Something One Doesn't Typically See

Commenting about the recent Comcast peer-to-peer blocking adjudication at the annual Phoenix Center conference, Federal Communications Commission Chairman Kevin Martin noted one truly unusual aspect of the case. 

"Normally people fess up and promise never to do it again," Phoenix Center head Lawrence Spiwak  noted. Those of you who have had even casual acquaintance with the deference routinely shown to the FCC in Washington policy circles will agree.  

"In this case, Comcast first said they didn't do it, then said they did, but that the FCC had no authority over it," Martin said. That's unusual behavior. 

Network management is one thing; interfence with lawful applications another, Martin said. 

"It did not seem to be reasonable that Comcast denied that was what they were doing," Martin said. "It is a problem when you have a company that won't admit it is doing something" independent evidence shows it is. 

Not many who routinely deal with the FCC could say they have seen this sort of thing very often. 

U.S. Business Landline Purchases Up

Here's something you might not have suspected: U.S. businesses have added 700,000 wired network connections over the past five years, despite shedding large number of narrowband voice lines. 

Ethernet, business grade DSL and business grade cable modem connections have driven the growth. 

So despite narrowband line losses, service providers have seen overall growth of business lines of 15 percent over the past five years. 

Mobile Market Shifting

Market economies work because consumers vote with their wallets to buy the better products from the better suppliers. That is less true where markets are more managed, but the principle remains. But the logical end result of market economies is that, sooner or later, companies selling products with less demand will go out of business, while companies selling products with higher demand will grow. 

Sooner or later that tends to lead to market concentration, with the inevitable result, at least historically in the United States, for anti-trust actions to reset the playing field. But no amount of anti-trust regulation will stop the process from reoccurring. People are going to buy more of the products they think are best; allowing those companies to grow larger; while other companies disappear, leading to yet another cycle of anti-trust action.

Very few observers would probably think the U.S. communications market is so concentrated--again--that something drastic has to be done. Nor is it clear precisely how many effective competitors must exist in a single market to provide the benefits of competition. Some say three contestants is enough. Some argue for more; in some cases as few as two might provide meaningful competition, some economists argue.

We might be seeing some sort of a tipping point in the U.S. wireless market, though nearly all observers would argue that the U.S. wireless market remains highly competitive. An example: third quarter financial results.

Verizon Wireless and AT&T Mobility continue to perform well and pull further ahead of their competitors in the U.S. mobile business, says  Susan Welsh de Grimaldo, Strategy Analytics analyst.

Sprint Nextel continues to bleed subscribers, losing more than a million in the quarter. The company lost 1.3 million subscribers in the third quarter while AT&T Wireless gained two million and and Verizon Wireless gained 1.5 million.

Sprint's customer numbers have declined by a further 6.3 percent over the past 12 months while U.S. mobile subscriber numbers increased by seven percent over the same period.

One can argue the AT&T iPhone is responsible, that continuing customer service at Sprint or Nextel is responsible, that Verizon bundling capabilities are contributing, Sprint's failure to come up with a winning alternative to the iPhone, continued trouble at Nextel or some other combination of circumstances are responsible for Sprint's continuing slide. 

Nor is it clear whether Sprint can stabilize and then counterattack. On a value for money basis, it is hard to argue with Sprint's "Simply Everything" packaging, for example. But even that seems not to have halted the erosion. 

To be sure, the top of the U.S. mobile market has been relatively stable, in terms of market share, for some time. What appears to be happening now, though, is a destabilization of the market, with AT&T and Verizon gaining, while T-Mobile and Sprint are in flux. T-Mobile now is a relatively-distant fourth, but that could change over the next few years if Sprint cannot halt its slide. 

Voice Is Not a Commodity

One of the enduring pieces of conventional wisdom in the communications business is that "voice is a commodity." That perception typically is the result of even a casual analysis of "per minute" fees for long distance or even mobile usage over the last decade or two. 

Service providers in the wholesale space often sell their product based on per-minute fees as well, so it is easy to see why the working hypothesis is that voice actually is a commodity.

Despite all that, the way people use voice communications is anything but "commoditized," in the sense that one application is a fully functional substitute for another. 

People who use landlines also use mobile and IP-based communications as well. People who use IP communications also use mobile and fixed calling. Likewise, mobile users avail themselves of IP communications and fixed services as well. 

Beyond that, people tend to use each of the applications at different times, at different places, with different applications and different devices, to talk to different people, for different reasons. 

Not enough attention typically is paid to the ways all those use cases can be differentiated in marketing. Usage already is differentiated in fact.

Users Would Pay for Twitter

According to this poll taken by Guy Kawasaki, technology marketing consultant, people would pay to use Twitter.

As it true for other communication services, people do not seem to mind paying a fair price for services and applications they value. 

That also suggests a possible business model for Twitter, as well. 

Broadband Now Demand Constrained

Most of the time, we seem to be more concerned with the supply side of broadband: what penetration rates are, what speeds are, what prices are.

But consumer broadband arguably is demand constrained, not supply constrained. In Kentucky, for example, 65 percent of adults have broadband access.

Household broadband penetration tops 44 percent and another 21 percent of Kentuckians have dial-up service (keep in mind that most U.S. households have more than one adult in them).

Logically, the 21 percent of dial-up users are the primary customer segment to be targeted for an upgrade to broadband. About 70 percent of Kentucky households have at least one PC.

But that leaves 30 percent or so of homes that do not report having a PC. That is a demand problem, not an access supply problem.

$69 billion in 2007 Unlicensed Music

The value of unlicensed or pirated music trafficked on P2P networks in 2007 was $69 billion, according to new MultiMedia Intelligence research.
 
"Content owners of TV episodes and full length movies are seeing a growing impact as well," says Rick Sizemore of MultiMedia Intelligence .
 
MultiMedia Intelligence's new research also found the number of unlicensed full length movies "shared" will grow almost four times from 2007 to 2012.

Not all P2P content is unlicensed, though. P2P Internet traffic, despite having grown at a torrid pace for years, will grow almost 400 petrcent over the next five years, growing from a level of 1.6 petabytes of Internet traffic per month in 2007 to almost 8 petabytes per month by 2012.