Competitors Response To The iPhone? Can We Talk About Something Else Please!

from the oooh,-look-over-there! dept

Back on June 29th, when the iPhone launched, we had some of the experts in the Techdirt Insight Community give their thoughts on how competitors should respond. There were, as per usual with the experts in the community, some really insightful and interesting responses. From that, we've been able to sign new business helping companies formulate and execute on their latest strategies. However, it seems that not everyone is taking a proactive approach to responding to the iPhone (or, at least they're not willing to admit it publicly). Gizmodo points us to an unintentionally amusing article where Laptop Magazine tried to get four competitors to give their thoughts on the iPhone. Rather than admitting that the iPhone has really shifted how many people view mobile phones and what they can do, all of the companies basically toe the corporate line, look the other way on iPhone questions and make sure to mention their own phones as many times as possible. Given the market response, however, it seems pretty clear that Apple is delivering what the market wanted, while these other guys have not. Insisting that you do have what it takes when the market is shifting elsewhere isn't going to be a winning strategy. Of course, we're here to help. If companies want to formulate a real strategic response to the iPhone, they might want to give us a call.

Filed Under: iphone
Companies: apple, helio, motorola, nokia, samsung

AT&T: Bundling Is Lame... But You Have To Buy This Other Bundle To See Why

from the you-said-what-now? dept

It's been quite amusing recently to hear AT&T CEO Randall Stephenson's explanations for various AT&T policies lately. First there was that whole thing about how the company wasn't promoting its $10 DSL plan because "people didn't want it" and now we find out that the company that once claimed no one wanted naked DSL (perhaps because the company wouldn't offer it) is now admitting that actually people love naked DSL and hate bundles... except in order to get the "naked DSL" bundle they love so much, you have to bundle the service with a mobile phone. There's nothing wrong with offering bundles, certainly, but it seems reasonable to have a la carte offerings as well. In fact, Stephenson notes that forced bundling "is an old mind-set. We need to get over it." Yet, as Broadband Reports notes at the link above, it's a bit odd that he's saying forced bundling is an old mind-set, when he's promoting the similarly forced bundle -- where it's just mobile service rather than a landline phone service.

Filed Under: bundling, naked dsl, wireless
Companies: at&t

Verizon Decides It Doesn't Like Open-Access Wireless Rules After All

from the damn-competition dept

Discussion of the upcoming auction for licenses for 700 MHz spectrum has been dominated by the desire of Google and other groups to have "open-access" rules put in place. These rules would force license winners to sell wholesale access to their networks, allow any compatible device to be used on them, and follow net neutrality principles. The FCC paid some lip service to the issue by attaching just two of the conditions (net neutrality and allowing the use of any compatible device) to just a portion of the spectrum, and adding that the conditions will be dropped and the auction for the relevant licenses restarted without them if a reserve price of $4.6 billion isn't met. This was a political show that made it look like the FCC was taking some action, but the likely overall impact on the market will be minimal. Perhaps what made it clear that the rules were toothless and wouldn't have much competitive impact was the fact that incumbent telcos AT&T and Verizon voiced some support for them. But it would appear Google execs' comments that the company will "probably" bid on the spectrum, even though the FCC didn't adopt all its proposed principles has spooked Verizon, as the telco is now suing the FCC, saying it overstepped its authority in putting the conditions on the licenses.

When it looked like the open-access rules wouldn't have any effect, and that the auction for the licenses with them wouldn't attract enough buyers to hit that $4.6 billion reserve price, Verizon went the politically and PR-expedient route and voiced its support for them. Now that it looks like Google's going to be ready to pounce on the spectrum and pay the reserve price, Verizon contends the rules are illegal. Without the involvement of Google or another deep-pocketed bidder, Verizon could wait for the auction to restart without the rules, then pick up the spectrum free from the open-access rules. Since it looks like Google will bid up to the reserve price, Verizon faces the prospect of getting caught in a bidding war with the company, and should it win, it would have to operate any network in the spectrum with the open-access rules -- which it clearly doesn't want to do.

Filed Under: fcc, open access, spectrum, wireless
Companies: at&t, fcc, google, verizon

Why Metered Broadband Slows Internet Innovation

from the how-to-slow-internet-innovation dept

It's been a while since there's been much debate over the issue of metered vs. flat-rate internet access plans, but it's flaring up for a variety of reasons these days. First, Adam Thierer posted a long essay over at the Technology Liberation Front arguing that piggybacking on WiFi has real costs and that metered broadband would solve many of the problems by convincing access point owners to secure their broadband. This seemed like an odd argument -- adding a significant cost as a method of signaling that there was, in a few very specific circumstances, a tiny little marginal cost associated with some WiFi piggybacking. The second thing thing that's given new life to the metered broadband argument is the sudden reappearance of stories about Comcast's unpublished usage caps. This is an old, old story that's been talked about for many years, but pops up every now and again. Basically, Comcast (and some other ISPs) will cut off certain customers who are using too much bandwidth. The real problem, honestly, isn't that Comcast is cutting off these users, but that they're not at all transparent about it. The services are promoted as "unlimited" and then the usage caps are kept a secret... until you've been kicked off.

Anyway, with the latest barrage of stories about these usage caps, it's common for those supporting ISPs to blame the concept of flat-rate pricing, because it only opens up an opportunity for people to abuse the system. That, inevitably, leads to a discussion about bringing back metered broadband offerings (which are found around the world, but rarely in the US). This is a bad idea for a variety of reasons. First of all, most of these problems would go away if the ISPs in question were more open about their caps. However, much more importantly, if you want to encourage innovation online, it's important to leave flat-rate pricing in place. The second you set up metered broadband, it adds significant transaction costs for both the ISPs and anyone trying to do anything or try anything online. For ISPs, they now have to put in place significantly more tracking equipment and then need to manage the various different levels of service, differential billing and more customer service costs in dealing with customer confusion (or anger if a bill seems too high).

However, the bigger problem is the transaction costs it introduces for users. Suddenly, internet surfers really need to see any particular website or service as being worthwhile. Just the act of making them debate whether or not it's worthwhile to pay up to do something represents a mental transaction cost that will slow down adoption of new services. Furthermore, as bandwidth has increased, many of the newer innovative services have come about to make use of that bandwidth -- which only drives further investment in more bandwidth, driving more innovative uses. It's a virtuous circle. Yet, by metering broadband connections, slowing down adoption of these new services, you slow down the innovation and hold people back from trying out or even creating new, innovative and useful services that would require more bandwidth. It's a recipe for slowing innovation online.

While an executive for the CTIA says that flat-rate pricing only made sense when the internet was first getting off the ground, that represents a false belief that innovation on the internet has slowed down and the internet is now somehow "mature." Instead, internet innovation has been increasing as new apps and services are built on top of older apps and services, leading to greater and greater innovation. If the CTIA exec gets his way and convinces providers to move more to metered bandwidth, then his belief that the internet has plateaued may become a self-fulfilling prophecy, as it'll undoubtedly slow the pace of innovation online. Imagine, for example, that metered bandwidth was common when YouTube first hit the scene? It would absolutely have slowed adoption, because video uses quite a bit of bandwidth and people would have been a lot less likely to test it out. In fact, the same could be said for any kind of non-text multimedia. Podcasts? Why waste that bandwidth? Streaming radio? iTunes would also be more expensive, as every download doesn't just cost $0.99, but your metered bandwidth charge. If you look at history of innovative services, you'll see they tend to move more and more towards flat rate offerings, as it encourages usage and encourages innovation. Phone service and mobile phone service have both trended in exactly this direction -- and in both cases it's because it's opened up a much larger overall market, even if it means less per customer. So, why are we suddenly trying to go the other way with broadband?

Filed Under: flat rates, metered broadband, piggybacking, usage caps

Developers Keep Cracking Away At Mesh Networks

from the maybe-you-can-hear-me-now dept

Mesh networks have been talked about for many years as a wireless networking technology for the future. The basic idea is that instead of having every individual access point or cell site backhauled to a larger network (like the internet or the PSTN), access points can talk to one another, and traffic can hop from one AP to the next, until it reaches one with a backhaul connection. This sounds great, in theory, since it makes it much easier to deploy wireless networks, but mesh networks haven't proven easy to get going in the real world. Still, researchers continue to push forward, with the latest development coming from a Swedish company that says it's got a way for mobile phones to communicate directly with others up to a kilometer away, bypassing a centralized mobile network. While the direct range is limited, the mesh functionality can expand the coverage area.

Assuming the technology actually works well in the real world, it could be a useful way to allow communications in remote areas without mobile networks, while the company behind it says it could also be used to allow for free calls. It doesn't sound as if they have things completely sorted out on the technology front yet, but the bigger problem with getting the technology adopted in the developed world, where traditional mobile networks are common, is that coverage can't be guaranteed. Instead of plunking down a base station (or WiFi access point, etc.) and knowing it will cover a certain area, this sort of mesh network requires that there be a chain of users, each no more than 1km apart, between the two people who wish to communicate. If any part of that chain breaks, the network has to try route around it and hope that there's another way to connect the two parties. This can be a problem, particularly when networks are first launching and there aren't a lot of users around. It's also a hurdle that users in developed nations, where mobile networks are already plentiful -- and relatively cheap -- won't be very willing to overlook.

Filed Under: mesh networks, wireless
Companies: terranet

NTP's Back, And It's Brought More Lawsuits

from the oh-you-again? dept

Everybody's favorite patent troll, NTP, is back. It, of course, was the company that managed to wring $612.5 million out of RIM, maker of the BlackBerry, for patent infringement -- despite the patents in question being on their way to being rejected by the USPTO after a bunch of prior art came to light. NTP has now sued AT&T, Verizon and Sprint, as well as T-Mobile, for infringing on the same patents. RIM's settlement with NTP was widely believed to protect its carrier customers from infringement suits, but it's likely such protection extended only to their use of RIM products, not other mobile email systems. It's not too surprising that NTP sued, since it's a patent troll and that's what they do, though it's slightly curious since the suits were filed in the same Virginia court, with the same judge, as its previous cases. This includes its earlier suit against Palm, which the judge put on hold until after the validity of NTP's patents is finally assessed. It's likely the same thing will happen here, but NTP probably doesn't care too much -- it's just looking for more leverage to wring undeserved settlements and licensing deals out of anybody it can.

Filed Under: patents
Companies: at&t, ntp, palm, rim, sprint, t-mobile, verizon

The 'Ringle,' Or What Passes For Innovation In The Recording Industry

from the something-else-you-won't-want dept

It's no secret that the record labels face a chronic inability to innovate in their business models, choosing instead to continually repackage content and seek ways to force people to buy stuff they don't want in order to get the things they do want. It's this sort of thinking which has brought about the "ringle": a combination of a single and ringtone, and apparently Sony BMG and Universal Music's latest strategy masterstroke. Buyers would get a CD with the full-length track, a B-side or two, and a ringtone for $6-7 -- which doesn't really compare favorably to a 99-cent download and a few bucks for a ringtone (or a download and free homemade ringtone). Is there any real benefit for the consumer here? It's hard to see any, but that's not really surprising. It seems more like an attempt by the record labels to try and deter people from buying single-track downloads, since they don't like the low price and the way they've blown up the album sales model -- which itself is another variation of the "buy stuff you don't want to get the stuff you do" model. It's unlikely that many consumers will fall for it, especially since the CD single is pretty much a dead format. It's probably also worth pointing out that just like the labels try to recycle content, they recycle their innovative ideas as well, since it would appear that Universal tried pretty much the exact same thing in 2004, just calling it the Pocket CD instead of the ringle.

Filed Under: music, music downloads, recording industry, ringtones
Companies: sony, sony bmg, universal music

Some Hospitals Not Just Encouraging Mobile Phone Usage, But Installing Technology To Make It Easier

from the well-that's-nice dept

Remember how hospitals were banning mobile phones out of a fear that the signal would interfere with medical equipment? That turned out to not be much of a problem and soon doctors from around the world were clamoring for the right to use their own mobile phones. A recent study even found tremendous benefits in allowing mobile phone usage in hospitals, including better communication among staff members and lower error rates, thanks to that improved communication. The latest is that some hospitals aren't just allowing mobile phone usage, they're making it possible by installing local antennas to make it even easier for mobile phones to work. The hospitals point out that this is likely to lower the likelihood of interference, as the mobile phones don't have to broadcast as strong a signal if the "tower" is so close. Then, of course, there's the benefit of having happier patients who can more easily stay in touch with friends and family (and also making it easier for those friends and family members to visit). All in all it seems to make a lot of sense, though there are still some holdouts among hospitals that don't feel there's enough evidence to allow mobile phones into hospitals just yet.

Filed Under: antennas, hospitals, interference, mobile phones

Apple Announces New iPods, Cue Fanboy Frenzy, Navel-Gazing

from the ihype dept

Apple refreshed its iPod line today, announcing the long-expected touchscreen iPod among other things. The event was pretty wide-ranging, with a lot to chew on. The biggest early news was the announcement that iPhone owners will be able to create ringtones from songs they've purchased from the iTunes Music Store... for an additional 99 cents on top of the cost of the downloaded track. Perhaps this is an attempt by Apple to throw a bone to disgruntled record companies, but it's likely to call attention to legions of mobile handsets other than the iPhone that will let user set MP3s and other types of audio files as ringtones for free. Apple also sliced the price of the 8GB iPhone by $200, to $399 -- indicating that demand has slowed as demand among diehard Mac fans and other early adopters has been filled. The price cut is probably also a reaction to the iPod Touch, which appears to be an iPhone without any phone, and a similar 8GB model of it has been priced at $299. This may prove to be an attractive alternative to the iPhone for many users, since it has a fairly similar feature set, outside cellular connectivity, including WiFi web browsing -- but comes at a lower upfront cost, plus without the need for a long-term contract with AT&T.

Perhaps the most curious announcement, though, was news of an Apple partnership with Starbucks. iPhone and iPod Touch users will eventually see an extra icon on their screen when they're within range of a WiFi-enabled Starbucks. The application it leads to will allow them to see what songs are playing in the store, and buy them from the iTMS, and they can also access the iTMS without having to pay usage fees for the hotspot. On the face of it, it's a pretty underwhelming offering, just like all of Starbucks' previous attempts at digital music downloads, and the fact that Steve Jobs claimed Apple had been working on it for two years is hardly reassuring. Despite Jobs' contention that the service is "very cool", it's hard to see it selling more iPods, or making much money on its own.

Filed Under: iphone, ipod, itunes
Companies: apple, at&t, starbucks, t-mobile

FCC Not Convinced To Just Hand Over Spectrum To Startup In Exchange For Potential Future Profits

from the FCC-prefers-its-money-upfront dept

In May of 2006, a VC-backed startup called M2Z petitioned the FCC to hand over some spectrum for free in exchange for a cut of future potential revenues. As you're probably quite aware, the FCC has been focused lately on auctioning off slices of spectrum to private companies for use in various wireless projects. The spectrum seems to only be getting more and more valuable as demands for potential wireless applications and services increase. Of course, as we've seen in the past, these spectrum auctions don't always work out so well, with companies overbidding and being unable to actually do much with the spectrum. Part of the problem is that the FCC wants to put all sorts of rules on the spectrum usage, rather than letting it be used for whatever makes the most sense, like some other countries.

However, the M2Z proposal seemed pretty questionable in its own way, promising nothing up front, and then making plenty of promises on the backend. The company claimed it would cover 95% of the country in broadband in 10 years, would have a "free" tier that was relatively slow and filtered, a more expensive upper tier, as well as offering priority for public safety uses. It may have been intriguing simply for the fact that it was different, but the FCC wasn't convinced. As has been expected for quite some time, the FCC has rejected the proposal, though some believe that the debate over this topic may eventually lead to good things from the FCC with the spectrum it's going to release in the near future. Of course, in the end all this really highlights is that the FCC still is focused on dribbling out bits and pieces of spectrum using different rules and regulations each time -- rather than coming up with a truly comprehensive spectrum allocation plan. Of course, some of us have been pointing this out for years, and the FCC never seems to get any closer to a comprehensive spectrum allocation policy -- and the country continues to suffer for it.

Filed Under: fcc, spectrum, spectrum auction, spectrum policy, wireless
Companies: fcc, m2z