Free Press Asks for Future-Proof National Broadband Speed Definitions

The Free Press has filed comments wtih the Federal Communications Commission asking for a "future-proof" definition of "broadband" that takes into account the services and applications consumers can use, especially high-quality video communications.

Derek Turner, research director of Free Press, says the definition has to be flexible, evolving over time and not unduly restricting speeds or capabilities.

In all likelihood, though service providers will likely always have some differences with Free Press, broad agreement on standards that relate more to capabilities than specific immutable numeric targets makes good sense.

Everybody believes speeds will continue to increase over time, but carriers obviously do not want rigid standards set that distort investment priorities or have negative implications as far as raising investment capital to build those capabilities into networks.

Free Press, on the other hand, does not want targets set so low that carriers do not have incentive to keep upgrading.

The good news here is that a greater degree of understanding about broadband standards seems to have developed over the past couple of years, between policy advocates and industry suppliers.

Verizon to Introduce New Feature Phone Data Plans

“Enhanced Multimedia Phones” using an HTML Web browser, EV-DO Rev. A and a QWERTY keypad, and sold by Verizon Wireless starting in September 2009, apparently will be sold with a new data plan, according to the Boy Genius Report.

Apparently the Samsung Rogue is the first new Verizon handset to meet the criteria. The idea, clearly, is to monetize expected bandwidth use--expected to be light--by customers buying those phones.

One of the new data plans costs $9.99 for 25 MBytes while the other costs $19.99 for 75 MBytes of monthly usage.

The assumption is that users of such devices will mostly want access to email and light Web access on an occasional basis. The data caps might appear at first glance to be paltry, but Verizon Wireless undoubtedly has done enough data mining of its current customer base to set the caps in an appropriate way.

Heavier users of course have the option of buying the other standard data plans.

Not all users will be happy about the new charges, but they will be even less happy about charges for casual use, set at $2 a Mbyte.

Sprint Sells HTC Touch Pro2

Sprint Nextel will begin selling the Windows Mobile-based HTC Touch Pro2 on Sept. 8, 2009, for $349.99 with a two-year service agreement and after $100 mail-in rebate. The touch-screen device features the more-popular slide-out QWERTY keyboard and a 3.6-inch tilting screen.

Additional business features available on HTC Touch Pro2 include International Quad-Band capability (CDMA, GSM), full HTML browser from Opera, stereo Bluetooth wireless technology, WorldCard Mobile Business Card Scanner, Facebook integration and Linked inboxes, which link personal and work contacts. A 3.5 mm headphone jack, a microSD card slot and an auto-focus 3.2 megapixel camera/camcorder also are standard.

As does the Palm Pre, the Touch Pro2 organizes messages across message formats, so that voice, text or email messages from a single person can be searched "under a single contact card," HTC says.

Sprint appears to be bundling the device, or suggesting it be bundled with, Sprint TV and Sprint’s sports applications NFL Mobile Live and NASCAR Sprint Cup Mobile.

Without knocking either the device or the way Sprint Nextel envisions the user scenario, the launch illustrates the complex problems marketers now are having in positioning specific devices and network features.

"Smart phone" doesn't cut it, in many ways. HTC seems to have developed the Touch Pro2 as a business device, aimed at users who want to do things like participate in conference calls. But it seems to me a confusing positioning to emphasize entertainment applications for such a device.

That isn't to say people aren't increasingly interested in devices that bridge the work and personal spaces, but simply that the positioning of the Touch Pro2 would more logically have been as an enterprise tool for users who think conferencing on a mobile is a more compelling feature than simple email handling, which RIM seems to have staked out, or the simple Web surfing niche, which Apple now "owns."

"Conference in your pocket" would seem a better fit between end user niche and the device's native capabiltiies. To be sure, Sprint is emphasizing "stay productive" in its messaging. And perhaps that is where Sprint should be developing messaging around this specific device, as tough as that is. The references to Sprint TV--to me, at least--conflice with the "collaboration tool" features of the device.

HTC’s Straight Talk technology enables the Pro2—with carrier cooperation—to transition from an e-mail to a single- or multi-party conference call, as well as having the ability to offer itself as a conference room–like speakerphone system.

Straight Talk technology, according to HTC, includes a mechanical and acoustic design that allows it to offer a speakerphone experience similar to those in boardrooms; asymmetric speakers and noise suppression technology with full-duplex acoustics deliver a “high-fidelity voice and sound experience.”

That's the end user niche it seems to me Sprint Nextel should not stray from with this particular device.

Mobile Broadband Makes a Shambles of "Broadand Penetration" Statistics

At the end of 2009, Forrester expects mobile Internet penetration to reach 17 percent in Western Europe, the same adoption rate for the PC Internet a decade ago. If the growth rate remains the same, mobile broadband would hit something on the order of 60 percent to 70 percent penetration in 10 years.

That would make a shambles of efforts to quantify broadband penetration in Western Europe, as similar trends in the U.S. market likewise would make most current concerns about broadband penetration likewise irrelevant.

We have seen this sort of thing before in the global communications business. Policymakers used to wring their hands about voice penetration in developing countries. But monthly costs of $5 to $10 a month now are making mobility the way many people are getting access to voice. Increasingly, wireless handsets will be the way most people in developing regions get access to Internet communications and applications as well.

U.S. policymakers thought a major revamp of communications policy would spur competition in voice, almost precisely at the point that Internet applications were about to make those concerns, if not moot, then of much-lesser concern.

Forrester expects mobile Internet to grow to 39 percent penetration by the end of 2014. That's a lower end point than for the PC Internet in 2004, but the growth curve per se looks quite the same, Forrester Research says.

Netbook Growth Rate Twice That of Notebooks

If you have looked around the table at your last conference room meeting, you have noticed that netbooks already have grabbed significant user share. A new study by NPD Group confirms the traction. In the second quarter of 2009, the netbook segment grew 40 percent sequentially, while notebook sales grew 22 percent sequentially.

In some markets, such as China and Latin America, netbook sales already are greater than notebook penetration.

Still, the installed base of netbooks is about 22 percent of the portable computer market. Asus, the pioneer in mini-note PCs, has been steadily losing share because tier one brands like Acer, HP, Dell, Lenovo and Toshiba have become increasingly aggressive in the segment, NPD Group says.

In many regions, telecom providers have been offering subsidized mini-notes for several quarters, which helped propel growth. In Western European countries, a number of telecoms are subsidizing 100 percent of the price of the mini-notebook devices when the customer signs a two-year data plan contract.

Mini-notebooks have been a significant contributor to the growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers.

Suppliers generally seem to be differentiating notebooks from netbooks by screen size. At about 12 inch screen sizes, netbooks start to overlap with notebooks. Some suppliers likely want to increase average selling prices for netbooks, but price is probably the reason so many netbooks have been sold.

Hulu Cannibalizes Pay Per View, DVR

There's one take-away we ought to gain from looking at the number of subscribers to multi-channel video entertainment services or users of Hulu.

And the take-away is that Hulu cannibalizes pay per view or on-demand programming or digital video recorder income that otherwise might be gained by linear video providers.

On the other hand, we might also note that the revenue potential to be gained from time-shifted services is not all that great at the moment.

The issue is much the same as now experienced by content publishers in most other areas. Namely, that although online distribution costs are lower, revenues are much lower. There remains a revenue gap for online distribution compared to legacy distribution that is not yet fully understood, yet.

Some service providers think the answer might be "TV Everywhere," where a user paying for a linear video subscription can watch that content on mobiles or broadband-connected PCs. The business issue there is just about as challenging: the revenue comes from keeping a multi-channel video subscription. Most of the rest of the distribution is just cost.

The Difference Between Video and Music Business Models

The video business is different from the music business in one significant respect: where people routinely prefer to own their personal collections, they rarely want to "own" news, sports and most serial TV fare. That has some fairly signficant implications for business models. "Buy to own" makes logical sense for consumers of music. "Rent to view" makes more sense for most video and movie fare.

The historic example is the difference between adoption of cable TV and adoption of subscription music services. There are perhaps 20 million XM Sirius subscribers, compared to 63 million cable TV subscribers, plus three million telco video subs and 31 million satellite TV subscribers. In other words, there are 97 million video subscribers, compared to 20 million XM Sirius subscribers.

Most video watchers want to see news, sports and other events only once, movies once or twice. Most music listeners want to own and listen to some favorite songs over and over again. That suggests a stronger market opportunity for video subscriptions, compared to music subscriptions, and a larger market for on-demand video than on-demand music streaming.