Google, Boingo to Expand Ad-Supported Wi-Fi Test

Google and Boingo are building on their free Wi-Fi project in New York City, launching the advertising-paid access model in eight malls across the country.

Boingo and Google didn’t name the specific malls, saying only that at least four of them would be in San Francisco, Los Angeles, Tampa and Seattle. 

Google Offers will sponsor the service, meaning customers connecting to the hotspots with a smart phone, tablet or PC will encounter a welcome screen encouraging them to sign up for Google’s daily deal service. Regardless of whether customers sign up for the service or skip past the screen, they’ll get free, unrestricted access. 

In New York, Google and Boingo have offered the promotion in six subway stations and 200 hotzones throughout Manhattan on a trial basis until Sept. 7. The two firms also offer discounted Wi-Fi access in sixteen airports. 

Lots of entrepreneurs have tested the notion that Wi-Fi hotspot service can be supported by advertising. dSpot and AT&T are among them.  

Are There Really Any U.S. Households That Can’t Buy 12 Mbps Internet Access?

Some 19 million people in seven million U.S. households live where fixed broadband networks do not reach people with a minimum speed of 4 Mbps downstream, and 1 Mbps upstream , according to the U.S. Federal Communications Commission.

So it might seem silly to ask a serious question about whether there are any U.S. households that really “cannot” buy Internet access service operating at 12 Mbps, from at least two providers. The reason is that looking at fixed network access, while useful, does not actually exhaust the options already to potential buyers.

Exede, the satellite broadband service already offers 12 Mbps service. HughesNet, which has successfully launched a new satellite identical to the bird used by Exede, has not yet announced its retail packages, but will be able to offer similar speeds. Subject to business logic and some engineering constraints, HughesNet could offer faster services.

But most U.S. consumers also can buy mobile broadband services. The FCC report also notes that just 6.2 percent of people do not have access to mobile broadband services offering downstream speeds of at least 3 Mbps.

In other words, the percentage of people without access to speeds of 4 Mbps on a fixed network (about six percent, using the FCC calculation) is matched by six percent of people also unable to purchase a mobile broadband service operating at at least 3 Mbps.

Put in a positive way, some 94 percent of U.S. consumers have access to fixed or mobile broadband services of 3 Mbps to 4 Mbps, and in many cases, both, from multiple providers.

The FCC study also says that the percentage of people unable to buy either a fixed or mobile broadband access services of at least 3 Mbps is 1.7 percent. That represents about 5.5 million people, or about 2.2 million locations, using the 2.5 persons per household metric.

So in addition to the two U.S. broadband providers offering 12 Mbps services, one has to take into account mobile broadband, and some amount of fixed wireless, as well.

The FCC analysis implies some 5.9 percent of U.S. households are not reached by a fixed network, using 116 million U.S. households as the universe of places. Some might use a household base of 130 million, which would suggest five percent of U.S. housing is not reached by a fixed broadband network.

The point is that the same report also suggests that mght not be as big a problem as might seem to be the case. Keep in mind that the percentage of people or households not able to buy a 4 Mbps service does not mean they cannot presently buy a service that runs at lower speeds.

The report also suggests that in June 2011, some 9.6 Americans did not have service of at least 768 kbps downstream. Assuming a typical figure of 2.5 people per household, that would imply about four million U.S. households not able to get Internet access at speeds of at least 768 kbps, from a fixed network provider.

The FCC report also notes that 79 percent of telco-served locations nationally have access to service running at least as fast as 4 Mbps in the downstream direction, while 85 percent of cable-served high speed access locations have access running at a minimum speed of 4 Mbps in the downstream.

The point is that it is perhaps useful to note how well various contestants are doing, but less useful to argue that any one type of network is the benchmark for measuring the extent and quality of access.

Barnes & Nobles's Nook Sales Decline, Content Sales Increase

Sales of Barnes & Noble’s line of tablets and e-readers declined in the company’s fiscal 2013 first quarter ending July 28, 2012, the Barnes & Noble reported. But digital content sales increased 46 percent, generating enough revenue to offset lower device sales.

So you might say Barnes & Noble has the right strategy; it just needs to execute by selling more content players to support its media sales.

In earnings report, Barnes &  Noble broke out Nook sales in ways that obscure the dip in device sales and the growth of content sales. 

*Nook revenue is comprised of Nook devices, digital content and accessories.

Barnes & Nobles's Nook Sales Decline, Content Sales Increase

Sales of Barnes & Noble’s line of tablets and e-readers declined in the company’s fiscal 2013 first quarter ending July 28, 2012, the Barnes & Noble reported. But digital content sales increased 46 percent, generating enough revenue to offset lower device sales.

So you might say Barnes & Noble has the right strategy; it just needs to execute by selling more content players to support its media sales.

In earnings report, Barnes &  Noble broke out Nook sales in ways that obscure the dip in device sales and the growth of content sales. 

*Nook revenue is comprised of Nook devices, digital content and accessories.

Like Telcos, Cable Will Try to "Enhance Value" Rather than "Cut Price"

As telcos have tried to "add value" to their services rather than "cut prices," so too video entertainment subscription providers will try to emphasize "more value" as an alternative to "cutting prices." 

What remains to be seen is the success of such tactics, over time. At the moment, there doesn't seem to be much danger, though. 

Since people buy "content," and since most of the popular content is not easily available online or over the top on the Internet, video subscriptions still have drawing power. 

Monday Night Football is but one example of video content that remains exclusive to subscription services, The Hollywood Reporter reports. 

Adding online and mobile content access as a form of added value for video subscribers likely will remain a major tactic, even as some operators mull launching lower cost services in some way, and possibly will do, at some point.

In the past, telcos have had mixed success trying to "add value" rather than "cut prices." In fact, you might argue, even over the top messaging and voice services that do provide added value mostly are valued because they represent lower-cost alternatives to traditional voice and messaging services. 

But video is a different sort of product than "communications." The clearest example is the steady upward prices for video subscriptions every year, compared to declining nominal rates for communication services, or at least declining costs per unit. 

Ofcom allows Everything Everywhere to use existing spectrum for 4G

Ofcom has today approved an application by the mobile phone operator Everything Everywhere to use its existing 1800 MHz spectrum to deliver 4G services, a move similar to what Ofcom in 2011 allowed in the transition from 2G to 3G. 

Observers will note that the decision gives the largest U.K. mobile service provider a short window where it will be the only service provider to offer Long Term Evolution services in the United Kingdom, for a time. 

The United Kingdom is required to make the 900 MHz and 1800 MHz spectrum available for 4G use in light of a Decision of the European Commission, so the authorization is in line with the future 4G spectrum allocations. 

The move gives Everything Everywhere a bit of a headstart in 4G services, of course, compared to other competitors that will have to wait until 4G spectrum auctions are completed. 

Ofcom's decision means Everything Everywhere could, in principle, start offering Long Term Evolution services as early as Sept. 11, 2012, giving Everything Everywhere a market lead of perhaps a year or two over all the other providers of Long Term Evolution in the United Kingdom. 

It's an "Untethered" World

A new study conducted by Cisco of more than a thousand U.S. mobile users suggests that the amount of Wi-Fi usage each day is so prevalent that smart phone, tablet and e-reader device usage now is more “nomadic” than mobile; more untethered than mobile; less “on the move” than just “unplugged.”

What’s more, the Cisco survey also suggests 25 percent of users “see no difference” between the mobile and Wi-Fi networks. The implied 75 percent of users who do see differences perhaps is the measure of the importance of voice communications and quick Internet operations or use of social networks and other communications apps.

At some point, such trends could lead to some specialized revenue models within the broader mobile and untethered access business, focusing purely on “data connections,” not mobile voice, much as the Wi-Fi hotspot business has been a specialized “data access” service.

That could ultimately be more important in developing regions where full mobile access is relatively expensive and bandwidth constrained, and might well rely on use of unlicensed spectrum and well as “self organizing” network nodes of some sort.

A separate study conducted by Ipsos suggests the typical employed person, in a wide range of countries, is connected to the Internet nearly 10 hours a day, often by Wi-Fi, with mobile devices used inside the home about 2.5 hours a day, as well.

All consumers use their mobile devices at home, the Cisco  study found, averaging more than 2.5 hours of usage in a typical day, more than double the time that “mobile” devices are used “on the go,” which is about half an hour a day, the study also found.

A quarter of consumers surveyed by Cisco “see no difference” between the mobile and Wi-Fi networks. Consumers consider Wi-Fi easier to use and more reliable than mobile.

“We may be on the verge of a “New Mobile” paradigm, one in which Wi-Fi and mobile networks are seamlessly integrated and indistinguishable in the mobile user’s mind,” the Cisco study says.

Almost 60 percent of consumers were “somewhat” or “very” interested in a proposed offer that provides unlimited data across combined access networks for a flat monthly fee.

Separately, an Ipsos survey suggests people who work are connected to the Internet 9.8 hours a day, on average. That multi-country study surveyed users in in Argentina, Australia ,Belgium, Brazil, Canada, China, France, Germany, Great Britain, Hungary, India, Indonesia, Italy, Japan, Mexico, Poland, Russia, Saudi Arabia, South Africa ,South Korea, Spain, Sweden, Turkey, the United States and Hong Kong. The detailed tables are here.

The survey conducted by Cisco’s Internet Business Solutions Group (IBSG) suggests
mobile users are connecting their devices predominantly using Wi-Fi. In fact, most mobile users are connecting their devices using Wi-Fi at some point, including 70 percent of smart phone owners.

About 50 percent of tablets, laptops, and e-readers are connecting exclusively through Wi-Fi. Although 30 percent of smartphone owners are connected only using the mobile network, the remaining 70 percent are supplementing mobile connectivity with Wi-Fi, the Cisco study suggests.

In fact, on average, smartphone users use Wi-Fi a third of the time to connect their devices to the Internet.

With the exception of smart phones, users would prefer to connect all of their devices usingWi-Fi. More than 80 percent of tablet, laptop, and e-reader owners either prefer Wi-Fi to mobile access or have no preference.

Just over half of smartphone owners would prefer to use Wi-Fi, or are ambivalent about the two access networks.

If given a choice between access networks, mobile users choose Wi-Fi over mobile across all network attributes, with the obvious exception of coverage. That leads Cisco researchers to conclude that “we may be on the verge of a ‘New Mobile’ paradigm, one in which Wi-Fi and mobile networks are seamlessly integrated and indistinguishable in the mobile user’s mind.”


                                           Network Connectivity Type (by Time)

                                        Source: Cisco IBSG, 2012


The Cisco research shows that 75 percent of Americans now have laptop computers, while 52 percent of respondents own smartphones, versus 48 percent who use traditional mobile phones.

Also, some 20 percent of Americans now own some kind of tablet, and 20 percent own an eReader.

With the exception of smart phones, Wi-Fi now is the predominant access technology for mobile devices. More “nomadic” devices like laptops, tablets, and e-readers almost exclusively connect to the Internet through Wi-Fi, with only approximately 20 percent of these devices having any mobile connectivity capability.

                                            Device Network Connectivity (owned device)

                            Source: Cisco IBSG, 2012


Almost half of all mobile users regularly consume all forms of video, music, books, and games on their devices.

One of the insights is that while they may be called “mobile devices,” devices typically are used at home. All consumers use their mobile devices at home, averaging more than 2.5 hours of usage in a typical day, more than double the time that they spend using them at work.
While two thirds of people still use their devices on the go, the world of mobile devices is changing from a “mobile,” on-the-go world (average usage of 0.5 hours per typical day) to a “nomadic” world dominated by the home. And, people expect to increase their home use of mobile devices even more.

Cisco IBSG conducted its online study  of 1,079 U.S mobile users in March 2012. The study was also undertaken in Brazil, Canada, Mexico, and the United Kingdom.