FCC Has National Broadband Authority, Say 2 Former FCC Commissioners

Former FCC chairmen Reed Hundt (D) and Michael Powell (R) say that, contrary to much speculation, the Federal Communications Commission continues to have the authority it requires to set in motion the "National Broadband Plan."

Both Powell and Hundt agreed that the FCC still has jurisdiction on the Broadband Plan and net neutrality and that there isn’t “Armageddon” because of the DC Circuit ruling on the Comcast complaint.

Powell pointed out that Title II reclassification would have a “destabilizing nature” to the industry because it would change decades-long policy and that it would frustrate investments made under the current regulatory environment (for example the $23 billion investment Verizon made on their “FiOS” service).

The argument that the FCC now "lacks jurisdiction," though incorrect, is being used to advance the notion of wider and more-disruptive changes in the basic regulatory framework governing broadband access services.

Post Tech - The Full Video: Ex-FCC heads Hundt and Powell discuss broadband policy

FCC National Broadband Plan Does Not Require Title II, AT&T Says

Robert Quinn, Senior VP, federal regulatory, for AT&T, argues that the FCC does not need to redefine broadband as a Title II telecommunications service in order to implement its proposed national broadband plan, particularly its changes to the Universal Service Fund.

The "Open Internet Coalition" including  Google, Sony, Public Knowledge and the Free Press have been arguing for that classification as necessary for the plan's recommendations.

AT&T filed an analysis with the FCC Monday saying it thought the commission still has "all the authority it needs" to migrate the Universal Service Fund from phone to broadband service or to implement the online privacy recommendations. "The FCC has all the authority it needs to go out and do the things it has identified in the national broadband plan," Quinn argues.

He said suggestions that the court decision could significantly impede the broadband plan were overblown, and that classifying it as a more regulated Title II (common carrier) service would chill investment, which could adversely impact broadband deployment.

"I think at a time when we need more than anything else is infrastructure investment, I think it would provide a huge disincentive for entities to invest in this space," Quinn says.

Quinn said, ultimately, Congress may need to step in and clarify the scope of the FCC's broadband oversight, but that in the meantime the FCC has authority over changes to universal service, protecting proprietary customer information online and making broadband accessible to disabilities, for example.

Goats at Google

As it did last year, Google has a herd of goats mowing the grass at its headquarters. I like goats. 

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Cablevision, Time Warner Cable, Comcast Federate New York Hotspots

Federation nearly always is good for widespread adoption of any application. Email and text messaging provide recent examples, as usage exploded once messages were made interoperable. But one can point to any number of other examples, including railroad, telegraph and telephone services, each of which benefitted from interoperability.

A positive usage effect likely will happen for cable public hotspot users as Cablevision Systems Corp., Time Warner Cable Inc. and Comcast Corp. have agreed to allow their broadband Internet subscribers to roam freely across the Wi-Fi deployments of all three major cable operators in the New York metro area.

The agreement will allow customers of those companies to use Wi-Fi for no additional charge in places like Madison Square Park in Manhattan, areas of the Jersey Shore and the Hamptons on Long Island.

In key ways, the agreement attempts to keep pace with public hotspot access offered by Verizon Communications and AT&T. The issue isn't so much the public hotspot access as such, but the fact that cable modem, DSL and wireless dongle services now typically come with "no additional charge" Wi-Fi hotspot access. So any provider that can offer free Wi-Fi at more locations has an advantage retaining and acquiring fixed broadband access customers.

Verizon to Debut Droid Incredible April 29

To the extent that Verizon Wireless is looking for a device that takes the "Droid" one step further,  it probably has one in the coming HTC "Droid Incredible," with many of the features of Google's "Nexus One" phone.

Verizon and HTC say the new device will cost $199.99 after a a $100 mail-in rebate on April 29 with a new two-year contract.

DROID Incredible by HTC is the first Verizon Wireless phone that takes advantage of Qualcomm’s 1GHz superfast Snapdragon processor, and it’s the first available phone from Verizon Wireless to include an 8 megapixel camera.

Shortly after the phone becomes available, customers will be able to enjoy two of the latest exclusive apps from Verizon Wireless, NFL Mobile and Skype mobile.

The new Droid features Android 2.1, a 1GHz Qualcomm Snapdragon processor; unified
Flickr, Facebook and Twitter updates; an 8-megapixel camera with dual LED flash, a 3.7-inch WVGA (480x800) AMOLED capacitive touch display and an optical joystick for smooth navigation.

The device features a proximity sensor, light sensor and digital compass; integrated GPS and Wi-Fi
(802.11 b/g) as well as a 3.5 mm headset jack.

The Incredible will be available for pre-order online at www.verizonwireless.com beginning on April 19 and it will be in Verizon Wireless Communications Stores on April 29.

Incredible customers will need to subscribe to a Verizon Wireless "Nationwide Talk" and an "Email and Web for Smartphone" plan. Nationwide Talk plans begin at $39.99 monthly access. Email and Web for Smartphone plans start at $29.99 for unlimited monthly access.

HTC is the same company that makes Google's Nexus One.

Google Beats First Quarter Estimates

Google's first-quarter profit rose 37 percent, exceeding analyst estimates on both the earnings and revenue lines, suggesting that at least at Google, online advertising has picked up in the first quarter of 2010.

“Google performed very well in the first quarter, with 23 percent year-over-year revenue growth driven by strength across all major verticals and geographies,” said Patrick Pichette, Google CFO.

Google reported revenues of $6.77 billion for the quarter ended March 31, 2010, an increase of 23 percent compared to the first quarter of 2009.

Google-owned sites generated revenues of $4.44 billion, or 66 percent of total revenues in the first quarter of 2010. This represents a 20 percent increase over first quarter 2009 revenues of $3.69 billion.

Google’s partner sites generated revenues, through AdSense programs, of $2.04 billion, or 30 percent of total revenues, in the first quarter of 2010. This represents a 24 percent increase from first quarter 2009 network revenues of $1.64 billion.

Revenues from outside of the United States totaled $3.58 billion, representing 53 percent of total revenues in the first quarter of 2010, compared to 53 percent in the fourth quarter of 2009 and 52 percent in the first quarter of 2009.

Revenues from the United Kingdom totaled $842 million, representing 13 percent of revenues in the first quarter of 2010, compared to 13 percent in the first quarter of 2009.

Ning Lays off 40% of Staff, to Refocus on Paid Users

In a significant shift, Ning has laid off more than 40 percent of its staff (shrinking from 167 people to 98 people) and announced it no longer provide access to free social networks, concentrating instead on "for fee" customers. After 30 days as Ning's new CEO, Jason Rosenthal says "my main conclusion is that we need to double down on our premium services business."

"Our Premium Ning Networks drive 75 percent of our monthly U.S. traffic," and those customers will pay for many more services and features," says Rosenthal.

"Existing free networks will have the opportunity to either convert to paying for premium services, or transition off of Ning," he says.

The announcements by the Palo Alto social networking company came about a month after co-founder Gina Bianchini was replaced as CEO role after five years in that job.

Ning was founded in 2004 by CEO Bianchini and Netscape Communications Corp. founder Marc Andreessen. It has raised more than $100 million from Lightspeed Ventures, LinkedIn Corp. founder Reid Hoffman, Legg Mason and Allen & Co.

The company offers a platform aimed at offering customizable tools that lets users create their own social networks.

The company makes money by selling Google-brokered ads on social sites and by selling premium services, including the ability to eliminate Google ads, which can be replaced with ads sold by users.

The move could provide a boost to other providers, including firms such as Zerista, which specialize in social networks that feature 250 members or fewer, especially networks that benefit from mobile access and sharing. Zerista also offers paid support for larger social networks that could include 100,000 members, though.

GMail Gets Drag and Drop

Those of you who use Microsoft Outlook or Exchange won't be excited, but those of us who do use GMail with Chrome or Firefox browsers now can "drag and drop" file attachments into email messages.

It's just a small enhancement, but an enhancement that will shave a few seconds, and  few mouse clicks, off the attachment process.

It's also an example of how application "disruption" typically happens these days. Attackers generally start out "low" on the functionality scale, offering an alternative that generally does not have all the functionality of the market-leading application.

The attacking applications tends to be derided as "okay for consumer use" or "just a toy" in other cases, but that isn't the point. Over time, features get richer and the differences between the attacking application and the market leading application begin to narrow. At some point the attacking app starts to compete head to head with the leading app in one or more customer verticals.

And that is what this smallish new feature is, another small step towards feature parity.

75% of Twitter Users Use 3rd Party Services

Twitter says it has 105.8 million registered users, is adding 300,000 new users every day and sees activity by 180 million users every month.

About 75 percent of its visitors don’t go to Twitter.com, but to services built by third-party developers. That is significant because traffic counts based solely on the Twitter.com site vastly undercount actual Twitter activity.

That shows the power of third-party developers! 

Mobile Advertising, Commerce to Explode with Strong Smartphone Growth

Research and Markets forecasts that U.S. mobile Internet users will rise to 158 million in 2015, while smartphone owners will rise to 194 million in the same year. That is fairly significant growth, given the current estimate of about 46 million U.S. smartphones in use, suggesting more than a tripling and nearly a quadrupling of the user base in the next five years.

As a result, the firm believes revenues from mobile advertising will grow about 37 percent at a compound annual growth rate, while mobile commerce grows at 65 percent compound rate between now and 2015.

Smartphones Have Outsize Impact on Mobility Business

Despite the fact that smartphones have only about 19 percent share of the U.S. handset market, they have outsize importance simply because smartphone use is growing so fast, implies growth of mobile broadband revenue and is key to the hopes new suppliers have for cracking the handset market.

Browsers were used by 29.4 percent of U.S. mobile subscribers (up 2.4 percentage points), while subscribers who used downloaded applications made up 27.5 percent (up 1.8 percentage points).

Some 18 percent used social networking sites or blogs, up 2.9 percentage points to 18 percent of mobile subscribers. About 13 percent report they listened to music on a mobile device. About 22 percent say they played games on their mobiles., up about half a percentage point.

Some 234 million Americans age 13 and older were mobile subscribers, while 45.4 million people owned smartphones in an average month during the December to February period, up 21 percent from the three months ending November 2009.

In an average month during the December through February 2010 time period, 64 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.9 percentage points from November 2009 levels, says comScore.

Those differences also are reflected in market share of feature and smartphones. In the broader feature phone market, Motorola has 22 percent share, LG 22 percent, Samsung 21 percent, Nokia nine percent and Research in Motion eight percent.

In the smartphone market RIM has 42 percent share, Apple 25 percent, Microsoft 15 percent, Google nine percent and Palm five percent. Google grew the most over the quarter ending in February, gaining five share points. Apple's share was flat and Microsoft lost five points.

Apple iPad Ignites War Over Market That Might Not Exist

With rumors that Google, Nokia, Hewlett-Packard, HTC, Acer, Dell, Lenovo all are working on tablet devices in the same class as the Apple iPad, I suppose it has to be said that those companies do not want to take a chance on Apple having discovered a new mobile device category, and not moving early enough to participate in the segment's growth.

It's just that nobody has yet proven what the market is, or how big it might be. But nobody seems to want to take a chance that a market exists, and that Apple will stake out leadership before anybody else can mount a challenge.

That is not to discount Microsoft's historic interest in the tablet segment of the market, but simply to point out that, up to this point, the segment has not gotten much traction, perhaps because "different interfaces to the same functions" has not resonated. Microsoft's approach has been to envision a PC with a tablet design.

Apple's approach is more similar to that of the Kindle and iPad "touch," though, more a media reader and entertainment-driven Web appliance than a 'notebook with a different interface.'

The range of rumored interface, operating system and featured applications illustrates what happens when suppliers try to position a new device mid-way between smartphones and netbooks and notebooks.

Hewlett-Packard is said to be debutting a slate computer that it will offer by midyear. H.P.'s slate will have a camera and ports for add-on devices, like a mouse.  Apple's iPad appears to dispense with those options.

Under the hood, the iPad is powered by what might be called a "smartphone" processor, while others likely will try to use "netbook" processors.

Google might try to power its slate using Android software, which was originally designed for mobile phones.  Those hardware and software choices show some of the issues involved when trying to create a new class of devices mid-way between netbooks and smartphones.

Then there is the matter of "niche" to pursue. Apparently the first the idea was to create a device for designers and architects, but lately the company is thinking of a broader market of consumers and so would include e-books, magazines and other media content on the device.

Nokia is said to be designing an e-reader. The point is that there is so far no clear consensus about what the category is, how people will use the devices, or whether there is only one large, or multiple more specialized categories, to be satisfied. That accounts for the diverse choices about featured applications, processors and operating systems, among other choices.

All for a market that nobody knows exists, for sure.

Social Networking Eclipsing Email?

Many observers have noted that one of the big changes in technology adoption over the past half decade is the preponderance of "consumer" technology compared to "enterprise" technology tools. Not only are consumer tools reshaping enterprise applications but most of the innovation now occurs on the consumer side as well.

Internet analyst Mary Meeker of Morgan Stanley says that social network use is bigger than email in terms of both aggregate numbers of users and time spent, and is still growing rapidly.

Meeker attributes social networking’s success to the fact that it’s a “unified communications plus multimedia creation tool in your pocket.” The intriguing notion there is that tools not originally envisioned as part of the unified comnmunications feature set are now in some cases supplanting those features.

In fact, consumer tools in this case seem to be displacing at some of the utility enterprise unified communications services and applications were envisioned as supplying.

Social networking passed email in terms of time spent in 2007, hitting about 100 billion minutes a month globally and now is twice that.

Social networking passed email in terms of raw user numbers in July of 2009, with more than 800 million users. Given the rate at which Facebook has been growing, that number is probably now closer to a billion users, she says.

In many ways, social networking is to unified communications as consumer VoIP was to enterprise IP telephony: all the attention was the latter, not the former, but most of the growth has occurred in the former, not the latter.

Twitter Gets into Advertising

Twitter has introduced its "Promoted Tweets" advertising program with a handful of advertising partners including Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America.

Promoted Tweets are ordinary Tweets that businesses and organizations want to highlight to a wider group of users, initially only when a user has conducted a Twitter search function.

Users will start to see Tweets promoted by our partner advertisers called out at the top of some Twitter.com search results pages. Twitter says it will attempt to measure whether the Tweets resonate with users and stop showing Promoted Tweets that don't resonate.

Promoted Tweets will be clearly labeled as “promoted" when an advertiser is paying, but in every other respect they will first exist as regular Tweets and will be organically sent to the timelines of those who follow a brand. Promoted Tweets will also retain all the functionality of a regular Tweet including replying, Retweeting, and favoriting. Only one Promoted Tweet will be displayed on the search results page.

Twitter says it wants to get a better understanding of the resonance of Promoted Tweets beyond Twitter search, including displaying relevant Promoted Tweets in user timelines in a way that is useful. That means the program will get a slow introduction and will be user tested in a variety of ways.

Twitter argues that all promoted tweets are organic Tweets, which makes them different from traditional search advertising and social advertising. Promoted tweets will also be timely, Twitter says.  "Like any other Tweet, the connection between you and a Promoted Tweet in real-time provides a powerful means of delivering information relevant to you at the moment," Twitter says on its blog.

There is one big difference between a Promoted Tweet and a regular Tweet, the company says. Promoted tweets must resonate with users. That means if users don't interact with a Promoted Tweet to allow us to know that the promoted tweet is resonating with them, such as replying to it, favoriting it, or Rretweeting it, the promoted tweet will disappear.

Twitter blog

Competitive Pressure Remained the Story in 4Q 2009, Says Fitch Ratings

Competitive pressures remained strong throughout the industry in the fourth quarter of 2009, say analysts at Fitch Ratings, especially among local exchange carriers and cable companies, as those firms increasingly compete in identical spaces, with similar products.

The fourth quarter revealed especially aggressive marketing and competitive pricing and discounting strategies, Fitch says. This trend is expected to affect the competitive landscape going forward, especially putting pressure on average revenue per user and profit margins on discrete products.

The big problem for telco contestants is fixed voice line losses. Although high unemployment continues to affect sales of business lines, and the effect of wireless substitution continues, affecting residential lines, total access-line losses began to decelerate toward the end of 2009 as service bundling, including network-based video services offered by operators such as AT&T and Verizon continued to gain scale.

Cable operators had an arguably easier time, gaining high-speed data subscriber market share growth during the fourth quarter of 2009 despite a decrease in overall broadband additions caused by the persistently weak economy and maturation of the broadband market.

The wireless segment of the business arguably faced the fewest problems. Total wireless net additions were strong, says Fitch.

The industry’s capital spending grew by approximately 20 percent from the third to the fourth quarter of 2009 but remained below fourth-quarter 2008 levels. It is Fitch’s opinion that all communication service providers must invest in their respective networks in 2010 in order to maintain or improve their competitive positions.

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