It will be interesting to see how user perception of the value of a smart phone changes over time. Up to this point, the Web browser, though seen as useful, as been of the "nice to have" rather than "must have" feature, as this survey data from InfoTech suggests. So far, though, Web browser use and mobile searches by iPhone users have been significantly higher than is the case for a typical smart phone user.
As the developing trend of use of Web-enabled enterprise software continues to grow, the browser obviously will assume new importance.
AIS Chief Marketing Officer Sanchai Thiewprasertkul says " up to 60,000 iPhones have been smuggled into Thailand so far," according to TeleGeography.
China Telecom, the nation's largest fixed line company, reported a decline of 2.7 million local access lines in 2007, as a result of great competition from wireless carriers. The number of fixed line subscriptions fell by 1.48 million in December, its fifth consecutive monthly loss, to takes China Telecom’s total to 220.3 million.
China Mobile added 68.1 million users in 2007 to take its total to 369.3 million, while Unicom added 18 million subscribers to reach 160.3 million subs.
Fixed line substitution isn't just a problem occurring in North America and Europe, apparently.
Sunday, January 20, 2008
That sort of information is going to be really important as software designers at Google and elsewhere try to unravel the secrets of mobile search. So far, everybody seems to think there are contextual factors to mobile search that make it different from desktop PC search. In other words, people probably are going to be asking different questions and trying to do different things when initiating a mobile Web search. Directions have to be right at the top.
My own usage tends to be "what's the address of the place I am going to" and "where can I find the closest book store." Another favorite: "where can I find good Thai food close to where I am?"
Everything beyond that remains to be discovered.
Kite Networks, owned by Texas-based Gobility, provides wireless broadband service in Longmont and to approximately 17,000 customers across 21 markets.That works out to about 809 customers per market. So it is probably no surprise that Gobility is finding the business a really tough proposition.
Longmont’s city council is taking a look at whether the city itself could buy and run the network. But Longmont has Digital Subscriber Line service available from Qwest starting at about $20 a month and Comcast offers cable modem service for about $40 as a stand-alone service. There are no particular signal coverage limitations that prevent use of wireless broadband from the major national suppliers and perhaps a dozen third party ISPs offer DSL service as well. It just isn't clear that a municipal Wi-Fi network is needed or that paying customers exist in sufficient numbers to sustain a business, even if operated by the city.
A vote of Longmont residents would be required before Longmont could consider a bid.
For many observers anticipating the soon-to-begin auction of valuable 700-MHz wireless spectrum in the U.S. market, there is some combination of great hope and fear that it will all be business as usual and that nothing much will change.
The great hope scenario calls for some new entrant to win the C block and create a national, open, Internet style broadband wireless network. The great fear is that at&t or Verizon will be the big winner, stifling innovation once again.
For mobile industry service providers, you can reverse the hope and fear positions. Incumbents hope at&t or Verizon will win, precisely to prevent the emergence of an open national broadband mobile network. They fear an outsider could snatch the spectrum away and actually do that.
In the end, he outcome will not be so wildly good for innovation, but not stultifying either, even if an at&t or Verizon wins the spectrum. Change is coming simply because the mobile Web is coming, and no contestant can stop that. Innovation will continue to flourish on the Web side of the business, no matter what is done on the walled garden sides of the business.
Consider the mobile music business. We are far from knowing how the use cases and business models play out. But we already can point to some facts. Walled garden services featuring downloads or rental have been seen as the logical evolution, and that certainly is where early efforts have focused.
Over time, users might do other things. They might sideload their music, then share with their friends using Bluetooth, Wi-Fi, 3G or 4G. You might say this is a laborious process, and you would be right, if all we have is today's tools. That will change. Somebody will author an elegant program for syncing sideloaded music with other handsets. It might not be iTunes that drives this, since iTunes is quite sharing-unfriendly by design.
But somebody will do so. And then the business might shift as it grows. Online downloads and sideloading will increase. But then sharing will kick in. Then it might turn out that walled garden download services aren't as big a deal as we once thought, but open download services are. Maybe the sharing software is simple enough that users can see each others' playlists and trade songs, one for one.
Maybe there's even some monetization scheme possible where songs are traded or shared. Most people don't seem to mind paying a fair price to get a song they like. Maybe they won't mind paying some amount to share songs with friends or even bystanders.
The point is that walled gardens might be the logical way a service provider approaches building a new business. That doesn't mean other ways are precluded, especially when the mobile Web really gets to be popular.
In a sense, the very existence of the mobile Web ensures that innovation will happen. Some might argue a better way to approach things is structural separation, where transport and access are separated from the retail side of the business. Others will argue that it is more feasible simply to "functionally" or "operationally" separate wholesale transport and access from retail operations.
Even in the absence of those mechanisms, the mobile Web is going to allow innovators to do things "without asking permission" of the retail wireless operators. The Federal Communications Commission's rules on open network attachment for the C block will help ensure that regime, as the operator of the C block network will not be able to block the use of "open" or "third party" devices.
The likely outcome of the C block auction is that either at&t or Verizon wins it. Whichever contestant does not win the C block will pick up A and B block spectrum where it is needed to reinforce existing operations or extend the current service footprint.
Verizon and at&t simply have the business motivation to win the auction. Sprint won't be bidding and T-Mobile arguably can't afford to bid. Still, it won't halt innovation, though we won't see as much change as if an outsider with no vested interest in today's revenue models were to win the auction.
But the mobile networks are going open in some significant ways, even if the basic business model doesn't change as fast. But T-Mobile already offers a "data-only" service plan, with no need to buy voice to get the data. In principle, it should be possible for this to happen on a much-wider scale, and then users can draw their services entirely from the mobile Web, rather than using walled garden services.
The auctions probably won't be as good as some hope, but certainly not as bad as feared. And that might be case no matter which viewpoint one has. Those who want change will see measurable "goodness." Those who have reason to fear the coming changes will have time and resources to adjust and embrace the change.
When all is said and done, the auctions will neither be a disaster nor a revolution. Neither will they honestly be anything other than another important step towards more openness and choice, however. It's coming.
Saturday, January 19, 2008
In some states (Connecticut, Florida, Massachusetts, New Jersey, New York and Rhode Island) small- and medium-sized business customers can subscribe to 20M/20M service with a dynamic IP address for $99.99 per month; or with a static IP address, the 20M/20M service is $139.99 per month -- both with a two-year term agreement.
The fastest speed available in these states is now 50M/20M for $199.99 per month with a dynamic IP address, or $239.99 per month with a static IP address -- both with a two-year term agreement.
In other states (California, Delaware, Indiana, Maryland, Maine, New Hampshire, Oregon, Pennsylvania, South Carolina, Texas, Virginia and
Washington) small- and medium-sized business customers can subscribe to 15M/15M service with a dynamic IP address for $99.99 per month, or with a
static IP address, the 15M/15M service is $139.99 per month both with a two-year term agreement.
The fastest speed available -- 35M/5M with a dynamic IP address -- has been increased to 30M/15M for $199.99 per month, or $239.99 per month with a static IP address both with a two-year term agreement.
The plans are also available with 12-month agreements at higher prices.Along with the introduction of FiOS Internet service at symmetrical speeds of 20 Mbps or 15 Mbps, the company has also increased the speed on its fastest business Internet plans and lowered prices by as much as 35 percent.
Verizon FiOS Internet Service for Business allows business owners to choose either a dynamic Internet protocol (IP) address or a static IP address.
FiOS Internet service for small businesses is available as part of a bundle including local and long-distance calling services from Verizon, or as
a stand-alone Internet access service.
Entertainment is all about the "content" or "stuff" anybody wants to watch, listen to or interact with. For communications, you and I supply our own content, so all we need are compliant networks and devices. Other humans or in some cases machines are the "content."
Everything else about the value chain--discovery, delivery, navigation, display, audio, format, business model, pricing and packaging--is subsidiary to the availability of content one wants to view, hear or interact with. Unlike the communications business, then, it is not possible to "disrupt" or "disintermediate" any parts of the value chain without the willing cooperation of the entities that own the content people want to access.
That's really different from communications, where people can build whole networks to disintermediate or disrupt the dominant providers. You might need permission for rights of way, or a license, or an operating permit. But you don't need the permission of the dominant provider to do so.
And that is what makes video a harder business to "disrupt," even if all one wished to do is create a new distribution channel. Content owners are well aware of how they make most of their money and even how they make that last incremental five percent of their money.
So they are not going to give you access to the best content before they have wrung the expected profit out of that content using the current distribution methods. Of course, that doesn't apply to user-generated content, but the point is that most people still watch commercial video most of the time, despite UGC growth.
That makes it tough for any new distribution platform, much less any new contestant using a new platform, to get access to the "really good and highly-viewed stuff" until it is proven that the new distribution method produces more revenue for copyright holders than the older methods.
The other problem is that "when" a provider gets access is as important as "what" a distributor gets access to. This is a sheer matter of exposure. By the time a popular movie or TV show gets to online or on-demand distribution, people have had a chance to watch in movie theaters, in hotels, on airplanes, on DVDs, on premium cable channels or cable or satellite TV. Not to mention illegal viewing along the way, as well.
By definition, people have had lots of chances to see something before it is made available to emerging distribution channels such as online and streaming services. All of that limits the actual market for online or streaming delivery of content.
In principal, downloads can replace DVD rentals and sales, but only once those older formats generate less than, or equivalent amounts of money as online sales do. And that is going to take some time.
So we shouldn't be too surprised that early forays into online or streaming services face a tough, uphill battle.
Any distributor needs access to the popular content, soon enough to capture some volume, on devices with high penetration of users, in a very easy and convenient way, at prices that make sense to people.
Google has stumbled, Joost might not be doing much, Wal-Mart has folded and even Apple has had to reposition and relaunch its Apple TV service from a "buy" to "rent" model.
Video won't be as easy to disrupt as voice or data.
Friday, January 18, 2008
After Vonage was found to infringe patents Verizon, Sprint, Nortel and at&t, many of us have wondered whether lots of other service providers might be found to infringe the same patents. Many independent VoIP providers and even some technology suppliers apparently have wondered the same thing, even if they won't say so in public.
Apparently we might find out relatively soon. The wider implications are pretty clear: it is not clear what Cox might be doing that any other cable company affiliated with Cable Television Laboratories is not doing. So the damage conceivably would not be limited to independent providers of VoIP services but possibly every leading cable company operating in the U.S. market.
And since Cox does not create its own technology but buys it from the same suppliers thouse other cable operators are using, one has to wonder whether there might not be exposure even on the supplier side of the business, though it is extremely unlikely Verizon or other telcos would bother their own suppliers.
Granted, any damage would be annoying, not a grave danger to any leading U.S. cable company. It isn't so clear what the damage might be at a smaller cable company, though arguably the potential size of the infringing revenues wouldn't be that great, so the penalties would be commensurate.
Atlanta-based Cox, the third-largest U.S. cable TV company, should be ordered to pay cash compensation for using the inventions, Verizon says in a complaint filed in federal court in Norfolk, Va.
Vonage's troubles, it appears, might not be confined there alone.
Perhaps nobody outside Google really knows how serious the search giant will be in the auction for C block spectrum in the 700 MHz range. There remains some thinking that Google's primary objectives--getting more openness in wireless networks--are well on the way to being satisfied.
Using that line of thinking, Google will submit the minimum required bid, but nothing more, essentially "bidding to lose."
But one never knows. Given the current economic climate, and the failure of any takers for a smaller segment of spectrum that carried a requirement for public service services, the final auction price might not be as high as some had forecast just a year ago. If it appears prices might be low enough, even Google might decide it is worthwhile to play a while longer.
The 700 MHz spectrum is attractive for any number of reasons. It is the last chunk of spectrum likely to be made available for mobile use. And it's nice spectrum, with greater range than the 2.5 GHz spectrum used for much of today's mobile service. The signals also have greater ability to penetrate walls and buildings, a big advantage, as anybody who uses a mobile phone inside a building can attest.
Those signal propagation characteristics also might mean lower costs to construct the network. True, it can be argued that Google doesn't need to own that, or any other spectrum, to accomplish its mobile Web and mobile advertising objectives. But you never know. The auction might not require as much capital as many had thought just a short while ago. An opportunistic buy always is possible.
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