U.K. ISPs Will Have to Block Pirated Content

Voluntarily or by government regulation, U.K. Internet service providers are going to become watchdogs of pirated music and video content, and likely will be required to disconnect repeat offenders.

In fact, Virgin Media will become the first U.K. ISP to crack down on customers who download music illegally, says Juliette Garside of the Telegraph. And video is a strong possibility for follow-on rules.

Record labels are lobbying for a "three strikes" regime that would allow ISPs to disconnect offenders' access service, and the U.K. government is expected next month to start the process of putting such regulations into place.

This would be the first time a British internet company has publicly moved to share responsibility for curbing piracy, using a mechanism where offenders are identified by copyright holders and that information is forwarded to Virgin and other ISPs.

Six million broadband users are estimated to download files illegally each year, costing record labels billions of pounds in lost CD sales but ISPs have so far resisted calls to control the traffic that passes over their networks, raising issues around customer privacy and the difficulty of accurately pinpointing file sharers.

The U.K. government, though, intends to force the matter to a head. It has said it will implement legislation by April 2009 unless ISPs came to a voluntary agreement with the music and film industries.

The new developments illustrate the difficulty of cleanly separating piracy control from content freedom; network management from anti-competitive ISP actions; optimized delivery of audio, video and other real-time services from other best-effort traffic using priority-delivery mechanisms.

Mac Sales Stronger, PCs Slipping

Despite evidence of slowing PC buying activity, planned purchases of Apple Macs remain relatively strong, according to a recent ChangeWave Alliance survey.

About eight percent of the 4,427 consumers surveyed by ChangeWave in late February say they'll be buying a laptop in the next 90 days, the lowest level of consumer laptop demand in the past 12 months. The same trend was seen in desktop PC purchases, with just six percent saying they'll be buying one, also a low for the year, says ChangeWave.

That trend also is reflected among enteprise and business buyers. In February, only 73 percent of 2,204 corporate respondents said their company plans on buying laptops in the next quarter, down 4-pts from a year ago. Plans to buy desktop machines were down five percentage points from the same month a year ago.

On the other hand, looking at the next three months, Apple remains the leader among consumers who plan to buy a laptop. Some 31 percent of those who say they will buy a machine indicate they will buy a Mac, down just two points from the all-time high recorded in ChangeWave's prior survey. Apple planned desktop purchases of 28 percent, down one percentage point, also are near record levels.

Importantly, Apple's numbers are up more than 50 percent from a year ago.Enterprise planned Mac purchases are also at or near record highs, ChangeWave says. It is possible the operating system is responsible for some or much of the difference in Mac interest, compared to the Vista operating system.

Among corporate respondents using the Leopard operating system, over half (53 percent) report they are "very satisfied". This compares to a 40 percent "very satisfied" rating for Windows XP Pro users, and just an eight percent "very satisfied" rating for Microsoft Vista Business (eight percent).

iPhone, Smart Phone, Phone: Big Difference in Behavior

It's starting to become clear that putting smart phones in the hands of users will cause their behaviors to change in ways that are helpful if a service provider cares about new services.

It also is clear that new behaviors are encouraged when users have an easy way to navigate and don't have to worry about the charges.

That isn't necessarily to say most users require truly "unlimited" data plans. Plans that allow them to make use of Web applications and features without worrying about the cost are what is important.

iPhone Changes Mobile Landscape

Six months after the iPhone’s U.S. launch, has the device changed the mobile landscape? According to M:Metrics, the mobile media authority, the answer is yes. Today, the measurement firm reports that the iPhone is already the most popular device for accessing news and information on the mobile Web, with 85 percent of iPhone users accessing news and information in the month of January.

That's important because the iPhone probably has created a whole new segment within the wireless user and wireless device universe: that of the mobile Web device.

Until recently, surveys by the Pew Internet and American Life Project, for example, have shown relatively low usage of the mobile Web. The iPhone user pattern suggests latent demand exists and will surface if only user interface and charging expectations are addressed.

“Beyond a doubt, this device is compelling consumers to interact with the mobile Web, delivering off-the-charts usage from everything to text messaging to mobile video,” says Mark Donovan, M:Metrics senior analyst.

iPhone might also be showing there are new niches for mobile video as well.

M:Metrics found that a staggering 31 percent of iPhone owners watched mobile TV or video, versus a 4.6 market average, and more than double the rate for all smartphone users.

The iPhone arguably also has emerged as the most-successful mobile music platform. About 74.1 percent of iPhone owners listened to mobile music in January, compared to 6.7 percent of the total mobile audience. In part, that may be because iPhone users also are heavy iPod users. About 84 percent of iPhone owners who use an MP3 player use an iPod.

Demographically, iPhone users are similar to the demographics of other smart phone owners. They are more likely to be: male, aged 25-34, earn more that $100,000 and have a college degree, than the average mobile subscriber, M:Metrics reports.

Though it might be tough to quantify the precise impact of each contributing element, it seems clear enough that when users don't have to worry about the charges and have an easy way to navigate, they quickly will adopt new behaviors related to mobile Web usage.

SME Conferencing Up 50% Next 12 Months

More than 50 percent of European small and mid-sized businesses plan to increase use of conference-calling and video-conferencing technologies over the next 12 months, a survey conducted by Skype reveals.

That finding corroborates with other data suggesting that Web-based collaboration, for example, is growing much faster than air travel, and replacement of such travel costs is a generally accepted value conferencing services provide.

A third of companies surveyed already use conference calls while a further 40 percent see the potential. Two thirds of companies already using conference calling do so at least once a week and 60 percent predict that they are likely to increase use over the next 12 months.

There is a similar pattern to video-conferencing use. Despite being a relatively new feature, more than 40 percent can see the potential of video-conferencing use in business. Skype’s internal data also suggest that 30 percent of all Skype calls now involve video.

There is also strong evidence to suggest that small businesses are embracing conference calling and video conferencing as a method of communicating both internally and with their customers and new prospects, Skype says.

In fact, many of the SMEs questioned who were not current users of video conferencing said they would be more likely to use it if it was better quality and not expensive.

Mobile Ads Still Largely Text Based

Global mobile advertising will grow from $2.7 billion in 2007 to $19.1 billion in 2012, mainly on the strength of text-message campaigns, according to a new eMarketer report.

Mobile spending in the U.S. market will jump from $878 million in 2007 to $6.5 billion by 2012, but will be eclipsed by the more mobile-centric Asia-Pacific market by then.

U.S. mobile spending is projected to nearly double to $1.7 billion in 2008.

Because text-messaging will remain the dominant non-voice mobile service over the next several years--especially in big markets like China and India that lack 3G networks--that's where most ad dollars will flow, eMarketer argues.

Advertising linked to SMS and MMS text-messaging, mobile instant messaging, and mobile e-mail will collectively account for more than $14 billion of the $19 million total projected in 2012--up from $2.5 billion in 2007.

Display and search advertising will lag because those formats work best on higher-speed broadband networks. But $99 smart prices and unlimited use mobile plans are going to expand market potential in North America.

3G Data Card Sales to Quadruple

Sales of mobile data cards are forecast by Infonetics Research to nearly quadruple between 2007 and 2011, when they will reach $2.9 billion globally.

Of course, mobile data cards could threaten some portion of the Wi-Fi hotspot market, as a logical consequence.

“Currently, mobile data services are generally too expensive for mass market adoption, but that will change with the increasingly extensive roll out of high speed HSDPA, the launch of new data plans offering increased download limits, and better subsidies for mobile data cards," says Richard Webb, Infonetics directing analyst.

There is another possibility, though. Broadband-equipped smart phones that double as access devices will become more popular. And some significant part of the Wi-Fi and data card use case is being subsumed by mobile email devices and Web-capable smart phones.

Still, it is hard to envision any scenario where "personal broadband" does not ultimately become as ubiquitous as "personal voice" now is. It will take a while, but the same convenience values that have transformed "voice," which once was a shared service provided to "places," and now is provided to "people," will occur in the mobile Web area as well.

Why Mobile is a Better Business than Wireline or Internet

From a service provider's point of view, the Internet has proven to be an important driver of new service revenue in the form of broadband access and dial-up access, in its day. So far, though, mobile data has been a far-better business, despite moves toward openness that will render much wireless data a business uncomfortably similar to wired data (access dominated revenues, in other words).

The reason is that mobile services have been much more a walled garden that the Internet has been, so customers have gotten used to the idea that applications cost money in a mobile context where equivalents might not, in a broader Internet context.

”It’s not lost on mobile users that they still pay for almost everything on mobile,” says John du Pre Gauntt, eMarketer senior analyst.

Analysts at Telephia, now a part of Nielsen Mobile, point out that a typical monthly charge for location-based services in $9.23. Music services might add $4.99 while weather services might cost $2.82.

That's likely to change as more users switch to smart phones with Web browsing capabilities, though. It's hard to see many people paying for general purpose weather, sports, news or map-related information when they can just pull that information from their mobile browsers.

Fuze: Mobile Video Collaboration

Fuze is CallWave's new mobile-centric collaboration service, browser-based and featuring what it calls "high-definition synchronized video collaboration". Fuze offers what CallWave calls "a sophisticated audio/video collaboration experience with remote access from any computer and from 3G or Wi-Fi enabled phones."

Fuze participants can use Skype as well as landline or mobile phones when participating in conferences.

The service also allows 3G or Wi-Fi connected users to view business documents like PowerPoint and videos as part of a conference call.

Additional services include high-definition audio conferencing, collaboration, voice-to-text transcription, local and long distance calling, Internet fax, visual voicemail, text and instant messaging. Many of the applications and services on an a la carte basis.

Get ready for lots of mobile-related news: CTIA is coming.

Growing Interest in Mobile Transactions

A new Harris Interactive study suggests 25 percent of users with mobile Internet access now use their devices to buy goods and services online with a credit card, and nearly one in five saying they would like to someday use cell phones as a "mobile wallet," where charges would be billed directly to their mobile accounts.

In addition, ten percent of the survey participants said they would consider wire transfers and stock trading via their mobile phones.

About 16 percent of mobile phone subscribers already use mobile banking services, with 60 percent of these people using the services at least once a week, Harris Interactive says.

About 35 percent of respondents say they are "open" to checking bank account balances and transferring funds using their mobile devices. A third of those surveyed also said they would like to receive text message alerts from their financial institutions.

The survey also found that smart phone users exhibit this behavior more than other mobile users, but that finding doesn't mean much. By definition, smart phones can access the Web, and smart phone users are more likely to buy data plans.

Still, the new survey simply indicates that mobile banking and other transaction services are slowly gaining awareness and usage.

Cox Mobile Broadband?

In the recent U.S. 700 Mhz auctions, Cox Communications won 14 Block A and eight Block B licenses in areas where it also has cable TV systems. Cox hasn't said what it might do with those assets, but the most logical choice are local mobile broadband networks that allow Cox customers to unify fixed and wireless mobility access, at least within a metro area.

Long term, it remains to be seen how effective such combined access will prove to be, compared to services that additionally add national access.

There is at least some evidence most consumers do not value mobile broadband all that highly, when they already have fixed broadband. And lots of users who do value mobile broadband are business travelers who really need national access, and in some cases international access that Cox won't be able to provide.

NTT, AT&T Join Undersea Cable Group

The Trans-Pacific Express Consortium has signed two new members, AT&T and NTT Communications, says CommsDay reporter Tony Chan. The two new consortium members join Verizon Business, China Telecom, China Netcom, China Unicom, Chunghwa Telecom and Korea Telecom as members of the TPE consortium.

As a result of its joining the TPE consortium, at&t now has access to two out of three major trans-Pacific cables being built. The company also is part of the Asia-America Gateway system linking South Asia to the United States.

The current trans-Pacific capacity market is dominated by two operators, Tata Communications, who owns the TGN-Pacific, and Pacific Crossing.

As has been the case within the U.S. long-haul market, there is growing discussion of the wisdom of fiber swaps, capacity swaps and other mechanisms such as participation in multiple new undersea cable consortia as a way of enhancing network reliability.

Within the U.S. market, for example, carriers gain a measure of addtional security simply by swapping fibers, wavelengths and capacity on their backbones.

To a certain extent, that same sort of thinking is partly driving undersea consortium participation as well.

IPTV: Signs of Changing Behavior, Maybe

There's some important new evidence that U.K. customers who change to IPTV from conventional terrestrial TV do change their behavior in ways that boost average revenue per user, say researchers at Point Topic.

There's countervailing evidence that U.S. consumers are not so inclined.

The ability to time shift TV viewing often leads to customers using pay-per-view as well, Point Topic says.

For example, one top-ten operator has found that around a third of its IPTV subscribers buy three or four pay-per-view items per month. Since the implication is that this exceeds the buy rate for non-IPTV users, there is some potential lift in average revenue per user.

High definition TV is the other potential behavioral change. Subscribers may be willing to pay more for HDTV than for standard-definition programming, again with positive ARPU impact.

ABI Research, on other hand, does not find that U.S. consumers are changing their on-demand habits.

About 66 percent of respondents say they subscribe to some form of pay-TV service, and of those, 60 percent receive at least one additional service (telephone, Internet) from their provider.

However, only 54 percent of respondents declared themselves satisfied overall with their providers: pricing and customer service are the biggest sources of discontent.

About 41 percent of TV owners have a high-definition TV, but surprisingly, only 56 percent of this group subscribe to a HDTV service package.

A substantial 45 percent of viewers say they use pay-per-view, but not often: most do so just once a month or less.

Generally, interest in “next generation” TV services is low (although greater in younger viewers), with the one exception being the ability to move content sourced from the Internet from the PC to the TV.

New Google White Spaces Proposal

Google now is proposing a new way of avoiding over-the-air interference for devices it and othe companies propose be run on vacated TV frequencies.

Google has told the the Federal Communications Commission it can produce an enhanced system to prevent interference between unlicensed devices operating in slices of local spectrum not used by over-the-air TV broadcasters, and licensed broadcasters actually operational in a local market.

According to dailywireless.org, that could mean 22 to 44 6-MHz slices of spectrum in markets as large as Los Angeles or as small as Juneau, Ak.

The FCC currently is testing equipment to see if, in fact, white space spectrum can be used by low-power data devices without causing interference to television broadcasts on adjacent or non-adjacent frequencies.

Supporters of the "white space" initiative include Dell, Intel Corp, Hewlett-Packard Co. and Philips Electronics and Google.

The idea, as you might guess, is opposed by U.S. broadcasters and makers of wireless microphones, who fear the devices would cause interference.

If means can be found to identify and avoid interference, many megahertz of new spectrum with high ability to penetrate walls and buildings will be available for end user devices and signal trunking, presumably. If it can be shown that equipment can operate without interference, then application and device manufacturers will have a brand new play field upon which to operate.

Some fairly sophisticated technology will have to be developed, though, as the available white space will vary from geographic place to place. So the radios will have to be power sensing, power limiting and frequency agile.

After getting "open network" provisions adopted for C block 700-MHz networks, and then as a corollary getting Verizon and at&t more committed to similar "open networks," now Google is pushing the federal policy community to open up other significant chunks of unused spectrum for unlicensed use by any devices or services able to operate in interference-free fashion.

About which we must simply note that between them, on some levels, Apple and Google are having more impact on wireless innovation than just about everybody else put together.

Bandwidth Demand: Increasing Faster than Moore's Law

The thing about technological change is that lots can change underfoot without people really noticing it. And then some point is reached where the accumulated weight of those changes causes a tipping point. And we might be watching for such a tipping point in business broadband.

You'd be hard pressed to find much widespread evidence of the trend if you look at what small businesses are buying, but if one looks at enterprises, "T1 and DS0 already starting to go away," says Pieter Poll, Qwest chief technology officer. "More and more people are preferring metro Ethernet at the high end, so low-speed private line revenue and demand is decreasing."

At some point that will start to be a bigger, or more noticeable trend within the smaller and mid-sized business market as well, simply because the bandwidth intensity of modern business and consumer applications is increasing.

Average 2007 IP traffic was over 9,000 terrabytes a day in the consumer segment, for public Internet. The average in 2012 will be over 21,000 terrabytes a day, Poll says.

Qwest itself "sees our data networks doubling traffic every 16 months," Poll noes. "That's a faster rate of increase than Moore's Law," says Poll.

"There are just more customers, more are wireless and content also is shifting to richer media," he says.

"Our residential broadband base grows traffic 39 percent annually, no matter what size pipe they buy," Poll notes.

All of which has got Qwest's planners looking for ways to grow bandwidth faster. "We are doomed over time if bandwidth demand grows faster than Moore's Law," says Poll.

So how does Qwest do that? IP directly over optical waves, where the router and the optical transmitter are all one device. Meshing the edge devices also helps, as it reduces backbone network hops, and hence bandwidth usage.

Poll also thinks major backbone providers will start swapping fiber to gain greater topological diversity and improve protection from fiber cuts.

As for his views on where the next increment of backbone bandwidth will come, Poll notes there are some carriers wanting 40 Gbps equipment, though he personally thinks running 10 Gig E waves is more affordable. Still, "that could change soon," says Poll.

The bigger issue for him is that 40 Gbps will be stranded investment when 100 Gbps equipment is available.

"My personal feeling is that 100 Gbps is the step we want," says Poll.