Wednesday, November 30, 2011

Tablets are Not PCs, Google Finds

One of Google’s studies of tablet use over a two-week period, which had users recording every occasion that they used their tablet, shows that tablets really are not PCs, any more than smart phones are used in the same way that PCs are used.

Most consumers use their tablets for fun, entertainment and relaxation while they use their desktop computer or laptop for work, Google User Experience Researchers Jenny Gove and John Webb say. About 91 percent of the time that people spend on their tablet devices is for personal rather than work related activities.

And, as it turns out, when a consumer gets a tablet,  they quickly migrate many of their entertainment activities from laptops and smart phones to this new device.

The most frequent tablet activities are checking email, playing games and social networking. The study also found that people are doing more activities in shorter bursts on weekdays (social networking, email) while engaging in longer usage sessions on weekends (watching videos/TV/movies).

Tablets are multi-tasking devices with at least 42 percent of activities occurring while doing another task or engaging with another entertainment medium.

Also, tablets are more accurately described as “untethered” devices than “mobile” devices, to the extent that tablets primarily are used at home. Unlike smart phones that go everywhere and laptops that travel between work and home, few consumers take their tablets with them when they leave the house.

However, consumers do take their tablets on vacation or work trips where they use them as a laptop replacement and a small number take them on their commute. The  research also found that tablets are for the most part a one-person device, although there are consumers who share their tablet with other family or household members.

Tablets are used on the couch, from the bed and in the kitchen.

The activities and locations shown in the above chart were self-reported by respondents.

For many people, websites and apps designed for smart phones just don’t cut it on tablets. Instead consumers are taking advantage of the bigger screen and prefer using fully featured apps and the full desktop sites on their tablet. Users also seem to do things on tablets that are exclusive to the tablets.

That could indicate that people shift app use to the tablet from their smart phones and PCs, or only undertake use of some apps on the tablet, when they might do so on a PC or smart phone.

Google on tablet use

Enterprises Going Mobile Faster than Expected

Global enterprises are shifting to mobile-only communications more rapidly than expected, a new study sponsored by BroadSoft suggests. Notably, 25 percent  of enterprise IT decision makers believe desk phones will be replaced by mobile phones within two years, while 82 percent of enterprises have employees currently using mobile applications for communications and collaboration. Enterprises embrace mobile

The survey, conducted by Cohen Research Group, gathered insight from 200 U.S. and 200 UK IT decision makers (CXOs, VPs, Directors) at enterprises of all sizes.

Some 44 percent of enterprises surveyed have at least a quarter of their workforce operating solely using a mobile phone. Some 30 percent of enterprises support tablets as well.  You might think the trend would be more pronounced at smaller enterprises, but the survey suggests the mobile substitution trend is most pronounced in the mid-market and enterprise segments of the market. This tends to be most true for organizations with six or more locations.
Fully 62 percent of respondents are expanding their enterprise’s unified communications capabilities, while instant messaging, web collaboration and videoconferencing were identified as the top UC services they are looking to support on mobile devices over the next three years.

Also, some 72 percent of U.S. respondents are looking to deploy videoconferencing across their organization in the next year, compared to 56 percent in the United Kingdom.

Many respondents believe their mobile network operator is better positioned to deliver single voicemail, instant messaging, video calling, unified messaging, voicemail and email integration, extension dialing and video conferencing than fixed line providers, Microsoft, Google or IBM.

When asked who could best deliver a complete, integrated set of unified communications services, “my mobile service provider”, Microsoft and Google were top choices among respondents.

Separately, PwC sees enterprise mobility growth as well, in part because the nature of work at enterprises is changing. As exemplified by the tablet boom in the consumer market, so enterprise work now includes content consumption, in addition to content creation. Smart phones and tablets are the key devices in that regard.

In many ways, the BroadSoft data should not be surprising, as it simply tends to mirror similar changes in consumer markets, where mobile data is driving service provider revenue growth.

Mobile data will be the largest contributor to U.S. telecom service provider growth over the next five years, says Pyramid Research.

Voice services are expected to dwindle, on both the fixed and mobile networks, but remain significant. There is a shift from circuit-switched voice to IP telephony, but revenues are not keeping pace. Since at least 2007, mobile voice revenues have been of greater magnitude than fixed-line voice, as well.
The U.S. telecom market generated $367 billion in service revenue in 2010, an increase of 3.1 percent over 2009.

"We expect the market to grow at a 3.1 percent compound annual growth rate over 2011 to 2016, reaching $443 billion in 2016. U.S. telecom revenue forecast

While it was the fourth-largest service segment in 2010 (after mobile voice, fixed voice and pay-TV), Pyramid Research projects mobile broadband will have a 12.7 percent CAGR over the 2011 to 2016 period.

That means that mobile broadband services will overtake mobile voice, fixed voice and entertainment video  to become the single largest revenue stream in the U.S. telecom industry by 2016.

As demand for fixed circuit-switched voice decreases, fixed VoIP will increase, growing at a 12.2 percent CAGR from 2011 to 2016. But VoIP still will be the smallest of all revenue streams over the forecast period. There might continue to be some small dial-up Internet access revenue, but it will be negligible.

Small Business Social Media Channels

Effective Social Media Marketing Tools According to US Small Businesses, Oct 2011 (% of respondents)U.S. small businesses think Facebook is a useful and effective marketing tool, according to Constant Contact. About 83 percent of respondents say Facebook is "very" effective or "moderately" effective as a marketing tool. 

About 47 percent think Twitter is similarly useful. 

Will Brands Be Successful on Google

Monday, November 28, 2011

Australia National Broadband Network Faces Cost Overruns, Demand Issues

Capital investment for the National Broadband Network will top $50 billion, while slower-than-expected development of digital video content could put at risk the financial returns for the ultra-fast network, a confidential report states. 

The Australian government has been told by its own corporate advisers, Greenhill Caliburn, that costs will be dramatically higher than the $35.9 billion in capital costs the government has been claiming. 

Take rates also have been lower than many had expected. So far, 11 percent to 16 percent buy rates have been seen. Keep in mind that those buy rates reflect sales by all retail providers in each market, not the share held by any single contestant.  Costs too high?
The Joint Committee on the National Broadband Network has warned that NBN Co may be showing early signs of cost-blowouts and delays, with timeframe slippage and higher than expected operating expenditure recorded during the last six months. Retail pricing an issue?

In the committee's latest report (PDF), chair and independent MP, Robert Oakeshott, said that compared to the NBN Co Corporate Plan, a lower than expected capital expenditure and higher than expected operating expenditure result had been observed.

"This could be an early warning that it is costing more to do less, when compared to the expected results in the NBN Co Corporate Plan, even though the committee has at this stage accepted the argument from NBN Co that other reasons are behind this," the report reads.

Google’s Six Minute History Of Search

Here's a six-minute video clip that describing Google's history as a search company, from its earliest days of Larry Page and Sergey Brin’s PageRank algorithm to its more recent feature launches, like Google Instant. 

The video features interviews from key members who have worked on Google Search, including Google Fellows Ben Gomes and Amit Singhal, and Google VP Marissa Mayer, who led Search for a decade before taking the helm of Google’s local products. Google’s Six Minute Recap Of The History Of Search

Rogers exploring potential of LTE

Rogers CEO Nadir Mohamed says Long Term Evolution will allow Rogers to create over-the-top entertainment video services that resemble Netflix more than traditional cable TV, and be available both on mobile devices such as smart phones and tablets, as well as TVs equipped with Internet access, or Internet-connected game consoles.

The remarks appear to refer to ways video entertainment can become a revenue stream for Rogers in areas where it does not provide fixed network cable TV services, for example.

Rogers, which provides cable television services in New Brunswick, Newfoundland and Ontario, says it won't provide cable TV services it offers to those customers, to connected tablets and televisions outside those areas.

At least in part, that would be necessary since content owners do not seem likely to allow such uses of their licensed video content. Rogers exploring potential of LTE

The Diffusion Group (TDG) predicts that by 2020 the consumption of Internet video — content stored and distributed over an IP architecture — will eclipse the consumption of broadcast TV programming.Internet video forecast

With the caveat that consumption does not equal "revenue," the growing amount of online and mobile video consumption is creating the environment where providers will have growing opportunities to test new types of services and revenue models. But content owners will have to agree.

Cord Avoiders the Big Issue Now

About 200,000 fewer subscribers will buy entertainment video services in 2012, analysts at Credit Suisse predict. In large part, the modest contraction can be blamed on weak formation of new households and a growing number of new households that are avoiding subscription TV subscriptions altogether. More than "cord cutting," the abandonment of video services by customers that used to buy such services, the new weakness is among people who would otherwise have been starting their own households or becoming potential consumers for the first time.

The Credit Suisse analysts emphasized that they remain optimistic on cable and satellite sector businesses, but see the developing new problem as "cord-avoiders," households that are relying on video alternatives in an arguably new way. 

Many new households are not signing up for cable or satellite, the analysts said. While there were 1.8 million households formed, according to U.S. Census estimates cited by the report, only 16.9 percent of them signed up for video entertainment services.

 Analyst Stefan Anninger says he now expects the multi-channel video universe to contract by around 200,000 subscribers in 2012 instead of the gain of 250,000 that he had previously forecast. "We do not expect the pay TV universe subscribers 'to fall off a cliff' over the next year or two," he said. Base business okay But there is trouble brewing.

For the 12 months ending Sept. 30, 2011, total pay TV industry subs have remained unchanged at 100.8 million, according to Anninger. "Over the same period, however, occupied households have grown by 1.25 million," he said. "In turn, pay TV penetration has fallen from 84.1 percent in the third quarter of 2010 to 83.2 percent."

Could Deutsche Telekom Buy Sprint-Nextel?

Though virtually all the acquisition and merger talk involving T-Mobile USA has involved some other entity buying the Deutsche Telekom unit, at least one observer speculates about whether T-Mobile USA could be a big acquirer.

The notion is that Deutsche Telekom could buy Sprint Nextel, for roughly one times that firm's annual revenue. Sprint’s market cap is $7.2 billion. Its long-term debt is $16.3 billion against a cash position of only $3.7 billion. The total cost of an acquisition would be $30 billion if shareholders got some premium. That is nearly as much as Sprint’s annual revenue of $32 billion. Will Deutsche Telekom Buy Sprint-Nextel (S)? - 24/7 Wall St. Could DT Buy Sprint?

The $4 billion break-up fee if AT&T cannot get regulatory approval to buy T-Mobile USA would help. Some will question how much help that amount could provide. DT faces significant investment challenges related to the coming Long Term Evolution network that must be funded.

Some will challenge the notion that DT can afford to spend scarce capital in the U.S. market when it faces key challenges in its arguably more important European markets. Others will simply say merging a number three and number four in the market will help, but not enough to justify the investment. Will Deutsche Telekom Buy Sprint-Nextel

But there also is an expectation that further consolidation of mobile and other telecom assets around the world is on the agenda, one way or the other. Mergers inevitable?

Top 10 Cloud Predictions for 2012

The cloud computing market will face some bumps as it continues to grow, says Forrester Research analyst James Staten. In part, that is because greater reliance on cloud services will raise the risk of exposure to outages, for example.

But one of the subsidiary challenges for some parts of the enterprise and business computing ecosystem. In particular, cloud services might pose a direct challenge to channel partners who typically serve the smaller and mid-sized business segments. 

"The channel will face the music," says Staten. "Reselling isn’t good enough anymore."

"For years I and my analyst brethren have been telling the value-added reseller market that they need to move away from revenue dependence on the resell of goods and services," Staten says. "Many have listened and now garner more revenue from consulting and unique intellectual property.
Here's the fundamental problem, he argues: "the cloud doesn’t need you."

Cloud services are a direct-sell business and standardized, Internet-resident services don’t need local relationships to reach their customers. 

There’s nothing to install, customization is minimal and margins are thin and volume-based. 

For the channel to survive it must add value around cloud services. While cloud services are standardized, how each company uses them is not and that’s where all the opportunity lies. Top 10 Cloud Predictions for 2012

67% of Indian E-Commerce is Mobile

About 67 percent of e-commerce in India happens in mobile and consumer appliances, says Rajan Anandan, managing director of Google India. 

Smartphone adoption is growing in the country at a rate of 56 percent year-over-year, with 21 million smartphones sold in India in 2011 so far. He said that the sector was expected to reach sales of 100 million units per year by 2015, a 476 percent growth in a span of four years. Mobile search queries highest from India at Google

AT&T Revising T-Mobile USA Bid?

AT&T is revising its proposal to buy T-Mobile USA, emphasizing asset sales that could reach 40 percent of T-Mobile USA assets. Presumably the plan would build on AT&T’s argument that the deal should be considered market by market, and involve asset divestitures in some local markets.

That might bolster the argument that some more regional players, such as MetroPCS Wireless and Leap Wireless, could become more-national challengers with the new assets.  AT&T proposes T-Mobile USA sales

The issue, some would note, is that the local divestiture has been a staple of mobile acquisitions in the recent past, and none of that activity appears to have slackened the growing concentration at the top of of the mobile market, as much competition might be argued to exist more broadly within the mobile market, or in the broader communications market.

In city after city, and in the country as a whole, Federal Communications Commission data show the wireless market has grown more highly concentrated.. Possible divestitures

To measure market concentration, the Department of Justice uses a formula known as the Herfindahl-Hirschman Index. It considers markets to be highly concentrated when the index tops 2500. The score for the U.S. wireless industry as a whole at last measurement, in June 2010, was 2848, up from 2151 in 2003.

Some cities score much higher, including Oklahoma City at 3100; Springfield, Mo., at 3662; and Lafayette, La., at 4703.

The Justice Department says if AT&T were allowed to buy T-Mobile, the index would rise to more than 3100 nationally, including significant increases in 91 of 97 major markets.

The Federal Communications Commission also appears to believe the market is too concentrated. Ironically, then, the FCC’s 15th “Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile Services”  makes no formal finding as to whether there is, or is not, effective competition in the industry.”

That report contains  no stated conclusion on the U.S. wireless market, in terms of effective competition, a surprise to some observers, who had predicted that the FCC report would declare the U.S. market “not competitive” in some substantial respects. FCC report doesn't mention "market concentration"

On the other hand, one standard test of industry concentration shows a "high degree of concentration." But many observers would simply ask what other state of affairs could possibly be the case.

The report does use the “Herfindahl-Hirschman Index,” (HHI), which is calculated by summing the squared market shares of all firms in any given market, and is a commonly used measure of industry concentration.

Antitrust authorities in the United States generally classify markets into three types: Unconcentrated (HHI < 1500), Moderately Concentrated (1500 < HHI < 2500), and Highly Concentrated (HHI > 2500).

In the mobile wireless services industry, the weighted average of HHIs (weighted by population across the 172 Economic Areas in the United States) was 2811 at the end of 2009, compared to 2842 at the end of 2008.

By that measure, the U.S. wireless market is “highly concentrated.” But observers will argue about what that means. Access services of any type are “highly concentrated” in almost every market, in the sense that there are typically two dominant wired providers.

Wireless markets typically have more providers than that, but even wireless is “highly concentrated.” Whether access markets, wireless or wireline, can be anything but highly concentrated seems to be the issue. There is a good reason why access markets traditionally have been “monopoly” markets. Until recently, it was thought impossible to have facilities-based competition in access markets.

In fact, in most markets globally, that will still generally be the case. Hence we see wholesale networks being built in several countries, the theory being that markets will not support more than one optical access network.

Mobile voice coverage would not strike most observers as being anything but competitive. The report states that 89.6 percent of consumers can buy service from five or more suppliers, for example. To be sure, the number of competitors is higher, across the board, in more-populated areas, as you would expect.

Wireless broadband coverage is relatively consistent with the voice findings, as 68 percent of U.S. consumers have a choice of four or more providers. The caveat is that the. competition is mostly confined to more-densely-populated areas, again as you would expect. Rural consumers clearly do not have as many choices.

Sunday, November 27, 2011

Telcos Will Lead, App Providers Will Gain, in Mobile Payments

The existence of mobile wallet services operated by Google, PayPal and Isis raises an obvious question: which contestants will “win” the battle to become the dominant or leading wallet services? In principle, one might argue that over-the-top application providers, mobile service providers, clearinghouse networks such as Visa or MasterCard, banks or other payment specialists could emerge as the leading providers of such services.

Researchers at ABI Research say it is the likes of Google and Apple that ultimately will lead the market, though mobile service providers are highly likely to claim the most share initially.

While mobile service providers will havethe majority of NFC-based mobile wallet users early on, their market share will erode between 2012 and 2016 as Google and Apple assume greater share.

“By the end of 2012, Google will prove that Google Wallet is a hit with consumers,” says Mark Beccue, ABI Research senior analyst. “By 2014, we will see Google Wallets supported alongside competing MNO offerings globally.”

Mobile service providers might have 75 percent mobile wallet share in 2012, shrinking to 63 percent in 2016.  Over the top providers will win wallet war

Google Wallet also will succeed in markets where mobile service providers prefer not to spend capital to develop and support mobile wallet infrastructure. In such cases, application providers such as Google, Apple and others will have an advantage.

Though Apple is not yet in the market, ABI Research believes Apple will enter the market. “Apple will launch a mobile wallet product in 2012,” Beccue argues.

ABI Research also predicts that near field communications will support 594 million users in 2016.

That is not to say banks, payment providers or merchants will fail to attempt their own offerings. Starbucks, for example, operates one of the most-successful mobile wallet and payment programs in 2011.

In most cases, such efforts will have suffered in the face of successful programs offered by the likes of Google, Apple and the mobile service providers, ABI Research believes. Who wins wallet war?

Apple has yet to launch a mobile payment service, though it is widely believed from patents and whispers in the corners of the industry that the company will equip its iPhones with payment-enabling NFC sensors and software in 2012.

As with Google and its carrier partners, AT&T and Verizon will allow Apple to offer its mobile wallet to consumers who have iPhones, regardless of whether or not the carrier has a competing mobile wallet, Beccue noted.

Still, most observers believe PayPal says 2016 will be the year when some industry executives believe U.K. shoppers will be able to use their mobile phones to shop, instead of using cash, checks or credit and debit cards.

PayPal’s conclusions are based on a Forrester Consulting survey of 10 senior executives from major U.K. retailers and other businesses.

Some 49 percent of mobile buyers surveyed by Forrester Consulting use their mobile phones to purchase products at least once every three months.

“By 2016, you’ll be able to leave your wallet at home and use your mobile as the 21st century digital wallet,” says Carl Scheible, Managing Director of PayPal UK.

“We’re not saying cash will disappear entirely, but we’ll increasingly use our phones and other devices rather than our wallets to pay in-store as well as online,” argues Scheible. 2016 key for U.K. mobile payments

Some might even argue  that mobile wallet functions will have more substantial impact on the retail shopping experience, however. “Payment” using a mobile device might be the least-important new reason people use new mobile commerce applications.

In fact, some might argue, consumers will be using mobile payment apps because the value of the mobile wallet offers clear value.

“PayPal’s vision is a one-stop shop for retailers to engage their customers directly during every part of the shopping lifecycle, generating demand from consumers through location-based offers, making payments accessible from any device, not just from the mobile phone, and offering more flexibility to customers even after they’ve checked out,” Scheible says.

“As well as paying for goods without having to queue, the report reveals shoppers can look forward to being able to carry digital loyalty cards, promotional offers and receipts on their phones – keeping everything in one place creating a virtual shopping hub,” PayPal says.

Saturday, November 26, 2011

What Next for T-Mobile USA?

AT&T easily will survive any failure of its bid to buy T-Mobile USA. T-Mobile USA, on the other hand, will continue to face strategic problems. A distant fourth in the U.S. mobile market, with no spectrum available to launch a fourth-generation network, T-Mobile USA either has to spend lots more money to try and catch up to AT&T and Verizon Wireless, or must exit the U.S. market. Few think its parent, Deutsche Telekom, has the appetite for investing.

That suggests T-Mobile USA will still be looking to sell, in the event of a failure of the AT&T bid to buy T-Mobile USA. One issue is the pool of potential buyers. But a significant strategic issue is the value of the asset in a mobile market where being "in the middle" is difficult.

AT&T and Verizon Wireless clearly lead the higher end of the market. Many other larger-regional providers lead the lower end of the market, especially the prepaid segment. That leaves firms such as Sprint and T-Mobile USA in an arguably exposed position, vulnerable to lower-cost providers on the lower end and pressure from the market leaders at the top. 

At a practical level, competing with the larger national contestants means heavy advertising and marketing costs. In some cases, the regional providers can be more targeted about such spending. And that's part of the rub. The providers of lower-cost prepaid services succeed in part by controlling their overhead costs, allowing them to offer lower prices. 

The contrast is perhaps not so stark as the positioning of a mass market retailer between Tiffany and Wal-Mart, or between Tiffany and, but it is the same general problem. 

T-Mobile USA has lost 850,000 contract customers in 2011. In the third quarter, sales fell 2.3 percent to $5.23 billion, though earnings rose 3.8 percent to $332 million. One wonders if earnings rose because T-Mobile USA essentially stopped investing as it would have, if it thought it was going to be an on-going business.

T-Mobile gained 826,000 prepaid customers in this year's first nine months of 2011. The problem is that profit margins for such customers are lower than margins for prepaid customers. Also, T-Mobile USA is the only service provide of the top four without the ability to sell the Apple iPhone. Deutsche Telekom's unsolved problem
Spectrum assets are another issue. T-Mobile USA’s CEO, Philipp Humm, made the point at a May 2011 hearing on the merger before the Senate Judiciary Committee. “As data usage continues to explode, spectrum is becoming a constraint to our business, with T-Mobile facing spectrum exhaust over the next couple of years in a number of significant markets,” Humm said. “Moreover, our spectrum holdings will not allow us to launch [Long Term Evolution]. ” No independent future?

Mobile Wallet: Consumers Are Hesitant, For Good Reason

A new survey by Compete suggests most consumers are not yet inclined to use mobile wallet services, despite apparent awareness of around two thirds of respondents. 

About two thirds of people who use debit cards and credit cards say they aren’t planning to start anytime soon. Just seven percent of banking consumers indicated that they would be very or extremely likely to start using their phone or tablet to make a bill payment. 

About five percent of banking consumers said they would be likely to start using their mobile device to make a deposit. Most also say they aren’t likely to start using their mobile device to make a point-of-sale purchase.

None of that should be surprising. Consumers need a clear value proposition, and it still isn't clear that has been established. Mobile Wallet: Consumers Are Hesitant Few wallet services have been able to fully develop the features they believe will clearly add significant value for consumers, and few retailers are able to support those features, either. 

Beyond that, few consumers actually are able to use near field communications, for example, since their current devices are not equipped to do so. 

Although current use and intended adoption rates for mobile services are low, once consumers adopt mobile financial or money services and start using their phone as a mobile wallet, they use the services frequently, the survey also shows. Some 16 percent of consumers using "Mobile tap and pay" do so daily and another 36 percent use it weekly. A full 87 percent of consumers using mobile couponing do so at least once a month.

There is one important element to keep in mind for any brand-new service such as mobile wallets, namely that it usually is quite impossible for end users to understand or to quantify their possible use of a product they have not yet experienced. 

Apple, for example, has not had a history of conducting market research about any of its new products, on the theory that consumers cannot really describe their possible use of a product they never have seen.

Friday, November 25, 2011

40% Drop in SMS revenue by 2015

EMEA Nov 2011 Event Report Slides v3 Messaging decline.pngIndustry executives surveyed by Telco 2.0 believe it is possible that over the top messaging services will displace about 40 percent of text messagin revenue by 2015, at least in Europe and the Middle East.

In part, that might be a function of generally higher costs in such markets. Costs for consumers in North America tend to be lower than in Europe, for example.

The main cause is competitive pressure from Facebook, Skype, Google and BBM. Mobile voice isn’t that far behind, with a 20 percent decline foreseen by surveyed executives. 40% drop in SMS revenue by 2015

Economic Eras are Rough During the Transition

Fundamental economic transitions always are times of social stress. The transition from agriculture to manufacturing was hugely disruptive. We might be in the midst of another great transformation from manufacturing to "information" as the basis of the economy. If history is any guide, the disruptions we are seeing are a byproduct.

The good news about information technology, according to Erik Brynjolfsson and Andrew McAfee, the authors of  Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy  is that it’s making America more innovative, productive and richer.

But the bad news, the two MIT professors add, is that this new wealth, innovation and productivity is being spread unequally, so that only a minority of Americans are reaping the benefits from it. The Internet Is Making Us Both Richer and More Unequal

Thursday, November 24, 2011

Ofcom Describes Net Neutrality Policies

A new position paper by U.K. regulator Ofcom on network neutrality relies heavily on competition to maintain an open Internet access business, while at the same time generally allowing Internet service providers to use network management tools so long as they are transparent about such practices.

At the same time, Ofcom says it will watch for any signs that “best effort” Internet access, which does not allow any packet prioritization, does not coexist with any managed services ISPs may offer.

In fact, the Ofcom rules are less restrictive than current U.S. rules, which do not allow any packet prioritization on fixed networks, at all. What Ofcom does seem to warn against is forms of management that have the business result of favoring an ISP's own services, over competing services offered by other contestants.

Mobile and fixed network operators can meet new demand for high-speed Internet access either by investing in new capacity and partially by rationing existing capacity, in part by using traffic management tools,  Ofcom says in a new position paper explaining its thinking on network neutrality policy.

“The question is not whether traffic management is acceptable in principle, but whether
particular approaches to traffic management cause concern,” Ofcom says. The U.K. communications regulator rightly notes that just two broad forms of Internet traffic management exist, either a “best effort” approach that simply randomly slows down under load, or some form of “managed” access that could include priorities for delay-sensitive or higher value traffic.

Ofcom generally argues that access providers can do quite a lot where it comes to traffic management, so long as they are transparent about it and communicate those practices to end users. There is an expectation that users will have access to all lawful applications, of course.

While recognizing that best-effort and managed services will coexist, Ofcom says it would consider intervening if the amount of “managed” bandwidth jeopardized the amount of “best effort” access Ofcom considers key to continued innovation.

Likewise, Ofcom says it would be concerned if any particular management technique was applied in a way that harmed competitors to ISP-owned services. Ofcom network neutrality statement

AT&T Giving Up on T-Mobile USA Bid?

On November 23, 2011, AT&T and Deutsche Telekom withdrew their applications to combine spectrum owned by both companies, something that would be required if AT&T were to succeed in acquiring T-Mobile USA.

AT&T also says it will take a pretax accounting charge of $4 billion ($3 billion cash and $1 billion book value of spectrum) in the 4th quarter of 2011 to reflect the potential break up fees due Deutsche Telekom in the event the transaction does not receive regulatory approval.

AT&T says it still is pursuing the deal, but the taking of the charge and withdrawal of applications indicate, at the very least, that AT&T thinks prospects are dimming, if not a definitive recognition that the bid will fail.  AT&T Throwing in Towel on T-Mobile USA?

Given the fact that the accounting charge will be taken in advance of the time the Department of Justice antitrust hearing would occur, some will speculate that AT&T plans to withdraw its bid to buy T-Mobile USA before the hearing. 

It is starting to look as though AT&T is preparing to abandon its acquisition attempt. 

Wednesday, November 23, 2011

50% Of E-commerce Site Visitors Are Logged In To Facebook

A new study shows 50 percent of visitors to e-commerce sites are currently logged in to Facebook. 50% Of Ecommerce Site Visitors Are Logged In To Facebook

"On average in October (2011), 50.8 percent of traffic was logged into Facebook while visiting our customers’ ecommerce sites.  Across all customers, this rate ranged from approximately 40 percent to 60 percent, SocialLabs says. Facebook visitors on e-commerce sites.

"While users on our clients’ sites are logged in to Facebook slightly less during the workday and slightly more during the evening, the percentage of logged in users is still very high during the workday," SocialLabs says. "For example, during the work week of October 17 to 21st, on average 51 percent of users on our e-commerce deployments were logged in to Facebook from 9AM to 7PM."

Using Facebook social plugins and Connect integrations, sites can leverage Facebook data to show visitors what friends bought or shared, what products relate to their Likes, and which friends they might want to invite. The study was conducted by Sociable Labs, which helps websites implement social functionality, and looked at 456 million visits to over a dozen ecommerce sites catering to different demographics.

The Downside of Multi-Purpose IP Networks

By now, virtually all observers agree that direct revenue generated by fixed networks will shift to supplying broadband access, while some o...