Events today set up an interesting conundrum in the handset market, with Research in Motion reporting strong earnings late yesterday, and consequent stock jump, on the day that Apple’s keyless touch screen iPhone hits the streets, with sales starting at 6 pm and running until 10 pm. So it’s keypad versus virtual keypad, lots of buttons versus one, Enterprise favorite versus consumer rave, and it will be interesting to see who comes out ahead on this.
As I mentioned earlier this week, I often wonder the cause of my computer's plague in second guessing from second and third party programs. This is nothing new, nor corrected; even Microsoft’s new Vista takes forever and a day to load, according to boot up tests run by the Wall Street Journal’s Walter Mossberg some time ago (I'm running XP).
Apple computers take about a tenth of the time to get up and running, using the current operating system (which is due to replaced by Leopard early next spring, if memory serves me correctly). Apple pushed its Leopard release date back somewhat, but hey, everybody’s doing it (Vista arrived slightly late on the scene too, you may recall). Besides, Apple has the iPhone launch with which to contend.
I ventured into an AT&T store yesterday to get some idea of how things will go today, and that’s when I found out about the unusual store reopening hours, and so I got a pretty good idea of where I can get the iPhone without having to spend the night camped out at the mall, which I had no intention of doing under any circumstances – that’s just a little too much like Wayne’s World for me. Plus, you’ve got to shell out a passle for the phone and sign up for 2 long years, while I’ve been on month to month (with AT&T) for so long that I’m not really interested in changing things.
Until I talk myself into it.
Someone put this question to me earlier today: will T-Mobile’s new Wi-Fi phones run third party applications like Skype? And since I don’t know the answer to that particular question, I thought I might do a little research on this relevant point. Under any circumstances, it looks to be a smart move, network congestion wise, for T-Mobile, allowing customers to toggle back and forth between cellular and Wi-Fi networks (including at 8500 hotspots in the US, 15,000 worldwide), in order to relieve network congestion. Or attract new customers who want to do this sort of thing.
Apple's iPhone will allow users to use Wi-Fi hotspots as well. It just won't be 3G. A slippery slope lies ahead.
More on the regulatory side, the Federal Trade Commission released its study on Net Neutrality earlier this week, concluding there have not been widespread problems, that existing protections are sufficient to address any problems that may arise, and urging caution before adopting proscriptive rules which may have unintended adverse consequences for consumers. I'll take a closer look at this report later, but, as the saying (roughly) goes, may you live in interesting times, and so now I'll turn to Qwest's bid to reform the Universal Service Fund's wireless subsidy in a bid to increase broadband deployment in rural areas served by large telcos.
The Rocky Mountain News reports that Qwest has proposed revising how the wireless distribution is handled to save about $500 million from the $7 billion fund. Wireless competitors increasingly secure USF funding to enter markets to compete with wireline incumbents, where phone service is already being provided. Qwest seeks to have the savings be shifted to further broadband deployment in rural areas.
Underlying the request, which was made to the FCC, is another market reality, that many rural customers are served by large carriers such as Qwest, AT&T, and Verizon, and not by smaller rural "mom and pop" telcos or mid-sized carriers. Broadband deployment inititiaves vary widely across this array of carriers that vary not only tremendously in size, but also by particular company goals and network architecture. Suffice to say, the rurals and IOCs ("independent operating companies") have been on the forefront of broadband deployment in many areas.
Continuing with the theme of made up words I played around with yesterday (iPhone, NXTcomm, YouTube and FiOS), today's news is about a new Wi-Fi angle from T-Mobile, offering another indicator that the US cell phone industry is undergoing some consumer friendly changes – and without any regulatory prodding.
T-Mobile, which has done a good job of collecting Wi-Fi hotspots about the country, including at the ubiquitous Starbucks, now offers two phones which allow users to make calls over a Wi-Fi network – such as your wireless router at home or at any of T-Mobile's 8500 hotspots, and it can flip over to T-Mobile's cellular network as well. One reviewer found the service to work quite well, so check out the article for more details.
This is just part of the “convergence” story which gets rolled around a lot. While perhaps overused, "convergence" operates on at least two levels – one at the customer end, where a provider may offer several different services over the same pipe, or non-pipe, and the other, which takes place deep in the network, where carriers (and multiple carriers) take a mish mash of different technology platforms, standards and protocols, and somehow hang everything together.
This takes investment, some pretty serious network planning, and a stable regulatory environment. The latter came at great price over the course of the past several years; a recent, and fascinating article in Business Week Online on the resurgence of telecom captures a sense of the wipeout that occurred in telecom following the dot-com bust. Apparently the sector got clobbered worse than any other industry since the Great Depression.
It wasn't too long ago that cab drivers might get mad when they found out what industry one worked in, if by chance they shared in the financial wipeout that also cost literally hundreds of thousands of jobs, when industry meetings drew more than a few attendees possessed of a shattered, vacant look, and trade shows folded up forever at the end of a week. At last week's NXTcomm show in Chicago, however, the tone was different, and the network side of convergence came through pretty clear.
This is due to the fact that while the industry was imploding, it was also setting its own stage for an incredible revival through transformation, from narrowband to broadband, from service silos to bundled offerings, and today the lines between content, services and applications being pitched to consumers blur upon arrival. AT&T just rolled out another package for residential consumers that someone alerted me to as I’m finishing this paragraph (pasted below).
Meanwhile, elsewhere in the ether, Sprint was downgraded by one analyst for due to slowing growth and growing competition within the wireless sector (iPhone, Verizon, T-Mobile). But recall that Sprint also has plans to roll out a nationwide Wi-Max network over the next couple of years, to the tune of $3 billion, (with Clearwire betting on Wi-Max as well), and this has disruptive potential written all over it.
So it’s just another day in the telecom industry, where nothing ever stands still. And that’s a good thing, and through not a little credit to policymakers that made some tough decisions, and then wisely refrained from excessive tinkering with this tremendous economic engine.
AT&T Supports Property Owners, Builders and Developers With New Unified Program That Provides Communications and Entertainment Services
PR NEWSWIRE
Posted: 2007-06-28 11:04:03
SAN ANTONIO, June 28 /PRNewswire-FirstCall/ -- AT&T Inc. (NYSE: T) has announced that the AT&T Smart Moves and BellSouth Community Technologies initiatives are now combined under one unified brand, AT&T Connected Communities. The united program delivers some of the most advanced communications and entertainment services to rental properties and new residential developments.
Now operating throughout AT&T's 22-state local service area, AT&T Connected Communities is a strategic initiative between AT&T and rental apartment owners, homeowners' associations, builders and developers of residential developments. The initiative involves the marketing and provisioning of services over fiber-based and other technologies to the homes in their communities.
The program will enable AT&T to make Internet Protocol-based communications and entertainment services available to hundreds of thousands of residents as those services are deployed across AT&T's markets.
Through the AT&T Connected Communities program, AT&T works directly with apartment ownership groups; apartment management groups; real estate investment trusts; single-family residential developers; and local, regional and national single-family builders to provide voice, video and Internet services.
The program helps property owners and builders to attract and retain apartment renters and new homebuyers with complete, reliable, end-to-end and next-generation communications and entertainment solutions. To date, the AT&T Connected Communities program has contracts completed with thousands of leased properties for AT&T communications and entertainment services across the country.
"Today's apartment and condominium dwellers -- and homebuyers -- are embracing the digital lifestyle and want advanced communications and entertainment options as soon as they move in," said Bill Story, vice president, AT&T Connected Communities. "AT&T Connected Communities is one strategic way that we are connecting customers with our next generation of services while providing property owners with added value that helps differentiate their communities."
Note: This AT&T release and other news announcements are available as part of an RSS feed at http://www.att.com/rss .
About AT&T
AT&T Inc. (NYSE: T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com .
AT&T and the AT&T logo are trademarks of AT&T Knowledge Ventures. For more information, please review this announcement in the AT&T newsroom at http://www.att.com/newsroom .
SOURCE AT&T Inc.
Copyright © 1996-2007 PR Newswire Association LLC
No doubt that the acronym happy telecom industry has moved into a new phase with a raft of made up words like those above, a number of which drove straight past lexicon into phenomenon.
In fact, someone really needs to sit down and figure out the true network impact of Apple's iPhone – that in the week before launch mere mention of the device has driven Internet traffic to a record 10 times the amount of information sent over the web during the entire previous year, or something of that nature, so we can all go "wow," and remain secure that one doesn't actually have to own an iPhone to be an integral part of a successful viral marketing campaign.
Last week’s NXTcomm keynote presentations from Verizon CEO Ivan Seidenberg and Motorola CEO Ed Zander featured similar numbers of note, as in "phenomenally hard to comprehend." Mr. Seidenberg said that YouTube – created way back in February of 2005 – gets 100 million hits per day and is growing 7 percent per week. He delivered reams of information about what it takes to send video streams all over the place.
Similarly, Mr. Zander’s presentation featured one “slide” with a shot of the globe and two blinking lights – one steadily blinking at 4 per second, representing the global birth rate, and the other, blinking much faster, for the number of cell phones purchased around the world, at 32 per second. These numbers struck me as being kind of scary – a real life “Rise of the Machines.”
Yesterday is the day when the tightly controlled iPhone process allows for selected technology reviewers to play Show and Tell, and release authorized reviews of the device, and I was on my way to checking out Walter Mossberg's column on the Wall Street Journal online for such when I ran into two, no, three more stories about the phenomenon, which I just had to read.
One feature, or missing feature, mentioned in the swirl around iPhone's debut is the lack of 3G and its unspectacular data rate. I figure this is all part of the pavement for marketing for iPhone Version 2, which I have decided to shorten to "iPv2," which is also not a word, and that this probably adds up to Steve Jobs having popularized a new segment in the US mobile market: the $500 dollar and up must have cell phone.
By way of recall, or detour, Skype’s Petition for Declaratory Ruling, filed with the FCC in February, sought to explore the heavily subsidized US cell phone market. Skype noted that cell phone manufacturers sell expensive phones almost exclusively through carrier channels, which in turn discount them in exchange for customers signing up for exclusive service contracts or upgrades. Another big problem, according to Skype, is that the carriers won't allow certain applications to run (like Skype, for example).
Skype contends that the US cell phone industry structure precludes an independent channel, not tied to the carriers, like that which exists in other countries, where phones may be purchased separately from phone service. Incidentally, in some places overseas, phones are really a big deal, and people swap them out constantly for new models, even though they cost a boatload, relatively speaking. More to the point, the industry channelization (vendor through carrier to consumer) may cut out non-aligned innovator types like Skype.
I suspect that many Americans may be more utilitarian in their approach to phones, seeing them more as tools than anything else (I treat mine with less care than I would a tractor) but this might be a tough point to expand without overly generalizing. Or that we're just cheap, or conditioned, and do it our way, until we find a reason to do it another way. Which may be this week, as craigslist.org becomes the retail destination of note for the iPhone.
In any event, there are some market niches in other countries that don't correspond with our market: in China, for example, some people place great importance on having certain numbers, perhaps out of superstition, and dealers sell these particular numbers at premium prices.
I guess the closest thing to that domesitcally would be the assignment of certain area codes, but I'm about to venture into numbering issues, and so I'll just back right out of that one. Video may be complicated, with its own attendant legal wrangling (such as copyright and licensing) but numbering issues present the ultimate cul-de-sac of endless complications, hyperbole and detail.
Back to the connectivity issue. One level up (or down) from Skype's claim that the carriers interfere with the applications' performance on their networks is the related issue of applications and device connectivity – that not all devices allow all applications to run on these devices or peacefully co-exist – and so iTunes or Apple may end up being every bit as big a gatekeeper for an applications provider as a carrier may be alleged to be, and so you end up with State AGs or the FTC or DoJ or even the EU taking a really close look at how well Thing One plays with Thing Two.
For example, France might look at iTunes' compatibility with other MP3 players, or that Google might complain about certain desktop search functions impaired by, say, Microsoft, and take that complaint to the States (or DoJ!) or that a company's IT department steadfastly maintains that the iPhone won’t run Outlook, and so on.
This is also where a stodgy old world carrier like Verizon may surprise people with comments like "we don't have to own every service. We just have to package them and help the customer find the things they like."
This doesn't sound like a gatekeeper, unless it's a floodgate keeper.
The problem I have with technology, and interactivity, is that all the programs on my non-Apple computer appear to be at war with each other, and this infighting slows things down to an absurd degree. Or prompts endless, silly followup questions, such as whether I want to download the newest version of this software now, as opposed to reading a certain article, which is what I clicked the mouse to do in the first place.
Simplicity sells. We'll see what happens on Friday.
Wednesday morning’s NXTcomm show in Chicago began with driving music, lasers jabbing across the ceiling, tied in with captivating videos from Verizon and NBC: this is not your father’s phone company, but it's good to have it capable of delivering movies that your father watched.
It also didn’t feel like 8 in the morning in Chicago. A colleague remarked it felt more like a Las Vegas club, which locale happens to be the setting for next year’s NXTcomm.
Keynoter speakers Ivan Seidenberg and NBC Universal chair Bob Wright crisply delivered their respective company views on broadband and entertainment, and there didn’t appear to be a whole lot of daylight between the two: in other words, where one ends and the other begins, and this distinction may not only be lost but irrelevant at that.
This is on the entertainment side, which happens to be a powerful driver and so much a part of our daily lives. I was struck by the music, since it was early, for one thing, and by the fact that a particular song might go from being a nightclub hit, in one minute, to creating the backdrop for what some might call a corporate video, in another.
On the other hand, a corporate video that includes scenes from our collective film past – including such varied icons as W.C. Fields, Jaws, and Clint Eastwood (part of the NBC Universal library) – doesn’t really feel like a corporate video.
This cuts both ways, of course; almost anything so prevalent as entertainment is in our society today contains more than one seed, but that’s a discussion for another day. Right now, I’m more interested in the sense of change I felt at the show, where, as Verizon’s gigantic light banner noted: Begin Again.
Well, in a way, we have. The telecom downturn left companies truly dying on the vine, with no investment, few prospects for survival, and little hope of recovery in the foreseeable future, but now we’ve seen through that. In fact, one might look toward Verizon, and their messaging about the transformative power of communications networks, and the importance of sustaining investment and innovation in the market.
I’d heard several folks mention, in passing, their impression that Verizon’s message had the whole company behind it, but I really didn’t pay much attention to this detail, until it kept reappearing, and it finally sunk in Wednesday morning. Several blogs ago, I mentioned Verizon's CTO talking about the potential for gigantic capacity demands on networks, for example, presented by new services that today may be either undeveloped or unknown. YouTube has only been around since February 2005: not exactly forever.
I had some priming Tuesday night, when a Verizon representative gave a talk in which he spoke of how communications can help better our lives, in transforming dire education needs from the dry blackboard to exciting interactive tool, much like the applications that captivate and involve younger people today, to changing the way medical records are not only kept, but recorded and shared among medical personnel.
These are noble, valued things, and have the potential to have much greater impact on our lives than entertainment, and it’s up to us in the industry to see these goals and possibilities for what they are, and see them through. Funny thing, though: watching scenes from NBC's library zip by made me miss watching movies. I guess I'll have to begin again.
Earlier this week I met with a like-minded telecom policy observer, and being like minded, we both felt that the dialogue on Net Neutrality is both shaping the outcome and may actually end up being the outcome: that it would not be in a carrier’s best interests to limit customer access to content or applications or devices. In fact, the FCC’s speed in addressing the one case on record stands as an indicator of how seriously the agency takes its role in the connectivity arena.
While there are philosophical differences about how all this hangs together, and since this is telecom policy that we are talking about, questions will arise, prompted by the ever changing marketplace, driven by new technologies, and that old telecom proverb, “your customers... give them to me.” This is why we have memorable commercials with real Earthlink employees making funny sounds and claiming that “Earthlink is blazing fast.” Sounds like a sales pitch to me, or a differentiator – which may be saying the same thing. What makes a “better” mousetrap? Better marketing? Or better technology? Or both?
Speaking of marketing, I recently bumped into a newspaper dispenser for a humorous publication, and, flipping through the pages, I took note of their home/office delivery pitch: “slower than dial-up.” Now, that’s chutzpah, but I have the feeling that the writers have plenty of that to go around. As observers of modern society, they also have an endless source of material and mores to skewer; namely, modern society. A recent headline: “MySpace Outage Leaves Millions Friendless.”
And so on. So many topics, so little time… and what little time you have, the folks who produce American Idol want to make sure they forcibly occupy all of that which remains. They want you never to take your mind off the show. In fact, you can’t get away from it even if you try. It’s sort of like spontaneous combustion, but self-replicating. I watched the show for a period last year, and tried to escape when I wasn’t actually watching, but found it online, in stores, and everywhere I went, and so this season I didn’t watch the show, but found it online, in stores, and everywhere I went. I even wind up writing about it... again.
Think about it: one couldn’t even lost alone on a desert island these days without some risk of having a reality TV show plonk right down on location and begin shooting a show about group dynamics. But I digress. What American Idol does well – and this was noted in a piece that ran in Business Week Online a couple weeks ago – is that it generates its own discussion, and these discussions take place not only in person, at the proverbial water cooler, but also across networks, which link today’s water coolers. In fact, I wouldn’t be too surprised if the show crashed some networks, which means they need more capacity, and we’re here to help if they do.
(The article, entitled "More Bandwidth Than You Can Use?" explores the potentially "gigantic" bandwidth requirements coming from new demands on networks (quoting Mark Weigleitner, Verizon CTO), and about increasing interactive consumer demands, says that "[i]f American Idol doesn't prove that viewers will give more or less instant feedback to TV programs they like, nothing will." Interestingly, the article also addresses what we don't know about "the market:" "And there are always applications that no one has thought of yet. "Back when the first cable modems were demonstrated, the only demanding application we could think of was sending photos," says Comcast's Werner. "Now I'd say 80% of the commerce I do is online, and so is a lot of the music and information use." I have my own concerns about prematurely restricting a market we know nothing about, and the apparently permanent impact of watching one partial season of American Idol).
On other ever present fronts, I keep spotting references to June 29th, Launch Day for AT&T's iPhone, and I figure I may as well repeat it here, perhaps as a reminder to check one out when the second or third or fourth shipments arrive. I did spot some pretty nifty Nokia phones brought over from Asia the other day; I’m not sure if the phone or the equally nifty phone cases are available over here, but since today’s local marketplace is also global, it’s really just a matter of finding it on the screen, and then matching case with phone with SIM card with network... and hoping that it works.
Ok, that about wraps things up: I can’t even finish a paragraph that refers to the iPhone without it popping up like, well, American Idol: USTelecom’s dailyLead just informed me that “surveys show AT&T Faces Massive Demand for iPhone.” The dailyLead links to the story, linking to the article which appears in today’s Wall Street Journal.
Just a reminder that next week USTelecom and the Telecommunications Industry Association, or TIA, have their re-united trade show in Chicago, called NXTcomm.
I can’t seem to keep up with AT&T. Yesterday’s blog (not yet posted) was all about recent developments at the carrier, then lo and behold, "S" shot me an e-mail that "T" had gone public with another new announcement that rang up one of my favorite subjects, connectivity principles, and so yesterday’s blog – which I'd planned to polish off today – will no doubt will no doubt be done by tomorrow (unless San Antonio comes out with yet another announcement).
In other words, I’ll be the last person to write about the launch date for the iPhone.
Network World reports that AT&T has introduced a web applications accelerator using a "device" from an intriguingly named outfit called F5. My first thought was fighter plane, but then it struck me the company must have some double secret agenda, and so we put our best people on it, pronto. Clearly, any company with the slogan that "the world runs better with F5" is bent on taking over.
Anyway, F5 makes a box that sits between a company’s server and their link to the Internet, and it enables web applications to be delivered more quickly, without latency errors, and increases interactivity performance. Presumably, the big world map hidden behind the curtain in the lavishly appointed conference room at Number 10 Downing may now be viewed in real time from remote sites.
While T wouldn’t confirm exactly which device from F5 they are using, Network World figures it’s probably the WebAccelerator – they've got good people there, on the inside – and it's all part of AT&T’s new standard issue for companies that offer Enterprise web hosting services. Standard issue: now that's significant.
Sounds smashing, but then one wonders… would such a service somehow be prohibited, inadvertently or otherwise, as violating “net neutrality” rules?
If such a service were offered standard to Enterprise users but not to individuals seeking to launch the Next Big Thing from the proverbial Silicon Valley garage, what then? Would it have to be installed throughout all networks or made available to all users?
Or is it simply an example of a company trying to make its web hosting services more competitive in the Enterprise marketplace, which is facing a threat from cable?
These things can escalate very quickly. It looks like Rome didn't want San Antonio around, but T is looking for other opportunities, further afield, and you can bet on that like chaos on June 29th.
The other day at lunch a companion and I were discussing the history of various pricing schemes, and he recalled the early days of WATS line investigations at the FCC. Very deep background. At the time, he said, notions like “volume discounts for businesses” were seen as somehow being unfair to ordinary consumers. So they investigated.
Nowadays, by contrast, most people consider volume discounts as so utterly part of the landscape that not only are they taken for granted, but that anyone buying 2 or more of anything automatically tries to get a “volume discount” and are likely to be offended if they don't get it – it is as assured as Agent 007 returning any gadget he gets from "Q" in absolute shambles, if he returns it at all.
I'll have to have "J" and "B" check into this F5 outfit, and see whether they have anything on the order of a BlogAccelerator, disguised as an Ethernet device, of course, before Version 7.1 does me in. Meanwhile, I'm off for a spin in the Series III with the robust 4.2 litre engine.
Cheers.
The FCC voted yesterday to allow competitors to incumbent telco and cable operators easier access to the inside of Multiple Dwelling Units, or MDUs, permitting competitors to reach “inside wiring” subloops at the terminal block (for telcos) before branching out to other units in the building, or to avoid having to reach “physically inaccessible” wiring (for cable operators) – such as that located behind sheetrock.
This particular order, though, does not address the larger issue, literally: whether owners of MDUs may strike exclusive deals with cable or telco operators that limit competitive access to the building or buildings as a whole, which is the subject of another proceeding currently active at the Commission.
Also on deck at the FCC is the Section 621 Cable Renewal Franchise proceeding, where the Commission has tentatively concluded that cable renewal applicants should be availed of the same streamlined procedures avaialable to their video competitors, otherwise known as the telcos.
The big picture: the FCC is addressing a host of remaining barriers to increase broadband deployment through cross platform or other means of competition.
From FCC Commissioner McDowell’s separate statement on yesterday’s decision.
"To help create an environment where investment, innovation and competition can flourish, it is imperative that government treat like services alike, preferably with a light regulatory touch. Today’s order is a pro-competitive, deregulatory decision and is our latest effort to achieve regulatory parity between incumbent telephone companies, incumbent cable companies and new entrants into the voice, video and data markets. Today’s action takes necessary steps to assure that new entrants seeking to compete with incumbent cable and telecommunications providers in multiple dwelling units (MDUs) and multi-unit premises have appropriate access to inside wiring."
Commissioner Adelstein noted that “technological innovations and cross-platform competition are now allowing multiple services to be provided over that same wire.”
Commissioner Michael Copps noted that the item address Title's II (for common carriers) and VI (for cable operators), and approved in the decision, while Chairman Martin said, in his separate statement:
"Specifically, we are granting Cox’s [Oklahoma Telecom] petition for declaratory ruling regarding the scope of access to incumbent telephone companies’ inside wire in apartment buildings. This decision allows a new entrant competing to provide telephone service to gain access to inside wiring, thereby facilitating competition between telephone providers to serve customers who live in apartment buildings.
Similarly, the Order also finds that a new entrant competing to provide cable service can gain access to inside cable wiring that is “physically inaccessible.” This ruling thereby facilitates competition between cable providers to serve customers who live in apartment buildings. The action we take today seeks to foster competition across different platforms and is competitively and technologically neutral."
For more information, see http://www.fcc.gov/.
