Will iAd Lead to Rapid Rearrangement of Mobile Ad Network Rankings?

Google, at the moment, runs the biggest U.S. mobile advertising network while Apple currently ranks about seventh.

Apple certainly does not expect to remain seventh, and most observers likely believe Apple will ultimately rise up to the top ranks.

That might happen faster if AdMob clients shift over to the iAd network, since the iPhone now accounts for the majority of AdMob revenues.

It wouldn't be unusual if Apple and Google found themselves in the top-two spots before long.

AT&T to Hike Early Termination Fees in June for iPhone, Netbook Contracts

AT&T starting June 1, 2010 will be raising early termination fees for new iPhone and mobile-connected netbook subscribers from the current $175 to $325, the Wall Street Journal reports. The move is certain to outrage consumer advocates and put off potential buyers, and certainly will not help reduce the degree of regulatory scrutiny now being focused on early termination fees and contracts.

Some will speculate the move is designed to limit desertions if Verizon Wireless is able to start selling iPhones in 2012. That doesn't make quite so much sense, since a GSM iPhone won't work on the Verizon network.

Perhaps the more-logical explanation is that a new iPhone model expected to be released in June will provoke a large churn of customers from the older models to the new models.

Nor does the move immediately explain why connected netbooks are seeing the higher charge. A customer able to buy a $199 iPhone is getting a subsidy of about $400, since the retail, non-subsidized price would be $599 without a contract. But the netbook subsidy does not appear to represent that large a subsidy. Perhaps a significantly-better retail plan is coming, or AT&T thinks netbook owners will want to substitute an iPad.

On the other hand, maybe AT&T is simply moving to bring its ETFs more in line with Verizon Wireless ETF fees, which likewise were hiked from $175 to $350 for smartphone devices.

AT&T will pro-rate the new fees, which will fall by $10 for each month that passes in the two-year agreement.

FCC Title II Push is "Reckless," "Risky" and Will Create a "Casino" Environment

Mincing no words, former FCC Commissioner Harold Furchgott-Roth says the Federal Communications Commission's drive to reclassify broadband access as a common carrier service is "reckless" and "risky," will lead to a dampening of investment in networks, years of legal challenge and replaces an investment climate with a "casino" environment.

Of course, the drive to regulate broadband access as a common carrier service, despite being described as a targeted "third way" between unregulated information services and regulated common carrier services can be no such thing. The service either is an unregulated data service or it is a common carrier service under Title II. There is no permanent middle ground, as the FCC can later apply virtually any Title II common carrier obligations if it so desires, once the change is made.

In fact, the FCC's latest effort is the fourth time the FCC has launched inquiries into the status of information services, concluding three times before (Computer Inquiry I, II and III) that information or enhanced services are in fact to remain unregulated.

In light of those decisions, one has to ask: is broadband Internet access a separable telecommunications service plus a separate information service including processing, storage, retrieval, or a single integrated information service that uses telecommunications? If broadband access is deemed to be the former, the FCC might try to regulate some parts of the "access" service under Title II. If broadband access is seen to be the latter, then the current information services classification logically remains in place.

That's the chief problem with the Federal Communications Commission's effort to find some "third way" as it seeks

to impose Title II regulation for the first time, on broadband access services, says Russell Hanser, an attorney at

Wilkinson, Barker & Knauer.

"The uncertainty the proposal creates will create a dampening effect on investment in the broadband business,"

says Harold Furchgott-Roth, former FCC commissioner. Companies aren't sure what will happen and will delay

investment until there is certainty, he says.

The FCC's proposal simply is not conducive to investment, he says. "This is risky," he adds. It "puts businesses at

risk of making decisions they can't be certain about."

Years of litigation are certain to follow if the rules are put into place, Furchgott-Roth says. "The problem is that the proposal is not clear or narrow," and that is the sort of FCC decision that tends to clearly withstand legal challenge," he adds. "Anybody who talks to investors knows how much investors got burned 10 years ago based on faulty interpretations of rules," he says. "This is a casino environment."

If the FCC proceeds, and succeeds, "things will be tied up in courts for years an investors will gravitate to areas with greater certainty and opportunity for profit."

One might argue that means overseas investments will make more sense, or that investments in wireless will make more sense. But the FCC also seems to leaning towards regulating mobile providers more intensely than it already does, arguing that industry concentration is growing.

"There is a very clear correlation between certainty and investment," says Furchgott-Roth. "Unfortunately, both regulation and uncertainty is where we appear to be headed."

Gap Between Bandwidth and Revenue is Key Wireless Business Challenge

In a nutshell, the gap between bandwidth consumption and revenue is the key problem faced by mobile service providers. The reason is simple enough. Everybody agrees the future industry revenue model will be driven by data services, not voice.

And though service providers will sell a mix of simple connectivity services and other value-added features and services, access will remain a huge, perhaps the biggest single revenue source, even in the future.

Given user resistance to paying higher prices for bandwidth, service providers will struggle to close the gap between rising supply of bandwidth and slower-growing ability to price the additional capabilities in any linear fashion.

That is one reason why offloading access from the mobile networks to the fixed landline network is so important, and why a developing rationale for landline network services providers is "wireless offload." Especially as high-bandwidth video becomes a bigger part of the end user demand, it will be necessary to offload as much of the load as possible to fixed networks.

Is Google Is Leapfrogging Apple?

With Android's latest mobile operating system, known as Froyo, apps are synced wirelessly between a user's desktop web browser and phone, music is streamed from a home PC to your handset over 3G, and instructions, such as map directions, search terms, web pages and potential all kinds of other stuff, can be sent to a handset from a desktop browser.

The new sync features are instant.

Google Is Leapfrogging Apple

The FCC Prepares To Beat Down AT&T And Verizon, Lift Sprint – 24/7 Wall St.

The Federal Communications Commission, whether it is wrong or right, is signaling that it may try to undo what consumers and providers, operating through their own willing to pay, have voted with their wallets, arguing essentially that concentration in the wireless market is now a problem.

The problem is that AT&T and Verizon Wireless have grown for logical reasons. They have more capital to spend to grow their businesses, Sprint shot itself with poor customer service and T-Mobile USA simply has not invested in its business to the same degree the other contestants have.

FCC may try to set new rules to “protect” the smaller companies in the cellular business, but, if they need protection, it is because they have been badly run or have not spent enough money to win over customers.

It is true that AT&T and Verizon have the ability to bundle other products to create triple play and quadruple play offers. Sprint and T-Mobile USA do not have similar ability. But that hasn't stopped Dish Network and DirecTV from taking share from the leading fixed line providers in the multi-channel video markets.

The FCC Prepares To Beat Down AT&T And Verizon, Lift Sprint

Google: It's War with Apple

Google declares war on Apple, setting up about as big a contest between "open" and "closed" development approaches as one could imagine. Not since 1985 have we seen images and philosophical differences such as this.

Will Google TV Fare Better Than Apple TV

One still gets the feeling we are still a bit early for mass adoption of Internet-delivered, TV set displayed video, though we are lots closer than we used to be. But this is an entertaining video, anyhow.


To be sure, Google has assembled quite an ecosystem, Sony, Logitech, Intel, Dish and Best Buy. But it probably is worth remembering that Apple itself describes Apple TV as "a hobby." The point is that lots of companies over the last 10 years have tried to create a mass market appliance that captures Web video and delivers it to the main household viewing screen.

That doesn't mean it will not happen. Someday it will. The issue is whether Google TV can crack the code, or whether content rights agreements still have further to go. Some people will appreciate being able to watch YouTube videos on a high-definition TV. But most people probably do not want to spend several hundred dollars for the ability to do so.

What it seems people do wish to do is watch YouTube and other video on a handheld device, including smartphones and devices such as the iPad, as well as PCs.

Google CEO Eric Schmidt says “we’ve been waiting a long, long time for this day." The issue is whether we'll still be waiting.

Sony will provide the one-stop experience with Sony Internet TV built into an HDTV or a a set-top box with a Blu-ray Disc drive. Logitech plans to offer set-top box that will “seamlessly” add Google TV to current HDTV sets.

Dish Network will be supporting the ecosystem as well, allowing subscribers to add web video to their regular multi-channel video options.

Android and Chrome devices are expected to allow communication between Internet-connected TVs and Android or Chrome-based mobile devices. Users should be able to push content on the phone to the TV.

Best Buy will provide a venue for selling all the new boxes.

$13 Billion in Location-Based Mobile Service Revenue by 2014

Location-based local search and information services will be used by nearly 1.5 billion mobile users by 2014, according to Juniper Research. Total revenues from all mobile location-based services are expected to reach $12.7 billion by 2014.

Here Comes Google TV

It's difficult to know whether Google TV can stoke the market for Internet-aware TV viewing, but the company has assembled quite an ecosystem. It's difficult to know whether Google TV can stoke the market for Internet-aware TV viewing, but the company has assembled quite an ecosystem. 

Verizon To Add "Own" Operating System, Devices

A few mobile services providers are taking clear steps to insert themselves a bit more forcefully into the handset operating system and device business, as Verizon Wireless, Orange and Korea's SKT introducing LiMO-based handsets in 2010. .


For Verizon, LiMo is expected to help create sales volume for high-end mobile Web devices with a Verizon brand. As with the moves by carriers to create a carrier-centric applications community, the move represents an effort to gain more clout in the important device and application space where other partners now dominate.


The LiMO smartphone software platform, unlike the vendor controlled Android, Symbian and Windows, is largely driven by carriers. Therefore, it fits neatly with other operator initiatives to swing the balance of power in mobile services their own way, notably the new Wholesale Applications Community (WAC).

Three more carriers to support LiMO this year

Germany Allocates 4G Spectrum

The German spectrum auction has ended, raising about half the expected revenue. Observers think the credit crunch and huge overspending in the 3G auctions helped ratchet down amounts contestants were willing to spend.

A total of €4.38bn ($5.5bn) was spent on the new spectrum blocks, while analysts at KPMG had forecast income of €8bn for the government as a result of the sales.

As you might expect, the three largest mobile operators, O2, Vodafone and Deutsche Telekom's T-Mobile, each won two paired 5 MHz chunks of spectrum in the 800MHz band, prized because of its propagation characteristics, allowing greater coverage at lower cost, including better signal strength inside buildings.

German spectrum auction ends but prices low - Rethink Wireless:

Sprint Might be Looking at LTE for its 3G Network

Sprint Nextel Corp. has issued a 'next generation network' request for proposal for its CDMA third-generation mobile network in the United States, and Long Term Evolution (LTE) has emerged as a potential technology choice.

The RFP does not appear to affect the Clearwire network presently using WiMAX, but the "legacy" CDMA network that underpins Sprints current 3G network that operates in the 800 MHz and 1900 MHz frequency bands.

Light Reading Mobile - 4G/LTE - Sprint RFP May Include LTE - Telecom News Analysis:

Will the "Bell System" Survive?

"Will the Bell system survive?" asks Allan Ramsay. He argues that a "massive transfer of wealth from Bell to VoIP is underway." We can disagree about how large the wealth transfer is, what VoIP is, or whether voice is on its way to becoming a feature, and not a revenue driver at all. 


It is not a question the Federal Communications Commission appears to think relevant, though. 

Will the Bell System Survive? A Massive Transfer of Wealth from Bell to VoIP is Underway - MumbaiHunGama Info Articles:

What Does "Effective Competition" Actually Look Like?

The U.S. Federal Communications Commission seems to be implying that U.S. wireless markets are "not competitive," though the inference is hard to glean from the FCC's own study on the U.S. wireless market. See the document at (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-81A1.pdf)

What "effective competition" looks like varies from market to market, from economist to economist. How many competitors a market must have to be deemed "competitive" is in this case a political question, not an economist's question, though.

There are some businesses where there is no "effective competition" because the market has "natural monopoly" characteristics. You can think of electrical power, waste water, highways and roads (generally speaking), water systems and national defense as clear examples.

Telecommunications once was deemed to be a "natural monopoly," but most regulators around the world now agree that is true only in part. In triple-play markets, for example, effective competition, but not "perfect" competition can occur, in an economic sense, with as few as two players, even though the U.S. market has many more than that in major metro markets, and typically at least two providers even in the rural markets.

In the real world, there are very few examples of major facilities-based competition beyond two major players, although in a few markets there are three facilities-based fixed line providers. As researchers at the Phoenix Center have suggested, in the fixed line triple play markets, imperfect though workable competition does in fact exist with one one dominant telco and one dominant cable provider. 


See http://www.phoenix-center.org/FordWirelessTestimonyMay2009%20Final.pdf, or http://www.phoenix-center.org/pcpp/PCPP12.pdf or www.phoenix-center.org/PolicyBulletin/PCPB11Final.doc.

The problem is what the level of effective competition actually is in the communications market. Presumably the FCC believes three to five competitors in a single market is not enough.

U.S. fails to describe wireless industry as competitive - Yahoo! News