Web TV Passes Legacy TV in Australia

Nielsen Online reports that, for the first time, Australians are spending more time online than they were watching TV. Nielsen Online says users are watching an average of 13.7 hours a week watching Internet TV compared with 13.3 hours of legacy TV.

Roy Morgan claims that the difference is because it used a representative cross-sample of the Australian population, including heavy, medium, light and non-Internet users, while the Nielsen data was based on an online panel that didn't cover all Australians.

UGC: No Business Model?

eMarketer projects that the number of US User-Generated Content creators will rise to 108 million in 2012, from 77 million in 2007.

But, despite the projected growth in the numbers of content creators, the monetization of user-generated media has not materialized, eMarketer suggests.

Retail models have not caught on, either, and advertisers are reluctant to attach their brands to content that is, by its nature, unpredictable, eMarketer says.

Well, what did you expect? Is there a business model, beyond connections, for email or chat or talking? People create because they can, and they want to. Service providers will make some money providing the ability to do so. There might be a bit of advertising for email or chat apps.

But for the most part, user-generated content will not generally lead to a business model for its creators. UGC is not really a "medium." It is communications. Some UGC will be monetized, just as some independent films wind up getting commercial success. It happens. But i won't be common.

iPhone Keyboards, Bigger Screens?

As much as Apple's iPhone has surfaced latent demand for new mobile Web behaviors, the next rounds of development will have to tackle more prosaic issues: proliferating the product line to better address market segments: heavier texters who like keys and larger screens for users who really want to use the device as a notebook substitute.

There is every likelihood, in other words, that the iconic iPhone form factor will diversify, the way iPods have, with models optimized for particular use cases.

Industry sources told Times Online that the device will have a "radically different" appearance to the current device, which has a 4.5 inch screen and slick, aluminium backing. Among the possibilities are flip version, which would enable the screen to be larger, and a sliding model with a regular qwerty keyboard - as opposed to a touchscreen one.

The Financial Times even thinks Apple will within a year or so change distribution deals, abandoning single-carrier franchises as early as June 2009 in the U.S. market and October 2009 in the U.K. market.

That of course likely will lead to a change in revenue streams, from revenue-sharing payments to transactions and Internet advertising. That would be a fairly abrupt shift of income stream, but a necessary step to build greater device handset volumes and ad potential.

More Aggressive Prepaid Mobile Efforts

Prepaid mobile calling offers have gotten more competitive over the past year as the overall market continues to saturate. T-Mobile launched FlexPay, providing prepaid customers the same plans as those currently available to contract subscribers.

Verizon Wireless enhanced its pay-as-you-go INpulse plans by creating lower voice and messaging rates. Boost Mobile, meanwhile, introduced Unlimited by Boost to counter prepaid offers from Leap Wireless and MetroPCS.

As carriers and mobile virtual network operators search for new subscribers, they increasingly are targeting the prepaid customer base. Not only are more carriers launching postpaid-like monthly prepaid plans that include buckets of minutes and value-added features, but they are also extending value-added services to standard prepaid services such as messaging buckets and even unlimited messaging.

Carriers have even started selling prepaid customers subsidized handsets, which is something that was unheard of in the industry just 18 months ago.

T-Mobile arguably is the most aggressive of the major carriers in competing with the regional prepaid players. Up to this point AT&T and Verizon Wireless have mostly avoided chasing that customer segment with any vigor.

Broken Internet by 2010?

"We are going to be butting up against the physical capacity of the Internet by 2010,"
Jim Cicconi, AT&T VP, says, in a speech reported by the Financial Times.

"In three years' time, 20 typical households will generate more traffic than the entire Internet today," Cicconi maintains.

He argues that the "unprecedented new wave of broadband traffic" will increase 50-fold by 2015.

"Eight hours of video is loaded onto YouTube every minute," he says, predicting that "video will be 80 percent of all traffic by 2010, up from 30 percent today."

eBay Considering Skype Sale?

At the CTIA Wireless meeting recently, people were wondering where some of the Google voice guys were. The speculation was that Google was mulling a purchase of Skype.

So now eBay CEO John Donahoe says in the Financial Times that "if the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it." Any such decision and sale won't come until the end of this year, though.

Skype had revenues of $126 million for the quarter, up 61 percent year over year, and that it added 33 million new registered users, giving it a total of 309 million registered users around the world. eBay indicated it even hopes to make a profit - for the first time - on Skype this year.

The $4.2 billion eBay acquisition of Skype had been to meld Skype into eBay's core auction businesses. So far, that has proven to be a virtually insurmountable problem.

Bubble Bursting Time Again?

Fearing a reprise of the 2000 catastrophe which wrecked hundreds of tech companies, big firms in the sector are hoarding cash. The broader problem is that these firms don't need it. In the last major contraction cycle, it was all the little startups who died when the capital markets slammed shut.

Something like that, but on a lesser scale, is about to happen again. That means the big cash-flush firms will once again have a chance to snap up assets while some of the smaller startups simply vaporize.

Of course, it takes less capital to innovate these days, compared to 2000. But we are in for a winnowing period, nevertheless. I don't think anybody thinks we collectively are in a "bubble" of manic proportions. Wiser heads now prevail just about everywhere.

The similarity is simply that there's lots of innovation, but with a period of capital stringency upon us, many of the innovators won't be able to sustain their development efforts. The lack of access to capital won't kill innovation. Perhaps innovation won't even slow in ways that are industry damaging, overall.

Amazon, eBay and Google were among the notable successes of the late-1990s wave of innovations. One would have a hard time coming up with a similar list of financially-successful firms among the most-recent generation of innovators.

History doesn't necessarily repeat. So we are not seeing an "Internet bubble" all over again. But cycles of capital availability are important. Let the winnowing begin.

Transfer Money Using Your Mobile

Obopay says customers can now use their existing bank accounts to send and receive money using their mobile phones. With Obopay’s mobile money transfer, non-customers can pick up payments without signing up for Obopay.

These innovations make it easier than ever for any bank customer to conveniently send and receive payments from their mobile phones.

By linking an existing checking or saving account — at any American bank — with Obopay, customers can send money directly from and receive money into that account using any mobile phone.

Anyone can pick up money received by having it deposited directly into their existing bank account or by requesting a check, without having to sign up with Obopay.

“Obopay’s mission has always been to provide the best tools possible to conveniently get, send and spend money from any mobile phone,” said Obopay Chief Executive Officer, Carol Realini. “Now we provide it directly from any bank account."

Many new applications just take a while to get traction. Mobile payments seem to be one of them, at least in the U.S. market. Japan has been the model, but over the years there have been significant cultural differences between regions of the world that could affect market adoption.

A decade ago it remained true that Europeans preferred debit cards while Americans preferred credit cards. But as with the text messaging habit, U.S. consumer behavior is starting to resemble that of other regions. Mobile payments still have some ways to go before becoming a natural habit for U.S. users.

80:20 Rule Holds in Rural Markets

Wireless "unlimited" plans exist for one reason: to retain the loyalty of the heaviest users--synonymous in many ways with "best customers." But that same sort of thinking increasingly should be seen in the broadband services and wireline customer business as well.

John Rose, president of the rural telephone trade group OPASTCO, says not only that fiber to the home is coming for rural telcos, but that symmetrical bandwidth is coming as well. But that doesn't mean every customer will buy every service. That's a big change for rural telcos, who are used to nearly universal take rates.

Some providers already are finding that even when triple play services are available, a third of customers only buy voice, a third take video and voice while a third take all three services, he notes.

So even on the wireline side of the house, high-end customers are emerging. So it will be really important for rural telcos to take care of those best customers, Rose says.

IPTV: Barking up the Wrong Tree?

Analysts at Accenture say service providers might be taking the wrong route in emphasizing IPTV and video on demand when the future might well favor over-the-top video viewing. Not many service providers agree, based on where money is being spent today.

It is hard to argue with survey findings Accenture points to: an overwhelming percentage of global consumers want to download, stream or otherwise consume video content in non-linear fashion.

That isn't to say all consumption will be non-linear. But to the extent consumers increasingly want to watch what they want, when they want it, Accenture analysts think over-the-top could well become the preferred choice.

3G iPhone to Download at 7.2 Mbps?

Is it possible the new Apple iPhone might run as fast as 7.2 Mbps in the downlink? Some chip-level sleuths think so. The Infineon chipset some think will power the communications link for the 3G version can support 7.2 Mbps in the downstream.

Live recording and two-way video calls also ought to be possible, providing Apple adds a front camera and perhaps video chat capabilities.

For a mobile smartphone, that would be ludicrous speed.

Grande Communications: Multitasking on One Screen

Grande Communications, a San Marcos, Texas-based broadband provider, is launching a multiplexing service that allows viewers to watch as many as five discrete live video feeds on a single screen.

GrandeVision will launch in Austin, at no additional charge for its digital cable customers. Users will be able to use their remote controls to navigate between channels and interact with Web video and banner ads.

Grande provides Internet, local and long-distance telephone and digital cable in parts of Austin, Corpus Christi, suburban northwest Dallas, Midland, Odessa, San Antonio, San Marcos and Waco.

Sports fans will go crazy!

Telcos, Satellite Providers Picking Up Customers

In any competitive market with a leading incumbent and many challengers, one normally would assume that the direction of market share shifts would be away from the incumbent and towards challengers, assuming those challengers are reasonably competent at crafting offers and delivering on their promises.

And that is just about what ChangeWave survey suggests is happening in the mass market video arena. A February survey suggests that video consumers who plan to switch providers are disproportionately switching to new providers.

Asked the names of their planned new providers, about 30 percent said they would switch to DirecTV while 28 percent said they would switch to Verizon FiOS. About 14 percent said they would switch to at&t while 10 percent said they would switch to Dish Network.

That's 38 percent choosing satellite providers and 44 percent choosing telephone company video services.

Mobile Web: 38% Euro Usage by 2013

Analysts at Forrester Research say 38 percent of mobile phone users in Western Europe will use mobile Internet services by 2013. That's 125 million Europeans accessing the Web regularly from their mobile phone, triple the number that do so today.

As that happens, something will start happening with mobile advertising, no matter how undeveloped the art is at the moment. Forrester reports that 83 percent of marketers it surveyed recent believe mobile advertising will become more effective over the next three years, despite a finding that just seven percent of users "trust" mobile ads.

That's just the nature of the business these days. Communications service providers are in the midst of transformation efforts that require them to replace most of their current revenue with new sources. Do they--does anybody--have absolute crystal clear vision on precisely how all that will happen? No. Will it happen? Yes.

Is that quite a lot of uncertainty? Yes. But will service providers get there? Yes. In that regard, the communications business is no different than lots of other businesses these days. Most of the products lots of companies will be selling in 10 years haven't been invented yet.

How Many WiMAX Providers

A business associate asked how many WiMAX operators might be active globally. Maravedis says they have profiles on about 256 operators globally, and I assume there are others possibly too small to have been profiled yet, or who have not yet begun operation. Given the large number of small independent wireless ISPs just in the United States, it seems likely many will kick the tires on WiMAX gear.

Amazon Adds Elastic Compute Cloud Persistent Storage

Amazon is adding persistent storage for users of its Elastic Compute Cloud. These volumes can be thought of as raw, unformatted disk drives which can be formatted and then used as desired (or even used as raw storage if you'd like), Amazon says.

Volumes can range in size from 1 GB on up to 1 TB; developers can create and attach several of them to each EC2 instance, Amazon says. They are designed for low latency, high throughput access from Amazon EC2. Needless to say, you can use these volumes to host a relational database.

Users also will also be able to perform "snapshot" backups of your volumes to Amazon Simple Storage Service, a feature that can be used to create new volumes or to roll back stored data to an earlier point in time.

"The snapshot is extremely powerful technology and allows for building highly fault-tolerant applications operating world-wide," says Werner Vogels, Amazon CTO. "Combine these snapshots with Availability Zones and Elastic IPs and you have all the tools to manage and migrate even the most complex of applications."

Both of the new innovations make it easier to envision use of cloud computing resources as the way to host Web-accessed applications for just about any sort of application, especially globally.

AOL Ad Net Hits 91% of U.S. Internet Audience in March

Each of the top 15 ad networks delivered ads to at least half of the total U.S. Internet audience in March, says ComScore. Platform-A, the AOL ad network that combines Advertising.com, Quigo and Tacoda, served ads to 170 million U.S. Internet users in March, representing 91 percent of the total U.S. online population, to rank as the top ad network.

That's not to say 91 percent saw or interacted with every ad, but that the network placed them. That's serious reach, on at least one dimension.

On a stand-alone basis, Advertising.com would rank as the top ad network with a reach of more than 167 million Internet users. Yahoo! Network ranked second with a reach of 160 million, followed by Google Ad Network (152 million) and Specific Media (140 million).

As ad networks have expanded their reach and influence online, a new crop of ad networks has surfaced to serve specific demographic and behavioral target segments, says comScore

Snap Shots Network delivers ads to users of Snap.com’s Snap Shots. The network reached more than 18 million U.S. Internet users in March. Widgetbucks Network delivers contextually relevant ads through a widget, and had reach of 9.5 million, while NeoEdge Game Network, which delivers ads through games, had a reach of nearly 1 million.

Other ad networks on this list target specific audience segments, such as HispanoClick by Batanga (Hispanics), Indieclick (young influencers or “tastemakers”) and The Heavy Men’s Network (men).

Waiting for FiOS

We haven't seen any doorhangers or other outbound marketing yet, but it appears, given the recent activity by Verizon-branded trucks in the neighborhood, plowing orange conduit into the ground, that Verizon is laying an optical distribution network in Reston, Va., presumably in preparation for rolling out FiOS service.

We already buy Verizon voice and digital subscriber line at the Reston location, so what will happen--absolutely, positively--is that a new Verizon video and FiOS Internet access account will be purchased, as soon as we get the opportunity to sign the check. Verizon will, of course, lose a DSL account while Comcast loses at least one video RGU.

These days, consumer services are akin to trench warfare, and this is how the war is fought: one RGU at a time.

YouTube More Dominant than Google

Though online video sites as a category have seen a seven percent drop in traffic year over year since March 2007, YouTube has gained share, recording a 32 percent growth in visits over that same period. YouTube's market share in the video sector is now at 73.18 percent, says Hitwise.

That's even more dominant that Google is in search share. Google saw an all-time high 67 percent of searches performed in March, Hitwise says.

MySpace TV came in second place last month, with just over nine percent of visits. Google Video was 3rd at four percent, meaning that the two Google properties have 77 percent marketshare.

That's about as dominant as a company can get.

A $60 Billion Communications Market

In 2008, U.S. ethnic communities will spend $59.8 billion on telecommunications services, accounting for over one third of all residential telecom expenditures, according to Insight Research Corporation. The largest minority group, Hispanics, representing 14.8 percent of the total US population, will spend the most.

Blockbuster to Buy Circuit City?

Blockbuster has offered to acquire Circuit City Stores. If the acquisition is completed, and if the merger process runs smoothly, Blockbuster would successfully have morphed itself into a broad-based consumer electronics distributor. If it does not, well, at least Blockbuster tried.

Critics of the deal will point to the challenge of merging two struggling businesses to create one viable business. Some will simply say it is tying two stones together and expecting them to float.

The hopeful might say there does not appear to be much of a future for Circuit City as a stand-alone business, while Blockbuster faces key challenges of its own in making the transition to digital distribution of movie content.

The logic might be that some forms of digital content distribution will feature the ability to download immediately inside a retail outlet. That would fit with Blockbuster's traditional video rental business. The broader logic is that Blockbuster needs to get into another business, and this is a way to do it.

Framing P2P

In an interview with the Royal Television Society’s Television magazine, Virgin Media’s new CEO Neil Berkett points out that Virgin already is doing content delivery deals with content providers. In fact, lots of application providers, content providers and ISPs have been doing so for quite some time. They use content delivery networks to expedite delivery of their video bits, for example.

Some people will think that's a bad thing; others think it's a good thing.

Really, it's a matter of "framing," or setting a reference. If you ask a user whether they'd prefer to have their service optimized for best performance of video or voice, whenever they decide to use those services, typical users probably would say "yes."

To the extent you ask a user whether restrictions should be placed on the amount of bandwidth they paid for can be used, they'd probably say "no." If you asked a typical user whether a small minority of users should "hog" most of the bandwidth everybody is sharing, most users would probably say they think that's wrong.

It is the framing of the issue that determines the response. It's not as though all "freedom" issues are on one side, all the "control" or "responsibility" issues on the other. Both issues are intertwined.

As almost always is the case, one has to determine who the "freedom" is for: most users, all users, a few users; a few providers or all providers; a few content providers or all providers. Any shared resource obviously cannot avoid answering such questions in a very practical way.

Dish Network Satellite Now Space Junk

The brand-new SES Americom AMC-14 satellite, which was to boost Dish Network's high-definition programming line-up, now is space junk. After a failed launch, SES Americom engineers have concluded there is no way to boost the satellite into proper orbit.

Between the launch of Sputnik on 4 October 1957 and 1 January 2008, approximately 4,600 launches have placed some 6000 satellites into orbit, of which about 400 are travelling beyond geostationary orbit or on interplanetary trajectories.

Today, it is estimated that only 800 satellites are operational. Roughly 45 percent of these are both in low earth orbit and geostationary orbit. Space debris comprise the ever-increasing amount of inactive space hardware in orbit around the Earth as well as fragments of spacecraft that have broken up, exploded or otherwise become abandoned. About 50 percent of all trackable objects are due to in-orbit explosion events (about 200) or collision events (less than 10).

More Interest in Downloads than Live Mobile TV?

Mobile TV might be more a "download" than a "streaming" or "broadcast" application, at least for the moment, says Nokia Internet services executive Niklas Savander, reported by Reuters news service..

"We have seen that there are multiple segments who are not interested in the broadcasting, but rather in downloads," Savander says.

That likely will change over time. But not until customers acquire a new habit and the variety of "live" video improves. Some people might want to watch local TV broadcasts, or a handful of popular "cable style" networks.

Sometimes the subscription model increases viewing appetite. Cable operators found that approach worked for some forms of video on demand. But right now, most people (except Sprint Simply Everything customers) probably would prefer an a la carte download or "episodic" use option.

There are use cases one can imagine. Users without digital video recorder access, or the ability to program DVRs remotely, or traveling users without a Slingbox in their luggage, might watch long-form material.

The key thing is that users respond to variety; they respond to content richness. And until "live" broadcasting services can offer really rich variety, usage is going to be relatively limited.

There are exceptions, of course. Viewership of news channels always goes way up in the case of extraordinary news events. At those times, people are going to want to watch on their mobiles, if it is available. But most of the ime, people probably think they can wait.

The preference for downloads might speak more to the issue of content access than anything else.

Services Bigger Part of "Equipment" Business

In the consumer electronics, small business technology or telecom infrastructure markets, services are becoming a more important part of the "product" being sold.

A case in point: Service providers paid $70 billion in service revenues in 2007 to providers of infrastrucure systems and products, according to Technology Business Research. That's an increase of abouteight percent over services spending in 2006.

Simply put, technology is sufficiently more complicated, and service providers are sufficiently less endowed with internal staff, that deployment, maintenance, consulting, integration and management services are essential.

The other trend is that suppliers are increasing their focus on services businesses to help insulate against slowing demand for hardware. Talk to Cisco channel partners if you doubt the trend. With margins and gross revenues for hardware slowing, services revenue picks up the slack.

At the same time, more traditional infomation technology specialists are taking advantage of the more software-intensive nature of network operations.

Qwest Outage

Qwest Communications experienced a widespread phone and Internet outage late in the afternoon of April 10 in the Denver area and other parts of Colorado.

Service was down for more than an hour in some locations, customers reported, though Qwest logged the outage starting at 4:04 p.m. and ending at 4:44 p.m. The outage took out some optical circuits that wireless carriers including Verizon Wireless and at&t wireless.

Data Card Sales Will Quadruple

Sales of mobile data cards, which enable broadband access in laptops via a service provider’s mobile data network, are forecast by Infonetics Research to nearly quadruple between 2007 and 2011, when they will reach $2.9 billion.

“Currently, mobile data services are generally too expensive for mass market adoption, but that will change with the increasingly extensive rollout of high speed HSDPA, the launch of new data plans offering increased download limits, and better subsidies for mobile data cards, says Richard Webb, Infonetics Research directing analyst.

As mobile data plans become more affordable, consumers will use mobile data cards to download Internet-based content such as MP3s, games and video clips to mobile devices. Users also will use data cards to transfer user-generated content such as photos, video clips to other users.

A small proportion of consumers will use a mobile data plan as their primary means of broadband access. Infonetics predicts worldwide mobile data subscribers will accelerate dramatically over the next few years, reaching 144 million users by 2011.

Windows Collapsing, Gartner Analysts Argue

Gartner analysts Michael Silver and Neil MacDonald say Microsoft’s Windows product is collapsing, a victim of slow adoption by enterprises, code bloat--there's so much code it cannot be changed quickly--and a radical shift to browser-based services.

The bad news for Microsoft is that it is the browser that increasingly matters most, not the PC operating system, the Gartner analysts argue.

TechCrunch editor says Vista could be perfect and it still wouldn’t matter. "Online advertising revenue is their only real hope of long term survival," he says.

If the Gartner views seem a bit radical, it is only because major computing shifts always seem radical. There was a time when the notion that teenagers would own their own computers would have seemed more than a little far fetched.

Still, one can question the time it might take for a new paradigm to take hold. So far, most users probably don't see the utility of accessing basic business productivity suites online rather than loading them locally. But that might not wind up being the "killer" app that drives cloud computing.

And as already is the case, cloud-based services might take hold where real-time and changing information and services are required or desired or where simple mass storage and backup are important.

Ask yourself how useful a PC is, when it doesn't have access to the Internet, or broadband access to the Internet. Yes, there are things you can do. But the point is that communications now is a primary requirement for a PC. Cloud computing is just an extension of that trend.

More than 80% of Internet Users Download or Stream Video

The BBC’s video site, iPlayer, is fast becoming the place to tune in online. Since launching on Christmas Day, 17 million Internet users streamed or downloaded full-length programs—leaving rival ITV’s broadband TV offering far behind.

The same trend is occurring in the US. Surveys there show that consumers prefer to watch programming online that is produced by professional TV networks and film studios. eMarketer projects that 154 million people in the US will download or stream video content on the Internet at least once a month in 2008. This year, 80% of Internet users are expected to watch video, which accounts for 52.5% of the total population.

In fact, some U.K. Internet service providers think the iPlayer is generating so much traffic and cost for ISPs tha the BBC ought to have to pay the ISPs to carry the BBC content.

Blockbuster to Launch Download to TV Service?

Andrew Wallenstein, a reporter for the Hollywood Reporter, says Blockbuster is developing a new service streaming movies directly to TV sets. Apple TV was first to introduce a similar set-top box and

Netflix also has said it is interested in doing the same.

The Blockbuster service would be an offshoot of Movielink, the online film service Blockbuster
acquired last year.

Wallenstein says the device probably is a stand-alone product akin to Apple TV, not software and firmware incorporated into another existing device.

Blockbuster says it also will develop mechanisms to deliver movies to mobile phones. The company also is developing in-store kiosks for movie downloading.

Some speculate that online streaming or downloading services will cannibalize Blockbuster's retail store sales, and that certainly is a risk. But there is also thinking that retail will continue to grow even as online downloading and streaming services proliferate. That, at least, is what researchers at Screen Digest now forecast.

Screen Digest argues that, by 2012, about $1 billion will be generated by one of two online business models. About two thirds will be new revenue, while a third will come at the expense of DVD spending in the United States and Western Europe.

The forecast is based on retailers' ability to offer a huge range of titles without worrying about shelf space or the traditional video supply chain. Consumers could burn their purchase onto physical media or bring media players with them and download at the retail site.

Millennial Tipping Point?

Many of us have children who use devices, services, applications and networks in different ways than we, their parents, do. So the issue is when we will reach a tipping point: a time when most buyers of enterprise and consumer services are "Millennials" and "Gen Xers" rather than "Baby Boomers." It is only a matter of time.

So what bears watching are signs that the next generations of buyers have different preferences and expectations about their communication services. Today we might see the demand mostly on the "consumer" side of the business. At the tipping point we will see that demand translated into enterprise, small and medium-sized business, government and non-profit buying as well.

If users have preferences for mobile services, texting and immediacy in their lives as users, why would they not carry those preferences into the enterprise? So if one is a service provider, why wouldn't it make sense to learn from the Millennials and Gen Xers who are part of one's own company? Why wouldn't it make sense to recraft existing services and features that are more attractive to buyers with different priorities?

Fiber to Home is Necessary, Rural Telcos Told

"We are going to have fiber to the home," says John Rose, OPASTCO president. "We are going to have more symmetrical bandwidth." That might not strike you as unusual. But consider that Rose works for a trade association representing lots of small, rural telcos that know exactly how costly it will be to try to build FTTH networks in their low-density areas.

Given current broadband growth rates, there is no other option, Rose says.

Salesforce.com and Google?

Salesforce will begin reselling Google’s Web-based applications such as Google Docs to its customers, says Erick Schofneld, TechCrunch co-editor. Google's Web apps will be available within Salesforce.com and tightly integrated into its service, he says.

Google, enterprise. Salesforce.com, advertising. Does this start to make sense to you? Salesforce customers can already manage their AdWords campaigns from within Salesforce.com and Google wants to sell its apps to enterprise customers. And Salesforce.com with an integrated desktop productivity suite?

Keep in mind the uber trends: consumer technologies blending with enteprise; advertising blending with "shrink wrap" software models; Web services replacing client-server or local computing.

Go wireless to get a job; CompTIA

A survey of more than 3,500 information technology (IT) managers by CcompTIA reveals that wireless and RF mobile technology is the skill set expected to increase the most in importance over the next five years. In all but two of fourteen countries surveyed, IT managers said wireless skills will increase the most in importance over the next five years. Wireless skills ranked second in South Africa (behind security) and France (behind Web-based technologies).

Among specific industries, IT managers in healthcare (63 percent) and education (63 percent) were more likely to identify wireless technology as the skill that will be most important five years from now. IT managers in the auto/manufacturing sector (48 percent) were less likely to consider wireless important.

400 Percent Mobile Penetration

Aside from machine-to-machine traffic, it is hard to imagine WiMAX or any other fourth-generation network getting anything close to 400 percent penetration of mobile users. And while we might argue about which entities will provide the revenue, fees or prices lower than we might expect for a primary device are the likely paths. Is 400 percent penetration crazy? Not if new devices supply the demand.

Hulu Scores, YouTube Could

I have to admit I don't use YouTube much, if at all. I do watch Hulu, though, and though the reasons might say as more about me than about the future of on-demand video, there is something worth noting.

When NBC and News Corp announced two years ago that they were creating a new online destination to compete with YouTube, the idea was met with at least some derision, especially from the digirati. As is generally the case, proponents of new media and new "everything" tend to disparage the legacy players opportunties to do anything right in the new way.

But Hulu has done a lot of things right. For starters, it comes me access to short snippets of branded content I actually want to watch, and sometimes have missed. In Hulu's case, it is mostly 30 Rock and Saturday Night Live.

The user interface is really clean, of course, and it is easy to navigate. YouTube dominates user-generated videos of course, so if that is what you are looking for, go there.

At some point, full-length episodes of major TV shows also will be made available, and that's the point. Quality content is very hard to create. So most of what appears on YouTube either isn't very good, or simply isn't of interest.

Hulu doesn't compete with YouTube, in my case or probably in just about any other case. Hulu, even with limited content, is more of a "destination" site, where YouTube isn't. YouTube could change that, in at least one important dimension, though. YouTube would seem a much better destination for business-oriented video, such as a keynote at a conference I didn't attend.

If YouTube or any other provider can put together enough of that sort of content, I will use it.

Mobile Calls: 40% Are Churn Inducing

About four out of 10 mobile calls have call quality low enough (Mean Opinion Score score of 2.5) to put the relationship with the customer at risk, a survey of 630 million live mobile calls in 12 countries strongly suggests.

The reason is that subjective call quality below a MOS score of 2.5 is considered "unacceptable" by users and the ITU. When so many mobile calls are right at the threshold, they are, by definition, not "quality" calls.

You might wonder how it is that so many calls, and so many carriers, in so many countries, can have that many calls of questionable quality, when network engineers will tell you the networks are performing quite well.

The problem is that both the survey results and the network engineers are generally right: the "network" is working as it should. The problem is that problems outside the network (ambient environment around the user handset, for example) are disrupting performance. If you test the "network" in the old way, the ambient disruptors cannot be detected.

In mature markets such as the U.S. and Western Europe, 23 percent of all calls fall below the industry minimum. In rapid growth markets, such as the Middle East, India and South America, 59 percent of all calls fall below the industry minimum.

There are three primary issues, says Ken Croley, Ditech Networks director. Ambient noise, or noise that originates in the caller’s environment and enters the device’s microphone, was rated “objectionable” on up to 50 percent of all calls in some regions.

Acoustic echo, which is often caused by mobile handsets and headsets, was rated “objectionable” on up to 11 percent of all calls in some regions. That includes distortion-inducing elements such as Bluetooth ear pieces, for example.

Voice level mismatch, which makes it sound like a caller is speaking either too loudly or too softly, was rated “objectionable” on up to 28 percent of all calls in some regions, and is generally seen as a byproduct of codec mismatches.

The finds came as "a shock to carriers," says Croley. The distortions are "external to the network and missed by the network tests precisely because external to the network." Audio can bounce off a car windshield and back into a microphone, for example.

The corollary is that the problems cannot be fixed by adding more base stations or adding bandwidth. By definition, the issues are caused outside the network, by messiness in the user's aural environment.

Ambient noise levels are an issue as well: think of the trade show floor at CTIA or a crowded bar on Friday night.

The audits were conducted using Experience Intelligence (EXi), a technology developed by Ditech that quantifies the impact of voice quality impairments caused by the places where people make calls, codec impairments, and mobile devices like phones and headsets.

EXi is based on the International Telecommunications Union (ITU) G.107 E-Model, a widely used industry standard, and the technology has been utilized in the communications industry as a complement to existing voice quality test and measurement solutions.

Ditech believes the problems can be fixed by using EXi. Of course, there is the other solution: ban Bluetooth, prohibit talking in noisy places and outlaw talking while driving. Right.

Unlimited Plan Impact

So far, it doesn't seem that new unlimited use plans offered by all the major providers have had any particular impact on revenues. In fact, at&t executives claim that the new plan is revenue neutral. In other words, as many people are upgrading to the new plans as are downgrading from plans where they paid more.

What does seem likely is that more users will be exposed to what they can do when they have data services beyond texting. To the extent there is an ultimate change in revenue, it will be found in increased sales of data products of various types.

Verizon earlier had noted that just 305,000 of its subscribers--0.5% of its sub base--had wireless calling plans priced at more than $99.99 per month, at the time it launched its unlimited calling plan.

Those customers spent an average of $125 to $135 per month on phone calls. So even if every one of those customers dropped down to $99 a month plans, Verizon would be looking at just $7.6 million to $10.7 million in lost revenue per month.

And that would be balanced by increased revenue from customers upgrading to the new plan.

2010 for Verizon, at&t 4G Nets

Verizon says it will light its new fourth-generation network in 2010. Executives at at&t haven't been equally specific, but Kristin Rinner, at&t SVP says "we estimate it possibly will be 2010 before the whole ecosystem is in place for us to launch." Of course, time tables can slip. Neither carrier will be overly anxious to commit billions more in capital to light networks that will be lightly loaded for some time.

And they might just watch Xohm and Clearwire for clues about demand. If growth is sluggish, there will be incentive to delay. If growth is robust, they'll stay on schedule. There's still lots of work to do creating new revenue-generating applications on the 3G network.

And watching what users do on 3G networks is key. Just recently, Apple's iPhone has shown that the right device and plan can cause new behaviors to explode. And that's just on the slower Edge network. Once we start to get data on 3G use, we'll get some additional glimmers of what might be feasible for 4G.

One trend already seems clear. If carriers can get smart phones into the hands of users--by selling them at lower prices--then data plan usage goes way up. And having lots of people using data plans is about the only way we're going to figure out what things people want to do.

And since the 3G network will remain in operation, there will be a huge need to create new "data" applications that require 4G capabilities without simply cannibalizing 3G alternatives. It's sort of odd to think of 3G as a "legacy" network, but that's what it is becoming. It remains a strategic legacy network to be sure. The point is simply that 4G makes no sense unless it expands the range of new services people can use. Nobody needs another "voice and text" or "moderate speed broadband" network.

MobileTalk: Really Easy

Right now, there are a couple issues users face when using VoIP from a mobile phone. In some cases, carriers might interfere with that sort of thing. Not that they do, but they can. Verizon Wireless PC card owners know their terms of service actually prohibits VoIP and even use of the air card from a "home" location. Not that I've ever met anybody who had trouble with either of those two clauses. But the clauses and the rules exist, in case Verizon Wireless does want to enforce them.

So anything that makes VoIP easier or does not risk infringement of an ISP's terms of service is welcome. That's not to say Mobivox or Jajah, for example, are hard to use. No harder than dialing an access number, really.

But 8x8's Packet8 MobileTalk arguably is even easier.Packet8 MobileTalk uses a downloadable software application that can currently reside on any Windows, Palm or Symbian based mobile phone. The app works in the background.

Packet8 MobileTalk users can dial calls directly and natively from their mobile handset, contact list or speed dial directory with no additional keystrokes.

Once a destination number is dialed or selected, the Packet8 MobileTalk software application identifies the international prefix being called and redirects the call to a local Packet8 network access number.

That's it.

You download the MobileTalk app, then make calls as usual. When an international number is dialed, MobileTalk automatically redirects the call to a local access number, which uses the 8X8 VoIP network to complete the call.

Packet8 MobileTalk is currently available for Windows Mobile, Symbian, and BlackBerry phones, and is expected for Java phones in soon.

Sign up now and the activation fee is waived. There is no monthly recurring charge.

As this data from Sound Partners suggests, more minutes of use are going to shift to mobile VoIP, as this forecast suggests will be the case in western Europe.

Streaming Causing ISPs to Upgrade

Consumer use of streaming video over the web has more than doubled in the past year, and Internet service providers and networking companies--at least their personnel--believe lots more is coming, according to the results of a recent ChangeWave Alliance poll.

Nearly two-in-three industry respondents (26 percent) think the delivery of streaming video has significantly increased the demand for networking technology and products, while 38 percent say it's caused a moderate demand increase, says Paul Carton, ChangeWave analyst.

Count Cisco and other infrastructure suppliers, as well as bandwidth barons, as winners.

at&t VoIP for Austin

U-verse IP-based voice service is being introduced in the Austin area. So those of you who wonder when incumbent service providers will get on the VoIP bandwagon have an answer. VoIP makes most sense for an incumbent provider when the basic service package includes other IP-based video services.

Even when IP isn't extended completely to all the end points, the adoption pattern will mirror the ways IP and optical fiber was introduced into the rest of the network. IP made first sense in the network core. So did fiber. Over time, fiber extended into the metro trunking plant. That same sort of thing will happen as soft switches replace older TDM switches.

VoIP features will be made available at the central office, with media gateways between the end user analog equipment and the CO. Over a period of time, the gateways will migrate deeper into the access network.

But there will not be a complete flash cut to VoIP as the voice platform until some critical mass is reached. At some point, half the customers will be buying IP-based video or data services. Sometime around then, it starts to be feasible to decommission the older networks.

But not much before then will it make lots of sense.

DirecTV, FiOS Taking Share

DirecTV and Verizon's FiOS (where it is available) are getting 58 percent of the customers as consumers in a February 2008 survey describe the choices they will make in buying new video service providers.

Keep in mind, these are customers who already have decided to make a change. And as the incumbent, a cable operator is going to be hit disproportionately by customers who want to make a change.

The survey also suggests about four percent of respondents are leaving another service provider for Comcast, for example.

Considering that DirecTV is operating as a "single play" for the most part, it is doing quite well, though some percentage of its new additions come from telephone company customers buying DirecTV as the "video" component of a virtual triple play or dual play.

Apple and RIM Lead Smart phone Sales

According to a March 2008 ChangeWave survey of 3,597 consumers, the smart phone industry is "a two-horse race between Research In Motion's BlackBerry and Apple's iPhone," say Paul Carton and Jim Woods, ChangeWave analysts.

As the incumbent, RIM continues to enjoy a commanding market share lead, with 42 percent. Apple has nine percent, but is growing faster than RIM.

If customer satisfaction is an indicator of future growth, Apple will contiunue gaining share. About 79 percent of iPhone owners report they're "very satisfied" with their phone. About 54 percent of BlackBerry users say the same.

Among respondents planning to buy a new smart phone in the next 90 days, 35 percent say they'll purchase an Apple iPhone, a huge jump since January 2008.

About 29 percent say they will buy a BlackBerry.

at&t Warms to Android

Initially cautious about the Google-initiated Open Handset Alliance, at&t Wireless might be having a change of heart.

"I like it a lot more than I did before," says Ralph de la Vega, AT&T Mobility CEO. "It's something we would want in our portfolio."

"I think it's going to be a good option for us and a good option for our customers," de la Vega says. The wireless giant might be intrigued about being able to put its own applications on OHA devices.

And that offers at&t room for innovation and differentiation, just as open platforms allow innovation by other application providers.

Intel: Internet in Your Pocket

There's a symmetry between Intel introducing new "Atom" processors and Sprint's interest in WiMAX. As the Internet becomes more pervasive, the desire to be constantly connected using wireless and wired broadband--but especially wireless-- will drive the creation of computing-intensive consumer products that benefit from really-fast wireless connectivity.

And that's the whole idea behind the Intel Centrino Atom processor, formerly known as "Silverthorne": low power consumption, advanced graphics handling, quality audio and fast page downloads.

The whole idea is that new consumer devices benefiting from fast mobile broadband will emerge.

In a real way, that's what is emerging from studies of how Apple iPhone users behave. Sure, people talk, text and check their email. But the really stunning behavioral difference is the use of Web applications.

"Internet in your pocket" is a fairly accurate way to describe the coming change. Unless that is going to be a big trend, everybody is wasting time and money thinking about and preparing to build WiMAX, LTE (Long Term Evolution) and other fourth-generation networks.

Biggest Non-Story at CTIA

Sprint Nextel announcing a reinvigorated WiMax venture with Clearwire, Comcast, Time Warner Google and Intel. There was supposedly an April 1 self-imposed deadline for reaching agreement, and it does appear the deadline passed with no agreement.

That, in and of itself, doesn't necessarily mean a deal won't ultimately be reached, or that a deal is unreachable. Cable operators have been in deals with Sprint before, with arguably meager gains on the operational front. But they know Sprint.

What the cablers might not be so sure about is their wireless strategy. Some might argue that with open networks coming, owning the network might not be crucial. Others, possibly with less justification, might argue that cablers don't actually "get" the importance of wireless.

More plausibly, there remain several issues. Investors probably are not wild about the capital investments. Cable executives traditionally have not been comfortable running services on somebody else's network. Wireless is not necessarily a core competency or a service that can be incrementally grafted onto the hybrid fiber coax network.

Perhaps some worry about betting on WiMAX when the telcos will back LTE. More significantly, perhaps, is uncertainty about the size and customer appetite for all sorts of services that go beyond voice. There is, in fact, almost no reason to build wireless broadband networks capable of 50 Mbps to 100 Mbps if in fact various sorts of new broadband services are not the revenue drivers.

And lots of experienced people probably would have to admit it is not yet possible to outline all the popular new services and business models that will drive fourth generation networks. In the midst of that much uncertainty, executives might not feel a need to rush a decision.

Most Jarring Moment at CTIA

There often is some point, in an opening keynote at CTIA, when a keynoter tosses out an applause line, typically having to do with Google, Skype or open networks in general. And amidst the applause, one always is reminded that innovations almost always have been "forced" upon the industry--the salient exception being digital switching--which allowed service providers to lower their costs while adding features.

That's not to pick on wireless providers. The same thing happens at cable industry keynotes and elsewhere. Every organization and every person must have a business model, it goes without saying. And it asks too much of participants to expect robust embrace of trends that harm their own revenue models.

But that is what markets are about, and why they are a good thing. And lest we forget: markets only work when they permit harm to befall contestants when better alternatives arise. Take away failure and there is no way to drive success. "Creative destruction," economists call it.

Still, it is asking too much to expect people to welcome harm. Hence the applause.

Best Rumor from CTIA Day One

Why aren't members of Google's core voice team showing up for scheduled meetings at the CTIA: Wireless Association trade show? Because they all are away putting together an acquisition of Skype, or a partnership with it, surmises TechCrunch Editor Michael Arrington.

Samsung Instinct Available in June

Sprint Nextel will roll out the new Samsung Instinct, a full touch-screen device running on the Rev. A network, in June. Sprint will have exclusive right to sell the device, initially.

Samsung Instinct will be seen as a competitor to the Apple iPhone, of course.

It is designed for fast Web browsing, email access, commercial-free radio and Sprint Navigation, powered by Telenav, with GPS-enabled audio and visual turn-by-turn driving directions, one-click traffic rerouting and more than 10 million local listings.

Live Search for Sprint, powered by Microsoft, provides easy access to directory information on-the-go, GPS-enabled directions, interactive maps and one-touch click to call access

Sprint TV offers live and on-demand programming.
Sprint Exclusive Entertainment offers made-for-mobile sports and entertainment video.

Sprint Music Store allows users to browse and wirelessly download full-length songs directly to their phone for 99 cents each.

Pocket Express offers up-to-date information on sports, weather, news, movie showtimes and other options customized to the user's zip code.

Three dedicated keys on the lower portion of the handset make operation of the device very straightforward and easy to navigate, the company says. The phone key always takes the user back to essential voice calling and features including speed dial, visual voicemail, contacts and the dial pad. The back key is a consistent way to take a step back in the operation.

The home key on the Samsung Instinct provides quick access to the four menus of functionality:

"Favorites" provides one-touch access to the things a user does most, making customization and personalization extremely simple. Web sites, TV channels, text messaging friends and much more can be saved in the Favorites menu so the items used most are always at the user's fingertips.

"Main" includes applications such as Messaging, Voicemail, GPS Navigation and more.

The "Fun" menu brings up music, TV, photos and games.

"Web" takes a user straight to Web site options.

Samsung Instinct features Visual Voicemail, allowing users to listen to messages in their order of preference and manage them with a simple tap of the screen.

Both corporate and consumer (POP3) email accounts are supported.

Multitasking capabilities allow the user to play music in background mode while surfing the Internet, texting or playing games,.

Pricing for Samsung Instinct has not yet been announced. In order for customers to experience the full capabilities of the device, Samsung Instinct requires activation on a Sprint Everything pricing plan offering unlimited data starting at just $69.99 per month.