Wal-Mart to Sell HughesNet Services

Need a little satellite broadband with your order? Wal-Mart customers will be able to buy HughesNet satellite broadband services soon. Sure, it is a niche. But there are lots of big niches in the communications business. About 10 percent of all U.S. end users live places where the local telephone company is not one of the big brand names. Also, for some of us, wireless is a good way to back up a primary wired broadband connection. In my case, Covad as a primary for primary in-home business and personal use, plus 3G wireless primarily for mobility, but also as the backup in case the primary service fails for any reason.

T-Mobile Goes Down

It wasn't your imagination: if you use T-Mobile data services, you had no connectivity for as much as four hours on Tuesday. Personally, I thought it was the coverage inside the convention center I am working inside of. Nope. There was an outage. I thought it was the BlackBerry server at one point. But no.

The latest outage just illustrates an important element of digital life: you really can't trust any service or application to remain "always available." Everything is going to crash, or be unusable, for some amount of time. So one either gets used to the idea of periodic outages, or if that isn't satisfactory, you are going to have to back up all your mission critical services, devices, data or applications. Personally, I don't worry too much about application diversity, though most of us have some of that. I do make sure broadband and mobile access, as well as computing devices, are redundant.

First 700 MHz Winner: AT&T

at&t is the first winner of the battle to win 700 MHz wireless spectrum. Not, of course, because it has won anything in the upcoming auctions for C block and other spectrum. Instead, at&t is acquiring $2.5 billion worth of wireless spectrum licenses covering 196 million people in the 700 MHz frequency from Aloha Partners.

The 12 MHz of spectrum covers all of the top-10 U.S, wireless market and 72 of the top 100 markets overall.

A Location Based Service Somebody Needs to Develop

As someone who spends lots of time at conferences and trade shows, and who randomly bumps into people, it occurs to me that one location-based service that would really be helpful is a way to have your mobile alert you when somebody you have been communicating with over a recent user-defined period is in your vicinity. The reason is simple enough: quite often one works with people for years without ever physically meeting them. And if the opportunity presents itself, one would like to stroll over and say hello.

The issue is that I don't know how well GPS will work when all of us are inside a large meeting hall. Bluetooth would help for short distances, I suppose. It might also be nice if the app could run in the background when synchronized with one's notebook or desktop and collect photos of your contacts, putting them into your contact database so you know roughly what the person you want to meet looks like.

For that matter, scouring public sources and putting a picture into my contact directory might also be nice if I weren't a Facebook user, which essentially provides that function.

Sprint Loses CEO; 337,000 Subs

Sprint Nextel says it expects to report a net loss of approximately 337,000 post-paid subscribers in the third quarter, and also announced the resignation of CEO Gary Forsee. Perhaps the company has spent too much time on the WiMAX network is hasn't yet built, and too little time stemming serious subscriber losses in the voice and third generation business it does have.

Help Us Figure Out What We Can Do with Wi-Fi: BT

To stimulate development of new applications using Wi-Fi hotspots, BT is running a contest with a £1000 prize for the best new Symbian-based mobile application. To enter the challenge, an application should make use of the device's Wi-Fi connection for some of its operation. Applications will be judged on the innovative use they make of Wi-Fi connectivity, how easy they are to use, and their commercial potential. There are smaller prizes for runners-up. The challenge is open from October 16 and the closing date for entries is January 16, 2008.

Vonage Settles with Sprint

Vonage has settled its Sprint Nextel Corp. patent infringement lawsuit for $80 million. As part of the settlement, all claims are resolved and Sprint has licensed to Vonage the Sprint portfolio of more than 100 patents covering the connection of calls between a regular telephone network and a packet-switched network such as the Internet.

The $80 million Vonage agreed to pay consists of $35 million for past use of the patents, $40 million for a fully paid future license, and $5 million in prepayment for services.

Vonage has maintained it has sufficient reserves to pay both the Verizon and Sprint Nextel patent infringement awards without long-term damage to its business model. There has been some speculation that the patent infringement damage awards would push Vonage over the edge into bankruptcy. The countervailing point of view has been that the patent disputes were a serious financial distraction but not alone capable of damaging Vonage's long-term prospects. More dangerous by far is the threat posed by cable providers bundling VoIP with video and broadband access services.

In that sense, EarthLink faces much the same problem. It has a reasonably-sized Internet access business that has to contend with triple play bundles as well, though EarthLink arguably has made better progress in creating a double play offering of broadband plus voice.

The settlement of the Sprint lawsuit is helpful primarily in removing a huge distraction and source of uncertainty.

Smartphones are Different; So are Users

If device choices are an accurate reflection of user preferences and behavior, there is a big different in use cases of BlackBerry and Palm devices. To wit, BlackBerry users seem quite fixated on business use, while Palm uses are much more likely to use their smartphones for managing details of their lives as consumers. Windows Mobile users also tend to use their smartphones more heavily in "personal" rather than "work" modes.

So personal considerations are more important factors in driving smartphone purchases and usage than you might suspect. Some 83 percent of consumers say they use their smartphones for personal reasons in some form or another. 71% of consumers tell researchers at Compete that they have a smartphone to stay organized in their personal life, while 46 percent say they use the devies to stay connected to work. Given that until now most smartphone makers have primarily focused on the business-user segment, these are surprising results, Compete researchers say.

att Tilt: A Small Reason Sprint is in Trouble

A decade ago, Nextel was the star of the U.S. mobile industry, with way-above-average revenues per subscriber based on its business user base. Today, Sprint Nextel is struggling to find its way. We point out the introduction by at&t of the new Tilt phone as an example of why Sprint Nextel is faltering. It isn't the technical performance of the phone, though it is among the "smartest" of smart phones available, or the form factor or the industrial design, though some will appreciate it.

Of course, it hasn't helped that Sprint still is struggling to get the separate Nextel and Sprint networks and technologies to mesh. But it might be argued that Nextel's market success now is a large reason for Sprint's undoing. The reason is simply that the gravitation pull of Nextel's business customer base might have defocused Sprint on the consumer-lead dynamic of the mobile phone market.

As with so many other elements of technology adoption these days, innovation is seeping into the market, and into the fabric of business life, from the consumer segment. And one might argue that Verizon, at&t (Cingular)and T-Mobile have done a better job, of late, of tapping into that dynamic.

As phones and mobiles increasingly have become fashion items, Verizon and at&t have seemed better able to capture the spirit. Perhaps in some largely unconscious fashion Sprint executives relied too heavily on the "pin drop" quality of the network, rather than offering fashion-forward devices.

That isn't to ignore technical parameters of the user experience. But most users realize that every network has some limitations, largely negating the "our network is better" positioning. Sprint has had to integrate two completely different air interfaces, to be sure. You might think "data network" when you think of Sprint. You aren't nearly as likely to think "cool phones." And that increasingly is what is driving the market these days.

The Tilt is the first at&t-enabled Windows Mobile 6 smart phone, and features a slide-out QWERTY keypad design, a 3-megapixel camera, 3G data speeds from AT&T's UMTS/HSDPA network and global connectivity.

Designed by HTC, the AT&T Tilt features a 2.8-inch color screen that slides back to reveal a full QWERTY keyboard, then tilts up to position the screen perfectly for reading and creating e-mail, browsing, watching videos or playing games.

The Tilt supports Bluetooth 2.0, which allows for up to six Bluetooth devices to be wirelessly connected simultaneously to the device and also supports Bluetooth Stereo.

The Tilt also features the latest version of TeleNav GPS Navigator and address sharing, which allows users to share their current locations or the location of their favorite businesses with other mobile users. Business users also can use TeleNav Track, a mobile workforce management solution that includes GPS-enabled tracking, timesheets, wireless forms, navigation, job dispatching and bar code scanning.

The Tilt also operates in Japan and Korea, as well as in 135 countries using the GSM air interface.

Wi-Fi is built in. The Tilt also comes with the highest-resolution camera available on any at&t mobile phone (3 megapixels). The device also accommodates 4GB MicroSD flash memory cards and is capable of supporting up to 32GB MicroSD cards to expand storage for pictures, video, music and more.

The at&t version of the Tilt also will be the first Windows Mobile device in North America to include BlackBerry Connect version 4.0 software, which provides BlackBerry email service, security and device management for IT administrators and the benefit for users of wireless synchronization of email, calendar, contacts, task list and memo pad information.

BlackBerry Connect v4.0 supports push email for Microsoft Exchange, IBM Lotus Domino and Novell GroupWise through the BlackBerry Enterprise Server and personal email through the BlackBerry Internet Service.

Customers can also use the AT&T Tilt to access their personal email. Better than most devices, the Tilt bridges the business-focused BlackBerry segment with the media player personal device.

And that's the issue: people buy devices. The network and the plan just follow along.

Level 3 Provisioning Issues?

Level 3 Communications has made seven acquistions in the last 18 months, including Broadwing, part of the Savvis portfolio, TelCove, Looking Glass and ICG. Several of the buys related to its new content delivery network portfolio. But many of the sizable acquisitions are related to its core bandwidth business.

If you have been around the business long enough, you know what is happening in the back office. Disparate systems are running in parallel. Manual reports have to be built. Billing systems don't talk to each other. Inventory cannot be interrogated in real time. Provisioning backlogs are the inevitable result.

That is one possible reason Level 3 reported relatively light revenue and earnings growth in the most recent quarter. Demand for its services isn't the problem. If anything, in light of the back office issues, demand possibly is outstripping provisioning.

Any company would have at least some issues getting new customers provisioned efficiently were it to digest as many acquisitions as Level 3 has made recently. So we would not be surprised if the company is having issues getting the new customers onto the network.

In fact, it probably is safe to say that bandwidth in service has grown at an unprecedented level over the last year. If one looks at total in-service bandwidth provisioned by Level 3 in its entire history up to about 12 months ago, the amount of bandwidth in service probably has doubled again in the last 12 months.

That rate of growth would cause issues for any service provider. So we wouldn't be surprised if there was some hiccup in provisioning new orders. In fact, the backlog could be great enough that three months might have to pass before the provisioning teams can catch up. Level 3 wouldn't be the first company to have problems with too much success.

BT Tries to Differentiate its Access

One way to differentiate what might otherwise be a fairly ordinary broadband access service is to extend access from a "one site" service to a "hundreds of thousands of sites" service.

And that's what BT hopes will happen as it capitalizes on an exclusive deal with Fon to create a huge new network of hotspots in the U.K., based on three million BT broadband access accounts. BT had been headed in that direction anyway with its Openzone program. The BT Fon effort accelerates the WiFi footprint within the U.K., and also offers connections abroad.

Greater density also makes possible more ubiquitous dual-mode mobile phone usage: which is part of why the Wi-Fi initiative made sense in the first place.

Level 3 Attacks CDN Pricing

Level 3 Communications has been gearing up for a major assault on the content delivery networks business and appears ready to price such services at a rate that basically offers caching and downloading services for no more than the cost of buying IP transport. If, as expected, Level 3 prices content delivery at the same price as Ip transit, it could disrupt much of the market.

It isn't so much the disruption of profit margins: that already is happening as several dozen contestants now are slugging it out for some share of the growing market.

The bigger issue is how participants in the media, hosted applications and enterprise end user markets are able to change the way they do things if enhanced quality becomes an integral part of the IP transport they buy.

Level 3 hopes to have its streaming services ready by mid-November. At that point it will have a wider shot at disrupting the market for transport of real time services. Right now much of the market is focused on video content. But there are other real time applications and services that really would benefit from lower-priced and more capable delivery over networks that eliminate jitter and latency over the global wide area network.

Access networks on each end still are issues, but tail circuits also keep improving. As more applications move to "cloud-based" processing and storage, they will have to start having the "feel" of local desktop apps. CDNs will be part of that experience. And that's where the major impact will lie.

Broadband costs: Fiber Helps!

Fiber to the home helps, obviously. In the U.S. market, it helps to be a Verizon customer where FiOS is deployed, or to live within the SureWest Communications footprint. Make a note, though: this is actually a megabit per second (Mbps) metric, not a Mbyte metric. Apparently we are dealing with a technologically challenged journalist. The original data from the foundation make clear that we are talking about Mbps, not Mbytes.

Free BlackBerry Collaboration Tool for Small Groups

Telefónica and Research In Motion are introducing BlackBerry Unite!, a free PC-based software offering that will allow small groups, such as a family or small office, to stay connected and enhance communications and coordination. It's a combination of collaboration and remote PC access tools.

In addition to providing wireless email and web browsing, BlackBerry Unite! software will provide groups of up to five users with mobile access to shared calendars, pictures, music, documents and other desktop content.

The software provides five supported email accounts per user, with shared contact lists and Web browsing. Members of each user group can check each others’ availability, set up or modify appointments and send reminders.

Users can remotely download pictures, music, documents and other content on their desktop PC directly from their BlackBerry. Users also can share photos and files with other group members directly from their BlackBerries.

Users can remotely erase information on a lost or stolen handset as well. Contacts, pictures and other data on the BlackBerry can be backed up automatically over the air (via a cellular or Wi-Fi® network) to the desktop PC as well.

The BlackBerry Unite! software will be provided as a free download and, with the help of an easy-to-follow setup wizard, can be installed in minutes on a desktop PC, RIM says.

It's very cool. Not every company, and certainly not consumers, can afford to buy, set up and maintain their own BlackBerry enterprise servers. One can only hope the software will be made widely available in North America as well.

iPod Touch: Optimized for Video and Web

The newly released iPod touch is for all intents and purposes an iPhone with reduced functionality. The iPod Touch skips Bluetooth, phone capabilities, a camera and has a lower quoted battery life.

It has more storage than the iPhone though, which tops out at 8 Gbytes. The Touch is available in 8 Gbyte and 16 GByte versions, whereas the iPhone is only available in 8GB capacities. Other than that, the iPhone and Touch are identical. 802.11b/g Wi-Fi is available on both devices.

The Touch uses the same interface as the iPhone as well, but the Touch is shorter and thinner. Brilliant people, those marketers at Apple. They are creating a family of products each optimized for a different use case. The iPhone is the most capable phone. The Nano is a cheaper video player. The iPod has the most memory if you a music player.
The iPod also has dedicated volume control buttons; Touch doesn't.

The Web browser on the Touch probably is a major positioning feature. Lots of users will focus on using Wi-Fi to download music. Personally, I see it more as a Web browsing platform. Email access is not something you'd really want to do on a Touch. That's a better experience on an iPhone but arguably not as good as an iPhone as on a BlackBerry.

To prevent people from confusing a Touch with an iPhone, Touch has no audio input jacks or Bluetooth, so you really can't use a microphone. It definitely is not a phone.

So the issue is what people will make of it. It's a better Web browser and video player than a music player. The iPod is a better music player. The video-capable Nano is a cheaper music and video player. The iPhone is the only phone. The Shuffle is a better device for running and exercising because of its non-existent footprint. Unless you need to keep stats on your training progress, in which case the Nano works with some Nike shoes to collect data for you.

The net result is that lots of users will wind up owning multiple Apple products, while Apple covers the whole range of price points for devices that all are mobile music players. Clever, those marketers at Apple.

All of this is interesting for other reasons as well. One wonders how long it will be until data-optimized, communicating mobile devices might develop as a distinct niche: optimized for Web applications primarily, though capable of handling email and voice. Would such a niche necessarily require full-time mobile access? Or is there room for use cases based on Wi-Fi connection as a primary access method? Perhaps dual mode capable, but without the recurring monthly post-paid fees? Perhaps prepaid mobile access as a supplement to Wi-Fi as the primary access? Using WiMAX perhaps?

The new use case would be based partly on the characteristics of the device, partly on the nature of the access, partly on the user payment model and partly on the provider business model.

BT Joins Fon

BT has decided that Fon, the global user-built Wi-Fi network, really is complementary to telco networks, and has joined the FON community, creating a new service known as BT Fon. U.S. cable operator Time Warner Cable also has done so. The value proposition might be pitched as "free Wi-Fi access when you roam if you buy our broadband."

The result is that now millions of BT broadband subscribers can automatically opt-in to the BT Fon community, potentially expanding the footprint where BT customers can get connected.

Fon users who are not BT broadband customers will not automatically get free access to the commercial BT Openzone hotspots and Wireless Cities hotzones and hotspot network serving 12 cities at the moment. They will get access at reduced fees, however. Access to BT Fon user Wi-Fi zones will be reciprocal.

And BT is putting its money where its mouth is, becoming a shareholder and partner in Fon. So Fon now is part of BT’s strategy to provide wireless broadband not just inside the home, but outside as well.

Neuf Cegetel in France also has joined the Fon community.

The deal also means that users of BT Fusion dual-mode handsets will be able to use those devices in far more locations around the world than had previously been possible. FON also has a software client that can be used on Nokia's Wi-Fi-enabled Nseries handsets.

BT Fon has the potential to dramatically increase the size of the global Fon network, as BT has more than three million consumer broadband customers who are free to opt in to the program. By way of contrast, Fon's global network now stands at 190,000 hotspots.

The Fon router sets up a secure channel of 512 kbps that is available to other Fon users.

"Google Me"; "Skype Me"

No matter what financial pundits say about EBay's purchase of Skype, Skype has had enormous impact. As "Google" now is a verb, as in "Google it," so is "Skype" as in "Skype me." Assets can trade one way or the other. But "assets" aren't the same thing as "significance" or "value" to people. Skype is hugely valuable to users. No matter how you want to quantify the matter--10 million concurrent peak users or 200 million downloads--that's a huge user base. More important, Skype is part of the fabric of daily life for millions of people, as is Google. We may agree that EBay overpaid for Skype. That has almost nothing to do with the social significance of Skype. That's huge.

HTC Touch: On the Cusp of Something Big

Something big is going on in the handset market, which appears to be developing clearer customer niches as device capabilities start to diverge. But the big thing isn't simply the handset proliferation. The proliferation of devices is creating lots of niches, and also showing why mobile is such a powerful way to do voice.

It isn't simply mobility. It is the ability to create human affinities for communications services never possible before. Marketers talk about "branding" their companies and services to create an image of quality, reliability, dependability, fun or some other attribute. But who really believes them?

Most consumers seem to regard every mobile provider as a functional substitute for some other provider. Ford or Chevy. There are brands. It simply isn't clear that the brands mean much.

But consider perfume. Perfume is so personal that the branding is everything, the actual fragrances like operating systems. Perfumes also are ultimately personal. A person doesn't buy a different perfume because it is on sale. And on what logical basis would any fragrance be "better" than another?

Of course, that's not the point. It isn't about "better." It is about "me." The whole point of perfume marketing is to create an indelible sense that a fragrance is the personification of "me." That's sticky. That's loyalty. That's the complete antithesis of a commodity.

Wireline service is nearly impossible to personalize. But wireless service is nearly infinitely capable of segmentation, personalization and creation of niches because the handsets personify the service. This is a very big deal.

But back to HTC. It isn't clear yet whether the touchscreen interface itself will become into an actual niche, but that feature certainly is associated at the moment with devices we might say are "fashion phones." And there are two devices clearly in that category using touchscreen technology: the iPhone and the HTC Touch.

As iPhone sets records for sales of the first million units of a new handset, Taiwanese phone maker HTC says it has sold approximately 800,000 units of its Touch smartphone as well, over just about the same timeframe. While not yet available in North America, the Touch features the same sort of touchscreen interface used by the iPhone.

Both the Apple and HTC Touches have touchscreens, Wi-Fi and media playback.

HTC has already announced a successor to the Touch, the Touch DUAL, a phone that adds 3G broadband and a slide-out keypad, borrowing concepts from Research in Motion's BlackBerry devices. It should launch in Europe later this month.

Originally an equipment maker for carriers and other handset vendors, HTC in the last two years has embarked on a major campaign to sell its own branded phones. The company specializes in innovatively designed handsets and mobile computers, many of them aimed at the enterprise market.

Like most HTC devices, the HTC Touch and the Touch Dual use the Microsoft Windows Mobile operating system.

The company also has launched three other devices: a 3G version of the ultramobile Shift computer that runs on Windows Vista; the P6500, designed for tough environments such as hospitals and police forces; and the S730, an update to its popular S710 phone that like its predecessor includes a slide-out qwerty keyboard in addition to a traditional mobile-phone keypad.

Even the "fashion" segment is going to evolve. Verizon is rolling out devices aimed at the more price conscious end of the fashion segment, especially where what is really needed is voice and text, without heavy Web, media player or email support.

As it seems to be turning out, though mobile phone "service" might be something of a commodity, the handset experience is anything but, and getting richer all the time. That essentially means mobile service is the closest communications equivalent to "perfume," clothing, music and other human products that have very high and very personal human meaning.

Verizon Shows its Hand: Four New Phones

We will start to see what Verizon ihas been thinking as it reportedly turned down the iPhone and the rumored GPhone as well. There are business model issues to consider, of course. But there also has been speculation that Verizon had something in mind to satisfy the iPhone segment of the market.

Perhaps we will start getting our answers soon, as Verizon has introduced four new phones with high visual appeal, built by Samsung, Research in Motion and Lucky Goldstar.

The new Samsung Juke, BlackBerry Pearl, LG Venus and LG Voyager are being launched simultaneously. That's sort of like responding to a cannon shot with a salvo.

The "Juke," Verizon's name for the Samsung U470 and reportedly features 2 GBytes of storage, A2DP Bluetooth and a 1.3 megapixel camera. The Juke will be sold exclusively by Verizon Wireless and will be available in blue, red and teal at launch.

BlackBerry will contribute a new Pearl model with a 2 megapixel camera, A2DP and a 3.5mm audio jack. Tinted silver, a color exclusive to Verizon Wireless, the BlackBerry Pearl 8130 has built-in GPS.

The dual screen "Venus" slider by LG features a miniSD expansion card slot, A2DP, a 2 megapixel camera and touchscreen capabilities, including vibration feedback. Available in both black and pink, it features one screen with vibration feedback. It also offers a microSD memory port that accommodates up to 8 GB of expandable memory.

The LG Voyager features a large external touchscreen and a QWERTY keyboard, plus a second screen. Verizon says the phone will feature a full HTML browser, microSD expansion card, 2 megapixel camera, A2DP and built-in stereo speakers. The Voyager will be available exclusively from Verizon Wireless. There is a removable microSD memory slot that holds up to 8 GB of memory.

Juke, an ultra-narrow phone that comes in three colors and is shaped like a chocolate bar, is said to be aimed at fashion-conscious users who don't need heavy email or Web surfing. Voyager most nearly squares up with the iPhone, but also appears better suited for heavy email and text usage. The new Pearl appears aimed at work users who want to carry the same device with them in their roles as consumers.

Verizon Wireless has not given exact pricing beyond saying each phone would target a different segment and range from under $100 to about $400.

Carrier Fiber Plans Accelerating?

Ofcom, the U.K. communications regulator, hasn't come to terms with BT about ways to speed up fiber to customer investments in the U.K. market. Up to this point BT has objected to earlier proposals that would have applied relatively robust wholesale requirements to new optical access plant. Perhaps there is new hope for some compromise that reassures investors, speeds up fiber deployment and yet offers some hope of a return.

Around the world, fiber to customer deployments seem poised to accelerate, but both competitive providers such as Illiad in France and Verizon in the United States have been punished by the financial community for daring to proceed with such deployments, which are costly, no doubt. U.S. cable companies have the same problem. Every time there is a hint that capital spending plans might intensify, equity values get hit. Comcast appears to be under that cloud as well at the moment.

Irrespective of the competitive elements of such decisions--obviously the providers making the investments want to keep the rewards, if they can be had--these networks can only be built by private capital. And private capital keeps making clear concern about the payback, whether those investments are made by cable companies, incumbent telcos or competitive providers.

At this point it is a simple fact that the investment framework has to reassure the capital markets. Yes, competition is desirable. But that has to be balanced against capital markets that actually loathe competition. Let's hope Ofcom and BT can thread this needle.

at&t to Launch VoIP Bundled with fiber

By the end of the year, at&t U-verse customers will be able to buy voice services running over the fiber-to-neighborhood service, instead of running a separate circuit-switched voice network to customer locations. The move signals that at&t is completely comfortable with the ruggedness and dependability of its VoIP offering, and is moving towards IP-based voice that can be interwoven with other services at&t plans to offer.

The move also is an early harbinger of a time when VoIP widely will be used as a standard replacement for landline voice, much as cable companies now use VoIP to deliver "digital voice" services that are feature equivalent with plain old telephone service but use IP technology.

The new VoIP offerng also will not be based on the CallVantage platform, because CallVantage "doesn't scale," at&t executives say.

The new VoIP product will be available in markets where at&t delivers U-verse TV.
at&t says its upgraded network will reach about eight million homes by the end of this year. The company intends to pass 18 million homes by the end of 2008.

Apparently at&t plans to move slowly offering VoIP services that run over Digital Subscriber Line, though.

From at&t's standpoint, that makes sense. Having watched IP, flat rate plans, competition, mobility, family plans and other forces wipe out much of the profit in long distance, VoIP stands poised to attack voice-based local access revenues as well. at&t will move, when it has to. But it is hard to fault them for not wanting to hasten the revenue decline from that product line.

Nokia Navteq: a Service Provider?

Nokia is acquiring Navteq, a leading provider of digital map information for navigation systems and devices, Internet-based mapping applications, and government and business solutions. Navteq also owns Traffic.com, a Web service that provides traffic information and content to consumers. Navteq had 2006 revenues of $582 million and has approximately 3,000 employees located in 168 offices in 30 countries. Nokia is paying $8.1 billion.

By acquiring Navteq, Nokia will strengthen its location-based services and take a step away form being a device manufacturer and becoming an applications provider, at least in part. And why not? More and more of the value of any product are provided by the services wrapped around the device.

Nokia says it plans to use location capabilities to expand into areas such as entertainment and communities. In Japan, location services already are a fairly significantly used feature.

Time Warner Launches Business TV

Time Warner Cable Business Class has launched BusinessLink.tv, an IPTV service that delivers real-time, high-speed broadcast TV video service directly to the computers of its business customers in select New York and New Jersey markets.

The BusinessLink.tv service delivers high-quality news and information video programming to clients via cable modem across their enterprise LAN using IP multicast connectivity. It is, in other words, bandwidth efficient.

The television networks included in the BusinessLink.tv New York City offering are: NY1 News, CNN, CNN Headline News, CNN International, CNBC, CNBC World, Bloomberg TV, Fox News, Fox Business News, and The Weather Channel. This 10-channel IPTV delivery service requires a 4 Mbps core local area network bandwidth.

And you thought people were wasting time using Facebook! Just kidding. I do the same thing in sneakernet fashion, having one of the news channels up all day in the background while working. It is quite helpful. Of course, I'm in the news and analysis business, so it is simply another form of "scanning" the environment. I would not give it up.

Open Source or Proprietary? Even Split

When functionality is equivalent, IT security professionals have an almost equal preference for deploying open source software (53 percent) as commercial software (47 percent), according to a recent survey of 228 security professionals by Barracuda Networks.

In the survey, 80 percent of respondents cited pricing as the top reason for adopting open source software over commercial software, while 57 percent selected access to source code and 41 percent chose community code review as the primary reasons for open source preference.

On the other hand, the survey found that the top reason for deploying commercial software was vendor professional services, at 65 percent, while 47 percent of respondents named ease of adoption in their organization and 47 percent said automated updates were key.

Better bug fixes are one open source advantage. So is access to the source code. Proprietary software, on the other hand, benefits from the perception that it will be easier to deploy and support over time. We can argue about how long that will continue to be true. There isn't much doubt that open source also is becoming part of the larger fabric of software offered by suppliers who historically have offered proprietary solutions.

All of which suggests that open source simply has become another tool to use, when it works and when it fits.

BT Gets Jabber

Jabber, Inc. BT Group has selected the Jabber Extensible Communications Platform (Jabber XCP™) to provide instant messaging for BT's 21st Century Network (21CN) program. Jabber will license software to BT for consumer, government, and enterprise users worldwide. In addition, the engagement between BT and Jabber includes consulting and development services which will fully integrate the Jabber XCP platform into BT’s common capabilities network.

Integrating Jabber XCP will allow BT to extend messaging across applications and services, providing BT customers with a centralized view of message routing, one-to-one IM, group chat, offline messages, message history, file transfer, and interoperability with other messaging systems such as Yahoo!, MSN, Google, and AOL.

The 21CN program, BT Group’s ongoing network transformation project, will replace the United Kingdom’s incumbent Public Switched Telephone Network (PSTN) with an Internet Protocol (IP) system while facilitating additional services such as on-demand interactive television, mobile television, and mobile radio.

Skype Valued at $1.7 Billion

Skype is worth $1.7 billion, based on charges EBay has taken both for the Skype acquisition and payments to outgoing CEO Niklas Zennstrom, who has left EBay.

Since the second quarter, EBay CEO Meg Whitman has made clear its concern that Skype is not delivering financial results on the scale EBay had expected.

At the time of the acquisition, eBay and analysts trumpeted the move as a way to increase higher end auction sales by making it simple to connect buyers and sellers by voice. So far, it appears the synergies haven't materialized in any significant way.

Skype also has more competition these days from alternate providers offering calling from mobile handsets and standard analog telephones that provide a reasonable alternative for some applications.

PC-based calling remains the Skype mainstay, despite the availability of Skype-compliant phones, as probably had to be expected. There's nothing wrong with that. But the consumer electronics industry has proven the difficulty of getting mass adoption of specialized appliances of all sorts.

Then again, unified communications and messaging now have the attention in the business space, while video and audio get the attention in the consumer space. VoIP also is a victim of its own success. Now that it has become a mainstream product, it is, well, just a product.

Also, beyond obvious cost savings in the enterprise, small, medium business and consumer spaces, it might be hard to argue that VoIP has had the impact of text messaging, instant messaging, simultaneous ring, visual voice mail or "presence." True, some of those features are enabled by or enriched by VoIP, but the value is harder to convey in a marketing message, at least in the North American market.

We seem to have moved beyond the simple "cheap calling" stage and into a much more complex "new capability" stage in some sense. But that's a harder, more complex sell with a longer adoption cycle.

On the other hand, the market for IP-based replacement of voice lines is quite large, in comparison.

In its most recent quarter, Skype booked $90 million in revenue. Assume Skype does not worse than that for a whole year, generating $360 million in revenue. Attributing just $20 a month in revenue for U.S. digital voice accounts, and assuming just four million U.S. subs, the U.S. cable industry is earning $960 million a year selling VoIP services.

Even beleaguered Vonage, at its present pace, will book revenue of $784 million over a year.

Time Warner Fires Opening Salvo

Though Comcast won't start firing its guns until early 2008, the U.S. cable industry has begun its assault on small business customer accounts. Time Warner Cable has rolled out a phone service for small and medium-size businesses in Central Ohio.

Time Warner introduced its Business Class phone service in the Columbus area Sept. 21.

A Time Warner analysis estimated there is a $40 billion market for business phone service in the company's eight-state service area, $9 billion of which is made up of small and mid-size companies, according to Ted Stine, Time Warner VP.

Time Warner first is targeting its existing business customers in the region who already subscribe to the company's Internet and cable video services. Companies that sign up for phone service will then get a discount on all their services. Once it has saturated that segment, Time Warner obviously will start cold calling prospects who have not existing business relationship with the company.

The biggest share shift should occur in the small business segment (four and five access lines, especially), though most observers would define the segment as "four to eight lines."

Telcos and Web Communications: Who Wins?

Attention might not be the basis for every revenue model, but it clearly underpins most media businesses. It might underpin other businesses as well, including communications.

So note changes in how and where people in France are spending their "communications" time. Since 2000, attention and time spent have been shifting towards Web-based applications and pursuits, and away from telephone-based communications. To be more precise, 53 percent of "communications" or more might be said to originate in some Web related activity, not a classic "pick up the phone" activity.

Time isn't exactly money, so attention and usage do not translate immediately into revenue. But attention sooner or later will create the possibility of revenue. And if this sort of shift in how people communicate continues, revenue opportunities and potential inevitably will shift.

That doesn't mean revenue-generating endpoints such as mobile phones, other communicating devices or "access" services will stop proliferating. It simply is to point out that when so much communications activity originates in Web-based things, whether enterprise or consumer driven, something new will happen, revenue-wise. It has to.

SlingPlayer for Symbian Phones

The SlingPlayer for Symbian S60 phones is out of beta and now available for sale. The software allows a selection of Nokia phones to stream television from any Slingbox.

SlingPlayer works on U.S. models of the Nokia E65, N75, and N95. It works on in the Nokia E65, N73, and 6120 handsets elsewhere. It already is available for Windows Mobile devices.

The Symbian software will cost $30 in the U.S., C$35 in Canada, and £20 in the U.K. market. The fee might be waived for U.S. Nokia N95 buyers. A free 30-day trial version will be made available. The Symbian SlingPlayer joins versions already available for Windows Mobile and Palm OS products, as well as Windows and Mac computers.

Still missing from the list of supported devices is the BlackBerry, although that undoubtedly is in the works. Of course, one sort of questions why, in a rhetorical I sense. Obviously Sling would want access to the large installed base of BlackBerries.

The issue is that the BlackBerry really isn't a very good media player, though it excels for email, obviously. If it is me, I would use the Nokia N95, which is a killer media player. I wouldn't use the N95 as my email device, however.

The point is that we are getting to a time when mobile devices really have to be optimized for one or just a couple applications: no single device is the best at all functions. To my way of thinking N95 is an iPhone, even without the touchscreen interface. Neither device makes any sense to me as an email device.

I was kicking around ideas with Stan Little over at Glenayre recently and he is experimenting with the notion that a person's identity increasingly can be tied to a single device. And he's right about identity. Whether that identity can effectively be broadened to encompass all the really important parts of a user's "life" roles, preferences, moods and tastes is more debatable. Stan is more optimistic about that than I am at the moment.

My issue with the single device is not, I suppose, so much with the "identity" so much as with the ability of any single device to competently handle all the tasks. I just can't see the email/work function and the media player function being something a single device does at a "best of breed" level in both scores. And it isn't so clear that any device optimized for either email or media playing is going to work as the absolute best "phone." The BlackBerry is adequate as a phone. But it isn't great.

Maybe we need a more robust version of a Subscriber Information Module so we can port the identities to whichever device makes the most sense "at the moment."

Xohm: No Contract, No Subsidy, No Termination Fees, No Obligation

Sprint says Xohm WiMAX customers will not have to sign contracts and won't charge any termination of service fees either. Users will buy their own air interface cards without Sprint subsidizing the hardware. The whole message: "You don’t owe me anything, I don’t owe you anything."

Well, not quite. Users might just be offered subscription plans whose cost declines over time as the length of the relationship grows. Nice. Reward a customer for loyalty. Of course, Sprint also knows that customers with long tenure are the most profitable customers it has. So there is more margin to shave to keep those customers happy.

Xohm is expected to operate at aobut 2 Mbps to 4Mbps downstream and 1 Mbpt to 2 Mbps upstream. Pricing probably will be set about about $30 or $35 a month.

It is a small step, but one of many being taken throughout the wireless ecosystem to bring more user freedom.

Vonage Doesn't Have to Pay $58 Million, 5.5% of Revenue to Verizon: Appeals Court

At least, not yet. The U.S. Court of Appeals says the U.S. District Court has to take another look at one of the three Verizon patents Vonage is said to have violated, though it upheld two of the three decisions as originally made.

Further, the Court of Appeals vacated the entire award of $58 million in damages and the 5.5 percent royalty. The Court of Appeals sent the case to the U.S. District Court and directed that the court retry those aspects of the original case.

Vonage has work-arounds in place, and argues none of the patents should have been granted in the first place, though it seems unlikely to an untrained observer that Vonage can get the courts to agree.

Still, it is a partial victory. Perhaps the damage award and royalty payments will be lowered, ultimately. And, at this point, a partial victory is about the best news Vonage has had on the patent front this year.

Mobility, SaaS, Laszlo, Google, et al

As work and workers become more mobile, enterprises are starting to use more Web-delivered applications. As that starts to happen, Web-based desktops and productivity suites are going to make more sense. Enter Laszlo and the Laszlo Webtop, referred to as a Web 2.0 Desktop. Laszlo Webtop has developed bundled solutions for three target markets: service providers, enterprises and developers.

Laszlo Webtop for Service Providers comes bundled with Laszlo Mail and Contacts and supports customized Web portals. Laszlo Webtop for Enterprises comes bundled with Contacts and optional Laszlo Mail.

Meanwhile, the Laszlo Webtop SDK for Developers offering is a software development kit allowing developers build their own Webtop solutions compliant with the Webtop.

This just makes sense. If one is going to build a distributed applications architecture assuming broadband access, then assuming a Web-based desktop also makes sense.

Vonage Loses Sprint Lawsuit, Has to Pay $69.5 Million

A federal jury has ordered Vonage Holdings Corp. to pay $69.5 million in damages for infringing on six telecommunications patents owned by competitor Sprint Nextel Corp.

Vonage also will have to pay a 5 percent royalty on future revenues. If neither this decision nor Vonage's Verizon patent infringement decisions are overturned, 10.5 percent of Vonage's recurring revenue will have to be paid out in damages to Verizon and Sprint together.

The upfront damage awards are hefty enough. The recurring 10.5 percent of gross revenue that will be lost might be more significant.

Vonage says it would appeal the decision but would also begin developing technological workarounds that it said would skirt the disputed technology.

Earlier this year Vonage also was ordered to pay Verizon $58 million in damages plus 5.5 percent royalties on future revenues. That decision also is under appeal.

Between the distractions (getting the work-arounds into place; the cost of further appeals), vigorous competition from cable companies and the damage payments, I suppose one now has to wonder whether Vonage can pull out of a dangerous spiral.

Global Voice Traffic Keeps Growing

Despite all the new ways people can talk to each other, and all the other ways people can communicate using text, global voice traffic keeps growing at a steady rate, according to TeleGeography.

Friendvox Will Unify IM Boxes: No Download

I realize there are other ways to federate instant messaging clients. But it will be nice to do so without adding one more client. Hopefully this Facebook app will install and work as simply as most other Facebook apps. Sept. 28 is the expected launch.

MySpace Mobile Phone Coming....Sort Of

Social networking Web site MySpace is launching free, advertising-supported cell phone sites next week as part of a wider bid by parent News Corp. to attract advertising for mobile Web sites, according to the Associated Press.

Fox Interactive Media, which oversees News Corp.'s Internet properties, said it also plans to roll out versions of FoxSports.com, the gaming site IGN, AskMen and its local TV affiliates in the coming months that will work on cell phones that can access the Internet.

The company already offers subscription-based versions of MySpace through at&t and Helio wireless services. Those versions include special features integrated into specific handsets, such as uploading cell phone photos directly to a user's profile page.

The new version reportedly will work on all U.S. mobile carrier networks and will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends.

So I suppose we now have to add "social networking in my pocket" to the expanding set of mobile device niches. Not a phone, though.

iPhone Wins with Software Defined Radio

Software defined radios--software that emulates all the functions of one or more radio transceivers--have been talked about for at least a decade, and at least one company--Vanu--has had its SDR approved for U.S. use by the Federal Communications Commission. The attractions are many: mobile communications becomes an application any device can be given; dedicated firmware and hardware are unnecessary; multiple radios can be made available to any single device; smaller radios are possible.

An SDR could mean a global mobile device, able to work in Japan, on GSM or CDMA networks, with Wi-Fi or other wireless networks. Some users would love it. Mobile carriers have to be ambivalent. Sure, you'd like to sell a true "global phone." But then you also lose control of the end user and the device. Any truly global phone necessarily works with any mobile provider's network, as well as with Wi-Fi and potentially other wireless platforms--such as WiMAX--as well.

On the other hand, looking at this from a consumer device manufacturer's point of view, SDR is a wonderful thing. If you sell mass market communicating devices all over the world, and have to deal with disparate radio infrastructures and protocols, you want SDR because it streamlines the entire manufacturing and logistics process.

You build one device, supporting multiple radio types; not multiple devices designed to work on one sort of radio platform. If you are Apple, in other words, SDR is a really nice thing. It's a nice thing if you are Nokia as well. Nokia just has more entangling relationships with customers that undoubtedly will press Nokia not to make SDR available.

Also, no particular business model inevitably is bound up with the use of SDR, though obviously the technology lends itself to more open and flexible end user models. One can envision open, unlocked business rules on one hand and walled garden rules on the other where "roaming" is possible anywhere in the world so long as the user has agreed to pay for that privilege.

The point is that by fits and starts, we see more openness at both the device and application layers of any communications-enabled business, corresponding to the openness IP itself has brought to transmission.

Now This is a Smart Move

T-Mobile has rolled out the BlackBerry Curve 83200 with Wi-Fi support, so the device can be used with T-Mobile's Hotspot@Home system or on public hotspots. As part of that plan, the Curve can be used for unlimited calling from the home or public Wi-Fi zones. That costs an extra $10 a month.

The in-home router T-Mobile sells is optimized for voice and costs about $50 but there is a rebate, we understand.

Dual-mode service with limited or unappealing handsets is a main reason why femtocells, which place no restrictions on end user handset choice beyond the limitations of handsets any given carrier will support, have seemed to me a wiser choice for fixed-mobile consumer applications. Giving Curve Wi-Fi is smart.

Internet Phobia?

BT wants to find out why some people, even living in homes with broadband connections, resist using the Internet. About 39 percent of U.K. households do not have Web access. Fear of technology might be one reason, BT theorizes.

To acquaint them with online life, four subjects have been given a broadband link, a laptop, webcam and a digital camera. A two-month training plan has also been developed that will introduce them to what they can do on the Internet.

Writ large, that's one way to deal with any lingering short term "digital divide." Long term, I don't think there's a problem. There used to be a joke several decades ago in the U.S. cable TV industry about "resisters." Basically, the punch line is that the "resisters" are dying. There was a clear shift in the character of demand for television that now has fully established itself, as tough as it might have been to get the new behavior established in the first place.

The same thing is going to happen with broadband. Demand simply is shifting. All of which suggests BT ultimately will move beyond its fiber-to-cabinet; copper drop strategy and move ahead with a full fiber-to-customer upgrade. Like any other tier one service provider it is going to hold out for the most favorable deal it can get from regulators. But there's not much doubt about the long term outcome.

Bandwidth consumption is going to outstrip anything all the wireless networks together can provide, which makes the fiber connections an essential part of the future bandwidth story.

U.S. cable operators used to "diss" switched digital video" as well. Now they're starting to embrace it. They still say in public that fiber-to-home networks are way too expensive, and are unnecessary, from a cable standpoint. That's not necessarily what executives think privately, though.

Nor is it the case that resisters stay that way forever. Those of you with grandparents, who are grandparents or who have pre-baby boomer relatives know that mobile phones, PCs, cable and Internet connections frequently are used daily by people who might be prime "resisters." And the people who move them into the "connected" camp are friends, children and grandchildren. So BT might consider a "friends and family" program that enlists other family members in providing training and support for resisters. That's the way it works anyway.

Boomers Buy More than 1/3 of all Music

The trick is to get them to buy digital downloads or music subscriptions as well as CDs, which they buy in great quantities. More than 70 percent of the 76 million baby boomers in the U.S. report buying music in the past year, making it the most important buying segment for CDs and an increasingly important market for digital downloads, according to Russ Crupnick, entertainment industry analyst for The NPD Group.

Baby boomers born between 1941 and 1964 now account for a third of all music sales. About 68 percent buy CDs. About 26 percent purchase both digital music and CDs, while just six percent purchase only digital music downloads.

Nearly 40 percent of boomers report that they regularly visit the music retailers or the music section of retail stores.

NPD believes more attention to the boomer segment could yield $700 million to $1 billion in potential incremental sales of both CDs and digital downloads from baby boomers.

Nothing personal: Just don't put them on iPod billboards!! That would not, as they say, be a pretty picture

SK Telecom to Carry Helio

SK Telecom says it will invest up to an additional $270 million to support Helio, effectively signaling that Earthlink will not be investing further in the joint venture. So the issue is how Earthlink can exit the joint venture.

No Contract, No Locking, Nobody

Sprint CEO Gary Forsee says Sprint is thinking about expanding the test area for an unlimited calling plan that doesn’t require customers to sign a contract. That's something Leap Wireless and MetroPCS already offer. Nokia meanwhile appears poised to start selling unlocked N95 series really-smart phones imminently. So far, no carriers seem willing to do both.

Of course, there are good financial reasons why carriers like contracts and locked phones. The former provides a more predictable revenue stream and the latter ensures lower churn. Apple doesn't like unlocking either, as it now participates in the recurring revenue stream.

At least some users would benefit from unlocking and contractless service. Anybody buying a Nokia N95, for example, is spending enough on a device that the portable computer (it seems too limiting to call it a phone) clearly is more important than any network.

Of course, the carriers increasingly will find themselves in the position of angering power users who can figure out other ways to use unlocked devices, with or without contracts. To the extent that an N95 really is a mobile media and Web platform, outfitted both with Bluetooth and Wi-Fi, users can simply avoid any carrier "calling plan" if they are willing to put up with a little hassle and use Wi-Fi for connectivity.

That won't be very desirable for anybody who really needs mobile calling, but lots of people choose to carry two devices in any case. So maybe one of the new choices is one device for mobile email and voice, and the second for rich media and rich Web browsing.

It isn't so clear to me that a heavy email user is going to opt for an N95 in any case. The N95 excels as a rich media device (audio and video performance is spectacular) but won't satisfy a BlackBerry addict. The BlackBerry, though, isn't so great as a phone and really doesn't measure up as a media player.

Carriers might not like it, but devices are becoming the drivers of purchase and use behavior for a growing segment of the user base. Sure, the presence or non-presence of 3G capabilities is an issue. Operating system is getting to be more important. And then there's the blasted CDMA or GSM choice to be made. Pricing plans still are important, to be sure. But device coolness arguably is enough to outweigh the other considerations.

N95 might be among the first devices that test the theory that a powerful enough rich media device can get traction using Wi-Fi connectivity as an alternative to "mobile network" connectivity. Broad traction still will require 3G GSM. But N95 is the first device I've experienced that gets one to thinking about using it in a way similar to a laptop, rather than a phone. A Wi-Fi-equipped iPod is sort of in the same category.

Google Will Buy 30% of Servers in 2010

In 2010, say analysts at the Gartner Group, Google alone will consume 30 percent of all the world’s servers. That's three out of 10 of all servers manufacturing globally that year. That's some serious scale! And explains why Google buys so much optical bandwidth, and is investing in its own cable.

Google to Build Own Trans-Pacific Cable Network?

Up to this point, it has been local telcos, mobile providers, newspaper publishers and others in the media business who have had to ponder what Google might be up to. Trans-oceanic fiber providers might be next. Google apparently is planning to lay its own multi-terabit undersea communications cable across the Pacific Ocean, to be lit in 2009, according to Communications Day.

The Unity cable has been under development for several months. As envisioned, Google will join with other carriers to build the new multi-terabit cable. Google would get access to a fiber pair at build cost.

Partners haven't been announced, but rumors indicate Telekom Malaysia and Verizon, each involved in rival new cables, won't be part of the Google consortium.

There's not necessarily any broader agenda beyond securing low cost bandwidth on a major and growing oceanic crossing. Aside from that, the new capacity helps Google peer directly with Internet Service Providers in Asia.

Google's move still could be disruptive to the capacity industry, though. Obviously, Google's new capacity will take some revenue out of the retail market place.

TeleGeography Research says existing trans-Pacific cables provide on average 3.3 tbps of capacity and that carriers have increasingly been upgrading their existing cables or planning new ones. Trans-Pacific bandwidth demand has increased 41 percent between mid-2006 and mid-2007.

Metro Bandwidth Still Worth Investing In: Zayo

Demand for metro bandwidth still is a good reason to create a company focused on layer one and layer two metro access, say the founders of Zayo Bandwidth, a regional provider of fiber-based access and metro transport. Zayo has acquired PPL Telcom, a 4,600 fiber-route-mile network based in Allentown, Penn. serving areas throughout the Northeast, and Memphis Networx, a 200 fiber-route-mile network serving the greater Memphis, Tenn. area.

In addition, Zayo Bandwidth has signed definitive agreements to acquire Indianapolis, Ind.-based Indiana Fiber Works (IFW) and Minneapolis, Minn.-based Onvoy, Inc. which are expected to be finalized in the third and fourth quarters of 2007, respectively. Combined, the four companies represent $125 million of annual revenue and 8,400 route miles of fiber.

Led by industry veterans Dan Caruso and John Scarano, both formerly with ICG Communications and Level 3 Communications, Zayo Bandwidth has secured access to $225 million from leading venture capital firms, including Columbia Capital, M/C Venture Partners, Oak Investment Partners, Battery Ventures and Centennial Ventures.

According to the Telecommunications Industry Association, demand for broadband has driven the highest telecom industry growth since 2000. Overall U.S. telecom industry revenues grew 9.3 percent in 2006, while the worldwide market grew a robust 11.2 percent.

Zayo focuses on private line from DS1 up to OC-192; Ethernet running from 10 Mbps up to 1 Gbps; dedicated Internet access at T1 and above; wavelength services ranging from 2.5 Gbps to 10 Gbps and collocation space.

Global revenue growth for metro access services has grown at about 124 percent annually since 2001, says Cisco Systems.

"Steve Jobs Was Right"

"Steve Jobs was right," says at&t VP Ralph de la Vega. Right about slashing the price of the iPhone sooner than att&t would typically have done. AT&T Inc., owner of the biggest U.S. mobile phone service, said the increase in sales of the iPhone has been "significant" since maker Apple Inc. cut the price by a third. How much?

at&t appears also to have been at least partly right about the iPhone's impact. Sprint and Verizon executives both acknowdledge at least a temporary increase in churn immediately after iPhone hit the market, and again after the recent price reduction.

Perhaps of more lasting significance is the ability of iPhone users to use Wi-Fi for connectivity in place of the EDGE network. Though it is doubtful many users will settle for a single "do everything device" that primarily connects only when within range of Wi-Fi networks, it will be interesting to watch whether there is a developing market for devices used primarily as media players.

The reason is simply that if the primary use mode is media, not voice, users might be able to live with sideloading and "spot" access of connectivity at home, at work and at public hotspots. And if there is a market for that, there could be a market for other Web-based devices that have value even when they are not "always connected."

That in turn is significant because it could offer some new options for providers of services and devices optimized for Web applications rather than voice. The analogy is notebook computers, that are highly useful even though they are not always connected. It might be possible to create significant new business models for devices that are "mobile" but not "always connected."

That, in turn, is highly significant for application or service providers that do not want to depend on the legacy mobile connectivity providers for access and transport.

Orange Gets iPhone in France

France Telecom's Orange has sealed the iPhone deal, it appears. France Telecom CEO Didier Lombard says the iPhone would be distributed in France "before Christmas, probably in November." Orange does not appear likely to subsidize the handset.

Address Books for Landlines?

Embarq is adding an address book feature to its home phones, allowing people to look up an entry and dial it by speaking a name into the handset.

Embarq also is testing a text-messaging function for home phones in some markets. When a text message is sent to a land-line number, the home phone rings, converts the message into audio, and plays it back. The land-line phone user can reply with an audio message or press a button to send a standard text response.

You have to admire Embarq's efforts to add features to landlines that are standard for mobiles. You also have to wonder how well address books, which are personal, and text messages, also personal, are going to translate into a "public" setting, which most landline phones represent.

One-person households won't have that problem, of course. "Public" and "personal" are the same, in such cases. But it will be an interesting test.

Sprint Launches Airave Femtocell Service

I happen to live in one of the neighborhoods in Denver where Sprint is rolling out its new Airave femtocell network, and i do have mobile service with Sprint (I also use Verizon, T-Mobile and at&t). That doesn't necessarily mean I am going to test it or use it, but I can. The service also is available in some parts of Indianapolis.

Make no mistake: this is a landline replacement service. In my case the incremental cost of the femtocell service, offset by the abandonment of my landline, would save $20 a month or so. That might be an interesting number for lots of consumers.

It makes possible unlimited incoming, outgoing, and long distance calls using any handset Sprint sells and supports. As I have argued before, handset freedom will be vitally important in the fixed-mobile convergence space. Dual-mode phones don't make as much sense to me, for precisely that reason.

Airave vastly improves indoor mobile coverage (something desperately needed in my neigborhood. All you have to do is watch all my neighbors out on their front porches talking on their mobiles.

Airave costs $15 per month for individuals and $30 per month for families, above the existing wireless plan any user has.

The Airave base station costs $49.99. Sprint plans to make the AIRAVE available later this year to customers in the remainder of Denver and Indianapolis, along with Nashville, and to customers nationwide in 2008.

The Samsung-built Airave base station covers approximately 5,000 square feet. Up to three Sprint subscribers can use the AIRAVE simultaneously as long as they are registered with the device.

Airave is Sprint's answer to T-Mobile's HotSpot@Home service. So watch the deployment numbers, when they ultimately are available.

T-Mobile Sells iPhone in German Market

T-Mobile will sell Apple's iPhone in Germany for 399 euros ($558) each. Service plans weren't immediately announced. As in the United States, where Apple picked at&t as its exclusive network services provider, customers in Germany will have to sign up for two years to buy and use the 8-gigabyte version of the phone-iPod-Web appliance.

In the U.K. market, where O2 has a five-year exclusive on service for the iPhone. And a pattern seems to be developing in terms of the business model.

Estimates of how much revenue O2 is going to share with Apple vary between 10 percent to 40 per cent and it is likely both figures are correct. The delta is what Apple gets paid based on the degree of churn the device can induce.

Apple might get 10 percent of revenue when an existing O2 customer gets an iPhone, but Apple might get the heftier percentage when a customer switches service providers and becomes an O2 customer.

at&t pays Apple $3 a month when one of its existing customers buys an iPhone plan, but $11 a month when a customer switches carries and becomes an at&t customer.

O2's ARPU (Average Revenue Per User) is around £23, so 10 per cent of that would be £2.30 while 40 per cent comes to £9.20.