Google Talks to Verizon and Sprint

Google is in advanced talks with Verizon Wireless to put its applications on Verizon phones, according to the Wall Street Journal. Google reportedly also is also talking to Sprint Nextel. The talks appear to center around carrier licensing of software and anoperating system that would power a Google-optimized mobile device.

Such devices are expected to cost less than similar handsets, as part of a "Google everywhere" strategy not built on handset sales or recurring service provider revenue streams.

NetZero Shuts Down VoIP Service

NetZero Voice, the VoIP-over dial-up service sold by NetZero, is being shut down by Dec. 15. Customers who want to migrate to the Packet8 service can do so for $19.95 a month.

Since 2005, NetZero had gotten only had about 12,000 subscribers, it appears. Former NetZero customers might be a mixed blessing for 8x8, though, which now focuses on VoIP services for small businesses. One has to believe most of the NetZero customers are consumers with a high value orientation, possibly similar in profile to the high-churning value customers EarthLink has to contend with.

So not only are the potential new customers outside the desired customer segment 8x8 is chasing, they probably are high churn customers as well. Time will tell.

New Qwest FTTN Plan

Though it might be said to be a baby step, Qwest Communications has decided to up capital spending by an incremental $200 million over the next two years to bring 20 Mbps service to 1.5 million customer dwellings. The fiber-to-node plan obviously will rely on Digital Subscriber Line of some sort for the drop, but Qwest did not specify which particular approach it has in mind. It could use ADSL2 or VDSL, of course.

Basically, the company, which normally spends between $70 million and $100 million on fiber-to-node access plant, is incrementally spending the extra $200 million to pick up the tempo.

In a bit of a twist, Qwest will not deliver linear entertainment video over the network, relying instead on its DirecTV satellite service for that. Instead, it really sees the FTTN upgrade as a data services play.

As is always the case, investors seem not to like the idea. They didn't like Verizon's FiOS plan or fiber-to-customer plans launched by independent providers in France, for example. Investors fear Comcast and other cable companies will wind up spending more money on upgrades of their own as well.

Qwest is doing the right thing. Bandwidth is the reason any terrestrial wireline network has for existing. Failure to invest in bandwidth means business death. Sure, investor expectations have to be managed. But were in up to the investors Qwest would pay out a dividend and condemn itself to ulimate bankruptcy.

The program is not nearly as sweeping as upgrade programs underway at Verizon and at&t. Qwest simply can't afford that. But neither can Qwest sit still and do nothing. Investors might finally be seeing the fruits of at&t and Verizon investments in broadband infrastructure. They will see the same at Qwest, as unpopular as the investments are.

Skypephone Launches

Hutchison Whampoa's mobile operator 3 has launched the Skypephone. The phone will be available on Friday in the U.K. market and also will launch in Australia, Austria, Denmark, Hong Kong, Italy, Macau and Sweden before Christmas, Hutchison Whampoa says.

3 will pay Skype royalties based on the number of active users of the service.

Hutchison Whampoa Group expects the phone - which has 3G multimedia capabilities, an MP3 music player and 2- megapixel camera - to sell by the hundred of thousands of units in the fourth quarter, and over the next few years he hopes to extend that into the millions.

Separately, 3 said it expects to sell more than 100,000 phones in Italy by the end of 2008.

It's an interesting experiment in "account control." If 3 customers make phone calls using Skype, Hotmail for messaging, Google for search and YouTube for television, it might devalue the operator. But 3 is taking steps not to kill itself. Initially, users will not be able to use SkypeOut to place calls to the public or mobile networks. Next year the feature is supposed to be enabled.

Customers trying to use the Skype service in countries where 3 doesn't have a presence will have to pay normal international data tariffs. So it might be cheaper in that instance to use the standard mobile calling feature as well.

Covad Goes Private

Covad Communications Group has signed a definitive agreement to be acquired by Platinum Equity in an all-cash transaction valuing Covad at $1.02 a share. Platinum Equity is a global merger and acquisition firm. Irrespective of what it means for Covad as a financial asset, it will be interesting to see how Covad and its customers might benefit.

In some ways, Covad is a hard company to explain in simple terms, much as EarthLink is somewhat convoluted. "National local" possibly obscures as much as it clarifies. It provides fixed wireless, T1, DSL, hosted voice, wholesale and retail services. It does operate a national network to service local access markets. It is a small business specialist but has lots of consumer end users. It has lots of central office co-locations. The problem is that all those things get done by other entities as well.

Covad's line-powered voice offering actually is unique in the market. But that's a position praiseworthy and troublesome at the same time. Whether something is "unique" or "odd" is a matter of perspective. There's no question but that line-powered voice is positioned in its own quadrant, as far as mass market voice services.

The issue is how much effort it takes to make the benefits clear to a typical consumer abd whether the benefits are valuable enough to differentiate the offering. Cable companies decided it was a negative to offer anything other than "digital voice" to customers, with no new features. At the other end of the spectrum, hundreds of millions of people had no problem at all grasping what Skype was all about.

Everything in between takes a bit of explaining.

Mobivox Web-Activated Calling

If you are a fan of Web-activated calling, and really prefer using your mobile, and want to use a service that actually is easier to use than Jajah (and Jajah is really easy), try Mobivox. Once you upload your directory numbers to Mobivox, you dial a local access number and then use voice prompts to pull up numbers in your directory and then Mobivox connects you.

If you are calling a number not in the directory, you get a prompt to enter the number on the keypad. The voice recognition seems to be quite good. There are no client downloads, even when using a mobile. You can use any phone at all. No need for a smart or feature phone. It is pleasant, easy to use, and the voice activation feature is almost fun (what about "dialing" or "clicking" phone numbers actually can said to be "fun"?).

The ability to use it without a download is really nice, as downloads are a huge barrier to adoption for most people, including me.

Sprint OKs Phone Unlocking

Sprint Nextel has agreed to provide departing Sprint PCS customers with the code necessary to unlock their phones. Of course, an unlocked Nextel iDEN phone won't do you much good. But at least Sprint's CDMA phones can be used on the Verizon or Alltel networks.

Sprint made the offer to settle a California class action lawsuit and an Alameda County Superior Court judge has given the settlement his preliminary approval. A final approval hearing hasn't yet been scheduled.

Sprint said it will share the unlocking code with all current and former subscribers once their phones are deactivated and their bills are paid. The company also will add information about the locking software and how to obtain the unlocking codes in the list of terms and conditions of service given to new customers, and instruct its customer service representatives on how to connect a non-Sprint phone to the Sprint network.

The settlement covers customers who bought a Sprint phone between Aug. 28, 1999, and July 16, 2007.

T-Mobile is facing a similar class action lawsuit in California. Users of the iPhone, which is locked to the AT&T network, filed two separate lawsuits last week against the carrier and Apple Inc., claiming its use restrictions and a software upgrade that disables unlocked iPhones constituted unfair business practices.