64% of U.S. Broadband Connections Now are Mobile

There are more mobile broadband subscriptions in service in the U.S. market than fixed line.

The CTIA notes that there are now 103 million mobile broadband customers in the United States, according to Informa Telecom and Media. There are more than 58 million fixed line subscribers, according to Insight Research Corp.

By that measure, there are 161 million U.S. broadband subscriptions. So mobile connections represent 64 percent of broadband connections now in use. And mobile broadband has exploded over the last 18 months.

In June 2008, mobile broadband accounted for more than 59 million high speed subscribers, about 45 percent of all broadband connection in the United States, according to the Federal Communications Commission.

Clearly, any effort to create a national U.S. broadband policy would have to recognize the leading role wireless now plays.

Google, QR Codes and Mobile Tagging

You might wonder why Google is interested in "QR codes," two-dimensional bar codes that can contain any alphanumeric text and often feature URLs that direct users to sites where they can learn about an object or place.

Camera-equipped mobile devices provide the "reading device." Mobile always are with a user, so the QR reader software allows people to get information about anything with a QR code, wherever they are. Combine that feature with Google's advertising revenue model, location-based services and one ends up with the mobile equivalent of "tagging."

Beyond the ability to create richer information about places and things, widespread QR creates a richer platform for mobile advertising. That is all the incentive Google needs to push the technology.

The codes are increasingly found on product labels, billboards, and buildings, inviting passers-by to pull out their mobile phones and uncover the encoded information. QR codes can be used in newspapers, magazines or clothing.

Tracking information for products in industry, routing data on a mailing label, or contact information on a business card are other potential applications.

QR codes also are part of the move to "augmented reality," providing richer information and context about the physical world around any mobile user, where they are. Again, the marketing possibilities are obvious.

What Business is Google In?

Looking back from where we are, and recalling the vigorous debates analysts and observers once had about "whether Google wants to be a phone company," it now appears the original question has no simple, unambiguous answer.

Does Google want to be a regulated common carrier providing communication services to consumers and businesses? No. Does Google want to be a provider of Web-enabled IP telephony services? Yes. That's what Google Voice does.

Does Google want to be a "Skype-like" provider of international calling services? Perhaps it was not originally thinking it wanted to do so, but Google Voice now supports for-fee global calling from whatever handsets Google Voice users wish to employ.

Does Google want to be a facilities-based wireless services provider? No, but it has an investment stake in Clearwire. Does Google want to be a mobile phone manufacturer? No, but it is increasingly partnering with others, including hardware and service provider partners, to create new applications and business practices within the mobile industry, planning to introduce the "Nexus One," a Google-branded open and unlocked GSM phone, in 2010.

The point is that there is no unambiguous answer to any of these questions. Google slowly has been adding new roles in the communication ecosystem, but primarily to increase its core business model of indexing information and creating advertising revenue streams around the ways people use information.

To "answer" the decades-old question about whether an "ad-supported" telephony model can be created, again we are left with an ambiguous answer. The consumer voice apps Google provides are partially supported by end user fees, while the business-focused "Google Apps" productivity suite primarily is supported by user fees.

It remains unclear whether any sustainable "telephony services" business model can be 100-percent ad supported. But it seems likely such an effort can be partially ad supported, just as cable TV service provider evenues are partially ad supported.

So here's the next question: Will Google Voice, still in private beta, be configured as a small business service, much as Google Apps comes in both a consumer version and an enhanced business version? Michael Arrington at TechCrunch thinks that will happen.

"From what we've heard, Google is very seriously planning to add a version of the Google Voice product to its Apps suite of applications for businesses," says Arrington.

So far it sounds as though the service will be most applicable to the very-small business setting, as the likely deployment will feature a single inbound line and then mapped extensions that will redirect calls to a home business line, mobile or VoIP device.

The key here is management of the single trunk line. To keep the single trunk line available, Google Voice would have to connect an inbound call to the virtual extension, creating a direct connection between the caller number and the virtual extension, and then release the trunk line.

The same thing would have to be done for outbound calls, allowing the Gooble Voice virtual number to do the outbound dialing, setting up the connection between two physical phone devices, and then releasing the Google Voice trunk.

If that isn't done, there will be danger of high "line is busy" blocking.

Still, one would guess that the inevitable question--does Google want to be a provider of communications services to small business--likewise will wind up being only ambiguously answerable. The only unambiguous observation is that Google now is well entrenched in the mobile, communications, application, advertising, IP communications spaces.

It is part of the ecosystem, but uncomfortably (for other ecosystem partners) unconfined to one role in the full ecosystem. Perhaps a better way of phrasing the question is: "Does Google want to make itself the center of a new ecosystem?". There's likely a single answer to that question.


Google started out as a search engine, and have since expanded, through product development and acquisitions, to include services in every link of the information chain, says Jay Neeley, a Web strategy consultant. So one way of looking at how Google might see itself is that it operates in core parts of the information ecosystem.

As part of its activities in the "Internal Information Creation" segment, Google hosts or enables the creation of content.
But Google also is heavily involved in the "External Information Creation" segment, indexing information it has not created.

In the "Information Usage" segment, Google facilitates ways to share, edit, talk about, use, remix, and do all kinds of other things with information. In the "Information Reception" segment, Google offers a variety of ways for users to access and keep track of information.

"Information Aggregation" is another part of what Google does, culling information by popularity or usefulness and
making that information available in other ways, such as in Google Maps. "Information Analysis" is part of the analytics portion of the information business.

It just so happens that to extend its information business, Google might want to do lots of other things that impinge on other existing businesses in the communications, entertainment, applications, software, media and hardware spaces.

AT&T to Add an Android?

Earlier in 2009, Motorola indicated that it plans to release as many as 20 handsets in 2010 running Google's Android platform.

It appears AT&T will be launching at least one Android device in 2010, said by some observers to be called the "Backflip" or "Enzo,"

The device is rumored to run "MOTO BLUR," software that syncs Facebook, MySpace and Twitter updates with no log-ins and no apps to open.

Perhaps you would expect this, but at least some rumors suggest the AT&T Android device will not come preloaded with any Google apps except for Maps. Some people won't like that, but the point is that users can buy Androids that do feature Google apps, either on other Android devices sold by AT&T, or Android devices sold by other carriers. And there will be the Nexus One as well.

The whole idea of "open" neworks and devices is that diversity will happen. Some people might not like AT&T "dictating" what software load is on the device when purchased. Others might simply say that it is an option. If any user doesn't like it, don't buy it. That's the whole idea of the benefits openness brings. Users get choice.

The "Opus One" is said to be Motorola's first iDEN-based Android phone. That means it will work on Sprint Nextel's iDEN network and offer features such as walkie-talkie calling. According to the Boy Genius, it will run Android 1.5 with iDEN service enhancement.

Twitter Appears to be Profitable

Twitter appears to be profitable, on the strength of new deals with Google and Microsoft to allow indexing of Tweets, as well as lower telecom expenses, Bloomberg BusinessWeek says. As important as that is for Twitter and its investors, it also is good news for Twitter users, who now can have less concern that Twitter will vaporize for lack of a sustainable business model.

To be sure, the long-term model still must be created. But Twitter now has more breathing room to do so.

In exchange for making tweets, searchable on Google, Twitter will receive about $15 million, while the Microsoft partnership is worth about $10 million.

Twitter also achieved profitability by reducing expenses, particularly the money it used to pay mobile providers to disribute tweets as text messages.

Apparently Twitter has managed to renegotiate so many deals with carriers that the company pays far less for the services.

By some estimates, Twitter now requires about $20 to $25 million in operational costs. That means the two search deals basically cover Twitter's operational expenses, at least for the moment. That will allow Twitter to spend time creating an ad revenue stream and commercial services that would allow enteprises to analyze traffic, for example.

Is Broadband "Satisfaction" Directly Related to "Bundle" Savings?

The conventional wisdom is that high-speed broadband access is becoming a commodity bought by consumers primarily on the basis of speed and price.

A recent survey by Parks Associates also showed that there is not all that much difference between consumer satisfaction with any of the broadband network types.

With cable modem service and digital subscriber line as the baseline, consumers said they were a bit more happy with fiber to the home, and a bit less happy with either satellite broadband or fixed wireless broadband.

So the differences are a matter of performance, or speed or price, right? Well, maybe, and maybe not.

The Parks Associates survey also found that consumers were more satisfied with any broadband service purchased as part of a bundle, less happy when broadband was purchased a la carte. Since the primary end user benefit from buying any bundle is the cost savings, one might conclude that consumer satisfaction has less to do with the technical parameters (speed and reliability) and mostly to do with "saving money."

Since satellite broadband and fixed wireless services rarely are purchased as part of a multi-service bundle, that fact alone would explain lower satisfaction with either satellite or fixed wireless services.

A Look at Consumer Satisfaction with Broadband

One can get a good argument about whether consumer satisfaction with any communications or entertainment video service is strongly related to customer loyalty.

The conventional wisdom is that "happy" customers are "loyal" customers, but that always has been tough to demonstrate in the consumer communications market.

Churn rates for "satisfied" customers often do not seem all that different from the behavior of demonstrably "unhappy" customers, though few would argue there is no relationship between "satisfaction" and "loyalty."

Some new analysis by Parks Associates illustrates the issue. As it turns out, "satisfaction" with various broadband access services is relatively comparable across platforms and networks. Fiber to the home fares better, satellite broadband and fixed broadband a bit worse than either cable modem service or digital subscriber line.

But the differences are not quite as pronounced as one might think. With cable modem and DSL service as the benchmark, FTTH does a bit better and wireless a bit worse. But FTTH, while "above average," and wireless "a bit below average," are fairly close to the baseline.

At the margin, FTTH customers are a bit more happy, wireless customers a bit less happy. But the link between satisfaction and churn is not precise, nor linear. Other surveys tend to show that overall consumer satisfaction with most entertainment video, mobile and fixed line services is reasonable, but not typically among the products consumers routinely say they are most happy with.

Grumbling and grousing just comes with the territory, it seems.