Pandemic Would Impair Residential Broadband, GAO Says

In a serious pandemic, residential Internet access demand is likely to exceed the capacity of Internet providers’ network infrastructure, says the Government Accountability Office. That means enterprise and government disaster recovery efforts that depend on residential broadband connections may not work as planned, GAO warns.

In a serious pandemic, U.S. businesses, government agencies and schools could experience absenteeism (or forced dispersal of workers as precautionary measure) that could reach 50 percent or higher ranges, thereby displacing Internet access demand from normal daytime sites to homes, says the Government Accountability Office.

But residential broadband networks are not designed to handle this unexpected load, and could interfere with teleworkers in the securities market and other sectors, according to the Department of Homeland Security.

Oddly enough, robust network neutrality measures, such as forbidding any prioritization of bits, could render impotent one obvious way of handling the sudden explosion of traffic.

"Private Internet providers have limited ability to prioritize traffic or take other actions that could assist critical teleworkers," GAO says. "Some actions, such as reducing customers’ transmission speeds or blocking popular Web sites, could negatively impact e-commerce and require government authorization."

In other words, laws and rules that forbid "packet discrimination" would impair ability to prioritize more-important work-related uses of the residential Internet.

"Increased use of the Internet by students, teleworkers, and others during a severe pandemic is expected to create congestion in Internet access networks that serve metropolitan and other residential neighborhoods," GAO warns.

"Localities may choose to close schools and these students, confined at home, will likely look to the Internet for entertainment, including downloading or 'streaming' videos, playing online games, and engaging in potential activities that may consume large amounts of network capacity," GAO says.

"Additionally, people who are ill or are caring for sick family members will be at home and could add to Internet traffic by accessing online sites for health, news, and other information," GAO adds. "This increased and sustained recreational or other use by the general public during a pandemic outbreak will likely lead to a significant increase in traffic on residential networks."

"If theaters, sporting events, or other public gatherings are curtailed, use of the Internet for entertainment and information is likely to increase even more," GAO says. At-home workers will only compound the problem.

Oddly enough, the mechanisms ISPs could use to prioritize bandwidth so that a suddenly-scarce resource can be managed are precisely the tools strong "network neutrality" forbids.

"A provider could attempt to reduce congestion by reducing the amount of traffic that each user could send to and receive from his or her network," says GAO. "Such a reduction would require adjusting the configuration file within each customer’s modem to temporarily reduce the maximum transmission speed that that modem was capable of performing—for example, by reducing its incoming capability from 7 Mbps to 1 Mbps."

"However, according to providers we spoke with, such reductions could violate the agreed-upon levels of services for which customers have paid," GAO points out.

And that is even before any new regulations that specifically would outlaw packet shaping that could, for example, limit video streaming, gaming, and peer-to-peer and other bandwidth-intensive applications during daytime work hours, when teleworkers will have an arguably greater need to maintain functioning connections for voice and data operations essential to their work.

Overly-casual positioning of the need for "packet equality" rules can be dangerous, as the GAO points out.

Google Blocks Calls to About 100 High-Cost Telephone Numbers

Google says that although it still blocks use of Google Voice to terminate calls to fewer than 100 U.S. telephone numbers with unusually high termination cost, it still does so. Earlier, Google Voice had been blocking calls to thousands of numbers in some exchanges.

In a letter to the Federal Communications Commission, Google says a June 2009 study it conducted found that the top 10 U.S. telephone prefixes Google Voice was terminating accounted for 1.1 percent of its monthly call volume, about 161 times the expected volume for a "typical" prefix. That 1.1 percent of calls also accounted for 26.2 percent of its monthly termination costs.

Google says terminating those calls costs as much as 39 cents a minute. Google therefore blocked Google Voice calls to less than 100 U.S. telephone numbers, based on that study.

The difference is that where Google had before only been able to block calls to prefixes, it now can block specific telephone numbers with highly asymmetric traffic typical of free conference call services, for example, which never place outbound calls, but simply receive them.

Will Telecom Markets Grow in 2010?

Worldwide telecom spending will decline four percent in 2009 with revenue of nearly $1.9 trillion. In 2010, telecom spending is forecast to grow 3.2 percent, say researchers at Gartner. The question lots of people logically will have is what pattern growth in U.S. enterprise and smaller business markets will take.

Qwest provided some anecdotal evidence during its third quarter earnings report. "As far as the activity in BMG and wholesale, I would say, yes. we are seeing some quicker decision making," says Teresa Taylor, Qwest COO. "Quicker decision making" is a sign of more buying intent and activity, as longer decision cycles represent less intent and activity.

Qwest's business markets group sells to enterprises, so the anecdote suggests enterprise demand, at least for Qwest, is growing. Business markets segment income of $409 million was flat, compared to the second quarter, but increased 11 percent year over year.

The caveat here is that Qwest believes it has been doing better than AT&T and Verizon over the last couple of quarters. All Taylor will say that trends are "positive."

Verizon to Debut Motorola Droid Nov. 6, 2009

Verizon Wireless will take the wraps off its new "Droid" device, built by Motorola, on Nov. 6, 2009. The new device will feature a 3.7-inch high-resolution screen featuring more than 400,000 pixels total, more than twice that of the "leading competitor," Verizon says.

The Android operating system supports running of multiple applications at once, and allows toggling between as many as six simultaneous applications. Google searches can be conducted using voice input and results are location dependent. Content on the phone, such as apps and contacts plus the Web can be searched using the search box.

"Push" Gmail is supported, as is "push" Microsoft Exchange email. "Google Maps Navigation" provides turn-by-turn voice guidance as a free feature of Google Maps.

Droid will be available in the United States exclusively at Verizon Wireless Communications Stores and online for $199.99 with a new two-year customer agreement after a $100 mail-in rebate.

Customers will receive the rebate in the form of a debit card; upon receipt, customers may use the card as cash anywhere debit cards are accepted.

Customers will need to subscribe to a nationwide voice plan and an email and Web for plan. Nationwide voice plans begin at $39.99 for monthly access for 450 minutes and an "Email and Web for Smartphone" plan costs $29.99 for monthly access.

Consumption-Based Billing Coming?

Sandvine has released Usage Management 2.5, a software solution that enables fixed-line network operators to implement consumption-based billing models, real-time subscriber communications and multiple service plan tiers. The move is significant as it suggests retail pricing might move in that direction in the future, representing a major shift in retail pricing models.

Historically, consumption-based billing has been problematic for Internet service providers. Time Warner Cable tested and then decided not to implement metered billing earlier in 2009 after widespread consumer resistance to tests in in Rochester, N.Y., Austin and San Antonio, Tex., and Greensboro, N.C.

User behavior also is powerfully affected by billing methods. At one point in time America Online charged users by the minute for their dial-up Internet access usage. When it converted to flat fee billing, usage and subscribers exploded, and AOL became the largest U.S. ISP.

Similar results have been seen when other types of services, such as voice calls, also moved from per-minute to flat rate or "buckets" of usage. Generally, users spend more time talking or using the Internet when they are not metered for that usage.

Mobile voice services have a half-way approach that combines usage limits with much of the perceived freedom users feel when they are not charged strict per-minute charges. Such "buckets" of usage are a likely direction much retail Internet access pricing will move as bandwidth-intensive applications become more important and if new "network neutrality" rules forbid ISPs from shaping overall demand at times of peak congestion.

The alternative to traffic shaping then would shift to other measures such as increasing raw bandwidth or providing incentives for users to limit their consumption at peak hours. The former obviously requires more investment, which then would have to be reflected in higher prices, while the latter would allow for more gradual investments and therefore stable or more slowly increasing prices.

One problem today is that few consumers have any idea how much bandwidth they use. The new Sandvine tool would simultaneously allow users to monitor and understand their own behavior, as well as provide ISPs with better ways to create plans matched to end user behavior.

The Sandvine tool also would help ISPs create quality-sensitive service or personalized plans, assuming Federal Communications Commission or Congressional rules allow them to be offered.

Wirefly’s Top 10 Most-Anticipated Cell Phones

In a major change, the top-two "most anticipated" new mobile devices are made by Motorola. That hasn't happened for quite some time, and will be a huge test of Motorola's decision to rely on Android as its ticket back into the top ranks of manufacturers of "hot" devices.

The launches are equally important for mobile service providers, who have found devices to be primary ways of differentiating their services. We'll have to see, but it is possible, perhaps likely, that a key new feature of the top-two Android devices will be their methods of integrating contact information and status updates across applications. That's an angle on "unified communications" we have not seen so much in the mobile arena.

Here's Wirefly's ranking and commentary.

1. Motorola Droid (Verizon Wireless) - The most anticipated cell phone launch of the season is just days away, but the hype for this the Motorola Droid smartphone has been building for quite some time.  Verizon Wireless has invested heavily in a national “teaser” marketing campaign, while keeping the details about this Android-based device close to the vest.  The Droid is the first commercial phone released with the new Android 2.0 platform, and has been dubbed the “iPhone killer” by many a technology-writer.  Verizon Wireless is stoking the fire with a campaign that touts all the things the Droid does that the iPhone doesn’t – from running multiple apps, to a full slide-out keyboard, to changeable batteries and memory to a 5.0 megapixel camera that takes photos in the dark.

2. Motorola CLIQ MB200 (T-Mobile) - The highly-anticipated Motorola CLIQ is the new king of the T-Mobile Android smartphone lineup, and the first since the original G-1 to have a full slide-out keyboard.    What really makes it buzz-worthy, though, is that it utilizes the new MotoBlur user interface that syncs your social media, contacts, and e-mail in real time, providing instant access to the latest happenings and messages from friends.  (The Cliq is currently available to existing T-Mobile customers, however, new customers will not be able to purchase the device until November 2nd, and therefore, it still garners a spot on our top picks.)

3. Samsung Moment (Sprint) - Sprint’s second Android device, the Samsung Moment, mark’s Samsung’s entry into the Android smartphone market with a full slide-out keyboard and a first-of-its-kind AMOLED touch screen, providing unprecedented brightness that’s also kind to your battery life.

4. LG Chocolate Touch (Verizon Wireless) – The LG Chocolate is an iconic Verizon Wireless phone, and this new touch version should be even sweeter than its predecessors.

5. Samsung Behold II (T-Mobile) – The Behold II is the sequel to the very successful Samsung Behold but with one MAJOR difference - the latest version runs on the Android smartphone operating system.  The Behold II also features a "cube menu" that provides quick access to six multimedia features at the flick of a finger: music, photos, videos, the Web, YouTube, and Amazon MP3.

6. HTC Desire 6200 (Verizon Wireless) – Verizon Wireless is making headlines with the Droid, but is expected to follow quickly with a second Android-powered smartphone dubbed the Desire.  The Desire will not have a keyboard, and will boast HTC’s touch screen “Sense” interface that has won rave reviews on the HTC Hero.  

7. Sprint Palm Pixi (Sprint) – The Sprint Palm Pixi is being touted as a tiny, sleek webOS-based handset that offers many of the same features and functionality as the Pre without the hefty price tag.

8 . BlackBerry Storm 2 (Verizon Wireless) – This next generation of the touch screen BlackBerry Storm looks similar to the original model on the outside, but boasts notable improvements on the inside such as a Wi-Fi radio, sleeker design, and an improved SurePress typing system.

9. BlackBerry Bold 9700 (AT&T & T-Mobile) –This smartphone is an updated version of the high-end Blackberry Bold that hit the market last year.  It is thinner and lighter with a faster Web browser than its predecessor and replaces the original Bold's track ball with an optical track pad.

10. LG Shine 2 (AT&T) – The successor to the immensely popular Shine; but as its name indicates, it promises to be twice as sleek and sexy.

Real-Time Internet Traffic Doubles

Real-time entertainment has almost doubled its share of total Internet traffic from 2008 to 2009, while gaming has increased its share by more than 50 percent, says Sandvine. Real-time entertainment traffic (streaming audio and video, peer-casting, place-shifting, Flash video) now accounts for 26.6 percent of total traffic in 2009, up from 12.6 percent in 2008, according to a new analysis by Sandvine.

As the percentage of real-time video and voice traffic continues to grow, latency issues will become more visible to end users, and will prompt new efforts by Internet access providers to provide better control of quality issues not related directly to bandwidth.

One reason is that video downloads, for example, are declining in favor of real-time streaming. Downloaded content is less susceptible to latency and jitter impairments.

Traffic to and from gaming consoles increased by more than 50 percent per subscriber as well, demonstrating not only the popularity of online gaming, but also the growing use of game consoles as sources of “traditional” entertainment such as movies and TV shows, says Sandvine.

Gaming, especially fast-paced action games, likewise are susceptible to experience impairment caused by latency and jitter.

.The growth of real-time entertainment consumption also is leading to a decline of peer-to-peer traffic. At a global level, P2P file-sharing declined by 25 percent as a share of total traffic, to account for just over 20 percent of total bytes, says Sandvine.

The changes have key implications for ISPs and end users. One way to protect real-time service performance for applications such as voice, video, videoconferencing and gaming is to take extra measures to protect latency performance for such real-time applications. And that is where clumsy new network neutrality rules might be a problem.

Whatever else might be said, user experience can be optimized at times of peak congestion by prioritizing delivery of real-time packets, compared to other types of traffic that are more robust in the face of packet delay. File downloads, email and Web surfing are examples of activities that are robust in the face of congestion.

So it matters greatly whether ISPs can condition end user traffic--especially with user consent--to maintain top priority for streaming video, voice or other real-time applications when networks are congested. Enterprises do this all the time. It would be a shame if consumers were denied the choice to benefit as well.

Broadband Stimulus Delays Continue

It should not come as any surprise--given earlier delays--that the first project awards under the the American Recovery and Reinvestment Act's "broadband stimulus" program will be late. Some might not happen at all, unless they can adequately document that there is no existing provider able to provide service in project areas.

The program is supposed to allocate $7.2 billion to provide broadband services or training to rural and other underserved communities, through the Department of Commerce’s National Telecommunications and Information Administration and the Department of Agriculture’s Rural Utilities Service.

The problem is that the work load required to evaluate and award funds so vastly exceeds the volume of work either agency has handled in the past. The NTIA must now disburse sums that are about 4.7 times greater than normal, while the RUS faces the task of disbursing amounts 192 times larger than normal.

Those would be challenges under the best of circumstances, so it is no surprise that the first awards may not be made until December, about a month later than anticipated. There are other risks, says the Government Accountability Office, including a lack of funding for oversight beyond fiscal year 2010 and a lack of updated performance measures to ensure accountability for NTIA and RUS.

Some awards might never happen. The program rules relating to new services in "unserved" areas forbid projects in areas already served by existing providers. Comcast and other cable providers believe some projects violate just those provisions. Comcast says it will file supporting data Oct. 28, 2009, supporting its contentions.

The National Cable & Telecommunications Association claims funding has been sought in "hundreds" of areas where its members already provide broadband service.

For Lots of People, This Will Be Unified Communications

Impulse Purchases Key for Mobile Marketing Messages

A significant number of American consumers are interested in receiving opt-in marketing messages, according to a new survey by Harris Interactive. It also appears impulse purchases are prime candidates for mobile marketing messages.

The survey of 2,029 mobile phone users, ages 18 and older shows 42 percent of users between the ages of 18 and 34 and 33 percent of those between 35 to 44 are at least somewhat interested in receiving alerts about sales on their cell phones from their favorite establishments.

Men are more interested than women. About 51 percent of men ages 18 to 34, and 34 percent of women of the same age range are at least somewhat interested in receiving opt-in shopping alerts on their cell phones.

Only one percent of cell phone owners currently receive alerts about sales at their favorite establishments on their phones, yet 26 percent would be at least somewhat interested in receiving such alerts, assuming they were permission-based.

Of those interested in receiving alerts, 53 percent would be at least somewhat interested in being notified about restaurant specials around them.

About 43 percent say they would be interested in getting information about movie or event tickets. About 39 percent are interested in getting weather information, while 37 percent indicated interest in information about clearance sales.

Sizable percentages expressed interest in specific products such as pizza, clothes, fast food, electronics, music, happy hour specials or bar and night club offers.

Impulse purchases seem particularly germane. The survey found that about 90 percent of U.S. adults have made an impulse purchase when they were out shopping in a store, based on a sale or special offer going on around where they were.

Nearly a quarter of adults owning cell phones (22 percent) make this type of impulse purchase at least once per week or more often.

Might Verizon Still Get the iPhone?

Given the direct knocks on the Apple iPhone in Verizon's latest "Droid Does" marketing campaign, there has been speculation that Verizon has given up on any plans it might have had for offering the iPhone on the Verizon network.

But Verizon chairman and CEO Ivan G. Seidenberg surprised observers by saying Verizon has not given up hope of offering Apple's iPhone.

"This is a decision that is exclusively in Apple's court," Seidenberg said on Verizon's third quarter 2009 earnings call. "We obviously would be interested in any point in the future they thought it would make sense for them to have us as a partner."

"We have expanded our base of other devices," explained Seidenberg. "So our view is to broaden the base of choice for customers and hopefully along the way, Apple as well as others will decide to jump on the bandwagon."

Although AT&T's exclusive deal to offer the iPhone in the US is thought to be nearing an end, Verizon Wireless, which uses the CDMA air interface, is viewed by some an unlikely candidate to offer the iPhone, which currently is designed to run on GSM networks.

AT&T's iPhone exclusive is seen as a key factor in differing net new subscriber performance in the third quarter. Verizon Wireless added 1.2 million new mobile customers during the quarter to reach 89 million in total, while AT&T had earlier reported growth of two million net new subscribers, to reach 81.6 million total subs.

AT&T said it activated 3.2 million iPhones in the third quarter of 2009, the company's largest quarterly total to date.

T-Mobile USA Launches Unlimited Prepaid Offer

Given the relative strength of prepaid wireless, and a renewed spate of competition in the segment, it might not be too surprising that T-Mobile USA has launched a new unlimited mobile plan available to customers who do not like contracts.

What might have been disruptive is an extension of such plans to all postpaid customers as well, a move that might have sparked yet another round of price cuts in the postpaid business. But it was a move T-Mobile USA chose not to take.

The new plan offers unlimited talk, text and Web surfing for $79.99 a month to customers who do not want to sign up for a long-term contract, which typically lasts two years.

It will also offer a $50 per month unlimited service for non-contract customers that only want access to voice calls, not text messaging or Web access.

By some measures, the new deal represents a 20 percent discount on T-Mobile's standard unlimited monthly fee for contract customers.

Nobody knows what might have happened had T-Mobile USA launched a $50 per month unlimited voice and data service plan for all customers, but an immediate price war is one likely outcome.

As matters stand, that is unlikely to happen. On its third quarter earnings call, Verizon said Verizon Wireless was unlikely to respond to T-Mobile USA's new offer with a similar one of its own.

That is unsurprising given Verizon's general stance on prepaid, which is that it remains a niche tough to square with Verizon's historic focus on higher-end postpaid customers.

Prepaid accounted for 80 percent of U.S. subscriber growth in the first quarter of 2009, though growth has moderated since then.

Sprint subsidiary Boost Mobile launched a $50 monthly plan in January 2009 and has been matched by the other leading prepaid providers.

On Demand TV "Not So Everywhere"

Comcast Cable subscribers will be able to watch popular cable television series such as HBO's "Entourage" and AMC's "Mad Men" on your computer by the end of the year without paying extra — as long as you're a Comcast Corp. subscriber watching at home.

The initiative is a starting point for Comcast, which hopes to eventually offer what some call "TV Everywhere" service: linear video programming on demand, over any broadband network.

Comcast, wanting to make sure the shows will remain off-limits to non-subscribers, apparently still is working on providing access over competing home broadband systems as well as on the go — at work, on laptops and, one day, over cell phones.

Comcast will be the first cable TV operator to unlock online access to a many cable shows and movies, aiming to replicate what's available on television through video on demand.

Comcast subscribers can initially watch shows and movies only on their home computers after being verified by the cable system. And for now, the online viewing will be restricted to those who also get Internet service through Comcast, and not on any broadband connection.

That might be helpful for Comcast consumers watching on-demand fare at home. It will not be so helpful if those customers would prefer to watch on their mobiles or any other broadband connection.

But it is a start.

Net Neutality: What Verizon and Google Can Agree On

Though there are many issues upon which Verizon and Google disagree, both companies say they agree on some elements of network neutrality.

"For starters we both think it's essential that the Internet remains an unrestricted and open platform. where people can access any content (so long as it's legal), as well as the services and applications of their choice," say Lowell McAdam, CEO Verizon Wireless and Eric Schmidt, CEO Google.

That should come as no surprise. Those rules already are part of the Federal Communications Commission "Internet Freedoms" principles.

Both executives say the current debate about network neutrality is about the best way to "protect and promote the openness of the Internet."

Both executives say "it's obvious that users should continue to have the final say about their web experience, from the networks and software they use, to the hardware they plug in to the Internet and the services they access online."

"Second, advanced and open networks are essential to the future development of the Web," McAdam and Schmidt say. "Policies that continue to provide incentives for investment and innovation are a vital part of the debate we are now beginning."

"The FCC's existing wireline broadband principles make clear that users are in charge of all aspects of their Internet experience--from access to apps and content, so we think it makes sense for the
Commission to establish that these existing principles are enforceable, and implement them on a case-by-case basis," McAdam and Schmidt say.

"We're in wild agreement that in this rapidly changing Internet ecosystem, flexibility in government policy is key," they emphasize. "Policymakers sometimes fall prey to the temptation to write overly detailed rules, attempting to predict every possible scenario and address every possible concern," and that
"can have unintended consequences."

Both executives say "broadband network providers should have the flexibility to manage their networks to deal with issues like traffic congestion, spam, "malware" and denial of service attacks, as well as other threats that may emerge in the future, so long as they do it reasonably, consistent with their customers' preferences, and don't unreasonably discriminate in ways that either harm users or are anti-competitive."

"They should also be free to offer managed network services, such as IP television," both men say.

"While Verizon supports openness across its networks, it believes that there is no evidence of a problem today -- especially for wireless -- and no basis for new rules and that regulation in the US could have a detrimental effect globally," they say. "While Google supports light touch regulation, it believes that safeguards are needed to combat the incentives for carriers to pick winners and losers online."

That isn't to say the two firms have identical interests or views. But as we have seen in prior discussions about net neutrality, there is more room for compromise than sometimes seems to be the case. That undoubtedly will be the case this time around, as well.

Mobile Social Networkers Do More of Everything

“Do we have to build a social network on our own or do we have to invest in an existing one?" asks France Telecom CEO Didier Lombard. "We haven’t decided yet.”

The question itself provides a clue to the growing importance social computing and networking holds for mobile service providers. To be sure, we are at the beginning of a convergence between mobile behavior and social application behavior.

On average, only about seven percent of 16- to 24-year-olds already access social networking sites from their mobile phones, says Forrester Research analyst Thomas Husson.

But that is going to change.  In the United Kingdom, up to 40 percent of 16- to 24-year-olds are already using or are interested in accessing social networking sites from their mobile phones, says Husson.

In addition to accessing social network updates, social computing apps include media-sharing, such as viewing and sharing photos or videos taken from their mobile phones or use microblogging services.

Three percent of European mobile phone owners access blogs from their mobile phones, either to view them, comment on them, or publish them; the same percentage read or post customer reviews and ratings, Husson says.

Five percent of all European mobile phone owners upload photos to the Web straight from their mobile phones, while nine percent of 16- to 24-year-old mobile phone owners do so.

But mobile social networking is growing fast. About 65 million people are now actively using Facebook Mobile, for example, more than tripling its audience in eight months.

Handset manufacturers and mobile service providers also are becoming more active in the mobile social networking arena.

Handset manufacturers are actively partnering with social networking sites to integrate access with specific handsets, making social networking as easy as making a call or sending a text message.

Service operators also are forging their own partnerships for many of the same reasons. Consumers who access social networking sites using mobile phones are heavy users of communication services.

Where 34 percent of mobile users say they use text messaging "every day," about 76 percent of mobile social networkers say they do so. Where two percent of mobile users say they access email every day, about 23 percent of mobile social networkers do so.

Where two percent of mobile users say they use mobile instant messaging every day, abour 12 percent of mobile social networkers do so.

So mobile service operators are aggregating social networks, allowing users to get, and make, all their updates from a single operator portal, for example.

"Location" is one reason the mobile social Web is seen as increasingly important. When a user's device knows knows "where you are, where your friends are, and what they are doing," social networking becomes more valuable.

Location is by at the very heart of a mobile phone’s value, and Forrester believes that location as a service will become a core enabler of mobile activities in the future.

Location will progressively become a component of social communications as consumers share their location, geo-tagged photos, and comments, helping them explore places and events that their friends recommend.

New technologies also will facilitate the connection between physical and online worlds. For example, consumers will be able to point their camera phone at a product, read reviews from peers, glance at ratings, look up information, and even find the closest store that sells it.

The key insight is that the mobile phone is not simply an extension of the PC-based Internet. That is why a great percentage of mobile broadband access (to support handset applications) is supplemental to, and not a replacement for, fixed broadband access.

Forrester expects 39 percent of European mobile users to adopt the mobile Internet by 2014. And at least initially, mobile service providers will be among the biggest winners, based on sales of new mobile data plans, Husson argues.

Though service providers worry their text messaging revenues will be cannibalized by social network posts, Husson thinks that is unlikely.

Service providers also are likely to benefit in the form of reduced churn if they are able to create the most compelling user experiences.

Advertising, premium content and payment services also are other likely revenue streams. In the future, wiring money to one's social mobile contacts using a mobile phone could be very convenient, for example.

Aggregation and synchronization of social network and other key address books with location information in real time are likely to become important ways mobile service providers create value.