Ed Markey’s at it again, this time meddling in the wireless services market. He has a new bill out which is aimed at wireless carriers primarily (see my post on his previous effort here.)

From the preamble, which lays out the context for the proposed legislation:

(2) Wireless service has become a replacement for traditional telephone service for millions of consumers in the United States.
(3) As wireless service is increasingly used and relied upon by residential and business consumers, such consumers will increasingly depend on Federal and State authorities to apply and enforce essential consumer protections applicable to such service in a manner commensurate with the role such authorities have played in ensuring consumer protection with traditional telephone service.

So, the key argument here is that, since wireless services are replacing wireline services for at least some people, the same (or similar) “consumer protection” provisions are required for wireless services as have previously been made for wireline services. Before I got to the second half of (3) above while I was reading it, I assumed it was going to say “the same protections as are applied to other commercial businesses under existing US law.” Because that’s the logical thing to say: wireless consumers should be subject to all the same consumer protection provisions as consumers of any other product or service. Why do we need special rules for wireless services?

In Section 101 (a) (1) we get to the meat of the matter. The Bill proposes that carriers should have to disclose to consumers the complete terms of any plan they’re signing up for, including the duration of the plan, the number of minutes included (although no mention of data transfer), any trial period, “the terms of subsidizing any wireless customer equipment” (whatever that means), and information on early termination and other non-recurring fees. Carriers also have to disclose up front any and all charges, including taxes (which could be tricky since they change from time to time, as do charges).Now, in and of itself, this is reasonable enough, but isn’t the bulk of it covered by existing consumer protection laws? And if not, why does the wireless industry have to be different from other industries?

Section 102 deals with early termination fees. The first requirement is:

each commercial mobile service provider to offer a wireless service plan for which there is no early termination fee;

Which would presumably be covered by prepaid plans, now offered by all major carriers. Which makes this a bit of a hollow provision. Section (2) adds:

that if a commercial mobile service provider offers such plans with subsidized wireless customer equipment, such provider shall offer to consumers the opportunity to purchase subsidy-free wireless customer equipment in return for the ability to secure service, without a long-term wireless service plan, at a price no higher than a comparable wireless service plan offered with subsidized wireless customer equipment;

Now, some people have assumed this means that AT&T would have to offer unsubsidized iPhones. I’m not sure it does, since it doesn’t specify that customers shall get the same “wireless customer equipment”. At the very least, this is an easily exploitable loophole. But it’s not clear that Markey’s intention is even to force de-subsidization of all handsets, just the option to buy one or more handsets in this way. Of course, Verizon Wireless has already announced that it plans to allow customers to attach any phone that meets basic requirements to its network, and AT&T and T-Mobile as GSM carriers offer this option by default.

Section (3) requires that early termination fees (ETFs) must be prorated over the life of the contract, and that the proration is just based on the cost of subsidizing handsets (which suggests that ETFs should be different for each handset rather than standardized).

Then we get onto wireless coverage maps, which must be provided by each carrier, and which must depict sufficient detail that they show

(A) generally geographic areas where commercial mobile service is not predicted to be regularly available; and
(B) whether or not a consumer is predicted to receive commercial mobile service in the general geographic area in which such consumer’s primary residence is located, to the extent prediction of reception in such area is feasible using the formats specified in paragraph (1).

“General geographic area” is just vague enough to be completely useless. All carriers provide some kinds of maps for coverage - see:

• T-Mobile
• AT&T
• Sprint
• Verizon Wireless

These tend to provide enough detail to see if your street gets coverage, and that’s about all that can reasonably be expected. So what’s the point of this provision? To be really useful, these maps need to tell you whether you can get coverage inside your house (which is where most people have problems) but that’s impossible. So again, this feels pretty pointless, especially given the fact that the carriers are already providing such maps without legislation requiring them to.

Markey also wants the carriers to do the government’s dirty work for it:

to require that any charge specifically required by a Federal, State, or local statute, rule, regulation, or order to be collected from a subscriber be listed in a separate section of each bill sent to a subscriber and itemized separately in clear and plain language;

Section 105 is the “create employment in the wireless industry section” (not really, but it could be), since it requires potentially huge amounts of disclosure on the part of the carriers about their coverage, signal strength and other items. This seems to be covering more or less the same ground as the mapping question, but could potentially go a lot further in the hands of an interventionist FCC.

Now onto contract extension. The bill requires that customers not be provided contract extensions unless:

the subscriber agrees to extend such plan by providing express consent to such extension

Cue angry customers a few months from now wondering why the heck their cellphone service has been cut off when they pay their bill every month, because the alternative to extension is cessation of service, and we all know a lot of customers won’t respond in time.

We now get to the Verizon clause. Apparently, the fact that Verizon has offerered a 30-day trial period (its “Worry Free Guarantee“) means not that the market will take care of this on its own, but that everyone should be forced to do it. At least the bill doesn’t require carriers to pay back any fees racked up during those 30 days as Verizon has willingly agreed to do.

This Worry Penalty Free option is pretty ironclad:

a wireless service plan may be canceled upon the request of a subscriber for any reason during the 30-day period that begins on the date on which such plan was executed.

Note: “for any reason” - i.e. just if they feel like it, or if they enjoy hopping from carrier to carrier just to drive them nuts and cost them money by forcing them to restock used devices and sell them at a discount. And this next point is not quite clear either:

If a subscriber exercises the right to cancel such plan under paragraph (1), a subscriber shall receive a pro rata refund of the charges, if any, paid for wireless customer equipment used in conjunction with such plan if such equipment is returned during such 30- day period.

What’s pro rata about buying a phone? If they mean that carriers can charge a reasonable re-stocking fee, that seems sensible, but there’s nothing pro rata about that.

I’m not going to dwell on the wireless broadband stuff or the spectrum efficiency stuff at the end but might come back to that later.

Overall, this feels like more intervention in a market which has generally done very well by consumers in terms of providing good service at declining prices and offering compelling devices and services. Yes, there are transparency issues, and yes, there are misunderstandings about contracts, but I believe these can be addressed under existing laws and through market-based incentives (just look at that Verizon Worry Free Guarantee and the presence of coverage maps on all the major carriers’ sites as examples). We really don’t need more legislation in this area.

This great graphic illustrates that, for all that we’ve become a global economy, the world is flat, and so on, there are still very marked differences across the world in the proliferation of social networking, and in the specific platforms which have caught on in different parts of the world.

Google’s Orkut has famously been very popular in Brazil, but it’s interesting to note that Facebook, which is second to MySpace in the US, is ahead of it just across the border in Canada. Factors such as early adoption, language options, tie-in to other products and so on all have an impact, but the result is this huge fragmentation. Given the massive network effects that accrue to a provider once they become big, it’s hard to imagine any single provider ever becoming dominant across large swathes of the world.

Chris Brogan has an interesting post up today about what he wants from social networking etc.:

We’ve got OpenID. We have OpenSocial. We have cross-platform IM clients like Adium and Pidgin. We have life stream aggregators like Friend Feed, Spokeo, and Lijit.

I want the following to be product features of something cross-platform, and I want it soon-ish:

• Friends list portability.
• Proximity-based social networks.
• Mesh networking widely built into laptops.
• A Network Communicator (that allows for IM, Voice, SMS, Status, Presence, and a platform for commands (like “follow” and “@”). I want this communicator to work the same way on Twitter, Facebook, LinkedIN, my IM client, etc, the way a cell phone just cares about connecting the call, not which network you’re reaching.
• Granular, modular grouping of friend data.

At the end of the post, he asked, “What do you want?” I responded as follows in the comments, along the same lines as this post from a while back.

I have been doing some similar thinking and posted on this topic over on my own blog. I think that ultimately what I want is:

• one place to input my data, friends’ names, email addresses etc.
• one place to check on everyone else’s (ideally the same place as the first)
• one tool to communicate with all of those people

The fact that data sent from/to that one place passes through / ends up in other platforms like Facebook/MySpace/Twitter etc. is irrelevant in some ways. I can always go and check it there if I happen to like a particular format or way of presenting it, but I want to have a single place (I use the word “place” - I guess site or even service or application would work too) to manage it all from. Then it’s less about data portability (since my data never moves - at least its home doesn’t) and more about APIs that allow me to plug my data in / feed data out of other services as needed. I think whoever figures out how to do all that will make a lot of money, and destroy advertising revenue streams on the social networking sites in the process. (just think what offline messaging has done to that aspect of Facebook’s site traffic).

It’s an idea I want to expand on some more in future posts. I’m surprised Chris hasn’t had more feedback on the idea yet.

In my post on the flat-rate wireless plans being launched in the US recently, I suggested that Sprint might take the route of:

charging $99 or slightly more for a plan that would include unlimited voice and messaging and/or data usage.

I didn’t explain this at the time (although I seem to have been right I have no insider information here and it was still just an educated guess), but my thinking here was that Sprint would want to undercut the others, but would also want to do it in such a way that it kept ARPU high while providing for its growing base of unlimited data customers (both personal and business users).

By throwing everything into the package Sprint is going after the power users on all networks. But it is also effectively capping ARPU at $99, including data, which means it’s closed off the only real avenue to future growth, which is data revenue. The plan includes:

unlimited voice, data, text, e-mail, Web-surfing, Sprint TV(SM), Sprint Music, GPS Navigation, Direct Connect(R) and Group Connect(R).

So almost every revenue-generating service Sprint has. For business users, there will still be the opportunity to sell additional productivity, horizontal and vertical applications, but it’s really maxed out for consumer users. Now, a $100 ARPU isn’t bad, and certainly a lot higher than Sprint’s current average, but who’s to say this is where the price will stay?

And since this was announced on the same day that Sprint suggested they will lose 1.2 million postpaid subscribers in the first quarter, it’s going to have to be a heck of a powerful shovel if Sprint’s going to dig its way out of that hole.

Google Sites launches today - the result of the acquisition and subsequent integration of JotSpot, a hosted wiki provider. It promises to be a useful application, allowing organisations to pull together calendars, wiki-style websites, documents (through Google Docs) and so on into an intranet-style site. It will bring Google ease of use to the hitherto cumbersome process of creating a wiki and have the benefit of integrating other Google properties and services.

However, one major thing is missing, and that’s the ability to create a Google Site for anything other than a school or company. The login screen (shown here) asks for your “school or work email address”. What it means is “give us your domain name so we can figure out which Google Apps customer you’re part of.” All this new functionality is tied into the wider Google Apps family, which is designed for organisations which want Google to more or less provide hosted domain services.

There’s a logic to this, and if you’re an organisation using Google Apps already, you’ll want Sites to tap into that infrastructure. But what if you’re not using Google Apps already, and what if you’re an organisation other than a business or school, such as a charity, a sports team, a PTA or other similar entity? You won’t want to own or register a domain name, and the degree of integration you’ll need with other users will be minimal. You’ll still want to share calendars and news, create a website and use at least some of the other functions of Sites, but this won’t be possible for now:

Google Apps Team Edition is designed to help users easily collaborate with colleagues and classmates within their organizations. Because the service is intended for use within schools and businesses, you won’t be able to sign up using an individual email address, such as:

• user@gmail.com
• user@yahoo.com
• user@hotmail.com
• user@aol.com

If you wish to use Google services with your personal email address, we recommend creating a Google Account. Please note that if you’re using Gmail, you already have a Google Account and can add other services to this account. Google Accounts currently include all the services offered in Google Apps except for Google Sites - at this time Sites can only be used in Google Apps.

If you want to use Google Apps instead of a Google Account and you don’t have an email address issued by a school or business, you may wish to try Google Apps with domain registration.

In other words, the only way you can get around this at the moment is by registering a domain (with Google or otherwise) for the sole purpose of using Sites. This feels like a totally unnecessary imposition for an organisation which wants to use the functionality but doesn’t want a domain.

As an example, I work with other adults to run our Church congregation’s program for teenage boys. We use Google Docs to keep track of calendaring (ideally we’d use Google Calendar, and perhaps someday we will) and various other methods such as group emails and several Facebook groups to communicate with each other and the boys. How much easier would it be if we could centralise everything in Google Sites - calendars, announcements, the latest information on upcoming events and so on? But we can’t do it without registering a domain first. How frustrating. Hopefully Google will expand the availability to other groups soon.

“ABC thinks you’re an idiot” says Marc Andreessen. And I’m tempted to agree. This goes back to a previous post. The theme is that ABC (and others, including cable companies) are trying to prevent consumers from fast-forwarding shows when they watch them on demand, in a trend that has been going on at least since 2005. This is yet another example of media companies fighting their customers tooth and nail when it comes to advertising. Instead of accepting that customers don’t want advertising and trying to find another business model, or simply raising prices to make up for the fact that customers aren’t watching the ads, these companies insist on trying to enforce the same old business model.

There’s a fair amount at stake here, to be sure. Total advertising spending in the US in all media is estimated to have been $155 billion or so in 2007 according to TNS, with the biggest single category being Internet spending (although only because TV is broken up into several sub-categories). However, taking Comcast as an example, it made $1.5 billion from advertising in 2007, compared with $17.7 billion from video services, so it’s less than 10% of total revenues from TV for the cable companies.

Surely the combined brains of the television networks and the cable companies, together with the satellite guys and new telco competitors, can come up with some way to offset these declines as people make more use of DVRs and on demand programming. Otherwise, we’ll begin to think that they - and not we - are the idiots.

Slate has a piece up about how supposedly “democratic” web apps like Digg and Wikipedia are actually undemocratic, because a smaller number of users is responsible for a large amount of the activity on them. This is representative:

Social-media sites like Wikipedia and Digg are celebrated as shining examples of Web democracy, places built by millions of Web users who all act as writers, editors, and voters. In reality, a small number of people are running the show. According to researchers in Palo Alto, 1 percent of Wikipedia users are responsible for about half of the site’s edits. The site also deploys bots—supervised by a special caste of devoted users—that help standardize format, prevent vandalism, and root out folks who flood the site with obscenities. This is not the wisdom of the crowd. This is the wisdom of the chaperones.

I disagree with the basic premise here - that these sites are meant to be democratic, if that means each user has an equal voice. The vast majority of us will use Wikipedia as a resource, rather than being contributors to it, and we’re absolutely fine with that. We have no interest in contributing articles to it, and would be annoyed if we were required to do so in order to make use of the material that’s already there. Think about the profile of those who do contribute - they have to fall into one or more of the following categories:

• they are particularly knowledgeable about a particular subject or subjects - which is a category restricted to a minority of the population for starters
• alternatively, or as well, they have time to spend creating and editing articles on Wikipedia - again, most of us don’t
• they feel strongly enough about a subject that they are willing to use what time they do have (or time they don’t, when they should really be working / studying / watching the kids etc.) to engage in this activity
• they are willing to go through the painstaking process of adding content to Wikipedia, which is not all that user-friendly and requires ever more familiarity with the rules and regulations that apply there, as well as the possibility that everything they write could be deleted or edited beyond recognition.

There’s no way that any of these alone, and certainly the combination of two or three of them, is ever going to cover anything other than a small percentage of the population. And that’s reflected in the number of people who actually contribute articles to Wikipedia. Should this surprise us? No. Is it a bad thing? No - why should it be? Is the merit of Wikipedia that it is “democratic” in the sense this article’s author has in mind? No - it’s that it brings together vast resources from across the web and elsewhere to answer questions and provide information. I can’t remember the last time I had a question about something I couldn’t get at least a cursory answer from Wikipedia on (Joe Torre’s age? Check. A definition of SOA? Check. When the first time was Ralph Nader ran for President? Check).

As for Digg, the author may have more of a point there, since it does seem there is at least some evidence of super-users. I’m not a fan of Digg - I find the interface really unattractive and non user-friendly (others have done better on both those counts) and the range of stories which appear there too diverse to be useful. I prefer filtering my own news through Google Reader and other sources.

On the whole, though, the article feels like it sets up a strawman in order to knock it down - holding these sites up to a standard they have never aspired to. And in the process it misses the point - these sites are phenomenally useful, at least in part because they are more “representative democracy” than direct democracy (much like the US system itself), with most of us willing to delegate authority to others who are better placed and willing to dedicate their time and effort to something we ourselves are not.

Following on from my post about Wordpress being down a few days ago, Pingdom has put out some statistics on downtime for various social networks in 2008 so far:

Bebo	www.bebo.com	12h 28m
Windows Live Spaces	spaces.live.com	7h 25m
Friendster	www.friendster.com	6h 0m
hi5	www.hi5.com	5h 5m
Reunion.com	www.reunion.com	2h 55m
LinkedIn	www.linkedin.com	4h 0m
Classmates.com	www.classmates.com	2h 5m
Facebook	www.facebook.com	1h 35m
Orkut	www.orkut.com	1h 10m
Last.fm	www.last.fm	1h 10m
Xanga	www.xanga.com	45m
MySpace	www.myspace.com	25m
LiveJournal	www.livejournal.com	10m
Yahoo! 360	360.yahoo.com	5m

Interesting that Yahoo! 360 does best, while Windows Live Spaces is second worst - which would be more likely to follow the other should the merger go through? Given that Microsoft’s propensity for “downtime” extends into the offline world with the frequent crashes of its desktop operating systems and software, that seems a hard trend to buck, but who knows?

There’s an article in Monday’s Wall Street Journal by Andy Kessler, who is a former hedge fund manager and writes books. And it’s a good example of how not to argue against net neutrality.

It’s such a muddled argument that it seems for at least half the time as if he’s arguing for the other side. He gets his facts wrong (suggesting Comcast blocks P2P downloads rather than uploads), makes invidious comparisons (because Comcast’s packet reset technique is the same as used by China to censor content the two are apparently in the same boat) and generally seems to be uninformed about the debate or the current state of the market. He mentions AT&T as a competitor to cable, but only as a provider of DSL services (he either doesn’t know about or conveniently forgets to mention its fibre rollout, which is delivering substantially faster speeds), and he doesn’t seem to know about Verizon, which is rolling out fibre too.

His solution is to drive more competition, which would apparently stimulate a rollout of fibre (ahem - see previous paragraph). Qwest is also rolling out fibre to the node in 23 of the markets it serves in 2008. He does seem to acknlowedge this fact later on but only in the context of this paragraph:

Municipal or privately run wireless data services using Wi-Fi or WiMax should be sprouting like weeds. But they aren’t being built because of lack of access to street lights, of all things, to set up access points. Verizon is busy rolling out a fiber optic service, FIOS, that will provide much higher speeds and real competition to Comcast. But it is slow going, as state by state video franchise rules still favor cable over any newcomers.

He seems to be unaware that several attempts have been made to run municipal WiFi and on the whole they’ve been flops, not because of access to street lights (which, in municipal deployments, aren’t a problem) but because the technology and business model are lousy. WiMAX is being deployed by Towerstream and Clearwire among others, with Sprint set to follow, but it too is unproven as a technology which would compete effectively with fibre rollout. And his details on FiOS are also a little out of date - it’s been some time since Verizon complained about franchising, since it’s actually making very good progress on that front with help from national and state-wide efforts to ease franchising processes.

My favourite line, though, has to be this one:

We have faux competition, cable monopolies versus phone monopolies

Does anyone want to volunteer to help Mr Kessler with a definition of the word monopoly?

Another great set of paragraphs:

A stroke of a pen can cure these ills, incumbents be damned. They will adjust. I personally would climb telephone poles on my street to run fiber if I could get 100 megabit Internet service. Any takers? Talk about an economic stimulus; this is the type of infrastructure we need. The stock market will fund it all as well as resolve overbuild problems.

Don’t think of Internet access as a static business — someone put in phone lines 50 years ago or cable lines 20 years ago, and we are stuck with their limitations. Technology changes the game every few years. Even fiber lines put in today will be obsolete within 10 years and need upgrading. Same for wireless systems.

The trick to an open and innovative Internet is not sneaky technical fixes nor more rules and regulations and bureaucracies to enforce them. The Internet will only expand based on competitive principles, not socialist diktat. The more we can do to clear a path, the greater our national wealth will be. Comcast did us a favor by bringing this net neutrality debate out in the open. I hope the FCC doesn’t fall for this lousy idea.

I love the way that he’s proposing massive new regulations on incumbents in the form of rights of way and pole access, but also decries “socialist diktat”. What’s the difference, Mr Kessler? If the government should be getting out of the way, then let them get out of the way. Don’t go backwards to where we were two to 12 years ago, when the kind of access he’s proposing was part of the failing regulatory regime. Competition is thriving. Yes, in most areas it’s currently a duopoly between cable and telco, but wide area wireless broadband through the cellphone companies and WiMAX-based providers are potential competitors too, and all because government finally got out of the way and stopped trying to create competition through regulation, allowing the market to work.

I attended Qwest’s analyst day today in New York. New CEO Ed Mueller and CFO John Richardson spoke, and were joined by fellow executives John Yost and Stephanie Comfort for Q&A at the end.

It was a brief meeting - just two hours of presentations - followed by individual one-one-ones by Ed and John for some of the attendees, including yours truly.

The company’s come a long way since I first started following it, digging its way out of massive debt and big losses and back to reasonably respectable, if not stellar, profitability, and roughly stable revenues. And the company is forecasting more of the same, with an outlook of either stable or slightly declining revenues in 2008, with slightly higher profits.

The most telling thing about the event is that Qwest is taking a markedly different tack from the other big US carriers, and possibly from most other carriers in the developed world. Telecoms has always been a growth business, which is part of what drives valuations of tech stocks, and Verizon and AT&T certainly appear to be chasing that goal. But Qwest appears, at least temporarily, to have abandoned that goal, or at least to have set it aside, in favour of a focus on margins and free cash flow.

A lot of the talk during the meeting was about partnerships, but with the main focus on two partnerships that don’t drive a lot of revenue for the company - DirecTV and Sprint. Qwest is building out a fibre to the node network in 23 markets, covering 1.5 million households, in 2008, at a cost of $300 million, but it has no plans to deliver TV services over those cables. Instead, it will focus on faster broadband speeds, which it hopes will deliver higher prices and therefore raise ARPU, providing it with a revenue lift, while relying on the DirecTV partnership for TV services. Since it only makes around a 15% commission on those DirecTV sales, compared with Verizon and AT&T’s full revenue recognition from their TV sales, this is a pretty different strategy, and unlike to change substantially, although Mueller is planning to explore services like video on demand to integrate DirecTV and Qwest capability.

On the wireless side, the company is planning to rethink its partnership with Sprint and form a new partnership (possibly with Sprint again but likely with someone else) which would provide deeper integration but also a portfolio for Qwest that would more closely mirror its competitors’. Mueller appears confident that he can get this, but given that Sprint has historically been much more aggressive about MVNO activities than the other major wireless carriers, and Verizon and AT&T have very little incentive to play ball, I’m not hopeful. It looks like Mueller may be a little naive in this respect.

For what growth Qwest is chasing, it’s going to rely on that boost in broadband ARPU, more bundling to reduce churn in access lines, and better business revenues, from gaining share and starting to see results from the Networx contract. This doesn’t seem too unreasonable, although other than adding 250 salespeople it wasn’t obvious what was really going to change. Mueller appears to believe that the investments made by his predecessor are just now becoming aligned in such a way as to provide a platform for growth, but all the execution still lies ahead, and this may be another area where his optimism is ahead of reality. All that remains to be seen, however. I wish them luck, at any rate.