Data Tsunami Could Wipe Out All Telco Profits

Telecom service provider “costs per gigabyte must decrease by 90 percent every three to four years” just to keep service provider revenues and costs in the same relationship as they are now, according to Norman Fekrat, IBM Global Business Services partner and VP. That illustrates the magnitude of changes many believe must be made in the global telecom business.

And the bad news, says Fekrat, is that, at the moment, service provider costs are “increasing when it needs to decrease.”

“The cost structures need to be reduced significantly,” not incrementally, he says.

Whether DirecTV or Viacom Can "Win" in the Long Term is the Real Issue

You can take your pick about which partner--DirecTV or Viacom--has more leverage in the programming dispute that has taken all the Viacom channels off DirecTV, at least temporarily.

Some might argue it is a mistake for DirecTV to risk consumer irritation when some popular channels “go dark,” the theory being that it is the programming people pay for, so one distributor risks losing customers, eventually, should a major network such as Viacom be dropped on a permanent basis.

Some might argue that no matter the outcome, the whole video ecosystem is becoming unworkable. That, at least, was what Robert Johnson, founder of the BET cable channel, recently warned.

EC Makes Major Regulatory Shift

In a significant “u turn,” telecom commissioner Neelie Kroes seemingly has backed off a plan to increase the discounts offered to third parties who buy wholesale access from incumbent European Union service providers.

That is at least mildly surprising for a few reasons. At least historically, European Commission countries have favored robust wholesale leasing policies, at least in part because, unlike the situation in North America, where two facilities-based broadband access networks exist in most markets, it was expected that only the incumbent network would be widely available.

In order to reach the EU's Digital Agenda goal of at least half of EU residents able to access broadband at 100Mbps or more by 2020, the EC has been looking at how the regulatory environment can support and stimulate investment in next-generation networks.

Global Telecom Industry Has Made a Historic Leap in Serving People in Developing Regions

A high-level study sponsored by Alcatel-Lucent and conducted by the ENPC (Ecole des Ponts ParisTech) illustrates an important and historic change in global communications, especially the decades-long effort to figure out how to provide communications to billions of human beings who had not previously “made a phone call,” much less “used the Internet.”

In recent years, the concern has shifted dramatically to mobile service for the “next billion” people, or Internet for the next billion people, where in the 1960s and 1970s the issue was providing “phone service” to the “next billion” users in developing countries.

What has gone somewhat unnoticed is the truly stunning progress, globally, in getting communications services to users in developing regions, where once policy makers struggled to anticipate how that could be done with legacy technology, namely fixed networks.

Without too much fanfare, the answers have emerged organically from use of mobile and Internet technologies.

After 20 Years, Is it Time to Revisit Cable TV Regulation?

The Cable_Communications_Act_of_1984 was a milestone for the U.S. cable industry, ushering in a more-deregulated environment about the time that satellite delivery was about to transform the business from a "signal importation" business to an "add voice" business.

The subsequent Cable Act of 1992, on the other hand, represented a re-regulation of the industry in many respects, including pricing for the "basic" tier of service. Not surprisingly, the industry mainstay became the "expanded basic" tier.

But it has been two decades since that last major change in regulation of cable TV, and the industry has vastly changed since 1992. So the fact that the Senate Commerce Committee is holding new hearings on the 1992 Cable Act suggests a possible change could be coming.

"Re-transmission consent" will be one of the key issues on the table, according to Multichannel News. In part, that might be something of a response to the wider question of programming costs overall, as well as business relationships between distributors and content owners.

"We can't look to the future of video without evaluating the Cable Act's impact on the modern television marketplace and whether the legislation has achieved Congress' goals," said Chairman Jay Rockefeller (D-W.Va.)

In many ways, the Cable Act of 1992 represented the most-recent oscillation in cable TV policy, which has swung between periods of greater regulation and periods of less regulation. Based only on history, one might suggest that since the 1992 policy swing was back towards "more regulation," the next swing could be expected to be in the direction of "less regulation."

That would likely be unwelcome for TV broadcasters, among others. But it is not unusual for hearings to be held, with little substantive policy or statute changes. On the other hand, it has been long enough since that last adjustment that some change should be expected, eventually.

The difference between a cable company and a telco long ago ceased to be significant in any way except the ways those industries are regulated, for example. And network-delivered entertainment video is a business that arguably faces growing threats from outside and greater tensions inside the ecosystem.

Normally that means attackers and defenders alike will increase their agitation for "changes" in regulatory schemes.

"Interactive TV" is Here, But Uses a Mobile

Video entertainment executives in the 1980s were touting the power of "interactive TV" as a new dimension of the TV experience. Not too much came of the effort. But as it turns out, "interactive TV" now has become mainstream, but using smart phones, and to some growing extent tablets, rather than the TV remote, a cable box or other appliance.

Half of all adult cell phone owners now incorporate their mobile devices into their television watching experiences, according to the Pew Research Center's Internet & American Life Project.



Such “connected viewers” used their cell phones for a wide range of activities during the 30 days preceding our April 2012 survey:

Some 38 percent of cell owners used their phone to keep themselves occupied during commercials or breaks in something they were watching. Another  23 percent used their phone to exchange text messages with someone else who was watching the same program in a different location.

About 22 percent used their phone to check whether something they heard on television was true, while  20 percent used their phone to visit a website that was mentioned on television.

Also, 11 percent used their phone to see what other people were saying online about a program they were watching and 11 percent posted their own comments online about a program they were watching using their mobile phone.

Taken together, 52 percent of all cell owners are “connected viewers," meaning they use their phones while watching television for at least one of these reasons.

So the "interactive TV" revolution finally has arrived. It's just that it turns out the mobile phone and tablet are the vehicles people are choosing to provide their own interactivity.

77% of Consumers Want a Smart Phone With 4.5-Inch or Larger Screens?

Consumers are demanding larger smartphone screen sizes. A recent survey suggests 77 percent of surveyed consumers prefer a device with a 4.5-inch or larger display, T-Mobile USA says.

That is one reason why T-Mobile USA is launching the Galaxy Note, which many refer to as a "tablet/smart phone."

With popular tablets now being sold in a seven-inch screen size, the 5.3-inch Galaxy Note screen puts the device somewhere in between a seven-inch tablet and a more-typical 3.5-inch smart phone screen.