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.