Broadband Definitions for ARRA Proposals Set at 768 kbps Downstream and 200 kbps Upstream

"Broadband," for purposes of applying for grants or loans under NTIA or RUS broadband stimulus programs, in 768 kbps in the downstream, and 200 kbps in the upstream. As with every other specific rule, this is a minimum, not a maximum.

The provision seems designed to allow different platforms, with different capabilities, to be used. Also, the definitions will allow satellite and wireless broadband networks to qualify.

It probably will not hurt if a particular network has the ability to scale to higher speeds gracefully, either.

First Broadband Stimulus Applications Can be Submitted July 14

The first "broadband stimulus" proposals to either the NTIA or RUS will be accepted starting July 14 and applications will be accepted until August 14.

The Notice of Funds Availability runs about 120 pages so I have to read it first before I can say anything else!

Lower European Mobile Prices Start Today

New price curbs on the cost of using a mobile phone while outside a home state in the European Union took effect today.

The price for a roaming text has fallen to EUR0.11, from around EUR0.29.

Downloading data while roaming now costs a maximum of EUR1 per megabyte at the wholesale level compared with previous costs of about EUR1.68.

An earlier price cap of EUR0.46 per minute for an outgoing voice call has also fallen to EUR0.43, while the cap on voice calls received abroad has fallen from EUR0.22 to EUR0.19.

In addition, mobile operators have been forced to charge for calls by the second after the first half minute, instead of rounding up to the nearest minute, whilst operators must introduce per-second billing from the first second for calls received abroad.

The caps will further fall to EUR0.39 for calls made and EUR0.15 for calls received while roaming from 1 July 2010, and to EUR0.35 and EUR0.11 from 1 July 2011.

59% of WiMAX Providers Expect to Offer VoIP By 2011

Some 59 percent of respondents to a recent Infonetics Research survey globally plan to offer VoIP over WiMAX services by 2011.

As always is the case, market considerations are key. Attackers, with no legacy voice revenues to cannibalize, will be more eager to do so. Providers with large revenue streams to protect will be less likely to do so.

Of the operators surveyed, 41 percent are from Asia Pacific, 36 percent from Europe, the Middle East, and Africa (EMEA), 18 percent from North America, and five percent from Central and Latin America (CALA).

Generation Z: Shift Happens

Though there's a bit of imprecision about the terms Generation X, Y and Z, their behavior is closely watched for obvious reasons: at some point relatively soon, they will start to represent the center of gravity for most products and services.

Generation Z, people roughly born between 1995 and through 2000s, have some characteristics in common with Generations X (roughly born between 1965 and 1980) and Y (roughly born between 1980 and 1994). We perhaps make too much of the precise delineations. But some behavioral trends seem common to all three "generations."

They don't read newspapers.

They tend not to watch scheduled TV, and some would note that even when TV is available, it isn't being "watched," as users are multitasking. They also often have access to digital video recorders and Internet video so "appointment television" doesn't make as much sense to them as it might for older viewers.

They tend to rely on mobiles for voice communications, and in any case texting is an equally dominant behavior.

They tend to trust their peers, even unknown peers, more than they trust experts.

They are used to iTunes, so paying for digital content, or watching some ads to get content at a reduced rate, or for free, might not strike them as unusual.

They are social in a digital way. Communication with “friends” is a primary activity.

Though they might not admit it, brands are important.

To a greater extent than older consumers, they expect to be able to move digital content from platform to platform. In part, that is simply because they know digital content can be moved from device to device.

They use instant messaging or text messaging for communications, they think that email is for their parents.

In part because they have grown up with Web media, mobiles and the Internet, sharing content seems natural.

Most of those behavioral traits have implications for marketing in general, and for Internet and mobile marketing in particular. For starters, new media require new rules and tactics. Each new medium has characteristics that are not well understood at first. That is why early movies essentially were filmed versions of stage plays.

Over time, each media becomes better understood, production values and marketing opportunities change.

Even traditional TV ads do not work as well as they used to, in part because, as media become more personalized, non-relevant messages become ever more annoying.

Also, perceptions of honesty are more important. All three generations have been bombarded from birth with marketing messages and they are fairly adept at tuning them out.

And since social values are strong, advertisers, for example, will have to truly commit to becoming a members of the communities. As a practical matter, that means brands essentially have lost control of their brands, which in many ways are defined by users.

That will be scary, in part because in the new social context, people will criticize what they don't like. Worse, they may simply indicate, by lack of interest, that a particular product is not interesting or relevant.

It's all about "pull," rather than "push," in other words. But since nobody really knows what will work in the new formats, experimentation is required. It will be a big shift.

But as has been said before, "shift happens."

Mobiles More Important than PCs, Study Finds

One reason lots of observers expect mobile broadband to grow in importance is that younger users rely on their mobiles more than PCs.

Or so suggests a new study by Toronto-based SRG. In that study, the mobile device was ranked the most important device by females between the ages of 12 to 24.

That doesn't mean women in other demographics rank mobiles the same way: they don't, yet.

But as some of us have noted for a while, it is important to follow the "youth" demographic because it isn't just a market segment.

Younger users represent 100 percent of the future market. And if younger users behave differently than older users, one has to pay attention. At some point, those younger users will move into different age groups, but likely will retain their behaviors.

Online Usage: Social Networking Grows Most

Users spend more time using social networking sites, less time on communications and more time on content sites in early 2009, compared to 2003, according to the Online Publishers Association.

Users also spend slightly more time using search and slightly less time on commerce sites.

It isn't yet clear how mobile Internet time spent matches up, but anecdotal evidence suggests that the trends should roughly match.

Not many of us would be surprised if use of social networking sites was higher on mobile devices, as a percentage of total mobile Internet time spent.

Click the image to see a larger view.

Network Services Generally Safe, But Only if Economy Does Not Worsen

Consumers say they are least likely to cut or reduce spending on Internet access and most likely to cut back on buying pay-per-view movies downloaded over the Internet, according to a new survey by Alcatel-Lucent.

Consumers also indicate they are likely to maintain spending on VoIP and multi-channel TV services.

They also indicate some other services, including mobile service and landline voice are less likely to be cut than other discretionary spending.

The findings are in line with past behavior during recessions. People say they are highly likely to reduce spending on such things as going out to bars and clubs, eating at restaurants, going to sporting events or renting movies.

But they are resistant to the idea of eliminating communication or entertainment video services. All that depends on the recession not growing worse, though. Should the economy deteriorate further, even network services will get a harder look.

About 29 percent say they will increase spending on communications when the economy improves. But 13 percent say they plan to reduce communications spending even when the recession is past.

At least at the margin, it appears there is some potential for permanent changes in communications spending even after the recession ends. And that always is a concern. People might change behavior during a recession as a temporary measure, but then discover the new behavior suits them, and not return to their pre-recession behaviors.

There's no way to tell, yet, how much that will happen this time. But it would not be unreasonable to predict some permanent changes.

Ads Won't Support Online TV Business

Too many media-related companies mistakenly believe their conventional advertising, subscription or even free business models will simply transfer over to a connected marketplace. They won't, says Diane Mermigas, Mediapost columnist.

But that's a mistake common to other industries buffeted by IP technology, such as the telecommunications, wireless and music industries, for example. The entire global telelcommunications business, for example, is finding itself facing a nearly-complete replacement of its underlying voice revenue model.

Media firms face something similar. Advertising has been 37 percent of all content revenues, and nearly half of all video revenue.

But advertising is expected to comprise only one quarter of domestic online video revenue by 2012. "The economics are simply not there for advertising to support online video, given rising variable costs and limited scale," says UBS analyst Matthieu Coppet.

There are some other, less quantifiable potential issues as well. Most believe online distribution will be more important in the future. The only issue is how important, and how long the change takes.

At the same time, cable TV's key value proposition--more choice--now is running into potential exhaustion. "Choice" is easier on the Internet.

Also, since most viewers watch a handful of channels (possibly seven to 16), adding more channels, and raising prices to match, is going to run out of gas. It seems to me the only issue is when.

There's a reason so many of us spend so much time thinking about evolving business models. If IP technology affects your core business, it also means your core business is going to face huge business model change.

http://seekingalpha.com/article/145967-media-must-start-anew-mine-connectivity?source=feed

Dumb Ideas for Saving Newspapers

Be worried, very worried, when attorneys supposedly quite familiar with the First Amendment to the U.S. Constitution (free speech, freedom of the press, he right to assembly, the right to petition the government, no prohibition on free exercise of religion) actually propose legally restricting free speech.

First Judge Richard Posner proposes rewriting copyright law to outlaw linking to and summarizing news stories. No summarizing? It's hard to talk about an idea without at least mentioning what the idea is.

Now we have "First Amendment" attorneys seriously proposing that copyright law be changed so that a newspaper’s story could appear only on its own Web site for the first 24 hours before it can be aggregated or retold. So a story about protesters on the streets of Tehran could not be summarized for full 24 hours.

Muddle-headed thinking will not save an old media form that is being supplanted by other new forms. Were it just muddle-headed, it wouldn't be so bad.

It's evil in banal disguise.

http://seekingalpha.com/article/145926-newspapers-vs-aggregators-understanding-the-economics-of-the-internet?source=feed

Bar Linking? More Silliness!

United States Court of Appeals judge in Chicago Judge Richard Posner has suggested that linking to copyrighted material should be outlawed. The suggestion was offered as a possible way to stem the newspaper financial decline.

Though many will find the suggestion odd, and others will cringe at the potential implications for many other Web applications, the concept illustrates just how disrupted content ecosystems now are becoming.

Ignore some obvious and glaring questions about abridgements of free speech rights. Ignore the essential silliness of banning the equivalent of footnotes.

Ignore the analogy to efforts other content owners once made--seriously--to bar the use of VCRs, or to tax sales of blank tape. Ignore damage to "fair use" concepts.

Focus simply on what the suggestion implies about business ecosystem disruption. As in the past, new media are disrupting older media. And as has been the case in the past, some suggest ways of restricting new media to protect the old.

It won't workIt's just silliness.

http://www.becker-posner-blog.com/archives/2009/06/the_future_of_n.html

Will Recession Behavior Stick? Will it Matter?

A serious, protracted economic crisis can result in changes in consumer behavior that persist after the end of the crisis. "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," Best Buy CEO Brad Anderson said in

the thrid quarter of 2008.

And that is what executives in the telecom, wireless and video industries are watching intently these days.

People make what they think will be merely temporary adjustments in their consumption behavior but may discover that they like elements of their new consumption pattern. For some incumbents, this could reset demand curves.

For others, there is an unusual opening: a chance to take share on a permanent basis that did not exist prior to the recession. So far, there are few tangible signs of overt change, with one exception: prepaid wireless.

Incumbent telcos continue to see landline voice erosion, but that trend predated the recession and is not directly attributable to demand changes caused by the recession. Some recent surveys of consumer attitudes suggest a willingness to consider downgrades or termination of virtually any service, but service provider reporting so far does not show that attitudes have been followed by action.

New technologies and end use behaviors complicate the analysis. Much as the Telecommunications Act of 1996 aimed to change the nature of competition in the U.S. voice market, but largely was eclipsed by other simultanteous changes in IP technology and applications, so we might ultimately discover that the longer-term changes in other areas eclipse recession-driven effects.

Behavior might well change, but not because of the recession.

All Content Online, but Ad and Fee Models Don't Work: That's a Problem

It's hard to say which prediction is more far reaching: that all content will be online in 10 years; that portions of the advertising business are shrinking; that for-fee and ad-supported content models have not worked well; or that nobody but Google seems able to make money from digital content.

But Microsoft CEO Steve Ballmer argues all are true. And all are related trends. If all content is online, and if much content is ad-funded, then less ad funding or lower rates means less available professionally-produced content.

If ad support does not support the online equivalent of offline channels, then new revenue models have to be created, or less content will be made available.

One might argue this is "just a traditional media" problem. But it's a problem for users who want online access to virtually all the offline content they now enjoy, for telecom service providers who must supply the additional bandwidth and for all the media-related industries that depend on advertising as a business model.

Of Ballmer's predictions, the least controversial is that a shift away from offline media and towards online formats is underway. The global advertising economy--at least the portion that has been allocated for traditional media--has been permanently "reset" at a lower level, Ballmer warns.

So traditional broadcast and print media will have to plan their business models around a smaller share of the advertising market, as revenues continue to move to digital outlets, Ballmer argues.

"I don't think we are in a recession, I think we have reset," he said. "A recession implies recovery [to pre-recession levels] and for planning purposes I don't think we will. We have reset and won't rebound and re-grow."

Few likely would contest the trend towards online content, or the fact that few companies aside from Google and the Wall Street Journal have managed to create interesting ad-supported or fee-supported online businesses.

Most would be comfortable with the notion that traditional content and social media are blending, in many cases. There might be some dispute over the mix, the amount or the timing, but the direction is clear enough.

The big problem for consumers and producers is the inability to create widespread online content business models based on fees or advertising. That's the biggest challenge.

http://www.guardian.co.uk/media/2009/jun/24/microsoft-steve-ballmer-cannes

What Will Drive Consumer Demand for 50 Mbps Service?

While next-generation broadband speeds will increase dramatically to 50 Mbps, 100 Mbps, or even 1,000 Mbps, just seven percent of European online households will pay more for higher speed, says Forrester Research analyst Ian Fogg.

"Next-gen broadband will not be such an easy sell, as there's little pent-up speed dissatisfaction," at least not yet, says Fogg.

Evidence from the U.S. market tends to confirm that thesis. Not many consumers seem inclined to buy 50 Mbps service where it is available. Aside from the higher cost, there is no new application that compels such purchases, with the possible exception of households where are multiple users who tend to be online at the same time, sharing a connection and using high-bandwidth applications frequently.

Put simply, email drove dial-up access and the Web drove broadband access. It isn't yet clear whether video will prove to be the application that drives demand for higher-speed connections, but most people seem to think it will be.

Fogg is right: the next wave of high-speed access adoption will be driven by a compelling new application, just as dial-up and lower-speed broadband was driven by the graphically-rich Web.

Best Buy Hopes to be Bigger Force in Mobile Phone Business

Best Buy Co. is planning to open 40 standalone mobile-phone stores this fiscal year and hopes the move will help it quintuple its share of the U.S. mobile-phone device sales market to 15 percent.

Mobile phones are a crucial component of the company's new sales campaign to focus on gadgets that feature "connectivity." That view is part of an overall trend of recent years: more of the commercial value of any piece of hardware is the services stream attached to it. Likewise, more of the value attached to any piece of software is the services that are associated with it.

Best Buy's phone sales share has grown 1.6 percentage points in the past two years and now has about three percent share of new phones and connectivity plans sold.

http://online.wsj.com/article_email/SB124586883031248947-lMyQjAxMDI5NDI1NTgyNjU4Wj.html