More Competition in Rural Markets Likely

Whatever else might happen with the broadband stimulus program, odds are that the spending of those funds will increase the amount of competition in rural markets. The reason is simple enough: cable, mobile and fixed wireless service providers are likely to apply for grants under the programs, and it is likely some will receive funding.

The American Cable Association, an industry group for small independent cable operators, probably will make a fairly significant play for funds. To be sure, many rural telcos also run separate cable system operations. But even where an in-region telco gets funds to support its in-region cable operation, increased broadband access from the cable unit will dampen demand for telco-provided broadband.

It isn't clear whether fixed wireless providers will apply, but there are many hundreds of small Internet service providers using fixed wireless to provide broadband in rural and thinly-settled areas. Also, depending on the final language adopted, larger mobile providers might be able to apply as well.

The impact might not be felt immediately. It is possible many competitive networks will get funding to support operations in nearby communities, if not directly in rural areas.

But we all know what happens when an incumbent in one area looks for growth. The answer in rural areas tends to be expanding service into adjacent or nearby communities. So stimulus funds might allow providers to fortify their backhaul and other assets enough that later access operations in nearby communities are more feasible.

AT&T Goes Nationwide with Subsidized Netbooks

People sometimes think the real "problem" with broadband is that it isn't available. In fact, there is growing recognition that adoption (demand) is the primary issue. And about all it takes to boost broadband usage is to make it easy, affordable and even a bit fun. 

AT&T, for example, has announced it is adding mobile broadband equipped Acer, Dell and Lenovo netbooks to its standard line of products this summer. AT&T began testing sales of 3G-equipped netbooks in its retail stores in April. Based on the successful results, AT&T is going nationwide. 

Pricing for the nationally-available offer are not yet available, but AT&T in "limited trials" has been offering a netbook for a $49.99 in Atlanta and Philadelphia test markets. To get that price, users sign a two-year contract for wireless and wired Internet access.

In the test markets the Acer Aspire One, Dell Inspiron Mini 9, Dell Inspiron Mini 12 and LG Xenia were available. 

Prices for the netbooks start at $49.99 and go up to $249.99 with a purchase of AT&T's Internet at Home and On the Go plan, which starts at $59.99 per month. Customers who just wanted the netbooks could buy them for $449.99 to $599.99.

A third option, DataConnect only, allowed users to buy netbooks starting at $99.99 and going up to $349.99, with purchase of a 3G DataConnect plan costing $40 to $60 a month.

“It’s clear there’s a demand for mini laptops,” says Ralph de la Vega, AT&T Mobility and Consumer Markets president and chief executive officer says. “We’re getting interest from tweens, teens, young adults, moms on the go and small business owners."

High-Definition Voice: Most Impact in Conferencing Apps

A poll of 186 industry professionals shows a belief that high-definition voice quality will have greatest impact for video conferencing and conference calling.

The Global IP Solutions-sponsored poll also shows that a third of respondents think high-definition voice quality also will benefit overall productivity in the workplace, while 57 percent considered conference calling would benefit the most in a work setting.

About 16 percent believe high-definition audio will have greatest impact for call center operations.

Some 11  percent of respondents say they use high-definition voice service “all the time or whenever they can” and an additional 30 percent reported having used it once or twice.  About  47 percent of respondents have not used it yet.

AT&T Launches "Synaptic Storage" Cloud Service

AT&T now is selling enterprises a new "AT&T Synaptic Storage as a Service", a storage-on-demand offer that provides enterprise customers with control over the storage, distribution and retrieval of their data from any location, anytime, using any Web-enabled device.

The service automatically scales storage capacity up or down as needed, and users pay only for the amount they use, AT&T says.

AT&T is introducing the service to customers on a controlled basis this month, with plans to make the service generally available in the third quarter. The service is deployed in AT&T Internet data centers (IDCs) in the U.S. and will be accessible by customers connecting to the Web anywhere. In time, AT&T plans to add the service to select global IDCs to meet customer demand internationally.

http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=26821

"Build it and They Will Come..." Again?

"Build it and they will come" became a demolished business strategy in the global bandwidth business, even though for a brief moment around the turn of the century, people believed that to be the case.

Still, the logic behind fiber-to-the-home projects in many ways represents the same sort of thinking. "New applications will flourish on a 100Mbps FTTP rollout even though nobody knows what those apps will be," says Khoong Hock Yun, Infocomm Development Authority assistant chief executive, and reported by CommsDay.

Still, it might still turn out to be correct, at least for providers of access connections, at some point. FTTH Council of Europe President Karel Helsen argues that content, gaming and entertainment companies now aer being invited to join the FTTU Council.

“If you provide the pipes, people will make sure that they fill it,” Helsen says. "Companies such as Nintendo, Sony, and Time Warner we welcome into our council and we’ve started talking to those companies since the beginning of this year.”

“We just had the first gaming association also join the European council and we believe also by having those people as members, you also create the pull effect from the market side to stimulate the rollout of fiber to the home,” Helsen says.

That isn't to argue such networks should not be built, or that new revenue-generating applications will not ultimately be developed. But it is likely to take some time.

Goodbye Sarbox?

The Supreme Court apparently is going to test the constitutionality of Sarbanes-Oxley rules. Personally, I hope the Supremes do rule that way. Sarbox has been a major burden for smaller and mid-sized firms, adding millions of dollar in annual cost, in many cases, and killing the Initial Public Offering market. 

http://www.businessinsider.com/henry-blodget-supreme-court-may-kill-sarbanes-oxley-and-resurrect-ipo-market-2009-5

Why Broadband "Penetration" Measures Often are Misleading

If you were trying to figure out how prevalent televisions, radios, digital video recorders, Slingboxes, PCs or DVD players were in people's lives, would it make more sense to measure how many Best Buy retail locations sold such products, or how many units are sold in any given time period?

Alternatively, if you were trying to measure the penetration of such devices, would you track the number of homes, businesses, or both, that have such devices in use?

Would you try to measure "personal" devices such as mobile phones or MP3 players the same way?

The questions aren't as "academic" as might first appear to be the case.

While it makes sense to measure the penetration of any mobile and personal technology on a per capita basis, because that is the way people buy and use such services and products, it arguably makes less sense to measure other products, such as T1 lines, Ethernet or other fixed broadband connections the same way, because that is not the way people buy or consume such products.

Were we to measure Ethernet connections on a per-capita basis, penetration would be quite low, for example. Most people intuitively would understand that sort of issue.

But where it comes to fixed broadband penetration, that is precisely the problem we face. Agencies are used to measuring fixed broadband in just about that fashion: per capita, even though people do not buy such services that way.

The point simply is that we need to measure things in a way that reflects the way people actually use a given product or technology.

People do not buy fixed broadband subscriptions the same way they buy mobile phones.

So per capita indexes are more suited to some products than others. Per-capita fixed broadband indexes are affected by mundane things such as household size, business adoption and consumer preferences.

"Consider Portugal, in which there are approximately three persons per household," says George Ford, Phoenix Center for Advanced Legal and Economic Public Policy Studies chief economist. "If every household had a broadband connection, then the per capita subscription rate in Portugal would be 33 percent"

"In Sweden, alternately, there are approximately two persons per household," says Ford. "So, if every home had a

connection, then the per-capita subscription rate is 50 percent."

"The number of fixed broadband connections per person is a flawed measure because it will vary based on the average size of a household or business establishment," Ford notes.

"In the United States, nearly every business and household had a fixed line telephone when the 1996 Telecom Act was passed," Ford notes. "Yet, telephone subscriptions per capita were only 49 percent at the time."

"In Sweden, which also had near ubiquitous telephone adoption, the telephone per-capita subscription rate was 69 percent.

The point, says Ford, is that per-capita measures are not meaningful tests of fixed broadband adoption, especially when comparing different regions or nations.

http://www.phoenix-center.org/perspectives/Perspective09-01Final.pdf