Is U.S. Broadband Really "Deplorable"?

Some observers, apparently without reading the actual detail of a recent Federal Communications Commission report on the state of U.S. broadband access, have deplored the woeful state of broadband in the United States.

But they miss the many nuggets buried in the report, or the subtlety and complexity of assessing where broadband now stands.

Some readers will miss a major definitional change made in the report, which redefines broadband as a downstream speed of 4 Mbps or more.
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There is in one sense no particular reason to quarrel with any particular set of figures for the broadband threshold. Some figure of merit has to be used. But the FCC rather significantly redefined the standard from the old "200 kbps" figure of merit to 4 Mbps. That has the effect of dramatically expanding the ranks of users who today do not have broadband today, but did yesterday.

That makes comparisons over time more difficult. But the FCC has made other changes as well, such as including mobile broadband in the survey.

The chart shows how this affects the results. For starters, lower-speed mobile connections have value that goes beyond mere downlink speed, namely mobility. In other words, mobile broadband is valuable, even when it offers less downstream bandwidth, because it is mobile and can be used mostly anywhere the mobile network will work.

The same sort of issue exists with mobile voice, compared to fixed voice. Mobile voice might be more expensive, on a per-call or some other metric, but most users would agree that it also offers more value. It is untethered, and also supports texting, music playing, email and Web access, for example, plus personalization.

The data might indicate there are lots of 3 Mbps or slower connections, but a great percentage of them are wireless broadband connections whose "value" is not captured if one only looks at download speeds or bandwidth.

More bandwidth is better, and bandwidth tends to double about every four years in the U.S. fixed broadband access market. But fixation on bandwidth alone does not make sense when wireless services are included in the same index as fixed broadband. That is akin to comparing the value of mobile voice and fixed voice looking simply at prices per call, price per month or subjective measures.

Nook Drives 21% Increase in Revenue for Barnes & Noble

Barnes & Noble has reported a loss of $62.5 million for its first fiscal quarter ending July 31, compared to a profit of $12.3 million the year before, and despite a 21 percent increase in year-over-year revenue to $1.4 billion.

Sales at Barnes & Noble retail locations continued to decline (by 0.9 percent), while online sales jumped 42 percent to $145 million year-over-year, exceeding the company’s own expectations.

The company cited sales of its e-reading device, the Nook, as the driving force behind the increase in online revenue.

Nook Drives 21% Increase in Revenue for Barnes & Noble

Apple Loses 16% Mobile Web Market Share While Android Volume Increases 400%

Android continues its surge in mobile Web browsing market share at the expense of Apple, who’s seen its share decrease by over 16 percent between the first and second quarters of 2010, according to mobile analytics firm Bango.

Apple showed the slowest quarterly volume growth of just 13 percent, while the volume of mobile web browsing from Android phones in the US grew by 400 percent for the same period.

On the device front, HTC and Sony Ericsson showed the largest volume growth of mobile web visits in the US with an increase of 162 percent and 148 percent respectively. This represented a growth in market share between quarters of 94 percent and 84 percent.

Apple Loses 16% Mobile Web Market Share While Android Volume Increases 400%

300 Million LTE Subscribers by 2015

There will be 300 million Long Term Evolution subscribers by 2015, Juniper Research now forecasts.

Bacteria rush in to gobble up oil plumes from Deepwater

Researchers have discovered a large contingent of silent partners in the Deepwater oil spill cleanup—bacteria. Two samples of a deep-sea oil plume show that a high number of microbes have populated the oily area and are hacking away at the hydrocarbon concentration.

The bacteria also seem to be using relatively little oxygen to metabolize parts of the oil, minimizing their own environmental impact.

One doesn't have to agree about how well the containment or clean-up efforts were handled to note that large, complex systems sometimes can heal themselves rather well, despite our human failures.

Bacteria rush in to gobble up oil plumes from Deepwater

$4B Cut in Verizon, AT&T Wireline Spending

Analyst Dan Burstein is a smart guy. He's taken a look at Verizon and AT&T capital spending and finds Verizon's wireline capital spending in the first six months of 2010 was $3.35 billion, down nearly $1billion from last year.

The numbers at AT&T are similar, he guesses. AT&T cut U-Verse spending by a third last year.

Dan says lots of carriers reduced capital investment in hopes the broadband stimulus funds could be used, instead of their own capital. That's undoubtedly true in many cases, but likely not for AT&T and Verizon, neither of which, as far as I can tell, applied for any funds.

Some of us might suggest other, entirely rational reasons for why that lower rate of investment might be happening.

A rational executive looking at where growth prospects are highest would logically conclude it lies in wireless, not wireline services. A rational investor might argue the returns are higher overseas than in the U.S. market.

A rational executive might conclude that users screaming for better mobile coverage for their iPhones have a valid point, and that investment has to be targeted in better facilities where those congestion problems are occurring.

Investment analysts for years have been pointing out that financial returns from fiber-to-customer investments do not appear high enough to justify too much investment. Analysts have pounded cable executives for years on that score, frowned on Verizon's fiber-to-home approach and generally have concluded that a less-intensive investment approach makes more sense.

One might argue that reasons such as those are substantial enough for prudence on the wireline investment front, without any need for nefarious motives.

One might also reasonably conclude that firms such as Verizon have concluded the financial return from such upgrades will in fact not provide a payback that is reasonable, leading to divestiture of rural lines and customers.

All of that lies within the realm of a normal strategic review of expected financial returns from capital investments, not to mention the need to raise cash for spectrum acquisitions and then construction of new fourth-generation networks.

Nobody has abundant and extra capital laying around, these days. Hard choices have to be made, and who could fault an executive for concluding their firms would do better shifting capital into the wireless network and services?

We might all agree on the facts, though we might disagree on how to explain the facts. 

$4B Cut in Verizon, AT&T Fiber DSL Spending

Global mobile data traffic nearly triples over last year

Ericsson's latest measurements show mobile data grew 10 times faster than voice over the last year.

Mobile broadband currently accounts for only 10 percent of total mobile subscriptions but a rapidly increasing majority of the traffic.

Ericsson's measurement of actual traffic in networks around the world show that global mobile data has nearly tripled in the last year, growing more than 10 times faster than voice.

Mobile data traffic continues to grow exponentially even after the historic cross over point in December 2009 when data first exceeded voice.

According to Ericsson statistics, global measured mobile data traffic stands at nearly 225,000 terabytes per month as of the second quarter of 2010.

Global mobile data traffic nearly triples in 1 year - Ericsson

US energy use is dropping and shifting to renewables

Analysts at the Department of Energy's Lawrence Livermore Labs have run the numbers on the US energy use in 2009, and come up with similar results to those obtained when examining the country's carbon emissions: energy use is dropping at a pace that is faster than would be expected based on the slowing economy alone.

Even better, the growth in renewable energy, coupled with increased use of natural gas, is displacing significant amounts of coal.

It seems not to be fashionable at this moment to argue people and organizations will act, on their own, to "go green," "recycle" or take any other set of desirable actions we might think of.

Yet, that is what people and organizations do, in markets where people are free to deploy their own resources, and where incentives exist to encourage the desired behaviors.

US energy use is dropping and shifting to renewables

Voice Usage Relatively Stable in Most Age Cohorts, Except Those 34 and Younger

Voice usage per person is roughly stable in most age categories 35 and above, data from Nielsen suggests, at between 400 minutes to 900 minutes a month.

But voice usage per month seems to be dropping in the 34 and younger cohorts, even though younger users tend to have the highest usage, with activity declining steadily in every older age cohort.

Intensity of Texting Grows Over Time

The amount of texting people in just about every age category is increasing over time, as more messages originate and are responded to it that format, data from Nielsen suggests.

Voice Usage and Texting Trends Headed in Opposite Directions

You can see where this is going. Younger users text more than they talk, and though today's users 25 and above still talk more than they text, the usage pattern is uniform: younger age cohorts text more than older age cohorts.

So as each age cohort advances, one might predict that texting behavior will grow over time. How much it grows is the only real question.

Users 18 or younger actually"talk" about as much as users 55 to 64. One suspects an awful lot of "voice" activity is of the coordination and collaboration sort, so that younger and mid-life workers might be in work groups that require more coordination than workers 55 to 64.

Samsung's First Tablet is Coming

It's Fine to Disagree with Google-Verizon Net Neutrality Agreement, But Disagree with the Actual Agreement

Many critics are wrongly deriding the Google-Verizon agreement on network neutrality as a "two-tiered Internet," which he called "dead wrong," says Tom Tauke, Verizon's executive vice president of public affairs.

Tauke pointed out the the deal explictly prevents Verizon from offering anything other than "best effort" Internet, with no packet prioritization, on its fixed network.

Internet access then would remain a simple best effort access, with no "better" tiers of service allowable on Verizon's part. If application providers decide that is something they want to do, all initiative rests with them.

On the other hand, one can imagine many useful managed services that would benefit from quality-of-service measures. Broadband, in other words, is more than simple Internet access. It also is the platform for "tele-work, health-care monitoring, smart grids, smart transportation" and other services, Tauke said.

Some will argue the rules need to extend to wireless networks as well. It's fine to disagree with that part of the agreement. But it isn't correct to label the deal some sort of "tiered access" regime where it comes to the fixed network. That just isn't correct.

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Hulu Serves Up Most Video Ads

Hulu is where the most video ads are viewed, according to comScore. In fact, all of the top-10 sites where the most video ads are delivered feature professionally-produced content.

Dedicated Mobile TV Networks Losing to Web Delivery?

Disappointing adoption levels of existing mobile TV services, in large part because of competition from streamed mobile services, might indicate that special-purpose mobile TV networks do not have the appeal mobile Internet services and applications do, say researchers at Juniper Research.

The Juniper Research report found that the number of paying subscribers to networks based on standards such as DVB-H, DMB, CMMB and MediaFLO were not expected to exceed 10 million globally until 2013 at the earliest, by which time more than 180 million mobile customers will be subscribing to 3G/4G/WiFi enabled mobile TV services.

Press Release: Dedicated Mobile TV Networks Face Uncertain Future, Reaching only 5% of 190m paid mobile TV Users by 2013

Kickstand for Smartphones

No kickstand on the back of your smartphone? Use a pair of glasses. It works if you are near-sighted. It probably won't work for the far-sighted unless the kickstand uses a separate pair.

New technology and applications require new physical capabilities. This helps when watching video. Or you could buy an HTC with a kickstand. A bit more elegant, but this is a great impromptu "retrofit."

How Many Screens Now are Relevant?

Not so long ago, "three screens" were the foundation of consumer multichannel video strategy, those screens being the TV, the PC and the mobile device. With the advent of the e-book reader, perhaps one can add a fourth screen. One can argue that the tablet PC now becomes a viable fifth screen.

There are probably other ways to conceive of "screens," some based on behavioral metrics or applications, rather than devices. Right now, though, it is virtually every other screen than the TV that is getting most of the attention, and rightly so.

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Virgin Mobile USA Aims Prepaid Mobile Broadband at Self Employed Workers

Virgin Mobile USA is aiming its new nationwide prepaid service at self-employed and independent workers.

The Broadband2Go family of mobile broadband products now includes a new $40 unlimited mobile broadband plan. The new offer replaces the previous $20, $40 and $60 plans, allowing consumers to access unlimited internet use at home or on-the-go for $40 per month. The $10 option for 100 MB, good for 10 days from purchase, remains for less frequent internet users.

A recent study from the U.S. Department of Labor shows that the self-employed and independent workers represent approximately 30 percent of the nation’s workforce, Virgin Mobile USA notes. The study determined that this segment of the self-employed population, consisting mainly of small business owners and freelancers, represents a large market of consumers who need to stay connected, mainly with email and internet browsing, without the constraints of a contract.

That's one way to segment a market.

Virgin Mobile USA

Multichannel Video Entertainment Business Loses Subscribers

Is it time to start talking about "plain old television" service, as we talk about "plain old telephone service"?

It might be just a bit early to say. We will need several more quarters of reports until we can say for sure.

But is seems likely something has changed. Multichannel video has been a legacy service for some time, as has POTS, but video has continued to grow subscriber counts, while landline voice lines have been contracting since about 2000 or 2001.

DirecTV to Stream NFL Sunday Ticket

In the emerging online video entertainment business, content rights remain a key stumbling block. Lots of people might like to buy their professional video on a more customized basis. Lots of people might prefer to buy programming they want on a more a la carte basis, rather than paying for traditional multichannel video service.

Now DirecTV says its exclusive "NFL Sunday Ticket" service will be sold as a streaming service, costing $350, without the need to buy the regular DirecTV service as well. When DirecTV subscribers buy NFL Sunday Ticket, they pay $300 on top of a DirecTV subscription.

The still-unnamed service will mean fans can get a full slate of games without switching their current cable, telco or satellite providers. The service will not offer the full resolution of the DirecTV-delivered service.

"We will make a full 720p HD resolution stream available online, but most viewers won't be able to experience the service at that resolution," says  Jon Gieselman, DirecTV spokesman. The picture quality will depend on a user's Internet connection.

For broadband Internet access providers, the implication is that chance to upsell connections featuring higher speeds that will increase the odds that the full 720p picture can be viewed properly. Latency and congestion issues can still pop up, and users might have to work harder at creating a setup able to send the streamed pictures to a TV set for viewing. For some, it will be worth it.

The larger point is that latent demand for viewing alternatives will not develop robustly until rights issues are settled and the whole process becomes nearly as easy as watching plain old TV.

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