Behavior Targeting Is Not DPI

Targeting advertising is seen by U.S. cable operators as a way to grow advertising revenue from $5 billion annually to about $15 billion annually. Mobile operators also have high hopes for targeted, location-aware ad targeting for mobile users.

At least for the moment, though, behavioral targeting is under a bit of a cloud. In the midst of Congressional pressure to assure user privacy, service providers seem to have suspended deployment of behavior targeting systems that allow them to target ads to specific users, at least until privacy compliance issues can be cleared up. 

Charter Communications, Embarq, CenturyTel, Knology and Wide Open West are said to be among service providers that had been testing or deploying behavioral advertising technology from NebuAD, for example.

So it isn't surprising that providers of deep packet inspection systems are getting asked lots of questions about the possible impact on DPI technology and uses. On the contrary, says Cam Cullen, Allot Communications director, DPI technology is more importand in an environment where service providers might have to demonstrate they are complying with bandwidth management or privacy rules. Blocking of child pornography sites are another example of a legal requirement that requires DPI. 

"You now must demonstrate you are behaving fairly" and DPI records will substantiate compliance, says Cullen. At the same time, Allot is seeing greater demand for the ability to assure priority for video and voice applications. 

And since any ad targeting capability will require clear opt-in and opt-out policies, DPI will be essential in that regard as well. 

Also, usage-based pricing requires counting packets on a per-user basis. A service provider might offer an unlimited VoIP plan, for example, with a data usage quota of 100 Gbytes a month. To avoid potential user ire, the service provider might want to separate those bits into different buckets, so VoIP packets do not come out of the 100-Gbyte quota.

Ed Markey, chairman of the House Subcommittee on Telecommunications and the Internet, and other high-ranking Congressman have questioned whether ad targeting practices (without explicit and clear opt-in policies) run afoul of the US Communications Act of 1934, the Cable  Act of 1984, the Electronic Communications Privacy Act, and other wiretapping-related US statutes. 

Behavioral targeting has gotten lots of service provider and content provider attention because it provides the sort of end user activity that Google and Yahoo already largely have, says Yankee Group analyst Daniel Taylor, giving ISPs a shot at what some believe will be a $50 billion U.S. targeted advertising business. 

Behavioral targeting servers read the content of nearly every Web page that users visit, allowing unparalleled ability to discern user interests and activities. The problem is that targeting has generally has required an  "opt out" process (you get it unless you opt out) rather than an opt-in process (you are not targeted unless you agree). 

DPI, though, is not behavioral targeting. Behavioral targeting is used to analyze trends and identify Web page hits, site views and keywords. DPI is a tool used to provide granular inspection of IP packet headers and payloads for Layer 4 through Layer 7, destinations, application type and protocols, says Taylor.

DPI is a network monitoring and management tool that can be used to improve efficiency and provide quality of service.

DPI technologies can also be used in conjunction with advertising insertion servers, which is where the confusion between DPI and behavioral targeting occurs. In fact, Taylor thinks behavioral targeting raises so many issues it simply should be avoided, at least for the moment. 

U.S. Enterprise Ethernet Up 16% in 2008

U.S. business Ethernet ports in service grew more than 16 percent in the first six months of the year, according to Vertical Systems Group. 

AT&T accounted for 21 percent of total ports, followed by Verizon with 15 percent, TW Telecom with 13 percent and Cox with 10 percent.  Rounding out the top tier of Ethernet service providers with more than 5 percent share were Qwest (8 percent), Cogent (7 percent) and Time Warner Cable (6 percent).

XO, AboveNet, Level 3 and Reliance Globalcom (formerly Yipes) lead more than forty other companies delivering retail Ethernet services to business customers in the U.S.  Other Business Ethernet providers in alphabetical order include: American Fiber Systems, Alpheus Communications, American Telesis, Arialink, Balticore, Bright House Networks, Charter Business, CIFNet, Cincinnati Bell, Comcast Business, Embarq, Expedient, Exponential-e, Fibernet Telecom Group, FiberTower, Global Crossing, Integra, IP Networks, LS Networks, Masergy, Met-Net, Neopolitan Networks, NTELOS, NTT, One Communications, Optimum Lightpath, Orange Business, Paetec, RCN, Savvis, Spirit Telecom, Sprint, SuddenLink, Surewest, US Signal, Veroxity, Virtela, Windstream, and others.

Phweet Escalates Calls into Conferences

No one has measured the numbers of teams that work together virtually, but some estimate there are more than 1.89 billion workers worldwide. While Gartner Dataquest has claimed that almost 41 million employees worldwide will be teleworkers by the end of 2008 (working at least one day a week from home), Wainhouse Research believes that the numbers of distributed and mobile workers far exceed that number. Furthermore, the total number of distributed workers, including teleworkers, could reach as much as 100 million worldwide, Wainhouse suggests.

In principle, Phweet, a new application based on Twitter, might ulimately help all those distributed workers communicate. A Phweet begins as a person-to-person call, but Phweets are meant to be social and so any Phweet can be instantly transformed into a multi-party conference call.

When you Phweet someone, you can decide to make it “private” (sent with a Twitter “direct message”). In that case, you can still add people to the call, but only people you explicitly invite to the call can join in (and they must be following you on Twitter).

Otherwise, a Phweet is sent using the public twitter stream (with a message such as “@phweet http://phweet.com/Gyfc India PhweetUp at 3 pm today. Join by clicking url.”) and in this case anybody that sees that URL can click the link and request to join.

The “host” then can approve that user and let them into the Phweet. In other words, the Phweet URL can be sent to anyone, using any means available, it doesn’t have to be sent only via Twitter. Skype chat and RSS feeds can be the notification vehicles.

One objective of a Phweet is to make the path from tweeting to talking quick and easy. 

People Underestimate Email Intensity

In a study last year, Dr. Thomas Jackson of Loughborough University, England, found that it takes an average of 64 seconds to recover your train of thought after interruption by email, so people who check their email every five minutes waste 8.5 hours a week figuring out what they were doing moments before, reports Suw Charman-Anderson, a writer for the Sydney Morning Herald.

Dr. Jackson found that people tend to respond to email as it arrives, taking an average of only one minute and 44 seconds to act upon a new email notification. About 70 percent of alerts got a reaction within six seconds, arguably a faster reaction that occurs when a phone rings, sings or buzzes.

Likewise, a July 2006 study by ClearContext found that 56 percent of users spent more than two hours a day in their inbox.

The other thing is that what people say, and what they do, often are different. And that seems to be true about the frequency of interaction with email systems. About 64 percent of respondents in the Jackson study claimed to check their email once an hour while 35 percent said they checked every 15 minutes, but they were actually checking it much more frequently, about every five minutes, in fact. So it is likely that respondents underestimate the amount of disruption email causes. 

Add Twitter posts, instant messaging, text messaging and other forms of IP-mediated communications, and things will get worse. "Presence" might help, but only possibly. Unified communications providers need to pay more attention to "overload," not "missing a message."

LEOS: Here We Go Again

Google has agreed to back a satellite broadband access service in Africa, Asia and South America

within 45 degrees of the equator or half the world’s surface, CommsDay reports. Google is working with  HSBC and Liberty Global and O3b Networks to construct and operate a fleet of 16 low-Earth-orbit satellites. Service activation is scheduled for late 2010. 

The project aims to offer low latency Internet backhaul for 3G and WiMAX deployments, as well as satellite-based broadband services.

It isn't the first time lots of capital has been thrown at the idea of LEOS systems. Teledesic proposed just such a system in 1990. Teledesic's original proposal aimed to build a huge network costing over $9 billion and using 840 active satellites. In 1997 the scheme was scaled back to 288 active satellites was later scaled back further.

The commercial failure of the similar Iridium and Globalstar ventures (composed of 66 and 48 operational satellites, respectively) and other systems, along with bankruptcy protection filings, were primary factors in halting the project.

The satellites will offer speeds of up to 10Gbps with a combined total capacity of the constellation in excess of 160Gbps, the company says. The system will cover Asia, Africa and South American countries located within 45 degrees of the equator.

The three initial partners have injected an initial investment of $65 million into O3b. The total costs of the project is expected to sum up to $750 million. 

The difference this time around is that backhaul is a bigger market than in was in 1990. That, more than direct-to-user services, might be the key to success, this time around.

Google Antitrust Action Coming?

It looks increasingly likely to some observers that Google is about to get a taste of the antitrust scrutiny Microsoft has had to deal with. The Justice Department probably is going to bring an antitrust suit against Google, experts are beginning to say. The Wall Street Journal has reported that DOJ has hired renowned antitrust lawyer Sanford M. Litvack to take a closer look at Yahoo's deal to outsource search to Google.

Welcome to Microsoft's world. 

Millennials Drive Parental Purchases

Millennials (16-27 year olds) in Europe and the Middle East have huge influence on buying of broadband and TV services purchased by their parents, even when the Millennials do not live at home with their parents, a survey conducted by Motorola indicates. The majority of respondents stated that they influence the broadband (83 percent) or TV services (84 percent) purchased by their parents, even if they do not live at home.

The new study of over 1,200 Millennials from five countries in Europe and the Middle East also found that young adults are passionate about being in control of their rich media content and are heavily influencing older generations. So while it is important to understand and meet the needs of Millennials as the future drivers of demand, it is worthwhile to remember that Millennials also drive current buying.

About 66 percent would be interested in pausing TV in one room and restarting it in another. This compares to 86 percent of respondents in the United States when Motorola surveyed U.S. respondents earlier this year. And though lots of attention now is directed at delivering high-quality video using the Internet and then displaying that content on a TV, almost one in three (32 percent) prefer to watch programs on their PC rather than TV set.

Significant numbers of respondents want to be able to access full-length movies and their favorite shows using a mobile device, possibly by side loading. About 81 percent of respondents indicated strong interest in having the ability to move content from a set-top at home to a mobile device.

About 75 percent indicate that watching movies while travelling also is appealing. But there is an apparent appetite for shorter items as well. About 62 percent would be interested in watching 15-minute mobile versions of 30-minute TV programs and 61 percent would be interested in three-minute versions of their favorite shows on their mobile devices.

“Technology is the lifeblood of this generation. Millennials feel that their personal lifestyle would change dramatically without internet access. It is not surprising therefore to see their influence on technology purchasing for the home,” said Joe Cozzolino, corporate vice president and general manager, Motorola Home & Networks Mobility EMEA. "By understanding the needs and desires of this generation, Motorola is able to design and customize solutions for our customers that enable them to deliver rich media experiences to today’s and tomorrow’s consumer.”

Some 63 percent of respondents acknowlede that their demands and expectations for rich media experiences are higher than those of their parents, partcularly in the area of interacting with what is on the screen:

Over half of those surveyed would like to be able to interact with their TV and accessing information about the content they are watching. About 68 percent would be interested in learning about and possibly purchasing items featured in TV shows, with the highest appetite coming from the UAE where 81 percent of the sample expressed interest in doing so.

High-definition TV is popular throughout all markets surveyed, especially in Germany and the UAE with 53 percent and 58 percent saying they "love" HD content

About 43 percent of respondents have an HDTV set; the United Kingdom having the greatest market penetration with 54 percent owning an HDTV set. Of the 57 percent of total respondents who do not presently have an HDTV set, only a quarter said they did not want to get one.

DVRs: Consumers Really Love Them

More than 80 percent of U.S. digital video recorder users surveyed by Consumer Analysis Group say they could not live without their DVRs. Respondents also said that DVRs were the second-most-indispensable item of household technology, behind only the mobile phone.

The number of DVR households in the United States will pass 30 million in 2008 and climb to 48 million in 2012, says Consumer Analysis Group. At that point more than 40 percent of U.S. households will have a DVR.

The average DVR owner surveyed watched 4.7 hours of television per day, over one hour per day more than the 3.7 hours viewed by adults surveyed in June 2008 by The Media Audit, says eMarketer. 

DVR user TV viewing generally rose with age. Respondents under 30 watched an average of 3.7 hours daily, while middle-aged TV viewers had the TV on for as long as 5.4 hours, eMarketer notes.

U.S. Broadband Will Break 90% This Year, Among Internet Users

At current growth rates, broadband penetration among active U.S. Internet users should break 90 percent by the end of 2008, predicts Leichtman Research. Overall, broadband penetration is 57 percent of U.S. households, but was well over 80 percent of Internet users at the beginning of the year.

TW Telecom Sees Some Weakness

TW Telecom hasn't yet reported its quarterly results, but has warned that although it continues to experience strong sales, it has experienced pressure on its revenue growth in the first half of the year, caused by disconnects by customers in the mortgage industry and from very small customers, as well as economy-related pressure in its Midwest region. 

"These pressures continue," the company says. TW Telecom says it also is seeing potential extension of the impact of the slowing economy into its Southeast region and certain individual markets in other regions, based on results to date for the quarter. 

In addition, the company warns it may experience an increase in very small business customer churn in the third quarter due to the  disconnecting non-paying customers.

TW Telecom  expects continued long term revenue growth, but with possible further downward pressure in the near term. 

Business Transformation Now Crucial, Says IBM

The challenges communications service providers face also seem to be seen as crucial by midmarket CEOs. Recent surveys of telecom industry executives have found them focusing top attention on changing business models. It now appears that sentiment is widely shared.

In a global marketplace, it's all about change, say midmarket CEOs recently surveyed by IBM. About 74 percent of midmarket CEOs "plan to substantially change their business models over the next three years, versus 69 percent of the overall sample," IBM says. The big takeaway? Nearly 70 percent of CEOs say they have to change their business models. 

"They told us that this is partly because they are finding it increasingly difficult to differentiate their companies through products

and services alone, and partly because technological advances have given them many more options," IBM says. 

Of those executives that plan to substantially change their business models, 33 percent are focusing on enterprise model innovation,   addressing new markets and customer segments. 

Another 22 percent of midmarket CEOs are engaging in revenue model innovation. One respondent, for example, is focusing on “new services to existing customers” and “new ways to sell and price,” while a second aims to shift from a “transaction-based” pricing regime to a “fee-for-service” model that is “more value-based.”

Similarly, 23 percent are undertaking industry model innovations. The vast majority of these respondents plan to redefine the industry

in which their companies are operating. Surprisingly, however, 39 percent of this group aims to create entirely new industries, IBM says. 

Mid-market CEOs also say they are struggling to keep up with an environment where consumers are now dictating the pace of change, where formerly they were the ones in control. “Change in the organization is not happening fast enough. The gap is widening,” one Dutch midmarket CEO told IBM researchers. 

In 2004, market factors (such as variations in customer purchasing patterns, growing competition and industry consolidation)

dominated the boardroom agenda. Today, however, midmarket CEOs have to focus on a much broader range of concerns, IBM says. 

Market factors remain their top priority, but access to people with the skills they need, regulatory compliance, technological factors and globalization also weigh heavily on their minds. Regulation is a source of particular anxiety. About 37 percent of midmarket CEOs think it will bring major changes, compared with just 30 percent of the total survey population.

Globalization is creating many more challenges for mid-market enterprise executives. Rather than being able to concentrate their efforts on a few specific issues, midmarket CEOs must now cover a much wider front and cope with much greater uncertainty. They must “master complexity,” as one respondent put it.

Mid-market CEOs plan to channel more than 22 percent of their budgets into meeting the needs of information omnivores. Most companies are focusing on the development of “the next generation of products” and services, and “how to attract” these customers, as one respondent put it.

Markets Have Changed; Regulatory Tasks Must Follow, FCC Says

Predictably, the Federal Communications Commission's decision to remove some mandatory reporting by some leading telcos (AT&T, Verizon, Qwest, Frontier and Embarq) is seen by some public policy advocates as a blow to consumer welfare. Under new rules, and after a two-year phase-in, those carriers can stop reporting network reliability, customer satisfaction and infrastructure investment data. 

AT&T, Verizon and Qwest will continue to file price, revenue, and total cost information necessary to achieve the goals of price cap regulation, though. But the FCC argues that some data, used in a monopoly environment to monitor customer welfare, are not needed in competitive markets, especially when the rules are not applied universally, on cable operators, for example. 

Though one can disagree about the thesis that competition itself forces contestants to maintain and improve the quality of their offerings and the quality of their customer service, market forces arguably already have forced all contestants to ramp up the quality of their service. Consumers have choice, and are exercising their freedom to abandon providers and choose others. 

That is not to say markets now are perfectly competitive. Nor can one argue that markets always will remain robustly competitive. The outcome of competitive markets is that winners get stronger and losers go out of business. Over time, the inevitable logic of competition is therefore less competition. So the need for oversight does not disappear. 

But it does not make sense to burden competitors with reporting requirements that have real costs, when monopoly markets no longer exist, and the abuses that the rules originally were intended to prevent, are prevented by consumers with choice.

Reporting imposes real costs on businesses. Many smaller firms, with no market power, report that their annual reporting costs for Sarbanes-Oxley compliance alone cost between three quarters of a million and a million dollars a year. That isn't to say Sarbanes-Oxely was anything but a well-intentioned attempt to prevent abuses. Still, burdening companies with compliance costs is not an unalloyed good thing. It raises costs of doing business at a time when costs are a major concern in the communications business, precisely because of intense competition. 

U.S. Government Now on IPv6

Lots of entities, despite the inevitability, have incentives to drag their feet on a transition to Internet Protocol version six (IPv6) as long as possible, the simple reason being the need to replace virtually 100 percent of their existing router infrastructure. At the beginning of June 2008, all U.S. government networks were required to migrate to IPv6, however. 

Many observers have expected U.S. government conversion to prime the pump for U.S. adoption of the new standard, which provides virtually unlimited address space, compared to the IPv4 standard now in widespread use. 

Created by the Internet Engineering Task Force in 1998, IPv6 replaces IPv4, which supports 4.3 billion individually addressed devices on the network. Under a White House policy directive issued in August 2005, all federal agencies had to demonstrate the

ability to pass IPv6 packets across their backbone networks by the June 30 deadline.

It wouldn't be the first time the U.S. government has primed the pump for the Internet. Without the U.S. government, there might not have been an Internet, it can be argued. 

Ouch! "DSL is the New Dial Up"

Ouch! "We are starting to see DSL become the new dial up," say analysts at Strategy Analytics. "The telcos' core DSL offerings are unable to compete effectively with cable; they must step up their already frenetic fiber roll out to stay in the game, says Ben Piper, Strategy Analytics director.

That might be overstating the case, but there is no doubt that a dismal second quarter broadband access performance is very troubling for the major DSL providers in the U.S. market. It was not an easy quarter, by any means, but new broadband accounts have been decelerating for at least a year, as the market starts to saturate. 

Broadband access providers collectibvely added only one million net additional subscriptions in the second quarter, compared to over two million in the first quarter, says Piper.

"The dramatic downturn in the quarter is largely attributable to a slowdown of `new connects,' as well as consumer migration from DSL to cable," says John Lee, Strategy Analytics analyst. "As users become more accustomed to high speeds at the office or elsewhere, they are less willing to tolerate slow performance in the home."

If it turns out that is the case, it would be very bad news for the major telcos indeed. But I doubt that is the case. One doesn't typically see a major shift in demand (an order of magnitude shift) in a single quarter. That suggests to me something other than a demand shift has occurred. Marketing inattention, or inadquate attention to the value proposition seem more likely culprits. I could very well be quite wrong about this, of course. 

Maybe something I've never seen before has happened. Maybe a radical, sudden shift in end user demand has occurred. It just doesn't seem like the most-likely explanation, and I'll stick with Occam's Razor: "All other things being equal, the simplest solution is the best."

And the simplest solution is that marketing staffs took their eye off the ball. 

3 of 4 Presidential or VP Candidates Generate Twitter Traffic

It is a commonplace and probably largely accurate observation that younger users avail themselves of Twitter more than older users. Most people might therefore make the assumption that backers of Barack Obama twitter more than backers of John McCain. 

That probably is true as well. But if an analysis of Twitter messages during the recent Democratic and Republican conventions is correct, there must have been lots of younger viewers.

Except for when Joe Biden was speaking, John McCain, Sarah Palin and Barack Obama generated fairly high and comparable levels of activity, according to Twitter. 

That implies nothing about "support" or anything else, simply interest (or "outrage" or whatever you want to imply about what you think people were saying).