Carrier Ethernet Scorecard

More than 80 service providers are delivering retail carrier Ethernet services to business customers in the United States, say analysts at Vertical Systems Group.

Services range from Dedicated Internet Access (DIA) to Ethernet Private Lines to VPLS (Virtual Private LAN Service).   

Incumbents, including market leaders AT&T and Verizon, deliver nearly half (46%) of all business customer Ethernet ports installed in the U.S. 

Another one third of the total (34%) is supplied by competitive providers, with Time Warner Telecom and Cogent topping this segment.

Cable MSOs have the smallest base overall (20%), however this is the fastest growing segment of the U.S. Business Ethernet services market based on ports.

Cox and Time Warner Cable currently lead in the Cable MSO segment.

Femtocells, Wi-Fi, or All of the Above?

Though Wi-Fi remains the clear home-based wireless networking technology, mobile providers also are experimenting with UMA and femtocell techniques. But Aruba Networks suggests the ultimate solution might bit of "all of the above," as often happens in the communications business.

Those discussions, likely to become more pronounced as service providers grapple with their fixed-mobile convergence strategies, will require some choices.

Wi-Fi has high production volumes, low prices and good consumer acceptance. Femtocell technologies currently must climb an experience curve to provide reasonable consumer device prices, and sort through some business model issues, Aruba argues.

Wi-Fi already has a significant network effect, so mobile operators must choose whether to leverage Wi-Fi or use femtocells.

Mobile operators have the advantages of macro-cell coverage and phone numbers, so Aruba suggests a hybrid approach using both Wi-Fi and femtocell technologies.

A simple device might combine a Wi-Fi access point and femtocell, or possibly a digital subscriber line connection as well.

Microsoft Sees Big Future for Hosted Enterprise Email

Microsoft Corp. sees tens of millions of corporate e-mail accounts moving to its data centers over the next five years, Reuters news service reports. Consider that a vote in favor of "cloud computing" and hosted services.

Chris Capossela, Microsoft SVP, says he expects Microsoft to allow enterprises to choose between the more-traditional licensing model and a subscription-based service.

Exchange Online, the service offering for its Exchange mail and messaging server software, will be the primary application adopted by corporate customers, Capossela believes.

"In five years, 50 percent of our Exchange mailboxes will be Exchange Online," he predicts. Small-business specialist Cbeyond probably would agree. In its Atlanta market, its oldest market, Cbeyond is seeing 40 percent penetration of the hosted Exchange service it offers to small business customers.

According to research firm Radicati, Exchange will run about 210 million corporate e-mail accounts in 2008, growing to 319 million mailboxes in 2012.

16.3 Million Consumer VoIP Lines in Service

By the first quarter of 2008, 16.3 million consumer VoIP lines were in service, representing 13.8 percent of all U.S. households, and 27 percent of broadband households, say researchers at TeleGeography.

Those customers--80 percent or so--largely but not exclusively have been gained by cable companies, at the expense of the incumbent local telephone companies.

Since the start of 2005, the RBOCs have lost 17.3 million residential telephone lines, while VoIP service providers have gained 14.4 million new customers.

User-Surly Web Sites

Most Web sites are fairly user friendly these days. But every once in a while you encounter a site designed by people who seem to have no idea why people come to a site, and how they use them.

37 Signals notes a site where six different kinds of shoes were found in a “performance” category. When 40 uninvolved people were asked what “performance” meant to them, only 10 had even a vague idea.

Use "paths" when designing, 37 Signals says. "A path is a line that goes from a starting point A to an accomplishment B." That's what users want. That’s a path. "Where are your golf shoes?" is a path.

"Does my cell phone support international calling?" That’s a path as well.

"Collect all the paths you can think of in a pile, pull out the 8 paths that 80 percent of your visitors come looking for, and that’s your home page.

Blog Readership 67% of Internet Users by 2012

Blogs are a new form of media, but they are "media." The number of people creating blogs in the United States will reach over 35 million by 2012, roughly 16 percent of the Internet population, according to eMarketer. But as is the case for most forms of user-generated content, most people are content to watch, listen or read, rather than creating content themselves.

By 2012, more than 145 million people, 67 percent of the U.S. Internet population, will be reading blogs at least once a month. That is up from a readership of 94 million in 2007, or 50 percent of Internet users.

Paul Verna, eMarketer senior analyst, says "U.S. blog advertising will reach $746 million in 2012, up from $283 million in 2007."

Like podcasts, blogs tend to appeal to specific audiences. Accordingly, much of the demographic targeting that marketers work so hard to achieve in the mainstream media is already done for them.

U.S. Wireless Data $24.5 Billion in 2007

U.S. wireless customers spent $24.5 billion on data services in 2007, with usage growing 55 percent, says consultant Chetan Sharma.

Growth increased steadily through the year, with fourth-quarter 2007 data services revenues hitting $6.9B. At current rates, the only question is how much above $28 billion will be spent in 2008.

Fourth quarter data revenue was up 7.8 percent sequentially. Average revenue per user .declined by $0.81 and reversed the trend of overall ARPU uptick of the last two quarters, though.

Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.68, Sharma says.

Verizon and AT&T grew annual data revenue 64 percent. Overall, the top carriers earn about 19.34 percent of total revenue.

Non-messaging data revenues continue to be in the 50 to 60 percent range of toal data revenues.

MID Movement Good for 4G

Asustek Computer will launch its Atom-based 8.9-inch Eee PC 901 in June 2008. Hewlett-Packard recently launched a Windows XP version of its Mini-Note 2133. Dell is said to be readying its own version of a mini-notebook. Given the popularity of Linux-based Eee devices, and the addition of XP-powered machines, a class of devices--"mobile Internet devices"--is being seeded into the market that are precisely the sort of new mobile-centric machines fourth-generation networks are poised to serve.

Chatter: Best Buy Buying Netflix?

It's just one of those rumors that pop up, possibly because an investment bank thinks it can drum up some business by convincing a company executive a deal makes sense. But there's chatter, says Henry Blodget, that Best Buy is looking at buying Netflix. Some investors think there might be fire where there's smoke, and pushed share of Netflix up six percent on higher volume May 16, 2008.

Given that Blockbuster is being persued by Circuit City, what gives? The logic behind each transaction is that a tighter integration of software and hardware is good for both businesses. Sony, with a mixed track record, used precisely that logic to get into the studio business. And Apple uses a similar approach for iTunes.

The issue, perhaps, is whether there is enough ability to integrate on-demand video and DVD rentals and sales with the rest of the consumer electronics retail business. That might be hard to envision.

Still, each retailer, like Wal-Mart and Target, already is in the video content sales business. Software drives hardware purchases; and hardware purchases create the demand for software sales.

But mergers, in either combination, might not be the most-efficient way to create additional value. Either Blockbuster or Circuit City could sell subscriptions, provide kiosk support or otherwise heighten its software profile without actually buying a partner.

Still, the rumor does point out the increasing retail involvement in on-demand, time-shifted video. VCRs, DVDs, iTunes players and video-compatible mobile devices all are ways consumers "watch what they want, when they want it."

And since major mass market retailers are customer touchpoints for the hardware and software sides of those experiences, move movement, if not these particular deals, will occur.

Summer 2008 Voice Peering Forum Commercial

The next meeting is in San Francisco, June 23-24 at the Hotel Nikko. It will feature the most-extensive speaker line-up ever and will feature the biggest attendance ever

“From a bottom line business perspective, Voice Peering Forum Winter 2007 was hands down the most productive conference I attended last year." said Patrick Murphy, COO, The Thomas Howe Company, a leading professional services firm focusing on voice mashups and communications enabled business processes, and is widely recognized as one of the most influential firms in VoIP.

"The voice over IP market is booming, the Voice Peering Forums provide us with a great opportunity to discuss the different topics with a right set of players in a good size and focused environment." commented Carlos Da Silva, Director of Marketing Americas, Orange international wholesale solutions.

IPTV: Why Verizon is in No Hurry

For many telcos, IPTV makes sense as a delivery platform or transmission mechanism as much as anything else. Sure, IPTV offers more "hooks" to advanced services integrated with content. But the revenue battle now is over linear TV services that compete with cable and satellite-delivered fare, and that means the choice of "switched" IPTV, instead of a broadband digital delivery method (all linear channels delivered digitally) isn't perhaps as critical.

For Verizon, which has been its video using a method that is closer to cable TV than anything else, linear offerings seem to be fine for the moment. That's where the money is.

Even operators that have chosen an IPTV solution for its bandwidth efficiency still are making their money on the linear video service, not the new features.

Clearwire "Time to Cash Flow" Issues

Some observers continue to worry about Clearwire's prospects from a financial, rather than operational standpoint. At the very least, there remains an underfunded business plan. Clearwire says it is $2 billion or so. Assume Clearwire is correct. That money still remains to be raised.

On the operational front, early 60 percent of domestic markets are EBITDA positive. Of course, any veteran of the competitive communications business will understand what that means and doesn't mean.

It doesn't mean Clearwire is making a profit in those markets. New national networks, even of the more-affordable wireless sort, are hugely expensive. Cash flow is important, though, and a reasonable measure of progress.

The issue is that nobody builds a new broadband network these days expecting to survive offering a single service, no matter how compelling. Multi-service bundles are the necessary requirement when penetration levels are expected to be modest, so VoIP is getting more attention these days over at Clearwire.

The issue will be whether Clearwire can garner enough revenue operating essentially as a "3G with voice" operation or "broadband with VoIP" business until the next wave of applications and devices start to get traction.

Some of that Clearwire can influence, but not all. If I had to guess, I'd bet that robust wholesale services ultimately will make the difference.

LTE for Alltel

Scott T. Ford, Alltel CEO, says the company, which currently runs a wireless network based on CDMA, will migrate to Long Term Evolution when it builds a fourth-generation network. Not that it is in any rush to do so. But
Alltel seems to be in step with its mobile service provider compatriots globally.

LTE seems to be shaping up as the first global wireless standard, a development that should help considerably in terms of scale, and what that means for the cost of devices.

WiMAX is growing as well, but does not currently seem to be poised for the scale that LTE is poised to garner.

Plaxo Questions After Comcast Buy?

Some 349 users have voted on ReadWriteWeb about whether they will keep using Plaxo, now that Comcast has acquired the company. About 32 percent seem to think this is a bad idea, and say they will delete their accounts "right now."

Some 21 percent say they don't see an issue, and will keep using Plaxo. Another 21 percent indicate they will wait and see. About a quarter don't use Plaxo, and have no plans to do so.

Apparently there is some feeling that the service will not be the same as Comcast starts to harness Plaxo's address book and content recommendation services for internal use. That's a possibility, to be sure.

Comcast has definite ideas about social elements and recommendation engines as primary tools to allow people to find new things to watch, and Comcast is heavily invested in getting its customers to watch on-demand content.

On the other hand, Comcast has a long history of investing in media properties that succeed only by appealing to buyers outside the Comcast orbit. To the extent that the independent Plaxo service has value, Comcast will not want to destroy that value.

The bigger question might be whether, given those intentions, Comcast can succeed in harnessing Plaxo's address book and social mechanisms without at the same time harming Plaxo's value for independent users.

Google "Most Visited" For First Time

Google now has overtaken Yahoo as the most-visited website property, according to comScore. In April Google Sites attained the number one spot in the Top 50 U.S. Properties ranking for the first time in history with a total audience of more than 141 million visitors.

Yahoo Sites ranked second with 140.6 million visitors, followed by Microsoft Sites with 121.2 million visitors.

Superpages.com Network and CareerBuilder both jumped eight spots in the ranking to positions 18 and 30, respectively.

According to comScore, Google’s unique U.S. audience in April was up 18 percent from the same month in 2007, while Yahoo’s audience grew 7 percent.