Vonage, AT&T Settle VoIP Patent Dispute

Vonage and at&t have finalized the settlement of a dispute between the companies. No details were released. But $39 million had been mentioned earlier.

IP Multicasting Coming?

Not being a "techie," I first became aware of "IP Multicasting" in 2000, when working with some folks developing a streaming media service. As somebody who spent some time in the cable TV business, it made a huge amount of sense. Basically, the idea is that for popular content, say a TV show that millions of people want to watch, one uses multicasting to launch a single stream that all those viewers can watch, rather than millions of discrete streams. Those of you who are network engineers will appreciate the elegance of the way this conserves bandwidth, in the same way that satellites deliver a single stream that millions of viewers can watch. That's the beauty of all multicasting: highly efficient sharing of downstream bandwidth.

Carriers proved resistance to enabling multicasting, however, for all sorts of other reasons, not the least of which was the fear that control over available bandwidth would be lost. But technology journalist Mark Stephens (Robert X. Cringely) argues multicasting is the future of television. Well, at least the future for some sorts of television: the highly-viewed, synchronous sort.

Multicast was built into the structure of the Internet from the very beginning but was generally not turned on because network administrators view it as a resource hog (local storage and resources, not bandwidth, per se).

Cisco long has been a huge supporter of multicast because it requires ever bigger and more powerful routers. That might be true, but multicasting still makes eminent sense as a way to distribute highly-popular video. Sure, there are other sorts of video that have to be unicast because demand is low. But multicasting is quite efficient of bandwidth for highly-popular streams.

Stephens uses a simple example. Say a user wants to see Seinfeld episode 60, and is entitled to do so. That event gets assigned a multicast address.
When the show is made available on a server anywhere on a part of the net that supports multicast, the user receives it. All the routers between here and there look for multicast subscriptions and enable them and the episode is is cached locally.

In order to lower their bandwidth bills, ISPs are trying to take greater control of the way we, their customers, use our "unlimited" bandwidth, says Stephens. But IP multicast offers another tool to do so, and is less bothersome.

Both Comcast and Verizon are rapidly rolling out IP multicast, Stephens notes. The reason is that IP multicast remains a highly-efficient to deliver popular programming, and means most of the linear cable channels. ESPN demands as part of its contracts that much of their programming on MPEG-2-equipped cable systems must delivered at 5 Mbps to 8 Mbps, compared to the 2 Mbps used for most other channels.

Contracts are similiar for premium cable services such as HBO or Showtime.

Internal audience studies at Comcast have shown that 90 percent of the customer base watches 10 percent of the available channels.The problem is that each of use might have a different seven favorites. Also, even if few people actually are watching, cable companies can't turn them off because programming contracts with the studios require carriage.

Multicast solves this problem because it allocates no bandwidth to channels that aren't being watched. It's an interesting business issue: the signals are "carried" but maybe not "broadcast" to consumers who aren't actually "tuned" to the channel.

IP Multicast is an alternative to P2P, in other words.

Has Apple Sold 5 Million iPhones?

Cleve Nettles at Mac9to5 thinks so. Nettles expects Apple to say so in January, at Macworld. The issue is how those sales relate to the announced goal of selling 10 million iPhones. Some people recollect Steve Jobs, Apple CEO, promising sales of 10 million phones in calendar year 2008 alone. Others seem to think he meant 10 million by the end of 2008, in total.

Rivals at Nokia and Research in Motion probably aren't excessively worried either way, given the installed base of devices each of those firms has, and the number of new devices they ship every month. Of course, Apple has a distinct advantage. It gets recurring revenue from the sales of each of its phones.

RIM and Nokia do not. So one iPhone sale is worth a lot more revenue than the sale of a new BlackBerry or Nokia handset.

Cable Targets Small Business

The coming year is when we see just how formidable U.S. cable companies will be in the small business communications market. To be sure, many veterans of the business communications market don't think cable will much of a factor in the enterprise market. Maybe not. That's not where cable companies are going to focus, which is the small business customer.

Comcast Corp. apparently plans to spend $3 billion to sign up 20 percent of small companies in its territories by 2012. Time Warner Cable Inc. is also pursuing businesses with fewer than 1,000 employees. And Cox Enterprises has been signing up lots of business customers for years.

Phone companies dominate the $25 billion annual market, which can generate profit margins about 10 percent higher than services offered to consumers or enterprises.

On the other hand, large telcos don't generate nearly as much money from phone lines and calling as they used to. In fact, small business lines provide only about five percent of at&t's revenue these days.

Cable providers, with less than five percent of the small business market, may seize one-third by 2012, saus Sanjeev Aggarwal, AMI-Partners VP.

So two things are going to happen. In some cases telcos will cut their own prices to match the discounts cablers are expected to offer. They'll keep share but sacrifice margins. Or, telcos can simply accept the loss of some share to maintain margins for a while longer.

Anticipating the onslaught, Verizon and at&t seem to be prepared to cut prices and bundle services to keep small-business customers who sign up on contracts.

Verizon offers 20 percent off Internet access for companies taking unlimited local and long-distance calling plans for one year. Customers buying voice services from at&t pay roughly 40 percent less with an annual Internet service contract.

About 54 percent of AT&T's small and mid-sized-business customers in areas where cable may compete have might already have signed new contracts, some observers suggest.

Blogging Tops New York Times, Sort of...

According to ReadWriteWeb, a five-year-old bet was settled recently. The bet, between New York Times executive Martin Nisenholtz and Web 2.0 Founding Father Dave Winer, was about blogs topping the New York Times in Google search results for the top five news stories of 2007.

Rogers Cadenhead has done the tabulation and found that Winer, and blogging, have indeed won. Sort of, ReadWriteWeb notes.

According to the Associated Press, the top 5 news stories of 2007 were Chinese exports, oil prices, Iraq war, Mortgage crisis and the Virginia Tech killings. Obviously this is a list for US news markets and not the entire world.

Today, a Google search for those terms brings up a blog higher than the New York TImes for Chinese exports (Blogging Stocks 19th vs. NYT 20th), Iraq War (a blog was 17th, NYT 20th) and Virginia Tech killings (Newsvine coverage of the AP's top stories of the year is 9th in Google vs. the Times at number 30.) So blogs topped the Times in 3 out of 5 top stories.

Wikipedia, however, ranks higher than both blogs and wikis according to Candenhead.

The three blogs that topped the Times in the Google results in question don't tell such a simple story. Two are stories from the AOL-owned Blogging Stocks and one is from social news site Newsvine, now owned by MSNBC.

Mobile Web is About the Big Brands

You'd be hard pressed to find a more significant year in the U.S. mobile business than the one that is passing. We witnessed the entry of a major consumer and computer electronics retailer--Apple--into the mobile business. We saw the emergence of an unprecedented revenue model for the iPhone.

We saw Google put together an open source community around Android that includes tier-one mobile service providers. We saw Google make at least an opening bid for actual spectrum, and cement development deals with Sprint and Clearwire for WiMAX handsets.

We saw the Federal Communications Commission mandate an "open networks, open devices" regime for the 700-MHz C block spectrum, the best quality mobile spectrum yet to be made available, because of its wall-penetrating abilities signals in the 700-MHz range possess.

We saw Verizon Wireless declare its support for "open" networks as well. Taken together, all the developments signal the emergence of the mobile Web. And that is going to create new space for contestants, including the most-popular Web brands.

That is not to say networks are unimportant. It is to say that now handsets and brands become much more important in the wireless business. That's a huge change.

Word of Mouth, Internet Key for Breaking News

Even though television plays a key role in alerting and updating people about big news stories, the initial awareness often comes by word of mouth or the Internet.

After the April 16 Virginia Tech massacre, Frank N. Magid Associates polled Millennials; Gen Xers; and Baby Boomers about how they first got the news.

Television coverage was the primary source to which all three groups turned for information on the shooting spree, but nearly a quarter (23 percent) of the adult Millennials first learned about the story on the Internet, compared with 19 percent of Gen Xers and 16 percent of Baby Boomers.

About 29 percent of Millenials heard about the Virginia Tech story by word of mouth, which includes text messaging.

In fact, in all three target demos, word of mouth was the number one source of alerts to those who weren't at home.

On the other hand, 37 percent of Millennials first learned about the story from TV, as did 43 percent of Gen Xers and 50 percent of Boomers.