FCC Wants New Tax for Connect America Fund

Perhaps it comes as no surprise that the U.S. Federal Communications Commission wants to create a new tax on broadband access services to support its Connect America Fund, essentially the replacement for the older Universal Service Fund.

Aside from the change of nomenclature, the emphasis has shifted from guaranteeing voice services in rural and isolated portions of the country to supplying broadband access services to such areas.

“What started as a program with important goals (making sure rural farmers can make phone calls and ensuring the poorest among us can dial 911) turned into an unaccountable corporate slush fund,” says S. Derek Turner, Free Press research director.

Today USF is an $8 billion annual program, nearly quadrupling in size since its inception, with the bulk of those revenues going to landline and wireless phone companies.

Maybe this massive growth would be no concern if USF were a model program with a sterling reputation for efficiency. “But it’s not,” says Turner.

One recent study found that 59 cents of every USF dollar raised for rural networks was spent on administrative expenses and general overhead. A 2010 audit of the rural USF program found that one out of every four dollars sent to participating phone companies was an “overpayment,” with nearly a billion dollars unaccounted for.

So some would argue that higher taxes are unwarranted.

Phones Will Remain the Signature "Mobile" Device Through 2015

Smart phones will be the signature mobile device globally over the next five years, says Leif-Olof Wallin, a research vice president at tech analysis company Gartner. And Gartner thinks Microsoft will be the big winner, representing 20 percent of the market in 2015. 





While the global mobile market as a whole is shrinking, smartphone adoption will continue to explode.

Mobile U.K. Shoppers Still Prefer to Buy Using a PC

U.K. Internet users are comfortable using mobile devices for researching and browsing products, but they still prefer to turn to a PC when it’s time to buy, a study by Kenshoo and publishing and events company Figaro Digital indicates. 

That study mirrors in key ways the findings of a Google study that suggests as many of 90 percent of people use multiple devices when shopping, for example.



The preference for purchasing using a bigger-screen PC is pronounced when looking even at research activities such as clicking on paid search ads. 

Some 11 percent of all paid search clicks in the United Kingdom in the first quarter of 2012 came from mobile devices (not including tablets), the Kenshoo study suggests. Another 5.8 percent of paid search clicks came from tablets. 

Computers accounted for the lion’s share, at 82.8 percent, according to U eMarketer. 

But actual transactions are more likely to be conducted on a PC. More than nine in 10 said they preferred to buy using a PC, compared to three percent who would rather to do so on a smartphone and two percent on a tablet.

Why it is Difficult to Understand Mobile Payments

Some markets are hard to understand because the concepts are new or because a particular market is intertwined with other markets that also are changing. You might argue that unified communications has been that sort of market. 

But it also appears that mobile payments is that sort of business as well. At some basic level, the value proposition is unclear. Paying using a mobile device instead of cash or a debit or credit card doesn't always have immediate resonance as something that is 10 times better than existing methods of paying for retail purchases.

But part of the uncertainty is probably because retailing is changing. "Mobile commerce" is starting to show signs of merging with the broader "e-commerce" business, which in turn is starting to show signs of merging in a bigger way with physical retailing. 

In other words, m-commerce is merely another form of e-business or e-commerce. Mobile payment is part of the broader m-commerce business. So it might ultimately be the case that the specific value of "mobile payments" is clear only when the other parts of mobile commerce also are clear. 

But there is movement. Look back a decade. What was mobile commerce, really? Ringtones, initially, then downloaded songs and wallpaper. 

But mobile commerce now is viewed as something else, namely a way to use user location and analytic data, often in real time, to enable retail sales, also often in near real time. In some ways, that builds off of e-commerce, using new devices such as smart phones and tablets. 

In other ways, mobile commerce is both an extension of e-commerce and a bridge between physical and virtual retailing. If mobile payments doesn't make absolutely blinding sense, it might be because, right now, the value isn't so great. 

The value should become clearer as the broader mobile commerce trends, and the melding of physical and virtual retailing become clear as well. 

Illiad's "Free" Business is Hammering Rivals

Illiad's "Free" mobile service was intended to disrupt the French mobile market, and it seems, at least for the moment, that Illiad is succeeding. 

French conglomerate Bouygues posted sharply lower first-half profits for its second quarter of 2012, largely because of price competition from Free, which has caused the other leading mobile firms in France to cut prices. 

Bouygues also cut its annual profit forecast for its telecoms division unit by roughly 12 percent as a result of the expected competition, Reuters reports. 

Martin Bouygues, Bouygues chief executive, directly blamed Free Mobile for his company's woes.
"The difficulties we are experiencing are due to competition and the low prices charged by Free,"  the Bouygues CEO said. 

France Telecom, using the brand name "Orange," warned that it expects average revenue per user to fall by 10 percent at its domestic mobile unit Orange France in 2012, as operators engage in a price war following the entry of new low-cost operator, Iliad Group’s Free Mobile, in January. 

2.4 Billion Enterprise Smart Phone Subscribers in 2017

ABI Research estimates that by 2017, 2.4 billion employees globally will be using smart phones, growing about 17 percent a year and representing nearly three times more smart phones than used in 2012. 

Many hundreds of millions of those devices will be brought to work by people who want to use their own personal devices. So mobility suppliers and enterprises need to think in terms of serving all those employees with tools, apps, and services, even if not using company-issued devices, ABI Research says. 

Android has the dominant leadership position among the global workforce expected to grow to 56 percent by 2017. 

90% of Content Operations Move Between Devices

Metaswitch Networks thinks a key to providing more value for communications service providers is to enable sessions using multimedia to be maintained as users move between networks, devices and locations.

“Immersive multimedia telephony” (“Accession”) enables a user to move a conversation or session freely between preferred devices, and to take advantage of local network connectivity or handset capabilities, while instantly sharing content that is related to the users' actions, surroundings or needs, Metaswitch says.

A new study by Google suggests people behave that way when consuming content or conducting search operations as well, so Accession might well be something important.

“The New Multi-screen World: Understanding Cross-Platform Consumer Behavior” study found that 90 percent of people move between devices to accomplish a goal, whether that’s on smart phones, PCs, tablets or TV.

Of the 90 percent of media consumed on a screen of any type, browsing, shopping, trip planning and financial operations make sequential use of mutliple screens, much as Metaswitch enables a user to maintain a voice session initiated on a business phone, transitioned to mobile, and then finished on a home phone.

There are two primary ways people exhibit multi-screen behaviors, the study suggests. Sequential screening is when people move from one device to another to complete a single goal. Simultaneous screening occurs when people use multiple devices at the same time.

The study found that nine out of ten people use multiple screens sequentially and that smart phones are by far the most common starting point for sequential activity.

So completing a task like booking a flight online or managing personal finances doesn’t just happen in one sitting on one device. In fact, 98 percent of sequential screeners move between devices in the same day to complete a task.  

With simultaneous usage, the study found that 77 percent of viewers watching TV with another device in hand. In many cases people search on their devices, inspired by what they see on TV, the report suggests.

Sequential screeners will start interacting with an application on one device and then pick up where they left off on another, so making experiences seamless between devices is key, the study suggests.

Additionally, cross-media campaigns can help brands make the most of consumers’ simultaneous usage across screens. The study also found that when people use screens sequentially to complete an activity, they often use search to pick up where they left off.

So not only is it important for companies to allow customers to save their progress between devices, they should also use tactics like keyword parity to ensure that they can be found easily using search when that customer moves to the next device, the study suggests.

The study found that people often turn to nearby devices to complete spur-of-the-moment activity. In fact, 80 percent of the searches that happen on smart phones are spur-of-the-moment, and 44 percent of these spontaneous searches are goal-oriented, the study says.

Accession mirrors the growing trend of multiple devices being used to accomplish one goal, a trend the Google study also tends to confirm.