Broadband Seen as a Utility, Survey Suggests

Nearly 70 percent of all respondents believe uninterrupted broadband access should be as readily available as other utilities like electricity and water, across all ages, race, income brackets and geographic lines, according to a new survey commissioned by SuperComm and conducted by Opinion Research Corporation.

A majority of respondents believe uninterrupted access is essential, while an overwhelming 75 percent of respondents between the ages of 18 and 34 want to see broadband available like other utility services.

Also, almost 80 percent of respondents in the same age group believe faster broadband speeds improve productivity at work.

The results, while hardly surprising, suggest some danger for communications service providers. Demand for broadband is nearly ubiquitous. But the analogy to electrictiy and water, both of which commonly are provided as regulated monopoly services, is potentially worrisome. That is the way the communications business has been viewed for most of its history, and there remains danger of a return to such thinking if service providers do not demonstrate that competition works better than regulation.

Most users do not remember what communications was like before the 1984 divestiture of AT&T. But low rates of innovation and high prices were facts of life back then. Matters arguably improved with the Telecommunications Act of 1996, though many might fault the results, or the amount of competition that was enabled.

Fortunately, we have benefitted from mobility, the Internet and broadband, which together arguably outweigh anything that has been done, or not done, on the telecom regulatory front. Nothing less than continued innovation and advances in consumer welfare will prevent some from attempting to turn back the clock.

Communication Spending Not a Good Economic Predictor

U.S. consumer spending on mobile phone, broadband and other communication services is not a very-good predictor of where the economy is, most of the time. The reason is that spending on such services is so stable, averaging between 2.2 percent and 2.5 percent of household spending. Though consumers might shift a bit at the margins duirng tougher times, they do not necessarily spend much more during buoyant times.

For such reasons, one cannot predict very much about the potential health of the economy by looking at consumer behavior in the area of communications spending. Credit availability, on the other hand, almost always tells us lots.

According to the Federal Reserve consumer credit report for July 2009, consumer credit fell almost $22 billion to $2.74 trillion. The figure has been dropping fairly steadily since the middle of last year.

The July number represents an annual rate of decline of more than 10 percent. Bluntly, the government still has not discovered a way to get large financial firms to loan money, and the economy is not likely to recover sharply until it does.

reviewed the data and told Reuters, “There is no way that this recovery can be sustained unless we see a pickup in household spending," says Bernard Baumohl, chief global economist at The Economic Outlook Group.

The Fed data says a great deal about what is wrong with programs to revive GDP growth. Money spent on long-term infrastructure projects and healthcare may be well-intended and even completely necessary, but that capital does not have the capacity to put people back to work quickly or get them to spend money that they genuinely believe that they do not have.

So the 2009 holiday spending season may be the most important one in memory. If retail spending is flat or declines, it likely will mean that the hibernation of the consumer will continue well into next year.

The good news is that traditional measures of recovery seem to be perking up. The bad news is that the recovery seems fragile. Still, as the saying goes, it is "darkest just before dawn." The recovery is inevitable. The issue many raise is the glide path up from the bottom.

The good news for communications service providers is that the business is structurally stable, year in and year out. The bigger problem remains the structural change in revenue models, away from voice and towards data services. If historic patterns hold, even with a robust economic recovery, consumers will not spend very much more than they do now.

Business behavior is different, owing in part to the changes in employment that can drive spending or restrict it. Most of the revenue changes one typically sees in a downturn are caused by business spending, not consumer spending. So business spending is more contingent on employment changes.

You can make your own guess about the pace of hiring during the recovery. Even there, though, there are changes. Voice lines tradtiionally have been where we have seen the incremental changes. These days, the insistent pressure is from bandwidth demands, which increase steadily each year, almost irrespective of headcount.

If you had to make a guess, you probably would do well to pay close attention to mobile and fixed broadband as the places where growth will be steady and measurable, no matter what the pace of recovery.

Who Uses Social Networks? Everybody, says Forrester Research

Who uses social networks? "Everybody," says Forrester Research analyst Sean Corcoran. Adults younger than 35 are nearly universally involved. Only three percent of 18- to 24-year-olds and 10 percent of 25- to 34-year-olds are socially "inactive."

What’s more, a staggering 89 percent read blogs, listen to podcasts, watch user-generated video, read forums or customer ratings and reviews. Nearly the same percentage maintain profiles on social networks and visit social networking sites.

Almost half create content, far higher than any other age group.

Adults ages 35 to 54 rapidly increased their participation on social networking sites Compared with last year, this group grew its participation by more than 60 percent, and now more than half of adults ages 35 to 44 are in social networks.

About 38 percent of adults ages 45 to 54 use social network sites regularly. About 20 percent of users in these age brackets produce content. About 70 percent read blogs, listen to podcasts, watch user-generated video, read online forums or user reviews.

About 70 percent of online adults ages 55 and older use social tools at least once a month. About 26 percent use social networks and 12 percent create social content.

EU Issues Report on Mobile Phone Cancer Risk

The European Commission is the latest group to issue a report on non-ionizing radiation, any type of electromagnetic radiation including near ultraviolet, visible light, infrared, microwave, radio waves, and low frequency RF (longwave) that does not cause heating.

The EU report basically argues there is a "significant risk of brain tumors from cellphone use." The issue has been studied for decades, and there might be thousands of studies that investigate one form or another of non-ionizing radiation, with results that might fairly be called inconclusive.

Still, the EU study says there is enough uncertainty to warrant keeping "certain establishments free of wireless device radiation, including schools, child day care centers, retirement homes and health care institutions."

Dr. George Carlo, leader of the Cellular Telecommunications Industry Association’s $25M research project, for example, is said by the EU report to have found in 1999 "a statistically significant doubling of brain cancer risk" from mobile use. But three of the five subsequent brain tumor studies published between 2000 and 2002 found “non-significant” elevated risks.

But those studies also are said to show an elevated risk as years of mobile phone usage lengthen.

"Studies led by Professor Lennart Hardell in Sweden found significantly increased risk of brain tumors from 10 or more years of cellphone or cordless phone use," the report suggests. "For every 100 hours of cellphone use, the risk of brain cancer increases by five percent," the report suggests.

"For every year of cellphone use, the risk of brain cancer increases by eight percent," while "after 10 or more years of digital cellphone use, there was a 280 percent increased risk of brain cancer."

"For digital cellphone users who were teenagers or younger when they first starting using a cellphone, there was a 420 percent increased risk of brain cancer," the report says.

The study suggests that dangers are greatest for children.

The study also suggests, as you might expect, more studies of greater rigor. That is not a bad idea. Up to this point, the studies have been contradictory, and therefore inconclusive. But it would not be fair to say no studies have suggested any danger: some have.

Right now, some of us would say that mobile technology is a highly useful technology that might carry some risk, as do automobiles, airplanes or even other household tools. As with any tool, use them wisely.

SES: Back to the Future for Satellites

U.S. and European broadband stimulus plans are dampening prospects for delivering broadband Internet access using satellite networks, SES, the largest satellite operator, says. On the other hand, growing demand for satellite-delivered high-definition television likely will grow.

In many ways that is a "back to the future" move, as satellite point-to-multipoint networks always have been optimal for delivery of linear TV signals. Specifically, SES sees a growing role for use of satellite as the delivery mechanism for multi-channel TV by telcos in situations where fixed broadband networks do not have the capacity to delivery TV signals.

That might represent a market including 40 percent to 50 percent of locations.

“I personally believe the rollout of terrestrial broadband will be such that you can’t demonstrate the viability of satellite in the long term,” Romain Bausch, SES CEO, told the Financial Times.

SES provides two-way satellite broadband to 45,000 customers in Europe but would not invest in new capacity for purposes of serving Internet access demand, Bausch says. Support for mobile voice and video is a different matter, though.

SES plans to add eight satellites to its 40-strong fleet within three years, boosting capacity 19 per cent. About 170 of the 200 new transponders will cover emerging markets where SES supplies the “backbone” to mobile networks in remote areas.

High-definition television, which requires twice the satellite capacity of standard definition channels, continued to power SES’s video revenues.

BSkyB, an SES customer, has announced plans to pioneer 3D television in the UK in 2010, which will require a third more satellite capacity than current HD programming.Ultra-HD, being tested in Japan, could consume four times as much capacity, Bausch also notes.

Gmail User Engagement Seems Higher: Why?

Behavioral differences between users of similar products always are profoundly important, either because one provider has uncovered a better end user interface, better features, some unmet user need or because end user segments are revealed by their choices.

According to a new study by ChimpMail, which analyzed about 184 million email messages , when it comes to open rates, click rates, bounces and abuse complaints, there are distinct differences in recipients' engagement with email between major webmail services.

Open rates, for example, were highest among Gmail users (31 percent) and lowest among AOL users (20 percent). Gmail also ranked highest for click rate with 7.4 percent compared to Yahoo's lowest of 4.2 percent.

Messages sent to Gmail accounts also had the lowest hard bounce rate, though other data indicates Gmail’s spam protection may be so stringent that messages disappear without producing a bounce. A 2009 Return Path study, for example, found a 23 percent nondelivery rate for marketing messages sent to Gmail.

According to comScore, Gmail is the third-most-popular e-mail property among U.S. Internet users, though it posted the highest growth rate between July 2008 and July 2009. Unique visitors to the service rose 46 percent to nearly 37 million.

ChimpMail executives suspect the data show there is some demographic difference between Gmail and other Web-based email users that accounts for the higher engagement rates.

Some also think better junk mail filtering by Gmail accounts for the difference in engagement. Perhaps fewer messages, better tailored to actual end users, are being delivered to Gmail users. It is possible that this better matching of interests and messages is having an impact.

What Makes a Business "Social"?

For the past couple of years, businesses have been trying to figure out what it means to be "social," to create "communities" of users, prospects and customers.

The concept is hard to understand, in some ways. Every business satisfies some understood end user want or need, selling products or services that are an answer for those needs or wants. So social networking is seen as a better way to connect with people, and buildconnections between people, in an environment that is conducive to the company’s success.

Some of us call this a shift from "push" marketing to "pull" marketing, from "promoting products" to "inviting people to be part of a conversation about shared interests."

Jahin Mahindra points to Chick-Fil-A as an example. The firm knew it would have a hard time competing against other giants such as Kentucky Fried Chicken. So instead of "selling chicken," Chick-Fil-A created a gathering spot for mothers with children.

Almost all Chick-Fil-A buildings are constructed with indoor play areas for children. Wi-Fi has been added to many locations to ensure the parents can flip open the laptop at the table while junior plays in the jungle gym. Employees routinely pass through and refill drinks or even clear tables as if users were dining in a more formal establishment.

What this has done, in many Chick-Fil-A locations, is create a place for the desperate housewives to gather and nosh on weekday afternoons, Mahindra says.

"It’s not about the food; It’s about the social environment created that is conducive to buying the food," says Mahindra.

"If you have a location, make visiting your location a social event," he says. "Why do you think many bookstores now have coffee shops built in?"

"If you’re a meeting place as well as a place to buy things, people will frequent your location for reasons other than buying stuff," he says.

That's admittedly a tougher thing to do in a business-to-business setting than in a business-to-consumer environment, but the principles are the same.