Carrier Fiber Plans Accelerating?

Ofcom, the U.K. communications regulator, hasn't come to terms with BT about ways to speed up fiber to customer investments in the U.K. market. Up to this point BT has objected to earlier proposals that would have applied relatively robust wholesale requirements to new optical access plant. Perhaps there is new hope for some compromise that reassures investors, speeds up fiber deployment and yet offers some hope of a return.

Around the world, fiber to customer deployments seem poised to accelerate, but both competitive providers such as Illiad in France and Verizon in the United States have been punished by the financial community for daring to proceed with such deployments, which are costly, no doubt. U.S. cable companies have the same problem. Every time there is a hint that capital spending plans might intensify, equity values get hit. Comcast appears to be under that cloud as well at the moment.

Irrespective of the competitive elements of such decisions--obviously the providers making the investments want to keep the rewards, if they can be had--these networks can only be built by private capital. And private capital keeps making clear concern about the payback, whether those investments are made by cable companies, incumbent telcos or competitive providers.

At this point it is a simple fact that the investment framework has to reassure the capital markets. Yes, competition is desirable. But that has to be balanced against capital markets that actually loathe competition. Let's hope Ofcom and BT can thread this needle.

at&t to Launch VoIP Bundled with fiber

By the end of the year, at&t U-verse customers will be able to buy voice services running over the fiber-to-neighborhood service, instead of running a separate circuit-switched voice network to customer locations. The move signals that at&t is completely comfortable with the ruggedness and dependability of its VoIP offering, and is moving towards IP-based voice that can be interwoven with other services at&t plans to offer.

The move also is an early harbinger of a time when VoIP widely will be used as a standard replacement for landline voice, much as cable companies now use VoIP to deliver "digital voice" services that are feature equivalent with plain old telephone service but use IP technology.

The new VoIP offerng also will not be based on the CallVantage platform, because CallVantage "doesn't scale," at&t executives say.

The new VoIP product will be available in markets where at&t delivers U-verse TV.
at&t says its upgraded network will reach about eight million homes by the end of this year. The company intends to pass 18 million homes by the end of 2008.

Apparently at&t plans to move slowly offering VoIP services that run over Digital Subscriber Line, though.

From at&t's standpoint, that makes sense. Having watched IP, flat rate plans, competition, mobility, family plans and other forces wipe out much of the profit in long distance, VoIP stands poised to attack voice-based local access revenues as well. at&t will move, when it has to. But it is hard to fault them for not wanting to hasten the revenue decline from that product line.

Nokia Navteq: a Service Provider?

Nokia is acquiring Navteq, a leading provider of digital map information for navigation systems and devices, Internet-based mapping applications, and government and business solutions. Navteq also owns Traffic.com, a Web service that provides traffic information and content to consumers. Navteq had 2006 revenues of $582 million and has approximately 3,000 employees located in 168 offices in 30 countries. Nokia is paying $8.1 billion.

By acquiring Navteq, Nokia will strengthen its location-based services and take a step away form being a device manufacturer and becoming an applications provider, at least in part. And why not? More and more of the value of any product are provided by the services wrapped around the device.

Nokia says it plans to use location capabilities to expand into areas such as entertainment and communities. In Japan, location services already are a fairly significantly used feature.

Time Warner Launches Business TV

Time Warner Cable Business Class has launched BusinessLink.tv, an IPTV service that delivers real-time, high-speed broadcast TV video service directly to the computers of its business customers in select New York and New Jersey markets.

The BusinessLink.tv service delivers high-quality news and information video programming to clients via cable modem across their enterprise LAN using IP multicast connectivity. It is, in other words, bandwidth efficient.

The television networks included in the BusinessLink.tv New York City offering are: NY1 News, CNN, CNN Headline News, CNN International, CNBC, CNBC World, Bloomberg TV, Fox News, Fox Business News, and The Weather Channel. This 10-channel IPTV delivery service requires a 4 Mbps core local area network bandwidth.

And you thought people were wasting time using Facebook! Just kidding. I do the same thing in sneakernet fashion, having one of the news channels up all day in the background while working. It is quite helpful. Of course, I'm in the news and analysis business, so it is simply another form of "scanning" the environment. I would not give it up.

Open Source or Proprietary? Even Split

When functionality is equivalent, IT security professionals have an almost equal preference for deploying open source software (53 percent) as commercial software (47 percent), according to a recent survey of 228 security professionals by Barracuda Networks.

In the survey, 80 percent of respondents cited pricing as the top reason for adopting open source software over commercial software, while 57 percent selected access to source code and 41 percent chose community code review as the primary reasons for open source preference.

On the other hand, the survey found that the top reason for deploying commercial software was vendor professional services, at 65 percent, while 47 percent of respondents named ease of adoption in their organization and 47 percent said automated updates were key.

Better bug fixes are one open source advantage. So is access to the source code. Proprietary software, on the other hand, benefits from the perception that it will be easier to deploy and support over time. We can argue about how long that will continue to be true. There isn't much doubt that open source also is becoming part of the larger fabric of software offered by suppliers who historically have offered proprietary solutions.

All of which suggests that open source simply has become another tool to use, when it works and when it fits.

BT Gets Jabber

Jabber, Inc. BT Group has selected the Jabber Extensible Communications Platform (Jabber XCP™) to provide instant messaging for BT's 21st Century Network (21CN) program. Jabber will license software to BT for consumer, government, and enterprise users worldwide. In addition, the engagement between BT and Jabber includes consulting and development services which will fully integrate the Jabber XCP platform into BT’s common capabilities network.

Integrating Jabber XCP will allow BT to extend messaging across applications and services, providing BT customers with a centralized view of message routing, one-to-one IM, group chat, offline messages, message history, file transfer, and interoperability with other messaging systems such as Yahoo!, MSN, Google, and AOL.

The 21CN program, BT Group’s ongoing network transformation project, will replace the United Kingdom’s incumbent Public Switched Telephone Network (PSTN) with an Internet Protocol (IP) system while facilitating additional services such as on-demand interactive television, mobile television, and mobile radio.

Skype Valued at $1.7 Billion

Skype is worth $1.7 billion, based on charges EBay has taken both for the Skype acquisition and payments to outgoing CEO Niklas Zennstrom, who has left EBay.

Since the second quarter, EBay CEO Meg Whitman has made clear its concern that Skype is not delivering financial results on the scale EBay had expected.

At the time of the acquisition, eBay and analysts trumpeted the move as a way to increase higher end auction sales by making it simple to connect buyers and sellers by voice. So far, it appears the synergies haven't materialized in any significant way.

Skype also has more competition these days from alternate providers offering calling from mobile handsets and standard analog telephones that provide a reasonable alternative for some applications.

PC-based calling remains the Skype mainstay, despite the availability of Skype-compliant phones, as probably had to be expected. There's nothing wrong with that. But the consumer electronics industry has proven the difficulty of getting mass adoption of specialized appliances of all sorts.

Then again, unified communications and messaging now have the attention in the business space, while video and audio get the attention in the consumer space. VoIP also is a victim of its own success. Now that it has become a mainstream product, it is, well, just a product.

Also, beyond obvious cost savings in the enterprise, small, medium business and consumer spaces, it might be hard to argue that VoIP has had the impact of text messaging, instant messaging, simultaneous ring, visual voice mail or "presence." True, some of those features are enabled by or enriched by VoIP, but the value is harder to convey in a marketing message, at least in the North American market.

We seem to have moved beyond the simple "cheap calling" stage and into a much more complex "new capability" stage in some sense. But that's a harder, more complex sell with a longer adoption cycle.

On the other hand, the market for IP-based replacement of voice lines is quite large, in comparison.

In its most recent quarter, Skype booked $90 million in revenue. Assume Skype does not worse than that for a whole year, generating $360 million in revenue. Attributing just $20 a month in revenue for U.S. digital voice accounts, and assuming just four million U.S. subs, the U.S. cable industry is earning $960 million a year selling VoIP services.

Even beleaguered Vonage, at its present pace, will book revenue of $784 million over a year.

Time Warner Fires Opening Salvo

Though Comcast won't start firing its guns until early 2008, the U.S. cable industry has begun its assault on small business customer accounts. Time Warner Cable has rolled out a phone service for small and medium-size businesses in Central Ohio.

Time Warner introduced its Business Class phone service in the Columbus area Sept. 21.

A Time Warner analysis estimated there is a $40 billion market for business phone service in the company's eight-state service area, $9 billion of which is made up of small and mid-size companies, according to Ted Stine, Time Warner VP.

Time Warner first is targeting its existing business customers in the region who already subscribe to the company's Internet and cable video services. Companies that sign up for phone service will then get a discount on all their services. Once it has saturated that segment, Time Warner obviously will start cold calling prospects who have not existing business relationship with the company.

The biggest share shift should occur in the small business segment (four and five access lines, especially), though most observers would define the segment as "four to eight lines."

Telcos and Web Communications: Who Wins?

Attention might not be the basis for every revenue model, but it clearly underpins most media businesses. It might underpin other businesses as well, including communications.

So note changes in how and where people in France are spending their "communications" time. Since 2000, attention and time spent have been shifting towards Web-based applications and pursuits, and away from telephone-based communications. To be more precise, 53 percent of "communications" or more might be said to originate in some Web related activity, not a classic "pick up the phone" activity.

Time isn't exactly money, so attention and usage do not translate immediately into revenue. But attention sooner or later will create the possibility of revenue. And if this sort of shift in how people communicate continues, revenue opportunities and potential inevitably will shift.

That doesn't mean revenue-generating endpoints such as mobile phones, other communicating devices or "access" services will stop proliferating. It simply is to point out that when so much communications activity originates in Web-based things, whether enterprise or consumer driven, something new will happen, revenue-wise. It has to.

SlingPlayer for Symbian Phones

The SlingPlayer for Symbian S60 phones is out of beta and now available for sale. The software allows a selection of Nokia phones to stream television from any Slingbox.

SlingPlayer works on U.S. models of the Nokia E65, N75, and N95. It works on in the Nokia E65, N73, and 6120 handsets elsewhere. It already is available for Windows Mobile devices.

The Symbian software will cost $30 in the U.S., C$35 in Canada, and £20 in the U.K. market. The fee might be waived for U.S. Nokia N95 buyers. A free 30-day trial version will be made available. The Symbian SlingPlayer joins versions already available for Windows Mobile and Palm OS products, as well as Windows and Mac computers.

Still missing from the list of supported devices is the BlackBerry, although that undoubtedly is in the works. Of course, one sort of questions why, in a rhetorical I sense. Obviously Sling would want access to the large installed base of BlackBerries.

The issue is that the BlackBerry really isn't a very good media player, though it excels for email, obviously. If it is me, I would use the Nokia N95, which is a killer media player. I wouldn't use the N95 as my email device, however.

The point is that we are getting to a time when mobile devices really have to be optimized for one or just a couple applications: no single device is the best at all functions. To my way of thinking N95 is an iPhone, even without the touchscreen interface. Neither device makes any sense to me as an email device.

I was kicking around ideas with Stan Little over at Glenayre recently and he is experimenting with the notion that a person's identity increasingly can be tied to a single device. And he's right about identity. Whether that identity can effectively be broadened to encompass all the really important parts of a user's "life" roles, preferences, moods and tastes is more debatable. Stan is more optimistic about that than I am at the moment.

My issue with the single device is not, I suppose, so much with the "identity" so much as with the ability of any single device to competently handle all the tasks. I just can't see the email/work function and the media player function being something a single device does at a "best of breed" level in both scores. And it isn't so clear that any device optimized for either email or media playing is going to work as the absolute best "phone." The BlackBerry is adequate as a phone. But it isn't great.

Maybe we need a more robust version of a Subscriber Information Module so we can port the identities to whichever device makes the most sense "at the moment."

Xohm: No Contract, No Subsidy, No Termination Fees, No Obligation

Sprint says Xohm WiMAX customers will not have to sign contracts and won't charge any termination of service fees either. Users will buy their own air interface cards without Sprint subsidizing the hardware. The whole message: "You don’t owe me anything, I don’t owe you anything."

Well, not quite. Users might just be offered subscription plans whose cost declines over time as the length of the relationship grows. Nice. Reward a customer for loyalty. Of course, Sprint also knows that customers with long tenure are the most profitable customers it has. So there is more margin to shave to keep those customers happy.

Xohm is expected to operate at aobut 2 Mbps to 4Mbps downstream and 1 Mbpt to 2 Mbps upstream. Pricing probably will be set about about $30 or $35 a month.

It is a small step, but one of many being taken throughout the wireless ecosystem to bring more user freedom.

Vonage Doesn't Have to Pay $58 Million, 5.5% of Revenue to Verizon: Appeals Court

At least, not yet. The U.S. Court of Appeals says the U.S. District Court has to take another look at one of the three Verizon patents Vonage is said to have violated, though it upheld two of the three decisions as originally made.

Further, the Court of Appeals vacated the entire award of $58 million in damages and the 5.5 percent royalty. The Court of Appeals sent the case to the U.S. District Court and directed that the court retry those aspects of the original case.

Vonage has work-arounds in place, and argues none of the patents should have been granted in the first place, though it seems unlikely to an untrained observer that Vonage can get the courts to agree.

Still, it is a partial victory. Perhaps the damage award and royalty payments will be lowered, ultimately. And, at this point, a partial victory is about the best news Vonage has had on the patent front this year.

Mobility, SaaS, Laszlo, Google, et al

As work and workers become more mobile, enterprises are starting to use more Web-delivered applications. As that starts to happen, Web-based desktops and productivity suites are going to make more sense. Enter Laszlo and the Laszlo Webtop, referred to as a Web 2.0 Desktop. Laszlo Webtop has developed bundled solutions for three target markets: service providers, enterprises and developers.

Laszlo Webtop for Service Providers comes bundled with Laszlo Mail and Contacts and supports customized Web portals. Laszlo Webtop for Enterprises comes bundled with Contacts and optional Laszlo Mail.

Meanwhile, the Laszlo Webtop SDK for Developers offering is a software development kit allowing developers build their own Webtop solutions compliant with the Webtop.

This just makes sense. If one is going to build a distributed applications architecture assuming broadband access, then assuming a Web-based desktop also makes sense.

Vonage Loses Sprint Lawsuit, Has to Pay $69.5 Million

A federal jury has ordered Vonage Holdings Corp. to pay $69.5 million in damages for infringing on six telecommunications patents owned by competitor Sprint Nextel Corp.

Vonage also will have to pay a 5 percent royalty on future revenues. If neither this decision nor Vonage's Verizon patent infringement decisions are overturned, 10.5 percent of Vonage's recurring revenue will have to be paid out in damages to Verizon and Sprint together.

The upfront damage awards are hefty enough. The recurring 10.5 percent of gross revenue that will be lost might be more significant.

Vonage says it would appeal the decision but would also begin developing technological workarounds that it said would skirt the disputed technology.

Earlier this year Vonage also was ordered to pay Verizon $58 million in damages plus 5.5 percent royalties on future revenues. That decision also is under appeal.

Between the distractions (getting the work-arounds into place; the cost of further appeals), vigorous competition from cable companies and the damage payments, I suppose one now has to wonder whether Vonage can pull out of a dangerous spiral.

Global Voice Traffic Keeps Growing

Despite all the new ways people can talk to each other, and all the other ways people can communicate using text, global voice traffic keeps growing at a steady rate, according to TeleGeography.