Unbundling, Wholesale Might Not be a Good Thing for Broadband

Almost without exception, owners of broadband access infrastructure are opposed to unbundling requirements (wholesale). Almost without exception, competitors who do not own facilities are in favor of such requirements.

Blair Levin,  former executive director of the Omnibus Broadband Initiative at the Federal Communications Commission and now Aspen Institute fellow, appears to have said that "due to the uncertainty of unbundling; providers will not be able to produce enough capital to support a business."

Levin was a top advisor to FCC Chairman Reed Hundt, when the Telecommunications Act of 1996 was created and passed, and is quite familiar with the market impact of wholesale access policies.

It might go too far to say Levin prefers wholesale to other mechanisms. Under different circumstances, he might approve. But given the reliance on the competitors one has got, rather than the competitors one might wish for, he seems to have realistically concluded that, in the United States, at this time, the approach has to rely on continued investment by the competitors actually in the market and able to make facilities investments.

In other words, given the capital intesity of ubiquitous broadband deployments, the uncertainty around the business case and the prevailing constellation of commercial and governmental forces, it likely is unreasonable to expect more than a couple, perhaps a few, facilities-based contestants in the fixed-line space or the wireless space, though there may be more room for competitors in the wireless space.

Given those economic realities, policies that discourage continual investment by the few players able to compete on a facilities-based basis almost dictates a policy that does not impose wholesale or unbundling requirements that choke off investment.

It might not be the best of all possible worlds, but that is not the world we have been given.

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"Minimally Viable Product" and "Maximally Buyable Product"

Developers of new products will benefit from applying a "minimum and maximum" approach to crafting new products, says Dharmesh Shah, HubSpot CEO. "One of the key parts of the lean startup is the concept of a “minimally viable product," he says.

The MVP is a product that has the minimum set of features needed to learn what the market wants. The idea behind the MVP is to spend as little energy is possible figuring out whether what you’re building is something people want.

The other element is reduction of barriers to adoption. He calls that the “maximally buyable product.”

To be "maximally buyable, there are some elements everybody would intuitively grasp. Products or applications should be easy to understand, easy to try and easy to buy. For many products, the business model and design should also make it "easy to remain a customer." In other words, design for longevity of customer relationship.

In many parts of the communications service provider market, consumer customer relationships last three years or less. Application relationships can last months to a year. Changing the length of customer relationship can have dramatic impact on profit margins.

Customers with longer tenure tend to have fewer support requirements, since they know how to use the product. Since there is a marketing cost to gain a new customer, the longer the relationship, the lower the average cost to acquire customers. Customers with longer tenure tend to buy additional products a company offers, and therefore tend to have higher average revenue per user, as well.

The non-intuitive advice is to make a product "easy to leave." This runs counter to any marketer's thinking, which will more naturally lean towards customer lock in. But the easier you make it for customers to leave, the more likely that are to buy in the first place.

On Startups by Dharmesh Shah

World Cup Affects U.K. Latency, Packet Loss

As you would expect, the World Cup has driven up video consumption. Timico, a U.K. Internet access provider, set a new record for video usage online, with usage up 309 percent over average. So what's happened on the technical side that affects end user experience?


Higher latency and packet loss seem to be the main effects."Some users may only see a slight increase in latency or a small amount of packet loss whilst for others latency has quadrupled and packet loss is in the region of five percent," says ThinkBroadband.

In one test, the average latency has quadrupled from around 28 milliseconds to approximately 120 milliseconds at peak World Cup time and packet loss increased as well.

The hit to user experience is video occasionally breaking up or freezing from packet loss, while websites would load more slowly.

http://www.thinkbroadband.com/news/4282-can-the-uk-broadband-network-cope.html

iPhone 4 a "Major Leap" Says Walt Mossberg

Wall Street Journal technology reviewer Walt Mossberg says the Apple iPhone 4 is "a major leap over its already-excellent predecessor, the iPhone 3GS," on both hardware and software fronts.

The iPhone 4 redesign features a radically-sharper screen; a second, front-facing camera; a larger battery; a better rear camera with flash; and a faster processor into a body that is 24 percent thinner, a bit narrower, and retains the same length and weight as its predecessor's, says Mossberg.

With the front-facing camera, and clever new software called FaceTime, Apple has brought simple, high-quality video calling to mobile phones, albeit, for now, only over Wi-Fi and only among iPhone 4 owners.

In addition, the iPhone now includes an updated operating system that adds catch-up software features such as limited multitasking; folders for grouping related apps and a unified email inbox for multiple accounts and the ability to present messages as threaded conversations.

"While its 3.5-inch screen, once considered huge, is now smaller than those on some other smartphones, the high resolution packs in a lot of material and makes text appear almost like ink on fine paper," says Mossberg.

"Voice quality was quite good, even on long speaker-phone calls, and data performance over Wi-Fi was excellent," he adds. "Video and audio streamed from the Web played smoothly."

Apple claims longer battery life for most functions—seven hours of talk time, for instance, versus five hours on the earlier model.

Some will question the degree of multitasking support, though. To prevent a drain on battery life, Apple has allowed only certain apps to fully multitask, such as Pandora or voice-prompted navigation apps, which keep working while you're on a call. Others that fully work in the background include Internet calling apps, and those that perform long downloads, he says.

"But some logical candidates, such as Twitter and Facebook, merely pause in place when you switch away from them," says Mossberg.

Apple says constant fetching of hundreds of social-networking updates in the background would kill the battery too quickly.

"In fact, for many scenarios, such as games, Apple's version of multitasking is really just fast switching among open apps that save their place," he notes.

Because iPhone users can easily accumulate hundreds of apps, it can become difficult to organize them. So the new iPhone OS now allows you to group them into folders.

"The most important downside of the iPhone 4 is that, in the U.S., it's shackled to AT&T, which not only still operates a network that has trouble connecting and maintaining calls in many cities, but now has abandoned unlimited, flat-rate data plans," he says.

In an effort to improve performance, Apple added a wrap-around antenna, and the device automatically tries to connect using the least-congested frequencies as well as frequencies with higher quality (less signal interference).

"Just as with its predecessors, I can't recommend this new iPhone for voice calling for people who experience poor AT&T reception, unless they are willing to carry a second phone on a network that works better for them," says Mossberg.

"For everyone else, however, I'd say that Apple has built a beautiful smartphone that works well, adds impressive new features and is still, overall, the best device in its class," he says.

20% of Android Apps Grant 3rd Parties Access to Private/Sensitive Info, Study Says

Some 20 percent of applications in the Android market grant a third party application access to private or sensitive information that an attacker could use for malicious purposes such as identity theft, mobile banking fraud and corporate espionage, according to SMobile Systems.

About five percent of applications have the ability to place a call to any number, without requiring user intervention. Dozens of applications have the identical type of access to sensitive information as known spyware, while two percent of market submissions can allow an application to send unknown premium SMS messages without user intervention, SMobile Systems says, after analyzing more than 48,000 Android apps.

Nearly 10,000 Android applications give third party apps access to private or sensitive information, in total.

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26% of iPhones Break Within 2 Years

About 25.6 percent of iPhone owners experienced a failure in the first two years of use, according to warranty data from SquareTrade. If you have teens or college-age children, you might say the failure rate is higher than that.

The typical but it’s actually below the industry’s average, according to SquareTrade. The expected failure rate over a two-year period was 33 percent one year ago, when SquareTrade only examined the iPhone and the iPhone 3G.

Most of the failures (18.1 percent) result from accidental damage, while only 7.5 percent are a result of a hardware malfunction. Touchscreens are most likely to fail, followed by power supplies.

26% of iPhones Break Within 2 Years [REPORT]

How Much Speed is Enough?

Lots of people think 100-Mbps or 1-Gbps access services are the wave of the future. One facetiously wonders whether they might always be. Mostly everybody likely agrees that bandwidth requirements are growing, and that "more" bandwidth is a good thing. The problem is that it is hard to answer the question of "how much is enough?"

StarHub, for example, already offers a commercial 100-Mbps service, and sells the "MaxOnline Ultimate" service for $62.40 a month, in Singapore.

Only five percent of customers have bought it, says Neil Montefiore, StarHub CEO. "I'm unconvinced about consumer demand for 100 Mbps."

U.S. access providers who already sell 50 Mbps or 100 Mbps connections seem to have had the same results. When it is available, relatively few customers choose to buy services running at such speeds.

"No one is quite sure what people will do with 100-Mbps symmetrical," he said. "Do people really need that speed?" The other issue is whether raw bandwidth of very-high capacity is sufficient, rather than merely necessary, to ensure creation of compelling and useful applications and services. In other words, higher bandwidth is needed as a prerequisite for valuable new apps. But it isn't so clear that where 50 Mbps or 100 Mbps access is available, that much of anything noteworthy has developed, beyond what could be done at 10 Mbps or 20 Mbps, for example.

The other question is how much demand there is for very-high-speed services, even when prices are reasonable.  If customers can buy 100 Mbps for about $63 (U.S. currency), but they can buy 50 Mbps for $50, is the issue the extra bandwidth or the value-price assessment which leads people to conclude that high bandwidth, but not super-high, is a better deal, and sufficient to accomodate their needs.

Consumers can buy 16-Mbps service for about $37 a month, as well, or cheaper 3 Mbps or 6 Mbps services.


German cable network operator Kabel BW claims that around 40,000 customers are using broadband with speeds of 50 Mbps or 100 Mbps. About three million homes are able to buy service at those rates. So buyers represent about one percent of customers.

Also, the price for the 50-Mbps access service is about $41 a month. What is not clear is what percentage of those buyers actually are businesses, rather than consumers.

It is a laudable thing to call for 100 Mbps service, available to most U.S. users, by 2020. What is missing at this point is evidence of robust-enough demand for speeds of 50 Mbps, at $100 a month.

Kabel BW has found only about one percent take rates, at prices of $41 a month. Obviously, no investor in his or her right mind would loan money to a service provider to offer 50 Mbps service at the same prices as users presently pay.


A new survey by Leichtman Research Group finds that 71 percent of U.S. broadband Internet subscribers are very satisfied with their current Internet service at home (rating satisfaction 8-10 on a 10-point scale), while just three percent are not satisfied (rating satisfaction 1-3).

To be fair, with broadband, appetite changes over time. But the issue is how to match actual demand, at market prices, to the amount of bandwidth that should be delivered.

While 77 percent of broadband subscribers do not know the download speed of their Internet service at home, they are generally pleased with the speed of their Internet connection. Overall, 66 percent of broadband subscribers rate the speed of their connection 8 to 10 and six percent rate it 1 to 3.

The findings are based on a telephone survey of 1,600 randomly selected households from throughout the United States. The survey also found that more than 70 percent of respondents said they subscribed to a broadband service.

Some 26 percent of broadband subscribers are very interested in receiving faster Internet access at home than they currently receive (rating interest 8-10 on a 10-point scale), while 44 percent are not very interested (rating interest 1-3).

Of all Internet subscribers, three percent of respondents say that broadband is not available in their area. In rural areas eight percent of online households say that broadband is not available in their area.

Overall, 1.4 percent of all households are interested in getting broadband, but say that it is not available in their area. Less than one percent of all households are interested in getting broadband, but cite cost as a reason for not currently subscribing to broadband.

Nobody can tell "how much bandwidth is enough." For the moment, though, the evidence here seems to suggest that there is not huge pent-up demand for dramatically-faster speeds. So far, the evidence from markets such as Singapore and other U.S. areas where either 50 Mbps or 100 Mbps is available for purchase, does not support the thesis that dramatically-higher speed is a huge need, at the moment, at least at prices far lower than they presently are.

Everyone expects demand for bandwidth to keep expanding. What seems less clear is the pace of that growth.