Mobile Broadband PC Data Card Growth Decelerates

Mobile broadband PC card accounts continued to grow in the fourth quarter of 2008, but at a much-reduced rate compared to the prior six quarters, researchers at comScore say. But it is a product that continues to have an enviable growth pattern.

PC data card adoption grew 163 percent overall in 2008, slightly ahead of the 157 percent growth rate in 2007. However, despite this rapid adoption curve, fourth-quarter growth showed the first signs of decelerating growth. On a quarter over quarter basis, the subscriber growth fell to just five percent, following sequential growth of 22 percent in the third quarter of 2008.

One can speculate about the reasons for the slower growth rate, but one obvious explanation is a deceleration of employment, reducing the number of users whose consumption is subsidized by their employers. Add to the that the slowing economy, and one probably has all the explanation one requires.

Consumer users might also be choosing to access the mobile Web using their smart phones, as a data plan already is required, and the logic of paying for another subscription plan to access the Internet and Web applications probably is unattractive.

PC Data Cards Cannibalize Landline Usage

Researchers at comScore say PC-based mobile broadband usage largely displaces tethered PC Internet usage. That is not to say wireless broadband is displacing fixed broadband, but only to note that most users do not spend more time online overall, when both mobile and fixed modes are available.

Looking at total hours of use in the fourth quarter of 2008, comScore found that the U.S. Internet user spent 90 hours online, or roughly one hour a day. Users who had both fixed and mobile broadband access spent 89 hours online during the quarter, using mobile or fixed access.

Of PC data card users with both a PC data card and a wired connection, 25 percent of their total online time (22 hours) was spent using a PC data card.

The rather clear implication is that PC mobile broadband is a substitute for fixed access, and does not increase the amount of time the typical user spends online.

There are some obvious implications. Over time, the typical user will start to see broadband access as something they have, irrespective of network. They will start to see this as a value that is measured against the cost of satisfying that need.

They probably are going to approach this as "broadband access is worth X dollars to me every month." They are not going to indefinitely pay for multiple accounts, supporting a single device, much less multiple accounts supporting multiple devices, forever.

The logic likely will parallel the way some wireless-only users behave. They simply decide that the ability to talk and text is worth some finite amount of money, and conclude that paying for that capability twice does not make sense. So they drop landline voice service and use some of that money to pay for heavier mobile usage.

Overall spend probably doesn't change much. As with so much else these days, consumers are willing to switch behavior when functionally equivalent products are available, and when use of those products costs no more than what they already spend, or costs less.

http://www.comscore.com/press/release.asp?press=2771

More Qualms About Broadband Stimulus: This Time From Small Rural Telcos

Large U.S. telcos have their doubts about whether it will make any sense at all to apply for any funds under the National Telecommunications & Information Administration's portion of "broadband stimulus" funds, and generally are barred from applying under the Rural Utilities Service rules.

It appears small, independent, rural telcos have similar qualms. Attendees at a MetaSwitch Forum workshop on the broadband stimulus plan were shaking their heads in disbelief about "strings" attached to receipt of funds under the RUS plan, in particular the nebulous language about investments in access that allow multiple providers to compete.

Depending on how the final rules shape up, it is conceivable that most telcos and cable companies will decide not to participate directly.

Twitter Adoption Surprises: Business Users Key

Twitter already seems to have been embraced as a business tool, new user data from comScore suggests.

You would expect the highest Twitter adoption by the youngest users. But that does not seem to be the case. Instead, older age cohorts are heavier users.

Analysts at comScore think business users explain the pattern. For whatever reason, business users seem to be acting as though Twitter and other micro-blogging tool have immediate business value.

Titanic Battle Shaping Up over Broadband

As busy as people are trying to prepare for the imminent opening of the first of three proposal submission windows for funds authorized by the American Reinvestment and Recovery Act ("broadband stimulus"), a bigger food fight will begin to break out next year as the Federal Communications Commission opens a new rule-making on a national broadband strategy. As much attention as the broadband stimulus program is getting, it is going to be dwarfed by any new framework that emerges from the FCC effort.

The stimulus money is a temporary "shot in the arm." In fact, some question whether there will be much of any long-term impact from the majority of the money that ultimately is allocated, in jobs, an identifiable uptick in broadband use or economic growth.

Any new national broadband policy will reshape the broadband marketplace, creating new winners and losers on the supplier and reshaping the financial terrain for existing and would-be contestants, in ways that contribute "in a material way," to use the financial term, to the health of virtually all service providers, software and hardware suppliers.

Specifically, the FCC now is charged, by statute, to determine how tax dollars will be spent on deploying and upgrading Internet access across the United States. Telcos large and small--and their suppliers--have huge stakes in how those rules are recast. And make no mistake: current business models, revenue streams and company valuations are at stake.

The FCC's responsibility is also to update policies and regulations that have conspicuously failed to keep pace with changes in communications technologies and the different ways in which the US public actually get their phone, cable TV and Internet services.

It would not be overstating the case to say we will witness the biggest single change to U.S. communications regulation since either the 1934 Communications Act, or the Telecom Act of 1996, each of which has been foundational for shaping the U.S. communications environment.

As some of us have been arguing for a half decade or more, it is likely that regulators will be looking at greater structural change involving a form of structural or functional separation, developments which already have occurred in Europe and now are happening in Southeast Asia, and which has happened on a small scale in the United States as well, principally in Rochester, N.Y., where Rochester Telephone agreed to form a new wholesale access company providing local loop services to all licensed providers.

That move will be fiercely resisted by most telcos, you can be sure, as it formally breaks up the vertically-integrated model historically the mainstay in the U.S. market. Cable operators have to worry that they will, for the first time, also be forced to provide widespread wholesale access to competitors as well, something the cable industry always has opposed but which will be hard to avoid if other key providers are required to do so.

Small telcos face equally-large challenges, as a shift to broadband concerns might necessarily reshape rural investment rules in ways that directly harm the existing voice revenue support many hundreds of companies now rely on to support their firms. For hundreds of independent and rural companies, that government support is the single largest income category, vastly outstripping actual direct end user revenues.

The other potential changes are new requirements for minimum bandwidth, control of network management practices and a wide variety of business-model-shaping changes.

If you have any familiarity with the on-going disputes about universal service funds, or the intense pressure created by the debates leading up to the Telecom Act, you have some idea of what is about to happen.

Oddly enough, you will find widespread sentiment that the Telecom Act failed. But you will not find many human beings that believe their own choices, value or communications richness now are worse than they were before the Act was passed. What is clear is the foundational impact any rules changes will have on competitor fortunes. Still, an early prediction: no matter what ultimately happens, no matter which sectors claim they have "won or lost," end users will have richer options than before, with or without rules changes. But rules changes are inevitable.

Comcast to Use Smarter Phones to Enhance Wired Experience

Devices increasingly are key as service providers seek to add value to their wired and wireless experiences. "Compelling end user devices are definitely part of the story," says Chris Mairs, MetaSwitch CTO.

So it comes as no surprise that Comcast plans to roll out new cordless phones that add email and other Internet features, as Verizon is doing as well.

http://www.lightreading.com/document.asp?doc_id=174853&site=cdn

Conference Calls Really Do Need Live Blogging

Seth is right: conference sessions are more valuable--or can be, when a large call is in process--when there is a live blogging or chat function.

http://sethgodin.typepad.com/seths_blog/2009/04/reinventing-the-conference-call.html