Video Behavior Changes After FTTH

This will not come as any great surprise, but the three top applications customers use when they get fiber to the home service are watching full-length video, online gaming and video on demand. If one looks at the top four activities, video represents three of four applications. Of the top seven apps, five are video apps. So suggests a survey conducted by the Fiber to the Home Council.

Voice Continues Wireless Shift

Wireless access "lines" not only outnumber wired lines by a three to one margin, wireless accounts now blow away wired lines in terms of growth, say researchers at the Organization for Economic Cooperation and Development. Which explains the attention now paid to seamless experiences in either the voice or Web realms. If so many people are going to spend so much time in mobile settings, then the things they might do on a PC or desktop phone have to be available on their mobile devices. Ideally, the context a user expects in a stationary or tethered experience also would be replicated in the mobile context as well. Price, while always a factor in a buying decision, is a matter of "hygiene."

If the price is wrong, no sale occurs. But price is not something that can make a user happy. Think of price as something that instead prevents a user from being "unhappy."

But even the right price makes a user "happy." The things that make users happy are on a different plane, entirely. Coolness, features, form factor, user interface and lots of other things people find they can do with a service and device are the essential parameters for driving "happiness." And the attempt to find "happiness" is what drives the purchase.

If you want people to buy something you make, you have to remember that "happiness" and "hygiene" are not on the same continuum. There are two different scales, and you have to be on the right side of each scale.

TeleBlend: More Steps to Ensure SunRocket Transition

In an effort to ensure it has the resources in place to manage a fairly sizable inflow of former SunRocket customers, should that occur, TeleBlend executives have signed an agreement with Sherwood Partners, the entity winding down SunRocket, for hardware and software assets that will make any customer transition seamless.

TeleBlend, a “preferred” provider for former SunRocket customers, is offering these customers a heavily discounted monthly subscription rate of $12.95 for the duration of their previous annual contract with SunRocket.

We won't know more until this afternoon, but it seems logical to assume the deal gives TeleBlend ensured access to in-service analog terminal adapters and the provisioning and operating systems used to keep them in service, at least through any transition period where customers are moved over the existing TeleBlend back office and network.

The agreeement does not seem to affect the earlier "preferred supplier" deals Sherwood struck with Packet8 and TeleBlend.

Verizon Bends on Net Neutrality

Lowell McAdam, chief executive of Verizon Wireless, says the company would agree to 700 MHz spectrum auction rules requiring the network operator who wins a portion of the spectrum to allow any device onto its network.

Such a nod to the wireless equivalent of "Carterfone" suggests Verizon now believes some such requirement will be part of license rules for the 700 MHz frequencies. The compromise won't go far enough to satisfy contestants who think a mandatory wholesale regime is needed.

But the move would for the first time allow users to buy and use virtually any device of their choosing on the network. As much as wireless carriers might like to preserve their ability to lock all devices used on their networks, device independence would be quite helpful for end users, application developers and device manufacturers, since it would allow some degree of innovation without the direct cooperation of the network services provider.

Verizon draws the line at guarantees that all games, video and the Web applications on the new phones or devices will work on anything other than a best effort basis, in essence, however. Verizon also said it would reserve the right to continue blocking certain applications and features for phones it sells, if it were to operate networks under such rules.

at&t earlier had signaled that it wasn't going to stand in the way of such rules. Some people might not think half a loaf is worth having. But Carterphone was a very important advance, as this also would be. Verizon arguably would not be shifting its stance were it not convinced the move is inevitable in any case.

SunRocket, Vonage Not the Whole Story

As much as people think VoIP providers (other than cable) have got traction problems in the U.S. market, that is far from the case elsewhere. In western Europe, for example, independent VoIP providers are not only the market share leaders, but their share of market might actually be increasing, even though major incumbent telcos are actively in the market as well.

And where U.S. cable providers including Comcast, Cox, Time Warner and Cablevision are the new driving force for VoIP-driven POTS replacement, that is hardly the case in western Europe, where cable operators still have relatively slight market share.

Still, there is no denying the traction problem. According to analysts at TeleGeography, VoIP growth already has hit a plateau in the U.S. market. In western Europe growth rates not only have accelerated but might not hit a peak until 2008, says TeleGeography.

Hence the interest in VoIP 2.0, the integration of voice services with Web and enterprise applications, portals, email, documents, gaming and other end user experiences.

EarthLink, Helio, Muni WiFi

Given that Earthlink essentially admits it now is more than a bit unfocused, and that something has to be done about it, it is pretty easy to predict that Helio and the municipal WiFi initiatives have to go. Earthlink will keep dial-up as a cash cow. It does just fine in the Digital Subscriber Line business and VoIP is not bleeding either. That pretty much leaves losses at Helio, which doesn't appear poised to make major subscriber gains any time soon, or the municipal WiFi business, which is in roughly the same position.

And one has to assume Earthlink will ultimately be set up for a sale. In such scenarios, long-term investments that drain cash are a no-no.

Something has to go. EarthLink now expects a loss of $110 million to $140 million for the year on revenue of $1.23 billion to $1.24 billion. Back out municipal WiFi and Helio losses and that problem takes care of itself.

Earthlink had a second-quarter loss, due to mounting losses at its Helio wireless joint venture and lower revenue from dial-up services. Earthlink says its Helio cellphone business exceeded the 100,000 subscriber milestone in the quarter, but the unit's losses mounted. Helio, a joint venture with South Koreas' SK Telecom, posted a loss of $83.8 million on revenue of $33.2 million.

Earthlink had a loss of $16.3 million, or 13 cents a share, compared with a profit of $16.6 million, or 12 cents, a year earlier. Earthlink said revenue for the quarter fell 6% to $312.2 million from $332.1 million a year ago.

Sure, there were continued losses in the dial-up area, but that's expected. At the end of June, the company had 4.3 million dial-up and broadband subscribers, down from 5.3 million a year ago.

Earthlink is a profitable Internet access company if the wireless and muni WiFi iniatives are abandoned. If you assume the assets are positioned for ultimate sale, that's a clean story.

BroadSoft Aastra: Man Bites Dog

Aastra Intecom, a provider of PBX-BASED enterprise communications and contact center solutions for large enterprises, now has a strategic alliance with BroadSoft. Aastra, which supports hundreds of thousands of enterprise voice systems, will use BroadSoft’s carrier-grade BroadWorks VoIP platform as the foundation for new next-generation IP-PBX solutions it will deliver directly to large enterprises.

So here's the "man bites dog" angle: in the past, enterprise suppliers have offered a richer menu of features than a large enterprise could buy from a communications service provider. To my knowledge, this is the first time a major PBX supplier has turned to a carrier platform to enrich its enterprise offering.