By 2012, "Closed" Mobile Business Will be Over

Today, the wireless sector is on the edge of a seismic shift, says Deloitte. A survey of wireless industry executives found that 53 percent of surveyed network service provider executives believe their current closed business models will no longer exist by 2012.

That is a shocking finding, for several reasons. Many in the policy community seem convinced the only way to "change" the mobile industry is to legislate more "openness." Mobile industry executives, on the other hand, already believe openness will be the normal way they compete, within a shockingly short period of time.

One way of putting matters is that before the major legal challenges to any new set of wireless "neutrality" rules can be clarified, the industry already might have moved to an open business model, and arguably would have done so without any government action.

If some readers believe this is highly unlikely, one need look no further than the last major revision of U.S. telecommunications policy, the Telecommunications Act of 1996. Despite the fact that many observers argue the Act "failed," you would be hard pressed to find any user of communications who argues their services, prices and features are "worse" or even "the same" as prior to 1996.

Despite the current mistrust of markets, the recent record suggests that "regulatory failure" did not impede market success, defined as better and richer services for end users.

It appears the same thing is happening in the mobile business, and that mobile industry executives widely believe a shift to open models, precisely the state of affairs many policy advocates desire, already is happening at rapid speed.

In just three short years, economic power in the mobile business will be held by third party application providers, not service providers, mobile executives themselves believe.

More than half of the executives surveyed believe by 2010 the future of mobile will be driven by open mobile content, with 67 percent of the respondents believing it will be a “game changing” force within wireless in the short-term, Deloitte reports.

"When asked which mobile operating system has the greatest potential to be the U.S. de facto standard in five years, Google’s open source Android operating system was the runaway favorite with 43 percent of all votes, more than double the score of the next highest finisher," Deloitte says.

"In fact, 27 percent of those surveyed say that Internet companies, rather than network
carriers and handset makers, will dominate the U.S. wireless sector in five years," says Deloitte.

Nearly 60 percent of industry executives surveyed agreed that the future of mobile will be driven by open content and mobile software application providers.

"While almost two thirds of the survey respondents believe that open access regulations will accelerate the commoditization of U.S. wireless network carriers, companies that focus too narrowly on regulatory issues as the key catalyst for change may in fact miss the real market opportunities being driven by open platforms and technologies," Deloitte says.

The regulatory debate over "openness" obscures what will happen, irrespective of any new regulatory intervention. "In fact, when respondents were asked on the best course of action for network carriers to sustain their competitive advantage, keeping network access, devices and services tightly controlled and retaining as much as possible current proprietary business models was the least popular response."

In fact, 74 percent of the executives said that the key to their businesses in the future was to embrace open application and content models. One can argue that regulatory protections to open up networks are important because they will help this "natural" state of affairs to develop on its own.

It might not be politically popular at the moment to argue that a regulatory "light touch" still is the best course of action. But industry executives themselves seem committed to a view that open mobile networks are in fact the fast-coming and basic industry realty.

Whether one agrees that the Telecom Act was a success or failure does not seem to matter. The market seems to have lead to success, in spite of regulatory failure. Maybe we should not be in such a hurry to tinker with the process too much. It looks like openness is the future, no matter what interventions happen, or do not happen.

Global Revenue Now Lead by Mobile

Global telecom services revenue now is lead by mobile services, at 46 percent of total revenue, say researchers at Analysys Mason.

Wired voice revenues now account for 21 percent of total revenues.

Business services account for 14 percent of revenue, while consumer broadband now represents eight percent of total, the firm says.

Video represents about eight percent of total.

Net Neutrality and Free Speech: Issue More Complicated Than You Might Think

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Most of us likely think we understand what the First Amendment to the U.S. Constitution actually means. Most of us might be surprised at how complicated the matter has proven to be. It comes as no surprise that there is vociferous debate about what speech is, what a "speaker" is and whose speech is to be protected.

Among the issues jurists and courts have had to wrestle with are "whose" rights of speech are protected. Originally, it was the rather narrow right of political speech, a right possessed by the speaker, that was protected. Over time, though, there have been refinements or travesties, depending on one's point of view.

The classic example is free speech restrictions based on time or place, for example. There is no constitutional fight to "yell fire in a crowded theater," settting off a panic.

Over time, courts have had to grapple with what a "speaker" is. Under the law, a corporation, for example, is a "person." Does a person have the right of free speech?

Over time, the definition of "speech" has widened, and now is a mix of the rights of the speaker and the "rights" of the listener.

To the extent that network neutrality touches off yet another round of debates about how the right of free speech applies, we likely will find serious debate yet again. It's a lot more complicated than most of us might think.

Junction Networks Adds Standard Conferencing Features

Junction Networks has added new features to its business voice service packages at no additional cost, providing users features they have asked for, the company says.

“Our goal is to deliver the most cost effective, business-class phone service for 5-100 users. Now, our customers benefit from more features like conference bridging for 15 people and acd queues while still paying under $20 per user, monthly,” stated Michael Oeth, CEO of Junction Networks.

The "Small Business" OnSIP package, which costs $99.95 a month, now includes 15 voicemail boxes; four attendant menus; four groups; a conference bridge and an ACD (automatic call distributor) queue.

The "Medium Business" package, selling for $199.95 a month, now includes 50 voicemail boxes,
six  attendant menus, six groups, five conference bridges and two ACD queues.

The OnSIP Conference Bridge has also been reduced to only $19.95 per month, with a 15 user limit.

The changes are based on customer feedback, especially demand for conferencing features.

The enhancements are examples of two fundamental trends. First, IP telephony providers continually strive to provide more value to their users, often at no incremental cost, sometimes at low cost.

Second, end user demand for conferencing features illustrates the more-important role one-to-many and many-to-many communications now are assuming in the business world. Though much voice and email communications continues in one-to-one mode, lots of other activity has moved to one-to-many channels. Blog posts, microblogging, social network updates and podcasts, for example, are augmenting traditional one-to-one communications.

Are Fixed and Wireless Broadband Equivalents?

Consumer desire to substitute a wireless broadband connection for a fixed connection remains a question whose answers are yet developing. There are few markets, except Austria, where fixed and wireless broadband really are viewed widely by consumers as equivalent products.

So answer the question "yes" in Austria, where wireless and fixed products are seen as a single market, not two. In most markets, though, especially those with robust fiber to home availability, regulators at least do not see the existence of a single functional market.

In most developing markets, wireless might continue to be the preferred access method, so again there is no functional equivalence between fixed and wireless modes.

But at least in some European markets, consumers are, in fact, starting to choose their broadband connections based on price, rather than on whether the service is delivered using a fixed or mobile networks, says Pyramid Research. For fixed network operators, there likely is no good news in those findings.

First, fixed has to compete with mobility, head to head, and it that fight, mobility offers some value fixed services cannot provide, namely the ability to use the broadband connection outside the home. The other bad news: consumers see so little differentiation they are buying based on price.

Such equivalence is highly unusual. The European Commission, which recently deregulated the broadband access market in Austria precisely because it is so competitive, admits that the Austrian situation is unusual. It is the only European Community market where wireless broadband is widely deemed to be a functional substitute for wired services that price regulation is not needed.

Pyramid likewise argues there is a "strong link" between fixed and mobile broadband adoption. So strong a connection, in fact, that these markets can no longer be looked at in isolation, though today's broadband access market still primarily is a matter of competiton between fixed line providers.

But mobile broadband increasingly will affect the fixed sector, Pyramid believes, especially in markets where overall broadband penetration is low. That includes markets such as Russia, Slovakia and Ukraine. In such markets there is only limited opportunity for fixed-mobile broadband bundles, because the services are competitive more than they are complementary.

What remains to be seen, though, is what happens to a highly-competitive market for fixed and wireless broadband when fiber-to-customer services become available. Even the EC says it will continue to monitor the situation and might reimpose regulation if optical fiber is widely deployed. The reason is a belief that, in such a scenario, where wireless competes with fiber-to-home, the products will naturally diverge again.

Wi-Fi Hotspot Market Increasingly Provides "Mobile Offload"

Some proponents once touted Wi-Fi hotspots as an alternative to mobile or out-of-home broadband service. It increasingly look as though the Wi-Fi hotspot is emerging as a way of offloading traffic from the mobile network, as well as a way of supporting mobile devices that do not have data plans.

In-Stat estimates that hotspot usage will increase in 2009 by 47 percent, bringing total worldwide connects to 1.2 billion.

“Mobile operators have become increasingly involved in the hotspot market globally as they assess the potential of hotspots to offload wireless data traffic from overburdened 3G networks," says says Frank Dickson, In-Stat analyst.

Also, mass market adoption of Wi-Fi-enabled smartphones has significantly altered hotspot usage, with these devices accounting for the majority of access sessions in some locations,” he says.

Total worldwide hotspot venues will reach 245,000 locations in 2009, while AT&T is on course to experience 500 percent usage growth, year over year, In-Stat notes.

Communications Key for Smart Grid, Survey Suggests

There's a key reason wireless service providers believe process automation (machines communicating wtih machines) will power the next great wave of wireless growth. It will.

According to a Pacific Crest Mosaic survey, electrical utilities consider two-way communications the most important technology in creating a fully operational "smart grid." About 60 percent of executives say that is the case. Smart meters, by way of contrast, are seen as "most important" by only 15 percent of respondents.

That should come as no surprise. Meters are a basic part of the utility business. So meters, at least for upstream reporting,  as such are widely in use. It is the ability to control the flow of electrons on the grid which is lacking. Local switches for such purposes already are available, allowing utilities to remotely turn on and off home air conditioning units at times of peak load, for example.

Two-way communications designed for power grid use also have been available for some time, allowing utilities to conduct such on-and-off operations. What is needed are more-granular ways of assessing, in real time, the state of the grid and power consumption, so the network of switches can be controlled.

That can be done using either wired or tethered communications. But wireless will appeal because the network already is available.