Major Reform of EU Telecom?

In a major revamp of its rules on wholesale access to optical loops, the European Commission executive branch has decided that, where competition is weak, incumbents must create separate “wholesale access” companies that sell services to all service providers.

Known as “structural separation,” the model resembles that current in the U.K. market, where BT and all other wireline providers buy access services from a wholesale OpenReach company.

The plan still must be ratified by member nations, and opposition is expected. National regulators are happy to be given more powers, but do not want the EU executive to be allowed to overrule their decisions and insist that they do not need an EU watchdog.

The European Commission says the new rules could be applied by the end of 2009, but observers expect EU states such as Germany, France and Spain to water them down.

If ratified, however, the decision essentially means competitors will have wholesale access to incumbent fiber-to-home facilities. The decision stands in stark contrast to rules in the U.S. market, where cable and telco providers are not required to lease such facilities to competitors.

Android Web Browser Renders Well

The Android Web browser seems to render Web pages nicely, based on these screenshots from Google Operating System.

Android Reminds me of Apple

Not since Steve Jobs over at Apple has a company apparently worked so hard on the look of fonts. But it appears Google has something of that same passion for user experience as it develops Android, its open source platform for mobile computing and communications devices. Here are the fonts users will be interacting with. Nice. Pleasing. But just as important, a sign that mobile user experience might now be really be an obsession at two companies.

Don't get me wrong. My BlackBerry is one of two devices I can't seem to dispense with, simply because it handles email so well. But it doesn't do voice very well, the key placement is occasionally awkward, and camera and media support is woeful.

The other, curently a Nokia N95, does photography, audio and video really well, has much more personality and uses a much better Web browser. RIM's browser is awful. Still, when I find I am reading the manuals, over and over, to learn how to use either device, which was my experience, something isn't being done as well as it might.

Syncing of data, calendar items and so forth is easy using either RIM's Intellisync or Nokia's PC Suite. And the picture-handling Nokia LifeBlog is interesting. The point is that software and navigation are getting to be more important now that mobiles are computers. Apple always gets this. Android might as well.

These fonts are nice. They also hopefully are a sign.

Watch T-Mobile

T-Mobile is going to be the first U.S. wireless provider to offer Android-powered phones next year. It is going to be first because it already has been working to develop such phones with Google and because it has powerful incentives to do something really dramatic to close the gap between itself and the other three major mobile providers. Put simply, it has got to take more chances and gamble more.

And oddly enough for the carrier with the least broadband capability (T-Mobile hasn't yet deployed its third generation network and the others have, T-Mobile might be launching a major push for Web-centric services. If the big opportunity not yet dominated by anybody else is the mobile Web, it's a major chance for T-Mobile to establish a new position for itself in the marketplace.

Once positioned at the "more minutes, less money" end of the spectrum, T-Mobile over the past several years has gotten more traction as a provider of "trendy" devices with an image to match. Pushing hard on the Android front is just another step in that direction.

T-Mobile also has been innovative on the services and packaging front. Its "myFaves" program allows unlimited calling to any other five numbers: not numbers supplied by T-Mobile--any other numbers.

T-Mobile also has been first to offer "HotSpot at Home," a dual-mode service allowing unlimited calling from the home Wi-Fi zone or any T-Mobile HotSpot. And though I continue to think the problem with dual-mode services is handset limitations, "HotSpot at Home" supports the BlackBerry Curve, one of the few devices I actually would consider using. So call T-Mobile remarkably prescient or lucky.

T-Mobile also worked closely with HTC, we are told, on the "Shadow," a "slide-out keypad" device with the "no keys" look that is becoming more popular.

The point is that T-Mobile is powerfully motivated to push the innovation envelope because it simply has to. That's going to be good for users. Watch T-Mobile.

Cable Industry to Get Clipped by FCC

In a move that will limit business opportunities for Comcast and Time Warner Cable and help independent networks, the Federal Communications Commission is preparing to impose significant new regulations to open the cable television market to independent networks, after determining that cable operators are too dominant in the multichannel video entertainment market.

Satellite and telco competitors should benefit at least in part, as the new rules are expected to force cable-affiliated programming networks to sell their content to competitors at better rates.

The new rules essentially would prevent Comcast from acquiring any other system assets, and limit Time Warner Cable's ability to make large acquisitions, shutting off a revenue growth path for both firms.

One of the proposals under consideration by the commission would force the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis. Up to this point cable-affiliated programmers have used the "bundled" wholesale tactic to get wider carriage for niche networks that piggyback on the popularity of major networks. In other words, to get the "must have" channels, competing service providers have to buy the weaker networks as well.

The agency is also preparing to adopt a rule that would make it easier for independent programmers to lease access to cable channels. Cable operators oppose that measure because it reduces their control over scarce channel slots.

Though consumer advocates believe the rule changes will lead to lower prices, that might not happen. What might happen is that consumers will be able to buy more targeted channels and packages without the "buy through" requirements that typically result in viewers "paying" for scores of channels they don't want.

In all likelihood, the changes will benefit a small number of viewers that really are interested in just a few channels, or who do not want to buy sports programs. For most viewers, who watch eight to 12 channels fairly regularly, it likely still will make sense to buy a broad package.

ESPN and sports programming in general is a major reason cable prices have risen so much over the past couple of decades, so opting out of ESPN carriage is one way consumers might save some money. Conversely, the rule changes could be damaging to ESPN if any significant number of consumers they can live without it.

Do Patents Retard Innovation?

Is the patent system broken? Supposedly a way to protect genuine intellectual property and spur innovation, patents these days seem most likely to wind up being used as a weapon of business warfare, and may actually retard innovation in many cases. Vonage and Research in Motion come to mind, as many observers think the patents Vonage is said to have infringed should not have been granted in the first place, and RIM had to pay what amounts to greenmail so its carrier and enterprise partners would not suddenly have to make all BlackBerry services "go dark."

In fact, it seems to be common these days to attempt to patent common business practices, obvious to anyone in the field. That leads to patent "trolls" buying up intellectual property and then suing companies as a business model.

Suing is a repugnant business model. And most patents seem trivial or--to a layman--overly broad. It is important to foster innovation and reward effort, and some innovations fit that bill. But isn't it obvious we ought to encourage people to work on really hard problems, and reward them, rather than encouraging lots of trivial stuff? Sure, it sometimes is hard to distinguish between an idea of significance and "prior art."

Now there's a big, socially useful problem that Google ought to be able to help with.

Whether it is the patent system or the way it gets used in business, something is out of whack. One might argue it is a necessary evil. Perhaps it isn't so necessary (at least the way currently practiced), though perhaps it often is evil.

Google Tailors Search

One of the best things about Web services is that user experiences can be personalized and customized . So it is that Google uses many signals to rank search results and in some cases filters returns based on a user's location, device or preferences.

You've probably noticed that hyphenation doesn't limit results. "T-Mobile" and "TMobile" results both come up. Helpful since hyphenation conventions vary from one document and user to the next. However, typing "+TMobile" only brings up results that do not have the hyphenation.

Google defaults to eliminating duplicate search results, which normally is desirable. There be some cases where a particular search might return multiple results from a single Web page, and a user might want those results. Typing "&filter=0" at the end of Google's URL will disable that function.

I find it useful that Google senses when I am searching from a mobile and formats the display accordingly. If, by mistake, you are searching from a PC and get the mobile version by accident (I can only say it can happen; it has never happened to me), use the "http://www.google.com/webhp" URL.

Personally, I prefer the localized version. But if you want the global version, go to
"http://www.google.com/ncr".

To get more targeted results, type "&gl" at the end of the Google URL.

Skype, Logitech Partner for Video Calling

In 1970, AT&T introduced "Picturephone" service in Pittsburgh. It flopped. In fact, the average person wouldn't normally think to turn to a telephone or cable company to buy or use video-enabled communications. Instead, one might think of WebEx, Cisco, Packet8 or Skype. And options on the mass market front just got better.

Skype and Logitech have partnered to create a High Quality Video experience using Skype 3.6 for Windows and Logitech QuickCam software, version 11.5.

The new capability provides VGA-quality video calls (640-by-480-pixels) at up to 30 frames per second over connections of 384 kbps connection or higher, when using a
High Quality Video-certified Logitech webcam and a PC with a dual-core processor.

Obviously, both end points need the set-up to ensure the best experience. This is a potential experience changer, as it should allow full-screen images with decent quality.

Skype 3.6 for Windows is expected to be available in early November in 28 languages. The Logitech QuickCam software version 11.5 is expected to be available at the same time.

The Logitech QuickCam Pro 9000 and Logitech QuickCam Pro for Notebooks webcams are now available for a suggested retail price of $99.99 in the U.S. and EUR 99.99 in Europe.

The Logitech QuickCam Orbit AF is available now in the U.S. market and Europe for $129.99 and EUR 129.99, respectively.

RIM Lawsuit is Silly

Most litigation in the U.S. business markets is crap. So put Research in Motion into the camp of crappers. RIM is suing to prevent LG from using the words "Black Label, Strawberry and Black Cherry" for its wireless phones, arguing that the "fruit" names are too similar to its own, and infringe on its trademarks.

I don't know. I just can't imagine anybody confusing a BlackBerry with any other device, no matter what the name.

LG isn't the only company to have faced a challenge from RIM over the BlackBerry name. Last December, RIM filed a suit in the same court against Samsung Electronics Co. Ltd. alleging that company's BlackJack wireless device was creating confusion between the two products. RIM and Samsung settled the suit.

The current dispute with LG appears to go back to March, 2006, when LG filed an application with the U.S. Patent and Trademark Office to use the Black Label brand.

Over the next 10 months, LG filed additional applications for the Chocolate Black Label Series, Black Jewel, Black Jewelry, Blackruby, Blackpearl, and Pearlring names, which were disputed by RIM, the complaint alleges.

Then in May, 2007, U.S. wireless carrier Verizon Wireless allegedly asked RIM for permission to use the names Black Cherry and Blueberry for the line of Chocolate wireless devices it carried from LG. RIM said no.

It's crap, really.

All Carriers Cave on Early Termination Fees

Users hate early termination fees that come with their mobile service contracts. Now, in part because of pressure from lawsuits filed challening the practice, all four major U.S. wireless carriers are softening the blow.

Verizon Wireless was the first to prorate early termiantion fees last year. at&t Wireless did so in October. T-Mobile and Sprint now also say they will start prorating their early termination fees in the first half of next year.

The fees aren't gone. But the amount will decrease the closer you get to contract end date. Sprint also says it will allow allow users to change plans without renewing the contract, something Verizon started doing in October.

All the moves are user friendly. Look for more signs of "friendliness" as use of unlocked phones starts to spread, open source Android phones start to make their appearance and, just maybe, a new carrier decides to push the envelope even more.

Clearwire Shares Drop 25% at Market Open

...as a result of the scuttling of its proposed agreement with Sprint to build a natinal WiMAX network reaching 100 million potential users. Investors reason that Clearwire now will need a new cash infusion, as it continues to lose money on its operations.

Sprint, Clearwire Deal Dead

In a surprise move, Sprint Nextel Corp. and Clearwire Corp. say they are scrapping their agreement to jointly build a nationwide high-speed wireless network based on WiMax technology, after failing to reach agreement on terms of the deal.

The move naturally will increase speculation about the fate of the Xohm WiMAX venture, given Sprint's desperate need to shore up its existing mobile phone business. Obviously, the asset is easier to sell or spin off if Clearwire isn't involved.

Is it not too early to predict that Google strategists now will be taking another look at spectrum options? At the same time, might not once more note that the complexity of running two separate networks, sets of devices and software are part of Sprint's problem?

Other carriers have dealt with such issues by collapsing all services and users onto a single technology platform. Clearly, most of the churn issues are caused by the Nextel base, heavy with small business users. The Nextel iDen network is a-now unusual platform that nobody anywhere else supports, besides.

At one point, the Nextel customer base was prized within the mobile industry for its significantly-higher voice average revenue per user. These days, as revenue growth is coming from new data services, the gap has narrowed almost to insignificance, and surely will vanish.

At one time, Nextel's "push-to-talk" feature was unique, but other providers now are able to mimic that feature. It's popular in the construction business, but when was the last time you saw anybody use that feature who wasn't in a field service work scenario?

Operating two networks leaves Sprint with a troubled customer base, higher churn issues, an unusual technology platform and all the other issues--such as limited handset choice--that come from being a low-volume customer. There's more downside than upside. And be clear, most of the churn is from the Nextel side.

From Google's vantage point, it is clear that the Sprint WiMAX network will be built and operational years before any 700-MHz network will. Sprint's WiMAX network has been designed for mobile access, where Clearwire has been taking the fixed approach. Mobility works better for Android devices, obviously.

Sprint now says it will review its WiMax business plans. It also should be seriously considering what to do with the Nextel assets.

Vonage at&t Patent Settlement for $39 Million?

Vonage and at&t are discussing settling the patent infringement suit at&t has filed against Vonage for $39 million, to be paid over five years. In October, it settled with Sprint Nextel Corp. for $80 million. Vonage will settle with Verizon Communications Inc. for between $80 million and $120 million, depending on the outcome of a final court hearing.

As a result of all the patent settlements, Vonage's available cash has been reduced from $356 million to $194 million, a dip of $162 million, of 46 percent.

It isn't clear whether other VoIP providers might be liable as well. And if they are, it isn't clear Sprint, at&t and Verizon will really want to make an issue of the infringements. It wouldn't look good, for one thing. Sprint won't want to sue its own customers, the cable companies. And though th giants might be able to cripple just about all the remaining VoIP independents, the regulatory harm would outway any potential short term financial gains.

Telcos Practice "Strategic Indifference"

People who like the idea of rapid service and applications innovation typically are frustrated by the glacial speed at which network services operators move. In fact, the thought often arises that "pipes" companies, especially those dealing with actual "first mile" connections to actual users, are incapable of understanding threats to their business models.

Well, they do move slowly, compared with anything in the software world. There is no Moore's Law at work with construction, trenching, installing drop wires and network interfaces. Which explains the attractiveness of wireless alternatives.

That said, it also is true that incumbents do practice "strategic indifference." That is to say, they will seemingly ignore a threat such as VoIP, just as they seemingly ignored the advent of broadband access, in the form of Digital Subscriber Line and cable modem services.

You might not remember, but North American carriers were slow to understand mobility as well. As awareness grew, carriers simply bought the whole wireless industry.

The point is that the indifference is quite planned. If an innovation will harm current revenues, it makes business sense to plan to lose some market share and revenue rather than embrace the trend fully and lose even more money. Up to a point, incumbents will let attackers take share, on purpose.

If the innovation reaches a tipping point, where there are strategic drivers, incumbents simply pile on in a massive way. That's why the VoIP activity on the part of North American incumbents is so different from that of European carriers. In Europe, VoIP is past the tipping point, and incumbents must play. That point hasn't yet been reached in North America.

When the tipping point is reached, they'll move, and aggressively. But this is a matter of maximizing total revenue. If revenue is maximized by delaying VoIP, that's what carriers will do. If revenue is maximizing by making POTS more attractive, that's what they'll do.

Such carrier behavior is not "dumb." It is planned. In fact, other industries have been "dumb."

In fact, the music industry seems not to have understood the threat or the changes posed by digital media.

You can be quite sure the video industry has learned from that experience and is anything but complacent. No serious video executive takes user-generated content lightly. Everybody is taking steps to participate in a broader media landscape, though nobody yet knows how the business models will play out.

Of course, that also means nobody is going to sneak up on video incumbents. They know exactly where to look for opportunities and threats, and are doing so. IP video will not be a replay of VoIP, in terms of executive denial, simply because tipping points might be somewhat clearer, and because change in the video software space will not entail the massive capital spending carriers must yet contend with in migrating to a broadband, all-IP future.

Video contestants will move faster than you might think.

Mobile Web More Like TV?

WhatsOpen.com offers a Web application that shows users nearby stores and operating hours. That's the sort of thing that a mobile advertising strategy can build off of. It also suggests something else about the nature of mobile Web services optimized for handhelds.

To wit, given the greater difficulty of interacting with the device, compared to a PC, maybe large portions of the experience need to be more like linear TV, as heretical as that may seem. Push useful data to me. Not all the time because that kills battery performance. But sense when it is likely I am looking at the screen. Show me something interesting.

Combine Real Simple Syndication with streaming. Maybe not streaming video, maybe streaming text. Adjust the feed based on my location. People talk about the difference between a lean-back experience and a lean-forward experience. Maybe we need to work on a stand-up experience: screen-based information and entertainment adapted for a user that is standing up and moving.