Amazon Fire Phone is About the Future of Mobile Commerce, Not Phones

It can be argued that Amazon's Fire Phone has not gotten off to a big start, in terms of sales. And it isn't hard to find detractors who think the device is too late to market. 



But it also can be argued Amazon is testing something more than "one more smartphone." To be sure, it might be an expensive, but important test. But what sort of test?



As Google's efforts center on supporting its advertising business on mobiles, so some might argue the Fire Phone is about Amazon's e-commerce business.



Some argue the issue is whether a smartphone can in significant ways replace the traditional PC-based e-commerce site.



What if, instead of going to an online store to buy something, the phone becomes the store? Taking a picture of an object, or scanning its barcode, or saying its name then pulls up an Amazon "click to order" screen. 



If so, Firefly is an effort to turn the entire physical world--anything that can be photographed, for example--into a buying opportunity for a consumer, using Amazon.



Kindle hasn't managed to become the world's top tablet device, either. But Kindle users almost certainly spend more money with Amazon that owners of other brands of tablets. 



The Fire Phone most likely is seen as a gamble on similar behavior on smartphones. If you have used a Kindle, you might agree it is less useful as a general purpose device, but excels as a gateway to content sold by Amazon. 



Likewise, the Fire Phone might not so much be viewed as a general purpose smartphone but more like a Kindle, a device optimized for Amazon e-commerce.



That might limit its appeal as a general purpose phone. But the Fire Phone might be useful for some users who actively engage in mobile commerce. 

Are ISPs Responsible for Video Stalling?

Google's YouTube now is offering consumers reports about video streaming performance, as Netflix likewise displays messages that video stalling at the moment is caused by the Internet service provider.

To be sure, Internet service providers directly control contention ratios, capacity investments, network architectures and other network elements that enable and limit both bandwidth and latency.

On the other hand, other users also are, in a direct sense, the cause of congestion, as always is the case on shared networks.

And some apps impose more load on any network, video being the primary and common example, representing an order of magnitude or two orders of magnitude more bandwidth loading than other apps such as voice.

Compounding the problem, most streamed video entertainment is a zero-revenue driver of consumption, as are most apps, for the ISP. That is not to say apps should be sources of direct revenue for ISPs, but only to note that the business context for supplying more network resources is affected by that lack of revenue.

Any ISP will have a direct incentive to invest in additional capacity to support revenue-generating apps and services, and incentive to provide whatever level of network support is required to ensure good app performance.

Consumer Internet access is more problematic. On one hand, consumers expect affordable prices and virtually unlimited usage. On the other hand, suppliers have to balance expectations with a business case for more investment.

In other words, no ISP can afford, over the long term, to invest more in facilities and support than the customer is willing to spend to use the product, unless there are compensating revenue streams that can be used to augment the business case.

Voice services, texting, revenue-producing video entertainment or ancillary services are examples.

And there is no question but that widespread use of entertainment apps and services has dramatically different revenue implications for ISPs, compared to other apps.

How much bandwidth is required to earn those $43 revenue components? Almost too little to measure in the case of voice; gigabytes for Internet content consumption and possibly scores of gigabytes for video.

By some estimates, where voice might earn 35 cents per megabyte, revenue per Internet app might generate a few cents per megabyte. At one level, a network engineer might argue that such fine distinctions do not matter. The network has to be sized to handle the expected load.

McKinsey analysts have argued in the past that a 3G network costs about one U.S. cent per megabyte. The problem, in many developing markets, is that revenue could drop to as little as 0.2 cents to 0.4 cents per megabyte, for any mobile Internet usage.

That implies a strategic need to reduce mobile Internet costs to as little as 0.1 cent per megabyte, or an order of magnitude. Tellabs similarly has warned about revenues per bit dipping below cost per megabyte, leading to an "end of profit" for the mobile business.

The point is that ISP investment in higher-capacity networks does affect app quality. But so do prevailing business models, app bandwidth requirements, end user demand for video content and contention from other users.

Video at standard definition is one issue. High definition requires even more bandwidth. And "4K" video, requiring bandwidth four times that of HDTV, is coming. Few networks can be upgraded fast enough to cope with those sorts of capacity demands, to say nothing of changing business models to support continual capacity upgrades.

Yes, ISPs control their own investment levels. But they are not singularly responsible for quality of experience in the whole content ecosystem. Consumers, app providers, app technology requirements, display devices and communication networks and revenue relationships all play some part, even if it is the ISP that controls access bandwidth.

Major Changes Coming for Mexico Telecommunications

Mexico is moving towards the biggest overhaul of the telecommunications sector in more than two decades, as legislation has passed the Senate authorizing a number of changes to increase competition in the mobile and fixed communications markets, as well as television broadcasting.

The new rules will mandate lower termination charges for competitors completing calls to Telmex customers. 

But the legislation also eases restrictions in investment by non-Mexican firms, and is expected to allow new TV networks to be created. 

Telefonica is expected to be among the firms that takes advantage of the regulatory changes to expand its market share in the Mexican market. 

On the other hand, observers also expect that  América Móvil, owner of Telmex, will make a move into the broadcast television as well. 

The legislation also does allow Internet service providers to provide quality of service mechanisms for their access services. 

In other words, "best effort" access can be supplemented by access with quality of service features such as provided by content delivery networks in the wide area network. 

5G Might be Powerful, but Also Will be Fragile

Future 5G networks are expected to feature much-faster speeds. Compared to fixed network access, though, there still will be issues. Total mobile bandwidth will never approach what is possible using a fiber connection, and interference will remain an issue for wireless approaches.

Government Content Blocking, Commercial Pressures Are Internet Dangers

Government blocking and filtering of content poses a big danger to the future Internet, but so does growing commercialization of Internet apps a survey of 1,400 experts by the Pew Research Center's Internet & American Life Project has found.

Less content access is a possible or likely consequence of government action, but a growing commercial context also will shape the unrestricted flow of information, the experts say.

But growing lack of trust also will reduce end user willingness to share using the Internet. And  "too much information" might likewise reduce end user desire to share content and information, as use of content filtering grows.

Despite those perceived threats, many respondents expressed optimism that the problems can, and will, be addressed.

In fact, a majority of respondents say they hope that by 2025 there will not be significant changes for the worse and hindrances to the ways in which people get and share content online today. 



And they said they expect that technology innovation will continue to afford more new opportunities for people to connect.

In fact, a majority of respondents he majority of respondents  say they hope that by 2025 there will not be significant changes for the worse and hindrances to the ways in which people get and share content online today. And they said they expect that technology innovation will continue to afford more new opportunities for people to connect.

By 2025, about 35 percent of respondents thought there would be significant hindrances to the free exchange of information, while 65 percent predicted the obstacles would be overcome, and that the free exchange of information would not be significantly dampened.

To be sure, some who are optimistic said they “hoped” that would be the case, not necessarily that they expected such an outcome.

Those who expressed hope or the expectation that access and sharing would survive challenges between now and 2025 also often noted that billions more people may gain access and begin sharing online over the next 11 years, allowing content sharing to survive the challenges.

Digital Divide Now is More Subtle

There is no digital divide on inter-city trains, inter-city buses or airplanes, a study of use of personal devices on buses, trains and airplanes suggests.

Internet access remains an issue in rural and lower-income areas, compared to suburban and mid-income urban areas, to be sure, but the issues now are more subtle, having as much to do with people not seeing Internet access as useful as actual physical lack of access.

To be sure, use of fixed high speed access services is lower among households with less income. Access is 70 percent amongst households with $10,000 or less annual income, in the 85-percent range for households with income between $20,000 and $40,000, and above 90 percent for households in higher income ranges.

But age explains non-use of the Internet as much as income. Also, mobile Internet access is substantial among lower-income households, ranging from 50 percent to 60 percent among lower-income groups.

In fact, many younger users use mobile Internet access, rather than fixed network access. In other words, much of the digital divide that remains in U.S. Internet access is explained by age or use of mobile access.

Access speeds in rural areas continue to lag offered speeds in urban and suburban areas, as a rule, though the gap is closing, as cable TV high speed access services tend to be much faster than all-copper digital subscriber line connections. That is true even in India.

That is one good reason why AT&T, among others, is upgrading rural networks with fiber.

In fact, widespread use of connected personal devices on inter-city transportation services suggests the important role ownership of connected devices now plays.

On Greyhound inter-city buses, the use  of personal technology use is now significantly higher than on airplanes and is only marginally below that on Amtrak and discount bus lines, a study by the Chaddick Institute for Metropolitan Development has found.

In fact, for the first time in five years, use of personal devices on at least one  inter-city bus service was higher than on airplanes or Amtrak.

Among the 505 passengers observed on 20 Megabus and Van Galder buses operating from curbside locations in 2013, 59 percent were using technology, compared to 46 percent in 2012.

In large part, that might be because the amount of use of new “connected” bus services--which offer travelers uninterrupted cell phone signals as well as free Wi-Fi and power outlets--grew 30 percent between 2012 and 2013.

On Amtrak, the share of technology users was flat at 52 percent in 2013, the study found.

Availability of power outlets, Wi-Fi and mobile access likely explains the lighter use of personal devices on airplanes, according to the Technology in  Intercity Travel Study.

Technology use on airlines remained virtually flat and continues to lag behind other

modes in 2013, suggesting that lack of communications “for no incremental cost” is an issue.

But the ban on phone calls aboard aircraft, as well as the lack of power outlets, likely also are issues.

The two fastest growing modes of intercity travel over the calendar years 2012 and 2013—intercity trains and discount buses—were also those in which the technology use was observed to be the highest in early 2013.

The amount of discount bus service grew by four percent between 2012 and 2013, while the number of Amtrak seat-miles grew by 1.4 percent, as did airline seats.

Availability of Wi-Fi and mobile Internet connections, the “no incremental cost” access and lawfulness of device app use on trains and buses possibly explains the higher use of personal devices on buses and trains.

Mobile device connections are disabled in the air, on airplanes, in addition to being unlawful. When Wi-Fi is available, usage requires payment, and power outlets often also are not available.

But there seems to be no “digital divide” between passengers on inter-city buses, trains or airplanes.

The Chaddick Institute survey in 2014 consisted of 1,659 airline travelers, 1,608 intercity train (Amtrak) passengers, 505 discount city-to-city bus passengers (Megabus and Coach USA), 270 conventional intercity bus passengers, and 2,992 commuter rail passengers.

FTC Charges Un-Carrier with Un-Cool Cramming

It is hard to know what what is worse, T-Mobile US being charged by the Federal Trade Commission with cramming, or the abuse by third party information and content suppliers using third party billing.

Cramming is the practice of placing unauthorized, misleading or deceptive charges on a telephone bill.

Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.

Purportedly,  T-Mobile USA made hundreds of millions of dollars by charging customers for by “premium” text messaging services that never were authorized by its customers.

The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month.

According to the FTC’s complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.