at&t Wireless Outage

In case you are having trouble sending and receiving email on your at&t Wireless smart phone, or are unable to get connected using your data card, there is a wireless network outage affecting at&t Wireless users in the Midwest and Southeast.

Magnitude of Nextel Blunder

In its most-recent 8K filing with the Securities and Exchange Commission, Sprint Nextel Corp. says it may have to write off the full value of the $31 billion worth of "goodwill" carried on its books as an asset related to the Nextel acquisition. The move will not affect Sprint Nextel's cash balance or future cash flows but will affect the company's statement of assets.

One way of looking at the impact of the overpayment is to analyze the former Nextel's contribution to Sprint Nextel's overall business. In the most-recent quarter, Sprint Nextel reported $8.04 billion worth of service revenues, of which the former Nextel business contributed 35 percent, or about $2.6 billion. On an annualized basis, call that $10.3 billion of gross revenue.

Sprint's profit margin on wireless services is about 32.4 percent. So call the former Nextel profit as $3.3 billion a year. The magnitude of the overpayment is 9.4 times the annual profit from owning the business.

Sprint Made a $31 Billion Mistake Buying Nextel

In its most-recent 8K filing with the Securities and Exchange Commission, Sprint Nextel Corp. says it may have to write off the full value of the $31 billion worth of "goodwill" carried on its books as an asset related to the Nextel acquisition. The move will not afect Sprint Nextel's cash balance or future cash flows but will affect the company's statement of assets.

The coming write down essentially means Sprint overpaid $31 billion to acquire Nextel. Blunders of that magnitude often are enough to spell the end of independent life for any corporation that makes such a sizable mistake.

C Block Hits Threshold for Open Access

The C Block of 700-MHz frequencies today hit the minimum amount required to trigger the "open access" provisions Google had been so anxious to foster. So now we have to wait and see who ultimately wins the spectrum. At this point, Google's minimum business objectives have been met.

Taiwan Earthquake Just a Year Ago

And speaking of cable cuts that massively disrupt global communications, it was just over a year ago, in December 2006, when an earthquake took out a number of Pacific cables.

Those cable cuts took out much voice and Internet communications in many parts of Asia, as well as 60 percent of capacity between Asia and the United States.

The 2006 Hengchun earthquake occurred on December 26, 2006 at 12:25 UTC (20:25 local time), with an epicenter off the southwest coast of Taiwan, approximately 22.8 km west southwest of Hengchun, Pingtung County, Taiwan, with an exact hypocenter 21.9 km deep in the Luzon Strait ( [show location on an interactive map] 21.89° N 120.56° E), which connects the South China Sea with the Philippine Sea.

Cable Cuts Not That Rare

In the winter of 2000, Telstra, Australia's biggest Internet service provider had a cable cut of its own on Nov. 19, when its Internet backbone cable, sitting in less than 100 feet of seawater about 40 miles off Singapore, was damaged by unknown causes.

Telstra at that time relied on the cable, known as SEA-ME-WE 3 (for Southeast Asia, Middle East and Western Europe) for more than 60 percent of its Internet transmission capacity.

About 23,600 miles long, the cable connected 33 countries, touching places as diverse as Singapore, Malaysia, Thailand, India, Saudi Arabia, Egypt, Djibouti, Turkey, Greece, Italy, Portugal, France and the U.K.

WiMAX: Ultimate Role Unclear

Clearwire touts its vision of the future as mobile Internet. But so far, its customer base is a replacement for dial-up, cable modem or Digital Subscriber Line service. Just four percent of its customers appear to substituting a mobile service for WiMAX.

That isn't to say the customer base and apparent value proposition will remain as it currently is. WiMAX someday may compete more directly for the broadband-equipped mobile customer base.

That isn't the case today, where Clearwire seems to be competing with cable and telco fixed broadband services. At some point, the mobility play is supposed to have Clearwire and WiMAX competing more robustly for the data card and smart mobile phone customer. But lots of challenges remain.

WiMAX might someday primarily be a platform for mobile broadband. In Sprint's case, it might primarily be the next-generation replacement for 3G broadband. If the former winds up being the case, cost control will be more important. If the latter, feature richness will be more important.

The reason cost control is more important for a mobile broadband network is that the revenue sources will be less robust, on a "dollar for bit" basis, compared to networks that make lots of revenue from voice and texting services, which are highly efficient, on a "revenue for bit" basis.

Advertising also is more important if mobile broadband winds up being the primary attraction for WiMAX users. That suggests content access is more important than communications, and that in turn means media, and media always means advertising.