Study Finds Broadband Stimulus Funds Were "Wasted"

A new economic analysis of federal government broadband stimulus projects awarded by the Department of Agriculture’s Rural Utilities Service concludes that the program’s funding of duplicative broadband networks has resulted in an extremely high cost to reach a small number of unserved households.

The study shows that the RUS’ history of funding duplicative service has continued under its Broadband Initiatives Program and that the current program is not a cost-effective means of achieving universal broadband availability. 

The study examined three large BIP subsidy awards which total $231.7 million, or about seven percent of the total BIP $3.5 billion combined loan and grant program:

• $101.2 million in western Kansas
• $66.4 million for Lake and St. Louis counties in northeastern Minnesota 
• $64.1 million to cover a portion of Gallatin County in southwest Montana. 

The study was commissioned by the National Cable Telecommunications Association and prepared by Jeffrey Eisenach and Kevin Caves of Navigant Economics of Washington, D.C.

The American Recovery and Reinvestment Act (ARRA) included $7.2 billion to subsidize broadband deployment – $4.7 billion to the National Telecommunications and Information Administration (NTIA) and $2.5 billion to RUS. The NTIA and RUS programs funded by ARRA make up the largest federal subsidies ever provided for broadband construction in the U.S.

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Motorola, Verizon Top Harris Poll Survey

Verizon is the "Mobile Networks Brand of the Year" among consumers surveyed by the Harris Poll EquiTrend study. In the Mobile Networks category, Verizon is highest ranked for the second-year running over archrival AT&T.

Motorola led the "Mobile Phones" category, followed by HTC and Sony Ericsson. Nokia is fourth and Apple, ranked just above industry average, is fifth. Those results might surprise many, but the Harris Poll includes both smart and feature phones. Apple does not sell a feature phone.

Lead Mobile Categories

6 Ways Telcos Can Grow

There are six fundamental ways incumbent telcos can attain significant revenue growth, on the way to becoming "Telco 2.0" organizations, according to a new report by STL Partners. Some of the strategies are process oriented, and aim to enhance what service providers already are doing. That might include such things as better marketing, better use of sales channels or core product enhancements.

Other strategies require a bit more, or substantially different profiles. Among the more far-reaching, one might argue, is the strategy of becoming an over-the-top application provider. That move essentially breaks the "territorial" model by severing the tight connection between access services and applications. Whether this ultimately will prove more strategic for fixed line providers or mobile providers might be debatable, in some markets.

Where widespread and easy access to incumbent facilities is possible, "footprint" extension for a facilities-based strategy is easier. In other markets, where wholesale is more expensive and harder to negotiate, facilities-based approaches using wholesale access might be more difficult. Most European markets are examples of the former, the U.S. market an example of the latter.

But most of the six major strategies will make sense as logical extensions of what service providers already do, with significant new emphasis. Providing more targeted solutions to business customers in some verticals, as well as providing other infrastructure-type services such as data center or hosting services, will not be foreign suggestions for most service provider executives.

Likewise, the suggestion that service providers can generate revenue by exposing network features to third parties will resonate.

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Payfone Gets $19M, Alliance with American Express

Payfone has gotten $19 million in a new funding round, led by American Express with additional investment from Verizon Investments, Rogers Ventures and existing investors Opus Capital, BlackBerry Partners Fund and RRE Ventures.

Payfone says it will use the new funds to continue innovations in its market approach and to support its global expansion across North America, EMEA, Latin America and Asia.

"The payments industry is going through a fundamental transformation, with the move to digital payments becoming the primary driver," said Dan Schulman, Group President, Enterprise Growth, American Expres

American Express and Payfone are getting together to create and power a new global mobile checkout service. Payfone will combine its mobile authorization and payment services with American Express' digital payments platform, Serve.

Payfone Gets $19M, Alliance with American Express | Wireless Week

What is 'Better Broadband' and Who Should Pay for It?

People will disagree about what "better broadband" might mean, but it probably remains the case that "more" is better. There still seems to be huge disagreement about how to fund 'much better' broadband, though. Better broadband. 'What does the customer want to do?' asked Jack Weixel, who heads up Google's service provider markets (enterprise) efforts. Better broadband means that users are able to do the things they want to do, he said. 'At the end of the day, speed does matter,' said Weixel.

Raymond Henagen, CEO, Rock Port Telephone, had another practical perspective on faster broadband: 'who is going to pay as users keep demanding more capacity?"

Former Federal Communications Commission Chairman Kevin Martin noted that "speed matters," where it comes to broadband. Specifically, faster broadband leads to applications innovation. Developers always create applications that take advantage of faster broadband, and people seem to learn to rely on those apps.

That basically is why Google is building a symmetrical 1-Gbps fiber network in Kansas City, Kansas. Google wants to see what will happen once that level of broadband is available to developers and users.

What is 'Better Broadband' and Who Should Pay for It?

Mobile Operators in Western Europe See Earnings Erosion, Opex Increases in 4Q 2010

Mobile operators in Western Europe recorded further revenue losses and earnings (earnings before interest, taxes, depreciation and amortization) erosion in the fourth quarter of 2010, according to new research from Strategy Analytics. Gains those operators had made in operating expenditures in the first half of 2010 were reversed by year-end.

Looking at financial data from 200 mobile operators serving over 77 percent of global subscribers, Strategy Analytics found found that mobile service revenues fell by 1.3 percent in the fourth quarter of 2010 in Western Europe. Meanwhile, mobile operators worldwide saw revenue grew by 6.1 percent.

“This weak performance is less about the after-shocks of the global recession and more about the changing data-centric market environment," Strategy Analytics says.

Subsidies associated with smartphone sales and upgrades, and the relentless growth in data traffic from these devices, reversed the long-term trend of falling operating expenses per subscriber,” said Phil Kendall, Director, Wireless Operator Strategies. “For example, the average cost to retain a customer has increased for T-Mobile in several countries: Germany (26 percent), Austria (57 percent) and the Netherlands (12 percent). Orange customer retention costs have increased in France (11 percent) and Spain (14 percent)."

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Steve Jobs Hid iPad From Google

Steven Levy’s book “In the Plex” apparently reveals that Steve Jobs hid development of the iPad from Eric Schmidt while Schmidt was still on Apple’s board of directors.

Jobs reportedly didn’t like how Google’s OS was starting to match up blow for blow to iOS and didn’t want the same to happen with tablets. Jobs was angry because he felt that Android was ripping off the key features of the iPhone.

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