Consumer Wireless Spending Now Exceeds Wireline

Since 2007, Americans have been spending more for mobile than for landline telephone services, according to a new report from the U.S. Bureau of Labor Statistics.

In 2007, 55 percent of all consumer telephone expenditures were for wireless service, the latest year for which official figures are available. Landlines accounted for 43 percent, with the remaining two percent going for other services, such as pagers and phone cards.

It marked the first time that cellphones had topped landlines in annual consumer spending, as monitored by BLS.

In 2003, consumers spent 65 percent of their communications budget on landline voice. But the share for landlines dropped rapidly in subsequent years. Landline share fell to 60 percent in 2004, 54 percent in 2005, and 50 percent in 2006, before the latest slip to 43 percent in 2007.

The typical U.S. consumer spent $1,110 on telephone services in 2007, with $608 going for cellphones, $482 for landlines and $20 for other services. the BLS study obviously does not include spending for broadband access or other related services such as cable TV, in these amounts.

The BLS study found a direct correlation between age and cellphone spending, as you might expect. Consumers under the age of 25 directed 75 percent of their telephone expenditures to cellphones. That figure dropped for each rung on the age ladder. People between the ages of 25 and 34 spent 67 percent on cellphones; 35-44, 59 percent; 45-54, 57 percent; 55-64, 48 percent; and 65 and older, 33 percent.

More Mobile Broadband Subs than Fixed in 2011

Worldwide wireline broadband subscribers reached 287 million in 2007. But mobile broadband subscribers ultimately will surpass fixed broadband, for obvious reasons.

Fixed broadband, like fixed voice, is a service sold to places. Mobile broadband, like mobile voice, is sold to persons. There generally are more people than dwellings. 

By about 2011, it is possible that cellular

mobile broadband subscribers will catch up, or overtake, wireline broadband

subscribers, with an expected total mobile subscriber base passing 5 billion by 2011, say analysts at Infonetics Research. 

End of the Internet"

There's probably no shortage of people who decry the "end of the Internet as we know it."

Some think it is a good thing, in the sense of the Internet becoming a utility like electricity. "The biggest take-away from last week’s Consumer Electronics Show is that every device in our lives is rapidly becoming a computer connected to the Internet," says Edgelings CEO Tom Hayes. "That new reality means the Internet will soon transition from the conspicuous to the unconscious; from something you go “onto” to something you never go off of-and in fact hardly even think about."

Others worry or lament the emergence of "private," traffic-shaped," managed or other forms of IP networks. There are public policy issues, to be sure.

But IP networks are more than the Internet, and the Internet itself is changing. And there is a paradox here. Ask anybody in the communications policy community whether the Telecommunications Act of 1996 succeeded and you'll get, as often as not, an argument that it has failed in some major way. But ask those same people whether their own choice, value and services are better now than they were then, and everybody will say "yes, my services are better, cheaper, more valuable."

Ask many policy advocates about the health of the Internet and they will say things are terrible, for any number of reasons. But ask those same people whether the Internet is more valuable today--much more valuable and useful--than it was before 1996. I suspect we all know the answer.

There are serious public policy issues, of course. But the Internet is not now what it was. Neither are television; radio; audio; magazines; newspapers; theaters; library catalogs; classifieds; phones; computers or data networks. In one sense, we can "save" the Internet about as meaningfully as we can "save" black and white, monaural, NTSC, broadcast television.

End? How about "beginning"?

U.K. Broadband: Lies, Damned Lies and Statistics

Samuel Clemens once quipped that 'there are three kinds of lies: lies, damned lies, and statistics." So the U.K. Office of Communications says real-world end-user average peak throughput is about half the "advertised" broadband speed users pay for. 

On the other hand, Ofcom also notes that average speeds run between 81 percent to 85 percent of the "advertised" speed. 

In fact, subscribers on services promising 2 Mbps or less get those speeds about 91 percent of the time. Since most broadband subscribers in the U.K. are on lower-speed tiers of service, the national average speed delivered is about 85 percent of the maximum line speed.

So whether performance is "good" or "bad" is a statistical matter, depending on whether peak throughput at the peak congestion hours are examined, compared to average performance across each day, week or month. "Peak" performance also hinges on matters beyond a service provider's direct control, such as the state of in-home wiring and capabilities of in-home end user equipment. 

That said, the difference between "peak" throughput and "average" is directly affected by the fact that access is a shared resource, in the access network, in the aggregation network, on the backhaul networks and at the servers users are trying to communicate with. 

The actual throughput received by its national panel of testers was 3.6 Mbps in the 30 days beginning October 23, 2008. That throughput represents 49 percent of the average ‘headline’ speed (7.2 Mbps) and 83 percent of the average maximum line speed (4.3 Mbps), Ofcom reports. Consumers on the most popular broadband headline speed package, advertised as offering  "up to’ 8 Mbps," received an average actual throughput speed of 3.6 Mbps, about 45 percent of the headline claim, and they had  an average maximum line speed of 4.5 Mbps, representing 56 percent of headline speed.

About 20 percent of testers on the 8 Mbps package received an average speed of less than 2 Mbps. Still, about 83 percent of respondents say they are "happy" with their service, while 21 percent report they are dissatisfied for some reason. About 16 percent express dissatisfaction with the "value for money" they receive and 13 percent are unhappy about service reliability.

About 28 percent of users were unaware what the advertised speed of their connection was. Rural consumers on "up to" 8 Mbps packages received average speeds 13 percent lower than their urban counterparts.

To be sure, Ofcom notes there are many reasons why throughput might be slowed. Congestion on the wider internet, loop length, the condition of the access cables, poor home wiring, absence of filters, computer clock speed or router specs can degrade performance.

Honesty in advertising is an issue, of course. The issue is that broadband access is a shared, best effort resource. There will be times when any single user actually will experience the full advertised throughput. Most of the time, likely not.  So long as users use "maximum speed" and "cost" as the key criteria to compare providers, it is not likely the advertising verbiage will change. 

The other issue is how to describe "average" speeds, across different provider networks, in ways that are consistent and meaningful, since the actual end user experience always will differ for all sorts of reasons, some not under the direct control of the access provider. 

$10 iPhone Tethering?

The rumor that AT&T is considering both Apple iPhone tethering (allowing it to act as a PC modem) and an incremental $10 charge over a standard data plan, would be a smart move, in the right direction. 

Since AT&T expects virtually all consumer devices to be capable of wireless broadband connection, some of us already have been figuring out what that means, cost-wise, for the devices we support, keeping in mind that some of us support a whole family's requirements.

It is self-evident that this future will have a tough time becoming material reality if present pricing for mobile broadband remains where it is. There is no way most parents would be willing to pay $30 to $60 per connected device to participate in such a world, where a dozen to scores of devices might plausibly need to be connected. 

The only way this idea really becomes a mass option is to create unified data access plans built on the notion of family plans, where all devices and people can share one bucket of access. Even fixed broadband penetration would not be where it now is if users had to pay a separate fee for each device, and each user, accessing a single connection. 

Windows 7: Faster, Longer, Fewer

"Windows 7 should boot more quickly, have longer battery life and fewer alerts,"says Steve Ballmer, Microsoft Corp. CEO. That would be nice. All three are present annoyances.

AT&T Mobility Bundles PC

Dell  and AT&T Mobility have launched a limited-time offer (ending Jan. 31, 2009) bundling 3G service with a PC, requiring a two-year contract to AT&T "LaptopConnect" costing $60 a month. 

The offer extends the common mobile phone offers that bundle discounted handsets with service to mobile PC service. The Dell Inspiron Mini 9 will cost $99 after a $350 mail-in rebate. 

Orders can be placed on Dell.com.

There are several obvious implications, some pertaining to service provider strategy and revenues, some pertaining to public policy issues. The service provider angle is that, as handset subsidies have boosted mobile subscriptions, so PC subsidies will boost use of mobile PC data plans. 

The public policy angle is that, to the extent there are users who want to use the Internet, but do not own PCs, this sort of bundling addresses their needs. To the extent there remains a gap between desire to use the Internet, and the means to do so, programs of this sort will address the problem. Some people do not want to use PCs or the Internet, and virtually nothing is going to entice them to do so. On the other hand, bundling access devices with service is a proven way to stimulate demand. 

Another angle is that this bundle moves us further towards a world when broadband access will be a "personal" service. Where in the past voice service was to "places," it now is to "persons." Where broadband access largely is to "places," this sort of plan moves us in the direction of broadband access to "people."